Gov't Emps. Ins. Co. v. Knutson
| Decision Date | 06 November 2020 |
| Docket Number | Civil No. 20-503 (DWF/LIB) |
| Citation | 499 F.Supp.3d 618 |
| Parties | GOVERNMENT EMPLOYEES INSURANCE COMPANY, Plaintiff, v. Christina Marie KNUTSON; Melissa Amandalee Mayo; Dana Mayo; Jason Tomporowski, as trustee for the next-of-kin of Michelle Lee Young, deceased; James Young, Sr.; Cheryl Young; and Sarah Young, as trustee for the next-of-kin of James Leon Young, Jr., deceased, Defendants. |
| Court | U.S. District Court — District of Minnesota |
Lauren E. Nuffort and Michelle K. Kuhl, Lommen Abdo, P.A., counsel for Plaintiff Government Employees Insurance Company.
Paul J. Rocheford, Arthur, Chapman, Kettering, Smetak & Pikala, PA, counsel for Defendant Christina Marie Knutson.
Peter W. Riley and Matthew J. Barber, Schwebel Goetz & Sieben, P.A., counsel for Defendants Melissa Amandalee Mayo; Jason Tomporowski, as trustee for the next-of-kin of Michelle Lee Young; and Sarah Young, as trustee for the next-of-kin of James Leon Young, Jr.;
Dennis S. Berry, Berry Law Offices, counsel for Defendant Dana Mayo.
Nathaniel A. Dahl and Derek I. Stewart, Meshbesher & Spence, Ltd., counsel for Defendants James Young, Sr., and Cheryl Young.
This is a declaratory judgment action brought under 28 U.S.C. §§ 2201, 2202. Defendant Christina Marie Knutson was involved in a fatal motor vehicle accident with a group of motorcycles. The injured survivors and the decedents’ estates commenced lawsuits against Christina Knutson for damages arising from that accident. Plaintiff Government Employees Insurance Company ("GEICO") seeks a declaration that it does not have a duty to defend or indemnify Christina Knutson in those lawsuits. The parties have stipulated to the relevant facts and filed cross-motions for summary judgment. As stated at the hearing, all parties agree that a decision on the legal question at issue in these motions fully resolves this matter. (See also Doc. No. 55.) For the reasons discussed below, the Court grants GEICO's motion.
On July 7, 2018, Christina Knutson was operating a 2005 Chevrolet Monte Carlo and was involved in a motor vehicle accident at the intersection of Minnesota State Highway 23 and Kandiyohi County Road 2 in Kandiyohi County, Minnesota. (Rule 26(f) Report ¶ a(4)(5), Doc. No. 24.)1 The 2005 Chevrolet Monte Carlo was owned by Christina Knutson's father, Neil Knutson, of Karlstad, Minnesota. (Id. ¶ a(4)(6).) Neil Knutson furnished the 2005 Chevrolet Monte Carlo to Christina Knutson for her regular use. (Id. ¶ a(4)(7).) The 2005 Chevrolet Monte Carlo was insured by Neil Knutson under an automobile insurance policy issued by Progressive Direct Insurance Company. (Id. ¶ a(4)(5); Aff. of Mathew J. Barber Ex. 1, Doc. No. 37.) Christina Knutson is not listed as a driver or resident relative on Neil Knutson's Progressive policy. (Barber Aff. Ex. 1 at 1.)
Christina Knutson lived with her mother, Amy Knutson, in Bricelyn, Minnesota. (Rule 26(f) Report ¶¶ a(4)(1), a(4)(3)–(4).) GEICO issued an automobile insurance policy to Amy Knutson for a 2016 Nissan Rogue. (Rule 26(f) Report ¶¶ a(4)(1)–(2); see generally GEICO Policy.)2 Christina Knutson is not listed on Amy Knutson's GEICO policy as a named insured or an additional driver. (GEICO Policy at 2.) Amy Knutson and Neil Knutson are divorced and do not reside in the same household. (Rule 26(f) Report ¶ a(4)(8).)
GEICO's insurance policy for Amy Knutson's 2016 Nissan Rogue covers "damages ... which an insured becomes legally obligated to pay ... arising out of the ownership, maintenance or use of the owned auto , a non-owned auto or a rental vehicle ." (GEICO Policy at 24 (emphasis in original).) An "owned auto" is defined by the policy as:
(GEICO Policy at 6 (emphasis in original).) A "non-owned auto" is (GEICO Policy at 6 (emphasis in original).)
A "rental vehicle" is a vehicle "loaned to you or a relative as a replacement for an owned auto being serviced or repaired" for less than one month. (GEICO Policy at 6 (emphasis in original).)
Because Christina Knutson was provided the 2005 Chevrolet Monte Carlo for regular use by Neil Knutson, GEICO asserts it does not constitute an owned auto, non-owned auto, or rental vehicle under its policy, meaning GEICO has no contractual obligation to provide coverage to Christina Knutson under Amy Knutson's policy for the 2016 Nissan Rogue. Defendants assert this exclusion of liability coverage runs afoul of Minnesota law and that, as a result, GEICO is obligated to cover Christina Knutson's use of the 2005 Chevrolet Monte Carlo as a resident-relative of Amy Knutson.
The Declaratory Judgment Act provides, "In a case of actual controversy within its jurisdiction, ... any court of the United States, upon the filing of an appropriate pleading, may declare the rights and other legal relations of any interested party seeking such declaration." 28 U.S.C. § 2201(a). The parties seek a declaration of rights under GEICO's automobile insurance policy.
This lawsuit asks the Court to interpret provisions belonging to the Minnesota No-Fault Automobile Insurance Act ("No-Fault Act"), Minn. Stat. §§ 65B.41 - 65B.71. "Interpretation of an insurance policy is a matter of state law." Allstate Indemnity Co. v. Rice , 755 F.3d 621, 623 (8th Cir. 2014) (cleaned up). "In interpreting state law, we are bound by the decisions of the state's highest court." Minn. Supply Co. v. Raymond Corp. , 472 F.3d 524, 534 (8th Cir. 2006) (internal quotation omitted). "When a state's highest court has not decided an issue, it is up to this court to predict how the state's highest court would resolve that issue." Id. "Decisions of intermediate state appellate courts are persuasive authority that we follow when they are the best evidence of what state law is." Id.
Minnesota's "well-settled general rule in the construction of insurance contracts" permits parties "to contract as they desire, and so long as coverage required by law is not omitted and policy provisions do not contravene applicable statutes, the extent of the insurer's liability is governed by the contract entered into." Am. Family Mut. Ins. Co. v. Ryan , 330 N.W.2d 113, 115 (Minn. 1983). Minnesota's "jurisprudence concerning the No-Fault Act ... is extensive and well developed." Pepper v. State Farm Mut. Auto. Ins. Co. , 813 N.W.2d 921, 925 (Minn. 2012). Minnesota courts "determine whether an exclusion in an insurance contract violates the No-Fault Act ... by first considering whether the terms of the exclusion are unambiguous." Id. at 927 (citing Latterell v. Progressive N. Ins. Co. , 801 N.W.2d 917, 920 (Minn. 2011) ). "If the terms of the exclusion are unambiguous, [courts] then consider whether the exclusion omits coverage required by the No-Fault Act or contravenes the No-Fault Act." Pepper , 813 N.W.2d at 927 ().
Here, the terms of the exclusion are unambiguous. GEICO insures damages "arising out of the ownership, maintenance or use" of an owned auto, a non-owned auto, or a rental vehicle. (GEICO Policy at 24.) By operation of the definitions of owned auto, non-owned auto, and rental vehicle, GEICO excludes coverage for vehicles furnished for an insured's regular use not listed under the policy. Put more simply, because the 2005 Chevrolet Monte Carlo was not specifically listed in the GEICO policy, was not a rental vehicle to replace a specifically listed vehicle in the GEICO policy, and was not otherwise used in a temporary fashion, it is excluded from coverage. The parties do not dispute that GEICO's policy excludes resident-relatives like Christina Knutson from coverage if the vehicle they are driving is furnished for their regular use. The Court moves next to the question of whether this regular-use exclusion omits coverage required by the No-Fault Act or contravenes the No-Fault Act.
The parties focus on the application of Minn. Stat. § 65B.49, subd. 3(2), which reads:
Under residual liability insurance the reparation obligor shall be liable to pay, on behalf of the insured, sums which the insured is legally obligated to pay as damages because of bodily injury and property damage arising out of the ownership, maintenance or use of any motor vehicle, including a motor vehicle permissively operated by an insured as that term is defined in section 65B.43, subdivision 5, ....
(emphasis added).3 An "insured" is defined as the policyholder and also includes relatives of the named insured "residing in the same household with the named insured" who are "not identified by name in any other [insurance policy] as an insured." Minn. Stat. § 65B.43, subd. 5. Christina Knutson constitutes an "insured" as defined by Minn. Stat. § 65B.43, subd. 5, for purposes of § 65B.49, subd. 3(2), because she is not identified by name in Amy Knutson's GEICO policy, Neil Knutson's Progressive policy, or any other automobile insurance policy, and she resides in the same household as Amy Knutson, the named insured.
"The No-Fault Act attempts ...
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