Heitkamp v. Milbank Mut. Ins. Co., 11005
| Decision Date | 19 March 1986 |
| Docket Number | No. 11005,11005 |
| Citation | 383 N.W.2d 834 |
| Parties | Jerome HEITKAMP and Richard Paul Heitkamp, Plaintiffs and Appellees, v. MILBANK MUTUAL INSURANCE COMPANY and LeRoy Hout, Defendants and Appellants. Civ. |
| Court | North Dakota Supreme Court |
Vogel, Brantner, Kelly, Knutson, Weir & Bye, Fargo, for plaintiff and appellee Jerome Heitkamp; argued by John D. Kelly.
Smith & Strege, Wahpeton, for plaintiff and appellee Richard Paul Heitkamp; appearance by R.E.T. Smith.
Conmy, Feste, Bossart, Hubbard & Corwin, Fargo, for defendant and appellant Milbank Mut. Ins. Co.; argued by Wickham Corwin.
Degnan, McElroy, Lamb, Camrud, Maddock & Olson, Grand Forks, for defendant and appellant LeRoy Hout; argued by Gerald J. Haga.
The defendants, Milbank Mutual Insurance Company (Milbank) and LeRoy Hout, have filed separate appeals from an amended judgment, dated May 17, 1985, of the District Court of Richland County. We affirm.
During January 1981, Richard Heitkamp was involved in an accident while driving a 1973 Chevrolet pickup owned by his father, Jerome Heitkamp. The driver of the other vehicle, Arlyn Staroba, was killed, and his wife, Carol, brought a wrongful death action against Richard and Jerome. Following a jury trial, judgment was entered against Jerome and Richard for damages of approximately $300,000. A more detailed account of the 1981 accident and the Staroba lawsuit is provided in Staroba v. Heitkamp, 338 N.W.2d 640 (N.D.1983); further elaboration of those matters is unnecessary to the resolution of the issues in this case.
At the time of the accident, Jerome's pickup was insured under an automobile insurance policy issued by Milbank with liability limits of $50,000 per person and $100,000 per incident. At that time, Jerome also carried a farm liability insurance policy issued by Milbank with a $300,000 liability coverage limit. Milbank denied coverage under the farm policy but conceded that the accident was covered by the automobile insurance policy. Milbank retained counsel to represent Richard and Jerome in all aspects of the Staroba action against them, and Milbank paid the $100,000 limit of the automobile policy toward the resulting adverse judgment. The outstanding balance owed by Jerome and Richard on the Staroba judgment following Milbank's payment is the amount of $229,129 plus accrued interest.
Jerome and Richard subsequently brought this action seeking full indemnity from Milbank for the judgment against them in the Staroba action. In support of their request for full indemnity, Richard and Jerome asserted that the 1981 accident was covered under the farm liability policy. In a separate count alleging negligence, Richard and Jerome sought indemnity on the grounds that Milbank's agent, LeRoy Hout, misrepresented the coverage which was afforded under the farm liability policy and that Milbank and Hout negligently failed to inform Jerome that the liability coverage under his automobile insurance policy was inadequate and that additional coverage might be available to him upon request.
The case was tried before a jury, which returned a special verdict finding liability against Milbank under the farm liability policy upon the Heitkamps' contract theory of recovery. The jury also found liability against Milbank and Hout on the negligence theories of failure to advise Jerome as to the adequacy of his automobile liability insurance coverage and of negligent misrepresentation of the coverage afforded by the farm liability policy.
Based upon the jury's verdict, the district court entered a judgment awarding Jerome and Richard full indemnity against Milbank under the farm liability insurance policy for the Staroba judgment in the amount of $244,529.47. As an alternative judgment, "in the event that the decision of the jury and the court" regarding Milbank's liability under the farm liability policy "should be set aside for any reason," the court awarded Jerome and Richard indemnity against Milbank and Hout on the negligence theories of recovery. Milbank and Hout have filed separate appeals from the judgment.
The trial court determined that the farm liability policy was ambiguous as to whether the 1973 Chevrolet pickup was covered under its provisions. Thus, the court allowed the parties to introduce extrinsic evidence with regard to intent and submitted the coverage issue to the jury. In its special verdict, the jury determined that, based upon the language of the policy together with representations made by Hout, the policy did provide coverage of the pickup for the 1981 accident. On appeal, Milbank asserts that the policy unambiguously excludes coverage of the pickup and that the trial court erred in submitting the issue to the jury.
The farm liability policy provided that:
"[Milbank] agrees to pay on behalf of the Insured all sums which the Insured shall become legally obligated to pay as damages because of bodily injury or property damage, to which this insurance applies, caused by an occurrence."
The policy further provided, however, that liability coverage did not apply:
The policy defines the term "motor vehicle" as follows:
"3. 'motor vehicle' means a land motor vehicle, trailer or semi-trailer designed for travel on public roads (including any machinery or apparatus attached thereto) but does not include, except while being towed by or carried on a motor vehicle, any of the following: utility, boat, camp or home trailer, recreational motor vehicle, crawler or farm type tractor, farm implement or, if not subject to motor vehicle registration, any equipment which is designed for use principally off public roads." [Emphasis added.]
Jerome and Richard assert that the 1973 pickup...
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