Kuchenmeister v. Ill. Farmers Ins. Co., 51803

• Decision Date: 18 September 1981
• Docket Number: 51906.,No. 51803,51803
• Citation: Kuchenmeister v. Ill. Farmers Ins. Co., 310 N.W.2d 86 (Minn. 1981)
• Parties: Donald J. KUCHENMEISTER, Respondent, v. ILLINOIS FARMERS INSURANCE COMPANY, Appellant.
• Court: Minnesota Supreme Court

310 N.W.2d 86 (1981)

Donald J. KUCHENMEISTER, Respondent, v.ILLINOIS FARMERS INSURANCE COMPANY, Appellant.

Nos. 51803, 51906.

Supreme Court of Minnesota.

September 18, 1981.

Thomas J. Lyons, St. Paul, Hvass, Weisman & King and Gary Stoneking, Minneapolis, for respondent.

Thomas M. Conlin, Lawrence King, Murnane, Conlin, White, Brandt & Hoffman, St. Paul, for appellant.

Considered and decided by the court en banc without oral argument.

SHERAN, Chief Justice.

This is an appeal from an order of the Washington County District Court denying appellant's motion for amended findings of fact, conclusions of law, order for judgment, and, in the alternative, for a new trial as well as an appeal from the original decision.The issues are whether the insurer made the statutorily required offer of underinsured motorist coverage and, if not, whether the insurer is entitled to a jury trial to determine whether the insured would have accepted the offer had it been made.The trial court decided both issues in favor of the insured.We affirm.

In 1977, respondent-insured was involved in a car accident and sustained injuries in excess of the value of the other party's automobile insurance coverage.Insured had automobile insurance policies written by the appellant company (insurer) in effect at the time of the accident.These policies did not include underinsured motorist protection.

Insured instituted a declaratory judgment action seeking a determination that the insurer failed to make the statutorily required offer of underinsured motorist coverage to insured and that, as a result, the insured had in effect at the time of the accident underinsured motorist coverage equal to the residual liability amount of each automobile insurance policy held by him.SeeMinn.Stat. § 65B.49, subd. 6(1978)(repealed 1980).Finding that no offer of underinsured motorist coverage had been made, the trial court held that inclusion of the coverage in insured's policies would be implied in law.

Minn.Stat. § 65B.49, subd. 6(1978)(repealed 1980), required that insurers offer underinsured motorist coverage to their insureds.That statute provided as follows:

Subd. 6.Mandatory offer; added coverage.Reparation obligors shall offer the following optional coverages in addition to compulsory coverages:

* * * * * *

(e) Underinsured motorist coverage.

Id.(emphasis added.)¹The insurer carries the burden of proving that an offer was made and failing to carry that burden will result in that coverage being implied in law as existing in insured's automobile policy.Holman v. All Nation Insurance Co.,288 N.W.2d 244, 248(Minn.1980)."The implicit conclusion, that the insurer must introduce sufficient evidence of its efforts to offer the supplementary coverages to its insured, is particularly sound in light of the fact that § 65B.49, subd. 6, now requires that insurers shall offer not merely `make available' the optional coverages but `shall offer' them."Id. at 249.This changed language reflects a "firmer legislative policy" in favor of the additional coverages.Id.Therefore, the circumstances in which an insured is said to have rejected optional coverage will be strictly scrutinized by the court.Id.

At trial, the insurer argued that the offer was made in two ways: verbally by the insurance agent at the time the policy was written; by means of the following message typewritten on the renewal premium notices mailed to respondent:

Did you know that you may now have underinsured motorist and/or uninsured motorist coverage in amounts up to your bodily injury liability limits.If interested, contact your agent.

1.Verbal Offer.

The insurance agent testified that after being contacted by the insured, he visited insured at the insured's place of employment to write up the policy.At that time, insured provided him with a copy of his current policy with another insurer and informed the agent that he was interested in obtaining the same coverage.While the agent could not specifically remember offering insured underinsured coverage, he testified that it was his practice to offer the coverage and, therefore, he must have offered it to the insured.In support, the insurer offered into evidence a directive from the company to the agent that all agents make the statutorily required offer of...