Lang Fur Farms, Inc. v. Bird Island-Hawk Creek Mut. Ins. Co.
| Decision Date | 08 February 2021 |
| Docket Number | A20-0683 |
| Parties | Lang Fur Farms, Inc., et al., Appellants, v. Bird Island - Hawk Creek Mutual Ins. Co., Respondent. |
| Court | Minnesota Court of Appeals |
This opinion is nonprecedential except as provided by Minn. R. Civ. App. P. 136.01, subd. 1(c).
Affirmed and remanded
Stearns County District Court
Adina R. Bergstrom, Brenda M. Sauro, Sauro & Bergstrom, PLLC, Oakdale, Minnesota (for appellants)
M. Gregory Simpson, Julia J. Nierengarten, Leatha G. Wolter, Blake P. Derosier, Meagher & Geer, PLLP, Minneapolis, Minnesota (for respondent)
Considered and decided by Gaïtas, Presiding Judge; Connolly, Judge; and Reyes, Judge.
NONPRECEDENTIAL OPINION
Appellants-insureds challenge the partial summary judgment granted to respondent-insurer, arguing that the district court erred in concluding that the chemical-or-biological- materials and anti-concurrent-causation exclusions apply to their vandalism claim relating to their mink farms. Appellants also argue that the district court erred in not dismissing claims involving a bank, because the parties had stipulated to the dismissal of the bank from the case and the district court apparently overlooked the dismissal. Because we agree that the exclusions apply and there is no insurance coverage, we affirm the partial summary judgment; because we agree that the claims involving the bank should be dismissed, we remand for that purpose.
In May 2017, appellants Lang Fur Farms and one of its owners, Daniel Lang, obtained an insurance policy (the policy) in part from respondent Bird-Island Hawk Creek Mutual Insurance Company, a township mutual insurance company. Five of the policy's provisions are relevant to the issues now on appeal. The first, in the "DEFINITIONS" section, defines the term "Farm Barns, Buildings and Structures" to include "any fixtures or equipment attached to, installed in or connected for use within a building."
The second relevant provision is in the "BASIC PERILS" section and includes in the list of perils covered "Vandalism, or Malicious Mischief." Appellants claim that their damage was the result of vandalism. The third relevant provision is the heading "GENERAL EXCLUSIONS," followed by the phrase "(Apply to all Coverages)." Both the fourth and fifth relevant provisions are under this heading. The fourth is the "Chemical or Biological" exclusion, which reads, "Regardless of the amount of damage or loss, this exclusion applies to any losses that are carried out or caused by dispersal or application of pathogenic or poisonous biological or chemical materials."
The fifth relevant provision is the "Concurrent Causation" exclusion, which provides that, if any one exclusion applies, respondent does not cover the loss resulting directly or indirectly from any concurrent cause, i.e., it does not cover a loss "[i]f one or more of the exclusions apply to the loss, regardless of other causes or events that contribute to or aggravate the loss whether such causes or events act to produce the loss before, at the same time as, or after the excluded causes or events."
In July 2017, a herbicide containing the chemical glyphosate1 was introduced into the water systems for the minks' cages on appellants' two farms. Appellants filed a claim for the cost of replacing the water systems. Respondent investigated and denied the claim.
Appellants brought this action, seeking a declaratory judgment stating that their loss and damages were covered and claiming breach of contract, joint enterprise, joint venture, and a right to an order for appraisal. Respondent moved to dismiss, alleging that the policy's exclusions barred coverage. The district court denied the motion. Respondent then filed an answer, alleging that the policy exclusions barred coverage and that appellants' willful misrepresentations, concealment and fraud, and intentional causation of all damages were affirmative defenses for respondent. Respondent also filed a counterclaim against appellant Daniel Lang, alleging insurance fraud. The parties filed cross motions for summary judgment.
Following a hearing, the district court issued an order and a memorandum that begins by noting that "[t]he underlying issue of fraud (whether the loss was the result ofthird-party vandalism or acts of the insured) is a matter for the jury . . . that will be addressed no further at this time." The order granted respondent's motion for partial summary judgment based on the chemical-or-biological exclusion and the anti-concurrent-cause exclusion, denied respondent's motions for summary judgment based on the misrepresentation-and-fraud exclusion, the pollutants exclusion, and the terrorism exclusion, and awarded respondent recoverable costs and expenses.2
Appellants challenge the summary judgment, arguing that none of the policy's exclusions applies to their claim.3
This court reviews a district court's legal conclusions on summary judgment de novo, viewing the evidence in the light most favorable to the party against whom the summary judgment was granted. Commerce Bank v. W. Bend. Mut. Ins. Co., 870 N.W.2d 770, 773 (Minn. 2015). More specifically, interpretation of an insurance policy and whether a policy provides coverage in a particular situation are questions of law that are subject to de novo review. Eng'g & Constr. Innovations, Inc. v. L.H. Bolduc Co., 825 N.W.2d 695, 704 (Minn. 2013). Insurance policy language is to be given its plain andordinary meaning. Gen. Mills, Inc. v. Gold Medal Ins. Co., 622 N.W.2d 147, 151 (Minn. App. 2001). Exclusions are construed in favor of the insured. Canadian Universal Ins. Co. v. Fire Watch, Inc., 258 N.W.2d 570, 572 (Minn. 1977).
The policy excludes coverage for "any losses that are carried out or caused by dispersal or application of pathogenic or poisonous biological or chemical materials." The district court concluded that glyphosate, an ingredient of the herbicide poured into the damaged watering system, was a pathogenic or poisonous chemical material that was dispersed through the water in the system and that "the incident at Lang Fur Farms was a dispersal of a chemical and is subject to the Chemical or Biological Exclusion."
Appellants offer three reasons why the chemical or biological exclusion does not apply. First, they argue that, because the herbicide was poured into the watering system, it was not "dispersed." When a term in an insurance policy is not defined in the policy, it is to be given its plain and ordinary meaning. Gen. Mills, Inc., 622 N.W.2d at 151. The meanings of "disperse" include "to become spread widely" and "to distribute (something, such as fine particles) more or less evenly throughout a medium." Disperse Definition, Merriam-Webster.com, www.merriamwebster.com/dictionary/disperse (last visited Nov. 23, 2020). The glyphosate was spread widely throughout the minks' watering system, causing the damage.
Appellants rely on Sylvester Bros. Dev. Co. v. Great Cent. Ins. Co., 480 N.W.2d 368, 374 (Minn. App. 1992) (), review denied (Minn. Mar. 26, 1992). This reliance is misplaced because Sylvester Bros. is distinguishable. That case concerned a pollution exclusion, not a chemical-or-biological exclusion.4 The word "dispersal" occurs in the phrase "discharge, dispersal, release, or escape" of pollutants, and "the 'escape' of pollutants [as opposed to the deposit of pollutants in the landfill] is the critical inquiry for purposes of determining the applicability of the pollution exclusion." Sylvester Bros. Dev. Co., 480 N.W.2d at 373-74. Here, in the chemical or biological exclusion, the word "dispersal" occurs in the phrase "dispersal or application," and the critical inquiry for applicability of the exclusion was the deposit of glyphosate into the watering systems, not its "escape" into them. Given the very different contexts in which "dispersal" was used in the pollution exclusion in the Sylvester Bros. policy and the chemical or biological exclusion in appellants' policy, its definition in Sylvester Bros. is not relevant to, much less dispositive of, its definition here.
Second, appellants also argue that the glyphosate was not poisonous. This argument conflicts with their previous position that the vandals and that "[I]t is true that the mink at issue got very sick, were rendered blind, and many died after drinking the water." Having represented to the district court that glyphosate was a poisonous chemical, appellants may not argue now that it is not a poisonous chemical within the meaning of the exclusion. A party may not "obtainreview by raising the same general issue litigated below but under a different theory." Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988).
Third, appellants argue that, because the damage was the result of vandalism, a "covered peril," it is covered, and that the means chosen by the vandal(s), i.e., dispersing a poisonous chemical through the watering system, cannot vitiate this coverage. But with this reasoning, all exclusions would be meaningless: anything vandals chose to do, whether it was a covered peril or an excluded peril, would be covered.
Appellants argue that "[w]hen property damage is caused by the acts of vandals, vandalism coverage applies and there is no 'concurrent cause' sufficient to trigger that exclusion." But the concurrent-causation exclusion says there is no coverage when any other exclusion applies to a damage claim, regardless of when that excluded event occurred. Here, there is no coverage for vandalism that occurred before and...
To continue reading
Request your trial