Latterell v. Progressive Northern Insurance Company, No. A09-1138 (Minn. App. 3/2/2010)
| Decision Date | 02 March 2010 |
| Docket Number | No. A09-1138.,A09-1138. |
| Parties | Gregory Latterell, as trustee for the heirs of Jared Travis Boom, decedent, Appellant, v. Progressive Northern Insurance Company, Respondent, and AIG Insurance Company, Respondent. |
| Court | Minnesota Court of Appeals |
Appeal from the District Court, Hennepin County, File No. 27-CV-08-18173.
Michael A. Bryant, Bradshaw & Bryant, PLLC, Waite Park, Minnesota (for appellant).
Curtis D. Ruwe, Michelle M. Carter-Seurer, Arthur, Chapman, Kettering, Smetak & Pikala, P.A., Minneapolis, Minnesota (for respondent Progressive Northern Insurance Company).
Matthew M. Johnson, Michael M. Skram, Johnson & Condon, P.A., Minneapolis, Minnesota (for respondent AIG Insurance Company).
Considered and decided by Lansing, Presiding Judge; Halbrooks, Judge; and Randall, Judge.*
UNPUBLISHED OPINION
Appellant challenges the district court's entry of summary judgment in favor of respondent insurance companies. Because the district court did not err, we affirm.
The facts in this case are undisputed. Tragically, Jared Boom died in a car accident while delivering books to a library. He was paid $148 per day to complete this delivery route. Boom used his own car for his delivery job, and he insured his vehicle with respondent Progressive Northern Insurance Company. Boom was living with his mother and stepfather, appellant Gregory Latterell, at the time of the accident. Appellant had a car insurance policy from respondent AIG Insurance Company that covered household relatives.
Following the accident, appellant, as trustee for Boom's estate, settled with the other driver's insurance company for the liability limit of that policy—$100,000. Appellant then sought to recover underinsured motorist (UIM) coverage from Progressive up to Progressive's policy limit for UIM coverage—$100,000. Progressive denied coverage based on a policy exclusion for claims incurred while carrying property for "compensation or a fee." After Progressive denied coverage, appellant sought coverage from AIG. AIG also denied coverage on the basis that because Boom was the named insured on the Progressive policy that insured the car involved in the accident, he could not seek excess UIM coverage from AIG.
Appellant sued respondents and moved for summary judgment, claiming that Progressive's exclusion violates the Minnesota No-Fault Automobile Insurance Act or, alternatively, that the exclusion is ambiguous and therefore unenforceable. Appellant further argued that if Boom is excluded from coverage under Progressive's policy, that he would be covered under AIG's policy. Respondents brought cross-motions for summary judgment, and the district court granted summary judgment in favor of respondents.
Appellant contends that the exclusion relied on by Progressive violates the Minnesota No-Fault Automobile Insurance Act, Minn. Stat. §§ 65B.41-.71 (2008). Specifically, appellant argues that because the no-fault act mandates UIM coverage, an insurance policy containing an exclusion that ultimately works to deny UIM coverage violates the act. The district court rejected this argument. "When the district court grants summary judgment based on the application of a statute to undisputed facts, the result is a legal conclusion that we review de novo." Weston v. McWilliams & Assocs., Inc., 716 N.W.2d 634, 638 (Minn. 2006).
The no-fault act states in pertinent part:
(1) No plan of reparation security may be renewed, delivered or issued for delivery, or executed in this state with respect to any motor vehicle . . . unless separate . . . underinsured motorist coverage[] [is] provided therein. . . .
(2) Every owner of a motor vehicle . . . shall maintain. . . underinsured motorist coverage[] as provided in this subdivision.
Minn. Stat. § 65B.49, subd. 3a. The no-fault act is silent as to whether exclusions can operate to deny UIM coverage.
The question of whether an exclusion that operated to deny mandated-UIM coverage violated the no-fault act was addressed by this court in Smith v. Ill. Farmers Ins. Co., 455 N.W.2d 499 (Minn. App. 1990), review denied (Minn. July 13, 1990). After suffering injuries in a taxicab accident in Mexico, the injured plaintiffs in Smith attempted to recover UIM coverage from their personal car-insurance policies. Smith, 455 N.W.2d at 500 (). The insurers denied UIM coverage based on territorial exclusions in the policies. Id. The insureds argued that because the exclusions were not expressly permitted under the no-fault act, they were void as against public policy. Id. at 501. This court rejected that reasoning in a divided decision and stated that "[c]lauses purporting to exclude certain types of coverage have been uniformly upheld, provided they are unambiguous and do not conflict with statutory provisions." Id. We went on to analyze the no-fault act and ultimately concluded that, Id. at 502. The exclusion at issue here is not a territorial exclusion, but the reasoning used in Smith is applicable. As in Smith, there is no statutory prohibition on the type of exclusion relied on by Progressive.
In addition, this court has upheld a business-use exclusion, similar to the one here, in the context of liability coverage. In Ill. Farmers Ins. Co. v. Eull, 594 N.W.2d 559, 562 (Minn. App. 1999), we determined that a business-use exclusion did not violate the no-fault act, in part, because "the exclusion at issue here is not so broad as to practically foreclose [the mandated] coverage." Because there is no statutory prohibition on business-use exclusion, and because the exclusion at issue is not so broad as to foreclose UIM coverage, we conclude that the exclusion relied on by Progressive to deny Boom UIM coverage does not violate the no-fault act.
Appellant next argues that the exclusion relied on by Progressive is ambiguous and therefore unenforceable. Coverage issues and the interpretation of policy language are questions of law, which are reviewed de novo. Am. Family Ins. Co. v. Walser, 628 N.W.2d 605, 609 (Minn. 2001). The construction of a written contract is a question of law, unless there is ambiguity. Art Goebel, Inc. v. N. Suburban Agencies, Inc., 567 N.W.2d 511, 515 (Minn. 1997). "A contract is ambiguous if its language is reasonably susceptible to more than one interpretation." Brookfield Trade Ctr., Inc. v. County of Ramsey, 584 N.W.2d 390, 394 (Minn. 1998). Otherwise, unambiguous language is given its plain and ordinary meaning, State ex rel. Humphrey v. Philip Morris USA, Inc., 713 N.W.2d 350, 355 (Minn. 2006), and any ambiguity is resolved in favor of the insured. Mitsch v. Am. Nat'l Prop. & Cas. Co., 736 N.W.2d 355, 358 (Minn. App. 2007), review denied (Minn. Oct. 24, 2007).
The exclusion in the Progressive policy states:
[UIM coverage] will not apply: 1. to bodily injury sustained by any person while using or occupying: a. a covered auto while being used to carry persons or property for compensation or a fee, including, but not limited to, pickup or delivery of magazines, newspapers, food, or any other products.
Appellant relies primarily on Progressive Cas. Ins. Co. v. Metcalf, 501 N.W.2d 690 (Minn. App. 1993), to support his contention that the exclusionary clause at issue here is ambiguous. In Metcalf, this court found an exclusionary clause to be ambiguous. 501 N.W.2d at 692. The exclusion in Metcalf stated that coverage would not apply to "liability arising out of the ownership or operation of a vehicle while it is being used to carry persons or property for a fee." Id. at 691. The insurer denied coverage based on the fact that the driver was delivering a pizza as part of his job at the time of the accident. Id. On appeal, this court reasoned that the term "fee" could refer to a per-trip charge or could include hourly wages paid to an employee such as the driver in Metcalf. Id. at 692. Because the term "fee" was susceptible to more than one meaning, we concluded that it was ambiguous. Id. Because the driver in Metcalf did not receive a per-trip charge, this court construed the policy in favor of the insured and required the insurer to provide coverage. Id. at 692-93.
We find this case distinguishable from Metcalf because the language in Boom's Progressive policy is broader. The exclusion in the Progressive policy precludes coverage when the insured is carrying property for "compensation or a fee." The inclusion of the term "compensation" removes the ambiguity found in Metcalf. The clause encompasses both situations where a driver is receiving a per-trip charge for delivering property or persons or an hourly wage for such deliveries. Because we do not find this phrase susceptible to more than one meaning, we conclude that the exclusion is unambiguous. Boom's use of his car to deliver books in exchange for a daily fee falls squarely within this exclusion.
This outcome follows the logic behind this type of exclusion: that commercial use of a vehicle goes beyond the intended scope of a personal auto policy. See Eull, 594 N.W.2d at 561-62 (...
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