Lundgren v. Vigilant Ins. Co.
| Decision Date | 12 August 1986 |
| Docket Number | No. C6-86-677,C6-86-677 |
| Parties | Douglas LUNDGREN, Appellant, v. VIGILANT INSURANCE COMPANY, Respondent. |
| Court | Minnesota Court of Appeals |
Syllabus by the Court
1. Underinsured motorists coverage extended to a corporate or other business entity in a business automobile insurance policy is not of itself ambiguous, nor was an ambiguity created by the endorsements added to the policy.
2. The trial court did not err in determining that the business policy did not extend personal underinsured motorists coverage to family members employed by a family-owned business.
David K. Cody, Daniel T. Cody Law Offices, St. Paul, for appellant.
Leo G. Stern, Patrick E. Sullivan, Fredrikson & Byron, P.A., Minneapolis, for respondent.
Heard, considered and decided by SEDGWICK, P.J., and FORSBERG and LESLIE, JJ.
This appeal is from summary judgment entered for respondent Vigilant Insurance in a declaratory judgment action brought to determine whether appellant Douglas Lundgren had underinsured motorists coverage under a policy issued by Vigilant to the family business, Lundgren Excavating. We affirm.
Appellant Douglas Lundgren was injured by an object thrown up by a passing car while he was working near a road on a project for the family business, Lundgren Excavating. Lundgren settled with the owner of the passing car for the limits of his policy.
Lundgren Excavating had a comprehensive business automobile policy with respondent Vigilant Insurance covering six vehicles. The sole named insured on the policy was Lundgren Excavating.
The Lundgrens purchased the insurance policy through an agent, Alexander & Alexander. They claim the agent assured them that through various endorsements the Lundgrens would be personally covered under the policy. The Lundgrens used the business-owned vehicles for personal use, and owned no other vehicles.
Appellant's name, along with those of other family members, was listed on a personal injury protection endorsement added to the policy. A "drive other car" endorsement was also written, naming the same individuals. This endorsement states that it "changes only those coverages listed below for which a charge is shown below." A premium charge is shown beneath a listing for "Liability" and "PIP"; there are listings also, without premium charges, for "Uninsured Motorists," "Comp[rehensive]" and "Coll[ision]." There is no listing or premium charge shown for underinsured motorists coverage.
The policy included an endorsement for Underinsured Motorists coverage. On this endorsement, there is no named insured nor any named individual. The endorsement states as follows:
We will pay all sums the insured is legally entitled to recover as damages from the owner or driver of an underinsured motor vehicle. The damages must result from bodily injury sustained by the insured * * * *. (emphasis in original).
The term "insured" is defined in the endorsement as follows:
1. You or any family member.
2. Anyone else occupying a covered auto * * * *. (emphasis in original).
The term "you" is defined in the policy as the named insured.
Vigilant denied coverage, on the grounds that appellant was not a named insured covered by the underinsured motorists endorsement. Appellant brought this declaratory judgment action to determine coverage under the policy.
The trial court, on respondent's motion for summary judgment, determined that the policy was not ambiguous. The court ruled that since appellant was not a named insured under the policy, and was not a named individual in the underinsured motorists endorsement, or extended that form of coverage by the "drive other car" endorsement in which he was named, he was not covered. The court declined to impose coverage based on reformation of the policy or "reverse pierce of the corporate veil."
Did the trial court err in granting summary judgment for the insurer?
Appellant contends the policy is ambiguous as to whether underinsured motorists coverage [hereafter, UIM] extended to Douglas Lundgren as an individual. Appellant relies primarily on two endorsements added to the policy, endorsements # 4 (UIM) and # 8 ("drive other car").
Endorsement # 4 includes no provision naming an "insured" entitled to the UIM coverage. Appellant contends this silence creates an ambiguity as to who is covered. The endorsement, however, specifies "who is insured": "You or any family member." The term "you" is defined in the main body of the policy as
the person or organization shown as the named insured in ITEM ONE of the declarations.
This was Lundgren Excavating.
Endorsement # 8 includes no entry or premium charge for underinsured motorists coverage. Although appellant is listed as an individual entitled to the other coverages provided in the "drive other car" endorsement, this endorsement does not transform the business policy generally into a personal policy covering the Lundgrens individually for every risk.
Appellant also argues that UIM coverage for a business is itself ambiguous, since a business cannot sustain the "bodily injury" it covers, nor have "family members" included within the definition of "insured." This argument was answered in Kaysen v. Federal Insurance Co., 268 N.W.2d 920, 923-24 (Minn.1978), where the court stated:
The [Polzin v. Phoenix of Hartford Ins. Companies, 5 Ill. App. 3d 84, 283 N.E.2d 324 (1972) ] case does little to clear up the ambiguity caused when a corporation is listed as the named insured in an uninsured motorist provision designed to protect family members from bodily injury. Of course the corporation cannot sustain bodily injury, but this does not make the entire provision a nullity because in both Polzin and the present case the uninsured motorist coverage protects "any other person while occupying an insured highway vehicle."
Although the policy is admittedly confusing with respect to...
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