Mickelson v. American Family Mut. Ins. Co., C5-81-1378.

• Decision Date: 23 March 1983
• Docket Number: No. C5-81-1378.,C5-81-1378.
• Citation: 329 NW 2d 814
• Parties: Jeffory W. MICKELSON, et al., Respondents, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant, and Mutual Service Casualty Insurance Company, Appellant.
• Court: Minnesota Supreme Court

329 N.W.2d 814 (1983)

Jeffory W. MICKELSON, et al., Respondents, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant, and Mutual Service Casualty Insurance Company, Appellant.

No. C5-81-1378.

Supreme Court of Minnesota.

February 11, 1983.

Rehearing Denied March 23, 1983.

Hessian, McKasy & Soderberg, James A. Stein and Albert F. Kosek, Minneapolis, for appellant.

Philip J. Levy, Minneapolis, for Mickelson, et al.

Peterson Bell & Converse, Willard L. Converse and Pamela J. Converse, St. Paul, for American Family Mut. Ins. Co.

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

COYNE, Justice.

This is an appeal from an order granting summary judgment. Plaintiff Jeffory W. Mickelson asserted claims for basic economic loss benefits against American Family Mutual Insurance Company (American Family), the insurer on a policy in which Mickelson's pick-up truck is the described vehicle, or, in the alternative, against Mutual Service Casualty Insurance Company (Mutual Service), the reparations obligor under the assigned claims plan, Minn.Stat. § 65B.63 (1982). On cross motions for summary judgment, the district court granted summary judgment in favor of American Family against Mickelson and in favor of Mickelson against Mutual Service. Mutual Service appeals and Mickelson seeks review of that portion of the order granting judgment in favor of American Family.

The facts of the case are not in dispute. On November 14, 1980, Mickelson was a pedestrian crossing an intersection when he was struck and injured by an automobile owned by an uninsured driver. Mickelson owned a 1972 Ford pick-up truck, but he did not maintain any plan of reparation security. Mickelson's pick-up truck was, however, the vehicle described in an automobile insurance policy in which Carol Rose Mueller was the named insured. Mickelson and Mueller had lived together for approximately seven years, sharing income and expenses. They were not married or related in any other way.

Mueller was the principal driver of the Ford truck. According to Mickelson, she drove it 80 to 90% of the time. Mickelson had a motorcycle, which was uninsured. Mickelson has a very poor driving record which includes seven moving traffic violations between May 1976 and October 1980 and a 30-day suspension of his driver's license as a habitual violator under Minn. Stat. § 171.18, subd. 4 (1982). In her application for the automobile insurance policy issued by American Family, Mueller represented that she was the owner and title-holder of the 1972 Ford pick-up truck, that she was the sole operator of the vehicle, and that neither she nor any other driver of the vehicle had ever received any tickets or citations for moving traffic violations or had had a driver's license revoked or suspended.

American Family denied Mickelson's claim for basic economic loss benefits under its policy issued to Mueller on the ground that Mickelson was not an insured either under the terms of the policy or within the provisions of the Minnesota No-Fault Automobile Insurance Act. Mickelson then made application to the Minnesota Automobile Assigned Claims Bureau pursuant to Minn.Stat. § 65B.63, subd. 2 (1982).¹ Mickelson's claim was assigned to Mutual Service, which denied the claim on the ground that, pursuant to the provisions of Minn. Stat. § 65B.64, subd. 3 (1982)², Mickelson was disqualified from benefits.

Mickelson and Mueller then commenced an action seeking a declaration that Mickelson was an insured under the American Family policy or reformation of the policy to include Mickelson as an insured. In the alternative, plaintiffs sought judgment against Mutual Service under the assigned claims plan. The district court ruled that Mickelson — who was neither the named insured nor the spouse, relative, or minor in the custody of the named insured — was not an insured under the American Family policy and that there was no basis for reformation of the policy. The district court concluded, however, that Mickelson was entitled to participate in the assigned claims plan on the ground that the pick-up truck was insured pursuant to the Minnesota No-Fault Automobile Insurance Act and that Minn.Stat. § 65B.64, subd. 3, does not require that the owner be an insured under the plan of reparation security.

Initially, we hold that Jeffory W. Mickelson is not an "insured" either under the terms of the American Family automobile insurance policy in which Carol Rose Mueller is the named insured or within the statutory definition set out at Minn.Stat. § 65B.43, subd. 5 (1982).

Minn.Stat. § 65B.43, subd. 5, provides in pertinent part:

"Insured" means an insured under a plan of reparation security as provided by sections 65B.41 to 65B.71, including the named insured and the following persons not identified by name as an insured while (a) residing in the same household with the named insured and (b) not identified by name in any other contract for a plan of reparation security complying with sections 65B.41 to 65B.71 as an insured:

(1) a spouse,

(2) other relative of a named insured or

(3) a minor in the custody of a named insured * * *.

Although the statute does not define either "spouse" or "relative," both are terms of common usage and generally accepted meaning: "spouse" means either member of a married couple, and "relative" means one connected by blood or marriage. The plain meaning of the terms does not permit construction to include those who, like Mickelson, are unrelated to the named insured although they live in the same household, commingle their incomes, and share expenses.

The personal injury protection coverage of the American Family policy affords coverage to the named insured or a relative who is injured as the result of an accident while occupying any motor vehicle or who is injured through being struck by any motor vehicle or motorcycle while a pedestrian. In addition, protection is extended to any other person who is injured while an occupant of the insured motor vehicle or while a pedestrian as the result of an accident involving the insured motor vehicle. The policy defines "relative":

Relative means the spouse or any person related to the named insured by blood, marriage or adoption. This includes a minor in custody of the named insured, spouse or such related person, who lives in the same household as the named insured, even if temporarily living elsewhere.

Although the policy definition of "relative" includes a broader class of persons than does the term "relative" as it is used in section 65B.43, subd. 5, it nevertheless limits in clear and unambiguous language the class of included adults to the named insured's spouse or any person related to the named insured by blood, marriage or adoption. Mickelson is neither Mueller's spouse nor related to her by blood, marriage or adoption. Accordingly, while the American Family policy would afford him personal injury protection if he were injured while he occupied the Ford pick-up truck or if he were struck by the Ford truck, he is not entitled to such protection while occupying any other motor vehicle or with respect to the injury he sustained while a pedestrian through being struck by a motor vehicle other than his Ford truck.

Having determined that Mickelson is not entitled to basic economic loss benefits under the American Family policy, we address the question of his eligibility under the assigned claims plan, Minn.Stat. §§ 65B.63 to 65B.66 (1982).

Minn.Stat. § 65B.64, subd. 3 (1982) expressly excludes from the assigned claims plan any owner who fails to insure his vehicle:

A person shall not be entitled to basic economic loss benefits through the assigned claims plan with respect to injury which was sustained if at the time of such injury the injured person was the owner of a private passenger motor vehicle for which security is required under sections 65B.41 to 65B.71 and he i.e. the owner failed to have such security in effect. (Emphasis added).

The district court reasoned that since Mickelson's truck was insured at the time of the accident and since Minn.Stat. § 65B.64, subd. 3, does not expressly require that the owner be an insured under the reparation security, Mickelson was eligible to participate in the assigned claims plan.

To be sure, section 65B.64, subd. 3, does not expressly state that the owner must be an insured under the required security, but the security to which section 65B.64, subd. 3, refers is the security required under sections 65B.41 to 65B.71. Thus, section 65B.64, subd. 3, imports by reference the provisions of section 65B.48, subdivision 1, which provides that "every owner of a motor vehicle . . . shall maintain . . . a plan of reparation security" which shall not only insure against loss resulting from liability arising out of the ownership, maintenance, operation or use of the vehicle but also "shall provide for basic economic loss benefits." (Emphasis added). Section 65B.64, subd. 3, also incorporates by reference the provisions of section 65B.43, subd. 5, which declares that the named insured is an insured under any plan of reparation security provided by sections 65B.41 to 65B.71. Implicit in the interlaced sections 65B.41 to 65B.71 which constitute the Minnesota No-Fault Automobile Insurance Act is the requirement that the owner of a motor vehicle, section 65B.43, subd. 4, be the named insured under the plan of reparation security covering the vehicle, section 65B.48, subds. 7 and 8, just as it is merely implicit that the plan of reparation security shall provide basic economic loss benefits to an insured, section 65B.43, subd. 5, who is a pedestrian injured by being struck by a motor vehicle. Minn.Stat. § 65B.47, subd. 3 (1982).

The implication that the plan of reparation security which the owner is required to maintain is a plan in which the owner is the named insured is borne out both by the legislative history of the No-Fault Act and by judicial construction. The report of...