Quintana v. Allstate Ins. Co.

• Decision Date: 26 November 1985
• Docket Number: No. C7-85-127,C7-85-127
• Citation: 378 N.W.2d 40
• Parties: 42 UCC Rep.Serv. 910 Loretta Diane QUINTANA, a/k/a Diane Loretta Quintana, Respondent. v. ALLSTATE INSURANCE COMPANY, Appellant.
• Court: Minnesota Court of Appeals

Page 40

378 N.W.2d 40

42 UCC Rep.Serv. 910

Loretta Diane QUINTANA, a/k/a Diane Loretta Quintana Respondent. v. ALLSTATE INSURANCE COMPANY, Appellant.

No. C7-85-127.

Court of Appeals of Minnesota.

Nov. 26, 1985.

Syllabus by the Court

1. The trial court did not abuse its discretion in denying the motion to dismiss the case on the basis of forum non conveniens.

2. Insurer failed to discharge its contractual obligation to respondent insured when drafts made payable to respondent and another were paid over the forged endorsements of respondent.

3. The trial court did not err in finding that the insured did not intend to misrepresent the insurer in the application for insurance.

Timothy J. McLarnan, Gjere, McLarnan, Hannaher, Vaa, Skatvold & McLarnan, Moorhead, for respondent.

Ronald H. McLean, Serkland, Lundberg, Erickson, Marcil & McLean, Ltd., Fargo, N.D., for appellant.

Heard, considered and decided by SEDGWICK, P.J., and LESLIE and NIERENGARTEN, JJ.

OPINION

LESLIE, Judge.

Allstate Insurance Company appeals from a judgment entered in favor of respondent Loretta Diane Quintana. Respondent sought to recover certain proceeds from an insurance settlement between Allstate and Rudolph Quintana, who was respondent's husband at the time. The trial court awarded respondent $8,000, one-half of the amount of insurance proceeds. We affirm.

FACTS

Respondent and her husband purchased a used mobile home for $5,000 in March 1981. They purchased insurance for the mobile home from an Allstate agent in Billings, Montana. In their application for insurance, they represented the purchase price of their mobile home as $9,975. They also represented that they had made improvements worth ten percent of the purchase price. The policy became effective March 17, 1981.

On August 26, 1981, respondent and her husband had a fight at their mobile home in Billings. As a result of the incident, Rudolph Quintana was placed in jail, and was subsequently moved to a hospital because of a heart problem. That night respondent left for Barnesville, Minnesota with the couple's two children.

Rudolph Quintana returned to the mobile home on approximately August 29, 1981. He performed some repair work on the trailer's air cooler unit and then went to two bars in Billings. When he returned later that evening, he found that the mobile home had been destroyed by fire.

Respondent learned of the fire in early September 1981, and called Keith Bunker, an Allstate sales agent, to get more information regarding the fire. Bunker advised her to call Richard Rigney, a senior claims representative for Allstate, who had been assigned the claim.

Rigney contacted Rudolph Quintana on September 1, 1981. Rigney found him to be cooperative, and they determined the value of the fire loss to be $8,000 for the trailer contents and $8,000 for trailer repair. Rigney tried to contact respondent in Barnesville so that she could help determine the value of the destroyed contents, but he was unable to reach her. Rigney testified that during the course of negotiating with Rudolph Quintana, he learned of the domestic fight and that respondent and the children had left Billings.

After investigators determined that the fire was not the result of arson, Rigney received authority on October 5, 1981 to issue an $8,000 draft for the mobile home and an $8,000 draft for its contents. On that same day, Rigney called Rudolph Quintana and informed him that the drafts would be available that afternoon, that they would be made out to Rudolph and Diane L. Quintana, and that both of them were required to sign a proof of loss. Rudolph Quintana informed Rigney that his wife was flying into Billings that night, and could sign the checks and the proof of loss at that time. Later that day, Rigney gave Rudolph Quintana the two drafts and the proof of loss, which Rigney requested be returned with respondent's signature. Rigney never received the proof of loss.

In mid-October 1981, respondent called Rigney to ask whether he had issued any checks on the claim. Respondent informed Rigney that she had not received any of the money and that she had never returned to Montana. At trial, she testified that she did not sign either of the drafts, that the endorsements in the name of Diane L. Quintana were not her signature, and that she never received any of the insurance proceeds. The drafts were payable through United Bank of Denver National Association, Denver, Colorado. The drafts were paid by Clarks Fork National Bank of Fromberg, Montana.

Four months after Rigney issued the drafts, respondent commenced divorce proceedings in Minnesota. Under the terms of the decree of dissolution entered in May 1982, she was to receive the proceeds from the insurance drafts. Respondent filed suit in October 1982 to collect the insurance proceeds from Allstate. At trial, she argued that Allstate either breached a contractual duty or was negligent in distributing the insurance proceeds.

Allstate moved to dismiss the case on the basis of forum non conveniens. The trial court denied Allstate's motion on the grounds that respondent was a Minnesota resident and Allstate was a corporation doing business in Minnesota. The court determined that respondent should not be forced to proceed in a foreign jurisdiction just because Allstate sought to pursue possible indemnity claims.

The trial court concluded that Allstate was required to pay Diane Quintana $8,000. The trial court reasoned that because she did not receive her share of the insurance proceeds, Allstate breached its contractual duty. The court found that Allstate's obligation was not discharged when Allstate issued the drafts to Rudolph Quintana because the forgeries of respondent's signature were inoperative as to her. The trial court also found that Allstate failed to use due care and was negligent in the settlement of respondent's portion of the claim because Rigney knew that the couple had separated and was having marital difficulties. The court determined that the policy was not void due to an alleged misrepresentation as to price on the insurance application because Allstate did not meet its burden of proving the insureds' intent to deceive and defraud or an increased risk of loss. Finally, the trial court found that the forged endorsements were not a superceding cause in the negligence claim and that comparative negligence was inapplicable to contract actions.

Rudolph Quintana died on January 26, 1984.

ISSUES

1. Did the trial court abuse its discretion in refusing to dismiss the case on the basis of forum non conveniens?

2. Did appellant discharge its contractual duty to respondent?

3. Did the trial court err in finding that respondent did not intend to misrepresent appellant in the application for insurance?

ANALYSIS

1. The trial court denied appellant's motion to dismiss this action on the basis of forum non conveniens because it found that respondent was a Minnesota resident and that appellant did business in Minnesota and used Minnesota courts to protect its rights. The trial court reasoned that although the claim arose in Montana, the convenience issue was not dispositive because respondent had some right to choose her forum and appellant was not seriously inconvenienced by having to defend in Minnesota, especially since it admitted liability under the policy.

The forum non conveniens rule is "an equitable rule based on the proposition that a court in its discretion may decline to exercise jurisdiction over a transitory cause of action when it appears that the action may more equitably be tried in some other available and competent court." Johnson v. Chicago, Burlington & Quincy Railroad Co., 243 Minn. 58, 62, 66 N.W.2d 763, 767 (1954) (footnote omitted). The Minnesota Supreme Court has enumerated several factors for a court to consider in determining whether to apply the rule of forum non conveniens. These factors focus on the practicalities of bringing a lawsuit in one state versus another. "But unless the balance is strongly in favor of the defendant, the plaintiff's choice of forum should rarely be disturbed." Hague v. Allstate Insurance Co., 289 N.W.2d 43, 46 (Minn.1978) (quoting Gulf Oil Corp. v. Gilbert, 330 U.S. 501, 508, 67 S.Ct. 839, 843, 91 L.Ed. 1055 (1947)).

Appellant relies on Silversmith v. Kenosha Auto Transport, 301 N.W.2d 725 (Iowa 1981), to support its claim that this case should have been dismissed because the trial court's lack of subpoena power and jurisdiction over the Montana bank that accepted the two drafts and paid over the forged endorsements hampered Allstate's presentation of its evidence. In Silversmith, an Iowa resident brought a negligence action in Iowa against a Wisconsin defendant, a registered foreign corporation in Iowa, for injuries arising from an accident that occurred in Wyoming. Although the trial court refused to decline jurisdiction on the ground of forum non conveniens, the Iowa Supreme Court reversed, finding that "apart from the plaintiff's residence, there is not a single factor which provides a nexus between this action arising in Wyoming and Iowa." Id. at 728. The court observed that the accident occurred in Wyoming and all the key witnesses were located there, that Wyoming had subpoena power over a necessary third party and witnesses, that Wyoming had different substantive law than Iowa, and that an action based on the plaintiff's same claim had been initiated in federal court in Wyoming. Id.

We find Silversmith distinguishable. Minnesota and Montana do not have different substantive law. We know of no action pending in federal district court in Montana. Although Allstate would like to subpoena the Montana bank to pursue indemnification, no other witnesses or necessary parties reside in Montana. Allstate could have deposed witnesses in Montana and presented the deposition testimony in Minnesota. Because Allstate conducted business in Minnesota and respondent resided in Minnesota, we...