Safeco Ins. Co. v. Lindberg
| Decision Date | 21 January 1986 |
| Docket Number | C6-85-1141,Nos. C2-85-1119,s. C2-85-1119 |
| Citation | 380 N.W.2d 219 |
| Parties | SAFECO INSURANCE COMPANY, Respondent, v. Larry LINDBERG, Defendant and Third Party Plaintiff, Respondent (C2-85-1119) Appellant (C6-85-1141), Kim Barrett, Appellant (C2-85-1119) Respondent (C6-85-1141), Continental Brokers Corporation, et al., Third Party Defendants. |
| Court | Minnesota Court of Appeals |
Syllabus by the Court
The inception of this homeowners policy is the date the initial policy took effect. Because appellant Lindberg purchased the boat and motor after that date, there is coverage.
Robert W. Kettering, Jr., Minneapolis, for Safeco Ins. Co.
Larry Lindberg, pro se.
Keith J. Broady, Minneapolis, for Kim Barrett.
Heard, considered and decided by FOLEY, SEDGWICK and LANSING, JJ.
This consolidated appeal is from a declaratory judgment action brought by respondent Safeco Insurance Company (Safeco). Safeco alleged that it had no duty to defend appellant Larry Lindberg or to provide coverage for injuries received by appellant Kim Barrett in a boating accident.
The trial court construed the policy to exclude coverage for Barrett's injuries. It also found Safeco had no duty to defend Lindberg against claims by Barrett. We reverse.
The parties have submitted the case on an agreed stipulation of the record pursuant to Minn.R.Civ.App.P. 110.04.
Appellant Larry Lindberg (Lindberg) was first insured by respondent Safeco under a homeowner's policy issued July 13, 1978. The policy period ran from July 13, 1978 through July 13, 1979. Safeco issued a document entitled "Extension Certificate" extending the policy term from July 13, 1979, through July 13, 1980.
In May 1979, during the initial policy period, Lindberg purchased a 14 foot boat with a 55 horsepower motor. On June 22, 1980, during the renewal period, appellant Kim Barrett was riding on the bow of the boat while Lindberg pulled a water skier. As Lindberg turned the boat, Barrett fell from the bow and was injured by the boat and motor.
Safeco claims that the policy language excludes coverage for Barrett's injuries. The relevant policy provision reads:
This policy does not apply:
1. Under Coverage E--Personal Liability and Coverage F--Medical Payments to Others:
* * *
* * *
b. to bodily injury or property damage arising out of the ownership, maintenance, operation, use, loading or unloading of any watercraft:
* * *
* * *
(2) powered by an outboard motor(s), singly or in combination of more than 25 total horsepower, if such outboard motor(s) is owned by any insured at the inception of this policy and not endorsed hereon, unless the insured reports in writing to this company within 45 days after acquisition his intention to insure the outboard motor or combination of outboard motors, ownership of which was acquired prior to the policy term.
The following language is found under the section of the policy entitled Policy Period and Billing Cycle:
The policy term shall be for the period shown on the declarations under "Policy Period" and for such succeeding periods * * * as the required premium * * * is paid and accepted by the company on or before the expiration of the current policy period.
Is the inception of the policy the date of the renewal or the date the initial policy took effect?
The parties' dispute revolves around the meaning of the word "inception." Lindberg purchased the boat and motor in May 1979, during the initial policy period. Barrett argues that inception refers to the effective date of the initial policy period, i.e., that there is only one policy term beginning on the date the policy was first taken out, July 13, 1978. Thus, under Barrett's analysis, Lindberg did not own the boat and motor at the inception of the policy. Hence, there is coverage, since under the strict wording of the policy clause, only motors owned at the inception of the policy and not endorsed thereon are excluded from coverage.
Safeco argues that inception refers to the first day of a renewal period. Under this analysis, Lindberg owned the boat and motor at the inception of the policy and did not endorse them on the policy. Therefore they are not covered.
The trial court thought that this case was controlled by Hauer v. Integrity Mutual Insurance Co., 352 N.W.2d 406 (Minn.1984). We do not agree.
The Hauer court stated:
In Minnesota the general rule is that upon each renewal an entirely new and independent contract of insurance is created and is governed by the laws in effect on the date of renewal.
In Hauer, the court refused to read underinsured motorist coverage into a policy which had been renewed after the statute requiring insurers to offer such coverage had been repealed. A close reading of Hauer and the cases cited therein makes it clear that the "general rule" is of limited applicability. The rule's function is to incorporate into a renewed insurance contract the laws in...
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