Matthew J. Barber, James S. Ballentine, Mark H. Gruesner, Schwebel, Goetz & Sieben, P.A., Minneapolis, Minnesota (for appellant) Emilio R. Giuliani, Kimberly Scriver, LaBore, Giuliani & Viltoft, Ltd., Hopkins, Minnesota (for respondent)
This opinion will be unpublished and may not be cited except as provided by Minn . Stat. § 480A.08, subd. 3 (2018). Affirmed
Johnson, Judge Hennepin County District Court
File No. 27-CV-17-14395 Matthew J. Barber, James S. Ballentine, Mark H. Gruesner, Schwebel, Goetz & Sieben, P.A., Minneapolis, Minnesota (for appellant) Emilio R. Giuliani, Kimberly Scriver, LaBore, Giuliani & Viltoft, Ltd., Hopkins, Minnesota (for respondent) Considered and decided by Ross, Presiding Judge; Johnson, Judge; and Jesson, Judge.
Amanda Grace Visser was injured in an automobile collision. The driver of the other vehicle was at fault and was underinsured. State Farm Mutual Automobile Insurance Company, which insured the vehicle that Amanda was driving, paid her underinsured- motorist benefits of $100,000, which is the maximum amount of such coverage on the policy insuring the vehicle that she was driving. Amanda commenced this action to obtain additional underinsured-motorist benefits, up to the $250,000 limit on another State Farm policy that insured another of her family's vehicles. On cross-motions for summary judgment, the district court ruled in favor of State Farm. We conclude that the maximum amount of Amanda's underinsured-motorist coverage is the maximum amount of coverage provided by the insurance policy for the vehicle she was occupying at the time of the collision. Therefore, we affirm.
In early 2013, Cheryl Visser had insurance coverage from State Farm on two vehicles: a 2000 Pontiac and a 1998 Chevrolet. On February 1, 2013, Cheryl's daughter Amanda was driving the Pontiac vehicle on state highway 65 in Kanabec County when she was involved in a collision with a pick-up truck. The accident report, which was prepared by a state trooper, states that the driver of the pick-up truck was drunk and failed to stop at a stop sign. Amanda alleges in this action that she suffered personal injuries in the collision, which resulted in medical care, lost earnings, and pain and suffering, and that she is entitled to more than $150,000 in damages from the other driver. But the insurance policy for the other driver's pick-up truck provided liability coverage up to a limit of only $50,000.
Cheryl's insurance policy for the Pontiac vehicle provided underinsured-motorist coverage with an upper limit of $100,000 per person. Her insurance policy for the Chevrolet vehicle provided underinsured-motorist coverage with an upper limit of $250,000 per person. Amanda was an additional named insured on the policy for the Chevrolet vehicle. It is undisputed that Amanda was an insured on the policy for the Pontiac vehicle because she is related to Cheryl and lived in Cheryl's home at the time of the collision. See Minn. Stat. § 65B.43, subd. 5 (2018); Becker v. State Farm Mut. Auto. Ins. Co., 611 N.W.2d 7, 13 (Minn. 2000). State Farm paid Amanda underinsured-motorist benefits of $100,000, the upper limit of such coverage under the policy for the Pontiac vehicle.
In September 2017, Amanda commenced this action against State Farm to obtain a declaration that she is entitled to additional underinsured-motorist benefits, as much as $250,000, which is the upper limit under the policy for the Chevrolet vehicle. The parties filed cross-motions for summary judgment. In June 2018, the district court filed an order in which it granted State Farm's motion and denied Amanda's motion. Amanda appeals.
Amanda argues that the district court erred by granting State Farm's motion for summary judgment.
A district court must grant a motion for summary judgment "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that either party is entitled to a judgment as a matter of law." Minn. R. Civ. P. 56.03 (2017). A genuine issue of material fact exists if a rational trier of fact, considering the record as a whole, could find for the non-moving party. Frieler v. Carlson Mktg. Grp., Inc., 751 N.W.2d 558, 564 (Minn. 2008). In evaluating the evidence in the summary-judgment record, a district court must view the evidence in the light most favorable to the non-moving party. See RAM Mut. Ins. Co. v. Rohde, 820 N.W.2d 1, 6 (Minn. 2012). This court applies a de novo standard of review to a district court's grant of a motion for summary judgment. Id.; Day Masonry v. Independent Sch. Dist. 347, 781 N.W.2d 321, 325 (Minn. 2010).
Rule 56 recently was "revamped" to more "closely follow" the federal rules but in a way that was not intended to alter existing Minnesota caselaw. See Minn. R. Civ. P. 56, 2018 advisory comm. cmt.; Order Promulgating Amendments to Rules of Civil Procedure, No. ADM04-8001 (Minn. Mar. 13, 2018). We cite the prior version of rule 56 because that is the version that applied at the time of proceedings in the district court. --------
Because insurance coverage is primarily a matter of contract, Cincinnati Ins. Co. v. Franck, 644 N.W.2d 471, 473 (Minn. App. 2002), we begin by reviewing the language of the applicable insurance policies that State Farm issued to Cheryl. Each of the policies contains the following provision concerning injuries caused by an underinsured motorist:
We will pay compensatory damages for bodily injury an insured is legally entitled to recover from the owner or driver of an underinsured motor vehicle. The bodily injury must be:In addition, each policy contains the following provision concerning the situation in which multiple policies provide coverage for injuries caused by an underinsured motorist:
1. sustained by an insured; and
2. caused by an accident that involves the operation, maintenance, or use of an underinsured motor vehicle as a motor vehicle or motorcycle.
If Underinsured Motor Vehicle Coverage provided by this policy and one or more other vehicle policies issued to you or any resident relative by the State Farm Companies apply to the same bodily injury, then:
a. the Underinsured Motor Vehicle Coverage limits of such policies will not be added together to determine the most that may be paid; and
b. the maximum amount that may be paid from all such policies combined is the single highest applicable limit provided by any one of the policies. We may choose one or more policies from which to make payment.
The district court resolved the parties' respective arguments by reasoning, in part, as follows:
The policy language relied upon by [Amanda] does not . . . mandate that both the Chevy and Pontiac Policies apply to the February 1, 2013 accident. The limitations language at issue merely defines how benefits are apportioned if more than one policy applies. While [Amanda] is correct that if both policies apply . . . , then she is entitled to the single highest applicable policy, the Court must first decide which policy(s) apply before reaching the limitation provision relied upon by [Amanda].
The district court then turned to the Minnesota No-Fault Automobile Insurance Act, Minn. Stat. §§ 65B.41-.71 (2018), to determine which policy applies and relied on the following statutory provision:
 If at the time of the accident the injured person is occupying a motor vehicle, the limit of liability for uninsured and underinsured motorist coverages available to the injured person is the limit specified for that motor vehicle.  However, if the injured person is occupying a motor vehicle of which the injured person is not an insured, the injured person may be entitled to excess insurance protection afforded by a policy in which the injured party is otherwise insured.  The excess insurance protection is limited to the extent of covered damages sustained, and further is available only to the extent by which the limit of liability for like coverage applicable to any one motor vehicle listed on the automobile insurance policy of which the injured person is an
insured exceeds the limit of liability of the coverage available to the injured person from the occupied motor vehicle.Minn. Stat. § 65B.49, subd. 3a(5) (alterations added). The district court reasoned further that because Amanda "occupied a vehicle for which she was an insured, . . . she is limited to the amount of underinsured motorist benefits available under the Pontiac Policy."
On appeal, Amanda contends that both the Pontiac policy and the Chevrolet policy apply to the injuries she sustained in the February 1, 2013 collision. She also contends that, because both policies apply, she is entitled to "the single highest applicable limit provided by any one of the policies." She contends further that section 65B.49, subdivision 3a(5), does not determine which policy or policies apply because that statute merely "explains the default priorities from which an injured person may look for underinsured motor coverage." In response, State Farm contends that the district court properly concluded that Amanda's entitlement to underinsured-motorist benefits is determined by the coverage limit of the insurance policy for the Pontiac vehicle because she was occupying the Pontiac vehicle at the time of the collision.
The district court correctly observed that the two insurance policies do not specify which policy or policies apply in the circumstances of this case but, rather, merely specify which policy provides underinsured-motorist coverage if more than one policy applies. Accordingly, the key question is whether both policies apply. The language of each policy recognizes that such a question may arise, but each policy is silent as to how that question should be answered. In that respect, each policy is different from the State Farm insurance policy at issue in LaFave v. State Farm Mut. Auto. Ins. Co., 510 N.W.2d 16 (Minn. App. 1993), which expressly stated that "this coverage does not apply if the injured person is an insured under a policy covering the vehicle occupied at the time the bodily injury is sustained." Id. at 18.
To answer the question whether both policies apply, the district court referred to a statute in the no-fault act, specifically, section 65B.49, subdivision 3a(5). It was appropriate to do so because section 65B.49, subdivision 3a(5), "directs injured occupants to seek [underinsured-motorist] coverage initially from the insurer of the motor vehicle they occupied at the time of the accident and establishes as limits of liability those specified in the policy on the occupied vehicle." See Becker, 611 N.W.2d at 10-11. As the supreme court has explained, "The three sentences in [section 65B.49, subdivision 3a(5)] explain  the source of primary . . . [underinsured-motorist] coverage (the occupied vehicle),  the source of excess . . . [underinsured-motorist] coverage (a vehicle covered by a policy in which the injured party is otherwise insured), and  the availability of excess coverage." Sleiter v. American Family Mut. Ins. Co., 868 N.W.2d 21, 24 (Minn. 2015) (quotations omitted). But, by its plain language, the second sentence of section 65B.49, subdivision 3a(5) applies only "if the injured person is occupying a motor vehicle of which the injured person is not an insured." See Minn. Stat. § 65B.49, subd. 3a(5). The supreme court has followed the plain language of the statute by stating, "The second sentence of [section 65B.49, subdivision 3a(5)] provides that if the injured person is not an insured of the occupied motor vehicle, the injured person may then be entitled to seek excess insurance protection through another automobile insurance policy in which the injured person is insured." Becker, 611 N.W.2d at 11 (emphasis added). Accordingly, section 65B.49, subdivision 3a(5), "'require[s] the injured occupant to look first and exclusively to the policy limits on the occupied vehicle' for . . . [underinsured-motorist] benefits." West Bend Mut. Ins. Co. v. Allstate Ins. Co., 776 N.W.2d 693, 699 (Minn. 2009) (quoting Vue v. State Farm Ins. Cos., 582 N.W.2d 264, 267 (Minn. 1998)). For these reasons, the supreme court repeatedly has stated that underinsured-motorist coverage "follows the vehicle, rather than the person." Id.; see also Thommen v. Illinois Farmers Ins. Co., 437 N.W.2d 651, 653 (Minn. 1989); Hanson v. American Family Mut. Ins. Co., 417 N.W.2d 94, 96 (Minn. 1987). The district court's reasoning reflects a proper understanding of the statute and the applicable caselaw.
Amanda contends that the district court erred by not confining its analysis to the language of the two insurance policies, each of which states that it provides coverage for "compensatory damages for bodily injury an insured is legally entitled to recover from the owner or driver of an underinsured motor vehicle." In support of this contention, she cites Pepper v. State Farm Mut. Auto. Ins. Co., 813 N.W.2d 921 (Minn. 2012), for the proposition that, "so long as coverage required by law is not omitted and policy provisions do not contravene applicable statutes, the extent of the insurer's liability is governed by the contract entered into." See id. at 927 (quotation omitted). The Pepper opinion, however, was not concerned with section 65B.49, subdivision 3a(5), and did not discuss the supreme court's prior opinions in Sleiter, Becker, and West Bend, let alone overrule them. See generally id. at 925-29. As stated above, that body of caselaw teaches that section 65B.49, subdivision 3a(5) "directs injured occupants to seek [underinsured-motorist] coverage initially from the insurer of the motor vehicle they occupied at the time of the accident and establishes as limits of liability those specified in the policy on the occupied vehicle." Becker, 611 N.W.2d at 11. Thus, the district court did not err by relying, in part, on section 65B.49, subdivision 3a(5), to determine Amanda's entitlement to underinsured-motorist coverage.
In sum, because Amanda was an insured on the policy for the Pontiac vehicle and occupied the Pontiac vehicle at the time of the collision, the amount of her underinsured-motorist coverage is limited by the terms of the insurance policy that provides coverage for the Pontiac vehicle, which limits underinsured-motorist coverage to $100,000 per person. Thus, the district court did not err by granting State Farm's motion for summary judgment.