IN COURT OF APPEALS
Aaron R. Carlson, et al.,
Allstate Insurance Company,
Midwest Family Mutual Insurance Company,
Allstate Insurance Company, defendant
and third party plaintiff,
Michael J. Fay, et al., third party defendants,
Filed July 11, 2007
St. Louis County District Court
File No. 69HI-CV-05-175
Darrold E. Persson, David A. Arndt, Matonich & Persson, Chartered, 2031 Second Avenue East, P.O. Box 127, Hibbing, MN 55746 (for appellants)
Robert C. Barnes, McCarthy & Barnes, PLC, 11 East Superior Street, Suite 330, Duluth, MN 55802 (for respondent Allstate Insurance Company)
Karen K. Hatfield, Hansen, Dordell, Bradt, Odlaug & Bradt, 3900 Northwoods Drive, Suite 250, St. Paul, MN 55112 (for respondent Midwest Family Mutual Insurance Company)
Rolf E. Sonnesyn, Tomsche,
Sonnesyn & Tomsche, P.A.,
Considered and decided by Randall, Presiding Judge; Willis, Judge; and Crippen, Judge.*
S Y L L A B U S
1. When an automobile-insurance policy limits to “the policyholder” uninsured-motorist coverage for injuries suffered by a person who was not in, on, or getting into or out of an insured vehicle, coverage is limited to the policy’s named insured.
2. For the purposes of Minn. Stat. § 65B.49, subd. 3a(5) (2006), which allows a person who was not occupying a motor vehicle when he was injured to seek uninsured-motorist coverage from a policy under which he “is insured,” that person “is insured” if he is entitled to uninsured-motorist coverage under the policy.
O P I N I O N
Appellants challenge the district court’s grant of summary judgment to respondent insurance company. Appellants argue that (1) under the plain language of the insurance policy, appellant Aaron Carlson is entitled to uninsured-motorist coverage for injuries that he suffered as a pedestrian or (2) even if the plain language of the policy does not provide coverage for Carlson, appellants had a “reasonable expectation” of uninsured-motorist coverage that must be honored by the insurance company. Appellants argue also that because Carlson “is insured” by the Allstate policy, uninsured-motorist coverage is mandated by Minn. Stat. § 65B.49, subd. 3a(5) (2006). We affirm.
On January 1, 2003, appellant Aaron
Carlson (Carlson) parked his 2002 Ford Focus on
April 2004, Carlson obtained a default judgment in the amount of $170,000
against the uninsured motorist who struck him. Appellants then brought a suit against
Allstate and Midwest Family Mutual Insurance Company (
I. Did the district court err when it determined that the Allstate policy did not provide uninsured-motorist coverage to Carlson when he was injured while walking across the street?
II. Did the district court err when it determined that appellants did not have a reasonable expectation of coverage for Carlson’s injuries?
III. Did the district court err when it determined that the Minnesota No-Fault Automobile Insurance Act does not mandate uninsured-motorist coverage for Carlson?
an appeal from summary judgment, this court determines (1) whether there are
any genuine issues of material fact and (2) whether the district court erred in
its application of the law. State by Cooper v. French, 460 N.W.2d 2,
Appellants argue first that the district
court erred when it determined that the Allstate policy did not provide
uninsured-motorist coverage to Carlson for his injuries. The construction of an insurance policy is a
question of law, which we review de novo. Steele v. Great W. Cas.
Under the policy at issue here, Allstate agrees to pay an “insured person” damages for bodily injury that the insured person “is legally entitled to recover from the owner or operator of an uninsured or underinsured auto” if the injury is caused “by [an] accident and arise[s] out of the ownership, maintenance or use of an uninsured or underinsured auto.” The policy defines an “insured person” as (1) “[y]ou and any resident”; (2) “[a]ny person while in, on, getting into or out of an insured auto with your permission”; and (3) “[a]ny other person [who] is legally entitled to recover because of bodily injury to you, a resident, or an occupant of your insured auto with your permission.” And the policy defines “you” as “the policyholder named on the Policy Declarations and that policyholder’s [resident] spouse,” and “resident” as “a relative who actually resides in” the policyholder’s household.
There is no dispute that Carlson’s injuries were caused by an accident that arose out of the use of an uninsured motor vehicle, nor is it disputed that when he was injured, Carlson was not residing in his parents’ home in Hibbing, but rather lived in Minneapolis, and that Carlson was not “in, on, getting into or out of an insured auto.” Thus, under the policy, Carlson is entitled to uninsured-motorist coverage for his injuries only if he is a “policyholder.”
Appellants note that the policy-declarations page does not use the term “policyholder” and argue that Carlson is a “policyholder” because he is identified on the policy-declarations page as a listed driver. We disagree. While the policy-declarations page does not use the term “policyholder,” it does identify the “named insured(s),” and the named insureds are Robert and Gail Carlson only. The policy-declarations page identifies Carlson only as one of the “driver(s) listed.” Given the facts that Robert Carlson acquired the policy and paid the premiums, we conclude that a reasonable person would understand that the policyholders are the “named insured(s),” not the listed drivers.
We conclude, therefore, that because Carlson is not a policyholder, Carlson is not entitled to uninsured-motorist coverage for his injuries under the plain language of the policy.
Appellants next argue that under the
doctrine of reasonable expectations, Carlson is entitled to uninsured-motorist
coverage. The doctrine of reasonable expectations protects the objectively reasonable
expectations of an insured even if a close study of the insurance policy would
negate those expectations. Jostens,
Appellants argue that they had a reasonable expectation that uninsured-motorist coverage extended to Carlson because Robert Carlson’s insurance agent told him that his two children were “covered the same as” he and his wife and because Carlson’s name was added to the policy-declarations page and insurance cards were issued accordingly. The district court determined that any expectation of coverage that appellants may have had was defeated by the plain language of the policy, noting that uninsured-motorist coverage is extended “only to those who are considered ‘insured [persons]’ under the policy” and that Carlson was not an “insured person” when he was struck by the uninsured motorist.
As we have noted above, we agree with the district court that Carlson was not an “insured person” as a pedestrian. Thus, regardless of whether Carlson was a listed driver on the policy-declarations page, the plain language of the policy excludes coverage for Carlson’s injuries. See Reinsurance Ass’n, 516 N.W.2d at 566 (noting that the doctrine of reasonable expectations does not apply when a prominent term excludes coverage). Further, even if Robert Carlson was told that his two children were “covered the same” as he and his wife, the doctrine of reasonable expectations does not eliminate the policyholder’s obligation to read the policy. See Hubred, 442 N.W.2d at 311. And we note that while Carlson was in, on, or getting into or out of the vehicle, he had the same uninsured-motorist coverage that his parents had. Thus, under the plain language of the policy, appellants had no reasonable expectation of coverage for Carlson’s injuries.
Appellants argue finally that
uninsured-motorist coverage for Carlson in these circumstances is mandated by
Minn. Stat. § 65B.49, subd. 3a(5) (2006), which is part of the no-fault
act. When construing a statute, we must
first determine whether the statute is ambiguous, that is, whether the statute
is reasonably subject to more than one interpretation. Am. Family Ins. Group v. Schroedl, 616
N.W.2d 273, 277 (
The purpose of the no-fault act is “to
relieve the severe economic distress of uncompensated automobile accident
victims.” Lobeck v. State Farm Mut.
Auto. Ins. Co., 582 N.W.2d 246, 249 (
Section 65B.49, subdivision 3a(5), is the part
of the no-fault act that establishes the order in which an injured person
should seek uninsured-motorist coverage from “relevant policies.” Schons v. State Farm Mut. Auto. Ins. Co.,
621 N.W.2d 743, 745 (
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.
If at the time of the accident the injured person is not occupying a motor vehicle or motorcycle, the injured person is entitled to select any one limit of liability for any one vehicle afforded by a policy under which the injured person is insured.
The first paragraph of section 65B.49,
subdivision 3a(5), governs the right of an injured person who was occupying a
motor vehicle to seek underinsured- or uninsured-motorist coverage. Holmstrom v.
Appellants argue that because the second paragraph of section 65B.49, subdivision 3a(5), provides that an injured person may select any one policy for any one vehicle under which the injured person “is insured,” and because even if Carlson was not a policyholder under the Allstate policy, he “is insured” by that policy, the statute mandates uninsured-motorist coverage here.
Respondents argue that an injured person “is
insured” by a policy only if that person is the named insured under the policy
or the spouse or other relative who resides in the same household as the named insured
and is not named on any other insurance policy, relying on the supreme court’s
decision in Becker v. State Farm Mut. Auto. Ins. Co., 611 N.W.2d 7 (
The district court concluded that section 65B.49, subdivision 3a(5), does not mandate coverage because Carlson “was insured” by the Allstate policy only when he was “in, on, or getting out of the vehicle.” We agree.
For the purpose of the second paragraph of
Minn. Stat. § 65B.49, subd. 3a(5), an injured person “is insured” by an
automobile-insurance policy if he is entitled to uninsured-motorist coverage
under that policy for his injury. The
statute does not define the term “is insured.” We therefore apply the plain and ordinary
meaning of “is insured.”
Because there is no claim that the Allstate
policy did not provide the mandatory minimum uninsured-motorist coverage
required by statute, whether Carlson was insured by the Allstate policy when he
was struck by the uninsured motorist depends on the terms of the policy. See Stewart v. Ill. Farmers Ins. Co., 727
N.W.2d 679, 684 (
D E C I S I O N
Carlson was not entitled to uninsured-motorist coverage for his injuries under the plain language of the Allstate policy; appellants had no reasonable expectation of uninsured-motorist coverage for Carlson’s injuries; and Carlson was not insured by the Allstate policy when he was injured by the uninsured motorist and, thus, Minn. Stat. § 65B.49, subd. 3a(5) (2006), does not mandate coverage for Carlson’s injuries. We therefore affirm the district court.
* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.
 We note that the statute does define the word “insured” as “an insured under [an insurance policy],” which the statute then defines as the named insured of an insurance policy and, inter alia, the named insured’s spouse or other relative who resides in the same household as the named insured. See Minn. Stat. § 65B.43, subd. 5 (2006). This definition applies to the term “an insured,” not the term “is insured.” See Becker, 611 N.W.2d at 11 (defining “an insured” as those categories of individuals identified in section 65B.43, subdivision 5); see also Minn. Stat. § 65B.43, subd. 1 (2006) (providing that the definition of “insured” is applicable unless the “context clearly indicates a different meaning”). But we also note that, in any event, Carlson would not qualify as “an insured” under section 65B.43, subdivision 5, because it is undisputed that he was not residing in his parents’ home.