This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).








James Bechthold, et al.,


Midwest Family Mutual Insurance Company,


Filed April 4, 2000


Lansing, Judge


Kandiyohi County District Court

File No. C2-98-1294



John E. Mack, Mack & Daby, P.A., 26 Main Street, New London, MN 56273 (for appellants)

Frank J. Rajkowski, Rajkowski Hansmeier Ltd., 11 Seventh Avenue North, St. Cloud, MN 56302 (for respondent)


            Considered and decided by Lansing, Presiding Judge, Davies, Judge, and Harten, Judge.

U N P U B L I S H E D   O P I N I O N


            The district court granted summary judgment for the insurer on the insureds’ claim of breach of a duty to defend.  Because the insurer rejected defense of a workers’ compensation claim and because the policy excludes coverage for bodily injury to any person eligible to receive benefits under workers’ compensation laws, we affirm.


Midwest Family Mutual Insurance Company insured James and Douglas Bechthold under a general-liability insurance policy.  Barbara Jensen injured her back while lifting bags of feed on the Bechtholds’ farm.  Jensen filed a workers’ compensation claim, alleging that the Bechtholds employed her and that during her employment she sustained permanent bodily injuries.  The Bechtholds disputed that Jensen was an employee and tendered defense of the claim to Midwest Family.  Midwest Family declined the tender, asserting that the Bechtholds’ policy excluded coverage for workers’ compensation claims.  The Bechtholds retained an attorney and successfully defended against Jensen’s claim. 

The workers’ compensation court denied Jensen’s claim, finding that Jensen was not working for the Bechtholds but was engaged in her own dairy production on the Bechtholds’ farm at the time of her injury, as evidenced by tax records, milk receipts, and testimony at the hearing.  The court further held that Jensen would not be eligible for benefits even if she were a farm laborer because the Bechtholds operate a family farm, and family farms are excluded from the workers’ compensation act under Minn. Stat. §§ 176.041, subd. 1(b), 176.011, subd. 11a (1994).

The Bechtholds brought this action against Midwest Family in district court, seeking attorneys’ fees incurred in defending the workers’ compensation claim.  The district court granted summary judgment to Midwest Family, and the Bechtholds appeal.


            The interpretation of an insurance policy is a legal issue that the district court may resolve on summary judgment and that we review de novo.  Metropolitan Property & Cas. Ins. Co. v. Miller, 589 N.W.2d 297, 299 (Minn. 1999).  If an insurance policy does not omit legally mandated coverage or otherwise violate the law, the extent of the coverage is governed by the policy.  Reinsurance Ass’n v. Hanks, 539 N.W.2d 793, 797 (Minn. 1995).  Unambiguous coverage language in an insurance policy must be given its plain and ordinary meaning.  Lobeck v. State Farm Mut. Auto. Ins. Co., 582 N.W.2d 246, 249 (Minn. 1998).  Policy exclusions are an integral part of the contract and, in determining coverage, receive the same consideration as other policy provisions.  Id.

            The Midwest Family policy provides personal-liability coverage “if a claim is made * * * against any ‘insured’ for damages because of ‘bodily injury’ * * * caused by an ‘occurrence’ to which this coverage applies.”  The policy includes providing the  insured with a defense for covered claims.  The Midwest Family policy excludes, however, coverage for “bodily injury” to “any person eligible to receive any benefits required to be provided or voluntarily provided by the ‘insured’ under any Workers’ or Workmen’s Compensation  * * * law.” 

            An insurer’s duty to defend under a liability-insurance policy is broader than its duty to indemnify.  Brown v. State Auto. & Cas. Underwriters, 293 N.W.2d 822, 825 (Minn. 1980).  If any part of the underlying claim arguably falls within the scope of coverage, the insurer must defend.  Prahm v. Rupp Constr. Co., 277 N.W.2d 389, 390 (Minn. 1979).  This principle applies even if the claims are groundless.  See Meadowbrook, Inc. v. Tower Ins. Co., 559 N.W.2d 411, 419 (Minn. 1997) (duty to defend “does not depend on the merits of the claim asserted but on whether the allegations of the complaint against the insured state a cause of action within the coverage afforded by the policy”).  But an insurer is not required to defend a suit on a claim outside the coverage of the policy.  State Farm Fire & Cas. Co. v. Williams, 355 N.W.2d 421, 424-25 (Minn. 1984).  The obligation to defend is generally determined by comparing the allegations of the complaint to the indemnity language of the policy.  Meadowbrook, 559 N.W.2d at 415.  When there is no basis, as a matter of law, on which an insurer may be obligated to indemnify the insured, the insurer has no duty to defend.  Woida v. North Star Mut. Ins. Co., 306 N.W.2d 570, 574 (Minn. 1981). 

            Jensen filed a complaint solely for workers’ compensation benefits in a court that has jurisdiction to hear only workers’ compensation claims.  The policy unambiguously excludes coverage for bodily injury under the workers’ compensation laws, and the very confines of the workers’ compensation court preclude the possibility of additional claims that would bring the complaint within the coverage of the policy.  Consequently, no part of the claim against the Bechtholds is arguably within the scope of protection afforded by the policy.  See Meadowbrook, 559 N.W.2d at 418 (“the law obligates an insurer to defend only those types of claims for which it arguably could be found liable”). 

The Bechtholds also argue on appeal that Midwest Family should be estopped from declining a duty to defend because the Bechtholds were injured by reasonably relying on Midwest Family’s general marketing and sales approach.  This argument is untenable for two reasons.  First, nothing in the record supports this assertion.  See DLH, Inc. v. Russ, 566 N.W.2d 60, 71 (Minn. 1997) (in resisting a motion for summary judgment, the nonmoving party must do more than rest on mere averments).  Second, the allegation, which was not included in the complaint, is essentially an argument that Midwest Family declined in bad faith to defend the Bechtholds.  Because Midwest Family was not obligated to defend the workers’ compensation claim, and because the Bechtholds have alleged no improper conduct that would give rise to an extracontractual duty, the Bechtholds have not established any basis on which a court could conclude that Midwest Family breached a duty of good faith.