This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1998).








Lorraine M. Oster,





Auto Owners Insurance Company,




Filed July 25, 2000

Certified question answered in the negative

Schumacher, Judge


Clay County District Court

File No. C398610



Leland F. Hagen, Lee Hagen Law Office, Ltd., 902 South 28th Street, Post Office Box 3143, Fargo, ND 58108-3143 (for respondent)


Eric G. Olsen, Barry P. Hogan, Jason M. Hastings, Hogan Law Firm, P.C., 403 Center Avenue, Suite 600, Post Office Box 677, Moorhead, MN 56561-0677 (for appellant)



            Considered and decided by Shumaker, Presiding Judge, Toussaint, Chief Judge, and Schumacher, Judge.

U N P U B L I S H E D   O P I N I O N


            Respondent Lorraine M. Oster, a North Dakota resident, sought underinsured motorist coverage under her policy with appellant Auto Owners Insurance Company for damages stemming from a car accident in Minnesota.  The district court denied Auto Owners motion for summary judgment but subsequently certified the question of whether an out-of-state policy must conform to Minnesota's underinsured motorist statute.  We answer the certified question in the negative.


On December 17, 1996, Oster was a passenger in a car owned and operated by Otto C. Korbel.  Oster resided in Fargo, North Dakota and Korbel in Barnesville, Minnesota.  They were traveling on westbound Interstate 94 from Barnesville to Fargo in blizzard conditions.  The accident occurred about 20 miles from Fargo.  A semi-tractor and trailer struck the car from behind.  The state patrol cited Korbel for careless driving for allegedly stopping on the interstate.  Oster sustained physical injuries, including low-back pain, a collapsed lung, and possible rotator cuff tear.  Oster collected liability payments through insurance policies on the car and the semi.  She also collected no-fault medical benefits under her Auto Owners policy and she received medical expense benefits through her own health insurance and Medicare.

Oster made a demand of Auto Owners to pay underinsured motorist benefits.  Because Oster was a North Dakota resident, her Auto Owners policy was issued as a North Dakota policy under North Dakota rates and containing standard North Dakota policy language.  Auto Owners denied her underinsured motorist claim because under North Dakota's "difference-of-limits" approach to underinsured motorist coverage she would not be entitled to underinsured motorist benefits.  In contrast, Minn. Stat. § 65B.49 (1998) takes an "add-on" approach to underinsured motorist coverage.

            In April 1998, Oster filed this action against Auto Owners seeking underinsured motorist benefits.  Auto Owners brought a motion for summary judgment, arguing that North Dakota law should be applied.  In a January 26, 1999 order, the district court denied summary judgment, reasoning that Minnesota law should be applied.  In a December 7, 1999 order, the district court granted Auto Owners subsequent motion to certify certain questions of law as important and doubtful, including the choice-of-law question and whether Minnesota law requires an out-of-state policy to provide "add-on" underinsured motorist coverage.


When considering certified questions arising from a denial of summary judgment, "this court reviews the record to determine whether there are any genuine issues of material fact and whether the lower courts erred in their application of the law."  Employers Mut. Cas. Co. v. A.C.C.T., Inc., 580 N.W.2d 490, 493 (Minn. 1998) (quotation and citation omitted).  When the parties agree on the facts, as they do here, only questions of law are left for this court to review.  Metropolitan Property & Cas. Ins. Co. v. Miller, 589 N.W.2d 297, 299 (Minn. 1999).

The interpretation of insurance contracts and the construction of statutes governing them present questions of law which this court applies to the facts of the particular coverage situation.


American Nat'l Property & Cas. Co. v. Loren, 597 N.W.2d 291, 292 (Minn. 1999).

Minnesota statute provides for "add-on" underinsured motorist coverage.  The add-on rule for underinsured motorist coverage is expressed at Minn. Stat. § 65B.49, subd. 4a, which states in part:

With respect to underinsured motorist coverage, the maximum liability of an insurer is the amount of damages sustained but not recovered from the insurance policy of the driver or owner of any underinsured at fault vehicle.


Minn. Stat. § 65B.49, subd. 4a (1998).  The add-on approach was adopted in 1989, when the legislature amended subdivision 4a, rejecting the prior difference-of-limits approach.  Davis v. American Family Mut. Ins. Co., 521 N.W.2d 366, 369 (Minn. App. 1994).  Minn. Stat. § 65B.49, subd. 3a(5) (1998) establishes a priority scheme for sources of underinsured motorist coverage.  Becker v. State Farm Mut. Auto. Ins. Co., 611 N.W.2d 7, 12 (Minn. 2000).

            But out-of-state policies issued to nonresidents need not conform to Minnesota's "add-on" approach.  As this court recently stated,

the rule in Minnesota is that uninsured and underinsured motorist coverage are not required for nonresidents, and therefore if nonresidents have such coverage it need not comply with Minnesota law.


Warthan v. American Family Mut. Ins. Co., 592 N.W.2d 136, 139 (Minn. App. 1999), review denied (Minn. Jul. 28, 1999).  Applying this rule, the Warthan court concluded that Minnesota law does not require reformation of an out-of-state policy's underinsured motorist coverage to conform to Minnesota law.  Id.  Accordingly, the out-of-state policy issued to Oster, a resident of North Dakota, need not conform to Minnesota underinsured motorist "add-on" requirements.  Choice-of-law analysis is not necessary because it is not outcome determinative.  See Myers v. Government Employees Ins. Co., 302 Minn. 359, 363, 225 N.W.2d 238, 241 (1974).  Auto Owners is entitled to summary judgment as a matter of law.

Certified question answered in the negative.