This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).
STATE OF MINNESOTA
IN COURT OF APPEALS
John Slavens, individually and as parent and
natural guardian of S.S., a minor,
American Fire & Casualty Company,
an Ohio Corporation,
Jacque I. Barnhart, et al.,
Filed January 30, 2001
County District Court
File No. CT9812242
James P. Larkin, Sonya R. Braunschweig, Larkin, Hoffman, Daly & Lindgren, Ltd., 7900 Xerxes Avenue South, 1500 Wells Fargo Plaza, Bloomington, MN 55431 (for appellant)
Thomas M. Stieber, Thomas J. Lallier, Foley & Mansfield, P.L.L.P., 1108 Nicollet Mall, 200 Lafayette Building, Minneapolis, MN 55403 (for respondent)
Considered and decided by Amundson, Presiding Judge, Schumacher, Judge, and Halbrooks, Judge.
Appellant’s daughter was sexually molested by the son of their children’s daycare provider. Appellant sued the daycare provider and its insurance company. The district court granted summary judgment for the insurance company based on the policy’s sexual molestation exception. Appellant contends that a condition of that exception is that the molestation be committed by someone who was providing daycare services. Appellants argue the daycare provider’s son did not provide such services. Additionally, appellant contends the policy’s severability clause mandates that coverage for the daycare provider should not be precluded based on the acts of another insured. Finally, appellant argues that the insurance company is estopped from denying coverage. We affirm.
Appellant John Slavens and his wife, Maria Slavens, moved to Plymouth, Minnesota in June 1993. Shortly thereafter, the Slavenses contacted Jacque Barnhart about providing daycare services for their two daughters. The parties agreed that Jacque Barnhart would provide daycare services for the Slavenses’ children in her home. During their negotiations, the parties discussed the availability of insurance coverage to protect the Slavenses’ children while in daycare.
Shortly after Jacque Barnhart started providing daycare services for the Slavens family, Bruce Barnhart purchased a home daycare endorsement to the family’s homeowner’s policy from American Fire to cover the daycare enterprise. The policy’s home daycare coverage endorsement provides:
For an additional premium we cover the home day care business described below, conducted by an insured on the residence premises, subject to the following:
* * * *
Medical Payments to Others apply to bodily injury and property damage arising out of home day care services regularly provided by an insured and for which an insured receives monetary or other compensation.
However, the bodily injury and property damage coverage provided under this endorsement specifically excludes
bodily injury or property damage arising out of sexual molestation, corporal punishment or physical or mental abuse inflicted upon any person by or at the direction of aninsured, an insured’s employee or any other person involved in any capacity in the daycare enterprise.
In June 1996, the Slavenses learned that one of their daughters might have been sexually abused and had her examined by a psychiatrist and physician. The Slavenses learned that Wesley Barnhart, the then-teenage son of Jacque and Bruce Barnhart, had sexually molested their daughter over 160 times while she was in Jacque Barnhart’s care. Wesley Barnhart was arrested.
After learning the Slavenses would be filing a claim against his family, Bruce Barnhart advised American Fire, and they denied coverage. John Slavens filed a lawsuit in July 1998 against the Barnharts and American Fire alleging negligence, negligent misrepresentation, and breach of contract. The Barnharts filed a cross-claim against American Fire. American Fire moved for summary judgment on all claims. The district court ordered a final judgment for American Fire. This appeal followed.
D E C I S I O N
This is an appeal from summary judgment; accordingly, we ask two questions on review: (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, 4 (Minn. 1990). Interpretation of an insurance policy is a question of law, Iowa Kemper Ins. Co. v. Stone, 269 N.W.2d 885, 887 (Minn. 1978), which this court reviews de novo.
Slavens contends that, because Wesley Barnhart was not involved in the daycare business, the district court erred when it concluded that the sexual molestation exclusion bars coverage. According to Slavens’s construction, using the phrase “any other person” in the sexual molestation exclusion to modify “involved in any capacity in the daycare enterprise” clearly implies that the policy only excludes acts by individuals involved in the daycare business. Any other construction, Slavens argues, renders the insertion of the word “other” in this provision superfluous and without meaning. We disagree.
There is no rule mandating that each and every word in an insurance policy must be given meaning. Rather, our focus is to give effect to the intent of the parties as indicated by the language used in drafting the entire contract. Employers Mut. Cas. Co. v. A.C.C.T., Inc., 580 N.W.2d 490, 493 (Minn. 1998). American Fire contends that the intent of the contract is to exclude coverage when someone who qualifies as “an insured” under the policy commits an act of sexual molestation—regardless of whether that person is involved in the day care business. We agree.
The sexual molestation exclusion communicates the parties’ intent that coverage be denied where acts of sexual molestation are perpetrated by (1) insureds; (2) people employed to assist in the daycare enterprise; and (3) people who assist in the daycare enterprise, though not specifically employed to do so. Thus, because Wesley Barnhart was clearly “an insured” under the policy, his involvement in the daycare enterprise is not a necessary element to exclude coverage under the provision.
The construction proposed by Slavens would lead to a contrary result. Wesley Barnhart was an “insured” under the Barnharts’ homeowner’s policy. Because the home daycare coverage was an endorsement on the homeowner’s policy, coverage would be barred for some intentional injuries committed by Wesley Barnhart, but not for others.
Slavens next contends that of the severability clause contained in the home daycare endorsement renders application of the sexual molestation exclusion improper. The severability clause states:
Severability of Insurance. This insurance applies separately to each insured except with respect to the Limit of Liability. Therefore, this condition will not increase the annual Aggregate Limit of Liability regardless of the number of insureds.
Slavens argues that this clause limits the application of the sexual molestation exclusion to only those instances where the insured seeking coverage is the person who committed the excluded acts. This argument is akin to the argument that, as innocent co-insureds, the Barnharts are entitled to coverage under the policy. But, where an exclusion is clear and unambiguous, co-insureds are not entitled to coverage. Amick v. State Farm Fire & Cas. Co., 862 F.2d 704, 706 (8th Cir. 1988).
An exclusion may apply only to the particular person committing the designated acts if the exclusion itself delineates a particular individual. Here, the sexual molestation exclusion is not negated by the severability clause because the exclusion bars coverage if someone who qualifies as “an insured” under the policy committed the acts of sexual molestation. Accordingly, the exclusionary provision, read in conjunction with the severability clause, bars coverage in this case.
At the time the Barnharts purchased the home daycare endorsement, Bruce Barnhart was a claims supervisor for Ohio Casualty Company. Respondent American Fire is one of the Ohio Casual Group of Insurance Companies. Slavens argues that American Fire should be estopped from denying coverage because it gave Bruce Barnhart apparent authority to act as an insurance agent in procuring home daycare coverage for his wife’s daycare business. But third parties, who have no rights under an insurance contract, cannot assert estoppel. Redeemer Covenant Church v. Church Mut. Ins. Co., 567 N.W.2d 71, 75 n.5 (Minn. App. 1997), review denied (Minn. Oct. 1, 1997). Slavens contends he has standing to assert an estoppel claim because he is a third-party beneficiary under the policies. But Slavens cannot bring a direct action against American Fire under the theory that he is a third-party beneficiary until he has recovered a judgment against the primary beneficiary, the insured, because an injured party only has the rights of an incidental beneficiary, not a third party beneficiary. Drake v. Ryan, 514 N.W.2d 785, 787-88 (Minn. 1994);Mech v. General Cas. Co., 410 N.W.2d 317, 320 (Minn. 1987). Thus, at the very least, Slavens’s estoppel claim against American Fire is premature. Accordingly, we need not examine the issue of whether Bruce Barnhart was acting as American Fire’s duly authorized agent.
 Under the Barnharts’ homeowner policy, “insureds” are defined as the policyholder and residents of their household who are either: relatives, or persons under the age of 21 and in the care of any person named above. Here, Jacque, Bruce, and Wesley Barnhart are all insureds under the policy.