This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2002).






Grinnell Mutual Reinsurance Co.,





Cory Winch,



Joe Fellin,



Enderes Tool Company, Inc., et al.,



Filed March 25, 2003

Reversed and remanded

Gordon W. Shumaker, Judge


Freeborn County District Court

File No. C2011355




Michael T. O’Rourke, 114 West Second Street, Fairmont, MN  56031 (for appellant)


Steven J. Hovey, 807 West Oakland Avenue, Austin, MN  55912 (for respondent Winch)


Donald Savelkoul, 211 South Newton Avenue, Albert Lea, MN  56007 (for respondent Fellin)


Michael D. Barrett, Cousineau, McGuire & Anderson, Chartered, 1550 Utica Avenue South, Minneapolis, MN  55416-5318 (for respondents Enderes Tool Co., et al.)


            Considered and decided by Randall, Presiding Judge, Shumaker, Judge, and Wright, Judge.

U N P U B L I S H E D   O P I N I O N


            In this insurance coverage dispute, the district court granted summary judgment, finding coverage.  It ruled that the criminal-act exclusion did not apply because the injuries the plaintiff suffered were not a reasonably expected result of the insured’s actions and that the insured’s delay in notifying the insurer of the claim did not preclude coverage because the insurer failed to show actual prejudice.  Because there are factual issues that preclude summary judgment, we reverse and remand.


            Respondent Cory Winch and the insured, respondent Joseph Fellin, were co-workers, employed by respondent Enderes Tool Co.  On March 11, 1999, Fellin and Winch became involved in a verbal argument at the workplace, which accelerated.  Fellin walked over to Winch, who was sitting on a bench, grabbed him by the collar of his tee shirt, and pulled him off the bench and onto his feet.  Winch claimed that Fellin shook him back and forth, but Fellin denied doing so.  There was one witness, Rebecca Adams.  The incident was reported to supervisors and to the Albert Lea police, but no charges were filed.

            On March 26, 1999, Winch sued Fellin for damages, alleging that he had suffered a spinal injury.  Fellin’s answer, prepared by his private attorney, is dated May 7, 1999.  The case then went through a period of inactivity after Winch was injured in a car accident in summer 1999, because it was unclear how the accident affected his injuries from the workplace incident.  Once it became clear that the matter would proceed, Fellin’s private attorney advised appellant insurer of the pending action in a letter dated July 31, 2001.  The insurer then brought a declaratory-judgment action, contending that it had no duty to defend or indemnify Fellin, based, in relevant part, on the criminal-act exclusion and the delayed-claim provision.  The insurer and Winch parties moved for summary judgment.

            The district court ruled, in relevant part, that the criminal-act exclusion did not apply because although there were fact issues as to whether Fellin committed assault, the injury to Winch was not a reasonably expected result of Fellin’s actions.  The court also ruled that the delay in notifying the insurer of the claim did not preclude coverage because the insurer failed to show actual prejudice.  The court granted summary judgment, finding coverage, and the insurer appealed.


            In reviewing a summary judgment, the appellate court will examine whether genuine issues of material fact exist and whether the district court erred as a matter of law.  Progressive Specialty Ins. Co. v. Widness, 635 N.W.2d 516, 518 (Minn. 2001).  Issues of statutory construction and contract interpretation raise questions of law that are reviewed de novo.  Id.  “[C]overage provisions are construed according to the expectations of the insured and exclusions are construed narrowly.”  Am. Family Ins. Co. v. Walser, 628 N.W.2d 605, 609 (Minn. 2001) (citation omitted).


            Appellant argues that the criminal-act exclusion precludes coverage because the injuries arose out of a criminal act by Fellin, its insured.  That exclusion reads:

                        We do not cover bodily injury or property damage which results from an act committed by any insured person in the course of or in the furtherance of any crime or offense of a violent nature.


(Emphasis added.)  Under the reasonable-expectations doctrine, the insurer has the burden “to communicate coverage and exclusions of policies accurately and clearly” to its insured.  Atwater Creamery Co. v. W. Nat’l Mut. Ins. Co., 366 N.W.2d 271, 278 (Minn. 1985).  The “expectations of coverage by the insured [must] be reasonable under the circumstances.”  Id.  In determining the reasonable expectations, the court may consider whether the contract is ambiguous, whether the insurer advised the insured of “important, but obscure, conditions or exclusions,” and whether the public was generally aware of the provision at issue.  Id.

            The district court ruled that even if there were sufficient evidence of a criminal act, “the exclusion would not apply unless bodily injury was a reasonably expected result of the act.”  The court concluded that because the injury to Winch was not a reasonably expected result of Fellin’s actions, the criminal-act exclusion did not apply as a matter of law.  The court relied on Tower Ins. Co. v. Judge, 840 F. Supp. 679 (D. Minn. 1993).  In Tower, the insureds applied electrical shocks to their intoxicated, sleeping companion, in a misguided attempt to “shock” him awake; instead, this led to his death by electrocution.  Id. at 682-83.  After they were sued, their insurer sought to apply the criminal-act exclusion.  Tower held:

                        It is objectively reasonable to expect that the criminal act exclusion would not apply unless bodily injury was a reasonably expected result of the act.


Id. at 692 (emphasis added).

The district court here held that a spinal injury was not a reasonably expected result of the act.  But this seems to require a determination that the insured needed to expect the precise result of his act before the exclusion will apply.  We find this to be error, because we interpret the law to mean that the insured need only expect some injury, not necessarily the precise injury that occurred.  Certainly, it is reasonable that some injury could have occurred from Fellin’s actions.  Otherwise, the exclusion would never apply.

            The next question is whether there is a genuine issue of material fact as to whether respondent insured caused the alleged injury “in the course of or in the furtherance of any crime or offense of a violent nature.”  We agree with the district court’s conclusion that fact issues existed as to whether Fellin committed an assault.  Further, there are fact questions as to whether the act was “of a violent nature” as required under the policy.  Consequently, summary judgment was not appropriate.


            The second issue is whether the delay by Fellin, the insured, in notifying appellant insurer of the claim prejudiced appellant so that it is not required to cover the claim.  The district court ruled that the insurer failed to show prejudice.

            Under the policy, if a person makes a claim against the insured, the insured has, in relevant part, the following duties:

                                    a.         notify us or our agent as soon as possible.  * * *


                                    b.         send us promptly any legal papers relating to any claim or suit;


                                    c.         cooperate with us and assist us in any matter relating to a claim or suit[.]


            An insured is required to give prompt notice of a claim to allow the insurer the opportunity to investigate promptly and to defend against false claims.  Reliance Ins. Co. v. St. Paul Ins. Cos., 307 Minn. 338, 341, 239 N.W.2d 922, 924 (1976).  But the failure to give prompt notice does not allow the insurer to deny coverage unless the insurer can show actual prejudice from the delay.  Id. at 343, 239 N.W.2d at 925.  “The dispositive factor is not how much time elapses prior to the tender of defense; it is what happens during that time.”  Hooper v. Zurich Am. Ins. Co., 552 N.W.2d 31, 36 (Minn. App. 1996) (citations omitted), review denied (Minn. Sept. 20, 1996).

            In addressing the issue, this court has closely examined the claims to determine whether any prejudice is evident.  See Dairyland Ins. Co. v. Clementson, 431 N.W.2d 895, 898 (Minn. App. 1988) (reviewing cases analyzing fact situations to assess whether actual prejudice was shown).

            For example, in an action for damages arising from negligent installation of an incorrectly sized tire, the insurer claimed that it was prejudiced by a delay in notification “because it was unable to conduct a meaningful investigation of the accident and [the plaintiff’s] claimed injuries.”  Northstar Mut. Ins. Co. v. Midwest Family Mut. Ins. Co., 634 N.W.2d 216, 220-21 (Minn. App. 2001), review denied (Minn. Dec. 19, 2001).  This court rejected the claim because the cause of the accident was uncomplicated, there was no suggestion that anyone other than the tire installer was negligent, the insurer had not sought a medical examination of the plaintiff, and there was no evidence his injuries were not serious, or that the delay had prejudiced its ability to conduct an investigation.  Id. at 221.

            In contrast, prejudice due to late notice was found when the insured, a construction company, did not notify its insurer that it had been sued by an injured worker until some seven years had passed.  Noon Realty, Inc. v. Aetna Ins. Co., 387 N.W.2d 465, 467-68 (Minn. App. 1986).  By that time, the other construction workers, who apparently could have been witnesses, no longer worked for the insured and the plans and specifications for the building that was the site of the injury no longer existed, impairing the insurer’s ability to investigate and defend.  Id. at 467.

            In this case, appellant contends that it was prejudiced by the almost two-and-a-half year delay because it was unable to conduct a meaningful investigation of the occurrence and the claimed injuries.  First, it cites the absence of the only witness to the incident, Rebecca Adams, who cannot be found.[1]  Although respondent Winch’s counsel did transcribe an interview it had with the missing witness on April 26, 1999, it has since lost the audiotape.  Next, appellant claims Winch’s memory of the event has faded.  While the mere passage of time will not constitute prejudice, the unavailability of the only witness to the event in which crucial facts are in dispute presents at least an issue of fact as to whether the insurer was prejudiced by the delay.

            The district court’s summary judgment on the issues of the criminal-acts exclusion and the delay provision is reversed and remanded because genuine issues of material fact exist.

            Reversed and remanded.


[1] Appellant submitted an affidavit with attachments explaining its unsuccessful efforts to locate this witness.