This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2004).






TMC Stores, Inc.,


Federated Mutual Insurance Co.,


Filed June 7, 2005


Minge, Judge


Hennepin County District Court

File No. CT 04-002092



Christopher Hoffer, Paul V. Kieffer, Soucie & Bolt, 100 Anoka Office Center, 2150 Third Avenue North, Anoka, MN 55303 (for appellant)


Leatha G. Wolter, Joel T. Wiegert, Meagher & Geer, P.L.L.P., 33 South Sixth Street, Suite 4200, Minneapolis, MN 55402 (for respondent)


            Considered and decided by Minge, Presiding Judge; Dietzen, Judge; and Poritsky, Judge.*



U N P U B L I S H E D   O P I N I O N


MINGE, Judge


            Appellant challenges the denial of its motion to amend its complaint to add a claim that an insurance policy should be reformed due to a mutual mistake.  Appellant further challenges the entry of summary judgment dismissing its claim for coverage for business interruption insurance.  We affirm.



Appellant TMC Stores, Inc. (TMC) owned and operated a garden and pet retail store located at 4719 42nd Avenue in Robbinsdale.  The property included parking space for seven vehicles.  To provide additional parking, TMC subleased unplatted, adjacent property, which was identified by a metes and bounds legal description and which the county tax records identified as 4125 Railroad Avenue.  TMC also used the adjacent property for display and storage.  Although TMC’s sublease of the 4125 Railroad Avenue expired in July 2000, TMC continued to use that property with the owner’s consent, subject to a construction project. 

In 1996, respondent Federated Mutual Insurance Company (Federated) issued TMC a business owner’s commercial insurance policy.  TMC annually renewed this policy through 2001.  The policy provided for property, liability, and business income coverage.  The policy listed only 4719 42nd Avenue as the covered business premises and did not refer to the adjacent parking area’s legal description or its street address of 4125 Railroad Avenue.  Although TMC was apparently aware the parking area was a separate parcel, Federated was not aware that it was a separate parcel or had any street address, let alone a separate address.

Robbinsdale Economic Development Authority (REDA) received the right to incorporate part of the property at 4125 Railroad Avenue into a development project.  Construction began in September 2000.  Although the construction disrupted TMC’s use of that property, portions of that property were usually available for parking.  In an attempt to minimize the affects of construction, the REDA added an entrance for access to the TMC store from another street, provided banners advertising that the store was open during construction, arranged alternative, but less convenient, parking, and provided parking lot lights.  Although business volume was reduced, the TMC store remained open throughout the construction.  By June 2001, construction at the 4125 Railroad Avenue site was completed, and TMC was able to resume regular usage of that property for parking.

            In February 2004, TMC initiated this action seeking a declaration that Federated had a duty to indemnify TMC for alleged losses due to business interruption caused by the construction under the business income and civil authority portions of the insurance policy.  In June 2004, Federated filed a motion for summary judgment, arguing that the policy does not provide coverage for the claimed loss.  TMC moved for leave to amend its complaint to add claims of reformation and negligence, arguing that it intended to include the parking lot as part of the insured premises, that Federated’s insurance agent also intended to cover this parking lot property in the policy, that both parties were operating under a mutual mistake of fact, and that the insurance policy should be reformed so as to include the parking lot at 4125 Railroad Avenue and to provide proper coverage for the loss.  The insurance agent stated that he was unaware of the different addresses and that he did not recall TMC specifically requesting that the adjacent parking lot be covered in the policy.  The district court denied TMC’s motion, granted Federated’s motion for summary judgment, and dismissed the case.  TMC appeals the denial of its motion to add a claim for reformation and the dismissal of its claims for coverage at summary judgment.




            The first issue is whether the district court abused its discretion by denying TMC’s motion to add a claim for reformation.  The district court has broad discretion to grant or deny leave to amend a complaint, and its ruling will not be disturbed absent an abuse of discretion.  Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).  Whether the district court has abused its discretion in ruling on a motion to amend may turn on whether it was correct in an underlying ruling.  Id. at 761-62.  If a party attempts to amend its complaint after significant discovery, the district court may properly deny the motion when the additional claim could not survive summary judgment.  See Bebo v. Delander, 632 N.W.2d 732, 741 (Minn. App. 2001), review denied (Minn. Oct. 16, 2001).

            The courts will reform an insurance policy if the claimant can prove that: “(1) there was a valid agreement between the parties expressing their real intentions; (2) the written instrument failed to express the real intentions of the parties; and (3) this failure was due to a mutual mistake of the parties, or a unilateral mistake accompanied by fraud or inequitable conduct by the other party.”  Leamington Co. v. Nonprofits’ Ins. Ass’n, 615 N.W.2d 349, 354 (Minn. 2000) (quoting Nichols v. Shelard Nat’l Bank, 294 N.W.2d 730, 734 (Minn. 1980)).  A mutual mistake occurs when “both parties agree as to the [intended] content of the document but that somehow through a scrivener’s error the document does not reflect that agreement.”  Nichols, 294 N.W.2d at 734.  The facts necessary to permit reformation of an insurance policy must be established by evidence that is “clear and consistent, unequivocal and convincing.”  Id. (quotation omitted).  According to the Minnesota Supreme Court, “[t]he purpose of reformation is not to create a new policy; rather, it is to bring the written instrument into conformity with the intent of the contracting parties.”  Id. 

            The three parts of the Leamington test are all troublesome.  It appears that both parties were focused on insuring the building.  Other than the intent to insure the building, the “real” intent of the parties is elusive.  Although TMC was aware that there were two parcels, we only have an after-the-fact claim by TMC that it intended to purchase insurance for the vacant, leased parcel at 4125 Railroad Avenue.  The lack of confirming evidence is noteworthy.  Federated’s agent had a less well-developed concept of the agreement.  He apparently thought all of the land used by TMC was one parcel.  He did not realize a vacant portion of it was separately owned and leased.  TMC never communicated the fact that there were two parcels to the insurance agent.  There is no clear and convincing evidence that the “real” intention was to insure the 4125 Railroad Avenue property, that the insurance policy failed to express the real intent, that such failure was a mutual mistake, or that there was a scrivener’s error.  At most, after TMC’s claim is denied, it identifies what it now asserts was its real intention.  Although TMC clearly expected coverage, that is a claim of unilateral mistake.  Because neither party claims that there is a unilateral mistake accompanied by fraud or inequitable conduct, we do not address that situation.  Thus, we conclude that the district court did not abuse its discretion in finding no evidence of mutual mistake and denying TMC’s motion to amend its complaint to add a claim for reformation.


The next issue is whether the district court erred in granting summary judgment.  “On appeal from summary judgment, we consider (1) whether there are any genuine issues of material fact for trial and (2) whether the lower courts erred in their application of the law.”  N. States Power Co. v. Minn. Metro. Council, 684 N.W.2d 485, 491 (Minn. 2004).  We consider the evidence in the light most favorable to the nonmoving party.  Gradjelick v. Hance, 646 N.W.2d 225, 231 (Minn. 2002).  Interpretation of an insurance policy’s language is subject to de novo review.  Jorgensen v. Knutson, 662 N.W.2d 893, 897 (Minn. 2003). 

A.  Business Income

            TMC argues that the district court erred in finding that the business income section of the insurance policy does not cover its loss.  If a policy is unambiguous, the court must give the language its ordinary and usual meaning and not redraft the contract.  Simon v. Milwaukee Auto. Mut. Ins. Co., 262 Minn. 378, 385, 115 N.W.2d 40, 45 (1962).  The policy should be interpreted “according to what a reasonable person in the position of the insured would have understood.”  Canadian Universal Ins. Co. v. Fire Watch, Inc., 258 N.W.2d 570, 572 (Minn. 1977).

The relevant portions of the insurance policy state:

(1) Business Income

We will pay for the actual loss of Business Income you sustain due to the necessary suspension of your “operations” during the “period of restoration.”  The suspension must be caused by direct physical loss of or damage to property at the described premises, including personal property in the open (or in a vehicle) within 100 feet, caused by or resulting from any Covered Cause of Loss. 


. . . .


2.  “Operations” means your business activities occurring at the described premises


(Emphasis added).  The “described premises” is defined as 4719 42nd Avenue in Robbinsdale.  According to the policy, a claimant must have a direct physical loss or damage to the described premises that results in necessary suspension of operations.

It is undisputed that the adjacent leased property had a separate address and legal description and that the adjacent property is not identified in the insurance policy.  Because the language of the insurance policy section covering business income only lists 4719 42nd Avenue as the described premises, this provision of the policy unambiguously covers damage to 4719 42nd Avenue and does not include damage to or loss of use of the adjacent parking lot located at 4125 Railroad Avenue.

B.  Civil Authority


In the alternative, TMC argues that it is entitled to coverage under the civil authority section of the insurance policy.  The pertinent language in the policy states:

i. Civil Authority

We will pay for the actual loss of Business Income you sustain and necessary Extra Expense caused by action of civil authority that prohibits access to the described premises due to direct physical loss of or damage to property, other than at the described premises, caused by or resulting from any Covered Cause of Loss.


TMC and Federated agree that TMC’s store and seven-stall parking lot were not damaged but rather the construction required tearing up the adjoining parking lot used by TMC at 4125 Railroad Avenue.  Consequently, the issue is whether this construction activity prohibited access to TMC’s store. 

TMC argues that this is an issue of fact, which should be submitted to a jury.  TMC further claims that the phrase “prohibits access” was not defined in the policy and therefore requires a factual determination of whether its customers’ access to the store was prohibited by this construction.  Other jurisdictions that have examined this access issue have found that, generally, coverage under the civil authority section is only available when access is completely prohibited.  See, e.g., Abner, Herrman & Brock, Inc. v. Great N. Ins. Co., 308 F. Supp. 2d 331, 336-37 (S.D.N.Y. 2004) (finding civil authority provision applies only when access to the premises is completely denied); Dixson Produce, LLC v. Nat’l Fire Ins. Co. of Hartford, 99 P.3d 725, 729 (Okla. Ct. App. 2004) (holding that even though travel to the business was inconvenient, unless access was prohibited, the business could not recover under civil authority policy provision).  It is undisputed that TMC’s store remained open throughout the construction and that customers were able to enter the store even though ease of access was diminished.  Even if more difficult or less convenient access discouraged customers from patronizing TMC’s store, this was not a prohibition of access.  If the record demonstrated a virtual economic shutdown of TMC’s business, this would be a more difficult case.  Because access remained and the level of business was not dramatically decreased, the civil authority section of the insurance policy is inapplicable and the district court did not err in granting summary judgment.


* Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.