This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
STATE OF MINNESOTA
IN COURT OF APPEALS
Liberty Mutual Insurance Company,
Filed June 7, 2005
Reversed and remanded
Hennepin County District Court
File No. PI 02-16349
Philip K. Jacobson, Kelly & Jacobson, 220 South 6th Street, Suite 215, Minneapolis, MN 55402 (for appellant)
Shari L. Lowden, Law Office of Susan K.H. Conley, 220 South Court International, 2550 University Avenue West, St. Paul, MN 55114 (for respondent)
Considered and decided by Halbrooks, Presiding Judge; Lansing, Judge; and Minge, Judge.
Appellant challenges the district court’s grant of summary judgment in favor of respondent insurance company, arguing that his failure to provide a Schmidt/Clothier notice did not prejudice respondent. Because there is no evidence that the district court considered the issue of prejudice, we reverse and remand for further proceedings.
Appellant Abraha Kahsay challenges the district court’s grant of summary judgment in favor of respondent underinsured motorist (UIM) carrier Liberty Mutual Insurance. The material facts in this case are undisputed. In August 1996, appellant suffered back injuries in an automobile accident caused by Matilda Robinson, who was driving a vehicle owned by her mother, Virginia Robinson. Appellant subsequently settled his bodily-injury claim against the Robinsons and their insurer. Respondent, appellant’s insurer, was notified of the accident and paid various no-fault benefits, but was not sent a Schmidt/Clothier letter or otherwise notified of appellant’s settlement with the Robinsons.
After the settlement, appellant began to suffer additional back problems ostensibly related to the 1996 accident. In January 2002, he underwent surgery on his lower back. Appellant then filed a claim for UIM benefits, which respondent denied. Appellant subsequently filed suit, alleging that respondent breached his insurance policy by refusing to pay benefits.
Respondent moved for summary judgment and appellant opposed the motion, arguing that respondent had suffered no prejudice as a result of appellant’s failure to supply respondent with a Schmidt/Clothier notice. The district court granted respondent’s summary-judgment motion. This appeal follows.
D E C I S I O N
“On an appeal
from summary judgment, we ask two questions: (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,
argue that this case presents a question of law that is to be reviewed de
novo. But whether a presumption has been
rebutted is generally a question of fact.
See, e.g., Feges v. Perkins Rests.,
Inc., 483 N.W.2d 701, 711 (
settling any claims with tortfeasors, potential claimants of UIM benefits are
required to provide their UIM carriers with a 30-day written notice of
tentative settlement agreements. Schmidt v. Clothier, 338 N.W.2d 256, 263
Absent the required 30-day written notice, release of the tortfeasor shall be deemed prejudicial to the underinsurer. That presumption of prejudice shall be rebuttable, but the burden of demonstrating by a preponderance of the evidence the absence of prejudice shall be borne by the insured. An insured’s failure to sustain that burden of proving a lack of prejudice to the insurer shall result in forfeiture.
It is undisputed
that appellant did not provide respondent with a proper Schmidt/Clothier notice. The
only question before this court is whether appellant rebutted the presumption
that respondent suffered prejudice and thus created a genuine issue of material
fact for trial. Appellant contends that
he rebutted this presumption by submitting certain evidence to the district
court. But the district court did not
address the issue of whether appellant adequately rebutted the presumption of
prejudice. Instead, the district court
cited Klang v. Am. Family Ins. Group,
398 N.W.2d 49, 52 (
But Klang predates the supreme court’s decision in Baumann, which provides that UIM coverage is barred by failure to provide the insurer with a Schmidt/Clothier notice only if the insured fails to rebut the presumption of prejudice by a preponderance of the evidence. See Baumann, 459 N.W.2d at 927 (providing that the “presumption of prejudice shall be rebuttable”) (emphasis added). Under Klang, the failure to provide a Schmidt/Clothier notice was automatically fatal to the insured’s UIM claim; under Baumann, such a failure is fatal only if the insured is unable to demonstrate that the insurer was not prejudiced by the failure. Compare Klang, 398 N.W.2d at 52, with Baumann, 459 N.W. 2d at 927.
At oral argument,
appellant suggested that he bears the burden only of demonstrating that
respondent suffered no actual
prejudice. We disagree. In Behrens,
we noted that “Baumann did not
indicate how much evidence is required to rebut the presumption of
prejudice.” Behrens, 520 N.W.2d at 768.
Appellant cites Fladager v. Farm
Bureau Mut. Ins. Co., 414 N.W.2d 551 (
Here, there is no evidence that the district court considered whether appellant’s proffered evidence was sufficient to rebut the presumption of prejudice to respondent. Because the absence of findings or a conclusion regarding whether appellant presented evidence adequate to rebut the presumption of prejudice precludes reasonable review, we reverse and remand for additional findings on the issue of prejudice.
Reversed and remanded.
 Schmidt v. Clothier, 338 N.W.2d 256 (
 According to appellant, at the time of the settlement, an MRI showed a bulging disk in appellant’s back, but he demonstrated few other symptoms and was “not deemed a surgical candidate.”
Appellant also cites Dairyland Ins. Co.
v. Clementson, 431 N.W.2d 895 (
 We also note, however, that Fladager predates Baumann.