This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2004).
IN COURT OF APPEALS
Premier Security, Inc.,
United National Insurance Company, garnishee,
Filed July 5, 2005
Robert H. Schumacher, Judge
Steven E. Tomsche, Jeanette P. Cogelow, Tomsche, Sonnesyn & Tomsche, P.A., 610 Ottawa Avenue North, Minneapolis, MN 55422 (for appellant)
U N P U B L I S H E D O P I N I O N
ROBERT H. SCHUMACHER, Judge
Appellant United National Insurance Company challenges the grant of summary judgment in favor of respondent Ashley-Rose Marie Borchardt. We affirm.
began working for Premier Security, Inc. on or about November 1, 2001. On December 5, 2001, she was assigned to work
Premier tendered its defense to its insurer United, which denied coverage and refused to defend or participate. Premeir and Borchardt then engaged in discovery and prepared for trial. Three days before trial, Borchardt and Premier entered into a Miller-Shugart settlement in which Premier admitted liability. The stipulation further provided that Borchardt's damages were $75,000, that Premier did not have the ability to pay more than $10,000, and that Premier stipulated to a judgment in favor of Borchardt in the amount of $65,000, to be recovered under Premier's policy with United. Judgment was entered accordingly.
Borchardt was granted leave by the court to file a supplemental garnishment action against United to recover on the judgment. Borchardt and United filed cross-motions for summary judgment. The district court granted summary judgment in favor of Borchardt.
1. An appellate court's review of summary
judgment "is limited to determining whether there are any genuine issues
of material fact and whether the district court erred in its application of
law." Jorgensen v. Knutson, 662 N.W.2d 893, 897 (
plaintiff sues an insured defendant, but the defendant's insurer disputes
liability, the plaintiff and defendant may nonetheless arrive at a settlement
that relieves the defendant of personal liability. Miller
v. Shugart, 316 N.W.2d 729, 733-34 (
case, Borchardt sought a determination of coverage by bringing a garnishment
action against the insurer. See Peterson v.
principles of contract interpretation apply to insurance policies." Lobeck
v. State Farm Mut. Auto. Ins. Co., 582 N.W.2d 246, 249 (
The policy in question provides coverage for bodily injury and property damage, subject to several relevant exclusions. First, the employer's liability exclusion precludes coverage for bodily injury to an employee of the insured. Borchardt agrees that the employer's liability exclusion, standing alone, would exclude coverage. Second, there is an endorsement to the policy that excludes coverage for employment-related practices, such as coercion, demotion, discipline, defamation, or harassment; there is no reference in this exclusion to acts of assault and battery. Finally, the policy has an endorsement for assault and battery coverage, which states at the top of the page: "THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY." The endorsement then provides: "It is agreed that this policy provides coverage to the named insured only, for acts of assault and battery alleged to have been committed by an employee of the named insured for which the named insured is legally responsible."
The district court ruled that the assault and battery endorsement in relation to the policy language created an ambiguity. Giving meaning to the endorsement and strictly construing the endorsement against the insured, it determined there was coverage.
On appeal, both parties initially argue that each should prevail under the plain language of the policy, rather than that the language is ambiguous. United argues that the contract must be read as a whole. Consequently, it contends that the assault and battery endorsement, read in light of the employer's liability exclusion and the employment-related practices exclusion, does not cover Borchardt's claim because she was an employee. It cites several foreign jurisdiction cases in support of its argument.
is true that the policy must be considered as a whole, "where provisions
in the body of the policy conflict with an endorsement or rider, the provisions
of the endorsement governs." Bobich, 258
2. United argues that even if this court concludes that the employer's liability exclusion and the employment-related practice exclusion endorsement do not apply, summary judgment is inappropriate because Borchardt did not establish that the assault and battery endorsement applies to the facts of this case. But United declined to defend or indemnify Premier in the tort action, and judgment was entered against Premier pursuant to the Miller-Shugart settlement. An insurer who fails to defend or indemnify may challenge the Miller-Shugart settlement only as being unreasonable, imprudent, or the product of fraud and collusion. See Miller, 316 N.W.2d at 734-35. United does not raise any of these grounds and cannot challenge the judgment now.