This opinion will be unpublished and

may not be cited except as provided by

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







Robert J. Carye, et al.





Illinois Farmers Insurance Company, an Illinois Corporation,



A&M Disaster Services, Inc.,



Filed December 19, 2006

Affirmed in part, reversed in part

Ross, Judge

Ramsey County District Court

File No. CX-04-940


Richard I. Diamond, Jesse H. Kibort, Richard I. Diamond, P.A., 601 Carlson Parkway, Suite 1050, Minnetonka, MN 55305 (for appellants)


J. Mark Catron, Colleen O. Kaufenberg, Hansen, Dordell, Bradt, Odlaug & Bradt, PLLP, 3900 Northwoods Drive, Suite 250, St. Paul, MN 55112 (for respondent Illinois Farmers Insurance Company)


Robert L. McCollum, McCollum, Crowley, Moschet & Miller, Ltd., 7900 Xerxes Avenue South, 700 Wells Fargo Plaza, Minneapolis, MN 55431 (for respondent A&M Disaster Services, Inc.)



            Considered and decided by Ross, Presiding Judge; Willis, Judge; and Dietzen, Judge.


U N P U B L I S H E D   O P I N I O N


ROSS, Judge


This case concerns an insurance-coverage dispute arising out of cleaning that occurred after Robert and Linda Carye’s home sustained water damage.  On appeal from summary judgment, the Caryes argue that genuine issues of material fact exist and that the district court erred by concluding that their homeowners’ insurance policy with Illinois Farmers Insurance Company was void because of misrepresentations Robert Carye made, that they could not prove A&M Disaster Services, Inc., caused them damages, and that A&M was not an agent of Illinois Farmers.  Because genuine issues of material fact exist concerning whether Robert Carye made the alleged misrepresentations to Illinois Farmers and whether Illinois Farmers detrimentally relied on any statements that he made, we reverse the district court’s grant of summary judgment in favor of Illinois Farmers.  But we affirm the entry of summary judgment in favor of A&M because the record lacks evidence that A&M caused the Caryes’ alleged damages.


In June 2000, Robert and Linda Carye purchased a home in Maplewood, but they did not move into the home immediately.  About one week after they purchased the home, a storm damaged its exterior.  The basement later sustained damage from several sewer backups.  The Caryes finally moved into the home in October 2000, although they later described it as “uninhabitable” when they began inhabiting it.  The Caryes filed claims with their insurer, USAA Casualty Insurance Co., for the losses that they incurred during the summer of 2000.  USAA did not pay the full amount of the claimed loss and later cancelled the Caryes’ insurance policy.  In July 2002, the Caryes filed a complaint against USAA alleging a breach of their insurance contract, but their complaint was dismissed by summary judgment because their insurance claim was untimely.  Carye v. USAA Casualty, No. A03-1369 (Minn. App. Mar. 23, 2004).

In September 2000, the Caryes obtained a new homeowners’ insurance policy from Illinois Farmers Insurance Company for one year of coverage beginning December 27, 2000.  The Caryes assert that because they were performing significant renovations to their home, they stored many of their possessions in boxes stacked in their basement.  In June 2001, the Caryes submitted a claim for damage to their roof.  Illinois Farmers mistakenly paid them twice for the loss, and the Caryes cashed both checks.  The Caryes allege that they returned home from an out-of-town trip in August and discovered that their water softener had leaked, leaving several inches of standing water in their basement.  The Caryes also assert that about one week later, their basement toilet backed up four times in four days, causing more fresh water to contact some of the storage boxes.

In September 2001, the Caryes contracted with a licensed public adjuster, Michael Pakkala, to assist in preparing their insurance claim for the August damage.  Although the parties dispute who retained A&M Disaster Services, Inc., the company was hired to remedy the damage in the Caryes’ basement.  A “pack out” was scheduled for early October 2001, when A&M would remove, clean, and inventory the salvageable items and then inventory and dispose of the unsalvageable items.  The pack out did not occur as planned.  A&M arrived at the Caryes with a truck to remove items, but A&M asserts that it was able to remove only a few items of clothing because Linda Carye refused to let them remove any other items from the home.  In December 2001, the Caryes removed all of the items from their basement and placed them in a storage container in their backyard.

In January 2004, the Caryes filed a complaint in district court seeking a declaratory judgment against Illinois Farmers concerning coverage.  Their complaint also alleges breach of contract against Illinois Farmers and negligence against A&M. Illinois Farmers filed a counterclaim alleging that the company relied on fraudulent misrepresentations in issuing the Caryes’ policy and seeking reimbursement for the mistaken double payment to the Caryes for their roof repair.  In January 2005, Illinois Farmers and A&M each moved for summary judgment.  The district court denied the summary-judgment motions.  Severalmonths later, the Caryes moved for partial summary judgment and Illinois Farmers and A&M each filed a motion for reconsideration.  The district court granted the motions for reconsideration.  It denied the Caryes’ summary-judgment motion and entered summary judgment for Illinois Farmers and A&M, holding that the Caryes made misrepresentations that voided their Illinois Farmers’ policy, that the record demonstrated that A&M was not an agent of Illinois Farmers, and that the Caryes failed to present any evidence demonstrating that A&M caused them damage.  The Caryes appeal, arguing that genuine issues of material fact preclude summary judgment.


On appeal from summary judgment, this court reviews the record in the light most favorable to the nonmoving party to determine whether any genuine issues of material fact exist.  DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn. 1997); State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990).  The district court may not weigh evidence on a motion for summary judgment, but the court “is not required to ignore its conclusion that a particular piece of evidence may have no probative value, such that reasonable persons could not draw different conclusions from the evidence presented.”  DLH, 566 N.W.2d at 70.  We review whether the district court erred in its application of the law to the undisputed material facts and to the disputed facts as construed in favor of the nonmoving party.  Cooper, 460 N.W.2d at 4.


We first address the district court’s determination that Robert Carye made material misrepresentations relied upon by Illinois Farmers, triggering exclusion from insurance coverage.  An insurer bears the burden of proving that an insurance-policy exclusion applies.  Nat’l Union Fire Ins. Co. v. Evenson, 439 N.W.2d 394, 397 (Minn. App. 1989), review denied (Minn. July 12, 1989).  Exclusions are interpreted strictly against the insurer and any ambiguity is resolved in favor of the insured.  Id.; Columbia Heights Motors, Inc. v. Allstate Ins. Co., 275 N.W.2d 32, 36 (Minn. 1979).  The Caryes’ insurance policy with Illinois Farmers states that the policy is void if, before or after a loss, the insured “willfully and with intent to commit fraud concealed or misrepresented any material fact or circumstance relating to this insurance.”

Fraud requires evidence of a false representation related to a past or present material fact that is susceptible to knowledge and that the person representing the fact knows is false or asserts as his own knowledge.  Western Contracting Corp. v. Dow Chem. Co., 664 F.2d 1097, 1100-01 (8th Cir. 1981); Nat’l Union Fire Ins. Co., 439 N.W.2d at 398 (applying Western Contracting standard).   The representer must intend and actually induce another person to act in reliance on the representation and cause damages.  Western Contracting, 664 N.W.2d at 1100-01; Nat’l Union Fire Ins. Co., 439 N.W.2d at 398.

In its motion for summary judgment, Illinois Farmers alleged four misrepresentations by Robert Carye when he applied for his insurance policy: his stated occupation; the number of previous homeowners’ insurance losses or claims he had filed; the reason USAA was canceling his policy; and the extent of the renovations to his home.  The district court concluded that the undisputed facts demonstrate that Robert Carye knowingly misrepresented the number of previous homeowners’ insurance claims that he had filed, Illinois Farmers relied on the misrepresentation to its detriment, and therefore the policy was void.

But we find that genuine issues of material fact prevent summary judgment.  When Robert Carye called Illinois Farmers in August 2000 to obtain homeowners’ insurance, he spoke with Kimberly Schroeder, a customer-service representative for an Illinois Farmers’ agency.  In a deposition, Schroeder testified that she asked Robert Carye questions and filled out a document entitled “Homeowners Fact Sheet” based on his responses.  The fact sheet declares that Robert Carye is an attorney; that he had made only one previous homeowners’ claim, in July 2000; that his current insurer had cancelled his policy for no reason; and that he and his wife were rewiring the home and planned to finish by September 2000.  Robert Carye is not an attorney, and the record indicates that the Caryes may have made several previous homeowners’ claims.  Illinois Farmers later approved the policy.  Robert Carye denies that Schroeder’s fact sheet accurately reflects his statements.  He denies, for example, that Schroeder asked him how many previous homeowners’ claims he had made, and he asserts that he told her the history and condition of his home.  Because the disputed substance of the conversation between Schroeder and Robert Carye is material to whether he made misrepresentations in applying for insurance coverage, summary judgment is not appropriate.

A genuine issue of material fact also exists regarding Illinois Farmers’ reliance on any of the alleged misrepresentations.  Even if Robert Carye gave fraudulent information to Schroeder, Illinois Farmers did not identify any evidence demonstrating that it relied on the information on the fact sheet and that it would not have issued the policy had it had accurate information, for example, about the Caryes’ previous homeowners’ claims.  This lack of evidence establishing reliance also prevents summary judgment.

We note in addition that the district court did not address Illinois Farmers’ claim for reimbursement for the overpayment to the Caryes for their June 2001 claim.  Because this issue was disposed of by the district court’s conclusion that the insurance policy was void, the issue is revived by our reversal of summary judgment.


We next consider the Caryes’ negligence claim against A&M.  To establish negligence, a plaintiff must demonstrate that a duty of care existed, that the defendant breached this duty, and that the breach was the proximate cause of an injury to the plaintiff.  State Farm Fire & Cas. v. Aquila Inc., 718 N.W.2d 879,887 (Minn. 2006).  Summary judgment is appropriate when a party cannot prove an essential element of a claim.  Lubbers v. Anderson,539 N.W.2d 398, 401 (Minn. 1995).  The district court entered summary judgment based on its conclusion that demonstrating causation of mold contamination requires expert testimony, and the Caryes’ experts did not present evidence that could support a finding of causation.  The Caryes argue that the district court erroneously applied a medical-malpractice standard to their claim.  Although the Caryes do not elaborate further, we interpret their argument to challenge the district court’s conclusion that the claim required expert testimony and its finding that, even viewing the evidence in the light most favorable to the Caryes, their retained expert could not establish causation. The record supports the district court’s determinations.

When scientific or specialized knowledge will assist the trier of fact to understand the evidence, an expert witness may testify.  Minn. R. Evid. 702.  The Caryes alleged that A&M was negligent by failing to remedy the damage to their home and exacerbating the mold contamination by cross-contaminating salvageable items with unsalvageable items.  Robert Carye acknowledged that he had no expertise regarding mold or its causes.  Because determining the cause of mold contamination requires some degree of scientific analysis and the Caryes’ claim relates to damage that allegedly occurred several months after the events that triggered flooding in their basement, we find no error in the district court’s conclusion that expert testimony was necessary to establish the cause of the contamination.

The record also supports the district court’s conclusion that the Caryes did not provide sufficient evidence to permit a fact-finder to determine that A&M caused them damage.  The Caryes submitted a report from the Institute for Environmental Assessment (IEA) and a report and deposition testimony by Gregory Olson, a senior industrial hygienist.  The IEA report stated that a microbial sampling was performed at the Caryes’ home in December 2001 and revealed a level of culturable airborne fungi five times greater than the level found outdoors.  The report suggested a residual presence from the sewer backup.  But this report was based on the erroneous belief that the August 2001 toilet backups involved sewage.  Linda Carye testified that the 2001 incidents did not involve any sewage, but noted that sewage infiltrated their duct work in 2000.  In a deposition in his litigation against USAA, Robert Carye testified at length about the sewage damage sustained in 2000, noting that “[t]here was literally fecal matter inside the heating system, inside the water heater.  It was stuck to everything inside of the washer [and] dryer.”  The IEA report does not indicate any awareness of the sewage backup of 2000, or of Robert Carye’s testimony about it.

The Caryes’ evidence of causation is further compromised by the date of the testing.  The testing occurred in December 2001, almost four months after the water softener leaked and the toilet backed up.  The Caryes chose not to remove or inventory the boxes from their basement until December, even though Robert Carye acknowledged, “I know anything wet is probably not great to leave around.”  Even accepting Robert Carye’s explanation that they did not move items after the flooding because Illinois Farmers instructed them not to, the liability of following this instruction would not fall on A&M.

Olson testified that he was unaware of losses that the Caryes claimed before 2000 and about later renovations, and he testified that knowing the full history of the home could affect his opinion.  He also stated that it would be impossible to tell from a mold sample whether it was caused by events in 2000 or 2001.  He noted that “boxes, regardless of their contents, are obviously materials that are very conducive or supportive for fungal growth.”  He expressed no opinion on the cause of the Caryes’ mold.

Even if expert testimony is not required, the Caryes’ non-expert evidence cannot establish causation.  They waited until December 2001 to remove items from their basement and then placed all of the items in the same storage facility.  Pakkala testified that there was no reason that the Caryes could not have performed the pack out earlier or hired another company to complete the task.  He testified that he did not hire another company because “Mr. Carye didn’t want anybody. . . .  [He] was intent on . . . showing, at least in my mind, that all this stuff was contaminated with mold spore.”  RichardMartin, the owner of A&M, testified that even the originally scheduled pack-out date¾about seven weeks after the flooding¾was “very unusual” because mold would have already formed in the basement by that time.  A&M was not retained until late September and the delay between the water damage and its involvement cannot be attributed to the company.

Finally, the Caryes’ evidence is insufficient to establish causation because they cannot demonstrate or distinguish the extent of damages to their home and property before and after A&M’s services.  Pakkala observed that he did not see any damage to the Caryes’ basement other than molded clothes.  Robert Carye testified that he did not know how many boxes were contaminated in August 2001.  With no ascertainable damage to property before A&M arrived, the delay in hiring A&M, and the Caryes’ later decisions to let their property sit in the basement for two more months and then to move all items¾some of which were allegedly contaminated¾to the same location, the district court did not err by concluding that the Caryes could not establish that A&M caused their alleged damages.  Because we conclude that the district court correctly entered summary judgment in favor of A&M and that the Caryes cannot establish liability, we do not reach the issue of whether A&M was Illinois Farmers’ agent.

Affirmed in part, reversed in part.