This opinion will be unpublished and

may not be cited except as provided by

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






Metropolitan Property & Casualty Insurance Company,

as successor-in-interest to Economy Premiere Assurance Company,





Kenneth Koehnen, et al,



William Roger Wetterstrom, et al.,



Filed December 19, 2006


Dietzen, Judge


Washington County District Court

File No. C7-05-4971


William L. Davidson, Timothy J. O’Connor, Paulette Steffes Sarp, Lind, Jensen, Sullivan & Peterson, P.A., 150 South Fifth Street, Suite 1700, Minneapolis, MN 55402 (for respondent)


Bernie M. Dusich, Joshua A. Tuchscherer, Sieben, Polk, LaVerdiere & Dusich, P.A., 999 Westview Drive, Hastings, MN 55033 (for appellants)


            Considered and decided by Kalitowski, Presiding Judge; Lansing, Judge; and Dietzen, Judge.

U N P U B L I S H E D   O P I N I O N




            Appellants challenge the district court judgment in which it granted respondent’s cross motion for summary judgment, arguing that the district court erred in concluding that respondent had no duty to defend or indemnify its insured, who was involved in a car accident with appellant, for no-fault benefits on the grounds that the “regular-use” and the “business-use” exclusions did not apply.  Because the district court properly applied the law and properly interpreted the insurance policy in question, we affirm.


            In October 2003, appellant Kenneth Koehnen was driving his motorcycle in the left lane of eastbound Highway 36 near Keats Avenue in Lake Elmo when William Wetterstrom, who was driving a 2003 Buick Century owned by Wescott Auto Sales, pulled out from a stop sign onto Highway 36 and collided with appellant.  Appellant suffered serious injuries.

            At the time of the accident, Wetterstrom was the manager and sole employee of Wescott Auto Sales, which was owned by his daughter Lisa Jerentosky and her husband Scott Jerentosky.  Wetterstrom was responsible for the general management of the business, which included the purchase and sale of vehicles for the business.  As part of the business, Wetterstrom purchased vehicles at auctions for resale by Wescott Auto Sales.  After a vehicle was purchased, Wetterstrom would clean it up and get it ready for sale.  When it was ready for sale, Wetterstrom would display it at the Wescott Auto Sales lot in St. Paul Park or at Lake Elmo Repair in Lake Elmo.

            The 2003 Buick that was involved in the accident had been recently purchased at an auction.  On the afternoon of the accident, Wetterstrom picked up the vehicle from the repair shop in Lake Elmo, drove it to his home to pick up his checkbook, and was in the process of driving the vehicle to a location in North St. Paul where he intended to prepare the vehicle for sale by washing it, checking the oil, and filling it with gas.  The accident occurred on his way to that location.

            Auto-Owners Insurance Company undertook the defense of Wetterstrom and Wescott Auto Sales under Wescott’s comprehensive general liability (CGL) insurance policy.  Wetterstrom also tendered the complaint to his home and auto owners’ insurer, Economy Premiere Assurance Company, seeking further indemnification for the accident.  Subsequently, respondent Metropolitan Property and Casualty Insurance Company, a successor-in-interest to Economy Premiere, brought a declaratory judgment action asserting that it had no duty to indemnify Wetterstrom for the claims arising out of the accident on the grounds that (1) the 2003 Buick owned by Wescott Auto Sales was not a covered vehicle under Metropolitan’s insurance policy, and (2) the “regular-use” and “business-use” exclusions precluded coverage for the claims.  Subsequently, Koehnen and his wife Kim Koehnen (appellants) settled with Auto-Owners, the CGL insurer, but reserved their rights against respondent.

            Both parties filed motions for summary judgment.  Following a hearing, the district court granted respondent’s motion for summary judgment concluding that the “regular-use” and ‘business-use” exclusions precluded coverage under the insurance policy.  This appeal follows.




Appellants argue that the district court erred in concluding that the “regular-use” exclusion of the insurance policy precluded coverage.  “Regular use” is an unambiguous term, to be given its “common and ordinary meaning.”  Grinnell Mut. Reinsurance Co. v. Anderson, 427 N.W.2d 274, 275-76 (Minn. App. 1988) (citing Boedigheimer v. Taylor, 287 Minn. 323, 327, 178 N.W.2d 610, 613 (1970)). 

At the time of the accident, Wetterstrom was covered by respondent’s home and auto owner’s insurance policy, which states:

Motor Vehicle Liability Protection

PAK II covers you and your family for any liability caused through the use of any motor vehicle you or they own or lease that is listed on the Coverage Summary.  . . .  In addition we will cover:

1. Vehicles, or trailers designed for use with any motor vehicle covered by PAK II, you or your family do not own as long as they are not made available for you or your family’s regular use . . . .


(Emphasis added.)

To determine whether a vehicle was available for regular use, we consider (1) any agreement between the insured and the owner of the involved vehicle, (2) the actual use of the vehicle by the insured, and (3) the purpose for including nonowned automobile provisions in insurance policies.  Grinnell Mut., 427 N.W.2d at 276.  Use of a non-owned vehicle for business purposes may constitute the regular use of that vehicle.  LeDoux v. Iowa Nat. Mut. Ins. Co., 262 N.W.2d 418, 422 (Minn. 1978) (holding that where vehicle owned by employer was not available to plaintiff for any purpose other than delivering newspapers and had never been used by him for personal purposes, plaintiff had regular use of the vehicle).  In a business situation, the vehicle may be one of several cars owned by the employer that the employee has access to on a regular basis.  Grinnell Mut., 427 N.W.2d at 275 (the accident in question involved one of a fleet of five vehicles owned by the company for business purposes).  We turn to an analysis of the Grinnell factors.

First, we consider any agreement between the insured and the owner of the vehicle. Id.  Here, the district court concluded that although Wetterstrom’s use of the involved vehicle was limited to business purposes, “he was allowed unrestricted use of the Wescott vehicles when it came to the business.” Appellants and respondent dispute whether Wescott prohibited Wetterstrom from using the cars for personal purposes.  But, this dispute is not material, because even use of a vehicle solely for business purposes may constitute regular use.  See LeDoux, 262 N.W.2d at 422 (finding regular use where vehicle was used only for business purposes).

Second, we consider the actual usage of the involved vehicle by the insured.  Grinnell Mut., 427 N.W.2d at 276.  The district court found that Wetterstrom drove Wescott’s cars back from auctions or dealers after purchase, and drove cars to and from repair shops, gas stations, car washes, and shops for interior cleaning to prepare the cars for resale.  Additionally, “[h]e was allowed to drive the cars home at night or over the weekend and he was allowed to make other stops with the cars (as he stopped home on the day of the accident on the way to the cleaning).”  As the dealership’s manager and sole employee, Wetterstrom had regular access to all of the cars to prepare them for sale. 

            Appellants attempt to distinguish LeDoux on the basis that LeDoux used the vehicle for three hours, five days a week.  See id. (vehicle was used daily for newspaper delivery).  Here, the accident occurred the first time Wetterstrom drove the 2003 Buick.  But, as the district court pointed out, even though this was the first time he drove this particular car, Wetterstrom regularly had access to all vehicles owned by the dealership.  It found that there is “no difference between a single furnished car for regular use or any car from a group of automobiles from which an automobile is regularly furnished for driving.”  Cf. Grinnell Mut., 427 N.W.2d at 275 (car involved was one of five cars owned by the business).  See also Kenney v. Employers’ Liability Assur. Corp.,5 Ohio St.2d 131, 134, 214 N.E.2d 219, 221 (1966) (holding that a car may be regularly used even if “it is only one of a group of automobiles from which an automobile is regularly furnished to the named insured by his employer.”). 

Third, we consider the purpose of including non-owned vehicle provisions in insurance policies, when determining whether the vehicle was available for the insured’s regular use.  Grinnell Mut., 427 N.W.2d at 276.  “Nonowned automobile provisions in automobile liability insurance contracts were not intended to permit insureds to drive any number of additional vehicles and claim coverage for all of them.”  Id. Rather, the coverage is provided for the “convenience” of the insured.  Id.  Appellants likewise acknowledge that the purpose of the “regular-use” language is “to insure that the insurance company has an opportunity to adequately forecast their potential risk.”  But allowing recovery in this situation would extend the insurance company’s risk from the one car Wetterstrom insured to the entire inventory of cars at the dealership.    

Thus, the agreement between Wescott Auto Sales and Wetterstrom, Wetterstrom’s actual use, and the provision’s purpose support a finding of regular use.  Grinnell Mut., 427 N.W.2d at 276 (identifying regular use factors).  As such, the court properly applied the law in finding that Wetterstrom had regular use of the 2003 Buick involved in the accident, and the policy exclusion precludes coverage.


Appellants argue that the district court erred in concluding that the business-use exclusion in Wetterstrom’s insurance policy precluded coverage.  Specifically, appellants argue that the business-use exclusion is ambiguous and should be resolved against the insurer.  Alternatively, appellants argue that the business-use exclusion contravenes Minnesota law.

A.        Is the Business-Use Exclusion Ambiguous?

Appellants argue that the language of the business-use exclusion is ambiguous.  Whether a contract is ambiguous is a question of law that we review de novo.  Blackburn, Nickels & Smith, Inc. v. Erickson, 366 N.W.2d 640, 643 (Minn. App. 1985), review denied (Minn. Jun. 24, 1985).  “A contract is ambiguous if it is reasonably susceptible to more than one construction.”  City of Virginia v. Northland Office Props. Ltd. P’ship., 465 N.W.2d 424, 427 (Minn. App. 2001) (quoting Blackburn, 366 N.W.2d at 644) (emphasis in original), review denied (Minn. April 18, 1991). 

Undefined terms of an insurance policy must be given “their plain, ordinary, or popular meaning.”  Smith v. St. Paul Fire & Marine Ins. Co., 353 N.W.2d 130, 132 (Minn. 1984).  “Ambiguities are to be resolved against the insurer and in accordance with the reasonable expectations of the insured.”  Columbia Heights Motors, Inc. v. Allstate Ins. Co., 275 N.W.2d 32, 36 (Minn. 1979) (citations omitted).

            Wetterstrom’s insurance policy states, “we do not cover any liability or claims connected with any business, profession, or occupation.  But we do cover business use of the private passenger automobiles listed on the Coverage Summary.”  The district court found that the language was “plain and unambiguous,” that the vehicle was not listed on the coverage summary, and that Wetterstrom was using the vehicle for a business purpose.  Appellants argue that the language of the policy is limited to claims like malpractice, fraud, or employment issues that may arise during the operation of a business. 

We conclude that the policy language is not ambiguous.  The policy language specifically excludes, except in the case of an automobile listed on the coverage summary, “any liability or claims connected with any business, profession or occupation” unless subject to the exception for covered automobiles.  (Emphasis added).  There is no dispute that the vehicle in question, the 2003 Buick, was not listed on the coverage summary and was being driven for business at the time of the accident.

            Appellants next argue that the business-use exclusion conflicts with another policy provision.  That provision states:

We also cover you and your family if you or they give someone else permission to drive a vehicle covered by PAK II.  The driver is also covered as long as he or she uses the vehicle for the purpose intended when permission was given.  But we won’t cover anyone other than you or your family for the use of a vehicle covered by PAK II during the operation of an automobile business.  An “automobile business” is selling, repairing, servicing, leasing, towing, transporting, fueling, storing or parking motor vehicles.


This policy provision functions to limit liability when a covered vehicle is driven by someone other that the vehicle owner or family member.  The first two sentences extend coverage to the insured vehicle owner or family member and the permissive user, so long as the vehicle is used for the intended purpose.  The third sentence restricts coverage to the insured vehicle owner and his family when the permissive driver uses the vehicle in an automobile business.

            Appellants argue that the third sentence creates a right to coverage any time the insured or family member engages in an automobile business.  They assert that because Wetterstrom used the 2003 vehicle in an automobile business, i.e., the sale of cars, that the policy language expressly requires Metropolitan to provide coverage.  Appellants acknowledge that such an interpretation conflicts with the business-use exclusion, but argue that the conflict creates an ambiguity that must be resolved against the insurer.

But, this provision is inapplicable to Wetterstrom’s situation for several reasons.  First, the provision in question is limited to the circumstance where the insured or a family member gives permission to a third party to drive an insured vehicle.  Here, the vehicle in question was not loaned by the insured to a third party.  Rather the opposite is true; Wetterstrom, the insured, was the user of a car owned by Wescott Auto Sales.  Second, contrary to appellants’ interpretation, the provision creates no independent right to coverage of an accident that occurs during the operation of an automobile business.  Instead, the policy limits coverage of vehicles used in an automobile business to the insured and the insured’s family, and therefore does not contradict the policy’s limitation of the business-use exclusion to vehicles listed on the coverage summary.  As such, there is no conflict between the business-use exclusion and the provision cited by appellants, and no ambiguity is created.

B.       Does the Business-Use Exclusion Contravene Minnesota Law?

Appellants argue that the business-use exclusion in Wetterstrom’s policy contravenes Minnesota law.  Both statutory and contractual interpretation present questions of law that we review de novo.  Kersten v. Minnesota Mut. Life Ins. Co., 608 N.W.2d 869, 872 (Minn. 2000).  Insurance contract provisions that conflict with statutory law will not be enforced.  Roering v. Grinnell Mut. Reinsurance Co., 444 N.W.2d 829, 833 (Minn. 1989) (citing AMCO Ins. Co. v. Lang, 420 N.W.2d 895, 900 (Minn. 1988); Burgraff v. Aetna Life & Cas. Co., 346 N.W.2d 627, 632 (Minn. 1984)). 

Under the Minnesota No-Fault Automobile Insurance Act, every automobile owner must maintain a plan of reparation security that includes, inter alia, residual liability insurance.  Minn. Stat. § 65B.48, subd. 1 (2004).  The “residual liability insurance policy shall be excess of a nonowned vehicle policy whether the nonowned vehicle is borrowed or rented, or used for business or pleasure. A nonowned vehicle is one not used or provided on a regular basis.”  Minn. Stat. § 65B.49, subd. 3(3)(d) (2004).  Appellants argue that Minn. Stat. § 65B.49, subd. 3(3)(d) requires insurance policies to provide coverage for nonowned vehicles used for any purpose—including business—and that the business-use limitations violate this provision.  We disagree.

            The subdivision’s purpose is to identify the order of priority for insurance coverage.  See State Farm Mut. Auto. Ins. Co. v. Universal Underwriters Ins. Co.,625 N.W.2d 160, 164 (Minn. App. 2001) (stating that the “statute only directs which policy is primary” and holding that a policy may cover non-owner drivers of the insured’s vehicle at a lower level than the insured), review denied (Minn. June 27, 2001).  Contrary to appellants’ argument, the statute’s requirement that the driver’s policy “shall be excess of” (in other words, secondary to) the policy on the non-owned vehicle “whether . . . borrowed or rented, or used for business or pleasure” does not impose a requirement that the policy cover business use.  Rather, it merely requires that the owner’s policy will be used first, regardless of the reason the non-owner was driving the vehicle.  See, e.g., Hertz Corp. v. State Farm Mut. Ins. Co.,573 N.W.2d 686, 691 (Minn. 1998) (applying rule that owner’s policy is primary to driver’s policy); Mut. Serv. Cas. Ins. Co. v. West Bend Mut. Ins. Co.,599 N.W.2d 585, 588 (Minn. App. 1999) (applying same).  As such, the policy’s business-use exclusion does not contravene Minnesota’s No Fault Act.