This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (2006).







Duluth Amateur Hockey Association, Inc.,





West Bend Mutual Insurance Company,



Filed September 12, 2007


Willis, Judge


St. Louis County District Court

File No. 69DU-CV-06-684



Harold A. Frederick, Fryberger, Buchanan, Smith & Frederick, P.A., 302 West Superior Street, Suite 700, Duluth, MN  55802 (for respondent)


Nicholas Ostapenko, Trina R. Alvero, Johnson, Killen & Seiler, P.A., 230 West Superior Street, Suite 800, Duluth, MN  55802 (for appellant)


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

U N P U B L I S H E D   O P I N I O N


            Appellant insurance company challenges the district court’s grant of summary judgment to respondent, arguing that the district court erred by determining that the insurance policy at issue covered business personal property that was destroyed in a fire.  We affirm.


Respondent Duluth Amateur Hockey Association (DAHA) is a nonprofit corporation that, under an agreement with the City of Duluth, operates and maintains two municipal indoor ice facilities, including Peterson Arena.  On March 20, 2003, DAHA purchased an insurance policy from appellant West Bend Mutual Insurance Company that covered the buildings and DAHA’s business personal property.  The policy provides, in an extender provision, that DAHA “may extend [its business-personal-property] insurance to apply to:”

1) Business personal property, including such property that you newly acquire, at any location you acquire other than at fairs, trade shows or exhibitions;


2) Business personal property, including such property that you newly acquire, located at your newly constructed or acquired buildings at the location described in the Declarations; or


3) Business personal property that you newly acquire, located at the described premises.


The most we will pay for loss or damage under this Extension is $500,000 at each building.


(Emphasis added.)  The policy also contains an expiration-of-coverage provision that reads:

With respect to insurance on or at each newly acquired or constructed property, coverage will end when any of the following first occurs:


            (a) This policy expires;


(b) 30 days expire after you acquire the property or begin construction of that part of the building that would qualify as covered property; or


            (c) You report values to us.


(Emphasis added.)

On June 30, 2004, DAHA contracted with Becker Arena Products, Inc. for the purchase and installation of a dasher-board system for Peterson Arena.  The contract provided that the system would be delivered “FOB: Duluth, Minnesota.”  On July 12, 2004, the components of the system were unloaded at Peterson Arena, and DAHA made a partial payment of $30,682.75.  In September 2004, Becker Arena Products began installing the dasher boards, and DAHA made a payment of $48,215.75.  A “punch list” of changes to the dasher-board system was compiled in October and November 2004.  On December 3, 2004, Becker Arena Products completed installation, and DAHA made a final payment of $7,720.50.

On December 19, 2004, a fire destroyed the dasher-board system.  DAHA filed a claim under its insurance policy with West Bend; when West Bend denied the claim, DAHA sued, claiming a breach of the policy.  The parties filed cross-motions for summary judgment, and the district court granted DAHA’s motion.  Relying on the agreement between Becker Arena Products and DAHA and on the Uniform Commercial Code, Minn. Stat. § 336.2-106(2) (2006), which provides that goods “conform to the contract when they are in accordance with the obligations under the contract,” the district court determined that under the contract, DAHA did not “acquire” the dasher boards until they were completely installed on December 3, 2004, which was 16 days before the fire.  The district court concluded, therefore, that when the dasher-board system was destroyed, it was business personal property that DAHA acquired within the 30-day grace period described in the expiration-of-coverage provision.  West Bend appeals.


When reviewing a grant of summary judgment, this court determines (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, 4 (Minn. 1990).  There is no genuine issue of material fact when the record taken as a whole would not permit a rational fact-finder to find for the nonmoving party.  DLH, Inc. v. Russ, 566 N.W.2d 60, 69 (Minn. 1997).  When the nonmoving party bears the burden of proof on any element essential to the nonmoving party’s case, the nonmoving party must make a showing sufficient to establish that essential element.  Id. at 71.  We review the record in a light most favorable to the nonmoving party.  Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).

West Bend argues that the district court erred by determining that, under the plain language of the policy, the dasher-board system was covered.  The construction of an insurance policy is a question of law, which we review de novo. Carlson v. Allstate Ins. Co., 734 N.W.2d 695, 699 (Minn. App. 2007).  When construing an insurance policy, a court should consider the policy and any endorsements, and should give effect to all of the provisions.  Steele v. Great W. Cas. Co., 540 N.W.2d 886, 888 (Minn. App. 1995), review denied (Minn. Feb. 9, 1996).  A court reads a policy in light of the plain and ordinary meaning of the text of the policy and with the purpose of effectuating the parties’ intent.  Canadian Universal Ins. Co. v. Fire Watch, Inc, 258 N.W.2d 570, 572 (Minn. 1977).  But a court should construe a policy as a reasonable person would understand the text, not as the insurance company intended the text. Id.  And any reasonable doubt as to the meaning of a policy is construed in favor of the insured.  Steele, 540 N.W.2d at 888.

The district court, relying on the contract between DAHA and Becker Arena Products, determined that DAHA did not acquire the dasher boards until they were completely installed on December 3.  Thus, the district court concluded that the dasher-board system was destroyed by the fire within 30 days after it was “acquired,” and therefore insurance coverage had not terminated under the expiration-of-coverage clause.

 The plain meaning of the word “acquire” is “to get as one’s own.”  Gilliland v. Port Auth. of St. Paul, 270 N.W.2d 743, 746 (Minn. 1978).  The contract between DAHA and Becker Arena Products provides that the dasher-board system was delivered F.O.B. Duluth.  Under the Uniform Commercial Code, when an item is shipped F.O.B. the place of destination, the risk of loss passes to the purchaser when the item is delivered.  See Minn. Stat. § 336.2-319(1)(b) (2006).  It is undisputed that the system was delivered on July 12.  Although DAHA did not make the final payment for the dasher-board system when it was delivered, DAHA received the system as its “own” on that date.  And from July 12, DAHA bore the risk of the loss of the system.  We conclude, therefore, that for the purpose of the policy, DAHA acquired the dasher-board system on July 12, which was more than six months before the fire and, therefore, the loss did not occur within the 30-day grace period provided by the expiration-of-coverage provision.

Although we disagree with the district court’s analysis, we nevertheless conclude that the insurance policy provided coverage for the dasher-board system when it was destroyed.  Although not ruled on by the district court, DAHA argued below and argues again on appeal, first, that the dasher-board system was newly acquired business personal property that was “located at the described premises,” that is, it was located at Peterson Arena, and, therefore, coverage existed under the extender provision.  Second, DAHA argues that because the expiration-of-coverage provision applies only to “insurance on or at each newly acquired or constructed property,” it has no application to newly acquired business personal property at an existing premises because such business personal property is not located “on or at a newly acquired or constructed property.”  West Bend, on the other hand, claims that the expiration-of-coverage provision applies to all newly acquired business personal property no matter where it is located, and because DAHA acquired the dasher-board system more than 30 days before the fire destroyed it, there was no coverage.

We observe that the introductory language to the expiration-of-coverage provision, which West Bend drafted, is not a model of clarity.  We understand both parties’ reading of the language “on or at each newly acquired or constructed property,” and we find both to be reasonable.  Therefore, we conclude that the provision is ambiguous.  See Mut. Serv. Cas. Ins. Co. v. Wilson Twp., 603 N.W.2d 151, 153 (Minn. App. 1999), review denied (Minn. Mar. 14, 2000).  When an insurance policy is ambiguous, it must be given the meaning that is favorable to a finding of coverage.  Amatuzio v. U.S. Fire Ins. Co., 409 N.W.2d 278, 280 (Minn. App. 1987).  And even when an insurer’s interpretation is found to be “eminently reasonable,” a court must resolve any reasonable doubts in favor of the insured.  Farmers Home Mut. Ins. Co. v. Lill, 332 N.W.2d 635, 637 (Minn. 1983). 

Because a reasonable person could read the expiration-of-coverage provision to apply to newly acquired personal property only if it is located at a newly acquired or constructed property, or building, and because there is no dispute that Peterson Arena is not such a building, we conclude that the dasher-board system was covered under the extender provision and that it was not subject to the expiration-of-coverage provision.  We affirm the result reached by the district court.