This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1996).




Lee Zitzer, d/b/a Hewitt-Zitzer Insurance Agency,



Charles D. Hagen, d/b/a Northbeach Vacation Club,

d/b/a Northbeach Interval Owners, d/b/a Shipwreck,

d/b/a Hagen Properties, et al.,


Filed March 18, 1997

Reversed and remanded in part and affirmed in part

Crippen, Judge

Hubbard County District Court

File No. C5-91-533

Mark J. Thomason, Christopher C. Zitzer, Thomason Law Office, 110 Pleasant Avenue, P.O. Box 87, Park Rapids, MN 56470 (for Appellant)

Craig S. Hunter, Hunter Law Firm, P.A., 112 West Third Street, Park Rapids, MN 56470 (for Respondents)

Considered and decided by Lansing, Presiding Judge, Crippen, Judge, and Foley, Judge.[*]



Appellant claims that the trial court erred by failing to determine that joint obligors were severally liable for all of the obligors' insurance premiums. We reverse and remand for entry of money judgment against respondents.


Charles Hagen acquired and developed a lakeside condominium complex called North Beach. Hagen incorporated several entities associated with the complex. These entities included, among others, respondent North Beach Interval Owners Association (the Association), a corporation representing the ownership interests in the condominiums, and respondent North Beach Condominium First Section (First Section), a corporation responsible for the condominium exteriors and the complex grounds. In addition to the condominiums, the North Beach complex also included a restaurant and swimming pool. Hagen, through a separate corporation, acted as the managing agent for the North Beach entities.

In 1979 or 1980, Hagen insured the North Beach entities, including the Association and First Section corporations, through policies issued by appellant under a single account. Hagen, through various entities, periodically made insurance premium payments, although appellant received no payments directly from the Association or First Section. Appellant credited the account as a whole. This payment arrangement continued for several years, even after another corporation replaced Hagen's company as the managing agent for respondents.

In 1989, at the new managing agent's request, appellant separated the insurance account by entity, and an unpaid balance of $17,733 remained on the old account. Although appellant continued to insure the various North Beach entities under separate accounts, the new accounts also became delinquent.

Appellant brought suit against Hagen, respondent corporations, and several other North Beach entities. The trial court found that Hagen had named the Association and First Section as insured on all policies except those concerning workers' compensation and liquor liability.[1] Noting that appellant had failed to comply with the trial court's demand to itemize the old account, the trial court held, among other things, that although the Association and First Section were liable for the unpaid premiums on their new account, neither respondent was jointly and severally liable for the $17,733 owed on the old account. The trial court denied appellant's motion for a new trial or amended findings.


An appellate court reviews de novo a trial court's decision on a purely legal issue. Frost-Benco Elec. Ass'n v. Minnesota Pub. Utils. Comm'n, 358 N.W.2d 639, 642 (Minn. 1984).

Appellant claims that the trial court erred by not holding the Association and First Section jointly and severally liable for the past due insurance premiums on the old account because most of the policies named respondents and, as a result, respondents are jointly and severally liable for the entire premium debt. Appellant relies on the joint and several liability statute, which provides that all parties to a joint obligation, expressly including "all contracts upon which they are liable jointly," are severally liable for the full amount of the obligation. Minn. Stat. § 548.20 (1996).

The trial court demanded an individual matching of the entity's insurance risks with the policy premiums to determine each entity's debt. But Minnesota has long held that an agent, acting with authority, may bind the principal to a contract. See, e.g., Kohagen-Mendenhall Co. v. Joyce, 221 Minn. 83, 86, 21 N.W.2d 232, 234 (1945), (binding principal to contract made by agent who did not disclose agency); Kilborn v. Prudential Ins. Co., 99 Minn. 176, 181-82, 108 N.W. 861, 864 (1906) (binding insurance company to contract made by agent who, despite written instructions to the contrary, accepted a note as payment instead of cash). Hagen, as the agent for respondents, named them on the policies. Because all insureds were represented by a single agent who contracted for them jointly, respondents are jointly and severally liable under the statute.

Respondents rely on National Farmers Union Property & Cas. Co. v. Anderson, 372 N.W.2d 71, 74-76 (Minn. App. 1985) (severing a policy, which named a father and an adult son as insureds, based on the insureds' intent to undertake two separate and distinct obligations, thus permitting the father, on behalf of his minor son injured in a farming mishap arising out of the adult son's negligence, to recover benefits). But National Farmers Union only holds that separate insureds in the same policy may receive, in effect, separate benefits. Id. Nothing in that case contradicts joint and several premium liability where all insureds act through a single agent.

Respondents also argue that they should not be held liable because they had no insurable interest in some of the entities, such as the restaurant and the swimming pool, covered in the policies. But a lack of an insurable interest does not limit exposure to liability to pay premiums. Kenney Co. v. Horne, 194 Minn. 357, 360, 260 N.W. 358, 359-60 (1935) (holding that whether a named insured holds an insurable interest is "immaterial" where it receives the benefits of insurance). The insurance policies named respondents, and they received the benefits of insurance because the policies also covered the condominiums. Thus, respondents' lack of insurable interests in the restaurant and the swimming pool does not limit their joint and several liability for the premium debt.

Appellant also asserts that the Association and First Section are jointly and severally liable for the value of several time-share weeks that Hagen, on behalf of various entities, deeded to appellant to sell and to apply toward the premium debt. The trial court found that respondents had no ownership interest in the time-share weeks and held, as a result, that they owed appellant nothing on this transaction.

Despite the showing of the premium debt, appellant has made no showing that the Association or First Section had responsibility for the delivery of payment or credit that occurred only through the application of assets of another corporation. All parties understood that the time-share weeks were a payment by the entities who owned them. Moreover, unlike the insurance policies, respondents do not appear anywhere on the documents comprising the time-share weeks transfer. Respondents are not jointly and severally liable for the time-share weeks because they were not parties to this transaction.

Reversed and remanded in part and affirmed in part.

[ ]* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const. art. VI, § 10.

[ ]1Although we find no support in the record that the policies named First Section as an insured on all these policies, we will not upset the trial court's finding because neither party questions on appeal the trial court's recitation of this fact.