This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat.§ 480A.08, subd. 3 (1996).




Kimberlee Halvorson, et al.,



Randal E. Harmer,



Mallard Delivery Service, Inc.,

a Minnesota corporation,



Northern Capital Commercial Lines, Inc.,

d/b/a Northern Capital Insurance, third party defendant,


Filed June 17, 1997


Toussaint, Chief Judge

Hennepin County District Court

File No. CT94-14501

Randall J. Fuller, Babcock, Locher, Neilson & Mannella, 118 East Main Street, Anoka, MN 55303 (for appellants Kimberlee Halvorson and Mallard Delivery Service)

Randal E. Harmer, 7890 Lake Drive, Lino Lakes, MN 55014 (Pro se respondent)

Bradley J. Betlach, James O. Redman, Bassford, Lockhart, Truesdell & Briggs, P.A., 3550 Multifoods Tower, 33 South Sixth Street, Minneapolis, MN 55402 (for respondent Northern Capital Commercial Lines, Inc.)

Considered and decided by Toussaint, Chief Judge, Harten, Judge, and Amundson, Judge.


TOUSSAINT, Chief Judge

Appellants Kimberlee and John Halvorson and Mallard Delivery Service, Inc. (Mallard) challenge the district court's award of summary judgment to respondents Randal E. Harmer and Northern Capital Commercial Lines, Inc. (Northern Capital). Appellants assert there were genuine issues of material fact regarding whether (1) Northern Capital's agent, Jon Hanson, breached a contractual duty to Mallard, (2) Northern Capital had a statutory obligation to notify Mallard of its intent to cancel the insurance coverage of Mallard's independent contractor driver, Harmer, and (3) Hanson and Northern Capital were negligent. Because (1) Northern Capital had no contractual obligation to notify Mallard of Harmer's policy cancellation, (2) Mallard was not a named insured under Minn. Stat. § 65B.16, and (3) the issue of negligence is not properly before this court, we affirm.



On an appeal from summary judgment, this court makes two inquiries (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) (citing Offerdahl v. University of Minn. Hosp. & Clinics., 426 N.W.2d 425, 427 (Minn. 1988)). Whether an insurance agent owes a legal duty to an insured is a question of law. Gabrielson v. Warnemunde, 443 N.W.2d 540, 543 n.1 (Minn. 1989). This court conducts de novo reviews of whether a district court misinterpreted the law. Dohman v. Housely, 478 N.W.2d 221, 224 (Minn. App. 1991) (citing A.J. Chromy Constr. Co. v. Commercial Mechanical Servs., Inc., 260 N.W.2d 579, 581 (Minn. 1977)), rev. denied (Minn. Feb. 11, 1992).

Mallard alleges Northern Capital had a contractual duty to inform Mallard that Harmer's policy was cancelled. Mallard states there is no reasonable way it could have informed itself because that would have necessitated Mallard contacting Northern Capital, possibly on a daily basis, to verify that the insurance was still in effect. Mallard implies that if we decide to interpret insurance cancellation clauses as not mandating notification of additional insureds in employee/employer situations, it (1) is an unreasonable burden on the additional insured, and (2) thwarts the public policy ideal of ensuring that motorists remain insured

Northern Capital replies that Mallard was never its customer and, thus, Northern Capital never owed a legal duty to Mallard. We find Northern Capital's argument compelling. Analysis of the legal relationship between the parties reveals that Northern Capital owed no contractual duty to Mallard. Harmer contracted with Northern Capital for the provision of car insurance. Mallard never rendered any consideration to Northern Capital to form a contract despite any oral or written confirmations. We will not enforce a contract absent mutual consideration of the parties. See Baehr v. Penn-O-Tex Oil, 258 Minn. 533, 538-39, 104 N.W.2d 661, 665 (1960) (only promise supported by consideration constitutes contract and, thus, becomes enforceable).

Additionally, the district court concluded Northern Capital was under no contractual obligation to notify Mallard of Harmer's insurance cancellation, stating

the insurance policy clearly states that the insurer "may cancel this policy by mailing or delivering to the first Named Insured written notice of cancellation." Mallard [as] an additional insured, not a named insured, was not entitled to notice of cancellation under the insurance policy.

In construing a non-ambiguous insurance policy, the language of the policy

must be construed according to the terms the parties have used, and the language used must be given its ordinary and usual meaning so as to give effect to the intention of the parties as it appears from the contract.

Dairyland Ins. Co. v. Implement Dealers Ins. Co., 294 Minn. 236, 244-245, 199 N.W.2d 806, 811 (1972). According to the ordinary and usual meaning of "first Named Insured" Northern Capital would only need to notify Harmer, the only person contracted with, of cancellation. The district court did not misinterpret the law by concluding no contractual obligation existed.


Mallard asserts Northern Capital had a statutory obligation under Minn. Stat. § 65B.16 to inform Mallard that Harmer's policy had been terminated. Mallard contends the legislature made no distinction between an "additional insured" or a "first named insured" and, thus, "named insured" in Minn. Stat. § 65B.16 should be interpreted to include both groups of insureds. Minn. Stat. § 65B.16 (1996) provides

No notice of cancellation or reduction in the limits of liability of coverage of an automobile insurance policy under section 65B.15 shall be effective unless the specific underwriting or other reason or reasons for such cancellation or reduction in the limits of liability of coverage are stated in such notice and the notice is mailed or delivered by the insurer to the named insured at least 30 days prior to the effective date of cancellation * * *.

(Emphasis added). The district court rejected Mallard's contention stating

The plain language of the statute requires that the insurer notify the named insured before cancellation. Mallard's argument that since its name is on the policy it should be considered a named insured is misplaced. A "insured" is the person who applies for the insurance, is named in the policy as the insured, and pays the premium. Fire Ins. Exchange v. Adamson Motors, 514 N.W.2d 807, 809 (Minn. Ct. App. 1994). To interpret the phrase 'named insured' to encompass a party that is listed on a policy as an 'additional insured' would expand the class of parties to whom insurers owe a notice obligation far beyond what the statute requires.

We agree. In Fire Ins. Exch., this court concluded that the additional insured was not to be considered "insured" for purposes of a subrogation claim. Id. Here, Mallard was an additional insured. In addition, Harmer was the only insured that met any portion of Fire Ins. Exch.'s definition of insured because Harmer applied for insurance without Mallard's assistance, Harmer was named in the policy, and neither Harmer nor Mallard paid the premium. The district court did not misinterpret the law by deciding that Mallard was not a "named insured."


Mallard contends the district court erred by deciding that there were no genuine issues of material fact without first deciding whether Hanson acted negligently. However, Mallard did not raise the negligence claim in its complaint. Therefore, the issue of Hanson's negligence is not properly before this court and we will not consider it. See Komatz Const. Inc. v. Western Union Tel. Co., 290 Minn. 129, 140, 186 N.W.2d 691, 699 (Minn. 1971) (issues not raised by pleadings or litigated by court below are not subject to appellate review) (citing Schlecht v. Schlecht, 168 Minn. 168, 209 N.W. 883 (1926) cert. denied, 404 U.S. 856 (1971)); Midway National Bank v. Bollmeier, 474 N.W.2d 335, 339 (Minn. 1991) (citing Urban v. Continental Convention & Show Management, Inc., 244 Minn. 44, 47, 68 N.W.2d 633, 635 (1955)) ("[W]e will not consider new issues raised by a losing party for the first time on appeal").