This opinion will be unpublished and

may not be cited except as provided by

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




Floyd E. Siefferman, Jr., et al.,



United Services Automobile Association, d/b/a USAA,


Filed June 17, 1997


Schumacher, Judge

Hennepin County District Court

File No. 9416888

Nicholas M. Wenner, Floyd E. Siefferman, Jr., Saliterman & Siefferman, 1000 Northstar Center East, 608 Second Avenue South, Minneapolis, MN 55402 (for Appellants)

Robert W. Kettering, Jr., James M. Susag, Paul A. Banker, Arthur, Chapman, Kettering, Smetak & Pikala, P.A., 500 Young Quinlan Building, 81 South Ninth Street, Minneapolis, MN 55402-3214 (for Respondent)

Considered and decided by Randall, Presiding Judge, Toussaint, Chief Judge, and Schumacher, Judge.



Appellants Floyd E. Siefferman, Jr. and Jane Day Siefferman brought this action after respondent United Services Automobile Association, d/b/a USAA, denied insurance coverage for damage to the Sieffermans' home. In this appeal, the Sieffermans challenge the district court's refusal to allow them to amend their complaint to add a claim for violation of the Prevention of Consumer Fraud Act. We affirm.


In August 1993, part of the floor in the Sieffermans' house collapsed about one and one-half inches due to heavy decay of floor joists. The Sieffermans sought to collect under the "Collapse" provision of their homeowner's insurance policy from USAA. USAA denied coverage, and the Sieffermans brought this action. While cross-motions for summary judgment were pending, the Sieffermans moved for leave to amend their complaint to add a cause of action under the Prevention of Consumer Fraud Act, Minn. Stat. § 325F.68-.70 (1996). The district court granted the Sieffermans' summary judgment motion, denied USAA's motion for partial summary judgment, and "abstained" from deciding the Sieffermans' motion to amend. USAA appealed. This court affirmed the district court's ruling on the cross-motions for summary judgment and remanded for a ruling on the Sieffermans' motion to amend. Siefferman v. United Servs. Auto. Ass'n, No. CX-96-778 (Minn. App. Oct. 1, 1996). On remand, the district court denied the motion to amend, and the Sieffermans appeal.


The Sieffermans argue that the district court abused its discretion by denying their motion to amend their complaint to add a cause of action under the Prevention of Consumer Fraud Act, Minn. Stat. § 325F.68-.70 (1996) (the Act). The Sieffermans seek to add this cause of action to recover attorney fees and costs. See Minn. Stat. § 8.31, subd. 3a (1996) (any person injured by violation of sections 325F.68-.70 may bring civil action and recover damages, attorney fees, and costs).

Whether a party is allowed to amend pleadings is a decision resting in the sound discretion of the district court, and its decision will not be reversed absent an abuse of that discretion. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993). Leave to amend a complaint "shall be freely given when justice so requires." Minn. R. Civ. P. 15.01.

USAA argues that a recent supreme court decision, American Standard Ins. Co. v. Le, 551 N.W.2d 923 (Minn. 1996), prevents the Sieffermans from collecting attorney fees and costs in this action. Attorney fees are recoverable if "statutory authority exists to support such an award." Id. at 927. Here, the Act--if applicable--would support such an award. Minn. Stat. § 8.31, subd. 3a.

The pertinent portion of the Act seeks to prevent:

[t]he act, use, or employment by any person of any fraud, false pretense, false promise, misrepresentation, misleading statement or deceptive practice, with the intent that others rely thereon in connection with the sale of any merchandise * * *.

Minn. Stat. § 325F.69, subd. 1. "Merchandise" is defined as "any objects, wares, goods, commodities, intangibles, real estate, or services." Minn. Stat. § 325F.68, subd. 2.

The parties disagree about whether an insurance policy is "merchandise" within the meaning of the Act. USAA argues that the Sieffermans cannot maintain a claim under the Act because the definition of merchandise does not encompass an insurance policy. We conclude that it is unnecessary for us to decide that issue, because even if an insurance policy were covered by the Act, the Sieffermans could not maintain an action under the Act in this instance.

The parties agree that the insurance policy is a standard policy. There is no claim that the policy is fraudulent or deceptive. The Sieffermans' claim does not relate to the sale of the policy, as is required by the Act, but rather to USAA's decision to deny coverage under the policy. See Minn. Stat. § 325F.69, subd. 1 (Act applies to "the sale of merchandise"). It is true that in their original complaint the Sieffermans claimed that USAA's refusal to pay for the collapse was "deceptive" and "is the pattern and practice" of USAA, but the real gist of their claim is simply that USAA breached the insurance contract by denying coverage for the collapse. The Sieffermans' brief to this court demonstrates that their claim is not with the sale of the policy itself, as they summarize this case as one in which USAA "wrongfully denied [the Sieffermans'] claims under the named 'collapse' coverage * * * ." (Emphasis added.)

While the Act is to be liberally construed in favor of protecting consumers, it cannot apply in this situation. See Boubelik v. Liberty State Bank, 553 N.W.2d 393, 402 (Minn. 1996) (consumer protection statutes should be liberally construed). We are satisfied that there are other safeguards in place to prevent fraudulent practices by insurance companies. See, e.g., Minn. Stat. § 72A.17-32 (1996) (regulating trade practices in insurance business); Minn. Stat. § 72A.21 (giving insurance commissioner power to examine and investigate affairs of insurance carriers and agents).

It is not an abuse of discretion for a district court to deny a motion to amend when the proposed amended claim is not legally recognized or there is no evidence to support it. Copeland v. Hubbard Broad., Inc., 526 N.W.2d 402, 405 (Minn. App. 1995), review denied (Minn. Mar. 29, 1995). We cannot say that the district court abused its wide discretion by denying the Sieffermans' motion to amend.