may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1996).
STATE OF MINNESOTA
IN COURT OF APPEALS
Lawrence Holden, et al.,
Illinois Farmers Insurance Co., et al.,
General Casualty Insurance
Filed February 3, 1998
Dakota County District Court
File No. C5-93-8006
William D. Harper, William D. Harper, Chartered, Paul D. Peterson, Of Counsel, 6043 Hudson Road, Suite 370, Woodbury, MN 55125 (for appellants)
Barbara A. Burke, Jo Ann Strauss, Cousineau, McGuire & Anderson, Chartered, 600 Travelers Express Tower, 1550 Utica Avenue South, Minneapolis, Minnesota 55416 (for respondent)
Considered and decided by Lansing, Presiding Judge, Willis, Judge, and Holtan, Judge.*
Retired judge of the district court, serving as judge of the Minnesota Court of Appeals by appointment pursuant to Minn. Const. art. VI, § 10.
Lawrence Holden received workers' compensation benefits after he was injured in a motor vehicle owned by his employer and driven by a fellow employee, James Carlier. Holden and his wife sued Carlier, alleging gross negligence. The parties agreed to a $100,000 judgment against Carlier, to be collected from available insurance.
The Holdens brought the present motion for leave to file a supplemental complaint in garnishment against General Casualty Insurance Company, the insurer of the employer's motor vehicle. The district court denied the Holdens' motion, concluding that a "cross-employee" exclusion in General Casualty's policy unambiguously excluded coverage for Lawrence Holden's injuries. We affirm.
General Casualty's cross-employee exclusion denies coverage for "[b]odily injury to any fellow employee of the insured arising out of and in the course of the fellow employee's employment." (Internal quotations omitted.) Carlier was insured under the General Casualty policy because he had permission to drive the employer's motor vehicle. Lawrence Holden's injuries, which were caused by Carlier and which arose out of and during the course of Holden's employment, are therefore excluded under the General Casualty policy.
The Holdens argue, however, that Lawrence Holden's injuries were caused by Carlier's operation of a motor vehicle; therefore, the cross-employee exclusion is unenforceable because it eliminates coverage for motor vehicles that is required by the no-fault act, Minn. Stat. § 65B.48-49 (1996). See Meister v. Western Nat'l Mut. Ins. Co., 479 N.W.2d 372, 379 (Minn. 1992) (refusing to enforce policy provision that denied coverage required by law).
Although the no-fault act does not expressly authorize cross-employee exclusions, the act states that, with respect to no-fault and other benefits paid to an employee, workers' compensation benefits are primary. Minn. Stat. § 65B.61, subd. 1 (1996). We have previously concluded that because workers' compensation coverage is primary, a motor vehicle insurer's cross-employee exclusion does not violate the no-fault act. See Williams v. Houston General Ins. Co., 396 N.W.2d 59, 62-63 (Minn. App. 1986), review denied (Minn. Jan. 16, 1987); Peterson, 317 N.W.2d at 48.
We recognize that the allegations in Peterson apparently involved simple, rather than gross, negligence. That distinction, however, is not relevant to the question of whether a cross-employee exclusion violates the no-fault act. We also decline to distinguish Williams, even though the accident at issue in Williams occurred before the workers' compensation statutes were amended to authorize suits against fellow employees for gross negligence or intentional injury. Those amendments have not altered the fact that workers' compensation benefits remain primary. Minn. Stat. § 65B.61, subd. 1. We therefore re-affirm our decisions in Peterson and Williams that because workers' compensation benefits are primary, a no-fault insurer may exclude coverage for work-related injuries caused to an employee by a fellow employee.
The Holdens also argue that General Casualty must provide no-fault coverage because General Casualty charged the employer a separate premium for no-fault insurance in addition to the premium it charged the employer for workers' compensation benefits. But when a single insurer provides both workers' compensation and no-fault insurance, the legislature has required an appropriate rebate or premium reduction. Minn. Stat. § 65B.61, subd. 1.