This opinion will be unpublished and

may not be cited except as provided by

Minn. Stat. § 480A.08, subd. 3 (1998).




Duluth Mall, Inc.,

a foreign corporation, et al.,



Courage Center, et al.,


Filed April 27, 1999


Foley, Judge[*]

St. Louis County District Court

File No. C1-97-601046

John M. Sheran, Steven P. Zabel, Leonard, Street & Deinard, 150 South Fifth St., Ste. 2300, Minneapolis, MN 55402 (for appellants)

Robert M. Mahoney, Kyle M. Thomas, Geraghty, O'Loughlin & Kenney, 1400 Ecolab University Ctr., 386 N. Wabasha St., St. Paul, MN 55102-1308 (for respondents)

Considered and decided by Harten, Presiding Judge, Shumaker, Judge, and Foley, Judge.


FOLEY, Judge

Appellants argue the district court erred in granting summary judgment and ruling that they were not entitled to coverage under respondents' special event endorsement and that respondents were obligated to indemnify them for a claim based on appellants' own negligence in maintaining its property. We affirm.


Appellants (the Mall) own and manage the Miller Hill Mall in Duluth. Respondent Courage Center is a non-profit corporation serving individuals with disabilities. Nancy Fifield was a volunteer with Courage Center's Homecrafters program. This program provides training, tools, and materials to homebound individuals who are skilled at a craft.

The Homecrafters program (Courage Center) was planning a crafts show at the Miller Hill Mall for the weekend of November 5-7, 1993. Courage Center completed a written application to use the Mall's common area for the show. The application provided that Courage Center would indemnify and hold appellants

harmless from and against any claims for personal injuries * * * arising from or in any way connected with the use of the Common Area of the Shopping Center or any part or facility thereof by the [Courage Center].

The common area was defined as the "enclosed pedestrian arcade or on the parking lots of the Shopping Center." Before returning the signed application, Todd Johnson, Courage Center's Associate Executive Director for Administration and Human Services, crossed out language on the back of the application that provided:

The Shopping Center tenants, the Merchants' Association or Promotional Fund, fee owner, its lessee, or the Management Company shall not be liable to any User using the "Common Area" or any other person on or about the enclosed Mall, the adjoining grounds and parking lot, by the User's consent, invitation or license, express or implied, for any loss, expense or damage, either to the person or property sustained by reason of any condition of said "Common Area" or the Shopping Center, or due to any act of any employee or agent of Association or the Promotional Fund, the Shopping Center tenants, the fee owner, [its lessees,] the Management Company, or the act of any other person whatsoever.

In the margin, Johnson wrote, "[t]oo broad; not acceptable to Courage Center." The Mall did not make any objection to this deletion or notation by Johnson.

Pursuant to the application, Courage Center obtained a special event endorsement to its commercial general liability policy issued by respondent St. Paul Mercury Insurance Company (St. Paul Company) to include the Mall as an additional insured. The endorsement provided:

[Courage Center is] now covered for liability claims arising out of the [craft show], on the dates listed, at the location listed.

St. Paul Company charged an extra premium for the endorsement.

At approximately 9:00 p.m. on November 4, 1993, Fifield went to the Mall to help set up displays and tables for the craft show. The show was to take place inside the Mall in an area next to the J.C. Penney store. As Fifield was walking on the exterior sidewalk leading from the parking lot to the entrance of the J.C. Penney store, she slipped and fell on the snow and ice that had accumulated on the sidewalk. Fifield filed suit against appellants, alleging they were negligent for failing to keep the sidewalk free of ice and snow or failing to warn of a hazardous condition. A jury awarded Fifield damages in the amount of $77,616.12 for appellants' negligence. The jury's verdict was affirmed on appeal. See Fifield v. Duluth Mall, Inc., No. C6-96-1510 (Minn. App. Apr. 15, 1997), review denied (Minn. May 29, 1997).

The Mall then commenced a declaratory judgment action against respondents, arguing that it was entitled to coverage under the special event endorsement and that Courage Center was obligated to indemnify it for Fifield's claim. The district court granted respondents' motion for summary judgment, ruling that the Mall was negligent and its liability arose exclusively from its own negligence, and that the insurance contract documents did not provide that the Mall would be indemnified for its own negligence.


On appeal from summary judgment, the reviewing court is to determine whether any genuine issues of material fact exist and whether the district court correctly applied the law. Offerdahl v. University of Minn. Hosps. & Clinics, 426 N.W.2d 425, 427 (Minn. 1988). This court need not defer to the district court's decision on purely legal issues. Frost-Benco Elec. Ass'n v. Minnesota Pub. Utils. Comm'n, 358 N.W.2d 639, 642 (Minn. 1984). "Insurance coverage issues are questions of law for the court." State Farm Ins. Cos. v. Seefeld, 481 N.W.2d 62, 64 (Minn. 1992) (citation omitted).

Appellants contend that, as an additional insured under Courage Center's special event endorsement, they are covered under the terms of the endorsement because Fifield's claim was one "arising out of" the craft sale held by Courage Center. We disagree.

The burden of proving the existence of coverage rests with the insured, while the burden of proving an exclusion rests with the insurer. Boedigheimer v. Taylor, 287 Minn. 323, 329, 178 N.W.2d 610, 614 (1970). When reviewing an insurance policy, the court's function is to ascertain and give effect to the parties' agreement. Fillmore v. Iowa Nat'l Mut. Ins. Co., 344 N.W.2d 875, 877 (Minn. App. 1984). The language of the policy "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, 244-45, 199 N.W.2d 806, 811 (1972) (citations omitted).

Minnesota courts have interpreted the phrase "arising out of" in a number of contexts and have "concluded that causation is implied." Lanoue v. Firemen's Fund Am. Ins. Cos., 278 N.W.2d 49, 54 (Minn. 1979) (citations omitted), overruled on other grounds by American Standard Ins. Co. v. Le, 551 N.W.2d 923 (Minn. 1996). Generally, "the policy term `arising out of' means `originating from,' or `having its origin in,' `growing out of,' or `flowing from.'" Associated Indep. Dealers, Inc. v. Mutual Serv. Ins. Cos., 304 Minn. 179, 182, 229 N.W.2d 516, 518 (1975) (citation omitted). When interpreting this language in the context of automobile insurance, it has been emphasized that

[t]he phrase "arising out of" is not be construed to mean "proximately caused by." * * * The phrase itself is much broader than a phrase such as "proximately caused by the use of * * *." The words "arising out of" mean causally connected with, not "proximately caused by" use. "But for" causation, i.e., a cause and result relationship, is enough to satisfy the provision of the policy.

Faber v. Roelofs, 311 Minn. 428, 436-37, 250 N.W.2d 817, 822 (1977) (quotation omitted). In the context of "arising out of" the use of premises,

the premises must bear some causal relationship to the liability. * * * The fact that something occurs at a place is not sufficient by itself to imply causation as to that place.

Lanoue, 278 N.W.2d at 54. Thus, whether causation exists, "must, to a great degree, turn on the particular facts presented." Associated Indep. Dealers, 304 Minn. at 183, 229 N.W.2d at 518 (citation omitted).

We agree with appellant's contention that the intent of the special event endorsement was to limit the Mall's liability that might result from allowing Courage Center to use the Mall's facilities for the craft show. But the language of the special event endorsement conveys an intent to limit liability to activities associated with the craft show and not to a general use of the Mall's facilities by members of Courage Center or its patrons.

We reject appellants' claim that, but for the craft show, Fifield would not have been at the Mall and therefore would not have been injured. The causal connection between Fifield's injury and the activities of the craft show is weak at best. Fifield was simply walking from her car to the site of the craft show and, at the time of the accident, was not engaged in any activities for the craft show. It is undisputed that the Mall was negligent in failing to maintain the sidewalk properly; Fifield's injury was caused by the Mall's negligence; and Courage Center had no duty to maintain the sidewalk. The special event endorsement did not seek to provide coverage for claims arising out of the Mall's negligence or claims that were unrelated to the craft show. Because there is no causal connection between Fifield's injury and the activities of the craft show, we conclude that her slip and fall was incidental to and did not "arise out of" the craft show. See Rausch v. Beech Aircraft Corp., 277 N.W.2d 645, 647 (Minn. 1979) (concluding requisite relationship existed where nexus between specified activity and liability strong and not merely incidental). Accordingly, we conclude that the Mall is not entitled to coverage under the terms of Courage Center's special event endorsement.

Next, appellants argue that they are entitled to indemnification from Courage Center for Fifield's injury under the terms of the parties' indemnification agreement. Respondents counter, arguing that the application permit did not provide in clear and unequivocal terms that Courage Center was required to indemnify the Mall for its own negligence.

Agreements that seek to indemnify the indemnitee for liability caused by the indemnitee's own negligence are not favored in the law and such agreements generally "are not construed in favor of indemnification." National Hydro Sys. v. M.A. Mortenson Co., 529 N.W.2d 690, 694 (Minn. 1995).

Indemnity agreements are to be strictly construed when the indemnitee * * * seeks to be indemnified for its own negligence. There must be an express provision in the contract to indemnify the indemnitee for liability occasioned by its own negligence; such an obligation will not be found by implication.

Farmington Plumbing & Heating Co. v. Fischer Sand & Aggregate, Inc., 281 N.W.2d 838, 842 (Minn. 1979) (citation omitted).[1] But the contract does not need to refer expressly to negligence "if the language of the contract necessarily includes claims of the indemnitor's negligence." Bogatzki v. Hoffman, 430 N.W.2d 841, 845 (Minn. App. 1988) (citations omitted), review denied (Minn. Dec. 21, 1988).

The parties' contract contains no express provision providing that Courage Center would indemnify appellants for their own negligence; nor can such an intent be inferred from the contract's language. Courage Center expressly rejected that portion of the contract providing that it would be liable for any injuries caused by the condition of the common area, including the exterior sidewalks and the parking lots. By accepting the modified application permit without objection and allowing the craft show to take place, the Mall accepted the terms of the modified application permit and this became the parties' contract. See Johnson v. M.J. O'Neil, Inc., 182 Minn. 232, 235, 234 N.W. 16, 17 (1931) (holding where one to whom offer is made performs in accordance with offer, "his act is an acceptance"). Because Courage Center did not expressly agree to indemnify the Mall for liability caused by the Mall's own negligence, we conclude that the district court did not err when it ruled that the Mall is not entitled to indemnification by Courage Center.

Finally, appellants argue that they are entitled to coverage under the special event endorsement issued by St. Paul Company because the St. Paul Company policy was closer to the risk than their own general liability coverage provided by Aetna. Because we conclude that the Mall is not entitled to coverage under the special event endorsement, there are no competing insurance polices to compare. Thus, this issue is moot.


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

[1] The decision in Farmington involved indemnity agreements pertaining to construction contracts. Indemnification agreements in construction contracts are now governed by Minn. Stat. §§ 337.01-.06 (1998). However, the language of strict construction articulated in Farmington has been applied in nonconstruction contract cases. See Lake Cable Partners v. Interstate Power Co., 563 N.W.2d 81, 86 (Minn. App. 1997) (quoting Farmington, 281 N.W.2d at 842), review denied (Minn. July 10, 1997).