This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (1998).


Sarah Ranzau,


Metropolitan Property &
Casualty Company,

Filed November 23, 1999
Klaphake, Judge

Hennepin County District Court
File No. 98-10809

Mark C. Vandelist, Vandelist & Vandelist, 14569 Grand Ave. S., Burnsville, MN 55306 (for respondent)

Richard S. Stempel, Michael W. Lowden, Stempel & Associates, PLC, 41 - 12th Av. N., Hopkins, MN 55343 (for appellant)

Considered and decided by Halbrooks, Presiding Judge, Klaphake, Judge, and Anderson, Judge.

U N P U B L I S H E D   O P I N I O N


Following an arbitration award against it and in favor of respondent Sarah Ranzau, appellant Metropolitan Property & Casualty Company (Metropolitan) moved to vacate the award under Minn. Stat. § 572.19, subd. 1(3) (1998). Metropolitan argued that the arbitrator exceeded his authority by finding that an accident had occurred, which Metropolitan asserts is a legal issue involving coverage that is reserved for the district court under AMCO Ins. Co. v. Ashwood-Ames, 534 N.W.2d 740 (Minn. App. 1995), review denied (Minn. Sept. 28, 1995). The district court denied Metropolitan's motion to vacate and confirmed the award, concluding that Metropolitan waived this coverage defense by failing to raise it during consideration of its earlier motion to stay arbitration and by waiting until the morning of the arbitration hearing to raise the issue.

Because an insurer is deemed to have waived a coverage defense unless raised before arbitration begins, we affirm.


Upon application of a party, the district court must vacate an arbitration award if the arbitrator exceeds his power. Minn. Stat. § 572.19, subd. 1(3) (1998). The party seeking to vacate an award has the burden to prove that the award is invalid. National Indem. Co. v. Farm Bureau Mut. Ins. Co., 348 N.W.2d 748, 750 (Minn. 1984). In cases involving the no-fault act, arbitrators are limited to deciding issues of fact, leaving legal issues to the courts. Neal v. State Farm Mut. Ins. Co., 529 N.W.2d 330, 331 (Minn. 1995).

The arbitrator in this case found that (1) in April 1995, an unidentified vehicle rear-ended Ranzau's vehicle; (2) the force of the collision was sufficient to push Ranzau's vehicle one to three feet; (3) the occupants of the Ranzau vehicle were thrown forward and back as a result of the impact; (4) Ranzau sustained injuries and aggravated prior injuries as a result of the impact and collision; and (5) the medical expenses incurred and claimed by Ranzau were reasonable, necessary, and related to the accident. Based on its findings, the arbitrator awarded Ranzau $14,938.93 in medical expenses, costs, and interest.

Metropolitan argues that the arbitrator exceeded his power by finding that an accident occurred, which is a precondition to coverage under both the no-fault act and Ranzau's insurance policy. As support for its position, Metropolitan cites AMCO Ins. Co. v. Ashwood-Ames, 534 N.W.2d 740 (Minn. App. 1995) (coverage is legal issue reserved for district court), review denied (Minn. Sept. 28, 1995). In particular, Metropolitan questions Ranzau's claim that an accident occurred when her car was rear-ended by a driver who left the scene and was never identified.

The facts of this case, however, distinguish it from AMCO, where the insurer timely raised the issue of coverage and disputed whether an accident had occurred. Id. Here, Metropolitan failed to raise this coverage defense until the morning of the no-fault hearing, despite having the following opportunities to do so.

First, when Metropolitan discontinued Ranzau's no-fault benefits, it informed her by letter that "no additional voluntary payments can be made * * * based on the accident reconstruction which shows evidence of a low speed impact that could not have resulted in any injuries from this loss." Thus, Metropolitan initially acknowledged that a low speed impact occurred, and only disputed whether that impact could have caused Ranzau's injuries.

Next, in response to Ranzau's request for mandatory arbitration of her no-fault claim, Metropolitan stated that the arbitrator lacked jurisdiction because Ranzau had brought an action in district court for uninsured motorist benefits that raised the same claims and issues. Again, Metropolitan failed to dispute coverage or the occurrence of an accident, despite the statutory requirement that it set forth "all grounds upon which the claim is denied" and accompany its statement with "all documents supporting denial of the benefits claimed." Minn. R. No-Fault Arb. 5(f).

Finally, in support of its motion to stay the arbitration proceedings, Metropolitan argued that Ranzau had waived her right to arbitrate the no-fault claim because she had brought an action in district court after withdrawing her first request for arbitration and because her former attorney had verbally agreed to litigate her uninsured motorist and no-fault claims in district court. At no point did Metropolitan reserve its right to challenge coverage or notify Ranzau that it intended to raise this coverage defense.

Had Metropolitan timely raised this issue, the district court could have decided it in connection with Metropolitan's motion to stay, before the matter proceeded to arbitration. See Costello v. Aetna Cas. & Sur. Co., 472 N.W.2d 324, 326-37 (Minn. 1991) (when coverage dispute arises on motion to stay arbitration of uninsured motorist claim, district court is authorized to decide that issue before arbitration). Under these circumstances, Metropolitan has waived the right to challenge arbitration of this issue. Cf. Charboneau v. American Family Ins. Co., 481 N.W.2d 19, 22 (Minn. 1992) (insurer waived issue that claimant could not split no-fault claim between wage loss and medical expenses, for purposes of jurisdictional limit under Minn. Stat. § 65B.525, by failing to expressly raise issue); Sorenson v. Kruse, 293 N.W.2d 56, 60 (Minn. 1980) ("An insurer seeking to disclaim liability must do so seasonably and may not delay its decision so long that the insured's rights are prejudiced.").

The district court's order denying Metropolitan's motion to vacate the arbitration award is therefore affirmed.