This opinion will be unpublished and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


Illinois Farmers Insurance Company,


Yvette A. Wubben,

Gerald Flanagan,

Filed December 14, 1999
Klaphake, Judge

Hennepin County District Court
File No. 98-012738

Laura L. Myslis, Gislason & Hunter, L.L.P., Post Office Box 5297, Minnetonka, MN 55343-2297 (for respondent)

George H. Smith, Trawick & Smith, P.A., 330 Second Avenue S., Suite 702, Minneapolis, MN 55401 (for appellant)

Considered and decided by Klaphake, Presiding Judge, Randall, Judge, and Peterson, Judge.

U N P U B L I S H E D   O P I N I O N


Respondent Illinois Farmers Insurance Company (Illinois Farmers) brought this declaratory judgment action against Yvette Wubben, who was insured under a homeowner's policy issued by Illinois Farmers, and appellant Gerald Flanagan, who was injured when he fell down the basement stairs in Wubben's home. Illinois Farmers sought a declaration that it had no duty to defend or indemnify Wubben in Flanagan's underlying tort action because its policy excluded liability coverage for Flanagan's injuries. On cross-motions for summary judgment, the district court granted Illinois Farmers' motion.

We affirm because the district court did not err in determining that (1) Flanagan was a "resident of the residence premises" so as to exclude coverage for his bodily injuries, and (2) Wubben was not engaged in a business pursuit that would create an ambiguity in the contract that would be read against Illinois Farmers.


Summary judgment is appropriately granted when "there is no genuine issue as to any material fact and * * * either party is entitled to judgment as a matter of law." Minn. R. Civ. P. 56.03. Interpretation and construction of insurance contracts are generally questions of law. St. Paul Fire & Marine Ins. Co. v. Seagate Tech., Inc., 570 N.W.2d 503, 505 (Minn. App. 1997). Even a fact issue may be resolved by summary judgment when the underlying, relevant facts are not in dispute and when the parties have "tacitly agreed that there exist no genuine issues of material fact" by submitting cross-motions for summary judgment. American Family Mut. Ins. Co. v. Thiem, 503 N.W.2d 789, 790-91 (Minn. 1993) (undisputed facts support legal conclusion that child was resident of father's household).


The first issue involves whether Flanagan was a "resident of the residence premises" so as to exclude coverage for his injuries. In pertinent part, the policy provided that Illinois Farmers did not cover "[b]odily injury to any resident of the residence premises."

This policy language was recently discussed in Illinois Farmers Ins. Co. v. Neumann, 596 N.W.2d 685, 687 (Minn. App. 1999), review denied (Minn. Sept. 14, 1999). In Neumann, Katina Neumann rented half of a duplex and sublet a room to Barbara Brenny, who was injured when the insured's dog bit her. Neumann submitted a claim under her renter's policy, and Illinois Farmers brought a declaratory judgment action seeking a determination that the policy provided no coverage. In affirming the district court's summary judgment to Illinois Farmers, this court reasoned that the policy language, "resident of residence premises," is broader than "resident of a household" and is intended to apply to unrelated persons who live together. This court further determined that "intent to live in a residence and physical presence there are of primary importance in determining whether a person is a resident of a residence premises." Id. at 688. This court concluded that Brenny was a resident because she paid rent and spent more time living at the duplex than at any other place, even though she had lived there for only two months, did not receive mail there, often returned to her parents' home on days off, and listed her parents' address as her residence on her driver's license. Id. at 688.

The facts of this case are even stronger in showing that Flanagan was a resident of the residence premises at the time he was injured. Flanagan had been renting a room in Wubben's home since 1989. He lived there exclusively and did not spend time elsewhere. He received his mail there, ate his meals there, and spent the holidays with Wubben and her family. Thus, Flanagan was a resident of the premises at the time he was injured. Although Flanagan argues that the issue of whether or not he was a resident of the premises is a fact issue inappropriate for summary judgment, Neumann demonstrates that when material facts are undisputed, summary judgment is appropriate. Id. at 687.


The next issue involves whether Wubben's policy is ambiguous so as to be read against the insurer, Illinois Farmers. See Columbia Heights Motors, Inc. v. Allstate Ins. Co., 275 N.W.2d 32, 36 (Minn. 1979) (ambiguity in insurance contract resolved against insurance company as drafter). When coverage has been excluded in parts of an insurance contract, an exception to another applicable exclusion that is in conflict with the other exclusions may create an ambiguity in the contract. Moorhead Mach. & Boiler Co. v. Employers Commercial Union Ins. Co., 285 N.W.2d 465, 467-68 (Minn. 1979). When such an ambiguity exists, coverage may be conferred on an insured by the exception to the exclusion. Id.

Flanagan argues that the policy contains an exception when a homeowner rents out a room, and that this exception conflicts with the exclusion for bodily injury to a resident of the residence premises. In pertinent part, the policy provides:

We do not cover bodily injury, property damage or personal injury which:

1. arises from or during the course of business pursuits of an insured.

But we do cover:

a. that part of a residence of yours which is rented or available for rent:

* * *

(2) to no more than two roomers or boarders for sole use as a residence.

The district court in this case recognized that an ambiguity might arise under certain fact situations, but concluded that this case presented no conflict or ambiguity because Wubben was not renting to Flanagan as part of a business pursuit.

The above-quoted language is part of the business pursuits exclusion of the policy. The policy defines "business pursuits" as "any full or part-time trade, profession, or occupation." Minnesota courts have defined a business pursuit as an activity that is regularly engaged in with intent to generate profits or financial gain. Allied Mut. Cas. Co. v. Askerud, 254 Minn. 156, 163, 94 N.W.2d 534, 539-40 (1959); Reinsurance Ass'n of Minn. v. Patch, 383 N.W.2d 708, 711 (Minn. App. 1986).

In this case, the undisputed facts establish that Wubben viewed the rent Flanagan paid as reimbursement for her groceries and utilities, not as profit or financial gain. Until recently, Wubben did not declare these payments as income on her tax returns. Moreover, Wubben is employed outside the home. Given these facts, the district court did not err in concluding that because Wubben was not engaged in a business pursuit when she rented a room to Flanagan, the exclusion was inapplicable. Cf. North Star Mut. Ins. Co. v. Ziebarth, 386 N.W.2d 238, 240 (Minn. 1986) (where policy provision not triggered by facts of case, no need to determine whether coverage passed under that provision).

The district court's grant of summary judgment to Illinois Farmers is affirmed.