This opinion will be unpublished and

may not be cited except as provided by

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




Mark Patch,



American Summit Insurance Company,


Filed January 21, 1997


Harten, Judge

Beltrami County District Court

File No. C4-95-1136

Darrell G. Carter, Attorney at Law, 410 Minnesota Avenue, P.O. Box 875, Bemidji, MN 56601-0875 (for Appellant)

John M. Colosimo, Colosimo, Patchin, Aronson & Kearney, Ltd., 301 Chestnut Street, Virginia, MN 55792 (for Respondent)

Considered and decided by Harten, Presiding Judge, Kalitowski, Judge, and Foley, Judge.[*]



Appellant Mark Patch, the named insured on a homeowner's insurance policy covering a vacant house destroyed by fire, brought an action against respondent American Summit Insurance Co. for denial of his claim under the policy. Both parties brought cross-motions for summary judgment; the district court granted respondent's motion. We affirm.


In May 1993, appellant's parents and his brother purchased a house for $3,000 with plans to renovate it for appellant. The house was virtually gutted; it lacked a heating system, sheetrock, electrical wiring and plumbing, but appellant and his family intended to install these items over the course of several months. Appellant and his mother contacted Arnold Westling, an independent insurance agent, to insure the vacant house. Based on information provided by appellant and his mother, Westling completed an insurance application to be submitted to respondent.

The application listed appellant as the named insured. It also indicated that (1) a forced air oil furnace was installed, (2) the house was rewired in 1993, (3) a new roof was installed in 1988, (4) the purchase price was $15,000, and (5) the approximate value of the house was $20,000 with a replacement cost of $40,000. After Westling completed the insurance application, appellant reviewed and signed it. Subsequently, respondent issued a policy insuring the property for $35,000.

In March 1994, the vacant house burned down. The apparent cause was an electrical short caused by a portable space heater powered by an extension cord from a nearby home. Appellant submitted a claim for the full value of the house as stated on the application, plus $6,000 for personal property; respondent denied this claim. Appellant brought an action claiming that respondent wrongfully denied his claim. On cross-motions for summary judgment, the district court granted judgment for respondent insurer without specifying a basis for its decision.[1]


On appeal from summary judgment, we ask two questions: (1) whether there are any genuine issues of material fact and (2) whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). We view the evidence in the light most favorable to the non-prevailing party. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993).

Appellant argues that the district court erred in granting respondent's motion for summary judgment because a genuine issue of material fact existed. Appellant contends that whether his insurance application contained a misrepresentation that was material and increased the risk of loss was a question of fact to be determined by the jury. Specifically, appellant asserts that the jury must determine who provided the false information on the insurance application-appellant and his mother or Westling, the insurance agent. We disagree.

Minnesota law provides:

No oral or written misrepresentation made by the assured, or in the assured's behalf, in the negotiation of insurance, shall be deemed material, or defeat or avoid the policy, or prevent its attaching, unless made with intent to deceive and defraud, or unless the matter misrepresented increases the risk of loss.

Minn. Stat. § 60A.08, subd. 9 (1996) (emphasis added). In construing this language, the supreme court has held that if a material misrepresentation increases the risk of loss, the policy is avoided regardless of the intent with which it was made. Preferred Risk Mut. Ins. Co. v. Anderson, 277 Minn. 342, 344, 152 N.W.2d 476, 479 (1967) (quoting Nielsen v. Mutual Serv. Cas. Ins. Co., 243 Minn. 246, 249, 67 N.W.2d 457, 459 (1954)). The burden of proving that a misrepresentation increased the risk of loss is on the insurer. Craigmile v. Sorenson, 248 Minn. 286, 295, 80 N.W.2d 45, 51 (1956). Generally, whether a misrepresentation on an insurance application increased the risk of loss is a question of fact for the jury. Id.; see also Mack v. Pacific Mut. Life Ins. Co., 167 Minn. 53, 57, 208 N.W. 410, 412 (1926) (stating that usually it is for the jury to decide whether a misrepresentation increased the risk of loss). Where the evidence is conclusive, however, the district court may determine, as a matter of law, that a misrepresentation increased the risk of loss. Craigmile, 248 Minn. at 295, 80 N.W.2d at 51; Mack, 167 Minn. at 57, 208 N.W. at 412.

Here, it is undisputed that appellant's insurance application contained false information. Appellant and his mother acknowledged in their testimony that the application contained false information (i.e., the installation of a forced air furnace, electrical rewiring in 1993, new roof in 1988, a purchase price of $15,000). Appellant also testified that he reviewed the application before signing it. Appellant, however, maintains that the source of this false information needs to be determined by a jury. Appellant's assertion fails because the language of Minn. Stat. § 60A.08, subd. 9 applies to misrepresentations "made by the assured, or in the assured's behalf." Thus, the source of these misrepresentations is irrelevant; the falsity of the responses is the crucial, undisputed fact.

Appellant contends that because Westling completed the application and recorded the false information, respondent is bound by the acts of its agent and cannot avoid the policy. See Pomerenke v. Farmers Life Ins. Co., 228 Minn. 256, 260, 36 N.W.2d 703, 706 (1949) (where insured truthfully gives correct answers, but application is incorrectly completed by agent without fault, knowledge, or collusion of insured, then agent's acts are deemed those of insurer and insurance company cannot avoid policy). Unlike the insured in Pomerenke, however, here appellant reviewed the application before signing it and knew that the information was false. Where an agent records incorrect information on an application and the insured knows that the information is false, the insurer will not be bound by the acts of its agent and may avoid the policy. Oredson v. Woodmen of the World Life Ins. Soc., 211 Minn. 442, 445, 1 N.W.2d 413, 414 (1941) (citations omitted); Mattson v. Modern Samaritans, 91 Minn. 434, 436-37, 98 N.W. 330, 331 (1904); see Steigerwalt v. Woodhead Co., 186 Minn. 558, 561-62, 244 N.W. 412, 414 (1932) (stating where an agent misrepresents a fact in an application and the applicant knows of the misrepresentation, a principal is not charged with the agent's fraudulent act). We conclude that the rule in Mattson applies to the instant case.

The remaining inquiry is whether the district court erred in determining as a matter of law that the misrepresentations contained in appellant's application increased respondent's risk of loss.

The concept of "risk of loss" refers to the likelihood that the insurance company will be liable in the future * * *.

Proprietors Ins. Co. v. Northwestern Nat'l Bank of Minneapolis, 374 N.W.2d 772, 777 (Minn. App. 1985) (citing Preferred Risk, 277 Minn. at 350, 152 N.W.2d at 483). In the context of the instant case, "risk of loss" refers to the likelihood of respondent's future liability for fire loss.

Respondent presented an affidavit by its general counsel. The affidavit explained that the absence of a central heating system made it more likely that an alternative heating source (e.g., wood stove or a portable electric heater) would be used and would increase the risk of fire loss. Additionally, the lack of an electrical wiring system meant that an alternative electrical source would be used, thereby increasing the risk of fire. Appellant produced no evidence to the contrary. We believe that the affidavit constituted a sufficient basis to support a ruling as a matter of law that the misrepresentations increased respondent's risk of loss. Accordingly, we conclude that the district court lawfully granted respondent's motion for summary judgment.

Based on the foregoing, we do not reach respondent's alternative argument on insurable interest.


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

[ ]1 We note that findings of fact and conclusions of law are not required for summary judgment decisions. Minn. R. Civ. P. 52.01.