This opinion will be unpublished and

may not be cited except as provided by

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




Western National Mutual Insurance Company,



Steven Decker, et al.,


Filed January 14, 1997


Toussaint, Chief Judge

Olmsted County District Court

File No. C4-95-2103

Dan T. Ryerson, James T. Martin, Gislason, Martin & Varpness, P.A., 7600 Parklawn Avenue South, Suite 444, Edina, MN 55435 (for appellant)

Charles J. Suk, Suk Law Firm, Ltd., Five East Center Street, Ste. 200, Rochester, MN 55904 (for respondent)

Considered and decided by Crippen, Presiding Judge, Toussaint, Chief Judge, and Willis, Judge.


TOUSSAINT, Chief Judge

Western National Mutual Insurance Co. (Western National) challenges the district court's judgment granting homeowner's insurance coverage for Steven Decker.

The facts are largely undisputed: (1) before marrying Steven Decker, April Decker purchased a house and insured it through Western National, (2) after their marriage, April Decker added Steven Decker as a named insured on the homeowner's insurance policy (the policy), (3) several years later Steven Decker moved out of the house, (4) although April Decker contacted her insurance agent, Steve Johnson, to have Steven Decker removed from the policy as a named insured, it was not done, (5) around that same time a Domestic Abuse Order for Protection was issued preventing either party from changing the couple's insurance coverage, and (6) in May 1994, the policy was renewed listing "Decker Steve & April Ruth" as named insureds.

In July 1994, Steven Decker was involved in an incident in which he allegedly shot James Bicknese in the foot. Bicknese brought an action against Steven Decker to recover for personal injuries. Western National became aware of Bicknese's action and brought this declaratory judgment action seeking a determination as to whether Steven Decker was covered by the policy. Further, Western National sought reformation of the policy to delete Steven Decker as a named insured. The district court declined to reform the policy and concluded Steven Decker was a named insured.

Western National challenges the order and judgment granting homeowner's insurance coverage to respondents Steven Decker and James Bicknese. Because the district court did not err in concluding (1) there were no genuine issues of material fact, and (2) Steven Decker was a named insured on the policy, we affirm.


On appeal from summary judgment, this court asks (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) (citing Offerdahl v. University of Minn.Hosp. & Clinics, 426 N.W.2d 425, 427 (Minn. 1988)). We must view the evidence in a light favorable to the non-prevailing party. Fabio v. Bellomo, 504 N.W.2d 758, 761 (Minn. 1993) (citing Abdullah, Inc. v. Martin, 242 Minn. 416, 424, 65 N.W.2d 641, 646 (1954)). Where the material facts are not in dispute we need not defer to the district court's application of the law. See Hubred v. Control Data Corp., 442 N.W.2d 308, 310 (Minn. 1989).

Western National argues (1) the district court erred by concluding (a) April Decker could not unilaterally delete Steven Decker from the policy and (b) Steven Decker had an insurable interest in the house, (2) the district court abused its discretion when it declined to delete Steven Decker as an insured on the policy, and (3) the district court erred by not reforming the policy because April Decker attempted to delete Steven Decker from the policy before the order for protection or dissolution summons prevented her from changing the couple's insurance coverage.


Western National contends that the district court misinterpreted State Farm Fire and Cas. Co. v. McPhee, 336 N.W.2d 258 (Minn. 1983). The district court cited McPhee for the proposition that spouses do not lose their status as named insureds under homeowner's policies merely because they are separated from their spouses. Western National attempts to distinguish McPhee by noting in that case the husband and wife were joint owners, both had applied for the insurance coverage and signed the application, and no subsequent request to remove wife from the policy was ever made. However, the essential comparison to draw from McPhee is that, as in this case, the estranged spouse remained a named insured on the policy because of the declaration page.

The homeowner's policy language defining named insureds in McPhee is substantially the same as here. The policy in this case contained a section entitled "Policy Conditions," which described the procedure for cancellation or nonrenewal of the policy:

Cancellation and Nonrenewal-- You may cancel this policy by returning the policy to us or by giving us written notice and stating at what future date coverage is to stop.

(Emphasis in original.) The policy gave the following definition to the words "you" and "your":

The words you and your mean the person or persons named on the Declarations and your spouse if a resident of your household. The words we, us and our mean the company providing this insurance.

(Emphasis in original.) Additionally, here, as in McPhee, at all relevant times the declaration page of the policy with Western National listed both husband and wife as named insureds.

This court interprets the policy's definition of "you" to give each named insured an independent right of cancellation as to their own coverage. April Decker could not exercise Steven Decker's separate and distinct contractual right to cancel his own coverage. Therefore, the district court concluded correctly that April Decker had no right to delete Steven Decker from the policy.

Additionally, Western National contends Steven Decker had no "insurable interest" because he did not have actual or constructive possession of the house once he moved out. An individual, however, need not have possession to have an insurable interest in property. Crowell v. Delafield Farmers Mut. Fire Ins. Co., 463 N.W.2d 737, 738 (Minn. 1990) (quoting Banner Laundry Co. v. Great E. Cas. Co., 148 Minn. 29, 34, 180 N.W. 997, 999 (1921)). Rather, Minnesota courts apply the pecuniary loss test to determine whether a party has an insurable interest. Id. at 739 (citing Nathan v. St. Paul Mut. Ins. Co., 243 Minn. 430, 440, 68 N.W.2d 385, 392 (1955) ("insurable interest exists if insured will suffer loss regardless of title, lien, or possession")). Here, Steven Decker contributed to mortgage and insurance payments during the couple's marriage, thereby acquiring an interest in the house. Therefore, we conclude Steven Decker had an insurable interest even though he had moved out of the house.


Western National asserts the district court erred by not reforming the insurance policy because it claims a mutual mistake of law prevented April Decker from deleting Steven Decker. Generally, a written instrument may be reformed by the district court if:

(1) there was a valid agreement between the parties expressing their real intentions, (2) the written instrument failed to express the real intentions of the parties, and (3) this failure was due to a mutual mistake of the parties, or a unilateral mistake accompanied by fraud or inequitable conduct by the other party.

Nichols v. Shelard Nat'l Bank, 294 N.W.2d 730, 734 (Minn. 1980) (citing Theros v. Phillips, 256 N.W.2d 852, 857 (Minn. 1977); Fritz v. Fritz, 94 Minn. 264, 102 N.W. 705 (1905)).

Insurance policies may be reformed when the evidence of mutual mistake is clear, persuasive, and convincing. Mosiman v. Rapacz, 250 Minn. 464, 469, 84 N.W.2d 898, 902 (1957). Whether to reform a contract is discretionary with the district court. 76 C.J.S. Reformation of Instruments § 15 (1994); see also First Interstate Equip. Leasing of Iowa, Inc. v. Fielder, 449 N.W.2d 100, 102 (Iowa Ct. App. 1989) (remedy of reformation is not absolute but lies within discretion of district court). On appeal, matters within the district court's discretion are not overturned except in the case of a clear abuse of discretion. Kilowatt Org. v. Department of Energy, Planning & Dev., 336 N.W.2d 529, 533 (Minn. 1983).

Western National asserts a mutual mistake regarding the law occurred in this case. To wit, its agent, Johnson, mistakenly believed April Decker could not delete Steven Decker until the divorce became final and April Decker mistakenly accepted Johnson's view of the law. However, Johnson testified he did not know whether the law prevented April Decker from deleting Steven Decker from the policy until dissolution of their marriage. Johnson testified he told April Decker, "I'm not sure, but I think we should leave his name on there until the final divorce is through." April Decker then accepted Johnson's advice not to delete Steven Decker until after the divorce became final. This does not constitute a mutual mistake of law because neither party knew what the law required. Additionally, there was no valid agreement between Johnson and April Decker expressing their real intention to delete Steven Decker, as required by Nichols, 294 N.W.2d at 734. Rather, the policy reflected the true intention of Johnson and April Decker (i.e., that Steven Decker remain a named insured on the policy). Accordingly, we conclude the district court did not abuse its discretion by declining to reform the policy.


Western National contends that April Decker's call to Johnson should have removed Steven Decker from the homeowner's policy before the court order prevented her from doing so. Because the district court's refusal to reform the contract was not an abuse of discretion, Steven Decker remained a named insured at all relevant times and this issue is moot.