Minn. Stat. § 65B.22

Burgraff v. Aetna Life & Casualty Co. · 1984 2 citations

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Owens v. Federated Mutual Implement & Hardware Insurance Co. · 1983 1 citation

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Pfeffer v. State Automobile & Casualty Underwriters Insurance Co. · 1980 1 citation

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Holman v. All Nation Insurance Co. · 1980 1 citation

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Petrich Ex Rel. Lee v. Hartford Fire Insurance Co. · 1988 2 citations

I. At the time of the accident in June, 1983, the Minnesota No-Fault Act provided: (3) "Uninsured motor vehicle" means any motor vehicle or motorcycle for which a plan of reparation security meeting the requirements of sections 65B.41 to 65B.71 is not in effect. Minn. Stat. § 65B.49, subd. 4(3) (1983) (emphasis added). Hartford admits that its policy language is more restrictive than this statutory definition because it excludes from the definition of uninsured motor vehicle any *560 vehicle "[o]wned by or furnished or available for the regular use of you or any family member." In finding the restrictive definition invalid and granting summary judgment, the trial court reasoned: Minnesota courts have consistently held that first party coverage, such as uninsured motorist benefits, follows the person regardless of where the person is located when injured. See, Nygaard v. State Farm, 301 Minn. 10, 221 N.W.2d 151 (1974), American Motorist Ins. Co. v. Sarvela, 327 N.W.2d 77 (Minn.1982); DeVille v. State Farm Automobile Ins. Co., 367 N.W.2d 574 (Minn.App.1985). In Nygaard v. State Farm, a pre-No-Fault case, the Minnesota Supreme Court specifically held that a policy exclusion concerning uninsured motorist coverage, similar to the exclusion at issue in the present case, impermissibly narrowed the geographic scope of the statutorily required coverage. The later case of Iverson v. State Farm Automobile Ins. Co., 295 N.W.2d 573 (Minn.1980) upheld the Nygaard rationale and applied it to questions concerning the No-Fault Act. Application of the Nygaard and Iverson rationale to the present case dictates that the insurance policy exclusion must be ruled invalid. On appeal, the parties discuss the cases relied upon by the trial court more thoroughly. In Iverson v. State Farm Mutual Automobile Insurance Co., 295 N.W.2d 573 (Minn.1980), the deceased owned two cars, only one of which was insured. He died in an accident involving that uninsured vehicle. State Farm denied his widow's claim for economic loss benefits under a policy provision which excluded payment of such benefits when the insured was injured in an owned, but uninsured vehicle. Id. at 574. The supreme court held the provision to be invalid as "an unwarranted geographic limitation of statutorily required coverage." Id. at 575-76. In its decision, the court reaffirmed the rationale and holding of Nygaard v. State Farm Automobile Insurance Co., 301 Minn. 10, 221 N.W.2d 151 (1974): Admittedly, there are differences between uninsured motorist coverage and coverage for economic loss benefits; but because we have held that the basic rationale of Nygaard — uninsured motorist coverage protects people not vehicles — also applies to coverage for economic loss benefits, Nygaard is good authority for invalidating the exclusion in this case. Iverson, 295 N.W.2d at 576 (citation omitted). Accord Toomey v. Krone, 306 N.W. 2d 549, 550 (Minn.1981). Hartford nevertheless argues that Iverson and Nygaard have been modified by cases involving underinsured motorist coverage.[1] In Myers v. State Farm Mutual Automobile Insurance Co., 336 N.W.2d 288 (Minn.1983), the deceased passenger was involved in a one-car accident. The deceased's trustee collected the liability policy limits of the driver and the liability policy limits of the owner of the involved automobile. The trustee then attempted to collect underinsured motorist benefits under the owner's policy, which contained an exclusion for any vehicle "owned by or furnished or available for the regular use of you or any family member." Id. at 290 (emphasis omitted). Upholding the exclusion, the supreme court reasoned: [T]he decedent passenger's heirs have already collected under the liability coverage of the insurer of the [owner's] car. To now collect further under the same insurer's underinsured motorist coverage would be to convert the underinsured motorist coverage into third-party insurance, treating it essentially the same as third-party liability coverage. The policy definition defining an "underinsured motor vehicle" to exclude a vehicle owned by or regularly furnished or available to the named insured properly prevents this conversion of first-party coverage into third-party coverage. Id. at 291. Myers has been followed by this court. In Eisenschenk v. Millers' Mutual Insurance Ass'n, 353 N.W.2d 662 (Minn.Ct.App. *561 1984), the insured, a passenger in his father's car, was involved in a one-vehicle accident. After collecting the liability limits on the involved automobile, he attempted to collect underinsured motorist benefits under that same policy and under a policy covering a non-involved vehicle owned by his father. Citing Myers, this court found that a family exclusion in the policy was valid and that the insured could not convert underinsured motorist coverage to liability insurance. Eisenschenk, 353 N.W.2d at 665.[2] In Linder v. State Farm Mutual Automobile Insurance Co., 364 N.W.2d 481 (Minn.Ct.App.1985), pet. for rev. denied (Minn. May 1, 1985), a minor was injured in a car driven by her brother and owned by her father. She settled for the full liability limits carried by her father on the involved vehicle. Recovery was then sought under separate policies issued to her father covering two non-involved vehicles. Enforcing exclusionary provisions in those policies, this court stated that "to avoid [those exclusionary clauses] would be to allow her to convert inexpensively-purchased underinsured motorist coverage into liability coverage. This would be contrary to the courts' decisions in Myers and Eisenschenk." Linder, 364 N.W.2d at 483. We believe that the reasoning of Myers, Eisenschenk, and Linder is not controlling in a case involving uninsured motorist coverage. Unlike uninsured motorist coverage, underinsured motorist coverage was not statutorily mandated in 1983 and there was no definition of an underinsured motor vehicle in the No-Fault Act at that time. This court has characterized the Myers line of cases as a "carefully carved-out exception" having limited application. DeVille v. State Farm Mutual Automobile Insurance Co., 367 N.W.2d 574, 576 (Minn. Ct.App.1985), pet. for rev. denied (Minn. July 26, 1985). In DeVille, the injured person was a passenger on her husband's motorcycle when he drove into the back of a stopped car. The injured party collected the liability limits from the policy covering the motorcycle, and then claimed underinsured benefits from her own personal car insurance policy. Her claim was denied based on the same exclusionary definition of underinsured motor vehicle. Under those facts, this court invalidated that definition: The exception that has emerged is clearly limited to circumstances where a plaintiff is attempting to convert underinsured motorist (first-party) coverage into liability (third-party) coverage. In all three of the cases [Myers, Eisenschenck, Linder] the plaintiff had first collected liability limits from the tortfeasor and then attempted to collect underinsured motorist benefits on the same or additional policies carried by the tortfeasor himself. The courts found this to be an impermissible conversion of the underinsured motorist coverage purchased by the tortfeasor into what was, in effect, additional liability limits for that tortfeasor. We cannot extend that rationale to the facts of this case. DeVille, 367 N.W.2d at 577. Under DeVille, an impermissible conversion occurs when an injured person collects first as a third party under the liability limits of a policy covering the tortfeasor and then attempts to collect as a first party under the same policy or other policies covering the tortfeasor. This type of conversion is virtually impossible in a one-car accident involving an uninsured vehicle because the injured party will never be able to collect both liability coverage and uninsured motorist coverage and will never be able to collect both as a third party and as a first party. Hartford argues that if the exclusion in this case is held invalid, multiple car families will be encouraged to insure only one car. An identical argument was rejected in Nygaard, where the supreme court stated that the uninsured motorist statute placed no geographic limits on coverage and does not purport to tie protection against uninsured motorists to occupancy of the *562 insured vehicle. Since our statute requires this broad coverage "for the protection of persons," we must leave to the legislature the sanctioning of any exceptions dependent on the location of an insured.[3] Id. 301 Minn. at 19, 221 N.W.2d at 156 (quoting Minn. Stat. § 65B.22, subd. 3 (1974)).

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