Minn. Stat. § 65B.48

Minnesota Statutes

Source: 2025 Minnesota Statutes. For the official text, see revisor.mn.gov.

Citing Cases (73)

Minnesota Supreme Court

Meyer v. Nwokedi · 2010 2 citations

+ 2 more citations in this opinion.

State Farm Mutual Automobile Insurance Co. v. Cincinnati Insurance Co. · 2003 2 citations

+ 2 more citations in this opinion.

Mutual Service Casualty Insurance Co. v. League of Minnesota Cities Insurance Trust · 2003 2 citations

+ 2 more citations in this opinion.

Loven v. City of Minneapolis · 2002 2 citations

+ 2 more citations in this opinion.

Progressive Specialty Insurance Co. v. Widness Ex Rel. Widness · 2001 8 citations

+ 8 more citations in this opinion.

Hertz Corp. v. State Farm Mutual Insurance Co. · 1998 8 citations

OPINION GARDEBRING, Justice. This case involves the application of the Minnesota No-Fault Act in the context of rental cars. Specifically, we are asked to determine whether a self-insured rental car agency may meet its obligations under the Minnesota No-Fault Automobile Insurance Act, Minn. Stat. §§ 65B.41-.71(1996) ("No-Fault Act"), by providing liability coverage only in the event that the renter or operator of the rented vehicle does not have other liability coverage arising from his or her own automobile policy. Jeffrey Powers rented an automobile from Hertz in August 1994. While driving the rental car, he was involved in an accident, which gave rise to negligence claims against him for property damage and personal injury. At the time of rental, Powers declined to purchase the Liability Insurance Supplement (LIS), which, for an additional fee, provided full liability coverage for automobile renters. The rental agreement provided that: If you do not purchase liability insurance supplement (LIS) * * * at the commencement of the rental and an accident results from the use of the car, your insurance and the insurance of the operator of the car will be primary. This means that Hertz will not grant any defense or indemnity protection under this paragraph if either you or the operator of the car are covered by any valid and collectible automobile liability insurance, whether primary, excess or contingent, with limits at least equal to the minimum required by the applicable state financial responsibility law. If neither you nor the operator of the car have such insurance, Hertz will grant you and any authorized operator of the car limited protection under the terms and conditions stated in subparagraphs 10(a) above and 10(c) below. The intended import of this provision was apparently to make the Hertz self-insurance coverage effective only if the renter or operator of the rented vehicle had no automobile liability insurance. *688 Powers had personal automobile liability insurance through State Farm for coverage on his 1985 Ford Bronco II. Powers renewed his State Farm policy on March 22, 1994, for a six-month term and the policy was in effect at the time of the accident. The State Farm policy, which has liability coverage with limits at $50,000 per person and $100,000 per occurrence, provided: "The liability coverage extends to the use, by an insured, of a * * * non-owned car." The policy further stated that "[i]f a * * * non-owned car has other vehicle liability coverage on it, then this coverage is excess." Hertz brought a declaratory judgment action against State Farm, asserting that State Farm has the primary duty to defend and indemnify Powers against the claims arising from the accident involving the rented vehicle. In granting Hertz's motion for summary judgment, the trial court held that the Hertz rental agreement was a valid and enforceable contract that did not provide Powers with liability coverage at the time of the accident. It also held that the Hertz rental agreement did not violate the No-Fault Act because it guaranteed liability coverage if the renter or operator was not insured. It concluded that Minn. Stat. § 65B.49, subd. 3(3)(d), the statute dictating priority of coverage, did not apply because Hertz did not provide liability coverage at all on these facts. The trial court further concluded that Minn. Stat. § 65B.49, subd. 3(3)(d) did not apply because it took effect on August 1, 1994, after the March 1994 renewal date of the Powers' State Farm policy. Finally, the trial court held that State Farm, and not Hertz, was responsible for defending and indemnifying Powers for the claims arising out of the accident. The court of appeals affirmed the trial court, holding that the Hertz rental agreement satisfied the purpose of the No-Fault Act because Hertz provided liability coverage in the event that the renter or operator did not have other automobile liability insurance. Because the court of appeals held the Hertz rental agreement was valid and enforceable, it did not reach the issue of priority of coverage under the No-Fault Act. State Farm now appeals, arguing that the Hertz rental agreement violates the No-Fault Act, because Hertz, a self-insurer, was required to maintain liability coverage on the vehicles that it owns. We reverse. In our review of the summary judgment, we must determine "whether there are any genuine issues of material fact and whether the trial court erred in its application of the law." Interstate Fire & Cas. Co. v. Auto-Owners Ins. Co., 433 N.W.2d 82, 84 (Minn.1988). Because the facts are undisputed, this case raises only issues of statutory and contract interpretation, which are questions of law subject to de novo review. Garrick v. Northland Ins. Co., 469 N.W.2d 709, 711 (Minn.1991). The No-Fault Act requires that every Minnesota automobile owner maintain a "plan of reparation security," with specific, statutorily set minimum benefits, including liability coverage. Minn. Stat. § 65B.48, subd. 1; see also Minn. Stat. § 65B.49, subd. 3(1) (stating the minimum benefits required). That obligation may, of course, be met either by the purchase of a commercial automobile liability insurance policy under Minn. Stat. § 65B.48, subd. 2, or by qualification as a self-insured entity, under Minn. Stat. § 65B.48, subd. 3. In this case, Hertz met its obligation by seeking and receiving the authorization of the commissioner of commerce to operate as a self-insured entity. In seeking that approval, Hertz agreed to "discharge fully and promptly all payments and obligations which are now due or shall become due under the provisions of the Minnesota No-Fault Automobile Insurance Act and amendments thereto." State Farm asserts that Hertz's rental agreement violates the No-Fault Act because it allows Hertz to provide "contingent" liability coverage on vehicles it owns, although Hertz is statutorily required, as a self-insured owner of the vehicles, to maintain liability coverage, regardless of whether the renter or operator of a rented vehicle is otherwise insured. In response, Hertz argues that there is no violation of the No-Fault Act because there are no circumstances under which a Hertz vehicle would be uninsured. We disagree. A self-insured car rental agency does not meet its obligations *689 as an automobile owner under the No-Fault Act by thrusting upon the renter its responsibility to provide liability coverage that is, by providing liability coverage only in the event that the renter is without liability coverage. The statutory provisions at issue Minn. Stat. §§ 65B.48, subd. 1 and 65B.49, subd. 3(2) do not on their face require that an automobile owner maintain coverage that is not contingent upon the presence of other coverage. Nevertheless, it is inconsistent with the general purpose of the No-Fault Act to read the statute in the manner advocated by Hertz. Hertz's interpretation of the Act would create a practical exemption to the broad statutory mandate that all automobile owners carry liability insurance, an exemption nowhere evident in the language of the statute. Further, the distinction relied upon by Hertz and the court of appeals, that the statutory requirements on Hertz are different because it is self-insured, is contrary to our reading of the NoFault Act in other cases. We have said that "[s]elf-insurance is the functional equivalent of a commercial insurance policy. * * * The purpose of either form of insurance is to compensate victims appropriately. The certificate filed with the commissioner [of commerce] is the functional equivalent of an insurance policy." McClain v. Begley, 465 N.W.2d 680, 682 (Minn.1991). Further, in his concurring opinion in McClain, Justice Simonett concluded that, in considering the application of the No-Fault Act to self-insureds, we should "treat the self-insurer as if it had purchased a policy of auto liability insurance for each of its vehicles with itself as the named insured. Such a policy, if purchased, would contain an omnibus clause extending coverage to permissive drivers as additional unnamed insureds." Id. at 684. Applying this conceptual approach here, one could identify Powers as a permissive driver of the rented vehicle, whose liability would be fully covered by virtue of the omnibus clause.[1] Further, we find no merit in Hertz's argument that this construction of the No-Fault Act violates its freedom of contract. Legislation may impact contractual obligations, if certain conditions are met. Generally speaking, "[t]he federal constitutional prohibition against contract impairment, U.S. Const., art. I, § 10, cl. 1, has been construed to mean that the state reserves some power to modify contract terms when the public interest requires." Christensen v. Minneapolis Mun. Employees Retirement Bd., 331 N.W.2d 740, 750 (Minn. 1983). The legislature, therefore, can alter contract terms by enacting statutes as long as the legislation is "necessary to meet a broad and pressing social or economic need, if the legislation is reasonably adopted for the solution of the problem involved, and if it is not over broad or over harsh." Id. (quoting White Motor Corp. v. Malone, 599 F.2d 283, 287 (8th Cir.1979)). The purposes of the No-Fault Act are spelled out in Minn Stat. § 65B.42: to "relieve the severe economic distress of uncompensated victims"; to prevent overcompensation; to assure prompt payment; to "ease the burden of litigation"; and to correct imbalances and abuses in the automobile accident liability system. That these are legitimate public purposes is unquestionable, and a statutory scheme the linchpin of which is a requirement that each automobile owner carry liability coverage is not either harsh or overly broad. This court has stated, in the context of a No-Fault Act case, that "contract provisions which conflict with statutory law will not be enforced." Roering v. Grinnell Mut. Reinsurance Co., 444 N.W.2d 829, 833 (Minn. 1989). We have also stated that "an insurer's liability is governed by the contract between the parties only as long as coverage *690 required by law is not omitted and policy provisions do not contravene applicable statutes." Streich v. American Family Mut. Ins. Co., 358 N.W.2d 396, 399 (Minn.1984) (emphasis added). We conclude that the provision of the rental agreement purporting to limit Hertz' liability obligation to situations in which there is no other coverage, contravenes the No-Fault Act and is, therefore, unenforceable.[2] Because we hold that Hertz's attempted limitation of coverage is unenforceable, we must determine which insurance coverage is primary in this case. We begin with the consideration of Minn. Stat. § 65B.49, subd. 3(3)(d), a statutory amendment to the No-Fault Act which became effective on August 1, 1994. See Minn. Stat. § 645.02 (1996). Minn. Stat. § 65B.49, subd. 3(3)(d) (1996) states that: (3) Every plan of reparation security shall be subject to the following provisions which need not be contained therein: * * * * (d) Except as provided in subdivision 5a,[3] a residual liability insurance policy shall be excess of a nonowned vehicle policy whether the nonowned vehicle is borrowed or rented, or used for business or pleasure. A nonowned vehicle is one not used or provided on a regular basis. Hertz argues that Minn. Stat. § 65B.49, subd. 3(3)(d) does not apply to the instant case because (1) Powers' State Farm policy, which was effective at the time of the accident, was renewed prior to the effective date of this statutory amendment and (2) the statutory amendment only applies to insurance "policies" and not to self-insurers. Hertz further argues that State Farm's "other insurance" provision is not applicable here, because, as a self-insurer, its reparation security is simply not "other insurance." For the second proposition, Hertz asserts that "a certificate of self-insurance is a contract with the state to protect the public, whereas an automobile liability insurance policy is a contract with the insured to provide indemnity." State Farm argues that the statutory amendment does apply because, according to Hertz's application for self-insurance, Hertz obligated itself to "discharge fully and promptly all payments and obligations which are now due or shall become due under the provisions of the Minnesota No-Fault Automobile Insurance Act and amendments thereto." State Farm further argues that self-insurance is the equivalent of an insurance policy, and the statutory amendment cannot be found inapplicable simply because it uses the word "policy," rather than the broader term "plan of reparation security." We have stated that "the general rule is that upon each renewal an entirely new and independent contract of insurance is created and is governed by the laws in effect on the date of renewal." Hauer v. Integrity Mut. Ins. Co., 352 N.W.2d 406, 408 (Minn. 1984). However, "[o]n each reinstatement or renewal of policies, any statutes or amendments pertaining to such policies and enacted after their issuance are incorporated into the new policies." Id. (quoting Taylor v. American Nat'l Ins. Co., 264 Minn. 21, 25, 117 N.W.2d 408, 411 (1962)). Therefore, Hertz is incorrect in its assertion that Minn. Stat. § 65B.49, subd. 3(3)(d) does not apply because it became effective after Powers renewed his State Farm policy. State Farm is correct in its contention that Hertz's application for self-insurance required that Hertz comply with the No-Fault Act in its entirety and with any amendments enacted in the future. Also, as previously stated, neither this court nor the legislature has provided that self-insured entities should be treated any differently from other insurers, and for that reason Hertz's assertion that the statutory amendment only applies to third-party insurers is mistaken. Therefore, we conclude that Minn. Stat. § 65B.49, subd. 3(3)(d) is applicable to determine *691 which coverage should be deemed primary. In applying Minn. Stat. § 65B.49, subd. 3(3)(d) to the instant case, we conclude that the Hertz self-insurance is primary. The State Farm policy is secondary under the statute, in excess of the Hertz coverage. Even if this court did not apply Minn. Stat. § 65B.49, subd. 3(3)(d) to this case, the Hertz coverage would still be deemed primary under the common-law "closest to the risk" doctrine. Under our previous cases, to determine which coverage is primary we applied the "closest to the risk" test, in which we ask: (1) Which policy specifically described the accident-causing instrumentality? (2) Which premium is reflective of the greater contemplated exposure? (3) Does one policy contemplate the risk and use of the accident-causing instrumentality with greater specificity than the other policy that is, is the coverage of the risk primary in one policy and incidental to the other? Interstate Fire & Cas. Co., 433 N.W.2d at 86. Applying these factors to this case, the Hertz self-insurance policy specifically describes the rental vehicle involved in the accident because Hertz is the owner and its self-insurance is specifically available to cover the vehicle at issue, while Powers' State Farm policy only describes Powers' personal automobile. As to the second factor, because Hertz chose to self-insure, it avoided the payment of premiums to cover its liability. However, it is clear that Powers' State Farm policy did not contemplate primary coverage for more than damage to a rental vehicle, and its premiums are reflective of that fact. In addressing the third and final factor, the State Farm policy specifically states that its non-owned vehicle coverage is excess and incidental to any other policy covering the vehicle. While Hertz attempts to shift primacy to the State Farm policy through its rental agreement, Hertz's self insurance must provide liability coverage for damages caused by the use of vehicles it owns and offers for rent. Therefore, Hertz's self-insurance coverage is primary even under common law principles. In summary, Hertz cannot contract away its primary obligations under the No-Fault Act by limiting its liability coverage to situations where no other coverage exists. Therefore, Hertz must provide primary liability coverage for the damages resulting from Powers' accident while driving the rental car owned by Hertz. Reversed. BLATZ, Justice (concurring specially). I concur in the result of the majority decision. The legislature clearly set forth in Minn. Stat. § 65B.49, subd. 3(3)(d) that "a residual liability insurance policy shall be excess of a nonowned vehicle policy." This statutory amendment to the No-Fault Act was effective on August 1, 1994. The statute requires that Hertz's nonowned vehicle policy be deemed primary in providing Powers with liability coverage. This statutory amendment was effective the day before Powers rented the Hertz vehicle, and, therefore, Hertz is bound by its mandates. While I do not agree with all of the other legal analysis and conclusions reached by the majority, Minn. Stat. § 65B.49, subd. 3(3)(d) is dispositive of this matter. Therefore, I concur in the result. KEITH, Chief Justice (concurring specially). I join in the special concurrence of Justice Blatz. PAGE, Justice (dissenting). I respectfully dissent. The court's decision, which allows the renter of a rental car, who has his or her own liability insurance coverage and who declines to purchase the rental car company's liability insurance supplement to escape responsibility for the renter's involvement in an accident with the rental car, is wrong, fundamentally unfair, and poor public policy. What purpose is served by allowing the renter and the renter's insurance company to avoid responsibility for the renter's action? I would suggest none. To the extent that it is asserted that this result *692 is necessary in order to fulfill the purposes of Minnesota's No-Fault Automobile Insurance Act, that simply is not the case. The purpose of the No-Fault Act is "[t]o relieve the severe economic distress of uncompensated victims of automobile accidents." Minn. Stat. § 65B.42(1) (1996). On the facts before us, that purpose is met and will always be met. The terms of the rental agreement at issue make clear that under any circumstances "[i]f neither [the customer] nor the operator of the car have [liability] insurance," Hertz will provide coverage. Thus, no "victim," injured as a result of an accident with one of Hertz's rental cars, will remain "uncompensated." Finally, the result reached today is poor public policy. If Hertz cannot rely on its customers to either provide their own liability insurance protection or, at the time of rental, purchase Hertz's liability insurance supplement, the cost of that protection is likely to be passed on by Hertz to all of its rental car customers. There is no sound reason why individual renters should not be required to bear the cost of their own liability insurance protection. Therefore, I dissent. NOTES [1] In McClain, the rental car agency attempted to shift all financial liability to the renter through a provision in the rental agreement that provided that the renter was responsible for insuring the rental car. 465 N.W.2d at 681. Here, Hertz has attempted a similar shift of responsibility, but has agreed to provide coverage if the renter does not have liability coverage through a policy on another automobile. The Hertz approach is different in scope than that of the rental car agency in McClain, but its fundamental aim is the same to avoid the statutory obligations of the No Fault Act. [2] If our interpretation of the No-Fault Act is deemed incorrect by the legislature, and rental car agencies are to be treated differently than all other automobile owners, the legislature is, of course, free to clarify the statute at any time. [3] Subdivision 5a provides that every plan of reparation security insuring a natural person must cover damage to rented automobiles.

+ 5 more citations in this opinion.

McClain v. Begley · 1991 2 citations

465 N.W.2d 680 (1991) Claudia McCLAIN, as Trustee for the heirs and next of kin of Michelle Elizabeth McClain, decedent, petitioner, Appellant, v. Bridget J. BEGLEY, petitioner, Appellant, Christine S. Meyers, Defendant, Altra Auto Rental, Inc., a division of Agency Rent-A-Car, Inc., Respondent. and ALTRA AUTO RENTAL, INC., A DIVISION OF AGENCY RENT-A-CAR, INC., Respondent, v. FIREMEN'S FUND INSURANCE COMPANY, Defendant, Allstate Insurance Company, petitioner, Appellant. No. C1-89-2206. Supreme Court of Minnesota. February 15, 1991. Eric Magnuson, Andrew M. Walsh, Rider, Bennett, Egan & Arundel, William M. Hart, R. Gregory Stephens, Meagher & Geer, Minneapolis, for appellants. Scott W. Johnson, James A. O'Neal, Paul W. Heirling, Faegre & Benson, Bonita J. Girard, Bassford, Hecht, Lochhart & Mullia, Minneapolis, for respondents. Heard, considered and decided by the court en banc. *681 YETKA, Justice. This case is here on appeal from the court of appeals, which reversed summary judgment awarded by the trial court on motion of plaintiff McClain. We reverse the court of appeals and reinstate the judgment of the trial court. Petitioner McClain brought an action against Altra Auto Rental, Inc., Bridget Begley, and Christine Meyers for the wrongful death of her daughter, Michelle McClain. The death resulted from a car accident involving a car rented by Michelle McClain, Begley and Meyers from Altra. Altra insured the rental car through a plan of self-insurance under the no-fault act. Allstate insured Begley, the driver of the rental car at the time of the accident, through her parents' liability policy. After McClain commenced suit, Altra brought a declaratory judgment action against Allstate to determine priority of coverage. In January 1988, McClain moved for partial summary judgment, claiming that Altra's self-insurance plan provided primary coverage to the extent of the $500,000 liability limits stated on the certificate of insurance. The motion was granted on April 7, 1988. Altra's petition for discretionary review was denied by the court of appeals. Thereafter, the parties stipulated to damages and the entry of judgment with the express understanding that Altra would appeal the summary judgment decision.[1] The court of appeals reversed the trial court, holding that, in the absence of express liability coverage limits in a self-insurance plan, a self-insurer is liable only for the statutory minimum amount of coverage. McClain v. Begley, 457 N.W.2d 230 (Minn.App.1990). Respondents McClain and Begley appealed. This court granted respondents' petition for review. This case arises from an automobile accident on March 30, 1986, in Missouri. Michelle McClain, Bridget Begley, Christine Meyers, and Shannon Murphy, all college students, planned a spring-break trip to Padre Island, Texas. Prior to the trip, Murphy contacted Altra about renting a car. An agent of Altra told Murphy that, to qualify for the least expensive rate, she must rent the car as a replacement for an insured, but out-of-service car. Murphy told the agent that McClain had an out-of-service car insured through Firemen's Fund Insurance. On March 21, 1986, the Altra agent delivered the car to Murphy and Meyers. Meyers signed the rental contract which stated that Altra did not provide liability coverage on the car and that the car was to be insured by the lessee. A few days after the rental contract was signed, the agent filled in the rental form with a fictitious policy number, agent, and agency phone number. On March 30, 1986, as the women were returning from the trip, Begley fell asleep at the wheel and collided with a car parked on the shoulder of an interstate in Missouri. McClain was killed in the collision. Altra insures its cars through a plan of self-insurance. As a self-insured entity, Altra completed and filed the forms developed by the Department of Commerce. One of the forms included a question and an answer which we repeat as follows: 12. List all excess insurance applicable to motor vehicle accidents, with name(s) of insurer(s), policy number(s) and limits of liability. Lexington Insurance Company Policy No. 552 8742 Effective: 12-31-86/87 Amount of Insurance: $2,500,000 in excess of $500,000 S.I.R. [Self-insured Retention] The above question and answer was part of a form entitled "REQUEST FOR EXEMPTION FROM INSURING LIABILITIES UNDER THE MINNESOTA NO-FAULT AUTOMOBILE INSURANCE ACT." The parties to the lawsuit entered into a stipulation which, in substance, provided the following: Altra owned the car in *682 which McClain was killed. The negligence of Begley, the driver, was the sole cause of McClain's death. The total damages for the death are $155,000. If the trial court orders are upheld on final appeal, Altra will pay $155,000 to plaintiff. If Altra's obligation is limited to the statutory minimum, Altra will pay $30,000 and Allstate will pay $100,000. As a result of all this pre-appeal maneuvering, the parties agree and have submitted to the court the following: 1. The question of the applicability of Minnesota's car owner's responsibility act is not raised and is thus not before this court. 2. Altra sought protection of its fleet under the Minnesota no-fault act. 3. Altra, through its rental agreements, had attempted to shift responsibility for all liability coverage to the lessees of its cars and absolve itself of any liability. This has been held illegal by the Minnesota Department of Commerce. 4. Thus, the sole issue for this court to decide involves the interpretation of the no-fault insurance act, Minn. Stat. §§ 65B.41-65B.71 (1990), and its applicability to self-insurers. Interpretation of statutes is a question of law. Hibbing Educ. Ass'n v. Public Employment Relations Bd., 369 N.W.2d 527, 529 (Minn.1985). The parties have stipulated to the facts and to the amount of damages. This court thus must determine whether the court of appeals erred in its application of the law to the facts of this case. This court is not bound by the decision of the court of appeals. A.J. Chromy Constr. Co. v. Commercial Mechanical Serv., Inc., 260 N.W.2d 579 (Minn.1977). The Minnesota no-fault act imposes a duty on the owner of a motor vehicle to maintain "a plan of reparation security * * * insuring against loss resulting from liability imposed by law for injury and property damage by any person arising out of the ownership * * * of the vehicle." Minn. Stat. § 65B.48, subd. 1. The owner has the choice of self-insuring or buying an insurance policy. The act states five purposes: to relieve the "severe economic distress of uncompensated victims," to prevent overcompensation, to provide prompt payment, to reduce litigation, and to correct abuses of the tort liability system. Minn. Stat. § 65B.42. The obligations imposed on self-insurers should reflect those goals. Self-insurance is the functional equivalent of a commercial insurance policy. The law of workers' compensation treats self-insurers no differently than those who insure by commercial policy. The purpose of either form of insurance is to compensate victims appropriately. The certificate filed with the commissioner is the functional equivalent of an insurance policy. While under the Minnesota no-fault statutes, Minn. Stat. § 65B.49, subd. 3(1), any insurer is required to have liability coverage of $30,000 as a minimum, Altra made a deliberate representation to the Department of Commerce to provide coverage in excess of that amount, namely, $500,000. Based on that representation and other data supplied to the Department of Commerce, Altra was accepted as a self-insured. It should thus be held to the representations that it made. The cases and precedent cited in the briefs are simply not applicable to the unique facts of this case, for the decision in this case is based more on equitable estoppel principles than on any other. The court of appeals is thus reversed and judgment of the trial court reinstated. COYNE and GARDEBRING, JJ., took no part in the consideration or decision of this matter. SIMONETT, Justice (concurring). I join in the majority opinion but my reasoning, only sketched out here, is different. A Minnesota car owner can satisfy the requirements of our No-Fault Act by purchasing a liability policy with limits of $30,000 for bodily injury to any one person, $60,000 for any one accident, and $10,000 *683 property damage. Minn. Stat. § 65B.49, subd. 3(1). These limits, of course, do not limit the car owner's tort liability; a car owner remains liable for any tort exposure over the policy limits. By purchasing minimum coverage, a car owner in this state keeps his car registered, keeps his driver's license, and avoids criminal penalties. Minn. Stat. § 65B.67. Policy limits measure the amount of protection afforded the insured. Also, policy limits, whether the statutory minimum or higher, are significant in determining when other auto liability policies covering the driver (if such is the case) will come into play. A self-insurer must approach these risk management problems a little differently than a regular policyholder. The self-insurer's exposure is its tort liability exposure, which the self-insurer may limit by purchasing an excess policy for claims against it over and above a certain amount. In relation to this excess policy, the self-insurer's underlying personal exposure is its self-insured retention. This self-insurance, by statutory definition, is a plan of reparation. Minn. Stat. § 65B.43, subd. 15. Consequently, there is no need for a self-insurer to file any detailed plan. See Anderson v. Northwestern Bell Tel. Co., 443 N.W.2d 546, 549 (Minn.App.1989) ("[S]elf-insureds are not required to have the carefully worded, highly specific policy provisions, declarations and coverage limits required of insurance companies."). Ordinarily, a self-insured retention operates much the same as stated limits in a regular insurance policy. But not necessarily. Arguably, a self-insurer may, with respect to certain persons, place limits on its self-insured retention which are lower than the self-insured retention. The self-insurer will try to do this so that if there are other auto insurance policies also covering the driver of the car, such other insurance will no longer be excess but will then apply. In this case, for example, the driver of the rented car, Bridget Begley, had her parents' auto policy affording her coverage, and the question arises as to when this other insurance takes over.[1] In this case Altra, Inc. (the Rental Agency) purchased an excess policy with coverage of "$2,500,000 in excess of $500,000 S.I.R." (the initials refer to Self-Insured Retention). This excess policy, however, contained a "Renter's Exclusion" endorsement which appears to exclude claims such as McClain's arising from accidents while the automobile is being operated by a lessee under a rental agreement.[2] I understand the Rental Agency's position to be that it is self-insured for claims arising when its own employees are driving its cars up to $500,000, after which the excess policy takes over for the next $2.5 million; but that as to claims arising where a lessee is operating the rented vehicle, while the personal exposure, if any, of the Rental Agency as owner of the rented car is limitless, the Rental Agency's self-insurance exposure for the lessee-operator is the minimum statutory limits under the Minnesota No-Fault Act. The issue then becomes: To what extent, if any, does the grant of self-insurance authority to the Rental Agency provide protection to persons operating the Rental Agency's automobiles as lessee-operators? *684 It seems to me there are two possible ways in which the Rental Agency, as a self-insurer, might possibly provide coverage to its lessee-operators. One possibility is that the self-insurer contracts with the lessee to protect the lessee the same as if the lessee had purchased a standard auto liability insurance policy for the rented car. Presumably the Rental Agency could place limits on this contractual coverage by so stating in the rental contract. The problem with this arrangement, however, is that the Rental Agency is a self-insurer, not an insurer. I doubt if a self-insurer is authorized to issue contracts of insurance.[3] The second possibility is to treat the self-insurer as if it had purchased a policy of auto liability insurance for each of its vehicles with itself as the named insured. Such a policy, if purchased, would contain an omnibus clause extending coverage to permissive drivers as additional unnamed insureds.[4] This seems to me the better approach and more in keeping with the concept of self-insurance. This brings up, however, another question: Can omnibus coverage limits ever be less than the coverage limits for the named insured? Courts in other states appear to differ on this. For example, in Balboa Ins. Co. v. State Farm Mut. Auto. Ins. Co., 17 Ariz. App. 157, 496 P.2d 147 (1972), a rental car agency had purchased a liability policy with $100,000/300,000 coverage but with an endorsement limiting coverage for lessee-operators to $10,000/20,000, the statutory minimum. The court held these differing limits were permissible, relying on Rocky Mountain Fire & Cas. Co. v. Allstate Ins. Co., 107 Ariz. 227, 485 P.2d 552 (1971). Compare Southern Home Ins. Co. v. Burdette's Leasing Service, Inc., 268 S.C. 472, 234 S.E.2d 870 (1977), where the South Carolina Supreme Court held that an auto rental agency's self-insurance covered permissive users including lessee-customers, and that the self-insurance "substitutes for an insurance policy to the extent of the statutory policy requirements." Id., 234 S.E.2d at 872 (emphasis added). Wisconsin has a so-called "omnibus statute" which provides that coverage applicable to the named insured is to be extended to any person using the motor vehicle. Wis.Stat. § 632.32(3), successor to Wis. Stat. § 204.30(3) (1967). In Smith v. National Indemnity Co., 57 Wis.2d 706, 205 N.W.2d 365 (1973), the car rental agency had liability insurance with coverage for itself, as the named owner insured, of $100,000/300,000; an endorsement to the policy, however, limited coverage for renters to $10,000/20,000. The Wisconsin Supreme Court held, applying its omnibus coverage statute, that the car rental agency could not have less coverage for its lessee-customers than for itself. In National Indemnity Co. v. Manley, 53 Cal.App.3d 126, 125 Cal.Rptr. 513 (1975), the rental agency's liability policy contained *685 an endorsement that it was excess over other insurance. The intermediate appellate court held that under the California Insurance Code an insurer could provide in its policy for only minimum statutory coverage for permissive users, but that in this instance the policy clause attempted to exclude permissive users from any coverage whatsoever and, hence, was void. 53 Cal. App.3d at 133, 125 Cal.Rptr. at 513. The court, therefore, ruled that permissive users would be entitled to coverage in the same amount as that specified by the policy for the named insured. See also Globe Indemnity Co. v. Universal Underwriters Ins. Co., 201 Cal.App.2d 9, 17-18, 20 Cal. Rptr. 73, 78-79 (1962). I think arguments can be made both for and against restricting omnibus coverage to minimum statutory limits in cases where a self-insurer is engaged in the business of short-term car rentals.[5] One would need, however, a better record than the one we have here to resolve this question. The record does indicate that the Minnesota Department of Commerce expects a self-insured rental agency to provide liability protection for its lessee-operators, and there is some indication that this coverage can be limited to the statutory minimum.[6] On this record and for this case, I take the following position. The Rental Agency affords protection to its lessee-operators as if it had omnibus coverage. Car rental companies are a special case of self-insurance. The Rental Agency may limit its omnibus coverage at least for lessee-operators to the statutory minimum and it may do this in the rental contract. In this case, however, the Rental Agency went further and attempted to deny all omnibus coverage. This attempt was void.[7] Therefore, left in place for omnibus coverage are the same "limits" for residual liability coverage as for the named insured, see Manley, supra, which in this case is either unlimited or $500,000, depending on how the renter's exclusion is construed. In any event, for the purposes of this case, the Rental Agency is responsible under the stipulation of the parties to pay $155,000. I think the $500,000 self-insured retention refers to residual tort liability, not to first party no-fault benefits, and, therefore, no-fault economic loss benefits are the statutory minimum. KEITH, Chief Justice (concurring). I join in the concurrence of Justice Simonett. *686 TOMLJANOVICH, Justice (concurring). I join in the concurrence of Justice Simonett. NOTES [1] The parties stipulated to damages of $155,000, noting that if the summary judgment decision is reversed, then Altra will pay the statutorily mandated amount, $30,000, and Allstate will pay the limit of its secondary liability, $100,000. Thus, were the summary judgment decision reversed, McClain's estate would be uncompensated for $25,000. [1] The trial court ruled that Altra's self-insurance was primary vis-a-vis Allstate's policy issued to Bridget Begley's parents and affording coverage to Bridget Begley as driver of the rented car. This ruling was not appealed. Altra appeals only the issue of how much of its self-insured retention must be paid on the wrongful death claim before Allstate's policy must pay.

+ 1 more citation in this opinion.

Roering v. Grinnell Mutual Reinsurance Co. · 1989 6 citations

+ 6 more citations in this opinion.

Bank North v. Soule · 1988 1 citation

+ 1 more citation in this opinion.

Rehnelt v. Stuebe · 1986 4 citations

+ 4 more citations in this opinion.

Western National Mutual Insurance Co. v. State Farm Insurance Co. · 1985 2 citations

KELLEY, Justice. Dorothy Archiletti owned an automobile(s) licensed, garaged, and insured in Missouri. State Farm Insurance Company (State Farm) insured the Archiletti vehicle(s) in Missouri, a state which does not have an automobile no-fault reparations act. State Farm was licensed to write automobile insurance policies in Minnesota, but did not collect any premiums for no-fault coverage on the Archiletti policy. On September 30,1980, Dorothy Archiletti sustained personal injuries in a motor vehicle accident that occurred in Minnesota. At the time of the accident, she was an occupant of a motor vehicle licensed and garaged in Minnesota and insured by Western National Mutual Insurance Company (Western). Western paid Archiletti basic economic benefits pursuant to the Minnesota No-Fault Act.1 In an attempt to recoup these payments, Western commenced this subrogation action against State Farm. Western claimed that State Farm’s obligation took precedence over Western’s obligation, at priority level 4(a) of Minn. Stat. § 65B.47, because State Farm was licensed to sell automobile insurance in Minnesota. The trial court agreed and granted summary judgment. The court of appeals affirmed. Western National Mutual Insurance Co. v. State Farm Insurance, 353 N.W.2d 169 (Minn.App.1984). We reverse. Prior to the accident, Dorothy Archiletti traveled to Minnesota from Missouri by commercial airline and left her automobile(s) at her residence. She sustained her injuries in the Minnesota accident while riding as a passenger in a vehicle owned by John and LaVonne Wefel. The Wefels are Minnesota residents. The trial court and a divided court of appeals held that the Minnesota No-Fault Act obligates State Farm to provide no-fault basic economic benefits to its Missouri insured. Both courts reached this conclusion, notwithstanding that: (1) the insured automobile(s) was not in Minnesota at the time of the accident; (2) Missouri, where the Archiletti vehicle(s) was garaged and insured, did not have a no-fault reparations act; and (3) Archiletti never paid a premium for no-fault benefits. Integral to both courts’ reasoning was the assumption *443that Petty v. Allstate Ins. Co., 290 N.W.2d 763 (Minn.1980) limited construction of Minnesota’s “certification” statute, Minn. Stat. § 65B.50 (1982). See Western National Mutual Ins. Co., 353 N.W.2d at 171. Both parties, on appeal, rely on the Petty decision. Western contends, and a majority of the court of appeals’ panel agreed, that the Petty decision stands for the proposition that the presence of the out-of-state insured’s vehicle in the state is insignificant with respect to an out-of-state insurer’s obligation. On the other hand, State Farm asserts that the Petty opinion’s reference to the presence of the Pettys’ insured vehicle was determinative. In Petty, Mr. and Mrs. Petty drove one of their two automobiles from California into the State of Minnesota. Petty, 290 N.W.2d at 764. While in Minnesota, the two California residents were injured in an automobile accident within this state. At the time of the accident, however, the Pet-tys were occupants of a Minnesota vehicle owned by the Pettys’ daughter. The Pet-tys’ two automobiles were registered and garaged in California and were insured by Allstate under a policy written and issued in California. The Pettys did not pay no-fault premiums because California at that time did not have a no-fault reparations act. Under those circumstances, we held that the Pettys could stack no-fault benefits under Minnesota law. Id. at 766. Our holding that a nonresident insured could stack out-of-state coverage does not compel acceptance of either argument now before us. The sole issue presented in Petty was “whether nonresident owners of more than one vehicle insured in a state which does not provide no-fault benefits are entitled to stack benefits under applicable Minnesota statutes.” Id. at 765. The initial question of Allstate’s obligation to pay no-fault benefits was not there at issue. Indeed, as we stated in Petty, “Allstate acknowledged its obligation to provide nonresident policyholders with the minimum security as provided by Minn. Stat. § 65B.49 (1978) (emphasis added).” Id.2 Moreover, unlike the present situation, the Pettys had driven one of their vehicles into the State of Minnesota and it was physically present in Minnesota at the time of the accident. Allstate’s concession in Petty is irrelevant in addressing the issue in the present appeal.3 Having found that the Petty decision does not compel a conclusion either way, resolution of the issue in the case depends upon the interpretation of Minn. Stat. § 65B.50 (1984).4 Western, relying *444solely on Minn. Stat. § 65B.50, Subd. 1 (1984), claims that all insurers licensed to write automobile insurance in Minnesota agree, as a condition of doing business in Minnesota, to provide no-fault benefits to out-of-state insureds involved in Minnesota accidents. It claims that subdivision 2 of the statute does not contradict its contention because subdivisions 1 and 2 deal with two distinct situations. In its view, subdivision 1 has the effect of creating a continuous implied coverage once a licensed insurer’s nonresident insured comes into the State of Minnesota. It further maintains that subdivision 2 merely provides that nonlicensed insurers must provide no-fault benefits only when a vehicle it insured comes within the borders of Minnesota. While conceding that the legislature cannot govern nonresident coverage of vehicles not in Minnesota, Western argues that the required nonresident coverage is a separate obligation imposed, having no relevance to obligations imposed upon licensed insurers under Minn. Stat. § 65B.50, subd. 1. It attempts to buttress this argument by noting that Minn. Stat. § 65B.50 only references Minn. Stat. § 65B.49, which only deals with requirements imposed upon insurers. On the other hand, State Farm contends that resolution of the issue depends upon a close review of several interrelated provisions in the No-Fault Act. It argues that both subdivisions of Minn. Stat. § 65B.50 support its position that the out-of-state vehicle must be in Minnesota before the out-of-state insurer is obligated to provide no-fault benefits. It contends this interpretation is reasonable because it supports the policy of the No-Fault Act. For example, in this case State Farm’s insured is covered by the insurance covering the vehicle involved in the accident, Minn. Stat. § 65B.47(4)(b) — coverage for which Western collected a premium, but for which State Farm did not.5 State Farm further notes that Minn. Stat. § 65B.50, subd. 1, references section 65B.49 with respect to the scope of benefits that must be provided to nonresident policyholders including a provision requiring insurers to provide nonresident basic economic loss benefits. Moreover, State Farm notes that section 65B.49 provides that subdivision 1 is “subject to the provisions of section 65B.41 to 65B.71.” One of those latter provisions is Minn. Stat. § 65B.48(1), the compulsory reparation security section, which plainly requires a nonresident to maintain no-fault coverage only while his vehicle is within the state. Thus, State Farm maintains that the plain language of the certification statute, and the corresponding statutes to which it refers, indicates that the legislature did not intend to require no-fault insurance on a nonresident’s automobile not being used in Minnesota. Accordingly, it argues that the general rule that no-fault benefits “follow the individual” expressed in Minn. Stat. § 65B.47(4)(a) does not here apply. Rather, it claims, the applicable priority level is Minn. Stat. § 65B.47(4)(b) — the security covering the vehicle involved in the accident. Our examination of the applicable sections of the No-Fault Act confirms that the statutory language does not explicitly address the issue in this case. We, therefore, proceed to ascertain the intent of the legislature by considering, inter alia, the consequences of a particular interpretation. See Minn. Stat. § 645.16(6) (1984). In doing so, we conclude the legislature did not intend the consequences that would ensue should the construction urged by Western be sustained. Western’s proposed interpretation would impose on an insurer of vehicles owned and garaged by nonresidents in foreign states an unreasonable and economically heavy burden of being compelled to attempt to adjust premiums to reflect the highly unpredictable likelihood that the nonresident might be entitled to benefits under the Minnesota No-Fault Act even if they entered this state by public transportation having no nexus with the operation of the insured vehicle. *445The public policy reflected in the No-Fault Reparations Act impliedly recognizes that it is advantageous to Minnesota automobile owners to have the benefit of competition for premium costs and coverages from as broad a pool of automobile insurers as possible. To adopt Western’s proposed interpretation would tend to discourage those out-of-state insurers, licensed to do business in Minnesota,, from continued licensure and certification if the number of policies written in Minnesota was small, thereby reducing the pool. This result would be antipathetic to the goals of the No-Fault Act. See, e.g., Nationwide Ins. Co. v. Battaglia, 410 A.2d 1017 (Del. 1980). State Farm’s construction not only furthers the overall purpose of our No-Fault Act, but is also more consistent with related no-fault provisions. Its contention is consonant with other sections of the Act, in contradistinction to Western’s construction, which essentially views Minn. Stat. § 65B.50 in isolation. We find it important and persuasive to look to related provisions in construing our No-Fault Act.6 Therefore, we conclude that physical presence of a nonresident’s automobile within the state, at the time the automobile accident giving rise to the nonresident claim occurred, is a prerequisite for imposing liability on the nonresident’s Minnesota licensed automobile insurer for economic loss benefits under Minn. Stat. § 65B.47. Because no automobile owned by the Archi-lettis was in the state at the time Mrs. Archiletti sustained her injuries, economic losses sustained by her in the accident were compensable from the insurer of the Minnesota vehicle in which she was riding. That was Western. It follows that Western’s subrogation action fails. Reversed. COYNE, J., took no part in the consideration or decision of this case. I dissent. I simply cannot follow the logic of the majority opinion. It attempts to justify the decision on the grounds of *446our case of Petty v. Allstate Insurance Company, 290 N.W.2d 763 (Minn.1980). I cannot agree. It seems Petty is directly in point. In Petty, two California residents were injured in a Minnesota automobile accident. There were two vehicles registered in California and insured by. Allstate, written and issued in California. One of those California vehicles was present in Minnesota, but was parked and was not in anyway involved in the collision. The insureds were driving a Minnesota vehicle owned by their daughter at the time of the injury. The majority decision appears to make a distinction between having a vehicle insured in another state in Minnesota at the time of the accident and not having a vehicle here in the state. I will present merely one example of how ridiculous that distinction is. Appellant admits that if the claimants here had had one of their vehicles in Minnesota at the time of the accident, even though that vehicle was parked and was in no way involved in the collision, the policy on that vehicle would provide protection to Dorothy Archiletti, who sustained the personal injuries here. Let us suppose, for example, that the people she was visiting, John and LaVonne Wefel, lived near the Minnesota-Iowa border. Let us suppose that the Archilettis allowed one of the Wef-els’ friends to drive the Archiletti vehicle while Dorothy Archiletti was in the Wefel vehicle, as she was in this case. If one of the Wefels’ friends driving the Archiletti vehicle happened to be in Minnesota at the time of the accident and the injury to Dorothy Archiletti, it is admitted that the Archi-letti insurance policy written by State Farm would cover Dorothy Archiletti. Yet, if 5 minutes before that, even though the vehicle had been in Minnesota, it had crossed the line into Iowa, there’d be no such coverage. I simply cannot understand why it makes any difference whether they should be recovering in the two instances. That is why this court has historically held that insurance follows the person, not the vehicle. Following the vehicle could lead to ridiculous results as I think the result is in this case. That is why I would affirm both the trial court and the Minnesota Court of Appeals in this case.

+ 1 more citation in this opinion.

Dahle v. Aetna Casualty & Surety Insurance Co. · 1984 2 citations

+ 2 more citations in this opinion.

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

+ 2 more citations in this opinion.

North River Insurance Co. v. Dairyland Insurance Co. · 1984 1 citation

+ 1 more citation in this opinion.

Arneson v. Integrity Mutual Insurance Co. · 1984 1 citation

+ 1 more citation in this opinion.

Yeager v. Auto-Owners Insurance Co. · 1983 1 citation

decision clearly indicated that no-fault benefits cover the person and not the vehicles. 268 N.W.2d [913] at 918. Benefits are stacked because the policyholder is paying on more than one policy for protection of persons insured under those policies. The statute mandates that such personal coverage be purchased for each vehicle owned or principally garaged in the state. Minn. Stat. § 65B.48 (1978). The risk being insured by each policy issued to an insured party is principally the risk of injury to himself or covered members of his household. The number of vehicles owned or policies issued does not increase the risk. The carrier or carriers are adequately compensated for providing no-fault coverage under each policy. The premiums paid to insurers for each policy containing no-fault benefits separately reflect the risk to the insured party.

Mickelson v. American Family Mutual Insurance Co. · 1983 2 citations

+ 2 more citations in this opinion.

Hoben v. City of Minneapolis · 1982 2 citations

The issues raised in this appeal deal with reparation security statutes, Minn. Stat. §§ 65B.48, subd. 4 (1980), and 65B.61, subd. 2 (1980), as they apply to an employee of the City of Minneapolis injured in an automobile collision in the course of his employment. The trial court held that § 65B.61, subd. 2, did not limit respondent’s right to stack workers’ compensation benefits and no-fault benefits. We reverse.

We do not agree that appellant is entitled to immunity and hold that the trial court was correct in finding that Minn. Stat. § 65B.48, subd. 4, (1980) mandates municipalities to provide reparation security for economic loss benefits, in the following language:

National Indemnity Co. v. Mutual Service Casualty Co. · 1981 1 citation

*858 “Commercial vehicle” is defined in Minn. Stat. § 65B.48, subd. 12 (1980) in pertinent part as:

Rosenberger v. American Family Mutual Insurance Co. · 1981 2 citations

+ 2 more citations in this opinion.

Feick Ex Rel. Feick v. State Farm Mutual Automobile Insurance Co. · 1981 1 citation

+ 1 more citation in this opinion.

Koons v. National Family Insurance Co. · 1981 1 citation

+ 1 more citation in this opinion.

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

+ 1 more citation in this opinion.

Minnesota Court of Appeals

Paek Saengkeo v. Minnesota Automobile Assigned Claims · 2016 27 citations

must be insured under Minn. Stat. § 65B.48 (2014), unless there is clear and convincing

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Randall Dahler v. Auto-Owners Insurance Company · 2014 1 citation

+ 1 more citation in this opinion.

State Farm Mutual Automobile Insurance Company, (A14-132), (A14-224) v. Angela Mary Lennartson, (A14-132), Katie Foss, (A14-224). · 2014 1 citation

+ 1 more citation in this opinion.

· 2014 1 citation

among other things. Minn. Stat. § 65B.48, subd. 1. Security may be provided through

State Farm Mutual Automobile Insurance Co. v. Metropolitan Council · 2014 1 citation

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State v. Rohde · 2013 1 citation

+ 1 more citation in this opinion.

Farmers Insurance Exchange v. Letellier · 2012 1 citation

+ 1 more citation in this opinion.

Meyer v. Nwokedi · 2009 3 citations

+ 3 more citations in this opinion.

Morgan v. 2000 Volkswagen, License No. 279, Vin 3VWRA29M2YM125643 · 2008 1 citation

+ 1 more citation in this opinion.

Auto-Owners Insurance Co. v. Forstrom · 2003 1 citation

+ 1 more citation in this opinion.

Munoz v. Kihlgren · 2003 1 citation

+ 1 more citation in this opinion.

State Farm Mutual Automobile Insurance Co. v. Cincinnati Insurance Co. · 2002 2 citations

+ 2 more citations in this opinion.

Msi v. Lmcit · 2002 2 citations

+ 2 more citations in this opinion.

Mutual Service Casualty Insurance Co. v. League of Minnesota Cities Insurance Trust · 2002 2 citations

+ 2 more citations in this opinion.

Loven v. City of Minneapolis · 2001 3 citations

Interpretations of statutes raise questions of law that are reviewed de novo. McClain v. Begley, 465 N.W.2d 680, 682 (Minn.1991). The Minnesota No-Fault Automobile Insurance Act, Minn. Stat. §§ 65B.41-.71 (1998), has many purposes, including “[t]o relieve the severe economic distress of uncompensated victims of automobile accidents,” to prevent overcompensation, to encourage medical treatment, to ease the burden of litigation, and to provide offsets to avoid duplicate recovery. Minn. Stat. § 65B.42 (1998). Under this act, every owner of a motor vehicle in Minnesota, including a political subdivision, must maintain a “plan of reparation security” to provide basic economic loss benefits and residual liability coverage. Minn. Stat. § 65B.48, subds. 1, 4 (1998).

State Farm Mutual Automobile Insurance Co. v. Universal Underwriters Insurance Co. · 2001 1 citation

+ 1 more citation in this opinion.

Braginsky v. State Farm Mutual Automobile Insurance Co. · 2001 2 citations

+ 2 more citations in this opinion.

Progressive Specialty Insurance Co. v. Widness Ex Rel. Widness · 2000 1 citation

+ 1 more citation in this opinion.

State Farm Mutual Automobile Insurance Co. v. Thunder · 2000 1 citation

+ 1 more citation in this opinion.

Mutual Service Casualty Insurance Co. v. West Bend Mutual Insurance Co. · 1999 2 citations

+ 2 more citations in this opinion.

Rasmussen v. Sauer · 1999 4 citations

+ 4 more citations in this opinion.

Ruddy v. State Farm Mutual Automobile Insurance Co. · 1999 1 citation

+ 1 more citation in this opinion.

Ramsamooj v. Olson · 1998 1 citation

+ 1 more citation in this opinion.

Hertz Corp. v. State Farm Mutual Insurance Co. · 1997 3 citations

+ 3 more citations in this opinion.

Agency Rent-A-Car, Inc. v. American Family Mutual Automobile Insurance Co. · 1994 4 citations

In June 1990, the Minnesota Department of Commerce had granted respondent a license of self-insurance as a “no-fault reparation obligor.” See Minn. Stat. § 65B.48 (1988). In the licensing application, respondent reported that it had a self-insured retention of $500,000 and excess insurance coverage up to $5,000,000.

+ 1 more citation in this opinion.

Aguilar v. Texas Farmers Insurance Co. · 1993 1 citation

+ 1 more citation in this opinion.

Progressive Casualty Insurance Co. v. Metcalf · 1993 2 citations [Concurrence]

+ 2 more citations in this opinion.

Sam v. Dairyland Insurance Co. · 1992 1 citation

+ 1 more citation in this opinion.

Harris v. American Family Mutual Insurance Co. · 1992 1 citation

+ 1 more citation in this opinion.

US Fire Ins. v. FIREMAN'S FUND INS. · 1990 2 citations

+ 2 more citations in this opinion.

United States Fire Insurance Co. v. Fireman's Fund Insurance Co. · 1990 2 citations

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Baker v. American Family Mutual Insurance Co. · 1990 3 citations

+ 3 more citations in this opinion.

McClain v. Begley · 1990 8 citations

+ 8 more citations in this opinion.

Laurich v. Emcasco Insurance Co. · 1990 1 citation

+ 1 more citation in this opinion.

State v. Fairchild · 1989 5 citations

+ 5 more citations in this opinion.

Anderson v. Northwestern Bell Telephone Co. · 1989 2 citations

+ 2 more citations in this opinion.

American Family Mutual Insurance Co. v. Universal Underwriters Insurance Co. · 1989 1 citation

Minn. Stat. § 65B.48, subd. 1 (1982).

American Family Mutual Insurance Co. v. Luhman · 1989 1 citation

. The legislature validated what had previously been invalid "family owned vehicle” exclusions. See Minn. Laws ch. 168, § 9, codified at Minn. Stat. § 65B.48, subd. 5 (1988). However, the 1985 amendment, which applied only to policies renewed after September 30, 1985, see AMCO Insurance Co. v. Lang, 420 N.W.2d 895, 900 (Minn.1988), is inapplicable in this case.

Kvitek v. State Farm Mutual Automobile Insurance Co. · 1989 2 citations

+ 2 more citations in this opinion.

Amer. Fam. Ins. v. Metro. Transit Com'n · 1988 2 citations

ANALYSIS In reviewing a summary judgment, this court must determine whether any genuine issues of material fact exist and whether the trial court erred in its application of the law. Betlach v. Wayzata Condominium, 281 N.W.2d 328, 330 (Minn.1979). Because the operative facts of this litigation are not disputed, the standard of review is limited to a determination of whether the trial court erred in its application of the law. See A.J. Chromy Construction Company v. Commercial Mechanical Services, Inc., 260 N.W.2d 579, 581 (Minn. 1977). Because this issue is purely legal in nature, this court need not give deference to the decision of the trial court. Frost-Benco Electric Association v. Minnesota Public Utilities Commission, 358 N.W.2d 639, 642 (Minn.1984). The Minnesota Legislature specified that the 1986 amendment to Minnesota Statute § 65B.47, subd. 1 was to have an effective date of March 26, 1986. 1986 Minn. Laws ch. 455 § 95. The reason for this dispute, however, is that the legislature did not expressly state whether the amendment would apply prospectively to all future claims for basic economic loss benefits or simply to all future accidents. There is no dispute that at the date of the accident, MTC was the primary provider of no-fault benefits to Ms. Vincent. MTC argues that the background and purpose of the No-Fault Act generally, as well as the specific statutory provisions, reveal that the legislature intended this amendment to apply retroactively to accidents which occurred prior to this amendment. In Minnesota no statute shall be construed to be applied retroactively unless "clearly and manifestly so intended by the legislature." Minn. Stat. § 645.21 (1986). In following this legislative mandate, the supreme court has held that before a statute will be afforded retroactive application, there must exist clear evidence that the legislature intended retroactive application, "such as mention of the word `retroactive'." Duluth Firemen's Relief Association v. City of Duluth, 361 N.W.2d 381, 385 (Minn.1985). In attempting to ascertain whether the legislature intended that a statute be retroactively applied, the supreme court has stated, "it is immaterial in this state whether a law alters procedural or substantive rights; the legislature still must express its intention to make it [the statute in question] retroactive." In re Estate of Murphy v. State Department of Public Welfare, 293 Minn. 298, 308, 198 N.W.2d 570, 576 (1972). "Retroactive applications of statutes, however, are not favored and will be given effect only when such intent is clearly and manifestly shown on the face of the statute." Andros v. American Family Mutual Insurance Co., 359 N.W.2d 46, 47 (Minn.Ct.App. 1984), pet. for rev. denied (Minn. Apr. 12, 1985) (quoting Parish v. Quie, 294 N.W.2d 317, 318 (Minn.1980)) (emphasis added). No such intent is shown by this legislation. Further, we are of the opinion that MTC's interpretation of the retroactive application of the statute does not comport with basic contract law. An insurance policy, like any other contract, is customarily governed by the law in effect at the time the policy is issued or the contract is made. Amco Insurance Co. v. Lang, 420 N.W.2d 895, 898 (Minn.1988). Since a statute operates prospectively unless the legislative language clearly indicates that it should apply retrospectively, a statute enacted during the term of an insurance *828 policy does not usually apply to that policy until the policy is renewed. Id. See also Hauer v. Integrity Mutual Insurance Co., 352 N.W.2d 406, 408 (Minn.1984) (underinsured motorist coverage will not be read into policies renewed after date of repeal of mandatory offer). As a practical matter, the No-Fault Act when first adopted was to apply only to accidents occuring after its effective date. 1974 Minn. Laws ch. 408 § 35. With few exceptions, amendments to the No-Fault Act have been prospective in nature, fixing the date of loss and the rights and obligations of the parties as of the date of accident or injury. MTC further contends an insurer's obligation under the entire Minnesota No-Fault Act is premised on when loss accrues. Minn. Stat. § 65B.54, governing a "reparation obligor's duty to respond to claims" provides: Basic economic loss benefits are payable monthly as loss accrues. Loss accrues not when injury occurs, but as income loss, replacement services loss, survivor's economic loss, survivor's replacement service loss, or a medical or funeral expense is incurred. Minn. Stat. § 65B.54, subd. 1 (1986). Respondent maintains that the significant event for interpreting the no-fault benefit payment provisions of the Act is when the claim for basic economic loss benefits arises, not when the accident causing injury occurs. MTC's argument is without merit. There is no single purpose behind the Minnesota No-Fault Act. Minn. Stat. § 65B.42 (1986) recognizes and expressly states several specific purposes. See Galle v. Excalibur Insurance Co., 317 N.W.2d 368 (Minn.1982) (the supreme court used the purpose section to emphasize that the coverage was to be tied to automobile accidents). In addition, Minn. Stat. § 65B.54 is an enforcement provision and imposes a 15% interest penalty upon a reparation obligor who has failed to timely pay benefits. The date of loss as defined in Minn. Stat. § 65B.54 relates to the date of imposition of the penalty, not the date to determine priority of payment between conflicting reparation obligors. In Hoben v. City of Minneapolis, 324 N.W.2d 161 (Minn.1982), the supreme court dealt with reparation security statutes, Minn. Stat. §§ 65B.48, subd. 4 (1980) and 65B.61, subd. 2 (1980), as they apply to an employee injured in an automobile collision in the course of his employment. The supreme court held that: (1) Minn. Stat. § 65B.48 requires that municipalities provide reparation security for economic loss benefits arising out of the use of municipally owned motor vehicles; and (2) under statute pertaining to automobile insurance, Minn. Stat. § 56B.54, it was the intent of the legislature to deal prospectively with future payments of all basic economic loss benefits, regardless of when the incident giving rise to the claim occurred. Id. at 162 and 163. This case is quite different. In Hoben, the supreme court determined that the amendment in question was merely a clarification of the intent of the statute. "[T]here is little doubt but that the legislature's prompt reaction to our construction of the applicable statutes indicates not a change in legislative policy but a disagreement with our understanding of the legislative intent in initially adopting the statutes, it is not a question of retroactivity but more nearly akin to a clarification." Id. at 163 (emphasis added). In the present case the amendment is far from being a mere clarification. The amendment shifts the burden of responsibility for injuries sustained while on an MTC bus. There is nothing in the language of the amendment itself which indicates it is merely a clarification. MTC also claims that since the amendment is remedial in nature it should be liberally construed for the benefit of the MTC. MTC fails to demonstrate, however, that this idea of statutory construction evades the strong disfavor of retroactive legislation. Generally, adoption of an amendment creates a presumption that the *829 legislature intended to change pre-existing law. State by Spannaus v. Coin Wholesalers, Inc., 311 Minn. 346, 353-54, 250 N.W.2d 583, 587 (1976). When the language of an amendment is intended to clarify rather than enlarge the powers of the original statute, the presumption is rebutted. Id. at 354, 250 N.W.2d at 588. This is not the case here. American Family claims that retroactive application of the 1986 amendment to Minn. Stat. § 65B.47, subd. 1 would result in an unconstitutional impairment of contract rights in violation of article 1, section 10, clause 1 of the United States Constitution and of article 1, section 11 of the Minnesota Constitution. Because this court finds that the 1986 amendment applies prospectively, it need not address the constitutional analysis advanced by the appellant. An elementary principle of statutory construction is that the court will not determine the constitutionality of a statute unless it is absolutely necessary to determine the merits of the suit. See Midland Glass Company, Inc. v. City of Shakopee, 303 Minn. 134, 138, 226 N.W.2d 324, 326 (1975); Baugh v. Norman County, 140 Minn. 465, 467, 168 N.W. 348, 349 (1918).

ANALYSIS In reviewing a summary judgment, this court must determine whether any genuine issues of material fact exist and whether the trial court erred in its application of the law. Betlach v. Wayzata Condominium, 281 N.W.2d 328, 330 (Minn.1979). Because the operative facts of this litigation are not disputed, the standard of review is limited to a determination of whether the trial court erred in its application of the law. See A.J. Chromy Construction Company v. Commercial Mechanical Services, Inc., 260 N.W.2d 579, 581 (Minn. 1977). Because this issue is purely legal in nature, this court need not give deference to the decision of the trial court. Frost-Benco Electric Association v. Minnesota Public Utilities Commission, 358 N.W.2d 639, 642 (Minn.1984). The Minnesota Legislature specified that the 1986 amendment to Minnesota Statute § 65B.47, subd. 1 was to have an effective date of March 26, 1986. 1986 Minn. Laws ch. 455 § 95. The reason for this dispute, however, is that the legislature did not expressly state whether the amendment would apply prospectively to all future claims for basic economic loss benefits or simply to all future accidents. There is no dispute that at the date of the accident, MTC was the primary provider of no-fault benefits to Ms. Vincent. MTC argues that the background and purpose of the No-Fault Act generally, as well as the specific statutory provisions, reveal that the legislature intended this amendment to apply retroactively to accidents which occurred prior to this amendment. In Minnesota no statute shall be construed to be applied retroactively unless "clearly and manifestly so intended by the legislature." Minn. Stat. § 645.21 (1986). In following this legislative mandate, the supreme court has held that before a statute will be afforded retroactive application, there must exist clear evidence that the legislature intended retroactive application, "such as mention of the word `retroactive'." Duluth Firemen's Relief Association v. City of Duluth, 361 N.W.2d 381, 385 (Minn.1985). In attempting to ascertain whether the legislature intended that a statute be retroactively applied, the supreme court has stated, "it is immaterial in this state whether a law alters procedural or substantive rights; the legislature still must express its intention to make it [the statute in question] retroactive." In re Estate of Murphy v. State Department of Public Welfare, 293 Minn. 298, 308, 198 N.W.2d 570, 576 (1972). "Retroactive applications of statutes, however, are not favored and will be given effect only when such intent is clearly and manifestly shown on the face of the statute." Andros v. American Family Mutual Insurance Co., 359 N.W.2d 46, 47 (Minn.Ct.App. 1984), pet. for rev. denied (Minn. Apr. 12, 1985) (quoting Parish v. Quie, 294 N.W.2d 317, 318 (Minn.1980)) (emphasis added). No such intent is shown by this legislation. Further, we are of the opinion that MTC's interpretation of the retroactive application of the statute does not comport with basic contract law. An insurance policy, like any other contract, is customarily governed by the law in effect at the time the policy is issued or the contract is made. Amco Insurance Co. v. Lang, 420 N.W.2d 895, 898 (Minn.1988). Since a statute operates prospectively unless the legislative language clearly indicates that it should apply retrospectively, a statute enacted during the term of an insurance *828 policy does not usually apply to that policy until the policy is renewed. Id. See also Hauer v. Integrity Mutual Insurance Co., 352 N.W.2d 406, 408 (Minn.1984) (underinsured motorist coverage will not be read into policies renewed after date of repeal of mandatory offer). As a practical matter, the No-Fault Act when first adopted was to apply only to accidents occuring after its effective date. 1974 Minn. Laws ch. 408 § 35. With few exceptions, amendments to the No-Fault Act have been prospective in nature, fixing the date of loss and the rights and obligations of the parties as of the date of accident or injury. MTC further contends an insurer's obligation under the entire Minnesota No-Fault Act is premised on when loss accrues. Minn. Stat. § 65B.54, governing a "reparation obligor's duty to respond to claims" provides: Basic economic loss benefits are payable monthly as loss accrues. Loss accrues not when injury occurs, but as income loss, replacement services loss, survivor's economic loss, survivor's replacement service loss, or a medical or funeral expense is incurred. Minn. Stat. § 65B.54, subd. 1 (1986). Respondent maintains that the significant event for interpreting the no-fault benefit payment provisions of the Act is when the claim for basic economic loss benefits arises, not when the accident causing injury occurs. MTC's argument is without merit. There is no single purpose behind the Minnesota No-Fault Act. Minn. Stat. § 65B.42 (1986) recognizes and expressly states several specific purposes. See Galle v. Excalibur Insurance Co., 317 N.W.2d 368 (Minn.1982) (the supreme court used the purpose section to emphasize that the coverage was to be tied to automobile accidents). In addition, Minn. Stat. § 65B.54 is an enforcement provision and imposes a 15% interest penalty upon a reparation obligor who has failed to timely pay benefits. The date of loss as defined in Minn. Stat. § 65B.54 relates to the date of imposition of the penalty, not the date to determine priority of payment between conflicting reparation obligors. In Hoben v. City of Minneapolis, 324 N.W.2d 161 (Minn.1982), the supreme court dealt with reparation security statutes, Minn. Stat. §§ 65B.48, subd. 4 (1980) and 65B.61, subd. 2 (1980), as they apply to an employee injured in an automobile collision in the course of his employment. The supreme court held that: (1) Minn. Stat. § 65B.48 requires that municipalities provide reparation security for economic loss benefits arising out of the use of municipally owned motor vehicles; and (2) under statute pertaining to automobile insurance, Minn. Stat. § 56B.54, it was the intent of the legislature to deal prospectively with future payments of all basic economic loss benefits, regardless of when the incident giving rise to the claim occurred. Id. at 162 and 163. This case is quite different. In Hoben, the supreme court determined that the amendment in question was merely a clarification of the intent of the statute. "[T]here is little doubt but that the legislature's prompt reaction to our construction of the applicable statutes indicates not a change in legislative policy but a disagreement with our understanding of the legislative intent in initially adopting the statutes, it is not a question of retroactivity but more nearly akin to a clarification." Id. at 163 (emphasis added). In the present case the amendment is far from being a mere clarification. The amendment shifts the burden of responsibility for injuries sustained while on an MTC bus. There is nothing in the language of the amendment itself which indicates it is merely a clarification. MTC also claims that since the amendment is remedial in nature it should be liberally construed for the benefit of the MTC. MTC fails to demonstrate, however, that this idea of statutory construction evades the strong disfavor of retroactive legislation. Generally, adoption of an amendment creates a presumption that the *829 legislature intended to change pre-existing law. State by Spannaus v. Coin Wholesalers, Inc., 311 Minn. 346, 353-54, 250 N.W.2d 583, 587 (1976). When the language of an amendment is intended to clarify rather than enlarge the powers of the original statute, the presumption is rebutted. Id. at 354, 250 N.W.2d at 588. This is not the case here. American Family claims that retroactive application of the 1986 amendment to Minn. Stat. § 65B.47, subd. 1 would result in an unconstitutional impairment of contract rights in violation of article 1, section 10, clause 1 of the United States Constitution and of article 1, section 11 of the Minnesota Constitution. Because this court finds that the 1986 amendment applies prospectively, it need not address the constitutional analysis advanced by the appellant. An elementary principle of statutory construction is that the court will not determine the constitutionality of a statute unless it is absolutely necessary to determine the merits of the suit. See Midland Glass Company, Inc. v. City of Shakopee, 303 Minn. 134, 138, 226 N.W.2d 324, 326 (1975); Baugh v. Norman County, 140 Minn. 465, 467, 168 N.W. 348, 349 (1918).

American Family Insurance v. Metropolitan Transit Commission · 1988 2 citations

+ 2 more citations in this opinion.

Bank North v. Soule · 1987 4 citations

+ 4 more citations in this opinion.

LaBrosse v. Aetna Casualty & Surety Co. · 1986 3 citations

+ 3 more citations in this opinion.

Zimmerman v. Lasky · 1985 1 citation

+ 1 more citation in this opinion.

Holzemer v. MILLERS'MUT. INS. CO. OF ILL. · 1984 1 citation

Minn. Stat. § 65B.48, subd. 1 (1982), requires every person who owns a motor vehicle of a type which is required to be registered or licensed or is principally garaged in this state to maintain, during the period in which operation or use is contemplated, a plan of reparation security for each motor vehicle owned. See generally Wasche v. Milbank Mutual Insurance Co., 268 N.W.2d 913, 916 (Minn.1978).

Western National Mutual Insurance Co. v. State Farm Insurance · 1984 4 citations

+ 4 more citations in this opinion.

Federated Mut. Ins. v. Amer. Family Mut. Ins. · 1984 1 citation

+ 1 more citation in this opinion.

Federated Mutual Insurance Co. v. American Family Mutual Insurance Co. · 1984 1 citation

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