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Christensen v. Milbank Insurance Co.

April 03, 2003

HARVEY CHRISTENSEN, PETITIONER, APPELLANT,
v.
MILBANK INSURANCE COMPANY, RESPONDENT.



SYLLABUS BY THE COURT

1. Under the "theft or conversion" exception to the initial permission rule, the intentional dominion or control necessary for "conversion" cannot be shown by accidental destruction of the vehicle in a collision.

2. In determining priority of coverage, "closer to the risk" analysis is inappropriate where a school district's insurance plan states "this agreement provides primary coverage" and the school district employee's personal insurance policy states that its coverage "shall be excess over any other collectible insurance."

Affirmed.

Heard, considered, and decided by the court en banc.

The opinion of the court was delivered by: Anderson, Russell A., Justice

Concurring in part, dissenting in part, Blatz, C.J., and Page, J.

Took no part, Hanson and Meyer, JJ.

OPINION

In this case, we are asked to interpret the scope of the initial permission rule which provides that when a named insured initially gives another permission to use a vehicle, subsequent use, short of conversion or theft of the vehicle, remains permissive even though the use is outside the initial grant of permission. We hold, in the context of the "theft or conversion" exception to the initial permission rule, that the intentional dominion or control necessary for "conversion" cannot be shown by accidental destruction of the vehicle in a collision. Further, we hold that "closer to the risk" analysis is inappropriate where a school district's insurance plan states "this agreement provides primary coverage" and the school district employee's personal insurance policy states that its coverage "shall be excess over any other collectible insurance."

From 6 a.m. to 12 noon on Friday, July 1, 1994, appellant Harvey Christensen, a drivers' education instructor, conducted drivers' education instruction with a van owned by Independent School District #787. After he finished instruction, Christensen drove home to wash the van. Christensen did not have permission to use the van for personal reasons at any time but did have permission to park the van at his home.

Christensen washed the van in the afternoon after he mowed the lawn and cleaned the house. Over the course of the afternoon, he also drank about six beers. At about 6:30áp.m., as he was finishing supper, Christensen decided to go for a drive. Since the drivers' education van was blocking his car in the driveway, he put a cooler of beer and ice in the van and took the van for a drive. Christensen drank a couple more beers between 6:30 and 8:15 p.m. About 8:30 p.m., Christensen was involved in a collision with a vehicle driven by Veronica Wagner on State Highway 10. He was intoxicated at the time.*fn1 The van was totally destroyed. Wagner's passengers sued Christensen, District #787, and others for past and future damages resulting from their injuries.

The van was insured by District #787 through the Minnesota School Board Association Insurance Trust (MSBAIT), a self-insurance pool specifically authorized by Minnesota Statutes § 471.981, subd. 1 (2002). This plan provides:

WHO IS COVERED

You are a plan participant for any covered auto.

Anyone else is a plan participant while using, with your permission, [any auto you own, hire or borrow ...


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