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Mutual Service Casualty Insurance Co. v. League of Minnesota Cities Insurance Trust

April 24, 2003

MUTUAL SERVICE CASUALTY INSURANCE COMPANY, RESPONDENT,
v.
LEAGUE OF MINNESOTA CITIES INSURANCE TRUST, PETITIONER, APPELLANT.



SYLLABUS BY THE COURT

1. A marked police patrol car is not a "motor vehicle" as defined by the Minnesota No-Fault Automobile Insurance Act.

2. A pedestrian injured by a marked police patrol car cannot recover basic economic loss benefits from the municipality under the Minnesota No-Fault Automobile Insurance Act.

Reversed and remanded.

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

The opinion of the court was delivered by: Hanson, Justice

OPINION

A City of Rochester police officer driving a marked patrol car struck a pedestrian, who sustained injuries that resulted in $33,340.92 in medical expenses. The pedestrian's insurer brought a declaratory judgment action against the city's insurer to require it to pay the first $20,000 of the pedestrian's basic economic loss benefits on the grounds that the city's insurer has first priority coverage under Minnesota's No-Fault Automobile Insurance Act ("the Act"). Minn. Stat. §§ 65B.41-65B.71 (2002). The district court granted summary judgment for the city's insurer, based on its conclusion that a marked patrol car is not a "motor vehicle" and thus the city's insurer had no liability for economic loss benefits under the Act. The court of appeals reversed, holding that the plain meaning of the definition of a "motor vehicle" would lead to an absurd and unreasonable result that departed from the stated purpose of the Act. We reverse the court of appeals and hold that a marked patrol car is not a "motor vehicle" and therefore that an injured pedestrian does not have the right to recover basic economic loss benefits from the city under the Act.

The parties do not dispute the facts. On March 17, 2000, a marked patrol car owned by the City of Rochester struck a pedestrian, Christopher Paul Kruger, at or near the intersection of Third Avenue and 10½ Street in Rochester. Officer Timothy Lutzke of the Rochester Police Department was driving the patrol car and was acting within the scope of his duties at the time of the accident.

Under the Act, a person has the right to claim basic economic loss benefits if he or she has been injured by the "maintenance or use of a motor vehicle." Minn. Stat. §á65B.46, subd. 1 (2002) (emphasis added). The Act defines a "motor vehicle" as every vehicle, other than a motorcycle or other vehicle with fewer than four wheels, which (a) is required to be registered pursuant to chapter 168, and (b) is designed to be self-propelled by an engine or motor for use primarily upon public roads, highways or streets in the transportation of persons or property, and includes a trailer with one or more wheels, when the trailer is connected to or being towed by a motor vehicle. Minn. Stat. § 65B.43, subd. 2 (2002) (emphasis added).

Under Minn. Stat. § 168.012, subd. 1(b), "[v]ehicles owned by the federal government, municipal fire apparatuses including fire suppression support vehicles, police patrols, and ambulances, the general appearance of which is unmistakable, are not required to register or display number plates." Minn. Stat. § 168.012, subd. 1(b) (2002) (emphasis added).

Appellant League of Minnesota Cities Insurance Trust ("LMCIT") is the automobile insurance carrier for the City of Rochester. Its policy provides basic economic loss benefits coverage for the city's qualified vehicles, including $20,000 for medical expenses. Kruger is insured under his grandfather's automobile insurance policy with respondent Mutual Services Casualty Insurance Company ("MSI"). The MSI policy likewise provides basic economic loss benefits coverage, including $20,000 for medical expenses. It also provides an additional $60,000 in optional coverage. To date, MSI has paid $13,340.92 toward Kruger's medical expenses from this optional coverage. MSI refuses to pay the first (or additional) $20,000 in medical expenses incurred because it believes that, under the Act, LMCIT has a higher priority of payment.

In order to determine priority of payment, MSI commenced a declaratory judgment action against LMCIT and petitioned the court to declare that LMCIT has priority to pay the first $20,000 of Kruger's medical expenses. Both parties filed cross-motions for summary judgment. The district court granted LMCIT's motion and found that the marked patrol car involved in the accident was not a "motor vehicle" as defined in Minn. Stat. § 65B.43, subd. 2. The court therefore concluded that the priority provision of Minn. Stat. § 65B.47, subd. 3 did not apply to LMCIT.*fn1

MSI appealed, and the court of appeals reversed. The court acknowledged that, on its face, the statutory definition of a "motor vehicle" does not include marked patrol cars. Mutual Service Casualty Ins. Co. v. League of Minnesota Cities Ins. Trust, 646 N.W.2d 546, 549 (Minn. App. 2002). It concluded, however, that "applying the plain meaning of the statutory definition of 'motor vehicle' to deny an injured person the right to basic economic loss benefits produces an absurd and unreasonable result that plainly departs from the first stated purpose of the Minnesota No-Fault Automobile Insurance Act." Id. at 550. The court ...


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