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Travelers Indemnity Co. v. Bloomington Steel & Supply Co.

May 3, 2005

THE TRAVELERS INDEMNITY COMPANY, ET AL., RESPONDENTS,
v.
BLOOMINGTON STEEL & SUPPLY COMPANY, ET AL., DEFENDANTS, JOSE PADILLA, APPELLANT.



Hennepin County District Court File No. 03-19854.

Considered and decided by Shumaker, Presiding Judge, Toussaint, Chief Judge; and Dietzen, Judge.

SYLLABUS BY THE COURT

A corporation, as a separate legal person, can be held to expect the acts of a tortfeasor employee under the terms of a business insurance policy when the tortfeasor is the sole owner and officer of the corporation.

The opinion of the court was delivered by: Gordon W. Shumaker, Judge

Affirmed

OPINION

Appellant Jose Padilla contests the district court's grant of declaratory relief with respect to an insurance policy issued by respondents to a company wholly owned by an individual who assaulted appellant. The district court granted respondents' motion for summary judgment, finding that a policy exclusion applied and no indemnification would be required in an underlying civil suit. We affirm the district court's judgment.

FACTS

Appellant Jose Padilla worked for a company that shared a common work area with Bloomington Steel, a corporation wholly owned by Cecil Reiners since 1991. On October 18, 2000, Reiners confronted Padilla twice about distracting Bloomington Steel's workers. The men argued, and Reiners picked up a two-by-four and struck Padilla on the head, causing serious injuries. Reiners was charged with first-degree assault. He ultimately pleaded guilty after the original jury verdict was vacated on appeal because of the district court's denial of Reiners's peremptory challenge to a prospective juror. State v. Reiners, 664 N.W.2d 826, 835 (Minn. 2003).

In an underlying civil action, Padilla sought damages from Reiners and Bloomington Steel on theories of assault and battery, respondeat superior, and negligent retention and supervision. Respondents Travelers Indemnity Company and The Charter Oak Fire Insurance Company (hereinafter collectively referred to as "Travelers") defended Bloomington Steel, but reserved the right to deny coverage for damages under Bloomington Steel's liability insurance policy.

Travelers brought the present action in district court, seeking a declaratory judgment under Minn. Stat. § 555.01 (2002) that Travelers has "no obligation to indemnify Bloomington Steel in the Underlying Action." Bloomington Steel and Padilla (as an assignee of Reiners and Bloomington Steel) filed separate motions seeking dismissal of Travelers' action and a declaratory judgment that Travelers was obligated to indemnify Bloomington Steel. The district court denied the defendants' motions, and granted the motion of Travelers, stating that it did "not have to provide coverage to Bloomington Steel for any damages" because the assault was expected from the standpoint of Bloomington Steel and thus fell under the insurance policy's expected-acts exclusion. Padilla alone appeals from the declaratory judgment.

ISSUE

Did the district court err by granting declaratory judgment that the assault was an expected act from the standpoint of the insured and thus ...


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