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Auto-Owners Insurance Company v. Lawrence Larson

April 8, 2013

AUTO-OWNERS INSURANCE COMPANY, RESPONDENT,
v.
LAWRENCE LARSON, APPELLANT.



Hennepin County District Court File No. 27-CV-3262

The opinion of the court was delivered by: Stauber, Judge

This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2012).

Reversed

Considered and decided by Connolly, Presiding Judge; Stauber, Judge; and Bjorkman, Judge.

UNPUBLISHED OPINION STAUBER, Judge

On appeal from the denial of appellant-insured's motion to dismiss a declaratory-judgment action brought by respondent-insurer to resolve the amount of underinsured- motorist (UIM) benefits due under appellant's insurance policy with respondent, appellant argues that the case is not one for declaratory judgment because the sole question raised in respondent's complaint does not ask the court to declare the rights, status, or legal relations of the parties. We agree and reverse.

FACTS

Appellant Lawrence Larson obtained an automobile insurance policy from respondent Auto-Owners Insurance Company that provided UIM coverage with a policy limit of one million dollars. Thereafter, appellant was injured when the motor vehicle he was operating was struck from behind by a vehicle driven by P.B. Appellant sustained injuries to his head, neck, lower back, knee, and leg as a result of the accident.

In January 2011, appellant settled his tort claim for P.B.'s liability policy limit of $100,000, and respondent consented to the settlement. In the meantime, appellant also presented a claim to respondent for UIM benefits. The parties engaged in settlement discussions but were unable to reach an agreement to resolve appellant's claims. Consequently, respondent commenced a declaratory-judgment action in Minnesota district court alleging that "a good faith controversy exists between the parties" and seeking a declaration "as to the amount owed [appellant], if any, for the UIM Claim."

After respondent filed its declaratory-judgment action, appellant commenced a contract action in the United States District Court, District of South Dakota, claiming that respondent breached its contract with appellant and conducted itself in "bad faith" towards its insured in violation of South Dakota law. Appellant also filed a motion to dismiss respondent's declaratory-judgment action, arguing in relevant part that declaratory relief is unavailable under Stark v. Rodriquez, 229 Minn. 1, 37 N.W.2d 812 (1949). Thereafter, respondent moved to enjoin appellant from proceeding with the action in South Dakota federal court until the Minnesota state action concluded.

The district court concluded that Stark is not applicable because that case is "notably distinguishable" from the present case. The district court also recognized that "the statutory language of the Minnesota Declaratory Judgment Act gives courts broad discretion to resolve and dispose of disputes." Thus, the district court denied appellant's motion to dismiss respondent's declaratory-judgment action. The court also granted respondent's anti-suit injunction, precluding appellant's South Dakota federal court action. This appeal followed.

DECISION

A district court's findings of fact shall not be set aside unless they are clearly erroneous. In re Estate of Eckley, 780 N.W.2d 407, 410 (Minn. App. 2010). But the interpretation of statutes and application of caselaw are questions of law subject to de novo review. Id.

The Uniform Declaratory Judgments Act (UDJA) gives courts "within their respective jurisdictions" the power to "declare rights, status, and other legal relations." Minn. Stat. § 555.01 (2012). A party may seek a declaration as to rights, status, or legal relations whenever the declaration will terminate a controversy or remove an uncertainty. Minn. Stat. § 555.05 (2012). "A declaratory judgment is a procedural device through which a party's existing legal rights may be vindicated so long as a justiciable controversy exists." Weavewood, Inc. v. S & P Home Invest., LLC, 821 N.W.2d 576, 579 (Minn. 2012). But, the UDJA does not create causes of action that do not otherwise exist and "[a] declaratory judgment action must present a ...


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