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Economy Premier Assurance Co. v. Western National Mutual Insurance Co.

Court of Appeals of Minnesota

November 25, 2013

Economy Premier Assurance Company, Appellant,
v.
Western National Mutual Insurance Company, Respondent.

Hennepin County District Court File No. 27-CV-12-16270

William L. Davidson, Timothy J. O'Connor, Lind, Jensen, Sullivan & Peterson, P.A., Minneapolis, Minnesota (for appellant)

James T. Martin, Gislason, Martin, Varpness & Janes, PA, Edina, Minnesota (for respondent)

Considered and decided by Hudson, Presiding Judge; Halbrooks, Judge; and Ross, Judge.

SYLLABUS

The doctrine of contra proferentem, which ordinarily guides courts to interpret ambiguous insurance-contract language against the insurer-drafter and in favor of finding coverage for the insured policy holder, does not influence the interpretation of allegedly ambiguous language in an insurance policy that is the subject of a coverage suit between the drafting insurer and another insurance company.

OPINION

ROSS, Judge

This is a coverage dispute between two insurance companies. Luke Hylden was driving his father's pickup truck when he collided with another car and injured the driver. Hylden's father had lent him the truck because the car Hylden usually drove, owned by his mother, was broken down. Hylden was insured under the policies that each of his parents had taken out for his and her respective vehicle. Hylden's father's insurer, Economy Premier, paid damages to the victim and then sued Western National, the insurer for Hylden's mother, seeking a declaratory judgment for reimbursement stating that Western National, not Economy Premier, is responsible for the primary coverage. The district court interpreted the policy language and granted summary judgment to Western National. Because we read Western National's policy as providing only excess liability coverage and not primary coverage under the circumstances, we affirm.

FACTS

Luke Hylden collided with Sheila Smith while he was driving his father's pickup truck in 2009. Smith was injured. Luke's parents are divorced, and Luke, then 18 years old, was living with his mother. She owned two vehicles insured by Western National Mutual Insurance Company. Hylden was an insured driver under that policy, and he customarily drove his mother's Ford LTD. But the LTD was inoperable in March 2009, pending repair. So Hylden got permission from his father to drive his Ford F-150 pickup truck. Hylden's father insured the F-150 under a policy issued by Economy Premier Assurance Company. Hylden was also an insured under that policy. After the collision, Smith negotiated with Economy Premier and Western National, settling on a total payment of $212, 000.

Economy Premier then brought this action. It claims that Western National has the primary coverage for Hylden's collision even though the pickup he was driving is expressly identified in Hylden's father's Economy Premier policy. It argued to the district court that the pickup constituted a "temporary loaned vehicle" as that term appears in Hylden's mother's Western National policy, and that Western National's policy assumes primary coverage for that category of vehicle. The district court construed both companies' policies, rejected Economy Premier's proposed interpretation, deemed Economy Premier responsible for primary coverage, and entered summary judgment in Western National's favor. Economy Premier appeals that decision.

ISSUE

Does the truck Luke Hylden was driving qualify as a "temporary substitute vehicle" under the Western National ...


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