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Wilbur v. State Farm Mutual Automobile Insurance Co.

Supreme Court of Minnesota

April 5, 2017

John Wilbur, Appellant,
v.
State Farm Mutual Automobile Insurance Company, Respondent.

         Court of Appeals Office of Appellate Courts.

          Wilbur W. Fluegel, Fluegel Law Office, Minneapolis, Minnesota; and Charles D. Slane, TSR Injury Law, Bloomington, Minnesota, for appellant.

          William L. Moran, HKM, P.A., Saint Paul, Minnesota, for respondent.

          Michael L. Weiner, Yaeger & Weiner, PLC, Minneapolis, Minnesota, for amicus curiae Minnesota Association for Justice.

          Dale O. Thornsjo, Lance D. Meyer, O'Meara, Leer, Wagner & Kohl, P.A., Minneapolis, Minnesota, for amici curiae The Insurance Federation of Minnesota, Property Casualty Insurers Association of America, and National Association of Mutual Insurance Companies.

         SYLLABUS

         Under the plain language of Minn. Stat. § 604.18, subd. 3 (2016), "proceeds awarded" to an insured are capped by the insurance policy's limit.

         Affirmed.

          OPINION

          McKEIG, Justice.

         The question presented in this case is whether the "proceeds awarded" to an insured under Minn. Stat. § 604.18 (2016)-which authorizes the award of "taxable costs" when an insurer denies benefits without a reasonable basis-are capped by the insurance policy limit. The district court answered that question in the affirmative and held that Wilbur's underinsured-motorist policy limit capped the amount of his award under the plain language of section 604.18. Wilbur challenged that determination. The court of appeals affirmed after determining that the statute was ambiguous. Because we conclude that section 604.18 unambiguously caps "proceeds awarded" at the amount recoverable under the insurance policy, we affirm.

         FACTS

         On January 10, 2009, a driver rear-ended appellant John Wilbur's car. Wilbur suffered injuries that required surgery on his neck and caused permanent nerve damage. The at-fault driver's liability insurer paid $100, 000 to Wilbur, the full amount available under the policy. Wilbur's underinsured-motorist policy with respondent State Farm also had a $100, 000 coverage limit. Wilbur made a settlement demand on State Farm for the full $100, 000 available under the policy. State Farm initially offered and paid $1, 200. After further correspondence, State Farm offered an additional $26, 800 to settle the claim. Several months later, Wilbur declined the offer, served a complaint on State Farm alleging breach of contract, and claimed that he was entitled to the full amount recoverable under his policy with State Farm.

         In 2011, a jury returned a verdict in Wilbur's favor in the amount of $412, 764.63 as personal injury damages. The district court later reduced the verdict to $255, 956.59 to account for the at-fault driver's payment of $100, 000 and other collateral-source payments. The district court ultimately entered judgment in the amount of $98, 800, subtracting State Farm's initial $1, 200 payment from Wilbur's policy limit of $100, 000.

         After the jury's verdict on the breach-of-contract claim, Wilbur amended his complaint to add a claim under Minn. Stat. § 604.18, which permits an insured to recover "taxable costs" if an insurer unreasonably denies insurance benefits. The statute provides a remedy of "one-half of the proceeds awarded that are in excess of an amount offered by the insurer at least ten days before the trial begins or $250, 000, whichever is less." Minn. Stat. § 604.18, subd. 3(a)(1). After entering judgment on Wilbur's breach-of-contract claim, the district court held a ...


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