of Appeals Office of Appellate Courts.
W. Fluegel, Fluegel Law Office, Minneapolis, Minnesota; and
Charles D. Slane, TSR Injury Law, Bloomington, Minnesota, for
William L. Moran, HKM, P.A., Saint Paul, Minnesota, for
Michael L. Weiner, Yaeger & Weiner, PLC, Minneapolis,
Minnesota, for amicus curiae Minnesota Association for
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
the plain language of Minn. Stat. § 604.18, subd. 3
(2016), "proceeds awarded" to an insured are capped
by the insurance policy's limit.
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.
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.
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.
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 ...