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Employers Mutual Casualty Co. v. Richards

United States District Court, D. Minnesota

July 3, 2018


          Beth A. Jenson Prouty, ARTHUR, CHAPMAN, KETTERING, SMETAK & PIKALA, P.A., 500 Young Quinlan Building, 81 South Ninth Street, Minneapolis, MN 55402, for plaintiff.

          Matthew James Barber, SCHWEBEL, GOETZ & SIEBEN, 80 South Eighth Street, Suite 5120, Minneapolis, MN 55402, for defendant.



         Defendant Charles Richards was injured in a motorcycle accident. Richards seeks compensation under his auto-insurance policy with Plaintiff Employers Mutual Casualty Company (“EMC”), specifically under the Uninsured/Underinsured Motorist (“UIM”) Endorsement to his policy. EMC brought this action, seeking a declaration that it is not liable under its policy with Richards because an owned-vehicle exclusion in the UIM Endorsement precludes Richards from receiving the UIM benefits he seeks. The parties have filed cross-motions for summary judgment. Because the Court will conclude that Richards is not eligible for these benefits under the UIM Endorsement, the Court will deny Richards's motion for summary judgment, grant EMC's motion for summary judgment, and enter judgment for EMC.


         Charles Richards owned three motor vehicles that he insured through EMC. (Compl. ¶ 13, Aug. 7, 2017, Docket No. 1; Answer ¶ 9, Oct. 3, 2017, Docket No. 8; see Compl. ¶ 12, Ex. B (“Auto Policy”) at 1-2.) The policy specifically lists: a 1994 Honda, a 2002 Chevrolet, and a 2014 Honda. (Compl. ¶ 13; Answer ¶ 9.) Richards also owned a motorcycle, which he insured through a Progressive policy providing liability coverage but not UIM coverage. (Compl. ¶¶ 2, 9, 14; Answer ¶¶ 3, 5, 10; see also Compl. ¶ 9, Ex. A.)

         On September 11, 2016, Richards was injured in a motor-vehicle accident while operating his motorcycle. (Compl. ¶¶ 2, 10; Answer ¶¶ 3, 6.) Richards recovered $50, 000 from the at-fault driver - the liability limit under the at-fault driver's insurance policy - but this amount failed to cover all the costs of Richards's injuries. (Compl. ¶ 11; Answer ¶¶ 7, 35, 36.) Because Richards's Progressive motorcycle insurance did not include UIM coverage, he filed a claim with EMC, seeking compensation under the UIM Endorsement to his auto policy. (See Compl. ¶¶ 2, 16; Answer ¶¶ 3, 12.)

         Richards's UIM coverage is designed to cover Richards if he is injured by an uninsured motorist or if the cost of his injuries exceeds the limits of another, at-fault motorist's coverage. (See Compl. ¶ 12; Answer ¶ 8; Auto Policy at 29-32 (“UIM Endorsement”).) Richards's UIM coverage contains an owned-vehicle exclusion, which excludes coverage “for ‘bodily injury' sustained by any ‘insured': (1) While ‘occupying' any motor vehicle owned by that ‘insured' which is not insured for this coverage.” (Auto Policy at 30.) This case involves the application of this exclusion to the UIM coverage.

         Richards claims that, as a result of the injuries he sustained during the September 2016 motorcycle crash, he is entitled to UIM benefits under his policy with EMC. EMC contends that the UIM Endorsement excludes coverage because Richards was occupying a motor vehicle that he owned but did not insure under his policy with EMC. EMC brought this declaratory-judgment action, seeking a declaration that it is not required to pay Richards's claim under the UIM Endorsement.



         Summary judgment is appropriate where there are no genuine issues of material fact and the moving party can demonstrate that it is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). A fact is material if it might affect the outcome of the lawsuit, and a dispute is genuine if the evidence could lead a reasonable jury to return a verdict for either party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). A court considering a motion for summary judgment must view the facts in the light most favorable to the non-moving party and give that party the benefit of all reasonable inferences that can be drawn from those facts. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). “The interpretation of an insurance policy . . . is one of law” that is properly decided in a motion for summary judgment. Midwest Family Mut. Ins. Co. v. Wolters, 831 N.W.2d 628, 636 (Minn. 2013) (quoting Auto-Owners Ins. Co. v. Todd, 547 N.W.2d 696, 698 (Minn. 1996)).


         When interpreting an insurance policy under Minnesota law, “general principles of contract interpretation apply.” Lobeck v. State Farm Mut. Auto. Ins. Co., 582 N.W.2d 246, 249 (Minn. 1998). The Court must construe the terms of a policy “according to what a reasonable person in the position of the insured would have understood the words to mean.” Canadian Universal Ins. Co. v. Fire Watch, Inc., 258 N.W.2d 570, 572 (Minn. 1977). Accordingly, where words and phrases in a policy are ...

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