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Great West Casualty Co. v. Decker

United States District Court, D. Minnesota

January 7, 2019

Great West Casualty Company, Plaintiff,
Ruben Decker, Defendant, and Ruben Decker, Counterclaim Plaintiff,
Great West Casualty Company, Counterclaim Defendant.

          Tamara L. Novotny & Michael W. McNee, Cousineau, Van Bergen, for Plaintiff and Counterclaim Defendant.

          Gregory J. Johnson, for Defendant and Counterclaim Plaintiff.



         On December 21, 2012, an 1, 800-pound bale of hay tumbled off Ruben Decker's flatbed trailer and onto Decker's back, thereby injuring Decker. In the six years since this accident, Decker has tried, unsuccessfully, to recover insurance money from the insurer of his trailer, Great West Casualty Company. Throughout this time, Great West has steadfastly maintained that Decker is not entitled to insurance benefits under the plain language of his policy. The dueling summary judgment motions at issue here, which cover a variety of claims and counterclaims, are the culmination of this dispute.

         After carefully reviewing the record and applicable case law, the Court grants Great West's summary judgment motion in full, and dismisses Decker's counterclaim with prejudice.

         I. BACKGROUND

         A. The Parties

         Plaintiff and Counterclaim Defendant Great West Casualty Company (hereinafter “Great West”) is an insurance company with its principal place of business in Nebraska. (See Compl. [Doc. No. 1] ¶ 1; An. [Doc. No. 5] ¶ 4.)

         Defendant and Counterclaim Plaintiff Ruben Decker (hereinafter “Decker”) lives in Tea, South Dakota and was, at the time of the accident giving rise to this litigation, a commercial truck driver for KW Trucking, a Minnesota company. (See Compl. ¶ 2; An. ¶ 4.)

         Finally, Michael Selle (hereinafter “Selle”) lives in Fortuna, North Dakota and, at the time of the accident, ran a small loading center out of his family farm for hay being shipped from Canada to the United States. (See generally Def.'s Ex. C [Doc. No. 115-1] (“Selle Deposition”).) In short, Selle would unload hay from Canadian trucks, and then re-load said hay onto American trucks for further distribution. (See id. at 58.)[1] Although Selle is not a named party, he figures prominently in this litigation.

         B. The Insurance Policy

         In 2012, the KW Trucking fleet (and, by extension, Decker and his vehicle) was insured by a Great West commercial auto coverage policy. (See Pl.'s Ex. 1 [Doc. No. 107-1] (“Policy”).) Most importantly, the Policy provided no-fault (or “personal injury protection”) coverage up to $40, 000 and liability coverage up to $1, 000, 000. (Id.)

         With respect to no-fault coverage, Great West agreed to pay, “in accordance with the Minnesota No-Fault Act, ” certain medical and work-loss benefits “incurred with respect to ‘bodily injury' sustained by an ‘insured' caused by an ‘accident' arising out of the maintenance or use of a ‘motor vehicle' as a vehicle.” (Id. Personal Injury Protection § A.) However, in accordance with Minnesota law, Great West specifically excluded coverage for any injuries “aris[ing] out of conduct in the course of loading or unloading any ‘motor vehicle' unless the conduct occur[ed] while such person [was] ‘occupying' such motor vehicle.” (Id. § C.7; accord Minn. Stat. § 65B.43, subd. 3(2).) “Occupying, ” in this case, meant “in or upon, entering into, or alighting from.” (Policy Personal Injury Protection § F.4.)

         With respect to liability coverage, Great West agreed to pay “all sums an ‘insured' legally must pay because of ‘bodily injury' . . . caused by an ‘accident' or resulting from the ownership, maintenance, or use of a covered ‘auto.'” (Id. Liability Coverage § II.A.) The Policy further stated that Great West had a “right and duty to defend any ‘insured' against a ‘suit' asking for such damages.” (Id.) As relevant here, an “insured” included “anyone else while using with your permission a covered ‘auto' you own, hire, or borrow except, ” in the context of “moving property to or from a covered ‘auto, '” “anyone other than your ‘employees,' partners, members, a lessee or borrower of a covered ‘auto' or any of their employees.” (Id. § II.A.1.b(4).)

         C. The December 21, 2012 Accident

         On December 21, 2012, Decker drove his semi-truck (and attached flatbed trailer) to Selle's farm in Fortuna, North Dakota. (See Def.'s Ex. B at 34 [Doc. No. 115-1] (“Decker Deposition”).) Decker intended to pick up a load of hay and then deliver it to Rock Valley, Iowa. (See Def.'s Ex. H [Doc. No. 115-4] (“Spot Contract”).) When Decker arrived at Selle's farm, he parked and exited his vehicle. (See Decker Dep. at 117-18.) Selle then began to load 1, 800-pound bales of hay onto Decker's trailer with his tractor, while Decker stood and watched. (See Pl.'s Ex. 3 at 78 [Doc. No. 107-1] (“Selle Deposition II”); Decker Dep. at 142.)[2]However, after Selle loaded a stack of hay bales onto Decker's trailer, Decker would secure the load by throwing a strap over the top of the bales. (See id. at 65-68.) Because of a device called a “cheater bar, ” Decker could perform this task without stepping onto the trailer. (Id. at 65-66.)

         The day took a tragic turn, when, for unclear reasons, at least two hay bales fell off Decker's trailer (from a height of eight to ten feet) and onto Decker, while Decker was preparing to secure a load. (See id. at 72, 143.) According to Decker, at the time of the accident, he was “bending underneath the trailer, ” and “reaching [down] to hook the strap to the trailer.” (Id. at 68; cf. Pl.'s Ex. 4 (“Dec. 27, 2012 Internal Great West Notes”) (stating that, in Decker's initial conversation with the Great West adjuster, he told the adjuster that, at the time of the accident, he was “ready to throw another strap” over the hay bales, and “had his back to the trailer”).) However, by Decker's own admission, his hand's contact with the underside of the trailer constituted his “only physical contact” with his vehicle during the entire loading process. (Id. at 117; accord Selle Dep. II at 89 (affirming that Decker was “out of his truck” “the entire time” Selle was loading Decker's trailer).) Decker suffered serious injuries to his ribs and femur as a result of this accident, and had to be airlifted to a hospital in Minot, North Dakota, where he was held for three days. (See Pl.'s Ex. 4 [Doc. No. 107-1] (“Dec. 27, 2012 Claim Notes”); see also Pl.'s Ex. 28 at 4 [Doc. No. 107-3] (“Def.'s Answers to Interrogatories”) (asserting that Decker has incurred at least $65, 000 in medical expenses).)

         Importantly, however, neither Selle's tractor nor premises were insured in December 2012. (See Selle Dep. II at 108, 162.) In fact, about one month before the accident, Selle had cancelled the “general liability insurance and insurance that covered [his] equipment.” (Id. at 162.)

         D. The Subsequent Dispute Over Insurance Coverage

         Shortly thereafter, Decker contacted Great West about possible no-fault insurance coverage. However, on January 2, 2013, Great West advised Decker by letter that it would not provide no-fault benefits because Decker's “injuries did not arise out of an accident that occurred while he was occupying his motor vehicle, ” i.e., Decker was “standing on the ground” when the hay bales hit him. (Pl.'s Ex. 5 [Doc. No. 107-1] (“Jan. 2, 2013 Denial Letter”); see also supra at 3 (describing the “loading and unloading” exception to no-fault coverage).) Several months later, on September 20, 2013, Decker's counsel, Brent Schafer, advised Great West that, denial letter notwithstanding, Decker would be pursuing the $1 million liability policy limit (presumably on the theory that KW Trucking, a named insured on the Policy, was negligent), along with “other coverage.” (Pl.'s Ex. 8 [Doc. No. 107-2] (“Sept. 20, 2013 Schafer Letter”).)

         A few months later, Schafer advised Great West that Decker would not pursue a negligence claim against KW Trucking under the Policy's liability provision because “further investigation” revealed “no identifiable acts of negligence on behalf of KW Trucking.” (See Pl.'s Ex. 10 [Doc. No. 107-2] (“Nov. 27, 2013 Schafer Letter”).) Instead, Decker, through Schafer, re-asserted his no-fault claim, on grounds that Decker was, in fact, “occupying” his trailer at the time of the accident (because he was “in contact with the vehicle when the hay bale fell”). (See Pl.'s Ex. 11 [Doc. No. 107-2] (“Feb. 27, 2014 Schafer Letter”).) Decker also informed Great West that he would bring suit if Great West did not promptly pay this claim. (Id.) However, on March 25, 2014, Great West again denied Decker's claim. (See Pl.'s Ex. 14 [Doc. No. 107-2] (“Mar. 25, 2014 Denial Letter”).)[3]

         E. The North Dakota Litigation and Further Developments

         Almost a year later, on February 27, 2015, Decker added Great West as a defendant to his ongoing lawsuit against Selle in North Dakota state court. (See Pl.'s Ex. 16 [Doc. No. 107-2] (“Decker First Am. North Dakota Compl.”).)[4] For unclear reasons, in this complaint Decker only sought uninsured motorist benefits from Great West. (Id. Prayer for Relief.) Great West moved for summary judgment, but, before this motion could be decided, Decker agreed to dismiss Great West from the North Dakota suit with prejudice. (See Pl.'s Exs. 19-20 [Doc. No. 107-2].) Accordingly, on March 1, 2016, Judge Sjue of the North Dakota district court dismissed Great West from the suit with prejudice. (Id.)

         This did not end the matter. Sometime in 2016, Decker appeared to obtain another counsel, Gregory Johnson. Johnson contacted Great West in August and September of 2016 and, not only demanded (once again) that Great West pay Decker $40, 000 in no-fault benefits, but also suggested that Great West had a duty to defend and indemnify Selle from Decker's North Dakota negligence claim, on grounds that, as a “permissive user” of Decker's vehicle at the time of the accident, Selle was an “insured” under the Policy. (See generally Def.'s Exs. P-Q [Doc. No. 115-4] (correspondence between Johnson and Great West's counsel); see also supra at 3 (defining “insured” under the liability portion of the Policy).) Perhaps not coincidently, shortly after this correspondence Selle's counsel in the North Dakota litigation contacted Great West and requested that Great West “defend the Selles and indemnify them.” (See Pl.'s Ex. 21 [Doc. No. 107-2] (“Sept. 9, 2016 Selle Letter”).) Great West denied this request, citing the “moving property exclusion” to liability coverage delineated above. (See Pl.'s Ex. 22 [Doc. No. 107-2] (“Oct. 17, 2016 Selle Denial Letter”).)[5]

         F. Procedural History

         Faced with this disagreement, on September 14, 2016 Great West filed the instant declaratory judgment action to determine its rights, obligations, and liability under the Policy. Decker filed an answer and counterclaim (which he later supplemented), in which he asserted Minnesota Consumer Fraud Act, breach of contract, and breach of the implied covenant of good faith and fair dealing counterclaims, along with his own request for declaratory relief. (See An. & Counterclaim at 35; Supp. Counterclaim at 32.) Following a lengthy discovery period, in which the parties briefed and argued numerous discovery motions before Magistrate Judge Bowbeer, the parties cross-moved for summary judgment in August 2018. The parties simultaneously filed motions and opposition motions, and the Court heard oral argument on September 28, 2018. (See Pl.'s Mem. in Support of Summ. J. [Doc. No. 106] (“Pl.'s Br.”)); Def.'s Mem. in Support of Summ. J. [Doc. No. 113] (“Def.'s Br.”); Pl.'s Mem. in Opp. to Def.'s Summ. J. Mot. [Doc. No. 117] (“Pl.'s Opp. Br.”); Def.'s Mem. in Opp. to Pl.'s Summ. J. Mot. [Doc. No. 119] (“Def.'s Opp. Br.”).)


         Summary judgment is proper if there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. See Fed. R. Civ. P. 56(a). In considering a summary judgment motion, the Court must “view[] the evidence in the light most favorable to the nonmoving party.” Grinell Mut. Reinsurance Co. v. Schwieger, 685 F.3d 697 (8th Cir. 2012). However, a party opposing summary judgment “‘must set forth specific facts showing that there is a genuine issue for trial,' and ‘must present affirmative evidence in order to defeat a properly supported motion for summary judgment.'” Ingrassia v. Schafer, 825 F.3d 891, 896 (8th Cir. 2016) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 256-57).

         Moreover, because this case comes to the Court by way of diversity jurisdiction, and because the insurance contract at issue is a Minnesota contract, the Court must apply Minnesota substantive law. See Netherlands Ins. Co. v. Main Street Ingredients, LLC, 745 F.3d 909, 913 (8th Cir. 2014). In applying Minnesota law, the Court must “predict how the Supreme Court of Minnesota would rule [on the facts of this case], and . . . follow decisions of the intermediate state court when they are the best evidence of Minnesota law.” Sletten & Brettin Orthodontics, LLC v. Continental Cas. Co., 782 F.3d 931, 934 (8th Cir. 2015); see also Grinnell, 685 F.3d at 703 n.5 (noting that even “unpublished” Minnesota state court of appeals decisions “can be of persuasive value” to a federal court sitting in diversity jurisdiction).

         Although the parties submitted around 200 pages of briefing, and divide this dispute into various issues and sub-issues, the Court finds that, at bottom, three overarching disputes underlie this case: (1) whether Decker is entitled to no-fault benefits under the Policy and Minnesota law, (2) whether Great West is entitled to summary judgment on Decker's standalone Minnesota Consumer Fraud Act counterclaim, [6] and (3) whether Minnesota law compels Great West to defend and indemnify Selle as an “insured” under the Policy, on grounds that the “moving property exclusion” to liability coverage described above is void and unenforceable against Minnesota public policy. The Court will address each dispute in turn.[7]

         A. Whether Decker Is Entitled to No-Fault Benefits

         1. The Law

         Minnesota law requires auto insurers to provide their insureds with $40, 000 in no-fault benefits for “all loss[es] suffered through injury arising out of the maintenance or use of a motor vehicle.” Minn. Stat. § 65B.44, subd. 1(a). However, the law allows insurers to deny coverage for injuries arising out of “conduct in the course of loading and unloading the vehicle unless the conduct occurs while [the insured was] occupying, entering into or alighting from [the vehicle].” Id. § 65B.43, subd. 3(2) (emphasis added). As noted above, the Policy traces this language almost precisely. See supra at 3. The only difference is that, while Minnesota law does not specifically ...

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