Case Title: Hennekens v. All Nat. Ins. Co.

Citation: 295 N.W.2d 84

Docket Number: 

State: minnesota

Court: Minnesota Supreme Court

Date: 1980-07-03T00:00:00Z

Document:
295 N.W.2d 84 (1980) Debra Burch HENNEKENS, Respondent, v. ALL NATION INSURANCE COMPANY, Appellant, Mutual Service Casualty Insurance Company, Respondent. No. 50270. Supreme Court of Minnesota. July 3, 1980. *85 Rothstein, Kaplan & Wolf and Howard L. Kaplan, St. Paul, for appellant. Paul G. Donlin, St. Paul, for Mutual Service Cas. Ins. Co. Klas & Klas, St. Paul, for Hennekens. Considered and decided by the court en banc without oral argument. SHERAN, Chief Justice. Defendant All Nation Insurance Company appeals from the order of the Ramsey County District Court denying its post-trial motions and from the judgment entered pursuant thereto. We affirm. Plaintiff Debra Burch Hennekens sought a declaratory judgment to determine the respective liability insurance coverage obligations of defendants All Nation Insurance Company and Mutual Service Casualty Insurance Company. The parties have stipulated to the facts underlying this controversy and the stipulation is set forth as follows: The district court concluded that the plaintiff should be permitted to stack the various policies so that Mutual Service would provide primary coverage not to exceed $15,000, All Nation would then provide up to $25,000 coverage and finally, Mutual Service again would provide coverage for the next $60,000 if such an amount would prove necessary by virtue of the award in the pending personal injury action. The district court relied upon Integrity Mutual Ins. Co. v. State Automobile & Cas. Underwriters Ins. Co., 307 Minn. 173, 239 N.W.2d 445 (1976). The sole issue presented is whether the district court erred in directing both defendant insurers to provide liability insurance coverage upon the priority of stacking employed in its decision. It is the appellant All Nation's focal argument that inasmuch as the "other insurance" clauses of the two policies are identical, there is no conflict between them and any and all insurance available to the owner of the vehicle from Mutual Service is primary insurance and that of All Nation becomes secondary. Additionally, it suggests that this court need never reach the question of an application of the "closeness to the risk" doctrine and that the trial court erred in its implementation. Olson v. Hertz Corp., 270 Minn. 223, 133 N.W.2d 519 (1965). In Integrity Mutual, this court was required to determine the appropriate apportionment of liability between two insurers of the same risk when the policies of insurance *87 contained conflicting "other insurance" clauses. We there applied the considerations outlined in Federal Ins. Co. v. Prestemon, 278 Minn. 218, 153 N.W.2d 429 (1967), that the respective policy coverages should be allocated "in light of the total policy insuring intent, as determined by the primary policy risks upon which each policy's premiums were based and as determined by the primary function of each policy." 307 Minn. at 175, 239 N.W.2d at 446. Such an allocation is accomplished by "stacking" the coverages of a given risk in the order of their closeness to the risk. The stacking priority in Integrity Mutual was essentially based upon the deceased driver's familial relationship with the insured and the existence of his own liability insurance coverage, leading the court to determine that the insuring intent was best satisfied by a finding that the coverage provided in connection with the vehicle involved in the collision was primary. The three coverages of the deceased driver's automobiles provided protection to him while he operated another vehicle and did not contemplate the specific risk as directly as that provided for the accident-causing instrumentality. In the instant case, there is no dispute that the policy issued by Mutual Service to Gerald Burch providing coverage with respect to the vehicle involved in the collision was correctly found to provide primary coverage to the extent of its $15,000 policy limits. Coverage for any damages ultimately to be awarded to the plaintiff in excess of that $15,000 was contemplated by the remaining policies issued both to Burch and Duane Hennekens, but a determination as to the order of their application rests upon a determination as to which policy more directly and which incidentally contemplated the specific risk. Although the question is not free from doubt, this court is of the view that the district court was correct in concluding that once the coverage for the specific instrumentality is exhausted, the next most closely connected coverage is that provided by All Nation. That policy contemplated that its insured Hennekens' operation of a vehicle would render that vehicle an "insured vehicle" and its occupant an additional insured. A more direct connection to the risk is found in the coverage providing protection for the operation of the accident-causing instrumentality than in that providing protection for other vehicles owned by Gerald Burch. Additionally, the insuring intent is furthered by this construction. Therefore, although the decision in the Integrity Mutual case is factually distinguishable, the principles discussed therein are applicable to a resolution of this dispute. Affirmed.