Title: Farmers Ins. Exch. v. Midwest Emery Frgt. Sys., Inc.

State: minnesota

Issuer: Minnesota Supreme Court

Document:

215 N.W.2d 623 (1974) FARMERS INSURANCE EXCHANGE, et al., Respondents, v. MIDWEST EMERY FREIGHT SYSTEMS, INC., et al., Appellants. No. 44184. Supreme Court of Minnesota. February 22, 1974. Jardine Logan & O'Brien and Graham N. Heikes, St. Paul, for appellants. Murnane, Murnane, Battis & Conlin and Thomas M. Conlin, St. Paul, for respondents. Heard before KNUTSON, C. J., and PETERSON, TODD, and SCOTT, JJ., and considered and decided by the court. SCOTT, Justice. Appeal from a summary judgment in favor of plaintiffs. We reverse. The facts are before us by stipulation of April 19, 1972: The pertinent requirements to be met by motor carriers operating in this state are set forth in the following statutes: Regulations of the Public Service Commission (formerly the Railroad and Warehouse Commission) expanded upon the language of the statutes above. Among these regulations are the provisions: The language of the surety bond is unambiguous and provides in part: It is factually important that Turenne's personal vehicle was insured with Farmers Insurance Exchange under a standard public liability policy which contained an "excess" clause providing that said policy would be secondary if Turenne was operating another vehicle that was also insured. In the facts before us, had the carrier been insured under the standard form insurance policy, that policy would have been primary. Therefore, as stated by the trial court: In granting plaintiffs' motion for summary judgment, the trial court found that the surety bond filed with the commission was "the equivalent of a standard form automobile liability insurance policy" and that defendants therefore had the primary obligation to the injured parties. With this we cannot agree. A surety bond is not an insurance policy. To find that the Public Service Commission, in accepting this bond, therefore construes the bond as an equivalent of a "standard form liability policy" providing primary coverage would seem to require the further conclusion that the commission's issuance of an "order for self-insurance" would also place the burden of primary liability upon the carrier. The mere fact that more than one form of security is accepted or provided for in the commission's rules or applicable statutes, either now or in the future, does not effectuate the excess clause of an operator's own personal insurance policy, unless the security is in fact an insurance policy. We are not persuaded by the argument on behalf of the plaintiff that we can judicially convert a surety bond into a standard insurance policy, nor do the above recited facts, statutes, or rules so convert the bond. The commission's ultimate statutory requirement undoubtedly is for the protection of the public. The commission having accomplished this objective, its actions cannot be determinative of a contractual question between private parties which is not within the intended legitimate scope of its function. As the language contained therein is unambiguous, we cannot construe the bond as requiring Seaboard Surety to undertake the defense or to pay the settlement. Rather, it merely guarantees that Seaboard would assume Midwest Emery's liability only if the latter were unable to make the payment.[1] The bond must be read as providing merely that guarantee, without the inclusion of the further conditions and ramifications of a regularly issued liability insurance policy. Accordingly, we must reverse the judgment of the trial court. Reversed. SHERAN, C. J., not having been a member of this court at the time of the argument and submission, took no part in the consideration or decision of this case. [1] See, Consolidated Systems, Inc. v. Allstate Ins. Co., 411 F.2d 157 (5 Cir. 1969); Nationwide Mutual Ins. Co. v. Peerless Ins. Co., 93 Ohio Law Abst. 150, 27 Ohio O.2d 293, 194 N.E.2d 154 (Ohio App.1963).