Title: Dairyland Ins. Co. v. Implement Dealers Ins. Co.

State: minnesota

Issuer: Minnesota Supreme Court

Document:

199 N.W.2d 806 (1972) DAIRYLAND INSURANCE COMPANY, Appellant, v. IMPLEMENT DEALERS INSURANCE CO., Respondent. No. 43431. Supreme Court of Minnesota. July 28, 1972. *807 Hanratty & Kline, Minneapolis, for appellant. Murnane, Murnane, Battis & Conlin and Robert T. White, St. Paul, for respondent. Heard before KNUTSON, C. J., and TODD, KELLY, and MacLAUGHLIN, JJ. MacLAUGHLIN, Justice. This is an appeal from a judgment of the district court holding that plaintiff, Dairyland Insurance Company, hereafter Dairyland, was not entitled to recover from defendant, Implement Dealers Insurance Company, hereafter Implement, under certain stipulated facts. We affirm the trial court. On February 14, 1969, one Michael Lee Fahey was involved in an automobile accident while driving a car loaned to him and owned by Clarence and Alfred Fischer, doing business as Fischer Olds, a partnership. Fahey had taken his car to Fischer Olds to be repaired, and the accident-involved automobile had been provided for his temporary use during the repair period. At the time of the accident Fahey's automobile was insured by Dairyland, and the Fischer Olds automobile was covered by a general garage liability policy issued by Implement. The limits of the Dairyland policy were $10,000 per person and $20,000 per accident for personal injury and $5,000 for property damage arising out of one accident, and the policy limits for Implement were $50,000 per person and $100,000 per accident for personal injury and $5,000 for property damage arising out of one accident. As a consequence of the accident of February 1969, Fahey and Fischer Olds were sued by injured third parties. The claims of the third parties were settled by the respective insurance carriers, but the question of coverage was reserved and an action for declaratory judgment was commenced by Dairyland against Implement requesting, in effect, that Implement be required to pay the settlement amount. The trial court found in favor of Implement, and Dairyland has appealed to this court. The Dairyland policy issued to Fahey included the following applicable provisions: The Dairyland policy goes on to say in Condition 9: This type of provision is known in the insurance industry as an excess clause. The Implement policy issued to Fischer Olds had the following applicable provisions: The Implement policy also contained an endorsement reading in part as follows: The provision found in the endorsement is known in the insurance industry as a non-liability or an escape clause. The issue before us is whether the escape clause in the Implement policy on the accident-involved automobile denies coverage to Fahey, which in turn renders Fahey's insurer, Dairyland, solely liable to the third parties under the facts of this case. We hold that it does. Both parties refer to our decision in Federal Ins. Co. v. Prestemon, 278 Minn. 218, 153 N.W.2d 429 (1967). There, also, an automobile owned by a garage and loaned to a customer was involved, and the customer's insurance policy contained an excess clause and the garage's policy contained an escape clause. In the Prestemon case, we set forth certain criteria for determining the respective responsibility of insurers, including the following (278 Minn. 229, 153 N.W.2d 436): We also stated as a general rule that where one policy contains an excess clause and the other contains an escape clause, liability will be imposed on the latter. There are important differences between the policy on the accident-involved automobile in the Prestemon case and the policy on the accident-involved automobile in this case. The policy on the accident-involved automobile in the Prestemon case contained the following pertinent provisions (278 Minn. 222, 153 N.W.2d 432): The definition of insured in Prestemon was as follows (278 Minn. 222, 153 N.W.2d 432): The garage operations provisions defining "persons insured" were amended by an endorsement which provided: It was asserted in the Prestemon case that these provisions meant that the customer-driver of the accident-involved car was not insured at all by the garage policy. This court, in discussing who was included within the definition of the words "any other person" in the "Hazards" section of the policy, said (278 Minn. 224, 153 N.W. 2d 433): We went on to say (278 Minn. 227, 153 N.W.2d 435): The Prestemon case was decided in October 1967. Possibly in response to our invitation in Prestemon to define more *811 carefully who was included as an insured under the garage policy, the endorsement quoted above was included in the Implement policy. The trial court in his memorandum stated in part as follows: We agree with the trial court. We have many times held that where there is no ambiguity in an insurance policy, there is no room for construction. Contracts of insurance must be construed according to the terms the parties have used, and the language used must be given its ordinary and usual meaning so as to give effect to the intention of the parties as it appears from the contract. Bobich v. Oja, 258 Minn. 287, 104 N.W.2d 19 (1960); Simon v. Milwaukee Auto. Mutual Ins. Co., 262 Minn. 378, 115 N.W.2d 40 (1962); Lang v. General Ins. Co., 268 Minn. 36, 127 N.W.2d 541 (1964). Endorsements attached to an insurance contract are part of the contract, and the endorsements and the policy must be construed together. They should be construed, if possible, so as to give effect to all provisions, but where provisions in the body of the policy conflict with an endorsement, the provision of the endorsement governs. Wyatt v. Wyatt, 239 Minn. 434, 58 N.W.2d 873 (1953); Bobich v. Oja, supra. The language used in the endorsement to the Implement policy is clear and unambiguous. Under the provisions of the endorsement, garage customers were not insureds if there was "other valid and collectible insurance, whether primary, excess or contingent, available to the garage customer and the limits of such insurance are sufficient to pay damages up to the amount of the applicable financial responsibility limit." Inasmuch as there was such other insurance in the Dairyland policy, and notwithstanding the presence of the excess clause, Fahey was not insured under the Implement policy. We feel constrained to say that the patience of this court in struggling with the war of semantics among insurance companies is not inexhaustible. However, under the stipulated facts of this case, and in view of the Prestemon case, we affirm the trial court. Affirmed.