# U ni te d S ta te s Co ur t of A pp ea ls
For the Eig hth Circu it

__ __ __ __ __ __ __ __ __ __ __ __ __ _

No. 1 3- 26 79

__ __ __ __ __ __ __ __ __ __ __ __ __ _

Occi de nt al Fir e & Ca su al ty Com pa ny

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el la nt

v.

Ada m So czynsk i, as Trus te e fo r th e he irs an d ne xt of ki n of Am y So czynsk i, de ceas ed

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll ee

Tho m as Hip p; Hip p's Truc ki ng , Inc

.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t s

__ __ __ __ __ __ __ __ __ __ __ __ __ _

No. 1 3- 29 49

__ __ __ __ __ __ __ __ __ __ __ __ __ _

Occi de nt al Fir e & Ca su al ty Com pa ny

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff - App el la nt

v.

Ada m So czynsk i, as Trus te e fo r th e he irs an d ne xt of ki n of Am y So czynsk i, de ceas ed

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll ee

Tho m as Hip p; Hip p's Truc ki ng , Inc

.

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t s__ __ __ __ __ __ App eal fro m

Uni te d S ta te s Di st ric t Co ur t fo r th e Dis tri ct of M in ne so ta - Mi nn eap ol is

__ __ __ __ __ __

Su bm it te d: May 13, 2 01 4 Fil ed : Se pt em

be r 2, 2 01 4

__ __ __ __ __ __

Befo re BYE, MELLOY, and BENTON, Circu it Ju dg es

.

__ __ __ __ __ __

BYE, Cir cu it Ju dg e.

Thi s is an in su ra n c e co ve rag e di sp ut e ari si ng ou t of a fat al acci de nt

. The

di st ric t co ur t de te rm in ed a bo bt ai l p ol ic y is su ed to Hip p's Truc ki ng , Inc ., pro vi de d 1

co ve rag e fo r da m a g e s a r i si ng ou t of a co ll is io n in vo lv in g tru ck er Tho m as Hip p's

se m i-t ract or an d tra il er. The di st ric t co ur t al so de te rm in ed the bob ta il po li cy pr ov id ed
$1 m il li on in co ve rag e. W e aff irm.

I

On Mar ch 10

, 20 09

, Tho m as Hip p was dri vi ng hi s sem i-t ract or an d tra il er on

a two -la ne ro ad ne ar Ham Lak e, Mi nn es ot a, aft er lo ad in g win d to wer ou tri gg ers on to 2

th e tra il er. On a gr ad ua l curv e in th e ro ad

, Hip p's tra il er cros se d th e cen te r li ne an d

The Hon or ab le Jo hn R. Tun he im

, Uni te d St at es Dis tri ct Ju dg e fo r th e Dis tri ct 1
of Mi nn es ot a.

Out rig ge rs are rem ov ab le st eel st ru ct ur es th at can be at t a c h e d to a tra il er to 2

m ak e m or e flo or sp ace av ai la bl e or to di st rib ut e t h e w e i g h t of a lo ad di ffer en tl y , al lo win g t ru ck dri ve rs to ha ul va rio us types of c arg o.

-2

-c o l l i d e d w i t h a ve hi cl e dr iv en by Am y So czynsk i. Am

y di ed as a res ul t of th e

co ll is io n.

At th e ti m e of th e acci de nt
, Hip p's se m i-t ract or an d tra il er were in su red by two

se pa rat e in su ran ce po li ci es

. The fir st po li cy was i s s u e d by Great W es t In su ran ce
Co m pa ny (Grea t W es t) to Airl in e Tran sp or ta ti on Sp eci al is ts
, In c., (ATS), a fed eral ly

li cen se d m ot or carr ie r. Hip p ha d be en ha ul in g carg o ex cl us iv el y fo r ATS fo r se ve ral

y ears an d ha d a co nt in uo us le as e ag reem en t wit h ATS at th e ti m e of th e acci de nt

. The

Great W es t po li cy w a s in te nd ed to co ve r Hip p whi le he was ha ul in g co m m erci al

lo ad s o n b eh al f of

ATS.

A se co nd po li cy was is su ed to Hip p's Truc ki ng by Occi de nt al Fi re & Cas ua lt y
Co m pa ny of Nor th Caro li na (Occi de nt al ). The Occi de nt al po li cy was a no n- tru ck in g

us e po li cy , al so refe rred to as a bo bt ai l po li cy

. A bo bt ai l po li cy is in te nd ed to pr ov id e

co ve rag e fo r a tru ck er whi le a se m i-t ract or is be in g dr iv en wit ho ut a tra il er, or whi le

th e tr uc ke r is op erat in g o ut si de th e se rv ic es of a fed eral ly lice ns ed m ot or carr ie r.

Fo ll owi ng th e acci de nt
, Ada m So czynsk i, Am y 's wid owe r, su ed Hip p in

M i n n e s o t a st at e co ur t al le gi ng th e acci de nt was cau se d by Hip p's ne gl ig en ce. Alt ho ug h Hi pp was n ot ha ul in g a n ATS l oa d a t t he ti m e o f th e acc id en t – Hip p h ad

pu rch as ed t h e w i n d t owe r ou tri gg ers to m ak e hi s tra il er m or e m ark et ab le to ot he r

m ot or carr ie rs in th e ev en t he qu it wor ki ng fo r ATS – Ada m no ne th el es s am en de d hi s

co m pl ai nt to ad d A TS as a de fen da nt

. Ada m al le ge d Hip p was op erat in g hi s se m itra ct or at th e ti m e of th e acci de nt wit h th e "p erm is si on an d co ns en t" of an d "u nd er th e

au th or it y of [ATS]" pu rs ua nt to th e co nt in u o us le as e ag reem en t be twee n Hip p an d

ATS.

Dur in g th e co ur se of th e st at e co ur t acti on , Ada m de m an de d th e po li cy li m it s fo r bo th th e Great W es t po li cy an d th e Occi de nt al bo bt ai l po li cy

. Occi de nt al refu se d

to te nd er th e li m it s of th e bo bt ai l po li cy

. Not wit hs ta nd in g th e fact th at Hip p was no t

-3

-ha ul in g a co m m erci al lo ad fo r ATS a t t he ti m e of th e acci de nt , Gr eat W es t de ci de d

to te nd er it s po li cy li m it s of $1 m i l l i o n

. Great W es t st ip ul at ed th at it s "o ffer an d

rel eas e is m ad e w i t h th e un de rs ta nd in g th at [ATS] wou ld m ai nt ai n it s de ni al of

li ab il it y ," but th at "[d ]ue to th e po ss ib il it y of ex po su re to a ve rd ic t grea tl y in ex ces s of po li cy li m it s

. . . Great W es t

. . . m ad e a bu si ne ss de c i s i o n t o t e nd er it s li ab il it y li m it s d es pi te it s av ai la bl e d efen se s." As p art of th e se tt le m en t, Hi pp ass ig ne d a ny

po te nt ia l cl ai m s h e m ay

ha ve ag ai ns t Occ id en ta l t o Ad am

.

As an ad di ti on al pa rt of th e se tt le m en t, th e pa rti es ap po in te d an arb it r a to r to
de ci de th e am ou nt of da m ag es

. The arb it rat or de te rm in ed th e to ta l da m ag es fro m th e acci de nt were $2 ,7 5 0

, 0 00

. The st at e co ur t fo un d th e arb it rat or 's da m ag e award

reas on ab le , o ffs et th e $ 1 m il li on set tl em en t wi th Great W es t, an d e nt ered jud gm en t

ag ai ns t Hip p in th e am ou nt of $1 ,75 0,0 00

. Ada m ag reed no t to ex ecu te th e jud gm en t

ag ai ns t Hip p pe rs on al ly, bu t res erv ed th e rig ht to pu rs ue Occi de nt al fo r th e li m it s of

th e bo bt ai l po li cy

. The pa rti es ga ve Occi de nt al no ti ce of th ei r in te nt to en te r in to th e

se tt le m en t as well as a co py of th e ex ecu te d a gr eem en t.

Afte r th e st at e co ur t se tt le m en t, Occi de nt al fil ed a co m pl ai nt in fed eral di st ric t

co ur t se ek in g a de cl arat or y jud gm en t th at it s bo bt ai l po li cy di d no t pr ov id e co ve rag e fo r th e acci de nt

. Ada m fil ed an an swe r an d co un te rcl ai m

. In th e co un te rcl ai m , Ada m

as ke d th e co ur t to de cl are th at th e Occi de nt al po li cy pr ov id ed co ve ra g e fo r th e acci de nt
, de te rm in e th e po li cy li m it s to be $1 m il li on , an d a ward da m ag es ba se d on

Occi de nt al 's b ad fai th in fai li ng to ten de r it s p ol ic y li m it s i n t he st at e co ur t ac ti on

.

Occi de nt al an d Ada m bo th fil ed m ot io ns fo r su m m ary jud gm en t. In it s m ot io n, Occi de nt al rel ie d up on a Non -Tru ck in g en do rs em en t in th e bo bt ai l po li cy whi ch

st at ed "[t ]his in su ran ce do es no t ap pl y at an y ti m e th at [ H i p p ] is op erat in g,

m ai nt ai n i ng , or us in g a co ve red au to fo r or on th e be ha lf of an y ot he r pe rs on or

or ga ni zat io n." Occi de nt al arg ue d Hip p was op erat in g hi s se m i-t ract or on be ha lf of

ATS at th e ti m e of th e acci de nt
, an d th us th e bo bt ai l po li cy di d no t pr ov id e co ve rag e.

-4

-O c c i d e n t a l fu rth er arg ue d Ada m sh ou ld be jud ic ia ll y es to pp ed fro m arg ui ng th e

bo bt ai l po li cy pr ov id ed co ve rag e fo r th e acci de nt be cau se he ha d al read y reco ve red

un de r th e Great W es t po li cy aft er al le gi ng Hip p was op erat in g hi s tru ck un de r ATS's

au th or i t y a t t h e ti m e of th e acci de nt

. The pa rti es al so di sp ut ed th e am ou nt of

co ve rag e av ai la bl e un de r th e bo bt ai l po li cy ba se d up on a co nf li ct be t w e e n th e de cl arat io ns pa ge – whi ch sa id t h e p o l i c y l im it s were $5 00 ,00 0 – an d a "M on th ly Paym en t an d Rep or ti ng End or se m en t" la be le d Fo rm AA 19 03 – whi ch sa id th e po li cy li m it s wer e $ 1 m il li on

.

The di st ric t co ur t gr an te d Ada m 's m ot io n f o r s u mm ary jud gm en t an d de ni ed

Occi de nt al 's m ot io n. The di st ric t co ur t de te rm in ed Ada m was no t jud ic ia ll y es to pp ed

fro m pu rs ui ng co ve rag e un de r th e bo bt ai l po li cy de sp it e ha vi ng al le ge d in st at e co ur t
th at Hip p was op erat in g hi s se m i-t ract or un de r th e au th or it y of ATS at th e ti m e of th e acci de nt
, an d d e s p i t e ha vi ng reco ve red un de r ATS's po li cy in th e se tt le m en t wit h

Great W es t. The di st ric t co ur t fu rth er de te rm in ed th e bo bt ai l po li cy 's Non -Tru ck in g

en do rs em en t di d no t pr ecl ud e co ve rag e be cau se Hip p was on a pe rs on al erra nd to
ha ul hi s own win d to wer ou tri gg ers an d th us no t act in g on be ha lf of ATS at th e ti m e of th e acci de nt

. Fi na ll y , th e d i st ric t co ur t de te rm in ed th e bo bt ai l po li cy was

am bi gu ou s wit h res pe c t t o t h e po li cy li m it s an d res ol ve d th e am bi gu it y ag ai ns t
Occi de nt al

.

Fo ll owi ng th e su m

m ary jud gm en t de te rm in at io n, Ada m as ke d th e co ur t to

vo lu nt ari ly di sm is s hi s ba d fai t h c l a i m

. The di st ric t co ur t di sm is se d th e ba d fai th

cl ai m an d e nt ered a fi na l ju dg m en t. Thi s t im el y ap pe al fol lo wed

.

II

W e r e vi ew th e di st ric t co ur t's gr an t of su m m ary jud gm en t de no vo

. St ei n v. Ch as e Hom e Fi n., LLC, 66 2 F.3 d 97 6, 97 9 (8 th Ci r. 20 11 ). Si m il arl y , we rev ie w th e di st ric t co ur t's in te rp ret at io n of an in su ra nc e po li cy de no vo

. Mac he ca Tran sp

. v.

-5

-P h i l a

. I n d em

. In s. Co

., 64 9 F.3 d 66 1, 66 7 (8 th Ci r. 20 11 ). W e rev ie w th e di st ri c t

co ur t's refu sa l to ap pl y th e do ct rin e of jud ic ia l es to pp el o n l y f o r an ab us e of

di sc ret io n, h owe ve r, be cau se th e do ct rin e is on e of eq ui ty in vo ke d at th e di st ric t

co ur t's di sc ret io n. See Cap el la Uni v., In c. v. Exe c. Ri sk Sp eci al ty In s. Co

., 61 7 F.3 d

10 40 , 10 51 (8t h C ir. 2 01 0)

.

A

Occi de nt al fir s t co nt en ds th e di st ric t co ur t ab us ed it s di sc ret io n whe n it

de cl in ed to ap p l y t h e d o ct rin e of jud ic ia l es to pp el to pr ev en t Ada m fro m pu rs ui ng

co ve rag e u nd er t he bo bt ai l p ol ic y

.

Ju di ci al es to pp el is a do ct rin e crea te d by co ur ts to pr ev en t pa rti es fro m ta ki ng

co nt rary po si ti on s du rin g th e co ur se of a la wsu it

. In Mi n n e so ta (wh ic h ha s no t
fo rm al ly recog ni zed th e d oc tri ne ), th ree c on di ti on s m us t b e m et be fo re the do ct rin e

wou ld ap pl y :

Fi rs t, th e pa rty pr es en ti ng th e al le ge dl y in co ns is te nt th eo rie s m us t ha ve pr ev ai le d in it s or ig in al po si ti on (a li ti ga nt i s n o t fo rev er bo un d to a lo si ng po si ti on ). Seco nd , t he r e m us t be a cl ear in co ns is te nc y be twee n th e or ig in al an d su bs eq ue nt po si ti on of th e pa rty. Fi na ll y , th ere m us t no t be an y di st in ct or d iff

eren t i ss ue s o f fac t i n t he pro ceed in gs

.

St at e v. Pen dl et on , 70 6 N.W .2d 50 0, 50 7 (Mi nn

. 20 05 ) (in te rn al qu ot at io n m ark s an d

ci ta ti on s om it te d)

. Im

po rta nt ly, wit h res pe ct to whe th er a pa rty ha s "p rev ai le d in it s 3

or i g i n a l po si ti on ," th e Mi nn es ot a Su pr em e Co ur t st at ed "jud ic ia l es to pp el req ui res

Co ur ts in ou r ci rcu it are bo un d to ap pl y st at e la w el em en ts of jud ic ia l es to pp el 3
in a di ve rs it y cas e. See Mo nt erey Dev

. Co rp

. v. Lawy er's Tit le In s. Co rp ., 4 F.3 d 60 5, 6 0 8- 09 (8 th Ci r. 19 93 ); se e al so Sp en cer v. Ann et t Hol di ng s, In c.,

__ F.3 d

_ _ ,

_ _ , 20 14 W L 30 56 81 1, at *6 (8 th Ci r. Ju ly 8, 20 14 ) (r e a f f i r mi ng ou r de ci si on in
Mo nt erey).

-6

-th at th e pa rty ha ve act ua ll y pr ev io us ly su ccee de d at tri al on a f a c t ua l th eo ry in co ns is te nt to th e o ne in qu es ti on ." Id

.

Occi de nt al co nt en ds th e di st ric t co ur t ab us ed it s di sc ret io n whe n it de cl in ed to

ap pl y jud ic ia l es to pp el he re be cau se Ada m pr es en te d on e th eo ry i n st at e co ur t, i.e.,

th at Hip p op erat ed hi s se m i-t ract or un de r th e au th or it y of ATS at th e ti m e of th e acci de nt
, pr ev ai le d on su ch th eo ry whe n Great W es t te nd ered it s po li cy li m it s to se tt le

th e cas e, bu t th en rev ers ed co ur se in fed eral co ur t by co nt en di ng Hip p was act in g on hi s o wn b eh al f at th e ti m e o f th e acc id en t.

W e di sa gr ee th e di st ric t co ur t ab us ed it s di sc ret io n un d e r th e ci rcu m st an ces

pr es en t in th is cas e. Occi de nt al ha s no t sh own Ada m ev er "p rev ai le d" in st at e co ur t,
th at is

, pe rs ua de d th e st at e co ur t it se lf to ad op t Ada m 's li ti ga ti on po si ti on

. The cl ai m

ag ai n s t G reat W es t res ul te d in a se tt le m en t in whi ch th e in su rer sp eci fic al ly st at ed

ATS was "m ai nt a i n [ in g] it s de ni al of li ab il it y ," an d Great W es t was se tt li ng as "a

bu si ne ss de ci si on

. . . de sp it e it s av ai la bl e de fen se s

. " I n o t h er wor ds

, Ada m

pe rm is si bl y rai se d al te rn at e th eo rie s ag ai ns t bo th in su ran ce carr ie rs in st at e co ur t, an d

th en pe rs ua de d on e in su rer to se tt le be fo re th e st at e co ur t ev er ad jud ic at ed th e m eri ts
of th e cl ai m

. U nd er Mi nn es ot a's reci ta ti on of th e do ct rin e of jud ic ia l es to pp el

, pe rs ua di ng an op po si ng pa rty to se tt le pr io r to an ad jud ic at io n on th e m eri ts is no t th e

s a me a s h a v i ng a co ur t ad op t a li ti ga nt 's po si ti on , an d th us th e di st ric t co ur t wa s cl earl y wit hi n it s di sc ret io n whe n it de cl in ed to ap pl y t he do ct rin e. See Pen dl et on , 70 6 N.W .2d at 50 7 (in di cat in g a pa rty m us t su ccee d "at tri al " be fo re th e do ct rin e wil l

ap pl y ); cf. Su nn y Fres h Fo od s, In c. v. Mi ch ael Fo od s, In c., 2 0 5 F

. Su pp

. 2d 10 77

, 10 90 (D. Mi nn

. 20 0 2 ) ( " J u d ic ia l es to pp el do es no t hi ng e on whe th er th e pa rty

pr ev io us ly arg ue d a po si ti on , bu t in st ead hi ng es on whe th er th at pa rty was su cces sf ul

in ha vi ng th e co ur t ad op t t ha t p os it io n." ). 4

W e no te th e ci rcu it sp li t reg ard in g whe th e r s e t t l i n g a cl ai m is th e sa m e as 4

pe rs ua di ng a co ur t to ad op t a pa rty's po si ti on

. Co m pa re Kon st an ti ni di s v. Ch en , 62 6

-7

-B

Occi de nt al ne xt co nt en ds th e di st ric t co ur t erre d whe n it co nc lu de d th e bo bt ai l

po li cy pr ov id ed co ve rag e to Hip p at th e ti m e of th e acci de nt

. I n th is cas e, th e

co ve rag e di sp ut e tu rn ed on a ph ras e in an ex cl us io n whi ch st at es th is "i ns ur an ce do es

no t ap pl y at an y ti m e th at [Hip p] is op erat in g, m ai nt ai ni ng , o r us in g a co ve red au to
fo r or on th e be h a lf of an y ot he r pe rs on or or ga ni zat io n." Und er Mi nn es ot a la w,
O c c i d en ta l ha d th e bu rd en to es ta bl is h th e ap pl ic ab il it y of an y ex cl us io ns in t h e bo bt ai l po li cy

. Trav el ers In de m

. Co

. v. Bl oo m in gt on St eel & Su pp ly Co

., 71 8

N.W .2d 88 8, 89 4 (Mi nn

. 20 06 ). Po li cy e x c l u s i o ns are "co ns tru ed na rro wly an d

st ric tl y ag ai ns t t he in su rer." Id.

F.2 d 93 3

, 9 3 9 ( D

. C

. Ci r. 19 80 ) ("A se tt le m en t ne it he r req ui res no r im pl ie s an y jud ic ia l en do rs em en t of ei th er pa rty's cl ai m s o r th eo rie s, an d t hu s a s et tl em en t d oe s

no t pr ov id e th e pr io r su cces s ne ces sa ry for jud ic ia l es to pp el ."); Edwar ds v. Aetn a Life
In s. Co

., 69 0 F.2 d 59 5, 59 9 (6 th Ci r. 19 82 ) ("I f th e in it ia l pr oc eed in g r e s u lt s in

se tt le m en t, th e po si ti on can no t be vi ewed as h a v i n g be en su cces sf ul ly as se rte d." );
Bat es v. Lon g Is la nd R.R. Co

., 99 7 F.2 d 10 28

, 1 0 3 8 (2 d Ci r. 19 93 ) (s am e) wit h Ri ss et to v. Pl um

be rs an d St eam fit te rs Loc al 34 3, 94 F.3 d 59 7, 60 4- 05 (9 th Ci r. 19 96 ) (co nc lu di ng a fav or ab le se tt le m en t is th e "eq ui va le n t t o win ni ng a jud gm en t fo r pu rp os es of ap pl y in g jud ic ia l es to pp el "); Co m m on weal th In s. Co

. v. Tit an Tire Co rp ., 39 8 F.3 d 87 9, 88 7 (7 th Ci r. 20 04 ) (co nc lu di ng a "fa vo rab le se tt le m en t

. . . m ay be

su ffi ci en t to sh ow th at th e pa rty to be es to pp ed pr ev ai le d in th e pr io r cas e reg ard le ss of whet he r a jud ic ia l d eci si on was o bt ai ne d" ).

Bec au se Mi nn es ot a la w req ui res a pa rty to su ccee d "at tri al " be fo re th e do ct rin e

wou ld ap pl y , we ne ed no t ch oo se a si de in th e ci rcu it sp li t. W e ha ve , ho wev er, sa id th e "ch ie f pu rp os e" of th e do ct rin e "i s to pr ot ect th e in te gr it y of th e jud ic ia l pr oc es s." E.E.O. C. v. CRST Van Ex p e di te d, In c., 67 9 F.3 d 65 7, 68 1 (8 th Ci r. 20 12 ). Und er ci rcu m st an ces whe re a pa rty pu rs ue s al te rn at e th eo rie s ag ai ns t two pa rti es , se tt le s th e weak er cl ai m ag ai ns t on e pa rty wit ho ut a co ur t ad jud ic at io n, an d th e n p u r s u e s th e st ro ng e r th eo ry ag ai ns t th e ot he r pa rty in co ur t, we se e li tt le

, if an y , th reat to th e in te gr it y of t he jud ic ia l p ro ces s.

-8

-The di st ric t co ur t co nc lu de d Hip p was no t op erat in g hi s se m i-t ract or "fo r or on

th e be ha lf of

" ATS at th e ti m e of th e acci de nt
, bu t in st ead was op erat i ng th e se m itra ct or on hi s own be ha lf by ha ul in g th e win d to wer ou tri gg ers he ha d pu rch as ed

. W e

ag ree. It was un di sp ut ed th at Hip p was no t ha ul in g a co m m erci al lo ad fo r ATS at th e ti m e o f th e acc id en t. In ad di ti on , ATS was n ot pa y in g Hi pp for th e u se of h is tru ck

at th e ti m e of

th e acci de nt

. Fi na ll y , Hip p tes ti fie d he had pu rch as ed th e win d to wer

ou tri gg ers fo r hi s o wn b en efi t i n t he ev en t h e st op pe d h au li ng for ATS. In fac t, the

reco rd sh owe d ATS ha d ne ve r ut il iz ed th e ou tri gg ers in th e th ree y ears fo ll owi ng th e acci d e nt

. Und er th es e fact s, we co nc lu de th e di st ric t co ur t co rrec tl y de te rm in ed

Occi de nt al fai le d to carr y it s bu rd en of sh owi ng Hip p was act in g "fo r or on th e be ha lf

of " ATS at th e ti m e o f th e acc id en t.

C

Fi na ll y , Occi de nt al co nt en ds th e di st ric t co ur t erre d wh e n i t de te rm in ed th e bo bt ai l po li cy ha d li m it s of $1 m il li on

. Si gn ific an tly

, O ccid en ta l co nc ed es th e bo bt ai l

po li cy is am

bi gu ou s wit h res pe ct to th e is su e of th e co ve rag e li m it s. See App el la nt 's

Br. at 47 ("Th e Occi de nt al po li cy is in te rn al ly in co ns is te nt in th at it ha s on e pa ge th at

st at es it pr ov id es $1 m il li on in co ve rag e, bu t th e de cl arat io ns pa ge

. . . pr ov id e[s ] th at
it s li m it is $5 00 ,00 0." ). Occi de nt al co nt en ds

, ho wev er, un de r Mi nn es ot a la w th e

am bi gu it y is no t ne ces sa ril y co ns tru ed ag ai ns t it if th e res ul t of su ch a co ns tru ct io n is "b ey on d th e reas on a b l e ex pe ct at io ns of th e in su red ." Ru st ho ve n v. Co m m erci al

St an da rd Ins . Co., 3 87 N.W .2d 64 2, 6 45 (Mi nn . 19 86 ).

In Ru st ho ve n, t he Mi nn es ot a Su pr em e Co ur t res ol ve d a po li cy li m it s d is pu te

ov er th e u n i n s u red m ot or is t co ve rag e av ai la bl e un de r a po li cy in su rin g si xt y -s ev en le as ed ve hi cl es

. The co ur t co nc lu de d two en do rs em en ts at ta ch ed to th e po li cy were irr eco nc il ab ly in co ns is te nt

. One en do rs em en t pu rp or te d to li m it un in su red m ot or is t

co ve rag e to $2 5,0 00 fo r each pe rs on an d $5 0,0 00 fo r each acci de nt
, bu t a reas on ab le

in te rp ret at io n of a se pa rat e en do rs eme n t in di cat ed th e un in su red m ot or is t co ve rag e

-9

-was eq ua l to "t he su m of th e li m it s ap pl ic ab le to each co ve red au to ," whi ch was "6 7

ti m es $2 5,0 00 fo r each pe rs on or $1 ,67 5,0 00 ." 38 7 N.W .2d at 64 4. The co ur t no te d "[o ]ne of th e fu nd am en ta ls of in su ran ce la w

. . . is th at am bi gu ou s la ng ua ge in an in su ran ce po li cy is to be co ns tru ed in fav or of th e in su red ," bu t ad de d th e pr ov is o th at "[t ]he res ul t of s u c h a c o n s t ru ct io n

. . . m us t no t be be y on d th e reas on ab le

ex pe ct at io ns of th e in su red ." Id

. at 64 5. The co ur t fo un d th e hi gh er am ou nt "n ot to

e xc eed th e reas on ab le ex pe ct at io ns of th e in su red " an d co ns tru ed th e am bi g u i t y

ag ai ns t t he in su rer. Id

.

Here, th e di st ric t co ur t rel ie d up on R u s th ov en to co nc lu de th e hi gh er po li cy li m it s of $1 m il li on di d no t ex c e e d t h e r eas on ab le ex pe ct at io ns of th e in su red

, an d

co ns tru ed th e bo bt ai l po li cy 's am bi gu i t y a ga in st Occi de nt al

. Occi de nt al arg ue s th e di st ric t co ur t's rel ia nc e on Ru st ho ve n was m is pl aced

. O cc iden ta l co nt en ds th e di st ric t

co ur t sh ou ld ha ve fo ll owe d a su bs eq ue nt de ci si on is su ed by th e Mi nn es ot a Co ur t of App eal s in Cu rti s v. Hom e In su ran ce Co

., 39 2 N.W .2d 44

, 45 (Mi nn

. Ct

. App

. 19 86 ).

In Cu rti s, th e co ur t of ap pe al s ap pl ie d Ru st ho ve n bu t co nc lu de d an am bi gu ou s po li cy sh ou ld no t be co ns tru ed ag ai n s t t h e in su rer. The co ur t of ap pe al s he ld th e po li cy

pr ov id ed th e le ss er of two po li cy li m it s be cau se th ere were "af fid av it s st at in g th at th e [in su red ] in te nded th e m ax im um am ou nt of un de rin su red m ot or is t co ve rag e av ai la bl e fo r an y on e acci de nt wou ld be $5 0,0 0 0 [ t he le ss er li m it ]. " 39 2 N.W .2d at 46

. Co ns eq ue nt ly, th e co ur t con cl ud ed th e in su red ha d " no ex pe ct at io n t ha t t he li m it of

li ab il it y wou ld be gre at er t ha n $ 50 ,00 0." Id.

O c c i d e n t a l co nt en ds – si m il ar to th e si tu at io n in vo lv ed in Cu rti s – th ere is

reco rd ev id en ce in th is c a s e i n d ic at in g ex act ly wha t th e in su red 's reas on ab le

ex pe ct at io ns were wit h re s p e ct to th e bo bt ai l po li cy 's co ve rag e li m it s. Occi de nt al

rel ie s so le ly u po n a se tt le m en t l e t t e r pr ep ared by Ad am 's at to rn ey in Ja nu ary 2 01 1.

Ada m 's at to rn ey rep res en te d th at th e in fo rm at io n pr ov id ed to hi m in di cat ed th e

co ve rag e li m it s fo r th e bo bt ai l po li cy were $5 00 ,00 0. Occi de nt al co nt en ds Ada m 's

-1 0-at to rn ey 's se tt le m en t le tt er de m on st rat es ex ac t l y w h at Tho m as Hip p's reas on ab le

ex pe ct at io ns were wi th res pe ct to th e p ol ic y li m it s. We di sa gr ee.

U n l i k e th e si tu at io n in vo lv ed in Cu rti s, th ere is no affi da vi t di rect ly fro m Tho m as Hip p s ta ti ng th at he in te nd ed hi s bo bt ai l po li cy li m it s to be $5 00 ,00 0. Nor

is Hip p ev en di rect ly i de nt ifi ed as th e pe rs on al so ur ce of th e he a r s a y re fere nc ed by

th e pl ai nt iff

's at to rn ey in th e se tt le m en t le tt er wit h res pe ct to th e po li cy li m it s. Thu s,

co nt rary to Occi de nt al 's co nt en ti on , th ere is no reco rd ev id en ce in th is cas e in di cat in g wha t Th om as Hip p's reas on ab le ex pe ct at io ns were. The di st ric t co ur t t he refo re d id

no t e r r whe n it co ns tru ed th e ad m it te dl y am bi gu ou s po li cy ag ai ns t Occi de nt al to

co nc lu de it pro vi de d $ 1 m il li on in co ve rag e.

III

W e aff irm th e jud gm en t o f th e d is tri ct co ur t.

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