Opinion ID: 1272797
Heading Depth: 3
Heading Rank: 3

Heading: Sole Shareholder Exception

Text: Oczak also argues he should be considered a named insured under the West Bend policy because of his status as the owner of North End, the actual named insured under the policy. He relies on Roepke v. W. Nat'l Mut. Ins. Co., 302 N.W.2d 350 (Minn.1981), to support his argument. In Roepke, the insured, who was driving a company vehicle, was killed in a car accident with another vehicle. Id. at 351. The insured was president and sole shareholder of the corporation, which had insurance providing for survivors' benefits in the amount of $10,000 on six different vehicles all covered under the umbrella policy. Id. The corporation was listed as the named insured on the policy. Id. The defendant insurer argued that because the decedent was not the named insured he was not an insured under the policy and his survivors were not entitled to stack the six different coverages, but were limited to the coverage on the vehicle involved in the accident. Id. at 351-52. We reverse pierced the corporate veil and concluded that the decedent was an insured. Id. at 352. We specifically noted that Roepke was limited to the particular facts of the case (specifically, the insured's position as the president and sole shareholder of the corporation, his extensive personal use of the insured vehicles, and the court's conclusion that no shareholder or creditor would be adversely affected by the reverse pierce). Id. at 353; see also Kuennen v. Citizens Sec. Mut. Ins. Co., 330 N.W.2d 886, 886 (Minn.1983) (declining to extend Roepke to the majority shareholder of a corporation insured under a policy where the corporation was the named insured and only two of the corporate vehicles were used as family vehicles). Although Oczak was the owner of North End, the vehicle he was occupying at the time of the accident was not owned by the corporation. As we noted in Kuennen, personal use of corporate property is important in a reverse-piercing case because it indicates the degree of identity between a shareholder and a corporation. Where that degree is not high the alter ego theory which underlies the doctrine of piercing the corporate veil cannot operate. Kuennen, 330 N.W.2d at 887. Moreover, Oczak's situation is distinguishable from the sole proprietorship cases because North End was a corporation and, unlike a sole proprietorship, a corporation is a separate legal entity from its owners and shareholders. Gabrelcik v. Nat'l Indem. Co., 269 Minn. 445, 448, 131 N.W.2d 534, 536 (1964); see also Gen. Cas. Co. of Wis. v. Outdoor Concepts, 667 N.W.2d 441, 443-44 (Minn.App.2003) (concluding that sole proprietor qualified as named insured even though business was actual named insured on policy). But see Jensen v. United Fire & Cas. Co., 524 N.W.2d 536, 539-40 (Minn.App.1994), rev. denied (Minn. Feb. 3, 1995). [4] For these reasons, we conclude that Oczak was acting as an employee of North End, and not the corporation's alter ego, when he took cars left for repair out for diagnostic road tests. Consequently, he is not a named insured under the policy. Because we determine that the West Bend policy does not provide excess UIM coverage, we need not address Allstate's argument that the court should apply a closeness to the risk analysis to determine whether Allstate's or West Bend's coverage has priority. Affirmed. GILDEA, J., took no part in the consideration or decision of this case.