Opinion ID: 4025596
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Heading: Ambiguity of Great West’s Policy Exclusions

Text: We start with Robbins’s argument that Great West’s policy is ambiguous as to whether Hoker and Phillips are excluded from its coverage. Minnesota courts analyze insurance poli‐ cies under general contract law principles. Lobeck v. State Farm Mut. Auto. Ins. Co., 582 N.W.2d 246, 249 (Minn. 1998). Whether an insurance policy or particular provision is ambig‐ uous is a question of law. Lott v. State Farm Fire & Cas. Co., 541 No. 15‐1181 7 N.W.2d 304, 307 (Minn. 1995). “Language in a policy is am‐ biguous if it is susceptible to two or more reasonable interpre‐ tations.” Carlson v. Allstate Ins. Co., 749 N.W.2d 41, 45 (Minn. 2008). In making that determination, Minnesota law directs us “not [to rely] upon words or phrases read in isolation, but ra‐ ther upon the meaning assigned to the words or phrases in accordance with the apparent purpose of the contract as a whole.” Art Goebel, Inc. v. N. Suburban Agencies, Inc., 567 N.W.2d 511, 515 (Minn. 1997). If language is susceptible to two reasonable interpretations, then “it must be interpreted in favor of coverage.” Wanzek Constr., Inc. v. Emp’rs Ins. of Wausau, 679 N.W.2d 322, 325 (Minn. 2004). Language, how‐ ever, that is unambiguous “must be given its plain and ordi‐ nary meaning,” Hubred v. Control Data Corp., 442 N.W.2d 308, 310–11 (Minn. 1989) (internal quotation marks omitted), as Minnesota law does not permit a court to “read an ambiguity into the plain language of a policy in order to provide cover‐ age,” Jenoff, Inc. v. N.H. Ins. Co., 558 N.W.2d 260, 262 (Minn. 1997) (internal quotation marks omitted). If, however, an ex‐ clusion would omit coverage required by applicable law, it will not be enforced. Am. Family Mut. Ins. Co. v. Ryan, 330 N.W.2d 113, 115 (Minn. 1983). The dispute here centers on a disagreement over the effect of a September 2010 endorsement, which modified the pol‐ icy’s “Coverage” section of “WHO IS AN INSURED.” With‐ out the endorsement, the section read, in relevant part, as fol‐ lows:
The following are “insureds”:
8 No. 15‐1181
sion a covered “auto” you own, hire or borrow except:
you hire or borrow a covered “private pas‐ senger type” “auto.”
“auto” is a “private passenger type” “auto” and is owned by that “employee” or agent or a member of his or her household.
or she is working in a business of selling, ser‐ vicing, repairing, parking or storing “autos” unless that business is yours.
partners (if you are a partnership), members (if you are a limited liability company), or a lessee or borrower or any of their “employ‐ ees,” while moving property to or from a covered “auto.”
member (if you are a limited liability com‐ pany), for a covered “private passenger type” “auto” owned by him or her or a mem‐ ber of his or her household.
e. below. The endorsement has a heading that provides in capital letters: “This endorsement changes the policy. Please read it carefully. Changes—Who Is An Insured.” The endorsement goes on to state the following: No. 15‐1181 9 The following is added to Section II—Liability Cov‐ erage—Paragraph A.1.b.—Who Is An Insured: 1. Anyone who has leased, hired, rented, or bor‐ rowed an “auto” from you that is used in a busi‐ ness other than yours.
a written Trailer Interchange Agreement. Great West contends that this endorsement added to the cat‐ egory of persons excluded under subparagraph A.1.b., which would result in eight enumerated exceptions. Robbins argues there is another reasonable interpretation of the policy exclusions after the endorsement, which is: 1. WHO IS AN INSURED The following are “insureds”:

borrowed an “auto” from you that is used in a business other than yours. 2. Anyone that is using an “auto” of yours under a written Trailer Interchange Agreement. Anyone else while using with your permission a covered “auto” you own, hire or borrow except:

10 No. 15‐1181 According to Robbins, the estate’s interpretation is reasonable because it avoids “duplication of numbers or renumbering of paragraphs.” (Appellant Br. 22.) Robbins contends that Great West’s interpretation requires the reader to “ignor[e] the con‐ flicting numbers” under subparagraph A.1.b., as that subpar‐ agraph already had exclusions numbered “(1)” and “(2).” (Id.) Further, according to Robbins, the estate’s interpretation is more reasonable than Great West’s because it adds to and does not subtract from the definition of who is “insured” un‐ der the policy, which is consistent with Minnesota law con‐ struing ambiguities against insurance policies in favor of the insured. But there is no ambiguity to construe against Great West. We agree with the district court that Great West’s interpreta‐ tion of this provision is the only reasonable reading. In inter‐ preting the Great West policy and endorsement under Min‐ nesota law, we must read them together “from the viewpoint of a layperson, not a lawyer.” Mut. Serv. Cas. Ins. Co. v. Wilson Twp., 603 N.W.2d 151, 153 (Minn. Ct. App. 1999). Robbins’s interpretation would force us to abandon that position and read the policy language and endorsement as only a lawyer construing a contract could—in the most hyper‐technical, over‐analyzed sense. We refuse to adopt such a reading. No reasonable interpretation would construe the endorse‐ ment as doing anything but adding two more enumerated ex‐ clusions under subparagraph A.1.b. The endorsement states “the following is added” to subparagraph A.1.b., (emphasis added), and it then provides two numbered provisions that are worded in a manner similar to the other enumerated exclu‐ sions. Nothing in the endorsement would lead a layperson to believe that Great West intended to modify the beginning of No. 15‐1181 11 subparagraph A.1.b. In fact, embracing Robbins’s interpreta‐ tion does the most violence to the policy language as it uses two “1”s and places two numbering conventions next to each other, which is not done anywhere else within the policy. Moreover, additional extensions of coverage are provided in sections A.1.c–A.1.e. If the endorsement intended to extend coverage, it could have added lettered subparagraphs to sec‐ tion A.1, rather than adding numbered subparagraphs to sec‐ tion A.1.b, a section that lists exclusions from coverage. Min‐ nesota courts tend to reject interpretations like the one ad‐ vanced by Robbins. See, e.g., Red & White Airway Cab Co. v. Transit Cas. Co., 234 N.W.2d 580, 582 (Minn. 1975) (refusing to adopt an interpretation of an insurance policy that “does vio‐ lence to the plain meaning of the contract language”). Also making Robbins’s reading unreasonable is that it makes the endorsement’s additional language superfluous. Robbins’s reading purports to add two more categories of in‐ dividuals who are insured under the policy. The problem with Robbins’s interpretation though is that the policy prior to the endorsement would have already included the two cat‐ egories listed as insured, making the endorsement completely superfluous. Some redundancy in insurance contracts is nor‐ mal, see, e.g., Horace Mann Ins. Co. v. Indep. Sch. Dist. No. 656, 355 N.W.2d 413, 418 (Minn. 1984), while construing an en‐ dorsement to be completely superfluous is not, see Jarvis & Sons, Inc. v. Intʹl Marine Underwriters, 768 N.W.2d 365, 371 (Minn. Ct. App. 2009) (rejecting an interpretation that would make an endorsement “wholly superfluous or require an ab‐ surd result”). Despite the obvious redundancies the estate’s interpreta‐ tion would create, Robbins nonetheless argues that Great 12 No. 15‐1181 West’s interpretation is unreasonable because the endorse‐ ment’s two exclusions could both independently exclude Hoker and Phillips from the policy’s coverage, making them redundant. Contrary to Robbins’s position, the exclusions are not wholly redundant. For example, an individual could be an independent contractor hired by Lakeville to transport goods for Lakeville in furtherance of Lakeville’s business. The first policy exclusion then would not apply. But if the inde‐ pendent contractor had a written trailer interchange agree‐ ment with Lakeville, then the exclusion would not extend the policy’s coverage to that individual. And even if there is some overlap, Great West’s interpretation does not make the entire endorsement itself superfluous. Indeed, it is consistent with the “belt and suspenders” approach often adopted by insur‐ ance companies in detailing exclusions in their policies. See Certain Interested Underwriters at Lloydʹs, London v. Stolberg, 680 F.3d 61, 68 (1st Cir. 2012) (“[I]nsurance policies are notorious for their simultaneous use of both belts and suspenders, and some overlap is to be expected.”). Great West’s interpretation is the only reasonable reading of the unambiguous policy and controls our analysis moving forward.