Court Opinion

ID: 9883725
Source: CourtListenerOpinion
Date Created: 2023-10-06 02:14:31.323516+00
Date Added: 2024-06-11T07:48:29.690881
License: Public Domain

NORTON, Judge
(concurring specially).
I concur in the result reached by the majority opinion. However, I would reach that result for other reasons.
I agree with the dissent that the uninsured proceeds of the American Family policy should be applied first pursuant to that policy prior to the MIGA funds. But, I disagree with the dissent that these proceeds should then be deducted from MIGA funds.
If it were not for the fortuity of Iowa Mutual’s insolvency subsequent to the accident causing Wondra’s injury, Wondra would have had a $150,000 insurance pool from which to seek recovery. It is contrary to the policy of this state to construe the MIGA act so that claimants lose coverage. I would not deduct the uninsurance proceeds because of the strong policy statement in § 60C.02:
Subd. 2. Purposes. The purposes of Laws 1971, chapter 145 are to provide a mechanism for the payment of covered claims under certain insurance policies and surety bonds, to avoid excessive delay in payment and to avoid financial loss to claimants or policyholders because of the liquidation of an insurer, to assist in the detection and prevention of insurer insolvencies, and to provide an association to assess the cost of the protection among insurers.
Subd. 3. Construction. Laws 1971, chapter 145 shall be liberally construed to effect the purposes stated in subdivision 2.
Minn.Stat. § 60C.02 (1982) (emphasis added).
This strong statement of policy requires section 60C.02 to be read as superior to the deduction statute, § 60C.13 (1982). A literal construction is not to be adopted contrary to the general policy and object of the statute. Knopp v. Gutterman, 258 Minn. 33, 102 N.W.2d 689 (1960). Thus there can be no deduction where the effect is to reduce the insurance pool for which the injured party could have availed himself absent the insolvency of the tort-feasor’s insurance company. Section 60C.13 must be read to provide for no deduction where the previously mentioned MIGA policy is frustrated. I believe this to be the legislative intent from the language of 60C.02.
I find nothing in the MIGA Act which states or implies that the legislature was concerned with protecting MIGA funds from depletion in a situation such as this case. The amount paid by insurance companies to the fund is merely a cost of doing business that affects the cost of insurance coverage.
MIGA is derived from a uniform act adopted in many states. While it is true that there are states adopting the dissent’s reasoning, these cases are distinguishable where the injured party would be in a better position than if the insurance company had been solvent, see Vokey v. Massachusetts Insurers Insolvency Fund, 381 Mass. 386, 409 N.E.2d 783 (1980) (only allowed to collect $10,000 under policy if *463insurer had been solvent and therefore could not collect greater amount from fund); or the injured party would have received a double recovery, see King v. Jordan, 601 P.2d 273 (Alaska 1979) (insured received $12,600 from uninsured coverage and therefore could not receive any amount from fund when judgment was less than amount previously received); or the state did not allow add-on recovery of benefits as Minnesota did at the time of this accident. See Prutzman v. Armstrong, 90 Wash.2d 118, 579 P.2d 359 (1978) (no collection from the fund where uninsured coverage is identical to the policy limits of the insolvent insurer). This being a matter of first impression, I would opt for construing the statute against deduction of the uninsured proceeds, because there will be no actual duplication of recovery in this case.
Finally, I believe that MIGA steps into the shoes of Iowa Mutual as it is deemed the insurer by Iowa Mutual’s obligations by 60C.05 (1982). That obligation is for the policy limits, without deduction, in accordance with 60C.02 and 60C.05.
For example, if Wondra were found to have sustained damages in the amount of $70,000, $50,000 (the amount Wondra is entitled to recover from his uninsured coverage) must be deducted and MIGA would be liable for the remaining $20,000. If damages were found to be $150,000, Won-dra would be entitled to $50,000 from uninsured proceeds and $100,000 from the fund as the tort-feasor’s policy provided. There is nothing in the statute which would lead me to believe that the legislature intended the injured party to receive less than his full recovery, be it $20,000, $70,000 or $150,000. I believe the statute merely requires that an injured party’s uninsured limits be exhausted, before MIGA funds are paid, and MIGA funds are then required to pay the excess damages over the uninsured policy limits. This method will prevent duplication of recovery, and I believe, is the procedure intended by the legislature.