Court Opinion

ID: 9692921
Source: CourtListenerOpinion
Date Created: 2023-08-25 16:12:23.371775+00
Date Added: 2024-06-11T18:19:38.166111
License: Public Domain

WAHL, Justice,
concurring in part, dissenting in part.
I agree that the release by Pierringer agreement of the insurer’s agent released the insurer from vicarious liability. I respectfully dissent, however, from that portion of the majority opinion which finds the evidence insufficient to support the jury’s finding that Fidelity was independently negligent.
The majority opinion recognizes that the evidence must be viewed in the light most favorable to the verdict. Flom v. Flom, 291 N.W.2d 914, 916 (Minn.1980). This court will overturn a jury verdict only if no reasonable mind could find as the jury did. *494Belden Porter Co. v. Kimball Co., 803 Minn. 98, 99, 226 N.W.2d 310, 310 (1975). The answer to a special verdict question should be set aside only when it is perverse and palpably contrary to the evidence. Jacobs v. Rosemount Dodge-Winnebago South, 310 N.W.2d 71, 76 (Minn.1981).
The jury had before it evidence that the Fidelity policy provided total coverage of $910,000 on the Galaxie motel, that the motel had an insurable value at the time of the fire of $645,000, and that Reedon paid over $7,000 a year for the coverage. The parties agreed that Reedon suffered an uncovered loss of $49,643 when Fidelity refused to pay more than the $324,000 coverage on the section of the motel that burned. There was evidence that though there were notations on the policy making an allocation of coverage on the two sections of the building as it existed at the time of the fire, Reedon wanted coverage and believed it was purchasing coverage for the motel as a whole. Reedon’s manager testified that he had not specified how to divide the coverage between the two buildings. The policy did not make clear which building was "Building 1” and which was “Building 2.” One of the owners of Ree-don testified that the building that burned was the more expensive of the two buildings to reconstruct.
There was also evidence that Fidelity ordered and conducted two separate inspections of the Galaxie, one by a member of its engineering department, one by an ISO inspector. The jury could have inferred that, by inspecting, Fidelity was checking on the premises, not only to ascertain the risk factor and proper premium to be charged but on the correspondence of the terms of the policy to the property as well; that Fidelity undertook to provide a policy appropriate to the property; that one of the buildings was underinsured and the other overinsured or, in the alternative, that the motel was all one building; and that Fidelity breached the obligation it undertook to see that the coverage was appropriate.
Fidelity argues that it had no legal obligation to examine and appraise the Galaxie motel. It is true that Minn.Stat. § 65A.08, subd. 1 (1978) (repealed 1979), requiring an insurance company to examine and appraise the structures it insures, is no longer the law. Nevertheless, under the common law, one who undertakes to render services to another is subject to liability for harm resulting from the failure to exercise reasonable care to perform the undertaking, if the failure to exercise care increases the risk of harm, or the harm is suffered because of the other’s reliance on the undertaking. See Restatement (Second) of Torts § 323 (1965).
I would hold that the evidence is sufficient to support the finding of the jury that the insurer was independently negligent and affirm on this issue.