Court Opinion

ID: 9670029
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:12:51.134107+00
Date Added: 2024-06-11T18:16:01.921206
License: Public Domain

GILBERT, Justice
(dissenting).
I respectfully dissent from the majority opinion. The majority’s holding will deny coverage to all parents who have purchased no-fault insurance to provide coverage for their minor children of driving age living in their households in case of an *523accident while the “insured” minor is driving another’s car with the permission of the owner of that car. The majority has “no doubt” that Adonna Enyart is an “insured” under the No-Fault Act. Despite this recognition, the majority denies coverage even though none of the exclusions in Progressive’s policy are applicable to the facts of this case. Furthermore, the majority mistakenly fails to recognize the differences between Minn.Stat. § 65B.48, subd. 1 (requiring that every vehicle owner maintain a plan of reparation security) and Minn.Stat. § 65B.49, subd. 3 (addressing the requirements of each plan of reparation). In doing so, the majority fails to recognize that the No-Fault Act unambiguously states that a residual liability insurer is legally obligated to pay under the circumstances of this case.
The majority begins its decision by mis-characterizing the district court’s decision. The majority states that it agrees with the district court that unless the No-Fault Act requires it, the language in Dixie Enyart’s policy does not include Adonna as an insured. In fact, the district court concluded that Progressive’s policy did provide non-owned vehicle coverage for Adonna En-yart’s use under these facts and that there were no applicable exclusions relating to bodily injury claims and, therefore, Progressive has a duty to defend and indemnify the bodily injury claims arising out of this accident. The district court found a conflict between the definition of “you” and “your” on the declaration page of the policy with the definition of “insured” as defined in the Minnesota No-Fault Automobile Insurance Act. The court of appeals held that Progressive’s provisions on limitation of liability under these circumstances violated the minimum coverage required under the No-Fault Act and were therefore void.
The majority’s decision erroneously interprets ambiguous and sometimes conflicting language within the 27 page no-fault policy in favor of the insurer. In addition, the majority’s decision is contrary to the scope and purpose of the No-Fault Act. In support of its decision, the majority cites cases involving policy exclusions (Lobeck (excluding liability coverage for driving without permission) and Too-mey (excluding liability coverage for insured’s relatives if they owned their own vehicles)) and then adds an exclusion to Progressive’s policy for a resident relative driving a nonowned vehicle. The majority’s conclusion is ironic because exclusion No. 10 within Progressive’s policy only excludes liability coverage for:
Bodily injury or property damage arising out of the ownership, maintenance or use of any vehicle, other than your insured car, which is owned by or furnished or available for regular use by you or a relative.1
There is nothing in the record indicating that Adonna Enyart either owned the vehicle involved in the accident or that it was furnished or available to her for regular use. Accordingly, this policy exclusion does not apply to Adonna Enyart. Adon-na Enyart’s use of an acquaintance’s vehicle was not excluded from coverage and was a risk that appears to be directly contemplated in the policy because this case involved a permissive short-term or one-time use of another’s vehicle.
In denying coverage, Progressive argues that Adonna Enyart, age 16, was not an “insured person” in this case because the car she was driving was not the “insured car” under her mother’s policy. However, the way the policy provisions are written, it is unclear what Progressive is trying to accomplish with respect to *524certain areas of coverage. For example, the policy definition of “insured person” as it relates to liability to others includes “a minor in the custody of a named insured.” In an amendment to Part 1 of the policy where liability to others is covered, the policy states that “[it] will pay, on behalf of an insured person, damages ⅜ * ⅜ for which any insured person is legally liable because of bodily injury and property damage caused by accident and arising out of the * * * use of your insured car * * The policy definition of “your insured car” includes four sub-parts, one of which states “any car ⅞ ⅝ ⅜ not owned by you while being driven temporarily as a substitute for any other vehicle described in this definition, because of its withdrawal from normal use due to breakdown, repair, servicing, loss or destruction.” If these definitions of “insured person,” and “your insured car” were inserted into the amendment to Part 1 of the policy where liability to others is covered, it would read:
We will pay, on behalf of Adonna En-yart, damages for which Adonna Enyart is legally liable because of bodily injury and property damage caused by accident and arising out of the use of any car not owned by Dixie Enyart while being driven temporarily as a substitute for any other insured car because of its withdrawal from normal use due to breakdown, repair, servicing, loss or destruction.
Therefore, Progressive would have been obligated to provide coverage in this case if Adonna Enyart had been temporarily using any vehicle, including Baardsen’s vehicle, as a substitute for any “insured car” under the policy because of that insured car’s breakdown, repair, servicing, loss or destruction. This cuts against the majority’s conclusion that “[t]he contract language in Part I and the definitions applicable to Part I * * * do not cover nonowned vehicles driven by nonspouse family members.”
For a parent trying to read these policy provisions and determine whether their child will be covered, the policy is at a minimum ambiguous. Most people would assume Progressive’s policy would cover their children while driving motor vehicles with permission because the policy states that “insured” includes “a minor in the custody of a named insured * ⅜ *.” Furthermore, as illustrated above, the policy clearly provides coverage in certain circumstances where a policyholder’s minor child drives a nonowned vehicle. The majority states, however, that the policyholder must also read the definitions in conjunction with the rest of the policy, and when that is done, it is clear that the minor is only insured while driving a named policyholder’s insured car and not while driving another’s car with permission. Under the majority’s interpretation, this policy’s no-fault coverage would differ within the family unit depending on which vehicle is being driven. The majority comes to this conclusion by discussing insured vehicles in terms of the intricate differences between the terms “a motor vehicle” and “each motor vehicle” contained in the No-Fault Act while ignoring the common sense interpretation and the policy definitions of “insured person” and “your insured car.” Even when the definitions are read in conjunction with the rest of the policy, its provisions are ambiguous at best.
“Ambiguous terms in an insurance policy are to be resolved against the insurer and in accordance with the reasonable expectations of the insured.” Minnesota Mining and Mfg. Co. v. Travelers Indem. Co., 457 N.W.2d 175, 179 (Minn.1990); Columbia Heights Motors, Inc. v. Allstate Ins. Co., 275 N.W.2d 32, 36 (Minn.1979). Based on the definition of “insured,” it is *525reasonable for Dixie Enyart to expect that her 16-year-old daughter living -with her and in her custody would be covered under her policy if she is involved in an accident while driving another’s car that is not furnished for regular- use and is used with the owner’s permission. The policy plainly states that, as a minor in Dixie Enyart’s household, Adonna Enyart is included as an insured. In addition, the policy clearly provides coverage for an insured while driving any vehicle not owned by the policyholder if that vehicle is being borrowed temporarily as a substitute for any insured vehicle because of the insured vehicle’s breakdown, repair, or servicing. Progressive should not be allowed to exclude Adonna Enyart from coverage simply because her mother’s car was not being repaired at the time Adonna used Baardsen’s car.
The policy only attempts to exclude coverage as follows: “no person shall be considered an insured person if the person drives a vehicle without the owner’s expressed permission.” The policy further provides “this provision, though, does not apply to the named insured or to those persons identified in additional definition 5 above.” Based on the second sentence in the exception to the definition of insured person, a minor in the custody of the insured is still considered an insured, even when they drive a vehicle without the owner’s expressed permission. This could easily lead one to believe that a child is included as an insured even when they are driving another’s car without permission, which would in turn lead one to believe that her child is certainly covered when driving another’s vehicle with permission, as was the case here.
There is also nothing in the record that supports the proposition that Adonna En-yart was an unknown driver to Progressive.2 While it is true that she was not listed, Progressive does not offer any proof that they did not know that she was a driver within this family. Moreover, the policy provides that “[h]igher premiums are charged for drivers based upon the number of penalty points accumulated ⅜ * * » it further provides in the “chargeable accidents” sections that “[pjoints are assigned for each accident that occurred during the experience period involving the applicant or anyone else who usually operates the motor vehicle. Points are assigned regardless of which vehicle is being driven at the time of the accident.” (Emphasis in policy.) Accordingly, premium adjustments focus on the driver, not the applicant, and regardless of the vehicle.
Even if one accepts the majority’s conclusion that Progressive’s policy did not provide coverage for Adonna Enyart in this case, the majority also ignores the plain language of the No-Fault Act. Under the No-Fault Act, Progressive is liable to pay, on behalf of Adonna Enyart, damages recoverable by Widness arising out of Adonna Enyart’s use of a motor vehicle. See Minn.Stat. § 65B.49, subd. 3(2). Despite this clear language, the majority engages in a lengthy discussion of other provisions of the No-Fault Act and concludes that the statute is not clear and unambiguous.
When the language of a statute is plain and unambiguous, it manifests the legislative intent and we must give the statute its plain meaning. Kersten v. Minnesota Mut. Life Ins. Co., 608 N.W.2d 869, 874-75 (Minn.2000). This court has held that words and phrases are to be construed “according to rules of grammar and ac*526cording to their most natural and obvious usage ⅜ * ⅜.” Amaral v. Saint Cloud Hospital, 598 N.W.2d 379, 384 (Minn.1999).
As the majority points out, the No-Fault Act requires every “owner of a motor vehicle * * * [to] maintain * ⅜ * a plan of reparation security * * * insuring against loss resulting from liability imposed * * ⅜ for injury * ⅜ ⅜ sustained by any person arising out of the ownership, maintenance, operation or use of the vehicle.” Minn. Stat. § 65B.48, subd. 1. The majority then uses the language from section 65B.48, subd. 1, to define the scope of a plan of reparation security. This is improper because according to the No-Fault Act a “[p]lan of reparation security” is defined as “a contract * * ⅜ under which there is an obligation to pay the benefits described in section 65B.49.” Minn.Stat. § 65B.43, subd. 15. Therefore, section 65B.49 defines the scope of the No-Fault Act’s residual liability insurance coverage. As discussed above, section 65B.49, subd. 3(2), unambiguously requires an insurer to insure against any residual liability an insured incurs as a result of the “maintenance or use of a motor vehicle.” This provision should be given its plain meaning — the same meaning as this court has given to the phrase “maintenance or use of a motor vehicle” when considering its usage in section 65B.44 — “for an injury to arise out of the use of a motor vehicle, there must exist a causal connection between the injury and the use of an automobile for transportation purposes.”3 Nadeau v. Austin Mut. Ins. Co., 350 N.W.2d 368, 370 (Minn.1984) (citations omitted). Widness’s injuries are causally connected to Adonna Enyart’s use of an automobile and Progressive should be required to pay Widness’s damages on behalf of Enyart.
The majority also attempts to minimize the scope of the phrase “use of a motor vehicle” contained in section 65B.49, subd. 3(2), by referencing section 65B.49, subd. 3(1). The majority claims that subdivision 3(1) “specifies the minimum limits for the mandated residual liability coverage that must be maintained ‘with respect to each vehicle,’ ” and that the emphasis of this provision is that residual liability insurance should only attach to the insured vehicle. The majority takes this phrase out of context and in doing so misinterprets the subdivision as a whole. Section 65B.49, subd. 3(1), requires that “each plan of reparation security shall also contain stated limits of liability * * * with respect to each vehicle for which coverage is thereby granted ⅜ ⅜ *>> jmpües ⅛¾⅛ each pjan 0f rep_ aration security may contain coverage for more than one vehicle and that the limits of liability must be stated with respect to each vehicle for which coverage is granted under the plan of reparation security. This reading of section 65B.49, subd. 3(1), rather than the majority’s reading, is consistent with section 65B.49, subd. 3(2), which indicates that residual liability insurance extends to circumstances involving “the use of a motor vehicle” and not just circumstances where there is the “use of the motor vehicle.”
The majority opinion also interprets the threshold requirement that all vehicle owners have insurance as meaning other family members driving nonowned vehicles on *527occasion are not required to have insurance. The No-Fault Act requires every owner of a registered motor vehicle in Minnesota to purchase reparation security. Minn.Stat. § 65B.48, subd. 1. Under the majority’s reading of the statute, a minor who is a licensed and an authorized driver but does not own a vehicle, as is the case here, is not required to have such coverage. The only way a minor that does not own a vehicle would have reparation security is if she is covered through her parents’ policy. The fact that the legislature intended this coverage for minors within family policies is evidenced by the No-Fault Act’s definition of “insured.” The No-Fault Act defines a minor driver under the facts presented here as an insured under the family’s policy. While the majority attempts to analogize this case to Toomey and Lobeck, these cases are distinguishable in that they involved policy exclusions related to facts not present in this case. There simply are no statutory or policy exclusions that apply to the facts presented in this case.
Both the insurance policy issued by Progressive in this case and the majority opinion create great uncertainty for families with minors and open up a significant gap in our No-Fault Act coverage. Resolving the ambiguity in Progressive’s policy in favor of Adonna Enyart in accordance with the reasonable expectations of the named insured requires the court to find that the policy provides coverage for damages arising out of Adonna Enyart’s use of Baard-sen’s car. The majority holds the statute was not “clear and unambiguous,” but they ignore the conflicting and ambiguous language within the policy. Furthermore, the No-Fault Act unambiguously provides coverage for Adonna Enyart based on the facts of this case.
I would affirm the court of appeals.

. The effect of this provision is ignored by the majority.

. The only evidence in the record is answers to requests for admissions admitting that Adonna Enyart was not listed as a named insured or as an additional driver.

. Section 65B.49, subd. 2, states that "[e]ach plan of reparation security shall provide for payment of basic economic loss benefits.” Basic economic loss benefits are recoverable where an injury arises out of the maintenance or use of a motor vehicle and all this requires is a causal connection between the injury and the use of an automobile for transportation purposes. Nadeau, 350 N.W.2d at 370. Therefore, it does not make sense to interpret “maintenance or use of a motor vehicle” to mean one thing under section 65B.49, subd. 2, and mean something different under section 65B.49, subd. 3.