Court Opinion

ID: 9685694
Source: CourtListenerOpinion
Date Created: 2023-08-24 14:57:26.730726+00
Date Added: 2024-06-11T18:18:09.378164
License: Public Domain

HUSPENI, Judge
(dissenting).
I respectfully dissent and would find as a matter of law that respondents have no insurable interest in the subject property either through the right of first refusal statute or as tenants at will.
First, with reference to Minn.Stat. § 500.24, subd. 6(a) (Supp.1987), I am unable to discern how the right to purchase property at a price the current owner is prepared to sell to a third party creates an insurable interest in an immediately preceding former owner. I submit the very valuable right created by section 500.24 is the right of farmer “A” to purchase, at present market value, property which farmer “A” *728lost through foreclosure and could otherwise have obtained (regained) title to only through redemption. Redemption most likely would have required payment of mortgage arrears, costs, attorney fees and other appropriate sums, and continued obligation under the mortgage.
Almost certainly in times of falling land values, farmer “A” would obtain title to property more economically under section 500.24 than through redemption. Often, in fact, when redemption is a financial impossibility, purchase under 500.24 may be feasible. This feasibility, I submit, in and of itself promotes the laudable legislative purpose of protecting the family farm unit. The statute makes possible what otherwise might be impossible.
I am unable, however, to translate rights provided by section 500.24 into an insurable interest. In order to have an insurable interest, a party must “have a risk of direct pecuniary loss by damage or destruction of the [insured structure].” Anderson v. State Farm Fire and Casualty Co., 397 N.W.2d 416, 418 (Minn.Ct.App.1986), pet. for rev. denied (Minn. Feb. 18, 1987) (emphasis in original). I fail to see how rights created by section 500.24 were in any way less valuable after the fire than before. To the extent the damage to the residence diminished the value of the property, that diminishment would be reflected in the value of the property at the time the statutory rights were exercised.
Furthermore, in Hane v. Hallock Farmers Mutual Insurance Co., 258 N.W.2d 779, 782 (Minn.1977), the Minnesota Supreme Court held that:
[W]hile [the farmer] possessed an opportunity to repurchase the farm, he was not obligated to do so. Since [the farmer] * * * did not have an obligation to repurchase the farmhouse, he could not suffer a loss upon its destruction.
Section 500.24 gave the Crowells an opportunity to repurchase the farm. They were not obligated to do so. Therefore, they could not suffer a loss, for insurance purposes, upon its destruction.
The majority’s determination that an insurable interest existed under Minn.Stat. § 500.24, subd. (6) obviated the necessity of discussion there of whether an insurable interest arose through respondents’ continued residence on the property as tenants at sufferance or tenants at will. However, I feel obliged to address that issue here.
Upon scrutiny I conclude that a tenancy at sufferance or at will theory proves as insupportable here as a method of recovery as a statutory right theory. What loss does a tenant suffer upon the destruction of leased property? According to Harrington v. Agricultural Insurance Company of Watertown, New York, 179 Minn. 510, 512-15, 229 N.W. 792, 793-94 (1930), the tenant loses the right to use the property for the remainder of the lease period. Therefore, a tenant under a lease could have an insurable interest because that tenant had an expectation of continued use of the property for a set period of time. However, in the present case the owner of the property could have terminated the Cro-wells’ possession of it at any moment. Therefore, with no specified lease period, the Crowells can demonstrate no insurable interest because they can demonstrate no loss capable of being valued when the property is damaged or destroyed.
While I recognize the unfortunate experiences the Crowells have suffered throughout the foreclosure period and the subsequent destruction of the farmhouse, my understanding of the applicable law leads me inevitably to the conclusion that neither of the bases set forth by the trial court can support a finding that the Crowells had an insurable interest in the farmhouse at the time of the fire. Therefore, I would reverse and enter judgment for appellant.