Court Opinion

ID: 8245202
Source: CourtListenerOpinion
Date Created: 2022-10-16 09:29:11.585806+00
Date Added: 2024-06-11T16:42:40.876714
License: Public Domain

PAGE, Justice
(concurring in part, dissenting in part).
I respectfully dissent. While I agree with the court’s conclusion that primary *707underinsured motorist (UIM) coverage is unavailable to Oczak from the West Bend policy covering North End under our rule precluding co-primary coverages, I disagree with the court’s conclusion that the West Bend policy does not provide excess UIM coverage.
The court concludes that under Minn. Stat. § 65B.49, subd. 3a(5) (2008), the excess UIM coverage referenced in West Bend’s policy is only available to “named insureds.” The “named insured” on the West Bend policy is “North End 66, Inc.” Yet, the policy was intended to cover North End employees driving customers’ vehicles, and neither Oczak nor any other employee of North End is listed in the policy as a “named insured.” Because Oc-zak is not a “named insured” on the West Bend policy, the court holds that the policy does not provide excess UIM coverage in this case. If, in fact, as the court holds, the policy language excludes Oczak and all other North End employees from receiving excess coverage, North End, through Oc-zak, its owner, paid a premium for illusory and nonexistent coverage. The coverage is illusory and nonexistent because, for all accidents in which a North End employee (including Oczak) is driving a customer’s vehicle,1 the employee will never under any circumstances be the “named insured.”
In its “Minnesota Uninsured and Under-insured Motorists Coverage” endorsement ¶ E.l.b(l)(b), the policy provides:
Any insurance we provide with respect to a vehicle you do not own shall be excess over any collectible uninsured or underinsured motorists insurance providing coverage on a primary basis.
If the coverage under this coverage form is provided:
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(ii) On an excess basis, we will pay only our share of the loss that must be paid under insurance providing coverage on an excess basis. Our share is the proportion that our total limit of liability bears to the total of all applicable limits of liability for coverage on an excess basis.
(Emphasis added.)
The court’s decision reads the words, “Any insurance we provide with respect to a vehicle you do not own shall be excess over any collectible uninsured or underin-sured motorists insurance” out of the policy. But whenever possible, we construe liability insurance contracts so as not to provide illusory coverage. Hoeschen v. South Carolina Ins. Co., 378 N.W.2d 796, 799 (Minn.1985) (citation omitted). The court’s construction makes it impossible for the West Bend policy to ever provide UIM coverage for North End employees driving an underinsured customer vehicle, notwithstanding the fact that the policy was intended to provide coverage for customer vehicles. The court suggests that the West Bend coverage is not illusory because it is possible for West Bend to be obligated to provide UIM benefits as primary coverage under the policy when an employee of North End is driving a motor vehicle listed on the policy’s declarations page and is involved in an accident with an at-fault underinsured driver. The fact that the West Bend policy may provide coverage for an employee driving a vehicle listed on the policy’s declarations page says nothing about the illusory nature of the West Bend policy as it relates to customer vehicles. Customer vehicles will never be listed on the declarations page of *708the policy and the employee driving the vehicle will never be a “named insured” under the policy. The end result of the court’s construction is that North End has purchased coverage that does not exist.
The court, relying on Becker v. State Farm Mut. Auto. Ins. Co., concludes that the correct interpretation of “otherwise insured” is limited to the “named insured.” 611 N.W.2d 7 (Minn.2000). However, the court simply plucks that conclusion out of Becker divorced from its context and limited applicability. In Becker, we were interpreting the second sentence of subdivision 3a(5), which reads, “However, if the injured person is occupying a motor vehicle of which the injured person is not an insured, the injured person may be entitled to excess insurance protection afforded by a policy in which the injured party is otherwise insured.” Minn.Stat. § 65B.49 sub. 3a(5) (emphasis added). We held that “an insured” in the context of first priority coverage — UIM coverage available from the occupied vehicle — means a “named insured” and concluded that an employee must be a “named insured” on her company’s insurance policy in order to be precluded from accessing her personal UIM coverage. See Becker, 611 N.W.2d at 9 (State Farm moved for summary judgment, claiming that Becker is “an insured under her employer’s insurance policy on the occupied vehicle” (emphasis added)); see also Carlson v. Allstate Ins. Co., 734 N.W.2d 695, 702 (Minn.App.2007), aff'd, 749 N.W.2d 41 (Minn.2008) (“Becker construed the term ‘an insured ’ as it appears in the first paragraph of section 65B.49, subdivision 3a(5), not ‘is insured,’ which is the term used in the second paragraph of section 65B.49, subdivision 3a(5)” (emphasis added)).
The case before the court today deals with second priority coverage. Therefore, the question is not whether Oczak is “an insured” under the primary vehicle’s policy, but rather whether Oczak qualifies as “otherwise insured” under West Bend’s policy. Becker does not define or even consider the meaning of the term “otherwise insured” as set out in section 65B.49, subdivision 3a(5). The policy discussion in Becker does, however, provide the court with guidance. In Becker, we noted that the purpose of the statutory framework was to give “motor vehicle owners the ability to select and purchase the amount of UM/UIM coverage they desire in excess of the mandatory minimums, and then access that coverage in the event they are injured while occupying a vehicle owned by someone who has purchased only the minimum UM/UIM coverage.” Becker, 611 N.W.2d at 13. In Carlson, we went on to make clear that subdivision 3a(5) is intended as a list of priorities, rather than as a basic definition of “insured”; therefore, the policy language of each individual policy controls and not the statute. Carlson, 749 N.W.2d at 46-47. In other words, subdivision 3a(5) defines the source of the coverage, not the scope of the coverage. See id. at 74 n. 4.
With today’s decision, the court ignores Becker and Carlson and uses subdivision 3a(5) to define the scope of coverage and not the source of coverage. The court also misapplies Becker to define “otherwise insured” when a careful reading of Becker reveals that Becker was limited to defining “an insured” and did not discuss the term “otherwise insured.” Moreover, subdivision 3a(5)’s plain language leads to the conclusion that someone who is “otherwise insured” is not required to be “an insured.” Here, Oczak through his company North End bought coverage from West Bend to provide coverage, including excess UIM coverage, for situations involving North End employees driving “customer vehicles.” West Bend intended the North End policy to cover North End employees *709driving customer vehicles. Neither section 65B.49, subdivision 3a(5), by its express language or its intended purpose precludes such coverage.
I would hold that Oczak qualifies as “otherwise insured” under the West Bend policy and is entitled to the benefit of the premium North End paid to West Bend for excess UIM coverage. As a result, I would conclude that Oczak is entitled to receive excess UIM benefits under that policy.

. The record is clear that the West Bend policy was intended to provide coverage for customer vehicles.