Court Opinion

ID: 7877650
Source: CourtListenerOpinion
Date Created: 2022-09-08 21:17:26.024037+00
Date Added: 2024-06-11T16:31:27.330907
License: Public Domain

LANSING, Judge
(dissenting).
The majority fails to properly take into account the effect of the policy’s severability clause and for that reason, I believe, misconstrues the policy language. The exclusion at issue is for liability coverage for “bodily injury to you and any insured.” The definition of “insured” includes relatives residing in the named insured’s household.
It is not disputed that the Fournelles, each of whom was a separate named insured, occupied separate households at the time of the shooting. As the majority acknowledges, both children were residents of Joanne Fournelle’s household. It is also undisputed that the policy contains a sever-ability clause which provides:
Severability of Insurance. This insurance applies separately to each insured. This condition shall not increase our limit of liability for any one occurrence.
Appellant argues that this clause requires the liability coverage to be determined separately for each named insured. Under this theory, the term “you” in the exclusionary clause refers to the named insured who requires coverage. Because coverage is sought for Robert Fournelle, the term “any insured” would include Robert Fournelle and specified residents of his household. The children were not residents of Robert Fournelle's household and consequently they are not excluded from making claims.
In Utica Mutual Insurance Co. v. Emmco Insurance Co., 309 Minn. 21, 243 N.W.2d 134 (1976), the supreme court considered the effect of a severability clause relating to employees. The policy excluded liability coverage for injuries to any employee of the insured. At issue was whether an insured under the policy could be denied liability coverage for injuries sustained by an employee of a different insured under the same policy. The court concluded:
[TJhe severability clause dictates that the exclusion should be construed only with reference to the particular insured seeking coverage * * *.
Id. at 31, 243 N.W.2d at 140. The court held that the employee exclusion clause did not apply when the insured who was seeking coverage did not employ the injured employee.
The same principle is involved here. The severability clause requires that the household exclusion clause be applied with reference only to the particular named insured seeking coverage. This interpretation is consistent with National Farmers Union Property and Casualty Co. v. Anderson, 372 N.W.2d 71 (Minn.App.1985). As stated in Anderson, the purpose of the household exclusion clause is to prevent collusion. Id. at 76. This purpose loses force if the insured seeking liability coverage does not reside with the injured party.
The majority’s reliance on State Farm Fire & Casualty Co. v. McPhee, 336 N.W.2d 258 (Minn.1983) is misplaced. In McPhee, the supreme court held that a named insured under a homeowner’s policy was not divested of her insured status merely because she moved to a different residence. In applying the household exclusion clause, the court did not expressly consider whether that clause should be applied separately to each named insured. Moreover, it appears that the policy in McPhee did not have a severability clause.