Court Opinion

ID: 7873455
Source: CourtListenerOpinion
Date Created: 2022-09-08 20:56:37.524738+00
Date Added: 2024-06-11T16:31:19.283717
License: Public Domain

TODD, Justice
(dissenting).
I must respectfully dissent from the majority opinion because its reasoning is not in line with our often-stated rules for the interpretation of insurance contracts.
Our general rule with regard to the interpretation of insurance contracts is that the words of the contract must be interpreted in their ordinary and usual sense so as to give effect to the intent of the parties as it appears in the policy language. See Dairyland Ins. Co. v. Implement Dealers Ins. Co., 294 Minn. 236, 199 N.W.2d 806 (1969). In addition, the terms of an insurance policy should “be construed according to what a reasonable person in the position of the insured would have understood the words to mean rather than what the insurer intended the language to mean.” Canadian Universal Ins. Co., Ltd. v. Fire Watch, Inc., 258 N.W.2d 570, 572 (Minn.1977). In this case, I believe the majority has violated both of these rules.
The intent of the parties to the insurance contract, in the absence of an ambiguity, must be determined from the words of the contract itself. An examination of the policy in this case reveals that the parties contemplated insuring the plaintiff’s automobile inventory in the context of the plaintiff’s business. For example, the policy provides for premium calculation on the basis of plaintiff’s inventory on the last business *840day of each preceding month. Thus, as in any successful car dealership, it was contemplated that plaintiff’s inventory would be in a constant state of flux. The business of a car dealership also involves inventory moving onto and off of the premises for reasons other than that a final sale has been consummated. A car might be taken off the premises to effectuate a repair, to demonstrate to a customer, or, as in this case, to be washed in preparation for sale. The defendant is charged with knowledge of the nature of plaintiff’s business and the risks it insures at the time the policy is issued.
The majority elevates the intent of the insurance company in drafting the policy language to a position of dominance over the insured’s reasonable interpretation of the contract language. The majority seems persuaded that the changes in policy language made by the defendant after our decision in Jacobson v. Aetna Casualty & Surety Co., 233 Minn. 383, 46 N.W.2d 868 (1951), are of significance. The language at issue in the Jacobson case excluded a loss caused to the insured if he “voluntarily parts with title or possession” of any covered automobile. Id. at 384, 46 N.W.2d at 870. The language of the policy exclusion in this case is “voluntarily part” with any covered automobile. In addition to this change, the majority relies on the fact that the insured was offered a differently worded policy that did not include the above-quoted exclusionary clause.
I do not believe that the changed policy language or the fact that the insured was offered a coverage that did include loss by trick, scheme, or false pretense is determinative of the question presented in this case. This is all evidence of the intent of the insurer, not of the insured. Nothing in the record indicates that the insured understood the differences in coverage, nor do I believe that a reasonable insured would interpret the policy language as the majority has done in this case.
The policy language is clear — it excludes a loss caused when someone induces the insured to part with a covered automobile by some trick or false representation. I would agree with the majority if the salesman had merely taken the vehicle and disposed of it without obtaining the title documents. Such activity would be within the scope of the language inserted in the policy and preclude recovery. However, that is not the factual situation in this case. The employee’s activity in this case is simply a theft. First, the employee drove the car off the plaintiff’s lot without any representation that he was doing something other than his job. Second, when the employee sold the stolen ears, he was able to deliver the title documents for each vehicle. In order to obtain the title documents, the employee had to enter a secured area in the employer’s premises, to which he was not given access, and steal them. The title documents allowed the employee to obtain a higher price for the stolen cars than he would otherwise have received. This activity did not depend for its success on a trick, scheme, or false representation made to the plaintiff. The majority opinion totally ignores the fact that it was the theft of the title documents which was the mechanism which transferred the salesman’s possession of the vehicle into a merchantable item and effected the conversion of the property, a covered loss under the policy.
I would hold that the plaintiff in this case, given the context of his business and attributing to the contract language its ordinary meaning, did not part with the automobiles. In addition, I would hold that the manner in which the cars were obtained by the employee was a theft rather than a trick, scheme, or false pretense. Therefore, I would reverse the district court and order judgment for the plaintiff.