Court Opinion

ID: 9670173
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:16:20.369245+00
Date Added: 2024-06-11T09:42:21.572968
License: Public Domain

SHERAN, Chief Justice
(dissenting).
I am unable to subscribe to the majority opinion of Mr. Justice Kelly, which in my view takes a major step beyond our previous holdings that is unacknowledged and unwarranted. The result is to disregard the language of insurance policies and to impose burdens on insurance companies for which they have in no way bargained. *56In this case an off-duty minor employee broke into a locked office and stole a bottle of whiskey belonging to the store’s owner.1 Another minor subsequently consumed some of the alcohol and drove into a telephone pole. The eventual result was a dramshop action against the store owner and his business. The majority holds the owner’s insurance companies, which had expressed exclusions applying to such a suit,2 responsible for the dramshop defense because they knew that what had really happened had nothing to do with the serving of liquor to a minor, i. e., the real facts did not fall within the exclusions to their policies. But neither did the real acts known to the insurance companies establish any cause of action which they would in fact be liable to defend. There was, of course, the possibility that a suit would be brought under some farfetched negligence theory that the policies would then cover. In fact, such a suit eventually was brought here. But a similar possibility exists in every case; there is no justification for holding an insurance company responsible for it unless it is a substantial likelihood or until it actually materializes. The facts here indicated neither a covered cause of action nor the likelihood of a covered suit.
The majority cites as authority for its rule Crum v. Anchor Casualty Co., 264 Minn. 378, 119 N.W.2d 703 (1963), which held that facts outside the complaint known to the insurance company can establish an obligation to defend. But Crum was already a limited exception to the general rule that the allegations of the complaint determine the obligation to defend. In Crum, although the suit was brought within an exclusion to the policy, the actual facts known to the insurance company established a cause of action that the company would be obligated to defend. Thus, it appeared to make good sense to require the insurance company to handle the defense. The case currently before us is different. Not only was the suit brought within exclusions to the two policies, but the actual facts known to the insurance companies established no cause of action within the coverage of either policy.
Thus, the majority has extended the holding of Crum from “defense required when facts known establish a cause of action covered by the policy”3 to “defense required when facts known indicate the exclusion doesn’t apply.” I see no rationale for such a step. It may be that what we have before us here is a relatively unique case. Ordinarily, if known facts indicate an exclusion doesn’t apply, and the policy is a comprehensive one, a cause of action covered by the policy will probably be established. This case is different because the known facts indicate no liability at all, yet the plaintiff went ahead with the amended suit. Thus, a mistaken dramshop action became a farfetched negligence suit. Yet until that amended suit was actually brought there was simply nothing linking the insurance companies to the original action. To hold insurance companies responsible for the defense of an excluded suit under such circumstances is to ignore their right as businesses to provide only that product specified by the bargaining process. I would affirm the trial court.

. The theft of the beer appears irrelevant because there was never any evidence that it was consumed by the injured minor.

. State Auto’s policy contained a provision expressly excluding dramshop actions from coverage. Fireman’s Fund excluded damage arising out of business pursuits, which would appear to include a dramshop action.

. The court in Crum summarized its holding as follows: “ * * * We think the better rule is that, if the insurer is advised by the insured what he claims the facts to be or the insurer by an independent investigation ascertains that the facts are in conflict with the complaint and, if established, will present a potential liability on the part of the insured covered by the insurance contract, the insurer is obligated to undertake the defense.” 264 Minn. 392, 119 N.W.2d 712.