Court Opinion

ID: 9670675
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:24:08.545821+00
Date Added: 2024-06-11T18:16:05.903651
License: Public Domain

HARVEY A. HOLTAN, Judge
(dissenting).
I respectfully dissent because count V of the proposed amended complaint fails to state a claim for equitable estoppel. There is no allegation that any policyholder or the *166Commissioner reasonably relied on any representation made to the Commissioner by any of the respondents. See Transamerica Ins. Group v. Paul, 267 N.W.2d 180, 183 (Minn.1978) (reliance a necessary element of equitable estoppel).
The majority relies on Sawyer v. Midland Ins. Co., 383 N.W.2d 691 (Minn.App.1986), pet. for rev. granted (Minn. May 16, 1986), rev. vacated, 397 N.W.2d 893 (Minn.1986), to find equitable estoppel. This reliance is misplaced because Sawyer is not an equitable estoppel case. It is a case of statutory construction and application. As a matter of law, the only policy the Sawyer insurer could issue was a policy which conformed to the policy filed with and accepted by the Commissioner. Any policy not filed with and accepted by the Commissioner is void and unenforceable under Minn.Stat. § 70A.06 (1984). See Miller v. National Farmers Union Property & Casualty Co., 470 F.2d 700, 704 (8th Cir.1972). The insurer is obligated to provide coverage according to the terms of the policy filed and accepted by the Commissioner pursuant to section 70A.06, subdivision 2; such obligation arises not from its private contract with the insured but from its agreement with the state. Sawyer, 383 N.W.2d at 694 (citing Petty v. Allstate Ins. Co., 290 N.W.2d 763 (Minn.1980)).
The application of the filed policy terms was a straight application of the law. Misrepresentation and reliance were not involved. The insurer in Sawyer was “es-topped” to assert the terms of the policy it issued because of the application of the statute, and not because of equity concerns.
In the instant case, however, the terms of the policy issued conform to the terms of the policy filed and approved. Sawyer is not applicable here.
Misrepresentation and reasonable reliance are required to prevent a party from asserting rights he would otherwise have. In re Estate of Peterson, 203 Minn. 337, 342-43, 281 N.W. 275, 278 (1938). In Sawyer, the insurer had no rights under its void and unenforceable policy. In the instant case, the insurer has a right to enforce the terms of its duly filed and approved policy.
There is a real question as to whether any part of the IRB explanation is a misrepresentation. Even if there were misrepresentations, if the application of the pollution exclusion clause is clear, as Morton and Sylvester Bros, find, how can it be said that the Commissioner reasonably relied on the IRB explanation? There can be no reasonable reliance when the language of the insurance policy is clear on its face. Notwithstanding these findings, Morton applied equitable es-toppel on the ground that the insureds have virtually no choice but to accept the policy approved by the state because the insurers are not involved in arms-length bargaining over policy terms.
The Minnesota statutory scheme was devised to protect the public through a commissioner who has a technical staff and is granted statutory power to obtain all the information from insurers which may be needed to assess the insurers’ representations, the risks being covered, policy provisions and rates. The scheme also provides the Commissioner with ample power to correct errors and to sanction insurers. The statutes do not contemplate a forum in which insureds may bargain with insurers at arms-length.
The classic elements of equitable estoppel are difficult to apply in these situations. A statutory remedy is preferable to a contrived equitable estoppel remedy as the Morton court and the majority seek today.
Although the trial court misapplied Sylvester Bros., I would affirm.