 Insurance Law |
Auto-Owners Ins. Co. v. Second Chance Investments, LLC, -- N.W.2d -- (Minn. 2013) In a unanimous decision, the Minnesota Supreme Court ruled that a courtroom, rather than an appraisal proceeding, is the appropriate forum for determining whether a fire resulted in a total loss under the appraisal provision in the Minnesota standard fire insurance policy statute, Minn. Stat. § 65A.01 (2012). The Court said that the statute’s plain language removes disputes “in cases of total loss on buildings” from the appraisal process. |
|
Ram Mut. Ins. Co. v. Rohde d/b/a Studio 71 Salon, No. A10-2146, 2012 WL 3822155 (Minn. Sept. 5, 2012) The Minnesota Supreme Court rejected the rule from United Fire & Casualty Co. v/ Bruggeman, 505 N.W.2d 87 (Minn. App. 1993), rev. denied (Minn. Oct. 19, 1993) (holding that landlords and tenants are co-insureds for subrogation purposes and hence an insurer cannot bring a subrogation action against its insured's negligent tenant), and concluded that the case-by-case approach "is the soundest method to evaluate when an insurer has a subrogation right against an insured's tenant." Id. at 7. Rather than keeping with the standard set forth by the court of appeals in Bruggeman, the Minnesota Supreme Court adopted a "middle ground" approach. This approach, which is also followed in other jurisdictions, determines the availability of subrogation based on the reasonable expectations of the parties under the facts of each case. |
|
Remodeling Dimensions, Inc. v. Integrity Mut. Ins. Co., No. A10-1992, 2012 WL 3587825 (Minn. Aug. 22, 2012) This Minnesota Supreme Court decision will impact the content of reservation of rights letters in cases where the plaintiff seeks damages, some of which are potentially covered and some which are not covered under the insured's commercial general liability policy. The Minnesota Supreme Court concluded that when an insurer notifies an insured that it is accepting defense of an arbitration claim under a reservation of rights, the insurer has a duty to disclose to the insured the insured's interest in obtaining a written explanation of the award that identifies the claims or theories of recovery actually proved and the portions of the award attributable to each. While the Remodeling Dimensions case involved an arbitration, policyholders will likely argue that the case also applies to lawsuits where a special verdict form allocating claims and damages could be used. |
|
| Personal Injury, Medical Liability & Health Care |
|
Renswick v. Wenzel, 819 N.W.2d 198 (Minn. Ct. App. 2012), rev. denied (Oct. 16, 2012). Plaintiff Renswick, a guest at Defendant Wenzel’s home, commenced a negligence action against Wenzel after she fell down a staircase at Wenzel’s home and sustained serious injuries. While the appeal addressed several issues, of interest was the court of appeals’ response to an issue of first impression: whether Medicare benefits constitute a collateral source that is excepted by the statute’s exception clause. Wenzel argued that to the extent Renswick’s medical care costs were covered either by Medicare payments or by Medicare-negotiated reductions, the district court should have reduced the damages award under Minnesota’s collateral-source statute, Minn. Stat. § 548.251. Section 548.251 prevents a plaintiff in a contract or tort action from receiving a double recovery in some situations. The Minnesota Court of Appeals held that Medicare benefits in the form of payments for medical care or Medicare-negotiated discounts to reduce the injured tort plaintiff’s medical care costs are an exception to the collateral source rule and therefore, they do not provide a basis to reduce the injured tort plaintiff’s damages award. As such, defendants do not get the benefit of the “gap” under Swanson v. Brewster for Medicare payments. |
|
Swanson v. Brewster, 784 N.W.2d 264 (Minn. 2010) Holding that the word “payment” in Minnesota’s collateral source statute, Minn. Stat. § 548.251, includes discounts negotiated by a private health insurer with the plaintiff’s health care provider.
|
br