Great West Casualty Company v. Decker

Background

On December 21, 2012, an 1,800-pound hay bale fell from Ruben Decker’s flatbed trailer and injured him while hay was being loaded at Michael Selle’s farm. Decker was preparing to secure the hay with straps. He testified that he was bent beside the trailer and had one hand touching its underside, but that this was his only physical contact with the vehicle during the loading process. He was not on the trailer or inside the truck or trailer.

The trailer was covered by a Great West commercial auto policy issued to KW Trucking. The policy included up to $40,000 in no-fault benefits and up to $1 million in liability coverage. Its no-fault section excluded injuries arising from loading or unloading a vehicle unless the injured person was “occupying” the vehicle. The policy defined “occupying” as being “in or upon, entering into, or alighting from” the vehicle.

Great West denied Decker’s no-fault claim. In its early communications, Great West referred to North Dakota’s $30,000 no-fault limit rather than Minnesota’s $40,000 limit, although the court concluded that Minnesota law governed the policy. Decker later asserted counterclaims for violations of the Minnesota Consumer Fraud Act, breach of contract, breach of the implied covenant of good faith and fair dealing, and declaratory relief. The parties filed cross-motions for summary judgment, a procedure that resolves a claim without trial when there is no genuine dispute over facts that could affect the result and one party is entitled to judgment under the law.

No-Fault Benefits and Related Contract Claims

The court applied Minnesota law. Minnesota’s No-Fault Act permits an insurer to exclude coverage for injuries arising during loading or unloading unless the person was occupying, entering, or getting out of the vehicle. Minnesota decisions require courts to give policy terms such as “occupying” their ordinary, literal meaning.

The court held that Decker was not occupying the trailer when the hay struck him. His brief contact with the trailer’s underside did not mean that he was “upon” it, and he was not in, entering, or leaving the truck or trailer. Because the injury arose during loading and Decker was not occupying the vehicle, Great West properly denied no-fault benefits. The court did not need to decide Great West’s alternative argument that the injury did not arise from the maintenance or use of a motor vehicle as a vehicle.

Because Decker’s breach-of-contract and implied-covenant claims depended on the denial of no-fault benefits, the court also granted Great West summary judgment on those claims. The court separately granted summary judgment to Great West on Decker’s conceded claim for medical benefits under the commercial general liability provision.

Consumer-Fraud Claim

Decker contended that Great West systematically denied or underpaid no-fault claims involving out-of-state accidents by applying the law of the accident state instead of Minnesota law, and that Great West concealed this practice from policyholders. The court held that Great West was entitled to summary judgment for two independent reasons.

First, Decker could not show the required injury. Although Great West incorrectly referred to North Dakota’s coverage limit when denying Decker’s claim, both North Dakota and Minnesota excluded coverage for a loading-related injury when the claimant was not occupying the vehicle. Thus, Decker was not entitled to the $40,000 Minnesota benefit, and the error did not financially harm him.

Second, Decker did not provide evidence from which a reasonable jury could find that Great West’s conduct affected the public. Great West’s claims data showed that it paid many out-of-state claims, and its witnesses testified that its policy was to consider the coverage laws of both states. The court found that Decker’s evidence did not establish a widespread fraudulent scheme rather than an individual dispute.

Coverage for Selle

Decker also argued that Great West had to defend and indemnify Selle in the North Dakota negligence case because Selle was a permissive user of the trailer. Great West relied on the policy’s moving-property exclusion, which excluded from the definition of an insured certain people who used a covered vehicle while moving property to or from it.

The court held that Minnesota law did not invalidate this exclusion. The Minnesota No-Fault Act did not require complete liability coverage for every permissive user. The court also explained that insurers have more freedom to limit third-party liability coverage than first-party benefits, and that the exclusion was a narrow restriction involving the movement of property rather than an attempt to eliminate all permissive-user coverage. The court therefore granted Great West summary judgment on the residual liability-coverage dispute and did not require Great West to defend or indemnify Selle.

Disposition

The court ordered that Great West’s motion for summary judgment was GRANTED, Decker’s motion for summary judgment was DENIED, and Decker’s supplementary counterclaim was DISMISSED WITH PREJUDICE. The court directed that judgment be entered accordingly.