Eberlein v. Standard Fire Insurance Company The

Background

John David Eberlein was injured on August 15, 2019, when a negligent motorist collided with his 2011 Yamaha motorcycle. The other motorist’s vehicle was insured by State Farm. Eberlein’s motorcycle was insured by Safeco, which paid him $50,000 in underinsured-motorist benefits after the applicable coverage limits were exhausted.

Eberlein also held a policy from The Standard Fire Insurance Company covering four other vehicles: a 2005 Mazda, a 2013 Chevrolet, a 2003 Subaru, and a 2001 Toyota. The Yamaha motorcycle was not listed on Standard’s declarations page, and the policy showed no premium for that motorcycle. After Standard denied Eberlein’s claim for excess underinsured-motorist benefits, he sued, and both parties moved for summary judgment.

Legal standards

Summary judgment is appropriate when there is no genuine dispute about a material fact and the moving party is entitled to judgment as a matter of law. Because the case involved insurance-policy interpretation and the record was undisputed, the court treated the central issues as legal questions.

The court applied Minnesota law. Under that law, an insurance policy is interpreted as a whole, and clear terms receive their ordinary meaning. An ambiguous term—one reasonably open to two or more interpretations—is generally interpreted in favor of coverage. The insured bears the burden of showing that the policy’s coverage was triggered, while the insurer bears the burden of showing that an exclusion applies.

Court’s analysis

The policy’s underinsured-motorist insuring agreement required Standard to pay compensatory damages that an insured was legally entitled to recover because of bodily injury caused by an accident involving an underinsured motor vehicle. The court found that Eberlein was a named insured and that his injuries resulted from such an accident. Therefore, the accident triggered the policy’s underinsured-motorist coverage.

The court rejected Standard’s argument that coverage could not exist solely because Eberlein had not paid a premium for the motorcycle. Although the motorcycle was not listed on the declarations page, Eberlein had paid for underinsured-motorist coverage for four other vehicles, and the insuring agreement did not limit the initial coverage trigger to accidents involving a vehicle for which a premium had been paid.

The court also rejected Eberlein’s argument that the policy’s “Other Insurance” provision itself granted coverage. That provision coordinated payment priorities when multiple policies providing underinsured-motorist benefits were triggered. It did not independently create coverage; the insuring agreement determined whether Standard’s coverage was triggered.

The court then applied the policy’s owned-but-not-insured vehicle exclusion. That exclusion stated that Standard did not provide coverage for bodily injury sustained while an insured occupied a motor vehicle owned by that insured that was not insured for “this coverage.” The court held that “this coverage” unambiguously referred to underinsured-motorist coverage under Standard’s policy, not underinsured-motorist coverage from any insurer.

Because Eberlein owned the motorcycle, the motorcycle was not identified as an insured vehicle under Standard’s policy, and no premium was paid for it, the exclusion applied. Thus, although the accident triggered the policy’s insuring agreement, the exclusion barred excess underinsured-motorist benefits.

The court separately held that Minnesota’s No-Fault Act did not require Standard to provide these benefits. The statute did not require minimum underinsured-motorist benefits for injuries suffered while occupying an owned motorcycle, and it permitted an owned-but-not-insured vehicle exclusion for other motor vehicles. Eberlein conceded that the statute did not require excess coverage in these circumstances.

Disposition

Judge Susan Richard Nelson denied Plaintiff’s Motion for Partial Summary Judgment and granted Defendant’s Cross-Motion for Summary Judgment. The court ordered that judgment be entered accordingly.