Columbia Casualty Co. v. 3M Co.
814 N.W.2d 33
Minn. Ct. App.2012Background
- Respondents Columbia Casualty Co. and Continental Insurance Co. sued for insurance coverage; 3M and others counterclaimed for breach of contract, breach of fiduciary duty, and breach of the implied covenant; 3M also asserted abuse of process.
- District court dismissed several claims under Minn. R. Civ. P. 12.02(e) for failure to state a claim.
- 3M appealed challenging the dismissal of its implied-covenant claim.
- District court relied on the premise that a contract and implied covenant claim based on the same conduct cannot be maintained.
- Appellate court reversed and remanded, holding dual, alternative claims are permissible and pled adequately under Rule 8.05.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the implied covenant claim was properly dismissed. | 3M: claims are alternative contractual and implied-covenant theories. | Insurers: no independent tort or duplicative implied-covenant claim when based on same conduct as breach of contract. | No error; implied-covenant claim permissible alongside contract claim. |
| Whether Rule 8.05 allows pleading alternative theories based on same conduct. | 3M: Rule 8.05 permits alternative pleadings regardless of potential double recovery. | Insurers: dual pleading should be limited to avoid redundancy. | Rule 8.05 permits alternative theories; no double recovery bar precludes pleading. |
| Whether Wild v. Rarig and In re Hennepin County Recycling Bond Litig preclude an implied covenant claim based on same conduct as a contract claim. | 3M: Wild limited only tort damages; does not bar contractual and implied-covenant claims. | Insurers: the cases bar duplicative implied-covenant claims based on same conduct. | Wild does not bar the implied-covenant claim; the implied-covenant claim may proceed. |
Key Cases Cited
- In re Hennepin Cnty. Recycling Bond Litig., 540 N.W.2d 494 (Minn. 1995) (recognizes implied covenant in contracts and that it may accompany express terms)
- Wild v. Rarig, 302 Minn. 419 (Minn. 1975) (bad-faith termination not an independent tort; but does not preclude implied covenants as pleaded here)
- Wirig v. Kinney Shoe Corp., 461 N.W.2d 374 (Minn. 1990) (allows alternative theories; no double recovery required)
- Vesta State Bank v. Indep. State Bank of Minn., 518 N.W.2d 850 (Minn. 1994) (cannot double-recover for same wrong; supports alternative pleading.)
- Kelly v. Ellefson, 712 N.W.2d 759 (Minn. 2006) (illustrates notice pleading and alternatives under Rule 8.05)