877 N.W.2d 191
Minn.2016Background
- On March 30, 2007 Jamy Hegseth was injured as a passenger in a hit-and-run collision; the tortfeasor was uninsured.
- Hegseth had $50,000 primary UM coverage available from West Bend (host vehicle) and $100,000 UM coverage from American Family (her own policy), the latter considered excess under Minn. Stat. § 65B.49, subd. 3a(5).
- June 14, 2012: Hegseth settled with West Bend for the $50,000 primary UM limit.
- August 17, 2012: Hegseth demanded excess UM payment from American Family; American Family denied the claim on September 13, 2012.
- July 9, 2013: Hegseth sued American Family for excess UM benefits; district court granted summary judgment to American Family holding the excess claim accrued on the accident date and was time-barred by the 6-year contract statute of limitations; court of appeals affirmed.
- The Supreme Court granted review to decide when an excess UM claim accrues under the No-Fault Act.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| When does a cause of action for excess uninsured motorist (UM) benefits accrue? | Hegseth: accrual is delayed until insurer denies the excess claim (date of breach) because resolution of the primary UM claim is a condition precedent. | American Family: accrual occurs on the date of the accident (Weeks rule); the 6-year contract limitations period therefore began at the accident. | Court: accrual for all UM claims, including excess, is the date of the accident; resolution of the primary claim is not a condition precedent. |
Key Cases Cited
- Weeks v. Am. Family Mut. Ins. Co., 580 N.W.2d 24 (Minn. 1998) (UM claims accrue on the accident date)
- Oanes v. Allstate Ins. Co., 617 N.W.2d 401 (Minn. 2000) (UIM claims accrue on settlement or judgment; addressed condition-precedent paradox)
- Oganov v. Am. Family Ins. Grp., 767 N.W.2d 21 (Minn. 2009) (UM accrual deferred to insurer-insolvency date when insurer later declared insolvent)
- Sleiter v. Am. Family Mut. Ins. Co., 868 N.W.2d 21 (Minn. 2015) (clarified meaning of "coverage available" for determining excess exposure)
- Carlson v. Allstate Ins. Co., 749 N.W.2d 41 (Minn. 2008) (treating § 65B.49, subd. 3a(5) as a priority scheme, not a sequencing rule)
- Emps. Mut. Cos. v. Nordstrom, 495 N.W.2d 855 (Minn. 1993) (discussing condition precedent principles for UIM claims)