*1 final issue raised defend 5. The hearing of a on his
ant relates to the denial relief, petition
petition postconviction newly discov
which was based on a claim of prosecutor
ered evidence. The moved to ground on the that the evidence was
dismiss newly discovered evidence because it police report
had been contained in a given
which defense counsel had been ac repre
cess before trial. Defense counsel
senting postconviction pro defendant in the
ceeding apparently deny did not this. Un circumstances,
der the the district court
properly petition without a dismissed
hearing.
Affirmed. LANOUE,
Roger Individually and d. b. Rog Superette, Rog &
a. & Jim’s
Jim’s, Inc., Appellants,
v.
FIREMAN’S FUND AMERICAN INSUR COMPANIES, Respondent,
ANCE
State Automobile and
Underwriters, Respondent, al., Respondents,
Donald L. Anderson et Taaffe, Individually
Richard D. and d. b. Respondent, Liquors,
a. Pixie
Speedy Incorporated, Market
Respondent, al.,
Jeffrey Respondents, Lindsholm et al., Respondents,
Daniel et O’Brien al.,
Greg Respondents. et Orthun
No. 48272.
Supreme Court of Minnesota.
March 1979.
Rehearing May Denied
Meyer, Miller, Nelson Rolf T. Nelson & Roger Robbinsdale, and Eye, appel- N. for lants.
Barnett, Ratelle, Vort, Hennessy, Vander Herzog, Herzog, Stasel & and W. Scott Min- neapolis, for Fireman’s Fund American Ins. Companies.
Murnane, Murnane, Conlin & White and Paul, Nyberg, Lance B. St. for Auto- State mobile and Underwriters. Geer, Markham, Meagher, Anderson, Ad- amson, Brennan, Flaskamp Minneapolis, & for Anderson et al.
George Roth, Minneapolis, S. for Taaffe et al. Donlin, Paul,
Paul G. Speedy St. Mar- ket, Inc. Fonken, Paul,
Mark A. St. for Lindsholm et al. F. Meany, Minneapolis,
Thomas O’Brien et al. Fitzgerald,
David F. Minneapolis, for Or- thun et al. KELLY, TODD,
Heard before and SCOTT, JJ., and considered and decided the court en banc.
OPINION KELLY, Justice. insureds, appeal by Roger
This is an Inc., Lanoue Rog and Jim’s from a declaratory judgment holding that the in- surers, Fireman’s Fund American Insurance Companies and State Automobile and Casu- alty Underwriters, were not defend a suit on behalf of the insureds and Jeffrey drank the beer. There- that the insureds not entitled to the fees, costs, driving vehicle, Jeffrey and disbursements in- after while he curred in defense. We reverse and in a 1-car accident. involved remand. 1975,the September parents Jeffrey Lanoue, Jim’s,
Roger Rog proceedings through legal initiated Anderson Inc., Lanoue, operated Rog Rog owned and individually Jim’s and d/b/a *3 alleged Superette. Lanoue Superette. maintained a & Jim’s The Andersons “Cove- Lanoue, policy through agents, rall” on his business issued servants State his intoxicating Automobile and employees, Underwriters or had furnished (hereinafter and, Auto). as beverages Jeffrey State He also main- a Anderson result, Policy” injured. The Jeffrey tained a “Homeowner’s issued Anderson was complaint, alleged only shop Fireman’s dram Fund American Insurance which Com- $750,000 (hereinafter Fund). facts, damages. panies Fireman’s asked for 20, 1974, Upon learning complaint December had of thé Lanoue On Lanoue sever- locked, al who him the State whiskey private agent bottles of in his called the had sold learned of policy. office which was in the room Auto Lanoue had located back whiskey superette. of the theft of the beer and The bottles Christ- O’Brien’s gifts day following from the the theft mas several of Lanoue’s whole- from O’Brien on he connection suppliers yet sale but had not but was not aware of Lanoue taken beer and superette taking them home. The the did not sell between O’Brien’s whiskey, though whiskey Jeffrey it accident sell 3.2 beer. and Anderson’s did and until served with the summons he was O’Brien, minor, Daniel a then was complaint. story the entire Lanoue related employee of the At superette. approxi- whiskey the the concerning both beer and m., mately p. superette while the was agent relayed to his who business, O’Brien, open for who then State Auto. duty, superette. off entered went the He the claim tendered the of superette, the back room of the removed Lanoue defense 6-packs four of 3.2 from a and Auto declined beer cooler State door, excluded placed by State Auto policy them the back which The issued outside resulted the of action coverage was latched from the inside. O’Brien then where cause jimmied door, bev- selling serving or of alcoholic lock on Lanoue’s office from the illegally. erages a whiskey removed one of from either as bottles Fireman’s placed made to the office and it outside the back Tender was thereafter a insur- superette, Fund basis of Homeowner’s door the beer. on the pol- The O'Brien returned front of which Lanoue carried. the store items, exclu- purchased icy purposes” a “business paying by and several had both exclusion and premises” He sion “other enough check. added to the check to and an any other in- provided coverage the cost of had placed cover the beer he excess door, also declined stating outside the back clerk surance. Fireman’s Fund repaying money that he was owed defend. Lanoue. employees duty ap-
Neither of the two counsel to engaged Lanoue As a result parently noticed O’Brien’s actions with the to initiate a action and defend the Anderson whiskey beer. O’Brien left against State declaratory judgment action superette by the entrance front and then Shortly before Auto Fireman’s Fund. whiskey he recovered beer and had left action, declaratory judgment trial of the outside the back door. action was complaint Anderson negligence allege claim Although in the amended to conflict existed testimo- Thereafter, trial at the ny, a matter Lanoue. the trial court found as of fact action, both in- Anderson, judgment declaratory Jeffrey later than night agreed to defend minor, companies who was then a drank some of the surance amend- by of action added liquor. presented No second cause evidencé indicated ed complaint engaged employ- on a limited in the her basis to their course of policy provisions. ment when the accident occurred. Never- from the theless the insurer withdrew de- At the declaratory conclusion of the ac- fense After set- complaint. of the amended tion the trial court found neither of tenant, tling with sued for attor- Crum insurers was to defend the ney settlement The insurer fees and costs. initial Anderson cause of action and that duty to defend under these held to costs, the insurers were not liable dis- even after bursements, circumstances or attorneys until fees the com- plaint action which amended to state a cause of was amended to an allegation include negligence. covered Plaintiffs, Rog Jim’s, Lanoue and The insurer’s to defend is not Inc., appeal from this judgment. Plaintiffs solely by of the com invoked the nature argue that facts not in the stated Anderson *4 Further, plaint. the insurer has the burden complaint but known to the insurers indi- showing duty of no defend exists. that to upon cated that the incident which the cause of action was based was within insur- In Chapman F. D. Co. v. Glens Const. coverage. plaintiffs As a result con- Co., 406, Falls 297 211 N.W.2d Ins. Minn. tend that the insurers were to (1973), 871 a several businessmen sued con- defend required and should be to indemnify company for obstruct- negligently struction plaintiffs legal for fees incurred in their ing during access to businesses con- defense as well as legal fees incurred in a struction of sewer. The construction the prosecuting present declaratory judg- company’s liability insurer refused to de- ment action. arguing damage fend that the did not arise injury out of the an “occurrence” and that may An insurer defending avoid a policy coverage claimed was not within be- complaint alleging a of cause action within “injury proper- cause it not real an to policy coverage if actual facts outside the ty.” This court framed the issue of an complaint would exclude the cause of action by stating to duty insurer’s defend coverage. from “[T]he Weis v. State Farm Mutual whether, question pleadings sole is the from Co., 141, Automobile Ins. 242 Minn. 64 facts, stipulated appears clearly that (1954). N.W.2d Similarly, 366 an insurer is the outside the businessmen’s claim fell to defend its insured a 408, policy.” complaint terms of the 297 Minn. 211 alleging a of cause action exclud ed N.W.2d 872. The court that the re- policy coverage from held if the insurer is quirement aware of of an occurrence had been met. complaint facts outside which bring injury property would As to the to real this court cause of action within cov erage. stated: “Although the issue not free from is In v. Casualty Co., Crum Anchor 264 doubt, think that businessmen’s we 378, (1963),
Minn. 119 Crum, N.W.2d 703 an complaints alleged species inferentially a apartment owner, was sued one of his real We tenants, injury property. to are con- part-time Crum’s, a employee of to a duty cerned here defend negligence in maintaining a common arguably claim covered Al- stairway. Later the tenant’s though may have allege amended defendant insurer had to a cause of action pay arising duty judgments under no to from Compensation the Workman’s Act. injuries Crum’s insurance noncovered which business- policy an had exclusion as trial, to employees injuries might upon whose men obtain it should arose out of the actions, course employment of their or who undertaken defense of had rights right satisfy any under the Compensation reserving Workman’s its to refuse Act. But the company judgments. would have had al- noncovered This ready deposed the tenant and had informa- more of both fairly served the interests tion which indicated that tenant than the re- insured and the insurer
53 408, fusal to defend.” 297 Minn. 211 Fireman’s Fund denied that cover N.W.2d 872. age duty or on defend existed based Policy its which exclusions in Homeowner’s Chapman court This did not indicate stated, did pertinent part, policy that the the pleadings clearly and facts must defend, apply: not obligation establish but rather clearly must establish that bodily injury property “d. or dam- falls
claim
outside the
terms or the
age
arising
pursuits
out
duty to
defend arises. This is buttressed
except
activities therein
cases which
state
the benefit of the
are ordinarily incident
to non-business
is to
given
doubt
be
to the insured when
pursuits;
determining
duty
the existence of a
to de
bodily injury
property
“e.
dam-
Crum
Casualty
fend.
v. Anchor
264
age arising
any premises,
out
other
378,
(1963);
Both insurance
“ordinarily incident
nonbusi
which are
to
ported
plaintiff.
to insure the
Both insur
hunting, weapon
companies rely upon
pursuits,” specifically
ance
ness
policy exclusions
deny
coverage
that
for
shooting.
the incident exist
Thus
collecting
target
and
defend,
determining
duty
ed.
even
coverage
court
found insurance
complaint,
actual
facts outside the
but
busi
though
arose out of the
the accident
insurers, may
ignored
known to the
not be
and occurred
pursuits
policeman
ness
of the
proof
and the burden of
is on
also,
See,
Ins.
Farmers
police
at a
station.
company. Thus,
facts,
considering all the
if
(Minn.
N.W.2d
Exchange
Sipple,
v.
255
373
companies
the insurance
cannot show that
1977).
respective
apply,
they
exclusions
then
whiskey,
was
At
least as
plaintiff.1
must defend the
keep-
Lanoue’s
property,
arguably personal
The trial court
that the
found
insur
could
ing
irresponsible minor
where an
it
companies
ance
entire story
told the
ordinarily incident
get
activity
at it was
upon
of the incident
which the claim was
possession of
pursuits,
to non-business
Further,
companies
based.
made their
consump-
beverages
personal
alcoholic
for
investigations
denying coverage
own
before
re-
not
with
argument
tion.
is
valid
This
Auto,
refusing
toAs
State
kept
it
spect
was
to the beer because
apparent
it is
from the facts known to the
purposes
large
quantities for
company
whiskey
the theft
of the
consumption.
personal
kept
not
covered by
whiskey
The
exclusion.
not fall
aspects
the claim do
all
Because
sold,
nor
either
given,
served
as
however,
Fund
coverage,
Fireman’s
outside
illegally.
business or
It
Be
was stolen.
if
action
compelled to defend the
would be
aspects
cause all
are
claim
not out
possible
this
exclusion.
were the
coverage,
side
Auto was
State
180,
Co., Minn.
Royal Ins.
185
v.
Christian
Co.,
Royal
defend. Christian v.
Ins.
185
(1932).
(1932).
365
would plaintiffs’ be pre- interests in general The rule is that attor vailing against as well as neys fees are allowed when authorized being against the interests of their insurers. by provided statute or in the contract. Also, buy insureds who insurance for the See, Rent-a-Scooter, Inc. v. Universal Un provided, defense just indemnity not for the 264, derwriters Ins. 285 Minn. 173 features, losing part would be of the cover- (1969). N.W.2d 9 But in Morrison v. Swen age they reasonably expected to have. The son, (1966), 274 Minn. plaintiff for, bought, paid herein com- recognized exception this court a limited prehensive coverage for his home general rule. an insurer Morrison business, subject to exclusions which do brought refused to into the defend and apply not in this case. Both State Auto and third-party by main case as a defendant Fund, therefore, Fireman’s sought declaratory judgment insured who to defend the plaintiffs in the Anderson coverage to determine The action as soon as the defense was tendered third-party separately. to them action was tried and are liable for the costs of defense prevailed granted thereafter The at by plain- incurred and was tiffs. torney fees for the main and for the third-
55
and Prac-
Insurance Law
Appleman,
7A
this court af-
party
appeal
action. On
tice, 4691,
firmed,
p.
action as
describing
third-party
§
for which the
a breach of contract action
expand
This court has resisted efforts
declaratory judgment costs were conse-
holding
allow collection
Morrison
quential damages. Morrison stands for
seeking
insured is
attorneys fees where the
that,
con-
proposition
where an insurance
insurance cover
under the
only payments
the insured of
tract is intended to relieve
attorneys fees
judgment for
age. Thus a
litigation,
the in-
the financial burden
Ins. Ex
Abbey v. Farmers
reversed in
litiga-
pay
will
sured
not be
709
160 N.W.2d
change, 281 Minn.
forcing
costs of
the insurer to assume
tion
disability pay
action for
(1968),because the
that burden.
of the insur
a failure
did not involve
ments
Similarly
Insurance
Appleman
Morrison cited
er to assume
presented
Rent-a-Scooter,
the situation as follows:
Under
Inc. v. Universal
264, 173 N.W.2d
Co., Minn.
Ins.
writers
un-
“Where an insurer failed to defend
(1969),
court disallowed
this
til after an adverse decision in declara-
had refused
it,
fees,
though the insurer
even
judgment
by
tory
action instituted
defend,
had allowed
the insured
because
pay
liable to
such insurer was held not
by
against him
entered
judgment
incurred
to be
attorneys’
expenses
fees and
seeking to recover
judg-
by
declaratory
default and thus
the insured in the
fraud,
or to force
action,
litigation
bad the costs of defense
ment
in the absence
faith,
litigiousness on the
to defend.2
or stubborn
the insurer
But, despite the
part of the insurer.
however,
case,
fits
present
The
by
placed upon this rule
qualifications
exception carved out
squarely within
court,
appears
it still
to be unfair to
re
seeking to
plaintiffs are
The
Morrison.
all,
had con-
insured. After
the insurer
to force
litigation costs and
cover defense
insured, and it
tracted to defend the
Defendant-insurers
defend.
the insurers to
guessed wrong as to
failed to do so. It
spite
declined to defend
wrongfully
compelled to bear
duty,
its
and should be
We will
duty to do so.
contractual
of their
the rule laid
consequences
thereof.
If
the costs
plaintiffs of
relieve the
be followed
down
these courts should
the ex
only at
main case
litigation in the
authorities,
actually
it would
by other
in this
costs
incurring litigation
pense of
permitting
the insurer
do
amount
appeal.
in this
incurred
including those
case
it could not do
indirection that which
for a determina-
remanded
Reversed and
is,
directly.
the insured has a con-
That
opinion.
damages in accord
tion of
against him
right
tract
have actions
insurer,
expense.
by the
at its
defended
(dissenting).
SHERAN,
Justice
Chief
him into a declar-
If the insurer can force
*7
majority
the
to
to subscribe
I am unable
and,
judgment proceeding
even
atory
my
in
Kelly, which
Mr. Justice
of
opinion
action, compel him
though it loses in such
previ-
our
major step beyond
a
view takes
litigation, the
expense
to bear the
of such
unacknowledged
holdings that
is
ous
actually
off financial-
insured is
no better
disregard
tois
The result
unwarranted.
contract
ly than if he
never had the
had
policies
insurance
language
the
of
courts
right mentioned above. Other
companies
on insurance
impose burdens
a burden
impose such
have refused to
bargained.
way
no
omitted.)
they have in
(Footnotes
which
upon the insured.”
“solely
attorneys
denying
fees
Casualty
Surety
it felt that
cause
Co. v. Polar
2. In Western
to be
court,
a default
Co.,
allowed
(1972),
because the
the
inter-
Panel
preting