*1 PAGE, (concurring specially). Justice concur in the result reached the court.
David E. MALMIN and Jeanette
Malmin, Respondents, FIRE MINNESOTA MUTUAL & COMPANY, CASUALTY Appellant. No. C1-95-1274. Court Minnesota.
Sept. Goldman, Magnuson,
Eric Glen M. Min- J. Apellant. neapolis, for Hunt, Lummer, Nelson, Kay Cole & Nord P.A., Respon- Stageberg, Minneapolis, for dents.
OPINION
KEITH, Chief Justice. Fire and
Appellant Minnesota Mutual
Mutual)
(Minnesota
Casualty Company
*2
trial,
Mal-
appeals
prior
of
decision weeks
on June
review of a court
obtained
respondents David
a letter to a Minne-
in favor of
and Jeanette min’s trial counsel faxed
Answering a certified
to confirm
representative
Malmin.
sota Mutual claim
Hennepin County District Court
telephone
regard-
from
their recent
conversation
affirmative,
court of
held
ing
Malmin
no-fault benefits received
approxi-
were
to recover
Malmins
entitled
for his medical ex-
from Minnesota Mutual
$109,000
mately
motorist
in underinsured
requested a
penses.
attorney
sum-
Malmin’s
appeal
from
Mutual.
benefits
Minnesota
On
paid to Malmin and
mary of no-fault benefits
court,
Mutual
to this
Minnesota
copies
bills submitted to
medical
damages
it should not be bound
addition,
Minnesota Mutual Malmin.
Malmin,
insured,
by its
David
in a
attorney advised Minnesota Mutual
Malmin’s
injury
arising
personal
out of an auto-
going
trying
to be
“that in two weeks we are
accident
exceeded the tortfea-
mobile
our client
personal
claim of
David
liability coverage
did
because Malmin
sor’s
*3
per-
that it was
of Malmin’s
admitted
aware
potential
notice of a
UIM benefits
received
Olson,
against
claim
it contended
sonal
given
opportunity
no
to
claim and is
safe-
potential
it had no notice of Malmin’s
ar-
guard its interests. Minnesota Mutual
claim, nor had Malmin invited Minneso-
UIM
gues that a “consent to sue” clause is a valid
participation
ta
the lawsuit.
Mutual’s
protecting
the insurer’s financial
means
argued
require-
its
process rights, does not
interests and due
prior
ment of
written consent
to sue was
right
unduly
pursue
burden an insured’s
to
to
its interests
valid and
against
claim
prior
Absent
and
to intervene.
purposes
and therefore is not
consent,
Mutual as-
and written
of the No-Fault Automobile Insurance
not be bound Mal-
serted that
it should
§§
Minn.Stat.
65B.41-.71
personal injury
damages award and his
min’s
claim should be retried.
Minnesota Mutual contends that
the con
sent to sue clause in its contract has been
the district court
On December
carriers
since
used
numerous insurance
summary judg-
denied Malmin’s motion for
undoubtably
many
1956 “and
is contained
ment, finding that Malmin had failed to com-
policies.”
millions of insurance
prior
provi-
notice and consent
ply with the
prior to this
no Minnesota court has
policy. The court
of his insurance
sions
language adheres to
considered whether such
oppor-
notice or
ruled that due to the lack of
purposes
the No-Fault Act.
and
intervene,
Mutual was
tunity to
note, however,
other occa
several
verdict in Malmin’s lawsuit. We
not bound
provisions commonly
Accordingly,
would have to
sions we have voided
Malmin
give
personal injury
policies
action and
used in automobile insurance
due
participate. Mal-
an
perceived
Act’s
conflicts with
No-Fault
Clothier,
successfully
certify
min
moved the court
See Schmidt
provisions.
the court of
the consent
to sue issue to
(Minn.1983) (insurance
poli
N.W.2d
Civ.App. P.
appeals pursuant
to Minn. R.
requiring insured to exhaust
cy provisions
103.03(h).2
appeals held that
The court of
liability limits
underin-
tortfeasor’s
before
in the
clause contained
the consent
will be
are void
sured motorist benefits
“void and unenforceable
insurance
was
Act);
public policy of No-Fault
No-Fault Act and case
under the Minnesota
Reins.
Roering v.
Mut.
Grinnell
Act,”
interpreting
and concluded
law
(insurance
(Minn. 1989)
poli
N.W.2d
recover
Malmin
entitled to
cy
provision
exclusion
conflicts with
re-
Mutual without
benefits from Minnesota
Act
is therefore
guaranteed
No-Fault
and
injury claim. Malmin
litigating
v. Milbank Mut. Ins.
void);
Wasche
Casualty
Mut. Fire &
v. Minnesota
(clause
(Minn.1978)
N.W.2d
5,4,
(Minn.App.1995).
N.W.2d
“stacking”
prohibited
policy that
Act).
coverages is void under No-Fault
II.
the effect of Minneso-
Mutual asserts that
Appellant Minnesota
contrary to the
Mutual’s consent clause is
it held that
ta
appeals
erred when
the court
damage
igation
and
issues in
of all
court to
certified
district
2. The
the underinsured motorist
reads as follows:
the court
second
carrier,
jury
when the
injured person who has received a
Is
"any judgment
damage
issues
that states:
on all
and
contains a
brought
arising
in an amount in excess of
[sic]
a tort feasor
out
a 'suit'
[of]
underlying
entitled to
binding upon
tort feasor's
our written consent is
without
from his under-
of the excess amount
us.”
carrier, without a full relit-
that it should not be
purposes of
Automobile Insur- Mutual insists
the No-Fault
§
Act
65B.42
claim
ance
as stated Minn.Stat.
Malmin’s UIM
because
(1994): to
distress of
law
participate
relieve
economic
allowed
in Malmin’s
by providing
suit,
injuries
victims
automobile accidents
expected
it never
that Malmin’s
award,
prompt payment of economic loss benefits
large damages
would result in such
fault;
regard
speed
the admin-
without
Malmin intend
and it was never notified that
justice
the burden of
istration
ease
ed to
UIM benefits.
litigants;
litigation
courts and
on the
analysis,
we note that
At
outset of our
oper-
to correct imbalances
abuses
mistakenly
upon this
relied
Malmin has
liability system.
Id. These
ation
the tort
Employers
Cos. v.
court’s decision in
Mut.
asserts,
by a
goals, he
are not served
support
reasoning.
of his
Nordstrom in
*4
the burdens on
to
clause which increases
Nordstrom,
(Minn.1993). In
this
855
N.W.2d
by requiring additional
accident victims
time
injured
must
court held that an
costs,
duplicative litigation
in court and
against the tortfeasor
pursue his or her claim
power
the
to consent
grants
insurer the
to
seeking UIM
to trial or settlement before
only financially favorable
verdicts.
at
from or her insurer.
Id.
benefits
may refuse
further notes that an insurer
to
case,
rejected
com-
In that
Nordstrom’s
reasons,
any
including
for
number of
consent
require
rule
her to
plaint
such a
would
with the insured’s choice of
dissatisfaction
litigate
one in
court
two claims:
district
forum,
require
attorney or
which
then
would
tortfeasor,
through
the
arbi-
one
litigation of
decision
whether
insurer’s
tration with
insurer.
Id. at 858-59. We
her
not to
consent
“reasonable.”
explained
under Nordstrom’s insurance
argues
Minnesota Mutual
policy, she would recover
in its
“legally
to
she was
entitled”
receive:
protect its financial interests.
to
conclusively
The tort
establishes
First,
in
asserts
is “le-
to which
claimant
pay
judg
have
surer would otherwise
to
entitled”;
gally
if such
exceed the
insured,
by
including
ment obtained
its
de
limits,
payable
tort insurance
the excess is
though
judgments,
or
fault
even
of its
the underinsurer
to the extent
pending
unaware of the
lawsuit.
the need for arbitration.
without
Second,
tortfeasor’s insurance carrier
pays,
The
it is
underinsurer
not because
may
defending
have far
in
less interest
estopped
judgment,
by the
but because
injured party’s
against the
suit than
UIM
judg-
contractually agreed
pay the
has
to
example, 'if
carrier.
the tortfeasor has
For
ment less the tort
insurance recov-
defending
low
ery.
vigorously
less incentive to
de
added).
(emphasis
Id.
fend the
while the UIM carrier’s finan
This
decision Nordstrom did not
court’s
Thus,
exposure
cial
is increased.
concern the
of a consent to sue clause
effect
that the UIM carrier
Mutual contends
should
her insur-
Nordstrom’s UIM
right
protect
have
to intervene and
its
merely
Third,
quoted
er.
dicta
above
discusses
Mutu
financial interests.3
the mechanism for
of UIM benefits:
process
that it has a due
to
al
judgment against
after
insured receives
under the
States
the lawsuit
United
her
his or
insurer is bound
Supreme
holding in Fuentes v.
Court’s
She
1983, 1994,
vin,
67, 80,
required by the insur-
UIM benefits as
S.Ct.
U.S.
(1972).
short,
policy.
does not dis-
ance
L.Ed.2d 556
"any
adequately represented by existing parties."
procedure,
est is
3. Pursuant to our rules
civil
Minneapolis Star &
permitted to
in an
Minn. R. Civ. P. 24.01. See
one shall be
intervene
action
Schumacher,
relating
applicant
Tribune Co. v.
(Minn. 1986)
when the
claims an interest
N.W.2d
subject
(setting
four-part
be
property
forth
test to
transaction which is the
nonparties).
applied
petitions
applicant is
to intervene
so situated
action
Willmsen,
practical
434 N.W.2d
disposition
action
mat
See also
Husfeldt
ability
(applying four-part
(Minn.App.1989)
test to
impair
impede
applicant’s
ter
carrier).
interest,
petition
applicant’s
auto insurance
unless the
inter
intervene
pute
required procedure,
but
that this is the
Gen. Accident Ins.
Court of
Jersey
correctly asserts that the case at bar raises a New
held that an insurer was es-
topped
forcing relitigation
from
enforceability
of the dam-
relating
different issue
ages
despite
its insured
of a consent to sue clause within the insur
language
of an arbitration clause in
Thus,
its
ance contract itself.
Nordstrom is not
327, 342,
144 N.J.
676 A.2d
directly applicable to
case. See also
this
Interpreting language
Richards v. Milwaukee Ins.
518 N.W.2d
identical to the consent to sue clause at issue
(Minn.1994)
(citing
sup
Nordstrom
policy,
in Minnesota Mutual’s
the court
port
holding
damages”
of its
that “actual
opined:
do not include amounts
suffered
view,
policy provision
In our
an insurance
paid by
coverage);
no-fault
Reinhardt v.
litigate
that would
an insured to
Milwaukee
524 N.W.2d
Mut. Ins.
conclusion the issues of
and dam-
denied,
(Minn.App.1994),pet.
rev.
ages
personal-injury
in a
1995) (under
(Minn.,
February
Nord
tortfeasor, on notice to the
carri-
UM/UIM
strom,
opportu
UIM carrier with notice and
er, only
those
nity
to intervene
insured’s tort action is
proceeding
same issues
an arbitration
damages by
determination of actual
carrier,
with the
cannot
rec-
UM/UIM
action).
court in tort
*5
policy
onciled with the
considerations that
split
parties
Both
note that
there is a
prompted
Legislature
to mandate the
among other state courts on the enforceabili
availability
coverage
for
UM/UIM
ty
a
states
consent to sue clause. Some
Legislature’s pur-
insureds.
Just as
have ruled that such clauses are void as
pose
by
can be thwarted
unreasonable re-
against public policy,
others have
while
coverage,
strictions
or exclusions from
viewed the consent clause as a valid means of
legislative goal
by
so too is the
obstructed
protecting the insurer
from fraudulent or
delay unreasonably
conditions that
agreements
collusive
between its insured and
payment of the benefits that
cov-
UM/UIM
the tortfeasor. See
v. First Ins.
Moorcroft
erage
provide.
was intended to
Hawaii,
501,
178,
Co.
68 Haw.
720 P.2d
(citation omitted).
Id.
out its consent intervene); Mut. Nationwide I an insur- will not countenance dissent. Webb, Co. v. 436 A.2d Ins. Md. breach of its contract insurance. Nei- er’s (1981) (collecting 22 state court decisions ther, any justification I find can invalidated “consent to sue” which have relieving obligation of all to com- clauses). ply with the terms of reasoning We concur with the carefully Here the insured orchestrated his jurisdictions courts other that have re Following claim. fused enforce consent clauses *6 20, 1990, accident of October Malmin made a automobile insurance contracts: noted loss claim for basic economic benefits. There above, forcing the insured to his or was, nothing about Malmin’s medi- simply against her claim a because tortfeasor wages expenses suggested cal or lost that neglected the insured to obtain written con he Minnesota Mutual that had sustained a public poli from the insurer violates the sent injury. years Almost 4 serious went with- un cy behind our No-Fault Act and erects slightest out the indication that Malmin con- to the insured’s barriers templated an underinsured motorist claim. Although Minnesota of UIM benefits. Mutu 15, 1994, It merit, not until when Mal- June arguments have a al’s some lawyer min’s wrote Minnesota Mutual re- provision protect not a means of valid questing summary a of the no-fault benefits agree ing the insurer’s interests. While we Malmin, of, had that the insurer was that the should receive notice and in, opportunity the informed that had someone for participate an insured’s sued injuries agree that personal we do not caused sustained the Shevin, agree persuasively argues v. we with 4. Minnesota Mutual that merits in Fuentes granted opportunity be insurers deserve more insurer should some Mutual Therefore, protection. protect its a financial interests before the resolu- note while against “consent to clause is invalid under the No- tion of insured's claim tortfeasor. sue” noted, Supreme provision Court a within an insurance con- As the United States Fault notify procedural process principles requires tract which the insured to his or due party opportunity to before her insurer of commencement of a and an be heard lawsuit possessions. against period deprived rights of within a limited can be tortfeasor of Shevin, 67, 80, (i.e., days) process 92 S.Ct. time after service of com- Fuentes U.S. ports process principles due In with and does not L.Ed.2d this responsible pay- is now raise the same concerns under the No-Fault Act. Minnesota Mutual permit of a would the insurer to ment tort its insured Such despite and received neither consider nature of tort claim the fact thereby litigation, opportunity participate in the tortfeasor's deter- attempt simple intent to seek UIM mine whether to intervene nor notice Malmin’s litigation light in order to its own financial benefits. Court's inter- In require- pretation procedural process interests. due rights against preserve the insurer’s order to Included 1990 accident. October in two the tortfeasor. “that the casual statement letter was trying” Malmin’s going to be are
weeks we majority the “consent to sue” strikes context of the injury claim. In the (I insuring agreement as- from the clause letter, only intended appeared the statement majority of the intends the rest sume request for response to the prompt to elicit a intact) insuring agreement to remain on the did summary The remark of benefits. public policy.1 The ground that it offends Neither did Mal- identify the defendant. not promptly that the insured send requirement Mutual of ei- lawyer advise Minnesota min’s if a “copies the insurer limits of the defendant’s ther the in- brought,” is one of the ‘suit’ is damages. of his client’s policy or his estimate specified in the event of acci- sured’s duties now assert Surely, counsel cannot Malmin’s dent, claim, loss, in full force suit or remains trial, unaware, 2 weeks before that he was can no serious effect. There is and he the fact that limits of Olson’s requirement is violative contention that this hoped the evi- anticipated Nevertheless, at least first public —that —or support in excess an award majority ignore dence would and now the court $50,000 denying In Malmin’s limits! obligation only Olson’s the insured’s contractual summary judgment, motion for court’s determination also the district but notify Malmin did not had breached that obli- court stated the insured Olson, majority Mutual of his action follows on gation. Next depriving appeals’ erroneous con- thereby heels of the court of answering question From the circum- the certified to intervene. clusion intended tage. But Accident, pick and meaningful notification litigation until lawsuit. addition stances I can entitled Olson. The Minnesota (b) It. promptly notified of accept a low verdict Promptly send [*] affords the motorist to withhold choose which verdicts Claim, detailing “Duties can infer denying the insurer prompt notice of the does [*] if provide the result is known a “suit” Suit or “consent to sue” permitting not mean [*] insurer an only that the letter was an uninsured or under- us the insured’s something less than of the action Loss”: brought. copies of the [*] in the Event of an insurer that reject *7 unfair advan- it will [*] contains, in it is not so that it clause, a insured’s accept [*] high required to honor theirs. in the affirmative ity’s tual tunity to intervene for as in the affirmative reverse Therefore, answering Of does golden awarded The insured ought to be sauce court for against Olson and Whether course, or her contract decision short, egg, then by the award in the role deprived dispose further in Malmin’s action majority this conclusion is the certified if the courts ruling is both ought to be proceedings. what of notice is bound this action and the or the concedes, just for the insured improper and erroneous. remand to justifies holding that in Malmin’s lawsuit. is sauce question is in Malmin’s insist on as insurers goose negative, I would and of certified a non against Olson. for the casting the any oppor- answered sequitur, must be lays the gander. major- honor goose Mu- against underinsured respect to claims With (dissenting). ANDERSON, Justice incorporates motorists the Coyne. join in the dissent of Justice tentative settlement concerning a provisions v. Clothi- but Schmidt this court laid which (Minn.1983), and it also er, N.W.2d 256 the insurer 30 to allow
requires the insured offer the settlement days in to meet years. has, unchallenged for 40 in Minnesota been validity of this clause 1. The notes Malmin.” As Minnesota Mutual in its notify pending brief, explicitly did not letter action, nor did he obtain Minnesota Mu- tort any potential notify Minnesota Mutual of un- pursuing tual’s consent before motorist nor was there derinsured injury claim. We hold that to the limits on Olson’s reference relied upon sue clause Mutual policy. insurance to defend Malmin’s underinsured motorist July jury On returned public coverage policy claim is violative him in favor of Malmin and awarded Automobile In- behind Minnesota’s No-Fault $158,973.96 damages. Following ver- Therefore, Act. answer certi- surance dict, $50,000, Malmin Olson’s question from court in the fied liability limit on Olson’sinsurance On affirmative. 21,1994, July attorney Malmin’s sent letter Mutual, notifying the insurer of I. (UIM) motorist claim Malmin’s underinsured 20, 1990, respondent October David On demanding payment damages in an acci- Malmin was involved automobile $50,- Malmin in of Olson’s awarded to excess by Nancy with an automobile driven J. dent coverage. Minnesota Mutual re- personal inju- Malmin Nau Olson. sustained $109,000 payment approximately fused neck ries and was treated for and back Malmin, contending sought by that Malmin’s by American problems. Olson was insured policy required insurance notice Minnesota Company and auto Family Insurance had an potential claim and written Mutual of a $50,000. At the liability limit of insurance consent from insurer to sue.1 accident, in- Malmin had an auto time of appellant with Minnesota Mu- surance brought Malmin then this action Henne- tual with underinsured Court, pin County seeking payment District $300,000. limit of from Minnesota Mutual. UIM benefits summary judgment, argu- Malmin moved for brought ing the written damages seeking for the Octo- Olson Mutual with Minnesota was void accident. Olson’s insurer ber auto to the Hennepin held in unenforceable and and trial was defended July County District Two behind Minnesota’s no-fault statute. Malmin Court 1994. damages policy with Mu- for these must result from the 1. Maimin’s language: following ownership, contains the or use of "unin- tual maintenance vehicle" “underinsured motor sured motor A. COVERAGE vehicle.” pay 1. We will all sums “insured” arising Anyjudgment damages out of legally compensatory entitled to recover brought written without our consent is a “suit” from or driver an "unin- the owner us. motor or ‘‘underinsured motor sured vehicle" requires policy further insured result vehicle.” The must from “bod- copies “[plromptly ily injury” [the insurer] send the "insured” caused sustained brought.” owner’s driver’s if a ‘suit’ an "accident." The an automobile insurance carrier must argued that Minnesota Mutual was also (UIM) involving due to of his lawsuit Olson benefits to its aware attorney, 1994 letter from his equal the June amount object any right had therefore waived tortfeasor’s'liability awarded in excess of the claim. While to his UIM coverage, even when the insurer has not