AgCountry Farm Credit Services, ACA, Respondent,

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2016).

STATE OF MINNESOTA
IN COURT OF APPEALS
A17-1413

AgCountry Farm Credit Services, ACA,
Respondent,

vs.

Richard Steven Elbert,
Appellant.

Filed May 7, 2018
Affirmed
Reilly, Judge

Renville County District Court
File No. 65-CV-16-111

Michael S. Dove, Rick J. Halbur, Gislas on & Hunter LLP, New Ulm, Minnesota (for
respondent)

Markus C. Yira, Yira Law Office, LTD., Hutchinson, Minnesota (for appellant)

Considered and decided by Reilly, Pr esiding Judge; Connolly, Judge; and Smith,
John, Judge.
*

* Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to
Minn. Const. art. VI, § 10.

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U N P U B L I S H E D O P I N I O N
REILLY, Judge
Appellant-insured Richard Steven Elbert challenges the district court’s grant of
summary judgment in respondent-insurer AgCountry Farm Credit Services, ACA’s
(AgCountry) favor on appellant’s negligence counterclaim arising out of a breach-of-
contract action. Because ther e are no genuine issues of mate rial fact regarding Elbert’s
negligence counterclaim and the district court did not err by declining to impose a
heightened duty of care, we affirm.
FACTS
Appellant Richard Steven Elbert is a farmer in Olivia. Elbert purchased multi-peril
crop insurance and hail insurance from AgCountr y, successor-in-interest to United FCS,
for his 2015 farming operation. When Elbert failed to make his crop insurance premium
payment by the contractual deadline, AgCountry filed a civil action for payment of the crop
insurance premium. Elbert filed an answer conceding that the insurance premium was due
and owing, but counterclaimi ng that AgCountry’s damages were the result of its own
negligence. Specifically, Elbe rt asserted that AgCountry failed to include a 118.8-acre
tract of Elbert’s crop land in the insurance po licy. Elbert was unable to harvest the crop
grown on the 118.8-acre tract and claimed that, if the land had been properly covered under
his insurance policy, he would have received an insurance reimbursement.
The district court granted summary judg ment to AgCountry on its breach-of-
contract claim and on Elbert’s counterclaim. The district court found that Elbert submitted
a crop-insurance application to his insurer in May 2015, detailing the acreage to be covered,

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which did not include the 118.8-acre tract of land. In July 2015, the insurance company
sent Elbert an insurance letter listing the identical acreage requested in the application. The
insurance letter urged Elbert to carefully re view the information and notify the insurer
immediately of any errors. Elbert did not aler t his insurer as to an y unlisted acreage and,
as a result, Elbert’s 2015 crop-insurance policy did not include the 118.8-acre tract of land.
The district court determined that there were no genuine issues of material fact to support
Elbert’s negligence counterclaim and dismissed it with prejudice. Elbert now appeals the
district court’s grant of summary judgment on his negligence counterclaim.
D E C I S I O N
I. The district court did not err in granting summary judgment on
appellant’s negligence counterclaim.
Summary judgment is properly rendered when “the pleadings, depositions, answers
to interrogatories, and admissions on file, togeth er with the affidavits, if any, show that
there is no genuine issue as to any material fact and that either party is entitled to a judgment
as a matter of law.” Minn. R. Civ. P. 56.03. We review a district court’s summary
judgment decision de novo to “determine wh ether the district court properly applied the
law and whether there are genuine issues of material fact that preclude summary
judgment.” Riverview Muir Doran, LLC v. JADT Dev. Grp., LLC, 790 N.W.2d 167, 170
(Minn. 2010). The evidence is viewed in the light most favorable to the party against whom
judgment was granted. Kratzer v. Welsh Cos., LLC , 771 N.W.2d 14, 18 (Minn. 2009).
Judgment will be affirmed “if no genuine issues of material fact exist and if the court below
properly applied the law.” Id. Even if we “disag ree with the district court’s analysis of

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some issues, summary judgment w ill be affirmed if it can be sustained on any grounds.”
Allianz Ins. Co. v. PM Servs. of Eden Prairie, Inc ., 691 N.W.2d 79, 82-83 (Minn. App.
2005).
While Elbert did not name his individual insurance agent as a party, he argues that
AgCountry is vicariously liable for the actions of his insurance agent under a principle-
agent relationship. See Semrad v. Edina Realty, Inc., 493 N.W.2d 528, 535 (Minn. 1992)
(explaining that doctrine of vicarious liability makes a principal liable for acts its agent
commits in the course and scope of the agency that are not for a purpose personal to the
agent). To establish a neg ligence claim against an insure r, a party must show (1) the
existence of a duty; (2) a breach of the duty; (3) causation; and (4) damages. See Johnson
v. Urie, 405 N.W.2d 887, 891 (Minn. 1987). An insurer has a duty to exercise the skill and
care that a “reasonably prudent person engaged in the insurance business [would] use under
similar circumstances.” Gabrielson v. Warnemunde, 443 N.W.2d 540, 543 (Minn. 1989)
(alteration in original) (quotation omitted). Absent an agreement to the contrary, the scope
of this duty is limited to acting in good fa ith and following the insured’s instructions. Id.
Thus, an insurer “is under no affirmative duty to take other actions on behalf of the client
if the typical principal-agency relationship exists.” Id. The existence of the legal duty
owed by an insurance company to its insured is a question of law for judicial determination.
Johnson, 405 N.W.2d at 891 n.5. But “[t]he ex istence of that duty may turn upon the
particular facts, which, if contradicted, may be submitted to the jury for resolution.” Id.

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The undisputed facts show that in Ma y 2015, Elbert submitted a crop-insurance
application to AgCountry identifying the acreage he sought to have insured. Two months
later, AgCountry sent Elbert a letter detaili ng his insurance covera ge based on Elbert’s
crop-insurance application. The letter instru cted Elbert to review the information and
notify the company of any errors. Elbert did not alert AgCountry that the 118.8-acre tract
of land was missing from the policy, and the final 2015 crop insurance policy did not
include that parcel of land. The district court determined that there were no genuine issues
of material fact pertaining to Elbert’s negligence counterclaim because AgCountry
satisfied its general duty of care to Elbert. We agree. Elbert di d not produce competent
evidence of negligence, and the undisputed fa cts reveal that AgCountry satisfied its duty
of care by acting in good faith and by following Elbert’s express instructions regarding his
insurance coverage. See Gabrielson, 443 N.W.2d at 543.
Elbert argues that his affidavit stating that the acreage certification he submitted to
the U.S. Department of Agriculture, Farm Se rvice Agency (the FSA) included the 118.8-
acre tract at issue, thus creating a genuine fact issue. 1 In July 2015, Elbert provided
AgCountry with a certification of acreage contained in his FSA-578s, which included
reference to the 118.8-acre tract. Elbert argues that copies of the FSA forms are “typically
as a matter of course and custom and practice maintained in the insu red’s file.” Elbert
argues that a factual question exists regarding the extent to which AgCountry reviewed the
information contained in his FSA forms and therefore summary judgment is inappropriate.

1 According to appellant’s brief, an FSA-578 contains a report of commodities farm and
tract detail listings and acreage reports.

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Elbert’s bare allegations are insufficient to defeat summary judgment. The record
does not contain the FSA-578 forms or any evidence supporting Elbert’s “custom and
practice” argument. The party opposing summa ry judgment “may not establish genuine
issues of material fact by relying upon unverified and conclusory allegations.” Dyrdal v.
Golden Nuggets, Inc. , 689 N.W.2d 779, 783 (Minn. 20 04). The bare conclusions in
Elbert’s affidavit cannot sustain his negligence counterclaim and do not create a fact issue
for trial.2
Lastly, Elbert argues that the district court’s summary-judgment order was improper
because he asserted a colorable claim of negligent procurement of insurance. A negligent-
procurement claim requires the claimant to prov e: “(1) that the agen t owed a duty to the
insured to exercise reasonable skill, care, and diligence in procuring insurance; (2) a breach
of that duty; and (3) a loss sustained by th e insured that was caused by the agent’s breach
of duty.” Graff v. Robert M. Swendra Agency, Inc ., 800 N.W.2d 112, 116 (Minn. 2011).
Graff is inapposite. In that case , an insurer advised the claima nt to purchase a particular
insurance policy. Id. at 114. The claimant purchas ed the policy recommended by the
agent, but later discovered that the policy did not provide the correct coverage because the
agent had not arranged for the necessary endorsement. Id. The supreme court held that
“an insurance agent may be held independ ently liable for neglig ent procurement of
insurance coverage.” Id. at 117. This case is factually distinct. Elbert provided AgCountry

2 Elbert also argues that AgCountry failed to process an extension of Elbert’s insurance
period and failed to inform Elbert that his insurance period was ending. Elbert has not
cited to any persuasive authority suggesting that AgCountry had a duty to proactively offer
an extension of the insurance period.

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with a crop insurance application, which wa s used to place the insurance policy.
AgCountry sent Elbert an insurance lette r and asked him to carefully review the
information to ensure its a ccuracy. Elbert has not articulated a claim for negligent
procurement of insurance.
II. The district court did not err by dec lining to impose a heightened duty
of care based on special circumstances.
Generally, insurance consumers are responsible for educating themselves in matters
concerning their insurance coverage. See Louwagie v. State Farm Fire & Cas. Co ., 397
N.W.2d 567, 569 (Minn. App. 1986), review denied (Minn. Feb. 13, 1987). However,
under special circumstances an insurer may have a “duty to ta ke some sort of affirmative
action, rather than just follow th e instructions of the client.” Gabrielson, 443 N.W.2d at
543-44. The facts of each case dictate whether special circumstances create this extra duty.
Id. at 543 n.1; see also Johnson, 405 N.W.2d at 889 (holding a duty to “offer, advise or
furnish insurance coverage” may arise from the “circumstances of the transaction and the
relationship of the agent vis-a-vis the insured”). Factors to consider in determining whether
special circumstances exist include whether: (1) the in surer knew the insured was
unsophisticated in insurance matters; (2) the insurer knew the in sured relied upon the
insurer to provide appropriate coverage; a nd (3) the insurer knew the insured needed
protection from a specific threat. Gabrielson, 443 N.W.2d at 544. The existence of a
heightened duty is a question of law. Id. at 543 n.1.
Elbert claims that AgCountry owed hi m a heightened duty of care because of
“special circumstances” present in the re lationship. Elbert argues that special

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circumstances existed due to the length of th e parties’ relationship and Elbert’s “actual
reliance” on AgCountry to provide comprehensive insurance coverage. The district court
rejected this argument, determining that Elbert failed to submit evidence demonstrating the
existence of a heightened duty under Gabrielson.
We agree with the district court. Elbe rt argued that he relied on AgCountry to
provide appropriate crop insurance coverage. To create a special circumstance under this
Gabrielson factor, the record would have to refl ect that Elbert “delegate[d] decision-
making authority” to AgCountry for his insurance needs. Beauty Craft Supply & Equip.
Co. v. State Farm Fire & Cas. Ins. Co., 479 N.W.2d 99, 101-02 (Minn. App. 1992), review
denied (Minn. Mar. 19, 1992). But we have determined that “great reliance” is not present
where an insured did not place all of his insu rance needs into the ha nds of one insurance
provider but rather, used other insurance providers as well. Gabrielson, 443 N.W.2d at
545; see also Carlson v. Mut. Serv. Ins ., 494 N.W.2d 885, 886-88 (Minn. 1993)
(determining special circumstances exist wher e familial relationship existed and insured
relied on agency for all insurance needs). Here, the record shows that AgCountry does not
offer common insurance policies such as auto insurance, health insurance, or homeowner’s
insurance. Thus, Elbert could not have placed all of his insurance needs into AgCountry’s
hands. Moreover, Elbert has not presented su fficient evidence demonstrating that he was
“unsophisticated in insurance matters” or n eeded protection from a “specific threat.”

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Gabrielson, 443 N.W.2d at 544. Based on our review of the record, we conclude that the
district court did not err by declining to recognize a special circumstance, and we affirm.3
Affirmed.

3 The insurer argues for the first time on a ppeal that the court lacks subject-matter
jurisdiction over Elbert’s negligence counterclaim because the claim is preempted by the
Federal Crop Insurance Act, 7 U.S.C. § 1506 (l) (2016); 7 C.F.R. § 400.352 (2017), and
because the dispute should have been resolved through arbitration pursuant to the terms of
the crop insurance policy. Because the insurer raised these arguments for the first time on
appeal, we deem them forfeited. See Vaughn v. Nw. Airlines, Inc ., 558 N.W.2d 736, 745
n.9 (Minn. 1997) (refusing to address untimely preemption argument).