Premium Plant Services, Inc., Appellant,

This opinion will be unpublished and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
A17-2051

Premium Plant Services, Inc.,
Appellant,

vs.

Farm Bureau Property & Casualty Insurance Company
d/b/a Farm Bureau Financial Services,
Respondent,

Todd Sampson,
Respondent.

Filed August 27, 2018
Affirmed in part, reversed in part, and remanded
Cleary, Chief Judge

St. Louis County District Court
File No. 69HI-CV-16-874

Joseph J. Roby, Jr., Kevin C. Pillsbury, Johnson, Killen & Seiler, P.A., Duluth, Minnesota
(for appellant)

Scott B. Lundquist, Lundquist Law Office, Lakeville, Minnesota (for respondent Farm
Bureau)

Mark S. Brown, Stephen M. Warner, Arthur, Chapman, Kettering, Smetak & Pikala, P.A.,
Minneapolis, Minnesota (for respondent Sampson)

Considered and decided by Bratvold, Presiding Judge; Cleary, Chief Judge; and
Smith, Tracy M., Judge.

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U N P U B L I S H E D O P I N I O N
CLEARY, Chief Judge
Appellant Premium Plant Services, Inc. (PPS ) challenges the district court’s grant
of summary judgment in favor of respondent Farm Bureau Property & Casualty Insurance
Company (Farm Bureau) and respondent Todd Sampson (Sampson), dismissing PPS’s
claims for reformation of contract, breach of contract, and negligent procurement of
insurance. PPS argues that th e district court misapplied th e law and improperly resolved
disputed facts in favor of Farm Bureau and Sampson. We affirm the district court’s grant
of summary judgment on the reformation-of-c ontract and breach-of-contract claims, but
reverse and remand for trial on the merits on the negligent-proc urement-of-insurance
claim.
FACTS
PPS is an industrial cleaning service base d in St. Louis County, Minnesota. PPS
obtained a $1 million Farm Bureau business liability po licy through Sampson, a licensed
insurance agent, in 2009. The 2009 policy included motor vehicle coverage for PPS’s fleet
of vehicles. In 2010 or early 2011, PPS’s owner and president, Mark Parenteau, met with
Sampson to discuss increased insurance coverage. At his deposition, Parenteau explained
that PPS was growing and some customers wa nted PPS to have increased insurance
coverage due to the potential damage that cleaning activities might cause or the potential
for injury related to some of the cleaning meth ods. He also stated that he was concerned
about PPS’s exposure w ith respect to automobile coverage and asked about what sort of
coverage he would need for “a bad situation” that would involve the fatality of two or three

3
employees in an accident traveling to or from a job site. Parenteau acknowledged that the
scenario he described could be a workers’ compensa tion situation, but reiterated that his
concern was about “three people dying and having the company exposed.” He instructed
Sampson to get a quote or complete “whatever the necessary process you go through . . . to
put in place a ten million umbrella.” Parenteau stated that Sampson represented to him that
the umbrella policy would mean that PPS would be “bubble-wrapped” with respect to the
concerns they discussed. Sampson stated th at he recalled talkin g with Parenteau about
potential increases in liability coverage and obtaining an umbrella policy around that time,
but denied making any reference to PPS being “bubble-wrapped.”
In 2011, after further discussions with Parenteau, Sampson emailed Farm Bureau,
relaying that Parenteau wanted to explore expanding coverage “for as high as 6,000,000 in
total liability on autos and the GL. He then asked what a 10 million umbrella would cost.”
Sampson and Farm Bureau ex changed emails about the $1 0 million umbrella policy and
Farm Bureau made it clear that no policy w ould be issued unless or until PPS obtained
automobile liability coverage from a separate provider. Farm Bureau agreed to provide a
quote for the $10 million umbrella policy once Sampson provided a certificate of other
automobile insurance and after it issued the nonrenewal of the automobile liability policy.
Farm Bureau explicitly stated to Sampson that the umbrella policy would “be without the
Auto as underlying.”
In 2011, Farm Bureau info rmed PPS directly that it would no longer provide
automobile coverage under the general liabili ty policy due to the amount of claims made
by PPS. Farm Bureau sent notice of the termin ation of coverage to PPS, stating that the

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general liability policy could only be renewed if the automobile coverage was excluded per
its underwriting guidelines. Sampson testifie d that he informed Susan Laitinen—PPS’s
office manager in charge of insurance matt ers—of the change, presented her with the
option to obtain automobile coverage through Progressive Corporation (Progressive), and
obtained a $500,000 automobile coverage policy from Progressive.
After obtaining automobile coverage from Progressive, Sampson renewed
discussions with Farm Bureau about the $10 million umbrella policy. In January 2011,
Farm Bureau again advised Sampson that, because PPS’s automobile coverage was
canceled and because there were multiple PPS employees who were too risky to insure, “if
an Umbrella portion is forthcom ing, our umbrella portion of th is risk cannot include the
auto section.” In his depos ition, Sampson stated that he informed Laitinen that Farm
Bureau was “not going to extend coverage from the umbrella to th e automobile liability
policy” and Laitinen relayed that information to Parenteau. Laitinen and Parenteau dispute
that Sampson ever relayed that information to anyone at PPS.
Farm Bureau issued a $10 million comme rcial umbrella liability policy (the
umbrella policy) to PPS in April of 2011 . The umbrella policy contained numerous
exclusions, including three exclusions rela ted to automobiles: an “Auto Liability
Exclusion”; an “Owned Auto Exclusion”; an d an “Auto Leasing Ex clusion.” The “Auto
Liability Exclusion” (automobile exclusion) provided that the umbrella policy “does not
apply to ‘bodily injury’ or ‘property damage’ arising out of the ownership, maintenance,
operation, use, loading or unl oading of any ‘auto’ while away from the premises owned
by, rented or leased to, or controlled by [PPS].”

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In December of 2011, Melissa Schinderle , another PPS office manager, signed a
policy renewal form that includ ed an acknowledgment of the automobile exclusion. The
umbrella policy was renewed for the 2012-13 and 2013-14 policy periods, and along with
the renewals came additional copies of the automobile exclusion and references to it
throughout. During this time , Sampson’s agency issued multip le certificates of liability
insurance to PPS, many of which mistakenly indicated that PPS had $1 million in
automobile coverage and indicated that th ere was a $10 million umbrella policy. The
certificates did not indicate that the umbre lla policy excluded automobile coverage.
Sampson did not provide an explanation for why the certificates listed an incorrect amount
of automobile insurance.
In her deposition, Laitinen denied any know ledge of the automobile exclusion and
claimed she never read the full umbrella policy. She stated that she only read the first page
of the policy. Schinderle stated that sh e never read the umbre lla policy and had no
knowledge of the automobile exclusion. Parent eau stated that he never reviewed the full
umbrella policy and if any pe rson at PPS would have reviewed the full policy, it would
have been Laitinen.
In 2013, a PPS vehicle driven by a PPS em ployee collided with another vehicle.
The driver of the othe r vehicle was killed in the accident. The relatives of the decedent
filed a wrongful death action. PPS submitte d a notice of claim to Farm Bureau in
connection with the accident, and Farm Bureau denied coverage, based on the automobile
exclusion. Parenteau, Laitinen, and Schinderle stated that the denial letter was the first time
they learned of the automobile exclusion. PPS settled the lawsuit for $1.7 million,

6
Progressive provided $481,381 .57 toward the settlement, a nd PPS agreed to pay the
outstanding $1.2 million.
PPS commenced suit against Farm Bureau and Sampson seeking reimbursement for
the funds paid in the settlement . Specifically, PPS: (1) sought “a reformation judgment
reforming the Umbrella Policy so that it did and does provide $10 million of motor vehicle
umbrella liability coverage dur ing its term;” (2) sought a declaratory judgment against
Farm Bureau for the amount of the settlement under the reformed agreement; (3) claimed
that Sampson acted negligently with respect to the lack of automobile coverage in the
umbrella policy and that Farm Bureau was vicariously liable for Sampson’s negligence;
and (4) claimed that Farm Bureau breached its contract by denying coverage. Farm Bureau
and Sampson moved separately for summar y judgment and PPS moved for partial
summary judgment on the issues of: (1) whether Sampson was acting as an agent of Farm
Bureau; (2) whether the settleme nt in the underlying litigatio n was reasonable; and (3) a
finding that “any failure of [PPS] to r ead or understand the policies procured by
Mr. Sampson does not bar recovery.”
The district court granted Farm Bu reau’s and Sampson’s summary-judgment
motions and declined to address PPS’s motions for partial summary judgment. This appeal
follows.
D E C I S I O N
I. Standard of Review
Summary judgment is proper when there is no genuine issue as to any material fact
and the moving party is entitled to judgment as a matter of la w. Minn. R. Civ. P 56.01.

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“The fact that the nonmoving party is unlikely to prevail at trial does not warrant granting
summary judgment.” Writers, Inc. v. W. Bend Mut. Ins. Co., 465 N.W.2d 419, 422 (Minn.
App. 1991). “The district court’s function on a motion for summary judgment is not to
decide issues of fact, but solely to determine whether genuine factual issues exist.” DLH,
Inc. v. Russ, 566 N.W.2d 60, 70 (Minn. 1997).
On appeal from a grant of summary judgme nt, we review de novo: “(1) whether
there exists a genuine issue of material fact; and (2) whether th e district court erred in its
application of the law.” Bjerke v. Johnson , 742 N.W.2d 660, 664 (Minn. 2007). “[W]e
view the evidence in the light most favorable to the party against whom summary judgment
was granted.” Carlson v. Allstate Ins. Co. , 749 N.W.2d 41, 45 (Minn. 2008) (quotation
marks omitted).
II. Reformation of Contract
PPS challenges the district court’s gran t of summary judgment on its reformation-
of-contract claim, arguing that the district court resolved factual issues and misapplied the
law by failing to consider extrinsic evidence and by finding that PPS was bound to know
the contents of the umbrella policy. The district court found that the legal requirements for
reformation of the contract were not met because: (1) the automobile exclusion was plain
and unambiguous; (2) there was no mutual mist ake as to the autom obile exclusion; and
(3) there was no evidence “of an actual agreement contrary to the policy issued.”
General contract principles govern the construction of insurance policies. Thommes
v. Milwaukee Ins. Co. , 641 N.W.2d 877, 879 (Minn. 2002). “When the language of an
insurance contract is unambiguous, it must be given its pl ain and ordinary meaning.” Id.

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at 880. Ambiguities must be resolved in favor of the insured and “[i]nsurance contract
exclusions are construed strictly against the insurer.” Id. “Where there is no ambiguity in
an insurance policy, there is no room for construction.” Cincinnati Ins. Co. v. Franck, 644
N.W.2d 471, 473 (Minn. App. 2002).
“Where an agent has allegedly made a mistake in obtaining insurance, the insured’s
remedy is generally reformation of the contract.” Wood Goods Galore, Inc. v. Reinsurance
Ass’n, 478 N.W.2d 205, 2 08 (Minn. App. 1991), review denied (Minn. Jan. 30, 1992).
“Reformation is an equitable remedy that is available when a party seeks to alter or amend
language in a contract so that the contract reflects the parties’ true intent when they entered
into the contract.” SCI Minn. Funeral Servs., Inc. v. Washburn-McReavy Funeral Corp. ,
795 N.W.2d 855, 864 (Minn. 2011). The party seeking reformation must prove that:
(1) [T]here was a valid agreement between the parties
expressing their real intenti ons; (2) the written instrument
failed to express the real intentio ns of the parties; and (3) this
failure was due to a mutual mi stake of the parties, or a
unilateral mistake accompanie d by fraud or inequitable
conduct by the other party.

Leamington Co. v. Nonprofits’ Ins. Assoc., 615 N.W.2d 349, 354 (Minn. 2000) (quotation
omitted). These facts must be supported by “clear and consiste nt, unequivocal and
convincing” evidence. Nichols v. Shelard Nat’l Bank, 294 N.W.2d 730, 734 (Minn. 1980).
The party seeking reformation of the contract bears an “onerous” burden. Tollefson v. Am.
Family Ins. Co., 302 Minn. 1, 7, 226 N.W.2d 280, 284 (1974).
PPS does not allege any fraud or inequitable conduct on the part of Farm Bureau or
Sampson and focuses solely on mutual mistake. “[I]n order to have a mutual mistake, it is

9
necessary that both parties ag ree as to the content of th e document but that somehow
through a scrivener’s error the document does not reflect that agreement.” Nichols, 294
N.W.2d at 734. “Absent ambiguity, fraud or misreprese ntation, a mistake of one of the
parties alone as to the subject matter of the contract is not a ground for reformation.” Id.
Summary judgment was proper because PPS failed to show that the inclusion of the
automobile exclusion was the product of a mu tual mistake. Reformation is proper where
there is a drafting error that is the product of the “mutual mistake of the parties, or a
unilateral mistake accompanie d by fraud or inequitable c onduct by the other party.” Id.
Here, there is no evidence of a drafting error or any mutual mistake. Farm Bureau’s direct
communications with PPS estab lish that Farm Bureau intend ed to extend the umbrella
policy only if that policy excluded automobile liability coverage. The automobile
exclusion is plain and unambiguous: the po licy “does not apply to ‘bodily injury’ or
‘property damage’ arising out of the ownershi p, maintenance, operati on, use, loading or
unloading of any ‘auto’ while away from the pr emises owned by, rented or leased to, or
controlled by [PPS].” Nothing in the record indicates that the automobile exclusion was
incorporated into the umbrella policy as a result of a drafting error or that Farm Bureau
was mistaken as to the contents of the umbrella policy.
Any mistake related to the umbrella policy and its automobile exclusion was PPS’s
alone. PPS failed to read the umbrella policy. And “[u]nless [an insured] has been misled
by some act of the insurer, a person who accep ts and retains possession of an insurance
policy is bound to know its contents.” Lane v. Parsons, Rich & Co. (In re Millers’ & Mfrs.’
Ins. Co. )., 97 Minn. 98, 116, 106 N. W. 485, 493 (1906). “T he law only relieves [the

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insured] therefrom in cases of fraud, mistake, waiver, or estoppel.” Id. at 116-17, 106 N.W.
at 493. Here, PPS was bound to know the contents of the umbrella policy it accepted and
renewed. There is no evidence nor any allegation of fraud on the part of Farm Bureau or
Sampson. The evidence establishes that PPS alone was mistaken as to the content of the
umbrella policy due to its failure to review the policy and in the absence of fraud or
inequitable conduct, such unilateral mistake does not give rise to a claim fo r reformation
of contract.1
In sum, PPS has failed to demonstrate that the automobile exclusion was the product
of a mutual mistake. Accordingly, the district court correctly concluded that PPS was not
entitled to reformation as a matter of law and appropriately granted summary judgment in
favor of Farm Bureau and Sampson.
III. Negligent Procurement of Insurance
PPS argues that the district court er red in granting summary judgment on its
negligent-procurement-of-insurance claim. We agree. To establish a claim for the
negligent procurement of insura nce, an insured must prove: “(1) that the agent 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 the insu red that was caused by the
agent’s breach of duty.” Graff v. Robert Swendra Agency, Inc. , 800 N.W.2d 112, 116
(Minn. 2011). An insurance agent “has the duty to exercise the standard of skill and care

1 Because PPS is not entitled to a reformed c ontract that includes automobile liability
coverage, its claim for breach-of-c ontract fails as a matter of la w. Farm Bureau’s denial
of coverage was proper under the terms of the umbrella policy and the automobile
exclusion.

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that a reasonably prudent person engaged in the insurance business will use under similar
circumstances.” Johnson v. Farmers & Merchs. State Bank, 320 N.W.2d 892, 898 (Minn.
1982). “An insurance agent’s duty is ordinarily limited to the duties imposed in any agency
relationship, to act in good faith and follow instructions.” Gabrielson v. Warnemunde, 443
N.W.2d 540, 543 (Minn. 1989). “Absent an agreement to th e contrary, an agent has no
duty beyond what he or she ha s specifically undertaken to perform for the client.” Id.
When there is “conflicting evidence” concerning the insured’s instructions to the insurance
agent regarding the coverage requested, such that there is a basis for finding that the agent
failed to follow the insured’s instructions, a genuine dispute of material fact exists. See
Scottsdale Ins. Co. v. Tr ansp. Leasing/Contract, Inc., 671 N.W.2d 186, 196 (Minn. App.
2003), review denied (Minn. Sept. 24, 2003).
The district court concluded that PPS failed to establish that Sampson breached the
duty owed to PPS because Sampson followed PPS’s directions in obtaining an umbrella
policy covering general liability , workers’ compensation, an d employer liability through
Farm Bureau and automobile coverage through Progressive. PPS argues that this finding
resolved a dispute of material fact. We agree. There is conflicting evidence about what
PPS’s instructions to Sampson were and whether Sampson followed those instructions.
Prior to the accident that gave rise to this litigation, PPS had three separate insurance
policies through Sampson: a general liability policy through Farm Bureau, an automobile
policy though Progressive, and an umbrella policy through Farm Bureau. Prior to renewing
or obtaining any of these policies, Parenteau testified that he directed Sampson to undertake
“whatever the necessary process you go through . . . to put in place a ten million umbrella”

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that covered “a bad situation” that woul d involve “three people dying and having the
company exposed” related to an accident that occurred while the employees were traveling
to or from a job site. Parenteau testified that Sampson told him that if he had an umbrella
policy, he would be “bubble-wrapped” with respect to his concerns about fatalities. Each
PPS employee testified that th ey had no knowledge of the automobile exclusion and that
Sampson never informed them of its existence.
It was improper for the district court to consider this testimony and determine that
Parenteau instructed Sampson to obtain umbre lla coverage in only three particular areas.
Viewing the evidence in the light most favor able to PPS, Parenteau’s instructions to
Sampson cannot be limited to only those areas. If Sampson did receive directions to “put
in place” an umbrella policy that extended to coverage of automobile-related liability, and
if Sampson knew the policy he obtained a quot e for did not provide that coverage, then
there is a basis for finding that he failed to follow PPS’s instructions. See Scottsdale Ins.
Co., 671 N.W.2d at 196. Because a reasonable jury could find that PPS instructed Sampson
to “put in place” an umbrella policy that incl uded automobile coverage, the district court
erred in granting summary judgment on the negligent-procurement-of-insurance claim.
In addition to Parenteau’s testimony, PP S submitted an expert affidavit of an
insurance agent with fo rty years of experience. An expe rt affidavit is “important in
establishing a standard of care.” Gabrielson, 443 N.W.2d at 545. The expert states that
the applicable standard of care required Samp son to: (1) inform PP S that the umbrella
coverage contained the automobi le exclusion; (2) procure um brella coverage that would
cover automobiles; (3) conduct business in a timely fashion and accurately reflect the

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coverage amounts in place on each certificate of insurance. PPS has sustained its burden
in opposing summary judgment by producing evidence concerning the standard of care of
a reasonably prudent insurance ag ent in these circumstances. See Atwater Creamery Co.
v. W. Nat’l Mut. Ins. Co. , 366 N.W.2d 271, 279 (Minn. 1 985) (affirming district court’s
dismissal where plaintiff failed to establish the duty of care through expert testimony).
Given the factual question that existed an d the evidence rega rding the requisite
standard of care, the district court erred in granting summary judgment on PPS’s negligent-
procurement-of-insurance claim. Accordingly, we reverse the judgment in favor of Farm
Bureau and Sampson and remand to the distri ct court the issue of whether Sampson met
the standard of care required of an insurance agent under the circumstances presented here.
Affirmed in part, reversed in part, and remanded.