Lang Fur Farms, Inc., et al., Appellants,

This opinion is nonprecedential except as provided by
Minn. R. Civ. App. P. 136.01, subd. 1(c).

STATE OF MINNESOTA
IN COURT OF APPEALS
A20-0683

Lang Fur Farms, Inc., et al.,
Appellants,

vs.

Bird Island - Hawk Creek Mutual Ins. Co.,
Respondent.

Filed February 8, 2021
Affirmed and remanded
Connolly, Judge

Stearns County District Court
File No. 73-CV-18-6217

Adina R. Bergstrom, Brenda M. Sauro, Sauro & Bergstrom, PLLC, Oakdale, Minnesota
(for appellants)

M. Gregory Simpson, Julia J. Nierengarten, Leatha G. Wolter, Blake P. Derosier, Meagher
& Geer, PLLP, Minneapolis, Minnesota (for respondent)

Considered and decided by Gaïtas, Presiding Judge; Connolly, Judge; and Reyes,
Judge.
NONPRECEDENTIAL OPINION
CONNOLLY, Judge
Appellants-insureds challenge the partial summary judgment granted to respondent-
insurer, arguing that the district court erred in concluding that the chemical -or-biological-

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materials and anti-concurrent-causation exclusions apply to their vandalism claim relating
to their mink farms. Appellants also argue that the district court erred in not dismissing
claims involving a bank , because the parties had stipulated to the dismissal of the bank
from the case and the district court apparently overlooked the dismissal. Because we agree
that the exclusions apply and there is no insurance coverage, we affirm the partial summary
judgment; because we agree that the claims involving the bank should be dismissed, we
remand for that purpose.
FACTS
In May 2017, appellants Lang Fur Farms and one of its owners, Daniel Lang ,
obtained an insurance policy (the policy) in part from respondent Bird-Island Hawk Creek
Mutual Insurance Company, a township mutual insurance company. Five of the policy’s
provisions are relevant to the issues now on appeal. The first, in the “D EFINITIONS”
section, defines the term “Farm Barns, Buildings and Structures” to include “any fixtures
or equipment attached to, installed in or connected for use within a building.”
The second relevant provision is in the “B ASIC PERILS” section and includes in
the list of perils covered “Vandalism, or Malicious Mischief.” Appellants claim that their
damage was the result of vandalism. The third relevant provision is the heading
“GENERAL EXCLUSIONS,” followed by the phrase “(Apply to all Coverages).” Both
the fourth and fifth relevant provisions are under this heading. The fourth is the “Chemical
or Biological” exclusion, which reads, “Regardless of the amount of damage or loss, this
exclusion applies to any losses that are carried out or caused by dispersal or application of
pathogenic or poisonous biological or chemical materials.”

3
The fifth relevant provision is the “Concurrent Causation” exclusion, which
provides that, if any one exclusion applies, respondent does not cover the loss resulting
directly or indirectly from any concurrent cause, i.e., it does not cover a loss “[i]f one or
more of the exclusions apply to the loss, regardless of other causes or events that contribute
to or aggravate the loss whether such causes or events act to produce the loss before, at the
same time as, or after the excluded causes or events.”
In July 2017, a herbicide containing the chemical glyphosate 1 was introduced into
the water systems for the minks’ cages on appellants’ two farms. Appellants filed a claim
for the cost of replacing the water systems. Respondent investigated and denied the claim.
Appellants brought this action, seeking a declaratory judgment stating that their loss
and damages were covered and claiming breach of contract, joint enterprise, joint venture,
and a right to an order for appraisal. Respondent moved to dismiss, alleging t hat the
policy’s exclusions barred coverage. The district court denied the motion. Respondent
then filed an answer, alleging that the policy excl usions bar red coverage and that
appellants’ willful misrepresentations, concealment and fraud, and intentional causation of
all damages were affirmative defenses for respondent . Respondent also filed a
counterclaim against appellant Daniel Lang, alleging i nsurance fraud. The parties file d
cross motions for summary judgment.
Following a hearing, the district court issued an order and a memorandum that
begins by noting that “[t]he underlying issue of fraud (whether the loss was the result of

1 Glyphosate is defined as “[a] white compound, C 3H8NO5P, soluble in water, and used as
a broad-spectrum herbicide.” American Heritage Dictionary 593 (4th ed. 2007).

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third-party va ndalism or acts of the insured) is a matter for the jury . . . that will be
addressed no further at this time.” The order granted respondent’s motion for partial
summary judgment based on the chemical-or-biological exclusion and the anti-concurrent-
cause exclusion, denied respondent’s motions for summary judgment based on the
misrepresentation-and-fraud exclusion, the pollutants exclusion, and the terrorism
exclusion, and awarded respondent recoverable costs and expenses.2
Appellants challenge the summary judgment , arguing that none of the policy’s
exclusions applies to their claim.3
DECISION
Standard of Review
This court reviews a district court’s legal conclusions on summary judgment de
novo, viewing the evidence in the light most favorable to t he party against whom the
summary judgment was granted. Commerce Bank v. W. Bend. Mut. Ins. Co., 870 N.W.2d
770, 773 (Minn. 2015). More specifically, interpretation of an insurance policy and
whether a policy provides coverage in a particular situation a re questions of law that are
subject to de novo review. Eng’g & Const r. Innovations, Inc. v. L.H. Bolduc Co. , 825
N.W.2d 695, 704 (Minn. 2013). Insurance policy language is to be given its plain and

2 The district court noted that “the grant of summary judgment[, determining that the
chemical and biological exclusion barred coverage, was] s o determinative of the ultimate
outcome of this case that there [was] no just reason for delay in entry of final judgment as
to that claim”; ordered entry of judgment under Minn. R. Civ. App. P. 54.02; and directed
that the other issues remain suspended pending appeal of the summary judgment.

3 Appellants raise other issues that are not relevant to this appeal ; therefore, we do not
address them.

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ordinary meaning. Gen. Mills, Inc. v. Gold Medal Ins. Co., 622 N.W.2d 147, 151 (Minn.
App. 2001). Exclusions are construed in favor of the insured. Canadian Universal Ins.
Co. v. Fire Watch, Inc., 258 N.W.2d 570, 572 (Minn. 1977).
1. The “Chemical or Biological” Exclusion
The policy excludes coverage for “any losses that are carried out or caused by
dispersal or application of pathogenic or poisonous biological or chemical materials.” The
district court concluded that glyphosate, an ingredient of the herbicide poured into the
damaged watering system, was a pathogenic or poisonous chemical material that was
dispersed through the water in the system and that “the incident at Lang Fur Farms was a
dispersal of a chemical and is subject to the Chemical or Biological Exclusion.”
Appellants offer three reasons why the chemical or biological exclusion does not
apply. First, they argue that, because the herbicide was poured into the watering system,
it was not “dispersed.” When a term in an insurance policy is not defined in the pol icy, it
is to be given its plain and ordinary meaning. Gen. Mills, Inc. , 622 N.W.2d at 151. T he
meanings of “disperse” include “to become spread widely” and “to distribute (something,
such as fine particles) more or les s evenly throughout a medium.” Disperse Definition,
Merriam-Webster.com, www.merriamwebster.com/dictionary/disperse (last visited
Nov. 23, 2020). The glyphosate was spread widely throughout the minks’ watering system,
causing the damage.
Appellants rely on Sylvester Bros. Dev. Co. v. Great Cent. Ins. Co ., 480 N.W.2d
368, 374 (Minn. App. 1992) (citing a Tenth C ircuit case for the view that “dispersal”
connotes “the issuance of a substance from a state of contai nment” rather than “the

6
placement of a substance into an area of confinement ”), review denied (Minn. Mar. 26,
1992). This reliance is misplaced because Sylvester Bros. is distinguishable. That case
concerned a pollution exclusion, not a chemical -or-biological exclu sion.4 The word
“dispersal” occurs in the phrase “discharge, dispersal, release, or escape” of pollutants, and
“the ‘escape’ of pollutants [as opposed to the deposit of pollutants in the landfill] is the
critical inquiry for purposes of determining the ap plicability of the pollution exclusion.”
Sylvester Bros. Dev. Co. , 480 N.W.2d at 373 -74. Here, in the chemical or biological
exclusion, the word “dispersal” occurs in the phrase “dispersal or application,” and the
critical inquiry for applicability of th e exclusion was the deposit of glyphosate into the
watering systems, not its “escape” into them. Given the very different contexts in which
“dispersal” was us ed in the pollution exclusion in the Sylvester Bros . policy and the
chemical or biological exclusion in appellants’ policy, its definition in Sylvester Bros. is
not relevant to, much less dispositive of, its definition here.
Second, appellants also argue that the glyphosate was not poisonous. This
argument conflicts with their previous position that the vandals “took specific action to
kill, maim, and release the mink. . . . [T]hey tainted their drinking water and made mink
very sick and many died” and that “[I]t is true that the mink at issue got very sick, we re
rendered blind, and many died after drinking the water.” Having represented to the district
court that glyphosate was a poisonous chemical, appellants may not argue now that it is
not a poisonous chemical within the meani ng of the exclusion. A party may not “obtain

4 The district court explicitly concluded that the pollution exclusion here did not apply.

7
review by raising the same general issue litigated below but under a different theory.”
Thiele v. Stich, 425 N.W.2d 580, 582 (Minn. 1988).
Third, appellants argue that , because the damage was the result of v andalism, a
“covered peril,” it is covered, and that the means chosen by the vandal(s), i.e., dispersing a
poisonous chemical through the watering system, cannot vitiate this coverage. But with
this reasoning, all exclusions would be meaningless: anything vandals chose to do, whether
it was a covered peril or an excluded peril, would be covered.
2. The Concurrent-Causation Exclusion
Appellants argue that “[w]hen property damage is caused by the acts of vandals,
vandalism co verage applies and there is no ‘concurrent cause’ sufficient to trigger that
exclusion.” But the concurrent -causation exclusion says there is no coverage when any
other exclusion applies to a damage claim, regardless of when that excluded event
occurred. Here, there is no coverage for vandalism that occurred be fore and during the
excluded dispersal of a chemical.
The district court relied on an Eighth C ircuit case, State Bank of Bellingham v.
BancInsure, Inc., 823 F.3d 456 (8th Cir. 2016) (affirming the application of a concurrent-
causation exclusion in State Bank of Bellingham v. BancInsure, Inc ., 2014 WL 4829184
(D. Minn. 2014)). Bellingham concerned an insurer’s denial of coverage for an insured
bank’s claim for damages resulting from fraudulent transfers, based on exclusions in the
policy. Bellingham, 823 F.3d at 458-59.
Concerning insurance contracts, Minnesota has adopted the
concurrent-causation doctrine, which directs that an insured is
entitled to recover from an insurer when cause of the loss is not

8
excluded under the policy. This is true even though an
excluded cause may also have contributed to the loss. . . .
. . . .
. . . Parties may include “anti -concurrent causation”
language in contacts to prevent the application of the
concurrent causation doctrine; however, in those cases where
courts have found the contract contains an anti -concurrent
causation clause, the language used is clear and specific. See
Ken Johnson Props., LLC v. Harleysville Worcester Summary
Ins. Co., No. 12 -1582, 2013 WL 5487444, at *12 (D. Minn.
Sept. 30, 2013) (recognizing language that an exclusion applies
“regardless of any other cause or event that contributes
concurrently or in any sequence to the loss[,]” constitutes an
adequate “anti -concurrent causation” provision[,] and
“evidences the parties’ intent to contract around the concurrent
causation doctrine”).

Id. at 459 -60 (quotation and citations omitted) . The language in Ken Johnson is very
similar to the language here.
The district court noted further that the online Survey of State Law Regarding
Enforceability of Anti-Concurrent Causation Clauses,
http://www/timoneyknox.com/insurance-industry/survey-of-statelaw-regarding-
enforceability-of-anti-concurrent-causation-clauses (last visited Jan. 25, 2021 ), indicates
that “this interpretation of the anti -concurrent cause exclusion is consistent with the vast
majority of states.” The survey covers 34 states: 31 regard anti-causation clauses as valid
and enforceable while three do not.5

5 Of the 31 states, one state limits enforceable anti-causation clauses to policies other than
fire policies; one limits them to clauses that do not conflict with other policy provisions,
and one limits them to situations where two or more causes occur simultaneously to cause
the loss.

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The conclusion of the distric t court’s memorandum reveals an awareness that the
decision for the insurer could “be deemed harsh.”
It is troubling that coverage for an act of vandalism may
ultimately be determined by the method of vandalism; the
release of a chemical versus another method such as arson.
. . . .
. . . [T]he Court suspects that a party purchasing
insurance would assume that the coverage extended to
vandalism damage, regardless of the method in which the
vandals acted.
Unfortunately, many fail to read their policy after
purchase. Even fewer would read a sample policy prior to
purchase and fully understand the coverage that they are
purchasing. Even for those who would read a p olicy prior to
purchase, the likelihood that they would anticipate a loss of this
nature, and the application of an exclusion, would be
unfathomable. But the language of the policy is there and it
governs the claim.
At some point, either the legislature or our appellate
courts may rein in the broad application of the [chemical and
biological] exclusion as applied in conjunction with the anti -
concurrent clause exclusion. But until then, this Court is bound
to follow what it believes to be the established precedent,
regardless of the harshness of the result.

Appellants rely on some of this language and on Atwater Creamery Co. v. W. Nat.
Mut. Ins. Co. , 366 N.W.2d 271 (Minn. 1985) to argue that the district court “failed to
properly apply the Reasonable E xpectations Doctrine to address the manifestly unjust
‘harsh’ result.” That doctrine provides that “the objectively reasonable expectations of
[insureds] regarding the terms of insurance contracts will be honored even though the
painstaking study of the policy provisions would have negated those expectations .” Id. at
277 (quotation omitted). H owever, “some kind of ambiguity” in an insurance contract is
traditionally required before the reasonable expectations doctrine is applied. Id.

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But Atwater is distinguishable: that case involved a burglary policy in which “the
technical definition of burglary [was], in effect, an exclusion from coverage” that would
not be “interpreted so as to defeat the reasonable expectations of the [insured.]” Id. at 278-
79. Atwater found that the definition in the policy “[was] not ambiguous,” id. at 276, but
also held that ambiguity in the policy was a factor, but not the dispositive factor, to consider
when applying the reasonable -expectations doctrine. Id. at 278.6 A year later, this court
discussed Atwater in Merseth by Merseth v. State Farm Fire and Cas. Co. , 390 N.W.2d
16, 18 (Minn. App. 1986) , review denied, (Minn. Aug. 13, 1986) . Merseth noted that:
(1) Atwater had “seemingly adopted the reasonable -expectations-regardless-of-ambiguity
doctrine,” (2) the dissent in Rusthoven v. Commercial Standard Ins. Co., 387 N.W.2d 642,
646 (Minn. 1986) claimed the majority had abandoned the Atwater reasonable-
expectations-regardless-of-ambiguity doctrine, (3) the result was uncertainty as to “how
the reasonable expectations doctrine applie[d] in a case where the provision at issue is clear
and unambiguous,” and (4) this court declined “to apply the reasonable -expectations-
regardless-of-ambiguity doctrine beyond the facts of Atwater.”
In their reply brief, appellant s argue that in Merseth this court applied the
reasonable-expectations doctrine where the exclusionary language was clear, precise , and
unambiguous, but “obscurely placed in the policy, as the language is here.” Bu t the
exclusions in this policy are not “obscurely placed”: they are under the boldface heading

6 Four of the Atwater justices joined in a special concurrence, saying they “would not apply
the reasonable expectations test in the absence of ambiguity in the policy; but because
[they] believe[d] such ambiguity exist[ed], [they] concur[red]” in its application.
(Simonett, J.)

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“GENERAL EXCLUSIONS” that “apply to all coverages” on pages 14 and 16 of the 30 -
page “General Policy Provisions.”7
Moreover, appellants do not argue that their “reasonable expectations” are based on
any ambiguity in the policy. Carlson v. Allstate Ins. Co., 749 N.W.2d 41, 49 (Minn. 2008)
noted that:
[I]n no case since Atwater [23 years ago] have we used the
doctrine [ of reasonable expectations] to provide coverage in
contravention of unambiguous policy terms. Moreover, the
doctrine has generated criticism and confusion that gives us
pause. . . . Commentators also have expressed concern that the
doctrine enables court s to vitiate the unambiguous terms of a
policy simply to achieve desirable outcomes. . . . Against this
backdrop, we are unwilling to expand the doctrine of
reasonable expectations beyond its current use as a tool for
resolving ambiguity and for correcting extreme situations like
that in Atwater, where a party’s coverage is significantly
different from what the party reasonably believes it has paid
for and where the only notice the party has of that difference is
in an obscure and unexpected provision.

Given the history of Atwater and the fact that appellants did not argue their policy
was ambiguous, the district court did not err in declining to apply the reasonable -
expectations doctrine.
The district court did not err in concluding that, under Minnesota law, the chemical-
or-biological ex clusion and the anti -concurrent-causation exclusion apply to prevent

7 Appellants claim that the exclusions are “obscurely buried in the 123 -page policy” and
that “a layman farmer is utterly lost in riddling out the coverage.” The policy at issue here
is 30 pages long. Moreover, appellants in their principal brief state that they own and
operate Lang Fur Farms at two locations ; co-own Lang Family Properties ; operate Lang
Feed, a feed plant; and have successfully run a multi-million dollar business for almost 100
years. These facts do not support the implication that appellants were unable to understand
the clearly labeled coverages and exclusions of the insurance policy.

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insurance coverage for this loss . We affirm the award of partial summary judgment to
respondent and remand for the dismissal of the claims involving the bank.
Affirmed and remanded.