Malmin v. Minnesota Mutual Fire & Casualty Co.

COYNE, Justice (dissenting). I dissent. I will not countenance an insurer’s breach of its contract of insurance. Neither, however, can I find any justification for relieving the insured of all obligation to comply with the terms of his insurance policy. Here the insured carefully orchestrated his underinsured motorist claim. Following the accident of October 20, 1990, Malmin made a claim for basic economic loss benefits. There was, however, nothing about Malmin’s medical expenses or lost wages that suggested to Minnesota Mutual that he had sustained a serious injury. Almost 4 years went by without the slightest indication that Malmin contemplated an underinsured motorist claim. It was not until June 15, 1994, when Mal-min’s lawyer wrote to Minnesota Mutual requesting a summary of the no-fault benefits it had paid Malmin, that the insurer was informed that Malmin had sued someone for damages caused by injuries sustained in the *729 October 20, 1990 accident. Included in the letter was the casual statement “that in two weeks we are going to be trying” Malmin’s personal injury claim. In the context of the letter, the statement appeared only intended to elicit a prompt response to the request for the summary of benefits. The remark did not identify the defendant. Neither did Mal-min’s lawyer advise Minnesota Mutual of either the limits of the defendant’s liability policy or his estimate of his client’s damages. Surely, Malmin’s counsel cannot now assert that he was unaware, 2 weeks before trial, of the limits of Olson’s policy or the fact that he anticipated — or at least hoped — that the evidence would support an award in excess of Olson’s $50,000 limits! In denying Malmin’s motion for summary judgment, the district court stated that Malmin did not notify Minnesota Mutual of his action against Olson, thereby depriving Minnesota Mutual of any opportunity to intervene. From the circumstances I can infer only that the letter was intended to provide something less than meaningful notification of the action against Olson. It. may be that permitting an insurer that is promptly notified of the insured’s personal injury action against an uninsured or under-insured motorist to withhold consent to the litigation until the result is known so that it can accept a low verdict and reject a high verdict affords the insurer an unfair advantage. But denying the insurer the right to pick and choose which verdicts it will accept as binding does not mean that it is not entitled to prompt notice of the insured’s lawsuit. The Minnesota Mutual policy contains, in addition to the “consent to sue” clause, a provision detailing “Duties in the Event of Accident, Claim, Suit or Loss”: * * * * * * (b) Promptly send us copies of the legal papers if a “suit” is brought. With respect to claims against underinsured motorists the policy incorporates the notice provisions concerning a tentative settlement which this court laid but in Schmidt v. Clothier, 338 N.W.2d 256 (Minn.1983), and it also requires the insured to allow the insurer 30 days in which to meet the settlement offer in order to preserve the insurer’s rights against the tortfeasor. The majority strikes the “consent to sue” clause from the insuring agreement (I assume the majority intends the rest of the insuring agreement to remain intact) on the ground that it offends public policy. 1 The requirement that the insured promptly send the insurer “copies of the legal papers if a ‘suit’ is brought,” which is one of the insured’s specified duties in the event of accident, claim, suit or loss, remains in full force and effect. There is and can be no serious contention that this requirement is violative of public policy. Nevertheless, first the court of appeals and now the majority ignore not only the insured’s contractual obligation but also the district court’s determination that the insured had breached that obligation. Next the majority follows on the heels of the court of appeals’ erroneous conclusion that answering the certified question in the affirmative justifies holding that Minnesota Mutual is bound by the damages awarded in Malmin’s action against Olson. Of course, this conclusion is a non sequitur, for as the majority concedes, Minnesota Mutual was deprived of notice and of any opportunity to intervene in Malmin’s lawsuit. Therefore, answering the certified question does not dispose of this action and the majority’s decision is both improper and erroneous. In short, if the courts insist on casting the insurer in the role of the goose that lays the golden egg, then what is sauce for the goose ought to be sauce for the insured gander. The insured ought to be required to honor his or her contract just as insurers must be required to honor theirs. Whether the certified question is answered in the affirmative or the negative, I would reverse the ruling that Minnesota Mutual is bound by the award in Malmin’s action against Olson and remand to the district court for further proceedings. . The validity of this clause has, however, been unchallenged in Minnesota for 40 years.