Founders Insurance Company v. James Yates , 2016 Minn. LEXIS 787 ( 2016 )

STATE OF MINNESOTA
IN SUPREME COURT
A15-1174
Court of Appeals Anderson, J.
Took no part, Chutich, J.
Founders Insurance Company,
Respondent,
vs. Filed: December 7, 2016
Office of Appellate Courts
James Yates,
Appellant.
______________________
Steven E. Tomsche, Erica A. Weber, Tomsche, Sonnesyn, & Tomsche, P.A., Golden
Valley, Minnesota, for respondent.
Gregory J. Johnson, G Johnson Law PLLC, Apple Valley, Minnesota; and
Patrick R. Gillespie, Michael P. Gillespie, Gillespie Law Offices LLP, Rogers, Minnesota,
for appellant.
Sharon L. Van Dyck, Van Dyck Law Firm PLLC, Minneapolis, Minnesota, for amicus
curiae Minnesota Association for Justice.
Tammy M. Reno, Kelly P. Magnus, Jessica C. Richardson, Stich, Angell, Kreidler, Unke
& Scattergood, P.A., Minneapolis, Minnesota, for amicus curiae Minnesota Defense
Lawyers Association.
______________________
SYLLABUS
A motor vehicle insurance carrier that is not licensed to sell insurance in Minnesota
is still obligated under Minn. Stat. § 65B.50, subd. 2 (2014), to pay basic economic loss
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benefits to the insured when the insured vehicle is in Minnesota and an accident occurs in
Minnesota.
Reversed.
OPINION
ANDERSON, Justice.
Appellant James Yates was injured in a car accident in Minnesota and sought basic
economic loss benefits under Minnesota’s No-Fault Automobile Insurance Act, Minn. Stat.
§§ 65B.41-.71 (2014), from respondent Founders Insurance Company, his insurer.
Founders argued that the Act does not require it to provide basic economic loss coverage
because Founders is an out-of-state insurer that does not write motor vehicle insurance in
Minnesota. An arbitrator awarded Yates $19,128 in basic economic loss benefits, and the
district court confirmed the arbitration award. The court of appeals reversed. Because we
conclude that the plain language of Minn. Stat. § 65B.50, subd. 2, requires Founders to
provide no-fault benefits to Yates, we reverse the decision of the court of appeals.
I.
Yates was a resident of Illinois until October 2013, when he signed a one-year lease
agreement for a residence in Saint Paul and moved there. While living in Illinois, he
purchased a motor vehicle insurance policy from Founders. The insurance policy was
written to comply with Illinois law and provided $1,000 for medical payments. Under the
Minnesota No-Fault Automobile Insurance Act (No-Fault Act), however, insurance
policies must provide at least $20,000 for medical expense loss. Minn. Stat. § 65B.44,
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subd. 1(a)(1). The insurance policy that Yates had purchased did not contain a conformity
clause, which would have increased coverage as required to comply with applicable law.
On December 14, 2013, Yates was driving in Maplewood in snowy conditions when
his vehicle collided with another car that had spun out of control in front of him. Yates
made a claim for basic economic loss medical benefits (no-fault benefits) from Founders
for injuries he suffered as a result of this collision. Founders denied the claim, asserting
that the No-Fault Act does not require it to provide benefits to Yates because it is not
“licensed to write motor vehicle accident reparation and liability insurance” in Minnesota
under Minn. Stat. § 65B.50.
Yates pursued his claim for no-fault benefits under the arbitration process in the No-
Fault Act. Minn. Stat. § 65B.525. Founders did not participate in the arbitration, except
to object to the proceeding, arguing that the No-Fault Act did not require Founders to
provide benefits to Yates. Yates argued that Founders is required to provide no-fault
benefits because, under Minn. Stat. § 65B.50, subd. 2, “every contract of liability insurance
for injury, wherever issued . . . includes basic economic loss benefit coverages.” The
arbitrator awarded Yates $19,128 for chiropractic bills, medical mileage, and interest.
While the arbitration was pending, Founders filed a complaint in Ramsey County
District Court, seeking a declaratory judgment that it was not required to provide no-fault
benefits to Yates. After the arbitrator issued its ruling, Founders appealed the arbitration
award. These two cases were later consolidated.
The district court confirmed the arbitration award. Founders appealed, and the court
of appeals reversed the district court. Founders Ins. Co. v. Yates, 876 N.W.2d 344 (Minn.
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Ohio App. 2016). The court of appeals concluded that it was bound by its own precedent, which
had interpreted Minn. Stat. § 65B.50, subd. 2, to apply only to licensed insurers. Founders,
876 N.W.2d at 347-49. Accordingly, the court held that Founders was not required to
provide no-fault benefits to Yates. Id. at 350. We granted review to determine whether
Minn. Stat. § 65B.50, subd. 2, applies to an out-of-state insurer that is not licensed to write
motor vehicle insurance in Minnesota.
II.
Statutory interpretation is a question of law, which we review de novo. Christianson
v. Henke, 831 N.W.2d 532, 535 (Minn. 2013). The goal of all statutory interpretation is to
“ascertain and effectuate the intention of the legislature.” Minn. Stat. § 645.16 (2014).
“[W]hen interpreting a statute, we read and construe the statute as a whole, giving effect
whenever possible to all of its provisions.” Eclipse Architectural Grp., Inc. v. Lam, 814
N.W.2d 692, 701 (Minn. 2012). When the text of the law is unambiguous, we apply the
plain meaning of the statutory language. Sumner v. Jim Lupient Infiniti, 865 N.W.2d 706,
708 (Minn. 2015). A statute is ambiguous only when it is reasonably susceptible to more
than one interpretation. Lietz v. N. States Power Co., 718 N.W.2d 865, 870 (Minn. 2006).
Here, the relevant statute is Minn. Stat. § 65B.50, subd. 2, which states:
“Notwithstanding any contrary provision in it, every contract of liability insurance for
injury, wherever issued . . . includes basic economic loss benefit coverages and residual
liability coverages . . . while the vehicle is in this state.” (Emphasis added.) The plain
language of the statute is clear. By its terms, the statute applies to all contracts of liability
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insurance for injury, wherever issued, including whether they were issued in Minnesota,
Illinois, or some other place.
But Founders argues that we should reject this interpretation of the statute because
it would make Minn. Stat. § 65B.50, subd. 1, unnecessary. Subdivision 1 states:
Every insurer licensed to write motor vehicle accident reparation and liability
insurance in this state shall, on or before January 1, 1975, or as a condition
to such licensing, file with the commissioner and thereafter maintain a
written certification that it will afford at least the minimum security provided
by section 65B.49 to all policyholders, except that in the case of nonresident
policyholders it need only certify that security is provided with respect to
accidents occurring in this state.
Founders maintains that the coverage requirements that apply to insurers “licensed to write
motor vehicle accident reparation and liability insurance in this state” in subdivision 1
would “become completely unnecessary” if the coverage requirements in subdivision 2
apply to nonlicensed, out-of-state insurers. Consequently, Founders argues that we should
read subdivision 1 and subdivision 2 together. Because subdivision 1 is limited to licensed
insurers, Founders argues that subdivision 2 is also limited to licensed insurers. We
disagree.
Subdivision 1 imposes additional requirements on licensed insurers that subdivision
2 does not impose on nonlicensed insurers. Specifically, subdivision 1 requires licensed
insurers to “file with the commissioner and thereafter maintain a written certification that
[they] will afford at least the minimum security provided by section 65B.49.” Minn. Stat.
§ 65B.50, subd.1. Section 65B.49 describes in detail the minimum security required, which
includes basic economic loss coverage, residual liability coverage, uninsured and
underinsured motorist coverages, and rental vehicle coverage. Minn. Stat. § 65B.49.
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Minnesota Statutes § 65B.50, subd. 2, imposes fewer requirements, requiring nonlicensed
insurers to provide only “basic economic loss benefit coverages and residual liability
coverages.” Therefore, applying subdivision 2 to nonlicensed, out-of-state insurers does
not make subdivision 1 unnecessary.
Founders also argues that applying Minn. Stat. § 65B.50, subd. 2, to nonlicensed,
out-of-state insurers would “void[] directives which limit the types of insurance for which
an insurance company can conduct business in Minnesota.” Amicus Minnesota Defense
Lawyers Association similarly argues that this interpretation would “eviscerate[] insurer
licensing requirements” and “render the licensing statutes meaningless.” Again, we
disagree.
Multiple statutory rights and obligations accrue to licensed insurers that do not apply
to nonlicensed insurers. For example, licensed insurers have the right to sell and advertise
their insurance products in Minnesota; nonlicensed insurers do not. Minn. Stat. §§ 60A.07,
subd. 4, 72A.33-72A.35 (2014). Licensed insurers also have an obligation to file numerous
documents, maintain specified records, and respond to inquiries. See, e.g., Minn. Stat.
§ 60A.13 (2014) (requiring annual statements and imposing a duty to respond to inquiries
from the Commissioner of Commerce); Minn. Stat.§ 60A.27 (2014) (requiring a licensed
insurer to notify the Commissioner of Commerce when the insurer is disciplined by
another state); Minn. Stat. § 60A.91 (2014) (requiring the filing of certain documents with
the National Association of Insurance Commissioners); Minn. Stat. § 70A.06 (2014)
(requiring the filing of rate changes); Minn. Stat. § 72A.2035 (2014) (requiring the
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maintenance of certain records). Minnesota Statutes § 65B.50, subd. 2, imposes none of
these obligations on nonlicensed insurers.
Having rejected the arguments of Founders, we are left with the plain language of
subdivision 2. It clearly states that it applies to “every contract of liability insurance for
injury, wherever issued.” Minn. Stat. § 65B.50, subd. 2 (emphasis added). Nothing in
subdivision 2 suggests that it is limited to insurers licensed in Minnesota. Because there is
no other reasonable interpretation of the statute, it is unambiguous and we must apply its
plain meaning. We therefore conclude that Minn. Stat. § 65B.50, subd. 2, applies to an
out-of-state insurer when its insured is in an accident in Minnesota and the insured vehicle
is in Minnesota, even though the insurer is not licensed by the State of Minnesota to issue
motor vehicle insurance.1
Reversed.
CHUTICH, J., took no part in the consideration or decision of this case.
1
We recognize that applying Minn. Stat. § 65B.50, subd. 2, to nonlicensed, out-of-
state insurers could present one or more constitutional issues in an appropriate case. The
issue of the constitutionality of Minn. Stat. § 65B.50, subd. 2, is not before us; Founders
has not raised a constitutional challenge. We therefore express no opinion on the
constitutionality of Minn. Stat. § 65B.50, subd. 2. See State v. Schweppe, 306 Minn. 395,
401 n.3, 237 N.W.2d 609, 614 n.3 (1975) (declining to decide an issue not briefed or argued
by the parties).
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