Samantha LeCuyer v. West Bend Mutual Insurance Company

This opinion will be unpublished and
may not be cited except as provided by
Minn. Stat. § 480A.08, subd. 3 (2012).
STATE OF MINNESOTA
IN COURT OF APPEALS
A13-1685
Samantha LeCuyer,
Appellant,
vs.
West Bend Mutual Insurance Company,
Respondent.
Filed July 14, 2014
Affirmed
Ross, Judge
Anoka County District Court
File No. 02-CV-12-7012
Gerald T. Laurie, Ian S. Laurie, Laurie & Laurie, P.A., St. Louis Park, Minnesota (for
appellant)
Michael R. Quinlivan, Pearson Quinlivan, PLC, Maplewood, Minnesota (for respondent)
Considered and decided by Ross, Presiding Judge; Bjorkman, Judge; and Reilly,
Judge.
UNPUBLISHED OPINION
ROSS, Judge
Samantha LeCuyer obtained a money judgment against her former employer for
sexual-harassment retaliation but did not collect. She informed the employer’s former
insurer, West Bend Mutual Insurance Company, of the judgment nearly two years after
the employer’s policy expired, and she sought a declaratory judgment that would require
West Bend to pay her the judgment amount. The district court granted summary
judgment in favor of West Bend. Because West Bend did not receive timely notice of
LeCuyer’s claim against her employer so as to trigger its obligation under the terms of
the insurance contract, West Bend is not liable. We affirm.
FACTS
Samantha LeCuyer worked as a security guard for Wolf Protective Services
beginning in August 2008. LeCuyer felt that two of her coworkers sexually harassed her.
She complained to supervisors in September and October, and the company terminated
her employment in December. LeCuyer sent a letter to the company on January 13, 2009,
outlining her claims. Wolf’s counsel responded by letter stating that Wolf would review
its insurance policies and consider whether to submit a claim to its insurer. Wolf never
informed LeCuyer whether it had an insurance policy that covered sexual-harassment
claims. LeCuyer sued in April, alleging the company violated the Minnesota Human
Rights Act. Wolf retained new counsel but still never informed LeCuyer whether it had
an insurance policy that covered sexual-harassment claims.
Wolf filed an answer to LeCuyer’s suit. Wolf’s new counsel withdrew soon
afterward, and Wolf did not retain another attorney. The district court conducted a bench
trial in 2010. Wolf did not appear. The district court entered a default judgment against
Wolf for $520,693.
LeCuyer eventually discovered that an affiliate of West Bend Mutual Insurance
had issued Wolf an insurance policy covering employment practices. The policy
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commenced on July 25, 2008 and ended on July 25, 2009. She wrote to West Bend on
June 2, 2011, informing it of the default judgment against Wolf and requesting a copy of
the policy. West Bend responded that it had received no previous notice of the claim or
the judgment and that it had cancelled Wolf’s policy in October 2008 because Wolf had
stopped paying premiums. It informed LeCuyer that Wolf’s policy had been a claims-
made policy, which covered only claims made during the coverage period.
LeCuyer attempts to recover from West Bend because her collection efforts
against Wolf have been fruitless. She filed a declaratory judgment action seeking to hold
West Bend liable for her judgment. LeCuyer moved for summary judgment, arguing that
she had made her claim within the coverage period. She also argued that Minnesota
Statutes section 60A.08, subdivision 6 (2012), compels West Bend to provide coverage.
The district court held that West Bend is not liable because LeCuyer had failed to make a
claim to West Bend.
LeCuyer appeals.
DECISION
LeCuyer challenges the district court’s summary judgment decision. Our review is
therefore de novo. See Kelly v. State Farm Mut. Auto. Ins. Co., 666 N.W.2d 328, 330
(Minn. 2003). We must decide whether any genuine issue of material fact exists and
whether the district court correctly applied the law. Dahlin v. Kroening, 796 N.W.2d 503,
504 (Minn. 2011).
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I
LeCuyer argues that she satisfied the notice provision of the insurance policy,
making insurance coverage available to pay the damages ascribed to Wolf, because she
reported the claim of harassment to Wolf. The parties agree that Wolf’s insurance policy
with West Bend controls the primary question in this appeal. The policy disclaims any
obligation to provide coverage beyond its specific terms. It promises to “pay on behalf of
the insured for ‘damages’ . . . arising out of any ‘employment practices’ to which this
insurance applies,” but it states that West Bend will cover an employee’s damages claim
against Wolf “only if . . . [a] ‘claim’ is both . . . made against any insured, in accordance
with paragraph 3 below, during the policy period . . . and [r]eported to us . . . during the
policy period or within thirty . . . days thereafter.” (Emphasis added). The policy explains
that a claim is made “[w]hen notice of such ‘claim’ is received and recorded by [Wolf] or
by [West Bend], whichever comes first.” West Bend is therefore liable to pay the
judgment against Wolf only if West Bend received notice of LeCuyer’s claim according
to the policy’s preconditions.
LeCuyer must carry the burden here. We apply general principles of contract
interpretation to insurance policies. Lobeck v. State Farm Mut. Auto. Ins. Co., 582
N.W.2d 246, 249 (Minn. 1998). We construe the policy as a whole and give effect to the
plain and ordinary meaning of its terms. Midwest Family Mut. Ins. Co. v. Wolters, 831
N.W.2d 628, 636 (Minn. 2013). And the party asserting coverage must establish a prima
facie case that the policy applies. Eng’g & Const. Innovations, Inc. v. L.H. Bolduc Co.,
825 N.W.2d 695, 705 (Minn. 2013). LeCuyer has not met this burden.
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The policy was written to be effective for one year beginning July 25, 2008, but
West Bend asserts that it cancelled Wolf’s policy October 16, 2008, for nonpayment of
premiums. LeCuyer argues that the policy remained effective because West Bend failed
to conform to statutory cancellation requirements. The record does not establish
LeCuyer’s argument that West Bend’s efforts to cancel the policy were flawed, but we
need not decide the point. LeCuyer did not report her sexual harassment claim to West
Bend until her June 2011 letter. The claim was therefore not “reported to” West Bend
until almost two years after the policy ended on its own terms. Because the policy covers
only claims made and reported to West Bend “during the policy period or within thirty
. . . days thereafter,” the June 2011 notice was too late to trigger coverage.
LeCuyer argues that the language describing how to make a claim is ambiguous.
West Bend disagrees. We need not resolve the conflict. Even if the policy language
determining when a claim is made is unclear, the language about when a claim is
“[r]eported to” the insurer is not, and the policy requires both a claim and a report to the
insurer before coverage. The policy clearly does not cover any claims not reported to
West Bend within the policy period. Because neither Wolf nor LeCuyer reported the
claim to West Bend within the period mandated under the policy, the policy
unambiguously requires no coverage.
II
LeCuyer contends that Minnesota Statutes section 72A.201, subdivision 8(4)
(2012), which addresses unfair insurance settlement practices, bars West Bend from
denying coverage. But she did not raise this argument in any of her submissions to the
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district court, or at the summary judgment hearing. We generally do not consider issues
not raised and argued before the district court. Thiele v. Stich, 425 N.W.2d 580, 582
(Minn. 1988). LeCuyer’s argument that she has preserved the issue uses duct tape: she
maintains that although she never raised the issue in the district court and the district
court never decided the issue, the district court’s order nonetheless mentions the Eighth
Circuit case of Esmailzadeh v. Johnson & Speakman, 869 F.2d 422 (8th Cir. 1989), and
the Esmailzadeh case in turn does mention section 72A.201 in one of its footnotes. On
these attenuated links, LeCuyer implies that we should treat her present argument as
retroactively incorporated into the arguments she actually made to the district court. We
decline.
III
LeCuyer’s final argument is that Minnesota law requires West Bend to cover the
judgment against Wolf because Wolf is bankrupt, insolvent, or dissolved. She bases this
argument solely on Minnesota Statutes section 60A.08, subdivision 6 (2012), which
specifies that all Minnesota insurance policies:
shall, notwithstanding anything in the policy to the contrary,
be deemed to contain the following condition:
The bankruptcy, insolvency, or dissolution of the insured
shall not relieve the insurer of any of its obligations under this
policy, and in case an execution against the insured on a final
judgment is returned unsatisfied, then such judgment creditor
shall have a right of action on this policy against the company
to the same extent that the insured would have, had the
insured paid the final judgment.
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LeCuyer urges that this statute embodies a public policy of guaranteeing insurance
coverage to individuals with claims against insolvent entities. West Bend’s insurance
contract contains a provision substantially similar to the statutory clause:
Subject to the exclusion in Section I, item C.8., the
bankruptcy or insolvency of the insured or of the insured’s
estate will not relieve us of our obligations under this policy.
Wolf’s insurance policy adheres to the law. But it does not require coverage. The statute
and Wolf’s insurance policy provide only that bankruptcy or insolvency will not relieve
West Bend of its obligations “under this policy.” It does not create any new obligations
beyond those required under the policy. Even if LeCuyer had presented evidence that
Wolf was bankrupt or insolvent when LeCuyer filed her lawsuit, the policy does not
impose coverage simply if Wolf is bankrupt or insolvent
Affirmed.
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