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Bassford Remele is a full service litigation firm located in Minneapolis, Minnesota. Founded in 1882, the firm represents local, national and international clients in all areas of civil litigation and dispute resolution.
Case Law Update
Date: June 20, 2008 — Minneapolis, MN
During the week of June 20, 2008, the Minnesota appellate courts released an opinion on the following topic that may be of interest to our clients:
HOMEOWNER’S INSURANCE – PROBABLE CAUSE UNDER THE GARNISHMENT STATUTE
- When the material facts are not in dispute, determination of probable cause in a garnishment action is reviewed by the appellate courts de novo.
- To demonstrate probable cause in a garnishment action, a creditor must allege facts that show that it is possible that a garnishee is liable for the debt and must support those facts with evidence that fairly and reasonably tends to show the existence of the facts alleged.
Plaintiff sought damages as a result of a dog bite that occurred at the dog’s owner’s home. Plaintiff and the homeowner entered into a Miller-Shugart settlement under which plaintiff agreed to collect the settlement from the homeowner’s insurer. Based on the settlement agreement, the district court ordered that judgment be entered in plaintiff’s favor in the amount of $300,000. Plaintiff filed a garnishment summons against the insurer. The insurer claimed that plaintiff was a resident of the home where the bite occurred and thus was excluded from coverage for bodily injury. Plaintiff then brought a motion to file a supplemental complaint to add the insurer as a party and for leave to file and serve a supplemental complaint. The district court denied plaintiff’s motion finding that she failed to establish probable cause that her injury was covered by the homeowner’s insurance policy.
Reviewing the district court’s findings de novo, the court of appeals reversed holding that evidence of residency which was “evenly divided” was sufficient to establish that plaintiff was not a resident and thus was covered by the homeowner’s insurance policy. The Minnesota Supreme Court affirmed.
Distinguishing the deferential standard applicable to a court’s findings of fact where the facts are in dispute, the Court held that the determination of probable cause in a garnishment action is properly reviewed de novo when the material facts are not in dispute. The Court also held that whether probable cause for the garnishment action exists depends on whether the evidence establishes that the garnishee might be liable. Because plaintiff submitted sufficient evidence to show she might not be a resident and her claim would be covered, the insurer was properly subject to the garnishment action and plaintiff was entitled to add the insurer as a party.
McGlothlin v. Steinmetz, A06-1016 (Minn. 06/19/08).
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