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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: Aug 3, 2007 — Minneapolis, MN
During the week of August 3, 2007, the Minnesota appellate courts released opinions on the following topics that may be of interest to our clients:
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1. DECLARATORY JUDGMENT - COMBINED LEGAL AND EQUITABLE CLAIMS
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When a case involves both legal and equitable claims, essential factual issues common to both must first be tried to a jury, and the court is bound by those factual determinations.
Plaintiff tenant sued defendant landlord for breach of contract, unjust enrichment, and intentional interference with contractual relations and declaratory relief. According to the lease, defendant agreed to lease plaintiff space in its general office building for use as a telecommunication equipment room. The lease provided that upon written notice to and consent from defendant, plaintiff would be allowed to interconnect its communications equipment with other telecommunications carriers outside defendant’s general office building. After repeated requests by plaintiff, defendant refused to allow plaintiff permission to run the cable which would allow it to connect with outside carriers and insisted that plaintiff would have to negotiate another agreement and pay another fee in order to run the cable.
At trial, the jury returned a verdict for defendant on the legal claims. The jury also returned an advisory verdict as to the claims for equitable relief, finding that plaintiff was not entitled to run the cable under the lease at issue and that there was no inequitable conduct by defendant. The district court entered judgment for defendant on the legal claims, but made its own findings that plaintiff was entitled to equitable relief. The court of appeals affirmed. The Minnesota Supreme Court reversed, finding that, (1) when a case involves both claims at law and claims for equitable relief, any essential factual issues that are common to both must first be tried to a jury, and (2) the court is bound by the jury’s determination of factual issues common to both the legal and equitable claims.
In so holding, the Court reasoned that the Minnesota Constitution guarantees essentially the same jury trial rights as that guaranteed under the Seventh Amendment of the U.S. Constitution and that making a jury’s findings on facts common to both legal and equitable claims binding on the district court would protect the right to a jury as well as prevent inconsistent decisions between legal and equitable claims, thus preserving the integrity of the judiciary.
Onvoy, Inc. v. ALLETE, Inc., Minnesota Supreme Court, No. A05-1497, August 2, 2007.
2. ANTITRUST - FACTORS ARTICULATED IN ASSOCIATED GENERAL CONTRACTORS OF
CALIFORNIA V. CALIFORNIA COUNCIL OF CARPENTERS, 459 U.S. 519 (1983),
ARE NOT THE BENCHMARK OF STANDING UNDER MINNESOTA ANTITRUST LAW
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Minn. Stat. § 325D.57 confers the right to sue on “any person . . . injured directly or indirectly by a violation of [Minnesota Antitrust law],” and is not limited by the five factors articulated by the U.S. Supreme Court in Associated General Contractors of California v. California Council of Carpenters (“AGC”).
Plaintiff consumer brought a class action lawsuit against defendant manufacturers of rubber-processing chemicals, alleging that she paid more for tires as a result of defendants’ price-fixing conspiracy. The district court granted defendants’ motion to dismiss, holding that plaintiff lacked standing because she failed to meet the factors articulated by the U.S. Supreme Court in the AGC case. The court of appeals affirmed, holding that plaintiff lacked standing because she was neither a consumer nor a competitor in the “market restrained by the alleged antitrust violation.”
The Minnesota Supreme Court reversed and remanded, holding that (1) the federal standards set forth in AGC do not determine standing under Minnesota antitrust law, and (2) plaintiff had standing under the broad language of Minn. Stat. § 325D.57 (Minnesota Antitrust Law of 1971).
The Court held that the federal factors could not serve as “across the board” rules and that failure to meet any of the federal factors should not be determinative of a party’s standing under Minnesota law because the Minnesota statute contains language which provides a broader basis for standing than that provided by federal law.
While the Court acknowledged that courts should strive to interpret Minnesota antitrust law consistently with federal antitrust law in order to allow for predictable and uniform standards of conduct, Minnesota is not required to abide by federal standing requirements.
Lorix v. Crompton Corp., Minnesota Supreme Court, No. A05-2148, August 2, 2007.
3. INSURANCE - UNDERINSURED-MOTORIST COVERAGE
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A “reducing clause” in an insurance policy that purports to reduce the amount payable for underinsured motorist benefits for payments made by an insurer pursuant to a liability policy covering another at-fault, underinsured driver violates Minn. Stat. § 65B.49, subd. 4(a) and is unenforceable.
Plaintiff was injured when her husband’s motorcycle collided with a truck. Both the husband and the truck driver conceded responsibility for the collision. Plaintiff, a named insured under her husband’s policy, settled with her husband for the limits of their liability policy, and settled with the truck driver for the limits of his liability policy. These settlements did not fully compensate plaintiff’s injuries, and plaintiff submitted a claim to her husband’s insurer for Underinsured Motorist (“UIM”) benefits, for the policy limit of $250,000. The defendant insurer denied plaintiff’s claim pursuant to the policy’s reducing clause, which provided that “[a]mounts payable will be reduced by: (1) a payment made by the owner or operator of the ... underinsured motor vehicle, or organization which may be legally liable; [and] (2) a payment under the Liability Coverage or Personal Injury Protection Coverage of this policy[.]” Because defendant had already paid plaintiff the $250,000 liability policy limit, it argued that her UIM benefits were reduced by $250,000, and she could recover nothing.
Plaintiff sued the defendant insurer, and the district court granted summary judgment in favor of defendant, holding that reducing clauses are enforceable under established law preventing the conversion of first-party liability coverage into additional and generally more expensive third party liability coverage. The Court of Appeals reversed, holding that the reducing clause violated Minn. Stat. § 65B.49 and was unenforceable.
The Court acknowledged that established case law does allow enforcement of reducing clauses in some cases. The Court distinguished those cases from the current case.
Plaintiff here was not seeking UIM benefits from her husband’s insurer on the premise that her husband’s vehicle was underinsured. Instead, she sought UIM benefits on the basis that the other at fault driver was underinsured. Under this scenario, defendant’s reducing clause violated Minn. Stat. § 65B.49, subd. 4a, which provides that:
With respect to underinsured motorist coverage, the maximum liability of an insurer is the amount of damages sustained but not recovered from the insurance policy of the driver or owner of any underinsured at fault vehicle. If a person is injured by two or more vehicles, underinsured motorist coverage is payable whenever any one of those vehicles meets the definition of underinsured motor vehicle defined in Section 65B.43, subd. 17.
Mitsch v. American National Property and Casualty Company, Minnesota Court of Appeals, No. A06-1626, July 31, 2007.
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C. Lundberg, C. Morris, K. Putney, R.A. Williams, |
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Janine M. Luhtala |