Opinion
No. C7-97-1994.
Filed April 28, 1998.
Appeal from the District Court, St. Louis County, File No. C095600062.
Thomas R. Thibodeau, Laura J. Schacht, Johnson, Killen, Thibodeau Seiler, (for appellant).
Gerald J. Brown, Brown, Andrew, Signorelli Zallar, P.A., (for respondent Sphere Drake).
Anthony S. Downs, Steven W. Schneider, Halverson, Watters, Downs, Reyelts Bateman, Ltd., (for respondent Michael Kane et al.).
James T. Martin, Dan T. Ryerson, Gislason, Martin Varpness, P.A., (for respondent Casualty Underwriters).
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1996).
UNPUBLISHED OPINION
Its liability coverage admittedly precluded because of a policy exclusion, appellant Azcon Corp. seeks recovery from its insurer and various agents, asserting, inter alia, violations of the Surplus Lines Insurance Act for failure to comply with its notice requirements. This appeal arises from the trial court's partial summary judgment dismissing the surplus-lines liability claim. We affirm.
FACTS
Appellant contracted with J.J. Holmes Enterprises as an independent contractor to prepare and deliver scrap metal that appellant purchased for resale. As required by appellant, J.J. Holmes' general liability policy listed appellant as an additional insured. In acquiring the insurance, Holmes dealt with the several respondents, leading ultimately to placement of the insurance with respondent Sphere Drake Ins., a company not authorized to engage in the insurance business in Minnesota except as a surplus lines insurer. The policy excluded losses caused by explosions. In November 1993, an explosion occurred, killing three J.J. Holmes employees.
Appellant was named a party in wrongful death and property damage actions and tendered the defense to Sphere Drake, who denied the duty to defend. Appellant sought judgment declaring that (a) Sphere Drake had a duty to defend and had breached its contract; (b) the other named respondents were negligent in procuring the requested insurance coverage; and (c) respondents were personally liable for violation of the Surplus Lines Insurance Act, Minn. Stat. §§ 60A.195-.209 (1996). The trial court found no genuine issue of material fact regarding the application of the Act.
DECISION
On appeal from summary judgment, we review the record to determine whether there are any genuine issues of material fact to be decided and whether the trial court erred in its application of the law. Offerdahl v. University of Minn. Hosps. Clinics , 426 N.W.2d 425, 427 (Minn. 1988). Statutory construction is a question of law subject to de novo review on appeal. Hibbing Educ. Ass'n v. Public Employment Relations Bd. , 369 N.W.2d 527, 529 (Minn. 1985).
Minn. Stat. § 60K.16 (1996) establishes that any person who participates in the sale of insurance for an unauthorized company "shall be personally liable for any loss the insured has sustained or may sustain" if the loss is one resulting from a risk or hazard (a) "covered in the issued policy," or (b) "which would have been covered if the policy * * * had been issued to the purchaser of the insurance."
Appellant acknowledged in oral arguments to this court that the first clause does not permit recovery in this case. It is evident on its face that this provision deals with situations of insolvency where a loss was incurred in spite of surplus lines coverage.
With respect to the second clause, appellant does not dispute that its basic impact is on situations where a policy was not issued due to fault of an agent or insurer. But appellant contends that (a) the meaning of the clause may be expanded to include situations where the policy was issued but liability was limited by an exclusion and (b) if notices had been given as required by the act, appellant might have demanded better coverage.
Appellant's argument fails first as a matter of fact. There is no evidence offered to indicate that proper notice would have produced a different result. Second, as a matter of law, there is nothing to suggest that the Act's notice requirements are aimed at the contents of a policy. Rather, the language of the Act makes it evident that it is aimed at protecting insureds (a) from the insolvency of surplus lines insurers that are not regulated by Minnesota's insurance laws and (b) from wrongdoing in the procurement of surplus lines coverage whereby premiums are paid but a policy is not written. See Molberg v. Marsden , 294 Minn. 493, 494, 200 N.W.2d 298, 299 (1972) (refusing to assume a legislative intent in plain contradiction to medical assistance lien statue where language of statute was "clear and unambiguous"). The scope of the statute is limited, and appellant's claims do not come within its liability provisions. Appellant's allegations may be pertinent to its negligence claims, but they are outside the scope of the surplus lines insurance provisions.
2. Other Issues.
Appellant contends that strict liability attaches under the Act for failure to comply with the notice requirements. There is no provision in the Act for strict personal liability and we cannot create one. See Maytag Co. v. Commissioner of Taxation , 218 Minn. 460, 463, 17 N.W.2d 37, 40 (1944) (statute enumerating affected persons or things implicitly excludes others). Personal liability only attaches for violation of the Act pursuant to Minn. Stat. § 60K.16.
Our decision is confined to the question of liability under the Surplus Lines Insurance Act. Neither the trial court nor this court has addressed the question of whether violations of the Act are relevant evidence in a determination of appellant's negligence claims.
Appellant also recites numerous fact issues that it asserts would circumvent summary judgment. While those same factual disputes might succeed in avoiding summary judgment of appellant's other claims, none are material with regard to the surplus lines insurance claim.
Finally, appellant moves to strike Michael Kane and Farm Bureau's brief. But the disputed facts stated in the brief are not dispositive to the issues before us, and accordingly we deny the motion to strike. See King v. One 1990 Cadillac Deville , 567 N.W.2d 752, 755 (Minn.App. 1997).