Opinion
No. 48851.
August 17, 1979.
Appeal from the District Court, Hennepin County, C. William Sykora, J.
Meagher, Geer, Markham, Anderson, Adamson, Flaskamp Brennan, and Gary M. Hagstrom, Minneapolis, for appellant.
Thomsen, Nybeck, Herbst Johnson, and Adrian E. Herbst, Edina, for respondent.
Heard before SHERAN, C. J., TODD and WAHL, JJ., and considered and decided by the court en banc.
This is an appeal from a judgment of the district court. Under the terms of a policy of insurance issued by Allstate Insurance Company to Twin City Biscuit Company, the insured was covered for loss of money, securities and other property through fraudulent or dishonest actions committed by employees to an amount not exceeding $10,000 for the period from July 25, 1971, to July 25, 1974. By the terms of an endorsement which was issued July 25, 1973, for an additional premium in the amount of $45.20 (subject to adjustment) the coverage afforded for such losses was increased from $10,000 to $50,000. It is agreed that losses were sustained by the insured during the period covered by the policy in the following amounts:
July 25, 1971 — July 25, 1972 12,200.66
July 25, 1972 — July 25, 1973 12,535.63
July 25, 1973 — December 4, 1973 4,686.66
The determination of the trial court as made in the original proceeding and supplemented upon remand following a prehearing conference order of this court dated May 19, 1978, raises two issues:
1) Whether the applicable limit of coverage afforded by the policy limits total liability for the entire policy period for all loss caused by a single employee or whether the limits of coverage applies separately to each annual period encompassed by the policy.
2) Whether the increase of coverage amount from $10,000 to $50,000 by the endorsement which became effective July 25, 1973, applies retroactively to the annual periods preceding that date.
1. The decision of this court in Columbia Heights Motors, Inc. v. Allstate Insurance Company, 275 N.W.2d 32 (Minn. 1979) dictates affirmance of the trial court's determination that the applicable coverage amount applies to each of the annual periods covered by the policy.
2. The trial court's determination that the increase in the coverage from $10,000 to $50,000 applies retroactively is reversed. The amendatory endorsement begins with this sentence:
"This endorsement amends the subject matter of this policy to the extent indicated, superseding such prior subject matter in conflict herewith.
* * * * * *
"2. Policy Period: From July 25, 1973 To July 25, 1974.
* * * * * *
"5. Other Changes:
The policy conditions for the term as shown in Item 2 have been extended in consideration of the following premium charges:" (Emphasis added)
The additional premium charge (subject to adjustment) of $45.20 is reflected at this point in the endorsement.
The use of the phrase "to the extent indicated" modifies the word "superseding" in the sentence set out above and therefore limits the increased coverage to the term specified, i. e., July 25, 1973, to July 25, 1974.
3. The effect of our decision is that the policy of insurance issued by Allstate Insurance Company affords coverage for the loss sustained by the Twin City Biscuit Company to the extent of $10,000 for the period from July 25, 1971, to July 25, 1972; to the extent of $10,000 for the period from July 25, 1972, to July 25, 1973; and to the extent of $4,686.66 for the loss sustained during the last year of the policy period — a total of $24,686.66. The balance of the loss sustained by the insured is not covered by the policy and, to this limited extent, the determination of the trial court is reversed.
Affirmed in part, reversed in part.
OTIS, J., took no part in the consideration or decision of this case.