No. C8-96-567.Minnesota Court of Appeals.
Filed August 13, 1996.
This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (1994).
Appeal from the District Court, St. Louis County, File No. C494601494.
Hubert H. Humphrey, III, Attorney General, Erica Jacobson, Asst. Attorney General, (for Appellant State).
Mark L. Knutson, Bye Boyd Agnew, Ltd., (for Respondent Independent School District No. 709).
Joseph B. Marshall, Douglas J. Schiltz, Marshall Associates, (for Respondent Scottsdale Insurance Company).
Considered and decided by Huspeni, Presiding Judge, Toussaint, Chief Judge, and Foley, Judge.[*]
UNPUBLISHED OPINION
HUSPENI, Judge.
Appellant insured claimed that respondent insurer had a duty to indemnify and defend. Respondent was awarded summary judgment dismissing the claims. Because we conclude that the occurrence for which appellant claimed indemnification and defense was specifically excluded from coverage, we affirm.
FACTS
The Duluth Area Vocational Technical Institute, then under the authority of Independent School District 709 (ISD 709), offered a Forest Harvesting Program for adult students. They learned the skills necessary for the logging industry by actually harvesting trees; any profit from the sale of the wood went to the program.
On January 25, 1986, ISD 709 received a binder from respondent Scottsdale Insurance Company, its insurer. In the blank marked “Description of Operation” were typed the words “General liability — Forest Harvesting Program at Duluth Area Vocational Technical Institute.” In the blank marked “Special Conditions/Other Coverages” were typed the words “ABSOLUTE PARTICIPANT’S EXCLUSION Endorsement applies to Forest Harvesting Students.”
ISD 709 later received the policy from Scottsdale; its effective dates were 1-25-86 to 1-25-87. The “Named Insured” was identified as a school district; the “Business of the Named Insured” was listed as “Logging
Lumbering.” Under “Description of Hazards” the words “Logging
Lumbering” appear in the blanks labelled “Premises- Operations” and “Completed Operations”; no other hazards are listed. On a page marked “Special Purpose Endorsement,” there is an X in the box before “Excluding Participants and Contestants.” This endorsement reads:
This insurance excludes:
(1) Bodily injury, sickness, or disease including death at anytime resulting therefrom, sustained by any person while:
(a) Participating in any activities, on behalf of the named insured (paid or unpaid).
(b) Practicing for or participating in contest or exhibition sponsored by the insured; or to immediate medical and surgical relief to any person so injured.
Cynthia Adams, a student participating in the Forest Harvesting Program, was injured on January 30, 1986. She sued ISD 709 in December 1987, alleging negligent instruction and supervision. Defense of the lawsuit was tendered to Scottsdale, which retained a Duluth law firm. Scottsdale withdrew from defense on the grounds that there was no coverage in January 1992. ISD 709 did not challenge the withdrawal and continued to be represented at its own expense by the law firm.
Following a December 1993 trial and subsequent proceedings, ISD 709’s liability (including interest) was determined to be $184,405. ISD 709 sought indemnification and the costs of defense from Scottsdale, which refused payment. ISD 709 brought a declaratory judgment action and moved for summary judgment. At the hearing, Scottsdale moved orally for summary judgment. This motion was granted and ISD 709’s complaint was dismissed.
DECISION
On an appeal from summary judgment, this court considers whether there are any genuine issues of material fact and whether the district court erred in its application of the law. State by Cooper v. French, 460 N.W.2d 2, 4 (Minn. 1990). “[T]he interpretation of insurance contract language is a question of law as applied to the facts presented.” Meister v. Western Nat’l Mut. Ins. Co., 479 N.W.2d 372, 376 (Minn. 1992). The issues presented here are therefore subject to de novo review.
1. The Plain Meaning of the Policy
The terms of an insurance contract must be given their plain and ordinary meaning. Columbia Heights Motors v. Allstate Ins. Co., 275 N.W.2d 32, 34 (Minn. 1979). The policy special endorsement explicitly excludes coverage for injuries sustained by one who is “[p]articipating in any activities, on behalf of the named insured * * *.” Appellant argues the presence of a conflict that must be construed against the insurer because the binder states that the “ABSOLUTE PARTICIPANT’S EXCLUSION
Endorsement applies to Forest Harvesting Students” while the policy itself does not contain similar language. We disagree. The language in the binder specifies one application of the endorsement; it does not conflict with the language of the policy.
A conflict cannot be read into a policy in order to construe it against the insurer; the policy must be construed as a whole.
Henning Nelson Const. Co. v. Fireman’s Fund Am. Life Ins. Co., 383 N.W.2d 645, 652 (Minn. 1986). We conclude that the plain meaning of this policy is that students participating in the Forest Harvesting Program were excluded from coverage.
Appellant argues that Adams was not excluded pursuant to the policy because she was not participating “on behalf of” ISD 709 but on behalf of herself as a student. It is undisputed that the proceeds of the logging and lumbering operation went to ISD 709:
Adams derived no financial benefit from the work she performed.
Therefore, appellant’s argument that the construction of “on behalf of” defeats coverage is specious: Adams’s participation was on behalf of the ISD 709 Forest Harvesting Program.
Appellant also contends that the district court erred in viewing ISD 709 as a business engaged in forest harvesting. The policy, however, repeatedly names as the insured not ISD 709 itself, but rather the ISD 709 Forest Harvesting Program; it also states that the entity insured was engaged in the business of logging and lumbering, not education, and that the hazard described in its premises operation was logging and lumbering.
Insofar as this insurance policy was concerned, the ISD 709 Forest Harvesting Program was the insured, and the plain meaning of the policy excluded students from coverage.
2. Ambiguity
Appellant argues that the phrase “on behalf of” is ambiguous and therefore the policy must be construed against the insurer so as to provide coverage. We disagree and find appellant’s reliance on Safeco Ins. Co. v. Lindberg, 394 N.W.2d 146 (Minn. 1986), to be misplaced. The policy in Safeco was clearly ambiguous:
The problem here, of course, is that the watercraft exclusion defies any commonsense interpretation; the word “renewal” is not used, and the words “policy,” “term” and “period” are not always used with precision.
Safeco, 394 N.W.2d at 148. Safeco is distinguishable because the policy provisions here, when read in their entirety, have no clearly ambiguous language. The injured student was unquestionably engaged in an activity “on behalf of” the named insured Forest Harvesting Program.
Appellant argues that the disagreement between itself and the district court as to the contract’s meaning is ipso facto evidence of ambiguity. Again, we disagree. Language must be reasonably subject to more than one interpretation to be ambiguous.
Reinsurance Ass’n of Minnesota v. Hanks, 539 N.W.2d 793, 796 (Minn. 1995). The phrases “participating in any activities, on behalf of the insured” in the policy and “ABSOLUTE PARTICIPANT’S EXCLUSION Endorsement applies to Forest Harvesting Students” in the binder do not conflict and are not reasonably subject to more than one interpretation. We are unpersuaded by appellant’s construction of the phrases to mean that only students acting as independent contractors or volunteer instructors are excluded from coverage.
3. Duty to Defend
Appellant cites Brown v. State Auto. Casualty Underwriters, 293 N.W.2d 822 (Minn. 1980), to argue that even if respondent had no obligation to indemnify, it nevertheless had an obligation to defend because at least part of Adams’s action was arguably within the scope of coverage. However, if the insurer has knowledge from facts dehors the Complaint that the acts giving rise to the suit are outside the coverage of the policy, there is no duty to defend.
Farmers Merchants State Bank of Pierz v. St. Paul Fire
Marine Ins. Co., 309 Minn. 14, 18, 242 N.W.2d 840, 843 (1976). Here, Scottsdale knew that Adams was a student in the Forest Harvesting Program who was injured while participating in the program, and that students were excluded from coverage. There was no duty to defend.
Because we conclude that the plain meaning of the policy excludes students from coverage, we see no ambiguity and no duty to indemnify or to defend.
Affirmed.
The Duluth Area Technical Vocational Institute is now known as the Lake Superior College. The State of Minnesota brings this appeal on behalf of Lake Superior College because the State acquired the duties, responsibilities, and properties of the Minnesota technical colleges in July 1995. ISD 709 takes no part in the appeal, but says its interests are identical to those of the State.
A binder is “A payment or written statement making an agreement legally binding until the completion of a formal contract, especially an insurance contract.” The American Heritage Dictionary of the English Language 187 (3rd ed. 1992).