Mickelson v. American Family Mutual Insurance Co.
1983 Minn. LEXIS 1038, 329 N.W.2d 814 (1983)
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Rule of Law:
Under Minnesota's No-Fault Automobile Insurance Act, a vehicle owner fails to have the required "security in effect" if they are not an insured under the policy covering their vehicle, thereby disqualifying them from receiving benefits through the assigned claims plan.
Facts:
- Jeffory W. Mickelson owned a 1972 Ford pick-up truck but did not personally maintain any insurance policy.
- Mickelson lived with Carol Rose Mueller for seven years, sharing income and expenses, but they were not married or otherwise related.
- Mueller obtained an automobile insurance policy from American Family Mutual Insurance Company, listing Mickelson's truck as the described vehicle and herself as the named insured.
- In the insurance application, Mueller misrepresented that she was the owner and sole operator of the truck and that no driver had a history of traffic violations or license suspensions.
- In reality, Mickelson had a very poor driving record, including seven moving violations and a license suspension.
- On November 14, 1980, while a pedestrian, Mickelson was struck and injured by an automobile owned by an uninsured driver.
Procedural Posture:
- American Family Mutual Insurance Company denied Jeffory W. Mickelson's claim for basic economic loss benefits.
- Mickelson then applied to the Minnesota Automobile Assigned Claims Bureau, which assigned his claim to Mutual Service Casualty Insurance Company.
- Mutual Service denied Mickelson's claim, asserting he was disqualified from benefits.
- Mickelson sued both American Family and Mutual Service in district court (trial court).
- On cross-motions for summary judgment, the district court ruled in favor of American Family against Mickelson, but in favor of Mickelson against Mutual Service.
- Mutual Service appealed the judgment against it to the Minnesota Supreme Court, and Mickelson sought review of the judgment for American Family.
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Issue:
Does a motor vehicle owner who is not a named insured on the policy covering their vehicle, and thus is not personally covered for injuries sustained as a pedestrian, fail to have the required "security in effect" under Minn. Stat. § 65B.64, subd. 3, thereby disqualifying them from receiving benefits through the assigned claims plan?
Opinions:
Majority - Coyne, Justice
Yes. An owner fails to have the required security in effect when they are not an insured under the plan covering their vehicle, disqualifying them from the assigned claims plan. The Minnesota No-Fault Act implicitly requires that the owner of a vehicle be the named insured on the policy covering that vehicle to ensure they receive the full scope of personal injury protection. The purpose of the Act is to compel owners to secure basic economic loss benefits for themselves, not merely to have a policy placed on the vehicle. Because Mickelson was not Mueller's spouse or relative, he was not an 'insured' under the American Family policy for the type of pedestrian accident he suffered. Since the policy on his own truck did not provide him with the comprehensive personal protection required by the Act, he 'failed to have such security in effect' under § 65B.64, subd. 3, and is therefore ineligible for benefits from the assigned claims plan. To allow him to recover would subvert the legislative intent and reward the purposeful misrepresentations made to avoid higher insurance premiums associated with his poor driving record.
Dissenting - Scott, Justice
No. An owner whose vehicle is covered by a valid insurance policy has the required 'security in effect' and is not disqualified from the assigned claims plan. The plain language of Minn. Stat. § 65B.64, subd. 3, only requires that 'security be in effect' for the vehicle; it does not explicitly state that the owner must be a named insured on that policy. The majority improperly reads a new requirement into the statute. Mickelson's truck was admittedly insured by American Family at the time of the accident. The assigned claims plan was designed precisely for individuals like Mickelson: a pedestrian, without personal no-fault coverage, who was injured by an uninsured motorist. The majority's decision punishes Mickelson for Mueller's misrepresentations and creates a confusing precedent.
Analysis:
This decision clarifies that under Minnesota's No-Fault Act, the statutory duty for an owner to maintain 'security' is a personal obligation to insure oneself, not just the vehicle. The court effectively merged the status of 'owner' and 'named insured' for purposes of satisfying the compulsory insurance law. This prevents vehicle owners, particularly high-risk drivers, from circumventing their obligations and higher premiums by having a lower-risk individual insure the vehicle in their name. The ruling reinforces the principle that the assigned claims plan is a safety net for those without access to coverage, not a backstop for those who fail to properly secure their own required insurance.
