STATE OF MINNESOTA
IN COURT OF APPEALS
A15-1267
Paek Saengkeo,
Respondent,
vs.
Minnesota Automobile Assigned Claims,
Appellant.
Filed April 4, 2016
Reversed
Stauber, Judge
Bjorkman, Judge, dissenting
Olmsted County District Court
File No. 55CV144128
Raymond L. Hansen, O’Brien & Wolf, L.L.P., Rochester, Minnesota (for respondent)
Timothy J. Eiden, Nicole R. Wells, Eiden & Hatfield, L.L.C., Lake Elmo, Minnesota (for
appellant)
Considered and decided by Connolly, Presiding Judge; Stauber, Judge; and
Bjorkman, Judge.
SYLLABUS
Under Minn. Stat. § 65B.64, subd. 3 (2014), the assigned claims plan, an injured
passenger of an uninsured vehicle is not entitled to economic loss benefits if the injured
passenger is dwelling with a family member who is an uninsured owner of a vehicle that
must be insured under Minn. Stat. § 65B.48 (2014), unless there is clear and convincing
evidence that the owner did not contemplate the use or operation of his or her uninsured
vehicle by anyone.
OPINION
STAUBER, Judge
On appeal from summary judgment in favor of respondent-injured passenger,
appellant-insurer argues that the district court erred by finding respondent eligible for
economic loss benefits under the Minnesota Automobile Assigned Claims Plan (assigned
claims plan) because respondent’s brother, with whom respondent resided, failed to
maintain insurance on a vehicle that he co-owned with his former girlfriend. We reverse.
FACTS
On August 15, 2010, respondent Paek Saengkeo was injured while he was a
passenger in an uninsured vehicle owned and operated by a third party. At the time of the
single-car accident, respondent was living with his brother and three friends, and he did not
own a vehicle or have a driver’s license.
Because there was no insurance policy in effect under which no-fault benefits could
be paid, respondent applied for coverage through appellant Minnesota Automobile
Assigned Claims Bureau (MAACB). MAACB then transferred respondent’s claim under
the assigned-claims plan to appellant American Family Insurance. Appellant denied
respondent’s coverage request under Minn. Stat. § 65B.64, subd. 3, because respondent’s
brother (brother) resided in the same household as respondent and was an uninsured co-
owner of a motor vehicle, a 2002 Ford Explorer. Respondent subsequently filed this action
in district court seeking declaratory relief. The complaint alleged that respondent qualified
for coverage under the assigned-claims plan because although brother “held legal title to a
2
motor vehicle along with his former girlfriend [girlfriend] at the time of the . . . accident, . . .
[girlfriend] was in fact the sole owner of the uninsured vehicle.”
The parties brought cross motions for summary judgment on stipulated facts. The
parties agreed that brother was involved in a relationship with girlfriend from 2005 to 2009.
In 2008, brother and girlfriend co-signed a loan for the purchase of the Ford Explorer.
Although brother was listed as the co-owner on the vehicle’s title, the intent was for
girlfriend to own the vehicle; she made the down payment of $2,000 as well as the monthly
loan and insurance payments without assistance. Brother drove the vehicle only a few times
with girlfriend’s permission.
Brother and girlfriend ended their relationship in August 2009. Shortly thereafter,
respondent moved in with brother and communication between brother and girlfriend
ceased. Girlfriend maintained possession of the Ford Explorer, and brother had no access to
the vehicle. On the date of the accident, girlfriend alone insured the vehicle through
American Family Insurance.
The district court granted respondent’s motion for summary judgment and
declaratory relief. The district court found that under Minn. Stat. § 65B.64, subd. 3, the
“issue before the court is whether [brother] ‘contemplated’ use of his former girlfriend’s
vehicle at the time of the accident.” The district court determined that because brother “did
not contemplate use of [girlfriend’s] vehicle at the time of the accident,” he “was not
required to insure the vehicle within the purview of the Minnesota No-Fault Automobile
Insurance Act.” Thus, the district court concluded that respondent was qualified “to receive
economic benefits under the assigned claims plan.” This appeal followed.
3
ISSUE
Did the district court err by granting summary judgment to respondent on the basis
that respondent is qualified to receive economic benefits under the assigned claims plan
because respondent’s brother was not required to insure his vehicle since he did not
contemplate the use or operation of the vehicle?
ANALYSIS
Summary judgment is appropriate if “there is no genuine issue as to any material fact
and . . . either party is entitled to judgment as a matter of law.” Minn. R. Civ. P. 56.03. We
review the district court’s summary judgment decision de novo to determine whether
there are genuine issues of material fact and whether the district court erred in its
application of the law. Ruiz v. 1st Fid. Loan Servicing, LLC, 829 N.W.2d 53, 56 (Minn.
2013). A de novo standard of review also applies to a district court’s interpretation of a
statute. Premier Bank v. Becker Dev., LLC, 785 N.W.2d 753, 758 (Minn. 2010).
The No–Fault Act requires that every Minnesota automobile owner maintain a
“plan of reparation security,” with specific, statutorily set minimum benefits, including
liability coverage. Minn. Stat. § 65B.48, subd. 1; see also Minn. Stat. § 65B.49, subd.
3(1) (2014) (setting forth the minimum coverage required). But when the No-Fault Act
was passed, it became apparent that some injured persons would not be covered because
of age or lack of car ownership. Mohs v. Parrish’s Bar, 418 N.W.2d 494, 496 (Minn.
1988). As a result, the legislature created the assigned claims plan as a “gap closing”
device that was “designed to provide these individuals basic economic loss benefits.” Id.
4
“The purpose of these gap closing provisions is to provide innocent non-insureds with at
least some protection” under the No-Fault Act. Id.
The assigned claims plan provides that, as long as specific criteria are satisfied,
certain individuals have the right to basic economic loss benefits even though there is no
identified insurance policy that provides for coverage. Minn. Stat. § 65B.64, subd. 1
(2014). But Minnesota law disqualifies any vehicle owner who fails to insure the vehicle
from participating in the assigned claims plan. See Minn. Stat. § 65B.64, subd. 3.
Minnesota law also disqualifies from the assigned claims plan “[p]ersons, whether or not
related by blood or marriage, who dwell and function together with the owner [of an
uninsured vehicle] as a family.” Id. These provisions do not apply if the owner of the
uninsured vehicle demonstrates by clear and convincing evidence “to have [not]
contemplated the operation or use of the vehicle.” Id.
The No-Fault Act defines the owner of a vehicle as “a person, other than a
lienholder or secured party, who owns or holds legal title to a motor vehicle or is entitled
to the use and possession of a motor vehicle subjected to a security interest held by
another person.” Minn. Stat. § 65B.43, subd. 4 (2014) (emphasis added). It is undisputed
that respondent lived with his brother, a family member, and that brother is a title-holder
of the Ford Explorer. Thus, brother is an owner of the vehicle for purposes of the No-
Fault Act. But the district court concluded that respondent is “eligible to receive benefits
under the assigned claims plan” because brother did not contemplate using the Ford
Explorer he co-owned with his ex-girlfriend and, therefore, he “was not required to insure
the vehicle” under the No-Fault Act.
5
Appellant argues that the “district court erred in its analysis that the issue before
the court was whether . . . brother contemplated use of the vehicle he unquestionably co-
owned.” Instead, appellant claims that when Minn. Stat. § 65B.64, subd. 3, is read in
conjunction with Minn. Stat. § 65B.48, subd. 1, the issue is “whether any owner
contemplated the use of the motor vehicle at the time of the accident.”
The issue presented by appellant is one of statutory construction. The object of
statutory interpretation is to ascertain and effectuate the intention of the legislative body.
Minn. Stat. § 645.16 (2014). In doing so, we first determine whether the statute’s
language, on its face, is ambiguous. Am. Tower, L.P. v. City of Grant, 636 N.W.2d 309,
312 (Minn. 2001). A statute is ambiguous if it is subject to more than one reasonable
interpretation. Amaral v. The Saint Cloud Hosp., 598 N.W.2d 379, 384 (Minn. 1999).
Words and phrases are construed according to their plain and ordinary meanings.
Frank’s Nursery Sales, Inc. v. City of Roseville, 295 N.W.2d 604, 608 (Minn. 1980); see
also Minn. Stat. § 645.08(1) (2014) (providing that words and phrases are construed
according to their common usage). When the legislature’s intent is clearly discernible
from a statute’s plain and unambiguous language, we interpret the language according to
its plain meaning without resorting to other principles of statutory construction. City of
Brainerd v. Brainerd Invs. P’ship, 827 N.W.2d 752, 755 (Minn. 2013).
Minn. Stat. § 65B.64 (2014) is entitled: “Persons Entitled To Participate In
Assignment Claims Plan.” Subdivision three of that section contains the
“Disqualification” language. Minn. Stat. § 65B.64, subd. 3. The relevant language
provides: “For purposes of determining whether security is required under section
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65B.48, an owner of any vehicle is deemed to have contemplated the operation or use of
the vehicle at all times unless the owner demonstrates to the contrary by clear and
convincing evidence.” Id. Under the plain language of this subdivision, the owner of a
vehicle may rebut the presumption that the owner is required to maintain insurance on the
vehicle by showing that use of the vehicle was not contemplated. The question before us
is whether that presumption is rebutted if the owner demonstrates that (1) the owner did
not contemplate using the vehicle or (2) the owner did not contemplate use of the vehicle
by anyone.
Respondent argues that three cases interpreting Minn. Stat. § 65B.64, subd. 3,
support his position that he is entitled to coverage under the assigned claims plan because
the statute merely requires him to show that brother did not contemplate using the
vehicle. In the first case, LaBrosse v. Aetna Casualty & Sur. Co., 383 N.W.2d 736, 737
(Minn. App. 1986), the plaintiff purchased a vehicle and then drove it for several months
without insurance. After the plaintiff could not start his vehicle one cold day, he left the
vehicle on the street in front of his house. Id. Four days later, while the vehicle was still
inoperable, the plaintiff was injured while riding in another’s uninsured vehicle. Id. On
appeal, this court concluded that the plaintiff was not entitled to economic benefits under
the assigned claims plan. The court reasoned that “[a]lthough [the plaintiff’s] car was no
longer available for actual use, there is no indication in his activities before the accident
that he was not considering future use of the vehicle if and when it could be repaired.”
Id. at 738.
7
In the second case, Kvitek v. State Farm Mut. Auto Ins. Co., the plaintiff was
injured while a passenger in another’s uninsured automobile. 438 N.W.2d 425, 426
(Minn. App. 1989), review denied (Minn. June 21, 1989). At the time of the accident, the
plaintiff owned an uninsured vehicle because his insurance was canceled after his driver’s
license had been revoked. Id. The plaintiff claimed that as a result of his license
revocation and insurance cancelation, he gave the vehicle to his father to sell. Id. The
plaintiff’s father testified that the vehicle was then parked in a parking lot with a “for
sale” sign and that “no one would have been allowed to test drive” the vehicle “because
of insurance considerations.” Id. On appeal from the denial of benefits under the
assigned claims plan, this court reversed and remanded because there was a “fact issue of
whether [the plaintiff] contemplated further use of the [vehicle].” Id. at 428.
Finally, in Harris v. Am. Family Mut. Ins. Co., 480 N.W.2d 690, 691 (Minn. App.
1992), review denied (Minn. Mar. 26, 1992), the plaintiff’s vehicle began having
mechanical problems shortly after she purchased it. Because she decided that she could
no longer use the vehicle, the plaintiff parked the vehicle in her apartment garage until
she could repair it, allowing the insurance to lapse. Id. The plaintiff was subsequently
injured in an automobile accident while driving an uninsured vehicle owned by her
fiancé. Id. at 690-91. On appeal from the denial of coverage under the assigned claims
plan, this court reasoned that the insurer’s position that plaintiff was not entitled to
benefits “presumes mere ownership of vehicle, without the owner contemplating the
vehicle’s operation or use, is sufficient to require insurance to be purchased.” Id. at 692.
The court then concluded that because there was no evidence that the plaintiff
8
contemplated the vehicle’s operation or use while it was unrepaired and in storage, she
was entitled to coverage under the assigned claims plan. Id.
Although LaBrosse, Kvitek, and Harris, all iterate that insurance is not required if
an owner of a vehicle does not contemplate the vehicle’s use, the language used in those
cases fails to differentiate between whether insurance is required (1) only if the owner
contemplated using the vehicle or (2) if the owner contemplated the vehicle’s use by
others. For example, in reversing and remanding, this court in Kvitek stated that there
was a fact issue as to “whether [the plaintiff] contemplated further use of his [vehicle].”
438 N.W.2d at 428. But in the very next sentence, this court phrased the issue on remand
as “whether use of [the plaintiff’s vehicle] was contemplated.” Id. And in Harris, this
court concluded that “the time during which a vehicle is intentionally put in storage, and
not some future time when the vehicle may be repaired, is the relevant time period for
determining if the vehicle’s use or operation is contemplated.” 480 N.W.2d at 692
(emphasis added). But the court went on to state that there was “no evidence that, while
[the plaintiff’s vehicle] was in storage and unrepaired, [the plaintiff] contemplated its
operation or use.” Id. (emphasis added). Consequently, the cases cited by respondent
do not definitively resolve the issue, and no other binding authority construes the relevant
statutory language.
Nonetheless, we conclude that the issue is resolved by the plain language of the
assigned claims plan. In setting forth the basis for disqualification of coverage under the
assigned claims plan, section 65B.64, subdivision 3 specifically references section
65B.48, and premises the disqualification of economic loss benefits on the failure to
9
insure as “required” by that statute.1 See Minn. Stat. § 65B.64, subd. 3 (stating that “[f]or
purposes of determining whether security is required under section 65B.48”). Moreover,
LaBrosse, Kvitek, and Harris each refer to Minn. Stat. § 65B.48, subd. 1, to determine if
the plaintiffs were disqualified from benefits under the assigned claims plan due to their
failures to maintain insurance.2 Thus, a determination of whether respondent is entitled
to benefits under the assigned claims plan ultimately rests on whether his brother was
required to insure his vehicle as set forth in Minn. Stat. § 65B.48, subd. 1.
Minn. Stat. § 65B.48, subd. 1 provides in relevant part:
Every owner of a motor vehicle of a type which is
required to be registered or licensed or is principally garaged
in this state shall maintain during the period in which operation
or use is contemplated a plan of reparation security under
provisions approved by the commissioner, insuring against
loss resulting from liability imposed by law for injury and
property damage sustained by any person arising out of the
ownership, maintenance, operation or use of the vehicle.
1
At the time Harris was decided, Minn. Stat. § 65B.64, subd. 3 (1986) stated:
A person shall not be entitled to basic economic loss
benefits through the assigned claims plan with respect to injury
which was sustained if at the time of such injury the injured
person was the owner of a private passenger motor vehicle for
which security is required under section 65B.41 to 65B.71 and
that person failed to have such security in effect. Members of
the owner’s household other than minor children shall also be
disqualified from benefits through the assigned claims plan.
The paragraph discussing whether the owner of a vehicle contemplated the vehicle’s use
or operation was not added to section 65B.64, subdivision 3 by the legislature until 1990.
See 1990 Minn. Laws ch. 456, § 2, at 457.
2
The relevant language in the current version of section 65B.48, subdivision 1 remains
unchanged from the versions in effect at the time LaBrosse, Kvitek, and Harris were
decided. Compare Minn. Stat. § 65B.48, subd. 1 (2014) with Minn. Stat. § 65B.48, subd.
1 (1986).
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The plain language of section 65B.48, subdivision 1 states that an owner of a
vehicle is required to maintain insurance “during the period in which operation or use [of
the vehicle] is contemplated.” Id. This language is clear. It does not state that an owner
is required to maintain insurance if the owner “contemplates his or her use or operation of
the vehicle.” Rather, the statute requires the owner of a vehicle to maintain insurance on
the vehicle if the owner contemplates that anyone will use or operate the vehicle. See id.
Although we acknowledge that the purpose of the assigned claims plan may be to provide
coverage to respondent, the plain language of section 65B.48, subdivision 1 indicates that
the unique facts of this case prevent respondent from being entitled to coverage. And it is
well settled that this court will not re-write an unambiguous statute to conform to what
may be the legislature’s intent. See, e.g., Frederick Farm, Inc. v. Cty. of Olmsted, 801
N.W.2d 167, 172 (Minn. 2011) (stating that an appellate court cannot “add words to a
statute ‘that are purposely omitted or inadvertently overlooked’ by the Legislature”
(quoting Premier Bank v. Becker Dev., LLC, 785 N.W.2d 753, 760 (Minn. 2010)).
Accordingly, we conclude that under the plain language of Minn. Stat. § 65B.48, subd. 1,
respondent’s brother, as a vehicle owner, was required to maintain insurance on the Ford
Explorer as long as use of the vehicle was contemplated by anyone.
The record reflects that use of the Ford Explorer was contemplated at the time of
the accident; girlfriend was using the Explorer, and the last time brother communicated
with girlfriend, he knew that she was using the vehicle. If brother had any question about
the vehicle’s use or whether he should maintain insurance on the vehicle, he could have
removed his name from the title to ensure that he was not a legal owner of the Ford
11
Explorer. He did not. Because he remained an owner of the vehicle, and use of the
vehicle was contemplated at the time of the accident, brother was required to maintain
insurance on the Explorer under section 65B.48, subdivision 1. The district court erred
by concluding that respondent was not disqualified from benefits under the assigned
claims plan because respondent’s brother failed to insure the vehicle he owned.
DECISION
A person is not entitled to economic benefits under the assigned-claims plan if the
person is dwelling with a family member who is an owner of an uninsured vehicle unless
the owner demonstrates that the owner was not required to maintain insurance on the
vehicle because use of the vehicle was not contemplated by anyone. Because respondent
was living with his brother, who was the co-owner of a vehicle that he did not insure, and
brother’s former girlfriend was using the vehicle, respondent is not entitled to economic
loss benefits under the assigned claims plan. Accordingly, the district court erred by
denying appellant’s motion for summary judgment and granting respondent’s motion for
summary judgment and declaratory relief.
Reversed.
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BJORKMAN, Judge (dissenting)
I respectfully dissent. Because the undisputed record demonstrates that brother did
not contemplate using the 2002 Ford Explorer at the time of respondent’s accident, I
conclude that respondent is not disqualified from receiving economic-loss benefits under
the assigned claims plan and would affirm.
The facts relevant to brother’s ownership and contemplated use of the Explorer are
undisputed. At the time of respondent’s accident, brother held title to the Explorer, but had
not used or even had access to it for over a year. During that time, girlfriend had exclusive
use of the Explorer and obtained insurance for it, identifying herself as the sole named
insured. The parties agree that this is the relevant time period for purposes of determining
brother’s obligation to obtain insurance for the Explorer. On this record, evidence that
brother did not contemplate using the Explorer during the relevant time period is not just
clear and convincing, it is undisputed and conclusive.
Appellant, in essence, argues these facts are not determinative because Minn. Stat.
§ 65B.48, subd. 1 (2014) requires a vehicle owner to obtain insurance if the owner
contemplates anyone using the vehicle. This argument is at odds with the plain language
of Minn. Stat. § 65B.64, subd. 3 (2014) as well as our caselaw interpreting Minn. Stat.
§ 65B.48 (2014).
Although the broad language of Minn. Stat. § 65B.48, subd. 1, and the definition of
“owner” in Minn. Stat. § 65B.43, subd. 4 (2014), provide generally that every title holder
must obtain insurance for a vehicle when any use is contemplated, the more specific
language of Minn. Stat. § 65B.64, subd. 3, the provision under which appellant would deny
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coverage, must guide our analysis. In enacting Minn. Stat. § 65B.64, subd. 3,3 the
legislature created a specific standard and framework for determining the insurance
obligations of a vehicle owner in the context of disqualification from receiving benefits
under the assigned claims plan. This standard focuses on whether “an owner” contemplates
use of the vehicle rather than whether “every owner” contemplates such use as the broader
statute, Minn. Stat. § 65B.48, subd. 1, provides. I am persuaded that this distinction makes
a difference.
By using the term “an owner,” the legislature recognized that in situations involving
co-owners, it is possible that each owner may have his own contemplation as to the
vehicle’s usage. This case exemplifies this situation. Brother was “an owner” of the
Explorer during the relevant time period, but he demonstrated by undisputed evidence that
he did not contemplate using the vehicle during that time. Girlfriend was also “an owner”
during the relevant time period, and she clearly contemplated and actually used the vehicle
during that time. To the extent “an owner” may be precluded from receiving benefits under
the assigned claims plan, girlfriend is that owner. Because the record demonstrates by clear
and convincing evidence that brother did not contemplate the use of the Explorer during
the relevant time period, respondent, as brother’s household member, is not disqualified
from participation in the assigned claims plan under Minn. Stat. § 65B.64, subd. 3.
3
“For purposes of determining whether security is required under section 65B.48, an
owner of any vehicle is deemed to have contemplated the operation or use of the vehicle at
all times unless the owner demonstrates to the contrary by clear and convincing objective
evidence.” Minn. Stat. § 65B.64, subd. 3.
D-2
Even before the relevant provision of Minn. Stat. § 65B.64, subd. 3 was effective,
in Harris v. Am. Family Mut. Ins. Co., 480 N.W.2d 690, 692 (Minn. App. 1992), review
denied (Minn. Mar. 26, 1992), this court rejected the argument that ownership of a vehicle,
in and of itself, triggers the obligation to obtain insurance under Minn. Stat. § 65B.48, subd.
1. Harris was injured while driving an uninsured motor vehicle owned by a friend. At the
time of the accident, Harris owned but was not using a vehicle that had multiple mechanical
issues. Harris had parked the vehicle in a garage and let the insurance coverage lapse until
such time as she was able to repair and use the vehicle. As here, American Family argued
that Harris was not entitled to benefits under the assigned claims plan because she failed to
insure her owned vehicle. The focus of our analysis was the legislature’s intent when
requiring an owner to obtain insurance during “the period in which operation or use is
contemplated.” Harris, 480 N.W.2d at 691. We concluded that the relevant time period
was when Harris intentionally put her vehicle into storage, not some future time when the
vehicle might be repaired and put back into use. And we held, on that record, that Harris
was not obligated to insure her vehicle—and thus not ineligible for benefits under the
assigned claims plan—during the relevant time period when her accident occurred.4 Here,
too, I would conclude that mere ownership, without contemplated use, is insufficient to
4
This court noted that the legislature amended Minn. Stat. § 65B.64, subd. 3 in 1990 to
permit vehicle owners to show they did not contemplate use of a vehicle for purposes of
the disqualification provision in the assigned claims plan. Harris, 480 N.W.2d at 692. But
we did not decide whether the amendment applied retroactively because our decision rested
on Minn. Stat. § 65B.48, subd. 1. Following Harris, the legislature further amended Minn.
Stat. § 65B.64, subd. 3 to proscribe the evidentiary standard an owner must meet to
establish that use of the owned vehicle is not contemplated—clear and convincing
evidence. Minn. Stat. § 65B.64, subd. 3 (1996).
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trigger an obligation to obtain insurance under Minn. Stat. § 65B.48, subd. 1, the violation
of which precludes participation in the assigned claims plan under Minn. Stat. § 65B.64,
subd. 3.
I agree with the majority that the assigned claims plan is designed to provide
innocent non-insureds with some degree of protection, Mohs v. Parrish’s Bar, 418 N.W.2d
494, 496 (Minn. 1988). Providing benefits to respondent would serve that purpose.
Respondent was not a licensed driver, did not own a vehicle (under any definition of
ownership), and was an innocent passenger when he was seriously injured. He had no
reason to obtain insurance. Nor as a practical matter did brother act irresponsibly by not
insuring girlfriend’s vehicle that he did not use and that girlfriend properly insured.
Moreover, permitting respondent to recover economic-loss benefits is consistent
with the public policy expressed in the Minnesota No-Fault Act. The act is designed to
“relieve the severe economic distress of uncompensated victims of automobile accidents”
by requiring automobile insurers to offer and vehicle owners to purchase insurance that
will cover basic economic loss. Minn. Stat. § 65B.42, subd. 1 (2014). Providing benefits
to respondent under the assigned claims plan honors both goals. Respondent receives
compensation for the medical expenses and other economic loss he sustained as a result of
the accident. And girlfriend fulfilled the requirement that the Explorer be insured under a
policy that includes economic-loss benefits. Accordingly, I would affirm.
D-4