I respectfully dissent. I would affirm the trial court.
I. None of the insurers was advised prior to the explosion that Keller and Montgomery had operated a joint venture over ten years ago.
The policies herein under consideration generally cover the period from July 1981 to February 1983, within the timeframe of the explosion.
The policies describe those persons who are insured for completed operation coverage. After setting forth those persons or entities who are insured, the policies contain the following limiting language which is at issue in this litigation:
This insurance does not apply to bodily or property damage arising out of the conduct of any partnership or joint venture of which the insured is a partner or member and which is not designated in this policy as a named insured.
(Emphasis added.)
Any liability on the part of Keller and Montgomery arises out of the construction work done as part of a joint venture ten years ago. This joint venture was not designated as a named insured on the policies. The language of the policies is clear and unambiguous.
II. The majority attempts to avoid the joint venture exclusion by claiming that it was no longer, as of the date of the explosion, a member of a joint venture. They rely on the fact that the language in the insurance *Page 84 policy uses the present tense "is" rather than the past tense "was." They claim that since the work of the joint venture was completed, it was no longer a member of the joint venture and would therefore be entitled to coverage.
The purpose of the exclusionary language in the policy is to make the insurer aware of its risk prior to extending coverage. A potential insured may have been a small part of a huge joint venture. This would result in joint liability for the negligent acts of fellow joint adventurers. Krengel v. Midwest AutomaticPhoto, Inc., 295 Minn. 200, 203 N.W.2d 841 (1973). An insured cannot properly calculate premium charges without full knowledge of what entities it is insuring. If Keller or Montgomery had sought coverage for the previous joint venture, the details of that venture should have been related to the insurer and coverage obtained in the name of the joint venture as required by the policy. In the instant case, no such attempt was made by Keller or Montgomery, and both are, in fact, now suing their insurance agent, Drew, for failing to explain the matter to them.
The operation of a joint venture could result in an extraordinary increase in the liability exposure which the insurer is undertaking to defend and indemnify. The exclusionary language here at issue protects the insurer from such unknown risks. The insurer should not be exposed to risks which it has not contracted to insure, nor should it be obligated to provide coverage for a joint venture of which it had no knowledge.
III. The majority goes to great lengths to show that the joint venture did not exist at the time of the explosion. The technical existence of the joint venture is not relevant to this litigation. The joint venture continues to exist as an entity which can be held liable for past acts and omissions of the joint venture. The insurance contract insures the insured for "all sums which the insured shall become legally obligated to pay as damages because of * * * bodily injury or * * * property damage." For purposes of the insurance contract, the joint venture has an indefinite duration. It continues to exist as long as it may be found liable for damage arising from its activities as a joint venture. Just as joint adventurers may not interpose their termination of the joint venture as a defense to a liability claim, they should not be permitted to contend here that disclosure of the joint venture was unnecessary because they had agreed to dissolve it. To construe the joint venture language such that it applies only to joint ventures which existed at the time of the incident which gives rise to the litigation would render the exclusionary language meaningless because of the limited lifespan of most ventures.
The Minnesota Supreme Court has held that it will not force a policy interpretation that is not there in order to find for an insured. Fireman's Insurance Company of Newark v. Viktora,318 N.W.2d 704, 706 (Minn. 1982). The use of the word "is" instead of "was" in the policies is irrelevant. It is the liability of Keller and Montgomery which triggers coverage, not the timing of the technical termination of a business contract.
As indicated, that Keller and Montgomery could deny liability to Knutson by arguing that the joint venture no longer exists is patently wrong. Such an argument to find coverage is equally erroneous.
In interpreting the language of the policies, the court should give the words used their plain and ordinary meaning and not read ambiguity into clear language, or rewrite the contract. Employers Mutual Casualty Co. v. Kangas, 310 Minn. 171,245 N.W.2d 873.
The Minnesota Supreme Court has not dealt directly with this issue, although it was before them in Grain Dealers Mutual Ins.Co. v. Cady, 318 N.W.2d 247 (Minn. 1983). In that case, the issue before the court was whether the insured had engaged in a joint venture activity. The court made it clear that, if the insured was operating as a joint venture, the exclusionary *Page 85 language in his liability insurance policy would be valid and enforceable and that he would be denied coverage. Our court stated:
Id. at 248.The policy provided that liability insurance did not apply to bodily injury arising out of the conduct of a joint venture of which the insured was a member unless such joint venture was designated as a named insured in the policy itself. No joint venture was designated as a named insured in the policy.
Exclusionary language identical to that contained in the policies here at issue has been considered in two reported cases. In both Associated Metals and Minerals Corp. v. HartfordAccident and Indemnity Co., No. 76 Civ. 3807 (U.S.D.C., S.D., N Y, March 21, 1977) and Fireman's Fund Ins. Co. v. E.W.Burman, Inc., 120 R.I. 841, 391 A.2d 99 (1978), the court held that the policy language was clear and unambiguous and denied coverage to a joint adventurer on the basis of the exclusionary language.
In Fireman's Fund, the insured was a construction company which had formed a joint venture for purposes of completing work on a building addition. The incident which gave rise to the litigation occurred after the joint venture had completed its work on the construction project, but within the policy period. The insured did not notify the insurer of the joint venture. The joint venture was not listed as an additional insured on the subject insurance policy. Construction was completed in November 1969. An accident occurred on April 16, 1970, in which an employee of the building owner was injured. The employee brought an action against the joint adventurers.
The Rhode Island Supreme Court held that exclusionary language, identical to that contained herein, was clear and unambiguous and denied coverage to the insured. TheFireman's Fund court stated:
391 A.2d at 102 (emphasis added).It is well settled that the clear and unambiguous language set out in a contract is controlling as to the intent of the parties thereto and governs the legal consequences of its provisions. (Citations omitted). The insurance policy in question is a contract made by and binding upon the parties. By its terms, plaintiff and defendant agree that the policy would not cover personal injury or property damage arising out of the conduct of a joint venture in which defendant was a participant. The language in the exclusion clause and the "changes" provision is clear and unambiguous. The conclusion is inescapable, then, that the parties' intent as disclosed by such language was that both provisions should apply to a joint venture situation similar to that of the instant case. Were we to concur with the decision of the trial justice and consider evidence as to agency and notice, we would contravene the parties' clearly expressed intent that a participation by defendant in a joint venture would terminate plaintiff's alleged duty to indemnify defendant for any damages sustained while so engaged.
It is significant that the court held that the policy would not cover personal injury or property damage arising out of the conduct of a joint venture in which defendant was a participant. The Rhode Island Supreme Court did not agree that exclusionary language should apply only to joint ventures of which the insured is presently a member.
In Associated Metals, the insured entered into a joint venture for the purpose of selling and processing hydrated magnesium oxide. Magnesium oxide is used, among other purposes, as an ingredient for livestock feed. The joint venture was formed in July 1973. In 1976, during the policy period, a corporation engaged in the business of raising cattle brought a suit alleging that its herd sickened, died or had to be destroyed as the result of ingesting adulterated cattle feed.
The insurance policy there in question was a comprehensive general liability policy with exclusionary language relating to joint ventures identical to that contained in the policies herein. The United States District *Page 86 Court for the Southern District of New York described the exclusionary language as "simplicity itself" and stated that "the language is unambiguous and clearly applicable to the circumstances presented by the case." The court went on to deny insurance coverage to the insured because its alleged liability arose from its participation in a joint venture. Thus, the only two jurisdictions which have addressed this specific issue have held that the joint venture exclusion is valid and may be relied upon by the insurer to deny coverage to its insured.
V. For the above reasons, I would hold the joint venture exclusion is valid and enforceable.