American Family Insurance Group v. Schroedl

PARKER, Judge *

(concurring specially) ■

I concur in the result, but would reverse on an additional basis; I would hold that the language of the policy exclusion of “work loss” benefits is impermissibly broad because it eliminates statutorily-mandated coverage.

Under Minn.Stat. § 65B.44 (1998), an auto insurance policy must provide “disability and income loss benefits.” Although this whole term is not defined, Minn.Stat. § 65B.43, subd. 6 (1998), defines income as

salary, wages, tips, commissions, professional fees, and other earnings from work or tangible things of economic val*708ue produced through work in individually owned businesses, farms, ranches or other work.

(Emphasis added.)

The insurance policy at issue requires senior citizens to waive all “work loss” coverage, not just “wage loss” coverage as contemplated by Minn.Stat. § 65B.491 (1998), and, thus, contravenes the no-fault act. Minn.Stat. § 65B.44, subd. 1, provides that:

Basic economic loss benefits shall provide reimbursement for all loss suffered through injury arising out of the maintenance or use of a motor vehicle, subject to any applicable deductibles, exclusions, disqualifications, and other conditions, and shall provide a maximum of $40,000 for loss arising out of the injury of any one person, consisting of:
* * * *
(b) a total of $20,000 for income loss * * *

(Emphasis added.)

And Minn.Stat. § 65B.44, subd. 3, provides that “[disability and income loss benefits shall provide compensation for 85 percent of the injured person’s loss of present and future gross income from inability to work * * (Emphasis added.)

The Minnesota Supreme Court has stated, in the context of a no-fault act case, that “contract provisions which conflict with statutory law will not be enforced.” Roering v. Grinnell Mut. Reins. Co., 444 N.W.2d 829, 833 (Minn.1989) (insurance policy exclusion provision conflicts with coverage guaranteed by no-fault act and is therefore void). It has also stated that

an insurer’s liability is governed by the contract between the parties only as long as coverage required by law is not omitted and policy provisions do not contravene applicable statutes.

Streich v. American Family Mut. Ins. Co., 358 N.W.2d 396, 399 (Minn.1984); see also Hertz Corp. v. State Farm Mut. Ins. Co., 573 N.W.2d 686 (Minn.1998) (provisions of a car rental agreement limiting rental company exposure violates the no-fault act, thus unenforceable); Malmin v. Minnesota Mut. Fire & Cas. Co., 552 N.W.2d 723, 725 (Minn.1996) (noting that the supreme court has, on several occasions, “voided provisions commonly used in automobile insurance policies due to perceived conflicts with the No-Fault Act’s provisions”); Schmidt v. Clothier, 338 N.W.2d 256, 261 (Minn.1983) (insurance policy provisions requiring insured to exhaust tortfeasor’s liability limits before underinsured motorist benefits will be paid are void as against public policy of no-fault act).

The arbitrator concluded that:

[ jeither Minn.Stat. § 65B.491, nor the claimed exclusion or waiver signed by Mr. Schroedl in 1992, precludes recovery of the income loss benefits sought in this case. This conclusion is reached for the following reasons. The “disability and income loss benefits” provided by Minn. Stat. § 65B.44, subd. 3 is a broad category of benefits. It provides compensation for loss of income resulting from disability or inability to work. Income can be in several forms, and earned wages are but one type of income. Minn.Stat. § 65B.491, relied upon by Respondent in arguing that Claimant’s policy excluded these benefits, is more limited in its effect. It does not broadly deal with “disability and income loss benefits,” but rather is limited to “wage loss” reimbursement. That is, Minn. Stat. § 65B.44, subd. 3, provides disability and income loss benefits, while Minn. Stat. § 65B.491 relates to exclusion of wage loss benefits. These are different terms. Harold Schroedl’s decrease in income from his income property is an “income loss,” but not a “wage loss.” Had the legislature in adopting § 65B.491 intended to limit all forms of income loss benefits for individuals over age 65, it would have more clearly used the term “income loss” as that term appears in Minn.Stat. § 65B.44, subd. 3. It is more likely that the Legislature, in passing Minn.Stat. § 65B.491, was dealing with “wages” that a person of age 65 years or older “would not reasonably be expected to be receiving” because that *709person was retired from regular employment. While the form utilized by Respondent provides for a waiver of “work loss” benefits, this form cannot restrict benefits more than the provisions of Minn.Stat. § 65B.491.

I agree with the reasoning of the arbitrator and would hold that coverage must be implied to require reimbursement of “income loss” benefits.

Retired judge of the Minnesota Court of Appeals, serving by appointment pursuant to Minn. Const, art. VI, § 10.