Benilde-St. Margaret's High School v. St. Paul Mercury Insurance Co.

SHORT, Judge

(dissenting).

I respectfully dissent. The trial court erred in concluding Benilde’s tax liability is a “liability claim” resulting from the administration of Benilde’s employee benefits. Despite creative characterizations by counsel, Benilde’s claim is merely an effort to recover embezzled payroll taxes, and as such, falls outside the employee benefits program administration policy’s insuring agreement. First, Benilde’s loss is not an indemnity obligation owed to a third party as required by the policy, but is a claim against CFS. Thus, the funds do not constitute an amount for which Benilde is “legally required to compensate others for loss.” See Bob Useldinger & Sons, Inc. v. Hangsleben, 505 N.W.2d 323, 328 (Minn.1993) (holding unambiguous language in insurance policy must be given plain and ordinary meaning). Second, CFS’s misappropriation of money cannot be described as “an error, omission, or negligent act.” See St. Paul Fire & Marine Ins. Co. v. National Beal Estate Clearinghouse, Inc., 957 F.Supp. 187, 191 (D.Minn.1997) (holding no coverage for intentional misconduct under policy insuring against “error, omission or negligent act”), affd, — F.3d-(8th Cir. Feb. 20, 1998) (unpublished table decision). And third, “taxes imposed by law” are excluded from insurance coverage. See St. Paul Fire & Marine Ins. Co. v. Briggs, 464 N.W.2d 535, 539 (Minn.App.1990) (holding insured may not obtain insurance coverage for federal tax liability), review denied (Minn. Mar. 15, 1991). Under these circumstances, the policy provides no coverage and I would reverse the trial court’s grant of summary judgment in favor of Benilde.