Leamington Co. v. Nonprofits' Ins. Ass'n

STRINGER, Justice

(dissenting).

I respectfully dissent. I agree with the majority that Leamington’s failure to submit a proof of loss within 60 days is not a *356condition precedent to recovery and does not necessarily operate as' a complete bar to recovery. However, I disagree with the majority’s conclusion that a material issue of fact remains as to whether the omission of Leamington as an additional insured on the policy was a mutual mistake.

The majority concludes that Leamington raises a genuine issue of material fact regarding its inclusion in the policy under the test provided in Nichols v. Shelard Nat'l Bank, 294 N.W.2d 730, 734 (Minn.1980), because Leamington presented evidence indicating that the parties intended to include it as an additional insured. But what the parties intended is of no importance if the claimant seeking reformation is not one of the parties. See, e.g., 13 Samuel Williston & Richard A. Lord, A Treatise on the Law of Contracts § 37:1, at 5 (4th ed. 2000) (“Under the traditional common-law rule, only parties in privity of contract could sue on the contract * * *. * * * Even today, courts recite talismani-cally * * * that ‘strangers to a contract’ have no rights under the contract”) 1 That is the situation here. Leamington’s evidence is that one of NIA’s agents had a copy of the lease agreement between Leamington and PSP requiring that Leamington be named as an owner-insured on the policy and that Leamington was listed as a loss-payee on the 1994-95 policy. Additionally, Leamington argues that after discovering the omission, Acordia requested endorsements naming Leamington as an additional insured.

While all this may be true, the answer is that it does not matter. The only parties to the contract, NIA and PSP, are not before the court seeking reformation and in fact now object to the reformation: NIA claims that the earlier endorsements listing Leamington as an additional insured were made without PSP’s knowledge and at the sole request of Leamington. Far from revealing a mutual mistake, it appears that Leamington may have mistakenly believed it was included as an additional insured, but NIA and PSP-the actual parties to the con-traet-were not mistaken and reached a different understanding entirely. Where NIA and PSP, as parties to the contract, agree that Leamington was not accidentally omitted, it defies common sense to permit Leamington, as a stranger to the contract, to introduce evidence that the omission was a mistake. The majority has opened the door for what can only be perceived as the dreadful prospect of a stranger to a contract having standing to claim that the contract should be reformed to benefit the stranger when the parties to the contract expressed no such intention.

With respect to the majority’s comment that Leamington may have rights as an intended third-party beneficiary of the policy, I agree that this issue was not argued below and thus should not be addressed here. See Thiele v. Stick, 425 N.W.2d 580, 582 (Minn.1988) (limiting review to issues raised in the district court).

., Williston goes on to note that exceptions to the general rule have developed in the case of third party beneficiaries. See 13 Samuel Wil-listón & Richard A. Lord, A Treatise on the Law of Contracts § 37:1, at 7 (4th ed.2000).