(dissenting).
The question to be resolved is whether Employers National Insurance Co. (insurer) is contractually obligated to defend or indemnify TCBY. The majority analyzes this duty by evaluating the merits rather than the claims of the underlying lawsuit. Irrespective of the merits, TCBY must present a defense because its motion for dismissal was denied (the district court concluded that there is a material question of fact on whether TCBY exercised sufficient control over Northland to create an agency relationship). Moreover, the majority’s circular argument incorrectly interprets the employee exclusion to completely subsume Breaux’s claim against TCBY. This overlooks both the assertion of agency and other vicarious liability. The insurer must defend if the complaint states a cause of action within the coverage afforded by the insurance contract. See Economy Fire & Casualty Co. v. Iverson, 445 N.W.2d 824, 826 (Minn.1989) (an insurer must defend if the claim is arguably within the scope of the policy coverage). Breaux’s claim against TCBY is arguably within the policy’s coverage.
In determining whether the claim was within the scope of the policy coverage, the district court applied the “law of the case” doctrine. When law of the case is applied to a previous decision that was not appealed, the doctrine is essentially a management practice allowing a logical progression toward a final resolution of the case. Compare Paulson v. Greyhound Lines, 628 F.Supp. 888, 891 (D.Minn.) (doctrine has less force at trial level where it merely expresses the practice of courts not to reopen what has been decided), aff'd, 804 F.2d 506 (8th Cir.1986) with Mattson v. Underwriters at Lloyds of London, 414 N.W.2d 717, 719-20 (Minn.1987) (issues determined in a first appeal will not be relitigated in the trial court). Even when binding, the doctrine wisely permits a change of decision when there has been an intervening change in the facts or the law. Brezinka v. Bystrom Bros., Inc., 403 N.W.2d 841, 843 (Minn.1987).
Several undisputed facts illustrate that law of the case does not apply. First, the insurer’s previous summary judgment motion was against Northland Yogurt, the franchisee, not TCBY. TCBY had no standing to assert its own arguments or to appeal the district court’s first order for summary judgment. Second, TCBY and Northland Yogurt are in factually distinct positions on the issue of whether they are employers for purposes of the policy’s employee exclusion. Third, between the first and second summary judgment motions, the Minnesota Supreme Court decided Garvis v. Employers Mut. Casualty Co., 497 N.W.2d 254 (Minn.1993), which holds that emotional distress with appreciable physical manifestations is bodily injury within the meaning of an insurance policy. See Brezinka, 403 N.W.2d at 843 (law of the case should not be applied when a change in the controlling law has made the earlier decision incorrect).
For these reasons the law of the case was improperly applied to determine whether the insurer was obligated to defend and indemnify TCBY. I would reverse the defense and indemnity ruling and remand the issue to the district court for proper resolution.