Submitted: June 9, 2015.
Appeal from United States District Court for the District of Minnesota - Minneapolis.
For Grinnell Mutual Reinsurance Company, Plaintiff - Appellant: Ken Douglas Schueler, Hilary Rae Stonelake-Curtis, Dunlap & Seeger, Rochester, MN.
For Kelly Stuart Schmidt, Jerome Allan Schmidt, Defendants - Appellees: Benjamin D. McAninch, James Henry Turk, Kevin Albert Velasquez, Blethen & Gage, Mankato, MN.
Before LOKEN, BYE, and KELLY, Circuit Judges.
BYE, Circuit Judge.
Grinnell Mutual Reinsurance Company (Grinnell) appeals the district court's grant of summary judgment in favor of Jerome and Kelly Schmidt in this insurance coverage dispute. The district court determined a farm policy issued to the Schmidts provided coverage for an accident involving an all-terrain vehicle (ATV) which occurred on the Schmidts' farm. We affirm.
Jerome and Kelly Schmidt, father and son, operate a farm together in Worthington, Minnesota. Kelly has a daughter named Madison. In May 2012, Madison hosted a sleepover party at her father's and grandfather's farm to celebrate her twelfth birthday. One of Madison's guests was her ten-year old friend, Alyssa Zamarron. The day after the sleepover, Madison and Alyssa took turns driving the Schmidts' ATV around the property. This occurred over several hours, during which time both Kelly and Jerome were working outside. Kelly and Jerome saw both girls operating the ATV and did not stop the girls from doing so. At one point, Jerome told his granddaughter that both girls needed to slow down while driving the ATV.
That evening, while Alyssa was driving the ATV with Madison as a passenger, the ATV struck a tree. Alyssa died as a result of the accident. A trustee acting on behalf of her next of kin filed a wrongful death action against the Schmidts alleging the death was caused by the Schmidts' negligent supervision. The Schmidts tendered defense of the action to Grinnell under their farm policy, which provided $300,000 in coverage. Although Grinnell initially informed the Schmidts the policy " appears to provide [them] with coverage for this loss," Grinnell ultimately reserved its right to dispute coverage, filed this declaratory judgment action, and contended the policy did not provide coverage for Alyssa's death. The wrongful death action ultimately settled for $462,500.
In this declaratory judgment action, the parties brought cross motions for summary judgment. Both parties agree the coverage dispute turns on whether Jerome or Kelly -- the named insureds -- gave Alyssa " express permission" to operate the ATV within the meaning of an exclusion contained in the Select Recreational Vehicle Limited Liability Coverage endorsement of the policy. In relevant part, the exclusion states the policy does not cover " bodily injury" to any " insured." The exclusion goes on to define an " insured" as " any person operating [an ATV] with 'your' express permission."
Because the policy did not define the term " express permission," the district court gave the phrase its plain and ordinary meaning. In doing so, the district court distinguished between situations where permission is expressly stated, and situations where permission is implied by conduct or otherwise. The district court looked to Minnesota cases applying the phrase " express or implied permission" in automobile policies, which distinguish between the two types of permission " based on the presence or absence of a verbal statement." Grinnell Mut. Reinsurance Co. v. Villanueva, 37 F.Supp.3d 1043, ...