Court of Appeals opinion sorts out truck-insurance indemnity dispute

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Trucks that do not meet the definition of “pickup truck” are passenger vehicles, not commercial vehicles, if they are designed and used for carrying no more than 15 people, according to a precedential opinion filed Jan. 31 by the Minnesota Court of Appeals affirming the holding of a district court.

The case is a consolidated appeal stemming from two collisions. In both cases, trucks were insured by Progressive Direct Insurance Company and Progressive Casualty Insurance Company. The trucks struck cars that were insured by American Family Mutual Insurance Company (American).

In the first collision, a man driving a 2015 Ram 2500 Crew Short truck struck a car in Sauk Rapids. The car’s insurer paid out $20,000 in no-fault benefits to an injured passenger in the insured’s vehicle. In the second collision, a woman ran a red light, hitting a car with her 2014 Ford F-150 and injuring its driver. As a result of that collision, the car’s insurer paid out $4,413.45 in no-fault benefits.

American initiated arbitration proceedings, demanding that Progressive indemnify it for payments to the injured persons, citing the Minnesota No-Fault Automobile Act. In both cases, the arbitrator refused American’s indemnity demand. American then requested that the district court vacate the awards, but in both cases the district court confirmed the awards.

American appealed, its argument being that the trucks were commercial vehicles, not passenger vehicles. Under the Minnesota No-Fault Automobile Act, Minn. Stat. §§ 65B.41-71 (2020), automobile insurers are required to reimburse their insured for losses suffered due to use or maintenance of an insured vehicle. Those insurers then may seek indemnity from another insurer that covers “a commercial vehicle of more than 5,500 pounds curb weight” provided that “negligence in the operation, maintenance, or use of the commercial vehicle was the direct and proximate cause of the injury.” Minn. Stat. § 65B.53, subd. 1.

The disagreement centered on the definition of “commercial vehicle.” As defined in Minn. Stat. § 65B.43, subd. 12(b), a commercial vehicle is “any motor vehicle, other than a passenger vehicle defined in section 168.002, subdivision 24, which has a curb weight in excess of 5,500 pounds apart from cargo capacity.” In this case, the trucks that were insured exceeded the weight threshold used for commercial vehicle designation.

The court then considered whether the two trucks were instead “passenger vehicles.” What qualifies as a “passenger automobile” is laid out in 3 paragraphs of Minn. Stat. §§ 168.002, subd. 24. Paragraph A states that passenger automobiles include any motor vehicles designed and used for carrying no more than 15 people, including the driver. Paragraph B provides exclusions for passenger automobiles, including motorcycles, motor scooters, buses, school buses, and commuter vans. Paragraph C lays out a variety of vehicles that count as passenger automobiles, including (but not limited to) a vehicle that is a pickup truck or van as defined in subdivisions 26 and 40.

After reviewing these provisions, the district court concluded that the trucks in question were passenger automobiles and not commercial vehicles. As such, American would not be entitled to indemnity. It denied American’s motion to vacate the arbitration awards.

American, however, asked the appeals court to reverse, citing Paragraph A. Paragraph A lays out what counts as a passenger vehicle by using the phrase “any motor vehicle.” American attests that the phrase cannot be so overbroad as to encompass anything in the class of “motor vehicles.” It also cited Paragraph C as a provision that apparently implicitly limits the language of Paragraph A. As Paragraph C includes the phrase “a pickup truck or a van as defined in subdivisions 26 and 40,” American reasoned that passenger automobiles could only include trucks that meet the definition of pickup trucks in subdivision 26. Conflicting interpretations, American concluded, rendered the statute ambiguous.

The court, however, failed to see how the phrase “any motor vehicle was ambiguous.” While the word “any” in this provision refers to a global, expansive class of motor vehicles, the court declined to view the word as raising any true ambiguity. “That ‘any’ is an encompassing adjective does not render it ambiguous,” the court wrote. Furthermore, the court avowed that the word “any” was, in fact, limited to a subset of the class of motor vehicles by the other language in Paragraph A: vehicles that are designed for carrying people, rather than, for instance, refuse, and only designed for 15 or fewer people.

American then argued that the weight of the vehicle — which was more than that of a pickup truck — meant that it was more likely to cause significant damage. As such, the Legislature must have intended that insurers be indemnified for the damage that they cause. The court disagreed, writing: “This focus on the weight of the vehicle is only a distraction.” Instead, it pointed to Minn. Stat. § 65B.43, subd. 12, where the Legislature explicitly excluded passenger vehicles from the definition of commercial vehicle. Design, use, and capacity to transport passengers — rather than weight — determine passenger automobile status, the court maintained.

Finally, the court considered the argument that by stating a list of “included” items, certain items would be considered excluded. The court wrote:

“For example, a hypothetical dangerous-animal statute might forbid keeping dangerous animals, ‘except pets’, which it defines as ‘any’ animal weighing less than 150 pounds, ‘including, but not limited to, nonvenomous snakes.’ Although the structure implies only inclusion, the substance plainly indicates an exclusion, since no reasonable interpreter would contend that the statute authorizes keeping a pet Desert Death Adder.”

Stating that the “includes” provision in subdivision 24 did not involve a similar contradiction, it determined that the statute unambiguously included the two trucks involved in the collisions, and concluded that that they were passenger automobiles.