Saengkeo v. Minnesota Automobile Assigned Claims

(Published, No. A15-1267)

Minnesota Court of Appeals, April 4, 2016


This case involves a claim for no-fault benefits against the Minnesota Automobile Assigned Claims Plan.  The Minnesota Court of Appeals holds that an injured person who is uninsured is not entitled to no-fault benefits through the Minnesota Assigned Claims Plan (hereinafter “Assigned Claims”) if the injured person resides with a family member who owns an uninsured vehicle, unless there is clear and convincing evidence that the vehicle owner did not intend for anyone to use the vehicle.  

Mr. Paek Saengkeo was injured in a motor vehicle collision in which he was a passenger.  Mr. Saengkeo did not own a motor vehicle and did not have any motor vehicle insurance of his own.  The vehicle he was riding in was also uninsured.  At the time of the collision, Mr. Saengkeo lived with his brother.

Since there were no no-fault insurance policies applicable to Mr. Saengkeo, he applied for no-fault benefits through Assigned Claims.  Mr. Saengkeo’s no-fault claim was subsequently assigned to American Family Insurance.  However, American Family denied Mr. Saengkeo’s claim for benefits because he lived with his brother who was a co-owner of an uninsured 2002 Ford Explorer.  Mr. Saengkeo filed a district court action for declaratory judgment seeking coverage under American Family.  Mr. Saengkeo alleged in his Complaint that, although his brother’s name was on the title, his brother’s girlfriend was the true owner of the 2002 Ford Explorer.

Both parties moved for summary judgment on the following stipulated facts.  Brother and girlfriend co-signed a loan for the purchase of the Ford Explorer in 2008.  The intent was for girlfriend to be the owner of the Explorer, despite the fact that brother’s name was also on the title.  Girlfriend paid the $2,000 down payment, and made the monthly payments on the loan thereafter.  Brother drove the Explorer only a few times, and with girlfriend’s permission.  In 2009, brother and girlfriend ended their relationship and brother moved in with Mr. Saengkeo.  Girlfriend maintained possession of the Explorer and brother had no access to it.  Girlfriend insured the Explorer with American Family, but brother’s name was not on the insurance.

The district court granted Mr. Saengkeo’s motion for summary judgment, finding that at the time of the motor vehicle collision, brother did not contemplate the use of the Explorer and, therefore, he was not required to insure it.  American Family appealed.

The appellate court notes that the No-Fault Act defines a motor vehicle owner as “a person, other than a lienholder or secured party, who owns orholds legal title to a motor vehicle or is entitled to the use and possession of a motor vehicle subjected to a security interest held by another person.” Minn. Stat. § 65B.43, subd. 4 (2014) (emphasis added).  The court finds that the brother was an owner of the Ford Explorer, per the above definition, because his name was on the title.

On appeal, American Family argued that the district court erred in determining that brother was not required to insure the vehicle because he did not contemplate use of the vehicle.  Rather, American Family argues that the issue is whether any owner contemplated use of the vehicle, not just brother.

The appellate court finds that the relevant statutory language is clear:  a person is disqualified from Assigned Claims if they reside with someone who fails to insure a vehicle as required by statute.  The court then cites Minn. Stat. § 65B.48, subd. 1, which states that “an owner of a vehicle is required to maintain insurance “during the period in which operation or use [of the vehicle] is contemplated.”  The court finds that this language is clear; it does not say that the owner must provide insurance when he or she contemplates use of the vehicle, but rather when “use [of the vehicle] is contemplated.”  The court finds that the legislature intended to require insurance whenever use of the vehicle is contemplated by anyone.

Applying the ‘unambiguous’ law to this set of facts, the court finds that use of the Ford Explorer was clearly contemplated by girlfriend, who was still using the vehicle.  Brother knew that girlfriend was still using the vehicle.  As such, brother was required to maintain insurance on the Ford Explorer.  The court notes that, if brother was concerned about whether he should insure the vehicle, he could have removed his name from the vehicle’s title.

Of note, Judge Bjorkman wrote a dissent to this opinion.  Judge Bjorkman opines that the language of Minn. Stat. § 65B.64, subd. 3 should control, because this is the provision under which American Family denied coverage.  Judge Bjorkman notes that the language of this statute focuses on whether “an owner” contemplates use of the vehicle.  Under this analysis, one co-owner could contemplate use of the vehicle, while another co-owner does not, such as in this case where girlfriend contemplated use of the vehicle, while brother did not.  Judge Bjorkman also notes that Mr. Saengkeo was an innocent passenger in this case; he did not own a vehicle, did not have any insurance of his own, and sustained injuries.  This is the type of person that the Assigned Claims plan was enacted to protect.  Judge Bjorkman notes that allowing Mr. Saengkeo to recover no-fault benefits in this case would be consistent with public policy.


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