This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA IN COURT OF APPEALS A15-2027
Selective Insurance Company of South Carolina, Respondent,
vs.
Quoc D. Huynh, et al., Defendants,
Quoc D. Huynh, Third party plaintiff,
Nathan Hintze d/b/a Valley Insurance Agency, third party defendant, Appellant.
Filed June 20, 2016 Affirmed Rodenberg, Judge
Hennepin County District Court File No. 27-CV-14-8346
Kristi K. Brownson, John F. Thomas, Brownson & Linnihan, PLLP, Minneapolis, Minnesota, (for respondent)
Rolf E. Sonnesyn, Tomsche, Sonnesyn & Tomsche, P.A., Minneapolis, Minnesota, (for appellant)
Considered and decided by Bjorkman, Presiding Judge; Rodenberg, Judge; and
Bratvold, Judge. UNPUBLISHED OPINION
RODENBERG, Judge
Appellant insurance agent Nathan Hintze d/b/a Valley Insurance Agency (Hintze)
appeals from a judgment entered after a jury verdict finding him negligent in an action
concerning insurance coverage. Hintze argues that the district court erred in concluding
that he and the insurer are estopped from asserting a mistake, in not including
comparative-fault questions in the special verdict form, and in not including a causation
question in the special verdict form. We affirm.
FACTS
Noah Solomon, by his father and natural guardian, Tessema Solomon, initially
sued Quoc D. Huynh after Noah was bitten by Huynh’s dog. Huynh sought coverage for
Solomon’s claims under two policies of insurance issued by Respondent Selective
Insurance Company of South Carolina (Selective), a homeowner’s policy and an excess-
liability (umbrella) policy. Both were acquired through Hintze, Selective’s agent.
Selective brought a declaratory-judgment action against Huynh and Solomon, claiming
that Huynh was not entitled to coverage under either policy because Huynh made
material misrepresentations on his insurance applications. In response to Selective’s suit,
Huynh asserted that Selective should be estopped from asserting a mistake on the policy
because its agent, Hintze, incorrectly recorded Huynh’s truthful answers to Hintze’s
questions. Huynh also brought a third-party complaint against Hintze, alleging
negligence.
The issues on appeal concern the circumstances surrounding Huynh’s insurance
applications. Huynh applied for a homeowner’s policy in April 2013 and for an umbrella 2 policy in June 2013. Huynh then owned an Akita dog. Selective does not issue liability
insurance policies to applicants who own Akitas. Huynh never told Selective or Hintze
about the dog when he applied for either policy. Hintze testified that, as part of the
homeowner’s application, he asked Huynh whether Huynh had any animals, and Huynh
said “no.” But Huynh testified that Hintze never asked him if he had any animals. Both
applications as completed indicated that Huynh did not have any animals or exotic pets.
Huynh acknowledged that, although he had opportunities to review them, he signed the
applications without reading them.
The case was submitted to a jury, which returned the following answers to the
special verdict questions:
1. Did Quoc Huynh truthfully provide the correct answers to questions asked by Nathan Hintze when applying for insurance? Yes. 2. Did Nathan Hintze record the answers incorrectly in the insurance applications without the knowledge or fault of Quoc Huynh? Yes. 3. Did Quoc Huynh sign the insurance applications without first having read them regardless of having the opportunity to do so? Yes. 4. Did Quoc Huynh misrepresent that he had no pets or animals when he applied for insurance? No. 5. Was Nathan Hintze negligent with respect to Quoc Huynh’s insurance applications? Yes.
Hintze moved for judgment as a matter of law, or in the alternative, a new trial. On
October 16, 2015, the district court denied Hintze’s motion. It entered judgment on the
verdict in favor of Huynh and Solomon, and ordered Selective to provide coverage to
Huynh in Solomon’s dog-bite suit.
Selective and Hintze appealed from the judgment. Selective later settled with
Huynh and Solomon; Selective, Huynh, and Solomon then stipulated to dismissal of 3 Selective’s appeal. The settling parties asserted that Hintze’s appeal was moot because of
the settlement, and informed this court that they would not be participating in Hintze’s
appeal. Hintze was not a party to the settlement. By special-term order dated March 23,
2016, we accepted jurisdiction, concluding that the collateral-consequences doctrine
applies because Selective sought to use the underlying judgment in ongoing, independent
arbitration proceedings.
DECISION
Hintze challenges the district court’s application of the estoppel rule in
Pomerenke v. Farmers Life Ins. Co. to conclude that Selective must provide Huynh with
coverage. 228 Minn. 256, 36 N.W.2d 703 (1949). “When reviewing a declaratory
judgment action, we apply the clearly erroneous standard to factual findings . . . , and
review the district court’s determinations of law de novo . . . .” Onvoy, Inc. v. ALLETE,
Inc., 736 N.W.2d 611, 615 (Minn. 2007) (citations omitted); see also Skyline Vill. Park
Ass’n v. Skyline Vill. L.P., 786 N.W.2d 304, 306 (Minn. App. 2010). “Review [of a
special verdict] is particularly limited when the jury finding turns largely upon an
assessment of the relative credibility of witnesses whose testimonial demeanor was
observed only by the jury and the [district] court and the latter has approved the findings
made.” Kelly v. City of Minneapolis, 598 N.W.2d 657, 662-63 (Minn. 1999).
In Pomerenke, the Minnesota Supreme Court explained:
Where an application for insurance is made out by an insurance agent in the course of his agency and the insured truthfully gives the agent the correct answers, but the agent records the answers in the application incorrectly without the fault, knowledge, or collusion of the insured, and the insured signs the application without first having read it—although he had the opportunity to do so—in reliance upon the good faith 4 of the agent, the insurance company is not relieved from liability on the policy, and the act of the agent in recording incorrect answers is deemed the act of the insurer and not that of the insured. The theory upon which this rule—which is the majority rule—rests is that the agent in making out the application acts for the insurer, and the insurer is therefore estopped to assert the mistake.
228 Minn. at 260-61, 36 N.W.2d at 706.1 Plaintiff, the surviving husband in Pomerenke,
sought to collect on his deceased wife’s life-insurance policy. Id. at 258, 36 N.W.2d at
705. The defendant insurance company sought rescission of the policy, arguing that the
plaintiff and his wife misrepresented her ongoing health problems in the policy
application. Id. But the plaintiff testified that, over the course of five visits by the
insurance agent, the plaintiff told the insurance agent about his wife’s health problems,
the agent never asked the application question about health problems, and the wife signed
the application without reading it. Id.
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This opinion will be unpublished and may not be cited except as provided by Minn. Stat. § 480A.08, subd. 3 (2014).
STATE OF MINNESOTA IN COURT OF APPEALS A15-2027
Selective Insurance Company of South Carolina, Respondent,
vs.
Quoc D. Huynh, et al., Defendants,
Quoc D. Huynh, Third party plaintiff,
Nathan Hintze d/b/a Valley Insurance Agency, third party defendant, Appellant.
Filed June 20, 2016 Affirmed Rodenberg, Judge
Hennepin County District Court File No. 27-CV-14-8346
Kristi K. Brownson, John F. Thomas, Brownson & Linnihan, PLLP, Minneapolis, Minnesota, (for respondent)
Rolf E. Sonnesyn, Tomsche, Sonnesyn & Tomsche, P.A., Minneapolis, Minnesota, (for appellant)
Considered and decided by Bjorkman, Presiding Judge; Rodenberg, Judge; and
Bratvold, Judge. UNPUBLISHED OPINION
RODENBERG, Judge
Appellant insurance agent Nathan Hintze d/b/a Valley Insurance Agency (Hintze)
appeals from a judgment entered after a jury verdict finding him negligent in an action
concerning insurance coverage. Hintze argues that the district court erred in concluding
that he and the insurer are estopped from asserting a mistake, in not including
comparative-fault questions in the special verdict form, and in not including a causation
question in the special verdict form. We affirm.
FACTS
Noah Solomon, by his father and natural guardian, Tessema Solomon, initially
sued Quoc D. Huynh after Noah was bitten by Huynh’s dog. Huynh sought coverage for
Solomon’s claims under two policies of insurance issued by Respondent Selective
Insurance Company of South Carolina (Selective), a homeowner’s policy and an excess-
liability (umbrella) policy. Both were acquired through Hintze, Selective’s agent.
Selective brought a declaratory-judgment action against Huynh and Solomon, claiming
that Huynh was not entitled to coverage under either policy because Huynh made
material misrepresentations on his insurance applications. In response to Selective’s suit,
Huynh asserted that Selective should be estopped from asserting a mistake on the policy
because its agent, Hintze, incorrectly recorded Huynh’s truthful answers to Hintze’s
questions. Huynh also brought a third-party complaint against Hintze, alleging
negligence.
The issues on appeal concern the circumstances surrounding Huynh’s insurance
applications. Huynh applied for a homeowner’s policy in April 2013 and for an umbrella 2 policy in June 2013. Huynh then owned an Akita dog. Selective does not issue liability
insurance policies to applicants who own Akitas. Huynh never told Selective or Hintze
about the dog when he applied for either policy. Hintze testified that, as part of the
homeowner’s application, he asked Huynh whether Huynh had any animals, and Huynh
said “no.” But Huynh testified that Hintze never asked him if he had any animals. Both
applications as completed indicated that Huynh did not have any animals or exotic pets.
Huynh acknowledged that, although he had opportunities to review them, he signed the
applications without reading them.
The case was submitted to a jury, which returned the following answers to the
special verdict questions:
1. Did Quoc Huynh truthfully provide the correct answers to questions asked by Nathan Hintze when applying for insurance? Yes. 2. Did Nathan Hintze record the answers incorrectly in the insurance applications without the knowledge or fault of Quoc Huynh? Yes. 3. Did Quoc Huynh sign the insurance applications without first having read them regardless of having the opportunity to do so? Yes. 4. Did Quoc Huynh misrepresent that he had no pets or animals when he applied for insurance? No. 5. Was Nathan Hintze negligent with respect to Quoc Huynh’s insurance applications? Yes.
Hintze moved for judgment as a matter of law, or in the alternative, a new trial. On
October 16, 2015, the district court denied Hintze’s motion. It entered judgment on the
verdict in favor of Huynh and Solomon, and ordered Selective to provide coverage to
Huynh in Solomon’s dog-bite suit.
Selective and Hintze appealed from the judgment. Selective later settled with
Huynh and Solomon; Selective, Huynh, and Solomon then stipulated to dismissal of 3 Selective’s appeal. The settling parties asserted that Hintze’s appeal was moot because of
the settlement, and informed this court that they would not be participating in Hintze’s
appeal. Hintze was not a party to the settlement. By special-term order dated March 23,
2016, we accepted jurisdiction, concluding that the collateral-consequences doctrine
applies because Selective sought to use the underlying judgment in ongoing, independent
arbitration proceedings.
DECISION
Hintze challenges the district court’s application of the estoppel rule in
Pomerenke v. Farmers Life Ins. Co. to conclude that Selective must provide Huynh with
coverage. 228 Minn. 256, 36 N.W.2d 703 (1949). “When reviewing a declaratory
judgment action, we apply the clearly erroneous standard to factual findings . . . , and
review the district court’s determinations of law de novo . . . .” Onvoy, Inc. v. ALLETE,
Inc., 736 N.W.2d 611, 615 (Minn. 2007) (citations omitted); see also Skyline Vill. Park
Ass’n v. Skyline Vill. L.P., 786 N.W.2d 304, 306 (Minn. App. 2010). “Review [of a
special verdict] is particularly limited when the jury finding turns largely upon an
assessment of the relative credibility of witnesses whose testimonial demeanor was
observed only by the jury and the [district] court and the latter has approved the findings
made.” Kelly v. City of Minneapolis, 598 N.W.2d 657, 662-63 (Minn. 1999).
In Pomerenke, the Minnesota Supreme Court explained:
Where an application for insurance is made out by an insurance agent in the course of his agency and the insured truthfully gives the agent the correct answers, but the agent records the answers in the application incorrectly without the fault, knowledge, or collusion of the insured, and the insured signs the application without first having read it—although he had the opportunity to do so—in reliance upon the good faith 4 of the agent, the insurance company is not relieved from liability on the policy, and the act of the agent in recording incorrect answers is deemed the act of the insurer and not that of the insured. The theory upon which this rule—which is the majority rule—rests is that the agent in making out the application acts for the insurer, and the insurer is therefore estopped to assert the mistake.
228 Minn. at 260-61, 36 N.W.2d at 706.1 Plaintiff, the surviving husband in Pomerenke,
sought to collect on his deceased wife’s life-insurance policy. Id. at 258, 36 N.W.2d at
705. The defendant insurance company sought rescission of the policy, arguing that the
plaintiff and his wife misrepresented her ongoing health problems in the policy
application. Id. But the plaintiff testified that, over the course of five visits by the
insurance agent, the plaintiff told the insurance agent about his wife’s health problems,
the agent never asked the application question about health problems, and the wife signed
the application without reading it. Id. The supreme court concluded that the question of
the agent’s mistake concerning the incorrect answers on the application was appropriately
given to the jury. Id. at 261, 36 N.W.2d at 706. The insurer is, under the Pomerenke
rule, estopped to assert a mistake to deny coverage where the mistake originates with its
agent.
Here, the jury found as a fact that Huynh truthfully provided correct answers to the
questions asked by Hintze, and that Hintze “record[ed] the answers incorrectly.” It
therefore necessarily found as a fact that Hintze never asked the application question
about pets. The jury also found as a fact that Huynh “signed the insurance applications
without first having read them regardless of having the opportunity to do so.” These facts
1 As the supreme court noted, the rule was well-established before Pomerenke. 228 Minn. at 260-61, 36 N.W.2d at 706. For convenience, however, we refer to the principle of law as the “Pomerenke rule.” 5 are similar to, but slightly different than, those in Pomerenke. See id. at 258, 36 N.W.2d
at 705. The question here is whether the Pomerenke rule applies when the agent does not
ask the relevant question, resulting in the insured not supplying the relevant information.
We conclude that the Pomerenke rule applies.
The purpose of the Pomerenke rule is to protect insurance applicants who rely on
an insurance agent’s expertise in correctly and accurately filling out applications. See
Kansel v. Minn. Farmers’ Mut. Fire Ins. Ass’n, 31 Minn. 17, 21, 16 N.W. 430, 430
(1883) (explaining that the rule protects applicants who “regard [insurance salespeople]
as agents of the companies in the matter of preparing and filling up these applications”);
see also PHL Variable Ins. Co. v. 2008 Christa Joseph Irrevocable Trust ex rel. BNC
Nat’l Bank, 782 F.3d 976, 981 (8th Cir. 2015) (noting that “the purpose of the Pomerenke
rule is to protect an insured who relie[s] in good faith on the agent’s completing the
application correctly”) (quotation omitted). The jury necessarily credited Huynh’s
testimony in finding as a fact that he “provide[d] the correct answers to questions asked
by Hintze when applying for insurance.” It also found that Hintze “record[ed] the
answers incorrectly.” Where, as here, an insurance applicant provides truthful answers to
all questions asked of him by an insurance agent, the Pomerenke rule estops the insurer
from denying coverage based on the agent’s mistake.
Hintze argues that Pomerenke should be read narrowly because a case that it cites
for its rule of law involved an applicant “fully and correctly” stating the facts to the
agent. See Kansel, 31 Minn. at 23, 16 N.W. at 431-32. The Minnesota Supreme Court in
Kansel held that “where an agent to procure and forward applications for insurance,
either by his direction or direct act, makes out an application incorrectly, notwithstanding 6 all the facts are correctly stated to him by the applicant, the error is chargeable to the
insurer and not to the insured.” Id. at 21, 16 N.W. at 430. Kansel enunciates no rule of
law requiring applicants to provide unsolicited information to agents. Where the agent
does not ask a question but nevertheless provides a wrong answer to that question on the
insurance application, the resulting mistake is that of the agent and “the insurer is
therefore estopped to assert the mistake.” Pomerenke, 228 Minn. at 261, 36 N.W.2d at
706.
The district court properly entered judgment for Huynh and Solomon based on the
special-verdict answers and the Pomerenke rule.
Having concluded that the Pomerenke rule applies to these circumstances and
estops the insurer from denying coverage, the issues of comparative fault and causation
are unnecessary to resolve the declaratory-judgment action. Hintze argues that applying
the Pomerenke rule here effectively results in strict liability for an insurance agent’s error
and eliminates any duty of care on the part of an insurance applicant. He instead
advocates for some incorporation of both a comparative-fault and a causation analysis in
the application of the Pomerenke rule. But importing comparative-fault questions would
be antithetical to the purpose of the Pomerenke rule, which permits an insurance
applicant to rely on the agent to correctly complete an application. Kansel, 31 Minn. at
21, 16 N.W. at 430. Public-policy arguments to modify existing law are within the
purview of the Minnesota Supreme Court or the legislature, and not this court. See
Tereault v. Palmer, 413 N.W.2d 283, 286 (Minn. App. 1987), review denied (Minn.
Dec. 18, 1987). We therefore decline to adopt Hintze’s proposed modification of the
Pomerenke rule, as going beyond our role as an error-correcting court. See Lake George 7 Park, L.L.C. v. IBM Mid-Am. Emps. Fed. Credit Union, 576 N.W.2d 463, 466 (Minn.
App. 1998) (“This court, as an error correcting court, is without authority to change the
law.”), review denied (Minn. June 17, 1998).
Hintze also argues that the district court erred in including a negligence question,
but not comparative-fault and causation questions in the special-verdict form. All three
of those questions, however, exclusively concern Huynh’s third-party negligence claim
against Hintze, brought to recover from Hintze if Selective was not required to afford him
coverage. Because Selective is required to provide coverage under the policies, and has
in fact settled Solomon’s claims against Huynh, there is no viable cause of action against
Hintze for negligence in failing to secure coverage. Because the district court correctly
concluded that Selective must provide coverage to Huynh, we do not reach the questions
raised by Huynh’s third-party negligence action against Hintze.
In sum, the district court correctly applied the Pomerenke rule to estop Selective
from denying Huynh coverage based on the jury’s special-verdict answers.
Affirmed.