                        This opinion will be unpublished and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
                                   A15-0520

                                 Christina Marshall,
                                     Appellant,

                                         vs.

                                   Owen Hoglund,
                                     Respondent,
                                  Stephen Hoglund,
                                     Respondent,
                    State Farm Mutual Automobile Insurance Co.,
                                     Respondent,
                                   Megan Heikes,
                                     Respondent,
                               Integrity Insurance Co.,
                                     Respondent,
                                   Casey Pederson,
                                     Respondent,
                               Warren Pederson, et al.,
                                     Defendants.

                              Filed December 14, 2015
                                      Affirmed
                                   Stauber, Judge

                             Cook County District Court
                              File No. 16-CV-13-280

James W. Balmer, Falsani, Balmer, Peterson, Quinn & Beyer, Duluth, MN (for appellant)

Brian R. McCarthy, McCarthy & Barnes Law Firm, Duluth, Minnesota (for respondent
Owen Hoglund)

Kyle H. Torvinen, Torvinen, Jones, Routh & Torvinen, S.C., Superior, Wisconsin (for
respondents Stephen Hoglund and Integrity Insurance Company)
C. Todd Koebele, Brent D. Kettelkamp, HKM, P.A., St. Paul, Minnesota (for respondent
State Farm Mutual Insurance Company)

Steven L. Viltoft, Hopkins, Minnesota (for respondent Megan Heikes)

Casey Pederson, Warren Pederson, Grand Marais, Minnesota (pro se defendants)

       Considered and decided by Chutich, Presiding Judge; Ross, Judge; and

Stauber, Judge.

                        UNPUBLISHED OPINION

STAUBER, Judge

       In this appeal from summary-judgment dismissal of her declaratory-judgment

action against respondent insurers following the death of her son in an automobile

accident, appellant argues that the district court erred by determining that (1) no special

circumstances exist that would trigger coverage and (2) the juvenile driver was not an

additional insured under the terms of his father’s policy. We affirm.

                                         FACTS

       On June 13, 2013, respondent Owen Hoglund (Hoglund) was driving a car that

crashed, resulting in the tragic death of passenger Dylan Marshall. At the time, Hoglund

had alcohol, marijuana, and the drug Ecstasy in his system.         The car belonged to

respondent Casey Pederson, and Hoglund had taken the car without Pederson’s express

permission.

       According to the undisputed facts, Hoglund, Marshall, Pederson, and other friends

were at a bonfire on June 12, 2013. Many of the partygoers were drinking, but Pederson

was not. About 2 a.m., the partygoers adjourned to Pederson’s house. Pederson went to



                                            2
bed, but his car was parked outside with the keys in the ignition. About 5 a.m., Hoglund,

Dylan Marshall, and another boy decided to drive into Grand Marais to get breakfast.

They did not awaken Pederson, but Hoglund took the car, assured by someone that

Pederson would not mind. During the drive, the car rolled over and Dylan Marshall was

killed.

          Hoglund, a minor, lived with his mother, respondent Megan Heikes. Although

Heikes and Hoglund’s father, respondent Stephen Hoglund, shared legal custody of

Hoglund, Heikes had full physical custody of Hoglund pursuant to a dissolution judgment

and decree. Heikes had automobile insurance coverage through respondent State Farm

Mutual Insurance Company.         Stephen Hoglund had automobile insurance coverage

through respondent Integrity Insurance Company. Heikes’s State Farm policy excluded

coverage for bodily injury that occurs when an insured is “operating a motor vehicle

without a reasonable belief of the legal right to do so.” Stephen Hoglund’s Integrity

policy provided liability coverage for “family member[s],” defined as “a person related to

you by blood, marriage or adoption . . . whose principal residence [is the insured’s].”

The policy also stated: “If a court has adjudicated that one parent is the custodial parent,

that adjudication shall be conclusive with respect to the minor child’s principal

residence.” The Integrity policy also excluded liability coverage if a vehicle was used

“without a reasonable belief that that person is entitled to do so.”

          Dylan Marshall’s mother, appellant Christina Marshall (Marshall), sued Hoglund,

Stephen Hoglund, Megan Heikes, Integrity, State Farm, Casey Pederson, and Warren

Pederson. The district court granted summary judgment in favor of Stephen Hoglund,


                                              3
Integrity, Heikes, and State Farm on August 25, 2014. An amended order from October

2, 2014, permitted immediate entry of judgment. This court dismissed Marshall’s first

appeal as premature because claims against Hoglund, Casey Pederson, and Warren

Pederson were outstanding. The claims against everyone except the insurance companies

were dismissed by agreement of the parties on January 29, 2015, with the district court

order for judgment filed on February 3, 2015. Marshall filed a second notice of appeal in

March 2015, contesting the summary judgment granted in favor of Integrity and State

Farm.

                                     DECISION

        Summary judgment must be granted if, based on all of the pleadings, discovery

materials, and affidavits, there are no genuine issues as to material facts and a party is

entitled to judgment as a matter of law. Minn. R. Civ. P. 56.03. We review the district

court’s grant of summary judgment de novo to determine if there are any issues of

material fact and whether the district court erred in applying the law. Larson v. Nw. Mut.

Life Ins. Co., 855 N.W.2d 293, 299 (Minn. 2014). “The interpretation of an insurance

policy and application of the policy to the facts of a case are questions of law [subject to]

review de novo.” Remodeling Dimensions, Inc. v. Integrity Mut. Ins. Co., 819 N.W.2d

602, 610 (Minn. 2012). “Insurance policies are contracts and, absent statutory provisions

to the contrary, general principles of contract law apply.” Id. at 611.

                                             I.

        Marshall argues that Casey Pederson gave Hoglund implied permission to use his

car and, therefore, Hoglund was driving the car with a reasonable belief that he had a


                                             4
legal right to do so. Marshall asserts that special circumstances exist that create an

inference of implied permission; these circumstances include the fact that Casey

Pederson left his keys in the car and that he may have permitted friends to use the car on

other occasions.

      Marshall bases her argument on Minn. Stat. § 169.09, subd. 5a (2014), the so-

called Minnesota Safety Responsibility Act. This section states that “[w]henever any

motor vehicle shall be operated within this state, by any person other than the owner,

with the consent of the owner, express or implied, the operator thereof shall in case of

accident, be deemed the agent of the owner of such motor vehicle in the operation

thereof.” Id. “The burden of proving lack of [implied] consent is upon the named

insured and requires a strong showing that the automobile was being used without the

owner’s knowledge and contrary to his explicit instructions.” Mut. Serv. Cas. Ins. Co. v.

Lumbermens Mut. Cas. Co., 287 N.W.2d 385, 386 (Minn. 1979).

      But this statute governs assignment of liability; it does not resolve questions of

coverage under insurance contracts. Likewise, the cases Marshall relies upon, Illinois

Farmers Ins. Co. v. Tapemark Co., 273 N.W.2d 630 (Minn. 1978) and State Farm Mut.

Ins. Co. v. Grain Belt Breweries, Inc., 309 Minn. 376, 245 N.W.2d 186 (1976), discuss

whether an owner of a vehicle can be presumptively held negligent for the conduct of a

driver using the vehicle without permission when there are special circumstances that

make the risk of negligent conduct foreseeable. Tapemark, 273 N.W.2d at 636; Grain

Belt, 309 Minn. at 381-82; 245 N.W.2d at 189-90. Here, the question is not whether the




                                            5
owner of the motor vehicle, Casey Pederson, could have foreseen the risk; it is whether

the two insurance policies exclude coverage.

       The supreme court applied a coverage provision similar to that in the State Farm

and Integrity policies to deny coverage under circumstances closely matching those in

this case. Lobeck v. State Farm Mut. Ins. Co., 582 N.W.2d 246, 251 (Minn. 1998). In

that case, Joshua Lobeck was drinking at a friend’s house; Lobeck and another teenager

went to the garage and decided to take the homeowner’s sports car for a drive. Id. at 247-

48. Lobeck admitted that he did not ask and did not have permission to take the car,

which he subsequently crashed, paralyzing the passenger. Id. at 248. The passenger

sought coverage under Lobeck’s parents’ auto insurance policy, as well as the

homeowner’s auto insurance policy, both of which excluded coverage for non-owned

vehicles used without the owner’s permission. Id. The injured passenger argued that

these exclusions defeat the purpose of the No-Fault Act, but the supreme court reasoned

that although the act mandated first-party benefits to an insured, it did not change the law

of third-party liability. Id. at 249-50. First-party benefits are intended for protection of

the insured party; third-party liability benefits follow the vehicle rather than the person.

Id. at 250. The supreme court concluded that the No-Fault Act requires insurers to

provide certain unrestricted first-party benefits, but it does not prohibit an insurer from

placing restrictions on third-party liability coverage. Id. at 251.

       Likewise, the issue here is whether the two policies provide third-party liability

coverage to Hoglund. The policies clearly exclude third-party liability coverage for

damages incurred when a non-owned vehicle is driven by an insured without permission.


                                              6
This is the same exclusion that the supreme court approved in Lobeck. See Progressive

Specialty Ins. Co. v. Widness, 635 N.W.2d 516, 522 (Minn. 2001) (stating that

“permissive drivers are covered under the insurance of the vehicle they are driving,” but

noting that a provision excluding “coverage for an insured when the insured’s liability to

a third party arises while the insured is driving a vehicle without permission” is valid).

       The undisputed facts here provide a basis for excluding coverage under the

provisions in both policies. Hoglund pleaded guilty to theft of a motor vehicle, admitting

under oath that he did not have “permission or authority from the owner of the vehicle to

drive.” He agreed again to this statement in his deposition testimony. In his deposition,

Casey Pederson stated that his car had been stolen and he had not given permission to

anyone to drive it. He left the key in the ignition because he lives “in the middle of the

woods and [didn’t] believe that people would steal from me.” On the day of the accident,

Casey Pederson left the party at the bonfire before the others did, and thought that

everyone was “going home with their sober driver,” except for two friends who were

staying overnight.    Neither of the expected overnight guests were Hoglund.           Casey

Pederson was asleep when Hoglund took his car.

       Marshall argues that Casey Pederson left his car in a place “where he knew young

people, including . . . Hoglund, were present and illegally consuming alcohol” and that he

left the car unlocked and keys in the ignition, knowing that the others wanted to drive

into town in the morning. But this argument does not have a factual basis in the record.

“[T]here is no genuine issue of material fact for trial when the nonmoving party presents

evidence which merely creates a metaphysical doubt as to a factual issue and which is not


                                              7
sufficiently probative with respect to an essential element of the nonmoving party’s case

to permit reasonable persons to draw different conclusions.” DLH, Inc. v. Russ, 566

N.W.2d 60, 71 (Minn. 1997).

       Based on the contract language of the two policies, which excludes coverage for

non-permissive drivers, and the undisputed facts, the district court did not err in granting

summary judgment to respondents.

                                            II.

       The non-permissive-use exclusion provides a basis for summary judgment in favor

of both respondents. But Marshall also challenges the district court’s conclusion that

Hoglund does not fall within the Integrity policy’s definition of “family member.”

       The Integrity policy provides liability coverage for the insured, Stephen Hoglund,

and “any family member.” “Family member” is defined as “a person related to [the

insured] by blood, marriage or adoption . . . whose principal residence is at the [insured’s

residence].   If a court has adjudicated that one parent is the custodial parent, that

adjudication shall be conclusive with respect to the minor child’s principal residence.”

       Hoglund was a minor at the time of the accident. Although Stephen Hoglund and

Heikes shared joint legal custody of Hoglund, their dissolution judgment gave Heikes

sole physical custody of Hoglund. Under the clear language of the policy, Hoglund’s

principal residence was with Heikes, his physical custodian; he was not a “family

member” within the meaning of the policy definition, and, therefore, not an insured under

Stephen Hoglund’s Integrity policy.




                                             8
       An insurance policy is a contract. Remodeling Dimensions, 819 N.W.2d at 611.

“When the language of a contract is clear and unambiguous, [an appellate court]

enforce[s] the agreement of the parties as expressed in the contract.”          Caldas v.

Affordable Granite & Stone, Inc., 820 N.W.2d 826, 832 (Minn. 2012). If the Integrity

policy had defined a family member by principal residence, there might be a question

about how to define principal residence. But the policy here includes a specific definition

applicable to this situation: a minor child’s principal residence is the residence of his

custodial parent as adjudicated by a court. Heikes was Hoglund’s custodial parent under

a dissolution judgment.

       Marshall argues that Hoglund lived with both his parents from time to time. But

under the specific terms of the Integrity policy, the dissolution judgment is considered

conclusive as to Hoglund’s principal residence. The district court did not err by granting

summary judgment to Integrity based on this exclusion.

       Affirmed.




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