                    United States Court of Appeals
                            FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 02-2303
                                   ___________

David L. Edgley,                        *
                                        *
            Plaintiff/Appellee,         *
                                        *
      v.                                *
                                        *
Harold Joseph Lappe,                    *
                                        *
            Defendant,                  *
                                        *
Dakota, Minnesota & Eastern             *
Railroad Corporation,                   *
                                        *    Appeal from the United States
            Defendant/Third             *    District Court for the
            Party Plaintiff,            *    District of Minnesota.
                                        *
      v.                                *
                                        *
Krause & Rollins,                       *
                                        *
            Objector,                   *
                                        *
      v.                                *
                                        *
National Liability & Fire               *
Insurance Company, a                    *
Connecticut Corporation,                *
                                        *
            Garnishee/Appellant.        *
                                   ___________

                             Submitted: May 16, 2003

                                  Filed: September 15, 2003
                                   ___________

Before SMITH and HANSEN, Circuit Judges, and READE,1 District Judge.
                            ___________

SMITH, Circuit Judge.

       National Liability & Fire Insurance Company ("National") appeals a judgment
entered against it in a garnishment action. David Edgley filed an underlying action
to recover damages for personal injuries he received in an accident involving an
employee of National's insureds, Benita and Harold Lappe, who owned and operated
a taxicab company. National did not defend the Lappes in that lawsuit and denied
coverage based upon explicit exclusions contained in the insurance policy. Edgley
settled his lawsuit against the Lappes and then filed this garnishment action against
National, which was not a party to the settlement negotiations and agreement between
Edgley and the Lappes. After the district court2 rejected National's defenses, the
court–following a bench trial–awarded Edgley $600,000. National now appeals the
reasonableness of that decision and the court's denials of its pre- and post-trial
motions. Because we agree that National's policy did not afford coverage to the
Lappes, we reverse the district court's decision and dismiss the action.




      1
        The Honorable Linda R. Reade, United States District Judge for the Northern
District of Iowa, sitting by designation.
      2
       The Honorable Michael J. Davis, United States District Judge for the District
of Minnesota.

                                        -2-
                                            I.
                                          Facts
        Edgley, a passenger in a taxicab, sustained injuries when a truck rear-ended the
taxi in November 1991. Edgley filed suit against the Lappes, taxi driver Raymond
Weise, the owners and driver of the truck, and Edgley's employer Dakota, Minnesota
& Eastern Railroad Company. Edgley settled his claims against these defendants in
March 1995. The settlement purportedly included a full and final release of all of his
claims against all parties and participants; however, the release also indicated that
Edgley wished to preserve his claims against Lappe and Weise and their insurers,
including National. Edgley notified National about the settlement negotiations prior
to trial, but National declined coverage and refused to participate.

       Several months after reaching the settlement, Edgley filed a document in
district court entitled "Agreement Pursuant to Drake v. Ryan3 and Stipulation for
Entry of Judgment Pursuant to Miller-Shugart.4" According to the filing, four matters
had been resolved. In the first two, Edgley settled claims against his employer and the
owners and driver of the commercial truck. In the third, Lappe and Weise agreed to
the entry of judgment against them in the amount of $600,000 collectable only from
National. Lastly, Edgley released the Lappes and Weise from personal liability.

      With judgment in hand, Edgley commenced this garnishment action against
National in district court contending that the settlement bound National even though


      3
        Drake v. Ryan, 514 N.W.2d 785, 788 (Minn. 1994) (holding that a plaintiff
can “dissect” a defendant’s liability by releasing some claims and preserving others).
      4
        Miller v. Shugart, 316 N.W.2d 729 (Minn. 1982) (allowing an insured, whose
insurer disputed coverage, to settle with the plaintiff and stipulate to a judgment
incorporating the settlement terms, thus allowing the plaintiff to seek collection on
that judgment in a garnishment proceeding against the insurer if the insurer received
notice of the settlement).

                                          -3-
it did not participate.5 National defended the garnishment action based upon the plain
language of its policy, which excluded coverage for substitute vehicles owned
personally by the Lappes. The car in which Edgley was injured, a 1971 Buick
LeSabre ("Buick"), belonged to the Lappes as a personal vehicle insured through
American Family Insurance Company ("American Family").6 The Lappes, who
operated Lappes Express Cab as a sole proprietorship, owned and operated two
licensed cabs insured with National. One of the cabs, however, was out of service on
the day of the wreck, so the Lappes substituted the Buick for that vehicle.

      The National policy covered temporary substitute automobiles, subject to two
conditions: 1) one of the two covered vehicles had to be out of service, and 2) the
Lappes could not own the substitute vehicle. The National policy, issued to "Harold
and Benita Lappe dba Lappes Express Cab," defined "substitute vehicle" as:

      Any "auto" you do not own while used with the permission of its owner
      as temporary substitute for a covered "auto" you own that is out of
      service because of its:
      a. Breakdown;
      b. Repair;
      c. Servicing;




      5
         The district court determined that despite the settlement language, Edgley
intended to retain garnishment rights against National to collect damages pursuant to
the settlement agreement with Lappe and Weise.
      6
       Lappe had not licensed or insured the Buick as a commercial vehicle with
American Family and, in fact, American Family denied coverage for that reason for
Edgley's personal-injury claim.

                                         -4-
      d. "Loss"; or
      e. Destruction.

(Emphasis added.)

       Based on this definition, National denied coverage after determining that the
Buick was not qualified to be a "substitute vehicle" because the Lappes owned it.7
The district court disagreed and found that National's policy was "inherently
ambiguous" because the purpose of the clause was not "undisputedly effectuated by
the plain language of the contract." Based upon the ambiguity it found, the district
court read the policy in the Lappes' favor and determined that coverage existed for the
Buick under the temporary substitute automobile clause. The district court denied
National's summary judgment motion and motion for judgment as a matter of law and
refused to grant it a new trial. On appeal, National challenges the district court's
interpretation of the contract.

                                            II.
                                  Standard of Review
       We review the district court's denial of a motion for judgment as a matter of
law de novo using the same standards as the district court. Amerinet, Inc. v. Xerox
Corp., 972 F.2d 1483, 1505 (8th Cir. 1992). A motion for judgment as a matter of law
presents a legal question to the district court and this court on review "whether there
is sufficient evidence to support a jury verdict." White v. Pence, 961 F.2d 776, 779
(8th Cir. 1992). We view the "evidence in the light most favorable to the prevailing
party and must not engage in a weighing or evaluation of the evidence or consider
questions of credibility." Id. Judgment as a matter of law is appropriate only when all


      7
         National included this argument in a motion for summary judgment filed prior
to trial and in motions for judgment as a matter of law or for new trial filed after the
court entered its judgment and order.

                                          -5-
of the evidence points one way and is "susceptible of no reasonable inference
sustaining the position of the nonmoving party." Id.

      We review a district court's interpretation of the contractual provisions of an
insurance policy de novo as a question of law. Noran Neurological Clinic, P.A. v.
Travelers Indem. Co., 229 F.3d 707, 709 (8th Cir. 2000). The parties agree that
Minnesota law governs this diversity action.

                                           III.
                                        Analysis
      National challenges the district court's determination that the insurance policy
was ambiguous. The district court based its decision on the purpose and public policy
of such provisions.8 National asserts that the district court created an ambiguity where
one did not exist. Without ambiguity, the court need only enforce the contract as
written. If enforced as written, the subject contract provides no coverage for the
Lappes.

      We reach a different conclusion than that of the district court in our de novo
review of the insurance contract. We find the contract to be without ambiguity. When
reviewing the construction of insurance policies, general contract principles govern.
Lobeck v. State Farm Mutual Automobile Ins. Co., 582 N.W.2d 246, 249 (Minn.
1998). "In interpreting a policy exclusion, any ambiguity in the language of the policy
must be construed in favor of the insured." Henning Nelson Constr. Co. v. Fireman's
Fund American Life Ins. Co., 383 N.W.2d 645, 652 (Minn. 1986). If, however, the


      8
         National raises three points on appeal including whether coverage existed
under its commercial policy, whether the Miller-Shugart agreement was collusive,
and whether the Miller-Shugart agreement was reasonable. We need only address the
first point because its resolution renders the subsequent points moot.

                                          -6-
contract is clear and unambiguous, then the language is given its plain and ordinary
meaning. Lobeck, 582 N.W.2d at 249; American Commerce Ins. Brokers, Inc. v.
Minnesota Mutual Fire & Casualty Co., 551 N.W.2d 224, 227–28 (Minn. 1996).
Moreover, when a provision within an insurance policy is subject to both a reasonable
and unreasonable interpretation, the reasonable construction controls, thereby
eliminating any ambiguity. Mutual Service Casualty Ins. Co. v. Wilson Township, 603
N.W.2d 151, 153 (Minn. Ct. App. 1999). There is a duty to "fastidiously guard
against the invitation to create ambiguities where none exist." Columbia Heights
Motors, Inc. v. Allstate Ins. Co., 275 N.W.2d 32, 36 (Minn. 1979). There is no need,
in this case, to look beyond the plain language of the contract.9


      Under the policy, the Lappes could not own the Buick for it to qualify as a
substitute vehicle. The Lappes operated their taxi company as a sole proprietorship.
The "dba" designation in the Lappes' business name–"Harold and Benita Lappa dba
Lappes Express Cab"–does not create a separate business entity from the Lappes as
individuals. Minnesota law–and the law of a majority of the jurisdictions that have
addressed this issue–hold that a "dba" designation does not create a separate entity


      9
         The court does not consider extrinsic evidence when determining if a contract
is ambiguous. See In re Hennepin County 1986 Recycling Bond Litig., 540 N.W.2d
494, 498 (Minn. 1995). "[A]n insurance policy is still a contract, and where its
provisions are unambiguous the courts have no right to thrust upon the insurer a risk
that it did not accept and for which it was not paid a premium." Simon v. Milwaukee
Automobile Mut. Ins. Co., 115 N.W.2d 40, 49 (Minn. 1962); see also Berken v.
Beneficial Standard Life Ins. Co., 221 N.W.2d 122, 124 (Minn. 1974) ("It is clear that
the clause before us meets this standard in that it is unambiguous and unequivocally
states the circumstances under which coverage will be denied. It is therefore
unnecessary to resort to a determination of the subjective intent of the parties.").

                                         -7-
in these circumstances.10 The Lappes, as individuals, owned the Buick and the
taxicabs, regardless of the existence of their sole proprietorship.


      The district court took a different approach. The court looked beyond the plain
language of the contract and found ambiguity in its provisions by looking to public
policy considerations. For authority, the district court cited the dissenting opinion in
Gabrelcik v. National Indemnity Company, 131 N.W.2d 534 (Minn. 1964). The
Gabrelcik dissent described the purpose of the temporary substitute automobile
provision as “to prevent the same policy from being used to provide coverage for
vehicles other than those for which a premium has been paid." Id. at 535. The
provision prevents an insured from purchasing one policy for one automobile, but
securing coverage for every car he owns without paying the proper premiums. The
district court reasoned that because the Lappes paid a premium on the Buick to
American Family, they were not attempting to defraud the insurers by seeking more
coverage than that for which they paid. The district court then concluded that a no-

      10
          See, e.g., O'Hanlon v. Hartford Acc. & Indem. Co., 639 F.2d 1019 (3d Cir.
1981); Duval v. Midwest Auto City, Inc., 425 F. Supp. 1381 (D. Neb. 1977), affirmed
578 F.2d 721 (8th Cir.1978); Pinkerton's v. Superior Court, 57 Cal. Rptr. 2d 356
(Cal. Ct. App. 1996); Providence Wash. Ins. v. Valley Forge, 50 Cal. Rptr. 2d 192
(Cal. Ct. App. 1996); Allstate Ins. Co. v. Willison, 885 P.2d 342 (Colo. App. 1994);
Chmielewski v. Aetna Cas. and Sur. Co., 591 A.2d 101, 113 (Conn. 1991); Purcell
v. Allstate Ins. Co., 310 S.E.2d 530 (Ga. 1983); Samples v. Ga. Mutual Ins. Co., 138
S.E.2d 463 (Ga. App. 1964); Georgantas v. Country Mut. Ins. Co., 570 N.E.2d 870
(Ill. 1991); Trombley v. Allstate Ins. Co., 640 So.2d 815 (La. App. 1994); Bushey v.
Northern Assurance, 766 A.2d 598 (Md. 2001); Gabrelcik v. National Indemnity
Company, 131 N.W.2d 534 (Minn. 1964); Hall v. Auto-Owners Ins. Co., 658 N.W.2d
711 (Neb. 2003); Toulousaine de Distrib. v. Tri-State Seed & Grain, 520 N.W.2d 210
(Neb. 1994); Carlson v. Doekson Gross, Inc., 372 N.W.2d 902, 906 (N.D. 1985);
Recalde v. ITT Hartford, 492 S.E.2d 435 (Va. 1997).

                                          -8-
coverage finding would circumvent the other purpose of the provision, that is to
benefit the insured. In the district court's view, the Lappes could have reasonably
believed that “Harold and Benita Lappe dba Lappes Express Cab” identified a
separate business entity distinct from themselves individually, thus allowing it to be
covered under the National policy.


      Here, the plain language of the exclusion does not permit the insured, Harold
and Benita Lappe dba Lappe's Express Cab, to use another vehicle owned by them to
replace a covered vehicle. This language is very specific. And Minnesota law
indicates that an individual and a sole proprietorship are the same "entity" for
purposes of personal property ownership. As such, any automobile the Lappes own,
either individually or through their sole proprietorship, is excluded from coverage
under the plain language of National's temporary substitute automobile provision. The
district court erred in looking beyond the language of the provision to determine
intent or policy considerations. The judgment of the district court is reversed and the
garnishment action dismissed.


      A true copy.


             Attest:


                CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.




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