Depositors Insurance v. Dollansky – CoA Decision
Minnesota Court of Appeals
12/11/2017

In the recent Minnesota Court of Appeals of decision Depositors Insurance Company v .Dollansky, the Court held that Minnesota Statutes Section 60A.41 prohibiting insurance companies from subrogating against their own insured prohibits insurance companies from subrogating against a third-party renter that is defined as an “insured” by the terms of the policy, even if the renter is not a “named insured” on the policy.

Craig and Julie Dollansky rented a motorhome from Karavan Trailers. Pursuant to the rental agreement, Dollansky was required to provide insurance for Vehicle Liability, Collision, and Comprehensive Insurance covering the Renter (Dollansky), Karavan, and the vehicle.  Dollansky was driving the vehicle when it caught fire, causing damage to the motorhome in the amount of $204,895.05. The cause of the fire is unknown.  After paying the claim, Karavan’s insurer Depositor brought suit against Dollansky in subrogation for the value of the damaged motorhome.  The District Court granted summary judgment for Dollansky, concluding that Dollansky was “insured” under Depositor’s policy and that Minnesota Statute section 60A.41 therefore prohibits Depositors from proceeding in a subrogation action against Dollansky, even though the rental contract required Dollansky to provide insurance coverage and to be liable for damage during the rental period.

On appeal, Depositors argued Dollansky was not “an insured” under the Depositors’ policy.  Depositors argued that “its insured” referenced in Section 60A.41(a) only applied to the named insured (“i.e., the person purchasing the policy”). The Court of Appeals rejected this argument, finding that under the dictionary definition, an “insured” is “[s]omeone who is covered or protected by an insurance policy.”  Pursuant to Depositors’ policy, “Who Is An Insured” defines an “insured” as “[a]nyone . . . using with your [Karavan’s] permission a covered ‘auto’ you own, hire, or borrow.”   Because Dollansky, as a renter, was using the vehicle with Karavan’s permission, he was an “insured” under the policy.  The Dollansky decision provides guidance and interpretation regarding the application of Section 60A.41 to a renter who is also defined as an “insured” under the applicable policy.