*10 years from substantial completion of improvement to real property. M.S.A. § 541.051. Two (2) years after discovery of defective improvement to real property, but no more than 12 years after substantial completion, unless negligent “maintenance, operation, or inspection of the real property improvement.” M.S.A. § 541.051(1)(d).

Modified Comparative Fault: 51% Bar. Damaged party cannot recover if it is 51% or more at fault. If 50% or less at fault, it can recover, although its recovery is reduced by its degree of fault.  Plaintiff’s recovery may be reduced by percentage of loss attributable to him, and at 51% fault, plaintiff’s economic damages are reduced and non-economic damages are barred. M.C.L.A. § 600.2959.

Med Pay: Med Pay subrogation clause is valid and enforceable. Travelers Indem. Co. v. Vaccari, 245 N.W.2d 844 (Minn. 1976).

PIP: Subrogation against a tortfeasor allowed only if claim isn’t based on negligence in maintenance or use of a motor vehicle, such as intentional tort, strict or statutory liability, or negligence other than use or operation of motor vehicle. M.S.A. § 65B.53 (1998); Banks v. Grant, 530 N.W.2d 864 (Minn. App. 1994). There are three (3) exceptions: INDEMNITY: If third party is “commercial vehicle” more than 5,500 lbs. curb weight and more than 50% at fault, claim against commercial vehicle’s reparation obligor can be brought via mandatory arbitration. M.S.A. § 65B.53(1) (1998). Section 65B.53 provides that an insurance carrier which paid Minnesota PIP benefits may pursue recovery against the reparation obligor of a commercial vehicle within six (6) years of the first no-fault payment. The expense of operating commercial vehicles is shifted from the private passenger no-fault insurer to the insurer of the heavy vehicle. The claim of the insured remains intact and is not affected by the indemnity claim. SUBROGATION: PIP carrier has right of “subrogation” (reimbursement) from the insured/claimant in order to prevent a double recovery of the same items of economic loss, but only if the cause of action is for other than negligence in the maintenance or use of a motor vehicle. This is because § 65B.51(1) provides for a set-off of no-fault benefits in the tort action. The insured must recover the same items of economic damages in order to be reimbursed. FOREIGN STATE: Because other states’ tort laws do not have the same set-off as Minnesota, subrogation reimbursement may be allowed if the no-fault insurer has paid benefits for an out-of-state accident, and the insured has been fully compensated.

Possible contribution from another PIP insurer with a higher priority for payments.

MADE WHOLE: Can be overridden with Plan language. Westerndorf v. Stasson, 330 N.W.2d 699 (Minn. 1983); Medica, Inc. v. Atlantic Mutual Ins. Co., 566 N.W.2d 74, 77 (Minn. 1997).

*No-Fault State. Monetary threshold. Enacted in 1975. Insured can file third-party suit for non-economic damages if threshold met of (1) § 65B.51(1) provides for a set-off of no-fault benefits in the tort action death; (2) permanent injury/disfigurement; (3) disability over 60 days; and (4) over $4,000 in medical expenses. M.S.A. § 65B.51(3)(a)(b) (1998). Economic losses not subject to threshold. Uninsured driver can recover economic losses from insured 3P. Munoz v. Kihlgren, 661 N.W.2d 301 (Minn. App. 2003).

The six (6) year contract statute of limitations (rather than the three (3) year statute of limitations for personal injury) applies because of the No-Fault Act is created by statute. It runs from the date of payment of the covered expense. State Farm v. Liberty Mut. Ins. Co.,678 N.W.2d 719 (Minn. App. 2004). An indemnity claim must be brought within six years of the date the first no-fault payment is made to the claimant. Metropolitan Prop. & Cas. Ins. Co. v. Metropolitan Transit Comm’n, 538 N.W. 2d 692 (Minn. 1995).

Automobile: Pro-Rata. M.S.A. § 72A.201 provides: “Subrogation recovery must be shared at least on proportionate basis with insured, unless deductible amount has been otherwise recovered by insured, except when insurer is recovering directly from uninsured third-party by means of installments, insured must receive full deductible share as soon as amount is collected and before any part of total recovery is applied to any other use. No deduction for expenses may be made from deductible recovery unless attorney is retained to collect recovery, in which case deduction may be made only for pro-rata share of cost of retaining attorney. An insured is not bound by any settlement of its insurer’s subrogation claim with respect to deductible amount, unless insured receives, as a result of subrogation settlement, the full amount of deductible. Recovery by insurer and receipt by the insured of less than the insured’s deductible amount does not affect insured’s rights to recover any unreimbursed portion of deductible from parties liable for loss.”

Deductible must be included in subrogation demand.

No deduction for expenses from deductible recovery unless attorney is retained to collect recovery, in which case deduction may be only for pro-rata share of cost of retaining attorney.

Property: None.

The general rule in Minnesota is that subrogation may be denied unless the insured is made whole. Hershey v. Physicians Health Plan of Minn., Inc., 498 N.W.2d 519 (Minn. 1993); Westendorf by Westendorf v. Stasson, 330 N.W.2d 699 (Minn. 1983). Minnesota employs the Made Whole Doctrine, but they refer to it as the “Full Recovery Rule.” Id. Unfortunately, Minnesota applies the Full Recovery Rule regardless of whether or not the subrogation rights at issue arise from equity or contract. Id; Medica, Inc. v. Atlantic Mut. Ins. Co., 566 N.W.2d 74, 77 (Minn. 1997); Hershey, supra. However, a case appears to open the door to avoiding the Full Recovery Rule where the Plan’s expressed terms provide to the contrary. Id; Medica, Inc., supra. The Minnesota Supreme Court, referring to the full recovery rule stated: “…absent express contract terms to the contrary, subrogation will not be allowed where the insured’s total recovery is less than the insured’s actual loss.”

They expressly refuse to follow those cases that a subrogation clause ipso facto authorizes first priority recovery by the insurer. Id. A Minnesota Supreme Court later held that because the doctrine of subrogation is equitable in origin, even when the right to subrogation is contractual, the carrier’s subrogation rights will be governed by equitable principles, unless the contract clearly and explicitly provides to the contrary. Medica, Inc., supra; Westendorf, supra. First, you must determine if the insured is made whole. Then, if the answer is “no”, you must look to see if the agreement “supersedes the general rules of equity by stating that [the insurer] is to be reimbursed even if its member recovers less than full compensation.” Westendorf, supra. It is not clear to what extent magic words are needed to accomplish this. At a minimum, however, it would seem that language which clearly and unequivocally demonstrate that the intent of the parties is to waive the Made Whole Doctrine, must be used. Maday v. Yellow Taxi Co., 311 N.W.2d 849 (Minn. 1981); Preferred Risk Mut. Ins. Co v. Pagel, 439 N.W.2d 755 (Minn. App. 1989). The 8^th Circuit has also weighed in on the issue, agreeing with the Minnesota Supreme Court that the Full Compensation Rule can be waived in the plan or policy. MedCenters Health Care v. Ochs, 26 F.3d 865 (8^th Cir. 1994).

The Minnesota Supreme Court in Westondorft applied Made Whole Doctrine despite a contract provision giving the HMO provider a right to reimbursement to extent of damages recovered, noting that equitable principles apply to all instances of subrogation unless modified by specific provisions in the contract. Westendorf, supra.

Majority Rule (via statute). Minnesota has adhered to the ELD for many years, although the Doctrine has been through a metamorphosis. Superwood Corp. v. Siempelkamp Corp., 311 N.W.2d 159; Hapka v. Paquin Farms, 458 N.W.2d 683 (Minn. 1990). In 1991 Minnesota codified the ELD in their statutes. Minn. Stat. § 604.10. The statute, entitled Economic Loss Arising From The Sale Of Goods, prohibits recovery in tort for damage to the product only, but provides exceptions where there is damage to “other property” or fraud or fraudulent or intentional misrepresentation. The ELD codification was amended in 2000 and applies to sales or leases that occur on or after August 1, 2000. Minn. Stat. § 604.101. Under the new statute, the ELD applies to products both sold and leased and both consumer and commercial transactions. Misrepresentation claims are now limited to cases involving intentional or reckless misrepresentation. The statute reads as follows:

Minn. Stat. § 604.10. Economic loss arising from the sale of goods. (a) Economic loss that arises from a sale of goods that is due to damage to tangible property other than the goods sold may be recovered in tort as well as in contract, but economic loss that arises from a sale of goods between parties who are each merchants in goods of the kind is not recoverable in tort; (b) Economic loss that arises from a sale of goods, between merchants, that is not due to damage to tangible property other than the goods sold may not be recovered in tort; (c) The economic loss recoverable in tort under this section does not include economic loss due to damage to the goods themselves; (d) The economic loss recoverable in tort under this section does not include economic loss incurred by a manufacturer of goods arising from damage to the manufactured goods and caused by a component of the goods; and (e) This section shall not be interpreted to bar tort causes of action based upon fraud or fraudulent or intentional misrepresentation or limit remedies for those actions.

Until recently, this general rule has been applied in Minnesota to prohibit a landlord’s insurer from maintaining a subrogation action against the landlord’s tenants because the tenant was a co-insured under the landlord’s policy. United Fire & Casualty Co. v. Bruggeman, 505 N.W.2d 87 (Minn. App. 1993). In 2012, the Supreme Court overruled the rule set forth in Bruggeman, and adopted a “case-by-case approach” to ascertain whether an insurer may maintain a subrogation action against the negligent tenant of its insured, based on the reasonable expectations of landlord and tenant under the lease and the facts of case. RAM Mut. Ins. Co. v. Rohde, 820 N.W.2d 1 (Minn. 2012), rejecting United Fire & Casualty Co. v. Bruggeman, 505 N.W.2d 87 (Minn. App. 1993), and abrogating Bigos v. Kluender, 611 N.W.2d 816 (Minn. App. 2000), St. Paul Cos. v. Van Beek, 609 N.W.2d 256 (Minn. App. 2000), Blohm v. Johnson, 523 N.W.2d 14 (Minn. App. 1994). Based on the lease as a whole, along with any other relevant and admissible evidence, the court determines whether it was reasonably anticipated by the landlord and the tenant that the tenant would be liable, in the event of a tenant-caused property loss paid by the landlord’s insurer, to a subrogation claim by the insurer. Melrose Gates, LLC v. Moua, 2015 WL 1608845 (Minn. App. 2015).

Section 60A.41 provides:

60A.41. Subrogation against insureds prohibited.

(a) An insurance company providing insurance coverage or its reinsurer for that underlying insurance coverage may not proceed against its insured in a subrogation action where the loss was caused by the nonintentional acts of the insured.

(b) An insurance company providing insurance coverage or its reinsurer for that underlying insurance coverage may not subrogate itself to the rights of its insured to proceed against another person if that other person is insured for the same loss, by the same company. This provision applies only if the loss was caused by the nonintentional acts of the person against whom subrogation is sought.

(c) This provision does not apply to or affect claims of a surety against its principal.

(d) Nothing in this section prevents an insurer from allocating the loss internally to the at-fault insured for purposes of underwriting, agency, and claims information.

Tort of Spoliation: Minnesota does not recognize an independent spoliation tort. Federated Mut. Ins. Co. v. Litchfield Precision Components, Inc., 456 N.W.2d 434, 437 (Minn.1990).

Sanctions: Spoliation sanctions are typically imposed where one party gains an evidentiary advantage over the opposing party by failing to preserve evidence. Himes v. Woodings-Verona Tool Works, Inc., 565 N.W.2d 469, 471 (Minn. App. 1997), review denied (Minn. 1997). This is true where the spoliator knew or should have known that the evidence should be preserved for pending or future litigation; the intent of the spoliator is irrelevant. Patton v. Newmar Corp., 538 N.W.2d 116, 119 (Minn. 1995). When the evidence is under the exclusive control of the party who fails to produce it, Minnesota permits the jury to infer that “the evidence, if produced, would have been unfavorable to that party.” Litchfield Precision Components, Inc., 456 N.W.2d at 437. Furthermore, the propriety of a sanction for the spoliation of evidence is determined by the prejudice resulting to the opposing party. Prejudice is determined by considering the nature of the item lost in the context of the claims asserted and the potential for correcting the prejudice. Patton, 538 N.W.2d at 119. Adverse Inference Instruction Michigan, Civ. J.I.G. § 12.35, reads that, “If either party does not produce evidence that the party could reasonably be expected to produce and intentionally destroys evidence which that party has been ordered to produce and fails to give a reasonable explanation, you may decide that the…evidence would have been unfavorable to that party.”

Property Damage. Liability imposed on parents when child willfully or maliciously causes injury to person or damage to property. M.S.A. § 540.18.

The limit of liability is $1,000.00. Child must be under 18-years-old.

Bias Offense. Liability imposed on parents when child commits bias offenses (race, color, religion, etc.). Parents are not liable if reasonable efforts are made to exercise control over minor’s behavior. M.S.A § 611A.79.

The limit of liability is $5,000.00. Child must be under 18-years-old.

Modified Joint and Several Liability. Generally several liability, unless particular defendant is more than 50% at fault, or if defendants act in concert. M.S.A. § 604.02; Staab v. Diocese of St. Cloud, 813 N.W.2d 68 (Minn. 2012).

Contribution in proportion to percentage of fault is allowed. A contribution plaintiff may sue for contribution in the underlying action or in a separate action. M.S.A. § 604.02; Anderson v. Gabrielson, 126 N.W.2d 239 (Minn. 1964). The six year statute of limitations for the contribution/indemnity actions do not begin to run until contribution plaintiff has paid. M.S.A. § 541.05(1)(5); Blomgren v. Marshall Mgmt. Services, Inc., 483 N.W.2d 504 (Minn. App. 1992).

Administrative Suspension: Failure to file a report as required by law will result in suspension of the driver’s license. M.S.A. § 169.09(14a). License will not be revoked for more than twelve (12) months. M.S.A. § 169.797.

Judgment: Upon receipt of a certified copy, the Commissioner will suspend the driver’s license of the judgment debtor. M.S.A § 171.182(3). The license will remain suspended until the judgment is satisfied. M.S.A. § 171.182(4).

Contact Information: State of Minnesota, Department of Public Safety, Driver & Vehicle Services Division, Town Square Building, 445 Minnesota Street, Ste. 190, Saint Paul, MN 55101-5190, (651) 297-3298, http://dps.mn.gov/divisions/dvs/contact/Pages/default.aspx.

Prohibits Intermediate Indemnity. Applies to Indemnification Agreements. Minn. Stat. §§ 337.01; 337.02.

Exception in cases when owner (or governmental entity) agrees to indemnify for strict liability under environmental laws.

First Party: Policy required insurer to compensate insured for the loss of value (depreciation) not fully compensated for by repair. Ciresi v. Globe & Rutgers Fire Ins. Co., 244 N.W. 688 (Minn. 1932).

Third Party: No court decisions regarding recovery allowed for diminution in value of a damaged vehicle in a third-party claim.

One-Party Consent: An individual has the right to record or disclose the contents of an oral, electronic or telephonic communication that they are a party to or if one of the parties has given prior consent to the recording of said communications. Minn. Stat. Ann. § 626A.02(d).

Per the Minnesota statute, a court can order a criminal defendant convicted of a felony to make restitution payments in addition to either/both imprisonment or payment of any applicable fine. M.S.A. § 609.10(5). Minnesota case law also states that an insurer will qualify as a “victim” for purposes of recovery of restitution. In the Matter of the Welfare of: L.J.M., 1991 Minn. App. LEXIS 309 (Minn. Ct. App. 1991).

Statute of Limitations: Intentional Acts – 2 Years. M.S.A. § 541.07. Wrongful Death – 3 Years. M.S.A. § 573.02. Negligence Claims – 6 Years. M.S.A. § 541.05. Medical Malpractice – 4 Years. M.S.A. § 541.076(b).

Subrogation of Medical and Disability Benefits are allowed. M.S.A. § 62A.095; Smith v. Am. States Ins. Co., 586 N.W.2d 784, 787 (Minn. Ct. App. 1998). Made Whole and Common Fund apply. Hershey v. Physicians Health Plan of Minn., Inc., 498 N.W.2d 519 (Minn. Ct. App. 1993) (Doctrine can be disclaimed in the policy); M.S.A. § 62A.095 (2001).

Minnesota law generally requires all vehicles, except emergency vehicles, to yield the right-of-way to a funeral procession when all its cars are in close formation with headlights lit. Since it contains no other specific language establishing precedence at intersections controlled by traffic lights, the implication seems to be that all vehicles must observe the traffic signal. Minn. Stat. § 169.20(6).

Statute of Limitations:  6 Years. M.S.A. § 176.061.

Can Carrier Sue Third Party Directly:  Yes.

Intervene:  Yes. The carrier can also actively participate.

Recovery from UM/UIM Benefits:     No.

Subrogation Against Medical Malpractice:  Yes.

Subrogation Against Legal Malpractice:  Yes.

Recovery Allocation/Equitable Limitations:  (1) Fees, Expenses; (2) 1/3 to Plaintiff; (3) Carrier Reimbursed, Less Pro-Rata Fees; and (4) Balance to Plaintiff as Credit. (Naig Settlement)

Employer Contribution/Negligence:  Lambertson Contribution/Reduction.

Attorney’s Fees/Costs:  Pro-Rata. The court has discretion to determine reasonable fees. The carrier can’t get fees.

Future Credit:  Yes, the carrier pays a percentage of future benefits because of reduction for costs/fees.

Auto No-Fault:  Yes.

Liability against the dog owner will be almost absolute. Any comparative negligence on the part of the victim is not considered. Minn. Stat. Ann. § 347.22.

Minnesota deals with employee leasing situations in its Workers’ Compensation Statute. It provides that when an employee leasing company and a client company are engaged in a common enterprise, the injured worker may proceed against either the employer for benefits or the responsible third party for damages. M.S.A. § 176.061.

Associations shall maintain property insurance and general liability insurance as to the common elements. Insurance policies must waive rights to subrogation against any unit owner or members of their household and against the association and the board of directors. M.S.A. § 515A.3-112(c)(2).

Percentage of Value: 80%

Damage to late model vehicle (newer than six-years-old) or high value vehicle (over $5,000) exceeds 80% of its actual cash value. M.S.A. § 168A.151(b)(c)(3).

Sudden Emergency Doctrine. Sudden Emergency rule applies as long as the emergency is not brought about by the defendant himself. Any act or failure to act amounting to negligence defeats the right to use the Sudden Emergency Doctrine. Kachman v. Blosberg, 87 N.W.2d 687 (Minn. 1958).

If emergency is caused by defendant’s own medical condition, he or she cannot use the Sudden Emergency Doctrine. It is treated the same as a normal negligence claim with the medical emergency as a circumstance for the jury to consider. Kellogg v. Finnegan, 823 N.W.2d 454(Minn. App. 2012); Trudeau v. Sina Contracting Co., 62 N.W.2d 492 (Minn. 1954).

Tort Claims Act: Minnesota Tort Claims Act.  M.S.A. § 3.736 (1976).

Notice Deadlines:  Notice is required within 180 days after the alleged loss or injury is discovered. M.S.A. § 3.736.

Claims/Actions Allowed:  State will pay for property damage or personal injury caused by an act or omission of a State employee while acting within scope of employment under circumstances where the State, if a private person, would be liable to the claimant, whether arising out of a governmental or proprietary function. M.S.A. § 3.736.

Comments/Exceptions:  The State and its employees are not liable for losses caused by:

(1) an act or omission of a state employee exercising due care in the execution of a statute or rule;

(2) discretionary functions; or

(3) conditions of highways or public buildings, except if caused by employee negligence.

See M.S.A. § 3.736 for other exclusions.

Damage Caps:  The State will not pay punitive damages. M.S.A. § 3.736.  Damages shall not exceed $500,000 per claimant or $1,500,000 per occurrence. Other caps apply for claims occurring prior to July 1, 2009. M.S.A. § 3.736.

First-Party Claims:  If the policy provides for the settlement of first-party auto total loss, the insurer may (1) offer a comparable and available replacement vehicle including all applicable taxes, license fees, or other fees, or (2) offer a cash settlement based on the actual cost of a comparable vehicle including all applicable taxes, license fees, or other fees. M.S.A. § 72A.201.

Third-Party Claims:  No applicable statute, case law, or regulation governing recovery of sales tax.

Service Value:  No Case Law

Intrinsic Value:  “In such cases, as in actions for conversion of property of a like character …it is not error to allow the owner to recover their value to him…” Drake v. Auerbach, 35 N.W. 367 (Minn. 1887).

Sentimental Value:  Dog was personal property and its loss would be measured by its fair market value. Sawh v. City of Lino Lakes, 823 N.W.2d 627 (Minn. 2012).

Legal Authority: 

Tort Liability, Political Subdivisions: M.S.A. §§ 466.01, et seq.  Municipality liable for torts of their employees acting within scope of employment, regardless whether the action is governmental or proprietary.  M.S.A. § 466.02.

Notice Deadlines:  Notice of Claim must be given within 180 days of loss.  M.S.A. § 466.05.

Claims/Actions Allowed:  Liable for negligent design, maintenance or operation of sewer system if no evidence that City balanced the costs and benefits of upgrading system.  Nordlie v. City of Maple Lake, 2006 WL 923649 (Minn. App. 2006) (unpublished).

Comments/Exceptions:  Exceptions to liability: (1) Accumulation ice and snow; unless public building; (2) Discretionary acts (arises out of a planning-level/policy-making decision); (3) Parks and recreation areas; (4) Beach of pool equipment; and (5) Any loss other than property damage or personal injury/death.  M.S.A. § 466.03.

Damage Caps:  $500,000 Per Person; $1,500,000 Per Occurrence after July 1, 2009).  If claim arises out of the release of a hazardous substance, then 2x the applicable limits apply.  No punitive damages. If liability insurance, limits of insurance are the maximum.  M.S.A. § 466.04.

Cell Phone/Texting:  A driver who has a learner’s permit or provisional license may not use a cell phone in any manner while operating their vehicle. Exceptions include emergencies or emergency situations.  M.S.A. § 171.05. It is illegal for drivers under age 18 to use a cell phone, whether hand-held or hands-free — except to call 911 in an emergency. M.S.A. §§ 171.05 and 171.055(2)(a).

It is illegal for drivers of all ages to compose, read, or send electronic messages or access the Internet on a wireless device when the vehicle is in motion or part of traffic. This includes being stopped in traffic or at a light. The law does not apply to devices that are permanently affixed to the vehicle or global positioning or navigation systems. M.S.A. § 169.475.

No person operating a vehicle may hold a cell phone in their hand or use the phone for video streaming, Snapchat, gaming, or to look at any photos or videos. The driver may use the phone in hands-free mode, obtain emergency assistance, or use GPS and other systems that can only be used for navigation. M.S.A. § 169.475

New law passed on April 12, 2019 and is effective beginning August 1, 2019.

Other Prohibitions:  No person, while operating a motor vehicle, shall wear headphones or earphones that are used in both ears simultaneously. Exceptions include hearing aids and emergency personnel.  M.S.A. § 169.471.

Y/N/U:  Y

Statute:  The statute includes “aliens”, but is silent on “legal” status.  Minn. Stat. § 176.011-9.

Case Law: Correa v. Waymouth Farms, Inc., 664 N.W.2d 324 (Minn. 2003).

Comments/Explanation/Other:  Correa held that if the legislature meant to exclude illegal aliens, they would have placed it in the statute.

Admissibility Standards: Frye-Mack Standard

Case/Statutory Law:  State v. Mack, 292 N.W.2d 764 (Minn. 1980).

Comments:  Hybrid standard using State v. Mack and Frye v. United States. To be admitted, testimony must (1) involve technique which has gained general acceptance in the scientific community, and (2) the testing must be done properly. An advisory committee is considering whether the Minnesota Supreme Court should replace the state’s version of the Frye standard with the Daubert test.

Imputed Contributory Negligence Law:  Negligence of driver is not imputed to owner, absent control or special relationship such as master/servant. Weber v. Stokely-Van Camp, Inc., 144 N.W.2d 540 (Minn. 1966); Thomas Oil, Inc. v. Onsgaard, 215 N.W.2d 793 (Minn. 1974).

Vicarious Liability/Family Purpose Doctrine:  If vehicle driven with consent of owner, the driver is deemed to be the agent of the owner and owner is liable for any damages resulting from operation of vehicle. M.S.A. § 169.09, subd. 5a.

The Family Purpose Doctrine is no longer valid in Minnesota because it has been replaced by M.S.A § 169.09. Jacobsen v. Dailey, 228 Minn. 201, 201, 36 N.W.2d 711, 712 (1949).

Sponsor Liability for Minor’s Driving:  No sponsorship liability statute. However, under M.S.A § 540.18, liability is imposed on parents when child willfully or maliciously causes damage to property or injury to persons.

Statute of Limitations/Repose: 6 years for personal injury. M.S.A. 541.05. Wrongful Death is 3 years. M.S.A. § 573.02. Strict Liability is 4 years. M.S.A. § 541.07.

Liability Standards: Negligence, Strict Liability, Warranty.

Fault Allocations: Modified Comparative. M.S.A. § 604.01(1).

Non-Economic Caps/Limits On Actual Damages: No.

Punitive Y/N and Limits: Yes.

Heeding Presumption?: No.

Innocent Seller Statute: Yes. M.S.A. ֻ§ 544.41.

Joint and Several Liability: Yes, if > 50%. M.S.A. § 604.02.

Available Defenses: Assumption of Risk; Misuse; Alteration; Learned Intermediary; Inherently Unsafe Products; State of the Art; Presumption; Compliance With Government Standards; Alcohol/Drugs; Sophisticated User.

Restatement 2^nd or 3^rd?: Neither.

Key In The Ignition Statutes: N/A

Common Law Rule: Liability may be imposed on an owner of a stolen vehicle for negligence and consequent injury or damage to a third party only if special circumstances created a foreseeable risk of theft or a risk of a more serious injury. Illinois Farmers Ins. Co. v. Tapemark Co., 273 N.W.2d 630 (Minn. 1978); See also, Whaley v. Anderson, 461 N.W.2d 913 (Minn. 1990) (Foreseeability that a car will be stolen is an issue of negligence; and foreseeability that the thief will drive negligently and cause an accident is a matter of proximate causation. The court blends foreseeability and proximate cause in its analysis).

Minn. Stat. § 60A.41: “Subrogation Against Insureds Prohibited” deals directly with the ASR. Minn. Stat. § 60A.41(a) states that “[a]n insurance company … may not proceed against its insured in a subrogation action where the loss was caused by the non-intentional acts of the insured.” Minn. Stat. § 60A.41(b) specifically prohibits an insurance company from subrogating “itself to the rights of its insured to proceed against another person … insured for the same loss by the same company.” If a tortfeasor and injured party have separate policies from the same insurer, the insurer does not gain equitable subrogation rights to money the injured party receives from the tortfeasor by paying the injured party for their injuries. Illinois Farmers Ins. Co. v. Schmuckler, 603 N.W.2d. 138 (Minn. Ct. App. 1999). In Schmuckler, Schmuckler received $31,889.99 from her renter’s insurance policy and $32,455 from a subsequent lawsuit against Creurer after Creurer backed her car into Schmuckler’s rented town home. Schmuckler had renter’s insurance with Illinois Farmers Insurance Co. (“Farmers”) and Creurer had auto insurance through Farmers. The court barred Farmer’s equitable subrogation attempt against the money Schmuckler had received from Creurer on the basis that Farmers had failed to acquire subrogation rights to the money because Minn. Stat. § 60A.41(b) bars insurers from subrogating “for the same loss by the same company.” In Depositors Ins. Co. v. Dollansky, 2017 WL 6273144 (Minn. App. 2017), Dollansky rented a motor home from caravan Trailers, and it started on fire. The agreement said Dollansky was responsible for all damage and agreed to indemnify Karavan. Karavan’s carrier, Depositors Insurance Company, submitted the claim to Dollansky’s carrier, American Family, who paid Karavan part of its deductible, but denied the balance. Depositors paid Karavan $204,895 and sued Dollansky for breach of the rental agreement. The court dismissed the claim because the Depositor’s suit was prohibited by § 60A.41. Depositors appealed, claiming that § 60A.41 only prohibited subrogation suits against the carrier’s own named insured, not somebody who might be an “insured” due to language of the insurance contract (i.e., additional insured, etc.). The court held that § 60A.41 prevented subrogation even if the defendant isn’t a “named insured.”

Authority: M.S.A. § 72A.201(6) and (7).

Summary: An insurer may not require an insured to use non-OEM parts for repairs, except for window glass repairs. (Note: Certain parts of this statute were found unconstitutional in Safelite Group, Inc. v. Rothman, 229 F.Supp.3d 859 (D. Minn. 2017). As a result, the statute may change in the near future.