On January 13, 2015, the Minnesota Supreme Court will hear an appeal from the victims of a 2008 school bus crash in Cottonwood in Lyon County. The crash was major news in Minnesota for several months as the criminal case played out. The bus had been crashed into by a pickup truck driven by Guatemalan immigrant, Olga Marie Franco, who was charged in state court with criminal vehicular homicide and operation and was subsequently charged in federal court with aggravated identity theft and false representation of a social security number.
As a result of the crash, 4 children were killed and 15 people were injured when the collision occurred and the bus tipped over.
Franco did not win in her criminal appeal, but on January 13 the Minnesota Supreme Court will hear arguments about the victims’ ability to bring an underinsured motorist claim (UIM) against their UIM carrier. Insurance policies in Minnesota require a minimum amount of UIM coverage which provides for insurance coverage for the victim if the at-fault driver does not have adequate coverage. Very generally, in order to trigger a UIM claim, the at-fault driver’s policy or the occupied vehicle’s UIM policy must be “exhausted” or maxed-out.
This will be the focus of the argument in Sleiter, et al. v. American Family Insurance Group (No. A13-1596). In the Minnesota district (trial) court, the victims sought underinsured motorist coverage from American Family. Here, Sleiter was in the school bus struck by the pickup truck, and he was injured–sustaining over $140,000 in damages.
The school bus had a $1 million UIM policy through Auto Owners Insurance Company, and Auto Owners tendered its limit plus interest to the court. The at-fault carrier also tendered over $61,000, representing its maximum liability coverage.
A “special master” was appointed due to the limited coverage and number of claimants whose damages exceed $5 million. Even though Sleiter sustained almost $140,000 in damages, he was was awarded his representative share from the pickup truck’s liability policy ($1,600.33) and the school bus’s UIM policy ($34,543.70).
Over $100,000 short on compensation for his damages, Sleiter sought UIM coverage from his (or his parents’) insurer, American Family which had limits of $100,000 per person and $300,000 per accident. American Family denied Sleiter’s claim on the basis of the greater UIM limits on the school bus, Minnesota statutes, and the policy langaguge.
The district court granted summary judgment in favor of American Family, finding that the UIM policy had not been triggered under Minnesota law and the policy because there was $5 million in UIM coverage on the bus. Sleiter appealed to the Minnesota court of appeals that Seliter’s UIM claim with American Family should turn on the precise amount of coverage received from the school bus’s UIM policy rather than the school UIM policy limits.
However, in an unpublished opinion, the court of appeals held that it was the school bus’s policy limit that applied and not the amount actually recovered. Citing precedent in a 2001 case, the court of appeals concluded that Minnesota law requires this rather harsh result.
Nonetheless, the Minnesota Supreme Court did grant Sleiter’s petition for review so it is possible that Minnesota’s highest court will change its position. At the very least, it will consider whether Minnesota’s underinsured motorist law preempts coverage under a person’s own UIM policy where a serious accident with multiple claimants quickly reduces the amount available to the injured parties.