Horse training is excluded from insurance coverage as custom
farming under farm and ranch insurance policy. Therefore, the insurance company is
not obligated to pay $50,000 claim for injury to horse kept in the care of the insured
Appellant Grinnell Mutual Reinsurance Company challenges the district
court's decision to grant respondent Kathy Harrison's motion to file a supplemental
complaint in garnishment arguing that its policy excludes coverage for the loss in
question and that Harrison's motion was not timely. We reverse.
Respondent Kathy Harrison served a summons and complaint on James Donovan claiming that she brought her horse to Donovan's farm to be trained, and while her horse was there, Donovan allowed the horse to escape and it was injured. Harrison asserted that the damage to her horse was due to Donovan's negligence.
Donovan had a farm and personal liability policy issued by appellant Grinnell Mutual Reinsurance Company (Grinnell). After Grinnell received notice of Harrison's summons and complaint, Grinnell wrote to Donovan stating that Harrison's loss was not covered because Harrison's horse was in Donovan's care at the time of the loss and a policy exclusion applied in such a situation. Grinnell wrote to Donovan a second time, stating that a policy exclusion regarding loss to property in furtherance of a business also prevented coverage.
Harrison and Donovan entered into a settlement agreement and stipulation for the entry of judgment pursuant to Miller v. Shugart, 316 N.W.2d 729 (Minn.1982). In the settlement agreement, Donovan admitted that he was liable to Harrison for the injuries sustained by Harrison's horse. Harrison and Donovan agreed that damages were in the amount of $50,000. Donovan paid Harrison $1,500 to be released from all personal liability and Harrison had the right to seek payment of the remaining $48,500 from Grinnell. Judgment was entered against Donovan.
Harrison served Grinnell with a garnishment summons. Grinnell disclosed that it held no money or other property that was attachable and served Harrison with a non-earning disclosure. Harrison moved for leave to file a supplemental complaint making Grinnell a party to the action. The district court granted the motion.
Exclusions in insurance policies are construed narrowly against the insurer. SCSC Corp.
v. Allied Mut. Ins. Co., 536 N.W.2d 305, 314 (Minn.1995). Any ambiguity in the insurance
contract must be construed in favor of the insured. State Farm Ins. Cos. v. Seefeld, 481
N.W.2d 62, 64 (Minn.1992). This court examines whether ambiguity exists in an insurance
policy de novo. American Commerce Ins. Brokers, Inc. v. Minnesota Mut. Fire & Cas.
Co., 551 N.W.2d 224, 227 (1996).
The language of an insurance policy will be held ambiguous only if it is reasonably subject to more than one interpretation. If an ambiguity exists, the court construes the language against the insurer. However, the court must "fastidiously guard against the invitation to 'create ambiguities' where none exist." If no ambiguity exists, there is no reason for construction, and the court is bound to attribute the usual and accepted meaning to the phrase.
Id. at 227-28 (quoting Columbia Heights Motors, Co. v. Allstate Ins. Co., 275 N.W.2d 32, 36) (Minn.1979)) (citations omitted).
For Harrison to succeed on her motion to file a supplemental complaint against Grinnell, she must show probable cause that Grinnell would be liable for the judgment debt of its insured debtor, Donovan. See Minn.Stat. § 571.75, subd. 4 (1996). In an insurance case, a finding of probable cause " 'depends on whether the evidence shows probable grounds for believing that the garnishee might be held liable under the policy.' " Poor Richards Ins. v. Chas. Olson & Sons & Wheel Services Co., Inc., 380 N.W.2d 225, 227 (Minn.App.1986) (quoting Gubrandsen v. Pelto, 205 Minn. 607, 610, 287 N.W. 116, 117-18 (1939)).
Two coverage provisions of the Grinnell policy are in issue, Coverage A and Coverage
A-1. Coverage A states:
We will pay subject to the liability limits and the terms of the policy all sums arising out of any one loss which an insured person becomes legally obligated to pay as damagesbecause of bodily injury or property damage covered by this policy.
An exclusion to Coverage A states:
We do not cover property damage to property occupied or used by any insured person or rented to or in the care of any insured person. But we will cover property damage to such property caused by Fire, Smoke or Explosion.
Grinnell contends that this exclusion unambiguously excludes coverage under Coverage A in this case. We agree. The horse that was injured was in the care of an insured person (Donovan) when it was injured. Therefore, all damage suffered was property damage to property in the care of an insured person, and there is no coverage under Coverage A.
But Coverage A-1 provides coverage for property damage to property in the care of an
insured person. Coverage A-1 states:
We will pay subject to the liability limits and terms of the policy all sums arising out of any one loss for property damage to property owned by others in the care of an insured person.
An exclusion to Coverage A-1 states:
We will not pay for property damage arising out of custom farming.
Grinnell contends that this exclusion unambiguously excludes coverage under Coverage A-1 in this case. We agree.
The policy defines custom farming as follows:
"Custom farming" means the use of any farm machinery, farm implement or draft animal in connection with farm operations for hire; or the care or raising of livestock or poultry for hire.
Respondent acknowledges that "livestock" means, "Domestic animals, such as cattle or horses, raised for home use or profit," The American Heritage Dictionary 1053 (3rd ed.1992), but argues that because the injured horse is not a horse raised by Donovan for home use or profit, the horse is not livestock. Respondent's argument, however, ignores the policy definition of "custom farming," which includes the care or raising of livestock for hire. The horse is within the usual and ordinary meaning of "livestock" because it was raised for home use or profit; it did not cease to be livestock when it was placed in Donovan's care. And Donovan's care of the horse is within the policy definition of "custom farming" because his care of the horse was the care of livestock for hire.
We conclude that the policy unambiguously excludes coverage for injuries to Harrison's horse while the horse was in Donovan's care and that the evidence shows no probable grounds for believing that Grinnell might be held liable under the policy. We therefore reverse the grant of Harrison's motion to file a supplemental complaint in garnishment.
Because we conclude that there is no coverage under the policy, we need not address the timeliness of Harrison's motion.
AMUNDSON, Judge (dissenting).
I respectfully dissent. Grinnell's insurance policy, if not clearly covering Donovan in this instance, is ambiguous. Once the district court determined that the insurance coverage was ambiguous, the court properly ruled that there was probable cause that Grinnell could be liable for the debt of its insured, Donovan, to Harrison.
I agree that coverages A and A-1 are the two possible policy provisions that could cover Donovan's liability. I disagree with the interpretation of the coverages and possible exclusions. The majority opinion classifies horse training as "custom farming," and therefore states it is a valid exclusion in the insurance policy.
Insurance policy exclusions are to be construed narrowly against the insurer. SCSC Corp. v. Allied Mut. Ins. Co., 536 N.W.2d 305, 314 (Minn.1995). To find that training, not breeding or boarding horses, is custom farming is absurd. Does training dogs qualify as custom farming? Imagine how the great horse trainers such as James (Sunny Jim) Fitzsimmons, who trained the 1930 triple crown winner Gallant Fox and the 1935 triple crown winner Omaha, or Lucien Laurin, who trained the 1973 triple crown winner Secretariat, would have reacted to calling their work "farming."
Three hundred years before Christ, a Greek soldier, named Xenophon, wrote what is still the seminal work on horse training, The Art of Horsemanship. Contemporary people now recognize him for invaluable contributions to the discipline of war, combat, cavalry, and social observations from his more famous Anabasis. Wouldn't he be chagrined to have his work so poorly understood?
In the present case, "custom farming" is defined in the insurance policy as "the use of any * * * draft animal in connection with farm operations for hire; or the care or raising of livestock * * * for hire." Livestock is defined as "Domestic animals, such as * * * horses, raised for home use or for profit." The American Heritage Dictionary 1053 (3d ed.1992). Harrison's horse was not a draft animal used by Donovan in the operation of his farm nor a horse raised by Donovan for home use or profit.
This case demonstrates too well how far we have come from our agrarian heritage.
Potatoes do not grow on trees, apples are not grown in the ground, and merely training an
animal is not farming. We ignore the true nature of these invaluable disciplines at our
own peril. What, in fact constitutes "farming" or "custom farming,"
should be important to anyone who eats. Eighty years ago, William Jennings Bryan said it
You come to us and tell us that the great cities are in favor of the gold standard; we reply that the great cities rest upon our broad and fertile prairies. Burn down your cities and leave our farms, and your cities will spring up again as if by magic; but destroy our farms and the grass will grow in the streets of every city in the country.
Unlike my colleagues, I cannot reach the conclusion that training a horse is considered custom farming; this determination is ambiguous at best. I would affirm the district court's decision.
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