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Wangler v. Lerol11/13/2003
AFFIRMED IN PART, REVERSED IN PART, AND REMANDED.
[ ] Dean Richard Wangler appealed from a judgment awarding him $2,531.77 plus costs and disbursements from Ronald Orvin Lerol, but dismissing the remaining claims against Lerol and Farmers Union Mutual Insurance Company in his action arising out of an injury Wangler suffered during the course of his employment at Pine Ridge Company. We conclude the district court did not err in granting summary judgment dismissing Wangler's claim that Lerol and Farmers Union are equitably estopped from denying insurance coverage under the circumstances, and we affirm that part of the judgment. We further conclude the court erred in ruling Wangler's Miller-Shugart settlement agreement with the alleged tortfeasor, Pine Ridge, released Pine Ridge from any liability for Wangler's personal injuries, thus making an assignment of its negligence claim against Lerol and Farmers Union ineffective. We reverse the judgment insofar as it dismisses Wangler's negligence claim against Lerol and Farmers Union, and we remand for further proceedings.
I.
[ ] Wangler was employed by Pine Ridge, a corporation engaged in turkey farming, located near Rugby and partially owned by T.M. Snortland. The turkey farm was located on land owned by Snortland and his sister, Laura Fairfield. Lerol is an insurance agent who sold Farmers Union insurance policies to Pine Ridge, Snortland, and Fairfield.
[ ] On August 5, 1998, Wangler was injured while working at Pine Ridge. In July 1999, Wangler brought a negligence action against Pine Ridge, which did not carry workers compensation insurance. Pine Ridge submitted a claim through Lerol to Farmers Union, and Farmers Union assumed the defense of Pine Ridge under a reservation of rights in a farm liability policy that had been purchased through Lerol. Although the farm liability policy included coverage for employee liability claims, only Snortland and Fairfield were named insureds, and not Pine Ridge. After determining that Pine Ridge was not covered under an additional farmowners property policy or a farm umbrella policy issued through Lerol, Farmers Union withdrew its defense of Pine Ridge in Wangler's action.
[ ] After Farmers Union denied coverage, Pine Ridge sued Lerol and Farmers Union in October 1999 to recover damages it may have to pay as a result of Wangler's personal injury action. Pine Ridge claimed Lerol negligently failed to procure employee liability insurance for Pine Ridge and claimed Farmers Union was vicariously liable for the acts and omissions of its insurance agent, Lerol, under principles of respondeat superior.
[ ] In March 2000, Wangler and Pine Ridge entered into a Miller-Shugart settlement agreement. In McPhee v. Tufty, 2001 ND 51, 10 n.1, 623 N.W.2d 390, we explained a Miller-Shugart agreement:
Under Miller v. Shugart, 316 N.W.2d 729 (Minn. 1982), an insured defendant may settle a plaintiff's claims and stipulate judgment may be collected only from the proceeds of an insurance policy. See Medd v. Fonder, 543 N.W.2d 483, 485 (N.D. 1996). The stipulated judgment is not conclusive on the insurer, and the plaintiff judgment creditor has the burden of showing the settlement was reasonable and prudent. See Rebel v. Nodak Mut. Ins. Co., 1998 ND 194, 5 n.1, 585 N.W.2d 811.
[ ] The agreement here provided that Pine Ridge "stipulates to a judgment against it, and in favor of [Wangler], in the amount of $200,000.00"; Wangler "will in no way seek to collect this judgment from [Pine Ridge]"; the "judgment is explicitly not satisfiable by attachment nor shall it become a lien upon any of the assets of [Pine Ridge]"; Wangler "will only seek to satis
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