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In re Silcone Implant Insurance Coverage Litigation9/24/2002
It later applied the same reasoning to the claims of plaintiffs who had opted out of the global settlement. The insurers challenge this ruling.
Interpretation of language in an insurance policy is reviewed de novo. Seefeld, 481 N.W.2d at 64. Questions of waiver that do not involve questions of fact, as is the case here, are also reviewed as a matter of law. Montgomery Ward & Co. v. County of Hennepin, 450 N.W.2d 299, 304 (Minn. 1990). In 1995, 3M waived its right to seek payment for mechanical failure claims such as rupture that were expected or intended and these were not in any event covered by the policy. The district court in 1997 addressed whether the supplemental payments for rupture were included in that waiver and ruled that they were. While 3M seeks to avoid the waiver by characterizing the payments as a mere enticement to encourage these mixed-claim plaintiffs to settle, neither we nor the 1999 district court can characterize these supplemental payments as anything but payments for rupture. 3M waived coverage for expected and intended injuries—as it had to under the terms of the policy—and this waiver applies to the supplemental payments for mixed-claim plaintiffs. Consequently, we reverse the district court's ruling to the contrary as an error of law..
IX.
The insurers argue that the district court erred in awarding 3M its coverage-action fees and costs after finding that the insurers breached the implied covenant of good faith and fair dealing. Among other things, the insurers specifically argue that attorney fees are not recoverable under Minnesota law absent statutory authorization or breach of a contractual duty to defend and that the trial court's determination that 3M suffered no legally recognized damages as a result of any breach precludes a fee award.
When the facts are undisputed, whether an award of attorney fees is proper in a declaratory-judgment action to determine insurance coverage is a question of law subject to de novo review. Spicer, Watson & Carp v. Minn. Lawyers Mut. Ins. Co., 502 N.W.2d 400, 402 (Minn. App. 1993), review denied (Minn. Sept. 30, 1993).
Relying on tort cases stating that whether a common-law duty exists raises a factual question, 3M argues that the court's "delineation" of the insurers' implied duty of good faith, on which the court premised 3M's fee award, raises a factual question subject to a clearly erroneous standard of review. See Louwagie v. State Farm Fire & Cas. Co., 397 N.W.2d 567, 570 (Minn. App. 1986), review denied (Minn. Feb. 13, 1987); Johnson v. Urie, 394 N.W.2d 846, 849 (Minn. App. 1986), aff'd, 405 N.W.2d 887 (Minn. 1987). But unlike a common-law duty, a contractual duty, such as the implied duty of good faith requires contract interpretation. See Lake Superior Paper Indus. v. State, 624 N.W.2d 254, 258 (Minn. 2001). And like all issues involving contract interpretation, whether an implied contractual duty exists raises a question of law reviewable de novo. See U.S. v. Basin Elec. Power Co-op., 248 F.3d 781, 796 (8th Cir. 2001) (" he application of the implied covenant of good faith is * * * an issue of contract interpretation that we review de novo"). Accordingly, even if our decision turned on the scope of the insurers' implied duty of good faith, the standard of review is de novo.
The Morrison Exception
As a general rule, a litigant in Minnesota is not entitled to an award of attorney fees and costs absent explicit statutory or contractual authorization. Ly v. Nystrom, 615 N.W.2d 302, 314 (Minn. 2000). Under a limited exception, however, an insured may recover attorney fees it incurs in a coverage action when its insurer breaches a contractual dut
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