A federal appeals court Friday overturned a lower court ruling and held that a Minnesota municipality’s coverage limit for accidents under an auto policy issued by a Travelers Cos. Inc. unit does not exceed a statutory tort cap of $500,000 in a lawsuit filed by an injured bicyclist.
The ruling by the 8th U.S. Circuit Court of Appeals, reversed a decision by a district court in Prisk v. Travelers Indemnity Co. of America.
In May 2020, James Prisk was riding his bicycle in Hermantown, Minnesota, when he was struck and injured by a vehicle owned by the city and driven by a city employee. At the time of the accident, the city was insured by Travelers Indemnity Co. of America.
Mr. Prisk sued Travelers, seeking a declaratory judgment that an auto insurance policy between Travelers and Hermantown authorized up to $2 million in coverage for his bodily injury claim.
A district court ruled in Mr. Prisk’s favor, saying Hermantown waived the statutory limit on municipal tort liability when it purchased $2 million in insurance coverage from Travelers and that the policy therefore authorized up to $2 million in coverage.
However, in Friday’s decision Judge Steven Colloton of the 8th Circuit U.S. Court of Appeals in Des Moines, Iowa, ruled the policy authorized coverage up to only $500,000 for Mr. Prisk’s claim.
The policy provided “different limits for different types of liabilities,” the court said in its decision.
“The policy provides a coverage limit of $2 million for claims not subject to the statutory limit set forth in Minn. Stat. Section 466.04…But for claims subject to the statutory limit in Section 466.04, the endorsement expressly limits coverage to $500,000,” the ruling said.
“The substance of this contractual arrangement is no different than if the parties agreed on two separate policies for the two different types of liability.”
The appellate court remanded the case to the district court with a direction to enter a judgment for Travelers.
