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Farm Bureau Mut. Ins. Co. v. Earthsoils, Inc.

Farm Bureau Mut. Ins. Co. v. Earthsoils, Inc.

Court of Appeals of Minnesota

April 2, 2012, Filed

A11-693

Opinion

 [*874]  BJORKMAN, Judge

Appellant Farm Bureau Mutual Insurance Company challenges the district court's summary judgment in favor of its insured, respondent Earthsoils, Inc. Farm Bureau argues that the district court erred by concluding that the insurance policy requires Farm Bureau to defend and indemnify Earthsoils  [**2] for claims asserted by respondents Laverne Ptacek and Jeffrey Ptacek (father and son, collectively the Ptaceks). We reverse.

FACTS

The Ptaceks jointly operate a farm in Steele County. Earthsoils provides agronomy consulting services to farm operators and sells fertilizer based on its recommendations. At all relevant times, Earthsoils had commercial general liability (CGL) insurance coverage through a policy issued by Farm Bureau.

In spring 2005, the Ptaceks hired Earthsoils to test and analyze their soil and make fertilizer recommendations for their corn crop. Earthsoils did so and represented to the Ptaceks that the nitrogen fertilizer it recommended was sufficient in quality and quantity to produce 180-200 bushels of corn per acre. The Ptaceks purchased and applied the recommended  [*875]  fertilizer, but their corn crop produced less than one-half of the anticipated yield. The Ptaceks initiated a lawsuit against Earthsoils, claiming breach of contract, consumer misrepresentation, negligence, and breach of warranties. The complaint alleges that Earthsoils supplied nitrogen fertilizer of "inferior quality and insufficient quantity to produce a corn yield of 180-200 bu/ac and as a result, the  [**3] Ptaceks' corn . . . was deficient in nitrogen and averaged a yield of less than one-half of what should have been produced." Earthsoils tendered the defense of the action to Farm Bureau, and Farm Bureau defended Earthsoils under a reservation of rights.

Farm Bureau subsequently initiated this action seeking a declaration that it is not obligated to defend and indemnify Earthsoils under the CGL policy (the policy).1 Farm Bureau moved for summary judgment. The district court denied the motion and sua sponte granted summary judgment in favor of Earthsoils and the Ptaceks, concluding as a matter of law that the policy covers all of the Ptaceks' claims and Farm Bureau is obligated to both defend and indemnify Earthsoils for any damages awarded on the Ptaceks' claims. This appeal follows.

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812 N.W.2d 873 *; 2012 Minn. App. LEXIS 30 **; 2012 WL 1069906

Farm Bureau Mutual Insurance Company, Appellant, vs. Earthsoils, Inc., Respondent, Laverne Ptacek, et al., Respondents.

Subsequent History: Review denied by Farm Bureau Mut. Ins. Co. v. Earthsoils, Inc., 2012 Minn. LEXIS 360 (June 27, 2012)

Related proceeding at Ptacek v. Earthsoils, Inc., 844 N.W.2d 535, 2014 Minn. App. LEXIS 30 (Minn. Ct. App., Mar. 31, 2014)

Related proceeding at Earthsoils, Inc. v. Ptacek, 2017 Minn. App. Unpub. LEXIS 583 (Minn. Ct. App., July 3, 2017)

Prior History:  [**1] Steele County District Court File No. 74-CV-10-1417.

Disposition: Reversed.

CORE TERMS

tangible property, physical injury, plants, Farm, crop, damages, corn, fertilizer, coverage, insured, anticipated, indemnify, potato, property damage, economic loss, insurance policy, nitrogen, growers, duty to defend, recommended, film

Civil Procedure, Judgments, Summary Judgment, Evidentiary Considerations, Insurance Law, Claim, Contract & Practice Issues, Policy Interpretation, Judicial Review, Appeals, Summary Judgment Review, Standards of Review, Entitlement as Matter of Law, Genuine Disputes, Obligations of Parties, Insurers, Allegations in Complaints, Commercial General Liability Insurance, General Overview, Business Insurance, Duty to Defend, Indemnification, Ordinary & Usual Meanings, Plain Language, Damages, Property Claims, Coverage, Exclusions, Economic Loss Exclusions