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STATE OF MINNESOTA
IN SUPREME COURT
A03-07

Court of Appeals  
Hanson, J.  
Took no part, Anderson, G. Barry, J.  
Ronald Ralph Gerdesmeier, et al.,  
Appellants,  
vs.  
Jeffry Marc Sutherland,  
Defendant,  
Filed:  December 16, 2004  
Office of Appellate Courts  
Illinois Farmers Insurance Company, applicant for intervention,  
Respondent,  
and  
Ronald Ralph Gerdesmeier, et al.,
Appellants,  
vs.  
Illinois Farmers Insurance Company,  
Respondent.  

S Y L L A B U S An arbitration clause will not be enforced to enable an uninsured motorist insurer to avoid paying damages established by a valid judgment for the insured against the uninsured motorist where the insurer
received notice of and had an opportunity to intervene in the suit against the uninsured motorist.
Reversed.
            Heard, considered, and decided by the court en banc.
O P I N I O N HANSON, Justice.
            Appellant Ronald Gerdesmeier was injured by an uninsured motorist. After submitting an uninsured motorist (UM) claim with his insurer, Respondent Illinois Farmers Insurance Company (Farmers), Gerdesmeier and his wife, Mary, brought a tort action against the uninsured motorist.  When default judgment was entered in favor of the Gerdesmeiers in the tort action, they presented the judgment to Farmers and demanded payment. Farmers declined and, for the first time, demanded arbitration of the UM claim. The Gerdesmeiers brought suit on the policy and the district court granted judgment on the pleadings for the Gerdesmeiers, holding that Farmers had notice of and an opportunity to intervene in the tort action and that its failure to do so prevented it from compelling arbitration.  The court of appeals reversed, holding that the arbitration clause required the parties to arbitrate the UM claim despite the default judgment in the tort action. Gerdesmeier v. Sutherland, No. A03-7, 2003 WL 22999402 at *1-*3 (Minn. App. Dec. 23, 2003).  We reverse the decision of the court of appeals and reinstate the judgment in favor of the Gerdesmeiers.
            On December 6, 2000, Ronald Gerdesmeier was injured when an automobile driven by Jeffry Marc Sutherland struck the automobile in which Gerdesmeier and his wife, Mary, were riding.  The Gerdesmeiers

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Minnesota Law