## Facts

- Jerry Roseth, doing business as Philip Livestock Express, owned a livestock trailer that he leased for hauling livestock under an arrangement giving Roseth 20% of the trucking charge.
- Roseth purchased a livestock cargo policy issued by St. Paul Property & Liability Insurance Company through a local agency.
- The policy covered livestock mortality only and excluded coverage for any animal able to walk from the conveyance or able to walk after unloading.
- A hauling accident occurred in South Dakota while 109 calves were being transported; 11 calves were killed and 2 were missing, while the remainder survived but were allegedly injured.
- Roseth reported the loss; St. Paul’s adjuster contacted Roseth and stated he did not have the policy in front of him but that the insurer would perform according to the policy’s provisions.
- The adjuster advised Roseth to minimize loss, and the surviving calves were sold promptly at a reduced price; Roseth claimed an $8,865.98 loss from the diminished sale price of the surviving calves.
- St. Paul paid for the dead and missing calves but denied payment for the devaluation of the surviving calves based on the policy’s exclusion.

## Issues

1. Whether the insurer was equitably estopped from relying on an unambiguous exclusion to deny coverage for injured but surviving animals.
2. Whether the adjuster’s statements and claims-handling conduct constituted negligence or negligent misrepresentation causing the insured’s alleged consequential loss.
3. Whether an adjuster’s general assurance of performance “according to the policy” and advice to mitigate can waive or expand coverage contrary to the written policy.

## Decision

- The Supreme Court of South Dakota reversed the judgment for Roseth and directed judgment for the insurer.
- The court held estoppel could not be used to impose liability for a risk the policy did not cover and expressly excluded.
- The court found insufficient evidence that the adjuster negligently misrepresented coverage or otherwise breached a legal duty causing the claimed loss.

## Legal Principles

- Equitable estoppel cannot be used to create or enlarge insurance coverage beyond the contract’s unambiguous terms, including express exclusions.
- An insured is charged with knowledge of the policy’s contents; a unilateral misunderstanding of coverage does not, by itself, establish actionable misrepresentation by the insurer.
- A claims adjuster’s general statement that the insurer will perform according to the policy, and advice to mitigate damages, does not modify or override clear exclusions absent an affirmative representation of broader coverage supported by authority and proof.

## Conclusion

The court denied recovery for losses tied to the reduced value of injured but surviving calves because the policy plainly limited coverage to mortality and excluded walking animals, and neither estoppel nor alleged adjuster negligence could transform that excluded risk into covered loss.


Roseth v. St. Paul Prop. & Liab. Ins. Co., 374 N.W.2d 105 (S.D. 1985)