Smith v. State Farm Fire & Cas. Co.

• Decision Date: 01 March 1995
• Docket Number: No. 94-0368,94-0368
• Parties: Susan SMITH, Jacob Andrew Smith, a minor, by Adrian P. Schoone, his guardian ad litem, Plaintiffs-Respondents-Cross Respondents, v. STATE FARM FIRE & CASUALTY COMPANY, Defendant-Appellant, James A. Baumann, Defendant-Respondent-Cross Appellant, d Robert W. Smith, Defendant.
• Court: Wisconsin Court of Appeals

Page 376

531 N.W.2d 376

192 Wis.2d 322

Susan SMITH, Jacob Andrew Smith, a minor, by Adrian P Schoone, his guardian ad litem Plaintiffs-Respondents-Cross Respondents, v. STATE FARM FIRE & CASUALTY COMPANY, Defendant-Appellant James A. Baumann, Defendant-Respondent-Cross Appellant,^d Robert W. Smith, Defendant.

No. 94-0368.

Court of Appeals of Wisconsin.

Submitted on Briefs Dec. 19, 1994.

Opinion Released March 1, 1995.

Opinion Filed March 1, 1995.

On behalf of the defendant-appellant, the cause was submitted on the briefs of John V. O'Connor of O'Connor & Willems, S.C., of Kenosha.

On behalf of the plaintiffs-respondents-cross respondents, the cause was submitted on the brief of Timothy S. Knurr of Schoone, Fortune, Leuck, Kelley & Pitts, S.C., of Racine.

On behalf of the defendant-respondent-cross appellant, the cause was submitted on the briefs of Ronald P. Brockman of Heft, Staaden & Heft, S.C., of Racine.

Before ANDERSON, P.J., and BROWN and SNYDER, JJ.

BROWN, Judge.

This case involves an accident occurring when the snowmobiles of James A. Baumann and Robert W. Smith collided, killing Joshua Smith and injuring Jacob Andrew Smith, Robert and Susan Smith's sons. The appeal concerns whether there was coverage for the accident under Baumann's homeowner's policy issued by State Farm Fire & Casualty Company as it concerns Joshua's death and Jacob's injuries.

There are three issues in this permissive appeal arising from an order denying summary judgment for State Farm. The first issue is whether a motor vehicle exclusion in the homeowner's policy, which excludes coverage for injuries arising from the operation of a snowmobile off an insured location, is ambiguous. We hold that the exclusion is not ambiguous. The second issue is whether Baumann's intoxication and his failure to put a helmet on Joshua, his passenger during the accident, are independent concurrent causes for the purpose of invoking coverage under the homeowner's policy. We hold that these separate acts are not independent concurrent causes. The third issue is whether Baumann's negligent maintenance of his snowmobile occurring on an insured location was a covered occurrence under the homeowner's policy. We hold that where the negligent maintenance was not the injury-causing occurrence, it cannot be the basis for a separate item of coverage under the policy. Therefore, we reverse the trial court's order and remand with directions to enter an order granting summary judgment for State Farm.

On the cross-appeal from another order of the trial court, the issue is whether any recovery by Susan in the wrongful death action for Joshua's death should be reduced for any contributory negligence of Robert. We hold that under Chang v. State Farm Mut. Auto. Ins. Co., 182 Wis.2d 549, 514 N.W.2d 399 (1994), Robert's contributory negligence cannot be imputed to Susan. Thus, we affirm the order of the trial court.

The following facts are undisputed for the purposes of our review of the summary judgment in this case. Baumann and Robert Smith took the Smiths' two sons, Joshua and Jacob, snowmobiling. Baumann and Smith drank alcohol in a tavern over the course of several hours and then proceeded to ride their snowmobiles in a field near the tavern. Jacob was a passenger on his father's snowmobile, and Joshua rode on Baumann's snowmobile. Baumann did not put a helmet on Joshua, and Baumann's snowmobile did not have an operable headlight. While riding in the field, the Smith and Baumann snowmobiles collided. Joshua was killed, and Jacob sustained personal injuries.

Neither Baumann nor Smith had snowmobile insurance. The Smiths sued Baumann and State Farm for the negligent operation of a snowmobile, alleging coverage under Baumann's homeowner's policy. State Farm denied coverage under its homeowner's policy and moved for summary judgment, based on an exclusion for damages arising out of the use of motor vehicles off an insured premise. The motor vehicle exclusion provides that there is no coverage for "bodily injury or property damage arising out of the ownership, maintenance, use ... of ... a motor vehicle owned or operated by or rented or loaned to any insured...." The policy defines motor vehicle in relevant part as "a motorized ... snowmobile ... owned by an insured and designed for recreational use off public roads, while off an insured location." It is not disputed that Baumann's snowmobile is a "motor vehicle" under the policy and that the accident occurred off an "insured location."

The trial court denied State Farm's motion for summary judgment. It held that the motor vehicle exclusion was ambiguous and thus the policy should be construed in favor of coverage. Additionally, the trial court held that Baumann's "inordinate consumption of alcohol," his knowing the state of intoxication of the parties and his allowing Joshua to ride without a helmet were independent concurrent causes of the accident for which there was coverage under the homeowner's policy.

On appeal, State Farm concedes all issues of fact for summary judgment purposes; thus, our review is confined to whether State Farm was entitled to judgment as a matter of law, see RULE 802.08(2), STATS., and, as such, is de novo. See Milwaukee Partners v. Collins Engineers, Inc., 169 Wis.2d 355, 361, 485 N.W.2d 274, 276 (Ct.App.1992).

The appeal issues require the construction of an insurance policy, which is a question of law we also review independently. See Western Casualty & Surety Co. v. Budrus, 112 Wis.2d 348, 350, 332 N.W.2d 837, 839 (Ct.App.1983). Language in an insurance policy should be given its common and ordinary meaning and should be construed as it would be understood by a reasonable person in the position of the insured. Cieslewicz v. Mutual Serv. Casualty Ins. Co., 84 Wis.2d 91, 97-98, 267 N.W.2d 595, 598 (1978).

Now we turn to the first issue. State Farm argues that the motor vehicle exclusion under its homeowner's policy is unambiguous and precludes coverage for this snowmobile accident. Whether the policy contains an ambiguity is a question of law. Budrus, 112 Wis.2d at 351, 332 N.W.2d at 839. Ambiguities in a contract of insurance are resolved in favor of coverage. See Garriguenc v. Love, 67 Wis.2d 130, 135, 226 N.W.2d 414, 417 (1975). An insurance policy is ambiguous if the language when read in context is fairly susceptible to more than one meaning. Sprangers v. Greatway Ins. Co., 182 Wis.2d 521, 536-37, 514 N.W.2d 1, 6 (1994).

Smith contends that the motor vehicle exclusion is ambiguous when considered with another policy exclusion precluding coverage for injuries arising out of participation in a race involving motorized land vehicles. The racing exclusion provides that there is no coverage for "bodily injury or property damage arising out of an insured's participation in, or preparation or practice for any prearranged or organized race, speed or demolition contest, or similar competition involving a motorized land vehicle...."

Smith makes two arguments in support of his claim that the racing exclusion creates an ambiguity. First, Smith contends that because the racing exclusion does not by its terms exclude all snowmobiling activities off insured locations, a reasonable insured would read the policy as only excluding coverage for injuries arising from snowmobile operation if the injuries result from a snowmobile race. We disagree that a reasonable insured would glean such a meaning.

An insurance policy should not be construed so as to render any part of it useless. Maas v. Ziegler, 172 Wis.2d 70, 81, 492 N.W.2d 621, 625 (1992). We must consider the insurance policy as a whole and give each exclusion its common and ordinary meaning before determining whether an ambiguity exists. Compare Cieslewicz, 84 Wis.2d at 97-98, 267 N.W.2d at 598 with Maas, 172 Wis.2d at 81-82, 492 N.W.2d at 625.

Here, Smith's contention ignores the plain meaning of the motor vehicle exclusion and renders it useless. The motor vehicle exclusion, by the plain meaning of its terms, provides that injuries arising from the operation of a snowmobile off an insured location are excluded. We cannot support Smith's position without reading the racing exclusion in isolation, and this we cannot do. See Maas, 172 Wis.2d at 81-82, 492 N.W.2d at 625.

Second, Smith argues that the racing exclusion is rendered superfluous if snowmobiling is also excluded under another exclusion. Again, we disagree. We conclude that the common and ordinary meaning of the racing exclusion is that injuries arising from racing are excluded--regardless of whether the racing occurs on or off insured premises. We hold that no ambiguity arises merely because the existence of two exclusions provides two separate reasons for denying coverage for snowmobile racing off insured premises. Moreover, as State Farm argues, it is possible that snowmobile racing could take place on an insured location and, in that case, the motor vehicle exclusion would not apply, but the racing exclusion would. Thus, the policy can reasonably be construed, after reading the two exclusions together, to provide coverage for injuries arising from the operation of snowmobiles on an insured location, unless racing is involved. We hold that the motor vehicle exclusion unambiguously disclaims coverage for the injuries arising from the snowmobile accident in this case.

Next, Smith argues that Baumann's intoxication and failure to put a helmet on Joshua were independent concurrent causes of the accident, separate from the operation of the snowmobile. The "independent, concurrent cause rule" has been explained as follows: "Where a policy expressly insures against loss caused by one risk but excludes loss caused by another risk, coverage is extended to a loss caused by the insured risk even though the excluded risk is a contributory cause." See Kraemer Bros., Inc. v. United States Fire Ins. Co., 89 Wis.2d 555, 570, 278 N.W.2d 857, 863-64 (1979) (citing ...