American Family Mut. Ins. Co. v. Bateman

• Decision Date: 22 November 2006
• Docket Number: No. 2005AP2219.,2005AP2219.
• Parties: AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Plaintiff-Respondent, v. Janey BATEMAN and Chelsea Collar, Defendants, Cassandra Bollig, Defendant-Appellant.
• Court: Wisconsin Court of Appeals

726 N.W.2d 678

2006 WI App 251

AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Plaintiff-Respondent, v. Janey BATEMAN and Chelsea Collar, Defendants Cassandra Bollig, Defendant-Appellant.

No. 2005AP2219.

Court of Appeals of Wisconsin.

Submitted on Briefs August 8, 2006.

Opinion Filed November 22, 2006.

On behalf of the defendant-appellant, the cause was submitted on the briefs of Michael W. Gill, of Hale, Skemp, Hanson, Skemp & Sleik, La Crosse.

On behalf of the plaintiff-respondent, the cause was submitted on the briefs of Scott G. Pernitz and Laure Rakvic-Farr, of Winner, Wixson & Pernitz, Madison.

Before DYKMAN, VERGERONT and DEININGER, JJ.

¶ 1 VERGERONT, J

The issues on this appeal concern the coverage under two automobile liability insurance policies for an accident in which the named insured's daughter was driving a car that collided with another car. The circuit court granted summary judgment in favor of the insurer, American Family Mutual Insurance Company, concluding that neither policy provided coverage for the accident. The driver of the other car appeals. We conclude that, based on the undisputed facts, the car the named insured's daughter was driving did not meet the definition of "your insured car" in one of the policies and the known loss doctrine precludes coverage under the other policy. We therefore affirm.

BACKGROUND

¶ 2 The accident occurred on May 10, 2003, when Janey Bateman's sixteen-year-old daughter, Chelsea, was driving a 1989 Oldsmobile that Bateman had obtained for her. Chelsea drove the car out of a parking lot and collided in the street with a car driven by Cassandra Bollig.

¶ 3 Bateman had purchased the Oldsmobile from her sister in February 2003. On February 26, 2003, Bateman registered the car with the State of Wisconsin, identifying Chelsea as the owner; Bateman signed as the sponsor. On the same day, Bateman picked up the Oldsmobile at her mother's house and drove it twenty-seven miles back to her house, where it remained for approximately two weeks, without being driven by anyone. In early March, Bateman's friend picked up the Oldsmobile so that an acquaintance could make repairs to it; they returned the car to Bateman on May 9. On May 10, Chelsea took the car from the driveway without her mother's knowledge or permission.

¶ 4 At the time of the accident, Bateman was the named insured on an American Family automobile insurance policy that listed her 1993 Mercury Villager on the declarations page. On April 18, 2003, Bateman called the office of an American Family agent to add Chelsea, as an occasional driver, to this policy. This policy excludes coverage for liability for bodily injury or property damage "arising out of the use of any vehicle, other than your insured car, which is owned by or furnished by or available for regular use by you or any resident of your household." "Insured car" is defined in the policy as:

a. Any car described in the declarations and any private passenger car or utility car you replace it with. You must tell us within 30 days of its acquisition.

b. Any additional private passenger car or utility car of which you acquire ownership during the policy period, provided:

1) If it is a private passenger car, we insure all of your other private passenger cars; or

2) If it is a utility car, we insure all of your other private passenger cars and utility cars.

You must tell us within 30 days of its acquisition that you want us to insure the additional car....

¶ 5 Bateman told the agent in the April 18 conversation that when her daughter had her own car, she (Bateman) would let the agent know so that that car could be insured. As of May 10, 2003, the date of the accident, Bateman had not contacted the American Family agent to request insurance on the Oldsmobile.

¶ 6 After the accident, on May 15, 2003, Bateman called the agent to request insurance coverage for the Oldsmobile. Certain portions of this conversation are disputed by the parties, but it is undisputed that Bateman did not mention the accident and that, based on this conversation, American Family issued a policy covering the Oldsmobile that was retroactive to May 9, 2003, with Bateman as the named insured.

¶ 7 When American Family later learned of the accident, it filed this action asking for a declaratory ruling that the Mercury policy did not provide liability coverage for the accident and the Oldsmobile policy was void for misrepresentation and fraudulent concealment. Bateman and Chelsea did not answer the complaint and American Family subsequently moved for a default judgment against them, which they did not oppose. The court therefore entered judgment against Bateman and Chelsea declaring that the Mercury policy did not require American Family to either defend or indemnify Bateman or Chelsea in connection with the accident; the judgment further declared that the Oldsmobile policy was void for misrepresentation.¹

¶ 8 Bollig answered the complaint and asserted a counterclaim against American Family and a cross-claim against Bateman and Chelsea. Bollig alleged that Chelsea was negligent, Bateman was liable for her negligence, and either one or both of the American Family policies provided coverage for their liability. Bateman and Chelsea answered the cross-claim, denying negligence and liability.

¶ 9 On American Family's motion, the court bifurcated litigation of the insurance coverage issues, on the one hand, and Bollig's cross-claim and counterclaim, on the other hand. American Family moved for summary judgment on the coverage issues. With respect to the Mercury policy, American Family argued that the Oldsmobile was not an insured car because Bateman did not tell American Family within thirty days of its acquisition in February 2003 that she wanted American Family to insure it. Thus, American Family argued, even if Bateman has sponsorship liability under WIS. STAT. § 343.15² for Chelsea's negligence, the terms of the policy control its coverage obligation, and there is no coverage under the policy for the accident.

¶ 10 With respect to the Oldsmobile policy, American Family submitted the affidavit of its agent. The agent averred that in the May 15 conversation with Bateman, the agent asked Bateman whether there had been any claims, accidents, or problems with the Oldsmobile and Bateman answered no and did not mention the accident. American Family also submitted Bateman's deposition in which Bateman stated that, on the advice of a friend, she asked the agent to backdate the insurance to May 9 so that it would cover the accident, and she did not mention the accident; she now knows she should not have done that. She acknowledged that her purpose was to get insurance that would predate the accident that had already occurred. American Family argued that the policy was void because of Bateman's misrepresentation and it was entitled to rescind or void the policy under WIS. STAT. § 631.11(1)(b),³ common law and the "Concealment or Fraud" provision of the policy.⁴

¶ 11 Bollig opposed the motion for summary judgment. Regarding the Mercury policy, Bollig argued that Bateman did not acquire the Oldsmobile until May 9 when it was returned to her after being repaired, and that because Bateman told the agent about it on May 15—within thirty days—it automatically became an "insured car" under the Mercury policy. Bollig submitted factual materials showing that the Oldsmobile was not safe to operate on the road from the time it was picked up for repairs in March until May 9 and also showing that, while it was being repaired, it was in a disassembled and unusable state.

¶ 12 Regarding the Oldsmobile policy, Bollig argued there were disputed issues of fact. Bollig pointed to other portions of Bateman's deposition where Bateman testified that, a few days after the accident, Bollig's lawyer called her to ask the name of her insurance company; when Bateman said she did not have insurance on the Oldsmobile, he told her that she had thirty days to put that car on her policy. Bateman denied in her deposition that in the May 15 conversation the agent asked if the car had any prior claims; instead, she stated, the agent asked whether "there [was] anything wrong with the vehicle" and she said no. Bollig argued that, because Bateman had been told by an attorney that she could add the Oldsmobile to her policy within thirty days, it is reasonable to infer that she believed it would be covered regardless of whether there had been an accident. And, Bollig contended, if it was true, as Bateman testified, that the agent did not ask about claims on that car, then Bateman did not misrepresent.

¶ 13 The circuit court concluded that, based on the undisputed facts, Bateman acquired the vehicle in February 2006, and did not tell American Family she wanted insurance on it within thirty days. Therefore, the court concluded, the Mercury policy did not provide coverage for the accident and it followed that the policy did not provide coverage for Bateman's sponsorship liability. With respect to the Oldsmobile policy, the court determined that, although there was a dispute over whether the agent had asked Bateman in the May 15 conversation whether there had been any accidents, there was no material factual dispute that Bateman had concealed the accident. The court acknowledged that the record did not show that American Family had not complied with the notice procedures in WIS. STAT. § 631.11(4)(b).⁵ However, the court stated, "with that proviso" it was also granting summary judgment in favor of American Family with respect to the Oldsmobile policy.

DISCUSSION

¶ 14 On appeal, Bollig challenges the circuit court's grant of summary judgment as to both policies. We review de novo the grant and denial of summary judgment, employing the same methodology as the circuit court. See Green Spring Farms v. Kersten, 136 Wis.2d 304, 314-17, 401 N.W.2d 816 (1987). Summary judgment is proper when there are no issues of material...