Bankert v. Threshermen's Mut. Ins. Co., No. 80-2058

• Court: Court of Appeals of Wisconsin
• Writing for the Court: CANE
• Citation: 313 N.W.2d 854,105 Wis.2d 438
• Decision Date: 17 November 1981
• Docket Number: No. 80-2058
• Parties: John E. BANKERT, a minor by his Guardian ad Litem, Robert L. Habush, Plaintiff- Appellant, and Cross-Respondent, Rosa Bankert and Ervin Bankert, Plaintiffs, v. THRESHERMEN'S MUTUAL INS. CO., and Watertown Mutual Insurance Company, Defendants-Respondents, and Cross-Appellants, The Ohio Casualty Ins. Co., Richard D. Mueller, Arnold J. Mueller, Margie Mueller, State Farm Mutual Automobile Insurance Co., Steven J. Johnston, Michael Johnston, Karen Johnston and Mutual Life Insurance Co. of New York, Defendants. *

Page 854

313 N.W.2d 854 105 Wis.2d 438 John E. BANKERT, a minor by his Guardian ad Litem, Robert L.
Habush, Plaintiff- Appellant, and Cross-Respondent,
Rosa Bankert and Ervin Bankert, Plaintiffs,
v.
THRESHERMEN'S MUTUAL INS. CO., and Watertown Mutual
Insurance Company, Defendants-Respondents, and
Cross-Appellants,
The Ohio Casualty Ins. Co., Richard D. Mueller, Arnold J.
Mueller, Margie Mueller, State Farm Mutual Automobile
Insurance Co., Steven J. Johnston, Michael Johnston, Karen
Johnston and Mutual Life Insurance Co. of New York,
Defendants. ^* No. 80-2058. Court of Appeals of Wisconsin. Submitted on Briefs Aug. 31, 1981.
Opinion Released Nov. 17, 1981.
Opinion Filed Nov. 17, 1981.

Page 855

[105 Wis.2d 439] Howard A. Davis, and Patrick O. Dunphy and Habush, Habush & Davis, S. C., Milwaukee, on brief for the appellant.

John A. Kluwin, and Thomas R. Schrimpf and Kluwin, Dunphy, Hankin & McNulty, Milwaukee, on brief for the respondents.

Before FOLEY, P. J., and DEAN and CANE, JJ.

CANE, Judge.

John Bankert, age fifteen, was a passenger on a motorcycle driven by Richard Mueller, also age fifteen. The motorcycle was owned by Mueller's parents. It was not licensed for road use and had no functioning headlight. While traveling down a Watertown street after dark, the boys collided with an illegally parked car [105 Wis.2d 440] and both were injured. John Bankert brought this action for damages against Richard Mueller for negligent operation of the motorcycle and against Mueller's parents for negligently entrusting the vehicle to their son and negligently supervising him in its use. Watertown Mutual Insurance Company and Threshermen's Mutual Insurance Company denied coverage under the farmowner's liability policy of the defendants, Arnold and Margie Mueller, because of an automobile exclusion in the policy. On cross-motions for summary judgment, the trial court entered an order finding no coverage for the negligence of Richard Mueller or for negligent entrustment by his parents, but coverage for negligent supervision. Bankert was granted leave to appeal from that portion of the order excluding negligent entrustment. Threshermen's appeals from that portion of the order finding coverage for negligent supervision.

While parents are not ordinarily liable for the torts of their minor children, they may be liable for their own negligence in entrusting an object, such as a weapon or vehicle, to a child who is incapable of using it safely. Kempf v. Boehrig, 95 Wis.2d 435, 441, 290 N.W.2d 562, 565 (Ct.App.1980); ¹ see Hopkins v. Droppers, 184 Wis. 400, 403, 198 N.W. 738, 739 (1924), aff'd after remand, 191 Wis. 334, 210 N.W. 684 (1926). They may also be liable for their own negligence in the supervision [105 Wis.2d 441] of the child. Seibert v. Morris, 252 Wis. 460, 463, 32 N.W.2d 239, 240 (1948). ²

We do not reach the merits of either cause of action at this stage of the litigation.

Page 856

The question before us is whether negligent entrustment of the motorcycle and negligent supervision of its use are excluded from coverage by Mueller's homeowner's insurance policy. This involves the construction of an insurance contract, a question of law. We review questions of law independently without deference to the conclusions in the trial court's order. Patrick v. Head of the Lakes Cooperative Electric Association, 98 Wis.2d 66, 68, 295 N.W.2d 205, 207 (Ct.App.1980).

The Muellers are insured by a broad form farmowner's policy from Watertown. Threshermen's is the reinsurer of liability under the policy. Section II is entitled "Comprehensive Farm and Personal Liability Insuring Agreements." Under "Exclusions" it specifically stated:

This policy does not apply:

....

(b) under any of the coverages, to the ownership, operation, maintenance or use, including loading and unloading of

(1) automobiles while away from the premises or the ways immediately adjoining.

The parties do not dispute that the motorcycle is an "automobile" within the policy definition and that liability[105 Wis.2d 442] for Richard Mueller's negligent operation and use of the motorcycle is excluded from coverage.

NEGLIGENT ENTRUSTMENT

Bankert argues that the exclusionary language of the policy does not specifically disallow coverage for negligent entrustment or negligent supervision. While this exclusion has not been previously interpreted by a Wisconsin court, the greater number of such cases in other jurisdictions find coverage for negligent entrustment not excluded by such language. ³ Nevertheless, we are persuaded by the reasoning of cases interpreting similar exclusionary language, which find coverage for negligent entrustment excluded. ⁴

We hold that entrusting the vehicle to Richard was an exercise of the powers of "ownership" and "use" of the vehicle. When Richard operated the vehicle away from [105 Wis.2d 443] the premises, coverage ceased under the express terms of the policy because the entrusted vehicle was then in use away from the premises.

Page 857

The Alabama court in Cooter v. State Farm Fire and Casualty Co., 344 So.2d 496 (Ala.1977), reasoned that, since recovery for negligent entrustment was impossible without proof of the concurrent negligence of the driver, any exclusion that excepts negligent use also excludes negligent entrustment. The dissenting justices emphasized that negligent entrustment is founded upon negligence of the entruster, which is not directly related to ownership, operation, maintenance, or use of the automobile.

While there is arguable merit in the logic that separates the two negligent acts by actor, the fact remains that entrustment of a vehicle is but a form of "use." The policy cannot be read to cover this "use" of the motorcycle merely because the insurer...