Becker by Kasieta v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 28 May 1998
• Docket Number: No. 97-1845,97-1845
• Parties: Michael D. BECKER, a minor by his Guardian ad Litem, Robert J. KASIETA, Plaintiff-Respondent, Dean Health Plan, Subrogated-Respondent, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant, 1st Auto & Casualty Company, Defendant-Appellant, d All Nation Insurance Company, Defendant-Respondent.
• Court: Wisconsin Court of Appeals

Page 499

582 N.W.2d 499

220 Wis.2d 321

Michael D. BECKER, a minor by his Guardian ad Litem, Robert J. KASIETA, Plaintiff-Respondent Dean Health Plan, Subrogated-Respondent, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant 1st Auto & Casualty Company, Defendant-Appellant,^d All Nation Insurance Company, Defendant-Respondent.

No. 97-1845.

Court of Appeals of Wisconsin.

Submitted on Briefs March 9, 1998.

Opinion Released May 28, 1998.

Opinion Filed May 28, 1998.

[220 Wis.2d 323] On behalf of the defendant-appellant, the cause was submitted on the briefs of Arnold P. Anderson of Mohr & Anderson, S.C. of Madison.

On behalf of the plaintiff-respondent, the cause was submitted on the brief of Robert A. Pretto of Madison.

Before EICH, C.J., DYKMAN, P.J., and DEININGER, J.

DYKMAN, Presiding Judge.

1st Auto & Casualty Insurance Company appeals from a judgment awarding damages to Michael Becker, who was injured in a single-car accident while a passenger in an automobile driven by Ryan Holzhueter. 1st Auto had issued an insurance policy to Holzhueter's parents. 1st Auto contends that public policy considerations preclude coverage because Becker and Holzhueter were involved in the commission of a crime at the time of the accident. We conclude that coverage is not precluded by public policy. Accordingly, we affirm.

BACKGROUND

Theodora Margelofsky was sleeping at approximately 10:00 p.m. on February 24, 1995, when her tenth-grade sons, Nicholas and Nathan, took her car from the driveway without her permission. They picked up Michael Becker, a ninth grader, at his home, and then picked up Ryan Holzhueter and two other boys at Holzhueter's home. None of the six juveniles had a driver's license.

After driving around for a while, the boys decided to break into a gas station to steal some alcohol. Holzhueter stayed in the driver's seat, and the other five boys took beer and liquor from the gas station and put it in the trunk. They got back in the car, and Holzhueter drove away.

The boys decided to take the alcohol to Holzhueter's house. The boys planned to have a party there because Holzhueter's parents were out of town. On the way to his house, Holzhueter decided to drive through a stop sign at a high rate of speed and jump through the intersection. As the car approached the stop sign, Holzhueter turned off the headlights, but turned the lights back on just prior to reaching the intersection. The car became airborne and went out of control upon landing. Several of the boys, including Becker, were injured, and Holzhueter was killed.

Becker brought suit against 1st Auto, with whom Holzhueter's parents had an insurance policy. ¹ 1st Auto moved for summary judgment, arguing that public policy considerations precluded coverage. Becker also asked the trial court to grant summary judgment in his favor on the coverage issue. The trial court denied 1st Auto's motion and granted Becker's motion, concluding that coverage was not precluded by public policy. The parties then stipulated that a money judgment would be entered in Becker's favor.

DISCUSSION

1st Auto does not contend that any specific language in its policy excludes coverage; instead, 1st Auto argues that coverage was precluded by public policy. The parties do not dispute the material facts; therefore, only a question of law remains. Whether an insurance policy covers the actions of the insured is a question of law that we review de novo. Jacobs v. Karls, 178 Wis.2d 268, 273, 504 N.W.2d 353, 355 (Ct.App.1993).

1st Auto argues that coverage is precluded by the principle of fortuity, also known as the principle of fortuitousness. The principle of fortuity was adopted by the supreme court in Hedtcke v. Sentry Ins. Co., 109 Wis.2d 461, 326 N.W.2d 727 (1982). The court explained the principle as follows:

[Under] the "principle of fortuitousness," insurance covers fortuitous losses[,] and losses are not fortuitous if the damage is intentionally caused by the insured. Even where the insurance policy contains no language expressly stating the principle of fortuitousness, courts read this principle into the insurance policy to further specific public policy objectives[,] including (1) avoiding profit from wrongdoing; (2) deterring crime; (3) avoiding fraud against insurers; and (4) maintaining coverage of a scope consistent with the reasonable expectations of the contracting parties on matters as to which no intention or expectation was expressed.

Id. at 483-84, 326 N.W.2d at 738.

1st Auto argues that the principle of fortuity precludes coverage in this case because both the plaintiff and the insured were involved in criminal activity at the time the injuries occurred. 1st Auto contends that this case is analogous to the following three cases in which the court concluded that coverage was precluded on public policy grounds: Hagen v. Gulrud, 151 Wis.2d 1, 442 N.W.2d 570 (Ct.App.1989), Ramharter v. Secura Ins., 159 Wis.2d 352, 463 N.W.2d 877 (Ct.App.1990), and Jessica M.F. v. Liberty Mut. Fire Ins. Co., 209 Wis.2d 42, 561 N.W.2d 787 (Ct.App.1997).

In both Hagen and Jessica M.F., the plaintiff's injuries were caused when the plaintiff was sexually assaulted. We concluded that the defendants' insurance policies did not provide coverage because coverage for injuries caused by a sexual assault is not within the reasonable expectations of the insured. Hagen, 151 Wis.2d at 7, 442 N.W.2d at 573; Jessica M.F., 209 Wis.2d at 57, 561 N.W.2d at 794.

In Ramharter, the plaintiff suffered emotional distress when he witnessed a murder-suicide committed by the insured. We concluded that "no reasonable person would expect an automobile or homeowner's insurance policy to provide coverage for a bystander's emotional distress resulting from witnessing the insured's intentional commission of a murder-suicide." See Ramharter, 159 Wis.2d at 354, 463 N.W.2d at 878.

The present case is distinguishable from Hagen, Ramharter and Jessica M.F. Becker's injuries were caused by the insured's reckless driving. Unlike injuries caused by the intentional acts of murder and sexual assault, we believe that insurance coverage for injuries caused by reckless driving is within the reasonable expectations of the contracting parties to an insurance contract. In fact, § 632.32(6)(b)4, STATS., prohibits insurers from excluding coverage on the grounds that a vehicle was being used in a reckless manner.

1st Auto contends that the boys were involved in criminal activity other than reckless driving at the time of the accident, such as operating a motor vehicle without a license, using a vehicle without the owner's permission and transporting stolen beer and liquor. But there is no evidence that any of these other illegal activities caused the injuries for which Becker seeks compensation. When the supreme court adopted the principle of fortuity, it did not conclude that public policy prohibits coverage at any time that the...