Beerbohm v. State Farm Mut. Automobile Ins. Co.

• Decision Date: 20 April 2000
• Docket Number: No. 99-1784.,99-1784.
• Citation: 235 Wis.2d 182,2000 WI App 105,612 N.W.2d 338
• Parties: Travis L. BEERBOHM, Lawrence Beerbohm, and Bonnie Beerbohm, Plaintiffs-Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Matthew J. Jordan, Rolland L. Freitag, Debra Oschmann-Schultz, and Physicians Plus Insurance Corporation, Defendants, MID-CENTURY INSURANCE COMPANY/FARMERS INSURANCE EXCHANGE, Defendant-Respondent.
• Court: Wisconsin Court of Appeals

235 Wis.2d 182

2000 WI App 105

612 N.W.2d 338

Travis L. BEERBOHM, Lawrence Beerbohm, and Bonnie Beerbohm, Plaintiffs-Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Matthew J. Jordan, Rolland L. Freitag, Debra Oschmann-Schultz, and Physicians Plus Insurance Corporation, Defendants, MID-CENTURY INSURANCE COMPANY/FARMERS INSURANCE EXCHANGE, Defendant-Respondent.

No. 99-1784.

Court of Appeals of Wisconsin.

Submitted on briefs January 11, 2000.

Decided April 20, 2000.

On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of Paul M. Erspamer of Lisko & Erspamer, S.C. of Waukesha.

On behalf of the defendant-respondent, the cause was submitted on the brief of Susan R. Tyndall of Hinshaw & Culbertson of Milwaukee.

Before Dykman, P.J., Vergeront and Roggensack, JJ.

¶ 1. DYKMAN, P.J.

Travis L., Lawrence and Bonnie Beerbohm appeal from a trial court's grant of summary judgment in favor of Mid-Century Insurance Company/Farmers Insurance Exchange (Farmers). The Beerbohms contend that the trial court erred in determining that Farmers was not liable for injuries Travis sustained in a motorcycle accident. The Beerbohms argue that language excluding coverage for motorcycles in an insurance policy issued by Farmers violates WIS. STAT. §§ 632.32 and 344.33 (1997-98).¹ They also assert that Farmers is liable as the insurer of the father of the teenager who was driving the motorcycle because of the father's liability under Wisconsin's sponsorship statute. Finally, the Beerbohms argue that Farmers is liable under the newly-acquired vehicle clause in the policy. We disagree with these arguments and affirm.

I. Background

¶ 2. In the summer of 1995, James Jordan's sixteen-year-old son Matthew bought a motorcycle. A few weeks later, while giving his friend Travis Beerbohm a ride on the back of the motorcycle, Matthew was involved in an accident. Matthew and Travis were both injured. Matthew's parents did not live together and, at the time of the accident, Matthew was living with his mother. However, both of Matthew's parents shared Matthew's custody. James had originally sponsored Matthew's driver's license, but after James revoked his sponsorship, Matthew's mother sponsored him.

¶ 3. Prior to the accident, James had purchased automobile liability insurance from Farmers. James's policy provided the following general definitions:

Private Passenger Car means a four wheel land motor vehicle of the private passenger or station wagon type actually licensed for use upon public highways. It includes any motor home with no more than six wheels and not used for business purposes.

. . . .

Utility Car means a four wheel land motor vehicle licensed for use upon public highways, with a rated load capacity of not more than 2,000 pounds, of the pickup or van type. It does not mean a vehicle used in any business or occupation other than farming or ranching.

¶ 4. In Part I, entitled "Liability," James's policy provided, in part:

[Farmers] will pay damages for which any insured person is legally liable because of bodily injury to any person and/or property damage arising out of the ownership, maintenance or use of a private passenger car, a utility car, or a utility trailer.

[Farmers] will defend any claim or suit asking for these damages. [Farmers] may settle when we consider it appropriate.

. . . .

Insured person as used in this part means:

1. You or any family member.

The "Exclusions" section of Part I of the policy provided, in part:

This coverage does not apply to:

. . . .

9. Bodily injury or property damage arising out of the ownership, maintenance or use of any motorized vehicle with less than four wheels.

¶ 5. After the accident, Travis Beerbohm and his parents sued Matthew, James and Farmers for negligence.² The trial court granted Farmers' motion for summary judgment and dismissed all claims against it. The court concluded that Farmers was not liable because its policy language clearly excluded coverage for the use of vehicles with less than four wheels, such as motorcycles. The Beerbohms appeal.

II. Standard of Review

[1, 2]

¶ 6. We review a trial court's grant or denial of summary judgment de novo, using the methodology set out in WIS. STAT. § 802.08(2). See Strassman v. Muranyi, 225 Wis. 2d 784, 787, 594 N.W.2d 398 (Ct. App. 1999). We need not repeat that methodology here, except to note that summary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. See id. In this case, "where there are no disputed issues of material fact, we need only determine whether the moving party is entitled to judgment as a matter of law." Id. at 787-88.

III. Analysis

A. Exclusion of Motorcycle Coverage

¶ 7. The Beerbohms assert that the trial court incorrectly concluded that Farmers was not liable under the terms of James's policy. They contend that Farmers' exclusion of coverage for motorcycles violates Wisconsin's Omnibus Coverage Statute, WIS. STAT. § 632.32, and Wisconsin's financial responsibility laws, WIS. STAT. ch. 344. The Beerbohms point out that "where a contractual provision is in direct conflict with a statute, the statute governs." WEA Ins. Corp. v. Freiheit, 190 Wis. 2d 111, 119, 527 N.W.2d 363 (Ct. App. 1994). In particular, they argue that WIS. STAT. § 344.33 bars the exclusion of motorcycle coverage because it provides that "[a] motor vehicle policy of liability insurance shall insure the person named therein using any motor vehicle with the express or implied permission of the owner." WIS. STAT. § 344.33(2) (emphasis added).

[3-5]

¶ 8. The interpretation and application of statutes and insurance policy provisions to undisputed facts are questions of law that we review de novo. See State v. Eastman, 220 Wis. 2d 330, 334-35, 582 N.W.2d 749 (Ct. App. 1998); Steven G. v. Herget, 178 Wis. 2d 674, 684, 505 N.W.2d 422 (Ct. App. 1993). When we interpret a statute, our purpose is to ascertain the intent of the legislature and give it effect. See State ex rel. Frederick v. McCaughtry, 173 Wis. 2d 222, 225, 496 N.W.2d 177 (Ct. App. 1992). Absent ambiguity, we give statutory language its ordinary meaning. See id. at 225-26. [6-9]

¶ 9. Similarly, a primary goal in interpreting an insurance policy is to ascertain and carry out the intentions of the parties to the contract. See City of Edgerton v. General Cas. Co. of Wis., 184 Wis. 2d 750, 780, 517 N.W.2d 463 (1994). We should give the language of an insurance policy its plain and ordinary meaning. See id. When we construe the words of an ambiguous insurance policy, we base our construction on a reasonable insured's expectations of coverage rather than on what the insurer intended the words to mean. See id.; Kremers-Urban Co. v. American Employers Ins. Co., 119 Wis. 2d 722, 735, 351 N.W.2d 156 (1984). However, when the policy provisions are unambiguous, "we will not engage in construction, but will merely apply the policy terms." Kremers-Urban, 119 Wis. 2d at 736. A policy provision is ambiguous if it is susceptible to more than one reasonable construction. See Cardinal v. Leader Nat'l Ins. Co., 166 Wis. 2d 375, 383, 480 N.W.2d 1 (1992).

[10]

¶ 10. We conclude that the trial court correctly determined that Farmers was not liable to the Beerbohms. James's policy unambiguously excludes coverage for liability arising from the ownership, maintenance or use of a motorcycle. In Part I, the policy states that Farmers will pay for bodily injury or property damages "arising out of the ownership, maintenance or use of a private passenger car, a utility car, or a utility trailer." The policy's definitions of "private passenger car" and "utility car" do not include vehicles with less than four wheels. In addition, the "Exclusions" section of Part I clearly provides that liability coverage does not apply to "[b]odily injury or property damage arising out of the ownership, maintenance or use of any motorized vehicle with less than four wheels." A reasonable insured, having read these provisions, would not conclude that he or she had purchased coverage for motorcycles.

[11]

¶ 11. We do not agree that WIS. STAT. § 632.32 requires automobile insurance policies to provide coverage for motorcycles. Chapter 632 of the Wisconsin Statutes regulates the provisions found in any insurance policy issued or delivered in Wisconsin. See Classified Ins. Co. v. Budget Rent-A-Car of Wis., Inc., 186 Wis. 2d 478, 483, 521 N.W.2d 177 (Ct. App. 1994). However, § 632.32(5)(e) provides that an automobile policy "may provide for exclusions not prohibited by sub. (6) or other applicable law." Section 632.32(6) does not prohibit policy provisions excluding motorcycle coverage.³ ¶ 12. We also do not agree that WIS. STAT. § 344.33 applies to the insurance policy in this case. While Chapter 632 of the Wisconsin Statutes regulates provisions of insurance policies issued or delivered in Wisconsin, Chapter 344, comprising the financial responsibility laws, "regulates the owners and operators of motor vehicles who are involved in accidents in Wisconsin." Classified, 186 Wis. 2d at 483. The financial responsibility laws are generally divided into two parts. See Keane v. Auto-Owners Ins. Co., 159 Wis. 2d 539, 551-53, 464 N.W.2d 830 (1991). The first part, "Security for Past Accidents," encompasses WIS. STAT. §§ 344.12 to 344.22. Section 344.33 falls within the second part of the financial responsibility laws, "Proof of Financial Responsibility for The Future." See WIS. STAT. §§ 344.24 to 344.42. Under these statutes, "drivers whose licenses have been revoked because of their poor driving records are required to show proof of financial responsibility to have their operators licenses reinstated." Cardinal, 166 Wis. 2d at 381. Drivers can meet this requirement by providing certification that they have obtained liability insurance that meets the requirements of § 344.33. See id.

¶ 13. Unlike WIS. STAT....