Carrington by Nathan v. St. Paul Fire & Marine Ins. Co.

• Citation: 169 Wis.2d 211,485 N.W.2d 267
• Decision Date: 27 May 1992
• Docket Number: No. 90-0834,90-0834
• Parties: Cameron J. CARRINGTON f/k/a Cameron J. Cotton, by his Guardian ad Litem, Arthur B. NATHAN, Plaintiff-Co-Appellant, v. ST. PAUL FIRE & MARINE INSURANCE COMPANY, a foreign corporation, Defendant-Respondent-Petitioner, Wesley R. Jarrell and Jonathan A. Wollman, Defendants, Dorothea Evans, Defendant-Appellant. Lori JARRELL, Plaintiff, v. ST. PAUL FIRE & MARINE INSURANCE COMPANY, a foreign corporation, Defendant-Respondent-Petitioner, State Farm Mutual Automobile Insurance Company, a foreign corporation, Wesley R. Jarrell, Cameron J. Carrington, f/k/a Cameron J. Cotton and Jonathan A. Wollman, Defendants, Dorothea Evans, Defendant-Appellant. . Oral Argument:
• Court: United States State Supreme Court of Wisconsin

Page 267

485 N.W.2d 267

169 Wis.2d 211

Cameron J. CARRINGTON f/k/a Cameron J. Cotton, by his Guardian ad Litem, Arthur B. NATHAN, Plaintiff-Co-Appellant, v. ST. PAUL FIRE & MARINE INSURANCE COMPANY, a foreign

corporation, Defendant-Respondent-Petitioner,

Wesley R. Jarrell and Jonathan A. Wollman, Defendants,

Dorothea Evans, Defendant-Appellant.

Lori JARRELL, Plaintiff, v. ST. PAUL FIRE & MARINE INSURANCE COMPANY, a foreign

corporation, Defendant-Respondent-Petitioner,

State Farm Mutual Automobile Insurance Company, a foreign

corporation, Wesley R. Jarrell, Cameron J.

Carrington, f/k/a Cameron J. Cotton and

Jonathan A. Wollman, Defendants,

Dorothea Evans, Defendant-Appellant.

No. 90-0834.

Supreme Court of Wisconsin.

Oral Argument: May 27, 1992.

Opinion Filed: June 24, 1992.

For the defendant-respondent-petitioner there were briefs by Douglas J. Carroll and O'Neill, Schimmel, Quirk & Carroll, S.C., Milwaukee and oral argument by Douglas J. Carroll.

For the defendant-appellant there was a brief by Ronald Bornstein and Robert Silverstein & Associates, S.C., Milwaukee and oral argument by Mr. Bornstein.

HEFFERNAN, Chief Justice.

This is a review of a published decision of the court of appeals, Carrington v. St. Paul Fire & Marine Ins. Co., 164 Wis.2d 148, 473 N.W.2d 591 (Ct.App.1991), reversing a summary judgment of the circuit court for Milwaukee county, Victor Manian, Circuit Judge, which concluded that Dorothea Evans and Cameron J. Carrington (the children) were "occupancy insureds" rather than "named insureds" under an insurance policy issued to Sunburst Youth Homes, Inc. (Sunburst), by St. Paul Fire & Marine Ins. Co. (St. Paul), and therefore were unable to "stack" uninsured motorist coverage. The court of appeals held that the children were named insureds under the policy because they were "wards or foster children" of Sunburst, and that they were entitled to stack uninsured motorist coverage under the St. Paul policy despite the existence of a "single limit" provision in the policy. We agree, and affirm.

On April 27, 1986, a car owned by Sunburst and operated by Wesley R. Jarrell, a Sunburst employee, collided with a car owned and operated by Jonathan A. Wollman, an uninsured motorist. Carrington and Evans were injured in the accident. At the time, the children resided at Sunburst pursuant to orders of the children's division of the circuit court. The children had previously been determined to be children in need of protective services under sec. 48.13(10), Stats., and their custody was placed with the Department of Social Services of their respective counties of residence. The children sought to recover compensation for their injuries under the uninsured motorist coverage in St. Paul's comprehensive insurance policy issued to Sunburst.

The action presented the circuit court with two questions: (1) whether the children were "named insureds" or "occupancy insureds" under the policy; and (2) if they were named insureds, whether the "single limit" provision of the policy violated sec. 631.43(1), Stats., by illegally prohibiting stacking of uninsured motorist coverage. ¹

St. Paul issued a comprehensive insurance policy to Sunburst, which included automobile insurance. Under the heading "Who is Protected Under This Agreement," the St. Paul policy provided in part:

Protected persons are people and organizations protected under this agreement. Each is protected separately. However, the limits of coverage shown in the Coverage Summary are shared by all protected persons.

Here's a list of "protected persons" and certain limitations on their liability protection.

You.

A member of your family.

A member of your family is a person who is related to you by blood, marriage or adoption and lives in your home. A ward or foster child who lives with you is also considered to be a member of your family.

Anyone else in a covered auto. Anyone else while in a covered auto or a temporary substitute auto is protected.

The term "you" is defined in the policy as follows:

The words you, your and yours mean the insured named here:

Sunburst Inc. of Wisconsin

Sunburst Youth Homes, Inc.

Sunburst Care Facilities, Ltd.

Sunburst Foundation, Inc.

Neillsville, Wisconsin 54456

Which is a:

x corporation ___ individual

___ partnership ___ joint venture

___ other ___ condominium

Finally, the policy contained a "single limit" provision which provided:

If a single limit is shown, it is the most we'll pay for all damages resulting from bodily injury caused by any one accident. This limit applies no matter how many covered autos or protected persons are involved or how many claims are made.

On the declarations page for uninsured and underinsured motorist protection, under the heading "Uninsured Limits of Coverage," the policy provided coverage for "$100,000 per accident."

On cross motions for summary judgment, the circuit court ruled that the children were only occupancy insureds, and that even if they were named insureds, the policy provided single limit uninsured motorist coverage of $100,000. St. Paul paid the $100,000 into the court and the parties stipulated to its distribution. ²

On July 30, 1991, the court of appeals reversed the judgment of the circuit court. The court of appeals concluded that the children were named insureds under the policy because they both were "a ward or foster child" living with Sunburst. Carrington, 164 Wis.2d at 152-56, 473 N.W.2d 591. Next, the court of appeals determined that St. Paul's $100,000 single limit provision violated sec. 631.43(1), Stats., because it improperly prohibited stacking of uninsured motorist coverage for separate policies. Judge Fine dissented, concluding that while at least one child, Evans, was a named insured as a ward of Milwaukee county (which was an additional named insured under the St. Paul policy), the single limit provision did not violate sec. 631.43(1), because it was not shown that separate premiums for uninsured motorist coverage were collected for each covered vehicle. Carrington, 164 Wis.2d at 160-69, 473 N.W.2d 591.

This case was decided on summary judgment, and there are no material facts in dispute. The construction of insurance contract provisions and statutes are questions of law which we review de novo. Martin, 146 Wis.2d at 766, 433 N.W.2d 1.

The first issue we must decide is whether the children were named insureds (also referred to as "Class 1 insureds") or occupancy insureds ("Class 2 insureds") under the St. Paul policy. St. Paul argues that there can only be occupancy insureds under a commercial fleet policy where the only named insured is a corporation or government entity rather than a person. St. Paul cites a host of authority to support this position. ³ We agree with St. Paul on this point. However, under the express language of the policy, the children were in fact named insureds. As St. Paul concedes, a commercial fleet policy may include named insureds. See, e.g., American Fire & Cas. Co. v. Sinz, 487 So.2d 340 (Fla.Ct.App.1986).

In defining the term "member of your family," the St. Paul policy provides: "A ward or foster child who lives with you is also considered to be a member of your family." St. Paul argues that because the "you" referred to is an inanimate corporation, no reasonable person could conclude that it had family members or that any person could live "with" it. We disagree. With "Sunburst" inserted for "you," the policy reads: "A ward or foster child who lives with Sunburst is considered to be a member of Sunburst's family."

Because the insurer controls the language and scope of the policy, any ambiguity must be construed in favor of coverage. Cardinal v. Leader National Ins. Co., 166 Wis.2d 375, 382, 480 N.W.2d 1 (1992). "An ambiguity exists when the policy is reasonably susceptible to more than one construction from the viewpoint of a reasonable person of ordinary intelligence in the position of the insured." Schroeder v. Blue Cross & Blue Shield United of Wisconsin, 153 Wis.2d 165, 174, 450 N.W.2d 470 (Ct.App.1989). In this case, while it is reasonable to conclude that a corporation cannot have a "family," it is also reasonable to conclude that an insurance contract may define the term "family member" such that an individual is a member of a corporate family for insurance purposes. "This court has recognized that the purchase of uninsured motorist coverage protects the policyholder and their relatives (as defined in the policy )." Martin, 146 Wis.2d at 769, 433 N.W.2d 1 (emphasis added). Indeed, while it is true that a corporation cannot be related to a person by blood, marriage or adoption, it is equally true that a corporation is a "person" in the contemplation of the law, may own a home, sec. 180.0302(4), Stats., may be appointed as a legal guardian, sec. 880.35, Stats., and may have custody, physical placement or legal responsibility for wards, secs. 48.60 and 48.61, Stats. In this case, where Sunburst was in the business of providing residential care and treatment facilities to wards, it reasonably could interpret the policy language as protecting such wards.

St. Paul further contends that the children were neither wards nor foster children, or that if they were, they were wards of their respective counties and did not live with those counties. The children argue that under a plain reading of the policy and the term "ward," they were wards living with Sunburst. We agree with the children. The record establishes that Evans was a ward of Milwaukee county and that Carrington was a ward of Wood county. Both children were living with Sunburst pursuant to dispositional orders of the children's division of the circuit court. Sunburst is a residential treatment center licensed as a child welfare agency pursuant to sec. 48.60, Stats., which has the authority to "contract with any parent or guardian or other person for the supervision or care and maintenance of any child." Section 48.61(2), Stats. Regardless of...