Casey v. Smith

• Citation: 846 N.W.2d 791,2014 WI 20,353 Wis.2d 354
• Decision Date: 18 April 2014
• Docket Number: No. 2012AP667.,2012AP667.
• Parties: Brian CASEY, Plaintiff, v. Ronald SMITH, John Zeverino, Taylor Truck Line, Inc., Allstate Property and Casualty Insurance Company, Austin Mutual Insurance Company and Health Partners, Defendants, Acceptance Casualty Insurance Company, Defendant–Appellant–Petitioner, Great West Casualty Company, Defendant–Respondent.
• Court: Wisconsin Supreme Court

353 Wis.2d 354

846 N.W.2d 791

2014 WI 20

Brian CASEY, Plaintiff,

v.Ronald SMITH, John Zeverino, Taylor Truck Line, Inc., Allstate Property and Casualty Insurance Company, Austin Mutual Insurance Company and Health Partners, Defendants,Acceptance Casualty Insurance Company, Defendant–Appellant–Petitioner,^† Great West Casualty Company, Defendant–Respondent.

No. 2012AP667.

Supreme Court of Wisconsin.

Argued Jan. 14, 2014.

Decided April 18, 2014.

For the defendant-appellant-petitioner, there were briefs by Charles J. Noel and Charles J. Noel & Associates, P.A., Minneapolis, and oral argument by Charles J. Noel.

For the defendant-respondent, the cause was argued by Tamara L. Novotny with whom on the brief was Michael W. McNee, and Cousineau McGuire Chartered, Minneapolis.

ANN WALSH BRADLEY, J.

¶ 1 Defendant Acceptance Casualty Insurance Company (Acceptance) seeks review of a published decision of the court of appeals affirming the circuit court's grant of summary judgment in favor of Great West Casualty Company (Great West).¹ Both Acceptance and Great West issued liability insurance policies for a semi-tractor that was owned by John Zeverino and leased to Taylor Truck Line. Acceptance provided a non-trucking use policy and Great West provided a commercial truckers' policy.

¶ 2 Both parties agree that the accident is covered by insurance, but disagree as to which of the two policies provides the coverage. Each insurer filed a summary judgment motion asserting the other was responsible for coverage. Both the circuit court and the court of appeals concluded that of the two policies, the Acceptance policy provided coverage for the multi-vehicle accident.

¶ 3 Acceptance asserts that its policy provides no coverage because it contains two exclusions which preclude coverage. It primarily focuses on 14(b) that excludes coverage when a semi-tractor is being used "in the business of" a lessee. Acceptance contends that because the accident occurred while the semi-tractor's driver, John Zeverino, was on his way to a maintenance facility for repairs to the grille and oil filler tube, the semi-tractor was being used in the business of Taylor Truck Line at the time of the accident.

¶ 4 Alternatively, it advances that 14(a) excludes coverage when a semi-tractor is "en route to" a "business purpose" and that obtaining maintenance is a business purpose. Acceptance argues that because obtaining repairs constitutes a business purpose, there is no coverage under its non-trucking use policy.

¶ 5 We determine that neither of the exclusions in Acceptance's policy precludes coverage. The facts of record do not support the application of exclusion 14(b). Zeverino was not using the semi-tractor "in the business of" Taylor Truck Line because the repairs here did not further Taylor's commercial interests. There is nothing in the record that shows the repairs were required by the lease. Additionally, the repairs were not done pursuant to orders from Taylor Truck Line, and they were not necessary for the semi-tractor to continue its service.

¶ 6 Further, Acceptance's argument that coverage is excluded because Zeverino was en route to the business purpose of obtaining maintenance reflects an overly expansive interpretation of the text of exclusion 14(a). Like the court of appeals, we are concerned that its interpretation may render coverage illusory. Instead, in examining the text of exclusion 14(a) we determine that it refers to maintenance necessary to allow the semi-tractor to carry property. It is undisputed that the semi-tractor could and did carry loads without the repairs to the grille and oil filler tube.

¶ 7 Because the exclusions in Acceptance's policy do not apply, we conclude that its non-trucking use policy provides coverage for the accident. Accordingly, we affirm the court of appeals.

I.

¶ 8 The parties repeatedly asserted that the facts in this case are not in dispute. Zeverino owned a 2003 Freightliner semi-tractor which he leased to Taylor Truck Line, Inc. Under the terms of the lease Zeverino agreed to provide a driver and use his semi-tractor exclusively for Taylor Truck Line. The lease also provided that Zeverino would "bear all expenses to the operation to the equipment, including ... [r]epairs and maintenance" and "[m]aintain[ ] the equipment in a state of repair required by all applicable regulations."² The lease further required Taylor Truck Line to obtain insurance as required by federal law³ and Zeverino to obtain "bobtail liability insurance"⁴ to cover the semi-tractor "when not used in performance under this agreement."

¶ 9 Pursuant to the lease, Zeverino obtained an insurance policy for non-trucking use coverage from Acceptance. An exclusion in section 14(a) of the policy states that it does not cover the semi-tractor "[w]hile being operated, maintained or used to carry property in any business or en route to or from such business purpose." Section 14(b) of the policy sets forth another exclusion that states that it does not cover the semi-tractor " [w]hile used in the business of anyone to whom the ‘auto’ is rented."

¶ 10 Taylor Truck Line obtained a commercial truckers' insurance policy from Great West. The policy provides coverage for:

[t]he owner or anyone else from whom you lease, for more than 30 consecutive days, a covered "auto" with a driver that is not a "trailer" while the covered "auto":

(1) Is being used exclusively in your business as a "trucker."

The policy defines a "trucker" as "any person or organization engaged in the business of transporting property by ‘auto’ for hire."

¶ 11 In January 2009, Zeverino took the semi-tractor to FABCO, a truck maintenance facility in Eau Claire, to have its engine control module recalibrated. While the semi-tractor was there, FABCO inadvertently damaged its grille. FABCO ordered a new one and called Zeverino when it arrived. Instead of making an appointment to replace the grille, Zeverino was to return to FABCO to have the grille replaced whenever it was convenient for him. In addition, Zeverino had previously ordered a new oil filler tube which he had intended to install himself. FABCO offered to install the new tube at the same time it replaced the grille.

¶ 12 The damaged grille did not put the truck out of service or prevent Zeverino from completing or accepting new loads to haul. Zeverino indicated that he was on duty several hours from February 20 through February 25, 2009. He testified that having the grille replaced "was not a routine maintenance, but it was a repair that they had broken, they had to replace." He agreed that he needed to have the repair work done "to have [the] tractor the way [he] needed it to ... operate as an owner, operator for Taylor Truck Line."

¶ 13 On February 27, 2009, approximately a month after the grille was broken, Zeverino left his home in Prescott and headed to Eau Claire to have the grille replaced. Zeverino was off-duty at the time. Taylor Truck Line did not know he was going to Eau Claire that day and he was not under any order or instruction from Taylor Truck Line to do so. Zeverino stated in his deposition that he did not consider himself to be "in the business of Taylor Truck Line at the time." Although he indicated that the grille was "starting to fall apart and fall off on the highway," Zeverino also testified that he could have taken a load that day without service to his grille or oil filler tube.

¶ 14 While en route to Eau Claire, Zeverino's tractor was involved in a multi-vehicle accident that included vehicles driven by Ronald Smith and Brian Casey. Zeverino wrote in his Driver's Daily Log that he was "driving" at the time of the accident and "on duty" while at the scene of the accident. While there, Zeverino filled out an accident report which indicated that there was nothing wrong with the semi-tractor prior to the accident. A Wisconsin state trooper who arrived at the scene conducted a Level 1 DOT inspection of Zeverino's semi-tractor, apparently the most comprehensive type of post-accident inspection. The trooper also completed a "Driver/Vehicle Examination Report" and noted that no violations were discovered during the inspection. Thereafter, the trooper permitted Zeverino to continue on to Eau Claire, where FABCO replaced the grille and oil filler tube. Together the repairs took approximately an hour.

¶ 15 Casey filed a complaint on June 29, 2010, seeking recovery for injuries he sustained in the accident. He included Zeverino, Taylor Truck Line, Acceptance, and Great West as named defendants.

¶ 16 Both insurance companies filed cross motions for summary judgment on April 6, 2011. Acceptance pointed to two relevant exclusions in its non-trucking policy, section 14(a) and section 14(b). It asserted that at the time of the accident the semi-tractor was being used "in the business of" Taylor Truck Line. Additionally, it argued that because the accident occurred while Zeverino was "en route" to have maintenance done on the semi-tractor, it was being used for a "business purpose" of the lessee. Acceptance contended that the exclusions precluded coverage.

¶ 17 Great West asserted that Zeverino was not using the semi-tractor in the business of the lessee because the repairs were not needed to make the semi-tractor safe or available for Taylor Truck Line's use, and Taylor Truck Line had not directed Zeverino to have the repairs done. Great West argued that it was not responsible for providing coverage for the accident because its policy afforded coverage only while the semi-tractor was "being used exclusively in [Taylor's] business."

¶ 18 The circuit court issued an order denying both motions. It determined that there was a triable issue of fact as to whether Zeverino was performing in furtherance of the business or commercial interests of Taylor Truck Line.

¶ 19 Upon a motion for reconsideration, together with supplemental memoranda of law and supplemental affidavits, the circuit court granted summary judgment in favor of Great...