Casey v. Smith
| Decision Date | 15 January 2013 |
| Docket Number | No. 2012AP667.,2012AP667. |
| Citation | 827 N.W.2d 917,2013 WI App 24,346 Wis.2d 111 |
| 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, Great West Casualty Company, Defendant–Respondent. |
| Court | Wisconsin Court of Appeals |
OPINION TEXT STARTS HERE
On behalf of the defendant-appellant, the cause was submitted on the briefs of Charles J. Noel of Charles J. Noel & Associates, P.A., Minneapolis, MN.
On behalf of the defendant-respondent, the cause was submitted on the brief of Michael W. McNee and Tamara L. Novotny of Cousineau McGuire Chartered, Minneapolis, MN.
Before HOOVER, P.J., MANGERSON, J., and THOMAS CANE, Reserve Judge.
[346 Wis.2d 115]¶ 1 This case involves an insurance coverage dispute arising out of a multi-vehicle accident that took place on February 27, 2009. One of the vehicles involved was a semi-tractor owned and operated by John Zeverino, but leased to Taylor Truck Line, Inc. Taylor had a commercial automobile policy through Great West Casualty Company, and Zeverino had a non-trucking use automobile policy through Acceptance Casualty Insurance Company. The circuit court determined the Acceptance policy provided coverage for claims stemming from the accident, and the Great West policy did not, because Zeverino was not acting “in the business of” Taylor at the time of the accident. We agree, and therefore affirm the summary judgment in favor of Great West.
¶ 2 On October 10, 2006, Zeverino leased a Freightliner semi-tractor he owned to Taylor, pursuant to an “Independent Contractor Equipment Lease Agreement.” The agreement provided that Zeverino would use the tractor “to transport, load and unload on behalf of [Taylor] ... such traffic as [Taylor] may from time to time make available to [Zeverino.]” The agreement further specified that Taylor would have “exclusive possession, control and use” of the tractor and would “assume complete responsibility to the public for the operation of [the tractor]” during the term of the lease. It also provided that Zeverino would be responsiblefor “[m]aintaining the [tractor] in the state of repair required by all regulations” and would bear all repair and maintenance expenses.
¶ 3 In addition, Taylor and Zeverino each agreed to maintain certain insurance, which was to provide coverage for the tractor depending on how it was being used. Taylor agreed “to provide and maintain insurance coverage for the protection of the public from damage to persons and property[.]” However, Taylor's insurance would be in effect only when the tractor was “being operated in the exclusive service of [Taylor] and while actually engaged in transportation for [Taylor.]”
¶ 4 Zeverino, in turn, agreed to “indemnify and hold [Taylor] harmless from all claims relating to [Zeverino's] bobtailing of the equipment[.]” In trucking industry parlance, “bobtailing” means driving a tractor without an attached trailer. See Continental Cas. Co. v. Transport Indem. Co., 16 Wis.2d 189, 192, 114 N.W.2d 137 (1962). Zeverino also agreed to carry “so-called bobtail liability insurance coverage with respect to public liability or property damage ... as concerns all equipment hereunder when not used in performance of a trip under this agreement.” Bobtail insurance is another name for non-trucking use insurance, which generally covers a tractor when it is not being used for trucking purposes. See Royal Indem. Co. v. Providence Washington Ins. Co., 92 N.Y.2d 653, 684 N.Y.S.2d 470, 707 N.E.2d 425, 426 n. 1 (1998).
¶ 5 In accordance with the lease agreement, Taylor obtained a commercial automobile policy from Great West, which provided $1,000,000 in liability coverage. Zeverino obtained a non-trucking use policy from Acceptance, which also had a $1,000,000 liability limit.
¶ 6 In January 2009, Zeverino drove the tractor to FABCO, a Caterpillar dealership in Eau Claire, Wisconsin, to have its electronic control module adjusted. While performing the adjustment, FABCO damaged the tractor's grille. FABCO ordered a new grille, and called Zeverino when it arrived. Instead of making an appointment to replace the grille, FABCO instructed Zeverino to stop by whenever it was convenient. In addition, Zeverino had previously ordered a new oil filler tube for the tractor after the existing tube broke off at the engine block. FABCO offered to install the new tube at the same time it replaced the grille.
¶ 7 On February 27, 2009, Zeverino had the day off work. He set out from his home and began driving his tractor to FABCO to have the grille replaced. He planned to return home after FABCO completed the work. No one from Taylor knew that he was going to FABCO, and he was not doing so pursuant to any orders or instructions from Taylor. He did not consider himself to be acting “in the business of Taylor” at the time, and he was not pulling a trailer or any other freight. However, while driving to FABCO, Zeverino's daily driver's log reflected that he was “driving,” rather than “off duty.”
¶ 8 At his deposition, Zeverino testified he “needed to get [the grille] repaired” because it was “already starting to fall apart and fall off on the highway.” He stated the repairs were necessary for the tractor to operate “the way [he] needed it to ... as an owner, operator for [Taylor.]” However, he conceded the broken grille and oil filler tube did not prevent him from hauling loads on Taylor's behalf. He also admitted the tractor was never placed out of service because of these defects.
¶ 9 On the way to FABCO, Zeverino was involved in an accident with three other vehicles, including one driven by BrianCasey. At the accident scene, a Wisconsin state trooper conducted a “Level I” inspection of Zeverino's tractor, the most comprehensive type of post-accident inspection, and completed a “Driver/Vehicle Examination Report.” The report noted that no violations were discovered during the inspection of the tractor. The trooper crossed off the portion of the form requiring certification that “all Out of Service defects ... have been repaired and the vehicle has been restored to safe operating condition.” At the accident scene, Zeverino logged himself as “on duty (not driving)” on his driver's daily log. Following the accident, he drove the tractor to FABCO, where the grille and oil filler tube were replaced as planned.
¶ 10 Casey subsequently sued Zeverino and several other defendants, asserting personal injury claims. A dispute arose between Great West and Acceptance as to which of their policies covered Casey's claims. Both insurers agreed that one, but not both, of their policies afforded coverage. They also agreed that resolution of the coverage issue turned on whether Zeverino was operating the tractor “in the business of” Taylor at the time of the accident. If so, Great West's commercial automobile policy provided coverage; if not, there was coverage under Acceptance's non-trucking use policy.
¶ 11 The matter was submitted to the circuit court on cross-motions for summary judgment. The circuit court agreed with Great West that Zeverino was not acting “in the business of” Taylor at the time of the accident. As a result, the court concluded the Acceptance policy, not the Great West policy, provided coverage. The court granted Great West summary judgment, and Acceptance now appeals.
¶ 12 We review a grant of summary judgment independently, using the same methodology as the circuit court. Palisades Collection LLC v. Kalal, 2010 WI App 38, ¶ 9, 324 Wis.2d 180, 781 N.W.2d 503. Summary judgment is appropriate where there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Wis. Stat. § 802.08(2). 2
¶ 13 Here, the facts are undisputed, but the parties disagree as to which insurance policy affords coverage under the facts presented. Interpretation of an insurance policy presents a question of law subject to our independent review. Greene v. General Cas. Co., 216 Wis.2d 152, 157, 576 N.W.2d 56 (Ct.App.1997). Our goal in interpreting an insurance policy is to give effect to the parties' intent. Folkman v. Quamme, 2003 WI 116, ¶ 16, 264 Wis.2d 617, 665 N.W.2d 857. If the policy language is unambiguous, we simply enforce it as written. Marnholtz v. Church Mut. Ins. Co., 2012 WI App 53, ¶ 10, 341 Wis.2d 478, 815 N.W.2d 708. However, we construe ambiguous policy language against the insurer and in favor of coverage. Id. Policy language is ambiguous if it is susceptible to more than one reasonable interpretation. Folkman, 264 Wis.2d 617, ¶ 13, 665 N.W.2d 857.
¶ 14 When we interpret an insurance policy, we first examine the policy's insuring agreement to determine whether it makes an initial grant of coverage for the plaintiff's claim. See Olson v. Farrar, 2012 WI 3, ¶ 41, 338 Wis.2d 215, 809 N.W.2d 1. If so, we then determine whether any of the policy's exclusions preclude coverage. See id. “[E]xclusions are narrowly construed against the insurer.” Link v. General Cas. Co. of Wis., 185 Wis.2d 394, 399, 518 N.W.2d 261 (Ct.App. 1994). Finally, we determine whether an exception to an exclusion reinstates coverage. See Olson, 338 Wis.2d 215, ¶ 41, 809 N.W.2d 1.
¶ 15 Acceptance does not dispute that the non-trucking use policy it issued to Zeverino makes an initial grant of coverage for Casey's claims. However, Acceptance argues two of the policy's exclusions apply. We examine each exclusion in turn.
¶ 16 Acceptance first contends Exclusion 14(b) precludes coverage for Casey's claims. Exclusion 14(b) states that the insurance provided by the policy does not apply to “a covered ‘auto’ ... [w]hile used in the business of anyone to whom the ‘auto’ is rented[.]” It is undisputed that Zeverino's tractor constitutes a “co...
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