Ennis v. Western Nat. Mutual Ins. Co., 98-1095

• Decision Date: 04 February 1999
• Docket Number: No. 98-1095,98-1095
• Citation: 593 N.W.2d 890,225 Wis.2d 824
• Parties: Michelle ENNIS, Plaintiff-Respondent, d v. WESTERN NATIONAL MUTUAL INSURANCE COMPANY, Defendant-Appellant, WEA Insurance Corp. and William Ennis, Defendants. . Oral Argument
• Court: Wisconsin Court of Appeals

Page 890

593 N.W.2d 890

225 Wis.2d 824

Michelle ENNIS, Plaintiff-Respondent, ^d v. WESTERN NATIONAL MUTUAL INSURANCE COMPANY, Defendant-Appellant WEA Insurance Corp. and William Ennis, Defendants.

No. 98-1095.

Court of Appeals of Wisconsin.

Oral Argument Feb. 4, 1999.

Opinion Released March 23, 1999.

Opinion Filed March 23, 1999.

On behalf of the defendant-appellant, the cause was submitted on the briefs of Eric J. Magnuson and Gregory M. Weyandt and oral argument by Gregory M. Weyandt of Rider, Bennett, Egan & Arundel, LLP, of Minneapolis.

On behalf of the plaintiff-respondent, the cause was submitted on the brief of Charles B. Harris and Martha H. Heidt and oral argument by Charles B. Harris of Doar, Drill & Skow, S.C. of Baldwin.

Before CANE, C.J., MYSE, P.J., and HOOVER, J.

HOOVER, J.

Western National Mutual Insurance Company appeals a judgment declaring that it is obligated to pay $400,000 to Michelle Ennis under its automobile insurance policy's uninsured motorist provision. Western National issued the policy to Michelle's father, William Ennis. Western National contends the trial court erred by construing the policy to maximize the benefits payable. It argues that the trial court should have held that the policy afforded William liability coverage. We agree that the policy provides liability benefits to Michelle because the ambiguity must be construed in favor of coverage and, therefore, she was not entitled to uninsured motorist benefits. We reverse the judgment and remand for further proceedings consistent with this opinion.

Michelle was injured in an automobile accident while riding as a passenger in William's Ford pickup truck. William was delivering the Pioneer Press paper to customers on his newspaper route at the time of the accident. Michelle was seriously injured when the pickup truck collided with a tree. No other vehicles were involved. At the time of the collision, Western National insured William's pickup. Michelle was a named insured. The policy afforded several different coverages, including liability and combined uninsured and underinsured motorist coverages. Each section contained its own definition of an "insured" as well as separate limits: the liability limit was $100,000, and the uninsured limit was $100,000. The policy insured four vehicles, thereby providing a maximum combined uninsured limit of $400,000. ¹ The policy's liability portion contained a "carrying for a fee" exclusion that provided:

A. We do not provide Liability Coverage for any person:

.

5. For that person's liability arising out of the ownership or operation of a vehicle while it is being used to carry persons or property for a fee. This exclusion (A.5.) does not apply to a share-the-expense car pool.

It is undisputed that if the "carry for a fee" exclusion applies, William's vehicle is uninsured and Michelle would be entitled to stack the uninsured motor vehicle benefits for a total recovery of $400,000. It is also undisputed that if the exclusion does not apply, William's vehicle was insured and Michelle would not be entitled to uninsured motor vehicle benefits. ² Therefore our focus is on the meaning of this exclusion.

William had a newspaper route lease agreement with the Pioneer Press. Pursuant to that agreement, he received a list of home delivery subscribers and papers for delivery. He paid a wholesale price for the papers and charged five cents more than Pioneer's suggested urban retail rate. He assumed the risk of his subscribers not paying. The Pioneer Press also paid William a $275 per month route allowance. In addition to delivering the papers, William performed miscellaneous services in connection with his route, such as installing newspaper tubes for new customers. Some customers were solicited by, and paid, the Pioneer Press directly during promotions. For those customers, the Pioneer Press apparently sent a notification that delivery would continue beyond the initial order period unless the customer notified Pioneer. It also notified customers that "[c]osts will be slightly higher (30[cents] ) for home delivery by motor route carriers." At least one third of his customers were subscribers who paid Pioneer directly.

Michelle filed this action seeking a declaration that she was entitled to $400,000 uninsured motorist benefits because the policy's liability coverage did not apply as a result of the "carrying for a fee" exclusion. Michelle filed a motion for summary judgment requesting broad interpretation of the exclusion or a determination that it was ambiguous. Western National argued for a narrow construction. The trial court decided in Michelle's favor, concluding that, as a whole, the policy was ambiguous and accordingly should be construed in favor of the person standing to gain the maximum benefits. It concluded that the Ford pickup was an uninsured motor vehicle at the time of the accident and that the policy provided $400,000 uninsured motorist coverage to Michelle.

On appeal, we address whether the "carry for a fee" exclusion is ambiguous and, if so, what is the effect of the ambiguity. Michelle contends the exclusion unambiguously denies liability coverage to William, but that even if it is ambiguous, it is to be construed against the insurer by maximizing benefits payable under the policy as a whole. Western National concedes the exclusion is ambiguous, but claims it is to be construed against the insurer by affording liability coverage to William.

We review summary judgment rulings independently, Burkes v. Klauser, 185 Wis.2d 308, 327, 517 N.W.2d 503, 511 (1994), using the same methodology as the circuit court. Grams v. Boss, 97 Wis.2d 332, 338-39, 294 N.W.2d 473, 477 (1980). A motion for summary judgment must be granted when there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Section 802.08(2), STATS. We interpret an insurance policy's terms under a de novo standard, without deference to the decision of the circuit court. Kaun v. Industrial Fire & Cas. Ins. Co., 148 Wis.2d 662, 667, 436 N.W.2d 321, 323 (1989).

The parties' briefs devote considerable attention to whether the exclusion is ambiguous. Western National argues that the exclusion is simply the old public or livery conveyance exclusion in new clothes, and not only must there be a fee specific to the delivery, the delivery service must be held out to the public at large. Western National reasons that because William did not provide a for-a-fee public delivery service, the exclusion does not apply, and William has liability coverage rendering the policy's uninsured motorist provision inapplicable. During oral arguments, however, Western National conceded that the carry for a fee exclusion is ambiguous. We agree, although without benefit of a published Wisconsin case addressing the issue. ³ The parties have exhaustively briefed the issue, and because it may rise again we take this opportunity to resolve the question.

Our consideration whether the exclusion is ambiguous begins with the well-established rule that words or phrases in an insurance policy are ambiguous if, when read in context, they are susceptible to more than one reasonable interpretation. Tempelis v. Aetna Cas. & Sur. Co., 169 Wis.2d 1, 10, 485 N.W.2d 217, 220 (1992). Our focus is on whether the exclusion is susceptible to more than one reasonable interpretation when read in context. Id. In this regard, we consider the meaning to assign to the word "fee." In construing an insurance policy, we may look to dictionary definitions for the common meaning and usage of words. See Weimer v. Country Mut. Ins. Co., 211 Wis.2d 848, 867, 565 N.W.2d 595, 603 (Ct.App.1997). WEBSTER'S THIRD NEW INT'L DICTIONARY 833 (1993) defines "fee" as a fixed charge for various services. BLACK'S LAW DICTIONARY 553 (5th ed.1979) construes "fee" as a charge for a particular act or service, or reward, compensation or wage given to a person for performance of services or something done or to be done. Using these definitions, the exclusion is not susceptible to a reading that restricts its application to instances when the vehicle is held out for general public use. It could be intended to only apply to either any use of a vehicle to transport property when there is any payment to the insured, including wages, or only when there is a payment specifically for the particular act of transporting property. Either interpretation is reasonable; therefore, the exclusion is ambiguous. Tempelis, 169 Wis.2d at 10, 485 N.W.2d at 220.

Michelle contends that it does not matter whether the exclusion is ambiguous because under any interpretation it still applies. We disagree. If the exclusion applies only to a fee specifically charged for the particular act of transporting property, then the exclusion does not apply, and William would have liability coverage. ⁴ His arrangement with the Pioneer Press contained an element of business risk; if the subscribers on his route did not pay him for the paper, he absorbed the...