Fletcher v. Aetna Cas. and Sur. Co.

Decision Date29 October 1991
Docket NumberNo. 91-0785,91-0785
Citation165 Wis.2d 350,477 N.W.2d 90
PartiesSteven J. FLETCHER, Gayle B. Fletcher and Carla J. Fletcher, Plaintiffs-Respondents-Cross-Appellants, v. The AETNA CASUALTY AND SURETY COMPANY, Defendant-Appellant-Cross-Respondent, d New York Life Insurance Company, Defendant.
CourtWisconsin Court of Appeals

Lawrence J. Wiesneske for John Schiek of O'Melia, Schiek & McEldowney, S.C., Rhinelander, for defendant-appellant-cross-respondent.

Carl L. Ricciardi and Virginia M. Antoine of Habush, Habush & Davis, S.C., Wausau, for plaintiffs-respondents-cross-appellants.

Before CANE, P.J., and LaROCQUE and MYSE, JJ.

LaROCQUE, Judge.

Aetna Casualty & Surety Company appeals an order declaring that the dune buggy Steven Fletcher occupied as a passenger when he was injured is a covered vehicle under the uninsured motor vehicle (UM) provisions of two liability policies issued to Gayle Fletcher, Steven's father. 1 The Fletchers seek recovery for Steven's injuries under the UM provisions of their Aetna policies and obtained partial summary judgment. The policies exclude from UM coverage any vehicle "[w]hich is a farm type tractor or equipment designed mainly for use off public roads while not on public roads." 2 Aetna argues that the phrase "farm type" modifies only the word "tractor" and that "equipment" refers to non-farm equipment. Therefore, Aetna argues that the dune buggy is excluded because it was designed for and used off a public road. 3 The trial court concluded that the policy is ambiguous because the phrase "farm type" could reasonably be read to modify both "tractor" and "equipment." Because ambiguities must be construed in favor of the insured, we agree with the trial court that the exclusion refers to farm-type tractors and farm-type equipment and not to a dune buggy. We therefore affirm.

The material facts relating to the dispositive issue are undisputed. Steven was injured while riding as a passenger in a dune buggy. Aetna concedes that the dune buggy was uninsured. At the time of the accident, the Fletchers had in effect two policies of motor vehicle liability insurance. Both policies provided UM coverage and contained identical language. Steven was sixteen when the accident occurred, was living with his parents and was an additional insured under these policies.

The interpretation of words or clauses in an insurance contract is a question of law that we review without deference to the trial court. Just v. Land Reclamation, Ltd., 155 Wis.2d 737, 744, 456 N.W.2d 570, 572 (1990). We may not modify the unambiguous language of an insurance policy. Schroeder v. Blue Cross & Blue Shield, 153 Wis.2d 165, 173, 450 N.W.2d 470, 473 (Ct.App.1989). However, where an ambiguity exists, we must construe the policy against its drafter and in favor of the insured. Id. 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. Northwestern Nat'l Ins. Co. v. Nemetz, 135 Wis.2d 245, 255, 400 N.W.2d 33, 37 (Ct.App.1986).

Aetna argues that the dune buggy is not covered under the terms of UM coverage because an uninsured motor vehicle does not include any vehicle "[w]hich is a farm type tractor or equipment designed mainly for use off public roads while not on public roads." Aetna contends that this language is unambiguous and the only meaning of the phrase in the mind of a reasonable person would include farm tractors as well as any other types of vehicles principally designed and used for off-road purposes. We disagree.

It is uncertain whether the adjective phrase "farm type" modifies both the word "tractor" as well as the word "equipment," or just the word "tractor." This uncertainty is increased by the absence of commas after the words "tractor" and "roads." A reasonable person could construe the provision either to exclude only farm-type tractors or farm equipment or to exclude farm-type tractors as well as any other equipment that is not designed mainly for use on public roads.

Aetna contends that if the phrase "farm type" is construed to modify both "tractor" and "equipment," then the word "tractor" is rendered superfluous because farm-type equipment necessarily includes tractors. Under different circumstances, a construction that gives reasonable meaning to every provision of an insurance contract is preferable to one leaving part of the language useless or meaningless. Stanhope v. Brown County, 90 Wis.2d 823, 848-49, 280 N.W.2d 711, 722 (1979). Here, however, under Aetna's construction, the phrase "farm type tractor" would also be rendered superfluous. A farm tractor is equipment designed primarily for use off public roads. Aetna seeks to avoid this problem, arguing that the phrase "farm type tractor" is meaningful because it distinguishes farm-type tractors from truck tractors of the type that haul semi-trailers on the highway. Aetna's distinction is invalid: Truck tractors are not vehicles principally designed for use off public roads.

Aetna argues that its exception to UM coverage excludes a dune buggy because of the definitions of "motor vehicle" found in sec. 632.32, Stats. Section 632.32 merely sets forth the minimum requirements for automobile and motor vehicle liability insurance policies in Wisconsin. It defines "motor vehicle" to mean "[a] self-propelled land motor vehicle designed for travel on public roads and subject to motor vehicle registration under ch. 341. It includes trailers and semitrailers designed for use with such vehicles. It does not include farm tractors, well drillers, road machinery or snowmobiles." Section 632.32(2)(a), Stats. Aetna's implicit argument is apparently that its policy was meant to mirror the minimum requirements of the law and that the statute does not require UM coverage for vehicles principally designed for off-road travel. We disagree with this contention. If Aetna intended to exclude all off-road vehicles, it should have said so unequivocally.

In line with its preceding argument, Aetna also cites Frozine v. St. Paul Fire & Marine Ins. Co., 195 Wis. 494, 218 N.W. 845 (1928), and Lewis v. INA, 203 Wis. 324, 234 N.W. 499 (1931), for the proposition that the rule of construing policies liberally in the insured's favor does not apply to a standard or statutory policy. Frozine states the explanation for this deviation from the general rule: "It has been ruled many times that policies of insurance are to be liberally construed in favor of the insured because the insurer has prepared the contract. This reason for such construction would seem to drop out in case of a contract prescribed in its details by statute, at least so far as the statute covered such details." Id. 195 Wis. at 496, 218 N.W.2d at 846 (quoting Rosenthal v. INA, 158 Wis. 550, 553, 149 N.W. 155, 156 (1914)). These cases are inapplicable. The precise policy language we are concerned with here is not part of a statutory policy, that is, it is not required by law. Aetna's policy exclusions are not statutory merely because UM coverage is required by statute and must be approved by the commissioner of insurance. In fact, the supreme court has stated that an insurance policy may expand but not reduce the...

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