Forgues v. Heart of Texas Dodge, Inc.
| Decision Date | 31 July 2003 |
| Docket Number | Appeal No. 02-0658. |
| Parties | MONICA FORGUES, A MINOR, BY HER GUARDIAN AD LITEM COLLEEN J. MARTINE, AND NANCY ASHTON, PLAINTIFFS-CO-APPELLANTS, PPD PHARMACO AND STATE OF WISCONSIN, DEPARTMENT OF HEALTH AND FAMILY SERVICES, SUBROGATED-PLAINTIFFS, PROGRESSIVE NORTHERN INSURANCE COMPANY, INTERVENING PLAINTIFF, ALBERT L. ROBERTS AND DEANNA ROBERTS, INDIVIDUALLY AND AS PARENTS FOR MINOR CHILD, MARSHALL ROBERTS, NECESSARY-PARTIES-APPELLANTS, ESTATE OF MELINDA L. TURVEY, PHILLIP ELLENBECKER, CRAIG L. FECHTER, ESTATE OF PETER L. CHRISTMAN, PAM CHRISTMAN, STACI M. BECK, NICOLE M. MCDOUGAL, ELAINE MCDOUGAL, ESTATE OF AMBER LETTMAN, JOHN LETTMAN AND BONITA LETTMAN, AND BRANDON M. MCDANIEL AND BRANDY A. MCDANIEL, BY THEIR GUARDIAN AD LITEM, GREGORY R. WRIGHT, NECESSARY-PARTIES-CO-APPELLANTS, ESTATE OF JOSEPH D. WILD, DONALD R. WILD AND DIANA H. WILD, ESTATE OF CORY S. HANSON, CHARLES HANSON AND JANET HANSON, SHAWN KELLY-WEIR, AND KAILA B. GILLOCK, NECESSARY-PARTIES, v. HEART OF TEXAS DODGE, INC., UNIVERSAL UNDERWRITERS INSURANCE COMPANY, YES, INC. A/K/A YOUTH EMPLOYMENT SERVICES, INC., CHOAN A. LANE, ALLSTATE INSURANCE COMPANY AND JEREMY HOLMES, DEFENDANTS, SUBSCRIPTIONS PLUS, INC. AND KARLEEN HILLERY, DEFENDANTS-CO-APPELLANTS, SCOTTSDALE INSURANCE COMPANY, ACCEPTANCE INSURANCE COMPANIES, AND NATIONAL PUBLISHERS EXCHANGE, DEFENDANTS-RESPONDENTS. |
| Court | Wisconsin Court of Appeals |
APPEAL from an order of the circuit court for Dane County, No. 99-CV-952. JOHN C. ALBERT, Judge. Affirmed in part; reversed in part and cause remanded with directions.
Before Dykman, Roggensack and Lundsten, JJ.
¶1 This action arises from a single-vehicle van crash that resulted in the deaths of seven young people and serious injury to five others. The driver, Jeremy Holmes, was speeding when a police officer signaled the van to pull over. Holmes attempted to switch places with another passenger, lost control, and the van crashed.
¶2 Holmes and thirteen other young people in the van were employed by Youth Employment Services, Inc. (YES), a company owned by Choan Lane (collectively referred to as YES). YES hired these youths to sell magazine subscriptions. The group was traveling back to Janesville, Wisconsin, after a day and evening of selling magazines door to door in Appleton, Wisconsin.
¶3 This appeal involves most of the plaintiffs and necessary parties listed in the caption (collectively referred to as the plaintiffs). The plaintiffs have sued Jeremy Holmes, Choan Lane, YES, and two other companies that are involved in the sale and processing of magazine subscriptions: Subscriptions Plus, Inc., owned by Karleen Hillery (collectively referred to as Subscriptions Plus), and National Publishers Exchange. Scottsdale Insurance Company and Acceptance Insurance Company (collectively referred to as Scottsdale Insurance, except in the duty-to-defend portion of this opinion)1 are defendants in this action because they are insurers for Subscriptions Plus.
¶4 Scottsdale Insurance moved for summary judgment dismissing it from the lawsuit on the ground that, under the policy it sold to Subscriptions Plus, none of the claims against Subscriptions Plus create a duty to indemnify or a duty to defend. National Publishers moved for summary judgment dismissing it from the lawsuit on the ground that, in view of undisputed facts, it had no liability for any alleged claims. The circuit court granted both motions and entered an order dismissing Scottsdale Insurance and National Publishers from the action. Subscriptions Plus and the plaintiffs appeal that order.
¶5 We conclude that National Publishers was properly dismissed from the action, that Scottsdale Insurance (but not Acceptance Insurance) has a duty to defend Subscriptions Plus, and that Scottsdale Insurance and Acceptance Insurance have a potential duty to indemnify with respect to several claims against Subscriptions Plus. Accordingly, the order of the circuit court is affirmed in part and reversed in part, and the matter is remanded with directions.
¶6 On March 25, 1999, a single-vehicle van crash occurred at approximately 12:40 a.m. on Interstate 90 near Janesville. The driver of the van, twenty-year-old Jeremy Holmes, was driving in excess of eighty miles per hour. When a police officer signaled the van to pull over, Holmes, who did not have a valid driver's license, lost control of the van as he attempted to switch positions with another passenger. The van went off the road and into a ditch, rolling over several times. At least eleven of the fourteen occupants were thrown from the van.
¶7 Seven of these young people died: Peter Christman, Cory Hanson, Amber Lettman, Crystal McDaniel, Marshall Roberts, Melinda Turvey, and
Joseph Wild. Another five were seriously injured: Staci Beck, Craig Fechter, Monica Forgues, Shawn Kelly-Weir, and Nicole McDougal.
¶8 All fourteen occupants of the van were employees of YES. That night, they were returning to Janesville, Wisconsin, after having spent the day and evening selling magazines door to door in Appleton, Wisconsin. The thirteen passengers were members of a magazine subscription street crew organized by YES. Jeremy Holmes served in a semi-supervisory position over the crew as the "car handler." As a "car handler," Jeremy Holmes was responsible for driving the crew from location to location and was not obligated to sell door to door. In addition, Holmes received compensation for every magazine sold by every member of the crew that he "handled." All magazine order forms and subscription fees collected by the door-to-door street crew were turned over to YES.
¶9 YES operated the magazine subscription street crew at issue in this case. The street crew was sent to various locations, where the individual members would go door to door selling magazine subscriptions. YES would schedule where the crew went and would organize travel and overnight accommodations. YES retained a portion of the subscription fees collected as its own fee and forwarded the remainder of the fees and subscriber information on to Subscriptions Plus.
¶10 Subscriptions Plus, owned and operated by Karleen Hillery, took the hard copy orders procured by the street crew and converted them to electronic data. After taking a cut of the subscription fees, Subscriptions Plus would forward the remaining fees and subscription data to National Publishers.
¶11 National Publishers is a "magazine clearing house." There is no dispute that National Publishers processes magazine subscription orders pursuant
to contractual agreements with magazine publishers and contractual agreements with many magazine-subscription-selling entities. National Publishers and Subscriptions Plus had a written contract. Under that contract, National Publishers would receive the order data and remaining subscription fees from Subscriptions Plus, retain a portion of the subscription fees, and forward the remainder of the fees and order information to the publishers. Subscriptions Plus either did or was free to work with other companies like National Publishers, but here we are only concerned with its relationship with National Publishers. There is evidence that crew members used brochures in their sales activities that day that were produced by National Publishers. This creates the factual inference that the crew was selling subscriptions destined for processing at National Publishers, and supplies the necessary connection to proceed to address the arguments on appeal.
¶12 Following the van crash, much litigation ensued. Jeremy Holmes and Choan Lane were criminally prosecuted and convicted. Holmes was convicted of seven counts of homicide by negligent operation of a vehicle and five counts of causing great bodily harm by reckless driving. Lane was convicted of interference with child custody, conspiracy to obstruct an officer, contributing to the delinquency of a minor, and party to the crime of contributing to truancy.
¶13 Related actions were filed in federal court. They will be discussed as necessary below.
¶14 The plaintiffs filed suit in state court against several entities including National Publishers, Subscriptions Plus, and Scottsdale Insurance. The circuit court, acting on motions filed by National Publishers, Subscriptions Plus, and Scottsdale Insurance, granted summary judgment in favor of National Publishers and Scottsdale Insurance. The circuit court concluded that the
undisputed facts showed that National Publishers had no liability under any claims against it and dismissed the company from the suit. The court also dismissed Scottsdale Insurance from the suit, concluding that Scottsdale had no duty to indemnify and no duty to defend. Although the court dismissed Subscriptions Plus's insurer, Subscriptions Plus itself still faces all claims filed against it. Subscriptions Plus does not appeal the circuit court's denial of its summary judgment motion, but it does appeal the circuit court's orders that Scottsdale Insurance has no duty to defend and no duty to indemnify. The plaintiffs appeal the circuit court's orders that Scottsdale Insurance has no duty to defend and no duty to indemnify, and additionally appeal the order dismissing National Publishers from the action.
¶15 We review summary judgment decisions de novo, applying the same method as the circuit court. Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315-16, 401 N.W.2d 816 (1987). We do so, independent from the circuit court, but with the benefit of its analysis. Lambrecht v. Estate of Kaczmarczyk, 2001 WI 25, ¶21, 241 Wis. 2d 804, 623 N.W.2d 751.
Specifically, a court first examines the pleadings to determine whether a claim for relief is stated and whether a genuine issue of material fact is presented.
If the pleadings state a claim and demonstrate the existence of factual issues, a court considers the moving...
To continue reading
Request your trial