Grotelueschen by Doherty v. American Family Mut. Ins. Co., 90-2571

• Decision Date: 05 June 1991
• Docket Number: No. 90-2571,90-2571
• Parties: Stephanie GROTELUESCHEN, by her Guardian ad Litem, Joseph G. DOHERTY, Keith T. Grotelueschen and Roxanne Grotelueschen, Plaintiffs-Respondents, d v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant-Appellant, Ronald E. Dimmer, Saukville Plumbing, Inc., and General Casualty Company of Wisconsin, Defendants, Cera-Mite Corporation, Defendant-Respondent. d
• Court: Wisconsin Court of Appeals

Page 544

472 N.W.2d 544

163 Wis.2d 666

Stephanie GROTELUESCHEN, by her Guardian ad Litem, Joseph G DOHERTY, Keith T. Grotelueschen and Roxanne Grotelueschen, Plaintiffs-Respondents,^d v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant-Appellant Ronald E. Dimmer, Saukville Plumbing, Inc., and General Casualty Company of Wisconsin, Defendants Cera-Mite Corporation, Defendant-Respondent. ^d

No. 90-2571.

Court of Appeals of Wisconsin.

Submitted on Briefs March 15, 1991.

Opinion Released June 5, 1991.

Opinion Filed June 5, 1991.

Phillip E. Crump, Borgelt, Powell, Peterson & Frauen, S.C., Milwaukee, for defendant-appellant.

Gregg E. Bridge, Petrie & Stocking, S.C., Milwaukee, for defendant-respondent.

Joseph G. Doherty and Patrick R. Griffin, Bunk, Doherty & Griffin, S.C., West Bend, for plaintiffs-respondents.

Before NETTESHEIM, P.J., and BROWN and ANDERSON, JJ.

NETTESHEIM, Presiding Judge.

This is an insurance policy coverage case. American Family Mutual Insurance (American Family) appeals from a judgment directing it to pay $570,000 to the Grotelueschens ¹ as damages resulting from a tractor lawn mower accident in which Stephanie Grotelueschen was injured by the actions of Ronald Dimmer, the insured. At summary judgment, the trial court ruled that Dimmer's actions were covered by a "Businessowners [sic] Package Policy" issued by American Family to Dimmer's partnership.

The Grotelueschens contend that coverage exists on two bases: (1) under the policy's "Comprehensive General Liability" provision; and (2) because Dimmer was engaged in partnership conduct covered by the policy. We disagree with both arguments. Accordingly, we reverse the judgment of the trial court.

The essential facts at the time of the accident are not in dispute. Ronald and Louise Dimmer owned and operated a partnership known as "D & R Rentals." The partnership owned an eight-unit apartment building located at 417 Dries Street in Saukville, Wisconsin. Mr. Dimmer was also part owner and operator of Saukville Plumbing, Inc.

The partnership insured the apartment building under a "Businessowners [sic] Package Policy" issued by American Family. The policy listed the insured as "Dimmer, Ronald E & Louise J Dimmer" and identified them as a "partnership." The policy recited the business premises site as 417 Dries Street, Saukville, the address of the apartment building.

The Dimmers also jointly owned two other properties in Saukville--their private residence on South Main Street and a lot on North Mill Street. The lot was vacant save for a storage shed which the Dimmers dubbed the "red shed." The Dimmers purchased the red shed some years before the apartment building. The three properties--the apartment building, the private residence, and the "red shed" lot--are near, but not contiguous to, each other.

Dimmer personally performed the maintenance and grounds keeping for all three properties. He used the red shed as storage for numerous items. Some items were the Dimmers' personal equipment and materials used in all of their activities. Other items were related solely to Saukville Plumbing. Still other items were related solely to the apartment building. Most items associated with the upkeep of the apartment building were kept in the red shed, for the apartment building had only a small--four feet by five feet--storage area.

The Dimmers paid all expenses associated with the red shed and the red shed lot, including property taxes, insurance, and repairs, with their personal funds. The red shed was included in the coverage provided under a homeowner's policy issued to the Dimmers by General Casualty Insurance Company of Wisconsin.

The Dimmers purchased the lawn tractor involved in the accident with their personal funds. ² Neither the partnership nor Saukville Plumbing depreciated the tractor for tax purposes.

In the spring and summer, Dimmer used the lawn tractor to cut the grass at his residence, the apartment building and the Saukville Plumbing premises. Rather than transporting the tractor on a trailer, Dimmer simply drove the tractor to and from the three properties. When the tractor was not in use, Dimmer kept it at either his residence or the red shed. During the winter months, Dimmer kept the tractor in Saukville Plumbing's heated shop. The tractor's off-season attachments--the snowthrower in the summer, the mower in the winter--were stored in the red shed.

On May 20, 1983, the day of the accident, the tractor mower was stored at the Dimmers' The red shed lot is surrounded by a fence. The shed itself is situated on the edge of the lot line which runs along North Mill Street. The only entrance to the shed itself is directly off North Mill Street, through an overhead garage door. However, the red shed lot may be entered through a gate in a section of the fence which runs the length of another lot line. This gate is accessible from a gravel service drive on the other side of the fence, which forms the boundary of the adjoining property: a small park. A grassy strip, approximately nine or ten feet in width, lies between the edge of the gravel drive and the fence surrounding the red shed lot.

residence. When Dimmer returned home after work, he decided to mow the lawn at the apartment building. He hitched a small, two-wheeled trailer to the tractor, placed his four-year-old granddaughter Stephanie on his lap, and drove to the apartment building, some three blocks away. Upon arrival at the apartment building, Dimmer unhitched the trailer from the tractor and placed Stephanie in the trailer. While Dimmer mowed the lawn, Stephanie sat [163 Wis.2d 672] and watched from the trailer. When Dimmer finished mowing, he and Stephanie raked up the clippings. Dimmer then reattached the trailer and drove with Stephanie to the red shed lot, a distance of approximately three and one-half blocks. Stephanie rode in the trailer.

Dimmer approached the red shed lot from the gravel drive in the park, as was his usual practice. He stopped outside the gate, unhooked the trailer, and left the trailer--with Stephanie still seated inside--on the grassy strip between the gravel drive and the fence surrounding the lot. Dimmer opened the gate, drove the tractor mower through, and commenced mowing the red shed lot. Shortly thereafter, Dimmer backed the tractor mower up to avoid a large vine growing near the fence. As he backed up, Dimmer accidentally ran over Stephanie, who, unbeknownst to him, had climbed out of the trailer and wandered through the gate and into the red shed lot. Stephanie sustained severe, permanent injuries as a result.

Stephanie and her parents commenced this action against: (1) Dimmer; (2) his homeowner's insurer, General Casualty; (3) the partnership insurer, American Family; and (4) Saukville Plumbing and its liability insurer, General Casualty. The Groteleuschens also sued Cera-Mite Corporation as a subrogated payor of health insurance benefits.

American Family brought a motion for summary judgment, claiming that Dimmer was not acting on behalf of the partnership and thus was not an insured person within the meaning of its policy. ³ Saukville Plumbing and its insurer, General Casualty, also brought a motion for summary judgment, contending that Dimmer was not acting within the scope of his employment with Saukville Plumbing at the time of the accident. The Grotelueschens countered with their own motion for partial summary judgment on the questions of coverage under the American Family and General Casualty policies.

Following a hearing on these motions, the trial court issued a written decision declaring that Dimmer was not acting within the scope of his employment with Saukville Plumbing at the time of the accident. Thus, the court dismissed the Grotelueschens' complaint against Saukville Plumbing and its insurer, General Casualty. As to American Family, however, the court ruled that Dimmer's actions were covered under the policy's "Comprehensive General Liability" provisions and, alternatively, that Dimmer was acting on behalf of the partnership at the time of the accident. Therefore, the court granted the Grotelueschens' motion for partial summary judgment on the coverage issues.

Following this ruling, the parties stipulated to the Grotelueschens' damages. Based on this stipulation, the trial court entered judgment against American Family in the amount of $570,000, together with Two issues are presented for review: (1) whether the accident is covered under the "Comprehensive General Liability Insurance" provisions of the partnership's "Businessowners [sic] Package Policy"; and (2) whether Dimmer was engaged in partnership business activity covered under the policy.

                interest from the [163 Wis.2d 674] date of entry of judgment. 4  This stipulation preserved American Family's right to take this appeal
                

Construction of an insurance policy presents a question of law. Hoeft v. United States Fire Ins. Co., 153 Wis.2d 135, 140, 450 N.W.2d 459, 461 (Ct.App.1989). We owe no deference to the trial court's interpretation of an insurance policy. Keane v. Auto-Owners Ins. Co., 159 Wis.2d 539, 547, 464 N.W.2d 830, 833 (1991).

The interpretation of an insurance contract is controlled by the principles of construction applied to contracts in general. Lambert v. Wrensch, 135 Wis.2d 105, 115, 399 N.W.2d 369, 373 (1987). The goal of construction is to ascertain the true intentions of the parties to the insurance contract. Wood v. American Family Mut. Ins. Co., 148 Wis.2d 639, 652, 436 N.W.2d 594, 599 (1989). And, in the case of an insurance contract, the words are to be construed in accordance with the principle that the test is not what the insurer intended the words to mean but what a reasonable person in the position of an insured would have understood the words to mean. Id. When the terms of a policy are plain and unambiguous, we will construe it as it stands. Ford Motor Co. v. Lyons, 137 Wis.2d 397, 460, 405 N.W.2d 354, 379 (Ct.A...