Hein v. State Farm Mut. Auto. Ins. Co.

• Decision Date: 01 February 1966
• Citation: 29 Wis.2d 702,139 N.W.2d 611
• Parties: Evelyn F. HEIN, Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., a foreign insurance company, et al., Respondents.
• Court: Wisconsin Supreme Court

Page 611

139 N.W.2d 611

29 Wis.2d 702

Evelyn F. HEIN, Appellant, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE CO., a foreign insurance company, et al., Respondents.

Supreme Court of Wisconsin.

Feb. 1, 1966.

Appellant Evelyn Hein was injured November 22, 1961, when an automobile in which she was seated was struck by an automobile driven by respondent James R. Coplen and registered in the name of respondent Victor Cegler. Appellant brought suit against respondents Coplen and Cegler and their respective insurance companies, Home Mutual Insurance Company and State Farm Mutual Automobile Insurance Company.

Appeal is taken from an order granting summary judgment dismissing the action as to respondent State Farm, and from an order denying her motion to vacate summary judgment and in the alternative to review the taxation of costs.

Arthur DeBardeleben, Park Falls, for appellant.

Donald G. Olson, Phillips, for State Farm Mut. Auto. Ins. Co.

WILKIE, Justice.

Two issues are raised by this appeal:

First, did the trial court err in granting the insurer's motion for summary judgment?

Second, if not, did the trial court err in allowing the taxation of attorney's fees in favor of the insurer?

Summary Judgment.

State Farm is not entitled to summary judgment unless the facts presented conclusively show that the plaintiff's action has no merit and cannot be maintained as to it. ¹ Summary judgment should not be granted where there are substantial issues of fact to be determined, when the evidence on a material issue is in conflict, or when there are permissible inferences from undisputed facts that would permit a different result. ²

The first of three reasons appellant advances as to why the trial court erred in granting summary judgment dismissing State Farm is that, contrary to the trial court's finding, the evidence does not establish that Cegler had transferred title of the automobile to Coplen prior to the accident.

The moving papers and pleadings disclose the following evidentiary matters which, due to failure of appellant to file counter affidavits, must be deemed uncontroverted. ³ On August 3, 1960, State Farm issued to Cegler a liability insurance policy covering a 1950 Chevrolet owned by him. The policy provided that '[n]o interest in this policy is assignable unless the company's consent is endorsed hereon.' Cegler assigned the title of the vehicle to Coplen on November 8, 1961, and Coplen was driving the car November 22d when the collision causing injury to appellant occurred. On his application to the motor vehicle department for transfer of ownership, which was subscribed two months later, January 24, 1962, Coplen represented that he had acquired the automobile on November 8, 1961, but that he had operated it on Wisconsin highways for the first time on January 24, 1962. Coplen filed an accident report with the motor vehicle department on April 9, 1962, and indicated on the SR-21 form that liability coverage was provided by State Farm. State Farm did not, within 30 days, deny that a policy was in effect, and later certified that the policy issued to Cegler was in force on November 22, 1961.

Appellant contends that these facts admit of conflicting inferences in two major respects. First, that since it can be reasonably inferred that Cegler supplied Coplen with the insurance coverage information inserted in the SR-21 portion of the accident report, their relationship must have been something other than seller and buyer. However, even assuming that Cegler did tell Coplen that the car was insured by State Farm, such a communication would hardly be determinative in proving any type of relationship between Cegler and Coplen.

Second, that respondent's failure to respond to the SR-21 form constitutes an admission of liability which in turn is tantamount to saying that no sale took place. But any action or inaction on the part of the alleged insurer can have no bearing whatsoever on the ownership question.

When selling a vehicle, the owner must insert the name of the purchaser on the certificate of title, endorse the certificate, ⁴ and deliver the certificate to the buyer. ⁵ After the vehicle is transferred to him, the new owner must apply for a new certificate of title by filling in the appropriate provisions of the old title certificate and sending it to the motor vehicle department. ⁶ Pointing out that the affidavits are silent as to (1) whether or not Cegler actually delivered the certificate of title and/or the vehicle to Coplen on November 8th, and (2) whether Coplen operated the car with Cegler's plates or with none at all, appellant argues that an inference arises that the parties merely agreed to sell the car in the future. However, it should be noted that the fact that Coplen filled out the certificate on November 8th demonstrates that he did have at least temporary possession of it on that date. Furthermore, what appellant overlooks is that according to the governing statutes, the certificate of title could not have been completed by both the buyer and the seller until after the sale had been ultimately consummated. Thus, any side agreements as to license plates or when the car should physically change hands become immaterial to the question of when title was actually transferred. Cegler's affidavit that he transferred 'title and ownership of the auto' to Coplen on November 8, 1961, and the declarations by Coplen and Cegler in the certificate that the sale was made on November 8th, lead inescapably to the conclusion that that was the date of the transfer. Nor do any possible violations of the law on the part of Coplen (in (1) driving either with Cegler's registration plates or with none at all, (2) representing that the car was not driven on the highway until January 24, 1962, and (3) not immediately applying for a title) indicate otherwise. This is because what Coplen did after acquiring the automobile can have no bearing on when he actually bought it.

The second reason advanced by the appellant as to why the trial court erred in granting State Farm's motion for summary judgment is that, even if the automobile was sold on November 8, 1961, respondent is estopped from raising a defense of non-coverage by its failure to respond to the SR-21 form naming it as insurer. On this point the case, as the trial court ruled, is controlled by Hain v. Biron. ⁷ In Hain a liability policy which had been issued to one Biron expired on February 22, 1962, and was not renewed. Biron was involved in an accident on April 13, 1963, and took out a second policy, effective June 1, 1963. He filed an SR-21 with the motor vehicle department stating that his liability was covered by insurance. The SR-21 was sent to the insurance company which did not return it to the motor vehicle commissioner with a denial that a policy had been in effect on April 13th until after the 30 day time limit had elapsed. ⁸ This court held that the failure to file did not amount to an admission of liability under sec. 344.15(4), Stats., ⁹ since this section only related to the ministerial function of the commissioner, and that the circumstances under which an insurance company is estopped from claiming no coverage are limited to those specifically mentioned in sec. 344.15(5), Stats. ¹⁰

Relying on Schneck v. Mutual Service Casualty Ins. Co., ¹¹ and an article by Walter M. Bjork in the Wisconsin Bar Bulletin, ¹² appellant urges that Hain be overruled; that, contrary to what was held in Hain, the failure to declare within 30 days that either the owner or operator of the vehicle, or both, was not covered by a policy operates, under sec. 344.15(4), to estop the insurance company from later raising this defense. In Schneck this court said:

'The plaintiffs further contend because the estoppel created by sec. 344.15(4), Stats., is one created as a matter of law and is a matter of evidence only, it differs from estoppel at common law or in equity and consequently the rules of pleadings do not apply. We do not agree. The estoppel created by this section removed only the element of reliance from equitable estoppel and did not make it merely a matter of evidence.' ¹³

But in Schneck the problem was whether the driver of the car was operating it with the insured's permission, a defense specified in subsec. (5). Subsec. (4) also provided that when this particular defense was involved, an affidavit of the owner to this effect must accompany the corrected SR-21. Thus, any estoppel created under subsec. (4) is concerned with permission, and Schneck is not authority for the proposition that an insurer is estopped from asserting that there was no policy in effect.

In a footnote to his article, Mr. Bjork says:

'attention is directed to Section 344.15(4) * * * which provides that the commissioner shall assume that an automobile liability policy was in effect and applied to both the owner and operator with respect to the accident unless the company notifies the commissioner otherwise within the 30 day period. The statute refers to item 4 on the back of the SR-21 form and it would appear that unless the company corrects the form by checking item 4 it will also be estopped in this fourth respect.' ¹⁴

However, this language was only inserted as a query to the opinion that:

'It is obvious from [sec. 344.15(5), Stats.] * * * that...