Iaquinta v. Allstate Ins. Co.

• Decision Date: 07 December 1993
• Docket Number: No. 92-1698,92-1698
• Citation: 510 N.W.2d 715,180 Wis.2d 661
• Parties: Alice M. IAQUINTA, Plaintiff-Appellant, v. ALLSTATE INSURANCE COMPANY, a foreign insurer, Todd A. Rasmussen, Frank Monroe and Tracy Monroe, Defendants-Respondents, d Wisconsin Physicians Service, a Wisconsin health insurance corporation, The Travelers Indemnity Company, a foreign insurer, and Blue Cross & Blue Shield United of Wisconsin, Subrogated Parties-Defendants.
• Court: Wisconsin Court of Appeals

Page 715

510 N.W.2d 715

180 Wis.2d 661

Alice M. IAQUINTA, Plaintiff-Appellant, v. ALLSTATE INSURANCE COMPANY, a foreign insurer, Todd A Rasmussen, Frank Monroe and Tracy Monroe Defendants-Respondents, ^d Wisconsin Physicians Service, a Wisconsin health insurance corporation, The Travelers Indemnity Company, a foreign insurer, and Blue Cross & Blue Shield United of Wisconsin Subrogated Parties-Defendants.

No. 92-1698.

Court of Appeals of Wisconsin.

Submitted on Briefs May 5, 1993.

Opinion Released Dec. 7, 1993.

Opinion Filed Dec. 7, 1993.

Before SULLIVAN, FINE and SCHUDSON, JJ.

SULLIVAN, Judge.

Alice M. Iaquinta appeals from a judgment entered upon defendants' motion for declaratory judgment limiting her recovery to $25,000 under a liability policy issued by Allstate Insurance Company to Tracy Monroe covering an automobile owned by Tracy and her father Frank Monroe. ¹ The sole issue presented on appeal is whether the omnibus statute, sec. 632.32(3), Stats., ² requires Allstate to provide full and separate coverage to both a negligent entruster-owner of the vehicle and the negligent entrustee-driver despite clear language in the policy which limits coverage to $25,000 per person, and $50,000 per occurrence. ³ We conclude that it does.

The facts of this case are undisputed. Iaquinta sustained permanent injuries when the insured automobile, operated recklessly by Todd Rasmussen, who was intoxicated, struck Iaquinta's automobile. Tracy Monroe had allowed Rasmussen to drive her automobile, and was a passenger at the time of the accident. Upon cross-motions for declaratory judgment, the parties stipulated that the facts set forth in the complaint were true--that Rasmussen had negligently operated the automobile and that Monroe had negligently entrusted the automobile to Rasmussen. The parties informed the court:

The parties have reached a settlement of this matter, which would obviate the need for trial. The only issue yet to be determined is whether the $25,000.00 per person limitation of liability contained in the Allstate policy ... limits recovery when there are two separate and distinct acts of negligence (negligence in entrusting the vehicle and negligence in its operation). The parties have stipulated that if this court finds that Allstate's responsibility in this matter is only that of $25,000.00, the plaintiff will accept that amount in settlement of her claim. The parties have further stipulated that if this court determines that Allstate's total liability is $50,000.00, based upon the two separate acts of negligence providing two separate limits of liability, that the plaintiff will accept $40,000.00 in compromise of her claim.

The trial court determined that the clear language of the policy limited Allstate's liability in the matter to $25,000. The trial court was not persuaded by Iaquinta's argument that Wisconsin's omnibus statute, sec. 632.32(3)(a), Stats., required Allstate to provide $25,000 in coverage to both Rasmussen and Monroe. On appeal, Iaquinta argues that the trial court's application of the omnibus statute to the facts of this case was erroneous and contrary to this court's holding in Miller v. Amundson, 117 Wis.2d 425, 345 N.W.2d 494 (Ct.App.1984).

The application of the omnibus statute, sec. 632.32(3)(a), Stats., to this undisputed set of facts is a question of law that we review independently of the trial court's conclusion. See id. at 429, 345 N.W.2d at 496. We agree that our rationale in Miller is dispositive of the issue raised in this case. Thus, we conclude that the trial court erred in limiting Allstate's liability to $25,000.

In Miller, this court held that, despite the clear language of the automobile liability insurance contract limiting coverage to $100,000 per occurrence, the omnibus statute required that full policy coverage be afforded to two tortfeasors, which raised the insurer's liability to $200,000. ⁴ Id. at 428-31, 345 N.W.2d at 496- 97. Miller involved a child who had fallen out of the back of a pickup truck driven by his grandmother, and in which his mother, the named insured, was a passenger. Id. at 426-27, 345 N.W.2d at 495. Both the grandmother and the mother were found causally negligent--the grandmother for her negligence in allowing the child to ride in the bed of the truck and for her negligence in securing the truck's load, and the mother for her negligent supervision of the child. Id. at 427, 345 N.W.2d at 495-96.

We have recounted the holding of Miller in subsequent cases and explained that separate coverage must be provided only in cases where both the named insured and the additional insured are actively negligent. See Landsinger v. American Family Mut. Ins. Co., 142 Wis.2d 138, 142-43, 417 N.W.2d 899, 900-01 (Ct.App.1987); Mills v. Wisconsin Mut. Ins. Co., 145 Wis.2d 472, 478-79, 427 N.W.2d 397, 400 (Ct.App.1988). Thus, where the negligence of the additional insured is merely imputed to the named insured, or where the named insured is vicariously liable, the holding of Miller is inapplicable and the policy limits expressed in the policy are unaffected by the omnibus statute. See Landsinger, 142 Wis.2d at 142-43, 417 N.W.2d at 900-01 (liability of employer for act of employee); ______ Mills, 145 Wis.2d at 478-79, 427 N.W.2d at 400 (negligence of child imputed to parent under sponsorship statute, sec. 343.15, Stats.

Iaquinta argues that our holding in Miller is dispositive of the issue in this case because both Rasmussen and Monroe were actively negligent. She relies on Bankert v. Threshermen's Mut. Ins. Co., 110 Wis.2d 469, 476, 329 N.W.2d 150, 153 (1983), where the Wisconsin Supreme Court stated: "Analysis of Wisconsin authority and the rule of the Restatement illustrates that the negligence of the entruster is a separate act of negligence." She argues that Bankert establishes that the negligent entruster is a separate actor whose negligence is discrete from that of other tortfeasors.

In response, Allstate argues that although the Bankert court recognized that the entruster's negligence is a separate act of negligence, it went on to explain that such "negligence is nonactionable in the absence of a wrongful or negligent act of the ... entrustee." Id. at 478, 329 N.W.2d at 154. The court further stated: "Negligent entrustment is part of the tort of negligent use and operation of the entrusted automobile." Id. at 476-77, 329 N.W.2d at 153. Allstate argues that Bankert's discussion of negligent entrustment should lead this court to the conclusion that negligent entrustment is not the "active negligence" necessary to invoke the rule set forth in Miller. Rather, Allstate argues, the liability of the negligent entrustee is more akin to the imputed negligence in Mills, 145 Wis.2d at 478-79, 427 N.W.2d at 400, and Landsinger, 142 Wis.2d at 142-43, 417 N.W.2d at 900-01.

Bankert involved a provision in an insurance agreement which specifically excluded coverage for "occurrences" involving "automobiles while away from the premises." Bankert, 110 Wis.2d at 478-79, 329 N.W.2d at 154. The claim in Bankert was that, although the automobile accident occurred off the premises, the act of negligent entrustment occurred on the premises, and thus, the exclusion was inapplicable, and the policy should cover the negligence of the entruster. The court disagreed. Id. at 479-80, 329 N.W.2d at 154-55. It began its analysis by exploring the concept of negligent...