Lacount v. General Cas. Co.

Decision Date08 February 2006
Docket NumberNo. 2003AP3258.,2003AP3258.
Citation709 N.W.2d 418,2006 WI 14
PartiesDaniel J.R. LaCOUNT, by his General Guardian, Daniel LaCount, Plaintiff-Respondent, v. GENERAL CASUALTY COMPANY of Wisconsin, Defendant-Appellant, Joseph W. Langer and Courtney J. Langer, Defendants-Third-Party Plaintiffs, v. Erin E. Penza, by her Natural Guardians, Don and Janet Penza, Molly J. Smith, by her Natural Guardians, Marvin and Julie Smith, ABC Insurance Company, DEF Insurance Company, GHI Insurance Company and XYZ Insurance Company, Third-Party Defendants, Estate of James M. Wingfield, by its Personal Representative, Brenda K. Wingfield, Brenda K. Wingfield, Brett M. Wingfield, by his Natural Guardian, Brenda K. Wingfield, Abby L. Wingfield, by her Natural Guardian, Brenda K. Wingfield, Vanessa R. Van Laanen, by her Natural Guardians, Jody G. and Virginia Van Laanen, Third-Party Defendants-Respondents-Petitioners.
CourtWisconsin Supreme Court

For the third-party defendants-respondents-petitioners, there were briefs by R. George Burnett, Gregory B. Conway and Liebmann, Conway, Olejniczak & Jerry, S.C., Green Bay, and oral argument by R. George Burnett.

For the defendant-appellant there was a brief by James W. Mohr, Jr. and Mohr & Anderson, LLC, Hartford, and oral argument by James W. Mohr, Jr.

An amicus curiae brief was filed by Susan R. Tyndall and CMT Legal Group, Ltd., Waukesha, on behalf of the Civil Trial Counsel of Wisconsin.

¶ 1 SHIRLEY S. ABRAHAMSON, C.J

This is a review of an unpublished decision of the court of appeals1 reversing the judgment of the circuit court for Brown County, Mark A. Warpinski, Judge. We affirm the decision of the court of appeals.

¶ 2 The issue presented is whether paragraph (a) of Wis. Stat. § 632.32(3) (2003-04),2 known as the omnibus coverage statute, compels an insurance company (here General Casualty) to provide separate policy limits for both the named insured (a father who signed an application for his minor daughter's3 driver license, becoming her sponsor) and for the minor whose negligent operation of the motor vehicle caused her vehicle to collide with a van and injure several persons. The injured persons are the passenger in the minor's vehicle, the driver of the van (who was killed), and several passengers in the van. They are referred to herein collectively as the injured persons.

¶ 3 The father's liability as the sponsor for the minor driver's negligent operation of a motor vehicle is imposed by Wis. Stat. § 343.15(2)(b), providing that "any negligence. . . of a person under the age of 18 years when operating a motor vehicle upon the highways is imputed . . . to the adult sponsor who signed the application for such person's license. The . . . adult sponsor is jointly and severally liable with such operator for any damages caused by such negligent . . . misconduct."4

¶ 4 The injured persons and General Casualty agree (as does the court) that General Casualty must provide coverage for the liability of the father, the named insured who was the minor's sponsor, and for the liability of the negligent minor who operated the vehicle. The injured persons and General Casualty disagree about the limits of General Casualty's liability.5 They disagree whether General Casualty's total potential liability for both the named insured (as the sponsor of the minor's application for a driver license) and the minor driver amounts to $1 million ($500,000 limited liability for each), as the injured persons claim, or $500,000, as General Casualty claims.

¶ 5 The circuit court granted summary judgment in favor of the injured persons and against General Casualty, concluding that paragraph (a) of Wis. Stat. § 632.32(3) requires General Casualty to provide the named insured (the sponsor) and his minor daughter with a cumulative liability of $1 million, although the limit of liability stated in the policy was $500,000 for each accident.

¶ 6 The court of appeals reversed the judgment of the circuit court. Applying the analysis of this court's decision in Folkman v. Quamme, 2003 WI 116, 264 Wis.2d 617, 665 N.W.2d 857, interpreting paragraph (b) of Wis. Stat. § 632.32(3), the court of appeals held that paragraph (a) of Wis. Stat. § 632.32(3) (like paragraph (b)) does not prohibit General Casualty from applying the $500,000 policy limit as the limit on its total liability for both the named insured father and his minor daughter whose driver license he sponsored. The court of appeals concluded that under both paragraphs (a) and (b), "[w]hether considering the owner's coverage or the driver's coverage, they share a single limit of liability when the owner's liability is not based on a separate negligent act."6

¶ 7 We affirm the decision of the court of appeals. We hold that paragraph (a) of Wis. Stat. § 632.32(3) does not require an insurance policy to provide separate limits of liability to both a person permissively using the covered vehicle and the named insured who is liable by statute for imputed negligence (as a sponsor for a minor's driver license) for the minor's negligent operation of a vehicle.

¶ 8 Furthermore, we interpret paragraph (a) of Wis. Stat. § 632.32(3) similarly to paragraph (b) regarding the application of policy limits to multiple insureds whose liabilities are covered by the same insurance policy. The text of paragraph (a) of Wis. Stat. § 632.32(3) (and the statutory and legislative history of paragraph (a)) and the case law support the conclusion that neither paragraph (a) nor paragraph (b) of Wis. Stat. § 632.32(3) requires an insurance policy to provide separate limits of liability to both a person permissively using the covered vehicle and the named insured who is liable by statute for imputed negligence (as a sponsor for a minor's driver license) for the minor's negligent operation of a vehicle.

I

¶ 9 The following material facts are undisputed for purposes of this proceeding. On October 15, 1999, the minor was negligently driving a vehicle that collided with a van; the driver of the van was killed, passengers in the van were injured, and a passenger in the vehicle driven by the minor was injured.

¶ 10 The motor vehicle the minor was driving was insured under a policy in which the minor's father was the named insured. The minor was explicitly named in the policy as a member of the family and a permissive driver of the vehicle covered by the policy. The father was not in the vehicle at the time of the collision; his liability is based solely on the statute imposing joint and several liability on a sponsor of a minor's driver license for damage caused by the minor's negligent operation of a vehicle.

¶ 11 The insurance policy promises to pay bodily injury damages for which "any insured becomes legally responsible because of an auto accident." More than once the policy explicitly limits General Casualty's total liability for one occurrence under the policy to $500,000. The policy specifically states that this $500,000 limit is the most General Casualty will pay, regardless of the numbers of "insureds," claims made, or vehicles listed in the policy.7

¶ 12 The policy omits a provision stating that "[c]overage provided to the named insured applies in the same manner and under the same provisions to any person using any motor vehicle described in the policy ...," even though Wis. Stat. § 632.32(3) requires this provision.8

¶ 13 The passenger in the minor's vehicle, Daniel LaCount, filed suit against the father, the minor driver, and General Casualty, alleging that the minor's negligent operation of the vehicle caused his injuries.

¶ 14 The personal representative of the estate of the driver of the van and passengers in the van were impleaded. They filed a third-party complaint against the father and the minor driver.9 The circuit court consolidated the cases.

¶ 15 On October 31, 2001, the injured persons moved for declaratory judgment that the General Casualty policy covered both the father and the minor driver separately up to $500,000 each per accident. In support of this motion, the injured persons argued that paragraph (b) of Wis. Stat. § 632.32(3) required General Casualty to provide two policy limits. The circuit court denied this motion on November 26, 2001.

¶ 16 On April 2, 2003, the injured persons came before the circuit court again. Having lost on the basis of paragraph (b) of Wis. Stat. § 632.32(3), this time they argued that paragraph (a), rather than paragraph (b), required General Casualty to provide two policy limits.10 This time the circuit court agreed with the injured persons and on June 30, 2003, issued a decision requiring General Casualty to pay separate $500,000 limits for both the father (as sponsor) and the minor driver.

¶ 17 On July 16, 2003, this court held in Folkman v. Quamme, 2003 WI 116, 264 Wis.2d 617, 665 N.W.2d 857, that paragraph (b) of Wis. Stat. § 632.32(3) does not require separate liability policy limits if a party is liable because of imputed negligence. Based on the Folkman case, on July 30, 2003, General Casualty filed a motion in the circuit court for reconsideration. The circuit court denied the motion on October 20, 2003, stating that there is no indication that this court intended its Folkman decision to apply to paragraph (a) of § 632.32(3).

¶ 18 General Casualty moved for leave to appeal, and the court of appeals granted the motion. The court of appeals held that Folkman should be extended to paragraph (a) of Wis. Stat. § 632.32(3) and reversed the circuit court's summary judgment against General Casualty.

II

¶ 19 The issue presented is whether paragraph (a) of Wis. Stat. § 632.32(3), the omnibus coverage statute, compels an insurance company (here General Casualty) to provide separate policy limits for both the named insured (a father who signed an application for his minor daughter's driver license, becoming her sponsor) and for the minor whose negligent operation of the motor vehicle caused...

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