Luckett v. Cowser

• Decision Date: 04 June 1968
• Citation: 39 Wis.2d 224,159 N.W.2d 94
• Parties: Janice LUCKETT, a minor, by gdn. ad litem et al., Plaintiffs-Appellants, v. James COWSER et al., Defendants, great Lakes Mutual Ins. Co., a domestic corporation, Defendant-Respondent. Major GILBERT, Appellant, v. GREAT LAKES MUTUAL INSURANCE CO., Respondent, Harry Huntley et al., Defendants, Mutual Service Casualty ins. Co. et al., Impleaded Defendants.
• Court: Wisconsin Supreme Court

Page 94

159 N.W.2d 94

39 Wis.2d 224

Janice LUCKETT, a minor, by gdn. ad litem et al., Plaintiffs-Appellants, v. James COWSER et al., Defendants,

great Lakes Mutual Ins. Co., a domestic corporation,

Defendant-Respondent.

Major GILBERT, Appellant, v. GREAT LAKES MUTUAL INSURANCE CO., Respondent, Harry Huntley et al., Defendants, Mutual Service Casualty ins. Co. et al., Impleaded Defendants.

Supreme Court of Wisconsin.

June 4, 1968.

Warshafsky, Rotter & Tarnoff, Michael I. Tarnoff, Milwaukee, for Janice Luckett and others.

Marvin Resnick, Milwaukee, for Major Gilbert.

Frisch, Dudek, Banholzer & Slattery, Milwaukee, for defendant-respondent; Robert A. Slattery, Milwaukee, of counsel.

CONNOR T. HANSEN, Justice.

The question to be resolved is whether the insurance policy issued to Cowser by Great Lakes Mutual afforded coverage under the facts of this case. The particular policy provision to be considered reads as follows:

'IV Automobile Defined, Trailers, Two or More Automobiles, Including Automatic Insurance.

(a) Automobile. Except where stated to the contrary, the word 'automobile' means:

(4) Newly Acquired Automobile--an automobile, ownership of which is acquired by the named insured who is the owner of the described automobile, if the named insured notifies the company within thirty days following the date of its delivery to him, and if either it replaces an automobile described in this policy or the company insures all automobiles owned by the named insured at such delivery date; but the insurance with respect to the newly acquired automobile does not apply to any loss against which the named insured has other valid and collectible insurance. The named insured shall pay any additional premium required because of the application of the insurance to such newly acquired automobile.' (Emphasis added.)

The 1955 Buick was purchased after the policy was issued and no question is raised as to notice.

We are of the opinion that the trial court correctly determined that the 1955 Buick was not a 'replacement' vehicle within the terms of the 'newly acquired automobile' policy provisions.

The trial court found that:

'Replacement occurs when the old automobile is disposed of and a new vehicle of equivalent use is substituted for the old automobile. The clear language of the above-quoted provision of the policy contemplates a replacement in fact.'

The definition of 'replacement' as utilized within the framework of a 'newly acquired automobile' provision is one of first impression for this court. Hence a review of authorities is necessary. An analysis thereof reveals that whether one vehicle replaces another involves the consideration of several factors, such as: retention of, title to, and condition of replaced vehicle ¹ and the intent of the insured as to the use of the newly acquired vehicle. ² See 12 Couch Cyclopedia of Insurance Law (2d ed.) pp. 254--258, secs. 45:209--45:214; 7 Blashfield, Automobile Law and Practice (3d ed.) pp. 663-669, sec. 316.5.

In the instant case it is clear that the 1955 Buick was not intended by the defendant Cowser to be a replacement. He not only had the 1959 Buick repaired, as he intended, but used it for a short period of time thereafter.

The record clearly reflects that the 1955 Buick was obviously intended as a temporary means of transportation. However, the temporary substitute provision of the policy in question is not applicable to the circumstances of this case because the specific provision of the policy provides that it shall be applicable only to 'an auto not owned by the named insured.' In the case now before us, the 1955 Buick was owned by defendant Cowser. See Utilities Ins. Co. v. Wilson (1952), 207 Okl. 574, 251 P.2d 175.

The appellants contend, and we opine correctly so, that the 1955 Buick was insured under the alternative provision of the 'newly acquired automobile' clause (known as the automatic insurance clause) which has heretofore been set forth in full and reads in part as follows: * * * or the company insures all automobiles owned by the name insured at such delivery date; * * *'

The respondent insurer urges that the language of the automatic insurance clause applies to a situation in which the policy is one which provides fleet or blanket coverage, but the policy language under consideration does not in any manner so indicate.

'* * * The language of the policy is to be construed in accordance with the principle that 'the test is not what the insurer intended its words to mean that what a reasonable person in the position of the insured would have understood them to mean.' * * * ' Merchants Mut. Casualty Co. v. Lambert (1940), 90 N.H. 507, 11 A.2d 361, 127 A.L.R. 483.

On the record now before us we cannot conclude that either the insurer intended to sell Cowser a fleet policy or that Cowser intended to purchase a fleet policy. Both parties knew he had but one automobile at the time he purchased the policy.

There appears to be no previous case involving this precise question in this state; however, there is considerable authority wherein it has been determined that clauses identical or similar to the clause now under consideration automatically afforded coverage to a newly acquired automobile even though the insured previously owned only one automobile. Adams v. Bartel (N.D.1964), 129 N.W.2d 755; Dixie Auto Ins. Co. v. Goudy (1964), 238 Ark. 432, 382 S.W.2d 380; Horace Mann Mutual Casualty Company v. Bell (Ark.D.C.1955), 134 F.Supp. 307; Inland Mutual Insurance Company v. Stallings (4th Cir. 1959), 263 F.2d 852; Dunmire Motor Co. v. Oregon Mut. Fire Ins. Co. (1941), 166 Or. 690, 114 P.2d 1005; Carpenter v. Gasper (1962), 116 Ohio App. 45, 186 N.E.2d 481; 12 Couch Cyclopedia of Insurance Law, (2d ed.) p. 259, sec. 45:217; 7 Blashfield, Automobile Law and Practice (3d ed.) p. 662, sec. 316.4.

Such construction was initially and concisely explained in Dunmire Motor Co. v. Oregon Mut. Fire Ins. Co., supra, 114 P.2d p. 1008:

'It is our opinion that, taking the automatic coverage provision in its entirety, it was intended to apply to any other automobile acquired by the assured who owned one or more...