Maas by Grant v. Ziegler, CV-2324

Decision Date08 December 1992
Docket NumberCV-2324,CV-3107,CV-5511,No. 90-0168,90-0168
Citation492 N.W.2d 621,172 Wis.2d 70
Parties(88-) Janet Kay MAAS, by her guardian ad litem, Richard R. GRANT and Chester Maas, Plaintiffs-Respondents, Sentry Insurance, a mutual company, Subrogated Plaintiff, v. Peter J. ZIEGLER, Robert A. Bong, d/b/a Robert A. Bong Excavating, General Casualty Company of Wisconsin, Defendants, Lorene A. Gray and Sentry Insurance, a mutual company, Defendants-Appellants-Petitioners. (88-) Gerald A. TAYLOR, Plaintiff-Respondent, Joy E. Taylor, Jason C. Taylor and Gerald Taylor, as Personal Representative of the Estate of Joan M. Taylor, Plaintiffs, Sentry Insurance, a mutual company, Subrogated Plaintiff, v. Peter J. ZIEGLER, Robert A. Bong, d/b/a Robert A. Bong Excavating, General Casualty Company of Wisconsin, Defendants, Lorene A. Gray and Sentry Insurance, a mutual company, Defendants-Appellants-Petitioners. (88-) Carol COX, Plaintiff-Respondent, Alan Cox, Plaintiff, Sentry Insurance, a mutual company, Subrogated Plaintiff, v. Peter J. ZIEGLER, Robert A. Bong, d/b/a Robert A. Bong Excavating, General Casualty Company of Wisconsin, Defendants, Lorene A. Gray and Sentry Insurance, a mutual company, Defendants-Appellants-Petitioners.
CourtWisconsin Supreme Court

For the defendants-appellants-petitioners there were briefs by Robert F. Johnson Philip C. Reid and Cook & Franke, S.C., Milwaukee.

For the plaintiffs-respondents, Chester Maas, there was a brief by Richard R. Grant and Consigny, Andrews, Hemming & Grant, S.C., Janesville.

For the plaintiffs-respondents, Gerald A. Taylor, there was a brief by Kent I. Carnell and Lawton & Cates, S.C., Madison.

WILCOX, Justice.

This case is before the court on petition for review pursuant to sec. (Rule) 809.62, Stats. Petitioners, Lorene A. Gray and Sentry Insurance (hereinafter Sentry), seek review of an unpublished court of appeals decision affirming circuit court Judge Susan Steingass's denial of their motion for summary judgment. Sentry argues that the court of appeals and trial court erred in ruling that an endorsement which removed a fellow employee exclusion from the Sentry insurance policy waived the exclusive remedy provision of the Worker's Compensation Act, sec. 102.03(2), Stats. 1 Further, Sentry asserts that the endorsement did not apply in this case because its insured did not own the car involved in the accident.

There are two issues before this court. The first issue is whether the endorsement which removed a fellow employee exclusion from Sentry's liability policy waived the exclusive remedy provisions of the Worker's Compensation Act, sec. 102.03(2), Stats. We conclude that Sentry waived to the extent of its policy limits the exclusive remedy provisions of sec. 102.03(2). The second issue is whether the named insured, Maintenance Equipment, Inc. (MEI) owned the automobile involved in the accident within the meaning of the insurance policy. We conclude that MEI owned the automobile for purposes of the Sentry policy. We affirm the court of appeals.

The facts are not disputed. On November 12, 1985, Lorene Gray was driving a 1982 Ford Grenada with the lettering "The Maids" on the vehicle. Joan Taylor, Janet Maas, and Carol Cox were passengers in the car. All four women worked as home cleaners for The Maids of Madison, a division of Maintenance Equipment, Inc. The car was traveling west on Old Sauk Road, and as it approached the intersection with the Beltline, the car went through a stop sign and collided with a truck driven by Peter Ziegler. Joan Taylor was killed as a result of the accident. Janet Maas and Carol Cox were seriously injured. The four women were on their way to a job for their employer at the time of the accident. The automobile Gray was driving was leased by MEI from Van Boxtel Leasing, Inc.

Sentry provided worker's compensation coverage to MEI. Sentry also provided MEI with comprehensive general liability coverage. The coverage clause of Sentry's liability policy provided:

PART IV--LIABILITY INSURANCE

A. WE WILL PAY:

1. We will pay all sums the insured legally must pay as damages because of bodily injury or property damage to which this insurance applies, caused by an accident and resulting from the ownership, maintenance or use of a covered auto.

The policy contained the following fellow employee exclusion:

C. WE WILL NOT COVER--EXCLUSIONS: This insurance does not apply to:

....

4. Bodily injury to any fellow employee of the insured arising out of and in the course of his or her employment.

Sentry's policy included an endorsement titled "CHANGES IN POLICY-WISCONSIN" which stated:

A. CHANGES IN LIABILITY INSURANCE

2. The exclusion relating to bodily injury to fellow employees does not apply if the bodily injury results from the use of a covered auto you own.

On February 3, 1989, Sentry moved for summary judgment on the basis that the exclusive remedy defense of sec. 102.03(2), Stats., was not waived by the endorsement because MEI did not own the vehicle involved in the accident. The trial court denied the motion for summary judgment ruling that MEI should be treated as the owner of the vehicle within the language of the Sentry policy. On August 3, 1989, Sentry filed a second motion for summary judgment. Sentry argued that Gray was not legally liable under sec. 102.03(2); therefore, there was no liability for Sentry to cover. The trial court again denied the motion for summary judgment, ruling that Sentry waived the exclusive remedy defense through the endorsement that deleted the fellow employee exclusion.

The parties resolved the damage issues and entered into a stipulated judgment in favor of the respondents which was stayed pending the outcome of this appeal by Sentry. The circuit court entered the order for judgment on January 3, 1990. Sentry appealed.

The court of appeals affirmed. The court of appeals decision consisted of two concurring opinions and one dissent. Judge Eich's concurring opinion concluded that Sentry's policy waived the exclusive remedy defense and MEI owned the vehicle within the meaning of the policy. Judge Eich held that this case was controlled by Backhaus v. Krueger, 126 Wis.2d 178, 376 N.W.2d 377 (Ct.App.1985) and United States Fidelity and Guaranty Co. v. PBC Productions, Inc., 153 Wis.2d 638, 451 N.W.2d 778 (Ct.App.1989).

When reviewing a summary judgment decision, this court is required to apply the standards set forth in sec. 802.08, Stats., in the same manner as the trial court. Voss v. City of Middleton, 162 Wis.2d 737, 748, 470 N.W.2d 625 (1991); Kremers-Urban Co. v. American Employers Ins. Co., 119 Wis.2d 722, 733, 351 N.W.2d 156 (1984).

The issues in this case require this court to construe and interpret the Sentry insurance policy. The construction of an insurance policy is a matter of law for this court when no extrinsic evidence is offered bearing upon the terms of the policy. Kraemer Bros. Inc. v. United States Fire Ins. Co., 89 Wis.2d 555, 561-62, 278 N.W.2d 857 (1979). This court decides questions of law independently and without deference to the reasoning of the lower courts. Id., 89 Wis.2d at 562, 278 N.W.2d 857.

The interpretation of insurance contracts is controlled by the principles of construction of contracts in general. Stanhope v. Brown Co., 90 Wis.2d 823, 848, 280 N.W.2d 711 (1979). The objective in interpreting and construing a contract is to ascertain the true intention of the parties. Kraemer Bros., 89 Wis.2d at 562, 278 N.W.2d 857. A construction which gives reasonable meaning to every provision of a contract is preferable to one leaving part of the language useless or meaningless. Stanhope, 90 Wis.2d at 848-49, 280 N.W.2d 711.

No contract of insurance should be rewritten by construction to bind an insurer to a risk which it did not contemplate and for which it was not paid, unless the terms are ambiguous or obscure. Inter-Insurance Exchange v. Westchester Fire Ins. Co., 25 Wis.2d 100, 104, 130 N.W.2d 185 (1964). In the event of ambiguity or obscurity, the language of a policy should be construed against the insurance company that drafted the policy. Stanhope, 90 Wis.2d at 849, 280 N.W.2d 711; Gonzalez v. City of Franklin, 137 Wis.2d 109, 122, 403 N.W.2d 747 (1987). Words or phrases are ambiguous when they are reasonably or fairly susceptible to more than one construction. Stanhope, 90 Wis.2d at 849, 280 N.W.2d 711; Gonzalez, 137 Wis.2d at 122, 403 N.W.2d 747. Sentry's policy must be interpreted in the light of these principles. Stanhope, 90 Wis.2d at 849, 403 N.W.2d 747.

We will first consider whether Sentry waived the exclusive remedy provisions of the Worker's Compensation Act, sec. 102.03(2), Stats., by the endorsement that removed the fellow employee exclusion from its policy. Section 102.03(2) provides in relevant part: "[w]here such conditions exist the right to recovery of compensation under this chapter shall be the exclusive remedy against the employer, any other employe of the same employer and the worker's compensation insurance carrier."

Sentry argues that there is no coverage under its policy because sec. 102.03(2), Stats., exempts Gray from liability to co-employees. Sentry points to its insuring clause which states that "we will pay all sums the insured legally must pay as damages...." (emphasis added). Sentry contends that there is no sum Gray legally must pay as damages because of sec. 102.03(2).

Sentry's interpretation ignores the exclusion and endorsement. Sentry fails to give meaning to all provisions of its policy. In a case where the worker's compensation statutes apply, there is no need for the fellow employee exclusion because sec. 102.03(2), Stats., already provides statutory immunity. The exclusion and endorsement are meaningless unless interpreted to waive the co-employee immunity provided by sec. 102.03(2). In a case where worker's compensation is not available, the fellow employee exclusion is...

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