Pender v. Artisan & Truckers Cas. Co.
| Decision Date | 06 December 2022 |
| Docket Number | 2021AP838 |
| Parties | Dorothy A. Pender, Plaintiff-Appellant, v. Artisan and Truckers Casualty Company, LJ Auto Repair and Services, LLC, Justin L. Morgan, John Earl Sams, Jr., ABC Insurance Co. and DEF Insurance Co., Defendants-Respondents, Alex Azar, Subrogated-Plaintiff-Respondent. |
| Court | Wisconsin Court of Appeals |
This opinion will not be published. See WIS. STAT. RULE 809.23(1)(b)5.
APPEAL from a judgment of the circuit court for Milwaukee County Cir. Ct. No. 2020CV989 LINDSEY CANONIE GRADY, Judge.
Before Donald, P.J., Dugan and White, JJ.
Per curiam opinions may not be cited in any court of this state as precedent or authority, except for the limited purposes specified in Wis.Stat. Rule 809.23(3).
¶1 Dorothy A. Pender appeals the circuit court order granting summary judgment in favor of Artisan and Truckers Casualty Company (Artisan). Pender argues that Artisan failed to comply with Wisconsin's Financial Responsibility law for motor carriers and the Department of Transportation (DOT) administrative code regarding the cancellation of the insurance policy Artisan issued to LJ Auto Repair and Services, LLC (LJ Auto Repair); therefore, Artisan was liable when LJ Auto Repair's tow truck injured Pender in an accident. Artisan contends that the insurance policy it issued to LJ Auto Repair was canceled; therefore, no operative insurance contract existed at the time of the accident, which negated its liability. Pender also argues that Artisan failed to show that its process of notification to DOT about the cancellation was sufficient as a matter of law. We conclude that Artisan has not made a prima facie case for summary judgment. Thus, we reverse and remand to the circuit court for further proceedings.
¶2 This case arises out of an accident on November 30, 2018, in which Justin Morgan, driving an LJ Auto Repair tow truck struck Pender as she walked in a crosswalk. In February 2020 Pender filed a negligence action against Morgan; LJ Auto Repair; LJ Auto Repair's owner, John Earl Sams, Jr.; and their relevant insurance companies.[1] The complaint named Artisan as the insurance carrier for LJ Auto Repair.
¶3 Because the facts of this case turn on specific statutory and administrative provisions of law, we first recite the law at issue, namely WIS. STAT. § 194.41 (2019-20)[2] and WIS. ADMIN. CODE §§ TRANS 176.02 and 176.04 (Mar. 2012).[3] WISCONSIN STAT. ch. 194 governs motor vehicle transportation, which includes motor carriers for hire and what we might commonly consider commercial vehicle transport.[4] Liability for damages to persons or property by motor carriers is governed by § 194.41, also known as the Financial Responsibility law. The operation of the Financial Responsibility law can require a motor carrier insurer to cover a loss not specifically assumed by the insurer, an exception to the general rule.[5] Rural Mut. Ins. Co. v. Peterson, 134 Wis.2d 165, 173, 395 N.W.2d 776 (1986).
¶4 Under the Financial Responsibility law, DOT may not issue a permit to a motor carrier unless it has "on file with the department and in effect an approved certificate for a policy of insurance or other written contract" complying with DOT regulations by an authorized insurance carrier. WIS. STAT. § 194.41(1). The insurance contract is subject to DOT approval and the contract "shall provide that the insurer shall be directly liable for" damages or injuries that "may be recovered against the owner or operator of any such motor vehicles by reason of the negligent operation thereof in such amount as the department may require." Id.; see also Rural Mut. Ins. Co., 134 Wis.2d at 171.
¶5 Also under the Financial Responsibility law, a motor carrier insurance contract subject to WIS. STAT. § 194.41 may not be "terminated at any time prior to its expiration under the terms thereof, nor canceled for any reason whatever, unless there has been filed with [DOT] by the insurer a notice thereof at least [thirty] days prior to the date of termination or cancellation." Sec. 194.41(2). The statute sets forth that DOT must adopt rules for the administration and enforcement of this section. Sec. 194.41(4).
¶6 DOT's enactment of the required rules and regulations are provided in WIS. ADMIN. CODE TRANS ch. 176. "The purpose of this chapter is to prescribe the requirements of liability insurance policies and surety bonds for persons subject to the provisions" of WIS. STAT. § 194.41. Sec. TRANS 176.01(1). At issue are three administrative code procedures regulating insurance policies for motor carriers: Form E, Form F, and Form K. First, Form E is the Uniform Motor Carrier Bodily Injury and Property Damage Liability Certificate of Insurance, in which the insurance carrier states it has issued a policy to a named insurer with the required liability endorsement. Sec. TRANS 176.02(1)(a). Second, Form F is the Uniform Bodily Injury and Property Damage Liability Insurance Endorsement, which must be attached to the certificate of insurance. Sec. TRANS 176.02(1)(b). Finally, Form K is the Uniform Notice of Cancellation of Motor Carrier Insurance policies, which the insurer must provide to DOT at the time of cancellation. Sec. TRANS 176.04(1). The notice of cancellation "is not effective until after [thirty] days from the date it is received by" DOT. Sec. TRANS 176.04(3).
¶7 With that law in mind, we return to the procedural events in this case. In response to Pender's negligence action, Artisan filed an answer and counterclaim seeking declaratory relief in March 2020. Artisan acknowledged that it issued a policy to LJ Auto Repair on June 19, 2018, but alleged that the policy was properly canceled for failure to make premium payments.[6] In May 2020, Artisan filed a motion for declaratory and summary judgments. First, Artisan asked the court to declare that the LJ Auto Repair's policy was cancelled before the accident and that there was no coverage or duty to defend arising out of the policy. Second, Artisan asked the court to dismiss Pender's direct claim against it because there was no approved underlying insurance coverage.
¶8 In support of its motion for summary and declaratory judgments, Artisan submitted two affidavits relevant to the facts at issue. First, an Artisan representative attested that on June 19, 2018, Artisan issued an insurance policy to LJ Auto Repair with a policy period of June 19, 2018 through June 19, 2019. LJ Auto Repair failed to make payments in July and August 2018, and Artisan mailed a cancellation notice informing LJ Auto Repair that its insurance policy would be cancelled effective September 4, 2018.[7]
¶9 In the second affidavit, an Artisan process auditor described Artisan's compliance with DOT administrative regulations with regard to the insurance contract with LJ Auto Repair. Artisan submitted the first certificate of insurance, also known as Form E, to DOT on June 19, 2018; however, DOT rejected the form for having an incorrect name. On June 20, 2018, Artisan cancelled the first Form E and submitted a second Form E with updated name information. The second Form E was also rejected by DOT for an incorrect name. The first Form E's cancellation was effective July 25, 2018. The second Form E was cancelled on September 11, 2018, with an effective date of October 11, 2018. The process auditor also stated that Artisan cancelled LJ Auto Repair's insurance contract in compliance with the DOT Carriers and Trucking System (CaTS) manual by cancelling both rejected Form E documents, in accordance with the DOT-provided training manual for insurance underwriters. The affidavit included a screenshot from a DOT system that showed the Form E submissions and cancellations.
¶10 The factual record with regard to the endorsement attachment, also known as Form F, and the cancellation document, also known as Form K, is less developed. During discovery, Artisan submitted a copy of LJ Auto Repair's insurance policy, as well as the Form F attachment to that contract. The Form F endorsement stated that Artisan complied with state motor carrier laws, referencing: (1) proof of financial responsibility; (2) the filed certificate of insurance (i.e., Form E) to DOT; and (3) notice that cancellation requires notice to DOT. Artisan affirmed in its answers to interrogatories and requests for production that it did not submit a Form K to DOT related to the cancellation of LJ Auto Repair's insurance contract, stating that there was "no certificate for a policy of insurance approved by the WI DOT to cancel."
¶11 After a hearing on April 7, 2021, the circuit court declared that there was no liability coverage under the insurance policy or Financial Responsibility law and that Artisan had no duty to defend any party. The circuit court agreed with Artisan's arguments, finding that while Artisan did not submit a Form K to notify DOT that it was cancelling LJ Auto Repair's insurance policy, it made a "good faith effort" to comply with DOT procedure and the administrative code when it attempted multiple Form E submissions and then cancelled them. The court stated that when Artisan wanted to cancel the policy for non-payment, "the cancellation happened, it happened both, it happened twice." The court stated that "the process by which to notice and to give some administrative control to [DOT] was filed." It then concluded the disputed facts surrounding cancellation were not material because the dispute was only whether it was "a 'K' or was it a cancellation with the word 'cancellation' that was received" by DOT. It granted summary and declaratory judgment in favor of Artisan and dismissed Pender's complaint against Artisan.
¶12 Pender now appeals.
¶13 Pender argues that Artisan was not...
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