Rocker v. Usaa Casualty Ins. Co.

• Decision Date: 30 March 2006
• Docket Number: No. 2004AP356.,2004AP356.
• Citation: 711 N.W.2d 634,2006 WI 26
• Parties: Glen H. ROCKER and Theresa Rocker, Plaintiffs-Appellants, v. USAA CASUALTY INSURANCE COMPANY, General Casualty Company of Wisconsin and Cornell Cousins, Defendants-Respondents.
• Court: Wisconsin Supreme Court

711 N.W.2d 634

2006 WI 26

Glen H. ROCKER and Theresa Rocker, Plaintiffs-Appellants, v. USAA CASUALTY INSURANCE COMPANY, General Casualty Company of Wisconsin and Cornell Cousins, Defendants-Respondents.

No. 2004AP356.

Supreme Court of Wisconsin.

Argued November 16, 2005.

Decided March 30, 2006.

COPYRIGHT MATERIAL OMITTED

For the plaintiffs-appellants there were briefs by Virginia M. Antoine, Timothy S. Trecek, and Habush Habush & Rottier S.C., Milwaukee, and oral argument by Timothy S. Trecek.

For the defendant-respondent USAA Casualty Insurance Company, there was a brief by Frederick J. Smith and Peterson, Johnson & Murray, S.C., Milwaukee, and oral argument by Frederick J. Smith.

For the defendant-respondent General Casualty Company of Wisconsin, there was a brief by Jacqueline E. Frakes and Eiche & Frakes, S.C., Milwaukee, and oral argument by Jacqueline E. Frakes.

ON CERTIFICATION FROM THE COURT OF APPEALS

¶ 1 JON P. WILCOX, J

This case is before the court on certification from the court of appeals, pursuant to Wis. Stat. § 809.61 (2003-04).¹ The appellants, Glen H. Rocker and Theresa Rocker (the Rockers) appealed an order of the Circuit Court for Milwaukee County, Clare L. Fiorenza, Judge, wherein the court dismissed all claims and causes of action with prejudice against defendant USAA Casualty Insurance Company (USAA) and dismissed defendant General Casualty Company of Wisconsin (General Casualty).

¶ 2 Glen Rocker (Rocker) was injured while working at an Octopus Car Wash (Octopus)² when a coemployee, Cornell Cousins (Cousins), accidentally drove a customer's motor vehicle into him. General Casualty insured Octopus, while USAA insured the customer, Andrew Paretti (Paretti). The Rockers brought suit against General Casualty, USAA, and Cousins. General Casualty filed a motion for declaratory and summary judgment³ arguing that its comprehensive insurance policy⁴ did not cover Rocker's injuries. After General Casualty's motion was granted and the Rockers' claims against General Casualty were dismissed with prejudice, USAA brought its own motion for declaratory judgment, requesting that the circuit court declare that USAA's maximum amount of coverage with respect to Cousins was the $25,000 minimum amount required under the Wisconsin financial responsibility law. The circuit court also granted USAA's motion, upon payment of its $25,000 policy limit to the court. After the court issued its final order on December 16, 2003, the Rockers appealed.

¶ 3 The court of appeals certified the following questions: (1) Does a full-service car wash fall within the definition of a "motor vehicle handler" found in Wis. Stat. § 632.32(2)(b); (2) Does the holding in Heritage Mutual Insurance Co. v. Wilber, 2001 WI App 247, 248 Wis.2d 111, 635 N.W.2d 631—that a commercial general liability policy providing an endorsement for non-owned automobile liability falls within Wis. Stat. § 632.32(1)'s scope provision-retain its vitality, since § 632.32 has been amended, and significantly altered, and now requires, inter alia, uninsured motorist coverage, medical payments and coverage, and prohibits exclusion of coverages for relatives of the insured?; (3) Was Gorzalski v. Frankenmuth Mutual Insurance Co., 145 Wis.2d 794, 429 N.W.2d 537 (Ct.App.1988), decided correctly when it failed to enforce the requirement of coverage for a motor vehicle handler as mandated by Wis. Stat. § 632.32(6)(a)?

¶ 4 We conclude the following: (1) A full-service car wash is a motor vehicle handler under § 632.32(2)(b) because it is a "service station"; (2) The holding of Heritage Mutual retains its validity, and the requirements of § 632.32(6)(a) apply to commercial general liability policies and commercial umbrella policies that provide automobile liability coverage; (3) Gorzalski was incorrectly decided, and we overrule its holding as it pertains to coemployee exclusions.

¶ 5 As such, the final order issued by the circuit court on December 16, 2003, is reversed and the cause is remanded for further proceedings consistent with this opinion.

I

¶ 6 On February 3, 1999, Paretti drove his 1999 Mercury Marquis to an Octopus located in Milwaukee. Paretti had been a customer for many years, and per the standard procedure, he proceeded to an overhead door area and waited for an attendant. Paretti ordered a standard wash, left the car running and in park, and went inside an enclosed area to pay the bill and receive a claim ticket. An employee then drove the car onto an automatic conveyor for washing. At the end of the conveyor, Cousins got into the car to drive it off the conveyor and into the drying area. While driving the vehicle off the conveyor, Cousins allegedly stepped too hard on the accelerator, causing the vehicle to lunge forward, hit the wall of the car wash and strike Rocker, his coworker, who was standing in the drying area. Rocker was seriously injured by the accident.

¶ 7 Along with his wife, Rocker filed a lawsuit against General Casualty,⁵ USAA and Cousins on January 31, 2002.⁶ General Casualty filed a motion for declaratory and summary judgment on May 15, 2002, on the grounds that the comprehensive policy it issued to Octopus did not provide liability coverage to Cousins for the injuries sustained by Rocker as a result of the alleged negligent acts of Cousins.

¶ 8 General Casualty had issued a comprehensive insurance policy to Octopus prior to the accident. This policy included commercial general liability coverage with a limit of $500,000 and commercial umbrella coverage with a limit of $2,000,000. The commercial general liability coverage provisions of the policy read in pertinent part as follows:

SECTION I — COVERAGES

COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE LIABILITY

1. Insuring Agreements

a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies. . . .

2. Exclusions

This insurance does not apply to:

. . . .

e. Employer's Liability

"Bodily injury" to:

(1) An "employee" of the insured arising out of and in the course of:

(a) Employment by the insured; or

(b) Performing duties related to the conduct of the insured's business . . . .

g. Aircraft, Auto or Watercraft

"Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading."

This exclusion does not apply to:

. . . .

(3) Parking an "auto" on, or on the ways next to, premises you own or rent, provided the "auto" is not owned by or rented or loaned to you or the insured[.]

SECTION II — WHO IS AN INSURED

. . . .

2. Each of the following is also an insured:

a. Your "employees" . . . but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business. However, none of these "employees" is an insured for:

(1) "Bodily injury" or "personal injury":

(a) To you . . . or to a co-"employee" while that co-"employee" is either in the course of his or her employment or performing duties related to the conduct of your business . . . .

¶ 9 Following the main provisions of the commercial general liability coverage, the policy contains an endorsement entitled: "OPERATION OF CUSTOMERS AUTOS ON PARTICULAR PREMISES" which provides as follows:

A. Exclusion g. of Paragraph 2., Exclusions of Coverage A. — Bodily Injury and Property Damage Liability (Section I — Coverages) does not apply to any "customer's auto" while on or next to those premises you own, rent or control that are used for any of the following businesses:

1. Auto Repair or Service Shops;

2. Car Washes;

3. Gasoline Stations;

4. Tire Dealers;

5. Automobile Quick Lubrication Services.

¶ 10 General Casualty also issued commercial umbrella coverage to Octopus as part of its comprehensive insurance policy. This portion of the policy provides bodily injury coverage for an "insured" defined in the policy as:

Your "employees" . . . but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business. However, none of these "employees" is an insured for:

(1) "Bodily injury" or "personal injury":

(a) To you . . . or to a co-"employee" while that co-"employee" is either in the course of his or her employment or performing duties related to the conduct of your business[.]

¶ 11 The commercial umbrella coverage also contains an automobile liability endorsement which modifies the coverage as follows:

Except to the extent coverage is available to you or the insured in the "underlying insurance," this insurance shall not apply to "bodily injury," "property damage," "personal injury" or "advertising injury" arising out of the ownership, maintenance, use or entrustment to others of any "auto" owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading."

¶ 12 After briefing and a hearing held before Judge Thomas P. Donegan, General Casualty's declaratory and summary judgment motion was granted on July 24, 2002, and the Rockers' claims against General Casualty were dismissed with prejudice.⁷ The circuit court concluded that General Casualty's policy was unambiguous and excludes from the definition of insured an employee who injures another employee during the course of their employment. Furthermore, the court recognized the Gorzalski decision, 145 Wis.2d 794, 429 N.W.2d 537, as controlling precedent.

¶ 13 The Rockers, Cousins, and USAA each sought appellate review. However, because General Casualty remained in the case as worker's compensation insurer, the appeals were not considered to be of right, and the court of appeals denied appellate review September 16, 2002. The Rockers also sought review in this court, but we denied the petition.

¶ 14 For its...