Sisson v. Hansen Storage Co.

• Decision Date: 24 June 2008
• Docket Number: No. 2007AP1426.,2007AP1426.
• Citation: 756 N.W.2d 667,2008 WI App 111
• Parties: David L. SISSON, Plaintiff, Risk Administration Services, Inc. d/b/a Dakota Truck Underwriters, Involuntary-Plaintiff, v. HANSEN STORAGE COMPANY, Defendant-Third-Party Plaintiff, Acuity, a Mutual Insurance Company, Defendant-Third-Party Plaintiff-Appellant, v. Harco National Insurance Company, Third-Party Defendant-Respondent.
• Court: Wisconsin Court of Appeals

756 N.W.2d 667

2008 WI App 111

David L. SISSON, Plaintiff, Risk Administration Services, Inc. d/b/a Dakota Truck Underwriters, Involuntary-Plaintiff, v. HANSEN STORAGE COMPANY, Defendant-Third-Party Plaintiff, Acuity, a Mutual Insurance Company, Defendant-Third-Party Plaintiff-Appellant, v. Harco National Insurance Company, Third-Party Defendant-Respondent.

No. 2007AP1426.

Court of Appeals of Wisconsin.

June 24, 2008.

On behalf of the third-party plaintiff-appellant, the cause was submitted on the briefs of Stuart R. Deardorff and Michelle D. Johnson of Simpson & Deardorff, S.C., Milwaukee. There was oral argument by Stuart R. Deardorff.

On behalf of the third-party defendant-respondent, the cause was submitted on the brief of Frederick J. Smith of Peterson, Johnson & Murray, S.C., Milwaukee. There was oral argument by Frederick J. Smith.

Before CURLEY, P.J., FINE and KESSLER, JJ.

¶ 1 FINE, J

Acuity, A Mutual Insurance Company, appeals the circuit court's grant of summary judgment to Harco National Insurance Company dismissing Acuity's third-party complaint against Harco. Harco is K & B Transportation, Inc.'s insurer; Acuity insures Hansen Storage Company. Acuity contends that Harco provided primary coverage in connection with an accident on the premises of Acuity's insured, Hansen Storage, and caused by a Hansen employee. We affirm.

I.

¶ 2 This appeal arises out of injuries suffered by David L. Sisson, a truck driver employed by K & B, when, during his delivery of a load of pallets to Hansen Storage in 2003, Hansen's employee, Glenn Maske, ran into Sisson with the forklift Maske was driving. As material, Sisson unsealed his trailer, opened the trailer's doors, and backed his trailer into the Hansen Storage loading dock so Maske could use his forklift to extract the cargo. After he had removed several of the pallets from Sisson's truck, Maske noticed that some of boxes on the pallets were not what Hansen Storage had ordered. Sisson walked to where Maske had placed the pallets he had already unloaded. Maske hit Sisson with Maske's forklift as Sisson was walking to the unloaded pallets. As noted, Acuity contends that Harco's policy provides primary coverage for Sisson's injuries.

II.

¶ 3 We review de novo a circuit court's grant of summary judgment. Green Spring Farms v. Kersten, 136 Wis.2d 304, 315-317, 401 N.W.2d 816, 820-821 (1987). We also interpret insurance contracts de novo. Rebernick v. Wausau Gen. Ins. Co., 2005 WI App 15, ¶ 5, 278 Wis.2d 461, 466, 692 N.W.2d 348, 351, aff'd, 2006 WI 27, 289 Wis.2d 324, 711 N.W.2d 621. We give to the language of insurance contracts its plain meaning as it would be understood by a reasonable insured. Kremers-Urban Co. v. American Employers Ins. Co., 119 Wis.2d 722, 735, 351 N.W.2d 156, 163 (1984). Contract language is ambiguous when it is "fairly susceptible to more than one construction." Ibid. Absent an ambiguity, we interpret all contracts as the language dictates. Kernz v. J.L. French Corp., 2003 WI App 140, ¶ 9, 266 Wis.2d 124, 134, 667 N.W.2d 751, 755. Additionally, as we will see, this appeal also implicates provisions of the Wisconsin statutes, and our interpretation and application of statutes is also de novo. State v. Turnpaugh, 2007 WI App 222, ¶ 2, 305 Wis.2d 722, 725, 741 N.W.2d 488, 490. Unless there is an ambiguity or constitutional infirmity, we apply statutes as they are written. State ex rel. Kalal v. Circuit Court for Dane County, 2004 WI 58, ¶ 44, 271 Wis.2d 633, 662, 681 N.W.2d 110, 123-124.

¶ 4 As we have seen, Acuity contends that Harco provides primary coverage for Sisson's injuries. Harco, however, points to two provisions in its policy that it argues exclude such coverage. First, the policy excludes coverage for: "`Bodily injury' to: a. An `employee' of the `insured' arising out of and in the course of: (1) Employment by the `insured'; or (2) Performing the duties related to the conduct of the `insured's' business." (Bolding in original.) On its face, this excludes coverage for "bodily injury" to Sisson, K & B's employee. Second, the Harco policy also provides that it "does not apply to" "`[b]odily injury' ... resulting from the movement of property by a mechanical device (other than a hand truck) unless the device is attached to the covered `auto'." The definition of "auto" specifically excludes "mobile equipment," which encompasses "forklifts." On its face, this too excludes coverage for "bodily injury" to Sisson resulting from Maske's allegedly negligent driving of the Hansen Storage forklift. Acuity asserts, however, that WIS. STAT. § 194.41(1) imposes coverage notwithstanding the exclusions.

¶ 5 As material here, WIS. STAT. § 194.41(1) requires that trucking companies operating in Wisconsin have insurance that:

provide[s] that the insurer shall be directly liable for and shall pay all damages for injuries to or for the death of persons or for injuries to or destruction of property that may be recovered against the owner or operator of any such motor vehicles by reason of the negligent operation thereof.¹

(Footnote added.) Although it appears that the term "negligent operation thereof" would not encompass Maske's operation of the Hansen Storage forklift, Wisconsin makes anyone loading or unloading an insured motor vehicle an "operator" of that vehicle under § 194.41(1). Bauer v. Century Sur. Co., 2006 WI App 113, ¶ 10, 293 Wis.2d 382, 388, 718 N.W.2d 163, 166 ("Wisconsin has expressly adopted the complete operation doctrine to determine which loading and unloading actions constitute an operation for insurance coverage purposes.").

¶ 6 Bauer recognized the broad scope of this concept:

"Under the so-called `complete operation' doctrine ... the `loading and unloading' clause covers the entire process involved in the movement of goods from the moment when they are given into the insured's possession until they are turned over at the place of destination to the party to whom delivery is to be made, and for all practical purposes, any distinction between `unloading' and `delivery,' and between `loading' and `preparatory actions,' is not considered."

Ibid. (ellipses and emphasis by Bauer; quoted source omitted). Bauer concerned a crane operator who was preparing to unload a turbine from the back of a flatbed truck and inadvertently hit overhead power lines injuring the truck's driver as a result of an electrical surge. Id., 2006 WI App 113, ¶ 3, 293 Wis.2d at 384, 718 N.W.2d at 164. The crane operator was deemed under WIS. STAT. § 194.41(1) to be the truck's "operator" and, therefore, the truck's insurer was liable to the truck's driver for the crane operator's negligence. Id., 2006 WI App 113, ¶¶ 13, 16, 293 Wis.2d at 389-390, 391, 718 N.W.2d at 167.

¶ 7 Bauer expressly relied on Mullenberg v. Kilgust Mechanical, Inc., 2000 WI 66, 235 Wis.2d 770, 612 N.W.2d 327, which, in response to a certified question posed by the United States Court of Appeals for the Seventh Circuit pursuant to WIS. STAT. § 821.01, held that the phrase "negligent operation" in WIS. STAT. § 194.41(1) "require[d] insurers to cover loading activities of third-parties." Mullenberg, 2000 WI 66, ¶ 1, 235 Wis.2d at 772, 612 N.W.2d at 328. Mullenberg held "that the word `operation' in WIS. STAT. § 194.41(1) includes loading and unloading and an individual permissively unloading the vehicle is covered by the motor carrier's policy," and that any contravening policy exclusions were "invalid." Id., 2000 WI 66, ¶ 3, 235 Wis.2d at 773, 612 N.W.2d at 328-329.

¶ 8 Here, under the undisputed facts, Maske was still in the process of unloading Sisson's truck when Maske struck Sisson. Thus, if WIS. STAT. § 194.41(1) applies, Harco's policy would cover Maske's liability to Sisson despite the exclusions in Harco's policy. Harco, however, contends that § 194.41(1) does not apply, pointing to the subsection's last sentence, which as material here, reads: "This subsection does not apply to a motor carrier that is registered by another state under a single-state ... system consistent with the standards under, respectively, 49 U.S.C. 14504." As of the date of Maske's accident with Sisson in 2003, 49 U.S.C. § 14504 authorized the establishment of a single-state motor-carrier registration system:

(c) Single State registration system.—

(1) In general.—The Secretary shall maintain standards for implementing a system under which—

(A) a motor carrier is required to register annually with only one State by providing evidence of its Federal registration under chapter 139;

(B) the State of registration shall fully comply with standards prescribed under this section; and

(C) such single State registration shall be deemed to satisfy the registration requirements of all other States.²

(Footnote added.)

¶ 9 In support of its contention that the last sentence of WIS. STAT. § 194.41(1) makes that subsection inapplicable, Harco asserts that on the date of the Maske/Sisson accident K & B was registered in Iowa under a single-state registration system. In an affidavit dated November 12, 2007, attached to Harco's respondent's brief on this appeal, Michael S. Ratkiewicz, who identifies himself as "the Executive Vice President with K & B Transportation, Inc.," avers that K & B "has been registered by Iowa under the Interstate Commerce Commission and Federal Motor Carrier Safety Administration's Single-State Registration System since at least the mid-1990s through the current year." (Parenthetical acronyms omitted.) In support of this averment, Ratkiewicz attached to his affidavit documents he asserts "were filed with the Iowa Department of Transportation Office of Motor Carrier Services" in connection with K & B's single-state registration "for the year 2003." Although this material was not presented to the circuit court, Harco asks, on our de novo review of the circuit court's grant of summary judgment to it, that we take judicial notice of K & B's single-state registration for 2003, and...