Smith v. National Indem. Co., RENT-A-CA

Decision Date27 March 1973
Docket NumberINC,RENT-A-CA,No. 255,255
Citation205 N.W.2d 365,57 Wis.2d 706
PartiesSherman SMITH, a minor, by Charles W. Collins, his gdn. ad litem, et al., Plaintiffs-Respondents, v. NATIONAL INDEMNITY COMPANY, Defendant-Appellant. HARTFORD ACCIDENT & INDEMNITY COMPANY et al., Defendants and Third-Party Plaintiff-Respondents, v. DOERING, Third-Party Defendant-Respondent.
CourtWisconsin Supreme Court

deVries, Vlasak & Schallert, Milwaukee, for appellant.

Prosser, Wiedabach, Koppa, Lane & Quale, Milwaukee, D. M. Quale, Milwaukee, of counsel for defendants & Third party plaintiffs-respondents.

HALLOWS, Chief Justice.

The issue raised is whether the omnibus coverage statute applies to the insurance policy of National Indemnity; and if so, whether the limits of liability afforded the named insured must be extended to the renders of the cars. The policy issued by National Indemnity is a combination automobile policy in somewhat standard form, with $10,000/$20,000 limits. In its printed form, it expressly excluded both rented vehicles National Indemnity contends the omnibus coverage statute, sec. 204.30(3), Stats. of 1969, is applicable to this policy. We disagree. The policy was issued on January 16, 1969; the accident occurred on February 2, 1969; this action was commenced on July 3, 1969; and the amendment of 1969 did not become effective until August 2, 1969.

and liability assumed by the insured under any contract or agreement. 1 By endorsement, coverage was extended to include renters subject to the $10,000/$20,000 financial limits of liability and other terms of the policy. 2 [57 Wis.2d 710] These limits of liability, however, were increased to $100,000/$300,000 for Doering, the named insured, and its employees by a 'General Change Endorsement,' which also provided all other terms, conditions and agreements would remain unchanged. Thus by its terms, the policy provided limits of $10,000/$20,000 for renters but $100,000/$300,000 for the named insured.

In sec. 204.30(3), Stats.1967, insurance covering a car-rental business is not excluded from its operation. The statute provides that no policy of insurance shall be issued or delivered in this state to the owner of a motor vehicle unless it contains a provision reading substantially as follows:

'The indemnity provided by this policy is extended to apply, in the same manner and under the same provisions as it is applicable to the named assured, to any person or persons while riding in or operating any automobile described in this policy when such automobile is being used for purposes and in the manner described in said policy . . .;'

This section, after providing what indemnity must be extended, provides exceptions for a public auto garage, auto repair shop, auto sales agency and service station. The Doering rental-car business is not any one of these excepted businesses and therefore the general requirements of the section must apply providing there is no other exception in the statutes.

National Indemnity argues sec. 344.51, Stats., 3 is such an exception. This section requires that renters of automobiles National Indemnity also argues sec. 204.30(3), Stats., does require the same dollar limits of liability to be extended but only the coverage of the policy afforded to the named insured. Coverage, it is argued, is restricted to the type and scope of the risk and not the dollar limit of liability. While it may be true that 'coverage' is often used as a word of art in the insurance industry and as such refers only to the risk of loss or the type of risks assumed, 4 'coverage' is also used especially by lay people to include not only the type of risks but the dollar limits of liability or amount of indemnity. National Indemnity relies on Haines v. Mid-Century Ins. Co. (1970), 47 Wis.2d 442, 177 N.W.2d 328, wherein this court in referring to Klatt v. Zera (1960), 11 Wis.2d 415, 105 N.W.2d 776, stated the purpose of sec. 204.34(2) was to prohibit exclusion clauses which would withdraw any coverage or protection required to be given under sec. 204.30(3). One can equally argue the words 'coverage' and 'protection' were used synonomously or that protection encompassed more than coverage. The 1969 amendment to sec. 204.30(3) uses the word 'coverage' as a subtitle and also uses the word 'coverage' in the exclusion clause, 5 but this is not controlling--even if the 1969 version were applicable. In the 1967 version of sec. 204.30(3) the exception clause does not contain the word 'coverage' but provides that no insurance afforded by this paragraph shall apply, etc. The word 'insurance' includes coverage in the strict sense and the limits of liability. What is important, is that both the 1969 and the 1967 versions of sec. 204.30(3) refer to the 'indemnity' provided by the policy and require 'The indemnity provided by this policy is extended to apply, in the same manner and under the same provisions as it is applicable to the named assured, to any person while riding in or operating any automobile described in this policy . . .'. Indemnity, like insurance, is more than coverage; it includes coverage in a technical sense and the policy limits--that is the protection afforded by the policy. Whatever rights the named insured has under the policy are extended by virtue of the omnibus clause.

be covered by insurance to the extent of $10,000/$20,000 limits. It is argued this section was designed to guarantee financial responsibility to renters of automobiles because this court in City of Milwaukee v. Froelich (1928), 196 Wis. 444, 219 N.W. 954, pointed out that at common law when a person leases an automobile and is negligent in its operation, he and not the lessor is liable for the damages sustained by reason of such negligent operation. The casual borrowing of a car was distinguished from the renting of the car for compensation. A year after Froelich the legislature enacted sec. 344.51 (then sec. 85.215). We see no conflict between sec. 344.51, requiring minimum limits, and sec. 204.30(3), requiring the indemnity of the named insured to be extended to other users of an auto; consequently, we do not apply the general rule that where there is a conflict between a general statute and a special statute, the special statute is controlling when it is enacted after the general statute. See State v. Dairyland Power Co-op. (1971), 52 Wis.2d 45, 187 N.W.2d 878; Martineau v. State Conservation Comm. (1970), 46 Wis.2d 443, 175 N.W.2d 206; Grant County Service Bureau v. Treweek (1963), 19 Wis.2d 548, 120 N.W.2d 634; David A. Ulrich, Inc. v. Saukville (1959), 7 Wis.2d 173, 96 N.W.2d 612.

This concept that the omnibus coverage clause includes the dollar limits of Contrary to its written terms, the policy by operation...

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