COURT OF APPEALS DECISION DATED AND RELEASED February 18, 1997 |
NOTICE |
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62(1), Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 96-1850
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT III
SENTRY INSURANCE, A
MUTUAL
COMPANY,
Plaintiff,
v.
JIM PIONTEK TRUCKING,
INC.,
Defendant-Appellant,
COMMERCIAL UNION
MIDWEST
INSURANCE COMPANY,
Defendant-Respondent.
APPEAL from a judgment
of the circuit court for Brown County:
SUE E. BISCHEL, Judge. Affirmed.
Before Cane, P.J.,
LaRocque and Myse, JJ.
MYSE, J. Jim Piontek Trucking,
Inc., appeals a judgment dismissing its claim against Commercial Union Midwest
Insurance Company alleging that Commercial Union had a duty to defend and
indemnify Piontek against a claim for damages to computer printout sheets from water
damage occurring during shipment.
Piontek claims that the trial court erred by concluding Commercial Union
did not owe a duty to defend or indemnify Piontek under its policy, which
insured Piontek from liability for damages claimed as a result of his hauling
various products, including paper products.
Piontek further claims that a policy exclusion, excluding liability for
"accounts, records, documents and other valuable papers" was
inapplicable. Because we conclude that
the computer printouts are not paper products covered by the insuring portion
of the insurance policy and, even if they were, the exclusion of liability
coverage for "documents" excludes coverage for this claim, we affirm
the judgment.
Telco hired Piontek
Trucking to transport computer printout sheets it uses in its business. Telco was a telemarketing organization that
sells information to its customers. The
information was contained on the computer printout sheets being transported by
Piontek. While Piontek was transporting
the printout sheets, they sustained water damage. Telco was insured for the loss by Sentry Insurance, who paid
Telco $15,000 as a result of the damage to the documents. Sentry, in turn, sought recovery from
Piontek for the amount it was required to pay.
Piontek notified its
insurer, Commercial Union, of the claim and asked Commercial Union to assume
the defense and to provide liability coverage for any damages Piontek may be
required to pay as a result of the damages sustained. Commercial Union determined that the loss was not covered by its
policy and sought a coverage hearing as part of a bifurcated trial. The trial court concluded that the exclusion
of liability provision in the insurance policy that applied to accounts,
records, documents and other valuable papers, excluded the claim from
coverage. Piontek appeals this
determination.
The interpretation of an
insurance policy presents a question of law that this court determines without
deference to the trial court's determination.
Smith v. Atlantic Mut. Ins. Co., 155 Wis.2d 808, 810, 456
N.W.2d 597, 598 (1990). In interpreting
an insurance contract, the court first looks to the language of the
contract. Budget Rent-A-Car v.
Shelby Ins. Group, 197 Wis.2d 663, 669, 541 N.W.2d 178, 180 (Ct. App.
1995). An appellate court is not
privileged to rewrite the terms of a policy, Continental Casualty Co. v.
Homontowski, 181 Wis.2d 129, 133, 510 N.W.2d 743, 745 (Ct. App.
1993). Any ambiguity existing in regard
to coverage must be resolved in favor of the insured. Smith, 155 Wis.2d at 811, 456 N.W.2d at 598. The duty to defend is determined from the
allegations contained in the complaint.
School Dist. v. Wausau Ins. Cos., 170 Wis.2d 347, 364-65,
488 N.W.2d 82, 87-88 (1992). If there
are doubts as to the existence of a duty to defend, the doubt must be resolved
in favor of the insured. Id.
at 365, 488 N.W.2d at 87.
Piontek first argues
that the policy provides liability coverage because the policy provides
coverage for shipments of lawful goods described on the declaration page
subject to some enumerated exclusions.
The declaration page enumerates the following as goods to be
covered: "Box meat, paper
products, cheese, canned goods and cotton piece goods." Piontek contends that because the computer
printout sheets are made of paper they fall within the definition of paper
products. We do not agree. When construing an insurance policy, words
are to be given their plain and ordinary meaning. City of Edgerton v. General Cas. Co., 184 Wis.2d
750, 780, 517 N.W.2d 463, 476 (1994). A
recognized dictionary may be used to discern the plain meaning of the policy's
language. Holsum Foods Div. of
Harvest States Coops. v. Home Ins. Co., 162 Wis.2d 563, 569, 469 N.W.2d
918, 921 (Ct. App. 1991). The word
"product" is defined by Webster's
Third New Int'l Dictionary 1810 (Unabr. 1976), as "something
produced." Paper products are,
therefore, products that are produced from paper. Examples of such products are paper plates, napkins, cups and
paper toweling.
That "documents"
are not included within the description of paper products is clear from the
policy language itself. First, we note
that documents are specifically excluded by the policy language. In addition, the paper itself is not what
gives a document its value; rather that which is upon the paper representing
the thoughts or efforts of a person is what produces value. The value of paper products derives from the
form of the material itself while the value of the computer printouts in
question is not the paper upon which the information is contained but the
information printed upon the paper.
What is printed, written down or drawn on the paper represents the value
of the computer printouts and was the subject of the claim for damages.
We therefore conclude
that "paper products," as a description of goods carried, means
products made of paper where the intrinsic value of the product is in the form
of the paper and the paper itself. The
computer printouts have value because of the information imprinted on the paper
and are not within the definition of "paper products" as that term is
used as a description of goods carried.
Even if we were to
assume arguendo that the computer printout sheets fall within the definition of
paper products, we would still conclude that the insurance policy affords no
coverage for the damage to the computer printout sheets. The policy contains an exclusion clause
which provides:
B.
What Property Is Not Covered
This policy does not insure your
liability for:
1.
Accounts, records, documents and other valuable papers[.]
Because
the computer printout sheets are documents they fall within the expressed
exclusion contained in the insurance policy.
Piontek argues, however, that the exclusion should be construed to read
that the policy does not insure liability for valuable accounts, valuable
records, valuable documents and other valuable papers because the word valuable
in the phrase other "valuable papers" is meant to modify each of the
preceding nouns, i.e., accounts, records and documents. Further, Piontek argues that because the
complaint seeks damages for "documents and not "valuable
documents" this is sufficient to bring the case out of the exclusion
clause.
This argument fails
because even if we were to conclude that the word "valuable" modifies
the term "documents," we do not agree that liability coverage is
therefore granted by this policy.
Although the complaint uses the term "documents" in seeking
damages for Piontek's liability and not "valuable documents," if the
documents had no value, no liability claim could be made because the owner of
the documents would not have sustained a loss.
Therefore, the claim for damages resulting from water damage to the
computer printouts is within the document exclusion of the policy and no
coverage is afforded.
Using the plain meaning
of the language contained in the exclusion, we conclude that the computer
printout sheets are not covered as "paper products" under the policy
and therefore liability coverage is not provided. Furthermore, we conclude that even if the damaged computer
printouts were covered as "paper products" under the policy, the
specific exclusion for "documents" precludes coverage in this case.
By the Court.—Judgment
affirmed.
Not recommended for
publication in the official reports.