COURT OF APPEALS DECISION DATED AND FILED September 16, 2008 David R. Schanker Clerk of Court of Appeals |
|
NOTICE |
|
|
This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. § 808.10 and Rule 809.62. |
|
APPEAL
from judgments of the circuit court for
Before
¶1 PER CURIAM.
Background
¶2 Andre was a hydrogeologist for Envirogen, Inc. To accomplish his job, it was often necessary to transport heavy equipment. Employees were required to use their own vehicles to haul the supplies and were compensated accordingly. Andre used his Ford F150 pickup truck approximately twice a month to move machinery. Envirogen did have a minivan for employee use, although it was for local overnight assignments only, not for hauling equipment.
¶3 On June 30, 2000, while Andre was traveling in his truck for
Envirogen, another driver crossed the center line, colliding with and killing Andre. The tortfeasor was insured for $25,000, and
Envirogen’s worker’s compensation carrier paid
¶4 American insured Envirogen’s minivan and State Farm insured
Andre’s truck.
Discussion
¶5 We review summary judgments de novo, using the same
methodology as the circuit court. Hardy
v. Hoefferle, 2007 WI App 264, ¶6, 306
¶6 The interpretation of the language in an insurance policy
presents a question of law we review de novo.
Taylor v. Greatway Ins. Co., 2001 WI 93, ¶9, 245
I. American’s Policy
¶7 American issued a business automobile policy to Envirogen. The policy included UIM coverage through an endorsement and, as relevant here, defined covered vehicles as: “Only those ‘autos’ you [the named insured] own….” This coverage thus applied to Envirogen’s minivan.
¶8 The UIM coverage provision in the policy states:
We will pay all sums the “insured” is legally entitled to recover as compensatory damages from the owner or driver of an “underinsured motor vehicle.” The damages must result from “bodily injury” sustained by the “insured” caused by an “accident.” The owner’s or driver’s liability for these damages must result from the ownership, maintenance or use of the “underinsured motor vehicle.”
The UIM endorsement also defined “insured,” which
included the named insured and “[a]nyone else occupying a covered auto or a temporary
substitute for a covered auto. The
covered auto must be out of service because of its breakdown, repair, servicing,
loss or destruction.” (Internal quotation marks omitted.)
¶9 The policy does not define “temporary substitute.” In interpreting such a phrase, we give words
their common and ordinary meanings. Danbeck
v. American Family Mut. Ins. Co., 2001 WI 91, ¶10, 245
¶10 American responds that the minivan is completely incapable of hauling heavy equipment and, because of the different mechanical capabilities between the minivan and the pickup truck, the truck is not a substitute. American asserts Andre and other employees knew they would have to provide their own vehicles for hauling equipment. Further, American argues even if the truck were a substitute, it was not a temporary substitute because Andre had been using his truck in the course of his employment for approximately two years.
¶11 The circuit court agreed the truck was not a substitute because of the vehicles’ different capabilities. Further, the court stated, Andre used the truck not because a substitute for the minivan was needed but because providing his own vehicle was a condition of employment.[4]
¶12 While we deem the circuit court’s reasoning sound, we affirm
for a different reason.[5] See Lecander v. Billmeyer, 171
II. State Farm’s Policy
¶13 Andre’s State Farm policy includes a reducing clause, which states, in relevant part:
2. The most we will pay is the lesser of:
a. the limits of liability of this coverage reduced by any of the following that apply:
(1) the amount paid to the insured by or on behalf of any person or organization that may be legally responsible for the bodily injury; or
(2) the amount paid or payable under any worker’s compensation or disability benefits law; or
b. the amount of damage sustained, but not recovered.
¶14 The first issue in construing an insurance policy is to
determine whether an ambiguity exists regarding the disputed coverage. Folkman v. Quamme, 2003 WI 116, ¶13,
264
¶15 Contextual ambiguity exists if an otherwise unambiguous
provision is reasonably susceptible to more than one construction when read in
context of the policy’s other language. See id., ¶28. Contextual ambiguities must be genuine and on
the policy’s face. Folkman, 264
¶16 The Bailey court determined this reducing clause was not contextually
ambiguous and was therefore valid and enforceable. Bailey, 302
¶17 In fact, while St. Laurent essentially asserts that incorporating the clause into the actual policy, instead of attaching it as a separate endorsement after the main policy, makes the clause contextually ambiguous, we consider the reverse to be true. Rather than having two documents—a main policy and an endorsement changing the terms of the main policy—which purport to describe coverage, the incorporation of the reducing clause into the main policy eliminates the second document. This reduces the chance of confusion between two documents and, therefore, is less likely to result in contextual ambiguity.
¶18 Viewing the policy as a whole, if an insured were only to read
the declarations page of a policy, he or she would generally see only a figure
representing the maximum amount of UIM coverage available. See Sukala v. Heritage Mut. Ins. Co.,
2000 WI App 266, ¶11, 240
¶19 The declarations page here states that $100,000 UIM coverage is available to each person. The declarations page also states: “Your policy consists of this declarations page, the policy booklet, form 9849.6 and any endorsements that apply ….” Further, the declarations page designates UIM coverage as coverage W.
¶20 The policy book, which is form 9849.6, is immediately appended
to the declarations page. The cover of
the policy book advises the insured to “PLEASE READ YOUR POLICY CAREFULLY.” The policy index correctly identifies where
information on “coverage W” begins, and the reducing clause is within that
section. When an insurance policy
correctly refers an insured to a relevant potion of the policy without
confusion, the insured is properly charged with the obligation to read that
provision. Myers v. General Cas. Co.,
2005 WI App 49, ¶24, 279
¶21 The declarations page appropriately identifies State Farm’s designation for UIM coverage, the policy index accurately directs the insured to the section on that coverage, and the reducing clause is unambiguous on its face. There is no contextual ambiguity. Thus, consistent with Bailey, the reducing clause is valid and enforceable.[7]
By the Court.—Judgments affirmed.
This opinion will not be
published. See Wis. Stat. Rule 809.23(1)(b)5.
[1] State Farm also made some payments for incidental expenses, but those payments are not at issue in this appeal.
[2] All references to the Wisconsin Statutes are to the 2005-06 version unless otherwise noted.
[3] American
asserts that even if the truck were a substitute for the minivan,
[4] Contrary
to
[5] Alternatively, we agree with the circuit court that the truck was not a substitute, temporary or otherwise, for the minivan.
[6] Wisconsin Stat. § 632.32(5)(i), part of the subsection on permissible provisions, states:
A policy may provide that the limits under the policy for uninsured or underinsured motorist coverage for bodily injury or death resulting from any one accident shall be reduced by any of the following that apply:
1. Amounts paid by or on behalf of any person or organization that may be legally responsible for the bodily injury or death for which the payment is made.
2. Amounts paid or payable under any worker’s compensation law.
3. Amounts paid or payable under any disability benefits laws.
[7] We
reject