PUBLISHED OPINION
Case No.: 94-2320
†Petition
for Review filed.
Complete
Title
of Case:CONNIE
SCHULT,
Plaintiff-Respondent,
v.
RURAL
MUTUAL INSURANCE COMPANY,
Defendant-Appellant,†
ST.
PAUL FIRE AND MARINE
INSURANCE
COMPANY,
Defendant.
Submitted
on Briefs: April 6, 1995
COURT COURT OF APPEALS OF WISCONSIN
Opinion
Released: June 8, 1995
Opinion
Filed: June 8, 1995
Source of
APPEAL Appeal from a
judgment
Full Name
JUDGE COURT: Circuit
Lower
Court. COUNTY: Iowa
(If
"Special" JUDGE: James P. Fiedler
so
indicate)
JUDGES: Eich,
C.J., Gartzke, P.J., and Dykman, J.
Concurred:
Dissented:
Appellant
ATTORNEYSFor the
defendant-appellant the cause was submitted on the briefs of Arnold P. Anderson of Mohr & Anderson, S.C. of
Hartford.
Respondent
ATTORNEYSFor the
plaintiff-respondent the cause was submitted on the brief of Bruce D. Huibregtse and Kevin S. Thompson of Stafford, Rosenbaum, Rieser
& Hansen of Madison.
COURT OF APPEALS DECISION DATED AND RELEASED June
8, 1995 |
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,
Stats. |
This
opinion is subject to further editing.
If published, the official version will appear in the bound volume of
the Official Reports. |
No. 94-2320
STATE OF WISCONSIN IN
COURT OF APPEALS
CONNIE
SCHULT,
Plaintiff-Respondent,
v.
RURAL
MUTUAL INSURANCE COMPANY,
Defendant-Appellant,
ST.
PAUL FIRE AND MARINE
INSURANCE
COMPANY,
Defendant.
APPEAL from a judgment
of the circuit court for Iowa County: JAMES P. FIEDLER, Judge. Affirmed.
Before Eich, C.J.,
Gartzke, P.J., and Dykman, J.
DYKMAN, J. Rural Mutual Insurance Company appeals from
a summary judgment in which the trial court voided a limit of liability clause,
thereby permitting the stacking of liability insurance. Rural argues that the trial court erred in
determining that liability insurance could be stacked. According to Rural, because only one policy
was purchased and only one premium was paid for nonowned vehicle coverage, the
limit of liability clause is not a reducing clause but defines the extent of
coverage. Rural also argues that only
one recovery is permitted under the policy because the insured could only drive
one vehicle at one point in time. We
conclude that the limit of liability clause violates § 631.43(1), Stats., because the insured paid more
than one premium for liability insurance covering the same loss and was
operating a nonowned vehicle at the time of the accident. Accordingly, we affirm.
BACKGROUND
The following facts are
not in dispute. On April 19, 1992,
Connie Schult was severely injured in an automobile accident. She was a passenger in a rental van being
driven by Keith Schult. Connie has
incurred in excess of $300,000 in medical expenses relating to her
injuries.
The driver of the other
vehicle involved in the accident was not insured. However, Keith owns an insurance policy issued by Rural for three
of his own vehicles. The policy
provides liability insurance for this accident. The parties agree that Keith was negligent at the time of the
accident, that his negligence was a cause of Connie's damages, and that Keith
is legally responsible for Connie's damages.
The policy promises to
pay up to $100,000 in liability insurance for bodily injuries for which Keith
becomes legally responsible. Keith has
paid three bodily injury premiums for each of his three vehicles. Rural agreed to pay Connie $100,000 for her
damages but Connie sought an additional $200,000 in coverage arguing that the
limit of liability clause was void and that the three liability coverages could
be stacked. The trial court granted
summary judgment in favor of Connie and ordered Rural to pay her an additional
$200,000 plus interest and costs. Rural
appeals.
STANDARD
OF REVIEW
An
appeal from a grant of summary judgment raises an issue of law which we review de novo by
applying the same standards employed by the trial court. Brownelli v. McCaughtry,
182 Wis.2d 367, 372, 514 N.W.2d 48, 49 (Ct. App. 1994). Summary judgment methodology is well
known. See id. We initially examine the complaint to
determine if a claim has been stated and then the answer to determine if a
material issue of fact has been raised.
Id. We then look at the documents offered by the
moving party to see if a prima facie case has been established and then at
the documents offered by the party opposing the motion to determine if any
material facts remain in dispute entitling the opposing party to a trial. Id. at 372-73, 514 N.W.2d at 49-50.
Whether liability
insurance for which an insured has paid separate premiums under a single
insurance policy may be stacked involves construing a contract and
§ 631.43(1), Stats. West Bend Mut. Ins. Co. v. Playman,
171 Wis.2d 37, 40, 489 N.W.2d 915, 916 (1992).
These are questions of law which we review de novo. Id.
In construing an insurance policy, our duty is to give the policy
language its plain meaning and determine what a reasonable person in the
position of the insured would have understood the words to mean. Garriguenc v. Love, 67 Wis.2d 130,
134-35, 226 N.W.2d 414, 417 (1975). In
construing a statute, we examine the statute's language, and, absent any
ambiguity, we give the language its ordinary meaning. State ex rel. Frederick v. McCaughtry, 173 Wis.2d 222,
225-26, 496 N.W.2d 177, 179 (Ct. App. 1992).
STACKING
Rural argues that the
trial court erred when it permitted the stacking of liability insurance. According to Rural, stacking liability
insurance is inappropriate because a specific clause in its policy limits its
liability and at least two policies must be purchased before § 631.43(1), Stats., will void this clause. It also contends that the limit of liability
clause is not a reducing clause, but instead defines the extent of
coverage. We disagree.
Stacking is defined as
an insured attempting to collect reimbursement for the same loss under several
policies. Carrington v. St. Paul
Fire & Marine Ins. Co., 169 Wis.2d 211, 223, 485 N.W.2d 267,
271 (1992). Section 631.43(1), Stats., provides in part:
When 2 or more policies promise to indemnify an
insured against the same loss, no "other insurance" provisions of the
policy may reduce the aggregate protection of the insured below the lesser of
the actual insured loss suffered by the insured or the total indemnification
promised by the policies if there were no "other insurance"
provisions.
For
the purposes of § 631.43(1), a determination of whether an insured may stack
coverage turns not on the number of policies purchased, but on the number of
premiums paid for coverage for a particular loss. Carrington, 169 Wis.2d at 223, 485 N.W.2d at
271-72. See also Playman,
171 Wis.2d at 43-44, 489 N.W.2d at 917-18; Fairbanks v. American Family Mut. Ins.
Co., 181 Wis.2d 838, 842 n.2, 512 N.W.2d 230, 232 (Ct. App.
1994). "Where an insured pays
separate premiums, he or she receives separate and stackable uninsured motorist
protections whether the coverage is provided in one or more ...
polic[ies]." Carrington,
169 Wis.2d at 224, 485 N.W.2d at 272.
Thus, when multiple premiums are paid for the same loss, a single limit
clause is considered to be an "other insurance" provision and is void
pursuant to § 631.43(1). Id.
The record should
reflect whether separate premiums were paid.
See id. at
225, 485 N.W.2d at 272. But, absent an
express statement that a single premium was charged for coverage for all
covered vehicles, it is reasonable for an insured to expect that the coverage
is stackable. Id. at
225-26, 485 N.W.2d at 273.
Keith's Rural policy
provides in part:
INSURING AGREEMENT
A.We will pay damages for
"bodily injury" ... for which any "insured" becomes legally
responsible because of an auto accident.
....
B."Insured" as
used in this Part means:
1.You
or any "family member" for the ownership, maintenance or use of any
auto or "trailer."
....
4.For any auto or "trailer,"
other than "your covered auto," any other person or organization but
only with respect to legal responsibility for acts or omissions of you or any
"family member" for whom coverage is afforded under this part.
A separate clause also
provides:
LIMIT
OF LIABILITY
A.The
limit of liability shown in the Declarations for this coverage is our maximum
limit of liability for all damages resulting from any one auto accident. This is the most we will pay regardless of
the number of:
1. "Insureds;"
2. Claims made;
3.Vehicles
or premiums shown in the Declarations; or
4.Vehicles
involved in the auto accident.
B.We
will apply the limit of liability to provide any separate limits required by
law for bodily injury and property damage liability. However, this provision (B.) will not change our total limit of
liability.
The single limit shown
on the declarations page is $100,000 each person, $300,000 each accident. The declarations page indicates that three
premiums were paid for liability coverage for each of Keith's three
vehicles. Each premium covers the same
loss, i.e.,
liability coverage for damages for bodily injury for which Keith becomes
legally responsible. Because Rural
received separate premiums for each of the three covered vehicles, it
effectively issued three separate policies.
Carrington,
169 Wis.2d at 223, 485 N.W.2d at 271-72.
Thus, we conclude the limit of liability clause is an "other
insurance" provision which violates § 631.43(1), Stats., and is void.
Rural argues that the
holdings in the uninsured motorist and underinsured motorist insurance cases, i.e., Playman and
Carrington,
which permit stacking when a single limit clause violates § 631.43(1), Stats., are inapplicable in this
case. Rural asserts that unlike
uninsured motorist or underinsured motorist insurance, liability insurance
follows a vehicle and not the insured.
Contrary to Rural's
assertions, we have determined that there is no basis in the law for limiting
stacking to uninsured motorist and underinsured motorist cases. State Farm Mut. Auto. Ins. Co. v. Continental Casualty
Co., 174 Wis.2d 434, 441 n.4, 498 N.W.2d 247, 250 (Ct. App.
1993). "Coverage questions
(stacking or otherwise) are properly determined by construing the language of
the insurance contract(s) and applying the applicable law." Id.
Section 631.43(1), Stats.,
voids clauses which limit liability when more than one premium has been paid
for coverage in which the insurer promises to indemnify an insured against the
same loss. In the instant case, the
limit of liability clause violates § 631.43(1) because it precludes
multiple recoveries for the same loss.
Rural also argues that
there is no evidence to suggest that Keith paid a separate premium for nonowned
vehicle coverage. Therefore, it argues,
§ 631.43(1), Stats., is
inapplicable. However, absent an
express statement that a single premium covers all vehicles, an insured may
reasonably expect that coverage is stackable.
Carrington,
169 Wis.2d at 225-26, 485 N.W.2d at 273.
Because the declarations page shows that a separate premium was paid for
liability insurance for each vehicle, we conclude that § 631.43(1) is
applicable and the policy's limit of liability clause is void.
Additionally, Rural does
not indicate under which of the three premiums Connie is entitled to $100,000
but maintains that Connie may recover under only one of the three because Keith
could drive only one car at one time.[1] Rural agreed to pay Connie $100,000 for her
damages pursuant to the liability insurance provision because Keith was driving
a nonowned vehicle and became responsible for bodily injuries and not because
Connie was injured while Keith was driving one of his covered vehicles. Consequently, the liability insurance in the
instant case does not follow the vehicle, but follows the insured. In other words, under Keith's policy, when
he is driving a nonowned vehicle, liability insurance is personal to him and may
be stacked. See State Farm,
174 Wis.2d at 440, 498 N.W.2d at 249 (in an accident involving a nonowned
vehicle, provisions covering nonowned vehicles apply and not those relating to
coverage for the vehicle specified in the policy).
Had Keith been driving
one of his three covered vehicles, Connie's recovery would have been limited to
$100,000 because each premium insured against liability arising from the
operation of the vehicle specified in the policy. See Agnew v. American Family Mut. Ins. Co.,
150 Wis.2d 341, 349, 441 N.W.2d 222, 226 (1989). The fact that he was not, however, does not persuade us that
stacking is not permitted. In State Farm we
stated:
While we agree that the multiple coverage
triggered by the facts of this case was fortuitous, we disagree that this
result is unreasonable or illogical when examining the language of the policies
and the intent of the contracting parties.
The resolution of any coverage dispute is necessarily governed by the terms
of the policy as negotiated by the parties.
Here, State Farm consciously chose to issue seven separate liability
policies to Thomas. In each policy,
State Farm promised to indemnify an insured for any liability resulting from
the operation [of] a nonowned vehicle.
In exchange for these separately made promises, State Farm was paid
seven separate premiums, each calculated to compensate for the risk. We see nothing unreasonable or illogical in
our holding State Farm to its separate promises under such circumstances. The law of insurance coverage is not
governed by the fortuity of events and whether stacking results. Rather it is governed by the contract of the
parties.
State Farm,
174 Wis.2d at 442, 498 N.W.2d at 250.
Rural agreed to pay
damages for bodily injuries for which Keith became legally responsible. Rural made three separate agreements to pay
by accepting three liability insurance premiums. Rural's duty to provide liability insurance turns on the fact
that Keith was driving a nonowned vehicle, not that he was driving a covered vehicle. Accordingly, we conclude that the limit on
liability clause is void and stacking is appropriate under the facts of this
case thereby making Rural liable for an additional $200,000 plus interest and
costs.
By the Court.—Judgment
affirmed.