PUBLISHED OPINION
Case Nos.: 94-2523
94-2838
Complete Title
of Case:
No. 94-2523
BUDGET RENT-A-CAR
SYSTEMS, INC.,
Plaintiff-Appellant,
v.
THE SHELBY INSURANCE GROUP,
Defendant-Respondent,
JEFFREY L. MILLER and
ROBERT C. SMITH,
Defendants.
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No. 94-2838
BUDGET RENT-A-CAR
SYSTEMS, INC.,
Plaintiff,
v.
THE SHELBY INSURANCE GROUP,
Defendant-Respondent,
JEFFREY L. MILLER,
Defendant,
ROBERT C. SMITH,
Defendant-Appellant.
Submitted on Briefs: June 1, 1995
COURT COURT
OF APPEALS OF WISCONSIN
Opinion Released: October 11, 1995
Opinion Filed: October 11, 1995
Source of APPEAL Appeals from a judgment
Full Name JUDGE COURT: Circuit
Lower Court. COUNTY: Sheboygan
(If "Special", JUDGE: GARY LANGHOFF
so indicate)
JUDGES: Brown,
Nettesheim and Snyder, JJ.
Concurred:
Dissented:
Appellant
ATTORNEYSOn
behalf of the plaintiff-appellant Budget Rent‑A‑Car Systems, Inc.,
the cause was submitted on the briefs of David A. Roth of Peregrine
Law Offices, S.C. of Milwaukee. On
behalf of the defendant-appellant Robert C. Smith, the cause was submitted on
the briefs of Robert C. Hahn of Holden & Hahn, S.C. of
Sheboygan.
Respondent
ATTORNEYSOn
behalf of the defendant-respondent The Shelby Insurance Group, the cause was
submitted on the brief of Peter D. Alberg of Otjen, Van Ert, Stangle,
Lieb & Weir, S.C. of Milwaukee.
COURT OF APPEALS DECISION DATED AND RELEASED October 11, 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. |
Nos. 94-2523
94-2838
STATE
OF WISCONSIN IN COURT OF
APPEALS
No. 94-2523
BUDGET RENT-A-CAR
SYSTEMS, INC.,
Plaintiff-Appellant,
v.
THE SHELBY INSURANCE
GROUP,
Defendant-Respondent,
JEFFREY L. MILLER and
ROBERT C. SMITH,
Defendants.
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- - - - - - - - - - - - - - - - - - - - -
No. 94-2838
BUDGET RENT-A-CAR
SYSTEMS, INC.,
Plaintiff,
v.
THE SHELBY INSURANCE
GROUP,
Defendant-Respondent,
JEFFREY L. MILLER,
Defendant,
ROBERT C. SMITH,
Defendant-Appellant.
APPEALS from a judgment
of the circuit court for Sheboygan County:
GARY LANGHOFF, Judge. Affirmed.
Before Brown, Nettesheim
and Snyder, JJ.
SNYDER, J. Budget
Rent-A-Car Systems, Inc. and Robert C. Smith appeal from the circuit court's
grant of summary judgment in favor of The Shelby Insurance Group. There are two issues on appeal: (1) whether an insurance policy issued by
Shelby to Smith provides coverage for damages incurred by a third party,
Jeffrey L. Miller, in an automobile accident, and (2) whether Shelby has a
duty to defend Smith under the terms of the policy. We conclude that Shelby is not liable under this policy and that
Smith waived his right to raise the duty to defend issue. Accordingly, we affirm.
In April 1992, Smith
began operating Sunnyside Audio and Video, which rents tapes for home use. At that time, Smith approached Michael
LeRoy, an independent insurance agent, about obtaining insurance coverage for
the video store “[a]nd anything else I done.”
As a result of this
discussion, LeRoy prepared an insurance application and submitted it to
Shelby. The application stated that the
“insured name” is Robert C. Smith, d/b/a Sunnyside Audio and Video, the insured
is an individual, and the business of the named insured is “video rental.”
In the summer of 1992,
Smith started a construction business.
In early August, Smith consulted with LeRoy regarding coverage for the
construction business. A policy of
insurance was issued to Smith as the sole proprietor of a construction
business. This policy was issued by the
Secura Insurance Company, and in it Smith described his business as
“carpentry.”
The automobile accident
giving rise to this suit occurred on January 18, 1993. A pickup truck driven by Miller collided
with an automobile owned by Budget. At
the time of the accident, Miller was working full time on a construction job
for the Gus Holman Company. This was a
renovation project contracted for by Smith, d/b/a Robert C. Smith
Construction. The Gus Holman project
was started in August 1992 and completed in April 1993. It is alleged that Miller was working within
the scope of employment at the time of the accident.
On a review of summary
judgment, appellate courts are governed by § 802.08(2), Stats., and must apply those standards just as they are
applied by the trial court. Green
Spring Farms v. Kersten, 136 Wis.2d 304, 315, 401 N.W.2d 816, 820
(1987). Summary judgment is properly
granted where material facts are not in dispute and reasonably drawn inferences
lead to one conclusion. Radlein
v. Industrial Fire and Casualty Ins. Co., 117 Wis.2d 605, 609, 345
N.W.2d 874, 877 (1984). Interpretation
of an insurance contract is a question of law, Cunningham v. Metropolitan
Life Ins. Co., 121 Wis.2d 437, 450, 360 N.W.2d 33, 39 (1985), and may
properly be decided on a motion for summary judgment.
For the purposes of the
motion for summary judgment, the material facts are not in dispute. Both parties look to the language of the
insurance contract in support of their respective positions. The dispute arises in the interpretation of
the language of the Shelby insurance policy and a determination of the coverage
it affords Smith.
In interpreting an
insurance contract, the court would look first to the language of the contract
to determine its meaning. Beahm
v. Pautsch, 180 Wis.2d 574, 581, 510 N.W.2d 702, 705 (Ct. App.
1993). If the terms of an insurance
policy are unambiguous, the court of appeals will not rewrite the contract, but
will simply apply the contract as written to the facts of the case. Continental Casualty Co. v.
Homontowski, 181 Wis.2d 129, 133, 510 N.W.2d 743, 745 (Ct. App. 1993).
The first page of Part A
of the policy is the declarations page.
On that page, it is clearly indicated that the named insured is Robert
C. Smith, d/b/a Sunnyside Audio and Video.
The business of the named insured is described as “video rental.” The first page of Part B defines the words
“you” and “your” as referring to “the person or persons named in the
declarations.” While this incorporates
the information on the declarations page as part of the policy, page two of the
declarations has printed, in all caps:
“THIS DECLARATION PAGE PART A, ENTERPRISER POLICY PROVISIONS PART
B (ENT -1 05-90), AND ANY SCHEDULES, FORMS AND ENDORSEMENTS ISSUED TO FORM A
PART THEREOF, COMPLETES THE ABOVE NUMBERED POLICY.” (Emphasis added.) By this
express language, the declarations page is termed a part of the policy.
This further comports
with the long-standing rule in Wisconsin that endorsements, whether issued with
the policy or subsequently, become part of the policy. See Maas v. Ziegler,
172 Wis.2d 70, 80-81, 492 N.W.2d 621, 625 (1992). The Seventh Circuit Court of Appeals, in applying Wisconsin law,
stated that “[a]ll three documents, policy, declarations, and special
endorsement, were stapled together and comprised one unit when issued.” Petrowski v. Hawkeye-Security Ins. Co.,
237 F.2d 609, 610 (7th Cir. 1956), cert. denied, 352 U.S. 972 (1957).[1]
The declarations page
states that the policy is issued to Smith, d/b/a Sunnyside Audio and
Video. Since the declarations page
forms a part of the policy, it is reasonable to incorporate reference to the
video rental business as the only business that is covered by this policy. Smith subsequently sought additional
insurance for his construction business after obtaining the job at the Gus
Holman site. There is no coverage under
the Shelby policy for risks associated with Smith's construction company.
In its appeal, Budget
also argues that doctrines of waiver, estoppel or reformation should be
applied, precluding Shelby from denying coverage to Smith's construction
business. We disagree.
The general rule is well
established that waiver or estoppel, based upon the conduct of an agent, is not
applicable to matters of coverage. Shannon
v. Shannon, 150 Wis.2d 434, 450-51, 442 N.W.2d 25, 33 (1989). “The rule in Wisconsin is that estoppel can neither
create an insurance contract where none exists, nor enlarge existing
coverage.” Hoeft v. United States
Fire Ins. Co., 153 Wis.2d 135, 144, 450 N.W.2d 459, 463 (Ct. App.
1989). Estoppel and waiver cannot be
applied to create a liability for coverage not contracted for. See Shannon, 150 Wis.2d
at 451-52, 442 N.W.2d at 33. The issue
of whether risks associated with Smith's construction business are covered
under a policy issued to Sunnyside Audio and Video concerns the scope of
coverage of the policy. The Shelby
policy was issued to Smith, d/b/a Sunnyside Audio and Video. It covered risks associated with the video
business. To now extend that coverage
to Smith's construction business would enlarge the scope of coverage. We agree with the finding of the trial court
that doctrines of waiver and estoppel are not applicable.
In the alternative,
Budget argues that the Shelby policy should be reformed to provide coverage
based upon mutual mistake, premised on a claim that Smith believed that
the Shelby policy covered all of his business ventures. A cause of action for reformation of a
policy is allowed if the party seeking reformation can show that because of
fraud or mutual mistake, the policy does not contain provisions which were
desired and intended to be included. Sprangers
v. Greatway Ins. Co., 175 Wis.2d 60, 70, 498 N.W.2d 858, 863 (Ct. App.
1993), aff'd, 182 Wis.2d 521, 514 N.W.2d 1 (1994). Mutual mistake is established when the party
applying for insurance proves that certain statements were made to the agent
concerning desired coverage, but the issued policy did not provide such
coverage. Id. at 71, 498
N.W.2d at 863.
Budget contends that
since LeRoy knew that Smith was in the construction business when the Shelby
policy was written, he should have written the policy to include that
business. Budget's contention is
contrary to the undisputed facts.
When Smith applied for
the Shelby policy, he told LeRoy that he wanted insurance for the video store
and “anything I done I wanted insurance for me.” LeRoy then wrote the Shelby policy insuring the video
business. However, a few months later,
Smith received a letter from the City of Sheboygan stating that his construction
business insurance was running out and that if it lapsed Smith would lose his
contractor's license.
Smith presented the City
of Sheboygan letter to LeRoy and consulted with LeRoy as to the necessary
coverage. LeRoy asked Smith what
construction business coverage he wanted, and Smith requested enough insurance
to get his contractor's license with the city—the “bare bones minimum.” Furthermore, LeRoy and Smith discussed the
issue of coverage for non-owned vehicles, and Smith declined that
coverage. After consulting with Smith,
LeRoy then wrote the separate Secura policy providing insurance for the
construction business.
Contrary to any alleged
belief that Smith may have had as to the limits and coverage of the Shelby
policy, it is undisputed that by late August 1992 and at the time of the
January 18, 1993 accident, two separate insurance policies were in effect—the
Shelby policy covering the video business and the Secura policy providing
coverage for Smith's construction business.
We conclude that Smith clearly understood that he needed insurance for
the two separate business entities and that he was not under the impression
that the Shelby policy conferred coverage for both entities.[2]
We hold that the issue of Shelby's duty to
defend has been waived. The burden is
on the party bringing an appeal to establish through the record that the issue
was raised with sufficient prominence that the trial court considered it in its
disposition. Beacon Bowl, Inc. v.
Wisconsin Elec. Power Co., 176 Wis.2d 740, 790, 501 N.W.2d 788, 808
(1993). “This court will not entertain
claims which were not pleaded or pursued below and which were not even remotely
considered by the trial court ¼.” Martin v. Liberty Mut. Fire Ins. Co.,
97 Wis.2d 127, 135, 293 N.W.2d 168, 172 (1980).
The only context in
which the duty to defend issue was raised to the trial court was in the
memorandum brief in opposition to Shelby's motion for summary judgment. Smith referred to the section headed: “THE SHELBY POLICY CLEARLY COVERS THE
LIABILITY OF ROBERT C. SMITH AND PROVIDES FOR HIS DEFENSE,” but only in support
of his argument regarding Shelby's liability under the insurance contract. Nowhere was the duty to defend issue argued
apart from this contention or raised as a separate issue. This court will not consider issues raised
for the first time on appeal. Allen
v. Allen, 78 Wis.2d 263, 270, 254 N.W.2d 244, 248 (1977). Smith has waived his right to appeal this
issue.
By the Court.—Judgment
affirmed.
[1] Case law from other jurisdictions is also in agreement. The Georgia Court of Appeals stated that “[t]he declaration page of the policy of insurance constitutes a part thereof and the provisions therein must be construed with the remainder of the insurance contract.” McGee v. Southern Gen. Ins. Co., 391 S.E.2d 669, 670 (Ga. Ct. App. 1990). See, e.g., Cullum v. Farmers Ins. Exch., 857 P.2d 922, 925 (Utah 1993); Kanter v. Louisiana Farm Bureau Mut. Ins. Co., 587 So.2d 9 (La. Ct. App. 1991); American Pioneer Life Ins. Co. v. Allender, 713 S.W.2d 249, 251 (Ark. Ct. App. 1986); First Am. Title Ins. Co. v. Seaboard Savs. and Loan Ass'n, 315 S.E.2d 842, 845 (Va. 1984).