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COURT OF APPEALS DECISION DATED AND RELEASED January 30, 1996 |
NOTICE |
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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. 95-0760
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT I
ESTATE OF JOHN W.
ERNST,
Plaintiff-Appellant,
v.
AMERICAN STANDARD
INSURANCE,
Defendant-Appellant,
BERNDT BUICK COMPANY,
Defendant-Respondent,
KEITH D. THORNTON and
LAURIE THORNTON,
Third Party Plaintiffs-Co-Appellants,
ESTATE OF ANTHONY M.
REHBEIN,
GLORIA ERICKSON and
LEE REHBEIN,
Third Party Plaintiffs,
WEST BEND MUTUAL
INSURANCE COMPANY and
BERNDT BUICK CO.,
Third Party Defendants-Respondents,
v.
AMERICAN STANDARD
INSURANCE COMPANY
OF WISCONSIN and
ESTATE OF JOHN W. ERNST,
Third Party Defendants-Appellants,
AMERICAN FAMILY MUTUAL
INSURANCE CO. and
ESTATE OF ANTHONY M.
REHBEIN,
Third Party Defendants.
-------------------------------------------------------------------------------------------
ESTATE OF JOHN W.
ERNST,
Plaintiff-Appellant,
v.
BERNDT BUICK COMPANY,
Defendant-Respondent,
KEITH D. THORNTON and
LAURIE THORNTON,
Third Party Plaintiffs-Co-Appellants,
LEE REHBEIN, GLORIA
ERICKSON and
ANTHONY M. REHBEIN
(ESTATE OF),
Third Party Plaintiffs,
v.
WEST BEND MUTUAL INS.
CO. and
BERNDT BUICK CO.,
Third Party Defendants-Respondents,
AMERICAN STANDARD
INSURANCE
COMPANY OF WISCONSIN,
Third Party Defendant-Appellant,
AMERICAN FAMILY MUTUAL
INSURANCE CO.,
JOHN W. ERNST and
ANTHONY M. REHBEIN
(ESTATE OF),
Third Party Defendants.
APPEAL from an order and
a judgment of the circuit court for Milwaukee County: THOMAS P. DOHERTY, Judge.
Reversed and cause remanded.
Before Wedemeyer, P.J.,
Fine and Schudson, JJ.
PER CURIAM. At issue in this appeal is the ownership of
an automobile at the time of a fatal traffic accident. John W. Ernst had agreed to trade the
automobile to Berndt Buick Company as partial payment for another vehicle. While driving the trade-in vehicle, Ernst
was involved in an automobile accident that resulted in the death of Anthony M.
Rehbein and injury to Keith D. Thornton.
The Estate of John W.
Ernst, American Standard Insurance Company, which provided liability insurance
to Ernst, Thornton, and Laurie Thornton, appeal from an order dismissing their
claims against Berndt Buick, and its insurer, West Bend Mutual Insurance
Company, and a judgment assessing costs.
They contend that the undisputed facts establish that ownership of the
trade-in vehicle was transferred to Berndt Buick when Ernst endorsed and
delivered the vehicle's certificate of title to Berndt Buick's salesman. They argue that delivery of possession is
not required to transfer ownership, or if it is required, Berndt Buick's
salesman waived delivery or acquired constructive possession. Finally, Ernst and American Standard argue
that, at a minimum, a jury issue remains on the question of ownership.[1] We conclude that a question of material fact
is in dispute. Therefore, we reverse
the order and the judgment and remand the case for a new trial.
Eighty-five-year-old
Ernst visited Berndt Buick and discussed the purchase of a used Buick with
Carlos Micale. Ernst intended to
trade-in a car he owned, and Micale gave Ernst an approximate trade-in
value. Two days later, and at Ernst's
request, Micale drove the Buick to Ernst's place of business. Ernst apparently wanted the opinion of David
Gilpatrick, his business associate.
Gilpatrick test drove the vehicle, and Micale inspected the proposed
trade-in vehicle. After Ernst and
Micale negotiated the final terms of the sale, which were approved by Micale's
supervisor, they executed a motor vehicle purchase agreement for the sale of the
Buick to Ernst. Without entering the buyer's
name, Ernst also signed the assignment on the certificate of title for the
trade-in vehicle and gave the certificate to Micale. There is a dispute as to whether Micale asked Ernst to complete
and deliver the title at that time. In
addition, Ernst gave Micale a check for the remainder of the purchase
price. Ernst did not disclose the
odometer reading on the title or on the special form automobile dealers are
required to use.
After signing the
purchase contract and receiving the title certificate and check, Micale
returned to Berndt Buick to have the Buick "finished." This customary practice involved a
pre-delivery inspection, as well as washing and cleaning the car. The Buick was to be ready for Ernst to pick
up approximately three hours later.
When Micale returned to
Berndt Buick, he gave the certificate of title for the trade-in vehicle and
Ernst's check to Robin Wistl, title and billing clerk. Wistl testified that she completed the buyer
information on the certificate of title by writing in Berndt Buick's name. She recorded the certificate in the
company's title book and placed the certificate in the safe. She testified that she followed these
procedures to prevent theft of the certificate of title.
Wistl also testified
that the Department of Motor Vehicles would not issue a new certificate of
title for the trade-in vehicle unless the application was accompanied by
Ernst's certificate of title and a completed odometer disclosure statement
signed by Ernst. Micale testified that
office personnel generally typed the seller's name and address on the odometer
form before it was completed. Micale
also testified that had Ernst brought the trade-in vehicle to Berndt Buick to
complete the transaction, the form would have been completed and signed by
Ernst at that time.
When Micale left Ernst's
place of business, Ernst retained the trade-in vehicle. There was no testimony that Ernst had
offered Micale the keys or that he had removed any personal items from the
vehicle. Also, Gilpatrick was to obtain
a Buick tire rim and mount the spare tire from the trade-in vehicle onto the
rim. He did so because Ernst wanted a
full-sized spare tire.
Ernst did not go to the
dealership. Several hours after he was
to do so, he was involved in the fatal accident. The sale of the Buick was never completed, and several months
later Berndt Buick refunded the amount of the check and, later, returned the
certificate of title.
Ernst subsequently
brought a declaratory judgment action seeking to have Berndt Buick declared the
owner of the trade-in vehicle. Because
the insurance policy carried by Berndt Buick provided greater liability
coverage than the one issued by American Standard, Thornton, his wife, and the
Estate of Rehbein, intervened as third-party plaintiffs and, on the issue of
ownership, sided with Ernst. Ernst died
prior to trial, and his estate replaced him as plaintiff.
At trial, the parties
were not in agreement as to whether the ownership issue presented an issue of
law or a question of fact. The trial court
had denied summary judgment and set the case for a jury trial because Ernst's
Estate and American Standard argued that Ernst had constructively delivered the
trade-in vehicle or, alternatively, that Berndt Buick had waived delivery. In any event, after the close of testimony,
the trial court was forced to declare a mistrial when a juror became ill. Prior to the court's declaring a mistrial,
all parties had moved for a directed verdict in their favor. The court subsequently decided the motions
for directed verdict, ruling in favor of Berndt Buick as a matter of law. The court reasoned that because Ernst never
transferred possession of the trade-in vehicle, legal title never passed to
Berndt Buick.
Title to an automobile
is evidenced by a certificate of title issued by the Department of Motor
Vehicles pursuant to ch. 342, Stats. The statute identifies the information to be
included in an application for a certificate of title, see
§ 342.06, and the grounds the department may use to reject an application,
see § 342.11.
The statute also
includes a specific provision that identifies when transfer of ownership is
complete for purposes of owner liability to third parties. Section 342.15(3), Stats., provides, in part, that "[a]n owner who has
delivered possession of the vehicle to the transferee and has complied with
the provisions of this section requiring action by him or her is not liable as
owner for any damages thereafter resulting from operation of the
vehicle." (Emphasis added.) Section 342.15(1), Stats., provides that an owner transferring an interest in a
vehicle, except a security interest, shall execute the assignment and warranty
of title contained on the certificate of title and deliver or mail the
certificate to the transferee at the time of delivery of the vehicle. Additionally, the owner must make a written
disclosure of the vehicle's mileage to the transferee by specifying the
odometer reading and whether the reading is the actual mileage. Sections 342.15(1) and 342.155(1).
Delivery of possession
and compliance with the requirements of § 342.15, Stats., create a conclusive presumption of a change of
ownership. Bacheller v. Employers
Mut. Liab. Ins. Co., 93 Wis.2d 564, 573a, 287 N.W.2d 817, 290 N.W.2d
872, 873 (1980). The title certificate
is only evidentiary, however. Id.
at 573b-73c, 290 N.W.2d at 874. Where
the statute's requirement of endorsement and delivery of the certificate of
title has not been strictly complied with, the parties' intent and conduct
govern the question of whether ownership has been transferred. Id. at 573c, 290 N.W.2d at
874.
Essentially, the present
case presents the question of whether an automobile owner who executes an
assignment of title, thereby complying with the assignment of title requirements
of § 342.15, Stats., but who
retains possession of a motor vehicle, is relieved of liability as an owner for
damages caused while he or she retained control of the vehicle.[2] The reported cases do not provide guidance
on this question. In Bacheller,
as in other cases, the transferee had taken possession of the vehicle and was
driving it at the time of the relevant event.
Bacheller, 93 Wis.2d at 567, 287 N.W.2d at 819. See also Tesky v. Tesky,
110 Wis.2d 205, 206, 327 N.W.2d 706, 706-07, (1983); National
Exchange Bank v. Mann, 81 Wis.2d 352, 356, 260 N.W.2d 716, 717
(1978); Knutson v. Mueller, 68 Wis.2d 199, 202-03, 228
N.W.2d 342, 344 (1975); Loewenhagen v. Integrity Mut. Ins. Co.,
164 Wis.2d 82, 86, 473 N.W.2d 574, 575 (Ct. App. 1991). Thus, we are presented with the need to
determine whether the first prong of the dual requirements of § 342.15(3),
can be ignored when the second prong is satisfied.
The construction of a
statute presents a question of law. De Bruin
v. State, 140 Wis.2d 631, 635, 412 N.W.2d 130, 131 (Ct. App.
1987). Statutory analysis begins with
an examination of the language of the statute to determine whether the language
is clear or ambiguous. Id. Where the language is clear and has a plain
meaning, no construction is permitted; a court must give effect to the plain
meaning. City of Milwaukee v.
Lindner, 98 Wis.2d 624, 632, 297 N.W.2d 828, 832 (1980). We keep in mind, however, that we construe
statutes to reach a common sense meaning and to avoid unreasonable or absurd
results. State v. Britzke,
108 Wis.2d 675, 681, 324 N.W.2d 289, 291 (Ct. App. 1982), aff'd, 110
Wis.2d 728, 329 N.W.2d 207 (1983).
The language of
§ 342.15(3), Stats., is
plain. For transfer of ownership to be
complete for purposes of tort liability, both the transfer of possession of the
vehicle and execution of the documents transferring title must have
occurred. Execution of the transferring
documents alone does not satisfy the statute.
Therefore, we reject the contention that delivery of possession of the
trade-in vehicle was not necessary to transfer ownership for purposes of
third-party liability.
Bacheller
holds, however, that the second prong of § 342.15(e), Stats., (execution and delivery of
assignment of title) is not sacrosanct and may be replaced by evidence of
intent and conduct. Ernst's Estate,
American Standard, and the Thorntons argue that the requirement of the transfer
of possession can occur constructively or it can be waived by the
transferee. Ernst's Estate and
American Standard suggests that the present case is comparable to the situation
where a customer uses one of several "loaner" vehicles owned by
Berndt Buick.
The possession component
of § 342.15(3), Stats., focuses
on the transferor: the language is "[a]n owner who has delivered
possession of the vehicle ...."
The obvious purpose of the requirement for transfer of possession is the
termination of the transferor's control over the vehicle. Once the transferee accepts control of the
vehicle, the transferee may, as an exercise of that control, grant other
parties, including the transferor, permission to use the vehicle. First, however, transfer of control of the
vehicle must have been offered and accepted.
In the present case, a
question of material fact exists concerning when Ernst was to transfer
possession of the trade-in vehicle. The
transfer of the trade-in vehicle was part of the purchase of the Buick, but the
Buick was not available for delivery when the contract and assignment of the
certificate of title were signed.
Micale had to return the car to Berndt Buick for
"finishing." Delivery was
planned for later the same day. A buyer
usually accepts delivery of a newly purchased car and surrenders a trade-in
vehicle at the same time. Micale's
testimony concerning completion of the odometer disclosure form supports a
reasonable inference that the transfer of possession of the trade-in vehicle
was to occur later when the purchase transaction was completed. Micale's expectation that Ernst would drive
the trade-in vehicle until then, whether expressed or unexpressed, is
consistent with this inference. On the
other hand, Gilpatrick's testimony that Micale asked Ernst to complete the
title assignment and told Ernst he could use the trade-in vehicle arguably
supports an inference that an immediate transfer of possession of the trade-in
vehicle was contemplated, thereby making Ernst a permissive driver of Berndt
Buick. Because a question of material
fact exists, we must reverse the order and the judgment and remand the case for
a new trial.
By the Court.—Order
and judgment reversed and cause remanded.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.
[1] Berndt Buick argues that after the need for a mistrial became known, all parties stipulated to the facts, thus allowing the trial court to decide the issue of ownership as a matter of law. Our review of the record convinces us that Ernst's Estate and American Standard did not stipulate to the facts and they did not waive their right to have the case retried if a question of fact remained.