In Home Mut. Ins. Co. v. INA, 20 Wis.2d 48, 51, 121 N.W.2d 275, 277 (1963), our supreme court held that a similar policy provision was not ambiguous. It addressed the meaning of "all operations necessary or incidental thereto" in a garage policy providing liability coverage for the "ownership, maintenance or use of the premises for the purpose of an automobile repair shop, service station, storage garage or public parking place and all other operations necessary or incidental thereto."Summary of this case from Henry v. General Cas. Co.
April 3, 1963 —
April 30, 1963.
APPEAL from a judgment of the circuit court for Portage county: HERBERT A. BUNDE, Circuit Judge. Affirmed.
For the appellant there was a brief by Byrne, Bubolz Spanagel, attorneys, and William S. Pfankuch of counsel, all of Appleton, and oral argument by Mr. Pfankuch.
For the respondent there was a brief by Peickert, Anderson Fisher, attorneys, and John E. Shannon, Jr., and Gerald M. O'Brien of counsel, all of Stevens Point, and oral argument by Hiram D. Anderson, Jr.
The facts were stipulated to by the respective parties.
One Thomas Schultz is the owner of two service stations in the city of Stevens Point. One station is called "Schultz's Super Service," which distributes products of the Phillips Oil Company. The other station is known as "Schultz's Texaco Service." Both of these stations are located in the same block but on opposite sides of the street, some 400 feet apart. The Texaco station is equipped for automobile repair work, while Super Service is not. Therefore, any repair work that the Super Service station would be asked to perform would thereupon be turned over to the Texaco station for service.
The plaintiff-appellant in this action, Home Mutual Insurance (hereinafter "Home Mutual") insured the Super Service station under a so-called standard garage liability insurance policy. The defendant-respondent Insurance Company of North America (hereinafter "I.N.A.") was the insurer of Schultz's Texaco station under the same type of liability policy.
On August 18, 1955, one Gloria Skarupinski, and her mother, Josephine, drove into the Super Service station to purchase gas. At this time the person in charge of the station, an employee of Super Service named George Pulchinski, noticed that the gas line of Gloria's auto was in need of repair. At her request, the car was left at Super Service station to be repaired while she and her mother went shopping. As was customary in the operation of the station, the car was then taken over to the Texaco station to have the necessary work performed. Gloria and her mother returned to the Super Service station and found that the work had not been completed. Mr. Pulchinski then suggested that she leave the car at the Texaco station and that he would have someone drive them home. They agreed and, since he was all alone at Super Service, Mr. Pulchinski then called one Frank Suchon at the Texaco station and requested that he come over to the Super Service station to drive Gloria and her mother home as no one was available at the Super Service station to do so. Mr. Suchon thereupon left his work at Texaco and went over to the Super Service station. Suchon, driving Pulchinski's auto, started the vehicle, but before Gloria had entered the car, it suddenly moved forward and Gloria was severely injured.
Home Mutual, as the insurer of Super Service, paid Gloria $9,500 for her injuries. Home Mutual then commenced this action against I.N.A. for a proration of the settlement on the theory that I.N.A., being the liability insurer of the Texaco station, and Mr. Suchon being an additional insured under that policy, was liable in whole or part for the damages to the injured party, and on the basis of the proration provisions of the Home Mutual policy which provided as follows under paragraph 15 of Conditions:
"If the insured has other insurance against a loss covered by this policy the company shall not be liable under this policy for a greater proportion of such loss than the applicable limit of liability stated in the declarations bears to the total applicable limit of liability of all valid and collectible insurance against such loss."
The two businesses, although owned by the same person, were operated separately; each had its own bookkeeping system and each had its separate employees. However, even though each station had its separate employees, an employee of one station would, if requested, work at the other station. The employees of the two stations were instructed by Mr. Schultz to do so if time permitted, but such an event occurred infrequently. After trial to the court, it concluded that I.N.A. was not liable as the insurer of the Texaco station and judgment was entered dismissing plaintiff's complaint.
The sole issue in this case is whether the negligent acts of Frank Suchon, a Texaco station employee, even though occurring on the premises of Super Service, were "incidental to" or "in connection with" the operation of the Texaco station, bringing the mishap within the hazards covered by the I.N.A. policy as described in its policy as follows:
"The ownership, maintenance or use of the premises for the purpose of an automobile repair shop, service station, storage garage, or public parking place, and all operations necessary or incidental thereto; and the use in connection with the above-defined operations of any automobile not owned or hired by the named insured, a partner therein or a member of the household of any such person." (Emphasis added.)
The Home Mutual policy contained an identical provision.
Both parties contend, and we agree, that this is a case of first impression in Wisconsin.
The whole controversy involves an interpretation of the quoted language used in the I.N.A. policy. The established rule, of course, is that in interpreting and construing an insurance contract (in fact, all contracts), the objective should be to ascertain the true intention of the parties. Aero Motive Sales Corp. v. Wausau Motor Parts Co. (1950), 256 Wis. 586, 42 N.W.2d 141; Siler v. Read Investment Co. (1956), 273 Wis. 255, 77 N.W.2d 504. A subordinate ruling is that in ascertaining the intention of the parties, a practical construction is most persuasive. Taylor v. Hill (1893), 86 Wis. 99, 56 N.W. 738; Carlson v. Scandia Life Ins. Co. (1919), 170 Wis. 342, 174 N.W. 896; Prudential Ins. Co. v. Paris Mut. Fire Ins. Co. (1933), 213 Wis. 63, 250 N.W. 851. Each of the policies here contains the same provision actually defining the word "premises" so as to limit that word to the actual filling station and the ways immediately adjoining. Both of the policies also extend coverage to "operations necessary or incidental thereto" (meaning operations necessary or incidental to the business designated).
There have been no cases holding the type of operation here to be "incidental to" the operation of the Texaco station as distinguished from the Super Service station. Counsel for Home Mutual relies on four non-Wisconsin cases, all of which clearly involve an operation "incidental to" the conduct of a garage business. In each case there is a very positive relationship between the third-party customer and the garage and it is very obvious that the service being rendered is as a result of a direct contract made between the customer and the garage. Thus in General Finance Co. v. Pennsylvania Threshermen Farmers' Mut. Casualty Ins. Co. (1944), 348 Pa. 358, 35 A.2d 409, an independent contractor was hired by the plaintiff to go and pick up a repossessed automobile in another city and while en route there was an accident. The court held that the activity of repossessing automobiles was incidental to the primary business of the insured and that therefore there was coverage. In Lloyds Casualty Insurer v. McCrary (1950), 149 Tex. 172, 229 S.W.2d 605, an accident occurred when the insured appliance company was in the process, off the premises, of installing an appliance in the home of a customer who had purchased the appliance. Again the court held that this was incidental to the main activity of the company, even though the accident did not take place on its actual premises. In Arditi v. Massachusetts Bonding Ins. Co. (Mo. 1958), 315 S.W.2d 736, coverage was ruled where an insured had repaired a truck and was involved in an accident on the way to deliver the truck to the customer. Finally, in Kalamazoo Auto Sales Co. v. Travelers Ins. Co. (1924), 227 Mich. 74, 198 N.W. 579, an automobile sales agency operated a motorboat for the purposes of entertaining its customers. There was an accident on the lake while such entertainment was in process and again the court ruled that this was incidental and necessary to the conduct of the automobile sales agency.
In the instant case there is no such fact situation. At no time was there any direct agreement between the customer and anybody at the Texaco station. The customer did not make any request that the Texaco station actually make the repairs, nor did the customer request that the Texaco people arrange for a ride home. In the end the internal arrangement as between the two service stations was such that the repair work was farmed out to Texaco and on the informal exchange of personnel, a Texaco man actually ended up driving the car home. It cannot be said to be a practical construction of the I.N.A. contract to extend coverage to each and every act of negligence on the part of a Texaco employee who happened to be used for the moment by the Super Service station to actually perform a responsibility that the customer looked upon as the responsibility of the Super Service station.
Some consideration has to be given to the fact that Mr. Schultz in this case definitely had two separate policies for the two separate premises. In the case of Hardware Mut. Casualty Co. v. Hartford Accident Indemnity Co. (1959), 6 Wis.2d 457, 95 N.W.2d 215, a young boy fell into a pile of hot ashes on the high-school premises in Stevens Point. Hartford insured the schools and attempted to involve Hardware Mutual, which insured the city of Stevens Point generally. The court ruled against this assertion on the grounds that the two policies did not overlap, and that there was no intention for the city policy to insure the schools. Similarly, in the instant case it would take quite a stretching of the policies to say that the company and the insured intended to include in the coverage of the Texaco station any even remote operation that would involve an employee of the Texaco station but which would not really involve an activity or operation of the Texaco station itself.
Black's Law Dictionary (4th ed.), defines "incidental" as "depending upon or appertaining to something else as primary; . . . something incidental to the main purpose."
A practical construction of the provisions of the I.N.A. policy requires a more-direct relationship between the customer and the Texaco activities. If the facts in this case were different in that the original arrangements for the repair of the car were made directly between the customer and the Texaco station, or if at the end of the day the ride home was directly requested by the customer of the Texaco people and they agreed to furnish it, then in either case there would be the type of direct relationship which would make the Texaco activity one that is really incidental to its operations. Since neither of these factors is present here, it is not an unfair construction of the I.N.A. policy, nor is it inequitable to hold that the only coverage available is under the Home Mutual policy.
Such a construction with such a result can fairly be said to represent the actual intentions of the parties and to really make sense out of the issuance of separate policies by separate companies covering the two separate premises and operations incidental thereto.
By the Court. — Judgment affirmed.
CURRIE, J., dissents.