In Smith, Smith's policy with Atlantic Mutual contained, substantively, the same definition of underinsured motor vehicle as Link's policy.Summary of this case from Link v. General Cas. Co. of Wisconsin
Nos. 130, 131.
Argued November 28, 1972. —
Decided January 3, 1973.
APPEALS from judgments of the circuit court for Outagamie county: ANDREW W. PARNELL, Circuit Judge. Affirmed.
For the appellants there was a brief by Fulton, Menn Nehs, Ltd., attorneys, and Peter S. Nelson of counsel, all of Appleton, for Francis Czarnecki, Daniel Limpert, Jr., Daniel Limpert, Sr., and Mary Ann Limpert; and by Byrne, Bubolz, Spanagel Pfankuch, all of Appleton, attorneys for Home Mutual Insurance Company and Harriet A. Bekkers; and Dempsey, Dempsey, Magnusen Williamson, all of Oshkosh, attorneys for Allstate Insurance Company and Francis Czarnecki; and Edgar E. Becker of Appleton, attorney for Robert J. Smith; and Bollenbeck, Patterson, Froehlich, Jensen Wylie, all of Appleton, attorneys for Harriet A. Bekkers; and oral argument by Mr. Nelson.
For the respondent American Family Mutual Insurance Company there was a brief by Bradford Gabert of Appleton and oral argument by Stanley R. Gabert.
These cases deal with the insurance liability coverage a parent as a statutory's driver's license sponsor of his seventeen-year-old son who was involved in an automobile accident as a driver of his own car which was not described in the parent's policy.
On March 26, 1969, three automobiles were involved in an accident on East Wisconsin Avenue in the city of Appleton, Wisconsin. One vehicle was driven by Francis Czarnecki who is insured by Allstate Insurance Company. The second vehicle was driven by Harriet A. Bekkers and insured by Home Mutual Insurance Company. The third vehicle was driven by Gregory W. Smith who was then the seventeen-year-old son of Robert J. Smith and a resident of his father's household. Daniel Limpert, Jr., was a passenger in Smith's car. Gregory Smith was driving a 1963 Chevrolet, a vehicle owned by Gregory and insured by American Standard Insurance Company of Wisconsin.
At the time of the accident Robert J. Smith was Gregory's license sponsor under sec. 343.15, Stats., because of the latter's age. Robert J. Smith has his own separate policy of auto insurance on a 1966 Buick insured by American Family Mutual Insurance Company. The Buick was not involved in the accident; and the Chevrolet was not described in the American Family policy.
Limpert and Czarnecki each commenced separate actions against Robert J. Smith, Harriet A. Bekkers, Home Mutual, American Standard and American Family. Thereafter Czarnecki and Allstate were impleaded as third-party defendants in the Limpert action.
American Family moved for summary judgment in both actions. In support of its motion, American Family maintained that, notwithstanding its insured Robert J. Smith's statutory imputed negligence under sec. 343.15 (2), Stats., the policy covering the 1966 Buick does not apply to any other automobile owned by the named insured or any relatives' automobile not described in the declaration of its policy. In opposition the appellants contend that since the liability of Robert J. Smith as sponsor of Gregory is imposed by law pursuant to sec. 343.15 (2), and such liability is not dependent upon which car is being used, that American Family as insurer of Robert J. Smith is also liable. The court granted American Family's motions and entered judgments which dismissed the complaints as to American Family. All of the other parties except American Standard appeal.
The pertinent parts of respondent-American Family's policy provides:
"PART I — LIABILITY
"COVERAGES A B
"Coverage A — Bodily Injury Liability
"Coverage B Property Damage Liability
"To pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of:
"A. bodily injury, sickness or disease, including death resulting therefrom, hereinafter called `bodily injury,' sustained by any person;
"B. injury to or destruction of property, including loss of use thereof, hereinafter called `property damage;'
arising out of the ownership, maintenance or use of the owned automobile or any non-owned automobile, . . .
". . .
"The following are insureds under Part I:
"a. With respect to the owned automobile,
"(1) the named insured and any resident of the same household,
"(2) any other person using such automobile, provided the actual use thereof is with the permission of the named insured;
"b. With respect to a non-owned automobile,
"(1) the named insured,
"(2) any relative, but only with respect to a private passenger automobile or trailer not regularly furnished for the use of such relative;
"c. Any other person or organization legally responsible for the use of
"(1) an automobile or trailer not owned or hired by such person or organization, or
"(2) a temporary substitute automobile, provided the actual use thereof is by a person who is an insured under (a) or (b) above with respect to such automobile or trailer.
"The insurance afforded under Part I applies separately to each insured against whom claim is made or suit is brought, but the inclusion herein of more than one insured shall not operate to increase the limits of the company's liability.
"DEFINITIONS UNDER PART I
"`named insured' means the individual named in Item 1 of the declarations and also includes his spouse, if a resident of the same household;
"`insured' means a person or organization described under `Persons Insured;'
"`relative' means a relative of the named insured who is a resident of the same household;
"`owned automobile' means a private passenger or utility automobile or trailer owned by the named insured, and includes a temporary substitute automobile;
". . .
"`non-owned automobile' means an automobile or trailer not owned by a named insured or any resident of the same household, . . .
". . .
"Unless otherwise noted, the conditions apply to all coverages.
". . .
"4. Two or More Automobiles
". . .
"Except with respect to a temporary substitute automobile or to bodily injury under Part II resulting from the named insured or any relative thereof being struck by an automobile, and except as provided in Condition 2, this policy does not apply to any automobile owned by the named insured or any relative, or, with respect to Part III, a trailer, not described in the declarations of this policy."
Sec. 343.15 (2), Stats., provides:
"Any negligence or wilful misconduct of a person under the age of 18 years when operating a motor vehicle upon the highways is imputed to the person who signed the application for such person's license. The person who so signed is jointly and severally liable with such operator for any damages caused by such negligent or wilful misconduct."
Does the insurance policy issued to a father who sponsored his son's driver's license include coverage for the father's imputed negligence and liability resulting from the son's negligence in operating the son's own car?
The policy in question provides, on behalf of the named insured, coverage for all sums which the insured shall become legally obligated to pay as damages because of bodily injury or property damage which arises out of the ownership, maintenance or use of the owned automobile or any nonowned automobile. Gregory's 1963 Chevrolet is not an owned automobile and is not included as a nonowned automobile within the meaning of this policy. An owned automobile is defined as a private passenger automobile owned by the named insured. The named insured is Robert J. Smith and the owned automobile insured is the 1966 Buick. A nonowned automobile is defined as an automobile not owned by the named insured or any resident of the same household. Gregory's 1963 Chevrolet is excluded as a nonowned automobile because Gregory owns the Chevrolet, is Robert's son which makes him a relative, and a resident of the same household. Therefore neither Gregory nor his car were insured under Part I, Coverages A and B of the American Family policy. This is because the car he operated when the accident occurred was a car owned by a resident of the same household and not described in the policy. Therefore the car that Gregory owned was excluded from the "drive other cars" liability provisions of the policy.
A relative is defined as a relative of the named insured who is a resident of the same household.
Neither the affidavit nor the complaints specifically alleged that Gregory was a resident in the household of his father, but from the record it is reasonable to presume or infer that he did reside there at the time of the accident. Further, respondent insurance company does not deny such residence nor does it offer any evidence to the contrary in its brief. The trial court was also aware of this fact and specifically made the presumption of residence.
The purpose of defining and limiting the meaning of these terms with respect to these coverage provisions in the automobile liability policies (which terms exclude liability arising out of the use of another automobile owned by or regularly used by a member of an insured's household) is to avoid coverage for several vehicles owned by members of the same family who, by their close relationship, might be expected to use each other's cars without hindrance and with or without permission. Without this limitation a person could purchase just one policy on only one automobile and thereby secure coverage for all the other vehicles he may own or vehicles the members of his family own while residents of the same household. National Farmers Union Property Casualty Co. v. Maca (1965), 26 Wis.2d 399, 405, 132 N.W.2d 517; Giese v. Karstedt (1966), 30 Wis.2d 630, 637, 141 N.W.2d 886; and McDonald v. Aetna Casualty Surety Co. (1970), 47 Wis.2d 235, 177 N.W.2d 101. There is no doubt that a car owner can insure all of the automobiles he owns, but he cannot do so under a policy describing only one such automobile and omitting all others owned by him or by household relatives. McDonald v. Aetna Casualty Surety Co., supra.
Appellants next contend that since Part I — Liability, Persons Insured c., states that any other person legally responsible for the use of an automobile not owned by such person is an insured under Part I, Coverages A and B — such definition thereby provides coverage in the instant case. The appellants reason that since the liability of Robert J. Smith as a sponsor of Gregory is imposed by law under sec. 343.15 (2), Stats., and not dependent on which car is being used, Robert J. Smith is thereby a person legally responsible for his son's use of an automobile not owned by him within the policy. This particular provision standing alone would indicate that such coverage does exist. However, this court has consistently held that in construing a particular provision in an insurance policy, other provisions, and in fact the entire policy, should be considered to ascertain the true intent of the parties and the policy's coverage. Leatherman v. American Family Mut. Ins. Co. (1971), 52 Wis.2d 644, 190 N.W.2d 904, and Tischendorf v. Lynn Mut. Fire Ins. Co. (1926), 190 Wis. 33, 208 N.W. 917. In this case, Part I — Liability — coverage under A and B is still limited to only owned and nonowned automobiles. So a person insured under "Persons Insured c" is also thereby limited by the scope of coverage provisions A and B. The words "not owned" under "Persons Insured c." do not broaden coverage because these are the exact words which help to define a nonowned automobile — that is, "nonowned" means an automobile "not owned" by the named insured or any resident of the same household. Further, paragraph 2 of Condition 4 of the policy, supra, specifically states that the policy does not apply to any automobile owned by the named insured or any relative not described in the declaration of this policy. The only automobile described in the policy's declaration is the 1966 Buick — not the 1963 Chevrolet owned by the named insured's son. The policy also specifically provides that the conditions in paragraph 2 of Condition 4 applies to all coverages in American Family's policy. Therefore the policy construed as a whole excludes coverage for the father as his son's sponsor under the facts of this case.
The appellants argue that the policy must be strictly construed against the insurer because the coverage provisions as opposed to the exclusion provisions are ambiguous and that public policy favors automobile coverage for the protection of the public. The policy in question is clear and unambiguous, therefore the rule of strict construction against insurers is not applicable. Leatherman v. American Family Mut. Ins. Co., supra, and Tischendorf v. Lynn Mut. Fire Ins. Co., supra. The policy specifically defines what automobiles are covered, what persons are insured, and what coverage is provided for. Plus, paragraph 2 of Condition 4 specifically excludes the policy's coverage to an automobile owned by the named insured or any relative not described in the declaration of the policy. The intent of this language is clear and plain on its face and its purpose is to avoid the same types of multiple coverage. Additionally, when the terms of a policy are plain on their face, such policy should not be rewritten by construction to bind an insurer to a risk which it did not contemplate, or a risk it was unwilling to cover, and for which it was not paid. Amidzich v. Charter Oak Fire Ins. Co. (1969), 44 Wis.2d 45, 170 N.W.2d 813, citing Inter-Insurance Exchange v. Westchester Fire Ins. Co. (1964), 25 Wis.2d 100, 104, 130 N.W.2d 185, and Lontkowski v. Ignarski (1959), 6 Wis.2d 561, 95 N.W.2d 230. Therefore, the appellants should not be able to resort to the rules of construction for the purpose of modifying the contract or creating a new contract to provide coverage when the policy's provisions are clear and unambiguous. Amidzich v. Charter Oak Fire Ins. Co., supra, and Pyykola v. Woody (1971), 52 Wis.2d 342, 190 N.W.2d 534.
To prevent a person from insuring all of his cars or all the cars in one household by taking out just one policy describing one car and paying only one premium.
The appellants cite several cases, especially Pecoraro v. Galvin (La.App. 1971), 243 So.2d 307, to support their contention that an insurance company should not be able to avoid liability under the sponsorship statute unless by an express exclusion inserted in the policy for that purpose. Pecoraro and the other cases do not stand for this proposition. The cases cited are also distinguishable from the one before us in respect to the persons insured, the automobiles involved, and the terms and conditions of the policy's coverage. To adopt appellants' contention would do violence to this court's approval of the basic purpose of the "drive other car" provisions which exclude liability coverage arising out of other automobiles owned or regularly used by members of the named insured's household. McDonald v. Aetna Casualty Surety Co., supra. The statutory liability of the father for the son's negligence under sec. 343.15 (2) should not alter the applicability of the exclusion clause to the fact situation at bar. The son did have a policy which provided coverage in the amounts required for statutory public liability. If the father had sought to protect himself for any additional liability he could sustain under the sponsorship statute, he, in all probability, could have purchased an insurance policy to cover it. The obligation of the insurer in this case is spelled out and should be controlled by the terms of the automobile liability policy it issued. McDonald v. Aetna Casualty Surety Co., supra, pages 240, 241. Under the terms of that contract there is no coverage.
By the Court. — Judgments affirmed.