From Casetext: Smarter Legal Research

MillerCoors LLC v. Millis Transfer Inc.

STATE OF WISCONSIN IN COURT OF APPEALS DISTRICT III
Feb 1, 2017
Appeal No. 2015AP1894 (Wis. Ct. App. Feb. 1, 2017)

Opinion

Appeal No. 2015AP1894

02-01-2017

MILLERCOORS LLC, PLAINTIFF-RESPONDENT-CROSS-APPELLANT, v. MILLIS TRANSFER INC. AND ZURICH AMERICAN INSURANCE COMPANY, DEFENDANTS-APPELLANTS-CROSS-RESPONDENTS.


NOTICE

This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See WIS. STAT. § 808.10 and RULE 809.62.

Cir. Ct. No. 2013CV1021

APPEAL and CROSS-APPEAL from a judgment of the circuit court for Brown County: DONALD R. ZUIDMULDER, Judge. Affirmed. Before Stark, P.J., Hruz and Seidl, JJ.

¶1 PER CURIAM. Millis Transfer, Inc. (Millis) and its insurer, Zurich American Insurance Company (Zurich), appeal a summary judgment awarding money damages in favor of MillerCoors, LLC (MillerCoors). Millis and Zurich argue the circuit court erred in determining Millis breached its contractual duty to MillerCoors by failing to defend and indemnify MillerCoors in a negligence suit brought by one of Millis's employees. MillerCoors cross-appeals seeking additional damages. We affirm.

BACKGROUND

¶2 Millis provides transportation and related services to its customers. MillerCoors brews, packages, and markets beer for sale to independent distributors. Millis and another entity, Schneider Logistics, Inc., entered into a Master Transportation Services Agreement and a Transportation Schedule, whereby Millis agreed to transport MillerCoors's product to various locations.

Although the Master Transportation Services Agreement is between Millis and Schneider Logistics, Inc., the agreement also encompasses Schneider Logistics, Inc.'s customers. There is no dispute that MillerCoors is Schneider Logistics, Inc.'s customer and, therefore, is an indemnitee under the agreement.

¶3 While transporting MillerCoors's product in 2008, a Millis employee was injured in a single-vehicle accident. The employee filed suit against Millis and MillerCoors, alleging that negligence by each caused the injuries. Pursuant to an indemnification provision in the Master Transportation Services Agreement, MillerCoors tendered its defense to Millis multiple times; however, Millis refused to defend MillerCoors. Eventually, MillerCoors reached a $200,000 settlement with the injured employee. Millis contributed $50,000 toward that settlement amount.

Millis's $50,000 settlement contribution was separate from what it paid the employee under the Worker's Compensation Act.

¶4 MillerCoors then filed this lawsuit, asserting that Millis had breached the indemnification provision by failing to defend and indemnify MillerCoors with regard to the Millis employee's lawsuit. Millis filed a counterclaim for the $50,000 it contributed toward the settlement. The circuit court denied the parties' cross-motions for summary judgment, concluding it could not determine whether Millis or MillerCoors was entitled to recovery without a fact-finder first determining whether the Millis employee's injuries were caused by either Millis's or MillerCoors's alleged negligence and, if so, apportioning liability between the parties.

¶5 The parties then entered into two stipulations under which the parties agreed: (1) MillerCoors was not negligent with respect to the accident; (2) the Millis employee's injuries were not caused by MillerCoors's conduct; and (3) the reasonable defense and settlement costs incurred by MillerCoors were $825,000. Based on the parties' previous arguments and the new stipulations, the circuit court entered summary judgment against Millis and Zurich in favor of MillerCoors. Additional facts are set forth below as necessary.

DISCUSSION

¶6 Summary judgment shall be granted if there is no genuine issue as to any material fact and the moving party is entitled to a judgment as a matter of law. WIS. STAT. § 802.08(2) (2015-16). First, we examine the moving party's submissions to determine whether they constitute a prima facie case for summary judgment. Palisades Collection LLC v. Kalal , 2010 WI App 38, ¶9, 324 Wis. 2d 180, 781 N.W.2d 503 (citing Gross v. Woodman's Food Market , Inc., 2002 WI App 295, ¶30, 259 Wis. 2d 181, 655 N.W.2d 718). "If they do, then we examine the opposing party's submissions to determine whether there are material facts in dispute that entitle the opposing party to a trial." Id. (citation omitted). "We review the grant or denial of summary judgment de novo, and we apply the same standard as does the trial court." Mach v. Allison , 2003 WI App 11, ¶14, 259 Wis. 2d 686, 656 N.W.2d 766.

All references to the Wisconsin Statutes are to the 2015-16 version unless otherwise noted.

¶7 "Interpretation of an indemnification agreement, like any other written contract, begins with the language of the agreement." FABCO Equip., Inc. v. Kreilkamp Trucking , Inc., 2013 WI App 141, ¶6, 352 Wis. 2d 106, 841 N.W.2d 542 (citations omitted). "'Where the terms of a contract are clear and unambiguous, we construe the contract according to its literal terms,' and consistent with 'what a reasonable person would understand the words to mean under the circumstances.'" Id. (quoting Tufail v. Midwest Hosp., LLC , 2013 WI 62, ¶¶26, 28, 348 Wis. 2d 631, 833 N.W.2d 586). "The interpretation of a contract is a question of law which we review de novo." Borchardt v. Wilk , 156 Wis. 2d 420, 427, 456 N.W.2d 653 (Ct. App. 1990).

I. Millis and Zurich's Appeal

¶8 Millis and Zurich first argue the circuit court erred in granting summary judgment to MillerCoors because the Millis employee's negligence suit did not trigger the indemnification provision in the Master Transportation Services Agreement. That provision provided, in relevant part:

Indemnification. [Millis] agrees to indemnify, defend and hold [MillerCoors] harmless from and against any and all liabilities, damages, fines, judgments, penalties, costs, claims, demands and expenses ... of whatever type or nature, including damage or destruction of any property, or injury (including death) to any person, arising out of or related to: (i) any act or omission by [Millis], its agents, employees and/or subcontractors, including but not limited to any negligent act or omission, (ii) any claims or actions
by [Millis's] employees, agents and/or subcontractors, including but limited to any based upon negligence except to the extent such negligence is that of [MillerCoors], (iii) the failure of [Millis], its employees, agents, and/or contractors to comply with this Agreement, a Transportation Schedule, and/or any applicable provincial, federal[,] state or local law, rule or regulation that affects the obligations of [Millis] under this Agreement or Transportation Schedule, or (iv) [Millis's], or [Millis's] employees, agents and/or subcontractors, performance of this Agreement and/or any Transportation Schedule.
(Emphasis in original.) According to Millis and Zurich, the underlined portion of the indemnification provision excepted Millis and Zurich from any duty to defend or indemnify MillerCoors because the Millis employee complaint alleged that MillerCoors was negligent, causing the employee's injuries. We disagree.

¶9 In FABCO Equipment , we rejected a similar argument where the underlying negligence suit only alleged negligence against the indemnitee. See FABCO Equip ., 352 Wis. 2d 106, ¶10. We held the allegations in the complaint triggered the indemnitor's duty to defend the indemnitee, even though the complaint did not explicitly allege the indemnitor was negligent, because the allegations arguably showed that the indemnitor—through one of its employees—was in part responsible for the employee's death. See id ., ¶¶9-12. However, based on language in the indemnification agreement, we noted that the indemnitee's right to recovery against the indemnitor for the indemnitor's failure to defend was limited by the indemnitee's portion of causal negligence. See id ., ¶13.

¶10 Our holding in FABCO Equipment is consistent with the well-established principle that an indemnitor's duty to defend is broader than its duty to indemnify. See Sola Basic Ind . v. United States Fid. & Guar. Co., 90 Wis. 2d 641, 646, 280 N.W.2d 211 (1979); see also Estate of Kriefall v . Sizzler USA Franchise , Inc., 2012 WI 70, ¶¶58, 63, 342 Wis. 2d 29, 816 N.W.2d 853 (analyzing and applying similar "to the extent" language in an indemnification provision as a limitation on damages—i.e., the duty to indemnify—not as a limitation on the duty to defend).

¶11 As relevant here, the unambiguous terms of the indemnification provision required Millis to defend and indemnify MillerCoors from all claims, liabilities, and judgments that arose out of or were related to: (1) Millis's and its employees/agents' acts or omissions; and (2) claims or actions filed by Millis's employees/agents, except that Millis's duty to indemnify MillerCoors from such claims/actions was limited by MillerCoors's share of causal negligence. The Millis employee's complaint alleged: (1) he was injured while transporting MillerCoors's product for Millis; (2) his injuries were caused, in part, by his act of slamming on his brakes; and (3) both Millis and MillerCoors were negligent—and that their negligence caused his injuries.

¶12 Based on the unambiguous terms of the indemnification provision, coupled with the employee's allegations—namely, Millis's negligence and that the employee's injuries were caused, in part, by his own actions while transporting MillerCoors's product for Millis—the employee's negligence suit triggered Millis's duty to defend. See FABCO Equip ., 352 Wis. 2d 106, ¶9 (analyzing similar indemnification agreement and determining duty to defend was triggered by allegations in the complaint arguably showing that the death of indemnitor's employee was caused, in part, by the employee's actions); see also Newhouse v . Citizens Sec. Mut. Ins. Co., 176 Wis. 2d 824, 835, 501 N.W.2d 1 (1993) ("The duty to defend is triggered by the allegations contained within the four corners of the complaint." (citation omitted)). Although Millis did not have a duty to indemnify MillerCoors for MillerCoors's own negligent acts in claims or actions filed by Millis employees/agents, it did have a duty to defend MillerCoors in such actions when Millis or its employees/agents were claimed to be negligent. See FABCO Equip ., 352 Wis. 2d 106, ¶¶9-13.

¶13 Finally, Millis and Zurich argue the circuit court erred in granting summary judgment because MillerCoors is equitably estopped from seeking a purported limited and conditional defense. Specifically, because MillerCoors's defense tenders sought a "full and unconditional" defense, they argue MillerCoors is now estopped from seeking a defense limited by its share of causal negligence. Contrary to their assertions, MillerCoors does not seek a limited and conditional defense; it sought a full defense and indemnification from Millis—and still does. Furthermore, Millis's and Zurich's suggestion that an entity seeking a defense limited by its share of causal negligence necessarily seeks "a limited and conditional" defense, instead of a "full and unconditional" defense, rests upon a view that the duty to defend and the duty to indemnify are necessarily coextensive. Such a view erroneously conflates the duty to defend with the duty to indemnify. See Sola Basic Ind ., 90 Wis. 2d at 646 (noting duty to defend is broader than duty to indemnify); see also Kriefall , 342 Wis. 2d 29, ¶¶58, 63.

Millis and Zurich assert that when MillerCoors tendered its defense to Millis multiple times, MillerCoors sought a full and unconditional defense, and that the circuit court determined MillerCoors was not entitled to a full and unconditional defense. Therefore, Millis and Zurich argue, MillerCoors's tenders of defense were "invalid" and, thus, Millis's duty to defend was never triggered. In support of their argument, Millis and Zurich cite Towne Realty , Inc. v. Zurich Ins. Co., 201 Wis. 2d 260, 271, 548 N.W.2d 64 (1996), for the general proposition that "a tender of defense is a condition precedent to the creation of a duty to defend." However, they do not adequately explain how this general proposition relates to the purported difference between an indemnitee requesting a full defense, as opposed to a limited defense. Therefore, we decline to address this argument further. See State v . Pettit , 171 Wis. 2d 627, 646-47, 492 N.W.2d 633 (Ct. App. 1992). --------

II. MillerCoors's Cross-Appeal

¶14 MillerCoors cross-appeals the circuit court's summary judgment entered in its favor against Millis and Zurich. Although the court granted MillerCoors summary judgment based on the parties' stipulations and arguments, MillerCoors argues the court erred in denying its initial motion for summary judgment filed prior to the parties' stipulations. Specifically, MillerCoors argues it is entitled to recover the reasonable defense and settlement costs it incurred in the suit brought by the Millis employee, which it calculates to be $890,399.81, rather than the $825,000 originally stipulated. Additionally, because MillerCoors is the prevailing party in its cross-appeal against Millis and Zurich, it argues that under the Master Transportation Services Agreement it is entitled to recover the costs and reasonable attorney fees it incurred in litigating this suit, which it calculates to be $92,029.24. We are unpersuaded by MillerCoors's arguments.

¶15 After the circuit court denied the parties' initial motions for summary judgment, the parties entered into two stipulations. As part of the stipulations, MillerCoors agreed that the reasonable defense and settlement costs it incurred in the suit brought by the Millis employee were $825,000. Given that stipulation, MillerCoors is unable to argue now that it is entitled to recover $890,399.81—$65,399.81 more than the court awarded it pursuant to the parties' stipulations. See WIS. STAT. § 807.05; see also GMAC Mortg . Corp. v. Gisvold , 215 Wis. 2d 459, 470, 572 N.W.2d 466 (1998) (holding that written stipulation signed by the parties and approved by the court is binding on the parties).

¶16 The stipulations also demonstrate MillerCoors agreed that the prevailing party in this suit would not be entitled to the costs and reasonable attorney fees incurred in litigating this suit under the Master Transportation Services Agreement. Given this stipulation, MillerCoors is unable to argue now that it is entitled to recover $92,029.24 in reasonable defense and settlement costs in litigating this suit against Millis and Zurich. See WIS. STAT. § 807.05; see also GMAC Mortg . Corp., 215 Wis. 2d at 470.

¶17 No WIS. STAT. RULE 809.25(1) costs awarded to either party on appeal.

By the Court.—Judgment affirmed.

This opinion will not be published. See WIS. STAT. RULE 809.23(1)(b)5.


Summaries of

MillerCoors LLC v. Millis Transfer Inc.

STATE OF WISCONSIN IN COURT OF APPEALS DISTRICT III
Feb 1, 2017
Appeal No. 2015AP1894 (Wis. Ct. App. Feb. 1, 2017)
Case details for

MillerCoors LLC v. Millis Transfer Inc.

Case Details

Full title:MILLERCOORS LLC, PLAINTIFF-RESPONDENT-CROSS-APPELLANT, v. MILLIS TRANSFER…

Court:STATE OF WISCONSIN IN COURT OF APPEALS DISTRICT III

Date published: Feb 1, 2017

Citations

Appeal No. 2015AP1894 (Wis. Ct. App. Feb. 1, 2017)