2009 WI App 32
court of appeals of
published opinion
Case No.: |
2007AP2943 |
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Complete Title of Case: |
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Diane Sass,
Plaintiff-Appellant, Aurora Health Care, Inc.,
Subrogated-Plaintiff, v. Acuity, A Mutual Insurance Company,
Defendant-Respondent. |
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Opinion Filed: |
February 25, 2009 |
Submitted on Briefs: |
September 19, 2008 |
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JUDGES: |
Brown, C.J., |
Concurred: |
Brown, C.J. |
Dissented: |
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Appellant |
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ATTORNEYS: |
On behalf of the plaintiff-appellant, the cause was
submitted on the briefs of Michael I. Tarnoff of Warshafsky, Rotter, |
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Respondent |
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ATTORNEYS: |
On behalf of the defendant-respondent, the cause was
submitted on the brief of Arthur P. Simpson and Christine M. Rice of |
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2009 WI App 32
COURT OF APPEALS DECISION DATED AND FILED February 25, 2009 David
R. Schanker Clerk of Court of Appeals |
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NOTICE |
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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. |
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Appeal No. |
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STATE OF |
IN COURT OF APPEALS |
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Diane Sass,
Plaintiff-Appellant, Aurora Health Care, Inc.,
Subrogated-Plaintiff, v. Acuity, A Mutual Insurance Company,
Defendant-Respondent. |
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APPEAL
from a judgment of the circuit court for
Before Brown, C.J.,
¶1
¶2 The facts are not in dispute and are succinct; there was no
testimony taken, and the trial court’s decision was based on the pleadings and
the insurance policy. On April 1, 2006,
in
¶3 At the time of the accident, Johnson carried both an automobile liability policy and a homeowner’s insurance policy with Acuity. Sass sought recovery under both policies. With regard to the homeowner’s policy, Sass moved for a declaratory judgment that Acuity provide coverage because of the attached watercraft liability endorsement. First, Sass alleged that Johnson was negligent in the manner in which he loaded his boat onto the trailer and that her injuries resulted from the negligence of Johnson in the ownership, maintenance, use and loading of his watercraft. Second, she alleged that the homeowner’s insurance policy is contextually ambiguous in that a reasonable person would conclude that the policy provided coverage for Johnson’s negligence in failing to properly secure the boat onto his vehicle trailer. Acuity acknowledged coverage under the automobile liability policy and paid the policy limit to Sass. It denied coverage under the homeowner’s policy. Acuity moved for summary judgment. The trial court held there was no coverage under the homeowner’s policy and granted Acuity’s motion for summary judgment. Sass appeals.
¶4 Our review of a grant of summary judgment is de novo. Summary judgment methodology is well understood
and will not be repeated here except to note that it is appropriate when there
are no genuine issues of material fact and one party is entitled to a judgment
as a matter of law.
¶5 Insurance policy interpretation requires a three-step
process. American Family Mut. Ins. Co. v.
American Girl, Inc., 2004 WI 2, ¶24, 268
¶6 If, however, policy language is reasonably susceptible of
more than one construction, it is ambiguous.
Varda v. Acuity, 2005 WI App 167, ¶8, 284
¶7 We begin with the language of the homeowner’s insurance policy in effect at the time of the accident. This policy provides in pertinent part:
COVERAGE —PERSONAL LIABILITY
If a claim is made or a suit is brought against an insured for damages because of bodily injury or property damage caused by an occurrence which this coverage applies, we will:
1. Pay up to our limit of liability for damages for which the insured is legally liable….
¶8 The policy excludes coverage for the following relevant exclusions:
1.
Coverage E—Personal
Liability and Coverage F—Medical Payments to Others do not apply to bodily
injury or property damage:
.…
(e) Arising out of:
(1) The ownership, maintenance, use, loading or unloading of motor vehicles or all other motorized land conveyances, including trailers, owned or operated by or rented or loaned to an insured….
(f) Arising out of:
(1) The ownership, maintenance, use, loading or unloading of a watercraft described below….
.…
This exclusion does not apply while the watercraft is stored.
¶9 The policy has an “Additional Forms Information” section which attaches a “Watercraft Liability” form to the policy. An additional premium was paid for this coverage and it provides, in pertinent part:
The following form is attached to this policy:
SF-356 (8-02) WATERCRAFT LIABILITY
For an additional premium, Coverage E—Personal Liability and Coverage F—Medical Payments to Others Apply to BODILY INJURY or PROPERTY DAMAGE Arising out of:
a. The ownership, maintenance, use, loading or unloading of a watercraft described below….
All other provisions of this policy apply.
¶10 It is undisputed that Acuity’s homeowner’s policy makes an initial grant of coverage for Sass’s bodily injury claim under the “Coverage E—Personal Liability” provision. It is also undisputed that the policy contains a motor vehicle exclusion—“Coverage E—Personal Liability and Coverage F—Medical Payments to Others do not apply to bodily injury or property damage”—which excludes from the initial grant of coverage, coverage for: bodily injury to others arising out of the insured’s “ownership, maintenance, use, loading or unloading of motor vehicles or all other motorized land conveyances, including trailers, owned or operated by or rented or loaned to an insured.”
¶11 Sass rests her argument for coverage on the separate “Watercraft Liability” endorsement that Johnson carried under his Acuity homeowner’s policy. Sass argues that the watercraft coverage includes the causal negligence of Acuity’s insured, in the manner in which the boat in question was loaded onto the insured’s trailer, resulting in the injuries sustained by Sass.
¶12 Specifically, Sass argues the following: first, that the watercraft coverage, for which Johnson paid an additional premium, applies to the accident because the accident arose out of the “use” of Johnson’s boat; second, that the watercraft coverage applies to the accident because the accident arose out of the “loading or unloading” of Johnson’s boat; third, that an insured would have a reasonable expectation that his coverage would include injuries caused by his negligent loading of his boat; and fourth, that Acuity’s reliance on the words “[a]ll other provisions of this policy apply” as an exclusion from coverage is not valid, because the phrase is both vague and contextually ambiguous.
¶13 The parties acknowledge that
¶14 In Vann v. United Farm Family Mutual Insurance Co., 790 N.E.2d 497 (Ind. App. 2003), which is relied upon by Acuity, the court of appeals of Indiana gave effect to a motor vehicle exclusion provision and found that there was no coverage under a Rural Guardian insurance policy issued by Farm Bureau,[2] even though the insured had purchased a watercraft liability endorsement. We agree with the trial court that this case is readily distinguishable.
¶15 The Vanns’ claim against the insured was premised upon an
alleged negligent use of a motor vehicle and not upon the alleged negligent use
of a watercraft.
actually contain language stating that an occurrence is covered as long as it arises out of the ownership, maintenance, use, loading, unloading or entrustment of the boat covered by the watercraft endorsement.... [N]either the Policy nor the watercraft endorsement clearly sets forth the conditions under which liability coverage is triggered with regard to the boat.
¶16 Also, the court in Vann commented that the watercraft
liability endorsement was vague with respect to coverage and noted that any
doubts as to coverage would have to be construed against the insurer.
¶17 In State Farm Fire and Casualty Co. v. Pinson, 984 F.2d 610 (4th
Cir. 1993), which was discussed in Vann and which is relied upon by
Sass, the federal court noted that in South Carolina the term “use” had been
broadly and not narrowly construed. Pinson,
984 F.2d at 612. On that basis it held
that under
¶18 In that case, the insured was towing his pontoon boat behind
his pickup truck in
¶19 In its decision, the court directly addressed the issue of
whether the boat was in use when being towed at the time of the accident.
¶20 The majority in Pinson seemed to place considerable
emphasis on the reason why a boat was being towed in finding that it was in
use. It did not state that the act of
towing alone was using the boat. In
distinguishing the towing of a boat on a trailer from some other object, the
court stated, “On the other hand, unless a boat is permanently moored, it must
be frequently transported to-and-from the water to be put to its intended
purpose.”
¶21 The condition which led the court to conclude that the towed boat was in “use” leaves significant unanswered questions. What if the boat was being towed for a different purpose? Further, what if the purpose or destination changed in mid-journey? Many different scenarios are plausible and the coverage issue becomes dependant on the purpose of the towing. We agree with the trial court that the conditional nature of the majority’s reasoning—the need to examine in each case the purpose for which the boat is being towed—makes this reasoning unconvincing.
¶22 The dissent in Pinson, on the other hand, provided
a more persuasive rationale, on which both the trial court and this court
agree. The dissent noted that there was
no ambiguity in the word “use” and that the
As the trial court explained, “… it would contradict the ordinary meaning of words ... to say that the Hannah boat was ‘in use’ merely because it was carried on a trailer to a water site ... at most, the boat was in transit, preliminary to use.” The trial court determined that the distinction between an insured vehicle in tow and an insured boat merely being transported as cargo is crucial, and this Court agrees with that determination.
Pinson, 984 F.2d at 618.
¶23 Similarly, though
[O]
We went on to emphasize our focus for determining whether there was “use” as the coverage intended:
[I]n each instance we ask whether the injury “grew out
of,” “had its origin in,” or “flowed from” the use of the vehicle. [Tasker v. Larson, 149
Garcia, 167
¶24 Thus, we look to the “inherent nature of the vehicle” to determine whether the particular activities in question constitute “use.” A boat, by its nature, is a watercraft or vessel. It may be powered manually by rowing, by wind in sails, or by a motor. Its nature is to be used upon water. The act of transporting a boat on a trailer may be performed in order to be able to use the boat, or preliminary to its actual use, but would not be a normal incident of the use itself considering the inherent nature of what a boat is.
¶25 Accordingly, when a boat is being towed on a trailer, the towing vehicle is in use, as is the trailer itself. The boat itself, considering its nature, is not. It constitutes cargo upon the trailer at that time. We therefore agree with the trial court that Johnson’s boat constituted cargo upon the trailer at the time of the accident.
¶26 In her next argument, Sass states that if we “agree[] with the trial court that the accident in question did not involve a ‘use’ of the watercraft,” we should hold that the policy nevertheless provides coverage because the accident arose out of the “loading or unloading of a watercraft.”
¶27 Acuity insists that there was no coverage because the insured
was not “actively engaged” in loading or unloading the watercraft at the time
the injury occurred. It relies on Tomlin
v. State Farm Mutual Automobile Liability Ins. Co., 95
Loading or unloading of a vehicle is a specific use of
a vehicle, and the words “loading or unloading” are an extension of the “use”
clause of the policy. Allstate
Ins. Co. v. Truck Ins. Exchange, 63
¶28 Sass argues that active loading is not required for coverage
and points us to the following quote from Komorowski v. Kozicki, 45
It is to be noted that in the policy of insurance involved in the instant case the appellant agreed to pay on behalf of the insured all sums which the insured shall become legally obligated to pay as damages because of bodily injury caused by accident “arising out of the ownership, maintenance or use of the automobile,” including the “loading and unloading.”
The effect of this language is to extend the coverage to include acts of “loading and unloading” incidental to the use of the vehicle.
The instant policy does not require that the injury occur during or in the course of the “loading and unloading.” The appellant insurance company did not so limit its liability. The words “arising out of” are broad, general and comprehensive, effecting broad coverage.
If the draftsman of the appellant’s policy intended to limit coverage to accidents which occur in the course of “loading and unloading,” he could have specifically provided so.
Sass seems to take this case to hold that the requirement that the insured be actively engaged in loading or unloading cannot be inferred from a policy but must be spelled out. Sass argues that if Acuity had wanted to limit its coverage to injuries taking place during the active loading or unloading process, it could have easily done so, but it did not.
¶29 Acuity and Sass cite to viable countering authority for their opposing positions on this point. The trial court agreed with Acuity’s position. We choose not to reach this issue. First, we note that Acuity proffered its argument on this point in order to respond to Sass’s argument on this point. However, Acuity ultimately argued to the trial court, and again argues here, that this point need not be reached because whether the “active” component to the loading or unloading is an inferred component that must exist for coverage is not relevant to the inquiry. We agree with Acuity that we need not reach this point because it does not factor into our decision. In fact, if we did consider it a necessary factor in our decision, we would likely certify this case to our supreme court.
¶30 The relevant inquiry is instead whether the watercraft endorsement provides coverage for the negligent loading or unloading of the boat onto or off of another vehicle, which here was the trailer. For our purposes, we are satisfied, as was the trial court, that the ordinary and reasonable construction of the “loading and unloading” language of the watercraft form is to provide coverage for the loading and unloading of the boat with persons or objects, not the loading or unloading of the boat onto or off of another vehicle.
¶31 Thus, the only reasonable argument to make for coverage for negligent loading or unloading is that the accident and alleged injury arose out of the loading or unloading of the boat onto the trailer. This argument, however, gets Sass nowhere because it brings into play Acuity’s motor vehicle exclusion which excludes coverage for both the motor vehicle and the trailer.
¶32 Sass nonetheless tries another approach arguing that “a reasonable person in the position of Mr. Johnson would expect insurance coverage for negligently loading his boat onto his trailer” because he “has paid an additional premium of $630 in order to obtain a very broad grant of liability coverage for personal injury, arising out of the loading of his watercraft.” Sass’s argument is circular and self-serving. The trial court appropriately addressed the expectation of the reasonable insured regarding coverage in this situation:
The policy in question is a homeowner’s policy with a clear and unambiguous motor vehicle exclusion which includes trailers. Reasonable persons would know that an automobile liability policy and a homeowner’s liability policy provide two different kinds of coverage. They would know that their homeowner’s policy excludes liability for their use of their motor vehicles. That is why they purchase both types of policies.
When [people] purchase[] an extra watercraft liability endorsement it is reasonable to assume that they are concerned about liability which they might incur as a result of using their boat and that they want coverage for that possibility. It would not be reasonable for [people] to assume that the coverage would extend to their loading the boat onto a trailer to transport it. It would be much more reasonable for [people] to assume that since it is the trailer that was being used to transport the boat they would have the benefit of whatever coverage insured the trailer…. There is nothing about the structure of the policy or the language used which would have led [] reasonable [people] to any false conclusions or expectations about their coverage. The Court concludes, therefore, that the policy is not ambiguous.
¶33 The trial court’s rationale is emphasized by the specific language in the watercraft endorsement which provides that “[a]ll other provisions of this policy apply.” Moreover, the “ordinary and reasonable” construction of the “loading and unloading” language of the watercraft form is to provide coverage for the loading and unloading of the boat with persons or objects. It is not reasonable to conclude that the additional premium paid for watercraft liability coverage vitiates the viable motor vehicle exclusion in the policy.
¶34 Sass’s final argument is: Acuity’s reliance on the words “[a]ll other provisions of this policy apply” as an exclusion from coverage in this case is misapplied; at the very least, the words are contextually ambiguous. We note that this argument ties into her last and that we have already pointed specifically to this language as unambiguous. Sass contends that this language is “broad and imprecise” and “does not adequately advise the insured of the specific exclusion regarding the operation of a motor vehicle relied upon by Acuity.” As already noted, we cannot agree. Rather, we agree with the trial court that the language “[a]ll other provisions of this policy apply,” in fact, puts a reasonable person on notice that the exclusion provisions, which certainly are “other provisions of the policy,” are not affected by the watercraft endorsement.
¶35 Put another way, the language “[a]ll other provisions of this
policy apply,” is not “reasonably” susceptible of more than one
construction. See Varda, 284
By the Court.—Judgment affirmed.
No. |
2007AP2943(C) |
¶36 Brown,
C.J. (concurring). While
I agree with most of the lead opinion, I must respectfully disagree with the
conclusion that “loading and unloading,” as that term appears in Acuity’s
“Watercraft Liability” attachment to this homeowner’s policy, means “the
loading and unloading of the boat with
persons or objects.” Majority,
¶30. Rather, I agree with Acuity that
the reasonable person in the position of the insured would believe that this
term means being “actively engaged” in the actual loading and unloading of the
boat. Therefore, the policy covers the
process of transferring a boat onto or off of a vehicle, a trailer, a flat bed,
a dry dock station or something similar.
Numerous
¶37 For purposes of this case, once the boat was loaded and was in the process of being towed, the clause was not operative. I disagree with Sass that a person in the position of the reasonable insured would believe that “loading and unloading” includes the risk of something happening while a boat is being towed or carried from one destination to another.
[1] Johnson is not a party to the action and did not provide any facts by affidavit or otherwise.
[2] A Rural Guardian policy covers an insured’s farm in much the same way a homeowner’s policy covers an insured’s home. Vann v. United Farm Family Mut. Ins. Co., 790 N.E.2d 497, 500 n.1 (Ind. App. 2003).