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COURT OF APPEALS DECISION DATED AND RELEASED October 10, 1995 |
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. 94-2927
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT I
WEST AMERICAN
INSURANCE COMPANY,
Plaintiff-Appellant,
v.
INTEGRITY MUTUAL
INSURANCE COMPANY,
Defendant-Respondent.
APPEAL from a judgment
of the circuit court for Milwaukee County:
JOHN J. DiMOTTO, Judge. Affirmed.
Before Wedemeyer, P.J.,
Sullivan and Fine, JJ.
PER CURIAM. West American Insurance Company appeals from
a judgment dismissing its action against Integrity Mutual Insurance Company
following cross-motions seeking summary judgment. West American claims the trial court erred in granting
Integrity's motion for summary judgment.
Because Integrity's policy excluded coverage, the trial court did not
err in granting Integrity's motion for summary judgment. Accordingly, we affirm.
I. BACKGROUND
This action arises out
of an automobile-pedestrian accident that occurred on December 20,
1989. Frederick R. Rittenhouse, while
driving his mother's car, was running an errand for his employer, BZ
Engineering. The accident occurred when
Rittenhouse struck a pedestrian, Minnie R. West. West American insured Rittenhouse's employer. Integrity insured Rittenhouse's mother.
West filed suit against
Rittenhouse, BZ, and West American.
Shortly thereafter, West American negotiated a settlement in the amount
of $110,000. A release was executed and
West agreed to assign any rights she had against Integrity to West American.
West American filed suit
against Integrity on contribution and subrogation theories. Integrity filed a motion for summary
judgment on the grounds that the release operated to bar a claim against it,
that West American's failure to join them so that they could participate in any
settlement prejudiced them, and that there is no coverage under Integrity's
policy. The trial court granted
Integrity's motion for summary judgment.
West American now appeals.
II. DISCUSSION
The trial court granted
Integrity's motion for summary judgment on the grounds that the absolute
release of Rittenhouse operated to release Integrity, and that West American's
conduct estopped them from seeking subrogation from Integrity. We affirm the trial court's judgment, but on
different grounds. See Jones
v. Gerhardstein, 135 Wis.2d 161, 166, 400 N.W.2d 1, 3 (Ct. App. 1986)
(we will affirm the trial court's decision if the result was correct), aff'd,
141 Wis.2d 710, 416 N.W.2d 883 (1987).
Our review compels us to conclude that the business exclusion in
Integrity's policy validly excludes coverage under the facts of this case. Because the exclusion applies, the trial
court did not err in granting summary judgment in favor of Integrity because no
claim existed against Integrity.
Our review in this case
involves the interpretation of an insurance contract, which is a question of
law that is reviewed de novo. See
Katze v. Randolph & Scott Mut. Fire Ins. Co., 116 Wis.2d
206, 212, 341 N.W.2d 689, 691 (1984).
The exclusion that precludes coverage is the “business exclusion” within
Integrity's policy. West American
argues that the business exclusion does not apply because: (1) it is ambiguous;
and (2) it violates the omnibus statute, § 632.32(3), Stats.[1]
We begin our analysis by
examining the language of the exclusion and other relevant language of the
policy. The exclusion states that
coverage under the policy does not apply to:
Bodily
injury or property damage arising out of the ownership, maintenance or use of
any vehicle by any person employed or otherwise engaged in any business or
occupation. This exclusion does not
apply to your insured car when it is used by an insured person in your business
or occupation.
The
definition section of the policy defines “your” to mean “the
Policyholder named in the Declarations and spouse if living in the same
household.”
A. Ambiguity.
West American's first
claim is that this language is ambiguous.
A contract is ambiguous when its words and phrases are reasonably
susceptible to more than one construction “from the viewpoint of a reasonable
person of ordinary intelligence in the position of the insured.” Schroeder v. Blue Cross & Blue
Shield, 153 Wis.2d 165, 174, 450 N.W.2d 470, 473 (Ct. App.
1989). We find no ambiguity here. The language of Integrity's exclusion
excludes coverage for damages arising out of an auto accident that occurred
while engaged in business activities.
The exclusion contains an exception that provides coverage for damages
arising out of an auto accident involving an insured car, when used by
an insured person in your business. As noted, “your” is defined to mean the policyholder or a
spouse living in the same household. In
other words, if an insured gets into an accident while driving an insured car
for the purposes of the policyholder/spouse's business, the business exclusion
does not apply and the policy affords coverage.
West American's
contention that the exception language is ambiguous because it could be
construed to provide Rittenhouse coverage when he is driving an insured car in his
business is unreasonable in light of the definition discussed above.
B. Omnibus
Clause.
West American also
claims that the exclusion violates the omnibus statute because the exclusion
could be construed so that it would not supply the same coverage to
Rittenhouse as it did to his mother, the policyholder. We disagree.
We
conclude that the only reasonable construction of the exclusion does not
violate the omnibus statute because it affords the same coverage to Rittenhouse
and his mother. The construction is
simple: coverage for business activities is not excluded if it involved an
insured car, being driven by an insured person in the policyholder/spouse's
business. Thus, Integrity's policy
provides coverage both to Rittenhouse and to his mother if either the mother or
Rittenhouse uses the car in the mother's business. This comports with the requirements of the omnibus statute
because both Rittenhouse and his mother are afforded the same coverage.[2]
By the Court.—Judgment
affirmed.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.
[1] Section 632.32(3), Stats., provides in pertinent part:
[E]very
policy subject to this section issued to an owner shall provide that:
(a)Coverage provided to the named insured applies in the same manner and under the same provisions to any person using any motor vehicle described in the policy when the use is for purposes and in the manner described in the policy.