Wisconsin Lawyer
Vol. 79, No. 4, April
2006
Supreme Court Digest
This column summarizes all decisions of
the Wisconsin Supreme Court (except those involving lawyer or judicial
discipline, which are digested elsewhere in the magazine). Profs. Daniel
D. Blinka and Thomas J. Hammer invite comments and questions about the
digests. They can be reached at Marquette University Law School, 1103 W.
Wisconsin Ave., Milwaukee, WI 53233, (414) 288-7090.
by Prof. Daniel D. Blinka &
Prof. Thomas J. Hammer
Insurance
Insurance - Minor Sponsorship
LaCount v. General
Cas. Co.,
2006 WI 14 (filed 8 Feb. 2006)
A minor's negligent driving caused her vehicle to collide with a van,
killing the van's driver and injuring passengers in both vehicles. The
injured persons sued the minor and her father and their insurer. "The
motor vehicle the minor was driving was insured under a policy in which
the minor's father was the named insured. The minor was explicitly named
in the policy as a member of the family and a permissive driver of the
vehicle covered by the policy. The father was not in the vehicle at the
time of the collision; his liability is based solely on the statute
imposing joint and several liability on a sponsor of a minor's driver
license for damage caused by the minor's negligent operation of a
vehicle" (¶ 10). Although the policy covered bodily injury damages
for which "any insured becomes legally responsible because of an auto
accident," the supreme court said that it also repeatedly and explicitly
limited the "total liability for one occurrence under the policy to
$500,000" (¶ 11). "The policy omits a provision stating that
`[c]overage 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 ...,' even though Wis. Stat. §
632.32(3) requires this provision" (¶ 12).
The injured persons moved the court for a determination that the
policy provided separate limits of liability of $500,000 for the father
and the minor driver. The circuit court, relying on Wis. Stat. section
632.32(3)(a), granted the motion. About three weeks later, the supreme
court decided Folkman v. Quamme, 2003 WI 116. Based on
Folkman, the court of appeals reversed the circuit court's
ruling
in this case.
The supreme court, in a decision authored by Chief Justice
Abrahamson, affirmed the court of appeals. "The issue presented is
whether paragraph (a) of Wis. Stat. § 632.32(3), the omnibus
coverage statute, compels an insurance company ... to provide
separate policy limits for both the named insured (a father who signed
an application for his minor daughter's driver license, becoming her
sponsor) and for the minor whose negligent operation of the motor
vehicle caused her vehicle to collide with a van and injure several
persons" (¶ 19). "The text and statutory and legislative history of
paragraph (a) of Wis. Stat. § 632.32(3) do not support the claim of
the injured persons that under paragraph (a) the father-sponsor, as well
as the permissive user, are each entitled to coverage in the amount of
the limit of liability in the policy. Rather the text and statutory and
legislative history of paragraph (a) suggest that paragraph (a) should
be interpreted similarly to paragraph (b) regarding the application of
policy limits to multiple insured[s] whose liabilities are covered by
the same insurance policy" (¶ 42). "The injured persons initially
brought their claims in the circuit court under paragraph (b) and
failed. They then based their claims on paragraph (a) in an attempt to
repackage their claims to accomplish what case law will not permit them
to accomplish under paragraph (b)" (¶ 44). The court held that
under Folkman neither paragraph (a) nor paragraph (b) of Wis.
Stat. section 632.32(3) can be read "to compel an insurance company to
provide a separate limit of liability to a sponsor of a minor's driver
license, except when the sponsor is liable for active negligence"
(¶ 72).
Surveying the case law, the court conceded that the injured persons
raised a number of "interesting arguments," but the court said that it
was "bound by case law since 1983, including Folkman, which
this
court decided three years ago, that has distinguished between liability
based on active or imputed negligence and has apparently merged
paragraphs (a) and (b) of Wis. Stat. § 632.32(3) in discussing the
limits of liability. Furthermore, the text of paragraph (a) supports the
argument that the paragraph does not require separate limits of
liability for the permissive user and the named insured" (¶ 81).
Finally, the court noted that the legislature has not amended the
statute in light of the case law (see id.).
Justice Crooks did not participate in this decision.
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