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    Supreme Court Digest

    This column summarizes all decisions of the Wisconsin Supreme Court except those involving lawyer or judicial discipline.

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    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 - 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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