Court of Appeals of Ohio,

Tenth District, Franklin County.

Sharon A. SAUER et al., Plaintiffs–Appellees,

v.

Stinson J. CREWS et al., Defendants/Third–Party Plaintiffs–Appellees,

Mariann Jackson et al., Defendants–Appellees,

Century Surety Company, Third–Party Defendant–Appellant.

 

No. 12AP–320.

Decided Dec. 31, 2012.

 

Appeal from the Franklin County Court of Common Pleas.

Plymale & Dingus, LLC, M. Shawn Dingus and Michael R. Guluzian, for appellees Stinson J. Crews and Stinson Crews Paving, Inc.

 

Weston Hurd LLP, John G. Farnan and J. Quinn Dorgan, for appellant Century Surety Company.

 

BRYANT, J.

*1 {¶ 1} Third-party defendant-appellant, Century Surety Company, appeals from a judgment of the Franklin County Court of Common Pleas granting declaratory relief to Century’s insureds, third-party plaintiffs-appellees, Stinson J. Crews and Stinson Crews Paving, Inc. (collectively, “Crews”) and determining Crews are entitled to coverage under their Commercial General Liability (“CGL”) policy with Century. Because the trial court properly concluded the CGL policy provides coverage to Crews, we affirm.

 

I. Facts and Procedural History

{¶ 2} Century’s appeal arises out of a fatal traffic collision involving a car Julia Augenstein was driving and a parked, non-motorized flatbed trailer that Stinson Crews owned and operated as part of his paving business, Stinson Crews Paving, Inc. According to this court’s decision in Sauer v. Crews, 10th Dist. No. 10AP–834, 2011–Ohio–3310, Crews hitched the flatbed trailer on November 24, 2006 to the company’s dump truck and used it to transport an asphalt paver and a skid loader to the job site, a day care center on Columbus Street. Crews was to patch and repair the deteriorated paving of the day care center’s driveway and parking lot.

 

{¶ 3} Around 5:20 p.m., Augenstein was driving westbound on Columbus Street and apparently failed to see Crews’ trailer. Her car hit the rear of the flatbed, and Augenstein sustained multiple injuries. Emergency medical personnel transported Augenstein to Grant Hospital, where she was pronounced dead.

 

{¶ 4} Augenstein’s estate filed a wrongful death and survivorship action against Crews; Crews, in turn, filed a third-party complaint against Century, its CGL carrier, asserting a claim for breach of its insurance contract with Crews and seeking a declaratory judgment that Crews are entitled to coverage for the accident under the CGL policy Century issued to Crews. In response, Century filed a counterclaim requesting the trial court issue a declaratory judgment that the CGL policy did not require Century to provide Crews with either a defense or indemnity. Although Crews also filed a third-party complaint against their automobile carrier Progressive Casualty Insurance Company, Progressive filed a motion for summary judgment; the trial court granted the motion, concluding Crews’ automobile policy did not cover the trailer.

 

{¶ 5} After bifurcating the tort and coverage claims, the trial court conducted a bench trial on the estate’s claims. In a decision filed July 22, 2010, the court found Crews negligent in parking the trailer on Columbus Street and entered judgment in favor of Augenstein’s estate. This court affirmed the trial court’s decision in Sauer.

 

{¶ 6} In light of the decision concluding Crews was liable to Augenstein’s estate in the underlying tort matter, the parties renewed their dispute regarding Crews’ coverage under the CGL policy Century issued to Crews. In an entry filed September 16, 2011, the parties agreed to submit the coverage issue for the trial court’s determination on the briefs. The court also accepted the parties’ stipulations as to (1) the CGL policy’s authenticity and admissibility, (2) the trial court’s findings of fact at the bench trial, and (3) this court’s Sauer decision.

 

*2 {¶ 7} On March 19, 2012, the trial court entered a Decision on the Merits as to Coverage, determining “the trailer involved in this case is mobile equipment and the policy of insurance provides coverage for Plaintiff’s injuries.” (R. 289, Decision on the Merits as to Coverage, 1.) Since the decision resolved the final remaining claim in the case, the court entered a Final Judgment Entry on April 2, 2012.

 

II. Assignments of Error

{¶ 8} Century appeals, assigning two errors:

 

[I.] In declining to apply an exclusion of coverage for “autos” in the commercial general liability insurance policy issued by Appellant Century Surety Company, the trial court erroneously determined that Appellees’ flatbed trailer was “mobile equipment” as defined in the policy.

 

[II.] Even if Appellees’ flatbed trailer is “mobile equipment,” the trial court erroneously failed to apply an exclusion of coverage for claims arising out of the transport of “mobile equipment.”

 

III. First Assignment of Error—Coverage as “Mobile Equipment” for Trailer

{¶ 9} The parties agree that Crews held a valid CGL policy with Century at the time of the accident and that Crews was found liable for bodily injury and property damage in the amount of $251,552.04, plus interest. The issue is whether Crews’ CGL policy with Century applies on the facts here. Century argues the trial court erred in granting declaratory judgment in Crews’ favor because it incorrectly determined the trailer was “mobile equipment” and not an “auto” as the CGL policy defines those terms.

 

A. Applicable Law

{¶ 10} An appellate court reviews a trial court’s determination regarding the justiciability of a declaratory judgment action for an abuse of discretion.   Arnott v. Arnott, 132 Ohio St.3d 401, 2012–Ohio–3208, ¶ 13. A trial court’s holding regarding questions of law nonetheless is reviewed on a de novo basis, requiring the appellate court to review the legal issue without deference to the trial court’s decision. Arnott at ¶ 16 (noting that “[n]ever have we deferred to the judgment of the trial court on issues of law”).

 

{¶ 11} Courts generally interpret insurance policies in accordance with the same rules applied in interpreting other types of contracts. Hybud Equip. Corp. v. Sphere Drake Ins. Co., Ltd., 64 Ohio St.3d 657, 665 (1992). Because the “interpretation of written contracts, including any assessment as to whether a contract is ambiguous, is a question of law,” it is subject to de novo review on appeal. State v. Fed. Ins. Co., 10th Dist. No. 04AP–1350, 2005–Ohio–6807, ¶ 22, citing Long Beach Assn., Inc. v.. Jones, 82 Ohio St.3d 574, 576 (1998). See also Cleveland Constr., Inc. v. Ohio Public Emp. Retirement Sys., 10th Dist. No. 07AP–574, 2008–Ohio–1630, ¶ 7.

 

{¶ 12} “When provisions of an insurance policy are reasonably susceptible to more than one interpretation, we must construe them strictly against the insurer” and “adopt any reasonable construction that results in coverage for the insured.” State Farm Mut. Auto. Ins. Co. v. Gourley, 10th Dist. No. 12AP–200, 2012–Ohio–4909, ¶ 12, citing Faruque v. Provident Life & Acc. Ins. Co., 31 Ohio St.3d 34, 38 (1987), and Employers Reinsurance Corp. v. Worthington Custom Plastics, Inc., 109 Ohio App.3d 550 (10th Dist.1996). The rationale for the rule of construction is that the insurer drafted the policy and should be held responsible for its language.

 

*3 {¶ 13} In determining whether ambiguities or uncertainties exist, we give words and phrases their plain and ordinary meaning, “unless manifest absurdity results, or unless some other meaning is clearly evidenced from the face or overall contents of the instrument.” Alexander v. Buckeye Pipe Line Co., 53 Ohio St.2d 241 (1978), paragraph two of the syllabus, superseded by statute on other grounds; Hedmond v. Admiral Ins. Co., 10th Dist. No. 02AP–910, 2003–Ohio–4138, ¶ 33. “The intent of the parties to a contract is presumed to reside in the language they chose to employ in the agreement.”   Kelly v. Medical Life Ins. Co., 31 Ohio St.3d 130 (1987), paragraph one of the syllabus.

 

B. The CGL Policy

{¶ 14} Crews’ CGL policy provides:

 

“2. Exclusions

 

This insurance does not apply to:

 

* * *

 

g. Aircraft, Auto or Water Craft

 

‘Bodily injury’ or ‘property damage’ arising out of the ownership, maintenance, use or entrustment to others of any aircraft, ‘auto’ or water craft owned or operated by or rented or loaned to any insured. * * *

 

* * *

 

This exclusion does not apply to:

 

* * *

 

(5) ‘Bodily injury’ or ‘property damage’ arising out of:

 

(a) The operation of machinery or equipment that is attached to, or part of, a land vehicle that would qualify under the definition of ‘mobile equipment’ if it were not subject to a compulsory or financial responsibility law or other motor vehicle insurance law in the state where it is licensed or principally garaged; * * *

 

* * *

 

h. Mobile Equipment

 

‘Bodily injury’ or ‘property damage’ arising out of:

 

(1) The transportation of ‘mobile equipment’ by an ‘auto’ owned or operated by or rented or loaned to any insured; * * *.”

 

(Century CGL Policy, Form CG 00 01 12 04, at 2, 4.)

 

{¶ 15} The policy includes the following definitions:

 

“2. ‘Auto’ means:

 

a. A land motor vehicle, trailer or semi trailer designed for travel on public roads, including any attached machinery or equipment; * * *

 

* * *

 

However, ‘auto’ does not include ‘mobile equipment.’

 

* * *

 

12. ‘Mobile Equipment’ means any of the following types of land vehicles, including any attached machinery or equipment:

 

a. Bulldozers, farm machinery, forklifts and other vehicles designed for use principally off public roads;

 

b. Vehicles maintained for use solely on or next to premises you own or rent;

 

c. Vehicles that travel on crawler treads;

 

d. Vehicles, whether self-propelled or not, maintained primarily to provide mobility to permanently mounted:

 

(1) Power cranes, shovels, loaders, diggers or drills;

 

(2) Road construction or resurfacing equipment such as graders, scrapers or rollers;

 

e. Vehicles not described in a., b., c. or d. above that are not self-propelled and are maintained primarily to provide mobility to permanently attached equipment of the following types:

 

(1) Air compressors, pumps and generators, including spraying, welding, building cleaning, geophysical exploration, lighting and well services equipment; or

 

*4 (2) Cherry pickers and similar devices used to raise or lower workers;

 

f. Vehicles not described in a., b., c. or d. above maintained primarily for purposes other than the transportation of persons or cargo.”

 

(Century CGL Policy, Form CG 00 01 12 04, at 12–13.)

 

C. Application of the Policy Terms

{¶ 16} The equipment at issue is a non-motorized 1990 Hudson flatbed trailer that Crews used for hauling machinery to and from job sites by attaching it to one of his trucks. Crews’ CGL policy with Century excludes “autos” from liability coverage, defining an auto to be a trailer. The same definition, however, excludes “mobile equipment” from the definition of a non-covered auto. If we assume the trailer falls under the definition of an “auto,” the issue is whether the flatbed trailer is covered under the policy as an exemption from the “auto” exclusion.

 

{¶ 17} The trailer does not meet the descriptions of mobile equipment provided in 12(a)-(e); if the trailer is “mobile equipment,” it is pursuant to 12(f). Century disputes the trial court’s finding that the trailer qualified as “mobile equipment” under that provision, which defines mobile equipment as “[v]ehicles * * * maintained primarily for purposes other than the transportation of persons or cargo.” The trial court determined that because the meaning of “cargo” was ambiguous, ambiguities had to be resolved in the insured’s favor. Applying that maxim, the trial court concluded the flatbed trailer did not haul cargo.

 

{¶ 18} Since the flatbed trailer could not feasibly or safely be used to transport people, the relevant inquiry is whether the trailer was maintained primarily for the transportation of “cargo.” The policy does not define “cargo,” so we apply the “ ‘ordinary meaning unless manifest absurdity results, or some other meaning is clearly evidenced from the face or overall contents of the instrument.’ “ State ex rel. Petro v. R.J. Reynolds Tobacco Co., 104 Ohio St.3d 559, 2004–Ohio–7102, ¶ 23, citing, Alexander at paragraph two of the syllabus; see also Haimbaugh v. Grange Mut. Cas. Co., 10th Dist. No. 07AP676, 2008–Ohio–4001, ¶ 30.

 

{¶ 19} The definitions found in two commonly used dictionaries are virtually the same. Black’s Law Dictionary defines “cargo” to mean “goods transported by a vessel, airplane, or vehicle.” Black’s Law Dictionary 226 (8th ed.2004). Merriam–Webster’s Online Dictionary defines “cargo” as “the goods or merchandise conveyed in a ship, airplane, or vehicle: FREIGHT.” (Emphasis sic.) Merriam–Webster’s Online Dictionary, http://www.merriam-webster.com/ dicitionary/ cargo (accessed Dec. 28, 2012).

 

{¶ 20} Both definitions include the term “merchandise,” “goods,” or both. Merriam–Webster’s Online Dictionary defines “merchandise” as “the commodities or goods that are bought and sold in business: WARES”; the definition thus suggests items in the stream of commerce. (Emphasis sic.) “Goods,” in turn, is defined in the same dictionary to include “(3)(a) something that has economic utility or satisfies an economic want[;] (b) plural: personal property having intrinsic value but usually excluding money, securities, and negotiable instruments”; and “(d) plural: something manufactured or produced for sale: WARES, MERCHANDISE.” (Emphasis sic.) Merriam–Webster’s Online Dictionary, http://merriam-webster.com/dictionary/goods (accessed Dec. 28, 2012). Again, two of the usages refer to cargo in the stream of commerce.

 

*5 {¶ 21} Few courts have addressed directly the scope of the term cargo, but many that have see an ambiguity in the term. The U.S. District Court of Massachusetts, after noting the “American Heritage Dictionary defines cargo as ‘[t]he freight carried by a ship, airplane, or other vehicle,’ “ concluded the term nonetheless “may have a varying meaning.” Am. Home Assurance Co. v. Fore River Dock & Dredge, Inc., 321 F.Supp.2d 209, 223 (D.Mass.2004), citing American Heritage Dictionary 241 (2d college ed.1985) and quoting Su v. M/V Southern Aster, 978 F.2d 462, 469 (9th Cir.1992), quoting Black’s Law Dictionary 268 (4th ed.1951). The U.S. Fourth Circuit Court of Appeals observed, “Clearly, the term cargo has a strong commercial connotation.”   State Farm Fire and Cas. Co. v. Pinson, 984 F.2d 610, 613 (4th Cir.1993) (concluding a boat being towed by a car is not “cargo”).

 

{¶ 22} Illustrating the ambiguity in the term “cargo,” Edward J. Gerrits, Inc. v. Royal Marine Serv., Inc., 456 So.2d 1316, 1317 (Fla.App. 3rd Dist.1984), review denied sub nom. Lexington Ins. Co. v. Royal Marine Serv. Co., Inc., 464 So.2d 555 (Fla.1985), reversed a trial court’s determination that the insured’s crane was unambiguously cargo. The court concluded “that determination, upon which the judgment stands or falls, is contrary to the well-settled rule that where a term of an insurance policy is susceptible of two interpretations, the interpretation which sustains the claim for indemnity must be adopted.” The appellate court determined “the term ‘ cargo’ most certainly does not unambiguously include the crane” and “it is arguable that the commonly understood meaning of the word “cargo” is goods and merchandise-freight-intended for delivery.” Id., citing The Manila Prize Cases, 188 U.S. 254, 269–70 (1902) (defining cargo as that “which was intended to be disposed of at the foreign port”).

 

{¶ 23} “ ‘Policies of insurance, which are in language selected by the insurer and which are reasonably open to different interpretations, will be construed most favorably for the insured.’ “ Erie Ins. Exchange v. Colony Dev. Corp., 10th Dist. No. 02AP–1087, 2003–Ohio–7232, ¶ 37, quoting Butche v. Ohio Cas. Ins. Co., 174 Ohio St. 144 (1962), paragraph three of the syllabus. “ ‘It is not the responsibility of the insured to guess whether certain occurrences will or will not be covered based on nonspecific and generic words or phrases that could be construed in a variety of ways. * * * [I]n order to defeat coverage, “the insurer must establish not merely that the policy is capable of the construction it favors, but rather that such an interpretation is the only one that can fairly be placed on the language in question.” ‘ “ Id., quoting Andersen v. Highland House Co., 93 Ohio St.3d 547, 549 (2001), quoting Reiter, Strasser & Pohlman, The Pollution Exclusion Under Ohio Law: Staying the Course, 59 U.Cin.L.Rev. 1165, 1179 (1991).

 

*6 {¶ 24} Century failed to do so. Because the policy does not define “cargo,” the term’s use creates an ambiguity and its meaning is open to interpretation. One possible definition of “cargo” is undisputedly a very general term for items being transported. Another valid and commonly used definition of “cargo” limits the term’s usage to describing items in the stream of commerce. The policy provides no indication that it is using the term in the broader sense. Given the competing but valid interpretations, the trial court properly concluded the term is ambiguous and construed it against Century.

 

{¶ 25} As it did in the trial court, Century relies on the Third District’s decision in United Farm Family Mut. Ins. Co. v. Pearce, 3d Dist. No. 2–08–07, 2008–Ohio–5405. In Pearce, the policy-holder’s dump truck was involved in a traffic accident. Among other arguments, the insured invoked the provision in its policy that created an exemption from the “auto” exclusion for “[m]obile equipment * * * maintained primarily for purposes other than the transportation of persons or cargo.” Id. at ¶ 12. The dump truck was used “primarily to haul asphalt and equipment to the job site”; the truck carried asphalt in its “dump bed” while it “hauled various pieces of paving equipment * * * using a lowboy trailer.” Id. at ¶ 14, 15.

 

{¶ 26} Analyzing the definition of “cargo,” the Third District noted “ ‘[ c]argo’ is defined as ‘the lading or freight of a ship, airplane, or vehicle: the goods, merchandise, or whatever is conveyed; LOAD, FREIGHT-usu. used of goods only and not of live animals or persons.’ “ (Emphasis sic.) Id. at ¶ 15, citing Webster’s Third International Dictionary 339 (2002). The court continued, “ ‘Goods’ are ‘tangible movable personal property having intrinsic value[.’] * * * ‘Convey’ means ‘to bear from one place to another: CARRY, TRANSPORT.’ “ (Emphasis sic.) Id. According to these definitions, the court determined “[a]sphalt and equipment fall within the definition of a good, and thus, cargo”; and therefore, is not “mobile equipment” under the policy. Id. at ¶ 15.

 

{¶ 27} The issue here is not whether Crews’ paving equipment falls within the meaning of the term “cargo” under one of its definitions, but whether the policy is ambiguous as to that term. Because the term is ambiguous, the CGL policy did not clearly and unambiguously exclude coverage for Crews’ trailer; the contract must be construed in Crews’ favor to the end that Crews was not carrying cargo and thus was covered under Century’s CGL policy. Accordingly, the trial court properly determined the flatbed trailer was “mobile equipment” as defined in the policy.

 

{¶ 28} Century’s first assignment of error is overruled.

 

IV. Second Assignment of Error—Transportation of “Mobile Equipment”

{¶ 29} Century’s second assignment of error asserts, even if Crews’ flatbed trailer is “mobile equipment,” the trial court erroneously failed to apply an exclusion of coverage for claims arising out of the transport of “mobile equipment.” Section “h” under the “Exclusions” portion of the policy excludes from coverage “ ‘[b]odily injury’ or ‘property damage’ arising out of: (1) The transportation of ‘mobile equipment’ by an ‘auto’ owned or operated by or rented or loaned to any insured.” (Century CGL Policy, Form CG 00 01 12 04, at 2, 4.)

 

*7 {¶ 30} In the context of insurer-created exclusions, it is “presumed that ‘that which is not clearly excluded from the contract is included.’ “ Prudential Prop. & Cas. Ins. Co. v. Koby, 124 Ohio App.3d 174, 178 (11th Dist.1997), quoting Home Indemn. Co. of N.Y. v. Plymouth, 146 Ohio St. 96 (1945), paragraph two of the syllabus. See also Beaverdam Contracting v. Erie Ins. Co., 3d Dist. No. 1–08–17, 2008–Ohio–4953, ¶ 19 (concluding that although the party seeking to recover under an insurance policy bears the burden of proof to demonstrate that the policy provides coverage for the particular loss, “when an insurer denies liability coverage based upon a policy exclusion, the insurer bears the burden of demonstrating the applicability of the exclusion”), citing Continental Ins. Co. v. Louis Marx & Co., Inc., 64 Ohio St.2d 399 (1980), syllabus.

 

{¶ 31} Pursuant to the same rules of construction applied above, we consider the plain meaning of the policy’s language. To “transport” is “to transfer or convey from one place to another.” Merriam–Webster’s Online Dictionary, http:// www. merriam-webster.com/dictionary/transport (accessed Dec. 28, 2012). The record reveals that the flatbed trailer was unattached to any motorized vehicle at the time of the accident; the accident occurred well after the flatbed trailer had been parked. Because the accident did not arise out of transporting the flatbed trailer, the exclusion does not apply.

 

{¶ 32} Century nonetheless asserts, in effect, that an auto’s previously transporting a piece of mobile equipment should disqualify the mobile equipment from coverage, though it is no longer in transit or even attached to an auto. Because “mobile equipment” must arrive at the job site somehow, and frequently arrives by auto, extending the policy’s exclusion to items previously transported by auto would call into question the value of exempting “mobile equipment” from the “auto” exclusion at all.

 

{¶ 33} Pursuant to the plain meaning of the provision, section “h” does not encompass “mobile equipment” already transported to the job site. As a result, the provision does not exclude the flatbed trailer here. Further, despite Century’s assertion that transporting the trailer caused the accident “because [Crews] placed its trailer in the roadway, thus blocking traffic and causing the underlying accident,” no language in the policy suggests the trailer should be treated differently because it was set to rest in a public street. (Appellant’s Reply Brief, 9–10.)

 

{¶ 34} Century’s second assignment of error is overruled.

 

V. Disposition

{¶ 35} Having overruled Century’s two assignments of error, we affirm the decision of the Franklin County Court of Common Pleas.

 

Judgment affirmed.

 

KLATT and FRENCH, JJ., concur.

Court of Appeals of Wisconsin.

Vicki L. BLASING, Plaintiff,

v.

ZURICH AMERICAN INSURANCE COMPANY and Menard, Inc., Defendants–Appellants,

Jefferson County Human Services Department, Defendant,

American Family Mutual Insurance Company, Intervenor–Respondent.

 

No. 2012AP858.

Jan. 3, 2013.

 

appeal from an order of the circuit court for Jefferson County: William F. Hue, Judge. Reversed and cause remanded for further proceedings.

 

Before LUNDSTEN, P.J., BLANCHARD and KLOPPENBURG, JJ.

 

¶ 1 LUNDSTEN, P.J.

Vicki Blasing was injured by an employee of Menard, Inc. while the employee was loading Blasing’s truck with lumber. Blasing has automobile insurance through American Family Mutual Insurance Company. The question here is whether American Family must defend Menards and provide coverage if it is determined that the Menards employee negligently injured Blasing.

 

¶ 2 Menards argues that its employee is covered as a permissive vehicle user under Blasing’s American Family automobile policy. The general rule is that permissive vehicle users are additional insureds under automobile policies and that they are covered to the same extent as a policyholder.FN1 According to Menards, because its employee was loading Blasing’s truck with her permission, and because it is undisputed that loading a vehicle is “use” of the vehicle, it follows that the employee and, therefore, Menards is an additional insured and American Family must defend and possibly indemnify Menards for any liability Menards has with respect to the injured party, Blasing. American Family responds that, because Blasing is the premium-paying policyholder and the injured plaintiff in this case, it would be absurd to require her insurance company to defend and indemnify Menards.

 

FN1. In this opinion, we generally use the term “policyholder” to refer to a premium-paying named insured in Blasing’s position. We realize that, under the particular policy provision at issue here, Blasing is a “named insured,” and we will sometimes use that label. However, at oral argument the parties agreed that an appropriate shorthand for Blasing’s status for purposes of this case is “policyholder.”

 

¶ 3 The circuit court, we think understandably, found it troubling that an automobile policy, purchased by a customer who was injured by a Menards employee, could be used by Menards to obtain a defense and, possibly, indemnification. However, for the reasons explained below, we conclude that permissive user coverage is required in this case by the omnibus statute, WIS. STAT. § 632.32.FN2 If this is a result the legislature does not desire, it should amend the omnibus statute to prevent such results in the future. For now, we are bound by the statute. Accordingly, we reverse the circuit court.

 

FN2. All references to the Wisconsin Statutes are to the 2009–10 version unless otherwise noted.

 

Background

¶ 4 Blasing purchased boards from a Menards store in Jefferson, Wisconsin. She drove her pickup truck to the store’s lumber yard, where a Menards employee used a fork lift to load the boards into Blasing’s truck. Blasing was standing next to her truck. During this loading process, a few boards fell and struck Blasing’s foot, causing injury.

 

¶ 5 So far as the record discloses, there are two insurance policies that potentially provide coverage for Blasing’s injury: Menards carries a commercial general liability policy through Zurich American Insurance Company, and Blasing has an American Family automobile policy.FN3

 

FN3. Blasing’s automobile policy with American Family states: “We will pay compensatory damages an insured person is legally liable for because of bodily injury and property damage due to the use of a car or utility trailer. We will defend any suit or settle any claim for damages payable under this policy as we think proper.” The policy defines an “insured person” as “[a]ny person using [Blasing’s] insured car,” but excepted from this definition:

 

1) “Any person, other than a relative, using [Blasing’s] insured car without [her] permission….”

 

2) “Any person, other than a relative, using [Blasing’s] insured car with [her] permission, but who exceeds the scope of that permission.”

 

¶ 6 Although the issue has not been litigated to a decision, and although the Zurich policy is not in the record, there is no dispute that, if the Menards employee negligently caused Blasing’s injury, there is coverage under the Zurich policy. If both policies provide coverage, the parties apparently intend to dispute which policy is primary. What is important for purposes of this appeal, however, is that the parties agree that if the American Family policy does not provide coverage, the Zurich policy would.

 

¶ 7 Blasing commenced an action against Menards and Zurich, alleging negligence and a violation of the safe place statute.FN4 Menards tendered its defense of Blasing’s claims to American Family, asserting that Menards was covered under Blasing’s policy because the Menards employee was a permissive user of Blasing’s vehicle. American Family agreed to provide a defense, subject to a reservation of rights. American Family then moved to intervene and to stay the underlying proceedings on the merits pending resolution of the coverage issues. The court granted American Family’s motions.

 

FN4. For ease of discussion, we refer to the appellants Menards and Zurich collectively as Menards, although in several places it will be apparent from our discussion that our reference to Menards is solely to Menards.

 

¶ 8 American Family moved for summary judgment, arguing that Menards is not covered as an additional insured under Blasing’s policy because the Menards employee was not “using” Blasing’s vehicle within the meaning of the policy or the omnibus statute and, therefore, Menards is not entitled to a defense or to indemnification. Menards, on the other hand, moved for an order declaring that American Family does have a duty to defend and indemnify Menards. The circuit court granted American Family’s motion for summary judgment, finding that American Family has no duty to defend or indemnify Menards.FN5

 

FN5. The parties also assume, as do we, that there is no difference between Menards and its employee for purposes of the coverage issue on appeal.

 

Standard Of Review

¶ 9 We review a motion for summary judgment de novo. Jessica M.F. v. Liberty Mut. Fire Ins. Co., 209 Wis.2d 42, 48, 561 N.W.2d 787 (Ct.App.1997). Summary judgment is appropriate if the record shows that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. WIS. STAT. § 802.08(2); see also Mittnacht v. St. Paul Fire & Cas. Ins. Co., 2009 WI App 51, ¶ 4, 316 Wis.2d 787, 767 N.W.2d 301. The parties here agree there are no disputed facts that prevent summary judgment.

 

¶ 10 The more specific dispute here requires that we interpret a statute and apply it to undisputed facts. This is a question of law that we review de novo. Andersen v. DNR, 2011 WI 19, ¶ 26, 332 Wis.2d 41, 796 N.W.2d 1.

 

Discussion

¶ 11 In their appellate briefs, the parties discuss the question before us both as an insurance policy interpretation question and as a question of what the omnibus statute requires. At oral argument, the parties agreed that it makes sense to resolve their dispute by interpreting the omnibus statute. The parties appropriately agreed that, if the omnibus statute requires that the policy provide coverage for Menards under the circumstances of this case, then American Family must provide coverage, regardless of the particular language in its policy. See Frye v. Theige, 253 Wis. 596, 600–01, 34 N.W.2d 793 (1948) ( “[I]f what is stated in the policy to be a general exclusion of coverage in fact denies to an additional assured the same protection that is given to the named assured neither its form nor its location in the policy will save it or give it validity.”).

 

¶ 12 Accordingly, we focus our attention on applying the omnibus statute to the undisputed facts before us.

 

¶ 13 We give statutory language “its common, ordinary, and accepted meaning, except that technical or specially-defined words or phrases are given their technical or special definitional meaning .” State ex rel. Kalal v. Circuit Court for Dane Cnty., 2004 WI 58, ¶ 45, 271 Wis.2d 633, 681 N.W.2d 110. If the meaning of a statute is unambiguous, we apply that meaning, except when the statute’s plain meaning produces an absurd result. Our supreme court has “repeatedly held that a statute should not be construed so as to work an absurd result even when the language seems clear and unambiguous.” Worachek v. Stephenson Town Sch. Dist., 270 Wis. 116, 124, 70 N.W.2d 657 (1955); see also Teschendorf v. State Farm Ins. Co s., 2006 WI 89, ¶ 62, 293 Wis.2d 123, 717 N.W.2d 258 (court has a duty to “look beyond the plain meaning” when a statute’s “plain meaning produces absurd results”). Absurd results include results the legislature could not have intended. See, e.g., State v. Gilbert, 2012 WI 72, ¶ 53, 342 Wis.2d 82, 816 N.W.2d 215 (“This is an absurd result. The legislature could not have intended … that a committed sexually violent person could, by engaging in criminal behavior, terminate his own commitment.”), cert. denied, 133 S.Ct. 560 (U.S. Oct. 29, 2012) (No. 12–6436).

 

¶ 14 In this case, there is substantial agreement between the parties on the meaning of the omnibus statute as applied generally to non-policyholder tortfeasors. We begin with a general discussion of coverage for permissive users under the omnibus statute. We then address American Family’s contention that the facts here reveal that there should be a narrow exception to the omnibus statute’s general requirement that coverage extends to permissive users.

 

A. The General Meaning Of The Omnibus Statute

¶ 15 This court has explained that the omnibus statute, WIS. STAT. § 632.32, requires that automobile insurance policies provide additional vehicle users “the same protection as is afforded to the named insured.” See Carrell v. Wolken, 173 Wis.2d 426, 436–37, 496 N.W.2d 651 (Ct.App.1992). The omnibus statute accomplishes this by stating:

 

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.

 

WIS. STAT. § 632.32(3)(a).

 

¶ 16 In addition, the omnibus statute effectively imposes a permissive user requirement. It does this by mandating the coverage quoted above, and then providing an exception stating that a policy “may limit coverage … to use that is with the permission of the named insured or an adult member of that insured’s household.” WIS. STAT. § 632.32(5)(a).FN6 The American Family policy at issue here, as is common, limits coverage to permissive users.

 

FN6. WISCONSIN STAT. § 632.32(5)(a) reads, in full:

 

(5) PERMISSIBLE PROVISIONS. (a) A policy may limit coverage to use that is with the permission of the named insured or, if the insured is an individual, to use that is with the permission of the named insured or an adult member of that insured’s household other than a chauffeur or domestic servant. The permission is effective even if it violates s. 343.45(2) and even if the use is not authorized by law.

 

¶ 17 Thus, the omnibus statute requires that automobile policies provide coverage to any person “using” the vehicle with permission of the named insured, “in the same manner” as the policy would if the liable party was the named insured. WIS. STAT . § 632.32(3)(a). We now turn our attention to the meaning of the word “using.”

 

¶ 18 The omnibus statute defines “using” to include “driving, operating, manipulating, riding in and any other use.” WIS. STAT. § 632.32(2)(h) (emphasis added). The parties agree that “using” a vehicle, under both the policy language and the omnibus statute, generally includes the action of loading and unloading a vehicle. This agreement is appropriate. A number of courts have concluded that loading and unloading a vehicle constitutes “use.” See, e.g., Allstate Ins. Co. v. Truck Ins. Exch., 63 Wis.2d 148, 153, 156–57, 216 N.W.2d 205 (1974) (“use” includes removing a rifle from a van during a hunting trip); Austin–White v. Young, 2005 WI App 52, ¶¶ 8–10, 12–13, 279 Wis.2d 420, 694 N.W.2d 436 (“use” includes using a bobcat to load a metal truck part into a pickup truck). This is true when it is reasonable to expect to use the type of vehicle at issue to transport the cargo being loaded or unloaded. See Allstate Ins. Co., 63 Wis.2d at 159–60 (“It was conceded by counsel for [the defendant] that the vehicle could naturally also be expected to be used for hunting trips such as the one in this case.”); Austin–White, 279 Wis.2d 420, ¶ 12 (“[T]he question is whether [the loading activity] … was a reasonably consistent use of the truck.”).

 

¶ 19 Turning to the facts here, because the policyholder, Blasing, would have been “using” her truck if engaged in the loading activity at Menards, and because it is undisputed that the Menards employee was acting with Blasing’s permission to load Blasing’s truck, the normal rule would be that the omnibus statute requires coverage for Menards under Blasing’s American Family automobile policy. American Family argues, however, that this normal rule should not be applied here because it produces an absurd result. Accordingly, we now address the limited exception American Family asks us to read into the omnibus statute.

 

B. American Family’s Absurdity Argument

¶ 20 American Family argues that construing the omnibus statute to require American Family to defend and indemnify Menards would be an absurd result because the injured party is American Family’s policyholder. We understand American Family to be arguing that it would be absurd to require that a premium-paying policyholder’s policy be used to provide a defense to an alleged tortfeasor, and possibly indemnify that tortfeasor, when: (1) the tortfeasor has insurance that would otherwise provide sufficient coverage FN7 and (2) the injured party is the policyholder.FN8 American Family’s argument was perhaps best summed up by its attorney at oral argument:

 

FN7. American Family explained at oral argument that its argument is based on the assumption that, if there is no coverage for Blasing’s injury under the American Family automobile policy, there will be coverage under Menards’ Zurich policy. According to American Family, if that turns out not to be true, then Blasing has a “first-party claim” under her American Family policy. We understand this to be in keeping with American Family’s view that the situation would be different in the context of underinsured or uninsured motorist coverage.

 

FN8. Based on briefing, it appeared that American Family was drawing a distinction between the circumstance in which policyholders seek coverage under their policies and the circumstance in which they do not. However, American Family clarified at oral argument that the result here should not turn on whether a particular policyholder seeks coverage under his or her policy.

 

In addition, prior to oral argument, it appeared that American Family was placing significant weight on the proposition that, from Blasing’s point of view, if American Family was required to defend and indemnify Menards, rather than Menards’ own insurer providing a defense and indemnification, American Family might raise Blasing’s premium. This topic is problematic because there is nothing in the record demonstrating that American Family does or would raise Blasing’s premium in the circumstances presented. Furthermore, this is an odd absurdity argument because a raised premium would be an absurdity of American Family’s own making. That is, American Family itself can avoid what it deems an absurd consequence by simply not raising Blasing’s premium. When American Family’s counsel was asked about this aspect of American Family’s argument during oral argument, he did not explain further. Instead, his response was that “it goes beyond the question of raising the premiums in terms of what’s absurd” and “goes back to the [fact that] … American Family would still have to hire a lawyer to defend Menards against Ms. Blasing’s own claim.” We conclude that we have both insufficient argument and an insufficient record to take this potential-raised-premium factor into account.

 

I think what the legislature would find absurd is the idea that someone who purchases a liability policy for the purpose of defending against the claims of a third party who is alleging [that the third party is] injured, that that policy that the insured paid for must now turn around and [be used to] hire the attorney to defend the alleged tortfeasor against the claims of the policyholder who is herself the injured party.

We are not persuaded.

 

¶ 21 The issue here involves providing coverage to a permissive vehicle user who is not a policyholder. The proposition that policyholders pay for insurance that is sometimes used to, in effect, assist a permissive user tortfeasor is nothing unusual. For example, during oral argument American Family’s attorney agreed that, when a permissive user tortfeasor injures a third party, there is coverage, assuming other requirements for coverage are met.

 

¶ 22 Also, American Family agrees that coverage is contemplated in some situations where the interests of the policyholder are adverse to his or her automobile insurer to the extent that the insurer may provide a defense to an alleged tortfeasor who injures the policyholder. This would arise, for example, if a policyholder loaned his car to an uninsured driver who drove over the policyholder’s foot and there was a dispute as to whether the permissive user was negligent.

 

¶ 23 Nonetheless, American Family contends that uninsured or underinsured permissive-user-tortfeasor scenarios are different because coverage arises under a different portion of the automobile policy-the underinsured or uninsured portion. In these scenarios, according to American Family, a policyholder would expect that his or her policy would provide a defense to the tortfeasor who injured the policyholder. In the words of counsel for American Family: “I believe a reasonable insured understands that if they make a first-party claim [under] UM coverage UIM coverage, that the insurance company has the right to defend and to dispute that claim because it’s a first-party claim.”

 

¶ 24 We conclude that American Family is drawing distinctions that neither legislators nor reasonable policyholders would make. Policyholders understand that their interests may frequently diverge from the interests of their insurance companies. And, as American Family admits, a policyholder generally understands that his or her own insurance company may provide a defense to parties with interests adverse to the interests of the policyholder.

 

¶ 25 On a more concrete level, why would a policyholder care which insurance company provides defense counsel (or indemnification for that matter) to a tortfeasor, if there is no reason to think that this difference will affect the result of the proceeding? For example, in this case Blasing alleges that she was negligently injured by a Menards employee. Whether provided by American Family or Zurich, Menards will have representation. And, whether or not the Menards employee is determined to be negligent, the effect on Blasing is the same regardless which insurer provides Menards with a defense and indemnification. Recall that American Family’s premise is that there is sufficient coverage for Blasing’s alleged damages under either insurer’s policy.FN9

 

FN9. And, it bears repeating, American Family has failed to adequately support its contention that one possible difference is a potential increase in Blasing’s premium. See footnote 8, supra.

 

¶ 26 The attorney for American Family suggested at oral argument that, if we hold that Menards has coverage here, it will open a door that has previously been thought closed. However, the parties provide no reason to suppose that alleged tortfeasors like Menards have not, in the past, benefitted from the automobile policies of their customers. At least one case that the parties discuss suggests otherwise.

 

¶ 27 In Lukaszewicz v. Concrete Research, Inc., 43 Wis.2d 335, 168 N.W.2d 581 (1969), a trucking company’s employee drove a truck onto the premises of a concrete company. Id. at 337. An employee of the concrete company began loading concrete slabs onto the truck and, in the process, injured the trucking company’s driver. Id. The injured driver sued the concrete company. Id. Although the concrete company, like Menards here, had a general comprehensive liability policy, the company nonetheless sought coverage under the trucking company’s automobile policy.

 

¶ 28 Pertinent here, one issue in Lukaszewicz was whether the automobile insurance carrier could avoid providing coverage to the concrete company because loading and unloading accidents were excluded from coverage in the automobile policy if the accident occurred on the premises of the alleged tortfeasor. Id. at 339–40. The Lukaszewicz court held that the exclusion was impermissible under the omnibus statute because the exclusion thwarted the statute’s requirement that permissive users have the same coverage as a named insured would have. Id. at 340–41.

 

¶ 29 We do not mention Lukaszewicz because it sheds any direct light on the merit of American Family’s argument here—it does not. The argument American Family makes here was not made or addressed by the Lukaszewicz court. Appellant’s Brief, Lukaszewicz v. Concrete Research, Inc., 43 Wis.2d 335, 168 N.W.2d 581 (1969) (No. 311), found in VOL. 3033, APPENDICES & BRIEFS, tab 5 (Wis. State L. Libr.). Rather, we point to Lukaszewicz to respond to American Family’s suggestion that a decision in favor of Menards would break new ground. If that is true, it is not discernible based either on the case law we have reviewed or on the record before us.

 

¶ 30 What is left of American Family’s absurdity argument is simply the abstract idea that it is unfair or unexpected that an injured policyholder bringing suit against a tortfeasor would face an attorney supplied by her own insurance company, and that an eventual payout might come from her insurer. This result may seem odd to some, but it does not rise to the level of being unreasonable or absurd. If the legislature, with its attention now focused on this specific scenario, believes that tortfeasors in Menards’ position should not have such coverage, the legislature can amend the omnibus statute.

 

¶ 31 We close by observing that the result here would be the same even if we analyzed the issue as a policy construction question. Looking at the policy language, American Family admits that, in most cases, the test for whether a person is “using” a vehicle, and thus is covered under the policyholder’s own insurance, is whether the use is “reasonably consistent with the inherent nature of the vehicle.” Lawver v. Boling, 71 Wis.2d 408, 416, 238 N.W.2d 514 (1976). And, courts have used this test to determine if loading and unloading of a vehicle is within a vehicle’s inherent nature and therefore constitutes use. American Family nonetheless argues that, under Lawver and other cases, there is an overriding principle that applies. In the words of Lawver, the principle is that policies should be construed consistent with “the risk for which the parties to the contract reasonably contemplated there would be coverage.” Id. According to American Family, the problem is not that a reasonable policyholder would not contemplate that loading of his or her truck with permission by the employee of a business is not “use” of his or her vehicle. Rather, American Family contends, the problem is that if this “use” resulted in the truck owner being injured and then suing the business, no reasonable person would think that a policyholder’s own insurance company would be compelled to defend the lawsuit against the policyholder. It is sufficient to say here that, even if we were to analyze this dispute as one over policy interpretation, we would reach the same result for the reasons discussed above.

 

C. Menards’ Safe Place Argument

¶ 32 Menards seemingly argues that, if American Family must provide a defense and indemnity to Menards under Blasing’s automobile policy, American Family must also provide a defense to Menards for purposes of Blasing’s safe place claim. American Family does not dispute the general proposition that an insurer has a duty to defend all claims in a lawsuit, even if one or more of the claims are not covered. What American Family does say is that the question of how the “respective duties of American Family and Zurich would play out, if Menards qualified as an insured under the American Family policy …, was not raised in the circuit court and is not an issue on appeal” (emphasis in original). It may be that American Family means to argue that, if there is coverage under the Zurich policy for the safe place claim, then perhaps it is Zurich that should be defending the entire lawsuit. We are unsure. We conclude that the briefing before us on this issue is inadequate—it is not apparent that the parties disagree on a legal issue that we might resolve. If, on remand, a dispute in this regard does arise, the circuit court will have to address it.

 

Conclusion

¶ 33 The omnibus statute requires that any permissive user of an insured’s vehicle must be extended coverage in the same manner as coverage is extended to the policyholder. American Family has failed to demonstrate that the application of this requirement to the facts before us is an absurd result. We conclude that American Family has a duty to defend and indemnify Menards. We therefore reverse the decision of the circuit court.

 

Order reversed and cause remanded for further proceedings.

 

Recommended for publication in the official reports.