Ainsworth v. Berg ( 1948 )

The plaintiff Ainsworth and the impleaded defendant Rogers were coemployees of the Copps Company. Rogers was driving a truck of the Copps Company on company business when it collided with the automobile driven by defendant Berg.

Counsel so forcefully argued its first point with respect to notice as to cause the court to lose sight of the second:

"Does an exclusion in the omnibus coverage clause against a suit by one employee of an insured against a coemployee and a general exclusion clause which excludes coverage for liability for injury to an ``employee of the insured,' exclude coverage in an action by an employee of the named insured against such coemployee?"

Sec. 204.30(3), Stats., provides:

"No such policy shall be issued or delivered in this state to the owner of a motor vehicle, unless it contains a provision reading substantially as follows: The indemnity provided by this policy is extended to apply, in the same manner and under the same provisions as it is applicable to the named assured, to any person or persons while riding in or operating any automobile described in this policy when such automobile is being used for purposes and in the manner described in said policy. Such indemnity shall also extend to any person, firm or corporation legally responsible for the operation of such automobile. The insurance hereby afforded shall not apply unless the riding, use or operation above referred to be with the permission of the assured named in this policy, or if such assured is an individual, with the permission of an adult member of such assured's household other than a chauffeur or domestic servant; provided, however, that no insurance afforded by this paragraph shall apply to a public automobile garage or an automobile repair shop, sales agency, service station and/or the agents or employees thereof. In the event an automobile covered by this policy is sold or transferred the purchaser or transferee shall not be an additional insured without consent of the company, indorsed hereon."

This statutory extension of the insurance to persons other than the named insured "in the same manner and under the same provisions as it is applicable to the named assured" means that if, under certain conditions or circumstances, the policy does not afford coverage to the named assured, then under the same conditions no coverage is afforded to an additional assured under the omnibus coverage clause. Bernardv. Wisconsin Automobile Ins. Co. (1933), 210 Wis. 133,245 N.W. 200; Cullen v. Travelers Ins. Co. (1934),214 Wis. 467, 253 N.W. 382; Madison v. Steller (1937),226 Wis. 86, 275 N.W. 703; Brandt v. Employers' LiabilityAssur. Corp. (1938), 228 Wis. 328, 280 N.W. 403.

It is noteworthy that in the Cullen Case, supra, the company excluded coverage of anyone under sixteen years of age. The driver of the car was a boy fifteen who had a special permit authorizing him to drive. The accident occurred in 1928. In 1931 the legislature enacted what is now sec. 204.34 of the statutes (ch. 477, Laws of 1931). It provides in part:

"(1) No policy of insurance, agreement of indemnity or bond covering liability or loss arising by reason of the owner, ship, maintenance or use of a motor vehicle issued in this state shall exclude from the coverage afforded or provisions as to benefits therein any of the following:

"(a) Persons while driving or manipulating a motor vehicle, who shall be of an age authorized by law so to do; . . ."

The law permitting the exclusion of coverage of employees of the named assured and additional assureds (Brandt Case,supra,) has been established by the cases cited above for more than fifteen years. Decisions of the courts should not be changed by later decisions unless the need therefor is compelling — not as a matter of pride on the part of the court, but in the interests of certainty in the law by which people may be guided. Originally the question presented by all of these cases was a simple matter of construction of a contract and there can be no great moral need for changing the rule of construction which they establish.

The legislature has had ample opportunity to change the law and has not seen fit to do so.

Appellants contend that this court has already upset the rule by its decisions in Narloch v. Church (1940), 234 Wis. 155,290 N.W. 595, and Schenke v. State Farm Mut. AutomobileIns. Co. (1944), 246 Wis. 301, 305,16 N.W.2d 817. The Narloch Case was distinguished from Brandt v.Employers' Liability Assur. Corp., supra, on the ground that the common employer of Narloch and Church was the state of Wisconsin, which had no liability in tort to an injured third party. Since the state was not liable for the negligence of Miss Church, its employee, there was nothing which the insurance carrier could be called upon to indemnify the state for, and it therefore could not be said to be an additional insured under the policy there under consideration. (See opinion in Narloch v. Church from last paragraph on page 160 through second paragraph on page 163.)

In Schenke v. State Farm Mut. Automobile Ins. Co., supra, the attempted exclusion was:

"The insurance with respect to any person or organizationother than the named insured does not apply ``(a) to injury to or death of any person who is a named insured.'"

The plaintiff was the owner of the automobile which Bunich was driving, with plaintiff's consent, at the time of the accident. Obviously, if there were two assureds named in that policy and one was injured while the other was negligently operating it so as to be liable to the guest, the policy would indemnify because there was no attempt by the company issuing the policy to exclude bodily injuries to named assureds as against each other.

Since the attempted limitation was specifically made to apply to any person other than the named insured, it was in violation of sec. 204.30(3), Stats., which in effect prohibits any restrictions on coverage of additional assureds beyond the restrictions applicable to the "named assured."

The court in the Schenke Case, supra, said (p. 305):

"We are not here considering or deciding what limitations might be included under general exclusion clauses. We are simply holding that the omnibus coverage clause in appellant's policy is in violation of sec. 204.30(3), Stats., and therefore void."

Language cannot be much more explicit.

It is pointed out in the brief of amicus curiae that the compulsory-insurance statute authorizes those required to file policies to have policies which exclude coverage to coemployees as indicative of positive legislative approval of such exceptions in indemnity contracts. At all events those who have not had accidents are free to drive automobiles uninsured or with such coverage as they wish to purchase.

The only limitation upon the type of coverage that an assured shall have is contained in sec. 204.34, Stats. Sub. (2) of sec. 204.34 provides:

"No policy of insurance, agreement of indemnity or bond referred to in subsection (1) shall exclude from the coverage afforded or the provisions as to the benefits therein provided persons related by blood or marriage to the assured."

Conceivably, an automobile owner could elect to be a self-insurer on all claims except for injuries to kinfolk and buy a policy which covered only relatives by blood or marriage. The omnibus coverage clause would then give persons driving the automobile with the owner's consent like limited coverage. But whatever coverage he does buy applies to the additional assureds by force of sec. 204.30(3), Stats.

This illustration may be extreme, but it is supplied in an effort to clarify the situation for those who say it is strange that if the restrictive clause is in one part of the policy it is effective and if in another, void.

The answer is that the legislature has prevented additional or greater restrictions in omnibus coverage clauses, but has not yet seen fit to interfere with the assured's right to make exclusions applicable both to himself and others. It likewise has not seen fit to provide that the statutory omnibus clause shall give greater coverage than the policy extends to the named assured.

This court has consistently held that a general exclusion clause excepting liability for personal injuries to employees of the named assured is effective, the last case being Frye v.Theige (1948), post, p. 596, 34 N.W.2d 793.

It follows that the defendants Edwin Berg and Farmers Mutual Automobile Insurance Company are entitled to judgment against Orville Rogers for contribution; that they are not entitled to judgment for contribution against the Hardware Mutual Casualty Company for either property damage or damages for personal injuries of plaintiff Ainsworth; that Orville Rogers is not entitled to judgment against the Hardware Mutual Casualty Company for attorneys' fees and costs because of its refusal to defend him in this action. By the Court. — The mandate previously issued is vacated and set aside. The judgment of the trial court is affirmed in part and reversed in part and the cause is remanded with instructions to enter judgment in accordance with this opinion. The respondent Hardware Mutual Casualty Company to recover its costs on the appeal.