Wisconsin Lawyer
Vol. 85, No. 3, March 2012
Insurance
Coverage – “Four Corners” – Exclusions
Olson v. Farrar, 2012 WI 3 (filed 31 Jan. 2012)
Olson bought a trailer home, which he planned to move to a new location with the assistance of Farrar. After hitching the trailer home to his farm tractor, Farrar began driving toward the new location. Olson followed in his own vehicle. During the eight-mile journey, the tractor stalled on a hill and the trailer home rolled backward, slamming into Olson’s vehicle. Olson sued Farrar for negligence. Farrar tendered his defense to his insurer, Mt. Morris Mutual Insurance Co., which provided an initial defense. The circuit court then found that there was no coverage and dismissed the case. The court of appeals reversed, finding coverage and remanding the case. See 2010 WI App 165.
The supreme court affirmed in an opinion authored by Justice Bradley. The supreme court’s decision addressed issues regarding coverage, exclusions, and exceptions to the exclusions. First, the court discussed the distinction between the duty to indemnify and the duty to defend in light of the four-corners rule, which requires insurers to appoint defense counsel for insureds without looking beyond the four corners of individual complaints (see ¶ 31).
“Wisconsin policy is clear. If the allegations in the complaint, construed liberally, appear to give rise to coverage, insurers are required to provide a defense until the final resolution of the coverage question by a court. Insurers who refuse to provide an initial defense do so at their own peril” (¶ 30). The four-corners rule ensures that insurers do not frustrate their insureds’ expectations by prematurely resolving coverage questions in the insurer’s favor. “However, the purpose of the four-corners rule has been served once the insurer has elected to provide a defense pending a final determination on coverage. At that point, the insurer has protected its insured by providing a defense. The insurer has also protected itself from liability for a breach of contract. The four-corners rule is not further implicated, and the court proceeds to a determination of coverage” (¶ 34). In resolving coverage issues, the circuit court may need to consider relevant extrinsic evidence (i.e., facts outside the complaint) (see ¶ 39).
The court then turned to the coverage issues. The first issue was whether the damage “resulted from” the trailer home (in which case there would be coverage) or if it resulted exclusively from the tractor (in which case there would not be coverage). The court held that the phrase “results from” is ambiguous and therefore must be construed in favor of coverage. “Although the phrase could be interpreted narrowly to mean the cause of the property damage, it could just as easily be interpreted to encompass any factor that contributed to the property damage” (¶ 53).
The second coverage issue turned on whether the tractor was a motor vehicle, which the policy defined as a thing “designed for use on public roads” (¶ 56). The supreme court also found this term to be ambiguous and therefore construed it in favor of coverage. “The phrase ‘designed for use’ could refer to any conceivable purpose to which a vehicle could be put, and one conceivable purpose for a farm tractor is use on a public road. By contrast, the phrase ‘designed for use’ could refer more narrowly to the particular purpose for which the vehicle is contrived. The particular purpose for which a farm tractor is contrived is use on a farm, not a public road” (¶ 6).
The third coverage issue involved the exclusion for property “rented to, occupied by, used by, or in the care of an insured” (¶ 62) (internal quotations omitted). The court held this exclusion clearly did not apply to Olson’s own vehicle when it was struck by the trailer home (see ¶ 64). “The more challenging question is whether this exclusion precludes coverage for the trailer home because it was “used by, or in the care of” Farrar (id.). The court rejected the court of appeals’ narrow construction of this term as requiring that the property be in “sole possession” of its insured. At bottom, the supreme court said, this issue involves “unresolved factual issues” that required remanding the issue to the circuit court (see ¶ 67).
Motor Vehicle Law
Fleeing an Officer – “Willful” Disregard – Defenses
State v. Hanson, 2012 WI 4 (filed 1 Feb. 2012)
A deputy sheriff stopped Hanson for speeding on an interstate highway. The traffic stop was acrimonious: the deputy twice extended his baton to try to persuade the defendant to remain in his vehicle. After the deputy informed the defendant that he was under arrest, the defendant drove away from the scene, and a pursuit ensued. During the pursuit, the defendant called the 911 dispatcher asking for directions to the nearest police station because, according to the defendant, the deputy was “endangering my life.” After nearly striking another deputy’s squad car, the defendant was placed in custody and charged with obstructing an officer and fleeing an officer. A jury convicted the defendant. In a published decision, the court of appeals affirmed. See 2010 WI App 146. In a majority decision authored by Justice Roggensack, the supreme court affirmed the court of appeals.
The defendant’s appeal focused on several issues relating to the fleeing-an-officer charge. As pertinent here, Wis. Stat. section 346.04(3) provides that “[n]o operator of a vehicle, after having received a visual or audible signal from a traffic officer, or marked police vehicle, shall knowingly flee or attempt to elude any traffic officer by willful or wanton disregard of such signal so as to interfere with or endanger the operation of the police vehicle, or the traffic officer or other vehicles or pedestrians …” (emphasis added). The defendant argued that “‘willful or wanton,’ as it is employed in Wis. Stat. § 346.04(3), requires an evil or malicious state of mind when disregarding the officer’s direction. He asserts his conduct could not satisfy the statutory standard because he fled out of fear that the officer would injure him” (¶ 18).
The supreme court concluded that the words “willful or wanton” are phrased in the disjunctive and therefore either willful acts or wanton acts demonstrating disregard for a traffic officer’s signal will violate the statute. (see ¶ 30 n. 8). In this case, the circuit court properly instructed the jury that a finding of willful disregard would satisfy statutory requirements (see ¶ 30).
As for the meaning of willful in this statute, the court concluded that “willful” modifies “disregard” and, in that context, “`willful’ requires a subjective understanding by the defendant that a person known by the defendant to be a traffic officer has directed the defendant to take a particular action, and with that understanding, the defendant chose to act in contravention of the officer’s direction” (¶ 22). Contrary to the defendant’s assertion, an act done “willfully” does not require a showing of “personal hate or ill will” (id.).
As to other issues the court concluded that “there does not exist a subjective, good-faith exception to the fleeing law, and [the defendant’s] opportunity to demonstrate any justification for his behavior was through his self-defense claim, which the jury considered and rejected. Additionally, we conclude that the circuit court was correct to exclude testimony about the traffic officer’s alleged confrontational character because the officer was not a ‘victim’ under Wis. Stat. § 904.04(1)(b) [the provision of the Rules of Evidence that deals with the admission of evidence, offered by the accused, about a pertinent trait of character of the crime victim]. Finally, we conclude that neither the Constitution nor the interest of justice warrants a new trial, as no constitutional infirmities have been raised and the real controversy has, indeed, been tried” (¶ 47).
Justice Bradley filed a concurring opinion. Chief Justice Abrahamson dissented.
Trials
Prospective Jurors – Judge’s Family
State v. Sellhausen, 2012 WI 5 (filed 1 Feb. 2012)
Among the pool of prospective jurors for the defendant’s trial for battery to a peace officer and disorderly conduct was the judge’s daughter-in-law, who testified that she could be fair and impartial. Neither party moved to strike her for cause, but the defense eliminated her with a peremptory challenge. The jury convicted the defendant. The court of appeals reversed because the trial judge had not struck his daughter-in-law from the panel. It held that “presiding judges must sua sponte remove their immediate family members from the panel of potential jurors.” See 2010 WI App 175.
The Wisconsin Supreme Court reversed. In a lead opinion written by Chief Justice Abrahamson, the court held that the situation was governed by the rule in State v. Lindell, 2001 WI 108, 245 Wis. 2d 689, 629 N.W.2d 223. “Because the defendant exercised a peremptory strike to remove the circuit court judge’s daughter-in-law from the jury, and because the defendant does not claim the jury was unfair or partial, a new trial is not required under the circumstances of the present case. The defendant has not shown that the presence of the challenged juror in the pool of potential jurors affected the defendant’s substantial rights” (¶ 7). The lead opinion agreed with the court of appeals that it is much “cleaner” when a judge removes an immediate family member sua sponte (see ¶ 29), but concerns about the appearance of impropriety (see ¶ 30), the creation of an “adversarial stance” between the judge and counsel (see ¶ 34), or “robbing” a party of its “right to aggressively question” a prospective juror (¶ 40) did not warrant reversing the conviction.
Justice Ziegler filed a concurring opinion that adopted her concurrence in State v. Tody, 2009 WI 31, 316 Wis. 2d 689, 764 N.W.2d 737. Because she was joined by Justice Prosser, Justice Roggensack, and Justice Gableman, this concurrence is the majority’s opinion on this point (see ¶ 73). Essentially, the Tody approach “urge[s] circuit court judges to exercise their inherent authority to ensure the fair, efficient, and effective administration of justice by considering whether the removal of their immediate family members from a panel of potential jurors or whether recusal from the case would avoid such problems” (¶ 75).
Chief Justice Abrahamson, joined by Justice Bradley, filed a concurring opinion that criticized Justice Ziegler’s Tody concurrence on multiple grounds, including that its “concepts are too broad for circuit courts to apply in a meaningful way in determining whether to disqualify a challenged juror” (¶ 59). “As a result of Justice Ziegler’s concurrences, appellate courts are left to wonder, as the court of appeals in the present case wondered, what legal authority they can rely on to review a circuit court if a case like Tody arises in the future” (¶ 65). The concurrence also discusses whether such authority should be rooted in a “bias” rationale (judge or juror) (see ¶ 67) or addressed through the court’s superintending and administrative authority (see ¶ 68).
Wisconsin Lawyer
