Casper v. Am. Int'l South Ins. Co.

800 N.W.2d 880

2011 WI 81

Bryan CASPER, Susan Casper, Michael Casper, a minor, by his Guardian ad Litem, Thomas Casper, a minor, by his Guardian ad Litem, Sara Janey, a minor, by his Guardian ad Litem, and Sharon Janey, Plaintiffs–Respondents–Petitioners,Blue Cross Blue Shield United of Wisconsin, Primax Recoveries, Inc., Allstate Insurance Company, American Family Mutual Insurance Company and Milwaukee County Department of Health & Social Services, Involuntary–Plaintiffs,

v.AMERICAN INTERNATIONAL SOUTH INSURANCE COMPANY, Mark Wearing, Bestway Systems, Inc., RJW, Inc., Transport Leasing/Contract, Inc., Applied Industrial Technologies, Inc., Jeffrey E. Wenham, United States Fidelity and Guaranty Company, Federal Insurance Company, Continental Casualty Company, and John Doe, Defendants,Ryder Truck Rental, Inc. and Old Republic Insurance Company, Defendants–Appellants.Bryan Casper, Susan Casper, Michael Casper, a minor, by his Guardian ad Litem, Thomas Casper, a minor, by his Guardian ad Litem, Sara Janey, a minor, by her Guardian ad Litem, and Sharon Janey, Plaintiffs–Appellants–Petitioners,Blue Cross Blue Shield United of Wisconsin, Primax Recoveries, Inc., Allstate Insurance Company, American Family Mutual Insurance Company and Milwaukee County Department of Health & Social Services, Involuntary–Plaintiffs,

v.American International South Insurance Company, Mark Wearing, Bestway Systems, Inc., RJW, Inc., Transport Leasing/Contract, Inc., Applied Industrial Technologies, Inc., Jeffrey E. Wenham, Ryder Truck Rental, Inc., Old Republic Insurance Company, United States Fidelity and Guaranty Company, Federal Insurance Company, Continental Casualty Company and John Doe, Defendants,National Union Fire Insurance Company of Pittsburgh, PA., Defendant–Respondent.Bryan Casper, Susan Casper, Michael Casper, a minor, by his Guardian ad Litem, Thomas Casper, a minor, by his Guardian ad Litem, Sara Janey, a minor, by her Guardian ad Litem, and Sharon Janey, Plaintiffs–Respondents–Petitioners,Blue Cross Blue Shield United of Wisconsin, Primax Recoveries, Inc., Allstate Insurance Company, American Family Mutual Insurance Company and Milwaukee County Department of Health & Social Services, Involuntary–Plaintiffs,

v.American International South Insurance Company, Mark Wearing, Bestway Systems, Inc., RJW, Inc., Transport Leasing/Contract, Inc., Applied Industrial Technologies, Inc., Ryder Truck Rental, Inc., Old Republic Insurance Company, United States Fidelity and Guaranty Company, Federal Insurance Company, Continental Casualty Company, National Union Fire Insurance Company of Pittsburgh, PA. and John Doe, Defendants,Jeffrey E. Wenham, Defendant–Appellant–Petitioner.

Nos. 2006AP1229

2006AP2512

2007AP369.

Supreme Court of Wisconsin.

Argued Dec. 1, 2010.Decided July 19, 2011.

For Plaintiffs–Respondents–Petitioners there were briefs by Monte E. Weiss and Charles W. Kramer and oral argument by Alan H. Deutch, Deutch & Weiss, LLC.For the Defendants–Appellants there was a brief by Larry J. Britton and Shannon M. Trevithick, Britton & Associates, S.C.For Plaintiffs–Appellants–Petitioners there were briefs by Alan H. Deutch, Charle W. Kramer, James L. McAlister and Monte E. Weiss, Deutch & Weiss, LLC, and oral argument by Monte E. Weiss.For Defendant–Respondent there was a brief by Ross A. Anderson and Timothy H. Posnanski, Whyte Hirschboeck Dudek S.C., and oral argument by Ross A. Anderson.For Defendant–Appellant–Petitioner there were briefs by Robert J. Lauer and Patti J. Kurth, Kasdorf, Lewis & Swietlik, S.C., and oral argument by Robert J. Lauer.For Plaintiffs–Respondents–Petitioners there were briefs by Alan H. Deutch, Charle W. Kramer, James L. McAlister and Monte E. Weiss, Deutch & Weiss, LLC, and oral argument by Alan H. Deutch.An amicus brief was filed by James A. Friedman and Katherine Stadler, Godfrey & Kahn, S.C., for the Wisconsin Insurance Alliance and the Wisconsin Civil Justice Council, Inc. and by Andrew C. Cook, The Hamilton Consulting Group LLC, for the Wisconsin Civil Justice Council, Inc.An amicus brief was filed by Catherine M. Rottier, Boardman, Suhr, Curry & Field LLP, for Wisconsin Defense Counsel.DAVID T. PROSSER, J.

¶ 1 This is a review of a published decision of the court of appeals, Casper v. American International South Insurance Co., 2010 WI App 2, 323 Wis.2d 80, 779 N.W.2d 444,¹ affirming three orders of the Milwaukee County Circuit Court, Christopher R. Foley, Judge. The case arises out of a tragic accident that occurred when a truck driven by Mark Wearing collided with the Casper family's minivan while it was stopped at an intersection. Bryan, Susan, Michael, and Thomas Casper, as well as Sara Janey, another passenger in the Casper vehicle (collectively, the Caspers), were all injured, some very seriously, in the accident.

¶ 2 The Caspers brought suit against 14 named defendants. Only 5 are relevant for purposes of this appeal: Mark Wearing; his co-employers Bestway Systems, Inc. (Bestway) and Transport Leasing/Contract Inc. (TLC); Bestway's CEO, Jeffrey Wenham (Wenham); and TLC's excess insurer, National Union Fire Insurance Company of Pittsburgh PA. (National Union). Both the Caspers and Wenham petitioned this court for review of the decision of the court of appeals.

¶ 3 These appeals present three issues to the court. First, did the circuit court properly exercise its discretion in granting National Union Fire Insurance Company an enlargement of time to answer the Caspers' Fifth Amended Complaint? National Union failed to answer the amended complaint within the time period required by statute but it claimed excusable neglect. The circuit court agreed. The Caspers contend that National Union did not satisfy the requirements for excusable neglect and that the circuit court erroneously exercised its discretion.

¶ 4 Second, can the Caspers maintain a direct action claim against National Union when its policy of insurance was neither delivered nor issued for delivery in Wisconsin but the insurance policy covers the insured's “business operations” conducted in this state? Relying on Kenison v. Wellington Insurance Co., 218 Wis.2d 700, 582 N.W.2d 69 (Ct.App.1998), the circuit court and court of appeals answered “no.” In this review, the Caspers contend that a plain reading of Wis. Stat. § 631.01(1), together with Wis. Stat. § 632.24, authorizes direct action against an insurer in any of four situations stated in the disjunctive in Wis. Stat. § 631.01(1). Only one of these four situations requires delivery of the policy in Wisconsin.²

¶ 5 Third, can a corporate officer be held personally liable for a non-intentional tort that occurs while he is performing his job and which is within the scope of his employment for a solvent and insured corporation? If the answer is “yes,” do public policy factors preclude a finding of liability on the part of Jeffrey Wenham as a matter of law? Both the circuit court and the court of appeals concluded that a corporate officer may be held personally liable for negligence that occurs while the corporate officer is performing duties for the corporation. Neither court addressed public policy issues. The court of appeals determined that there were sufficient issues of fact in the record to require additional proceedings rather than dismiss the claim on summary judgment.

¶ 6 We conclude the following:

¶ 7 First, the circuit court did not erroneously exercise its discretion in finding excusable neglect and granting National Union's motion to enlarge time by seven days to answer the amended complaint. It also did not erroneously exercise its discretion by denying the Caspers' motion for default judgment. The decision of the court of appeals on this issue is affirmed.

¶ 8 Second, a liability insurance policy need not be delivered or issued for delivery in this state in order to subject the insurer to a direct action under Wis. Stat. §§ 632.24 and 803.04(2). Kenison is accordingly overruled, and the decision of the court of appeals on this issue is reversed.

¶ 9 Third, a corporate officer may be liable for non-intentional torts committed in the scope of his employment. In this instance, however, Jeffrey Wenham's actions are too remote to provide a basis for personal liability. We therefore reverse the court of appeals on this issue.

¶ 10 In sum, the decision of the court of appeals is affirmed in part, reversed in part, and the case is remanded to the circuit court for further proceedings consistent with this opinion.

I. FACTUAL BACKGROUND

¶ 11 The Casper and Janey families are from Sheboygan. On May 10, 2003, the Caspers took a family trip to Milwaukee. They were accompanied by son Michael's friend, Sara Janey.

¶ 12 Bryan Casper was driving the family minivan when he stopped at the intersection of 51st Street and Brown Deer Road in Brown Deer. Suddenly, the minivan was hit from behind by a truck driven by Mark Wearing. Wearing was traveling at approximately 40 miles per hour.

¶ 13 As a result of the collision, all five passengers in the Casper minivan were injured. Michael Casper was rendered a quadriplegic. Sara Janey suffered many serious injuries, including a traumatic brain injury, multiple leg and pelvis fractures, and loss of use of one of her kidneys. Bryan, Susan, and Thomas Casper all suffered lesser, but still serious, injuries.

¶ 14 Investigators found Wearing to be under the influence of oxycodone, diazepam, and nordiazepam at the time of the accident; they found two prescription pill containers in the cab of his truck.

¶ 15 At the time of the accident, Wearing was co-employed by TLC and Bestway. TLC is a foreign corporation doing business in Wisconsin, with its principal offices located in Minnesota. National Union is an insurer of TLC.

¶ 16 Bestway is a foreign corporation doing business in Wisconsin, with its principal offices located in Ohio. Jeffrey Wenham is the CEO of Bestway and an employee of Bestway's owner, RJW, Inc., a holding company....