Lancer Ins. Co. v. Personalized Coaches Inc.

572 F.Supp.3d 621

LANCER INSURANCE COMPANY, Plaintiff,

v.PERSONALIZED COACHES INC., et al., Defendants.

Case No. 16-cv-0966-bhl

United States District Court, E.D. Wisconsin.

Signed November 16, 2021

Pamela M. Schmidt, Jay R. Starrett, Scopelitis Garvin Light Hanson and Feary PC, Milwaukee, WI, for Plaintiff.

Michael P. Crooks, Von Briesen & Roper SC, Madison, WI, for Defendant Personalized Coaches Inc.

Christine Deann Esser, Habush Habush & Rottier SC, Sheboygan, WI, Timothy S. Trecek, Habush Habush & Rottier SC, Milwaukee, WI, for Defendants Christopher J. Koleno, Lisa M. Koleno.

DECISION AND ORDER

BRETT H. LUDWIG, United States District Judge

On February 29, 2016, father and son, Christopher J. Koleno (Koleno) and Christopher A. Koleno, Sr. (Koleno's son), were performing maintenance on an out-of-service bus owned by Personalized Coaches, Inc. (Personalized) when the bus rolled forward, injuring the father and killing the son. ECF No. 1 at 3–4. In this lawsuit, Personalized's insurer, Lancer Insurance Company (Lancer), seeks a declaration that it does not owe coverage either to Personalized or to Koleno and his son's surviving spouse, Lisa M. Koleno (collectively, the Koleno Defendants), for any claims arising out of the accident. Id. at 1, 3–4, 13–14. Lancer has filed a motion for summary judgment, ECF No. 27, which Personalized and the Koleno Defendants¹ oppose. ECF Nos. 32, 36. For the reasons given below, the Court grants Lancer's motion and directs the clerk to enter judgment in the insurer's favor.

BACKGROUND

Lancer is an insurance company incorporated under the laws of the State of Illinois, with its principal place of business in Long Beach, New York. ECF No. 20 ¶ 1. Personalized is a coach and charter bus services business incorporated under the laws of the State of Wisconsin, with its principal place of business in Waldo, Wisconsin. Id. ¶¶ 2, 10. Lancer issued two liability insurance policies to Personalized: (1) a Commercial General Liability policy (the CGL Policy); and (2) a Business Auto Liability policy (the Auto Policy). Id. ¶¶ 8–9.

The CGL Policy is identified under policy number GL157614#5 and has effective coverage dates of July 22, 2015 through July 22, 2016. Id. ¶ 8. Subject to policy exclusions, the CGL Policy provides Bodily Injury and Property Damage Liability coverage for "those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies." Id. at 5–6. It also provides Medical Payments coverage for medical expenses for bodily injury caused by an accident, regardless of fault, at the insured's premises, on ways next to the premises, or because of the insured's operations, subject to certain provisos. Id. at 6–7. The Medical Payments coverage is also subject to enumerated policy exclusions. Id.

The Auto Policy is identified under policy number BA163962#5 and has effective coverage dates of July 22, 2015 through July 22, 2016. Id. ¶ 9. Subject to policy exclusions, the Auto Policy provides Liability Coverage for "all sums an ‘insured’ legally must pay as damages because of ‘bodily injury’ or ‘property damage’ to which this insurance applies, caused by an ‘accident’ and resulting from the ownership, maintenance or use of a covered ‘auto.’ " Id. at 9–11. Covered autos include those designated autos identified in the policy's Declarations pages, along with certain "Hired" and "Nonowned" Autos. Id. at 9. The Auto Policy also includes both a Form MCS-90B Endorsement, providing coverage required by Section 18 of the Bus Regulatory Reform Act of 1982, and a Form F Uniform Motor Carrier Bodily Injury and Property Damage Liability Insurance Endorsement. Id. at 11, 12.

At all relevant times, Personalized owned several buses, including a 1995 MCI charter bus identified by vehicle number 1M8SDMMA1SP047041 (the Subject Bus). Id. ¶¶ 10–11. The Subject Bus had been completely out of use for approximately a year before the February 2016 accident, with its last ride as a charter bus having occurred no later than April 2015. ECF No. 31 ¶ 23 (citing ECF No. 30-1 at 46). Accordingly, the Subject Bus was not scheduled or otherwise listed among the insured vehicles in the Auto Policy when the accident occurred. ECF No. 20 ¶ 12.

At all relevant times, Personalized employed Christopher J. Koleno, who is a citizen and resident of the Village of Elkhart Lake, Wisconsin. Id. ¶¶ 3, 13. Koleno began working on the engine and transmission of the Subject Bus around Thanksgiving 2015. ECF No. 31 ¶ 8. Before beginning this work, Koleno told his boss, John Jeske, that he would need assistance with the project. Id. ¶ 9. Jeske authorized him to find people outside Personalized to assist, and Koleno then enlisted his son, Christopher A. Koleno, Sr., to help with the repairs. Id. ¶¶ 10–11. Koleno's son was not employed by Personalized and did not receive any compensation from Personalized. Id. ¶ 15. On or about February 29, 2016, Koleno and his son were working on the Subject Bus at Personalized's place of business when the bus rolled forward, injuring Koleno and killing his son. Id. ¶¶ 16–17; ECF No. 20 ¶¶ 15–16; ECF No. 35 at 12–16.

LEGAL STANDARD

Summary judgment is appropriate if the record shows there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Fed. R. Civ. P. 56(a). The Court must determine whether "there are any genuine factual issues that properly can be resolved only by a finder of fact because they may reasonably be resolved in favor of either party." Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 250, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). A fact is "material" if, under the governing law, it could have an effect on the outcome of the lawsuit. Id. at 248, 106 S.Ct. 2505 ; Contreras v. City of Chicago , 119 F.3d 1286, 1291–92 (7th Cir. 1997). A dispute over a material fact is "genuine" only if a reasonable trier of fact could find in favor of the non-moving party on the evidence presented. Anderson , 477 U.S. at 248, 106 S.Ct. 2505.

The moving party bears the burden of proving the absence of any genuine issues of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 322–23, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). To survive a properly supported summary judgment motion, the opposing party must "submit evidentiary materials that set forth specific facts showing that there is a genuine issue for trial." Siegel v. Shell Oil Co. , 612 F.3d 932, 937 (7th Cir. 2010) (citations omitted). If the parties assert different views of the facts, the Court must view the record in the light most favorable to the non-moving party. E.E.O.C. v. Sears, Roebuck & Co. , 233 F.3d 432, 437 (7th Cir. 2000).

Under Wisconsin law, an insurance policy is a contract. Kemper Indep. Ins. Co. v. Islami , 2021 WI 53, ¶ 17, 397 Wis. 2d 394, 406, 959 N.W.2d 912, 918. "The interpretation of an insurance policy is a question of law when no extrinsic evidence is introduced to interpret the wording of the policy." Frost ex rel. Anderson v. Whitbeck , 2002 WI 129, ¶ 5, 257 Wis. 2d 80, 85, 654 N.W.2d 225, 227. The Court's role in interpreting insurance policies is "to effectuate the intent of the contracting parties" and to construe the language "as it would be understood by a reasonable person in the position of the insured." Estate of Sustache v. Am. Family Mut. Ins. Co. , 2008 WI 87, ¶ 19, 311 Wis. 2d 548, 751 N.W.2d 845 (internal quotations and citations omitted); see also Kremers-Urban Co. v. Am. Employers Ins. Co. , 119 Wis. 2d 722, 735, 351 N.W.2d 156 (1984) ; Rural Mutual Ins. Co. v. Welsh , 2001 WI App 183, ¶ 12, 247 Wis. 2d 417, 633 N.W.2d 633. Courts do not construe policies to cover risks insurers did not contemplate or underwrite and for which they did not receive a premium. Sustache , 2008 WI 87 ¶ 19, 311 Wis.2d 548, 751 N.W.2d 845. Any doubts or ambiguities must be resolved against the insurer and in favor of the insured and coverage. Rural Mut. Ins. Co. v. Welsh , 2001 WI App 183 ¶ 6, 247 Wis.2d 417, 633 N.W.2d 633 ; Schroeder v. Blue Cross & Blue Shield , 153 Wis. 2d 165, 173, 450 N.W.2d 470 (Ct. App. 1989) ; see also Bartel v. Carey , 127 Wis. 2d 310, 314, 379 N.W.2d 864 (Ct. App. 1985). Further, when construing insurance policies, words "are given their common and ordinary meaning." J.G. v. Wangard , 2008 WI 99, ¶ 22, 313 Wis. 2d 329, 753 N.W.2d 475 (citing Danbeck v. Am. Family Mut. Ins. Co. , 2001 WI 91, ¶ 10, 245 Wis. 2d 186, 629 N.W.2d 150 ). And, if the terms of the insurance contract are plain on their face, no resort is made to the rule of construction or to case law. Paape v. Northern Assurance Co. , 142 Wis. 2d 45, 51, 416 N.W.2d 665, 668 (Ct. App. 1987). The rules of construction applied to insurance policies are the same as those applied to other contracts. Sustache , 2008 WI 87 ¶ 19, 311 Wis.2d 548, 751 N.W.2d 845.

Wisconsin law uses a three-step analysis to determine whether coverage exists. Courts look first at a policy's initial grant of coverage, then at the exclusions, and, finally, at any exceptions to the exclusions. Schinner v. Gundrum , 2013 WI 71, ¶ 37, 349 Wis. 2d 529, 833 N.W.2d 685 (citing Sustache , 2008 WI 87 ¶ 22, 311 Wis.2d 548, 751 N.W.2d 845 ); see also Am. Family Mut. Ins. Co. v. Am. Girl, Inc. , 2004 WI 2, ¶ 24, 268 Wis. 2d 16, 673 N.W.2d 65. If the Court determines that the initial grant of coverage does not cover the asserted claims, it is unnecessary to examine the policy's exclusions and the analysis concludes. Schinner , 2013 WI 71 ¶ 37, 349 Wis.2d 529, 833 N.W.2d 685 ; Sustache , 2008 WI 87 ¶ 22, 311 Wis.2d 548, 751 N.W.2d 845 ; Am. Girl , 2004 WI 2 ¶ 24, 268 Wis.2d 16, 673 N.W.2d 65. If the initial grant of coverage covers the claim(s) presented, courts examine the policy's exclusions to determine whether any of them withdraw coverage. Schinner , 2013 WI 71 ¶ 37, 349 Wis.2d 529, 833 N.W.2d 685 (citing Wadzinski v. Auto-Owners Ins. Co. , 2012 WI 75, ¶ 14, 342 Wis....