Wis. Court of Appeals rules 'per person' limitation invalid in negligent entrustment claim.

Byline: David Ziemer

The anti-stacking provision in sec. 632.32(5)(f) does not authorize an insurer to limit coverage for a driver's negligence, and the owner's negligent entrustment of the vehicle to the driver, to a single policy limit, the Wisconsin Court of Appeals held on Mar. 20. The case arose when Tessa M. Bauer was injured in an automobile accident. Bauer was a passenger; Justin Sinz was driving the motorcycle; and Derrick Wittig was the motorcycle's owner, and the named insured on a policy with Progressive Casualty Insurance Company. As the driver, Sinz also counts as an "insured" under the policy. The policy had a $25,000 limit per injured person, and $50,000 limit per accident. The policy had an anti-stacking provision, stating, "The limit of liability shown on the Declarations Page is the most [Progressive] will pay regardless of the number of ... insured persons...." Progressive filed a declaratory judgment action, and moved for a judgment that its total liability is its $25,000 "each person" limit. Bauer argued Progressive was liable for $50,000 of coverage: $25,000 for Wittig's negligent entrustment of the vehicle to Sinz and an additional $25,000 for Sinz's negligence in causing the accident. Dunn County Circuit Court Judge William C. Dunn agreed with Bauer and ordered Progressive to provide $50,000 of coverage. Progressive appealed, but the court of appeals affirmed in a decision by Judge Gregory A. Peterson. At issue was whether Iaquinta v. Allstate Ins. Co., 180 Wis.2d 661, 510 N.W.2d 715 (Ct.App.1993), remains valid precedent, despite the enactment two years later of sec. 632.32(5)(f), for the avowed purpose of overturning a series of court decisions holding anti-stacking provisions invalid. In Iaquinta, the plaintiff was injured in a collision, and alleged negligence on the part of the driver, and negligent entrustment by the owner of the vehicle. The court held that Wisconsin's omnibus statute, sec. 632.32(3)(a), required the owner's insurer to provide the policy maximum to both the owner and driver, regardless of language in the policy to the contrary. The omnibus statute provides, "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." Two years later, subsec. (5)(f) was enacted, providing, "A policy may provide that regardless of the number...