Opinion · Wilaw Wisconsin
AMERICAN FAM. MUT. INS. v. RECIPROCAL INS., 111 Wis.2d 308 (Ct.App. 1983)
Am. FAMILY Mut. Ins. CO., Plaintiff-Appellant,v. RECIPROCAL Ins. Serv. Exch. Mgmt. Co., Defendant,ADJUSTERS AUTO RENTAL OF Wis., INC., Defendant & Third-PartyPlaintiff-Respondent, ALLSTATE Ins. Co. & Robert R. Lippe,Third-Party Defendants., 330 N.W.2d 223 (Wis. Ct. App. 1983)
- Type
- Opinion
- Court
- Wilaw Wisconsin
- Jurisdiction
- Wilaw
- Date
- 1983-01-13
- Topic
- general
AMERICAN FAM. MUT. INS. v. RECIPROCAL INS., 111 Wis.2d 308 (Ct.App. 1983) 330 N.W.2d 223 AMERICAN FAMILY MUTUAL INSURANCE CO., Plaintiff-Appellant,v. RECIPROCAL INSURANCE SERVICE EXCHANGE MANAGEMENT COMPANY, Defendant,ADJUSTERS AUTO RENTAL OF WISCONSIN, INC., Defendant and Third-PartyPlaintiff-Respondent, ALLSTATE INSURANCE Co. and Robert R.
Citator
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AMERICAN FAM. MUT. INS. v. RECIPROCAL INS.,111 Wis.2d 308(Ct.App. 1983)
330 N.W.2d 223
AMERICAN FAMILY MUTUAL INSURANCE CO., Plaintiff-Appellant,
v. RECIPROCAL INSURANCE SERVICE EXCHANGE MANAGEMENT COMPANY, Defendant,
ADJUSTERS AUTO RENTAL OF WISCONSIN, INC., Defendant and Third-Party
Plaintiff-Respondent, ALLSTATE INSURANCE Co. and Robert R. Lippe,
Third-Party Defendants.
Court of Appeals of Wisconsin.
No. 82-616.
Submitted on briefs December 8, 1982. —
Decided January 13, 1983.
For the defendant and third-party plaintiff-respondent the cause was submitted on the brief ofStanley H. MichelstetterII, of Milwaukee.
Before Decker, C.J., Moser, P.J., and Wedemeyer, J.
Robert Lippe had an automobile liability insurance policy with American Family. Lippe was involved in an accident and his car was rendered inoperable. It was arranged for Lippe to use a temporary substitute automobile until his car was repaired. The temporary substitute automobile was leased to Lippe by Adjusters. While driving the temporary substitute automobile, Lippe was involved in another accident. Lippe's policy with American Family covered accidents occurring while Lippe drove a temporary substitute automobile. American Family paid $30,206.64 to claimants harmed in the second accident due to Lippe's negligent driving.
American Family then sued Adjusters, claiming that Adjusters failed to comply with sec.344.51(1), Stats., and was thus "directly liable," under sec.344.51(2), to American Family for the amount paid to claimants harmed by Lippe's negligent driving. American Family further claimed that Adjusters was liable to American Family in an amount not to exceed $200;seesec.344.51(3). The circuit court granted summary judgment to Adjusters and American Family appealed.
Section344.51, Stats., states:
Financial Responsibility For Domestic Rented Vehicles. (1) No person may for compensation rent any motor vehicle to be operated by or with the consent of the person renting the vehicle unless there is filed with the department a good and sufficient bond or policy of insurance issued by an insurer authorized to do an automobile liability insurance or surety business in this state.Page 310
The bond, policy or certificate shall provide that the insurer which issued it will be liable for damages caused by the negligent operation of the motor vehicle in the amounts set forth in s.344.01(2)(d).
(2) Any person failing to comply with this section isdirectly liablefor all damages caused by the negligence of the person operating such rented vehicle to the extent that such liability could have been established if this section had been complied with.
(3) Any person violating this section may be required to forfeit not more than $200.
(4) In this section, "motor vehicle" means a self-propelled vehicle. [Emphasis added.]
American Family's suit is premised on the contentions that Adjusters failed to comply with sec.344.51(1), Stats., and that sec.344.51(2) makes Adjusters liable to American Family for failure to comply with sec.344.51(1). Since the circuit court was correct in its determination that sec.344.51(2) does not make a lessor (Adjusters) liable to the lessee's insurer (American Family) for monies paid to persons harmed due to the negligent driving of the lessee, this court need not determine whether Adjusters complied with sec.344.51(1).
We conclude that there are two bases lending support to the determination of the trial court. At common law, the lessor of an automobile was not liable to an innocent third party for the negligent operation of the rented automobile by the lessee.City of Milwaukee v. Froelich,196 Wis. 444,445,219 N.W. 954,955(1928). A year afterFroelichwas decided, the predecessor to sec.344.51, Stats., sec.85.215, Stats. (1929), was enacted.SeeSmith v. National Indemnity Co.,57 Wis.2d 706,711,205 N.W.2d 365,368(1973). This court may examine legislative response to a judicial pronouncement of a common law rule to determine whether the common law rule has been abrogated.1The action by the legislaturePage 311in enacting sec.85.215, we believe, was clearly to abrogate, at least partially, the common law rule enunciated inFroelich. The legislature was making a policy decision that lessors were liable to persons harmed by the negligence of the lessee,ifthe lessee was unable to pay the damages. The legislature did not mean to make a lessor liable to a lessee's insurer for monies paid by the insurer to persons harmed by the lessee's negligence. We believe our decision may rest solely on this ground.
However, we nevertheless conclude that this decision may also rest on our construing sec.344.51, Stats., similarly to sec.344.52, Stats. To date, sec.344.51(2) has not been the subject matter of any reported litigation, but a companion statute, sec.344.52, was interpreted inHerchelroth v. Mahar,36 Wis.2d 140,153 N.W.2d 6(1967). Both secs.344.51and344.52are concerned with the general subject of financial responsibility (as is every statute in ch. 344). Both are also specifically concerned with financial responsibility for rented vehicles. The only significant difference between the statutes is that sec.344.51refers explicitly to vehicles rented in Wisconsin, while sec.344.52refers to vehicles rented out-of-state. Because these statutes deal with the same subject matter, we must construe, sec.344.51similarly to the manner in which sec.344.52has been construed.2
The court inHerchelrothdeclared that the purpose of the financial responsibility chapter is "to assure response in damages . . . ."Herchelroth, supra, at 153,153 N.W.2d at 13.Herchelrothalso stated that the direct liability clause of sec.344.52, Stats., (the same clause we are interpretingPage 312here in sec.344.51, Stats.) was designed to place upon a lessor a "secondary liability."Id.We interpretHerchelrothto mean that the lessor is liable to persons damaged by the negligent operation of the leased automobile by the lessee, if the lessee or his insurer is unable to pay the damages. This is also consistent with our interpretation of the legislature's purpose in passing sec.85.215, Stats. (1929), one year after theFroelichdecision. WhileHerchelrothstated the statute was silent as to whether the lessee or lessor ultimately was to bear the loss,id., and did not answer the question it posed, we believe that the court was proposing that lessors who had paid for damages caused by a negligent lessee might be allowed to sue the lessee to recover the monies paid by the lessor. While we need not answer this question, we do conclude that this statement inHerchelrothwas not intended to allow insurers of lessees to sue lessors.
As a matter of law, sec.344.51(2), Stats., does not allow a lessee's insurer to sue a lessor for damages it paid to those injured as a result of the lessee's negligent driving. We have come to this conclusion by viewing the initial passage of sec.344.51(then sec.85.215(1929)) as at least partially abrogating the common law enunciated inFroelich, supra, and also by interpreting sec.344.51consistently with its companion statute, sec.344.52, Stats.By the Court. — Order affirmed.Page 313
- See Goller v. White,20 Wis.2d 402,412,122 N.W.2d 193,198(1963) (in which the court overturned a common law rule after noting that the legislature had refused to act to change the rule);see alsoComment,Statutory Construction — Legislative Intent — Useof Extrinsic Aids in Wisconsin, 1964 Wis. L. Rev. 660, 669-70. ↩
- "It has long been settled in this state that statutesin parimateria, i.e., dealing with the same subject matter, must be read together and harmonized if possible."Weiss v. Holman,58 Wis.2d 608,619,207 N.W.2d 660,665(1973). ↩