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Gulmire v. St. Paul Fire and Marine Insurance Co.12/23/2003
r injuries arose out of and occurred in the course of her employment. If that were all the exclusion called for, we would agree with the trial court and St. Paul that the exclusion bars coverage. However, the exclusion demands more. It requires Gulmire's injuries to arise out of and occur in the course of her employment "by you." These modifying words are what create difficulty. After applying the separation provision it is apparent that the exclusion cannot be applied, for it now reads:
We won't cover bodily injury to a fellow employee [Gulmire] of any protected person [Klister] arising out of and in the course of the fellow employee's [Gulmire's] employment by you [Klister].
Gulmire was employed by Fox Valley Auto Auction, not by Klister. Thus, the exclusion does not bar coverage.
2. The Employer's Liability Exclusion
. St. Paul next advances the employer's liability exclusion. This exclusion provides:
We won't cover bodily injury to an employee arising out of his or her employment by a protected person.
Applying the separation provision, the exclusion now reads:
We won't cover bodily injury to an employee [Gulmire] arising out of his or her employment by a protected person [Klister].
Again, Klister did not employ Gulmire. Therefore, the exclusion is inapplicable.
3. The Worker's Compensation Exclusion
. Finally, St. Paul offers the worker's compensation exclusion. The exclusion states:
We won't cover any obligation that the protected person has under a workers' compensation ... law.
In light of the separation provision, the exclusion now states:
We won't cover any obligation that the protected person [Klister] has under a workers' compensation ... law.
This exclusion does not apply. Klister, as a non-employer, does not have any obligation under worker's compensation. See Wis. Stat. § 102.03 and 102.04. Besides, Gulmire is not seeking worker's compensation. Instead, she has brought a claim under § 102.03(2) for a co-employee's negligent operation of a motor vehicle. Thus, the exclusion has no bearing on this action. See Severin v. Luchinske, 271 Wis. 378, 383, 73 N.W.2d 477 (1955).
D. Non-Absurd Result
. Some could argue that our conclusion produces an absurd result. See Capital Invs. v. Whitehall Packing Co., 91 Wis. 2d 178, 193, 280 N.W.2d 254 (1979) (obligation of courts in construing contracts to avoid unusual and extraordinary interpretations that lead to absurd results). Klister, an additional insured (who becomes the named insured), is granted greater coverage than the actual named insureds, Sheriff, Fox Valley Auto Wholesale, and Fox Valley Auto Auction, would have under the same circumstances.
. The South Dakota Supreme Court recognized this problem in St. Paul Fire & Marine Insurance Co. v. Schilling, 520 N.W.2d 884 (S.D. 1994). There, the court held it would not support an interpretation of the same separation provision at issue in this case that created separate insurance policies for all protected persons. Id. at 889. The court's conclusion rested on the premise that a permittee user, that is, an additional insured, cannot have more coverage under the policy than the named insured. Id.
. In Wisconsin, however, we have allowed for this result. In United States Fidelity & Guaranty Co. v. PBC Productions, 153 Wis. 2d 638, 451 N.W.2d 778 (Ct. App. 1989), a co-employee's negligent use of an automobile case, we granted greater coverage to an additional insured by construing "the insured" in an employee exclusion to refer to the tortfeasor emplo
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