Vicki L. Blasing v. Zurich American Ins. Co., 850 N.W.2d 138

Background

On Sept. 16, 2008 Vicki Blasing (the named insured) was injured when lumber loaded into her pickup by a Menard employee fell on her foot. She sued Menard and Menard's insurer (Zurich); she did not sue the employee.
Blasing's pickup was insured by American Family. Menard tendered defense to American Family; American Family reserved rights and then sought a declaratory judgment it had no duty to defend or indemnify.
The circuit court granted American Family summary judgment; the court of appeals reversed, holding American Family must defend/indemnify Menard under its policy and the omnibus statute.
The Wisconsin Supreme Court granted review limited to whether American Family must defend/indemnify a permissive-user tortfeasor who allegedly injured the named insured when the permissive user has separate liability insurance.
Facts were undisputed: the Menard employee loaded lumber into the insured pickup (a use under the policy), lumber fell, Blasing was injured; Zurich admitted it issued a policy to Menard but its policy was not in the record.

Issues

Issue	Plaintiff's Argument (Blasing)	Defendant's Argument (American Family)	Held
Whether the Menard employee’s conduct was a "use" of the insured pickup under the American Family policy	The loading constituted a use triggering coverage for permissive users	Menard employee’s actions should not be treated as covered "use" to impose duty	Held: Yes — loading/unloading is a "use"; permissive user is an insured under the policy
Whether American Family must defend/indemnify a permissive-user tortfeasor who allegedly injured the named insured	Policy language and precedent allow recovery by a named insured as a third‑party victim; insurer must defend permissive users	Coverage here would be absurd: insurer would defend a tortfeasor who injured its own named insured and potentially pay out on that insured’s claim; should be excluded	Held: No absurdity. Under the policy and Wisconsin precedent, American Family must defend/indemnify the permissive user who allegedly injured the named insured
Whether the omnibus statute (Wis. Stat. § 632.32(3)(a)) requires coverage of a permissive user who injures the named insured (esp. where permissive user has separate insurance)	Omnibus statute generally extends named-insured coverage to permissive users; supports duty	American Family argued statutory/absurdity grounds to avoid duty, especially when permissive user has its own insurer	Not decided on the merits — Court resolved case on policy text and precedent and declined to rule on the omnibus‑statute exclusion question without precise hypothetical exclusion language
Procedural: whether Zurich’s admitted issuance of a Menard policy alters the duty analysis	Blasing argued Zurich’s policy covers Menard; placement of coverage obligations not dispositive to policy interpretation	Dissent argued summary judgment procedure required deciding Zurich’s obligations first and that Zurich should defend unless it proves no coverage	Majority declined to resolve Zurich’s separate obligations; focused on American Family policy language and precedent (dissent would remand differently)

Key Cases Cited

Lawver v. Boling, 71 Wis. 2d 408, 238 N.W.2d 514 (Wis. 1976) (defines "use" by reference to whether conduct is reasonably consistent with inherent vehicle use)
Allstate Ins. Co. v. Truck Ins. Exchange, 63 Wis. 2d 148, 216 N.W.2d 205 (Wis. 1974) (loading/unloading and non‑driving acts can constitute "use")
Archer v. General Casualty Co. of Wisconsin, 219 Wis. 100, 261 N.W. 9 (Wis. 1935) (named insured may recover as third‑party victim when injured by another insured)
Frye v. Theige, 253 Wis. 596, 34 N.W.2d 793 (Wis. 1948) (upheld certain exclusions affecting named insureds under omnibus‑statute analysis)
Blashaski v. Classified Risk Ins. Corp., 48 Wis. 2d 169, 179 N.W.2d 924 (Wis. 1970) (being an additional insured does not bar recovery against the insurer for negligence of another insured)