Opinion ID: 901545
Heading Depth: 2
Heading Rank: 2

Heading: The Severability Provision.

Text: [¶ 18.] Northland also asserts that the existence of a severability provision in the Zurich policy renders the employer's liability exclusion inapplicable to Loebs and, therefore, coverage exists for him as an omnibus insured. [9] This issue was also addressed in Schilling, where this Court relied on the Eighth Circuit Court of Appeals rationale in Universal Underwriters Insurance Company v. McMahon Chevrolet-Oldsmobile, Inc., 866 F.2d 1060 (8thCir.1989). Id. at 888. The Court of Appeals in Universal Underwriters adopted the rationale from the South Dakota case of Birrenkott v. McManamay, 65 S.D. 581, 276 N.W. 725 (1937), and held that under South Dakota law an omnibus insured is not entitled to any greater liability coverage than that afforded to the named insured who purchased the policy, notwithstanding the presence of a severability of interest clause in the policy. [10] [¶ 19.] The underpinnings of the Schilling decision were first introduced by this Court in Birrenkott. The Birrenkott case relied on a Wisconsin decision, Bernard v. Wisconsin Automobile Insurance Co., 210 Wis. 133, 245 N.W. 200 (1932), and held that one who invokes a clause in an automobile liability policy protecting any person operating the insured vehicle with consent of the insured is in the same position as the named insured and is subject to general limitations of the policy in the same manner as the named insured. Birrenkott, 276 N.W. at 726. Northland contends that the Bernard decision cited in Birrenkott no longer applies as a result of subsequent Wisconsin decisions culminating with the decision in Gulmire v. St. Paul Fire and Marine Insurance Co., 269 Wis.2d 501, 674 N.W.2d 629 (Wis.App. 2003), and, therefore, this Court should rule in line with the courts in Wisconsin and abandon Birrenkott. We disagree. [¶ 20.] In Gulmire, the Wisconsin court recognized that a severability provision applies as if the additional or omnibus insured is the only insured, regardless of whether it entitles him to greater coverage under the policy than is given to the named insured. 674 N.W.2d at 636-37. [11] We do not adopt the Gulmire decision but instead reaffirm our reasoning in Birrenkott and Schilling. See Schilling, 520 N.W.2d at 889 (holding if severability provision invalidated a policy's exclusions such provision would operate to provide more coverage to an additional insured than to the named insured, and such an outcome will not be endorsed because it directly contravenes earlier case reasoning); see also Kelly, 288 F.2d at 738 (stating [t]he [named insured] was paying for the protection of its liability insurance against claims asserted by the public, and not by its own employees.); American Family Ins. Group v. Howe, 584 F.Supp. 369, 371 (D.S.D.1984) (stating that the operation of [the] omnibus clause creates liability insurance in favor of persons other than the named insured to the same degree as the named insured.). [¶ 21.] Northland also raises the following issues in this appeal: Whether Zurich may rely on an exclusion in its policy as grounds for avoiding its contractual obligations to its insured when it failed to notify Loebs of this policy defense. Whether Zurich has a primary duty to defend and indemnify Loebs in the underlying action commenced by Fetzer. Whether Northland may recover attorney's fees from Zurich for the period in which Zurich failed to defend Loebs in the underlying Fetzer litigation. [¶ 22.] We do not address these issues because our holdings on issues one and two are dispositive. In addition, there was no ruling by the circuit court on these issues and they are not properly before this Court. City of Watertown v. Dakota, Minnesota & Eastern Railroad Co., 1996 SD 82, ¶ 26, 551 N.W.2d 571, 577 (stating [w]e have long held that issues not addressed or ruled upon by the trial court will not be addressed by this Court for the first time on appeal.); Keegan v. First Bank, 519 N.W.2d 607, 615 (S.D.1994); Schilling, 520 N.W.2d at 887 n. 2. [¶ 23.] Affirmed. [¶ 24.] GILBERTSON, Chief Justice, KONENKAMP, ZINTER and MEIERHENRY, Justices, concur. [¶ 25.] GIENAPP, Circuit Judge, for SABERS, Justice, disqualified.