2009 WI 11
SUPREME COURT
CASE NO.: COMPLETE TITLE:
OF
WISCONSIN
2006AP2662 Jonathan Lisowski, Plaintiff-Appellant-Petitioner, v. Hastings Mutual Insurance Company, Defendant-Respondent. REVIEW OF A COURT OF APPEALS DECISION Reported at: 308 Wis. 2d 394, 746 N.W.2d 604 (Ct. App. 2007-Unpublished)
OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: SOURCE OF APPEAL: COURT: COUNTY: JUDGE: JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING: ATTORNEYS:
January 28, 2009 October 13, 2008
Circuit Buffalo James J. Duvall
BRADLEY, J., dissent (opinion filed). ABRAHAMSON, C.J., joins dissent.
For the plaintiff-appellant-petitioner there were briefs by Joel W. Brodd and Brodd Law Firm, L.L.C., Hudson, and oral argument by Joel W. Brodd. For the defendant-respondent there was a brief by Lee J. Fehr and Fehr Law Office, Onalaska, and oral argument by Lee J. Fehr. An amicus curiae brief was filed by James A. Friedman, Linda S. Schmidt, and Godfrey & Kahn, S.C., Madison, on behalf of the Wisconsin Insurance Alliance, and oral argument by James A. Friedman. An amicus curiae brief was filed by Timothy A. Barber and Axley Brynelson, LLP, Madison, on behalf of the Wisconsin Association for Justice.
2009 WI 11
NOTICE
This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports.
No.
2006AP2662
2005CV78)
(L.C. No.
STATE OF WISCONSIN Jonathan Lisowski,
:
IN SUPREME COURT
Plaintiff-Appellant-Petitioner, v. Hastings Mutual Insurance Company, Defendant-Respondent.
FILED
JAN 28, 2009
David R. Schanker Clerk of Supreme Court
REVIEW of a decision of the Court of Appeals.
Affirmed.
¶1
N.
PATRICK
CROOKS,
J.
This
is
a
review
of
an
unpublished court of appeals per curiam opinion1 that affirmed a circuit court decision dismissing a claim by Jonathan Lisowski against motorists policy. ¶2 The "for a covered auto" language on which this case Hastings coverage Mutual under Insurance Lisowski's Company for underinsured auto
father's
business
turns is substantive language that appears in several places in the policy, including the endorsement page.
1
When the provisions
Lisowski v. Hastings Mut. Ins. Co., unpublished slip op. (Wis. Ct. App. Jan. 31, 2008).
No.
2006AP2662
of the policy are read together, the language is not ambiguous. We agree with the reasoning of Crandall v. Society Insurance, 2004 WI App 34, 269 Wis. 2d 765, 676 N.W.2d 174, and we believe it controls here. motorist Like (UIM) Crandall, this to case a concerns business an auto
underinsured
endorsement
policy; also, like Crandall, it involves an injured party who is not the named insured, a driver who is not an insured under the policy, and a vehicle not listed in the policy. Even if the
covered auto language is characterized as an exclusion in the UIM endorsement, it is valid when the conditions in Wis. Stat. § 632.32(5)(j)(2005-06)2 are satisfied, as they are here. therefore affirm the decision of the court of appeals. I. ¶3 BACKGROUND We
This case involves a family with multiple personal and
business vehicles insured under policies purchased from three companies. Dennis Lisowski, a farmer, owned a Chevy Lumina, a He
Chevy pickup, a Dodge Avenger, and a Mack semi tractor.
bought insurance policies for the Lumina and the pickup from First Community Insurance Company but allowed the policies to lapse. He had who purchased bought the Avenger for for the his car son, from Jonathan Northern
Lisowski,3
2
insurance
As explained more fully below, Wisconsin Stat. § 632.32(5)(j) permits insurers to exclude coverage under certain circumstances. All subsequent references to the Wisconsin Statutes are to the 2005-06 version unless otherwise indicated. Dennis Lisowski testified that he considered Jonathan the owner of the Avenger and had intended to transfer the title to him but had not gotten around to doing so before the accident. 2
3
No.
2006AP2662
Progressive Insurance Company but bought no UIM coverage with that policy. The Mack semi tractor, which Dennis Lisowski used
exclusively for farming, was covered by a business auto policy issued by Hastings Mutual Insurance Company (Hastings Mutual), which included a UIM endorsement. ¶4 That business auto policy is the policy against which The car accident involving the Avenger, and Jonathan
the claim was made.
giving rise to this claim, occurred January 18, 2004.
Lisowski was a passenger, and a friend of his was driving at the time of the accident. ¶5 Jonathan Lisowski sued Hastings Mutual, claiming
coverage under the UIM endorsement to the business auto policy on his father's semi tractor. He claimed coverage on the
grounds that, as a family member of the named insured, he was entitled to coverage for any injury caused by an underinsured motorist. Hastings Mutual denied coverage on the grounds that
the UIM policy applied to covered autos only. ¶6 Following a hearing, the Buffalo County Circuit Court,
the Honorable James Duvall presiding, dismissed the complaint. The circuit court found that: (1) Dennis Lisowski was the owner
of the Avenger; (2) Jonathan Lisowski was a passenger in the Avenger when he was injured; (3) Jonathan Lisowski was an
insured under the UIM endorsement of the Hastings Mutual policy; (4) the Avenger was an underinsured motor vehicle under the
terms of the UIM endorsement; and (5) the Avenger was not a covered Crandall, auto the in the Hastings court Mutual policy. that "the Relying on
circuit
concluded 3
introductory
No.
2006AP2662
language 'for a covered auto' in the UIM endorsement required Jonathan Lisowski to be an occupant of a covered auto in order to trigger UIM coverage" under the Hastings Mutual policy.
Because the Avenger was not a covered auto under the policy, the court ordered the case dismissed. ¶7 Jonathan Lisowski appealed. On August 23, 2007, the
court of appeals certified the appeal to this court, but we did not grant the certification. In an unpublished per curiam
opinion, the court of appeals then affirmed the circuit court's decision, on the same grounds: that Crandall required the "for
a covered auto" language to be given effect, and the Hastings Mutual policy therefore did not provide UIM coverage. Lisowski
v. Hastings Mut. Ins. Co., unpublished slip op., ¶9 (Wis. Ct. App. Jan. 31, 2008). ¶8 Jonathan Lisowski filed a petition for review, and on
May 13, 2008, review was granted. II. ¶9 Interpretation STANDARD OF REVIEW of an insurance policy presents a
question of law that we review independently.
Smith v. Atlantic If
Mut. Ins. Co., 155 Wis. 2d 808, 810, 456 N.W.2d 597 (1990).
words or phrases in a policy are susceptible to more than one reasonable construction, they are ambiguous. Id. at 811. In
such a case, we construe the policy as it would be interpreted by a reasonable insured. Holsum Foods v. Home Ins. Co., 162 If the
Wis. 2d 563, 568-69, 469 N.W.2d 918 (Ct. App. 1991).
policy is not ambiguous, we will not rewrite it by construction to impose liability for a risk the insurer did not contemplate. 4
No.
2006AP2662
Taylor v. Greatway Ins. Co., 2001 WI 93, ¶10, 245 Wis. 2d 134, 628 N.W.2d 916. "Applying the canons of interpretation for
insurance contracts . . . we interpret the policy based on what a reasonable person in the position of the insured would have understood the words to mean." Mau v. North Dakota Ins. Reserve Where
Fund, 2001 WI 134, ¶17, 248 Wis. 2d 1031, 637 N.W.2d 45.
it is necessary to apply a statute, the review is de novo. State v. T.J. Int'l, Inc., 2001 WI 76, ¶20, 244 Wis. 2d 481, 628 N.W.2d 774. III. ¶10 ANALYSIS
There is no dispute that the vehicle involved in the
accident was not a covered vehicle under the Hastings Mutual business auto policy. Nor is there any dispute that Jonathan
Lisowski was an insured as a family member of the named insured, Dennis Lisowski. What the parties dispute is whether Jonathan
Lisowski was entitled to coverage as an insured regardless of where he was at the time he was injured by the underinsured motorist. Mutual Jonathan have Lisowski excluded contends coverage that for even him if Hastings these
could
under
circumstances without running afoul of Wisconsin law, the policy was not written in such a way that it actually and unambiguously did so. "all sums He points to a statement describing UIM coverage as the 'insured' is legally the entitled or to recover of as an
compensatory
damages
from
owner
driver
'underinsured motor vehicle.'"
Jonathan Lisowski also points to Where the
the UIM endorsement's language identifying insureds.
named insured is an individual, the endorsement states, insureds 5
No.
2006AP2662
are "[t]he Named Insured and any 'family members'" and "[a]nyone else 'occupying' a covered 'auto'. . . ." member provision contains no mention of a Because the family covered auto, he
contends, there is no requirement that a family member of the named insured be in a covered auto in order for coverage to apply. applies. ¶11 Hastings Mutual points to the sentence at the top of He also notes that none of the endorsement's exclusions
the UIM endorsement that begins, "For a covered 'auto'. . . ." It contends that this language mirrors the "covered auto"
language in the main body of the policy and limits UIM coverage accordingly. As for the exclusions, Hastings Mutual argues that
they operate only to limit coverage, not create it, and that the exclusions are relevant only after coverage is established. A. The key language ¶12 policy's coverage. Lisowski as The language on which this case turns is found in the declarations On the page and in the endorsement One the for UIM
declarations insured.
page, Item
Item Two,
lists
Dennis of
the
named
Schedule
Coverages and Covered Autos, says, "Each of these coverages will apply only to those 'autos' shown as covered 'autos'. 'Autos'
are shown as covered 'autos' for a particular coverage by the entry of one or more of the symbols from the covered auto
section of the business auto coverage form next to the name of
6
No.
2006AP2662
the coverage."4
The symbol from the business auto coverage form
that appears next to the UIM coverage on the list of coverages under Item Two that is "07." "07" The is business used, auto "any coverage auto" form means
indicates
where
"Specifically Described 'Autos'." "[o]nly those 'autos' described
That is further described as in Item Three of the In
Declarations for which a premium charge is shown . . . ."
Item Three, the "Schedule of Covered Autos You Own" lists one vehicle: the 1985 Mack semi tractor. The premium for
underinsured motorist coverage for that vehicle is $30. ¶13 Turning to the endorsement page, one finds the words,
"For a covered 'auto' licensed or principally garaged . . . in[] Wisconsin, this the following: endorsement modifies insurance provided under
Business Auto Coverage Form."
On the same page,
in section A.1., the policy reads, "We will pay all sums the 'insured' is legally entitled to recover as compensatory damages from the owner or driver of the 'underinsured motor vehicle.'" In section B.1., the endorsement states that where the named insured is an individual, which is the case here, insureds are "[1]a. The Named Insured and any 'family members'" and "[1]b. Anyone else 'occupying' a covered 'auto'. . . ." ¶14 There is no dispute that Jonathan Lisowski, as a
family member, is an insured under his father's business auto
For each type of coverage (liability, auto medical payments, uninsured motorists, underinsured motorist, physical damage, and comprehensive), the Schedule of Coverages and Covered Autos also lists the policy limits and the premium. 7
4
No.
2006AP2662
policy and under the UIM endorsement. designates Dennis Lisowski as an
The Declarations page individual, and the
Endorsement, in section B.1.a., says the named insured and any "family members" are insureds when the named insured is
designated in the Declarations as an individual. B. Discussion ¶15 business Jonathan Lisowski auto policy his advances father a half-dozen on the reasons the Mack semi
held
1985
tractor should provide coverage for the injuries he sustained as a passenger in the Avenger, even though it is not a covered vehicle: (1) the "for a covered auto" language in the UIM
endorsement is not part of the policy; it is nothing more than introductory language and should not be
given effect; (2) the UIM endorsement changed the "covered auto"
requirement in the declarations page and trumps any conflicting language elsewhere in the policy; (3) Hastings Mutual is wrongly seeking to have the court either policy add a words to the policy or write into the
permissible
exclusion
under
Wis.
Stat.
§ 632.32(5)(j) that Hastings Mutual itself omitted; (4) the "for a covered auto" language should be treated as an exclusion and construed narrowly against the
insurer;
8
No.
2006AP2662
(5)
the and
introductory thus must be
language
is
contextually in Jonathan
ambiguous Lisowski's
construed
favor; and, finally, (6) Crandall should not apply here because it is factually distinguishable and its holding is overbroad. ¶16 Hastings Mutual responds that the "for a covered auto"
language is part of the policy, and, if characterized as an exclusion, is a proper one; that there is no ambiguity; and that Crandall is both rightly decided and applicable. ¶17 Jonathan Lisowski first contends that the "for a
covered auto" language is not actually a part of the policy because it is merely "introductory language." He contends that
this court's decision in Mau, 248 Wis. 2d 1031, rests on the premise that prefatory headings do not determine coverage.5 ¶18 Mau concerned a German tourist, Wolfgang Mau, who had
purchased an underinsured motorist insurance policy for a rental car. While traveling, he was involved in a minor accident on an At the deputy's
icy road, and a deputy stopped to assist him.
request, Mau sat in the squad car while towing arrangements were made for the disabled vehicle. lost control and crashed into As Mau waited, a passing driver the squad car; Mau sustained
serious injury.
Jonathan Lisowski also proffered an affidavit from an editor of an insurance industry trade publication in support of his position that the introductory language cannot modify the coverage terms. For the reasons stated herein, we do not find the editor's affidavit persuasive. 9
5
No.
2006AP2662
¶19
To
determine
whether
there
was
coverage
under
the
policy Mau had purchased for the rental car, we first determined that "Mau [was] a named insured under the [UIM] policy." then determined that the occupancy requirement in the We UIM
endorsement was not valid under Wis. Stat. § 632.32 (1995-96) because the statute prohibits an exclusion for a named insured. Mau, 248 Wis. 2d 1031, ¶1. ¶20 Lisowski Mau is inapposite here; the footnote to which Jonathan cites says merely, "[R]ather than relying on the
heading to determine who is a named insured, we look to the substance named of Endorsement Id., #1, the definitions, to define The the
insured."
¶14
n.4
(emphasis
added).
first
question in Mau was whether the person seeking coverage was a named insured, and we were presented with a policy that was ambiguous in defining page a named to insured. There, for where the the
declarations
referred
the
endorsement
named
insured ("Named Insured: See Endorsement #1" (Id., ¶10)), we did nothing answer. more than read all of "Endorsement #1" to find the
Nothing in that approach requires us to ignore language Unlike in Mau, the language we
in the Hastings Mutual policy.
look to here is substantive language, not a heading.6 ¶21 Jonathan Lisowski's argument that the endorsement
changes the policy and trumps any language to the contrary in In this case, the heading on the endorsement page—— "Wisconsin Underinsured Motorists Coverage"——is not relevant to the question of whether this business policy provides coverage when the injured person is neither a named insured nor an occupant of a covered vehicle. 10
6
No.
2006AP2662
the declarations page is easily disposed of. endorsement says, at the top of the page,
It's true that the "This endorsement
changes the policy. that an endorsement
Please read it carefully." is "a provision added
It is also true to an insurance
contract altering its scope or application that takes precedence over printed portions of the policy in conflict therewith."
Muehlenbein v. West Bend Mut. Ins. Co., 175 Wis. 2d 259, 265, 499 N.W.2d 233 (Ct. App. 1993). The endorsement page similarly
notes, "With respect to coverage provided by this endorsement, the provisions of the coverage form apply unless modified by the endorsement." ¶22 covered Because auto" the endorsement there itself is no contains conflict the "for a
requirement,
between
the
endorsement and the rest of the policy. there is no way to read the
For the same reason, as modifying the
endorsement
provisions of the Coverage Form to expunge the "covered auto" requirement. because insured the as As noted above, Jonathan Lisowski contends that definition "[t]he Named in section B.1.a., any which 'family defines an
Insured
and
members,'"
contains no mention of a covered auto, the requirement of a covered auto does not apply to a family member of the named insured. He notes that section B.1.b., which applies to "anyone
else 'occupying' a covered 'auto,'" does impose the requirement. These two provisions, however, merely parrot the statute, which dictates what a policy must may cover. exclude See from Wis. the Stat.
§ 632.32(6)(b)1.
("No
policy
coverage
afforded or benefits provided [] [p]ersons related by blood, 11
No.
2006AP2662
marriage
or
adoption
to
the
insured.");
and
Wis.
Stat.
§ 632.32(3)(a) ("[E]very policy . . . issued to an owner shall provide that [] [c]overage 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 . . . .").
These provisions, which are included pursuant to statute, cannot be read as creating UIM coverage for Jonathan Lisowski where the policy, read as a whole, explicitly denies it. ¶23 Jonathan Lisowski contends that for this court to deny
coverage here we must rewrite the policy in one of two ways, either covered (1) by adding to the in words such of as an "who is occupying or (2) a by
auto"
definition
insured;
inserting an exclusion permitted under Wisconsin statutes that the insurer failed to put into the policy explicitly enough.7
7
We
Wisconsin Stat. § 632.32(5)(j) permits insurers to exclude coverage under certain circumstances: A policy may provide that any coverage under the policy does not apply to a loss resulting from the use of a motor vehicle that meets all of the following conditions: 1. Is owned by the named insured, or is owned by the named insured's spouse or a relative of the named insured if the spouse or relative resides in the same household as the named insured. 2. Is not described in the policy under which the claim is made. 3. Is not covered under the terms of the policy as a newly acquired or replacement motor vehicle. Jonathan Lisowski argues, without citation to authority, that such an exclusion is permissible only "if [the insurer] had specified the three requirements of Wis. Stat. § 632.32(5)(j) in 12
No.
2006AP2662
disagree.
As we explained above, the language that requires
denying coverage is already found in the declarations page and in the endorsement. First, the endorsement page begins with the
words "For a covered 'auto,'" so there is no need to add the words to the endorsement. Second, the policy, as written,
excludes any vehicle owned by the named insured that is neither described in the policy nor covered as a newly acquired vehicle. In the policy, one finds on the Declarations page the "Schedule of Coverages and Covered Autos" (with "07" in the column titled "Covered Autos") and the "Schedule of Covered Autos You Own," neither coverage "07," of which is include the the Avenger. for The the to business auto of
form
cross-reference limits the
designation
which
explicitly
coverage
"Specifically
Described 'Autos.'"
That was a decision made by Dennis Lisowski
when he bought the policy; there are other levels of coverage available which provide coverage for any autos owned by the
policyholder, even those the policyholder "acquire[s] ownership of after the policy begins." characterize the covered auto Jonathan Lisowski urges us to language as an exclusion. We
agree with him that such an exclusion, sometimes called a "drive other car exclusion," can be valid only where it complies with the three specific requirements of Wis. Stat. § 632.32(5)(j). See Blazekovic v. City of Milwaukee, 2000 WI 41, 234 Wis. 2d 587, 610 N.W.2d 467. Even if the covered auto language is so
the express written exclusion clauses of the UIM endorsement." There is, however, no such requirement in the statute. 13
No.
2006AP2662
characterized, however, it is valid because it complies with the three specific requirements of the statute: It is owned by the
named insured, is not described in the policy under which the claim is made, and is not covered as a newly acquired or
replacement
motor
vehicle.
Wis.
Stat.
§ 632.32(5)(j)
(permitting insurers to make such exclusions).8 ¶24 Jonathan Lisowski asserts that Mau compels us to
construe the "for a covered auto" language as an exclusion and to construe it narrowly against the insurer. questions before this court was In Mau, one of the an "occupancy
whether
requirement," the equivalent of a "covered auto requirement," could apply against a named insured under Wis. Stat.
§ 632.32(6). what a
In order to apply the statute, which addresses may not exclude, we acknowledged that a
policy
requirement can be the functional equivalent of an exclusion. Mau, 248 Wis. 2d 1031, ¶33. same principle applies here. the outcome. Jonathan Lisowski contends that the Such an approach does not change
Even where we construe language narrowly, we are Contrary to his
still required to give meaning to the terms.
assertion, it is not necessary to give the "for a covered auto" language conclusion
8
an
"overly it
broad applies
interpretation" here. Even
to
reach
the the
that
construing
Given this statutory scheme, the dissent's distinctions between Class I and Class II insureds where, as here, it is clear under the language of well as under the circumstances presented that coverage; therefore, we do not find that significant. 14
focus on the is misplaced, the policy as there is no distinction
No.
2006AP2662
requirement as an exclusion, consistent with our approach in Mau, we reach the same result.9 ¶25 Jonathan Lisowski asserts that a discrepancy between
the endorsement's statements creates ambiguity——the introductory language mentions covered autos and the coverage definitions do not. If words or phrases in a policy are susceptible to more Mau, 248
than one reasonable construction, they are ambiguous. Wis. 2d 1031, ¶13. isolation.
However, we do not read policy terms in
As we noted in Mau, "[W]e must give meaning to all Id., ¶20 n.7 (citing 2 Lee
provisions in the insurance policy."
R. Russ & Thomas F. Segalla, Couch on Insurance 3d § 21:19 (Dec. 1995) ("All its words, parts, and provisions must be construed together as one entire contract, each part interpreted in the
Jonathan Lisowski does not claim that the policy violates Wis. Stat. § 632.32(6)(b)2. Mau v. North Dakota Insurance Reserve Fund, 2001 WI 134, 248 Wis. 2d 1031, 637 N.W.2d 45, and Ruenger v. Soodsma, 2005 WI App 79, 281 Wis. 2d 228, 695 N.W.2d 840, addressed whether an occupancy requirement for a named insured violated Wis. Stat. § 632.32(6)(b)2., which states: (b) No policy may exclude from the coverage afforded or benefits provided: .... 2.a. Any person who is a named insured or passenger in or on the insured vehicle, with respect to bodily injury, sickness or disease, including death resulting therefrom, to that person. In both cases, the answer was that an occupancy requirement violated the statute because both cases involved injured parties who were named insureds. In this case, that statute is not implicated because Jonathan Lisowski is neither a "named insured" nor "[a] passenger in or on the insured vehicle." 15
9
No.
2006AP2662
light of all the other parts, in connection with the risk or subject matter.")). The language in the endorsement which
refers to "covered auto" is consistent with the language in the declarations page,10 which also refers to "covered autos." The
language links the endorsement page to the declarations page. Having considered the position taken by the dissent, we find it more persuasive to read the "for a covered auto" language as a key to the question of coverage. ¶26 It is true, as Jonathan Lisowski points out, that none But that makes no
of the endorsement's exclusions applies.11 difference. coverage
An exclusion is relevant only in a context where Crandall, 269 Wis.2d 765, ¶16 n.2 ("The
exists.
Crandalls raise additional arguments to establish that [their daughter] is an insured and that none of the UIM exclusions applies. However, those arguments do not create
coverage . . . .
Rather, coverage must first be established.
Then, if the policy provides coverage we would, for example,
10
See Dowhower v. West Bend Mut. Ins. Co., 2000 WI 73, ¶40, 236 Wis. 2d 113, 613 N.W.2d 557 (Bradley, J., concurring) ("Arguably, the Declaration page is the most crucial section of the policy for the typical insured . . . ."). The exclusions apply, for example, when the named insured is occupying a vehicle he or she owns that is not a covered auto; when a family member is occupying a vehicle that the named insured's family member owns; and when a family member is occupying a vehicle owned by the named insured that has UIM coverage under another policy. Jonathan Lisowski fit none of those descriptions. He was not the named insured. He was a family member occupying a car (the Avenger) owned by the named insured (Dennis Lisowski). The car had no UIM coverage under any other policy. 16
11
No.
2006AP2662
analyze whether any exclusions apply."); Bulen v. West Bend Mut. Ins. Co., 125 Wis. 2d 259, 263, 371 N.W.2d 392 (Ct. App. 1985) ("Such clauses subtract from coverage rather than grant it."). ¶27 Jonathan Lisowski and Hastings Mutual differ as to the Crandall involved a
applicability of Crandall to this case.
policyholder who had purchased a business policy for his garage operations. The policy contained a UIM endorsement. When the
policyholder's daughter was injured in an accident, in a vehicle driven by a UIM the friend, the daughter The "For or a sought coverage language, 'auto' under as her
father's included
coverage. words,
endorsement covered
here, or in
licensed conducted
principally Wisconsin,
garaged, this
'garage
operations'
endorsement
modifies
insurance . . . ."
Crandall, 269 Wis. 2d 765, ¶2. ¶28 Crandall This case mirrors Crandall's facts in relevant ways. involved a businessowner's garage operations policy;
here, the policy involved is a business auto policy. of the policy here notes in large bold type that
The cover it is a
"Business Auto Policy."
In both cases, an insured, but not the
named insured, was injured while a passenger in an underinsured vehicle not listed in the policy. policies' endorsements is identical. ¶29 We agree with the court of appeals' reasoning in The relevant language in the
Crandall that: [T]his is a policy for Crandall's business, not for him as an individual. . . . The policy is described in various places within the policy as a businessowner's policy and a garage policy. It would 17
No.
2006AP2662
be unexpected for this kind of policy to cover Crandall and his family under circumstances wholly unrelated to Crandall's business. Id., ¶9. IV. ¶30 CONCLUSION
The "for a covered auto" language on which this case
turns is substantive language that appears in several places in the policy, including the endorsement page. When the provisions
of the policy are read together, the language is not ambiguous. We agree with the reasoning of Crandall, 269 Wis. 2d 765, and we believe it controls here. underinsured motorist Like Crandall, this case concerns an endorsement to a business auto
(UIM)
policy; also, like Crandall, it involves an injured party who is not the named insured, a driver who is not an insured under the policy, and a vehicle not listed in the policy. Even if the
covered auto language is characterized as an exclusion in the UIM endorsement, it is valid when the conditions in Wis. Stat. § 632.32(5)(j) are satisfied, as they are here. affirm the decision of the court of appeals. By the Court.—The decision of the court of appeals is We therefore
affirmed.
18
No.
2006AP002662.awb
¶31
ANN WALSH BRADLEY, J.
(dissenting).
I agree with
the majority that the dispute here is "whether Jonathan Lisowski was entitled to coverage as an insured regardless of where he was at the time he was injured by the underinsured motorist." Majority op., ¶10 (emphasis added). Based upon what I refer to
as Rule 101 of underinsured motorist coverage (UIM), the answer is undoubtedly: yes. ¶32 By Rule 101, I mean that is basic it to is the nature of and As
underinsured
motorist
coverage
that
"personal
portable" for resident family members of the named insured.
a learned treatise on Wisconsin insurance law explains: "Keep in mind that UIM as well as UM coverage is personal and portable and follows Class I insureds [resident family members of the named insured]." 1 Arnold P. Anderson, Wisconsin Insurance Law
§ 4.14 (5th ed. 2004). ¶33 What does it mean to be "personal and portable"?
"Personal" means that the coverage follows the person and not the vehicle, and "portable" means that it follows the person regardless of where he is at the time of the accident. Unlike
general automobile liability policies which insure a specific auto, UIM policies insure the person. ¶34 We have previously explained that coverage for Class I
insureds follows the insured "wherever he may go, be it 'in an unowned vehicle, on a motorcycle, on a bicycle, whether afoot or on horseback or even on a pogo stick.'" Teschendorf v. State
Farm Ins. Co., 2006 WI 89, ¶25, 293 Wis. 2d 123, 717 N.W.2d 258
1
No.
2006AP002662.awb
(quoting
Welch
v.
State
Farm
Mut.
Auto
Ins.
Co.,
122
Wis. 2d 172, 181, 361 N.W.2d 680 (1985)).1 ¶35 The majority correctly acknowledges that there is no
dispute that, as a resident family member of the named insured, Jonathan is a Class I insured. conclude based that on Rule 101 is (UIM Majority op., ¶10. coverage under is Thus, I and
"personal UIM
portable")
Jonathan
covered
his
policy
regardless of where he was at the time he was injured. ¶36 The problem with the majority opinion is twofold: (1)
by ignoring this basic tenet of UIM coverage, it collapses the distinction between Class I and Class II insureds, requiring all insureds to be occupants of covered autos; and (2) by concluding that the language of the policy is clear and unambiguous, it contradicts a parade of cases from other courts and avoids the cannon of construction that ambiguity is decided in favor of the insured. I ¶37 The majority concludes that occupancy of a covered In UIM nor
auto is a requirement for UIM coverage under this policy. reaching coverage this for conclusion Class I the majority is determines that
insureds
neither
"personal"
"portable." ¶38 UIM policies traditionally cover three distinct
classes of insureds.
1
Wisconsin Insurance Law, supra, § 4.11.
While Teschendorf dealt with an uninsured motorist (UM) policy, its analysis applies to UIM policies as well. See 1 Arnold P. Anderson, Wisconsin Insurance Law § 4.14 (5th ed. 2004). 2
No.
2006AP002662.awb
The named insured and any relatives who reside in the named insured's insureds, household or are Class I insureds. include Id. anyone Class else II
"occupant
insureds," Id.
while
occupying a covered auto.
Finally, anyone who is entitled Id. In Wisconsin
to a derivative claim is a Class III insured.
as well as nationally, UIM coverage is personal and portable for Class I insureds.2 ¶39 correspond The provisions this of Jonathan's of father's UIM UIM policy The
with
understanding
insurance.
initial grant of coverage states that Hastings will "pay all sums the 'insured' damages is legally the entitled owner or to recover of as an
compensatory
from
driver
'underinsured motor vehicle.'" distinct classes of insureds: I. II.
The policy further defines three
The Named Insured and any [resident] "family members." Anyone else "occupying" a covered "auto" or temporary substitute for a "covered auto". . . .
III. Anyone for damages he or she is entitled to recover because of "bodily injury" sustained by another
"insured." ¶40 The definition of The Class only I insureds who Class contains must II no
occupancy requirement. covered auto to be
insureds are
occupy a insureds.
afforded
coverage
Wisconsin Insurance Law, supra, § 4.14; see also Alan I. Widiss & Jeffrey E. Thomas, Uninsured and Underinsured Motorist Insurance § 33.2 (3d ed. 2005) ("Most significantly, clause/class (1) insureds do not have to be an occupant of an insured vehicle when an injury occurs in order to be covered."). 3
2
No.
2006AP002662.awb
Under the majority's analysis, however, there is no distinction between Class I and Class II insureds——both must be occupants of a covered vehicle in order to receive coverage. ¶41 that An established principle of policy interpretation is should read a policy to give meaning to every
courts
provision, avoiding constructions that render portions of the policy meaningless. Wis. 2d 136, language is ¶25, given 605 the Isermann v. MBL (Ct. Life App. by Assur. Corp., If 231 the the
N.W.2d 210 effect
1999).
advanced
the
majority,
definition of Class I insureds is rendered meaningless here. Why would the policy differentiate between Class I insureds and Class II insureds if there is no distinction? ¶42 Reading this policy to give meaning to every
provision, I conclude that there is a distinction between Class I and Class II insureds——Class I insureds need not occupy a covered auto in order to be covered under the UIM endorsement. As a Class I insured, Jonathan's UIM coverage is personal and portable and he is entitled to coverage wherever he may go. II ¶43 the After eschewing this basic principle of UIM coverage, embarks the upon is a determination or of whether the The
majority of
language
policy
ambiguous
unambiguous.
lynchpin of the majority's analysis is that the language of the policy is clear and unambiguous. concluded that the language was If, however, it the majority have to
ambiguous,
would
decide the case in favor of coverage for Jonathan. an insurance policy must be construed 4 in favor
Ambiguity in of coverage.
No.
2006AP002662.awb
Folkman
v.
Quamme,
2003
WI
116,
¶13,
264
Wis. 2d 617,
665
N.W.2d 857. ¶44 The problem with the majority opinion is that it
remains steadfast to its conclusion that the language is clear and unambiguous, disregarding the conclusions of court after
court examining the same language. has examined identical language
Indeed, a parade of courts and reached a conclusion
opposite to the majority. ¶45 Jonathan's persuasive. Both the circuit court and the court of appeals found argument that the language was ambiguous to be
Nonetheless, both courts were bound to follow the
holding of Crandall ex rel. Johnson v. Society Insurance,3 in which the court of appeals determined that similar language
unambiguously restricted UIM coverage to occupants of covered autos. Both courts struggled to reconcile the obvious ambiguity
in this UIM endorsement with the unequivocal holding in Crandall that it was unambiguous. ¶46 To begin, the circuit court stated that Jonathan's
legal arguments and secondary authorities were persuasive: "I would be tempted to be sympathetic to the language——to a finding that it does create it ambiguity." it was Nonetheless, constrained the to court follow
concluded——as Crandall. ¶47 to this
must——that
Initially, the court of appeals certified the question court, noting that "[t]he introductory provision
Crandall relied on is plainly inconsistent with the provisions
3
2004 WI App 34, 269 Wis. 2d 765, 676 N.W.2d 174. 5
No.
2006AP002662.awb
that
follow
it"
and
asked
us
to
modify,
limit,
or
overrule
Crandall.
We did not accept certification, and the court of
appeals ultimately determined that under Cook v. Cook,4 it must follow the conclusion of the disagreed with it. Crandall court, even though it
Lisowski v. Hastings Mut. Ins. Co., No.
2006AP2662, unpublished slip op., ¶1 (Ct. App. Jan. 31, 2008). ¶48 Likewise, the court of appeals in Ruenger v. Soodsma,
2005 WI App 79, 281 Wis. 2d 228, 695 N.W.2d 840, struggled to reconcile Crandall's unequivocal holding with plainly
inconsistent policy language.
Ruenger, the insured, argued that
identical introductory language as here created ambiguity when read in conjunction Id., with ¶34. the The coverage court section of the that UIM the
endorsement.
acknowledged
coverage section of the UIM endorsement, read alone, provided coverage for the Class I insured while occupying an uncovered vehicle. Id., ¶31. Noting that there was merit to Ruenger's
ambiguity argument, the court concluded that nonetheless, it was bound by the holding in Crandall. ¶49 Courts around the Id., ¶34. have examined identical
country
language and have uniformly determined that it is ambiguous. See Reisig v. Allstate, because 645 the N.W.2d 544, terms of 550-51 the UIM (Neb. 2002)
(finding
ambiguity
endorsement
conflicted with the introductory language "for a covered auto"); Bushey v. N. Assurance Co., 766 A.2d 598, 603 (Md. Ct. App. 2001)
4
(same);
see
also
Stoddard
v.
Citizens
Ins.
Co.,
643
208 Wis. 2d 166, 189, 560 N.W.2d 246 (1997) (stating that the court of appeals may not overrule, modify, or withdraw language from a prior court of appeals decision). 6
No.
2006AP002662.awb
N.W.2d 265, similar UIM
269
(Mich.
Ct.
App.
2002)
(determining
that to
a a
endorsement
unambiguously
provided
coverage
Class I insured even though the insured did not occupy a covered auto). ¶50 It should give the majority pause that in all of these
cases, the courts have determined that identical language was, at the very least, contextually ambiguous. Nonetheless, the
majority unhesitatingly turns a blind eye to this overwhelming weight of authority, clings to Crandall, and concludes that the language of the policy is clear and unambiguous. Wisconsin
stands alone in this interpretation. ¶51 because The the majority covered determines language that in there the is no ambiguity is
auto
UIM
endorsement
consistent with the declarations page of the liability policy. Majority op., ¶25. It ignores, however, the obvious conflict
between the covered auto language and the grant of coverage in the UIM endorsement. In focusing on the symmetry between the
declarations page and the "for a covered auto" language, the majority skirts the established principle of insurance policy construction coverage. ¶52 Finally, as requested by the court of appeals in its memorandum to this court, I would take this that ambiguity must be construed in favor of
certification
opportunity to modify Crandall.
The court of appeals correctly
explained that "[t]he introductory provision Crandall relied on is plainly inconsistent with the provisions that follow it." Our interpretation should comport with the reality observed by 7
No.
2006AP002662.awb
other courts that have examined the same language——the policy language is ambiguous. ¶53 clear and Although the majority proclaims that the language is unambiguous, all too it does this not court necessarily finds make it so.
Instead,
often
policy
language
unambiguous which then obviates the need for further meaningful analysis. I am reminded of the words of a nonsense poem by
Lewis Carroll: "I have said it thrice: What I tell you three times is true."5 ¶54 Just because Wisconsin courts thrice proclaim that
this language is clear and unambiguous, it makes it no more true than was the proclamation in Carroll's poem. For the above
reasons, I would conclude that Jonathan's injuries are covered
"Just the place for a Snark!" the Bellman cried, As he landed his crew with care; Supporting each man on the top of the tide By the finger entwined in his hair. "Just the place for a Snark! I have said it twice: That alone should encourage the crew. Just the place for a Snark! I have said it thrice: What I tell you three times is true." Lewis Carroll, "The Hunting of the Snark" (1876).
5
8
No.
2006AP002662.awb
under
his
father's
UIM
policy.
This
interpretation
is
consistent with established principles of UIM coverage and of insurance policy interpretation. dissent. ¶55 I am authorized to state that CHIEF JUSTICE SHIRLEY S. Accordingly, I respectfully
ABRAHAMSON joins this dissent.
9
No.
2006AP002662.awb
1
