James E. Vieau v. American Family Mutual Insurance Company

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2006 WI 31 SUPREME COURT CASE NO.: OF WISCONSIN 2004AP1358 COMPLETE TITLE: James E. Vieau, Plaintiff-Appellant-Petitioner, v. American Family Mutual Insurance Company and Acuity, a mutual insurance company, Defendants-Respondents. REVIEW OF A DECISION OF THE COURT OF APPEALS 2005 WI App 34 Reported at: 278 Wis. 2d 683, 693 N.W.2d 127 (Ct. App. 2005 Published) OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: December 1, 2005 SOURCE OF APPEAL: COURT: COUNTY: JUDGE: Circuit Brown Donald R. Zuidmulder April 19, 2006 JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING: ATTORNEYS: For the plaintiff-appellant-petitioner, there were briefs by Robert J. Janssen, Christina Peterson, and Stellpflug, Janssen, Hammer, Kirschling & Bartels, S.C., De Pere, and oral argument by Robert J. Janssen. For the defendant-respondent American Family Mutual Insurance Company, there was a brief by Robert N. Duimstra and Menn Law Firm, Ltd., Appleton, and oral argument by Jonathan M. Menn. 2006 WI 31 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2004AP1358 (L.C. No. 2003CV680) STATE OF WISCONSIN : IN SUPREME COURT James E. Vieau, Plaintiff-Appellant-Petitioner, FILED v. American Family Mutual Insurance Company and Acuity, a mutual insurance company, APR 19, 2006 Cornelia G. Clark Clerk of Supreme Court Defendants-Respondents. REVIEW of a decision of the Court of Appeals. ¶1 JON P. WILCOX, J. Affirmed. The petitioner, James E. Vieau (Vieau), seeks review of a court of appeals decision affirming a summary judgment order of the Brown County Circuit Court, Donald R. Zuidmulder, Judge, in favor of American Family Mutual Insurance Company (American Family) in a personal injury action arising from a motor vehicle accident. See Vieau v. Am. Family Mut. Ins. Co., 2005 WI App 34, 278 Wis. 2d 683, 693 N.W.2d 127. Vieau did not petition for review of the decision as it pertains No. 2004AP1358 to Acuity, a mutual insurance company; therefore, this appeal is limited to the decision as it pertains to American Family. ¶2 We first determine that Wis. Stat. § 632.32(6)(b)1. (2003-04)1 applies to underinsured motorist (UIM) coverage when issued as part of a policy containing liability insurance. further conclude that American Family's We "own-other-car" definitional exclusion is valid under Wis. Stat. § 632.32(5)(e) as Vieau is excluded from his mother's UIM coverage because he owns his own motor vehicle and not because he is related by blood to the named insured. Therefore, we affirm the court of appeals. I ¶3 The pertinent facts are set forth as follows. This case arises from an automobile accident that occurred on June 1, 2002. Vieau was a passenger in a truck owned and operated by Shane P. complaint Kaczrowski that intoxicated; (Kaczrowski). Kaczrowski Kaczrowski attempting to negotiate was denied a Vieau driving this curve in the the a driveway embankment and in vehicle roadway, became the his while allegation. traveled off of the roadway and into a ditch. struck alleged While vehicle The truck then airborne for approximately 93 feet before it struck the ground and rolled several times. Vieau suffered serious injuries as a result of the accident and claimed medical expenses in excess of $60,000. 1 All references to the Wisconsin Statutes are to the 200304 version unless otherwise noted. 2 No. ¶4 2004AP1358 There were three policies in force at the time of the accident that might have provided coverage to Vieau. First, Vieau had a policy issued by Acuity, insuring his 1976 Ford pickup truck; this policy $50,000 per person and Kaczrowski had a limits of policy liability of included UIM $100,000 issued $25,000 by coverage per accident. Acuity per limits with person Second, bodily and of injury $50,000 per occurrence; the policy also contained UIM coverage limits of $50,000 Vieau per person had a and policy $100,000 per issued by accident. American Family Third, for her Kathy 1993 Plymouth Acclaim that had UIM coverage limits of $100,000 per person and $300,000 per accident. ¶5 On April 17, 2003, Vieau filed a lawsuit for personal injuries against American Family, Kaczrowski, and Acuity2 seeking UIM coverage from the insurance carriers and Kaczrowski. Manitowoc County was also named in the complaint but was later voluntarily dismissed. ¶6 Vieau recovered the $25,000 bodily injury liability insurance proceeds under Kaczrowski's Acuity policy, and he also recovered policy.3 $25,000 of UIM insurance proceeds under his own However, he further alleged entitlement to UIM benefits 2 Our review solely concerns American Family and the policy it issued to Kathy Vieau. Therefore, Acuity's involvement in this case and the policies Acuity issued to Vieau and Kaczrowski will be discussed only as needed. 3 Vieau's policy contains a reducing clause that reduced his UIM coverage from $50,000 to $25,000 by virtue of the $25,000 liability payment made by Acuity on behalf of Kaczrowski. 3 No. under his mother's policy. In response to 2004AP1358 Vieau's claim, American Family moved for summary judgment declaring that Kathy Vieau's policy provided no UIM coverage to Vieau. American Family based its argument on the fact that Vieau was not a "relative" entitled to coverage because the policy's definition of "relative" did not include anyone who owned a motor vehicle. ¶7 The policy's UIM endorsement person" as "[y]ou or a relative." defined throughout household, the related policy to an "insured A "relative," in turn, is as you defines "a by person blood, living in your marriage or adoption. . . . It does not include any person who, or whose spouse, owns vehicle." a motor vehicle other than an off-road motor It is undisputed that, at the time of the accident, Vieau lived with his parents, Robert and Kathy Vieau, and Vieau owned a motor vehicle. ¶8 After briefing and a hearing, the circuit court granted American Family's summary judgment motion in an order filed April 7, 2004, and Vieau's claims against American Family were dismissed. The court determined that Kathy Vieau's policy provided no UIM coverage for the claims of Vieau. ¶9 Vieau appealed, and the court of appeals affirmed. The court first recognized the uncertainty in the case law as to whether coverage. Wis. Stat. § 632.32(6)(b)1. applies to indemnity However, the court assumed for the sake of argument the provisions of § 632.32 did apply to indemnity insurance, and it instead based its holding on § 632.32(5)(e), which states: "[a] policy may provide for exclusions not prohibited by sub. 4 No. (6) or other applicable law. 2004AP1358 Such exclusions are effective even if incidentally to their main purpose they exclude persons, uses or coverages (6)(b)." that could not be directly excluded under sub. Comparing the situation to Peabody v. American Family Mutual Insurance Co., 220 Wis. 2d 340, 582 N.W.2d 753 (Ct. App. 1998), the court of appeals determined that "[t]he purpose of this exclusion is not to deny coverage or benefits to relatives, but to prevent car owners who either reject UIM coverage or who have independent policies from getting coverage they have not paid for simply because of their resident relative status." Vieau, 278 Wis. 2d 683, ¶11 (citing Peabody, 220 See Wis. 2d at 354). II ¶10 review This case comes before us on summary judgment. "We a circuit independently, court's applying the grant same of summary methodology as judgment the circuit court." Smaxwell v. Bayard, 2004 WI 101, ¶12, 274 Wis. 2d 278, 682 N.W.2d 923 (citing Town of Delafield v. Winkelman, 2004 WI 17, ¶15, 269 Wis. 2d 109, 675 N.W.2d 470). Pursuant to Wis. Stat. § 802.08(2), summary judgment "shall be rendered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." "Where the material facts are not disputed, the court is presented solely with a question of law, subject to de novo 5 No. 2004AP1358 review." Smaxwell, 274 Wis. 2d 278, ¶12 (citing Winkelman, 269 Wis. 2d 109, ¶16). ¶11 In this "own-other-car" case, we address definitional whether American exclusion Wis. Stat. § 632.32(6)(b)1. "This is issue Family's valid requires under that we interpret and apply statutory provisions to undisputed facts and that we interpret an insurance policy. These are questions of law subject to independent appellate review." Progressive N. Ins. Co. v. Hall, 2006 WI 13, ¶9, __ Wis. 2d __, 709 N.W.2d 46 (citing Beerbohm v. State Farm Mut. Auto. Ins. Co., 2000 WI App 105, ¶8, 235 Wis. 2d 182, 612 N.W.2d 338). III ¶12 the As a preliminary matter, the parties dispute whether requirements More of § 632.32(6)(b)1. specifically, the extend parties to UIM coverage. dispute whether Wis. Stat. § 632.32(1)4 limits the scope of § 632.32(6)(b)1. to liability coverage and not indemnity coverages such as UIM coverage. ¶13 Fund, Vieau relies on Mau v. North Dakota Insurance Reserve 2001 argument WI that 134, 248 Wis. 2d 1031, § 632.32(6)(b)1. indemnity policies. applies 637 to N.W.2d 45, both for his liability and In Mau, this court questioned statements 4 Wisconsin Stat. § 632.32(1) provides: "Except as otherwise provided, this section applies to every policy of insurance issued or delivered in this state against the insured's liability for loss or damage resulting from accident caused by any motor vehicle, whether the loss or damage is to property or to a person." 6 No. from previous decisions that suggested certain 2004AP1358 provisions of § 632.32 applied solely to liability policies: Wis. Stat. § 632.32, which, except as otherwise provided, applies to all motor vehicle insurance policies issued or delivered in Wisconsin. Clark v. Am. Family Mut. Ins. Co., 218 Wis. 2d 169, 173, 577 N.W.2d 790 (1998). Some earlier cases suggest that certain provisions of § 632.32 apply only to liability policies, not indemnity insurance. See Martin v. Milwaukee Mut. Ins. Co., 146 Wis. 2d 759, 770, 433 N.W.2d 1 (1988); Peabody v. American Family Mut. Ins. Co., 220 Wis. 2d 340, 350, 582 N.W.2d 753 (Ct. App. 1998). However, the plain language of several subsections in § 632.32 demonstrate the applicability of those sections to indemnity insurance. . . . Furthermore, this court has applied § 632.32 to indemnity insurance. Id., ¶30 (citations omitted). ¶14 relied Thus, Vieau argues that the circuit court erroneously on Peabody definition because, of for its "relative" Vieau conclusion is contends, not Mau that barred overruled by American Family's § 632.32(6)(b)1. Peabody. American Family, on the other hand, contends Mau is distinguishable from Peabody because Mau considered an excess liability policy, whereas Peabody considered UIM indemnity coverage. ¶15 analogous In Peabody, the court of appeals addressed a factually case with an identical Peabody, 220 Wis. 2d at 347-48. "own-other-car" exclusion. In that case, Angela Peabody, like James Vieau, was attempting to obtain UIM benefits as a resident relative under her father's American issued on his own vehicle. Id. at 345. first policy determined that the Family policy The court of appeals "clearly and unambiguously limits the UIM coverage to the named insured or a relative, 7 No. 2004AP1358 provided the relative does not own his or her own vehicle." Id. at 347. Peabody owned her own vehicle; therefore, the court concluded that on its face, the policy prevented her from receiving UIM coverage because she did not meet the definition of "relative." ¶16 Id. at 349. Peabody argued § 632.32(6)(b)1. applied to all insurance policies, and therefore, American Family's exclusion was contrary to § 632.32(6)(b)1., because the policy excluded a blood relative. appeals Relying Id. disagreed § 632.32(6)(b)1. on § 632.32(1), with Peabody and "prevents insurers from the court concluded of that excluding persons related by blood or marriage from receiving coverage or benefits under a liability insurance policy." original). In other words, Id. at 350 (emphasis in subsection (6)(b)1. "does not contain any language otherwise providing that its applicability is anything language other of the than to statutory liability scheme policies. indicates The that plain insurance policies may not exclude relatives by blood or marriage from liability coverage exclusions under or all benefits, but does circumstances." not Id. prohibit at 350 all (citing Wis. Stat. § 632.32(5)(e)) (emphasis in original). ¶17 Interestingly, Peabody seemingly ignored the completely opposite language in distinguishing Bindrim v. B. & J. Insurance Agency, 190 Wis. 2d 525, 527 N.W.2d 320 (1995). In Bindrim, of this court § 632.32(6)(b)1., terms[.]" determined requires all that "the policies to plain language comply with its Id. at 534 (emphasis in original); see also Clark, 8 No. 2004AP1358 218 Wis. 2d at 173 ("Wisconsin Stat. § 632.32 applies to all motor vehicle Wisconsin."). insurance policies issued or delivered in As we stated in Bindrim, "[t]he terms of the Omnibus Coverage Statute are clear. 'No policy' may exclude a person related by blood or marriage to the insured. 632.32(6)(b)1., Stats. Section No policy means no policy." Bindrim, 190 Wis. 2d at 534. ¶18 For its part, the Peabody court determined that Bindrim did not apply because of a different factual scenario and also because liability coverage, not UIM coverage, was at issue. Peabody, address the 220 Wis. 2d at differing positions 351-52. on The whether court did not § 632.32(6)(b)1. applied to all types of coverage or just liability coverage. ¶19 We agree with Vieau that § 632.32(6)(b)1. applies to indemnity coverage when issued as part of a policy containing liability insurance, contrary to the language of Peabody. We base this conclusion on our decision in Bindrim and the language in Mau cited suggestion in previously, Peabody liability policies. which that called into § 632.32(6)(b)1. question applies only the to Additionally, in our recent decision in Hall, we stated the Mau court "determined that it is appropriate to apply provisions of § 632.32 to underinsured motorist coverage, at least when that coverage is part of a liability policy." Hall, __ Wis. 2d __, ¶21 (citing Mau, 248 Wis. 2d 1031, ¶30 & n.13) (emphasis in original). ¶20 We also stated in Hall that Mau "further suggested that any distinction between liability coverage and indemnity 9 No. coverage does not matter for purposes of 2004AP1358 § 632.32 when underinsured motorist coverage is issued as part of a policy containing liability insurance[.]" Id., ¶22. This language from Mau reads as follows: Liability coverage "requires the insurer to shield the insured from making payment on a claim for which the insured is liable." Blazekovic v. City of Milwaukee, 2000 WI 41, ¶38, 234 Wis. 2d 587, 610 N.W.2d 467. "In contrast, uninsured motorist coverage [indemnity coverage] seeks to compensate the insured after the insured has sustained an actual loss." Id. Similar to uninsured motorist coverage, underinsured motorist coverage is indemnity coverage. Here the distinction between liability and indemnity coverage does not change our conclusion as to the applicability of Wis. Stat. § 632.32. The excess policy falls within the scope of § 632.32 because it is a liability policy. Mau was covered under the excess policy because he bought the IEP Option. According to the rental jacket, "EP [Extended Protection] provides both LIS [Liability Insurance Supplement] and UM protection." The excess policy, therefore, is a liability policy with uninsured and underinsured motorist coverage. Mau, 248 Wis. 2d 1031, ¶30 n.13. ¶21 We conclude that under the reasoning and language of Bindrim and Mau, it is appropriate to apply § 632.32(6)(b)1. to Kathy Vieau's policy as she was issued UIM coverage as part of a policy containing liability insurance. We further withdraw the language in Peabody, which states that § 632.32(6)(b)1. applies only to liability insurance, but we do not overrule the opinion in its entirety. As described below, the reasoning of remainder of Peabody is applicable to our ultimate holding. 10 the No. 2004AP1358 IV ¶22 We Family's next turn to the question "own-other-vehicle" test for analyzing the ¶13. whether validity Second, applicable § 632.32(6) the law'" court of exclusion5 is the determine the an exclusion. See First, the court must prohibits must prohibits American This court has set out a two- Blazekovic, 234 Wis. 2d 587, ¶¶12-13. determine whether definitional permissible under the statutes. step of exclusion. whether exclusion. "any Id. Id., 'other (citation omitted). ¶23 As such, if we were to focus solely on the language of § 632.32(6)(b)1., Vieau would be entitled to UIM benefits under his mother's policy as this statute prohibits policies from excluding coverage to persons related by blood to the insured.6 However, there is another step to the analysis inherent in the language of § 632.32(5)(e). That is, "[a] policy may provide for exclusions not prohibited by sub. (6) or other applicable law. Such exclusions are effective even if incidentally to their main purpose they exclude persons, uses or coverages that 5 We recognize the requirement that a relative not own another car is part of the definition of "relative" and is not framed as an outright exclusion. However, we treat the definition the same as an exclusion. See Mau v. N.D. Ins. Reserve Fund, 2001 WI 134, ¶32, 248 Wis. 2d 1031, 637 N.W.2d 45. 6 Vieau does not contend that any other applicable law prohibits the exclusion in Kathy Vieau's policy, and therefore, the second step of the Blazekovic test is not pertinent to our analysis. 11 No. could not be directly excluded sub. under 2004AP1358 (6)(b)." Wis. Stat. § 632.32(5)(e). ¶24 Vieau argues that excluding a person who owns a motor vehicle from the policy's definition of "relative" contravenes § 632.32(6)(b)1., and cannot be saved by § 632.32(5)(e), because excluding Vieau from his mother's coverage is not "incidental" to the main purpose of the exclusion. Vieau defines incidental based on a dictionary definition: "subordinate, nonessential, or attendant in position or significance . . . occurring merely by chance or without intention or calculation." Webster's Third New International Dictionary 1142 (3d ed. 1986). Using this definition, Vieau contends that it was the blatant purpose of American living Family not to in the provide coverage household, and the to exclusion a blood of relative Vieau as a relative did not happen "merely by chance or without intention or calculation." ¶25 For its part, American Family takes the position that the omnibus statute does not prohibit a policy which excludes Vieau from coverage for reasons other than those enumerated in § 632.32(6)(b)1. American Family argues that Vieau is excluded from UIM coverage by virtue of his ownership of a motor vehicle, not because he is related by blood to the named insured, Kathy Vieau. ¶26 Although there is merit to Vieau's position, we believe that when considering the facts and circumstances of this case, the nature of UIM insurance, the prior precedent, and public policy, American Family's position is stronger. 12 No. ¶27 Underinsured motorist optional and not mandatory. coverage in 2004AP1358 Wisconsin is See Pitts v. Revocable Trust of Knueppel, 2005 WI 95, ¶¶28-29, 282 Wis. 2d 550, 698 N.W.2d 761. "Under most UIM policies, 'UIM coverage is designed "to put the insured in the same position as he or she would have occupied had the tortfeasor's liability limits been the same as underinsured motorist limits purchased by the insured."'" ¶29 (citations omitted). the Id., An insurer must offer UIM coverage to persons purchasing motor vehicle insurance policies, but it is left to the policyholder to determine the extent to which they want to protect themselves inadequately insured See Wis. Stat. § 632.32(4m). tortfeasors, if at all. ¶28 against In this case, Vieau has already collected the policy limits from Kaczrowski's liability insurance and the UIM limits from his own insurer. It is unfortunate that Vieau did not purchase enough UIM coverage to fully cover his medical expenses under his own motor vehicle insurance policy, but it does not follow that he should be able to also tap into his mother's UIM coverage to make up the difference. believe American because it is Family's properly Under § 632.32(5)(e), we definitional focused on exclusion relatives who is valid own their vehicles, with their own corresponding insurance, and who can consider for themselves how much UIM insurance to purchase to fully protect themselves from inadequately insured tortfeasors. In other words, although American Family's exclusion may not allow certain persons related by 13 blood to share in the UIM No. 2004AP1358 coverage of the policy, such an exclusion is incidental to its central purpose. ¶29 turn to For support of our interpretation of "incidental," we its Dictionary. legal definition as defined by Black's Law We note that we have previously looked to the legal definition of "incidental" when attempting to interpret when a negligent act is "incidental to" the operation of a gas station for purposes of deciding insurance coverage. See Home Mut. Ins. Co. v. Ins. Co. of N. Am., 20 Wis. 2d 48, 121 N.W.2d 275 (1963). "Incidental" greater is defined importance; as having "[s]ubordinate a minor Dictionary 765 (7th ed. 1999). to role[.]" something of Black's Law When we consider the rationale and purpose behind American Family's exclusion, we conclude that American Family was first and foremost excluding Vieau by virtue of his ownership of another vehicle for the reasons alluded to above, and it was not excluding Vieau on the basis that he was related to Kathy Vieau. That is, the main purpose of the exclusion is to prevent resident relatives who own their own vehicles from piggybacking on the uninsured motorist (UM) coverage and UIM coverage of a single insured.7 7 We recognize that our interpretation of the term "incidental" may lead some insurance companies to attempt to implement otherwise prohibited exclusions under § 632.32(6) under the guise of some other main purpose. In future cases involving the validity of an exclusion under § 632.32(5)(e), courts should closely scrutinize the facts and circumstances of each case when determining whether "persons, uses, or coverages" are incidentally excluded under a legitimate and justifiable main purpose. Wis. Stat. § 632.32(5)(e). 14 No. ¶30 2004AP1358 We next review the case law that has been analyzed when exclusions of blood relatives is "incidental" for purposes of § 632.32(5)(e). In Bindrim, Susan Degano (Mrs. Degano) struck a motorcycle driven by Thomas Bindrim, while driving an automobile owned by a third party. Bindrim, 190 Wis. 2d at 531. Colonial Insurance Company (Colonial) had issued an insurance policy to Mrs. Degano's husband, Giuliano Degano (Mr. Degano), which had two fatal flaws: (1) the policy tried to limit the coverage given to situations where Mr. Degano was driving a motor vehicle not owned by him; and (2) the policy attempted to restrict coverage to only Mr. Degano via an endorsement which read "insured person or insured persons are restricted to the individual named on the policy, you, while using the car. . . ." Id. at 533 (emphasis in original). this provision directly The court concluded that contradicted § 632.32(6)(b)1., Colonial could not deny coverage to Mrs. Degano. ¶31 and Id. Colonial argued that the exclusion of Mrs. Degano was permissible "because it is incidental to writing a policy the purpose of which is to meet the requirements of the Financial Responsibility argument Statutes." because there was Id. no at 536. policy followed to meet these requirements. We form Id. rejected that had that to be "Since the statutes do not provide for a particular type of coverage, it cannot be argued that the exclusion of Susan Degano was 'incidental' to meeting the Statutes." requirements of the Id. at 537. 15 Financial Responsibility No. ¶32 2004AP1358 Unlike the direct exclusion of Mrs. Degano from her husband's policy, the exclusion policy is much more indirect. of Vieau from his mother's The Colonial policy restricted coverage to the "individual named" on the policy and therefore expressly excluded all blood relatives. policy in this case restricted coverage relatives who owned their own vehicle. remove all relatives from The American Family coverage, solely to those It does not expressly and there is a rational basis for restricting coverage to such relatives. ¶33 This Automobile N.W.2d 838 case is also Insurance (Ct. App. Co. on point Kelly, v. 1986). with 132 In that State Farm Mutual Wis. 2d 187, case, 389 fifteen-year-old Joseph Kelly (Kelly) took, without permission, the keys of a car owned by Kelly's stepfather, Frank Guskey (Guskey), went for a drive, and collided with another automobile. Id. at 188. Guskey's insurer, Home Mutual Insurance Company (Home Mutual), denied coverage to Kelly based on a definitional exclusion in the policy, which stated that "no person shall be considered an insured person if the person uses a vehicle without having sufficient reason to believe that the use is with permission." Id. at 192. The injured party's insurer contended Home Mutual's policy was contrary to § 632.32(6)(b)1. of appeals disagreed and concluded the Id. at 189. policy's The court definitional exclusion was valid: As the trial court here properly noted, however, Home Mutual did not deny coverage because Guskey's stepson was driving, but because the stepson was driving without Guskey's permission. The trial court, in 16 No. 2004AP1358 analyzing Home Mutual's policy, concluded that there was no "blanket exclusion" of family members; "rather there is coverage with a qualifier." The "qualifier," clearly stated in the policy, is that no one will be considered an insured person unless he or she has permission to use the vehicle. Id. at 194-95. Thus, even though the effect of Home Mutual's policy was to deny coverage to a relative of the insured, the court of appeals held that such an exclusion was permissible as the primary purpose of it was to deny coverage for relatives driving without permission. We view American Family's policy in this case as also containing a permissible "qualifier" on the general definition of a relative. ¶34 As alluded to above, the court of appeals utilized the analysis of Peabody in determining whether Vieau was properly excluded from coverage. Vieau claims that it was improper to exclude him from the definition of "relative" because he owned his own vehicle, when ownership or use of the car was in no way related to the accident in which he was injured. This fact, Vieau argues, distinguishes his case from Peabody, and the court of appeals incorrectly relied on the policy analysis in Peabody. ¶35 Contrary to Vieau's contention, Peabody is essentially identical to the facts of this case. Angela Peabody was injured as a passenger in a vehicle she did not own. Wis. 2d at 344. own vehicle, coverage. Id. Peabody, 220 At the time of the accident, Peabody owned her insured by a policy that did not include UIM Peabody attempted to get UIM benefits under her father's insurance policy on his own vehicle. 17 Id. at 345. No. ¶36 "because Similar to she injured was Vieau's in position, a third Peabody party's 2004AP1358 argued vehicle, that it is irrelevant that she owned her own car and that she is therefore entitled to coverage." Id. at 353. not argument persuaded by this The court of appeals was and it instead applied the reasoning and holding of Schwochert v. American Family Mutual Insurance Co., 139 Wis. 2d 335, 407 N.W.2d 525 (1987), aff'd, 172 Wis. 2d 628, 494 N.W.2d 201 (1993). Although the following discussion of the Peabody court was not couched in terms of the relationship between §§ 632.32(5)(e) and (6)(b), we quote it at length because it aptly describes why American Family's "ownother-car" exclusion is a legitimate incidental exclusion under § 632.32(5)(e): We conclude that the facts of the case at hand are sufficiently similar to apply the reasoning and holding of the Schwochert court. Although Peabody was not injured in her own car which did not include UIM coverage as the Schwocherts did, she nevertheless is seeking to tap the UIM benefits of her father's policy on a non-accident vehicle, which policy contained an exclusion of resident relatives who own their own cars from UIM benefits. Peabody owned her own vehicle, insured it with an independent policy, and rejected UIM coverage. We conclude that [Peabody's father's] UIM coverage does not apply to Peabody's injuries sustained in an underinsured vehicle, because the endorsement for UIM coverage was written on another vehicle and specifically excluded coverage for damages incurred by resident relatives who owned their own vehicles. Furthermore, application of the exclusion comports with the public policy that resident relatives should obtain independent policies to guard against the situation where a single insurance policy covers multiple owners because of their resident relative status, and to protect insurance companies 18 No. 2004AP1358 from being held responsible for risks for which they did not contract or receive compensation. Peabody, 220 Wis. 2d at 353-54. Likewise, we reject the fact Vieau was injured in a third party's vehicle as irrelevant to our holding. ¶37 American Family also cites to Clark, 218 Wis. 2d 169, and Beerbohm, 235 Wis. 2d 182, for support of its argument that Vieau's position is untenable under our prior precedent. Clark, this court upheld the validity of an exclusion In that barred coverage outside of the United States and Canada, even though the effect of the exclusion was to deny UM coverage to In Beerbohm, the court of appeals upheld an the insured's son. exclusion for bodily injuries arising out of the use of a motorcycle, even though the effect of the exclusion was to deny liability coverage to the named insured. ¶38 useful, We do not find either of these opinions especially as these opinions did not § 632.32(6)(b)1. in the analysis. focus on the language of In Clark, we looked solely at whether § 632.32(6) prohibited a territorial exclusion for UM coverage; we did not consider how such an exclusion implicated subparagraph appeals (6)(b)1. looked to Similarly, § 632.32(6) to in Beerbohm, determine if the it court of prohibited policy provisions excluding motorcycle coverage. ¶39 Indeed, most policies seemingly contravene § 632.32(6)(b)1. by excluding blood relatives who live outside the household. allow for Section 632.32(6)(b)1., on its face does not limiting coverage to 19 relatives who live in the No. household, but past precedent § 632.32(6)(b)1. in requirement "[n]o that the face has of policy may placed this this absolutist view of gloss subsection's exclude from afforded . . . [p]ersons related by blood[.]" an 2004AP1358 § 632.32(6)(b)1. is the on broad coverage We believe such contrary to the language of § 632.32(5)(e) and our past decisions, which have permissibly allowed restrictions to the coverage of relatives living in the household. ¶40 Thus, circumstances exclusion, we of conclude this which that case denies under American Vieau the mother's policy, is permissible. the facts Family's UIM and definitional coverage under his Were we to decide this case otherwise, a family of five with five vehicles could pay one premium on one policy with UIM coverage and potentially collect UIM proceeds five times. We cannot support such a result. V ¶41 In sum, we conclude that Wis. Stat. § 632.32(6)(b)1. applies to containing American UIM coverage liability Family's when issued insurance. We "own-other-car" as part further definitional of a policy conclude that exclusion is valid under Wis. Stat. § 632.32(5)(e) as Vieau is excluded from coverage because he owns his own motor vehicle and not because he is related by blood to the named insured. Therefore, we affirm the court of appeals. By the Court. The decision affirmed. 20 of the court of appeals is No. 1 2004AP1358

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