947 N.W.2d 205
Wis. Ct. App.2020Background
- Passenger Ryan Johnson died in a car accident; his minor son Elliot is a surviving heir.
- Elliot is an insured under his mother Hannah Brey’s State Farm auto policy, which includes underinsured motorist (UIM) coverage; Johnson was not an insured.
- The State Farm UIM provision required that the "bodily injury" be "sustained by an insured," and only Johnson (the decedent) sustained bodily injury.
- Elliot sued State Farm for UIM benefits for his wrongful-death losses; the circuit court bifurcated coverage and liability and granted summary judgment to State Farm on coverage.
- On appeal the question was whether Wis. Stat. § 632.32(1) and (2)(d) render a policy provision limiting UIM to bodily injury "sustained by an insured" void and unenforceable.
- The Court of Appeals reversed, holding the insured-only bodily-injury requirement is void under § 632.32 and directing the circuit court to enter summary judgment for Elliot on UIM coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 632.32(2)(d) permits an insurer to limit UIM to situations where an insured sustained bodily injury | Brey: § 632.32(2)(d) unambiguously requires UIM protection for any insured who is legally entitled to recover for bodily injury or death; it does not allow adding a requirement that the injured person be an insured | State Farm: The statute’s phrase "bodily injury [or] death" modifies "persons insured ... who are legally entitled to recover," so an insured must be the one who sustained bodily injury | Court: Statute is unambiguous and does not permit re-writing; the insurer cannot condition UIM on the injured person being an insured—the insured-only bodily-injury requirement is void under § 632.32(1) and (2)(d). |
| Whether prior case law or absurdity/foreign authority defeats this interpretation | Brey: Statute governs; policy cannot provide less coverage than statute requires | State Farm: Ledman and other authority support insurer’s reading; result would be absurd or upset limits-law; other jurisdictions (e.g., Eaquinta) reached different result | Court: Ledman did not decide the statutory-preemption question and is not controlling; asserted absurdities are unpersuasive; foreign decisions rely on different statutory language—court rejects these arguments. |
Key Cases Cited
- Ledman v. State Farm Mut. Auto. Ins. Co., 230 Wis. 2d 56, 601 N.W.2d 312 (Ct. App. 1999) (court previously interpreted policy language limiting coverage to insureds)
- State ex rel. Kalal v. Circuit Court for Dane Cty., 271 Wis. 2d 633, 681 N.W.2d 110 (2004) (principles of statutory interpretation)
- Trampf v. Prudential Prop. & Cas. Co., 199 Wis. 2d 380, 544 N.W.2d 596 (Ct. App. 1996) (policy may not provide less coverage than § 632.32)
- Wegner v. Heritage Mut. Ins. Co., 173 Wis. 2d 118, 496 N.W.2d 140 (Ct. App. 1992) (every Wisconsin auto policy must provide at least the statutorily required protection)
- Dowhower v. West Bend Mut. Ins. Co., 236 Wis. 2d 113, 613 N.W.2d 557 (2000) (purpose of UIM coverage explained)
- Eaquinta v. Allstate Ins. Co., 125 P.3d 901 (Utah 2005) (Utah case reaching a different result based on distinct statutory language)