*1 Plaintiff-Interpleader-Appel Mark A. Matthiesen, lant-Petitioner, Involuntary- Employers Health Insurance Company, Plaintiff-Interpleader-Defendant,
v. Casualty Company, Defendant-Inter Continental pleader-Plaintiff, Marilyn Wild, of Edward Wild Inter Estate pleader-Plaintiffs, v. Mary Interpleader-Defendant, K. Matthiesen, Insurance Company, Inter- Mutual pleader-Defendant-Respondent.
Supreme Court 7, 1995. argument No. 93-0453. Oral March June Decided 1995. (Also 729.) reported in 532 N.W.2d Callaghan's Digest, topic "‘See Wisconsin same and section number. *3 plaintiff-interpleader-appellant-petitioner For Cannon, Mark L. M. briefs William there were Dunphy, S.C., Milwaukee and & Thomsen and Cannon argument by L. Thomsen. oral Mark interpleader-defendant-respondent there
For the Peterson, & *4 Johnson Cain and was a brief Janet E. by argument Murray, S.C., James and oral Milwaukee Murray. T. by Robert L. Jaskul- curiae brief was filed
Amicus Rosenberg, Mawicke, Domnitz, & and Goisman ski Academy of Trial S.C., for Wisconsin Milwaukee Lawyers. by
Amicus curiae brief was Parrett, filed Noreen J. Whiting Sinykin, Joanne R. and LaFollette & Madison for the Wisconsin Insurance Alliance. by
Amicus curiae brief was filed Mark A. Klinner Terwilliger, Conway, Wakeen, and S.C., Piehler & Wausau for the Civil Trial Counsel of Wisconsin. unpublished
DAY, J. This is a review of an deci- appeals affirming judgment sion of the court of a of the County, circuit court for Milwaukee Honorable Michael Judge, granted summary J. judgment Barron, against Mr. Mark A. Matthiesen in favor of American Family Company, Mutual Insurance Mr. Matthiesen's (UIM) underinsured motorist insurer. The sole issue on review is whether the clauses in the two UIM issued to Matthiesen apply. separate poli- Because Matthiesen had two cies, we hold that the clauses are invalid as contrary 631.43(1), (1993-94),1 to sec. Stats. "stacking"2 except they pre- statute, to the extent that vent double Therefore, recoveries. Section (1993-94), Stats. provides part: (1) provisions. 631.43 Other insurance GENERAL. When 2 or policies promise
more indemnify against an insured the same loss, provisions no "other insurance" may reduce the aggregate protection of the insured below the lesser of the actual insured loss suffered the insured or the total indemnification promised by if there were provi- no "other insurance" policies may sions. their terms define the extent to which primary each excess, is and each is but if the contain point, inconsistent terms on that jointly insurers shall be severally liable to any coverage the insured on where the terms are inconsistent, each to the full provided amount of it .... 2The term "stacking" as used in the industry insurance has been defined as follows: *5 of case, of this and decision not to the facts
do apply is reversed. the court Matthiesen was 6, 1991, Mark A. On November Edward with Mr. in an automobile collision involved Casualty insured Continental Mr. Wild was Wild. to Mat- liability $300,000. for up Insurance Company both policies, insurance had two automobile thiesen each Insurance Company, issued with endorsement an provided of which pro- The endorsements $100,000 person. per limits of vided in part: bodily damages for pay compensatory
We will to legally is entitled injury person which an insured an operator of underin- from the owner or recover motor vehicle. sured poli- in both motor vehicle" was defined
"Underinsured cies as follows: means a motor vehicle motor vehicle
Underinsured liability policy at the by a bond or which is insured injury provides bodily of the accident which time an insured damages less liability limits than entitled to recover. person legally is the'availability "Stacking" just of more is word to denote another insured. the losses than one in the reimbursement policy limits of not until the insurer's does arise second exhausted; the com- nor does the third's arise until the first are is There carriers are exhausted. bined limits of the first second prorating no between insurers. 159 n.1, 361 N.W.2d v. MSI Ins. Tahtinen Motorists, (1985) Pretzel, (quoting Paul W. Uninsured 25.5(B) (1972)). at 88 stacking is used the same term also when
"The .insurer aggregate multiple and the insured seeks issues policies." Id. coverage from each of the *6 Family policies The American also both contained reducing a that read clause as follows: liability by:
The limits of will be reduced A payment 1. made or or payable amount on or any person organization may behalf of which be legally liable, any or under collectible auto insurance, for loss caused an accident with an motor underinsured vehicle. brought against
Matthiesen suit Continental Cas- ualty. against Family He also cross-claimed American coverage. Casualty $200,000 for paid of UIM Continental Family $300,000. Matthiesen American moved for summary judgment. American conceded for the purpose summary judgment of its motion that Matthie- damages more $500,000, sen's were than but asserted reducing that it owed no benefits because the clauses unambiguous, clearly applica- the UIM were granted ble, valid and enforceable. The trial court Family's motion, and court of petitioned affirmed. Matthiesen review, this court for granted. which was argues
Matthiesen that the clauses in against two insurance cannot be enforced him (1) stacking because the clauses violate the statute, (2) given expectations, Stats., consumer ambiguous against are and must be construed (3) company, the insurance and illusory would be if the clause were enforced since the insured would never the full recover amount promised by policy from the insurer because some always amount would be deducted from the lim- payment its due to a from the underinsured motorist's liability policy. unambig- Because we that the conclude language precludes uous of the statute case, we this enforcement appeals. Therefore, the decision of the court of reverse not reach issues number two three. dowe summary judgment, and This case decided on was dispute. case no there are material facts provi- requires the construction insurance contract questions These of law which sions and statutes. are to the without deference decisions this court decides appeals. B. & J. court or court of Bindrim v. the circuit Agency, 534, Ins. N.W.2d (1995). *7 scope ascertaining proper given the to
"In be 631.43(1), language the of the statute itself Stats., Mut. first be Woodv.American Fam. must considered." (1989). 594 "Sec. Ins., 639, 646, 436 N.W.2d poli by applies its when two Stats., terms, against indemnify promise an the same to insured cies loss." Id. purposes statute, Matthiesen, for the the
Here, Family by policies, two American two the issued had Playman, 171 Mut. v. Bend Ins. Co. Insurance. West (1992); Carrington v. 37, N.W.2d 915 42, 489 Wis. Ins., 25, 2d Wis. Paul Fire & Marine 169 St. 224 - (1992). policies promised Each those N.W.2d 267 indemnify against a in a collision him loss suffered to no dis motor There is an underinsured vehicle. with pute vehicle was an underinsured that Mr. Wild's according to terms Matthiesen's motor vehicle the coverage policy. that UIM court has held Further, this Playman, Wood, 2d at 42; be stacked. can applicable the statute is Thus, 2d at 650. Wis. the the becomes whether issue Matthiesen, to reducing the clauses violate statute. clauses state that the reducing limit of liabil- is
ity reduced amounts received from collectible "any auto insurance." liability Fámily's American limit of "if there were no 'other insurance' provisions" $200,000: $100,000 is for each policy, stacked. Conti- nental Casualty paid $300,000. Thus, enforced, if clauses would result in zero for Mr. Matthiesen from his For own insurer. of this purposes motion, American Family concedes that Mr. Matthie- sen's damages $500,000. are over According terms of Mr. Matthiesen's policy, insured against for "compensatory damages bodily which an insured injury person legally is entitled to recover from the owner or operator of an underinsured motor Thus, vehicle." the actual insured for loss pur- poses $200,000. of this motion is at least Therefore, clauses in the two to "reduce attempt the aggregate of the insured below the protection lesser of the actual insured loss suffered insured or the total indemnification if promised by there were no 'other insurance' Section provisions." 631.43(1), Stats. The clauses do not for the one qualify to the on exception prohibition clauses found *8 in sec. 631.43(1), Stats., in that do they not merely define which is and which coverage primary is excess. 631.43(1). Section such, As we conclude that the reduc- ing clauses are invalid to the except extent that they prevent double recoveries.3
3A passed by and, 6, bill both houses as of June awaiting by action the Governor would affect current law relat ing stacking to both coverage. underinsured motorist See 1995 Senate Bill 6 as Assembly amended Substitute Amend ment 1.
200 previous factually to two similar This case is appellate Wood, 148 2d state, Wis. decisions in this Mut. Ins. v. American 639, and Fairbanks 1994). (Ct. App. cases, In both those 838 coverages multiple the UIM issued the insured had coverage purported to reduce UIM that same insurer proceeds from the were received insurance where Wood, 650; Fair- 148 Wis. 2d at insurance. tortfeasor's in cases held banks, 2d at 840. The courts both 181 Wis. except to the extent invalid clause to be the recovery. they prevented Wood, 148 Wis. that double ambiguous (policy language and would was at poli- provide interpreted on both UIM to be (reducing cies); Fairbanks, 2d at 843-44 181 Wis. policies violated the in two UIM clauses statute). in dicta that Wood, court stated
However, in this 631.43(1), apply because, since Stats., did not "promise liability policy indem- to did not tortfeasor's or more nify" not two holder, there were the UIM against indemnify promised the same to that court did not The Wood Wood, Wis. 2d at 651. loss. poli- policies were two the two whether consider UIM against indemnify promised the insured to cies that directly appeals Fairbanks, the court In loss. same question UIM whether two confronted protections and held of sec. could invoke attempts to invalid clauses were Although the court of the UIM benefits. limit the extent deci- Wood, stated that its it did not refer decision more recent on this court's was based sion multiple Play clause man, that a held which coverages could UIM invalid because was Fairbanks, 2d at 843. stack. *9 correctly
We conclude that the Fairbanks court interpreted 631.43(1), Stats. As noted the Fair- multiple coverages bring court, banks will policyholder protections stacking within the of the stat- Playman, although ute. stacking Further, Wis. 2d at 42. require poli-
statute does the existence of two promise indemnify against cies which to loss, same only pro- it does not state that the "other insurance" aggregate protection ceeds that cannot reduce the proceeds the promise are from one of the indemnify.
to Instead, it states that "no 'other provision" coverage. insurance' can reduce Section 631.43(1). reducing Woods, Fairbanks, attempt aggregate this case all to reduce the protection payments due to from "other any language Therefore, insurance." in Wood which apply stated that sec. did not to the facts of hereby that case is overruled. Family argues that Smith v. Atlantic (Ct.
Mut.
542,
Ins.
N.W.2d 465
1989) (Smith (Ct.
App.
App.)), aff'd,
(1990) (Smith),
controlling
Because we of the enforcement statute precludes stacking an not decide whether case, in we need clauses this public policy in the or whether exists ambiguity of the the invalidation require would However, note we of the statute.5 absence even in the 4 The Smith court stated: case, in the first instance present because we conclude In the as motor vehicle" an "underinsured vehicle is not
that the other policy, not reach the issue unambiguously we need defined may affect the policy's clause regarding extent the to what claim. omitted). (footnote
Smith,
2d at 814
155 Wis.
correctly states
in her concurrence
Abrahamson
Justice
had
apply if Matthiesen
not
statute would
that
reason
However,
that
her statement
policy.
only one UIM
require
enforcement
therefore
ing
opinion would
of this
that
opinion specifically states
reducing clause is incorrect.
consistently
that courts
this state have
held that
according
insurance contracts must be construed
expectations of the insured. Kuhn v.
to the reasonable
50, 61,
By the Court.—The decision of the court of pro- further is reversed and the cause remanded for ceedings opinion. not inconsistent with this it does not reach the issue of whether the clause would be enforceable under those circumstances. (concurring). ABRAHAMSON,
SHIRLEY S. J. I persuaded by public policy arguments am more majority's opinion interpretation than I am its 631.43(1). sec.
According majority opinion's interpretation to the 631.43(1), of only 631.43(1) had been sec. Matthiesen insured with policy coverage, $200,000 one with apply not
would and therefore the policy in Matthiesen's reduce Matthie- clause would recovery from sen's his insurer amount liability policy. majority's reasoning tortfeasor's unfairly ¿¿pending leads to different results on thus policyholder the number the UIM has cover the same loss. (dissenting). accept
STEINMETZ, I do not J. legality binding of this court underinsured motorist (UIM) coverage Stats., to the terms of sec. required by "stacking UIM is not the so-called statute." part as a of an automobile as is unin- statute (UM). private It is a contract sured motorist and not controlled the insured and the insurer between *12 by statute. agree reasoning of Justice William
I still with in Wood v. American Fam. Mut. G. Callow's dissent (1989). Ins., 594 639, 148 Wis. 2d 436 N.W.2d only (dissenting). issue GESKE, P. J. The JANINE reducing unambiguous an in this case is whether (UIM) policy motorist clause in an underinsured below, I For the reasons set forth should be enforced. reducing in that the clauses the UIM conclude by Family applicable to American are valid and issued the facts of this case.
205 The facts are Matthiesen and Wild undisputed. in an automobile accident which were involved in Wild's death and to Matthie- bodily injuries resulted sen, $500,000. valued in excess of Continental insurer, A $300,000. Wild's Matthiesen Casualty, paid dispute sought arose when Matthiesen recover UIM coverage Family. from American Matthiesen had pur- chased from American Family, two with $100,000 limits of for each declared vehicle. liability Family American denied Matthiesen when more Continental than value Casualty paid of policies, stating application policies' clauses limited its The liability. clauses state that will be reduced liability pay- "[a] ment made or on payable by any amount or behalf of or person organization liable, which be or may legally any insurance, under collectible auto for loss caused an accident an motor with underinsured vehicle."
The limits of describing the liabil- policy language is neither nor ity ambiguous confusing: Matthiesen received from Continental excess payment Casualty limits; of the American Family policy therefore, Mat- thiesen is not entitled to recovery. court held that the term correctly liability" "limits of is an unequivocal unambiguous phrase set specifically $100,000.1 forth in the at Thus, when Conti- nental it Casualty paid $300,000, Matthiesen extinguished any liability to its insured, Matthiesen, for UIM coverage. Application unambiguous this case negates See Smith v. Atlantic Mut. Ins. 542, 548, 151 Wis. 2d (Ct. 1989), App. N.W.2d 465 aff'd (1990). N.W.2d 597 *13 any need to § invoke the statute, 631.43, Accordingly, respectfully Stats. I dissent.
I am authorized to state that JUSTICEJONP. WIL- joins dissenting opinion. COX this