*1 Stаte Farm Mutual Automobile Insurance Com Plaintiff-Respondent-Petitioner,
pany,
v. Franklin Ostlund, V. Thomas Gillette
Defendants-Appellants.
Supreme Court 10, argument No. 00-0637. Oral January 2002. Decided March
For there defendants-appellants was brief Gregory Egan O'Flaherty, Ltd., J. and Parke La Crosse, Gregory Egan. J. and oral argument by *5 ABRAHAMSON, CHIEF JUS- S. 1. SHIRLEY published of a decision of This is a review TICE. part reversing affirming part appeals1 in in and court of County, judgment for La Crosse a of the Circuit Court Judge. Montabon, Dennis G. presented question case is com- The in this
2. % plex: and an a Wisconsin resident Is insured who is coverage in a motorist who has underinsured (which pay policy promises to issued Wisconsin injury legally bodily "damages entitled for an insured from owner driver of an underinsured to collect or vehicle") dam- motor entitled to recover noneconomic ages pain suffering insur- and from that Wisconsin for bodily injury arising company from auto- ance for Manitoba, Canada, that occurred mobile accident driver, when the insured and a Manitoba between recovery precludes noneconomic Manitoba question damages? no; answered the circuit court yes. appeals question We the court of answered the yes, question appeals answer the affirm the court although by path. we reach this result different summary granted judgment The circuit court Company, Farm Mutual Insurance to State Automobile declaring that Franklin and Thomas Ostlund Gillette V motorist were not entitled to underinsured coverage non- from Farm their claimed State because pain suffering рre- economic were Manitoba, law of cluded automobile Canada, the accident occurred.2 where
1 Gillette, App Farm Auto. Co. v. WI State Mut. Ins. 2001 561, 2d Wis. N.W.2d Ostlund The circuit court also declared that Gillette and coverage. were entitled uninsured motorist The court not appeals portion judgment. affirmed this of the circuit court's appeals portion ¶ 4. The court of reversed this *6 judgment, concluding the circuit court's that Gillette and Ostlund were entitled to underinsured motorist coverage According from State Farm. to the of court only appeals, requirements trigger two must be met to (1) negli- the underinsured motorist benefits: causal (2) gence part on the of an motorist, underinsured from that result the are accident not but by covered the at-fault motorist's insurance. Because parties agree requirements the that these two are met present appeals case, the the court of ruled that Gillette and Ostlund were entitled to the non- damages they sought economic from State Farm.3 The appeals trig- of court reasoned that these two factors gered coverage the Farm State underinsured motorist any independent recovery of of restrictions on imposed from the underinsured motorist that were jurisdiction the law of the in which the accident oc- appeals phrase curred.4 The court of concluded "legally preserve entitled to collect" did not for State rights Farm all of the Manitoba tortfeasor's or immu- nities.5 interpret phrase "legally
¶ 5. We entitled collect from the owner or of an driver underinsured motor vehicle" under Wisconsin contrаct choice of law interpretation phrase "legally The rules. entitled to variety an collect" from underinsured in a motorist arises including issues, statutes of limitations; parties portion The do not seek review this court of decision, and appeals' we not do address this issue. Gillette, State Farm Mut. Ins. Auto. Co. v. 2001 WI App 123, 30, 246 Wis. 2d N.W.2d 4Id. at 29-30. ¶¶ 5Id. at immunity liability, govern- such as from
tortfeasor's negligence; immunity; comparative limi- and a mental damages. type or Each issue the amount tation on analyzed separately determine whether must be company same as or treated the should be con- motorist. Different different than an underinsured presented may apply in a to each issue siderations particular case.6 analogize case to those Gillette Ostlund immune under
cases in the tortfeasor is from which immu They law as law of the state. characterize Manitoba damages. nizing liability for the tortfeasor from noneconomic damages in Manitoba does inability to recover noneconomic immunity stem, however, prevents from an enforce not *7 against action a tortfeasor. particular ment of a tort cause of damages Rather, noneconomic in Mani inability the to recover that that a tortfeasor is liable toba stems from the law provides damages damages. for We do address for but not other not some immunity may present immunity of because different issue relating case to present addressed in the considerations than damages. and cite numerous cases in which a tortfea-
Gillette Ostlund yet the holds insurance sor is immune from court See, damages e.g., Accident сompany liable for incurred. Gen. Klatt, 339, 341 Corp., Fire and Assurance Ltd. v. 460 N.E.2d Life (Ill. 1984) immunity in no bar to App. (interspousal Ct. Illinois Illinois); in recovering coverage under motorist Sum uninsured (Ohio 1984) Co., walt v. Allstate Ins. N.E.2d 545-46 in immunity recovering Ohio no bar to under (parent-child Ohio); coverage City Fire motorist in Torres v.Kansas uninsured (Okla. 1993) (workers' 407, 411 and Marine Ins. 849 P.2d recovering in compensation immunity Oklahoma no bar to under coverage by representative of dece personal uninsured motorist Oklahoma). killed by negligence coemployee/tortfeasor dent of standpoint from the of the Professor Widiss states that tortfeasor, by is no injured negligent there insured who inability damages meaningful between to recover difference only ¶ 6. We conclude that the reasonable inter- pretation purposes calculating for dam- ages present bodily "damages in the case is that for injury legally an insured is entitled to collect from the or owner driver of an underinsured motor vehicle" company compensate that an means insurance will bodily injury insured for insured actually incurs for which an underinsured motorist is applicable up liable to the insured under the law to the policy liability limits.
¶ 7. We further conclude that Wisconsin tort govern jurisdiction's choice of law rules which law legally determines the an insured is to entitled Applying collect from an underinsured motorist. Wis- present consin choice law rules case instructs us look law, to Wisconsin the law of the forum. significant Wisconsin has most contacts to the jurisdiction case. is the Wisconsin where the injured persons reside and where company was issued a Wisconsin insurance to Wis- Applying comports consin insureds. with public policy compensating Wisconsin's victims tortfeasors. Under Wisconsin law, Gillette and Ostlund legally are entitled collect noneconomic consequently, from accident, arise an automobile Gillette and Ostlund are entitled to collect *8 noneconomic from State Farm on the of basis coverage. the underinsured motorist because the tortfeasor is underinsured because or the tortfeasor contrast, is immune. In he that no to comments "there is reason recovery allow a of underinsured motorist insurance when an fully individual is Uninsured and Widiss, indemnified." 3 Alan I. (Rev. Underinsured Coverage 34.2, Motorist § at 154-55 2d ed. 2001). of caution, however, that neither the law 8. We place the the law of of accident is forum nor the the the every applicable fact or to rule situation of law choice "legally might regarding every arise the that issue jurisdiction language. The of one collect" law entitled to respect in invoked with to some issues could be jurisdiction law of and the another some fact situations respect and other fact situa- to other issues invoked tions. that the Farm further conclude State We requirement
policy is the satisfied, because exhaustion recovery damages from the amount of noneconomic motorist zero. Therefore Manitoba underinsured injury liability bodily all case the limits the apply policies have for noneconomic been up. used (Part I)
¶ 10. first the relevant facts We shall state summary policy Farm and a and then forth the State set (Part II). parties' arguments We discuss the following necessary questions to resolve three that are jurisdiction's question presented: Which law of law (Part interpretation governs III)? "legally policy language is the entitled How an underinsured motorist to be inter- collect" from (Part IV)? jurisdiction's governs preted Which are amount of Gillette Ostlund (Part collect from an underinsured motorist entitled to V)? Finally, we consider the effect of the exhaus- provision precludes payment of underin- tion the limits of of all motorist benefits until sured bodily injury policies up by payment, have been used (Part VI). judgments, or settlements *9 ¶ 11. The relevant facts case are undisputed. Ostlund, resident, V. Thomas a Wisconsin driving pickup was his Manitoba, mother's truck in Canada, on October 1995. Franklin a Gillette was passenger pickup in the truck. stopped, pickup 12. While truck was struck
by by another truck driven Unrau, Norman a resident parties agree The Unrau, Manitoba. that the under- negligent motorist, insured was and that the accident injuries physical caused to both Gillette and Ostlund. registered ¶ 13. Unrau's vehicle was in Manitoba by Corpo- and insured the Manitoba Public Insurance (MPIC) required by parties ration as The Manitoba law. agree governing that Manitoba law motor vehicle acci- dents between a Manitoba insured and non-Manitoba provides liability coverage pays claimant at-fault that compensable including damages, care, medical income replacement, permanent impairment damages.7 permit recovery MPIC not, however, does of non- sought economic from the driver that are now by Gillette and Ostlund from State Farm.8
¶ 14. At the of the accident, time State Farm pickup insured the truck Ostlund, driven but the policy on did underinsured this truck not include mo- coverage. had, however, torist Ostlund two Farm State policies in force motor on vehicles he but owned 7 The parties refer the court Manitoba Public Insurance (1987) (Can.). Corporation Act ch. L.R.M. P215 parties refer court to Manitoba Public Insurance (1987) (Can.) Corporation P215, Act § L.R.M. ch. (compen sation under this rights act stands in lieu of all and remedies arising bodily injuries out of which this act and no applies court). respect may action any be admitted before *10 Each included in the accident. policy were not involved coverage with underinsured motorist identical accident limits of $300,000 $100,000 per and per person liability.9 court's decision to time of the circuit 15. At the summary judgment, motion for State Farm's
grant and his health subrogated had Ostlund paid MPIC not $26,833.51. yet paid carrier MPIC had Gillette for his filed claim. Farm in the State key policy 16. The language for "damages Farm will pay
in State provides issue an insured is entitled collect injury legally bodily of an underinsured motor from the owner or driver An motor vehicle" is defined vehicle."10 "underinsured of which is as a motor vehicle the use insured the policy are liability for and whose limits bodily injury liability or have the amount of the insured's less than to other than the insured to by payments been reduced The damages. of the insured's less than the amount is also that the most State Farm will provides pay policy (1) the difference between the amount the lesser injury for and the amount bodily the insured's for is or by person may to the insured or who paid (2) or bodily injury, be liable for legally held in the The liability policy. policy pro- limits set forth and the insured must company vides that the insurance 632.32(4m) (1999-2000) requires § in Stat. availability of сompany notify an insured of the surance coverage requires limits of underinsured motorist $100,000 $50,000 per per person accident. at least agree qualify and Ostlund as parties that Gillette policies. "insureds" under the State Farm agree whether the insured entitled to collect damages from the driver of an underinsured motor vehicle and if so in what amount. The inis effect in the United States and Canada.
¶ 17. The State Farm underinsured motor vehicle part states relevant as follows: We will pay damages bodily injury an insured is legally entitled to collect from the owner or driver of an underinsured motor bodily injury vehicle. The must be caused arising accident out operation, maintenance or use of an underinsured motor ve- hicle.
THERE IS NO COVERAGE UNTIL THE LIMITS OF LIABILITY OF ALL BODILY INJURY LIABILITY BONDS AND POLICIES THAT APPLY HAVE BEEN USED UP BY PAYMENT OF JUDGMENTS OR SETTLEMENTS. —
Underinsured motor vehicle means a land motor vehicle:
1. ownership, the maintenance or use of
which is insured or bodily bonded for injury liability at the time of the acci- dent; and
2. liability whose limits of bodily injury for
liability:
a. are less than the amount of the damages;
insured's or b. have been reduced by payments to
persons other than the insured to less than amount damages. insured's Liability Limits of
Coverage W The be the of: pay most we will lesser between the amount of
a. difference bodily
the insured's injury, paid and the amount to the any by person or for or insured organization or held may who is be injury, legally bodily liable for the or
b. limits of this cover- age.
(Emphasis original.) Farm State poses following two to be decided underinsured motor questions vehicle cases: questions agreement be decided between
Two must the insured and us:
1. Is insured entitled to collect damages from the owner or driver of the vehicle or uninsured motor underin- vehicle-, sured motor *12 so, If amount? what (Emphasis original.) arguments 19. We summarize the of each party follows:
as First, Farm's that position State asserts "le- entitled to from an gally collect" underinsured motorist that an tort cause action against means insured's proper underinsured motorist is the measure of dam- ages against State Farm under the underinsured mo- coverage. According torist Farm, State an insured against must have a viable tort claim an underinsured jurisdiction governing motorist under the law of the tort liability. recognizes, State Farm however, that at least against one bar to a cause of action an underinsured namely, motorist, the tort limitations, statute of does not recovering bar an insured from from State Farm under coverage.11 the underinsured motorist (1) argues 21. State Farm in effect policy expressly incorporates by reference the applicable determining substantive tort what damages legally an insured is entitled to collect from an (2) damages motorist; underinsured an insured is governed entitled to collect in the case are jurisdiction of Manitoba, laws where the place accident took and the residence of the underin- (3) damages motorist; sured under Manitoba law the bodily injury an insured is entitled to collect from the motorist do not include noneconomic such as (4) pain suffering; because Gillette and Ostlund legal have no pensation entitlement under Manitoba law to com-
for noneconomic from motorist, they cannot recover noneconomic from State coverage Farm under the underinsured motorist policy. State Farm position
¶ 22. Gillette's and Ostlund's
can be sum-
argue
marized as follows: Gillette and Ostlund
"legally entitled to
from
collect"
an underinsured motor-
prove only
negli-
ist means that an insured need
causal
gence
part
on the
of the underinsured motorist and that
11 See, e.g.,
Surety
Western Cas. &
45 Wis. 2d
Sahloff v.
(1969).
60, 69,
plies dispute, to a look to contractual we Wisconsin disputes, contract choice of law rules. In contractual apply "grouping Wisconsin courts the of contacts" rights rule,14that is, that contract must be "determined by [jurisdiction] the law of the with which the contract significant relationship."15 its has most policy present ¶ 27. The in insurance case was Farm, in between issued Wisconsin State insurance company doing Wisconsin, a Ostlund, business policy registered Wisconsin resident. covers cars policy Wisconsin. Wisconsin is the state which the with significant relationship. law, its most has governs interpretation therefore, the insurance policy in the case.
12
Co.,
Taylor Greatway
v.
Ins.
93,
9,
2001
245
2d
WI
Wis.
134,
Co., 307, 294, 217 Wis. 2d 576 46 arises N.W.2d alleged from breach of underinsured policy motorist insurance although claim not have fruition would come to without out-of-state). injury 14 Mid-Century Haines v. Ins. 442, 449, Wis. 2d 47 177 (1970). 328 N.W.2d 15 Cleveland, 267, American Std. Ins. Co. v. Wis. 2d (Ct. 1985). N.W.2d App. law, of an insur- 28. Under Wisconsin the words ordinary policy given mean- are their common ance interpreted ing.16 policy An as a reasonable insurance is position ordinary intelligence person of an in the suscep- a it.17When insured would understand interpretation reasonable one tible more than person ordinary position intelligence of an in the interpreted insured, must be insurance against company, the drafter coverage document, insured.18 and in favor
IV *15 policy language ¶ 29. next how the Wе address injury "damages bodily for is entitled an insured collect from the owner or driver of underinsured to interpreted motor parties under Wisconsin law. vehicle" is disagree question. this Case law on the answer to analysis supports parties' interpretations,19 both but the unpersuasive. are in the cases limited and the cases 16 Co., Ins. Family Danbeck v. American Mut. 91, 2001 WI Farm Henderson v. State 10, 186, 150; 245 Wis. 2d 629 N.W.2d Co., (1973). Mut. Auto. Ins. 459, 451, 2d 208 423 59 Wis. N.W.2d 17 v. Ziegler, Maas 81-82, 70, 621 172 Wis. 2d 492 N.W.2d Love, (1992); Garriguenc v. 130, 134-35, 67 2d 226 N.W.2d Wis. (1975). 414 18 Co., Tempelis Aetna Cas. v. & Sur. 1, 10, 169 2d 485 Wis. Love, Garriguenc v. 130, 135, (1992); 226 N.W.2d 217 67 Wis. 2d (1975). 414 N.W.2d 19 Preston, See, e.g., United States Fid. & Guar. Co. v. 2000) 145, (setting forth (Ky. interpretations S.W.3d to policies using phrase "legally uninsured entitled motorist 1998) (Md. Ins. Co. v. Popa, West Am. recover"); 723 A.2d (setting forth motorist interpretations of an underinsured 30. State Farm reads the phrase "legally entitled to collect" from an underinsured motorist to require when an coverage only insured can prove each element of a tort claim against underinsured motorist.20 The insured's are, benefits under the policy to according Farm, State defined insured's claim against underinsured motorist. This interpretation not, does however, answer the fully question presented. 31. When an insured sues an com-
pany underinsured motorist coverage, contract law and tort law converge. Contract applies interpret the insurance but an policy, insured's right underin- sured motorist benefits on the hinges existence of a tort cause of action against the underinsured motorist. policy using the phrase "legally recover"); entitled to Vega v. (Ore. 1996) Farmers 95, 102, 103 Ins. 918 P.2d n.14 (setting forth interpretations of an motorist uninsured/underinsured recover"). statute using phrase "legally entitled to
The parties and the appear courts to treаt underinsured and uninsured interchangeably cases for purposes interpret- ing phrase "legally entitled to Widiss, recover." 3 Alan I. (Rev. Uninsured and Underinsured Motorist Coverage 147 2d 2001). Furthermore, ed. the cases do not seem to differentiate phrases "legally between the "legally entitled to recover" and entitled to collect." far,
Professor Widiss states that "[t]hus
there have been
*16
relatively few appellate
addressing
decisions
questions involv-
ing underinsured motorist insurance that have turned on the
meaning to be
"legally
accorded to the phrase
entitled to
Widiss,
3 Alan
recover."
I.
Uninsured and Underinsured Motor-
(Rev.
2001).
34.1,
§
ist Coverage
149 n.5
2d ed.
20
adopting
For cases
interpretation,
this
see cases cited in
Popa,
6-7;
723
Vega,
A.2d at
579 as the tort statute ¶ defenses, such 32. Some motorist to an underinsured are available limitations, company.21Differ- to an insurance are not available but apply of an underin- to the ent considerations liability of the and the tort law under motorist sured company law. under contract "legally phrase ¶ read the and Ostlund 33. Gillette more motorist an underinsured from entitled to collect" only prove broadly requiring the basic to an insured as damages.22 and is, fault claim, a tort elements of fully interpretation, answer the however, does not This question Legal principles presented fault define either. they apply principles damages, and when but which and apply open questions Gillette's Ostlund's under are example, interpretation. the effect unclear, for It is comparative interpretation of the state's under this rights negligence under the under- on an insured's coverage. motorist insured interpretations parties' different Thus the previ- noted this court has illustrate what coverage
ously,
motorist
is,
that underinsured
"legal iceberg,"
something
presents
an area of the
of a
infinitely complex
analyze,"
"an
to
law "nettlesome
area" of law.23
and troublesome
obligation
compensate an
Farm's
35. State
"damages."
compensate
obligation
In
is an
insured
21
Co.,
60,
2d
171
Cas. & Sur.
45 Wis.
v. Western
Sahloff
(1969).
914
N.W.2d
22
cited in
see cases
interpretation,
this
adopting
For cases
6;
n.10;
Vega,
A.2d at
918
Preston,
Popa, 723
French v. New Sch. (N.J. 1997)). *17 involving type policy, a case a different of insurance "damages" court concluded that the word means the compensation may that an insured recover in the courts through negligence the unlawful act of omission or phrase "damages bodily injury Thus, another.24 an insured is entitled to collect from the owner or driver of an underinsured motor vehicle" in the State policy might interpreted only Farm be to mean those may that an insured recover in the courts. analysis fully 36. This not, however, does an question presented. swer the As this court has ex plained, company pur an insurance not, does for all poses, stand the shoes of the tortfeasor in a lawsuit company between insurance and the insured. The company advantage cannot take of all the defenses available to an underinsured motorist. We clearly stated this rule in v. Western Cas. & Sur. Sahloff (1969), 60, 171 2dWis. N.W.2d914 an uninsured motorist case. against In Sahloff, insured filed a claim company
the insurance for uninsured motorist cover- age three-year well after the statute limitations on expired just tort actions had but before the statute of expire. limitations on the contract action was to Be- three-year cause the already expired, tort statute of limitations had company
the insurance contended that longer "legally the insured was no entitled to recover" from the uninsured motorist and therefore was unable company argued to recover from it.25The insurance Ins., Shorewood Sch. Dist. v. Wausau 2d 170 Wis. (1992) 368, 488 Dictionary Black's Law (citing N.W.2d 82 (6th ed.)).
25 Sahloff,
company's that tort and concluded suing an from not bar an insured should of limitations company cover- for the uninsured motorist insurance age. prevail According in a contract suit to Sahloff, company, against does not an insured an insurance against tortfeasor claim the tort need an enforceable of limitations. the tort statute under question whether ¶ addressed the 39. Sahloff of limitations that is of the statute affirmative defense to the insur- is also available to a tortfeasor available company. the elements of the not address It did ance although that the court stated action, of tort cause question "legally of deals with the to recover" entitled negligence motorist and of the uninsured "whether contributory negligence such as to allow concluded to recover."26 insured Sahloff against must of action the tortfeasor cause insured's need not also be the accident and at the time exist of against in- at the time the the tortfeasor enforceable company. Thus, has sues the insurance sured Sahloff application to the case. limited "legally phrase interpretation including variety issues, in a of to collect"arises entitled immunity from limitations; a tortfeasor's statutes immunity; comparative liability, governmental as such statutory negligence;27 on the amount and a limitation presented damages. conclude that each issue as We 26 Id. at 69. Id. at 69. particular analyzed separately case must be company
determine whether the insurance should be treated the same as or different than an underinsured may apply motorist. Different considerations to each issue.28 question 41. We now turn to discuss how the should be treated under the in the
present case. Arguments support have been made to
position "legally entitled to collect" from an under- imposed by insured motorist embraces limitations type law on the amount or recoverable from *19 Argu- the driver of the underinsured motor vehicle. support position ments have also been made to the that "legally entitled to collect" from an underinsured mo- company torist means an insurance should com- pensate damages up an insured for all incurred to the policy arguments supporting limits. The the former position persuasive. are more
¶ language 43. First, the contains no phrase "legally limits the ing only entitled to collect" to a show- damages.
of fault and Proof of fault and damages necessarily injured alone does not entitle an party damages Allowing to collect under tort law. an damages company insured to сollect from an insurance that an insured is not entitled to collect under tort law from an underinsured motorist seems to contravene the policy. company's words of the insurance If an liability was for for which an underinsured
28 relying In Sahloff, on the court appeals applied the considering case without whether the amount of dam Sahloff ages recoverable should differently be treated from the affirma tive defense of the tort statute of limitations.
583 law, the would under the was not liable motorist injury bodily "damages simply an insured has read incurred." liability limiting Farm's to Second, State an underinsured motorist for which
amount of comport to with to the insured seems is liable purpose coverage. We have motorist of underinsured purpose motorist cov- of underinsured that the stated erage position "solely put in the to the insured same occupied [the insured] had the tortfeasor's would have liability the underinsured the same as limits been purchased Under this limits insured."29 motorist coverage, the limits on underinsured motorist view of type recoverable from or amount recovery apply from motorist should underinsured company. an insurance have, however, also stated 45. Wisconsin courts coverage purpose in a of underinsured motorist way. purpose of stated that
different
We have
coverage
compensate the
is "to
underinsured motorist
negligence where
an underinsured motorist's
victim of
fully
adequate
party's
limits are not
the third
injuries."30
compensate
her
Justice
the victim for his or
v. West Bend Mut. Ins.
Rosenberg
Dowhower ex rel.
See
18,
113,
(citing
2d
N.W.2d
2000 WI
Wis.
*20
57.01,
Schermer,
p.
§
Liability
Automobile
Insurance
3 Irvin E.
1995)).
(3d
57-2
ed.
30
Ins.,
639,
148
2d
Family
v. American
Mut.
Wis.
See Wood
(1989),
grounds, Mat
654,
594
overruled on other
436 N.W.2d
Co.,
192,
729
Cas.
193 Wis. 2d
532 N.W.2d
thiesen v. Continental
(1995).
Co.,
93,
Taylor
Greatway Ins.
2001 WI
See also
v.
(the
32-33,
134,
purpose
916
of
245 Wis. 2d
628 N.W.2d
¶¶
compensate
insurance is to
the victim
underinsured motorist
negligence
party's
when the third
an underinsured motorist's
fully the dam-
liability
adequate
compensate
limits are not
to
584
Bradley
Ann Walsh
concluded that "reasonable insureds
victim)
ages
J.,
(Bradley,
dissenting); Matthiesen v.
Co.,
192, 204,
Continental Cas.
193 Wis. 2d
motorist
Hanson,
motorist));
inadequately insured
Krech v.
164 Wis. 2d
(Ct.
1991) (underinsured
n.2,
App.
believe liability- driver's an at-fault coverage when provides for the insured's fully compensate cannot insurance mo- of underinsured Stating purpose damages."31 an insured way emphasizes in this coverage torist to the incurred damages up for all is seeking protection the insured of whether limits, regardless liability policy full amount to collect entitled legally motorist. from the underinsured damages and Ostlund are case, Gillette In the present 46. ¶ liability adequacy about not complaining contrary, On the the underinsured motorist. coverage the amount limiting is with the complaint their the underinsured motorist. recoverable from damages coverage motorist has fact, In underinsured an cases: to put described our both purposes motorist and to of an underinsured in the shoes company incurred up an for fully insured compensate a need not necessar- limits. But policy the policy For to fulfill both these coverage purposes. ily provide a want to authoriz- might buy insureds example, incurred, all but State for ing compensation think the kind of We do not policy. Farm need not sell this can be read to reasonably in the case incurred. for all coverage рrovide fac- to all these 48. After consideration giving in the person conclude that reasonable tors, we "damages not understand of the insured would position entitled to collect an insured is bodily injury for of an underinsured motor owner or driver from the will com- company mean that an insurance vehicle" to injury bodily insured for damages pensate Taylor, 2000 WI *22 actually up liability the insured incurs to the limits of policy though even the insured's the underinsured for motorist is not liable the full amount applicable only the under law. We also conclude that the interpretation "damages bodily reasonable is that for injury an insured is entitled collect from to the or driver of an owner underinsured motor vehicle" present company in means the case that an insurance compensate bodily injury will an insured for for actually up that the insured incurs to the amount of damages for which a driver of an underinsured motor applicable up vehicle is liable the under law to the policy's limits.
V ap- 49. We have determined that law Wisconsin plies interpret present in the insurance the case. We next determine whether under Wisconsin law the insured is entitled recover noneconomic suffering pain bodily arising injury and for from an Manitoba, automobile accident occurred in Canada, and driver, between the insured a when Mani- Manitoba precludes recovery law toba the dam- noneconomic question, ages. apply To answer this we must all of including law, Wisconsin Wisconsin tort choice of law rules. choice of law is outcome in determinative present case.
¶ 50. Wisconsin has abandoned tort сhoice of jurisdiction rule that where accident oc- governs against Although curred an action a tortfeasor. presumption favoring a weak remains, forum law adopted methodology have we a more flexible based on analysis or more qualitative that one of the contacts jurisdictions the facts.32 have with choice of law The first rule Wisconsin presumptively the forum should "that the law of rules is apply that nonforum contacts clear unless it becomes greater significance."33 are of present case, both Wisconsin In and Ostlund are notable. Gillette contacts are Manitoba driving registered in a car Wiscon- residents Wisconsin by issued Wis- an insurance and insured sin governed But the accident law. consin in Manitoba. The driver case occurred in the *23 driving registered in a car resident was a Manitoba Although Manitoba law. and insured under Manitoba significant jurisdiction contacts has numerous and each greater are not of tort, Manitoba contacts with the significance, contacts. It is however, than Wisconsin greater contacts are of clear that the nonforum not significance. following has set forth the five 53. The court and we shall law, influence the choice of
factors that in consider each turn:
(1)
results;
Predictability
of
(2)
order;
Maintenance
of interstate
international
(3)
task;
judicial
Simplification
of the
32
Horner,
Conklin v.
468, 473,
2d
ests; and
(5) Application of the better
rule of law.34
predictability
factor,
54. The first
results,
parties' expectations.35
question
deals with the
The
legal consequence
here is what
of the
accident
Manitoba
comports
predictions
expectations
with
or
of the
parties?
present
dispute
The
case involves a
between
Wisconsin residents and a Wisconsin insurance com-
pany
policy
about a
issued in Wisconsin. It is reasonable
parties
to assume that the
involved in the insurance
expected
ap-
transaction
plicable
that Wisconsin law would be
policy.36Applying
to claims under the
Wiscon-
type
sin law to the
recoverable
promotes uniformity
interpretation
case
policy regardless
jurisdiction
an insurance
injury
parties
which the
occurs. The
will know at the
time a
is issued what benefits are
The
available.
jurisdictions relating
laws of other
on
limitations
rights
would not define the
of an insured who
purchased
an underinsured motorist
in this
points
applying
state.
first factor
Wisconsin law.
factor,
55. The second
maintenance of interstate
*24
requires
jurisdiction
order,
and international
that the
minimally
jurisdiction
is
concerned defer to the
34Hunker,
36"It is reasonable to assume [in automobile collision occurring in Wisconsin] that parties [Ohio] involved in the insurance expected [in Ohio] transaction that Ohio law would applicable be to automobile accident claims arose under the Hunker, policy." 2d at 57 Wis. substantially the facts of this Under concerned.37
that is minimally is and Wisconsin concerned case, Manitoba is substantially concerned. merely passing were and Ostlund 56. Gillette
through of the accident was Manitoba, and the location in happenstance. not involved The Manitoba driver is policy presently dispute that is the insurance about this court. before public in the is not involved Manitoba public
present dispute. has been of Manitoba determining by protected the Manitoba driver's according to Manitoba law. to the insured compensates and Ostlund Farm Gillette Whether State driving change will not for their noneconomic prime highways, interest on Manitoba's behavior application in of Manitoba law Moreover, the Manitoba. effect on the administrative case has no litigation judicial accident Manitoba. costs of auto applying law to bar interest its Manitoba has no against Farm to action State and Ostlund's Gillette's generally compensation. additional Manitoba recover are how nonresidents Manitoba not concerned with policies compensated that were their own insurance in the United States. issued hand, is substan- the other Wisconsin 58. On significant tially most concerned. has the parties, relationship are resi- who Wisconsin policy, in Wis- which was written dents; compensa- presented case, in this consin; and the issue no on residents. We see burden tion for Wisconsin Id. at 601. *25 of international movement as the result the choice of points law.38The second factor to Wisconsin Wisconsin law.39 simplification
¶ 59. The third factor is judicial principle task, a in choice of law that states a "simple easily applied proce- rule of or substantive preferred."40 law is to dural easily be A court can Wisconsin simply apply Manitoba law determine present in the case. law Manitoba dоes not complicate judges. of the task Wisconsin Manitoba law simply proceedings bars further on noneconomic dam- ages. easily apply
¶ 60. Wisconsin courts can also
Wis-
damages.
recognize,
law to
consin
determine
We
how-
applied
ever, that if
tort
Wisconsin
law were
deter-
mine
anew
amount
that the insured is
legally entitled
from
to collect
the Manitoba driver for
purposes
collecting
company,
from the insurance
already
after
have
been established under
litigation
apply
If
law,
Manitoba
would increase. we
case,
law in the
an
underinsured
would
motorist
be determined under one
system
company's liability
law and
38
Horner,
481,
468,
Conklin v.
38 Wis. 2d
would be points applying simplicity Mani- either of The factor "simplicity may well be Because law. toba or Wisconsin outweighed will examine considerations,"42we other other considerations. of the advancement factor is 61. The fourth strong governmental ahas interests. Wisconsin
forum's compensating who are victims its residents interest in of torts. litigation, private question such as in "The proposed case, is whether the
in an automobile-accident comports standards of fairness with the nonforum rule policies justice are in the embodied and application appears of forum that the If it forum law. governmental interest of the advance the law will major, though a not state, fact becomes forum this determining, of in the choice factor ultimate itself a law."43 "justice- argue that a and Ostlund Gillette jurisdiction"44
seeking should allow them like Wisconsin suffering. damages pain compensated for and for to be recovery Although for medical law allows Manitoba provide earnings, expenses not for an it does and loss recognized damages law.A Wisconsin well element damages type an insured or in the amount difference and in Manitoba when recover in Wisconsin can injury negligence not in Manitoba does and occurred justice, public necessarily or fairness, Wisconsin violate legislature policy. has itself fact, In the Wisconsin 93-2614,1993 Ins. No. WL Zenker v.Allstate 1993). (E.D. July 30, at *6 n.3 Pa.
42Heath, 35 2d at 597. Wis. 43Id. at 598.
44Hunker, 2d at 605. 57 Wis. damages pain suffering limited in some cases. legislature totally But the Wisconsin has not barred damages.45 barring such Thus, the Manitoba statute pain suffering adopts concept for all a foreign to Wisconsin law. negligence
¶ 64. We are mindful that Wisconsin only compensatory aspect, law admonitory has not but also aspect. Applying
and deterrent Wisconsin law of in the case would not deter driving highways. unsafe on Wisconsin or Manitoba Although purpose deterrent tort law46 not by applying furthered law of *27 present compensatory purpose case, the the of tort law by applying damages. is furthered the Wisconsin of law Considering ¶ issues, 65. all these we cannot con- legitimate clude that Manitoba is bad law, law serves no purpose, and must do, be circumvented. We can and limiting however, conclude that and Gillette's Ostlund's recovery damages to than less the recoverable under significant Wisconsin tort law undermines Wisconsin's fully ordinary compensating interests negligence.47 victims of points applying
The fourth factor to Wis- consin law. application
¶ 66. The fifth and final
is
factor
the
say
of the better
rule
law. We cannot
that Manitoba
law is anachronistic or fails to
trends,
reflect modern
as
discussing
we have said in other
a
cases
better rule
45See,
893.55(4)
(1999-2000)
e.g.,
(limiting
§
Wis. Stat.
claims).
total
malpractice
noneconomic
for medical
46Hunker,
Conklin,
603-04;
593 arguable law that the Manitoba While it is law.48 may barring not be a Wisconsin noneconomic "justice-serving on law founded rule,"49the Manitoba is purpose. a rational and serves discernible basis primary Considering
¶
choice of law rule
presumptively apply
the law of the forum should
"that
are of
it
clear that nonforum contacts
unless
becomes
considering
present
greater significance,"50
(as compared
significant
to Wisconsin
contacts
case's
choice-influencing
Manitoba),
considering the five
tort
considerations, we conclude
Wisconsin
applies in the
case.51
ap-
tort law
68. Our conclusion
type
plies
and amount of
to determine the
company
may
collect from the insurance
insured
jurisdictions.
supported
in other
cases
rely
on
and Ostlund
four cases that
69. Gillette
support
reach:
Indem. Co.
conclusion we
Travelers
(Del. 1991);
O'Connor,
Lake,
v.
an insured is entitled collect *28 48See, Hunker, 2d at e.g., 57 Wis. 606-07.
49Id. at 605.
50
Wilcox,
634,
617,
(quoting
Id.
v.
26 Wis. 2d
at 599
Wilcox
(1965)).
N.W.2d 408
133
51
deciding
refrained from
expressly
The
court
Sahloff
contributory
jurisdiction's
the effect of
which
law determines
recovery
against
an insurance
negligence on the
the insured
coverage.
v.
company
uninsured motorist
Western
under
Sahloff
(1969).
60, 69,
&
45
2d
tort law of the forum the facts of these cases precisely present are not the those in the same as case. The factual differences between these cases and the present opinion, sufficiently in not, case are our differ- justify present ent different in result case. example, Travelers, 72. For in the insured was injured in a motor vehicle in Quebec, Canada, accident when unidentified truck caused the insured's vehicle highway to crash into a barrier. insured would have applied $30,000 recovered than if the Quebec less court up law, tort whereas he could recover to $300,000 under Delaware tort law.52 The insured sued in Travelers Delaware to obtain the uninsured motorist benefits policy. company his The insurance and the insured arguments made similar to those made case. signifi-
¶ 73. The Delaware court used the most relationship cant pret contract choice of law rules to inter- significant relationship and the most "legally to determine rules the insured was entitled to recover" from the driver.
¶ 74. The Delaware сourt concluded Dela- significant relationship had ware the most event because the Delaware, insured was a resident of company conducted substantial business compelling public policy Delaware, of Quebec no issue Lake, (Del. 1991). Travelers Indem. Co. v. 594 A.2d *29 only Quebec with was involved, and the contact was happened the insured there between the accident that agree the Delaware with and an unknown motorist. We relationship significant that "the court's observation foreign require disregard a does not court test flexibility jurisdiction's in this law all torts cases. requires on its own that each case be decided doctrine facts."53 Although the in Travelers and the insured injured present were in a motor in the case
insured
traveling
province,
in a Canadian
accident while
vehicle
present
Travelers,
case, unlike
an identi-
the
involves
Consequently,
in
it is
fied Manitoba motorist Manitoba.
only
in
known tie
that, when
Travelers the
reasonable
Quebec,
occurred in
Quebec was that the accident
tort law
court concluded
Delaware
the Travelers
governed
insured
entitled
the
was
identity of
case,
In the
to collect.
not,
is a tie to Manitoba
does
we
Manitoba driver
but
justify
conclude,
a different choice
law.
(Conn.
O'Connor,
v.
1986), White, Miller v. 702 A.2d (N.Y. 1985), support Hanmer, 109 A.2d Thomas v. govern tort should our conclusion Each of these cases to be recovered. Quebec, Canada, involved an accident a lawsuit in a state court. passengers cases, In the first two sued traveling. they In of the car which were
the driver injured passengers and the drivers were each case registered state, the vehicle was residents the forum 53 Id. at 48. *30 state,
in that and the insurance was in issued passengers' that The in state. lawsuits were filed the respective home states. In the case, Que- 78. third two cars collided in only.
bec. Both cars were in Canada for a short time The brought lawsuit was in New York where the both plaintiffs and defendants were domiciled and where registered both were cars and insured. ap- In each of these three cases the court
plied the law of the forum state as its choice of tort law injured party pain to the allow to recover for and suffering company. from the insurance The law of Quebec, occurred, the where accident did not such allow recovery. Each court decided that the of under facts superior applying case, the forum state a had interest in applying its tort law rather than Quebec. the law of The superior granting forum full, fair, state's interest was in adequate compensation and to a of the forum, resident maintaining and Quebec's interest low insurance premiums litigation reducing impaired by and was not application agree of the forum's law. We with this reasoning apply legal principles the same in the present case. jurisdictions
¶ 80. Cases from other have, how- applied place ever, the tort law of the of the accident to type damages determine the amount recover- example, able. For Farm State Mut. Auto. Ins. Co. v. (E.D. 1991), Supp. Krewson, 764 F. Pa. Pennsylvania Cayman resident was killed in the Islands in an automobile with an accident underinsured motor- Pennsylvania earnings ist. law, Under loss future Cayman recoverable; was law, under it not Islands was argued recoverable. decedent's estate Pennsylvania measure of controlled because significant
Pennsylvania in the more interest had a Cayman dispute than did the Islands. insurance Looking purpose at the of underinsured coverage, Pennsylvania held court that the motorist coverage obligating the insur- underinsured motorist company pay for insured ance "legally or from the owner driver entitled to collect obligate the . vehicle" did not an . . underinsured motor compensate company for loss Cayman earnings because future permit accident occurred did not Islands where the recovery damages.54 of such
54
see,
reasoning,
Farm
following
e.g.,
cases
this
State
For
Crockett,
652,
Ins.
103 Cal.
3d
652-53
App.
Mut. Auto.
Co. v.
(Cal.
(California
1980)
injured in Hawaii
App.
resident
Ct.
law;
recovery
no-fault
allowed
than California
where
less
coverage policy
in and
uninsured
was
insured resided
California;
not
in
insured could
recover under
issued
damages
law); Crossley
under Hawaii
because could not recover
(Neb.
Co.,
383,
v.
Ins.
251 N.W.2d
384-85
Employers
Pacific
(insured
1977)
Nebraska,
of
with uninsured motorist
resident
coverage
coverage, could
recover under uninsured motorist
not
to
legally responsible
pay
was not
dam
because
tortfeasor
injured
being
in
ages under Colorado law after
Colorado
Nebraska);
recovery
law allowed less
than
Colorado no-fault
(N.J.
Marchetta,
1298,
Mgmt.
656
Claim
v.
A.2d
Hertz
1995) (New
"legally
Super.
Jersey
Ct.
resident
entitled
or operator
from the owner
of an...
underinsured
recover
application Virginia
substantive law
requires
motor vehicle"
Virginia;
after killed in a
accident in
driver
one-car automobile
resident;
Virginia
registered
Jersey
car
in New
was a
was
Jersey;
in
coverage
underinsured motorist
was issued
New
Virginia wrongful
permits
compensation
death statute
more
Columbus,
law);
v.
Ins.
Jersey
than the New
Kurent Farmers
(Ohio 1991) (insured's
Inc.,
recovery
N.E.2d
coverage
under
vehicle
noneconomic
uninsured motor
Michigan
"legally
denied as not
entitled to collect" because
82. Williams v. State Farm Mut. Auto. Ins.
(Conn. 1994),
supports
not Any to have attached the that would benefits.55 have under New motorist would attached underinsured York law.56 appli- Thus, concluded that the Williams recovery proscribed law, for York tort which New
cable precluded Connecticut in- claimed, the the recovering underinsured motorist benefits sured from company. from the Connecticut agreement are in 86. These cases substantial They analysis support have used. our the we with bodily injury phrase "damages interpretation for to collect from the owner an insured is entitled requiring motor or driver an underinsured vehicle" as of of in which the under the contract law the state to be the issued an underinsured motorist liable was appli- law allowed under the tort amount In choice of law rules. these cable under forum's balancing cases, however, in the factors to determine applied law forum the tort law the the choice of place of the accident.
¶ neither law the forum We caution that place accident is the tort choice nor the law of every every applicable to fact or to of law rule situation might regarding policy language arise issue that "legally entitled collect" from an underinsured mo- jurisdiction A of one be invoked with torist. could respect to and in some fact situations and some issues jurisdiction respect the law of another invoked in v. State Farm Mut. Auto. Ins. Williams 641 A.2d (Conn. 1994). 56 Id. at 788.
other issues and other fact situations.57 This court has long recognized that "it is not in each necessary case the law of apply only single a state to all [a] phases lawsuit."58
VI 88. We next consider whether this action is precluded Farm by the State policy exhaustion provi- sion that precludes payment underinsured mo- torist until benefits the limits of of all liability bodily policies that have injury apply been used by payment up of judgments or settlements. 89. The State states, Farm policy relevant "THERE IS
part, NO THE LIM- COVERAGE UNTIL LIABILITY ITS OF OF ALL BODILY INJURY LIABIL- ITY BONDS AND THAT APPLY POLICIES HAVE BEEN USED UP BY OF PAYMENT OR JUDGMENTS SETTLEMENTS." It is undisputed that the Manitoba driver's
liability policy has not been is, exhausted —that "used up." Gillette has received no payments from Mani- toba driver's liability whatsoever. has Ostlund payments only received to a amounting fraction of coverage available to him under the Manitoba driver's In addition, is policy. there no evidence of settlement or judgment having been entered exhaust limits the Manitoba driver's insurance coverage.
57
Royal
588,
n.1,
Hunker v.
Indem.
57 Wis. 2d
603
204
(1973).
(Second)
N.W.2d 897
See also Restatement
of Conflict of
(1971) (choice
§
Laws
law evaluated with respect
issue).
to the particular
Wilcox,
617, 631,
v.
Wis.
Wilcox
2d
¶ that absent a settlement Farm 91. State judgment payment, payment can be no there aor liability insurance. Manitoba driver's exhaustion of the position, support v. Farm rеlies on Danbeck State To its 2d 245 Wis. Ins. WI Fam. Mut. American whether 150, which addressed 186, 629 N.W.2d pay obligated to carrier was motorist underinsured after the to an insured motorist benefits underinsured motorist's liabil an underinsured insured settled with policy ity limits. insurer's full for less than that insurer exhausting required limits of the the full Danbeck liability policy the un- before underinsured motorist's pay obligated under- carrier was derinsured motorist Danbeck con benefits to the insured. insured motorist precluded policy language exhaustion cluded that plus by way credit." of "settlement support not conclude that Danbeck does 92. We present position in the case. Neither Farm's State liability portion nor Ostlund has settled Gillette of the underin- their for less than the amount claims policy raises limits. The case sured motorist's requirement question of the exhaustion effect policy on recov- Farm's underinsured motorist State ery damages from State of noneconomic governing Farm when the tortfeasor's Manitoba law recovery damages. no for noneconomic allows analysis, applying Nevertheless, Danbeck's we that the Manitoba driver's limits liabil- conclude liability coverage ity, avail- is, the total amount damages, The are zero. term able for noneconomic policy in the means consume com- "exhaust" as used pletely. liability coverage amount of available The total under for noneco- to the Manitoba driver his totally trigger damages The nomic has been consumed. "by judge- payment of under the Farm State phrase application or ments settlements." This has no parties agree any judgment case; this both or settlemеnt would award zero dollars for noneconomic damages. Here, Gillette and Ostlund are not entitled
to noneconomic
from the underinsured motor-
any
ist. Gillette and
are
Ostlund
not entitled to collect
further
for noneconomic
from the
applicable
underinsured motorist under
Manitoba law.
appeals
any
held,
court of
without citation to
precedent for its conclusion, that
re-
exhaustion
*35
quirement found in the State Farm underinsured mo-
policy
applicable
present
torist
was not
in the
case
requirement
because the exhaustion
was unrelated to
recovery
Manitoba's law that
the
bars
of noneconomic
arising
damages
from automobile accidents.59
agree
appeals.
¶ 95. We
with the court of
We
policy
require-
conclude that the State Farm
exhaustion
recovery
satisfied,
ment is
the amount
for
because
of
noneconomic
from the Manitoba underin-
present
sured
Therefore,
motorist
zero.
case,
bodily injury policies
the limits of
all
of
apply
up."
for noneconomic
have been "used
59
Gillette,
See State Farm Mut. Auto Ins. Co. v.
2001 WI
123,
32-33,
App
561,
2d
246
630
¶¶
Wis.
N.W.2d 527.
cited its Danbeck
v.
appeals
decision,
The court of
Danbeck
Co.,
Fam. Mut.
American
Ins.
10,
App 26,
2000
¶
WI
232 Wis.
(Ct.
417,
1999),
2d
App.
solely
N.W.2d 925
for the proposi
tion that
exhaustion provision was not
ambiguous.
its review of Danbeck
similarly
This court
held
provision
requiring
"by payment
judg
exhaustion
of
or
v.
ambiguous.
ments
settlements"
not
See Danbeck
was
Family
American
Mut.
Ins.
13,
WI
2d
¶
Wis.
186,
VII interpret phrase "le- summation, In we gally or driver of an to collect from the owner entitled contract under Wisconsin underinsured motor vehicle" of law. choice phrase "legally interpretation of the 97. The an from a driver of underinsured
entitled collect" variety including issues, in a vehicle arises motor immunity from limitations; a tortfeasor's statutes immunity; comparative liability, governmental as such type negligence; on the amount or limitation analyzed separately damages. Each issue must be company should be whether an insurance determine than an underinsured the same as or different treated may apply to each motorist. Different considerations issue. only reasonable inter- 98. We conclude that calculating purposes
pretation for dam- "damages bodily ages for in the case is that injury from an entitled to collect insured is or an motor vehicle" owner driver of underinsured company compensate means that an insurance will bodily injury that the insured for for insured actually underinsured motorist is incurs which an *36 up applicable to the insured under the law to the liable policy's liability limits. conclude tort 99. We further that Wisconsin govern jurisdiction's of law
choice law rules which damages legally an entitled to determines the insured is Applying from an underinsured motorist. Wis- collect present of rules in the case instructs consin choice law of law, us look to the law the forum. to Wisconsin significant to most contacts Wisconsin has the jurisdiction present where the case. Wisconsin is the 604 injured persons reside and where company was issued a Wisconsin insurance to Wis- Applying comports consin insureds. law with public policy compensating Wisconsin's of victims of law, tortfeasors. Under Wisconsin Gillette and Ostlund legally damages are entitled to cоllect noneconomic that consequently, arise accident, from automobile Gillette and Ostlund are entitled to collect noneconomic from State Farm on the basis of coverage. the underinsured motorist repeat ¶ 100. caution, however, We our nei- place forum ther the law of the nor the law of the applicable every is accident the choice of law rule to fact every might regarding or situation to issue that arise "legally language. entitled to of collect" one jurisdiction respect could be invoked with some and in issues some fact situations the law of jurisdiction respect another in invoked to other issues and other fact situations.60
¶ 101. We further conclude that the Farm State requirement satisfied, exhaustion because the recovery of amount noneconomic from Manitoba underinsured motorist is zero. Therefore in bodily injury the policies case all the limits of apply for noneconomic been have up. used
By appeals the Court.—The decision of the court is affirmed. (concurring part, WILCOX, E J. JON
dissenting part). majority's I concur with the reason- 60 Royal Hunker v. Indem. 588, n.1, 204 Wis. 2d (Second) (1973). See also Restatement N.W.2d 897 Conflict (choice (1971) Laws § respect of law is evaluated with issue). particular *37 ing I However, do not in I-IV and conclusions Parts analysis majority's agree in Part choice with the agree the I decision of court V, with the ultimate nor do appeals. I that under would find to affirm the court rules, Manitoba law should choice of law apply amount that Gillette Os- to determine the I to collect. therefore would be entitled tlund opinion the of the court. from dissent correctly majority ¶ 103. The states that Wiscon lex rule in favor of a the loci delicti sin has abandoned policies rule, the takes into account more flexible which jurisdictions involved in order to of the and interests jurisdiction significant the most determine the with parties. relationship to the and the Wilcox v. lawsuit (1966). Wilcox, 631, 133 617, 621, 26 2d N.W.2d408 Wis. significant agree I that would there are contacts also application support the of either Wisconsin or Manitoba majority disagree op. However, I at 52. with law. See majority's contacts, conclusion that the when adopted light guiding of the five factors we viewed Zellmer, 578, 595-96, v. Wis. 2d 151 N.W.2d Heath 35 (1967), 664 are insufficient to overcome the weak presumption apply. that the forum law should analysis,
¶ 104. In our choice of law we have traditionally majority started, notes, as the with the presumption the law of the forum state weak Zelinger applies. v. & Gravel 2d State Sand Wis. (1968); Wilcox, 106, Wis. 2d at 156 N.W.2d apply Heath, 2d then 634; 35 Wis. at We analysis" "interest contacts interested jurisdictions, place emphasis on where we less quantitative parties on contacts of the and focus place policies of the contacts to the relevance of wrong Zelinger, at If and the forum. 38 Wis. 2d jurisdiction analysis that the where this demonstrates *38 wrong place preferable juris- the took is to the forum law diction, the of the location of the tort will be applied. conducting analysis, guided In 105. this we are adopted Heath, the we factors Heath. Wis. 35 2d at (citing Choice-Influencing
596 Leflar, Robert Consider- Law, ations in 41 N.Y.U. L. Rev. Conflicts (1966)). (1) predictability These are: factors the of (2) results; the maintеnance of interstate and interna- (3) (4) judicial simplification order; tional task; of the governmental advancement of the interests; forum's (5) application the of better rule of Id. law. These vary according factors are considered each case precise to Here, the I issue involved. hold would that they lead the to conclusion that Manitoba law more appropriately applied to determine what Gillette and Ostlund were entitled to collect. regard predict- With factor, 106. to the first the
ability majority results, of the concludes that it is parties expected to that reasonable assume the that apply policy. Wisconsin law would Majority to claims under the majority op. argues ¶at The 54. this promotes uniformity interpretation conclusion of re- gardless injury where the occurs. Id. I not think do making assumption. there is a such basis "Predictability" ¶ 107. under this factor is not an pre-selection element of the controls choice law predictability Rather, in an accident. the must arise when all the relevant facts are made available and analyzed. analysis Heath, 2d at Wis. must certainty lead to a reasonable based on a rational analysis, opposed as certain but selec- irrational tion tort, Horner, of the v. site Conklin 38 Wis. 2d (1968), majority or as the
468, 479-80, 157 N.W.2d suggests site where the contract was case, in this made. lay driving person or A across state gives thought probably little border
international jurisdiction's be laws would reasonable which applied apply and the rule accident, to by in the event of an majority parties assume that would —that applies provide under contract —does assuming certainty, no more than some but is rational site the accident would that the law of apply. Although fortuitous *39 against the
a UIM claim is an action
60, 70,
contract,
Cas. & Sur.
45 Wis. 2d
W.
Sahloff v.
(1969),
underlying
the choice of the
N.W.2d
negligence
guaranteed.
law is
As we have stated
not
by
previously,
never,
can
"a tort which is not intended
subject
planning
the
with
definition, be
advance
particular
Conklin,
a
state's law."
38 Wis.
reference to
Although may
2d at
it
be reasonable
assume
478.
expected
parties
that the law of the state where
that the
equally
apply,
should
it is
the contract was made
resident who
to assume that Wisconsin
reasonable
Manitoba,
in a
drives in
and then is involved
collision
driving
involving a Manitoba resident who is
a vehicle
registered would
tort
licensed and
Manitoba
have
damages computed
Thus, I do not
under Manitoba law.
guided by
predictability,
factor,
as
this
is
think that
necessarily
by
application law.
fostered
Wisconsin
regard
factor,
to the
the main-
109. With
second
order,
ma-
tenance of interstate
international
jority
circumstances, Manitoba
notes that under these
substantially
minimally
concerned and Wisconsin is
Majority
majority points
op.
¶at
55. The
concerned.
happenstance
location
and that the
out that the
was
imposition
damages would not affect
of noneconomic
driving
administrative costs or
habits in Manitoba. Id.
light
¶¶at
56-57. In
of how we have treated this factor
previously, I think this elevation of the forum state's
regard
comity
concerns with
to international
comes
parochial.
across as somewhat
pointed
majority,
110. As
out
both Mani
toba and Wisconsin have real interests аt stake. Id. at
"minimally
However,
Manitoba is more than
majority suggests,
neg
concerned," as the
because the
ligent activity
question
here did occur on Manitoba's
highways, and involved a Manitoba resident. See Con
klin,
¶ 112. It is true that the Wisconsin court could competently apply both and law, Manitoba Wisconsin required interpret since Wisconsin courts often are to government. the law of other states and the federal applying However, majority Wisconsin will, law here as the require concedes, the Wisconsin court to cal- top liability culate the noneconomic on of the damages already calculated under Manitoba law. Fur- correctly points majority out, if Wisconsin
ther, as the liability applied of an case, the law is under one determined motorist would be underinsured straight system would be suit law, while a (citing system. Id. Zenker a different under determined 93-2614, A. 1993 WL CIV Ins. No. v. Allstate 1993)). (E.D. majority Although the Pa. 300132, *6 n.3 attempts factor, minimize of these results this both complex, litigation undoubtedly more make the would money time significantly the amount of increase judicial ultimately litigation, increase the spent on factor reasons, I find that this these would For burden. application clearly supports law. of Manitoba ¶ factor, the advancement The fourth admittedly governmental interests, one is forum's important. Conklin, 2d at 481. Wis. the most majority promotes the use of this factor
finds strong interest in has a law, since Wisconsin Wisconsin compensating torts, are victims of its residents who majority op. Manitoba statute at and that contrary barring is to Wisconsin noneconomic majority this policy. concludes that 63. The Id. at preference for law. a Wisconsin factor also shows Although agree has I that Wisconsin compensating I cannot conclude victims, tort necessarily by applying better served that the is law allows The fact that Manitoba law. Wisconsin recovery per not a se indication less, different, albeit goes or that it law is reasonable that the Manitoba less majority policies against public As the of Wisconsin. legislature recognizes, limited itself has the (citing Id. Wis. in some circumstances. tort 893.55(4) (1999-2000)). § law, Under Manitoba Stat. question be and Ostlund will that Gillette there is no expenses compensated and their lost medical for their *41 wages. compensation such, As the Wisconsin for tort victims will not be contravened. Finally, agree majority's I with the conclu-
sion that neither Wisconsin law nor Manitoba law is necessarily Majority op. a "better rule of law." аt majority points denying As the out, noneconomic dam- ages not anachronistic, is and is founded on a rational agree I that, most, basis. at this factor is inconclusive. reviewing ¶ 116. After factors, five I would analysis find that the choice of law demonstrates that properly applied my Manitoba law is in this case. In opinion, most of the choice of law factors are neutral at any preference best, and those that show for one jurisdiction judicial particularly over the other — economy application factor —tend to favor the of Mani- application Here, toba law. I think that the of Manitoba provide comport law would result, a consistent would public policies with the law, Wisconsin tort and most notably, promote judicial efficiency. would For that I reason, would hold that the which Gillette legally and Ostlund are entitled to collect for the purpose of their UIM should be measured law, Manitoba tort and I would reverse the decision of appeals. the court of foregoing
¶ 117. For the reasons, I dissent. (dissenting). CROOKS, 118. N. PATRICK J. I agree portions majority's opinion. with some I agree governs interpre- that Wisconsin contract law policy. agree tation of this I insurance also policy's provision, promising pay UIM "damages bodily injury an is insured entitled to collect from the owner or driver of underinsured reasonably interpreted vehicle," motor to mean "that company compensate an insurance will an insured for *42 actually bodily injury damages the insured up a driver for which the amount of incurs under the vehicle is liable motor of an underinsured Major- policy's up applicable limits." law to the ity op. ¶at 48. respectfully dissent, however, because
¶ I 119. interpret properly majority opinion fails to of the rest applicable policy I law. Farm under the State appeals of the court of the decision reverse would plain and, thus, under Wisconsin because language policy, law, law, not Wisconsin Manitoba of the and Os- of Gillette the amount determines legally collect from the underin- entitled to are tlund court I reverse the Furthermore, would motorist. sured appeals' American under Danbeck v. because decision Family 2d Co., 91, 245 Wis. 2001 WI Mutual Insurance policy Farm exhaustion 150, the State 186, 629 N.W.2d merely provision there is because not been satisfied has majority damages. recovery for non-economic no recovery the exhaus- satisfies a bar to claims that such requirement. tion plain language by interpreting
¶ First, 120. policy law, I conclude with Wisconsin consistent determining ignored in not be Manitoba law must are and Ostlund Gillette the amount It is motorist. collect from the underinsured entitled to majority agrees, Wisconsin, established well given are their of an insurance that the words ordinary meaning. Danbeck v. American common and Family ¶ 10, 245 Wis. 2d 91, 2001 WI Mut. Ins. majority op. It well 150; at is also 186, 629 N.W.2d interpreted contract is that an insurance established person position of the in the on what a reasonable based to mean. Mau v. understand the words insured would Fund, 134, 13, Reserve WI North Dakota Ins. majority op. 248 Wis. 2d 45; N.W.2d at Furthermore, insurance contracts should be inter preted applied "according unambiguous to their language." Family Powell, American Mut. Ins. Co. v. (Ct. 1992). App. Using 605, 608, Wis. 2d 486 N.W.2d537 interpretation, these Wisconsin canons of contract I appropriate language find it to look at the interpret meaning "legally entitled to collect from the owner or driver of an underinsured motor majority, ques vehicle." Unlike the I conclude that the jurisdiction's tion of which law determines what dam *43 ages "legally and Gillette Ostlund are entitled to collect" by interpreting is resolved itself, rather than resorting to choice of law considerations. majority opinion recognizes,
¶ 121. As the dam- ages bodily injury legally for an insured is entitled to requires damages compensable collect that the must be Majority op. under the law. However, at 43. majority opinion analysis then ends its effectively ignores phrase, itself and the rest of the "from the or owner driver of an underinsured motor Giving phrase ordinary vehicle." this its common and meaning, approach which is the that is consistent with requires law, Wisconsin the court to conclude that law, Manitoba not law, Wisconsin determines damages. for Here, the owner or driver of the underin-
sured motor vehicle is Norman Unrau. Under the facts case, of this and Gillette and claim Ostlund's for UIM coverage, policy essentially provides the insurance "damages bodily injury [Gillette are] for and Ostlund legally [Unrau]." only entitled to collect from question is how and where Gillette and Ostlund can legally bodily injury recover for from Unrau. issue, This is not a choice of rather a but determi- law, because with Wisconsin made consistent nation effectively only file suit could and Ostlund Gillette against consequently from recover Unrau, and could and Ostlund Manitoba law. Gillette Unrau, under bodily injury from for recover not law, because Gillette Os- Unrau under Wisconsin bring court. Unrau into Wisconsin not tlund could have resident, does not Unrau, a Manitoba hauled in order to be Wisconsin contacts with sufficient personal of the bases court. None into a Wisconsin § § jurisdiction 801.06, or 801.05 set forth in Wis. Stat. 801.04(2), present. §by required The accident are as Manitoba, in nor Wisconsin, but rather did occur not ever been to that Unrau has the record reflect does any It with Wisconsin. Wisconsin, or even had contacts unnecessary, inappropriate therefore, to even "legally are and Ostlund consider whether Gillette damages from Unrau under Wiscon collect" entitled to Geres, 197, 201-202, 2d See Burns v. Wis. sin law. 1987) (Ct. (stating App. that contacts 409 N.W.2d428 that to "are fortuitous and circumstantial so Wisconsin impose officious inter- law would constitute meddling"). and Os- words, because Gillette In other only legally necessary, collect could tlund, if a lawsuit is *44 damages by filing Manitoba, under Unrau suit from of law issue. The law, there is no choice Manitoba unambiguous language policy itself, of the insurance coupled case, circumstances of this with the facts and "legally question entitled to collect" of what answer means. plain language ignoring In addition to appears policy to be the itself, I note what By majority's opinion. consequence of the
inconsistent using liability State Farm's law to determine effectively majority opinion policy, the insurance on liability creates situation where the of the underin- system sured motorist would be determined under one company's law, law, Manitoba but the insurance system would be determined under another law, Wisconsin law. This result is inconsistent with the plain language policy, of the insurance and con- seems trary principles relating to common sense to insurance interpretation application. contract and Applying ¶ 125. law, Manitoba I would conclude that because Gillette and Ostlund are not entitled to they, collect non-economic cordingly, Unrau, from ac- are not entitled to collect those under the State Farm underinsured motorist provisions. I would, therefore, reverse the decision of appeals. the court of respectfully
¶ 126. I also dissent because I dis- agree majority's interpretation application with the appeals' I Danbeck. would reverse the court of deci- provi- sion, because the State Farm exhaustion merely sion has not been satisfied because there is no recovery for non-economic under Manitoba law. discussing Danbeck, 127. Before the merits of appeals'
however, I note court of decision in majority case, this on, which the relies was issued before this court issued the Danbeck decision. See majority op. appeals ¶at 94. The court of there- here, only appeals' fore, relied on the court of decision in App Danbeck, 417, 2000 WI 232 Wis. 2d 605 N.W.2d Although ultimately this court affirmed the court appeals' opinion decision, this court's further ex- plained relating clarified to the exhaustion opinion dispositive clause, and our here. majority opinion
¶ 128. The and the court of appeals' Danbeck, decision this case both fail to follow *45 specific meaning required give to the
and do not policy policy. language states, Farm in the State LIMITS OF THE COVERAGEUNTIL "THERE IS NO LIABILITY ALL BODILY INJURY LIABILITY OF BEEN THAT APPLY HAVE POLICIES BONDS AND OR OF JUDGMENTS BY PAYMENT USED UP added.) language (Emphasis This SETTLEMENTS." nearly lаnguage policy in Dan- of the to the identical policies require that the limits beck,because both "by judgements up payment or be exhausted/used Danbeck, 3. In this court 2001 WI settlements." important, of exhaustion was that the manner found plus constitute credit" did not because "settlement recognized Although "payment." we Id. at practical plus effect as "the same credit" has "settlement payment with limits, is not consistent of full it unambiguously plain language policy, which the requires judgements 'bypayment or settle- exhaustion plus ments,' credit.'" Id. not 'settlement up- Following reasoning, I the same would policy, language plain Farm of the State hold applicable coverage here, UIM is not conclude that liability policy "used limits have not been because the by payment judgements up for either or settlements" fact, In record reflects that or Ostlund. Gillette paid MPIC, Ostlund and his medi- insurer, Unrau's has providers subrogated health a total of cal insurer any payments to, made $26,833.51, and MPIC has not Furthermore, there has of, or for the benefit Gillette. payment judgments here no or settlements been recover and Ostlund will not be able to because Gillette any money from amount of for non-economic Unrau, Manitoba underinsured motorist. the so-called payment no whatsoever Because there has been possible payments are under the and further Gillette *46 Manitoba find for Ostlund Gillette, I it unreasonable, Danbeck, under to conclude that up by payment judgements limits have been "used or Applying Danbeck, settlements." I find a further reason appeals' to reverse the court of decision. respectfully
¶ 130. For these I reasons, dissent. ¶ 131. I am authorized to state that Justice joins DIANE S. SYKES this dissent.