Urhammer v. Olson

Citation39 Wis.2d 447,159 N.W.2d 688
PartiesJoAnn K. URHAMMER, Plaintiff-Respondent, v. Charles W. OLSON et al., Defendants-Appellants, Edward D. Urhammer, Jr., et al., Impleaded Defendants-Respondents.
Decision Date28 June 1968
CourtUnited States State Supreme Court of Wisconsin

Doar, Drill & Norman, New Richmond, for appellants.

Gwin, Fetzner & Richards, Hudson, for respondent State Farm Mut.; John W. Fetzner and C. A. Richards, Hudson, of counsel.

WILKIE, Justice.

Wisconsin law clearly governs the tort aspects of this controversy. 1 Olson and Heritage will be able to have a comparison of negligence with Urhammer and may seek contribution from him individually. The narrow issue presented on this appeal, therefore, becomes whether State Farm is entitled to assert the family-exclusion clause as a defense to liability under its insurance contract with Mr. Urhammer.

The liability insurance contract in question was written and delivered in Minnesota to Urhammer, a Minnesota resident. Appellants contend that we should apply Wisconsin law to Urhammer's contract and invalidate the family exclusion clause. 2

State Farm contends, and Mr. Urhammer does not dispute the contention, that Minnesota law applies. Olson and Heritage were not parties to the insurance contract in question here; State Farm and Mr. Urhammer were.

Although this case fails to present a controversy between the contracting parties over the applicable law to be applied and, consequently, is not a true conflicts case, because Olson and his insurer have standing to sue Urhammer's insurer directly, we choose to reach the conflicts question as to whether Minnesota or Wisconsin law applies to the enforceability and interpretation of the family-exclusion provision of the insurance contract.

In several recent cases decided by this court involving conflicts of law in the contract area, it was unnecessary to make a choice between the grouping-of-contacts approach to the determination of conflicts questions and the traditional rules dependent upon the place of making, performance, and presumed intention of the parties. 3 In Knippel 4 and Peterson 5 we recognized there was much to be said for this new approach, although it was unnecessary to make the change in those cases.

We now adopt the grouping-of-contacts approach for the resolution of conflicts questions pertaining to the validity and rights created by the provisions of a disputed contract.

Under the grouping-of-contacts theory it is clear that the significant contacts, both quantitatively and qualitatively, are with Minnesota. Here the negotiations over the contract were undertaken in Minnesota; the domicile of the parties in Minnesota; the policy was entered into, issued and delivered in Minnesota; premiums were paid and claims filed in Minnesota and the vehicle involved was licensed and garaged in Minnesota. There are no significant contacts with Wisconsin. While the appellants correctly state that the place of the accident and the residence of one defendant and his insurance carrier are in Wisconsin, these factors, though relevant to the tort aspects of this case, have nothing to do with the contract question. Certainly one would not argue that the policy limits in this contract would change when state lines are crossed. Likewise, the other contractual relations, bargained and agreed to by the Minnesota contracting parties, should not change.

Although Wisconsin does not permit such a family exclusion in an insurance contract written and issued in Wisconsin (sec. 204.34(2), Stats.) it is not against Wisconsin policy to recognize and enforce such a provision in the foreign contract. Minnesota law governs.

We now reach appellants' alternative argument and consider the effect of Minnesota law on this particular contract.

Appellants cite Engebretson v. Austvold, 6 Tomlyanovich v. Tomlyanovich, 7 and LeRoux v. Edmundson, 8 in support of their position that Minnesota upholds the validity of a family-exclusion clause only under circumstances in which the insured would be partial to the claimant because of the family relationship.

In Engebretson, the defendant was the daughter of the plaintiff. In 1931 she married and moved to Montana. Her husband died in 1933, whereupon defendant returned to Minnesota and was living in her mother's home when the accident occurred out of which the action arose. The insurance policy issued to defendant excluded liability for injury to 'persons in the same household as the assured, or those in the service or employment of the assured.' The court held that the defendant was a member of the some household as her mother and that the clause effectively excluded the mother from coverage.

The court did not articulate its reasons for upholding the clause but rejected a narrow construction, saying:

'There is no excuse for giving the policy limitation which controls (this) decision any undue narrowness, either of construction or application. It is unambiguous. It should be given that fair construction required by its plain language and equally plain purpose.' 9

In Tomlyanovich, the defendant's automobile-liability policy contained a clause which excluded coverage to 'any member of the family of the insured.' Defendant, at the time of the accident which prompted the litigation, was unmarried and resided in the family home owned by his father. Defendant's brother, the plaintiff in the action, was also unmarried and lived at the family home. Plaintiff was injured while a passenger in defendant's car. The court held that the clause effectively excluded the plaintiff and that to adopt a narrow meaning of the clause would 'virtually wipe out the exclusion in this state.' 10

The court pointed out that the obvious purpose of the family exclusion clause was 'to exempt the...

To continue reading

Request your trial
43 cases
  • Select Creations, Inc. v. Paliafito America, Inc.
    • United States
    • U.S. District Court — Eastern District of Wisconsin
    • December 21, 1992
    ...relations. Dresser Indus. v. Gradall Co., 702 F.Supp. 726, 731 (E.D.Wis.1988) (Warren, C.J.) (citing Urhammer v. Olson, 39 Wis.2d 447, 450, 159 N.W.2d 688, 689 (1968).) 5. The following factors are used to determine the place with the most significant relationship: (1) place of contracting;......
  • Home Insurance Company v. Monaco
    • United States
    • U.S. District Court — Eastern District of Pennsylvania
    • November 10, 1975
    ...921 (1957). It is, nevertheless, not against Wisconsin policy to enforce such a provision in a foreign policy. See Urhammer v. Olson, 39 Wis.2d 447, 159 N.W.2d 688 (1968). 5 The court ". . . The policy considered in Pearson v. Johnson, 215 Minn. 480, 10 N.W.2d 357 (1943) was identical with ......
  • CG Schmidt Inc. v. Permasteelisa N. Am.
    • United States
    • U.S. District Court — Eastern District of Wisconsin
    • October 23, 2015
    ...of Conflicts. Sybron Transition Corp. v. Sec. Ins. Co. of Hartford, 107 F.3d 1250, 1255 (7th Cir.1997) (citing Urhammer v. Olson, 39 Wis.2d 447, 159 N.W.2d 688 (1968) ). In this case, the alleged agreement was being negotiated by a Wisconsin plaintiff who sought contract work for real prope......
  • Straz v. Kansas Bankers Sur. Co.
    • United States
    • U.S. District Court — Eastern District of Wisconsin
    • November 26, 1997
    ...to choice of law issues as embodied in the Restatement (Second) of Conflict of Laws § 188 (1971). See Urhammer v. Olson, 39 Wis.2d 447, 450, 159 N.W.2d 688, 689 (Wis. 1968); Utica Mut. Ins. Co. v. Klein & Son, Inc., 157 Wis.2d 552, 556-58, 460 N.W.2d 763, 765-66 (Wis.Ct.App.1990). Relevant ......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT