Belding v. Demoulin

Decision Date07 February 2014
Docket NumberNo. 2012AP829.,2012AP829.
Citation352 Wis.2d 359,843 N.W.2d 373,2014 WI 8
PartiesRonald E. BELDING, Jr. and Antoinette Belding, Plaintiffs–Appellants, v. Deeanna L. DEMOULIN, Defendant, State Farm Mutual Automobile Insurance Company, Defendant–Respondent–Petitioner.
CourtWisconsin Supreme Court

OPINION TEXT STARTS HERE

For the defendant-respondent-petitioner, there were briefs by Claude J. Covelli and Boardman & Clark LLP, Madison, and oral argument by Claude J. Covelli.

For the plaintiff-appellants, there was a brief by Gregory A. Pitts and Schoone, Leuck, Kelley, Pitts & Knurr, S.C., Racine, and oral argument by Gregory A. Pitts.

An amicus curiae brief was filed by Jesse B. Blocher, and Habush, Habush & Rottier S.C., Waukesha, and Kevin Lonergan and Herrling Clark Law Firm, Ltd., Appleton, on behalf of Wisconsin Association for Justice, with oral argument by Kevin Lonergan.

An amicus curiae brief was filed by James A. Friedman, Katherine Stadler, and Godfrey & Kahn, S.C., Madison, on behalf of Wisconsin Insurance Alliance and the Property Casualty Insurers Association of America.

ANN WALSH BRADLEY, J.

¶ 1 Petitioner, State Farm Mutual Automobile Insurance Company (State Farm), seeks review of a published court of appeals decision that reversed a summary judgment that had been granted in State Farm's favor. 1 Although the circuit court agreed with State Farm that the drive-other-car exclusion precluded coverage, the court of appeals determined that Wis. Stat. § 632.32(6)(d) (2009–10),2 which prohibited anti-stacking 3 clauses, barred the drive-other-car exclusion State Farm sought to apply.

¶ 2 State Farm argues that the drive-other-car exclusion is enforceable because it is specifically authorized by Wis. Stat. § 632.32(5)(j). Contending that Wis. Stat. § 632.32(5)(j) is clear on its face, State Farm asserts that the court of appeals erroneously interpreted the statute.

¶ 3 The error in State Farm's argument is that it focuses on subsection (5)(j) in isolation, ignoring the rest of Wis. Stat. § 632.32. Instead, we review the drive-other-car exclusion permitted by Wis. Stat. § 632.32(5)(j) in context. We apply the test set forth in Wis. Stat. § 632.32(5)(e) that harmonizes the exclusion with the prohibition on anti-stacking clauses in Wis. Stat. § 632.32(6)(d). This legislative test allows policies to contain coverage exclusions if they are not prohibited by Wis. Stat. § 632.32(6) or other law.

¶ 4 Applying this legislative test, we conclude that pursuant to the prohibition on anti-stacking clauses in Wis. Stat. § 632.32(6)(d), State Farm cannot use the drive-other-car exclusion in the Beldings' policy to prevent them from stacking the uninsured motorist coverage of up to three vehicles owned and insured by them. This conclusion is supported by both our precedent and legislative history. Additionally, we are guided by well-established canons of statutory construction.

¶ 5 Accordingly, we affirm the court of appeals.

I

¶ 6 The relevant facts of this case are not in dispute. On January 13, 2010, Deeanna Demoulin (Demoulin) disobeyed a red traffic light and crashed into the Ford Ranger pickup truck that Ronald Belding, Jr., (Belding) was driving. Belding sustained multiple injuries in the accident. He alleged he incurred medical expenses, lost wages, and lost earning capacity due to his injuries. His wife alleged that she suffered a loss of society and companionship, and shared in the pecuniary losses caused by Belding's injuries.

¶ 7 The Beldings had two separate policies with State Farm for which they paid separate premiums and had separate uninsured and underinsured motorist coverage. Because Demoulin was uninsured, the Beldings sought to collect their damages from State Farm, which provided uninsured motorist coverage for their Ford Ranger and their other vehicle, a Mercury Villager. 4 After State Farm paid the Beldings $100,000, which was the maximum permitted under the Ford Ranger policy, the Beldings sought to collect their excess damages through the uninsured motorist coverage in their Mercury Villager policy.

¶ 8 The Mercury Villager policy contains a clause referred to as the “drive-other-car” exclusion. Intended to address the problem of free riders, drive-other-car exclusions keep an insured from using insurance coverage of one car to provide coverage on another vehicle the insured owns but has not insured. See Arnold P. Anderson, 1 Wisconsin Insurance Law, § 3.72 (6th ed.2010); Agnew v. American Family Mut. Ins. Co., 150 Wis.2d 341, 350, 441 N.W.2d 222 (1989).

¶ 9 The drive-other-car provision in the Mercury Villager policy provides that:

THERE IS NO COVERAGE:

2. FOR AN INSURED WHO SUSTAINS BODILY INJURY RESULTING FROM THE USE OF A MOTOR VEHICLE OWNED BY YOU OR ANY RESIDENT RELATIVE IF IT IS NOT YOUR CAR, A NEWLY ACQUIRED CAR, OR A TEMPORARY SUBSTITUTE CAR....

(Emphasis in original). The policy defines “your car” as “the vehicle shown under ‘YOUR CAR’ on the Declarations Page.” The Declarations Page for the Mercury Villager policy lists only the Mercury Villager. Because Mr. Belding was not driving the Mercury Villager when the accident occurred, State Farm determined that the drive-other-car exclusion in the Mercury Villager policy applied to bar his claim and precluded coverage.

¶ 10 Thereafter, the Beldings filed suit in the circuit court against Demoulin and State Farm. They sought to collect from State Farm compensatory damages in excess of the amounts previously paid under the Ford Ranger policy. State Farm filed a motion for summary judgment. It arguedthat the drive-other-car exclusion, which was permitted by Wis. Stat. § 632.32(5)(j), operated to exclude coverage under the Mercury Villager policy. In response, the Beldings asserted that the drive-other-car exclusion was not applicable because Wis. Stat. § 632.32(6)(d) prohibited anti-stacking clauses from applying to uninsured motorist coverage. The circuit court determined that the drive-other-car exclusion permitted by Wis. Stat. § 632.32(5)(j) was controlling and granted State Farm's motion.

¶ 11 The court of appeals reversed. Belding v. DeMoulin, 2013 WI App 26, 346 Wis.2d 160, 828 N.W.2d 890. Central to its analysis was an examination of Wis. Stat. § 632.32(5)(e),5 which harmonizes the drive-other-car exclusion with the prohibition of anti-stacking clauses. Accordingly, it applied that statute's two-step test to determine the applicability of the drive-other-car exclusion in the Mercury Villager policy. Id., ¶¶ 15, 16.

¶ 12 The first step looks at whether the exclusion is prohibited by subsection (6), and the second step looks at whether the exclusion is prohibited by any other law. Id., ¶ 15. The court determined that the drive-other-car exclusion failed this test because it ran afoul of the anti-stacking prohibition in Wis. Stat. § 632.32(6)(d). Accordingly, it reversed the circuit court's grant of summary judgment and remanded the case.

II

¶ 13 In this case we are asked to review the circuit court's grant of summary judgment. We review grants of summary judgment independently, applying the same methodology employed by the circuit court. Park Bank v. Westburg, 2013 WI 57, ¶ 36, 348 Wis.2d 409, 832 N.W.2d 539. Summary judgment is appropriate if “there is no genuine issue as to any material fact and [ ] the moving party is entitled to a judgment as a matter of law.” Wis. Stat. § 802.08(2).

¶ 14 Here, there are no disputed facts. The dispute is over whether an automobile insurance policy could prohibit stacking the coverage limits for uninsured motorist coverage during the time period when both Wis. Stat. § 632.32(5)(j) (permitting drive-other-car exclusions) and Wis. Stat. § 632.32(6)(d) (prohibiting anti-stacking clauses) were in effect. To answer this question we must interpret those statutes as they apply to the insurance policy at issue. Statutory interpretation and the interpretation of an insurance policy present questions of law that this court reviews independently of the determinations rendered by the circuit court and the court of appeals. Teschendorf v. State Farm Ins. Cos., 2006 WI 89, ¶ 9, 293 Wis.2d 123, 717 N.W.2d 258.

¶ 15 Statutory interpretation always begins with examining the statutory language at issue. State ex rel. Kalal v. Circuit Court for Dane Cnty., 2004 WI 58, ¶ 45, 271 Wis.2d 633, 681 N.W.2d 110. We interpret statutory language “in the context in which it is used; not in isolation but as part of a whole; in relation to the language of surrounding or closely-related statutes.” Id., ¶ 46.

¶ 16 When we are unable to discern the answer to our inquiry by an examination of the statutory language and its context, we can look to our prior case law. It may illumine how we have previously interpreted or applied the statutory language.See, e.g., State v. Robert K., 2005 WI 152, ¶ 30, 286 Wis.2d 143, 706 N.W.2d 257. We also may turn to legislative history to ascertain the meaning of the statute. Kalal, 271 Wis.2d 633, ¶ 51, 681 N.W.2d 110.

¶ 17 Our consideration of a statute's language and context is guided by well-established canons of statutory construction. Statutory provisions dealing with the same matter should be read in harmony such that each has force and effect. Statutory interpretations that render provisions meaningless should be avoided. See Madison Metro. Sch. Dist. v. Circuit Court, 2011 WI 72, ¶ 101, 336 Wis.2d 95, 800 N.W.2d 442;see also State v. Kruse, 101 Wis.2d 387, 395, 305 N.W.2d 85 (1981). In the event of “a conflict between a general and a specific statute, the latter controls.” Emjay Inv. Co. v. Village of Germantown, 2011 WI 31, ¶ 38, 333 Wis.2d 252, 797 N.W.2d 844 (quoting Bornemann v. City of New Berlin, 27 Wis.2d 102, 111, 133 N.W.2d 328 (1965)).

III

¶ 18 To provide context for our discussion, we begin with a brief history of the legislation governing stacking provisions in insurance policies. Prior to 1995, Wisconsin courts disfavored limitations on stacking, including drive-other-car...

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