Blum v. 1st Auto & Cas. Ins. Co., Case No. :2008ap1324

CourtUnited States State Supreme Court of Wisconsin
Writing for the CourtDAVID T. PROSSER, J.
Citation762 N.W.2d 819,2010 WI 78,2009 WI App 19,315 Wis.2d 822
PartiesKevin Blum, Jr., by his Guardian ad Litem, Jason Studinski,Plaintiff-Appellant-Petitioner, WEA Insurance Corporation, Involuntary-Plaintiff, v. 1st Auto & Casualty Insurance Company, Defendant-Respondent.
Decision Date14 July 2010
Docket NumberCase No. :2008ap1324

2010 WI 78
2009 WI App 19
315 Wis.2d 822
762 N.W.2d 819

Kevin Blum, Jr., by his Guardian ad Litem, Jason
Studinski, Plaintiff-Appellant-Petitioner,
WEA Insurance Corporation, Involuntary-Plaintiff,
v.
1st Auto & Casualty Insurance Company, Defendant-Respondent.

Case No. :2008ap1324

Supreme Court Of Wisconsin

Argument: February 10, 2010
Opinion filed: July 14, 2010


Attorneys:

For the plaintiff-appellant-petitioner there were briefs by J. Michael Riley, Timothy M. Barber, and Axley Brynelson, LLP, Madison, and oral argument by J. Michael Riley.

For the defendant-respondent there was a brief by Rick J. Mundt, Chet Holzbauer, and Winner, Wixson & Pernitz, Madison, and oral argument by Rick J. Mundt.

An amicus curiae brief was filed by Lynn R. Laufenberg and the Laufenberg Law Group, S.C., Milwaukee, on behalf of the Wisconsin Association for Justice.

An amicus curiae brief s filed by James A. Friedman, Bryan J. Cahill, and Godfrey & Kahn, S.C., Madison, on behalf of the Wisconsin insurance Alliance.

REVIEW OF A DECISION OF THE COURT OF APPEALS

Source of Appeal:

Court: Circuit

County: Sauk

Judge: Guy D. Reynolds

Page 2

REVIEW of a decision of the Court of Appeals. Affirmed.

¶1 DAVID T. PROSSER, J. This is a review of a published decision of the court of appeals, Blum v. 1st Auto & Casualty Insurance Co., 2009 WI App 19, 315 Wis. 2d 822, 762 N.W.2d 819, affirming an order of the Circuit Court for Sauk County, Guy D. Reynolds, Judge. The circuit court granted summary judgment to 1st Auto & Casualty Insurance Company (1st Auto) on grounds that Kevin Blum (Blum) was not entitled to the uninsured motorist

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(UM) coverage in his policy because the owner of the uninsured vehicle involved in an accident involving Blum was not negligent, while the negligent operator of that vehicle was insured. The court of appeals affirmed, reasoning that although the UM policy provision was ambiguous, Wis. Stat. § 632.32(4) (a) (2005-06)1 does not mandate coverage when the alleged tortfeasor in an automobile accident is insured, and a reasonable person would not expect to receive more UM coverage than contemplated by the statute. Accordingly, it held that the policy did not provide UM coverage for Blum under these facts.

¶2 In its analysis, the court of appeals relied on holdings in Hemerley v. American Family Mutual Insurance Co., 127 Wis. 2d 304, 379 N.W.2d 860 (Ct. App. 1985), a decision that this court expressly overruled in Hull v. State Farm Mutual Automobile Insurance Co., 222 Wis. 2d 627, 586 N.W.2d 863 (1998). The court of appeals reasoned that Hemerley could still be used as precedent for holdings that had not been specifically overruled by this court.

¶3 We conclude the following:

A. The UM policy in this case is unambiguous and does not provide UM coverage when the owner of an uninsured motor vehicle was not negligent. The provisions on liability in the UM policy, read separately or as a whole, do not contemplate

Page 3

coverage when the owner of an uninsured motor vehicle is not negligent and has no other basis of liability for an accident.

B. Former Wis. Stat. § 632.32(4) did not mandate coverage in a situation where the sole alleged tortfeasor was insured and his insurance equaled the level of UM coverage in the injured insured's policy.

C. A court of appeals decision loses all precedential value when it is overruled by this court. Although the court of appeals correctly concluded that UM coverage was unavailable on these facts, it should not have relied on Hemerley to reach this conclusion because that decision no longer possessed any precedential value.

¶4 Accordingly, we affirm the decision of the court of appeals.

I. BACKGROUND AND PROCEDURAL HISTORY

¶5 The facts of this case are undisputed. Kevin Blum was seriously injured after jumping on the hood of a pickup truck driven by Nicholas Burch (Nicholas). Nicholas accelerated the truck, then applied the brakes, causing Blum to be thrown off the vehicle and to strike his head on the curb. Blum's counsel describes the resulting injuries as catastrophic.

¶6 The pickup was owned by Nicholas's father, Bruce Burch (Bruce), who did not have an insurance policy on the vehicle at the time of the accident. Nicholas himself was covered by a liability insurance policy with American Standard Insurance Company (American Standard). Prior to this lawsuit, Blum released Nicholas and American Standard from further liability

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in exchange for a settlement of $250,000, the maximum under American Standard's liability limits.

¶7 At the time of the accident, Blum was covered by a family insurance policy from 1st Auto. Under Part C of the policy, entitled "Uninsured Motorist", paragraph A of the Insuring Agreement provided:

A. We will pay compensatory damages which an insured is legally entitled to recover from the owner or operator of an uninsured motor vehicle because of bodily injury:

1. Sustained by any insured; and

2. Caused by an accident.

The owner's or operator's liability for these damages must arise out of the ownership, maintenance or use of the uninsured motor vehicle.

....

Uninsured motor vehicle means a land motor vehicle or trailer of any type:

1. To which no bodily injury liability bond, or policy applies at the same time of the accident.

¶8 After discovering that Bruce had no insurance for the pickup, Blum's attorney, Lee Atterbury, gave 1st Auto notice of a claim under the UM provision of the 1st Auto policy. A claims representative responded to Atterbury, inquiring into his theory of liability regarding the negligence of the vehicle owner. In response, Atterbury claimed that Bruce had negligently entrusted the vehicle to Nicholas. 1st Auto did not pay the claim.

¶9 Blum sued, seeking compensation for UM benefits. 1st Auto moved for summary judgment on the ground that its UM

Page 5

coverage is not available where the negligent operator of a vehicle is insured, but the non-negligent owner is not. In time, Blum conceded that he could not establish that Bruce was negligent, but he asserted that the 1st Auto policy provided UM benefits by virtue of the fact that Bruce did not have insurance for the vehicle.

¶10 The circuit court granted summary judgment to 1st Auto, concluding that the policy's UM provision could not reasonably be understood as supplementing the insurance available to an insured driver. It reasoned that "to ascribe the meaning plaintiff argues for would inescapably lead to the conclusion that plaintiff's uninsured motorist coverage covers insured motorists."

¶11 The court of appeals affirmed. Relying on part of the analysis in Hemerley, the court held that the language of the policy was ambiguous. Blum, 315 Wis. 2d 822, ¶10. The court then concluded, based on Hemerley, that " [a] reasonable person would understand the words in the policy to provide the coverage contemplated by the statute." Id., ¶11 (quoting Hemerley, 127 Wis. 2d at 309-10). The court noted that, while Hull overruled Hemerley's interpretation of § 632.32(4) (a), it did not implicate Hemerley's conclusion that the contract was ambiguous and that a reasonable insured would interpret the contract to provide the statutorily required coverage. Id., ¶14.

¶12 Because it concluded that the policy language was ambiguous but followed the statutory requirements, the court of appeals looked to the statute and this court's interpretation of

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the statute in Hull to resolve the ambiguity. Id., ¶19. The court then noted that Hull "requires UM coverage whenever either the owner or the operator of a motor vehicle is allegedly negligent and not covered by liability insurance." Id. Applying this rule, the court concluded that UM coverage was not required because the negligent operator of the vehicle was covered by liability insurance. Id.

¶13 Blum petitioned this court for review, which we granted.

II. STANDARD OF REVIEW

¶14 We review a circuit court's grant of summary judgment de novo, using the same methodology employed by the circuit court under Wis. Stat. § 802.08. Smith v. Katz, 226

Wis. 2d 798, 805, 595 N.W.2d 345 (1999). Under § 802.08(2), a court shall grant a motion for summary judgment when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Wis. Stat. § 802.08(2).

¶15 This case involves the interpretation of an insurance policy and a statute. Both matters present questions of law that we review de novo, although we benefit from the analyses of the circuit court and court of appeals. Hull, 222 Wis. 2d at 636; Clark v. American Family Mut. Ins. Co., 218 Wis. 2d 169, 173, 577 N.W.2d 790 (1998).

III. DISCUSSION

¶16 This case presents three issues for our review. The first is whether Blum is entitled to compensation for his

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injuries under the UM provision of his policy with 1st Auto. The second is whether former Wis. Stat. § 632.32(4) required coverage under these facts, even if Blum's policy did not provide coverage.2 The third is whether a court of appeals decision possesses precedential value after it has been overruled by the supreme court. We address these issues in turn.

A. Coverage Under Blum's UM Policy

¶17 This case...

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68 practice notes
  • Bostco LLC v. Milwaukee Metro. Sewerage Dist., Nos. 2007AP221
    • United States
    • United States State Supreme Court of Wisconsin
    • July 18, 2013
    ...“reverses in part” the decision of the court below in the same case, the rule announced in Blum v. 1st Auto & Casualty Insurance Co., 2010 WI 78, ¶ 56, 326 Wis.2d 729, 786 N.W.2d 78, does not apply here. Cf. State v. Ziegler, 2012 WI 73, ¶ 7 n. 3, 342 Wis.2d 256, 816 N.W.2d 238 (recognizing......
  • State v. Lee, Appeal No. 2019AP221-CR
    • United States
    • Court of Appeals of Wisconsin
    • January 20, 2021
    ...whereas the supreme court oversees and implements the statewide development of the law. 396 Wis.2d 159 Blum v. 1st Auto & Cas. Ins. Co. , 2010 WI 78, ¶47, 326 Wis. 2d 729, 786 N.W.2d 78. In such an impactful context, if the rule Lee seeks is to be recognized, it should be left for the supre......
  • Fontana Builders, Inc. v. Assurance Co. of Am., No. 2014AP821.
    • United States
    • United States State Supreme Court of Wisconsin
    • June 29, 2016
    ...policy when resolving claimed ambiguities.” Wadzinski, 342 Wis.2d 311, ¶ 16, 818 N.W.2d 819 (citing 526 Blum v. 1st Auto & Cas. Ins. Co., 2010 WI 78, ¶ 20, 326 Wis.2d 729, 786 N.W.2d 78 ).¶ 57 Considering the phrase “when permanent property insurance applies” in context suggests that the ph......
  • Talley v. Mustafa, No. 2015AP2356
    • United States
    • United States State Supreme Court of Wisconsin
    • May 11, 2018
    ...However, because we reverse the court of appeals decision, its statement has no precedential effect. See Blum v. 1st Auto & Cas. Ins. Co., 2010 WI 78, ¶ 42, 326 Wis. 2d 729, 786 N.W.2d 78.10 In Estate of Sustache, we cited 9 Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 127:21, 127—......
  • Request a trial to view additional results
68 cases
  • Bostco LLC v. Milwaukee Metro. Sewerage Dist., Nos. 2007AP221
    • United States
    • United States State Supreme Court of Wisconsin
    • July 18, 2013
    ...“reverses in part” the decision of the court below in the same case, the rule announced in Blum v. 1st Auto & Casualty Insurance Co., 2010 WI 78, ¶ 56, 326 Wis.2d 729, 786 N.W.2d 78, does not apply here. Cf. State v. Ziegler, 2012 WI 73, ¶ 7 n. 3, 342 Wis.2d 256, 816 N.W.2d 238 (recognizing......
  • State v. Lee, Appeal No. 2019AP221-CR
    • United States
    • Court of Appeals of Wisconsin
    • January 20, 2021
    ...whereas the supreme court oversees and implements the statewide development of the law. 396 Wis.2d 159 Blum v. 1st Auto & Cas. Ins. Co. , 2010 WI 78, ¶47, 326 Wis. 2d 729, 786 N.W.2d 78. In such an impactful context, if the rule Lee seeks is to be recognized, it should be left for the supre......
  • Fontana Builders, Inc. v. Assurance Co. of Am., No. 2014AP821.
    • United States
    • United States State Supreme Court of Wisconsin
    • June 29, 2016
    ...policy when resolving claimed ambiguities.” Wadzinski, 342 Wis.2d 311, ¶ 16, 818 N.W.2d 819 (citing 526 Blum v. 1st Auto & Cas. Ins. Co., 2010 WI 78, ¶ 20, 326 Wis.2d 729, 786 N.W.2d 78 ).¶ 57 Considering the phrase “when permanent property insurance applies” in context suggests that the ph......
  • Talley v. Mustafa, No. 2015AP2356
    • United States
    • United States State Supreme Court of Wisconsin
    • May 11, 2018
    ...However, because we reverse the court of appeals decision, its statement has no precedential effect. See Blum v. 1st Auto & Cas. Ins. Co., 2010 WI 78, ¶ 42, 326 Wis. 2d 729, 786 N.W.2d 78.10 In Estate of Sustache, we cited 9 Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 127:21, 127—......
  • Request a trial to view additional results

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