Brey v. State Farm Mutual Automobile Insurance Company

• Decision Date: 15 February 2022
• Docket Number: 2019AP1320
• Citation: 2022 WI 7,970 N.W.2d 1,400 Wis.2d 417
• Parties: Elliot BREY and Estate of Ryan B. Johnson, Plaintiffs-Appellants, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Respondent-Petitioner, Channing H. Mathews, Craig A. Mathews and Sentry Insurance, A Mutual Company, Defendants.
• Court: Wisconsin Supreme Court

400 Wis.2d 417

970 N.W.2d 1

2022 WI 7

Elliot BREY and Estate of Ryan B. Johnson, Plaintiffs-Appellants,

v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Respondent-Petitioner,Channing H. Mathews, Craig A. Mathews and Sentry Insurance, A Mutual Company, Defendants.

No. 2019AP1320

Supreme Court of Wisconsin.

Oral Argument: September 15, 2021

Opinion Filed: February 15, 2022

For the defendant-respondent-petitioner, there were briefs filed by Andrew B. Hebl, Kathryn A. Pfefferle, and Boardman & Clark LLP, Madison. There was an oral argument by Andrew B. Hebl.

For the plaintiff-appellants, there was a brief filed by James G. Curtis, Garett T. Pankratyz, and Hale, Skemp, Hanson, Skemp & Sleik, La Crosse. There was an oral argument by James G. Curtis.

An amicus curiae brief was filed on behalf of The Wisconsin Insurance Alliance by James A. Friedman, Daniel C.W. Narvey, and Godfrey & Kahn, S.C., Madison.

An amicus curiae brief was filed on behalf of Wisconsin Defense Counsel by Vincent J. Scipior and Coyne, Schultz, Becker & Bauer, S.C., Madison; with whom on the brief was Erik L. Fuehrer and Gabert, Williams, Konz & Lawrynk, LLP, Appleton.

REBECCA GRASSL BRADLEY, J., delivered the majority opinion for a unanimous Court.

REBECCA GRASSL BRADLEY, J.

¶1 State Farm Mutual Automobile Insurance Company (State Farm) asks this court to reverse the court of appeals decision¹ reversing the circuit court's grant of summary judgment in favor of State Farm. The circuit court determined the State Farm automobile liability insurance policy issued to Elliot Brey's mother and her husband (the Policy) did not provide underinsured motorist (UIM) coverage to Elliot Brey (Brey) for the death of his father, Ryan B. Johnson (Johnson), in an automobile accident.² The Policy limits UIM coverage to compensatory damages for "bodily injury ... sustained by an insured[.]" Brey was an insured under the Policy, but Johnson was not. The circuit court ruled Brey could not recover under the policy because Brey did not sustain bodily injury. The court of appeals reversed and remanded with directions to grant summary judgment in favor of Brey, holding Wis. Stat. § 632.32(1) and (2)(d) (2017–18)³ bar an insurer from limiting UIM coverage to only those insureds who sustain bodily injury or death.

¶2 State Farm contends that Wis. Stat. § 632.32(2)(d) does not require insurers to extend UIM coverage to an insured for bodily injury or death suffered by a person who was not insured under the Policy. State Farm argues this conclusion is supported by the plain meaning of the statute, the court of appeals' decision in Ledman v. State Farm Mutual Automobile Insurance Co., 230 Wis. 2d 56, 601 N.W.2d 312 (Ct. App. 1999), longstanding automobile insurance law, and other jurisdictions' interpretations of similar statutes. We agree and hold Wis. Stat. § 632.32(2)(d) does not bar an insurer from requiring that an insured sustain bodily injury or death in order to trigger UIM coverage under an automobile liability insurance policy. Accordingly, we reverse the decision of the court of appeals.

I. BACKGROUND

¶3 Johnson died from injuries sustained in an automobile accident in 2015, leaving behind his minor son, Elliot Brey. State Farm insured Brey as a resident relative under the Policy issued to Hannah and Jake Brey, Brey's mother and her husband, covering a 2007 Honda CRV. That vehicle was not involved in the accident. Johnson, who was a passenger in a vehicle driven by Channing H. Mathews, was not insured under any State Farm policy.

¶4 Brey intervened in an action brought by Johnson's parents against the driver, the owner of the vehicle, and their insurance companies, and added State Farm as a defendant, seeking to recover damages under the Policy for the death of his father.⁴ In pertinent part, the UIM coverage provisions of the Policy provided that an insured must have sustained bodily injury caused by an accident involving an underinsured motor vehicle in order to collect compensatory damages.⁵

¶5 Both Brey and State Farm moved for summary judgment. State Farm sought a declaration that the Policy under which Brey was insured did not provide UIM coverage for the death of Johnson, because he was not an "insured" under the Policy. In response, Brey acknowledged the terms of the Policy preclude coverage, but argued the Policy's requirement that an insured sustain injury was contrary to Wis. Stat. § 632.32(2)(d) and therefore void and unenforceable. Section 632.32 is sometimes called the "Omnibus Statute" because it sets the minimum requirements all motor vehicle insurance policies in Wisconsin must satisfy.

¶6 The circuit court granted summary judgment in favor of State Farm based on the language of the Policy, the statutory history of Wis. Stat. § 632.32, and the court of appeals' decision in Ledman. In that case, the court of appeals held the Ledmans, insured under a State Farm automobile insurance policy, could not recover for the wrongful death of their adult daughter in an automobile accident under the policy's uninsured motorist vehicle provisions. See Ledman, 230 Wis. 2d at 69, 601 N.W.2d 312. The Ledman court emphasized the policy as a whole showed an "expected nexus of bodily injury to the insured as part of the overall general scheme and intent" of the policy, and an alternative reading would produce "unreasonable results." Id., at 67–68, 601 N.W.2d 312.

¶7 The court of appeals reversed and remanded, determining Ledman did not govern and holding Wis. Stat. § 632.32(1) and (2)(d) bar an insurer from limiting UIM coverage to only those insureds who suffer bodily injury or death. Brey v. State Farm Mut. Auto. Ins. Co., 2020 WI App 45, ¶¶24–25, 393 Wis. 2d 574, 947 N.W.2d 205. We granted State Farm's petition for review.

II. STANDARD OF REVIEW

¶8 We review a grant of summary judgment in this case. "Summary judgment is appropriate when there is no genuine dispute of material fact and the moving party is entitled to judgment as a matter of law." Kemper Indep. Ins. Co. v. Islami, 2021 WI 53, ¶13, 397 Wis. 2d 394, 959 N.W.2d 912 (quoting Talley v. Mustafa, 2018 WI 47, ¶12, 381 Wis. 2d 393, 911 N.W.2d 55 ). "We independently review a grant of summary judgment using the same methodology of the circuit court and the court of appeals." Id. (quoting Talley, 381 Wis. 2d 393, ¶12, 911 N.W.2d 55 ).

¶9 This case also requires us to interpret and apply the Omnibus Statute. "The interpretation and application of statutes present questions of law that we review independently, benefitting from the analyses of the circuit court and court of appeals."

Eau Claire Cnty. Dep't of Human Servs. v. S.E., 2021 WI 56, ¶13, 397 Wis. 2d 462, 960 N.W.2d 391 (citing State v. Stephenson, 2020 WI 92, ¶18, 394 Wis. 2d 703, 951 N.W.2d 819 ).

III. DISCUSSION

¶10 The parties do not dispute that the Policy bars coverage for Brey's wrongful death claim because the UIM coverage provisions require an insured to sustain bodily injury, and Johnson was not an insured under the Policy. Nonetheless, Brey contends that Wis. Stat. § 632.32(2)(d) precludes an insurer from limiting UIM coverage to only injured insureds. Section 632.32(2)(d) —located within the definitions section—provides: " ‘Underinsured motorist coverage’ means coverage for the protection of persons insured under that coverage who are legally entitled to recover damages for bodily injury, death, sickness, or disease from owners or operators of underinsured motor vehicles." This case turns on whether the UIM coverage clauses comport with this definition.

A. Plain Meaning of Wis. Stat. § 632.32(2)(d)

¶11 Our interpretation of Wis. Stat. § 632.32(2)(d) " ‘begins with the language of the statute.’ If the meaning of the language is plain, our inquiry ordinarily ends." Milwaukee Dist. Council 48 v. Milwaukee County, 2019 WI 24, ¶11, 385 Wis. 2d 748, 924 N.W.2d 153 (quoting State ex rel. Kalal v. Circuit Court for Dane Cnty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110 )(citation omitted). Importantly, "ascertaining the plain meaning of a statute requires more than focusing on a single sentence or portion thereof."

State v. Ziegler, 2012 WI 73, ¶43, 342 Wis. 2d 256, 816 N.W.2d 238 (citing Teschendorf v. State Farm Ins. Cos., 2006 WI 89, ¶12, 293 Wis. 2d 123, 717 N.W.2d 258 ). A statute's context and structure are critical to a proper plain-meaning analysis. Milwaukee Dist. Council 48, 385 Wis. 2d 748, ¶11, 924 N.W.2d 153 (citing Kalal, 271 Wis. 2d 633, ¶46, 681 N.W.2d 110 ).

If statutory language is plain, courts must enforce it according to its terms, but oftentimes the meaning or ambiguity of certain words or phrases may only become evident when placed in context, so when deciding whether language is plain, courts must read the words in their context and with a view to their place in the overall statutory scheme.

2A Sutherland Statutory Construction § 46:1 n.1 (7th ed. updated Nov. 2021) (citing King v. Burwell, 576 U.S. 473, 135 S.Ct. 2480, 192 L.Ed.2d 483 (2015) ). Properly applied, the plain-meaning approach is not "literalistic"; rather, the ascertainment of meaning involves a "process of analysis" focused on deriving the fair meaning of the text itself. See Kalal, 271 Wis. 2d 633, ¶¶46, 52, 681 N.W.2d 110 (quoting Bruno v. Milwaukee County, 2003 WI 28, ¶20, 260 Wis. 2d 633, 660 N.W.2d 656 ); see also Antonin Scalia & Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 355 (2012) ("Literalness may strangle meaning." (quoting Utah Junk Co. v. Porter, 328 U.S. 39, 44, 66 S.Ct. 889, 90 L.Ed. 1071 (1946) )).

¶12 The court of appeals' conclusion that Wis. Stat. § 632.32(2)(d) contains an "unambiguous statement" prohibiting State Farm from conditioning coverage on an insured sustaining bodily injury reflects a literalistic approach to statutory interpretation. See Brey, 393 Wis. 2d 574, ¶22, 947 N.W.2d 205. That court reasoned: (1) Brey is an "insured"; (2) who is "legally entitled to recover damages"; (3) because he has a...