Davis v. Allied Processors, Inc., 97-0478
| Court | Court of Appeals of Wisconsin |
| Writing for the Court | NOLAN |
| Citation | 214 Wis.2d 294,571 N.W.2d 692 |
| Parties | Douglas E. DAVIS, Plaintiff-Respondent, Integrity Mutual Insurance Company, Plaintiff, v. ALLIED PROCESSORS, INC., Defendant-Respondent, d Western National Mutual Insurance Company, Defendant-Appellant. |
| Docket Number | No. 97-0478,97-0478 |
| Decision Date | 21 October 1997 |
Page 692
Integrity Mutual Insurance Company, Plaintiff,
v.
ALLIED PROCESSORS, INC., Defendant-Respondent, d
Western National Mutual Insurance Company, Defendant-Appellant.
Opinion Released Oct. 21, 1997.
Opinion Filed Oct. 21, 1997.
Page 693
[214 Wis.2d 295] On behalf of the defendant-appellant, the cause was submitted on the briefs of John E. Varpness of Gislason, Martin & Varpness, P.A. of Edina, MN.
On behalf of the plaintiff-respondent, the cause was submitted on the brief of Michael P. Wagner of Wagner & Todryk, S.C. of Menomonie.
On behalf of defendant-respondent, the cause was submitted on the brief of Chris A. Gramstrup of Superior.
Before CANE, P.J., and MYSE and NOLAN, 1 JJ.
NOLAN, Judge.
Western National Mutual Insurance Company appeals an order that permits the punitive damage award to be satisfied from its underlying (primary) policy of insurance and allows the compensatory damages award to be satisfied from its excess (umbrella) policy. Western contends that the trial court erroneously permitted the plaintiff, Douglas Davis, to elect which policy would be used to satisfy the judgment for both punitive and compensatory damages. It [214 Wis.2d 296] contends that the compensatory damages must first be satisfied from the underlying policy, which provided primary coverage and, because the excess policy contained a provision excluding coverage for punitive damages, the punitive damages could not be satisfied from it.
Contrary to the trial court's determination, we find no ambiguity in the excess policy's terms. Because the trial court forced Western to assume a risk it had not contracted for, we reverse the order and remand for further proceedings consistent with this opinion.
After a jury trial for personal injuries, the jury awarded Davis $585,000 in compensatory damages. It found Western's insured, Allied Processors, Inc., 90% at fault and Davis 10% at fault. The jury also awarded $500,000 in punitive damages against Allied.
Western had issued Allied two liability policies. The first provided primary coverage for liability in the amount of $500,000. A second excess or umbrella policy provided $2,000,000 in coverage. 2 Because the underlying policy was silent on the subject of punitive [214 Wis.2d 297] damages, in accordance with the Wisconsin Supreme Court's decision in Brown v. Maxey, 124 Wis.2d 426, 369 N.W.2d 677 (1985), it permitted the payment of both compensatory and punitive damages. This conclusion is not disputed. In contrast, the umbrella policy contained a punitive damage exclusion, stating: "It is agreed that this policy shall not apply to any liability for punitive or exemplary damages."
After the verdict, Davis requested the trial court to find that, as a matter of the law, the two policies covered the entire judgment. The trial court, finding that there is no language in the umbrella policy that makes an exception when underlying insurance is exhausted by a punitive damage claim, ordered that Western "shall satisfy the punitive damage portion of Plaintiff Davis's judgment from the primary policy and shall satisfy the compensatory damage portion of the judgment out of the coverage afforded by the excess/umbrella policy ...."
The trial court found that Western had included an endorsement excluding punitive damages in the excess policy but did not do so in the underlying policy when it presumably could have. The trial court also found that a reasonable insured would expect the excess policy to pay compensatory damages when the aggregate limits of the underlying policy had been exhausted as a result of an
Page 694
accident or occurrence for which coverage was provided. The trial court concluded that the definition of "ultimate net loss" in the umbrella policy does not exclude payment of compensatory damages where the underlying insurance is exhausted by payment of a punitive damage claim. It also found that the policy's definition of "ultimate net loss" is not determinative "because contradictory provisions of the same policy ... apply where the underlying [214 Wis.2d 298] insurance is exhausted by virtue of an occurrence or accident."The precise issue before us has not yet been addressed in this state, and the parties have not been able to provide us with any case on all fours from another jurisdiction. We resolve the issue by resorting to well-known...
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Johnson Controls Inc v. London Mkt., 2007AP1868.
...53 In Davis v. Allied Processors, Inc., the court of appeals explained that insurance companies calculate premiums based upon statistics. 214 Wis.2d 294, 300, 571 N.W.2d 692 (Ct.App.1997). Excess policies may be less expensive because most judgments and settlements will be within the limits......
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Straz v. Kansas Bankers Surety Co., 97-4245
...an insurance policy is a question of law, which, like a grant of summary judgment, is reviewed de novo. Davis v. Allied Processors, Inc., 214 Wis.2d 294, 571 N.W.2d 692, 694 (Wis.Ct.App.1997). Insurance policies are construed just like other contracts. Donaldson v. Urban Land Interests, Inc......
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Moreno v. Amer. Family Mutual, 99-2443P19_404
...When reading an insurance policy, our objective is to ascertain the intentions of the parties. See Davis v. Allied Processors, Inc., 214 Wis.2d 294, 298, 571 N.W.2d 692 (Ct. App. 1997). This is determined by considering what a reasonable person in the position of the insured would have unde......
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Meyer v. Michigan Mut. Ins. Co., 99-0228.
...insurance contract is a question of law that this court decides independently of the trial court. See Davis v. Allied Processors, Inc., 214 Wis. 2d 294, 298, 571 N.W.2d 692 (Ct. App. 1997). When construing an insurance policy, our objective, like construing any contract, is to ascertain the......
-
Johnson Controls Inc v. London Mkt., 2007AP1868.
...53 In Davis v. Allied Processors, Inc., the court of appeals explained that insurance companies calculate premiums based upon statistics. 214 Wis.2d 294, 300, 571 N.W.2d 692 (Ct.App.1997). Excess policies may be less expensive because most judgments and settlements will be within the limits......
-
Straz v. Kansas Bankers Surety Co., 97-4245
...an insurance policy is a question of law, which, like a grant of summary judgment, is reviewed de novo. Davis v. Allied Processors, Inc., 214 Wis.2d 294, 571 N.W.2d 692, 694 (Wis.Ct.App.1997). Insurance policies are construed just like other contracts. Donaldson v. Urban Land Interests, Inc......
-
Moreno v. Amer. Family Mutual, 99-2443P19_404
...When reading an insurance policy, our objective is to ascertain the intentions of the parties. See Davis v. Allied Processors, Inc., 214 Wis.2d 294, 298, 571 N.W.2d 692 (Ct. App. 1997). This is determined by considering what a reasonable person in the position of the insured would have unde......
-
Meyer v. Michigan Mut. Ins. Co., 99-0228.
...insurance contract is a question of law that this court decides independently of the trial court. See Davis v. Allied Processors, Inc., 214 Wis. 2d 294, 298, 571 N.W.2d 692 (Ct. App. 1997). When construing an insurance policy, our objective, like construing any contract, is to ascertain the......