Hull v. State Farm Mut. Auto. Ins. Co., No. 97-0659

CourtUnited States State Supreme Court of Wisconsin
Citation586 N.W.2d 863,222 Wis.2d 627
Docket NumberNo. 97-0659
PartiesBetty L. HULL, Plaintiff-Appellant-Petitioner, v. STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Respondent.
Decision Date15 December 1998

Page 863

586 N.W.2d 863
222 Wis.2d 627
Betty L. HULL, Plaintiff-Appellant-Petitioner,
v.
STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY, Defendant-Respondent.
No. 97-0659.
Supreme Court of Wisconsin.
Argued Sept. 10, 1998.
Decided Dec. 15, 1998.

Page 864

[222 Wis.2d 631] For the plaintiff-appellant-petitioner there were briefs by Virginia M. Antoine, Milwaukee, John D. Murray, Appleton and Habush, Habush, Davis Rottier, S.C., Milwaukee and and oral argument by Virginia M. Antoine.

For the defendant-respondent there was a brief by Peter M. Farb and Gabert, Williams Farb, Appleton and oral argument by Peter M. Farb.

¶1 N. PATRICK CROOKS, J.

Petitioner Betty L. Hull (Hull) seeks review of a court of appeals decision 1 affirming an order of the Fond du Lac County Circuit Court, the Honorable Henry B. Buslee presiding, in which the court dismissed Hull's complaint and entered a declaratory judgment in favor of State Farm Mutual Automobile Insurance Company (State Farm). Hull claimed that she was entitled to uninsured motorist (UM) benefits under her two State Farm liability insurance policies because the owner of the vehicle which struck and killed her husband was uninsured. Relying on Hemerley v. American Family Mutual Insurance Co., 127 Wis.2d 304, 379 N.W.2d 860

Page 865

(Ct.App.1985), both the circuit court and court of appeals denied UM coverage. Both courts held that the vehicle was not uninsured under either the Wisconsin statute which mandates UM coverage, Wis. Stat. § 632.32(4)(1995-96), 2 or the language of the State Farm policies because the driver's use of the vehicle was insured under a liability policy.

[222 Wis.2d 632]

¶2 We conclude that Hull is entitled to UM coverage under both Wis. Stat. § 632.32(4) and the terms of her State Farm policies. First, we find that UM coverage is available to Hull under the plain language of the UM provisions in Hull's two State Farm insurance policies. Second, we hold that § 632.32(4) requires UM coverage whenever either the owner or the operator of a motor vehicle is allegedly negligent and is not covered by liability insurance. Since the allegedly negligent owner of the motor vehicle in this case was not insured, § 632.32(4) requires that State Farm provide UM coverage to Hull. In accordance with the reasoning herein, we overrule Hemerley and reverse the decision of the court of appeals.

I.

¶3 The facts of this case are not in dispute. On July 14, 1994, Hull's husband was struck and killed by a pickup truck on the grounds of Badger State Auto Auction (Badger State) in Fond du Lac, Wisconsin. William Borth, the driver of the truck, was an employee of Badger State, and was trying to stop the truck after he had driven it into the auction ring. The truck was apparently in a poor state of repair and failed to stop when Borth pressed the brakes.

¶4 Roger Reany, the truck's owner, had consigned the truck to Badger State for auction. Reany did not have any insurance covering the truck or its operation. Borth's use of the truck was insured by Milwaukee Mutual under Badger State's liability policy. 3

[222 Wis.2d 633]

¶5 Instead of proceeding against Borth, Badger State and/or Milwaukee Mutual, Hull sued State Farm, claiming that she was entitled to uninsured motorist (UM) benefits under her two State Farm policies for the wrongful death of her husband. In her complaint, filed on January 24, 1996, Hull contended that she was entitled to UM damages under her policies because the truck was not insured by its owner and had been negligently maintained. State Farm countered that the truck did not fit the policy definition of "uninsured motor vehicle," because its use by Borth was insured by Milwaukee Mutual.

¶6 State Farm filed a motion for declaratory judgment and for dismissal of Hull's complaint. The circuit court heard the motion on November 20, 1996, and granted it on February 6, 1997. The court determined that the truck was not uninsured, and therefore, Hull could not recover UM benefits under her liability policies. In reaching its decision, the circuit court relied on Hemerley v. American Family Mutual Insurance Co., 127 Wis.2d 304, 379 N.W.2d 860 (Ct.App.1985).

¶7 The plaintiff in Hemerley was injured while riding in a car which was not covered by liability insurance. See Hemerley, 127 Wis.2d at 306, 379 N.W.2d 860. The car's driver was not its owner, but the driver's operation of the vehicle was insured. See id. The plaintiff sought UM benefits under Wis. Stat. § 632.32(4) and her husband's insurance policy for injuries she alleged were caused by the driver's negligence. See id. The court of appeals held that the Hemerley plaintiff was not entitled to UM benefits under the policy language or § 632.32(4), and [222 Wis.2d 634] ruled that a vehicle is only an "uninsured motor vehicle" under § 632.32(4)(a)1 if neither its owner nor its operator is insured. 4 Id. at 305, 379 N.W.2d 860.

Page 866

¶8 Also relying on Hemerley, the court of appeals affirmed the circuit court's decision that Hull was not entitled to UM coverage. The court began by holding that although Hull's policies seemed to create three situations in which UM coverage exists--"when there is no ownership liability insurance, no maintenance liability insurance or no use liability insurance"--Hemerley required the court to rule that UM coverage exists "only when no coverage exists under any scenario." Hull v. State Farm Mut. Auto. Ins. Co., No. 97-0659, unpublished slip op. at 6-7, 1997 WL 700504 (Wis.Ct.App. Nov. 12, 1997). Consequently, the court concluded that Hull was not entitled to UM coverage under the language of her insurance policies because the driver's use of the truck was insured. Similarly, the court ruled that under Hemerley 's interpretation of Wis. Stat. § 632.32(4), the fact that the driver's use of the vehicle was insured required it to rule that Hull was not entitled to UM coverage under § 632.32(4).

¶9 The court of appeals rejected Hull's argument that the present case is distinguishable from Hemerley. The court reasoned that Hemerley governs this case because the relevant language of Wis. Stat. § 632.32(4) has not changed since Hemerley was decided in 1985. Also, in relation to the insurance policy, the court found that "the uninsured motorist provision in this case is, in essence, the equivalent of [222 Wis.2d 635] the uninsured motorist provision in Hemerley." Slip op. at 7. In the final paragraph of its decision, however, the court of appeals expressed its disagreement with Hemerley:

Hemerley itself acknowledged that "[t]he purpose [of § 632.32(4), Stats.] is to compensate an injured person when liability coverage is unavailable to the person who ought to pay...." Yet, the Hemerley conclusion seems at odds with the statutory goal. Instead, the decision seems, in our judgment, to defeat the purpose of § 632.32(4). As such, we believe that Hemerley was decided incorrectly.

Slip op. at 7 (citation omitted).

¶10 This court granted Hull's petition for review of the court of appeals' decision. At the same time, we granted State Farm's motion to supplement the record with a copy of the summons and complaint in a second suit, which Hull filed on June 16, 1997. 5 We now reverse the court of appeals.

II.

¶11 We begin by identifying the standard of review. In a declaratory judgment action, the granting or denying of relief is a matter within the discretion of the circuit court. United Fire & Cas. Co. v. Kleppe, 174 Wis.2d 637, 640, 498 N.W.2d 226 (1993). A reviewing court will uphold a discretionary decision as long as the [222 Wis.2d 636] circuit court's exercise of discretion was not erroneous. Id. at 640-41, 498 N.W.2d 226. An exercise of discretion is erroneous if it is based on an error of law. Id. at 641, 498 N.W.2d 226; Edland v. Wisconsin Physicians Serv. Ins. Co., 210 Wis.2d 638, 643, 563 N.W.2d 519 (1997); State v. Hutnik, 39 Wis.2d 754, 763, 159 N.W.2d 733 (1968).

¶12 This case involves the construction of insurance policy language and the interpretation of a statute. Both matters present questions of law. See Clark v. American Family Mutual Ins. Co., 218 Wis.2d 169, 173, 577 N.W.2d 790 (1998); Cardinal v. Leader Nat. Ins. Co., 166 Wis.2d 375, 382, 480 N.W.2d 1 (1992). Accordingly, this court reviews both issues de novo, although we benefit from the analyses of the circuit court and the court of appeals. See Clark, 218 Wis.2d at 173, 577 N.W.2d 790; Aiello v. Village of Pleasant Prairie, 206 Wis.2d 68, 70, 556 N.W.2d 697 (1996); Cardinal, 166 Wis.2d at 382, 480 N.W.2d 1.

Page 867

III.

¶13 The first issue is whether Hull is entitled to UM coverage pursuant to the terms of her two State Farm insurance policies. Interpretation of insurance policies is controlled by the rules of contract construction. General Cas. Co. v. Hills, 209 Wis.2d 167, 175, 561 N.W.2d 718 (1997); Donaldson v. Urban Land Interests, Inc., 211 Wis.2d 224, 230, 564 N.W.2d 728 (1997); Kremers-Urban Co. v. American Employers Ins., 119 Wis.2d 722, 735, 351 N.W.2d 156 (1984). In construing an insurance policy, the main goal is to determine and carry out the intentions of the parties. General Cas., 209 Wis.2d at 175, 561 N.W.2d 718; Kremers-Urban, 119 Wis.2d at 735, 351 N.W.2d 156. The court must interpret the policy [222 Wis.2d 637] language to mean what a reasonable person in the insured's position would understand it to mean. General Cas., 209 Wis.2d at 175, 561 N.W.2d 718; Kremers-Urban, 119 Wis.2d at 735, 351 N.W.2d 156.

¶14 When the meaning of a term in an insurance policy is plain, the court should apply the term in accordance with the "everyday meaning" which a lay person would ascribe to it, and should not turn to rules of construction or case law. Kremers-Urban, 119 Wis.2d at 735-36, 351 N.W.2d 156; see also Amidzich v. Charter Oak Fire Ins. Co., 44 Wis.2d 45, 170 N.W.2d 813 (1969). Words or phrases are ambiguous if they may be reasonably interpreted in more than one way....

To continue reading

Request your trial
82 practice notes
  • Hofflander v. St. Catherine's Hospital, Inc., Sentry Insurance, 2003 WI 77 (Wis. 7/1/2003), No. 00-2467.
    • United States
    • United States State Supreme Court of Wisconsin
    • July 1, 2003
    ...when our resolution of one issue disposes of a case, we will not address additional issues." Hull v. State Farm Mut. Auto. Ins. Co., 222 Wis. 2d 627, 640 n.7, 586 N.W.2d 863 (1998). Nonetheless, we feel compelled to address the court of appeals' handling of this issue. ¶ 103 Property owners......
  • Black v. City of Milwaukee, No. 2014AP400.
    • United States
    • Wisconsin Supreme Court
    • June 23, 2016
    ...Md. Arms Ltd. P'ship v. Connell, 2010 WI 64, ¶ 48, 326 Wis.2d 300, 786 N.W.2d 15 )); see also Hull v. State Farm Mut. Auto. Ins. Co., 222 Wis.2d 627, 640 n. 7, 586 N.W.2d 863 (1998) (“As a general rule, when our resolution of one issue disposes of a case, we will not address additional issu......
  • Fontana Builders, Inc. v. Assurance Co. of Am., No. 2014AP821.
    • United States
    • United States State Supreme Court of Wisconsin
    • June 29, 2016
    ...our resolution of one issue disposes of a case, we will not address additional issues.” (quoting Hull v. State Farm Mut. Auto. Ins. Co., 222 Wis.2d 627, 640 n. 7, 586 N.W.2d 863 (1998) )).All subsequent references to the Wisconsin Statutes are to the 2013–14 version unless otherwise indicat......
  • State v. Starks, No. 2010AP425.
    • United States
    • United States State Supreme Court of Wisconsin
    • July 12, 2013
    ...assist attorneys, defendants, and courts in a heavily-litigated area of law going forward. Cf. Hull v. State Farm Mut. Auto. Ins. Co., 222 Wis.2d 627, 640 n. 7, 586 N.W.2d 863 (1998) (noting that where one issue may be dispositive the court may still “consider additional issues which have b......
  • Request a trial to view additional results
83 cases
  • Hofflander v. St. Catherine's Hospital, Inc., Sentry Insurance, 2003 WI 77 (Wis. 7/1/2003), No. 00-2467.
    • United States
    • United States State Supreme Court of Wisconsin
    • July 1, 2003
    ...when our resolution of one issue disposes of a case, we will not address additional issues." Hull v. State Farm Mut. Auto. Ins. Co., 222 Wis. 2d 627, 640 n.7, 586 N.W.2d 863 (1998). Nonetheless, we feel compelled to address the court of appeals' handling of this issue. ¶ 103 Property owners......
  • Black v. City of Milwaukee, No. 2014AP400.
    • United States
    • Wisconsin Supreme Court
    • June 23, 2016
    ...Md. Arms Ltd. P'ship v. Connell, 2010 WI 64, ¶ 48, 326 Wis.2d 300, 786 N.W.2d 15 )); see also Hull v. State Farm Mut. Auto. Ins. Co., 222 Wis.2d 627, 640 n. 7, 586 N.W.2d 863 (1998) (“As a general rule, when our resolution of one issue disposes of a case, we will not address additional issu......
  • Fontana Builders, Inc. v. Assurance Co. of Am., No. 2014AP821.
    • United States
    • United States State Supreme Court of Wisconsin
    • June 29, 2016
    ...our resolution of one issue disposes of a case, we will not address additional issues.” (quoting Hull v. State Farm Mut. Auto. Ins. Co., 222 Wis.2d 627, 640 n. 7, 586 N.W.2d 863 (1998) )).All subsequent references to the Wisconsin Statutes are to the 2013–14 version unless otherwise indicat......
  • State v. Starks, No. 2010AP425.
    • United States
    • United States State Supreme Court of Wisconsin
    • July 12, 2013
    ...assist attorneys, defendants, and courts in a heavily-litigated area of law going forward. Cf. Hull v. State Farm Mut. Auto. Ins. Co., 222 Wis.2d 627, 640 n. 7, 586 N.W.2d 863 (1998) (noting that where one issue may be dispositive the court may still “consider additional issues which have b......
  • 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