Kenison v. Wellington Ins. Co.

• Court: Wisconsin Court of Appeals
• Writing for the Court: CANE
• Citation: Kenison v. Wellington Ins. Co., 582 N.W.2d 69, 218 Wis.2d 700 (Wis. App. 1998)
• Decision Date: 21 April 1998
• Docket Number: No. 97-1758,97-1758
• Parties: Jerald M. KENISON and Darlene A. Kenison, Plaintiffs-Respondents, d v. WELLINGTON INSURANCE COMPANY, Defendant-Appellant, Beate Bopp, Mr. Submarine, Ltd., Wisconsin Mutual Insurance Company and Employers Health Insurance Company, Defendants.

Page 69

582 N.W.2d 69

218 Wis.2d 700

Jerald M. KENISON and Darlene A. Kenison Plaintiffs-Respondents, ^d v. WELLINGTON INSURANCE COMPANY, Defendant-Appellant Beate Bopp, Mr. Submarine, Ltd., Wisconsin Mutual Insurance Company and Employers Health Insurance Company, Defendants.

No. 97-1758.

Court of Appeals of Wisconsin.

Submitted on Briefs March 16, 1998.

Opinion Released April 21, 1998.

Opinion Filed April 21, 1998.

On behalf of the defendant-appellant, the cause was submitted on the briefs of Bradley M. Jones of Meagher & Geer P.L.L.P. of Minneapolis, MN.

On behalf of the plaintiffs-respondents, the cause was submitted on the brief of Boad S. Swanson and Toby E. Marcovich of Marcovich, Cochrane & Milliken of Superior.

Before CANE, P.J., and MYSE and HOOVER, JJ.

CANE, Presiding Judge.

Wellington Insurance Company appeals a nonfinal order denying its motion for summary judgment. ¹ Wellington contends it is entitled to judgment as a matter of law because Jerald and Darlene Kenison cannot maintain a direct action against it under Wisconsin statutes because Wellington did not deliver or issue for delivery a policy of insurance in this state. We agree and therefore reverse the trial court's denial of Wellington's motion for summary judgment.

The facts of the case are not disputed. Jerald Kenison sustained injuries in an automobile accident that occurred in Superior, Wisconsin, in September 1991, between himself and Beate Bopp, an employee of Mr. Submarine, Ltd., a Canadian corporation insured by Wellington. Wellington is also a Canadian company. Neither Mr. Submarine nor Wellington conducts any business in Wisconsin or any other state in the United States. While Bopp was delivering a car from one Canadian Mr. Submarine location to another, she drove through Wisconsin and was involved in the accident with Kenison.

Kenison filed a summons and complaint in September 1994, naming as defendants Bopp, Mr. Submarine, and Wellington. The only party timely served, however, was Wellington, and the actions against Bopp and Mr. Submarine were dismissed with prejudice.

Wellington moved for summary judgment on the ground it was not subject to direct action under §§ 632.24 and 803.04(2)(a), STATS. ² Specifically, it argued that § 632.24 was inapplicable by virtue of § 631.01, STATS., ³ since it neither delivered nor issued for delivery a policy of insurance in Wisconsin. The trial court concluded that although § 632.24 should be considered in light of § 631.01, a direct action was nevertheless proper against Wellington under § 631.01(1)(c) because § 803.04(2)(a) allowed direct action against an insurer if the policy is issued outside Wisconsin as long as the accident occurred in Wisconsin. Wellington argues the trial court's interpretation of § 631.01(1)(c) erroneously expands the basis for direct action to include policies issued outside Wisconsin based on the language of § 803.04(2)(a). We agree.

We review a denial of a motion for summary judgment de novo, employing the same methodology as the trial court. Green Spring Farms v. Kersten, 136 Wis.2d 304, 315, 401 N.W.2d 816, 820 (1987). Summary judgment is appropriate when there is no genuine issue of material fact present and the moving party is entitled to judgment as a matter of law. Section 802.08(2), STATS.; Kersten, 136 Wis.2d at 317, 401 N.W.2d at 821.

To resolve this case, we must interpret § 631.01, STATS., to determine whether it limits the application of § 632.24, STATS., to policies of insurance delivered or issued for delivery in Wisconsin. This is a question of law we review de novo without deference to the trial court's determination. Kluth v. General Cas. Co., 178 Wis.2d 808, 815, 505 N.W.2d 442, 445 (Ct.App.1993). The purpose of statutory construction is to determine legislative intent. Id. We begin by examining the plain language of the statute, and if the language is not ambiguous, we apply the plain meaning of the statute to the facts before us. See Zimmerman v. DHSS, 169 Wis.2d 498, 504-05, 485 N.W.2d 290, 292 (Ct.App.1992). Only if the statute is ambiguous do we attempt to discern legislative intent by looking beyond the language to the scope, history, context, subject matter and object of the statute. Id.

Wellington contends the clear, unambiguous language of § 631.01(1), STATS., limits the application of statutes in chs. 631 and 632, STATS., to policies of insurance delivered or issued for delivery in Wisconsin. It asserts § 631.01(1) sets a threshold for application of § 632.24, STATS., and argues that because it is undisputed that Wellington did not deliver or issue for delivery the underlying policy in Wisconsin, Kenison has no viable direct action against it.

Section 631.01(1), STATS., provides:

Application of statutes. (1) GENERAL. This chapter and ch. 632 apply to all insurance policies and group certificates delivered or issued for delivery in this state, on property ordinarily located in this state, on persons residing in this state when the policy or group certificate is issued, or on business operations in this state, except:

(a) As provided in ss. 600.01 and 618.42;

(b) On business operations in this state if the contract is negotiated outside this state and if the operations in this state are incidental or subordinate to operations outside this state, unless the contract is for a policy of insurance to cover a warranty, as defined in s. 100.205(1)(g), in which case the provisions set forth in sub. (4m) apply; and

(c) As otherwise provided in the statutes. (Emphasis added.)

The plain language of § 631.01(1) provides that chs. 631 and 632 apply to policies delivered or issued for delivery in Wisconsin, and lists three categories where chs. 631 and 632 do not apply. The exceptions to § 631.01 do not expand the application of chs. 631 and 632; rather, they further limit the application of those chapters. Nowhere in § 631.01(1) does the language address the applicability of these two chapters to policies delivered or issued for delivery in a place other than Wisconsin.

Wellington also asserts that the case law addressing direct action issues since § 631.01(1), STATS., became effective June 22, 1976, ⁴ supports the conclusion that a direct action cannot be maintained against it. In Decade's Monthly Income & Appreciation Fund v. Whyte & Hirschboeck, S.C., 173 Wis.2d 665, 495 N.W.2d 335 (1993), the court decided whether a direct action could be maintained against an insurer who issues a policy of indemnity insurance rather than liability insurance. In holding that direct action was available, the court recounted the development of the direct action suit in Wisconsin, and reiterated the analysis that a direct action is evaluated in light of the statutory scheme including the substantive right provided in § 632.24, STATS., and the procedural right set forth in § 803.04(2)(a), STATS. See id. at 678, 495 N.W.2d at 340. Wellington correctly notes that Decade's did not deal with the "threshold" question of applicability of § 632.24 because the indemnity policy in question was apparently delivered or issued for delivery in Wisconsin.

In further support of its contentions, Wellington cites Bielke v. Iowa Nat'l Mut. Ins. Co., 451 F.Supp. 376 (E.D.Wis.1978). In Bielke, Wisconsin residents were injured in an accident in Iowa and attempted to bring a direct action against Iowa National Mutual Insurance Company, a company which had its principal place of business in Iowa and delivered the underlying policy to the insured in Colorado. The court held that plaintiffs could not maintain their action under § 803.04(2)(a), STATS., because the accident did not occur in Wisconsin. Plaintiffs then argued that even if § 803.04(2)(a) would bar their suit, they could still proceed under § 632.24, STATS. Without addressing Wisconsin's practice of considering §§ 632.24 and 803.04(2)(a) conjointly, ⁵ the court concluded plaintiffs could not maintain a direct action under § 632.24 because § 631.01(1), STATS., provides that "Chapters 631 and 632 of the Wisconsin Statutes apply only to insurance policies delivered or issued for delivery in Wisconsin." ⁶ Bielke, 451 F.Supp. at 378.

Kenison contends he has met both the substantive and procedural requirements for maintaining a direct action against Wellington and argues that § 631.01(1), STATS., does not limit the application of § 632.24, STATS., because § 631.01(1)(c) provides for exceptions "as otherwise provided in the statutes." Section 631.01(1)(c). Kenison argues that there are no cases supporting the inclusion of § 631.01(1) in the analysis of direct actions against insurers; that applying § 631.01(1) as a limitation on § 632.24 essentially abrogates § 803.04(2)(a), STATS., which specifically allows for joinder of an insurer when an accident occurs in Wisconsin even though the policy of insurance was issued outside the state; and that Bielke is distinguishable from the case at hand. Kenison's arguments are unpersuasive.

First, no Wisconsin cases concerned with direct action decided after the passage of § 631.01, STATS., have considered whether § 632.24, STATS., applies to insurers who deliver or issue for delivery insurance policies outside Wisconsin. ⁷ Kenison reasons that because the body of direct action case law focuses on the tandem analysis of §§ 632.24 and 803.04(2)(a), ⁸ he need only demonstrate that his action against Wellington is based in negligence to fulfill the substantive requirements of § 632.24, and that he may name Wellington as a proper party defendant under § 803.04(2)(a), which provides in pertinent part:

In any action for damages caused by negligence, any insurer which has an interest in the outcome of such controversy adverse to the plaintiff or any of the parties to such controversy ... is by this section made a proper party defendant in any action brought by plaintiff in this state on account of any claim against the insured. If the policy of insurance was issued...