Landvatter v. Globe Sec. Ins. Co.

• Decision Date: 09 December 1980
• Docket Number: No. 79-1476,79-1476
• Citation: 100 Wis.2d 21,300 N.W.2d 875
• Parties: Pearl M. LANDVATTER, Plaintiff-Respondent, v. GLOBE SECURITY INSURANCE COMPANY, a/k/a Security Mutual Casualty Company, Defendant-Appellant.
• Court: Wisconsin Court of Appeals

Page 875

300 N.W.2d 875

100 Wis.2d 21

Pearl M. LANDVATTER, Plaintiff-Respondent, v. GLOBE SECURITY INSURANCE COMPANY, a/k/a Security Mutual Casualty Company, Defendant-Appellant.

No. 79-1476.

Court of Appeals of Wisconsin.

Submitted on Briefs, Sept. 10, 1980.

Opinion Released Dec. 9, 1980.

Opinion Filed Dec. 9, 1980.

Review Denied. ^*

Daniel R. Doucette and Christine K. Ohm and Kluwin, Dunphy, Hankin & McNulty, Milwaukee, for defendant-appellant.

Joseph J. Welcenbach and Charlton, Welcenbach & Widmann, Milwaukee, for plaintiff-respondent.

Before DECKER, C. J., MOSER, P. J., and CANNON, J.

CANNON, Judge.

Defendant appeals from a declaratory judgment in which the trial court held that a reducing clause contained in the uninsured motorist section of a policy issued by Security Mutual Casualty Company (Security) was prohibited under sec. 631.43(1), Stats. (1977), precluding the reduction of the full amount of uninsured motorist benefits under plaintiff's policy by payment made under other uninsured motorist coverage. We affirm.

The parties stipulated to the following facts. On February 5, 1977, the plaintiff was injured when the vehicle in which she was a passenger was involved in an accident with an uninsured motorist. For purposes of the declaratory judgment action, it was agreed that the plaintiff's damages exceeded $45,000. The vehicle in which the plaintiff was riding was insured by Allstate Insurance Company (Allstate). The Allstate policy provided for $15,000 of uninsured motorist coverage. Prior to the commencement of the plaintiff's declaratory judgment action, Allstate paid plaintiff $15,000 under its uninsured motorist coverage.

The plaintiff was also insured under a policy issued by Security which provided $30,000 of uninsured motorist benefits. Security's policy contained a "reducing clause." This clause provided that any amount payable under Security's policy would be reduced by the monies paid by the other insurance company's uninsured motorist coverage. It was stipulated that if the reducing clause was valid, Security's $30,000 uninsured motorist coverage would be reduced by the $15,000 paid by Allstate.

The plaintiff contends and the trial court ordered that the plaintiff is entitled to both the $15,000 paid by Allstate, and the entire $30,000 uninsured motorist coverage from Security. The trial court reasoned that the reducing clause was prohibited by sec. 631.43(1), Stats., and ordered Security to pay the plaintiff the entire $30,000 of uninsured motorist benefits.

The sole issue on appeal is: Was the reducing clause contained in the uninsured motorist section of the plaintiff's automobile insurance policy valid and enforceable? We hold that the reducing clause was invalid and unenforceable and, accordingly, we affirm. ¹

The issue of stacking uninsured motorist coverage was raised for the first time in Wisconsin in Leatherman v. American Family Mutual Insurance Co., 52 Wis.2d 644, 190 N.W.2d 904 (1971). The plaintiff in Leatherman was a passenger in a vehicle which was involved in an accident with an uninsured motorist. At the time of the accident, uninsured motorist coverage was not required by statute. The host driver's carrier paid its $10,000 uninsured motorist policy limits. The plaintiff brought suit against his own insurer under his uninsured motorist coverage. The plaintiff's policy contained a reducing clause. The plaintiff argued that the reducing clause was ambiguous and contrary to public policy. Our supreme court determined that the language was unambiguous. Id. at 649-50 190 N.W.2d at 906-07. The public policy argument was met by holding that any prohibition of reducing clauses was to be made by legislative mandate and not judicial fiat. Id. at 650-51, 190 N.W.2d at 907.

The same issue was presented in Scherr v. Drobac, 53 Wis.2d 308, 193 N.W.2d 14 (1972), after uninsured motorist coverage became mandatory. The court determined that sec. 204.30(5)(a), Stats. (1973) (predecessor to sec. 632.32, Stats. (1977)), was devoid of any effect on the validity of the reducing clause found in the plaintiff's uninsured motorist coverage. Id. at 310-11, 193 N.W.2d at 15.

In Nelson v. Employers Mutual Casualty Co., 63 Wis.2d 558, 217 N.W.2d 670 (1974), the plaintiff sought to stack the coverages of two uninsured motorist policies. The court denied the stacking, indicating that the Leatherman and Scherr decisions controlled. Id. at 567, 217 N.W.2d at 674. The 1973 amendment to sec. 204.30(5) (a), Stats. ² was not construed, and was mentioned solely because the plaintiff attempted to argue that this amendment only set a minimum recovery from each policy. Id. at 569, 217 N.W.2d at 675. The court pointed out that the uninsured motorist statute only guaranteed recovery equivalent to that which would have been afforded if the uninsured motorist had been minimally insured. Id. at 569, 217 N.W.2d at 675.

The language of the 1973 amendment was later deleted. This deletion was based on the legislature's belief that the amendment added nothing to the meaning of the statute. Committee Comment to sec. 632.32(3), Stats., sec. 42, ch. 375, Laws of 1975.

Beginning in Leatherman and continuing throughout the uninsured motorist coverage cases, the supreme court has reiterated that reducing clauses are not violative of public policy and, therefore, their total prohibition must emanate from the legislature. The trial court found such a legislative pronouncement in sec. 631.43(1), Stats. which provides:

Other Insurance Provisions. (1) General. When 2 or more policies promise to indemnify an insured against the same loss, no "other insurance" provisions of the policy may reduce the aggregate protection of the insured below the lesser of the actual insured loss suffered by the insured or the total indemnification promised by the policies if there were no "other insurance" provisions. The policies may by their terms define the extent to which each is primary and each excess, but if the policies contain inconsistent terms on that point, the insurers shall be jointly and severally liable to the insured on any coverage where the terms are inconsistent, each to the full amount of coverage it provided. Settlement among the insurers shall not alter any rights of the insured.

Section 631.43(1), Stats. was created by sec. 41, ch. 375, Laws of 1975, subsequent to any of the case law discussed earlier.

The question before us is whether secs. 631.43 and 632.32, Stats., read together create an ambiguity which would subject them to statutory construction. When statutes are in pari materia, they should be read together and harmonized, if possible. State v. Walker, 75 Wis.2d 93, 102, 248 N.W.2d 410, 414 (1977). However, their interaction may produce an ambiguous result where well-informed persons could reach two or more conclusions as to their meaning. Id. We find such an ambiguity here.

Where statutes are...