Moreno v. Amer. Family Mutual, 99-2443P19_404

Decision Date16 August 2000
Docket Number99-2443P19_404
PartiesNOTICE This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. 808.10 and Rule 809.62. Judith Moreno and Jesse Moreno, Plaintiffs-Appellants, Wisconsin Physicians Service Insurance Corporation and City of Wauwatosa, Involuntary-Plaintiffs, v. American Family Mutual Insurance Company, Defendant-Respondent.P19_404 STATE OF WISCONSIN IN COURT OF APPEALS DISTRICT II DECISION DATED AND FILED:
CourtWisconsin Court of Appeals

APPEAL from a judgment of the circuit court for Waukesha County: PATRICK L. SNYDER, Judge. Affirmed.

Before Brown, P.J., Nettesheim and Snyder, JJ.

1. SNYDER, J.

Judith and Jesse Moreno appeal from a judgment entered in favor of American Family Mutual Insurance Company and dismissing their claim for benefits under their policy's underinsured motorist (UIM) provision. The Morenos argue that coverage is triggered because the policy is ambiguous as to the per person limits of UIM coverage and, alternatively, because the tortfeasor's $150,000 per person liability limits must be compared with the Morenos' per accident limits of $300,000 as required by the definition of "underinsured motor vehicle."

2. We conclude that the Morenos' arguments are without merit. The definition of "underinsured motor vehicle" is unambiguous; its plain meaning requires a comparison of the tortfeasor's $150,000 liability limits to the Morenos' per person liability limits of $100,000. Because the tortfeasor's liability limits were greater than the Morenos' UIM limits, no coverage is afforded. We therefore affirm the circuit court's judgment.

FACTS

3. The facts are undisputed. On July 31, 1996, Judith Moreno was driving a vehicle insured by American Family when she was struck by Naomi Werner. Judith suffered severe injuries. She and her husband subsequently sought remuneration from Werner's automobile insurer, also American Family.1 The parties stipulated that Werner was 100% causally negligent for Judith's injuries. The liability limits for Werner's policy were $150,000 per person. In October 1997, Werner reached a settlement with the Morenos whereby American Family paid them the liability limits on Werner's policy. The Morenos' damages, however, exceeded Werner's liability coverage.2

4. The Morenos then sought UIM coverage under their own policy. This policy provided UIM coverage of $100,000 per person and $300,000 per accident. American Family denied the Morenos' request, so they filed suit. American Family moved for summary judgment, arguing that UIM coverage was not triggered because its per person UIM liability limit of $100,000 was less than the $150,000 paid under Werner's policy. The circuit court agreed and dismissed the Morenos' action.

DISCUSSION

5. We review decisions on summary judgment de novo, applying the same methodology as the circuit court. See Tower Ins. Co. v. Carpenter, 205 Wis.2d 365, 369, 556 N.W.2d 384 (Ct. App. 1996). Summary judgment is proper if there are no disputed issues of fact and one party is entitled to judgment as a matter of law. See Wis. Stat. 802.08(2) (1997-98).

6. The interpretation of an insurance contract is a question of law which we review de novo. See Katze v. Randolph & Scott Mut. Fire Ins. Co., 116 Wis. 2d 206, 212, 341 N.W.2d 689 (1984). 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 understood the policy to mean. See id. Whether the policy's language is ambiguous is a question of law. See id. Ambiguity exists if the policy's words or phrases are susceptible to more than one reasonable interpretation. See Smith v. Atlantic Mut. Ins. Co., 155 Wis.2d 808, 811, 456 N.W.2d 597 (1990). Any ambiguities should be construed in favor of coverage. See id. Absent an ambiguity, the plain language of the policy controls. See Davis, 214 Wis.2d at 298.

7. The endorsement to the declarations page of the Morenos' policy defined an "underinsured motor vehicle" as a motor vehicle which is insured by a liability bond or policy at the time of the accident which provides bodily injury liability limits less than the limits of liability of this Underinsured Motorists coverage.

In other words, a tortfeasor's vehicle is an underinsured motor vehicle if the limits of liability for the insured's UIM coverage exceed the tortfeasor's policy limits. In this case, Werner's liability limits were $150,000 and the Morenos' UIM policy limits for a single person were $100,000. The single person limit of $100,000 applies because Judith was the only insured under the Morenos' policy who sustained bodily injury in the July 31, 1996 accident. Therefore, based on the definition above, Werner's vehicle is not underinsured because her policy limits exceeded the Morenos' UIM liability limits for a single person.

8. This conclusion is in keeping with our supreme court's decision in Smith. There, Smith had $50,000 of UIM coverage and the tortfeasor had a liability limit of $50,000 which was paid in full to Smith. The court determined that the definition of "underinsured motor vehicle" was unambiguous. That definition stated that an "underinsured motor vehicle" is a motor vehicle "to which a bodily injury liability bond or policy applies at the time of the accident but its limit for bodily injury liability is less than the limit of liability for this coverage." Smith, 155 Wis. 2d at 811. The court held that the plain meaning of the definition did not permit Smith to recover under her UIM coverage because the tortfeasor did not have policy limits less than Smith's UIM coverage. In reaching its conclusion, the court explained that because it decided "in the first instance" that the tortfeasor's vehicle was not an underinsured motor vehicle, it need not reach an issue pertaining to the policy's reducing clause. See id. at 814.

9. Smith informs us that the first decision to be made when an insured claims UIM coverage is whether the tortfeasor's vehicle fits the definition of an "underinsured motor vehicle." Where that definition requires a comparison of an insured's UIM policy limits to the tortfeasor's policy limits, a court must determine coverage before "analyz[ing] other provisions in the policy and their potential effects on UIM coverage." Taylor v. Greatway Ins. Co., 2000 WI App 64, 11, 233 Wis. 2d 703, 608 N.W.2d 722.

10. The "underinsured motor vehicle" definition here is substantively the same as that in Smith; both prescribe a comparison of an insured's UIM policy limits to the tortfeasor's policy limits. Having made this comparison above, we know that Werner's policy limits exceeded the Morenos'. The Morenos nonetheless urge us to consider other policy language, namely, the "limits of liability" provision. This provision, they assert, muddies the waters of coverage so that an ambiguity is created. Because there is an ambiguity, the...

To continue reading

Request your trial

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