Rebernick v. Wausau General Ins. Co.

• Decision Date: 30 March 2006
• Docket Number: No. 2004AP487.,2004AP487.
• Parties: Dale REBERNICK, Sandra Rebernick and Gregory Rebernick by his Guardian ad Litem, Plaintiffs-Appellants-Petitioners, v. WAUSAU GENERAL INSURANCE COMPANY, Defendant, American Family Mutual Insurance Company, Defendant-Respondent.
• Court: Wisconsin Supreme Court

Page 621

711 N.W.2d 621

2006 WI 27

Dale REBERNICK, Sandra Rebernick and Gregory Rebernick by his Guardian ad Litem, Plaintiffs-Appellants-Petitioners, v. WAUSAU GENERAL INSURANCE COMPANY, Defendant, American Family Mutual Insurance Company, Defendant-Respondent.

No. 2004AP487.

Supreme Court of Wisconsin.

Argued January 10, 2006.

Decided March 30, 2006.

For the plaintiffs-appellants-petitioners there were briefs by Thomas A. Ogorchock and Miller & Ogorchock, S.C., Milwaukee and oral argument by Thomas A. Ogorchock.

For the defendant-respondent there was a brief by Emile H. Banks, Jr., Vicki L. Arrowood, and Emile Banks & Associates, LLC, Milwaukee, and oral argument by Emile H. Banks, Jr.

An amicus curiae brief was filed by Beth Ermatinger Hanan and Gass Weber Mullins LLC, Milwaukee, on behalf of Wisconsin Insurance Alliance, Civil Trial Counsel of Wisconsin, and Property Casualty Insurers Association of America.

An amicus curiae brief was filed by Lynn R. Laufenberg and Laufenberg & Hoefle, S.C., Milwaukee, on behalf of the Wisconsin Academy of Trial Lawyers.

¶ 1 ANN WALSH BRADLEY, J

Dale and Sandra Rebernick, along with their minor son, Gregory, petition for review of a published court of appeals decision affirming a circuit court order dismissing their claim against their insurer, American Family Mutual Insurance Company.¹ The Rebernicks assert that they are entitled to retroactively purchase underinsured motorist (UIM) coverage under their umbrella policy because American Family failed to notify them of the availability of UIM coverage under the policy pursuant to Wis. Stat. § 632.32(4m) (2003-04).²

¶ 2 We determine that American Family was required to notify the Rebernicks of the availability of UIM coverage under their umbrella policy pursuant to § 632.32(4m). However, we also determine that, given the circumstances of this case, American Family provided notice to the Rebernicks of the availability of UIM coverage under their umbrella policy. Thus, we need not address what remedy would be appropriate had American Family failed to notify the Rebernicks of the availability of UIM coverage. We affirm the court of appeals.

I

¶ 3 The facts are undisputed for purposes of our decision. Dale Rebernick was seriously and permanently injured when the lawn mower he was riding was hit by a car. The driver of the car had $25,000 in liability insurance, which was paid to Rebernick. In addition, Rebernick collected the $100,000 limits of UIM coverage under the Rebernicks' automobile insurance policy with American Family.

¶ 4 The Rebernicks also had a $1 million umbrella policy through American Family that required them to maintain their underlying automobile policy as primary insurance. They sued American Family for additional funds under the umbrella policy. Although the terms of the umbrella policy expressly excluded UIM coverage, the Rebernicks asserted that they were entitled to reformation of the policy because American Family had failed to provide them with notice of the availability of UIM coverage for that policy. Such notice, they asserted, was required under § 632.32(4m).³

¶ 5 American Family moved for summary judgment, asserting that the notice requirements of § 632.32(4m) apply only to primary automobile insurance polices. The Rebernicks countered with a motion for declaratory relief. In addressing the motions, the circuit court noted that the purpose of the statute is to ensure that all insureds know of the availability of UIM coverage. It observed that the Rebernicks had purchased UIM coverage in their primary automobile policy and that they were not alleging American Family failed to provide the proper notice under § 632.32(4m) with respect to that policy. Additionally, the court noted that the Rebernicks' umbrella policy states that it does not provide UIM coverage unless the policy is endorsed to provide such coverage. Thus, the court reasoned, the Rebernicks were aware of the availability of UIM coverage under their umbrella policy.

¶ 6 The circuit court concluded that the purpose of the notice provisions in § 632.32(4m) was fulfilled and that the Rebernicks were not entitled to UIM coverage under their umbrella policy. It therefore granted American Family's motion, denied the Rebernicks' motion, and dismissed the Rebernicks' claim against American Family.

¶ 7 The Rebernicks appealed. In a split decision, the court of appeals affirmed the circuit court under a somewhat different rationale. The court of appeals majority and dissent agreed that § 632.32(4m) applied to the Rebernicks' umbrella policy under the plain language of § 632.32(1) and (4m), thereby requiring American Family to notify the Rebernicks of the availability of UIM coverage in their umbrella policy.⁴ The majority of the court of appeals further determined that the Rebernicks were not entitled to reformation of the umbrella policy because they knew both (1) that their umbrella policy could give them UIM coverage via an endorsement to that policy and (2) what UIM coverage encompassed. The Rebernicks petitioned for review.

II

¶ 8 The central issue before us is whether American Family was required to notify the Rebernicks of the availability of UIM coverage under their umbrella policy pursuant to § 632.32(4m). In order to address this issue, we must interpret and apply statutory provisions to undisputed facts. This issue presents a question of law subject to independent appellate review. Phelps v. Physicians Ins. Co., 2005 WI 85, ¶ 25, 282 Wis.2d 69, 698 N.W.2d 643.

¶ 9 We determine that American Family was required to notify the Rebernicks of the availability of UIM coverage under their umbrella policy pursuant to § 632.32(4m). Our determination is based on the language of § 632.32. At the same time, it is supported by the history and purpose of § 632.32(4m), along with a provision in the administrative code.

¶ 10 In addition, we determine that, given the circumstances of this case, American Family provided notice to the Rebernicks of the availability of UIM coverage under their umbrella policy. Thus, we need not address what remedy would be appropriate had American Family failed to notify the Rebernicks of the availability of UIM coverage.

III

¶ 11 The Rebernicks argue that § 632.32(4m), read together with the "scope clause" in § 632.32(1), makes clear that the notice provisions in § 632.32(4m) apply to their umbrella policy. In addressing their argument we begin, as we must, with the relevant statutory language.⁵

¶ 12 Section 632.32(1) provides as follows:

Scope. Except as otherwise provided, this section applies to every policy of insurance issued or delivered in this state against the insured's liability for loss or damage resulting from accident caused by any motor vehicle. . . .

Thus, § 632.32(1) generally delineates the types of insurance policies to which § 632.32 applies. However, it also qualifies the scope of § 632.32's applicability "as otherwise provided."

¶ 13 Section 632.32(4m), in turn, contains language describing the types of policies to which the UIM notice requirements apply. This language is different from the language generally delineating the types of policies to which § 632.32 applies. Specifically, § 632.32(4m) applies to an insurer writing polices that "insure with respect to a motor vehicle registered or principally garaged in this state against loss resulting from liability imposed by law for bodily injury or death suffered by a person arising out of the ownership, maintenance or use of a motor vehicle."

¶ 14 In an opinion also released today, Rocker v. USAA Casualty Insurance Co., 2006 WI 26, ¶ 37, ___ Wis.2d ___, 711 N.W.2d 634, this court explained how the scope clause in § 632.32(1) works in relation to other subsections of § 632.32:

According to Wis. Stat. § 632.32(1), "[e]xcept as otherwise provided, this section applies to every policy of insurance issued or delivered in this state against the insured's liability for loss or damage resulting from accident caused by any motor vehicle. . . ." Hence, the broad scope of the entire section is dependent upon whether a policy includes motor vehicle coverage, but each subsection can include provisions which exempt certain coverages from the scope as defined in § 632.32(1). Therefore, in any particular case, it is improper to conclude that, because one subsection has been held to apply to a certain type of policy, all the other subsections must be held to apply as well. Each subsection can provide its own exemptions under the statutory framework.

Thus, the court in Rocker determined, "[t]he language of § 632.32(1) unambiguously requires every insurance policy that provides motor vehicle liability coverage to meet the requirements of the other sections of the omnibus statute, unless otherwise provided." Id., ¶ 46; see also Heritage Mut. Ins. Co. v. Wilber, 2001 WI App 247, ¶ 17, 248 Wis.2d 111, 635 N.W.2d 631 (general liability policy fell within § 632.32(1)'s scope provision when it provided automobile liability coverage).⁶

¶ 15 The Rebernicks' umbrella policy includes automobile liability coverage. For example, the policy covers an insured's liability for an accident causing personal injury or property damage arising out of the use of a car the insured owns. Thus, there can be no real dispute that the Rebernicks' umbrella policy falls within the general scope of § 632.32(1). In other words, there can be no real dispute that the policy was "issued . . . against the insured's liability for loss or damage resulting from accident caused by any motor vehicle." Wis. Stat. § 632.32(1).

¶ 16 Consistent with Rocker, however, we must also examine the language in § 632.32(4m), asking whether that subsection of the statute includes any provisions that would exempt the Rebernicks' umbrella policy from the scope of § 632.32 as defined in § 632.32(1). We therefore return to the language of § 632.32(4m), which we read to confine that...