Redmond v. Sirius Int'l Ins. Corp.
| Decision Date | 07 August 2012 |
| Docket Number | Case No. 12-C-587 |
| Parties | RYAN M. REDMOND, Plaintiff, v. SIRIUS INTERNATIONAL INSURANCE CORP., Defendant. |
| Court | U.S. District Court — Eastern District of Wisconsin |
The present action was initially filed by Ryan M. Redmond ("Redmond") in Waukesha County Circuit Court on May 14, 2012 but was removed to this court on June 8, 2012. (Docket No. 1.) On June 14, 2012, the defendant, Sirius International Insurance Corporation ("Sirius"), filed its answer and counterclaim, (Docket No. 5), and a motion to transfer this action to the Southern District of Indiana, (Docket No. 6). In early July, the plaintiff filed a motion seeking to strike the defendant's answer, counterclaim, and motion to transfer, (Docket No. 10), a motion seeking the defendant be ordered to post a bond, (Docket No. 10), a response to the defendant's motion to transfer, (Docket No. 13), and an answer to the defendant's counterclaim, (Docket No. 12). On July 12, 2012, Sirius responded to Redmond's motions to strike and to post bond, (Docket No. 17), and replied in support of its motion to transfer, (Docket No. 18). On July 16, 2012, the court entered an order permitting the plaintiff to file a sur-reply to the defendant's motion to transfer. Redmond subsequently replied in support of his motions to strike and to have the defendant post bond (albeitfour days late and without any explanation for its tardiness), (Docket No. 21), and submitted a sur-reply regarding the defendant's motion to transfer, (Docket No. 20). All parties have consented to the full jurisdiction of a magistrate judge. (Docket Nos. 9, 16.)
Redmond had been insured by Sirius since October 2006, and on August 25, 2010 he electronically submitted a form to renew his travel medical insurance for the period October 20, 2010 to October 20, 2011. (Docket No. 14, ¶¶3-5.) At this time, Redmond avers he was residing at his mother's home in Delafield, Wisconsin. (Docket No. 14, ¶9.) He listed this as his residence on the renewal form and as the billing address for the credit card he used to pay the premium. (Docket No. 7-1.) This application was processed by Community Insurance Agency, Inc. ("Community") in Northbrook, Illinois. (Docket No. 7-5, ¶¶3-5.) The application was then forwarded to International Medical Group, Inc. ("IMG"), which is the managing general underwriter and plan administrator for Sirius. (Docket No. 7-5, ¶5.) Community received the policy from IMG on August 27, 2010, and it is Community's practice to mail the policy to the insured that same day or, if necessary, the next day. (Docket No. 7-1, ¶¶6-7.)
On August 29, 2010, Redmond left his mother's home in Delafield, Wisconsin and drove to Brattleboro, Vermont where he attended orientation classes on August 31, 2010 for the master's degree program in international management at the School of International Training. (Docket No. 14, ¶10.) Redmond attended the School of International Training for the 2010-2011 academic year. (Docket No. 14, ¶11.) Redmond listed a Vermont address as his "mail forwarding address" on the renewal application and as his mailing address on the "annual statement of residency intent" included with the renewal application. (Docket No. 7-1.) When classes ended on May 20, 2011, he returned to Wisconsin. (Docket No. 14, ¶11.)
On July 2, 2011, Redmond was severely injured in Grand Teton National Park in Wyoming. (Docket No. 1-1, ¶24.) He was initially treated at the Eastern Idaho Regional Medical Center in Idaho, and on July 26, 2011, he was transferred to Sacred Heart Rehabilitation Institute in Milwaukee, Wisconsin. (Docket No. 1-1, ¶26.) He remained at Sacred Heart's Coma Recovery Program until September 14, 2011. (Docket No. 1-1, ¶26.) Redmond sought coverage totaling nearly $600,000.00 from Sirius, which Sirius denied. (Docket No. 1-1, ¶¶28-36.) This action followed.
The court must first assess whether Sirius has properly appeared in this action. Under Wisconsin law, an insurer that is not authorized to do business in Wisconsin generally must post a bond before filing any pleadings in a court action. Wis. Stat. § 618.47. There is no dispute that Sirius is not authorized to do business in Wisconsin. In Redmond's view, the court should strike all of Sirius' filings in this action and order it to post a $2 million bond before allowing this matter to proceed.
Sirius responds that it is not required to post bond in this action because under Wis. Stat. §§ 631.01, 600.01, and 618.42, the policy at issue was exempt from Wisconsin's bond requirement since it was procured directly from an out-of-state insurer. (Docket No. 17 at 5-6.) Alternatively, it contends that the bond requirement does not apply because it is limited to instances where substitute service is accomplished through service upon Wisconsin's Commissioner of Insurance and this form of service was not utilized in this action. (Docket No. 17 at 6-7.) Finally, Sirius contends that even if it is not exempt under Wis. Stat. § 618.47, the court should waive the bond requirement, as is authorized under Wis. Stat. § 618.47(1)(a), because it has sufficient available funds to satisfy any final judgment in this action. Sirius also makes passing reference to Magistrate Judge Crocker's Report and Recommendation in Scottish Guar. Ins. Co. v. Dwyer, 1992 U.S. Dist. LEXIS 22894,*34-*35 (W.D. Wis. Nov. 2, 1992) (), wherein Judge Crocker concluded that the bond requirement in Wis. Stat. § 618.47 did not apply in federal court. (Docket No. 17 at 9.) This argument is undeveloped in Sirius' brief and therefore the court shall not consider it further.
The plaintiff acknowledges the defendant's contention that by operation of Wis. Stat. § 631.01(1), Wisconsin's bond requirement for unauthorized insurers, Wis. Stat. § 618.47, does not apply to insurance directly procured from an insurer provided "no agent or broker resident or doing business in this state is involved and if negotiations occur primarily outside this state." Wis. Stat. § 618.42(1). Rather, the plaintiff contends that the direct insurance statute, Wis. Stat. § 618.42(1), does not apply here because negotiations occurred within Wisconsin.
Wis. Stat. § 631.01(1) states:
Wis. Stat. § 631.01
First, with respect to the question of whether Sirius is required to post bond, Wis. Stat. § 631.01(1)(a) is not relevant. Irrespective of whether the policy at issue here was directly procured in accordance with Wis. Stat. § 618.42(1), any exception from Wisconsin law would apply, at most,to Chapters 631 and 632. The bond requirement is found in Chapter 618, Wis. Stat. § 618.47, and thus it is not impacted by Wis. Stat. § 631.01(1)(a). See Stone v. Seeber, 155 Wis. 2d 275, 283, 455 N.W.2d 627, 631 (Ct. App. 1990).
Nonetheless, the question of whether the policy was directly procured from an out-of-state insurer is relevant under Wis. Stat. § 600.01(1)(b)(6), which exempts "[t]ransactions directly procured through negotiations under s. 618.42 . . ." from Chapters 600 to 646. Wis. Stat. § 618.42 states, in relevant part:
(1) Subject to the restrictions of this section, any person seeking insurance may obtain it if no agent or broker resident or doing business in this state is involved and if negotiations occur primarily outside this state. Negotiations by mail occur within this state if a letter is sent from or to an address in this state.
The record before this court is devoid of any indication that the relevant insurance policy was the product of any "negotiation" between the parties, at least under the popular connotation of that term. From the facts presented to the court, this was a "take-it-or-leave-it" offer without any evidence of negotiation. In the absence of any evidence of negotiations, then necessarily negotiations could not have "occur[red] primarily outside this state." But Black's Law Dictionary defines "negotiate" as, "to communicate with another party for the purpose of reaching an understanding." Black's Law Dictionary (9th ed. 2009). Under this definition, the mere offer and acceptance of even a "take-it-or-leave-it" contract may constitute the requisite "negotiation" under Wis. Stat. § 618.42. Whether this was the meaning intended by the legislature is a question the court need not resolve because the record is similarly clear that Redmond was within Wisconsin when he accepted Sirius' insurance offer. Therefore, the narrow exception from Wisconsin law for direct procurement of insurance from an out-of-state insurer, Wis. Stat. § 618.42, does not apply in the present case.
The court turns next to the question of whether the bond requirement is limited to instances where substitute service is accomplished through service upon Wisconsin's Commissioner ofInsurance. Wis. Stat. § 618.47 is titled "Defense of action by unauthorized person" and states in its entirety:
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