Richie by McManus v. American Family Mut. Ins. Co.

• Decision Date: 07 May 1987
• Docket Number: No. 86-0765,86-0765
• Citation: 140 Wis.2d 51,409 N.W.2d 146
• Parties: Georgia RICHIE, and Theresa M. Richie and Tonya M. Richie, Minors, by their Guardian ad Litem, Jack McMANUS, Plaintiffs-Appellants, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant-Respondent.
• Court: Wisconsin Court of Appeals

Page 146

409 N.W.2d 146

140 Wis.2d 51

Georgia RICHIE, and Theresa M. Richie and Tonya M. Richie Minors, by their Guardian ad Litem, Jack McMANUS Plaintiffs-Appellants, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant-Respondent.

No. 86-0765.

Court of Appeals of Wisconsin.

Submitted on Briefs April 10, 1987.

Opinion Released May 7, 1987.

Opinion Filed May 7, 1987.

Review Denied.

Jack McManus, Oregon, for plaintiffs-appellants.

John Possi and Bell, Metzner & Gierhart, S.C., Madison, for defendant-respondent.

James T. Murray, Jr., and Randy S. Parlee and Peterson, Johnson & Murray, S.C., Milwaukee, on behalf of The Wisconsin Ins. Alliance, brief of amicus curiae.

Before GARTZKE, P.J., and DYKMAN and EICH, JJ.

EICH, Judge.

Georgia, Theresa and Tonya Richie appeal from a summary judgment declaring their rights under an automobile liability policy issued by American Family Mutual Insurance Company. Lonny Richie, Georgia's husband and the father of Theresa and Tonya, was seriously injured in a motor vehicle accident. American Family, the other driver's insurer, settled with Lonny for $100,000, its policy limit for bodily injury sustained by one person in a single occurrence. The issue is whether the claims of Lonny's wife and children for medical expenses and loss of consortium must be satisfied out of the $100,000 "each person" policy limit or whether the $300,000 "each occurrence" limit applies. We are satisfied that the trial court was correct in holding that the "each person" limit applied, and we therefore affirm.

American Family's policy sets limits of $100,000 for "each person" and $300,000 for "each occurrence." In a section entitled "Limits of Liability," the document states:

The limits of liability shown in the declarations apply, subject to the following:

1. The bodily injury liability limit for "each person" is the maximum for bodily injury sustained by one person in any one occurrence.

2. Subject to the bodily injury liability limit for "each person," the bodily injury liability limit for "each occurrence" is the maximum for bodily injury sustained by two or more persons in any one occurrence.

* * *

We will pay no more than these maximums no matter how many vehicles are described in the declarations, or insured persons, claims, claimants, policies, or vehicles are involved. Any amount payable under this coverage to or for an injured person will be reduced by any payment made to that person under the Uninsured Motorist coverage of this policy.

[Emphasis in original.] The trial court ruled that because the family's causes of action for medical expenses and loss of consortium arose out of Lonny's bodily injuries, the $100,000 "each person" limitation applied to both such claims.

Construction of language in an insurance policy involves questions of law which we consider de novo, owing no deference to the trial court's interpretation. Herwig v. Enerson & Eggen, 98 Wis.2d 38, 39, 295 N.W.2d 201, 203 (Ct.App.1980), aff'd, 101 Wis.2d 170, 303 N.W.2d 669 (1981). We are guided, however, by general rules of contract construction. It is well settled that policy language is to be given its common and ordinary meaning--not necessarily what the insurer intended, "but what a reasonable person in the position of the insured would have understood the words to mean." Kremers-Urban Co. v. American Employers Ins., 119 Wis.2d 722, 735, 351 N.W.2d 156, 163 (1984). If the terms of the policy are "plain on their face," courts will not go beyond them to rewrite the policy by construction. Garriguenc v. Love, 67 Wis.2d 130, 135, 226 N.W.2d 414, 417 (1975). If the language is ambiguous, however, the ambiguity will be resolved in favor of the policyholder. Id. Finally, ambiguities must be "genuine," Bulen v. West Bend Mut. Ins. Co., 125 Wis.2d 259, 264, 371 N.W.2d 392, 394 (Ct.App.1985); they cannot be strained or fanciful. "A genuine ambiguity arises when [the policy language] is so confusing that the average policyholder cannot make out the boundaries of the coverage." Id.

The Richies argue that the phrase "bodily injury liability ... for 'each person' " is ambiguous and thus must be construed in their favor, allowing their claims to be satisfied within the larger policy limitations. They view the policy as ambiguous because: (1) it took the trial court seventy-eight words to describe a six-word clause; and (2) in the absence of explanatory language or a qualifying phrase such as "damages for care and loss of services," the average policyholder would be unable to ascertain the bounds of coverage. We disagree.

The policy plainly and unambiguously limits recovery for "bodily injury" for "each person" to $100,000. If more than one person suffers bodily injury, there may be separate claims. But if only one person is injured, there can be only a single maximum recovery of $100,000. And the limitation applies irrespective of whether others who were not themselves injured in the accident may have derivative or ancillary claims for damages--such as medical expense payments or loss of consortium--arising out of the injuries to the first person.

The Richies argue, however, that their claim for loss of Lonny's consortium constitutes a separate cause of action for their own "injuries," citing Kottka v. PPG Industries, Inc., 130 Wis.2d 499, 388 N.W.2d 160 (1986). The issue in Kottka was...