Shugarts v. Mohr

• Decision Date: 05 April 2018
• Docket Number: No. 2016AP983,2016AP983
• Citation: 909 N.W.2d 402,2018 WI 27,380 Wis.2d 512
• Parties: Robert H. SHUGARTS, II and Judith Lynn Shugarts, Plaintiffs-Appellants-Petitioners, v. Dennis M. MOHR, Progressive Casualty Insurance Company/Artisan and Truckers Casualty Company and Wisconsin Municipal Mutual Insurance Company, Defendants, Allstate Property and Casualty Insurance Company, Defendant-Respondent.
• Court: Wisconsin Supreme Court

380 Wis.2d 512

909 N.W.2d 402

2018 WI 27

Robert H. SHUGARTS, II and Judith Lynn Shugarts, Plaintiffs-Appellants-Petitioners,

v.Dennis M. MOHR, Progressive Casualty Insurance Company/Artisan and Truckers Casualty Company and Wisconsin Municipal Mutual Insurance Company, Defendants,Allstate Property and Casualty Insurance Company, Defendant-Respondent.

No. 2016AP983

Supreme Court of Wisconsin.

Oral Argument: January 9, 2018

Opinion Filed: April 5, 2018

For the plaintiffs-appellants-petitioners, there were briefs filed and an oral argument by Harry R. Hertel and Hertel Law Offices, S.C., Eau Claire.

For the defendant-respondent, there was a brief filed by Leah M. Cameron, John M. Swietlik, Jr., and Kasdorf, Lewis & Swietlik, S.C., Milwaukee. There was an oral argument by John M. Swietlik, Jr.

An amicus curiae brief was filed on behalf of Wisconsin Association for Justice by Edward E. Robinson and Cannon & Dunphy, S.C., Brookfield, with whom on the brief were William C. Gleisner, III and Law Offices of William C. Gleisner, III, Brookfield, and Lynn R. Laufenberg, Mark L. Thomsen, and Gingras, Cates, Luebke, S.C., Waukesha. There was an oral argument by Edward E. Robinson.

ANN WALSH BRADLEY, J.

¶ 1 The petitioners, Robert and Judith Shugarts, seek review of a published court of appeals decision affirming the circuit court's grant of summary judgment to the Shugarts' underinsured motorist (UIM) carrier.¹ They contend that the court of appeals erred in concluding that they failed to provide Allstate Property and Casualty Company (Allstate) with timely notice of their UIM claim and that they failed to rebut the presumption that Allstate was prejudiced by the untimely notice.

¶ 2 Specifically, the Shugarts assert that the court of appeals mistakenly interpreted the UIM policy's "proof of claim" provision as a "notice of accident" provision. The Shugarts submit that instead it is the tender of the tortfeasor's underlying policy limits, not the accident itself, that triggers the notice provision in the UIM policy. They further argue that if the proof of claim was not timely filed, then Allstate was not prejudiced by the untimely notice.

¶ 3 We conclude that the operative event triggering the notice requirement in the Shugarts' UIM policy is the tender of the tortfeasor's underlying policy limit. We further conclude that Wis. Stat. § 631.81(1) (2009–10)² does not apply to the UIM policy provision at issue. Consequently, we determine that the Shugarts provided Allstate with timely proof of their UIM claim as required by the policy language. Because we determine that the Shugarts' proof of claim was timely filed, we need not address whether Allstate was prejudiced.

¶ 4 Accordingly, we reverse the court of appeals and remand to the circuit court for further proceedings.

I

¶ 5 Robert Shugarts was employed as a deputy sheriff in Eau Claire County. While on duty on October 11, 2010, he was involved in the pursuit of Dennis Mohr (Mohr), a suspect in a hit-and-run accident. Robert was severely injured when Mohr's vehicle struck his squad car.

¶ 6 Mohr's vehicle was insured by Progressive Casualty Insurance Company (Progressive). The squad car was owned by Eau Claire County and was insured under a policy issued by Wisconsin Municipal Mutual Insurance Company (WMMIC), which included UIM coverage. The Shugarts possessed a personal automobile insurance policy through Allstate, which also included UIM coverage.

¶ 7 In November of 2011, the Shugarts hired an attorney who sent notice of retainer to Progressive. It denied coverage in January of 2012, basing the denial on the assertion that Mohr's striking of the squad car was an intentional act and thus not covered under its policy.

¶ 8 The Shugarts proposed a $600,000 settlement with Progressive in April of 2013. In May of 2013, Progressive turned down the offer, persisting in its assertion that the intentional act exclusion in Mohr's policy served as a defense to coverage.

¶ 9 After Progressive rejected their offer, the Shugarts filed this lawsuit in June of 2013. Progressive continued to deny coverage, but offered to settle the case for $10,000. It also provided the Shugarts with a declarations page from Mohr's policy indicating that it contained a bodily injury liability limit of $50,000 per person.

¶ 10 In July of 2014, the Shugarts filed an amended complaint, adding Eau Claire County's insurer, WMMIC, as a defendant. The Shugarts alleged that WMMIC was liable for UIM coverage "arising out of the operation of" his squad car.³

¶ 11 Subsequently, on October 13, 2014, Progressive changed its position on coverage. It offered to pay the Shugarts the policy limit of $50,000 if WMMIC waived any subrogation claim. On October 28, 2014, the Shugarts sent a notice of retainer to Allstate, advising that counsel had been retained "with regard to injuries he sustained in an automobile accident which occurred on October 11, 2010."

¶ 12 After additional correspondence between the Shugarts' attorneys and Allstate, on February 9, 2015, the Shugarts sent Allstate a notice pursuant to Vogt v. Schroeder, 129 Wis. 2d 3, 383 N.W.2d 876 (1986).⁴ The notice stated that Progressive had offered to settle the Shugarts' claim for the policy limit of $50,000. Further, the notice explained that "[i]n evaluating Mr. Shugarts' injuries, we believe that Mr. Shugarts' claim is well in excess of the policy limits afforded by Progressive Insurance."

¶ 13 The Shugarts filed an additional amended complaint in March of 2015, adding Allstate as a defendant. Allstate answered the complaint raising untimeliness as an affirmative defense. It stated that "[t]here is no coverage available to the plaintiffs under the Allstate policy given the failure of the plaintiffs to provide timely notice of their intention to make a claim as a result of the subject accident as required under the Allstate policy."

¶ 14 Allstate moved for summary judgment. It argued that the Shugarts "did not provide timely notice to Allstate of the October 11, 2010 motor vehicle accident as required by the Allstate policy."

¶ 15 The circuit court granted Allstate's motion for summary judgment. Specifically, it stated that it considered the notice untimely regardless of the governing policy provision or statute:

So I am going to find, as a matter of law, that the plaintiff failed to provide timely notice to Allstate of the accident and I think that's true whether the notice requirement comes under the liability section of the policy, the UIM section of the policy or the statutory provisions. All of them use similar language ... I have to conclude that it was reasonably possible for Mr. Shugarts to provide notice to Allstate sometime shortly after the accident.

Further, the circuit court concluded that the Shugarts had failed to rebut the presumption that Allstate was prejudiced by the untimely notice.

¶ 16 The Shugarts appealed, and the court of appeals affirmed the circuit court's grant of summary judgment. The court of appeals concluded that "Shugarts was required to provide Allstate with proof of his UIM claim as soon as possible after the incident giving rise to the claim." Shugarts v. Mohr, 2017 WI App 27, ¶ 24, 375 Wis. 2d 225, 894 N.W.2d 443. "[I]t was possible for Shugarts to provide proof of claim in January 2012, when Progressive denied coverage for his claim against Mohr. At the very least, Shugarts should have provided proof of claim in August 2013, when he learned that Progressive's policy limit was only $50,000." Id. The court of appeals further agreed with the circuit court that the Shugarts had failed to rebut the presumption that Allstate was prejudiced by the late notice. Id., ¶ 34.

II

¶ 17 In this case we address a summary judgment dismissing the Shugarts' claim against Allstate. We review a grant of summary judgment independently, applying the same methodology as the circuit court. Novell v. Migliaccio, 2008 WI 44, ¶ 23, 309 Wis. 2d 132, 749 N.W.2d 544. Summary judgment is appropriate where there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Id.

¶ 18 We interpret first the parties' written insurance contract. Interpretation of an insurance contract presents a question of law. Am. Family Mut. Ins. Co. v. Am. Girl, Inc., 2004 WI 2, ¶ 23, 268 Wis. 2d 16, 673 N.W.2d 65. Our review also requires us to interpret a statute. Statutory interpretation likewise presents a question of law. Moustakis v. State of Wis. Dep't of Justice, 2016 WI 42, ¶ 16, 368 Wis. 2d 677, 880 N.W.2d 142 (citation omitted). We review questions of law independently of the decisions rendered by the circuit court and court of appeals. Id.

III

¶ 19 Allstate identifies two potential sources of a requirement that the Shugarts provide it with notification of a UIM claim as soon as possible following an accident: the language of the insurance policy and Wis. Stat. § 631.81(1). We begin by examining the notice requirements dictated by the language of the Shugarts' insurance policy. Subsequently, we address the proof of loss mandated by § 631.81(1) and its potential applicability.

A

¶ 20 We turn first to the language of the Shugarts' insurance policy. When the language of an insurance policy is unambiguous, a court will not rewrite the policy by interpretation or impose obligations the parties did not undertake. Acuity v. Chartis Specialty Ins. Co., 2015 WI 28, ¶ 24, 361 Wis. 2d 396, 861 N.W.2d 533. A policy's terms are interpreted as they would be understood from the perspective of a reasonable person in the position of the insured. Frost ex rel. Anderson v. Whitbeck, 2002 WI 129, ¶ 20, 257 Wis. 2d 80, 654 N.W.2d 225.

¶ 21 Allstate cites two provisions in the Shugarts' insurance policy, arguing they require the Shugarts to submit notice of loss as soon as possible⁵ after the accident. First, Allstate points to a provision in the liability portion of the policy, entitled "What To Do In Case Of An Auto Accident Or Claim" (the "notice of...