Smith v. Atlantic Mut. Ins. Co., No. 88-1657

CourtUnited States State Supreme Court of Wisconsin
Writing for the CourtBABLITCH
Citation155 Wis.2d 808,456 N.W.2d 597
PartiesCynthia SMITH, Plaintiff-Appellant-Petitioner, v. ATLANTIC MUTUAL INSURANCE COMPANY, Defendant-Respondent.
Docket NumberNo. 88-1657
Decision Date25 June 1990

Page 597

456 N.W.2d 597
155 Wis.2d 808
Cynthia SMITH, Plaintiff-Appellant-Petitioner,
v.
ATLANTIC MUTUAL INSURANCE COMPANY, Defendant-Respondent.
No. 88-1657.
Supreme Court of Wisconsin.
Argued May 29, 1990.
Decided June 25, 1990.

Page 598

[155 Wis.2d 809] John A. Becker, argued, and Hanson, Gasiorkiewicz & Becker, S.C., on briefs, Racine, for plaintiff-appellant-petitioner.

Donald H. Piper, argued Robert E. Neville and Fellows, Piper and Schmidt, on brief, Milwaukee, for defendant-respondent.

Mark L. Thomsen and Cannon & Dunphy, S.C., on brief, Milwaukee, amicus curiae, for the Wisconsin Academy of Trial Lawyers.

BABLITCH, Justice.

Cynthia Smith (Smith) seeks review of a court of appeals' decision which affirmed a circuit court judgment dismissing her case against Atlantic Mutual Insurance Company (Atlantic Mutual). In her lawsuit, she claimed entitlement to underinsured motorist (UIM) benefits. The issue is whether the other vehicle involved in the accident was an "underinsured motor vehicle" as defined in Smith's policy.

We conclude that the other vehicle involved in the accident was not an "underinsured motor vehicle" as unambiguously defined in the policy, and therefore Smith was not entitled to UIM coverage.

The facts are as follows: Smith was involved in an accident with Joyce Goulias (Goulias). Goulias carried liability insurance with American Family Insurance Company (American Family) that had a $50,000 policy [155 Wis.2d 810] limit. Smith had $50,000 of underinsured motorist coverage with Atlantic Mutual. Damages are alleged to be in excess of $100,000.

American Family tendered to Smith its policy limits of $50,000, and Smith then made a claim against her company Atlantic Mutual for the limits of her UIM policy. Atlantic Mutual denied coverage, and Smith commenced the present suit. Atlantic Mutual successfully moved for summary judgment and the action was dismissed. The circuit court held that the Goulias vehicle was not an underinsured motor vehicle as defined by the policy.

The court of appeals affirmed the circuit court judgment. However, the court did not address the issue whether the Goulias vehicle was an underinsured motor vehicle under the policy language. The court of appeals based its decision on the grounds that even if Smith were entitled to UIM benefits, the claim would be reduced by $50,000 pursuant to the policy's reducing clause. Such a reduction would result in Smith's claim being reduced to zero.

We accepted review to resolve the issues whether Goulias' vehicle was an "underinsured motor vehicle" under Smith's policy, and if so, to what extent the reducing clause affects the claim. The resolution of these issues involves the interpretation of language within an automobile liability policy. The interpretation of an insurance policy is a question of law which this court decides independently of the lower courts. Lambert v. Wrensch, 135 Wis.2d 105, 115, 399 N.W.2d 369 (1987).

Insurance contracts are controlled by the same rules of construction as are applied to other contracts. Ehlers v. Colonial Penn. Ins. Co., 81 Wis.2d 64, 74, 259 N.W.2d [155 Wis.2d 811] 718 (1977). Ambiguities in coverage are to be construed in favor of coverage, while exclusions are narrowly construed against the insurer. Davison v. Wilson, 71 Wis.2d 630, 635-36, 239 N.W.2d 38 (1976). Words or phrases are ambiguous

Page 599

when they are susceptible to more than one reasonable construction. However, when the terms of an insurance policy are plain on their face, the policy must not be rewritten by construction. Limpert v. Smith, 56 Wis.2d 632, 640, 203 N.W.2d 29 (1973).

We conclude that the Goulias vehicle was not an underinsured motor vehicle as defined in the policy. The Atlantic Mutual policy defines an "underinsured motor vehicle" as:

a land 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. (Emphasis added.)

We agree with the circuit court that the above policy terms regarding UIM coverage are unambiguous. Applying the plain meaning of the words, Smith does not fit the...

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164 practice notes
  • Cousins Submarines, Inc. v. Fed. Ins. Co., Case No. 12-CV-387-JPS
    • United States
    • United States District Courts. 7th Circuit. United States District Court of Eastern District of Wisconsin
    • February 8, 2013
    ...the case of policy exclusions. Folkman v. Quamme, 2003 WI 116, ¶ 13, 264 Wis. 2d 617, 665 N.W.2d 857; Smith v. Atlantic Mut. Ins. Co., 155 Wis. 2d 808, 811, 456 N.W.2d 597 (1990); Kaun v. Indus. Fire & Cas. Ins. Co., 148 Wis. 2d 662, 669, 436 N.W.2d 321 (1989).4. DISCUSSION OF SUBSTANTIVE I......
  • Rhein Bldg. Co. v. Gehrt, No. 97-C-205.
    • United States
    • United States District Courts. 7th Circuit. United States District Court of Eastern District of Wisconsin
    • September 17, 1998
    ...See Sprangers v. Greatway Insurance Company, 182 Wis.2d 521, 536, 514 N.W.2d 1, 6 (1994); Smith v. Atlantic Mutual Insurance Company, 155 Wis.2d 808, 810, 456 N.W.2d 597, 598 (1990). In Wisconsin, the interpretation of contracts of insurance is made with an aim toward effecting the true int......
  • Blum v. 1st Auto & Cas. Ins. Co., Case No. :2008ap1324
    • United States
    • United States State Supreme Court of Wisconsin
    • July 14, 2010
    ...The terms of a policy are ambiguous if they are "susceptible to more than one reasonable construction." Smith v. Atlantic Mut. Ins. Co., 155 Wis. 2d 808, 811, 456 N.W.2d 597 (1990). ¶20 However, when considering the meaning of a particular term or provision, insurance policies, like other c......
  • Marotz v. Hallman, No. 2005AP1579.
    • United States
    • United States State Supreme Court of Wisconsin
    • July 10, 2007
    ...exclusions in coverage are narrowly construed against the insurer. Id., ¶ 16, 665 N.W.2d 857 (citing Smith v. Atlantic Mut. Ins. Co., 155 Wis.2d 808, 811, 456 N.W.2d 597 (1990)). Ambiguity arises if the language of the policy is "susceptible to more than one reasonable construction." Id. Th......
  • Request a trial to view additional results
163 cases
  • Cousins Submarines, Inc. v. Fed. Ins. Co., Case No. 12-CV-387-JPS
    • United States
    • United States District Courts. 7th Circuit. United States District Court of Eastern District of Wisconsin
    • February 8, 2013
    ...the case of policy exclusions. Folkman v. Quamme, 2003 WI 116, ¶ 13, 264 Wis. 2d 617, 665 N.W.2d 857; Smith v. Atlantic Mut. Ins. Co., 155 Wis. 2d 808, 811, 456 N.W.2d 597 (1990); Kaun v. Indus. Fire & Cas. Ins. Co., 148 Wis. 2d 662, 669, 436 N.W.2d 321 (1989).4. DISCUSSION OF SUBSTANTIVE I......
  • Rhein Bldg. Co. v. Gehrt, No. 97-C-205.
    • United States
    • United States District Courts. 7th Circuit. United States District Court of Eastern District of Wisconsin
    • September 17, 1998
    ...See Sprangers v. Greatway Insurance Company, 182 Wis.2d 521, 536, 514 N.W.2d 1, 6 (1994); Smith v. Atlantic Mutual Insurance Company, 155 Wis.2d 808, 810, 456 N.W.2d 597, 598 (1990). In Wisconsin, the interpretation of contracts of insurance is made with an aim toward effecting the true int......
  • Blum v. 1st Auto & Cas. Ins. Co., Case No. :2008ap1324
    • United States
    • United States State Supreme Court of Wisconsin
    • July 14, 2010
    ...The terms of a policy are ambiguous if they are "susceptible to more than one reasonable construction." Smith v. Atlantic Mut. Ins. Co., 155 Wis. 2d 808, 811, 456 N.W.2d 597 (1990). ¶20 However, when considering the meaning of a particular term or provision, insurance policies, like other c......
  • Marotz v. Hallman, No. 2005AP1579.
    • United States
    • United States State Supreme Court of Wisconsin
    • July 10, 2007
    ...exclusions in coverage are narrowly construed against the insurer. Id., ¶ 16, 665 N.W.2d 857 (citing Smith v. Atlantic Mut. Ins. Co., 155 Wis.2d 808, 811, 456 N.W.2d 597 (1990)). Ambiguity arises if the language of the policy is "susceptible to more than one reasonable construction." Id. Th......
  • Request a trial to view additional results

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