Vieau v. American Family Mut. Ins. Co.

Citation712 N.W.2d 661,2006 WI 31
Decision Date19 April 2006
Docket NumberNo. 2004AP1358.,2004AP1358.
PartiesJames E. VIEAU, Plaintiff-Appellant-Petitioner, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY AND ACUITY, a mutual insurance company, Defendants-Respondents.
CourtUnited States State Supreme Court of Wisconsin

For the plaintiff-appellant-petitioner, there were briefs by Robert J. Janssen, Christina Peterson, and Stellpflug, Janssen, Hammer, Kirschling & Bartels, S.C., De Pere, and oral argument by Robert J. Janssen.

For the defendant-respondent American Family Mutual Insurance Company, there was a brief by Robert N. Duimstra and Menn Law Firm, Ltd., Appleton, and oral argument by Jonathan M. Menn.


The petitioner, James E. Vieau (Vieau), seeks review of a court of appeals decision affirming a summary judgment order of the Brown County Circuit Court, Donald R. Zuidmulder, Judge, in favor of American Family Mutual Insurance Company (American Family) in a personal injury action arising from a motor vehicle accident. See Vieau v. Am. Family Mut. Ins. Co., 2005 WI App 34, 278 Wis.2d 683, 693 N.W.2d 127. Vieau did not petition for review of the decision as it pertains to Acuity, a mutual insurance company; therefore, this appeal is limited to the decision as it pertains to American Family.

¶ 2 We first determine that Wis. Stat. § 632.32(6)(b)1. (2003-04)1 applies to underinsured motorist (UIM) coverage when issued as part of a policy containing liability insurance. We further conclude that American Family's "own-other-car" definitional exclusion is valid under Wis. Stat. § 632.32(5)(e) as Vieau is excluded from his mother's UIM coverage because he owns his own motor vehicle and not because he is related by blood to the named insured. Therefore, we affirm the court of appeals.


¶ 3 The pertinent facts are set forth as follows. This case arises from an automobile accident that occurred on June 1, 2002. Vieau was a passenger in a truck owned and operated by Shane P. Kaczrowski (Kaczrowski). Vieau alleged in his complaint that Kaczrowski was driving the vehicle while intoxicated; Kaczrowski denied this allegation. While attempting to negotiate a curve in the roadway, the vehicle traveled off of the roadway and into a ditch. The truck then struck a driveway embankment and became airborne for approximately 93 feet before it struck the ground and rolled several times. Vieau suffered serious injuries as a result of the accident and claimed medical expenses in excess of $60,000.

¶ 4 There were three policies in force at the time of the accident that might have provided coverage to Vieau. First, Vieau had a policy issued by Acuity, insuring his 1976 Ford pickup truck; this policy included UIM coverage limits of $50,000 per person and $100,000 per accident. Second, Kaczrowski had a policy issued by Acuity with bodily injury limits of liability of $25,000 per person and $50,000 per occurrence; the policy also contained UIM coverage limits of $50,000 per person and $100,000 per accident. Third, Kathy Vieau had a policy issued by American Family for her 1993 Plymouth Acclaim that had UIM coverage limits of $100,000 per person and $300,000 per accident.

¶ 5 On April 17, 2003, Vieau filed a lawsuit for personal injuries against American Family, Kaczrowski, and Acuity2 seeking UIM coverage from the insurance carriers and Kaczrowski. Manitowoc County was also named in the complaint but was later voluntarily dismissed.

¶ 6 Vieau recovered the $25,000 bodily injury liability insurance proceeds under Kaczrowski's Acuity policy, and he also recovered $25,000 of UIM insurance proceeds under his own policy.3 However, he further alleged entitlement to UIM benefits under his mother's policy. In response to Vieau's claim, American Family moved for summary judgment declaring that Kathy Vieau's policy provided no UIM coverage to Vieau. American Family based its argument on the fact that Vieau was not a "relative" entitled to coverage because the policy's definition of "relative" did not include anyone who owned a motor vehicle.

¶ 7 The policy's UIM endorsement defines an "insured person" as "[y]ou or a relative." A "relative," in turn, is defined throughout the policy as "a person living in your household, related to you by blood, marriage or adoption. . . . It does not include any person who, or whose spouse, owns a motor vehicle other than an off-road motor vehicle." It is undisputed that, at the time of the accident, Vieau lived with his parents, Robert and Kathy Vieau, and Vieau owned a motor vehicle.

¶ 8 After briefing and a hearing, the circuit court granted American Family's summary judgment motion in an order filed April 7, 2004, and Vieau's claims against American Family were dismissed. The court determined that Kathy Vieau's policy provided no UIM coverage for the claims of Vieau.

¶ 9 Vieau appealed, and the court of appeals affirmed. The court first recognized the uncertainty in the case law as to whether Wis. Stat. § 632.32(6)(b)1. applies to indemnity coverage. However, the court assumed for the sake of argument the provisions of § 632.32 did apply to indemnity insurance, and it instead based its holding on § 632.32(5)(e), which states: "[a] policy may provide for exclusions not prohibited by sub. (6) or other applicable law. Such exclusions are effective even if incidentally to their main purpose they exclude persons, uses or coverages that could not be directly excluded under sub. (6)(b)." Comparing the situation to Peabody v. American Family Mutual Insurance Co., 220 Wis.2d 340, 582 N.W.2d 753 (Ct.App.1998), the court of appeals determined that "[t]he purpose of this exclusion is not to deny coverage or benefits to relatives, but to prevent car owners who either reject UIM coverage or who have independent policies from getting coverage they have not paid for simply because of their resident relative status." See Vieau, 278 Wis.2d 683, ¶ 11, 693 N.W.2d 127 (citing Peabody, 220 Wis.2d at 354, 582 N.W.2d 753).


¶ 10 This case comes before us on summary judgment. "We review a circuit court's grant of summary judgment independently, applying the same methodology as the circuit court." Smaxwell v. Bayard, 2004 WI 101, ¶ 12, 274 Wis.2d 278, 682 N.W.2d 923 (citing Town of Delafield v. Winkelman, 2004 WI 17, ¶ 15, 269 Wis.2d 109, 675 N.W.2d 470). Pursuant to Wis. Stat. § 802.08(2), summary judgment "shall be rendered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." "Where the material facts are not disputed, the court is presented solely with a question of law, subject to de novo review." Smaxwell, 274 Wis.2d 278, ¶ 12, 682 N.W.2d 923 (citing Winkelman, 269 Wis.2d 109, ¶ 16, 675 N.W.2d 470).

¶ 11 In this case, we address whether American Family's "own-other-car" definitional exclusion is valid under Wis. Stat. § 632.32(6)(b)Beerbohm v. State Farm Mut. Auto. Ins. Co., 2000 WI App 105, ¶ 8, 235 Wis.2d 182, 612 N.W.2d 338. "This issue requires that we interpret and apply statutory provisions to undisputed facts and that we interpret an insurance policy. These are questions of law subject to independent appellate review." Progressive N. Ins. Co. v. Hall, 2006 WI 13, ¶ 9, ___ Wis.2d ___, 709 N.W.2d 46 (citing Beerbohm v. State Farm Mut. Auto. Ins. Co., 2000 WI App 105, ¶ 8, 235 Wis.2d 182, 612 N.W.2d 338).


¶ 12 As a preliminary matter, the parties dispute whether the requirements of § 632.32(6)(b)1. extend to UIM coverage. More specifically, the parties dispute whether Wis. Stat. § 632.32(1)4 limits the scope of § 632.32(6)(b)1. to liability coverage and not indemnity coverages such as UIM coverage.

¶ 13 Vieau relies on Mau v. North Dakota Insurance Reserve Fund, 2001 WI 134, 248 Wis.2d 1031, 637 N.W.2d 45, for his argument that § 632.32(6)(b)1. applies to both liability and indemnity policies. In Mau, this court questioned statements from previous decisions that suggested certain provisions of § 632.32 applied solely to liability policies:

Wis. Stat. § 632.32, which, except as otherwise provided, applies to all motor vehicle insurance policies issued or delivered in Wisconsin. Clark v. Am. Family Mut. Ins. Co., 218 Wis.2d 169, 173, 577 N.W.2d 790 (1998). Some earlier cases suggest that certain provisions of § 632.32 apply only to liability policies, not indemnity insurance. See Martin v. Milwaukee Mut. Ins. Co., 146 Wis.2d 759, 770, 433 N.W.2d 1 (1988); Peabody v. American Family Mut. Ins. Co., 220 Wis.2d 340, 350, 582 N.W.2d 753 (Ct. App.1998). However, the plain language of several subsections in § 632.32 demonstrate the applicability of those sections to indemnity insurance. . . . Furthermore, this court has applied § 632.32 to indemnity insurance.

Id., ¶ 30, 637 N.W.2d 45 (citations omitted).

¶ 14 Thus, Vieau argues that the circuit court erroneously relied on Peabody for its conclusion that American Family's definition of "relative" is not barred by § 632.32(6)(b)1. because, Vieau contends, Mau overruled Peabody. American Family, on the other hand, contends Mau is distinguishable from Peabody because Mau considered an excess liability policy, whereas Peabody considered UIM indemnity coverage.

¶ 15 In Peabody, the court of appeals addressed a factually analogous case with an identical "own-other-car" exclusion. Peabody, 220 Wis.2d at 347-48, 582 N.W.2d 753. In that case, Angela Peabody, like James Vieau, was attempting to obtain UIM benefits as a resident relative under her father's American Family policy issued on his own vehicle. Id. at 345, 582 N.W.2d 753. The court of appeals first determined that the policy "clearly and unambiguously limits the UIM coverage to the named insured or a relative, provided the relative does not own his or her own vehicle." Id. at 347, 582 N.W.2d 753. Peabody owned her own...

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