Welin v. Pryzynski, No. 2004AP2386 (WI 4/21/2005), 2004AP2386.
| Decision Date | 21 April 2005 |
| Docket Number | No. 2004AP2386.,2004AP2386. |
| Parties | Alison M. Welin, Plaintiff, v. Elizabeth A. Pryzynski, American Family Mutual Insurance Company, Honeywell International and Acuity, Defendants, Secura Insurance, A Mutual Company, Defendant-Third-Party Plaintiff, v. Wausau Benefits, Third-Party Defendant, Joshua J. Opichka, Third-Party Defendant-Cross Claimant-Appellant, v. Hastings Mutual Insurance Company, Third-Party Defendant-Respondent. |
| Court | Wisconsin Supreme Court |
APPEAL from an order of the circuit court for Chippewa County, BENJAMIN D. PROCTOR, Judge. Reversed and cause remanded.
Before Vergeront, Lundsten and Higginbotham, JJ.
The issue on this appeal is whether this policy definition of "underinsured motor vehicle" may validly preclude all underinsured motorist (UIM) coverage for this UIM insured, Joshua Opichka. The definition, in essence, compares the UIM limits of Opichka's policy to the limits of the tortfeasor's liability policy without regard to whether the tortfeasor is liable to another person injured in the accident, as is the case here. We conclude that, as applied to Opichka, the definition is inconsistent with the recognized purposes of UIM coverage because it deprives him of all UIM benefits even if the amount he receives under the tortfeasor's liability policy is less than the UIM limits and does not fully compensate him for his damages. We further conclude, based on the facts before us, that the amount of UIM coverage available to Opichka is the UIM policy limit less the amount he has received from the tortfeasor. We therefore reverse the order of the circuit court dismissing Opichka's third-party complaint against his UIM insurer and remand for further proceedings consistent with this decision.
¶2 Opichka was a passenger in a car operated by Elizabeth Pryzynski. Pryzynski fell asleep at the wheel and her car crossed the centerline, striking a car driven by Alison Welin. There is no dispute that the accident was caused solely by Pryzynski's negligence. Opichka sustained serious injuries, some of them permanent, and Welin was also seriously and permanently injured.
¶3 Pryzynski was insured at the time by Secura Insurance under a liability policy with a single combined limit of $300,000 ($300,000 per person and $300,000 per accident). Opichka was insured by Hastings Mutual Insurance Company under a policy providing UIM coverage with limits of $150,000 per person and $300,000 per accident.
¶4 Welin sued Pryzynski and Secura, and Secura, in turn, filed a thirdparty complaint, asking for a declaratory ruling that the damages claimed by Opichka and Welin exceeded Pryzynski's $300,000 policy and no other liability coverage was available to her. Secura paid its policy limits to the court and asked the court to determine the allocation between Pryzynski and Opichka.
¶5 Opichka filed a third-party complaint against Hastings Mutual, claiming UIM coverage. Hastings Mutual filed a motion for a declaratory ruling that there was no UIM coverage for Opichka because Pryzynski's car did not meet the definition of an underinsured motor vehicle in the policy: "a land motor vehicle or trailer of any type 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." Relying on Smith v. Atlantic Mut. Ins. Co., 155 Wis. 2d 808, 456 N.W.2d 597 (1990), and Taylor v. Greatway Ins. Co., 2001 WI 93, 245 Wis. 2d 134, 628 N.W.2d 916, Hasting Mutual argued that this definition was unambiguous. According to Hastings Mutual, because the limits of Pryzynski's liability policy were greater than those of Opichka's UIM policy— $300,000 per person as compared to $150,000 per person—the requirements of this definition were not met.
¶6 The circuit court agreed with Hastings Mutual and granted its motion. Accordingly, it entered an order dismissing Opichka's third-party complaint against Hastings.
¶7 All parties have since stipulated that Welin's injuries and damages exceed $250,0001 and Opichka's injuries and damages exceed $50,000; the exact damages sustained by each remain to be litigated. In that same stipulation, Welin and Opichka agreed to a $250,000/$50,000 split of the $300,000 from Pryzynski's liability policy.
¶8 On appeal, Opichka renews the arguments he made in the circuit court, which the circuit court did not address after it concluded the policy definition of underinsured motor vehicle was unambiguous. We address only one of Opichka's arguments.2 He contends that the definition, when applied to deny him all UIM coverage regardless of what he has recovered from Pryzynski, is in effect a reducing clause that is prohibited by WIS. STAT. § 632.32(4m)(d) and 5(i).3 Instead, he asserts, the amount of UIM coverage available to him is the difference between what he has received from Pryzynski's liability policy and the $150,000 limit of his UIM policy.
¶9 Hastings Mutual responds that the statutory provisions on which Opichka relies are inapplicable and Smith, 155 Wis. 2d 808, and Taylor, 245 Wis. 2d 134, on which the circuit court relied, are controlling. According to Hastings Mutual, because each of those cases held that an identically worded definition of underinsured motor vehicle was unambiguous, that result is compelled here. Hastings Mutual does not dispute that a portion of Pryzynski's policy limits had to be paid to Welin nor that the amount paid to Opichka was appropriate; Hastings Mutual also does not contend that the amount paid to Opichka will be sufficient to compensate him for his damages. Hastings Mutual's position is that it is irrelevant whether Pryzynski's liability policy limits must be divided between Opichka and Welin and irrelevant whether Opichka ends up recovering from both sources less than the $150,000 limit of his UIM policy, even if his damages are more.
¶10 Resolution of these issues requires the application of case law, statutes, and insurance policy provisions to undisputed facts, all questions of law, which we review de novo. Van Erden v. Sobczak, 2004 WI App 40, ¶¶11, 22, 271 Wis. 2d 163, 677 N.W.2d 718 (); Brown v. State, 230 Wis. 2d 355, 363-64, 602 N.W.2d 79 (Ct. App. 1999) ().
¶11 We agree with Opichka that Smith and Taylor do not resolve the issue in this case. In Smith, the limit of the insured's UIM policy was $50,000 and the limit of the tortfeasor's liability policy was also $50,000. 155 Wis. 2d at 809. The court held that the definition of "underinsured motor vehicle" was unambiguous, the tortfeasor's vehicle plainly did not meet that definition, and "the terms of the UIM coverage [were not] otherwise prohibited by statute." Id. at 811, 813. In Taylor, the court concluded that Smith governed and the same definition was thus unambiguous. 245 Wis. 2d 134, ¶¶11-13. In rejecting certain of the insured's arguments there the court noted that the insured was not arguing "that any section, or combination of sections, in each UIM policy issued by American Family violates Wis. Stat. § 631.43 or any other statute." Id., ¶23.
¶12 In Smith and Taylor there was only one injured person in each case, and, thus, in each case the UIM insured had available the full limits of the tortfeasor's liability policy; in fact, in each case the tortfeasor's insurer paid the $50,000 limits to the UIM insured. The question therefore did not arise whether the definition of "underinsured motor vehicle" would violate any statutory provision if applied to preclude all UIM coverage to an insured in the position of Opichka. In an analogous situation we have recognized that, although the definition of "uninsured motor vehicle" had been held to be ambiguous under one set of facts, it was not ambiguous when applied to a different set of facts. State Farm Mut. Ins. Co. v. Gillette, 2001 WI App 123, ¶¶20-21, 246 Wis. 2d 561, 630 N.W.2d 527, aff'd on other grounds, 2002 WI 31, 251 Wis. 2d 561, 641 N.W.2d 662. So, too, the same definition of "underinsured motor vehicle" may conflict with statutory prohibitions under one set of facts but not under another.
¶13 Because neither Smith nor Taylor resolve the issues on this appeal, and because it appears that no Wisconsin case has addressed this definition of underinsured motor vehicle in circumstances similar to this case, we turn our attention to Opichka's statutory argument: that the definition as applied to him is in effect a reducing clause prohibited by WIS. STAT. § 632.32(4m)(d) and 5(i), when read together.
¶14 WISCONSIN STAT. § 632.32(4m)(a)1. requires insurers who write motor vehicle liability policies to provide insureds notice of the availability of UIM coverage and a brief description, if the insured's policy does not contain that coverage.4 If an insured accepts that coverage, the insurer must include in the policy UIM coverage "in limits of at least $50,000 per person and $100,000 per accident." Section 632.32(4m)(a)2.(d). Thus, although UIM coverage is not mandatory, once the insured opts for UIM coverage, § 632.32(4m) sets the minimum amount of coverage at $50,000 per person, $100,000 per accident. Danbeck v. American Family Mut. Ins. Co., 2001 WI 91, ¶3 n.1, 245 Wis. 2d 186, 629 N.W.2d 150. The statute does not, however, define "underinsured motor vehicle."
¶15 WISCONSIN STAT. § 632.32(5)(i), which was enacted at the same time as subsec. (4m),5 provides:
(i) A policy may provide that the limits under the policy for uninsured or underinsured motorist coverage for bodily injury or death resulting from any one accident shall be reduced by any of the following that apply:
1. Amounts paid by or on behalf of any person or organization that may be legally responsible for the bodily injury or death for which the payment is made.
2. Amounts paid or payable under any worker's compensation law.
3. Amounts paid or...
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