Miller v. West Bend Mutual Insurance coverage Firm
No. 2023AP1697 (Wis. Ct. App. Oct. 22, 2024) (really helpful for publication)
In Miller v. West Bend Mutual Insurance coverage Firm, the Wisconsin Courtroom of Appeals thought of whether or not Wisconsin legislation permits insurers to outline “underinsured motorcar” to exclude government-owned autos in a UIM coverage. No. 2023AP1697 (Wis. Ct. App. Oct. 22, 2024). The court docket answered within the affirmative and really helpful the opinion for publication, thereby confirming that the 2011 amendments to Wisconsin’s auto insurance coverage statutes present insurers choices for contractually defining UIM protection.
Donald Miller was injured whereas driving his employer’s car on a county street crossing underneath Interstate 94. As he was passing underneath the interstate, a snowplow owned by Eau Claire County pushed snow off of the interstate and onto Miller’s car under. The snow induced the windshield to collapse and severely injure Miller. Miller recovered $250,000 from the County, the County’s most legal responsibility underneath Wis. Stat. § 345.05(3). He then turned to West Bend Mutual Insurance coverage Firm (“WBMI”), his employer’s insurer, for extra quantities underneath UIM protection.
The UIM protection within the WBMI coverage promised to “pay all sums the ‘insured’ is legally entitled to get better as compensatory damages from the proprietor or driver of an ‘underinsured motorcar.’” The definition of “underinsured motorcar” clarified that “‘underinsured motorcar’ doesn’t embrace any car…[o]wned by a governmental unit or company.” WBMI subsequently denied protection on the idea that UIM protection didn’t apply as a result of the car inflicting Miller’s damages, the county snowplow, didn’t match inside the definition of “underinsured motorcar.” Although Miller didn’t dispute that the plain language of the coverage supported denial, he asserted that the exclusion of government-owned autos from the definition of “underinsured motorcar” violated Wisconsin legislation.
The court docket of appeals concluded that WBMI appropriately denied protection. The court docket relied closely on the Wisconsin Supreme Courtroom’s current resolution in Brey v. State Farm Mutual Vehicle Insurance coverage Co., 2022 WI 7, 400 Wis. 2nd 417, 970 N.W.2nd 1. Brey involved the enforceability of a requirement for UIM protection that an insured personally maintain bodily harm. In the middle of that evaluation, the supreme court docket detailed the historical past of Wisconsin’s omnibus statute, Wis. Stat. § 632.32. The results of the newest statutory modifications was “elevated protection flexibility for insurers.”
The Miller court docket discovered this evaluation dispositive: the present construction of the omnibus statute permits insurers broad discretion in how one can construction UIM protection, together with the definition of an “underinsured motorcar”. Accordingly, WBMI’s definition excluding government-owned autos from the definition of “underinsured motorcar” is completely permissible and enforceable underneath Wisconsin legislation.
Miller raised a number of bases to invalidate WBMI’s definition, however the court docket of appeals rejected all of them. First, he learn Brey and Wis. Stat. §§ 632.32(2)(d) and (4m)(d) to require insurance policies to undertake certainly one of two conventional approaches to defining an “underinsured motorcar”: a limits-to-limits comparability (i.e., a car is underinsured if the legal responsibility limits are lower than the UIM limits), or a limits-to-damages comparability (i.e., a car is underinsured if the legal responsibility limits are lower than the UIM-insured’s damages). As a result of excluding government-owned autos from the definition of “underinsured motorcar” was not per both conventional strategy, Miller asserted the definition was improper.
The court docket rejected this argument as a result of Wis. Stat. § 632.32(4)(a) and (4m)(a) don’t require UIM protection be included in insurance policies in any respect, so any mandates on UIM protection have to be explicitly within the statutes, not inferred from silence.
Subsequent, Miller pointed to the court docket of appeals’ decade-old resolution in State Farm Mut. Auto. Ins. Co. v. Hunt, 2014 WI App 115, 358 Wis. 2nd 379, 856 N.W.2nd 633. That case invalidated comparable coverage language underneath “strikingly comparable” details: a collision with a government-owned snowplow. Nevertheless, Hunt doesn’t management as a result of it was determined underneath an older model of § 632.32 that imposed extra stringent necessities on UIM protection.
Lastly, Miller asserted that the coverage’s definition of “underinsured motorcar” was “arbitrary and creates an absurd end result” the place protection relied on the happenstance of the opposite car. The court docket disagreed on each factual and authorized grounds. Factually, the definition doesn’t result in an absurd end result as a result of the insured wouldn’t have the ability to get better greater than statutory caps from the governmental entity. Legally, the omnibus statute has no provision prohibiting an arbitrary definition of “underinsured motorcar.” Moderately, “Brey signaled our supreme court docket’s approval of West Bend’s freedom to contractually outline the scope of UIM protection inside its insurance coverage insurance policies with out working afoul of Wis. Stat. § 632.32.”
This resolution reaffirms that the 2011 amendments to Wisconsin’s motorcar insurance coverage legal guidelines present insurers with extra flexibility to contractually outline the scope of UIM protection.
