Case Title: Kevin Blum, Jr. v. 1st Auto & Casualty Ins. Co.

Citation: 2010 WI 78

Docket Number: 2008AP001324

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2010-07-14T00:00:00Z

Document:
2010 WI 78 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2008AP1324 
COMPLETE TITLE: 
 
 
Kevin Blum, Jr., by his Guardian ad Litem, Jason 
Studinski, 
          Plaintiff-Appellant-Petitioner, 
WEA Insurance Corporation, 
          Involuntary-Plaintiff, 
     v. 
1st Auto & Casualty Insurance Company, 
          Defendant-Respondent. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2009 WI App 19 
Reported at: 315 Wis. 2d 822, 762 N.W.2d 819 
(Ct. App 2009-Published) 
 
 
OPINION FILED: 
July 14, 2010   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
February 10, 2010   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Sauk   
 
JUDGE: 
Guy D. Reynolds   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
CONCUR & DISSENT: 
BRADLEY, J., concurs in part/dissents in part 
(opinion filed). 
ABRAHAMSON, C.J., joins concurrence/dissent. 
 
ROGGENSACK, J., concurs in part/dissents in part 
(opinion filed). 
ZIEGLER and GABLEMAN, JJ., join the 
concurrence/dissent. 
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the plaintiff-appellant-petitioner there were briefs by 
J. Michael Riley, Timothy M. Barber, and Axley Brynelson, LLP, 
Madison, and oral argument by J. Michael Riley. 
 
For the defendant-respondent there was a brief by Rick J. 
Mundt, Chet Holzbauer, and Winner, Wixson & Pernitz, Madison, 
and oral argument by Rick J. Mundt. 
 
 
 
2 
An amicus curiae brief was filed by Lynn R. Laufenberg and 
the Laufenberg Law Group, S.C., Milwaukee, on behalf of the 
Wisconsin Association for Justice. 
 
An amicus curiae brief s filed by James A. Friedman, Bryan 
J. Cahill, and Godfrey & Kahn, S.C., Madison, on behalf of the 
Wisconsin Insurance Alliance. 
 
 
 
 
2010 WI 78
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2008AP1324   
(L.C. No. 
2006CV636) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Kevin Blum, Jr., by his Guardian ad Litem, 
Jason Studinski 
 
          Plaintiff-Appellant-Petitioner, 
 
WEA Insurance Corporation, 
 
          Involuntary-Plaintiff, 
 
     v. 
 
1st Auto & Casualty Insurance Company, 
 
          Defendant-Respondent. 
 
 
 
FILED 
 
JUL 14, 2010 
 
A. John Voelker 
Acting Clerk of 
Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed.   
 
¶1 
DAVID T. PROSSER, J.   This is a review of a published 
decision of the court of appeals, Blum v. 1st Auto & Casualty 
Insurance Co., 2009 WI App 19, 315 Wis. 2d 822, 762 N.W.2d 819, 
affirming an order of the Circuit Court for Sauk County, Guy D. 
Reynolds, Judge.  The circuit court granted summary judgment to 
1st Auto & Casualty Insurance Company (1st Auto) on grounds that 
Kevin Blum (Blum) was not entitled to the uninsured motorist 
No.  2008AP1324 
2 
 
(UM) coverage in his policy because the owner of the uninsured 
vehicle 
involved 
in 
an 
accident 
involving 
Blum 
was 
not 
negligent, while the negligent operator of that vehicle was 
insured.  The court of appeals affirmed, reasoning that although 
the UM policy provision was ambiguous, Wis. Stat. § 632.32(4)(a) 
(2005-06)1 does not mandate coverage when the alleged tortfeasor 
in an automobile accident is insured, and a reasonable person 
would not expect to receive more UM coverage than contemplated 
by the statute.  Accordingly, it held that the policy did not 
provide UM coverage for Blum under these facts. 
¶2 
In its analysis, the court of appeals relied on 
holdings in Hemerley v. American Family Mutual Insurance Co., 
127 Wis. 2d 304, 379 N.W.2d 860 (Ct. App. 1985), a decision that 
this court expressly overruled in Hull v. State Farm Mutual 
Automobile 
Insurance Co., 222 Wis. 2d 627, 586 N.W.2d 863 
(1998).  The court of appeals reasoned that Hemerley could still 
be used as precedent for holdings that had not been specifically 
overruled by this court.   
¶3 
We conclude the following:  
A. 
The UM policy in this case is unambiguous and does not 
provide UM coverage when the owner of an uninsured motor vehicle 
was not negligent.  The provisions on liability in the UM 
policy, read separately or as a whole, do not contemplate 
                                                 
1 All subsequent references to the Wisconsin Statutes are to 
the 2005-06 version unless otherwise indicated.  Wis. Stat. 
§ 632.32 was recently amended by 2009 Wis. Act 28, §§ 3154-55.  
These changes were effective November 1, 2009, and therefore do 
not affect the outcome of this case. 
No.  2008AP1324 
3 
 
coverage when the owner of an uninsured motor vehicle is not 
negligent and has no other basis of liability for an accident. 
B. 
Former Wis. Stat. § 632.32(4) did not mandate coverage 
in a situation where the sole alleged tortfeasor was insured and 
his insurance equaled the level of UM coverage in the injured 
insured's policy. 
C. 
A court of appeals decision loses all precedential 
value when it is overruled by this court.  Although the court of 
appeals correctly concluded that UM coverage was unavailable on 
these facts, it should not have relied on Hemerley to reach this 
conclusion because that decision no longer possessed any 
precedential value.  
¶4 
Accordingly, we affirm the decision of the court of 
appeals. 
I. BACKGROUND AND PROCEDURAL HISTORY 
¶5 
The facts of this case are undisputed.  Kevin Blum was 
seriously injured after jumping on the hood of a pickup truck 
driven by Nicholas Burch (Nicholas).   Nicholas accelerated the 
truck, then applied the brakes, causing Blum to be thrown off 
the vehicle and to strike his head on the curb.  Blum's counsel 
describes the resulting injuries as catastrophic. 
¶6 
The pickup was owned by Nicholas's father, Bruce Burch 
(Bruce), who did not have an insurance policy on the vehicle at 
the time of the accident.  Nicholas himself was covered by a 
liability insurance policy with American Standard Insurance 
Company (American Standard).  Prior to this lawsuit, Blum 
released Nicholas and American Standard from further liability 
No.  2008AP1324 
4 
 
in exchange for a settlement of $250,000, the maximum under 
American Standard's liability limits. 
¶7 
At the time of the accident, Blum was covered by a 
family insurance policy from 1st Auto.  Under Part C of the 
policy, entitled "Uninsured Motorist", paragraph A of the 
Insuring Agreement provided: 
A. 
We will pay compensatory damages which an 
insured is legally entitled to recover from the owner 
or operator of an uninsured motor vehicle because of 
bodily injury: 
1. 
Sustained by any insured; and 
2. 
Caused by an accident. 
The owner's or operator's liability for these damages 
must arise out of the ownership, maintenance or use of 
the uninsured motor vehicle. 
. . . .  
Uninsured motor vehicle means a land motor vehicle or 
trailer of any type: 
1. 
To which no bodily injury liability bond, or 
policy applies at the same time of the accident. 
¶8 
After discovering that Bruce had no insurance for the 
pickup, Blum's attorney, Lee Atterbury, gave 1st Auto notice of 
a claim under the UM provision of the 1st Auto policy.  A claims 
representative responded to Atterbury, inquiring into his theory 
of liability regarding the negligence of the vehicle owner.  In 
response, Atterbury claimed that Bruce had negligently entrusted 
the vehicle to Nicholas.  1st Auto did not pay the claim. 
¶9 
Blum sued, seeking compensation for UM benefits.  1st 
Auto moved for summary judgment on the ground that its UM 
No.  2008AP1324 
5 
 
coverage is not available where the negligent operator of a 
vehicle is insured, but the non-negligent owner is not.  In 
time, Blum conceded that he could not establish that Bruce was 
negligent, but he asserted that the 1st Auto policy provided UM 
benefits by virtue of the fact that Bruce did not have insurance 
for the vehicle. 
¶10 The circuit court granted summary judgment to 1st 
Auto, concluding that the policy's UM provision could not 
reasonably 
be 
understood 
as 
supplementing 
the 
insurance 
available to an insured driver.  It reasoned that "to ascribe 
the meaning plaintiff argues for would inescapably lead to the 
conclusion that plaintiff's uninsured motorist coverage covers 
insured motorists." 
¶11 The court of appeals affirmed.  Relying on part of the 
analysis in Hemerley, the court held that the language of the 
policy was ambiguous.  Blum, 315 Wis. 2d 822, ¶10.  The court 
then concluded, based on Hemerley, that "[a] reasonable person 
would understand the words in the policy to provide the coverage 
contemplated by the statute."  Id., ¶11 (quoting Hemerley, 127 
Wis. 2d at 309-10).  The court noted that, while Hull overruled 
Hemerley's 
interpretation 
of 
§ 632.32(4)(a), 
it 
did 
not 
implicate Hemerley's conclusion that the contract was ambiguous 
and that a reasonable insured would interpret the contract to 
provide the statutorily required coverage.  Id., ¶14. 
¶12 Because it concluded that the policy language was 
ambiguous but followed the statutory requirements, the court of 
appeals looked to the statute and this court's interpretation of 
No.  2008AP1324 
6 
 
the statute in Hull to resolve the ambiguity.  Id., ¶19.  The 
court then noted that Hull "requires UM coverage whenever either 
the owner or the operator of a motor vehicle is allegedly 
negligent and not covered by liability insurance."  Id.  
Applying this rule, the court concluded that UM coverage was not 
required because the negligent operator of the vehicle was 
covered by liability insurance.  Id. 
¶13 Blum petitioned this court for review, which we 
granted. 
II. STANDARD OF REVIEW 
¶14 We review a circuit court's grant of summary judgment 
de novo, using the same methodology employed by the circuit 
court 
under 
Wis. 
Stat. 
§ 802.08. 
 
Smith 
v. 
Katz, 
226 
Wis. 2d 798, 805, 595 N.W.2d 345 (1999).  Under § 802.08(2), a 
court shall grant a motion for summary judgment when there is no 
genuine issue as to any material fact and the moving party is 
entitled to judgment as a matter of law.  Wis. Stat. 
§ 802.08(2). 
¶15 This case involves the interpretation of an insurance 
policy and a statute.  Both matters present questions of law 
that we review de novo, although we benefit from the analyses of 
the circuit court and court of appeals.  Hull, 222 Wis. 2d at 
636; Clark v. American Family Mut. Ins. Co., 218 Wis. 2d 169, 
173, 577 N.W.2d 790 (1998). 
III. DISCUSSION 
¶16 This case presents three issues for our review.  The 
first is whether Blum is entitled to compensation for his 
No.  2008AP1324 
7 
 
injuries under the UM provision of his policy with 1st Auto.  
The second is whether former Wis. Stat. § 632.32(4) required 
coverage under these facts, even if Blum's policy did not 
provide coverage.2  The third is whether a court of appeals 
decision 
possesses 
precedential 
value 
after 
it 
has 
been 
overruled by the supreme court.  We address these issues in 
turn. 
A. 
Coverage Under Blum's UM Policy 
¶17 This case asks us to interpret 1st Auto's policy.  
Such 
an 
exercise 
requires 
us 
to 
apply 
well-established 
principles of contract interpretation and insurance policy 
construction.  We begin our analysis with a review of these 
guiding principles. 
¶18 An insurance policy is a contract and is interpreted 
by the same rules governing contract construction.  Gen. Cas. 
Co. of Wis. v. Hills, 209 Wis. 2d 167, 175, 561 N.W.2d 718 
(1997); Kuhn v. Allstate Ins. Co., 193 Wis. 2d 50, 60, 532 
N.W.2d 124 
(1995). 
 
The 
primary 
objective 
of 
contract 
construction is to ascertain and give effect to the intent of 
the parties.  Johnson Controls, Inc. v. Employers Ins. of 
Wausau, 2003 WI 108, ¶30, 264 Wis. 2d 60, 665 N.W.2d 257 
                                                 
2 In his petition for review, Blum also raised the following 
issues: (1) Whether UM coverage should be determined by the 
ordinary meanings and definitions of terms set forth in the 
insurance policy or by the requirements of § 632.32(4); and (2) 
whether an ambiguous policy should be construed in favor of the 
insured or the drafter.  Both of these issues are encompassed in 
our analysis of whether Blum is entitled to coverage under 
either his UM policy or § 632.32(4). 
No.  2008AP1324 
8 
 
(quoting Hills, 209 Wis. 2d at 175); Maas v. Ziegler, 172 
Wis. 2d 70, 79, 492 N.W.2d 621 (1992).  We determine the 
parties' intent by examining "the four corners of the insurance 
policy itself."  Sambs v. City of Brookfield, 66 Wis. 2d 296, 
317, 224 N.W.2d 582 (1975).  The court must construe policy 
language "to mean what a reasonable person in the insured's 
position would understand it to mean."  Hull, 222 Wis. 2d at 
637; Hills, 209 Wis. 2d at 175. 
¶19 When a policy is clear and unambiguous, it "should not 
be 
rewritten 
by 
construction 
to 
bind 
an 
insurer 
to 
a 
risk . . . it [never] contemplate[d] or [intended] to cover, and 
for which it was not paid."  Limpert v. Smith, 56 Wis. 2d 632, 
640, 203 N.W.2d 29 (1973).  If a policy is ambiguous, the court 
construes terms that limit coverage against the drafter of the 
policy, e.g., the insurer.  Taylor v. Greatway Ins. Co., 2001 WI 
93, ¶10, 245 Wis. 2d 134, 628 N.W.2d 916.  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 contracts, are 
to be read as a whole.  Liebovich v. Minn. Ins. Co., 2008 WI 75, 
¶27, 310 Wis. 2d 751, 751 N.W.2d 764;  Folkman v. Quamme, 2003 
WI 116, ¶24, 264 Wis. 2d 617, 665 N.W.2d 857.  As a result, it 
may be "necessary to look beyond a single clause or sentence to 
capture the essence of an insurance agreement," so that a policy 
No.  2008AP1324 
9 
 
is not "made ambiguous by isolating a small part from the 
context of the whole."  Id., ¶21.   
¶21 The court of appeals held that the use of both the 
term "uninsured motorist" and the term "uninsured motor vehicle" 
created ambiguity in the UM provision.  Blum, 315 Wis. 2d 822, 
¶17.  The term "uninsured motorist" appears eleven times in the 
policy, usually in the phrase "Uninsured Motorist Coverage", and 
also as the title for the section on "Uninsured Motorist" 
benefits.3   The term "uninsured motor vehicle" appears four 
times, all within the Insuring Agreement under Part C——
"Uninsured Motorist."  The court of appeals' determination of 
"ambiguity" resulted from reading those two terms narrowly and 
in isolation, instead of looking to the policy as a whole. 
¶22 Blum argues that he is entitled to coverage under the 
UM provision because the vehicle driven by Nicholas was 
uninsured.  He submits that a vehicle that is uninsured is an 
"uninsured motor vehicle."  1st Auto's UM provision, he 
contends, does not require that the driver of an uninsured motor 
vehicle also have no insurance in order to trigger coverage 
under the UM policy.  Hence, he argues, the fact that Nicholas, 
the driver, had insurance did not defeat Blum's UM coverage 
                                                 
3 In statutory construction, the title or heading of a 
statute is not part of the statute itself.  Wis. Stat. 
§ 990.001(6).  By contrast, we attempt to construe contracts so 
that "each sentence, phrase or word used will have some meaning, 
and 
none 
of 
the 
language 
discarded 
as 
superfluous 
or 
meaningless."  D'Angelo v. Cornell Paperboard Products Co., 59 
Wis. 2d 46, 50, 207 N.W.2d 846 (1973). 
No.  2008AP1324 
10 
 
claim.  Under this ingenious interpretation, the relevant 
inquiry is whether the motor vehicle, not the motorist, is 
uninsured. 
¶23 We believe Blum's interpretation of the UM policy 
misinterprets both the purpose of UM insurance and the kind of 
coverage a reasonable person in the position of the insured 
would expect from this policy.  We conclude that a reasonable 
insured, reading the policy as a whole, would not expect that 
the policy provides coverage under these circumstances.  There 
are at least three reasons why the policy unambiguously does not 
provide coverage under the facts of this case: (1) the alleged 
tortfeasor is insured and no negligence is alleged on the part 
of the uninsured vehicle owner; (2) an insurance policy applied 
to the vehicle at the time of the accident; and (3) the 
tortfeasor's insurance equals the insured's UM coverage. 
¶24 First, the 1st Auto policy encompasses a requirement 
that the uninsured party is actually liable because of the 
party's negligence or because of some other basis for liability.  
The UM provision provides coverage for damages "which an insured 
is legally entitled to recover," and further provides that 
"[t]he owner's or operator's liability for these damages must 
arise out of the ownership, maintenance or use of the uninsured 
motor vehicle."  (Emphasis added.)  These qualifications on 1st 
Auto's liability are directly aligned with the general purpose 
of UM insurance, which is to "protect[] the insured from the 
negligence of the uninsured . . . motorist segment of the public 
by putting the insured in the same position he or she would have 
No.  2008AP1324 
11 
 
been in if the uninsured had liability insurance."  9 Lee R. 
Russ & Thomas F. Segalla, Couch on Insurance, § 122:35 (3d ed. 
1998).  To accept Blum's argument would be to remove the element 
of negligence from the equation.  Under Blum's interpretation, 
1st Auto would be liable even when there was no negligence on 
the part of the driver or the owner, simply because the vehicle 
itself was not insured.  The phrase "uninsured motor vehicle" 
cannot be stretched to such lengths. 
¶25 Second, even if the UM policy were to provide coverage 
any time that a motor vehicle itself was uninsured, the vehicle 
driven by Nicholas would not fall within the policy's definition 
of an uninsured motor vehicle.  The policy defines an uninsured 
motor vehicle as one to which "no bodily injury liability bond, 
or policy applies at the same time of the accident."  Blum 
construes this phrase narrowly to mean a vehicle which is not 
itself insured.  However, an insurance policy may "apply" to a 
vehicle even though the vehicle itself is uninsured.  "Apply" 
means: "To be pertinent or relevant; a rule that applies to 
everyone."  American Heritage Dictionary 89 (3d ed. 1996).   
¶26 If we ask whether there was an insurance policy 
pertinent or relevant to the vehicle involved in this accident, 
the answer is clearly yes.  At the time of the accident, 
Nicholas was insured as a driver under a policy with American 
Standard.  American Standard settled with Blum in the amount of 
$250,000 in exchange for a release from liability.  The American 
Standard policy applied to the vehicle because the operator's 
liability policy was implicated by his operation of the vehicle.  
No.  2008AP1324 
12 
 
Therefore, even if 1st Auto's UM policy hinged on the insured 
status of the vehicle, rather than the motorist, Blum would not 
be eligible for coverage because the vehicle driven by Nicholas 
was not an uninsured motor vehicle under the policy. 
¶27 Third, the presence of a valid reducing clause in 1st 
Auto's policy further supports the conclusion that a reasonable 
person in the position of the insured would not have expected UM 
coverage 
to 
apply 
in 
this 
case.4 
 
Under 
Wis. 
Stat. 
§ 632.32(5)(i), a policy may reduce an insurer's liability for 
UM coverage by an amount "paid by or on behalf of any person or 
organization that may be legally responsible for the bodily 
injury or death for which payment is made."  Part C of the 
Insuring Agreement governing UM coverage includes a section 
titled "Limit of Liability" mirroring the statutory language: 
A. 
The 
single limit of liability for one 
automobile shown in the Declarations for each person 
for 
uninsured 
motorist 
coverage 
is 
our 
maximum 
                                                 
4 Blum urges us to find that 1st Auto waived its right to 
rely on the reducing clause because it first raised this 
argument in this court.  As a matter of judicial economy, 
defenses not raised at the circuit court level are generally 
deemed to have been waived.  Dep't of Taxation v. Scherffius, 62 
Wis. 2d 687, 696-97, 215 N.W.2d 547 (1974).  These concerns, 
however, are less relevant when new arguments are raised by 
respondents who seek "to uphold rather than reverse the result 
reached at trial."  State v. Holt, 128 Wis. 2d 110, 124-25, 382 
N.W.2d 679 (Ct. App. 1985).  Furthermore, it is well-established 
law in Wisconsin that an appellate court may sustain a lower 
court's ruling "on a theory or on reasoning not presented to the 
lower court."  Liberty Trucking Co. v. DILHR, 57 Wis. 2d 331, 
342, 204 N.W.2d 457 (1973).  The validity and application of a 
reducing clause is a matter of law, and we may properly consider 
it as alternative grounds to find that Blum is not entitled to 
UM coverage.   
No.  2008AP1324 
13 
 
liability for all damages . . . arising out of bodily 
injury sustained by any one person.   
. . . .  
D. 
The limits of liability payable for this 
coverage will be reduced by:  
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 payment is made. 
¶28 In other words, when an accident falling under the UM 
coverage results in payment to the insured by the tortfeasor, 
this provision reduces 1st Auto's liability by the amount of 
that payment.  This provision reflects the parties' expectation 
that the insured would be covered only if a tortfeasor's lack of 
insurance placed the insured in a worse position than he or she 
would have been in if the tortfeasor had been insured. 
¶29 We have held that reducing clauses with common, 
ordinary language substantially similar to the statute are 
unambiguous when standing alone.  State Farm Mut. Auto. Ins. Co. 
v. Bailey, 2007 WI 90, ¶26, 302 Wis. 2d 409, 734 N.W.2d 386.  An 
otherwise unambiguous reducing clause may be rendered ambiguous, 
however, in the context of the entire policy.  See Folkman, 264 
Wis. 2d 617, ¶21.  A policy that builds up false expectations, 
contains internally inconsistent provisions, or is so "deceptive 
that it befuddles the understanding and expectations of a 
reasonable insured" will be considered contextually ambiguous.  
Id., ¶¶20, 31.  1st Auto's policy cannot be accused of these 
faults. 
No.  2008AP1324 
14 
 
¶30 The Declarations page of the policy provides a summary 
of the most pertinent terms of coverage.  On this page, the term 
"Uninsured Motorist Coverage" is immediately followed by a 
double asterisk which leads to the statement, two lines below: 
"Limits might be reduced by policy provision or law."  Moreover, 
the reducing clause itself is found, not buried in fine print or 
an appendix, but in the same section of the policy governing UM 
coverage.  There is nothing to create a misapprehension or give 
rise to conflicting interpretations in the mind of a reasonable 
insured as to the purpose and effect of the reducing clause.  
The clause is not contextually ambiguous.  
¶31 When 
we 
consider 
the 
facts 
in 
light 
of 
this 
unambiguous reducing clause, the policy clearly does not provide 
UM coverage in this situation.  Blum received $250,000 from 
American Standard in exchange for its release from liability.  
This payment recognizes American Standard's legal liability for 
Nicholas's negligence, and as such, it represents the exact 
payment contemplated in the limits of liability described above.  
Had he been eligible for UM coverage, Blum would have been 
entitled to $250,000 under his policy.  Therefore, even if this 
accident had fallen within the terms of UM coverage, Blum would 
not have been entitled to any payment from 1st Auto, because the 
settlement from American Standard exactly offset the amount to 
which he would have been entitled under the policy.   
¶32 This result confirms our conclusion that it is 
unreasonable for Blum to expect UM coverage in a situation where 
an applicable insurance policy for the operator has provided 
No.  2008AP1324 
15 
 
compensation for Blum's injuries equal to the limit on Blum's UM 
policy.  The language of the policy, read as a whole, is 
unambiguous.  A reasonable person in the position of the insured 
would not construe this policy as providing coverage when the 
insured 
has 
already 
recovered 
damages 
from 
an 
insured 
tortfeasor.  Because the UM provision is unambiguous, we need 
not address whether this provision must be construed against 1st 
Auto as the drafter. 
B. 
Statutory Requirements for Uninsured Motorist Coverage 
¶33 Having concluded that the policy unambiguously does 
not provide coverage in this circumstance, we turn to whether 
the UM statute in effect at the time of the accident mandated 
coverage.  The UM section provided, in relevant part: 
Required Uninsured Motorist and Medical Payments 
Coverages.  Every policy of insurance subject to this 
section that insures with respect to any motor vehicle 
registered 
or 
principally garaged in this state 
against loss resulting from liability imposed by law 
for bodily injury or death suffered by any person 
arising out of the ownership, maintenance or use of a 
motor vehicle shall contain therein or supplemental 
thereto provisions approved by the commissioner: 
(a) Uninsured Motorist.  1.  For the protection 
of persons injured who are legally entitled to recover 
damages from owners or operators of uninsured motor 
vehicles 
because 
of 
bodily 
injury, 
sickness 
or 
disease, 
including 
death 
resulting 
therefrom, 
in 
limits of at least $25,000 per person and $50,000 per 
accident. 
Wis. Stat. § 632.32(4) (emphasis added). 
¶34 In Hull, this court interpreted the requirements of 
Wis. Stat. § 632.32(4) when the driver is insured but the motor 
No.  2008AP1324 
16 
 
vehicle is not.  We concluded that "§ 632.32(4) requires UM 
coverage whenever either the owner or the operator of a motor 
vehicle is allegedly negligent and is not covered by liability 
insurance."  Hull, 222 Wis. 2d 627 at 632 (emphasis added). 
¶35 Hull involved two alleged tortfeasors: the driver of a 
vehicle that struck and killed the deceased and the owner of 
that vehicle who negligently maintained it.  Id. at 633.  The 
driver's use of the vehicle was insured, but the owner did not 
have a liability policy covering the vehicle or its operation.  
Id. at 632.  State Farm denied Hull's spouse UM coverage on the 
grounds that the driver's use of the vehicle was insured and 
thus the vehicle was not an "uninsured motor vehicle" under the 
policy.  Id. at 633.  We held that Hull was entitled to UM 
coverage for the uninsured owner's negligence under a plain 
reading of her State Farm policies, but proceeded to consider 
her claim under the statute in the interests of furthering 
judicial economy.  Id. at 640 n.7.   
¶36 We held that the term "uninsured motor vehicle" was 
ambiguous in the statute, and examined the legislative purpose 
No.  2008AP1324 
17 
 
to determine whether Hull was entitled to coverage.5  We 
described the purpose of § 632.32(4) as to place the insured in 
the same position as if the tortfeasor had been insured.  Id. at 
643-44.  Where there were multiple tortfeasors, the fact that 
the driver was insured did not preclude Hull from seeking UM 
coverage for the acts of the uninsured owner as compensation for 
the insurance the negligent owner should have had.  Id. at 646. 
¶37 The 
factual 
scenario 
in 
the 
instant 
case 
is, 
essentially, the reverse of Hull.  Hull sought coverage against 
an owner who was both negligent and uninsured.  Blum seeks UM 
coverage because an owner was uninsured, even though he was not 
negligent.  Blum asserts that the uninsured status of the 
vehicle is enough to provide coverage.  His argument focuses on 
language in Hull concluding that the insured was entitled to UM 
coverage if either the owner or driver was uninsured, while 
glossing over the phrase restricting this coverage to situations 
in which the uninsured party is liable.  To put it differently, 
under Hull a party is entitled to UM coverage if she can 
                                                 
5 The court of appeals had previously interpreted the 
statute in Hemerley v. American Family Mutual Insurance Co., 127 
Wis. 2d 304, 379 N.W.2d 860 (Ct. App. 1985).  Faced with a 
similar factual scenario, the court of appeals concluded that 
the term "uninsured motor vehicle" was ambiguous as it appeared 
in the statute.  Id. at 308.  The court of appeals concluded 
that the statute contemplated only those motor vehicles where 
neither the owner nor the operator is insured in order for the 
insured to collect UM benefits.  Id. at 310.  Although  the Hull 
court agreed with the Hemerley court's conclusion that the 
statute was ambiguous, it rejected Hemerley's holding as 
contrary to the legislative purpose of § 632.32(4).  Hull, 222 
Wis. 2d at 644-46. 
No.  2008AP1324 
18 
 
demonstrate that somebody——whether the owner or operator——was 
both negligent and uninsured.  In Hull, the owner of the vehicle 
in question was allegedly both negligent and uninsured.  Here, 
Blum alleged that Nicholas was negligent, but Nicholas was 
insured.  Blum could not allege that the uninsured party, Bruce, 
was negligent.  Therefore, § 632.32(4), as interpreted in Hull, 
does not mandate coverage here. 
¶38 Denying UM coverage under these circumstances furthers 
the purpose of the statute.  The statute sought to provide 
coverage to an innocent victim for the negligence of an 
uninsured tortfeasor.  Hull, 222 Wis. 2d at 646.  It did not 
seek to establish a duplicative source of compensation where the 
only party with legal liability is insured.  Had the vehicle in 
this case been covered by insurance, the insurance would not 
have compensated Blum unless he had established negligence or 
other liability on the part of the owner.  Similarly, in the 
absence of negligence by the uninsured party, the statute does 
not mandate UM coverage. 
¶39 In 
discussing 
Hemerley's 
interpretation 
of 
the 
legislative purpose, Hull emphasized that "[i]n Hemerley, the 
sole alleged tortfeasor, the driver of the vehicle, was 
insured."  Id. at 645.  In Hull, both the driver and the owner 
were allegedly negligent.  Id. at 645-46.  The court noted that, 
in such circumstances, UM coverage was necessary to further the 
purpose of the statute: 
The only way in which to place Hull in the same 
position she would have been in, had the uninsured 
No.  2008AP1324 
19 
 
motorist been insured, is to require that UM coverage 
be provided to her. In the absence of UM coverage for 
the owner's alleged negligence, Hull would be denied a 
source 
of 
compensation 
for 
the 
owner's 
alleged 
negligence, 
even 
though 
the 
driver's 
alleged 
negligence 
would 
be 
covered 
under 
the 
driver's 
Milwaukee Mutual insurance policy. 
Id. at 646. 
¶40 The Hull court's emphasis on the differences between 
the facts in Hull and the facts in Hemerley further supports the 
conclusion that mandating coverage here would not further the 
purpose of § 632.32(4).  Unlike Hull, Blum was not "denied a 
source of compensation for the owner's alleged negligence."  Id.  
He was provided a source of compensation——$250,000 under the 
American Standard policy——for the only negligence he alleged: 
the driver's. 
¶41 In 
sum, 
Hull's 
interpretation 
of 
§ 632.32(4) 
conclusively resolves the statute's application to these facts.  
Because Blum alleged negligence only on the part of the insured 
driver, § 632.32(4) does not mandate UM coverage. 
C. 
Precedential Value of Overruled Court of Appeals Decisions 
¶42 We next address whether a court of appeals decision 
retains any precedential value when it is overruled by this 
court.  We hold that when the supreme court overrules a court of 
appeals decision, the court of appeals decision no longer 
possesses any precedential value, unless this court expressly 
states otherwise. 
¶43 In this case, the court of appeals relied on Hemerley 
to support its interpretation of the policy.  Blum, 315 
Wis. 2d 822, ¶9.  In Hull, this court held: "For the sake of 
No.  2008AP1324 
20 
 
clarity, we choose to overrule Hemerley rather than limit it to 
its facts."  Hull, 222 Wis. 2d at 646 n.12.  The court of 
appeals reasoned that, because Hull's ruling on the construction 
of the statute did not implicate Hemerley's interpretation of 
the 
policy, 
Hemerley's 
holding 
on 
the 
policy 
remained 
precedential.  Blum, 315 Wis. 2d 822, ¶¶14, 17.   
¶44 The court of appeals has developed a body of law 
regarding the precedential value of its reversed and overruled 
opinions.  As applied by the court of appeals, "[t]he general 
rule is that holdings not specifically reversed on appeal retain 
precedential value."  Sweeney v. Gen. Cas. Co. of Wis., 220 
Wis. 2d 183, 192, 582 N.W.2d 735 (Ct. App. 1998) (emphasis 
added).  The court first described this rule in Spencer v. 
Brown, although it declined to apply the rule under the specific 
circumstances of that case.  Spencer v. County of Brown, 215 
Wis. 2d 641, 650-51, 573 N.W.2d 222 (Ct. App. 1997).  It has 
since applied this rule on several occasions.  See, e.g., 
Schauer v. Diocese of Green Bay, 2004 WI App 180, ¶15, 276 
Wis. 2d 141, 687 N.W.2d 766; Peace Lutheran Church & Academy v. 
Village of Sussex, 2001 WI App 139, ¶15 n.5, 246 Wis. 2d 502, 
631 N.W.2d 229; State v. Byrge, 225 Wis. 2d 702, 717-18 n.7, 594 
N.W.2d 388 (Ct. App. 1999), aff'd, 2000 WI 101, 237 Wis. 2d 197, 
614 N.W.2d 477. 
¶45 The general rule developed by the court of appeals 
applied to cases that were reversed on direct review by this 
court.  Blum, 315 Wis. 2d 822, ¶16.  However, the court of 
appeals in this case reasoned that the rule should also apply 
No.  2008AP1324 
21 
 
where the court of appeals was overruled by this court while 
this court was reviewing another case.  Id.   
¶46 We now hold that it was error for the court of appeals 
to rely on Hemerley, because Hemerley no longer possessed any 
precedential value.  Unless this court explicitly states 
otherwise, a court of appeals opinion overruled by this court no 
longer retain any precedential value.  This conclusion is 
supported by the constitutionally designated purposes of this 
court 
and 
the 
court 
of 
appeals, 
as 
well 
as 
practical 
considerations. 
¶47 First, retaining precedential value in overruled court 
of appeals decisions would not serve the purposes of the supreme 
court or the court of appeals.  In Cook v. Cook, this court 
compared the roles of the supreme court and the court of 
appeals.  Cook v. Cook, 208 Wis. 2d 166, 188-89, 560 N.W.2d 246 
(1997).  The court of appeals' "primary function is error 
correcting. 
 
Nevertheless 
under 
some 
circumstances 
it 
necessarily performs a second function, that of law defining and 
law development."  Id. at 188.  The court went on to describe 
the purposes of the supreme court: 
In contrast, the supreme court's primary function 
is that of law defining and law development. . . .  
The purpose of the supreme court is to oversee and 
implement the statewide development of the law.  The 
supreme court is the only state court with the power 
to overrule, modify or withdraw language from a 
previous supreme court case. 
Id. at 189 (internal quotations and citations omitted). 
No.  2008AP1324 
22 
 
¶48 This purpose is reflected by the manner in which this 
court accepts and reviews cases.  Our Internal Operating 
Procedures state that our "principal criterion in granting or 
denying review is not whether the matter was correctly decided 
or justice done in the lower court, but whether the matter is 
one that should trigger the institutional responsibilities of 
the Supreme Court."  Wis. S. Ct. IOP (Jan. 1, 2010).  Similarly, 
we have interpreted our discretionary reversal power broadly as 
part of our "law-developing or law-declaring function."  State 
v. Schumacher, 144 Wis. 2d 388, 407, 424 N.W.2d 672 (1988).  
Thus, we have said that we may reach issues "of great public 
importance," even if they are moot or the parties would not 
ordinarily have standing to raise them.  Id. at 405.  We also 
have said that we will decide moot issues that may recur for 
which "guidance is needed for the trial courts."  Id. at 405-06.  
Because the court of appeals is "charged primarily with error 
correcting in the individual case," id. at 407 (quoting State ex 
rel. Swan v. Elections Board, 133 Wis. 2d 87, 93-94, 394 
N.W.2d 732 (1986)), we have declined to give the court of 
appeals the same broad power of discretionary reversal, id. at 
408.  
¶49 Thus, when this court accepts review of a case, it 
does so to clarify and develop the law and provide guidance for 
lower courts.  This purpose would not be served by requiring 
this court to address specifically every holding in a court of 
appeals decision to protect the coherence of this court's 
holding.  Such a rule would expand this court's "error-
No.  2008AP1324 
23 
 
correcting" role by requiring the supreme court to repudiate 
each holding in a court of appeals decision that may be 
incorrect.  If questions remained about the precedential value 
of a court of appeals decision once the supreme court had 
overruled that decision, the law-developing value of this 
court's decision would be jeopardized. 
¶50 The primary function of the court of appeals is error 
correction.  As discussed in Cook, the court of appeals' law-
developing role is secondary and arises only "under some 
circumstances," as the court is required to "adapt[] the common 
law 
and 
interpret[] 
the 
statutes 
and 
federal 
and 
state 
constitutions in the cases it decides."  Cook, 208 Wis. 2d at 
188.  The court of appeals' primary function——error correction——
does not require recognizing the precedential value of parts of 
published opinions that have been overruled. 
¶51 The court of appeals' ability to function as an error-
correcting court is strengthened by our holding as it clarifies 
the precedential status of overruled cases.  The court of 
appeals is in a better position to apply established law when 
there is a bright-line rule nullifying the precedential value of 
an overruled court of appeals decision.   
¶52  This policy concern is highlighted by some of the 
confusion that has resulted from the court of appeals' current 
rule.  For example, in Spencer, the court declined to apply the 
rule where this court had explained that its "decision should 
not be taken as approval of the reasoning of the Court of 
Appeals on that issue."  Spencer, 215 Wis. 2d at 650-51 (quoting 
No.  2008AP1324 
24 
 
Anderson v. City of Milwaukee, 208 Wis.2d 18, 559 N.W.2d 563 
(1997)).  In Byrge, the court of appeals noted that "it is not 
clear whether this general rule should apply when the message 
from the supreme court is that the court of appeals should not 
even have addressed the issue in the first instance."  Byrge, 
225 Wis. 2d at 717-18 n.7.  In Sweeney, one party argued that 
the rule should not apply because this court's decision to 
decide a case on different grounds "disavowed" the court of 
appeals' earlier ruling.  Sweeney, 220 Wis. 2d at 192-93.  The 
court of appeals rejected that argument, noting that, "when the 
supreme court wants to disavow our reasoning, or, at least, 
prevent any implicit approval of our reasoning, it does so 
expressly."  Id. at 193. 
¶53 The court of appeals itself expressed concerns as to 
the validity of its current rule by certifying the question to 
this court.  Byrge, 225 Wis. 2d at 717-18 n.7.  Although the 
court did not grant certification of the question at that time, 
Chief Justice Abrahamson noted five years later that the matter 
was still unresolved: "While the court of appeals apparently 
treats all or parts of its decisions as precedential even after 
this court has reviewed them, the question of the precedential 
value of a court of appeals decision that has been reviewed by 
this court has not been decided by this court."  State v. Gary 
M.B., 2004 WI 33, ¶44 n.1, 270 Wis. 2d 62, 676 N.W.2d 475 
(Abrahamson, C.J., dissenting).  Shortly thereafter, the court 
of appeals again noted that "we have also expressed some concern 
about applying that principle in certain situations."  Ten Mile 
No.  2008AP1324 
25 
 
Inv. v. Sherman, 2007 WI App 253, ¶15, 306 Wis. 2d 799, 743 
N.W.2d 442.  By providing a bright-line rule, we seek to 
eliminate the confusion that has surrounded this issue. 
¶54 One might argue that the court of appeals' current 
rule serves to fill in the "gaps" not expressly addressed by 
this court.  But these cases suggest that the court's rule has 
not been consistently applied and has created more confusion 
than clarity.  Circuit courts should not be forced to engage in 
legal analysis as to precisely which holdings in court of 
appeals decisions are still good law, or whether, based on some 
particular language in the supreme court decision, the general 
rule should not be applied.  A bright-line rule that this court 
overrules a court of appeals decision in its entirety, unless it 
expressly states otherwise, will prevent this kind of confusion. 
¶55 The public and litigants are entitled to clear and 
understandable legal rules.  Litigants do not benefit when they 
are put in the position of relying on a decision that is of 
questionable precedential value; relying on a decision that 
cites such a decision; or having their case decided upon 
precedent that this court had intended to overrule but had not 
said so expressly.  This principle applies not only to litigants 
before trial courts and the court of appeals, but also to the 
public as a whole, which is equally entitled to consistency in 
the law.  Therefore, our holding today not only clarifies the 
law for circuit courts and litigants, but also clarifies the law 
for the public as a whole. 
No.  2008AP1324 
26 
 
¶56 For these reasons, we conclude that a court of appeals 
decision expressly overruled by this court no longer retains any 
precedential value, unless this court expressly states that it 
is leaving portions of the court of appeals decision intact.  
Although we affirm the court of appeals, it was error for the 
court to rely on Hemerley as authority for its interpretation of 
the policy language. 
IV. CONCLUSION 
¶57 We conclude the following:  
A. 
The UM policy in this case is unambiguous and does not 
provide UM coverage when the owner of an uninsured motor vehicle 
was not negligent.  The provisions on liability in the UM 
policy, read separately or as a whole, do not contemplate 
coverage when the owner of an uninsured vehicle is not negligent 
and has no other basis of liability for an accident. 
B. 
Former Wis. Stat. § 632.32(4) did not mandate coverage 
in a situation where the sole alleged tortfeasor was insured and 
his insurance equaled the level of UM coverage in the injured 
insured's policy. 
C. 
A court of appeals decision loses all precedential 
value when it is overruled by this court.  Although the court of 
appeals correctly concluded that UM coverage was unavailable on 
these facts, it should not have relied on Hemerley to reach this 
conclusion because that decision no longer possessed any 
precedential value.  
Therefore, we affirm the decision of the court of appeals. 
 
No.  2008AP1324 
27 
 
By the Court.—The decision of the court of appeals is 
affirmed. 
 
 
 
No.  2008AP1324.awb 
 
1 
 
¶58 ANN 
WALSH 
BRADLEY, 
J.   (concurring 
in 
part, 
dissenting in part).  I agree with the majority that after the 
supreme court has overruled a court of appeals decision, that 
court of appeals decision no longer possesses any precedential 
value, unless this court has expressly stated otherwise.  
Majority op., ¶42.  Therefore, I join Part III C of the majority 
opinion in full.   
¶59 I part ways with the majority, however, on the 
interpretation and application of this insurance policy.  The 
majority correctly explains that the purpose of uninsured 
motorist (UM) coverage under Wis. Stat. § 632.32(4) is to "place 
the insured in the same position as if the tortfeasor had been 
insured."  Id., ¶36. 
¶60 I also agree with the majority that the parties' 
expectation is that the UM insured (Blum) would be covered under 
the UM policy "if a tortfeasor's lack of insurance placed the 
insured in a worse position than he or she would have been in if 
the tortfeasor had been insured."  Id., ¶28. 
¶61 Both the purpose of UM coverage and the expectations 
of the parties are that the UM insured should not be in a worse 
position just because the tortfeasor did not have coverage under 
an automobile liability policy.  See Hull v. State Farm Mut. 
Auto. Ins. Co., 222 Wis. 2d 627, 643-44, 586 N.W.2d 863 (1998).  
Yet, under the majority's analysis Blum is in a worse position.  
Why is this? 
¶62 It is because the majority fails to recognize that if 
the father's vehicle had been insured, the son-tortfeasor would 
No.  2008AP1324.awb 
 
2 
 
have been a named insured under the father's policy as a 
resident of the household.  Blum, then, would be in a better 
position because he would have had two liability policies from 
which to seek recovery instead of one.  
¶63 He could seek recovery from the liability policy 
covering the vehicle, which would have provided coverage for 
injuries caused by the son's negligence.  Further, because the 
son also had his own liability policy, Blum would have been able 
to recover from that policy as well.   
¶64 It is on this precise point that the majority's 
analysis falters. It is built around the false premise that Blum 
is not in a worse position because he was not "denied a source 
of compensation" for his injuries.  Majority op., ¶40.  The 
majority contends that, "[h]ad the vehicle in this case been 
covered by insurance, the insurance would not have compensated 
Blum unless he had established negligence or other liability on 
the part of the owner."  Id., ¶38.  This statement is simply 
incorrect.  As a member of the father's household, the son-
tortfeasor would be considered a named insured on a liability 
policy the father took out covering the vehicle.1   
¶65 When I examine the policy, I conclude that it is 
ambiguous and should be construed in favor of coverage.  Because 
1st Auto did not raise the issue of the reducing clause until 
its response brief in this court, I would not make any 
determinations about the validity of the reducing clause.  
                                                 
1 See Wis. Stat. § 632.32(6)(b) ("No policy may exclude from 
the coverage afforded or benefits provided: (1) Persons related 
by blood, marriage or adoption to the insured."). 
No.  2008AP1324.awb 
 
3 
 
Rather, I would remand to the circuit court for full development 
of the issue and a determination of whether the reducing clause 
applies to reduce Blum's UM compensation.  Accordingly, I 
respectfully concur in part and dissent in part. 
I 
¶66 The majority provides three reasons to support its 
conclusion that the policy unambiguously does not provide 
coverage here: (1) Blum is not "legally entitled to recover" 
damages from the "owner" of the vehicle; (2) the vehicle is not 
an uninsured motor vehicle because the driver's policy "applied" 
to the vehicle at the time of the accident; and (3) even if 
Blum's policy provided coverage, the reducing clause would 
reduce Blum's recovery to $0.  See id., ¶23.  I address each of 
the majority's conclusions in turn. 
¶67 I begin with the UM insuring agreement.  It provides: 
"We will pay compensatory damages which an insured is legally 
entitled to recover from the owner or operator of an uninsured 
motor vehicle[.]"  (Emphasis added.)  The majority's focus is on 
the damages that Blum would be entitled to recover from Bruce 
Burch, the owner of the vehicle.  Id., ¶24.  It asserts that 
because Bruce Burch was not negligent, Blum is not legally 
entitled to recover compensatory damages from the owner or 
operator of the vehicle.  Id.  It contends that Blum's 
interpretation "remove[s] the element of negligence from the 
equation."  Id.   
¶68 This conclusion misses the mark.  By focusing on 
whether Blum would be entitled to recover damages from the owner 
No.  2008AP1324.awb 
 
4 
 
of the vehicle, the majority ignores the fact that Blum is 
legally entitled to recover damages from the operator of the 
vehicle, 
Nicholas 
Burch, 
who 
was 
negligent.2 
 
Blum's 
interpretation does not remove the element of negligence from 
the equation.      
¶69 A liability policy taken out on a vehicle covers more 
than the liability incurred by the vehicle's owner.  It also 
covers liability incurred by other insureds when they are 
driving that vehicle.  Had there been a liability policy on the 
vehicle, Blum would have been legally entitled to recover 
compensatory damages from that policy due to Nicholas Burch's 
negligence.  He also would have been entitled to recover 
compensatory damages from Nicholas Burch's separate American 
Standard policy.   
II 
¶70 I turn to the policy definition of an "uninsured motor 
vehicle."  It provides that an uninsured motor vehicle is a land 
motor vehicle "[t]o which no bodily injury liability bond, or 
policy applies at the same time of the accident."    
¶71 Blum asserts that any vehicle that does not have an 
insurance policy is an uninsured motor vehicle.  On its face, 
this interpretation sounds reasonable.   
                                                 
2 Prior to the lawsuit, Blum entered into a settlement 
agreement 
with 
Nicholas 
Burch 
and 
his 
insurer, 
American 
Standard.  Depending upon its terms, the settlement agreement 
could affect Blum's entitlement to proceeds arising out of 
Nicholas Burch's negligent operation of the uninsured motor 
vehicle.  Nevertheless, the settlement agreement would not 
change the interpretation of the UM policy, which is the larger 
question at issue here.   
No.  2008AP1324.awb 
 
5 
 
¶72 Yet, the majority casts aside Blum's interpretation of 
the policy, calling it "ingenious."  Majority op., ¶22.  It 
focuses instead on the word "applies."  Id., ¶25.  Citing a 
dictionary definition of "apply," it asserts that a policy may 
apply to a vehicle even if the vehicle is uninsured.  It 
concludes that this vehicle was not an uninsured motor vehicle 
at the time of the accident because Nicholas Burch's American 
Standard policy was "implicated."    
¶73 Contrary to the majority, I conclude that a reasonable 
insured would likely interpret the language to mean that a 
policy "applied" to a vehicle if there was a liability policy on 
that vehicle.  With this understanding, a reasonable insured 
would determine that no policy applied to the vehicle driven by 
Nicholas Burch.    
¶74 Even if the majority's interpretation of the policy 
term "applies" is also reasonable, the policy language would be 
rendered ambiguous.  Ambiguous language in an insurance policy 
is construed in favor of coverage.  Folkman v. Quamme, 2003 WI 
116, ¶13, 264 Wis. 2d 617, 665 N.W.2d 857.    
III 
¶75 Finally, I examine the majority's application of the 
reducing clause.  It may well be that the reducing clause is 
valid and could be applied to reduce Blum's recovery.  However, 
1st Auto did not raise the issue of the reducing clause in the 
circuit court or in the court of appeals.  The reducing clause 
was not raised until 1st Auto filed its response brief in this 
court. 
No.  2008AP1324.awb 
 
6 
 
¶76 As a general rule, issues not raised in the circuit 
court will not be considered for the first time on appeal.   
Marotz v. Hallman, 2007 WI 89, ¶16, 302 Wis. 2d 428, 734 
N.W.2d 411.  This court may, however, use its discretion to 
decide an issue that was not raised in the circuit court when 
that issue is a question of law, briefed by both parties, and of 
sufficient public interest to merit a decision.  Id.   
¶77 Not all reducing clauses are valid.  Some are 
unenforceable because they are ambiguous——either in isolation or 
in the context of the policy as a whole, and others are 
unenforceable because they are contrary to law.  See, e.g., 
Badger Mut. Ins. Co. v. Schmitz, 2002 WI 98, ¶7, 255 Wis. 2d 61, 
647 N.W.2d 223.  At oral argument, Blum's attorney asserted that 
1st Auto's reducing clause might be unenforceable, but because 
1st Auto did not raise the issue until the last moment, these 
arguments had not been explored.  He asserted: "We have not 
researched it, we have not briefed it.  There was no possibility 
of doing that in a reply brief."  Given that the issue of the 
reducing clause has not been fully briefed and argued, I 
conclude that it should not be decided by this court. 
 
¶78 In 
sum, 
I 
determine 
that 
Blum's 
UM 
policy 
is 
ambiguous, and I construe it in favor of coverage.  I would 
remand to the circuit court for further briefing and arguments 
about 
the 
validity 
of 
the 
reducing 
clause 
and 
for 
a 
determination of whether Blum's recovery should be reduced.  
Accordingly, I respectfully concur in part and dissent in part.  
No.  2008AP1324.awb 
 
7 
 
 
¶79 I am authorized to state that Chief Justice SHIRLEY S. 
ABRAHAMSON joins this concurrence/dissent.   
 
No.  2008AP1324.pdr 
 
1 
 
¶80 PATIENCE DRAKE ROGGENSACK, J. (concurring in part and 
dissenting in part).   I concur in and join the majority 
opinion's conclusion that the uninsured motorist policy in this 
case is unambiguous and does not provide coverage when the owner 
of the uninsured vehicle was not negligent.  I also concur in 
and 
join 
the 
majority's 
conclusion 
that 
Wis. 
Stat. 
§ 632.32(4)(a) 
does 
not 
mandate 
coverage 
under 
these 
circumstances.   
¶81 However, I dissent from the majority's conclusion that 
a court of appeals decision loses all precedential value when it 
is overruled in part by this court.1  I dissent because this 
conclusion is unnecessary to the resolution of the merits of 
this case; it is made without identifying a problem requiring 
this change; and it is made without input from the many 
Wisconsin judges and lawyers who will be impacted by the court's 
decision.  
I.  BACKGROUND 
¶82 Whether a court of appeals opinion that has been 
overruled on other grounds retains any precedential value for 
its other holdings has no relevance to the merits of this 
appeal.  Rather, we address it because Chief Justice Abrahamson 
has long promoted a supreme court rule requiring that an 
overruled court of appeals decision becomes a nullity.  See, 
e.g., State v. Gary M.B., 2004 WI 33, ¶44 n.1, 270 Wis. 2d 62, 
676 N.W.2d 475 (Abrahamson, C.J., dissenting) ("My own view at 
this time is that when this court reviews a decision of the 
                                                 
1 Majority op., ¶42. 
No.  2008AP1324.pdr 
 
2 
 
court of appeals, the court of appeals decision no longer has 
precedential value."); Bergmann v. McCaughtry, 211 Wis. 2d 1, 10 
n.8, 564 N.W.2d 712 (1997).   
¶83 Kevin Blum set the stage for this discussion when he 
argued that the court of appeals erred by employing reasoning 
from Hemerley v. American Family Mutual Insurance Co., 127 
Wis. 2d 304, 379 N.W.2d 860 (Ct. App. 1985), which was overruled 
by Hull v. State Farm Mutual Automobile Insurance Co., 222 
Wis. 2d 627, 586 N.W.2d 863 (1998).  Blum's argument permitted 
the court to address its treatment of court of appeals opinions 
that are overruled in part. 
II.  DISCUSSION 
¶84 Whether a court of appeals opinion that has been 
overruled in part retains any precedential value is a policy 
question for this court.  However this policy question is 
resolved, it will not affect the court's substantive decision in 
regard to Blum's claims.   
¶85 The majority opinion begins its discussion recognizing 
that as a general rule, holdings of a court of appeals decision 
not specifically overruled by the Wisconsin Supreme Court or the 
United States Supreme Court retain their precedential value.2  
The majority cites to Sweeney v. General Casualty Co. of 
Wisconsin, 220 Wis. 2d 183, 192, 582 N.W.2d 735 (Ct. App. 1998) 
for this proposition.  The majority opinion explains that the 
court of appeals "first described" this generalized rule in 
                                                 
2 Id., ¶44. 
No.  2008AP1324.pdr 
 
3 
 
Spencer v. City of Brown, 215 Wis. 2d 641, 650-51, 573 N.W.2d 
222 (Ct. App. 1997).3 
¶86 Although it is true that the rule may have been first 
described by the court of appeals in Spencer, citing court of 
appeals opinions for propositions of law that are not overruled 
preceded Spencer.  See, e.g., State v. Williams, 148 Wis. 2d 
852, 855, 436 N.W.2d 924 (Ct. App. 1989) (relying on Town of Two 
Rivers v. DNR, 105 Wis. 2d 721, 315 N.W.2d 378 (Ct. App. 1981), 
overruled on other grounds by Milwaukee Metro. Sewerage Dist. v. 
DNR, 126 Wis. 2d 63, 72, 375 N.W.2d 649 (1985)). 
¶87 Both the Wisconsin Supreme Court and the court of 
appeals have cited to legal principles in court of appeals 
decisions that have been overruled in part.  See, e.g., Folkman 
v. Quamme, 2003 WI 116, ¶64, 264 Wis. 2d 617, 665 N.W.2d 857 
(citing Mills v. Wis. Mut. Ins. Co., 145 Wis. 2d 472, 427 N.W.2d 
397 (Ct. App. 1988), overruled on other grounds by West Bend 
Mut. Ins. Co. v. Playman, 171 Wis. 2d 37, 489 N.W.2d 915 (1992); 
State v. Orta, 2000 WI 4, ¶23, 231 Wis. 2d 782, 604 N.W.2d 543 
(citing State v. Friday, 140 Wis. 2d 701, 412 N.W.2d 540 (Ct. 
App. 1987), overruled on other grounds by State v. Friday, 147 
Wis. 2d 359, 434 N.W.2d 85 (1989)); State v. Eugenio, 219 
Wis. 2d 391, 412, 579 N.W.2d 642 (1998) (citing Wikrent v. Toys 
"R" Us, Inc., 179 Wis. 2d 297, 507 N.W.2d 130 (Ct. App. 1993), 
overruled on other grounds by Steinberg v. Jensen, 194 Wis. 2d 
439, 534 N.W.2d 361 (1995)); C. Coakley Relocation Sys., Inc. v. 
City of Milwaukee, 2007 WI App 209, ¶16, 305 Wis. 2d 487, 740 
                                                 
3 Id. 
No.  2008AP1324.pdr 
 
4 
 
N.W.2d 636 (citing City of Janesville v. CC Midwest, Inc., 2006 
WI App 21, 289 Wis. 2d 453, 710 N.W.2d 713, overruled on other 
grounds by City of Janesville v. CC Midwest, Inc., 2007 WI 93, 
302 Wis. 2d 599, 734 N.W.2d 428). 
¶88 The citation rule in federal court is different than 
that proposed by the majority.  In federal court, a "reversed" 
opinion can be cited for principles that were not reversed, but 
an 
opinion 
that 
has 
been 
"vacated" 
has 
no 
precedential 
authority.  Durning v. Citibank, N.A., 950 F.2d 1419, 1424 n.2 
(9th Cir. 1991) (citing O'Connor v. Donaldson, 422 U.S. 563, 578 
n.12 (1975)).  "'[V]acating the judgment of the Court of Appeals 
deprives that court's opinion of precedential effect, leaving 
this Court's opinion and judgment as the sole law of the case.'" 
Id. (quoting O'Connor, 422 U.S. at 578 n.12); see also Newdow v. 
Congress of the United States of Am., 383 F. Supp. 2d 1229, 1240 
(E.D. Cal. 2005); Charles A. Sullivan, On Vacation, 43 Hous. L. 
Rev. 1143, 1148 (Winter 2006) (commenting that "a vacated 
opinion is not precedent in the sense that it binds anyone; but 
such opinions may remain persuasive," but "a decision reversed 
on other grounds is not merely persuasive but also binding").  
¶89 The nomenclature by which an appellate court describes 
its action in regard to a decision it has reviewed is varied.  A 
decision may be reversed, overruled or vacated, in its entirety 
or in part.  Each of those terms has a different meaning.  A 
decision is "reversed" in "[a]n appellate court's overturning of 
a lower court's decision."  Black's Law Dictionary 1433 (9th ed. 
2009).  A decision is "overruled" when it is "set aside [as] 
No.  2008AP1324.pdr 
 
5 
 
precedent[] by expressly deciding that it should no longer be 
controlling law."  Id. at 1213.  A decision is "vacated" in 
order "to nullify or cancel; make void; [or] invalidate" the 
decision.  Id. at 1688.  There may be good reasons to treat 
differently court of appeals decisions that are reversed, 
overruled and vacated; however, no one has explored this issue.  
Until there is further study, it would be cavalier to decide it. 
¶90 Moreover, it remains uncertain how the majority's 
holding will impact the manner in which Wisconsin cases are 
classified on Westlaw and LexisNexis, the premiere online legal 
research services.  Both research services use symbols to 
indicate how other case law has affected a particular opinion.  
The symbols indicate neutral, positive, cautionary or negative 
treatment.  In Westlaw, a case that has been expressly overruled 
generally has a red flag and the statement, "No longer good for 
at least one point of law."4  However, when a case is reversed, 
rather than overruled, Westlaw shows the same red flag and 
cautionary statement.5   
¶91 The majority opinion addresses only "overruled" court 
of appeals decisions.  It does not prevent the use of legal 
principles from a decision that is "reversed."   
                                                 
4 See, e.g., Hemerley v. Am. Family Mut. Ins. Co., 127 
Wis. 2d 304, 379 N.W.2d 860 (Ct. App. 1985), overruled by Hull 
v. State Farm Mut. Auto. Ins. Co., 222 Wis. 2d 627, 632, 586 
N.W.2d 863 (1998). 
5 See, e.g., Hull v. State Farm Mut. Auto. Ins. Co., 215 
Wis. 2d 323, 572 N.W.2d 902 (Table) (Ct. App 1997), rev'd, 222 
Wis. 2d 627, 632, 586 N.W.2d 863 (1998).  
No.  2008AP1324.pdr 
 
6 
 
¶92 Furthermore, whether a court of appeals decision loses 
all precedential value when it is overruled in part by this 
court was given little attention by the parties.  On only five 
pages of Blum's brief, was the issue the majority takes up 
mentioned.  There, Blum's argument focused on his contention 
that the court of appeals erred because it relied in part on 
Hemerley, citing Chief Justice Abrahamson's dissenting opinion 
in Gary M.B., 270 Wis. 2d 62, ¶44.  The respondent, 1st Auto & 
Casualty Insurance Co., devoted less than one page of its brief 
to the issue.  At oral argument, the court was unable to obtain 
further assistance from counsel. 
¶93 And finally, neither the discussion of the appellant 
nor the respondent provided any background or context in which 
to place this issue.  For example, neither party addressed how 
many times cases cited as "overruled on other grounds" have been 
used in subsequent cases; whether changing the rule would cause 
a hardship for lawyers or for trial and appellate judges who 
have relied on these cases for foundational legal principles; or 
whether some other rule might better serve the bench and the 
bar.  However, notwithstanding the lack of information provided 
to the court on this complicated question, the majority pushes 
ahead. 
III.  CONCLUSION 
¶94 In my view, a better approach would be to refer the 
issue to the judicial council, so that input can be obtained 
from the bench and the bar.  It would also be useful to study 
how other states treat opinions that are overruled in part, as 
No.  2008AP1324.pdr 
 
7 
 
well as learning how the federal rule has operated throughout 
the 50 states.  
¶95 Because I believe we have undertaken a new rule 
without adequate knowledge upon which to base our decision, I 
respectfully dissent from the portion of the majority's opinion 
that unnecessarily concludes that court of appeals decisions 
overruled by this court no longer retain any precedential value. 
¶96 I am authorized to state that Justices ANNETTE 
KINGSLAND 
ZIEGLER 
and 
MICHAEL 
J. 
GABLEMAN 
join 
this 
concurrence/dissent. 
 
 
 
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