Title: Shugarts v. Mohr

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2018 WI 27 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2016AP983 
COMPLETE TITLE: 
Robert H. Shugarts, II and Judith Lynn Shugarts, 
          Plaintiffs-Appellants-Petitioners, 
     v. 
Dennis M. Mohr, Progressive Casualty Insurance  
Company/Artisan and Truckers Casualty Company 
and Wisconsin Municipal Mutual Insurance 
Company, 
          Defendants, 
Allstate Property and Casualty Insurance 
Company, 
          Defendant-Respondent. 
 
 
 
 
REVIEW OF DECISION OF THE COURT OF APPEALS 
Reported at 375 Wis. 2d 225, 894 N.W.2d 443 
PDC No:  2017 WI App 27 - Published 
 
 
OPINION FILED: 
April 5, 2018 
SUBMITTED ON BRIEFS: 
      
ORAL ARGUMENT: 
January 9, 2018 
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit 
 
COUNTY: 
Eau Claire 
 
JUDGE: 
Michael A. Schumacher 
 
 
 
JUSTICES: 
 
 
CONCURRED: 
      
 
DISSENTED: 
      
 
NOT PARTICIPATING:          
 
 
 
ATTORNEYS: 
 
 
For 
the 
plaintiffs-appellants-petitioners, 
there 
were 
briefs filed and an oral argument by Harry R. Hertel and Hertel 
Law Offices, S.C., Eau Claire. 
 
For the defendant-respondent, there was a brief filed by 
Leah M. Cameron, John M. Swietlik, Jr., and Kasdorf, Lewis & 
Swietlik, S.C., Milwaukee.  There was an oral argument by John 
M. Swietlik, Jr. 
 
 
 
2 
An amicus curiae brief was filed on behalf of Wisconsin 
Association for Justice by Edward E. Robinson and Cannon & 
Dunphy, S.C., Brookfield, with whom on the brief were William C. 
Gleisner, III and Law Offices of William C. Gleisner, III, 
Brookfield, and Lynn R. Laufenberg, Mark L. Thomsen, and 
Gingras, Cates, Luebke, S.C., Waukesha.  There was an oral 
argument by Edward E. Robinson. 
 
 
2018 WI 27
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2016AP983 
(L.C. No. 
2013CV377) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Robert H. Shugarts, II and Judith Lynn 
Shugarts, 
 
          Plaintiffs-Appellants-Petitioners, 
 
     v. 
 
Dennis M. Mohr, Progressive Casualty Insurance 
Company/Artisan and Truckers Casualty Company 
and Wisconsin Municipal Mutual Insurance 
Company,  
 
          Defendants, 
 
Allstate Property and Casualty Insurance 
Company, 
 
          Defendant-Respondent. 
 
FILED 
 
APR 5, 2018 
 
Sheila T. Reiff 
Clerk of Supreme Court 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed and 
cause remanded. 
 
¶1 
ANN WALSH BRADLEY, J.   The petitioners, Robert and 
Judith Shugarts, seek review of a published court of appeals 
decision affirming the circuit court's grant of summary judgment 
No. 
2016AP983 
 
2 
 
to the Shugarts' underinsured motorist (UIM) carrier.1  They 
contend that the court of appeals erred in concluding that they 
failed to provide Allstate Property and Casualty Company 
(Allstate) with timely notice of their UIM claim and that they 
failed to rebut the presumption that Allstate was prejudiced by 
the untimely notice. 
¶2 
Specifically, the Shugarts assert that the court of 
appeals mistakenly interpreted the UIM policy's "proof of claim" 
provision as a "notice of accident" provision.  The Shugarts 
submit that instead it is the tender of the tortfeasor's 
underlying policy limits, not the accident itself, that triggers 
the notice provision in the UIM policy.  They further argue that 
if the proof of claim was not timely filed, then Allstate was 
not prejudiced by the untimely notice. 
¶3 
We conclude that the operative event triggering the 
notice requirement in the Shugarts' UIM policy is the tender of 
the tortfeasor's underlying policy limit.  We further conclude 
that Wis. Stat. § 631.81(1) (2009-10)2 does not apply to the UIM 
policy provision at issue.  Consequently, we determine that the 
Shugarts provided Allstate with timely proof of their UIM claim 
as required by the policy language.  Because we determine that 
                                                 
1 Shugarts v. Mohr, 2017 WI App 27, 375 Wis. 2d 225, 894 
N.W.2d 443 (affirming order of circuit court for Eau Claire 
County, Michael A. Schumacher, Judge). 
2 All subsequent references to the Wisconsin Statutes are to 
the 2009-10 version unless otherwise indicated. 
No. 
2016AP983 
 
3 
 
the Shugarts' proof of claim was timely filed, we need not 
address whether Allstate was prejudiced. 
¶4 
Accordingly, we reverse the court of appeals and 
remand to the circuit court for further proceedings. 
I 
¶5 
Robert Shugarts was employed as a deputy sheriff in 
Eau Claire County.  While on duty on October 11, 2010, he was 
involved in the pursuit of Dennis Mohr (Mohr), a suspect in a 
hit-and-run accident.  Robert was severely injured when Mohr's 
vehicle struck his squad car. 
¶6 
Mohr's vehicle was insured by Progressive Casualty 
Insurance Company (Progressive).  The squad car was owned by Eau 
Claire County and was insured under a policy issued by Wisconsin 
Municipal Mutual Insurance Company (WMMIC), which included UIM 
coverage. 
 
The 
Shugarts 
possessed 
a 
personal 
automobile 
insurance policy through Allstate, which also included UIM 
coverage. 
¶7 
In November of 2011, the Shugarts hired an attorney 
who sent notice of retainer to Progressive.  It denied coverage 
in January of 2012, basing the denial on the assertion that 
Mohr's striking of the squad car was an intentional act and thus 
not covered under its policy. 
¶8 
The Shugarts proposed a $600,000 settlement with 
Progressive in April of 2013.  In May of 2013, Progressive 
turned down the offer, persisting in its assertion that the 
intentional act exclusion in Mohr's policy served as a defense 
to coverage. 
No. 
2016AP983 
 
4 
 
¶9 
After Progressive rejected their offer, the Shugarts 
filed this lawsuit in June of 2013.  Progressive continued to 
deny coverage, but offered to settle the case for $10,000.  It 
also provided the Shugarts with a declarations page from Mohr's 
policy indicating that it contained a bodily injury liability 
limit of $50,000 per person. 
¶10 In July of 2014, the Shugarts filed an amended 
complaint, adding Eau Claire County's insurer, WMMIC, as a 
defendant.  The Shugarts alleged that WMMIC was liable for UIM 
coverage "arising out of the operation of" his squad car.3 
¶11 Subsequently, on October 13, 2014, Progressive changed 
its position on coverage.  It offered to pay the Shugarts the 
policy limit of $50,000 if WMMIC waived any subrogation claim.  
On October 28, 2014, the Shugarts sent a notice of retainer to 
Allstate, advising that counsel had been retained "with regard 
to injuries he sustained in an automobile accident which 
occurred on October 11, 2010." 
¶12 After additional correspondence between the Shugarts' 
attorneys and Allstate, on February 9, 2015, the Shugarts sent 
                                                 
3 WMMIC moved to dismiss, and later for summary judgment.  
The circuit court granted summary judgment to WMMIC.  The 
Shugarts' notice of appeal initially purported to challenge the 
circuit court's grants of summary judgment to both Allstate and 
WMMIC.  However, before the court of appeals the Shugarts 
voluntarily dismissed that portion of the appeal pertaining to 
WMMIC.  Shugarts v. Mohr, 2017 WI App 27, ¶8 n.2, 375 
Wis. 2d 225, 894 N.W.2d 443.  Accordingly, the Shugarts do not 
raise any argument related to the summary judgment in favor of 
WMMIC before this court. 
No. 
2016AP983 
 
5 
 
Allstate a notice pursuant to Vogt v. Schroeder, 129 Wis. 2d 3, 
383 N.W.2d 876 (1986).4  The notice stated that Progressive had 
offered to settle the Shugarts' claim for the policy limit of 
$50,000.  Further, the notice explained that "[i]n evaluating 
Mr. Shugarts' injuries, we believe that Mr. Shugarts' claim is 
well in excess of the policy limits afforded by Progressive 
Insurance." 
                                                 
4 In Vogt, we concluded that a UIM insurer "has the right of 
subrogation against the tortfeasor and his insurer to the extent 
that 
the 
underinsurer 
has 
paid 
benefits 
to 
its 
own 
insured . . . prior to the release of the tortfeasor . . . and 
his insurance company[.]"  Vogt v. Schroeder, 129 Wis. 2d 3, 17, 
383 N.W.2d 876 (1986).  Stated differently, the UIM insurer has 
a right of subrogation "as long as it substitutes its funds for 
those proffered by the tortfeasor's insurer."  Pitts v. 
Revocable Trust of Knueppel, 2005 WI 95, ¶35, 282 Wis. 2d 550, 
698 N.W.2d 761 (citing Vogt, 129 Wis. 2d at 17-19).  If the UIM 
insurer simply consents to the settlement, it forfeits its 
subrogation right.  Pitts, 282 Wis. 2d 550, ¶35 (citing Vogt, 
129 Wis. 2d at 20-21). 
Further, in Vogt we adopted a procedure to allow a UIM 
insurer to intervene in the settlement process.  Pitts, 282 
Wis. 2d 550, ¶38.  Namely, a UIM insurer is entitled to notice 
of a tentative settlement agreement and a period of time in 
which to assess the case.  This allows the UIM insurer to decide 
whether to substitute its payment to the insured in an amount 
equal to the tentative settlement, thereby preserving its 
subrogation rights, or acquiescing in the settlement.  Vogt, 129 
Wis. 2d at 20-21.  "In effect, this procedure gives to the 
plaintiff's underinsurer the option of rejecting the settlement 
offer to prevent the release of the tortfeasor and thus protect 
its right of subrogation, but it may not thwart the right of its 
own insured to receive some payment, either the amount of the 
insured's 
underinsurance 
claim 
or 
the 
amount 
offered 
in 
settlement."  Id. at 21. 
No. 
2016AP983 
 
6 
 
¶13 The Shugarts filed an additional amended complaint in 
March of 2015, adding Allstate as a defendant.  Allstate 
answered the complaint raising untimeliness as an affirmative 
defense.  It stated that "[t]here is no coverage available to 
the plaintiffs under the Allstate policy given the failure of 
the plaintiffs to provide timely notice of their intention to 
make a claim as a result of the subject accident as required 
under the Allstate policy." 
¶14 Allstate moved for summary judgment.  It argued that 
the Shugarts "did not provide timely notice to Allstate of the 
October 11, 2010 motor vehicle accident as required by the 
Allstate policy." 
¶15 The circuit court granted Allstate's motion for 
summary judgment.  Specifically, it stated that it considered 
the notice untimely regardless of the governing policy provision 
or statute: 
So I am going to find, as a matter of law, that the 
plaintiff failed to provide timely notice to Allstate 
of the accident and I think that's true whether the 
notice requirement comes under the liability section 
of the policy, the UIM section of the policy or the 
statutory provisions.  All of them use similar 
language . . . I 
have 
to 
conclude 
that 
it 
was 
reasonably possible for Mr. Shugarts to provide notice 
to Allstate sometime shortly after the accident. 
Further, the circuit court concluded that the Shugarts had 
failed to rebut the presumption that Allstate was prejudiced by 
the untimely notice. 
¶16 The Shugarts appealed, and the court of appeals 
affirmed the circuit court's grant of summary judgment.  The 
No. 
2016AP983 
 
7 
 
court of appeals concluded that "Shugarts was required to 
provide Allstate with proof of his UIM claim as soon as possible 
after the incident giving rise to the claim."  Shugarts v. Mohr, 
2017 WI App 27, ¶24, 375 Wis. 2d 225, 894 N.W.2d 443.  "[I]t was 
possible for Shugarts to provide proof of claim in January 2012, 
when Progressive denied coverage for his claim against Mohr.  At 
the very least, Shugarts should have provided proof of claim in 
August 2013, when he learned that Progressive's policy limit was 
only $50,000."  Id.  The court of appeals further agreed with 
the circuit court that the Shugarts had failed to rebut the 
presumption that Allstate was prejudiced by the late notice.  
Id., ¶34. 
II 
¶17 In this case we address a summary judgment dismissing 
the Shugarts' claim against Allstate.  We review a grant of 
summary judgment independently, applying the same methodology as 
the circuit court.  Novell v. Migliaccio, 2008 WI 44, ¶23, 309 
Wis. 2d 132, 749 Wis. 2d 544.  Summary judgment is appropriate 
where there is no genuine issue as to any material fact and the 
moving party is entitled to judgment as a matter of law.  Id. 
¶18 We interpret first the parties' written insurance 
contract.  Interpretation of an insurance contract presents a 
question of law.  Am. Family Mut. Ins. Co. v. Am. Girl, Inc., 
2004 WI 2, ¶23, 268 Wis. 2d 16, 673 N.W.2d 65.  Our review also 
requires us to interpret a statute.  Statutory interpretation 
likewise presents a question of law.  Moustakis v. State of Wis. 
Dep't of Justice, 2016 WI 42, ¶16, 368 Wis. 2d 677, 880 
No. 
2016AP983 
 
8 
 
N.W.2d 142 (citation omitted).  We review questions of law 
independently of the decisions rendered by the circuit court and 
court of appeals.  Id. 
III 
¶19 Allstate 
identifies 
two 
potential 
sources 
of 
a 
requirement that the Shugarts provide it with notification of a 
UIM claim as soon as possible following an accident:  the 
language of the insurance policy and Wis. Stat. § 631.81(1).  We 
begin by examining the notice requirements dictated by the 
language of the Shugarts' insurance policy.  Subsequently, we 
address the proof of loss mandated by § 631.81(1) and its 
potential applicability. 
A 
¶20 We turn first to the language of the Shugarts' 
insurance policy.  When the language of an insurance policy is 
unambiguous, 
a 
court 
will 
not 
rewrite 
the 
policy 
by 
interpretation or impose obligations the parties did not 
undertake.  Acuity v. Chartis Specialty Ins. Co., 2015 WI 28, 
¶24, 361 Wis. 2d 396, 861 N.W.2d 533.  A policy's terms are 
interpreted as they would be understood from the perspective of 
a reasonable person in the position of the insured.  Frost ex 
rel. Anderson v. Whitbeck, 2002 WI 129, ¶20, 257 Wis. 2d 80, 654 
N.W.2d 225. 
¶21 Allstate 
cites 
two 
provisions 
in 
the 
Shugarts' 
insurance policy, arguing they require the Shugarts to submit 
No. 
2016AP983 
 
9 
 
notice of loss as soon as possible5 after the accident.  First, 
Allstate points to a provision in the liability portion of the 
policy, entitled "What To Do In Case Of An Auto Accident Or 
Claim" (the "notice of accident" provision): 
If a person insured has an auto accident, we must be 
notified 
of 
all 
details 
as 
soon 
as 
reasonably 
possible.  If a person insured is sued as the result 
of an auto accident, we must be notified immediately. 
¶22 Although this provision is located in the liability 
portion of the policy, Allstate contends that it applies with 
equal force to UIM claims.  Allstate concedes that the UIM 
portion of the policy does not specifically state that an 
insured must provide notice of an accident.  Nevertheless, it 
argues that nothing in the notice provision contained in the 
liability portion of the policy indicates that the notice 
provision does not apply in the UIM context. 
¶23 We disagree.  The Shugarts' insurance policy is 
separated into seven "parts."  At issue here are Part I, 
entitled 
"Automobile 
Liability 
Insurance," 
and 
Part 
VII, 
entitled "Underinsured Motorists Insurance."  A reasonable 
insured reading the policy would likely conclude that the 
provisions located in the liability section apply in the 
                                                 
5 We observe that the notice of accident provision uses the 
phrase "as soon as reasonably possible" to describe the timing 
of the notice it requires, while the notice of claim provision 
uses the phrase "as soon as possible."  This variance does not 
affect our analysis. 
No. 
2016AP983 
 
10 
 
liability section only.6  See Martinson v. Am. Family Mut. Ins. 
Co., 63 Wis. 2d 14, 20, 216 N.W.2d 34 (1974) ("The notice of 
accident, occurrence or loss provision of the general policy 
provisions is distinct and different from the proof of claims 
requirements of the uninsured motorist endorsement and the 
distinction is well established.").7  We therefore conclude that 
the "notice of accident" provision in the liability section of 
the Shugarts' policy does not apply to UIM claims. 
¶24 Allstate next directs our attention to the UIM portion 
of the policy, which contains a provision entitled "Proof of 
Claim; Medical Reports" (the "proof of claim" provision).  This 
provision sets forth that a person making a UIM claim must give 
Allstate written proof of claim "as soon as possible": 
As soon as possible, you or any other person making 
claim must give us written proof of claim.  It must 
include all details we may need to determine the 
amounts payable.  We may also require any person 
making claim to submit to examination under oath and 
sign the transcript. 
                                                 
6 Even if this were not the case, at the very least the 
"notice of accident" provision in the liability section of the 
policy is ambiguous as to its application to UIM claims.  
Accordingly, the provision must be construed against the insurer 
who drafted it.  See Acuity v. Chartis Specialty Ins. Co., 2015 
WI 28, ¶24, 361 Wis. 2d 396, 861 N.W.2d 533. 
7 This difference still holds even though we distinguish 
this case from Martinson v. Am. Family Mut. Ins. Co., 63 Wis. 2d 
14, 216 N.W.2d 34 (1974).  See infra, ¶¶31-32.  Although 
Martinson is an uninsured motorist (UM) case and this is a UIM 
case, the difference between proof of loss and proof of claim is 
as true for UIM claims as it is for the UM claim at issue in 
Martinson. 
No. 
2016AP983 
 
11 
 
The insured person may be required to take medical 
examinations by physicians we choose, as often as we 
reasonably require.  We must be given authorization to 
obtain medical reports and copies of records. 
¶25 At the outset, two characteristics of this provision 
are notable.  First, the proof of claim provision is located in 
the UIM section of the policy.  As discussed above, a reasonable 
insured would ascribe importance to this location in the policy, 
making it the operative notice provision for UIM claims.  See 
supra, ¶23.  Second, the provision requires a claimant to submit 
proof of "claim," not proof of "accident" or proof of "loss."  
Neither the word "accident" nor the word "loss" appears in the 
provision. 
¶26 Pursuant to the proof of claim provision, a person 
making a UIM claim is required to submit "proof of claim" "as 
soon as possible."  The question we must answer is when the 
Shugarts had a UIM claim of which they could give notice.  In 
other words, we must determine what is the operative event 
triggering the proof of claim provision. 
¶27 To answer this question, we look elsewhere in the UIM 
section of the policy.  Namely, the policy contains an 
exhaustion provision, that states: 
We are not obligated to make any payment for bodily 
injury under this coverage which arises out of the use 
of an underinsured motor vehicle until after the 
limits of liability for all liability protection in 
effect and applicable at the time of the accident have 
been exhausted by payment of judgments or settlements. 
¶28 An exhaustion clause "requires the insured to exhaust 
the tortfeasor's liability limits by payment of full policy 
No. 
2016AP983 
 
12 
 
limits in order to trigger the duty to pay UIM benefits."  
Danbeck v. Am. Family Mut. Ins. Co., 2001 WI 91, ¶25, 245 
Wis. 2d 186, 629 N.W.2d 150.  Pursuant to an exhaustion clause, 
"UIM benefits are owed only when the tortfeasor's liability 
insurance is insufficient to cover the UIM policyholder's 
damages."  Id., ¶22.  "Such language [in a policy] provides a 
clear indication of when the policy comes into play and when a 
presentable claim exists for the insured."  Yocherer v. Farmers 
Ins. Exch., 2002 WI 41, 
¶20 n.3, 252 Wis. 2d 114, 643 
N.W.2d 457. 
¶29 In 
other 
words, 
tortfeasor 
drivers 
are 
not 
by 
definition 
"underinsured" 
until 
their 
policy 
limits 
are 
exhausted.  Danbeck, 245 Wis. 2d 186, ¶22; see also Arnold P. 
Anderson, Wisconsin Insurance Law § 4.93 (7th ed. 2015) ("UIM 
policies require that the insured recover or exhaust all money 
available from the tortfeasor's liability policy before the 
insured looks to the UIM policy for payment.").  Giving effect 
to the exhaustion clause, we therefore conclude that the 
operative event triggering the notice requirement in the 
Shugarts' 
UIM 
policy 
is 
the 
tender 
of 
the 
tortfeasor's 
underlying policy limit. 
¶30 The language and application of the exhaustion clause 
highlight the excess nature of UIM coverage.  UIM coverage is 
first party coverage that may afford additional compensation for 
injured persons whenever a tortfeasor is inadequately insured.  
See Danner v. Auto-Owners Ins., 2001 WI 90, ¶51, 245 Wis. 2d 49, 
629 N.W.2d 159 (quoting 3 Alan I. Widiss, Uninsured and 
No. 
2016AP983 
 
13 
 
Underinsured Motorist Insurance § 31.4, at 5 (Revised 2d ed. 
2001)).  As explained above, UIM coverage is not triggered until 
the tortfeasor's underlying liability limits are met.  This 
characteristic 
differentiates 
UIM 
coverage 
from 
uninsured 
motorist (UM) coverage, which is first party coverage that is 
also "first dollar" coverage because the tortfeasor has no 
insurance. 
¶31 Accordingly, 
the 
court 
of 
appeals' 
reliance 
on 
Martinson, 63 Wis. 2d 14, a case involving UM insurance, not UIM 
insurance, is misplaced.  In Martinson, the court addressed 
whether an insured had provided timely proof of a UM claim as 
required by the applicable policy provision.  See id. at 19-20.  
The Martinson court concluded that "[t]he proof of claim 
condition require[d] the filing of the claim as soon as 
practicable after the incident giving rise to the claim."  Id. 
at 21.  It further determined that the proof of claim condition 
"does not mean the claim should be filed as soon as practicable 
after the liability of the insurer has been established."  Id. 
¶32 Martinson's holding makes sense in the context of a 
"first dollar" UM claim.  However, UIM coverage is excess 
coverage.  It is not triggered by the incident itself, but by 
the 
tender 
of 
the 
tortfeasor's 
underlying 
policy 
limit.  
Martinson, therefore, is distinguishable because it addresses 
UM, but not UIM coverage. 
¶33 Here, application of the exhaustion clause indicates 
that the Shugarts' UIM coverage was not triggered until the 
$50,000 policy limit of Mohr's Progressive policy was exhausted.  
No. 
2016AP983 
 
14 
 
This did not occur until October 13, 2014, when Progressive 
offered its policy limit to settle the case.  Before that date, 
the Shugarts had no UIM "claim" of which they could give notice. 
¶34 Indeed, prior to the offer of the policy limit on 
October 13, 2014, Progressive offered the Shugarts a $10,000 
settlement.  Had the Shugarts accepted this initial offer, after 
providing notice of the tentative settlement to Allstate, there 
would have been no UIM coverage.  The amount received by the 
Shugarts would have been $40,000 less than Progressive's policy 
limit.  As such, Mohr by definition would not have been an 
"underinsured" motorist. 
¶35 After receiving Progressive's offer to settle for the 
full policy limit, the Shugarts did not unduly delay notifying 
Allstate of the offer.  On October 28, 2014, fifteen days after 
receiving the offer from Progressive, the Shugarts sent Allstate 
a notice of retainer.  Correspondence between the Shugarts and 
Allstate ensued, and the Shugarts ultimately sent a Vogt notice 
on February 9, 2015, advising Allstate of its ability to 
substitute payment and thereby protect its subrogation rights.  
See supra, ¶12 n.4.  This timeline is sufficient to satisfy the 
policy's requirement that notice of claim be provided "as soon 
as possible." 
¶36 Allstate contends that the Shugarts should have 
provided notice shortly after the accident, or at the very 
latest in August of 2013 after receiving the declarations page 
of the Progressive policy showing the policy limit of $50,000.  
But the policy requires notice of "claim," not notice of 
No. 
2016AP983 
 
15 
 
"possible claim."  Accepting Allstate's argument would lead to 
the absurd result that an accident victim would be required to 
file a notice of a UIM claim after every auto accident to 
prevent forfeiting such a claim if the tortfeasor's underlying 
liability limits do not cover the full loss. 
¶37 We 
thus 
conclude 
that, 
pursuant 
to 
the 
policy 
language, the operative event triggering the notice requirement 
in the Shugarts' UIM policy is the tender of the tortfeasor's 
underlying policy limit.  Because the Shugarts sent Allstate a 
notice of retainer fifteen days after the Progressive's offer to 
settle for the policy limit and sent the Vogt notice within four 
months of that operative event, their notice to Allstate was 
timely. 
B  
¶38 Allstate contends next that Wis. Stat. § 631.81(1) 
applies here.  Section § 631.81(1) addresses proof of loss: 
Provided notice or proof of loss is furnished as soon 
as reasonably possible and within one year after the 
time it was required by the policy, failure to furnish 
such notice or proof within the time required by the 
policy does not invalidate or reduce a claim unless 
the 
insurer 
is 
prejudiced 
thereby 
and 
it 
was 
reasonably possible to meet the time limit. 
¶39 Allstate asserts that the Shugarts did not provide 
proof of loss as soon as reasonably possible, and not within one 
year after the accident.  According to Allstate, the notice is 
untimely pursuant to Wis. Stat. § 631.81(1).  We disagree.  As 
analyzed above, the policy does not require "proof of loss" for 
UIM claims. 
No. 
2016AP983 
 
16 
 
¶40 By indicating that "notice or proof of loss" is 
required "within one year after the time it was required by the 
policy," Wis. Stat. § 631.81(1) presupposes that the policy 
requires "notice or proof of loss" in the first instance.  In 
other words, the text of § 631.81(1) directs the reader back to 
the policy.  As analyzed above, we conclude that the UIM section 
of the policy requires proof of "claim," not proof of "loss."  
See supra, ¶25. 
¶41 For 
this 
reason, 
we 
determine 
that 
Wis. 
Stat. 
§ 631.81(1) does not apply to the UIM policy at issue.  Allstate 
contends that § 631.01(1) requires a contrary result.8  It argues 
that § 631.01(1) does not limit the application of § 631.81 to 
liability insurance, and therefore it should apply to UIM 
                                                 
8 Wisconsin Stat. § 631.01(1) states: 
(1) General.  This chapter and ch. 632 apply to all 
insurance policies and group certificates delivered or 
issued for delivery in this state, on property 
ordinarily located in this state, on persons residing 
in this state when the policy or group certificate is 
issued, or on business operations in this state, 
except: 
(a) As provided in ss. 600.01 and 618.42; 
(b) On business operations in this state if the 
contract is negotiated outside this state and if 
the operations in this state are incidental or 
subordinate to operations outside this state, 
unless the contract is for a policy of insurance 
to 
cover 
a 
warranty, 
as 
defined 
in 
s. 
100.205(1)(g), in which case the provisions set 
forth in sub. (4m) apply; and 
(c) As otherwise provided in the statutes. 
No. 
2016AP983 
 
17 
 
insurance as well.  We are not persuaded.  The text of 
§ 631.81(1) clearly indicates that it applies to only those 
policy provisions that by their own terms require proof or 
notice of loss.  See § 631.81(1) ("Provided notice or proof of 
loss is furnished as soon as reasonably possible and within one 
year after the time it was required by the policy . . . ") 
(emphasis added). 
¶42 Because we determine that, pursuant to the language of 
the policy, the Shugarts provided timely notice of their UIM 
claim to Allstate, we need not address whether Allstate was 
prejudiced by an untimely notice.  See Ranes v. Am. Family Mut. 
Ins. Co., 219 Wis. 2d 49, ¶3, 580 N.W.2d 197 (1998) (holding 
that an insured's failure to give notice of settlement does not 
bar UIM coverage unless the insurer was prejudiced by the lack 
of notice); see also Wis. Stat. § 631.81(1). 
¶43 In 
sum, 
we 
conclude 
that 
the 
operative 
event 
triggering the notice requirement in the Shugarts' UIM policy is 
the tender of the tortfeasor's underlying policy limit.  We 
further conclude that Wis. Stat. § 631.81(1) does not apply to 
the UIM policy provision at issue.  Consequently, we determine 
that the Shugarts provided Allstate with timely proof of their 
UIM claim as the policy language dictates. 
¶44 Accordingly, we reverse the decision of the court of 
appeals and remand the cause to the circuit court for further 
proceedings. 
By the Court.—The decision of the court of appeals is 
reversed, and the cause remanded to the circuit court. 
No. 
2016AP983 
 
18 
 
 
 
No. 
2016AP983 
 
 
 
1