Title: Betty L. Hull v. State Farm Mutual Automobile Insurance Company
Citation: N/A
Docket Number: 1997AP000659
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: December 15, 1998

SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
97-0659 
 
 
Complete Title 
of Case: 
 
 
Betty L. Hull,  
 
Plaintiff-Appellant-Petitioner, 
 
v. 
 
State Farm Mutual Automobile Insurance Company,  
 
Defendant-Respondent.  
 
ON REVIEW OF A DECISION OF THE COURT OF APPEALS 
Reported at:  215 Wis. 2d 322, 
 
 
 
(Ct. App. 1997-Unpublished) 
 
 
Opinion Filed: 
December 15, 1998 
Submitted on Briefs: 
 
Oral Argument: 
September 10, 1998 
 
 
Source of APPEAL 
 
COURT: 
Circuit 
 
COUNTY: 
Fond du Lac 
 
JUDGE: 
Henry B. Buslee 
 
 
JUSTICES: 
 
Concurred: 
 
 
Dissented: 
 
 
Not Participating:  
 
 
ATTORNEYS: 
For the plaintiff-appellant-petitioner there were 
briefs by Virginia M. Antoine, Milwaukee, John D. Murray, 
Appleton and Habush, Habush, Davis & Rottier, S.C., Milwaukee and 
and oral argument by Virginia M. Antoine. 
 
 
For the defendant-respondent there was a brief by 
Peter M. Farb and Gabert, Williams & Farb, Appleton and oral 
argument by Peter M. Farb. 
 
No. 97-0659 
 
1 
 
NOTICE 
This opinion is subject to further editing and 
modification.  The final version will appear in 
the bound volume of the official reports. 
 
 
No. 97-0659 
  
 
STATE OF WISCONSIN               :        
        
 
 
 
 
IN SUPREME COURT 
 
 
Betty L. Hull,  
 
          Plaintiff-Appellant-Petitioner, 
 
     v. 
 
State Farm Mutual Automobile Insurance  
Company,  
 
          Defendant-Respondent.  
FILED 
 
DEC 15, 1998 
 
Marilyn L. Graves 
Clerk of Supreme Court 
Madison, WI 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed and 
cause remanded. 
¶1 
N. PATRICK CROOKS, J.  Petitioner Betty L. Hull 
("Hull") seeks review of a court of appeals decision1 affirming 
an order of the Fond du Lac County Circuit Court, the Honorable 
Henry B. Buslee presiding, in which the court dismissed Hull's 
complaint and entered a declaratory judgment in favor of State 
Farm Mutual Automobile Insurance Company ("State Farm").  Hull 
claimed that she was entitled to uninsured motorist ("UM") 
benefits under her two State Farm liability insurance policies 
because the owner of the vehicle which struck and killed her 
husband was uninsured.  Relying on Hemerley v. American Family 
Mutual Insurance Co., 127 Wis. 2d 304, 379 N.W.2d 860 (Ct. App. 
1985), both the circuit court and court of appeals denied UM 
                     
1 Hull v. State Farm Mut. Auto. Ins. Co., No. 97-0659, 
unpublished slip op. (Wis. Ct. App. Nov. 12, 1997).  
No. 97-0659 
 
2 
coverage.  Both courts held that the vehicle was not uninsured 
under either the Wisconsin statute which mandates UM coverage, 
Wis. Stat. § 632.32(4)(1995-96),2 or the language of the State 
Farm policies because the driver's use of the vehicle was 
insured under a liability policy. 
 
¶2 
We conclude that Hull is entitled to UM coverage under 
both Wis. Stat. § 632.32(4) and the terms of her State Farm 
policies.  First, we find that UM coverage is available to Hull 
under the plain language of the UM provisions in Hull's two 
State Farm insurance policies. Second, we hold 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.  Since the allegedly negligent owner of the 
motor vehicle in this case was not insured, § 632.32(4) requires 
that State Farm provide UM coverage to Hull. In accordance with 
the reasoning herein, we overrule Hemerley and reverse the 
decision of the court of appeals. 
I. 
¶3 
The facts of this case are not in dispute.  On July 
14, 1994, Hull's husband was struck and killed by a pickup truck 
on the grounds of Badger State Auto Auction ("Badger State") in 
Fond du Lac, Wisconsin.  William Borth, the driver of the truck, 
was an employee of Badger State, and was trying to stop the 
truck after he had driven it into the auction ring.  The truck 
                     
2 All future references to the Wisconsin Statutes will be to 
the 1995-96 version unless otherwise noted.  
No. 97-0659 
 
3 
was apparently in a poor state of repair and failed to stop when 
Borth pressed the brakes. 
¶4 
Roger Reany, the truck's owner, had consigned the 
truck to Badger State for auction.  Reany did not have any 
insurance covering the truck or its operation.  Borth's use of 
the truck was insured by Milwaukee Mutual under Badger State's 
liability policy.3  
¶5 
Instead of proceeding against Borth, Badger State 
and/or Milwaukee Mutual, Hull sued State Farm, claiming that she 
was entitled to uninsured motorist ("UM") benefits under her two 
State Farm policies for the wrongful death of her husband.  In 
her complaint, filed on January 24, 1996, Hull contended that 
she was entitled to UM damages under her policies because the 
truck was not insured by its owner and had been negligently 
maintained.  State Farm countered that the truck did not fit the 
policy definition of "uninsured motor vehicle," because its use 
by Borth was insured by Milwaukee Mutual.   
¶6 
State Farm filed a motion for declaratory judgment and 
for dismissal of Hull's complaint.  The circuit court heard the 
motion on November 20, 1996, and granted it on February 6, 1997. 
The court determined that the truck was not uninsured, and 
                     
3 Reany was treated as the owner of the truck by the parties 
and the lower courts.  It seems that there may be some question 
as to whether he in fact owned the truck, however, because Reany 
had not yet paid its purchase price.  He apparently had 
consigned the truck for auction so he could obtain the money to 
pay for it.  See Scheduling Conf. Statement at 2.  In any event, 
it is undisputed that there was no liability insurance covering 
the truck's ownership or maintenance.  
No. 97-0659 
 
4 
therefore, Hull could not recover UM benefits under her 
liability policies.  In reaching its decision, the circuit court 
relied on Hemerley v. American Family Mutual Insurance Co., 127 
Wis. 2d 304, 379 N.W.2d 860 (Ct. App. 1985).  
¶7 
The plaintiff in Hemerley was injured while riding in 
a car which was not covered by liability insurance.  See 
Hemerley, 127 Wis. 2d at 306. The car's driver was not its 
owner, but the driver's operation of the vehicle was insured.  
See id.  The plaintiff sought UM benefits under Wis. Stat. § 
632.32(4) and her husband's insurance policy for injuries she 
alleged were caused by the driver's negligence. See id.  The 
court of appeals held that the Hemerley plaintiff was not 
entitled 
to 
UM 
benefits 
under 
the 
policy 
language 
or 
§ 632.32(4), and ruled that a vehicle is only an "uninsured 
motor vehicle" under § 632.32(4)(a)1 if neither its owner nor 
its operator is insured.4  Id. at 305. 
¶8 
Also relying on Hemerley, the court of appeals 
affirmed the circuit court's decision that Hull was not entitled 
to UM coverage. The court began by holding that although Hull's 
policies seemed to create three situations in which UM coverage 
exists  "when there is no ownership liability insurance, no 
maintenance liability insurance or no use liability insurance"  
 Hemerley required the court to rule that UM coverage exists 
                     
4 We note that the pertinent language of Wis. Stat. 
§ 632.32(4) has not changed since the Hemerley decision.  See 
Hemerley v. American Family Mutual Insurance Co., 127 Wis. 2d 
304, 306-07, 379 N.W.2d 860 (Ct. App. 1985)(quoting Wis. Stat. 
§ 632.32(4)); Wis. Stat. § 632.32(4).   
No. 97-0659 
 
5 
"only when no coverage exists under any scenario."  Hull v. 
State Farm Mut. Auto. Ins. Co., No. 97-0659, unpublished slip 
op. at 6-7 (Wis. Ct. App. Nov. 12, 1997).  Consequently, the 
court concluded that Hull was not entitled to UM coverage under 
the language of her insurance policies because the driver's use 
of the truck was insured.  Similarly, the court ruled that under 
Hemerley's interpretation of Wis. Stat. § 632.32(4), the fact 
that the driver's use of the vehicle was insured required it to 
rule 
that 
Hull 
was 
not 
entitled 
to 
UM 
coverage 
under 
§ 632.32(4).    
¶9 
The court of appeals rejected Hull's argument that the 
present case is distinguishable from Hemerley.  The court 
reasoned that Hemerley governs this case because the relevant 
language of Wis. Stat. § 632.32(4) has not changed since 
Hemerley was decided in 1985.  Also, in relation to the 
insurance policy, the court found that "the uninsured motorist 
provision in this case is, in essence, the equivalent of the 
uninsured motorist provision in Hemerley."  Slip op. at 7. In 
the final paragraph of its decision, however, the court of 
appeals expressed its disagreement with Hemerley: 
 
Hemerley itself acknowledged that "[t]he purpose [of 
§ 632.32(4), Stats.] is to compensate an injured 
person when liability coverage is unavailable to the 
person who ought to pay . . . ."  Yet, the Hemerley 
conclusion seems at odds with the statutory goal.  
Instead, the decision seems, in our judgment, to 
defeat the purpose of § 632.32(4).  As such, we 
believe that Hemerley was decided incorrectly. 
 
Slip op. at 7 (citation omitted).  
No. 97-0659 
 
6 
¶10 This court granted Hull’s petition for review of the 
court of appeals’ decision.  At the same time, we granted State 
Farm's motion to supplement the record with a copy of the 
summons and complaint in a second suit, which Hull filed on June 
16, 1997.5  We now reverse the court of appeals. 
II.  
¶11 We begin by identifying the standard of review.  In a 
declaratory judgment action, the granting or denying of relief 
is a matter within the discretion of the circuit court.  United 
Fire & Cas. Co. v. Kleppe, 174 Wis. 2d 637, 640, 498 N.W.2d 597 
(1993).  A reviewing court will uphold a discretionary decision 
as long as the circuit court's exercise of discretion was not 
erroneous.  Id. at 640-41.  An exercise of discretion is 
erroneous if it is based on an error of law.  Id. at 641; Edland 
v. Wisconsin Physicians Serv. Ins. Co., 210 Wis. 2d 638, 643, 
563 N.W.2d 519 (1997);  State v. Hutnik, 39 Wis. 2d 754, 763, 
159 N.W.2d 733 (1968).  
¶12 This case involves the construction of insurance 
policy language and the interpretation of a statute.  Both 
matters present questions of law.  See Clark v. American Family 
Mutual Ins. Co., 218 Wis. 2d 169, 173, 577 N.W.2d 790 (1998); 
Cardinal v. Leader Nat. Ins. Co., 166 Wis. 2d 375, 382, 480 
N.W.2d 1 (1992).  Accordingly, this court reviews both issues de 
                     
5 In her complaint in the second suit, Hull claimed that 
Borth negligently operated the vehicle. Badger State and 
Milwaukee Mutual were also named as defendants.  See Hull v. 
Borth, No. 97-CV-256 (Fond du Lac County Cir. Ct., filed June 
16, 1997).   
No. 97-0659 
 
7 
novo, although we benefit from the analyses of the circuit court 
and the court of appeals. See Clark, 218 Wis. 2d at 173; Aiello 
v. Village of Pleasant Prairie, 206 Wis. 2d 68, 70, 556 N.W.2d 
697 (1996); Cardinal, 166 Wis. 2d at 382.   
III. 
¶13 The first issue is whether Hull is entitled to UM 
coverage pursuant to the terms of her two State Farm insurance 
policies.  Interpretation of insurance policies is controlled by 
the rules of contract construction.  General Cas. Co. v. Hills, 
209 Wis. 2d 167, 175, 561 N.W.2d 718 (1997); Donaldson v. Urban 
Land Interests, Inc., 211 Wis. 2d 224, 230, 564 N.W.2d 728 
(1997); Kremers-Urban Co. v. American Employers Ins., 119 
Wis. 2d 722, 735, 351 N.W.2d 156 (1984).  In construing an 
insurance policy, the main goal is to determine and carry out 
the intentions of the parties.  General Cas., 209 Wis. 2d at 
175; Kremers-Urban, 119 Wis. 2d at 735.  The court must 
interpret the policy language to mean what a reasonable person 
in the insured's position would understand it to mean.  General 
Cas., 209 Wis. 2d at 175;  Kremers-Urban, 119 Wis. 2d at 735.   
¶14 When the meaning of a term in an insurance policy is 
plain, the court should apply the term in accordance with the 
"everyday meaning" which a lay person would ascribe to it, and 
should not turn to rules of construction or case law.  Kremers-
Urban, 119 Wis. 2d at 735-36; see also Amidzich v. Charter Oak 
Fire Ins. Co., 44 Wis. 2d 45, 170 N.W.2d 813 (1969).  Words or 
phrases are ambiguous if they may be reasonably interpreted in 
more than one way.  Donaldson, 211 Wis. 2d at 231; Cardinal v. 
No. 97-0659 
 
8 
Leader Nat. Ins. Co. 166 Wis. 2d 375, 383, 480 N.W.2d 1 (1992); 
Kremers-Urban, 119 Wis. 2d at 735.  
¶15 Hull's two State Farm liability insurance policies 
contain identical UM provisions.  Both policies provide UM 
coverage for injuries caused by an "uninsured motor vehicle," 
which the policies define as "a vehicle, the ownership, 
maintenance or use of which is not insured."6  The parties' 
arguments focus on the proper construction of the word "or."  
State Farm argues that "or" should be interpreted conjunctively, 
in which case a vehicle is an "uninsured motor vehicle" under 
the policies only if its ownership and its maintenance and its 
use are all uninsured.  This approach is essentially the same as 
that taken by the court of appeals in Hemerley. See Hemerley, 
127 Wis. 2d at 309-310.  Hull contends that "or" should be 
interpreted in the disjunctive sense, meaning that a vehicle is 
an "uninsured motor vehicle" in any of three scenarios:  (1) 
when the vehicle's ownership is uninsured; (2) when the 
                     
6 The uninsured motorist (“UM”) provisions in the two State 
Farm policies provide in full: 
We will pay damages for bodily injury an insured is 
legally entitled to collect from the owner or driver 
of an uninsured motor vehicle.  The bodily injury must 
be caused by accident arising out of the operation, 
maintenance or use of an uninsured motor vehicle. 
 
Uninsured Motor Vehicle – means: 
1. 
a 
land 
motor 
vehicle, 
the 
ownership, 
maintenance or use of which is: 
a.  not insured or bonded for bodily injury 
liability at the time of the accident; . . . 
  
See Petitioner's App. at 131 (emphasis omitted).  
No. 97-0659 
 
9 
vehicle's maintenance is uninsured; (3) when the vehicle's use 
is uninsured.  We agree with Hull. 
¶16 The word "or," in the phrase "ownership, maintenance 
or use," is unambiguous.  The meaning of "or" is plain:  "or" is 
a connector of alternative choices in a series.  In an everyday 
setting, "or" is interpreted disjunctively.  A reasonable person 
in the insured's position would not think that "or" means "and," 
contrary to State Farm's contention.  
¶17 We are also persuaded by the fact that the first 
definition of "or" in the American Heritage Dictionary confirms 
that "or" should be interpreted disjunctively.  The definition 
states that "or" is "[u]sed to indicate an alternative, usually 
only before the last term of a series:  hot or cold; this, that, 
or the other."  1271 American Heritage Dictionary (3d ed. 
1992)(emphasis omitted).  In addition, at least two other courts 
have construed State Farm UM provisions identical to the one in 
Hull's policies, and both courts ruled that UM coverage was 
available when a vehicle's ownership was uninsured but its use 
was insured.  See Whitehead v. Weir, 862 S.W.2d 507, 508 (Mo. 
App. 1993); State Farm Mut. Auto. Ins. Co. v. Taylor, 725 P.2d 
821, 822-23 (Mont. 1986).  Since these courts did not require 
that both the vehicle's ownership and its use must be uninsured 
before the vehicle qualifies as an "uninsured motor vehicle" 
under the policy provision, the courts effectively adopted a 
disjunctive interpretation of the word "or" in the phrase 
"ownership, maintenance or use."  
No. 97-0659 
 
10
¶18 The court of appeals held that Hemerley controlled the 
insurance policy interpretation issue in this case.  The court 
of appeals failed to recognize, however, that the language of 
the American Family policy in Hemerley is quite different than 
the language of Hull's State Farm policies.  While Hull's 
policies define "uninsured motor vehicle" as "a vehicle, the 
ownership, maintenance or use of which is not insured," the 
policy in Hemerley defined "uninsured motor vehicle" as "a motor 
vehicle which is:  (a) not insured by a bodily injury liability 
bond or policy at the time of the accident."  See Hemerley, 127 
Wis. 2d at 309.  The dissimilarity of these two definitions 
renders Hemerley unhelpful in our interpretation of the UM 
provisions in Hull's insurance policies.  
¶19 We 
conclude 
that 
the 
word 
"or" 
in 
the 
phrase 
"ownership, maintenance or use" in Hull's two State Farm 
insurance policies should be interpreted disjunctively, in 
accordance with its plain meaning.  Consequently, a vehicle is 
an "uninsured motor vehicle" under the policies' language in 
three distinct situations:  (1) when its ownership is uninsured; 
(2) when its maintenance is uninsured; (3) when its use is 
uninsured.  Because the maintenance of the pickup truck in this 
case was uninsured, the truck was an "uninsured motor vehicle" 
under Hull's State Farm policies, even though its use was 
insured under Borth's policy.  Accordingly, Hull is entitled to 
UM coverage under the terms of her insurance policies, if, as 
alleged, the truck was not insured by its owner for bodily 
No. 97-0659 
 
11
injury liability and had been negligently maintained by him.  
We, therefore, reverse the order dismissing Hull's complaint.  
IV. 
¶20 Next, we consider whether Wis. Stat. § 632.32(4) 
entitles Hull to UM coverage for damages caused by the alleged 
negligence of an uninsured vehicle owner, when the vehicle's 
operator is insured.7  Section 632.32(4) provides, in relevant 
part: 
 
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: 
 
                     
7 We recognize that we need not determine whether Hull is 
entitled to UM coverage under Wis. Stat. § 632.32(4), since we 
have already decided that Hull is entitled to UM coverage under 
the terms of her two insurance policies.  As a general rule, 
when our resolution of one issue disposes of a case, we will not 
address additional issues.  See Gross v. Hoffman, 227 Wis. 296, 
300, 277 N.W. 663 (1938). 
 However, to further judicial economy and guide trial 
courts and litigants, we may consider additional issues which 
have been fully briefed and are likely to recur.  See State ex 
rel. Jackson v. Coffey, 18 Wis. 2d 529, 532, 118 N.W.2d 939 
(1963); Metropolitan Greyhound Mgt. Corp. v. Wisconsin Racing 
Bd., 157 Wis. 2d 678, 693-94, 460 N.W.2d 802 (Ct. App. 1990).  
Hull and State Farm have fully briefed and argued the issue of 
whether Hull is entitled to UM coverage under § 632.32(4).  
Further, since it is not unusual for an uninsured motorist case 
to involve more than one alleged tortfeasor, and § 632.32(4) 
affects all motor vehicle liability insurance policies in the 
state, the question of the applicability of the Hemerley 
interpretation 
of 
§ 632.32(4) 
is 
bound 
to 
arise 
again.  
Consequently, in the interest of conserving judicial resources 
and clarifying an important point of law, we have chosen to 
decide 
whether 
Hull 
is 
entitled 
to 
UM 
coverage 
under 
§ 632.32(4).     
No. 97-0659 
 
12
(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. 
 
2. 
In this paragraph “uninsured motor vehicle” 
also includes: 
 
a. 
An insured motor vehicle if before or after 
the accident the liability insurer of the motor 
vehicle is declared insolvent by a court of competent 
jurisdiction. 
 
b. 
An unidentified motor vehicle involved in a 
hit-and-run accident. 
 
3. 
Insurers making payment under the uninsured 
motorists’ coverage shall, to the extent of the 
payment, 
be 
subrogated 
to 
the 
rights 
of 
their 
insureds. 
 
¶21 The ultimate goal of statutory interpretation is to 
determine and give effect to the intent of the legislature.  See 
Clark, 218 Wis. 2d at 173;  Anderson v. City of Milwaukee, 208 
Wis. 2d 18, 25, 559 N.W.2d 563 (1997); State v. Sweat,  208 
Wis. 2d 409, 415, 561 N.W.2d 695 (1997).  First, we examine the 
text of the statute.  See Clark, 218 Wis. 2d at 173; Stockbridge 
Sch. Dist. v. DPI Sch. Dist. Boundary Appeal Bd., 202 Wis. 2d 
214, 220, 550 N.W.2d 96 (1996).  If the meaning of the statute 
is plain, we do not look beyond the statutory language to 
determine legislative intent.  See Sweat, 208 Wis. 2d at 415; 
Stockbridge, 202 Wis. 2d at 220.  If the statute is ambiguous, 
the court turns to extrinsic aids such as the statute's purpose, 
context, scope and history to ascertain the intent of the 
legislature.  See Clark, 218 Wis. 2d at 173; Stockbridge, 202 
Wis. 2d at 220.  Statutory language is ambiguous whenever it may 
No. 97-0659 
 
13
reasonably be interpreted in more than one way.  See Sweat, 208 
Wis. 2d at 416.  We must determine the meaning of words and 
phrases within a statute in light of the statute as a whole.  
See id.  
¶22 State Farm urges that we interpret Wis. Stat. § 
632.32(4) in accordance with Hemerley v. American Family Mutual 
Insurance Co., 127 Wis. 2d 304, 379 N.W.2d 860 (Ct. App. 1985). 
 In Hemerley, the court of appeals construed the precise 
language of § 632.32(4) which is at issue in this case.8  See 
Hemerley, 127 Wis. 2d at 306-07.  First, the Hemerley court held 
that the statute was ambiguous because it could reasonably be 
read as requiring insurance for injuries caused either by 
uninsured vehicles or by vehicles owned or operated by uninsured 
persons.  See id. at 308.  To interpret the term “uninsured 
motor vehicle” in the statute, the court then turned to the 
purpose of § 632.32(4), and stated:  
 
The purpose [of Wis. Stat. § 632.32(4)(a)1] is to 
compensate an injured person when liability coverage 
is unavailable to the person who ought to pay.  That 
purpose makes it natural to speak in terms of 
uninsured motorist coverage.  Thus, the supreme court 
has said the purpose is to compensate for "an 
uninsured motorist's negligence to the same extent as 
if the uninsured motorist were insured." In view of 
that purpose, we construe "uninsured motor vehicle" in 
sec. 632.32(4)(a)1, Stats., to include a vehicle, 
neither the owner nor the operator of which is insured 
by liability insurance.  
 
                     
8 As we noted previously, the Hemerley court construed a 
different version of  Wis. Stat. § 632.32(4) than the 1995-96 
version, which we interpret here, but the relevant language of 
the two versions is identical.   
No. 97-0659 
 
14
Id. (citation omitted).  
¶23 We begin our discussion with the plain language of the 
statute.  Although Wis. Stat. § 632.32(4) refers in subsections 
(a)1 and (a)2 to "uninsured motor vehicles," subsection (a)3 
speaks in terms of "uninsured motorists' coverage."  See Wis. 
Stat. § 632.32(4)(a).  Furthermore, the first paragraph of 
§ 632.32(4) describes the insurance policies required to contain 
UM provisions as "[e]very policy . . . which insures with 
respect to any motor vehicle."  This paragraph does not serve to 
clarify whether “uninsured motor vehicle” is a vehicle which is 
not covered by insurance or a vehicle owned or operated by 
someone without insurance.  Consequently, as the court of 
appeals recognized in Hemerley, “reasonable persons could read 
sec. 632.32(4), Stats., either to require coverage to protect 
persons injured by a motor vehicle which is not insured, or to 
require coverage to protect persons injured when the vehicle's 
owner or operator has no insurance."9  Hemerley, 127 Wis. 2d at 
308.  We therefore agree with the court of appeals’ conclusion 
                     
9 Although the court of appeals did not expressly state in 
the present case that Wis. Stat. § 632.32(4)(a)1 is ambiguous, 
we believe that holding to be implicit in its ruling that 
Hemerley’s 
construction 
of 
§ 632.32(4)(a)1 
controlled 
its 
determination of whether the truck qualified as an “uninsured 
motor vehicle” under the statute.  See Hull, No. 97-0659, 
unpublished slip op. at 3, 6-8.    
No. 97-0659 
 
15
in Hemerley that the term "uninsured motor vehicles" in 
§ 632.32(4)(a)1 is ambiguous.10 
¶24 Next, to decipher the meaning of “uninsured motor 
vehicles” which was intended by the legislature, we turn to the 
underlying purpose of Wis. Stat. § 632.32(4).  We recently 
examined the purpose of Wis. Stat. § 632.32(4) in Clark v. 
American Family Mutual Insurance Company, 218 Wis. 2d 169, 577 
N.W.2d 790 (1998). In Clark, this court stated that "[T]he 
purpose of uninsured motorist coverage 'is to compensate an 
insured who is the victim of an uninsured motorist's negligence 
to the same extent as if the uninsured motorist were insured.'" 
 Clark, 218 Wis. 2d at 178 (quoting Nicholson v. Home Ins. Co., 
137 Wis. 2d 581, 591-92, 405 N.W.2d 327 (1987)).  We summed up 
our previous holdings regarding the legislative purpose of 
§ 632.32(4) as follows: 
 
In prior cases this court has viewed the statutorily 
required uninsured motorist coverage provision as if 
it were the liability coverage of the tortfeasor. . . 
. 
Thus 
uninsured 
motorist 
coverage 
essentially 
substitutes for insurance that the tortfeasor should 
have had. 
 
                     
10 We emphasize that we do not hold that the phrase 
“ownership, maintenance or use” in Wis. Stat. § 632.32(4) is 
ambiguous.  Rather, the phrase “ownership, maintenance or use” 
is as unambiguous in the statute as it is in Hull’s State Farm 
insurance policies.  In the statute, in contrast to the State 
Farm policies, the phrase “ownership, maintenance or use” is not 
part 
of 
the 
definition 
of 
“uninsured 
motor 
vehicle.”  
Consequently, our conclusion that the term “uninsured motor 
vehicles” in § 632.32(4) is ambiguous does not implicate the 
“ownership, maintenance or use” language.    
No. 97-0659 
 
16
Id.; see also United Fire & Cas. Co. v. Kleppe, 174 Wis. 2d 637, 
643, 498 N.W.2d 226 (1993); St. Paul Mercury Ins. Co. v. 
Zastrow, 166 Wis. 2d 423, 433, 480 N.W.2d 8 (1992).  Stated 
another way, the legislative purpose of § 632.32(4) is to place 
the insured in the same position as if the uninsured motorist 
had been insured.11  See Arnold P. Anderson, Wisconsin Insurance 
Law § 3.1, at 3-5 (4th ed. 1998).          
¶25  In view of this legislative purpose, the court in 
Hemerley determined that “uninsured motor vehicle” in Wis. Stat. 
§ 632.32(4) means “a vehicle, neither the owner nor the operator 
of which is insured by liability insurance.”  Hemerley, 127 
Wis. 2d at 308.  In Hemerley, the sole alleged tortfeasor, the 
driver of the vehicle, was insured.  In a case like the present 
one, however, there is more than one potential tortfeasor:  the 
owner, for the allegedly negligent maintenance of the vehicle, 
and the driver, for the allegedly negligent use of the vehicle. 
                     
11 In 1995, legislative amendments to Wis. Stat. § 632.32 
overturned our holdings in a line of cases including Nicholson 
v. Home Ins. Co., 137 Wis. 2d 581, 405 N.W.2d 327 (1987), and 
St. Paul Mercury Ins. Co. v. Zastrow, 166 Wis. 2d 423, 480 
N.W.2d 8 (1992), as we recognized in Clark v. American Family 
Mutual Ins. Co., 218 Wis. 2d 169, 177, nn.3-4, 577 N.W.2d 790 
(1998).  See 1995 Wis. Act 21.  These amendments did not affect 
our statements in Nicholson and Zastrow regarding the underlying 
purpose of § 632.32(4), however.  The legislative purpose of UM 
coverage remains to place the insured in the same position he or 
she would have been in, had the uninsured motorist been insured. 
 See Clark, 218 Wis. 2d at 178.  The effect of the amendments is 
to render the underlying purpose of § 632.32(4) subject to new 
statutory provisions relating to stacking and drive-other-car 
exclusions.  See Arnold P. Anderson, Wisconsin Insurance Law § 
3.1, at 3-5 (4th ed. 1992); 1995 Wis. Act. 21 (creating Wis. 
Stat. § 632.32(5)(f)-(j)).  None of the new provisions are 
implicated in this case. 
No. 97-0659 
 
17
 In this suit, Hull seeks UM coverage for the allegedly 
negligent maintenance of the truck by its uninsured owner.  The 
only way in which to place Hull in the same position she would 
have been in, had the uninsured 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.  
Application of the Hemerley definition of “uninsured motor 
vehicle” would deny Hull UM coverage for the owner’s alleged 
negligence, 
because 
of 
the 
driver’s 
insured 
status.  
Consequently, we agree with the court of appeals in this case 
that the Hemerley definition of “uninsured motor vehicle” 
contravenes the legislative purpose of Wis. Stat. § 632.32(4) in 
the multiple tortfeasor situation presented in this case.    
¶26  We conclude that the only way in which the legislative 
purpose of Wis. Stat. § 632.32(4) can be served in this case is 
to hold, as we do, 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. 
Since the application of Hemerley's definition of "uninsured 
motor vehicle" in situations like the current one, in which 
there is more than one alleged tortfeasor, would contravene the 
purpose underlying § 632.32(4), we overrule Hemerley.12  
                     
12 For the sake of clarity, we choose to overrule Hemerley 
rather than limit it to its facts. 
No. 97-0659 
 
18
¶27 State Farm objects to our construction of Wis. Stat. 
§ 632.32(4) on two grounds.  First, State Farm expresses concern 
that its obligation to provide UM coverage will be almost 
limitless under our ruling.  Specifically, State Farm contends 
that insurers will be required to provide UM coverage for 
injuries caused by the negligent maintenance of the vehicle by 
remote tortfeasors, such as mechanics and auto parts suppliers. 
 Section (a)1 states, however, that UM coverage must only be 
provided to those entitled to recover from "owners or operators 
of uninsured motor vehicles."  Wis. Stat. § 632.32(4)(a)1.  We 
find that this "owners or operators" restriction is sufficient 
to provide a logical stopping point for mandatory UM coverage.  
¶28 Second, State Farm maintains that this court already 
accepted Hemerley's interpretation of Wis. Stat. § 632.32(4) by 
citing Hemerley with approval in Schwochert v. American Family 
Mutual Insurance Company, 139 Wis. 2d 335, 351, 407 N.W.2d 525 
(1987).13  The facts of Schwochert parallel the facts of 
Hemerley, however, and both cases present situations distinct 
from the one in this case.  In both Hemerley and Schwochert, the 
plaintiffs claimed UM damages for negligence of the driver of 
                     
13 We note that in Wood v. American Family Mutual Insurance 
Company, 148 Wis. 2d 639, 649, 436 N.W.2d 594 (1989), this court 
withdrew some language from Schwochert v. American Family Mutual 
Insurance Company, 139 Wis. 2d 335, 407 N.W.2d 525 (1987), which 
it characterized as "dictum."  That language has no bearing on 
the court's consideration of Schwochert in this case.  Moreover, 
this court has ruled since Wood that the rest of Schwochert "is 
still the law in Wisconsin,"  Schwochert v. American Family Mut. 
Ins. Co., 172 Wis. 2d 628, 636, 494 N.W.2d 201 (1993), and has 
overruled portions of Wood itself, see Matthiesen v. Continental 
Cas. Co., 193 Wis. 2d 192, 202, 532 N.W.2d 729 (1995).   
No. 97-0659 
 
19
the vehicle, who was covered by insurance, based on the theory 
that no insurance covered the vehicle itself.  See Schwochert, 
139 Wis. 2d at 337-39; Hemerley, 127 Wis. 2d at 306.  The single 
tortfeasor in each case was insured.  In Schwochert, the parties 
even stipulated that the sole cause of the accident was the 
negligence of the driver.  See Schwochert, 139 Wis. 2d at 337. 
¶29 In contrast, there are two potential tortfeasors in 
this case, and the one whose alleged negligence gives rise to UM 
damages, the truck's owner, was not insured.  Neither Hemerley 
nor Schwochert considered the application of the Hemerley 
definition 
of 
"uninsured 
motor 
vehicle" 
in 
the 
multiple 
tortfeasor scenario presented in this case.  Therefore, the 
citation of Hemerley in Schwochert should not be considered as 
approval of the Hemerley definition in the very different 
factual setting presented here.  
¶30 We hold that Wis. Stat. § 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.  Since the allegedly negligent owner of the motor 
vehicle in this case was not insured, § 632.32(4) requires that 
State Farm provide UM coverage to Hull. 
V. 
¶31 In sum, we conclude that Hull is entitled to uninsured 
motorist coverage under both the terms of her two State Farm 
insurance policies and Wis. Stat. § 632.32(4).  Because we find 
that the decisions of both the court of appeals and the circuit 
No. 97-0659 
 
20
court are based on errors of law, and because we overrule 
Hemerley, we reverse the court of appeals.   
¶32 We hold first that the language of the identical UM 
provisions in Hull's insurance policies plainly provides UM 
coverage in this case.  We interpret the word “or” in the phrase 
“ownership, maintenance or use” disjunctively, in accordance 
with its plain meaning.  Therefore, the policies provide UM 
coverage when either the ownership or the maintenance or the use 
of the vehicle is uninsured.  Since the maintenance of the 
pickup truck in this case was uninsured, the truck was an 
“uninsured motor vehicle” under the State Farm policies, even 
though 
its 
use 
was 
insured 
under 
the 
driver’s 
policy.  
Accordingly, Hull is entitled to UM coverage under the terms of 
her insurance policies, if, as alleged, the truck was not 
insured by its owner for bodily injury liability and had been 
negligently maintained by him.  We, therefore, reverse the order 
dismissing Hull's complaint. 
¶33 Further, we conclude that Wis. Stat. § 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.  Any rule to the contrary would contravene 
the legislative purpose of the statute, which is “to compensate 
an insured who is the victim of an uninsured motorist's 
negligence to the same extent as if the uninsured motorist were 
insured."  Clark, 218 Wis. 2d at 178 (citations omitted).  Since 
the allegedly negligent owner of the motor vehicle in this case 
No. 97-0659 
 
21
was not insured, § 632.32(4) requires that State Farm provide UM 
coverage to Hull.  
By the Court.—The decision of the court of appeals is 
reversed, and the cause is remanded.
 
 
1