Title: Bradley Clark v. American Family Mutual Insurance Company
Citation: N/A
Docket Number: 1997AP000970
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: May 21, 1998

SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
97-0970 
 
 
Complete Title 
of Case: 
 
 
Bradley Clark, Barnes A. Clark,  
 
Plaintiffs-Respondents, 
ABC Insurance Company,  
 
Plaintiff, 
 
v. 
American Family Mutual Insurance Company,  
 
Defendant-Appellant.  
 
ON CERTIFICATION FROM THE COURT OF APPEALS 
 
 
Opinion Filed: 
May 21, 1998 
Submitted on Briefs: 
 
Oral Argument: 
March 5, 1998 
 
 
Source of APPEAL 
 
COURT: 
Circuit 
 
COUNTY: 
Dane 
 
JUDGE: 
Robert DeChambeau 
 
 
JUSTICES: 
 
Concurred: 
 
 
Dissented: 
 
 
Not Participating:  
 
 
ATTORNEYS: 
For the defendant-appellant there were briefs by 
John M. Moore, David J. Pliner and Bell, Metzner, Gierhart & 
Moore, S.C., Madison and oral argument by David J. Pliner. 
 
 
For the plaintiffs-respondents there was a brief 
by John M. Riley and Atterbury, Riley & Luebke, S.C., Madison and 
oral argument by John M. Riley. 
 
No.  97-0970 
 
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. 97-0970 
 
STATE OF WISCONSIN               :        
        
 
 
 
 
IN SUPREME COURT 
 
 
Bradley Clark, Barnes A. Clark,  
 
          Plaintiffs-Respondents, 
 
ABC Insurance Company,  
 
          Plaintiff, 
 
     v. 
 
American Family Mutual Insurance Company,  
 
 
          Defendant-Appellant.  
FILED 
 
MAY 21, 1998 
 
Marilyn L. Graves 
Clerk of Supreme Court 
Madison, WI 
 
 
 
 
 
APPEAL from an order of the Circuit Court for Dane County, 
Robert A. DeChambeau, Judge.  Reversed. 
¶1 
WILLIAM 
A. 
BABLITCH, 
J.   American 
Family 
Mutual 
Insurance Company appeals from an order of the circuit court 
which determined that a territorial exclusion contained in an 
insurance policy for uninsured motorist coverage was not valid 
under Wisconsin law.  Bradley Clark (Clark) was injured on an 
island off the coast of Greece when the brakes failed on a moped 
that he had rented from an uninsured Greek citizen.  Clark 
claimed 
uninsured 
motorist 
coverage 
under 
his 
father’s 
automobile policy with American Family.  The territorial 
exclusion 
in 
the 
policy 
excluded 
coverage 
for 
accidents 
occurring outside the United States and Canada.  Because 
No.  97-0970 
 
2 
Wisconsin Statutes expressly allow exclusions not otherwise 
prohibited by law, and because an exclusion such as the one 
provided in this insurance policy is not prohibited by law, we 
reverse the order of the circuit court.  
¶2 
The facts relevant to the determination of this appeal 
are not in dispute.  In 1991, Clark, then 22 years old, was 
injured while driving a rented moped on an island off the coast 
of Greece.  The brakes failed on the moped, and he was thrown.  
The owner of the moped was an uninsured Greek citizen.   
¶3 
Because the Greek citizen was uninsured, Clark sought 
recovery under the uninsured motorist provisions of his father’s 
three 
automobile 
insurance 
policies 
with 
American 
Family 
Insurance.  American Family denied coverage because each policy 
contains a general territorial exclusion which provides as 
follows: "This policy covers only accidents, occurrences, and 
losses which occur: a. Within the United States of America, its 
territories or possessions, or Canada, or between their ports . 
. . ."  This territorial exclusion is included in the section of 
the policy titled "General Provisions" and applies to all 
sections of the policy.   
¶4 
Clark and his father, the insurance policy-holder, 
filed suit against American Family, claiming that Clark was 
entitled to uninsured motorist coverage from American Family for 
the injuries he sustained in the accident.  American Family 
filed a motion for summary judgment on several grounds including 
its assertion that the territorial exclusion in the policy 
barred Clark's recovery.  The circuit court denied summary 
No.  97-0970 
 
3 
judgment on all grounds.  With respect to the territorial 
exclusion, 
the 
court 
reasoned 
that 
although 
Wis. 
Stat. 
§ 632.32(5)(e) (1989-90)1 allows insurance companies to create 
exceptions from coverage for both liability and uninsured 
motorist coverage, case law has not upheld exceptions from 
uninsured motorist protection.  Therefore, the circuit court 
determined that the territorial exclusion in American Family's 
policy did not apply to uninsured motorist coverage and, 
accordingly, Clark’s claim for uninsured motorist benefits was 
covered.   
¶5 
The case proceeded to trial.  The jury found the Greek 
citizen to be 65 percent negligent for failing to maintain the 
moped and found Clark to be 35 percent contributorily negligent 
for the accident.  After imposing the 35 percent reduction for 
Clark’s contributory negligence, see Wis. Stat. § 895.045, 
damages were assessed at $314,726.  The circuit court granted 
Clark's motion for judgment on the verdict for damages of 
$314,726 together with costs of $8,913.   
¶6 
American Family appealed, and the court of appeals 
certified the case to this court, pursuant to Wis. Stat. 
§ (Rule) 809.61, to determine whether a territorial exclusion 
included in an insurance policy for uninsured motorist coverage 
is valid.  This question requires that we interpret Wis. Stat. 
§ 632.32, governing uninsured motorist coverage.  Statutory 
                     
1 References to Wisconsin Statutes is to the 1989-90 version 
unless otherwise noted.  
No.  97-0970 
 
4 
interpretation is a question of law which we review de novo.  
See Stockbridge School Dist. v. DPI, 202 Wis. 2d 214, 219, 550 
N.W.2d 96 (1996).  The main goal of statutory interpretation is 
to discern the intent of the legislature.  See Anderson v. City 
of Milwaukee, 208 Wis. 2d 18, 25, 559 N.W.2d 563 (1997) 
(citations omitted).  We first look to the plain language of the 
statute.  See id.  If the plain language is ambiguous, we turn 
to extrinsic aids such as the legislative history, scope, 
context and purpose of the statute to determine legislative 
intent.  See id. 
¶7 
Wisconsin Stat. § 632.32 applies to all motor vehicle 
insurance policies issued or delivered in Wisconsin.  See 
§ 632.32(1).  Wisconsin Stat. § 632.32(4)(a) requires that every 
automobile liability insurance policy issued in this state 
include uninsured motorist coverage.  The statute requires 
uninsured motorist coverage in limits of at least $25,000 per 
person and $50,000 per accident.  See § 632.32(4)(a).   
¶8 
Wisconsin 
Stat. 
§ 632.32 
also 
allows 
insurance 
companies to provide exclusions in automobile policies.  See 
Wis. Stat. § 632.32(5)(e).  “A policy may provide for exclusions 
not 
prohibited 
by 
sub. 
(6) 
or 
other 
applicable 
law.”  
§ 632.32(5)(e).  This subsection is not ambiguous, and the 
legislature's intent is clear. We need not look beyond this 
unambiguous statutory language to discern the legislature’s 
intent:  the intent is to provide that an insurance contract may 
include exclusions not specifically listed in Wis. Stat. 
§ 632.32(6) or prohibited by other applicable law.  
No.  97-0970 
 
5 
¶9 
Therefore, 
the 
present 
case 
is 
resolved 
by 
considering: 1) whether the territorial exclusion in American 
Family's policy is prohibited by Wis. Stat. § 632.32(6); if not, 
then 2) whether the territorial exclusion is prohibited by other 
applicable law.  If the answer to both questions is no, the 
territorial exclusion included in American Family’s automobile 
insurance contract is valid and bars Clark's claim for uninsured 
motorist coverage.   
¶10 Nothing in Wis. Stat. § 632.32(6) (reprinted below)2 
prohibits 
a 
territorial 
exclusion 
for 
uninsured 
motorist 
                     
2 Wis. Stat. § 632.32(6) provides in full: 
(a) No policy issued to a motor vehicle handler may 
exclude coverage upon any of its officers, agents or 
employes when any of them are using motor vehicles 
owned by customers doing business with the motor 
vehicle handler.  
(b) No policy may exclude from the coverage afforded 
or benefits provided: 
1. Persons related by blood or marriage to the 
insured. 
2. a.  Any person who is a named insured or 
passenger in or on the insured vehicle, with respect 
to bodily injury, sickness or disease, including death 
resulting therefrom, to that person. 
b. This subdivision, as it relates to passengers, 
does not apply to a policy of insurance for a 
motorcycle as defined in s. 340.01(32) or a moped as 
defined in s. 340.01(29m) if the motorcycle or moped 
is designed to carry only one person and does not have 
a seat for any passenger. 
3. Any person while using the motor vehicle, solely 
for reasons of age, if the person is of an age 
authorized to drive a motor vehicle. 
4. Any use of the motor vehicle for unlawful 
purposes, or for transportation of liquor in violation 
of law, or while the driver is under the influence of 
an intoxicant or a controlled substance under ch. 161 
or a combination thereof, under the influence of any 
No.  97-0970 
 
6 
coverage.  There is no possible way to construe § 632.32(6) on 
its face as prohibiting a territorial exclusion for uninsured 
motorist coverage.  Therefore, the answer to the first question, 
whether the territorial exclusion in American Family’s policy is 
prohibited by § 632.32(6), is "no." 
¶11 The second question is whether “other applicable law” 
prohibits an insurance company from imposing a territorial 
exclusion on uninsured motorist insurance coverage.  Clark has 
not 
pointed 
to 
any 
statute 
which 
expressly 
prohibits 
a 
territorial exclusion for uninsured motorist coverage, and we 
can find none.  However, Clark points to language in Wis. Stat. 
§ 344.33(2) which requires that liability insurance extend to 
“damages arising out of the maintenance or use of the motor 
vehicle within the United States of America or the Dominion of 
Canada . . . .”  § 344.33(2).  He argues that the absence of 
similar 
language 
in 
Wis. 
Stat. 
§ 632.32(4)(a) 
shows 
a 
legislative intent to not apply a territorial exclusion to 
uninsured motorist coverage.  We are not persuaded by Clark’s 
argument.  Section 344.33(2) does not mandate that § 632.32(4) 
provide coverage for the entire world as Clark invites us to 
                                                                  
other drug to a degree which renders him or her 
incapable of safely driving, or under the combined 
influence of an intoxicant and any other drug to a 
degree which renders him or her incapable of safely 
driving, or any use of the motor vehicle in a reckless 
manner.  In this subdivision, “drug” has the meaning 
specified in s. 450.01(10).   
(c) No policy may limit the time for giving notice 
of any accident or casualty covered by the policy to 
less than 20 days. 
(d)  
No.  97-0970 
 
7 
read these statutes.  Section 344.33(2) sets a floor, not a 
ceiling.  Section 344.33(2) says that liability policies must 
provide coverage in the United States and Canada; it does not 
preclude an insurance company from providing coverage outside 
the United States and Canada.  Accordingly, the absence of a 
similar mandated minimal coverage area in § 632.32(4) cannot be 
read as implying a legislative mandate to cover the entire 
world.   
¶12 We 
also 
discern 
no 
case 
law 
which 
prohibits 
territorial 
exclusions 
for 
uninsured 
motorist 
coverage.  
Although the exact question presented by this case is one of 
first impression, this court and the court of appeals have, on 
several occasions, been faced with clauses in insurance policies 
which limited or excluded uninsured motorist coverage in certain 
situations.  Clark argues that the courts have consistently 
invalidated attempts to restrict the scope of uninsured motorist 
coverage.  However, in each instance, the court relied on 
legislative 
intent 
as 
expressed 
in 
a 
specific 
statutory 
provision to hold the limiting or exclusionary clause void and 
invalid. 
¶13 A survey of Wisconsin case law cited to us by the 
plaintiff shows that in several cases, the courts relied on Wis. 
Stat. § 631.43(1), allowing stacking of uninsured motorist 
coverage, to invalidate insurance policy clauses which limited 
uninsured motorist coverage.  See, e.g., Welch v. State Farm 
Mutual Automobile Ins. Co., 122 Wis. 2d 172, 361 N.W.2d 680 
(1985); Carrington v. St. Paul Fire & Marine Ins., 164 Wis. 2d 
No.  97-0970 
 
8 
148, 473 N.W.2d 591 (Ct. App. 1991); Hulsey v. American Family 
Mutual Ins. Co., 142 Wis. 2d 639, 419 N.W.2d 288 (Ct. App. 
1987); Parks v. Waffle, 138 Wis. 2d 70, 405 N.W.2d 690 (Ct. App. 
1987).3  In the other cases cited by the plaintiff, the courts 
relied on Wis. Stat. § 632.32(4)(a), requiring that uninsured 
motorist 
coverage 
be 
included 
in 
insurance 
policies, 
to 
invalidate 
insurance policy 
clauses 
which 
limit 
uninsured 
motorist coverage.  See, e.g., St. Paul Mercury Ins. Co. v. 
Zastrow, 166 Wis. 2d 423, 480 N.W.2d 8 (1992); Nicholson v. Home 
Ins. Co., 137 Wis. 2d 581, 405 N.W.2d 327 (1987); Niemann v. 
Badger Mutual Ins. Co., 143 Wis. 2d 73, 420 N.W.2d 378 (Ct. App. 
1988); Hulsey, 142 Wis. 2d at 639.4  However, neither § 631.43(1) 
nor § 632.32(4)(a) is applicable to territorial exclusions.  
¶14 A further distinguishing factor is that all of the 
cases cited by the plaintiff occurred within the United States. 
 None of these cases raised or decided the issue of territorial 
exclusions. 
                     
3 We note that the Wisconsin legislature overturned this 
series of cases when it enacted 1995 Wis. Act 21 which, among 
other things, created Wis. Stat. § 632.32(5)(f).  Section 
632.32(5)(f) allows insurance policies to prohibit stacking of 
coverage.  However, this statute was first effective on July 15, 
1995, see 1995 Wis. Act 21, § 5-6, long after the accident 
involving Clark occurred.   
4 We note that when the Wisconsin legislature enacted 1995 
Wis. Act 21, it also overturned this series of cases with the 
creation of Wis. Stat. §§ 632.32(g), (i), and (j).  See 1995 
Wis. Act 21, § 4.  Again, this statute was first effective on 
July 15, 1995, see 1995 Wis. Act 21, § 5-6, long after the 
accident involving Clark occurred. 
No.  97-0970 
 
9 
¶15 Clark also points to language in Welch in which this 
court stated that “uninsured motorist coverage is personal and 
portable coverage which protects the insured from uninsured 
motorists in all instances.”  Welch, 122 Wis. 2d at 179.  We 
agree with respondent’s argument that the description in Welch 
of uninsured motorist coverage as “personal and portable 
coverage which protects the insured from uninsured motorists in 
all instances” refers generally to uninsured motorist coverage 
and is not tied to Wis. Stat. § 631.43(1), the stacking statute. 
¶16 Nevertheless, we conclude that this description of 
uninsured motorist coverage does not bar an insurance company 
from excluding uninsured motorist coverage outside the United 
States and Canada. 
¶17 In prior cases this court has viewed the statutorily 
required uninsured motorist coverage provision as if it were the 
liability coverage of the tortfeasor.  The 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.”  Nicholson, 137 Wis. 2d at 
591-92.  The purpose of uninsured motorist coverage is not to 
compensate the victim to a extent greater than would be 
available if the tortfeasor were insured.  Thus uninsured 
motorist coverage essentially substitutes for insurance that the 
tortfeasor should have had. 
¶18 Stated another way, by purchasing uninsured motorist 
coverage, the plaintiffs purchased liability coverage for the 
uninsured Greek citizen, subject however to the territorial 
No.  97-0970 
 
10
exclusions within the United States and Canada.  See, e.g., Wis. 
Stat. § 344.33(2) (requiring liability insurance coverage within 
the United States and Canada).  It is in keeping with prior 
cases and Wis. Stat. § 632.32 to construe the territorial 
limitations on coverage the same for both liability coverage and 
uninsured motorist coverage. 
¶19 In 
conclusion, 
the 
legislature 
clearly 
and 
unambiguously expressed its intent through enactment of Wis. 
Stat. § 632.32(5)(e) to allow insurance companies to provide 
exclusions not otherwise prohibited by law.  Wisconsin Stat. 
§ 632.32(6) expressly prohibits certain exclusions but does not 
prohibit territorial exclusions.  Wisconsin Stat. § 631.43 
expressly prohibits provisions which have the effect of reducing 
aggregate protection; that is, provisions which do not allow 
stacking of uninsured motorist coverage but that statute is not 
relevant to this case.  Wisconsin Stat. § 632.32(4)(a) expressly 
mandates that automobile insurance policies include uninsured 
motorist coverage but is also not relevant to this case.  
Therefore, neither statutes nor case law expressly prohibit 
territorial limitations such as that included in the American 
Family policy at issue in this case.  Accordingly, we hold that 
the territorial exclusion 
for uninsured motorist coverage 
contained in this policy is valid. Because we reach this 
conclusion, we need not address the other issues raised by this 
case. 
By the Court.—The order of the circuit court is reversed. 
 
No.  97-0970 
 
11
 
 
 
1