Title: James E. Vieau v. American Family Mutual Insurance Company
Citation: 2006 WI 31
Docket Number: 2004AP001358
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: April 19, 2006

2006 WI 31 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2004AP1358 
 
 
COMPLETE TITLE: 
 
 
James E. Vieau, 
          Plaintiff-Appellant-Petitioner, 
     v. 
American Family Mutual Insurance Company and 
Acuity, a mutual insurance company, 
          Defendants-Respondents. 
 
 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2005 WI App 34 
Reported at: 278 Wis. 2d 683, 693 N.W.2d 127 
(Ct. App. 2005 – Published) 
 
 
OPINION FILED: 
April 19, 2006   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
December 1, 2005   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Brown   
 
JUDGE: 
Donald R. Zuidmulder   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the plaintiff-appellant-petitioner, there were briefs 
by Robert J. Janssen, Christina Peterson, and Stellpflug, 
Janssen, Hammer, Kirschling & Bartels, S.C., De Pere, and oral 
argument by Robert J. Janssen. 
 
For 
the 
defendant-respondent 
American 
Family 
Mutual 
Insurance Company, there was a brief by Robert N. Duimstra and 
Menn Law Firm, Ltd., Appleton, and oral argument by Jonathan M. 
Menn. 
 
 
2006 WI 31
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2004AP1358  
(L.C. No. 
2003CV680) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
James E. Vieau, 
 
          Plaintiff-Appellant-Petitioner, 
 
     v. 
 
American Family Mutual Insurance Company and 
Acuity, a mutual insurance company, 
 
          Defendants-Respondents. 
 
 
 
FILED 
 
APR 19, 2006 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed.   
 
¶1 
JON P. WILCOX, J.   The petitioner, James E. Vieau 
(Vieau), seeks review of a court of appeals decision affirming a 
summary judgment order of the Brown County Circuit Court, Donald 
R. Zuidmulder, Judge, in favor of American Family Mutual 
Insurance Company (American Family) in a personal injury action 
arising from a motor vehicle accident.  See Vieau v. Am. Family 
Mut. Ins. Co., 2005 WI App 34, 278 Wis. 2d 683, 693 N.W.2d 127.  
Vieau did not petition for review of the decision as it pertains 
No. 
2004AP1358   
 
2 
 
to Acuity, a mutual insurance company; therefore, this appeal is 
limited to the decision as it pertains to American Family. 
¶2 
We first determine that Wis. Stat. § 632.32(6)(b)1. 
(2003-04)1 applies to underinsured motorist (UIM) coverage when 
issued as part of a policy containing liability insurance.  We 
further 
conclude 
that 
American 
Family's 
"own-other-car" 
definitional exclusion is valid under Wis. Stat. § 632.32(5)(e) 
as Vieau is excluded from his mother's UIM coverage because he 
owns his own motor vehicle and not because he is related by 
blood to the named insured.  Therefore, we affirm the court of 
appeals. 
I 
¶3 
The pertinent facts are set forth as follows.  This 
case arises from an automobile accident that occurred on June 1, 
2002.  Vieau was a passenger in a truck owned and operated by 
Shane P. Kaczrowski (Kaczrowski).  Vieau alleged in his 
complaint 
that 
Kaczrowski 
was 
driving 
the 
vehicle 
while 
intoxicated; 
Kaczrowski 
denied 
this 
allegation. 
 
While 
attempting to negotiate a curve in the roadway, the vehicle 
traveled off of the roadway and into a ditch.  The truck then 
struck 
a 
driveway 
embankment 
and 
became 
airborne 
for 
approximately 93 feet before it struck the ground and rolled 
several times.  Vieau suffered serious injuries as a result of 
the accident and claimed medical expenses in excess of $60,000.   
                                                 
1 All references to the Wisconsin Statutes are to the 2003-
04 version unless otherwise noted.   
No. 
2004AP1358   
 
3 
 
¶4 
There were three policies in force at the time of the 
accident that might have provided coverage to Vieau.  First, 
Vieau had a policy issued by Acuity, insuring his 1976 Ford 
pickup truck; this policy included UIM coverage limits of 
$50,000 
per 
person 
and 
$100,000 
per 
accident. 
 
Second, 
Kaczrowski had a policy issued by Acuity with bodily injury 
limits of liability of $25,000 per person and $50,000 per 
occurrence; the policy also contained UIM coverage limits of 
$50,000 per person and $100,000 per accident.  Third, Kathy 
Vieau had a policy issued by American Family for her 1993 
Plymouth Acclaim that had UIM coverage limits of $100,000 per 
person and $300,000 per accident. 
¶5 
On April 17, 2003, Vieau filed a lawsuit for personal 
injuries against American Family, Kaczrowski, and Acuity2 seeking 
UIM coverage from the insurance carriers and Kaczrowski.  
Manitowoc County was also named in the complaint but was later 
voluntarily dismissed.   
¶6 
Vieau recovered the $25,000 bodily injury liability 
insurance proceeds under Kaczrowski's Acuity policy, and he also 
recovered $25,000 of UIM insurance proceeds under his own 
policy.3  However, he further alleged entitlement to UIM benefits 
                                                 
2 Our review solely concerns American Family and the policy 
it issued to Kathy Vieau.  Therefore, Acuity's involvement in 
this case and the policies Acuity issued to Vieau and Kaczrowski 
will be discussed only as needed.   
3 Vieau's policy contains a reducing clause that reduced his 
UIM coverage from $50,000 to $25,000 by virtue of the $25,000 
liability payment made by Acuity on behalf of Kaczrowski.   
No. 
2004AP1358   
 
4 
 
under his mother's policy.  In response to Vieau's claim, 
American Family moved for summary judgment declaring that Kathy 
Vieau's policy provided no UIM coverage to Vieau.  American 
Family based its argument on the fact that Vieau was not a 
"relative" entitled to coverage because the policy's definition 
of "relative" did not include anyone who owned a motor vehicle. 
¶7 
The policy's UIM endorsement defines an "insured 
person" as "[y]ou or a relative."  A "relative," in turn, is 
defined throughout the policy as "a person living in your 
household, 
related 
to 
you 
by 
blood, 
marriage 
or 
adoption. . . . It does not include any person who, or whose 
spouse, owns a motor vehicle other than an off-road motor 
vehicle."  It is undisputed that, at the time of the accident, 
Vieau lived with his parents, Robert and Kathy Vieau, and Vieau 
owned a motor vehicle.  
¶8 
After briefing and a hearing, the circuit court 
granted American Family's summary judgment motion in an order 
filed April 7, 2004, and Vieau's claims against American Family 
were dismissed.  The court determined that Kathy Vieau's policy 
provided no UIM coverage for the claims of Vieau.   
¶9 
Vieau appealed, and the court of appeals affirmed.  
The court first recognized the uncertainty in the case law as to 
whether 
Wis. Stat. § 632.32(6)(b)1. 
applies 
to 
indemnity 
coverage.  However, the court assumed for the sake of argument 
the provisions of § 632.32 did apply to indemnity insurance, and 
it instead based its holding on § 632.32(5)(e), which states:  
"[a] policy may provide for exclusions not prohibited by sub. 
No. 
2004AP1358   
 
5 
 
(6) or other applicable law.  Such exclusions are effective even 
if incidentally to their main purpose they exclude persons, uses 
or coverages that could not be directly excluded under sub. 
(6)(b)."  Comparing the situation to Peabody v. American Family 
Mutual Insurance Co., 220 Wis. 2d 340, 582 N.W.2d 753 (Ct. App. 
1998), the court of appeals determined that "[t]he purpose of 
this exclusion is not to deny coverage or benefits to relatives, 
but to prevent car owners who either reject UIM coverage or who 
have independent policies from getting coverage they have not 
paid for simply because of their resident relative status."  See 
Vieau, 278 Wis. 2d 683, ¶11 (citing Peabody, 220 Wis. 2d at 
354).  
II 
¶10 This case comes before us on summary judgment. "We 
review 
a 
circuit 
court's 
grant 
of 
summary 
judgment 
independently, applying the same methodology as the circuit 
court." Smaxwell v. Bayard, 2004 WI 101, ¶12, 274 Wis. 2d 278, 
682 N.W.2d 923 (citing Town of Delafield v. Winkelman, 2004 WI 
17, 
¶15, 
269 
Wis. 2d 109, 
675 
N.W.2d 
470). 
Pursuant 
to 
Wis. Stat. § 802.08(2), summary judgment "shall be rendered if 
the pleadings, depositions, answers to interrogatories, and 
admissions on file, together with the affidavits, if any, show 
that there is no genuine issue as to any material fact and that 
the moving party is entitled to a judgment as a matter of law."  
"Where the material facts are not disputed, the court is 
presented solely with a question of law, subject to de novo 
No. 
2004AP1358   
 
6 
 
review." Smaxwell, 274 Wis. 2d 278, ¶12 (citing Winkelman, 269 
Wis. 2d 109, ¶16).   
¶11 In this case, we address whether American Family's 
"own-other-car" 
definitional 
exclusion 
is 
valid 
under 
Wis. Stat. § 632.32(6)(b)1. 
 
"This 
issue requires that we 
interpret and apply statutory provisions to undisputed facts and 
that we interpret an insurance policy.  These are questions of 
law subject to independent appellate review."  Progressive N. 
Ins. Co. v. Hall, 2006 WI 13, ¶9, __ Wis. 2d __, 709 N.W.2d 46 
(citing Beerbohm v. State Farm Mut. Auto. Ins. Co., 2000 WI App 
105, ¶8, 235 Wis. 2d 182, 612 N.W.2d 338).   
III 
¶12 As a preliminary matter, the parties dispute whether 
the requirements of § 632.32(6)(b)1. extend to UIM coverage.  
More 
specifically, 
the 
parties 
dispute 
whether 
Wis. Stat. § 632.32(1)4 limits the scope of § 632.32(6)(b)1. to 
liability coverage and not indemnity coverages such as UIM 
coverage. 
¶13 Vieau relies on Mau v. North Dakota Insurance Reserve 
Fund, 2001 WI 134, 248 Wis. 2d 1031, 637 N.W.2d 45, for his 
argument that § 632.32(6)(b)1. applies to both liability and 
indemnity policies.  In Mau, this court questioned statements 
                                                 
4 Wisconsin Stat. § 632.32(1) provides: "Except as otherwise 
provided, this section applies to every policy of insurance 
issued or delivered in this state against the insured's 
liability for loss or damage resulting from accident caused by 
any motor vehicle, whether the loss or damage is to property or 
to a person."   
No. 
2004AP1358   
 
7 
 
from previous decisions that suggested certain provisions of 
§ 632.32 applied solely to liability policies: 
Wis. Stat. § 632.32, which, except as otherwise 
provided, applies to all motor vehicle insurance 
policies issued or delivered in Wisconsin.  Clark v. 
Am. Family Mut. Ins. Co., 218 Wis. 2d 169, 173, 577 
N.W.2d 790 (1998).  Some earlier cases suggest that 
certain provisions of § 632.32 apply only to liability 
policies, not indemnity insurance.  See Martin v. 
Milwaukee Mut. Ins. Co., 146 Wis. 2d 759, 770, 433 
N.W.2d 1 (1988); Peabody v. American Family Mut. Ins. 
Co., 220 Wis. 2d 340, 350, 582 N.W.2d 753 (Ct. App. 
1998).  However, the plain language of several 
subsections in § 632.32 demonstrate the applicability 
of 
those 
sections 
to 
indemnity 
insurance. . . .  
Furthermore, this court has applied § 632.32 to 
indemnity insurance. 
Id., ¶30 (citations omitted). 
¶14 Thus, Vieau argues that the circuit court erroneously 
relied on Peabody for its conclusion that American Family's 
definition of "relative" is not barred by § 632.32(6)(b)1. 
because, Vieau contends, Mau overruled Peabody.  American 
Family, on the other hand, contends Mau is distinguishable from 
Peabody because Mau considered an excess liability policy, 
whereas Peabody considered UIM indemnity coverage.   
¶15 In Peabody, the court of appeals addressed a factually 
analogous case with an identical "own-other-car" exclusion.  
Peabody, 220 Wis. 2d at 347-48.  In that case, Angela Peabody, 
like James Vieau, was attempting to obtain UIM benefits as a 
resident relative under her father's American Family policy 
issued on his own vehicle.  Id. at 345.  The court of appeals 
first determined that the policy "clearly and unambiguously 
limits the UIM coverage to the named insured or a relative, 
No. 
2004AP1358   
 
8 
 
provided the relative does not own his or her own vehicle."  Id. 
at 347.  Peabody owned her own vehicle; therefore, the court 
concluded that on its face, the policy prevented her from 
receiving UIM coverage because she did not meet the definition 
of "relative."  Id. at 349.   
¶16 Peabody 
argued 
§ 632.32(6)(b)1. 
applied 
to 
all 
insurance policies, and therefore, American Family's exclusion 
was contrary to § 632.32(6)(b)1., because the policy excluded a 
blood relative.  Id.  Relying on § 632.32(1), the court of 
appeals 
disagreed 
with 
Peabody 
and 
concluded 
that 
§ 632.32(6)(b)1. 
"prevents 
insurers 
from 
excluding 
persons 
related by blood or marriage from receiving coverage or benefits 
under a liability insurance policy."  Id. at 350 (emphasis in 
original).  In other words, subsection (6)(b)1. "does not 
contain any language otherwise providing that its applicability 
is anything other than to liability policies.  The plain 
language of the statutory scheme indicates that insurance 
policies may not exclude relatives by blood or marriage from 
liability coverage or benefits, but does not prohibit all 
exclusions under all circumstances."  Id. at 350 (citing 
Wis. Stat. § 632.32(5)(e)) (emphasis in original). 
¶17 Interestingly, 
Peabody 
seemingly 
ignored 
the 
completely opposite language in distinguishing Bindrim v. B. & 
J. Insurance Agency, 190 Wis. 2d 525, 527 N.W.2d 320 (1995).  In 
Bindrim, this court determined that "the plain language of 
§ 632.32(6)(b)1., requires all policies to comply with its 
terms[.]"  Id. at 534 (emphasis in original); see also Clark, 
No. 
2004AP1358   
 
9 
 
218 Wis. 2d at 173 ("Wisconsin Stat. § 632.32 applies to all 
motor 
vehicle 
insurance 
policies 
issued 
or 
delivered 
in 
Wisconsin.").  As we stated in Bindrim, "[t]he terms of the 
Omnibus Coverage Statute are clear.  'No policy' may exclude a 
person related by blood or marriage to the insured.  Section 
632.32(6)(b)1., Stats.  No policy means no policy."  Bindrim, 
190 Wis. 2d at 534. 
¶18 For its part, the Peabody court determined that 
Bindrim did not apply because of a different factual scenario 
and also because liability coverage, not UIM coverage, was at 
issue.  Peabody, 220 Wis. 2d at 351-52.  The court did not 
address the differing positions on whether § 632.32(6)(b)1. 
applied to all types of coverage or just liability coverage.  
¶19 We agree with Vieau that § 632.32(6)(b)1. applies to 
indemnity coverage when issued as part of a policy containing 
liability insurance, contrary to the language of Peabody.  We 
base this conclusion on our decision in Bindrim and the language 
in Mau cited previously, which called into question the 
suggestion in Peabody that § 632.32(6)(b)1. applies only to 
liability policies.  Additionally, in our recent decision in 
Hall, we stated the Mau court "determined that it is appropriate 
to apply provisions of § 632.32 to underinsured motorist 
coverage, at least when that coverage is part of a liability 
policy." 
 
Hall, 
__ 
Wis. 2d __, 
¶21 
(citing 
Mau, 
248 
Wis. 2d 1031, ¶30 & n.13) (emphasis in original).   
¶20 We also stated in Hall that Mau "further suggested 
that any distinction between liability coverage and indemnity 
No. 
2004AP1358   
 
10 
 
coverage 
does 
not 
matter 
for 
purposes 
of 
§ 632.32 
when 
underinsured motorist coverage is issued as part of a policy 
containing liability insurance[.]"  Id., ¶22.  This language 
from Mau reads as follows:   
 
Liability 
coverage 
"requires 
the 
insurer 
to 
shield the insured from making payment on a claim for 
which the insured is liable."  Blazekovic v. City of 
Milwaukee, 2000 WI 41, ¶38, 234 Wis. 2d 587, 610 
N.W.2d 467.  "In contrast, uninsured motorist coverage 
[indemnity coverage] seeks to compensate the insured 
after the insured has sustained an actual loss."  Id.  
Similar to uninsured motorist coverage, underinsured 
motorist coverage is indemnity coverage. 
 
Here 
the 
distinction 
between 
liability 
and 
indemnity coverage does not change our conclusion as 
to the applicability of Wis. Stat. § 632.32.  The 
excess policy falls within the scope of § 632.32 
because it is a liability policy.  Mau was covered 
under the excess policy because he bought the IEP 
Option.  According to the rental jacket, "EP [Extended 
Protection] provides both LIS [Liability Insurance 
Supplement] and UM protection."  The excess policy, 
therefore, is a liability policy with uninsured and 
underinsured motorist coverage. 
Mau, 248 Wis. 2d 1031, ¶30 n.13.   
¶21 We conclude that under the reasoning and language of 
Bindrim and Mau, it is appropriate to apply § 632.32(6)(b)1. to 
Kathy Vieau's policy as she was issued UIM coverage as part of a 
policy containing liability insurance.  We further withdraw the 
language in Peabody, which states that § 632.32(6)(b)1. applies 
only to liability insurance, but we do not overrule the opinion 
in its entirety.  As described below, the reasoning of the 
remainder of Peabody is applicable to our ultimate holding. 
 
No. 
2004AP1358   
 
11 
 
IV 
¶22 We next turn to the question of whether American 
Family's 
"own-other-vehicle" 
definitional 
exclusion5 
is 
permissible under the statutes.  This court has set out a two-
step test for analyzing the validity of an exclusion.  See 
Blazekovic, 234 Wis. 2d 587, ¶¶12-13.  First, the court must 
determine whether § 632.32(6) prohibits the exclusion.  Id., 
¶13.  Second, the court must determine whether "any 'other 
applicable law'" prohibits the exclusion.  Id. (citation 
omitted).   
¶23 As such, if we were to focus solely on the language of 
§ 632.32(6)(b)1., Vieau would be entitled to UIM benefits under 
his mother's policy as this statute prohibits policies from 
excluding coverage to persons related by blood to the insured.6 
However, there is another step to the analysis inherent in the 
language of § 632.32(5)(e).  That is, "[a] policy may provide 
for exclusions not prohibited by sub. (6) or other applicable 
law.  Such exclusions are effective even if incidentally to 
their main purpose they exclude persons, uses or coverages that 
                                                 
5 We recognize the requirement that a relative not own 
another car is part of the definition of "relative" and is not 
framed as an outright exclusion.  However, we treat the 
definition the same as an exclusion.  See Mau v. N.D. Ins. 
Reserve Fund, 2001 WI 134, ¶32, 248 Wis. 2d 1031, 637 N.W.2d 45.   
6 Vieau does not contend that any other applicable law 
prohibits the exclusion in Kathy Vieau's policy, and therefore, 
the second step of the Blazekovic test is not pertinent to our 
analysis.    
No. 
2004AP1358   
 
12 
 
could 
not 
be 
directly 
excluded 
under 
sub. 
(6)(b)."  
Wis. Stat. § 632.32(5)(e).   
¶24 Vieau argues that excluding a person who owns a motor 
vehicle from the policy's definition of "relative" contravenes 
§ 632.32(6)(b)1., and cannot be saved by § 632.32(5)(e), because 
excluding Vieau from his mother's coverage is not "incidental" 
to the main purpose of the exclusion.  Vieau defines incidental 
based on a dictionary definition: "subordinate, nonessential, or 
attendant in position or significance . . . occurring merely by 
chance or without intention or calculation."  Webster's Third 
New International Dictionary 1142 (3d ed. 1986).  Using this 
definition, Vieau contends that it was the blatant purpose of 
American Family not to provide coverage to a blood relative 
living in the household, and the exclusion of Vieau as a 
relative did not happen "merely by chance or without intention 
or calculation." 
¶25 For its part, American Family takes the position that 
the omnibus statute does not prohibit a policy which excludes 
Vieau from coverage for reasons other than those enumerated in 
§ 632.32(6)(b)1.  American Family argues that Vieau is excluded 
from UIM coverage by virtue of his ownership of a motor vehicle, 
not because he is related by blood to the named insured, Kathy 
Vieau.   
¶26 Although there is merit to Vieau's position, we 
believe that when considering the facts and circumstances of 
this case, the nature of UIM insurance, the prior precedent, and 
public policy, American Family's position is stronger. 
No. 
2004AP1358   
 
13 
 
¶27 Underinsured 
motorist 
coverage 
in 
Wisconsin 
is 
optional and not mandatory.  See Pitts v. Revocable Trust of 
Knueppel, 2005 WI 95, ¶¶28-29, 282 Wis. 2d 550, 698 N.W.2d 761.  
"Under most UIM policies, 'UIM coverage is designed "to put the 
insured in the same position as he or she would have occupied 
had the tortfeasor's liability limits been the same as the 
underinsured motorist limits purchased by the insured."'"  Id., 
¶29 (citations omitted).  An insurer must offer UIM coverage to 
persons purchasing motor vehicle insurance policies, but it is 
left to the policyholder to determine the extent to which they 
want 
to 
protect 
themselves 
against 
inadequately 
insured 
tortfeasors, if at all.  See Wis. Stat. § 632.32(4m).   
¶28 In this case, Vieau has already collected the policy 
limits from Kaczrowski's liability insurance and the UIM limits 
from his own insurer.  It is unfortunate that Vieau did not 
purchase enough UIM coverage to fully cover his medical expenses 
under his own motor vehicle insurance policy, but it does not 
follow that he should be able to also tap into his mother's UIM 
coverage to make up the difference.  Under § 632.32(5)(e), we 
believe American Family's 
definitional 
exclusion 
is 
valid 
because it is properly focused on relatives who own their 
vehicles, with their own corresponding insurance, and who can 
consider for themselves how much UIM insurance to purchase to 
fully protect themselves from inadequately insured tortfeasors.  
In other words, although American Family's exclusion may not 
allow certain persons related by blood to share in the UIM 
No. 
2004AP1358   
 
14 
 
coverage of the policy, such an exclusion is incidental to its 
central purpose.  
¶29 For support of our interpretation of "incidental," we 
turn to its legal definition as defined by Black's Law 
Dictionary.  We note that we have previously looked to the legal 
definition of "incidental" when attempting to interpret when a 
negligent act is "incidental to" the operation of a gas station 
for purposes of deciding insurance coverage.  See Home Mut. Ins. 
Co. v. Ins. Co. of N. Am., 20 Wis. 2d 48, 121 N.W.2d 275 (1963).  
"Incidental" is defined as "[s]ubordinate to something of 
greater importance; having a minor role[.]"  Black's Law 
Dictionary 765 (7th ed. 1999).  When we consider the rationale 
and purpose behind American Family's exclusion, we conclude that 
American Family was first and foremost excluding Vieau by virtue 
of his ownership of another vehicle for the reasons alluded to 
above, and it was not excluding Vieau on the basis that he was 
related to Kathy Vieau.  That is, the main purpose of the 
exclusion is to prevent resident relatives who own their own 
vehicles from piggybacking on the uninsured motorist (UM) 
coverage and UIM coverage of a single insured.7 
                                                 
7 We 
recognize 
that 
our 
interpretation 
of 
the 
term 
"incidental" may lead some insurance companies to attempt to 
implement otherwise prohibited exclusions under § 632.32(6) 
under the guise of some other main purpose.  In future cases 
involving the validity of an exclusion under § 632.32(5)(e), 
courts should closely scrutinize the facts and circumstances of 
each case when determining whether "persons, uses, or coverages" 
are incidentally excluded under a legitimate and justifiable 
main purpose.  Wis. Stat. § 632.32(5)(e).   
No. 
2004AP1358   
 
15 
 
¶30 We next review the case law that has been analyzed 
when exclusions of blood relatives is "incidental" for purposes 
of § 632.32(5)(e).  In Bindrim, Susan Degano (Mrs. Degano) 
struck a motorcycle driven by Thomas Bindrim, while driving an 
automobile owned by a third party.  Bindrim, 190 Wis. 2d at 531.  
Colonial Insurance Company (Colonial) had issued an insurance 
policy to Mrs. Degano's husband, Giuliano Degano (Mr. Degano), 
which had two fatal flaws: (1) the policy tried to limit the 
coverage given to situations where Mr. Degano was driving a 
motor vehicle not owned by him; and (2) the policy attempted to 
restrict coverage to only Mr. Degano via an endorsement which 
read "insured person or insured persons are restricted to the 
individual named on the policy, you, while using the car. . . ."  
Id. at 533 (emphasis in original).  The court concluded that 
this 
provision 
directly 
contradicted 
§ 632.32(6)(b)1., 
and 
Colonial could not deny coverage to Mrs. Degano.  Id. 
¶31 Colonial argued that the exclusion of Mrs. Degano was 
permissible "because it is incidental to writing a policy the 
purpose of which is to meet the requirements of the Financial 
Responsibility Statutes."  Id. at 536.  We rejected that 
argument because there was no policy form that had to be 
followed to meet these requirements.  Id.  "Since the statutes 
do not provide for a particular type of coverage, it cannot be 
argued that the exclusion of Susan Degano was 'incidental' to 
meeting 
the 
requirements 
of 
the 
Financial 
Responsibility 
Statutes."  Id. at 537. 
No. 
2004AP1358   
 
16 
 
¶32 Unlike the direct exclusion of Mrs. Degano from her 
husband's policy, the exclusion of Vieau from his mother's 
policy is much more indirect.  The Colonial policy restricted 
coverage to the "individual named" on the policy and therefore 
expressly excluded all blood relatives.  The American Family 
policy in this case restricted coverage solely to those 
relatives who owned their own vehicle.  It does not expressly 
remove all relatives from coverage, and there is a rational 
basis for restricting coverage to such relatives. 
¶33 This case is also on point with State Farm Mutual 
Automobile 
Insurance 
Co. 
v. 
Kelly, 
132 
Wis. 2d 187, 
389 
N.W.2d 838 (Ct. App. 1986).  In that case, fifteen-year-old 
Joseph Kelly (Kelly) took, without permission, the keys of a car 
owned by Kelly's stepfather, Frank Guskey (Guskey), went for a 
drive, and collided with another automobile.  Id. at 188.  
Guskey's insurer, Home Mutual Insurance Company (Home Mutual), 
denied coverage to Kelly based on a definitional exclusion in 
the policy, which stated that "no person shall be considered an 
insured person if the person uses a vehicle without having 
sufficient reason to believe that the use is with permission."  
Id. at 192.  The injured party's insurer contended Home Mutual's 
policy was contrary to § 632.32(6)(b)1.  Id. at 189.  The court 
of appeals disagreed and concluded the policy's definitional 
exclusion was valid: 
As the trial court here properly noted, however, Home 
Mutual did not deny coverage because Guskey's stepson 
was driving, but because the stepson was driving 
without Guskey's permission.  The trial court, in 
No. 
2004AP1358   
 
17 
 
analyzing Home Mutual's policy, concluded that there 
was no "blanket exclusion" of family members; "rather 
there is coverage with a qualifier."  The "qualifier," 
clearly stated in the policy, is that no one will be 
considered an insured person unless he or she has 
permission to use the vehicle. 
Id. at 194-95.  Thus, even though the effect of Home Mutual's 
policy was to deny coverage to a relative of the insured, the 
court of appeals held that such an exclusion was permissible as 
the primary purpose of it was to deny coverage for relatives 
driving without permission.  We view American Family's policy in 
this case as also containing a permissible "qualifier" on the 
general definition of a relative. 
¶34 As alluded to above, the court of appeals utilized the 
analysis of Peabody in determining whether Vieau was properly 
excluded from coverage.  Vieau claims that it was improper to 
exclude him from the definition of "relative" because he owned 
his own vehicle, when ownership or use of the car was in no way 
related to the accident in which he was injured.  This fact, 
Vieau argues, distinguishes his case from Peabody, and the court 
of appeals incorrectly relied on the policy analysis in Peabody.   
¶35 Contrary to Vieau's contention, Peabody is essentially 
identical to the facts of this case.  Angela Peabody was injured 
as a passenger in a vehicle she did not own.  Peabody, 220 
Wis. 2d at 344.  At the time of the accident, Peabody owned her 
own vehicle, insured by a policy that did not include UIM 
coverage.  Id.  Peabody attempted to get UIM benefits under her 
father's insurance policy on his own vehicle.  Id. at 345.   
No. 
2004AP1358   
 
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¶36 Similar to Vieau's position, Peabody argued that 
"because she was injured in a third party's vehicle, it is 
irrelevant that she owned her own car and that she is therefore 
entitled to coverage."  Id. at 353.  The court of appeals was 
not persuaded by this argument and it instead applied the 
reasoning and holding of Schwochert v. American Family Mutual 
Insurance Co., 139 Wis. 2d 335, 407 N.W.2d 525 (1987), aff'd, 
172 Wis. 2d 628, 494 N.W.2d 201 (1993).  Although the following 
discussion of the Peabody court was not couched in terms of the 
relationship between §§ 632.32(5)(e) and (6)(b), we quote it at 
length because it aptly describes why American Family's "own-
other-car" exclusion is a legitimate incidental exclusion under 
§ 632.32(5)(e):   
We conclude that the facts of the case at hand 
are sufficiently similar to apply the reasoning and 
holding of the Schwochert court.  Although Peabody was 
not injured in her own car which did not include UIM 
coverage as the Schwocherts did, she nevertheless is 
seeking to tap the UIM benefits of her father's policy 
on a non-accident vehicle, which policy contained an 
exclusion of resident relatives who own their own cars 
from UIM benefits.  Peabody owned her own vehicle, 
insured it with an independent policy, and rejected 
UIM coverage.  We conclude that [Peabody's father's] 
UIM coverage does not apply to Peabody's injuries 
sustained in an underinsured vehicle, because the 
endorsement for UIM coverage was written on another 
vehicle and specifically excluded coverage for damages 
incurred by resident relatives who owned their own 
vehicles.  Furthermore, application of the exclusion 
comports 
with 
the 
public 
policy 
that 
resident 
relatives should obtain independent policies to guard 
against the situation where a single insurance policy 
covers multiple owners because of their resident 
relative status, and to protect insurance companies 
No. 
2004AP1358   
 
19 
 
from being held responsible for risks for which they 
did not contract or receive compensation. 
Peabody, 220 Wis. 2d at 353-54.  Likewise, we reject the fact 
Vieau was injured in a third party's vehicle as irrelevant to 
our holding.   
¶37 American Family also cites to Clark, 218 Wis. 2d 169, 
and Beerbohm, 235 Wis. 2d 182, for support of its argument that 
Vieau's position is untenable under our prior precedent.  In 
Clark, this court upheld the validity of an exclusion that 
barred coverage outside of the United States and Canada, even 
though the effect of the exclusion was to deny UM coverage to 
the insured's son.  In Beerbohm, the court of appeals upheld an 
exclusion for bodily injuries arising out of the use of a 
motorcycle, even though the effect of the exclusion was to deny 
liability coverage to the named insured. 
¶38 We do not find either of these opinions especially 
useful, as these opinions did not focus on the language of 
§ 632.32(6)(b)1. in the analysis.  In Clark, we looked solely at 
whether § 632.32(6) prohibited a territorial exclusion for UM 
coverage; we did not consider how such an exclusion implicated 
subparagraph (6)(b)1.  Similarly, in Beerbohm, the court of 
appeals looked to § 632.32(6) to determine if it prohibited 
policy provisions excluding motorcycle coverage.   
¶39 Indeed, 
most 
policies 
seemingly 
contravene 
§ 632.32(6)(b)1. by excluding blood relatives who live outside 
the household.  Section 632.32(6)(b)1., on its face does not 
allow for limiting coverage to relatives who live in the 
No. 
2004AP1358   
 
20 
 
household, 
but 
past 
precedent 
has 
placed 
this 
gloss 
on 
§ 632.32(6)(b)1. 
in 
the 
face 
of 
this 
subsection's 
broad 
requirement that "[n]o policy may exclude from the coverage 
afforded . . . [p]ersons related by blood[.]"  We believe such 
an absolutist view of § 632.32(6)(b)1. is contrary to the 
language of § 632.32(5)(e) and our past decisions, which have 
permissibly allowed restrictions to the coverage of relatives 
living in the household. 
¶40 Thus, 
we 
conclude 
that 
under 
the 
facts 
and 
circumstances 
of this 
case 
American 
Family's 
definitional 
exclusion, which denies Vieau the UIM coverage under his 
mother's policy, is permissible.  Were we to decide this case 
otherwise, a family of five with five vehicles could pay one 
premium on one policy with UIM coverage and potentially collect 
UIM proceeds five times.  We cannot support such a result.   
V 
¶41 In sum, we conclude that Wis. Stat. § 632.32(6)(b)1. 
applies to UIM coverage when issued as part of a policy 
containing liability insurance.  We further conclude that 
American Family's "own-other-car" definitional exclusion is 
valid under Wis. Stat. § 632.32(5)(e) as Vieau is excluded from 
coverage because he owns his own motor vehicle and not because 
he is related by blood to the named insured.  Therefore, we 
affirm the court of appeals. 
By the Court.—The decision of the court of appeals is 
affirmed.   
 
No. 
2004AP1358   
 
 
 
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