Title: Christina Pitts v. Revocable Trust of Dorothy Knueppel
Citation: 2005 WI 95
Docket Number: 2002AP003394
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: June 29, 2005

2005 WI 95 
 
 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2002AP3394 
COMPLETE TITLE: 
 
 
Christina Pitts and Clifford Pitts, Sr.,  
          Plaintiffs-Petitioners-Appellants, 
 
Wisconsin Physicians Service Insurance  
Corporation, a Wisconsin insurance  
corporation and Sentry Insurance, a  
mutual company,  
          Involuntary-Plaintiffs-Respondents, 
     v. 
Revocable Trust of Dorothy Knueppel,  
          Defendant. 
 
 
 
 
ON CERTIFICATION FROM THE COURT OF APPEALS 
 
 
OPINION FILED: 
June 29, 2005  
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
October 26, 2004  
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Milwaukee   
 
JUDGE: 
Thomas P. Donegan   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING: WILCOX, J., did not participate.   
 
 
 
ATTORNEYS: 
 
For the plaintiffs-petitioners-appellants there were briefs 
by Mark L. Thomsen, Charles David Schmidt and Cannon & Dunphy, 
S.C., Brookfield, and oral argument by Mark L. Thomsen. 
 
For the involuntary-plaintiffs-respondents, Sentry 
Insurance, a mutual company, there was a brief by Robert F. 
Johnson, Philip C. Reid, Colleen M. Fleming and Cook & Franke, 
S.C., Milwaukee, and oral argument by Philip C. Reid. 
 
 
 
 
2005 WI 95 
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2002AP3394   
(L.C. No. 
99 CV 5436) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Christina Pitts and Clifford Pitts, Sr.,  
 
          Plaintiffs-Petitioners- 
          Appellants, 
 
Wisconsin Physicians Service Insurance  
Corporation, a Wisconsin insurance  
corporation and Sentry Insurance, a  
mutual company,  
 
          Involuntary-Plaintiffs- 
          Respondents, 
 
     v. 
 
Revocable Trust of Dorothy Knueppel,  
 
          Defendant. 
 
FILED 
 
JUN 29, 2005 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
APPEAL from an Order of the Circuit Court for Milwaukee 
County, Thomas P. Donegan, Judge.  Reversed and cause remanded.   
 
¶1 
DAVID T. PROSSER, J.   This case is before the court 
on 
certification 
by 
the 
court 
of 
appeals, 
pursuant 
to 
Wis. Stat. § (Rule) 809.61 (2001-02).1  The issue presented is 
                                                 
1 All subsequent references to the Wisconsin Statutes are to 
the 2001-02 edition unless otherwise noted.   
No. 2002AP3394 
2 
 
whether an underinsured motorist (UIM) insurer has an obligation 
to consent to, or substitute its own funds for, a proposed 
settlement between its insured and the tortfeasor, where the 
tortfeasor's insurer has already settled for its policy limit 
and the tortfeasor is offering an additional settlement payment 
in exchange for a full release.   
¶2 
This court has already held that a UIM insurer has an 
obligation grounded in equity to consent to a settlement or 
substitute when the settlement offer to its insured emanates 
from the tortfeasor's insurance company and fully releases both 
the tortfeasor and the tortfeasor's insurer.  Vogt v. Schroeder, 
129 Wis. 2d 3, 383 N.W.2d 876 (1986).  In this case the UIM 
insurer (also referred to as the "underinsurer") faces an 
additional level of risk, considering both the uncertainty of 
the insured's ultimate damages and the uncertainty of the 
tortfeasor's non-insurance assets.  Nevertheless, we conclude 
that most of the factors that led to our determination in Vogt 
are also present here.  Consequently, we hold that the Vogt 
"consent-or-substitute" regimen applies where the insured is 
willing to accept the tortfeasor's settlement offer.  
I. FACTS AND PROCEDURAL HISTORY 
¶3 
The basic facts are undisputed.  Christina and 
Clifford Pitts (Pittses) purchased an automobile insurance 
policy from Sentry Insurance (Sentry) effective September 29, 
1996.  The policy provided 
for 
$250,000 
per 
person in 
underinsured motorist (UIM) coverage, with a standard reducing 
clause. 
No. 2002AP3394 
3 
 
¶4 
On December 30, 1996, Christina Pitts (Pitts) was 
injured in an automobile accident allegedly caused by Dorothy 
Knueppel (Knueppel).  Knueppel had purchased an automobile 
insurance policy from American Family Mutual Insurance Company 
(American Family), with $100,000 in liability coverage.  
¶5 
On July 7, 1999, the Pittses commenced a lawsuit 
against Knueppel and her liability insurer, American Family, 
claiming damages from the automobile accident.  The complaint 
did not allege a specific amount of damages; it asked for 
compensatory damages and costs to be determined by a jury. 
¶6 
On September 26, 2000, Knueppel died.  The Revocable 
Trust of Dorothy Knueppel (Trust) was substituted for Knueppel 
in the lawsuit. 
¶7 
On January 3, 2001, shortly before a scheduled trial, 
American Family tendered its $100,000 policy limits to the 
Pittses; and the Pittses' attorney, Mark Thomsen, notified 
Sentry of American Family's tender that same day.  Thereafter, 
to preserve its subrogation rights, Sentry substituted $100,000 
of its own funds in place of American Family's tender.  On May 
No. 2002AP3394 
4 
 
30, 2001, American Family deposited $100,000 into the circuit 
court and was dismissed from the case.2  
¶8 
Also on May 30, Sentry intervened in the case as a 
defendant against the Pittses.  Later, on November 12, 2001, it 
moved for a declaratory judgment, asserting that the Pittses had 
made a claim under the UIM provision of the Sentry Policy and 
that this claim should be adjudicated to determine how much, if 
any, UIM coverage Sentry would owe.  The Pittses opposed 
Sentry's motion, and Sentry was dismissed from the case without 
prejudice. 
                                                 
2 In this case, American Family's tender of policy limits 
was purportedly exchanged for a "full release of American Family 
and its insured."  If it actually was a full release, the 
Pittses could not have proceeded further against the Trust.  Yet 
it is clear that the parties treated the release as a full 
release of American Family, but only a partial release of its 
insured, Knueppel, to the extent of the policy limits.  Several 
factors compel us to this conclusion.  The same attorney, Janet 
Cain, represented both American Family and Knueppel.  After the 
tender of policy limits, Attorney Cain moved the court to 
dismiss the case only as to American Family, with Knueppel 
remaining in the case.  American Family went to some lengths to 
illustrate that it had no further duty to defend Knueppel after 
tendering its policy limit.  In her brief supporting the motion 
for dismissal, Attorney Cain cited Novak v. American Family 
Mutual Insurance Co., 183 Wis. 2d 133, 515 N.W.2d 504 (Ct. App. 
1994).  In Novak, American Family tendered its policy limits in 
exchange for its own dismissal and a partial release of the 
tortfeasor, Novak.  183 Wis. 2d at 135.  The plaintiff's case 
against the tortfeasor continued.  Id.  In this case, Attorney 
Cain continued to represent the Trust and did not move for the 
Trust's dismissal.  When the Pittses filed an amended complaint, 
Attorney Cain filed an answer on behalf of the Trust and did not 
raise the settlement as a defense.  Neither did Sentry raise the 
settlement as an objection to the Pittses' continued lawsuit 
against the Trust; rather, it unsuccessfully attempted to 
intervene in that lawsuit.  Accordingly, the Pittses were free 
to continue to pursue the litigation against Knueppel.   
No. 2002AP3394 
5 
 
¶9 
Sentry's dismissal came on June 17, 2002.  Two days 
later, on June 19, the Pittses and the Trust reached a proposed 
settlement agreement in which the Trust would pay the Pittses 
$40,000 in return for a release on the Pittses' claims against 
the Trust.  As required by the Sentry policy and by case law, 
the Pittses' attorney notified Sentry of the settlement offer 
and requested that Sentry decide whether to consent (and thereby 
lose its subrogation rights) or substitute its own funds (to 
preserve its subrogation rights).  Sentry objected, claiming 
that it was not required to consent or substitute under its 
policy or under existing case law.  It contended that it had 
already paid the Pittses $100,000 to preserve its subrogation 
rights against the Trust. 
¶10 Unable to reach an agreement, the Pittses brought 
Sentry back into the lawsuit as an involuntary plaintiff.  On 
October 9, 2002, the Pittses filed a motion for declaratory 
judgment asking the court to order Sentry to consent to the 
settlement or substitute.  The Pittses also sought the award of 
attorney fees pursuant to Wis. Stat. § 806.04 and interest on 
the settlement amount pursuant to Wis. Stat. § 628.46.  
¶11 On December 12, 2002, the circuit court for Milwaukee 
County, Thomas P. Donegan, Judge, denied the motion, leading to 
this appeal. 
¶12 The issue again is whether an underinsured motorist 
(UIM) insurer [Sentry] has an obligation to consent to, or 
substitute its funds for, a proposed settlement between its 
insured [the Pittses] and the tortfeasor [the Trust], where the 
No. 2002AP3394 
6 
 
tortfeasor's insurer [American Family] has already settled for 
its policy limit [$100,000] and the tortfeasor is offering an 
additional settlement payment [$40,000] in exchange for a full 
release.   
II. THE SENTRY INSURANCE POLICY 
¶13 Several provisions of the Sentry policy are important, 
and we set them out in detail with commentary.   
¶14 First, the Declarations page shows that the Pittses 
purchased "Underinsured Motorist Bodily Injury" coverage of 
$250,000 per person and $500,000 per accident.  
¶15 Under this specific coverage, the insurer never pays 
the full $250,000 for a single-person accident because the 
underinsured tortfeasor, by definition, has some insurance and 
the policy contains a reducing clause.  If the tortfeasor had no 
insurance, the tortfeasor would be "uninsured" rather than 
"underinsured."  Every dollar obtained from the tortfeasor 
reduces the potential liability of the UIM insurer.   
¶16 Second, the policy provides a broad grant of UIM 
coverage: 
Our Promise To You 
We promise to pay damages, excluding punitive or 
exemplary damages, the owner or operator of an 
underinsured motor vehicle is legally obligated to pay 
because 
of 
bodily 
injury 
you 
suffer 
in 
a 
car 
accident . . . as a result of having been struck by an 
underinsured motor vehicle. 
¶17 Third, 
the 
policy 
defines 
"Underinsured 
Motor 
Vehicle": 
No. 2002AP3394 
7 
 
An underinsured motor vehicle is a motor vehicle with 
liability protection afforded by liability insurance 
policies or bodily injury liability bonds with limits 
the sum of which are less than the limits you have 
selected for underinsured motorist coverage as shown 
on the declarations page.  An underinsured motor 
vehicle does not include an uninsured motor vehicle. 
¶18 On the facts at hand, Knueppel was the operator of an 
"underinsured motor vehicle" because her vehicle had "liability 
protection afforded by liability insurance policies . . . with 
limits [$100,000] the sum of which are less than the limits 
[$250,000] you have selected."  Until there is a judgment or 
settlement, a tortfeasor is not "legally obligated to pay" 
damages.  But the insurer (or underinsurer) has an obligation to 
deal with the insured in good faith at all times.  Danner v. 
Auto-Owners 
Ins., 
2001 
WI 
90, 
¶57, 
245 
Wis. 2d 49, 
629 
N.W.2d 159.   
¶19 Fourth, the reducing clause is found under the heading 
"Payment of Damages."  It provides: 
 . . . The 
amount of 
damages 
payable 
under 
this 
insurance [$250,000] will be the limit of liability 
reduced by the amount paid by or on behalf of anyone 
responsible for your injury [i.e., the Trust and 
American Family]. 
¶20 With this reducing clause in place, an insured who 
purchases $250,000 of underinsured motorist coverage is taking 
the risk that he or she will not suffer injuries of more than 
$250,000.  If the insured suffers injuries of, say, $500,000, 
the only chance of being made whole is to be injured by one or 
more tortfeasors with liability insurance or other available 
assets equaling the $500,000 in damages.  If a tortfeasor has 
No. 2002AP3394 
8 
 
insurance coverage of $250,000 or more, the insured's UIM policy 
will pay nothing.   
¶21 Fifth, also under the heading "Payment of Damages" is 
a provision partly responding to the Vogt decision:   
No damages will be payable under this insurance, as a 
result of a car accident with an underinsured motor 
vehicle until: 
a. The sum of the limits of liability of available 
liability 
insurance 
policies 
or 
bodily 
injury 
liability bonds applicable to the underinsured motor 
vehicle have been exhausted by payment of judgments or 
settlements; or 
b. A tentative settlement has been made between you 
and the insurer of the underinsured motor vehicle 
which would exhaust the limits of liability under any 
applicable bodily injury liability bonds or policies 
and we have prompt written notice of such tentative 
settlement and advance payment to you in an amount 
equal to the tentative settlement within 30 days after 
receipt of notification.   
Paragraph (a) operates in tandem with the reducing clause.  No 
damages will be paid to the insured under UIM coverage until the 
tortfeasor's limits of liability insurance have been exhausted.  
Paragraph (b) contemplates the substitution feature of the Vogt 
decision, in which the insured reaches a settlement with the 
tortfeasor's insurer.  It requires the insured to provide prompt 
written notice to the underinsurer and a substitution decision 
from the underinsurer within 30 days.  Paragraph (b) does not 
address the specific situation here in which the insured reaches 
a settlement with the tortfeasor. 
¶22 Sixth, the policy contains a "Trust Agreement" which 
provides: 
No. 2002AP3394 
9 
 
When we pay damages under this insurance, you or your 
legal representative must agree in writing to repay us 
out of any damages recovered from anyone responsible 
for your injuries.  You or your legal representative 
must also agree in writing to hold in trust and 
preserve for us all rights of recovery. 
At our request, you or your legal representative must 
take any necessary action to recover the payments 
we've 
made 
under 
this 
insurance 
through 
a 
representative we select.  Expenses of recovery will 
be repaid to us out of any damages recovered. 
The "Trust Agreement" firms up the insurer's subrogation rights. 
¶23 Seventh, the policy contains provisions addressing 
"notice" and "consent": 
Bodily Injury Not Covered By This Insurance 
This insurance doesn't cover bodily injury if, without 
our written consent, settlement is made or judgment is 
taken against anyone responsible for your injury. 
. . . .  
Additional Duties 
Any person seeking underinsured motorist coverage must 
also promptly notify us in writing of a tentative 
settlement 
between 
you 
and 
the 
insurer 
of 
the 
underinsured motor vehicle and allow us 30 days to 
advance payment to you in an amount equal to the 
tentative settlement to preserve our rights against 
the insurer, owner or operator of such underinsured 
motor vehicle. 
¶24 These provisions require the insured [Pittses] to give 
the insurer [Sentry] notice of any proposed settlements and to 
obtain the insurer's [Sentry's] consent prior to accepting 
settlement offers. 
¶25 Eighth, the policy contains a subrogation clause: 
Our Right To Recover From Others 
No. 2002AP3394 
10 
 
After we have made payment under the Liability, 
Medical Expense, Uninsured Motorist, Comprehensive, 
Collision, 
Road 
Service 
or 
Rental 
Reimbursement 
insurance of this policy, we have the right to recover 
the payment from anyone who may be held responsible.  
You and anyone we protect must do whatever is 
necessary to enable us to exercise our right.  You and 
anyone we protect will do nothing to prejudice our 
rights. 
. . . .  
Our rights do not apply with respect to Underinsured 
Motorist Coverage if we have been given prompt written 
notice of a tentative settlement between you and the 
insurer of an underinsured motor vehicle and we fail 
to advance payment to you in an amount equal to the 
tentative settlement within 30 days after receipt of 
notification. 
If we advance payment to you in an amount equal to the 
tentative settlement within 30 days after receipt of 
notification that payment will be separate from any 
amount 
you 
are 
entitled 
to 
recover 
under 
the 
provisions of Underinsured Motorist Coverage and we 
also have the right to recover the advance payment. 
These provisions also reflect the Vogt decision, particularly 
the insurer's consent feature. 
¶26 Ninth, the policy requires the insured to undergo 
medical 
examinations 
and 
release 
medical 
records 
at 
the 
insurer's request: 
If you're injured, we may ask that you be examined by 
a doctor we select.  You must be examined when and as 
often as we may reasonably require.  We may need 
authorization to obtain medical records and copies of 
other records.  You must give us authorization upon 
each request. 
. . . .  
You 
must 
cooperate 
with 
us 
in 
our 
effort 
to 
investigate the accident or loss, settle any claims 
against you and defend you. . . .  If you fail to 
No. 2002AP3394 
11 
 
cooperate . . . we may have the right to refuse you 
any further protection for the accident or loss. 
III. ANALYSIS 
A. 
Standard of Review 
¶27 We must determine the respective rights of an insured 
and insurer under a UIM provision in an automobile insurance 
contract 
when 
the 
insured 
has 
reached 
agreement 
with 
a 
tortfeasor on a proposed settlement.  This is a question of law 
that we determine without deference to the circuit court.  Hull 
v. Heritage Mut. Ins. Co., 203 Wis. 2d 547, 551, 553 N.W.2d 295 
(Ct. App. 1996) (citing Schulte v. Frazin, 176 Wis. 2d 622, 628, 
500 N.W.2d 305 (1993)). 
B. 
Overview of UIM Coverage 
¶28 Underinsured motorist coverage is intended to protect 
motorists against inadequately insured tortfeasors.  3 Widiss, 
Uninsured and Underinsured Motorist Insurance, § 31.4, at 5 (2d 
ed. 2001) 
(hereinafter 
Widiss, Uninsured and 
Underinsured 
Motorist 
Insurance). 
 
Typically, 
it 
applies 
when 
the 
tortfeasor's 
policy 
has 
lower 
liability 
limits 
than 
the 
insured's UIM coverage.  Anderson, Wisconsin Insurance Law, 
§ 4.1, at 4-4 (4th ed. 1998) (hereinafter Anderson, Wisconsin 
Insurance Law).3  In Wisconsin, UIM coverage is optional, not 
mandatory.  Id. 
                                                 
3 In theory, underinsured motorist coverage could consist of 
coverage in a set amount "above and beyond the liability limits 
of the at-fault driver."  Taylor v. Greatway Ins. Co., 2001 WI 
93, 
¶35, 
245 
Wis. 2d 134, 
628 
N.W.2d 916 
(Bradley, 
J., 
dissenting).  Policies embodying this type of coverage appear to 
be atypical. 
No. 2002AP3394 
12 
 
¶29 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.'"  
State Farm Mut. Auto. Ins. Co. v. Langridge, 2004 WI 113, ¶17, 
275 Wis. 2d 35, 683 N.W.2d 75 (quoting Badger Mut. Ins. Co. v. 
Schmitz, 2002 WI 98, ¶17, 255 Wis. 2d 61, 647 N.W.2d 223).  This 
type 
of 
policy 
has 
been 
authorized 
by 
the 
legislature, 
Wis. Stat. § 632.32(5)(i), and upheld by this court.  Dowhower 
v. W. Bend Mut. Ins. Co., 2000 WI 73, ¶33, 236 Wis. 2d 113, 613 
N.W.2d 557; Taylor v. Greatway Ins. Co., 2001 WI 93, ¶24, 245 
Wis. 2d 134, 628 N.W.2d 916.   
¶30 The Sentry policy clearly incorporates this approach.  
Therefore, in this case the Pittses could recover a maximum of 
$150,000 from Sentry under the UIM provisions of the policy 
because the Sentry policy's $250,000 limit is reduced by 
Knueppel's American Family policy limit of $100,000. 
¶31 Sentry has never maintained that Pitts contributed to 
the cause of the accident.  The Trust continues to deny 
Knueppel's negligence, but it did offer $40,000 above the 
$100,000 from American Family to settle the case.  If Sentry had 
consented to the settlement between the Pittses and the Trust, 
it would have reduced its potential liability under the policy 
to $110,000.  Sentry did not consent to the proposed settlement.  
Instead, it attempted to intervene as a defendant in the action 
between the Pittses and the Trust, seeking a "once-and-for-all" 
adjudication of the Pittses' damages that would be binding on 
No. 2002AP3394 
13 
 
the Pittses, Sentry, and the Trust.  The Pittses opposed such a 
determination, believing that Vogt gives Sentry, the UIM 
insurer, only two options: to consent to the settlement or to 
substitute its own funds.  We must now determine which of these 
competing interpretations is correct.   
C. 
Vogt v. Schroeder 
 
¶32 The starting point for any such analysis must be our 
decision in Vogt.  In Vogt, the injured party had been a 
passenger in a vehicle driven by his son during a collision with 
the defendant Schroeder's vehicle.  Vogt, 129 Wis. 2d at 7.  The 
court noted that the parties implicitly concluded that Schroeder 
was "primarily, perhaps wholly, liable, because it is conceded, 
for this appeal at least, that his vehicle invaded the lane of 
the Vogt vehicle when the collision occurred."  Id.  In effect, 
the same assumption is made here.  Although it has not been 
determined that Knueppel's negligence caused the accident, we 
assume for the purposes of this appeal that the Pittses have the 
right to attempt to draw on the Sentry UIM coverage to make up 
the difference between the damages available from the tortfeasor 
and the Sentry policy limits.4 
 
¶33 In Vogt, Schroeder's insurance policy had a limit of 
only $15,000, and, although nothing in the record explicitly 
showed that Vogt's damages exceeded that amount, the parties 
                                                 
4 The Sentry policy provides that the UIM provisions cover 
only damages "the owner or operator of an underinsured motor 
vehicle is legally obligated to pay because of bodily injury you 
suffer . . . as 
a 
result 
of 
having 
been 
struck 
by 
an 
underinsured motor vehicle."  See ¶16, supra. 
No. 2002AP3394 
14 
 
conceded for purposes of the appeal that the damages did exceed 
$15,000.  Id.  Schroeder's insurer offered to pay its policy 
limit in exchange for a release of its insured.  Id. at 8.  Vogt 
wanted to accept the proffered $15,000 and then pursue a UIM 
claim under his own auto insurance policy with Wisconsin 
Employers Casualty Company (WECC), which contained $50,000 in 
underinsured motorist coverage.  Id.  WECC hesitated to consent 
to the settlement because it felt that its right to subrogation 
against the tortfeasor could be impaired by such consent.5  Id.  
At its core, the Vogt decision was about subrogation rights. 
 
¶34 "[S]ubrogation is an equitable doctrine and depends 
upon a just resolution of a dispute under a particular set of 
facts."  Id. at 12 (citing 6A Appleman, Insurance Law and 
Practice, 
§ 4051 
at 
110). 
 
Generally, 
the 
doctrine 
of 
subrogation "rests upon the equitable principle that one, other 
                                                 
5 The WECC policy at issue in Vogt v. Schroeder contained 
the following settlement provision:  
In the event of any payment under this policy, we 
are entitled to all the rights of recovery of the 
person to whom payment was made against another.  That 
person must sign and deliver to us any legal papers 
relating to that recovery, do whatever else is 
necessary to help us exercise those rights and do 
nothing after loss to prejudice our rights.   
When a person has been paid damages by us under 
this policy and also recovers from another, the amount 
recovered from the other shall be held by that person 
in trust for us and reimbursed to us to the extent of 
our payment. 
Vogt v. Schroeder, 129 Wis. 2d 3, 9, 383 N.W.2d 876 (1986). 
No. 2002AP3394 
15 
 
than a volunteer, who pays for the wrong of another should be 
permitted to look to the wrongdoer to the extent he has paid and 
be subject to the defenses of the wrongdoer."  Garrity v. Rural 
Mut. Ins. Co., 77 Wis. 2d 537, 541, 253 N.W.2d 512 (1977).  The 
doctrine is often invoked after an insurer has compensated its 
own insured for an accident its insured did not cause.  See, 
e.g., Rimes v. State Farm Mut. Auto. Ins. Co., 106 Wis. 2d 263, 
271-72, 
316 
N.W.2d 
348 
(1982).  
The 
insurer, 
in 
some 
circumstances, steps into the shoes of its insured and may 
prosecute the tortfeasor to recoup the benefits it paid to its 
insured. 
 
Patients 
Comp. 
Fund 
v. 
Lutheran 
Hosp., 
223 
Wis. 2d 439, 
451, 
588 
N.W.2d 35 
(1999) 
(citing 
Anderson, 
Wisconsin Insurance Law, § 12.3, at 12-18). 
¶35 In the Vogt case, Schroeder's insurer argued that a 
UIM insurer or underinsurer never has a right to subrogation.  
Vogt, 129 Wis. 2d at 11.  The Vogt court answered this open 
question by confirming that an underinsurer does have a right to 
subrogation as long as it substitutes its funds for those 
proferred by the tortfeasor's insurer.  Id. at 17-19.  However, 
if the underinsurer chooses simply to consent to the settlement, 
it forfeits its right to subrogation.  Id. at 20-21. 
 
¶36 The Vogt court cited two major factors it believed 
supported this outcome.  First, in the underinsurance context, 
"the balancing of equities is not between the insurer and its 
own insured but between the underinsurer and the tortfeasor."  
Id. at 17.  This balance weighs in favor of the underinsurer's 
subrogation right.   
No. 2002AP3394 
16 
 
 
¶37 Second, the court recognized that a motorist who 
carries UIM coverage should not be left in a worse position when 
she is injured by an underinsured motorist than if she has been 
injured by a fully insured motorist.  Id. at 17-18.  The court 
noted: 
Such motorist ought to be able to "settle" with the 
tortfeasor's insurance company to the extent of that 
tortfeasor's coverage.  The motorist should not be 
required to sue for what is being offered and thus 
incur larger fees and expenses just to accommodate the 
underinsurance 
company's 
desire 
to 
protect 
its 
subrogation rights.  At least the motorist should not 
be obligated to do so if it is possible, under the 
terms of the contract and in justice, for the injured 
party to receive the settlement proceeds, or its 
equivalent, and the underinsurer is still able to 
protect its subrogation rights. 
Id. at 18. 
 
¶38 Having determined that the underinsurer potentially 
had subrogation rights, the Vogt court had to emplace a method 
to allow the underinsurer to intervene in the settlement 
process.  It adopted a procedure approved by the Minnesota 
Supreme Court in Schmidt v. Clothier, 338 N.W.2d 256 (Minn. 
1983).  Vogt, 129 Wis. 2d at 20-21.  In Schmidt, the Minnesota 
court held that the underinsurer was entitled to notice of a 
potential settlement and a period of time in which to assess the 
case.  Vogt, 129 Wis. 2d at 20 (citing Schmidt, 338 N.W.2d at 
263).  The Minnesota court explained its holding:   
In 
that 
time 
[the 
underinsurer] 
could 
evaluate 
relevant 
factors, 
such 
as 
the 
amount 
of 
the 
settlement, 
the 
amount 
of 
liability 
insurance 
remaining, if any, the amount of assets held by the 
tortfeasor and the likelihood of their recovery via 
No. 2002AP3394 
17 
 
subrogation, 
the 
total 
amount 
of 
the 
insured's 
damages, and the expenses and risks of litigating the 
insured's cause of action.  If the underinsurer were 
to 
determine 
after 
assessment 
that 
recovery 
of 
underinsurance benefits it paid was unlikely (e.g., 
where the liability limits are exhausted or nearly so 
and the tortfeasor is judgment-proof), it could simply 
let 
the 
"grace 
period" 
expire 
and 
permit 
the 
settlement 
and 
release. 
 
It 
must, 
of 
course, 
thereafter process the underinsurance claim but would 
not 
be 
able 
to 
recover 
those 
payments 
through 
subrogation.   
If, on the other hand, damages were substantially 
more than the liability limits and the tortfeasor had 
substantial assets, the underinsurer could substitute 
its payment to the insured in an amount equal to the 
tentative 
settlement. 
 
In 
this 
situation, 
the 
underinsurer's payment would protect its subrogation 
rights to the extent of the payment, and the insured 
would receive the amount of the settlement offer in 
cash.  The underinsurer would then have to arbitrate 
the underinsured claim and could, thereafter, attempt 
to negotiate a better settlement or could proceed to 
trial in the insured's name. 
Id. at 20-21 (quoting Schmidt, 338 N.W.2d at 263) (internal 
citation omitted). 
¶39 The quoted passage notes that the underinsurer might 
consider whether the tortfeasor is judgment-proof.  This implies 
at a minimum that if the underinsurer substitutes its own funds, 
it has the right to sue all parties released by the proposed 
settlement.  In Vogt, this was both the tortfeasor and the 
tortfeasor's insurer.   
 
¶40 The Vogt court reasoned that the underinsurer could 
protect its right to subrogation, but it could not "thwart the 
right of its own insured to receive some payment, either the 
amount of the insured's underinsurance claim or the amount 
No. 2002AP3394 
18 
 
offered in settlement."  Id. at 21.  The court thus struck an 
equitable balance between the right of the insurance company to 
protect its subrogation interest and the right of the insured to 
be timely compensated.   
D. 
The Risks of Underinsurance 
 
¶41 An underinsurer is placed in a somewhat awkward 
position upon receiving notice of a settlement like the Pittses' 
or Vogt's.  As we recently recognized, an underinsurer owes a 
duty of "good faith and fair dealing" to its insured.  Danner, 
245 Wis. 2d 49, ¶57.  At the same time, the underinsurer has an 
incentive to minimize its insured's damages while it is 
negotiating with its insured, thus minimizing its own liability 
under the policy.  However, should it decide to substitute its 
own funds for those proferred by a tortfeasor's insurer, it must 
execute a 180-degree turn in the follow-up action against the 
tortfeasor, attempting to maximize its insured's damages to 
obtain the largest possible settlement or judgment.   
¶42 This stylized dance between the underinsurer and its 
insured necessarily involves some degree of uncertainty because 
much of the dance occurs before the insured formally makes a UIM 
claim under the policy.  The underinsurer must calculate the 
value of the damages it believes its insured has suffered.  
Having arrived at this estimate, if the underinsurer believes 
the proposed settlement with the tortfeasor is too low, it 
should substitute its own funds and pursue the tortfeasor and 
the tortfeasor's insurer in a subrogation action, assuming the 
tortfeasor has additional assets.  On the other hand, if the 
No. 2002AP3394 
19 
 
underinsurer believes the settlement is adequate to cover the 
insured's damages, it should consent to the settlement with 
confidence that the insured will not be able to recover 
additional damages in a subsequent UIM claim.  The decision 
whether to consent should not turn on the source of the 
settlement funds, but rather on the adequacy of the funds. 
¶43 In this case, court documents show that the Pittses 
alleged that Christina Pitts had suffered "permanent injuries, 
disability, and specials totaling $403,904.70" in damages.  
Sentry characterizes claims of this magnitude as "questionable."  
It notes that Pitts had an extensive medical history including 
involvement in five prior automobile accidents of varying 
severity. 
¶44 Under the policy, the Pittses have a contractual duty 
to cooperate with Sentry during the claim investigation process.6  
                                                 
6 The policy provides:   
If you're injured, we may ask that you be examined by 
a doctor we select.  You must be examined when and as 
often as we may reasonably require.  We may need 
authorization to obtain medical records and copies of 
other records.  You must give us authorization upon 
each request. 
. . . .  
You 
must 
cooperate 
with 
us 
in 
our 
effort 
to 
investigate the accident or loss, settle any claims 
against you and defend you. . . .  If you fail to 
cooperate . . . we may have the right to refuse you 
any further protection for the accident or loss. 
See supra, ¶26. 
No. 2002AP3394 
20 
 
In satisfaction of that duty, the Pittses claimed that they sent 
Sentry "over 1000 pages" of documentation regarding Pitts's 
injuries.  The record includes a summary transmittal form 
listing several medical reports the Pittses sent, but does not 
contain the actual reports.  Sentry claims that despite its 
"endeavor[s] to do discovery into the claimed damages[, the 
Pittses] never complied with the requests."  The record reveals 
that on August 20, 2001, while still a defendant, Sentry sent 
the Pittses an extensive set of interrogatories.  Sentry also 
included a request for production of documents containing over 
20 separate requests for Pitts to release access to her medical 
records held by various health care providers.  The record does 
not reflect how the Pittses responded, but in a motion filed 
February 28, 2002, Sentry's counsel asserted:  
Plaintiff would have the court believe that she has 
provided Sentry with all documents that Sentry needs 
to fully evaluate the case.  That is not true.  
Plaintiff did not provide Sentry with two examiner 
reports . . .  These reports make it abundantly clear 
that plaintiff's alleged damage claim is not what she 
says it is. 
 
¶45 The issue of whether the Pittses breached their 
contractual duty to cooperate with Sentry is not before us.  
However, it must be emphasized that the insured is bound by the 
terms of the insurance contract.  If contractually obligated, 
the insured must provide the documentation required by the 
contract to allow the underinsurer to make an informed decision 
on whether to consent or substitute.   
No. 2002AP3394 
21 
 
 
¶46 Effectively, the underinsurer must answer the same 
question of ultimate damages, whether a settlement offer comes 
from the tortfeasor's insurer or whether it comes from the 
tortfeasor herself.  In both cases, the underinsurer must 
evaluate the tortfeasor's personal assets.  If the settlement 
offer fully releases both the tortfeasor and the tortfeasor's 
insurer but the settlement funds emanate solely from the 
tortfeasor's insurer, the underinsurer's substitution of its own 
funds allows it to sue not only the tortfeasor's insurer but 
also the tortfeasor.  Any other result would not make sense.  
What 
underinsurer 
would 
substitute 
its 
funds 
against 
a 
tortfeasor's 
insurer's 
tendered 
policy 
limits 
if 
the 
underinsurer 
could 
proceed 
only 
against 
the 
tortfeasor's 
insurer?  There would be no point to such an action, because the 
maximum the underinsurer could recover would be the same amount 
that was already tendered.  The underinsurer's recovery would be 
further reduced by its costs in prosecuting the action.  What 
makes substitution an attractive option is the possibility that 
the tortfeasor has substantial wealth or assets, and that the 
underinsurer will be able to negotiate a better settlement than 
its insured because of the greater resources at its disposal.  
In that scenario, both the insured and the underinsurer are 
benefited.  The insured receives a prompt settlement payment and 
the underinsurer may secure more from the tortfeasor, thereby 
eliminating or reducing its liability. 
¶47 In 
this 
case, 
Sentry 
attempted 
to 
remove 
all 
uncertainty by intervening in the case between the Pittses and 
No. 2002AP3394 
22 
 
the Trust.  Sentry asked the circuit court to adjudicate the 
Pittses' damages so that all three parties——Sentry, the Pittses, 
and the Trust——would have a rock-solid number from which to 
negotiate.  This position is defensible because it would, to 
some degree, eliminate duplicitous litigation.  Once their 
damages had been determined, the Pittses would be free to settle 
with the Trust.  At that point, it would be obvious to Sentry 
whether a settlement was adequate, and the decision whether to 
consent to a settlement would also be relatively simple.  
Further, any future litigation between the Pittses and Sentry 
would be simplified.  Sentry could start with the arrived-upon 
damage amount, subtract the amount recovered from the Trust and 
American Family, and pay the remaining amount to the Pittses 
(assuming that amount came within the policy limits). 
¶48 This court could have adopted such an approach in 
Vogt.  It did not.  Even Sentry's trial counsel admitted that 
its request and accompanying approach was "novel," but felt that 
it had "no choice but to ask [the circuit] court to order that 
the plaintiff continue with her UIM claim against Sentry so the 
matter can be litigated and eventually resolved."7  While 
                                                 
7 Under some circumstances, this court has recognized that 
an insurer does have the right to force litigation against its 
own insured.  See, e.g., Reid v. Benz, 2001 WI 106, ¶16, 245 
Wis. 2d 658, 629 N.W.2d 262 (citing Elliott v. Donahue, 169 
Wis. 2d 310, 317-18, 485 N.W.2d 403 (1992)).  But in those 
cases, the question was whether the insured has coverage, not 
the amount of coverage implicated.  Id.  In this case, the 
circuit court dismissed Sentry as a defendant because at the 
time, Pitts had asserted no claim against Sentry, nor was Sentry 
obligated to defend Pitts in any claim. 
No. 2002AP3394 
23 
 
Sentry's approach is understandably preferable to Sentry, it is 
not preferable to the Pittses.  Sentry's approach might 
eliminate future litigation between the Pittses and Sentry, but 
it would also have the effect of creating unnecessary litigation 
between the Pittses and the Trust.  Those two parties have 
already reached what they believe to be an equitable settlement.  
If Sentry were to accept that proposed settlement, it is 
possible that the entire matter could be settled without 
litigation.  Instead of adopting Sentry's admittedly "novel" 
approach, we choose to continue to rely on the principles in 
Vogt. 
E. 
Applicability of Vogt v. Schroeder  
¶49 We believe that the factors relied on in Schmidt and 
Vogt are equally applicable to the situation here, where the 
settlement is not with the tortfeasor's insurer, but rather with 
the tortfeasor herself.  The dual settlements in this case had 
the same effect as the single settlement in Vogt——the full 
release of both the tortfeasor and the tortfeasor's insurer.8   
¶50 The balance of equities between the underinsurer and 
the tortfeasor is the same.  It is important to preserve the 
underinsurer's subrogation right, and under this extension of 
                                                 
8 See supra n.2 for the circumstances surrounding the 
release.  In Vogt, the settlement agreement fully released both 
the tortfeasor and his insurer.  That is why the second proposed 
settlement in this case, fully releasing the Trust, moves this 
case onto the same footing as Vogt, with both the tortfeasor and 
the insured fully released by settlement.   
No. 2002AP3394 
24 
 
Vogt the underinsurer retains the right of subrogation against 
the tortfeasor. 
¶51 The second rationale articulated by the Vogt court is 
controlling.  As the court noted, an insured motorist has a 
right to a settlement and should not be required to sue for what 
is being freely offered, thus incurring substantial legal fees.  
Vogt, 129 Wis. 2d at 18.  The right to a prompt settlement does 
not depend on whether the motorist has settled with the 
tortfeasor or the tortfeasor's insurer.  Rather, "Wisconsin has 
a long-standing policy in favor of settlements."  Schulte, 176 
Wis. 2d at 634 (citing Collins v. Am. Family Mut. Ins. Co., 153 
Wis. 2d 477, 490, 451 N.W.2d 429 (1990) (internal citations 
omitted)).  Prompt settlement of claims is in the public 
interest.  See id. (citing Loy v. Bunderson, 107 Wis. 2d 400, 
425, 320 N.W.2d 175 (1982)). 
¶52 Sentry asserts that "until a determination was made as 
to the value of the Pittses' UIM claim, Sentry would not be in a 
position to know the amount it would seek in subrogation."  The 
passive construction of that sentence disguises the fundamental 
question of who must make the critical valuation of the 
insured's damages.  Sentry prefers it to be the circuit court.  
Under Vogt, Sentry must do so on its own.  The rationale 
underpinning the Vogt procedure is that an insurer is best 
suited to determine whether substitution is in its own best 
interests. 
¶53 The assessment of risk and uncertainty is at the very 
heart of the insurer's business.  It is the keystone of the 
No. 2002AP3394 
25 
 
insurance enterprise.  This court has previously pointed out 
that 
"the 
critical 
element 
in 
[the 
parties' 
competing 
definitions of insurance] is a contractual shifting of risk in 
exchange for premiums."  Hillegass v. Landwehr, 176 Wis. 2d 76, 
81, 499 N.W.2d 652 (1993) (emphasis added); see also Nat'l 
Motorists Ass'n v. Office of the Comm'r of Ins., 2002 WI App 
308, ¶¶31-32, 259 Wis. 2d 240, 655 N.W.2d 179.  Indeed, the 
transfer of risk is the only reason that insureds pay premiums 
to insurers.  See Black's Law Dictionary 802 (7th ed. 1999) 
("Insurance" is defined as "an agreement by which one party 
assumes a risk faced by another party in return for a premium 
payment.").  Sentry, and all insurers, evaluate damages and make 
determinations 
about 
benefits 
on 
a 
daily 
basis. 
 
These 
determinations inevitably involve a degree of risk, for which 
insurers are compensated by insureds in the form of premiums.9   
¶54 In Vogt, the circuit court stated the issue as 
follows: "Can the insured [of an underinsured motorist's policy] 
settle with the tort feasor, and receive additional payments 
from the under-insured motorist's carrier and prevent the 
underinsured motorist's carrier from exercising subrogation 
rights of reimbursement against the tort feasor?"  Vogt, 129 
                                                 
9 In a similar vein, this court has held that "where either 
the insurer or the insured must to some extent go unpaid, the 
loss should be borne by the insurer for that is a risk the 
insured has paid it to assume."  Garrity v. Rural Mut. Ins. Co., 
77 Wis. 2d 537, 542, 253 N.W.2d 512 (1977) (citing St. Paul Fire 
& Marine Ins. Co. v. W.P. Rose Supply Co., 198 S.E.2d 482, 484 
(N.C. Ct. App. 1973)). 
No. 2002AP3394 
26 
 
Wis. 2d at 10 (emphasis added).  This court did not disturb that 
statement of the issue, the plain language of which contemplates 
settlement with the tortfeasor.  The court concluded that the 
underinsurer 
"has 
the 
right 
of 
subrogation 
against 
the 
tortfeasor and his insurer to the extent that the underinsurer 
has paid benefits to its own insured."  Vogt, 129 Wis. 2d at 17 
(emphasis added).    
¶55 After holding that the underinsurer had the right to 
subrogation as long as it substituted its own funds, the court 
listed several factors the underinsurer might consider in 
deciding whether to consent or substitute.  These factors 
include "the amount of the settlement, the amount of liability 
insurance remaining, if any, the amount of assets held by the 
tortfeasor and the likelihood of their recovery via subrogation, 
the total amount of the insured's damages, and the expenses and 
risks of litigating the insured's cause of action."  Vogt, 129 
Wis. 2d at 20 (quoting Schmidt, 338 N.W.2d at 263) (emphasis 
added). 
 
As 
already 
discussed, 
the 
substitution 
of 
the 
underinsurer's funds gives it the right to proceed against both 
the 
tortfeasor 
and 
her 
insurer; 
this 
indicates 
that 
underinsurers are already making judgments about the risks posed 
by suing a tortfeasor with uncertain assets.   
¶56 The "reasonable period" between notice of the proposed 
settlement and the required decision to consent or substitute 
gives the underinsurer time to attempt to determine the 
tortfeasor's assets.  Indeed, that is one of the factors 
expressly delineated in the Schmidt decision, as adopted in 
No. 2002AP3394 
27 
 
Vogt.  Vogt, 129 Wis. 2d at 20.  In this case, Sentry did 
attempt to determine the assets in the Trust.  See Letter from 
Tina Zblewski, Sentry Claims Representative, to Attorney Thomas 
Foy (Feb. 12, 2001) (announcing Sentry's intent to substitute 
its funds for American Family's tendered policy limits, thus 
maintaining its subrogation right, and requesting counsel to 
"provide us with an affidavit indicating the assets in the 
trust").  It is unclear whether Sentry ever received a response 
to this inquiry, but Sentry had already set in motion the types 
of inquiries that are necessary to determine whether to consent 
or 
substitute 
when 
a 
settlement 
offer 
is 
made 
by 
the 
tortfeasor.10 
¶57 We note that one insurance treatise reviewed standard 
policy forms from 35 states, and found that 30 of them 
incorporated the Schmidt approach in some form.  Schermer, 
Automobile Liability Insurance 3d § 59.10, at 59-34 n.7 (3d ed. 
1995).  Most jurisdictions following the Schmidt approach apply 
it to settlements with either tortfeasors or tortfeasors' 
                                                 
10 In its brief, Sentry asserted that the Trust "appeared to 
have substantial assets."  At the circuit court's hearing on May 
17, 2002, counsel for Wisconsin Physicians Service Insurance 
Corporation, 
another 
involuntary 
plaintiff, 
stated 
"[T]he 
tortfeasor was a millionaire, which there is no question about.  
The plaintiff would never have any reason to even talk to Sentry 
because they are going to collect everything they need from the 
tortfeasor."  There is no factual support for this assertion in 
the record, but it illustrates the point that the assets of the 
tortfeasor 
are 
often 
determinable, 
thus 
informing 
the 
underinsurer's decision about the risks of substituting its own 
funds and proceeding directly against the tortfeasor. 
No. 2002AP3394 
28 
 
insurers.11  The most exhaustive treatise on the subject is also 
in accord: "An [under]insurer may lose the right to be 
subrogated to an insured's claim by refusing to consent to a 
settlement with a tortfeasor or a tortfeasor's insurer."  3 
Widiss, Uninsured and Underinsured Motorist Insurance § 43.6, at 
519 (emphasis added); see also Anderson, Wisconsin Insurance Law 
§ 4.7, at 4-37 ("A UIM insurer is entitled to notice from the 
insured of settlement with a tortfeasor and an opportunity to 
pursue its right of subrogation") (emphasis added); J. Sue 
Myatt, Settlement Procedures in Underinsured Motorist Cases: The 
Underinsurer's 
Dilemma 
Between 
Preserving 
the 
Insurer's 
Subrogation Right and Protecting the Insured's Settlement Right, 
                                                 
11 See, e.g., 215 Ill. Comp. Stat. 5/143a-2(6) (2004) 
(Consent or substitute procedure applies "where the insurer has 
been provided with written notice in advance of a settlement 
between its insured and the underinsured motorist") (emphasis 
added); Lambert v. State Farm Mut. Auto. Ins. Co., 576 So. 2d 
160, 167-68 (Ala. 1991) ("If the underinsured motorist insurance 
carrier wants to protect its subrogation rights, it must, within 
a reasonable time . . . advance to its insured an amount equal 
to the 
tort-feasor's settlement offer") (emphasis added); 
Grinnell Mut. Reinsurance Co. v. Recker, 561 N.W.2d 63, 70 (Iowa 
1997) (After insured notified underinsurer of settlement offer, 
underinsurer 
"could 
then 
have 
protected 
its 
contingent 
subrogation 
rights 
by 
tendering 
an 
amount 
equal 
to 
the 
tortfeasors' settlement offer and substituting its payment for 
that of the offer") (emphasis added); Coots v. Allstate Ins. 
Co., 853 S.W.2d 895, 900 (Ky. 1993) ("We conclude that it does 
not abrogate UIM coverage to settle with the tortfeasor and his 
carrier . . . so long as the UIM insured notifies his UIM 
carrier of his intent to do so") (emphasis added); McDonald v. 
Republic-Franklin Ins. Co., 543 N.E.2d 456, 460-61 (Ohio 1989) 
(disapproved of on other grounds by Ferrando v. Auto-Owners Mut. 
Ins. Co., 781 N.E.2d 927 (Ohio 2002)); Hamilton v. Farmers Ins. 
Co. of Washington, 733 P.2d 213, 220 (Wash. 1987). 
No. 2002AP3394 
29 
 
14 J. Corp. L. 175, 185 (1988) ("Common components of the 
prescribed settlement procedure include: (1) The insured's 
notice to the underinsured motorist carrier regarding the 
underinsurance claim and tentative settlement offer from the 
tortfeasor") (emphasis added) (hereinafter Myatt, Settlement 
Procedures in Underinsured Motorist Cases).  Members of this 
court have touched on the subject in passing: "Under Vogt, a 
plaintiff can take advantage of the defendant's settlement offer 
and an underinsurer can protect its right to subrogation 
reimbursement."  Ives v. Coopertools, 208 Wis. 2d 55, 71, 559 
N.W.2d 571 (1997) (Geske, J., concurring) (emphasis added).12 
¶58 In summary, we believe that the procedure prescribed 
in Vogt to govern allocation of risk has equal applicability 
here.  When the subrogated underinsurer substitutes its own 
funds for the settlement funds, it gains the right to proceed 
against the party or parties that would have been fully released 
by the settlement agreement.   
¶59 Our continued endorsement of the prescribed Vogt 
procedure will afford a higher degree of certainty to the 
settlement process in underinsurance claims.  See Myatt, 
                                                 
12 In Ives, the six participating justices of this court 
unanimously agreed that the decision of the court of appeals 
should be reversed, but evenly split on the proper rationale for 
the reversal.  Ives v. Coopertools, 208 Wis. 2d 55, 57, 559 
N.W.2d 571 
(1997). 
 Therefore, Justice 
Geske's 
concurring 
opinion has no precedential value because it is not the opinion 
of a majority of the court, and simply serves here to illustrate 
another reference to the broader application of Vogt to 
settlements with "the defendant" as well as the defendant's 
insurer.   
No. 2002AP3394 
30 
 
Settlement Procedures in Underinsured Motorist Cases at 197-98.  
Therefore, we hold that an UIM insurer has an obligation to 
consent to, or substitute its own funds for, a proposed 
settlement between its insured and the tortfeasor, where the 
tortfeasor's insurer has already settled for its policy limit 
and the tortfeasor is offering an additional settlement payment.  
This obligation is not triggered, however, if the insured has 
failed 
to 
satisfy 
its 
contractual 
obligation 
to 
provide 
information to the underinsurer to assist the underinsurer in 
determining damages.   
¶60 Sentry argues that its policy forecloses this result 
because it expressly adopts the Vogt procedure only when its 
insured settles with the tortfeasor's insurer.13  The policy is 
silent on settlements with the tortfeasor herself.  Sentry 
implicitly relies on the maxim, expressio unius est exclusio 
alterius ("The expression of one thing is the exclusion of 
another.").  Black's Law Dictionary 1635 (7th ed. 1999).  Even 
if we were to assume that the silence in the policy had 
significance, the silence in the Sentry policy, like the silence 
in the WECC policy at issue in Vogt, cannot trump public policy.  
The WECC policy also contained express settlement procedures 
that did not contemplate the procedure eventually adopted by the 
Vogt court.  Vogt, 129 Wis. 2d at 9.  The court was nonetheless 
                                                 
13 The policy provides: "No damages will be payable under 
this insurance, as a result of a car accident with an 
underinsured motor vehicle until . . . [a] tentative settlement 
has been made between you and the insurer of the underinsured 
motor vehicle."  See supra, ¶21. 
No. 2002AP3394 
31 
 
persuaded by the public policy favoring an injured insured's 
right to prompt settlement.  Id. at 17-18.  Despite the fact 
that 
the 
insurance 
contract 
specifically 
addresses 
only 
settlement with a tortfeasor's insurance company, the motorist 
should not be required to sue for what is being offered by the 
tortfeasor.   
IV. CONCLUSION 
¶61 Because the circuit court held that the Vogt procedure 
did not apply here, it never reached the other issues in this 
case: whether Pitts fully cooperated with Sentry pursuant to the 
policy, and whether Sentry owes the Pittses interest on the 
settlement offer pursuant to Wis. Stat. § 628.46 or attorney 
fees and costs pursuant to Wis. Stat. § 806.04.  We express no 
opinion on those issues, and remand this case to the circuit 
court to allow it to address them.   
 
By the Court.—The order of the circuit court is reversed 
and the cause is remanded. 
¶62 JON P. WILCOX, J., did not participate. 
 
 
No. 2002AP3394 
 
 
1