Opinion ID: 6221781
Heading Depth: 3
Heading Rank: 3

Heading: The limits under the bodily injury

Text: liability insurance policy or with respect to the proof of financial responsibility or self−insurance are less than the amount needed to fully compensate the insured for his or her damages. Wis. Stat. § 632.32(2)(e) (2009–10). 15 No. 2019AP1320 Reference Bureau, Budget Brief: Mandatory Motor Vehicle Insurance [Budget Brief 10–1] (2010). ¶23 This expanded UIM coverage system was short-lived; in 2011, the legislature repealed or amended many of the 2009 changes. Most pertinent, the legislature repealed the definition of underinsured motor vehicle in Wis. Stat. § 632.32(2)(e), but retained the definition of uninsured motor vehicle in § 632.32(2)(g) as well as the definition of underinsured motorist coverage in § 632.32(2)(d). See 2011 Wis. Act 14; Wis. Stat. § 632.32(2)(d), (g) (2011–12). Brey contends the 2011 repeal of the definition of underinsured motor vehicle left § 632.32(2)(d) to require insurers to provide UIM coverage to their insureds regardless of whether an insured actually sustained bodily injury in an accident. We disagree. ¶24 In repealing Wis. Stat. § 632.32(2)(e)——the definition of underinsured motor vehicle——the legislature did not broaden UIM coverage for tort victims, but rather increased coverage flexibility for insurers. As noted previously, the statutes did not define underinsured motor vehicle prior to 2009. Consequently, insurers had used one of two definitions: in some policies, underinsured motor vehicle was defined as one insured by a policy with liability limits less than the insured's UIM coverage limits (limits of coverage). Taylor v. Greatway Ins. Co., 2001 WI 93, ¶33, 245 Wis. 2d 134, 628 N.W.2d 916 (Ann Walsh Bradley, J., dissenting). In others, it was defined by comparison of the at-fault driver's liability limits with the damages sustained by the insured (limits of damages). Id. The 2009 16 No. 2019AP1320 addition of § 632.32(e) restricted insurers to the limits of damages definition. See 2009 Wis. Act 28, § 3153 ('Underinsured motor vehicle' means a motor vehicle to which all of the following apply: . . . The limits under the bodily injury liability insurance policy are less than the amount needed to fully compensate the insured for his or her damages.). ¶25 In 2011, the legislature repealed Wis. Stat. § 632.32(2)(e) in its entirety. See 2011 Wis. Act 14, § 15c. A Legislative Council memo recognized that by return[ing] the definition of underinsured motorist coverage to the status of that law prior to being revised by 2009 Wisconsin Act 28, the repeal leaves that term undefined in the statutes, to be defined by each individual insurance policy, as it was prior to 2009 Wisconsin Act 28. Margit Kelley, Wis. Legis. Council Amendment Memo, 2011 Assembly Bill 4: Assembly Amendments 1 and 7 (Jan. 28, 2011).10 The repeal thereby expanded insurers' options for contractually defining UIM coverage. ¶26 Adopting Brey's (and the court of appeals') interpretation of the repeal of Wis. Stat. § 632.32(2)(e) would preclude insurers not only from requiring that the vehicle be involved in an accident with a person who has underinsured Both Assembly Amendments 1 and 7 were adopted and included 10 in the final version of 2011 Wis. Act 14. See Margit Kelley, Wis. Legis. Council Act Memo, 2011 Wisconsin Act 14: Motor Vehicle Liability Insurance (Apr. 20, 2011). In both memos, the author incorrectly states the definition of underinsured motorist coverage was repealed, instead of the definition of underinsured motorist vehicle. This does not affect our analysis. 17 No. 2019AP1320 motorist coverage under § 632.32(2)(e)1., but also from utilizing the limits of damages definition under § 632.32(2)(e)3. Because the repeal of the definition of underinsured motor vehicle expanded rather than constrained insurers' definitional choices—— allowing insurers to utilize either the limits of coverage or limits of damages definition——Brey's interpretation fails in light of the statute's history. ¶27 The 2011 legislative changes not only expanded insurers' contractual freedom by repealing the definitional requirements of Wis. Stat. § 632.32(2)(e), they also narrowed the required scope of UIM coverage generally. For example, 2011 Wisconsin Act 14 made underinsured motorist coverage optional rather than mandatory; reduced the minimum limits from $100,000 per person and $300,000 per accident to $50,000 per person and $100,000 per accident; reintroduced anti-stacking and reducing clauses as permissible policy provisions; and removed the requirement that each application for an umbrella or excess liability policy include a written offer of UM and UIM coverages. See Legislative Reference Bureau, Summary of the 2011–12 Wisconsin Legislative Session, at 26. Additionally, the 2011 enactments required an insurer to provide notice of UIM coverage availability only once, and declared an insured's acceptance or rejection of UIM coverage need not be in writing. Wis. Stat. § 632.32(4m) (2011–12). Further, the law considered the absence of a premium payment for UIM to be conclusive proof that the person has rejected such coverage. § 632.32(4m)(b). Collectively, these 2011 enactments evince a textually or contextually manifest purpose to permit greater 18 No. 2019AP1320 limitations on UIM coverage and expand insurer flexibility——goals entirely inconsistent with a mandate that insurers provide UIM coverage to insureds who are not involved in any accident at all. See Kalal, 271 Wis. 2d 633, ¶49 ([A] plain-meaning interpretation cannot contravene a textually or contextually manifest statutory purpose.).11 C. Wrongful Death Claims Under UIM/UM Policies ¶28 Wrongful death actions are derivative tort actions. Christ v. Exxon Mobil Corp., 2015 WI 58, ¶22, 362 Wis. 2d 668, 866 N.W.2d 602 (citing Ruppa v. Am. States Ins. Co., 91 Wis. 2d 628, 646, 284 N.W.2d 318 (1979)). In Christ, we explained: [E]ven though the wrongful death statute creates a 'new action' and 'allows a person to recover his or her own damages sustained because of the wrongful death of another,' the person's right of action depends not only upon the death of another person but also upon that other person's entitlement to maintain an action and recover if his death had not occurred. Id. (citations omitted). In order for a wrongful death claim to exist, the decedent must have had a valid claim for damages against the defendant at the time of his death. Id., ¶23. At the time of his death, Johnson could not have recovered damages 11Neither the court of appeals' decision in Ledman v. State Farm Mutual Automobile Insurance Co., 230 Wis. 2d 56, 601 N.W.2d 312 (Ct. App. 1999), which did not address the UIM statutory provisions, nor the litany of other states' interpretations of similar statutes, which State Farm cites in support of its interpretation, are necessary to resolve this case. Rather, under a plain-meaning analysis, confirmed by legislative history, Wis. Stat. § 632.32(2)(d) unambiguously does not bar an automobile liability policy from requiring that an insured sustain bodily injury in order to trigger UIM coverage. 19 No. 2019AP1320 under the UIM coverage provisions of the Policy because he was not an insured. Consequently, Brey cannot maintain a derivative action against State Farm. See id. (If the decedent would have been barred from making a claim, the decedent's statutory beneficiary also would be barred.). ¶29 Several Wisconsin cases confirm the derivative nature of wrongful death actions in the context of UIM/UM coverage specifically, concluding an accident victim must possess an independent claim for UIM coverage in order for a wrongful death claim to proceed. For example, in State Farm Mutual Automobile Insurance Co. v. Langridge, 2004 WI 113, ¶51, 275 Wis. 2d 35, 683 N.W.2d 75, an insured [Mrs. Langridge] who suffered no bodily injury [sought] to recover for her spouse's wrongful death under their policy's UIM coverage after the tortfeasor's 'limits of liability for bodily injury' had been fully paid. The tortfeasor's per person liability limit exceeded the per person UIM limit in the Langridges' policy, which accordingly afforded no UIM coverage for the accident causing Mr. Langridge's death. We held that under the Langridges' policy, Mrs. Langridge had a derivative claim for her husband's bodily injury. She had a right to pursue that derivative claim whether or not she suffered bodily injury, but only until the tortfeasor's per person limit of liability was exhausted. She did not have her own independent claim under the policy. Id., ¶55. ¶30 In holding that Mrs. Langridge's claim was limited to the tortfeasor's per person liability limit, this court concluded that Mrs. Langridge's reading of the policy, under which the 20 No. 2019AP1320 tortfeasor was underinsured as to her since the policy limits were paid to the estate and not Mrs. Langridge, [E]ssentially transforms UIM into a form of life insurance for a spouse killed in an automobile accident. This is not consistent with a reasonable insured's understanding of the UIM policy. Another way of saying this is that a tortfeasor's motor vehicle would likely be transformed into an 'underinsured motor vehicle' whenever another insured had a wrongful death claim. This would untether the definition of 'underinsured motor vehicle' from the concept it was intended to define. Id., ¶¶51–52. ¶31 In Bruflat v. Prudential Property & Casualty Insurance Co., 2000 WI App 69, ¶19, 233 Wis. 2d 523, 608 N.W.2d 371, abrogated on other grounds by Day v. Allstate Indemnity Co., 2011 WI 24, 332 Wis. 2d 571, 798 N.W.2d 199, the court of appeals described the purpose of UM policies as [compensation for] an insured who is the victim of an uninsured motorist's negligence to the same extent as if the uninsured motorist were insured. In that wrongful death dispute, the court identified the deceased son (insured as a resident relative under his father's policy) as the victim——not the insured father. Id., ¶20. Other decisions by this court similarly link the insured to the bodily injury sustained in the accident for purposes of UIM coverage. See, e.g., Bethke v. AutoOwners Ins. Co., 2013 WI 16, ¶19, 345 Wis. 2d 533, 825 N.W.2d 482 (UIM coverage provides additional coverage to insured automobile accident victims when a liable party has inadequate means of payment.); Pitts v. Revocable Trust of Knueppel, 2005 WI 95, ¶28, 282 Wis. 2d 550, 698 N.W.2d 761 (Underinsured motorist coverage 21 No. 2019AP1320 is intended to protect motorists against inadequately insured tortfeasors. (emphasis added)). ¶32 The court of appeals has also linked UM and UIM coverage to the injured insured. See, e.g., Mullen v. Walczak, 2002 WI App 254, 257 Wis. 2d 928, 653 N.W.2d 529 (holding that although an injured accident victim was entitled to recover damages under his policy's UM coverage for emotional distress from witnessing his wife's death, these damages——since they arose from his wife's bodily injury——were subject to her each person limit, which had already been exhausted by a wrongful death claim brought on behalf of her estate). Collectively, these cases illustrate that UIM/UM insurance protects the insured accident victim, conditioning coverage on a nexus between the insured and the bodily injury or death suffered. Nothing in Wis. Stat. § 632.32(2)(d) precludes insurers from affording coverage to only those insureds who are injured in an auto accident.