Opinion ID: 1796801
Heading Depth: 3
Heading Rank: 2

Heading: Stones and Acuity's stipulation

Text: ¶ 89 Acuity appealed from the circuit court's decision that UIM coverage was afforded under the umbrella policy because it was contextually ambiguous. The stipulation of the parties did not waive any rights of appeal that Acuity had with respect to the decisions on Acuity's Motion for Summary Judgment and Motion to Reconsider. Stipulation and Final Order 2 (Milwaukee County Cir. Ct. Jun. 8, 2005). There is nothing in the stipulation that mentions Rebernick or addresses whether Acuity did or did not comply with the notice requirements of Wis. Stat. § 632.32(4m)(a)1, in regard to the umbrella policy. There is nothing in the stipulation that addresses what penalty, if any, should be imposed if it is determined that Acuity should have, but did not, give a sufficient § 632.32(4m)(a)1 notice. ¶ 90 The Stones assert that the court of appeals decided Rebernick before the circuit court's decision on Acuity's motion for reconsideration and Rebernick was brought to the attention of the circuit court. Therefore, the Stones continue, the language in the stipulation requiring Acuity to pay $500,000 in the event insurance coverage is found on appeal to exist from Acuity applies to a determination by an appellate court that Acuity did not comply with Rebernick's interpretation of Wis. Stat. § 632.32(4m)(a)1. The majority opinion agrees. [1] ¶ 91 Acuity contends that the stipulation has no such meaning, and if it is concluded that it failed to fulfill its obligations under Wis. Stat. § 632.32(4m)(a)1, a remand to the circuit court is necessary to determine whether the Stones would have purchased more UIM coverage if proper notice had been given. Because of the general language in which the stipulation is phrased, reasonable people could disagree about the meaning of the document. Therefore, I conclude that it is ambiguous. Accordingly, consideration of extrinsic evidence to interpret the intent of the parties is appropriate. See Farm Credit Servs. of N. Cent. Wis. v. Wysocki, 2001 WI 51, ¶ 12, 243 Wis.2d 305, 627 N.W.2d 444; Duhame, 154 Wis.2d at 264-67, 453 N.W.2d 149. ¶ 92 When interpreting an ambiguous stipulation, the context in which the stipulation arises is important in determining the intent of the parties. D'Angelo, 33 Wis.2d at 227, 147 N.W.2d 321. The procedural posture of the case at the time that the stipulation was made is part of that context. Pierce, 278 Wis.2d 82, ¶ 32, 692 N.W.2d 558. Here, the parties stipulated solely to eliminate the need to conduct a jury trial to determine the Stones' damages and to facilitate the appeal of the circuit court's decision. Therefore, the stipulation was a procedural device formulated to facilitate the parties' appeal, and it should be narrowly construed. D'Angelo, 33 Wis.2d at 227, 147 N.W.2d 321. ¶ 93 I also note that the Stones did not plead a lack of notice pursuant to Wis. Stat. § 632.32(4m)(a)1 as a basis for requiring UIM payments under the umbrella policy. While it is true, as the majority opinion points out, that the court of appeals' decision in Rebernick was brought to the circuit court's attention, [2] the circuit court never addressed whether Acuity did or did not comply with § 632.32(4m)(a)1. See Milwaukee County Circuit Court Order of July 6, 2004. ¶ 94 In addition, when the parties entered into the stipulation, there was nothing in the court of appeals Rebernick decision that would have alerted Acuity to what penalty it might face for noncompliance with Wis. Stat. § 632.32(4m)(a)1. This is so because although Rebernick decided that notice of UIM coverage is required for umbrella policies, it concluded that Wausau General Insurance Company had complied with the notice provisions of the statute. Rebernick, 278 Wis.2d 461, ¶¶ 9-11, 692 N.W.2d 348. Accordingly, no penalty was addressed by the majority opinion in Rebernick. Even the separate opinion of Judge Kessler in Rebernick did not foretell the penalty the majority opinion assesses against Acuity. Rather, Judge Kessler would have required the insurance company to give notice and then would have permitted the Rebernicks to decide whether to purchase UIM coverage under the umbrella policy as an addition to their automobile liability policy. Id., ¶ 14 (Kessler, J., concurring in part; dissenting in part). Because no court had decided on an appropriate remedy for an insurer's failure to comply with § 632.32(4m)(a)1 in regard to an umbrella policy when the stipulation was made, it is unreasonable to conclude that the parties intended to agree that Acuity would pay a $500,000 penalty, if it was determined at a later date that Acuity had not complied with § 632.32(4m)(a)1. ¶ 95 Furthermore, the majority opinion imposes an excessive penalty as a remedy for a failure to give sufficient notice pursuant to Wis. Stat. § 632.32(4m)(a)1. Acuity must pay $500,000. However, to all other insurers, the amount of the penalty is the minimum amount of UIM insurance that § 632.32(4m)(d) requires when UIM is sold, i.e., $50,000 per person and $100,000 per accident. [3] The majority opinion relies on Wis. Stat. § 631.15(3m) for deciding upon the amount of UIM coverage to assess as a penalty because § 631.15(3m) directs that a policy that violates a statute or rule is enforceable against the insurer as if it conformed to the statute or rule. [4] ¶ 96 Moreover, the circuit court concluded that coverage was afforded for an occurrence because the policy was contextually ambiguous. Concluding that coverage exists due to the language of the policy is a different conclusion than is assigning a penalty for failing to comply with a statutory directive. The coverage question to which the stipulation is directed is based on the circuit court's construction of the words used in Acuity's policy. Therefore, it was the policy itself, not a statutory penalty, that created the potential of an additional payment under the stipulation. ¶ 97 Accordingly, I conclude that the parties did not intend to agree that the stipulation would encompass a remedy for noncompliance with Wis. Stat. § 632.32(4m)(a)1. My reasons for this conclusion are five-fold: (1) The stipulation was a procedural device intended to move the case forward toward appellate review of the circuit court's decision by foregoing a trial on damages, when damages were not seriously contested; (2) the Stones did not plead noncompliance with § 632.32(4m)(a)1 as a basis for payment by Acuity; (3) the circuit court did not address whether Acuity was in compliance with the court of appeals decision in Rebernick; (4) Rebernick did not address the question of remedy for noncompliance; and (5) the remedy for noncompliance the majority opinion assigns could not have been anticipated by the parties when they entered into the stipulation because that remedy was first determined in the case now before us. To construe the stipulation otherwise, as the majority opinion does, ignores the purpose for which the stipulation was made, a construction that is contrary to the recent precedent of this court. See Pierce, 278 Wis.2d 82, ¶¶ 31-32, 692 N.W.2d 558.