Court Opinion

ID: 9659017
Source: CourtListenerOpinion
Date Created: 2023-08-23 21:26:40.374622+00
Date Added: 2024-06-11T18:14:02.998678
License: Public Domain

*461Wilkie, J.
(concurring). I concur with the majority. I wish to add only one point. I suggest that the legislature amend the statutes to permit direct action against insurers in all negligence cases.1
I realize that the overwhelming majority of states do not permit joinder of insurance companies. The policy which supports the majority rule is that a greater burden is placed on the defense when an insurance company is joined because of the jury’s tendency to find negligence and augment damages if the jury thinks an affluent institution such as an insurance company will bear the loss.
A legal basis often presented for denying joinder is that actions ex contractu cannot be joined with an action ex delicto.2 This means that the contract action is separate from the tort action, and, generally, privity of contract would be recognized as a defense to a suit by the injured against the insurer.
However, only two states permit joinder. As stated, Wisconsin permits joinder “in any action for damages caused by the negligent operation, management or control of a motor vehicle.” Louisiana is much broader, permitting joinder of an insurance company in all negligence actions.3 Louisiana goes further than any state in the union to permit joinder of insurance companies in negligence actions even permitting action in solido against the insurer. Rhode Island also permits joinder of insurance companies in all negligence actions, but such joinder or direct action is permitted only when the tort-feasor cannot be served with process.4
Where there is compulsory-insurance contract, there is additional permissive joinder of insurance companies. *462In these states the insured is required by statute or ordinance to purchase insurance to protect against injuries, and in these states, the prevailing rule is that the insurer may be joined in an action by an injured third party on the theory that, under the statutes requiring and controlling compulsory insurance, a direct or joint right is created in favor of the injured person against both the insured and the insurer.5 Many states, though a minority, have cases to the contrary, however.6
The right to sue an insurance company directly varies in some states depending upon the type of insurance policy involved. A distinction is made between policies of liability insurance and policies of indemnity insurance. In liability policies, the injured person has a right of action upon qualifying under the policy terms without a judgment. On the other hand, indemnity policies, solely for the benefit of the insured, generally require that the insured bring action for reimbursement of financial loss by reason of accident or injury. Some courts have permitted the injured third party to sue the insurer where a liability policy is involved.7 Where an indemnity policy is involved, however, the rule is that the injured person has no right of action against the insured.8
We all know that insurance companies also avoid the hazards of being sued directly by putting no-action *463clauses in their insurance contracts. These clauses generally provide that a suit on the policy is barred until loss has actually been sustained by the assured by reason of payment in money (a) of a final judgment rendered after a trial in a suit against the assured, (b) of the expenses incurred by the assured in the defense of a suit against the assured. This no-action clause has been universally held to prevent a joinder of the insurer and the insured.9
In summary, although the majority rule is against permitting joinder of the insurer in negligence cases, there are some states where statutes have been passed specifically permitting joinder of insurance companies.10 But there is no discernable trend in that direction. The lack of a trend toward direct action against insurance companies does not minimize the need for legislation in Wisconsin. A direct-action statute permits a plaintiff to realize his recovery much more rapidly without any circuity of action, and also assures a more certain recovery. Direct action also permits the insurance policy to more adequately serve both parties protected by the policy. The idea that insurance is less an individual matter than a matter of protecting the public by insuring compensation for injuries has become more generally accepted.
The chief argument in support of such a statute is what took place in this case. Since I have been on the court it seems that every nonautomobile personal injury litigation has involved a skirmish concerning whether the jury was or was not prejudiced by the mention of insurance as to the defendant. I think it would be simpler, more realistic, and fairer if insurance com*464panies in these actions could be joined. Wisconsin has led the way with joinder in automobile cases. It should now permit joinder in other types of negligence cases. There is no fair basis for the distinction. This is a change that is needed and the legislature must do the job.

 Sec. 260.11, Stats., now permits joinder of insurance companies only in cases “arising out of the negligent operation, management or control of a motor vehicle.”

 8 Appleman, Insurance, p. 296, sec. 4861.

 See. 655, Louisiana Statute, Title 22.

 5 Gen. Laws of R. I. (1956), sec. 27-7-2.

 Anno. 20 A. L. R. (2d) 1097, 1102. States with cases supporting the majority rule include Alabama, California, Georgia, Iowa, Kansas, Nebraska, New Mexico, North Carolina, North Dakota, Oklahoma, South Carolina, Tennessee, Texas, Washington, West Virginia, and Wisconsin. See also 22 Marquette Law Review (1938), 75, 79, 80.

 States cases to the contrary include Alabama, Arizona, Arkansas, Colorado, Georgia, Iowa, Michigan, North Carolina, South Carolina, Texas, Washington, and West Virginia.

 8 Appleman, Insurance, p. 214, see. 4831. Jurisdictions with cases to support this rule include Kentucky, North Carolina, South Carolina, Missouri, and Tennessee.

 8 Appleman, Insurance, p. 216, sec. 4832.

 22 Marquette Law Review (1938), 75, 78.

 Attempts at joining insurance companies under normal join-der statutes where insurance is not expressly mentioned have failed. See 1953 Wisconsin Law Review, 688, 700, et seq.