Court Opinion

ID: 8202460
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:38:51.607893+00
Date Added: 2024-06-11T16:40:58.823192
License: Public Domain

FINE, J.
(dissenting). The majority holds that section 632.34, Stats., bars all third-party claims against an insurance company whose insured fails to cooperate. This interpretation renders the statute essentially meaningless.
Section 632.34, Stats., provides:
Defense of noncooperation. If a policy of automobile liability insurance provides a defense to the insurer for lack of cooperation on the part of the *487insured, the defense is not effective against a 3rd person making a claim against the insurer unless there was collusion between the 3rd person and the insured or unless the claimant was a passenger in or on the insured vehicle. If the defense is not effective against the claimant, after payment the insurer is subrogated to the injured person's claim against the insured to the extent of the payment and is entitled to reimbursement by the insured.
Thus, unless there are special circumstances, section 632.34 does not permit an insurance company to interpose the insured's lack of cooperation as a defense "against a 3rd person making a claim against the insurer." Vinh T. Pham and State Farm Automobile Insurance Company are "3rd person[s]" who have made a claim against Heritage Mutual Insurance Company. Accordingly, they — not Lillian Pope or John "Sugar" Doe (Heritage's insureds) — are "claimants]" for the purposes of section 632.34. Nevertheless, Heritage seeks to interpose Doe's noncooperation as a defense against the claim asserted by Pham and State Farm. It may not do so, however, because none of the special circumstances required by section 632.34 are present. First, there was no "collusion" between any of Heritage's insureds and either Pham or State Farm. Second, neither Pham nor State Farm "was a passenger in or on" the automobile insured by Heritage.
I respectfully dissent.