Court Opinion

ID: 9883967
Source: CourtListenerOpinion
Date Created: 2023-10-06 02:28:32.305496+00
Date Added: 2024-06-11T07:48:33.935762
License: Public Domain

*611N. PATRICK CROOKS, J.
*612¶ 119. I respectfully dissent, however, because the rest of the majority opinion fails to properly interpret the State Farm policy under applicable Wisconsin law. I would reverse the decision of the court of appeals because under Wisconsin law and, thus, the plain language of the policy, Manitoba law, not Wisconsin law, determines the amount of damages Gillette and Os-tlund are legally entitled to collect from the underin-sured motorist. Furthermore, I would reverse the court of appeals' decision because under Danbeck v. American Family Mutual Insurance Co., 2001 WI 91, 245 Wis. 2d 186, 629 N.W.2d 150, the State Farm policy exhaustion provision has not been satisfied merely because there is no recovery for non-economic damages. The majority claims that such a bar to recovery satisfies the exhaustion requirement.
¶ 120. First, by interpreting the plain language of the policy consistent with Wisconsin law, I conclude that Manitoba law must not be ignored in determining the amount of damages Gillette and Ostlund are legally entitled to collect from the underinsured motorist. It is well established in Wisconsin, and the majority agrees, that the words of an insurance policy are given their common and ordinary meaning. Danbeck v. American Family Mut. Ins. Co., 2001 WI 91, ¶ 10, 245 Wis. 2d 186, 629 N.W.2d 150; majority op. at ¶ 28. It is also well established that an insurance contract is interpreted based on what a reasonable person in the position of the insured would understand the words to mean. Mau v. North Dakota Ins. Reserve Fund, 2001 WI 134, ¶ 13, *613248 Wis. 2d 1031, 637 N.W.2d 45; majority op. at ¶ 28. Furthermore, insurance contracts should be interpreted and applied "according to their unambiguous language." American Family Mut. Ins. Co. v. Powell, 169 Wis. 2d 605, 608, 486 N.W.2d 537 (Ct. App. 1992). Using these Wisconsin canons of contract interpretation, I find it appropriate to look at the language of the policy to interpret the meaning of "legally entitled to collect from the owner or driver of an underinsured motor vehicle." Unlike the majority, I conclude that the question of which jurisdiction's law determines what damages Gillette and Ostlund are "legally entitled to collect" is resolved by interpreting the policy itself, rather than resorting to choice of law considerations.
¶ 121. As the majority opinion recognizes, damages for bodily injury an insured is legally entitled to collect requires that the damages must be compensable under the law. Majority op. at ¶ 43. However, the majority opinion then ends its analysis of the policy itself and effectively ignores the rest of the phrase, "from the owner or driver of an underinsured motor vehicle." Giving this phrase its common and ordinary meaning, which is the approach that is consistent with Wisconsin law, requires the court to conclude that Manitoba law, not Wisconsin law, determines liability for damages.
¶ 122. Here, the owner or driver of the underin-sured motor vehicle is Norman Unrau. Under the facts of this case, and Gillette and Ostlund's claim for UIM coverage, the insurance policy essentially provides "damages for bodily injury [Gillette and Ostlund are] legally entitled to collect from [Unrau]." The only question is how and where Gillette and Ostlund can legally recover damages for bodily injury from Unrau. This is not a choice of law issue, but rather a determi*614nation made consistent with Wisconsin law, because Gillette and Ostlund could only effectively file suit against Unrau, and consequently recover damages from Unrau, under Manitoba law. Gillette and Ostlund could not legally recover damages for bodily injury from Unrau under Wisconsin law, because Gillette and Os-tlund could not bring Unrau into a Wisconsin court.
¶ 123. Unrau, a Manitoba resident, does not have sufficient contacts with Wisconsin in order to be hauled into a Wisconsin court. None of the bases for personal jurisdiction set forth in Wis. Stat. § 801.05 or § 801.06, as required by § 801.04(2), are present. The accident did not occur in Wisconsin, but rather in Manitoba, nor does the record reflect that Unrau has ever been to Wisconsin, or even had any contacts with Wisconsin. It is inappropriate and unnecessary, therefore, to even consider whether Gillette and Ostlund are "legally entitled to collect" damages from Unrau under Wisconsin law. See Burns v. Geres, 140 Wis. 2d 197, 201-202, 409 N.W.2d 428 (Ct. App. 1987) (stating that contacts in Wisconsin "are so fortuitous and circumstantial that to impose Wisconsin law would constitute officious inter-meddling"). In other words, because Gillette and Os-tlund, if a lawsuit is necessary, could only legally collect damages from Unrau by filing suit in Manitoba, under Manitoba law, there is no choice of law issue. The unambiguous language of the insurance policy itself, coupled with the facts and circumstances of this case, answer the question of what "legally entitled to collect" means.
¶ 124. In addition to ignoring the plain language of the policy itself, I note what appears to be the inconsistent consequence of the majority's opinion. By using Wisconsin law to determine State Farm's liability on the insurance policy, the majority opinion effectively *615creates a situation where the liability of the underin-sured motorist would be determined under one system of law, Manitoba law, but the insurance company's liability would be determined under another system of law, Wisconsin law. This result is inconsistent with the plain language of the insurance policy, and seems contrary to common sense principles relating to insurance contract interpretation and application.
¶ 125. Applying Manitoba law, I would conclude that because Gillette and Ostlund are not entitled to collect non-economic damages from Unrau, they, accordingly, are not entitled to collect those damages under the State Farm underinsured motorist policy provisions. I would, therefore, reverse the decision of the court of appeals.
¶ 126. I also respectfully dissent because I disagree with the majority's interpretation and application of Danbeck. I would reverse the court of appeals' decision, because the State Farm policy exhaustion provision has not been satisfied merely because there is no recovery for non-economic damages under Manitoba law.
¶ 127. Before discussing the merits of Danbeck, however, I note that the court of appeals' decision in this case, which the majority relies on, was issued before this court issued the Danbeck decision. See majority op. at ¶ 94. The court of appeals here, therefore, relied only on the court of appeals' decision in Danbeck, 2000 WI App 26, 232 Wis. 2d 417, 605 N.W.2d 925. Although this court ultimately affirmed the court of appeals' decision, this court's opinion further explained and clarified the law relating to the exhaustion clause, and our opinion is dispositive here.
¶ 128. The majority opinion and the court of appeals' decision in this case both fail to follow Danbeck, *616and do not give the required meaning to the specific language in the State Farm policy. The policy states, "THERE IS NO COVERAGE UNTIL THE LIMITS OF LIABILITY OF ALL BODILY INJURY LIABILITY BONDS AND POLICIES THAT APPLY HAVE BEEN USED UP BY PAYMENT OF JUDGMENTS OR SETTLEMENTS." (Emphasis added.) This language is nearly identical to the language of the policy in Dan-beck, because both policies require that the policy limits be exhausted/used up "by payment of judgements or settlements." 2001 WI 91, ¶ 3. In Danbeck, this court found that the manner of exhaustion was important, because "settlement plus credit" did not constitute "payment." Id. at ¶ 13. Although we recognized that "settlement plus credit" has "the same practical effect as payment of full policy limits, it is not consistent with the plain language of the policy, which unambiguously requires exhaustion 'by payment of judgements or settlements,' not 'settlement plus credit.'" Id.
¶ 129. Following the same reasoning, I would uphold the plain language of the State Farm policy, and conclude that UIM coverage is not applicable here, because the liability policy limits have not been "used up by payment of judgements or settlements" for either Gillette or Ostlund. In fact, the record reflects that Unrau's insurer, MPIC, has paid Ostlund and his medical providers and subrogated health insurer a total of $26,833.51, and MPIC has not made any payments to, or for the benefit of, Gillette. Furthermore, there has been no payment of judgments or settlements here because Gillette and Ostlund will not be able to recover any amount of money for non-economic damages from Unrau, the so-called Manitoba underinsured motorist. Because there has been no payment whatsoever for Gillette and further payments are possible under the *617Manitoba policy for Ostlund and Gillette, I find it unreasonable, under Danbeck, to conclude that the limits have been "used up by payment of judgements or settlements." Applying Danbeck, I find a further reason to reverse the court of appeals' decision.
¶ 130. For these reasons, I respectfully dissent.
¶ 131. I am authorized to state that Justice DIANE S. SYKES joins this dissent.