Court Opinion

ID: 9684575
Source: CourtListenerOpinion
Date Created: 2023-08-24 14:02:17.76281+00
Date Added: 2024-06-11T18:17:56.924585
License: Public Domain

*591PATIENCE DRAKE ROGGENSACK, J.
¶ 80. {concurring in part, dissenting in part). I join the majority opinion except for those portions of that opinion that interpret the stipulation between G. Vaughn Stone and Christine Stone (the Stones) and Acuity, a Mutual Insurance Company (Acuity), as requiring Acuity to provide $500,000 in underinsured motorist (UIM) payments to the Stones under the umbrella policy Acuity issued. I respectfully dissent from the majority opinion's discussion and conclusions relative to the stipulation for three reasons: (1) the stipulation is ambiguous as to the parties' intent; (2) the majority opinion unreasonably interprets the parties' stipulation to effect an unwarranted penalty against Acuity; and (3) in the alternative, even were I to agree with the majority opinion's interpretation of the stipulation, fairness requires that the penalty to which Acuity should be subjected for failing to comply with Wis. Stat. § 632.32(4m)(a)l be referred to the circuit court so that Acuity can bring a motion pursuant to Wis. Stat. § 806.07(1), to request relief from the stipulation, in order that Acuity be treated the same as would any other insurer who did not give the notice required by § 632.32(4m)(a)l.
I. BACKGROUND
¶ 81. The background facts relating to the stipulation between the Stones and Acuity are quite brief. The parties agreed after the circuit court had denied Acuity's motion for summary judgment and had denied Acuity's motion for reconsideration, that if the decision of the circuit court was reversed, the level of damages sustained by the Stones would require Acuity to pay an additional $500,000.
¶ 82. In its denial of Acuity's motion for summary judgment, the circuit court decided that UIM coverage *592was afforded because the umbrella policy was contextually ambiguous. As the circuit court explained:
We — The umbrella policy here — The question is — is it the — insured left with the impression that the umbrella policy is excess over all other available insurance?
And I — I think it's a very close call, but I think that the Court, reviewing everything, is persuaded by the presentation and argument of the plaintiff, that there is an ambiguity in this policy that would work to the detriment of the insured, and I am going to deny the motion for summary judgment and the motion filed by Acuity.
I think that the other issues, being whether there is — there is — there are damages that have been — that —I—it seems to me, that based on what you have alleged the medicals to be, the loss of employment to be, the potential, here, that there is a potential for — for the coverage, and there is an ambiguity in the policy such that the Court would not dismiss the action against Acuity.
Because of that contextual ambiguity in the policy, subject to the reducing clause which was upheld as part of the circuit court's denial of Acuity's motion for reconsideration, the circuit court concluded that $1,000,000 of potential UIM coverage existed under the umbrella policy.
¶ 83. The Stones and Acuity stipulated to damages, rather than taking the case to trial where that issue would have been decided by a jury. The Stones had received $500,000 from the tortfeasor's insurer. The amount the parties agreed was yet to be paid if the $1,000,000 umbrella provided UIM coverage was *593$500,000. The stipulation relieved the Stones from their burden of proving the extent of their damages in a case where damages were not seriously contested by Acuity, and it moved the legal issue on which the circuit court's decision rested, i.e., that the policy was contextually ambiguous, forward to an appeal.
II. DISCUSSION
¶ 84. The question that is presented is whether the Stones and Acuity intended to agree that if an appellate court applied the court of appeals decision in Rebernick v. Wausau General Insurance Company, 2005 WI App 15, 278 Wis. 2d 461, 692 N.W.2d 348, to the umbrella policy and concluded that Acuity had not provided the notice required by Wis. Stat. § 632.32(4m)(a)l, Acuity would pay the Stones $500,000.
A. Standard of Review
¶ 85. "The construction of a stipulation is a question of law" subject to our independent review. Duhame v. Duhame, 154 Wis. 2d 258, 262, 453 N.W.2d 149 (Ct. App. 1989). We also determine whether a stipulation is ambiguous as a question of law. See Flejter v. Estate of Flejter, 2001 WI App 26, ¶¶ 28-30, 240 Wis. 2d 401, 623 N.W.2d 552.
B. Stipulations
1. General principles
¶ 86. A stipulation is ambiguous if it is "reasonably or fairly susceptible to more than one construction." Id., ¶ 28. Stipulations are to be construed consis*594tent with the intention of the parties at the time they entered into the stipulation and in "the spirit of justice, . . . and should not be construed technically so as to defeat the purposes for which they were made." Pierce v. Physicians Ins. Co. of Wis., Inc., 2005 WI 14, ¶ 31, 278 Wis. 2d 82, 692 N.W.2d 558 (citation omitted).
¶ 87. When the parties' intent about all potential applications of a stipulation is not apparent from the face of the stipulation, one must look to the context in which the stipulation was made. The context includes the procedural posture of the case, as well as the parties' purpose in entering into the stipulation. Id., ¶ 32. An examination and understanding of the context in which the stipulation was made is extremely important because a stipulation must, above all, "give effect to the intention of the parties." D'Angelo v. Cornell Paperhoard Prods. Co., 33 Wis. 2d 218, 227, 147 N.W.2d 321 (1967). When a stipulation is entered into merely as a procedural facilitation, the stipulation should be narrowly construed. Id.
¶ 88. Although we have indicated that stipulations may have the attributes of a contract, "they are not governed by contract law and may be set aside, in the court's discretion, for any of the reasons specified in Rule 806.07(1), Stats." Kocinski v. Home Ins. Co., 154 Wis. 2d 56, 73, 452 N.W.2d 360 (1990) (citation omitted).
2. Stones and Acuity's stipulation
¶ 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 *595to 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)l, 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)l 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)l. 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)l, 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.
*596¶ 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. 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. 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.
¶ 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)l. 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. Accordingly, no penalty was addressed by the majority opinion in Rebernick. Even *597the 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)l 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)l.
¶ 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)l. 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 *598different 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)l 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.
3. Fairness
¶ 98. Because my construction of the stipulation is a minority opinion, it cannot provide the relief Acuity seeks. However, the majority opinion treats Acuity more harshly than it treats any other insurer that has *599failed to comply with Wis. Stat. § 632.32(4m)(a)l because of the way in which the majority opinion interprets the stipulation. In my view, fairness requires that Acuity be treated no better and no worse than any other insurer that has failed to comply with § 632.32(4m)(a)l.
¶ 99. Wisconsin Stat. § 806.07 provides an avenue for a circuit court to grant relief from a stipulation, as the majority opinion interprets it, and thereby treat Acuity as any other insurer that has failed to comply with Wis. Stat. § 632.32(4m)(a) 1. Section 806.07(1) provides:
On motion and upon such terms as are just, the court, subject to subs. (2) and (3), may relieve a party or legal representative from a judgment, order or stipulation for the following reasons:
(a) Mistake, inadvertence, surprise, or excusable neglect;
(b) Newly-discovered evidence which entitles a party to a new trial under s 805.15(3);
(c) Fraud, misrepresentation, or other misconduct of an adverse party;
(d) The judgment is void;
(e) The judgment has been satisfied, released or discharged;
(f) A prior judgment upon which the judgment is based has been reversed or otherwise vacated;
(g) It is no longer equitable that the judgment should have prospective application; or
(h) Any other reasons justifying relief from the operation of the judgment.
*600In my view, fairness requires consideration of Wis. Stat. § 806.07(1).
III. CONCLUSION
¶ 100. I respectfully dissent from the majority opinion's discussion and conclusions relative to the stipulation for three reasons: (1) the stipulation is ambiguous as to the parties' intent; (2) the majority opinion unreasonably interprets the parties' stipulation to effect an unwarranted penalty against Acuity; and (3) in the alternative, even were I to agree with the majority opinion's interpretation of the stipulation, fairness requires that the penalty to which Acuity should be subjected for failing to comply with Wis. Stat. § 632.32(4m)(a)l be referred to the circuit court so that Acuity can bring a motion pursuant to Wis. Stat. § 806.07(1), to request relief from the stipulation, in order that Acuity be treated the same as would any other insurer who did not give the notice required by § 632.32(4m)(a)l.

 Majority op., ¶ 37.

 Majority op., ¶ 71.

 Majority op., ¶ 76.

 Majority op., f 38.