Court Opinion

ID: 9670566
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:22:28.999475+00
Date Added: 2024-06-11T18:16:05.245757
License: Public Domain

STEINMETZ, J.
(dissenting). The decision of the majority is not new bad law but rather continues the error of Zepczyk v. Nelson, 35 Wis. 2d 140, 150 N.W.2d 413 (1967). I was not on the court in 1967, so this is my first opportunity to voice my dissent.
In Zepczyk, the court analyzed sec. 209.06(1), Stats. 1965.1 What the legislature meant to accomplish, this court abandoned. The legislature stated that no oral or written statement by an insured voided a policy unless :
“(1) the statement was false and made with the intent to deceive, or
“(2) the statement increased the risk or contributed to the loss.”
Zepczyk held at 145:
“Even if the insured had knowledge of the 100 percent clause in the application when he signed it, and that the statement was false and made with the intent to deceive or increased the risk or contributed to the loss, the insurance company could not avoid liability to an innocent third person on the grounds that the car was driven by a person other than the named insured and who could not be excluded under the provisions of sec. 204.34(1). Such a situation would permit an insurance company to avoid liability by inserting provisions in an application which they could not avoid under circumstances de*270scribed in sec. 204.34(1). The result would be entirely inconsistent with the statutory purposes of sec. 204.34 (1), which were well set forth in Pavelski v. Roginsld (1957), 1 Wis. 2d 345, 84 N.W.2d 84.”
That statement was made in the context of a motion for summary judgment review where there was conflicting evidence on material facts as to whether the insurance company waived or was estopped from relying upon the misstatements of the insured in his application. After discussing the waiver or estoppel issue, the court then made the general statement that even intentional misrepresentations were of no consequence to the insurer as applied to the innocent third persons.
The brother-driver in this case could not have been excluded as a driver covered by the policy; however, had the company known of his existence and the possibility that he might be even an occasional driver, the company could have refused to issue the policy. There is no law presently in Wisconsin compelling the issuance of a policy to a known bad risk. Such policy is issued only, if at all, in an assigned risk pool category and a commensurate premium is charged.
After the Zepczyk case, the provisions of sec. 209.06 (1), Stats. 1965, regarding false intentional statements increasing the risk were superfluous; applications taken by insurance companies now have no value except perhaps in denying the issuance of a policy or setting a proper premium. Once an untruthful applicant has been issued a policy, that person escapes personal liability or even any responsibility, since the balance is in favor of innocent third persons. Since Zepczyk, any insurance companies issuing coverage before making a thorough investigation as to the truthfulness of the risk covered have been fair game for deceit and deceitful applications. Such companies have been placing ill-found reliance on the seemingly clear language of sec. 209.06(1), *271and they have been wrong since the instant case also rewards deceit by allowing the insured to escape personal liability.
In life insurance policy cases, we hold deceit in the application voids the policy ab initio. Powalka v. State Mut. Life Assurance Co., 41 Wis. 2d 151, 163 N.W.2d 162 (1968); Calligaro v. Midland Casualty Co., 211 Wis. 319, 247 N.W. 846 (1933); Frozena v. Metropolitan Life Ins. Co., 211 Wis. 373, 247 N.W. 333 (1933). Those rulings seem inconsistent with Zepczyk and the instant ruling, at least as applied to innocent beneficiary third persons to the life insurance policies.
The majority has done a balancing of opposing interests. It has weighed the interests of third persons to a contract who are injured against the interests of an innocent party to the contract, the insurance carrier, and has found that the interests of the third persons must prevail. In so holding, the majority has disregarded as a matter of law the insured’s intentional deceitful statements made to fraudulently obtain the policy. I would not balance in favor of intentionally deceitful misrepresentations for the benefit of the injured third party and the insured who made the misrepresentations. It is an example of the unacceptable adage that the end justifies the means. In considering these opinions, it is not who is right but what is right.
I dissent and would reverse the court of appeals and overrule Zepczyk.
I am authorized to state that JUSTICE LOUIS J. CECI joins in this dissent.

 Sec. 209.06(1), Stats. 1965, has been revised and renumbered and is now sec. 631.11 (2).