Wisconsin Case Law
ANDERSON v. CINCINNATI CASUALTY CO., 2006AP483 (Wis.Ct.App.
12-7-2006) DENNIS ANDERSON, KATHLEEN ANDERSON AND HANNAH
ANDERSON, A MINOR, Plaintiffs-Respondents-Cross-Appellants,
v. CINCINNATI CASUALTY COMPANY,
Defendant-Appellant-Cross-Respondent. Appeal No.
2006AP483. Court of Appeals of Wisconsin, District IV.
December 7, 2006.
APPEAL and CROSS-APPEAL from a judgment and an order of the
circuit court for Wood County: EDWARD F. ZAPPEN, JR.,
Judge. Affirmed.
Before Dykman, Vergeront and Higginbotham, JJ.
DYKMAN, J.
¶ 1 Cincinnati Casualty Company appeals from a
summary judgment order declaring that the policy it issued
to Dennis, Kathleen, and Hannah Anderson provided coverage
for an accident in which the Andersons were injured. The
Andersons cross-appeal from the order which also enforced a
reducing clause in their policy, thus limiting their
recovery from Cincinnati to $200,000. We conclude that the
Andersons’ Cincinnati insurance policy unambiguously
provides coverage in this case and also unambiguously
reduces the amount the Andersons may recover by the amount
the Andersons received from the tort-feasor’s insurance
policy, resulting in $200,000 of coverage. Accordingly, we
affirm.
Background
¶ 2 The material facts are undisputed. In December
2001, Dennis, Kathleen, Sarah, Emma, and Hannah Anderson
were involved in a car accident in which Sarah and Emma
were killed and Dennis, Kathleen, and Hannah were injured.
The driver of the other vehicle involved in the accident,
Richard Loewenhagen, carried a $300,000 single limit
liability policy through Wilson Mutual Insurance Company.
Wilson Mutual paid its limit to the Andersons.
¶ 3 The Andersons sought additional coverage under
the “uninsured motorists” provision in a policy issued to
them by Cincinnati Casualty Company, alleging the $300,000
received from Wilson Mutual was insufficient to compensate
them for their injuries. Cincinnati denied coverage because
Loewenhagen’s vehicle was not an “uninsured” vehicle under
their policy. The Andersons sued Cincinnati, seeking a
declaratory judgment that there was coverage for the
accident under their policy. Cincinnati moved for summary
judgment, arguing that there was no coverage and that if
there was, it was reduced by the amount the Andersons
received from Wilson Mutual. The circuit court concluded
that the Andersons’ insurance policy provided coverage for
the December 2001 accident and that the coverage was
reduced by the amount the Andersons received from Wilson
Mutual. Cincinnati appeals from the order declaring there
was coverage and the Andersons cross-appeal from the part of
the order limiting Cincinnati’s liability by the amount the
Andersons received from Wilson Mutual.
Standard of Review
¶ 4 A circuit court’s ruling on a motion for
declaratory judgment is within its discretion. Commercial
Union Midwest Ins. Co. v. Vorbeck, 2004 WI App 11,¶
7, 269 Wis. 2d 204, 674 N.W.2d 665. However, when the
resolution of a motion for declaratory judgment turns on a
question of law, such as the interpretation of an insurance
contract, our review is de novo. Id. Similarly, we
independently review a circuit court’s summary judgment
ruling. Id. Summary judgment methodology is well
established and need not be repeated here. Summary judgment
is appropriate only if there is no genuine issue as to any
material fact and the moving party is entitled to judgment
as a matter of law. WIS. STAT. § 802.08(2)
(2003-04).[fn1]
Discussion
? 5 Cincinnati argues that the policy it issued to
the Andersons does not provide coverage for the December
2001 accident. The provision in dispute states:
UNINSURED MOTORISTS COVERAGE FORBODILY INJURY AND PROPERTY
DAMAGESINGLE LIMIT -WISCONSIN-
. . . .
INSURING AGREEMENT
We will pay damages which a covered person is legally
entitled to recover from the owner or operator of an
uninsured motor vehicle because of:
1. Bodily injury:
a. Sustained by a covered person; and
b. Caused by an accident.
. . . .
The owner’s or operator’s liability for these damages
must arise out of the ownership, maintenance, or use of
theuninsured motor vehicle.
. . . .
“Uninsured motor vehicle” means a land motor vehicle or
trailer or any type:
1 To which no liability bond or policy applies at the
time of the accident.
2 To which a bodily injury liability bond or policy
applies at the time of the accident. In this case its
limit for bodily injury liability must be:
a. Less than the limit of liability for this coverage
specified by the Wisconsin financial responsibility law;
or
b. Reduced by payments to others injured in the accident
to less than the limit of liability for this coverage.
¶ 6 Cincinnati argues that there was no coverage in
this case because Loewenhagen’s vehicle is not an
“uninsured vehicle” under provision 2.b. Specifically,
Cincinnati contends that provision 2.b unambiguously
requires the tort-feasor’s policy be reduced by payments to
others from an amount greater than the coverage in the
Cincinnati policy to an amount less than the coverage in
the Cincinnati policy. The Andersons also contend the
policy is unambiguous, but assert that provision 2.b
requires only that the tort-feasor’s policy is reduced
through payments to others to less than the Cincinnati
policy, whether or not it began with a higher limit. We
agree with the Andersons.
¶ 7 We construe insurance policies to give effect to
the intent of the parties, employing the same rules of
construction that we use for contracts generally. Folkman
v. Quamme, 2003 WI 116,¶ 12, 264 Wis. 2d 617, 665
N.W.2d 857. We begin our analysis of an insurance policy
provision by determining whether it is ambiguous.
Id.,¶ 13.
¶ 8 An insurance provision is ambiguous “if it is
susceptible to more than one reasonable interpretation.”
Id. (citation omitted). We begin with the language of the
provision, which “is given its common, ordinary meaning,
that is, what the reasonable person in the position of the
insured would have understood the words to mean.”
Id.,¶ 17 (citation omitted). Even if the provision
itself is clear and unambiguous, we must view it in the
context of the entire policy to determine if it is rendered
ambiguous “by the organization, labeling, explanation,
inconsistency, omission, and text of other provisions.”
Id.,¶ 19. Likewise, “[s]ometimes it is necessary to
look beyond a single clause or sentence to capture the
essence of an insurance agreement. The language of a policy
should not be made ambiguous by isolating a small part from
the context of the whole.” Id.,¶ 21 (citation
omitted).
¶ 9 Turning to the language of the policy Cincinnati
issued to the Andersons, we conclude that the “Uninsured
Motorists”[fn2]provision is not ambiguous.[fn3]The
requirement that the liability policy issued to the
tort-feasor must be “[r]educed by payments to others injured
in the accident to less than the limit of liability for
this coverage” is not susceptible to more than one
reasonable interpretation. We read this provision as the
circuit court did: as requiring that the tort-feasor’s
policy be reduced below the limit of Cincinnati’s policy by
payments to others, regardless of its original starting
point.
¶ 10 Cincinnati relies on State Farm Mut. Auto. Ins.
Co. v. Langridge, 2004 WI 113, 275 Wis. 2d 35, 683 N.W.2d
75, as illustrating that the phrase “reduced by . . . to
less than” in the uninsured motorists provision requires
the tort-feasor’s policy to begin with a greater limit of
liability than provided under the insured’s policy.
Cincinnati’s reliance is misplaced.
¶ 11 In Langridge, an insurance policy defined
“underinsured motor vehicle” as one whose limits of
liability “a. are less than the limits of liability of this
coverage; or b. have been reduced by payments to persons
other than the insured to less than the limits of liability
of this coverage.” Id.,¶ 8. The plaintiff sought
coverage under section b. because the tort-feasor’s limit
of liability, which was originally greater than the limit
of the policy at issue, was reduced to less than the limit
of the policy after payments to the deceased’s estate.
Id.,¶ 28-31. If the tort-feasor’s policy had begun
with a limit less than the insured’s, coverage would have
been provided under section a. Id.,¶ 39. Thus, the
Langridge policy provided coverage under two scenarios: if
the tort-feasor’s policy limit began as less than the
insured’s policy limit (section a.), and when the
tort-feasor’s policy limit was reduced to less than the
insured’s limit by payments to other parties (section
b.).[fn4]
¶ 12 Here, the Cincinnati policy does not offer both
options presented in Langridge. Rather, the Cincinnati
policy provides coverage if the tort-feasor’s policy limit
is: “a. Less than the limit of liability for this coverage
specified by the Wisconsin financial responsibility law; or
b. Reduced by payments to others injured in the accident to
less than the limit of liability for this coverage.” Unlike
the Langridge policy, the Cincinnati policy does not
separate situations in which the tort-feasor’s policy (1)
began with a lower limit than the insured’s, or (2) was
reduced to an amount less than the insured’s. The
Cincinnati policy does not provide a corollary to its
“reduced by . . . to less than” language as a defining
contrast, as the Langridge policy did.[fn5]Thus, Langridge
does not dictate that the Cincinnati policy only provides
coverage if the tort-feasor’s policy began with a limit
higher than the insured’s policy limit.
¶ 13 Cincinnati also argues that the definition of
“uninsured motor vehicle” requires a tort-feasor’s policy
to have a policy limit higher than Cincinnati’s limit
because any other reading renders the phrase “reduced by .
. . to less than” surplusage and is therefore an
impermissible interpretation. See Hydrite Chem. Co. v. Aetna
Cas. & Sur. Co., 220 Wis. 2d 26, 41, 582 N.W.2d 423
(Ct.App. 1998). We disagree. Cincinnati’s interpretation of
its provision requires we add the phrase “from more than
the limit of liability for this coverage,” to its policy so
that it reads: “Reduced by payments to others injured in the
accident from more than the limit of liability for this
coverage to less than the limit of liability for this
coverage.” We will not write in language to meet
Cincinnati’s interpretation; “[c]ourts interpret insurance
policies that do exist, not those that could have or should
have existed.” Folkman, 264 Wis. 2d 617,¶ 34.
Whatever Cincinnati’s intent in drafting the policy, the
uninsured motorists provision’s language is clear: it
provides coverage when, as here, the tort-feasor’s policy is
reduced to less than the limits of Cincinnati’s policy
through its payments to others.
¶ 14 Next, we turn to the Andersons’ cross-appeal
from the circuit court’s summary judgment order enforcing
the reducing clause in the Andersons’ policy. The Andersons
argue that the reducing clause is ambiguous and therefore
unenforceable, and, if it is enforceable, that the circuit
court’s ruling was premature because the reducing clause
cannot be properly applied until damages have been
apportioned. We disagree.
¶ 15 We begin our inquiry by determining whether the
reducing clause is ambiguous, whether standing alone or in
the context of the policy as a whole.[fn6]Folkman, 264 Wis.
2d 617,¶¶ 13-21. We begin with the language
of the clause. Id.,¶ 17. The reducing clause in the
uninsured motorists endorsement of the Andersons’
Cincinnati policy states:
LIMIT OF LIABILITY
The limit of liability shown in the Declarations for
Uninsured Motorists Coverage is our maximum limit of
liability for all damages resulting from any one accident.
This is the most we will pay regardless of the number of:
1 Policies involved;
2 Covered persons;
3. Vehicles or premiums shown in the Declarations; or
4. Vehicles involved in the accident.
. . . .
Additionally, the limits of liability shall be reduced by
all sums:
1. Paid because of the bodily injury by or on behalf of
persons or organizations, including but not limited to
operators of uninsured motor vehicles, who may be legally
responsible.
¶ 16 We conclude that the language of the reducing
clause is clear and unambiguous. Indeed, neither party has
argued otherwise. The Andersons contend, however, that the
reducing clause is rendered ambiguous within the context of
the entire policy. However, they do not point to a
conflicting provision that would raise an alternative
meaning; rather, they assert that the organization and
length of the policy renders it a confusing maze, which a
reasonable insured would be unable to understand. We are
not persuaded that the Cincinnati policy is unintelligible.
¶ 17 While the policy is lengthy at forty-nine
pages, it is not disorganized. The policy begins with a
two-page endorsement,[fn7]which identifies the named
insureds, the vehicles insured, and the types of coverage
provided for each vehicle and their individual premiums.
The vehicle involved in the accident at issue has a premium
listed for “Uninsured Motorists Combined Single Limit BI
Only $500,000 Each Accident.” Following the declarations
pages is a two-page endorsement titled “Miscellaneous Type
Vehicle Endorsement.” The second endorsement is titled
“Uninsured Motorists Coverage For Bodily Injury And
Property Damage Single Limit Wisconsin,” and runs five
pages in length. Next is the Table of Contents, followed by
fourteen pages of “Family Auto Policy Provisions.” Finally,
the policy has three pages of “Amendment of Policy
Provisions — Wisconsin,” a page of contact
information, two pages on “Additional insured —
Living Trusts and Their Executors, Administrators or
Trustees,” two pages of the Cincinnati privacy policy, and a
one-page “Loss Payable Clause.”
¶ 18 The first problem identified by the Andersons
is that the declarations page does not identify the
reducing clause nor define “uninsured motorists combined
single limit BI Only $500,000 Each Accident.” We disagree
that those omissions render the reducing clause
contextually ambiguous. A declarations page need not
identify the existence of a reducing clause to avoid
ambiguity. See Dempich v. Pekin Ins. Co., 2006 WI App
24,¶¶ 14-16, 289 Wis. 2d 477, 710 N.W.2d 691.
Contrary to the Andersons’ assertions, the declarations page
clearly identifies uninsured motorists coverage as section
C, and lists the “Forms and Endorsements” by number on the
second page. Next, the Table of Contents lists “Part C” as
“Uninsured Motorists Coverage,” and lists its location as
page 7. Under the same clear heading on page 7, the policy
directs the insured to “refer to respective state Uninsured
Motorist Coverage Endorsement.” As noted, the Wisconsin
uninsured motorist endorsement is the second endorsement to
the policy, and lists the “Limit of Liability,” quoted
above, on page three. A reasonable insured would easily
find the reducing clause in the uninsured motorist
provision and understand it to limit Cincinnati’s liability.
¶ 19 The Andersons also argue that Cincinnati’s use
of the heading “Uninsured Motorists,” when in fact the
provision provides coverage when the motorist is either
“uninsured” or “underinsured,” renders the reducing clause
ambiguous. We disagree. The language of the provision, not
its heading, controls our analysis. Progressive N. Ins. Co.
v. Hall, 2006 WI 13,¶ 31, 288 Wis. 2d 282, 709
N.W.2d 46. Further, we fail to see how a heading of
“uninsured” rather than “underinsured” would mislead the
Andersons into believing the reducing clause did not
function by its clear terms. In sum, there are no provisions
identified by the Andersons nor uncovered on our own review
that contradict the reducing clause or lead a reasonable
insured to believe it is no longer in effect.
¶ 20 Finally, the Andersons argue that even if the
reducing clause is unambiguous and enforceable, the circuit
court prematurely granted summary judgment to Cincinnati on
this issue because the court did not yet know how much each
plaintiff received from the $300,000 settlement from Wilson
Mutual. The Andersons offer various hypothetical monetary
divisions in which they believe they may recover more than
the $200,000 awarded to them by the circuit court. The
problem with the Andersons’ argument, however, is that any
payment to them above the $200,000 awarded by the circuit
court contravenes the reducing clause in their policy. That
clause provides that the maximum the policy will pay,
regardless of the number of covered persons injured in an
accident, is $500,000. The $500,000 limit is reduced by
payments received from another policy, no matter which
covered person receives those payments. Thus, the $500,000
is reduced by $300,000, regardless of how much each
Anderson receives of that $300,000. Accordingly, there is
$200,000 remaining in the Cincinnati policy. While this may
not fully compensate the Andersons, it is the limit of
their policy. We therefore affirm.
By the Court. — Judgment and order affirmed.
Not recommended for publication in the official report.
[fn1] The Andersons argue that the circuit court improperly
granted summary judgment to Cincinnati because the
Andersons had asked for a declaratory judgment, not summary
judgment, to establish there was coverage under their
policy. The Andersons acknowledge that Cincinnati then
moved for summary judgment, but contend summary judgment
was inappropriate at this stage because there were not
enough evidentiary materials submitted to allow the court
to make a summary judgment ruling. We disagree. First, we
note that both declaratory judgments and summary judgments
are proper procedural devices for resolving insurance
disputes. See, e.g., Commercial Union Midwest Ins. Co. v.
Vorbeck, 2004 WI App 11,¶ 7, 269 Wis. 2d 204, 674
N.W.2d 665. We also note that, in this case, our review is
limited to questions of law centering on the interpretation
of the Andersons’ insurance policy. See id. Finally, the
parties submitted the insurance policy and documentation of
the settlement the Andersons reached with Wilson Mutual
along with their motions, supported by affidavits. We
conclude that the circuit court properly interpreted the
Andersons’ policy and that the issue of whether it did so
through a declaratory judgment or a summary judgment order
is irrelevant.
All references to the Wisconsin Statutes are to the 2003-04
version unless otherwise noted.
[fn2] The “Uninsured Motorists” heading in the Cincinnati
policy is counterintuitive because it provides coverage for
vehicles covered by another liability policy. A provision’s
title, however, is not controlling. See Progressive N. Ins.
Co. v. Hall, 2006 WI 13,¶ 31, 288 Wis. 2d 282, 709
N.W.2d 46. Instead, we construe the language of the
provision as written in the policy. Folkman v. Quamme, 2003
WI 116,¶ 33, 264 Wis. 2d 617, 665 N.W.2d 857. Thus,
we need not address the parties’ arguments over whether
Cincinnati’s uninsured motorists provision is “typical” or
“atypical” of underinsured or uninsured motorists coverage
under the Wisconsin statutes.
[fn3] The circuit court did not state whether it found the
provision ambiguous or unambiguous, saying: “And first of
all, I find it — I find — I don’t know if I
want to call it an ambiguity. I just didn’t understand it.”
However, neither party argues that the uninsured motorists
provision is ambiguous. Instead, both argue that the
provision’s meaning is clear from its language, although
they disagree on that meaning. In any event, we conclude
upon our independent review that the provision is
unambiguous both standing alone and contextually.
[fn4] The Langridge court denied coverage under section b.
because the tort-feasor’s policy limit was reduced by
payments to the insured, not to persons other than the
insured. State Farm Mut. Auto. Ins. Co. v. Langridge, 2004
WI 113,¶ 55, 275 Wis. 2d 35, 683 N.W.2d 75.
[fn5] Cincinnati argues that the notice it sent to the
Andersons offering coverage when the tort-feasor’s policy
limit is originally lower than the insured’s provides the
contrast within the Langridge policy. The two situations,
however, are inapposite. In Langridge, the two provisions
were within the same policy. Here, the notice sent to the
Andersons is not part of the policy.
Cincinnati also argues that the circuit court erred in
declining to consider the notice Cincinnati sent to the
Andersons because such evidence is relevant to the intent
of the parties in executing the insurance policy.
Cincinnati argues that the fact that the Andersons declined
the coverage offered in the notice indicates that a
reasonable insured in the position of the Andersons would
believe they did not have the coverage they now seek, which
they argue is essentially the coverage offered in the
notice. We disagree. We end our inquiry upon concluding
that the policy is not ambiguous and strictly apply its
terms. See Folkman, 264 Wis. 2d 617,¶ 13 (“If there
is no ambiguity in the language of an insurance policy, it
is enforced as written, without resort to rules of
construction or applicable principles of case law.”).
[fn6] The Andersons contend that the circuit court erred by
enforcing the reducing clause without conducting an
analysis of whether the reducing clause is contextually
ambiguous. Our review of this issue, however, is de novo.
On our independent review of the record, we conclude that
the reducing clause is unambiguous as read alone and
contextually.
[fn7] The policy in the record contains fourteen pages of
endorsements, including previous and subsequent versions.
The declaration in effect on the date of the accident,
dated November 12, 2001, is two pages in length.