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COURT OF APPEALS DECISION DATED AND RELEASED October 1, 1996 |
NOTICE |
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A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-3504
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT I
KAREN T. RUNGE,
Plaintiff-Appellant,
v.
ALLSTATE INSURANCE
COMPANY
and GARLAND E.
SCHULTHESS,
Defendants,
AMERICAN FAMILY MUTUAL
INSURANCE COMPANY,
Defendant-Respondent,
v.
WHEATON FRANCISCAN
SERVICES, INC.,
Defendant-Subrogee.
APPEAL from a judgment
of the circuit court for Milwaukee County:
MICHAEL P. SULLIVAN, Judge. Affirmed.
Before Fine, Schudson
and Curley, JJ.
PER
CURIAM. Karen Runge appeals from a summary judgment in favor
of American Family Insurance Company.
Runge raises one issue on appeal:
whether an insurance policy provision that denies motorist coverage when
bodily injury is sustained by a person while occupying a motor vehicle owned by
the insured but which vehicle is not specifically insured under the policy is a
valid exclusion or void as against public policy or against the purpose of §
631.43(1), Stats. The trial court ruled that it was not. We affirm.
The facts of this case
are not in dispute. Runge was injured
in an accident allegedly due to the negligence of an underinsured
motorist. At the time of the accident,
Runge was riding a moped that she owned and that was insured by American
Family. The moped policy provided
liability and uninsured motorist coverage but did not provide for any
underinsured motorist coverage.
Runge also had a policy
of insurance with American Family for a 1991 Toyota Corolla that contained
underinsurance coverage.[1] The policy contained the following
“drive-other-car” exclusion:
EXCLUSIONS
This coverage does not apply for bodily
injury to a person:
1.While
occupying, or when struck by, a motor vehicle that is not insured under
this policy, if it is owned by you or any resident of your
household.
(Emphasis
in original.) Runge filed a complaint
naming among others, American Family as a defendant, seeking to recover her
uncompensated damages through the Toyota policy based on the underinsured
motorist provision. American Family
moved for summary judgment on the grounds that there was no underinsured
coverage available to Runge from the Toyota policy, citing the above noted
exclusion. The trial court granted
summary judgment in favor of American Family, finding the exclusion relied on
by American Family to be enforceable.
We review decisions on
summary judgment de novo, applying the same methodology of the trial
court. Armstrong v. Milwaukee
Mut. Ins. Co., 191 Wis.2d 562, 568, 530 N.W.2d 12, 15 (Ct. App. 1995), aff'd,
___ Wis.2d ___, 549 N.W.2d 723 (1996).
Insurance-contract interpretation is a question of law, reviewed de
novo. See Taryn E.F.
v. Joshua M.C., 178 Wis.2d 719, 722, 505 N.W.2d 418, 420 (Ct. App.
1993).
In construing an
insurance policy, we interpret its plain language the way a reasonable person
in the position of the insured would have understood the words to mean. Schult v. Rural Mut. Ins. Co.,
195 Wis.2d 231, 237, 536 N.W.2d 135, 137 (Ct. App. 1995). Absent any ambiguity, we give the terms of a
statute their ordinary meaning. Id.
Runge was involved in an
accident with an underinsured motorist and thereby sustained bodily
injury. At the time of the accident,
Runge was driving a moped that she owned.
The moped was not insured under the Toyota policy issued to Runge, which
provided underinsured motorist coverage.
Plainly, the exclusionary language contained in the Toyota policy states
that no coverage is provided for injuries sustained in a vehicle owned by the
insured but not insured under the Toyota policy. Since the moped was owned by Runge and was not a covered vehicle
under the Toyota policy, the trial court correctly determined that the contract
is unambiguous and Runge cannot claim underinsured coverage under the Toyota
policy. See Schwochert v.
American Family Mut. Ins. Co., 139 Wis.2d 335, 350-351, 407 N.W.2d 525,
532 (1987) (“drive-other-car” exclusion notifies the insured with multiple
policies that one policy's underinsured motorist coverage will not apply to an
accident involving an automobile insured under another policy).
An insurance company can
limit the coverage of a policy issued by it as long as such limitation conforms
to the law and is not contrary to public policy. Runge argues that § 631.43, Stats., invalidates the cited exclusionary language and that
she should be allowed to stack the Toyota policy on the insurance provided to
the other driver. She also argues that
the exclusion is contrary to public policy.
We disagree. Section 631.43(1)
states, in pertinent part:
General.
When 2 or more policies promise to indemnify an insured against the same
loss, no “other insurance” provisions of the policy may reduce the aggregate
protection of the insured below the lesser of the actual insured loss suffered
by the insured or the total indemnification promised by the policies if there
were no “other insurance” provisions.
The
trial court ruled that § 631.43(1) does not invalidate the exclusionary
provision at issue, reasoning that § 631.43(1) only applies when multiple
policies promise to indemnify an insured, meaning a single insured, against the
same loss and since there were not multiple policies that promised to indemnify
a single insured, § 631.43(1) does not mandate coverage. We agree.
Section 631.43(1) does not apply here because Runge and the other driver
are two different insureds.
Runge attempts to
circumvent the plain meaning of § 631.43(1), Stats.,
by essentially arguing that the other driver is the “insured” person under her
underinsurance policy thereby attempting to fulfill the multiple policy and
single insured requirement of § 631.43(1).
This argument lacks merit.
Section 600.03(26), Stats.,
defines “insured” as “any person to whom or for whose benefit an insurer makes
a promise in an insurance policy.” The
Toyota's underinsured motorist coverage endorsement states:
As used in this endorsement:
1. Insured person
means:
a. You
or a relative.
b. Anyone
else occupying your insured car.
c.Anyone, other than a person or organization
claiming by right of assignment or subrogation, entitled to recover the damages
due to bodily injury to you, a relative or another
occupant of your insured car.
(Emphasis
in original.) The underinsurance
provision contained in the Toyota policy was not for the benefit of the other
driver—he was not an insured person under the policy. Further, there was no promise made by American Family to
indemnify the other driver because insurers do not promise to indemnify
non-insureds. Section 631.43(1) does
not invalidate the exclusion.
Finally, Runge argues
that public policy considerations preclude enforcement of the exclusion. She argues that a reasonable insured “would
expect coverage for compensatory damages relative to those injuries caused by
the underinsured operator.” We
disagree. The exclusion is clear, and
requires that those who seek coverage pay for it. This is not contrary to public policy. Invalidating the exclusion would benefit only those who seek
something for nothing, and this would be at the expense of other policyholders
who have purchased coverage appropriate to their circumstances.
By the Court.—Judgment
affirmed.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.