author:
      DAVID T. PROSSER, J.
      SHIRLEY S. ABRAHAMSON, C.J.

text:
    Tammy Kolupar, Plaintiff-Appellant-Petitioner, v. Wilde Pontiac Cadillac, Inc. and Randall Thompson, Defendants-Respondents.
    Supreme Court

      No. 02-1915.

      Oral argument March 12, 2004.

      Decided July 13, 2004.

    2004 WI 112
    (Also reported in 683 N.W.2d 58.)

      For the plaintiff-appellant-petitioner there were briefs by Paul M. Erspamer and Lisko & Erspamer, S.C., Waukesha, and oral argument by Paul M. Er-spamer.

    For the defendants-respondents there was a brief by James W. Hammes, Kathryn Sawyer Gutenkunst, and Cramer, Multhauf & Hammes, LLP, Waukesha, and oral argument by Kathryn S. Gutenkunst.

    An amicus curiae brief was filed by Mary Catherine Fons, Stoughton, on behalf of Fons Law Office; Judy Tomczak, Madison, on behalf of Tomczak Law Office, LLC; Jejf Scott Olson, Madison, on behalf of The Jeff Scott Olson Law Firm, S.C.; and Edward W. Harness, Milwaukee, on behalf of the Consumer Guardian Group.
    An amicus curiae brief was filed by De Vonna Joy, Big Bend, on behalf of the Consumer Justice Law Center; and Gwendolyn G. Connolly, Milwaukee, on behalf of the Law Office of Gwendolyn G. Connolly.
    An amicus curiae brief was filed by Jon G. Furlow and Michael Best & Friedrich, LLP, Madison, on behalf of Fairfield Resorts, Inc., and oral argument by Jon G. Furlow.

    An amicus curiae brief was filed by Stephen E. Meili and Marissa Santiago, Madison, on behalf of The Consumer Law Litigation Clinic of the University of Wisconsin Law School; Peg Lautenschlager and Cynthia Hirsch, Madison, on behalf of the Wisconsin Department of Justice; and Mitchell Hagopian, Madison, on behalf of The Wisconsin Coalition for Advocacy, Inc.
    An amicus curiae brief was filed by Colleen D. Ball, Wauwatosa, and Jeffrey R. Myer, Milwaukee, on behalf of Legal Action of Wisconsin, and oral argument by Jeffrey R. Myer.

   DAVID T. PROSSER, J.

¶ 1. This is a review of a published decision of the court of appeals. In the beginning this case involved a suit by Tammy Kolupar (Kolupar) against Wilde Pontiac Cadillac (Wilde) and one of Wilde's employees, Randall Thompson, over the sale of an unsatisfactory used car. Kolupar's underlying claims are no longer at issue; Kolupar and Wilde settled, and the circuit court entered a default judgment against Thompson. The primary question in this review is whether the circuit court properly exercised its discretion in awarding reasonable attorney fees and costs.

¶ 2. Kolupar argues that the circuit court failed to apply the proper legal analysis when it concluded that $15,000 was an appropriate award for fees and costs. In her view, the circuit court: (1) failed to expressly consider factors approved by this court for determining reasonable attorney fees; (2) failed to apply the "lodestar" method for determining reasonable attorney fees; and (3) erred by considering the recommendation of a discovery referee appointed by the court. Kolupar asserts that if the court had considered and applied the appropriate law, it would have determined that a substantially higher award of attorney fees was appropriate.

¶ 3. Wilde counters that the circuit court did in fact undertake an appropriate analysis and therefore did not erroneously exercise its discretion. Wilde posits that this court should defer to the circuit court's decision.

¶ 4. The circuit court's primary explanation for the $15,000 award for fees and costs indicates that the court believed Kolupar pleaded an excessive number of claims in her complaint. The court also stated that this "over-pleading" at the outset caused the case to be "over-tried" and discovery to be "well over-done." While both Kolupar and Wilde seem to acknowledge that each spent more time litigating this small case than the case deserved, they each pin the blame on the other side's unreasonableness as the source of the excessive litigation.

¶ 5. We uphold the circuit court's decision to award $15,000 in attorney fees. The court's explanation mirrored the sparse information it had available to make its decision. If Kolupar had properly submitted the documentation supporting the number of hours reasonably expended, then the court's explanation would likely not withstand scrutiny. However, the circuit court's explanation comported with the type and amount of information it had in the absence of such documentation. As a result, the circuit court's explanation reflected Kolupar's unmet burden to demonstrate the reasonableness of the requested award. By contrast, although the circuit court understood that substantial costs were incurred, it did not explain why it concluded that no costs were appropriate. We therefore remand the issue to the circuit court to address the issue of costs.

BACKGROUND

¶ 6. On March 29, 2000, Kolupar sued Wilde and Thompson in Milwaukee County Circuit Court to recover damages allegedly incurred in connection with the purchase of a 1985 Mercedes Benz 190E. According to Kolupar's civil complaint, Thompson, Wilde's new car manager, accepted Kolupar's 1993 Pontiac Sunbird in exchange for the Mercedes, and represented that the Mercedes was in good mechanical condition. The transaction took place in March of 1994 at the Wilde dealership, but a court has never formally determined whether Thompson was acting as an agent of Wilde or whether he was "curbing cars" on his own.

¶ 7. Kolupar asserted that both Wilde and Thompson were liable for fraud, federal and state odometer law violations, breach of express and implied warranties, and violations of Wisconsin's motor vehicle statute, Wis. Stat. § 218.01 (1993-94). Wilde responded to the complaint by denying any involvement in the transaction. In May 2001, Kolupar dropped the federal odometer claim — which permitted treble damages— when Wilde moved for summary judgment based upon the federal claim's two-year statute of limitation. If the case had gone to trial, the main factual issue likely would have been whether Thompson acted under Wilde's actual or apparent authority.

¶ 8. There was no trial. In December of 2002, two and one-half years after Kolupar initiated suit, Wilde and Kolupar settled the underlying claim for $6,600 dollars plus taxable costs. Between the inception of litigation and this settlement, the parties litigated the suit vigorously through numerous motions, near-constant correspondence, and headstrong, sometimes obstinate behavior regarding discovery matters that ultimately necessitated the appointment of a discovery referee.

¶ 9. By the time the parties settled, Kolupar asserted that she had accumulated approximately $41,000 in attorney fees and almost $11,000 in litigation expenses. Along with the $6,600 settlement, Wilde offered $15,000 in attorney fees, but Kolupar rejected that offer. Thus, the settlement left unresolved the issue of attorney fees. Since the $6,600 plus taxable costs for the underlying claim encompassed Kolupar's § 218.01(9) claim, and since that section provides that a court has authority to award "actual costs, including a reasonable attorney fee," Milwaukee County Circuit Judge Thomas R. Cooper, concluded that attorney fees were appropriate in this case.

¶ 10. Judge Cooper held hearings on May 13 and May 14, 2002, in order to resolve the issue of attorney fees and costs. The court received testimony from Frank T. Crivello (a former circuit judge who served as a discovery referee), Kolupar, Paul Erspamer (Kolupar's attorney), and Patrick Donahue (vice-president of Wilde). The testimony focused primarily on establishing each party's culpability for the escalating litigation expenses incurred by the parties.

¶ 11. Near the conclusion of the hearing, Judge Cooper addressed the billing documentation submitted by Kolupar. Wilde asked that Judge Cooper refuse to consider the written information because Kolupar filed the billing information in violation of a local rule. Milwaukee County Circuit Court Rule 365 directs that a party who wishes to submit any documents in support of a motion (other than a motion for summary judgment or dismissal) must provide opposing counsel with the materials no later than 10 days before the hearing date. Wilde did not receive the invoice until Friday, May 10, 2002, for a Monday, May 13, 2002, hearing. See Milwaukee Cty. Ct. R. 365(a).

¶ 12. Judge Cooper agreed with Wilde, holding that Kolupar's submission failed to comport with local rules. As a sanction for noncompliance, Judge Cooper declined to consider the untimely filed material in his decision.

¶ 13. At the conclusion of the hearing, Judge Cooper awarded Kolupar $15,000 in fees and costs. Judge Cooper stated that he was relying, at least in part, on the recommendation of Crivello. Crivello testified at the hearing that:

In thirty years in [the] practice of law, as well as fifteen years as a circuit judge myself[J I have never seen a $6,000.00 case grow barnacles the way this one has.
I have served as special master in cases on numerous occasions here in Milwaukee County since leaving the bench. The only case that I have ever seen that approached this magnitude was... a multi-million dollar insurance case with fifteen defendants, including one British defendant. So without. .. going through every page of the several thousand pages I have in my possession, I recall three or four instances where I sanctioned [Kolupar's attorney] myself by barring the presentation of testimony, or documents, or witnesses.
Having examined the case in terms of discovery and evidence over the course of three hearings and months of correspondence, I think that the discovery and evidentiary issues in this case were grossly inflated. This was a two-person transaction for an automobile. ...
... So I would ... adopt the offer in judgment and award the plaintiff the $6,600.00, which apparently she has accepted, and I would award $15,000.00 from the defendant to the plaintiff in fees. And that is how I would dispose of this case if I were asked to.
I am troubled — and I don't mean to be offensive to these lawyers, who[m] I have a great deal of professional respect for.... And I don't think the case is worth much more than [$] 15,000 in fees, frankly. Although I know both sides spent a lot more time than that.
When lawyers decide to do that, then they bear the onus of that decision.

¶ 14. On the second day of the hearing, after testimony and argument, Judge Cooper explained his decision as follows:

There is no question this case was over-tried. Discovery was over — well over-done. It was over-[pled] right from the get-go on the complaint. There was the shotgun pleading where everything was [pled] against Wilde short of conquering Europe during World War II.
So that was the framework, and the daunting discovery mountain was created right from the get-go. And that was based upon the plaintiffs pleading. A lot of that I think was over-pled, but it only applies as to what are reasonable attorney's fees during the course of a contentious non-cooperative discovery process.
Like [counsel] said, this matter was over-tried. The long and short of it, it comes down to — I appreciate [the discovery referee's] recommendation. I think it's appropriate. I happen to concur with it.
In my discretion I believe that there is entitlement for reasonable attorney's fees on behalf of the plaintiff. Reasonable attorney's fees in my mind of $15,000....
.... There was way too much work done, and there should have been a focus, and much earlier in the proceedings. And there is nobody here with clean hands, so that's the order of the Court. Joint and several.

¶ 15. When Kolupar asked Judge Cooper to clarify the issue of costs, he responded that $15,000 included both fees and costs.

¶ 16. After her motion for reconsideration was denied by the circuit court, Kolupar appealed. A divided court of appeals voted to uphold the circuit court's determination. It concluded that Judge Cooper did not err by excluding Kolupar's billing documentation for untimely filing, did not err by considering the recommendation of the discovery referee, applied the correct legal standard in reaching its conclusion as to attorney fees, and did not deny taxable costs. In dissent, Judge Ralph Adam Fine concluded that Judge Cooper did not consider the appropriate factors in reaching a reasonable attorney fee award, and the court should have relied on Kolupar's billing documentation rather than the recommendation of the discovery referee.

DISCUSSION

¶ 17. Under the American Rule, the parties to a lawsuit bear the cost of their own attorney fees absent legislative authorization to shift costs. Buckhannon Bd. and Care Home, Inc. v. West Virginia Dep't of Health & Human Res., 532 U.S. 598, 602 (2001); Hensley v. Eckerhart, 461 U.S. 424, 429 (1983); Kremers-Urban Co. v. Am. Employers Ins. Co., 119 Wis. 2d 722, 744, 351 N.W.2d 156 (1984) ("Each party to a lawsuit, under [the American Rule], should bear its own costs of litigation."). The Wisconsin legislature has authorized courts to award costs and attorney fees to successful litigants in many contexts. See, e.g., Wis. Stat. § 100.18(ll)(b) (2001-02) (Wisconsin Deceptive Trade Practices Act (DTPA)); Wis. Stat. § 218.0171(7) (2001-02) (Wisconsin Lemon Law); 425.308(1-2) (2001-02) (Wisconsin Consumer Act (WCA)).

¶ 18. Kolupar's complaint included a claim for relief pursuant to Wis. Stat. § 218.01(9)(b), now renumbered as Wis. Stat. § 218.0163(2). Chapter 218 of the Wisconsin Statutes regulates the automobile business in many respects. See Dep't of Transp. v. Transp. Comm'n, 111 Wis. 2d 80, 92, 330 N.W.2d 159 (1983). Part of its design is "to protect Wisconsin buyers of motor vehicles from fraud." Id. at 94 (citing State v. Helwig, 262 Wis. 299, 301, 54 N.W.2d 907 (1952)). To this end, § 218.01 provides that "retail buyers" who suffer pecuniary loss may recover damages in court. In 1994, the time of the relevant transaction in this case, § 218.01(9)(b) provided as follows:

Any retail buyer suffering pecuniary loss because of a violation by a licensee of sub.(3)(a)4., 5., 6., 8., 9., 10., 11., 18. or 31. may recover damages for the loss in any court of competent jurisdiction together with costs, including reasonable attorney fees.

¶ 19. An interesting question, though one not presented by the present case, is whether the word "may" in § 218.01(9)(b) indicates that the decision to award or not award costs and attorney fees is discretionary. Unlike some fee-shifting statutes, § 218.01(9)(b) does not use the word "shall," which would indicate that costs, including attorney fees, must be awarded to successful litigants. However, we note that the language does not state that the court may award costs, including reasonable attorney fees, but rather provides that a retail buyer suffering pecuniary loss for a recognized violation "may recover damages for the loss in any court of competent jurisdiction together with costs, including reasonable attorney fees." Wis. Stat. § 218.01(9)(b) (emphasis added). It would certainly be odd for a circuit judge to decline to impose damages once it has been determined that the plaintiff suffered pecuniary loss as a result of a listed violation by the defendant. Given that the statute directs that the court "may" award damages "together with costs, including reasonable attorney fees," the statute may dictate that where damages are awarded, costs— including attorney fees — should follow.

¶ 20. In this case, Kolupar's recovery of $6,600— plus taxable costs — resulted from Wilde's offer of settlement, as opposed to a factfinder's determination that Kolupar met the statutory threshold entitling her to recover under § 218.01(9)(b). The settlement was in satisfaction of Kolupar's underlying claims, including her § 218.01(9) (b) claim. Even if the award of costs were at the discretion of the court, Judge Cooper said here he was persuaded that the statute controlled and that reasonable attorney fees were due.

A. Attorney Fees

¶ 21. We now turn our attention to the specific question presented by this case: Once costs are either required or found appropriate, how should the court arrive at a proper attorney fee award?

¶ 22. Judge Cooper expressly determined that, in his discretion, $15,000 in attorney fees was reasonable. When a circuit court awards attorney fees, the amount of the award is left to the discretion of the court. First Wisconsin Nat'l Bank v. Nicolaou, 113 Wis. 2d 524, 537, 335 N.W.2d 390 (1983). We uphold the circuit court's determination unless the circuit court erroneously exercised its discretion. Standard Theatres, Inc. v. Transp. Dep't, 118 Wis. 2d 730, 747, 349 N.W.2d 661 (1984). We give deference to the circuit court's decision because the circuit court is familiar with local billing norms and will likely have witnessed first-hand the quality of the service rendered by counsel. Id. Thus, we do not substitute our judgment for the judgment of the circuit court, but instead probe the court's explanation to determine if the court "employ[ed] a logical rationale based on the appropriate legal principles and facts of record." Hughes v. Chrysler Motors Corp., 197 Wis. 2d 973, 987, 542 N.W.2d 148 (1996) (quoting Vill. of Shorewood v. Steinberg, 174 Wis. 2d 191, 204, 496 N.W.2d 57 (1993)).

¶ 23. What are the appropriate legal principles courts are to apply in determining whether a fee is appropriate?

¶ 24. Supreme Court Rule 20:1.5 addresses reasonable attorney fees. This rule was not drafted as a guide for courts to determine reasonable fees under fee-shifting statutes; it was designed to govern the ethical obligation of attorneys to charge reasonable fees. Nonetheless, this court has endorsed the factors set out in SCR 20:1.5 and encourages courts to apply these factors when they are required to determine or evaluate attorney fees. See Shorewood, 174 Wis. 2d at 204 (citing cases). Using the enumerated factors helps courts exercise their discretion with a consistent set of legal principles, allowing applicants and their opponents to structure legal arguments and present evidence in the same manner.

¶ 25. Supreme Court Rule 20:1.5(a) lists "[t]he factors to be considered in determining the reasonableness of a fee." These factors are:

(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent.

¶ 26. Although SCR 20:1.5 does not purport to be exhaustive, its factors encompass a variety of considerations appropriate in the fee-shifting context. Admittedly, the factors are often quite subjective. Therefore the results are open to significant variation. The factors do not lead to a single unitary value as the only reasonable fee. They can justify a range of reasonable fees and different methods of calculating them. In the abstract, we might imagine an attorney using the factors to determine the reasonable range of fees that the attorney may ethically charge, and then determine the fees that he or she will actually charge based upon the market, or his or her perception of the market, for legal services. As a practical manner, attorneys probably determine the market value of their services, and then employ the factors to evaluate whether that market rate is reasonable. Either way, conceptually speaking, the factors serve to ferret out unreasonable fees; they do not command the analytical precision to lead a user to a single reasonable figure.

¶ 27. Thus, when courts endeavor to determine a reasonable fee using the factors listed in SCR 20:1.5, variation is to be expected. To the extent that discretionary decision-making can be made more uniform and transparent by providing an objective framework to assess these factors, such a framework is desirable.

¶ 28. The quest for a suitable framework for employing the SCR 20:1.5 factors is not uncharted territory. More than 20 years ago, the United States Supreme Court refined the methodology in federal courts for awarding attorney fees under fee-shifting statutes. Hensley, 461 U.S. 424. The Court acknowledged that the facts of each particular case ultimately govern the amount of fees. Id. at 429. Noting that the legislative history of the statute at issue in that case expressed approval of 12 factors adopted by the Fifth Circuit Court of Appeals in Johnson v. Ga. Highway Express, Inc., 488 F.2d 714, 717-19 (5th Cir. 1974), id. at 429-30, the Court outlined a procedure for determining the amount of a reasonable attorney fee that incorporates an objective component while utilizing the Johnson factors. The Court stated: "The most useful starting point for determining the amount of a reasonable fee is the number of hours reasonably expended on the litigation multiplied by a reasonable hourly rate. This calculation provides an objective basis on which to make an initial estimate of the value of a lawyer's services." Hensley, 461 U.S. at 433. The structural starting point employed by the Court appears to have been inspired by Lindy Bros. Builders, Inc. of Philadelphia v. Am. Radiator & Standard Sanitary Corp., 487 F.2d 161, 168 (3rd Cir. 1973), which commented that "the amount thus found to constitute reasonable compensation should be the lodestar of the court's fee determination." (Emphasis added).

¶ 29 The Hensley Court explained that the product of reasonable hours multiplied by a reasonable rate — the so-called "lodestar" figure — subsumes many of the twelve Johnson factors, 461 U.S. at 434 n.9, but a court ought not end its analysis after arriving at that number. A court may adjust this lodestar figure up or down to account for any remaining Johnson factors not embodied in the lodestar calculation. Id. at 434. Since Hensley, the lodestar approach has become "the guiding light of [the Court's] fee-shifting jurisprudence." Gisbrecht v. Barnhart, 535 U.S. 789, 801 (2002) (citing Burlington v. Dague, 505 U.S. 557, 562 (1992)).

¶ 30. The obvious similarities between the Johnson factors and the factors enumerated in SCR 20:1.5 have their origin in the American Bar Association's Code of Professional Responsibility, Disciplinary Rule 2-106 (1969). Hensley's endorsement of a method to analyze the Johnson factors under an objective framework is compelling. It reinforces the circuit court's discretion to set an award within a range of reasonableness and at the same time injects the exercise of that discretion with objectivity and uniformity. These aspirations are so important and desirable that we adopt Hensley's lodestar methodology and direct the circuit courts to follow its logic when explaining how a fee award has been determined.

¶ 31. With respect to Judge Cooper's explanation for the fee award in this case, we note the dearth of hard facts'available to the court. If Judge Cooper had relied on the Hensley lodestar approach that we adopt today, he would have been within his discretion to significantly reduce the attorney fee award to nothing or nearly nothing. As Hensley makes clear, "[t]he party seeking an award of fees should submit evidence supporting the hours worked and rates claimed. Where the documentation of hours is inadequate, the district court may reduce the award accordingly." 461 U.S. at 433 (emphasis added). As noted, Judge Cooper did not consider any billing invoices or other documentation of the hours worked as a sanction for Kolupar's failure to comply with local rules. The court of appeals affirmed Judge Cooper's interpretation of the rule giving rise to the sanction, and Kolupar did not raise this issue in her petition for review. Because this issue is not properly before us, we do not address it, see Wis. Stat. § 809.62(6); see also White v. New Hampshire Dep't of Employment Sec., 455 U.S. 445, 454 (1982) (authorizing courts to reject fee requests when the requests fail to comply with local rules), except to observe that litigants who demand strict enforcement of the rules against others become vulnerable when they do not follow the rules themselves. On the facts presented here, Kolupar did not fully satisfy her burden to produce evidence of the hours worked, and Judge Cooper could have reduced her award, perhaps to a nominal amount, solely on that basis.

¶ 32. Judge Cooper nevertheless concluded that attorney fees were appropriate. The absence of billing documentation meant that he had few objective facts to rely upon in arriving at a figure for Kolupar's fees. The testimony reiterated the total amount Kolupar sought in fees and costs was approximately $53,000, and the court accepted that this figure constituted Kolupar's actual attorney fees and litigation expenses. Without the billing invoices, however, the court could not know how much time Kolupar's attorney spent on particular tasks, and therefore could make no assessment as to whether the hours her attorney exercised in pursuing the claim were reasonable. This rendered any analysis under a lodestar approach impractical.

¶ 33. With respect to an analysis using the SCR 20:1.5 factors outside the lodestar framework, which until today has been the accepted methodology, Kolupar stresses that Judge Cooper did not expressly mention the factors nor did he discuss the full array of factors in his analysis. Judge Cooper's analysis is best explained by considering the amount and type of the information teased out at the hearing. The nature of the information did not lend itself to a factor-by-factor analysis because the lion's share of the testimony and argument focused myopically on who was more at fault for certain delays in discovery rather than on what SCR 20:1.5 factors or other methodology should guide the court to an appropriate award.

¶ 34. This becomes clear if we examine the factors individually and compare them with the information adduced at the hearing. Kolupar had the burden to demonstrate the amount of fees submitted were reasonable, Milwaukee Rescue Mission, Inc. v. Redevelopment Auth. of Milwaukee, 161 Wis. 2d 472, 494, 468 N.W.2d 663 (1991) (citing Standard Theatres, 118 Wis. 2d at 748), and Kolupar failed in this regard because Judge Cooper had little relevant information to assist him in making his fee award. In the end, although we agree with Kolupar that, ideally the court should discuss each of these factors, we cannot justify a finding that Judge Cooper erroneously exercised his discretion when Ko-lupar failed in her burden to provide the court with anything meaningful to discuss.

¶ 35. We look to the eight factors set out in SCR 20:1.5 in relation to the award.

¶ 36. Paragraph (a)(1) lists "the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal services properly." Kolupar presented evidence as to the rate charged, $145 per hour, but because of the sanction, she did not present detailed information of what activities her attorney performed. Thus, Judge Cooper could not reach a conclusion as to whether the time Kolupar's attorney spent on the matter was reasonable, even if the rate was reasonable. By all accounts, the legal questions involved were neither novel nor particularly difficult, nor was the level of skill required to perform these legal services such that it warranted a large fee. The factual questions required investigation, and the testimony certainly explained some of the successes and failures of Kolupar's attorney's factual inquiries, yet the testimony did not establish the amount of time expended in those pursuits. Without a global accounting of how the attorney's time was spent, Judge Cooper could not arrive at a figure for the investigative component of Kolupar's attorney's bill, much less a figure for all his activities.

¶ 37. Paragraph (a)(2) speaks to the likelihood, "if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer." Kolupar's attorney testified at the hearing that he was not precluded from taking on other work while this case proceeded.

¶ 38. Paragraph (a)(3) addresses the fee customarily charged in the locality for similar services. Some testimony touched on the hourly rate other attorneys charge, but as already discussed, even assuming the hourly rate was reasonable, that figure is not useful where the court is without reliable information as to how the hours claimed were spent. No information was given regarding the overall size of attorney fees in automobile fraud cases, nor would we expect there to be a typical attorney fee based on an hourly rate calculation because the amount of work reasonably required would vary widely from case to case.

¶ 39. Setting to one side paragraph (a)(4) for the moment, we note that no evidence regarding any time limitations imposed by Kolupar was presented under paragraph (a)(5).

¶ 40. Paragraph (a)(6) permits the consideration of the nature and length of time of the professional relationship between Kolupar and her attorney. The testimony suggests that the attorney-client relationship extended only to matters involving the particular automobile transaction at issue in this lawsuit. We do not see how the limited nature of their professional relationship would dictate a particular total value for all her attorney's services.

¶ 41. Paragraph (a)(7) speaks to the experience, reputation, and ability of the lawyer performing the services. Kolupar's attorney testified that he had 18 years of experience and had handled similar cases in the past. Again, this information may buttress the reasonableness of a particular hourly rate, a particular contingent percentage, or a particular fixed fee, but it fails to establish the valuation of an overall fee based on an hourly rate without a companion figure for the amount of hours expended and the tasks performed.

¶ 42. Paragraph (a)(8) addresses whether the fee is fixed or contingent. Here the fee was neither fixed nor contingent, but was calculated at an hourly rate. This only serves to highlight the unhelpfulness of information regarding other factors that support the reasonableness of such a particular hourly rate in the absence of specific documentation about the hours expended.

¶ 43. Judge Cooper's explanation relied almost entirely on "the amount involved and the results obtained" pursuant to paragraph (a)(4), and for good reason. In this case, the primary SCR 20:1.5 factor on which the court had objective and reliable information was paragraph (a)(4). The Hensley case discusses this "important" factor at length, and directs that courts ask: "[D]id the plaintiff achieve a level of success that makes the hours reasonably expended a satisfactory basis for making a fee award?" 461 U.S. at 434. In evaluating this factor, the Court stated that "the most critical factor is the degree of success obtained." Id. at 436. "Where a plaintiff has obtained excellent results, his attorney should recover a fully compensatory fee." Id. at 435.

¶ 44. Judge Cooper emphasized that the case was over-tried and over-pled: "There is no question this case was over-tried. Discovery was over — well overdone. It was over-[pled] right from the get-go on the complaint. There was the shotgun pleading where everything was [pled] against Wilde short of conquering Europe during World War II. So that was the framework, and the daunting discovery mountain was created right from the get-go. And this was based upon the plaintiffs pleading."

¶ 45. Indeed, Kolupar asserted five claims, one of which was a federal claim that she eventually abandoned because the statute of limitation had long passed. This federal claim would have authorized the court to award treble damages. When Kolupar first itemized her damages in August of 2000, the figure was $10,600 plus unspecified repair expenses, interest charges, and financing charges. Absent the amounts for which Kolu-par did not provide a specified value, and considering the potential for treble damages, Wilde faced a claim at this time for at least $31,800.

¶ 46. In April, 2001, over a year after Kolupar instigated the litigation, she provided the court a more specific damage calculation. In this new itemization of damages, she sought to recover for:

1. Loss of use of a reliable motor vehicle, specifically, the 1993 Pontiac Sunbird calculated at a reasonable rental rate for similar vehicle for [a 31-day period].
2. Judgment against Tammy Kolupar by Waukesha State Bank in the principal amount of $9,155.67, together with interest accruing since May, 1995 at 12% per annum (less an offset for $2,000.00 received by Tammy Kolupar upon sale of the 1985 Mercedes).
3. Repair costs to the Mercedes (currently known to be $615.76, but investigation continue[s]).
4. Loan payments and finance charges paid on the Mercedes loan.
5. Insurance premiums paid on the Mercedes (believed to be $384.00 for the period 04/28/94 to 06/25/94).
6. Attorneys' fees (accruing)
7. Litigation expenses (accruing).

¶ 47. With respect to the judgment in item 2, the requested sum of $9,155.67, with 12% annual interest calculated from May 1, 1995, through April 13th, 2001 (the date of the itemization), subtracting $2,000, equals $15,976.17. When this amount is added to the other specific figures, the total is $16,975.93. At this time, Kolupar still pursued the federal odometer claim and its treble damages, and, including only the hard numbers and excluding the unvalued itemized damages, this figure multiplied by a factor of three (as per the treble damages under the federal odometer claim) brings the requested damages to a minimum of $50,927.79.

¶ 48. Even after the federal odometer claim was dropped, Kolupar's requested damages were still quite large. In June of 2001, once Kolupar acknowledged that the statute of limitation had run on the federal claim, she submitted to the court an even more specific itemization. The total of all her damages, including a recalculation of the interest as of June 19, 2001, indicates that Kolupar sought $20,719.71. She also asked for approximately $35,000 in attorney fees and costs.

¶ 49. Thus, from both Tammy Kolupar's and Wilde's perspectives, the amounts involved were quite large. The $6,600 settlement figure she received was only 32% of her lowest itemization of damages, and was only 13% of the $50,927.79 itemized in April of 2001, which parenthetically, did not include all her requested damages. We note that, of the approximately $41,000 in attorney fees that Kolupar sought, $15,000 amounts to approximately 36% of the fees requested. While we do not approve a bright-line rule under which courts simply apply a strict ratio of the amount claimed and the amount of settlement to arrive at a reasonable fee, we do find it significant that the fee in this case constituted a higher percentage of the total sought than the same ratio between the requested damages and the settlement.

¶ 50. The court clearly thought the case was over-pled, contributing to the excessive fees. Wilde was presented with a claim for over $50,000 in damages. The extent of Wilde's exposure may have caused it to adopt an uncompromising attitude with respect to this claim. Thus, to some extent the court was hypothesizing that the over-pleading instigated the contentious litigation that was to follow. This cause-and-effect appears reasonably based, and, in any event, we owe Judge Cooper deference.

¶ 51. While Kolupar's attorney has characterized the $6,600 as an excellent result because he was able to persuade the bank to accept this payment in full satisfaction of the outstanding principal and accumulated interest on her car loan, this is not the type of result with which SCR 20:1.5(a)(4) is concerned. This is indeed a good conclusion for Tammy Kolupar, but not with respect to this lawsuit. It is a good result with respect to any potential litigation she might face over the loan with Waukesha State Bank. With respect to her lawsuit against Wilde, the results obtained were a fraction of the amount she sought, which the court deemed excessive and which perhaps contributed to the protracted litigation.

¶ 52. The circuit court might well have explained its decision with more depth. But as Hensley dictates, a court need give only a "concise but clear explanation of its reasons for the fee award when the reasonableness [of the requested fee] is challenged." 461 U.S. at 437. Here, $15,000 is sustainable given the facts of this case and the lack of objective information provided to the trial court. Accordingly, we affirm the fee award.

B. Costs

¶ 53. We note that § 218.01(9)(b) does not authorize a court to award reasonable attorney fees alone; it authorizes a court to award costs, and the costs include reasonable attorney fees. In this case, the court made it clear that it was awarding $15,000 in attorney fees, which included costs. At the conclusion of the fee hearing, the following exchange occurred:

[THE COURT]: In my discretion I believe that there is entitlement for reasonable attorney's fees on behalf of the plaintiff. Reasonable attorney's fees in my mind of $15,000. I am ordering $15,000 fee to plaintiff for attorney's fees and costs that was originally submitted as an offer of judgment.
The flip side is Wilde has to swallow whatever fees they have. I think that establishes what the statute intended .... There was way too much work done, and there should have been a focus, and much earlier in the proceedings. And there is nobody here with clean hands, so that's the order of the Court. Joint and several.
[KOLUPAR'S ATTORNEY]: As to the costs?
[THE COURT]: Fees and costs, $15,000.

(Emphasis added).

¶ 54. The court made a formal finding that $15,000 represented a reasonable attorney fee, but then the court aggregated the cost award as part of the $15,000 award. In effect, the court awarded no costs.

¶ 55. Section 218.01(9)(b) does not state that the court may award costs or attorney fees. Costs and attorney fees are linked; the court is authorized to award costs, including a reasonable attorney fee. While the court may retain discretion to award $0 in costs or nominal costs, a decision to do so must be explained. Here, the court offered no explanation. The court may have believed the party's settlement for $6,600 plus taxable costs included the costs requested by Kolupar. Or perhaps the court believed the costs should not be awarded at all. An explanation is required. We therefore remand the matter of costs to the circuit court.

By the Court. — The decision of the court of appeals is affirmed in part and the cause is remanded to the circuit court.

¶ 56. DIANE S. SYKES, J., did not participate.

SHIRLEY S. ABRAHAMSON, C.J.

¶ 57. 0dissenting). This is a consumer protection case under a consumer protection law. The consumer in this case has been victimized twice: once by the defendants, the second time by the legal system.

¶ 58. By affirming the fees awarded by the circuit court, the majority opinion contravenes the spirit and letter of the statutes that "were designed to keep open the courthouse doors to persons whose claims do not justify the retention of a lawyer unless, by prevailing, that person can recover his or her attorneys fees."

¶ 59. Judge Fine's vigorous dissent in the court of appeals criticizes the defendants for taking advantage of Ms. Kolupar in the car transaction and in delaying and obfuscating the trial gives the reader the flavor of the case. Judge Fine wrote:

Wilde Pontiac Cadillac, Inc., and its employee Randall Thompson not only took advantage of an eighteen-year-old woman but they also delayed and obfuscated the litigation process. Indeed, from my review of the record, I believe that they pursued a scorched-earth Rambo-litigation policy that has no place in our justice system.

¶ 60. The circuit court compounded the auto dealer's harm to Ms. Kolupar by failing to properly exercise its discretion in awarding reasonable attorney fees and costs.

¶ 61. The majority opinion delivers the final blow to Ms. Kolupar by affirming the circuit court's erroneous discretionary award of fees.

¶ 62. The majority shifts the blame to Ms. Kolu-par for the low award, asserting that the record before the circuit court had a "dearth of hard facts." And whose fault was that?

¶ 63. The dearth of hard facts was caused by the circuit court's refusal to admit Ms. Kolupar's documentation in support of her attorney's fees. Why weren't these documents admitted? Because the circuit court ruled that the submission was late under local court rules. I agree with Judge Fine that the circuit court incorrectly applied Local Rule 365. As Judge Fine wrote:

The rule, however, governs "motions"; it does not apply to exhibits offered at trials or evidentiary hearings. Kolupar never filed a motion for attorneys fees; the statute permits them and she demanded them in her complaint. Indeed, the trial court sua sponte set the hearing on the attorney-fees matter: 'We'll all meet back here on the date set for trial to the court on May 13th and we'll consider the attorneys' fee issue."

¶ 64. And even if this local rule applied in the present case (which it does not) and the documents were a few days late, the circuit court's sanction of refusing to admit the documents was too harsh and it was an erroneous exercise of discretion.

¶ 65. Does the majority opinion address the issue of the applicability of the local rule? No! The majority begs off by again placing the blame on Ms. Kolupar, claiming that Ms. Kolupar did not present the issue in her petition for review and therefore did not preserve the issue for appeal as a matter of right.

¶ 66. I disagree. The petition for review presented the following issue: "Did the trial court erroneously exercise its discretion by failing to apply and consider the correct legal standard?" Included within the stated issue is the question whether the local rule was correctly applied. The petitioner is not required to set forth in the petition for review every argument that she will make in this court.

¶ 67. Moreover, the arguments of the parties did not focus on the state of the record. Neither party complains about the lack of documentation of the attorney's work in the record. As Judge Fine pointed out, "No one [that is, neither the parties nor the circuit court] disputes that Kolupar's lawyer did what he said he did and that his hourly rate was reasonable."

¶ 68. Rather, the briefs debate whether the circuit court considered the correct factors in reaching its decision. Ms. Kolupar's position is that the circuit court did not consider the correct legal standards. The defendant's position is that the circuit court considered the correct factors. Why doesn't the majority opinion hold that the defendants waived any objection to the lack of documentation of attorney fees in the record and to Ms. Kolupar's supposed failure to assert that the local rule was improperly applied? If there is waiver, this court may proceed to decide the substantive issue.

¶ 69. The circuit court based its award of fees on the comments of the discovery master, which were not supported by any facts relating to the work of Ms. Kolupar's attorneys. Judge Fine properly questioned the circuit court's and court of appeals' deferral to the discovery master and the failure of the circuit court to consider on the record any of the factors relating to fees. The former judge appointed to be a discovery master was not appointed to assess the fees. He held no hearings, examined no evidence, and made no findings in regard to fees. Nevertheless, he offered an opinion on fees, which apparently significantly influenced the circuit court. Judge Fine wrote, somewhat harshly but not without justification, as follows:

Yet, the Majority defers to the unfocused musings by both a former judge, appointed to oversee a small part of the discovery disputes in this case, and the trial court.
The trial court here never considered on the record any of the factors [in determining attorney fees]. Rather, it deferred to the off-hand assessment of the former judge who, as the Majority notes, was only appointed to be a discovery master. The trial court's abdication of its responsibility was palpable, as reflected by the transcript in the record.. . . Wilde suggested the $15,000 figure, and the former judge adopted it without any analysis beyond his view that more was not warranted because, with Kolupar's acceptance of the $6,600 offer of settlement, the case was 'just barely above a small claims case.'

¶ 70. The discovery master erred in viewing the amount of recovery as determinative of reasonable attorney fees. The amount of the recovery is not a measure of what the fee-shifting award should be in consumer protection cases.

¶ 71. Because the circuit court excluded Ms. Kolupar's supporting documents, relied on the master's unsupported proposed fee of $15,000, and failed to consider the factors the majority sets forth, it erroneously exercised its discretion in awarding only $15,000 in fees. I would reverse the judgment and remand the cause for reconsideration of attorney fees as well as costs, guided by the majority opinion's discussion of fees.

¶ 72. Accordingly, I dissent.

¶ 73. I am authorized to state that Justice ANN WALSH BRADLEY joins this opinion.

        Kolupar v. Wilde Pontiac Cadillac, Inc., 2003 WI App 175, 266 Wis. 2d 659, 668 N.W.2d 798.

       Subchapter I of Chapter 218 of the Wisconsin Statutes has since been substantially renumbered and revised. See 1999 Wis. Act 31; see also Conversion Table for Subchapter I of Chapter 218, Wisconsin Statutes 3596-98 (2001-02). All references are to the 1993-94 statutes unless otherwise noted.

       Thompson failed to comply with numerous court deadlines and the court granted Kolupar's motion for default judgment against him on February 25, 2002. While Thompson did appear by attorney to address the attorney fee issue in May 2002, his involvement is not material to our discussion.

       Milwaukee County Circuit Court Rule 365(a) provides:
      If a movant desires to file a brief, affidavit, or other documents in support of a motion other than one for summary judgment or dismissal, such motion and supporting materials shall be received by all counsel of record and/or parties not represented by counsel of record and filed with the deputy court clerk of the assigned judge no later than ten (10) calendar days (including Saturdays, Sundays and holidays) before the time specified for the hearing.
      Milwaukee Cty. Ct. R. 365(a).

       These factors are:
      (1) time and labor required; (2) novelty and difficulty of issues; (3) skill required; (4) loss of other employment in taking the case; (5) customary fee; (6) whether the fee is fixed or contingent; (7) time limitations imposed by client or circumstances; (8) amount involved and result obtained; (9) counsel's experience, reputation, and ability; (10) case undesirability; (11) nature and length of relationship with the clients; and (12) awards in similar cases.

        Johnson v. Georgia Highway Express, 488 F.2d 714, 717 (5th Cir. 1974).

       By combing the information available from the hearing transcript, we do not mean to imply that a hearing is always necessary or that a proper exercise of discretion will require courts to similarly focus on testimony if there is a hearing. We encourage the bar and judiciary to develop uniform procedures for determining attorney fees when appropriate, which may or may not include a hearing.
      The above discussion is necessary for our analysis to demonstrate the dearth of reliable information available to Judge Cooper in the absence of Kolupar's billing information. When the court is presented with reliable and accurate documentation as to the amount and nature of the time expended on the case, it would not be improper for the court to rely principally on that documentation.

       When amounts were eventually specified for these classes of damages, they were significant. See infra note 9.

       The $2,000 subtracted represents money received by Tammy Kolupar upon the sale of the 1985 Mercedes.

       The actual damages claimed included $2,500 loss of market value for the 1993 Pontiac Sunbird, $16,362.79 for the bank judgment plus interest minus $2,000, $615.76 cost to repair Mercedes, $857.16 in loan payments and finance charges, and $384 in insurance premiums on Mercedes.

       Kolupar takes issue with Judge Cooper's reliance on the discovery referee's recommendation. She asserts that it was erroneous for Judge Cooper to consider the discovery referee's opinion. This position misstates the level of reliance apparent from the record. Judge Cooper did not state that he was adopting the recommendation of the discovery referee. Instead, Judge Cooper stated that he appreciated his recommendation and happened to concur. This is quite separate from a situation where a court abdicates its discretionary authority. We see no error in acknowledging on the record a knowledgeable court officer's opinion. This is not the same as wholesale adoption of that opinion.

        Kolupar v. Wilde Pontiac Cadillac, Inc., 2003 WI App 175, ¶ 32, 266 Wis. 2d 659, 668 N.W.2d 798 (Fine, J., dissenting).

         Kolupar, 266 Wis.2d 659, ¶ 23 (Fine, J., dissenting).

         Id.

       The method of evaluation of fees is set forth in the majority opinion, ¶¶ 24-29.1 agree with the lodestar approach.

       Majority op., ¶ 31. See also, majority op., ¶ 5 (complaining about the sparse information).

        Kolupar, 266 Wis. 2d 659, ¶ 28 (Fine, J., dissenting).

       Majority op., ¶ 31. The majority could, of course, exercise its discretion to address the issue but apparently is unwilling to do so. See Wis. Stat. § 809.62(6). If it did address the issue, the result of the case would be different.

        Kolupar, 266 Wis. 2d 659, ¶ 34.

        See State v. Guerard, 2004 WI 85, 273 Wis. 2d 250, 682 N.W.2d 12; State v. Evans, 2004 WI 84, 273 Wis. 2d 192, 682 N.W.2d 784.

        Kolupar, 266 Wis. 2d 659, ¶¶ 24, 27.

        Shands v. Castrovinci, 115 Wis. 2d 352, 358, 340 N.W.2d 506 (1983).


source: Caselaw Access Project

author: DAVID T. PROSSER, J. ANN WALSH BRADLEY, J.

license: Public Domain

text:
    State Farm Mutual Automobile Insurance Company, Plaintiff-Respondent, v. Nancy G. Langridge, Defendant-Appellant-Petitioner.
    Supreme Court

      No. 02-3353-FT.

      Oral argument February 12, 2004.

    Decided July 13, 2004.

    2004 WI 113
    (Also reported in 683 N.W.2d 75.)

      For the defendant-appellant-petitioner there were briefs by Thomas M. Devine, Jo Anne M. Breese-Jaeck, Christopher A. Geary and Hostak, Henzl & Bichler, S.C., Racine, and oral argument by Thomas M. Devine.

    For the plaintiff-respondent there was a brief by Russell M. Ware, Kenneth E. Rusch and O'Hagan, Smith & Amundsen, LLC, Milwaukee and Michael Resis and O'Hagan, Smith & Amundsen, LLC, Chicago, IL, and oral argument by Michael Resis.

   DAVID T. PROSSER, J.

¶ 1. This case requires the court to determine underinsured motor vehicle (UIM) coverage in an automobile insurance policy. Nancy Langridge, an insured under the policy, seeks review of an unpublished decision of the court of appeals affirming the circuit court's decision to grant summary judgment to the insurer. For the reasons explained below, we affirm.

FACTS AND PROCEDURAL HISTORY

¶ 2. On June 19, 2000, William Langridge died in a traffic accident caused by a drunk driver. Langridge was the lone rider on a motorcycle that was covered under an automobile insurance policy that he and his wife Nancy had purchased from State Farm Mutual Automobile Insurance Company (State Farm). Both Mr. and Mrs. Langridge were named insureds. The State Farm policy included UIM coverage with limits of $100,000 per person and $300,000 per accident.

¶ 3. The drunk driver had liability coverage under a policy issued by Liberty Mutual Insurance Company. The drunk driver's policy had liability limits of $150,000. Following Mr. Langridge's death, Nancy Langridge — who was not present when the accident occurred — settled with Liberty Mutual for $150,000, while acting as representative of her husband's estate.

¶ 4. On June 7, 2001, Mrs. Langridge filed her own claim with State Farm for the $100,000 UIM coverage. State Farm denied her claim, explaining that she was not involved in the accident giving rise to the claim and had sustained no bodily injury; therefore, she was. not entitled to coverage.

¶ 5. On April 25, 2002, State Farm initiated the present action, seeking a declaration that Mrs. Lan-gridge is not entitled to recovery under the policy. Mrs. Langridge counterclaimed, alleging that she was covered by the UIM feature of the policy. Before the counterclaim was filed, an arbitrator valued Mrs. Langridge's claim at $850,000. This dollar value consisted of $350,000 for the statutory cap on wrongful death damages for loss of society and companionship and $500,000 to compensate for pecuniary loss resulting from her husband's death.

¶ 6. The parties traded motions for summary judgment. The Racine County Circuit Court, Charles H. Constantine, Judge, denied Mrs. Langridge's motion and awarded summary judgment to State Farm, concluding that Mrs. Langridge could not make her own claim under the policy because "the insured attempting to claim underinsured motorist coverage must have suffered a bodily injury." Under the facts presented, the court said William Langridge was the only insured to suffer a bodily injury:

The insured suffering bodily injury (Mr. Langridge) in this case is not entitled to collect underinsured motorist coverage. The derivative claims would be compensable if there were a viable claim for bodily injury... As Mrs. Langridge did not [have bodily injury], there is no coverage.

¶ 7. Nancy Langridge appealed. The court of appeals affirmed the circuit court's judgment in favor of State Farm. According to the court of appeals,

William Langridge suffered the bodily injury. [Mrs.] Langridge, therefore, recovers only as the survivor of her husband's claim. In other words, for the purposes of this insurance policy, her claim derives from her husband's claim for bodily injury.. ..
Langridge argues that a wrongful death action is not a derivative action but is her own independent action. This is true in the sense that she may bring an independent cause of action for wrongful death. But we are not deciding whether a wrongful death action is an independent action. We are construing an insurance policy which provides that she must have sustained a bodily injury herself. In this sense, her action is derivative because under the policy, only those who have suffered bodily injury may recover. She has not, and consequently, is not entitled to recover.

We subsequently accepted Mrs. Langridge's petition for review.

APPLICABLE POLICY PROVISIONS

¶ 8. The Langridge policy contains the following relevant provisions, some of which are defined terms that are used throughout the policy and which appear in bold face italics:

Bodily Injury — means bodily injury to a person and sickness, disease or death which results from it.
Insured — means the person, persons or organization defined as insureds in the specific coverage.
Person — means a human being.
UNDERINSURED MOTOR VEHICLE— COVERAGEW
You have this coverage if "W" appears in the "Coverages" space on the declarations page.
We will pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an underinsured motor vehicle. The bodily injury must be caused by accident arising out of the operation, maintenance or use of an underinsured motor vehicle.
Underinsured Motor Vehicle — means a land motor vehicle.
1. the ownership, maintenance or use of which is insured or bonded for bodily injury liability at the time of the accident; and
2. whose limits of liability for bodily injury 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.
Limits of Liability
Coverage W
1. The amount of coverage is shown on the declarations page under "Limits of Liability-W-Each Person, Each Accident". Under "Each Person" is the amount of coverage for all damages due to bodily injury to one person. "Bodily injury to one person" includes all injury and damages to others resulting from this bodily injury. Under "Each Accident" is the total amount of coverage, subject to the amount shown under "Each Person", for all damages due to bodily injury to two or more persons in the same accident.

¶ 9. As noted above, the UIM limit in the Lan-gridge policy for "Each Person" was $100,000. The UIM limit for "Each Accident" was $300,000. With these provisions at hand, we summarize each party's interpretation of the provisions as they apply to the facts underlying the claim.

¶ 10. Nancy Langridge asserts that her policy defines an "underinsured motor vehicle" to include a vehicle owned by an insured driver whose limits of liability for bodily injury [$150,000] "b. have been reduced by payments to persons [William Langridge] other than the insured [Nancy Langridge] to less than the limits of the coverage." She argues that because she is a named insured under the policy, and the drunk driver's liability limits were paid to persons other than her, the insured drunk driver was underinsured as to her. Therefore, she asserts, she should be able to claim coverage under her policy for her wrongful death claim.

¶ 11. State Farm counters that Mrs. Langridge is attempting to split the claim for her husband's bodily injury into two claims to gain access to coverage to which she is not entitled. It asserts that since the drunk driver was not underinsured as to William Langridge and since Mrs. Langridge's claim under the policy is derivative of her husband's claim, the drunk driver was not underinsured. State Farm's position is that, based upon the context of the whole policy, the only relevant question to ask is whether the drunk driver was under-insured as to William Langridge. In its view, the answer is "no," and consequently there was no "underinsured motor vehicle" and no UIM coverage.

STANDARDS OF REVIEW

¶ 12. In this case, the circuit court granted State Farm's motion for summary judgment. When we review a grant of summary judgment, our review is de novo. Mullen v. Walczak, 2003 WI 75, ¶ 11, 262 Wis. 2d 708, 664 N.W.2d 76 (citing Ahrens v. Town of Fulton, 2002 WI 29, ¶ 15, 251 Wis. 2d 135, 641 N.W.2d 423)); Smith v. Katz, 226 Wis. 2d 798, 805, 595 N.W.2d 345 (1999) (citing Burkes v. Klauser, 185 Wis. 2d 308, 327, 517 N.W.2d 503 (1994)). We rely upon the standard that summary judgment is granted when there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. Mullen, 2003 WI 75, ¶ 11; Smith, 226 Wis. 2d at 805; see also Taylor v. Greatway Ins. Co., 2001 WI 93, ¶ 9, 245 Wis. 2d 134, 628 N.W.2d 916. This is the same standard used by the circuit court and the court of appeals, and accordingly, we benefit from, but need not give deference to, the analyses of both courts. Taylor, 245 Wis. 2d 134, ¶ 9.

¶ 13. This case requires the court to interpret the terms of an insurance policy. The interpretation of an insurance policy is a question of law and is also reviewed de novo. Folkman v. Quamme, 2003 WI 116, ¶ 12, 264 Wis. 2d 617, 665 N.W.2d 857 (citing Danbeck v. Am. Fam. Mut. Ins. Co., 2001 WI 91, ¶ 10, 245 Wis. 2d 186, 629 N.W.2d 150); Mullen, 262 Wis. 2d 708, ¶ 12 (citing same). We construe insurance policies to give effect to the intent of the parties. Folkman, 264 Wis. 2d 617, ¶ 16 (citing Sprangers v. Greatway Ins. Co., 182 Wis. 2d 521, 536, 514 N.W.2d 1 (1994)); Mullen, 262 Wis. 2d 708, ¶ 12.

¶ 14. To do so, we give the words in the insurance policy their common and ordinary meaning, that is, the meaning a reasonable person in the position of the insured would have understood the words to mean. Folkman, 264 Wis. 2d 617, ¶ 17 (citing Arnold E Anderson, Wisconsin Insurance Law § 1.1(C) (4th ed. 1998)); State Farm Mut. Auto. Ins. Co. v. Gillette, 2002 WI 31, ¶ 28, 251 Wis. 2d 561, 641 N.W.2d 662 (citing Danbeck, 245 Wis. 2d 186, ¶ 10; Maas v. Ziegler, 172 Wis. 2d 70, 81-82, 492 N.W.2d 621 (1992); Garriguenc v. Love, 67 Wis. 2d 130, 134-35, 226 N.W.2d 414 (1975); Henderson v. State Farm Mut. Auto. Ins. Co., 59 Wis. 2d 451, 459, 208 N.W.2d 423 (1973)).

¶ 15. If a policy is ambiguous as to coverage, it will be construed in favor of the insured. Folkman, 264 Wis. 2d 617, ¶ 16; Gillette, 251 Wis. 2d 561, ¶ 28. Thus, the first task in construing an insurance policy is to determine whether there is ambiguity with respect to the disputed coverage. Badger Mut. Ins. Co. v. Schmitz, 2002 WI 98, ¶ 51, 255 Wis. 2d 61, 647 N.W.2d 223. Language in an insurance policy is ambiguous "if it is susceptible to more than one reasonable interpretation." Folkman, 264 Wis. 2d 617, ¶ 13 (emphasis added); see also Taylor, 245 Wis. 2d 134, ¶ 10. Courts will interpret the words of an insurance contract against the insured when the insurer's interpretation conforms to what a reasonable person in the position of the insured would have understood the words to mean. Folkman, 264 Wis. 2d 617, ¶ 20 (citing McPhee v. Am. Motorists Ins. Co., 57 Wis. 2d 669, 676, 205 N.W.2d 152 (1973)). We will not interpret a policy "to provide coverage for risks that the insurer did not contemplate or underwrite and for which it has not received a premium." Am. Fam. Mut. Ins. Co. v. Am. Girl, Inc., 2004 WI 2, ¶ 23, 268 Wis. 2d 16, 673 N.W.2d 65.

ANALYSIS

A. Overview of UIM Coverage and "Underinsured Motor Vehicle"

¶ 16. In-Schmitz, we noted two schools of thought concerning UIM coverage. 255 Wis. 2d 61, ¶ 17. Under the first view, UIM coverage operates as a separate fund to "compensate an insured accident victim when the insured's damages exceed the recovery from the at-fault driver (or other responsible party)." Id. (citing Taylor, 245 Wis. 2d 134, ¶ 32 (Bradley, J., dissenting); Kaun v. Indus. Fire & Cas., 148 Wis. 2d 662, 671, 436 N.W.2d 321 (1989)). If the policy at issue in this case were written to reflect this view, the Langridges $100,000 per person UIM coverage would be available to compensate Nancy Langridge for a claim linked to her husband's wrongful death.

¶ 17. Under the second view, UIM coverage is designed "to put the insured in the same position as he [or she] would have occupied had the tortfeasor's liability limits been the same as the underinsured motorist limits purchased by the insured." Schmitz, 255 Wis. 2d 61, ¶ 18 (quoting Dowhower v. W. Bend Mut. Ins. Co., 2000 WI 73, ¶ 18, 236 Wis. 2d 113, 613 N.W.2d 557). If the UIM policy at issue were drafted to conform to this view, the UIM coverage and the tortfeasor's liability policy conjunctively would offer a "predetermined, fixed level of insurance coverage" made up of payments from both policies. Id. (citing Kaun, 148 Wis. 2d at 674-75 (Steinmetz, J., dissenting)).

¶ 18. In recent years, the legislature has authorized policies embodying the latter view, and courts have recognized the legitimacy of these policies. Dowhower, 236 Wis. 2d 113, ¶ 33; Taylor, 245 Wis. 2d 134, ¶ 25; Schmitz, 255 Wis. 2d 61, ¶ 73. Yet, insurers need not draft, and consumers need not purchase, automobile insurance policies with this type of coverage. An insurer could offer coverage that embodies the first view of UIM insurance, and that insurer could and would charge a higher premium to account for the likelihood of larger and more frequent payments to insureds.

¶ 19. Defined terms play a large role in bounding the scope of a policy's coverage. Insurers may define "underinsured motor vehicle" to reflect either the first or second view of UIM coverage. As one treatise notes, "[p]olicies vary in their definitions of an underinsured motor vehicle. The most crucial difference is whether the definition is based on the underinsured motorist motor vehicle policy limits or on the damages sustained by the insured." Arnold E Anderson, Wisconsin Insurance Law, § 4.3(A) (4th ed. 1998). This difference is crucial because it significantly impacts the expectations of insureds.

¶ 20. When a UIM policy defines "underinsured motor vehicle" by comparing the insured's damages to the tortfeasor's liability coverage, an insured would expect the policy to conform to the first view of UIM coverage. That is, since the policy considers a vehicle "under"-insured when the tortfeasor's liability coverage is inadequate to fully compensate the insured, the insured could reasonably expect that the entire available limit of the policy would be available to cover part or all of the difference between the tortfeasor's liability limits and the insured's damages.

¶ 21. However, when a UIM policy defines an "underinsured motor vehicle" by comparing the tortfeasor's limits of liability to the insured's limits of UIM coverage, the insured ought reasonably to expect that the second, more common, view of UIM coverage is in effect. Specifically, an insured who reads the second definition in a policy ought reasonably to expect that the insurer promises only to insure for the difference between the insured's higher UIM limit and the tortfeasor's lower liability limit. An insured who enters into the second kind of UIM policy should not reasonably expect the policy to operate under the first view of UIM coverage.

B. The Issue of "Bodily Injury"

¶ 22. The issue in this case is whether Nancy Langridge is entitled to the UIM coverage of State Farm's policy for her husband's death. Both lower courts concluded that she was not, and both based their decision in part on the rationale that Nancy Langridge must have suffered her own bodily injury to qualify for coverage.

¶ 23. This is not completely accurate. Nancy Lan-gridge notes that the policy language does not include a prerequisite that an insured must have suffered bodily injury to recover. State Farm concedes as much in its brief:

The defendant is correct to state in her brief.. . that.. . she is legally entitled to collect damages for her husband's death....
The defendant refers to a passage of the decision of the court of appeals in which [the court] observed that "under the policy, only those who have suffered bodily injury may recover." This language ... is an overstatement .... This language would be correct if it is amended so that the "bodily injury" must be caused by an "underinsured motor vehicle" as the policy requires.

¶ 24. The Langridges' policy had $100,000 per person UIM coverage. The drunk driver had $150,000 policy limits. If the drunk driver had had only $50,000 policy limits, Mrs. Langridge would have had a derivative claim for the $50,000 difference between the tortfeasor's policy limit and her $100,000 per person UIM coverage. If the Langridges' policy had had $300,000 per person UIM coverage, Mrs. Langridge would have had a derivative claim for the $150,000 difference between the tortfeasor's $150,000 policy limit and her $300,000 per person UIM coverage. Parenthetically, if the drunk driver had had no insurance at all, Mrs. Langridge would have had a derivative claim for the $100,000 uninsured motorist coverage of her policy. In each of these instances, Mrs. Langridge did not have to suffer bodily injury herself in order to recover.

¶ 25. While State Farm concedes that Nancy Lan-gridge need not have suffered a bodily injury to recover under every fact situation, it nonetheless asserts that she is not entitled to coverage in this fact situation, because she does not have a claim under the policy independent of her husband's bodily injury; she has only a derivative claim. State Farm's position is that the drunk driver's vehicle does not meet the definition of an "underinsured motor vehicle" as to William Langridge; consequently, it cannot meet the definition of an "un-derinsured motor vehicle" as to Mrs. Langridge because her claim derives from her husband's bodily injury. As a result, her claim falls outside the coverage provision of the policy.

C. The Issue of "Underinsured Motor Vehicle"

¶ 26. To state the obvious, underinsured motor vehicle coverage requires an "underinsured motor vehicle." Nancy Langridge argues that the drunk driver's vehicle meets the policy's "underinsured motor vehicle" definition as to her. Her reasoning is as follows.

¶ 27. First, Mrs. Langridge asserts that she is "an insured." The policy's coverage provision provides: "We will pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an underinsured motor vehicle. The bodily injury must be caused by accident arising out of the operation, maintenance or use of an underinsured motor vehicle." Nancy Langridge contends that she is "an insured" who is legally entitled to collect wrongful death damages from the drunk driver for the death of her husband. She supports her position by referencing the policy's definition of bodily injury, which "means bodily injury to a person and sickness, disease or death which results from it." (Emphasis added). According to Mrs. Langridge, her wrongful death claim meets the requirements of the "for bodily injury" clause of the coverage language because it is for the death of her husband which resulted from his bodily injury. State Farm does not dispute this reasoning. It is this reasoning that opens the door to a derivative claim.

¶ 28. Second, Mrs. Langridge asserts that the vehicle driven by the drunk driver meets the policy's definition of an "underinsured motor vehicle." She relies on paragraph "b" of the "underinsured motor vehicle" definition:

Underinsured Motor Vehicle — means a land motor vehicle.
1. the ownership, maintenance or use of which is insured or bonded for bodily injury liability at the time of the accident; and
2. whose limits of liability for bodily injury:
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. (Emphasis added).

¶ 29. Mrs. Langridge asserts that paragraph "b" renders the drunk driver's vehicle "underinsured" as to her. As she reads paragraph "b," she is "the insured." The drunk driver's $150,000 limits of liability have been reduced by payments to her husband, not to her, and therefore these payments have rendered the drunk driver's vehicle "underinsured" as to her.

¶ 30. State Farm reads the policy differently. Under the policy, a motor vehicle can be considered under-insured in either of two ways. First, paragraph "a" in the definition of "underinsured motor vehicle" speaks of a vehicle whose limits of liability "a. are less than the limits of liability of this coverage."

¶ 31. In this instance, the drunk driver purchased $50,000 more in liability coverage than the Langridges bought in UIM coverage. There is no dispute that the drunk driver's vehicle was not underinsured as to William Langridge.

¶ 32. State Farm emphasizes that Nancy Langridge's wrongful death claim for the death of her husband arises out of her husband's bodily injury and not her own, and therefore her claim is derivative. To underscore this point, State Farm relies on the limits of liability section of the policy. Under the "Limits of Liability" section, "Bodily injury to one person includes all injury and damages to others resulting from this bodily injury" (Emphasis added). State Farm asks that we read this provision in conjunction with Gocha v. Shimon, 215 Wis. 2d 586, 573 N.W.2d 218 (Ct. App. 1997), and Richie v. American Family Mutual Insurance Company, 140 Wis. 2d 51, 409 N.W.2d 146 (Ct. App. 1987).

¶ 33. Both Gocha and Richie involved fact situations in which insureds were not entitled to collect the greater "per accident" limit; they were confined to the smaller "per person" limit because there was only one insured who suffered a bodily injury. These cases distinguish between independent claims and derivative claims. Both conclude that when an insured seeks payment arising out of the bodily injury of another, the insured's claims are "derivative" of the claim of the person suffering the bodily injury, and as a result only the "per person" limit is available for each person suffering bodily injury.

¶ 34. Turning to paragraph "b," State Farm explains that paragraph "b" is designed to address situations in which multiple parties suffer bodily injury in one accident, and the tortfeasor's automobile liability insurance is exhausted by payments to a person or persons other than the State Farm policy's "insured" claimant. These other persons might be in other vehicles, or they might be in the same vehicle as the insured. Payments from the tortfeasor's policy for bodily injury to other persons can reduce the tortfeasor's liability limits that are available to the insured.

¶ 35. Typically, if a policy defines "underinsured motor vehicle" as it did here — by comparing the tortfeasor's liability limits to the limits of UIM coverage —then "payment to other injured parties that reduces the coverage available to an insured below UIM limits will usually not trigger UIM coverage." Anderson, supra, § 4.3(E) (emphasis added). Thus, paragraph "b" goes beyond typical coverage to provide coverage for an insured when a tortfeasor becomes functionally under-insured by virtue of payments to others, in that the tortfeasor's remaining coverage to compensate the insured is less than the insured's own UIM limits.

¶ 36. This concept meshes with language in the "Limits of Liability" section:

The amount of coverage is shown on the declarations page under "Limits of Liability — W—Each Person, Each Accident".... Under "Each Accident" is the total amount of coverage, subject to the amount shown under "Each Person", for all damages due to bodily injury to two or more persons in the same accident. (Emphasis added).

D. Interpreting the Policy

1. Identifying "the Insured" in Paragraph "b"

¶ 37. In our view, the outcome of this case turns on whether "the insured" in paragraph "b" could reasonably refer to Nancy Langridge. We conclude that it is not reasonable to read the policy in this fashion. As a result, the policy is not ambiguous and should not be construed in favor of the insured.

¶ 38. We observe, first, that if paragraph "b" referred to a motor vehicle whose limits of liability for bodily injury liability "have been reduced by payments to persons other than AN insured," instead of "THE insured," there would be no issue, because "AN insured" would include William Langridge. In fact, some policies do use "an insured" in a similar context. Yet, there would be situations in which use of the phrase "an insured" would limit payment to surviving "insureds" who had actually suffered bodily injury, and that result would conflict with the reasonable expectations of the insured.

¶ 39. We observe, second, that if Mrs. Langridge were not a named insured, she could make a claim representing the estate under paragraph "a" in a situation where her husband's policy limits made him eligible for UIM coverage. As a named insured, she could make a claim under paragraph "a" in a situation where her husband's policy limits made him eligible for UIM coverage. In both situations, the drunk driver's vehicle would be an "underinsured motor vehicle." Instead, Mrs. Langridge seeks to collect under paragraph "b" because her husband's policy limits did not make him eligible for underinsured motorist coverage.

¶ 40. We are required to ask how an insured who cannot succeed under paragraph "a" with a traditional derivative claim can expect to succeed under paragraph "b" with an independent claim when the insured claimant has not suffered bodily injury herself and when she is wholly dependent in her claim upon the bodily injury of another. How can she expect an interpretation of the policy that an insured who suffers no bodily injury has an independent claim equal to the claim of a surviving insured who actually suffers bodily injury?

2. The Relationship Between Ambiguity and the Reasonable Expectations of the Insured

¶ 41. Our first task when interpreting an insurance policy is to determine whether the policy is ambiguous. It is important to recognize that simply because the parties offer two different interpretations of paragraph "b" does not mean both interpretations are reasonable. See Ruff v. Graziano, 220 Wis. 2d 513, 524, 583 N.W.2d 185 (Ct. App. 1998) (citing Sprangers v. Greatway Ins. Co., 182 Wis. 2d 521, 537, 514 N.W.2d 1 (1994)). "The mere fact that a word has more than one dictionary meaning, or that the parties disagree about the meaning, does not necessarily make the word ambiguous if the court concludes that only one meaning applies in the context and comports with the parties' objectively reasonable expectations." Id. (quoting Sprangers, 182 Wis. 2d at 537) (emphasis added).

¶ 42. Judicial construction of insurance policies is both similar to and different from judicial construction of contracts. In general, "[w]e apply the same rules of construction to the language in insurance policies as to the language in any other contract." Taylor, 245 Wis. 2d 134, ¶ 10 (citing Kremers-Urban Co. v. Am. Employers Ins. Co., 119 Wis. 2d 722, 735, 351 N.W.2d 156 (1984)). In both arenas, our goal is to give effect to the intent of the parties. Folkman, 264 Wis. 2d 617, ¶ 16.

¶ 43. Setting to one side the specific interpretive principles that apply to insurance policies, we note that courts have several means to address ambiguous contract language. For instance, a court faced with an ambiguous contract will "select that construction which gives effect to each word or provision of the contract in preference to a construction which results in surplus-age." Jones v. Jenkins, 88 Wis. 2d 712, 722, 277 N.W.2d 815 (1979). The court will also adopt a construction that "will result in a reasonable, fair and just contract as opposed to one that is unusual or extraordinary." Id. Often the court will "look to the purpose of the contract and the circumstances surrounding its execution to determine the intent." Id. at 723.

¶ 44. These principles are buttressed by the judicial maxim that "[a]mbiguous wording will be construed against the drafter provided the contract is also construed as a whole." Id. at 722 (emphasis added). This principle, which in the archaic parlance of the common law was known as contra proferentem ("against the offeror"), may be the transcendent principle for resolving ambiguous language in insurance policies. If an insurance policy is ambiguous, then the policy is to be interpreted against the drafter. See Donaldson v. Urban Land Interests, Inc., 211 Wis. 2d 224, 230, 564 N.W.2d 728 (1997).

¶ 45. A court that reviews a contract that is not an insurance policy has some latitude to deem an interpretation plausible and therefore reasonable because the court is specifically empowered to consider the consequences of the interpretation in determining which competing interpretation should govern. As this court once put it:

the court may look to the consequences which could result should it adopt one construction as opposed to another, because where there is ambiguity the more reasonable meaning should be given on the probability that persons situated as the parties were would be expected to contract in that way as opposed to a way which works an unreasonable result.

Lee v. Wis. Physicians Serv., 76 Wis. 2d 353, 359, 252 N.W.2d 24 (1977).

¶ 46. If a court deems an insurance policy ambiguous, however, the court is quite constrained in its resolution under the principles of contra proferentem. This cannot and does not mean, however, that a court must embrace any grammatically plausible interpretation that an insured might create for the purposes of litigation without regard to whether the consequences of that interpretation square with the reasonable expectations of insureds.

¶ 47. A court must be careful not to lose sight of the goal of judicial construction, which is to advance the reasonable expectations of the parties. Courts dealing with insurance policies must give especially keen attention to the expectations of insureds, so long as they do not abandon reasonableness in the process. Even the doctrine of contra proferentem incorporates the notion that "the policy's terms should be interpreted as they would be understood from the perspective of a reasonable person in the position of the insured," Donaldson, 211 Wis. 2d at 230, not simply adhere to any interpretation that is grammatically plausible and creates coverage for insureds.

¶ 48. If an insured advances a grammatically plausible interpretation, but that interpretation does not square with what the insured would have understood the policy to mean absent a monetary incentive, then that reading should be rejected as unreasonable. The tenets of insurance policy construction provide that there is ambiguity where a policy is susceptible to more than one reasonable interpretation. Folkman, 264 Wis. 2d 617, ¶ 13; Danbeck, 245 Wis. 2d 186, ¶ 10.

¶ 49. We look then at the reasonable expectations of the insured here. The primary definition of "under-insured motor vehicle" in this policy conveys to the insured that this policy follows the second view of UIM coverage. This policy is not the type that defines "un-derinsured motor vehicle" by comparing the insured's total damages to the tortfeasor's limits of liability. When, as here, a UIM policy defines "underinsured motor vehicle" with reference to the tortfeasor's limits of liability and the limits of UIM coverage, a reasonable insured should expect that UIM coverage to put the insured in the same position the insured would have occupied had the tortfeasor's liability limits been the same as the UIM limits.

¶ 50. In this instance, the drunk driver purchased $50,000 more in liability coverage than the Langridges purchased in UIM coverage. Thus, Nancy Langridge skips over paragraph "a" to paragraph "b." Reasonable insureds should expect paragraph "b" to apply where multiple parties suffered bodily injury in the accident and the tortfeasor's limits of liability have been reduced or exhausted in payment to others suffering bodily injury.

¶ 51. In this case, an insured who suffered no bodily injury seeks to recover for her spouse's wrongful death after the tortfeasor's "limits of liability for bodily injury" had been fully paid. If we were to accept Nancy Langridge's reading of the policy, then every time a wife and husband were both insured under the same UIM coverage, the surviving spouse would always be able to assert per person UIM coverage unless the tortfeasor's policy limits exceeded the amount paid to the estate. To illustrate, if the drunk driver who killed Nancy Langridge's husband had $500,000 per person liability limits, and that entire amount was paid to William Langridge's estate, Nancy Langridge would be able to make the same argument she is making now. Payment to an estate would never eliminate a wrongful death claim under paragraph "b" unless the tortfeasor did not pay out its limits of liability and had, say, $100,000 left. Mrs. Langridge's reading of the policy essentially transforms UIM into a form of life insurance for a spouse killed in an automobile accident. This is not consistent with a reasonable insured's understanding of the UIM policy.

¶ 52. Another way of saying this is that a tortfeasor's motor vehicle would likely be transformed into an "underinsured motor vehicle" whenever another insured had a wrongful death claim. This would un-tether the definition of "underinsured motor vehicle" from the concept it was intended to define. It would transform a policy embodying the second view of UIM coverage into a policy delivering the first view of UIM coverage. See ¶¶ 16, 17, supra. A reasonable insured would not expect that the definition of "underinsured motor vehicle" would shift so dramatically from one paragraph to another.

¶ 53. In contrast, State Farm's reading of the policy — that "the insured" here must mean William Langridge, "the insured" who suffered the bodily injury — is contextually harmonious with the rest of the policy. If (1) persons other than William Langridge suffered bodily injury; (2) received payment from the tortfeasor's liability insurer; and (3) thereby reduced that policy's limits of liability such that the tortfeasor's limits of liability provided less coverage for an insured than the UIM policy, then the tortfeasor's vehicle would be "underinsured." A rational consumer who purchases this coverage would not expect that the policy would provide an independent fund for wrongful death irrespective of the amount of coverage a tortfeasor has purchased, e.g., the first view of UIM coverage.

¶ 54. Accordingly, we conclude that there is only one reasonable reading of paragraph "b." When this policy references payments to persons other than "the insured," "the insured" can only reasonably refer to William Langridge. The Langridge policy is not ambiguous because the disputed provision is susceptible to only one reasonable interpretation.

¶ 55. To sum up, when we analyze the drunk driver's vehicle on the facts before us, we conclude that it was not an "underinsured motor vehicle." The drunk driver's vehicle had a per person liability limit greater than the per person UIM limit in the Langridge policy and the drunk driver's per person limit of liability was completely paid out to the only "insured" who had an independent claim for bodily injury, William Langridge. Under the policy, Mrs. Langridge had a derivative claim for her husband's bodily injury. She had a right to pursue that derivative claim whether or not she suffered bodily injury, but only until the tortfeasor's per person limit of liability was exhausted. She did not have her own independent claim under the policy. Her interpretation of paragraph "b" to the contrary is unreasonable and in conflict with the expectation of a reasonable insured. Because the drunk driver's vehicle was not an "underinsured motor vehicle," the Langridge policy provided no UIM coverage. Accordingly, the decision of the court of appeals is affirmed.

By the Court. — The decision of the court of appeals is affirmed.

¶ 56. DIANE S. SYKES, J., did not participate.

ANN WALSH BRADLEY, J.

¶ 57. {dissenting). The majority concludes that the policy unambiguously provides no coverage to Nancy Langridge for her wrongful death claim. Its essential analysis for this conclusion is limited to only three paragraphs sandwiched in the middle of the opinion. Because I believe that the three paragraphs of analysis do not support the majority's conclusion and that any ambiguity should be construed against State Farm, I respectfully dissent.

¶ 58. Initially, the focus of this case was whether Langridge had to sustain bodily injury in order to collect on her claim. State Farm denied Langridge's claim on the basis that she "was not involved .in the accident." When asked to clarify, State Farm explained that Langridge was not entitled to coverage under the policy because she "did not sustain her own bodily injuries in the accident."

¶ 59. The circuit court awarded summary judgment to State Farm, subscribing to its then unambiguous interpretation of the policy. It determined that Langridge could not collect on her claim because "the insured attempting to claim underinsured motorist coverage must have suffered a bodily injury."

¶ 60. The court of appeals affirmed the judgment of the circuit court. It too concluded that Langridge "must have sustained a bodily injury herself. .. because under the policy only those who suffered bodily injury may recover." State Farm Mut. Auto. Ins. Co. v. Langridge, No. 02-3353-FT, unpublished order at 3 (Wis. Ct. App. June 4, 2003).

¶ 61. Now State Farm changes its course. Although successful at both the circuit court and court of appeals, it now concedes that the language of the policy should be interpreted to provide that Langridge did not have to suffer bodily injury in order to recover under the policy. Indeed, in this court, State Farm advances a different argument altogether, maintaining that Lan-gridge cannot collect on her claim because the definition of an underinsured motor vehicle is not met.

¶ 62. The provision in dispute is paragraph "b" of the "underinsured motor vehicle" definition. That definition provides in relevant part:

Underinsured Motor Vehicle — means a land motor vehicle....
2. whose limits of liability for bodily injury 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.

(Emphasis added).

¶ 63. Langridge maintains that the vehicle driven by the drunk driver meets the policy's definition of an "underinsured motor vehicle." Specifically, she asserts that paragraph "b" of the definition renders the drunk driver's vehicle "underinsured" as to her. Langridge notes that she is "insured" under the policy and that the drunk driver's liability limits were paid to persons other than her, namely her husband.

¶ 64. State Farm contends that Langridge is attempting to split her husband's bodily injury claim into two in order to obtain coverage under the policy. Although it acknowledges that Langridge could qualify as "the insured" under the plain language of paragraph "b," it argues that the provision must be read in context of the whole policy. Based upon such context, State Farm submits that the only relevant question is whether the drunk driver was underinsured as to Langridge's husband. Because he was not, it reasons, the drunk driver cannot be underinsured as to Langridge.

¶ 65. In concluding that the disputed language of the policy is unambiguous and that it precludes recovery for Langridge, the majority engages in substantial extraneous discussion. From the sheer volume of discussion, a red flag arises, suggesting that if it takes that much discussion to conclude that a single sentence in a policy is clear and unambiguous, something is suspect.

¶ 66. The analysis of the majority is suspect with good cause. Although it maintains that the language is "not ambiguous," the majority engages in a lengthy discussion, describing what a court does if the language is deemed ambiguous. Majority op., ¶¶ 43-46. This discussion serves to mask the inadequate reasoning of its conclusion.

¶ 67. At this point, it may be best for the reader to turn back to the three paragraphs of analysis which underpin the majority's conclusion. These paragraphs, 38, 39, and 40, comprise the total analysis set forth in Section D.l, which interprets the pivotal policy provision at issue in this case. According to the majority, "the outcome of this case turns on whether 'the insured' in paragraph 'b' could reasonably refer to Nancy Lan-gridge." Id., ¶ 37.

¶ 68. In paragraph 38, the majority observes that if paragraph "b" had referred to "AN insured" instead of "THE insured," there would be no issue in this case. Although this is true, it is completely beside the point. The language of paragraph "b" is "the insured." While State Farm could have very easily drafted its policy language differently so as to preclude Langridge's claim (e.g., requiring that an insured suffer his or her own bodily injury in order to recover), it chose not to do so.

¶ 69. In paragraph 39, the majority notes that if Langridge were not a named insured, she could make a claim representing the estate under paragraph "a." Again, this analysis misses the mark. All agree that Langridge is a named insured. Her claim of wrongful death is independent of her husband's estate. Thus, the only relevant inquiry is whether the plain language of paragraph "b" renders the drunk driver's vehicle under-insured as to her.

¶ 70. Finally, in paragraph 40, the majority asks, "[H]ow can [Langridge] expect an interpretation of the policy that an insured who suffers no bodily injury has an independent claim equal to the claim of a surviving insured who actually suffers bodily injury?" This question, of course, echoes the earlier misinterpretations of the circuit court and court of appeals. State Farm has now abandoned the position that bodily injury is required to state a claim; the majority should do the same.

¶ 71. On its face, State Farm's policy appears to provide coverage for Langridge's wrongful death claim. There is no dispute that she is "insured" under the policy. Rather, the dispute centers on whether Lan-gridge can meet the definition of underinsured motor vehicle under paragraph "b." That paragraph refers to a land motor vehicle whose limits of liability for bodily injury "have been reduced by payments to persons other than the insured to less than the limits of liability of this coverage."

¶ 72. Here, Langridge is "the insured." The limits of liability for bodily injury have been reduced by payments to persons other than Langridge, that is, by payments to her husband for his conscious pain and suffering. Additionally, the limits of liability of the drunk driver have been reduced to less than the limits of liability of the coverage. The policy limits of the drunk driver were exhausted via the payment to Langridge's husband.

¶ 73. I believe that the more reasonable interpretation of the language of paragraph "b" is as stated above. Even if, as State Farm asserts, it is reasonable to interpret "the insured" in paragraph "b" as referring to Langridge's husband rather than to Langridge, then we are left with two reasonable interpretations of this policy language. Words or phrases of an insurance policy are ambiguous if they are susceptible to more than one reasonable construction. Badger Mut. Ins. Co. v. Schmitz, 2002 WI 98, ¶ 51, 255 Wis. 2d 61, 647 N.W.2d 223. If the policy language is ambiguous, we construe it against the drafter. Id. I therefore conclude that Langridge is entitled to coverage under our traditional canons of construction.

¶ 74. In sum, the majority once again invokes the mantra of unambiguous policy language to defeat an insured's reasonable expectation of recovery. Its decision to do so boils down to three paragraphs of weak and unsupportable analysis. I determine that the policy provision at issue is ambiguous and should he construed against State Farm. Accordingly, I respectfully dissent.

¶ 75. I am authorized to state that Chief Justice SHIRLEY S. ABRAHAMSON, joins this dissent.

        State Farm Mut. Auto. Ins. Co. v. Langridge, No. 02-3353-FT, unpublished order (Wis. Ct. App. June 4, 2003).

       Langridge also alleged that State Farm acted in bad faith by denying coverage.

       This provision is similar to the clause American Family Mutual Insurance Company relied on in Mullen v. Walczak, 2003 WI 75, ¶ 4, 262 Wis. 2d 708, 664 N.W.2d 76. Their "limits of liability" for uninsured motorist coverage provided that the "limit for 'each person' is the maximum for all damages sustained by all persons as the result of bodily injury to one person in any one accident."

       This principle was reaffirmed last term under different circumstances in Mullen, 262 Wis. 2d 708.

        See, e.g., State Farm Mut. Auto. Ins. Co. v. Villicana, 692 N.E.2d 1196, 1198 (Ill. 1998); Kraly v. Vannewkirk, 635 N.E.2d 323, 325 (Ohio 1994); Pitchford v. State Farm Mut. Auto. Ins. Co., 934 P.2d 616, 618 (Or. Ct. App. 1997).

       Contrary to the dissent's assertion that ¶¶ 38-40 of this opinion constitutes our "essential analysis," we note that these paragraphs simply serve to focus the discussion within the appropriate analytical framework. Given the complex nature of UIM cases, guiding the reader through the intricacies of UIM coverage facilitates reader understanding. We direct the reader to Section D.2 of this opinion, especially ¶¶ 51-55, wherein we explain why Nancy Langridge's interpretation of the definition of "Underinsured Motor Vehicle" is unreasonable, therefore rendering the policy unambiguous with respect to the issues presented in this case.

       A wrongful death claim belongs to the surviving spouse, not the deceased's estate. See Miller v. Luther, 170 Wis. 2d 429, 436, 489 N.W.2d 651 (Ct. App. 1992). "The action for wrongful death does not belong to the estate of the deceased." Weiss v. Regent Props. Ltd., 118 Wis. 2d 225, 230, 346 N.W.2d 766 (1984) (quoting Nichols v. United States Fid. and Guar. Co., 13 Wis. 2d 491, 496, 109 N.W.2d 131 (1961)).

       The language then at issue provided in relevant part:

        UNDERINSURED MOTOR VEHICLE - COVERAGE W
      You have this coverage if "W" appears in the "Coverages" space on the declarations page.
      We will pay damages for bodily injury an insured is legally entitled to collect from the owner or driver of an underinsured motor vehicle. The bodily injury must be caused by accident arising out of the operation, maintenance or use of an underin-sured motor vehicle.