author: JON E WILCOX, J.

text:
    Glen H. Rocker and Theresa Rocker, Plaintiffs-Appellants, v. USAA Casualty Insurance Company, General Casualty Company of Wisconsin, and Cornell Cousins, Defendants-Respondents.
    Supreme Court

      No. 2004AP356.

      Oral argument November 16, 2005.

      Decided March 30, 2006.

    2006 WI 26
    (Also reported in 711 N.W.2d 634.)

      For the plaintiffs-appellants there were briefs by Virginia M. Antoine, Timothy S. Trecek, and Habush Habush & Rottier S.C., Milwaukee, and oral argument by Timothy S. Trecek.

    For the defendant-respondent USAA Casualty Insurance Company, there was a brief by Frederick J. Smith and Peterson, Johnson & Murray, S.C., Milwaukee, and oral argument by Frederick J. Smith.

    For the defendant-respondent General Casualty Company of Wisconsin, there was a brief by Jacqueline E. Frakes and Eiche & Frakes, S.C., Milwaukee, and oral argument by Jacqueline E. Frakes.

   JON E WILCOX, J.

¶ 1. This case is before the court on certification from the court of appeals, pursuant to Wis. Stat. § 809.61 (2003-04). The appellants, Glen H. Rocker and Theresa Rocker (the Rockers) appealed an order of the Circuit Court for Milwaukee County, Clare L. Fiorenza, Judge, wherein the court dismissed all claims and causes of action with prejudice against defendant USAA Casualty Insurance Company (USAA) and dismissed defendant General Casualty Company of Wisconsin (General Casualty).

¶ 2. Glen Rocker (Rocker) was injured while working at an Octopus Car Wash (Octopus) when a coemployee, Cornell Cousins (Cousins), accidentally drove a customer's motor vehicle into him. General Casualty insured Octopus, while USAA insured the customer, Andrew Paretti (Paretti). The Rockers brought suit against General Casualty, USAA, and Cousins. General Casualty filed a motion for declaratory and summary judgment arguing that its comprehensive insurance policy did not cover Rocker's injuries. After General Casualty's motion was granted and the Rockers' claims against General Casualty were dismissed with prejudice, USAA brought its own motion for declaratory judgment, requesting that the circuit court declare that USAA's maximum amount of coverage with respect to Cousins was the $25,000 minimum amount required under the Wisconsin financial responsibility law. The circuit court also granted USAA's motion, upon payment of its $25,000 policy limit to the court. After the court issued its final order on December 16, 2003, the Rockers appealed.

¶ 3. The court of appeals certified the following questions: (1) Does a full-service car wash fall within the definition of a "motor vehicle handler" found in Wis. Stat. § 632.32(2)(b); (2) Does the holding in Heritage Mutual Insurance Co. v. Wilber, 2001 WI App 247, 248 Wis. 2d 111, 635 N.W.2d 631 — that a commercial general liability policy providing an endorsement for non-owned automobile liability falls within Wis. Stat. § 632.32(l)'s scope provision — retain its vitality, since § 632.32 has been amended, and significantly altered, and now requires, inter alia, uninsured motorist coverage, medical payments and coverage, and prohibits exclusion of coverages for relatives of the insured?; (3) Was Gorzalski v. Frankenmuth Mutual Insurance Co., 145 Wis. 2d 794, 429 N.W.2d 537 (Ct. App. 1988), decided correctly when it failed to enforce the requirement of coverage for a motor vehicle handler as mandated by Wis. Stat. § 632.32(6)(a)?

¶ 4. We conclude the following: (1) A full-service car wash is a motor vehicle handler under § 632.32(2)(b) because it is a "service station"; (2) The holding of Heritage Mutual retains its validity, and the requirements of § 632.32(6)(a) apply to commercial general liability policies and commercial umbrella policies that provide automobile liability coverage; (3) Gorzalski was incorrectly decided, and we overrule its holding as it pertains to coemployee exclusions.

¶ 5. As such, the final order issued by the circuit court on December 16, 2003, is reversed and the cause is remanded for further proceedings consistent with this opinion.

¶ 6. On February 3, 1999, Paretti drove his 1999 Mercury Marquis to an Octopus located in Milwaukee. Paretti had been a customer for many years, and per the standard procedure, he proceeded to an overhead door area and waited for an attendant. Paretti ordered a standard wash, left the car running and in park, and went inside an enclosed area to pay the bill and receive a claim ticket. An employee then drove the car onto an automatic conveyor for washing. At the end of the conveyor, Cousins got into the car to drive it off the conveyor and into the drying area. While driving the vehicle off the conveyor, Cousins allegedly stepped too hard on the accelerator, causing the vehicle to lunge forward, hit the wall of the car wash and strike Rocker, his coworker, who was standing in the drying area. Rocker was seriously injured by the accident.

¶ 7. Along with his wife, Rocker filed a lawsuit against General Casualty, USAA, and Cousins on January 31, 2002. General Casualty filed a motion for declaratory and summary judgment on May 15, 2002, on the grounds that the comprehensive policy it issued to Octopus did not provide liability coverage to Cousins for the injuries sustained by Rocker as a result of the alleged negligent acts of Cousins.

¶ 8. General Casualty had issued a comprehensive insurance policy to Octopus prior to the accident. This policy included commercial general liability coverage with a limit of $500,000 and commercial umbrella coverage with a limit of $2,000,000. The commercial general liability coverage provisions of the policy read in pertinent part as follows:

SECTION I - COVERAGES
COVERAGE A. BODILY INJURY AND PROPERTY DAMAGE LIABILITY
1. Insuring Agreements
a. We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" or "property damage" to which this insurance applies....
2. Exclusions
This insurance does not apply to:
e. Employer's Liability
(1) An "employee" of the insured arising out of and in the course of:
(a) Employment by the insured; or
(b) Performing duties related to the conduct of the insured's business ....
g. Aircraft, Auto or Watercraft
"Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading."
This exclusion does not apply to:
(3) Parking an "auto" on, or on the ways next to, premises you own or rent, provided the "auto" is not owned by or rented or loaned to you or the insured[.]
SECTION II - WHO IS AN INSURED
2. Each of the following is also an insured:
a. Your "employees"... but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business. However, none of these "employees" is an insured for:
(1) "Bodily injury" or "personal injury":
(a) To you ... or to a co-"employee" while that co-"employee" is either in the course of his or her employment or performing duties related to the conduct of your business....

¶ 9. Following the main provisions of the commercial general liability coverage, the policy contains an endorsement entitled: "OPERATION OF CUSTOMERS AUTOS ON PARTICULAR PREMISES" which provides as follows:

A. Exclusion g. of Paragraph 2., Exclusions of Coverage A. - Bodily Injury and Property Damage Liability (Section I - Coverages) does not apply to any "customer's auto" while on or next to those premises you own, rent or control that are used for any of the following businesses:
1. Auto Repair or Service Shops;
2. Car Washes;
3. Gasoline Stations;
4. Tire Dealers;
5. Automobile Quick Lubrication Services.

¶ 10. General Casualty also issued commercial umbrella coverage to Octopus as part of its comprehensive insurance policy. This portion of the policy provides bodily injury coverage for an "insured" defined in the policy as:

Your "employees"... but only for acts within the scope of their employment by you or while performing duties related to the conduct of your business. However, none of these "employees" is an insured for:
(1) "Bodily injury" or "personal injury":
(a) To you ... or to a co-"employee" while that co-"employee" is either in the course of his or her employment or performing duties related to the conduct of your business[.]

¶ 11. The commercial umbrella coverage also contains an automobile liability endorsement which modifies the coverage as follows:

Except to the extent coverage is available to you or the insured in the "underlying insurance," this insurance shall not apply to "bodily injury," "property damage," "personal injury" or "advertising injury" arising out of the ownership, maintenance, use or entrustment to others of any "auto" owned or operated by or rented or loaned to any insured. Use includes operation and "loading or unloading."

¶ 12. After briefing and a hearing held before Judge Thomas E Donegan, General Casualty's declaratory and summary judgment motion was granted on July 24, 2002, and the Rockers' claims against General Casualty were dismissed with prejudice. The circuit court concluded that General Casualty's policy was unambiguous and excludes from the definition of insured an employee who injures another employee during the course of their employment. Furthermore, the court recognized the Gorzalski decision, 145 Wis. 2d 794, as controlling precedent.

¶ 13. The Rockers, Cousins, and USAA each sought appellate review. However, because General Casualty remained in the case as worker's compensation insurer, the appeals were not considered to be of right, and the court of appeals denied appellate review September 16, 2002. The Rockers also sought review in this court, but we denied the petition.

¶ 14. For its part, USAA had issued two policies to Paretti: a personal auto policy with limits of $300,000/ $500,000 and a personal umbrella policy with a limit of $2,000,000. The "INSURING AGREEMENT" of the personal auto policy stated in part: "We will pay damages for BI [bodily injury] or PD [property damage] for which any covered person becomes legally responsible because of an auto accident." The term "covered person" is defined to include "[a]ny person using your covered auto." The term "your covered auto" is defined to include "[a]ny vehicle shown in the Declarations." Paretti's Mercury automobile that Cousins operated is shown in the Declarations.

¶ 15. The USAA personal auto policy further contains the following exclusion regarding an "auto business":

A. We do not provide Liability Coverage for any person:
6. While employed or otherwise engaged in the auto business. This exclusion does not apply to the ownership, maintenance or use of:
a. your covered auto by any person, if there is no other valid and collectible insurance, whether such insurance is primary, excess or contingent, at limits equal to or greater than the limits of liability required by the Wisconsin financial responsibility law, available to respond for damages for which that person is legally responsible. In this event, we will provide liability coverage for that person up to the limits of liability required by the Wisconsin financial responsibility law.

¶ 16. As defined in the policy, the term "auto business" means "the business of altering, customizing, leasing, parking, repairing, road testing, delivering, selling, servicing, or storing vehicles."

¶ 17. Paretti also had a personal umbrella policy through USAA. Under an endorsement entitled "WISCONSIN SPECIAL PROVISIONS" the "LIABILITY COVERAGE" of the umbrella policy provided the following:

We will pay for damages an insured becomes legally obligated to pay in excess of the retained limit. We will also pay for damages arising out of the ownership, maintenance, use, loading or unloading of a motor vehicle below the retained limit, but only up to the amount required by the Wisconsin Financial Responsibility law and only in the event that there is no other valid collectible insurance with at least those limits available....

¶ 18. Additionally, the endorsement changed the definition of an "insured" to exclude "[s]ales agencies, repair shops, service stations, storage garages or public parking lots, their owners, agents or employees unless there is no other valid and collectible insurance and then only up to the limits required by the Wisconsin Financial Responsibility law."

¶ 19. Due to judicial rotation, Judge Clare L. Fiorenza took over Judge Donegan's calendar on January 13, 2003. USAA filed a motion for declaratory judgment on April 10, 2003, asking the circuit court to declare Octopus a "motor vehicle handler," and as a result, § 632.32(5)(b) entitled USAA to limit its liability with regard to coverage provided to Cousins to the $25,000 amount under Wisconsin's financial responsibility law. USAA also reserved its right to move for summary judgment dismissing all claims against it should the court of appeals reverse the circuit court's July 24, 2002, order.

¶ 20. After briefing and a hearing, the circuit court entered an order on July 3, 2003, granting USAA's motion for declaratory judgment, finding that Octopus was a "service station" under § 632.32(2)(b)3., and therefore a "motor vehicle handler." The court further determined that USAA's policies of insurance issued to Paretti permitted a reduction of USAA's coverage of Cousins to $25,000.

¶ 21. On September 12,2003, on motion of USAA, the court issued an order declaring that USAA would be dismissed from the case upon payment of its $25,000 policy limit.

¶ 22. On December 16, 2003, the circuit court entered a final order dismissing USAA and General Casualty as worker's compensation insurer. It is from this final order that the Rockers appealed. After briefing and oral argument in the court of appeals, this matter was certified to this court.

hH h-H

¶ 23. In this case we are called upon to determine whether Octopus is a "motor vehicle handler" under Wis. Stat. § 632.32(2)(b) and determine whether Wis. Stat. § 632.32(6)(a) applies to commercial general liability policies and commercial umbrella policies that provide automobile liability coverage. "Statutory interpretation is a question of law that we review de novo." State v. Stenklyft, 2005 WI 71, ¶ 7, 281 Wis. 2d 484, 697 N.W.2d 769. "[0]ur goal in interpreting statutory provisions is to give effect to the intent of the legislature, which we assume is expressed in the text of the statute." Id. (citing State ex rel. Kalal v. Dane County Cir. Ct., 2004 WI 58, ¶ 44, 271 Wis. 2d 633, 681 N.W.2d 110). "To this end, absent ambiguity in a statute, we do not resort to extrinsic aids of interpretation and instead apply the plain meaning of the words of a statute in light of its textually manifest scope, context, and purpose." Id. (citing Kalal, 271 Wis. 2d 633, ¶¶ 45-46).

¶ 24. Additionally, "we have repeatedly held that statutory interpretation 'begins with the language of the statute. If the meaning of the statute is plain, we ordinarily stop the inquiry.'" Kalal, 271 Wis. 2d 633, ¶ 45 (quoting Seider v. O'Connell, 2000 WI 76, ¶ 43, 236 Wis. 2d 211, 612 N.W.2d 659). "Statutory language is given its common, ordinary, and accepted meaning, except that technical or specially-defined words or phrases are given their technical or special definitional meaning." Id. (citations omitted).

HH HH f — I

¶ 25. We first determine whether Octopus is a "motor vehicle handler" under Wis. Stat. § 632.32(2) (b). The Rockers, USAA, and Cousins argue that if Octopus is a motor vehicle handler, then we must conclude that the coemployee coverage limitations in General Casualty's comprehensive insurance policy are invalid under § 632.32(6)(a), and that General Casualty must provide coverage to Cousins to the full extent of the policy limits. Furthermore, if Octopus is a motor vehicle handler, then USAA may limit the coverage provided to Cousins, pursuant to § 632.32(5)(b).

¶ 26. Alternatively, the Rockers argue, if the car wash is not a motor vehicle handler, then Wis. Stat. § 632.32(6)(a) does not apply, and the coemployee coverage limitations in General Casualty's policy are enforceable. Accordingly, General Casualty would not be required to provide coverage to Cousins. Furthermore, USAA cannot then limit the coverage provided to Cousins to $25,000, and instead USAA must provide coverage to Cousins to the full extent of the policy limits in the policies issued to Paretti.

¶ 27. We begin our analysis, as we must, with the language of the statute. Wisconsin Stat. § 632.32(2)(b) defines the term "motor vehicle handler" as follows:

"Motor vehicle handler" means any of the following:
1. A motor vehicle dealer, as defined in s. 218.0101(23)(a).
2. A lessor, as defined in s. 344.51(lg)(a), or a rental company, as defined in s. 344.51(lg)(c).
3. A repair shop, service station, storage garage or public parking place.

¶ 28. The Rockers, USAA, and Cousins contend that the circuit court correctly held that Octopus is a service station. General Casualty disputes this conclusion. We agree with the circuit court and conclude that based on the plain meaning of the phrase, a full-service car wash such as Octopus, where vehicles are serviced and driven by employees, is a service station and therefore a statutory motor vehicle handler.

¶ 29. General Casualty principally contends that the term "service station" should be interpreted according to its common usage as of 1975 when the term was initially introduced in the formulation of Wis. Stat. § 632.32 (1975-76). In other words, General Casualty asserts that a service station was generally recognized as a gasoline or filling station, where an attendant would fill up the gas tank, check the oil, check the tires, and perform other similar services while the customer waited in the automobile. See Gullickson v. Western Cas. & Sur. Co., 17 Wis. 2d 220, 223-24, 116 N.W.2d 121 (1962) (describing the activities of a service station as the term was understood in 1962). Despite this historical understanding of a service station, we believe that such an interpretation is unreasonably restrictive given the plain meaning of the term "service station" and the broad construction generally applied to § 632.32. See Home Ins. Co. v. Phillips, 175 Wis. 2d 104, 111, 499 N.W.2d 193 (Ct. App. 1993) ("Section 632.32 is a remedial statute, and must be construed broadly so as to increase rather than to limit coverage.").

¶ 30. The term "service station," as it appears in subparagraph 3 of Wis. Stat. § 632.32(2)(b), is not modified by any other word. It simply describes one type of motor vehicle handler.

¶ 31. Here, Octopus is a "full-service" car wash that provides numerous services to their customers' motor vehicles. As a routine part of its business, Octopus employees are required to operate their customers' motor vehicles in order to provide the various services purchased. According to Jeffrey Dropik, the current owner/operator of Octopus and the manager at the time of the accident, the car wash routinely sells the following services: washing, vacuuming, waxing, tire dressing, window cleaning, towel drying, and additional detailing. Octopus also provides the service of having an employee drive the customer's car on and off the conveyor belt and to the checkout area.

¶ 32. Moreover, the context in which the term "motor vehicle handler" is used in Wis. Stat. § 632.32 supports the broad construction advocated by the Rockers, USAA, and Cousins. For example, § 632.32(6)(a) suggests that a statutory "motor vehicle handler" is an entity that regularly handles its customers' motor vehicles. Section 632.32(6)(a) reads as follows: "No policy issued to a motor vehicle handler may exclude coverage upon any of its officers, agents or employees when any of them are using motor vehicles owned by customers doing business with the motor vehicle handler." (Emphasis added.) As part of its service to its customers, the employees of Octopus routinely "use" each customer's motor vehicle. Under the definition of Wis. Stat. § 632.32(2)(c), "using" includes "driving, operating, manipulating, riding in and any other use." It is irrelevant that the employees operate the vehicles for a short time frame or drive the vehicle a short distance. Octopus's operation of motor vehicles is very similar to other recognized motor vehicle handlers under Wis. Stat. § 632.32(2)(b) in that a customer gives a business employee permission to operate his or her motor vehicle for some length of time in order that some service or services may be provided.

¶ 33. In sum, in light of the plain meaning of the term "service station," and the broad scope of services Octopus provides, which includes driving its customers' vehicles on and off a conveyor belt, we hold that a "full-service" car wash such as Octopus is a service station and thus a statutory "motor vehicle handler" under Wis. Stat. § 632.32(2)(b)3.

IV

¶ 34. Having determined that Octopus is a motor vehicle handler, it would seem evident that, on its face, Wis. Stat. § 632.32(6)(a) prohibits the coemployee coverage limitation contained in General Casualty's comprehensive insurance policy. Again, General Casualty's policy essentially maintains that an employee is not an insured for bodily injury or personal injury to a coem-ployee while that coemployee is in the course of his or her employment. Section 632.32(6)(a) provides that "[n]o policy issued to a motor vehicle handler may exclude coverage upon any of its officers, agents or employees when any of them are using motor vehicles owned by customers doing business with the motor vehicle handler."

¶ 35. Despite this unambiguous language, General Casualty argues that Wis. Stat. § 632.32, as a whole, does not apply to its comprehensive insurance policy. If it did, General Casualty reasons, an insurer would be required to assume a risk which it did not contemplate and for which it received no premium. As such, General Casualty contends that the holding in Heritage Mutual, 248 Wis. 2d 111, ¶ 17, in which the court of appeals held that § 632.32(6) applied to a commercial general liability policy which included coverage for non-owned vehicles, is no longer good law.

¶ 36. We conclude that under Wis. Stat. § 632.32(6)(a), General Casualty is required to provide coverage to Cousins because he was using a motor vehicle owned by a customer doing business with Octopus, and therefore, the coemployee coverage limitations in General Casualty's comprehensive insurance policy are invalid. We further conclude that the holding of Heritage Mutual is still good law.

¶ 37. According to Wis. Stat. § 632.32(1), "[e]xcept as otherwise provided, this section applies to every policy of insurance issued or delivered in this state against the insured's liability for loss or damage resulting from accident caused by any motor vehicle . . . ." Hence, the broad scope of the entire section is dependent upon whether a policy includes motor vehicle coverage, but each subsection can include provisions which exempt certain coverages from the scope as defined in § 632.32(1). Therefore, in any particular case, it is improper to conclude that, because one subsection has been held to apply to a certain type of policy, all the other subsections must be held to apply as well. Each subsection can provide its own exemption under the statutory framework.

¶ 38. The commercial general liability coverage issued as part of General Casualty's comprehensive insurance policy contains an endorsement entitled "OPERATION OF CUSTOMERS AUTOS ON PARTICULAR PREMISES" that provides liability coverage for customers' automobiles while on or next to the premises. Therefore, under Wis. Stat. § 632.32(1), the provisions of § 632.32 apply to General Casualty's policy "except as otherwise provided."

¶ 39. The statutory section at issue, Wis. Stat. § 632.32(6)(a), does not otherwise provide for an exclusion to the general scope of the omnibus statute. Because General Casualty provided automotive liability coverage to Octopus, General Casualty cannot narrow the application of § 632.32 simply because the policy was called a comprehensive insurance policy instead of a motor vehicle policy. See Heritage Mutual, 248 Wis. 2d 111, ¶ 16. No policy issued to a motor vehicle handler may exclude coverage under § 632.32(6)(a). "No policy means no policy." Bindrim v. B. & J. Ins. Agency, 190 Wis. 2d 525, 534, 527 N.W.2d 320 (1995).

¶ 40. This court first addressed whether the omnibus statute was applicable to a comprehensive liability policy in Nelson v. Ohio Casualty Insurance Co., 29 Wis. 2d 315, 139 N.W.2d 33 (1966). In Nelson, a City of Hartford employee was killed while in the course of his employment when he was run over by a city-ovmed dump truck. Id. at 317. The truck was operated by a coemployee during the unloading of the truck at a city-owned refuse dump, where another coemployee was also present. Id. Ohio Casualty Insurance Company (Ohio Casualty) had issued an automotive liability policy to the city covering the dump truck involved. Id. United Fire & Casualty Company (United) had issued a comprehensive liability policy to the city. Id. United's policy did not include within the definition of "insured" any employees of the city, and it excluded coverage to " 'automobiles if the accident occurs away from such premises or the ways immediately joining.'" Id. at 318 (citation omitted). Ohio Casualty argued that United's policy was required to extend coverage to the coemploy-ees pursuant to Wis. Stat. § 204.30(3) (1959-60), the predecessor to Wis. Stat. § 632.32(3). Id. at 319. United, on the other hand, argued "the omnibus coverage statute does not apply to a comprehensive liability policy which only insures motor vehicles operated on private premises or ways adjoining thereto." Id. at 320.

¶ 41. The Nelson court agreed with Ohio Casualty, concluding that no ambiguity existed in Wis. Stat. § 204.30(3) (1959-60), as it clearly referred back to the type of policy described in § 204.30(1), the predecessor to Wis. Stat. § 632.32(1). Id. We interpreted this statutory language as applying to "any policy which extends coverage to damage caused by [any] motor vehicle for which the insured is liable.... We deem it immaterial that this coverage is provided by a comprehensive liability policy rather than one confined to coverage of motor vehicles." Id. at 320-21. This holding was later referenced in Lukaszewicz v. Concrete Research, Inc., 43 Wis. 2d 335, 168 N.W.2d 581 (1969). That is, the omnibus statute "applies not only to automobile liability policies but to a comprehensive liability policy to the extent it covers an automobile liability." Id. at 341.

¶ 42. The court of appeals in Heritage Mutual addressed a nearly identical scenario as presented in this case. In Heritage Mutual, Douglas Wilber, an officer of Wilber's Truck World, a motor vehicle handler, was involved in a motor vehicle accident while driving a customer's vehicle from a meeting. Heritage Mutual, 248 Wis. 2d 111, ¶ 2. Heritage Mutual Insurance Company (Heritage) had issued Wilber's Truck World a commercial general liability insurance policy excluding coverage for liability arising from the use of an automobile. Id., ¶ 3. However, the policy included an endorsement which provided certain non-owned auto liability coverage. Id. The circuit court ultimately determined that the elements of Wis. Stat. § 632.32(6)(a) had been met and Heritage was required to provide coverage under its policy. Id., ¶ 6.

¶ 43. On appeal, Heritage argued that Wis. Stat. § 632.32(6)(a) did not apply to its policy because the policy was a general liability policy and because the non-owned auto liability coverage provided under the policy was optional. Id., ¶ 11. The court of appeals disagreed and concluded that based on the reasoning of Bindrim, 190 Wis. 2d 525, and the language of § 632.32(1), section 632.32(6)(a) applied to a general liability policy:

Using the same reasoning as Bindrim, we conclude that even though the Heritage policy is a general liability policy, Wis. Stat. § 632.32(6)(a) applies. While not required by law to offer automobile liability coverage, Heritage did provide coverage with the endorsement for non-owned auto liability. The policy covered Wilber's Truck World's liability resulting from an accident caused by a non-owned motor vehicle. The scope of § 632.32 applies to "every policy of insurance issued... against the insured's liability for loss or damage resulting from an accident caused by any motor vehicle...." Wis. Stat. § 632.32(1). Therefore, the policy was required to comply with § 632.32(6)(a).

Heritage Mutual, 248 Wis. 2d 111, ¶ 17.

¶ 44. The court concluded with the following:

The endorsement contains a clause that narrows the scope of the statute and excludes Wilber from coverage. Despite labeling the endorsement as a limitation rather than an exclusion, the end result is an endorsement that operates to exclude coverage where coverage would otherwise be available under the statute's plain terms. Because Wis. Stat. § 632.32(6)(a) applies and because the requirements for coverage have been met, Wilber is covered as a matter of law.

Id., ¶ 18.

¶ 45. Just as the insurance company in Heritage Mutual, General Casualty cannot reduce the scope of Wis. Stat. § 632.32(6)(a) simply because the motor vehicle coverage is issued as part of a comprehensive insurance policy. The statute applies despite the fact that General Casualty's policy excludes coverage for any vehicles owned by Octopus, and no vehicles are specifically described in the policy. There is no language in Wis. Stat. § 632.32(6)(a) that would otherwise provide under these circumstances to remove General Casualty's policy from the requirements of the omnibus statute.

¶ 46. Contrary to General Casualty's contention, Heritage Mutual is still good law despite the additional coverages added to the omnibus statute since this court's decision in Nelson, 29 Wis. 2d 315, because the application of Wis. Stat. § 632.32 is extremely straightforward. The language of § 632.32(1) unambiguously requires every insurance policy that provides motor vehicle liability coverage to meet the requirements of the other sections of the omnibus statute, unless otherwise provided. In light of the clear statutory language, we simply cannot reach a different result.

¶ 47. For its part, General Casualty argues that subjecting its policy to the requirements of Wis. Stat. § 632.32(6) (a) would then, in turn, require its policy to comply with Wis. Stat. §§ 632.32(3), (4), and (4m). First, these other subsections are not at issue in this case. Second, every subsection of § 632.32 does not automatically apply to all motor vehicle insurance policies. Again, the various provisions of the omnibus statute apply "except as otherwise provided." Wis. Stat. § 632.32(1). Whether a particular subsection of the omnibus statute applies to a commercial general liability policy or a commercial umbrella policy is determined by examining the specific language of that subsection to determine if it otherwise provides. Because we conclude that § 632.32(6)(a) applies to General Casualty's policy, we need not address the applicability of the other subsections of § 632.32 at this time.

¶ 48. General Casualty also argues that applying Wis. Stat. § 632.32(6)(a) to its policy requires it to assume a risk which it did not contemplate and for which it received no premium. This argument is unpersuasive. Simply put, if a subsection of the omnibus statute requires an insurer to provide a certain type of coverage, the insurer must provide the coverage even if the express terms of the policy do not provide the coverage. " 'Coverages omitted from an insurance contract may nevertheless be compelled and enforced as though a part thereof where the inclusion of such coverage is required by a properly enacted statute.'" Progressive Northern Ins. Co. v. Romanshek, 2005 WI 67, ¶ 13, 281 Wis. 2d 300, 697 N.W.2d 417 (quoting Amidzich v. Charter Oak Fire Ins. Co., 44 Wis. 2d 45, 53, 170 N.W.2d 813 (1969)).

¶ 49. In sum, we conclude that the plain language of Wis. Stat. § 632.32(6)(a) compels the conclusion reached in Heritage Mutual that the statute applies to commercial general liability policies and commercial umbrella policies that include motor vehicle liability coverage. Therefore, the coemployee coverage limitations in General Casualty's comprehensive insurance policy are invalid, and General Casualty is required to provide coverage to Cousins.

V

¶ 50. Finally, the court of appeals certified this appeal so that we may determine whether Gorzalski, 145 Wis. 2d 794, was decided correctly when it failed to enforce the requirement of coverage for a motor vehicle handler as mandated by Wis. Stat. § 632.32(6)(a). We conclude that Gorzalski was incorrectly decided because the court of appeals did not fully consider the plain language of § 632.32(6)(a), and it inappropriately relied on Dahm v. Employers Mutual Liability Insurance Co., 74 Wis. 2d 123, 246 N.W.2d 131 (1976). We therefore overrule the holding of Gorzalski as it pertains to coemployee exclusions, and as such, it is not controlling to the outcome of this decision.

¶ 51. In Gorzalski, Jack Gorzalski, an employee of Bob Tolkan Buick, Inc. (Bob Tolkan), a motor vehicle handler, was seriously injured when an automobile driven by a coemployee struck him. Gorzalski, 145 Wis. 2d at 797. The automobile was left by a customer at the garage for repairs. Id. Frankenmuth Mutual Insurance Company (Frankenmuth) had issued a policy to Bob Tolkan with a coemployee exclusion precluding liability for an employee or officer who causes bodily injury to any fellow employee in the course of his employment. Id. at 803. Gorzalski argued the coemployee exclusion violated Wis. Stat. § 632.32(6)(a). Id. The court of appeals concluded that the coemployee exclusion in Frankenmuth's policy was legal under the holding of Dahm:

[0]ur supreme court stated that the fellow employee exclusion clause will violate no rule of law in this state if it is held to be valid only where the injured party and the tortfeasor are employees of the named insured under the policy, and where the named insured employer is required to provide workmen's compensation coverage.

Id. at 804 (citing Dahm, 74 Wis. 2d at 131).

¶ 52. The Gorzalski court relied on Dahm despite significant differences between the cases that altered the legal consequences of the coemployee exclusion. The tortfeasor in Dahm, who was not an employee of an "automobile handler," caused an injury to a coem-ployee while operating a forklift owned by his employer. Dahm, 74 Wis. 2d at 125. By contrast, the tortfeasor in Gorzalski, who was an employee of a "motor vehicle handler," caused an injury to a coemployee by negligently operating a customer's motor vehicle. Because the policy in Gorzalski was issued to a motor vehicle handler, the insurer should have been required to comply with the plain language of Wis. Stat. § 632.32(6)(a). See Heritage Mutual, 248 Wis. 2d 118, ¶ 16. Dahm did not control because Dahm did not involve an "automobile handler" and thus did not involve the predecessor to § 632.32(6)(a), which governed "automobile handlers." In other words, Dahm involved a different statute than is at issue here, and the Gorzalski court incorrectly relied on the Dahm analysis without regard to the plain meaning of § 632.32(6)(a).

¶ 53. Moreover, the justification for upholding the coemployee exclusion in Dahm does not pertain to Gorzalski. Dahm was based on a situation where the injured party and tortfeasor were employees of the named insured, the tortfeasor was operating a vehicle owned or leased by the employer, and the employer was required to provide worker's compensation coverage. When the employer is required to provide worker's compensation, the coemployee exclusion operates to create no more or less coverage for the employer, as the named insured, than it does for the employee or coem-ployee. However, worker's compensation was not the sole remedy in Gorzalski because the tortfeasor was not operating a vehicle owned or leased by his employer. Wisconsin Stat. § 102.03(2) states in part that the worker's compensation statutes do not limit the right of an employee to bring an action against a coemployee for negligent operation of a motor vehicle not owned or leased by the employer. Unlike the tortfeasor in Dahm, Cousins will be exposed to large potential liability because worker's compensation is not the exclusive remedy. This will always be the case when a customer's auto is operated by an employee of a "motor vehicle handler." Moreover, an employee could become liable for all the worker's compensation benefits. See Wis. Stat. § 102.29(1). Therefore, the justification for upholding the validity of the coemployee exclusion in Dahm is not present under the facts of Gorzalski.

¶ 54. For these reasons, Gorzalski was wrongly decided, and we overrule that portion of its holding pertaining to the validity of Frankenmuth's coemployee exclusion. Contrary to Gorzalski's reasoning, courts should first consider the plain language of § 632.32(6)(a) when determining liability coverage under insurance policies issued to a motor vehicle handler, in instances when an employee injures a coemployee with a customer's vehicle.

VI

¶ 55. Because General Casualty is required to provide liability coverage to Cousins, USAA's coverage limit is correspondingly reduced to zero dollars. USAA issued a personal auto policy and a personal umbrella policy to Paretti, each of which contained exclusions that allow USAA to reduce its coverage limits in accordance with Wis. Stat. § 632.32(5)(b). This subsection reads as follows:

If the policy is issued to anyone other than a motor vehicle handler, it may limit the coverage afforded to a motor vehicle handler or its officers, agents or employees to the limits under s. 344.01(2)(d) and to instances when there is no other valid and collectible insurance with at least those limits whether the other insurance is primary, excess or contingent.

Wis. Stat. § 632.32(5)(b).

¶ 56. USAA paid $25,000 into an account through the clerk of courts because General Casualty had previously been dismissed from the case. Because we find that General Casualty is required to provide coverage, USAA is entitled to the $25,000 it paid to the court. In essence, USAA's policies issued to Paretti are inapplicable to the resolution of this action, and USAA is entitled to dismissal from this lawsuit.

¶ 57. In sum, we conclude the following: (1) A full-service car wash is a motor vehicle handler under Wis. Stat. § 632.32(2)(b) because it is a "service station"; (2) The holding of Heritage Mutual retains its validity and the requirements of § 632.32(6)(a) apply to commercial general liability policies and commercial umbrella policies that provide automobile liability coverage; (3) Gorzalski was incorrectly decided, and we overrule its holding as it pertains to coemployee exclusions.

¶ 58. As such, the final order issued by the circuit court on December 16, 2003, is reversed and the cause is remanded for further proceedings consistent with this opinion.

By the Court. — The order of the circuit court is reversed and the cause is remanded.

       All subsequent references to the Wisconsin Statutes are to the 2003-04 version unless otherwise indicated.

       The car wash at issue is referred to as both "Octopus Car Wash" and "University Car Wash" by the parties; however, there is no dispute that both names refer to the same entity. For consistency, we will use the name Octopus Car Wash (Octopus).

       General Casualty's motion was initially framed as a motion for declaratory judgment. However, General Casualty entitled its supporting brief as one for summary judgment. In its order granting General Casualty's motion, the circuit court also characterized it as one for declaratory and summary judgment. We will follow the characterization of the circuit court.

       General Casualty's comprehensive insurance policy included two pertinent coverage parts: (1) commercial general liability coverage; and (2) commercial umbrella coverage.

       General Casualty is both the liability insurer and the worker's compensation insurer for Octopus. General Casualty's role as the worker's compensation insurer is not at issue for purposes of this opinion.

       Rocker also filed suit against Ford Motor Company, the manufacturer of Paretti's vehicle, and Heiser Lincoln Mercury, Inc., the seller of Paretti's vehicle. Those entities were later dismissed by stipulation and order filed September 20, 2003.

       However, General Casualty remained an interested party because of payments made to Rocker pursuant to a worker's compensation policy issued to Octopus.

       Wisconsin Stat. § 632.32(6)(a) provides: "No policy issued to a motor vehicle handler may exclude coverage upon any of its officers, agents or employees when any of them are using motor vehicles owned by customers doing business with the motor vehicle handler."

       Wisconsin Stat. § 632.32(5)(b) provides:
      If the policy is issued to anyone other than a motor vehicle handler, it may limit the coverage afforded to a motor vehicle handler or its officers, agents or employees to the limits under s. 344.01(2)(d) and to instances when there is no other valid and collectible insurance with at least those limits whether the other insurance is primary, excess or contingent.

       At that time, the legislature defined an "automobile handler" as "an automobile sales agency, repair shop, service station, storage garage or public parking place." Wis. Stat. § 632.32(2)(a) (1975-76).

       General Casualty argues that the deposition of Jeffrey Dropik and the affidavit of Andrew Paretti should not be considered because this evidence was submitted to the circuit court in USAA's declaratory judgment motion after General Casualty had been dismissed as a liability insurer. We conclude that General Casualty made a strategic decision to rely solely on the coemployee coverage limitations in the Octopus policy in its motion for declaratory and summary judgment. As such, it cannot now contend that this evidence later presented by USAA in its own motion for declaratory judgment should be disregarded by this court.

       Wisconsin Stat. § 204.30(3) (1959-60) provides in part as follows:
      No such policy [insuring against damage to person or property caused by any motor vehicle] shall be issued or delivered in this state to the owner of a motor vehicle, unless it contains a provision reading substantially as follows: The indemnity provided by this policy is extended to apply, in the same manner and under the same provisions as it is applicable to the named assured, to any person or persons while riding in or operating any automobile described in this policy when such automobile is being used for purposes and in the manner described in said policy ....

       Wisconsin Stat. § 204.30(1) (1959-60) reads as follows:
      No policy of insurance against loss or damage resulting from accident or injury to a person, and for which the insured is hable, or against loss or damage to property caused by animals or by any motor vehicle, and for which the insured is hable, shah be issued or dehvered in this state ....

       The term "automobile handler" was a precursor to "motor vehicle handler." See § 171, ch. 102, Laws of 1979.

       Wisconsin Stat. § 102.03(2) states in pertinent part as follows:
      This section does not limit the right of an employee to bring action against any coemployee for an assault intended to cause bodily harm, or against a coemployee for negligent operation of a motor vehicle not owned or leased by the employer, or against a coem-ployee of the same employer to the extent that there would be liability of a governmental unit to pay judgments against employees under a collective bargaining agreement or a local ordinance.


source: Caselaw Access Project

author: ANN WALSH BRADLEY, J. LOUIS B. BUTLER, JR., J.

license: Public Domain

text:
    Dale Rebernick, Sandra Rebernick and Gregory Rebernick by his Guardian ad Litem, Plaintiffs-Appellants-Petitioners, v. Wausau General Insurance Company, Defendant, American Family Mutual Insurance Company, Defendant-Respondent.
    Supreme Court

      No. 2004AP487.

      Oral argument January 10, 2006.

      Decided March 30, 2006.

    2006 WI 27
    (Also reported in 711 N.W.2d 621.)

      For the plaintiffs-appellants-petitioners there were briefs by Thomas A. Ogorchock and Miller & Ogor-chock, S.C., Milwaukee, and oral argument by Thomas A. Ogorchock.

      For the defendant-respondent there was a brief by Emile H. Banks, Jr., Vicki L. Arrowood, and Emile Banks & Associates, LLC, Milwaukee, and oral argument by Emile H. Banks, Jr.

    An amicus curiae brief was filed by Beth Ermatinger Hanan and Gass Weber Mullins LLC, Milwaukee, on behalf of Wisconsin Insurance Alliance, Civil Trial Counsel of Wisconsin, and Property Casualty Insurers Association of America.
    An amicus curiae brief was filed by Lynn R. Laufen-berg and Laufenberg & Hoefle, S.C., Milwaukee, on behalf of the Wisconsin Academy of Trial Lawyers.
   ANN WALSH BRADLEY, J.

¶ 1. Dale and Sandra Rebernick, along with their minor son, Gregory, petition for review of a published court of appeals decision affirming a circuit court order dismissing their claim against their insurer, American Family Mutual Insurance Company. The Rebernicks assert that they are entitled to retroactively purchase underinsured motorist (UIM) coverage under their umbrella policy because American Family failed to notify them of the availability of UIM coverage under the policy pursuant to Wis. Stat. § 632.32(4m) (2003-04).

¶ 2. We determine that American Family was required to notify the Rebernicks of the availability of UIM coverage under their umbrella policy pursuant to § 632.32(4m). However, we also determine that, given the circumstances of this case, American Family provided notice to the Rebernicks of the availability of UIM coverage under their umbrella policy. Thus, we need not address what remedy would be appropriate had American Family failed to notify the Rebernicks of the availability of UIM coverage. We affirm the court of appeals.

rH

¶ 3. The facts are undisputed for purposes of our decision. Dale Rebernick was seriously and permanently injured when the lawn mower he was riding was hit by a car. The driver of the car had $25,000 in liability insurance, which was paid to Rebernick. In addition, Rebernick collected the $100,000 limits of UIM coverage under the Rebernicks' automobile insurance policy with American Family.

¶ 4. The Rebernicks also had a $1 million umbrella policy through American Family that required them to maintain their underlying automobile policy as primary insurance. They sued American Family for additional funds under the umbrella policy. Although the terms of the umbrella policy expressly excluded UIM coverage, the Rebernicks asserted that they were entitled to reformation of the policy because American Family had failed to provide them with notice of the availability of UIM coverage for that policy. Such notice, they asserted, was required under § 632.32(4m).

¶ 5. American Family moved for summary judgment, asserting that the notice requirements of § 632.32(4m) apply only to primary automobile insurance polices. The Rebernicks countered with a motion for declaratory relief. In addressing the motions, the circuit court noted that the purpose of the statute is to ensure that all insureds know of the availability of UIM coverage. It observed that the Rebernicks had purchased UIM coverage in their primary automobile policy and that they were not alleging American Family failed to provide the proper notice under § 632.32(4m) with respect to that policy. Additionally, the court noted that the Rebernicks' umbrella policy states that it does not provide UIM coverage unless the policy is endorsed to provide such coverage. Thus, the court reasoned, the Rebernicks were aware of the availability of UIM coverage under their umbrella policy.

¶ 6. The circuit court concluded that the purpose of the notice provisions in § 632.32(4m) was fulfilled and that the Rebernicks were not entitled to UIM coverage under their umbrella policy. It therefore granted American Family's motion, denied the Rebernicks' motion, and dismissed the Rebernicks' claim against American Family.

¶ 7. The Rebernicks appealed. In a split decision, the court of appeals affirmed the circuit court under a somewhat different rationale. The court of appeals majority and dissent agreed that § 632.32(4m) applied to the Rebernicks' umbrella policy under the plain language of § 632.32(1) and (4m), thereby requiring American Family to notify the Rebernicks of the availability of UIM coverage in their umbrella policy. The majority of the court of appeals further determined that the Rebernicks were not entitled to reformation of the umbrella policy because they knew both (1) that their umbrella policy could give them UIM coverage via an endorsement to that policy and (2) what UIM coverage encompassed. The Rebernicks petitioned for review.

HH I — I

¶ 8. The central issue before us is whether American Family was required to notify the Rebernicks of the availability of UIM coverage under their umbrella policy pursuant to § 632.32(4m). In order to address this issue, we must interpret and apply statutory provisions to undisputed facts. This issue presents a question of law subject to independent appellate review. Phelps v. Physicians Ins. Co., 2005 WI 85, ¶ 25, 282 Wis. 2d 69, 698 N.W.2d 643.

¶ 9. We determine that American Family was required to notify the Rebernicks of the availability of UIM coverage under their umbrella policy pursuant to § 632.32(4m). Our determination is based on the language of § 632.32. At the same time, it is supported by the history and purpose of § 632.32(4m), along with a provision in the administrative code.

¶ 10. In addition, we determine that, given the circumstances of this case, American Family provided notice to the Rebernicks of the availability of UIM coverage under their umbrella policy. Thus, we need not address what remedy would be appropriate had American Family failed to notify the Rebernicks of the availability of UIM coverage.

I — I I — I

¶ 11. The Rebernicks argue that § 632.32(4m), read together with the "scope clause" in § 632.32(1), makes clear that the notice provisions in § 632.32(4m) apply to their umbrella policy. In addressing their argument we begin, as we must, with the relevant statutory language.

¶ 12. Section 632.32(1) provides as follows:

Scope. Except as otherwise provided, this section applies to every policy of insurance issued or delivered in this state against the insured's liability for loss or damage resulting from accident caused by any motor vehicle....

Thus, § 632.32(1) generally delineates the types of insurance policies to which § 632.32 applies. However, it also qualifies the scope of § 632.32's applicability "as otherwise provided."

¶ 13. Section 632.32(4m), in turn, contains language describing the types of policies to which the UIM notice requirements apply. This language is different from the language generally delineating the types of policies to which § 632.32 applies. Specifically, § 632.32(4m) applies to an insurer writing polices that "insure with respect to a motor vehicle registered or principally garaged in this state against loss resulting from liability imposed by law for bodily injury or death suffered by a person arising out of the ownership, maintenance or use of a motor vehicle."

¶ 14. In an opinion also released today, Rocker v. USAA Casualty Insurance Co., 2006 WI 26, ¶ 37, 289 Wis. 2d 294, 711 N.W.2d 634, this court explained how the scope clause in § 632.32(1) works in relation to other subsections of § 632.32:

According to Wis. Stat. § 632.32(1), "[e]xcept as otherwise provided, this section applies to every policy of insurance issued or delivered in this state against the insured's liability for loss or damage resulting from accident caused by any motor vehicle ...." Hence, the broad scope of the entire section is dependent upon whether a policy includes motor vehicle coverage, but each subsection can include provisions which exempt certain coverages from the scope as defined in § 632.32(1). Therefore, in any particular case, it is improper to conclude that, because one subsection has been held to apply to a certain type of policy, all the other subsections must be held to apply as well. Each subsection can provide its own exemptions under the statutory framework.

Thus, the court in Rocker determined, "[t]he language of § 632.32(1) unambiguously requires every insurance policy that provides motor vehicle liability coverage to meet the requirements of the other sections of the omnibus statute, unless otherwise provided." Id,., ¶ 46; see also Heritage Mut. Ins. Co. v. Wilber, 2001 WI App 247, ¶ 17, 248 Wis. 2d 111, 635 N.W.2d 631 (general liability policy fell within § 632.32(l)'s scope provision when it provided automobile liability coverage).

¶ 15. The Rebernicks' umbrella policy includes automobile liability coverage. For example, the policy covers an insured's liability for an accident causing personal injury or property damage arising out of the use of a car the insured owns. Thus, there can be no real dispute that the Rebernicks' umbrella policy falls within the general scope of § 632.32(1). In other words, there can be no real dispute that the policy was "issued . . . against the insured's liability for loss or damage resulting from accident caused by any motor vehicle." Wis. Stat. § 632.32(1).

¶ 16. Consistent with Rocker, however, we must also examine the language in § 632.32(4m), asking whether that subsection of the statute includes any provisions that would exempt the Rebernicks' umbrella policy from the scope of § 632.32 as defined in § 632.32(1). We therefore return to the language of § 632.32(4m), which we read to confine that subsection's applicability to policies that "insure with respect to a motor vehicle registered or principally garaged in this state against loss resulting from liability imposed by law for bodily injury or death arising out of the ownership, maintenance or use of a motor vehicle."

¶ 17. The Rebernicks' umbrella policy insures "against loss resulting from liability imposed by law for bodily injury or death arising out of the ownership, maintenance or use of a motor vehicle." American Family asserts, however, that § 632.32(4m) does not apply to the Rebernicks' umbrella policy because of the first part of the excerpted language. It focuses on the phrase "with respect to a motor vehicle registered or principally garaged in this state." (Emphasis added.) American Family construes this language to mean that § 632.32(4m) applies only to policies that insure with respect to a particular motor vehicle. According to American Family, the Rebernicks' umbrella policy, unlike a primary automobile insurance policy, does not insure with respect to a particular motor vehicle.

¶ 18. We are not persuaded that such a construction of § 632.32(4m) carries the day for American Family. The statute does not say, as American Family's argument suggests, that the policy must insure "with respect to a particular motor vehicle named or de scribed in the umbrella policy. ..." Rather, the statute simply says that the policy must insure "with respect to a motor vehicle registered or principally garaged in this state ...."

¶ 19. Even assuming, however, that American Family's interpretation is correct, the Rebernicks' umbrella policy does insure with respect to a particular motor vehicle. Their umbrella policy, like any "true" umbrella policy, requires underlying primary insurance. In the center of the declaration page of the umbrella policy appears a heading in bold capital letters: "SCHEDULE OF UNDERLYING INSURANCE." Immediately below that heading, the umbrella policy declaration page references the underlying primary "Car Liability Insurance" policy, together with the underlying insurance policy limits. The declaration page is specifically made part of the umbrella policy.

¶ 20. The terms of the policy require, as a condition of insurance, that there be underlying automobile insurance coyerage in a specified amount. The underlying primary automobile policy, in turn, refers to a particular motor vehicle. Thus, the Rebernicks' umbrella policy insures "with respect" to a particular motor vehicle that is named or described in the policy by incorporation of the underlying policy.

¶ 21. Our reading of the statute is thus consistent with the court of appeals' interpretation of the statute. Both the majority and dissent of the court of appeals agreed that American Family was required to provide the Rebernicks with notice of the availability of UIM coverage under their umbrella policy pursuant to the plain language of § 632.32(1) and (4m).

¶ 22. Also consistent with our reading, at least one commentator has criticized the interpretation advanced by American Family and accepted by another court. The gist of the criticism is that this interpretation ignores the reality that an umbrella policy typically requires an underlying primary policy:

[0]ne judicial decision, sustaining the view that an insurer providing excess coverage is not subject to the statutory requirement, reasoned that "umbrella policies insure the policy holder in general, rather than a particular automobile within the state" and, therefore, "umbrella insurance policies are not issued 'with respect to a motor vehicle registered or principally garaged in this commonwealth..." However, this observation seems to ignore the fact that the coverage provided by excess (including umbrella) insurance is generally conditioned on the existence of one or more primary coverages. Typically, for example, an insurer providing a layer of excess liability insurance — which applies to liability arising from the operation of a motor vehicle — will require the insured to have a specified amount of primary motor vehicle liability insurance coverage.

Alan I. Widiss & Jeffrey E. Thomas, 3 Uninsured and Underinsured Motorist Insurance, § 32.5, at 25 (3d ed. 2005) (footnote omitted; quoting Stoumen v. Public Serv. Mut. Ins. Co., 834 F. Supp. 140, 143 (E.D. Pa. 1993)).

¶ 23. Thus, it is something of a fiction to suggest that an umbrella policy does not insure with respect to a particular motor vehicle when the policy requires underlying insurance that does. Accordingly, we determine that pursuant to § 632.32(4m), American Family was required to notify the Rebernicks of the availability of UIM coverage under their umbrella policy.

¶ 24. The sparse legislative history of § 632.32(4m) does not suggest otherwise. The 1995 bill that led to the adoption of subsection (4m) related to "stacking of motor vehicle insurance coverage and drive-other-car exclusions under motor vehicle policies." 1995 S.B. 6, Legislative Reference Bureau drafting file; see also 1995 Wis. Act 21. Subsection (4m), however, was added in an Assembly substitute amendment offered by the Committee on Insurance, Securities and Corporate Policy. Id. Nothing in the legislative drafting file suggests that the legislature intended that all umbrella policies be exempt from the notice requirements under subsection (4m). The final version of the act states that its purpose, in relevant part, relates simply to "notification of the availability of underinsured motorist coverage." 1995 Wis. Act 21.

¶ 25. From both the language of the statute and the sparse legislative history, it is thus evident that a central purpose of § 632.32(4m) is to ensure that all insureds know of the availability of UIM coverage. Put another way, the legislature has determined that where UIM coverage is available, insureds should know about it. The interpretation of § 632.32(4m) to require that American Family notify the Rebernicks of the availability of UIM coverage under their umbrella policy comports with this purpose.

¶ 26. We note that in some states, the legislature has expressly exempted umbrella policies from uninsured or underinsured motorist statutes. See, e.g., Cal. Ins. Code § 11580.2(a) (2006); Kan. Stat. Ann. §40-284(a) and (b) (2004); see also Lisa K. Gregory, "Excess" or "umbrella" Insurance Policy As Providing Coverage for Accidents with Uninsured or Underinsured Motorists, 2 A.L.R.5th 922, § 3 (1992). Our legislature, in contrast, has not.

¶ 27. In 1987, the Office of the Commissioner of Insurance promulgated a regulation specifically exempting umbrella policies from the requirements of § 632.32(4), the statutory provision that mandates unvu-sured motorist coverage. See Wis. Admin. Code § Ins 6.77; Wis. Admin. Register, May 15,1987, No. 377. In the more than 10 years that have passed since the legislature amended § 632.32 to include subsection (4m), however, the Commissioner has not promulgated a rule exempting umbrella policies from the requirements of (4m), the statutory provision that mandates notice of the availability of UIM coverage. We view this as further support for our interpretation of § 632.32(4m), that American Family was required to provide notice to the Rebernicks of the availability of UIM coverage in their umbrella policy.

¶ 28. When the legislature enacted § 632.32(4m) in 1995, it chose to treat underinsured motorist coverage differently than it had treated uninsured motorist coverage. The legislature had directly mandated that all policies under § 632.32(4) must contain uninsured motorist coverage. However, under § 632.32(4m) the focus changed, and the legislature required "written notice of the availability of underinsured motorist coverage."

¶ 29. At oral argument, counsel for American Family explained that the reason for buying an umbrella policy is that "you want to make sure that everything you worked for all your life is now protected." Counsel acknowledged that American Family had available underinsured motorist coverage as part of an endorsement to its umbrella policies. Yet, how would conscientious consumers know of its existence?

¶ 30. The legislature enacted § 632.32(4m) to aid consumers in making responsible and informed decisions about the nature and amount of insurance coverage they may need. Requiring insurers to provide to their insureds notice of the availability of underinsured motorist coverage is not an onerous task. After all, as counsel for American Family noted: "American Family is in the business of selling insurance. We want to sell these policies to those who want them." Giving the notice of availability, as § 632.32(4m) requires, will benefit both the insurer and the insured.

¶ 31. We turn now to the question of whether, given the circumstances presented here, American Family notified the Rebernicks of the availability of UIM coverage under their umbrella policy pursuant to the statute. The Rebernicks assert that American Family failed to provide the required notice. Additionally, the Rebernicks assert that the remedy for American Family's failure to provide such notice is that the umbrella policy be reformed. What they mean by this assertion is that they should be given the opportunity to retroactively purchase UIM coverage under their umbrella policy.

¶ 32. Again, the notice requirements in § 632.32(4m) read as follows:

An insurer writing policies [to which these notice requirements apply] . .. shall provide to one insured under each such insurance policy that goes into effect after October 1,1995, that is written by the insurer and that does not include underinsured motorist coverage written notice of the availability of underinsured motorist coverage, including a brief description of the coverage. An insurer is required to provide the notice required under this subdivision only one time and in conjunction with the delivery of the policy.

Wis. Stat. § 632.32(4m)(a)l. (emphasis added). Thus, if a policy under § 632.32(4m) does not already include UIM coverage, "an insurer" writing such policies must "provide to one insured" under the policy "written notice" of the "availability" of UIM coverage, including a "brief description" of such coverage. Id. At the same time, however, "an insurer" is required to provide the notice for each such policy "only one time and in conjunction with the delivery of the policy." Id.

¶ 33. The facts here reveal that the Rebernicks were apparently aware of the availability of UIM coverage before receiving any required notice because they had requested such coverage in their underlying primary automobile policy before receipt of such notice. Their underlying primary automobile policy was issued with $100,000 in UIM coverage. American Family issued that policy on April 29, 2001.

¶ 34. There is no dispute that American Family provided the Rebernicks with the required notice under § 632.32(4m) for their primary automobile policy. This notice reads as follows:

SPECIAL NOTICE TO POLICYHOLDERS
This special notice is being given in accordance with Wisconsin law to advise you of the availability of Underinsured Motorist (UIM) coverage. If you do not presently carry UIM coverage, this message is especially important to you.
Underinsured Motorist coverage provides payment for legally collectible damages for bodily injury or death if you or any person riding in your vehicle is injured or killed in an accident with a vehicle whose driver has insurance coverage that is less than the limit of your underinsured motorist coverage.
Please see the actual policy for exact terms and conditions.
Contact your American Family agent if you have questions about this coverage.

Accordingly, on April 29, 2001, American Family had advised the Rebernicks of the availability of UIM coverage and had provided them with a basic description of the nature of such coverage. The terms of the notice do not limit its application to only primary or underlying policies.

¶ 35. American Family issued the Rebernicks' umbrella policy approximately one week later, on May 7, 2001. Thus, a very short period of time had elapsed since the Rebernicks were advised of the availability of UIM coverage by the same insurance company that subsequently issued their umbrella policy.

¶ 36. In addition, the umbrella policy contained the following exclusion: "Uninsured/Underinsured Motorists. We will not cover any claims which may he made under Uninsured Motorists Coverage, Underin-sured Motorists Coverage or similar coverage, unless this policy is endorsed to provide such coverage." As the circuit court and court of appeals recognized, this clause in the umbrella policy also alerted the Reber-nicks that UIM coverage was available under that policy by way of an endorsement. This clause alone would not be enough to constitute notice of the availability of UIM coverage in an umbrella policy pursuant to § 632.32(4m) because it does not contain the statutorily required "brief description of the coverage." This case, however, involves more than just such a clause.

¶ 37. Considering all of these circumstances in combination, we determine that American Family notified the Rebernicks of the availability of UIM coverage under their umbrella policy. Thus, we need not determine what remedy would be appropriate if American Family had failed to notify the Rebernicks.

¶ 38. We caution, however, that the only way for insurance companies to be certain that they have provided proper notice pursuant to § 632.32(4m) is to separately provide in each policy for which notice is required the type of notice American Family provided to the Rebernicks in their primary automobile policy. Absent the provision of such notice (or notices, as the situation may he), insurers will have no guarantee in future cases presenting different facts that they have properly notified insureds of the availability of UIM coverage pursuant to § 632.32(4m).

IV

¶ 39. In sum, we determine that American Family was required to notify the Rebernicks of the availability of UIM coverage under their umbrella policy pursuant to § 632.32(4m). However, we also determine that, given the particular circumstances of this case, American Family notified the Rebernicks of the availability of UIM coverage under that policy. Thus, we need not address what remedy would be appropriate had American Family failed to notify the Rebernicks of the availability of UIM coverage under their umbrella policy. We affirm the court of appeals.

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

LOUIS B. BUTLER, JR., J.

¶ 40. (dissenting). The majority concludes that American Family was required to notify the Rebernicks of the availability of Underinsured Motorists (UIM) coverage under their umbrella policy pursuant to Wis. Stat. § 632.32(4m). Majority op., ¶ 2.1 agree with this conclusion and join that portion of the opinion.

¶ 41. However, I disagree with the majority's determination that American Family provided the required notice. Id. I conclude that American Family failed to meet the explicit statutory notice requirements established under Wis. Stat. § 632.32(4m). Because the proper remedy, if any, for American Family's failure to provide the notice cannot be determined based on the present record, I would reverse the court of appeals and remand this matter to the circuit court for further proceedings. I therefore respectfully dissent.

HH

¶ 42. The majority's summary of the facts accurately reflects the record in this case. Majority op., ¶¶ 3-7. In short, the Rebernicks had separately purchased a primary automobile insurance policy and a $1 minion umbrella policy through American Family Insurance. The Rebernicks had purchased UIM coverage for their primary automobile insurance policy, but the terms of an exclusion in their umbrella policy purchased one week later indicated that American Family "will not cover any claims" made under Underinsured Motorists Coverage "unless this policy is endorsed to provide" UIM coverage. The Rebernicks assert that they are entitled to retroactively purchase UIM coverage under their umbrella policy because American Family had failed to provide them with notice of the availability or description of UIM coverage in the umbrella policy as required under Wis. Stat. § 632.32(4m).

HH hH

¶ 43. Whether American Family adequately notified the Rebernicks of the availability of UIM coverage under their umbrella policy requires the application of Wis. Stat. § 632.32(4m) to undisputed facts. The interpretation and application of a statute to undisputed facts is ordinarily a question of law subject to independent appellate review. Phelps v. Physicians Ins. Co., 2005 WI 85, ¶ 25, 282 Wis. 2d 69, 698 N.W.2d 643.

f — I 1 — 1 f — (

¶ 44. Whether an insurer is required to provide a separate written notice for each insurance policy under Wis. Stat. § 632.32(4m), including the umbrella policy at issue in this case, is a matter of statutory interpretation. I agree with and, for purposes of this dissent, adopt the majority's legal analysis regarding the proper interpretation of what is required under the statute. Majority op., ¶¶ 11-31. Under § 632.32(4m):

An insurer writing policies [to which these notice requirements apply] . . . shall provide to one insured under each such insurance policy that goes into effect after October 1,1995, that is written by the insurer and that does not include underinsured motorist coverage written notice of the availability of underinsured motorist coverage, including a brief description of the coverage. An insurer is required to provide the notice required under this subdivision only one time and in conjunction with the delivery of the policy.

Wis. Stat. § 632.32(4m)(a)l.(emphasis added). If an insured's policy does not already include UIM coverage, the language of § 632.32(4m)(a)l. requires that an insurer provide an insured with written notice, that the notice inform the insured that UIM coverage is available and include a brief description of the available coverage, and that the notice be provided when the policy is delivered to the insured. The statutory language also makes plain that an insurer must provide the notice for each policy to which the statute applies.

¶ 45. It is undisputed that when the Rebernicks were issued their underlying auto policy on April 29, 2001, American Family provided the Rebernicks with the required notice for that policy. That notice informed the Rebernicks of the availability of UIM coverage:

SPECIAL NOTICE TO POLICYHOLDERS
This special notice is being given in accordance with Wisconsin law to advise you of the availability of Underinsured Motorist (UIM) coverage. If you do not presently carry UIM coverage, this message is especially important to you.
Underinsured Motorist coverage provides payment for legally collectible damages for bodily injury or death if you or any person riding in your vehicle is injured or killed in an accident with a vehicle whose driver has insurance coverage that is less than the limit of your underinsured motorist coverage.
Please see the actual policy for exact terms and conditions.
Contact your American Family agent if you have questions about this coverage.

¶ 46. However, when American Family issued the Rebernicks' umbrella policy on May 7, 2001, approximately one week after the Rebernicks obtained their primary automobile policy, American Family failed to include any "written notice" of the availability of UIM coverage, "in conjunction with the delivery of the [umbrella] policy," as required by Wis. Stat. § 632.32(4m)(a)l. Additionally, American Family provided no description of UIM coverage with the umbrella policy.

¶ 47. The majority reasons that only a short period of time had passed since the Rebernicks had received the required written notice for their separate but related underlying policy, and therefore the Rebernicks were aware of the nature of UIM coverage available under an American Family policy. Majority op., ¶ 36.

¶ 48. In addition, the umbrella policy itself contained an exclusion provision, which notified the insured that UM/UIM coverage was not included unless "this" policy was endorsed to provide such coverage. According to the majority, the exclusion provision contained in the umbrella policy alerted the Rebernicks that UIM coverage was available under the umbrella policy. Majority op., ¶ 37.

¶ 49. Although the majority concedes that the exclusion provision alone would not constitute notice, it concludes that, in view of all the facts, American Family substantially complied with the written notice requirement. Majority op., ¶ 38. The majority has essentially determined that American Family's compliance with the notice requirements of Wis. Stat. § 632.32(4m) was good enough with respect to the Rebernicks' umbrella policy. Id.

¶ 50. I disagree. This is not horseshoes, and close is not good enough. The majority disregards the plain language of the statute. American Family failed to notify the Rebernicks of the availability or description of UIM coverage under their umbrella policy pursuant to the explicit requirements of Wis. Stat. § 632.32(4m). Consequently, I agree with the court of appeals' dissent that American Family failed to meet the notice requirements for the Rebernicks' umbrella policy.

¶ 51. American Family did not provide the Reber-nicks with a written description of UIM coverage "in conjunction with the delivery" of their umbrella policy, as Wis. Stat. § 632.32(4m)(a)l. requires. Thus, American Family did not provide the required "written notice," which must include a "brief description of [UIM] coverage." The statute requires that the notice be provided "under each such ... policy." (Emphasis added.) The fact that the Rebernicks may have been generally aware of the nature of UIM coverage based on a previous notice is insufficient under the plain language of the statute.

¶ 52. In addition, the notice of exclusion in the Rebernicks' umbrella policy cannot constitute sufficient "written notice" of the "availability" of UIM coverage. The exclusion merely indicates that UIM claims will not be covered unless "this" policy is endorsed to provide such coverage. The exclusion does not indicate that separate UIM coverage is available, nor does it describe the additional UIM coverage that is available. This notice of exclusion does not satisfy the notice requirements under Wis. Stat. § 632.32(4m)(a) 1.

¶ 53. Moreover, under the facts here, a reasonable insured may have been confused as to just what the exclusion really meant. On the one hand, a reasonable insured may have been led to believe that UIM coverage was not available under the umbrella policy, despite the exclusion. A reasonable insured might infer that such coverage was not available under the policy because the insurance company did not provide the same separate "SPECIAL NOTICE TO POLICYHOLDERS" of the availability of UIM coverage that it provided with the underlying automobile policy. Stated another way, a reasonable insured might believe that the absence of the "special notice" with the umbrella policy indicated that UIM coverage was not available under that policy.

¶ 54. On the other hand, a reasonable insured may have been led to believe that UIM coverage was already provided under the policy precisely because of the "SPECIAL NOTICE TO POLICYHOLDERS” of the availability of UIM coverage that was provided with the underlying automobile policy. After being given notice of the existence of UIM coverage, the policyholders (Rebernicks) elected to have such coverage. Since the insurance company provided no new "SPECIAL NOTICE," a reasonable insured may have concluded that the purchase of UIM coverage made one week earlier was sufficient for purposes of electing UIM coverage in the umbrella policy.

¶ 55. I agree with the majority that the best way for insurance companies to be certain that they have provided proper notice pursuant to Wis. Stat. § 632.32(4m) is to comply with the words of the statute. Majority op., ¶ 39. In fact, I assert an insurer is required to comply with the words of the statute. An insurer must separately provide written notice of both the availability of, as well as a description of, the available UIM coverage with each policy the insurer issues to an insured. Neither was done here.

¶ 56. The question becomes what is the proper remedy for American Family's failure to provide the required notice for the Rebernicks' umbrella policy. As the majority notes, the Rebernicks assert that the remedy is that the umbrella policy be reformed, meaning they should be given the opportunity to retroactively purchase UIM coverage under their umbrella policy. Majority op., ¶ 32.

¶ 57. Under Wis. Stat. § 631.15(3m), an insurance policy "that violates a statute or rule is enforceable against the insurer as if it conformed to the statute or rule." Thus, § 631.15(3m) provides, in effect, for reformation of an insurance policy that violates a statute. Yet, application of the statutory language to the facts here does not result in a straightforward answer to the question of what remedy, if any, is appropriate.

¶ 58. If American Family had complied with Wis. Stat. § 632.32(4m) in the issuance of the umbrella policy, the Rebernicks would have received the proper written notice in conjunction with their umbrella policy. However, § 632.15(3m) cannot answer the question of whether, had American Family provided the notice, the Rebernicks would have purchased UIM coverage in their umbrella policy.

¶ 59. Likewise, even assuming that they would have purchased such coverage, we cannot be certain on this record of whether (or to what extent) the coverage would have applied. American Family argues that even if the policy is reformed, a remand is necessary to determine if any additional exclusions or reducing clauses would apply here. It asserts in its brief:

It is undisputed that Mr. Rebernick was acting within the scope of his employment at the time of his accident. American Family's UIM endorsement contains a reducing clause which allows American Family to reduce the limit of its UIM coverage by the amount of any worker's compensation payments that have been made.

¶ 60. In short, the remedy question in this case involves factual issues that cannot be resolved based on the current record.

¶ 61. Unlike other cases where reformation of the policy under Wis. Stat. § 632.15(3m) may resolve the matter, reformation in this case would only be the beginning. In other cases, the applicability or validity of an exclusion, reducing clause, "other insurance" clause, or other policy provision may become readily apparent on the existing record. See, e.g., Progressive N. Ins. Co. v. Hall, 2006 WI 13 ¶¶ 7-8, 288 Wis.2d 282, 709 N.W.2d 46 (applying § 632.15(3m) to determine that the invalidity of an "other insurance" clause under § 632.32(3) (a) controlled which of two insurance companies paid the first $100,000 in coverage).

¶ 62. In this case, however, we are not presented with a policy that is easily "conformed to the statute or rule," Wis. Stat. § 632.15(3m), in a manner that readily dictates the ultimate remedy. Rather, we are dealing only with notice of the availability of UIM coverage. Lack of such notice will not always translate into payment of insurance proceeds.

¶ 63. Accordingly, I would remand for further proceedings for the circuit court to determine what, if any, remedy is appropriate.

IV

¶ 64. Because American Family failed to meet the explicit statutory requirements under Wis. Stat. § 632.32(4m), I conclude that American Family did not provide the Rebernicks with the required notice in the issuance of the umbrella policy. In addition, because the proper remedy, if any, for American Family's failure to provide the notice cannot be determined based on the present record, I would reverse the court of appeals and remand to the circuit court for further proceedings consistent with this opinion. I therefore respectfully dissent.

¶ 65. I am authorized to state that Chief Justice SHIRLEY S. ABRAHAMSON joins this dissenting opinion.

        See Rebernick v. Wausau Gen. Ins. Co., 2005 WI App 15, 278 Wis. 2d 461, 692 N.W.2d 348 (affirming an order of the circuit court for Milwaukee County, Daniel A. Noonan, Judge).

       All subsequent references to the Wisconsin Statutes are to the 2003-04 version unless otherwise indicated.

       Wisconsin Stat. § 632.32(4m) reads in pertinent part as follows:
      Underinsured motorist coverage. (a)l. An insurer writing policies that insure with respect to a motor vehicle registered or principally garaged in this state against loss resulting from liability imposed by law for bodily injury or death suffered by a person arising out of the ownership, maintenance or use of a motor vehicle shall provide to one insured under each such insurance policy that goes into effect after October 1,1995, that is written by the insurer and that does not include underinsured motorist coverage written notice of the availability of underinsured motorist coverage, including a brief description of the coverage. An insurer is required to provide the notice required under this subdivision only one time and in conjunction with the delivery of the policy.
      2. An insurer under subd. 1. shall provide to one insured under each insurance policy described in subd. 1. that is in effect on October 1,1995, that is written hy the insurer and that does not include underinsured motorist coverage written notice of the availability of underinsured motorist coverage, including a brief description of the coverage. An insurer is required to provide the notice required under this subdivision only one time and in conjunction with the notice of the first renewal of each policy occurring after 120 days after October 1, 1995.

       Wisconsin Stat. § 632.32(1) provides, in pertinent part, as follows:
      Scope. Except as otherwise provided, this section applies to every policy of insurance issued or delivered in this state against the insured's liability for loss or damage resulting from accident caused by any motor vehicle, whether the loss or damage is to property or to a person.

       At oral argument, the Rebernicks emphasized that their argument is not that all insurers are required by § 632.32(4m) to write all umbrella policies with UIM coverage. Rather, their argument is that the legislature has mandated that insurers educate the public as to the availability of UIM coverage. Likewise, the Rebernicks explain that they are not arguing that § 632.32(4m) mandates coverage or limits "up to a certain amount." Rather, they argue: "All it [§ 632.32(4m)] is, is a notice requirement." Accordingly, we do not address issues beyond the arguments advanced by the Rebernicks.

       The parties debate the import of Jaderborg v. American Family Mutual Insurance Co., 2000 WI App 246, 239 Wis. 2d 533, 620 N.W.2d 468 (applying § 632.32(6)(b)l. and 2. to an umbrella policy). That case, however, is not determinative here. Likewise, other cases in which the court of appeals has applied subsections of § 632.32 other than (4m) to umbrella policies are .not necessarily determinative. See Dorbritz v. American Family Mut. Ins. Co., 2005 WI App 154, ¶ 14, 284 Wis. 2d 442, 702 N.W.2d 406; Heritage Mut. Ins. Co. v. Wilber, 2001 WI App 247, ¶ 17, 248 Wis. 2d 111, 635 N.W.2d 631. As this court explained in Rocker v. USAA Casualty Insurance Co., 2006 WI 26, ¶ 37, 289 Wis. 2d 294, 711 N.W.2d 634, "in any particular case, it is improper to conclude that, because one subsection has been held to apply to a certain type of policy, all the other subsections must be held to apply as well."

        Treder v. LST, Ltd. P'ship, 2004 WI App 75, ¶ 14, 271 Wis. 2d 771, 679 N.W.2d 555, review denied, 2004 WI 114, 273 Wis. 2d 656, 684 N.W.2d 137; Oelhafen v. Tower Ins. Co., 171 Wis. 2d 532, 537-38, 492 N.W.2d 321 (Ct. App. 1992).

       The language in § 632.32(4) describing the types of policies to which it applies is similar but not identical to the language in § 632.32(4m) describing the types of policies to which it applies. Section 632.32(4) applies to:
      Every policy of insurance subject to this section that insures with respect to any motor vehicle registered or principally garaged in this state against loss resulting from liability imposed by law for bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle ....
      Section 632.32(4m), as stated above, applies to:
      polices that insure with respect to a motor vehicle registered or principally garaged in this state against loss resulting from liability imposed by law for bodily injury or death suffered by a person arising out of the ownership, maintenance or use of a motor vehicle....

       By this, we do not suggest that the court is giving its imprimatur to every word used by American Family in the notice or that American Family's phrasing is the only permissible phrasing for such notices under § 632.32(4m).

       We note that this case deals with § 632.32(4m)(a)l., pertaining to policies, like those here, that went into effect after October 1, 1995.

       American Family asserts that the language of exclusion 21 of the umbrella policy puts the insured on notice that excess UM/UIM coverage can be purchased. The actual language of the exclusion provides:

        We will not cover any claims which may be made under Uninsured Motorists Coverage, Underinsured Motorists Coverage or similar coverage, unless this policy is endorsed to provide such coverage.


author: PER CURIAM.

text:
    In the Matter of Disciplinary Proceedings Against Joan M. Boyd, Attorney at Law: Office of Lawyer Regulation, Complainant, v. Joan M. Boyd, Respondent.
    Supreme Court

      No. 2005AP215-D.

      Decided March 30, 2006.

    2006 WI 28
    (Also reported in 711 N.W.2d 268.)
   PER CURIAM.

¶ 1. We review a referee's report and recommendation issued November 9, 2005, concluding that Attorney Joan M. Boyd violated the rules of professional conduct in connection with her representation of S.E The referee recommended this court impose a public reprimand upon Attorney Boyd, together with certain conditions upon her license to practice law, and that it require Attorney Boyd to pay restitution and costs in connection with this matter. We adopt the referee's findings of fact and conclusions of law and the recommendations regarding discipline.

¶ 2. Attorney Boyd was admitted to practice law in Wisconsin in 1989. In 2000 she was publicly reprimanded for forging a client's endorsement on a refund check from a bankruptcy trustee and for depositing the client funds into her law office business account. Conditions were placed upon her license to practice law in connection with that matter, including the requirement that she use an accounting firm to handle her finances, that she attend certain continuing legal education courses, and that she continue to receive medical treatment for bipolar/manic depressive disorder.

¶ 3. On January 24, 2005, the Office of Lawyer Regulation (OLR) filed a complaint against Attorney Boyd alleging professional misconduct involving her representation of her former client, S.E Attorney Boyd filed an answer and Timothy L. Vocke was appointed as referee in the matter. Subsequently, Attorney Boyd withdrew her answer and pled no contest to the allegations contained in the OLR complaint.

¶ 4. The complaint alleged, and the referee found, that Attorney Boyd represented S.E in a Chapter 7 bankruptcy matter. Attorney Boyd received a total of $700 from S.E for purposes of commencing the bankruptcy action. However, Attorney Boyd failed to deposit her client's payments into her client trust account. When asked by successor counsel to refund a portion of the retainer, Attorney Boyd commingled her own funds in the client trust account, then made the $300 refund check payable to the wrong payee.

¶ 5. The OLR alleged, and the referee concluded, that by failing to deposit the client's payments into her client trust account, Attorney Boyd failed to hold in trust, property of a client or third person that is in the lawyer's possession in connection with a representation, in violation of former SCR 20:1.15(a). In addition, by depositing $300 of her own funds into her client trust account and issuing a check for $300 to successor counsel to refund a portion of the fee, Attorney Boyd commingled her own funds into her client trust account in violation of former SCR 20:1.15(a).

¶ 6. Attorney Boyd was also retained by S.E to pursue the possibility of initiating a federal civil rights action on her behalf against a variety of individuals, including state and other government officials involved in a child in need of protective services (CHIPS) case involving S.E's child. Attorney Boyd informed S.E that she thought S.E had "a good case" and that she thought S.E might obtain a "substantial settlement." She requested a $10,000 deposit, plus $2000 for costs, and over time S.E made payments totaling $6500 to pursue the civil rights matter. No such action was ever commenced.

¶ 7. The OLR alleged, and the referee subsequently concluded, that Attorney Boyd failed to provide the legal skill or preparation reasonably necessary to handle the federal civil rights claim, in violation of SCR 20:1.1.

¶ 8. In addition, the OLR alleged, and the referee concluded, that the fee Attorney Boyd charged S.E in connection with the civil rights matter was unreasonable, in violation of SCR 20:1.5(a). The referee particularly noted that the legal bills reflected a "great deal of time for 'legal research'" although no action was ever filed. The referee also noted that he was persuaded by the OLR investigator's testimony, opining that Attorney Boyd should have done more research before offering her opinion on the viability of a civil rights claim and that "the minimal amount of research" should have demonstrated that S.E did not have a viable civil rights claim.

¶ 9. In evaluating the appropriate discipline, the referee acknowledged that the aggrieved client was "highly emotional." However, he also found that, although cooperative with the OLR, Attorney Boyd showed no sign of remorse, took a significant amount of money from a person with limited resources, failed to make restitution to that person, and committed multiple disciplinary violations, albeit against this single client.

¶ 10. At a hearing conducted on July 27, 2005, Attorney Boyd withdrew her answer and entered a no-contest plea to the allegations contained in the OLR complaint. However, Attorney Boyd's subsequent brief on the question of sanctions contained certain facts that the OLR asserted were not facts of record. The referee agreed, whereupon Attorney Boyd sought to withdraw her no-contest plea. Following further hearing and argument the referee denied that motion, observing that, in any event, Attorney Boyd's answer had established a sufficient factual basis for the counts alleged against her.

¶ 11. The referee then considered the request from the OLR for a 60-day license suspension. Ultimately, after discussing various legal authorities, the referee recommended that the court: (1) impose a public reprimand; (2) order restitution in the amount of $5450 plus interest of 12 percent; (3) ensure that Attorney Boyd reach an agreement with the OLR that another accounting firm handle her finances; (4) make certain that Attorney Boyd supply the OLR with a medical authorization for purposes of her mental condition and continued treatment for her mental health condition; (5) guarantee that Attorney Boyd attend and pass the OLR trust account school; and (6) order Attorney Boyd to pay the costs of the prosecution of this case.

¶ 12. We somewhat reluctantly agree that a public reprimand is sufficient discipline for Attorney Boyd's misconduct in this matter. However, mindful of the fact that no appeal was filed in this matter, we accept the referee's recommendations. We further agree that the conditions recommended by the referee are appropriate and we order Attorney Boyd to pay the costs of this disciplinary proceeding, which are $7006.39 as of November 29, 2005.

¶ 13. IT IS ORDERED that Joan M. Boyd is publicly reprimanded for professional misconduct.

¶ 14. IT IS FURTHER ORDERED that within 30 days of the date of this order, Attorney Joan M. Boyd shall pay restitution to the client, S.E, in the amount of $5450 plus interest at the rate of 12 percent per annum from the date of August 23, 2002 until the date the client is repaid in full.

¶ 15. IT IS FURTHER ORDERED that the following conditions are imposed upon Attorney Boyd's license to practice law in Wisconsin:

Attorney Boyd shall attend and satisfy trust account training requirements as directed by the OLR;
Six months after the date of this order, and every six months thereafter until two years after the date of this order, Attorney Boyd shall provide full medical treatment records to the OLR and any authorizations necessary to enable the OLR to monitor her medical condition.
Within three months after the date of this order, Attorney Boyd shall enter into an agreement with the OLR regarding an acceptable accounting firm to manage her finances.

¶ 16. IT IS FURTHER ORDERED that within 60 days of the date of this order Attorney Joan M. Boyd shall pay to the Office of Lawyer Regulation the costs of this proceeding. If the costs are not paid within the time specified and absent a showing to this court of an inability to pay the costs within that time, the license of Attorney Joan M. Boyd to practice law in Wisconsin shall be suspended until further order of the court.

       Former SCR 20:1.15 applies to misconduct committed prior to July 1, 2004. Former SCR 20:1.15(a) provided in pertinent part that:
      (a) A lawyer shall hold in trust, separate from the lawyer's own property, that property of clients and third persons that is in the lawyer's possession in connection with a representation or when acting in a fiduciary capacity.... No funds belonging to the lawyer or law firm, except funds reasonably sufficient to pay or avoid imposition of account service charges, may be deposited in such an account.

       SCR 20:1.1 provides that "[a] lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation."

       SCR 20:1.5(a) provides: Fees
      (a) A lawyer's fee shall be reasonable. The factors to be considered in determining the reasonableness of a fee include the following:
      (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.