PUBLISHED
OPINION
COURT OF
APPEALS
DECISION
DATED AND FILED
March 16,
2000
Cornelia G. Clark
Acting Clerk, Court of Appeals
of
Wisconsin
NOTICE
This opinion is subject to further editing. If published, the official version will
appear in the bound volume of the Official Reports.
A party may file with
the Supreme Court a petition to review an adverse decision by the Court of Appeals.
See
Wis. Stat. §808.10
and Rule 809.62.
No. 99-1859
STATE OF
WISCONSIN IN COURT OF APPEALS
DISTRICT
IV
West Bend Mutual Ins.
Co.,
Plaintiff-Appellant,
v.
Stacy L. Stegner,
Defendant,
Progressive Casualty
Co.,
Defendant-Respondent.
APPEAL from a judgment of the circuit court for Dodge County:ANDREWP.
BISSONNETTE, Judge.Affirmed.
Before Vergeront, Roggensack and Deininger, JJ.
¶1. DEININGER,J.West Bend Mutual Insurance Company appeals a judgment
dismissing its subrogation claim against Progressive Casualty Company. West Bend's
insured died as a result of an automobile accident involving Progressive's insured, and West
Bend sued to recover a portion of the benefits it paid to its insured's estate. West Bend
claims the trial court erred in dismissing its claim against Progressive because, under the
Florida "personal injury protection" insurance policy that Progressive issued,
Progressive must provide the amount of bodily injury liability coverage required by
Wisconsin's financial responsibility law. We conclude, however, that because Wisconsin
does not compel drivers to carry bodily injury liability coverage, and because the Progressive
policy provided no bodily injury liability coverage to its insured, Progressive incurred no
liability under its policy to West Bend. Accordingly, we affirm the judgment dismissing
Progressive from this litigation.
BACKGROUND
¶2. Mary Rasmussen died from injuries she sustained when her vehicle collided
with one owned and operated by Stacy Stegner. Rasmussen's insurer, West Bend Mutual
Insurance Company, paid benefits under its policy to Rasmussen's estate. West Bend then
filed this action to recover its outlay from Stacy Stegner and her insurer, Progressive
Casualty Company.1
¶3. Stegner was living in Florida at the time she purchased automobile insurance
from Progressive. The policy complied with a Florida law requiring motor vehicle owners to
purchase a "personal injury protection" plan, which covers the operator and
occupants of the insured vehicle, as well as pedestrians, for bodily injuries sustained in an
automobile accident.2
See Fla. Stat. Ann. §627.736(1) (West 1996). The policy Stegner
purchased from Progressive also included property damage liability coverage, as well as
comprehensive and collision insurance, and it included provisions for third-party bodily
injury liability coverage, which would have been in force if Stegner had paid premiums for
that type of coverage. Florida law in effect at the time did not require motor vehicle owners
to purchase liability coverage for bodily injuries sustained by occupants of other vehicles,
and Stegner chose not to purchase third-party bodily injury liability coverage.
¶4. Stegner's policy from Progressive, however, contains an
"extraterritorial" clause, which potentially provides coverage for bodily injuries
incurred by third parties, under certain circumstances, when an insured vehicle is involved in
an accident outside of Florida. The provisions, captioned "Out-of-State
Coverage," read as follows:
If an accident to which this policy applies occurs in any state
... other than the one in which a covered vehicle is principally garaged, and the state ... has:
1.a financial responsibility or similar law requiring limits of liability for bodily
injury ... higher than the Limits shown on the Declarations Page, this policy will provide the
higher limit; or
2.a compulsory insurance or similar law requiring a non-resident to maintain
insurance whenever the non-resident uses a vehicle in that state or province, this policy will
provide:
a.the required minimum amounts and types of coverage; or
b.any higher limit you have elected, provided you have paid the premium for higher
limits.
¶5. West Bend alleged in its complaint that, under
this policy language and the applicable Wisconsin statutes, Progressive is liable to West Bend
for at least $25,000 of the benefits it paid to Rasmussen's estate. Progressive denied all
liability and moved the circuit court to enter a judgment declaring that Progressive's policy
did not provide bodily injury liability coverage for the accident which resulted in
Rasmussen's death. The court granted Progressive's motion and dismissed Progressive from
the lawsuit. West Bend appeals.
ANALYSIS
¶6. To resolve the present dispute between these insurers, we must interpret the
extraterritorial clause in the Progressive policy, as well as the Wisconsin statutes implicated
by the policy language. Both interpretations are questions of law which we decide denovo.
See Ledman v. State Farm Mut. Auto. Ins. Co., 230 Wis.2d
56, 61, 601 N.W.2d 312 (1999); State v. Setagord, 211 Wis.2d 397,
405-06, 565 N.W.2d 506 (1997).
¶7. There is no dispute that had the fatal accident occurred in Florida,
Progressive would have incurred no liability for Rasmussen's death under its policy with
Stegner. The result for an accident occurring in Wisconsin is governed by the policy's
extraterritorial clause, quoted above, which describes two circumstances under which
Progressive may incur financial liability for bodily injuries sustained by a third party in a
non-Florida accident involving the insured vehicle. The second circumstance does not apply
because Wisconsin does not compel drivers, resident or non-resident, to maintain any kind or
amount of automobile insurance. See Keane v. Auto-Owners Ins. Co.,
159 Wis.2d 539, 554, 464 N.W.2d 830 (1991) ("Wisconsin does not require drivers to
carry automobile insurance.... Ours is not a compulsory insurance state."). Thus,
West Bend cannot recover under the "compulsory insurance" provision of the
policy's extraterritorial clause, and we do not understand West Bend to argue otherwise.
¶8. Thus, if Progressive faces exposure for bodily injury liability resulting from
the Stegner-Rasmussen collision, it must derive from the first circumstance described in the
policy's extraterritorial clause. Under that provision, in order for West Bend to prevail,
there must exist in Wisconsin "a financial responsibility or similar law requiring limits
of liability for bodily injury ... higher than the Limits shown on the Declarations Page"
of the Progressive policy. Wisconsin's financial responsibility law is set forth in Wis. Stat.
ch. 344 (1997-98),3 which provides
for a minimum limit of "$25,000 because of bodily injury to or death of one person in
any one accident...." Wis. Stat. §§344.15(1) and 344.33(2).4 West Bend argues that Progressive is liable
under the "financial responsibility" provision of the policy because Wisconsin's
financial responsibility law establishes a minimum amount of bodily injury liability coverage
($25,000) which exceeds the "zero" limit for this coverage in Stegner's policy.
We disagree.
¶9. West Bend's argument assumes that the extraterritorial financial
responsibility provision in the policy applies regardless of whether the policy-holder has
elected to obtain bodily injury liability coverage under the policy. We agree with
Progressive, however, that (1)its policy can reasonably be read as providing bodily injury
liability coverage only when the insured has elected that coverage and paid premiums for it,
and (2)the extraterritorial financial responsibility provision in the policy comes into play only
if bodily injury liability coverage is in place. The policy form issued to Stegner includes
language that describes and would govern any bodily injury liability coverage she might have
elected to purchase, but the policy makes clear that the liability coverage is in place only
"if you pay a premium for bodily injury liability coverage." The financial
responsibility provision in the extraterritorial clause specifically refers to bodily injury
liability coverage, and it provides that the limit for this coverage "shown on the
Declarations Page" is increased as necessary to meet the minimum "financial
responsibility" limit imposed by laws similar to Wis. Stat. ch.344. Because Stegner
did not purchase bodily injury liability coverage, however, there is no coverage
on which the extraterritorial financial responsibility provision can operate.
¶10. The lack of any amount of bodily injury liability coverage in Stegner's
policy from Progressive also distinguishes it from the policy at issue in Keane v.
Auto-Owners Insurance Co., 159 Wis.2d 539, 464 N.W.2d 830 (1991), a case
on which West Bend relies. The Michigan driver in Keane, like
Stegner, was involved in a Wisconsin accident in which a Wisconsin
driver was killed. Auto-Owners Insurance Company insured the Michigan driver's vehicle,
and the policy provided bodily injury liability coverage to a limit of $20,000.
See Keane, 159 Wis.2d at 542. The policy also contained an
extraterritorial clause which provided that any bodily injury liability coverage "afforded
by this policy ... shall comply with the provisions of the motor vehicle financial
responsibility law of any state or province to the extent of the coverage and limits of liability
required by such law." Id. at 543. At issue in
Keane was whether the Auto-Owners policy's extraterritorial clause
operated to raise the policy's $20,000 bodily injury liability limit to $25,000 in order to
comply with Wisconsin's financial responsibility law.5 The supreme court concluded that the policy
language under review did precisely that. See id. at 556-57.
¶11. We read Keane to stand for the proposition that, when
an out-of-state insurance policy provides third-party bodily injury liability coverage, the
language of an extraterritorial clause in the policy may act to increase the limit of the
existing coverage to the minimum amount of bodily injury coverage required under
Wisconsin's financial responsibility law. The Progressive policy issued to Stegner, however,
provided her no bodily injury liability coverage whatsoever, and there is thus no coverage
limit which can be increased to meet the Wisconsin financial responsibility minimum.
¶12. West Bend's final contention is that under Florida's "partial
no-fault" insurance law, a Florida driver who maintains personal injury protection
coverage enjoys a limited immunity from liability for injuries sustained by others in an
automobile accident. From this, West Bend would have us conclude that the Progressive
policy issued to Stegner does indeed provide a variant form of bodily injury liability
coverage-coverage which may then be "reformed" under the extraterritorial
clause to create $25,000 of bodily injury liability coverage for Rasmussen's death in the
Wisconsin accident. We find nothing in the language of Stegner's policy, Wis. Stat. ch.
344, Keane, or any of the other authorities West Bend cites that would
require or even permit such a result.6
CONCLUSION
¶13. For the reasons discussed above, we conclude that Progressive cannot be
held liable to West Bend on the present record, and we affirm the judgment of the circuit
court dismissing Progressive from the litigation.
By the Court.-Judgment affirmed.
Recommended for publication in the official reports.
1 Stacy Stegner "[took] no position" on the coverage issue in the trial court, and
she is not a party to this appeal.
2 The benefits payable under the policy are limited to a percentage of hospital and medical
expenses, a percentage of lost earnings, and a death benefit, up to a policy limit of $10,000.
Progressive describes the "personal injury protection" coverage as being
"most analogous to Medical Payments coverage in Wisconsin."
3 All references to the Wisconsin Statutes are to the 1997-98 version unless otherwise
indicated.
4 As we have noted, there is no general requirement in Wisconsin that drivers maintain any
amount of liability insurance. The provisions of ch. 344 are triggered only after a driver has
been involved in an accident or has had his or her operating privilege suspended or revoked.
For a discussion of the "past accident" and "for the future" aspects of
Wisconsin's financial responsibility law, see Keane v. Auto-Owners Insurance
Co., 159 Wis.2d 539, 547-53, 464 N.W.2d 830 (1991).
5 The financial responsibility provisions in effect in Wisconsin at the time of the accident in
Keane v. Auto-Owners Insurance Co., 159 Wis.2d 539, 464 N.W.2d 830
(1991), were identical in all relevant respects to the those in effect today. See,
e.g., Wis. Stat. §§344.15, 344.33 (1987-88).
6 We note that under the second provision in the Progressive extraterritorial clause, if a
state's "compulsory insurance or similar law" requires a non-resident driver to
maintain insurance, Stegner's policy "will provide ... the required minimum amounts
and types of coverage" (emphasis added). Thus, the
"compulsory insurance" provision perhaps accomplishes the result which West
Bend seeks-the transmutation of Stegner's personal injury protection coverage into
third-party, bodily injury liability coverage. As we have discussed, however, Wisconsin has
not enacted a compulsory insurance mandate, and the "compulsory insurance"
provision in the Progressive policy has no application on the present facts.
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