In Lisowski v. Hastings Mutual Insurance Co., 2009 WI 11, the insurance company rejected a claim filed by the policyholder’s son after he sustained injuries in a vehicle driven by a friend. The car involved belonged to policyholder Dennis Lisowski, but the insurance in question was taken out for a tractor used in his business.

Hastings’ obligation to pay hinged on whether the coverage of Lisowski’s son followed him wherever the injury occurred or if it extended only to incidents occurring with the tractor, the vehicle specified on the policy.

Rejecting the Lisowski’s claim, Hastings cited language within the UIM endorsement and the main body of the policy for support. The Lisowskis argued that these passages were not as clear cut as Hastings asserted and that ambiguous provisions must be read in favor of the insured.

Confronted with similar facts and policy language in Crandall v. Society Insurance, 2004 WI App. 34, the Wisconsin Court of Appeals held that the insurance provisions unambiguously restricted UIM coverage to occupants of covered autos.

In this case, the court of appeals initially asked the supreme court to modify, limit, or overrule Crandall, but the high court would not accept the invitation. The court of appeals held that it was compelled to follow its precedent and ruled for Hastings.

The majority opinion

Finally before the supreme court, a majority opinion authored by Justice N. Patrick Crooks affirmed Crandall. The court said that coverage limiting an insured to just those vehicles listed on the policy is clearly based on language of the UIM endorsement stating “for a covered auto” and the declarations page restricting coverage to autos specified as “covered.”

The court dismissed Lisowski’s arguments that “for a covered auto” in the UIM endorsement is merely introductory language with no substantive effect and that the endorsement changed the “covered auto” requirements of the declarations page. The court said that an endorsement only changes portions of a policy with which it conflicts and in this instance, “for a covered auto” has a substantive effect that is entirely consistent with the declarations page.

Quoting Crandall, the court further observed that the policy in question was taken out for a business purpose and “[i]t would be unexpected for this kind of policy to cover [the insured] and his family under circumstances wholly unrelated to [his] business.”

The court turned away the Lisowski’s efforts to find ambiguity in the inconsistent reference to a “covered auto” in the endorsement and the coverage definitions. The court found no discrepancies, stating that policy terms are not read in isolation.

Likewise, the court defused the Lisowski’s argument that “for a covered auto” should be deemed an exclusion and construed narrowly against Hastings under Wis. Stat.  § 632.32 (5) (j). The court said that even if it were to find an exclusion, it complies with the statutory requirements imposed by § 632.32.

Dissent

Justice Ann Walsh Bradley dissented, joined by Chief Justice Shirley Abrahamson. Bradley criticized the majority for ignoring essential portions of the policy and upending traditional insurance law.

Dennis Lisowski’s son was a family member residing at his father’s home, making him a Class I insured, Bradley said. Class I insureds have long been accorded coverage that follows them and not the vehicle.

Even the Hastings policy recognized the special status of Class I insureds, Bradley noted. The Hastings policy did not require Lisowski’s son to occupy a covered auto to receive coverage – that requirement is imposed on Class II insureds. The majority failed to give meaning to every part of the policy and consequently erased the established distinction between Class I and Class II insureds, she said.

Bradley also faulted the majority for disregarding the “obvious conflict between the covered auto language and the grant of coverage in the UIM endorsement.” She noted that when the court of appeals sought modification or reversal of Crandall, it said “for a covered auto” was merely introductory language and “plainly inconsistent with the provisions that follow it.”

“Although the majority proclaims that the language is clear and unambiguous, it does not necessarily make it so,” Bradley wrote. “Instead, all too often this court finds policy language unambiguous which then obviates the need for further meaningful analysis. I am reminded of the words of a nonsense poem by Lewis Carroll: ‘I have said it thrice: What I tell you three times is true.’

“Just because Wisconsin courts thrice proclaim that this language is clear and unambiguous, it makes no more true than was the proclamation in Carroll’s poem,” she said.