Keane v. Auto-Owners Insurance Co. ( 1991 )

CHIEF JUSTICE HEFFERNAN

(dissenting). Because Wisconsin's financial responsibility law clearly and unequivocally did not require any amount of liability coverage "at the time of the accident," Keane is entitled to $120,000 of uninsured motorist (UM) coverage under the express terms of the General Casualty Company policies. Accordingly, I dissent.

It is clear that, under Keane's policies, Moore's liability limits must be determined at the time of the accident with Keane. See majority op. at 542. The majority acknowledges that Wisconsin "is not a compulsory insurance state." See id. at 554. What it fails to recognize is that Wisconsin's financial responsibility law is entirely "prospective," i.e., it does not require anything of motorists or insurers prior to or at the time of an accident.¹ The vast majority of courts and commentators recognize that such financial responsibility acts are "second bite" statutes which are not triggered until after a motorist's first accident.²

While the secretary of Wisconsin's Department of Transportation (DOT) may subsequently require Moore to post some kind of security for his "past accident" with Keane or risk losing his driving privileges in this state, such a discretionary decision can only be made sometime after, and not "at the time of," the accident. See secs. 344.13 and 344.14, Stats. 1987-88. Such prospectively required security need not be an insurance policy, moreover, but may, for example, be in the form of a bond. See sec. 344.15, Stats. There is no evidence in the record, in any event, that the Secretary of DOT has required Moore to post any security, and whether or not it does so after the accident is of no concern to us here.

Not only does Wisconsin not require drivers to carry any insurance, but there is clearly no statutory provision mandating that insurance issued in Wisconsin be of any certain amount. This court's prior dicta in Wood v. American Family Mut. Ins. Co., 148 Wis. 2d 639, 653, 436 N.W.2d 594, 600 (1989), that "[i]n Wisconsin, liability coverage currently cannot be issued for less than $25,000" has no foundation in either statute or case law.

Section 344.33, Stats., which Wood and the majority here cite as statutory support (see majority op. at 554, only sets forth that policies used for certification of proof of financial responsibility for the future must have $25,000 minimum limits. It neither applies to policies in any context outside of this certification process under the Act nor mandates in any way that insurers must certify their insureds.³ Chapter 344 does not attempt to regulate insurers but rather motorists who are involved in auto accidents. Chapter 344 can be sharply contrasted to ch. 632, for example, which directly regulates insurers by setting forth various required and permissive provisions and coverages.

Lacking statutory support, it would be an impermissible act of judicial legislation for this court to require that insurance policies issued in Wisconsin provide a minimum of $25,000 of coverage. Moore's policy was, in any event, issued in Michigan, not Wisconsin, and accordingly cannot be subject to any of our statutory or judicial requirements concerning minimum liability coverage upon issuance. No matter how you look at it, Moore was not "required" to have $25,000 of liability coverage "at the time of [his] accident" with Keane, and accordingly the Michigan policy's $20,000 limits did not need to increase to comply with any required coverage.

The majority's assertion that a reasonable insured in Moore's position would expect his or her policy limits to increase to the $25,000 amount specified in Wisconsin's Act, while having superficial appeal, is substantially irrelevant.⁴ The "extraterritorial" clause in Moore's policy unambiguously looks to the "coverage and limits of liability required” (emphasis supplied) by our financial responsibility law.⁵ While having a policy with $25,000 of liability coverage may be the simplest way of responding to a DOT request for security following an accident, the fact remains that such insurance coverage is not required prior to, at the time of, nor, for that matter, any time after an accident. See sec. 344.14, Stats. Finally, it would not contravene public policy to properly interpret the plain language of a Michigan insurance policy so as to allow a Wisconsin plaintiff to collect UM benefits under his policies.⁶

I respectfully dissent and would reverse the decision of the court of appeals.

I am authorized to state that Justice Shirley S. Abrahamson joins in this dissent.

1 See Schanche v. Estate of Alvarez, 368 F. Supp. 543, 544 (E.D. Wis. 1973) ("Section 344.15 is part of the state's financial responsibility law, and it is directly applicable only after an accident.").

2 See Annotation, Policy Provision Extending Coverage to Comply with Financial Responsibility Act as Applicable to Insured's First Accident, 8 A.L.R.3d 388 (1966 and 1990 Supp.); 12A Couch on Insurance 2d, sec. 45:721 at 352-361 (rev. ed. 1981), which states:

The basic problem with this type of statute is that the motorist is entitled to one "free" accident. These laws do not apply retroactively to the first accident. . .. Such an act provides little consolation to the victim of the first accident whose only recourse is to seek to satisfy the judgment entered against the irresponsible motorist [or] attempt to recover from his own uninsured motorist carrier . . ..

3 General Casualty's own insurance policy demonstrates the voluntary nature of certification under the Act:

Financial Responsibility Required. If we certify this policy as proof of financial responsibility for the future under any financial responsibility law . . .. (Emphasis supplied.)

4 Cf. Oleson v. Farmers Ins. Group, 185 Mont. 164, 605 P.2d 166 (1980) (distinguishing between the use of terms, "specified" and "required," in UM provision referring to financial responsibility act).

5 See 12A Couch on Insurance 2d sec. 45:764 at 419:

The provision that the policy shall comply with the financial responsibility act of the state where applicable does not create an ambiguity which is to be resolved against the insurer . . ..

6 It should be noted that in Amick v. Liberty Mut. Ins. Co., 455 A.2d 793 (R.I. 1983), to the contrary, the plaintiff was a Rhode Island resident who wanted the court to increase the liability limits under an "extraterritorial" clause for his benefit.