Ronald E. Belding, Jr. v. Deeanna L. Demoulin

2014 WI 8
SUPREME COURT OF WISCONSIN
CASE NO.: 2012AP829
COMPLETE TITLE: Ronald E. Belding, Jr. and Antoinette Belding,
Plaintiffs-Appellants,
v.
Deeanna L. Demoulin,
Defendant,
State Farm Mutual Automobile Insurance Company,
Defendant-Respondent-Petitioner.
REVIEW OF A DECISION OF THE COURT OF APPEALS
Reported at 346 Wis. 2d 160, 828 N.W.2d 890
(Ct. App. 2013 – Published)
PDC No: 2013 WI App 26
OPINION FILED: February 7, 2014
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: October 23, 2013
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Kenosha
JUDGE: Rebecca Matoska-Mentink
JUSTICES:
CONCURRED:
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
For the defendant-respondent-petitioner, there were briefs
by Claude J. Covelli and Boardman & Clark LLP, Madison, and oral
argument by Claude J. Covelli.
For the plaintiff-appellants, there was a brief by Gregory
A. Pitts and Schoone, Leuck, Kelley, Pitts & Knurr, S.C.,
Racine, and oral argument by Gregory A. Pitts.
An amicus curiae brief was filed by Jesse B. Blocher, and
Habush, Habush & Rottier S.C., Waukesha, and Kevin Lonergan and
Herrling Clark Law Firm, Ltd., Appleton, on behalf of Wisconsin
Association for Justice, with oral argument by Kevin Lonergan.
An amicus curiae brief was filed by James A. Friedman,
Katherine Stadler, and Godfrey & Kahn, S.C., Madison, on behalf
of Wisconsin Insurance Alliance and the Property Casualty
Insurers Association of America.
2
2014 WI 8
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2012AP829
(L.C. No. 2011CV311)
STATE OF WISCONSIN : IN SUPREME COURT
Ronald E. Belding, Jr. and Antoinette Belding,
Plaintiffs-Appellants,
v.
FILED
Deeanna L. Demoulin, FEB 7 2014
Defendant, Diane M. Fremgen
Clerk of Supreme Court
State Farm Mutual Automobile Insurance Company,
Defendant-Respondent-Petitioner
REVIEW of a decision of the Court of Appeals. Affirmed.
¶1 ANN WALSH BRADLEY, J. Petitioner, State Farm Mutual
Automobile Insurance Company (State Farm), seeks review of a
published court of appeals decision that reversed a summary
judgment that had been granted in State Farm's favor.1 Although
the circuit court agreed with State Farm that the drive-other-
car exclusion precluded coverage, the court of appeals
1
Belding v. Demoulin, 2013 WI App 26, 346 Wis. 2d 160, 828
N.W.2d 890 (reversing judgment of the circuit court for Kenosha
County, S. Michael Wilk, J. presiding).
No. 2012AP829
determined that Wis. Stat. § 632.32(6)(d) (2009-10),2 which
prohibited anti-stacking3 clauses, barred the drive-other-car
exclusion State Farm sought to apply.
¶2 State Farm argues that the drive-other-car exclusion
is enforceable because it is specifically authorized by Wis.
Stat. § 632.32(5)(j). Contending that Wis. Stat. § 632.32(5)(j)
is clear on its face, State Farm asserts that the court of
appeals erroneously interpreted the statute.
¶3 The error in State Farm's argument is that it focuses
on subsection (5)(j) in isolation, ignoring the rest of Wis.
Stat. § 632.32. Instead, we review the drive-other-car
exclusion permitted by Wis. Stat. § 632.32(5)(j) in context. We
apply the test set forth in Wis. Stat. § 632.32(5)(e) that
harmonizes the exclusion with the prohibition on anti-stacking
clauses in Wis. Stat. § 632.32(6)(d). This legislative test
allows policies to contain coverage exclusions if they are not
prohibited by Wis. Stat. § 632.32(6) or other law.
2
All subsequent references to the Wisconsin Statutes are
to the 2009-10 version unless otherwise indicated. We note that
the current version of Wis. Stat. § 632.32(d) differs from the
version at issue in this case. After being in effect for two
years, subsection (d) of Wis. Stat. § 632.32(6) was repealed in
2011. Accordingly, the interpretation of that subsection in
this opinion is of limited application.
3
Stacking refers to a policyholder's ability to recover
under multiple policies for the same loss when coverage under a
single policy would be inadequate. Lee R. Russ & Thomas F.
Segalla, 12 Couch on Insurance § 169:4 (3d ed. 1998); see also
Bartholomew v. Wis. Patients Comp. Fund, 2006 WI 91, ¶117, 293
Wis. 2d 38, 717 N.W.2d 216.
2
No. 2012AP829
¶4 Applying this legislative test, we conclude that
pursuant to the prohibition on anti-stacking clauses in Wis.
Stat. § 632.32(6)(d), State Farm cannot use the drive-other-car
exclusion in the Beldings' policy to prevent them from stacking
the uninsured motorist coverage of up to three vehicles owned
and insured by them. This conclusion is supported by both our
precedent and legislative history. Additionally, we are guided
by well-established canons of statutory construction.
¶5 Accordingly, we affirm the court of appeals.
I
¶6 The relevant facts of this case are not in dispute.
On January 13, 2010, Deeanna Demoulin (Demoulin) disobeyed a red
traffic light and crashed into the Ford Ranger pickup truck that
Ronald Belding, Jr., (Belding) was driving. Belding sustained
multiple injuries in the accident. He alleged he incurred
medical expenses, lost wages, and lost earning capacity due to
his injuries. His wife alleged that she suffered a loss of
society and companionship, and shared in the pecuniary losses
caused by Belding's injuries.
¶7 The Beldings had two separate policies with State Farm
for which they paid separate premiums and had separate uninsured
and underinsured motorist coverage. Because Demoulin was
uninsured, the Beldings sought to collect their damages from
State Farm, which provided uninsured motorist coverage for their
3
No. 2012AP829
Ford Ranger and their other vehicle, a Mercury Villager.4 After
State Farm paid the Beldings $100,000, which was the maximum
permitted under the Ford Ranger policy, the Beldings sought to
collect their excess damages through the uninsured motorist
coverage in their Mercury Villager policy.
¶8 The Mercury Villager policy contains a clause referred
to as the "drive-other-car" exclusion. Intended to address the
problem of free riders, drive-other-car exclusions keep an
insured from using insurance coverage of one car to provide
coverage on another vehicle the insured owns but has not
insured. See Arnold P. Anderson, 1 Wisconsin Insurance Law,
§ 3.72 (6th ed. 2010); Agnew v. American Family Mut. Ins. Co.,
150 Wis. 2d 341, 350, 441 N.W.2d 222 (1989).
¶9 The drive-other-car provision in the Mercury Villager
policy provides that:
THERE IS NO COVERAGE:
2. FOR AN INSURED WHO SUSTAINS BODILY INJURY RESULTING
FROM THE USE OF A MOTOR VEHICLE OWNED BY YOU OR ANY
RESIDENT RELATIVE IF IT IS NOT YOUR CAR, A NEWLY
ACQUIRED CAR, OR A TEMPORARY SUBSTITUTE CAR. . . .
(Emphasis in original). The policy defines "your car" as "the
vehicle shown under 'YOUR CAR' on the Declarations Page." The
Declarations Page for the Mercury Villager policy lists only the
Mercury Villager. Because Mr. Belding was not driving the
Mercury Villager when the accident occurred, State Farm
4
The Beldings also had a third policy covering their Toyota
Corolla. It is undisputed that the Corolla policy is
inapplicable to the damages sought in this case.
4
No. 2012AP829
determined that the drive-other-car exclusion in the Mercury
Villager policy applied to bar his claim and precluded coverage.
¶10 Thereafter, the Beldings filed suit in the circuit
court against Demoulin and State Farm. They sought to collect
from State Farm compensatory damages in excess of the amounts
previously paid under the Ford Ranger policy. State Farm filed
a motion for summary judgment. It argued that the drive-other-
car exclusion, which was permitted by Wis. Stat. § 632.32(5)(j),
operated to exclude coverage under the Mercury Villager policy.
In response, the Beldings asserted that the drive-other-car
exclusion was not applicable because Wis. Stat. § 632.32(6)(d)
prohibited anti-stacking clauses from applying to uninsured
motorist coverage. The circuit court determined that the drive-
other-car exclusion permitted by Wis. Stat. § 632.32(5)(j) was
controlling and granted State Farm's motion.
¶11 The court of appeals reversed. Belding v. Demoulin,
2013 WI App 26, 346 Wis. 2d 160, 828 N.W.2d 890. Central to its
analysis was an examination of Wis. Stat. § 632.32(5)(e),5 which
harmonizes the drive-other-car exclusion with the prohibition of
anti-stacking clauses. Accordingly, it applied that statute's
two-step test to determine the applicability of the drive-other-
car exclusion in the Mercury Villager policy. Id., ¶¶15, 16.
¶12 The first step looks at whether the exclusion is
prohibited by subsection (6), and the second step looks at
5
Wisconsin Stat. § 632.32(5)(e) provides: "A policy may
provide for exclusions not prohibited by sub. (6) or other
applicable law."
5
No. 2012AP829
whether the exclusion is prohibited by any other law. Id., ¶15.
The court determined that the drive-other-car exclusion failed
this test because it ran afoul of the anti-stacking prohibition
in Wis. Stat. § 632.32(6)(d). Accordingly, it reversed the
circuit court's grant of summary judgment and remanded the case.
II
¶13 In this case we are asked to review the circuit
court's grant of summary judgment. We review grants of summary
judgment independently, applying the same methodology employed
by the circuit court. Park Bank v. Westburg, 2013 WI 57, ¶36,
348 Wis. 2d 409, 832 N.W.2d 539. Summary judgment is
appropriate if "there is no genuine issue as to any material
fact and [] the moving party is entitled to a judgment as a
matter of law." Wis. Stat. § 802.08(2).
¶14 Here, there are no disputed facts. The dispute is
over whether an automobile insurance policy could prohibit
stacking the coverage limits for uninsured motorist coverage
during the time period when both Wis. Stat. § 632.32(5)(j)
(permitting drive-other-car exclusions) and Wis. Stat.
§ 632.32(6)(d) (prohibiting anti-stacking clauses) were in
effect. To answer this question we must interpret those
statutes as they apply to the insurance policy at issue.
Statutory interpretation and the interpretation of an insurance
policy present questions of law that this court reviews
independently of the determinations rendered by the circuit
court and the court of appeals. Teschendorf v. State Farm Ins.
Cos., 2006 WI 89, ¶9, 293 Wis. 2d 123, 717 N.W.2d 258.
6
No. 2012AP829
¶15 Statutory interpretation always begins with examining
the statutory language at issue. State ex rel. Kalal v. Circuit
Court for Dane Cnty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681
N.W.2d 110. We interpret statutory language "in the context in
which it is used; not in isolation but as part of a whole; in
relation to the language of surrounding or closely-related
statutes." Id., ¶46.
¶16 When we are unable to discern the answer to our
inquiry by an examination of the statutory language and its
context, we can look to our prior case law. It may illumine how
we have previously interpreted or applied the statutory
language. See, e.g., State v. Robert K., 2005 WI 152, ¶30, 286
Wis. 2d 143, 706 N.W.2d 257. We also may turn to legislative
history to ascertain the meaning of the statute. Kalal, 271
Wis. 2d 633, ¶51.
¶17 Our consideration of a statute's language and context
is guided by well-established canons of statutory construction.
Statutory provisions dealing with the same matter should be read
in harmony such that each has force and effect. Statutory
interpretations that render provisions meaningless should be
avoided. See Madison Metro. Sch. Dist. v. Circuit Court, 2011
WI 72, ¶101, 336 Wis. 2d 95, 800 N.W.2d 442; see also State v.
Kruse, 101 Wis. 2d 387, 395, 305 N.W.2d 85 (1981). In the event
of "a conflict between a general and a specific statute, the
latter controls." Emjay Inv. Co. v. Village of Germantown, 2011
WI 31, ¶38, 333 Wis. 2d 252, 797 N.W.2d 844 (quoting Bornemann
7
No. 2012AP829
v. City of New Berlin, 27 Wis. 2d 102, 111, 133 N.W.2d 328
(1965).
III
¶18 To provide context for our discussion, we begin with a
brief history of the legislation governing stacking provisions
in insurance policies. Prior to 1995, Wisconsin courts
disfavored limitations on stacking, including drive-other-car
exclusions, and routinely struck them down. As summed up by
Blazekovic v. City of Milwaukee, 2000 WI 41, ¶19, 234 Wis. 2d
587, 610 N.W.2d 467:
[A] long line of cases held invalid uninsured motorist
exclusions that served to prohibit the stacking of
claims. Courts also invalidated exclusions that
generally sought to limit uninsured motorist coverage.
Cases invalidating the various "drive other car"
exclusions relied on the broad purpose underlying
uninsured motorist coverage and reasoned that such
coverage is personal and portable "under all
circumstances."
(Citations omitted).
¶19 The Legislature responded in 1995, by amending Wis.
Stat. § 632.32 to include subsections (5)(f)-(5)(j),6 which
6
Those provisions provided:
(f) A policy may provide that regardless of the number
of policies involved, vehicles involved, persons
covered, claims made, vehicles or premiums shown on the
policy or premiums paid the limits for any coverage
under the policy may not be added to the limits for
similar coverage applying to other motor vehicles to
determine the limit of insurance coverage available for
bodily injury or death suffered by a person in any one
accident.
8
No. 2012AP829
(g) A policy may provide that the maximum amount of
uninsured or underinsured motorist coverage available
for bodily injury or death suffered by a person who was
not using a motor vehicle at the time of an accident is
the highest single limit of uninsured or underinsured
motorist coverage, whichever is applicable, for any
motor vehicle with respect to which the person is
insured.
(h) A policy may provide that the maximum amount of
medical payments coverage available for bodily injury
or death suffered by a person who was not using a motor
vehicle at the time of an accident is the highest
single limit of medical payments coverage for any motor
vehicle with respect to which the person is insured.
(i) A policy may provide that the limits under the
policy for uninsured or underinsured motorist coverage
for bodily injury or death resulting from any one
accident shall be reduced by any of the following that
apply:
1. Amounts paid by or on behalf of any person or
organization that may be legally responsible for
the bodily injury or death for which the payment
is made.
2. Amounts paid or payable under any worker's
compensation law.
3. Amounts paid or payable under any disability
benefits laws.
(j) A policy may provide that any coverage under the
policy does not apply to a loss resulting from the use
of a motor vehicle that meets all of the following
conditions:
1. Is owned by the named insured, or is owned by
the named insured's spouse or a relative of the
named insured if the spouse or relative resides
in the same household as the named insured.
2. Is not described in the policy under which
the claim is made.
9
No. 2012AP829
relate to the stacking of motor vehicle coverage and drive-
other-car exclusions. Relevant here are subsection (5)(f),
which specifically permitted insurers to include anti-stacking
clauses, and subsection (5)(j) which allowed drive-other-car
exclusions. 1995 Wis. Act 21, §4.
¶20 The Legislature made additional amendments to Wis.
Stat. § 632.32 in 2009. 2009 Wis. Act 28, §§ 3148-72. It
renumbered (5)(f) as (6)(d) and changed its language from a
grant of permission for anti-stacking clauses to a prohibition
on such clauses. Wis. Stat. § 632.32(6)(d).
¶21 The Legislature also sought to repeal subsection
(5)(j) in the 2009 bill, however, that portion of the bill was
vetoed by Governor Doyle. He explained "I am vetoing this
provision . . . because it may increase the costs of premiums,
but I am retaining separate provisions . . . that allow the
stacking of coverage limits for up to three vehicles owned by
the insured." Governor's Veto Message to 2009 Wis. Act 28, July
6, 2009, at 39 (available at Legislative Reference Bureau,
Madison, WI).
¶22 In 2011, the Legislature further amended Wis. Stat.
§ 632.32. This time it repealed Wis. Stat. § 632.32(6)(d) and
reinserted subsection (5)(f), restoring insurers' ability to
include anti-stacking clauses. 2011 Wis. Act 14, § 23.
3. Is not covered under the terms of the policy
as a newly acquired or replacement motor vehicle.
Wis. Stat. § 632.32(5) (1995-96).
10
No. 2012AP829
¶23 This case arose during the time period when both Wis.
Stat. § 632.32(5)(j) (permitting drive-other-car exclusions) and
Wis. Stat. § 632.32(6)(d) (prohibiting anti-stacking clauses)
were in place.
¶24 Our analysis begins with an examination of Wis. Stat.
§ 632.32, which governs motor vehicle insurance. The statutory
scheme provides for insurance clauses that are mandatory,
prohibited, and permissive. At issue here is the interplay
between a prohibited insurance clause and a permissive insurance
clause and how we are to resolve the conflict between the two.
¶25 On one hand we have subsection (6)(d) that prohibits
anti-stacking clauses and on the other hand we have subsection
(5)(j) that permits drive-other-car exclusions. Wisconsin Stat.
§ 632.32(6)(d)(2009-10) sets forth the prohibition as follows:
No policy may provide that, regardless of the number
of policies involved, vehicles involved, persons
covered, claims made, vehicles or premiums shown on
the policy, or premiums paid, the limits for any
uninsured motorist coverage or underinsured motorist
coverage under the policy may not be added to the
limits for similar coverage applying to other motor
vehicles to determine the limit of insurance coverage
available for bodily injury or death suffered by a
person in any one accident except that a policy may
limit the number of motor vehicles for which the
limits for coverage may be added to 3 vehicles.
(Emphasis supplied).
In contrast, Wis. Stat. § 632.32(5)(j)7 provides a permissive
exclusion:
7
Subsection (5)(j) has remained the same since the 1995
amendments. Wis. Stat. § 632.32(5)(j) (2011-12).
11
No. 2012AP829
A policy may provide that any coverage under the
policy does not apply to a loss resulting from the use
of a motor vehicle that meets all of the following
conditions:
1. Is owned by the named insured, or is owned by the
named insured's spouse or a relative of the named
insured if the spouse or relative resides in the same
household as the named insured.
2. Is not described in the policy under which the
claim is made.
3. Is not covered under the terms of the policy as a
newly acquired or replacement motor vehicle.
¶26 The language in subsection (6)(d) expressly prohibits
insurers from using policy exclusions that would limit an
insured's ability to add the uninsured or underinsured motorist
coverage of up to three vehicles. On its face, this conflicts
with the language in subsection (5)(j) which permits an insurer
to use a policy exclusion that would limit an insured's ability
to combine that coverage with another policy. See Welch v.
State Farm Mutual Automobile Ins. Co., 122 Wis. 2d 172, 176, 361
N.W.2d 680 (1985) (concluding that a "'drive other car'
exclusion serves to prohibit stacking of uninsured motorist
benefits against the same insurer").
¶27 State Farm asserts that we need focus only on
subsection (5)(j) that permits the drive-other-car exclusions
and that such a focus should begin and end our inquiry. It
maintains that there is no conflict because the drive-other-car
exclusion is a specifically permitted insurance clause and that
the application of such a permitted clause results in the
exclusion of coverage here.
12
No. 2012AP829
¶28 Yet, subsection (5)(j) does not exist in isolation
from the wider embraces of the statutory scheme. It must be
examined in context. Kalal, 271 Wis. 2d 633, ¶46. As noted
above, this case involves a conflict between prohibited and
permissible clauses. Our resolution of this conflict
requires us to examine yet another subsection in the statutory
scheme, (5)(e).
¶29 In 1979 the Legislature enacted subsection (5)(e),
which sets forth a two-part test that governs how we are to
resolve conflicts between prohibited and permissive insurance
clauses. Our subsequent precedent has applied this two-part
methodology. Wisconsin Stat. § 632.32(5)(e) states: "[a] policy
may provide for exclusions not prohibited by sub. (6) or other
applicable law." We have previously determined that this
language lays out a test for interpreting exclusions from
coverage, requiring us to: 1) consider whether the disputed
exclusion is prohibited by subsection (6), and if not, 2)
consider if it is prohibited by any other applicable law.
Blazekovic, 234 Wis. 2d 587, ¶¶12-13; Clark v. American Family
Mut. Ins. Co., 218 Wis. 2d 169, 174, 577 N.W.2d 790 (1998).
¶30 Application of this test is illustrated in Blazekovic,
234 Wis. 2d 587, ¶19. Similar to the situation here, that case
involved a dispute over whether a drive-other-car exclusion was
permissible. Citing the test in Wis. Stat. § 632.32(5)(e), we
looked first to Wis. Stat. § 632.32(6) to see if the disputed
exclusion fit the description of any of the enumerated
provisions. Id., ¶¶12-13. Notably, at that time the anti-
13
No. 2012AP829
stacking prohibition in subsection (6)(d) did not exist.
Because the exclusion did not fall within any of the enumerated
prohibitions in subsection (6), we then turned our focus to
whether the exclusion was prohibited by any other applicable
law. Id., ¶14. We determined that the insurance policy
exclusion at issue conflicted with the statutory requirements of
Wis. Stat. § 632.32(5)(j), and thus concluded that it was
invalid. Id., ¶42.
¶31 State Farm asserts that the test in Wis. Stat.
§ 632.32(5)(e) is inapplicable to the exclusion at issue here.
It argues that Blazekovic does not support the use of the test
because the issue in that case was whether a drive-other-car
exclusion met the requirements for drive-other-car exclusions in
Wis. Stat. § 632.32(5)(j). It contends that the only reason
that the Blazekovic court applied the test in subsection (5)(e)
was because the exclusion at issue did not comply with Wis.
Stat. § 632.32(5)(j).
¶32 This argument is unavailing. In Blazekovic we looked
first at whether the exclusion was prohibited under Wis. Stat.
§ 632.32(6) before considering whether the requirements for
drive-other-car exclusions in Wis. Stat. § 632.32(5)(j) applied.
234 Wis. 2d 587, ¶13. The methodology employed by the
Blazekovic court undercuts State Farm's argument that the test
in subsection (5)(e) applied only because the exclusion at issue
was inconsistent with the requirements in subsection (5)(j).
¶33 State Farm additionally contends that because the
drive-other-car exclusion here is expressly permitted by Wis.
14
No. 2012AP829
Stat. § 632.32(5)(j), the exclusion does not need to be further
authorized by Wis. Stat. § 632.32(5)(e). This argument ignores
well established canons of statutory construction. Where
possible, statutory provisions dealing with the same subject
matter should be interpreted "in a manner that harmonizes them
in order to give each full force and effect." Madison Metro.
Sch. Dist., 336 Wis. 2d 95, ¶101 (quoting McDonough v. Dep't of
Workforce Dev., 227 Wis. 2d 271, 279-80, 595 N.W.2d 686 (1999)).
Further, "[a] construction of a statute rendering a portion of
it meaningless must be avoided." Kruse, 101 Wis. 2d at 395.
¶34 Here, applying the drive-other-car exclusion as
suggested by State Farm would render meaningless both
subsections (6)(d) and (5)(e). In contrast, construing the
prohibition on anti-stacking clauses in Wis. Stat.
§ 632.32(6)(d) as trumping the drive-other-car exclusion
permitted by subsection (5)(j), gives meaning to all three
subsections.
¶35 Such a construction would not render subsection (5)(j)
meaningless because the drive-other-car exclusion that
subsection permits would still function in other circumstances.
Subsection (6)(d) is of limited application. It provides that
no policy may prohibit stacking the uninsured or underinsured
motorist coverage of up to three vehicles. Wis. Stat.
§ 632.32(6)(d). The exclusion permitted by subsection (5)(j)
still has force in that it would continue to apply to prevent
the stacking of coverage on more than three vehicles.
Additionally, because the limitations on anti-stacking
15
No. 2012AP829
provisions in subsection (6)(d) apply only to uninsured and
underinsured motorist coverage, the drive-other-car exclusion
permitted by subsection (5)(j) continues to apply to other types
of coverage.
¶36 Importantly, construing the prohibition on anti-
stacking clauses in subsection (6)(d) as trumping the drive-
other-car exclusions permitted by subsection (5)(j), still
allows subsection (5)(j) to function as it was intended. The
drive-other-car exclusion was meant to address what has been
referred to as the "free rider" problem.
Wisconsin courts have long recognized that the purpose
of the drive other cars exclusion is to provide
coverage to the insured when he or she has infrequent
or casual use of a vehicle other than the one
described in the policy, but to exclude coverage of a
vehicle that the insured owns or frequently uses for
which no premium has been paid.
Westphal v. Farmers Ins. Exch., 2003 WI App 170, ¶11, 266
Wis. 2d 569, 669 N.W.2d 166 (citations omitted); see also Agnew
v. American Family Mut. Ins. Co., 150 Wis. 2d 341, 350, 441
N.W.2d 222 (1989) ("the purpose of the drive-other-car provision
is to prevent a policyholder from insuring all the cars in one
household by taking out just one policy and paying only one
premium").
¶37 Subsection (5)(j) can still operate to allow an
exclusion that would prevent policyholders from using their
uninsured or underinsured motorist coverage on one vehicle to
provide coverage for another vehicle that the policyholders own
but have not paid to insure. Accordingly, applying the
16
No. 2012AP829
prohibition on anti-stacking clauses in subsection (6)(d) does
not render subsection (5)(j) meaningless and still gives effect
to the primary purpose of subsection (5)(j).
¶38 Further support for our interpretation can be found in
the legislative history. As discussed above, when the
Legislature amended Wis. Stat. § 632.32 in 2009, it did not
merely remove the permission for anti-stacking clauses in
subsection (5)(f). It also added anti-stacking clauses to the
list of prohibited provisions under Wis. Stat. § 632.32(6), and
the Governor retained this portion of the bill. The Legislature
is presumed to have acted with the knowledge of this court's
prior construction of (5)(e), prioritizing prohibitions over
permissible clauses. See Lang v. Lang, 161 Wis. 2d 210, 227,
467 N.W.2d 772 (1991). It is appropriate to presume the
Governor is also fully informed when making amendments to
legislation. Accordingly, it appears that both the Legislature
and Governor were aware of the conflict and intended for the
prohibition on stacking clauses in Wis. Stat. § 632.32(6)(d) to
supersede any conflicting, permissible clause in Wis. Stat.
§ 632.32(5).
¶39 Our interpretation is also consistent with another
canon of statutory construction: "One of the well-recognized
canons of statutory construction is that, in event of a conflict
between a general and a specific statute, the latter controls."
Emjay Inv. Co., 333 Wis. 2d 252, ¶387 (quoting Bornemann, 27
Wis. 2d at 111).
17
No. 2012AP829
¶40 A comparison of the applications of subsections
(6)(d) and (5)(j) reveals that subsection (6)(d) is more
specific. The drive-other-car exclusion permitted by Wis. Stat.
§ 632.32(5)(j) applies to "any coverage." In contrast, the
prohibition on anti-stacking provisions in Wis. Stat.
§ 632.32(6)(d) applies only to the uninsured and underinsured
motorist coverage on up to three vehicles. Thus, subsection
(6)(d) controls because it is the more specific provision.
IV
¶41 Having set forth the test for determining the validity
of insurance policy exclusions, we turn to the facts of this
case. Here, the Beldings had separate insurance policies for
two vehicles, their Ford Ranger pickup truck and their Mercury
Villager, and they paid two separate premiums. After an
accident with an uninsured motorist, State Farm paid the maximum
amount under the Ford Ranger's uninsured motorist coverage. The
Beldings seek to apply the uninsured motorist coverage in their
Mercury Villager policy to obtain compensation from State Farm
for their damages in excess of the Ford Ranger policy's limit.
They rely on the fact that anti-stacking clauses are prohibited
by Wis. Stat. § 632.32(6)(d). State Farm wants to use the
drive-other-car exclusion in the Mercury Villager policy to deny
coverage. It relies on the fact that drive-other-car exclusions
are permitted by Wis. Stat. § 632.32(5)(j).
¶42 To resolve the conflict between statutory language
regarding permissible and prohibited exclusions, we turn to the
test laid out in Wis. Stat. § 632.32(5)(e). First, we look to
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see if the exclusion is prohibited under subsection (6). If a
prohibition applies, the exclusion is barred. Second, if no
prohibition in subsection (6) applies, then we look to see if
any other law bars the exclusion. If neither prevents the
exclusion, it is permissible.
¶43 Here, the inquiry stops after the first step of the
test. Wisconsin Stat. § 632.32(6)(d) provides that no policy
may prohibit the stacking of the uninsured or underinsured
motorist coverage on up to three vehicles. It states:
No policy may provide that, regardless of the number
of policies involved, vehicles involved, persons
covered, claims made, vehicles or premiums shown on
the policy, or premiums paid, the limits for any
uninsured motorist coverage or underinsured motorist
coverage under the policy may not be added to the
limits for similar coverage applying to other motor
vehicles to determine the limit of insurance coverage
available for bodily injury or death suffered by a
person in any one accident except that a policy may
limit the number of motor vehicles for which the
limits for coverage may be added to 3 vehicles.
Wis. Stat. § 632.32(6)(d). Thus, pursuant to the prohibition on
anti-stacking clauses in Wis. Stat. § 632.32(6)(d), State Farm
could not use the drive-other-car exclusion to prevent the
Beldings from stacking the uninsured motorist coverage in their
Mercury Villager policy onto the uninsured motorist coverage in
their Ford Ranger policy.
V
¶44 In sum, we review the drive-other-car exclusion
permitted by Wis. Stat. § 632.32(5)(j) in context. We apply the
test set forth in Wis. Stat. § 632.32(5)(e) that harmonizes the
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No. 2012AP829
exclusion with the prohibition on anti-stacking clauses in Wis.
Stat. § 632.32(6)(d). This legislative test allows policies to
contain coverage exclusions if they are not prohibited by Wis.
Stat. § 632.32(6) or other law.
¶45 Applying this legislative test, we conclude that
pursuant to the prohibition on anti-stacking clauses in Wis.
Stat. § 632.32(6)(d), State Farm cannot use the drive-other-car
exclusion in the Mercury Villager policy to prevent the Beldings
from stacking the uninsured motorist coverage of up to three
vehicles owned and insured by them. This conclusion is
supported by both our precedent and by legislative history.
Additionally, we are guided by well-established canons of
statutory construction.
¶46 Accordingly, we affirm the court of appeals.
By the Court.—The decision of the court of appeals is
affirmed.
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No. 2012AP829
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