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Hilts v. Hartford Underwriters Insurance Co.11/23/2005
Before Vergeront, Deininger and Higginbotham, JJ.
The Hartford Underwriters Insurance Company appeals the circuit court judgment determining that the reducing clause in the underinsured motorist (UIM) endorsement of the personal auto policy issued to Jill and Jeffrey Hilts was unenforceable because it was ambiguous in the context of the entire policy. Based on this determination, the circuit court concluded Hartford owed the Hiltses $48,500. We conclude the reducing clause is not ambiguous when read in context of the entire policy. Applying the reducing clause, we conclude Hartford has already paid the Hiltses the amount they are entitled to. We therefore reverse.
BACKGROUND
Jill Hilts was injured in a motor vehicle accident, and her damages are stipulated to exceed $150,000. The other driver had liability insurance with limits of $50,000. Hilts received $48,500 under that policy. At the time of the accident, the Hiltses were insured under a policy issued by Hartford that contained UIM coverage with limits of $100,000 per person. The UIM endorsement contained this reducing clause:
B. The limit of liability shall be reduced by all sums:
1. Paid because of the bodily injury by or on behalf of persons or organizations who may be legally responsible. This includes all sums paid under Part A; and
2. Paid or payable because of the bodily injury under any of the following or similar law:
a. Workers' compensation law; or
b. Disability benefits law.
The Hiltses sought to recover from Hartford $100,000 under their UIM coverage. Hartford's position was that, under the reducing clause in the UIM endorsement, the Hiltses were entitled to only $51,500--the $100,000 liability limit minus the $48,500 received from the other driver. Hartford paid $51,500 to the Hiltses.
The Hiltses then filed this action against Hartford, seeking a declaration that they were entitled to the full UIM limits of $100,000. They argued that the reducing clause was ambiguous when read in the context of the whole policy and therefore unenforceable. Both parties moved for summary judgment.
The circuit court granted summary judgment in favor of the Hiltses. The court concluded that the reducing clause in the UIM endorsement was ambiguous in the context of the entire policy and thus unenforceable. It therefore awarded judgment against Hartford in the amount of $48,500.
DISCUSSION
On appeal, Hartford argues that the circuit court erred in concluding that the reducing clause was ambiguous when read in the context of the entire policy. The Hiltses respond that ambiguity arises from their application for insurance; that a reasonable insured would not know the UIM endorsement and other endorsements were part of the policy; and that the contents of the declarations and policy booklet created ambiguity regarding the reducing clause in the UIM endorsement.
We review a circuit court's decision to grant summary judgment de novo and apply the same summary judgment methodology as the circuit court. Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315-17, 401 N.W.2d 816 (1987). A party is entitled to summary judgment if there are no genuine issues of material fact and that party is entitled to judgment as a matter of law. WIS. STAT.ยง 802.08(2).
We construe an insurance policy, as we do all contracts, to give effect to the intent of the parties as expressed in the language of the policy. Folkman v. Quamme, 2003 WI 116, , 264 Wis. 2d 617, 665 N.W.2d 857. The meaning of a particular provision within the policy must be determined within the context o
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