WI Court of Appeals rules 13-page automobile insurance policy is not organizationally complex.

Byline: David Ziemer

An automobile insurance policy that is only 13 pages long, and contains no confusing language, is not so organizationally complex that the reducing clause to the underinsured motorist (UIM) coverage could be considered ambiguous, the Wisconsin Court of Appeals held on Feb. 17.

The court also held that UIM benefits may be reduced by payments from sources other than those enumerated in sec. 632.32(5)(i).

In 1998, Milwaukee Police Officer Steven Van Erden's squad car was struck broadside by a vehicle driven by Joseph Sobczak. Van Erden suffered serious injuries.

Sobczak was insured by Badger Mutual Insurance Company with a liability limit of $25,000. Badger Mutual paid the full limits of the policy to Van Erden. Van Erden was also paid $159,496 in worker's compensation coverage by the City.

Van Erden then filed claims for UIM coverage with his own insurance carrier, American Family Mutual Insurance Company. Both his policies contained identical reducing and anti-stacking provisions. Based on the terms of the policies, American Family paid Van Erden $65,503 - the difference between the largest amount of UIM coverage under either policy ($250,000) and the aggregate payments made by Badger Mutual on behalf of Sobczak and the City as Officer Van Erden's worker's compensation carrier ($184,496).

Van Erden filed a declaratory judgment action against the City and American Family, and all parties moved for summary judgment. Milwaukee County Circuit Court Judge David A. Hansher granted summary judgment in favor of the City and American Family.

Van Erden appealed, but the court of appeals affirmed in a published decision. Van Erden v. Sobczak, 2003 WI App 57, 260 Wis.2d 881, 659 N.W.2d 896. The Wisconsin Supreme Court vacated the decision for reconsideration in light of Folkman v. Quamme, 2003 WI 116, 264 Wis.2d 617, 665 N.W.2d 857.

On remand from the Supreme Court, the court of appeals once again affirmed the trial court's holding in a decision written by Judge Patricia Curley, and joined by Judge Ralph Adam Fine. Judge Charles B. Schudson concurred in part, and dissented in part.

Self-insured City

The court first held that the City of Milwaukee, as a self-insured entity, was not required to offer UIM coverage to its employees.

Section 632.32(4m)(a)1 requires any "insurer writing policies" to offer UIM coverage to its insureds.

Section 62.67 requires first class cities (Milwaukee) to provide uninsured motorist (UM) coverage for...