Secura Supreme Insurance Company v. The Estate of Daniel Keith Huck ( 2023 )

2023 WI 21SUPREME COURT OF WISCONSIN
CASE NO.: 2020AP1078-FT
COMPLETE TITLE: Secura Supreme Insurance Company,
Plaintiff-Appellant-Petitioner,
v.
The Estate of Daniel Keith Huck,
Defendant-Respondent.
REVIEW OF DECISION OF THE COURT OF APPEALS
Reported at 399 Wis. 2d 542, 966 N.W.2d 124PDC No: 2021 WI App 69 - Published
OPINION FILED: March 22, 2023
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: November 7, 2022
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Racine
JUDGE: Eugene A. Gasiorkiewicz
JUSTICES:
ROGGENSACK, J., delivered the majority opinion of the Court with
respect to ¶¶1-2, 4-16, and 29, in which ZIEGLER, C.J., ANN
WALSH BRADLEY, DALLET, HAGEDORN, and KAROFSKY, JJ., joined, and
an opinion, in which ZIEGLER, C.J., joined. DALLET, J., filed a
concurring opinion, in which ANN WALSH BRADLEY, HAGEDORN, and
KAROFSKY, JJ., joined. REBECCA GRASSL BRADLEY, J., filed a
dissenting opinion.
NOT PARTICIPATING:
ATTORNEYS:
For the plaintiff-appellant-petitioner, there were briefs
filed by Barbara A. O’Brien, Erik M. Gustafson, and Borgelt,
Powell, Peterson & Frauen, S.C., Milwaukee. There was an oral
argument by Patryk Silver.
For the defendant-respondent, there was a brief filed by
Susan R. Tyndall, Tony M. Dunn, Angela Komp, and Habush, Habush
& Rottier, S.C., Racine. There was an oral argument by Tony M.
Dunn.
An amicus curiae brief was filed by Edward E. Robinson and
Cannon & Dunphy, S.C., Brookfield, for the Wisconsin Association
for Justice. There was an oral argument by Edward E. Robinson.
An amicus curiae brief was filed by James A. Friedman,
Daniel C.W. Narvey, and Godfrey & Kahn, S.C., Madison, for the
Wisconsin Insurance Alliance, the American Property Casualty
Insurance Association, and the Wisconsin Defense Counsel.
2
2023 WI 21NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2020AP1078-FT
(L.C. No. 2019CV1847)
STATE OF WISCONSIN : IN SUPREME COURT
Secura Supreme Insurance Company,
Plaintiff-Appellant-Petitioner,
FILED
v. MAR 22, 2023
The Estate of Daniel Keith Huck, Sheila T. Reiff
Clerk of Supreme Court
Defendant-Respondent.
ROGGENSACK, J., delivered the majority opinion of the Court with
respect to ¶¶1-2, 4-16, and 29, in which ZIEGLER, C.J., ANN
WALSH BRADLEY, DALLET, HAGEDORN, and KAROFSKY, JJ., joined, and
an opinion, in which ZIEGLER, C.J., joined. DALLET, J., filed a
concurring opinion, in which ANN WALSH BRADLEY, HAGEDORN, and
KAROFSKY, JJ., joined. REBECCA GRASSL BRADLEY, J., filed a
dissenting opinion.
REVIEW of a decision of the Court of Appeals. Affirmed.
¶1 PATIENCE DRAKE ROGGENSACK, J. Petitioner Secura
Supreme Insurance Company (Secura), which insured Daniel Keith
Huck, seeks review of a published court of appeals decision1 that
1Secura Supreme Ins. Co. v. Est. of Huck, 2021 WI App 69,
399 Wis. 2d 542, 966 N.W.2d 124.
No. 2020AP1078-FT
affirmed an order granting judgment to the Estate of Daniel
Keith Huck (Estate).2 We affirm the court of appeals.
¶2 We interpret Secura's policy as precluding Secura from
reducing its liability to the Estate by the total amount of
payments the Estate initially received. The Estate first
received worker's compensation from Huck's employer's worker's
compensation insurer (WC insurer), and then a settlement from
the tortfeasor's insurer. Wisconsin Stat. § 102.29(1)(b)(2021-
22)3 obligated the Estate to reimburse the WC insurer with a
portion of the settlement it received from the tortfeasor.
Secura's underinsured motorist (UIM) policy contemplated
payments made in accordance with worker's compensation law in
its reducing clause, and obligated the Estate to reimburse the
WC insurer. The policy also required the Estate to exhaust any
other bodily injury liability bonds or policies and to receive
payment from them before Secura would pay UIM benefits.
Accordingly, we conclude the policy's plain language required
its payment of UIM benefits based on the Estate's recovery after
reimbursements to the WC insurer and collection of the
tortfeasor's liability payment had occurred.
¶3 However, Secura argues its policy "substantially
incorporates" the statutory language of Wis. Stat.
§ 632.32(5)(i), which permits it to reduce payment by the amount
2 The Honorable Eugene A. Gasiorkiewicz of Racine County
presided.
3 All subsequent references to the Wisconsin Statutes are to
the 2021-22 version unless otherwise indicated.
2
No. 2020AP1078-FT
the Estate initially received. We conclude the plain language
of § 632.32(5)(i) establishes that an insurer may reduce its
liability by the recovery of the insured at the time the insurer
enforces its reducing clause. The Estate's obligatory
reimbursement was made pursuant to "worker's compensation law,"
which § 632.32(5)(i)2. recognizes. For these reasons, we
conclude that Secura is not statutorily authorized to reduce its
liability limits by the total worker's compensation and
tortfeasor settlement payments the Estate initially received but
was obligated to reimburse in part. Accordingly, Secura's
policy and § 632.32(5)(i) require Secura to provide an
additional $9,718.73 to the Estate.
I. BACKGROUND
¶4 The facts are undisputed. Mr. Huck was struck and
killed by a motorist while he performed his job duties for the
Village of Mount Pleasant. Since the fatal accident occurred in
the course of Mr. Huck's employment, the Village's WC insurer
initially provided $35,798.04 to the Estate.
¶5 The motorist that struck Mr. Huck was insured for
$25,000 in liability coverage, which also was provided to
Mr. Huck's Estate. However, by receiving the $25,000 settlement
from the tortfeasor, the Estate was obligated to reimburse the
WC insurer from the settlement based on Wis. Stat.
§ 102.29(1)(b). As required, the Estate reimbursed the WC
insurer $9,718.73 so that the Estate ultimately retained
$26,079.31 from worker's compensation. This dispute centers on
the importance of the $9,718.73 reimbursement (the "Disputed
3
No. 2020AP1078-FT
Amount") that the Estate was required to return to the WC
insurer.
¶6 Mr. Huck had purchased an automobile insurance policy
from Secura that included UIM coverage with a liability limit of
$250,000 for "each person." The Estate's recovery from worker's
compensation and the tortfeasor were insufficient to cover
Mr. Huck's damages, which exceeded $250,000. The Estate
submitted a claim under the Secura UIM policy. The policy's
reducing clause allowed Secura to reduce its UIM liability
limits by the amounts paid by a tortfeasor, and by "amounts paid
or payable under any worker's compensation law."4 Therefore,
Secura reduced its liability limit to the Estate by the $25,000
settlement with the tortfeasor. Secura also reduced its
liability limit by the total worker's compensation benefit of
$35,798.04, "even [though] some of that money (the Disputed
Amount) return[ed] to the [worker's compensation] Payor." Based
on these reductions, Secura tendered $189,201.96 to the Estate.5
¶7 Secura filed a declaratory judgment complaint and
moved for judgment on the pleadings pursuant to Wis. Stat.
§ 802.06(3). Secura sought a declaration that its UIM reducing
4 A reducing clause "permits a setoff from the insured's UIM
coverage the amount paid to the insured by the underinsured
tortfeasor," or by other enumerated sources. Dowhower ex rel.
Rosenberg v. W. Bend Mut. Ins. Co., 2000 WI 73, ¶1, 236 Wis. 2d
113, 613 N.W.2d 557.
5 Secura explained in its declaratory judgment complaint
that: ($250,000)-($25,000 tortfeasor settlement)-($35,798.04 in
worker's compensation) = $189,201.96.
4
No. 2020AP1078-FT
clause applies to the total "amount paid" pursuant to the
worker's compensation payment, notwithstanding any reimbursement
under Wis. Stat. § 102.29. The circuit court denied Secura's
motion and granted the Estate judgment on its counterclaim,
ordering Secura to tender the Disputed Amount to the Estate.
Secura appealed.
¶8 The court of appeals affirmed, relying on our
statutory analysis of Wis. Stat. § 632.32(5)(i) in Teschendorf
v. State Farm Ins. Cos., 2006 WI 89, 293 Wis. 2d 123, 717 N.W.2d
258. In Teschendorf, we held that § 632.32(5)(i) "does not
allow an insurer to reduce uninsured motorist [UM] policy limits
by worker's compensation payments that are not made to or on the
behalf of the insured, the insured's heirs, or the insured's
estate." Id., ¶2. The court of appeals reviewed our statutory
analysis and public policy rationales in Teschendorf before
concluding that Secura is "permitted to reduce its [UIM]
coverage limits . . . [only] by the total amount of worker's
compensation actually received by the Estate." Secura Supreme
Ins. Co. v. Est. of Huck, 2021 WI App 69, ¶20, 399 Wis. 2d 542,
966 N.W.2d 124. Accordingly, the court of appeals determined
Secura must provide the Estate the Disputed Amount.
¶9 Secura petitioned us for review, which we granted.
Secura renews its argument that the plain language of "amounts
paid" and "payment" settles this matter. Secura argues it may
reduce its liability by the "amounts paid" to the Estate
regardless of what happened after those amounts were provided
because the Estate was paid those amounts, notwithstanding its
5
No. 2020AP1078-FT
obligation to reimburse the WC insurer.6 The Estate contends the
Disputed Amount cannot be considered an "amount paid" because
the Estate did not retain possession of it. It argues that
Secura impermissibly reduced its UIM liability limits by the
Disputed Amount, and that Secura owes it the Disputed Amount for
a total recovery of $198,920.69 under the policy.
II. DISCUSSION
A. Standard of Review
¶10 Our task is to interpret an insurance policy and Wis.
Stat. § 632.32(5)(i) based on undisputed facts. The
interpretation of an insurance policy presents a question of law
that we review independently. Smith v. Atl. Mut. Ins. Co., 155
Wis. 2d 808, 810, 456 N.W.2d 597 (1990). Statutory
interpretation also presents a question of law that we review
independently. Mau v. N.D. Ins. Rsrv. Fund, 2001 WI 134, ¶28,
248 Wis. 2d 1031, 637 N.W.2d 45.
B. Secura's Policy
¶11 We first review the UIM policy Mr. Huck purchased from
Secura. The Declarations page provides that Mr. Huck purchased
UIM coverage with a liability limit of $250,000 for "each
6The policy allows Secura to reduce its liability by "all
sums: paid" (by or on behalf of persons who are legally
responsible) and by "all sums: paid or payable" (worker's
compensation law). Wisconsin Stat. § 632.32(5)(i) allows
insurers to reduce their liability by "[a]mounts paid" (by or on
behalf of persons who are legally responsible) and "[a]mounts
paid or payable" (worker's compensation law). Despite the minor
differences between the policy language and statute, Secura
relies on its interpretation of "paid."
6
No. 2020AP1078-FT
person." The policy includes an "Underinsured Motorist
Coverage" endorsement. The UIM endorsement establishes that
Secura "will pay under this coverage only after the limits of
liability under any bodily injury liability bonds or policies
have been exhausted by payment of judgments or settlements."
The policy also includes a reducing clause, which provides in
pertinent part:
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 . . . .
(2) Paid or payable because of the bodily injury
under any of the following or similar law:
a. Worker['s] compensation law;
. . . .
This coverage, when combined with any amounts paid by
liability policies or bonds applicable to the owner or
driver of an underinsured motor vehicle, will provide
coverage up to the amount stated in the Declarations.
This is the contract language we interpret to determine whether
Secura's policy permits the insurer to reduce its UIM liability
limit to the Estate by the total payments it initially received,
rather than by the Estate's recovery after reimbursement to the
WC insurer had occurred.
¶12 We begin by revisiting the rules that guide our
analysis. Our interpretation of an insurance policy is
controlled by the same rules of construction that we apply to
interpret a contract. Kremers-Urb. Co. v. Am. Emps. Ins. Co.,
119 Wis. 2d 722, 735, 351 N.W.2d 156 (1984). Our goal is to
7
No. 2020AP1078-FT
"give effect to the intent of the parties as expressed in the
language of the policy." Folkman v. Quamme, 2003 WI 116, ¶12,
264 Wis. 2d 617, 665 N.W.2d 857. Language in an insurance
contract "is to be given the common and ordinary meaning it
would have in the mind of a lay person." Kremers-Urb., 119
Wis. 2d at 735. "If possible, a court should interpret a
contract so that all parts are given meaning." Whirlpool Corp.
v. Ziebert, 197 Wis. 2d 144, 154, 539 N.W.2d 883 (1995). When
the "terms of an insurance policy are plain on their face, the
policy must not be rewritten by construction." Smith, 155
Wis. 2d at 811.
¶13 The policy does not define the term "paid." Secura
argues that "paid" simply means an obligation has been
discharged, "no matter the ultimate destination." Secura argues
that the WC insurer and the tortfeasor's insurer "paid" the
Estate, consequently discharging their obligations. Therefore,
Secura argues it may reduce its liability limit by the Disputed
Amount despite the Estate's statutory obligation to repay a
portion of its recovery to the WC insurer.
¶14 The plain language in the policy's reducing clause
allows Secura to reduce its liability by "sums" "[p]aid or
payable . . . under any . . . [w]orker['s] compensation law."
Accordingly, the policy contemplates payments made consistent
with worker's compensation laws (because of bodily injury). See
State ex rel. Journal/Sentinel, Inc. v. Pleva, 155 Wis. 2d 704,
8
No. 2020AP1078-FT
710, 456 N.W.2d 359 (1990) (express reference to a law by a
contract reflects the parties' clear intent to address it).7
¶15 Located in Wis. Stat. ch. 120 "Worker's Compensation,"
Wis. Stat. § 102.29, the statute by which the Estate was
obligated to reimburse the WC insurer, is a worker's
compensation law. Although the policy does not specifically
identify the worker's compensation law to which it refers, there
is no dispute that § 102.29 comes within that general provision
in the policy. See id. at 712 ("[W]e give full meaning to the
intent of the parties, as ascertained from the express language
of the contract.").
¶16 Accordingly, Secura may not alter its liability limit
based on the outcome of some, and not all, "sums" paid "because
of" a payment under worker's compensation law. It follows that
the "sums" by which Secura may reduce its liability because of
"worker's compensation law" account for the Estate's
reimbursement pursuant to the Wis. Stat. § 102.29 requirements.
Lastly, because the policy's plain language does not except
reimbursements made under ch. 102, we will not read in an
exception that is not there. To do so would rewrite the policy,
which we cannot do. Smith, 155 Wis. 2d at 811. Since the
See also Dairyland Greyhound Park, Inc. v. Doyle, 2006 WI
7
107, ¶60, 295 Wis. 2d 1, 719 N.W.2d 408 ("[T]he laws which
subsist at the time and place of the making of a
contract . . . enter into and form a part of it, as if they were
expressly referred to or incorporated in its terms. This
principle embraces alike those which affect its validity,
construction, discharge, and enforcement." (quoting Von Hoffman
v. City of Quincy, 71 U.S. 535, 550 (1866)).
9
No. 2020AP1078-FT
policy contemplates payments made in accordance with worker's
compensation law, including § 102.29, Secura may not ignore the
law's effects on the Estate's recovery. Accordingly, Secura may
not reduce its liability limit by the Disputed Amount.
¶17 Furthermore, even if we were to accept Secura's
argument that the word "paid" completely resolved the dispute,
we would have to reject its interpretation of the policy's terms
because it impermissibly interprets the reducing clause in a
manner that renders a portion of the contract meaningless. Md.
Arms Ltd. P'ship v. Connell, 2010 WI 64, ¶45, 326 Wis. 2d 300,
786 N.W.2d 15 ("[C]ontract language should be construed to give
meaning to every word, 'avoiding constructions which render
portions of a contract meaningless, inexplicable or mere
surplusage.'" (internal citations omitted)).
¶18 The policy directs, "We will pay under this coverage
only after the limits of liability under any bodily injury
liability bonds or policies have been exhausted by payment of
judgments or settlements." The policy amount that is "paid or
payable" under worker's compensation law is a timed payment as
the policy directs that Secura "will pay" UIM coverage "only
after" other sources of payment "have been exhausted." Because
we must give meaning to a policy's provisions by reviewing the
policy as a whole, we do not review the reducing clause in
isolation. Folkman, 264 Wis. 2d 617, ¶24. Stated otherwise,
the policy's plain language conditions Secura's UIM payment on
the final resolution of "amounts paid" by other sources;
10
No. 2020AP1078-FT
accordingly, we conclude that the policy addresses an insured's
recovery after required reimbursements have been made.8
C. Wisconsin Stat. §§ 632.32(5)(i) and 102.29
¶19 Secura argues its policy "substantially incorporates"
the language of Wis. Stat. § 632.32(5)(i), which it argues
"provides" that Secura need not pay the Disputed Amount to the
Estate. Accordingly, we turn next to interpret the statute to
determine whether it permits Secura to reduce its payment to the
Estate as Secura contends.9 Secura argues that the statute
8We note Wis. Stat. § 893.43(2) supports our interpretation
of the policy. There, the legislature has provided that "A
cause of action involving underinsured motorist
coverage . . . accrues on the date there is final resolution of
the underlying cause of action by the injured party against the
tortfeasor." This is important because final resolution of the
claim against the tortfeasor is what causes the injured party,
under Wis. Stat. § 102.29(2), to reimburse the WC insurer for a
portion of its initial payment to the injured workman.
9We have interpreted this statute previously, but never in
light of the novel issue now facing us: "[w]hether the
statutorily approved phrase 'all sums . . . [p]aid or payable
because of the bodily injury under [w]orker's compensation law'
in an underinsured motorist ('UIM') insurance policy's reducing
clause necessarily permits the reduction for all amounts paid,
including those amounts that the employer/worker's compensation
insurer initially paid, but then recovered through a third-party
action pursuant to Wis. Stat. § 102.29." Pet. Br. at 7. See
Teschendorf v. State Farm Ins. Cos., 2006 WI 89, 293 Wis. 2d
123, 717 N.W.2d 258 (interpreting Wis. Stat. § 632.32(5)(i) to
determine whether an insurance company may reduce its liability
by the amount of worker's compensation paid to the State Fund
rather than to an estate); Marotz v. Hallman, 2007 WI 89, ¶23,
302 Wis. 2d 428, 734 N.W.2d 411 (interpreting whether payments
to an insured from non-UIM tortfeasors are ones "that apply"
under § 632.32(5)(i)); Dowhower, 236 Wis. 2d 113, ¶2
(interpreting whether § 632.32(5)(i) violates substantive due
process). See also Landis v. Physicians Ins. Co. of Wis., Inc.,
2001 WI 86, ¶15, 245 Wis. 2d 1, 628 N.W.2d 893 ("Depending on
11
No. 2020AP1078-FT
allows an insurer to reduce its liability by "amounts paid" by
worker's compensation and the tortfeasor, and therefore it is
"not relevant" that the Estate had to repay a portion of the
worker's compensation recovery.
¶20 Wisconsin Stat. § 632.32(5)(i) states in relevant
part:
(i) A policy may provide that the limits under
the policy for . . . 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.
¶21 We first review the principles of statutory
interpretation, as set forth in Kalal. State ex rel. Kalal v.
Cir. Ct. for Dane Cnty., 2004 WI 58, 271 Wis. 2d 633, 681 N.W.2d
110. We "assume that the legislature's intent is expressed in
the statutory language." Id., ¶44. Accordingly, we begin with
the language of the statute, and "[i]f the meaning of the
statute is plain, we ordinarily stop the inquiry." Id., ¶45.
"A dictionary may be utilized to guide the common, ordinary
meaning of words." Noffke ex rel. Swenson v. Bakke, 2009 WI 10,
¶10, 315 Wis. 2d 350, 760 N.W.2d 156. We also strive to give
"reasonable effect to every word, in order to avoid surplusage."
the facts of a case, the same statute may be ambiguous in one
setting and unambiguous in another.").
12
No. 2020AP1078-FT
Kalal, 271 Wis. 2d 633, ¶46. We note that "[s]tatutory
interpretation centers on the 'ascertainment of meaning,' not
the recitation of words in isolation." Brey v. State Farm Mut.
Auto. Ins. Co., 2022 WI 7, ¶13, 400 Wis. 2d 417, 970 N.W.2d 1(quoting Kalal, 271 Wis. 2d 633, ¶47).
¶22 With these principles in mind, we conclude that the
plain language of the statute grants permission to an insurer to
reduce its liability limit when the final amount of an insured's
worker's compensation recovery has been determined. The parties
agree that Wis. Stat. § 632.32(5)(i) serves as legislative
permission to insurers to reduce their limit of liability by
enumerated means. Subdivisions (i)1. and (i)2. are at issue in
the instant case.
¶23 Both subdivisions contain the phrase "amounts paid,"
so we begin there. In this context, "paid" is a past participle
of pay that the legislature uses to modify "amounts." Secura
argues the word, "paid," simply communicates past action, but it
overlooks that past participles are "routinely used as
adjectives to describe the present state of a thing." Henson v.
Santander Consumer USA Inc., 582 U.S. 79, 84 (2017)
(interpreting the Fair Debt Collection Practices Act). For
example, the Supreme Court explained in its statutory
interpretation of "a debt owed" that an ordinary person would
understand "collect[ing] a debt owed to Steve," as "a debt
currently owed to Steve," rather than "a debt Steve used to own"
and now does not. Id. (emphases in original).
13
No. 2020AP1078-FT
¶24 Similarly, "amounts paid" uses the past participle of
"pay" as an adjective to describe a present state. An ordinary
person would understand "amount paid" to mean "amount currently
paid" rather than "amount once paid and then given back." See
id.¶25 To ensure our interpretation gives meaning to all
words in the statute, we next interpret the word, "payable,"
that appears only in Wis. Stat. § 632.32(5)(i)2. Kalal, 271
Wis. 2d 633, ¶46. "Payable" is defined as "requiring to be
paid, specifying payment to a particular payee at a specified
time or occasion, or in a specified manner." Webster's Third
New Int'l Dictionary 1659 (1986). The plain meaning of
"payable," therefore, is that payment is due, but the manner and
the timing of payment may involve future payments. For
instance, a settlement may be "payable in installments," or
"payable monthly." Regardless, it would still be an "amount
payable" under our interpretation of the statute.
¶26 Lastly, Wis. Stat. § 632.32(5)(i)2. allows for the
reduction of "[a]mounts paid or payable under any worker's
compensation law." As we stated earlier, Wis. Stat. § 102.29 is
a worker's compensation law that establishes reimbursement of
amounts initially received as worker's compensation due to
subsequent settlements. By including "worker's compensation
law" in § 632.32(5)(i)2., the legislature contemplated
proceedings such as those subject to § 102.29. See Union
Cemetery v. City of Milwaukee, 13 Wis. 2d 64, 68-69, 108 N.W.2d
180 (1961) ("A general reference refers generally to the law on
14
No. 2020AP1078-FT
a subject and incorporates the entire subject matter.").
Because § 102.29 obligated the Estate to reimburse the Disputed
Amount, the reimbursement was made pursuant to a worker's
compensation law. We interpret § 632.32(5)(i)2. to account for
the reimbursement into the "amount paid" to the Estate so that
the statute contemplates the Estate's final recovery.
¶27 Accordingly, we conclude, that "amounts paid" under
Wis. Stat. § 632.32(5)(i)1. and "amounts paid or payable" in
subd. 2., both reference the present tense. "Amounts paid" is
interpreted as the current "amounts paid" or outstanding such as
by an installment agreement,10 at the time an insurer seeks to
reduce its liability under § 632.32(5)(i). Stated otherwise,
"amounts paid" refers to an insured's final recovery at the time
an insurer reduces its liability, which we recognize may occur
when a UIM claim accrues.11 See Wis. Stat. § 893.43(2).
¶28 At the time Secura sought to reduce its liability, the
Estate had already reimbursed the Disputed Amount pursuant to a
worker's compensation law. The final "amounts paid" to the
Estate pursuant to Wis. Stat. § 632.32(5)(i) was $51,079.31 from
the combined tortfeasor and worker's compensation settlements.
10We provide just one example of a situation that gives
meaning to the term "payable." Our decision today does not
limit "payable" to just installment payments or other
circumstances that have not been briefed before us.
11Our conclusion is consistent with that reached in other
jurisdictions. See Wildman v. Nat'l Fire & Marine Ins. Co., 703
N.E.2d 683, 687 (Ind. App. 1998); Cherry v. Coregis Ins. Co.,
204 P.3d 522, 525-26 (Idaho 2009).
15
No. 2020AP1078-FT
Secura seeks to reduce its UIM liability to the Estate by both
the "amounts paid" and also by the Disputed Amount; in other
words, Secura seeks to reduce its liability by the amount the
Estate initially received before required reimbursements were
made. Section 632.32(5)(i) does not support this. Secura must
tender the Disputed Amount to the Estate in accordance with the
statute.
III. CONCLUSION
¶29 We interpret Secura's policy as precluding Secura from
reducing its liability to the Estate by the total amount of
payments the Estate initially received. The Estate first
received worker's compensation from Huck's employer's WC
insurer, and then a settlement from the tortfeasor's insurer.
Wisconsin Stat. § 102.29(1)(b)2. obligated the Estate to
reimburse the WC insurer with a portion of the settlement it
received from the tortfeasor. Secura's UIM policy contemplated
payments made in accordance with worker's compensation law in
its reducing clause, and obligated the Estate to reimburse the
WC insurer. The policy also required the Estate to exhaust any
other bodily injury liability bonds or policies and to receive
payment from them before Secura would pay UIM benefits. We
therefore conclude that the policy's plain language required its
payment of UIM benefits based on the Estate's recovery after
reimbursements to the WC insurer and collection of the
tortfeasor's liability payment had occurred.
¶30 However, Secura argues its policy "substantially
incorporates" the statutory language of Wis. Stat.
16
No. 2020AP1078-FT
§ 632.32(5)(i), which permits it to reduce payment by the amount
the Estate initially received. We conclude the plain language
of § 632.32(5)(i) establishes that an insurer may reduce its
liability by the recovery of the insured at the time the insurer
enforces its reducing clause. The Estate's obligatory
reimbursement was made pursuant to a "worker's compensation
law," which § 632.32(5)(i)2. recognizes. For these reasons, we
conclude that Secura is not statutorily authorized to reduce its
liability limits by the gross worker's compensation and
tortfeasor settlement payments the Estate initially received but
was obligated to reimburse in part. Accordingly, Secura's
policy and § 632.32(5)(i) require Secura to provide an
additional $9,718.73 to the Estate.
By the Court.—The decision of the court of appeals is
affirmed.
17
No. 2020AP1078-FT.rfd
¶31 REBECCA FRANK DALLET, J. (concurring). If I buy an
$8 sandwich, hand the cashier a $10 bill, and she hands me my
sandwich and $2 in change, how much was she "paid" for the
sandwich? Eight dollars, of course. But according to Secura,
that isn't so clear. It contends that the Estate of Daniel Huck
was "paid" $250,000 in connection with the accident that caused
Huck's death, even though the Estate ended up with just
$240,281.27 after it was required by statute to pay the
$9,718.73 difference back to a workers' compensation insurer.
See generally Wis. Stat. § 102.29(1). By that same logic, the
cashier in my sandwich example was paid $10, even though she
kept only $8. I agree with the majority/lead opinion that this
nonsensical result is contrary to the plain meaning of the word
"paid" and, therefore, the policy's language. I write
separately, however, because I reach that conclusion for
different——and in my view, simpler——reasons.
¶32 The language of Secura's policy is clear. It
guaranteed the Estate a "predetermined, fixed level of
[underinsured motorist coverage]," $250,000, "that is arrived at
by combining payments from all sources." Welin v. Am. Fam. Mut.
Ins. Co., 2006 WI 81, ¶49, 292 Wis. 2d 73, 717 N.W.2d 690. The
initial grant of coverage states that Secura will pay damages
the Estate "is legally entitled to recover from the owner or
operator of an underinsured motor vehicle because of bodily
injury." The emphasized terms are defined in the policy, and
one of them——"underinsured motor vehicle"——is relevant here. An
underinsured motor vehicle is one "to which a bodily
1
No. 2020AP1078-FT.rfd
injury . . . policy applies at the time of the accident but its
limit for bodily injury liability is . . . [l]ess than the limit
of liability for this [underinsured motor vehicle] coverage."
The limit of liability for Secura's coverage is $250,000, which
Secura "will pay . . . only after the limits of liability under
any bodily injury liability . . . policies have been exhausted
by payments of judgments or settlements." In other words,
Secura promised to pay last, after the Estate recovered any
money it was owed for the accident by the tortfeasor or others,
and only if the limits of the tortfeasor's insurance coverage
were less than $250,000. And all Secura promised to pay was the
difference between the money the Estate recovered from those
other sources and $250,000. That is spelled out clearly in the
policy's reducing clause, which decreases Secura's limit of
liability by "all sums" paid by those legally responsible for
the accident or "[p]aid or payable because of the bodily injury
under . . . [w]orkers' compensation law."
¶33 The upshot of these provisions is simple. Every
dollar the Estate is paid either by those legally responsible
for the accident or by workers' compensation reduces Secura's
$250,000 limit of liability by that same amount. If the Estate
is paid $250,000 or more by those legally responsible or by
workers' compensation, then Secura owes nothing. If not, Secura
makes up the difference up to $250,000. In any case, the Estate
is guaranteed to end up with at least the predetermined, fixed
amount of coverage it bargained for, $250,000. See Welin, 282
2
No. 2020AP1078-FT.rfd
Wis. 2d 73, ¶49. Or at least that's what the policy says should
happen.
¶34 Secura argues, however, based on a hyper-literal
interpretation of the word "paid," that the Estate should
receive just $240,281.27. That is because the Estate initially
received $35,798.04 in workers' compensation payments, even
though it later had to pay $9,718.73 back to the workers'
compensation insurer according to a statutory formula. See Wis.
Stat. § 102.29(1), (giving the workers' compensation insurer a
right to a portion of the proceeds the Estate recovered from the
tortfeasor). In Secura's view, the Estate was therefore "paid"
the full $35,798.04, even though it netted only $26,079.31 in
the end.
¶35 The problem with Secura's interpretation is that when
the policy is read as a whole, the Estate is only "paid" the
money it retains after resolving both its claims against the
tortfeasor and any resulting obligations to the workers'
compensation insurer. See Liebovich v. Minn. Ins. Co., 2008 WI
75, ¶27, 310 Wis. 2d 751, 751 N.W.2d 764 (explaining that we
must read insurance policies "as a whole"). Simply put, it is
not enough if, at one point in time or another, the Estate had
$250,000. Rather, the policy requires that the Estate end up
with the predetermined, fixed, final recovery of at least
$250,000 it bargained for. And because Secura's argument would
leave the Estate with less than that amount, it must be
rejected.
3
No. 2020AP1078-FT.rfd
¶36 This conclusion is confirmed both by the policy's
language regarding workers' compensation recoveries and by a
statute governing underinsured motorist claims. First, the
policy's reducing clause lowers Secura's limits of liability by
"all sums . . . [p]aid or payable . . . under . . . [w]orkers'
compensation law." And as mentioned previously, § 102.29(1)——a
provision of workers' compensation law——mandates that the
workers' compensation insurer receive a portion of the money the
Estate recovered from the tortfeasor. Thus, the amount "[p]aid
or payable" under workers' compensation must be determined by
taking into account money the Estate had to pay back to the
workers' compensation insurer under § 102.29(1). Only after
that repayment is made can we know "all sums" the Estate was
"[p]aid." See also majority/lead op., ¶16 (reaching a similar
conclusion). Second, Wis. Stat. § 893.43(2) states that an
underinsured motorist claim accrues for statute-of-limitations
purposes only after the "final resolution of the underlying
cause of action by the injured party against the tortfeasor."
The final resolution of the underlying cause of action against
the tortfeasor is also what triggers the injured party's
obligation under § 102.29(1) to repay a portion of that final
recovery against the tortfeasor to the workers' compensation
insurer. For that reason, it makes no sense to calculate the
amounts "paid" to the Estate under Secura's policy before that
point in time, as Secura does. We only know what the Estate was
"paid," and therefore what Secura owes, once the Estate has
resolved its claim against the tortfeasor and made any necessary
4
No. 2020AP1078-FT.rfd
reimbursement to the workers' compensation insurer under
§ 102.29(1).
¶37 In my view, that's all we need to say to resolve this
case. Despite that, the majority/lead opinion goes further,
unnecessarily analyzing a provision of the policy that the
parties did not meaningfully discuss in their briefs, see
majority/lead op., ¶¶17-18, and the omnibus statute, Wis. Stat.
§ 632.32(5)(i), which regulates reducing clauses. See id.,
¶¶19-28. Even though I agree with the majority/lead opinion's
bottom line, I would not reach these issues. Accordingly, I
respectfully concur.1
¶38 I am authorized to state that Justices ANN WALSH
BRADLEY, BRIAN HAGEDORN, and JILL J. KAROFSKY join this opinion.
1 I join ¶¶1-2, 4-16, and 29 of the majority/lead opinion.
5
No. 2020AP1078-FT.rgb
¶39 REBECCA GRASSL BRADLEY, J. (dissenting).
I remember once I was with [Justice Oliver Wendell
Holmes, Jr.]; it was Saturday when the Court was to
confer. It was before we had a motor car, and we
jogged along in an old coupé. When we got down to the
Capitol, I wanted to provoke a response, so as he
walked off, I said to him: "Well, sir, goodbye. Do
justice!" He turned quite sharply and he said: "Come
here. Come here." I answered: "Oh, I know, I know."
He replied: "That is not my job. My job is to play
the game according to the rules."
Learned Hand, A Personal Confession, in The Spirit of Liberty
302, 306–07 (Irving Dillard ed., 3d ed. 1960).
¶40 This court should resolve this case by considering the
parties' arguments and neutrally applying well-established rules
for interpretating insurance policies. Instead, the majority
rejects the parties' contractual agreement in favor of doing
justice in a case involving tragic facts. While the results
achieved by the majority's decision may be more palatable, the
resulting injury to the rule of law is anything but just.
¶41 Daniel Keith Huck died from a bodily injury he
sustained while working for the Village of Mt. Pleasant. The
Estate of Huck received about $36,000 in worker's compensation
benefits. Later, the Estate became statutorily required to
reimburse a portion of this payout. Huck had an insurance
policy with underinsured motorist (UIM) coverage through Secura
Supreme Insurance Company. The Estate filed a claim. Secura
and the Estate dispute the amount owed under the policy. Secura
relies on the policy's reducing clause, which provides that the
policy's limits "shall be reduced by all sums . . .
[p]aid . . . because of the bodily injury under . . . [w]orkers'
1
No. 2020AP1078-FT.rgb
compensation law[.]" Secura argues the Estate was "paid"
$36,000 because Mt. Pleasant's $36,000 financial obligation to
the Estate was discharged when the Estate was provided with the
money. The Estate does not respond by referencing definitions
of "paid" or relying on grammatical principles. Instead, the
Estate primarily argues that siding with Secura would produce an
"absurd result." That argument is grounded not in law but in
subjective perceptions of justice.
¶42 The majority/lead opinion sides with the Estate, but
conspicuously absent from the opinion is any discussion of the
Estate's principal argument.1 Instead, the opinion attempts to
develop a textual analysis that was——at best——underdeveloped by
the Estate. This court need not address an underdeveloped
argument, and it should not do so in this case. See, e.g., Papa
v. Wis. Dep't of Health Servs., 2020 WI 66, ¶42 n.15, 393
Wis. 2d 1, 946 N.W.2d 17 (declining to address an underdeveloped
argument). Although suffering from its own analytical flaws,
Justice Rebecca Frank Dallet's concurrence correctly notes the
majority/lead opinion goes too far by "analyzing a provision of
the policy that the parties did not meaningfully discuss in
their briefs[.]" Concurrence, ¶37. While this court has near-
absolute discretion to deviate from the parties' arguments and
often does given its law-development function, the majority/lead
This court's internal operating procedures explain, "[i]f
1
. . . the opinion originally circulated as the majority opinion
does not garner the vote of a majority of the court, it shall be
referred to in separate writings as the 'lead opinion[.]'" Wis.
Sup. Ct. IOP III.G.4 (Feb. 28, 2023).
2
No. 2020AP1078-FT.rgb
opinion does not exercise discretion because it does not explain
its departure from the party presentation principle. See Town
of Wilson v. City of Sheboygan, 2020 WI 16, ¶73, 390
Wis. 2d 266, 938 N.W.2d 493 (Rebecca Grassl Bradley, J.,
concurring). The majority/lead opinion does not even
acknowledge——let alone explain——why it leaves the Estate's
primary argument unaddressed.
¶43 In this case, a persuasive explanation would be
difficult to provide. This court granted the petition for
review to address the Estate's primary argument, which the court
of appeals, in a published opinion, held it was compelled by
this court's precedent to adopt. See Secura Supreme Ins. v.
Estate of Huck, 2021 WI App 69, ¶7, 399 Wis. 2d 542, 966
N.W.2d 124. Specifically, the court of appeals held it was
bound by Teschendorf v. State Farm Insurance Cos., 2006 WI 89,
293 Wis. 2d 123, 717 N.W.2d 258, in which this court disregarded
the plain meaning of the law in favor of what the court deemed a
more just result. While a majority of the court could not
coalesce on a rationale, six justices agreed that a "literal"
reading of the law favored the insurer and accordingly deemed it
either absurd or ambiguous in order to decide the case in favor
of a sympathetic plaintiff. Id., ¶¶18, 22, 32 (majority/lead
op.). Notably, in this case court of appeals judge Shelley A.
Grogan wrote a concurrence signaling concern that Teschendorf
required the court of appeals to disregard the plain language of
the insurance policy and Wis. Stat. § 632.32(5)(i)2. (2019–20).2
2 Unless otherwise noted, all subsequent references to the
Wisconsin Statutes are to the 2019–20 version.
3
No. 2020AP1078-FT.rgb
See Secura Supreme Ins., 399 Wis. 2d 542, ¶21 (Grogan, J.,
concurring). As the majority/lead opinion notes, this court
granted review of the court of appeals decision, but the
majority leaves that decision largely unreviewed in its
opinions. Majority/lead op., ¶¶1, 9.
¶44 Justice Dallet's concurrence, with its references to
allegedly "nonsensical" results, aligns more closely with the
Estate's actual argument, but her concurrence is problematic for
a different reason. See Concurrence, ¶¶31, 36. Justice Dallet
endorses a case-deciding approach grounded in subjective
perceptions of justice at the expense of the rule of law.
¶45 Applying the law to the parties' arguments, I conclude
the policy's limits should be reduced by the total amount of
worker's compensation paid, not by the amount ultimately netted
by the Estate. I further conclude Wis. Stat. § 632.32(5)(i)2.,
which also uses the word "paid," permits such a reduction. I
respectfully dissent.
I. BACKGROUND
A. The Tragic Facts
¶46 The parties have stipulated to the tragic facts of
this case. Huck was struck by a negligently driven motor
vehicle while employed as a utility worker for Mt. Pleasant.
Huck died as a result. The Estate received about $36,000 in
worker's compensation benefits. After that, the Estate settled
with the negligent driver's insurance company for the policy
limits of $25,000. Additionally, Wis. Stat. § 102.49(5)
required Mt. Pleasant to pay $20,000 to the state treasury for
4
No. 2020AP1078-FT.rgb
the benefit of the Work Injury Supplemental Benefits Fund.
Under § 102.29, the Estate was obligated to reimburse about
$10,000 of the worker's compensation benefits to the worker's
compensation carrier using the settlement proceeds.
Accordingly, the Estate received $36,000 in worker's
compensation benefits, but the Estate netted only about $26,000.
Huck's insurance policy with Secura provided UIM coverage with
limits of $250,000; the damages exceed those limits. The Estate
made a claim under the policy.
B. The Reducing Clause
¶47 The parties calculate the amount Secura owes
differently, based on different readings of the reducing clause,
which provides:
B. Reducing Clause: The limit of liability shall be
reduced by all sums:
1. Paid because of bodily injury by or on behalf
of persons or organizations who may be legally
responsible. . . .
2. Paid or payable because of the bodily injury
under any of the following or similar laws:
a. Workers' compensation law[.]
The parties dispute only the amount of reduction for worker's
compensation benefits. Secura argues for a $36,000 reduction——
the amount the Estate received under worker's compensation law——
while the Estate argues the reduction should be only $26,000
because the Estate had to reimburse the worker's compensation
carrier approximately $10,000. The parties agree the $25,000
5
No. 2020AP1078-FT.rgb
settlement reduces the limits.3 They also agree the $20,000
payment by Mt. Pleasant to the Fund does not trigger the
reducing clause. Accordingly, the parties calculate the amount
owed under the policy as follows:
Secura The Estate
$250,000 (the limit of $250,000 (the limit of
liability) liability)
−$36,000 (the amount of −$26,000 (the amount of
worker's compensation received) worker's compensation netted)
−$25,000 (from the settlement) −$25,000 (from the settlement)
= $189,000 = $199,000
¶48 Notably, the language of the reducing clause is
materially similar to the language of Wis. Stat. § 632.32, also
known as the "Omnibus Statute" because, as this court has
explained, "it sets the minimum requirements all motor vehicle
insurance policies in Wisconsin must satisfy." Brey v. State
Farm Mut. Auto. Ins., 2022 WI 7, ¶5, 400 Wis. 2d 417, 970
N.W.2d 1. Subsection (5)(i)2. provides:
(i) A policy may provide that the limits under the
policy for uninsured motorist coverage or
underinsured motorist coverage for bodily injury or
death resulting from any one accident shall be
reduced by any of the following that apply:
. . . .
The Estate notes the parties agree that "[t]he UIM
3
reducing clause permitted reduction of the $250,000 UIM limits
by the $25,000 recovered from the tortfeasor and the $26,079.31
net benefits paid by the worker's compensation carrier." The
parties "part[] ways" over the $10,000 of worker's compensation
benefits that was "repaid[.]"
6
No. 2020AP1078-FT.rgb
2. Amounts paid or payable under any worker's
compensation law.
The operative effect of the reducing clause must be permissible
under § 632.32(5)(i)2.
C. The Procedural History
¶49 This case's procedural history demonstrates the
parties focused on the applicability of Teschendorf. Secura
sought from the circuit court a declaration stating it owed only
$189,000, and the Estate counterclaimed. The circuit court
sided with the Estate.
¶50 Secura appealed, and the Estate's argument in response
focused mainly on this court's decision in Teschendorf. It
framed the sole issue on appeal as follows:
In Teschendorf v. State Farm Ins. Companies, 2006 WI
89, 293 Wis. 2d 123, 717 N.W.2d 258, a statutorily-
permitted reducing clause was declared impermissible
when used to reduce underinsured motorists . . .
limits by sums paid not to the insured, but to a state
fund . . . . Does a reducing clause permitted by Wis.
Stat. § 632.32(5)(i), reducing UIM limits by "all sums
. . . [p]aid or payable because of the bodily injury
under . . . [w]orker's compensation law," become
impermissible where the worker's compensation insurer
has been reimbursed pursuant to Wis. Stat. § 102.29,
precluding double recovery by the insured?[4]
Answered by the Circuit Court: Yes.
(Third and fourth ellipsis and modifications in the original.)
¶51 The court of appeals affirmed the circuit court's
decision in a published opinion. Secura Supreme Ins., 399
Wis. 2d 542 (majority op.). The court of appeals accepted the
4 Although this issue statement claims Teschendorf was about
UIM coverage, the case was actually about uninsured motorist
coverage. See infra Section III.B.
7
No. 2020AP1078-FT.rgb
Estate's framing, concluding, "[t]he court in Teschendorf
squarely rejected the literal reading of the reducing clause
Secura proposes here." Id., ¶10 (citing Teschendorf, 293
Wis. 2d 542, ¶¶22, 24, 44). The majority opinion of the court
of appeals cites Teschendorf more than 30 times, demonstrating
its centrality in the reasoning of the court below. In
concurrence, Judge Grogan wrote, "[o]n a clean slate, Secura's
textual argument may not have been so swiftly dismissed, but our
supreme court foreclosed it in Teschendorf." Id., ¶21 (Grogan,
J., concurring).
¶52 Secura filed a petition for review. It explicitly
argued "Teschendorf is ripe for reexamination to——at least——
clarify the proper analysis [to] the lower courts[.]" In
response, the Estate professed this case does not present a
novel question of law given Teschendorf. The Estate framed the
issue in much the same way that it had framed the issue before
the court of appeals:
Words in statutes and insurance policies are given a
meaning which avoids absurd or unreasonable results,
or results clearly at odds with the legislature's
purpose. . . . Can an insurer reduce its [UIM]
coverage limits by sums neither its insured nor his
workers compensation insurer recovered because its
policy contains a reducing clause deducting "all
sums . . . [p]aid or payable because of the bodily
injury under . . . [w]orker's compensation law"?
(Second and third ellipsis and second and third modifications in
the original.) The Estate argued Teschendorf should not be
reexamined because the absurd results canon has been "repeatedly
applied" in various contexts——not just in Teschendorf. It
claimed this case would be a mere "rehash[ing]" of the "same
8
No. 2020AP1078-FT.rgb
principles" applied in Teschendorf and several other cases.
This court granted Secura's petition.
D. The Parties' Briefing
¶53 The focus on Teschendorf continued in the briefing.
Secura argues the case does not need to be overruled but should
be limited to its extreme facts (discussed more in Part III).
The Estate argues the court of appeals was correct to "center"
its analysis on Teschendorf, declaring the analysis "spot on."
Similarly, the Estate claims this case does not raise an issue
of "first impression" because, in its view, "the issue raised is
very similar to that addressed in Teschendorf[.]" The Estate
continues, "Teschendorf . . . require[s] that the appellate
court's decision be affirmed." The Estate opens its brief by
noting, "Wisconsin courts reject interpretations of statutes
that produce results contrary to the statute's purpose and
common sense." (Citation omitted.) The Estate also makes
passing reference to the principle that statutes should be
construed in harmony, grounding this argument in
consequentialism. The Estate argues, "[a]s the court of appeals
correctly explained, Secura's argument——that the workers
compensation was 'paid' to the insured but ignoring that that
sum had been reimbursed to the workers compensation insurer——
'defies common sense and the fundamental purpose of [UIM]
insurance coverage[.]'" Quoting Secura Supreme Ins., 399
Wis. 2d 542, ¶17 (majority op.). Claiming a purported ambiguity
in the policy, the Estate argues this court must affirm the
decision of the court of appeals because "[t]o hold otherwise
9
No. 2020AP1078-FT.rgb
would create an absurd result[.]" Regardless of how the Estate
frames its arguments, every contention advanced by the Estate
rests on the absurd results canon.
¶54 In contrast, Secura offers a fully-developed plain
language argument in response to the Estate's emphasis on the
purported absurdity of the results Secura's plain language
interpretation may yield. Secura references dictionary
definitions to support its interpretation of "paid," some of
which have been adopted by Wisconsin courts in other contexts.
See, e.g., Danbeck v. Am. Fam. Mut. Ins., 2000 WI App 26, ¶9,
232 Wis. 2d 417, 605 N.W.2d 925 (noting "payment" is defined as
"1: the act of paying or giving compensation : the discharge of
a debt or an obligation . . . 2: something that is paid :
something given to discharge a debt or obligation or to fulfill
a promise" (quoting Payment, Webster's Third New International
Dictionary (1993)) (ellipsis in the original)).
¶55 In contrast, the Estate references dictionary
definitions once——for the word "reimburse"——which appears
nowhere in the relevant language of the policy or the Omnibus
Statute.5 Apparently, the Estate means to suggest that money
reimbursed has not been "paid," but even the language the Estate
uses to describe the facts of this case presupposes the Estate
was, in fact, paid. For example, the Estate writes, "[t]he
parties parted ways . . . as to Secura's denial of the
[E]state's claim to the extent of the . . . [disputed amount]
5The brief also contains a reference to Black's Law
Dictionary, within a block quote of another source, but the
definition is for the word "insurance."
10
No. 2020AP1078-FT.rgb
repaid to the workers compensation carrier." (Emphasis added.)
An amount can be "repaid" only if it in fact has been "paid."
¶56 In attempting to illustrate the meaning of this
utterly plain word, Justice Dallet's sandwich shop analogy
suffers from a basic mathematical error. She begins her
concurrence with the following scenario: "If I buy an $8
sandwich, hand the cashier a $10 bill, and she hands me my
sandwich and $2 in change, how much was she 'paid' for the
sandwich? Eight dollars, of course. But according to Secura,
this isn't so clear." Concurrence, ¶31. This simple analogy
fails because Justice Dallet did not incur a $10 financial
obligation——only an $8 one. The moment she handed $10 to the
cashier, she satisfied her obligation to pay for the sandwich,
but the cashier immediately incurred an obligation to give back
$2. In this case, the worker's compensation carrier incurred a
$36,000 financial obligation, which was satisfied when that
amount was paid to the Estate. Had the carrier incurred a mere
$26,000 obligation but inadvertently sent the Estate a check for
$36,000, perhaps Justice Dallet's analogy would be relevant. In
this case, however, the carrier used exact change. Even though
the law later compelled a reimbursement, had the carrier paid
only $26,000 initially, it would not have fulfilled its
obligation. Perhaps textual arguments may exist for a
definition of "paid" favoring the Estate, but Justice Dallet
offers none.
11
No. 2020AP1078-FT.rgb
II. STANDARD OF REVIEW
¶57 This case requires this court to interpret an
insurance policy. The interpretation of a policy is a question
of law, subject to independent review. Talley v. Mustafa
Mustafa, 2018 WI 47, ¶13, 381 Wis. 2d 393, 911 N.W.2d 55 (citing
Water Well Sols. Serv. Grp., Inc. v. Consol. Ins., 2016 WI 54,
¶12, 369 Wis. 2d 607, 881 N.W.2d 285).
¶58 Contrary to the majority, the policy language compels
a reduction by the total amount of worker's compensation paid to
the Estate. Accordingly, I must determine whether Wis. Stat.
§ 632.32(5)(i)2. permits such a reduction. Statutory
interpretation, like policy interpretation, presents a question
of law subject to this court's independent review. Water Well
Sols. Serv. Grp., Inc., 369 Wis. 2d 607, ¶12 (citing Estate of
Sustache v. Am. Family Mut. Ins., 2008 WI 87, ¶18, 311
Wis. 2d 548, 751 N.W.2d 845).
III. ANALYSIS
A. The Consequence of the Majority/Lead Opinion not Reviewing
the Court of Appeals Decision
¶59 The majority/lead opinion correctly notes this court
granted review of a court of appeals decision; however, it does
not review it. In a published opinion, the court of appeals
decided it was bound by Teschendorf. By affirming the court of
appeals without reviewing its decision, the majority preserves
the court of appeals opinion as binding precedent. Although the
majority affirms the decision on a different basis, it does not
expressly——or even impliedly——signal that the opinion below does
not retain its precedential value. Consequently, the court of
12
No. 2020AP1078-FT.rgb
appeals will understand itself to be bound by that opinion. See
State v. Schmidt, 2016 WI App 45, ¶48 n.11, 370 Wis. 2d 139, 884
N.W.2d 510 (citing Blum v. 1st Auto & Cas. Ins., 2010 WI 78,
¶44, 326 Wis. 2d 729, 786 N.W.2d 78). See generally Wis. Mfrs.
& Com. v. Evers, 2023 WI 5, ¶2, 405 Wis. 2d 478, 984 N.W.2d 402(per curiam) (noting that while this court has not addressed the
issue directly, when this court affirms a published opinion of
the court of appeals, on different grounds but without
suggesting its rationale was incorrect, the court of appeals
opinion remains binding precedent). At a minimum, the majority
should withdraw the precedential status of the opinion below.
B. This Court's Decision in Teschendorf
¶60 If the majority had reviewed the decision of the court
of appeals, it would need to revisit Teschendorf, on which the
Estate's argument continues to heavily rely. Although no less
tragic, the facts of Teschendorf are quite different than the
facts of this case. A man died while acting in the scope of his
employment after an uninsured motor vehicle struck a car in
which the man was riding. 293 Wis. 2d 123, ¶3 (majority op.).
In accordance with Wis. Stat. § 102.49(5)(b) (2001–02), a
portion of worker's compensation benefits were paid to the Fund,
but none were paid to the man's estate because he was single and
had no dependents. Id. Of the approximately $174,000 paid in
worker's compensation benefits, $159,000 went to the Fund, and
the rest went to recipients other than the man's estate. Id.The man had a policy providing uninsured motorist coverage, with
limits of $150,000. Id., ¶4. The insurer argued the reducing
13
No. 2020AP1078-FT.rgb
clause operated to change the limits to $0 because more than
$150,000 had been paid in worker's compensation benefits. Id.,
¶5.
¶61 The issue in Teschendorf was whether Wis. Stat.
§ 632.32(5)(i)2. (2001–02) prohibited reducing the limits by the
$159,000 paid to the Fund. Although this court resolved the
issue, it was divided on the rationale. Public policy pervaded
each member's reasoning.
¶62 This court held Wis. Stat. § 632.32(5)(i)2. prohibited
the reduction; however, it was split into two factions. The
first faction, which has been subsequently called the "absurdity
faction," consisted of three justices who concluded the
statutory language unambiguously did not prohibit the reduction
but determined the result of applying the unambiguous language
would be absurd. Id., ¶18 & n.8. They first recognized the
plain meaning of the reducing clause:
There is no ambiguity in Wis. Stat. § 632.32(5)(i)2.
The statute says that policy limits may be reduced by
"amounts paid or payable under any worker's
compensation law." The clause "amounts paid or
payable" is not qualified and unambiguously brings
within its scope payments made to the insured or to
any other person or entity, provided that the payment
was made under any worker's compensation law.
Id., ¶30 (lead op.); see also id., ¶18 n.8 (majority op.)
(explaining the absurdity faction "believe[d] that the meaning
of the statute is plain, but the results produced by the plain
meaning are absurd"). These justices declined to apply the
plain meaning, however, because in their view "the results that
follow are so unreasonable . . . that they require the plain
14
No. 2020AP1078-FT.rgb
meaning to be rejected." Id., ¶18 (majority op.). Accordingly,
these justices "construe[d] the statute to avoid that result."
Id., ¶32 (lead op.) (citing State v. Delaney, 2003 WI 9, ¶15,
259 Wis. 2d 77, 658 N.W.2d 416). Defying a fundamental canon of
construction, they opted to read the words "to the insured" into
the statute after the words "amounts paid or payable[.]" Id.,
¶31. These justices expressly acknowledged the qualifier "to
the insured" "is not present in the text of the statute" and its
plain meaning "allows policy limits to be reduced regardless of
to whom worker's compensation benefits are made." Id.
Nevertheless, to protect "injured persons," they opted to
rewrite the statute, openly discarding what they (correctly)
understood to be the plain meaning of the words chosen by the
legislature. Id., ¶38.
¶63 The second group, known as the "ambiguity faction,"
consisted of three justices who agreed the statute was ambiguous
and who resolved the ambiguity in favor of the insured. Id.,
¶18 (majority op.). Like the absurdity faction, they conceded
the plain meaning of the statute:
The literal reading of Wis. Stat. § 632.32(5)(i)2.
favored by [the insurer] permits the conclusion that
an insurer may reduce uninsured motorist limits by the
amount of worker's compensation payments made to
anyone. Subsection (5)(i)2. contains no qualifying
language specifying to whom the payments must be made;
payments could be made to the insured, to the Fund, or
to anyone.
Id., ¶22 (lead op.). This faction noted the insurer's "literal
interpretation" could reduce the limits to $0. Id., ¶28.
Finding that result unpalatable, these justices read into the
15
No. 2020AP1078-FT.rgb
statute "an implicit condition that the insurer may reduce
uninsured motorist benefits only by the amount of worker's
compensation payments made to or on behalf of the insured."
Id., ¶23. This implicit condition was supported, the three
claimed, by § 632.32(4) (2001–02), which required that every
motor vehicle insurance policy include uninsured motorist
coverage. Id., ¶24. Under the ambiguity faction's extra-
textual reasoning, "[t]he consistent leading purpose of this
statutory scheme is to require that insurers provide uninsured
motorist coverage for the protection of their insureds," while
"the subordinate purpose is to minimize the insurers' exposure
by allowing insurers to limit the protection offered by
uninsured motorist coverage to a fixed, predetermined amount
that takes into account payments from specified sources[.]"
Id., ¶27. According to the ambiguity faction, the purported
"leading purpose" would be defeated if not for the read-in
implicit condition.
¶64 The two factions achieved their desired result——
defeating the contractual reduction——after joining together in a
lengthy discussion of legislative history and public policy,
rather than text. Id., ¶¶44–62 (majority op.). Then-Chief
Justice Shirley S. Abrahamson concurred with the mandate but
joined neither the absurdity faction nor the ambiguity faction.
Id., ¶66 (Abrahamson, C.J., concurring).
C. Evaluating the Parties' Arguments: Teschendorf's Limited
Reach
¶65 In this case, the parties' arguments primarily address
the reach of Teschendorf and, more generally, the absurd results
16
No. 2020AP1078-FT.rgb
canon. Secura does not ask this court to overturn Teschendorf.
In fact, it concedes the reducing clause may not be read to
cause a subtraction from the limits for the $20,000 paid to the
Fund——because of Teschendorf. Instead, Secura simply argues
that Teschendorf does not apply to the $10,000 in worker's
compensation benefits, which were paid to the Estate and later
repaid. Secura asserts the court of appeals erred in extending
Teschendorf too far. In contrast, the Estate argues Teschendorf
should be the focal point of this court's analysis and prohibits
the reduction at issue.
¶66 As a preliminary matter, Secura argues Teschendorf is
largely "non-binding" because no majority agreed on a rationale,
citing State v. Elam, 195 Wis. 2d 683, 685, 538 N.W.2d 249(1995) (per curiam). In Elam, this court explained that "[a]
general principle of appellate practice is that a majority of
the participating judges must have agreed on a particular point
for it to be considered the opinion of the court." Id. (citing
State v. Dowe, 120 Wis. 2d 192, 194–95, 352 N.W.2d 660 (1984)
(per curiam)). Critically, no majority in Teschendorf held the
particular result absurd, and no majority held the statute
ambiguous——a majority formed almost exclusively on a discussion
of legislative history and public policy. As this court has
explained, a dearth of overlap between rationales on which a
mandate was based is "troublesome." Koschkee v. Taylor, 2019 WI
76, ¶8 n.5, 387 Wis. 2d 552, 929 N.W.2d 600. Teschendorf's
application to this case is a prime example: In applying
Teschendorf, how much weight should this court place on its
17
No. 2020AP1078-FT.rgb
specific facts and the purported absurdity of the insurer's
proffered interpretation? The lack of a majority rationale in
Teschendorf provides sufficient justification to limit the
decision's application to its extreme facts because determining
how Teschendorf applies to even a slightly different fact-
pattern is difficult. See Bryan A. Garner et al., The Law of
Judicial Precedent 198–99 (2016). See generally Johnson v. Wis.
Elections Comm'n, 2022 WI 14, ¶243, 400 Wis. 2d 626, 971
N.W.2d 402 (Rebecca Grassl Bradley, J., dissenting), summarily
rev'd sub. nom. Wis. Legislature v. Wis. Elections Comm'n, 595
U.S. __, 142 S. Ct. 1245 (per curiam) (explaining this court
does not follow the so-called "Marks rule," pursuant to which a
legal rule may be precedential even if its rationale was not
adopted by a majority).
¶67 Although noting this divide, Secura restricts its
argument to attacking the rationale advanced by the ambiguity
faction in Teschendorf, because the absurdity faction's analysis
would not extend to the significantly less extreme facts of this
case. In contrast to Teschendorf, the Estate in fact receives
insurance proceeds approaching the policy limit, and the
variance between the parties' positions approximates $10,000.
Secura asserts "the only way the [a]mbiguity [f]action could
find an alternative to the 'literal' meaning [wa]s by adding a
qualification into the statute . . . that is simply not there."
(Citation omitted.) Judges may not, however, either add words
to or subtract words from the text of the law. See State v.
Hinkle, 2019 WI 96, ¶24, 389 Wis. 2d 1, 935 N.W.2d 271 ("It is a
18
No. 2020AP1078-FT.rgb
cardinal 'maxim[] of statutory construction . . . that courts
should not add words to a statute to give it a certain
meaning.'" (quoting State v. Fitzgerald, 2019 WI 69, ¶30, 387
Wis. 2d 384, 929 N.W.2d 129) (modification in the original)).
As Judge Grogan explained in her concurrence, the text of the
law does not state "the 'payment' must be made to the insured"
even though this court in Teschendorf so held. Secura Supreme
Ins., 399 Wis. 2d 542, ¶21 (Grogan, J., concurring) (quoting
Teschendorf v. State Farm Ins., 2005 WI App 10, ¶¶19-20, 278
Wis. 2d 354, 691 N.W.2d 882 (2004) (Fine, J., dissenting),
aff'd, 293 Wis. 2d 123). Nor, as Judge Grogan also noted, does
the text "address what happens after a worker's compensation
payment is made but is subsequently partially paid back, which
is the factual scenario presented in this case." Id. Secura is
correct to argue the ambiguity faction's rationale should be
rejected; it is antithetical to fundamental rules of textual
interpretation.
¶68 In effect, the ambiguity faction searched for
ambiguity, which this court has repeatedly rejected as
inappropriate. See, e.g., Lamar Cent. Outdoor, LLC v. Div. of
Hearings & Appeals, 2019 WI 109, ¶18, 389 Wis. 2d 486, 936
N.W.2d 573 ("We do not, however, look for ambiguity because
'[s]tatutory interpretation involves the ascertainment of
meaning, not a search for ambiguity.'" (quoting State ex rel.
Kalal v. Cir. Ct. for Dane Cnty., 2004 WI 58, ¶47, 271
Wis. 2d 633, 681 N.W.2d 110) (modification in the original)). A
good lawyer can render a sentence as straightforward as "the sky
19
No. 2020AP1078-FT.rgb
is blue" ambiguous if he stares at it long enough; perhaps the
sky is just sad. Merely because the argument can be made that
the sky is sad does not mean a reasonable person would actually
ascribe that meaning to the sentence "the sky is blue."
Ambiguity must be facially present in a statute, and it
certainly does not come into existence merely because three
justices are troubled by a result dictated by plain meaning.
See Antonin Scalia & Bryan A. Garner, Reading Law: The
Interpretation of Legal Texts 174 (2012) ("A provision that
seems to the court unjust or unfortunate . . . must nonetheless
be given effect.").
¶69 While the court in Teschendorf agreed on very little,
it should disturb this court that six justices acknowledged a
"literal" reading of the statute supported the insurer. 293
Wis. 2d 123, ¶¶24, 32 (lead op.). A literal reading is not
necessarily the same as a plain reading, but the absurdity
faction noted the insurer's reading was not only "literal" but
"plain[.]" Id., ¶32. See generally Brey, 400 Wis. 2d 417, ¶11
(explaining "the plain-meaning approach is not 'literalistic'"
(quoting Kalal, 271 Wis. 2d 633, ¶52)). Self-evidently, a plain
meaning cannot be ignored by merely labelling it literal, as the
ambiguity faction did in discarding it.
¶70 The ambiguity faction's addition of what it deemed an
"implied condition" is reminiscent of a time when "the monarch
. . . [was considered by some] a one-man legislator." Scalia &
Garner, Reading Law, at 349. Centuries ago, one treatise
20
No. 2020AP1078-FT.rgb
embraced judicial law-making in an early exposition of the
usefulness of divining legislative intent:
[I]n order to form a right judgment when the letter of
a statute is restrained, and when enlarged, by equity,
it is a good way, when you peruse a statute, to
suppose that the lawmaker is present, and that you
have asked him the question you want to know touching
the equity; then you must give yourself such an answer
as you imagine he would have done, if he had been
present . . . . And if the lawmaker would have
followed the equity, notwithstanding the words of the
law . . . , you may safely do the like.
Edmund Plowden, Note to Eyston v. Studd, (1574) 2 Plow. 459a,
467, as reprinted in Scalia & Garner, Reading Law, at 349
(ellipses in the original). Centuries later, the people of
Wisconsin vested the law-making power exclusively in a
representative body of the people. See Wis. Const. art. IV,
§ 1. To ask what the king would want may yield an answer, but
to divine what hundreds of legislators would want is impossible.
See Scalia & Garner, Reading Law, at 349. Collective intent is
nothing more than a "fiction" because each legislator has his
own "subjective views[.]" Id. at 392; see also Town of Wilson,
390 Wis. 2d 266, ¶68 ("Crafting judicial doctrines based on the
collective intent of a large body relies on the false premise
that a deliberative body acts with a single purpose." (citing
John W. MacDonald, The Position of Statutory Construction in
Present Day Law Practice, 3 Vand. L. Rev. 369, 371 (1950))).
Additionally, to ask the latter has the potential to invite
"judicial mischief," Scalia & Garner, Reading Law, at 350,
because "judicial predictions of how the legislature would have
decided issues it did not in fact decide are bound to be little
21
No. 2020AP1078-FT.rgb
more than wild guesses, and thus lack the legitimacy that might
be accorded to astute guesses." Frank Easterbrook, Statutes'
Domains, 50 U. Chi. L. Rev. 533, 548 (1983).
¶71 While members of the judiciary may have valid and good
ideas for improving the law, the people deny us the authority to
make such policy decisions, having vested the law-making power
exclusively in the legislature. The desirability of such
"improvements" undoubtedly depends on how one may be affected by
the rewritten law. "Although judges may profess well-
intentioned justification for 'improving' the law,
'interpretative approaches can be used for all kinds of
purposes, not just beneficent ones.'" Friends of Frame Park,
U.A. v. City of Waukesha, 2022 WI 57, ¶96, 403 Wis. 2d 1, 976
N.W.2d 263 (Rebecca Grassl Bradley, J., concurring) (quoting
Bryan A. Garner, Old-Fashioned Textualism Is All About
Interpretation, Not Legislating from the Bench, ABA J., Apr.
2019). "The people of Wisconsin elect judges to interpret the
law, not make it." Id.¶72 The ambiguity faction's rationale was nothing more
than a dangerous "venture" down the "path of judicial
legislation" to reach a result deemed "desirable[.]" See State
ex rel. Crow v. West Side St. Ry. Co., 47 S.W. 959, 961 (1898).
Such an action aggregates law-making power to the judiciary,
thereby consolidating in one branch governmental powers the
people deliberately kept separate to avoid tyranny. See League
of Women Voters of Wis. v. Evers, 2019 WI 75, ¶35, 387
Wis. 2d 511, 929 N.W.2d 209.
22
No. 2020AP1078-FT.rgb
¶73 After attacking its rationale, Secura suggests the
absurdity faction may have framed the case correctly, but would
limit the reach of the absurdity doctrine to a "truly anomalous"
situation identified after an "exacting analysis." Secura
points out, "[h]ad the insurer prevailed in Teschendorf, the
insured's estate would have received nothing because the
employer's payments exceeded the . . . limits." In contrast,
the Estate would receive just about five percent less if this
court adopted Secura's argument. The Estate counters that Huck
bargained for a "predetermined, fixed level of coverage"——
$250,000——and Secura's interpretation of the policy would deny
the Estate the benefit of Huck's bargain, a result it declares
"absurd."
¶74 A historical analysis of the absurdity doctrine
supports Secura's argument that even if the absurdity faction in
Teschendorf was correct (it wasn't), that faction's rationale
does not extend to this case. Defining absurdity is
challenging, but two "archetypal" examples of an absurd result
exist in common law. Veronica M. Dougherty, Absurdity and the
Limits of Literalism: Defining the Absurd Result Principle in
Statutory Interpretation, 44 Am. U. L. Rev. 127, 139 (1994).
One scholar wrote that these two examples are "the nearest thing
we have to a legal definition of absurdity." Id. Both examples
developed in the context of statutory interpretation, but the
absurd results canon is materially the same as applied in
contract interpretation. The examples were summarized and the
23
No. 2020AP1078-FT.rgb
absurd results canon applied long ago by the United States
Supreme Court in the following oft-quoted passage:
The common sense of man approves the judgment
mentioned by Puffendorf, that the Bolognian law which
enacted, 'that whoever drew blood in the streets
should be punished with the utmost severity,' did not
extend to the surgeon who opened the vein of a person
that fell down in the street in a fit. The same
common sense accepts the ruling, cited by Plowden,
that the statute of 1st Edward II, which enacts that a
prisoner who breaks prison shall be guilty of felony,
does not extend to a prisoner who breaks out when the
prison is on fire——'for he is not to be hanged because
he would not stay to be burnt.' And we think that a
like common sense will sanction the ruling we make,
that the act of Congress which punishes the
obstruction or retarding of the passage of the mail,
or of its carrier, does not apply to a case of
temporary detention of the mail caused by the arrest
of the carrier upon an indictment for murder.
United States v. Kirby, 74 U.S. 482, 487 (1868).
¶75 To equate the Estate receiving $189,000 instead of
$199,000 with the two archetypal examples of absurdity would be,
well, absurd. The two examples are qualitatively different than
the Estate's received insurance proceeds. History tells us
punishing a person for trying to preserve life would work a
grievous moral injustice. Punishing a doctor who provides life-
saving care or a prisoner who escapes a burning prison would not
violate only common sense——it would violate natural law. See 1
William Blackstone, Commentaries *129 ("THE right of personal
security consists in a person's legal and uninterrupted
enjoyment of his life, his limbs, his body, his health, and his
reputation."); see also Wis. Const. art. I, § 1 ("All people are
born equally free and independent, and have certain inherent
rights; among these are life, liberty and the pursuit of
24
No. 2020AP1078-FT.rgb
happiness; to secure these rights, governments are instituted,
deriving their just powers from the consent of the governed.").
Punishing a mail carrier for temporarily detaining mail while
the carrier was detained by the State would be Kafkaesque and
contrary to the common law tradition of prohibiting punishment
for involuntary acts. See actus reus, Black's Law Dictionary
(11 ed. 2019).
¶76 The two archetypal examples demonstrate "the absurd
. . . results canon applies only rarely and in rather narrow
circumstances[.]" Container Life Cycle Mgmt., LLC v. Wis. Dep't
of Nat. Res., 2022 WI 45, ¶79, 402 Wis. 2d 337, 975 N.W.2d 621(Rebecca Grassl Bradley, J., dissenting). "Just because a court
dislikes the outcome does not mean it is absurd." Id. (quoting
Schwab v. Schwab, 2021 WI 67, ¶44 n.1, 397 Wis. 2d 820, 961
N.W.2d 56 (Rebecca Grassl Bradley, J., dissenting)). Properly
understood, absurdity is not about "practical[ity]" or "fit"
because "people differ over what is sensible and what is
desirable," which is why "we elect those who write our laws——and
expect courts to observe what has been written." Backus v.
Waukesha County, 2022 WI 55, ¶26, 402 Wis. 2d 764, 976
N.W.2d 492 (Rebecca Grassl Bradley, J., dissenting)
(modification in the original) (quoting Scalia & Garner, Reading
Law, at 22). An absurd result "consists of a disposition that
no reasonable person could intend." Scalia & Garner, Reading
Law, at 237.
¶77 Justice Joseph Story described the extraordinary facts
necessary to disregard plain language to avoid absurdity:
25
No. 2020AP1078-FT.rgb
[I]f, in any case, the plain meaning of a
provision . . . is to be disregarded, because we
believe the framers of that instrument could not
intend what they say, it must be one, where the
absurdity and injustice of applying the provision to
the case would be so monstrous, that all mankind
would, without hesitation, unite in rejecting the
application.
1 Joseph Story, Commentaries on the Constitution of the United
States § 427 (1833). The Estate's primary argument would have
this court lower the threshold for application of the absurdity
doctrine from "monstrous" to merely unfavorable. In ruling for
the Estate, the majority implicitly endorses a new rule
declaring that when happenstance——i.e., an event outside the
control of the insured——reduces the "predetermined, fixed level
of coverage," the result is legally absurd, justifying judicial
revision of the insurance contract.
¶78 If results are to drive interpretation of insurance
policies, the majority should consider the consequent increase
in insurance premiums, which alone demonstrates that the effect
of Secura's proffered interpretation is not "so monstrous, that
all mankind would, without hesitation, unite in rejecting the
application." Id. In its discussion of the absurd results
canon, a leading treatise on Wisconsin insurance law repeats the
maxim, "an insurance company should not be bound to risks it did
not contemplate and for which it did not receive a premium." 1
Sheila M. Sullivan, Anderson on Wisconsin Insurance Law § 1.34
(8th ed. 2022). "[W]hen the terms of a policy are plain on
their face, the policy should not be rewritten . . . to bind the
insurer to a risk it was unwilling to cover, and for which it
was not paid." Olguin v. Allstate Ins., 71 Wis. 2d 160, 164–65,
26
No. 2020AP1078-FT.rgb
237 N.W.2d 694 (1976). Happenstance often plays a role in
determining how a policy applies. Ambiguity in a policy is
almost always resolved against an insurer, but if unambiguous
policy provisions can also be interpreted against an insurer
whenever judges think the language would produce unfair results,
insurers are left with increased risk uncertainty and will price
their policies accordingly.6
¶79 As amicus Wisconsin Insurance Alliance et al. (WIA)
explains: "Insurers underwrite and issue policies in belief
that policies – and the statutes with which the policies must
comply – will be interpreted and enforced as written. Deviating
from this precept injects uncertainty and additional costs into
an already heavily-regulated industry." Reducing clauses,
especially, "are valued by insurers because they serve to reduce
the cost of premiums to policyholders." Therefore, "[t]he
decision below fosters confusion and undue complexity and will
6Usually, this court has interpreted ambiguity against an
insurer. See, e.g., Marks v. Houston Cas. Co., 2016, WI 53,
¶42, 369 Wis. 2d 547, 881 N.W.2d 309 (citing Estate of Sustache
v. Am. Family Mut. Ins., 2008 WI 87, ¶21, 311 Wis. 2d 548, 751
N.W.2d 845). In at least one case, however, this court used the
absurd results canon to side with the insurer's interpretation
of an ambiguous policy provision. Kopp v. Home Mut. Ins., 6
Wis. 2d 53, 57–58, 94 N.W.2d 224 (1959) ("Even though the policy
provision is ambiguous and must be construed against the
insurer, the unreasonable result should be avoided of so
construing the medical payments clause of defendant's policy as
to permit the injured person to recover for medical or hospital
services supplied to him by some third party volunteer without
cost or personal liability to pay therefor on the part of such
injured person."). That case demonstrates the possible
"absurdity"——if that word will be used so loosely——of holding
insurers liable for risks never contemplated and for which no
premium has been paid.
27
No. 2020AP1078-FT.rgb
harm insurers and consumers by placing upward pressure on the
cost of insurance."
¶80 Lowering the threshold for absurdity would effect a
substantial change in the law. The purpose of UIM coverage is
to "substitute[] for insurance that the tortfeasor should have
had." Teschendorf, 293 Wis. 2d 542, ¶24 (quoted source
omitted). Had Huck been hit by a negligently-driven motor
vehicle that was not underinsured (i.e., by a vehicle covered
under a policy with $250,000 limits), the Estate would have
received about $10,000 less than it would receive in this case
under Secura's proffered reading. But for the negligently
driven motor vehicle being underinsured, the reducing clause
would have no relevance. The Estate would have received
$250,000 in settlement, plus a $36,000 payment of worker's
compensation benefits, for a total of $286,000. Wisconsin
Statute § 102.29(1), however, would have required the Estate to
refund the $36,000 in total. Additionally, the worker's
compensation carrier would have been entitled to $20,000 of the
settlement under Wis. Stat. § 102.29(2). After these
statutorily-required deductions, the Estate would have received
only $230,000. Accordingly, Secura accurately notes, "Huck
purchased UIM insurance to protect against being injured by a
tortfeasor with liability limits less than $250,000. . . . [The
Estate] received exactly that——and more——since the Estate
recovered more than if the tortfeasor had been insured to
28
No. 2020AP1078-FT.rgb
$250,000."7 The Estate has no response to this fact. As Secura
accurately observes, under a plain language interpretation of
the policy, "the Estate's recovery is greater than zero——already
distinguishing this case from Teschendorf——and more than if the
tortfeasor had liability limits of $250,000."
¶81 Expanding the absurd results canon to override the
text whenever judges deem the results "nonsensical," as the
Estate would have it, would unsettle the reasonable expectations
of contracting parties, not to mention leave the law vulnerable
to judicial revision. The language of the reducing clause
plainly contemplates reducing the limits by all sums paid in
worker's compensation benefits. $36,000 was a sum paid.
Nothing in the policy language gives the reimbursement any
relevance. Reimbursement of money paid does not change the
simple fact that money was, in fact, paid. While this result
may seem "unfair," nothing gives this court the authority to
disregard the plain language of an insurance policy.
Teschendorf was wrongly decided but may be distinguished based
on its materially different facts. Either way, Teschendorf has
no bearing on a textual interpretation of the policy in this
case.
D. The Analysis of Wis. Stat. § 632.32(5)(i)2.
¶82 The majority/lead opinion (in a part joined only by
the author and one other justice) concludes Secura's proffered
WIA similarly observes, "the outcome advanced by SECURA is
7
not absurd at all because it results in the insured recovering a
greater amount than if the tortfeasor had liability coverage
equivalent to the insured's UIM limits."
29
No. 2020AP1078-FT.rgb
interpretation of the reducing clause is not authorized by Wis.
Stat. § 632.32(5)(i)2. Majority/lead op., ¶¶19–28. This non-
precedential analysis is unnecessary given the opinion's
conclusion that Secura's interpretation of the reducing clause
is incorrect. Regardless, that analysis is wrong.
¶83 The majority/lead opinion's analysis works only by
improperly adding a word to Wis. Stat. § 632.32(5)(i)2. Section
632.32(5)(i)2. authorizes a reduction by "[a]mounts paid or
payable under any worker's compensation law[.]" The
majority/lead opinion inserts the word "current" before "amounts
paid," so the statute becomes: "Current amounts paid or payable
under any worker's compensation law[.]" Id., ¶27 ("'Amounts
paid' is interpreted as the current 'amounts paid' or
outstanding such as by an installment agreement, at the time an
insurer seeks to reduce its liability under § 632.32(5)(i).").
Problematically for the majority/lead opinion, the text does not
use the phrase "current amounts paid." It does not include any
temporal limitation on how the amount paid is to be calculated.
Without rewriting the statute, the majority/lead opinion's
analysis fails.
IV. CONCLUSION
¶84 This case demonstrates that "the law is such an Ass."
George Chapman, Revenge for Honour, A Tragedie 37 (1654). If,
however, we are to be a "government of laws, and not of men,"
that is the price we must occasionally pay. John Adams,
Novanglus: A History of the Dispute with America, from Its
Origin, in 1754, to the Present Time, in Revolutionary Writings
30
No. 2020AP1078-FT.rgb
of John Adams (C. Bradley Thompson ed. 2000). Because I would
leave the revision of our laws with the legislature where that
work belongs, I respectfully dissent.
31
No. 2020AP1078-FT.rgb
1