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COURT OF APPEALS DECISION DATED AND RELEASED April 25, 1996 |
NOTICE |
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A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-2355
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT IV
BRUCE R. RAEMISCH,
Plaintiff-Appellant,
v.
LIBERTY GROVE MUTUAL
INSURANCE COMPANY,
Defendant-Respondent.
APPEAL from a judgment
of the circuit court for Dane County:
STUART A. SCHWARTZ, Judge. Affirmed.
Before Eich, C.J.,
Gartzke, P.J. and Dykman, J.
PER CURIAM. Bruce R. Raemisch appeals from a summary
judgment dismissing his complaint against Liberty Grove Mutual Insurance
Company ("Liberty Grove").
The issues are whether the policy limits coverage to $100,000 and
whether Liberty Grove is obliged to pay Raemisch's attorney's fees after paying
him $100,000. Our conclusion, that
Liberty Grove's maximum exposure to cover Raemisch's loss is $100,000, disposes
of the attorney's fees issue.
Therefore, we affirm.
Raemisch insured his
vacation home with Liberty Grove. The
policy provided replacement cost coverage in addition to the basic
dwelling/residence coverage. It is
undisputed that the home's value exceeded $100,000[1]
and that it was totally destroyed by fire.
Liberty Grove paid Raemisch $100,000, which it contends is its maximum
exposure under the policy. Raemisch
sued to recover the home's actual cash value under the express language of the
replacement cost provision. Raemisch
moved for summary judgment. Although
the actual cash value of the damaged property exceeded $100,000, the trial
court concluded that this was a $100,000 policy and granted summary judgment to
Liberty Grove. Section 802.08(6), Stats.
Raemisch appeals.
The relevant policy
provisions are:
Our Limit of Liability -
For loss to property, we pay the lesser of the following amounts:
1) the applicable limit of liability;
2)an amount not greater than your interest in the property;
3)the cost of repairing or replacing the property with materials of
equivalent kind and quality to the extent practicable;
4)the amount computed after applying the deductible or other
limitation applicable to the loss;
5)the actual cash value of the property at the time of loss (except
as provided under the Replacement Cost Provision, if applicable); or
6)(applies to mobile homes only at your
option) the amount equal to the difference between the actual cash value of the
property immediately before the loss and its actual cash value immediately
after the loss.
(Emphasis
in original.) According to (1), Liberty
Grove's limit of liability for a dwelling/residence is $100,000. However, (5) refers to the Replacement Cost
Provision. That provision "is subject
to the terms of How Much We Pay for Loss or Claim in the General Policy Provisions." (Emphasis in original.) The Replacement Cost Provision continues, in
pertinent part:
2.If the limit of liability on the
damaged building is less than 80 percent of its replacement cost at the time of
loss, we pay the larger of the following:
a.actual cash value of the damaged part of the building; or
b.that proportion of the replacement cost of
the damaged part which our limit of liability on the building bears to
80 percent of the full current replacement cost of the building.
(Emphasis
in original.)[2]
Raemisch contends that
he is entitled to the home's actual cash value under the replacement cost
provision. That provision requires
Liberty Grove to pay over $400,000, the actual cash value of the home, because
the limit of liability ($100,000) is less than 80 percent of its replacement
cost.[3]
Raemisch contends that
the policy's specific provision prevails over its general provision—that the
replacement cost provision prevails over and expands coverage otherwise limited
by the "How Much We Pay for Loss" provision. We would agree with Raemisch, were the
specific provision to conflict with the general provision.[4] But there is no conflict, because the plain
language of the replacement cost provision expressly refers to the
applicability of the "How Much We Pay for Loss" provision. Applying the latter provision, Liberty Grove
must pay the lesser of: (1) the
applicable limit of liability ($100,000); or (2) the actual cash value of the
home ($400,000).
The replacement cost
provision is triggered to determine whether the amount is less than the
applicable limit of liability. Once it
has been determined that the lesser amount is the limit of liability, the
replacement cost provision no longer applies.[5] Liberty Grove paid the lesser amount -- the
limit of liability.
Raemisch wrongly
contends that under our analysis his replacement coverage is illusory because
he paid an additional premium for it, but obtained no additional coverage. He received value for his additional
premium. The replacement cost provision
benefits the insured when the cost of replacement is greater than the actual
cash value but less than the limit of liability.
Because we conclude that
Liberty Grove's liability under this policy is limited to $100,000, we do not
address its alternative theory under § 632.05(2), Stats. Our conclusion
also disposes of Raemisch's claim for attorney's fees.
By the Court.—Judgment
affirmed.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.