CA Blank Order

Hon. Gerald P. Ptacek

Circuit Court Judge

Racine County Courthouse

730 Wisconsin Avenue

Racine, WI 53403

Rose Lee

Clerk of Circuit Court

Racine County Courthouse

730 Wisconsin Avenue

Racine, WI 53403

Michael J. Cerjak

John M. Swietlik Jr.

Kasdorf, Lewis & Swietlik, S.C.

11270 W. Park Place, #500

Milwaukee, WI 53224-3639

Brian J. Frank

Allstate & Encompass Ins. Staff Counsel

555 S. Executive Drive, #130

Brookfield, WI 53005-4220

Donna L. Ginzl

Brent William Jacobson

Anderson, O'Brien, Bertz, Skrenes & Golla

P.O. Box 228

Stevens Point, WI 54481-0228

Grace Marie Kulkoski

Peterson, Johnson & Murray, S.C.

3 S. Pinckney St., Ste. 900

Madison, WI 53703

Douglas W. Lehrer

Matthiesen, Wickert & Lehrer SC

P.O. Box 270670

Hartford, WI 53027-0670

Lisa T. Warwick

U.S. Attorney's Office

Rm. 530, Fed. Bldg.

517 E. Wisconsin Ave.

Milwaukee, WI 53202-4509

Before Brown, C.J., Neubauer, P.J., and Reilly, J.

Karen J. Wilks appeals from a circuit court order granting summary and declaratory judgment in favor of Allstate Insurance Company. Wilks contends that the circuit court erred when it determined she was not entitled to underinsured motorist (UIM) coverage under her Allstate policy. Based upon our review of the briefs and record, we conclude at conference that this case is appropriate for summary disposition. See Wis. Stat. Rule 809.21 (2013-14).[1] We affirm the order of the circuit court.

This case arises out of a December 31, 2009 automobile accident. Wilks claimed injuries as a result of the accident and brought suit against the other driver. The other driver was insured by a liability policy that provided bodily injury coverage of $250,000 per person.

At the time of the accident, Wilks was insured by Allstate in a policy that ran from September 15, 2009, to March 15, 2010. The policy included UIM coverage in the amount of $100,000. It defined an “underinsured auto” as a motor vehicle “with a bodily injury liability limit (regardless of the amount you might actually recover) less than your Underinsured Motorists Coverage limit” (emphasis in original).

Wilks’ policy also included a reducing clause. That clause stated in relevant part:

The limit of this Underinsured Motorists Coverage shall be reduced by:

1. all amounts paid by or on behalf of any person or organization that may be legally responsible for the bodily injury for which the payment is made, including, but not limited to, any amounts paid under the bodily injury liability coverage of this or any other insurance policy.

(Emphasis in original).

Finally, Wilks’ policy also included a coverage changes clause. That clause provided:

When we broaden a coverage during the policy period without additional charge, you have the new feature if you have the coverage to which it applies. The new features applies [sic] on the date the coverage change is effective in your state. Otherwise, the policy can be changed only be endorsement. Any change in your coverage will [sic] made using the rules, rates and forms in effect, and on file if required, for our use in your state.

(Emphasis in original).

Wilks made a claim for UIM coverage under her Allstate policy. Allstate denied the claim due to the policy’s definition of “underinsured auto” and reducing clause. It then moved for summary and declaratory judgment.

In opposing Allstate’s motion, Wilks argued that her policy’s UIM coverage was broadened in light of 2009 Wis. Act 28. Act 28 amended Wis. Stat. § 632.32 (2009-10) to adopt a more expansive definition of underinsured motor vehicles. See 2009 Wis. Act 28, § 3153. It also amended the statute to prohibit reducing clauses. See 2009 Wis. Act 28, § 3171. Although these changes related only to policies of insurance issued or renewed after the effective date of the Act (November 1, 2009), 2009 Wis. Act 28, §§ 9326(6) and 9426(2), Wilks argued that they applied to her on the Act’s effective date by virtue of her policy’s coverage changes clause.

The circuit court initially accepted Wilks’ argument and denied Allstates’ motion. However, it subsequently reversed itself and granted Allstate relief. This appeal follows.

In this case, we are asked to determine whether the circuit court properly granted summary and declaratory judgment. Whether summary judgment is properly granted presents a question of law, which we review independently. Olson v. Farrar, 2012 WI 3, ¶¶23-24, 338 Wis. 2d 215, 809 N.W.2d 1. The grant or denial of a declaratory judgment, meanwhile, is left to the circuit court’s discretion. Id., ¶24. However, when the exercise of that discretion turns upon a question of law, we review the question independently. Id. Here, the circuit court’s grant of declaratory judgment turned upon the interpretation of an insurance policy, which presents a question of law. Id.

On appeal, Wilks contends that the circuit court erred in granting summary and declaratory judgment to Allstate. She renews her claim that her policy’s coverage changes clause mandated the application of 2009 Wis. Act 28 on its effective date of November 1, 2009, thereby broadening her policy’s UIM coverage. We disagree.

We conclude that this case is analogous to the recently published decision of Wolf v. American Family Mut. Ins. Co., 2015 WI App 36, __ Wis. 2d __, __ N.W.2d __. In that case, Wolf sustained injuries as a result of a December 8, 2009 car accident in which she was a passenger. Id., ¶2. The driver’s insurer paid Wolf its $250,000 policy limit. Id. Wolf then made a claim for UIM coverage with her insurer, American Family, which had issued a policy on June 19, 2009, providing UIM coverage in the amount of $250,000. See id., ¶¶2-4. Wolf acknowledged that, under the terms of her policy, she was not entitled to receive UIM coverage for two reasons: (1) the driver was not an underinsured motorist as defined by the policy; and (2) the reducing clause would draw Wolf’s coverage down to $0, as she had already received $250,000. Id., ¶5. However, she cited her policy’s elasticity clause[2] and argued that it required the application of 2009 Wis. Act 28 on November 1, 2009, thereby voiding her policy’s definition of underinsured motorist and reducing clause. Id., ¶7. The circuit court rejected Wolf’s argument and granted judgment to American Family. Id. Wolf appealed. Id.

This court affirmed the circuit court’s judgment. Id., ¶15. In doing so, we noted that the changes in 2009 Wis. Act 28 simply did not exist for policies that were renewed or issued before November 1, 2009. See id., ¶1. Accordingly, we concluded that there was no conflict requiring the application of the policy’s elasticity clause. Id.

Applying the reasoning of Wolf to the present case, we reach a similar result. As noted, Wilks’ policy was issued on September 15, 2009. Thus, at the time of her accident, the changes in 2009 Wis. Act 28 did not exist for policies like hers. We do not read the coverage changes clause as requiring Allstate to change its policy and broaden its coverage before the law required the change. Because the policy, as written, precluded Wilks from asserting a UIM claim under the circumstances, we affirm the order of the circuit court.

Upon the foregoing reasons,

IT IS ORDERED that the order of the circuit court is summarily affirmed, pursuant to Wis. Stat. Rule 809.21.

[1] All references to the Wisconsin Statutes are to the 2013-14 version unless otherwise noted.

[2] The elasticity clause stated, “Terms of this policy which are in conflict with the statutes of the state in which this policy is issued are changed to conform to those statutes.” Wolf v. American Family Mut. Ins. Co., 2015 WI App 36, ¶4, __ Wis. 2d __, __ N.W.2d __.



	2014AP1173	Karen J. Wilks v. WEA Property & Casualty Insurance Company (L.C. # 2012CV2768)