Appeal first, verdict afterward

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Parties can appeal a circuit court’s ruling on insurance coverage issue, even though liability has not been established at trial.

The Wisconsin Court of Appeals held on Wednesday that the parties’ stipulation to the insurer’s dismissal, upon its posting a bond with the court, did not waive the right to appeal.

Michael Kuester, an uninsured motorist driving a leased vehicle, was involved in an accident with another vehicle. Deanna Brown and Cynthia Eulenbach, the driver and passenger in the other car, sued him for negligence.

Kuester’s lease was serviced by Nissan Motor Acceptance Corp., which is insured by Tokio Marine & Nichido Fire Insurance Co. Ltd.

Tokio moved for summary judgment, arguing that it owed no coverage for Brown and Eulenbach’s injuries, while the plaintiffs argued it provided $5 million in coverage. The circuit court disagreed with both and declared that Tokio provided $50,000 in coverage.

The parties then stipulated to Tokio’s dismissal from the action upon payment to the court of its $50,000 policy limits.

The stipulation also provided that if Tokio is not successful on appeal it does not waive its right to contest the amount of negligence attributable to the parties or the amount of damages sustained by the plaintiffs.

Both sides then appealed and the Court of Appeals demanded memoranda on whether the stipulation waived the right to appeal. The parties agreed that appellate jurisdiction was present and the court confirmed its jurisdiction.

The court acknowledged that, in previous cases, it has dismissed appeals taken from conditional judgments of dismissal on stipulation. In each of those cases, however, there were outstanding claims not resolved by the stipulation.

Here, in contrast, there are no unresolved separate claims that the parties are deferring until after appeal.

“Under the current ruling, Tokio Marine only owes $50,000 and has paid that sum,” the court explained, “Because a trial on Tokio Marine’s obligation would only result in a judgment for $50,000, an amount Tokio Marine concedes it owes under the circuit court’s coverage determination, the only claim to be litigated was fully resolved. The stipulation premised on the correctness of the coverage determination does not preclude a redetermination of the financial obligations of Tokio Marine under a different coverage determination.”

What the Court Held

Case: Brown v. Kuester, No. 2011AP454

Issue: Can parties appeal a coverage determination before the trial on liability?

Holding: Yes. Where the insurer pays its policy limits, as determined by the circuit court, the parties can stipulate to dismissal and appeal the coverage ruling.

Attorneys: For Plaintiffs: Robert I. DuMez, Kenosha; For Defendant: Jeffrey S. Fertl, Melissa J. Lauritch, Milwaukee.

David Ziemer can be reached at [email protected].