00-0637 State Farm Mutual Automobile Insurance Co. v. Gillette, et al.

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“We conclude that the only reasonable interpretation of the policy for purposes of calculating damages in the present case is that ‘damages for bodily injury an insured is legally entitled to collect from the owner or driver of an underinsured motor vehicle’ means that an insurance company will compensate an insured for damages for bodily injury that the insured actually incurs for which an underinsured motorist is liable to the insured under the applicable law up to the policy liability limits.

“We further conclude that Wisconsin tort choice of law rules govern which jurisdiction’s law determines the damages an insured is legally entitled to collect from an underinsured motorist. Applying Wisconsin choice of law rules in the present case instructs us to look to Wisconsin law, the law of the forum. Wisconsin has the most significant contacts to the present case.

Wisconsin is the jurisdiction where the injured persons reside and where the insurance policy was issued by a Wisconsin insurance company to Wisconsin insureds.

Applying Wisconsin law comports with Wisconsin’s public policy of compensating victims of tortfeasors. Under Wisconsin law, Gillette and Ostlund are legally entitled to collect noneconomic damages that arise from an automobile accident, and consequently, Gillette and Ostlund are legally entitled to collect noneconomic damages from State Farm on the basis of the underinsured motorist coverage….

“We repeat our caution, however, that neither the law of the forum nor the law of the place of the accident is the choice of law rule applicable to every fact situation or to every issue that might arise regarding the ‘legally entitled to collect’ language.”

Judgment affirmed.

CONCURRING IN PART AND DISSENTING IN PART: Wilcox, J. “I concur with the majority’s reasoning and conclusions in Parts I-IV. However, I do not agree with the majority’s choice of law analysis in Part V, nor do I agree with the ultimate decision of the court to affirm the court of appeals. I would find that under Wisconsin choice of law rules, Manitoba law should apply to determine the amount that Gillette and Ostlund would be legally entitled to collect. I therefore dissent from the opinion of the court.”

DISSENTING OPINION: Crooks, J., with whom Sykes, J., joins. “I would reverse the decision of the court of appeals because under Wisconsin law and, thus, the plain language of the policy, Manitoba law, not Wisconsin law, determines the amount of damages Gillette and Ostlund are legally entitled to collect from the underinsured motorist. Furthermore, I would reverse the court of appeals’ decision because under Danbeck v. American Family Mutual Insurance Co., 2001 WI 91, 245 Wis. 2d 186, 629 N.W.2d 150, the State Farm policy exhaustion provision has not been satisfied merely because there is no recovery for non-economic damages. The majority claims that such a bar to recovery satisfies the exhaustion requirement.”

Court of Appeals, Abrahamson, Ch. J.

Attorneys:

For Appellant: Gregory J. Egan, La Crosse

For Respondent: Claude J. Covelli, Madison