01-2015 Knowles, et al. v. State Farm Mutual Automobile Insurance Company

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The underinsured motorist coverage in an insurance policy issued by State Farm Mutual Automobile Insurance Company to Terri and Anthony Knowles did not contain a reducing clause that had been included in a previous policy issued to the Knowleses. The trial court entered judgment reforming the policy to include the reducing clause, and the Knowleses appeal. They claim that the trial court erred in concluding on summary judgment that the omission in the policy was due to a “mutual mistake.” They also argue that, even if a mutual mistake occurred when the policy was issued, State Farm ratified the omission by renewing the policy without adding a reducing clause endorsement.

We conclude that a factual dispute exists as to whether the parties acted under a mutual mistake and, therefore, that State Farm is not entitled to a summary judgment reforming the policy. We also conclude that State Farm’s renewal of the allegedly erroneous policy did not constitute a ratification of the prior policy as a matter of law.

Accordingly, we reverse and remand for further proceedings in the circuit court.

Not recommended for publication in the official reports.

Dist IV, Dane County, Flanagan, J., Deininger, J.

Attorneys:

For Appellant: David W. Easton, Madison; John C. Mitby, Madison; Kevin David Trost, Green Bay

For Respondent: Claude J. Covelli, Madison