Insurance — duty to defend

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Wisconsin Court of Appeals

Civil

Insurance — duty to defend

Where an insurer settled a claim for less than its policy limits, it retains a duty to defend the insured.

“[T]he policy unambiguously requires Millers First to provide a defense for Menard until Millers First has exhausted its ‘limit of liability[.]’ We agree with Menard that the only reasonable interpretation of the term ‘limit of liability’ is the $100,000 limit of liability listed on the policy’s declarations page. Consequently, under the unambiguous policy language, Millers First was required to provide a defense for Menard until it paid its $100,000 limit of liability. Although the circuit court concluded Millers First would ultimately be responsible for one-sixth of any verdict or settlement, that conclusion is extraneous to the insurance policy and does not affect the unambiguous policy language. As Menard’s counsel stated at oral argument, to conclude that the term ‘limit of liability’ ‘appl[ies] to a court determination of responsibility after application of other insurance clauses as opposed to what the policy clearly indicates in the first instance’ would be a ‘contorted’ interpretation of the policy. Where policy language is unambiguous, we simply apply it as written. Stubbe, 257 Wis. 2d 401, ¶8. Further, even if the term ‘limit of liability’ were ambiguous, we would construe it in Menard’s favor. See id.”

Affirmed in part, and Reversed in part.

Recommended for publication in the official reports.

2013AP907 Burgraff v. Menard, Inc.

Dist. III, Eau Claire County, Schumacher, J., Stark, J.

Attorneys: For Appellant: Fertl, Jeffrey S., Milwaukee; Lauritch, Melissa J., Milwaukee; For Respondent: Bye, Charles M., River Falls; Heidt, Martha H., River Falls