Contract-Insurance

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WI Court of Supreme Court

Case Name: Acuity v. Estate of Michael Shimeta

Case No.: 2020AP000189

Officials: Jill J. Karofsky, J.

Focus: Contract-Insurance

This case arises from an automobile accident that occurred when Douglas Curley lost control of his vehicle, crossed the center line, and hit another vehicle, killing Michael Shimeta and seriously injuring his passenger, Terry Scherr. As a result of the accident, Curley’s insurer paid Shimeta’s estate (Shimeta) and Scherr $250,000 each. Shimeta and Scherr sought additional recovery under a policy that Acuity had issued to Shimeta prior to the accident. The policy included underinsured motorist (UIM) coverage with a $500,000 limit for “each person” and a $500,000 limit for “each accident.” At issue in this case is whether Acuity’s UIM coverage entitles Shimeta and Scherr to an additional $250,000 each from Acuity, or whether the payments Shimeta and Scherr received from Curley’s insurer reduced their recovery to nothing. To resolve this issue, the supreme court must interpret the UIM policy’s reducing clause, which states that “[t]he limit of liability shall be reduced by all sums . . . [p]aid because of the bodily injury by or on behalf of persons . . . who may be legally responsible.”

The court of appeals reversed the decision of the circuit court granting declaratory judgment for Acuity, a mutual insurance company. The supreme court affirmed the appeals court reversal.

Affirmed

Decided 04/07/23

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