Sukala v. Heritage Mutual Insurance

2005 WI 83, 698 N.W.2d 610, 282 Wis. 2d 46, 2005 Wisc. LEXIS 320
CourtWisconsin Supreme Court
DecidedJune 22, 2005
Docket2003AP173
StatusPublished
Cited by43 cases

This text of 2005 WI 83 (Sukala v. Heritage Mutual Insurance) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sukala v. Heritage Mutual Insurance, 2005 WI 83, 698 N.W.2d 610, 282 Wis. 2d 46, 2005 Wisc. LEXIS 320 (Wis. 2005).

Opinions

[51]*51PATIENCE DRAKE ROGGENSACK, J.

¶ 1. Heritage Mutual Insurance Company (Heritage) and Western National Mutual Insurance Company (Western) seek review of a court of appeals decision reversing the circuit court's1 denial of relief from judgment to Dawn and John Sukala under Wis. Stat. § 806.07(l)(h) (2001-02).2 We conclude that the circuit court correctly determined that there had been no change in the law in regard to the enforceability of the reducing clauses at issue here. Therefore, because a change in the law was the basis for the Sukalas' motion, the circuit court appropriately exercised its discretion in denying the Sukalas relief from judgment. Accordingly, we reverse the court of appeals.

I. BACKGROUND

¶ 2. On October 2,1996, automobiles operated by John Sukala and Bruce Hasenohrl were involved in an accident that caused serious injuries to Sukala. The accident occurred during the course of Sukala's employment, and he received $786,000.18 in workers' compensation benefits from a policy issued by Heritage to his employer. The Sukalas also received $100,000 from Hasenohrl's automobile liability insurance, the limits of that policy.

¶ 3. The Sukalas sought additional recovery from two underinsured motorist (UIM) provisions, one in the Sukalas' personal automobile policy issued by Western with coverage limits of $250,000, and the other in a Heritage policy held by John Sukala's employer with [52]*52$1,000,000 limits. Both UIM policies contained reducing clauses to lower the UIM limits by payments received from liability insurance and workers' compensation benefits.3

¶ 4. In February 1997, the Sukalas sued Heritage, as both Hasenohrl's insurer and the UIM insurer for John Sukala's employer, and Western, as the Sukalas' UIM insurer. The Sukalas moved to invalidate the Heritage and Western UIM reducing clauses and to declare Wis. Stat. § 632.32(5)(i)4 unconstitutional, be[53]*53cause it permits reducing clauses in automobile insurance policies. The circuit court concluded that the reducing clauses were enforceable and § 632.32(5)(i) was constitutional. The Sukalas appealed, and while the case was pending before the court of appeals, this court decided Dowhower v. West Bend Mutual Insurance Co., 2000 WI 73, 236 Wis. 2d 113, 613 N.W.2d 557. There we held that § 632.32(5)(i) was constitutional and that a "reducing clause may be ambiguous within the context of the insurance contract." Dowhower, 236 Wis. 2d 113, ¶¶ 35-36. The court of appeals affirmed the circuit court's ruling against the Sukalas, Sukala v. Heritage Mutual Insurance Co., 2000 WI App 266, ¶ 20, 240 Wis. 2d 65, 622 N.W.2d 457 (Sukala I), and we denied the Sukalas' petition for review.

¶ 5. Seven months after we denied the Sukalas' petition for review, we granted review in Badger Mutual Insurance Co. v. Schmitz, 2002 WI 98, 255 Wis. 2d 61, 647 N.W.2d 223. We decided Schmitz in July 2002, stating that a reviewing court must examine a reducing clause in the context of the entire policy to determine whether the reducing clause is ambiguous. Id., ¶ 49. If the reducing clause, in the context of the entire policy, is misleading or unclear, it is ambiguous and not enforceable. Id. We also referred to the court of appeals decision in Sukala I, stating, "[i]n essence, we agree with [the court's] analysis," but that the court "pro[54]*54ceeded to an ambiguous and misleading conclusion." Schmitz, 255 Wis. 2d 61, ¶ 42. The conclusion in Sukala I to which we referred in Schmitz was:

[U]nder Dowhower and the declared public policy of the legislature in Wis. Stat. § 632.32(5)(i), UIM reducing clauses complying with § 632.32(5)(i) cannot render UIM coverage "illusory." Once we have concluded that the UIM provisions of a policy are unambiguous, as we have here, then our inquiry is at an end.

Id. (quoting Sukala I, 240 Wis. 2d 65, ¶ 20). In Schmitz, we explained:

[T]he Sukala court shifted terms, moving from the reducing clause to "the UIM provisions of the policy," although the two could easily be read as one and the same. A policy in which all "the UIM provisions" are unambiguous is different from a policy in which only the reducing clause is unambiguous. In any event, the concluding sentence implies that once the reducing clause is found to be unambiguous, the inquiry is at an end. That is incorrect because Dowhower contemplates consideration of the entire policy.

Schmitz, 255 Wis. 2d 61, ¶ 42 (emphasis in original).

¶ 6. On June 22, 2001, while Schmitz was pending before the court of appeals, the Sukalas and Western entered into a "Release of All Claims and Hold Harmless Agreement" releasing Western from liability concerning John Sukala's accident in exchange for a payment from Western. On July 3, 2001, the Sukalas, Heritage and Western stipulated to the dismissal of the Sukalas' claims against the insurance companies.

¶ 7. On October 21, 2002, the Sukalas moved for relief from all judgments, orders, releases and stipulations from the case under Wis. Stat. § 806.07(l)(h). The circuit court denied the motion. On appeal, the court of [55]*55appeals reversed the circuit court's order. Sukala v. Heritage Mut. Ins. Co., 2004 WI App 128, ¶ 14,275 Wis. 2d 469, 685 N.W.2d 809 (Sukala II). We granted Heritage's and Western's petitions for review.

II. DISCUSSION

A. Standard of Review

¶ 8. Whether to grant relief from judgment under Wis. Stat. § 806.07(1)(h) is a decision within the discretion of the circuit court. Franke v. Franke, 2004 WI 8, ¶ 54, 268 Wis. 2d 360, 674 N.W.2d 832. A circuit court's discretionary decision will not be reversed unless the court erroneously exercised its discretion. Schwochert v. American Family Mut. Ins. Co., 172 Wis. 2d 628, 630, 494 N.W.2d 201 (1993). A discretionary decision contemplates a process of reasoning that depends on facts that are in the record, or reasonably derived by inference from facts of record, and a conclusion based on the application of the correct legal standard. State ex rel. Cynthia M.S. v. Michael F.C., 181 Wis. 2d 618, 624, 511 N.W.2d 868 (1994). "We will not reverse a discretionary determination by the trial court if the record shows that discretion was in fact exercised and we can perceive a reasonable basis for the court's decision." Brown v. Mosser Lee Co., 164 Wis. 2d 612, 617, 476 N.W.2d 294 (Ct. App. 1991) (citation omitted).

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Bluebook (online)
2005 WI 83, 698 N.W.2d 610, 282 Wis. 2d 46, 2005 Wisc. LEXIS 320, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sukala-v-heritage-mutual-insurance-wis-2005.