December 6, 2021

Volume XI, Number 340

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December 03, 2021

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Court of Appeals Rules UIM Limits Are Reduced Only by Worker’s Compensation Actually Received

Secura Supreme Insurance Company v. The Estate of Daniel Keith Huck, 2020AP1078-FT (Ct. App. Sept. 29, 2021)

In Secura, the decedent Huck was killed by a motorist while working in the course and scope of his employment for the Village of Mt. Pleasant. After receiving the tortfeasor’s liability limits of $25,000 and worker’s compensation from the Village’s insurer, the Estate submitted a claim for underinsured motorist’s (“UIM”) coverage under Huck’s automobile insurance policy with Secura, which had limits of $250,000. Secura’s policy language provided that UIM limits would be reduced by “all sums … [p]aid or payable because of the bodily injury under … [w]orker’s compensation law,” tracking the language of Section 632.32(5)(i)2. While the Estate initially received worker’s compensation benefits of $35,798.04, it was obligated by Section 102.29 to refund the insurer $9,718.73 from its settlement with the tortfeasor, netting $26,079.31. Secura and the Estate agreed the UIM policy limits were reduced by the $26,079.31 paid to and kept by the Estate but disagreed whether the limits were also reduced by the amount paid by and then paid back to the insurer pursuant to Section 102.29. The circuit court found for the Estate, and Secura appealed.

The Court of Appeals affirmed, guided by the Wisconsin Supreme Court’s statutory analysis of Section 632.32(5)(i)2. in Teschendorf v. State Farm Ins. Co., 2006, WI 89, 293 Wis. 2d 123, 717 N.W.2d 258. As the Court noted, the “consistent focus” of Teschendorf was on “what the injured person actually received from the worker’s compensation insurer.” The Court rejected Secura’s effort to distinguish Teschendorf by asserting that the worker’s compensation insurer did pay the Estate $9,718.73, which ignored that the amount initially paid was paid back. The Court concluded a UIM insurer is permitted to reduce its limits only “by the total amount of worker’s compensation actually received”.

The decision is recommended for publication. 

©2021 von Briesen & Roper, s.cNational Law Review, Volume XI, Number 287
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About this Author

Heidi Vogt, von Briesen Roper Law Firm, Milwaukee, Insurance and Litigation Law Attorney

Heidi Vogt is a Shareholder and Co-Chair of the Litigation and Risk Management Practice Group as well as the Chair of the Insurance Coverage and Risk Management Section. Her practice focuses on insurance coverage litigation, commercial disputes, constitutional law, and complex litigation. She has represented insurance companies in Wisconsin and across the country in both state and federal courts in complex insurance coverage matters for more than 20 years.

She represents and counsels insurance clients on a wide variety of...

414-287-1258
Attorney

Mollie Kugler is a Shareholder in the Litigation and Risk Management Practice Group where she focuses her practice on representing and counseling insurance companies in litigation and disputes. Her clients benefit from her extensive coverage claims experience and her comprehensive knowledge of the litigation process, from formulating strategy plans and handling discovery, to drafting and arguing motions, and settlement or—if necessary—trial. A portion of Mollie’s practice is also dedicated to commercial and business litigation.

She has authored several publications for trade...

414-287-1270
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