ACUITY v. Estate of Michael Shimeta

2023 WI 28

SUPREME COURT OF WISCONSIN
CASE NO.: 2020AP189

COMPLETE TITLE: ACUITY, a Mutual Insurance Co.,
Plaintiff-Respondent-Petitioner,
v.
Estate of Michael Shimeta and Terry Scherr,
Defendants-Appellants,
Partners Mutual Insurance Co.,
Intervening Defendant.

REVIEW OF DECISION OF THE COURT OF APPEALS
Reported at 399 Wis. 2d 375, 965 N.W.2d 78
PDC No: 2021 WI App 64 - Published

OPINION FILED: April 7, 2023
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: September 30, 2022

SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Milwaukee
JUDGE: Jeffrey A. Conen

JUSTICES:
KAROFSKY, J., delivered the majority opinion of the Court, in
which ANN WALSH BRADLEY, ROGGENSACK, and DALLET, JJ., joined.
ZIEGLER, C.J., filed a dissenting opinion, in which REBECCA
GRASSL BRADLEY, J., joined. HAGEDORN, J., filed a dissenting
opinion, in which REBECCA GRASSL BRADLEY, J., joined.
NOT PARTICIPATING:

ATTORNEYS:

For the plaintiff-respondent-petitioner, there were briefs
filed by Christine M. Rice, Nicole R. Radler, and Simpson &
Deardorff, S.C., Milwaukee. There was an oral argument by
Christine M. Rice.

For the defendants-appellants, there was a brief filed by
Brett A. Eckstein and Cannon & Dunphy, S.C., Brookfield. There
was an oral argument by Brett A. Eckstein.
 An amicus curiae brief was filed by James A. Friedman,
Daniel C.W. Narvey, and Godfrey & Kahn, S.C., Madison, for the
Wisconsin Insurance Alliance.

An amicus curiae brief was filed by Mark L. Thomsen, Lynn
R. Laufenberg, and Gingras, Thomsen, & Wachs, LLP, Madison, for
the Wisconsin Association for Justice.

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 2023 WI 28
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2020AP189
(L.C. No. 2019CV5402)

STATE OF WISCONSIN : IN SUPREME COURT

ACUITY, a Mutual Insurance Co.,

Plaintiff-Respondent-Petitioner,

v.
FILED
Estate of Michael Shimeta and Terry Scherr, APR 7, 2023

Defendants-Appellants, Sheila T. Reiff
Clerk of Supreme Court

Partners Mutual Insurance Co.,

Intervening Defendant.

KAROFSKY, J., delivered the majority opinion of the Court, in
which ANN WALSH BRADLEY, ROGGENSACK, and DALLET, JJ., joined.
ZIEGLER, C.J., filed a dissenting opinion, in which REBECCA
GRASSL BRADLEY, J., joined. HAGEDORN, J., filed a dissenting
opinion, in which REBECCA GRASSL BRADLEY, J., joined.

REVIEW of a decision of the Court of Appeals. Affirmed.

¶1 JILL J. KAROFSKY, J. This case arises from a tragic

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
 No. 2020AP189

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, we 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."

¶2 We conclude that the reducing clause operates on an

individual basis to reduce the $500,000 "each person" limit of

liability by the $250,000 payment that Shimeta and Scherr each

received from Curley's insurer. Consequently, Acuity owes
Shimeta and Scherr $250,000 each. Accordingly, we affirm the

court of appeals' reversal of the circuit court's1 grant of

declaratory judgment for Acuity.

I. BACKGROUND
¶3 Michael Shimeta was tragically killed and Terry Scherr

was severely injured on November 22, 2018 when Douglas Curley

1 The Honorable Jeffrey A. Conen of the Milwaukee County
Circuit Court presiding.

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 No. 2020AP189

lost control of his pickup truck on Highway 10 in Portage

County, crossed the center line, flipped in the air, and landed

on top of Shimeta's Jeep. It is undisputed that Shimeta and

Scherr's injuries met or exceeded $1 million in damages.

¶4 Curley was insured under an automobile liability

insurance policy issued by Farmers Insurance Company. The

policy provided coverage up to a $250,000 "per person" limit of

liability, and a $500,000 "per accident" limit of liability. In

accordance with this policy, Farmers paid Shimeta and Scherr

$250,000 each.

¶5 Shimeta and Scherr were also covered under a UIM

policy that Acuity issued to Shimeta. The policy's liability

limits for UIM coverage are $500,000 for "each person" and

$500,000 for "each accident." The policy includes a reducing

clause that states: "[t]he limit of liability shall be reduced

by all sums . . . [p]aid because of the bodily injury2 by or on

behalf of persons . . . who may be legally responsible."

¶6 The parties do not dispute that both Shimeta and
Scherr were insured under the UIM policy. Nor do they dispute

that Curley's truck was an "underinsured motor vehicle" as

defined by the policy. In dispute is whether Acuity must still

pay $250,000 each to Shimeta and Scherr, or whether the $500,000

in combined payments from Farmers reduced Acuity's policy limits

to zero.

In Acuity's policy, defined terms are in bold font.
2 Those
terms are underlined in this opinion.

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 No. 2020AP189

¶7 Acuity filed an action for declaratory judgment,

asking the circuit court to find that Acuity was not obligated

to pay Shimeta and Scherr any UIM benefits under its policy

because Shimeta and Scherr had already received a total of

$500,000 from Farmers. The circuit court granted Acuity's

motion, reasoning that Acuity's $500,000 maximum limit for "each

accident" was reduced to zero by Farmers' combined payments to

Shimeta and Scherr. The court of appeals reversed, concluding

that the reducing clause operates on an individual basis to

reduce the limit of liability for "each person" by the payment

that "each person" insured under the policy received. We agree

with the court of appeals and conclude that the clause reduces

the "each person" limit by the payments an individual insured

received for his or her injuries.

II. ANALYSIS

¶8 This case requires the court to interpret the language

of an insurance policy, which presents a question of law that we

review de novo. Mau v. N.D. Ins. Rsrv. Fund, 2001 WI 134, ¶12,
248 Wis. 2d 1031, 637 N.W.2d 45.

¶9 Analyzing Acuity's UIM policy requires us to put the

disputed UIM policy language in context. To do so, we first

provide a brief overview of the purpose of UIM coverage and the

principles we use when interpreting UIM policies. Next, we

review the UIM policy language at issue in this case. We then

conclude that the policy's reducing clause, when read in the

context of the whole policy, reduces the limit of liability for
"each person" by the payments received by each individual
4
 No. 2020AP189

insured. We further determine that the policy's "each accident"

limit of liability serves as an additional backstop,

establishing the maximum amount that Acuity will pay out for any

one accident.

A. UIM Background

¶10 As a general matter, the purpose of UIM coverage is to

protect "persons insured under that coverage who are legally

entitled to recover damages for bodily injury, death, sickness,

or disease from owners or operators of underinsured motor

vehicles." Wis. Stat. § 632.32(2)(d) (2019-20).3 This court has

identified two approaches to UIM coverage, both of which are

permissible under Wis. Stat. § 632.32(4m). Welin v. Am. Fam.

Mut. Ins. Co., 2006 WI 81, ¶¶24-27, 292 Wis. 2d 73, 717

N.W.2d 690. Policies that follow the "separate fund" approach

provide a set amount of coverage for the insured's damages that

exceed the amount the insured recovers from the responsible

party. State Farm Mut. Auto. Ins. Co. v. Langridge, 2004 WI

113, ¶16, 275 Wis. 2d 35, 683 N.W.2d 75. Policies that follow
the "limits-to-limits" approach——like Acuity's policy——provide

"a predetermined, fixed level of UIM recovery that is arrived at

by combining payments from all sources" legally responsible for

the insured's damages. Welin, 292 Wis. 2d 73, ¶49. To that

end, Wis. Stat. § 632.32(5)(i) allows insurers to write UIM

policies that "provide that the limits under the policy" shall

All subsequent references to the Wisconsin Statutes are to
3

the 2019-2020 version unless otherwise indicated.

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 No. 2020AP189

be reduced by "[a]mounts paid by or on behalf of any person or

organization that may be legally responsible for the bodily

injury or death for which the payment is made."

¶11 While our UIM cases provide a helpful framework for

interpreting policy language, we pause to note that a UIM policy

is a contract, and "[w]here the language of the policy is plain

and unambiguous, we enforce it as written . . . . This is to

avoid rewriting the contract by construction and imposing

contract obligations that the parties did not undertake."

Danbeck v. Am. Fam. Mut. Ins. Co., 2001 WI 91, ¶10, 245

Wis. 2d 186, 629 N.W.2d 150 (internal citations omitted). We

interpret the policy language as a reasonable insured would

understand it, and if the language is ambiguous, we construe it

in favor of the insured. Id. With these principles in mind, we

turn to the language of the contract at issue in this case.

B. Policy Language

¶12 We begin our review of the insurance policy by

examining the Declarations page. We next look to the UIM grant
of coverage, then we examine the definition of "underinsured

motor vehicle," and finally we analyze the Limits of Liability

section, which contains the reducing clause at issue in this

case.

¶13 The policy's Declarations page lists the types of

coverage the policy provides, including "Underinsured Motorists"

coverage for "$500,000 Each Person" and "$500,000 Each

Accident." The Declarations page does not provide any
additional information about "Underinsured Motorists" coverage
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 No. 2020AP189

or what "Each Person" or "Each Accident" mean, so we turn next

to the Underinsured Motorists Coverage section in Part IV of the

policy for further clarification.

¶14 The Underinsured Motorists Coverage section first

includes the following grant of coverage:

We [Acuity] will pay damages for bodily injury which
an insured person is legally entitled to recover from
the owner or operator of an underinsured motor
vehicle. Bodily injury must be sustained by an
insured person and must be caused by accident and
result from the ownership, maintenance, or use of the
underinsured motor vehicle.
Acuity does not dispute that: (1) Shimeta and Scherr were

legally entitled to recover at least $1 million in damages for

bodily injury from Curley; (2) Shimeta and Scherr were both

"insured persons" under Acuity's policy; and (3) Shimeta and

Scherr sustained injuries that were caused by the accident.

Having established that both Shimeta and Scherr meet the initial

requirements set out in the grant of coverage, we next examine

the policy's definition of "underinsured motor vehicle."

¶15 The policy defines "underinsured motor vehicle" as a

vehicle covered by an insurance policy with a "limit for bodily

injury liability" that is "less than the limit of liability for

this coverage." Acuity does not dispute that Curley operated an

"underinsured motor vehicle." Curley's automobile liability

insurance provided coverage up to a $250,000 "per person" limit

of liability and a $500,000 "per accident" limit of liability.

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 No. 2020AP189

Under a split-limits policy4 like Curley's, "an insured's

objectively reasonable expectation is that the phrase 'limit for

bodily injury liability' means the per person limit of a

tortfeasor's liability policy." Filing v. Com. Union Midwest

Ins. Co., 217 Wis. 2d 640, 650, 579 N.W.2d 65 (Ct. App. 1998).

¶16 Although Acuity does not dispute that Curley is

underinsured, it maintains that Shimeta and Scherr are not

entitled to recover under the policy because, under the Limits

of Liability section, the $500,000 in combined payments they

received from Farmers reduced the policy limits to zero. The

relevant portion of the Limits of Liability section is as

follows:

Limits of Liability

1. The Limit of Liability shown in the Declarations
for each person for Underinsured Motorists coverage is
our maximum limit of liability for all damages,
including damages for care, loss of services or death,
arising out of bodily injury sustained by any one
person in any one accident. Subject to this limit per
person, the Limit of Liability shown in the
Declarations for each accident for Underinsured
Motorists coverage is our maximum limit of liability
for all damages for bodily injury resulting from any
one accident.

This is the most we will pay regardless of the number
of:

a. Insured persons;

b. Claims made;

4 Policies with different per person and per accident limits
are sometimes referred to as "split-limits" policies. See
Folkman v. Quamme, 2003 WI 116, ¶7, 264 Wis. 2d 617, 665
N.W.2d 857.

8
 No. 2020AP189

c. Vehicles or premiums shown in the Declarations; or

d. Vehicles involved in the accident.

2. The limit of liability shall be reduced by all
sums:

a. Paid because of the bodily injury by or on behalf of
persons or organizations who may be legally
responsible. This includes all sums paid under Part
I – Liability; and

b. Paid or payable because of the bodily injury under
any of the following or similar law:

(1) Workers' compensation law; or

(2) Disability benefits law.
¶17 Paragraph 1 of this section defines the "each person"

and "each accident" limits set out in the Declarations page,

establishing that those limits are the maximum that Acuity will

pay for any one person in an accident, and for any one accident,

respectively. Paragraph 1 also states that the "each accident"

limit is subject to the "each person" limit. Paragraph 2

includes a reducing clause providing that "the limit of

liability" will be reduced by payments from those legally
responsible for the insured's damages.

¶18 The parties agree that, under paragraph 1 and the

limits set in the Declarations page, Acuity will never pay more

than $500,000 to any individual insured for any one accident.

Additionally there is agreement that Acuity will never pay more

than $500,000 total for any one accident, regardless of the

number of insureds. The parties' sole dispute is over the

reducing clause in paragraph 2.
C. The Reducing Clause

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 No. 2020AP189

¶19 The parties dispute the meaning of two separate, but

related parts of the reducing clause: (1) "the limit of

liability" and (2) "all sums . . . [p]aid because of the bodily

injury."

¶20 Shimeta and Scherr argue that "the limit of liability"

is the "each person" limit of liability. Alternatively, they

argue that "the limit of liability" is ambiguous because it does

not specify which limit applies, and the court construes

ambiguity in favor of the insured. See Danbeck, 245

Wis. 2d 186, ¶10. Acuity argues that "the limit of liability"

could refer to either the "each person" or "each accident"

limit, "depending on the facts of the case," and in this case it

is the "each accident" limit.

¶21 Regarding the phrase, "all sums . . . [p]aid because

of the bodily injury . . ." Shimeta and Scherr argue that it

means all sums paid because of the bodily injury suffered by the

individual insured making the claim. Acuity argues that the

phrase means all sums paid for all injuries suffered by any
insureds injured in a single accident.

¶22 We agree with Shimeta and Scherr's interpretations and

conclude that the reducing clause operates to reduce recovery on

an individual basis. That is, the reducing clause reduces the

"each person" limit for an insured by all payments for the

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 No. 2020AP189

insured's injury. To explain why, we will analyze the two

phrases in turn.5

1. "The Limit of Liability"

¶23 We start with the phrase "the limit of liability." On

first inspection, this phrase appears to be ambiguous. The

policy has two limits of liability——indeed, this section is

called "Limits of Liability," and paragraph 1 refers to the

"each person" and "each accident" limit separately and in turn.

But, unlike paragraph 1, the reducing clause does not specify

whether "the limit of liability" refers to the "each person"

limit or the "each accident" limit. Therefore, it is not

immediately clear what "the limit of liability" means.

¶24 Ambiguity, as we have noted, is to be construed in

favor of the insured. However, a phrase can seem ambiguous in

isolation, but become unambiguous from the perspective of a

reasonable insured when viewed within the context of a policy.

See Badger Mut. Ins. Co. v. Schmitz, 2002 WI 98, ¶49, 255

Wis. 2d 61, 647 N.W.2d 223. Here, there are four possible
interpretations of "limit of liability"——the phrase could mean:

5Although we analyze the two disputed phrases separately,
we note that the phrases are interrelated and there are only two
proposed readings of the clause as a whole. The first, favored
by Shimeta and Scherr, is that the clause reduces the "each
person" limit for an insured by all payments for the insured's
injury. The second, favored by Acuity, is that the clause
reduces the "each accident" limit by all payments made for all
insureds' injuries. Neither party argues that the "each person"
limit should be reduced by payments made on behalf of all
insureds, or that the "each accident" limit should be reduced by
payments made on behalf of just one insured.

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 No. 2020AP189

(1) both the "each person" and the "each accident" limit; (2)

either the "each person" or the "each accident" limit depending

on the facts of the case; (3) only the "each person" limit; or

(4) only the "each accident" limit. We analyze each of these

four possible interpretations and conclude that the phrase

unambiguously refers to only the "each person" limit.

¶25 We first consider whether "the limit of liability"

could mean both the "each person" and the "each accident" limit.

In doing so we immediately see that "the limit of liability"

(emphasis added) is phrased in the singular, rather than plural.

The "common and ordinary meaning" of the singular term "the

limit of liability" is one particular limit, rather than more

than one. See Danbeck, 245 Wis. 2d 186, ¶10, ("The words of an

insurance policy are given their common and ordinary meaning");

see also Filing, 217 Wis. 2d at 650 (holding that an unspecified

"limit for bodily injury liability" in an Underinsured Motorist

definition referred to the "per person" limit, rather than both

limits). From a reasonable insured's point of view, the limit
would refer to a singular limit of "each person" or "each

accident," not both.

¶26 If Acuity meant to refer to more than one limit, it

could use the word "limits," as it did in the title of the

section ("Limits of Liability"). Wisconsin Stat.

§ 632.32(5)(i), which authorizes insurers to use reducing

clauses in their UIM policies, also uses the plural form

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 No. 2020AP189

"limits."6 Because Acuity did not refer to the plural form

"limits," an insured is likely to understand that the reducing

clause is referring to only one limit.

¶27 We next consider whether "the limit of liability" in

the reducing clause refers to either the "each person" limit or

"each accident" limit depending on the facts of the case.

Acuity argues, "[w]hen there is more than one injured insured,

paragraph 1 dictates that the 'limit of liability' to be reduced

is the each accident limit." But neither paragraph 1 nor the

reducing clause actually say that the limit of liability to be

reduced changes depending on the number of injured insureds, and

Acuity has not pointed us to anywhere else in the policy that

does so.7

6 Wisconsin Stat. § 632.32(5)(i) states that "A policy may
provide that the limits under the policy for uninsured motorist
coverage or underinsured motorist coverage for bodily injury or
death resulting from any one accident shall be reduced by any of
the following that apply" (emphasis added).
7 The dissenting opinions assert that paragraph 1 of the
Limits of Liability section establishes that the "limit of
liability" is used in the singular to denote the most Acuity
will pay depending on the number of insureds and chosen
coverages. See Chief Justice Ziegler's dissent, ¶50; Justice
Hagedorn's dissent, ¶61. But paragraph 1 does not do so——as
stated previously, paragraph 1 uses "limit of liability" in the
singular to describe the each person and each accident limit
separately and in turn. Paragraph 1 simply sets out the rules
we all agree on: (1) the each person "Limit of Liability" is the
"maximum limit of liability . . . arising out of bodily injury
sustained by any one person in any one accident," and (2) the
each accident "Limit of Liability" is the "maximum limit of
liability for all damages for bodily injury resulting from any
one accident." Paragraph 1 reinforces that there are two limits
of liability and does not answer the relevant question: which
"limit of liability" is the reducing clause referring to?

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 No. 2020AP189

¶28 Given the language of the reducing clause, it is

unclear how a reasonable insured would understand that "the

limit" is different depending on the facts of the case, much

less figure out how the facts of a particular case would

determine which limit would be reduced. As we have reasoned in

previous UIM cases, "reducing clauses must be crystal clear in

the context of the whole policy. Otherwise, insureds are not

likely to understand what they are purchasing." Badger Mut.

Ins. Co., 255 Wis. 2d 61, ¶46. There may, of course, be some

variation in recovery depending on the facts of a particular

case, but if the insurer intends for the coverage rules and

definitions to vary, the insurer must make the rules governing

that variation clear in its policy language so that the insured

understands what coverage he or she is actually purchasing. See

id.

¶29 Because the term "limit of liability" is undefined in

the policy, it is given its plain and ordinary meaning.

Hirschhorn v. Auto-Owners Ins. Co., 2012 WI 20, ¶28, 338
Wis. 2d 761, 809 N.W.2d 529. The reducing clause refers to "the

limit" as opposed to "either limit" or "a limit," and it does

not indicate in any way that the limit may vary. Therefore, the

common, ordinary meaning of "the limit" is one single,

particular limit.

¶30 Having decided that a reasonable insured would

understand "the limit of liability" to refer to one particular

limit of liability, rather than both limits or either limit, the
next question is whether the phrase unambiguously refers to the
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 No. 2020AP189

"each person" limit, the "each accident" limit, or whether the

phrase is ambiguous. We conclude that a reasonable insured

would understand "the limit of liability" to unambiguously refer

to the "each person" limit.

¶31 Reading "the limit of liability" to mean the "each

person" limit harmonizes the reducing clause and the

underinsured motor vehicle definition. The policy defines an

underinsured motor vehicle as one whose "limit for bodily injury

liability is . . . less than the limit of liability for this

coverage." Both the definition and the reducing clause refer to

"the limit of liability," and both compare the insured's limit

of liability with the limit of the responsible party——the

definition compares each limit in order to determine whether

there is coverage, and the reducing clause compares each limit

in order to determine the amount of recovery. Neither section

clearly refers to the each person limit, the each accident

limit, or both. Importantly, Acuity concedes that the "limit"

in the UIM definition refers to the "each person" limit of
liability——otherwise, Curley would not be underinsured as his

policy had equal "each accident" limits and lower "each person"

limits than Acuity's policy.

¶32 An insured would reasonably expect "the limit"

referred to in both sections to mean the same limit. If these

sections referred to different limits, an insured would be

understandably confused. It makes little sense that a vehicle

could be "underinsured" when its policy limits are compared to
Acuity's UIM policy limits in the definitions section, yet
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 No. 2020AP189

treated as equally insured when those same limits are compared

in the reducing clause.8 In the absence of more specificity, an

insured would reasonably expect that when similar terms are

similarly used to compare policy limits, those terms refer to

the same limit. Therefore, we read the reducing clause's "limit

of liability" to mean the "each person" limit, consistent with

the UIM definition and consistent with what a reasonable insured

would expect.9

8 Justice Hagedorn's dissent claims we put "too much stock"
in harmonizing the underinsured motor vehicle definition with
the reducing clause. See Justice Hagedorn's dissent, ¶70.
However, it is well established that when the same or similar
language is used in a contract or insurance policy, the language
should be applied consistently. See Day v. Allstate Indem. Co.,
2011 WI 24, ¶57, 332 Wis. 2d 571, 798 N.W.2d 199 (explaining
that the insurer's proposed definition of a term is
"inconsistent with how the term is used in the context of
another policy provision"). Although both sections as a whole
may perform different functions, they both use the same phrase,
"limit of liability," in answering the same question——how do the
insured's limits of liability compare with those of the
responsible party? A reasonable insured would read these
phrases consistently.

Similarly, Chief Justice Ziegler's dissent asserts that by
interpreting the phrases consistently, we are creating a
"requirement that a vehicle qualifying as 'underinsured'
automatically means the insured receives payment." See Chief
Justice Ziegler's dissent, ¶50. We implement no such
requirement. There will still be situations in which an
underinsured vehicle may not automatically qualify the insured
for payment——when the insured's recovery is reduced by payments
received from other sources, for instance.
9 This interpretation is also consistent with Filing v.
Com. Union Midwest Ins. Co., 217 Wis. 2d 640, 579 N.W.2d 65 (Ct.
App. 1998), in which the court of appeals interpreted a UIM
policy's underinsured motor vehicle definition. Like the court
of appeals in Filing, which determined that the "limit for
bodily injury liability" referenced in the definition was the
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 No. 2020AP189

¶33 The dissenting opinions' reading of the reducing

clause as referring to the maximum amount that Acuity will pay

depending on the number of insureds and nature of the coverage

is a logical way that an insurance policy could work. However,

the language of this particular policy does not connect the

dots. At best, the dissenting opinions provide us with an

alternative reasonable interpretation of "limit of liability."

When policy language is "susceptible to more than one reasonable

interpretation," it is ambiguous. Danbeck, 245 Wis. 2d 186,

¶10. Ambiguity is resolved in favor of the insured, id., so the

result is the same regardless.

2. "All Sums Paid Because of the Bodily Injury"

¶34 We now turn to the second disputed phrase in the

reducing clause and conclude that "all sums . . . [p]aid because

of the bodily injury" means payments made because of the bodily

injury suffered by the individual insured, rather than aggregate

payments for all bodily injuries suffered by all insureds. The

clause states that the limit shall be reduced "by all sums"
"[p]aid because of the bodily injury by or on behalf of persons

or organizations who may be legally responsible." At first

glance, "by all sums" appears to be expansive, but it is

immediately qualified by the phrase "because of the bodily

injury." The policy defines "bodily injury" as "bodily injury

tortfeasor's "per person limit," we read the policy "from the
perspective of what the insured as an individual, not insureds
as a whole, could recover from the tortfeasor's liability
carrier," and similarly conclude that the reducing clause refers
to the "each person" limit. See Filing, 217 Wis. 2d at 649.

17
 No. 2020AP189

to or sickness, disease or death of a person" (emphasis added).

This definition uses the singular——referring to one person——

rather than the plural, which would encompass multiple injured

people. Although (despite the singular phrasing) "bodily

injury" does appear to be used elsewhere in the policy to refer

to injuries suffered by multiple insureds,10 the reducing clause

further uses an additional singular term, "the bodily injury"

(as opposed to, for example "bodily injuries" or "any bodily

injury"). Based on the singular word choice in the reducing

clause, we conclude that "all sums . . . [p]aid because of the

bodily injury" means all sums paid because of the bodily injury

to a singular insured.11

¶35 Like with the phrase "limit of liability," if we were

to accept that an insured could also read "the bodily injury"

broadly so that it referred to any injury sustained by all

insureds, then the phrase would be ambiguous. We construe

ambiguous language in favor of the insured, so the result here

would be the same. Danbeck, 245 Wis. 2d 186, ¶10.
¶36 When reading the reducing clause as a whole, the most

reasonable interpretation is that the "each person" limit shall

Paragraph 1 of the Limits of Liability section defines
10

the each accident limit as the "maximum limit of liability for
all damages for bodily injury resulting from any one accident."

We are not the first state high court to come to this
11

conclusion. See, e.g., Buell v. Am. Universal Ins. Co., 224
Conn. 766, 771, 621 A.2d 262 (1993) (determining that "the"
bodily injury in a reducing clause "refers only to the
claimant's bodily injury and not to the bodily injury of
others").

18
 No. 2020AP189

be reduced by payments made because of the bodily injury to the

insured making the claim. This reading does not make the "each

accident" limit superfluous. The "each accident" limit remains

a cap on what Acuity itself will ever pay for bodily injury

resulting from any one accident. Here, Acuity will pay no more

than that $500,000 limit.

III. CONCLUSION

¶37 We affirm the court of appeals because we agree that

the policy's reducing clause operates on an individual basis to

reduce the "each person" limit of liability by the payment each

insured individually received from Curley's insurance.

By the Court.—The decision of the court of appeals is

affirmed.

19
 No. 2020AP189.akz

¶38 ANNETTE KINGSLAND ZIEGLER, C.J. (dissenting). I

dissent because the majority reads Acuity's policy as no

reasonable insured would, creating coverage out of thin air that

was never agreed upon. Acuity's UIM insurance policy is simple.

Acuity agrees to pay up to a certain limit in the event its

insured is injured in an accident with a driver whose vehicle is

underinsured: up to $500,000 per person, but no more than

$500,000 for any one accident. This is one among five limits,

each listed in the "Limits of Liability" section of Acuity's

policy. The per person and per accident limits work together as

one collective limit to Acuity's liability. But this limit is

reduced "by all sums" paid by or on behalf of the legally

responsible party (the "tortfeasor") so the insured does not

receive duplicate payments. Because the insureds in this case

received from the tortfeasor a combined amount equal to Acuity's

limit, the insureds received exactly the amount they would have

gotten from Acuity if the tortfeasor had no insurance at all,
and Acuity's liability is reduced to zero. Simple as that.

¶39 But the majority complicates this simple policy.

Though Acuity's policy discusses the per person and per accident

limits collectively as one singular "limit of liability," the

majority reads them separately, ignoring the structure and

organization of the "Limits of Liability" section. The majority

then continues to overcomplicate Acuity's policy, imposing an

atextual requirement that a vehicle qualifying as "underinsured"
means the insured will receive payment under Acuity's policy in

1
 No. 2020AP189.akz

every instance. This is not how Acuity's policy operates. I

respectfully dissent.

I

¶40 "We interpret the provisions of an insurance policy

using the same principles applicable to contracts generally."

Kemper Independence Ins. Co. v. Islami, 2021 WI 53, ¶16, 397

Wis. 2d 394, 959 N.W.2d 912. "Where the language of a contract

is unambiguous and the parties' intentions can be ascertained

from the face of the contract, we give effect to the words they

employed." Steadfast Ins. Co. v. Greenwich Ins. Co., 2019 WI 6,

¶21, 385 Wis. 2d 213, 922 N.W.2d 71. "Where the language of the

policy is plain and unambiguous, we enforce it as written,

without resort to rules of construction or principles in case

law." Fontana Builders, Inc. v. Assurance Co. of Am., 2016 WI

52, ¶37, 369 Wis. 2d 495, 882 N.W.2d 398 (quoting Danbeck v. Am.

Fam. Mut. Ins. Co., 2001 WI 91, ¶10, 245 Wis. 2d 186, 629

N.W.2d 150).

¶41 We must read policy language in context, not in
isolation. "Sometimes it is necessary to look beyond a single

clause or sentence to capture the essence of an insurance

agreement." Folkman v. Quamme, 2003 WI 116, ¶21, 264

Wis. 2d 617, 665 N.W.2d 857. This may require examining a

policy's organization and structure. Gohde v. MSI Ins. Co.,

2004 WI App 69, ¶12, 272 Wis. 2d 313, 679 N.W.2d 835 ("We first

look at the organization and structure of the policy.");

Remiszewski v. Am. Fam. Ins. Co., 2004 WI App 175, ¶24, 276
Wis. 2d 167, 687 N.W.2d 809 ("We further conclude that neither

2
 No. 2020AP189.akz

the structure and organization of American Family's policy, nor

any provision therein, renders the reducing clause contextually

ambiguous.").

¶42 The entire "Limits of Liability" section from Acuity's

policy, including the reducing clause, is reproduced below:

Limits of Liability

1. The Limit of Liability shown in the Declarations
for each person for Underinsured Motorists
coverage is our maximum limit of liability for
all damages, including damages for care, loss of
services or death, arising out of bodily injury
sustained by any one person in any one accident.
Subject to this limit for each person, the Limit
of Liability shown in the Declarations for each
accident for Underinsured Motorists coverage is
our maximum limit of liability for all damages
for bodily injury resulting from any one
accident.
This is the most we will pay regardless of the
number of:

a. Insured persons;

b. Claims made;

c. Vehicles or premiums shown in the
Declarations; or

d. Vehicles involved in the accident.

2. The limit of liability shall be reduced by all
sums:

a. Paid because of the bodily injury by or on
behalf of persons or organizations who may
be legally responsible. This includes all
sums paid under Part I – Liability; and

b. Paid or payable because of the bodily injury
under any of the following or similar law:

(1) Workers' compensation law; or
3
 No. 2020AP189.akz

(2) Disability benefits law.

3. No one will be entitled to receive duplicate
payments for the same elements of loss under this
coverage and Part I – Liability, Part II –
Expenses for Medical Services or Part III –
Uninsured Motorists coverage provided by this
policy.

4. We will not make a duplicate payment under this
coverage for any element of loss for which
payment has been made by or on behalf of persons
or organizations who may be legally responsible.

5. We will not make a duplicate payment to the
extent amounts are paid or payable because of the
bodily injury under any of the following or
similar law:

a. Workers' compensation law; or

b. Disability benefits law.
Accounting for the structure and organization of the entire

"Limits of Liability" section in Acuity's UIM policy, it becomes

clear that the reducing clause reduces both the per person limit

and the per accident limit.

¶43 The section is labeled "Limits of Liability" and

contains five paragraphs. Each paragraph in some way limits
Acuity's liability to the insured. The first paragraph does so

with reference to the per person and per accident limits; the

second paragraph being the reducing clause; and the last three

limit liability for various forms of duplicate payments. Each

one of these paragraphs thus operates as a limit to Acuity's

liability, explaining why the section title uses the plural

"Limits." Each paragraph counts as one individual "limit of
liability." This also explains why the reducing clause states

4
 No. 2020AP189.akz

"[t]he limit of liability," in the singular, "shall be reduced."

It is because everything described in the first paragraph is one

singular "limit of liability" for purposes of the "Limits of

Liability" section.

¶44 Paragraph 1.'s own language confirms this reading.

Immediately after the subparagraph describing both the per

person limit and the per accident limit, there is a break

followed by the statement, "This is the most we will

pay . . . ." The break indicates that "the most [Acuity] will

pay" is everything described in the preceding

subparagraph: both the per person limit and per accident limit,

which the policy describes collectively. Together, they form

one singular "limit of liability" listed among other limits in

the "Limits of Liability" section. Because the per person limit

and per accident limit constitute one "limit of liability," the

reducing clause requires that both of them be reduced "by all

sums" "[p]aid because of the bodily injury."

II
¶45 Nowhere does the majority grapple with the "Limits of

Liability" section's structure and organization. Its analysis

never even acknowledges the fact that the "Limits of Liability"

section contains three additional paragraphs after the reducing

clause. This leads the majority to instead rely on a myopic

reading of the policy that in no way reflects how a reasonable

insured would understand it.

¶46 The majority distorts Acuity's policy to maximize the
insureds' recovery beyond what was bargained for. After

5
 No. 2020AP189.akz

incorrectly concluding that the reducing clause reduces either

the per person or the person accident limit, but not both, the

majority determines that "the limit" in "the limit of liability"

must be the same both in the reducing clause and in the

underinsured motor vehicle definition. Majority op., ¶31. The

majority reasons, "It makes little sense that a vehicle could be

'underinsured' when its policy limits are compared to Acuity's

UIM policy limits in the definitions section, yet treated as

equally insured when those same limits are compared in the

reducing clause." Id., ¶32.

¶47 The majority conflates status as "underinsured" with

the need for payment.1 Under Acuity's policy, a tortfeasor's

vehicle is "underinsured" when the associated liability

insurance policy's limit is "[l]ess than the limit of liability

for this coverage." A vehicle being "underinsured" does not

mean the UIM policyholder automatically must receive some

payment from his insurer. All it means is that the tortfeasor's

policy provides less coverage than the insured's policy.
Whether the tortfeasor's policy will ultimately pay the same

amount as an insured would receive under his own UIM policy is a

different question entirely. After a limits-to-limits

comparison, it may appear that there is some set of

circumstances where a tortfeasor's policy limit will not provide

the same amount of coverage as the insured's UIM policy. But,

as is the case here, the insured may still receive from the

Justice Hagedorn also identifies this error, a criticism
1

on which I expand here. See Justice Hagedorn's dissent, ¶¶70-
71.

6
 No. 2020AP189.akz

tortfeasor the same amount he would have received under his own

UIM policy even if the tortfeasor's policy limit is "[l]ess than

the limit of liability for" the insured's UIM coverage. The

majority rather, equates insurance with payment even where such

payment is unnecessary.2

¶48 The correct result is straightforward. Acuity's

liability is limited to $500,000 for any one insured, but no

more $500,000 for any one accident. A singular, tragic accident

caused "bodily injury" to two people insured under Acuity's

policy. Each insured's damages from their injuries exceed

$500,000. The injuries were caused by a tortfeasor whose

insurer had a liability limit of $250,000 per person and

$500,000 per accident. Thus, both of the insureds in this case

received only $250,000 because total payments reached the

tortfeasor's per accident limit. Under Acuity's policy, because

the reducing clause treats the per person and per accident

limits as one collective "limit of liability," they are both

reduced. Both insureds received a combined total of $500,000
because of a single accident, so the per accident limit is

reduced to zero, meaning there is no coverage remaining for this

accident.

2The majority adds more confusion by attempting to ease
this concern with the fact that payment may still be unnecessary
"when the insured's recovery is reduced by payments received
from other sources." Majority op., ¶32 n.8. Following the
majority's logic, no payment is necessary when the insured
receives a full recovery from the tortfeasor plus "other
sources," but payment is somehow required when the insured
receives the same amount from the tortfeasor alone. Again, no
reasonable insured would understand Acuity's policy to operate
this way.

7
 No. 2020AP189.akz

¶49 The fact that the tortfeasor's per person limit caused

his vehicle to qualify as "underinsured" under Acuity's policy

does not change this result. The vehicle was underinsured

because, due to Acuity's limits-to-limits comparison approach,

it was possible that the insureds might not receive an amount

equivalent to the amount they would have received under Acuity's

UIM policy. If one insured suffered more than $250,000 in

damages and the other suffered less, this would mean that the

insured with more damages would recover less from the tortfeasor

than he would from Acuity under its UIM policy. In this

situation, the tortfeasor's vehicle would be underinsured, and

payment by Acuity would be necessary. It is possible that the

tortfeasor's liability insurance would not have paid the

insureds the same amount the insureds would receive under

Acuity's policy, but that is not the case here, so payment by

Acuity is not necessary. There is no need to read in confusion

to reach this sensible result.

III
¶50 Acuity's policy is simple and straightforward. The

per accident and per person limits operate together as one

collective "limit of liability" to establish the most Acuity

might pay. Because the reducing clause reduces "the limit of

liability" "by all sums" paid to the insureds by the tortfeasor,

each component part of that collective limit likewise reduces.

In this case, the insureds received from the tortfeasor the

exact amount they would have under Acuity's policy, meaning
Acuity has no remaining liability. But the majority eschews

8
 No. 2020AP189.akz

this simple reading in favor of a complex one that no reasonable

insured would understand. It also unwittingly creates a

requirement that a vehicle qualifying as "underinsured"

automatically means the insured receives payment. This is

simply not how Acuity's policy operates.

¶51 For the foregoing reasons, I respectfully dissent.

¶52 I am authorized to state that Justice REBECCA GRASSL

BRADLEY joins this dissent.

9
 No. 2020AP189.bh

¶53 BRIAN HAGEDORN, J. (dissenting). Before his

unfortunate passing, Michael Shimeta purchased underinsured

motorist (UIM) coverage from Acuity. In that policy, Acuity

agreed to pay claims up to a maximum limit of liability:

$500,000 per person, but no more than $500,000 total per

accident. The operative language and design of these policies

is standard. And basic logic tells us that the per accident

limit will reduce the amount individuals can recover in multi-

person accidents. In practice, this means that the recovery for

any individual under Shimeta's policy with Acuity may not be the

full $500,000 if multiple insureds are injured. Everyone agrees

that this is how the policy works.

¶54 The UIM policy also has a standard reducing clause.

The whole concept of this kind of UIM coverage combined with a

reducing clause is for an insured to obtain "a predetermined,

fixed level of UIM recovery that is arrived at by combining

payments" "from all legally responsible sources." Welin v. Am.

Fam. Mut. Ins. Co., 2006 WI 81, ¶49-50, 292 Wis. 2d 73, 717

N.W.2d 690 (quoting another source). In other words, the

insured has agreed to be paid a specific amount——first from

other legally responsible parties, with any remaining amounts

due coming from Acuity. So the reducing clause functions

consistent with the rest of the policy.

¶55 But the majority somehow finds that payments from the

tortfeasor's insurer should count as a reduction against only
the per person limit. In so doing, the majority creates

complexity where none is found, leading it to misread the
1
 No. 2020AP189.bh

policy. In the end, the insureds here do not receive a fixed

level of UIM recovery arrived at by combining payments from all

legally responsible sources. Instead, they receive double what

Shimeta's policy promises as a total payout for any one

accident. This may be good for Shimeta's estate and his injured

passenger, but it is not what the policy provides. I

respectfully dissent.1

I. THE POLICY

¶56 We begin with the policy language.2 The declarations

page of the policy summarizes the coverage Shimeta purchased.

Multiple coverages are listed in the standard way, as providing

a certain payout for "Each Person" and a second amount for "Each

Occurrence" or "Each Accident." For example, Shimeta purchased

uninsured motorist coverage for bodily injury in the amount of

$500,000 per person and $500,000 per accident. And as relevant

here, the UIM coverage is "$500,000 Each Person" and "$500,000

Each Accident."

1 I understand Chief Justice Ziegler's dissent to make
largely the same arguments I present here, and therefore I
substantially agree with it.
2 Because insurance policies are contracts, our primary goal
in interpreting them is "to give effect to the intentions of the
parties." Wadzinski v. Auto-Owners Ins. Co., 2012 WI 75, ¶11,
342 Wis. 2d 311, 818 N.W.2d 819. "The parties' intentions are
presumed to be expressed in the language of the policy." Id.
We therefore begin the inquiry with the policy's language. See,
e.g., Secura Ins. v. Lyme St. Croix Forest Co., LLC, 2018
WI 103, ¶17, 384 Wis. 2d 282, 918 N.W.2d 885. "Generally, we
interpret a policy's terms as they would be understood from the
perspective of a reasonable person in the position of the
insured." Id.

2
 No. 2020AP189.bh

¶57 The relevant policy language in the UIM endorsement

comes under the bolded3 heading "Limits of Liability" and

provides in relevant part:

1. The Limit of Liability shown in the Declarations
for each person for Underinsured Motorists coverage is
our maximum limit of liability for all damages,
including damages for care, loss of service or death,
arising out of bodily injury sustained by any one
person in any one accident. Subject to this limit for
each person, the Limit of Liability shown in the
Declarations for each accident for Underinsured
Motorists coverage is our maximum limit of liability
for all damages for bodily injury resulting from any
one accident.

This is the most we will pay regardless of the number
of:

a. Insured persons;

b. Claims made;

c. Vehicles or premiums shown in the
Declarations; or

d. Vehicles involved in the accident.

2. The limit of liability shall be reduced by all
sums:

a. Paid because of the bodily injury by or on
behalf of persons or organizations who may be
legally responsible. This includes all sums paid
under Part I – Liability; and

b. Paid or payable because of the bodily injury
under any of the following or similar law:

(1) Workers' compensation law; or

(2) Disability benefits law.

3 Following our style guide, bolded terms in the policy are
underlined in this dissent.

3
 No. 2020AP189.bh

¶58 Several observations are in order. This entire

section uses the phrase "limit of liability" throughout.

Paragraph 1 uses that phrase four times, and refers back to the

amount itemized in the declarations. The policy explains that

the most an insurer will pay, called the "maximum limit of

liability," will turn on the policy coverages purchased and the

number of insureds entitled to payment for a single accident.

One limit is governed by the "each person" coverage amount

purchased. And the "each accident" limit is the maximum limit

Acuity will pay for bodily injury "resulting from any one

accident." This means that when two or more persons are injured

in one accident, the "each accident" limit could, depending on

the policy purchased, operate as a cap that limits the recovery

for any one insured. And if that wasn't plain enough——because

that pattern is how this whole policy operates——the paragraph

doubles down and declares that no matter how many insured

persons are injured, claims are made, or vehicles are involved

or covered, the per accident limit is "the most we will pay
regardless."

¶59 This UIM coverage, then, works together as a seamless,

integrated, perfectly understandable whole. If this were a

$100,000 per person, $300,000 per accident policy, for example,

the per person limit might be the more commonly applicable

limit, and the per accident limit reached less often. But this

is a $500,000 per person and $500,000 per accident policy. So

here, the per accident limit may come into play more often than
a policy with a different mix of coverages. While the coverage

4
 No. 2020AP189.bh

purchased and nature of an accident will dictate how the math

works, the policy will always have a definitive maximum limit of

liability——a dollar figure that serves as a cap on Acuity's

liability. This limit need not be one or the other. For

example, in this $500,000 per person and per accident policy,

where one insured is injured in the same accident, the "limit of

liability" is $500,000. There's no need to choose between the

two limits. The point is, there will always be a fixed dollar

amount that is the most Acuity will pay, however it is

calculated.

¶60 This can be seen in a straightforward way in the same

page of the policy as the "Limits of Liability" section. The

UIM policy provides that other applicable insurance coverage

could likewise reduce the amount owed. Under paragraph 3 of the

"Other Insurance" section, the policy says its obligation to pay

primary or excess coverage will extend to "our limit of

liability" under the policy. In other words, the policy

understands there will always be a fixed dollar "limit"——phrased
in the singular——that will be owed to the insured. Whether that

limit will be established by the per person limit or the per

accident limit will again depend on the coverages purchased and

the number of insureds that are injured in any one accident.

¶61 Turning to the reducing clause in paragraph 2 of the

"Limits of Liability" section, it too employs the same language

as paragraph 1. It refers to the "limit of liability." And we

already know what that phrase means: it is the most Acuity will
pay, whether determined by the per person or per accident limit

5
 No. 2020AP189.bh

(or both if identical), depending on the chosen coverages and

number of injured persons. And the reducing clause says that

this limit "shall be reduced by all sums" paid by someone or

some entity "who may be legally responsible"——like the

tortfeasor who caused the accident in this case.4

¶62 Applying the policy is straightforward. The reducing

clause operates to reduce Acuity's liability under its policy,

whatever that limit might be. In this case, the tortfeasor's

insurer paid $500,000 in combined payments to Shimeta's estate

and the passenger in his car; both are insureds under the policy

seeking coverage for bodily injury resulting from one accident.

And since Acuity agreed to pay no more than $500,000 for any one

accident under the terms of this particular policy, Acuity's

"limit of liability" is reduced per the reducing clause to zero.

¶63 A reasonable insured would not be confused by any of

this. It is exactly how this UIM policy is designed to work.

Shimeta bargained and paid for this precise level of coverage.

Once again, the whole point of this type of "limits-to-limits"
UIM policy is to "put the insured in the same position he or she

would have occupied had the tortfeasor's liability limits been

the same as the UIM limits purchased by the insured."5 Welin,

The policy further says that it shall be reduced by
4

anything paid or payable under workers compensation law,
disability benefits law, or any similar law.

If the tortfeasor in this case had the liability limits
5

Shimeta purchased——$500,000 per person and $500,000 per
accident——then Shimeta and his passenger would have received the
same thing they were given here: $500,000 total. That's why
Shimeta's estate already received exactly what he originally
bargained for.

6
 No. 2020AP189.bh

292 Wis. 2d 73, ¶26. The policy self-consciously offers "a

predetermined, fixed level of UIM recovery that is arrived at by

combining payments from all sources." Id., ¶49. The reducing

clause ensures that the insureds receive only the fixed sum they

bargained for. Nothing more, nothing less. It does this by

promising to pay up to the limit of liability, minus payments

from other responsible parties or under other relevant laws

providing compensation.6

II. THE MAJORITY'S MISTAKES

¶64 The majority, however, misses all of this and designs

a more generous insurance policy than the one Shimeta bargained

for. The majority begins its analysis of the reducing clause by

rightly focusing on the phrase "limit of liability." Majority

op., ¶23. But instead of interpreting that phrase consistent

with the rest of the policy, the majority proclaims itself

stumped. So it hypothesizes four possibilities for what it

could mean. The majority reasons "Limit of liability" could
refer to: "(1) both the 'each person' and the 'each accident'

limit; (2) either the 'each person' or the 'each accident' limit

depending on the facts of the case; (3) only the 'each person'

limit; or (4) only the 'each accident' limit." Id., ¶24.

In fact, the policy provides that Acuity "will not make a
6

duplicate payment under this coverage for any element of loss
for which payment has been made by or on behalf of
persons . . . who may be legally responsible." The majority's
conclusion results in exactly the type of duplicate payment the
policy prohibits.

7
 No. 2020AP189.bh

¶65 The majority first rejects the idea that both limits

are referred to because the reducing clause uses the singular

"limit of liability." Id., ¶¶25-26. Moving on to option two,

the majority explains that it can't be right either because

"neither paragraph 1 nor the reducing clause actually say that

the limit of liability to be reduced changes depending on the

number of injured insureds." Id., ¶27. Except that it does.

Paragraph 1 immediately preceding the reducing clause uses

"limit of liability" in the singular for both, and explicitly

says that the "maximum limit of liability for all

damages . . . resulting from any one accident" supersedes the

per person limit. The per accident limit is the maximum Acuity

"will pay regardless of the number of . . . Insured persons" who

are injured and entitled to recovery.

¶66 The majority then postulates a reasonable insured is

simply not going to understand which limit applies. Majority

op., ¶28. I suppose it's true that few insureds truly grasp how

their policies work. Insurance policies tend not to be evening
reading material for most people. But this isn't rocket

science, and a reasonable insured wouldn't be confused. Shimeta

bargained for a maximum recovery defined as $500,000 per person,

and at most, $500,000 per accident regardless of the number of

injured persons. The entire policy issued to Shimeta, including

standard liability insurance, uninsured motorist coverage, and

the UIM endorsement contain the same structure. Under the

majority's logic, reasonable people just can't understand what
it means for a policy to have a maximum dollar limit (the "limit

8
 No. 2020AP189.bh

of liability") that can vary depending on coverages purchased

and the facts of a case.

¶67 The majority compounds its errors by positing that

since the "limit of liability" in the reducing clause is

singular, it can only refer to "one particular limit of

liability, rather than both limits or either limit." Id., ¶30.

It then concludes we must choose the "each person" limit because

that harmonizes the definition with the definition of

underinsured motor vehicles. Id., ¶31. Since caselaw, rather

than a definition in the policy, establishes that a vehicle is

underinsured, the majority concludes we must read it the same

way. Id., ¶32. Finally, the majority misconstrues the policy

further by saying that because the reducing clause uses the

phrase "the bodily injury" in the singular, it should be

understood as reducing payments only for a singular insured's

per person coverage. Any other proposed reading of "limit of

liability" or "the bodily injury" would be ambiguous, the

majority reasons, and therefore read in favor of the insured.
Id., ¶¶33, 35. None of this correct.

¶68 First, neither basic grammar nor logic dictate that

because "limit of liability" is used in the singular, only one

of the two possible limits must be referred to. Rather, the

policy is consistent that there will always be a maximum dollar

limit to Acuity's liability depending on the coverages purchased

for per person and per accident, and depending on the facts of

the case.

9
 No. 2020AP189.bh

¶69 Second, the majority's emphasis on "the bodily injury"

is likewise atextual. The policy always uses "bodily injury" in

the singular and bolded. This is because "bodily injury" is a

defined term in the policy referring to a type of damage that

triggers liability and coverage. The policy does the same thing

with "property damage"——another type of damage that may be

covered in the policy and is separately defined. Both here and

throughout the rest of the policy, even where two or more

insured persons are injured, the phrase "bodily injury" is

always bolded and used in the singular. The majority's emphasis

on the definite article "the" does not transform this standard

definition-invoking language into a clue that the reducing

clause is meant to operate in a way totally divorced from the

entire operation of this fixed coverage UIM policy.

¶70 Finally, the majority puts too much stock in the fact

that whether underinsurance is triggered looks only to the per

person limit. Acuity agrees based on a court of appeals

decision that the tortfeasor's limit should be compared with the
policy's per person limit for purposes of answering the initial

question of whether the policy is triggered. See Filing v. Com.

Union Midwest Ins. Co., 217 Wis. 2d 640, 649-50, 579 N.W.2d 65

(Ct. App. 1998) (holding that the tortfeasor's liability limits

should be compared with the per person limits under the policy).

But that means little here. The reasoning of the court of

appeals in Filing rested less on a careful interpretation of the

language than on its sense that the insured expected potential
coverage apart from how many are injured in an accident. Id.

10
 No. 2020AP189.bh

It also discussed the many "absurd results" that would be

occasioned by interpreting the policy the other way. Id. at 647

& n.3. While I am not suggesting the outcome was incorrect,

Filing has little to say analytically about the question

presented here.

¶71 Whether Acuity must pay and in what amount is a

different question altogether from whether UIM coverage is

triggered in the first instance. To determine if any portion of

the coverage is reduced, we must look to the relevant policy

language. And as we've explained, paragraph 1——directly before

the reducing clause in paragraph 2——specifically references both

limits. "[A] reasonable insured would understand that the

reducing clause in [paragraph 2] of the Limit of Liability

section of the UIM endorsement qualifies the insurer's

obligation to pay the maximum limit of liability as described

in . . . [paragraph 1]." Ruenger v. Soodsma, 2005 WI App 79,

¶23, 281 Wis. 2d 228, 695 N.W.2d 840. Thus, whether UIM

coverage is triggered in the first instance isn't doing the
analytical work the majority thinks it is.

III. CONCLUSION

¶72 While insurers can draft policies moving forward that

satisfy the majority's perplexity, the language the majority

misinterprets today will impact current policies across the

state. The majority misses the mark by trying to figure out

which limit the phrase "limit of liability" in the reducing
clause applies to. The answer is apparent: The policy

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consistently describes itself as having one maximum dollar

limit, a "limit of liability," which could be triggered by

either of the two limits depending on the coverages purchased

and the facts of the case. And the reducing clause provides

that Acuity's liability limit must be reduced when other

responsible parties provide compensation.

¶73 Here, Shimeta purchased UIM coverage in the amount of

$500,000 per person and $500,000 per accident. An unfortunate

accident occurred, leaving Shimeta dead and his passenger

injured, both insureds under the policy. Collectively,

Shimeta's estate and his injured passenger received $500,000

from the tortfeasor's insurance. The reducing clause requires

that this $500,000 be deducted from Acuity's limit of liability,

which under these facts and this coverage is $500,000 for this

one accident. Therefore, the predetermined, fixed sum Shimeta

bargained for was paid out, and Acuity has no further liability

under the policy. I respectfully dissent.

¶74 I am authorized to state that Justice REBECCA GRASSL
BRADLEY joins this dissent.

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