After litigation ensued, a Wisconsin trial court, applying the pertinent terms in the respective “other insurance” provisions to the facts, ruled that Wadena and American Family had to provide pro rata uninsured motorist coverage for Mr. Girard's injuries and other damages caused by the uninsured motorist.

Wadena appealed, arguing that applying a plain language interpretation of the “other insurance” provisions in the two policies led to one conclusion: that Wadena's uninsured motorist coverage was excess to American Family's uninsured motorist coverage.

The American Family Policy

The “other insurance” provision in American Family's policy provided:

If there is other similar insurance on a loss covered by this Part, we will pay our share according to this policy's proportion of the total limits of all similar insurance. But, any insurance provided under this Part for an insured person while occupying a vehicle you do not own is excess over any other similar insurance.

(Emphasis added.)

The American Family policy also provided:

PART III—UNINSURED MOTORIST COVERAGE

….

ADDITIONAL DEFINITIONS USED IN THIS PART ONLY

1. Insured person means:

….

b. Anyone else occupying your insured car. 

The policy defined:

you

as:

the policyholder named in the declarations 

The “other insurance” provision in Wadena's uninsured motorist coverage section provided pro rata coverage except where the policy was excess. In particular, it provided:

However, any insurance we provide with respect to a vehicle you do not own, including any vehicle while used as a temporary substitute for “your covered auto”, shall be excess over any other collectible insurance similar to the insurance provided by this endorsement.

(Emphasis added.) 

The Wisconsin Appellate Court's Decision

The appellate court reversed, ruling that Wadena provided excess uninsured motorist coverage, that American Family provided pro rata uninsured motorist coverage, and that, consequently, American Family was the primary uninsured motorist coverage insurer.

In its decision, the appellate court explained that, under the policy that American Family issued to Mr. Cattau, Mr. Girard was an “insured person” for purposes of uninsured motorist coverage and Mr. Cattau was the policyholder named in the policy's declarations page. It said that when “Girard” was inserted in place of the phrase “insured person” and “Cattau” replaced the word “you,” the excess clause read:

But, any insurance provided under this Part for an insured person [Girard] while occupying a vehicle you [Cattau] do not own is excess over any other similar insurance.

The appellate court reasoned that American Family's excess clause did not apply to Mr. Girard and the provision was excess only if Mr. Girard was “occupying a vehicle” that Mr. Cattau did not own – but he was occupying a vehicle that Mr. Cattau did own.

Thus, the appellate court ruled, the pro rata sentence of the “other insurance” provision – that is, the first sentence of the “other insurance” provision – applied, with the result that Mr. Cattau's American Family policy provided primary uninsured motorist coverage to Mr. Girard.

The appellate court then ruled that Wadena's uninsured motorist coverage was excess. It pointed out that Mr. Girard was driving a vehicle he did not own and that American Family provided “other collectible insurance” that was similar to the uninsured motorist coverage provided by Wadena. Therefore, the appellate court said, the two key elements of the excess clause in Wadena's “other insurance” provision were met, and its uninsured motorist coverage was excess.

The appellate court concluded by rejecting American Family's argument that a plain language interpretation led to an absurd result because “if Girard was operating a vehicle Cattau did not own,” then “there would be no coverage under American Family's policy.” It stated:

Girard was operating a vehicle that Cattau did own, so there is coverage under American Family's policy. Therefore, each insurer would be liable in the absence of the other policy, which is what makes the excess coverage clauses relevant…. This is not an absurdity. This is what the parties bargained for under the plain language of the contracts.

The case is Girard v. American Family Mutual Ins. Co., No. 2015AP1509 (Wisc. Ct.App. July 21, 2016).