Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

LIR Investments LLC v. Stokelbusch

Court of Appeals of Wisconsin, District I

August 15, 2017

LIR Investments LLC, Plaintiff,
v.
Steven Stokelbusch, Stokelbusch Insurance Agency, Inc. and Westport Insurance Corporation, Defendants-Third-Party Plaintiffs-Respondents,
v.
ABC Insurance Company, Defendant, Wisconsin Mutual Insurance Co., Third-Party Defendant-Appellant.

         APPEAL from an order of the circuit court for Milwaukee County No. 2014CV10692, JOHN J. DIMOTTO, Judge. Affirmed.

          Before Kessler, Brash and Dugan, JJ.

          KESSLER, J.

         ¶1 Wisconsin Mutual Insurance Company appeals an order granting declaratory judgment to Steven Stokelbusch, Stokelbusch Insurance Agency, Inc., and Westport Insurance Corporation (collectively, "Stokelbusch"). We affirm.

         BACKGROUND

         ¶2 This action arises out of a fire loss that occurred in April 2014 at a rental property owned by LIR Investments, LLC. The sole issue on appeal is whether a policy issued by Wisconsin Mutual to LIR on October 23, 2013, and cancelled by Wisconsin Mutual on December 30, 2013, constituted a new policy or a renewed policy, thereby affecting the date at which Wisconsin Mutual could terminate coverage under WIS. STAT. §631.36 (2015-16).[1] WISCONSIN STAT. § 631.36(2) prohibits an insurance company from cancelling a policy midterm absent specifically identified reasons; however, the statute permits an insurance company to cancel a new policy within the first sixty days of issuance. The following facts are taken from the record.

         ¶3 On June 23, 2010, Wisconsin Mutual issued a Business Owners insurance policy to cover residential rental property owned by LIR. The policy- Policy BIZ 4343-was titled "New Policy." The policy term was June 23, 2010, through June 23, 2011. On May 24, 2011, thirty days prior to the policy's expiration, Wisconsin Mutual sent LIR a "Policy Renewal Premium Notice, " indicating that a renewed policy would run from June 23, 2011, through June 23, 2012, and that a payment was due on June 23, 2011, in order to continue coverage. LIR did not make the requisite payment by June 23, 2011. On June 24, 2011, one day after the payment was due, Wisconsin Mutual issued a "Cancellation Notice, " stating that Wisconsin Mutual did not receive payment from LIR and that the policy would be terminated "unless payment is received according to [the] non-payment clause as stated on the back of this form and on the back of your original renewal form." (Capitalization omitted.) LIR did not pay the requisite premium. Accordingly, the policy was cancelled.

         ¶4 LIR and Wisconsin Mutual then engaged in a long series of policy cancellations and reinstatements. According to Wisconsin Mutual's records, LIR's policy was cancelled for nonpayment on June 23, 2011, April 13, 2012, July 30, 2012, November 16, 2012, June 3, 2013 and September 27, 2013. After each cancellation, Wisconsin Mutual reissued LIR's policy. The reissued policies contained the same policy number and a new declaration sheet listing forms and endorsements already in LIR's possession as being a part of the policy. Wisconsin Mutual issued its final policy to LIR-the policy at issue-on October 23, 2013. The Declaration Sheet states, in bold capital letters, "POLICY RE-ISSUED." On December 18, 2013, Wisconsin Mutual sent LIR a notice indicating that coverage would terminate on December 30, 2013, due to LIR's history of nonpayment. LIR received a premium refund as a result of the cancellation.

         ¶5 In April 2014, a fire occurred at an LIR-owned rental property in West Allis. LIR filed suit against its insurance agent, Stokelbusch Insurance Agency, alleging that Stokelbusch failed to honor LIR's request to secure insurance coverage on the property following the cancellation of the Wisconsin Mutual Policy. Stokelbusch filed a third-party complaint for declaratory judgment against LIR, alleging that Policy BIZ 4343, which was first issued on June 23, 2010, was improperly terminated midterm contrary to WIS. STAT. § 631.36. The complaint asked the circuit court to declare Wisconsin Mutual's cancellation of LIR's policy an unlawful midterm cancellation and to find that Wisconsin Mutual's policy was in effect at the time of the fire. Stokelbusch moved for declaratory judgment on October 15, 2015.

         ¶6 At a hearing on the motion, Stokelbusch noted that LIR only submitted one application for insurance, resulting in the June 23, 2010 policy. Stokelbusch also stated that LIR's and Wisconsin Mutual's relationship, though tumultuous, had been in effect for over three years. During that period, the policy number remained the same and each document issued following the June 23, 2010 policy was labeled a "reissued policy." Only the June 23, 2010 policy "denominated itself as a 'new policy.'" Thus, Stokelbusch argued, the October 23, 2013 policy was a renewed policy not subject to cancellation within sixty days of issuance. Stokelbusch also argued that Wisconsin Mutual "did not do anything which put [LIR] on reasonable notice that ... this off-and-on insurance relationship is meaningless and this is a brand new relationship ... which would allow Wisconsin Mutual 60 days to cancel the policy, and then to cancel the policy within ten days after written notice." In short, Stokelbusch argued that Wisconsin Mutual engaged in "an illegal midterm cancellation."

         ¶7 Wisconsin Mutual argued that the policy at issue was a new policy, not a renewed policy. The heart of Wisconsin Mutual's argument was that each time it cancelled LIR's policy, the subsequently issued policy was always a "new" policy. Wisconsin Mutual argued that it did not issue LIR new policy numbers or new documents in accordance with its own internal procedures for keeping track of the company's history with their insureds. Accordingly, Wisconsin Mutual argued that the October 23, 2013 policy was new and in effect for less than sixty days when it was cancelled, thereby rendering the cancellation lawful under Wis.Stat. §631.36.

         ¶8 The circuit court granted Stokelbusch's motion, finding that Wisconsin Mutual's "multiple reissuances flow back to the original policy and ... [are] the equivalent of renewals, not institutions of new policies." The circuit court found that in the context of WIS. STAT. § 631.36(2)(c), Wisconsin Mutual's use of the term "reissued" on the October 23, 2013 policy was ambiguous because the term could reasonably be interpreted as a "renewed" policy. Accordingly, the court found "that the cancellation [of the October 23, 2013 policy] was not authorized because it wasn't a cancellation of a new policy. It was an improper cancellation of a policy that had been renewed. So I do find the most recently reissued policy provided coverage for October 23, 2013, to October 23, 2014, was not a new policy within the meaning of [WIS. STAT.] § 631.36(2)(c)."

         ¶9 This appeal follows. Additional facts will be discussed as ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.