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PUBLISHED OPINION
Case No.:                          95-2423
                                                                                †Petition to review filed
Complete Title
of Case:
WILLIAM HULL,
                                   Plaintiff-Respondent,
v.
HERITAGE MUTUAL
INSURANCE COMPANY,
Defendant-Appellant,†
PAUL SCHWAI, MILWAUKEE
MUTUAL INSURANCE COMPANY,
WHEEL AND TIRE SHOP, INC.,
ABC INSURANCE COMPANY,
AMERICAN RACING EQUIPMENT, INC.,
XYZ INSURANCE COMPANY and
BORDEN, INC.,
Defendants.
Submitted on Briefs:               June  13,  1996
COURT                              COURT OF APPEALS OF WISCONSIN
Opinion Released:                  July  24,  1996
Opinion Filed:                     July  24,  1996
Source of APPEAL                   Appeal from a judgment
Full Name JUDGE                    COURT:                                       Circuit
Lower Court.                       COUNTY:                                      Washington
(If "Special",                     JUDGE: LEO F. SCHLAEFER
so indicate)
JUDGES:                            Anderson, P.J., Nettesheim and Snyder, JJ.




Concurred:
Dissented:
Appellant
ATTORNEYSOn  behalf  of  the  defendant-appellant,  the  cause  was
submitted  on  the  briefs  of  Arthur  P.  Simpson  of
Simpson & Deardorff of Milwaukee.
Respondent
ATTORNEYSOn  behalf  of  the  plaintiff-respondent,  the  cause  was
submitted  on  the  brief  of  Joseph  G.  Doherty  of
Bunk, Doherty & Griffin, S.C. of West Bend.




COURT OF APPEALS
DECISION
DATED AND RELEASED
NOTICE
July 24, 1996
A party may file with the Supreme Court                      This opinion is subject to further editing.
a petition to review an adverse decision                     If  published,  the  official  version  will
by the Court of Appeals.  See § 808.10 and                   appear  in  the  bound  volume  of  the
RULE 809.62, STATS.                                          Official Reports.
No.   95-2423
STATE OF WISCONSIN                                           IN COURT OF APPEALS
WILLIAM HULL,
Plaintiff-Respondent,
v.
HERITAGE MUTUAL
INSURANCE COMPANY,
Defendant-Appellant,
PAUL SCHWAI, MILWAUKEE
MUTUAL INSURANCE COMPANY,
WHEEL AND TIRE SHOP, INC.,
ABC INSURANCE COMPANY,
AMERICAN RACING EQUIPMENT, INC.,
XYZ INSURANCE COMPANY and
BORDEN, INC.,
Defendants.
APPEAL from a judgment of the circuit court for Washington
County:  LEO F. SCHLAEFER, Judge.  Affirmed.




No. 95-2423
Before Anderson, P.J., Nettesheim and Snyder, JJ.
SNYDER, J.                                                                                            Heritage Mutual Insurance Company appeals
from a judgment which ordered the company to pay William Hull $50,000 in
underinsured motorist  (UIM) benefits for injuries Hull sustained when the
vehicle he was driving lost a rear wheel and overturned.   Heritage contends
that Hull voided his claim for UIM benefits when he settled with American
Racing Equipment, Inc. (the manufacturer of the wheel) and Wheel and Tire
Shop, Inc. (the retailer) without notifying Heritage.   Because we conclude that
under its UIM policy language Heritage has no subrogation rights against any
potential tortfeasor who is not also an underinsured motorist, we affirm.
Hull was driving a vehicle owned by Paul Schwai when a rear
wheel came off and the vehicle overturned, injuring Hull.  Hull initially asserted
claims of negligence against Schwai, alleging that the vehicle was negligently
maintained; against Wheel and Tire for failure to  “warn and instruct in the
proper securing of the lug nuts;” and against American Racing for its failure to
warn and instruct.  Heritage was included in the action as Hull's UIM carrier.
Hull  ultimately  obtained  Pierringer  releases  from  American
Racing and Wheel and Tire.1  See Pierringer v. Hoger, 21 Wis.2d 182, 124 N.W.2d
106 (1963).  The parties dispute whether Heritage was notified of the settlements
before Hull executed the releases.2    Heritage brought a summary judgment
1   Hull executed the release of American Racing in exchange for a $2000 settlement.  Wheel and
Tire settled for $2500.
2                                                                                                     Heritage contends that the release of American Racing occurred without the insurance
company receiving prior notification; Hull claims that Heritage was notified by letter prior to his
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No. 95-2423
motion, claiming that Hull's actions were contrary to the notice requirement of
Vogt v. Schroeder, 129 Wis.2d 3, 383 N.W.2d 876 (1986), and failed to protect the
company's subrogation rights.    As a consequence, Heritage refused to pay
Hull's UIM benefits.  Summary judgment was denied.
After a trial, judgment was entered against Heritage, requiring the
company to pay Hull the $50,000 limit of his UIM coverage.3   Heritage appeals,
renewing  its  argument  that  Hull's  actions  contravened  the  subrogation
language in its policy and violated the notice requirement of Vogt.
The issue presented concerns the respective rights of an insured
and  insurer  under  a  UIM  provision  when  the  insured  has  settled  with  a
potential tortfeasor without involving the insurer.   This is a question of law
which we decide without deference to the lower court.   See Schulte v. Frazin,
176  Wis.2d                                                                                              622,   628,   500  N.W.2d   305,   307   (1993).   The  application  of
unambiguous terms in an insurance contract to established facts presents a
question of law which this court reviews de novo.   Grotelueschen v. American
Family Mut. Ins. Co., 171 Wis.2d 437, 447, 492 N.W.2d 131, 134 (1992).
It  is  of  primary  importance  that  an  insurance  contract  be
interpreted to mean what a reasonable person in the position of the insured
would have understood it to mean.  Sprangers v. Greatway Ins. Co., 182 Wis.2d
(..continued)
execution of the release, but that it did not respond.  The timing of the release of Wheel and Tire is
also contested.
3   In a stipulation prior to trial, Heritage conceded that “the damages of William Hull exceed the
applicable amount of coverage from any and all sources.”
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No. 95-2423
521, 536, 514 N.W.2d 1, 6 (1994).   This requires that policy language be given its
common and ordinary meaning.   Dailey v. Secura Ins. Co., 164 Wis.2d 624, 628,
476 N.W.2d 299, 300 (Ct. App. 1991).   When terms of a policy are plain on their
face, the policy must not be rewritten by construction.   Schaefer v. General
Casualty Co., 175 Wis.2d 80, 84, 498 N.W.2d 855, 856 (Ct. App. 1993).
The policy of insurance issued to Hull included a section entitled
“UNDERINSURED MOTORISTS.”  The provisions of this section include:
We 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  caused  by  accident  and  result  from  the
ownership, maintenance or use of the underinsured
motor vehicle.
We will pay under this coverage only after the limits of liability
under any applicable bodily injury liability policies
or  bonds  have  been  exhausted  by  payment  of
judgments or settlements.
The plain language of this section states that the policy will pay
damages which the insured is legally entitled to recover from the owner or operator of
an underinsured motor vehicle.   The policy further states that this coverage will be
paid only after the limits of liability under any applicable bodily injury liability policies
have been exhausted.    Looking to the plain meaning of the contract, UIM
benefits cover the insured when the liability policy of the owner or operator of a
motor vehicle are not adequate.    The supreme court recognized this as the
purpose of UIM insurance when it quoted with approval,  “[U]nderinsured
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No. 95-2423
motorist coverage protects against the inadequately insured motorist.”   Vogt,
129 Wis.2d at 8 n.2, 383 N.W.2d at 878 (quoted source omitted).
American  Racing,  a  potential  tortfeasor,  is  not  the  “owner  or
operator of an underinsured motor vehicle.”   Because Hull's policy states that
Heritage will pay damages that its insured is legally entitled to recover from an
owner or operator of a motor vehicle, we conclude that Hull's settlement with
American  Racing  has  no  effect  on  his  allowable  recovery  under  his  UIM
coverage.  The policy plainly describes the yardstick for measuring the payment
of UIM benefits:   damages the insured is entitled to recover from an owner or
operator of a motor vehicle.
Heritage   maintains   that   this   determination   ignores   the
subrogation language included in its policy and also the clear mandate of the
Vogt notice requirement.  We address each argument in turn.
Heritage claims that the following section of its policy, entitled
“GENERAL PROVISIONS,” supports the contention that Hull's actions voided
his right to UIM benefits:
6.  OUR RECOVERY RIGHTS
In the event of a payment under this policy, we are entitled to all
the rights of recovery that a person or organization to
whom payment was made has against another.   That
person or organization must sign and deliver to us
any  legal  papers  relating  to  that  recovery,  do
whatever else is necessary to help us exercise those
rights and  do nothing after  loss  to harm  our  rights.
[Emphasis added.]
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No. 95-2423
Interpretation of an insurance contract is controlled by the same
principles as contract construction.  Sprangers, 182 Wis.2d at 536, 514 N.W.2d at
6.   Any ambiguity in exceptions or exclusions is to be strictly construed against
the insurer; reasonable doubts about uncertain language should be resolved
against the insurer.   Id.   The intended purpose of a particular type of coverage
should be considered when an insurance policy is construed.   See Vidmar v.
American Family Mut. Ins. Co., 104 Wis.2d 360, 370, 312 N.W.2d 129, 133 (1981),
overruled on other grounds by Welch v. State Farm Mut. Auto. Ins. Co., 122 Wis.2d
172, 178-79, 361 N.W.2d 680, 683-84 (1985).
While Heritage's policy includes a general provision relating to its
subrogation rights, our reading of the UIM policy provisions convinces us that
the specific language of that section is controlling.   When there is an apparent
conflict between general and specific provisions of an agreement, the specific
provision controls.    Goldmann Trust v. Goldmann,  26 Wis.2d  141,  148,  131
N.W.2d 902, 906 (1965).
Based on the plain language of the UIM provisions, the general
subrogation language in the policy is immaterial in the instant case.   The only
subrogation  right  applicable  to  a  payment  of  UIM  benefits  is  a  right  of
subrogation against the owner or operator of a motor vehicle.   Heritage's policy
affords it no right of subrogation against a nonmotorist tortfeasor when it pays
its insured UIM benefits.
Heritage also contends that this determination ignores the Vogt
requirement  that  an  insured  notify  his  or  her  insurance  company  before
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No. 95-2423
executing a release of a tortfeasor and his or her insurer.  See Vogt, 129 Wis.2d at
17, 383 N.W.2d at 882.   Heritage complains that the lack of notice prevented it
from  participating  in  the  settlement  and  that  the  release  Hull  signed
“extinguished  all  subrogation  rights  that  Heritage  would  have  as  an
underinsured motorist carrier.”
For the same reasons that we concluded the general subrogation
clause of the policy is not controlling, the Vogt notice requirement is also not
applicable.   The Vogt requirement of notice does not supersede the provisions
of a contract between an insurer and its insured.   Heritage's policy language
abrogated its subrogation rights in this instance.
We conclude that the plain language of Heritage's UIM provisions
defines its subrogation rights.   Under the policy, Heritage's right exists against
any tortfeasor who is also the owner or operator of a motor vehicle.   Since
American Racing and Wheel and Tire are neither “owners” nor “operators” of a
motor vehicle, Hull's settlement with them as potential tortfeasors does not
affect his right to recover under the UIM portion of his policy.
By the Court.—Judgment affirmed.
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