“Absurd Result” from Rental Car Liability
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Occasionally there are conflicting state statutes that apply to the same set of circumstances. The unintended consequence is that in some cases the victims are denied an adequate remedy that would compensate them for their losses. Sadly, after a devastating car accident, a Wisconsin family was faced with this possibility. On July 19, 2007, Kathryn Bethke was driving with and her son Andrew on a Wisconsin road when Frederick Goddard drove his car across the center line causing a head on collision. Both Kathryn Bethke and Goddard died while Andrew Bethke suffered serious injuries. There was no dispute that Goddard’s negligence caused the fatal collision. There was a dispute, however, as to the amount of compensation the Bethke family was entitled to under Wisconsin law.
Goddard was driving a vehicle that he had rented from Avis. Under Wisconsin law, as a car rental company, Avis’ liability was statutorily limited so that it was required to pay only $25,000 to Kathryn’s estate and $25,000 to Andrew for a total of $50,000. Kathryn Bethke had purchased an uninsured motorist insurance policy (UIM) from Auto-Owners Insurance Company. Under the terms of the policy the Bethkes expected to receive $500,000 from the accident. However, the policy contained language excluding from coverage a vehicle owned or operated by a self-insurer. For this reason Auto-Owners rejected the Bethkes’ claim, leaving them with just $50,000 compensation for the fatal accident.
The Bethkes filed a lawsuit against Auto-Owners demanding that they pay the full $500,000. At the center of the dispute are two Wisconsin statutes. The “Financial responsibility for domestic rented or leased vehicles” statute that purports to limit the liability of self-insured drivers to $25,000 per person, while the “Requirements as to self-insurers” rule obliges self-insured drivers to demonstrate the ability to pay for losses that they cause. The result of the two statutes being applied to a case like the Bethkes’ case was incongruous. A self-insured car rental company such as Avis has limited liability, but at the same time is expected to fully satisfy judgments.
The lower courts sided with Auto-Owners. The Bethkes appealed to the Supreme Court of Wisconsin which ultimately resolved the conflict between the two Wisconsin statutes by determining what a reasonable result would be and dismissing an absurd result. Kathryn Bethke prudently planned in advance by purchasing the UIM policy, believing that it would provide additional compensation in the event that a negligent party’s coverage was not adequate to fully compensate her for any losses she suffered. UIM coverage is meant to provide coverage up to the policy limit where those who are liable cannot fully compensate the insured. Thus, it is reasonable to expect that UIM coverage would fill the gap in this case between the statutory liability of a car rental company and the actual damages suffered up to the UIM coverage limit. Interpreting the two statutes in any other way would otherwise lead to an absurd result. The Wisconsin Supreme Court reversed the lower court’s decision, paving the way for the Bethkes to receive an additional $450,000 in compensation for their losses.
Determining the amount of compensation a car accident victim is entitled to receive can be complex, often turning on the nuances of the law. If you were injured in a car accident it is critical for you to contact an experienced car accident lawyer who will be able to help you receive the maximum compensation possible under the circumstances.