Drinkwater v. Am. Family Mut. Ins. Co. - 2006 WI 56, 290 Wis. 2d 642, 714 N.W.2d 568

Rule:

The "first rule" in the Gillette choice-of-law analysis is that the law of the forum should presumptively apply unless it becomes clear that nonforum contacts are of the greater significance. If it is not clear that the nonforum contacts are of greater significance, then the court applies five choice-influencing factors: (1) Predictability of results; (2) Maintenance of interstate and international order; (3) Simplification of the judicial task; (4) Advancement of the forum's governmental interests; and (5) Application of the better rule of law. 

Facts:

The insured, a Wisconsin resident, was injured in a motor vehicle accident in Wisconsin, and the plan paid medical expenses on his behalf through his employer's health insurance plan. The contract was issued to the insured's employer in Iowa. The circuit court applied Wisconsin law and determined that the insured must be made whole before the Plan was entitled to subrogation against his recovery for personal injuries.

Issue:

Did Wisconsin law properly apply to the subrogation claim against the insured?

Answer:

Yes.

Conclusion:

Applying choice-of-law principles, the court determined that Wisconsin law applied. The plan was not entitled to subrogation against the insured's recovery because he was not made whole under Wisconsin law. A number of choice-influencing factors favored application of Wisconsin law. Although the application of Iowa law might have modestly increased predictability for the plan, application of Wisconsin law would have facilitated predictability for Wisconsin citizens such as the insured. Application of Iowa law would not have simplified the judicial task. Limiting the insured's net recovery to less than the damages he would have recovered under Wisconsin law undermined Wisconsin's significant interest in fully compensating its citizens who were tort victims. Further, application of Iowa law would have seemed to work inequitable results.