2008 WI 87
CASE NO.: COMPLETE TITLE:
2006AP939 Estate of James B. Sustache, by its Special Administrator, James Sustache, and Antoinette Sustache, Plaintiffs, v. American Family Mutual Insurance Company, Defendant-Respondent, Carrie A. Roman, Defendant, Larry Mathews and Jeffrey W. Mathews, Defendants-Appellants-Petitioners.
REVIEW OF A COURT OF APPEALS DECISION 2007 WI App 144 Reported at: 303 Wis. 2d 714, 735 N.W.2d 186 (Ct. App. 2007-Published)
OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: SOURCE OF APPEAL: COURT: COUNTY: JUDGE: JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING: ATTORNEYS:
July 10, 2008 February 29, 2008
Circuit Kenosha Wilbur W. Warren III
BRADLEY, J., concurs (opinion filed).
For the defendants-appellants-petitioners there were briefs by John V. O’Connor and O’Connor, Dumez, Alia & McTernan, S.C., Kenosha, and oral argument by John V. O’Connor. For the defendant-respondent there was a brief by Terry J. Booth and Piper & Schmidt, Milwaukee, and oral argument by Terry J. Booth.
An amicus curiae brief was filed by James A. Friedman, Katherine Stadler, and Godfrey & Kahn, S.C., Madison, on behalf of the Wisconsin Insurance Alliance.
2008 WI 87
This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports.
STATE OF WISCONSIN
IN SUPREME COURT
Estate of James B. Sustache, by its Special Administrator, James Sustache, and Antoinette Sustache, Plaintiffs, v. American Family Mutual Insurance Company, Defendant-Respondent, Carrie A. Roman, Defendant, Larry Mathews and Jeffrey W. Mathews, Defendants-Appellants-Petitioners.
JUL 10, 2008
David R. Schanker Clerk of Supreme Court
REVIEW of a decision of the Court of Appeals.
DAVID T. PROSSER, J.
This is a review of a published
decision of the court of appeals,1 which affirmed an order of the Kenosha County Circuit Court, Wilbur W. Warren III, Judge.
Estate of Sustache v. Am. Family Mut. Ins. Co., 2007 WI App 144, 303 Wis. 2d 714, 735 N.W.2d 186.
In this insurance coverage dispute, the circuit court dismissing defendant American Family
entered summary judgment
Mutual Insurance Company (American Family), which insured, under separate policies: (1) defendants Larry Mathews (Mathews) and Jeffrey W. Mathews (Jeffrey),2 and (2) defendant Carrie A. Roman (Roman). American Family provided an initial defense to the
Mathewses and Roman under a reservation of rights and moved to stay the proceeding on liability until the issue of coverage was resolved. In this review, only the dismissal of American Family
with respect to the defense of the Mathewses is before us. ¶3 The issue presented is whether an insurer has a duty
to defend an insured, under the liability coverage provisions of a homeowner's insurance policy, when the plaintiffs' complaint asserts that the insured "without warning or provocation,
punched decedent out, causing him to fall into a curb thereby causing serious injuries and ultimately death," leading to a count of "battery . . . by intentionally causing bodily
harm . . . thereby causing decedent's death."
Relying on Berg
v. Fall, 138 Wis. 2d 115, 405 N.W.2d 701 (Ct. App. 1987), the Mathewses contend that Jeffrey's affirmative defense of selfdefense requires the insurer to look beyond the four corners of the complaint to continue to provide a defense. ¶4 After carefully considering the facts and
circumstances of this case, especially the allegations of the
Defendants Larry Mathews and Jeffrey W. Mathews will be referred to collectively as "the Mathewses." 2
complaint and the pertinent homeowner's policy, we conclude that the Mathewses' homeowner's policy does not provide coverage for the plaintiffs' claims. duty to continue to Consequently, American Family has no the Mathewses. Accordingly, we
affirm the court of appeals. I. BACKGROUND ¶5 James B. Sustache (Sustache) died from injuries
sustained after an altercation at an underage drinking party hosted by Roman and her minor son, Anthony Fuller. During this
altercation, Jeffrey punched Sustache in the face, causing him to fall to the curb and sustain severe injuries that ultimately led to his death. The altercation stemmed from events earlier
that evening when "a number of [party attendees] started calling [Jeffrey] on his cell phone," harassing and goading him to "come over to the party to engage in a fight with [Sustache]." There
is no dispute that Jeffrey intended to strike Sustache; there is also no dispute that Jeffrey did not intend his blow to be fatal.3 ¶6 Sustache's estate and his parents, James and
Antionette Sustache, sued Jeffrey, Mathews, Roman, and American Family, which had issued separate homeowner's insurance policies to Roman and Mathews. alleged five causes of The plaintiffs' first amended complaint action, four of which relate to the
The record is silent regarding whether Jeffrey was criminally charged for the incident. Counsel for the Mathewses indicated at oral argument that Jeffrey has not been criminally charged. 3
defendants participating in this appeal.4
Count 2 alleged that
Jeffrey negligently failed to inquire into the true source of the phone calls before striking Sustache. "[Jeffrey] committed battery without Count 3 alleged that provocation by
intentionally causing bodily harm to [Sustache] without [his] consent thereby causing [his] death." Count 4 sought to hold
Mathews vicariously liable for Jeffrey's "willful, malicious and wanton" acts pursuant to Wis. Stat. § 895.035.5 Count 5 sought
punitive damages for Jeffrey's "willful, wanton and malicious" acts.6
Count 1 of the plaintiffs' first amended complaint alleges that Roman was negligent per se for violating Wis. Stat. § 125.07 by failing to take action to prevent the illegal consumption of alcohol beverages by underage persons on premises owned or under her control. The circuit court granted summary judgment to American Family on this count. All references to the Wisconsin Statutes are to the 200506 version unless otherwise indicated. Wisconsin Stat. § 895.035(2)(a) provides in pertinent part: "The parent or parents with custody of a minor child, in any circumstances where he, she, or they may not be liable under the common law, are liable . . . for personal injury attributable to a willful, malicious, or wanton act of the child." To resolve this appeal, we need to consider only Count 3. Roman has not appealed, thereby eliminating the need to consider Count 1. The plaintiffs conceded below that Count 2 fails to give rise to coverage. We need not consider Count 4 because it involves the vicarious liability of Mathews, which hinges upon our determination of coverage under Count 3. Furthermore, the American Family policy unambiguously excludes coverage for imputed liability. Finally, Count 5 is also unambiguously excluded from coverage, and the Mathewses failed to rebut American Family's argument to that effect on summary judgment. 4
plaintiffs' as the
American The first
Family provided a defense under a reservation of rights. assigned attorney filed an answer to the plaintiffs'
amended complaint denying all allegations against the Mathewses and affirmatively defending, in part, on the ground that Jeffrey acted in self-defense. ¶8 provides The Mathewses' American Family for homeowner's an "insured," policy which
includes both Mathews and Jeffrey.
Specifically, the policy
states: "We will pay, up to our limit, compensatory damages for which any insured is legally liable because of bodily injury or property damage caused by an occurrence covered by this policy." ¶9 including The policy to defines "occurrence" which as "an accident, during the
policy period, in: a. bodily injury; or b. property damage." The term "accident" is not defined in the policy. ¶10 coverage: 8. Illegal Consumption of Alcohol. We will not cover bodily injury or property damage arising out of the insured's knowingly permitting or failing to take action to prevent the illegal consumption of alcohol beverages by an underage person. 9. Imputed Liability. We will not cover bodily injury or property damage arising out of any liability imputed to any insured which is otherwise excluded in this policy. 10. Intentional Injury. We will not cover bodily injury or property damage caused intentionally 5 The policy enumerates the following exclusions from
by or at the direction of any insured even if the actual bodily injury or property damage is different than that which was expected or intended from the standpoint of any insured. The policy also provides that personal liability coverage does not extend to punitive damages. ¶11 The policy includes a defense provision that also
references an "occurrence." Defense Provision.
The defense provision states:
If a suit is brought against any insured for damages because of bodily injury or property damage caused by an occurrence to which this policy applies, we will provide a defense at our expense by counsel of our choice. We will defend any suit or settle any claim for damages payable under this policy as we think proper. (Emphasis added.) ¶12 On December 27, 2005, American Family moved for
summary judgment on the grounds that its policy did not cover the plaintiffs' claims and that it had no duty to continue to defend the Mathewses because: (1) the plaintiffs' damages were not caused by an "occurrence" covered under the policy; (2) the policy expressly excluded coverage for punitive damages; (3) the policy expressly excluded coverage for imputed liability——such as vicarious liability in under th[e] Wis. Stat. § 895.035——"which and (4) the is
expressly excluded coverage for intentional injury.
Family asserted that the four-corners rule, which provides that an insurer's duty to defend is determined solely on the
allegations in the complaint, not extrinsic facts, precluded any inquiry into Jeffrey's self-defense claim.
relying upon the court of appeals' opinion in Berg, which carved out an exception to the four-corners rule in a situation where the insured's claim of self-defense renders an intentional acts exclusion ambiguous. Berg, 138 Wis. 2d at 120-21. American
Family responded that Berg does not apply because the policy language at issue here differs significantly from that in Berg. American Family also asserted that Berg contradicted the fourcorners rule of earlier court supreme court had decisions and that Berg's
continuing validity. ¶14 While acknowledging the similarities between Berg and
the case at bar, the circuit court concluded that the fourcorners rule "has been well settled law in the State of
Wisconsin for many decades."
Based on the allegations in the
plaintiffs' first amended complaint, the circuit court held that American Family had no duty to defend the Mathewses because
coverage was excluded.
The court granted summary judgment to
American Family and dismissed the insurer from the plaintiffs' suit. The Mathewses appealed. The court of appeals affirmed in a published opinion.
Estate of Sustache v. Am. Family Mut. Ins. Co., 2007 WI App 144, ¶21, 303 Wis. 2d 714, 735 N.W.2d 186. The court of appeals
observed a tension between its opinion in Berg, which adopted an ambiguity exception to the four-corners rule, and this court's subsequent decisions in Doyle v. Engelke, 219 Wis. 2d 277, 580 N.W.2d 245 (1998), and Smith v. Katz, 226 Wis. 2d 798, 595 7
N.W.2d 345 (1999). 16.
Estate of Sustache, 303 Wis. 2d 714, ¶¶15-
The court of appeals concluded that this court's opinions
in Doyle and Smith tacitly overruled Berg and Grieb v. Citizens Casualty Co., 33 Wis. 2d 552, 148 N.W.2d 103 (1967), which the Berg court had cited. Estate of Sustache, 303 Wis. 2d 714, ¶21.
Following Doyle and Smith, the court of appeals concluded that Wisconsin law does not recognize exceptions to the four-corners rule and affirmed the circuit court. ¶16 Id., ¶21.
The Mathewses petitioned this court for review, which
we granted on September 13, 2007. II. ANALYSIS A. Standard of Review ¶17 We review a grant of summary judgment de novo, relying Doyle, 219 Wis.
on the same methodology as the circuit court. 2d at 283 (citation omitted).
Summary judgment is proper where
the record demonstrates that no genuine issue as to any material fact exists and that the moving party is entitled to judgment as a matter of law. Wis. Stat. § 802.08(2); Grams v. Boss, 97 Wis.
2d 332, 337, 294 N.W.2d 473 (1980). ¶18 This case requires us to interpret an insurance
contract to determine the scope of an insurer's duty to defend its insureds. novo. N.W.2d This involves a question of law that we review de
Everson v. Lorenz, 2005 WI 51, ¶10, 280 Wis. 2d 1, 695 298 (citation omitted); Doyle, 219 Wis. 2d at 284
Discussion 1. ¶19 General Principles An insurance policy functions as a contract between and the insurer. Smith, 226 Wis. 2d at 806
Thus, interpretation of an insurance policy
is governed by the same rules of construction that apply to other contracts. Donaldson v. Urban Land Interests, Inc., 211 Our
Wis. 2d 224, 230, 564 N.W.2d 728 (1997) (citation omitted).
role in interpreting insurance policy language is to effectuate the intent of the contracting parties. Am. Family Mut. Ins. Co.
v. Am. Girl, Inc., 2004 WI 2, ¶23, 268 Wis. 2d 16, 673 N.W.2d 65 (citing Wis. Label Corp. v. Northbrook Prop. & Cas. Ins. Co., 2000 WI 26, ¶23, 233 Wis. 2d 314, 607 N.W.2d 276). Policy
language is construed as it "would be understood by a reasonable person in the position of the insured." Id. (citing Kremers-
Urban Co. v. Am. Employers Ins. Co., 119 Wis. 2d 722, 735, 351 N.W.2d 156 (1984)). We do not construe policy language to cover
risks that the insurer did not contemplate or underwrite and for which it has not received a premium. 233 Wis. 2d 314, ¶25)). Id. (citing Wis. Label,
"An insurance policy is not interpreted It is tested against the
in a vacuum or based on hypotheticals. factual allegations at issue."
2 Arnold P. Anderson, Wisconsin
Insurance Law § 7.26, at 25 (5th ed. 2004). ¶20 An insurer's duty to defend its insured is determined
by comparing the allegations of the complaint to the terms of the insurance policy. School Dist. of Shorewood v. Wausau Ins. 9
Cos., 170 Wis. 2d 347, 364-65, 488 N.W.2d 82 (1992); Prof'l Office Bldgs., Inc. v. Royal Indem. Co., 145 Wis. 2d 573, 580, 427 N.W.2d 427 (Ct. App. 1988). by the allegations contained The duty to defend is triggered within the four corners of the
Newhouse v. Citizens Sec. Mut. Ins. Co., 176 Wis. 2d
824, 835, 501 N.W.2d 1 (1993); Elliott v. Donahue, 169 Wis. 2d 310, 320-21, 485 N.W.2d 403 (1992); Grieb, 33 Wis. 2d at 557-58. It is the nature of the alleged claim that is controlling, even though the suit may be groundless, false, or fraudulent. 558 (citations omitted). than its The duty as insurer's to duty to Id. at is the
therefore broader former implicates
Fireman's Fund Ins. Co. of Wis. v. Bradley Corp., 2003 WI 33, ¶20, 261 Wis. 2d 4, 660 N.W.2d 666; Red Arrow Prods. Co., Inc. v. Employers Ins. of Wausau, 2000 WI App 36, ¶17, 233 Wis. 2d 114, 607 N.W.2d 294. ¶21 Courts liberally construe the allegations in the
complaint and assume all reasonable inferences.
261 Wis. 2d 4, ¶36; Doyle, 219 Wis. 2d at 284 (citing Atl. Mut. Ins. Co. v. Badger Med. Supply Co., 191 Wis. 2d 229, 241-42, 528 N.W.2d 486 (Ct. App. for will 1995)). coverage. be This As rule usual, tends to help in an the
Vandenberg v. Cont'l Ins. Co., 2001 WI 85, ¶40, 244 Wis. 2d 802, 628 N.W.2d 876. This familiar rule of contract construction
also helps the insured.
In determining whether there is a duty to defend, the
court first considers whether the insuring agreement makes an initial grant of coverage——i.e., whether the insurer has a duty to indemnify its insured——for the claims asserted. See Am.
Girl, 268 Wis. 2d 16, ¶24. policy was not intended Id. to
If the court determines that the cover the claims asserted, the
"[T]he insurer is under an obligation to
defend only if it could be held bound to indemnify the insured, assuming that the injured person proved the allegations of the complaint, regardless of the actual outcome of the case."
Grieb, 33 Wis. 2d at 558 (quoting 29A Am. Jur. Insurance § 1452, at 565 (1960)). ¶23 Only after concluding that coverage exists does the
court examine the policy's exclusions to determine whether they preclude coverage. Am. Girl, 268 Wis. 2d 16, ¶24. In other
words, when a court determines that there is no coverage in the policy for the allegations in the complaint, it is not necessary to interpret the policy's exclusions. See Smith, 226 Wis. 2d at
806 ("Upon close examination, however, we are convinced that [the defendant] does not have coverage under his policies.
"Once the circuit court resolves the question of indemnity in the insurer's favor . . . coverage is no longer open to debate. An insurer need not defend a suit in which it has no economic interest." Baumann v. Elliott, 2005 WI App 186, ¶10, 286 Wis. 2d 667, 704 N.W.2d 361 (citing School Dist. of Shorewood v. Wausau Ins. Cos., 170 Wis. 2d 347, 364, 488 N.W.2d 82 (1992)). 11
Consequently, it is unnecessary . . . to interpret the exclusion clause in circumstances where coverage does not exist."). ¶24 The Mathewses contend that their case requires this
court to evaluate whether Wisconsin recognizes exceptions to the four-corners rule. Specifically, they seek an exception to the
four-corners rule where self-defense is claimed. ¶25 When an insurer contests whether there is a
contractual obligation to indemnify its insured, it has several options.8 One of the insurer's options is to provide a defense
to the insured on the merits, under a reservation of rights, until the coverage issue is resolved. Baumann v. Elliott, 2005 This is what to stay
WI App 186, ¶8, 286 Wis. 2d 667, 704 N.W.2d 361. American Family did. It also moved the
proceedings on liability issues until the issue of coverage was resolved, and it moved for summary judgment, seeking a dismissal of all causes of action against it, as well as a declaration that it had no duty to continue to defend any of its insureds in the pending action. ¶26 Both the insurer and the insured have the right to
have the court resolve the issue of coverage separate from any
In Baumann, the court of appeals indicated that insurers may seek to resolve coverage issues in several ways: (1) By seeking a declaratory judgment; (2) By entering into an agreement with the insured to defend while retaining the right to challenge coverage; (3) By affording a defense under a reservation of rights; and (4) By seeking a bifurcated trial in which the court decides the coverage issue in a separate action from the action on the merits of the complaint. Baumann, 286 Wis. 2d 667, ¶8. 12
Insurance Law §§ 7.51-52, at 38-40 (5th ed. 2004) (discussing alternatives for both the insurer and the insured when coverage is alleged or disputed). ¶27 The four-corners rule is normally stated as a rule in
which the insurer's duty to defend is determined "without resort to extrinsic facts or evidence." Fireman's Fund, 261 Wis. 2d 4, In its that would
¶19 (citing Atlantic Mut. Ins. Co., 191 Wis. 2d at 236). amicus "[w]hen brief, a the Wisconsin alleges Insurance facts Alliance if
constitute a covered claim, the insurer must appoint defense counsel for its insured without looking beyond the complaint's four corners." ¶28 Here, This is the substance of the four-corners rule. however, we are beyond the initial duty to
defend stage of the proceedings.
American Family satisfied its It
duty to defend by providing the Mathewses with an attorney.
then moved the court to stay the proceedings on liability so that it could contest the issue of coverage. summary judgment and asked for a coverage hearing. the court with affidavits. These affidavits It moved for It presented included more
evidence than the insurance policies and the complaint; they included transcripts of the depositions of Jeffrey and Anthony Fuller, Roman's son. The Mathewses did not submit affidavits.
The circuit court was not oblivious to this additional evidence when it concluded that the facts were "relatively clear and for the most part not in dispute."
insured, a party has provided extrinsic evidence to the court, and the court has focused in a coverage hearing on whether the insured's policy provides coverage for the plaintiff's claim, it cannot be said that the proceedings are governed by the fourcorners rule. The insurer's duty to continue to defend is
contingent upon the court's determination that the insured has coverage if the plaintiff proves his case. 2. ¶30 "Occurrence" We turn to comparing the coverage provided by the
homeowner's policy to the allegations in the plaintiffs' first amended complaint, supplemented by affidavits. personal liability coverage and defense With respect to of claims, the
Mathewses' American Family homeowner's policy states: COVERAGE D – PERSONAL LIABILITY COVERAGE We will pay, up to our limit, compensatory damages for which any insured is legally liable because of bodily injury or property damage caused by an occurrence covered by this policy. Defense Provision. If a suit is brought against any insured for damages because of bodily injury or property damage caused by an occurrence to which this policy applies, we will provide a defense at our expense by counsel of our choice. We will defend any suit or settle any claim for damages payable under this policy as we think proper. (Emphasis added.) ¶31 To determine whether the policy provides coverage for
the plaintiffs' claims, the court must first consider whether the facts in the complaint allege an "occurrence" covered under
the policy. Wis. 2d 16,
See Everson, 280 Wis. 2d 1, ¶¶15-16; Am. Girl, 268 ¶24. Put more directly, is an alleged "battery
without provocation . . . intentionally causing bodily harm to [the] plaintiff without plaintiff's consent" an "occurrence"
covered by the policy? ¶32 As stated above, the Mathewses' policy defines
"occurrence" as "an accident, including exposure to conditions, which results during the policy period, in: a. bodily injury; or b. property damage." policy. ¶33 This court has construed the undefined term "accident" For example, The term "accident" is not defined in the
in an insurance policy on a number of occasions.
in Doyle v. Engelke, we reviewed an insurer's duty to defend a claim 281. at alleging negligent supervision. Doyle, 219 Wis. 2d at
The court was required to interpret the term "event," id. 286-87, which was defined in a comprehensive general
liability (CGL) policy as "an accident, including continuous or repeated exposure to substantially the same general harmful
Id. at 289.
The Doyle court noted that "accident" was undefined in
the policy and that words in insurance policies are given their "common, everyday meaning." 62 Wis. 2d 125, 133, 214 Id. (citing Schmidt v. Luchterhand, N.W.2d 393 (1974)). The court
consulted a dictionary to determine that an accident is "'[a]n unexpected, undesirable event' or 'an unforeseen incident' which is characterized by a 'lack of intention.'" Id. (quoting The
American Heritage Dictionary of the English Language 11 (3d ed. 15
unintentional occurrence concluded that a
defining "event" as an "accident" to cover negligence, including negligent supervision. ¶35 In American Id. at 290. Girl this court reviewed a coverage
dispute between a liability insurer and a general contractor over whether for the general contractor's CGL policy from an provided alleged
"occurrence." ¶36 The
Am. Girl, 268 Wis. 2d 16, ¶¶1-3.9 court construed "occurrence." Id., ¶¶37-38.
"Occurrence" was defined in the general contractor's policy as "an accident, including continuous or repeated exposure to
substantially the same general harmful conditions." "Accident" was not defined. Id.
The American Girl court turned
to several dictionary definitions for guidance: The dictionary definition of "accident" is: "an event or condition occurring by chance or arising from unknown or remote causes." Webster's Third New International Dictionary of the English Language 11 (2002). Black's Law Dictionary defines "accident" as follows: "The word 'accident,' in accident policies, means an event which takes place without one's foresight or expectation. A result, though unexpected, is not an accident; the means or cause
In American Girl, a subcontractor's negligence led to the general contractor's faulty site preparation for a construction project, excessive settlement of soil on the site, and the building's foundation eventually sinking. Am. Family Mut. Ins. Co. v. Am. Girl, Inc., 2004 WI 2, ¶3, 268 Wis. 2d 16, 673 N.W.2d 65. 16
must be accidental." ed. 1999).
Black's Law Dictionary 15 (7th
Am. Girl, 268 Wis. 2d 16, ¶37. ¶37 The court concluded within damage that the that the circumstances of of the
plaintiff's because the
"occurrence" "clearly not Id.,
intentional," nor was it "anticipated by the parties." ¶38.
The damage resulted due to "continuous, substantial, and
harmful settlement of the soil underneath the building," which was caused by the subcontractor's inadequate site preparation advice to the general contractor. damage nor the damage itself Id. Neither the cause of the anticipated, or
expected"; therefore, it was found to be an "accident" and a covered "occurrence" under the policy. ¶38 strict In Everson v. Lorenz this Id. court reviewed and/or whether
misrepresentation in a real estate transaction constituted an "occurrence" for purposes of a CGL insurance policy, triggering the insurer's duty to defend. ¶39 In Everson, and for Everson, 280 Wis. 2d 1, ¶2. Lorenz owned a a land lot in in a the
subdivision, subdivision home.
plaintiff the purpose
After the transaction, Everson determined
that a portion of the lot was located in a 100-year flood plain. Id., ¶5. This was contrary to representations made by Lorenz in
a real estate condition report given to Everson.10
result, Everson was unable to build, and he sued Lorenz for negligent misrepresentation and breach of contract. ¶40 "property Lorenz damage" was had a CGL by in liability an the policy Id. that covered ¶12.
"occurrence." policy as "an
including continuous or repeated exposure to substantially the same general Id. The Everson court evaluated whether Lorenz's alleged constituted an "accident" for purposes of harmful conditions." Id. "Accident" was not
The court noted that both American Girl
and Doyle relied upon dictionary definitions for assistance and then referenced Black's Law Dictionary, which defines "accident" as "[a]n unintended and unforeseen injurious occurrence;
something that does not occur in the usual course of events or that could not be reasonably anticipated." Black's Law Dictionary 15 (7th ed. 1999)). the definition of "accident" Id., ¶15 (quoting The court also cited by Doyle: "'an
unexpected, undesirable event' or 'an unforeseen incident' which is characterized by a 'lack of intention.'" 219 Wis. 2d at 289). Id. (quoting Doyle,
Lorenz appeared to make a negligent typographical error in the real estate condition report, typing lot "21" instead of lot "31" before giving the report to Everson. Everson then bought lot 31, which had flood plain problems. Everson v. Lorenz, 2005 WI 51, ¶¶5, 16 n.3, 280 Wis. 2d 1, 695 N.W.2d 298. 18
court not be
concluded considered an
purposes of liability coverage.
Id., ¶18. The court noted that
Lorenz's misrepresentation could be defined as an "act of making a false or misleading statement about something." Id., ¶19
(quoting Black's Law Dictionary 1016 (7th ed. 1999)).
false statement required a "degree of volition inconsistent with the term accident." Co., 679 A.2d Id. (citing Sheets v. Brethren Mut. Ins. 552-53 (Md. 1996) (Karwacki, J.,
dissenting)). ¶43 The volitional nature of Lorenz's act was key. The
court determined that "where there is a volitional act involved in such a misrepresentation, that act removes it from coverage as an 'occurrence' under the liability insurance policy." ¶20. The Everson court determined that Id.,
misrepresentation, although possibly premised upon a mistake of fact or an error of judgment, was nonetheless a volitional act, not an "accident," and not a covered "occurrence" under the CGL policy. ¶44 Id., ¶22. Finally, we revisited an the issue in of whether v.
Weisflog's Showroom Gallery, Inc., 2008 WI ___, ___ Wis. 2d ___, ___ N.W.2d ___. Showroom American The question in Stuart was whether Weisflog's Inc.'s (WSGI) CGL insurance policy with from property accident,
covered Id., an ¶4.
damages The policy
resulting covered as "an
misrepresentations. damage caused by
including continuous or repeated exposure to substantially the same general harmful conditions." defined. ¶45 See id., ¶24. Stuart involved allegations of misrepresentations by Id., ¶22. "Accident" was not
WSGI personnel, made in violation of the Home Improvement Trade Practices Act,11 to induce the homeowners to enter into contracts for home remodeling and design. allegedly misrepresented the Id., ¶¶7, 10. quality of WSGI WSGI personnel products and
claimed that WSGI personnel understood local building codes and regulations and that WSGI personnel were capable of providing architectural service and design work. Id., ¶9. A jury found
that WSGI made false, deceptive, or misleading representations in order to induce the homeowners to enter into a remodeling architecture contract, that the homeowners relied on those
representations, and that damages resulted. ¶46 In concluding that the
Id., ¶10. to the
homeowners were not accidental, and therefore not covered as an "occurrence" under WSGI's CGL policy, this court consulted
dictionary definitions and past decisions in Doyle, Everson, and American Girl and concluded that an "accident" "is an event or condition occurring by chance or one that arises from unknown causes, and is unforeseen and unintended." ¶¶24 n.13, 29-34, 40. The court Id., ¶24; see id., cited American
Girl's definition of an "accident": "'an event which takes place without
Wis. Admin. Code § ATCP 110 (Sept., 2001). 20
unexpected, is not an accident;' rather, it is the causal event that must be accidental for the event to be an accidental
Id., ¶40 (quoting Am. Girl, 268 Wis. 2d 16, ¶37). were made "volitionally to with the a
intent to induce"
contract and were therefore the non-accidental cause of their damages and not covered. ¶47 Id., ¶45.
Keeping these analyses of "accident" in mind, we turn
to the Mathewses' case. ¶48 The plaintiffs' first amended complaint alleged that
during the underage drinking party at Roman's house "a number of the attending teenagers started calling [Jeffrey] on his cell phone" to harass him and bait him to come to the party "to engage in a fight with [Sustache]." The complaint further
alleged that "[s]hortly thereafter, defendant [Jeffrey] showed up at the party, asked for [Sustache] and without warning or provocation, punched [Sustache] out, causing him to fall into a curb thereby causing serious injuries and ultimately death." ¶49 Count 2 alleged that Jeffrey "was negligent in not
asking [Sustache] whether or not he was the person that had been calling him on his cell phone and baiting him into a fight." If
Jeffrey had asked Sustache whether he was the person calling, Jeffrey allegedly would have learned that Sustache had not
Count 2 alleged that Jeffrey's failure to take the
"reasonable step" of ascertaining whether Sustache called him "was a proximate cause of the damages sustained by plaintiffs and resulted in [Sustache's] death." 21 Although claims of
negligence normally qualify for coverage, this negligence claim dropped out of consideration in circuit court when the Mathewses conceded that it was insufficient. ¶50 Count 3 of the complaint alleged that "[Jeffrey]
committed battery without provocation by intentionally causing bodily harm to [Sustache] without [his] consent thereby causing [Sustache's] death." (Emphasis added.) This count prompted
Jeffrey's claim of self-defense. ¶51 We conclude that the allegations in the plaintiffs'
first amended complaint, supplemented by Jeffrey's deposition,12 Jeffrey testified regarding the incident at a January 10, 2006, deposition. He indicated that prior to hitting Sustache, the two individuals were encircled by a group of people yelling and chanting for a fight. Jeffrey removed his shirt, despite the fact it was the middle of winter, to avoid having the shirt get in the way during a fight. Sustache, who appeared intoxicated, had his fists clenched at his sides, stepped forward, and pushed Jeffrey in the chest with both hands. Someone in the circle yelled "cops," Jeffrey turned to look, and a person standing behind Sustache blurted out "hurry up and hit him, he's not looking." Jeffrey testified: Q So did you——after you were pushed, did you stop your motion back and pause, or was it a fluid motion when you came back? Fluid motion. Did you——ultimately correct? Yes. At what point do you——did you strike him with a fist? Yes. .... 22 you struck Mr. Sustache,
A Q A Q A
cannot reasonably be construed to constitute a covered claim under the Mathewses' homeowner's policy. The American Family
policy provides indemnity coverage and a duty to defend for an "occurrence," defined as an "an accident, including exposure to conditions, which results during the policy period, in: a.
bodily injury; or b. property damage." "accident" is not defined. ¶52
Once again, the term
Considering the discussion of "accident" in Doyle, we
cannot conclude that an allegation that Jeffrey "intentionally caus[ed] bodily harm to [Sustache]" could reasonably be
"characterized by a 'lack of intention.'"
Doyle, 219 Wis. 2d at
289 (quoting The American Heritage Dictionary of the English Language 11 (3d ed. 1992)). "accident" might be viewed The Doyle court noted that an as "an unintentional occurrence
leading to undesirable results." Q A Q A
Id. at 290.
Where did you first strike Mr. Sustache? In his left jaw. To your knowledge, was when you struck him? Yes. .... he facing you squarely
Q A Q A
What happened after you struck Mr. Sustache in the left cheek? He fell to the ground. Was it cheek? Yes. your intent to strike him in the left
(Emphasis added.) 23
decision to intentionally "punch out" Sustache may have produced unexpected results, but this intentional act did not constitute an "accident." bodily harm. ¶53 The American Girl court's discussion of "accident" One cannot "accidentally" intentionally cause
also buttresses our conclusion. Law Dictionary is for not an the notion
The court referred to Black's that the "[a] or result, cause though must be
Am. Girl, 268 Wis. 2d 16, ¶37 (quoting Black's Law (7th ed. 1999)). Here, the plaintiffs' first battery without
provocation by intentionally causing bodily harm to [Sustache]" and that that was the "proximate cause of [Sustache's] damages and death." [Sustache] The complaint also stated that Jeffrey "punched out." By the complaint's terms, the punch that
caused Sustache's injuries and death was not accidental; Jeffrey intended the punch. Furthermore, the American Girl court
observed that the cause of damages to the building in that case (settling of the foundation due to improper site preparation) was accidental because it was not "intended, anticipated, or expected." Id., ¶38. Here the plaintiffs' allegations that
Jeffrey intentionally caused bodily harm to Sustache by punching him constitute a volitional assault that was intended,
anticipated, and expected.13
Jeffrey's punch was not "an event
One treatise observes:
In order to constitute an "accident" or "occurrence" under a policy of liability of insurance, 24
or condition remote
occurring by Id.,
International Dictionary of the English Language 11 (2002)). ¶54 Like the allegation of a pre-sale misrepresentation of
fact in Everson, the allegations of intentional battery here evince a degree of volition inconsistent with the term
See Everson, 280 Wis. 2d 1, ¶19.
Even if we were
to assume, as alleged in Count 2, that Jeffrey was negligent in failing to ascertain whether it was Sustache who called him to propose a fight, Jeffrey's subsequent and separate volitional act of punching Sustache is inconsistent with the term
See id. (citation omitted). an "accident" is "an
As the Everson court and unforeseen
injurious occurrence." 15 (7th ed. 1999)).
Id., ¶15 (quoting Black's Law Dictionary
According to the complaint, in response to
an event must be unforeseen, unexpected, or unanticipated. The nature of an assault is such that the event itself is typically intentional in nature. On their face, therefore, assaults would appear to inherently fall outside of the coverage provided in a liability policy. . . . If the insured is also the assailant, the result is that there is no coverage for the assault because the act was intentionally committed by the insured. 9 Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 127:21, at 127-54——127-55 (3d ed. 2000). However, even if privileged, "an injury deliberately caused by an act of self-defense is still not an injury that was caused by an accident." 2 Allan D. Windt, Insurance Claims and Disputes § 11.3, at 11-38——11-39 (5th ed. 2007). 25
Jeffrey voluntarily traveled to Sustache's location at Roman's house to confront him and intentionally punched Sustache in the face, ultimately causing severe injury and death. These
allegations assert a pattern of volitional action, regardless of whether taunts. ¶55 Finally, there is nothing in Stuart that is Jeffrey was mistaken about Sustache's role in the
inconsistent with this analysis. ¶56 alleged Sustache We conclude that no reasonable person would regard the intentional as an battery perpetrated by or Jeffrey an against
"unexpected . . . event,"
incident . . . characterized by a lack of intention,"14 or "an event . . . occurring remote causes."15 by chance or arising from unknown or
Striking the words "without provocation" from
the complaint would not alter the essence of the complaint: that Jeffrey intentionally caused bodily harm to Sustache.
Accordingly, we hold that the Mathewses' policy does not cover the plaintiffs' claims because Jeffrey's actions were not
accidental and, thus, did not give rise to an "occurrence."
Doyle v. Engelke, 219 Wis. 2d 277, 289, 580 N.W.2d 245 (1998) (citation omitted); Everson, 280 Wis. 2d 1, ¶15 (citations omitted). Am. Girl, 268 Wis. 2d 16, ¶37 (citation omitted); Stuart v. Weisflog's Showroom Gallery, Inc., 2008 WI ___, ¶24, ___ Wis. 2d ___, ___ N.W.2d ___ (citation omitted). 26
Intentional Injury Exclusion In determining whether there is a duty to defend, the
court first considers whether the insuring agreement makes an initial grant of coverage. Am. Girl, 268 Wis. 2d 16, ¶24.
Where it is clear that the policy was not intended to cover the claims asserted, the inquiry ends. that coverage exists does the Id. court Only after concluding examine the policy's Id. suit
exclusions to determine whether they preclude coverage. ¶58 Since we concluded above that the
does not give rise to coverage for Jeffrey's actions, we need not consider the policy's intentional injury exclusion. ¶59 The language of the Mathewses' policy resolves the
question of the duty to continue to defend once the question of coverage has been decided. The defense provision of the policy
states that defense counsel will be provided by American Family "[i]f a suit is brought against any insured for damages because of bodily injury or property damage caused by an occurrence to which this policy applies." ¶60 (Emphasis added.)
Since the plaintiffs' suit was not brought against the
Mathewses for damages "caused by an occurrence to which th[e] policy applies," defend. III. CONCLUSION ¶61 After carefully considering the facts and American Family has no duty to continue to
circumstances of this case, especially the allegations of the complaint and the pertinent homeowner's policy, we conclude that 27
the Mathewses' homeowner's policy does not provide coverage for the plaintiffs' claims. duty to continue to Consequently, American Family has no the Mathewses. Accordingly, we
affirm the court of appeals. By the Court.—The decision of the court of appeals is
ANN WALSH BRADLEY, J.
I agree with
the majority that this is not a case in which the four corners rule is applicable. The majority aptly explains why this case does not present the issue of whether there are exceptions to the four corners rule. ¶63 I also agree with the majority that the conduct here
does not constitute an accident or occurrence within the meaning of the Matthews' insurance policy. I write separately because of the majority's mixed analysis of "accident," and my belief that we should interpret "accident" as would the reasonable insured. ¶64 The majority fails to provide a clear statement of why
Jeffrey's action does not constitute an accident, and hence an occurrence, policy. within it the meaning of the Matthews' that insurance lead to
confusion rather than clarity. Ultimately, the majority proffers an understanding of "accident" that does not comport with the understanding of the reasonable insured. ¶65 The focus of this case is the conduct alleged in count
3 of the complaint, and supplemented by deposition testimony. See majority op., ¶¶50-51. Count 3 alleges that Jeffrey
"committed battery without provocation by intentionally causing bodily harm . . . ." Specifically, Jeffrey punched Sustache in the face. ¶66 accident, In the determining majority that offers this case does not involve The an
rationale it offers is that Jeffrey intentionally caused bodily harm to Sustache. Id., ¶52. In other words, the intent to harm, 1
rather than intent to perform the action that caused the harm, is the focus. ¶67 The majority's second rationale is that Jeffrey
"intended the punch" that caused Sustache's injury and death. Id., ¶53. Stating that an accident requires that the cause of damages be unintended, the majority reasons that damages due to an intended punch cannot be an accident. The action which caused the damage is the focus of the second rationale. ¶68 The majority's to third rationale is that "Jeffrey confront
voluntarily him and
location . . . to
intentionally punched Sustache . . . ."
¶54. According to the majority, this constitutes "a pattern of volitional action." Id. (emphasis added). The majority states that the actions here "evince a degree of volition inconsistent with the term of 'accident.'" Id. (emphasis is the in original). of the A
"pattern rationale. ¶69
this court's policies. as the
longstanding Language understood in by
doctrine an a
interpreting policy person
should in the
insured. Frost v. Whitbeck, 2002 WI 129, ¶20, 257 Wis. 2d 80, 654 N.W.2d 225. As I have stated elsewhere, in determining
whether there is an accident, the focus should be on the injury or damages, not on whether the action that caused the damages was intended. Stuart v. Weisflog, 2008 WI __, ¶4 & n.1, __ Wis. 2d __, __ N.W.2d __ (Bradley, J., concurring) (Stuart II). 2
Such a view comports with the understanding of the reasonable insured. ¶70 Thus, the majority's first rationale, the fact that
Jeffrey intended harm to Sustache when he threw the punch, is sufficient to determine that there is no accident here. The
analysis should end right there. ¶71 Accordingly, because of the majority's mixed analysis
of "accident," and for the reasons set forth more fully in my concurrence in Stuart II, I respectfully concur.