19 F.3d 307 (7th Cir. 1994), 92-4142, Scottish Guarantee Ins. Co., Ltd. v. Dwyer

Docket Nº:92-4142.
Citation:19 F.3d 307
Party Name:SCOTTISH GUARANTEE INSURANCE COMPANY, LIMITED, Plaintiff-Appellant, v. Dennis B. DWYER, Defendant-Appellee.
Case Date:March 18, 1994
Court:United States Courts of Appeals, Court of Appeals for the Seventh Circuit

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19 F.3d 307 (7th Cir. 1994)



Dennis B. DWYER, Defendant-Appellee.

No. 92-4142.

United States Court of Appeals, Seventh Circuit

March 18, 1994

Argued Sept. 23, 1993.

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Thomas R. Schrimpf (argued), Jeffrey S. Fertl, Hinshaw & Culbertson, Milwaukee, WI, for plaintiff-appellant.

Edwin E. Brooks, Karyn G. Gershon (argued), Richard M. Seligman, Lori Meehan, Katten, Muchin & Zavis, Chicago, IL, for defendant-appellee.

Before BAUER, CUDAHY, and ROVNER, Circuit Judges.


This diversity case requires us to consider a question we reserved in Pipefitters Welfare Educ. Fund v. Westchester Fire Ins. Co., 976 F.2d 1037 (7th Cir.1992)--whether allegations of negligent trespass to property constitute a "wrongful entry" under the "personal injury" portion of a commercial insurance policy. We were able to sidestep this question under Illinois and Missouri law in Pipefitters because the definition of a "personal injury" in the policy there was not limited to either a wrongful entry or an eviction; it also encompassed "other invasion[s] of the right to private occupancy." Id. at 1040. We thus relied on that catch-all phrase in finding that the insurer had a duty to defend its insured against a negligent trespass claim. Id. at 1041-42. The policy here, however, does not provide this easy way out, as it defines a personal injury only as a "[w]rongful entry into, or eviction of a person from, a room, dwelling or premises." We nonetheless hold that under Wisconsin law, the insurer is obligated to defend its insured because the underlying complaints allege a wrongful entry within the meaning of the policy. We thus affirm the district court's judgment to that effect.


This declaratory judgment action grows out of two complaints filed against Dennis Bruce Dwyer and others in the Circuit Court of Rock County, Wisconsin (the "Rock County actions"). The plaintiffs in the two suits owned various parcels of real property, including ground wells, in Beloit, Wisconsin that allegedly were contaminated when chemicals were released into the soil during a fire on the neighboring property of Dwyer's father. The blaze destroyed a building that housed materials used in Dwyer's insulation business as well as pesticides and herbicides used in his father's seed and fertilizer business. The chemicals allegedly were washed into the ground with the water utilized to fight the fire. The plaintiffs in the underlying suits allege that the chemicals have infiltrated their wells, contaminating their water supplies. They allege damage to their real property as well as personal injuries caused by the ingestion and use of the contaminated water. The complaints assert an entitlement to relief under various legal theories, the most important for our purposes being a negligent trespass to property.

Dwyer tendered the suits to Scottish Guarantee Insurance Company, Limited ("Scottish") for defense and indemnification under a policy he had purchased for his insulation business. Scottish denied a defense on the ground that the allegations in the underlying

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complaints fell under the policy's pollution exclusion. 1 Scottish later filed this declaratory judgment action under our diversity jurisdiction, again asserting that it had no duty to defend or to indemnify Dwyer under the policy. Dwyer counterclaimed, alleging coverage under the personal injury portion of the policy, which he maintained is not subject to the pollution exclusion. By its terms, the pollution exclusion applies only to bodily injury and property damage liability ("Coverage A"), and the parties agreed below that this exclusion negates any duty to defend under Coverage A. Yet a separate provision provides coverage for personal or advertising injuries ("Coverage B"), and that portion of the policy, as Dwyer noted below, is not subject to the pollution exclusion. Scottish maintained, however, that the Rock County complaints do not allege "personal injuries" as that term is defined in Coverage B.

The parties filed cross-motions for summary judgment on Scottish's duty to provide a defense under the policy's personal injury provision. The district court referred the motions to a magistrate-judge, who recommended that Dwyer's motion be granted. The district court adopted that recommendation and held that Scottish has a duty to defend the Rock County lawsuits because the complaints there arguably allege a wrongful entry within the scope of Coverage B. The court also granted Dwyer's motion for attorney's fees and costs. We review the district court's grant of summary judgment de novo. Pipefitters, 976 F.2d at 1039; La Preferida, Inc. v. Cerveceria Modelo, S.A. de C.V., 914 F.2d 900, 905 (7th Cir.1990). Under Wisconsin law, which the parties agree is governing here, the construction of language in an insurance policy is a question of law that we consider...

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