Am. Family Mut. Ins. Co. v. Williams, 15-3400

• Decision Date: 08 August 2016
• Docket Number: No. 15-3400,15-3400
• Parties: American Family Mutual Insurance Company, Plaintiff–Appellant, v. David Williams, et al., Defendants–Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

832 F.3d 645

American Family Mutual Insurance Company, Plaintiff–Appellant,

v.David Williams, et al., Defendants–Appellees.

No. 15-3400

United States Court of Appeals, Seventh Circuit.

Argued February 23, 2016

Decided August 8, 2016

Robert S. O'Dell, Attorney, O'Dell & Associates, P.C., Carmel, IN, for Plaintiff–Appellant.

Christopher D. Wyant, Christine L. Bartlett, Attorneys, Wyant Law Office, Indianapolis, IN, for Defendants–Appellees.

Before Wood, Chief Judge, and Sykes and Hamilton, Circuit Judges.

Wood

, Chief Judge.

They say every dog has its day. This case is about a dog—specifically, Emma, a black Labrador. Emma lived in Indiana with Anthony and Jeanette Van de Venter, friends of David Williams. When Williams, then visiting the Van de Venters, took Emma outside so that she could relieve herself, she raced off toward an enticing sound and Williams was injured. Before us is the question whether American Family Mutual Insurance (AmFam), the Van de Venter's home insurer, must cover Williams's medical expenses. AmFam said no and brought this suit for a declaratory judgment to confirm its reading of the policy. The district court, however, found in favor of the Van de Venters and Williams. We affirm.

I

The relevant facts are undisputed. In October 2012, Williams, a college friend of Anthony Van de Venter, visited the Van de Venters at their home in Monroe County, Indiana. On Tuesday, October 23, 2012, the Van de Venters went to work, leaving Williams at home for the day. Williams was sharing the house with Emma. Before they left, the Van de Venters told Williams that Emma would be fine inside while they were away. If she wanted to go outside, they instructed him, she would ring a bell by the front door, and he should let her out. They said nothing about walking her.

At approximately 10:40 a.m., Williams was watching television when Emma scratched on his bedroom door. He followed her downstairs, clipped a leash to her collar, and accompanied her outside. They returned without incident. Roughly an hour later, Williams heard the bell at the front door ring. He went downstairs again to find Emma by the door, whining. He again affixed the leash to her collar and walked with her into the backyard, away from the road.

As Williams held Emma's leash, a “woof” rang out, shattering the early-afternoon air. That neighborhood dog's bark proved to be, quite literally, worse than its bite: Emma lurched toward the sound, pulling Williams to the ground and seriously injuring his shoulder. Williams sued the Van de Venters, alleging that they were negligent in, among other things, failing to exercise reasonable care for his safety while he was a guest in their home.

At the time of Williams's injury, the Van de Venters' home was insured by a home-insurance policy with AmFam. The policy included personal liability coverage indemnifying the Van de Venters for compensatory damages for bodily injury and guaranteeing a defense against suits for such damages. The policy also contained a provision stating: “Intra-Insured Suits. We will not cover bodily injury to any insured.” In relevant part, the policy defined an “insured” as “any person ... legally responsible for a[n] ... animal owned by [a named insured or resident relative of a named insured] to which [the policy's personal-liability coverages] apply.”

AmFam took the position that these provisions relieved it of the duty to defend or indemnify the Van de Venters. As we noted, the district court rejected its position, and AmFam now appeals.

II

We review the district court's decision to grant summary judgment de novo . Steimel v. Wernert , 823 F.3d 902, 910 (7th Cir. 2016)

. When reviewing cross-motions for summary judgment, we take the motions one at a time and for each one we construe all facts and draw all reasonable inferences in favor of the non-moving party. Id. Summary judgment is appropriate only “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” FED. R. CIV. P. 56(a).

AmFam argues that Williams was legally responsible for Emma at the time he was hurt, and for that reason he was an insured under the policy. As an insured, it concludes, he cannot turn to the policy for coverage of his claim.

In diversity cases where neither party raises a conflict of law issue, federal courts apply the law of the state in which they sit. Ball v. Kotter , 723 F.3d 813, 821 (7th Cir. 2013)

. This is such a case. Indiana uses the law of the principal location of the insured risk. Dunn v. Meridian Mut. Ins. Co. , 836 N.E.2d 249, 251 (Ind. 2005) (citing RESTATEMENT ( SECOND ) OF CONFLICT OF LAWS § 193 (1971) ). The Van de Venters' house is located in Indiana, and so we rely on Indiana law.

If not specifically defined in the policy, clear and unambiguous language is given its ordinary meaning. See Holiday Hosp. Franchising, Inc. v. AMCO Ins. Co. , 983 N.E.2d 574, 577 (Ind. 2013)

. The policy does not define the term “legally responsible,” nor does it otherwise indicate that the term has a specific meaning. We therefore turn, as Indiana courts would, to the dictionary. Id . at 579. Black's Law Dictionary defines “responsibility” as the “quality, state, or condition of being answerable or accountable; LIABILITY .” BLACK'S LAW DICTIONARY 1506 (10th ed. 2014). “Liability,” in turn, means “legal responsibility to another or to society, enforceable by civil remedy or criminal punishment.” Id . at 1053. To the same effect, Merriam-Webster defines “responsible” as “liable or subject to legal review or in case of fault to penalties.” MERRIAM-WEBSTER'S THIRD NEW INT'L DICTIONARY 1935 (1986). When used in the legal sense, “responsible” means roughly “subject to some kind of liability.”

Indiana law makes two kinds of people legally responsible for animals: owners and keepers. Ross v. Lowe , 619 N.E.2d 911, 914 (Ind. 1993)

(“An owner or keeper who fails to exercise ... reasonable care may be liable in negligence for the manner of keeping and controlling the dog.”). Indiana Code § 15-20-1-2 defines an “owner” as “a person who possesses, keeps, or harbors a dog.” A “keeper, for purposes of imposition of liability, is one who exercises control over an animal on his premises with knowledge of its presence, whether he be an owner, or bailee.” Williams v. Pohlman , 146 Ind.App. 523, 257 N.E.2d 329, 331 (1970). In Vetor by Weesner v. Vetor , 634 N.E.2d 513, 515 (Ind. Ct. App. 1994), the court held that a jury could find that the victim's grandparents were a dog's keeper where they had “not simply acquiesced but were intentionally causing the dog to come to their home.” Id . (noting that they permitted the dog to “roam their farm,” fed and watered it, and gave it affection). In order to qualify as a keeper, a person must “undertake[ ] to manage, control, or care for the animal as [an] owner, in general, is accustomed to do.” 3B C.J.S. ANIMALS § 75. The definition therefore “implies ... a substantial number of incidents” and that the person “suppl[ies the dog] with the necessities of life.” Id . A person “harbors” a dog when she “affords [it] lodging, shelters, or gives refuge ... for a limited purpose or time.” Id . § 374.

Whatever the limits of these definitions, they are not met here. Because Emma was not on Williams's property, he did not harbor her. Neither did he undertake any control of her that would approximate that of an owner. He did not intentionally cause her to come to any area of the house. Indeed, she rang the bell at the front door, signaling that she wished to go outside. He merely attached her leash and accompanied her there. Williams was not responsible for giving Emma any food, water, affection, or other care—and he gave her none. Except for the brief moments when he walked outside with her, he did not interact with Emma at all. Even then, it seems that his physical control was very limited: their first contest of wills resulted in his injury.

Finally, Williams did not have “possession” of Emma under any traditional definition of the word. He did not “exercise dominion over” Emma; neither did he assert a “right under which” he “exercise[d] control over” her “to the exclusion of all others.” Possession , BLACK'S LAW DICTIONARY at 1351. Williams was just a houseguest who twice accompanied his host's dog outside as it did its business: he did not possess, keep, or harbor Emma.

AmFam pushes back with the argument that Williams was “legally responsible” for Emma because the Van de Venters granted him a bailment over her. There are several problems with this theory. First, Indiana law seems to consider bailees of animals to be a subset of keepers. See Williams , 257 N.E.2d at 331

. If Williams was not a keeper, he could not have been a bailee. More fundamentally, Williams does not meet Indiana's requirements for a bailee. “A bailment arises when: (1) personal property belonging to a bailor is delivered into the exclusive possession of the bailee and (2) the property is accepted by the bailee.” Kottlowski v. Bridgestone/Firestone, Inc. , 670 N.E.2d 78, 82 (Ind. Ct. App. 1996). Delivery requires “full transfer ... of the property to the bailee as to exclude the owner and all other persons.” Id . “Acceptance requires either an express contract to take the article and later redeliver it, or circumstances from which such a contract can be implied.” Id .

None of these things happened in this case. Emma was not transferred to Williams at all, let alone to the exclusion of the Van de Venters. Under the undisputed terms of Williams's and the Van de Venters' understanding, Williams and Emma simply coexisted in the house during the Van de Venters' absence. Neither did Williams expressly or impliedly agree to “take” Emma. Quite literally, Williams let a sleeping dog lie—or do whatever else it was doing. The Van de Venters could have come back at any time and, on a whim, taken her away. They could have sent someone else to walk, feed, or take...