Bank One, Milwaukee, NA v. Breakers Development, Inc.

• Decision Date: 08 January 1997
• Docket Number: No. 95-3223,95-3223
• Citation: 559 N.W.2d 911,208 Wis.2d 230
• Parties: BANK ONE, MILWAUKEE, NA, Plaintiff, v. BREAKERS DEVELOPMENT, INC., Morgan-Wightman Supply Company, Charles A. Rice, Mulkey Rawson Electric, Inc., and The Rafal Corporation, Defendants, Dimensional Construction, Inc., Defendant-Appellant, Tim Konicek, Intervening Defendant, American Family Mutual Insurance Company, Intervening Defendant-Respondent.
• Court: Wisconsin Court of Appeals

Page 911

559 N.W.2d 911

208 Wis.2d 230

BANK ONE, MILWAUKEE, NA, Plaintiff, v. BREAKERS DEVELOPMENT, INC., Morgan-Wightman Supply Company Charles A. Rice, Mulkey Rawson Electric, Inc., and The Rafal Corporation, Defendants Dimensional Construction, Inc., Defendant-Appellant Tim Konicek, Intervening Defendant American Family Mutual Insurance Company, Intervening Defendant-Respondent.

No. 95-3223.

Court of Appeals of Wisconsin.

Submitted on Briefs Dec. 3, 1996.

Opinion Released Jan. 8, 1997.

Opinion Filed Jan. 8, 1997.

On behalf of the defendant-appellant, the cause was submitted on the briefs of Jeffrey Leavell and Gregory Boe of Jeffrey Leavell, S.C., of Racine.

On behalf of the defendant-respondent, the cause was submitted on the brief of David G. Peterson of Peterson, Johnson & Murray, S.C., of Milwaukee.

Before BROWN, NETTESHEIM and ANDERSON, JJ.

BROWN, Judge.

Dimensional Construction, Inc., is defending a slander of title action. This appeal concerns whether its insurer, American Family Mutual Insurance Company, owes coverage under a commercial general liability policy. Dimensional argues that the policy applies because it covers "slander" against a "person's or organization's goods, products or services." Alternatively, Dimensional argues that the policy applies because it provides liability coverage for "property damage." However, since a reasonable insured would not believe that the terms "goods" or "products" were meant to include real estate titles, we reject Dimensional's initial argument. Moreover, because a reasonable insured would not associate property damage with economic loss resulting from the slandering of title, we reject Dimensional's alternative argument. We affirm the circuit court's order awarding summary judgment to American Family. ¹

We begin with a brief description of the action giving rise to this coverage dispute between Dimensional and American Family. Dimensional was involved with a condominium project in Caledonia. The project was scheduled to be built in several phases. Dimensional began work on Phase III, but stopped work when it was not paid.

The whole project subsequently went into foreclosure and Dimensional acquired the lender's rights to Phase III. But while Dimensional was preparing the property for sale, it found what it believed to be an error in the legal description. The face of the document indicates that the Phase II condominium owners also own the Phase III land. As Dimensional became involved in the effort to clear title, the condominium owners counterclaimed alleging that Dimensional slandered their title to the Phase III property.

Dimensional subsequently sought coverage from American Family for the slander of title counterclaim. American Family responded by moving for summary judgment on grounds that its policy did not provide coverage. The circuit court granted the motion. It found that a title to real property is neither "goods, products or services" as American Family's policy requires to qualify for coverage owing to slander. The circuit court further found that damages arising from slander of title are "pecuniary" and hence are not encompassed by American Family's policy which, in the relevant part, applies only to instances involving "property damage."

We now address Dimensional's contention that the circuit court erred in awarding summary judgment. We owe no deference to the circuit court's findings since the decision to award summary judgment and the interpretation of an insurance contract are matters of law. See Benjamin v. Dohm, 189 Wis.2d 352, 358-59, 525 N.W.2d 371, 373 (Ct.App.1994).

Our objective when interpreting the provisions of an insurance policy is to ascertain the intent of the parties. See Muehlenbein v. West Bend Mut. Ins. Co., 175 Wis.2d 259, 264, 499 N.W.2d 233, 234-35 (Ct.App.1993). We give the terms of the policy their common and ordinary meaning and gauge the effect that these terms would have on a reasonable person in the insured's position. See Holsum Foods v. Home Ins. Co., 162 Wis.2d 563, 568-69, 469 N.W.2d 918, 920 (Ct.App.1991). We will now apply these maxims to American Family's policy and determine if a reasonable insured standing in Dimensional's shoes would believe that the policy provided coverage for this slander of title action.

Dimensional initially points to the personal and advertising injury liability coverage. This section of the policy explains that American Family "will pay those sums that the insured becomes legally obligated to pay as damages because of 'personal injury' or 'advertising injury'...." Although the policy describes a variety of offenses that are "personal injuries," the section that Dimensional believes applies states:

"Personal Injury" means injury, other than "bodily injury," arising out of one or more of the following offenses:

....

d. Oral or written publication of material that slanders or libels a person or organization or disparages a person's or organization's goods, products or services....

Dimensional asserts that its prosecution of the action against the Phase II owners, generally alleging that they had imperfect title to Phase III, constitutes the slandering of the Phase II owners' "goods" or "products."

We conclude, however, that a reasonable person would not equate a title to real estate as a "good" or "product." To ascertain the common and ordinary meaning of a term, we look to dictionary definitions. See Holsum Foods, 162 Wis.2d at 569, 469 N.W.2d at 921. We thus turn to Webster's, which provides the following definitions:

goods pl: tangible movable personal property having intrinsic value usu. excluding money and other choses in action but sometimes including all personal property and occas. including vessels and even industrial crops or emblements, buildings, or other things affixed to real estate but agreed to be severed: chattels, wares, merchandise, food products, chemical compounds, and agricultural products

product 2 a: something produced by physical...