Barrows v. Am. Family Ins. Co.

• Decision Date: 10 December 2013
• Docket Number: No. 2013AP720.,2013AP720.
• Citation: 352 Wis.2d 436,2014 WI App 11,842 N.W.2d 508
• Parties: Robert BARROWS, Plaintiff–Appellant, v. AMERICAN FAMILY INSURANCE CO., Defendant–Respondent, Jason Renfrow and Bonnie LaValla, Defendants.
• Court: Wisconsin Court of Appeals

352 Wis.2d 436

842 N.W.2d 508

2014 WI App 11

Robert BARROWS, Plaintiff–Appellant, ^†

v. AMERICAN FAMILY INSURANCE CO., Defendant–Respondent,Jason Renfrow and Bonnie LaValla, Defendants.

No. 2013AP720.

Court of Appeals of Wisconsin.

Submitted on Briefs Oct. 22, 2013.

Opinion Filed Dec. 10, 2013.

On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Jonathan B. Lundeen and R. Michael Waterman of Mudge, Porter, Lundeen & Seguin, S.C., Hudson.

On behalf of the defendant-respondent, the cause was submitted on the brief of James R. Johnson and Leah L. Isakson of Lommen, Abdo, Cole, King & Stageberg, P.A., Hudson.

Before HOOVER, P.J., MANGERSON and STARK, JJ.

STARK, J.

¶ 1 Robert Barrows appeals a summary judgment in favor of American Family Insurance Company. The circuit court concluded a homeowner's policy American Family issued to Jason Renfrow and Bonnie LaValla did not cover Barrows' claim for the wrongful death of Barrows' and LaValla's son, A.B. We agree with the circuit court that the intra-insured exclusion in American Family's policy bars coverage for Barrows' wrongful death claim. We therefore affirm.

BACKGROUND

¶ 2 The following facts are undisputed. A.B. was the eleven-year-old son of Barrows and LaValla. He resided with LaValla and Renfrow at Renfrow's home in Osceola, Wisconsin. On October 18, 2011, A.B. found a loaded .45–caliber handgun in Renfrow's nightstand. There is no evidence that the gun was secured with any kind of safety lock. A.B. shot himself in the head, and he died later that day. The Polk County Sheriff's Department classified A.B.'s death as a suicide.

¶ 3 Barrows subsequently filed a wrongful death suit against Renfrow, LaValla, and their homeowner's insurer, American Family. The complaint alleged Renfrow negligently stored the handgun, which directly contributed to A.B.'s death. The complaint further alleged Barrows had suffered damages as a result of Renfrow's negligence and would continue to suffer future damages.

¶ 4 American Family moved for summary judgment, arguing that both the intra-insured and intentional injury exclusions in its policy barred coverage for Barrows' claim. The circuit court agreed that both exclusions applied, and it therefore granted American Family summary judgment. Barrows now appeals.

DISCUSSION

¶ 5 We review a grant of summary judgment independently, using the same methodology as the circuit court. Hardy v. Hoefferle, 2007 WI App 264, ¶ 6, 306 Wis.2d 513, 743 N.W.2d 843. Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Wis. Stat. § 802.08(2).¹

¶ 6 Interpretation of an insurance policy presents a question of law for our independent review. American Family Mut. Ins. Co. v. American Girl, Inc., 2004 WI 2, ¶ 23, 268 Wis.2d 16, 673 N.W.2d 65. Our aim in interpreting an insurance policy is to “determine and give effect to the intent of the contracting parties.” Id. We construe a policy as it would be understood by a reasonable person in the position of the insured. Id. “However, we do not interpret insurance policies to provide coverage for risks that the insurer did not contemplate or underwrite and for which it has not received a premium.” Id.

¶ 7 We employ a three-step process to determine whether an insurance policy provides coverage for a claim. First, we examine the facts of the claim to determine whether the policy's insuring agreement makes an initial grant of coverage. Id., ¶ 24. If so, we next consider whether any of the policy's exclusions preclude coverage. Id. If a particular exclusion applies, we then determine whether any exception to that exclusion reinstates coverage. Id.

¶ 8 The insuring agreement in American Family's 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.” In the circuit court, American Family never argued its policy did not make an initial grant of coverage for Barrows' claim. However, on appeal, American Family raises two arguments that Barrows' claim does not fall within the policy's initial grant of coverage: (1) Barrows did not suffer a bodily injury; and (2) Barrows' damages were not caused by an occurrence. In response, Barrows argues American Family forfeited its right to raise these arguments by failing to raise them in the circuit court. Barrows also argues the policy provides an initial grant of coverage for his claim.

¶ 9 We need not resolve these issues because we conclude that, even if American Family's policy provides an initial grant of coverage for Barrows' claim, coverage is barred by the policy's intra-insured exclusion. An appellate court need not address every issue raised by the parties when one issue is dispositive. See Sweet v. Berge, 113 Wis.2d 61, 67, 334 N.W.2d 559 (Ct.App.1983). We therefore assume, without deciding, that the policy makes an initial grant of coverage for Barrows' claim, and we proceed directly to a discussion of the intra-insured exclusion.

¶ 10 The intra-insured exclusion in American Family's policy states, “We will not cover bodily injury to any insured.” The policy defines “bodily injury” as “bodily harm, sickness or disease. It includes resulting loss of services, required care and death.” It is undisputed that A.B. qualifies as an “insured” under the policy, and Barrows does not. It is also undisputed that the injury to A.B. meets the policy's definition of “bodily injury.” The disputed issue is whether Barrows' claim for damages caused by A.B.'s death constitutes a claim for “bodily injury” to an “insured,” so that the intra-insured exclusion applies.

¶ 11 American Family argues the intra-insured exclusion applies to any claim arising out of bodily injury to an insured, even if the claim is brought by a non-insured. American Family points out that a wrongful death claim is a derivative claim, and, as such, “Barrows would have no claim for wrongful death but for the bodily injury sustained by A.B.”

¶ 12 Conversely, Barrows argues the intra-insured exclusion does not apply to his wrongful death claim because he is not seeking to recover damages for A.B.'s bodily injury. He argues that a wrongful death claim is separate and distinct from a claim for the decedent's bodily injury and compensates the wrongful death plaintiff for his or her own injuries. See Day v. Allstate Indem. Co., 2011 WI 24, ¶ 62, 332 Wis.2d 571, 798 N.W.2d 199 (“[W]rongful death beneficiaries seek recovery not for the injury suffered by the deceased, but rather ‘for the loss sustained to the beneficiaries because of the death.’ ” (quoted source omitted)). Barrows therefore argues his wrongful death claim “seeks recovery for [Barrows'] injuries, not A.B.'s.” He asserts the intra-insured exclusion does not apply to a claim made by a non-insured for his or her separate injuries caused by an insured's death.

¶ 13 Whether an intra-insured exclusion like the one in American Family's policy bars a non-insured's wrongful death claim arising from the death of an insured appears to be an issue of first impression in Wisconsin. In Day, our supreme court considered whether a differently worded “family exclusion” barred coverage for a non-insured's wrongful death claim arising from an insured's death. There, the exclusion stated, “We do not cover bodily injury to an insured person ... whenever any benefit of this coverage would accrue directly or indirectly to an insured person.” Id., ¶ 11. The court determined two conditions had to be met for this exclusion to apply: “(1) the coverage sought is for bodily injury to an insured person; and (2) any benefit of coverage would accrue directly or indirectly to an insured person.” Id., ¶ 38. The court then noted it was undisputed that the plaintiff's wrongful death claim arose out of bodily injury to an insured. Id., ¶ 39 n. 9. However, the court explained:

The parties do not brief or argue whether claims that arise out of bodily injury to an insured fit within the exclusion's first condition [i.e., bodily injury to an insured person]. Accordingly, we do not determine whether the first condition is met, and like the parties, we focus our examination on the exclusion's second condition.

Id. Thus, the Day court focused exclusively on whether any benefit of coverage would accrue directly or indirectly to an insured person. It specifically declined to address the operative issue in this case—that is, whether a non-insured's wrongful death claim arising out of an insured's bodily injury constitutes a claim for bodily injury to an insured and therefore is barred from coverage under the intra-insured policy exclusion.

¶ 14 American Family cites several cases for the proposition that Wisconsin's wrongful death statute “provides for recovery only in cases where the injured party, if he had survived, would have been entitled to recover against the person who caused the wrongful act.” See, e.g., Ruppa v. American States Ins. Co., 91 Wis.2d 628, 646–47, 284 N.W.2d 318 (1979). Based on these cases, American Family argues that “Barrows' recovery on his claim against Renfrow and LaValla for A.B.'s alleged wrongful death is limited to the recovery A.B. would have been entitled to recover from Renfrow and LaValla had A.B. survived.” However, the issue in this case is not whether Barrows can recover against Renfrow and LaValla, or whether he has a separate and distinct claim arising out of A.B.'s death. The issue is whether American Family must provide coverage for Barrows' claim. None of the cases American Family cites address whether an intra-insured exclusion like the one in American Family's policy applies to a non-insured's claim for an insured's wrongful death.

¶ 15 Because this is an issue of first impression, we look to cases from other jurisdictions for guidance. Courts in the majority of jurisdictions that have...