Beedle v. Wis. Mut. Ins. Co.
| Decision Date | 22 August 2019 |
| Docket Number | Appeal No. 2018AP2147 |
| Parties | Jacob W. BEEDLE, Plaintiff-Appellant, Group Health Cooperative of Eau Claire and Wisconsin Department of Health Services, Subrogated Parties-Plaintiffs, v. WISCONSIN MUTUAL INSURANCE COMPANY, Jeffrey C. Phillips and Pierce J. Phillips, Defendants, IMT Insurance Company, Defendant-Respondent. |
| Court | Wisconsin Court of Appeals |
¶1 Jacob Beedle appeals a summary judgment dismissing IMT Insurance Company ("the insurer") from Beedle’s suit against the insurer and its insured, Pierce Phillips ("the insured"), based on the circuit court’s application of a business exclusion in a homeowner’s insurance policy. While the insured and Beedle were constructing a pole barn together, Beedle was allegedly injured. Beedle alleges that his injury was caused by the insured’s negligence. The insured was primarily employed by a company to construct such barns. However, the particular project that the insured was working on when Beedle was allegedly injured was a side job for the insured that was not part of his primary employment.
¶2 Beedle argues that the court erred in concluding that the business exclusion applies here to bar coverage for losses "arising out of or in connection with a business," the "business" being the insured’s construction of pole barns. Beedle contends that, because the construction project was a side job for the insured and not part of his primary employment, it fell outside the policy’s definition of "business." We disagree with Beedle and agree with the circuit court. We conclude that a reasonable insured in the position of the insured here would understand that the business exclusion applies to exclude coverage for claims arising out of the activity that the insured was engaged in at the time of the alleged injuries. Accordingly, we affirm.
¶3 The following facts are undisputed. The insured worked for Cleary Building Corporation as a foreperson in charge of a crew that constructed pole barns. He agreed to construct a pole barn on his uncle’s farm. While this project involved constructing a pole barn of the same type that the insured constructed in his work for Cleary, the project here was not undertaken pursuant to the insured’s employment with Cleary. Instead, it was a side job for the insured.
¶4 Before work on the project began, the uncle and the insured agreed that the uncle would pay the insured for the work. However, they did not settle on the amount of payment until after construction was complete, when the uncle paid the insured at least $3,000.
¶5 Beedle, a member of the insured’s crew at Cleary, offered to help on the project at the uncle’s farm. Beedle was allegedly injured during the construction. Beedle filed this action against the insured, the insured’s uncle, and their respective insurers, alleging in pertinent part that the insured’s negligence caused Beedle’s alleged injuries.
¶6 At the time of Beedle’s alleged injuries, the insured had a homeowner’s policy that includes coverage for "personal liability" and "medical payments to others," subject to various exclusions. At issue here is an exclusion for losses "arising out of or in connection with a ‘business.’ "1
¶7 The policy defines "business" in the following subdivision, using two paragraphs to describe alternative definitions that we now quote in pertinent part:
¶8 The insurer contested coverage under the policy. The parties stipulated to bifurcating the action to address issues of coverage before determining liability. After the parties conducted discovery, the insurer moved for declaratory judgment and summary judgment, arguing that the policy does not provide coverage.
¶9 The circuit court agreed with the insurer and, accordingly, granted both declaratory and summary judgments and dismissed the insurer from the case. The court based its decision on a test adopted by our supreme court to construe business exclusions in policies similar to the exclusion here. See Bertler v. Employer Ins. of Wausau , 86 Wis. 2d 13, 20-22, 271 N.W.2d 603 (1978) ().
¶10 Beedle appeals the order dismissing the insurer from the case. We provide additional facts as necessary below.
¶11 The parties agree that the dispositive issue in this appeal is whether, based on undisputed facts, the insured’s work in constructing the barn for the uncle was part of "[a] trade" that the insured engaged in on at least an "occasional basis," and therefore the exclusion applies to bar coverage. There is no dispute that the insurer is entitled to summary judgment if the exclusion applies. The parties also agree that whether the business exclusion applies depends on interpretation and application of the policy’s definition of the term "business."
¶12 We now briefly summarize the main arguments of the parties and explain why we agree with the insurer. Thereafter we provide applicable legal standards, address pertinent case law, and explain in more detail why we conclude that paragraph 3.a. of the policy unambiguously excludes coverage here and why we reject Beedle’s contrary arguments.
¶13 The dispute here turns on whether the first paragraph of the definition of "business"—3.a.’s reference to "[a] trade, profession or occupation"—brings Beedle’s claim against the insured within the scope of the business exclusion. The insurer does not argue that the alternative "other activity" definition of "business" in the second paragraph, 3.b., could provide the basis for summary judgment in its favor. However, the parties contest how a reasonable insured would understand paragraphs 3.a. and 3.b., when they are considered together.
¶14 The insurer argues that the only reasonable reading is that paragraph 3.a. applies to activities that constitute any trade, profession, or occupation that the insured at least occasionally engaged in, while 3.b. addresses activities that the insured has not engaged in even occasionally before the alleged injuries at issue and activities such as hobbies that are often not compensated or only nominally compensated. Under this view, 3.a. applies to exclude coverage here, because there is no dispute that the insured at least occasionally engaged in the trade of pole barn construction and that this was the activity he was engaged in when the alleged injuries occurred.
¶15 In contrast, Beedle argues that one reasonable reading is that the exclusive domains of paragraphs 3.a. and 3.b. are defined by whether the insured’s activity at issue is primary employment work of the insured or instead is a side job for the insured. Under this reading, all primary employment work of an insured that might be excluded is addressed in 3.a. and all other work of any kind that might be excluded is addressed in 3.b. As a result, the argument proceeds, "[a] trade, profession or occupation" must involve activities that are part of the insured’s primary source of employment, and all "other activities" must involve non-primary employment. Using this approach, Beedle argues that, because the project here was a side job for the insured, it is governed by 3.b. as work that constitutes "other activity." If this is so, coverage could be excluded only if there is no genuine dispute that the insured made more than $2,000 on side jobs in the year leading up to the policy period. See 3.b.(1) excluding from coverage ("[o]ne or more activities, ... for which no ‘insured’ receives more than $2,000 in total compensation for the 12 months before the beginning of the policy period.").
¶16 For reasons we explain below, we reject Beedle’s argument as an unreasonable reading of the definition of business in paragraph 3.a. of the policy. A reasonable insured would understand that the activity that the insured was engaged in here unambiguously falls within the scope of the business exclusion as "engage[ment] in" "[a] trade," on an "occasional basis." Addressing Beedle’s argument, we conclude that 3.a. is not affected by 3.b.’s exclusion of "other activities" and that our reading does not render 3.b. surplusage.
¶17 "We review a summary judgment pursuant to the same standards and methodology as the circuit court." American Family Mut. Ins. Co. v. American Girl, Inc. , 2004 WI 2, ¶22, 268 Wis. 2d 16, 673 N.W.2d 65. "Summary judgment is properly granted if there is no genuine issue of material fact in dispute and the moving party is entitled to judgment as a matter of law." Id. ; see also WIS. STAT. § 802.08(2) (2017-18). We also review de novo the interpretation and application of insurance policy terms to undisputed facts. See American Girl , 268 Wis. 2d 16, ¶23. The insurer’s parallel request for declaratory relief presents a question of law and turns on the same issue of how to interpret the insurance policy in light of relevant facts, and our review is independent. See Olson v. Farrar , 2012 WI 3, ¶24, 338 Wis. 2d 215, 809 N.W.2d 1 (citing Bellile v. American Family Mut. Ins. Co. , 2004 WI App 72, ¶6, 272 Wis. 2d 324, 679 N.W.2d 827 ).
¶18 We apply the following "well-established principles when interpreting an insurance policy":
...
To continue reading
Request your trial