Donna Heinecke & Estate of Berry v. Aurora Healthcare, Inc.
| Decision Date | 03 September 2013 |
| Docket Number | No. 2012AP2469.,2012AP2469. |
| Court | Wisconsin Court of Appeals |
| Parties | Donna HEINECKE and Estate of Charlene J. Berry, by its Special Administrator Ryan A. Berry, Plaintiffs, Aetna Health Insurance Company and Department of Health and Human Services, Involuntary–Plaintiffs, v. AURORA HEALTHCARE, INC., Aurora Health Care Metro, Inc., d/b/a Aurora St. Luke's South Shore Hospital and Continental Casualty Company, d/b/a CNA Insurance, Defendants–Third–Party, Plaintiffs–Co–Appellants, v. Creative Business Interiors, Inc., Third–Party Defendant–Appellant. The Midwestern Indemnity Company and Hawkeye–Security Insurance Company, Third–Party Defendants–Respondents. Garry A. Seip, Plaintiff, Travelers Property Casualty Company of America and Smith & Nephew, Inc. Welfare Benefit Plan, Involuntary–Plaintiffs, v. Aurora Healthcare, Inc., Aurora Health Care Metro, Inc., d/b/a Aurora St. Luke's South Shore Hospital and Continental Casualty Company, Defendants–Third–Party Plaintiffs–Co–Appellants, v. Creative Business Interiors, Inc., Third–Party Defendant–Appellant.<SUP>†</SUP> The Midwestern Indemnity Company and Hawkeye–Security Insurance Company, Third–Party Defendants–Respondents. Joseph G. Romanak and Margaret Romanak, Plaintiffs, Kathleen Sebelius, Secretary of Department of Health and Human Services, Involuntary–Plaintiff, v. Aurora Healthcare, Inc., Aurora Health Care Metro, Inc., d/b/a Aurora St. Luke's South Shore Hospital and Continental Casualty Company, Defendants–Third–Party Plaintiffs–Co–Appellants, v. Creative Business Interiors, Inc., Third–Party Defendant–Appellant.<SUP>†</SUP> The Midwestern Indemnity Company and Hawkeye–Security Insurance Company, Third–Party Defendants–Respondents. Carrie C. Rosa, Special Administrator of the Estate of Margaret E. Wescott, Plaintiff, v. State of Wisconsin Department of Health Services, Defendant, Aurora Healthcare, Inc., Aurora Health Care Metro, Inc., d/b/a Aurora St. Luke's South Shore Hospital and Continental Casualty Company, Defendants–Third–Party Plaintiffs–Co–Appellants, v. Creative Business Interiors, Inc., Third–Party Defendant–Appellant.<SUP>†</SUP> The Midwestern Indemnity Company and Hawkeye–Security Insurance Company, Third–Party Defendants–Respondents. Rosemary Albrecht, individually and as Special Administrator of the Estate of Robert L. Albrecht and Scott Albrecht, Plaintiffs, Medicare Parts A, B & D c/o Centers for Medicare Services Insurance Company and Pacificare Life and Health Insurance Co., Involuntary–Plaintiffs, v. Aurora Healthcare, Inc., Aurora Health Care Metro, Inc., d/b/a Aurora St. Luke's South Shore Hospital and Continental Casualty Company, d/b/a CNA Insurance, Defendants–Third–Party Plaintiffs–Co–Appellants, v. Creative Business Interiors, Inc., Third–Party Defendant–Appellant.<SUP>†</SUP> The Midwestern Indemnity Company and Hawkeye–Security Insurance Company, Third–Party Defendants–Respondents. |
OPINION TEXT STARTS HERE
On behalf of the third-party defendant-appellant, Creative Business Interiors, Inc. and joined by the defendants-third-party plaintiffs-co-appellants, Aurora Healthcare, Inc.; Aurora Health Care Metro, Inc. and Continental Casualty Company the cause was submitted on the briefs of Ross A. Anderson and Benjamin W. Dyer of Whyte Hirschboeck Dudek S.C., Milwaukee.
On behalf of the third-party defendants-respondents, Midwestern Indemnity Company and Hawkeye–Security Insurance Company the cause was submitted on the brief of Thomas R. Schrimpf of Hinshaw & Culbertson LLP, Milwaukee.
Before CURLEY, P.J., FINE and BRENNAN, JJ.¶ 1BRENNAN, J.
Creative Business Interiors, Inc. (“CBI”), Aurora Healthcare, Inc., and Aurora Health Care Metro, Inc. (collectively “Aurora”), and Continental Casualty Company (“Continental”) all appeal from the circuit court's order granting summary judgment and dismissing The Midwestern Indemnity Company (“Midwestern”) and Hawkeye–Security Insurance Company (“Hawkeye”) from this lawsuit.1 The sole issue before this court is whether the Consumption Exception to the Fungi or Bacteria Exclusion included in CBI's insurance policies encompasses a decorative water fountain such that the exception reinstates coverage. Because we conclude that defining a decorative water fountain as “a good or product intended for consumption” does not comport with the parties' objectively reasonable expectations, we affirm.
¶ 2 The numerous plaintiffs in this case brought a consolidated lawsuit, alleging that they contracted Legionnaire's disease after they were exposed to bacteria present in the water of a decorative water fountain (“the Fountain”) located in the lobby of Aurora St. Luke's South Shore Hospital (“the Hospital”). Legionnaire's disease is a type of pneumonia caused by the Legionella bacteria. The bacteria grow best in warm water, like the kind found in hot tubs, cooling towers, hot water tanks, large plumbing systems, or parts of air-conditioning systems of large buildings. Legionnaire's disease is contracted by breathing in mist or vapor that has been contaminated with Legionella bacteria.
¶ 3 CBI contracted with Aurora Healthcare to renovate the Hospital's lobby. As part of the project, CBI was to construct and install the Fountain at the Hospital. Consequently, after Aurora was sued by the plaintiffs, Aurora and its insurer filed a third-party complaint, naming CBI as a defendant in each of the plaintiff's actions. Midwestern and Hawkeye, as CBI's insurers, were later joined as third-party defendants under the direct-action statute.
¶ 4 To protect its business operations, CBI purchased a Commercial General Liability Policy from Midwestern (“the Midwestern Policy”). The Midwestern Policy is subject to a number of exclusions, including the Fungi or Bacteria Exclusion, which reads:
2. Exclusions
This insurance does not apply to:
Fungi or Bacteria
a. “Bodily injury” or “property damage” which would not have occurred, in whole or in part, but for the actual, alleged or threatened inhalation of, ingestion of, contact with, exposure to, existence of, or presence of, any “fungi” or bacteria on or within a building or structure, including its contents, regardless of whether any other cause, event, material or product contributed concurrently or in any sequence to such injury or damage.
b. Any loss, cost or expenses arising out of the abating, testing for, monitoring, cleaning up, removing, containing, treating, detoxifying, neutralizing, remediating or disposing of, or in any way responding to, or assessing the effects of, “fungi” or bacteria, by any insured or by any other person or entity.
However, the policy includes an exception to the exclusion, which the parties have named the “Consumption Exception.” The Consumption Exception states:
This exclusion does not apply to any “fungi” or bacteria that are, are on, or are contained in, a good or product intended for consumption.
¶ 5 CBI also purchased an Umbrella policy covering the same time period from Hawkeye (“the Hawkeye Policy”). The Hawkeye Policy contains a nearly identical Fungi or Bacteria Exclusion:
EXCLUSION—FUNGI OR BACTERIA
This endorsement modifies insurance provided under the following:
COMMERCIAL UMBRELLA LIABILITY COVERAGE PART
1. The following are added to paragraph 3. Exclusions under SECTION 1—COVERAGE:
a. This insurance does not apply to:
Fungi Or Bacteria—Bodily Injury Or Property Damage(1) “Bodily injury” or “property damage” which would not have occurred, in whole or in part, but for the actual, alleged or threatened inhalation of, ingestion of, contact with, exposure to, existence of, or presence of, any “fungi” or bacteria on or within a building or structure, including its contents, regardless of whether any other cause, event, material or product contributed concurrently or in any sequence to such injury or damage.
(2) Any loss, cost or expenses arising out of the abating, testing for, monitoring, cleaning up, removing, containing, treating, detoxifying, neutralizing, remediating or disposing of, or in any way responding to, or assessing the effects of “fungi” or bacteria, by any insured or by any other person or entity.
The Hawkeye Policy also includes an identical Consumption Exception, which, like the Midwestern Policy Consumption Exception, states:
This exclusion does not apply to any “fungi” or bacteria that are, are on, or are contained in, a good or product intended for consumption.
¶ 6 In July 2012, Midwestern and Hawkeye jointly moved for summary judgment, seeking a ruling from the court that the Fungi or Bacteria Exclusion contained in their respective policies excluded any coverage to CBI for the claims alleged in these consolidated cases. CBI opposed summary judgment, arguing that the Consumption Exception reinstated coverage. The circuit court granted the motion, finding that the exclusion applied and that the exception did not, thereby precluding coverage. As such, the circuit court entered a written order on October 24, 2012, dismissing all the claims against the two insurance companies. CBI appeals.
¶ 7 The parties here all agree, for the purposes of this appeal, that the Fungi or Bacteria Exclusion in the Midwestern and Hawkeye insurance policies precludes coverage to CBI for the lawsuits brought by the plaintiffs. However, CBI asks us to reverse the circuit court's decision dismissing Midwestern and Hawkeye from the case because CBI believes that the Fountain, as a decorative art feature, was “intended for consumption” so as to be excepted from the Bacteria or Fungi Exclusion by the Consumption Exception. We disagree.
¶ 8 This case requires us to review the circuit court's order for summary judgment. We review a grant of summary judgment by applying the standards set forth in Wis. Stat. § 802.08(2) (2011–12),2 just as the circuit court applied those same standards. Green Spring Farms v. Kersten, 136 Wis.2d 304, 315, 401 N.W.2d 816 (1987). Where, as here, the facts are not in dispute, the only question on...
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