Estate of Sustache v. American Family

Decision Date10 July 2008
Docket NumberNo. 2006AP939.,2006AP939.
Citation2008 WI 87,751 N.W.2d 845
PartiesESTATE OF James B. SUSTACHE, by its Special Administrator, James Sustache, and Antoinette Sustache, Plaintiffs, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Defendant-Respondent, Carrie A. Roman, Defendant, Larry Mathews and Jeffrey W. Mathews, Defendants-Appellants-Petitioners.
CourtWisconsin Supreme Court

For the defendants-appellants-petitioners there were briefs by John V. O'Connor and O'Connor, Dumez, Alia & McTernan, S.C., Kenosha, and oral argument by John V. O'Connor.

For the defendant-respondent there was a brief by Terry J. Booth and Piper & Schmidt, Milwaukee, and oral argument by Terry J. Booth.

An amicus curiae brief was filed by James A. Friedman, Katherine Stadler, and Godfrey & Kahn, S.C., Madison, on behalf of the Wisconsin Insurance Alliance.

¶ 1 DAVID T. PROSSER, J

This is a review of a published decision of the court of appeals,1 which affirmed an order of the Kenosha County Circuit Court, Wilbur W. Warren III, Judge.

¶ 2 In this insurance coverage dispute, the circuit court entered summary judgment dismissing defendant American Family Mutual Insurance Company (American Family), which insured, under separate policies: (1) defendants Larry Mathews (Mathews) and Jeffrey W. Mathews (Jeffrey),2 and (2) defendant Carrie A. Roman (Roman). American Family provided an initial defense to the Mathewses and Roman under a reservation of rights and moved to stay the proceeding on liability until the issue of coverage was resolved. In this review, only the dismissal of American Family with respect to the defense of the Mathewses is before us.

¶ 3 The issue presented is whether an insurer has a duty to defend an insured, under the liability coverage provisions of a homeowner's insurance policy, when the plaintiffs' complaint asserts that the insured "without warning or provocation, punched decedent out, causing him to fall into a curb thereby causing serious injuries and ultimately death," leading to a count of "battery ... by intentionally causing bodily harm ... thereby causing decedent's death." Relying on Berg v. Fall, 138 Wis.2d 115, 405 N.W.2d 701 (Ct.App. 1987), the Mathewses contend that Jeffrey's affirmative defense of self-defense requires the insurer to look beyond the four corners of the complaint to continue to provide a defense.

¶ 4 After carefully considering the facts and circumstances of this case, especially the allegations of the complaint and the pertinent homeowner's policy, we conclude that the Mathewses' homeowner's policy does not provide coverage for the plaintiffs' claims. Consequently, American Family has no duty to continue to defend the Mathewses. Accordingly, we affirm the court of appeals.

I. BACKGROUND

¶ 5 James B. Sustache (Sustache) died from injuries sustained after an altercation at an underage drinking party hosted by Roman and her minor son, Anthony Fuller. During this altercation, Jeffrey punched Sustache in the face, causing him to fall to the curb and sustain severe injuries that ultimately led to his death. The altercation stemmed from events earlier that evening when "a number of [party attendees] started calling [Jeffrey] on his cell phone," harassing and goading him to "come over to the party to engage in a fight with [Sustache]." There is no dispute that Jeffrey intended to strike Sustache; there is also no dispute that Jeffrey did not intend his blow to be fatal.3

¶ 6 Sustache's estate and his parents, James and Antionette Sustache, sued Jeffrey, Mathews, Roman, and American Family, which had issued separate homeowner's insurance policies to Roman and Mathews. The plaintiffs' first amended complaint alleged five causes of action, four of which relate to the defendants participating in this appeal.4 Count 2 alleged that Jeffrey negligently failed to inquire into the true source of the phone calls before striking Sustache. Count 3 alleged that "[Jeffrey] committed battery without provocation by intentionally causing bodily harm to [Sustache] without [his] consent thereby causing [his] death." Count 4 sought to hold Mathews vicariously liable for Jeffrey's "willful, malicious and wanton" acts pursuant to Wis. Stat. § 895.035.5 Count 5 sought punitive damages for Jeffrey's "willful, wanton and malicious" acts.6

¶ 7 Although the plaintiffs' opening complaint did not identify American Family as the Mathewses' insurer, American Family provided a defense under a reservation of rights. The assigned attorney filed an answer to the plaintiffs' first amended complaint denying all allegations against the Mathewses and affirmatively defending, in part, on the ground that Jeffrey acted in self-defense.

¶ 8 The Mathewses' American Family homeowner's policy provides personal liability coverage for an "insured," which includes both Mathews and Jeffrey. Specifically, the 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."

¶ 9 The policy defines "occurrence" as "an accident, including exposure to conditions, which results during the policy period, in: a. bodily injury; or b. property damage." The term "accident" is not defined in the policy.

¶ 10 The policy enumerates the following exclusions from coverage:

8. Illegal Consumption of Alcohol. We will not cover bodily injury or property damage arising out of the insured's knowingly permitting or failing to take action to prevent the illegal consumption of alcohol beverages by an underage person.

9. Imputed Liability. We will not cover bodily injury or property damage arising out of any liability imputed to any insured which is otherwise excluded in this policy.

10. Intentional Injury. We will not cover bodily injury or property damage caused intentionally by or at the direction of any insured even if the actual bodily injury or property damage is different than that which was expected or intended from the standpoint of any insured.

The policy also provides that personal liability coverage does not extend to punitive damages.

¶ 11 The policy includes a defense provision that also references an "occurrence." The defense provision states:

Defense Provision.

If a suit is brought against any insured for damages because of bodily injury or property damage caused by an occurrence to which this policy applies, we will provide a defense at our expense by counsel of our choice. We will defend any suit or settle any claim for damages payable under this policy as we think proper. (Emphasis added.)

¶ 12 On December 27, 2005, American Family moved for summary judgment on the grounds that its policy did not cover the plaintiffs' claims and that it had no duty to continue to defend the Mathewses because: (1) the plaintiffs' damages were not caused by an "occurrence" covered under the policy; (2) the policy expressly excluded coverage for punitive damages; (3) the policy expressly excluded coverage for imputed liability—such as vicarious liability under Wis. Stat. § 895.035"which is otherwise excluded in th[e] policy"; and (4) the policy expressly excluded coverage for intentional injury. American Family asserted that the four-corners rule, which provides that an insurer's duty to defend is determined solely on the allegations in the complaint, not extrinsic facts, precluded any inquiry into Jeffrey's self-defense claim.

¶ 13 The Mathewses opposed American Family's motion by relying upon the court of appeals' opinion in Berg, which carved out an exception to the four-corners rule in a situation where the insured's claim of self-defense renders an intentional acts exclusion ambiguous. Berg, 138 Wis.2d at 120-21, 405 N.W.2d 701. American Family responded that Berg does not apply because the policy language at issue here differs significantly from that in Berg. American Family also asserted that Berg contradicted the four-corners rule of earlier supreme court decisions and that subsequent supreme court decisions had undermined Berg's continuing validity.

¶ 14 While acknowledging the similarities between Berg and the case at bar, the circuit court concluded that the four-corners rule "has been well settled law in the State of Wisconsin for many decades." Based on the allegations in the plaintiffs' first amended complaint, the circuit court held that American Family had no duty to defend the Mathewses because coverage was excluded. The court granted summary judgment to American Family and dismissed the insurer from the plaintiffs' suit. The Mathewses appealed.

¶ 15 The court of appeals affirmed in a published opinion. Estate of Sustache v. Am. Family Mut. Ins. Co., 2007 WI App 144, ¶ 21, 303 Wis.2d 714, 735 N.W.2d 186. The court of appeals observed a tension between its opinion in Berg, which adopted an ambiguity exception to the four-corners rule, and this court's subsequent decisions in Doyle v. Engelke, 219 Wis.2d 277, 580 N.W.2d 245 (1998), and Smith v. Katz, 226 Wis.2d 798, 595 N.W.2d 345 (1999). Estate of Sustache, 303 Wis.2d 714, ¶¶ 15-16, 735 N.W.2d 186. The court of appeals concluded that this court's opinions in Doyle and Smith tacitly overruled Berg and Grieb v. Citizens Casualty Co., 33 Wis.2d 552, 148 N.W.2d 103 (1967), which the Berg court had cited. Estate of Sustache, 303 Wis.2d 714, ¶ 21, 735 N.W.2d 186. Following Doyle and Smith, the court of appeals concluded that Wisconsin law does not recognize exceptions to the four-corners rule and affirmed the circuit court. Id., ¶ 21.

¶ 16 The Mathewses petitioned this court for review, which we granted on September 13, 2007.

II. ANALYSIS
A. Standard of Review

¶ 17 We review a grant of summary judgment de novo, relying on the same methodology as the circuit court. Doyle, 219 Wis.2d at 283, 580 N.W.2d 245 (citation omitted). Summary judgment is proper where the record demonstrates that no genuine issue as to any material...

To continue reading

Request your trial
119 cases
  • Anderson v. Kayser Ford, Inc.
    • United States
    • Wisconsin Court of Appeals
    • February 7, 2019
    ...indemnify Kayser.I. POLICY LANGUAGE ¶14 We construe policy terms as they would be understood by a reasonable insured. Sustache v. American Family Mut. Ins. Co. , 2008 WI 87, ¶19, 311 Wis.2d 548, 751 N.W.2d 845.¶15 The following is pertinent policy language that addresses claims of the type ......
  • Water Well Solutions Serv. Grp. Inc. v. Consol. Ins. Co.
    • United States
    • Wisconsin Supreme Court
    • June 30, 2016
    ...to defend its insured. Interpretation of an insurance contract presents a question of law that we review de novo. Estate of Sustache v. Am. Family Mut. Ins. Co., 2008 WI 87, ¶ 18, 311 Wis.2d 548, 751 N.W.2d 845.III. ANALYSISA. Typical Process used in Duty to Defend Determinations¶ 13 Before......
  • Jones v. Baecker
    • United States
    • Wisconsin Court of Appeals
    • December 28, 2016
    ...terms of the entire insurance policy." Water Well Sols. Serv. Grp. , 369 Wis.2d 607, ¶15, 881 N.W.2d 285 (citing Estate of Sustache v. American Family Mut. Ins. Co. , 2008 WI 87, ¶20, 311 Wis.2d 548, 751 N.W.2d 845 ; Doyle v. Engelke , 219 Wis.2d 277, 284 & n.3, 580 N.W.2d 245 (1998) ; and ......
  • Choinsky v. Emp'rs Ins. Co. of Wausau
    • United States
    • Wisconsin Supreme Court
    • February 13, 2020
    ...or when an insured who is served with a complaint alleging a covered claim tenders the defense to its insurer. See Estate of Sustache v. Am. Family Mut. Ins. Co., 2008 WI 87, ¶27, 311 Wis. 2d 548, 751 N.W.2d 845 (quoted sources omitted).7 The "four corners" rule is used to determine whether......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT