Hagen v. Gulrud

Decision Date18 May 1989
Docket NumberNo. 88-1020,88-1020
Citation151 Wis.2d 1,442 N.W.2d 570
PartiesElizabeth HAGEN, Plaintiff-Respondent, d v. Gregory GULRUD, Defendant-Respondent, Implement Dealers Mutual Insurance Company, Defendant-Appellant.
CourtWisconsin Court of Appeals

Randall Skiles, and Stern and Skiles Law Office, Madison, on the briefs, for defendant-appellant.

Stephen J. Eisenberg, and Eisenberg Law Offices, S.C., Madison, on the brief, for plaintiff-respondent.

W. Dan Bell, Jr., and Wm. Andrew Sharp, and Bell Law Offices, S.C., Madison, on the brief, for defendant-respondent.

Before GARTZKE, P.J. and DYKMAN and EICH, JJ.

DYKMAN, Judge.

Implement Dealers Mutual Insurance Company appeals from a judgment requiring it to pay insurance proceeds to Elizabeth Hagen for injuries she suffered when Gregory Gulrud sexually assaulted her. Implement Dealers provided homeowner's insurance to Gulrud's mother. The dispositive issue is whether insurance policy coverage for injuries arising out of a nonconsensual sexual assault were within the reasonable expectations of the contracting parties. Because we conclude they were not, we reverse.

Gregory Gulrud was convicted of the second-degree sexual assault of Elizabeth Hagen, contrary to sec. 940.225(2), Stats. 1 Hagen brought a civil action for injuries she suffered in the assault against Gulrud and Implement Dealers. Implement Dealers' homeowner's policy provides that coverages for personal liability and medical payments to others "do not apply to bodily injury or property damage ... which is expected or intended by the insured." A jury concluded that Gulrud had unintentionally caused injuries to Hagen, and awarded her damages. Implement Dealers moved for judgment notwithstanding the verdict because, among other reasons, imposing liability violated the "fortuity principle." The trial court denied this motion.

The interpretation of an insurance policy presents a question of law which we resolve de novo. Cunningham v. Metropolitan Life Ins. Co., 121 Wis.2d 437, 450, 360 N.W.2d 33, 39 (1985). We should construe an insurance policy as a reasonable person in the position of the insured would understand it. Hedtcke v. Sentry Ins. Co., 109 Wis.2d 461, 487, 326 N.W.2d 727, 740 (1982).

Implement Dealers argues that the fortuity principle provides an exception to their insurance contract for any non-fortuitous loss, and refers us to Keeton, Insurance Law, sec. 5.3 (1971), which discusses certain principles and policies underlying exceptions to insurance coverage which are "implicit in the nature of the agreement and the circumstances to which it applies." Id. at 278. The Wisconsin Supreme Court has discussed the fortuity principle, and has adopted some of the specific public policy objectives Keeton discusses. [T]he "principle of fortuitousness" ... is, that insurance covers fortuitous losses and that losses are not fortuitous if the damage is intentionally caused by the insured. Even where the insurance policy contains no language expressly stating the principle of fortuitousness, courts read this principle into the insurance policy to further specific public policy objectives including ... (4) maintaining coverage of a scope consistent with the reasonable expectations of the contracting parties on matters as to which no intention or expectation was expressed. Keeton, Insurance Law, sec. 5.3(a), p. 279 (1971).

Hedtcke, 109 Wis.2d at 483-84, 326 N.W.2d at 738.

Implement Dealers cites language from State Farm Fire and Cas. Co. v. Williams, 355 N.W.2d 421, 424 (Minn.1984), a civil case involving the question of insurance coverage for sexual assault injuries, where the court noted that "[n]either the insured nor the insurer in entering into the insurance contract contemplated coverage against claims arising out of nonconsensual sexual assaults."

In K.A.G. v. Stanford, 148 Wis.2d 158, 165, 434 N.W.2d 790, 793 (Ct.App.1988), we decided a case similar to this one, but on a different theory. We noted that the trial court had dismissed the insurers in that case "because no reasonable person would expect a homeowner's insurance policy to provide coverage for damages resulting from [the defendant's] sexual misconduct...." Id. We suggested that this alternative analysis, based on that used in Rodriguez v. Williams, 42 Wash.App. 633, 713 P.2d 135 (App.), aff'd, 107 Wash.2d 381, 729 P.2d 627 (1986) and Altena v. United Fire and Cas. Co., 422 N.W.2d 485 (Iowa 1988), may be as persuasive as the one used in K.A.G. 148 Wis.2d at 166, 434 N.W.2d at 793.

The issue is whether allowing coverage in this case conflicts with the principle of law adopted by Hedtcke, 2 that is, whether allowing coverage in this case is consistent with the contracting parties' reasonable expectations on matters as to which no intention or expectation was expressed. Hedtcke, 109 Wis.2d at 484, 326 N.W.2d at 738. Although Hedtcke denominates this concern as a "specific public policy objective," it is also a rule of insurance contract construction:

For example, even though the contractual language was ambiguous, there might be no expectation at all, or the expectation might be unreasonable, thus defeating a claimed expansion of coverage beyond the letter of the contract. It seems likely, however, that, even though not often expressed, there has always been an implicit understanding that ambiguities, which in most cases might be resolved in more than just one or the other of two ways, would be resolved favorably to the insured's claim only if a reasonable person in his position would have expected coverage.

Keeton, sec. 6.3(a), p. 352 (footnote omitted).

While no Wisconsin courts have dealt with the issue we address in this case, Altena is especially helpful. 3[W]e think that neither Senard, in purchasing his homeowner's policy, nor UFC, in issuing it, contemplated coverage against claims arising out of nonconsensual sex acts. As one court noted, "[t]he average person purchasing homeowner's insurance would cringe at the very suggestion that [the person] was paying for such coverage. And certainly [the person] would not want to share that type of risk with other homeowner's policyholders." Rodriguez, 42 Wash.App. at 636, 713 P.2d at 137-38.

Altena, 422 N.W.2d at 490.

We conclude, as did the court in Altena, that a person purchasing homeowner's insurance would not expect that he or she was insuring his or her children against liability for their sexual assaults. We also conclude that this person would not want to remove any deterrence that the threat of a money judgment provides. We deem it good public policy to deter sexual assaults. Because Implement Dealers' policy did not express an intention as to sexual assault coverage, we look to the reasonable expectations of Implement Dealers and Gulrud's mother. Hedtcke, 109 Wis.2d at 484, 326 N.W.2d at 738. Contrary to the position of the dissent, and consistent with Altena, we conclude that Implement Dealers and Gulrud's mother would cringe at the very suggestion that they were buying and selling sexual assault insurance.

Because there is no coverage in this case as a matter of law, the jury's finding is irrelevant. We conclude the trial court erred by not granting Implement Dealers' motion for judgment notwithstanding the verdict. 4

Implement Dealers' attorney sent us a letter dated May 12, 1989, bringing additional authority to our attention: Brandt, et al. v. Threshermen's Mutual Insurance Co., et al., No. 88-1274, --- Wis.2d ----, 443 N.W.2d 312 unpublished summary disposition (Wis.Ct.App. Feb. 28, 1989). In Tamminen v. Aetna Casualty & Surety Co., 109 Wis.2d 536, 563-64, 327 N.W.2d 55, 67-68 (1982), the court said:

We note that the petitioner's attorneys ... cite and quote from an unpublished opinion of the court of appeals in violation of Rule 809.23(3). The rule provides:

"An unpublished opinion is of no precedential value and for this reason may not be cited in any court of this state as precedent or authority, except to support a claim of res judicata, collateral estoppel, or law of the case."

As the Judicial Council's comments to the rule reveal, the noncitation rule is essential to the reduction of the overwhelming number of published opinions and is a necessary adjunct to economical appellate court administration. Accordingly, violations of the noncitation rule will not be tolerated. Under Rule 809.83(2), we deem the imposition of a penalty of $50 upon the attorneys for the petitioners to be appropriate and direct that such sum be paid by them to the clerk of this court within twenty (20) days of the date of this opinion.

Tamminen was decided in 1982. We deem the imposition of a $100 penalty upon Implement Dealers' attorney is appropriate and direct that he pay that sum to the clerk of this court within twenty days of the date of this opinion.

Judgment reversed.

EICH, Judge (dissenting).

The jury found that Gulrud did not intend or expect to cause injury to the plaintiff when he sexually assaulted her. This finding, of course, opened the door to coverage under the insurance policy because it defeated the claim that...

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