Landshire Fast Foods v. Employers Mut. Cas. Co., No. 03-0896.

• Court: Court of Appeals of Wisconsin
• Writing for the Court: Before Anderson, P.J., Brown and Snyder, JJ.
• Citation: 269 Wis.2d 775,2004 WI App 29,676 N.W.2d 528
• Parties: LANDSHIRE FAST FOODS OF MILWAUKEE, INC., d/b/a Granny's Homestyle Foods, Plaintiff-Appellant, v. EMPLOYERS MUTUAL CASUALTY COMPANY, Defendant-Respondent.
• Decision Date: 28 January 2004
• Docket Number: No. 03-0896.

269 Wis.2d 775
2004 WI App 29
676 N.W.2d 528

LANDSHIRE FAST FOODS OF MILWAUKEE, INC., d/b/a Granny's Homestyle Foods, Plaintiff-Appellant,¹
v.
EMPLOYERS MUTUAL CASUALTY COMPANY, Defendant-Respondent

No. 03-0896.

Court of Appeals of Wisconsin.

Submitted on briefs September 25, 2003.

Decided January 28, 2004.

269 Wis.2d 777

On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Burton A. Strnad of Burton A. Strnad, S.C., of Milwaukee

On behalf of the defendant-respondent, the cause was submitted on the brief of Jeffrey A. Schmeckpeper of Kasdorf, Lewis & Swietlik, S.C., of Milwaukee.

Before Anderson, P.J., Brown and Snyder, JJ.

269 Wis.2d 778

¶ 1. SNYDER, J

Landshire Fast Foods of Milwaukee, Inc., d/b/a Granny's Homestyle Foods, appeals a summary judgment in favor of Employers Mutual Casualty Company. Landshire contends that the circuit court erred when it concluded that coverage for losses resulting from a bacterial outbreak was excluded under the Employers policy. We disagree and affirm the summary judgment.

FACTS

¶ 2. Landshire prepares sandwiches and other foods for sale to businesses and institutions. In 1999, Landshire began delivering sandwiches to Great Lakes Naval Training Station commissary. On May 31, 2000, Great Lakes reported it had found bacteria, specifically Listeria monocytogenes, on some of Landshire's product. This form of Listeria can cause mild flu-like symptoms in healthy adults; however, in more vulnerable populations such as the elderly, this bacteria can produce a life-threatening illness with a twenty-five percent mortality rate. Great Lakes returned all of the food to Landshire and refused to accept any additional Landshire product.

¶ 3. The Wisconsin Department of Agriculture, Trade & Consumer Protection's Division of Food Safety (WDATC) and the Food and Drug Administration (FDA) began monitoring Landshire. The FDA conducted on-site inspections of Landshire's facilities in June 2000. Subsequently, Landshire entered into two voluntary compliance agreements requiring further recalls of Landshire's product from the marketplace.

¶ 4. Landshire retained Jeffrey Kornacki, a food microbiologist, to observe cleaning and sanitation practices and to test for possible sources of the Listeria.

269 Wis.2d 779

Kornacki concluded that the Berkel slicer used by Landshire to cut meats was the "sole source of the Listeria contamination to the products."

¶ 5. On August 31, 2000, Landshire submitted a "Corrective Action Plan" to the FDA. Landshire declared that it would no longer use the Berkel slicer, but would buy presliced meat from outside venders. The plan also included new sanitizing practices, employee training sessions, and random testing of the products.

¶ 6. During this time, Landshire held a commercial property insurance policy issued by Employers. Landshire submitted claims for loss of income, loss of product, sanitizing expenses, and costs related to investigating the source of the bacteria. Employers denied all of Landshire's claims because they were not the result of a "covered cause of loss."

¶ 7. Landshire sought a declaratory judgment against Employers to compel coverage. Employers moved for summary judgment, and Landshire responded with its own motion for partial summary judgment. The circuit court determined that none of Landshire's claims for damages were compensable under the insurance policy and dismissed the complaint on the merits. Landshire appeals.

DISCUSSION

Standard of Review

[1, 2]

¶ 8. We review summary judgment motions de novo. Blazekovic v. City of Milwaukee, 225 Wis. 2d 837, 840, 593 N.W.2d 809 (Ct. App. 1999). Summary judgment is proper when no genuine issues of material fact exist and the moving party is entitled to judgment as a

269 Wis.2d 780

matter of law. WIS. STAT. § 802.08(2).² We will reverse a decision granting summary judgment if either (1) the trial court incorrectly decided legal issues or (2) material facts are in dispute. Coopman v. State Farm Fire & Cas. Co., 179 Wis. 2d 548, 555, 508 N.W.2d 610 (Ct. App. 1993). Because both Landshire and Employers moved for summary judgment, we may assume the relevant facts regarding coverage are undisputed. See Powalka v. State Mut. Life Assurance Co. of Am., 53 Wis. 2d 513, 518, 192 N.W.2d 852 (1972). The only dispute before us, therefore, involves interpretation of the Employers insurance policy

[3, 4]

¶ 9. The interpretation of an insurance contract is a question of law that this court decides without deference to the trial court. Meyer v. Mich. Mut. Ins. Co., 2000 WI App 37, ¶ 8, 233 Wis. 2d 221, 607 N.W.2d 333. Summary judgment is proper and will be upheld on review when only a question of law is presented. Hubbard v. Messer, 2003 WI 145, ¶ 7, 267 Wis. 2d 92, 673 N.W.2d 676. Having determined that only a question of law remains, we turn our attention to whether the trial court correctly decided the legal issues.

Interpretation and Application of Policy Provisions

¶ 10. Landshire raises three issues on appeal. First, Landshire asserts that the pollution exclusion in the Employers policy does not include bacteria and therefore cannot be invoked to exclude coverage for the Listeria outbreak. Landshire further argues that although Employers' policy excludes losses caused...