Malik v. American Family Mut. Ins. Co.

• Decision Date: 22 March 2001
• Docket Number: No. 00-1129.,00-1129.
• Citation: 625 N.W.2d 640,2001 WI App 82,243 Wis.2d 27
• Parties: Christina MALIK, Plaintiff-Appellant, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Matthew J. Herman and Patricia Herman, Defendants-Respondents.
• Court: Wisconsin Court of Appeals

243 Wis.2d 27

2001 WI App 82

625 N.W.2d 640

Christina MALIK, Plaintiff-Appellant, v. AMERICAN FAMILY MUTUAL INSURANCE COMPANY, Matthew J. Herman and Patricia Herman, Defendants-Respondents.

No. 00-1129.

Court of Appeals of Wisconsin.

Submitted on briefs January 5, 2001.

Decided March 22, 2001.

On behalf of the plaintiff-appellant, the cause was submitted on the briefs of M. Nicol Padway, Esq. of Padway & Padway, Ltd., Milwaukee.

On behalf of the defendants-respondents, the cause was submitted on the briefs of Maile E. Buell and Agatha K. Kresa of Borgelt, Powell, Peterson & Frauen, S.C., Milwaukee.

On behalf of the defendant-respondent, American Family Mut. Ins. Co., the cause was submitted on the brief of Michael J. Wirth of Peterson, Johnson & Murray of Milwaukee. Before Dykman, P.J., Vergeront and Roggensack, JJ.

¶ 1. VERGERONT, J.

Christina Malik was bitten by a dog, owned by Matthew and Patricia Herman, which she was caring for while the Hermans were on vacation. She appeals the summary judgment dismissing American Family Insurance Company because, the trial court concluded, there was no coverage under the Hermans' homeowners insurance policy. Malik also appeals the summary judgment dismissing the claim against the Hermans under WIS. STAT. § 174.02(1) (1999-2000),¹ the dog bite statute, and the court's dismissal of her claim for double damages under § 174.02(1)(b) for the Hermans' alleged common law negligence.

¶ 2. We conclude the homeowners policy does not provide coverage for Malik's claims against the Hermans because at the time she was injured she was an insured under the policy, and the intra-insured exclusion therefore applied. We also conclude Malik was a keeper of a dog and therefore an owner under WIS. STAT. §§ 174.02(1) and 174.001(5), and accordingly she may not recover under the statute, notwithstanding that she has alleged the Hermans are negligent. Finally, we conclude that because Malik may not recover under the statute, she may not recover double damages under § 174.02(1)(b) on her common law negligence claim. We therefore affirm.

BACKGROUND

¶ 3. For purposes of this appeal, the facts are not in dispute. The Hermans and Malik were friends. The Hermans asked Malik to care for their dog, Corky, a springer spaniel, while they were on a one-week vacation, and Malik agreed. Malik did so as a favor and did not receive any compensation. Malik brought the dog to her house. Corky had been at Malik's house three nights when Corky bit Malik on her left hand. Humane Society employees removed Corky from Malik's home after the incident.

¶ 4. At the time of the incident, the Hermans had in effect a homeowners insurance policy issued by American Family. Malik's complaint alleged the Hermans were negligent in various ways, that under WIS. STAT. § 174.02 they were strictly liable to her for double her damages, and that their homeowners policy covered their liability.

¶ 5. American Family and the Hermans both moved for summary judgment. American Family contended there was no coverage under the policy because Malik was an insured under the policy and the policy excluded coverage for bodily injury to an insured. The Hermans contended they were not liable to Malik under WIS. STAT. § 174.02 because at the time of the incident she was a keeper of the dog within the meaning of that statute. They also contended they were not negligent because they were not aware, nor in the exercise of reasonable care should they have been aware, that Corky possessed vicious or mischievous propensities to injure others.

¶ 6. The trial court agreed with American Family that its policy did not provide coverage for any liability the Hermans might have to Malik, and it dismissed the insurer. The court denied the Hermans' motion with respect to the negligence claim, allowing Malik to pursue that claim; but the court granted their motion with respect to the statutory claim and dismissed it. Relying on Armstrong v. Milwaukee Mut. Ins. Co., 202 Wis. 2d 258, 549 N.W.2d 723 (1996), the court concluded that because Malik was a keeper and therefore an owner within the meaning of the statute, Malik could not maintain an action against the Hermans. The court also ruled that double damages under WIS. STAT. § 174.02(1)(b) were available only for a violation of the statute and not for common law negligence.

¶ 7. On appeal, Malik challenges the dismissal of American Family, the dismissal of the statutory claim against the Hermans, and the court's ruling that double damages were not available under WIS. STAT. § 174.02(1)(b) for her common law negligence claim.

DISCUSSION

[1]

¶ 8. We review a trial court's decision to grant summary judgment de novo, applying the same methodology as the trial court. Fifer v. Dix, 2000 WI App 66, ¶ 5, 234 Wis. 2d 117, 608 N.W.2d 740. Summary judgment is proper when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Id.

Homeowners Insurance Coverage

¶ 9. The Hermans' homeowners insurance policy provides:

5. Insured

a. Insured means you and, if residents of your household:

(1) your relatives; and

(2) any other person under the age of 21 in your care or in the care of your resident relatives.

b. Under Personal Liability and Medical Expense Coverages, insured also means:

(1) any person or organization legally responsible for a watercraft or animal owned by any person included in paragraph a. to which Section II Coverages apply. This does not include a person or organization using or having custody of the watercraft or animal in the course of any business or without your specific permission.

. . . .

LIABILITY COVERAGES — SECTION II

COVERAGE D — PERSONAL LIABILITY COVERAGE. 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 ["an accident, including exposure to conditions, which results during the policy period result in bodily injury or property damage"] covered by this policy.

. . . .

COVERAGE E — MEDICAL EXPENSE COVERAGE. We will pay the medical expenses which are incurred or medically ascertained within three years from the date of an accident causing bodily injury covered by this policy. This coverage applies only:

. . . .

2. to a person away from the insured premises if the bodily injury:

. . . .

d. is caused by an animal owned by or in the care of any insured;

. . . .

EXCLUSIONS — SECTION II

. . . .

11. Intra-insured Suits. We will not cover bodily injury to any insured.

[2-5]

¶ 10. The interpretation of an insurance contract is a question of law, which we review de novo. Danbeck v. American Family Mut. Ins. Co., 2000 WI App 26, ¶ 5, 232 Wis. 2d 417, 605 N.W.2d 925,review granted,234 Wis. 2d 175, 612 N.W.2d 732 (Wis. Apr. 28, 2000) (No. 99-1142). We construe the words in an insurance contract as a reasonable person in the position of an insured would understand them. Id. at ¶ 6. A word or phrase in an insurance contract is ambiguous if it is susceptible to more than one reasonable construction, and whatever ambiguity exists is resolved against the insurer as the drafter. Id. However, when the terms of a policy are plain on their face, we may not rewrite them. Id.

¶ 11. Malik contends the trial court erred in concluding she was an "insured" under the plain language of the policy and therefore was excluded under the intra-insured exclusion. Malik's position is that there is ambiguity in the policy language, so it must be construed against the insurer; if it is not so construed, she asserts, the intra-insured exclusion results in illusory coverage, which is against public policy.

¶ 12. According to Malik, a reasonable insured would understand the Hermans are insureds under 5(a) of the insurance policy and that 5(b)(1) expands the definition of "insured" so that if a person who is legally responsible for the Hermans' dog becomes liable to a third person, the person responsible for the dog, as well as the Hermans, is covered under the policy. A reasonable insured would not expect, Malik continues, that the expanded definition of "insured" in 5(b)(1) reduces the personal liability and medical expense coverage available for the Hermans' liability for injury caused by the dog they own.

¶ 13. The problem with Malik's reading of the insurance policy is that it does not take into account the intra-insured exclusion. That exclusion uses the term "insured," which is in bold type, indicating it has the meaning defined in the policy,² and, Malik does not contend she is not an insured under paragraph (b)(1) of that definition. ¶ 14. Instead of focusing on the language of the intra-insured exclusion, Malik focuses on the case law that has described the purpose of exclusions for bodily injury to an insured, when "insured" is defined to include certain household residents. In Shannon v. Shannon, 150 Wis. 2d 434, 456, 442 N.W.2d 25 (1989), the court held that exclusion was not against public policy because it served the legitimate purpose of protecting insurers from situations where the insured, because of close family ties to the injured party, might not be cooperative with the insurance company's administration and defense of the claim. See also Whirlpool Corp. v. Ziebert, 197 Wis. 2d 144, 149, 539 N.W.2d 883 (1995). Malik contrasts the situation in this case because she is not a member of the Hermans' family or resident of their household and, therefore, she contends, the rationale that was the basis for the exclusion considered in Shannon and Whirlpool is not furthered by applying the exclusion to her.

¶ 15. In articulating the purpose of the exclusions in Shannon and Whirlpool, the court did not suggest it would be against public policy to have an exclusion that was broader in scope than suits by family members or residents of the insured's household. Therefore, those cases do not shed any light on the proper construction of the...