Martinez v. Calimlim

Decision Date13 September 2010
Docket NumberCase No. 08-CV-00810
Citation739 F.Supp.2d 1142
PartiesIrma MARTINEZ, Plaintiff, v. Jefferson N. CALIMLIM, Elnora M. Calimlim, Jefferson M. Calimlim, Christopher Jack Calimlim, Christina Calimlim, Defendants. State Farm Fire and Casualty Company, Centennial Insurance Company, Atlantic Mutual Insurance Company, West Bend Mutual Insurance Company, Allstate Floridian Insurance Company, Allstate Insurance Company, and General Casualty Company of Wisconsin, Intervenor Defendants.
CourtU.S. District Court — Eastern District of Wisconsin

Jerold S. Solovy, Reena R. Bajowala, Jenner & Block LLP, Chicago, IL, M. Andrew Skwierawski, Robert H. Friebert, S. Todd Farris, Shannon A. Allen, Friebert Finerty & St. John SC, Milwaukee, WI, Martina E. Vandenberg, Sarah A. MaGuire, Jenner & Block LLP, Washington, DC, for Plaintiff.

Andrew W. Erlandson, Hurley Burish & Stanton SC, Madison, WI, Julie L. Belanger, Mark D. Malloy, Leib & Katt LLC, Robert L. Gegios, William E. Fischer, Kohner Mann & Kailas SC, Milwaukee, WI, for Defendants.

DECISION AND ORDER

LYNN ADELMAN, District Judge.

Plaintiff Irma Martinez brought this action claiming defendants, members of the Calimlim family, enslaved her for purposes of extracting forced labor in violation of the Racketeer Influenced & Corrupt Organizations Act ("RICO") and other laws. Various insurers moved to intervene, bifurcate and stay the litigation so that I could address the issue of insurance coverage before that of liability. I have supplemental jurisdiction over the insurers' claims pursuant to 28 U.S.C. § 1367(a) because they form part of the same case or controversy as plaintiff's claims, and I granted the insurers' motions. The insurers now move for summary judgment, arguing that they have no duty to defend defendants against plaintiff's claims.

I. GOVERNING LEGAL PROVISIONS
A. Summary Judgment Standard

Summary judgment is appropriate where "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). I construe the evidence in the light most favorable to the non-movants and draw all reasonable inferences in their favor. Anderson v. Liberty Lobby, 477 U.S. 242, 255, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986).

B. Applicable Law

The parties agree that Wisconsin law governs issues under the Atlantic insurance policies, the West Bend policies and the State Farm policies. Therefore, I will apply Wisconsin law to such issues. See Matter of Stoecker, 5 F.3d 1022, 1028 (7th Cir.1993).

The parties disagree as to what law governs issues under the Allstate and Allstate Floridian policies. The insurers argue that Wisconsin law applies, and plaintiff and defendants argue that Florida law applies. To determine which state's law applies, I apply Wisconsin choice of law rules.Balt. Orioles, Inc. v. Major League Baseball Players Ass'n, 805 F.2d 663, 681 (7th Cir.1986) (stating that federal courts should apply the forum state's choice of law rules to claims over which it has supplemental jurisdiction). Under Wisconsin choice of law rules, I apply Wisconsin law unless doing so would produce a different outcome from that produced by non-forum law. Sharp v. Case Corp., 227 Wis.2d 1, 11, 595 N.W.2d 380 (1999). In a case involving a contract, including a contract of insurance, if an outcome determinative conflict does exist, I apply Wisconsin law unless the non-forum state's contacts with the contract are clearly more significant than Wisconsin's. State Farm Mut. Auto. Ins. Co. v. Gillette, 251 Wis.2d 561, 577, 641 N.W.2d 662 (2002). In the present case, for reasons that I will subsequently discuss, I would reach the same conclusion whether I apply Wisconsin or Florida law. Therefore, I will apply Wisconsin law.

C. Wisconsin Law on Construction of Insurance Policies and Duty to Defend

Under Wisconsin law, the interpretation of an insurance policy is governed by the same rules of construction that apply to other contracts. Sprangers v. Greatway Ins. Co., 182 Wis.2d 521, 536, 514 N.W.2d 1 (1994). The goal is to determine and give effect to the intent of the parties. Am. Family Mut. Ins. Co. v. Am. Girl, Inc., 268 Wis.2d 16, 32, 673 N.W.2d 65 (2004). I interpret undefined words and phrases in an insurance policy as they would be understood by a reasonable insured, giving words and phrases their common and ordinary meaning. Zarder v. Humana Ins. Co., 324 Wis.2d 325, 339, 782 N.W.2d 682 (2010). When the terms of the policy are clear and unambiguous, I may not rewrite them to bind an insurer to a risk it never contemplated and for which it did not receive premiums. Mullen v. Walczak, 262 Wis.2d 708, 713, 664 N.W.2d 76 (2003). Ambiguous terms in the policy are construed in favor of the insured. Zarder, 324 Wis.2d at 339, 782 N.W.2d 682. If words or phrases in a policy are susceptible to more than one reasonable construction, they are ambiguous. Id.

An insurer's duty to defend is broader than its duty to indemnify because the duty to defend is triggered by arguable rather than actual coverage. Newhouse v. Citizens Sec. Mut. Ins. Co., 176 Wis.2d 824, 834-35, 501 N.W.2d 1 (1993). To determine whether an insurer has a duty to defend, I compare the allegations within the four corners of the plaintiff's complaint to the terms of the applicable insurance policy. Id. at 835, 501 N.W.2d 1. If the complaint contains allegations that are partially within the scope of coverage, the insurer must defend the entire suit. See Curtis-Universal, Inc. v. Sheboygan E.M.S., Inc., 43 F.3d 1119, 1122 (7th Cir.1994). The existence of the duty depends on the nature of the claim and has nothing to do with the claim's merits. Liebovich v. Minn. Ins. Co., 310 Wis.2d 751, 766, 751 N.W.2d 764 (2008). Moreover, "[w]hat is important is not the legal label that the plaintiff attaches to the defendant's (that is, the insured's) conduct, but whether that conduct as alleged in the complaint is at least arguably within one or more of the categories of wrongdoing that the policy covers." Curtis-Universal, 43 F.3d at 1122. All doubt as to whether the complaint alleges covered conduct must be resolved in favor of the insured. Gen. Cas. Co. of Wis. v. Hills, 209 Wis.2d 167, 176, 561 N.W.2d 718 (1997).

II. PLAINTIFF'S ALLEGATIONS

Plaintiff alleges that she suffered numerous harms over the course of nineteen years as a result of the actions of the "parent defendants" Jefferson N. Calimlim ("Jefferson Sr.") and Elnora Calimlim ("Elnora"), and the "children defendants,"Jefferson M. ("Jefferson Jr."), Christopher Jack ("Jack"), and Christina Calimlim ("Tina"). Plaintiff alleges that defendants trafficked her into the United States in 1985, and then isolated, concealed, enslaved and exploited her for the purpose of extracting her labor. Plaintiff alleges that defendants "forced her to clean Jefferson Sr.'s office and medical equipment at night several times a month," (Compl. ¶ 44), forced her to clean and repair investment property they owned in Wisconsin, including condominiums and apartments, ( id. ¶ 42-43), and took her to Florida so she could provide labor there in defendant-owned properties. ( id. ¶ 52).

I will refer to additional allegations in the course of the opinion.

III. DISCUSSION
A. The Atlantic Policies

From 1997 to 2004, Atlantic Mutual Insurance Company and Centennial Insurance Company (collectively, the "Atlantic Companies") issued a homeowner's insurance policy on defendants' Wisconsin home, an umbrella policy providing for coverage above that provided by the homeowner's policy, and later a master's policy which combined the homeowner's and umbrella policies. The policies name all defendants as insureds. The homeowner's portion of the master policy is largely identical to the homeowners policy, and the umbrella portion of the master policy is identical to the 2000 and 2001 umbrella policies.

The homeowner's policy states that the insurer will cover "you and your family against financial loss if any of you accidentally hurts someone or damages their property." (Am. Compl., (Dkt. # 145), Ex. A at 23.) It states that "[t]his coverage applies to accidents ... We'll pay money an insured person is legally obligated to pay as damages because of ... bodily injury ... nonbodily injury; or property damage." ( Id.) Bodily injury means "physical harm, sickness, mental anguish or death, including any care required or services lost because of injury." ( Id.) Nonbodily injury means "false arrest, invasion of privacy, wrongful eviction or entry, libel, slander or defamation of character." ( Id.)

The 1998 and 1999 umbrella policies provide coverage for "damages because of personal injury or property damage resulting from occurrences during the policy period." ( Id. Ex. F at 8.) " 'Occurrence' means an accident, including injurious exposure to conditions, which results, during the policy period, in personal injury or property damage, neither expected nor intended from the standpoint of the insured." ( Id. at 10.) The 2000 and 2001 umbrella policies provide coverage for "accidents covered by another liability policy, whether or not it's named on your Schedule of Underlying Insurance." ( Id., Ex. H at 7.) The coverage applies to "any kind of accident, except under the circumstances described in the next section [Damages We Won't Pay]." ( Id. at 8.)

Thus, the Atlantic policies provide liability coverage only for injuries caused by an accident.1 Although not defined in the policies, the word "accident" has been construed by Wisconsin courts on numerous occasions. See Estate of Sustache v. Am. Family Mut. Ins. Co., 311 Wis.2d 548, 565-570, 751 N.W.2d 845 (2008) (discussing recent cases). An accident is "an eventwhich takes place without one's foresight or expectation. A result, though...

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