Qualman v. Bruckmoser

• Citation: 163 Wis.2d 361,471 N.W.2d 282
• Decision Date: 15 May 1991
• Docket Number: No. 90-2431,90-2431
• Parties: Richard K. QUALMAN, and Diana M. Qualman, Plaintiffs, v. Ludwig BRUCKMOSER, and Annie M. Bruckmoser, Defendants-Appellants, American Family Insurance Company, Defendant-Respondent, Neumann Realty Co., Inc., Richard Neumann and Rose Neumann, Defendants.
• Court: Court of Appeals of Wisconsin

Page 282

471 N.W.2d 282

163 Wis.2d 361

Richard K. QUALMAN, and Diana M. Qualman, Plaintiffs, v. Ludwig BRUCKMOSER, and Annie M. Bruckmoser, Defendants-Appellants, American Family Insurance Company, Defendant-Respondent,

Neumann Realty Co., Inc., Richard Neumann and Rose Neumann,

Defendants.

No. 90-2431.

Court of Appeals of Wisconsin.

Submitted on Briefs April 19, 1991.

Opinion Released May 15, 1991.

Opinion Filed May 15, 1991.

David H. Hutchinson of Machulak, Hutchinson, Robertson & Dwyer, S.C., on the briefs, Milwaukee, for defendants-appellants.

Michael F. Flaherty of American Family Ins. Co., on the brief, Milwaukee, for defendant-respondent.

Before NETTESHEIM, P.J., and BROWN and SCOTT, JJ.

SCOTT, Judge.

The trial court granted summary judgment dismissing the claims of the plaintiffs, Richard K. and Diana M. Qualman, and the cross-claim of the defendants, Ludwig and Annie M. Bruckmoser. The trial court held that there was no coverage in the homeowner's policy issued by American Family Insurance Company to the Bruckmosers for the claims alleged by the Qualmans against the Bruckmosers, and that American Family therefore had no duty to defend the Bruckmosers. The Bruckmosers appeal from the judgment. Because we agree with the trial court's conclusion that there is no coverage in the policy, we affirm.

The Bruckmosers sold their house to the Qualmans, closing the transaction on August 26, 1983. On August 25, 1989, the Qualmans filed an action against the Bruckmosers, based on alleged negligent and intentional misrepresentation and breach of contract in selling the house. The Qualmans alleged that the house had cracked basement walls and defective kitchen pipes, and that the Bruckmosers misrepresented these known conditions and breached the contract.

The Bruckmosers had a homeowner's policy with American Family in full force at the time of sale. Relying on that policy, the Bruckmosers tendered their defense to American Family, but American Family declined to defend them. On March 25, 1990, the Qualmans filed an amended complaint and named American Family as a defendant. On July 6, 1990, the Bruckmosers filed a cross-claim against American Family seeking indemnification pursuant to the terms of their homeowner's policy in the event they were required to pay any damages and for recovery of costs incurred in the defense of the claims. The trial court granted summary judgment in favor of American Family and entered a judgment dismissing the Qualmans' claims and the Bruckmosers' cross-claim on October 4, 1990. The Bruckmosers appeal from the dismissal of their cross-claim. ¹

The issue before this court is whether the Bruckmosers' homeowner's insurance policy issued by American Family provided coverage to the Bruckmosers in the lawsuit brought by the Qualmans, thus triggering American Family's duty to defend the Bruckmosers. Since the interpretation of an insurance contract is a question of law, this court reviews the contract independently from the trial court. Katze v. Randolph & Scott Mut. Fire Ins. Co., 116 Wis.2d 206, 212, 341 N.W.2d 689, 691 (1984).

An insurance company's duty to defend is dependent solely on the allegations of the complaint. Professional Office Bldgs., Inc. v. Royal Indem. Co., 145 Wis.2d 573, 582, 427 N.W.2d 427, 430 (Ct.App.1988). "These allegations must state or claim a cause of action for the liability insured against or for which indemnity is paid in order for the suit to come within any defense coverage of the policy...." Grieb v. Citizens Casualty Co., 33 Wis.2d 552, 557, 148 N.W.2d 103, 106 (1967). Thus, for there to be a duty to defend, there must be allegations in the complaint which would fall within coverage afforded under the policy.

In their amended complaint, the Qualmans alleged four claims against the Bruckmosers: (1) breach of contract; (2) intentional misrepresentation; (3) misrepresentation--strict responsibility; and (4) negligent misrepresentation. Specifically, the Qualmans alleged that the house had cracked basement walls and defective kitchen pipes, that the Bruckmosers knew of these defects, and that they either failed to disclose them, negligently failed to disclose them, intentionally failed to disclose them or breached the contract. The Qualmans allege that they have suffered pecuniary damages as a result.

It is a well-established rule that when interpreting an insurance contract, doubts and ambiguity about coverage must be resolved in favor of the insured. Sola Basic Indus., Inc. v. United States Fidelity & Guar. Co., 90 Wis.2d 641, 646-47, 280 N.W.2d 211, 214 (1979). However, a contract of insurance is not to be rewritten by the court to bind an insurer to a risk which the insurer did not contemplate and for which it has not been paid. Wisconsin Builders, Inc. v. General Ins. Co. of Am., 65 Wis.2d 91, 103, 221 N.W.2d 832, 838 (1974). We conclude that the American Family policy language is not ambiguous and does not extend to claims for intentional or negligent misrepresentation or breach of contract.

The pertinent language of the policy issued to the Bruckmosers provides the following:

COVERAGE D--PERSONAL LIABILITY COVERAGE

We will pay, up to our limit of liability, all sums for which any insured is legally liable because of bodily injury or property damage covered by this policy.

We will defend any suit for damages, provided the suit resulted from bodily injury or property damage not excluded under this coverage.

"Property damage" is defined in the policy as "injury to or destruction of tangible property, including the loss of its use."

The causes of action against the Bruckmosers relate to breach...