Roberts v. Wolf
| Decision Date | 25 July 2001 |
| Docket Number | 00-1208 |
| Citation | 633 N.W.2d 277,247 Wis.2d 495 |
| Parties | This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. SeeWis. Stat. §808.10 and Rule 809.62. Tecwyn Roberts, Sara H. Roberts and Elizabeth M. Halkerston, Plaintiffs, v. John J. Wolf and Linda Wolf, Defendants-Appellants, Wisconsin Electric Power Company and Pieper Electric, Inc., Defendants, West Bend Mutual Insurance Company, Intervening Defendant-Respondent.STATE OF WISCONSIN IN COURT OF APPEALS DISTRICT II |
| Court | Wisconsin Court of Appeals |
APPEAL from a judgment of the circuit court for Sheboygan County: L. EDWARD STENGEL, Judge. Reversed.
Before Brown, P.J., Anderson and Snyder, JJ.
¶1.
Tecwyn Roberts, Sara H. Roberts and Elizabeth M. Halkerston (collectively, the Robertses) sued John J. Wolf and Linda Wolf alleging intentional trespass to land, injury to real property, unlawful cutting of timber and interference with or declaration of interest in real property. The Wolfs tendered the defense of the Robertses' claims to their homeowner's policy insurer, West Bend Mutual Insurance Company (West Bend). West Bend accepted the tender of defense, denied that coverage existed under the homeowner's policy, requested a declaration pursuant to Wis. Stat. §806.04 (1999-2000)1 and filed a motion for summary judgment dismissal. The trial court granted West Bend's summary judgment motion and the Wolfs appeal.
¶2. The Robertses and the Wolfs are adjoining landowners in the Crystal Lake Park subdivision in Sheboygan county. The Robertses and Halkerston own Lots 2 and 3, respectively, and the Wolfs own Lots 76 and 77. The Wolfs hold an easement across Lots 2 and 3 by virtue of an agreement between the previous lot owners.
¶3. The Robertses' complaint alleges that sometime between January 1, 1998, and August 31, 1998, the Wolfs and others caused or directed third parties and their equipment to unlawfully trespass upon Lots 2 and 3 causing damage to an underground sprinkler system, tire damage and compaction to the lawns, removal or damage to trees and shrubs, and removal of a metal railing separating the lots. Specifically, the Robertses' complaint alleges: (1)trespass to land; (2) injury to real property; (3) unlawful cutting of timber; and (4) interference with or declaration of interest in real property. The Robertses' complaint also demands punitive damages for an intentional disregard of their real property rights and statutory double damages for the unlawful cutting of timber.
¶4. Between January 1, 1998, and August 31, 1998, West Bend had in effect a homeowner's insurance policy issued to the Wolfs. The basic policy provides:
PART A - HOME AND PERSONAL ACTIVITIES LEGAL LIABILITY
We insure the liability of you and your family to pay because of bodily injury or property damage to others in an accident or incidentthat happens in your home or on your property, as listed in the Declarations Page. (Italics added.)
The policy also provides, in part, the following exclusionary language:
We do not cover property damage to property rented to, occupied or used by, or in the care, custody or control of you or your family.... [W]e will not pay for property damage intentionally done by an insured person over twelve years of age, nor to property covered under any other Part of this policy or for property damage arising from an insured person's business.
The following apply to Section I and II of the policy. Any other limitations or exclusions appear in the parts of the policy to which they apply.
....
5. We do not cover any liability for bodily injury or property damage expected or intended by any insured person. For this exclusion to apply, any insured person need only expect or intend to cause any injury or damage.
....
11. We do not cover any punitive or exemplary damages.
¶5. The Wolfs do not claim coverage under the West Bend basic policy, but argue that they are entitled to a defense or indemnification under the Personal Excess Liability Endorsement (PELE) to the West Bend basic policy. The PELE provides as follows:
PART II - COVERAGE
We pay damages on behalf of the insured, subject to the exclusions.
We do not cover:
....
4. Acts committed by or at the insured's direction with intent to cause personal injury or property damage.
....
10. Any punitive or exemplary damages. However, if a lawsuit is filed against an insured which alleges both compensatory and punitive/exemplary damages, wewill defend the entire lawsuit with the understanding that we can pay only the compensatory damages.
¶6. The Wolfs contend that coverage under the basic policy is not material to coverage under the PELE as evidenced by the following basic policy statements:
PART I - DEFINITIONS
....
7. Primary insurance means insurance collectible by or payable on behalf of the insured which covers liability for personal injury or property damage.
....
Regardless of the number of insureds, claims or injured persons, the most we pay as damages resulting from one occurrence shall not exceed the amount shown on the Declarations, subject to the following:
....
4. If primary insurance does not cover an occurrence which results in personal injury or property damage, but the occurrence is covered by this endorsement, we pay damages which exceed the retained limit on the Declarations.
....
If primary insurance does not cover personal injury or property damage covered by this endorsement, we:
1. Defend the insured against a claim or suit for damages....
The PELE also relates the following definitions:
PART I - DEFINITIONS
....
3. Damages means the total of:
a. Damage the insured must pay (legally or by agreement with ourwritten consent) because of personal injury or property damage covered by this endorsement ....
....
6. Personal injury means:
....
b. Injury arising out of:
....
(3) Wrongful entry or eviction, or other invasion of the right of private occupancy ....
....
8. Property damage means damage to or loss of use of tangible property.
¶7. In its brief, West Bend cites to basic policy provisions outside of the PELE as relevant to the coverage provided under the PELE.2 The PELE, however, is a separate four-page endorsement that begins as follows:
AGREEMENT
We provide the insurance in this endorsement in return for the premium and compliance with the provisions of this endorsement.
The Wolfs frame the appellate question as whether there is coverage under West Bend's PELE for the damages claimed by the Robertses.
¶8. The existence of a duty to defend depends solely upon the nature of the claim being asserted against the insured and has nothing to do with the merits of that claim. C.L. v. Sch. Dist. of Menomonee Falls, 221 Wis. 2d 692, 699, 585N.W.2d 826 (Ct. App. 1998). An insurer who accepts the duty to defend and who claims that the terms of the policy deny coverage for the incident forming the basis of the suit must take steps to seek and obtain a bifurcated trial-litigating coverage first and obtaining a stay of all proceedings in the liability and damages aspects of the case until coverage, or lack of coverage, is determined. Keneflick v. Hitchcock, 187 Wis. 2d 218, 232-33, 522 N.W.2d 261 (Ct. App. 1994) (citing Elliott v. Donahue, 169 Wis. 2d 310, 318, 485 N.W.2d 403 (1992)). An insurer who breaches its duty to defend waives any later challenge to coverage. Prof'l Office Bldgs., Inc. v. Royal Indem. Co., 145 Wis. 2d 573, 584-85, 427 N.W.2d 427 (Ct. App. 1988). Where an insurer disputes coverage, its duty to defend continues only until the issue of coverage is resolved. Keneflick, 187 Wis.2d at 235.
¶9. As a Wisconsin insurer, West Bend did precisely what was required of it in this case. It accepted defense of the Robertses' claims and sought a bifurcated proceeding to determine coverage issues in advance of the trial on liability and damages. West Bend moved for summary judgment dismissal based upon the West Bend policy excluding coverage for damages resulting from the intentional tort of trespass, injury to real property resulting from the intentional tort of trespass, and for the unlawful cutting of timber claim that arises from the intentional tort of trespass. Further, West Bend contends that it has no duty to defend or indemnify for the interference with declaration of interest in real property claim because the claim arises out of an intentional tort that exceeded the intended usage of the easement running to the Wolfs, and because that claim seeks injunctive relief rather than damages.
¶10. The trial court decided the insurance coverage issue on a motion for summary judgment. Summary judgment should be granted when no genuine issue of material fact exists and the movant is entitled to judgment as a matter of law. Wis. Stat. §802.08(2). Summary judgment is not available if competing inferences might be drawn from the facts. Kretchman v. Reid, 46 Wis. 2d 677, 680-81, 176 N.W.2d 301 (1970). The summary judgment methodology has been comprehensively set forth in Green Spring Farms v. Kersten, 136 Wis. 2d 304, 314-15, 401 N.W.2d 816 (1987), and we apply that methodology here.
¶11. The question of coverage involves the interpretation of an insurance policy and therefore presents a question of law for which we accord no deference. Smith v. Atl. Mut. Ins. Co., 155 Wis. 2d 808, 810, 456 N.W.2d 597 (1990). The central purpose of the interpretation of an insurance policy, like any other contract, is to ascertain the parties' intentions as revealed by the contract language. Sch. Dist. of Shorewood v. Wausau Ins. Cos., 170 Wis. 2d 347, 367, 488 N.W.2d 82 (1992). When the terms of a policy are without ambiguity and are plain on their face, we need not resort to...
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