St. John's Home of Milwaukee v. Continental Cas. Co.
| Decision Date | 29 November 1988 |
| Docket Number | 87-2468,Nos. 87-2265,s. 87-2265 |
| Citation | 434 N.W.2d 112,147 Wis.2d 764 |
| Parties | ST. JOHN'S HOME OF MILWAUKEE, Plaintiff, v. CONTINENTAL CASUALTY COMPANY, and Donald Stevens, d/b/a Stevens Associates, Defendants, Zimmerman Design Group, Inc., and Knuth Masonry, Inc., Defendants-Third Party Plaintiffs, Becker Construction Company, Inc., Defendant-Third Party Plaintiff-Appellant, Aetna Casualty Insurance Company and American National Fire Insurance Company, Defendants-Third Party Defendants-Respondents, Employers Mutual Casualty Company, Defendant-Third Party Defendant, Heritage Mutual Insurance Company, and Robert Brust, Third Party Defendants. ST. JOHN'S HOME OF MILWAUKEE, Plaintiff, v. CONTINENTAL CASUALTY COMPANY, and Donald Stevens, d/b/a Stevens Associates, Defendants, Zimmerman Design Group, Inc., Defendant-Third Party Plaintiff, Knuth Masonry, Inc., Defendant-Third Party Plaintiff-Appellant, * Becker Construction Company, Inc., Defendant-Third Party Plaintiff, Aetna Casualty Insurance Company, and American National Fire Insurance Company, Defendants-Third Party Defendants, Employers Mutual Casualty Company, Defendant-Third Party Defendant-Respondent, Heritage Mutual Insurance Company, Third Party Defendant-Respondent, Robert Brust, Third Party Defendant. |
| Court | Wisconsin Court of Appeals |
Pfannerstill & Camp by Mark M. Camp, Wauwatosa, on briefs, for defendant-third party plaintiff-appellant Knuth Masonry, Inc.
Howard, Peterman, Solochek, Grodin & Nashban, S.C. by James S. Grodin, Milwaukee, on briefs, for defendant-appellant Becker Const. Co.
Churchill, Duback & Smith by John D. Bird, Jr., Milwaukee, for defendant-third party defendant-respondent Aetna Cas.
Gibbs, Roper, Loots & Williams by John R. Hoaglund, Jr., Milwaukee, on briefs, for defendant-third party defendant-respondent American Nat. Fire Ins. Co.
J. Ric Gass and Joseph J. Ferris, with Kasdorf, Lewis & Swietlik of counsel, Milwaukee, on brief for defendant-third party defendant-respondent Employers Mut. Cas. Co.
Borgelt, Powell, Peterson & Frauen, S.C. by Reuben W. Peterson and Paul R. Riegel, Milwaukee, on brief, for third party defendant-respondent Heritage Mut. Ins. Co.
Before MOSER, P.J., and SULLIVAN and FINE, JJ.
This court has consolidated cases 87-2265 and 87-2468 for the purposes of this appeal. 1 In case 87-2265, Becker Construction Company, Inc. (Becker) appeals from a judgment of dismissal and an order granted to Aetna Casualty Insurance Company (Aetna) and American National Fire Insurance Company, now known as Great American Insurance Company (American), its comprehensive general liability (CGL) insurance carriers. In case 87-2468, Knuth Masonry, Inc. (Knuth), Becker's subcontractor in building St. John's Tower, appeals from an order granting partial summary judgment and an order granting summary judgment to Employers Mutual Casualty Company (Employers) and Heritage Mutual Insurance Company (Heritage), Knuth's CGL carriers. We conclude that neither case presented material issues of fact and that all insurers were entitled to summary judgment as a matter of law. Furthermore, we conclude that Knuth's insurance policies did not provide coverage for damage attributable to Knuth's installation of bricks provided by St. John's. We conclude that each of the four insurance companies had no duty to defend. Therefore, we affirm.
Both cases stem from the construction of St. John's Tower, a ten-story nursing home located on the east side of Milwaukee, Wisconsin. The Tower building project involved Zimmerman Design Group, Inc. (Zimmerman), design architect; Stevens Associates (Stevens), construction administrator; Becker, general contractor; and Knuth, masonry contractor. St. John's provided the brick, and Knuth furnished the labor, wall ties, mortar, weeps, flashing and other minor items incident to installation of the brick. The building was first occupied in the fall of 1979. After occupancy, problems developed with its masonry. St. John's sued Zimmerman, Stevens, Becker, Knuth and their respective insurers for damages, claiming breach of contractual obligation and negligence. Becker and Knuth brought third-party actions against their respective insurance carriers, claiming that their CGL policies obligated the carriers to indemnify them and defend them in the action brought by St. John's.
Aetna and American moved for summary judgment dismissing them from the action on the basis that the CGL policies afforded Becker no coverage. Alternatively, Aetna and American moved for partial summary Aetna relied on the following policy language:
judgment to limit the scope of damage which St. John's could claim against them. Heritage and Employers moved for summary judgment on St. John's amended complaint and dismissal from Knuth's third-party complaint.
The company will pay on behalf of the insured all sums which the insured shall become legally obliged to pay as damages because of
bodily injury or property damage
to which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property damage, even if any of the allegations of the suit are groundless, false or fraudulent, and may make such investigation and settlement of any claim or suit as it deems expedient, but the company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of the company's liability has been exhausted by payment of judgments or settlements.
....
(2) property used by the insured, or
(3) property in the care, custody or control of the insured or as to which the insured is for any purpose exercising physical control;
but parts (2) and (3) of this exclusion do not apply with respect to liability under a written sidetrack agreement and part (3) of this exclusion does not apply with respect to property damage (other than to elevators) arising out of the use of an elevator at premises owned by, rented to or controlled by the named insured;
(l) to property damage to premises alienated by the named insured arising out of such premises or any part thereof;
(m) to loss of use of tangible property which has not been physically injured or destroyed resulting from
(1) a delay in or lack of performance by or on behalf of the named insured of any contract or agreement, or
(2) the failure of the named insured's products or work performed by or on behalf of the named insured to meet the level of performance, quality, fitness or durability warranted or represented by the named insured;
but this exclusion does not apply to loss of use of other tangible property resulting from the sudden and accidental physical injury to or destruction of the named insured's products or work performed by or on behalf of the named insured after such products or work have been put to use by any person or organization other than an insured;
(n) to property damage to the named insured's products arising out of such products or any part of such products;
(o) to property damage to work performed by or on behalf of the named insured arising out of the work or any portion thereof, or out of materials, parts or equipment furnished in connection therewith;
(p) to damages claimed for the withdrawal, inspection, repair, replacement, or loss of use of the named insured's products or work completed by or for the named insured or of any property of which such products or work form a part, if such products, work or property are withdrawn from the market or from use because of any known or suspected defect or deficiency therein.
American's CGL policy stated in part:
The company will pay on behalf of the insured all sums which the insured shall become legally obliged to pay as damages because of
A. bodily injury or
B. property damage
to which this insurance applies, caused by an occurrence, and the company shall have the right and duty to defend any suit against the insured seeking damages on account of such bodily injury or property Exclusions
damage, even if any of the allegations of the suit are groundless, false or fraudulent, and may make such investigation and settlement of any claim or suit as it deems expedient, but the company shall not be obligated to pay any claim or judgment or to defend any suit after the applicable limit of the company's liability has been exhausted by payment of judgments or settlements.
This insurance does not apply:
(a) to liability assumed by the insured under any contract or agreement except an incidental contract; but this exclusion does not apply to a warranty of fitness or quality of the named insured's products or a warranty that work performed by or on behalf of the named insured will be done in a workmanlike manner;
....
(m) to loss of use of tangible property which has not been physically injured or destroyed resulting from
(1) a delay in or lack of performance by or on behalf of the named insured of any contract or agreement, or
(2) the failure of the named insured's products or work performed by or on behalf of the named insured to meet the level of performance, quality, fitness or durability warranted or represented by the named insured;
but this exclusion does not apply to loss of use of other tangible property resulting from the sudden and accidental physical injury to or destruction of the named insured's products or work performed by or on behalf of the named insured after such products or work have been put to use by any person or organization other than an insured;
(n) to property damage to the named insured's products arising out of such products or any part of such products;
(o) to property damage to work performed by or on behalf of the named insured arising out of the...
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