Talley v. Mustafa, No. 2015AP2356

CourtUnited States State Supreme Court of Wisconsin
Writing for the CourtREBECCA GRASSL BRADLEY, J.
Citation381 Wis.2d 393,911 N.W.2d 55,2018 WI 47
Parties Archie A. TALLEY, Plaintiff-Appellant, v. MUSTAFA MUSTAFA, d/b/a Burleigh Liquor, a/k/a Burleigh Food Market and Adams Foods, LLC, Defendants, Auto–Owners Insurance Company, Defendant-Respondent-Petitioner.
Decision Date11 May 2018
Docket NumberNo. 2015AP2356

381 Wis.2d 393
911 N.W.2d 55
2018 WI 47

Archie A. TALLEY, Plaintiff-Appellant,
v.
MUSTAFA MUSTAFA, d/b/a Burleigh Liquor, a/k/a Burleigh Food Market and Adams Foods, LLC, Defendants,

Auto–Owners Insurance Company, Defendant-Respondent-Petitioner.

No. 2015AP2356

Supreme Court of Wisconsin.

Oral Argument: January 9, 2018
Opinion Filed: May 11, 2018
Motion for Reconsideration filed May 31, 2018


For the defendant-respondent-petitioner, there were briefs filed by Justin F. Wallace, William R. Wick, and Nash, Spindler, Grimstad, & McCracken, LLP, Manitowoc. There was an oral argument by Justin F. Wallace.

For the plaintiff-appellant, there was a brief filed by George E. Chaparas and Carlson, Blau & Clemens, S.C., Milwaukee. There was an oral argument by George E. Chaparas.

An amicus curiae brief was filed on behalf of The Wisconsin Insurance Alliance by James A. Friedman, Mark W. Hancock, and Godfrey & Kahn, S.C., Madison.

REBECCA GRASSL BRADLEY, J.

381 Wis.2d 399

¶ 1 In this insurance coverage dispute, we consider whether a business-owners liability policy covers a negligent supervision claim arising out of an alleged employee's1 intentional act of physically punching a customer in the face. We hold that this insurance policy does not provide coverage under these circumstances. When the negligent supervision claim pled rests solely on an employee's intentional and unlawful act without any separate basis for a negligence claim against the employer, no coverage exists. Accordingly, we reverse the decision of the court of appeals,2 which

911 N.W.2d 59

reversed the circuit court's3 grant of summary judgment in

381 Wis.2d 400

favor of Auto–Owners Insurance Company (Auto–Owners) on the coverage issue. The circuit court correctly concluded that there is no coverage under this business liability insurance policy for either the employee's intentional act or the negligent supervision claim against the employer arising solely out of the employee's intentional act.4

I. BACKGROUND

¶ 2 The insurance coverage issue in this case arises from an incident that occurred in July 2009 at a neighborhood convenience store, Burleigh Food Market. Mustafa Mustafa owned and operated the store, and at the time carried a "Businessowners' Liability Policy" with Auto–Owners.5

¶ 3 The provisions in the business liability insurance policy provide, as material:

A. COVERAGES

1. Business Liability We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" ... to which this
381 Wis.2d 401
insurance applies. No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under COVERAGE EXTENSION SUPPLEMENTARY PAYMENTS.

a. This insurance applies only:[6 ]

(1) To "bodily injury" or "property damage":

(a) That occurs during the policy period; and

(b) That is caused by an "occurrence". The "occurrence" must take place in the "coverage territory".

....

B. EXCLUSIONS

1. Applicable to Business Liability Coverage

This insurance does not apply to:

a. "Bodily injury" or "property damage" expected or intended from the standpoint of the insured. This exclusion does not apply to "bodily injury" resulting from the use of reasonable force to protect persons or property.

....

C. WHO IS AN INSURED

1. If you are designated in the Declarations as:

a. An individual, you and your spouse are insureds, but only with respect to the conduct of a business of which you are the sole owner.
381 Wis.2d 402
b. A partnership or joint venture, you are an insured. Your members, your partners and their spouses are
911 N.W.2d 60
also insureds, but only with respect to the conduct of your business.

c. An organization other than a partnership or joint venture, you are an insured. Your executive officers and directors are insureds, but only with respect to their duties as your officers or directors. Your stockholders are also insureds, but only with respect to their liability as stockholders.

2. Each of the following is also an insured:

a. Your employees, other than your executive officers, but only for acts within the scope of their employment by you.

....

F. LIABILITY AND MEDICAL EXPENSES DEFINITIONS

....

3. "Bodily injury" means bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time.

....

9. "Occurrence" means an accident, including continuous or repeated exposure to substantially the same general harmful conditions.

(Some formatting altered).

¶ 4 On July 24, 2009, Archie A. Talley walked into Mustafa's store to buy beer. Talley claims that while he was inside the store, Mustafa's security guard, Keith Scott, punched him in the face twice.

381 Wis.2d 403

Talley left the store and called police to report the assault. Talley was taken to the hospital where he was treated for a broken jaw.

¶ 5 On July 17, 2012, Talley filed suit against Mustafa, Keith Scott,7 and Mustafa's insurer, Auto–Owners. The complaint alleged, as material:

• "[Keith Scott] was a[n] employee, security guard and/or customer of the defendant, Mustafa Mustafa."

• "Auto–Owners ... issued a policy of liability insurance wherein it agreed, among other things, to pay up to the limits of its policy any and all damages sustained as a result of negligence in the ownership and/or maintenance of ... Burleigh Food Market."

• As Talley entered the store, "the alleged security guard on the premises, began a verbal altercation with" Talley. Talley, "while walking in the premises was then struck by the security guard twice, fracturing his jaw."

• "The defendants had a duty to properly train and supervise their employees and have a duty to exercise the highest degree of care for the safety of their customers from any harm that might befall them by reason of the actions and/or conduct of their employees."

• "The defendants failed to provide adequate or proper security for their customers, and further said defendants, their agents, employees, or representatives, were the parties who attacked the plaintiff. A videotape viewed by officers of the Milwaukee Police Department from the defendants' own security system, showed the assault."
381 Wis.2d 404

¶ 6 Auto–Owners hired counsel to represent Mustafa. Auto–Owners filed an Answer and conducted discovery, which revealed issues related to coverage. In January 2014, Auto–Owners notified the

911 N.W.2d 61

insured that it was defending the case under a reservation of rights letter. In October 2014, Auto–Owners filed a motion to bifurcate the issues of coverage and liability and stay the proceedings on the latter so that the coverage issue could be decided before the liability issues were tried.

¶ 7 The circuit court granted the motion to bifurcate and stayed the trial on the merits to "allow the defendant to seek a declaratory judgment with regard to insurance coverage issues." Mustafa hired his own lawyer to represent him on the coverage issue. In February 2015, Auto–Owners filed its motion for declaratory and summary judgment, asking the circuit court to declare that the insurance policy does not provide coverage, and to grant summary judgment dismissing Auto–Owners from the lawsuit. Auto–Owners asserted that no coverage existed under the policy because: (1) Scott was not Mustafa's employee, and therefore not an insured; (2) even if a factual dispute about Scott's status exists, Mustafa did not believe Scott was an employee; (3) an intentional assault—punching someone in the face—is not an "occurrence" under the insurance policy and excluded by the intentional acts exclusion; (4) there can be no coverage for a negligent supervision claim based on an assault, and no negligent supervision claim exists because Scott was not an employee.

¶ 8 The circuit court held two hearings on the motion and both times concluded the Auto–Owners insurance policy did not provide coverage for Scott or for Mustafa. The circuit court addressed the intentional act at the May 2015 hearing and held:

381 Wis.2d 405
• "So if it's an intentional act, those things are clearly not covered under Wisconsin law. It wasn't an occurrence."

• Attorneys trying to get coverage for an intentional act will "try to shoehorn in [a] negligence claim" to make the intentional act an occurrence. "[T]his is not anything other than an intentional tort. It doesn't fall within the definition of an accident that's covered by the policy."

• Auto–Owners "has aptly pointed out in [its] brief of what an occurrence is under Wisconsin law. And intentional acts are simply not covered because they are not accidents."

• "And that's the ruling of the Court, and there's no coverage."

¶ 9 The circuit court held a second hearing in September 2015 to address whether coverage existed for the negligent supervision claim, which was...

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14 practice notes
  • Anderson v. Kayser Ford, Inc., Appeal No. 2017AP2018
    • United States
    • Court of Appeals of Wisconsin
    • February 7, 2019
    ...and the obligation to indemnify (which may be addressed based on evidence adduced at a coverage hearing). See also Talley v. Mustafa , 2018 WI 47, ¶21, 381 Wis.2d 393, 911 N.W.2d 55 (overruling Doyle v. Engelke , 219 Wis.2d 277, 580 N.W.2d 245 (1998), on the ground that the court in Doyle u......
  • Friends of Frame Park, U.A. v. City of Waukesha, 2019AP96
    • United States
    • United States State Supreme Court of Wisconsin
    • July 6, 2022
    ...independently. 976 N.W.2d 280 Kemper Indep. Ins. v. Islami, 2021 WI 53, ¶13, 397 Wis. 2d 394, 959 N.W.2d 912 (quoting Talley v. Mustafa, 2018 WI 47, ¶12, 381 Wis. 2d 393, 911 N.W.2d 55 ). Summary judgment is appropriate if no material facts are at issue and a moving party is entitled to jud......
  • W. Bend Mut. Ins. Co. v. Ixthus Med. Supply, Inc., No. 2017AP909
    • United States
    • United States State Supreme Court of Wisconsin
    • February 28, 2019
    ...2017AP909, unpublished slip op., ¶¶ 12-13.9 We are not persuaded by the argument attempting to analogize this case to Talley v. Mustafa, 2018 WI 47, 381 Wis. 2d 393, 911 N.W.2d 55, Schinner v. Gundrum, 2013 WI 71, 349 Wis. 2d 529, 833 N.W.2d 685, Estate of Sustache v. American Family Mut. I......
  • Brey v. State Farm Mutual Automobile Insurance Company, 2019AP1320
    • United States
    • United States State Supreme Court of Wisconsin
    • February 15, 2022
    ...as a matter of law." Kemper Indep. Ins. Co. v. Islami, 2021 WI 53, ¶13, 397 Wis. 2d 394, 959 N.W.2d 912 (quoting Talley v. Mustafa, 2018 WI 47, ¶12, 381 Wis. 2d 393, 911 N.W.2d 55 ). "We independently review a grant of summary judgment using the same methodology of the circuit court and the......
  • Request a trial to view additional results
14 cases
  • Anderson v. Kayser Ford, Inc., Appeal No. 2017AP2018
    • United States
    • Court of Appeals of Wisconsin
    • February 7, 2019
    ...and the obligation to indemnify (which may be addressed based on evidence adduced at a coverage hearing). See also Talley v. Mustafa , 2018 WI 47, ¶21, 381 Wis.2d 393, 911 N.W.2d 55 (overruling Doyle v. Engelke , 219 Wis.2d 277, 580 N.W.2d 245 (1998), on the ground that the court in Doyle u......
  • Friends of Frame Park, U.A. v. City of Waukesha, 2019AP96
    • United States
    • United States State Supreme Court of Wisconsin
    • July 6, 2022
    ...independently. 976 N.W.2d 280 Kemper Indep. Ins. v. Islami, 2021 WI 53, ¶13, 397 Wis. 2d 394, 959 N.W.2d 912 (quoting Talley v. Mustafa, 2018 WI 47, ¶12, 381 Wis. 2d 393, 911 N.W.2d 55 ). Summary judgment is appropriate if no material facts are at issue and a moving party is entitled to jud......
  • W. Bend Mut. Ins. Co. v. Ixthus Med. Supply, Inc., No. 2017AP909
    • United States
    • United States State Supreme Court of Wisconsin
    • February 28, 2019
    ...2017AP909, unpublished slip op., ¶¶ 12-13.9 We are not persuaded by the argument attempting to analogize this case to Talley v. Mustafa, 2018 WI 47, 381 Wis. 2d 393, 911 N.W.2d 55, Schinner v. Gundrum, 2013 WI 71, 349 Wis. 2d 529, 833 N.W.2d 685, Estate of Sustache v. American Family Mut. I......
  • Brey v. State Farm Mutual Automobile Insurance Company, 2019AP1320
    • United States
    • United States State Supreme Court of Wisconsin
    • February 15, 2022
    ...as a matter of law." Kemper Indep. Ins. Co. v. Islami, 2021 WI 53, ¶13, 397 Wis. 2d 394, 959 N.W.2d 912 (quoting Talley v. Mustafa, 2018 WI 47, ¶12, 381 Wis. 2d 393, 911 N.W.2d 55 ). "We independently review a grant of summary judgment using the same methodology of the circuit court and the......
  • Request a trial to view additional results

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