Taryn E.F. by Grunewald v. Joshua M.C.

• Citation: 505 N.W.2d 418,178 Wis.2d 719
• Decision Date: 03 August 1993
• Docket Number: No. 92-3204,92-3204
• Parties: TARYN E.F., a minor by her Guardian ad Litem, William A. GRUNEWALD, Dan F., and Dawn F., Plaintiffs-Appellants, v. JOSHUA M.C., a minor by his Guardian ad Litem to be appointed by the court, Michael C., and Beverly C., Defendants, Little Black Mutual Insurance Company, Defendant-Respondent.
• Court: Wisconsin Court of Appeals

Page 418

505 N.W.2d 418

178 Wis.2d 719

TARYN E.F., a minor by her Guardian ad Litem, William A.

GRUNEWALD, Dan F., and Dawn F., Plaintiffs-Appellants, v. JOSHUA M.C., a minor by his Guardian ad Litem to be

appointed by the court, Michael C., and Beverly

C., Defendants,

Little Black Mutual Insurance Company, Defendant-Respondent.

No. 92-3204.

Court of Appeals of Wisconsin.

Submitted on Briefs July 19, 1993.

Opinion Released Aug. 3, 1993.

Opinion Filed Aug. 3, 1993.

Before CANE, P.J., and LaROCQUE and MYSE, JJ.

MYSE, Judge.

Taryn, Dawn and Dan F. (collectively, "Taryn") appeal the trial court's grant of summary judgment to Little Black Mutual Insurance Company, the homeowner's insurer of Joshua, Michael and Beverly C. Taryn contends that the trial court erred by concluding that Little Black had no duty to defend and indemnify Michael and Beverly for liability imposed upon them under sec. 895.035, Stats., for the torts of their son Joshua. Taryn claims that because Michael and Beverly are innocent insureds who did not participate or encourage Joshua's acts, they are entitled to coverage despite the fact that coverage is precluded for Joshua, who is also an insured. She argues that Michael and Beverly have a separate insurance policy that provides coverage to them by virtue of the policy's severability clause. She further argues that the sexual molestation exclusion does not preclude coverage for Michael and Beverly's liability under sec. 895.035, Stats., because their liability under that statute is attributable to their status as parents and not necessarily to Joshua's acts of sexual molestation. Because we conclude that the exclusionary clauses unambiguously preclude coverage for Michael and Beverly's liability for Joshua's tortious acts, the summary judgment is affirmed.

The facts are undisputed. In June and October 1990, Taryn's parents hired Joshua, who was then twelve years old, to babysit for three-year-old Taryn and her brother. On both occasions, Joshua committed various sexual assaults and physical batteries to Taryn. Taryn's parents filed a complaint against Joshua and his parents, seeking damages for Joshua's torts under sec. 895.035, Stats. The complaint was later amended to include Michael and Beverly's homeowner's insurance carrier, Little Black. The complaint alleged that Joshua's acts were intentional, willful, malicious and wanton. Little Black moved the trial court for summary judgment dismissing it from the action Summary judgment is appropriate because the facts are undisputed. Section 802.08(2), Stats. When reviewing a grant of summary judgment, we apply the same methodology as the trial court. Green Spring Farms v. Kersten, 136 Wis.2d 304, 314-15, 401 N.W.2d 816, 820 (1987). Because that methodology is familiar, we need not repeat it here. See id.

based upon its contentions that coverage is precluded by exclusions in its policy for liability resulting from any insured's intentional, wanton malicious acts and for liability directly or indirectly resulting from sexual molestation. The trial court found that (1) Joshua is an insured within the policy's definition, (2) his acts as alleged by the complaint fall within the intentional acts and sexual molestation exclusions, (3) the policy language is unambiguous, (4) Michael and Beverly are innocent insureds and (5) the exclusions in the policy preclude coverage for "any insured," which avoids the severability of interests issue found in Northwestern Nat'l Ins. Co. v. Nemetz, 135 Wis.2d 245, 400 N.W.2d 33 (Ct.App.1986). Based on these findings, the court concluded that Little Black had no duty to indemnify or defend Beverly and Michael for liability they incurred for Joshua's acts under sec. 895.035.

Interpretation of an insurance policy is a question of law. Keane v. Auto-Owners Ins. Co., 159 Wis.2d 539, 547, 464 N.W.2d 830, 833 (1991). We may not modify an insurance policy's unambiguous language. Schroeder v. Blue Cross & Blue Shield, 153 Wis.2d 165, 173, 450 N.W.2d 470, 473 (Ct.App.1989). A policy's language is ambiguous when it is susceptible to more than one reasonable interpretation and whether a policy's language is ambiguous is a question of law. Id. at 174, 450 N.W.2d at 473. We review questions of law independently of the trial court's determinations. Ball v. District No. 4 Area Bd., 117 Wis.2d 529, 537, 345 N.W.2d 389, 394 (1984).

Little Black's policy defines "insured" as "you and, if residents of your household, your relatives and any other person under the age of 21 in your care or in the care of your resident relatives." (Emphasis in original.) Thus, under the unambiguous language of the policy, Joshua, as well as Michael and Beverly, is an insured. The policy also contains the following coverage exclusions:

INTENTIONAL ACT EXCLUSION

....

The insurance afforded by this policy shall not apply to any damages to property or for bodily injury attributable to a willful, malicious, wanton or otherwise intentional act of the "insured" or performed at an "insured's" direction or for any outrageous conduct on the part of any "insured" consisting of any intentional, wanton, malicious acts, or, in addition, any act that would constitute wanton disregard for the rights of others.

....

Sexual Molestation Exclusion

This policy does not apply to liability which results directly or indirectly from the actual, alleged or threatened sexual molestation of a person.

Taryn does not dispute that the exclusions preclude coverage for Joshua himself. However, Taryn argues that Michael, Beverly and Joshua each have a separate policy of insurance by virtue of the following provision in the policy: "Each person listed above is a separate insured under this policy, but this does not increase our limit of liability under this policy." (Emphasis in original.) Thus, Taryn argues, because Michael and Beverly did not commit or encourage Joshua's commission of the excluded acts, they are entitled to coverage for their liability under sec. 895.035, Stats., under their separate policy. Taryn's argument hinges on her conclusion that the policy becomes ambiguous when this "severability clause" is read in conjunction with the exclusionary clauses. She cites our decision in Nemetz, 135 Wis.2d 245, 400 N.W.2d 33, in support of her conclusion. We disagree.

Assuming, without deciding, that the severability clause creates separate policies for each insured, that clause does not render the exclusionary clauses in the policy ambiguous. The intentional acts exclusion expressly states that "[t]he insurance afforded by this policy shall not apply to any damages ... attributable to ... any outrageous conduct on the part of any 'insured' consisting of any intentional, wanton, malicious acts...." (Emphasis supplied.) This language unambiguously denies coverage for all liability incurred by each and any insured as a result of certain conduct by any of the persons insured by the policy.

In contrast, the policies in Nemetz, 135 Wis.2d at 253-54 n. 2, 400 N.W.2d at 37 n. 2, excluded coverage for damages "expected or intended by an insured person" and damages "intended or expected by the insured." We noted in Nemetz that by using the terms "an insured," and "the insured" in their exclusionary provisions, the insurers failed to adequately draft the policy to exclude coverage for both insureds based on the excludable acts of one insured. Id. at 256, 400 N.W.2d at 38. Thus, we held that the exclusionary clauses precluded coverage for the insured who committed the excludable acts, but not for the innocent insured. I...