Uneeda Rest, LLC v. Hexum

CourtCourt of Appeals of Wisconsin
Docket NumberAppeal No. 2019AP1357
Decision Date09 June 2020


Appeal No. 2019AP1357


June 9, 2020


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. See WIS. STAT. § 808.10 and RULE 809.62.

Cir. Ct. No. 2018CV114

APPEAL from an order of the circuit court for Sawyer County: JOHN M. YACKEL, Judge. Affirmed.

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Before Stark, P.J., Hruz and Seidl, JJ.

Per curiam opinions may not be cited in any court of this state as precedent or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).

¶1 PER CURIAM. Jake Westerhof and Uneeda Rest, LLC, appeal a summary judgment granted in favor of Wisconsin Mutual Insurance Company. The circuit court concluded insurance policies that Wisconsin Mutual had issued to Westerhof did not provide coverage for Rick Hexum's claims against Westerhof and Uneeda Rest. We agree that Wisconsin Mutual's policies do not provide coverage for Hexum's claims, and we therefore affirm.


¶2 Uneeda Rest is a limited liability company that owns property on Whitefish Lake in Sawyer County. Westerhof and his siblings are members of Uneeda Rest. Uneeda Rest's property is adjacent to property owned by Hexum. Uneeda Rest owns two easements allowing it to use an unpaved, shared driveway on the east side of Hexum's property to access its land. Although the easements lie entirely within Hexum's property, it is undisputed that, at all times relevant to this case, the shared driveway was actually located partially on Hexum's property and partially on Uneeda Rest's property.

¶3 At some point, Hexum constructed a "French drain" in the shared driveway, near the base of the apron for his garage. Hexum testified a French drain is "an inexpensive way to drain water." He explained that it consists of a hole filled with rock, which allows "large volumes of water to filter through without puddling."

¶4 In 2015, Westerhof began construction of a new home on Uneeda Rest's property, which replaced a pre-existing cottage. Westerhof retained an

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architect to design the home and a general contractor to build it. The general contractor hired a subcontractor—Butterfield, Inc.—to complete the excavation work and install the foundation.

¶5 During the construction of Westerhof's residence, contractors drove over the shared driveway in order to access Westerhof's property. It is undisputed that the contractors' vehicles damaged the driveway and destroyed the French drain. Either Westerhof or one of his sisters ultimately paid to fix the damage to the driveway, but they refused to pay for the repairs to the French drain.

¶6 Hexum also permitted Butterfield to drive its construction vehicles over portions of Hexum's property that were not located within the easement in order to access the construction site. Hexum contends that in doing so, the vehicles damaged his noneasement property.

¶7 The construction of Westerhof's new home was completed in the early summer of 2016. The new home has a larger footprint than the old cottage. Westerhof testified he was aware before construction began that the larger footprint of the new home would result in there being less permeable soil on his property. He also testified that he was aware the decrease in permeable soil would cause increased water runoff. However, Westerhof testified he believed the water would stay on his property because his house had gutters that emptied toward the lake and away from Hexum's property.

¶8 Hexum believes Westerhof's new house was constructed at an elevation that is approximately 1.5 feet higher than the elevation of the previous cottage. He also believes that the change in elevation has caused additional runoff onto his property. Westerhof, however, denies that the elevation has changed. Travis Butterfield (of Butterfield, Inc.) testified that the architect's plan for the new

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house called for the first floor to be constructed at an elevation of "1308.5," and that the elevation of the land before the house was constructed was approximately "1307" or "1308." Butterfield also testified that when he dug the foundation, he aimed for the elevation to be within two inches of the elevation specified on the plans.

¶9 In the spring of 2016, Hexum noticed an accumulation of water at the south end of the shared driveway, at the base of the concrete apron of his garage. Hexum contends this water accumulation damaged the concrete slab outside his garage, necessitating its replacement.

¶10 In 2018, Hexum constructed a drainage system that allegedly obstructed Uneeda Rest's easements. Uneeda Rest therefore filed the instant lawsuit against Hexum, seeking an injunction requiring Hexum to remove the drainage system. In response, Hexum filed a number of counterclaims against Uneeda Rest and a third-party complaint against Westerhof. As relevant to this appeal, Hexum alleged that the construction of Westerhof's home had caused damage to Hexum's property. He asserted claims against Uneeda Rest for private nuisance, civil trespass, and negligence, among other things, and he asserted a civil trespass claim against Westerhof.

¶11 Westerhof and Uneeda Rest tendered the defense of Hexum's claims to Wisconsin Mutual, Westerhof's homeowner's insurer.1 Wisconsin Mutual agreed to defend Westerhof and Uneeda Rest pursuant to a reservation of rights. It then moved to intervene in this lawsuit and to bifurcate and stay the merits of the

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case pending a determination of whether its policies provided coverage for Hexum's claims. The circuit court granted Wisconsin Mutual's motion.

¶12 Wisconsin Mutual subsequently moved for summary judgment and for a declaratory ruling that its policies did not provide coverage for Hexum's claims. First, Wisconsin Mutual argued its policies did not provide an initial grant of coverage because Hexum's alleged property damage was not caused by an "occurrence," as the policies defined that term. In the alternative, Wisconsin Mutual argued coverage for some of Hexum's claims was barred by the policies' "motorized vehicle" and "property you use" exclusions. Westerhof and Uneeda Rest opposed Wisconsin Mutual's motion, arguing that the policies provided an initial grant of coverage and that neither of the cited exclusions applied. Westerhof and Uneeda Rest also argued that a "collapse coverage endorsement" appended to the 2015-16 policy provided coverage for one of Hexum's claims.

¶13 The circuit court granted Wisconsin Mutual's summary judgment motion and issued an order declaring that its policies did not provide coverage for Hexum's claims. The court concluded the policies did not provide an initial grant of coverage because "the trucks moving down the [driveway], the building of the property, the house higher and changing the water runoff, all of those were purposeful acts, not an accident or occurrence as defined by the policy." The court did not consider whether either of the exclusions cited by Wisconsin Mutual were

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applicable, nor did it address the collapse coverage endorsement. Westerhof and Uneeda Rest now appeal.2


I. Standard of review

¶14 We independently review a grant of summary judgment, using the same methodology as the circuit court. Hardy v. Hoefferle, 2007 WI App 264, ¶6, 306 Wis. 2d 513, 743 N.W.2d 843. Summary judgment is appropriate if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. WIS. STAT. § 802.08(2) (2017-18). "Whether to grant a declaratory judgment is addressed to the circuit court's discretion." State Farm Fire & Cas. Co. v. Acuity, 2005 WI App 77, ¶6, 280 Wis. 2d 624, 695 N.W.2d 883. However, when the exercise of that discretion turns on the interpretation of an insurance policy, which is a question of law, we independently review the court's decision. Id.

¶15 Our goal in interpreting an insurance policy is to give effect to the parties' intent. American Family Mut. Ins. Co. v. American Girl, Inc., 2004 WI 2, ¶23, 268 Wis. 2d 16, 673 N.W.2d 65. We construe a policy as it would be

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understood by a reasonable person in the position of the insured. Id. If policy language is unambiguous, we simply enforce it as written. Marnholtz v. Church Mut. Ins. Co., 2012 WI App 53, ¶10, 341 Wis. 2d 478, 815 N.W.2d 708. When determining whether an insurance policy provides coverage for a particular claim, we first consider whether the policy's insuring agreement makes an initial grant of coverage. American Girl, 268 Wis. 2d 16, ¶24. If it is clear that the policy does not provide an initial grant of coverage, our analysis ends there, without the need to consider any of the policy's exclusions. Id.

¶16 In this case, we agree with Wisconsin Mutual that its policies do not provide an initial grant of coverage for Hexum's claims against Westerhof and Uneeda Rest. Accordingly, we need not address whether any exclusions in the policies would otherwise bar coverage for Hexum's claims. We also reject Westerhof and Uneeda Rest's argument that the 2015-16 policy's collapse coverage endorsement provides coverage for Hexum's claim for damage resulting from water accumulation caused by the destruction of the French drain.

II. Initial grant of coverage

¶17 As relevant here, the Wisconsin Mutual policies provide an initial grant of coverage for "all sums for which an 'insured' is liable by law because of ... 'property damage' caused by an 'occurrence' to which this coverage applies."3 On appeal, the parties agree that Hexum has asserted claims alleging three kinds of property damage: (1) damage to the French drain in the shared driveway; (2)...

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