Vandenberg v. Continental Ins. Co.

• Decision Date: 03 July 2001
• Docket Number: No. 99-3193.,99-3193.
• Citation: 628 N.W.2d 876,2001 WI 85,244 Wis.2d 802
• Parties: Jamie VANDENBERG, Plaintiff-Appellant, v. The CONTINENTAL INSURANCE COMPANY, Defendant-Third-Party Plaintiff-Respondent, Leonard RIEHL and Stephanie L. Riehl, Defendants-Co-Appellants, DUMKE INSURANCE AND FINANCIAL SERVICES, INC. and Curt C. Fritz, Third-Party Defendants-Co-Appellants.
• Court: Wisconsin Supreme Court

244 Wis.2d 802

2001 WI 85

628 N.W.2d 876

Jamie VANDENBERG, Plaintiff-Appellant, v. The CONTINENTAL INSURANCE COMPANY, Defendant-Third-Party Plaintiff-Respondent, Leonard RIEHL and Stephanie L. Riehl, Defendants-Co-Appellants, DUMKE INSURANCE AND FINANCIAL SERVICES, INC. and Curt C. Fritz, Third-Party Defendants-Co-Appellants.

No. 99-3193.

Supreme Court of Wisconsin.

Oral argument April 11, 2001.

Decided July 3, 2001.

For the plaintiff-appellant there were briefs by Christopher H. Evenson and Sigman, Janssen, Stack, Wenning, Sewall & Pitz, Appleton, and oral argument by Christopher H. Evenson.

For the defendants-co-appellants there were briefs (in the court of appeals) by Keith W. Kostecke and Menn, Nelson, Sharratt, Teetaert & Beisenstein, Ltd., Appleton.

For the third-party defendants-co-appellants there were briefs (in the court of appeals) by Bruce A. Olson and Olson Law Group, LLC, Appleton, and oral argument by Bruce A. Olson.

For the defendant-third-party plaintiff-respondent there was a brief by Eric J. Magnuson, Daniel Q. Poretti, Jeanne A. Unger and Rider, Bennett, Egan & Arundel, LLP, Minneapolis, and oral argument by Jeanne A. Unger.

¶ 1. SHIRLEY S. ABRAHAMSON, CHIEF JUSTICE.

This is a review of an appeal from a judgment of the Circuit Court for Outagamie County, Dee R. Dyer, Circuit Court Judge. The appeal is before this court on certification from the court of appeals pursuant to Wis. Stat. (Rule) § 809.61 (1999-2000).

¶ 2. Infant Justin Vandenberg, while in a day care center operated by Stephanie Riehl, suffocated to death. The plaintiff, Jamie Vandenberg, Justin's mother, sued Leonard Riehl and Stephanie L. Riehl and their insurer, The Continental Insurance Company, alleging Stephanie Riehl's negligent supervision and control of her five-year-old child, who allegedly caused harm to Justin. Two issues are presented: (1) Does a day care provider's allegedly negligent supervision and control of her own child while providing day care services for other children fall, as a matter of law, within the "usual to non-business pursuits" exception to the "business pursuits" exclusion in a renter's insurance policy? (2) Are there material issues of fact from which a trier of fact could conclude that the Riehls were entitled to reformation of their renter's insurance policy to include day care coverage?

¶ 3. The circuit court granted summary judgment to Continental Insurance, holding that the Riehls were not entitled to insurance coverage for the death of Justin Vandenberg and that the Riehls were not entitled to reformation of their renter's insurance policy to include coverage for their day care business.

¶ 4. We reverse that part of the summary judgment in favor of Continental Insurance that the Riehls were not entitled to insurance coverage for the death of Justin Vandenberg. We direct the circuit court to grant the plaintiffs motion for a declaratory judgment, concluding that the Riehls' supervision and control of their son falls within the "usual to non-business pursuits" exception to the "business pursuits" exclusion of the policy.

¶ 5. Additionally, we reverse that part of the judgment of the circuit court granting summary judgment to Continental Insurance that the Riehls are not entitled to reformation of their renter's insurance policy to cover their home day care business. Accordingly, we remand the cause to the circuit court for further proceedings not inconsistent with this opinion.¹

I

[1]

¶ 6. An appellate court reviews a circuit court's grant of summary judgment independently of the circuit court, benefiting from its analysis. Lambrecht v. Estate of Kaczmarczyk, 2001 WI 25, ¶ 21, 241 Wis. 2d 804, 623 N.W.2d 751. Summary judgment is properly granted when there are no disputed issues of material fact and the moving party is entitled to judgment as a matter of law. Lambrecht, 2001 WI 25 at ¶ 24.

II

¶ 7. We turn to the first issue. For purposes of the motion for summary judgment relating to the renter's insurance policy coverage, the facts are not in dispute. On December 16, 1997, Stephanie Riehl was providing paid day care in her home for three children, one of whom was eight-month-old Justin Vandenberg. She was simultaneously caring for her own three children, including five-year-old Jason.

¶ 8. Sometime in the afternoon, Stephanie Riehl brought Justin to her upstairs bedroom for a nap. She secured Justin in a child seat and placed the seat on the floor of the bedroom. While Stephanie Riehl was caring for the remaining children downstairs, her son Jason went upstairs to her bedroom to watch television. Jason placed several pillows over Justin in an attempt to avoid waking him.² When Stephanie Riehl returned to check on Justin, she discovered that he had suffocated.

¶ 9. Jamie Vandenberg, Justin's mother, filed suit against the Riehls, alleging both negligent supervision of Justin and negligent supervision of their own son. The Continental Insurance Company, which had issued a renter's insurance policy to the Riehls, was also named as a defendant.

¶ 10. Jamie Vandenberg, the plaintiff, moved for declaratory judgment that her claim against the Riehls for the negligent supervision of their own son was covered by the Continental Insurance policy under the "usual to non-business pursuits" exception to the "business pursuits" exclusion. Continental Insurance moved for summary judgment dismissing itself from the action alleging that as a matter of law, the plaintiff's claims against the Riehls fell within the "business pursuits" exclusion to the insurance policy but did not fall within the "usual to non-business pursuits" exception to that exclusion.

¶ 11. The circuit court granted Continental Insurance's motion for summary judgment, dismissing Continental Insurance from the action, and denied the plaintiff's motion for declaratory judgment. The circuit court concluded that the "usual to non-business pursuits" exception to the "business pursuits" exclusion did not apply to the plaintiff's claim because the Riehls' usual non-business pursuit of supervising their own son was tainted by their home day care business. ¶ 12. The plaintiff and the Riehls appealed from the circuit court's summary judgment in favor of Continental Insurance.

¶ 13. To determine whether the plaintiff's claim falls into the "usual to non-business pursuits" exception to the "business pursuits" exclusion in the renter's insurance policy, we begin by looking at the policy language.

¶ 14. The renter's insurance policy excludes "business pursuits" from liability coverage, but excepts from "business pursuits" those activities that are "usual to non-business pursuits." Thus the policy insures for bodily injury arising out of business pursuits so long as the bodily injury arises out of activities that are usual to non-business pursuits. The exclusion and exception provisions in the policy read as follows:

I. Personal Liability and Medical Expense do not apply to bodily injury or property damage:

. . .

j. Arising out of business pursuits of you or any covered person. This exclusion does not apply to:

(1) Activities which are usual to non-business pursuits. . . .

¶ 15. The policy language defining "business" explicitly states that a home day care business is considered a business pursuit. The circuit court concluded, and the parties agree, that the Riehls' day care operation was a "business pursuit."

¶ 16. The legal issue in dispute is whether Stephanie Riehl's care of her own five-year-old child while operating a home day care business is an activity that is "usual to non-business pursuits" excepted from the "business pursuits" exclusion of the insurance policy. ¶ 17. The plaintiff asserts that the "usual to nonbusiness pursuits" exception applies because parents are continually engaged in supervising and caring for their children. The plaintiff concludes that supervising and caring for one's own child is not ordinarily part of or related to the home day care business but is an activity usual to non-business pursuits.

¶ 18. In contrast, Continental Insurance asserts that the correct interpretation of the policy language requires a case-by-case analysis of the immediate context of the activity giving rise to the claim. Continental Insurance argues that because Stephanie Riehl regularly supervised and cared for her own son while simultaneously providing day care services as a business, the activity of caring for her own son was usual to her business pursuit and not within the "usual to nonbusiness pursuits" exception.

¶ 19. The court of appeals' certification memorandum discusses three court of appeals cases that have addressed the non-business pursuits exception. The court of appeals first addressed the non-business pursuits exception in Bartel v. Carey, 127 Wis. 2d 310, 379 N.W.2d 864 (Ct. App. 1985), in which the insured was a band member who had hitched a trailer to a van in preparation for travel to a concert. The trailer later detached and struck a vehicle, killing an occupant. The court of appeals determined that hitching a trailer and traveling were activities common to everyday life but that they must be examined in the immediate context of the activity from which the claim arose. Because the van and trailer were being used for business purposes, that business use "tainted" the otherwise usual nonbusiness activity of hitching a trailer to a vehicle. "To hold otherwise would implicate two unreasonable results: robbing the exception of effect and expanding coverage to risks not contemplated under the policy."³ The court of appeals concluded that the claim did not fall within the non-business pursuits exception and denied coverage under the "business pursuits" exclusion.

¶ 20. After Bartel, the court of appeals decided Ruff v. Graziano, 220 Wis. 2d 513, 583 N.W.2d 185 (Ct. App. 1998), in which the non-business pursuits exception arose in the context of a day care business. In Ruff, a child under the...