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COURT OF APPEALS DECISION DATED AND RELEASED MARCH 25, 1997 |
NOTICE |
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A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See § 808.10 and
Rule 809.62(1), Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 96-0680
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT I
CATHERINE M. DOYLE AND
KARL ROHLICH,
Plaintiffs,
v.
WARD ENGELKE,
MISSIONARIES TO
THE PREBORN YOUTH FOR
AMERICA-
NATIONAL, YOUTH FOR
AMERICA-
MILWAUKEE, WISCONSIN,
JOSEPH L.
FOREMAN, MATTHEW
TREWHELLA,
KELLY DYKEMA, TIMOTHY
L.
RUCHTI, KURT L.
SONNENBURG,
BRYAN LONGWORTH AND
ADVOCATES
FOR LIFE MINISTRIES,
Defendants,
WISCONSIN VOICE OF
CHRISTIAN
YOUTH, INC., AND VIC
ELIASON,
Defendants-Appellants,
EMPLOYERS INSURANCE OF
WAUSAU, A MUTUAL
COMPANY,
Intervenor-Defendant-Co-Appellant,
ST. PAUL FIRE &
MARINE INSURANCE
COMPANY,
Intervenor-Defendant-Respondent,
MATTHEW TREWHELLA,
Defendant-Counter-Plaintiff-
Third Party Plaintiff,
v.
PLANNED PARENTHOOD OF
WISCONSIN,
INC., PLANNED
PARENTHOOD FEDERATION
OF AMERICA, INC.,
MILWAUKEE CLINIC
PROTECTION COALITION
SEVERA AUSTIN,
LINDA MELLOWES, JOHN
DOES AND JANE
DOES,
Third Party Defendants.
APPEALS from a judgment
of the circuit court for Milwaukee County:
WILLIAM D. GARDNER, Judge. Affirmed.
Before Cane, P.J.,
LaRocque and Myse, JJ.
MYSE, J. Wisconsin Voice of
Christian Youth, Inc. (WVCY), Vic Eliason and Employers Insurance of Wausau appeal
a summary judgment in favor of St. Paul Fire & Marine Insurance Company
dismissing the claims against the appellants' insurance company based upon the
trial court's determination that St. Paul's policy afforded no coverage to the
defendant on any of the claims being made against them. WVCY, Eliason and Employers concede that
eight of the eleven claims asserted by the plaintiffs do not fall within the
coverage granted by St. Paul's policy.
In granting summary judgment, the trial court concluded that there was
no coverage under the three disputed claims and therefore St. Paul had no duty
to defend or indemnify WVCY and Eliason.
Appellants contend, however, that the three claims for slander of title,
invasion of privacy and negligent supervision of employees are covered by St.
Paul's policy and that the trial court erred by granting summary judgment
dismissing St. Paul as a defendant in this action. Because this court concludes that no coverage is afforded under the
St. Paul policy for any of Doyle's claims, the judgment is affirmed.
The facts giving rise to
this lawsuit emanate from a demonstration at an abortion clinic in 1993. As a result of incidents that occurred
during and after the demonstration, Catherine Doyle filed a complaint charging
that the Engelkes falsely accused Doyle of cursing at and kicking Ekaterina
(Katie) Engelke, a child, in the face.
Doyle further contends that the Engelkes attempted to file a malicious
prosecution against Doyle for her actions and that WVCY, its affiliates and
officers published and broadcasted news accounts of Doyle's alleged assault
against Katie. In addition, two
employees of WVCY filed a false security agreement encumbering certain of
Doyle's property.
Three amended complaints
have been filed containing eleven different causes of action. The parties agree, however, that there is no
coverage under St. Paul's policy for any cause of action other than the
claims asserted by the plaintiffs for invasion of privacy, slander of title and
a claim involving WVCY's negligent supervision of its employees.
Whether a claim falls
within the purview of an insurance policy presents a question of law which this
court determines without deference to the trial court's determination. Smith v. Atlantic Mut. Ins. Co.,
155 Wis.2d 808, 810, 456 N.W.2d 597, 598 (1990). In making this determination, we examine the allegations set
forth in the complaint and apply those allegations to the terms of the
insurance policy to determine whether coverage is afforded by the policy. Professional Office Bldgs., Inc. v.
Royal Indem. Co., 145 Wis.2d 573, 580, 427 N.W.2d 427, 429 (Ct. App.
1988). We are required to liberally
construe the allegations of the complaint and to assume all reasonable
inferences arising from the allegations of the complaint. Atlantic Mut. Ins. Co. v. Badger
Medical Supply Co., 191 Wis.2d 229, 241-42, 528 N.W.2d 486, 491 (Ct.
App. 1995). In the event there is an
ambiguity as to whether coverage is afforded, the ambiguity must be resolved in
favor of coverage. Smith,
155 Wis.2d at 810-11, 456 N.W.2d at 598.
We start our examination
with the claim that WVCY was negligent in the supervision of its employees
based on its employees filing a false security agreement encumbering Doyle's
property and serving a false subpoena at Doyle's home.[1] The trial court found that no coverage was
afforded for this claim based upon the intentional acts exclusion contained in
the insurance policy, the definition of bodily injury as defined in the policy
and the definition of an event as defined in the policy.
The applicable
provisions of the insurance policy are as follows:
Bodily Injury and property damage
liability. We'll pay
amounts any protected person is legally required to pay as damages for covered
bodily injury ... that:
• happens while this agreement is in
effect; and
• is caused by an event.
...
Bodily injury
means any physical harm, including sickness or disease, to the physical health
of other persons. It includes any of
the following that results at any time from such physical harm, sickness or
disease:
• Mental anguish, injury or illness.
• Emotional distress.
• Care,
loss of services, or death.
The complaint alleges
that Doyle suffered severe emotional distress resulting in
"disabling" injuries. For the
purposes of this analysis, we assume the existence of the facts alleged in the
complaint. See Kenefick v.
Hitchcock, 187 Wis.2d 218, 224, 522 N.W.2d 261, 266 (Ct. App 1994). We
also construe the allegations of the complaint liberally in determining whether
insurance coverage is afforded. Atlantic
Mut., 191 Wis.2d at 241-42, 528 N.W.2d at 491.
St. Paul contends that
bodily injury is not alleged because Doyle claims her emotional distress caused
her injury and that for coverage to exist, the policy requires emotional
distress to result from a physical harm, sickness or disease. We disagree. Doyle's complaint alleges she suffered "severe and disabling
emotional distress." The complaint
alleges a "disabling" injury as a result of the insured's act. Whether her disabling injury was the first
link in the chain from the action or resulted from emotional distress which was
the result of the insured's action makes no difference in this case because the
policy covers bodily injury which is alleged to have been suffered by
Doyle.
Under the policy,
"bodily injury means any physical harm, including sickness or
disease." The conclusion that
emotional distress falls within the meaning of "bodily injury" under
the policy is compelled by our holding in Tara N. by Kummer v. Economy
Fire & Cas. Ins. Co., 197 Wis.2d 77, 540 N.W.2d 26 (Ct. App.
1995). In Tara N., the
Wisconsin Court of Appeals concluded that the term "bodily injury"
encompassed claims for emotional or psychological harm. The court said:
Mental, emotional or psychological conditions
are commonly considered as sickness or disease by both lay persons and medical
professionals. Such conditions are
routinely treated by medical personnel employing medical procedures. A reasonable insured would understand such
conditions to be included within the concepts of "sickness or
disease" which the policy uses to define "bodily injury."
Id. at
87, 540 N.W.2d at 30. Because St.
Paul's insurance policy included both sickness and disease, we consider the
holding of Tara N. to compel the conclusion that the emotional
harm alleged by Doyle falls within the first sentence of St. Paul's definition
of "bodily injury." We
therefore do not consider the subsequent language expanding coverage for
emotional distress or mental anguish resulting from physical harm, sickness or
disease as limiting the definition which provides coverage for emotional
distress as a "bodily injury" itself. Because we accept the allegations as true, this allegation
sufficiently alleges a bodily injury.
St. Paul next contends that Doyle's claim for
negligent supervision of WVCY's employees is not covered because the filing of
a false financial statement encumbering Doyle's property is not an
"event" as defined by the policy.
"Event" is defined as "an accident, including continuous
or repeated exposure to substantially the same general harmful
condition." We conclude that the
negligent conduct alleged against WVCY, a failure to properly supervise its
employees, is a claim of negligence falling within the meaning of
"accident" as that term is used in the definition of
"event."
The distinction between
a negligent act and an accident for the purpose of this discussion is difficult
to discern. The definition of
"accident" is defined as a "sudden event or change occurring
without intent or volition through carelessness, unawareness, ignorance, or a
combination of causes and producing an unfortunate result." Webster's
Third New Int'l Dictionary 11 (Unabr. 1976). "Negligence" is "characterized chiefly by
inadvertence, thoughtlessness, inattention, and the like ...." Black's
Law Dictionary 1032 (6th ed. 1990). Because of the similarity between
these definitions, a reasonable insured would expect to have coverage for this
sort of negligence under the "accident" term in the policy.
Finally, St. Paul
contends that there is no liability under the claimed negligent supervision of
employees because of the intentional acts exclusion of the insurance
policy. The policy contains the
following exclusion: "[W]e won't
cover bodily injury or property damage that's expected or intended by the
protected person." A
"protected person" includes employees "only for work done within
the scope of their employment by you."
St. Paul argues that the conduct giving rise to liability specified in
the complaint involved intentional conduct within this exclusion. The appellants argue that we should focus on
the allegation that WVCY was negligent in supervising its employees. Although negligence is the nature of the
allegation against WVCY, the complaint alleges the acts which form the basis of
the complaint were performed by WVCY employees within the scope of their
employment. Under the policy, employees
acting within the scope of their employment are protected persons. Therefore, the complaint itself alleges that
the conduct giving rise to liability was the intentional act of the insured.
The complaint alleges
two employees of WVCY, Kanz and Shierbach, filed a false security agreement
with the secretary of state on which Kanz forged Doyle's signature and falsely
stated that Kanz had a lien on Doyle's assets and the assets of her law
partners. The complaint alleges the
false security agreement was filed "in an attempt to prevent or hinder her
from performing her lawful acts and in order to intimidate, harass, frighten
and upset her." Kanz is alleged to
have directed three individuals to serve a false subpoena signed by him upon
Doyle in order to harass and intimidate her.
Finally, the complaint alleges that when Kanz performed these activities
he "was in the scope of or aided by his employment with WVCY and was
acting in furtherance of WVCY's interests."
For the intentional act
exclusion to apply, the protected person must have expected or intended bodily
injury. The complaint does not allege
that any of the WVCY employees intended or expected bodily injury, rather it is
alleged that they intended to cause emotional distress. We have already explained that "bodily
injury" includes emotional distress.
Therefore, as long as the employees intended emotional distress to
Doyle, they intended bodily injury.
Doyle asserts that
whether the employees intended the amount of emotional distress she suffered is
a fact question for the jury. The
complaint, however, alleges the employees intended to inflict some degree of
emotional distress. The employees are
not required to intend the exact magnitude of the injury that occurs. See Pachucki v. Republic Ins.
Co., 89 Wis.2d 703, 278 N.W.2d 898 (1979). Rather, as long as they intended any degree of emotional
distress, it is sufficient to constitute "bodily injury" under the
policy. They need not intend the degree
of harm which was ultimately alleged to have been inflicted upon Doyle for the
intentional act exclusion to be applicable.
The intentional act exclusion requires only that some bodily harm be
intended.
We do not decide whether
an intention to inflict any degree of emotional distress states a cause of
action. We decide only for coverage
purposes that emotional distress is within the definition of "bodily
injury."
Doyle's complaint
alleges that the WVCY employees, while in the scope of their employment, served
the subpoena and filed the security agreement in order to "harass,"
"intimidate, frighten and upset" Doyle. The complaint, therefore, alleges intentional conduct on behalf
of an insured. Because the employees are
alleged to have acted intentionally in the scope of the employment to inflict
bodily injury to Doyle, we conclude that the claim for negligent supervision of
employees is excluded from coverage under the intentional act exclusion.
We next turn to the
slander of title and invasion of privacy claims. WVCY contends that because St. Paul's policy specifically grants
coverage for a claim of slander, it must grant coverage to Doyle's claim of
slander of title based upon the false financial statement filed by Kanz. We do not agree. Slander is an offense against the person which damages a person's
reputation. Towne Realty v.
Zurich Ins. Co., 193 Wis.2d 544, 555, 534 N.W.2d 886, 891 (Ct. App.
1995). Slander of title is a claim
against property which involves damage to property. Kensington Dev. Corp. v. Israel, 142 Wis.2d 894,
419 N.W.2d 241 (1988). Because slander
and slander of title involve two and distinct types of claims, slander of title
is not subsumed by the policy provision granting indemnity for the tort of
slander.
Even if we were to
conclude that the indemnification for slander is sufficiently broad to include
slander of title, indemnification would not be required because liability
resting on slander of title requires proof that the defendant knew the contents
to be false, a sham or frivolous.
Section 706.13, Stats. St. Paul contends that such a claim would
come within the false material exclusion.
The false material exclusion provides:
False material. We won't cover personal injury or advertising injury that results
from making known to any person or organizations false written or spoken
material that:
• was made known by or for the
protected person; and
• the
protected person knew was false when it was made known.
Without
any detailed analysis, the false material exclusion applies. St. Paul further argues that the claim of
slander in title would also be excluded under the deliberately breaking the law
exclusion. The exclusion reads:
"We won't cover personal injury ... that results from ... the protected
person knowingly breaking any criminal law." The policy further states that a "personal injury
offense" includes "libel or slander." We agree that this exclusion would apply if slander included
slander of title. Therefore, the policy
excludes coverage for the claim of filing a false security agreement,
regardless whether slander of title is included in slander.
We next turn to Doyle's
claim that the allegation of invasion of privacy is covered by St. Paul's policy. St. Paul argues that this claim is not
covered by operation of the broadcasting exclusion in the policy. The invasion of privacy claim stems from the
allegation that WVCY made widespread disclosure of the charge that Doyle kicked
Katie during a demonstration at the abortion clinic, which was either known to
be false or published in reckless disregard to its truthfulness. The complaint alleged a knowing publication
of false confidential information in violation of § 48.981, Stats., requiring information regarding
a juvenile be held confidential. The
requirement that a personal injury claim must result from business activities
other than broadcasting excludes damages flowing from the alleged false
reporting of this incident.
Bodily injury liability
is required to flow from business activities other than "broadcasting,
publishing or telecasting" done by or for WVCY. The broadcasting exclusion specifically envisions claims based
upon the publication of material alleging to give rise to personal injury. "Broadcasting" is defined by the
policy as "transmitting any audio material by radio or transmitting or
televising any audio or visual material by television for any purpose." The policy defines "publishing" as
"creating or producing any printed material for distribution or sale to
others for any purpose."
The claim for invasion
of privacy rests upon the contention that WVCY disseminated false information
alleging that Doyle kicked Katie during a demonstration. The complaint alleges that these false stories
were broadcast over two news shows, that the statements were made over the
radio and that the statements were disseminated to a variety of media
sources. Because these acts fall within
the definition of the broadcasting and publication exlcusion, the allegations
of Doyle's complaint are insufficient to allege a business activity which
provides indemnification under the policy.
Because the allegations are insufficient to bring this claim within the
purview of a covered business activity as defined by the policy, we conclude
that there is no indemnification under St. Paul's policy for any damages
arising from a claimed invasion of privacy.
We conclude that no
coverage is afforded under the St. Paul policy for the claim of negligent
supervision because the intentional act exclusion applies. We also conclude that no coverage exists for
slander of title because it is not included within the meaning of slander and
that no coverage is provided for the invasion of privacy claim because of the
broadcasting exclusion.
By the Court.—Judgment
affirmed.
Not recommended for
publication in the official reports.