COURT OF APPEALS DECISION DATED AND FILED December 21, 2010 A.
John Voelker Acting Clerk of Court of Appeals |
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NOTICE |
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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. |
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APPEAL
from judgments of the circuit court for
Before Curley, P.J., Kessler and Brennan, JJ.
¶1 KESSLER, J. This case consolidates two appeals brought by Brinkmann Pools, LLC (“Brinkmann”).[1] In the 2009 appeal, Brinkman appeals from the trial court order granting summary judgment dismissing Hastings Mutual Insurance Company (“Hastings”). In the 2010 appeal, Brinkmann appeals the order granting judgment on the jury verdict in favor of Randy and Sheryl Lenzke.[2] We affirm both appeals.
BACKGROUND
¶2 In early 2007, Randy and Sheryl Lenzke (collectively “the Lenzkes”) contracted with Brinkmann to obtain and install a “Blue Isle” pool, which was manufactured by Blue Hawaiian. The pool’s pump was manufactured by Pentair. Soon after the installation of the pool, the Lenzkes observed two cracks on the bottom of the pool. The Lenzkes contacted Brinkmann by phone and wrote a letter about the cracks, but Brinkmann did not send anyone out to the Lenzkes’ property for over a month. Brinkmann did not finish repairing the cracks before closing the Lenzkes’ pool for the 2007 season. In April 2008, Brinkmann opened the Lenzkes’ pool for the season, but did not return to finish repairing the cracks. A side wall of the pool began to bulge and the Lenzkes contacted Brinkmann. Brinkmann said that it would send an inspector out the following week. A few days later, the Lenzkes discovered that water was shooting out of their pool through the pump, spraying water all over the area. Later the following day, when a Brinkmann employee removed the cover from the pool, the Lenzkes observed that the whole bottom of the pool was “one big bubble” and that the cracks had expanded.
¶3 The Lenzkes filed a complaint claiming breach of contract,
breach of warranty, violation of Wis.
Stat. §100.18 (2007-08),[3]
negligence, breach of the Wisconsin Home Improvement Practices Act,[4]
violation of Wis. Stat. §895.446,[5]
and various forms of misrepresentation against Brinkmann.
¶4 The matter then proceeded to trial without
¶5 The jury returned a verdict finding no breach of contract and no misrepresentation, but that Brinkmann had breached an implied warranty for which $130,000 would fairly and reasonably compensate the Lenzkes. Brinkman moved for reduction of the verdict, arguing that there was no evidence to support a verdict in excess of $109,000, the only estimate of the cost of the pool replacement. The trial court denied the motion and ordered judgment on the verdict.
¶6 Brinkmann appeals from the judgment dismissing
DISCUSSION
I. Summary Judgment Denying
Insurance Coverage.
¶7 In its
first appeal, Brinkmann contends that the trial court erred in granting
¶8 “We
review a grant of summary judgment de novo, relying on the same methodology as
the circuit court.” Estate of Sustache v. American
Family Mut. Ins. Co., 2008 WI 87, ¶17, 311
¶9 Brinkmann
argues that the trial court was wrong to grant summary judgment dismissing its
CGL carrier because
¶10 Our supreme court in Sustache explained the duty to defend:
An insurer’s duty to defend its insured is determined by comparing the allegations of the complaint to the terms of the insurance policy. The duty to defend is triggered by the allegations contained within the four corners of the complaint. It is the nature of the alleged claim that is controlling, even though the suit may be groundless, false, or fraudulent. The insurer’s duty to defend is therefore broader than its duty to indemnify insofar as the former implicates arguable, as opposed to actual, coverage.
Courts liberally construe the allegations in the complaint and assume all reasonable inferences.
[w]here the insurer has provided a defense to its insured, a party has provided extrinsic evidence to the court, and the court has focused in a coverage hearing on whether the insured’s policy provides coverage for the plaintiff’s claim, it cannot be said that the proceedings are governed by the four-corners rule.
¶11 The complaint alleges a variety of legal claims against Brinkmann, all of which seek damages because of the Lenzkes’ need to “remove the pool, install a new pool and redo their landscaping as well as spend considerable amounts of their own time in the process.” In response to a discovery request to the Lenzkes for “an itemization of any and all damages that are not directly attributable to the repair or replacement of the defendant’s work,” counsel for the Lenzkes responded: “Plaintiffs are not seeking any compensatory damages that are not directly attributable to the repair or replacement of Defendant’s work.”
¶12 Insurance
policies are construed as they would be understood by a reasonable person in
the position of the insured. Kremers-Urban
Co. v. American Emp’rs Ins. Co., 119
Our procedure follows three steps. First, we examine the facts of the insured’s claim to determine whether the policy’s insuring agreement makes an initial grant of coverage. If it is clear that the policy was not intended to cover the claim asserted, the analysis ends there. [Second], [i]f the claim triggers the initial grant of coverage in the insuring agreement, we next examine the various exclusions to see whether any of them preclude coverage of the present claim. Exclusions are narrowly or strictly construed against the insurer if their effect is uncertain. We analyze each exclusion separately; the inapplicability of one exclusion will not reinstate coverage where another exclusion has precluded it. Exclusions sometimes have exceptions[.] [Third], if a particular exclusion applies, we then look to see whether any exception to that exclusion reinstates coverage. An exception pertains only to the exclusion clause within which it appears; the applicability of an exception will not create coverage if the insuring agreement precludes it or if a separate exclusion applies.
American Girl, 268
¶13 As material to this litigation, the CGL policy provides coverage for “those sums that the insured becomes legally obligated to pay as damages because of … ‘property damage’ to which this insurance applies.”[8] “Property damage” is defined in the policy as “physical injury to tangible property.” However, under “Section I.2. Exclusions,” the policy specifically states that it does not apply to:
j. Damage To Property
(6): That particular part of any property that must be restored, repaired or replaced because “your work” was incorrectly performed on it.
….
Paragraph (6) of this exclusion does not apply to “property damage” included in the “products-completed operations hazard.”
….
l. Damage To Your Work
“Property damage” to “your work” arising out of it or any part of it and included in the “products-completed operations hazard.”
The definition of “Products-completed operations hazard” includes:
[A]ll … “property damage” occurring away from premises you own or rent and arising out of “your product” or “your work.” [9]
The policy explains that “your work” means “[w]ork or operations performed by you or on your behalf” and “[m]aterials, parts or equipment furnished in connection with such work or operations.” Warranties and representations made with respect to “your work” are also excluded under the policy.
¶14 We agree with the trial court that both the actual labor Brinkmann performed and the “materials and equipment furnished in connection with such work” are specifically excluded from coverage as “your work” under the policy. The installation of the pool, as well as the pool itself and the pump, are excluded from coverage under the policy language as part of “your work.” Property that must be “restored, repaired or replaced” because Brinkmann’s work was incorrectly performed is specifically excluded, unless it is included in the products-complete operations hazard. Therefore, coverage for collateral damage such as that caused by removing failed equipment, or landscaping damaged during the replacement of the failed pool, would initially be part of the “your work” exclusion. The products-completed operations hazard definition, however, excepts such collateral damage from the initial exclusion, thus returning collateral property damage coverage but still excluding damage to “your work.”
¶15 However,
by the time of the summary judgment motion, the Lenzkes had specifically
disavowed any claim for compensatory damages beyond those expenses “directly
attributable to the repair or replacement of Defendant’s work.”
As you know, the damages sought by your clients are for the repair or replacement of defendant Brinkmann Pools work or product. Please provide an itemization of any and all damages that are not directly attributable to the repair or replacement of the defendant’s work. Please describe the work and/or products and the corresponding damage. Please consider this an interrogatory pursuant to Wis. Stats. § 804.11.
The Lenzke’s counsel responded:
In response to your August 17th letter, Plaintiffs are not seeking any compensatory damages that are not directly attributable to the repair or replacement of Defendant’s work.
¶16 Thus, by
the time of summary judgment, the trial court found that the Lenzkes did not
assert any claims for collateral damage.
The Lenzkes do not appeal this finding.[10]
This left only the Lenzkes’ claim for
the repair and replacement of “your work” that is, the pool, as the subject of
the litigation. Repair or replacement of
“your work” was specifically excluded from coverage and was not excluded from
exclusion by the definition of “products-completed operations hazard.” The “products-completed operations hazard”
reinstates coverage not for “your work,” but for damages to other tangible
property caused by “your work.” Hence,
by the time summary judgment was requested,
¶17 In
addition, the jury essentially confirmed the correctness of the trial court’s
conclusion that there was no factual basis for coverage when it found the only basis for Brinkmann liability was
breach of an implied warranty. The
policy expressly excludes coverage
for “‘[p]roperty damage’ to ‘your work’ arising out of it or any part of it and
included in the ‘products-completed operations hazard’” unless the work was
performed by a subcontractor. The policy
includes “warranties or
representations … with respect to … your work” as part of “your work.” Thus, the only basis the jury found for
liability was part of “your work” under the policy, for which coverage is
expressly excluded under the policy.
¶18 Brinkmann also contends that summary judgment was improper because questions of fact existed regarding whether Brinkmann was a subcontractor, and therefore exempt from the “your work” exclusion in the CGL policy, as the exclusion does not apply to work performed by subcontractors. Brinkmann does not claim he contracted with any other entity to install the Lenzkes’ pool on his behalf. Brinkmann argues that because the term “subcontractor” is not defined in the policy, a question of fact exists as to whether Brinkmann acted as a subcontractor because the pump was obtained by a supplier, rather than manufactured by Brinkmann itself. We disagree. Brinkmann’s argument essentially makes Brinkmann its own subcontractor. The damages arose as a result of the pool’s condition and the parts installed and serviced by Brinkmann itself, not by Brinkmann acting as a subcontractor for another party.[11]
II. Discretionary Decisions
of the Trial Court.
¶19 In its second appeal, Brinkmann argues that the trial court erred in denying its motion for a mistrial based on improper statements made by the Lenzkes’ counsel, and in denying its motion for remittitur. We disagree.
¶20 “The
conduct of a trial is subject to the exercise of sound judicial discretion by
the trial court and its determinations will not be disturbed unless rights of
the parties have been prejudiced.” Valiga
v. National Food Co., 58
A. Brinkmann’s Motion for a Mistrial.
¶21 Brinkmann contends that the trial court improperly denied its motion for a mistrial because statements made by the Lenzkes’ counsel during closing arguments pertaining to Michael Bowers, a witness for the Lenzkes, improperly suggested that Brinkmann influenced Bowers’ opinion of the Lenzkes.
¶22 After
their pool failed, the Lenzkes contacted Bowers, the only other dealer in
¶23 Before the attorneys made their closing arguments, the jury was instructed that the attorneys’ arguments, conclusions, and opinions were not evidence and that it should draw its own conclusions and inferences.
¶24 During his closing argument, in response to Brinkmann’s characterization during trial of Bowers as the Lenzkes’ hired expert, the Lenzkes’ counsel told the jury:
Let’s look at what the witnesses say. They keep talking about this Bowers guy up north that we had. I had to go up there. I had to subpoena him for that deposition to get him to talk. He didn’t want to talk. They call him our witness. Well, he was – he was fine with us until he talks to Mr. Brinkmann, as you got out of the deposition. I don’t know what Mr. Brinkmann says, but all of a sudden he’s against us, he’s against our clients. Somehow Mr. Brinkmann got to that guy.
Brinkmann’s counsel, in the presence of the jury, interrupted the Lenzkes’ counsel’s argument, saying: “Judge, there’s no -- What is that? There’s no evidence to that. That’s improper.” The court responded by telling the Lenzkes’ counsel to “move on,” and that he didn’t “think any of that [was] in the record.” The Lenzkes’ counsel then defended the propriety of his argument and referred back to the videotape, saying:
I think it goes to this -- The reason -- I think what’s important about that is this. I asked him: After you talked to Mr. Brinkmann -- After you talked to Mr. Brinkmann -- And he said, oh, I was fine with the Lenzkes. And then he talks to Mr. Brinkmann. All that’s on the videotape.
Thereafter, during his own closing argument, Brinkmann’s lawyer responded to the comments by stating:
Now all of a sudden they have hired this individual and he is their expert and now all of a sudden they’re saying, well, he’s not really our expert anymore, we don’t really like him anymore and, oh -- oh, Brinkmann got to him. What nonsense. That is -- That’s not only nonsense, it’s down right slanderous to Mr. Brinkmann. And to say somehow that Mr. Brinkmann did something improper in this case and somehow communicated improperly to their expert is dog gone down right slanderous. And it’s shameful. It’s shameful. He says in his report, Mike Bowers: “Pool was installed correctly.”
Brinkmann’s counsel did not move for a mistrial at the conclusion of
closing arguments. He also expressly
declined to put anything on the record after the case had been submitted to the
jury.
¶25 A
mistrial motion must be brought promptly, while there is at least the
opportunity for the court to fix the problem short of a new trial. See
Shawver
v. Roberts Corp., 90
¶26 The record shows that the jury began deliberations at 4:30 p.m. After the jury was sent out, the trial court asked whether anyone wanted to put anything on the record. Counsel for both Brinkmann and the Lenzkes declined. The jury was dismissed for the day sometime after 5:00 p.m. The mistrial motion was not brought until the following day, after the trial court told the parties that the jury had reached a verdict. The trial court found that the Lenzkes’ counsel’s remark was “a relatively forgettable moment” in the context of the overall argument, and was met with the court’s direction to the Lenzkes’ counsel to “move on.” The trial court concluded that the motion should have been made during trial, before the jury began deliberations, because it was “exactly the type of thing that [could have been] cured by a curative instruction.” The trial court concluded that “a new trial [was] not warranted on that point.”
¶27 In Wausau Underwriters Ins. Co. v. Dane County, 142 Wis. 2d 315, 329-30, 417 N.W.2d 914 (Ct. App. 1987), we dealt with a claim of attorney misconduct during voir dire and a mistrial request immediately following the voir dire. We explained what must be established to merit a new trial based on improper remarks by counsel.
For us to order a new trial for improper remarks by counsel, it must “affirmatively appear” that the remarks prejudiced the complaining party. We must be convinced that the verdict reflects a result which in all probability would have been more favorable to appellants but for the improper conduct. The test for showing prejudice is most stringent when the trial court has found that the improper argument did not have a prejudicial effect and did not grant a new trial.
¶28 The trial
court concluded that Brinkmann was not prejudiced by the disputed closing argument
because the jury found in favor of Brinkmann on two of the three claims,
including the claim for fraudulent misrepresentation. Thus the jury was not inflamed against
Brinkmann by the comment in closing argument.
We conclude that these inferences are supported by evidence the trial
court found credible. See Balz
v. Heritage Mut. Ins. Co.,
2006 WI App 131, ¶22, 294
B. Sufficiency of evidence to support the damage award.
¶29 Brinkmann also challenges the jury verdict in the amount of $130,000, arguing that no evidence supports a verdict in excess of $109,000, and the verdict must be reduced to that amount obtained from Bowers’ estimate. We disagree.
¶30 The trial court’s authority to change an answer in a jury verdict is established in Wis. Stat. § 805.14(1):
Test of sufficiency of evidence. No motion challenging the sufficiency of the evidence as a matter of law to support a verdict, or an answer in a verdict, shall be granted unless the court is satisfied that, considering all credible evidence and reasonable inferences therefrom in the light most favorable to the party against whom the motion is made, there is no credible evidence to sustain a finding in favor of such party.
Thus a jury finding which is
based on an inference supported by any credible evidence may not be
overturned. See Reuben v. Koppen,
2010 WI App 63, ¶19, 324
¶31 In order
to change the damage answer from $130,000 to $109,000, the trial court must (a)
consider all credible evidence and reasonable inferences in favor of the jury
verdict and (b) grant the motion only if there is no credible evidence to
support the jury’s conclusion. See Coryell
v.
CONCLUSION
¶32 For all the foregoing reasons, we conclude that the trial court was correct in its determination at summary judgment that coverage did not exist under the CGL policy and therefore Hastings had no further duty to defend. We also conclude that the evidence supports the trial court’s findings and inferences upon which it denied Brinkmann’s motions for a mistrial and remittitur.
By the Court.—Judgments affirmed.
Not recommended for publication in the official reports.
[1] This court, on its own motion, ordered these appeals consolidated for disposition. See Wis. Stat. Rule 809.10(3).
[2] We note that Brinkmann had different counsel for the 2009 and 2010 appeals. We caution counsel for Brinkmann in the 2010 appeal about his failure to follow certain requirements of the rules of appellate procedure. See Wis. Stat. § 809.19(1)(d) & (e) (2007-08). Counsel in that appeal morphed much of the procedural history with a distractingly argumentative statement of facts. We were disappointed to discover that in some significant instances, relating to statements attributed to opposing counsel, the record did not fairly support the arguments advanced. We urge counsel, in the future, to accurately report the record, leaving argument as to the correct inferences therefrom only for the argument portion of the brief.
[3]
[4] The Wisconsin Home Improvement Practices Act can be found in Wis. Admin. Code § ATCP 110 and Wis. Stat. § 100.20.
[5] Wisconsin Stat. § 895.446 discusses property damage or loss caused by crime.
[6]
Wisconsin Stat.
§ 808.03(1), “unless otherwise expressly provided by law,” allows
appeal as a matter of right to the Court of Appeals of “[a] final judgment or a final order of a circuit court.” (Emphasis added.) As to summary judgment, Wis. Stat. § 802.08(2) provides
that “[t]he judgment sought shall be rendered if the pleadings, [and
discovery] together with the affidavits, if any, show that there is no genuine
issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Emphasis added.) The purpose of Wis. Stat. § 805.16 is not to rehash matters which have
already been reduced to judgment, but to give the trial court the opportunity
to correct errors of law or of discretion on a jury verdict before entering
judgment. See Ford Motor Co. v.
[7] We decline to address Brinkmann’s argument that the “accident” language in the policy provided coverage for the misrepresentation claim because our resolution of other issues makes that determination unnecessary. See Patrick Fur Farm, Inc. v. United Vaccines, Inc., 2005 WI App 190, ¶8 n.1, 286 Wis.2d 774, 703 N.W.2d 707 (appellate courts should decide cases on the narrowest possible grounds).
[8] The policy also requires that the property damage be the result of an “occurrence.” No party here argues that the pool failure was not an occurrence within the policy. The dispute is whether the pool failure was subject to a coverage exclusion.
[9] The definition of “products-completed operations hazard” includes several exceptions to the basic definition, none of which appear relevant to this case.
[10] Brinkmann does not directly dispute this finding, but instead argues that even at summary judgment the court may not look beyond the complaint to determine coverage by stating that “[t]he trial court also erred when it considered Hastings’ extrinsic evidence in ruling that the insurer had no duty to defend.”
[11] Brinkmann
also asks us to consider whether
[12] Brinkmann’s expert witness estimated the cost to replace the Lenzkes’ pool. He also acknowledged that there were other charges the owner would incur, which were not included in his estimate. These included such things as blueprints, application and permit fees, certified engineering and architectural stamps, and additional work that might be necessary for either contractor or subcontractors.