PUBLISHED OPINION
Case No.: 95-0688
†Petition for review filed.
Complete Title
of Case:
ROBERT PROSSER,
Plaintiff-Appellant,
v.
RICHARD A. LEUCK and
CEDARBURG MUTUAL
INSURANCE COMPANY,
†Defendants-Respondents.
Submitted on Briefs: July 31, 1995
Oral Argument:
COURT COURT
OF APPEALS OF WISCONSIN
Opinion Released: September 6, 1995
Opinion Filed: September
6, 1995
Source of APPEAL Appeal from a judgment
Full Name JUDGE COURT: Circuit
Lower Court. COUNTY: Barron
(If "Special", JUDGE: James C. Eaton
so indicate)
JUDGES: Cane, P.J., LaRocque and Myse, JJ.
Concurred:
Dissented:
Appellant
ATTORNEYSFor
the plaintiff-appellant the cause was submitted on the briefs of Michael J.
Neitzke of Novitzke, Gust & Sempf of Amery.
Respondent
ATTORNEYSFor
the defendants-respondents the cause was submitted on the brief of H. Ben
Levy of Levy & Levy, S.C. of Cedarburg.
COURT OF APPEALS DECISION DATED AND RELEASED September 6, 1995 |
NOTICE |
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, Stats. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-0688
STATE
OF WISCONSIN IN COURT OF
APPEALS
ROBERT PROSSER,
Plaintiff-Appellant,
v.
RICHARD A. LEUCK and
CEDARBURG MUTUAL
INSURANCE COMPANY,
Defendants-Respondents.
APPEAL from a judgment
of the circuit court for Barron County:
JAMES C. EATON, Judge. Reversed
and cause remanded with directions.
Before Cane, P.J.,
LaRocque and Myse, JJ.
MYSE, J. Robert Prosser appeals a
judgment dismissing his complaint against Richard A. Leuck and Leuck's insurer,
Cedarburg Mutual Insurance Company.
Prosser sought damages resulting from a fire in his warehouse which
thirteen-year-old Leuck caused while trespassing and engaging in horseplay in
the warehouse. Prosser contends that
the trial court erred when it dismissed his complaint following a jury verdict
based upon the principles of fortuity, concluding that no reasonable person
would anticipate insurance coverage for Leuck's acts. Because we conclude that the principles of fortuity do not
preclude Prosser's recovery from Cedarburg, we reverse the judgment and direct
judgment be entered for Prosser based upon the jury verdict.
Prosser owned a
warehouse in Turtle Lake, Wisconsin.
Leuck and two other minors entered the warehouse by climbing onto the
roof and pushing open a window. The
juveniles intentionally broke into the building without Prosser's consent and
intentionally damaged various items of personal property located within the
warehouse. Leuck and Allen H., one of
the minors, found a gasoline can, a cigarette lighter and a small plastic
bottle in the warehouse. After filling
the bottle with gasoline, they poured a couple of drops of gasoline the
approximate size of a quarter on the concrete window sill of the upper floor
and ignited them. While the gasoline
was burning on the window sill, Allen sprinkled more gasoline onto the fire
causing the flames to rise. When the
flames rose, they burned his hand causing him to drop the then burning bottle
at Leuck's feet. Leuck then kicked the
burning bottle down a hole in the floor to the first floor. The fire quickly spread and caused extensive
damage to the warehouse and its contents.
Leuck was an insured
under his parents' homeowner's policy with Cedarburg. Prosser filed suit against Leuck and Cedarburg, and Cedarburg
argued that the intentional act exclusion within the policy barred
coverage. The trial court refused to
grant summary judgment to Cedarburg based upon the intentional act exclusion
contained within the policy. The trial
court then entered an order to bifurcate the proceedings between the coverage
issue and the liability and damages issues.
The jury found that
Leuck did not intend to cause damage to the warehouse by means of fire. Following the jury verdict, the trial court
concluded that based upon principles of fortuity Cedarburg was entitled to judgment
notwithstanding the verdict and dismissed Prosser's complaint against
Cedarburg.
The single issue
presented for resolution is whether the principles of fortuity preclude Prosser
from recovering from Cedarburg, Leuck's insurer.
[T]he
"principle of fortuitousness"... is, that insurance covers fortuitous
losses and that losses are not fortuitous if the damage is intentionally caused
by the insured. Even where the
insurance policy contains no language expressly stating the principle of
fortuitousness, courts read this principle into the insurance policy to further
specific public policy objectives including ... (4) maintaining coverage
of a scope consistent with the reasonable expectations of the contracting
parties on matters as to which no intention or expectation was expressed. Keeton, Insurance Law, sec. 5.3(a),
p. 279 (1971).
Hagen
v Gulrud, 151 Wis.2d 1, 4, 442 N.W.2d 570, 572 (Ct. App. 1989)
(citing Hedtcke v. Sentry Ins. Co., 109 Wis.2d 461, 483-84, 326
N.W.2d 727, 738 (1982)).
The application of a legal
standard to a set of facts is a question of law which we determine without
deference to the trial court. Kimberly-Clark
Corp. v. LIRC, 138 Wis.2d 58, 66, 405 N.W.2d 684, 688 (Ct. App. 1987).
Cedarburg argues that
the principles of fortuity enunciated in K.A.G. v. Stanford, 148
Wis.2d 158, 434 N.W.2d 790 (Ct. App. 1988), and Hagen compel the
trial court's conclusion that no reasonable insured would expect insurance
coverage for damages resulting from a thirteen year old's horseplay. We disagree. In both K.A.G. and Hagen, we dealt
with principles of fortuity based upon sexual assaults committed by the
insured. In K.A.G., we
concluded that the intentional act exclusion in the policy applied because the
intentional act of sexual assault was of a nature that the intent to harm could
be inferred as a matter of law without regard to the actual subjective beliefs
in the mind of the insured at the time he committed the acts.[1] Id. at 164, 434 N.W.2d at
793. However, we also noted that the
trial court's analysis, that coverage should be denied because no reasonable
person would expect coverage for damages resulting from the defendant's
intentional sexual misconduct, was based upon sound legal principles and presented
a viable alternative analysis. Id.
at 165-66, 434 N.W.2d at 793.
In Hagen,
we adopted that same analysis holding that insurance coverage for injuries
arising out of a nonconsensual sexual assault was not within the reasonable
expectations of the contracting parties.
Id. at 7, 442 N.W.2d at 573. We concluded that because there was no coverage as a matter of
law, the jury's finding that the defendant had not intentionally caused
injuries to the plaintiff was irrelevant.
Id. Because it is
good public policy to deter sexual assaults, we did "not want to remove
any deterrence that the threat of a money judgment provides." Id.
The principles of
fortuity were also applied in Ramharter v. Secura Ins., 159
Wis.2d 352, 463 N.W.2d 877 (Ct. App. 1990).
In that case, the plaintiff claimed damages for emotional injuries he
suffered from witnessing a murder-suicide.
The insured was the individual who committed the murder and then took
his own life. Once again, the court was
dealing with an intentional criminal act when it concluded that no reasonable
insured would expect coverage given the conduct. Id. at 356, 463 N.W.2d at 879.
Thirteen-year-old
Leuck's act of playing with fire is far removed from the intentional criminal
acts of sexual assault and murder. It
is imperative to recognize that, although the juveniles' intent was disputed,
the jury determined that the fire resulted from the juveniles' negligent acts. An insured reasonably anticipates coverage
for negligent conduct when he purchases insurance. There is no public policy that would support the trial court's
conclusion to the contrary. These
damages are neither so remote as not to be within the contemplation of the
parties at the time the policy was purchased, nor, based on the jury's
findings, was the damage resulting from the juvenile's conduct intended. Under these circumstances, the court erred
when it invoked the doctrine of fortuity to preclude insurance coverage for the
negligent acts of the juvenile.
Cedarburg further
contends that the court properly concluded that no reasonable insured would
expect coverage considering the totality of the circumstances because the
intentional acts exclusion in the policy applied under Pachucki v.
Republic Ins. Co., 89 Wis.2d 703, 278 N.W.2d 898 (1979). The interpretation of an insurance policy
presents a question of law which we determine independent from the trial
court. Hagen, 151 Wis.2d
at 3, 442 N.W.2d at 571. Appellate
courts should construe an insurance policy as a reasonable person in the
position of the insured would understand it.
Id.
The court in Pachucki
recognized that two requirements must be met for an intentional loss exclusion
to apply: (1) the insured must intentionally act, and (2) the insured must intend
some injury or harm from that act. Id.
at 710, 278 N.W.2d at 902. Pachucki
stands for the proposition that when some harm is intended and a greater harm
was substantially certain to follow, the intent of the greater harm will be
inferred. Id. at 712-13,
278 N.W.2d at 903.
Cedarburg
contends that the requirement of "intent to harm" was met by Leuck's
admission of intent to damage property in the warehouse by means other than
fire and by Leuck's admission that he expected some minor harm would result
from starting the fire, such as a black stain on the concrete window sill. We disagree. In this case, the intentional act was to play with fire. The intentional damage to other personal
property by means other than fire is irrelevant because the fire damage was not
caused by the intentional act of property damage. We also conclude that expecting harm in the form of a small stain
on the concrete window sill is insufficient to satisfy the intent to harm
requirement. Some minor damage was
expected when the juveniles lit the drops of gas on the concrete, but the
severe damage to the building was not substantially certain to follow. See Gouger v. Hardtke,
167 Wis.2d 504, 515, 482 N.W.2d 84, 89 (1992).
Because a fire destroying the building and its contents is so far
removed from burning small amounts of gasoline on a concrete window sill, we
conclude that the destruction of the building did not result from an
intentional act as that term is used in the insurance policy.
We therefore conclude that the court erred
when it applied the principles of fortuity to preclude Prosser from recovering
under the insurance policy. We reverse
the trial court's judgment dismissing Prosser's complaint and remand this case
to the trial court with directions to enter judgment in favor of Prosser in
such amount as is ultimately determined.
By the Court.—Judgment
reversed and cause remanded with directions.
[1] In Wisconsin, an intentional acts exclusion applies only where the insured acts intentionally and intends some harm or injury to follow from the act. Loveridge v. Chartier, 161 Wis.2d 150, 168, 468 N.W.2d 146, 150 (1991). In K.A.G. v. Stanford, 148 Wis.2d 158, 434 N.W.2d 790 (Ct. App. 1988), the defendant did not deny intending the act but did deny that he intended to harm the plaintiff.