PUBLISHED OPINION
Case No.: 95-3223
Complete Title
of Case:
BANK ONE, MILWAUKEE, NA,
Plaintiff,
v.
BREAKERS DEVELOPMENT,INC.,
MORGAN-WIGHTMAN SUPPLY COMPANY,
CHARLES A. RICE,
MULKEY RAWSON ELECTRIC, INC., and
THE RAFAL CORPORATION,
Defendants,
DIMENSIONAL CONSTRUCTION, INC.,
Defendant-Appellant,
TIM KONICEK,
Intervening Defendant,
AMERICAN FAMILY MUTUAL
INSURANCE COMPANY,
Intervening Defendant-Respondent.
Submitted on Briefs: December 3, 1996
COURT COURT
OF APPEALS OF WISCONSIN
Opinion Released: January 8, 1997
Opinion Filed: January 8, 1997
Source of APPEAL Appeal
from an order
Full Name JUDGE COURT: Circuit
Lower Court. COUNTY: Racine
(If "Special", JUDGE: Emily S. Mueller
so indicate)
JUDGES: Brown,
Nettesheim and Anderson, JJ.
Concurred:
Dissented:
Appellant
ATTORNEYSOn
behalf of the defendant-appellant, the cause was submitted on the briefs of
Jeffrey Leavell and Gregory Boe of Jeffrey Leavell, S.C. of
Racine.
Respondent
ATTORNEYSOn behalf
of the defendant-respondent, the cause was submitted on the brief of David
G. Peterson of Peterson, Johnson & Murray, S.C., of Milwaukee.
COURT OF APPEALS DECISION DATED AND RELEASED January 8, 1997 |
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. 95-3223
STATE
OF WISCONSIN IN COURT OF
APPEALS
BANK ONE, MILWAUKEE,
NA,
Plaintiff,
v.
BREAKERS
DEVELOPMENT,INC.,
MORGAN-WIGHTMAN SUPPLY
COMPANY,
CHARLES A. RICE,
MULKEY RAWSON
ELECTRIC, INC., and
THE RAFAL CORPORATION,
Defendants,
DIMENSIONAL CONSTRUCTION, INC.,
Defendant-Appellant,
TIM KONICEK,
Intervening Defendant,
AMERICAN FAMILY MUTUAL
INSURANCE COMPANY,
Intervening Defendant-Respondent.
APPEAL from an order of
the circuit court for Racine County:
EMILY S. MUELLER, Judge. Affirmed.
Before Brown, Nettesheim
and Anderson, JJ.
BROWN, J. Dimensional Construction,
Inc., is defending a slander of title action.
This appeal concerns whether its insurer, American Family Mutual
Insurance Company, owes coverage under a commercial general liability policy. Dimensional argues that the policy applies
because it covers “slander” against a “person's or organization's goods,
products or services.” Alternatively,
Dimensional argues that the policy applies because it provides liability
coverage for “property damage.”
However, since a reasonable insured would not believe that the terms
“goods” or “products” were meant to include real estate titles, we reject
Dimensional's initial argument.
Moreover, because a reasonable insured would not associate property
damage with economic loss resulting from the slandering of title, we reject
Dimensional's alternative argument. We
affirm the circuit court's order awarding summary judgment to American Family.[1]
We begin with a brief
description of the action giving rise to this coverage dispute between
Dimensional and American Family.
Dimensional was involved with a condominium project in Caledonia. The project was scheduled to be built in
several phases. Dimensional began work
on Phase III, but stopped work when it was not paid.
The whole project
subsequently went into foreclosure and Dimensional acquired the lender's rights
to Phase III. But while Dimensional
was preparing the property for sale, it found what it believed to be an error
in the legal description. The face of
the document indicates that the Phase II condominium owners also own the Phase
III land. As Dimensional became
involved in the effort to clear title, the condominium owners counterclaimed
alleging that Dimensional slandered their title to the Phase III property.
Dimensional subsequently
sought coverage from American Family for the slander of title counterclaim. American Family responded by moving for
summary judgment on grounds that its policy did not provide coverage. The circuit court granted the motion. It found that a title to real property is
neither “goods, products or services” as American Family's policy requires to
qualify for coverage owing to slander.
The circuit court further found that damages arising from slander of
title are “pecuniary” and hence are not encompassed by American Family's policy
which, in the relevant part, applies only to instances involving “property
damage.”
We now address
Dimensional's contention that the circuit court erred in awarding summary
judgment. We owe no deference to the
circuit court's findings since the decision to award summary judgment and the
interpretation of an insurance contract are matters of law. See Benjamin v. Dohm, 189
Wis.2d 352, 358-59, 525 N.W.2d 371, 373 (Ct. App. 1994).
Our objective when
interpreting the provisions of an insurance policy is to ascertain the intent
of the parties. See Muehlenbein
v. West Bend Mut. Ins. Co., 175 Wis.2d 259, 264, 499 N.W.2d 233, 234-35
(Ct. App. 1993). We give the terms of
the policy their common and ordinary meaning and gauge the effect that these
terms would have on a reasonable person in the insured's position. See Holsum Foods v. Home Ins.
Co., 162 Wis.2d 563, 568-69, 469 N.W.2d 918, 920 (Ct. App. 1991). We will now apply these maxims to American
Family's policy and determine if a reasonable insured standing in Dimensional's
shoes would believe that the policy provided coverage for this slander of title
action.
Dimensional initially
points to the personal and advertising injury liability coverage. This section of the policy explains that
American Family “will pay those sums that the insured becomes legally obligated
to pay as damages because of ‘personal injury’ or ‘advertising injury’
....” Although the policy describes a
variety of offenses that are “personal injuries,” the section that Dimensional
believes applies states:
‘Personal Injury’ means injury, other
than ‘bodily injury,’ arising out of one or more of the following offenses:
....
d.Oral
or written publication of material that slanders or libels a person or
organization or disparages a person's or organization's goods, products or
services ....
Dimensional
asserts that its prosecution of the action against the Phase II owners, generally
alleging that they had imperfect title to Phase III, constitutes the slandering
of the Phase II owners' “goods” or “products.”
We conclude, however,
that a reasonable person would not equate a title to real estate as a “good” or
“product.” To ascertain the common and
ordinary meaning of a term, we look to dictionary definitions. See Holsum Foods, 162 Wis.2d
at 569, 469 N.W.2d at 921. We thus turn
to Webster's, which provides the following definitions:
goods pl : tangible
movable personal property having intrinsic value usu. excluding money and other
choses in action but sometimes including all personal property and occas.
including vessels and even industrial crops or emblements, buildings, or other
things affixed to real estate but agreed to be severed : chattles, wares,
merchandise, food products, chemical compounds, and agricultural products
...
product 2 a :
something produced by physical labor or intellectual effort : the result of
work or thought ...
Webster's Third New International Dictionary 978,
1810 (1976). Based on these
definitions, we believe that a reasonable person would interpret the policy to
only cover claims involving slander of tangible property (such as a widget), or
possibly intellectual property (such as the lyrics to a song). These expressions, however, stand in
contrast to Webster's definition of “title” as “something that constitutes a
legally just cause of exclusive possession.”
Id. at 2400. A
reasonable insured would thus associate the policy's use of the terms “goods”
or “products” to mean that the policy applied to things that have value in and
of themselves, as opposed to “titles,” which only have value if they become
officially recognized.
Moreover, we observe
that although the term “title” is not defined in the policy, this word is used
to describe the related coverage for advertising injuries. Here, coverage is not only provided if the
insured slanders “goods, products or services” but also applies when the
insured commits the offense of “infringement of copyright, title or
slogan.” (Emphasis added.) Indeed, at
least one court assessing a comparably worded clause has suggested that it
would provide coverage for a slander of title claim, so long as it stemmed from
advertising. See Sentex
Sys., Inc. v. Hartford Accident and Indem. Co., 882 F. Supp. 930, 944
(C.D. Cal. 1995), aff'd, 93 F.3d 578 (9th Cir. 1996). Therefore, the fact that this section of the
American Family policy uses the term “title” to supplement the terms
“goods” and “products” further confirms that this policy's personal injury
coverage was not intended to encompass slander of title claims. See Berg v. Schultz, 190
Wis.2d 170, 175, 526 N.W.2d 781, 783 (Ct. App. 1994) (“an insurance policy must
be considered as a whole to give reasonable meaning to every provision”).
Dimensional's
alternative argument involves the policy's bodily injury and property damage
liability coverage. This section
likewise explains that American Family “will pay those sums that the insured
becomes legally obligated to pay as damages because of ‘bodily injury’ or
‘property damage’ ....” Here,
Dimensional claims that the slander of title constitutes “property damage”
under this policy. The policy defines
“property damage” as:
a.Physical injury to tangible
property, including all resulting loss of use of that property. All such loss of use shall be deemed to
occur at the time of the physical injury that caused it; or
b.Loss of use of tangible
property that is not physically injured.
All such loss shall be deemed to occur at the time of the ‘occurrence’
that caused it.
Citing
to the “b.” definition, Dimensional argues that the prosecution of the
underlying action has hindered the Phase II owners' “use” of the Phase III
property because “[i]nherent to a claim for slander of title is the loss of use
of the subject property.” But
Dimensional offers no legal authority for this “inherent” proposition and we
disagree with its reasoning.
As American Family
correctly explains, no party has alleged that Dimensional's actions have caused
the “loss of use” of any property. In
the Phase II owners' complaint, they contend that Dimensional seeks an “adverse
interest” in their property. They seek
judgment declaring their ownership. In
fact, consistent with Kensington Dev. Corp. v. Israel, 142 Wis.2d
894, 902-03, 419 N.W.2d 241, 244 (1988), the Phase II owners additionally
demand monetary and punitive damages.
We thus reject
Dimensional's argument that the Phase II owners' slander of title claim really
concerns their perceived “loss of full use, quiet enjoyment and control over
Phase III.” The Phase II owners' claim
is not for ejectment or nuisance which could inherently involve a claim that
Dimensional caused the “loss of use” of property without actual physical
injury. Dimensional's alternative
argument also fails.
By the Court.—Order
affirmed.
[1] American Family asserted other reasons why the policy does not apply, including claims that Dimensional's activity regarding the title did not constitute an “occurrence” and that the term “slander” does not pertain to “slander of title.” Although the circuit court analyzed these other issues and ruled in American Family's favor, we conclude that the two issues addressed above are the narrowest grounds on which to dispose of this case.