Uneeda Rest, LLC v. Rick Hexum

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
July 28, 2020
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10 and
RULE 809.62.

Appeal No. 2019AP1357 Cir. Ct. No. 2018CV114

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT III

UNEEDA REST, LLC,

PLAINTIFF-APPELLANT,

V.

RICK HEXUM,

DEFENDANT-THIRD-PARTY PLAINTIFF,

V.

JAKE WESTERHOF,

THIRD-PARTY DEFENDANT-APPELLANT,

WISCONSIN MUTUAL INSURANCE COMPANY,

THIRD-PARTY DEFENDANT-RESPONDENT.
No. 2019AP1357

APPEAL from an order of the circuit court for Sawyer County:
JOHN M. YACKEL, Judge. Affirmed in part; reversed in part and cause remanded
for further proceedings.

Before Stark, P.J., Hruz and Seidl, JJ.

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).

¶1 PER CURIAM. Jake Westerhof and Uneeda Rest, LLC, appeal a
summary judgment granted in favor of Wisconsin Mutual Insurance Company. The
circuit court concluded insurance policies that Wisconsin Mutual had issued to
Westerhof did not provide coverage for Rick Hexum’s claims against Westerhof
and Uneeda Rest. We agree that Wisconsin Mutual’s policies do not provide
coverage for two of the three kinds of property damage asserted by Hexum.
However, the circuit court erred by concluding, as a matter of law, that the policies
do not cover Hexum’s claim for damage to his noneasement property. We therefore
affirm in part, reverse in part, and remand for further proceedings consistent with
this opinion.

BACKGROUND

¶2 Uneeda Rest is a limited liability company that owns property on
Whitefish Lake in Sawyer County. Westerhof and his siblings are members of
Uneeda Rest. Uneeda Rest’s property is adjacent to property owned by Hexum.
Uneeda Rest owns two easements allowing it to use an unpaved, shared driveway
on the east side of Hexum’s property to access its land. Although the easements lie
entirely within Hexum’s property, it is undisputed that, at all times relevant to this

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case, the shared driveway was actually located partially on Hexum’s property and
partially on Uneeda Rest’s property.

¶3 At some point, Hexum constructed a “French drain” in the shared
driveway, near the base of the concrete apron for his garage. Hexum testified a
French drain is “an inexpensive way to drain water.” He explained that it consists
of a hole filled with rock, which allows “large volumes of water to filter through
without puddling.”

¶4 In 2015, Westerhof began construction of a new home on
Uneeda Rest’s property, which replaced a pre-existing cottage. Westerhof retained
an architect to design the home and a general contractor to build it. The general
contractor hired a subcontractor—Butterfield, Inc.—to complete the excavation
work and install the foundation.

¶5 During the construction of Westerhof’s residence, contractors drove
over the shared driveway in order to access Westerhof’s property. It is undisputed
that the contractors’ vehicles damaged the driveway and destroyed the French drain.
Either Westerhof or one of his sisters ultimately paid to fix the damage to the
driveway, but they refused to pay for the repairs to the French drain.

¶6 Hexum also permitted Butterfield to drive its construction vehicles
over portions of Hexum’s property that were not located within the easement in
order to access the construction site. Hexum contends that in doing so, the vehicles
damaged his noneasement property.

¶7 The construction of Westerhof’s new home was completed in the
early summer of 2016. The new home has a larger footprint than the old cottage.
Westerhof testified he was aware before construction began that the larger footprint

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of the new home would result in there being less permeable soil on his property. He
also testified that he was aware the decrease in permeable soil would cause increased
water runoff. However, Westerhof testified he believed the water would stay on his
property because his house had gutters that emptied toward the lake and away from
Hexum’s property.

¶8 Hexum believes Westerhof’s new house was constructed at an
elevation that is approximately 1.5 feet higher than the elevation of the previous
cottage. He also believes that the change in elevation has caused additional runoff
onto his property. Westerhof, however, denies that the elevation has changed.
Travis Butterfield (of Butterfield, Inc.) testified that the architect’s plan for the new
house called for the first floor to be constructed at an elevation of “1308.5,” and that
the elevation of the land before the house was constructed was approximately
“1307” or “1308.” Butterfield also testified that when he dug the foundation, he
aimed for the elevation to be within two inches of the elevation specified on the
plans.

¶9 In the spring of 2016, Hexum noticed an accumulation of water at the
south end of the shared driveway, at the base of the concrete apron of his garage.
Hexum contends this water accumulation damaged the concrete slab outside his
garage, necessitating its replacement.

¶10 In 2018, Hexum constructed a drainage system that allegedly
obstructed Uneeda Rest’s easements. Uneeda Rest therefore filed the instant lawsuit
against Hexum, seeking an injunction requiring Hexum to remove the drainage
system. In response, Hexum filed a number of counterclaims against Uneeda Rest
and a third-party complaint against Westerhof. As relevant to this appeal, Hexum
alleged that the construction of Westerhof’s home had caused damage to Hexum’s

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property. He asserted claims against Uneeda Rest for private nuisance, civil
trespass, and negligence, among other things, and he asserted a civil trespass claim
against Westerhof.

¶11 Westerhof and Uneeda Rest tendered the defense of Hexum’s claims
to Wisconsin Mutual, Westerhof’s homeowner’s insurer.1 Wisconsin Mutual
agreed to defend Westerhof and Uneeda Rest pursuant to a reservation of rights. It
then moved to intervene in this lawsuit and to bifurcate and stay the merits of the
case pending a determination of whether its policies provided coverage for Hexum’s
claims. The circuit court granted Wisconsin Mutual’s motion.

¶12 Wisconsin Mutual subsequently moved for summary judgment and
for a declaratory ruling that its policies did not provide coverage for Hexum’s
claims. First, Wisconsin Mutual argued its policies did not provide an initial grant
of coverage because Hexum’s alleged property damage was not caused by an
“occurrence,” as the policies defined that term. In the alternative, Wisconsin Mutual
argued coverage for some of Hexum’s claims was barred by the policies’
“motorized vehicle” and “property you use” exclusions. Westerhof and
Uneeda Rest opposed Wisconsin Mutual’s motion, arguing that the policies
provided an initial grant of coverage and that neither of the cited exclusions applied.
Westerhof and Uneeda Rest also argued that a “collapse coverage endorsement”
appended to the 2015-16 policy provided coverage for one of Hexum’s claims.

¶13 The circuit court granted Wisconsin Mutual’s summary judgment
motion and issued an order declaring that its policies did not provide coverage for
Hexum’s claims. The court concluded the policies did not provide an initial grant

1
Wisconsin Mutual had issued homeowner’s insurance policies to Westerhof at all times
relevant to this case. Uneeda Rest was listed as an additional insured on each of those policies.

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of coverage because “the trucks moving down the [driveway], the building of the
property, the house higher and changing the water runoff, all of those were
purposeful acts, not an accident or occurrence as defined by the policy.” The court
did not consider whether either of the exclusions cited by Wisconsin Mutual were
applicable, nor did it address the collapse coverage endorsement. Westerhof and
Uneeda Rest now appeal.2

DISCUSSION

I. Standard of review

¶14 We independently review a grant of summary judgment, using the
same methodology as the circuit court. Hardy v. Hoefferle, 2007 WI App 264, ¶6,
306 Wis. 2d 513, 743 N.W.2d 843. Summary judgment is appropriate if there is no
genuine issue of material fact and the moving party is entitled to judgment as a
matter of law. WIS. STAT. § 802.08(2) (2017-18). “Whether to grant a declaratory
judgment is addressed to the circuit court’s discretion.” State Farm Fire & Cas.
Co. v. Acuity, 2005 WI App 77, ¶6, 280 Wis. 2d 624, 695 N.W.2d 883. However,
when the exercise of that discretion turns on the interpretation of an insurance

2
At certain points in their appellate briefs, Westerhof and Uneeda Rest appear to suggest
that the issue in this case is Wisconsin Mutual’s duty to defend, and we should therefore restrict
our analysis to the allegations within the four corners of Hexum’s counterclaims and third-party
complaint. As Wisconsin Mutual correctly observes, however, this is not a duty-to-defend case.
Wisconsin Mutual provided a defense for Westerhof and Uneeda Rest pursuant to a reservation of
rights, and it then successfully moved to bifurcate and stay proceedings on the merits of the
underlying action pending a determination of coverage. “[T]he purpose of the four-corners rule
has been served once the insurer has elected to provide a defense pending a final determination on
coverage.” Olson v. Farrar, 2012 WI 3, ¶34, 338 Wis. 2d 215, 809 N.W.2d 1. Under those
circumstances, “[t]he four-corners rule is not further implicated, and the court proceeds to a
determination of coverage,” which includes the consideration of evidence extrinsic to the
complaint. Id., ¶¶34-35.

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policy, which is a question of law, we independently review the court’s decision.
Id.

¶15 Our goal in interpreting an insurance policy is to give effect to the
parties’ intent. American Family Mut. Ins. Co. v. American Girl, Inc., 2004 WI
2, ¶23, 268 Wis. 2d 16, 673 N.W.2d 65. We construe a policy as it would be
understood by a reasonable person in the position of the insured. Id. If policy
language is unambiguous, we simply enforce it as written. Marnholtz v. Church
Mut. Ins. Co., 2012 WI App 53, ¶10, 341 Wis. 2d 478, 815 N.W.2d 708. When
determining whether an insurance policy provides coverage for a particular claim,
we first consider whether the policy’s insuring agreement makes an initial grant of
coverage. American Girl, 268 Wis. 2d 16, ¶24. If it is clear that the policy does
not provide an initial grant of coverage, our analysis ends there, without the need to
consider any of the policy’s exclusions. Id.

II. Initial grant of coverage

¶16 As relevant here, the Wisconsin Mutual policies provide an initial
grant of coverage for “all sums for which an ‘insured’ is liable by law because of …
‘property damage’ caused by an ‘occurrence’ to which this coverage applies.”3 On
appeal, the parties agree that Hexum has asserted claims alleging three kinds of
property damage: (1) damage to the French drain in the shared driveway;
(2) damage to the concrete slab outside Hexum’s garage, caused by the
accumulation of water on the slab; and (3) damage to Hexum’s noneasement

3
Although some of the Wisconsin Mutual policies contain slightly different language, it
is undisputed that each policy provides an initial grant of coverage for damages stemming from
property damage caused by an occurrence.

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property, caused by construction vehicles driving over that property. The critical
issue, for purposes of determining whether the policies provide an initial grant of
coverage for these claims, is whether any of the alleged property damage was caused
by an “occurrence.”4

¶17 The Wisconsin Mutual policies state that the term “occurrence”
means “an accident, including repeated exposures to similar conditions, that results
in ‘bodily injury’ or ‘property damage’ during the policy period.” The policies do
not define the term “accident.” However, previous cases have relied on dictionary
definitions in order to ascertain the common meaning of that term. See Everson v.
Lorenz, 2005 WI 51, ¶15, 280 Wis. 2d 1, 695 N.W.2d 298.

¶18 In American Girl, for instance, our supreme court noted that one
dictionary defined “accident” as “an event or condition occurring by chance or
arising from unknown or remote causes.” American Girl, 268 Wis. 2d 16, ¶37
(citation omitted). The court also cited Black’s Law Dictionary for the proposition
that the term “accident” in a liability insurance policy means “an event which takes
place without one’s foresight or expectation.” Id. (citation omitted). The definition
in Black’s further provided that “[a] result, though unexpected, is not an accident;
the means or cause must be accidental.” Id. (citation omitted). Applying these
definitions, the American Girl court concluded the relevant property damage in that
case—i.e., damage to a warehouse caused by soil settlement—was the result of an
occurrence. Id., ¶38. The court reasoned the soil settlement was caused by

4
It is undisputed that not all of Hexum’s claims against Westerhof and Uneeda Rest
alleged property damage, as the policies define that term. On appeal, Wisconsin Mutual asserts—
and Westerhof and Uneeda Rest do not dispute—that the Wisconsin Mutual policies do not provide
coverage for any claims that do not allege property damage. Accordingly, we do not further address
those claims.

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“inadequate site-preparation advice,” and “[n]either the cause nor the harm was
intended, anticipated, or expected.” Id.

¶19 The supreme court reached a different result in Schinner v. Gundrum,
2013 WI 71, 349 Wis. 2d 529, 833 N.W.2d 685. There, the insured held an underage
drinking party, during which one guest suffered serious injuries after being
physically assaulted by another guest. Id., ¶2. The injured guest later sued the
insured and his insurer. Id. The court held that these facts did not give rise to an
occurrence because the insured’s intentional acts—specifically, hosting a large
underage drinking party and providing alcohol to an individual known to become
belligerent when intoxicated—were a substantial factor in causing the plaintiff’s
injuries. Id., ¶81. It did not matter that the insured did not intend for the plaintiff
to be assaulted; what mattered was that the insured performed intentional acts that
were a substantial factor in causing that result. Id., ¶¶67-69. The Schinner court
emphasized that in determining whether the plaintiff’s bodily injury was caused by
an accident, the focus was on identifying “the injury-causing event.” Id., ¶66. The
policy’s initial grant of coverage was triggered only if the facts showed that the
injury-causing event was an accident. See id., ¶¶66-69, 81.

¶20 Westerhof and Uneeda Rest argue that, in this case, because Hexum’s
counterclaims and third-party complaint alleged negligence, all of Hexum’s claimed
property damage must necessarily have been caused by an occurrence. We reject
this argument because, for purposes of our analysis, it is the evidentiary facts
concerning the causes of the alleged damages that matter, not the theory of liability
alleged in Hexum’s pleadings. Merely inserting an allegation of negligence into a
complaint that alleges only damages caused by intentional acts does not create an
occurrence, for purposes of insurance coverage. See Talley v. Mustafa, 2018 WI
47, ¶¶20, 32, 381 Wis. 2d 393, 911 N.W.2d 55.

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¶21 Instead, we must analyze whether the evidentiary facts regarding each
of Hexum’s claimed items of property damage demonstrate that such damage was
caused by an occurrence. Applying that analysis, we conclude the Wisconsin
Mutual policies do not provide an initial grant of coverage for Hexum’s claims
asserting damage to his French drain or his concrete slab. In both of those instances,
although the property damage itself may have been unexpected or unintended, the
injury-causing event was intentional and was therefore not an accident—i.e., an
occurrence.

¶22 As noted above, Hexum first claims that during the construction of
Westerhof’s new home, construction vehicles destroyed his French drain when
driving over the shared driveway. During his deposition, Westerhof testified that
he knew the contractors would have to drive heavy equipment over the shared
driveway in order to reach the construction site. At the time of construction,
Westerhof was unaware of the presence of the French drain immediately underneath
the driveway. Nonetheless, Westerhof also testified that it “wasn’t surprising to
[him]” that the construction vehicles caused damage to the driveway, although it
turned out to be “a bit bigger problem than [he] would have expected.”

¶23 On these facts, we cannot conclude that the destruction of the French
drain was caused by an occurrence. The contractors intentionally drove their
vehicles over the shared driveway to access the construction site. Westerhof knew
that they planned to do so, and he expected that their use of the shared driveway
would damage the driveway to some extent. The fact that the full nature and extent
of the damages to the driveway—including the destruction of the French drain lying
immediately underneath the driveway—was unexpected does not mean that the
damages resulted from an occurrence. Again, the focus of our inquiry is on whether
the “injury-causing event” was accidental, not the resulting damages. See Schinner,

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349 Wis. 2d 529, ¶¶66-69, 81; see also American Girl, 268 Wis. 2d 16, ¶37. Here,
the operation of the heavy equipment on the driveway was intentional, not
accidental, and it directly caused the destruction of the French drain.

¶24 Moreover, the destruction of the French drain in this case is
distinguishable from the damage to the warehouse in American Girl. In American
Girl, the cause of the damage was faulty site-preparation advice provided by a soil
engineering subcontractor. That cause was accidental because, although the
subcontractor intended to provide site-preparation advice, it did not intend to do so
negligently. In this case, there has been no allegation or evidence presented that the
contractors were negligent in their operation of heavy equipment on the shared
driveway. Instead, as noted above, damage to the shared driveway was an expected
consequence of the contractors’ use of the driveway to access the construction site.
Under these circumstances, the destruction of the French drain located in the shared
driveway was not caused by an occurrence.5

¶25 We next turn to Hexum’s claim for damage to the concrete slab
outside his garage, which he contends was caused by the accumulation of water on
the slab. Hexum claims the water accumulation was caused, in part, by the
destruction of the French drain. However, we have already determined that the
destruction of the French drain was not caused by an occurrence. Accordingly, any

5
In the alternative, Wisconsin Mutual argues that the “property you use” exclusion applies
to Hexum’s claim for damage to the French drain. Because we conclude Wisconsin Mutual’s
policies do not provide an initial grant of coverage for Hexum’s claim for damage to the French
drain, we need not address this alternative argument.

Wisconsin Mutual also argued in the circuit court that the “motorized vehicle” exclusion
applied to bar coverage for any claim alleging damage caused by construction equipment. The
court did not address the “motorized vehicle” exclusion, and Wisconsin Mutual does not raise any
argument regarding that exclusion on appeal. We therefore do not address it further.

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No. 2019AP1357

damage to the concrete slab due to water accumulation that resulted from the
destruction of the French drain was similarly not caused by an occurrence.

¶26 Hexum also claims that the larger footprint of Westerhof’s new home
and its construction at a higher elevation than the pre-existing cottage resulted in
water accumulation on the concrete slab. For purposes of these claims, the
injury-causing event was the construction of Westerhof’s new home. That
construction, however, was not unexpected or unintended. As such, it does not
constitute an occurrence.

¶27 Westerhof and Uneeda Rest cite American Girl, Acuity v. Society
Insurance, 2012 WI App 13, 339 Wis. 2d 217, 810 N.W.2d 812, and
Glendenning’s Limestone & Ready-Mix Co. v. Reimer, 2006 WI App 161, 295
Wis. 2d 556, 721 N.W.2d 704, in support of their argument that the damage to
Hexum’s concrete slab due to the construction of Westerhof’s new home was caused
by an occurrence. Those cases are distinguishable, however, because they each
involved allegations that faulty workmanship or negligence led to the relevant
property damage. See American Girl, 268 Wis. 2d 16, ¶38; Acuity, 339 Wis. 2d
217, ¶17; Glendenning’s, 295 Wis. 2d 556, ¶6.

¶28 Conversely, we agree with Wisconsin Mutual that, in this case, there
is no evidence that “something went wrong in the construction of the house that
resulted in unexpected water issues.” As noted above, Westerhof testified he was
aware before construction began that the larger footprint of the new home would
result in there being less permeable soil on his property, which would cause
increased water runoff. In addition, Butterfield testified that the architect’s plans
called for the new house to be constructed at the same elevation as the elevation of
the preconstruction land, and he also testified that he dug the foundation to be within

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two inches of that elevation. On these facts, we agree with Wisconsin Mutual that
the accumulation of water on Hexum’s concrete slab was not the result of defective
work but, rather, was caused by the intentional and volitional act of building
Westerhof’s new home according to the architect’s plans and specifications.

¶29 Westerhof and Uneeda Rest also argue that Kalchthaler v. Keller
Construction Co., 224 Wis. 2d 387, 591 N.W.2d 169 (Ct. App. 1999), supports their
position that the damage to the concrete slab was caused by an occurrence. In
Kalchthaler, however, the court principally analyzed a new exception to the
business risk exclusion in a standard form commercial general liability (CGL)
insurance policy in a case involving leaking windows installed by a subcontractor.
Id. at 390-91, 397. Although the court initially discussed the meaning of “accident”
and “occurrence” in the CGL policy, it observed the parties had already stipulated
that fifty percent of the damages were caused by the insured general contractor’s
negligence. See id. at 397. The court then stated, without further analysis, “[T]here
is no question that an event occurred: the windows leaked. This is an accident. So
we have property damage caused by an occurrence and the policy applies.” Id. The
Kalchthaler court did not consider or analyze whether the injury-causing event was
an accident, as required by subsequent case law. See Schinner, 349 Wis. 2d 529,
¶¶66-69, 81.

¶30 Westerhof and Uneeda Rest also rely on Wosinski v. Advance Cast
Stone Co., 2017 WI App 51, 377 Wis. 2d 596, 901 N.W.2d 797. In that case, a jury
concluded Advance Cast Stone’s negligent installation of a concrete panel caused
the panel to fail, resulting in several injuries and a death. Id., ¶¶7, 10-12, 26. As
explained above, however, there is no evidence in this case that something went
wrong during the construction of Westerhof’s new residence that caused an
increased accumulation of water on Hexum’s property. Rather, the evidence shows

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that the house was constructed according to the architect’s specifications. Again,
the injury-causing event—i.e., the construction of the house—was intentional. In
fact, Westerhof knew that the construction could cause increased water
accumulation and runoff. We therefore reject Westerhof and Uneeda Rest’s
argument that any damage resulting from the accumulation of water on Hexum’s
concrete slab was caused by an occurrence.

¶31 Hexum also claims that he suffered property damage when
construction vehicles drove over his noneasement property. Wisconsin Mutual
argues its policies do not provide an initial grant of coverage for that claim because
“the use of vehicles on Hexum’s property was volitional, intentional, and not an
‘accident.’” Westerhof and Uneeda Rest correctly observe, however, that “when an
insured is seeking coverage, the determination of whether an injury is accidental
under a liability insurance policy should be viewed from the standpoint of the
insured.” Schinner, 349 Wis. 2d 529, ¶52. Westerhof and Uneeda Rest then assert
that, from their standpoint, any damage to Hexum’s noneasement property was
unexpected.

¶32 In support of this argument, Westerhof and Uneeda Rest note that
Butterfield testified he “probably” could have completed all of his work without
driving over Hexum’s noneasement property. They also observe that there is no
evidence Westerhof was aware that Butterfield had obtained Hexum’s permission
to drive vehicles over Hexum’s noneasement property and, to the contrary,
Butterfield expressly testified that he did not tell Westerhof about that agreement.
In addition, Westerhof testified he was not aware that construction vehicles would
need to travel over Hexum’s noneasement property in order to access the
construction site. Based on these facts, Westerhof and Uneeda Rest argue they
could not have anticipated that Butterfield or any other contractor would operate

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construction vehicles on Hexum’s noneasement property, thereby causing damage
to it.

¶33 We agree with Westerhof and Uneeda Rest that the evidence cited
above, at the very least, raises a genuine issue of material fact as to whether the
damage to Hexum’s noneasement property was unexpected from Westerhof and
Uneeda Rest’s perspective. In response to Westerhof and Uneeda Rest’s argument,
Wisconsin Mutual notes that even if Westerhof and Uneeda Rest were unaware that
Butterfield intended to use Hexum’s noneasement property to access the
construction site, it is undisputed that Butterfield was aware of his own plan to do
so. Wisconsin Mutual then asserts that Butterfield was Westerhof’s agent. It further
argues that, by virtue of that agency relationship, Butterfield’s knowledge should be
imputed to Westerhof for purposes of determining whether its policies provide
coverage for Hexum’s claim that he suffered property damage when construction
vehicles drove over his noneasement property.

¶34 As Westerhof and Uneeda Rest correctly note in their reply brief,
Wisconsin Mutual’s agency argument is undeveloped. Wisconsin Mutual simply
asserts that Butterfield was Westerhof’s agent, without discussing the legal standard
for determining whether an agency relationship existed or explaining how the facts
of this case fulfill that standard. Moreover, as Westerhof and Uneeda Rest observe,
Wisconsin Mutual did not raise its agency argument in the circuit court. Generally,
a respondent may raise any argument on appeal that would support the circuit
court’s ruling, even if that argument was not raised in the circuit court. See State v.
Kiekhefer, 212 Wis. 2d 460, 475, 569 N.W.2d 316 (Ct. App. 1997). Here, however,
Wisconsin Mutual’s failure to raise its agency argument below means that it did not
develop a factual record upon which we could determine, as a matter of first

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impression, whether Butterfield was Westerhof’s agent for the purposes of
analyzing the available coverage under Wisconsin Mutual’s policies.

¶35 For these reasons, we decline to hold, based on Wisconsin Mutual’s
agency argument, that Wisconsin Mutual’s policies do not provide coverage for
Hexum’s claim for damage to his noneasement property. Instead, we conclude
Wisconsin Mutual was not entitled to summary judgment regarding coverage for
that claim because Westerhof and Uneeda Rest have demonstrated, at the very least,
that there is a genuine issue of material fact as to whether the damage to the
noneasement property was unexpected or unintended from their perspective.
Accordingly, although we affirm the circuit court’s determination that
Wisconsin Mutual’s policies do not provide an initial grant of coverage for Hexum’s
claims for damage to the French drain and concrete slab, we reverse the court’s grant
of summary judgment regarding coverage for Hexum’s claim for damage to his
noneasement property. We remand for further proceedings consistent with this
opinion.

III. Collapse coverage endorsement

¶36 In the alternative, Westerhof and Uneeda Rest argue that the collapse
coverage endorsement appended to Westerhof’s 2015-16 policy provides coverage
for Hexum’s claim for damage due to water accumulation caused by the collapse of
the French drain. The collapse coverage endorsement provides, in relevant part:

We extend your policy to cover the dwelling and other
structures against loss caused directly or indirectly by
earthquake, landslide or other earth movement. Also
covered is damage caused by water below the surface of the
ground which exerts pressure on, or flows, seeps or leaks
through: (l) sidewalks, (2) driveways, (3) foundations,
(4) walls (basement or otherwise), (5) doors, (6) windows or
(7) any other openings in (l) through (4) above.

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This endorsement applies to your property during
construction until occupied or until expiration of your
policy, whichever occurs first, but not to exceed six months
from the date of this endorsement or policy.

¶37 The collapse coverage endorsement does not provide coverage for any
of Hexum’s claims against Westerhof and Uneeda Rest because, on its face, the
endorsement provides only first-party property damage coverage, not third-party
liability coverage. The first sentence of the endorsement makes it clear that the
endorsement covers damage to “the dwelling and other structures.” The
endorsement also expressly states that it “applies to your [i.e., Westerhof and
Uneeda Rest’s] property during construction.” (Emphasis added.) Furthermore,
there is no language in the endorsement stating that Wisconsin Mutual will pay
damages that Westerhof and Uneeda Rest are legally liable to pay to a third party.
After reading the collapse coverage endorsement, no reasonable insured could
conclude the endorsement would provide coverage for third-party liability claims.
We therefore reject Westerhof and Uneeda Rest’s argument that the endorsement
provides coverage for any of Hexum’s claims in this case.

By the Court.—Order affirmed in part; reversed in part and cause
remanded for further proceedings.

This opinion will not be published. See WIS. STAT. RULE
809.23(1)(b)5. (2017-18).

17