Fire Insurance Exchange v. Frank Gibson

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.
May 18, 2021
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. 2020AP810 Cir. Ct. No. 2018CV241

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT III

FIRE INSURANCE EXCHANGE,

PLAINTIFF-RESPONDENT,

V.

FRANK GIBSON,

DEFENDANT-THIRD-PARTY
PLAINTIFF-APPELLANT,

SHELLY RUBENIC AND ESTATE OF VERNON RUBENIC,

DEFENDANTS,

V.

AETNA HEALTH INSURANCE COMPANY,

THIRD-PARTY DEFENDANT.

APPEAL from a judgment of the circuit court for Door County:
D. T. EHLERS, Judge. Affirmed.
No. 2020AP810

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. Frank Gibson appeals from a judgment declaring
that Fire Insurance Exchange’s insurance policies did not provide coverage for
Gibson’s injuries related to the use of a watercraft owned by an insured. We
affirm.

BACKGROUND

¶2 The relevant facts are undisputed. Gibson was a passenger in a
motorboat operated by Vernon Rubenic in the waters of Green Bay. They were
boating to the Rubenics’ property on Washington Island when the boat crashed
into the shore north of Ellison Bay, severely injuring Gibson and killing Vernon.
The boat was titled in the name of Rubenic’s wife, Shelly Rubenic.

¶3 The Rubenics had two insurance policies issued by Fire Insurance.
The first policy was a “Smart Home” policy on the Rubenics’ primary residence in
Illinois (the Illinois Policy). Gibson conceded in the circuit court that the Illinois
Policy does not obligate Fire Insurance to defend or indemnify the Rubenics for
any of Gibson’s claims in this case.

¶4 The Rubenics’ second policy was a Landlords Protector policy for
the Rubenics’ Washington Island property (the Wisconsin Policy). The “insured
location” is defined therein to mean the premises’ address on Washington Island.
The Wisconsin Policy generally contained liability coverage for bodily injuries.
For liability purposes, the insuring agreement of the policy provided:

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No. 2020AP810

We shall pay all damages from an occurrence which an
insured is legally liable to pay because of bodily injury …
arising out of the ownership, maintenance, or use of the
insured location covered by this policy.

¶5 The Wisconsin Policy also contained the following exclusion:

We do not cover bodily injury, personal injury or
property damage which:

….

6. results from the ownership maintenance, use, loading or
unloading of:

….

c. jet skis …

d. any other watercraft owned or rented to an insured.

7. results from the entrustment of any aircraft, motor
vehicles, jet skis, or jet sleds to any person. Entrustment
means the permission you give to any person other than
you to use any personal aircraft, motor vehicles, jet skis or
jet sleds owned or controlled by you.

8. results from the entrustment of watercraft described in
7d above.

(Emphasis added and omitted.)

¶6 Fire Insurance commenced a declaratory judgment action seeking a
determination of its rights and obligations under the insurance policies for the
bodily injury claims resulting from the boating accident, pursuant to WIS. STAT.
§ 806.04 (2019-20). Gibson filed an answer together with counterclaims, which
included a tort action against Vernon’s estate. The tort action was bifurcated and
stayed during the coverage dispute. Fire Insurance filed a motion for summary
judgment, and the circuit court subsequently held that Fire Insurance had no duty
to defend or indemnify Shelly, or Vernon’s estate, for Gibson’s claims. The court

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held that Gibson’s claims all arose out of use of a watercraft owned by an insured
and “[s]uch coverage is unequivocally excluded under the Rubenics’ Landlords
policy with the Plaintiff.” Gibson now appeals.

DISCUSSION

¶7 Summary judgment is often an appropriate method to determine
insurance policy coverage. Home Ins. Co. v. Phillips, 175 Wis. 2d 104, 109, 499
N.W.2d 193 (Ct. App. 1993). Summary judgment may be granted when there are
no material facts in dispute and the moving party is entitled to judgment as a
matter of law. Id. Our review of such a grant is independent, without deference to
the circuit court. Id. We will not rewrite an insurance policy if the language is
unambiguous, and we will give the policy its plain and ordinary meaning to avoid
imposing contractual obligations the parties did not undertake. Frost ex rel.
Anderson v. Whitbeck, 2002 WI 129, ¶17, 257 Wis. 2d 80, 654 N.W.2d 225.

¶8 The Wisconsin Policy generally contained liability coverage for
injuries arising out of the ownership, maintenance or use of the Rubenics’
Washington Island property. The policy specifically excluded, however, personal
injuries resulting from the use of watercraft owned by an insured. As the circuit
court correctly recognized, “That exclusion could not be any more clear and
unambiguous.” Shelly and Vernon Rubenic were both “an insured” under the
Wisconsin Policy. The boat was titled in Shelly’s name, and it was operated by
Vernon at the time of the accident. Coverage is unequivocally excluded under the
Wisconsin Policy.

¶9 Gibson argues that although the Illinois Policy does not apply to his
claims, the use of “any” in its analogous watercraft exclusion is instructive when

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No. 2020AP810

analyzing the Wisconsin Policy because “it provides the basis for the ‘any’ versus
‘an’ distinction in the exclusions of both policies.”1

¶10 The exclusion in the Illinois Policy states, in part:

We do not cover bodily injury, property damage or
personal injury which arises from … the ownership …
[or] … use … by any insured of any:

….

c. watercraft ….

¶11 Gibson contends the meaning of the Wisconsin Policy exclusion is
ambiguous because it relates to any watercraft owned by “an” insured—as
opposed to “any” insured, as stated in the Illinois Policy exclusion. Gibson
contends “there is a difference between ‘an’ and ‘any’” in Wisconsin case law.
Gibson acknowledges that Vernon was an insured under the Wisconsin Policy, but
he emphasizes that Vernon did not own the watercraft. He claims the Wisconsin
Policy exclusion states that it applies only to a watercraft “owned or rented to an
insured,” and therefore the exclusion does not apply to an insured who does not
own a watercraft. Gibson thus argues “[t]he policy exclusion clearly does not
apply to an insured who does not own the boat.”

¶12 In this regard, Gibson relies largely upon our decision in Taryn E.F.
v. Joshua M.C., 178 Wis. 2d 719, 505 N.W.2d 418 (Ct. App. 1993). In that case,
the parents of a child who had been sexually molested by her twelve-year-old
babysitter sought a declaration that the babysitter’s parents were covered by their

1
At the outset, Gibson concedes that the circuit court “correctly determined that
Wisconsin law applies to this suit because the location of the insured property is on Washington
Island, Door County, Wisconsin, and this is the most significant relationship.”

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No. 2020AP810

homeowner’s policy for potential liability stemming from the sexual molestation.
Id. at 721-22. There was no dispute that the intentional act and sexual molestation
policy exclusions precluded coverage for the babysitter himself. Id. at 723. The
circuit court granted summary judgment for the insureds, and we affirmed, holding
that the exclusionary language for intentional acts of “any insured” unambiguously
denied coverage for all liability incurred by each and any insured as a result of
certain conduct by any of the persons insured by the policy. Id. at 724.

¶13 The insurance policy in Taryn E.F. contained an intentional acts
exclusion for “any outrageous conduct on the part of any ‘insured’ consisting of
any intentional, wanton, malicious acts.” Id. at 723. The policy also excluded
coverage for “sexual molestation.” Id. at 723-24. The victim’s parents, however,
argued that the babysitter’s parents were covered by virtue of a severability clause
contained in the following policy provision: “Each person listed above is a
separate insured under this policy, but this does not increase our limit of liability
under this policy.” Id. (emphasis omitted). The argument for coverage hinged on
their conclusion that the policy became ambiguous when the severability clause
was read in conjunction with the exclusionary clause, such that an innocent parent
who did not commit or encourage the sexual molestation may be entitled to
coverage. Id. at 724.

¶14 Taryn E.F. held that even when read in context with the severability
clause, the intentional acts exclusion “unambiguously denies coverage for all
liability incurred by each and any insured as a result of certain conduct by any of
the persons insured by the policy.” Id. This result was so because of the policy’s
use of the word “any” before the word “insured,” as opposed to “an” or “the”
insured. Id. at 724-25. Therefore, Taryn E.F. involved the distinction between

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“an” and “any” as a function of intentional acts exclusions, as a result of conduct
that was excluded.

¶15 Here, the policy exclusion was not conduct based, but ownership
based. The Wisconsin Policy excluded coverage if the boat was owned by “an”
insured, regardless of whose conduct was at issue in causing the injuries.
Gibson’s claims in the present case resulted from the use of a boat owned by an
insured—i.e., Shelly. The exclusion is not tethered to who was operating the
watercraft, or to the conduct resulting in the injury. Exclusions based upon
conduct, which raise separation-of-insured concerns, are not at issue here.
Because the loss occurred as a result of a watercraft owned by “an insured” there
is no coverage—including for negligent supervision claims—as Gibson’s claims
all result from the use of watercraft owned by an insured.

¶16 Gibson’s attempt to use the contradistinction between the “any
insured” language in the Illinois Policy exclusion and the “an insured” language in
the Wisconsin Policy exclusion fails as a matter of grammar, logic and common
sense. In the Wisconsin Policy, the use of “an” as an indefinite article is
applicable to more than one individual object. “An” insured is used in the same
grammatical sense as “any” insured. Quite simply, if “an insured” owned the
watercraft, there is no coverage.

¶17 Occasionally, a clear and unambiguous provision may be found
ambiguous in the context of the entire policy—such as the organization, labeling,
explanation, inconsistency, omission, or text of the other provisions in the policy.
See, e.g., Dowhower ex rel. Rosenberg v. West Bend Mut. Ins. Co., 2000 WI 73,
¶18, 236 Wis. 2d 113, 613 N.W.2d 557. But Gibson provides no citation to case
law supporting the proposition that we may find contextual liability in one

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No. 2020AP810

insurance policy by reference to a wholly different policy. In any event, the
Wisconsin Policy exclusion is clearly applicable here, and Gibson’s attempt to
manufacture ambiguity is unavailing.

By the Court.—Judgment affirmed.

This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5. (2019-20).

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