2013 WI 71

SUPREME COURT OF WISCONSIN

CASE NO.: 2011AP564

COMPLETE TITLE:

Marshall Schinner,

Plaintiff-Appellant,

v.

Michael Gundrum,

Defendant,

West Bend Insurance Company,

Defendant-Respondent-Petitioner.

REVIEW OF A DECISION OF THE COURT OF APPEALS

Reported at 340 Wis. 2d 195, 811 N.W.2d 431

(Ct. App. 2012 – Published)

PDC No: 2012 WI App 31

OPINION FILED: July 12, 2013

SUBMITTED ON BRIEFS:

ORAL ARGUMENT: October 23, 2012

SOURCE OF APPEAL:

COURT: Circuit

COUNTY: Washington

JUDGE: James G. Pouros

JUSTICES:

CONCURRED: CROOKS, J., concurs. (Opinion filed.)

DISSENTED: BRADLEY, J., ABRAHAMSON, C.J., dissents.

(Opinion filed.) CROOKS, J. joins Part II of the

dissent.

NOT PARTICIPATING:

ATTORNEYS:

For the defendant-respondent-petitioner, there were briefs

filed by Jeffrey Leavell and Christopher John Koppes, and

Jeffrey Leavell, S.C., Racine, and oral argument by Jeffrey

Leavell.

For the plaintiff-appellant, there were briefs by Keith R.

Stachowiak and Murphy & Prachthauser, S.C., Milwaukee, and

Daniel P. Patrykus and Keberle & Patrykus, LLP, West Bend, and

oral argument by Keith R. Stachowiak.
2

An amicus curiae brief was filed by James A. Friedman and

Linda S. Schmidt, and Godfrey & Kahn, S.C., Madison, on behalf

of the Wisconsin Insurance Alliance, and oral argument by Linda

S. Schmidt.

An amicus curiae brief was filed by Mark L. Thomsen and

Cannon & Dunphy, S.C., Brookfield, on behalf of the Wisconsin

Association for Justice.
2013 WI 71

NOTICE

This opinion is subject to further

editing and modification. The final

version will appear in the bound

volume of the official reports.

No. 2011AP564

(L.C. No. 2009CV870)

STATE OF WISCONSIN : IN SUPREME COURT

Marshall Schinner,

Plaintiff-Appellant,

v.

Michael Gundrum,

Defendant,

West Bend Insurance Company,

Defendant-Respondent-Petitioner.

FILED

JUL 12, 2013

Diane M. Fremgen

Clerk of Supreme Court

REVIEW of a decision of the Court of Appeals. Reversed.

¶1 DAVID T. PROSSER, J. This is a review of a published

decision of the court of appeals

1 reversing a grant of summary

judgment by the Washington County Circuit Court

2 to West Bend

1 Schinner v. Gundrum, 2012 WI App 31, 340 Wis. 2d 195, 811

N.W.2d 431.

2 Circuit Judge James G. Pouros, presiding.
No. 2011AP564

2

Mutual Insurance Company (West Bend)

3 against one of its

insureds.

¶2 The insured, Michael Gundrum (Gundrum), hosted an

underage drinking party. One of Gundrum's many guests, Matthew

Cecil (Cecil), assaulted and seriously injured another guest.

Gundrum knew that Cecil had a tendency to become belligerent

when he was intoxicated but he permitted Cecil to drink anyway.

The victim, Marshall Schinner (Schinner), ultimately sued

Gundrum and West Bend to secure damages for Schinner's injuries.

¶3 West Bend disputed coverage. The insurer argued that

it had no duty to defend and indemnify Gundrum because his

actions as a party host were intentional; thus, there was no

"accident" and no "occurrence" under the Gundrum family's

homeowner's insurance policy. West Bend also contended that

even if there were an occurrence under the policy, there was no

coverage because of an exclusion in the policy for bodily injury

arising out of a non-insured location. The party had been held

at a shed at Gundrum Trucking, a family-owned business that was

not an insured location under the homeowner's policy.

¶4 The circuit court granted summary judgment to West

Bend because it determined that there is no accident when

someone intentionally procures alcohol for an underage drinking

party, and even if Gundrum's actions were an accident, the

victim suffered bodily injury at an uninsured location.

3 The parties, the circuit court, and the court of appeals

have referred to the insurance company as "West Bend Insurance

Company" and "West Bend Mutual Insurance Company."
No. 2011AP564

3

¶5 The court of appeals reversed on both issues. The

court of appeals concluded that there was an occurrence because

Schinner's assault was an accident when viewed from the

standpoint of either the injured person (Schinner) or the

insured (Gundrum). The court of appeals also concluded that the

non-insured location exclusion did not apply because Schinner's

injury did not arise from some "condition" of that premises.

¶6 The primary question before us is whether Schinner's

injury resulted from an occurrence as defined by the West Bend

homeowner's insurance policy, thus triggering coverage for

Gundrum. If the answer is yes, we are required to determine

whether that coverage was excluded because the injury "arose out

of" an uninsured location that was not "used in connection with"

an insured premises under the homeowner's policy.

¶7 After carefully considering the facts in the record,

the allegations in Schinner's complaint, the pertinent language

in the homeowner's insurance policy, and our previous

interpretations of "occurrence" in insurance policies, we

reverse the court of appeals and reach the following

conclusions.

¶8 First, Gundrum's actions in setting up an isolated

shed for a drinking party, procuring alcohol and expecting

others to bring alcohol, inviting many underage guests to the

party, and encouraging the underage guests to drink——especially

an underage guest known to become belligerent when intoxicated——

were intentional actions that violated the law. Gundrum's many

intentional wrongful acts were a substantial factor in causing
No. 2011AP564

4

Schinner's bodily injury. Viewed from the standpoint of a

reasonable insured, Gundrum's intentional actions created a

direct risk of harm resulting in bodily injury, notwithstanding

his lack of intent that a specific injury occur. Thus,

Schinner's bodily injury was not caused by an "occurrence"

within the meaning of the policy, and West Bend is not obligated

to provide insurance coverage for Gundrum.

¶9 Second, even assuming there was an occurrence under

the West Bend homeowner's policy, coverage is excluded because

the injury arose out of the use of an isolated shed for an

underage drinking party on uninsured premises. The fact that

the Gundrums kept some personal property insured under the

policy at the shed did not make the shed a premises used in

connection with the insured's residence, as those terms are

defined in the policy. Thus, the business shed was not an

insured location triggering coverage under the homeowner's

policy.

I. FACTUAL BACKGROUND

¶10 The facts of this case are derived from Schinner's

Second Amended Complaint against Gundrum and West Bend, witness

statements, police reports, Gundrum's deposition, and the West

Bend insurance policies of record.

¶11 In December 2008 Gundrum, then 21, resided with his

parents, Scott and Teri Gundrum, at their residence on State

Highway 144, near Slinger, Wisconsin. The Gundrums had
No. 2011AP564

5

purchased a Home and Highway

4 policy (homeowner's policy or the

policy) from West Bend covering their residential premises. The

homeowner's policy contained personal liability coverage for

persons insured under the policy, including Gundrum.

¶12 The personal liability coverage applied to an

"occurrence":

A. Coverage E – Personal Liability

If a claim is made or a suit is brought against

an "insured" for damages because of "bodily injury" or

"property damage" caused by an "occurrence" to which

this coverage applies, we will:

1. Pay up to our limit of liability for the

damages for which an "insured" is legally

liable. . . .

2. Provide a defense at our expense by counsel

of our choice . . . .

¶13 The homeowner's policy defined "occurrence" as "an

accident, including continuous or repeated exposure to

substantially the same general harmful conditions."

¶14 The policy contained an exclusion for bodily injury or

property damage liability arising out of a premises that is not

an "insured location."

5

4 The highway, or automobile, portion of the policy is not

relevant to this case.

5 The homeowner's policy stated, "Coverages E and F do not

apply to the following: . . . 'Bodily injury' or 'property

damage' arising out of a premises: a. Owned by an 'insured'; b.

Rented to an 'insured'; or c. Rented to others by an 'insured';

that is not an 'insured location'."
No. 2011AP564

6

¶15 The homeowner's policy also defined an insured

location in part as, "[t]he residence premises," the "part of

other premises, other structures and grounds used by you as a

residence," and any premises used by the insured "in connection

with" the premises described above.

¶16 West Bend had also issued a commercial general

liability (CGL) policy to Howard, Jan, Scott, and Guy Gundrum,

doing business as HJSG Enterprises, located on Arthur Road near

Slinger. The facilities at this address were commonly referred

to as Gundrum Trucking,

6 where the events in question took place.

Because of its liquor exclusion clause, HJSG's CGL policy is not

at issue in this case.

¶17 On December 14, 2008, Gundrum hosted a party in a shed

at Gundrum Trucking. The party lasted into the early morning

The homeowner's policy also contained an exclusion for

intentional injury, stating that coverage did not apply to

"'[b]odily injury' or 'property damage' which is expected or

intended by an 'insured'."

6 West Bend issued the CGL policy to HJSG Enterprises, but

the CGL policy does not refer to Gundrum Trucking.

The record includes a printed copy of the Wisconsin

Department of Financial Institutions (DFI) corporate record for

Gundrum Trucking, Inc., with its principal office on Arthur

Road, Slinger, presumably as proof of how HJSG Enterprises

publicly conducted its business, or that HJSG is a parent entity

of Gundrum Trucking, Inc. However, the DFI record for Gundrum

Trucking, Inc. does not refer to HJSG Enterprises. Moreover, a

search of DFI corporate records reveals a Scott Gundrum

Trucking, LLC, also listing its principal office on Arthur Road

in Slinger. For the sake of simplicity, we will refer to the

entity conducting business on Arthur Road near Slinger as

Gundrum Trucking.
No. 2011AP564

7

hours of December 15. It was not the first party hosted by

Gundrum at the shed. Gundrum testified in a deposition that

there was at least one prior party, but other witnesses recalled

multiple prior parties.

7

¶18 As with previous parties, Gundrum texted friends about

the party and expected his friends to text or tell others,

ensuring a well-attended party. Gundrum later estimated that

more than 40 partygoers came to the shed on the night of

December 14. He also estimated that 40 to 50 percent of the

people were under the age of 21.

¶19 The site of the party was a pole barn approximately

40-by-60 feet in size. It had no windows. This shed was used

by the trucking company, but it also stored some personal

property belonging to Gundrum's extended family. The property

included boats, a camper, and two snowmobile trailers.

Gundrum's immediate family stored snowmobiles in the shed.

These snowmobiles were insured under the Gundrums' homeowner's

policy. Gundrum referred to the shed as the "toy shed" because

of "all the junk that's piled in there."

¶20 A portion of the shed was set up for parties. It was

furnished with couches, chairs, a table, a Ping-Pong table, a CD

player, and a refrigerator. The law enforcement personnel who

7 At his deposition, Gundrum testified that his father was

aware of small gatherings of friends at the shed, but that he

told Gundrum to "[u]se [his] judgment" and "to not have big

parties."
No. 2011AP564

8

responded to Schinner's injury described the atmosphere in the

shed as consistent with an "underage alcohol party."

¶21 Alcohol was prevalent at the party, despite the fact

that up to half of the guests were underage. Some guests

brought their own alcohol; underage guests expected to obtain

alcohol from people who were of legal drinking age. Gundrum

purchased two cases of Busch Light beer for a friend and

himself. He kept the beer in the refrigerator but admitted that

it was available for people who did not bring their own alcohol

to the party. Law enforcement officers reported a "large amount

of alcoholic beverages" in the shed, and Gundrum was aware that

guests were becoming intoxicated from the alcohol at the party.

In fact, Gundrum himself stopped drinking when he realized that

so many guests showed up and became intoxicated. He claimed

that he wanted to monitor the situation. Nevertheless, alcohol

consumption at the party continued. One of the party games,

"beer pong," utilized the Ping-Pong table in the shed and

encouraged more alcohol consumption.

8

8 According to Schinner's testimony at the preliminary

hearing in Cecil's criminal assault case, beer pong is a game in

which cups are set up on opposite ends of a Ping-Pong table.

Teams of participants attempt to toss or bounce Ping-Pong balls

into one of the other team's cups. If successful, the other

team must drink the beer in that cup.

While there are many variations of the rules of beer pong,

"the common object is the copious consumption of alcoholic

beverages." Venito v. Salverson, No. 104110/08, 2011 WL

2464760, at *2 (N.Y. Sup. June 21, 2011). See also Kirchoff v.

Abbey, No. WMN-10-1532, 2011 WL 4711898 at *1 n.2 (D. Md. Oct.

5, 2011) ("Beer pong is a game that encourages players to drink

heavily.").
No. 2011AP564

9

¶22 Cecil was one of the intoxicated underage guests who

participated in beer pong during the party. He was known by

Gundrum and others to become belligerent when intoxicated.

Gundrum testified that he knew from previous occasions that

Cecil would become confrontational, had a history of picking on

weaker kids, and used inflammatory language when intoxicated.

¶23 Eventually, an intoxicated Cecil started to make fun

of Schinner at the party.

9 At least twice Schinner asked Gundrum

to intervene. But Gundrum's lone entreaty to Cecil to cease his

abusive behavior was only temporarily successful. Cecil

returned to making fun of Schinner.

¶24 At approximately 2:30 a.m., Schinner and some of his

friends left the shed and got into a car to leave the party.

Cecil also left the shed to taunt Schinner. When Schinner got

out of the car, Cecil punched him twice in the face and then

kicked him in the head after Schinner had fallen to the ground.

Schinner was seriously injured in the assault.

¶25 About a half hour later, Washington County Sheriff

deputies and medical personnel were dispatched to Gundrum

Trucking in response to an anonymous phone call about a physical

altercation and an injured male. Deputies had trouble locating

Schinner because other guests had carried him inside the shed,

which had no windows "to peer into," and no one in the shed

would answer the door. Eventually, law enforcement and medical

9 According to various accounts by Schinner and witnesses,

Cecil referred to Schinner as a "pussy," "homo," and "fag."
No. 2011AP564

10

personnel gained entry and treated Schinner for his injuries.

10

The sheriff's report noted that once law enforcement gained

access to the shed, party guests scattered and hid on top of and

behind a motorhome parked in the shed.

II. PROCEDURAL HISTORY

¶26 Schinner sued Gundrum and his insurer, West Bend, for

his injuries. The Second Amended Complaint alleged, in part:

6. Defendant Gundrum knew and expected, based

on a similar party held there months earlier, that

individuals he invited would invite other youths, who

in turn would invite others.

7. Defendant Gundrum knew and expected that a

substantial number of individuals, 40%–50% of those in

attendance, would be under the legal drinking age.

The underage attendees at the party also knew that

alcoholic beverages would be available for their

consumption.

10 Schinner testified at the preliminary hearing in Cecil's

criminal case that he suffered spinal cord damage as a result of

the assault, and while Schinner has regained some movement in

his arms and legs, he is "considered quadriplegic."

The record does not indicate what criminal charges Cecil

faced as a result of the Schinner assault. The investigating

sheriff's deputy indicated in his supplemental report on the

assault that he would be requesting charges against Cecil for

battery, with intent to cause either substantial or great bodily

harm, contrary to Wis. Stat. § 940.19(2) (2007–08). The deputy

also recommended a hate crime penalty enhancer under Wis. Stat.

§ 939.645(1)(b) (2007–08).

According to Consolidated Court Automation Programs (CCAP)

records, Cecil pled no contest to a charge of substantial

battery with intent to cause bodily harm, contrary to Wis. Stat.

§ 940.19 (2007–08). Another charge, second-degree recklessly

endangering safety, contrary to Wis. Stat. § 941.30(2) (2007–

08), was dismissed but read in.
No. 2011AP564

11

. . . .

12. Defendant Michael Gundrum realized that the

number of attendees, their age, and their intoxication

level could lead to fights or arguments, and undertook

the responsibility to monitor and supervise the party.

¶27 Schinner's first claim in the Second Amended Complaint

alleged a statutory violation in serving alcohol to minors. It

stated in part:

21. On December 14th and 15th, 2008, Gundrum

"procured" alcohol beverages for Cecil as that term is

used in Chapter 125 of the Wisconsin Statutes or sold,

dispensed[,] or gave away alcohol beverages to Cecil

a[s] those terms are used in Chapter 125 of the

Wisconsin Statutes.

11

22. Further, on December 14th and 15th, 2008,

Gundrum committed affirmative acts which encouraged,

advised and assisted Cecil in his consumption of

alcohol.

23. On December 14, 2008, Gundrum knew that

Cecil had not attained the legal drinking age.

24. On December 14th and 15th, 2008, the

consumption of beer by Cecil was a substantial factor

in causing injury to plaintiff Marshall Schinner.

¶28 Schinner's second claim in the Second Amended

Complaint alleged a breach of duty as a party host that

ultimately led to Schinner's injuries.

¶29 West Bend moved the circuit court for "separate trials

on the issues of insurance coverage and liability and a stay of

proceedings on liability pending resolution of insurance

11 Gundrum pled no contest to a charge of selling or

dispensing alcohol to underage persons, contrary to Wis. Stat.

§ 125.07(1)(a) (2007–08).
No. 2011AP564

12

coverage issues."

12 After conducting discovery, West Bend moved

for summary judgment.

¶30 The circuit court granted West Bend's motion,

concluding that there was no occurrence because "[t]here is no

allegation of any accidental conduct. . . . [A]ny acts on the

part of . . . Gundrum were intentional, namely his providing of

alcoholic beverages to underaged persons." In addition, the

circuit court ruled that the location exclusion in the

homeowner's policy was applicable "because the injury did not

occur at an insured location."

¶31 The court of appeals reversed. Schinner v. Gundrum,

2012 WI App 31, 340 Wis. 2d 195, 811 N.W.2d 431. The court of

appeals focused upon the assault on Schinner rather than on

Gundrum's actions in determining whether there was an

occurrence. Id., ¶10. Furthermore, the court of appeals

focused upon whether the assault was an accident from the

standpoint of the injured party——Schinner——although the court

said it would have determined that there was an occurrence even

if the assault were viewed from the standpoint of Gundrum, the

insured. Id., ¶¶10, 15.

¶32 The court of appeals cited three decisions by this

court to support its analysis that, "for purposes of determining

12 "Both the insurer and the insured have the right to have

the court resolve the issue of coverage separate from any trial

on liability." Estate of Sustache v. Am. Family Mut. Ins. Co.,

2008 WI 87, ¶26, 311 Wis. 2d 548, 751 N.W.2d 845; see also 2

Arnold P. Anderson, Wisconsin Insurance Law § 7.39, at 39 (6th

ed. 2012).
No. 2011AP564

13

whether an assault is an 'accident' or 'accidental' under an

insurance policy, the assault and resulting injuries must be

viewed from the standpoint of the person injured." Id., ¶11

(citing Tomlin v. State Farm Mut. Auto. Liab. Ins. Co., 95

Wis. 2d 215, 219, 222, 290 N.W.2d 285 (1980); Fox Wis. Corp. v.

Century Indem. Co., 219 Wis. 549, 551, 263 N.W. 567 (1935);

Button v. Am. Mut. Accident Ass'n, 92 Wis. 83, 85, 65 N.W. 861

(1896)). The court concluded that the assault was an accident

from Schinner's standpoint and that this triggered coverage for

Gundrum under the homeowner's policy. Id., ¶15. The court

acknowledged that its conclusion appeared to conflict with

Estate of Sustache v. American Family Mutual Insurance Co., 2008

WI 87, 311 Wis. 2d 548, 751 N.W.2d 845, which viewed the

question of whether an assault was an accident from the

standpoint of the insured, but the court stated that "the

outcome of the analysis is the same when viewed from either

vantage point." Schinner, 340 Wis. 2d 195, ¶16.

¶33 The court of appeals also concluded that the exclusion

for non-insured locations in the homeowner's policy did not

apply. Citing Newhouse v. Laidig, Inc., 145 Wis. 2d 236, 426

N.W.2d 88 (Ct. App. 1988), the court of appeals determined that

Schinner's injury did not "'aris[e] out of' the shed under the

terms of the policy because, while [the shed] was the undisputed

physical situs of injury, no particular condition of the

premises correlates to the basis of liability for the injury."

Id., ¶28 (emphasis added).
No. 2011AP564

14

¶34 West Bend petitioned this court for review, which we

granted on June 13, 2012.

III. STANDARD OF REVIEW

¶35 The interpretation of an insurance contract is a

question of law which this court reviews de novo. Everson v.

Lorenz, 2005 WI 51, ¶10, 280 Wis. 2d 1, 695 N.W.2d 298.

¶36 "We review a grant of summary judgment de novo,

relying on the same methodology as the circuit court." Estate

of Sustache, 311 Wis. 2d 548, ¶17 (citing Doyle v. Engelke, 219

Wis. 2d 277, 283, 580 N.W.2d 245 (1998)). Summary judgment is

proper where the record demonstrates that there is no genuine

issue as to any material fact and that the moving party is

entitled to judgment as a matter of law. Wis. Stat. § 802.08(2)

(2009–10); Estate of Sustache, 311 Wis. 2d 548, ¶17.

IV. DISCUSSION

¶37 When determining whether an insurance policy provides

coverage, a court first looks to the initial grant of coverage.

Estate of Sustache, 311 Wis. 2d 548, ¶22; Wadzinski v. AutoOwners Ins. Co., 2012 WI 75, ¶14, 342 Wis. 2d 311, 818

N.W.2d 819. Normally, if the court determines that the policy

was not intended to cover the asserted claims, it is not

necessary to examine the policy's exclusions. Estate of

Sustache, 311 Wis. 2d 548, ¶22. "If the court determines that

the initial grant of coverage does cover the type of claim

presented, the second step requires the court to examine the

policy's exclusions to determine whether coverage has been

withdrawn by an exclusion." Wadzinski, 342 Wis. 2d 311, ¶14
No. 2011AP564

15

(citing Am. Family Mut. Ins. Co. v. Am. Girl, Inc., 2004 WI 2,

¶24, 268 Wis. 2d 16, 673 N.W.2d 65). "[I]f coverage for the

claim has been withdrawn by an exclusion, the court examines any

exceptions to that exclusion that might reinstate coverage for

the claim." Id.

¶38 We interpret an insurance contract as it would be

understood by a reasonable person in the position of the

insured. Am. Girl, 268 Wis. 2d 16, ¶23. In interpreting

insurance policy language, we seek to "give effect to the intent

of the contracting parties." Id. (citing Wis. Label Corp. v.

Northbrook Prop. & Cas. Ins. Co., 2000 WI 26, ¶23, 233

Wis. 2d 314, 607 N.W.2d 276).

A. Was There an "Occurrence"?

¶39 The Gundrums' homeowner's policy states:

A. Coverage E – Personal Liability

If a claim is made or a suit is brought against

an "insured" for damages because of "bodily injury" or

"property damage" caused by an "occurrence" to which

this coverage applies, we will:

1. Pay up to our limit of liability for the

damage to which an "insured" is legally liable. . . .

2. Provide a defense at our expense by counsel

of our choice . . . .

(Emphasis added.) As noted previously, the homeowner's policy

defines an occurrence as "an accident, including continuous or

repeated exposure to substantially the same general harmful

conditions . . . ." (Emphasis added.) The homeowner's policy

does not define the term "accident."
No. 2011AP564

16

¶40 Our first task in this analysis is to determine from

whose standpoint an alleged accident should be viewed: the

injured party or the insured? We then must determine whether

the facts alleged in the Second Amended Complaint constitute an

occurrence or accident covered under the policy.

1. From Whose Standpoint Should an Accident be Viewed?

¶41 Liability insurance policies, like the homeowner's

policy in this case, typically contain a provision in which the

insurer agrees to indemnify the insured against liability

resulting from claims for bodily injury or property damage

caused by an occurrence or accident. However, insurance

treatises indicate that the definition of "occurrence" in

standard liability policies has changed over time.

¶42 Before 1966 standard insurance liability policies did

not contain an occurrence requirement. Instead, policies

"required proof that the bodily injury or property damage was

the result of an 'accident' which was interpreted to mean a

sudden, identifiable event." 3 Martha A. Kersey, New Appleman

on Insurance Law Library Edition § 18.02[6][a] (Jeffrey E.

Thomas & Francis J. Mootz, III, eds., 2012). Standard liability

policies were changed in 1966 to include the word "occurrence,"

which was defined as "an accident, including continuous or

repeated exposure to conditions, which results in bodily injury

or property damage neither expected nor intended from the

standpoint of the insured." Id.

¶43 In 1986 the definition was changed again, this time

removing the phrase "not expected or intended from the
No. 2011AP564

17

standpoint of the insured" and moving that phrase to the

intentional acts exclusion in the liability policy. See id.

¶44 Assaults, given their intentional nature, would seem

never to constitute an occurrence under a general liability

policy. However, "courts have taken or adopted two divergent

positions as to from whose perspective the assault is to be

viewed in determining whether it constitutes an 'accident'."

Annotation, Liability Insurance: Assault as an "Accident," or

Injuries Therefrom as "Accidentally" Sustained, Within Coverage

Clause, 72 A.L.R. 3d 1090, 1095 (1976); see also 9 Steven Plitt,

Daniel Maldonado & Joshua D. Rogers, Couch on Insurance § 127:21

(3d ed. 2008). Some courts have held that this determination

should be made from the standpoint of the injured party, while

other courts have held that the determination must be made from

the standpoint of the assailant who is often——but not always——

the insured.

¶45 Schinner urges us to decide the question of whether an

"accident" took place from the standpoint of the injured party.

At oral argument, counsel for Schinner asserted that if the

language "expected or intended from the standpoint of the

insured" is not present in the definition of occurrence, then,

as a default rule, the occurrence must be viewed from the

standpoint of the injured party. Schinner and the court of

appeals both look to Button, Fox, and Tomlin as Wisconsin

precedent on point. We examine each case in turn.

¶46 In Button, the insured plaintiff was injured by the

"intentional discharge of a firearm" directed at him by an
No. 2011AP564

18

unknown person. Button, 92 Wis. at 84. The policy at issue, an

accident policy, insured the plaintiff against "death or

injuries through 'external, violent, and accidental means,'" but

contained an exclusion for, among other things, intentional

injuries. Id. at 84–85. The Button court concluded that "an

injury intentionally inflicted on the insured person by another

is an 'accidental injury,' when such injury is unintentional on

the part of the insured." Id. at 85 (citation omitted). It is

important to reiterate that, in Button, the injured party was

also the insured party. Id. at 84-85.

¶47 In Fox, an insurer refused to indemnify an insured

theater when one of the theater's employees assaulted a patron

and the patron sued the theater for damages. Fox, 219 Wis. at

550 (summary of the case). Citing Button, the Fox court held

that "[w]hether or not an injury is accidental under the terms

used in the policy here involved is to be determined from the

standpoint of the person injured." Id. at 551. Thus, Fox's

holding misconstrued Button by substituting the term "injured"

for "insured." While the Button plaintiff was both the injured

and insured, Fox's holding focused exclusively on the injured

party's perspective.

13

13 The court later explained the theater's position:

The appellant is subject to the liability for

damages flowing from the tortious conduct of its

employee. This liability is imposed upon [the]

assured by law under the rule of respondeat superior.

Although the appellant may be held liable for such

tort, it cannot be said that it committed the assault,
No. 2011AP564

19

¶48 Finally, in Tomlin this court concluded that injuries

sustained by a state patrol officer who was stabbed by an

insured motorist during a traffic stop were "caused by

accident," within the meaning of the insured assailant's

automobile liability policy. Tomlin, 95 Wis. 2d at 222. The

Tomlin court stated:

In determining whether an injury is "caused by

accident" or "accidentally sustained" within the

coverage afforded by a liability insurance policy, the

courts have been primarily concerned with the question

of whether the occurrence is to be viewed from the

standpoint of the injured person or the insured. The

majority of courts, including this court, when

considering the question, have held or recognized that

the determination of whether injuries resulting from

an assault were caused by "accident" or "accidentally

sustained" must be made from the standpoint of the

injured party, rather than from that of the person

committing the assault.

Id. at 219 (citing Annotation, Liability Insurance: Assault as

an "Accident," or Injuries Therefrom as "Accidentally"

Sustained, Within Coverage Clause 72 A.L.R.3d 1090 (1976); 12

George J. Couch, Ronald A. Anderson, & Mark S. Rhodes, Couch on

Insurance § 45:38, at 133-34 (2d ed. 1959)) (emphasis added).

¶49 On the surface, Tomlin stands for the proposition that

an accident should be viewed from the standpoint of the injured

party, not the insured. But there is a factual caveat. In

Tomlin, the injured officer was stabbed by a minor. The officer

nor that it authorized it. Thus the appellant has not

placed itself outside the terms of the policy . . . .

Fox Wis. Corp. v. Century Indem. Co., 219 Wis. 549, 551-52, 263

N.W. 567 (1935).
No. 2011AP564

20

sued the minor and the minor's parents. Under Wisconsin law,

Wis. Stat. § 343.15(2) (1977–78), "Any . . . wilful misconduct

of a person under the age of 18 years when operating a motor

vehicle upon the highways is imputed to the parents . . . . The

parents . . . [are] jointly and severally liable with such

operator for any damages caused by such . . . wilful

misconduct." See also Wis. Stat. § 895.035 (1977–78).

Consequently, the court may have perceived the parents as being

in the same position as the theater in Fox.

¶50 While the decisions in Button and Fox make good sense,

the rule stated in Tomlin comes out of an extraordinary

situation and is distinguishable on that basis.

¶51 Analyzing an accident from the standpoint of the

injured party goes against recent insurance decisions in

Wisconsin, which considered whether the insured acted with lack

of intent in a particular incident. See, e.g., Estate of

Sustache, 311 Wis. 2d 548, ¶52; Am. Girl, 268 Wis. 2d 16, ¶¶37–

49; Smith v. Katz, 226 Wis. 2d 798, 819–21, 595 N.W.2d 345

(1999); Bruner v. Heritage Cos., 225 Wis. 2d 728, 737–38, 593

N.W.2d 814 (Ct. App. 1999); Kalchthaler v. Keller Constr. Co.,

224 Wis. 2d 387, 397, 591 N.W.2d 169 (Ct. App. 1999); cf. 43 Am.

Jur. 2d Insurance § 674 (2003) ("The determination of whether an

injury resulted from an accident within an occurrence clause of

a liability policy is made from the standpoint of the

insured."). This approach is consistent with the idea that a

court should interpret an insurance policy from the standpoint

of a reasonable person in the position of the insured.
No. 2011AP564

21

Wadzinski, 342 Wis. 2d 311, ¶11. Moreover, when interpreting an

insurance contract a court should give effect to the intentions

of the parties, Folkman v. Quamme, 2003 WI 116, ¶12, 264

Wis. 2d 617, 665 N.W.2d 857, not the intent of a third party.

¶52 Therefore, we hold 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.

2. Determining Whether an Accident Took Place

¶53 Numerous courts and commentators, both inside and

outside of Wisconsin, have attempted to define and interpret the

term "accident" when determining whether insurance coverage

applies. Compare 9 Steven Plitt, Daniel Maldonado, & Joshua D.

Rogers, Couch on Insurance § 126:26 ("an accident is a

distinctive event that is unforeseen and unintended") with 1

Arnold P. Anderson, Wisconsin Insurance Law § 5.18, at 26 (6th

ed. 2012) ("The difficulty comes in determining . . . what

triggers the coverage.").

¶54 This court has interpreted the term "accident" in an

insurance policy in previous decisions, and we look to our

earlier decisions for guidance.

¶55 In Doyle we reviewed an employer's alleged negligent

supervision of its employees. Doyle, 219 Wis. 2d at 281. The

court was called upon to interpret the term "event" in a CGL

policy, which defined "event" as "an accident, including

continuous or repeated exposure to substantially the same

general harmful conditions." Id. at 289.
No. 2011AP564

22

¶56 Because the word "accident" was undefined in the CGL

policy, the Doyle court looked to dictionary definitions and

found that "accident" was commonly defined as "'[a]n unexpected,

undesirable event' or 'an unforeseen incident' which is

characterized by a 'lack of intention.'" Id. (quoting The

American Heritage Dictionary of the English Language 11 (3d ed.

1992)). The Doyle court also examined the dictionary definition

of negligence, which was defined as "'failure to exercise the

degree of care considered reasonable under the circumstances,

resulting in an unintended injury to another party.'" Id. at

289–90 (quoting The American Heritage Dictionary, supra, at

1209). The court noted that both definitions "center on an

unintentional occurrence leading to undesirable results," and

the court concluded that "a reasonable insured would

expect . . . [a policy] provision defining 'event' to include

negligent acts." Id. at 290 (emphasis added).

14

14 Relying on dram shop law in Chapter 125 of the Wisconsin

Statutes, Schinner argues that furnishing alcohol to a minor in

Wisconsin is negligent, not intentional, conduct. He asserts

that because negligence can constitute an occurrence under an

insurance policy, Doyle v. Engelke, 219 Wis. 2d 277, 290, 580

N.W.2d 245 (1998), Gundrum's furnishing of alcohol to minors was

negligent and should trigger coverage.

We reject this argument. The facts alleged in a complaint

or as supplemented by affidavits determine a duty to defend and

trigger coverage under an insurance policy, not a plaintiff's

theories of liability. See, e.g., Doyle, 219 Wis. 2d at 284–85

(stating that the insurer has a duty to defend where the

plaintiff's complaint alleges facts that would give rise to

liability under a policy); Berg v. Schultz, 190 Wis. 2d 170,

177, 526 N.W.2d 781 (Ct. App. 1994) (courts "must focus on the

incident or injury that gives rise to the claim, not the

plaintiff's theory of liability").
No. 2011AP564

23

¶57 In American Girl we interpreted a CGL policy to

determine whether the policy provided coverage for property

damages resulting from an alleged occurrence. Am. Girl, 268

Wis. 2d 16, ¶¶1–3. In American Girl a subcontractor "gave

faulty site-preparation advice to a general contractor in

connection with the construction of a warehouse. As a result,

there was excessive settlement of the soil after the building

was completed," and the warehouse was so damaged that it had to

be torn down. Id., ¶3. Once again, the CGL policy defined

occurrence as an accident, but the policy did not define

accident. Id., ¶37.

¶58 As in Doyle, the American Girl court turned to

dictionaries for help in interpreting the term accident:

The dictionary definition of "accident" is: "an event

or condition occurring by chance or arising from

unknown or remote causes." Webster's Third New

International Dictionary of the English Language 11

(2002). Black's Law Dictionary defines "accident" as

follows: "The word 'accident,' in accident policies,

means an event which takes place without one's

foresight or expectation. A result, though

unexpected, is not an accident; the means or cause

must be accidental." Black's Law Dictionary 15 (7th

ed. 1999).

Id. (emphasis added). In light of these definitions, the

American Girl court concluded that the circumstances in the case

Furthermore, an allegation of negligence is not the

equivalent of an occurrence. Am. Family Mut. Ins. Co. v. Am.

Girl, Inc., 2004 WI 2, ¶45, 268 Wis. 2d 16, 673 N.W.2d 65

("Doyle did not . . . equate the term 'accident,' as used in the

CGL policy, with negligence as a form of legal liability; we

simply held that negligent acts were 'accidental' within the

meaning of the CGL's definition of 'event.'").
No. 2011AP564

24

constituted an occurrence under the policy: the property damage

was "clearly not intentional," nor was it "anticipated by the

parties." Id., ¶38. More specifically:

The damage to the [warehouse] occurred as a result of

the continuous, substantial, and harmful settlement of

the soil underneath the building. [The] inadequate

site-preparation advice was a cause of this exposure

to harm. Neither the cause nor the harm was intended,

anticipated, or expected. We conclude that the

circumstances of this claim fall within the policy's

definition of "occurrence."

Id. (emphasis added) (footnote omitted).

15

¶59 In Everson we reviewed whether misrepresentation in a

real estate transaction constituted an occurrence under a CGL

policy. Everson, 280 Wis. 2d 1, ¶2. After the transaction, the

buyers determined that a portion of their lot was in a 100-year

floodplain, contrary to the representations made by the seller

in a real estate condition report given to the buyers.

16 Id.,

¶5. As a result, the buyer was unable to build on that

location. Id. The buyer sued the seller, but the seller's

insurer argued that it had no duty to defend and indemnify under

its CGL policy to the seller. Id., ¶7. The CGL policy covered

15 See also Stuart v. Weisflog's Showroom Gallery, Inc.,

2008 WI 86, 311 Wis. 2d 492, 753 N.W.2d 448. The Stuart court

adopted American Girl's requirement that the underlying causal

event must be accidental for the event to be an occurrence, not

the unexpected result. Id., ¶40. "It does not matter whether

[the defendants] intended a specific result; what matters is

whether the cause of the damage was accidental." Id.

16 The real estate condition report appeared to have

contained a typographical error that the buyer relied upon when

purchasing a particular lot. Everson v. Lorenz, 2005 WI 51,

¶16, 280 Wis. 2d 1, 695 N.W.2d 298.
No. 2011AP564

25

property damage caused by an occurrence. The policy defined the

term "occurrence" as an accident, but "accident" was not

defined. Id., ¶¶12, 15. Thus, the Everson court had to

determine whether the seller's alleged misrepresentation

constituted an accident and triggered coverage under the CGL

policy.

¶60 Noting that "this court has often relied on dictionary

definitions for assistance," the Everson court looked to Black's

Law Dictionary, which defined an "accident" as "'[a]n unintended

and unforeseen injurious occurrence; something that does not

occur in the usual course of events or that could not be

reasonably anticipated.'" Id., ¶15 (quoting Black's Law

Dictionary 15 (7th ed. 1999)). The court also cited the Doyle

court's definition of "accident": "'[a]n unexpected, undesirable

event' or 'an unforeseen incident' which is characterized by a

'lack of intention.'" Id. (quoting Doyle, 219 Wis. 2d at 289).

¶61 Ultimately, the Everson court concluded that the

seller's misrepresentations did not constitute an accident.

Id., ¶18. The seller's misrepresentation required a "degree of

volition inconsistent with the term accident." Id., ¶19 (citing

Sheets v. Brethren Mut. Ins. Co., 679 A.2d 540, 552–53 (Md.

1999) (Karwacki, J., dissenting)) (emphasis added). The seller

may have made a mistake in a real estate condition report when

he initially placed the lot outside of the 100-year floodplain.

Id., ¶¶5 n.3, 22. However, the seller later acted with volition

when he intentionally gave this information to the buyer. Id.,

¶22 (emphasis added). "[S]tripped to its essentials," an
No. 2011AP564

26

action, not an accident, caused the seller to give misleading

information to the buyer. Id.

¶62 Finally, in Estate of Sustache, we reviewed an

occurrence case somewhat similar to this matter. Estate of

Sustache involved a fight at an underage drinking party in which

the insured punched a victim, causing the victim to fall to a

curb and sustain severe injuries that ultimately led to death.

Estate of Sustache, 311 Wis. 2d 548, ¶5. There was no dispute

that the insured assaulter intended to strike the victim, but

there was also no dispute that the insured assaulter did not

intend the blow to be fatal. Id. The estate and parents of the

victim sued the assaulter and his insurer, American Family,

which moved for summary judgment on the grounds that, inter

alia, the damages were not caused by an occurrence under the

policy. Id., ¶¶6, 12. Once again, the policy defined an

"occurrence" as an accident, but the policy did not define the

term "accident." Id., ¶9.

¶63 After reviewing our previous analysis of the term

"occurrence" in Doyle, American Girl, Everson, and Stuart v.

Weisflog's Showroom Gallery, Inc., 2008 WI 86, 311 Wis. 2d 492,

753 N.W.2d 448, we held in Estate of Sustache that the

allegations in the complaint, supplemented by the deposition of

the insured assaulter, could not "reasonably be construed to

constitute a covered claim" under the American Family policy.

Id., ¶51.

¶64 Considering one of the Doyle definitions of

"accident"——"an unintentional occurrence leading to undesirable
No. 2011AP564

27

results"——we concluded that the insured's actions did not

constitute an accident. The insured may not have intended the

unexpected result, but he did intend to throw the punch that

ultimately led to the death of the victim. Id., ¶¶52–53

(quoting Doyle, 219 Wis. 2d at 290). American Girl's definition

of "accident" also reinforced our conclusion. The means or

cause of the victim's bodily harm was an intentional punch; the

punch could not be said to occur by chance or arise from an

unknown or remote cause. Id., ¶53 (citing Am. Girl, 268

Wis. 2d 16, ¶37). We also noted that, like the

misrepresentation in Everson, the insured assaulter's action

required a degree of volition inconsistent with the term

"accident." Id., ¶54 (citing Everson, 280 Wis. 2d 1, ¶19).

¶65 With the above cases and their interpretations of an

insurance policy's requirement of an "occurrence" or "accident"

in mind, we turn to the facts of this case.

¶66 At the outset, we must determine where to focus our

analysis. More specifically, what is the injury-causing event

in this case? Is it Cecil's assault on Schinner, or is it the

actions of Gundrum in hosting the party? In this case, as

opposed to a case against Cecil, Schinner's Second Amended

Complaint alleges that wrongful conduct by Gundrum caused his

bodily injury. Normally, the allegations in a complaint are the

allegations an insurer must defend or indemnify, and it is these

alleged facts that determine whether there is coverage under the

homeowner's policy. See Doyle, 219 Wis. 2d at 284-85. Here,

the circuit court considered additional evidence, but the
No. 2011AP564

28

additional evidence did not undermine or change the thrust of

the allegations in the complaint.

¶67 There is no question that Cecil intended to assault

Schinner. Schinner does not contend that Gundrum intended or

approved of Cecil's assault or that he ever wanted to see

Schinner injured.

¶68 However, the allegations in Schinner's Second Amended

Complaint and other evidence make clear that Gundrum took a

number of intentional actions that ultimately caused Schinner's

bodily injury. Gundrum intended to host the party and, based on

the experience from an earlier party he hosted, he intended that

the "individuals he invited would invite other youths, who would

in turn invite others." Gundrum intended that minors attend his

party. He "knew and expected that a substantial number of

individuals" were under the legal drinking age and that these

underage attendees would consume alcohol made available to them

at the party. By making the arrangements for beer pong

throughout the evening, Gundrum actively promoted heavy drinking

at the party. In violation of Chapter 125 of the Wisconsin

Statutes, Gundrum procured alcohol for Cecil and other minors.

Gundrum knew that Cecil was an underage individual who became

belligerent when intoxicated. Nonetheless, Gundrum "encouraged,

advised and assisted Cecil in his consumption of alcohol."

Gundrum's actions in hosting an underage drinking party and in

procuring alcohol for Cecil and others were intentional. See

Doyle, 219 Wis. 2d at 290 (concluding that an "accident" is an

"unintentional occurrence leading to undesirable results")
No. 2011AP564

29

(emphasis added). Gundrum's actions were entirely volitional.

He did not host the underage drinking party by mistake, against

his will, or by chance. See Everson, 280 Wis. 2d 1, ¶19.

¶69 As we stated in American Girl, "A result, though

unexpected, is not an accident; the means or cause must be

accidental." Am. Girl, 268 Wis. 2d 16, ¶37 (citation omitted).

Here, "the means or cause" of Schinner's bodily injury was not

accidental. The intentional, illegal procuring and serving of

alcohol to Cecil exposed Schinner to harm. Gundrum's many

intentional acts were a substantial factor in causing Schinner's

bodily injury. The events leading up to the bodily injury were

not remote and were not accidental.

¶70 As a general rule, where an insured acts intentionally

to cause bodily injury to another, insurance coverage for the

injury will not be available. This case is more difficult

because bodily injury was not intended and there was no

certainty that it would occur. On the other hand, bodily injury

was hardly unforeseeable. All the conditions for a tragic

injury had been put in place, and they were put in place

intentionally. As the Michigan Supreme Court concluded in an

insurance coverage case dealing with an occurrence, "when an

insured's intentional actions create a direct risk of harm,

there can be no liability coverage for any resulting damage or

injury, despite the lack of an actual intent to damage or

injure." Frankenmuth Mut. Ins. Co. v. Masters, 595 N.W.2d 832,

839 (Mich. 1999) (quoting Auto Club Grp. Ins. Co. v. Marzonie,

527 N.W.2d 760, 771 (Mich. 1994) (Griffin, J., concurring)).
No. 2011AP564

30

¶71 Given the facts of this case, it is not reasonable to

argue that a fight between intoxicated teenagers was

"unexpected" or "unforeseen," Doyle, 219 Wis. 2d at 289,

especially when one of the underage drinkers was known to become

belligerent when he was drunk. Gundrum anticipated that

something undesirable, like a fight, might happen at his party:

he stopped drinking when he realized the increasing number of

guests attending the party along with the amount of alcohol

being consumed created a volatile situation. It is no leap of

logic to conclude that Gundrum knew that a combination of

underage partygoers, alcohol, and games like beer pong would

create a powder keg. To aggravate this already volatile

situation, Gundrum heard Schinner's pleas to intervene and stop

the relentless taunting he was receiving from Cecil who had a

reputation for belligerence when he was intoxicated.

¶72 Schinner urges us to adopt an approach in determining

an occurrence like the approach taken by the Minnesota Supreme

Court in American Family Insurance Co. v. Walser, 628 N.W.2d 605

(Minn. 2001). In that case, three youths were playing in a high

school gym, when one of them, Jewison, jumped up and hung from

the rim of the basketball hoop. Id. at 607. The other two

pulled on Jewison's ankles several times until finally he fell

and suffered bodily injury. Id. Jewison sued the other two

youths, Walser and Shoemaker, but Walser's insurer, American

Family, argued it had no duty to defend or indemnify Walser

because there was no occurrence under Walser's homeowner's

policy. Id. at 608. The definition of occurrence in the
No. 2011AP564

31

American Family policy was identical to the homeowner's policy

in this case——"an accident," which the policy did not define.

Id. at 609.

¶73 The Minnesota Supreme Court held that "in analyzing

whether there was an accident for purposes of coverage, lack of

specific intent to injure will be determinative, just as it is

in an intentional act exclusion analysis." Id. at 612. Thus,

the court concluded that while Walser acted intentionally——

pulling at Jewison's ankles while he hung from the basketball

hoop——Walser did not act with specific intent to injure Jewison,

thereby constituting an occurrence and triggering coverage under

the American Family policy. Id. at 613. The court also

concluded that, since the three youths were merely "goofing

around," that both Jewison and Walser had hung on the basketball

rim before and fallen to the ground without injury, and that

Walser's actions were merely impulsive actions resulting in

unintentional injury, the intentional acts exclusion did not

apply. Id. at 614–15.

¶74 We have two reservations about applying Walser to the

present situation. First, our insurance case law does not

require that an insured intend to harm, or know with substantial

certainty that harm will occur, in order to determine that the

harm was not an accident. An accident is "an unintentional

occurrence leading to undesirable results." Doyle, 219

Wis. 2d at 290. To assess the existence of an accident, a court

will focus on the "means or cause" of harm to determine whether

it was truly accidental, even if the result was unexpected. Am.
No. 2011AP564

32

Girl, 268 Wis. 2d 16, ¶37. Here, there was intentional conduct

in throwing the illegal underage drinking party and encouraging

Cecil to drink when Gundrum had knowledge of Cecil's aggressive

behavior when intoxicated. Intent, volition, knowledge, and

foreseeability are all present, consistent with our case law.

Gundrum's conduct was not accidental, so no occurrence triggered

coverage under the homeowner's policy.

¶75 Second, Gundrum's conduct and Schinner's injury differ

greatly from the conduct and injury in Walser. While the

actions of the three youths in Walser were described as "goofing

around" and "impulsive," Gundrum was doing more than "goofing

around." Gundrum planned a large drinking party, procured

alcohol for minors, knew of Cecil's belligerence, and encouraged

Cecil's consumption of alcohol. We believe that the facts of

this case——intentionally providing alcohol to minors, resulting

in bodily injury——are closer to the facts in a Minnesota Court

of Appeals case, Illinois Farmers Insurance Co. v. Duffy, 618

N.W.2d 613 (Minn. Ct. App. 2000).

17

17 The Minnesota Supreme Court's decision in American Family

Insurance Co. v. Walser, 628 N.W.2d 605 (Minn. 2001), did not

specifically overrule the Minnesota court of appeals decision

cited by West Bend in this case, Illinois Farmers Insurance Co.

v. Duffy, 618 N.W.2d 613 (Minn. Ct. App. 2000), review denied

(Jan. 26, 2001). In fact, the Walser decision did not even

mention Duffy. In Duffy, the Minnesota Court of Appeals held

that the intentional act of providing alcohol to minors was

wrongful conduct and did not constitute an occurrence under a

homeowner's insurance policy. Duffy, 618 N.W.2d at 615.
No. 2011AP564

33

¶76 Schinner also contends that the lack of a liquor

exclusion in the homeowner's policy is important in this case.

He argues that since other homeowner policies contain liquor

exclusions,

18 and West Bend could have put one in its policy,

this court should not rewrite the contract to help West Bend

avoid coverage. Schinner also points to the presence of a

liquor exclusion in the CGL policy for Gundrum Trucking.

19 If

West Bend anticipated liquor liability coverage under the CGL

policy and specifically excluded it, he argues, then surely the

homeowner's policy was expected to cover liquor liability in the

absence of such an exclusion. We are not persuaded.

¶77 CGL policies typically contain an exclusion for liquor

liability. See, e.g., 1 Anderson, supra, at § 5.187; 9A Lee R.

It is not surprising that Duffy is still good law. The

Duffy court and courts in other states have found no accident,

or no occurrence, under a homeowner's policy when an insured

intentionally or knowingly provides alcohol to a minor and

injury results. See, e.g., Am. Modern Home Ins. Co. v. Corra,

671 S.E.2d 802, 806–07 (W. Va. 2008) (holding that there is no

occurrence and a homeowner's policy does not provide coverage

when injury is caused by an insured's conduct in "knowingly

permitting" a minor to consume alcohol on the insured's

property); Allstate Ins. Co. v. J.J.M., 657 N.W.2d 181, 184

(Mich. Ct. App. 2002) (concluding that the insured "reasonably

should have expected that giving minors enough alcohol to allow

them to pass out would result in harm" and thus no accident

giving rise to coverage existed).

18 As an example of a homeowner's policy containing a liquor

exclusion, Schinner cites Anderson v. American Family Mutual

Insurance Co., 2002 WI App 315, 259 Wis. 2d 413, 655 N.W.2d 531.

19 The written summary judgment decision in this case

mistakenly placed the liquor exclusion in the homeowner's

policy, not the CGL policy.
No. 2011AP564

34

Russ, Thomas F. Segalla, Steven Plitt, Daniel Maldonado, &

Joshua D. Rogers, Couch on Insurance § 129:32 (3d ed. 2005).

However, these same treatises say nothing about the frequency of

liquor liability exclusions in homeowner's policies. Although

Schinner cites one Wisconsin case

20 to support his assertion that

these exclusions are common to homeowner's policies, the absence

of an exclusion does not necessarily mean the presence of

coverage.

¶78 As noted above, the first step in a court's analysis

of an insurance contract is to examine whether the policy

provides an initial grant of coverage. See, supra, ¶37. Hence,

if a given set of facts do not trigger coverage, it is not

necessary to look at a policy's exclusions. West Bend could

have inserted a liquor liability exclusion into the policy, but

we would not have reached it under the facts of this case

because Gundrum's intentional and illegal conduct did not lead

to coverage.

¶79 Finally, we note the strong public policy weighing

against finding an occurrence in this situation. As this court

stated in Hedtcke v. Sentry Insurance Co., 109 Wis. 2d 461, 326

N.W.2d 727 (1982):

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

(1) avoiding profit from wrongdoing; (2) deterring

crime; (3) avoiding fraud against insurers; and (4)

20 See supra, n.18.
No. 2011AP564

35

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.

Hedtcke, 109 Wis. 2d at 484 (citing Keeton, Insurance Law

§ 5.3(a) at 279 (1971)). See also 7 Steven Plitt, Daniel

Maldonado, Joshua D. Rogers, & Jordan R. Plitt, Couch on

Insurance § 101:22 (3d ed. 2006) ("In general, it is against

public policy for an insurance contract to provide coverage for

the intentional or willful misconduct of an insured."); 43 Am.

Jur. 2d Insurance § 478 (2003) ("Public policy does on occasion

demand that a wrongdoer be forbidden to shift the cost of

liability to another through insurance . . . .").

¶80 Finding an occurrence and coverage under these

circumstances would allow the host to escape responsibility for

his intentional and illegal actions. We would be sending the

wrong message about underage drinking parties, implying that

whatever tragic consequences might occur, insurance companies

will be there to foot the bill. Moreover, insurance contracts

are construed from the standpoint of what a reasonable person in

the position of the insured would believe the contract to mean.

Acuity v. Bagadia, 2008 WI 62, ¶13, 310 Wis. 2d 197, 750

N.W.2d 817; Liebovich v. Minn. Ins. Co., 2008 WI 75, ¶17, 310

Wis. 2d 751, 751 N.W.2d 764. We do not believe that a

reasonable insured would expect coverage for bodily injury

resulting from the hosting of a large, illegal underage drinking

party.
No. 2011AP564

36

¶81 We conclude that Gundrum's intentional actions in

hosting a large underage drinking party——actions that were

illegal——and providing alcohol to an individual known to become

belligerent when intoxicated, were a substantial factor in

causing Schinner's bodily injury. These causes were not

accidental. Since there was no occurrence under the homeowner's

policy, there was no initial grant of coverage to Gundrum under

the policy.

B. The Exclusion for "Arising Out Of" a Non-Insured Location

¶82 Ordinarily, if we find no initial grant of coverage

under an insurance policy, we end our inquiry. See supra, ¶37.

In this case, however, the court of appeals' interpretation of

the non-insured location exclusion has been published and should

be addressed.

¶83 The homeowner's policy contained an exclusion for

bodily injury or property damage liability arising out of a

premises that is not an "insured location" (or a premises used

by the insured "in connection with" an "insured location.")

"Coverages E and F do not apply to the following: . . . 'Bodily

injury' or 'property damage' arising out of a premises: a. Owned

by an 'insured'; b. Rented to an 'insured'; or c. Rented to

others by an 'insured'; that is not an 'insured location'."

(Emphasis added.)

¶84 The parties dispute the meaning of the phrase "arising

out of." West Bend argues that this phrase means, in the

context of a general liability insurance policy, "originating

from, growing out of, or flowing from." Garriguenc v. Love, 67
No. 2011AP564

37

Wis. 2d 130, 137, 226 N.W.2d 414 (1975). West Bend argues that

the plain language of the exclusion precludes coverage because

Schinner's injuries arose out of the shed and the Gundrums did

not use the shed "in connection with" their insured residence.

Schinner and the court of appeals disagree with this

interpretation, relying on Newhouse v. Laidig, Inc., 145

Wis. 2d 236, 426 N.W.2d 88 (Ct. App. 1988).

¶85 In Newhouse, an unsupervised child was injured when he

became entangled in a silo unloader. Id. at 238. The

defendant's homeowner's policy excluded coverage for bodily

injury "arising out of any premises owned or rented to any

insured which is not an insured location." Id. at 239. The

farm silo was not an insured location. Id.

¶86 The Newhouse court found the non-insured location

exclusion did not apply, and the homeowner's policy provided

coverage to the farm owner. Id. at 239–40. Newhouse relied on

a Missouri decision, Lititz Mutual Insurance Co. v. Branch.

Lititz involved a similar "arising out of" exclusion, but the

court held that the bodily injury in that case did not occur as

a result of "a condition" of the non-insured location. Lititz

Mut. Ins. Co. v. Branch, 561 S.W.2d 371, 374 (Mo. Ct. App.

1977). Newhouse adopted this approach: "The dispositive issue

therefore is whether there is some correlation between the

negligence giving rise to liability and a condition of the

premises." Newhouse, 145 Wis. 2d at 240 (emphasis added).

¶87 Newhouse did not cite the Garriguenc case, which

discussed the same "arising out of" language. The Garriguenc
No. 2011AP564

38

court said: "The words 'arising out of' in liability insurance

policies are very broad, general, and comprehensive; and are

ordinarily understood to mean originating from, growing out of,

or flowing from. All that is necessary is some causal

relationship between the injury and the event [here, "property"]

not covered." Garriguenc, 67 Wis. 2d at 137 (footnote omitted).

¶88 The Newhouse court provided a much narrower reading of

the "arising out of" exclusion than the Garriguenc court. In

effect, it attempted to overrule the Garriguenc decision. We

think a better reading of the exclusion is not to exclude all

liability coverage for events not on an insured premises but

rather to exclude liability coverage when there is a "causal

relationship" between the premises that are not insured and the

insured's action or non-action giving rise to liability. Cf.

St. Paul Fire & Marine Ins. Co. v. INA, 501 F. Supp. 136, 138

(W.D. Va. 1980) (stating that "arising out of" are words of much

broader significance than "caused by" and are usually understood

to mean "incident to or having connection with").

¶89 In this case, the homeowner's policy language is clear

on its face. The policy excludes coverage for injuries arising

out of a non-insured premises, not from a condition of a noninsured premises. Schinner's bodily injury clearly arose out

of, or originated, or flowed from, the shed where the illegal

party took place on the premises of Gundrum Trucking, a noninsured location.

¶90 In this case, a causal relationship between the shed

and Schinner's injury is present. A portion of the shed was set
No. 2011AP564

39

up for a social gathering, especially an underage drinking

party: chairs, tables, couch, a refrigerator, a CD player, and a

Ping-Pong table for beer pong. The shed had no windows, thereby

concealing the illegal activities inside. As counsel for West

Bend aptly observed at oral argument for summary judgment, "It

was an illegal party. . . . [T]hat's not the kind of thing one

could have rented out the Knights of Columbus Hall to do. Or to

have done out in your front yard at your residence. This had a

causal nexus to the premises."

C. Whether the Shed was a Premises Used in Connection With

an Insured Location

¶91 Finally, Schinner advances the argument that the shed

was in fact an insured location because it was used "in

connection with" the Gundrum's insured residence. Schinner

points to the storage of the Gundrums' insured personal

property, like snowmobiles, to turn the shed into an insured

location.

21 Such an assertion defies common sense. If business

owners were allowed to store insured personal property on their

business premises and obtain insurance coverage for the premises

through a homeowner's policy, there would be much less reason to

obtain business insurance. Such a result would be absurd.

Olguin v. Allstate Ins. Co., 71 Wis. 2d 160, 165, 237 N.W.2d 694

(1976) ("[I]nsurance policies should be given a reasonable

21 The shed was used to store personal property for

Gundrum's extended family. If Schinner's argument were valid,

the shed would be used "in connection with" more than one

residence. Tortfeasors from several residences would be able to

claim coverage.
No. 2011AP564

40

interpretation and not one which leads to an absurd result.");

Wilson Mut. Ins. Co. v. Risler, 2011 WI App 70, ¶12, 333

Wis. 2d 175, 798 N.W.2d 898 ("We reject interpretations of

insurance policies that lead to absurd results.").

V. CONCLUSION

¶92 Gundrum's actions in setting up an isolated shed for a

drinking party, procuring alcohol and expecting others to bring

alcohol, inviting many underage guests to the party, and

encouraging the underage guests to drink——especially an underage

guest known to become belligerent when intoxicated——were

intentional actions that violated the law. Gundrum's many

intentional wrongful acts were a substantial factor in causing

Schinner's bodily injury. Viewed from the standpoint of a

reasonable insured, Gundrum's intentional actions created a

direct risk of harm resulting in bodily injury, notwithstanding

his lack of intent that a specific injury occur. Thus,

Schinner's bodily injury was not caused by an "occurrence"

within the meaning of the policy, and West Bend is not obligated

to provide insurance coverage for Gundrum.

¶93 Even assuming there was an occurrence under the West

Bend homeowner's policy, coverage is excluded because the injury

arose out of the use of an isolated shed for an underage

drinking party on uninsured premises. The fact that the

Gundrums kept some personal property insured under the policy at

the shed did not make the shed a premises used in connection

with the insured's residence, as those terms are defined in the
No. 2011AP564

41

policy. Thus, the business shed was not an insured location

triggering coverage under the homeowner's policy.

By the Court.—The decision of the court of appeals is

reversed.
No. 2011AP564.npc

1

¶94 N. PATRICK CROOKS, J. (concurring). I agree with

the result reached by the majority that the homeowner's policy

does not provide coverage for Schinner's injuries under these

facts. I write separately because my approach differs from both

the majority opinion and that of the dissent.

¶95 I agree with the dissent that under the insurance

policy at issue and our case law, including Doyle v. Engelke,

219 Wis. 2d 277, 580 N.W.2d 245 (1998), and Estate of Sustache

v. American Family Mutual Insurance Co., 2008 WI 87, 311 Wis. 2d

548, 751 N.W.2d 845, Cecil's assault on Schinner constitutes an

occurrence, and I join the analysis of the dissent on that

issue.

¶96 However, I agree with the majority that the noninsured location exclusion applies because Schinner's injuries

arose out of, originated, or flowed from a non-insured location,

consistent with this court's interpretation of "arising out of"

in Garriguenc v. Love, 67 Wis. 2d 130, 226 N.W.2d 414 (1975),

and I join the analysis of the majority on that issue.

¶97 Accordingly, I respectfully concur.
No. 2011AP564.awb

1

¶98 ANN WALSH BRADLEY, J. (dissenting). I agree with

the majority when it holds that the determination of what

constitutes an "occurrence" under the insurance policy is to be

analyzed from the standpoint of the insured, not the injured

party. Majority op., ¶52. I part ways with the majority,

however, when it fails to apply that holding.

¶99 Like the unanimous court of appeals, I conclude that

the "occurrence" here is the event of an assault. The insurance

policy defines an "occurrence" as an "accident."

¶100 Applying the proper analysis, the question then

becomes whether the assault of Schinner by the assailant was an

"accident" from the standpoint of Gundrum, the insured? As even

the majority acknowledges, there is nothing in the record that

suggests that Gundrum intended the assault or any subsequent

injury to Schinner. See id., ¶67. Accordingly, when viewed

from the standpoint of the insured, the assault was unintended

and was an "accident," constituting an "occurrence" under the

policy.

¶101 Instead of identifying the assault as an "occurrence,"

the majority's analysis simply ignores it. Rather than

analyzing an "occurrence" from the standpoint of the insured, it

develops a different test, conflating a discussion of negligence

principles with the analysis required to interpret an undefined

word in an insurance policy. Ultimately, its analysis

undermines the well-established understanding that an

intentional act by an insured is within the definition of an

"occurrence" if the injury is unexpected and unintended.
No. 2011AP564.awb

2

¶102 In contrast to the majority, I conclude that the

assault is an "occurrence" for the purposes of coverage and I

further conclude that the non-insured location exclusion does

not apply under these circumstances. As a result, the relevant

insurance policy provides coverage for damages arising from

Schinner's injuries. Accordingly, I respectfully dissent.

I

¶103 The Second Amended Complaint filed in this case

identifies the assault as the occurrence. It alleges that

Schinner was "kicked . . . in the head [by the assailant],

causing permanent paralysis." The claims alleged against

Gundrum sound in negligent supervision, negligence in failing to

protect Schinner, and negligence as a matter of law.

1

1 Specifically, Schinner alleged a violation of Wis. Stat.

§ 125.035, which is commonly known as the "dram shop" law. It

provides, in relevant part:

(2) A person is immune from civil liability arising

out of the act of procuring alcohol beverages for or

selling, dispensing or giving away alcohol beverages

to another person.

. . . .

(4)(a) In this subsection, "provider" means a person,

including a licensee or permittee, who procures

alcohol beverages for or sells, dispenses or gives

away alcohol beverages to an underage person in

violation of s. 125.07(1)(a).

(b) Subsection (2) does not apply if the provider knew

or should have known that the underage person was

under the legal drinking age and if the alcohol

beverages provided to the underage person were a

substantial factor in causing injury to a 3rd party.

In determining whether a provider knew or should have

known that the underage person was under the legal

drinking age, all relevant circumstances surrounding
No. 2011AP564.awb

3

¶104 Recognizing that identifying the event that should be

considered the "occurrence" is critical to the coverage

analysis, the majority jettisons the allegation of an

"occurrence" stated in the Second Amended Complaint and asks

what is "the injury-causing event in this case?" Majority op.,

¶66. It answers the question by pointing to a course of conduct

by Gundrum that allegedly was a cause of Schinner's bodily

injury and accordingly shifts its focus to Gundrum's acts as the

apparent "occurrence" without further discussion of the assault.

Id.

¶105 The remainder of the majority's analysis is fixed upon

developing a new objective test that examines remote theories of

legal causation and events that occurred up the chain of

causation. It states that "Gundrum took a number of intentional

actions that ultimately caused Schinner's bodily injury." Id.,

¶68. Ultimately, it concludes that "Gundrum's many intentional

acts were a substantial factor in causing Schinner's bodily

injury." Id., ¶69.

the procuring, selling, dispensing or giving away of

the alcohol beverages may be considered . . . .
No. 2011AP564.awb

4

¶106 Gundrum's alleged negligent acts are repeatedly

characterized as "intentional" and "illegal."

2 See id., ¶¶69,

70, 81. The majority takes Gundrum to task for failing to

foresee Schinner being injured in an assault, stating that

Schinner's "bodily injury was hardly unforeseeable." Id., ¶70.

Because his acts were both "intentional" and "illegal" and

because he should have foreseen a risk of harm, the majority

concludes that there was no "accident," and thus no

"occurrence." Id., ¶81.

II

¶107 At the outset, I observe that if the majority actually

applied a "from the standpoint of the insured" test, it would be

compelled to conclude that there is an initial grant of

coverage. Guided by public policy, however, it instead

concludes that there should be no insurance coverage for hosting

an illegal underage drinking party.

2 In order to determine whether the relevant homeowner's

policy sets forth an initial grant of coverage for the claims

presented, the coverage must be compared to the allegations

advanced in the Second Amended Complaint. This is the first

step of a coverage determination——the court must examine the

facts of the insured's claim to determine whether the policy's

insuring agreement makes an initial grant of coverage. Estate

of Sustache v. Am. Family Mut. Ins. Co., 2008 WI 87, ¶22, 311

Wis. 2d 548, 751 N.W.2d 845. If the facts do not fall within

the initial grant of coverage, the analysis ends there. Id.

The Second Amended Complaint does not once use the word

"intentional," whether in reference to Gundrum or in reference

to the third-party assailant. It likewise makes no allegation

that Gundrum in fact foresaw that a fight would occur, or that a

fight was substantially certain to occur as a result of his

acts.
No. 2011AP564.awb

5

¶108 In its quest to avoid "sending the wrong message"

about underage drinking parties, the majority looks at the wrong

policy. Majority op., ¶80. Instead of looking at public

policy, it should be looking at the policy of insurance.

¶109 This homeowner's policy has a broad grant of coverage.

To narrow that coverage, the insurer in this case had available

to it several standard exclusions that are relevant here:

• An underage drinking exclusion;

3

• An illegal acts exclusion;

4

• An intentional acts exclusion.

5

¶110 Despite the availability of those exclusions, the

insurer chose not to include them in the Gundrums' homeowner's

insurance policy or assert them as a defense to coverage. As a

result of those deficits, the majority is forced to look

elsewhere for support of its public policy determination. It is

not the court's role in this case to send a policy message,

3 A standard underage drinking exclusion would provide that

"[w]e will not cover bodily injury . . . arising out of the

insured's knowingly permitting or failing to take action to

prevent the illegal consumption of alcoholic beverages by an

underage person." 1 Susan J. Miller, Miller's Standard

Insurance Policies Annotated 238.3 (Form HOEX) (6th ed. 2012).

4 A standard illegal acts exclusion would negate coverage

for "bodily injury . . . caused by violation of a penal law or

ordinance committed by or with knowledge or consent of the

insured." 1 Susan J. Miller, Miller's Standard Insurance

Policies Annotated 238.3 (Form HOEX) (6th ed. 2012).

5 The intentional acts exclusion in the Gundrums'

homeowner's policy, which was not asserted as a coverage defense

here, precludes coverage for bodily injury "which is expected or

intended" by an insured even if the resulting bodily injury is

"of a different kind, quality or degree than initially expected

or intended . . . ."
No. 2011AP564.awb

6

right or wrong, about underage drinking parties or to determine

whether Gundrum should "escape responsibility" under these

facts. Majority op., ¶80. It is this court's role to interpret

the insurance policy——the written contract entered into by the

parties.

¶111 I turn next to discuss the primary flaws in the

majority's opinion. Its analysis: (a) ignores the need to

analyze the assault as an "occurrence," (b) develops a new

objective test that conflates principles of negligence with the

analysis required to interpret an undefined word in an insurance

policy, and (c) undermines the well-established premise that

intentional acts constitute an "occurrence" if the injury is

unexpected or unintended.

A

¶112 The majority's public policy focus leads it to ignore

the assault as an "occurrence." Contrary to what the majority

implies when it sets up a question setting forth two potential

occurrences, whether an "occurrence" exists under a set of

alleged facts is not an either-or proposition requiring the
No. 2011AP564.awb

7

court to choose between Gundrum's acts and the assault.

6 An

"occurrence" in this case is easily identified. As the court of

appeals unanimously recognized, the assault itself is the

correct focus of the "occurrence" when viewed from the

standpoint of Gundrum. Schinner v. Gundrum, 2012 WI App 31,

¶22, 340 Wis. 2d 195, 811 N.W.2d 431.

¶113 Our prior precedent recognizes that an intentional

assault by a third party can constitute an "occurrence." In

Estate of Sustache v. Am. Family Mut. Ins. Co., 2008 WI 87, 311

Wis. 2d 548, 751 N.W.2d 845, this court was called upon to

determine whether an intentional assault by an insured was an

"occurrence," defined as an "accident." Although the court

determined that the assault was not an "occurrence," Estate of

6 Courts are to examine the factual circumstances alleged in

the complaint to determine whether an "occurrence" exists. See,

e.g., Doyle v. Engelke, 219 Wis. 2d 277, 284-285, 580 N.W.2d 245

(1998)("An insurer has a duty to defend a suit where the

complaint alleges facts which, if proven at trial, would give

rise to the insurer's liability under the terms of the

policy."); Smith v. Katz, 226 Wis. 2d 798, 807, 595 N.W.2d 345

(1999) ("The insurer's duty arises when the allegations in the

complaint coincide with the coverage provided by the policy.");

United Co-op v. Frontier FS Co-op., 2007 WI App 197, ¶15, 304

Wis. 2d 750, 738 N.W.2d 578 (courts are to look to whether "some

alleged event" was an "occurrence"); Glendenning's Limestone &

Ready-Mix Co., Inc. v. Reimer (Glendenning's), 2006 WI App 161,

¶37, 295 Wis. 2d 556, 721 N.W.2d 704 ("we are to look at the

factual circumstances of the claim to decide whether there is an

'occurrence' under the policy . . . ."); 1325 North Van Buren,

LLC v. T-3 Group, Ltd., 2006 WI 94, ¶58, 293 Wis. 2d 410, 716

N.W.2d 822 ("We have repeatedly rejected the argument that

insurance coverage is dependent upon the theory of liability.").

The allegations are to be liberally construed in favor of

coverage. Glendenning's, 295 Wis. 2d 556, ¶41.
No. 2011AP564.awb

8

Sustache is distinguishable because the insured in that case was

the assailant and intentionally caused the damage. Id., ¶31.

¶114 Further context is found in the analysis of this court

in Stuart v. Weisflog's Showroom Gallery, Inc., 2008 WI 86, 311

Wis. 2d 492, 753 N.W.2d 448. The Stuart court observed that

courts must "focus on the incident or injury that gives rise to

the claim, not the plaintiff's theory of liability." Id., ¶36

(quoting Berg v. Schultz, 190 Wis. 2d 170, 177, 526 N.W.2d 781

(Ct. App. 1994)).

7 In this case, the assault is an incident that

gave rise to the claims at issue.

¶115 The above cases counsel that when viewed from

Gundrum's standpoint, the "occurrence" is the assault on

Schinner. Couch on Insurance further supports that the assault

in this case is an "occurrence" under the policy. It explains

that when the insured is not an assailant in a claim involving

an assault, the assault can constitute an "occurrence" when

viewed from the standpoint of the insured:

If the insured is also the assailant, the result is

that there is no coverage for the assault. . . .

However, where the insured is not the assailant but is

instead liable based upon vicarious liability,

negligent supervision, or some other negligence

7 Most recently, the court of appeals in Henshue Const.,

Inc. v. Terra Engineering & Const. Corp., slip op., no.

2012AP1038 (Ct. App. May 9, 2013) analyzed whether flood damage

caused by the insured "deliberately" cutting into a storm sewer

pipe without providing means for storm water diversion was an

"occurrence." The Henshue Const., Inc. court cautioned that

"the correct 'occurrence' question is whether the event that

caused the damage, that is, the flooding event resulting from

[the insured's] failure to divert storm water, was an accident."

Id., ¶¶60-61. Thus, the flooding event was an "occurrence."

Id., ¶62.
No. 2011AP564.awb

9

theory, the assault may constitute an accident or

occurrence, at least from the standpoint of the

insured.

Lee R. Russ & Thomas F. Segalla, Couch on Insurance § 127:21 (3d

ed. 2012).

¶116 The majority fails to explain why the assault is not

an "occurrence" when viewed from the standpoint of the insured.

Instead of analyzing the assault as the "occurrence," it is

simply ignored.

B

¶117 Furthermore, the majority develops a test that

conflates a discussion of negligence principles with the

analysis required to interpret the undefined word, "accident,"

in an insurance policy. In developing that test, it introduces

concepts that are superficially compelling, but which really do

not, or should not, drive its analysis.

¶118 The majority appears to analyze this case with an

objective test in mind, looking at whether the resulting injury

or damage was reasonably foreseeable to a reasonable person.

That analysis is irrelevant. As the majority recognized at the

outset, the question to ask is: "Did this insured expect or

intend the injury or property damage?"

¶119 When applying the wrong test, the majority takes

Gundrum to task for failing to foresee a fight. It appears to

conclude that a failure to anticipate or foresee a foreseeable

risk of harm is not an "accident." Majority op., ¶71. Yet,

injury or damage that should have been anticipated or foreseen
No. 2011AP564.awb

10

but was not is the very essence of negligence.

8 Such a test

conflates negligence principles with the concept of what

constitutes an "accident" when interpreting this insurance

policy.

¶120 Negligence is defined as when "the person, without

intending to do harm, does something . . . that a reasonable

person would recognize as creating an unreasonable risk of

injury or damage to a person or property." Wis. JI-Civil 1005

(2013). In concluding that failure to anticipate or foresee

harm here is not an "accident," the majority is really declaring

that because negligent behavior is non-accidental, it is not

covered by insurance liability policies. That makes no sense

because the very reason people buy liability insurance is to

cover them for their negligent acts.

¶121 In contrast, when interpreting the undefined word

"accident" in a liability insurance policy, we often look to

precedent for guidance. This court has set forth a definition

of the term "accident": "'[a]n unexpected, undesirable event' or

'an unforeseen incident' which is characterized by a 'lack of

intention.'" Doyle v. Engelke, 219 Wis. 2d 277, 289, 580 N.W.2d

245 (1998). The definition of an "accident" by its nature

8 Cirillo v. City of Milwaukee, 34 Wis. 2d 705, 711, 150

N.W.2d 460 (1967) (there is no necessity in establishing

negligence that the actual harm was foreseen); see also Behrendt

v. Gulf Underwriters Ins. Co., 2009 WI 71, ¶¶29-31, 318 Wis. 2d

622, 768 N.W.2d 568 (discussing foreseeability); Rockweit v.

Senecal, 197 Wis. 2d 409, 423, 541 N.W.2d 742 (1995)

("Negligence is to be determined by ascertaining whether the

defendant's exercise of care foreseeably created an unreasonable

risk of harm to others.").
No. 2011AP564.awb

11

encompasses foreseeable events that were not in fact foreseen by

the insured.

¶122 The Doyle court recognized that most negligence is

accidental for the purposes of interpreting an insurance policy,

stating that liability policies are "designed to protect an

insured against liability for negligent acts resulting in damage

to third-parties." Id. at 290 (citations omitted). In short,

our prior precedent recognizes that we buy insurance to cover us

when we are negligent.

¶123 The majority's focus on the fact that Gundrum should

have anticipated or foreseen that "something undesirable" might

occur is inconsistent with the definition of an "accident" set

forth in Doyle.

9 Majority op., ¶71 (emphasis in original). An

"accident" is an unforeseen event that causes injury or damage——

not an unforeseeable risk of harm that causes injury or damage.

¶124 To the extent the majority opinion can be read to

state that a risk of harm that should have been anticipated or

foreseen is not an "accident" even when the risk in fact is

unanticipated and unforeseen, it has rendered liability coverage

illusory in many circumstances. Defining the word "accident" so

narrowly "so greatly restricts the insurer's liability as to

render the policy valueless or even meaningless, and denies

9 The definition of an "accident" set forth in Doyle

likewise focuses on a failure to foresee a specific harmful

event rather than a failure to foresee general risk of harm. It

requires an "unexpected . . . event" or "unforeseen incident,"

not an unexpected or unforeseen risk of an injurious event or

incident. Doyle v. Engelke, 219 Wis. 2d 277, 289, 580 N.W.2d

245 (1998).
No. 2011AP564.awb

12

coverage for what is the predicate of any likely liability

against the insured." J. P. Ludington, Liability Insurance:

"Accident" or "Accidental" as Including Loss Resulting From

Ordinary Negligence of Insured or his Agent, 7 A.L.R.3d 1262,

§ 2 (1966).

C

¶125 Ultimately, the majority's analysis undermines the

well-established understanding that an intentional act by an

insured is within the definition of an "occurrence" if the

injury or damage is unexpected and unintended. Multiple

treatises discussing general principles of insurance law explain

that an "occurrence" exists if the injury or damage is

unexpected and unintended.

¶126 One treatise provides that the "vast majority of

decisions" have held that "intentional conduct can constitute an

accident if the insured did not intend or expect to cause

injury." Allan D. Windt, Insurance Claims & Disputes:

Representation of Insurance Companies & Insureds, § 11:3 (2013).

It sets forth the straightforward rule embraced by the "vast

majority of decisions" as follows:

The correct analysis is as follows. An "occurrence"

is defined in a typical general liability policy as an

"accident." The word "accident" must be given its

ordinary, dictionary definition, and the ordinary,

dictionary definition of "accident" is a happening

that occurs unintentionally. Accordingly, damage that

the insured intended——including . . . damage that is

inherent or substantially certain to result——is not

covered. Damage that the insured did not intend is

covered . . . . In fact . . . damage that the insured

did not intend is covered regardless of whether the

insured's act was volitional. A standard insuring
No. 2011AP564.awb

13

agreement requires only that the property

damage/bodily injury have been caused by an

occurrence/accident. It is enough if the

damage/injury "occurs unintentionally" by reason of

something that the insured has done.

Id. In an admonition that should give the majority pause, it

further states that courts should "[k]eep in mind" that "under

standard policy language, the "occurrence" is not limited to

actions taken by the insured, but includes any event that causes

injury/damage during the policy period." Id.

¶127 Another treatise observes that courts ordinarily

examine "whether the insured intends or expects the results of

its conduct, not necessarily whether the insured intends or

expects the conduct itself, to determine whether there is an

'occurrence' . . . ." 1 New Appleman Law of Liability

Insurance, § 1.09[1] (2d ed. 2012). Yet another states that "in

order for a claim to be actionable under a liability policy, the

insured's negligence must result in an 'accident' . . . [t]he

word 'accident' implies a misfortune with concomitant damage to

a victim, and not the negligence which eventually results in

that misfortune." Lee R. Russ & Thomas F. Segalla, Couch on

Insurance § 126:26 (3d ed. 2012). Many jurisdictions have

accordingly focused on whether the injury or damages were

unexpected and unintended. See J.P. Luddington, Liability

Insurance: "Accident" or "Accidental" as Including Loss

Resulting From Ordinary Negligence of Insured or his Agent, 7

A.L.R.3d 1262 (1966).

¶128 This court has long adhered to the principle that

insurance policies are to be interpreted as understood by a
No. 2011AP564.awb

14

reasonable person in the position of the insured. Frost v.

Whitbeck, 2002 WI 129, ¶20, 257 Wis. 2d 80, 654 N.W.2d 225. A

reasonable person in the position of the insured understands the

word "accident" to encompass unexpected and unintended injuries

or damages. See Doyle, 219 Wis. 2d 277, 289 (ascribing the

"common, everyday meaning" to the word "accident").

¶129 The majority's analysis not only appears to

require unexpected and unintended injury or damage, but also

that the acts of the insured non-assailant must be

unintentional. Majority op., ¶68. Such a requirement appears

to eliminate coverage anytime an insured acts with intention,

regardless of whether the injury or damage is unexpected and

unintended.

10

10 The majority's citation to Frankenmuth Mut. Ins. Co. v.

Masters (Masters), 595 N.W.2d 832 (Mich. 1999) affords it no

assistance for two reasons. First, the facts of that arson case

are different from those in this case. In Masters, the insured

and his son intentionally set fire to their own clothing store

so as to destroy inventory and collect the insurance proceeds.

Id. at 835. Here, Gundrum is not a participant in anything

similar to an insurance scam. The majority errs in making such

a comparison.
No. 2011AP564.awb

15

¶130 In determining that there is no coverage under the

insurance policy, the majority fails to apply its holding that

the determination of what constitutes an "occurrence" is to be

analyzed from the standpoint of the insured. Instead it simply

ignores the assault as an "occurrence," develops an objective

test that conflates a discussion of negligence principles with

the analysis required to interpret an undefined word in an

insurance policy, and undermines the well-established

understanding that an intentional act by an insured is within

the definition of an "occurrence" if the injury or damage is

unexpected and unintended. By failing to apply its holding, the

majority is led astray.

III

Second, the majority does not capture the Masters court's

complete analysis. It reasoned that "[o]f course, 'an insured

need not act unintentionally' in order for the act to constitute

an 'accident' and therefore an 'occurrence.'" Id. at 838-39.

To illustrate its analytical framework, it gave an example of a

fire that was started by a faulty electric cord on a coffeemaker

owned by the insured. Id. at 839 (quotation omitted). It

stated that "there is no doubt that [the insured] purposely

plugged in the coffeemaker and turned on the switch," and acted

"intentionally." Id. (quotation omitted.) Nevertheless, "[t]he

fire remains an accident and the act constitutes an

occurrence . . . because at the time of the insured's purposeful

act he had no intent to cause harm. The act of plugging in the

coffeepot is not a sufficiently direct cause of the harm, and

the fire in this example is an accident." Id. (quotation

omitted.)

Thus, Masters not only does not help the majority, it

undermines the analysis. Masters counsels in favor of finding

an "occurrence" in this case. Gundrum is not like the insured

that intentionally set a fire hoping to cause damage and thereby

collect insurance proceeds. Instead he is like the insured who

plugged in a faulty coffeepot——he had no intent to cause harm,

and the assault is an accident from his standpoint. Id.
No. 2011AP564.awb

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¶131 Even though the majority's coverage analysis should

end with its determination that there is no coverage, it

nevertheless proceeds to analyze whether coverage should be

denied because of an exclusion for bodily injury or property

damage liability "arising out of a premises" that is not an

insured location. Majority op., ¶¶82, 83. The majority

concludes for the second time that there is no coverage.

¶132 In contrast to the majority, I apply the tried and

true principles of coverage examination and conclude that

coverage is not excluded by the non-insured location exclusion.

I look first to determine whether there is a grant of coverage.

Estate of Sustache, 311 Wis. 2d 548, ¶22. If there is a grant

of coverage under the facts alleged, I must determine whether an

exclusion applies. Id., ¶23. If an exclusion applies, I then

must determine whether an exception to the exclusion reinstates

coverage. See id.

¶133 The Gundrums' homeowner's policy provides coverage for

"bodily injury" or "property damage" that is "caused by an

'occurrence.'" It provides a basic grant of coverage in which

the insurer agreed to pay all sums that Gundrum is legally

obligated to pay as damages because of bodily injury or property

damage caused by an "occurrence":

If a claim is made or a suit is brought against an

"insured" for damages because of "bodily injury" or

"property damage" caused by an "occurrence" to which

this coverage applies . . . .

¶134 An "occurrence" is defined as "an accident, including

continuous or repeated exposure to substantially the same

general harmful conditions," but the word "accident" is not
No. 2011AP564.awb

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defined in the policy. This basic grant of coverage is

substantially similar to countless standardized "occurrence"-

based liability insurance policies that are purchased by

individuals and businesses throughout the state. See 1 New

Appleman Law of Liability Insurance, § 1.07[2] (2d ed. 2012).

¶135 In order to fall within the grant of coverage, the

Second Amended Complaint must allege facts showing that

Schinner's bodily injury was caused by an "occurrence," which is

defined as an "accident." For the reasons discussed above, I

conclude that the assault was an "occurrence" when viewed from

Gundrum's standpoint. Because the assault was an "occurrence,"

the allegations in the Second Amended Complaint fall within the

policy's grant of coverage.

¶136 Having determined that the assault is an "occurrence,"

the next step is to determine whether an exclusion applies.

Estate of Sustache, 311 Wis. 2d 548, ¶23. The only exclusion

argued to apply in this case is a non-insured location

exclusion, which excludes bodily injury "arising out of a

premises" that is not an "insured location."

11 An "insured

location" is defined in part as "[t]he residence premises," the

"part of other premises, other structures and grounds used by

you as a residence," and any premises used by the insured "in

connection" with the premises described in the policy.

¶137 The court of appeals in Newhouse v. Ladig, Inc., 145

Wis. 2d 236, 426 N.W.2d 88 (Ct. App. 1988) addressed the same

11 There is no liquor liability exclusion in the Gundrums'

policy. Likewise, no one argues that an exclusion precluding

coverage for intentional acts applies.
No. 2011AP564.awb

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issue before this court today——what is the meaning of the phrase

"arising out of a . . . premises." Its analysis is instructive

in evaluating whether the non-insured location exclusion applies

in this case.

¶138 Under the interpretation adopted in Newhouse, the noninsured location exclusion applies to bodily injuries "related

to conditions of the premises on which an accident or occurrence

takes place." Id. at 239. It does not, however, apply to

"insureds' tortious acts occurring on uninsured lands." Id.

The ultimate test for whether there was bodily injury or

property damage "arising out of a . . . premises" is "whether

there is some correlation between the negligence giving rise to

liability and a condition of the premises."

12 Id. at 240.

¶139 Thus, under Newhouse, the facts alleged must indicate

that there was some correlation between Gundrum's negligence

giving rise to liability and a condition of the premises on

which the assault occurred. Here, however, no condition of the

shed itself or the surrounding premises is alleged to correlate

with Gundrum's alleged negligence. The only arguable

correlation between Gundrum's alleged negligence and the shed is

that Gundrum's alleged negligence occurred at an underage

12 In interpreting a non-insured location exclusion, the

Newhouse court relied upon Wisconsin's "policy of strictly

interpreting exclusionary clauses." 145 Wis. 2d at 242. It

observed that "if the [insurance] company had intended to

geographically limit coverage for tortious personal conduct, 'it

could simply have provided that the exclusion ran to an accident

'occurring on' other owned premises.'" Id. (quotation omitted).
No. 2011AP564.awb

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drinking party hosted by Gundrum on the premises where the shed

was located.

¶140 Such a tenuous connection to the premises is not

enough to fall within the non-insured location exclusion. The

Newhouse court soundly rejected the argument that tortious acts

occurring on a non-insured premises are excluded from coverage:

It makes no difference whether the insured owns the

premises on which his tortious act takes place. Under

the policy's terms, there is floating coverage for the

insured's tortious personal acts wherever he might be.

The dispositive issue is therefore whether there is

some correlation between the negligence giving rise to

liability and a condition of the premises.

Id. at 240. Like Newhouse, it makes no difference here that the

alleged tortious acts merely occurred on a non-insured premises.

The exclusion is therefore inapplicable and no analysis of any

exceptions to the exclusion is required. Estate of Sustache,

311 Wis. 2d 548, ¶23.

¶141 Because facts alleged in the Second Amended Complaint

fall within the policy's grant of coverage and because coverage

is not excluded by the non-insured location exclusion, I

conclude that the homeowner's policy provides coverage in this

case. Accordingly, I respectfully dissent.

¶142 I am authorized to state that CHIEF JUSTICE SHIRLEY S.

ABRAHAMSON joins this dissent. I am also authorized to state

that JUSTICE N. PATRICK CROOKS joins Part II of this dissent.
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