Title: Jamie Vandenberg v. The Continental Insurance Company
Citation: 2001 WI 85
Docket Number: 1999AP003193
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: July 3, 2001

2001 WI 85 
 
SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
99-3193 
 
 
Complete Title 
of Case: 
 
Jamie Vandenberg,  
 
Plaintiff-Appellant, 
 
v. 
The Continental Insurance Company,  
 
Defendant-Third-Party Plaintiff-Respondent, 
Leonard Riehl and Stephanie L. Riehl,  
 
Defendants-Co-Appellants, 
Dumke Insurance and Financial Services, Inc. and 
Curt C. Fritz,  
 
Third-Party Defendants-Co-Appellants.  
 
 
ON CERTIFICATION FROM THE COURT OF APPEALS 
 
 
Opinion Filed: 
July 3, 2001 
Submitted on Briefs: 
      
Oral Argument: 
April 11, 2001 
 
 
Source of APPEAL 
 
COURT: 
Circuit 
 
COUNTY: 
Outagamie 
 
JUDGE: 
Dee R. Dyer 
 
 
JUSTICES: 
 
Concurred: 
      
 
Dissented: 
WILCOX, J., dissents (opinion filed). 
 
 
CROOKS and PROSSER, J.J., join dissent. 
 
Not Participating:       
 
 
ATTORNEYS: 
For the plaintiff-appellant there were briefs by 
Christopher H. Evenson and Sigman, Janssen, Stack, Wenning, 
Sewall & Pitz, Appleton, and oral argument by Christopher H. 
Evenson. 
 
 
For the defendants-co-appellants there were 
briefs (in the court of appeals) by Keith W. Kostecke and Menn, 
 
2 
Nelson, Sharratt, Teetaert & Beisenstein, Ltd., Appleton. 
 
 
For the third-party defendants-co-appellants 
there were briefs (in the court of appeals) by Bruce A. Olson and 
Olson Law Group, LLC, Appleton, and oral argument by Bruce A. 
Olson. 
 
 
For the defendant-third-party plaintiff-
respondent there was a brief by Eric J. Magnuson, Daniel Q. 
Poretti, Jeanne A. Unger and Rider, Bennett, Egan & Arundel, LLP, 
Minneapolis, and oral argument by Jeanne A. Unger. 
 
2001 WI 85 
 
NOTICE 
This opinion is subject to further editing and 
modification.  The final version will appear 
in the bound volume of the official reports. 
 
 
No. 99-3193 
 
STATE OF WISCONSIN                    :  
  IN SUPREME COURT 
 
 
Jamie Vandenberg,  
 
          Plaintiff-Appellant, 
 
     v. 
 
The Continental Insurance Company,  
 
          Defendant-Third-Party Plaintiff- 
          Respondent, 
 
Leonard Riehl and Stephanie L. Riehl,  
 
          Defendants-Co-Appellants, 
 
Dumke Insurance and Financial Services,  
Inc. and Curt C. Fritz,  
 
          Third-Party Defendants-Co- 
          Appellants. 
 
 
Appeal from an order of the Circuit Court for Outagamie 
County, Dee R. Dyer, Judge.  Reversed and cause remanded. 
 
¶1 
SHIRLEY S. ABRAHAMSON, CHIEF JUSTICE.  This is a 
review of an appeal from a judgment of the Circuit Court for 
Outagamie County, Dee R. Dyer, Circuit Court Judge.  The appeal 
is before this court on certification from the court of appeals 
pursuant to Wis. Stat. (Rule) § 809.61 (1999-2000).  
FILED 
 
JUL 3, 2001 
 
Cornelia G. Clark 
Clerk of Supreme Court 
Madison, WI 
 
 
 
 
 
No. 
99-3193 
 
 
2 
¶2 
Infant Justin Vandenberg, while in a day care center 
operated by Stephanie Riehl, suffocated to death.  The plaintiff, 
Jamie Vandenberg, Justin's mother, sued Leonard Riehl and 
Stephanie L. Riehl and their insurer, The Continental Insurance 
Company, alleging Stephanie Riehl's negligent supervision and 
control of her five-year-old child, who allegedly caused harm to 
Justin.  Two issues are presented: (1) Does a day care provider's 
allegedly negligent supervision and control of her own child 
while providing day care services for other children fall, as a 
matter of law, within the "usual to non-business pursuits" 
exception to the "business pursuits" exclusion in a renter's 
insurance policy? (2) Are there material issues of fact from 
which a trier of fact could conclude that the Riehls were 
entitled to reformation of their renter's insurance policy to 
include day care coverage?  
¶3 
The 
circuit 
court 
granted 
summary 
judgment 
to 
Continental Insurance, holding that the Riehls were not entitled 
to insurance coverage for the death of Justin Vandenberg and that 
the Riehls were not entitled to reformation of their renter's 
insurance policy to include coverage for their day care business. 
¶4 
We reverse that part of the summary judgment in favor 
of Continental Insurance that the Riehls were not entitled to 
insurance coverage for the death of Justin Vandenberg.  We direct 
the circuit court to grant the plaintiff's motion for a 
declaratory judgment, concluding that the Riehls' supervision and 
control of their son falls within the "usual to non-business 
No. 
99-3193 
 
 
3 
pursuits" exception to the "business pursuits" exclusion of the 
policy.  
¶5 
Additionally, we reverse that part of the judgment of 
the circuit court granting summary judgment to Continental 
Insurance that the Riehls are not entitled to reformation of 
their renter's insurance policy to cover their home day care 
business.  Accordingly, we remand the cause to the circuit court 
for further proceedings not inconsistent with this opinion.1 
                     
1 The Continental Insurance Company filed a third-party 
claim against Dumke Insurance and Financial Services, Inc., an 
insurance agency, and its employee, Curtis C. Fritz, alleging 
that Fritz was negligent in completing the Riehls' application 
for renter's insurance or in failing to comply with Continental 
Insurance's instructions, or both.  In particular, Continental 
Insurance alleges that it would have rejected the Riehls' 
application if it had known that the Riehls wanted liability 
coverage for their home day care operation.  Continental 
Insurance 
requests 
indemnification 
from 
Dumke 
Insurance 
Services, if Continental Insurance is required to provide 
coverage to the Riehls for the plaintiff's claim for Stephanie 
Riehl's negligent supervision and control of her own child.   
 
 
The Riehls cross-claimed against Dumke Insurance Services 
and Fritz, alleging that Fritz was negligent in completing the 
Riehls' application.  Although the Riehls did not request 
liability coverage for the daycare operation, they contend that 
Fritz should have asked whether the Riehls wanted daycare 
coverage since a prior policy issued through Dumke Insurance 
Services included liability coverage for the daycare operation. 
 The Riehls allege that Fritz's negligence in failing to acquire 
appropriate 
insurance 
entitles 
them 
to 
reformation 
of 
Continental Insurance's policy or, in the alternative, to 
indemnification from Dumke Insurance Services. 
 
 
In its brief opposing Continental Insurance's motion for 
summary judgment, Dumke Insurance Services asserted that if the 
circuit court granted summary judgment to Continental Insurance 
on the issue of reformation, Dumke Insurance Services would be 
entitled to summary judgment on both Continental Insurance's 
third-party claim and the Riehls' cross-claim.   
No. 
99-3193 
 
 
4 
 
I 
 
¶6 
An appellate court reviews a circuit court's grant of 
summary judgment independently of the circuit court, benefiting 
from its analysis.  Lambrecht v. Estate of Kaczmarczyk, 2001 WI 
25, ¶21, 241 Wis. 2d 804, 623 N.W.2d 751.  Summary judgment is 
properly granted when there are no disputed issues of material 
fact and the moving party is entitled to judgment as a matter of 
law. Lambrecht, 2001 WI 25 at ¶24. 
 
II 
                                                                  
 
The circuit court granted Continental Insurance's motion for 
summary judgment on reformation but denied Dumke Insurance 
Services' motion for summary judgment dismissing all claims 
against it, as well as its subsequent motion for reconsideration. 
 Dumke Insurance Services petitioned the court of appeals for 
leave to appeal this non-final judgment.  The court of appeals 
denied Dumke Insurance Services' petition. Accordingly, this 
aspect of the cause is not before this court; it is before the 
circuit court.   
 
However, the circuit court's denial of Dumke Insurance 
Services' motion for summary judgment is relevant to Dumke 
Insurance 
Services' 
arguments 
regarding 
reformation. 
Dumke 
Insurance Services contends that the circuit court could not have 
denied its motion for summary judgment unless it found that there 
was a disputed issue of material fact as to whether the Riehls 
had requested day care coverage.  Dumke Insurance Services 
further contends that if there is a factual issue as to whether 
the Riehls requested day care coverage, the circuit court erred 
in granting Continental Insurance's motion for summary judgment 
on the issue of reformation.  We discuss the reformation issue in 
part III of this opinion. 
 
No. 
99-3193 
 
 
5 
 
¶7 
We turn to the first issue.  For purposes of the motion 
for summary judgment relating to the renter's insurance policy 
coverage, the facts are not in dispute.  On December 16, 1997, 
Stephanie Riehl was providing paid day care in her home for three 
children, one of whom was eight-month-old Justin Vandenberg.  She 
was simultaneously caring for her own three children, including 
five-year-old Jason.   
¶8 
Sometime in the afternoon, Stephanie Riehl brought 
Justin to her upstairs bedroom for a nap.  She secured Justin in 
a child seat and placed the seat on the floor of the bedroom.  
While Stephanie Riehl was caring for the remaining children 
downstairs, her son Jason went upstairs to her bedroom to watch 
television.  Jason placed several pillows over Justin in an 
attempt to avoid waking him.2  When Stephanie Riehl returned to 
check on Justin, she discovered that he had suffocated. 
¶9 
Jamie Vandenberg, Justin's mother, filed suit against 
the Riehls, alleging both negligent supervision of Justin and 
negligent supervision of their own son.  The Continental 
Insurance Company, which had issued a renter's insurance policy 
to the Riehls, was also named as a defendant. 
¶10 Jamie Vandenberg, the plaintiff, moved for declaratory 
judgment that her claim against the Riehls for the negligent 
                     
2 Wisconsin Stat. § 891.44 (1999-2000) states that "[i]t 
shall be conclusively presumed that an infant minor who has not 
reached the age of 7 shall be incapable of being guilty of 
contributory negligence or of any negligence whatsoever." 
No. 
99-3193 
 
 
6 
supervision of their own son was covered by the Continental 
Insurance policy under the "usual to non-business pursuits" 
exception to the "business pursuits" exclusion.  Continental 
Insurance moved for summary judgment dismissing itself from the 
action alleging that as a matter of law, the plaintiff's claims 
against the Riehls fell within the "business pursuits" exclusion 
to the insurance policy but did not fall within the "usual to 
non-business pursuits" exception to that exclusion.   
¶11 The circuit court granted Continental Insurance's 
motion for summary judgment, dismissing Continental Insurance 
from 
the 
action, 
and 
denied 
the 
plaintiff's 
motion 
for 
declaratory judgment.  The circuit court concluded that the 
"usual to non-business pursuits" exception to the "business 
pursuits" exclusion did not apply to the plaintiff's claim 
because the Riehls' usual non-business pursuit of supervising 
their own son was tainted by their home day care business. 
¶12 The plaintiff and the Riehls appealed from the circuit 
court's summary judgment in favor of Continental Insurance. 
¶13 To determine whether the plaintiff's claim falls into 
the "usual to non-business pursuits" exception to the "business 
pursuits" exclusion in the renter's insurance policy, we begin 
by looking at the policy language.  
¶14 The 
renter's 
insurance 
policy 
excludes 
"business 
pursuits" from liability coverage, but excepts from "business 
pursuits" those activities that are "usual to non-business 
pursuits."  Thus the policy insures for bodily injury arising 
out of business pursuits so long as the bodily injury arises out 
No. 
99-3193 
 
 
7 
of activities that are usual to non-business pursuits.  The 
exclusion and exception provisions in the policy read as 
follows:  
 
I. 
Personal Liability and Medical Expense do not 
apply to bodily injury or property damage: 
 
 . . .  
 
j. 
Arising out of business pursuits of you or any 
covered person.  This exclusion does not apply to: 
 
 
(1) 
Activities 
which 
are 
usual 
to 
non-business 
pursuits . . . . 
 
¶15 The policy language defining "business" explicitly 
states that a home day care business is considered a business 
pursuit.  The circuit court concluded, and the parties agree, 
that the Riehls' day care operation was a "business pursuit." 
¶16 The legal issue in dispute is whether Stephanie 
Riehl’s care of her own five-year-old child while operating a 
home day care business is an activity that is "usual to non-
business 
pursuits" 
excepted 
from 
the 
"business 
pursuits" 
exclusion of the insurance policy.   
¶17 The plaintiff asserts that the "usual to non-business 
pursuits" exception applies because parents are continually 
engaged in supervising and caring for their children.  The 
plaintiff concludes that supervising and caring for one's own 
child is not ordinarily part of or related to the home day care 
business but is an activity usual to non-business pursuits.   
¶18 In contrast, Continental Insurance asserts that the 
correct interpretation of the policy language requires a case-
No. 
99-3193 
 
 
8 
by-case analysis of the immediate context of the activity giving 
rise to the claim.  Continental Insurance argues that because 
Stephanie Riehl regularly supervised and cared for her own son 
while simultaneously providing day care services as a business, 
the activity of caring for her own son was usual to her business 
pursuit and not within the "usual to non-business pursuits" 
exception.   
¶19 The 
court 
of 
appeals' 
certification 
memorandum 
discusses three court of appeals cases that have addressed the 
non-business pursuits exception.  The court of appeals first 
addressed the non-business pursuits exception in Bartel v. Carey, 
127 Wis. 2d 310, 379 N.W.2d 864 (Ct. App. 1985), in which the 
insured was a band member who had hitched a trailer to a van in 
preparation for travel to a concert.  The trailer later detached 
and struck a vehicle, killing an occupant.  The court of appeals 
determined that hitching a trailer and traveling were activities 
common to everyday life but that they must be examined in the 
immediate context of the activity from which the claim arose.  
Because the van and trailer were being used for business 
purposes, that business use "tainted" the otherwise usual non-
business activity of hitching a trailer to a vehicle.  "To hold 
otherwise would implicate two unreasonable results: robbing the 
exception 
of 
effect and 
expanding 
coverage 
to 
risks not 
contemplated under the policy."3  The court of appeals concluded 
                     
3 See Bartel v. Carey, 127 Wis. 2d 310, 318, 379 N.W.2d 864 
(Ct. App. 1985). 
No. 
99-3193 
 
 
9 
that the claim did not fall within the non-business pursuits 
exception and denied coverage under the "business pursuits" 
exclusion. 
¶20 After Bartel, the court of appeals decided Ruff v. 
Graziano, 220 Wis. 2d 513, 583 N.W.2d 185 (Ct. App. 1998), in 
which the non-business pursuits exception arose in the context of 
a day care business.  In Ruff, a child under the care of the day 
care provider drowned during a visit to the beach.  The court of 
appeals followed the reasoning of Bartel and held that although a 
trip to the beach may ordinarily be incident to non-business 
pursuits, when viewed in its immediate context the beach trip in 
that case was directly related to the day care business.  The 
court of appeals concluded that the business exclusion provision 
precluded coverage for a day care provider who took the children 
to the beach where a child drowned.  It found that the non-
business pursuits exception did not apply because the trip to the 
beach had to be considered in the context of the day care 
business.  The court of appeals determined that the trip was part 
of the day care business and did not fall within the non-business 
pursuits exception.4 
¶21 The third case cited by the court of appeals and on 
which the parties have focused is Rufener v. State Farm Fire & 
Casualty Co., 221 Wis. 2d 500, 585 N.W.2d 696 (Ct. App. 1998).  
In Rufener the court of appeals held that insurance coverage 
                     
4 See Ruff v. Graziano, 220 Wis. 2d 513, 524-25, 583 N.W.2d 
185 (Ct. App. 1998).  
No. 
99-3193 
 
 
10
existed under the non-business pursuits exception when the victim 
was injured while helping install equipment in the insured's 
garage for use in the insured's part-time snowplowing business.  
The 
Rufener 
court 
rejected 
the 
Bartel 
"tainted" 
analysis 
approach.  The court of appeals concluded instead that for the 
non-business pursuits exception to be more than illusory, the 
policy must cover some incidents that occur as a result of 
activities that arise out of the insured's business pursuit.5 
¶22 Rufener applied two principles to determine whether a 
claim falls within the exception to the business pursuits 
exclusion.  First, the court of appeals stated that the activity 
giving rise to the injury is not examined in isolation; rather, 
the activity is examined in its immediate context.  The court of 
appeals held in Rufener that the context of the activities giving 
rise to the injury was the installation of the equipment for the 
insured's business, but that the installation was not an ordinary 
part of the insured's business because it was a one-time 
occurrence.6  In addition, the installation occurred in a separate 
place and at a separate time from the insured's income-producing 
activity.  
¶23 Second, the court of appeals stated that a court must 
look to objective factors to determine whether the activity 
                     
5 "The exception operates to restore coverage to some 
activities that admittedly 'arise out of' the insured's business 
pursuits."  Rufener v. State Farm Fire & Cas. Co., 221 Wis. 2d 
500, 511, 585 N.W.2d 696 (Ct. App. 1998). 
6 See Rufener, 221 Wis. 2d at 510. 
No. 
99-3193 
 
 
11
giving rise to the injury was ordinarily part of or related to 
the insured's business.7  The court of appeals examined in Rufener 
such objective factors as the frequency of the activity in 
relation to the business pursuit and its closeness in time and 
place to the actual income-producing activity.   
¶24 At the outset, we note three limitations to applying 
Bartel, Ruff, or Rufener to this case.  First, each of these 
cases rests upon a review of policy language that differs 
somewhat, although not substantially, from the language of 
Continental Insurance's policy.  Both Rufener and Bartel reviewed 
a non-business pursuits exception to the business pursuits 
exclusion that restored coverage for activities "ordinarily 
incident to non-business pursuits."  In Ruff, the court reviewed 
an 
exception 
that 
restored 
coverage 
for 
activities 
"in 
conjunction 
with 
business 
pursuits 
which 
are 
ordinarily 
considered non-business in nature."  Here, the exception in 
Continental Insurance's renter's policy restores coverage for 
activities "usual to non-business pursuits."  One commentator has 
noted that decisions involving the business pursuits exclusion 
often turn on the precise wording of the policy language.8  As a 
result, the fact that Bartel, Ruff, and Rufener did not address 
                     
7 See Rufener, 221 Wis. 2d at 509-10. 
8 See Lawrence A. Frazier, The Business Pursuits Exclusion 
in Personal Liability Insurance Policies: What the Courts Have 
Done with It, 1970 Ins. L. J. 519, 534. 
No. 
99-3193 
 
 
12
the 
precise 
policy 
language 
at 
issue 
here 
limits 
their 
applicability to this case.9  
¶25 Second, a renter's insurance policy is intended to 
protect 
an 
insured 
"within 
the 
personal 
sphere 
of 
the 
policyholder's life . . . ."10  The day care business cases 
present special difficulty in ensuring that the "usual to non-
business pursuits" exception of the policy protects the insured's 
personal sphere because the operation of a home day care business 
includes many of the same activities that are part of the 
personal sphere of the policyholder's life. 
¶26 Third, although the three court of appeals cases state 
that a court should consider the immediate context of the 
activity in question, they provide no guiding principle for this 
fact-specific inquiry.  We can discern no clear rule from these 
cases that would allow a court to determine whether under the 
particular facts of any given case an activity falls within the 
non-business pursuits exception.  The Rufener objective factor 
test may be helpful in some fact situations, but it cannot be a 
governing principle in the present case. The difficulty in 
                     
9 See Lawrence A. Frazier, The Business Pursuits Exclusion 
in Personal Liability Insurance Policies: What the Courts Have 
Done with It, 1970 Ins. L. J. 519, 534 ("[N]ot all clauses have 
been worded the same.  It [is] extremely important, therefore, 
to examine the policy closely . . . ."). 
10 See Bartel, 127 Wis. 2d at 317 (citing Lawrence A. 
Frazier, The Business Pursuits Exclusion Revisited, 1977 Ins. L. 
J. 88, 89). 
No. 
99-3193 
 
 
13
applying Rufener is evident in the parties' arguments before this 
court.  
¶27 The plaintiff and Continental Insurance agree that the 
Rufener analysis should be applied to this case, but they 
disagree whether the application of Rufener favors the plaintiff 
or Continental Insurance.  
¶28 The plaintiff asserts that application of Rufener to 
this case results in coverage under the insurance policy.  The 
plaintiff urges that a home day care provider's care of her own 
son is not motivated by or necessary for the production of income 
or the operation of the home day care business and is not 
ordinarily part of or related to the home day care business.  
According to the plaintiff, although the accident here occurred 
during the operation of the day care business, Stephanie Riehl's 
supervision of her own child was an activity that is ordinarily 
non-business in nature.  The plaintiff relies on the Rufener 
court's recognition that activities that fall under the non-
business pursuits exception will by their very nature have some 
degree of involvement with a business pursuit.11  The plaintiff 
urges the court to look at what ordinarily occurs outside a day 
care business, namely the mother's care of her son, to determine 
whether an incident is covered under the "usual to non-business 
pursuits" exception. 
¶29 In contrast, Continental Insurance argues that a court 
should look at what ordinarily occurs within a day care business 
                     
11 See Rufener, 221 Wis. 2d at 511. 
No. 
99-3193 
 
 
14
to determine the meaning of the "usual to non-business pursuits" 
exception.  According to Continental Insurance, Rufener clearly 
forecloses coverage in this case because Stephanie Riehl's 
supervision of her son was undertaken in the context of her day 
care business. Continental Insurance urges that Stephanie Riehl's 
supervision of her son was ordinarily part of her day care 
business: Her care of her son occurred at her day care facility 
and occurred while she was providing day care.  The day care 
business determined how, when, and why she was supervising her 
son.  According to Continental Insurance, the claim arose out of 
activities that occurred in Riehl's place of business during 
business hours and directly involved the business clients.  
Continental Insurance further argues that the child would not 
have died had he not been in Riehl's care at the time and that 
requiring insurance coverage in this case creates insurance 
coverage for every day care provider, defeating the business 
pursuits exclusion that excludes coverage for hazards associated 
with income-producing activities. 
¶30 Continental Insurance urges us to glean from Rufener 
the guiding principle that an activity that regularly occurs 
within the business setting cannot fall within the "usual to non-
business pursuits" exception.  Continental Insurance argues that 
if the court accepts the plaintiff's argument, the non-business 
pursuits exception would swallow the rule and would defeat the 
purpose of the business pursuits exclusion, which is to exclude 
coverage for hazards associated with regular income-producing 
activities.  Continental Insurance asserts that Rufener strikes 
No. 
99-3193 
 
 
15
the proper balance between the "business pursuits" exclusion and 
the non-business pursuits exception by looking at the risks that 
are usually associated with 
the 
business. 
 
According 
to 
Continental Insurance, a risk associated with a day care business 
is that the day care provider's own child would injure one of the 
children for whom day care is being provided.  
¶31 We disagree with Continental Insurance's argument for 
two reasons.  First, Continental Insurance's reliance on Rufener 
is misplaced.  Rufener is inapposite.  The court in Rufener 
considered a business activity that was a one-time occurrence, 
the installation of special equipment in the insured's garage.  
The analysis in Rufener is not wholly applicable to the facts of 
this case, in which we consider an activity that occurs regularly 
both inside and outside the business.  In particular, the Rufener 
court did not need to consider what the impact would be if the 
installation that caused the injury occurred ordinarily as a part 
of business and non-business activities.  
¶32 Second, Continental Insurance's position requires us to 
read the "usual to non-business pursuits" exception as limited to 
those activities that not only regularly occur outside the 
business setting (that is, "usual to non-business pursuits") but 
also do not regularly occur within the business setting.  Thus, 
Continental Insurance's position requires the court to insert 
words in the non-business pursuits exception so that the 
exception would except from the business pursuits exclusion 
activities that are "usual to non-business pursuits and unusual 
No. 
99-3193 
 
 
16
to business pursuits."  We decline to rewrite the insurance 
policy in this manner.  
¶33 Continental Insurance's approach risks making the 
"usual to non-business pursuits" exception to the business 
pursuits exclusion illusory, superfluous, and without effect.  
The court of appeals explained in Rufener that the exception has 
meaning: "The exception operates to restore coverage to some 
activities that admittedly 'arise out of' the insured's business 
pursuits."12  Therefore, coverage must be extended to liabilities 
arising from an act or omission "even though the act or omission 
is connected in some manner with the insured's 'business 
pursuits,'"13 if the act or omission is also connected in some 
manner with an activity ordinarily not associated with the 
insured's business pursuits.   
¶34 We must interpret the "usual to non-business pursuits" 
exception to provide meaningful coverage under this exception. 
¶35 We 
turn 
for 
assistance 
to 
cases 
from 
other 
jurisdictions interpreting the non-business pursuits exception to 
the business pursuits exclusion. Cases involving day care 
                     
12 See Rufener, 500 Wis.2d at 511. 
13 See Floyd v. Northern Neck Ins. Co., 427 S.E.2d 193, 196 
(Va. 1993).  See also Myrtil v. Hartford Fire Ins. Co., 510 
F.Supp. 1198, 1202 (E.D. Pa. 1981); State Farm & Cas. Co. v. 
Moore, 430 N.E.2d 641, 645 (Ill. Ct. App. 1981). 
No. 
99-3193 
 
 
17
providers can be found both in support of14 and in opposition to 
Continental Insurance's position.15  Several courts, including our 
own court of appeals, and at least one commentary have recognized 
that the cases are varied and contradictory. 16  From our own 
                     
14 See, e.g., Allstate Ins. Co. v. Mathis, 706 N.E.2d 893 
(Ill. Ct. App. 1999) (no coverage where child under insured's 
care suffocated after blankets fell on child); Economy Fire & 
Cas. Co. v. Basse, 525 N.E.2d 539 (Ill. Ct. App. 1988) (no 
coverage where one child in daycare was struck by a vehicle 
driven by a parent picking up another child in the daycare); 
Susnik v. Western Indemnity Co. Inc., 795 P.2d 71 (Kan. Ct. App. 
1989) (no coverage where a cared-for child was injured by 
another child); Safeco Ins. Co. v. Howard, 782 S.W.2d 658 (Mo. 
Ct. App. 1989) (no coverage where daycare provider's son 
sexually abused the children under her care). 
15 See, e.g., Gallo v. Grosvenor, 572 N.Y.S.2d 506 (N.Y. 
App. Div. 1991) (coverage where daycare provider's own son 
sexually assaulted a child in her care); Robinson v. Utica Mut. 
Ins. Co., 585 S.W.2d 593 (Tenn. 1979) (coverage existed where a 
child being cared for as a part of business injured the 
insured's grandchild); Floyd, 427 S.E.2d 193 (coverage provided 
when child in daycare was injured by lawn mower driven by 
daycare provider's child). 
16 See, e.g., Myrtil, 510 F.Supp. at 1202 (E.D. Pa. 1981) 
("Obviously, the matter is not free of doubt.  In fact, this 
clause has been the subject of considerable litigation . . . .  
[N]early all of the courts have found the language difficult of 
interpretation and application."); Floyd, 427 S.E.2d at 195-96 
("Other jurisdictions, however, have interpreted the same or 
similar 
language 
in 
a 
child 
care 
context 
using 
various 
analyses."); Rufener, 221 Wis. 2d at 507 ("The exception to the 
business pursuits exclusion has been heavily litigated in many 
jurisdictions 
with 
varying 
results 
that 
cannot 
be 
fully 
reconciled."); Bartel, 127 Wis. 2d at 316 ("Though no Wisconsin 
case has construed this exception, the problem has been dealt 
with elsewhere.  However, courts have not reached uniform 
results . . . ."). 
No. 
99-3193 
 
 
18
review of the case law from other jurisdictions and the various 
attempts to reconcile case law, we perceive at least five 
approaches that courts have used to resolve the question of when 
the exception to the business pursuits exclusion applies, 
although many cases have not explicitly stated their methodology. 
17   
                                                                  
For a collection of cases relating to child care and the 
business 
pursuits 
exclusion 
and the 
non-business pursuits 
exception, see David J. Marchitelli, Annot., Construction and 
Application of "Business 
Pursuits" 
Exclusion 
Provision in 
General Liability Policy, 35 A.L.R.5th 375, §§ 70–83 (1996). 
17 Courts have described other approaches.  See, e.g., State 
Farm, 430 N.E.2d at 644-45 (examining cases occurring in a 
daycare context and finding consideration of at least three 
factors: (1) whether the activity is conducted for the purpose 
of furthering the insured's business; (2) whether the activity 
that gave rise to the claim occurred at the place of business; 
and (3) whether the insured is engaging in a dual purpose); 
Floyd, 427 S.E.2d at 195-96 (reviewing the exception in the 
child care context and finding three approaches: (1) a focus on 
the specific activity of the caretaker; (2) a focus on whether a 
lack of proper supervision in a home childcare context directly 
related to the business of caring for children; and (3) a focus 
on the language of the exception and characterizing it as 
ambiguous). 
The court of appeals has also examined approaches from 
other jurisdictions without reaching a conclusion on their 
viability.  See Bartel, 127 Wis. 2d at 316 (explaining three 
approaches from other jurisdictions: (1) exception applies to 
activities that are in no way related to the insured's business; 
(2) 
exception 
applies 
to 
activities 
associated 
with 
the 
insured's business that are typically engaged in as part of 
personal life; and (3) exception is ambiguous and must be 
construed against the insurer). 
No. 
99-3193 
 
 
19
¶36 One approach is to inquire whether the activity giving 
rise to the injury contributes to or furthers the interests of 
the business.  If the activity does not, the activity falls 
within the "usual to non-business pursuits" exception because it 
is not conduct that is solely attributable to the business.18  
¶37 A second approach focuses on the nature of the duty 
that was allegedly breached.19  Coverage under the insurance 
                                                                  
Numerous cases focus on the activity giving rise to the 
claim to determine whether the particular acts or omissions of 
the insured may be characterized as non-business even though 
they were causally related to and occurred in the course of 
business pursuits.  These cases do not provide guidance in 
deciding whether the activity in question is ordinarily incident 
to business or usual to non-business pursuits because they reach 
conclusions with little if any analysis.  See, e.g., Susnik, 795 
P.2d 71 (no coverage where a cared-for child was injured by 
another child because the insured's business was caring for the 
child); Safeco, 782 S.W.2d 658 (no coverage where daycare 
provider's son sexually abused the children she cared for 
because her failure to supervise her own son was ordinarily 
incident to her business). 
For a collection of cases relating to child care and the 
business 
pursuits 
exclusion 
and the 
non-business pursuits 
exception, see David J. Marchitelli, Annot., Construction and 
Application of "Business 
Pursuits" 
Exclusion 
Provision in 
General Liability Policy, 35 A.L.R.5th 375, §§ 70–83 (1996). 
18 See, e.g., Vermont Mut. Ins. Co. v. Gambell, 689 A.2d 453 
(Vt. 1997) (coverage existed when three dogs, not owned by or 
cared for by the insured, caused a customer to slip and fall in 
driveway because failure to maintain driveway in safe condition 
and failure to prevent dogs from roaming the property were not 
duties that contributed to the insured's pet-sitting business; 
the acts or omissions did not contribute to or further the 
interest of the business). 
19 For a collection of cases adopting this approach see 
David J. Marchitelli, Annot., Construction and Application of 
"Business Pursuits" Exclusion Provision in General Liability 
Policy, 35 A.L.R.5th 375, §§ 70–74 (1996). 
No. 
99-3193 
 
 
20
policy exists when the duty that was breached exists aside from 
the business activity.20  Coverage under the insurance policy does 
not exist when the duty that was breached is incident to the 
business pursuit.  Thus if the theory of liability is failure to 
care for the child entrusted to the day care provider in the day 
care situation, then the claim is not covered under the insurance 
policy.21 
¶38 A third approach is to ask whether the activity giving 
rise to the claim is directly related to or separate and apart 
from the business pursuit.  If the activity is separate and apart 
from the business pursuit, a claim is covered by the policy. 22  
Thus a policy is held to cover a child in day care injured by a 
lawn mower, because mowing the lawn is an activity not associated 
with day care. 23 
                     
20 See, e.g., Robinson, 585 S.W.2d 593 (coverage existed 
where a child being cared for as a part of business injured the 
insured's grandchild because the insured did not breach a duty 
toward the cared-for child, but toward her grandchild). 
21 See, e.g., Allstate, 706 N.E.2d 893 (no coverage when 
blankets fell on child under insured's paid care and suffocated 
because insured's duty to protect and supervise the children 
under her care arose within her business). 
22 See, e.g., Kirsch v. Aetna Cas. & Sur. Co., 598 So.2d 109 
(Fla. Ct. App. 1992) (reversing summary judgment for insurer 
when child in daycare was burned by hot bacon grease because 
whether daycare provider regularly cooked breakfast as an 
activity 
separate 
and 
apart 
from 
her 
business 
was 
a 
determination to be made by the fact finder).  
23 See Floyd, 427 S.E.2d 193 (coverage provided when child 
in daycare was injured by lawn mower driven by daycare 
provider's child because mowing the lawn was not directly 
related to the daycare). 
No. 
99-3193 
 
 
21
¶39 A fourth approach is to construe the "usual to non-
business pursuits" exception very narrowly in favor of the 
insurance company and against the insured.  In effect, the 
courts engage in a "but for" analysis, asking but for the 
business would the incident giving rise to a claim have 
occurred.  If the incident would not have occurred but for the 
business, the claim is not covered by the insurance policy. 24 
¶40 A fifth approach is to construe the exception narrowly 
in favor of the insured and against the insurance company.25  This 
approach is consistent with Wisconsin case law on interpretation 
of insurance policies.  Under this approach the courts reason as 
follows: Interpretation of an insurance policy ordinarily is a 
question 
of 
law 
for 
an 
appellate 
court 
to 
determine 
independently, benefiting from the analysis of the circuit 
court.26  A court gives language in an insurance policy its common 
and ordinary meaning, construing the insurance policy as would a 
                     
24 See, e.g., Economy Fire, 525 N.E.2d 539 (no coverage 
where child in daycare was struck by a vehicle driven by a 
parent picking up another child in the daycare because child 
would not have been injured if the parent had not had to pick up 
her own children). 
25 See, e.g., Myrtil, 510 F.Supp. 1198 (coverage existed 
because the exception, "activities therein which are ordinarily 
incident to non-business pursuits," is ambiguous and must be 
construed against the insurer); State Farm, 430 N.E.2d 641 
(coverage existed because applying the exception, "activities 
therein which are ordinarily incident to non-business pursuits," 
to the facts of the case creates an ambiguity, which is resolved 
in favor of the insured). 
26 Hull v. State Farm Mut. Auto. Ins. Co., 222 Wis. 2d 627, 
636, 586 N.W.2d 863 (1998).  
No. 
99-3193 
 
 
22
reasonable person in the position of the insured.27  When an 
insurance policy read in context is reasonably susceptible to 
more than one construction, it is ambiguous.28  An ambiguity in an 
insurance policy is resolved against the insurer and in favor of 
the insured.29  Policy provisions tending to limit liability are 
narrowly construed against the insurer.30 
¶41 Under this fifth approach, courts acknowledge that the 
non-business pursuit exception has been subject to considerable 
litigation across the country and "nearly all of the courts have 
found the language difficult of interpretation and application."31 
 Faced with this conflicting body of case law, these courts have 
concluded that the exception is ambiguously worded and must be 
construed against the insurance company.  
                     
27 See Wisconsin Label Corp. v. Northbrook Prop. & Cas. Ins. 
Co., 221 Wis. 2d 800, 806, 586 N.W.2d 29 (Ct. App. 1998) 
(quoting Cieslewicz v. Mut. Serv. Cas. Ins. Co., 84 Wis. 2d 91, 
97-98, 267 N.W.2d 595-98 (1978)).   
28 See Wisconsin Label, 221 Wis. 2d at 806. 
29 Myrtil, 510 F.Supp. 1198 (when language of an insurance 
policy is ambiguous, the provision is construed in favor of the 
insured because the insurance company could "cure the ambiguity 
by using more explicit language which would place the meaning of 
the clause beyond question"); Donaldson v. Urban Land Interests, 
Inc., 211 Wis. 2d 224, 230, 564 N.W.2d 728 (1997) (ambiguities 
in a policy's terms are to be resolved in favor of coverage 
because the insurer is the party best suited to eliminate 
ambiguity).   
30 See Donaldson, 211 Wis. 2d at 230. 
31 See Robinson, 585 S.W.2d at 595. 
No. 
99-3193 
 
 
23
¶42 We have studied the numerous cases and are unable to 
find any readily identifiable meaning in the language "usual to 
non-business pursuits," when read with the exclusion for business 
pursuits in day care business cases such as the present one.  We 
therefore join the courts that have characterized language 
similar to that in the Continental Insurance's renter's insurance 
policy regarding the "usual to non-business pursuits" exception 
to the "business pursuits" exclusion when applied to the 
undisputed facts of this case as ambiguous.  Reasonable persons 
in the position of the plaintiff in the present case could 
reasonably believe that they had coverage under this exception 
for the supervision and control of their own child.  The rule of 
narrow construction against the insurance company applies in the 
present case in which the ambiguity exists as an exception to 
liability.32   
¶43 We therefore conclude that the renter's insurance 
policy provides coverage to the Riehls for the plaintiff's claim 
that Stephanie Riehl was negligent in supervision and control of 
her own child, who allegedly caused harm to Justin.  
¶44 We are mindful that too broad an interpretation of the 
"usual to non-business pursuits" exception might significantly 
limit the "business pursuits" exclusion.  "To [read the "usual to 
non-business pursuits" exception too broadly] would require 
                     
32 The business pursuits exclusion is not ambiguous in the 
present case.  The Riehls were engaged in a business pursuit in 
the operation of a home day care business.  The ambiguity arises 
from the "usual to non-business pursuits" exception to the broad 
exclusion for business pursuits. 
No. 
99-3193 
 
 
24
insurers to provide liability coverage for many persons (e.g. 
self-employed cooks, gardeners, and janitors) under homeowners 
policies merely because these businesses involve activities 
common to non-business life." 33 
¶45 Coverage in the present case under the "usual to non-
business pursuits" exception does not, however, result in the 
exception 
swallowing 
the 
rule 
of 
the 
"business 
pursuits" 
exclusion.  The plaintiff acknowledged at oral argument that if 
her child had merely tipped over in his child seat and 
suffocated, giving rise to a claim of negligent supervision of 
her child in day care, there would be no coverage under the 
renter's insurance policy.  The Riehls concede that they have no 
coverage 
for 
the 
claim 
that 
Stephanie 
Riehl 
negligently 
supervised the deceased infant.  Holding that coverage exists for 
Stephanie Riehl's negligent supervision of her own child does not 
apply the language of the "usual to non-business pursuits" 
exception so broadly that the business pursuits exclusion becomes 
meaningless, nor does it interpret the "usual to non-business 
pursuits" exception so narrowly as to render the exception 
illusory.  Thus, our decision that the renter's insurance policy 
covers the Riehls' alleged negligent supervision of their own 
child rests comfortably within a middle ground between these two 
problematic outcomes. 
 
III 
                     
33 See Bartel, 127 Wis.2d at 317. 
No. 
99-3193 
 
 
25
 
¶46 We now turn to the issue of reformation.  The circuit 
court determined that the parties agreed that the Riehls did not 
request day care coverage and that, as a matter of law, the 
Riehls were therefore not entitled to reformation.  Accordingly, 
the circuit court granted Continental's motion for summary 
judgment on this issue. 
¶47 We have concluded that the plaintiff's claim that the 
Riehls negligently supervised and controlled their own son falls 
within the coverage of the insurance policy.  Reformation of the 
insurance policy is therefore not necessary or relevant to this 
claim.  Because coverage for the plaintiff's claim that the 
Riehls were negligent in caring for the plaintiff's infant 
Justin in the operation of their home day care business is 
barred by the business pursuits exclusion, reformation of the 
insurance policy remains an issue.34 
¶48 Although the facts surrounding the issuance of the 
Riehls' renter's insurance policy are largely in dispute, the 
                     
34 Reformation may also be relevant to the claims brought by 
Continental Insurance and the Riehls against Dumke Insurance 
Services, explained in note 1 above.  The circuit court denied 
Dumke Insurance Services' motion for summary judgment to dismiss 
all claims against it.  The circuit court apparently reasoned 
that Dumke Insurance Services might still be negligent if the 
trier of fact found that inquiring into the Riehls' file would 
have disclosed that the Riehls had performed home day care in 
the past and had coverage. Dumke Insurance Services argues that 
the implication of the circuit court denial of its motion is 
that it should have known that the Riehls were requesting 
liability coverage for their daycare business. Accordingly, 
Dumke Insurance Services argues that the Riehls were entitled to 
reformation.   
No. 
99-3193 
 
 
26
undisputed facts are as follows: An earlier policy had been 
issued through Dumke Insurance and Financial Services, Inc., an 
insurance agency, that provided coverage to the Riehls for the 
home day care business; Curt C. Fritz, an employee of Dumke 
Insurance Services, knew that Stephanie Riehl was a day care 
provider; Leonard Riehl did not expressly request day care 
coverage during his meeting with employee Fritz; at the end of 
the meeting with employee Fritz, Leonard Riehl signed an 
insurance form filled out by Fritz that stated, among other 
things, that Leonard Riehl did not have a business in his home; 
and the Continental Insurance renter's insurance policy issued 
to the Riehls contained the business pursuits exclusion, 
specifically defining business pursuits as including day care 
operations. 
¶49 Continental Insurance argues, and the circuit court 
agreed, that these undisputed facts entitled it to summary 
judgment on the issue of reformation.  The Riehls and Dumke 
Insurance Services argue that two disputed facts exist that make 
summary judgment on the issue of reformation improper: (1) Was 
there a "mutual mistake" about the coverage of Continental 
Insurance's renter's insurance policy sufficient to warrant 
reformation?  (2) Would Continental Insurance have issued a 
policy covering liability for the day care operation? 
¶50 The general rule is that a contract may be reformed 
when the "writing that evidences or embodies an agreement in 
whole or in part fails to express the agreement because of a 
mistake of both parties as to the contents or effect of the 
No. 
99-3193 
 
 
27
writing."35  In granting Continental Insurance's motion for 
summary judgment denying reformation, the circuit court focused 
on the following language in Trible v. Tower Insurance Co., 43 
Wis. 2d 172, 182-83, 168 N.W.2d 148 (1969), that a mutual 
mistake must be proven for reformation: 
 
¶When a policy of insurance is involved, mutual 
mistake 
is 
proven 
when 
the 
party 
applying 
for 
insurance proves that he made certain statements to 
the agent concerning the coverage desired, but the 
policy as issued does not provide the coverage 
desired.  
 
¶51 The circuit court found that "the issue of Mrs. Riehl 
being a day care provider came up but . . . the evidence is that 
Mr. Riehl did not request business coverage for day care."  The 
circuit court concluded that because the Riehls did not 
establish that they had made statements to employee Fritz 
requesting coverage for the day care business, they were not 
entitled to reformation.   
¶52 
The order of the circuit court makes clear that the 
circuit court was treating the express request described in 
Trible as the only type of evidence that would justify 
                     
35 Restatement (Second) of Contracts § 155 (1979).  
To win reformation of an insurance contract, the insured 
must prove that there was a prior oral agreement between the 
parties which, through mistake or negligence, the written 
insurance 
policy 
does 
not 
express, 
although 
the 
written 
insurance policy was intended to so state.  International 
Chiropractors Ins. v. Gonstead, 71 Wis. 2d 524, 528-29, 238 
N.W.2d 725 (1976) (citing Schuster v. Germantown Mut. Ins. Co., 
40 Wis. 2d 447, 162 N.W.2d 129 (1968); Ahnapee & W.R. Co. v. 
Challoner, 34 Wis. 2d 134, 137, 148 N.W.2d 646 (1968)). 
No. 
99-3193 
 
 
28
reformation of the insurance contract.  However, the conclusion 
in Trible that reformation was justified when there was an 
express request for coverage does not compel the conclusion that 
there can be no reformation without an express request.  
¶53 
In the context of insurance contracts, there are 
special considerations regarding reformation.  On the one hand, 
a policy may not be rewritten to bind the insurer to a risk that 
it did not contemplate and for which it received no premium.36  
But on the other hand, "in insurance cases less is required to 
make out a cause of action for reformation than in ordinary 
contract disputes."37   
¶54 
In Artmar, Inc. v. United Fire & Cas. Co., 34 Wis. 2d 
181, 148 N.W.2d 641 (1967), the court stated that "[a] mistake 
due to the negligence of an agent . . . is satisfactory ground 
for reformation, since the insured ordinarily relies upon the 
agent to set out properly the facts in the application."38  An 
action for reformation is permitted, stated the Artmar court, 
when there is a mistake by an agent even though the mistake is 
not technically mutual.39  
                     
36 See Int'l Chiropractors, 71 Wis. 2d at 527. 
37 Artmar, Inc. v. United Fire & Cas. Co., 34 Wis. 2d 181, 
186, 148 N.W.2d 641 (1967).  See also Williams v. State Farm 
Fire & Cas. Co., 180 Wis. 2d 221, 234, 509 N.W.2d 294 (1993) 
(quoting Artmar). 
38 Artmar, 34 Wis. 2d at 187. 
39 Id. 
No. 
99-3193 
 
 
29
¶55 
In Artmar the insured could not positively assert that 
he had requested coverage for outbuildings.  However, the 
insured alleged that he had always intended and believed that 
the insurance policy provided coverage for the outbuildings and 
that the policy did not provide coverage because of the mistake 
or neglect of the insurance agent.40  This court affirmed the 
trial court's denial of the insurance company's motion for 
summary judgment.  This court noted that the insurance agent had 
previously issued a policy that covered the outbuildings and 
that because the same agent drafted the earlier policy providing 
coverage, the agent knew that the insured wanted insurance 
coverage on the outbuildings.  The Artmar decision makes clear 
that 
reformation 
may 
be 
justified 
when 
the 
insured 
can 
demonstrate that there was an understanding regarding the 
desired coverage based on prior dealings, even in the absence of 
an express request for coverage. 
¶56 
The Riehls argue that summary judgment on the issue of 
reformation was improper in the present case, because an issue 
of 
fact 
exists 
as 
to 
whether 
Dumke 
Insurance 
Services 
negligently failed to obtain liability coverage for the day care 
business.  They argue that the evidence gives rise to an 
inference that the parties had an understanding that day care 
coverage would be provided and that Dumke Insurance Services was 
negligent.  They point to Fritz's knowledge that Stephanie Riehl 
was a day care provider, as well as to a prior policy the Riehls 
                     
40 Artmar, 34 Wis. 2d at 186. 
No. 
99-3193 
 
 
30
purchased through Dumke Insurance Services providing coverage 
for the Riehls' day care business.  
¶57 
Artmar is distinguishable from the facts of the 
present case.  Artmar involved a case in which the parties had 
dealt 
with 
each 
other 
personally 
for 
several 
years.  
Nevertheless, we are not prepared to say, as a matter of law on 
a motion for summary judgment in the present case, that no 
reasonable trier of fact could find that a mutual mistake 
occurred based on the Riehls' belief that the policy provided 
coverage and the mistake or neglect of the agent in failing to 
provide the intended coverage.41   
¶58 
Continental Insurance makes one final argument against 
reformation, contending that 
reformation is 
not 
available 
because it does not provide the type of coverage that the 
insured intended.42  Continental Insurance asserts that it 
presented undisputed evidence that it would not have issued day 
care coverage to the Riehls if they had requested it.  Dumke 
Insurance Services disputes this assertion. The circuit court 
did 
not 
address 
this 
aspect 
of 
Continental 
Insurance's 
                     
41 The second half of the Artmar test for reformation, 
whether the policy did not provide coverage because of the 
negligence of the agent, is related to the circuit court's 
denial of Dumke Insurance Services' motion for summary judgment 
to dismiss the claims by Continental Insurance and the Riehls 
against it.  See notes 1 and 34 above. 
42 See 2 Russ Segalia, Couch on Insurance (Third) § 27:4, at 
27-9 (3d ed. 1999).  
No. 
99-3193 
 
 
31
argument,43 and we cannot conclude as a matter of law that 
Continental Insurance would not have issued a renter's insurance 
policy to the Riehls that included coverage for their day care 
business. 
¶59 In remanding to the circuit court, we note that 
regardless of the resolution of the disputed facts, the Riehls 
may not be entitled to reformation.  The remedy of reformation 
is equitable in nature, so that a circuit court has discretion 
to withhold reformation, even if reformation would otherwise be 
appropriate, on grounds that have traditionally permitted courts 
of equity to withhold relief.44  However, the circuit court's 
order makes clear that its decision was not based on equitable 
grounds but rather on the ground that no dispute existed that 
the Riehls did not expressly request liability coverage for 
their day care business. Since we conclude that facts regarding 
reformation are in dispute, we reverse the portion of the 
circuit court judgment granting summary judgment to Continental 
Insurance on the issue of reformation. 
¶60 In sum, we reverse that portion of the circuit court's 
judgment granting summary judgment to Continental Insurance as 
to whether the renter's insurance policy covers the plaintiff's 
claim against the Riehls for negligent supervision and control 
                     
43 Continental Insurance submitted a proposed order that 
included a finding that Continental Insurance would not have 
issued a policy to the Riehls had it known of the home day care 
business.  The circuit court struck this finding from its order 
and did not address the parties' arguments on this issue. 
44 See Restatement (Second) of Contracts § 155 cmt d (1979). 
No. 
99-3193 
 
 
32
of their own son.  Furthermore, we reverse that portion of the 
circuit court judgment granting summary judgment to Continental 
Insurance on the issue of reformation.  We therefore remand the 
cause 
to 
the 
circuit 
court 
for 
further 
proceedings 
not 
inconsistent with this decision. 
By the Court.—The judgment of the circuit court is reversed 
and 
the 
cause 
remanded 
to 
the 
circuit 
court. 
No. 99-3193.jpw 
 
1 
¶61 JON P. WILCOX, J. (dissenting).  The holding I glean 
from the majority's lengthy opinion is that, because some other 
courts around the country have come to opposite conclusions 
regarding an insurance contract provision similar to the one at 
issue here, this contract is ambiguous.  See majority op. at 
¶41.  Because the majority strains to find the language 
ambiguous through extrinsic sources, it rules in favor of 
finding coverage.  See majority op. at ¶¶42-43.  As a result, 
the majority contravenes well-established precedent that holds 
that ambiguity in an insurance contract cannot be found through 
extrinsic sources.  More troubling, however, is the fact that 
the majority favors unlicensed in-home day care facilities over 
licensed day care facilities that carry insurance for the risks 
associated 
with 
such 
businesses. 
 
For 
these 
reasons, 
I 
respectfully dissent. 
 
I 
 
¶62 I begin with the language in the renter's insurance 
contract.  The contract language states: 
 
LOSSES WE DO NOT COVER 
1. 
Personal Liability and Medical Expense coverages 
do not apply to bodily injury or property damage: 
 
 . . .  
 
j. 
Arising out of business pursuits of you or any 
covered person.  This exclusion does not apply 
to: 
 
No. 99-3193.jpw 
 
2 
(1) Activities 
which 
are 
usual 
to 
non-business 
pursuits; 
Our methodology——before today——was well accepted.  We have 
interpreted insurance contract language generally using the same 
rules that govern other contracts.  Smith v. Atlantic Mut. Ins. 
Co., 155 Wis. 2d 808, 810, 456 N.W.2d 597 (1990).  The purpose 
is to ascertain and carry out the intent of the parties.  Gen. 
Cas. Co. of Wis. v. Hills, 209 Wis. 2d 167, 175, 561 N.W.2d 718 
(1997).  Policy language is interpreted according to its plain 
and ordinary meaning, as understood by a reasonable insured.  
Kremers-Urban Co. v. American Employers Ins. Co., 119 Wis. 2d 
722, 735, 351 N.W.2d 156, 163 (1984).  If we determine that the 
language is ambiguous, it will be narrowly construed against the 
insurer.  Peace v. Northwestern Nat'l Ins. Co., 228 Wis. 2d 106, 
140, 596 N.W.2d 429 (1999).  However, we do not go beyond the 
written document, unless we find ambiguity within it.  Id. 
 
¶63 The majority fails to find any ambiguity within the 
above insurance policy without resorting to extrinsic sources, 
No. 99-3193.jpw 
 
3 
such 
as 
court 
of 
appeals 
cases45 
and 
cases 
from 
other 
jurisdictions.  Missing this analytical step of reviewing the 
policy itself in order to determine whether there is an 
ambiguity preordains a finding of coverage for the insured here. 
¶64 However, 
in 
following 
our 
accepted 
analytical 
framework and applying the plain language of the provision to 
the present fact pattern, a denial of coverage must result.  
Jamie Vandenberg was sleeping in Stephanie Riehl's home because 
of her business activity.  Her business activity created a 
heightened duty to supervise her child's interactions with 
customers of her day care facility, beyond just supervising her 
own child, an activity which is common to all parents.  Her 
failure 
to 
supervise 
her 
child's 
interaction 
with 
Jamie 
                     
45 One court of appeals case that the majority opinion as 
well as the parties extensively discuss is Rufener v. State Farm 
Fire & Casualty Co., 221 Wis. 2d 500, 585 N.W.2d 696 (Ct. App. 
1998).  There, coverage was found based on a substantially 
similar provision.  Id. at 504.  I find the Rufener opinion 
problematic for two reasons.  First, like the majority opinion 
here, Rufener finds the provision ambiguous by looking to 
extrinsic materials and other jurisdictions rather than the 
plain language of the written contract.  Id. 507-08.  Second, 
Rufener asserts that the activity in question, installing a 
hoist that would assist with the removal and reattachment of a 
salter/sander for a snowplowing business was not 'part of' the 
snowplowing business because it occurred at a "separate place 
and 
at 
a 
separate 
time 
from . . . [the] 
income-producing 
activity."  Id. at 510.  The error in this statement is 
manifest.  There is no language in the policy provisions that 
distinguishes business activity based on its proximity to the 
income-producing activity.  As long as it is a business 
activity——even if it is done only once——it is excluded by the 
plain language of the provision.  Therefore, I believe Rufener 
was incorrectly decided, and is inapplicable to the fact 
situation presented in this case. 
No. 99-3193.jpw 
 
4 
Vandenberg, a customer of her in-home day care center, was not 
"an activity usual to a non-business pursuit."  To find 
otherwise, as the majority opinion does here, is akin to ruling 
that driving one's car while on a business pursuit is a non-
business activity, because one always must maintain control of 
one's car.  The unambiguous plain language of this policy 
provision should not be read in so strained a manner, in order 
to find coverage in this case. 
 
II 
 
¶65 More troubling than the analytical misstep in the 
majority's opinion, however, is its judicial favoritism for in-
home day care facilities over licensed day care facilities, 
which must obtain insurance to cover the risks associated with 
operating such a business.  See Wis. Admin. Code § HFS 45.03 
(Apr., 2001).  As Continental Insurance indicated in its brief, 
it would not have written the Riehls' policy if it was aware 
that they were providing day care to a child under the age of 
one without sufficient staff.  A basic renter's insurance policy 
or homeowner's policy is not intended to cover the manifold 
risks in running a day care facility. 
¶66 But now, under the majority's opinion, unlicensed in-
home day care facilities will have a clear economic advantage 
over licensed day care centers, which are subject to the 
stringent requirements contained in Chapter 48 of the Children's 
Code and the Health and Family Services Administrative Code.  
No. 99-3193.jpw 
 
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See Wis. Admin. Code Chapter HFS 45 (Apr., 2001).  Unlicensed 
in-home day care facilities will be able to get by with a 
cheaper renter's or homeowner's insurance policy, rather than a 
more comprehensive business policy that covers all the risks 
associated with running a day care center.  Such a holding 
undermines the legislature's intent in Chapter 48 to provide 
safe insured day care facilities for Wisconsin children, and to 
prevent tragic accidents such as the one that befell Jamie 
Vandenberg.  See Wis. Stat. § 48.67 (1999-2000). 
 
III 
 
¶67 
In summary, I would apply the plain, unambiguous 
language in the insurance policy at issue to find that there is 
no coverage in this case.  I believe that the majority erred by 
reaching out to use extrinsic sources in order to find 
ambiguity, thereby not following our well-settled analytical 
framework in interpreting an insurance contract.  Further, I am 
deeply troubled by the majority's judicial favoritism for 
unlicensed home day care facilities, which clearly contravenes 
the intention of our legislature to provide safe insured day 
care facilities for Wisconsin children.  
¶68 
I am authorized to state that Justices N. PATRICK 
CROOKS and DAVID T. PROSSER join this opinion.   
 
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