Court Opinion

ID: 4274388
Source: CourtListenerOpinion
Date Created: 2018-05-11 13:49:06.142061+00
Date Added: 2024-06-11T14:33:36.888046
License: Public Domain

2018 WI 47

                  SUPREME COURT             OF   WISCONSIN
CASE NO.:               2015AP2356
COMPLETE TITLE:         Archie A. Talley,
                                   Plaintiff-Appellant,
                             v.
                        Mustafa Mustafa, d/b/a Burleigh Liquor, a/k/a
                        Burleigh Food Market and Adams Foods, LLC,
                                   Defendants,
                        Auto Owners Insurance Company,
                                   Defendant-Respondent-Petitioner.

                          REVIEW OF A DECISION OF THE COURT OF APPEALS
                           Reported at 375 Wis. 2d 757, 897 N.W.2d 55
                               PDC No: 2017 WI App 31 - Published

OPINION FILED:          May 11, 2018
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:          January 9, 2018

SOURCE OF APPEAL:
   COURT:               Circuit
   COUNTY:              Milwaukee
   JUDGE:               Daniel A. Noonan

JUSTICES:
   CONCURRED:
   DISSENTED:           A.W. BRADLEY, J., dissents, joined by
                        ABRAHAMSON, J., and KELLY, J. (opinion filed).
                        KELLY, J., dissents, joined by ABRAHAMSON, J.,
                        and A.W. BRADLEY, J. (opinion filed).
  NOT PARTICIPATING:

ATTORNEYS:

       For the defendant-respondent-petitioner, there were briefs
filed by Justin F. Wallace, William R. Wick, and Nash, Spindler,
Grimstad,         &   McCracken,   LLP,   Manitowoc.   There   was   an   oral
argument by Justin F. Wallace.

       For the plaintiff-appellant, there was a brief filed by
George E. Chaparas and Carlson, Blau & Clemens, S.C., Milwaukee.
There was an oral argument by George E. Chaparas.
    An amicus curiae brief was filed on behalf of The Wisconsin
Insurance Alliance by James A. Friedman, Mark W. Hancock, and
Godfrey & Kahn, S.C., Madison.

                                 2
                                                                              2018 WI 47
                                                                      NOTICE
                                                       This opinion is subject to further
                                                       editing and modification.   The final
                                                       version will appear in the bound
                                                       volume of the official reports.
No.       2015AP2356
(L.C. No.    2012CV7847)

STATE OF WISCONSIN                                 :              IN SUPREME COURT

Archie A. Talley,

              Plaintiff-Appellant,

      v.                                                                   FILED
Mustafa Mustafa, d/b/a Burleigh Liquor, a/k/a
Burleigh Food Market and Adams Foods, LLC,                            MAY 11, 2018

              Defendants,                                                Sheila T. Reiff
                                                                      Clerk of Supreme Court

Auto-Owners Insurance Company,

              Defendant-Respondent-Petitioner.

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

      ¶1      REBECCA       GRASSL     BRADLEY,        J.    In     this       insurance

coverage         dispute,    we      consider     whether       a     business-owners

liability policy covers a negligent supervision claim arising

out   of    an    alleged    employee's1    intentional         act     of    physically

      1
       We acknowledge the parties disagree as to the status of
the man who punched the customer. Archie A. Talley insists the
man was an employee.   Mustafa Mustafa says the man was not an
employee, and there are no paychecks or documentation to refute
Mustafa's representation.    For the purpose of our review,
viewing the allegations in the complaint in a light most
                                                    (continued)
                                                                      No.    2015AP2356

punching a customer in the face.                We hold that this insurance

policy      does    not   provide    coverage      under    these     circumstances.

When the negligent supervision claim pled rests solely on an

employee's         intentional   and    unlawful    act     without    any    separate

basis for a negligence claim against the employer, no coverage

exists.       Accordingly, we reverse the decision of the court of

appeals,2 which reversed the circuit court's3 grant of summary

judgment in favor of Auto-Owners Insurance Company (Auto-Owners)

on the coverage issue.              The circuit court correctly concluded

that       there    is    no   coverage    under     this     business       liability

insurance policy for either the employee's intentional act or

the    negligent      supervision      claim   against      the   employer     arising

solely out of the employee's intentional act.4

favorable to the non-moving party, we assume without deciding,
that the puncher was an employee.     See Summers v. Touchpoint
Health Plan, Inc., 2008 WI 45, ¶15, 309 Wis. 2d 78, 749
N.W.2d 182. Our assumption shall have no effect on the pending
but stayed trial on the merits; the factfinder must resolve this
dispute.
       2
       See Talley v. Mustafa, 2017 WI App 31, 375 Wis. 2d 757,
897 N.W.2d 55.
       3
       The Honorable Daniel A. Noonan, Milwaukee County Circuit
Court, presiding.
       4
       Talley did not appeal the circuit court's ruling that the
Auto-Owners policy does not provide any insurance coverage to
the employee based on the allegations that the employee
intentionally punched Talley in the face.

                                          2
                                                                           No.     2015AP2356

                                      I.    BACKGROUND

       ¶2         The insurance coverage issue in this case arises from

an    incident          that    occurred   in       July   2009   at   a    neighborhood

convenience store, Burleigh Food Market.                        Mustafa Mustafa owned

and        operated       the     store,    and       at    the     time         carried   a

"Businessowners' Liability Policy" with Auto-Owners.5

       ¶3         The   provisions    in   the       business     liability       insurance

policy provide, as material:

       A. COVERAGES

       1. Business Liability We will pay those sums that the
          insured becomes legally obligated to pay as damages
          because of "bodily injury" . . . to which this
          insurance applies. No other obligation or liability
          to pay sums or perform acts or services is covered
          unless explicitly provided for under COVERAGE
          EXTENSION SUPPLEMENTARY PAYMENTS.

             a.     This insurance applies only:[6]

                    (1) To "bodily injury" or "property damage":

       5
       Mustafa  is   the   sole  member,   owner,  officer,  and
shareholder of Adams Foods, LLC, which is the business that owns
Burleigh Food Market.      The caption in this case lists the
defendants as:   "Mustafa Mustafa, d/b/a Burleigh Liquor, a/k/a
Burleigh Food Market, Adams Foods, LLC" and Auto-Owners.
Although the insurance policy's declaration page lists "Burleigh
Food Mart" as the insured, the parties and the record refer to
the store as "Burleigh Food Market."    There is no dispute that
these are one in the same.
       6
       This section indicates it also applies to "personal
injury" caused by an "offense," but an amendment to the policy
deletes this language and instead defines "personal injury" as
"injury, other than 'bodily injury', arising out of" a list of
offenses, none of which are applicable.

                                                3
                                            No.   2015AP2356

       (a)   That occurs during the policy period;
             and

       (b)   That is caused by an "occurrence".   The
             "occurrence" must take place in      the
             "coverage territory".

 . . . .

B.    EXCLUSIONS

1.    Applicable to Business Liability Coverage –

     This insurance does not apply to:

     a.   "Bodily   injury"  or   "property   damage"
     expected or intended from the standpoint of the
     insured.    This exclusion does not apply to
     "bodily injury" resulting from the use of
     reasonable   force   to   protect   persons   or
     property.

 . . . .

C.    WHO IS AN INSURED

1. If you are designated in the Declarations as:

     a. An individual, you and your spouse are
     insureds, but only with respect to the conduct
     of a business of which you are the sole owner.

     b. A partnership or joint venture, you are an
     insured. Your members, your partners and their
     spouses are also insureds, but only with
     respect to the conduct of your business.

     c. An organization other than a partnership or
     joint venture, you are an insured.         Your
     executive officers and directors are insureds,
     but only with respect to their duties as your
     officers or directors.    Your stockholders are
     also insureds, but only with respect to their
     liability as stockholders.

2. Each of the following is also an insured:

                          4
                                                             No.   2015AP2356

                a. Your employees, other than your executive
                officers, but only for acts within the scope of
                their employment by you.

                . . . .

           F.    LIABILITY AND MEDICAL EXPENSES DEFINITIONS

            . . . .

           3. "Bodily injury" means bodily injury, sickness
              or disease sustained by a person, including
              death resulting from any of these at any time.

                . . . .

           9. "Occurrence"  means    an   accident,  including
              continuous    or     repeated     exposure    to
              substantially    the   same    general   harmful
              conditions.
(Some formatting altered).

    ¶4     On    July   24,   2009,   Archie   A.   Talley    walked    into

Mustafa's store to buy beer.          Talley claims that while he was

inside the store, Mustafa's security guard, Keith Scott, punched

him in the face twice.        Talley left the store and called police

to report the assault.        Talley was taken to the hospital where

he was treated for a broken jaw.

    ¶5     On July 17, 2012, Talley filed suit against Mustafa,

Keith Scott,7 and Mustafa's insurer, Auto-Owners.            The complaint

alleged, as material:

        "[Keith Scott] was a[n] employee, security guard and/or

         customer of the defendant, Mustafa Mustafa."

    7
       Talley did not identify Keith Scott until after filing
suit. The complaint identified Scott as "JOHN DOE, a fictitious
individual (address unknown)."

                                      5
                                                                   No.     2015AP2356

        "Auto-Owners . . . issued a policy of liability insurance

         wherein it agreed, among other things, to pay up to the

         limits of its policy any and all damages sustained as a

         result of negligence in the ownership and/or maintenance

         of . . . Burleigh Food Market."

        As Talley entered the store, "the alleged security guard

         on the premises, began a verbal altercation with" Talley.

         Talley, "while walking in the premises was then struck by

         the security guard twice, fracturing his jaw."

        "The   defendants      had    a     duty    to     properly     train    and

         supervise their employees and have a duty to exercise the

         highest degree of care for the safety of their customers

         from any harm that might befall them by reason of the

         actions and/or conduct of their employees."

        "The   defendants     failed      to     provide    adequate     or   proper

         security      for     their       customers,        and   further        said

         defendants, their agents, employees, or representatives,

         were the parties who attacked the plaintiff.                   A videotape
         viewed by officers of the Milwaukee Police Department

         from   the    defendants'     own      security     system,     showed   the

         assault."

    ¶6     Auto-Owners hired counsel to represent Mustafa.                       Auto-

Owners filed an Answer and conducted discovery, which revealed

issues   related      to   coverage.         In    January    2014,     Auto-Owners

notified the insured that it was defending the case under a

reservation     of    rights   letter.       In     October    2014,    Auto-Owners
filed a motion to bifurcate the issues of coverage and liability
                                         6
                                                                  No.     2015AP2356

and stay the proceedings on the latter so that the coverage

issue could be decided before the liability issues were tried.

     ¶7      The circuit court granted the motion to bifurcate and

stayed the trial on the merits to "allow the defendant to seek a

declaratory judgment with regard to insurance coverage issues."

Mustafa hired his own lawyer to represent him on the coverage

issue.       In    February    2015,    Auto-Owners     filed   its     motion   for

declaratory and summary judgment, asking the circuit court to

declare that the insurance policy does not provide coverage, and

to   grant      summary      judgment   dismissing      Auto-Owners      from    the

lawsuit.        Auto-Owners asserted that no coverage existed under

the policy because:           (1) Scott was not Mustafa's employee, and

therefore not an insured; (2) even if a factual dispute about

Scott's status exists, Mustafa did not believe Scott was an

employee; (3) an intentional assault——punching someone in the

face——is     not    an   "occurrence"     under   the   insurance       policy   and

excluded by the intentional acts exclusion; (4) there can be no

coverage for a negligent supervision claim based on an assault,
and no negligent supervision claim exists because Scott was not

an employee.

     ¶8      The circuit court held two hearings on the motion and

both times concluded the Auto-Owners insurance policy did not

provide coverage for Scott or for Mustafa.                   The circuit court

addressed the intentional act at the May 2015 hearing and held:

         "So if it's an intentional act, those things are clearly

          not      covered    under     Wisconsin     law.      It      wasn't    an
          occurrence."
                                          7
                                                                               No.     2015AP2356

           Attorneys trying to get coverage for an intentional act

            will "try to shoehorn in [a] negligence claim" to make

            the    intentional        act      an    occurrence.           "[T]his      is     not

            anything other than an intentional tort.                         It doesn't fall

            within the definition of an accident that's covered by

            the policy."

           Auto-Owners "has aptly pointed out in [its] brief of what

            an occurrence is under Wisconsin law.                            And intentional

            acts     are    simply       not     covered         because      they     are     not

            accidents."

           "And   that's       the     ruling       of    the   Court,      and     there's   no

            coverage."

       ¶9       The circuit court held a second hearing in September

2015       to   address    whether       coverage          existed     for    the     negligent

supervision        claim,       which    was     not       discussed    at    the     May    2015

hearing.        The circuit court held:

           "Punching somebody is not a negligent act."

           Talley    says       "Scott     used          unreasonable       force"     so     the
            exception in the policy that permits reasonable force

            does not apply.           "[Talley] state[s] unequivocally that it

            was unreasonable force."                 "[T]he pure undisputed facts as

            asserted by the plaintiff with no doubt regardless of

            employment is that this force was unreasonable."

           Insurance polices do not cover the unreasonable use of

            force regardless of employment.

           Talley did not have any facts separate from the punch in
            the    face    to    support       the        negligent    supervision       claim.
                                                 8
                                                                         No.    2015AP2356

         "You've     got    to    tell    me    exactly     how   some    employer      is

         supposed to supervise or train somebody to do what?                            To

         commit acts of unreasonable force."                      "You have to tell

         this     Court    just    what    it   is   that      would    make    somebody

         negligently supervised."

        "There's only one act that caused an injury here."                           "And

         that's     an     unreasonable         force     as    undisputed       by     the

         plaintiff."

    ¶10     The circuit court entered judgment in favor of Auto-

Owners     and    dismissed       the    insurer     from      the     case.      Talley

appealed.        The court of appeals reversed in a split decision,

with Judge Paul F. Reilly in dissent.                     See Talley v. Mustafa,

2017 WI App 31, 375 Wis. 2d 757, 897 N.W.2d 55.                        The majority of

the court of appeals held that a reasonable insured would expect

coverage    for    the     negligent      supervision       claim     alleged    in     the

complaint, and that a disputed issue of material fact existed

"as to whether Scott was an employee of Mustafa or otherwise had

a special relationship with him such that Mustafa had a duty to
train and supervise Scott with due care."                            Id., ¶2.         Judge

Reilly   concluded        that    no    coverage     existed      under    the    policy

because the intentional "attack/assault" alleged could not be an

"occurrence"       since    it    was     not   an   accident.           Id.,    ¶¶39-40

(Reilly, J., dissenting).

    ¶11     Auto-Owners petitioned this court for review, and we

granted the petition.

                                            9
                                                                       No.   2015AP2356

                                  II.   STANDARD OF REVIEW

       ¶12       "We independently review a grant of summary judgment

using the same methodology of the circuit court and the court of

appeals."           Water Well Sols. Serv. Grp., Inc. v. Consol. Ins.

Co., 2016 WI 54, ¶11, 369 Wis. 2d 607, 881 N.W.2d 285.                       "Summary

judgment is appropriate when there is no genuine dispute of

material fact and the moving party is entitled to judgment as a

matter of law."            Id.; Wis. Stat. § 802.08(2)(2015-16).8

       ¶13       Whether to grant "a declaratory judgment is addressed

to the circuit court's discretion."                Olson v. Farrar, 2012 WI 3,

¶24,       338 Wis. 2d 215,      809 N.W.2d 1.      When    the    exercise    of

discretion turns on a question of law, however, our review is de

novo.       Id.      This case presents an insurance coverage question,

which requires the interpretation of an insurance policy; this

is a question of law we review de novo.                  Water Well Sols. Serv.

Grp., Inc., 369 Wis. 2d 607,                ¶12.      Therefore, we review the

circuit court's grant of declaratory judgment de novo.

                                        III. ANALYSIS
       ¶14       The issue before us is whether the insurance contract

between Auto-Owners and Mustafa provides coverage for Talley's

negligent supervision claim against Mustafa.                    Auto-Owners argues

that only an "occurrence" triggers coverage and under the facts

here,       there    was     no   occurrence.      It   insists     that     Talley's

attempts to bootstrap negligence into the case as a separate

       8
       All subsequent references to the Wisconsin Statutes are to
the 2015-16 version unless otherwise indicated.

                                            10
                                                                   No.    2015AP2356

tortious act by alleging Mustafa was negligent in training and

supervising       Scott    should    be   rejected.        Auto-Owners     further

contends       that     agreement    by   both   parties    to    the    insurance

contract——here Mustafa and Auto-Owners——that the policy does not

provide       coverage     should    be   determinative      of    the    coverage

question.9       Talley insists that his negligent supervision cause

of action against Mustafa involves a separate act of negligence

that should be covered under the Auto-Owners insurance policy.

In an amicus brief, the Wisconsin Insurance Alliance contends

that       commercial    general    liability    policies   do    not    cover   the

       9
       Auto-Owners also asks us to correct the "troublesome"
language in the court of appeals opinion suggesting that a
negligent supervision claim can exist against an employer absent
an employee-employer relationship. See Talley, 375 Wis. 2d 757,
¶36 (directing that "a jury could reasonably infer Scott worked
for or had a special relationship with Mustafa which obligated
Mustafa to train and supervise Scott with due care").        This
court recognized the tort of negligent hiring, training, or
supervision as a valid cause of action against an employer when
the negligence of the employer is "connected to the act of the
employee."      See   Miller  v.  Wal-Mart   Stores,  Inc.,   219
Wis. 2d 250, 262, 580 N.W.2d 233 (1998).         Miller involved
employees, not an individual who may have a special relationship
with an employer. Id. at 257-58, 262. We reserve the question
of whether Scott was an employee of Mustafa for the factfinder,
see supra note 1, because resolving that factual dispute is not
necessary to our disposition. The issue of whether the tort of
negligent supervision may be extended to a situation involving
an actor who is not an employee but has a special relationship
with an employer is also not dispositive here; therefore, we do
not decide it.     Water Well Sols. Serv. Grp., Inc. v. Consol.
Ins. Co., 2016 WI 54, ¶33 n.18, 369 Wis. 2d 607, 881 N.W.2d 285
(cases should be decided on the narrowest possible grounds).
However, because we reverse the court of appeals decision, its
statement has no precedential effect.    See Blum v. 1st Auto &
Cas. Ins. Co., 2010 WI 78, ¶42, 326 Wis. 2d 729, 786 N.W.2d 78.

                                          11
                                                                       No.   2015AP2356

intentional act of assault and battery, and an injured party

cannot obtain coverage by creatively pleading a cause of action

for negligent supervision against the insured employer.

       ¶15    This is the first time we have been asked to decide

whether coverage exists based on an allegation that the employer

should have trained the employee not to punch a customer in the

face.        Courts in other jurisdictions have decided whether an

allegation of negligent supervision by an employer can trigger

coverage       when    an     employee     causes     injuries    to     another     by

intentionally         violating      the   criminal    law.      See,    e.g.,      U.S.

Underwriters Ins. Co. v. Val-Blue Corp., 647 N.E.2d 1342, 1344

(N.Y. 1995) (holding no coverage for employer based on negligent

supervision claim when employee security guard shot a person who

entered the nightclub) (applying assault and battery exclusion);

Smith   v.     Animal       Urgent   Care,   Inc.,     542 S.E.2d 827,   831-32

(W. Va. 2000) (holding no coverage for employer when employee

sexually harassed another employee).                  And, courts are rejecting

plaintiffs' attempts to create coverage under commercial general
liability policies by simply inserting negligence claims into

complaints when employees' intentional acts cause the injuries

giving rise to lawsuits.             See, e.g., Mt. Vernon Fire Ins. Co. v.

Dobbs, 873 F. Supp. 2d 762, 766 (N.D. W. Va. 2012) (agreeing

that    plaintiff       "cannot      mischaracterize         intentional     acts    as

negligence claims in order to avoid the exclusions contained

within the insurance policy").

       ¶16    We reverse the decision of the court of appeals and
hold that there is no coverage under the Auto-Owners insurance
                                           12
                                                                        No.   2015AP2356

policy.      This policy applies only to bodily injury caused by an

"occurrence," which is defined as an accident.                          Intentionally

punching someone in the face two times is not an accident under

any definition.            Accordingly, the negligent supervision claim

against Mustafa can qualify as an occurrence only if facts exist

showing that Mustafa's own conduct accidentally caused Talley's

injuries.     Because there are no facts in Talley's complaint (or

in any extrinsic evidence) alleging any specific separate acts

by Mustafa that caused Talley's injuries, there is no occurrence

triggering coverage for the negligent supervision claim.                              The

only    specific     assertion    Talley        made   in    this   regard    is      that

Mustafa should have trained Scott not to hit people.                           We hold

that when a negligent supervision claim is based entirely on an

allegation that an employer should have trained an employee not

to   intentionally      punch     a   customer     in    the    face,    no   coverage

exists.

                             A.   Wisconsin Case Law

       ¶17   Before comparing Talley's factual allegations with the
language of the Auto-Owners insurance policy, we look to several

insurance coverage cases, which although not directly on point,

provide helpful general principles.                This court has decided two

coverage     cases   involving        plaintiffs       who   were   punched      in   the

face:     (1) Schinner v. Gundrum, 2013 WI 71, 349 Wis. 2d 529, 833
N.W.2d 685; and (2) Estate of Sustache v. Am. Family Mut. Ins.

Co., 2008 WI 87, 311 Wis. 2d 548, 751 N.W.2d 845.                        In Schinner,

the insured held an underage-drinking party.                        349 Wis. 2d 529,
¶¶17-21.       One    of    the   guests    suffered         serious    injury     after
                                           13
                                                                        No.   2015AP2356

another guest punched him twice in the face and then kicked him

in the head.      Id., ¶¶2, 24.        The injured guest sued the insured

and his insurer.       Id., ¶2.       We held that a homeowner's liability

policy does not provide coverage when the insured's actions were

entirely     volitional   and    a    substantial        factor    in    causing     the

plaintiff's bodily injuries.            Id., ¶¶66-69.        We emphasized that

in determining whether the facts alleged satisfy the policy's

requirement that bodily injury be caused by an accident, the

focus was on ascertaining "what is the injury-causing event."

Id., ¶66.        Only if the facts alleged show that the injury-

causing event is an accident is the policy's initial grant of

coverage triggered.       Id., ¶¶66-69, 81.

       ¶18   Estate of Sustache also involved an underage-drinking

party    where   one   guest    punched        another    guest,    who       fell   and

sustained fatal injuries.            Estate of Sustache, 311 Wis. 2d 548,

¶5.     The deceased's estate sued the puncher, his parent, and

their homeowner's insurer.           Id., ¶2.      The complaint alleged both

a negligence claim against the puncher (Count 2); an intentional
battery claim against the puncher (Count 3); and a vicarious

liability claim against the puncher's parent (Count 4).                              Id.,

¶6.     This court, after an exhaustive review of cases defining

"accident," concluded that the negligence claim did not create

coverage because the puncher's "volitional act," which caused

the harm, was not "accidental, and, thus, did not give rise to

an    'occurrence.'"      Id.,       ¶¶30-56    ("One     cannot    'accidentally'

intentionally cause bodily harm.").                 We did not discuss the
vicarious liability claim because it was dependent upon Count 3,
                                         14
                                                                   No.    2015AP2356

the intentional battery claim.              Id., ¶6 n.6.     Estate of Sustache

clarifies   that     it   is   the    act   that   caused    the   harm   that   is

important in determining whether the insurance policy provides

coverage.    If the act that caused the harm was not an accident,

then there was no occurrence to trigger coverage.10

     ¶19    There    is   only    one   insurance     case    from   this    court

resolving a coverage dispute involving a claim for negligent

supervision against an employer based on the intentional acts of

its employees——Doyle v. Engelke, 219 Wis. 2d 277, 580 N.W.2d 245

(1998).     In      Doyle,     this   court    concluded     the   comprehensive

     10
        In Estate of Sustache, we cited 9 Lee R. Russ & Thomas F.
Segalla, Couch on Insurance § 127:21, 127——54-55 (3d ed. 2000),
noting:

     In order to constitute an "accident" or "occurrence"
     under a policy of liability of insurance, an event
     must be unforeseen, unexpected, or unanticipated. The
     nature of an assault is such that the event itself is
     typically intentional in nature.      On their face,
     therefore, assaults would appear to inherently fall
     outside of the coverage provided in a liability
     policy . . . .If the insured is also the assailant,
     the result is that there is no coverage for the
     assault because the act was intentionally committed by
     the insured.

Estate of Sustache v. Am. Family Mut. Ins. Co., 2008 WI 87, ¶53
n.13,   311 Wis. 2d 548,   751 N.W.2d 845  (emphasis   added;
formatting altered).   It is important to clarify that although
the emphasized sentence is true, its converse is not universally
true.   In other words, when an insured is not the assailant,
this excerpt does not automatically mean coverage exists. As we
see in this case, Mustafa is the insured and was not the
assailant, but no coverage exists because Talley does not
sufficiently   allege  his   bodily   injuries  were  caused   by
accidental separate acts by Mustafa.

                                        15
                                                                           No.       2015AP2356

general liability (CGL) policy of Wisconsin Voice of Christian

Youth, Inc. (WVCY) covered the plaintiff's claim for negligent

supervision against WVCY as the employer of two employees who

filed     false         legal     documents        to    intentionally          harass     the

plaintiff.         Id. at 281-82.         The plaintiff alleged the employees'

actions caused her severe emotional distress and that WVCY was

negligent in failing to supervise its employees.                               Id. at 287.

After concluding that the plaintiff's injuries met the insurance

policy's definition of "bodily injury," id. at 288, this court

addressed "whether WVCY's negligent supervision of its employees

constitutes an 'event' for coverage purposes," id. at 289.                                 The

CGL policy insuring WVCY covered bodily injury "caused by an

event,"      and    "event"       was    defined        as   "an     accident,    including

continuous         or    repeated       exposure        to    substantially       the     same

general harmful conditions."                  Id. at 287-89.             The Doyle court

concluded that the plaintiff alleged an "event" that led to her

damages       because           both     "accident"          and      "negligence"        have

definitions that "center on an unintentional occurrence leading
to undesirable results," and a reasonable insured would expect

that    an    "event"       includes       negligent         acts.       Id.    at    289-90.

Concluding that an "event" existed, this court then turned to

the policy's intentional act exclusion to see if it negated

coverage.      Id. at 290-91.            The intentional acts exclusion in the

policy    said      the    insurer       would     not       "cover    bodily    injury     or

property damage that's expected or intended by the protected

person."      Id. at 290.              Although there was no dispute that this
exclusion prevented WVCY's employees from being covered by the
                                              16
                                                                        No.     2015AP2356

policy, this court held that because the negligent supervision

claim    did    not    allege     that    WVCY       itself    acted   intentionally,

coverage was trigged by the policy.                  Id. at 291-92.

       ¶20     It is unclear from Doyle whether the plaintiff alleged

specific separate acts of negligence by WVCY that caused the

plaintiff's injuries beyond the general allegation of negligent

supervision.         There is no analysis of alleged specific acts by

WVCY    being        compared     to     the       insurance    policy's      language.

Instead,       the    Doyle     court    relied      on   similar      definitions      of

accident and negligence, together with a general allegation of

negligent supervision, to discern the existence of an "event."

This is problematic because in determining whether an event or

an occurrence took place, courts "must focus on the incident or

injury that gives rise to the claim, not the plaintiff's theory

of liability."           Stuart v. Weisflog's Showroom Gallery, Inc.,

2008 WI 86, ¶36, 311 Wis. 2d 492, 753 N.W.2d 448 (noting that

insurance policies insure against occurrences, not "theories of

liability" (citations and quoted source omitted)); see also Am.
Family Mut. Ins. Co. v. Am. Girl, Inc., 2004 WI 2, ¶¶5, 37-49,

268 Wis. 2d 16, 673 N.W.2d 65 (focusing on the cause of the

property damage in determining whether there was an occurrence

for    insurance       coverage).         Like      in    Schinner     and    Estate    of

Sustache, our analysis in Doyle should have focused on whether

the specific factual allegations against WVCY constituted the

injury-causing event.            In other words, a plaintiff cannot simply

add    the   word     "negligence"       to    a    complaint   and    expect    that   a
supervision claim against an employer will create an accident
                                              17
                                                                       No.    2015AP2356

out of the employee's intentional assault and battery.                            A court

must look to see whether the plaintiff alleges specific facts

that show the bodily injury was caused by an occurrence——an

accident.         We did not do that in Doyle.             We said that because

the plaintiff alleged negligent supervision against the employer

and negligence means accident, an "event" occurred for purposes

of coverage.           Doyle, 219 Wis. 2d at 289-90.

      ¶21        Doyle also contains two legally incorrect statements.

Paragraph 37 says "insurance coverage is based solely on the

policy      as    applied    to    the   allegations     within    the     plaintiff's

complaint" and footnote 3 says coverage determinations must be

confined "to the four corners of the complaint."                         Id. at 294,

284 n.3.         Although Doyle speaks in terms of coverage, the "four

corners" rule applies solely to analyzing an insurer's duty to

defend.      See Olson, 338 Wis. 2d 215, ¶¶33-39 (four corners rule

applies in duty to defend cases).                 When an insurer follows one

of the judicially-preferred approaches and moves to bifurcate

the coverage determination from a trial on the merits, courts
may look beyond the four corners of the complaint to determine

whether the claims alleged are covered by the insurance policy.

Id.

      ¶22        The   incorrect     statements   this    court    made      in    Doyle,

which      have    already    been    impliedly   overruled       by   this       court's

multiple         insurance     cases11     decided     since      Doyle,      are     now

      11
           See, e.g., Estate of Sustache, 311 Wis. 2d 548, ¶¶27-29.

                                           18
                                                                     No.     2015AP2356

explicitly overruled.            Further, we clarify that our analysis on

the negligent supervision coverage claim fell short in Doyle.

In analyzing whether a claim of negligent supervision is covered

under    an    insurance       policy,   courts    must   compare    the     specific

facts alleged against the employer with the language of the

insurance policy to ascertain whether the incident or injury

that    gave       rise   to    the   claim    satisfies     the    definition      of

occurrence.

       ¶23    Having set forth the existing law, we now apply it to

the particular facts and insurance policy in the matter before

us.

 B.     Whether the Auto-Owners Insurance Policy Provides Coverage

       ¶24    The issue presented here is limited to whether the

Auto-Owners insurance policy provides coverage for the negligent

supervision claim Talley asserts against Mustafa.                     Our focus is

on coverage, not on the duty to defend, because Auto-Owners

followed       a    judicially-preferred          approach   when     it     received

Talley's      complaint:         it   provided    an   initial     defense    to   its
insured and filed a motion to bifurcate the coverage issue from

the liability trial.            See Water Well Sols. Serv. Grp., Inc., 369
Wis. 2d 607, ¶27.

       ¶25    To determine if coverage exists, we first compare the

allegations in the plaintiff's complaint, as supplemented by the

extrinsic evidence submitted, with the language of the policy to

decide whether the facts allege an occurrence.                      See Estate of

Sustache, 311 Wis. 2d 548, ¶¶30-31.                 If there is no occurrence,
our analysis ends because no coverage exists; the claims do not
                                          19
                                                                               No.    2015AP2356

fall within the initial grant of coverage.                          Id., ¶¶57-58.          If we

conclude the facts allege an occurrence, we next examine the

exclusions      in    the       policy    to    determine         whether      any    exclusion

precludes      coverage.           Id.,        ¶57.       Finally,       if    an     exclusion

applies, we examine the policy to see if any exceptions to the

applicable exclusion restore coverage.                        See Wis. Pharmacal Co.,

LLC    v.    Neb.    Cultures       of    Cal.,       Inc.,       2016 WI 14,    ¶22,    367
Wis. 2d 221,         876 N.W.2d 72.              "[W]e    must       not    rewrite       the

insurance policy to bind an insurer to a risk [] the insurer did

not contemplate and for which it has not been paid."                                 Everson v.

Lorenz, 2005 WI 51, ¶14, 280 Wis. 2d 1, 695 N.W.2d 298.

       ¶26    The    Auto-Owners          insurance          policy      applies      only     to

bodily injury "caused by an 'occurrence'" and "'[o]ccurrence'

means an accident."              Accident is not defined in the policy, but

no one in this matter contends that Scott's act of intentionally

punching      Talley       in    the     face    was    an    accident.             One    cannot

"accidentally" intentionally punch someone in the face.                                    Talley

does   not    argue        otherwise.           Rather,      he    insists     that       Mustafa
negligently trained and supervised Scott by failing to tell him

not to hit people.              Talley asserts that Mustafa's conduct is an

occurrence separate and distinct from Scott's intentional act.

We disagree.

       ¶27    Our focus is "'on the incident or injury that gives

rise to the claim, not the plaintiff's theory of liability.'"

Stuart,      311 Wis. 2d 492,          ¶36    (quoted      source      omitted).          Our

analysis focuses on the "injury-causing event."                                Schinner, 349
Wis. 2d 529, ¶66.               In other words, we consider whether Talley
                                                20
                                                                                 No.     2015AP2356

alleged facts against Mustafa that show Talley's bodily injury

was    caused      by    an       accident,     which       would    be    an     "occurrence"

triggering         insurance         coverage.             Simply    inserting          the    word

"negligence" into a complaint does not create coverage if the

complaint       fails        to     allege    specific         facts      to     establish      an

occurrence.

       ¶28    Talley's complaint alleges only that the "defendants"

were    negligent            in    failing      to    "train        and    supervise          their

employees" and "failed to provide adequate or proper security"

because      the    "employees"         "were        the    parties       who    attacked      the

plaintiff."             Talley's        extrinsic           evidence      adds         only    that

Mustafa's     act       of    "not     telling       Mr.    Scott    to    not    hit     anyone"

should trigger coverage.12                   In other words, the occurrence, in

Talley's view, is Mustafa's failure to tell Scott not to punch

customers in the face.                  Typically, an employee's training and

subsequent supervision does not include a segment on how to

refrain from punching others because the assault and battery

criminal statutes already prohibit such conduct.                                See Wis. Stat.
§§ 940.19-.208.

       ¶29    Talley's            allegations    asserting          negligent      supervision

are entirely dependent upon the intentional act giving rise to

the    injury——the           punching.        The     factual       allegations          say   the

punching caused Talley's injury.                      It is the only injury-causing

       12
       Talley also rephrases the language from the complaint,
arguing that Mustafa failed "to properly train, manage and/or
supervise his employee."

                                                21
                                                                 No.    2015AP2356

event.     There are no factual allegations that Mustafa knew or

should have known that Scott was likely to punch customers in

the face.      There are no facts alleging that Mustafa himself

acted in a specific way that led Scott to commit the act causing

the injury.    Because Talley does not present any separate basis

for Mustafa's negligence——any independent act by Mustafa that

accidentally caused Talley's injury——no coverage exists.

    ¶30     This is not to say that a negligent supervision claim

will never trigger insurance coverage.              When a plaintiff alleges

facts independent from the intentional act giving rise to the

injury, coverage may exist.             For example, in QBE Ins. Corp. v.

M & S Landis Corp., 915 A.2d 1222 (Pa. Super. 2007), a court

held the insurer had the duty to defend (and indemnify if the

jury found in plaintiff's favor) its insured——Fat Daddy's Night

Club——on the plaintiff's claim that the employer was negligent

in failing to properly train its bouncer employees on how to

safely evict unruly patrons from the club and how to render

first aid.     Id., ¶¶11-15.            After removing a patron from the
nightclub, the bouncers threw the man on the ground, forced him

to lay face down and laid on top of him for so long that the man

suffocated.        Id.,   ¶11.     The    QBE     court    identified   specific

factual allegations in the complaint of negligence against the

nightclub,    separate      from    the        bouncers'    intentional    acts,

sufficient    to    conclude     that    the    negligence    claims    "can   be

considered an 'accident' triggering an occurrence under [the]

policy."     Id., ¶12.     The specific factual allegations separate
from the bouncers' intentional acts included the failure of the
                                         22
                                                                             No.    2015AP2356

nightclub to properly teach the bouncers how to eject patrons,

use the correct amount of restraint, and render first aid.                               Id.,

¶¶11-12.      That is, had the employer in QBE taught its bouncers

how to safely restrain and remove a patron and how to render

first aid, the man in QBE may not have been injured.                                See also

Vandenberg v. Cont'l Ins. Co., 2001 WI 85, 244 Wis. 2d 802, 628
N.W.2d 876     (holding         coverage        existed    for     daycare         provider's

negligent supervision of her child, who placed pillows on top of

a sleeping infant that caused infant to suffocate).

    C.     Courts Reject Plaintiffs' Attempts at Creative Pleading

    ¶31       In contrast, when the injury giving rise to the suit

is caused by an employee intentionally choosing to commit a

criminal   act,      courts      reject     a    plaintiff's        attempt        to   secure

coverage      by    alleging      negligence         against      an   employer.           For

example, in Smith v. Animal Urgent Care, 542 S.E.2d at 828, the

plaintiff filed suit against Animal Urgent Care and one of its

veterinarians, Dr. Karl E. Yurko.                      The plaintiff alleged that

Yurko sexually harassed her, causing her injury.                             Id.    The West
Virginia      Supreme         Court   of    Appeals        held     that      including      a

negligence claim against Animal Urgent Care in the complaint

"does   not    alter      the     essence       of   the    claim      for    purposes     of

determining        the   availability       of       insurance     coverage.            Sexual

harassment, and its inherently non-accidental nature, remain the

crux of the case regardless of whether negligence is alleged

against [the employer]."               Id. at 832.           See also United Nat'l

Ins. Co. v. Entm't Grp., Inc., 945 F.2d 210, 211, 214 (7th Cir.
1991)    (holding        no    coverage     for       plaintiff's       claim        alleging
                                            23
                                                                         No.   2015AP2356

negligence against theatre owner for injuries caused by sexual

assault in theatre washroom) (applying the policy's assault and

battery    exclusion);       U.S.    Underwriters          Ins.   Co.     v.     Val-Blue

Corp., 647 N.E.2d at 1344 (holding no coverage for plaintiff's

claim     alleging    negligent       supervision       against         nightclub      for

injuries caused when nightclub's security guard shot plaintiff)

(applying    the     policy's   assault       and    battery      exclusion);       Terra

Nova Ins. Co. v. Thee Kandy Store, Inc., 679 F. Supp. 476, 478

(E.D. Pa. 1988) (holding no coverage for plaintiff's claim that

employer    failed     to   prevent    assault       and    battery      committed      by

employee) (applying the policy's assault and battery exclusion);

Terra Nova Ins. Co. v. N.C. Ted, Inc., 715 F. Supp. 688, 691-92

(E.D. Pa. 1989) (holding no coverage for negligence where cause

of injury was assault and battery, which is not an accident and

therefore not an occurrence).

    ¶32     Merely     inserting      negligence       into       a    complaint       that

alleges    only    injuries     caused    by    an    intentional         assault      and

battery will not create an occurrence (defined as an accident)
under an insurance policy.               See Mt. Vernon Fire Ins. Co. v.

Dobbs, 873 F. Supp. 2d at 765-66 (explaining that "[a]lthough

the word 'negligently' is present, the complaint describes an

intentional assault"; thus, no coverage exists on plaintiff's

complaint    alleging       negligence     against         business      whose    agents

caused injuries when they "hit, kicked, and punched" plaintiff).

    ¶33     A     plaintiff's       attempt    to     reconfigure         a    claim    of

assault and battery as a claim of negligence will not transform
an intentional act into an accidental one.                            See United Nat'l
                                         24
                                                                             No.    2015AP2356

Ins. Co. v. Tunnel, Inc., 988 F.2d 351, 352-55 (2d Cir. 1993)

(holding      no    coverage       where    plaintiff        alleged      a    nightclub's

negligent hiring of a bouncer caused injuries when the bouncer's

intentional assault on the plaintiff fractured his skull and put

him in a coma for two weeks; plaintiff's amending of complaint

pretending an assault and battery never occurred will not change

the substance of the claim).                      Talley's complaint asserts an

intentional        assault      and     battery.       He    fails      to    provide     any

specific facts separate from the assault and battery to show any

accidental actions by Mustafa that caused Talley's broken jaw.

Accordingly, there is no coverage for the negligent supervision

claim under Auto-Owners policy.

       D.    Whether Mustafa's Belief Regarding Coverage Controls
       ¶34    From    the    beginning,       Mustafa       has   taken       the    position

that    there       is     no     insurance       coverage        for    the        negligent

supervision claim against him.                    Auto-Owners asserts that when

the insured and insurer agree that an insurance policy does not

provide       coverage,         their      agreement        controls         the     coverage
determination.           In other words, the injured party, who is not a

party to the insurance contract, should not be able to fight for

coverage when the insured concedes none exists.

       ¶35    The scenario Auto-Owners posits is not common.                               An

insured      is    often    the    party    fighting        for   insurance         coverage.

And, as Auto-Owners points out, insurance policies are contracts

to which courts apply the same rules of law applicable to other
contracts.         See Garriguenc v. Love, 67 Wis. 2d 130, 134-35, 226

                                             25
                                                                                  No.    2015AP2356

N.W.2d 414 (1975).            We interpret the language of an insurance

contract      from    the     position          of    a     reasonable          person     in    the

position of the insured.                 Id.     Auto-Owners asks us to hold that

if the parties to the contract agree as to its interpretation,

neither      the   injured     party       nor        the    court       should     be    able    to

disregard that agreement.

       ¶36    We reject the bright-line rule Auto-Owners requests.

While   an     insured's       belief          that    no     coverage          exists     may    be

considered,        courts      follow           established              principles       of     law

applicable to insurance coverage determinations.                                  These settled

rules are objective, based on the insurance policy's language

compared to the specific factual allegations, and applied on a

case-by-case       basis.          See    K.A.G.       by     Carson       v.    Stanford,       148
Wis. 2d 158,         165,    434 N.W.2d 790             (Ct.    App.     1988).         Unlike

coverage      determinations             based        on     an      insured's          subjective

understanding of an insurance contract, the rules courts apply

in interpreting a policy's provisions are not subject to unknown

pressures, lack of knowledge, or manipulation.                                   A neutral and
detached      court     of    law,       tasked       with     determining          whether       an

insurance      policy       provides      coverage,           engages       in    an     objective

application of the policy terms and conditions to the facts of

the case, ensuring consistent coverage determinations grounded

in the text of the insurance contract.                               Leaving the coverage

determination to an insured——who may be unfamiliar with the law

or   have    personal        reasons      for        taking        the    position       that    the

insurance policy does not provide coverage——would replace the
rule    of     law     with     subjective             and     therefore          unpredictable
                                                26
                                                                       No.   2015AP2356

outcomes.          Accordingly, we decline to adopt a rule that would

allow       the    insured's   assessment        of   coverage    to   supplant      the

actual words of the insurance policy.

                                   IV.      CONCLUSION

       ¶37        The court of appeals erred in reversing the circuit

court's grant of summary and declaratory judgment.                       The circuit

court correctly concluded that the Auto-Owners insurance policy

does    not       provide   coverage   to    Mustafa     for     Talley's    claim    of

negligent supervision.            In comparing Talley's complaint, along

with the extrinsic evidence obtained through discovery, to the

language of the policy, we conclude that this policy does not

provide coverage under these circumstances.                      The policy covers

bodily injury caused by an occurrence, which is defined as an

accident.          There is no dispute that Scott acted intentionally

when he punched Talley in the face.13                   The punching was not an

accident and it is the punching that caused Talley's injuries.

Talley failed to allege specific acts by Mustafa that caused

Talley's injuries.             When a negligent supervision claim rests
solely on an employee's intentional act of assault and battery

without any separate basis for a negligence claim against the

employer, no coverage exists.

       ¶38        In addition, we reject Auto-Owners' request that we

allow an insured's agreement with its insurer to control the

       13
       Scott's position that the incident never occurred at all
has no impact on our analysis because Scott is not a party to
this appeal.

                                            27
                                                           No.     2015AP2356

coverage determination.     Instead, we continue to base coverage

determinations on the language of insurance contracts, applying

established principles of law to the facts presented in each

case.

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

reversed.

                                  28
                                                                           No.    2015AP2356.awb

      ¶39   ANN        WALSH      BRADLEY,       J.      (dissenting).             The        issue

presented       is     whether         Mustafa        Mustafa's      business         liability

insurance policy covers Talley's claim that Mustafa negligently

supervised his security guard.                       That is, assuming Talley proved

his   negligent        supervision           claim     against       Mustafa,         would    the

insurance policy require Auto-Owners to indemnify Mustafa for

the   damages        caused      by    Mustafa's       negligence?          See       Estate    of

Sustache     v.      Am.      Family      Ins.       Co.,     2008 WI 87,       ¶29,     311
Wis. 2d 548, 751 N.W.2d 845 (court is to assume plaintiff will

prove his case in determining whether the insured has coverage).

      ¶40   Under the guise of answering the coverage question,

the   majority         instead        scrutinizes        the     merits      and       perceived

weaknesses        of    Talley's         negligent           supervision         claim.          It

concludes that the insurance policy does not provide coverage

for Talley's negligent supervision claim against Mustafa because

the claim cannot succeed.

      ¶41   In reaching its conclusion, the majority errs in two

distinct    ways.            First,      the     majority       fails      to    analyze       the
accident     from          the        standpoint        of     the      insured,         thereby

misconstruing          the    injury-causing           events     alleged        in    Talley's

complaint.        Second,        it     misunderstands the court's task at a

coverage trial.

      ¶42   I     determine           that     when     correctly       viewed        from     the

standpoint of the insured and when the court properly adheres to

its task at a coverage trial, the insurance policy provides

coverage     for       Talley's         negligent        supervision        claim        against
Mustafa.    Accordingly, I respectfully dissent.

                                                 1
                                                                    No.   2015AP2356.awb

                                           I

       ¶43   Archie Talley alleges that he suffered damages as a

result of Mustafa's negligent failure to properly supervise a

security     guard       employed    at   Mustafa's      liquor     store     and    food

market.      The complaint alleges that after initiating a verbal

altercation with Talley as Talley entered Mustafa's store, the

security guard punched Talley twice in the face.                     At the time of

the   assault,     Mustafa      carried     a    business       liability    insurance

policy with Auto-Owners Insurance Company that covered bodily

injuries caused by accidents (e.g. negligent acts).                          See Doyle

v.    Engelke,     219 Wis. 2d 277,     ¶¶23-24,      580 N.W.2d 245    (1998)

(explaining that negligent acts constitute "accidents").

       ¶44   Specifically,          the   policy       covers    bodily     injury     or

property damage caused by an "occurrence."                       See majority op.,

¶3.    The policy defines an "occurrence" as "an accident[.]" An

exclusion     to     the    liability     coverage       provides     that:         "This

insurance does not apply to:                a. 'Bodily injury' or 'property

damage'      expected      or   intended        from    the     standpoint     of     the
insured."     Id. (emphasis added).

       ¶45   The majority rests its determination of no coverage

on the conclusion that there is no "occurrence" covered by the

policy.      It arrives at this conclusion because, in its view,

Mustafa cannot be liable for negligent supervision given that

"[i]ntentionally punching someone in the face two times is not

an accident under any definition."                 Majority op., ¶16.         Further,

it reasons that the law does not require Mustafa "to tell [the
security guard] not to punch customers in the face."                      Id., ¶28.

                                           2
                                                                                 No.    2015AP2356.awb

      ¶46     Of course, intentionally punching someone in the face

is not an accident from the standpoint of the assailant.                                             And,

of   course    the       law     does     not    require         Mustafa          to    say    to     the

security guard, "do not punch customers in the face."                                                Such

conclusions are obvious and do not require legal analysis.                                             It

is in its faulty legal analysis where the majority stumbles.

                                                 II

      ¶47     The    majority's           legal       analysis         suffers         from     tunnel

vision.       It    focuses         on    the    assault         by    the       security       guard,

thereby misconstruing the injury-causing event alleged in the

negligent supervision claim.

      ¶48     Talley          certainly      alleges        that       the       actual       physical

assault caused him injury, but that is not the only injury-

causing     event        he    alleges.          Additionally,             he        alleges    as     an

injury-causing event that Mustafa failed to properly supervise

his store's security guard.

      ¶49     Assuming Talley is successful in proving his negligent

supervision        claim       against     Mustafa,         he    will         have     proven       that
Mustafa     was     negligent        by    breaching         a    duty          of    care     owed    to

Talley;     the     security        guard's      assault         was       a    cause-in-fact          of

Talley's    injury;           and   Mustafa's         failure         to       properly       train    or

supervise     his        security        guard    was       the       cause-in-fact            of     the

assault.          That    is,       Talley      will    have       proven            that    Mustafa's

negligent failure to properly supervise his security guard was a

cause-in-fact of the assault.

      ¶50     "[T]he          determination            of    whether             an         injury     is
accidental under a liability insurance policy should be viewed

                                                  3
                                                                       No.    2015AP2356.awb

from the standpoint of the insured."                      Schinner v. Gundrum, 2013
WI 71,    ¶52,     349 Wis. 2d 529,         833 N.W.2d 685.         Whether     the

assailant acted intentionally has no bearing on this question.

Indeed,       Talley        concedes    that       the     assault     itself      was    an

intentional act, which is not covered by the Auto-Owners policy.1

Thus, our focus should be on the negligent supervision claim

against Mustafa only.

       ¶51    Insurance contracts are interpreted as they would be

understood      by     a     reasonable    person         in   the   position      of    the

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

¶23, 268 Wis. 2d 16, 673 N.W.2d 65.                      Mustafa's insurance policy

covers       bodily    injuries        caused     by     his   negligent       acts.        A

reasonable insured would understand this to cover damages caused

by the insured's negligent failure to properly supervise and

train his security guard.

       ¶52    Further,        a   reasonable       insured     would    not    understand

that the policy's intentional-act exclusion precluded coverage

for a negligent supervision claim.                       See id., ¶24 (if the claim
triggers an initial grant of coverage, the court then determines

whether any exclusions preclude coverage of the claim).                                 There

is nothing in the record to indicate that Mustafa intended the

assault.       Thus from the standpoint of the insured, the assault

was    unintended          and    therefore       an     accident,     constituting       an

"occurrence" under the policy.

       1
           See Resp. Br. at 22.

                                              4
                                                                              No.      2015AP2356.awb

                                                  III

      ¶53     The      majority           additionally          errs         by     impermissibly

relying     on        the     perceived       weakness           of     Talley's          negligent

supervision claim to determine that the insurance policy does

not provide coverage for that claim.                            In the majority's view,

there   can      be    no    coverage       for       Talley's        negligent        supervision

claim because the claim cannot succeed.                          See majority op., ¶¶28-

29.

      ¶54     This line of reasoning reflects a misunderstanding of

the court's task at a coverage trial.                           At a coverage trial, the

court's     task      is     to    determine       if    the    language          of    the   policy

requires the insurance company to indemnify its insured if the

plaintiff's        claims         against    the      insured     are        successful.            See

Estate of Sustache, 311 Wis. 2d 548, ¶29 (court is to assume

plaintiff will prove his case in determining whether the insured

has coverage); see also Olson v. Farrar, 2012 WI 3, ¶38, 338
Wis. 2d 215,          809 N.W.2d 1        (quoting          Estate    of        Sustache,        311
Wis. 2d 548, ¶29).                In completing this task, the court should
not   focus      on    the        plaintiff's         likelihood        of    success         on    the

merits.       Instead, the court should concern itself                                   only      with

whether coverage is required by the language of the policy,

assuming the plaintiff's claims are successful.

      ¶55     There         are    good     reasons       why    the     court         should       not

entertain     merit-based            arguments          made    during       the    course         of   a

coverage trial.              Such a practice places the insured in a very

awkward     position.              When     the    insurance          company          argues      that
coverage does not exist because the plaintiff's claims are too

                                                  5
                                                                      No.    2015AP2356.awb

weak to succeed, what is the insured to do?                         Should the insured

argue that the claims against him lack merit?                          Or the insured

could       argue      that     the    plaintiff's         claims    are     capable       of

succeeding,          and     thus   coverage       would    be    afforded     under       the

language of the policy assuming that the plaintiff would prove

the case against the insured.

          ¶56    It appears that each possibility presents the insured

with a catch-22.              If the insured argues that the claims brought

against the insured are strong enough to proceed to trial (thus

strengthening          the    insured's    argument        that   coverage        should    be

afforded), he undermines his argument at the liability phase

that the plaintiff's claim lacks merit.                       On the other hand, if

the insured instead asserts that the claims against the insured

are too weak to proceed to trial in order to avoid undermining

the       insured's     merit-based       arguments        against    the    plaintiff's

claims,         he   argues    against    his      own   interest    in     the    coverage

dispute and risks losing the benefit of insurance coverage.

          ¶57    This untenable choice can be avoided by courts simply
adhering to the task at hand in a coverage dispute:                          determining

whether the language of the policy would require the insurance

company to indemnify the insured for damages arising out of a

particular claim assuming that the plaintiff is successful in

proving that claim at trial.

          ¶58    The majority's failure to understand the court's task

at    a    coverage        trial    likewise    portends     to     undercut      the   well

established procedure that when coverage is disputed, coverage
and liability issues are bifurcated at trial.                         See, e.g., Marks

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                                                                         No.    2015AP2356.awb

v.    Houston      Cas.   Co.,     2016 WI 53,   ¶63,   369 Wis. 2d 547,           881
N.W.2d 309 (quoting Prof'l Office Bldgs., Inc. v. Royal Indem.

Co., 145 Wis. 2d 573, 585, 427 N.W.2d 427 ("Where coverage is an

issue, bifurcated trials are the norm."); Elliott v. Donahue,

169 Wis. 2d 310,       318,     485 N.W.2d 403        (1992)       (explaining         that

"the insurer should not only request a bifurcated trial on the

issues    of coverage and liability,                  but   it   should       also       move    to

stay any proceedings on liability until the issue of coverage is

resolved").

       ¶59     A    motion    to    bifurcate         the    coverage         and    liability

trials was made and granted in this case.                             Yet, if coverage is

denied on the basis that the claim at issue cannot succeed on

the merits, why would the circuit court need to bifurcate the

issues of liability and coverage in the first instance?                                    If it

is truly proper to raise merit-based arguments against a claim

in the context of a coverage dispute, there seems to be little,

if any, need to bifurcate the issues of coverage and liability

because      the     argument      against       coverage        is    also    an        argument
against liability.

                                                IV

       ¶60     The     majority          opinion          misunderstands            both        the

allegations in the complaint and the applicable law regarding

coverage       trials.        It   ignores          Talley's     claim    that       Mustafa's

negligent supervision of his security guard was a cause-in-fact

of the assault, and mistakenly engages in an analysis of the

merits    of       Talley's   negligent         supervision       claim.            It    instead
should cabin its analysis to whether coverage would be afforded

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                                                                       No.    2015AP2356.awb

under the language of the policy assuming Talley succeeds in

proving his negligent supervision claim.

    ¶61      I    conclude         that   the       policy    provides       coverage    for

Talley's     claim        of       negligent        supervision    against         Mustafa.

Properly viewed from Mustafa's standpoint, the security guard's

punch   of       Talley      was    an    accident      and     therefore      a   covered

"occurrence."

    ¶62      For       the     reasons     set      forth     above,   I      respectfully

dissent.

    ¶63      I    am    authorized        to   state    that    Justices       SHIRLEY    S.

ABRAHAMSON and DANIEL KELLY join this dissent.

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                                                                     No.   2015AP2356.dk

      ¶64   DANIEL    KELLY,      J.     (dissenting).          In     the    broadest

sense, there are three relevant analytical phases in this case.

The first inquires into whether the plaintiff's complaint states

a   cause   of    action   upon    which      relief     can    be     granted        (the

pleadings phase).      The second addresses whether the defendant's

commercial general liability insurance policy provides coverage

for the claimed damages (the coverage phase).                    And the third is

the trial on the merits of the plaintiff's cause (the merits

phase).     This case required us to focus on the coverage phase.

That is, we were supposed to be reviewing whether Mr. Mustafa's

insurance    policy   provided         coverage   for   Mr.     Talley's      damages.

However, we allowed a mélange of insurance provisions, pleading

disputes, and policy questions to divert us into the first and

third phases.      And there we foundered.

      ¶65   The    circuit     court       wisely       bifurcated         the        trial

proceedings in this case so that the parties could determine

whether the policy provides coverage for the alleged tort (the

coverage    phase)     prior      to     litigating      the     merits          of    the
plaintiff's complaint (the merits phase).                      The coverage phase

calls upon the court to answer one——and only one——question:                              If

the plaintiff should prevail in the merits                      phase, would the

insurance policy cover the damages?               If not, the court dismisses

the insurer; otherwise, the insurer remains for the duration.

      ¶66   The purpose of the coverage phase is not to decide

whether the plaintiff has stated a good cause of action (the

pleading phase), nor is it to try the merits of the plaintiff's
claim (the merits phase).          The purpose of the coverage phase is

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                                                                          No.      2015AP2356.dk

to     do    nothing       but        authoritatively      construe          the     insurance

contract.         That is to say, the court takes as its starting point

that       the   plaintiff       will      win   his     case,    and     based       on    that

assumption, it determines whether the policy provides coverage.

Estate of Sustache v. Am. Family Mut. Ins. Co., 2008 WI 87, ¶29,

311 Wis. 2d 548, 751 N.W.2d 845 ("The insurer's duty to continue

to defend is contingent upon the court's determination that the

insured       has      coverage       if   the   plaintiff       proves       his     case.").

Instead of focusing on the coverage-phase question, the court's

opinion dwelled sometimes on the pleading phase, sometimes on

the merits phase.              But it gave little attention to the actual

coverage question before us.

                                 I.    THE PLEADINGS PHASE

       ¶67       The    portion       of   the   court's     opinion         spent     on   the

pleadings         phase    improperly        required      Mr.    Talley's           negligent

supervision            claim   to      satisfy       a   standard       of      pleading     we

traditionally require only of matters sounding in fraud.1                                      A

plaintiff may succeed with such a claim if, as a factual matter,

       1
       Compare   Wis.   Stat.  § 802.03(2)   (2015-16)  ("In   all
averments of fraud or mistake, the circumstances constituting
fraud or mistake shall be stated with particularity."), and John
Doe 1 v. Archdiocese of Milwaukee, 2007 WI 95, ¶39, 303
Wis. 2d 34, 734 N.W.2d 827 ("We have interpreted this statute to
require that 'allegations of fraud must specify the particular
individuals    involved,   where   and   when   misrepresentations
occurred, and to whom misrepresentations were made.'" (quoting
Kaloti Enters., Inc. v. Kellogg Sales Co., 2005 WI 111, ¶21, 283
Wis. 2d 555, 699 N.W.2d 205)), with majority op., ¶16 ("Because
there are no facts in Talley's complaint (or in any extrinsic
evidence) alleging any specific separate acts by Mustafa that
caused Talley's injuries, there is no occurrence triggering
coverage for the negligent supervision claim.").

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the defendant's breach of its duty to train and supervise its

employee was a cause-in-fact of the plaintiff's actual damages.2

We have never required a heightened pleading standard for this

cause of action, and the court identifies nothing to suggest

otherwise.

       ¶68    And yet the court's analysis unmistakably demanded of

Mr.    Talley   something     more   than     notice-pleading.3      The    court

observed      that     "Talley's     complaint    alleges   only     that     the

'defendants' were negligent in failing to 'train and supervise

their      employees'   and   'failed    to    provide   adequate    or    proper

security' because the 'employees' 'were the parties who attacked

the plaintiff.'"        Majority op., ¶28.       This, the court concluded,

was insufficient.         "[T]he negligent supervision claim against

Mustafa can qualify as an occurrence only if facts exist showing

that       Mustafa's    own   conduct       accidentally    caused     Talley's

injuries."      Id., ¶16.

       2
       John Doe 1, 303 Wis. 2d 34, ¶16 ("A claim for negligent
supervision of an employee requires a plaintiff to plead and
prove all of the following: (1) the employer had a duty of care
owed to the plaintiff; (2) the employer breached its duty; (3) a
wrongful act or omission of an employee was a cause-in-fact of
the plaintiff's injury; and (4) an act or omission of the
employer was a cause-in-fact of the wrongful act of the
employee.").
       3
       "As a notice pleading state, Wisconsin law requires only
that a complaint 'set forth the basic facts giving rise to the
claims.'"    United Concrete & Constr., Inc. v. Red-D-Mix
Concrete, Inc., 2013 WI 72, ¶21, 349 Wis. 2d 587, 836 N.W.2d 807
(quoted source omitted).    "The purpose of a complaint in a
notice pleading jurisdiction is to provide 'sufficient detail'
such 'that the defendant, and the court, can obtain a fair idea
of what the plaintiff is complaining, and can see that there is
some basis for recovery.'" Id. (quoted source omitted).

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                                                           No.   2015AP2356.dk

    ¶69       Why wouldn't Mr. Talley's allegations be enough?             We

are still a notice-pleading state, so to the extent the court

was considering whether the complaint was sufficient, Mr. Talley

didn't have to do very much at all.           He needed to allege that

Mr. Mustafa had a duty, he breached it, and his breach caused

actual damages.      That's all.       He didn't need to identify the

nature   of    training   Mr.   Mustafa   should   have   provided   to   his

employee, or how it was deficient, or when the training should

have been done, or how frequently.4            That is to say, he had

absolutely no obligation to fill his complaint with discrete

facts capable of proving Mr. Mustafa's negligence and the causal

connection to his damages.

    ¶70       So the nature of the court's analysis is odd because

there is no precedent for a heightened standard of pleading for

negligent supervision claims.         But it is also odd because the

court should not have been conducting this analysis at all.                We

were not asked to review whether the circuit court should have

dismissed this case for failing to state a claim upon which
relief can be granted.          We were asked to determine whether the

insurance policy provides coverage, which assumes an adequately

pled cause of action.

    4
       The court says "the occurrence, in Talley's view, is
Mustafa's failure to tell Scott not to punch customers in the
face."   Majority op., ¶28.    That's one way of putting it, I
suppose.   A less patronizing way would be to say Mr. Talley's
view is that Mr. Mustafa failed to teach Mr. Scott how to de-
escalate tense situations so that verbal confrontations would
not turn physical.      That seems like a worthy subject of
training, yes? Especially for an employee (if employee he was)
with customer-facing responsibilities?

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                                                                  No.    2015AP2356.dk

                           II.    THE MERITS PHASE

    ¶71     The court then leapfrogged from the pleading phase all

the way to the merits phase to opine on whether Mr. Talley would

prevail on his claim.             But our opinion on that question is

pretty much the definition of irrelevant.                     Maybe      Mr. Talley

won't prevail.        If he doesn't, that won't say a thing about

whether the insurance policy covered the claim.                         And that is

because the coverage phase assumes not just an adequately-pled

cause of action, but a successful one.                Estate of Sustache, 311
Wis. 2d 548,    ¶22     ("[T]he    insurer    is     under   an    obligation      to

defend only if it could be held bound to indemnify the insured,

assuming that the injured person proved the allegations of the

complaint,    regardless     of    the    actual     outcome      of    the   case."

(quoting Grieb v. Citizens Cas. Co. of New York, 33 Wis. 2d 552,

558, 148 N.W.2d 103 (1967)).

    ¶72     The court erred not just because it had no business

addressing the merits of Mr. Talley's case, but also in the

substance of its analysis.               Specifically, the        court made no
allowance for the nature of a negligent supervision claim, which

always involves concurrent causation.                 Instead, it required a

separate and distinct line of causation between Mr. Mustafa and

Mr. Talley.     The court said coverage will only exist "[w]hen a

plaintiff     alleges    [actionable]        facts    independent         from    the

intentional act giving rise to the injury."                  Majority op., ¶30.

That is to say, "the negligent supervision claim against Mustafa

can qualify as an occurrence only if facts exist showing that
Mustafa's own conduct accidentally caused Talley's injuries."

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                                                                            No.    2015AP2356.dk

Id., ¶16.      It then concluded that "when a negligent supervision

claim is based entirely on an allegation that an employer should

have trained an employee not to intentionally punch a customer

in   the    face,    no    coverage      exists."         Id.;       see    also     id.,     ¶29

("Because     Talley       does    not    present         any    separate           basis    for

Mustafa's     negligence——any            independent        act       by     Mustafa         that

accidentally caused Talley's injury——no coverage exists.").

      ¶73    This     entirely          misses      the     fact           that      negligent

supervision claims never involve a separate line of causation

between     the    employer    and      the   victim.           To    the    contrary,       the

causal line always, every single time, goes from the employer,

through the employee, to (in this case) Mr. Talley's face.                                     We

succinctly        described   the       proper     analysis          in    Miller:          "With

respect to a cause of action for negligent hiring, training or

supervision, we determine that the causal question is whether

the failure of the employer to exercise due care was a cause-in-

fact of the wrongful act of the employee that in turn caused the

plaintiff's       injury."        Miller      v.    Wal-Mart         Stores,        Inc.,     219
Wis. 2d 250,        262,    580 N.W.2d 233        (1998).              This,      we     said,

"requires two questions with respect to causation.                                The first is

whether the wrongful act of the employee was a cause-in-fact of

the plaintiff's injury.                 The second question is whether the

negligence of the employer was a cause-in-fact of the wrongful

act of the employee."             Id.    There is no separate causal pathway

from Mr. Mustafa to Mr. Talley.                    It must go through Mr. Scott,

or there is no causality at all.

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                                                                         No.       2015AP2356.dk

    ¶74     The     facts     the    court        faults       Mr.     Talley         for    not

presenting   are,     to    the     extent       he    has    them,    those        that    will

support the two jury questions described in Miller.                                 The court

hasn't seen them, naturally, because we haven't yet arrived at

the merits phase.           Mr. Talley will need to be concerned if he

can't marshal them once the trial commences.                          But not now.           So,

in concluding there is no coverage because Mr. Talley hasn't

sufficiently supported his claim, the court jumped the gun.                                  And

if incorporating the merits inquiry into the coverage analysis

is not jumping the gun, there was hardly any reason to bifurcate

the proceedings in the first place, was there?

                            III.    THE COVERAGE PHASE

    ¶75     If we had narrowed our attention to the proper phase

under consideration, the question we are resolving would be of

little    moment.      We     have    previously             held   that     a     commercial

general    liability        insurance       policy       with       terms      functionally

identical to the ones we review today provides coverage for an

employer's   negligent        training       or       supervision.           See     Doyle    v.
Engelke, 219 Wis. 2d 277, ¶¶16-17, 19, 580 N.W.2d 245 (1998).

And the court agrees, at least in theory, that this is so.

Majority    op.,    ¶30     ("This     is    not       to     say     that     a     negligent

supervision claim will never trigger insurance coverage.").                                   So

maybe the point of this case is to overrule Doyle's holding that

negligent supervision of an employee qualifies as an occurrence

within the meaning of CGL policies like the one at issue here.

If that is what we are doing, we should just say so.                                Otherwise,
this case presents nothing conceptually distinct from Doyle, a

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                                                                       No.    2015AP2356.dk

case we decided twenty years ago.                      Perhaps insurers should be

protected    from    claims     of   this       nature.      The      answer     to    that

question, however, is beyond both my ken and our authority.                             But

I do know there has been nothing in the last two decades that

has   prevented     insurers     from   protecting         themselves         through    an

appropriately-drafted exclusion from coverage.

                                            *

      ¶76   But     perhaps     this    was       not     really      about     insurance

coverage    at    all,   and    we   were       looking    for   an    opportunity       to

declare that negligent supervision claims do not lie when the

employee's       conduct   is    covered         by     criminal      statutes.         See

majority     op.,    ¶28   ("Typically,           an     employee's      training       and

subsequent supervision does not include a segment on how to

refrain from punching others because the assault and battery

statutes already prohibit such conduct.").                       If this is what we

were about, we should have said so and given our reasons for

restricting the scope of this tort.                    Maybe that would even be a

good policy choice.        But I would prefer to leave that question
to the legislature.

      ¶77   Additionally, if we have restricted the scope of this

tort, we should recognize the effect of that ruling.                                  If we

really meant what we said in paragraph 28, then Mr. Talley has

no meritorious claim against Mr. Mustafa.                        And if that is so,

our mandate should include dismissal of the case.                        That would be

quite a curiosity——Mr. Talley lost on the merits of his cause

while the merits phase of his case was still stayed.                               On the

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                                                             No.   2015AP2356.dk

other hand, perhaps that odd result is a hint that we have

gotten ahead of ourselves.

    ¶78   I believe the court of appeals got this case exactly

right.    For    the   reasons    expressed    in   that   opinion,   and    the

reasons I have given above, I respectfully dissent.

    ¶79   I     am   authorized   to   state   that   Justices     SHIRLEY   S.

AMBRAHAMSON and ANN WALSH BRADLEY join this dissent.

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