Sawyer v. West Bend Mutual Insurance

2012 WI App 92, 821 N.W.2d 250, 343 Wis. 2d 714, 2012 Wisc. App. LEXIS 544
CourtCourt of Appeals of Wisconsin
DecidedJuly 10, 2012
DocketNo. 2011AP902
StatusPublished
Cited by3 cases

This text of 2012 WI App 92 (Sawyer v. West Bend Mutual Insurance) is published on Counsel Stack Legal Research, covering Court of Appeals of Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sawyer v. West Bend Mutual Insurance, 2012 WI App 92, 821 N.W.2d 250, 343 Wis. 2d 714, 2012 Wisc. App. LEXIS 544 (Wis. Ct. App. 2012).

Opinions

CURLEY, EJ.

¶ 1. West Bend Mutual Insurance Company (West Bend) appeals the grant of summary judgment to Isaac Sawyer, doing business as A-l Security Locksmiths (A-l Security), on the issue of whether the insurance policy West Bend issued to defendant Atlas Heating and Sheet Metal Works, Inc. (Atlas) provides coverage under its "personal and advertising injury" provision for privacy violations stemming from an unsolicited "junk" fax, as alleged in Sawyer’s complaint against Atlas.1 West Bend argues the policy should not be construed to cover damages from Atlas's unsolicited fax because: (1) the policy solely covers individual privacy rights, and plaintiff A-l Security is a business; (2) the complaint does not allege facts describing a privacy violation covered by the policy's "personal and advertising injury" provision; and (3) there has been no "publication" of the fax as required by the policy. In the alternative, West Bend argues that even if there is coverage, it is excluded under the policy's "Knowing Violation of Rights of Another" exclusion. For reasons we discuss below, we affirm.

BACKGROUND

¶ 2. On or around December 9, 2005, Atlas sent an unsolicited "junk" fax advertisement to Sawyer's business, A-l Security. The advertisement was printed by A-l Security's fax machine, using its paper and its [719]*719toner. Sawyer had not given Atlas express invitation or permission to fax advertisements, nor did Sawyer have a business relationship with Atlas.

¶ 3. Consequently, Sawyer initiated a class action against Atlas, alleging that Atlas violated the federal Telephone Consumer Protection Act (TCPA), 47 U.S.C. § 227,2 by sending the "junk" fax to his place of business [720]*720as well as to thousands of others. Specifically, Sawyer claimed that Atlas was responsible for damages to his physical property because the junk fax consumed paper, toner, and caused general wear and tear to the fax machine. Sawyer also alleged that Atlas was responsible for damages for personal and advertising injury because the receipt of the unsolicited junk fax violated his right to privacy. The class action, originally filed in Milwaukee County Circuit Court, was removed to the Eastern District of Wisconsin based on federal question jurisdiction, and has been stayed pending resolution of the insurance coverage issue addressed in this court.

¶ 4. Sawyer also sued West Bend, Atlas's insurer. The West Bend policy, which was in effect when Atlas faxed the unsolicited advertisement, included general liability coverage for damages incurred by Atlas due to: (1) "property damage" caused by an "occurrence" and (2) "personal and advertising injury." The "personal and advertising injury" coverage contained a provision excluding coverage if the personal and advertising injury was "caused by or at the direction of the insured with the knowledge that the act would violate the rights of another and would inflict 'personal and advertising injury.'"

¶ 5. As pertinent to this appeal, Sawyer brought an action for declaratory judgment against Atlas and West Bend in the Milwaukee County Circuit Court to determine whether West Bend had a duty to defend and/or indemnify Atlas. The trial court determined that West Bend did not have a duty to defend or indemnify Atlas under the "property damage" provision of the [721]*721policy, but it did have a duty to defend Atlas under the "personal and advertising injury" provision of the policy.

¶ 6. The "Personal and Advertising Injury Liability" provision of the policy provided, in pertinent part: "We will pay those sums that the insured becomes legally obligated to pay as damages because of 'personal and advertising injury' to which this insurance applies." The policy defined "personal and advertising injuiy" in pertinent part as: "injury, including consequential 'bodily injury,' arising out of one or more of the following offenses: ... [o]ral or written publication, in any manner, of material that violates a person's right of privacy."

¶ 7. The "knowing violation of rights of another" exclusion provided, in pertinent part, that the insurance did not apply to: " '[pjersonal and advertising injury' caused by or at the direction of the insured with the knowledge that the act would violate the rights of another and would inflict 'personal and advertising injury' "

¶ 8. The trial court concluded that the plaintiff in the case was Sawyer as an individual and that his individual right to privacy was violated. The trial court also concluded that the language of the policy was ambiguous and consequently needed to be construed in favor of the insured. Specifically, the trial court deduced that the word "privacy" should include the right to seclusion. Additionally, the trial court concluded that the faxed advertisement was a "publication." Finally, the court held that the "knowing violation of rights of another" exclusion did not apply here because the allegations in the complaint provided for the possibility that Atlas may not have had the requisite knowledge that it was violating Sawyer's right of privacy; in other words, Atlas may have negligently, and not intentionally, violated Sawyer's right of privacy. West Bend now appeals.

[722]*722ANALYSIS

Standard of Review

¶ 9. Summary judgment is appropriate when determining insurance policy coverage. Home Ins. Co. v. Phillips, 175 Wis. 2d 104, 109, 499 N.W.2d 193 (Ct. App. 1993). We review a grant of summary judgment independently, applying the standards set forth in Wis. Stat. § 802.08(2) (2009-10),3 in the same manner as the trial court. See Danbeck v. American Family Mut. Ins. Co., 2001 WI 91, ¶ 9, 245 Wis. 2d 186, 629 N.W.2d 150. Summary judgment is appropriate if the material facts are undisputed and "the moving party is entitled to judgment as a matter of law." § 802.08(2). Additionally, "[t]he interpretation of an insurance contract is a question of law subject to de novo review." Danbeck, 245 Wis. 2d 186, ¶ 10 (emphasis added). Here, the only issue is whether West Bend has a duty to defend Atlas against Sawyer's federal suit. Because there are no material facts in dispute, we are presented with a question of law, which we review de novo. See Radke v. Fireman's Fund Ins. Co., 217 Wis. 2d 39, 42-43, 577 N.W.2d 366 (Ct. App. 1998).

¶ 10. Key to our determination is the rule that an insurer has a duty to defend as long as coverage is arguable or fairly debatable. Southeast Wis. Prof'l Baseball Park Dist. v. Mitsubishi Heavy Indus. Am., Inc., 2007 WI App 185, ¶ 41, 304 Wis. 2d 637, 738 N.W.2d 87. Whether an insurer has a duty to defend the insured is determined by the complaint without looking to extrinsic [723]*723evidence. Grube v. Daun, 173 Wis. 2d 30, 72, 496 N.W.2d 106 (Ct. App. 1992).

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2012 WI App 92, 821 N.W.2d 250, 343 Wis. 2d 714, 2012 Wisc. App. LEXIS 544, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sawyer-v-west-bend-mutual-insurance-wisctapp-2012.