Day v. Allstate Indemnity Co.
798 N.W.2d 199
Wis.2011Background
- Wendy Day seeks review of the court of appeals' reversal of summary judgment denying coverage for her wrongful death claim under Allstate's homeowner policy issued to Clinton and Holly Day.
- Policy includes a family exclusion: no coverage for bodily injury to an insured when any benefit would accrue to an insured.
- Wendy is Emma Day's mother; Clinton Day is her ex-husband and Emma's father; Wendy and Clinton are divorced with joint custody.
- The circuit court held Wendy's wrongful death claim potentially covered and addressed the survival claim (Emma's pre-death injuries) separately; the court of appeals concluded Clinton would benefit from Wendy's recovery, precluding coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the family exclusion unambiguously preclude coverage for Wendy’s wrongful death claim? | Day argues exclusion is ambiguous and does not unambiguously apply. | Day contends Clinton would benefit; exclusion applies. | No; the exclusion is not unambiguous in precluding Wendy’s claim. |
| What is the meaning of 'benefit' in the family exclusion? | Benefit includes more than direct proceeds, per Whirlpool; should include indirect benefits. | Benefit should be limited or defined to exclude defense/indemnification rights. | 'Benefit' is not unambiguously inclusive of defense/indemnification rights; ambiguity favors coverage. |
| Do insurance proceeds accrue to an insured when a wrongful death recovery is pursued by a non-insured? | Clinton could indirectly benefit as a beneficiary, potentially triggering exclusion. | Recovery belongs to Wendy or the wrongful death class; Clinton's right to sue does not equal ownership. | No direct accrual to Clinton under these facts; ownership and right to sue are separate. |
| Does Chang v. State Farm or Whirlpool compel a different outcome regarding ownership of wrongful death recovery? | Chang allows individualized damages; Wendy's recovery need not be split with Clinton. | Whirlpool supports exclusion; potential indirect benefits could negate coverage. | Chang governs ownership; Whirlpool supports excluding coverage for potential collusion; outcome favors not unambiguous preclusion. |
| Should the case be remanded for further proceedings consistent with policy interpretation? | Yes, to determine initial grant and exclusions under proper interpretation. | Remand not necessary if exclusion unambiguous. | Yes; the court remands for further proceedings consistent with nuanced policy interpretation. |
Key Cases Cited
- Whirlpool Corp. v. Ziebert, 197 Wis. 2d 144 (Wis. 1995) (unambiguous family exclusion contemplates direct/indirect benefits to an insured)
- Shannon v. Shannon, 150 Wis. 2d 434 (Wis. 1989) (family exclusions serve legitimate purpose and are not contrary to public policy)
- Keithley v. Keithley, 95 Wis.2d 136 (Ct. App. 1980) (wrongful death damages not automatically equal division among beneficiaries)
- Chang v. State Farm Mut. Auto. Ins. Co., 182 Wis.2d 549 (Wis. 1994) (ownership of wrongful death recovery may be independent of right to sue; individualized damages possible)
- Bruflat v. Prudential Prop. & Cas. Ins. Co., 233 Wis.2d 523 (Wis. Ct. App. 2000) (group discussion on wrongful death recovery allocation previously relied upon)