825 N.W.2d 297
Wis. Ct. App.2012Background
- Hendricks contracted to prepare the site and install concrete for service stations, including stamped and colored concrete.
- Pamperin sued Hendricks, alleging concrete defects and that work was not done in a workmanlike manner, causing damages and future replacements.
- Pekin agreed to defend Hendricks subject to reserving its rights on coverage; discovery showed only concrete was damaged, while business interruption and asphalt damages were potential future harms.
- Pekin moved for summary judgment, arguing no policy coverage and applicability of business-risks exclusions k. and l.; the trial court granted the motion.
- Hendricks appeals, contending there is coverage under the CGL policy, and that Pekin’s defense and potential indemnity duties should not be denied without proper determination of coverage.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the CGL policy provide coverage for Pamperin's alleged property damage? | Hendricks asserts property damage or loss of use from damaged concrete supports coverage. | Pekin argues there is no occurrence or applicable coverage due to policy exclusions. | No coverage; no occurrence and applicable exclusions bar recovery. |
| Is the products—completed operations hazard a separate coverage grant independent of Coverage A? | Hendricks contends separate, expensive products/ completed operations coverage exists. | Pekin treats products/completed operations as part of Coverage A with its own exclusions. | Not a separate grant; hazard is part of Coverage A with corresponding limits. |
| Do business-risk exclusions apply to deny coverage for Hendricks's damaged concrete? | Hendricks argues exclusions should not apply to products/work damage. | Exclusions k. and l. preclude coverage for damage to Hendricks's product/work. | Exclusions apply; no coverage for damaged concrete. |
| Did Pekin's delay in disclaiming coverage affect its duty to defend? | Maxwell v. Hartford issue suggested delay precludes denial of defense. | Pekin's defense delay did not prejudice Hendricks beyond what was allowed. | No reversible prejudice; Pekin validly defended pending resolution. |
Key Cases Cited
- Olson v. Farrar, 338 Wis. 2d 215 (Wis. 2012) (four-corners rule not implicated for ongoing defense; coverage determination allowed)
- Estate of Sustache v. American Family Mut. Ins. Co., 311 Wis. 2d 548 (Wis. 2008) (insurer’s duty to defend contingent on coverage; duty may end if no coverage)
- Elliott v. Baumann, 286 Wis. 2d 667 (Wis. Ct. App. 2005) (duty to defend and coverage considerations clarified on appeal)
- Robert E. Lee & Associates, Inc. v. Peters, 557 N.W.2d 457 (Wis. Ct. App. 1996) (policy structure with separate forms; products/completed operations form distinct case context)
- Glendenning's Limestone & Ready Mix Co. v. Reimer, 721 N.W.2d 704 (Wis. Ct. App. 2006) (workmanship fault can give rise to an occurrence; not itself an occurrence)