Western National Mutual Insurance Co. v. Decker
2010 SD 93
| S.D. | 2010Background
- L.E.D. suffered permanent brain damage while in Sarah Decker's care in Benjamin Waldner's home on Jan 11, 2001.
- Sarah provided daycare for multiple children in Benjamin's home; no formal business name or written agreements; care occurred regularly.
- In 2000, Sarah cared for nine children from six families; compensation varied; payments were often informal.
- Joe Decker and Valerie used Sarah for their children; L.E.D. injury occurred during Sarah's ongoing child-care services.
- Western National Mutual Insurance sought a declaratory judgment that the policy did not cover injuries due to the daycare business exclusion.
- Circuit court held the policy unambiguously excluded coverage for injuries from Sarah's business activities; summary judgment for Western National.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Policy ambiguity regarding 'business' definition | Valerie: policy ambiguous; broad, open to interpretation. | Decker: policy unambiguous; terms clear when read as a whole. | Policy not ambiguous; plain meaning controls. |
| Whether Sarah's care constitutes a 'business' regularly provided for which she was compensated | Sarah regularly provided care for others and was compensated. | Care was casual or not regularly compensated; not clearly business. | Sarah's care met 'business' definition and compensation requirement. |
| Whether compensation requirement was met given day-of-accident facts | Compensation shown by overall paid care, not just day-of-accident. | Day-of-accident lack of compensation defeats 'compensated'. | Regular compensation across care period satisfied policy. |
| Whether the exception for activities related to business but not usually viewed as business applies | The exception applies; some day-care activities aren’t business. | Day-care on injury day related to business; exception not applicable. | Exception does not negate business exclusion; activity tied to business. |
| Coverage for negligent supervision by Benjamin Waldner | Injury related to supervised environment may be covered. | Injury resulted from business activities; exclusion applies regardless. | Even if negligent, exclusion applies because injury stems from business. |
Key Cases Cited
- Am. Family Mut. Ins. v. Elliot, 523 N.W.2d 100 (S.D. 1994) (unambiguous policy interpretation limits judicial expansion)
- Nat’l Sun Indust., Inc. v. S.D. Farm Bureau Ins. Co., 596 N.W.2d 45 (S.D. 1999) (policy ambiguity assessed against plain meaning)
- Auto-Owners Ins. Co. v. Hansen Hous., Inc., 604 N.W.2d 504 (S.D. 2000) (insurance contract interpretation; de novo review)
- Econ. Aero Club, Inc. v. Avemco Ins. Co., 540 N.W.2d 644 (S.D. 1995) (plain meaning governs; avoid strained interpretation)
- Ziegler Furniture and Funeral Home, Inc. v. Cicmanec, 709 N.W.2d 350 (S.D. 2006) (objective reading of policy words)