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Damore v. Winnebago Park Association

decided: June 1, 1989.


Appeal from the United States District Court for the Eastern District of Wisconsin, No. 86 C 607, Thomas J. Curran, Judge.

Flaum, Ripple, and Kanne, Circuit Judges.

Author: Flaum

FLAUM, Circuit Judges

This is a diversity action involving the construction of an exclusion clause in a homeowner's insurance policy. The district court granted summary judgment to the insurance company, holding that the personal liability section of the policy did not provide coverage to the named insureds for bodily injuries sustained by the their son. We affirm.


American Family Mutual Insurance Co. ("American Family") issued two homeowner's policies to John and Barbara Damore (the "named insureds"), one insuring the couple's summer cottage on Lake Winnebago, Wisconsin, and the other insuring the couple's primary residence in Brookfield, Wisconsin. Under the liability sections of both policies, American Family agreed "to pay, up to our limit of liability, all sums for which any insured is legally liable because of bodily injury or property damage covered by this policy." The policies defined the term "insured" as follows:

Insured means you and your relatives if residents of your household. It also means any other person under the age of 21 in your care or in the care of your resident relatives.

The policies contained an exclusion clause stating that the personal liability coverage did not apply to bodily injury sustained by:

any insured, any relative of any insured who resides on the insured premises, or any employee of any insured other than a domestic employee.

In the summer of 1983, the Damores' son, Michael, was injured in a diving accident at the Lake Winnebago cottage. Michael brought a negligence suit against his parents, American Family, and the other named defendants. American Family asserted that neither policy provided coverage for Michael's injuries because he was an insured under both policies. Michael and American Family each moved for summary judgment on the question of coverage. Michael conceded that he was a resident of his parents' Brookfield home and, thus, an insured under the Brookfield policy.' He argued, however, that he was not a resident of the "Lake Winnebago cottage household" and, therefore, not an insured under the Lake Winnebago policy. The district court granted summary judgment to American Family. Thereafter, John and Barbara Damore stipulated to a judgment being taken against them by their son in the amount of $100,000. Michael Damore now appeals the district court's grant of summary judgment to American Family, contending that his injuries are covered by the Lake Winnebago policy.*fn1


The insurance policy at issue in this case provides a type of coverage that is commonly found in homeowner's liability and automobile liability policies: coverage to the named insureds and their families for liability to third parties. Policies of this type often use expressions such as "residents of your household," "members of your household," or "members of your family" in the definition an/or exclusion sections of the policy. The purpose of such expressions is twofold. First, the expression may be used in the definition section of the policy in order to expand the meaning of the term "insured" to include family members whose liability the named insured would ordinarily want the policy to cover -- e.g., spouse, children, or other persons in the care of the named insured. See National Farmers Union Property & Casualty Co. v. Maca, 26 Wis. 2d 399, 132 N.W.2d 517, 520 (Wis. 1965). Second, the expression may be used in the exclusion section of the policy in order to exempt the insurer from providing liability coverage to one family member for negligently causing injury to another family member. In such a situation, the negligent party "'would be apt to be partial'" to the injured party. National Farmers, 132 N.W.2d at 520 (quoting Tomlyanovich v. Tomlyanovich, 239 Minn. 250, 58 N.W.2d 855 (Minn. 1953)). "Thus, the exclusion protects insurers from situations where an insured might not completely cooperate and assist an insurance company's administration of the case." A.G. By Waite v. Travelers Insurance Co., 112 Wis. 2d 18, 331 N.W.2d 643, 645 (Wis.App. 1983); see also Swart v. Rural Mutual Insurance Co., 117 Wis. 2d 478, 344 N.W.2d 719, 721 (Wis.App. 1984).

The instant policy defines "insured" to include "residents of your household," with the word "your" referring to John and Barbara Damore. The policy excludes coverage for bodily injury sustained by "any insured." Thus, if Michael Damore was a resident of his parents' household on the date of the accident, he was an "insured" under the policy. As a result, he would be afforded liability coverage if he were to negligently cause injury to a third party, but any injuries sustained by him as a result of his parents' negligence would not be covered.

Wisconsin courts have long held that the expression "resident of the household" is an unambiguous phrase, capable of plain and common meaning, and that it is synonymous with the expressions "member of the household" and "member of the family." See Quinlan v. Coombs, 105 Wis. 2d 330, 314 N.W.2d 125, 127-29 (Wis.App. 1981) and cases cited therein. ...

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