Water Well Solutions Service Group Inc. v. Consolidated Insurance

REILLY, R J.

¶ 19. {dissenting). I respectfully dissent as I do not believe the four-comers rule is "well-established" in Wisconsin. Majority, ¶ 1. Rather, the *240rule is fraught with ambiguity: we have two court of appeals decisions that conflict on the question of whether exceptions to the four-comers mle are recognized in Wisconsin1 and one supreme court case that implies exceptions do exist.2

¶ 20. Despite this court's conclusion that the cases departing from the four-comers mle had been "tacitly overruled," Estate of Sustache v. American Family Mut. Ins. Co., 2007 WI App 144, ¶ 21, 303 Wis. 2d 714, 735 N.W.2d 186, we have no supreme court decision explicitly saying so, Cook v. Cook, 208 Wis. 2d 166, 189-90, 560 N.W.2d 246 (1997). In 2010, we certified the question of whether the four-comers mle governs an insurer's duty to defend. The supreme court accepted the certification. Wilkinson v. Arbuckle, 2011 WI 1, 330 Wis. 2d 442, 793 N.W.2d 71. Unfortunately for the bench and bar, the parties voluntarily dismissed the appeal upon the court accepting the certification.

¶ 21. The viability or scope of the four-comers rule requires a clear answer from our supreme court. The four-corners rule as defined by the majority allows a litigant who is not a party to a contract of insurance to unilaterally control whether a contract (the insurance policy) provides coverage when that litigant has no privity in the contract.

*241¶ 22. A simple example suffices: Plaintiff Doe files a complaint with the sole allegation that Defendant Doe intentionally struck him causing injuries. Defendant Doe's insurer refuses, pursuant to the four-corners rule, to provide a defense or coverage as the policy expressly precludes coverage for intentional acts. The true facts, however, are that Plaintiff Doe was an intruder into Defendant Doe's home and Defendant Doe injured Plaintiff Doe in the course of defending himself. The rigid application of the four-corners rule does not allow Defendant Doe to challenge Plaintiff Doe's characterization of the dispute as it relates to the question of insurance applicability.

¶ 23. In this case, Water Well presented evidence that it used a subcontractor to cut and rethread the pipe for the well pump. All of the damages alleged in the complaint against Water Well were caused by the unthreading of the well pump from the pipe column. As Water Well presented evidence that the damages alleged in the complaint were arguably not a result of its work or product, but instead that of a subcontractor, it should have been provided a defense by Consolidated and possibly coverage. Because of the application of the four-corners rule, however, Consolidated successfully argued that it was absolved from providing both the defense and coverage that it had promised Water Well by contract that it would provide.

¶ 24. I dissent as Water Well, a party to the insurance contract, should be allowed to present facts to the court relevant to the issue of whether a policy of insurance provides coverage. It is absurd to allow an entity that has no privity of contract to dictate whether the contract provides defense and coverage.

Compare Professional Office Bldgs., Inc. v. Royal Indem. Co., 145 Wis. 2d 573, 580-81, 427 N.W.2d 427 (Ct. App. 1988) ("the duty to defend is dependent solely on the allegations of the complaint"), with Berg v. Fall, 138 Wis. 2d 115, 122-23, 405 N.W.2d 701 (Ct. App. 1987) (noting that an insurer's duty to defend is not limited by the allegations in the complaint).

Grieb v. Citizens Cas. Co., 33 Wis. 2d 552, 558, 148 N.W.2d 103 (1967) ("There are at least four exceptions to the [four-corners] rule ... and generally the insurer who declines to defend does so at his peril.").