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Wisconsin Court of Appeals Holds There is No Insurance Coverage for Negligent Misrepresentation Claims Against the Archdiocese of Milwaukee Because the Alleged Negligent Misrepresentations Are Not an “Occurrence” but Rather Are Volitional Acts

In John Doe 1 v. Archdiocese of Milwaukee, 2010 WL 4723728 (Wis. Ct. App. Nov. 23, 2010), the Wisconsin Court of Appeals held that the Archdiocese of Milwaukee was not entitled to insurance coverage for the plaintiffs’ negligent misrepresentation claims because the representations were not an “occurrence” but rather were volitional acts. The consolidated appeal arose out of allegations of sexual abused by priests within the Archdiocese of Milwaukee. The complaints alleged that the Archdiocese represented that the priests had not previously molested children and that children were safe in their presence, even though the Archdiocese knew that the priests had previously molested children.

The court held that there was no coverage because the alleged misrepresentations did not constitute an occurrence. The court relied on the definition of “occurrence” within the insurance policies and relied on prior precedent. The policies defined “occurrence” as “an accident,” which the Wisconsin Supreme Court has defined as “an unexpected, undesirable event,” or an “unforeseen incident” stemming from a “lack of attention.” Previous cases, such as Everson v. Lorenz, 2005 WI 51, 280 Wis. 2d 1, 695 N.W.2d 298 and Stuart v. Weisflog’s Showroom Gallery, Inc., 2008 WI 86, 311 Wis. 2d 492, 753 N.W.2d 448, have held that alleged negligent misrepresentations constitute volitional acts for which there is no coverage. In Stuart, the Wisconsin Supreme Court reasoned that, for an event to be viewed as an accidental occurrence, the causal event must be accidental, even if the result is unexpected. Accordingly, the court of appeals observed that the focus must be not on the ultimate injury allegedly inflicted by the priests, but rather on the underlying acts of the Archdiocese that resulted in the injury. Those underlying acts were the alleged misrepresentations that children would be safe in the presence of priests when the Archdiocese was aware of their history of sexual abuse.

The court concluded that the underlying acts—the misrepresentations—were not accidental. The court reasoned that the “affirmative representation of safety by the Archdiocese did not occur by chance, nor was it unforeseen or unintended . . . . Rather, the misrepresentation of safety . . . constitutes an act of making a false or misleading statement about something.” (Internal citations and quote marks omitted.) Further, the court observed that, while the Archdiocese may not have intended to harm the plaintiffs, it “certainly intended to keep its knowledge of the priests at issue to itself, ultimately leading to the plaintiffs’ injuries.” Consequently, the underlying acts of the Archdiocese were volitional, precluding coverage due to the absence of an “occurrence.”

John Doe 1 v. Archdiocese of Milwaukee, 2010 WL 4723728 (Wis. Ct. App. Nov. 23, 2010)

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About this Author

Heidi Vogt, von Briesen Roper Law Firm, Milwaukee, Insurance and Litigation Law Attorney

Heidi Vogt is a Shareholder and Co-Chair of the Litigation and Risk Management Practice Group as well as the Chair of the Insurance Coverage and Risk Management Section. Her practice focuses on insurance coverage litigation, commercial disputes, constitutional law, and complex litigation. She has represented insurance companies in Wisconsin and across the country in both state and federal courts in complex insurance coverage matters for more than 20 years.

She represents and counsels insurance clients on a wide variety of...

Douglas Raines, Von Briesen Roper Law Firm, Milwaukee, Real Estate, Insurance And Litigation Law Attorney

Doug Raines is a Shareholder in the firm’s Litigation and Risk Management Practice Group. His practice focuses primarily on commercial litigation, insurance defense, and appellate work.

Doug has helped clients achieve positive outcomes through settlement of numerous cases ranging from slip-and-fall, breach of contract, landlord-tenant, and insurance coverage issues.

Before joining von Briesen, Doug served as the law clerk to the Hon. Patience D. Roggensack of the Wisconsin Supreme Court (2007 – 2008 term).

Doug is the author or co-author of multiple law review articles. His work on affirmative action jurisprudence, New Federalism, and Wisconsin’s risk contribution doctrine has been published in the Marquette Law ReviewBoston University Law Review (co-author with Scott A. Moss), and Pace Environmental Law Review (co-author with Peter G. Earle and Fidelma Fitzpatrick), respectively.