Spotlight on an Insurance Coverage Case: Wiegert v. TM Carpentry

Wiegert c. TM Carpentry, LLCNo. 2020AP1833 (Wis. Ct. App. May 4, 2022)

In Wiegert A three-judge panel of the Third District Court of Appeals upheld the Sheboygan County Circuit Court’s granting of summary judgment, ruling that Acuity had no obligation to defend or indemnify its insured, Stone Creek, against claims by Terry and Deborah Wiegert that arose out of renovations carried out by Stone Creek on the Wiegerts’ home. The court determined that any alleged damage could only have arisen from the work of Stone Creek to raise the house from its foundation, and the damage therefore fell within the “k. (5)” of Acuity’s Liability Policy, prohibiting coverage for “[p]property damage” to “[t]part” of a building on which an insured “carries out operations, if the material damage results from these operations”. The court held, notwithstanding its obligation to interpret the expression “[t]In detail, Stone Creek’s contract was broad enough to encompass the entire house, as the contract required him to raise the house from the foundation to complete his work.

The Wiegerts contracted with Stone Creek to renovate their home to raise the basement foundation and basement ceiling height. The scope of the contract involved first disconnecting the basement ceiling, light fixtures, staircase and utilities, then raising the house three feet above the existing foundation to allow for the installation of concrete blocks above the existing foundation. Stone Creek then had to lower the house onto the raised foundation, install new window openings, reconnect mechanical services, and rebuild the basement staircase. After Stone Creek raised the house, the Wiegerts noticed damage including cracks and structural damage throughout the entire portion of the raised house except for the basement where Stone Creek worked. The Wiegerts sued Stone Creek and its insurers for damages. Acuity intervened and the court separated the litigation on the underlying merits from the insurance coverage issues and stayed the proceedings on the merits, pending a decision on the coverage issues. The circuit court granted Acuity’s motion for subsequent coverage, agreeing that exclusion k.(5) in its policy excluded coverage because the entire house was “that particular part” of the property Stone Creek was working on. .

In upholding the circuit court, the appeals court drafted only Wisconsin’s second published case applying exclusion k. (5). See Acuity v. Ins company., 2012 WI App 13, 339 Wis. 2d 217, 810 NW2d 812. In Acuity, the insurer of a processing plant sued for damages to several parts of a factory building resulting from disruptions to public service throughout the plant, following excavation work to remove and replacing a single wall inside the building. In determining that exclusion k.(5) did not preclude coverage under the contractors liability policy for damage exclusive to the wall in question, the court considered the extent of the contractors work under the contract and concluded that it was limited to the removal and replacement of the wall. Wiegertat ¶ 24 (citing Acuity v. Ins company., 339 Wis. 2d 217, ¶ 41). The court focused on the phrase “that particular party” and, relying on decisions in other jurisdictions applying the same language, determined that it limited the scope of the exclusion to “parts of a building on which the defective work was carried out, which is determined according to the scope of the construction contract. ID. (citing Acuity, ¶ 40). The court further recognized that the inclusion of the phrase “that particular part” in the exclusion was intended to limit the focus to the smaller component of the building on which the insured’s work was performed. ID. (internal citations omitted).

Applying Acuitythe Wiegert The court focused on the scope of Stone Creek’s contract and concluded that it “involved clearly specified work – lifting and lowering – to be carried out on the entire structure”. ID., ¶ 25. The damage observed immediately after Stone Creek lifted the house was limited to the interior portions of the house. ID. The court concluded, based on these facts, that the only work performed by Stone Creek that could have resulted in “property damage” during Acuity’s policy period was the lifting of the house. ID. Moreover, because “[t]that a particular portion” of the Wiegerts’ real estate that Stone Creek was dealing in was the entire house, any damages awarded to Stone Creek fell within the k.(5) exclusion. ID.


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Justin D. O'Neill