Wisconsin Court of Appeals stands by four-corners rule.

Byline: David Ziemer

There are no exceptions to the four-corners rule -- limiting consideration of an insurer's duty to defend to the allegations contained within the complaint, the Wisconsin Court of Appeals held on May 30. The court concluded that language to the contrary from the Wisconsin Supreme Court and court of appeals has been tacitly overruled by subsequent decisions. James B. Sustache, a teenager, was killed as the result of a punch thrown by Jeffrey W. Mathews, another teenager, during a fight at a party. James' parents and his estate sued Jeffrey and his insurer, American Family Mutual Insurance Company, alleging intentional battery, and seeking punitive damages. American Family moved for summary judgment, arguing that it had no duty to defend, because its policy excluded coverage for intentional acts, and Kenosha County Circuit Court Judge Wilbur W. Warren, III, granted the motion. The plaintiffs appealed, but the court of appeals affirmed in a decision by Judge Neal Nettesheim (after first certifying the case to the Supreme Court, which declined to hear the case by a 4-3 vote). The court of appeals began by reviewing the conflicting authority on the issue. In Grieb v. Citizens Casualty Co., 33 Wis. 2d 552, 148 N.W.2d 103 (1967), the court held that, when deciding whether an insurer has a duty to defend, coverage is determined by looking solely within the four corners of the complaint. However, the court also acknowledged the existence of four exceptions, although the court did not list or analyze them. The commonly recognized exceptions are: where there is a conflict of allegations and known facts; where the allegations are ambiguous or incomplete; where the allegations state facts partly within and partly outside the coverage of the policy; and where the allegations contain conclusions instead of statements of facts. 50 A.L.R.2d 458, sec. 3 (1956). Twenty years later, in Berg v. Fall, 138 Wis.2d 115, 405 N.W.2d 701 (Ct.App.1987), on facts substantially identical to the case at bar, the court of appeals recognized an exception to the four-corners rule, whether the plaintiff alleges intentional conduct, but the insured claims self-defense. The court of appeals relied on an insurance treatise providing for an exception to the four-corners rule when "the true facts are within, or potentially within, policy coverage and are known or are reasonably ascertainable by the insurer." Shortly after Berg, in Professional Office...