Wisconsin High Court: Homeowners Insurance Doesn't Cover Negligence

July 18, 2008

A couple's homeowner's policy does not cover alleged negligence by the wife for not preventing her husband from sexually abusing a child, a divided Wisconsin Supreme Court said July 17.

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The unnamed child and the child's mother sued the woman and her insurance companies. They claimed the woman, Deborah Wangard, was negligent because she did not prevent her husband, Steven Wangard, from sexually abusing the child between 2000 and 2003 in his two Elm Grove homes. The child was between 5 and 8 at the time.

Steven Wangard pleaded guilty in 2004 to second-degree sexual assault of a child and is serving a five-year prison sentence.

A civil lawsuit against him and his wife was on hold in Waukesha County pending the outcome of this case.

It involved whether either of the homeowners' policies issued by Great Northern Insurance Co. and Pacific Indemnity Insurance Co. covered damages sought from Deborah Wangard for her alleged negligence. The policies excluded coverage for damage from intentional acts.

The Supreme Court, in a 4-3 decision upholding a lower court ruling, said Deborah Wangard was not covered.

"No insured would reasonably expect liability coverage for damages arising out of an act of sexual assault premised upon intentional sexual contact,'' Justice David Prosser wrote for the majority.

The ruling means Deborah Wangard, not the insurance companies, will pay if she is found negligent.

A circuit court has already ruled that Steven Wangard wasn't covered by insurance, and he did not appeal.

Prosser was joined in the court's decision by justices Pat Roggensack, Patrick Crooks and Annette Ziegler. Dissenting were Chief Justice Shirley Abrahamson and justices Louis Butler and Ann Walsh Bradley.

Bradley argued that the insurance policies were ambiguous as to whether Deborah Wangard would be covered. And because ambiguous insurance contracts should be decided in favor of the insured, she ought to have the coverage, Bradley said.