LOUIS J. CECI, J.
This case is before the court on petitions for review of a decision of the court of appeals, Shannon v. Shannon, 145 Wis.2d 763, 429 N.W.2d 525 (Ct. App. 1988), which reversed a judgment of the circuit court for Milwaukee county, Joseph P. Callan, circuit judge, granting summary judgments to the petitioners, Steven and Donna Schultz (Schultzes) and their insurers, Commercial Union Insurance Companies (Commercial) and United States Automobile Association (USAA), and dismissing the claim against USAA as insurer of James and Edith Shannon (Shannons). Three issues are presented for review. The first issue is whether the circuit court erred in granting summary judgment to the Schultzes and their insurers. The second issue is whether the Schultzes are immune from liability to Christen Shannon under sec. 895.52(2), Stats. 1983-84.
The facts of this case are as follows. Christen Shannon, age three at the time of the accident, was seriously injured on July 1, 1984, when she nearly drowned in a lake abutting her parents' home near Elkhorn, Wisconsin. Christen sustained extensive brain damage and is permanently and extensively disabled. At the time of the accident, Christen's parents, James and Edith Shannon, were sitting in their boat which was docked at their pier. Christen had been playing in the Shannons' yard and had then wandered over to the adjoining property owned by the Schultzes. The Schultzes were entertaining guests on their outdoor patio located on the lakeshore and when Christen went over to the Schultzes' property, Mr. Shannon called her home. Mrs. Schultz responded, "It's okay, she's not hurting anything, she'll be all right." After approximately five minutes, Mr. Shannon noticed
On July 5, 1985, Christen, by her guardian ad litem, commenced a lawsuit against the Shannons; their homeowners insurance carrier, USAA; and their personal umbrella liability insurance carrier, also USAA. On March 26, 1986, USAA filed a motion for summary judgment on the ground that the policies contained a family member exclusion clause, excluding coverage for the Shannons' liability arising from their negligence in causing Christen's injuries. The circuit court denied that motion on July 14, 1986, finding that a question of fact existed as to whether USAA had waived its right to rely upon the exclusion.
USAA then moved to bifurcate the trial of the insurance coverage issues from the trial on the merits of the complaint. The circuit court granted the motion. On February 2, 1987, the jury returned its verdict that USAA had not waived its right to assert the family member exclusion in its policies. The Shannons' and Christen's motions after verdict were denied, and judgment was entered dismissing the claims against USAA as the insurer of the Shannons.
On March 26, 1986, Christen also filed a complaint against the Schultzes; their homeowner's insurance carrier, Commercial; and their personal liability umbrella insurance carrier, which was also USAA. The complaint was amended on October 3, 1986. On October 28, 1986, the Schultzes and Commercial answered the amended complaint and cross-claimed against the Shannons for contribution. On October 29, 1986, the Shannons answered the amended complaint and cross-claimed against the Schultzes for contribution. On December 29, 1986, the Schultzes and Commercial made a motion for
Christen appealed to the court of appeals from the judgment dismissing her action against the Schultzes and their insurers. The Shannons appealed the judgment dismissing their cross-complaint against the Schultzes and their insurers. Both Christen and the Shannons appealed the judgment which dismissed the claim against USAA as insurers of the Shannons.
The court of appeals addressed three principal issues in its decision. The first issue addressed by the court of appeals was whether the circuit court erred in granting summary judgment to the Schultzes and their insurers. The court of appeals found that the circuit court erred and reversed the circuit court decision granting summary judgment to the Schultzes and their insurers, holding that material issues of fact bearing on the Schultzes' negligence were present. The court of appeals held, citing Antoniewicz v. Reszczynski, 70 Wis.2d 836, 236 N.W.2d 1 (1975), that the duty to exercise ordinary care toward nontrespassers is the same as the duty of care in the usual negligence case and that this duty is not limited to conditions and defects on the premises. The court of appeals noted that a material issue of fact existed as to whether the Schultzes exercised ordinary care under the circumstances. As a result, the court of appeals concluded that the existence of the issue of fact relating to the negligence of the Schultzes made the grant of summary judgment improvident.
The second issue addressed by the court of appeals was whether the Schultzes were immune from liability under sec. 895.52(2), Stats. The court of appeals held that sec. 895.52(2) does not apply to cases of land-occu-pier
The final issue addressed by the court of appeals was whether the circuit court erred in holding that the issue of whether USAA had waived its family member exclusion clause was a question of fact for the jury. The court of appeals found in regard to this issue that the facts concerning USAA's alleged waiver of the family member exclusion provision in its policies were undisputed and that, therefore, under Rural Mutual Ins. Co. v. Peterson, 134 Wis.2d 165, 180, 395 N.W.2d 776 (1986), the circuit court erred in submitting the waiver issue to the jury. The court of appeals held, given its conclusion that the facts concerning the waiver issue were undisputed, that a question of law was presented and that under the facts of the case, USAA had waived its right to assert the family member exclusion as a matter of law.
WHETHER THE CIRCUIT COURT ERRED IN GRANTING SUMMARY JUDGMENT TO THE SCHULTZES AND THEIR INSURERS
This court reviews a circuit court's grant of summary judgment by applying the standards set forth in sec. 802.08(2), Stats., in the same manner as the circuit court. Green Spring Farms v. Kersten, 136 Wis.2d 304, 315, 401 N.W.2d 816 (1987). Under sec. 802.08(2), summary judgment must be entered "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the
Christen Shannon's amended complaint alleges that immediately prior to her near drowning, Christen was present on the Schultzes' property with the knowledge and consent of the Schultzes. The amended complaint also alleges that the Schultzes owed to Christen the duty to exercise ordinary care under the existing circumstances so as to avoid exposing Christen to an unreasonable risk of harm and that the Schultzes breached the duty owed to Christen and were negligent in failing to protect Christen from the danger of near drowning in the lake. The Schultzes' answer to Christen's amended complaint denies that the Schultzes owed a duty to Christen, denies any negligence on the part of the Schultzes, and denies that any acts or conduct by the Schultzes was a cause of or resulted in the alleged injuries sustained by Christen.
The circuit court held, and the Schultzes argue, citing Antoniewicz, 70 Wis. 2d at 839, that the duty of ordinary care of an owner or possessor of land relates to the premises owned or possessed and conditions or defects which may be on such premises. Therefore, the circuit court concluded that without a showing that Christen's injury was related to a defect or condition on the Schultzes' property, the Schultzes and their insurers were entitled to summary judgment.
We disagree. Contrary to the circuit court's conclusion, the duty of the owner or possessor of land toward persons who come upon property with the consent of the owner or possessor does not relate solely to defects or conditions which may be on such premises. Rather, the duty of an owner or possessor of land toward all persons who come upon property with the consent of the owner or occupier is that of ordinary care. Christians v. Homestake Enterprises, Ltd., 101 Wis.2d 25, 41, 303 N.W.2d 608 (1981); Antoniewicz, 70 Wis. 2d at 857. The duty of ordinary care exists when it is foreseeable that an act or omission to act may cause harm to someone. Schuster v. Altenberg, 144 Wis.2d 223, 237-38, 424 N.W.2d 159 (1988); A.E. Investment Corp. v. Link Builders, Inc., 62 Wis.2d 479, 483, 214 N.W.2d 764 (1974). The duty to exercise ordinary care in this case is the same as the duty of care in the usual negligence case.
Antoniewicz, 70 Wis. 2d at 857 (citations omitted).
We find, based on the pleadings, depositions, and affidavits filed in this case, that a genuine issue of material fact exists: whether the Schultzes exercised ordinary care under the circumstances. We conclude that a properly instructed, reasonable jury could find, based on the facts presented, that the Schultzes failed to exercise ordinary care. Consequently, we hold that the circuit court erred in granting summary judgment to the Schultzes and their insurers.
The Schultzes maintain, however, that the presence of the Shannons at the lakeshore relieved them of any duty that they may have owed Christen. The Schultzes contend that the primary duty to supervise Christen lay with the Shannons and as long as the Shannons were in the presence of Christen and had an opportunity to exercise supervision, the duty to supervise Christen remained theirs and theirs alone. We disagree. The fact that the Shannons may have owed a duty to Christen does not absolve the Schultzes of their duty to Christen. Under Wisconsin's law on joint and several liability, the
The Schultzes also argue that they did not owe Christen a duty at the time she was injured because Christen had left the Schultzes' property and was injured in Lauderdale Lakes, which is a public body of water owned by the state of Wisconsin. The Schultzes contend that if the ownership of land gives rise to their duty to Christen, then this duty should be limited by the boundaries of the land. The Schultzes' argument is without merit because it ignores the fact that the conduct complained of is the failure of the Schultzes to exercise ordinary care under the existing circumstances so as to avoid exposing Christen to an unreasonable risk of harm. Whether the injury actually occurred on the Schultzes' property is only a factor to be considered in determining whether the Schultzes breached their duty of ordinary care. See Christians, 101 Wis.2d 25.
The Schultzes also maintain that the lake presented an open and obvious danger to Christen, thereby relieving them of liability. We note at the outset that there appears to be a split of authority on the issue of whether the open and obvious danger limitation on landowner or possessor liability still exists in this state. In Pagelsdorf v. Safeco Ins. Co. of America, 91 Wis.2d 734, 745, 284 N.W.2d 55 (1979), a case in which this court addressed the issue of a landlord's duty toward his tenant invitee, we held that a landlord owes his tenant or anyone on the premises with the tenant's consent a duty to exercise ordinary care. We also held that "[i]ssues of notice of [a]
Finally, the Schultzes argue, citing Sanem v. Home Ins. Co., 119 Wis.2d 530, 350 N.W.2d 89 (1984), that public policy prevents the Schultzes from being charged with a duty to Christen. Due to the fact that this case is at the summary judgment stage, we conclude that a sufficient factual basis is not presented for considering, evaluating, and resolving the public policy issues involved. A circuit court or jury finding as to actual negligence, damage, and causal relationship would be material and helpful in evaluating the public policy considerations; therefore, we will not address them here. Coffey v. Milwaukee, 74 Wis.2d 526, 543, 247 N.W.2d 132 (1976).
WHETHER THE SCHULTZES ARE IMMUNE FROM LIABILITY TO CHRISTEN SHANNON UNDER SEC. 895.52(2), STATS.
Section 895.52(2), Stats., provides:
Section 1 of 1983 Wis. Act 418 discusses the intended scope of sec. 895.52, Stats.:
Section 895.52, Stats., only applies to cases of landowner or possessor negligence when a party enters onto the owner's or possessor's land to engage in a "recreational activity." We find that the term "recreational activity" as defined in sec. 895.52(1)(g) does not apply to the activities of Christen Shannon on the day in question because the random wanderings of a three-year-old child are not substantially similar to the activities enumerated in sec. 895.52(1)(g). Therefore, we conclude that sec. 895.52 does not apply in this case.
WHETHER USAA WAIVED THE FAMILY MEMBER EXCLUSION PROVISIONS IN ITS INSURANCE POLICIES
USAA issued to the Shannons a homeowners policy providing $300,000 liability coverage and a personal umbrella policy with a $1,000,000 limit. The policies contained an exclusion for bodily injury to an "insured" under the homeowners policy and to a "covered person" under the personal umbrella policy.
The Shannons and Christen argue that USAA voluntarily waived the family member exclusion clauses in its policies by designating an attorney to represent both the Shannons and USAA, by failing to specifically plead the family member exclusion in their answer, and by forwarding to the Shannons a nonspecific letter of reservation of rights which did not single out the family member exclusion defense. The circuit court concluded that an issue of fact was raised by the waiver issue. Therefore, the court submitted the issue to a jury, which determined that USAA did not waive its family member exclusion defense. The court of appeals disagreed. The court of appeals held that the circuit court erred in submitting the issue to a jury because the facts concerning the waiver issue were undisputed. As a result, the court of appeals held that an issue of law was presented, and, as a matter of law, USAA had waived its family member exclusion defense.
The initial question we must resolve is whether a family member exclusion provision can be waived to expand coverage. This question is a question of law which this court decides independently without deference to the decision of the circuit court or the court of appeals. Ball, 117 Wis. 2d at 537.
The general rule is well established that the doctrine of waiver or estoppel based upon the conduct or action of
In Ahnapee & Western Railway Co. v. Challoner, 34 Wis.2d 134, 140-44, 148 N.W.2d 646 (1967), this court held:
determining whether a policy conditions or term is a coverage clause of either an inclusionary
We, therefore, must determine in the case before the court whether the family member exclusion in USAA's
Christen and the Shannons also argue that the family member exclusion is contrary to public policy. The family member exclusion has been involved in several Wisconsin cases without invalidation. The rationale for these types of exclusions was stated by the court of appeals in A.G. v. Travelers Ins. Co., 112 Wis.2d 18, 20-21, 331 N.W.2d 643 (Ct. App. 1983):
(Citations omitted.) We find that such exclusions serve a legitimate purpose and are not contrary to public policy.
Finally, the Shannons argue that USAA had initially issued a homeowners policy to the Shannons without the family member exclusion. Subsequently, in 1983, USAA made changes in the Shannon policy, and the family member exclusion was one such change made from the original policy, without adequate explanation or a reduction in premium. As a result, the Shannons argue, their coverage should be extended as a matter of public policy. Contrary to the Shannons' argument, the record before us indicates that USAA did inform the Shannons of the policy changes, and USAA did not only reduce coverage. Duane Spiess, senior claims attorney at USAA, testified that when the family member exclusion was added, numerous other changes were also made in the policy. A notice was sent to Mr. Shannon which
In conclusion, we hold that the circuit court improperly granted summary judgment to the Schultzes and their insurers. In addition, we find that the Schultzes are not immune from liability to Christen Shannon under sec. 895.52(2), Stats. Finally, we hold that, as a matter of law, an insurer cannot waive a family member exclusion clause in its insurance policy.
By the Court.—The decision of the court of appeals is affirmed in part and reversed in part, and the cause is remanded to the circuit court for further proceedings consistent with this opinion.
(Emphasis in original.)
The Shannons' personal umbrella policy provided:
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In Knapke, the plaintiff owned a building, part of which was rented for use as a family dwelling and the other part of which was used as storage space for two commercial businesses. Knapke, 54 Wis. 2d at 527. Mr. Lingle sustained injuries as the result of an accident in the storage area of the building, brought suit against Knapke, and received a judgment of $15,067.04. Id. Knapke's insurer refused to pay the judgment based on a policy exclusion which excluded coverage for property on which business pursuits were conducted, and Knapke sued. Id. at 527-28. Knapke argued that the insurer had waived its right to assert the exclusion in the policy due to the conduct, representations, and knowledge of its agents before the policy was issued. The insurer's agent testified that it was his intention in writing the policy to cover the property owned by the plaintiff, that it was his intention to provide coverage for any liability the plaintiff might incur by virtue of his ownership of the property, and that he was aware that the plaintiff was using the property for business purposes. Id. at 530, 534. This court affirmed the circuit court's conclusion that any exclusion contained in the policy was expressly waived by the defendant through its agent. Id. at 531, 534. Knapke is not applicable to the situation before this court, however, because in Knapke the parties intended, prior to the issuance of the policy itself, to cover the risk of any liability arising out of the plaintiff's ownership of his building. As such, Knapke is more aptly described as a reformation case and is not precedent for finding waiver of the family member exclusion in the case before the court. See also Perlick v. Country Mutual Casualty Co., 274 Wis. 558, 566, 80 N.W.2d 921 (1957).
In Pouwels, an attorney employed by Cheese Makers Mutual Casualty Company defended the action against their insured, without a reservation of rights, through judgment. This court affirmed the circuit court's holding that the insurance company, by assuming and conducting the defense of the action, without disclaiming coverage or giving notice of reservation of its rights, was precluded from denying coverage. Pouwels, 255 Wis. at 106-07. Nowhere in Pouwels is there a discussion of the issue of whether an exclusion in a policy can be waived. Furthermore, there is no discussion on whether Cheese Makers Mutual Casualty Company was attempting to base its noncoverage argument on an exclusion provision or a forfeiture provision. As a result, we find the case of limited instructive value for the situation before us.