By: Derek Hawkins//April 26, 2017//
WI Court of Appeals – District II
Case Name: The Stimac Family Trust v. Wisconsin Power and Light Company, et al
Case No.: 2016AP748
Officials: Reilly, P.J.
Focus: Insurance Coverage – Duty to Defend
In this appeal, we address the procedure utilized when an insurer denies coverage. We summarize the procedure as follows: If an insurer alleges that it has no duty to defend its insured and does not provide its insured with a defense, then the four-corners rule applies and the only documents utilized by the court are the insurance policy and the complaint. No extrinsic evidence may be considered. In contrast, if an insurer alleges that its policy does not provide coverage but provides a defense to its insured and bifurcates the matter while coverage is contested, then the court considers the complaint, the policy, and any extrinsic evidence to determine whether coverage exists.
West Bend Mutual Insurance Company (West Bend) insured Aquire Contracting and Restoration, Inc. (Aquire). Aquire was hired to perform restoration work on a residence owned by The Stimac Family Trust (Stimac) and, for purposes of this appeal, failed to do the work in a good and workmanlike manner. Stimac sued Aquire for damages. West Bend alleged that its policy did not cover the claim but provided counsel for Acquire and bifurcated the coverage question. West Bend then moved for summary judgment on the ground that its policy did not provide coverage to Aquire due to policy exclusions. The circuit court concluded that it could not consider extrinsic evidence offered by Aquire because of the four-corners rule and granted summary judgment to West Bend. As the court should have considered the extrinsic evidence, we reverse.
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