By: Derek Hawkins//March 9, 2016//
WI Supreme Court
Case Name: Wisconsin Pharmacal Company, LLC v. Nebraska Cultures of California, Inc., et al
Case No: 2013AP613; 2013AP687
Focus: Scope of Coverage – Insurance
The incorporation of a defective ingredient into supplement tablets not considered property damage because did not result in loss of use of property – therefore such a defective action is not covered.
“Similarly, applying an integrated system analysis to the instant case, we conclude that combining a defective ingredient with other ingredients and incorporating them into supplement tablets, formed an integrated system. Pharmacal could not separate out the LA from the other ingredients or the other ingredients from each other. No damage resulted to property other than ingredients of the integrated system and the completed product, the tablets. Stated otherwise, upon blending LA, rather than LRA, with other ingredients, all of the ingredients were integrated into one product, the tablets. Therefore, similar to the effect of cement being incorporated with other components into the paving blocks in Wausau Tile, the effect of LA being incorporated with the other ingredients into tablets cannot be said to constitute damage to other property. Accordingly, we conclude that the complained of injury was sustained by the integrated system itself, i.e. the tablets, such that no other property was injured.”
Reversed and Remanded
ABRAHAMSON, A.W. BRADLEY, J.J., dissent. (Opinion Filed)
ZIELGER, R.G. BRADLEY, J.J., did not participate.