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Scottish Guarantee Ins. Co. v. Dwyer

ELR Citation: 24 ELR 21345
Nos. No. 92-4142, 19 F.3d 307/39 ERC 1423/(7th Cir., 03/18/1994)

The court holds that under Wisconsin law, an insurer has a duty to defend its insured under the "wrongful entry" clause of a commercial policy against negligent trespass claims for damage to groundwells caused by a release of chemicals in a fire. The commercial policy defined its personal injury coverage to include "wrongful entry," but the complaint against the insured alleged only negligent trespass. Extrapolating from related precedent, the court holds that a Wisconsin court would equate the policy's use of the term "wrongful entry" to the tort of trespass. The court then holds that a Wisconsin court would recognize a cause of action for negligent trespass. The court further reasons that the insured reasonably could have understood the term "wrongful entry" in the policy to include an unintentional trespass. At the very least, the policy's use of the term is ambiguous and must be resolved in the insured's favor. Thus, the court holds that the insurer has a duty to defend the insured against negligent trespass claims as a form of "wrongful entry" under the policy. The court also affirms the district court's grant of attorney fees and costs.

Counsel for Plaintiff
Thomas R. Schrimpf
Hinshaw & Culbertson
100 E. Wisconsin Ave., Ste. 600, Milwaukee WI 53202
(414) 276-6464

Counsel for Defendant
Edwin R. Brooks, Karyn G. Gershon
Katten, Muchin & Zavis
525 W. Monroe St., Ste. 1600, Chicago IL 60661
(312) 902-5200

Before BAUER, CUDAHY, and ROVNER, Circuit Judges.