In John Doe 1 v. Archdiocese of Milwaukee, 2010 WL 4723728 (Wis. Ct. App. Nov. 23, 2010), the Wisconsin Court of Appeals held that the Archdiocese of Milwaukee was not entitled to insurance coverage for the plaintiffs’ negligent misrepresentation claims because the representations were not an “occurrence” but rather were volitional acts. The consolidated appeal arose out of allegations of sexual abused by priests within the Archdiocese of Milwaukee. The complaints alleged that the Archdiocese represented that the priests had not previously molested children and that children were safe in their presence, even though the Archdiocese knew that the priests had previously molested children.

The court held that there was no coverage because the alleged misrepresentations did not constitute an occurrence. The court relied on the definition of “occurrence” within the insurance policies and relied on prior precedent. The policies defined “occurrence” as “an accident,” which the Wisconsin Supreme Court has defined as “an unexpected, undesirable event,” or an “unforeseen incident” stemming from a “lack of attention.” Previous cases, such as Everson v. Lorenz, 2005 WI 51, 280 Wis. 2d 1, 695 N.W.2d 298 and Stuart v. Weisflog’s Showroom Gallery, Inc., 2008 WI 86, 311 Wis. 2d 492, 753 N.W.2d 448, have held that alleged negligent misrepresentations constitute volitional acts for which there is no coverage. In Stuart, the Wisconsin Supreme Court reasoned that, for an event to be viewed as an accidental occurrence, the causal event must be accidental, even if the result is unexpected. Accordingly, the court of appeals observed that the focus must be not on the ultimate injury allegedly inflicted by the priests, but rather on the underlying acts of the Archdiocese that resulted in the injury. Those underlying acts were the alleged misrepresentations that children would be safe in the presence of priests when the Archdiocese was aware of their history of sexual abuse.

The court concluded that the underlying acts—the misrepresentations—were not accidental. The court reasoned that the “affirmative representation of safety by the Archdiocese did not occur by chance, nor was it unforeseen or unintended . . . . Rather, the misrepresentation of safety . . . constitutes an act of making a false or misleading statement about something.” (Internal citations and quote marks omitted.) Further, the court observed that, while the Archdiocese may not have intended to harm the plaintiffs, it “certainly intended to keep its knowledge of the priests at issue to itself, ultimately leading to the plaintiffs’ injuries.” Consequently, the underlying acts of the Archdiocese were volitional, precluding coverage due to the absence of an “occurrence.”

John Doe 1 v. Archdiocese of Milwaukee, 2010 WL 4723728 (Wis. Ct. App. Nov. 23, 2010)