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Country World Media Group, Inc. v. Erie Ins. Co.

Country World Media Group, Inc. v. Erie Ins. Co.

Court of Appeals of Wisconsin, District Three

May 2, 2017, Decided; May 2, 2017, Filed

Appeal No. 2016AP1343

Opinion

P1 STARK, P.J. Country World Productions, Inc., (CWP) appeals a judgment dismissing its insurer, Erie Insurance Company, from this case. The circuit court determined Erie's insurance policy did not cover claims made against CWP by Country World Media Group, Inc., (Media) because the property that Media's complaint alleged was damaged—specifically, "television shows, master copies and field footage"—constituted electronic data and was therefore excluded from the policy's definition of property damage. The court therefore concluded Erie had no duty to defend CWP.

P2 We conclude Media's complaint arguably alleged damage to both tangible, physical property—that is, the videotapes on which the television shows, master copies, and field footage were recorded—and the intangible electronic data stored on those tapes. Because Erie's policy covers claims for damage to tangible property, Erie had a duty to defend CWP against all of the allegations in Media's complaint. It is undisputed that, if Erie [*2]  had a duty to defend CWP, it breached that duty by refusing to provide a defense. We therefore reverse the judgment dismissing Erie from this case. We remand for the circuit court to enter a declaratory judgment in CWP's favor on the duty-to-defend issue and to determine the damages CWP is entitled to recover as a result of Erie's breach.

BACKGROUND

P3 The following facts are taken from Media's complaint and are accepted as true for purposes of this appeal. VHC, Inc., owned premises on Lawrence Drive in De Pere, Wisconsin. In October 1998, CWP, which was then owned by Timothy Manion, contracted with VHC to lease an office suite (Space #1) in the Lawrence Drive premises. In April 2006, CWP contracted with VHC to lease a larger office suite in the same premises (Space #2).

P4 On April 14, 2006, CWP moved its operations from Space #1 to Space #2. However, Best Built, Inc., VHC's lease manager for the premises, agreed to allow CWP to use Space #1 for storage until that space was rented by another tenant. From 2007 through 2011, CWP stored "several boxes of television tapes, VHS copies and books" in Space #1.

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2017 Wisc. App. LEXIS 312 *; 2017 WI App 41; 376 Wis. 2d 526; 900 N.W.2d 344

COUNTRY WORLD MEDIA GROUP, INC., PLAINTIFF, v. ERIE INSURANCE COMPANY, DEFENDANT-RESPONDENT, COUNTRY WORLD PRODUCTIONS, INC., DEFENDANT-APPELLANT, BEST BUILT, INC., CRAIG A. KASSNER, ACUITY, A MUTUAL INSURANCE COMPANY, VHC, INC. AND VALLEY FORGE INSURANCE COMPANY, DEFENDANTS.

Notice: SEE RULES OF APPELLATE PROCEDURE, RULE 809.23(3), REGARDING CITATION OF UNPUBLISHED OPINIONS.

NOTE: THIS OPINION WILL NOT APPEAR IN A PRINTED VOLUME. THE DISPOSITION WILL APPEAR IN A REPORTER TABLE.

Subsequent History: Review denied by Country World Media Grp., Inc. v. Erie Ins. Co., 2017 WI 90, 2017 Wisc. LEXIS 600 (Sept. 11, 2017)

Prior History:  [*1] APPEAL from a judgment of the circuit court for Brown County: KENDALL M. KELLEY, Judge. Cir. Ct. No. 2014CV1661.

Disposition: Reversed and cause remanded with directions.

CORE TERMS

Media's, tapes, duty to defend, insurer, tangible property, coverage, electronic data, Space, allegations, property damage, intangible, videotapes, damages, circuit court, argues, loss of use, tangible, footage, copies, stored, discarded, declaratory judgment, insurance policy, television show, seek damages, no duty, cases, refuse to provide, physical injury, software

Civil Procedure, Declaratory Judgments, State Declaratory Judgments, Appellate Review, Summary Judgment, Entitlement as Matter of Law, Appropriateness, Legal Entitlement, Judgments, State Declaratory Judgments, Appeals, Summary Judgment Review, Standards of Review, Insurance Law, Policy Interpretation, Ambiguous Terms, Construction Against Insurers, Reasonable Expectations, Reasonable Person, Unambiguous Terms, Coverage Favored, Claim, Contract & Practice Issues, Policy Interpretation, Liability & Performance Standards, Good Faith & Fair Dealing, Duty to Defend, Indemnification, Remedies, Damages, Costs & Attorney Fees, Failure to Defend, Pleading & Practice, Pleadings, Complaints, Reviewability of Lower Court Decisions, Preservation for Review