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Appeals court says mother can't sue insurance company over child's death

In a decision filed Tuesday, the Court of Appeals ruled that a homeowners' policy precludes coverage for wrongful death claims for a child who died while in her stepmother's care.

The appeals court reversed a decision by St. Croix County Judge Edward Vlack.

The case stems from the death of Emma Day, 8, who had frequent epileptic seizures and was sent home Nov. 27, 2006, after suffering two seizures at school. The child was staying with her father and stepmother, Clinton and Holly Day, 602 Old Mill Road, Hudson, that night.

According to background in the appeals court decision, in the evening Holly prepared a bath for the child. The lawsuit filed April 26, 2007, alleged Emma suffered a severe seizure and drowned while left temporarily unattended.

The child's mother, Wendy M. Day, Houlton, brought wrongful death and survivorship claims against the stepmother, claiming Holly's negligent supervision caused the child's death.

Clinton and Holly carried a homeowners' policy with Allstate Indemnity Company, which was also named as a defendant in the lawsuit. Holly turned over her defense to the insurance company.

By agreement, Holly and Clinton were dismissed as defendants in the case.

Judge Vlack separated the insurance coverage and liability issues and subsequently interpreted the policy to require coverage, reasoning that no insured person would benefit from coverage.

The District III Court of Appeals disagreed and reversed his decision.

In its decision, the appeals court noted that family exclusion clauses are valid in Wisconsin and protect insurance companies "from situations were an insured, because of close family ties, might not completely cooperate and assist the insurance company" in defending against the claim.

The issue here, says the decision, is whether the exclusion applies to wrongful death and survivorship claims brought by someone other than the person who bought the policy.

"The family exclusion clause unambiguously precludes coverage under these circumstances," says the decision. "Emma's parents are her heirs... Clinton, who is undisputedly an insured person, therefore benefits from coverage by virtue of his legal right to collect a portion of the wrongful death award."

The family exclusion clause also bars coverage for the mother's survivorship claims because the parents share equally in the child's estate.

"As a practical matter, Clinton might waive his interest in both the wrongful death and survivorship awards, or may simply refuse to collect the amount to which he is legally entitled," wrote the court. "However, permitting an insured to disclaim his or her interest would encourage the type of collusion that family exclusion clauses are designed to prevent."

Judy Wiff

Judy Wiff has been regional editor for RiverTown’s Wisconsin newspapers since 1996. She holds a bachelor’s degree in journalism and sociology from UW-River Falls. She has worked as a reporter for several weekly newspapers in Wisconsin.