Link v. Link

401 Wis.2d 73

972 N.W.2d 630

2022 WI App 9

Kerri LINK, Plaintiff,

v.Jay E. LINK, Defendant-Appellant,Midwest Family Mutual Insurance Company, Intervenor-Respondent.

Jane Doe 1, Jane Doe 2, Jane Doe 3, Jane Doe 4, Jane Doe 5, Jane Doe 6 and Jane Doe 7, Plaintiffs,

v.Jay E. Link, Defendant-Appellant,Midwest Family Mutual Insurance Company, Intervenor-Respondent.

Appeal Nos. 2020AP1244

2020AP1509

Court of Appeals of Wisconsin.

Submitted on Briefs: April 13, 2021

Opinion Filed: February 1, 2022

On behalf of the defendant-appellant, the cause was submitted on the briefs of Christopher L. Strohbehn, Kathryn A. Keppel and Jaclyn C. Kallie of Gimbel, Reilly, Guerin & Brown LLP, Milwaukee.

On behalf of the intervenor-respondent, the cause was submitted on the brief of Brian A. Wood and Brandon D. Meshbesher of Lind, Jensen, Sullivan & Peterson, P.A., Minneapolis, Minnesota.

Before Stark, P.J., Hruz and Nashold, JJ.

NASHOLD, J.

¶1 These consolidated appeals arise out of separate lawsuits brought, respectively, by Kerri Link and Jane Does 1-7 (collectively, Plaintiffs) against Jay E. Link. Plaintiffs’ claims stem from allegations that Link posted Plaintiffs’ photographs, along with sexually suggestive and degrading captions about them, on a members-only fetish website.

¶2 Link sought insurance coverage for Plaintiffs’ claims under his homeowner's policy with Midwest Family Mutual Insurance (Midwest).¹ However, Link then refused to provide responses to Midwest's discovery requests in the coverage proceeding, instead asserting his Fifth Amendment privilege against self-incrimination. Midwest subsequently sought a no-coverage declaration on that basis, arguing that Link had violated policy provisions requiring the insured to cooperate in the investigation and truthfully represent all material facts. The circuit courts granted summary judgment in favor of Midwest, each determining that Midwest had no duty to defend or indemnify Link for the underlying claims.² Link appeals, arguing that his failure to comply with Midwest's discovery requests cannot result in the denial of coverage. We disagree and, accordingly, affirm.

BACKGROUND

¶3 We discuss the underlying lawsuits together because the factual allegations are similar and the instant motions are materially identical. Plaintiffs allege that Link, without their knowledge or consent, created sexually suggestive and derogatory posts about them on a members-only fetish website. Specifically, Kerri Link alleges that Link posted nude, partially nude, and sexually suggestive photographs of her that Link took during their marriage, along with sexually explicit, degrading, and false commentary about her. The Jane Doe plaintiffs allege that Link copied photographs of them from their Facebook pages and reposted the photographs on the fetish website, also adding sexually suggestive and false commentary about them. One Jane Doe plaintiff further alleges that Link posted photographs of another woman's vagina next to the plaintiff's Facebook photograph and falsely stated that these sexually explicit photographs were of the plaintiff. Plaintiffs brought claims for invasion of privacy, intentional infliction of emotional distress, negligent infliction of emotional distress, and defamation; they also sought punitive damages.

¶4 Link tendered his defense to Midwest, seeking coverage under the personal injury endorsement to his homeowner's policy. Midwest defended in both cases under a reservation of rights and moved to intervene, bifurcate, and stay further proceedings on the merits. Once made part of the litigation, Midwest cross-claimed for a declaratory judgment in each case, seeking a determination that it had no duty to defend or indemnify Link.³

¶5 Midwest then served various discovery requests on Link in the coverage proceedings. It is undisputed that Link did not respond to these requests, instead invoking his Fifth Amendment privilege to avoid self-incrimination. See U.S. CONST. amend. V. (For ease of reading, we sometimes refer to Link's invocation of privilege as his discovery noncompliance.)⁴

¶6 Based on Link's discovery noncompliance, Midwest filed motions for summary judgment in both cases. Midwest argued that, per the policy's terms, Link was required to cooperate with the coverage investigation and not conceal or misrepresent any material facts. Midwest contended that Link's discovery noncompliance represented a breach of these contractual duties, thereby eliminating any possible duty of Midwest to provide coverage for the underlying claims. Both circuit courts agreed and granted summary judgment in favor of Midwest, and Link appealed. We discuss additional facts below, where relevant to our analysis.

STANDARD OF REVIEW

¶7 The proper interpretation of an insurance policy is a question of law that we decide de novo. Severude v. American Fam. Mut. Ins. Co. , 2002 WI App 33, ¶9, 250 Wis. 2d 655, 639 N.W.2d 772. Likewise, we review a grant of summary judgment de novo, applying the same methodology as the circuit court. Id. Summary judgment is appropriate where the pleadings and evidence submitted "show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." WIS. STAT. § 802.08(2) (2019-20).⁵

DISCUSSION

¶8 Link seeks coverage for Plaintiffs’ claims under the personal injury endorsement to his homeowner's insurance policy. As pertinent here, the endorsement requires Midwest to defend and indemnify Link in suits alleging slander, libel, and invasion of privacy.⁶ The policy contains a concealment clause, stating, "We do not provide coverage to an ‘insured’ who, whether before or after a loss, has ... [c]oncealed or misrepresented any fact upon which we rely, if the concealment or misrepresentation is material and is made with intent to deceive."⁷ The endorsement also contains a cooperation clause, requiring Link to "[c]ooperate with [Midwest] in the investigation, settlement or defense of any claim or suit," and stating that Midwest has "no duty to provide coverage" if Link's failure to do so is prejudicial to Midwest.

¶9 Midwest argues that Link breached the policy's concealment and cooperation clauses by not responding to Midwest's interrogatories, requests for admission, and requests for document production, all of which concern Link's posting photographs of and commentary about Plaintiffs, his intent in doing so, and like information. As stated, Link does not dispute that he failed to respond to these discovery requests and instead invoked his Fifth Amendment privilege against self-incrimination. Link argues, however, that Midwest cannot ultimately establish that his discovery noncompliance should result in loss of coverage.

¶10 We conclude that, for the following reasons, the undisputed facts show that Link violated the concealment and cooperation clauses of his policy and that these contractual breaches are grounds for coverage denial. We note that each breach represents an independent basis for denying coverage. For completeness, however, and because Link's arguments on these provisions overlap, we address Link's duties under both clauses.

I. Application of Walker

¶11 Link raises several specific arguments on appeal that we address in more detail below; however, his central argument is that an insured's invocation of a Fifth Amendment privilege in a coverage dispute cannot be grounds for coverage denial. In State Farm Fire & Casualty Insurance Co. v. Walker , 157 Wis. 2d 459, 459 N.W.2d 605 (Ct. App. 1990), we considered and rejected this general argument in the context of applying a policy's concealment clause. We conclude that Walker controls here and that its analysis applies to both the concealment and the cooperation clauses of Link's policy.

¶12 In Walker , the insurer, State Farm, was investigating a claim under a fire insurance policy and sought to question its insured, Walker, under oath. Id. at 463, 459 N.W.2d 605. Walker, who was facing unrelated homicide charges, invoked his Fifth Amendment privilege. Id. at 463-64, 459 N.W.2d 605. State Farm denied coverage on the grounds that Walker's refusal to answer material questions violated the concealment clause of the policy, and it sought a declaratory judgment to that effect.

Id. Walker counterclaimed for damages stemming from State Farm's denial of coverage. Id. at 464, 459 N.W.2d 605. The circuit court dismissed Walker's claims, concluding that Walker had breached the concealment clause by refusing to answer questions material to State Farm's coverage investigation. Id. ¶13 On appeal, Walker "argue[d] that an insurance company cannot interpret the failure to answer questions as concealment when the insured, following an attorney's advice, invokes the fifth amendment to avoid self-incrimination." Id. at 468, 459 N.W.2d 605. We rejected this argument, determining that, although Walker was entitled to invoke privilege, he was not entitled to avoid his contractual duties on that basis:

The trial court correctly concluded that State Farm did not violate Walker's constitutional right to avoid self-incrimination. The fifth amendment protects a defendant only when it is the state that is the questioner; the state can use the answers in a criminal prosecution. Fear of self-incrimination does not exempt one from contractual duties. Constitutional immunity has no application to a private examination arising out of a contractual relationship.

Id. (internal quotation marks and citation omitted).

¶14 We further determined that State Farm's questions were "material" within the meaning of the concealment clause, in that the questions "concern[ed] a subject relevant and germane to the insurer's investigation as it was then proceeding." Id. at 469, 459 N.W.2d 605 (internal quotation marks and citation omitted). Specifically, Walker was asked about his name change and financial position. We determined that "Walker's previous name could have helped State Farm in its arson...