Campanella v. Anderson

Background

Matthew J. Campanella alleged that he rented a residence from Northern Properties Group, LLC, on August 1, 2017, without knowing that it contained toxic levels of chicken feces. He claimed that he contracted histoplasmosis because Northern Properties carelessly and negligently failed to clean and maintain the residence.

Auto-Owners Insurance Company insured Northern Properties and intervened in the case. The court considered Auto-Owners’ motion for summary judgment, which asks the court to rule without a trial when there is no genuine dispute about a material fact and the moving party is entitled to judgment as a matter of law.

Choice of Law

The parties disputed whether Minnesota or Wisconsin law governed Auto-Owners’ duty to defend and indemnify Northern Properties. The court concluded that there was no relevant conflict because both states use the same three-step framework:

Because the laws did not conflict on this issue, the court did not decide which state’s law controlled.

Coverage and Policy Exclusion

The policy covered damages that an insured became legally obligated to pay because of bodily injury arising from ownership, maintenance, or use of the described premises as a rental dwelling and caused by an occurrence. The policy defined an occurrence as an accident resulting in bodily injury or property damage, including continuous or repeated exposure to substantially the same harmful conditions.

The court determined that Campanella’s alleged histoplasmosis was an accident because the record did not show that anyone foresaw he would contract the illness. The court also found that the allegations described bodily injury connected to the insured rental property. Thus, Campanella’s claim was initially within the policy’s coverage, shifting the burden to Auto-Owners to establish an exclusion.

The policy excluded bodily injury arising from exposure to, contact with, or the presence of any fungi, whether airborne or not, within or on a structure or building. The exclusion applied even if another event, cause, product, or material contributed to the injury. The court held that this language unambiguously excluded Campanella’s alleged injury because he claimed that histoplasmosis resulted from fungus associated with chicken feces in the rental residence.

The court rejected Campanella’s argument that the exclusion applied only to fungus associated with wet or dry rot in newly constructed homes. It also rejected Northern Properties’ argument that negligent cleaning, rather than fungus, caused the injury, reasoning that the complaint connected the histoplasmosis to fungus and that the policy excluded fungus-related injury even when another cause contributed.

Northern Properties argued at the hearing that a factual dispute existed over whether histoplasmosis could have another cause and sought additional discovery. The court declined to consider that request because Northern Properties had not identified supporting facts and fact discovery had already closed.

Ruling

The court held that Auto-Owners had no duty to defend or indemnify Northern Properties against Campanella’s claims because the alleged injuries were excluded from coverage. Judge Joan N. Ericksen granted Auto-Owners’ motion for summary judgment.