Insured’s Intentional Act Can Lead to an Occurrence Causing Property Damage

    The Wisconsin Court of Appeals determined an occurrence could follow the insured’s intentional act when the harm caused was not intentional. Riverbank Farms v. Saukville Feed Supplies, 2023 Wisc. App. LEXIS 813 (Wis. Ct. App. July 26, 2023). 

    Riverback was a dairy farm. It purchased feed mix from Saukville. Riverback’s nutritionist recommended a change to the rations fed to the cattle by adding Min-Ad, a source of bioavailable magnesium and calcium. Saukville, however, consulted with its own nutritionist and added Fine Lime instead in the rations. The substitution by Saukville was intentional. But it did not intend or foresee that the substitution would have an adverse impact on the cattle.

    Riverbank alleged that its herd suffered physically when the Fine Lime was added to the rations instead of Min-Ad. Riverbank filed suit against Saukville and its carrier, Secura Insurance. The circuit court found there was no “occurrence” and Secura had no duty to defend. 

    On appeal, Secura contended Saukville’s intentional substitution of the feed component was not a covered occurrence because it was not an accident. While it was undisputed Saukville intentionally substituted the feed component, the record showed that the resulting magnesium deficiency that allegedly caused physical harm to the cattle could have been without foresight or exception, and thus an accident/occurrence. A jury could find that Saukville did not reasonably foresee or expect harm to result from the substitution, in which case the harm to the cattle would constitute an accident/occurrence.

    Further, physical damage to the cattle constituted property damage. Saukville’s expert testified at her deposition that the Riverbank dairy cattle were physically injured. The cattle suffered physical injury from the ulcers they incurred from the Fine Lime. 

    Therefore, the circuit court erred in granting summary judgment in favor of Secura. The order was reversed and the matter remanded for further proceedings.