Racial Discrimination is Not an “Occurrence”

All Racial Discrimination Acts are Intentional

Racial discrimination is wrongful under all circumstances. By definition discrimination is an intentional act.

Girard and Lindsay Jones appeal a judgment dismissing their state and federal disparate treatment housing discrimination claims against John Baecker. The Joneses’ race discrimination claims rest principally on Baecker’s explicit identification of Girard as “African American,” and the Joneses’ family status discrimination claims rest principally on Baecker’s stated belief that the Joneses’ desired rental unit was too small to accommodate their six-person family.

In Girard Jones and Lindsay Jones v. John Baecker, et al, Court of Appeals of Wisconsin, 2016 WL 7471577 (December 28, 2016) Baecker’s insurer, West Bend Mutual Insurance Company (West Bend) alleged the circuit court’s determination that the complaint’s allegations triggered its insurance policy obligation to defend Baecker against the Joneses’ intentional discrimination claims.


This case arises out of the Joneses’ efforts to obtain rental housing in June of 2011. Lindsay is white; Girard is African American. The Joneses are married and have two children together. Additionally, Girard has two children from previous relationships. Three of the children live with the Joneses full time. The remaining child has a visitation schedule during weekends and the summer.

In March 2011, the Joneses began looking for another rental property. According to Lindsay, they focused their search on three-bedroom rentals in an area that would allow their children to continue attending Putnam Heights Elementary School. The Joneses did not find many locations available that met these criteria, and although they contacted ten to twenty landlords, they did not view any of those properties.

When asked at her deposition to explain exactly what was said during the telephone conversation, Lindsay stated Baecker began asking questions about the Joneses’ then-current living situation and she specified that they lived on the corner of State and Hamilton. She claimed that he said that he knew of that house and that they were complete pigs. The potential landlord then allegedly said: “Oh, you’re the one with the African American boyfriend.” She replied, that “actually, that’s my husband, and we’re a family.”

Lindsay admitted she did not seek an application from Baecker or ask to view Baecker’s rental property on Kari Drive, explaining that she would not have done these things only to have Baecker “continue to laugh at me or continue to call us pigs.”

Baecker stated he observed “toys and junk and garbage every day.” Baecker felt the State Street property was “disgusting.” He disputed, however, that he had called the Joneses “pigs”; rather, he testified he told Lindsay the Joneses kept their State Street residence like a “pigsty.”

Baecker acknowledged mentioning Girard’s race during the conversation with Lindsay.


West Bend had issued to Baecker a general business liability insurance policy effective between January 2011 and January 2012. On April 16, 2014, Baecker’s attorney sent a letter tendering defense of the Joneses’ lawsuit to West Bend. Approximately one month later, West Bend filed a motion to intervene in the Joneses’ action against Baecker.

The circuit court denied West Bend’s motion for summary judgment and concluded West Bend had a duty to defend Baecker from that date forward.

The circuit court granted Baecker’s summary judgment motion. The court deemed it “apparent [Baecker] decided he was not interested in renting to [the Joneses] because of the number of children in the family.”


Wisconsin has a long and proud history of prohibiting racial discrimination in various facets of public life. In this case, the Joneses allege they have been unlawfully denied housing because of their race and family status.

Although the plaintiff need not establish that discriminatory intent was the sole reason for the housing decision at issue, the evidence must be sufficiently compelling so as to give rise to a reasonable inference of racial discrimination. While the proffered evidence need not constitute a direct admission of guilt by the defendant, a rational trier of fact must be able to infer, based on the evidence, that the defendant took a particular action because the plaintiff was a member of a protected class.

Nothing in Baecker’s single use of the term “African American” would allow a reasonable fact finder to find a discriminatory motive without resorting to speculation. Consequently, there is no reasonable, unspeculative basis for a fact finder to reject Baecker’s contention that the phrase was used for identification purposes only, as a description of the individual with whom Baecker believed Lindsay was in a relationship.


West Bend cross-appeals, asserting the circuit court erroneously declared it has a duty to defend Baecker. West Bend argued that because the alleged discrimination was a volitional act on Baecker’s part, the complaint failed to allege an “occurrence” that would trigger its duty to defend. Baecker, conversely, asserted that there has been an “occurrence” because the complaint did not allege he intentionally discriminated against the Joneses or intended to cause the Joneses emotional distress by his conduct.

The circuit court denied West Bend’s motion for a declaratory judgment.  Although the four-corners rule bars a court from considering evidence extrinsic to the complaint when determining whether an insurer has a duty to defend, we will “liberally construe” the complaint’s allegations, assume all reasonable inferences from those allegations, and resolve any ambiguity in the policy terms in favor of the insured.

The duty to defend depends upon the terms of the insurance policy. The same rules of construction that govern all contracts are applied to insurance policies. The policy defines an “occurrence” as “an accident, including continuous or repeated exposure to substantially the same general harmful conditions.” As such, for there to have been an “occurrence,” there must necessarily have been an “accident.”

The complaint alleges Lindsay called Baecker to inquire about renting a unit in the Kari Drive property. According to the complaint, “Baecker would not show or rent the property to Plaintiffs because Plaintiff Girard Jones is African-American and because Plaintiffs have four minor children.” Baecker’s refusals allegedly affected the Joneses’ ability to send their children to their desired school and caused the Joneses “humiliation, frustration, mental anguish, emotional distress” and other unspecified damages.

West Bend argues that nothing in the complaint suggests the existence of an “accident” that would trigger its defense obligations. Over the last approximately twenty years, our supreme court has repeatedly held that, when coverage is contingent on an “accident” occurring, the insurer has no duty to defend against alleged damages that, although unexpected, are brought about intentionally by the insured’s volitional conduct. Comparing the definitions of “negligence” (in the law) and “accident” (in the relevant policy), it is significant that both definitions center on an unintentional occurrence leading to undesirable results.

The complaint here does not allege an “occurrence” triggering West Bend’s defense obligations. Baecker’s alleged acts in this case—his refusal to rent to the Joneses on the bases of race and family status—were made volitionally. Further, assuming the truth of the complaint’s allegations, Baecker intended to deny the Joneses housing on these unlawful bases. As a result, there was no “occurrence” under the relevant case law. This is true even if, as Baecker argues, he negligently believed his actions were permissible or he did not anticipate his conduct would cause the Joneses emotional distress.

Baecker’s “negligent belief” argument is of no moment here because existing case law establishes that volitional conduct producing an intended event bars coverage even if there is precipitating negligence on the part of the insured. It was undisputed that Baecker did refuse to rent to the Joneses. The complaint alleged he did so intentionally, on the impermissible bases of race and family status, and we must take these allegations at face value for purposes of the duty-to-defend inquiry.

Baecker, the insured party, was alleged to have intentionally refused to rent to the Joneses on the impermissible bases of race and family status. Baecker’s alleged refusal can only be interpreted as evidencing “a degree of volition inconsistent with the term accident.” For this reason, the Court of Appeal concluded that there has not been an “occurrence” in this case, and West Bend is entitled to the declaratory judgment it seeks.


Four Corners states like Wisconsin establish a duty to defend or not from the allegations of the suit. In this case, after a lengthy discussion of the alleged discrimination, it became clear to the appellate court that the trial court erred when it found a duty to defend since all of the allegations and all of the evidence gathered in discovery, it was clear that Baecker was alleged to act intentionally and was, therefore, not an “occurrence.”

ZALMA-INS-CONSULT                      © 2016 – Barry Zalma

Barry Zalma, Esq., CFE, now limits his practice to service as an insurance consultant and expert witness specializing in insurance coverage, insurance claims handling, insurance bad faith and insurance fraud almost equally for insurers and policyholders. He also serves as an arbitrator or mediator for insurance related disputes. He practiced law in California for more than 44 years as an insurance coverage and claims handling lawyer and more than 49 years in the insurance business.

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About Barry Zalma

An insurance coverage and claims handling author, consultant and expert witness with more than 48 years of practical and court room experience.
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