In the

    United States Court of Appeals
                For the Seventh Circuit
                    ____________________
No. 15-3400
AMERICAN FAMILY MUTUAL INSURANCE COMPANY,
                                    Plaintiff-Appellant,

                                v.

DAVID WILLIAMS, et al.,
                                            Defendants-Appellees.
                    ____________________

        Appeal from the United States District Court for the
         Southern District of Indiana, Indianapolis Division.
      No. 1:14-cv-00248-SEB-DKL — Sarah Evans Barker, Judge.
                    ____________________

   ARGUED FEBRUARY 23, 2016 — DECIDED AUGUST 8, 2016
                    ____________________

    Before WOOD, Chief Judge, and SYKES and HAMILTON, Cir-
cuit Judges.
    WOOD, Chief Judge. They say every dog has its day. This
case is about a dog—specifically, Emma, a black Labrador.
Emma lived in Indiana with Anthony and Jeanette Van de
Venter, friends of David Williams. When Williams, then visit-
ing the Van de Venters, took Emma outside so that she could
relieve herself, she raced off toward an enticing sound and
Williams was injured. Before us is the question whether
2                                                  No. 15-3400

American Family Mutual Insurance (AmFam), the Van de
Venter’s home insurer, must cover Williams’s medical ex-
penses. AmFam said no and brought this suit for a declara-
tory judgment to confirm its reading of the policy. The district
court, however, found in favor of the Van de Venters and Wil-
liams. We affirm.
                                 I
    The relevant facts are undisputed. In October 2012, Wil-
liams, a college friend of Anthony Van de Venter, visited the
Van de Venters at their home in Monroe County, Indiana. On
Tuesday, October 23, 2012, the Van de Venters went to work,
leaving Williams at home for the day. Williams was sharing
the house with Emma. Before they left, the Van de Venters
told Williams that Emma would be fine inside while they
were away. If she wanted to go outside, they instructed him,
she would ring a bell by the front door, and he should let her
out. They said nothing about walking her.
    At approximately 10:40 a.m., Williams was watching tele-
vision when Emma scratched on his bedroom door. He fol-
lowed her downstairs, clipped a leash to her collar, and ac-
companied her outside. They returned without incident.
Roughly an hour later, Williams heard the bell at the front
door ring. He went downstairs again to find Emma by the
door, whining. He again affixed the leash to her collar and
walked with her into the backyard, away from the road.
    As Williams held Emma’s leash, a “woof” rang out, shat-
tering the early-afternoon air. That neighborhood dog’s bark
proved to be, quite literally, worse than its bite: Emma lurched
toward the sound, pulling Williams to the ground and seri-
ously injuring his shoulder. Williams sued the Van de Venters,
No. 15-3400                                                    3

alleging that they were negligent in, among other things, fail-
ing to exercise reasonable care for his safety while he was a
guest in their home.
   At the time of Williams’s injury, the Van de Venters’ home
was insured by a home-insurance policy with AmFam. The
policy included personal liability coverage indemnifying the
Van de Venters for compensatory damages for bodily injury
and guaranteeing a defense against suits for such damages.
The policy also contained a provision stating: “Intra-Insured
Suits. We will not cover bodily injury to any insured.” In rel-
evant part, the policy defined an “insured” as “any person ...
legally responsible for a[n] ... animal owned by [a named in-
sured or resident relative of a named insured] to which [the
policy’s personal-liability coverages] apply.”
    AmFam took the position that these provisions relieved it
of the duty to defend or indemnify the Van de Venters. As we
noted, the district court rejected its position, and AmFam now
appeals.
                                 II
    We review the district court’s decision to grant summary
judgment de novo. Steimel v. Wernert, 

, 910 (7th Cir.
2016). When reviewing cross-motions for summary judg-
ment, we take the motions one at a time and for each one we
construe all facts and draw all reasonable inferences in favor
of the non-moving party. 

is appropri-
ate only “if the movant shows that there is no genuine dispute
as to any material fact and the movant is entitled to judgment
as a matter of law.” FED. R. CIV. P. 56(a).
  AmFam argues that Williams was legally responsible for
Emma at the time he was hurt, and for that reason he was an
4                                                     No. 15-3400

insured under the policy. As an insured, it concludes, he can-
not turn to the policy for coverage of his claim.
   In diversity cases where neither party raises a conflict of
law issue, federal courts apply the law of the state in which
they sit. Ball v. Kotter, 

, 821 (7th Cir. 2013). This is
such a case. Indiana uses the law of the principal location of
the insured risk. Dunn v. Meridian Mut. Ins. Co., 

, 251 (Ind. 2005) (citing RESTATEMENT (SECOND) OF
CONFLICT OF LAWS § 193 (1971)). The Van de Venters’ house is
located in Indiana, and so we rely on Indiana law.
    If not specifically defined in the policy, clear and unambig-
uous language is given its ordinary meaning. See Holiday
Hosp. Franchising, Inc. v. AMCO Ins. Co., 

, 577
(Ind. 2013). The policy does not define the term “legally re-
sponsible,” nor does it otherwise indicate that the term has a
specific meaning. We therefore turn, as Indiana courts would,
to the dictionary. 

Black’s Law Dictionary defines
“responsibility” as the “quality, state, or condition of being
answerable or accountable; LIABILITY.” BLACK’S LAW
DICTIONARY 1506 (10th ed. 2014). “Liability,” in turn, means
“legal responsibility to another or to society, enforceable by
civil remedy or criminal punishment.” 

To the same
effect, Merriam-Webster defines “responsible” as “liable or
subject to legal review or in case of fault to penalties.”
MERRIAM-WEBSTER’S THIRD NEW INT’L DICTIONARY 1935
(1986). When used in the legal sense, “responsible” means
roughly “subject to some kind of liability.”
    Indiana law makes two kinds of people legally responsible
for animals: owners and keepers. Ross v. Lowe, 

,
914 (Ind. 1993) (“An owner or keeper who fails to exercise ...
reasonable care may be liable in negligence for the manner of
No. 15-3400                                                     5

keeping and controlling the dog.”). Indiana Code § 15-20-1-2
defines an “owner” as “a person who possesses, keeps, or har-
bors a dog.” A “keeper, for purposes of imposition of liability,
is one who exercises control over an animal on his premises
with knowledge of its presence, whether he be an owner, or
bailee.” Williams v. Pohlman, 

, 331 (Ind. Ct. App.
1970). In Vetor by Weesner v. Vetor, 

, 515 (Ind. Ct.
App. 1994), the court held that a jury could find that the vic-
tim’s grandparents were a dog’s keeper where they had “not
simply acquiesced but were intentionally causing the dog to
come to their home.” 

they permitted the dog
to “roam their farm,” fed and watered it, and gave it affec-
tion). In order to qualify as a keeper, a person must “under-
take[] to manage, control, or care for the animal as [an] owner,
in general, is accustomed to do.” 3B C.J.S. ANIMALS § 75. The
definition therefore “implies ... a substantial number of inci-
dents” and that the person “suppl[ies the dog] with the neces-
sities of life.” 

“harbors” a dog when she “affords
[it] lodging, shelters, or gives refuge ... for a limited purpose
or time.” 

    Whatever the limits of these definitions, they are not met
here. Because Emma was not on Williams’s property, he did
not harbor her. Neither did he undertake any control of her
that would approximate that of an owner. He did not inten-
tionally cause her to come to any area of the house. Indeed,
she rang the bell at the front door, signaling that she wished
to go outside. He merely attached her leash and accompanied
her there. Williams was not responsible for giving Emma any
food, water, affection, or other care—and he gave her none.
Except for the brief moments when he walked outside with
her, he did not interact with Emma at all. Even then, it seems
6                                                    No. 15-3400

that his physical control was very limited: their first contest of
wills resulted in his injury.
    Finally, Williams did not have “possession” of Emma un-
der any traditional definition of the word. He did not “exer-
cise dominion over” Emma; neither did he assert a “right un-
der which” he “exercise[d] control over” her “to the exclusion
of all others.” Possession, BLACK’S LAW DICTIONARY at 1351.
Williams was just a houseguest who twice accompanied his
host’s dog outside as it did its business: he did not possess,
keep, or harbor Emma.
    AmFam pushes back with the argument that Williams was
“legally responsible” for Emma because the Van de Venters
granted him a bailment over her. There are several problems
with this theory. First, Indiana law seems to consider bailees
of animals to be a subset of keepers. See 

. If Williams was not a keeper, he could not have been a
bailee. More fundamentally, Williams does not meet Indiana’s
requirements for a bailee. “A bailment arises when: (1) per-
sonal property belonging to a bailor is delivered into the ex-
clusive possession of the bailee and (2) the property is ac-
cepted by the bailee.” Kottlowski v. Bridgestone/Firestone, Inc.,

, 82 (Ind. Ct. App. 1996). Delivery requires “full
transfer ... of the property to the bailee as to exclude the owner
and all other persons.” 

either an ex-
press contract to take the article and later redeliver it, or cir-
cumstances from which such a contract can be implied.” 

these things happened in this case. Emma was not
transferred to Williams at all, let alone to the exclusion of the
Van de Venters. Under the undisputed terms of Williams’s
and the Van de Venters’ understanding, Williams and Emma
No. 15-3400                                                  7

simply coexisted in the house during the Van de Venters’ ab-
sence. Neither did Williams expressly or impliedly agree to
“take” Emma. Quite literally, Williams let a sleeping dog lie—
or do whatever else it was doing. The Van de Venters could
have come back at any time and, on a whim, taken her away.
They could have sent someone else to walk, feed, or take her
out. AmFam wants us to evaluate in isolation the periods dur-
ing which Williams accompanied Emma outside, disregard-
ing the rest of their day together. But doing so does not accu-
rately reflect their relationship (or lack thereof). Despite
spending all day in the same house, Williams’s only interac-
tions with Emma took place when he twice affixed a leash to
her collar, and for a few minutes, accompanied her outside,
exercising at most limited control over her movements.
    Even if it were not clear that Williams was not legally re-
sponsible for Emma, there would be strong reasons to reject
AmFam’s owner, keeper, and bailment theories. First, Am-
Fam’s theory would lead to absurd results: it would render an
unsuspecting bystander legally responsible for the dog whose
leash he holds while the dog owner ties her shoe. In fact,
nearly anyone who tried to control a dog, even for moments,
at the behest of the owner would be legally responsible.
    Moreover, fitting Williams’s conduct within the term “le-
gally responsible” would take all the bite out of its meaning
in the policy. If any person exercising any control over an an-
imal were legally responsible for it under the policy, then
nearly all interactions with animals would be excluded from
policy coverage. The intra-insured provision was not meant
to preclude coverage of every guest or business invitee who
drops by the house and even momentarily controls the dog.
8                                                   No. 15-3400

    Exclusions of coverage must be “clearly expressed to be
enforceable.” State Auto. Mut. Ins. Co. v. Flexdar, Inc., 

, 848 (Ind. 2012). Where they are not, “the policy
will be construed most favorably to the insured.” 

omitted). If AmFam had intended “legally responsi-
ble” to reach so broadly, it should have used more specific
language. Indiana follows the rule that “[p]olicy terms are in-
terpreted from the perspective of an ordinary policyholder of
average intelligence.” Allgood v. Meridian Sec. Ins. Co., 

, 246 (Ind. 2005). An average policyholder would
not consider a houseguest legally responsible for a dog
merely because she agreed to take it out to relieve itself, and
while doing so, held it by a leash. To the extent reasonable
people could differ on the matter, the term must be construed
against AmFam. 

to non-Indiana authorities fail to sup-
port its contention that Indiana would regard Williams as
Emma’s keeper. See, e.g., Malik v. Am. Family Mut. Ins. Co., 

, 642 (Wis. Ct. App. 2001) (plaintiff legally respon-
sible for dog where he took it to his house and cared for it
during owner’s week-long vacation); Van Kleek v. Farmers Ins.
Exch., 

, 303–04 (Neb. 2014) (dogsitter legally
responsible for dog where he was completely responsible for
dog’s care during owners’ four-day vacation). The Utah case
the district court found persuasive, Neztosie v. Meyer, is closer
to this one. See 

, 921 (Utah 1994). Neztosie held
that a grandfather who checked on a dog’s food and water
while its owners were out of town was not a keeper, noting
that the term “implies the exercise of a substantial number of
the incidents of ownership.” 

v. Brown, 

, 656 (Ill. App. Ct. 1958) (“The casual act of feeding
No. 15-3400                                                     9

or watering the dog is not such an act that would constitute
keeping or harboring.”)).
    Finally, AmFam cites a dog’s breakfast of Indiana common
and municipal law theories, none of which indicates that a
person’s fleeting physical control over an animal can make her
liable for the animal’s actions. Williams’s use of a leash does
not in itself give rise to a legal duty under Indiana law. Even
if Williams had what AmFam terms “care, custody, and con-
trol” over Emma at the time of his injury, this status is not con-
nected to any theory of liability under Indiana law. AmFam’s
res ipsa loquitur argument is waived. See D.S. v. E. Porter Cnty.
Sch. Corp., 

, 800 (7th Cir. 2015) (arguments not
raised below are waived). And its assorted citations to state,
county, and municipal law are inapposite. See, e.g., Burgin By
& Through Akers v. Tolle, 

, 766 (Ind. Ct. App.
1986) (common-law duty of owner or keeper); 

(same); Monroe Cnty. Code §§ 440-12–17 (sub-
jecting owners to potential liability); Bloomington Code §
7.24.040 (penalty paid by owner/guardian).
                                 III
   Williams was not Emma’s owner, keeper, or bailee. He was
therefore not “legally responsible” for her under Indiana law,
not an insured under the policy, and not precluded from cov-
erage by the policy’s provision barring intra-insured suits.
AmFam owes duties to defend and indemnify the Van de
Venters against Williams’s suit arising from his injuries. The
judgment of the district court is AFFIRMED.
10                                                No. 15-3400

   HAMILTON, Circuit Judge, concurring. I concur with the
court’s opinion and judgment holding that American Family
must both defend and indemnify the Van de Venters in Wil-
liams’ claim against them for his injury. The undisputed facts
show that when he visited the Van de Venters’ home and
took their dog for a walk, he was not the dog’s owner or
keeper under Indiana law. He therefore was not “legally re-
sponsible” for the dog and so was not an “insured” whose
own injury claim would be excluded from coverage.
    There is another, more fundamental reason for rejecting
American Family’s attempt to deny coverage. Chief Judge
Wood’s opinion for the court hints at it, noting that the “in-
tra-insured provision was not meant to preclude coverage of
every guest or business invitee who drops by the house and
even momentarily controls the dog.” Supra, at 7. It might be
useful for future cases to explain this more fundamental
problem in American Family’s theory. It has less to do with
the tort law of pets and more to do with the law of liability
insurance and the scope of the duty to defend.
   The Van de Venters’ “Gold Star Special Deluxe” home-
owners’ policy with American Family treats as insureds the
Van de Venter family and any other residents of the house-
hold who are relatives or minors in their care, if any. The
policy also provides that for personal liability coverage:
      insured also means: (1) Any person or organi-
      zation legally responsible for a watercraft or
      animal owned by any person included in para-
      graph a. [the household] to which Section II [li-
      ability] Coverages apply. This does not include
      a person or organization using or having cus-
      tody of the watercraft or animal in the course
No. 15-3400                                                   11

       of business or without your specific permis-
       sion.
Pl. App. 53 (¶5-b-1). A similar provision treats domestic em-
ployees as insureds, so that they and the Van de Venters
would be covered if a visitor is hurt by the alleged negli-
gence of an employee. 

the employee and
the watercraft and pets provisions in this homeowners’ poli-
cy are related to the familiar provisions in auto policies that
extend liability coverage, for example, to a friend who drives
an insured vehicle with the owner’s permission. From the
point of view of the insureds, the objective is to buy peace of
mind for the threat of liability for injuries to visitors to the
home or caused by operating family vehicles.
    Ten pages later in the fine print, the eleventh of twenty li-
ability exclusions says: “We will not cover bodily injury to
any insured.” Pl. App. 63. Such “intra-insured” exclusions
prevent fraudulent and collusive claims, for example, by one
family member against another, expecting the deep pocket of
the insurance company to come up with cash. See Frost v.
Whitbeck, 

, 235 (Wis. 2002). Applying the “in-
tra-insured” exclusion to Williams’ claim in this case, how-
ever, has virtually no precedent and would be contrary to
basic principles of liability insurance.
   To begin with, it is hard to imagine how Williams could
be considered “legally responsible” for his own injuries from
the dog’s bolt toward the neighbor’s dog. It’s tempting to
stop there. But American Family has built its entire case by
cooking up an alternative hypothesis. Suppose, it says, that
when Williams took the Van de Venters’ dog for a walk, the
dog had injured somebody else, a neighbor. We know that
did not happen, but it might have happened, says American
12                                                 No. 15-3400

Family, so let’s think it through. We see that American Fami-
ly’s theory for this case collapses from internal contradic-
tions.
    First, the injured neighbor sues both the Van de Venters,
who own the dog, and visitor Williams, who was actually
walking the dog and who they say should have had control
of it. The Van de Venters and visitor Williams then tender
the neighbor’s claim to American Family for a defense. The
Van de Venters are covered, of course, and are owed duties
of both defense and indemnification. What about a duty to
defend visitor Williams? If the insurer or the courts were to
get caught up in the details of Williams’ relationship with
the dog — how long he was staying, his exact duties toward
feeding and walking the dog, and even whether he initiated
the particular walk or the dog did (see supra at 5) — it
would be difficult to decide whether he would be owed a
defense and ultimately whether he would be owed a duty of
indemnification, which would seem to depend on whether
he qualified as a “keeper” under Indiana law. Those ques-
tions have occupied most of this litigation.
    There is a simpler way to address the problem under
American Family’s hypothetical: start with the duty of de-
fense, which must be decided first. Under well-established
principles of liability insurance, the visitor (Williams) is
owed a defense as an insured if someone asserting a claim
based on the household dog’s actions is merely trying to hold
him “legally responsible” for the dog’s actions. If the neigh-
bor ultimately wins a suit against the visitor, then by defini-
tion the visitor is held “legally responsible” and is therefore
an insured and should be covered.
No. 15-3400                                                     13

    But the duty of defense must be decided long before ul-
timate liability can be decided, and before many factual de-
tails can be known. Under the terms of the American Family
policy, the visitor is entitled to a defense simply because he
might be held legally responsible. The hypothetical visitor is
entitled to a defense even if the neighbor’s claim against the
visitor were a sure loser, such as if it were clear the visitor
was not the dog’s keeper. “It is the nature of the claim, not its
merit, which establishes the insurer's duty to defend.” Terre
Haute First Nat'l 

, quoting Trisler v.
Indiana Ins. Co., 

, 1023 (Ind. App. 1991). An
“insurance company has a contractual duty to defend un-
founded, false and fraudulent suits based upon risks it has
insured.” Davidson v. Cincinnati Ins. Co., 

, 505
(Ind. App. 1991), citing Cincinnati Ins. Co. v. Mallon, 

, 1105 (Ind. App. 1980) (duty to defend applies to
“unfounded, false or fraudulent suits” based upon insured
risks); Home Fed. Sav. Bank v. Ticor Title Ins. Co., 

,
731 (7th Cir. 2012) (applying Indiana law and reversing
summary judgment denying duty to defend).
    On the other hand, if the neighbor succeeded on the
claim against the visitor, the visitor would have been found
“legally responsible” and would fit nicely within the defini-
tion of an insured, at least for that incident. That interpretation
of the policy fits with Indiana law and gives the homeowner
and the visitor the peace of mind the homeowner paid for by
buying liability insurance.
    So far, so good. But how far do we go with this visitor’s
status as an insured under the “intra-insured” exclusion? It
should be limited to a specific incident involving the dog. To
explain, let’s use a different hypothetical. Suppose the
14                                                  No. 15-3400

homeowner asks a neighborhood teenager to care for and
walk the dog while the owners are away for a few weeks.
And suppose the teenager is so involved in the dog’s care
that she qualifies as a “keeper” under Indiana law. That
makes her “legally responsible” for the dog, at least when
she takes it for a walk. If the dog hurts another neighbor
while she is walking the dog, she is clearly an insured and
will be defended and indemnified.
    But now suppose the dog-walking teenager, while visit-
ing the house for other purposes, trips and falls on a loose
carpet on the stairs. American Family’s theory seems to be
that the teenager qualifies as an “insured” for all purposes. If
that were correct, the “intra-insured” exclusion would apply
and the homeowners would have no coverage for her claim
against them for their negligence. That result would be un-
just and completely contrary to the reasonable expectations
of all parties, and especially the insured homeowners. Yet
that result follows from American Family’s logic.
    When asked about this hypothetical in oral argument,
American Family’s counsel said the visiting teenager would
not be an “insured” for those purposes. Counsel insisted,
though, that if the visiting teenager slipped on the stairs
while visiting the house to walk the dog, she would still be
an insured so that her own injury claim against the owners
would not be covered. (Oral argument at 6:00—9:40.) Coun-
sel did not provide a basis for American Family’s proposed
line, nor is one evident.
   The problem lies in the assumption, implicit in American
Family’s argument, that an outsider like the dog-walker is an
insured either for all purposes or for no purposes. It makes
more sense, and fits better with the parties’ reasonable ex-
No. 15-3400                                                 15

pectations, to say that a person who is an insured based on
this notion of legal responsibility for the pet is an insured
only with respect to claims against her arising from her ar-
guable legal responsibility for the pet. Surely that would be
the insurer’s position if the visiting dog-walker tendered to
the insurer a claim not related to the dog-walking, such as an
allegedly negligent injury to another guest on the premises.
    This need to focus on the incident giving rise to the claim
becomes obvious in another important context—liability
coverage both for injuries to domestic employees and for in-
juries caused by domestic employees. The American Family
policy here makes clear that it protects the Van de Venters
for claims by injured domestic employees. See Pl. App. 62–64
(¶E-2-c; ¶II-D-7; ¶E-1). But as noted, the American Family
policy treats domestic employees as insureds where they are
alleged to have caused injury to someone else, such as a visi-
tor to the home. Pl. App. 53 (¶5-b-2).
    How does the “intra-insured” exception apply to domes-
tic employees? Under American Family’s argument here, a
domestic employee might be treated as an insured in some
instances, so that employee is also an insured. If that’s true,
there would be no coverage for the Van de Venters if a do-
mestic employee were injured and brought a claim against
them. American Family asserted this position at oral argu-
ment, but it cannot be the law. It would make the policy’s
provisions covering claims by domestic employees illusory if
not downright fraudulent.
    The solution lies in limiting the effect of the provisions
treating outsiders (such as visiting dog-walkers and domes-
tic employees) as insureds. They should apply only for
claims arising directly from incidents that make them in-
16                                                  No. 15-3400

sureds for these very limited purposes. The intra-insured ex-
ception should not apply to deny coverage to the homeown-
ers on claims by people who might be deemed insureds for
such limited purposes and in such limited circumstances.
The purpose of the intra-insured exception simply does not
apply to such people. The broader interpretation advocated
by American Family would contradict other purposes and
provisions in the policy, such as the liability coverage for in-
juries caused by domestic employees and the broad coverage
that homeowners expect for accidents that injure visitors like
Williams.
    Returning from the hypotheticals to this case, we could
also affirm on the simple basis that it makes no sense to treat
Williams as if he were “legally responsible” for his own inju-
ries resulting from the dog’s actions. Accordingly, he was not
an insured for purposes of this incident. The intra-insured
exception does not bar coverage of his claim against the Van
de Venters.