source: Caselaw Access Project

author: JON E WILCOX, J.

license: Public Domain

text:
    Julie Mair, Plaintiff-Appellant-Petitioner, v. Trollhaugen Ski Resort and American Home Assurance Company, Defendants-Respondents.
    Supreme Court

      No. 2004AP1252.

    Oral argument March 14, 2006.

      Decided June 6, 2006.

    2006 WI 61
    (Also reported in 715 N.W.2d 598.)

      For the plaintiff-appellant-petitioner there were briefs by Michael J. Brose, Anne E. Schmiege, and Doar, Drill & Skow, S.C., New Richmond, and oral argument by Michael J. Brose.

    For the defendants-respondents there was a brief by Todd Joseph Koback and Terwilliger, Wakeen, Piehler & Conway, S.C., Wausau, and oral argument by Todd Joseph Koback.

    An amicus curiae brief was filed by William C. Gleisner, III, and Law Offices of William C. Gleisner, III, Milwaukee, on behalf of the Wisconsin Academy of Trial Lawyers, and there was oral argument by William C. Gleisner.

    An amicus curiae brief was filed by Thomas M. Pyper,; Steven W. Keane, and Whyte Hirschboeck Dudek S.C., Milwaukee, on behalf of the Wisconsin Builders Association, Associated Builders and Contractors of Wisconsin, Inc., Associated General Contractors of Wisconsin, Inc., American Institute of Architects - Wisconsin Chapter, and American Council of Engineering Companies of Wisconsin, Inc., and there was oral argument by Steven W. Keane.

   JON E WILCOX, J.

¶ 1. The petitioner, Julie Mair (Mair), seeks review of a published decision of the court of appeals affirming a summary judgment order of the Polk County Circuit Court, Molly E. GaleWyrick, Judge, that dismissed her safe place claim against Trollhaugen Ski Resort, more properly known as Trollhaugen, Inc. (Trollhaugen), and American Home Assurance Company (American Home). See Mair v. Trollhaugen Ski Resort, 2005 WI App 116, 283 Wis. 2d 722, 699 N.W.2d 624.

¶ 2. Mair contends that the circuit court erred in applying the ten-year statute of repose in Wis. Stat. § 893.89 (2003-04) to bar her claim brought under the safe place statute, Wis. Stat. § 101.11. We disagree and conclude that ten years after a structure is substantially completed, § 893.89 bars safe place claims resulting from injuries caused by structural defects, as opposed to safe place claims resulting from injuries caused by unsafe conditions associated with the structure. Because the undisputed material facts demonstrate that Mair's fall was caused by alleged defects in the location, depth, and slope of the floor drain that existed since the building's construction, her injury was caused by an alleged structural defect and not an unsafe condition associated with the structure. Accordingly, we affirm the decision of the court of appeals.

H

¶ 3. On January 23, 2001, Mair fractured her right femur in a women's bathroom located in the chalet of the ski resort. She entered the bathroom wearing her ski boots and walked across the floor to the cubicle. After exiting the cubicle, she stepped into a floor drain with her right foot, lost her footing and fell. The fall fractured her right thigh.

¶ 4. The bathroom where Mair fell was constructed in 1976 with a concrete floor. Neither the configuration of the bathroom nor the floor drain has been modified since the original construction. The recessed area around the drain is an oval shape, not more than 24 to 30 inches in length the long direction. The drain cover itself was depressed approximately half an inch from the bottom of the slope and at a maximum depth of two inches below the plane of the bathroom floor. Routine daily maintenance measures, including inspection, mopping, and cleaning of the bathroom floors, are taken to ensure the safety of the bathroom. The floor is not highly polished, waxed or slippery, and boot scrapers are provided outside the bathroom door.

¶ 5. Mair commenced this suit on December 16, 2002, alleging common-law negligence and violation of the safe place statute, Wis. Stat. § 101.11, against Trollhaugen and its insurer, American Home. She based her negligence claim against Trollhaugen on an assertion that her injury "was proximately caused by the negligence of employees and/or agents of Trollhau-gen Ski Resort." She also claimed Trollhaugen was liable under the safe place statute, Wis. Stat. § 101.11, for its failure "to design, construct, or maintain the premises in as safe a condition as the nature thereof reasonably permitted."

¶ 6. On December 3, 2003, Trollhaugen moved for summary judgment, arguing that Mair's claims were time-barred by the builder's statute of repose, Wis. Stat. § 893.89. This statute reads, in pertinent part, as follows:

[N]o cause of action may accrue and no action may be commenced ... against the owner or occupier of the property or against any person involved in the improvement to real property after the end of the exposure period, to recover damages... for any injury to the person ... arising out of any deficiency or defect in the design, land surveying, planning, supervision or observation of construction of, the construction of, or the furnishing of materials for, the improvement to real property. . ..

Wis. Stat. § 893.89(2). For purposes of the statute, "exposure period" means the "10 years immediately following the date of substantial completion of the improvement to real property." Wis. Stat. § 893.89(1).

¶ 7. In her response brief to Trollhaugen's summary judgment motion, Mair conceded that Wis. Stat. § 893.89 barred her common-law negligence claim and summary judgment was appropriate on that claim. However, she disputed that § 893.89 also barred her safe place claim. Mair also conceded that the safe place statute did not create a distinct cause of action under Wisconsin law, but argued that the safe place statute imposed an ongoing duty to modify or make an existing structure safe if it was unsafe at the time of construction. The circuit court agreed that the safe place statute does not create a distinct cause of action, but simply establishes a higher standard of care than an ordinary negligence claim. It found, therefore, that if a common-law negligence claim is time-barred, any negligence claim as modified by the safe place statute would also be barred.

¶ 8. The circuit court also noted that safe place cases distinguish between property conditions causing injury that are "structural defects" and those that are "unsafe conditions associated with the structure." The court determined that if Mair's cause of action arose from an unsafe condition associated with the structure, it might not fall within the statute of repose and there could potentially be liability against the property owner.

¶ 9. To determine whether the property condition at issue was a structural defect or an unsafe condition associated with the structure, the court considered the deposition of Larry Seiberlich (Seiberlich), Mair's liability expert. Seiberlich opined to a reasonable degree of professional certainty that the design, location, and construction of the recessed floor drain caused or contributed to Mair's injury. He also stated that the location, depth, and slope of the recess did not offend any Wisconsin building codes, only what he considered industry standards.

¶ 10. Seiberlich was also asked whether he believed that the bathroom lighting or the color of the bathroom walls or floor may have caused or contributed to the fall. He stated that the lighting was appropriate and that the red color of the bathroom wall "may have been" a factor in Mair's fall, but he could not state such an opinion to a reasonable degree of professional certainty.

¶ 11. Mair's answers to Trollhaugen's interrogatories also spoke to a structural defect rather than an unsafe condition associated with the property as the cause for her fall. For example, in response to her basis for the allegations of negligence, Mair responded as follows:

My fall resulted from the placement of an unmarked recessed drain in the exit path from the toilet cubicle in the bathroom facility. This was of sufficient depth to result in my unfooting and injury. Nothing had been done to highlight this hazard either directly or in the form of any warning signs at entry or inside. This incident occurred in a facility supposedly designed for the use of visitors to the center and the placement of the recess in a high traffic area which shows a lack of appreciation of foreseeable risk in the provision of such facilities. The depth of the depression is sufficient to be a major contributor to a fall but insufficient to draw immediate attention to itself without some form of visual enhancement or hazard warning sign, neither of which were present. The failure of Dalco Enterprises Inc. [sic] their Agents or Employees to highlight the above hazard resulted in my jeopardy and injury. They have failed to provide a facility for public use which one could regard as a Safe Place, either from a statutory point of view or in my own reality.

Furthermore, at Mair's deposition, counsel for Troll-haugen asked her, "[i]s it fair to say that there was nothing about the condition of the floor other than the dip that caused or contributed to cause your fall?" To this, Mair answered, "[a]s far as I was concerned, it was the dip that made me fall."

¶ 12. The circuit court concluded that the defects in the location, depth, and slope of the floor drain, which Seiberlich opined were the cause of Mair's accident, were structural defects. Although defects in the lighting or paint color or a lack of warning signs could be considered unsafe conditions associated with the structure, Mair did not present sufficient evidence necessary to survive summary judgment that these were potential causes of her fall. Because the undisputed material facts demonstrated that the sole potential cause of Mair's fall was an alleged structural defect, the court granted Trollhaugen's motion for summary judgment and dismissed Mair's complaint in a written decision entered on March 9, 2004.

¶ 13. The court of appeals affirmed. Mair, 283 Wis. 2d 722. It first concluded that the safe place statute covers construction and the ongoing duty to keep the premises safe by repairing and maintaining the premises. Id., ¶¶ 7, 11. The builder's statute of repose, however, bars claims made after ten years for an injury arising out of a defect in design or construction of a building. Id., ¶ 8. Therefore, the court of appeals concluded that "to the extent Mair's safe place claim is based on defective construction of the bathroom floor, the claim is barred by the ten-year statute of repose." Id., ¶ 10. The court of appeals also determined that to the extent Mair's injuries arose out of a breach of the statutory duty to repair or maintain the premises, thus leading to an unsafe condition associated with the structure, Trollhaugen did not have actual or constructive notice of the defect. Id., ¶¶ 13-14. Mair appeals from this decision.

HH I — I

¶ 14. This case comes before us on summary judgment. "We review a circuit court's grant of summary judgment independently, applying the same methodology as the circuit court." Smaxwell v. Bayard, 2004 WI 101, ¶ 12, 274 Wis. 2d 278, 682 N.W.2d 923 (citing Town of Delafield v. Winkelman, 2004 WI 17, ¶ 15, 269 Wis. 2d 109, 675 N.W.2d 470). Pursuant to Wis. Stat. § 802.08(2), summary judgment "shall be rendered if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, 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." "We view the summary judgment materials in the light most favorable to the nonmoving party." Smaxwell, 274 Wis. 2d 278, ¶ 12 (citing Torgerson v. Journal/Sentinel, Inc., 210 Wis. 2d 524, 537, 563 N.W.2d 472 (1997)). "Summary judgment should not be granted, 'unless the facts presented conclusively show that the plaintiffs action has no merit and cannot be maintained.'" Id. (quoting Goelz v. City of Milwaukee, 10 Wis. 2d 491, 495, 103 N.W.2d 551 (1960)). "Where the material facts are not disputed, the court is presented solely with a question of law, subject to de novo review." Id. (citing Winkelman, 269 Wis. 2d 109, ¶ 16).

¶ 15. Furthermore, this case presents an issue of statutory interpretation, which is a question of law we review de novo. Fuchsgruber v. Custom Accessories, Inc., 2001 WI 81, ¶ 10, 244 Wis. 2d 758, 628 N.W.2d 833. "[Statutory interpretation 'begins with the language of the statute. If the meaning of the statute is plain, we ordinarily stop the inquiry.'" State ex rel. Kalal v. Cir. Ct. for Dane County, 2004 WI 58, ¶ 45, 271 Wis. 2d 633, 681 N.W.2d 110 (quoting Seider v. O'Connell, 2000 WI 76, ¶ 43, 236 Wis. 2d 211, 612 N.W.2d 659). Statutory language is also "interpreted in the context in which it is used; not in isolation but as part of a whole; in relation to the .language of surrounding or closely-related statutes; and reasonably, to avoid absurd or unreasonable results." Id., ¶ 46.

H-i I — I f — 1

¶ 16. We first address whether Mair's safe place claim is barred by Wis. Stat. § 893.89. Mair argues that it is not, as the statute of repose is intended to apply only to common-law negligence claims. The statute of repose, Mair argues, is restricted to negligent acts at the time of construction, while the safe place law is not limited to the initial construction but imposes an ongoing duty to furnish a safe place. Essentially, it is Mair's position that if Trollhaugen built a bathroom floor that was unsafe at the time of construction in 1976, the safe place statute places an ongoing duty on Trollhaugen to make the structure safe at all times thereafter.

¶ 17. Conversely, Trollhaugen argues that Mair's claim is barred by Wis. Stat. § 893.89, as the statute of repose applies to safe place claims based on structural defects but not to claims based on unsafe conditions associated with the structure. Further, Trollhaugen argues that Mair has not presented evidence sufficient to overcome summary judgment on her safe place claim, as her claim was based solely on an alleged structural defect.

¶ 18. Under a plain reading of the statutory sections at issue and in light of our prior safe place case law, we agree with Trollhaugen that Wis. Stat. § 893.89 bars safe place claims resulting from injuries caused by structural defects beginning ten years after a structure is substantially completed. Furthermore, in light of the pleadings, depositions, and answers to interrogatories presented to the circuit court at summary judgment, Mair's claim is based on an alleged structural defect and occurred more than ten years after the building was substantially completed. Therefore, the circuit court properly rendered summary judgment to Trollhaugen, and we affirm the decision of the court of appeals.

¶ 19. Wisconsin's safe place statute, Wis. Stat. § 101.11, is a negligence statute that imposes a heightened duty on employers and owners of place's of employment and public buildings to construct, repair, or maintain buildings safely. Barry v. Employers Mut. Cas. Co., 2001 WI 101, ¶¶ 18-19, 245 Wis. 2d 560, 630 N.W.2d 517. Section 101.11(1) reads, in pertinent part, as follows:

(1) Every employer .. . shall furnish a place of employment which shall be safe for employees therein and for frequenters thereof and shall furnish and use safety devices and safeguards, and shall adopt and use methods and processes reasonably adequate to render such employment and places of employment safe, and shall do every other thing reasonably necessary to protect the life, health, safety, and welfare of such employees and frequenters. Every employer and every owner of a place of employment or a public building now or hereafter constructed shall so construct, repair or maintain such place of employment or public building as to render the same safe.

For purposes of this statute, "safe" means "such freedom from danger to the life, health, safety or welfare of employees or frequenters, or the public... as the nature of the employment, place of employment, or public building, will reasonably permit." Wis. Stat. § 101.01(13). Furthermore, safe "does not mean completely free of any hazards. . . . Just because a place could be made more safe, it does not necessarily follow that an employer or owner has breached the duty of care established by Wis. Stat. § 101.11(1)." Megal v. Green Bay Area Visitor & Convention Bureau, Inc., 2004 WI 98, ¶ 10, 274 Wis. 2d 162, 682 N.W.2d 857 (citations omitted).

¶ 20. The safe place statute does not create a distinct cause of action, but provides a higher duty than the duty of ordinary care regarding certain acts by employers and owners of places of employment or public buildings. Barry, 245 Wis. 2d 560, ¶ 18. The statute imposes three specific duties on these employers and owners: "to construct, to repair, and to maintain a safe place of employment or public building." Id., ¶ 20.

¶ 21. Despite the statute's focus on the duties imposed upon employers and owners, our case law has focused on the unsafe conditions that arise from a breach of one of the three specific duties. Id., ¶ 24. The two categories of unsafe property conditions relevant here are: (1) " 'structural defects'" and " 'unsafe conditions associated with the structure.' "M, ¶ 21 (quoting Howard H. Boyle, Jr., Wisconsin Safe-Place Law Revised 139 (1980)).

¶ 22. A structural defect arises " 'by reason of the materials used in construction or from improper layout or construction.'... [A] structural defect is a hazardous condition inherent in the structure by reason of its design or construction." Id., ¶ 28 (internal citation omitted). Furthermore, a structural defect arises from a breach of the duty to construct a safe building. Id. There is no notice requirement for a structural defect; a property owner is "liable for injuries caused by structural defects regardless of whether he or she knew or should have known that the defect existed." Id., ¶ 22.

¶ 23. Alternatively, an unsafe condition associated with the structure arises from "the failure to keep an originally safe structure in proper repair or properly maintained." Id., ¶ 27. These "conditions" arise from a breach of the statutory duty to repair or maintain the property and generally involve the structure falling into disrepair or not being maintained in a safe manner. Id., ¶ 25. The duty of the owner to repair or maintain the public building or place of employment arises when the owner has actual or constructive notice of the defect. Id., ¶ 23.

¶ 24. In light of these categories of unsafe property conditions, we turn to the facts of this case. After reviewing the record before us, Mair's single theory of liability is that the negligent design and placement of the floor drain and the slope of the surrounding floor caused her to fall and break her leg. To support this theory, Mair had an expert witness, Seiberlich, testify to a reasonable degree of professional certainty that the location, depth, and slope of the recessed floor drain caused or contributed to Mair's injury. In Seiberlich's words:

I believe that the location of the drain was inappropriate. And from a design perspective, we make all attempts as architects to locate depressed drains out of pathways. I believe whoever located the drain made a mistake in that location and should have located it in a non-pathway area. I believe that the drain was too deep, it violated normative and industry standards, and the slope was extensive beyond what the industry standards dictate. The installation then and the design I believe were contributing factors.

These allegations all relate to a hazardous property condition that is a structural defect rather than an unsafe condition associated with the structure. That is, there is no allegation that Trollhaugen allowed the bathroom floor to fall into disrepair or did not maintain it in a safe manner. Based on the evidence presented to the circuit court at the summary judgment stage, there is no dispute that the floor and drain were in their original condition since the initial construction of the ski resort approximately 30 years ago, and Mair's allegations are based on an alleged failure to safely construct the bathroom.

¶ 25. Mair argues that the failure to modify the drain to comply with modern safety standards creates an unsafe condition associated with the structure. However, as noted, an unsafe condition associated with the structure involves a structure falling out of repair or not being maintained in a safe manner. That is, the employer or owner essentially breaches his or her statutory duty to repair or maintain the property. Barry, 245 Wis. 2d 560, ¶ 25. Because the design and placement of the floor drain and the condition of the surrounding floor have nothing to do with a failure to repair or maintain the property, they can be classified only as structural defects rather than unsafe conditions associated with the structure.

¶ 26. Mair also alleges that the bathroom lighting, the color of the bathroom walls or floor or the lack of warning signs or markers may have caused her injury. While Seiberlich testified that the color of the room may have been a contributing factor in causing Mair's fall, he was unable to give his opinion to a reasonable degree of professional certainty on that issue. Although defects in the lighting or paint color or a lack of warning signs could be considered unsafe conditions associated with the structure, Mair did not present evidence sufficient to escape summary judgment that such a condition contributed to her fall. Because the undisputed material facts demonstrate that Mair's injury was caused by alleged defects in the location, depth, and slope of the floor drain that existed since the building's construction, her injury was caused by an alleged structural defect and not an unsafe condition associated with the property.

¶ 27. We now turn to an analysis of the builder's statute of repose, Wis. Stat. § 893.89, which sets forth "the time period during which an action for injury resulting from improvements to real property must be brought." Kohn v. Darlington Cmty. Schs., 2005 WI 99, ¶ 13, 283 Wis. 2d 1, 698 N.W.2d 794. The statute begins to run when the improvement is substantially completed and prohibits a cause of action from accruing after the ten-year exposure period ends. Wis. Stat. § 893.89. It is a statute of repose rather than a statute of limitation because it "provides that a cause of action must be commenced within a specified amount of time after the defendant's action which allegedly led to injury, regardless of whether the plaintiff has discovered the injury or wrongdoing." Tomczak v. Bailey, 218 Wis. 2d 245, 252, 578 N.W.2d 166 (1998). Causes of action within the scope of the statute include "any deficiency or defect in the design, land surveying, planning, supervision or observation of construction of, the construction of, or the furnishing of materials for, the improvement to real property." Wis. Stat. § 893.89 (emphasis added).

¶ 28. There are several exceptions to the statute of repose, enumerated in Wis. Stat. § 893.89(4). Safe place claims brought under Wis. Stat. § 101.11, however, are not specifically excepted. This omission combined with § 893.89(l)'s inclusion of deficiencies or defects in the design or construction of improvements to real property indicate to us that the builder's statute of repose was intended to apply to at least certain safe place claims, namely those concerning a breach of the duty to construct a safe place of employment or a public building. Again, a breach of the duty to construct a safe structure correlates to structural defects.

¶ 29. There is, however, an exception for claims brought against "[a]n owner or occupier of real property for damages resulting from negligence in the maintenance, operation or inspection of an improvement to real property." Wis. Stat. § 893.89(4)(c) (emphasis added). Under the safe place statute, a failure to "maintain" correlates to an unsafe condition associated with the structure, and thus allegations of such defects do not fall under the purview of the builder's statute of repose. Thus, from a plain reading of the statute, we can conclude that § 893.89 bars safe place claims resulting from injuries caused by structural defects, but not by unsafe conditions associated with the structure, beginning ten years after a structure is substantially completed.

¶ 30. In this case, Mair alleged in her complaint that Trollhaugen failed to maintain the premises in as safe a condition as its nature permitted. However, at the summary judgment stage, Mair could not back such a claim up, as she did not present any genuine issues of material fact demonstrating that an unsafe condition associated with property caused her fall. Furthermore, she did not allege in the complaint that Trollhaugen negligently operated or inspected the bathroom floor. Under Wis. Stat. § 893.89(4)(c), such claims are sufficient to escape the scope of the statute of repose. In essence, Mair's claim related to a failure to design and construct a safe building, and therefore, it is barred under the statute of repose.

¶ 31. Our interpretation of the interplay between Wis. Stat. §§ 893.89 and 101.11 is also consistent with the legislative history of Wis. Stat. § 893.89. The original version of the statute, Wis. Stat. § 893.155 (1973-74), protected those involved in the " 'design, planning, supervision of construction or construction of such improvement to real property.'" Kallas Millwork Corp. v. Square D Co., 66 Wis. 2d 382, 388, 225 N.W.2d 454 (1975) (quoting Wis. Stat. § 893.155 (1973-74)). The statute did not apply to those classes ignored by the statute, such as materialmen, and it specifically excluded the "owners and occupants" of the buildings. Id. The Kallas court held that the statute was unconstitutional as written, as "the legislative classification that gives special protection to the protected group is unreasonable." Id. at 391. While the court recognized that there are public policy reasons that may justify a limitations period for those in the construction business, it concluded "there appears no reason why only a very restricted class of those thus occupied is protected by the statute." Id. In other words, where the cause of injury would be the same in any particular case, a limited grant of immunity would serve only to shift liability from those who were most likely the cause of the defect to other groups who did not qualify for protection under the statute.

¶ 32. The legislature subsequently passed a revised version of the statute that added land surveyors and material providers, but not owners and occupiers, to the list of protected groups. § 2, ch. 323, Laws of 1975; Funk v. Wollin Silo & Equip., Inc., 148 Wis. 2d 59, 64-66, 435 N.W.2d 244 (1989). The revision also contained a statement of intent explaining that persons involved in the planning, design, and construction of improvements to real estate lacked sufficient control over the property after the project's completion to determine the need for maintenance or repairs and did not have the power to effect these repairs if needed. § 1, ch. 335, Laws of 1975. On review, the Funk court rejected the legislature's use of "control over the property" as a rational way to determine which groups qualified for protection under the statute, stating that continuing control was irrelevant where a statute was intended to prevent liability for errors or omissions in the construction of an improvement to real property. Id. at 67. Because the court determined that the revisions reduced the under-inclusiveness of the statute but did not eliminate it completely and that the statutory means were not substantially or rationally related to the stated end, it held that the revised version of the statute was still in violation of equal protection. Id. at 76-77.

¶ 33. Following this decision, the legislature passed 1993 Wis. Act 309, which amended the statute a second time. Kohn, 283 Wis. 2d 1, ¶ 61. The legislature cited a concern that "groups were reluctant to participate in state-sponsored construction projects because of the limited period of protection offered by state-purchased insurance coverage and the potential for unlimited tort liability past the end of such coverage." Id. The new revision provided protection for owners and occupiers to the extent they were involved in the original design and construction of the improvement, but not for negligence in maintenance or repair of the improvement once it was completed. Id., ¶ 66. In Kohn, we held that this class distinction was rationally related to the purpose of the revised statute, protecting those involved in the design and construction of improvements to real property, and that the statute did not violate equal protection. Id., ¶ 81.

¶ 34. Application of Wis. Stat. § 893.89 to safe place claims based on a structural defect is consistent with the intent of the legislature in passing revised versions of the statute of repose. The previous versions of the statute were declared unconstitutional, in large part, because they did not include protection for owners and occupiers. After the first two versions of the statute were struck down, the legislature was forced to choose between forgoing the statute of repose altogether or including owners and occupiers within its scope. By asking this court to apply the statute of repose as if the revisions had not been made, Mair is asking the court to ignore its own previous decisions regarding the statute's constitutionality and the decision of the legislature that it was preferable as a matter of public policy to limit causes of action against owners and occupiers than to discard the statute of repose for members of the construction industry.

¶ 35. While we have concerns that this construction of the statutes effectively limits the duty of owners and occupiers to bring existing buildings in line with modern concepts of safety, this limitation of Wis. Stat. § 101.11 is necessary for the statute of repose to serve its intended purpose. The legislature determined that there is a public interest in terminating liability for structural defects after a specified time in addition to an interest in providing safe buildings. If Wis. Stat. § 893.89 terminates liability for members of the construction industry ten years after a structure is completed but does not terminate liability for property owners, an injured party will simply bring a claim against the owner and liability will shift between groups rather than being eliminated. Applying § 893.89 to safe place claims for structural defects, however, will terminate liability for these defects without affecting an owner's duty to repair and maintain a structure in a condition as safe as reasonably possible given any inherent defects in its structure.

IV

¶ 36. For the first time on this appeal, Mair seeks review of the constitutionality of Wis. Stat. § 893.89. Mair attempts to characterize the court of appeals' decision as creating a new classification under § 893.89. However, the classification about which Mair is complaining is one which this court has already addressed and upheld. See Kohn, 283 Wis. 2d 1, ¶ 80 (holding that class distinctions in § 893.89 between owners and occupiers and other classes "rationally serve[d] the legitimate purpose of limiting the long-term liability of those who are involved in the improvement of real property[,]" and did not violate the equal protection clauses of the state or federal constitutions). We therefore need not address the constitutionality of § 893.89 again here today.

V

¶ 37. In sum, we conclude that ten years after a structure is substantially completed, § 893.89 bars safe place claims resulting from injuries caused by structural defects, as opposed to safe place claims resulting from injuries caused by unsafe conditions associated with the structure. Because the undisputed material facts demonstrate that Mair's fall was caused by alleged defects in the location, depth, and slope of the floor drain that existed since the building's construction, her injury was caused by an alleged structural defect and not an unsafe condition associated with the structure. Accordingly, we affirm the decision of the court of appeals.

By the Court. — The decision of the court of appeals is affirmed.

       All subsequent references to the Wisconsin Statutes are to the 2003-04 version unless otherwise indicated.

       Dalco Enterprises, Inc. (Dalco) and its insurer were also named as defendants. In 1992, employees of Dalco resealed the bathroom floor at issue with a clear epoxy sealant containing nonslip grit. Because the coating was still in good condition at the time of Mair's fall and because Mair's liability expert did not find the sealant to be a contributing factor to her fall, Mair stipulated to dismiss Dalco and its insurer.

       Mair's answer was in response to a question asking her to state the manner in which she alleges employees or agents of Dalco were negligent; however, her answer references safe place duties and the placement of the drain, which indicate the answer was intended to address negligence on the part of Trollhaugen, not Dalco.

       Mair claims that the distinction between "structural defects" and "unsafe conditions associated with the structure" is not applicable to this case as the distinction has been recognized only as it pertains to whether a property owner need have notice of a defect before being held liable for an unsafe condition. We do not read our case law in such a restrictive light and conclude that the categories of unsafe property conditions are a useful distinction for purposes of our analysis here.


author: N. PATRICK CROOKS, J.

text:
    First American Title Insurance Company, Plaintiff-Respondent, v. Dennis A. Dahlmann, Defendant-Appellant-Petitioner.
    Supreme Court

      No. 2004AP2318.

      Oral argument April 25, 2006.

      Decided June 7, 2006.

    2006 WI 65
    (Also reported in 715 N.W.2d 609.)

      For the defendant-appellant-petitioner there were briefs by Timothy J. Yanacheck and Bell, Gierhart & Moore, S.C., Madison, and oral argument by Timothy J. Yanacheck.

    For the plaintiff-respondent there was a brief by J. Bushnell Nielsen and Reinhart Boerner Van Deuren S.C., Waukesha, and oral argument by J. Bushnell Nielsen.

   N. PATRICK CROOKS, J.

¶ 1. Petitioner Dennis A. Dahlmann (Dahlmann) seeks review of an unpublished decision of the court of appeals, affirming the circuit court's declaratory judgment in favor of First American Title Insurance Company (First American). The issue before this court is whether an encroachment by an improvement onto adjacent land constitutes a defect or encumbrance in the title of the insured property for the purpose of the title insurance contract at issue in this case.

¶ 2. We reverse the decision of the court of appeals. We hold that a substantial encroachment, created by an improvement onto adjacent land, constitutes an encumbrance on the title of the insured property for the purpose of the title insurance contract at issue in this case. We further hold that such a substantial encroachment, and thus an encumbrance, is covered under the terms of the title insurance policy at issue. However, the issue of whether the encroachment here is "substantial," so as to constitute an encumbrance on title, for purposes of the title insurance contract, presents a question of fact for the trier of fact to resolve. We, therefore, remand the case to the circuit court for such a determination.

r-H

¶ 3. On January 15, 1999, Dahlmann purchased the Madison Inn (Inn), a hotel that abuts Frances Street in Madison. At the time Dahlmann purchased the Inn, he also purchased title insurance from First American on the property. The policy provided:

SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS, FIRST AMERICAN TITLE INSURANCE COMPANY... insures ... against loss or damage... sustained or incurred by the insured by reason of:
1) Title to the estate or interest described in Schedule A being vested other than as stated therein;
2) Any defect in or lien or encumbrance on the title;
3) Unmarketability of the title[.] '

¶ 4. In addition, the policy defined the "land" for which title is being insured:

[ T]he land described or referred to in Schedule (A), and improvements affixed thereto which by law constitute real property. The term "land" does not include any property beyond the lines of the area described or referred to in Schedule (A), nor any right, title, interest, estate or easement in abutting streets, roads, avenues. ...

¶ 5. In issuing the title insurance policy, First American relied upon a survey completed by Jeffrey Johnson in 1994 (Johnson survey), and an affidavit from the landowner who sold the Inn to Dahlmann. The Johnson survey depicted the encroachment of an exterior wall of the parking garage and a vent into a four-foot right-of-way. However, the survey did not depict the encroachment of the garage under Frances Street. The seller's affidavit stated that no changes had been made to the Inn to affect the structure's size or location since the Johnson survey was conducted. As a result, at the request of Dahlmann's attorney, First American agreed to omit from the title insurance policy two potentially relevant exceptions, which were included in the standard form title commitment: (1) "Any discrepancies or conflicts in boundary lines, any shortages in area, or any encroachment or overlapping of improvements." (Encroachment exception); (2) "Any facts, rights, interests or claims which are not shown by the public record but which could be ascertained by an accurate survey of the land." (Survey exception). As a result of the policy amendments, Dahl-mann paid an additional premium.

¶ 6. The Inn and its underground parking garage were built in 1960. From the time of its initial construction, the parking garage encroached upon the land beneath Frances Street, which is owned by the City of Madison (City). Although the encroachment is not recorded in any record maintained by the City, the original building plans depict the encroachment. The City discovered the encroachment in March 2002 when it was repairing a sidewalk adjacent to the Inn. Upon discovering the encroachment, the City sought to collect a $3,980 annual fee from Dahlmann for the privilege of encroaching under Frances Street pursuant to a city ordinance. Otherwise, the City suggested it would require Dahlmann to remove the encroachment.

¶ 7. In response to the City's demand for the privilege fee, Dahlmann requested that First American provide a defense and indemnification. First American, in turn, filed this action, seeking a declaratory judgment that its policy did not afford Dahlmann coverage for the encroachment. The Dane County Circuit Court, John C. Albert, Judge, agreed with First American, and granted the motion for a declaratory judgment. The circuit court determined that the policy did not afford coverage because the policy only covered the land within the legal description in Schedule A. Therefore, because the encroachment was outside the described property, it did not fall within the title insurance coverage. The court of appeals affirmed, and Dahlmann petitioned for review.

II

¶ 8. The facts were stipulated to before the circuit court, including the date of purchase, the existence of an encroachment from the time the Inn was built, the absence of the buyer's agent's knowledge of the encroachment, and the striking of the Survey and Encroachment exceptions from the title policy. Since the parties do not dispute any of the facts, this case presents a question of law, of insurance policy interpretation, which this court reviews de novo. Mau v. N.D. Ins. Reserve Fund, 2001 WI 134, ¶ 12, 248 Wis. 2d 1031, 1041, 637 N.W.2d 45; Blackhawk Prod. v. Chicago Ins., 144 Wis. 2d 68, 77, 423 N.W.2d 521 (1988).

f&emdash;1 I&emdash;I

¶ 9. The issue before this court is whether the encroachment of the Inn's parking garage onto property owned by the City is covered under First American's policy as an "encumbrance on the title." The parties dispute the correct interpretation of the policy, and in particular, the significance of the deletion of the Survey and Encroachment exceptions.

¶ 10. Dahlmann argues that coverage for the Inn's encroachment onto City land under Frances Street exists under the title insurance policy, as the encroachment constitutes an encumbrance on the title. Dahlmann maintains that it does not matter whether a structure encroaches upon the insured property, or a structure on the insured property encroaches upon adjacent land — if the encroachment is substantial, the result is an encumbrance on the title of the insured property, and the title insurance policy insures him against any damage or loss caused by such an encumbrance on his title. Dahlmann further contends that deleting the Survey and Encroachment exceptions from Schedule B demonstrates the parties' intent to insure against an encroachment such as the one at issue in this case.

¶ 11. First American does not claim that any exclusion or exception from coverage precludes coverage. Rather, First American claims that the loss for which Dahlmann seeks compensation does not fall within the initial grant of coverage, as limited by the definition of "land" in Schedule A. First American argues that the title insurance policy does not insure the title to any property beyond the bounds of what is described in Schedule A. In other words, there is no encumbrance on title, because Dahlmann does not have title to any part of Frances Street. Further, it is First American's position that the policy insures the title to a specifically described piece of land, and land is defined in the policy to exclude "any property beyond the lines of the area described or referred to in Schedule A," as well as "any right, title, interest, estate or easement in abutting streets, roads, avenues...First American notes that the policy issued to Dahlmann is a standard form, which many other jurisdictions have had occasion to interpret as failing to provide coverage for encroachments similar to that in the present case.

¶ 12. "Title insurance is a contract of indemnity which obligates the title insurer to pay loss as defined by the policy." Duane H. Wunsch, Wisconsin Commercial Real Estate Transactions, § III-l (2000). The purpose of title insurance "is to indemnify the insured for impairment of its interest due to failure of title as guaranteed in the title insurance report." Greenberg v. Stewart Title Guar. Co., 171 Wis. 2d 485, 493, 492 N.W.2d 147 (1992) (quoting Blackhawk, 144 Wis. 2d at 78).

¶ 13. There are three steps necessary in our consideration of whether the encroachment of the Inn parking garage onto adjoining property is covered under the terms of the title policy. First, we must determine when an encroachment constitutes an "encumbrance on title." Second, we need to examine the terms of the policy, including the effect of the omission of the Survey and Encroachment exceptions. Finally, we must discuss the effect on coverage of the definition of "land" in Schedule A.

A

¶ 14. A title defect is a claim or interest that is inconsistent with the title purportedly transferred. Turner v. Taylor, 2003 WI App 256, ¶ 8, 268 Wis. 2d 628, 673 N.W.2d 716. One treatise explains there are four types of defects: (1) defects in the chain of title; (2) lack of record title because the seller claims ownership through adverse possession; (3) lack of title in the seller because a third-party claims adverse possession against the seller; and (4) encumbrances. 14 Michael Allan Wolf, Powell on Real Property § 81.03[6][d], at 81-126 to 81-127 (2000). The only type of defect relevant in this case is an encumbrance.

¶ 15. An encumbrance is a" 'claim or liability that is attached to property... that may lessen its value.. ..'" O'Connell v. O'Connell, 2005 WI App 51, ¶ 12, 279 Wis. 2d 406, 694 N.W.2d 429 (citation omitted). Examples of encumbrances include leases, mortgages, easements, and encroachments. Powell § 81.03[6][d], at 81-132 to 81-136. Thus, the question of whether the policy affords coverage for the encroachment by the parking garage under Frances Street turns, first, on the question of whether this particular encroachment is an "encumbrance on the title."

¶ 16. In In re Meehan, this court considered a case in which the buyer of a motel sued the seller for breach of warranty against encumbrances, after learning that part of a stone wall and a sign for the motel at issue encroached upon a public right-of-way. In re Meehan, 30 Wis. 2d 428, 430-31, 141 N.W.2d 218 (1966). The court concluded that the warranty against encumbrances extended to structures originating on the seller's property that encroach upon adjoining property. Id. at 433.

An encroachment occurs not only when a structure on adjoining property encroaches substantially on your property without the benefit of an appurtenant easement, but conversely, when a structure on your property encroaches upon the adjoining property without the benefit of such an easement. A warranty against [ejncumbranees extends to both types of encroachment.

Id. (footnote omitted). The Meehan court also held that "an encroachment amounts to an [ejncumbrance if it is substantial." Id. at 432 (footnote omitted).

¶ 17. The Meehan court laid out four factors to be considered "in determining whether or not a substantial encroachment exists ... [1] 'the character or extent of the encroachment, [2] the cost or possibility of its removal, [3] the length of time the encroachments had continued, [and] [4] municipal acquiescence, or the like.'" Id. at 433 (citation omitted) (citing L.S. Tellier, Annotation, Encroachment of Structure on or Over Adjoining Property or Way as Rendering Title Unmarketable, 47 A.L.R.2d 331, 335, § 2 (1956)).

¶ 18. The Inn's parking garage is an encroachment onto the City's property. Although Meehan concerned a title warranty, as opposed to title insurance, the Meehan court set forth a test to determine whether an encroachment was substantial, so as to constitute an encumbrance. Meehan, 30 Wis. 2d at 432-33. We can see no reason why the reasoning of Meehan should not be extended to an analogous situation involving title insurance. Both title insurance and title warranties exist to protect a buyer from an unknown defect or defects. Furthermore, property law is best served by applying consistent meanings to language used in the same or a similar context. We, therefore, conclude that the Meehan test should be applied to this case to determine if an encroachment is substantial, so as to constitute an encumbrance on title.

¶ 19. While articulating the factors to be considered in assessing the substantiality of an encroachment, Meehan is silent on whether each of the factors deserves equal weight, or if the factors are to be applied in an equitable manner, weighing the totality of circumstances. We conclude that a court should apply the Meehan factors using a totality of the circumstances approach. We reach this conclusion for two reasons.

¶ 20. First, the Meehan factors were drawn from 47 A.L.R.2d 331. Based on the summary of cases reported by the author in A.L.R.2d, it appears most courts employ an equitable, totality of the circumstances analysis, with a heavy emphasis on how much the structure physically encroaches, and how much it would cost to remove the encroachment. See, e.g., Loeffler v. Roe, 69 So.2d 331 (Fla. 1954); Sinclair v. Weber, 104 A.2d 561 (Md. 1954). Second, substantiality is a relative concept, and the test itself does not lend itself to a bright-line approach.

¶ 21. The issue of whether an encroachment is substantial, and thus constitutes an encumbrance, presents a question for the trier of fact to resolve. We, therefore, remand that issue to the circuit court for determination of whether, based upon the totality of the circumstances, the encroachment of the Inn's parking garage is substantial, so as to constitute an encumbrance.

¶ 22. If the circuit court finds the encroachment of the garage to be substantial, and thus an encumbrance, it becomes necessary to resolve the issue of whether the title insurance policy here covers such an encumbrance. To do so, we must next consider the effect of the deletion of the Survey and Encroachment exceptions.

B

¶ 23. The title insurance policy issued to Dahl-mann by First American provides: "SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS AND STIPULATIONS, FIRST AMERICAN ... insures . . . against a loss or damage . . . sustained or incurred by the insured by reason of. .. [a]ny defect in or lien or encumbrance on the title."

¶ 24. "Title insurance policies are subject to the same rules of construction as are generally applicable to contracts of insurance." Laabs v. Chicago Title Ins. Co., 72 Wis. 2d 503, 510, 241 N.W.2d 434 (1976) (citations omitted). "An insurance policy must be construed with consideration for what a reasonable person in the position of the insured would have understood its words to mean.." Id. at 511 (citing Luckett v. Cow ser, 39 Wis. 2d 224, 231, 159 N.W.2d 94 (1968)). Furthermore, "[a] construction of an insurance policy which entirely neutralizes one provision should not be adopted if the contract is susceptible of another construction which gives effect to all of its provisions and is consistent with the general intent...." Id., (citing Inter-Insurance Ex. v. Westchester Fire Ins. Co., 25 Wis. 2d 100, 106, 130 N.W.2d 185 (1964)). Construction of an insurance policy presents a question of law; "it is the process that determines the legal consequences that follow from a contractual term." Denny's Restaurants, Inc. v. Sec. Union Title Ins. Co., 859 P.2d 619, 623 (Wash. Ct. App. 1993).

¶ 25. Title insurance policies contain two types of provisions that reduce coverage: exclusions and exceptions. " 'Exclusions and exceptions are similar in that each class of items limits the coverage of the policy. However, exclusions refer to subjects beyond the ambit of the policy, while exceptions are matters generally within the scope of the insuring provisions.'" Wunsch at § III-6 (quoting J. Nielsen, Title Escrow Claims Guide, § 12.1, at 354 (1996)). Exceptions, not exclusions, are at issue in this case.

¶ 26. Commentators have noted that:

[ r]ecently, title insurers have indicated a willingness to delete the survey exception from the [American Land Title Association] loan policy, when issued, to insure mortgages involving commercial property, without a current land survey, provided that a non-contemporaneous land survey of the same property is supplied for examination along with an affidavit by the landowner to the effect that nothing described in the non-contemporaneous land survey has changed.

Wunsch at § III-9. This is, of course, precisely what occurred in this case.

¶ 27. In Greenberg v. Stewart Title, this court explained:

the issuance of a title commitment does not... constitute an independent undertaking by the insurer to search the title for the benefit of the insured. Rather, the title commitment "generally constitutes no more than a statement of the terms and conditions upon which the insurer is willing to issue its title policy ... ." Any search done by an insurer in preparation for preparing a title commitment is done to protect itself in deciding whether to insure the property and to protect against losses covered in the policy.

Greenberg, 171 Wis. 2d at 494, (internal citation omitted). It is generally recognized that "[t]itle insurance is unique in the world of insurance, for it is based largely upon a search of the public records of interests in real property to ascertain pre-existing defects. This places the title insurer in the 'unique position of being able, through its own work, to eliminate claims.1" Paul Bintinger, Conflict of Interest: Attorney as Title Insurance Agent, 4 Geo. J. Legal Ethics 687, 690 (1991) (quoting D. Burke, Law of Title Insurance 2, 22 (1986)).

¶ 28. We are satisfied that the deletion of exceptions does not, in and of itself, create coverage where none exists. See Barlow Burke, Law of Title Insurance, § 9.03 at 9-10 (3d ed. 2000) ("An exception is not the opposite of coverage and so eliminating it does not automatically provide coverage."). However, the effect of the deletion of the Schedule B standard exceptions supports Dahlmann's position, that the policy covers an encumbrance on title, in at least two ways. First, the deletion of the Survey and Encroachment exceptions has an effect on the plain meaning of the policy, which, along with the additional premium Dahlmann paid, may be properly read as having created an "extended" policy. Second, the elimination of the two exceptions speaks to the reasonable expectations of the parties, especially the insured, to the contract. Both of these issues must be considered against the background that title insurance is intended, at least in part, to protect the buyer of the insurance/property.

¶ 29. First American argues that it waived the Survey and Encroachment exceptions from Schedule B because the policy was amended to include coverage for the known encroachment of the parking garage wall and the vent into the four-foot right-of-way. First American explains that the right-of-way encroachment would have been excepted from coverage, were it not for the payment of an additional premium paid by Dahl-mann. First American also contends that its policy does not insure against the risk of unknown encroachments. It maintains that the deletion of the Survey and Encroachment exceptions was intended to cover other aspects of the property.

¶ 30. First American's arguments are, ultimately, unconvincing. In its willingness to delete the Survey exception, and rely on the accuracy of the Johnson survey, First American assumed the risk that it would be providing coverage for an encroachment not documented on the land survey. If the policy exceptions were intended to be waived only with respect to the known encroachment, First American certainly was experienced and sophisticated enough to state this limited waiver of the exceptions by so stating in the policy. Its failure to do so leads to the logical conclusion that the parties contracted to cover encroachments through the deletion of the exception.

¶ 31. Under a standard policy in which all Schedule B exceptions are present, no encroachments are covered by the policy, even substantial ones. Under an extended policy, the parties may agree to remove some exceptions to coverage, exposing the title insurer to greater liability under the policy. See Denny's, 859 P.2d at 621-22, 627-28. The effect of removing much of the substance of Subsection B, along with the additional premium Dahlmann paid, had the effect of providing Dahlmann with "extended coverage." Furthermore, the logical application of Meehan's treatment of substantial encroachments leads to a conclusion that policies that do not except encroachments cover loss or damage due to a substantial encroachment, consistent with the encumbrance provision of the policy, here.

¶ 32. Construing the policy to include coverage for defects based upon a substantial encroachment seems consistent with the reasonable expectation of the insured here.

¶ 33. Other jurisdictions faced with construing similar contract provisions have reached the same conclusion. For example, in Rackouski v. Dobson, 634 N.E.2d 1229 (Ill. App. Ct. 1994), the Illinois Appellate Court considered a case in which the title insurance contract which covered loss or damage due to an encumbrance on title under Schedule A, had also modified Schedule B to delete the standard exceptions, including the exception for encroachments.

¶ 34. The Illinois court held that the encroachment of the insured's barn upon adjoining property was covered under the policy, because the waiver of standard exceptions to coverage was evidence that the parties agreed to cover encroachments under the Schedule A terms. Id. at 1231. The Rackouski court reasoned that when an insurer expressly waives exceptions to coverage for encroachments, the logical conclusion is that coverage is available for encroachments. Id.

¶ 35. Similarly, in Denny's the Washington Court of Appeals held that the deletion of the standard exceptions created ambiguity in regard to the extent of policy coverage. The Washington court concluded that extrinsic evidence of the party's intent supported a finding that the policy provided coverage for encroachments.

¶ 36. The Denny's court reasoned that the rationale for "extended coverage" is so that items excluded in the standard contract will be covered in the policy at issue. The same reasoning should be applied to the case before us. Additionally, the Washington court said that logic compels this result: "Logically, a deleted exclusion indicates that the former exclusion is no longer applicable; any other result would undermine the rationale for paying additional consideration to obtain extended coverage." Denny's, 859 P.2d at 627.

¶ 37. Ordinarily, the existence of the Survey exception and the Encroachment exception in Schedule B make it clear that the risk insured against is limited to the risk of a defect in the chain of title or some other recorded encumbrance on the title. When these exceptions are present, a title insurer should only be liable for defects in the record of the title. Absent these exceptions or other applicable exclusions, however, it would seem that coverage extends to any discrepancy between the record of title and the physical reality of the corresponding property. Therefore, a plain reading of the language of the contract, and the reasonable expectation of the insured, lead to the conclusion that an undetected encroachment is covered by the title insurance policy.

C

¶ 38. Before we conclude that a substantial encroachment onto adjacent property constitutes an encumbrance on title that is covered under the terms of this policy, we must also consider the effect of a finding of coverage in relation to the policy's definition of "land" in Schedule A. At the heart of the arguments made by First American is its claim that the title insurance policy does not insure title to any property beyond the bounds of what is described in Schedule A. In other words, First American argues that the policy only covers encumbrances on title for land listed in Schedule A in accord with the contract definition of land. We are satisfied that such an argument misconstrues the purpose of title insurance as insuring land rather than insuring title. Again, we turn to precedent from other jurisdictions that have considered issues similar to those in this case.

¶ 39. In concluding that the title insurance policy covered the encroachment of an improvement onto adjoining property, the Illinois court in Rackouski explained "[t]he policy insures against defects or clouds in ... title to the land, not the land itself." Rackouski, 634 N.W.2d at 1231. The court reasoned that, to construe the word "land... to exclude coverage for the encroachment... would contradict the apparent intent of the parties demonstrated by the execution of the policy with the standard exclusions deleted." Id.

¶ 40. The Denny's court cited Shotwell v. Transamerica Title Ins. Co., 588 P.2d 208 (Wash. 1978), for the notion that "often policy descriptions were taken directly from the deed conveying title, and the purpose of the legal description in a title insurance policy was to identify the land covered, not to limit the protection." Denny's, 859 P.2d at 626 (citing Shotwell, 588 P.2d at 213). In Shotwell, the Washington Supreme Court rejected the position that the description of land within the policy limited the insurance protection. The court in Denny's followed similar reasoning in its conclusion that "the purpose of the legal description in a title insurance policy was to identify the land covered, not to limit the protection. To limit protection to that found in the legal description would effectively require purchasers of title insurance to become their own insurers." Denny's, 859 P.2d at 626 (citation omitted).

¶ 41. The Denny's court reasoned that a "restrictive definition of 'land' becomes ambiguous in light of circumstances indicating the purpose of the extended coverage policy is to insure against off-record defects, defects which may fall outside the legal description of land contained within the policy." Id. We agree that the definition of "land" is ambiguous, in light of the omission of the Survey and Encroachment exceptions. Therefore, because ambiguous terms in an insurance policy are construed against the drafter, we conclude that the definition of "land" is not controlling on the scope of coverage, and, therefore, that the definition of "land" in Schedule A does not limit coverage. Frost v. Whitbeck, 2002 WT 129, ¶ 19, 257 Wis. 2d 80, 654 N.W.2d 225. As we have previously stated, "ambiguous terms are to be construed in favor of coverage, and exclusions are to he narrowly construed against an insurer." Id. (footnotes omitted).

IV

¶ 42. We reverse the decision of the court of appeals. We hold that a substantial encroachment, created by an improvement onto adjacent land, constitutes an encumbrance on the title of the insured property for the purpose of the title insurance contract at issue in this case. We further hold that such a substantial encroachment, and thus an encumbrance, is covered under the terms of the title insurance policy at issue. However, the issue of whether the encroachment here is "substantial," so as to constitute an encumbrance on the title of the insured property, for purposes of the title insurance contract, presents a question for the trier of fact to resolve. We, therefore, remand the case to the circuit court for such a determination.

By the court — The decision of the court of appeals is reversed, and the case remanded to the circuit court for further proceedings consistent with this opinion.

        First Am. Title Ins. Co. v. Dahlmann, No. 2004AP2318, unpublished slip op. (Wis. Ct. App. Oct. 13, 2005).

       Petitioner presents an alternate question of whether the encroachment here renders the title unmarketable, and therefore falls within the insurance coverage. Because we resolve the issue on the basis of an encumbrance on title, we need not reach the question of unmarketability, but note that such an issue also presents questions for the trier of fact. See Mellinger v. Ticor Title Ins. Co., 93 Cal. App. 4th 691, 697 (2001).

       The polity affords Dahlmann $2,150,000 in coverage; the premium was $1,182.50.

       The policy defines "unmarketability of the title" as
      an alleged or apparent matter affecting the title to the land, not excluded or excepted from coverage, which would entitle a purchaser of the estate or interest described in Schedule A to be released from the obligation to purchase by virtue of a contractual condition requiring delivery of marketable title.

       Schedule A provides, in relevant part, "[t]he land referred to in this policy is described as follows: Lot Seven (7), and the East 25 feet of Lot Six (6), Block Seven (7), Original Plat of the City of Madison, Dane County, Wisconsin."

       The encroachment of the exterior wall of the parking garage and the vent into the four-foot right-of-way was specifically identified as an exception to coverage in both Schedule B and in an appended endorsement.

       "A title commitment is a document which describes the property as the title insurer is willing to insure it and contains the same exclusions and general and specific exceptions as later appear in the title insurance policy." Greenberg v. Stewart Title Guar. Co., 171 Wis. 2d 485, 488, 492 N.W.2d 147 (1992).

       The encroachment occupies 1,980 square feet.

        See Havstad v. Fid. Nat'l Title Ins. Co., 58 Cal. App. 4th 654, 660 (1997)(title insurance policy did not insure title to improvements that encroached into a public street when the policy "clearly and explicitly" defined "land" not to include "any property beyond the lines of the area described ... in Schedule A, nor any right, title, interest, estate or easement in abutting streets . . ." (emphasis omitted)); Heyd v. Chicago Title Ins. Co., 354 N.W.2d 154 (Neb. 1984)(title insurance policy did not cover the encroachment of insured's house onto public street because encroachment did not create a defect in title to insured land); Transamerica Title Ins. Co. v. Northwest Bldg. Corp., 773 P.2d 431, 433 (Wash. 1989) (title insurance policy did not insure title to paved area encroaching onto adjacent private land, as "[t]he encroaching areas of land and improvements at issue extend beyond the borders of the legal description, and thus are expressly excluded from coverage by the policy's unambiguous terms.")(abrogated by Denny's Restaurants, Inc. v. Sec. Union Title Ins. Co., 859 P.2d 619 (Wash. Ct. App. 1993)).

       The Meehan court adopted the rule regarding substanti-ality based upon what was the general rule in the United States. Citing L.S. Tellier, Annotation, Encroachment of Structure on or Over Adjoining Property or Way as Rendering Title Unmarketable, 47 A.L.R.2d 331 (1956), the court explained, "[a]lthough this appears to be a question of first impression in Wisconsin, the rule elsewhere is that an encroachment amounts to an [e]ncumbrance if it is substantial." In re Meehan, 30 Wis. 2d 428, 432, 141 N.W.2d 218 (1966).

       Defects known to both parties are exceptions from coverage, unless otherwise addressed in Schedule B and/or a separate endorsement. Encroachments known to the buyer, but unknown to the title insurance company, are specifically excluded from coverage.

        Meehan, 30 Wis. 2d at 433. See also Mellinger, 93 Cal. App. 4th at 696; and see Wilson v. Pac. Coast Title Ins. Co., 235 P.2d 431, 433 (Cal. Ct. App. 1951) wherein the California Court of Appeal clearly stated that: "[w]hether such title was defective was a question of fact for the determination of the trial court, as was the question of whether such title was 'unmarketable.'" As we have stated earlier, an encumbrance is one type of title defect. See Supra ¶ 14.
      We acknowledge, however, that there may be extreme situations when the encroachment is so de minimis or so complete that the court may determine the question as a matter of law. See Mellinger, 93 Cal. App. 4th at 697.

       The American Land Title Association, founded in 1907, is the national trade association representing the title insurance industry.

       "The least negotiable of the standard policy exceptions is the standard survey exception." Duane H. Wunsch, Wisconsin Commercial Real Estate Transactions, § III-8 (2000). Title insurers generally demand a current land survey and surveyor's certificate, which the title insurance provider then examines for encroachments. Id. at § III-8 - 9. "[A]t a minimum, the surveyor should certify that he has examined the property for encroachments, that the survey depicts all buildings, structures, fences and improvements, and that the description represents a complete and accurate description of the land." Id. at § III-9.