author: CANE, C.J.

text:
    Mary L. Gulmire, Plaintiff-Appellant, Casualty Insurance Company, Intervening-Plaintiff-Respondent, v. St. Paul Fire and Marine Insurance Company, State Farm Mutual Automobile Insurance Company, State Farm Fire and Casualty Company, and Floyd E. Klister, Defendants-Respondents.
    Court of Appeals

      No. 03-1199.

      Submitted on briefs October 13, 2003.

      Decided December 23, 2003.

    2004 WI App 18
    (Also reported in 674 N.W.2d 629.)

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Avram D. Berk and Jolene D. Schneider oí Peterson, Berk & Cross, S.C. of Appleton.
    On behalf of the defendants-respondents, State Farm Mutual Automobile Insurance Company and State Farm Fire and Casualty Company, the cause was submitted on the brief of Jonathan M. Menn of Menn, Teetaert & Beisenstein, Ltd. of Appleton.
    On behalf of the defendant-respondent, St. Paul Fire & Marine Insurance Company, the cause was submitted on the brief of Stephen W. Pasholk and Ellen' L. Wiesner oí Hogan, Ritter, Minix & Pasholk of Wauke-sha.
    Before Cane, C.J., Hoover, PJ., and Peterson, J.

       Petition to review denied 3-23-04.

   CANE, C.J.

¶ 1. Mary Gulmire appeals a summary judgment granted in favor of State Farm Fire and Marine Insurance Company and State Farm Fire and Casualty Company (collectively "State Farm"), and a declaratory judgment granted to St. Paul Fire and Marine Insurance Company. Gulmire claims that various exclusions in State Farm's personal automobile insurance policy and in St. Paul's commercial automobile insurance policy either do not apply or, alternatively, if they do apply there is a violation of the omnibus statute, Wis. Stat. § 632.32.

¶ 2. As to State Farm, we hold that the "non-owned vehicle" exclusion is not prohibited by the omnibus statute and precludes coverage. As to St. Paul, we do not address the issue of whether the exclusions conflict with the omnibus statute because we hold that none of them bars coverage due to the "separation of protected persons" provision. Accordingly, we affirm the summary judgment and reverse the declaratory judgment.

Background

¶ 3. On August 16, 1999, Gulmire was injured when she was hit by a vehicle operated by Floyd Klister on the premises of their employer, Fox Valley Auto Auction. At the time of the incident, both Gulmire and Klister were acting in the course of their employment. The vehicle Klister operated was a Dodge Colt titled in the name of Fox Valley Wholesale Company. Pursuant to Wis. Stat. § 102.03(2), Gulmire commenced an action against Klister, State Farm (Klister's personal automobile insurer), and St. Paul (Fox Valley Auto Auction's commercial automobile liability insurer) for Klister's negligent operation of a motor vehicle.

¶ 4. State Farm moved for summary judgment. Its automobile policy provided coverage for damages Klis-ter was legally obligated to pay because of bodily injury to others caused by accident and resulting from the ownership, maintenance or use of Klister's personal automobile, a 1996 Oldsmobile Cutlass. However, State Farm claimed a "non-owned vehicle" exclusion barred coverage. The exclusion stated, "[t]here is no coverage for non-owned cars ... while ... being . . . used by any person while that person is working in any car business." Gulmire argued the exclusion violated the omnibus statute, specifically Wis. Stat. § 632.32(6)(b)2.a.

¶ 5. The trial court determined the exclusion barred coverage and concluded this did not violate the omnibus statute. Because the automobile insurance did not afford coverage, the court also concluded State Farm's umbrella policy was inapplicable.

¶ 6. St. Paul asked for a declaratory judgment that it was not obligated to defend or indemnify Klister for the accident. St. Paul's commercial automobile liability policy provided coverage to "protected persons" for damages they are legally obligated to pay for bodily injury that results from the use of a covered automobile. It is undisputed that Klister was a protected person and that the vehicle involved in the accident, the Dodge Colt, was a covered automobile. However, St. Paul raised three exclusions: the "fellow employee" exclusion, the "employer's liability" exclusion, and the "worker's compensation" exclusion.

¶ 7. Gulmire claimed that the exclusions did not apply. She contended the worker's compensation exclusion was inapplicable because she was not seeking to recoup worker's compensation costs, but rather was suing Klister for the negligent operation of a motor vehicle. She argued the fellow employee and the employer's liability exclusions should not apply because of the "separation of protected persons" provision. Gul-mire claimed the provision functioned to separate Klis-ter from the other insureds and to treat him as if he was the only named insured. Therefore, she concluded the fellow employee and the employer's liability exclusions did not apply because Klister did not employ Gulmire. Alternatively, Gulmire maintained that if the exclusions nevertheless barred coverage, the omnibus statute was violated.

¶ 8. The trial court concluded the fellow employee exclusion barred coverage. It acknowledged the separation of protected persons provision required Klister to be treated as if he was the only named insured. However, it concluded the fellow employee exclusion nevertheless applied and that this was lawful. Gulmire appeals.

Discussion

¶ 9. When reviewing a summary judgment, we perform the same function as the trial court, making our review de novo. Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315, 401 N.W.2d 816 (1987). Summaiy judgment must be entered "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." Wis. Stat. § 802.08(2). The summary judgment requires an interpretation of the omnibus statute and State Farm's insurance policies. These present questions of law we also review de novo. See Hull v. State Farm Mut. Auto. Ins. Co., 222 Wis. 2d 627, 636, 586 N.W.2d 863 (1998).

¶ 10. Finally, the grant or denial of a declaratory judgment is addressed to the trial court's discretion. Jones v. Secura Ins. Co., 2002 WI 11, ¶ 19, 249 Wis. 2d 623, 638 N.W.2d 575. However, when the exercise of such discretion turns upon a question of law, we review the question de novo, benefiting from the trial court's analysis. Id. Here, the issue turns upon the construction of St. Paul's insurance contract, an exercise that presents a question of law we independently review. See Folkman v. Quamme, 2003 WI 116, ¶ 12, 264 Wis. 2d 617, 665 N.W.2d 857.

I. State Fam Automobile Liability Insurance Policy

¶ 11. Klister's State Farm automobile liability insurance policy contains a "non-owned vehicle" exclusion. It states, "[t]here is no coverage for non-owned cars ... while ... being... used by any person while that person is working in any car business." Gulmire has not raised any issue regarding the applicability of the exclusion by its plain terms. Instead, she narrowly argues the exclusion contravenes the omnibus statute, Wis. Stat. § 632.32(6)(b)2.a.

¶ 12. Generally speaking, the omnibus statute is remedial in nature and is to be construed broadly. Home Ins. Co. v. Phillips, 175 Wis. 2d 104, 111, 499 N.W.2d 193 (Ct. App. 1993). Its purpose is to afford compensation to victims of automobile accidents. Id. However, the omnibus statute specifically authorizes insurers to incorporate exclusions that limit coverage connected with automobile accidents. See Wis. Stat. § 632.32(5)(e). To determine if an exclusion violates the omnibus statute, we apply a two-part test. Mau v. North Dakota Ins. Reserve Fund, 2001 WI 134, ¶ 32, 248 Wis. 2d 1031, 637 N.W.2d 45. First, we look to § 632.32(6) to decide whether the exclusion falls within one of the enumerated prohibitions. Id. If it does, the matter is resolved. Id. If not, we then consider whether any other applicable law proscribes the exclusion. Id.

¶ 13. Turning to the first part of the test, Gulmire argues the exclusion is prohibited by Wis. Stat. § 632.32(6)(b)2.a. That section states: "No policy may exclude from the coverage afforded or benefits provided: ... Any person who is a named insured or passenger in or on the insured vehicle, with respect to bodily injury, sickness or disease, including death resulting therefrom, to that person." The plain language of this prohibition reveals that it invalidates an exclusion only when all of the following circumstances are present: (1) the person excluded must be a named insured or a passenger; (2) the named insured or passenger must have been in or on the insured vehicle; and (3) "that person," either the named insured or passenger, must have sustained injuries while being in or on the insured vehicle. See id.

¶ 14. The non-owned vehicle exclusion is not prohibited by Wis. Stat. § 632.32(6)(b)2.a. Again, the exclusion states, "[t]here is no coverage for non-owned cars . . . while .. . being.. . used by any person while that person is working in any car business." It is evident that the exclusion only seeks to bar coverage for non-owned vehicles under given circumstances. However, § 632.32(6)(b)2.a only prohibits excluding coverage for certain individuals relating to the insured vehicle. Thus, considering that the exclusion bars coverage for a non-owned vehicle, it is not prohibited by § 632.32(6)(b)2.a.

¶ 15. Gulmire argues Wis. Stat. § 632.32(6)(b)2.a does more. She argues the phrase "coverage afforded" implies a general right of the named insured to indemnity. In support of her position, she cites Davison v. Wilson, 71 Wis. 2d 630, 641, 239 N.W.2d 38 (1976). We are not persuaded. Davison held that "coverage afforded" did not imply a right to indemnity because interpreting the statute in that manner would lead to an absurd result. Id. The supreme court recognized that "under such interpretation, there could be no exclusion, for whatever reason, of the coverage afforded to a named insured." Id. Thus, § 632.32(6)(b)2.a does not imply a right of the named insured to indemnity for anything other than bodily injuries the insured or passenger sustained in the insured vehicle.

¶ 16. We now turn to the second part of the test to determine if other applicable law renders the non-owned vehicle exclusion unlawful. An exclusion is valid "[w]hen a named insured and all additional insureds are excluded in reference to some risk of coverage not required by public policy or statute." Bertler v. Employers Ins., 86 Wis. 2d 13, 25, 271 N.W.2d 603 (1978). Gulmire points to no statute that requires insurance companies to insure all non-owned vehicles. Thus, this part of the test centers on public policy considerations.

¶ 17. Gulmire argues that the public policy grounding tort law and the purpose of the omnibus statute, when considered together, require invalidating the exclusion. She notes that Wis. Stat. § 102.03(2) gives an injured employee the right to bring an action against a co-employee for negligent operation of a motor vehicle. However, she claims that application of the non-owned vehicle exclusion results in an uninsurable risk for Klister and, somehow, a windfall to State Farm. Because it is the policy of tort law to provide compensation for persons injured by negligent conduct, Heath v. Zellmer, 35 Wis. 2d 578, 600, 151 N.W.2d 664 (1967), and because it is the duty of the courts to further the public policy behind the law, id., she argues the exclusion should be struck. We are not swayed.

¶ 18. Just because it is the general public policy of tort law and the omnibus statute to provide compensation to victims of the negligent operation of automobiles, we cannot rewrite the plain language of a policy to create coverage for a risk that was never contemplated by the parties. See Maas v. Ziegler, 172 Wis. 2d 70, 79, 492 N.W.2d 621 (1992). This maxim is grounded in an alternative, and in this case competing, public policy favoring freedom of contract. See Bertler, 86 Wis. 2d at 25-26. This freedom will be preserved unless we are presented with overriding reasons for depriving the parties of that freedom. Id. at 25-26.

¶ 19. With these public policies in the balance, we see no overriding reason to deprive State Farm from its freedom of contract. While it is true that enforcing the exclusion in this case results in an uninsured risk for Klister, and could possibly deprive Gulmire of her legal right to be made whole, the public policy surrounding freedom of contract must overcome these considerations. If we accepted Gulmire's argument that the public policy surrounding torts should trump the insurance policy's exclusion, the implications would be enormous: any exclusion limiting the named insured's coverage would be eliminated. See Davison, 71 Wis. 2d at 641. This bizarre result would prevent insurers from ever limiting their risk by contractual terms. To avoid this absurdity, we decline to accept Gulmire's argument and conclude the exclusion meets the second part of the test. Because the exclusion passes both parts of the omnibus/exclusion test, it is valid and operates to bar coverage.

II. State Farm Umbrella Policy

¶ 20. Klister's State Farm umbrella policy also does not afford coverage. The policy contains the following "business pursuits" exclusion: "We will not provide insurance ... for any loss caused by your business operations or arising out of business property."

¶ 21. Gulmire does not dispute that the accident was caused by business operations. Instead, she argues an exception to the exclusion precludes its application, thereby extending coverage for the accident. This exception states: "[The business pursuits] exclusion does not apply to a private automobile . .. when used for business if: (1) your underlying policy applies to the loss; and (2) the private automobile ... is not for hire either for the use of others or for carrying the property of others." However, because we conclude that the underlying insurance does not apply to the accident, the exception is inapplicable. Therefore, the business pursuits exclusion bars coverage as well.

III. St. Paul Commercial Automobile Liability Policy

A. Who Is Covered Under The Policy

¶ 22. St. Paul issued a commercial automobile liability policy to Gerald Sheriff, d/b/a Fox Valley Auto Auction and Fox Valley Wholesale Company. The policy affords liability coverage to various "protected persons" for bodily injury or property damage that results from the use of a covered automobile. Under the "Who Is Protected Under This Agreement" section, a protected person includes, but is not limited to, the named insureds listed on the policy's introduction (Sheriff, Fox Valley Auto Auction and Fox Valley Wholesale) and "any permitted user." A permitted user is "[a]ny person or organization to whom you've given permission to use a covered auto you own, rent, lease, hire or borrow." "You" is defined as any of the three named insureds listed on the introduction. It is undisputed that Klister was driving a covered automobile owned by Fox Valley Wholesale with permission at the time of the accident. Klister, therefore, is a protected person under the policy.

¶ 23. St. Paul argues that even though Klister is a protected person, various exclusions — the fellow employee exclusion, the employer liability exclusion, and the worker's compensation exclusion — bar coverage. Gulmire claims the exclusions do not apply after application of the "separation of protected persons" provision. Because of this provision, Gulmire argues Klister becomes a separate and distinct insured under his own policy; thus, the various exclusions will not apply. We agree.

B. The "Separation of Protected Persons" Provision

¶ 24. The separation provision states:

We'll apply this agreement:
• to each protected person named in the Introduction as if that protected person was the only one named there; and
• separately to each other protected person.
However, the limit of coverage shown in the Coverage Summary is shared by all protected persons. ...

The separation clause takes effect after an individual has been declared a protected person. In other words, the separation clause does not create or extend coverage to a protected person; that is the function of the "Who Is Protected Under This Agreement" section. Instead, the separation provision only concerns how the particular protected person is to be treated throughout the policy.

¶ 25. The issue here concerns how the separation provision operates. We construe insurance policies "to give effect to the intent of the parties, expressed in the language of the policy itself." Danbeck v. American Family Mut. Ins. Co., 2001 WI 91, ¶ 10, 245 Wis. 2d 186, 629 N.W.2d 150. We interpret the policy's language from the standpoint of a reasonable insured. Id. "Where the language of the policy is plain and unambiguous, we enforce it as written, without resort to rules of construction or principles in case law." Id.

¶ 26. The plain language of the separation provision indicates it effectively creates several policies from the original policy. The first clause of the separation provision deals with the protected persons named in the introduction. These are the named insureds: Sheriff, Fox Valley Auto Wholesale and Fox Valley Auto Auction. The separation provision applies the policy to each named insured as if that insured was the only named insured. That is, if all three of the named insureds sought coverage under the policy, the separation provision would literally sever the agreement into three distinct policies, one for Sheriff, another for Fox Valley Wholesale, and the final to Fox Valley Auction. The limits of coverage, though, would not be multiplied by the severance.

¶ 27. The second clause of the separation provision states that the agreement will be applied "separately to each other protected person." Klister is an "other protected person"; hence, he falls within this clause. The term "separately" is not defined in the policy. Because we interpret insurance policies from the standpoint of a reasonable insured, we look to the ordinary lay dictionary to determine what a reasonable insured would understand this term to mean. See Just v. Land Reclamation, Ltd., 155 Wis. 2d 737, 745, 456 N.W.2d 570 (1990) ("When determining the ordinarily understood meaning of a word or phrase, it is appropriate to look to definitions in a recognized dictionary.").

¶ 28. "Separately" means "in a separate manner : individually, independently," WebsteR's Third New Int'l Dictionary 2070 (unabr. 1993), and "separate" means "to set or keep apart : detach." Id. at 2069. Therefore, Klister is treated in an independent manner such that he is detached from all other protected persons. Like the named insureds being treated individually as if each was the only named insured, each other protected person is also treated in the same manner; that is, as if that protected person was the only named insured. Consequently, Klister is treated as if he was the named insured in his own policy. With this conclusion at hand, we now turn to the exclusions.

C. Exclusions

1. The Fellow Employee Exclusion.

¶ 29. St. Paul first raises the fellow employee exclusion. The exclusion states:

We won't cover bodily injury to a fellow employee of any protected person arising out of and in the course of the fellow employee's employment by you.

It is undisputed that Gulmire was a fellow employee of Klister and that her injuries arose out of and occurred in the course of her employment. If that were all the exclusion called for, we would agree with the trial court and St. Paul that the exclusion bars coverage. However, the exclusion demands more. It requires Gulmire's injuries to arise out of and occur in the course of her employment "by you." These modifying words are what create difficulty. After applying the separation provision it is apparent that the exclusion cannot be applied, for it now reads:

We won't cover bodily injury to a fellow employee [Gulmire] of any protected person [Klister] arising out of and in the course of the fellow employee's [Gulmire's] employment by you [Klister].

Gulmire was employed by Fox Valley Auto Auction, not by Klister. Thus, the exclusion does not bar coverage.

2. The Employer's Liability Exclusion

¶ 30. St. Paul next advances the employer's liability exclusion. This exclusion provides:

We won't cover bodily injury to an employee arising out of his or her employment by a protected person.

Applying the separation provision, the exclusion now reads:

We won't cover bodily injury to an employee [Gulmire] arising out of his or her employment by a protected person [Klister],

Again, Klister did not employ Gulmire. Therefore, the exclusion is inapplicable.

3. The Worker’s Compensation Exclusion

¶ 31. Finally, St. Paul offers the worker's compensation exclusion. The exclusion states:

We won't cover any obligation that the protected person has under a workers' compensation ... law.

In light of the separation provision, the exclusion now states:

We won't cover any obligation that the protected person [Klister] has under a workers' compensation . . . law.

This exclusion does not apply. Klister, as a non-employer, does not have any obligation under worker's compensation. See Wis. Stat. § 102.03 and 102.04. Besides, Gulmire is not seeking worker's compensation. Instead, she has brought a claim under § 102.03(2) for a co-employee's negligent operation of a motor vehicle. Thus, the exclusion has no bearing on this action. See Severin v. Luchinske, 271 Wis. 378, 383, 73 N.W.2d 477 (1955).

D. Non-Absurd Result

¶ 32. Some could argue that our conclusion produces an absurd result. See Capital Invs. v. Whitehall Packing Co., 91 Wis. 2d 178, 193, 280 N.W.2d 254 (1979) (obligation of courts in construing contracts to avoid unusual and extraordinary interpretations that lead to absurd results). Klister, an additional insured (who becomes the named insured), is granted greater coverage than the actual named insureds, Sheriff, Fox Valley Auto Wholesale, and Fox Valley Auto Auction, would have under the same circumstances.

¶ 33. The South Dakota Supreme Court recognized this problem in St. Paul Fire & Marine Insurance Co. v. Schilling, 520 N.W.2d 884 (S.D. 1994). There, the court held it would not support an interpretation of the same separation provision at issue in this case that created separate insurance policies for all protected persons. Id. at 889. The court's conclusion rested on the premise that a permittee user, that is, an additional insured, cannot have more coverage under the policy than the named insured. Id.

¶ 34. In Wisconsin, however, we have allowed for this result. In United States Fidelity & Guaranty Co. v. PBC Productions, 153 Wis. 2d 638, 451 N.W.2d 778 (Ct. App. 1989), a co-employee's negligent use of an automobile case, we granted greater coverage to an additional insured by construing "the insured" in an employee exclusion to refer to the tortfeasor employee and not the employer. Id. at 642. In that case, PBC obtained business automobile insurance under a policy issued by USF&G. PBC gave permission to Larson to drive this vehicle. Wittliff was a passenger in the vehicle and was injured when it collided with another. Both Wittliff and Larson were PBC employees, and both were acting within the course of their employment when the accident occurred. Larson was an "insured" under the policy since he was driving PBC's van at the time of the accident with PBC's permission. Id. at 640. Wittliff sued USF&G for Larson's negligence.

¶ 35. USF&G denied coverage on the grounds that an employee exclusion barred coverage. Id. at 641-42. The employee exclusion stated:

C. WE WILL NOT COYER - EXCLUSIONS
This insurance does not apply to:
Bodily injury to any employee of the insured arising out of and in the course of his or her employment by the insured.

Id.

¶ 36. The issue on appeal concerned who "the insured" was. We observed that if the insured meant Larson, the tortfeasor co-employee, the exclusion would not apply (and thus there would be coverage) because Larson did not employ Wittliff. Id. at 642. The exclusion would apply (thereby denying coverage), however, if the insured referred to the employer, PBC. Id.

¶ 37. The case did not involve a separation clause. Even in the absence of a separation clause, we still construed the insured to mean Larson, the tortfeasor co-employee. We stated:

It is settled law in this state that when an employee seeks to recover for damages sustained as the result of a co-employee's negligence, and the co-employee is an insured under the employer's policy, the word "insured" in the exclusions at issue here refers to the co-employee tortfeasor, and not to the employer.

Id. at 642 (emphasis in original; citations omitted). Accordingly, the exclusion did not apply because Larson did not employ Wittliff.

¶ 38. USF&G stands for the proposition that an additional insured may receive greater coverage under a policy than the named insured. If Wittliff sued PBC, his employer and the named insured, for the accident, the exclusion clearly would have barred coverage. However, Wittliff sued USF&G for Larson's negligence. We nevertheless construed the "the insured" language in the exclusion to mean Larson, the co-employee and additional insured, and not PBC, the employer and named insured. The effect of this construction was to grant greater coverage to an additional insured than would have been afforded to the named insured. In view of USF&G, construing the separation provision in the case at hand in a manner that allows an additional insured to receive greater coverage than the named insured does not produce an absurd result.

IV Conclusion

¶ 39. State Farm is entitled to summary judgment. The non-owned vehicle exclusion does not violate the omnibus statute, and because the underlying automobile insurance does not apply, the umbrella policy similarly does not afford coverage. With regard to St. Paul, the trial court's order granting declaratory judgment to St. Paul is based' on an error of law. The separation provision treats Klister individually, as if he was the only named insured; therefore, none of the exclusions bars coverage. The declaratory judgment is consequently reversed.

By the Court. — Judgments affirmed in part; reversed in part and cause remanded. No costs on appeal.

       All references to the Wisconsin Statutes are to the 2001-02 version unless otherwise noted.

       Worker's compensation is generally an injured employee's exclusive remedy against the employer, any other employee of the same employer, and the worker's compensation insurance carrier. Wis. Stat. § 102.03(2). However, § 102.03(2) states the exclusive remedy provision "does not limit the right of an employee to bring action against... a coemployee for negligent operation of a motor vehicle not owned or leased by the employer."

       Wisconsin Stat. § 632.32(6)(b)2.a states: "(b) No policy may exclude from the coverage afforded or benefits provided: ... 2.a. Any person who is a named insured or passenger in or on the insured vehicle, with respect to bodily injury, sickness or disease, including death resulting therefrom, to that person."

       Wisconsin Stat. § 632.32(5)(e) reads: "A policy may provide for exclusions not prohibited by sub. (6) or other applicable law. Such exclusions are effective even if incidentally to their main purpose they exclude persons, uses or coverages that could not be directly excluded under sub. (6)(b)."

       Gulmire has not offered any reasons why State Farm would enjoy a windfall should the exclusion apply to this case. Given the inadequate development of this argument, we decline to address it further. See State v. Flynn, 190 Wis. 2d 31, 58, 527 N.W.2d 343 (Ct. App. 1994).

       The parties treat Sheriff, Fox Valley Auto Auction and Fox Valley Wholesale as three separate insureds and therefore we will do the same for our analysis.

       While we need not look any further than the plain language of the policy, we note that our interpretation of the separation clause finds support in Atchison, Topeka & Santa Fe Railway Co. v. St. Paul Surplus Lines Insurance Co., 767 N.E.2d 827, 830-31 (Ill. App.3d 2002). There, the Illinois Appellate-Court held that the exact same severability clause at issue in this case severed the insurance policy to create separate and distinct policies for each protected person. In that case, Santa Fe contracted with ITS, an independent contractor, for various work responsibilities on Santa Fe's terminal yards. Id. at 828. The underlying claims relevant to this discussion involved two ITS employees that were injured when their truck was pushed into one of Santa Fe's trains. Id. at 829. They sued Santa Fe.
      St. Paul Surplus Lines Insurance Company, Santa Fe's insurer, moved for a declaratory judgment that the insurance policy did not afford coverage due to an employer's liability exclusion. The exclusion stated, "[w]e won't cover bodily injury to an employee arising out of and in the course of his or her employment by a protected person." Id. at 828. Because ITS was "a protected person," St. Paul claimed the exclusion barred coverage for Santa Fe. Id. at 830-31.
      Santa Fe countered that the separation clause provided each protected person with a separate insurance policy. Id. at 830. Santa Fe, then, became the only protected person in its policy. As a result, "a protected person" in the employer's liability exclusion referred only to Santa Fe, and could not include ITS. Because Santa Fe did not employ the plaintiff-employees, the exclusion did not bar coverage. Id. The court agreed.

        The court held "that the separation clause contained in the St. Paul policy provides separate coverage for Santa Fe and for ITS as if each was separately insured with a distinct policy." Id. at 831. Accordingly, there were two insurance policies providing separate coverage for separate insureds, one for Santa Fe and another for ITS. See id. With this being the case, the court rejected St. Paul's argument that the exclusion applied because "a protected person," namely ITS, was the employer of the injured employees. Because Santa Fe had its own distinct policy, it was the only insured, thus the only "protected person," for purposes of that policy. See id. Therefore, the employer exclusion did not apply because Santa Fe, again, the only insured in its policy, did not employ the injured employees. Id.

       Had the "by you" language been omitted, our focus would have been limited to (1) whether Gulmire and Klister had a common employer (which they did) and, (2) whether Gulmire's injuries arose out of and occurred in the course of her employment (which they had). Under such circumstances, the exclusion would have barred coverage regardless of the separation clause.
      These two steps are generally all that is required by a fellow employee exclusion. See, e.g., Maas v. Ziegler, 172 Wis. 2d 70, 77, 492 N.W.2d 621 (1992); Dahm v. Employers Mut. Liab. Ins. Co., 74 Wis. 2d 123, 126, 246 N.W.2d 131 (1976); Holmgren v. Strebig, 54 Wis. 2d 590, 595, 196 N.W.2d 655 (1972); Baker v. DePew, 860 S.W.2d 318, 321 (Mo. 1993). The exclusion at hand, however, forces Gulmire, the injured fellow employee, to be employed by a certain person. In light of the separation provision, that person is Klister. Because he did not employ Gulmire, the exclusion does not bar coverage.

       Alternatively, we could arrive at the same result by a different analysis. We recognize that our construction of the separation provision has the effect of superseding the policy's definition of "you." We acknowledge that nothing in the policy expressly requires that the separation clause must be given effect at the expense of a policy's definition. One might just as easily conclude that an express definition supersedes the separation provision. Because of this apparent irreconcilable inconsistency, we could also conclude that the policy is ambiguous. See Folkman v. Quamme, 2003 WI 116, ¶ 29, 264 Wis. 2d 617, 665 N.W.2d 857. Because ambiguities are construed against the insurer in favor of coverage, Brunson v. Ward, 2001 WI 89, ¶ 12, 245 Wis. 2d 163, 629 N.W.2d 140, our result would be the same under this analysis.


source: Caselaw Access Project

author: FINE, J.

license: Public Domain

text:
    F.M. Management Company Limited Partnership and F.M. Real Estate Company, LLC, Petitioners-Appellants, v. Wisconsin Department of Revenue, Respondent-Respondent.
    Court of Appeals

      No. 03-1536.

      Submitted on briefs November 26, 2003.

      Decided December 23, 2003.

    2004 WI App 19
    (Also reported in 674 N.W.2d 922.)

      On behalf of the petitioners-appellants, the cause was submitted on the briefs of Lawrence A. Trebon of Trebon & Mayhew, Milwaukee.
    On behalf of the respondent-respondent, the cause was submitted on the brief of Peggy A. Lautenschlager, attorney general, and F. Thomas Creeron III, assistant attorney general.
    Before Fine, Schudson and Curley, JJ.

       Petition to review denied 3-23-04.

   FINE, J.

¶ 1. F.M. Management Company Limited Partnership and F.M. Real Estate Company, LLC, appeal a circuit-court order affirming a decision by the Wisconsin Tax Appeals Commission. Wisconsin Stat. § 77.22(1) imposes "a real estate transfer fee ... on every conveyance not exempted or excluded under" Wis. Stat. §§ 77.21-77.30. The Commission upheld the Wisconsin Department of Revenue's assessment of a transfer fee and penalties in connection with two transfers of real estate between F.M. Management and F.M. Real Estate. The companies contend that: (1) the transactions were exempt from the transfer fee pursuant to Wis. Stat. § 77.25(15s); (2) one of the transfers was not a "conveyance" subject to the fee; and (3) the Commission erred in upholding the Department's imposition of penalties. We affirm.

I.

¶ 2. The facts in this case are neither complicated nor disputed. F.M. Management is a Wisconsin limited partnership. See Wis. Stat. §§ 178.12(2), 178.40-178.44. F.M. Real Estate is a Wisconsin limited liability company. See Wis. Stat. ch. 183. F.M. Management is F.M. Real Estate's only member. See Wis. Stat. §§ 183.0102(15), 183.0201, 183.0801.

¶ 3. In April of 1998, EM. Management deeded to F.M. Real Estate approximately sixty-seven acres in Oak Creek, Wisconsin. The consideration for this transfer was F.M. Management becoming the only member of F.M. Real Estate in return for approximately twenty-five acres of the property that remained after F.M. Real Estate immediately deeded back to F.M. Management forty-two acres. The two transfers were made by warranty deeds, each dated April 9,1998. No money passed between F.M. Management and F.M. Real Estate in connection with either transfer.

II.

¶ 4. In assessing the companies' appeal, we review the decision of the Tax Appeals Commission, and not that of the circuit court. Schwartz v. Wisconsin Dep't of Revenue, 2002 WI App 255, ¶ 14, 258 Wis. 2d 112, 122, 653 N.W.2d 150, 155. The Commission has the "final administrative authority" over the matters that are the subject of this appeal, and, accordingly, we generally give "great weight" deference to its decisions. William Wrigley, Jr., Co. v. Wisconsin Dep't of Revenue, 176 Wis. 2d 795, 801, 500 N.W.2d 667, 670 (1993); Wolter v. Wisconsin Dep't of Revenue, 231 Wis. 2d 651, 657-659, 605 N.W.2d 283, 287-288 (Ct. App. 1999).

Great weight deference is appropriate when: (1) an agency is charged with administration of the particular statute at issue; (2) its interpretation is one of long standing; (3) it employed its expertise or specialized knowledge in arriving at its interpretation; and (4) its interpretation will provide uniformity and consistency in the application of the statute. In other words, when a legal question calls for value and policy judgments that require the expertise and experience of an agency, the agency's decision, although not controlling, is given great weight deference.

Brown v. Labor and Indus. Review Comm'n, 2003 WI 142, ¶ 16, 267 Wis. 2d 31, 43-44, 671 N.W.2d 279, 284-285 (footnotes omitted). "Great weight" deference means that an agency's legal conclusions will be upheld if they are "reasonable." Id., 2003 WI 142, ¶ 19, 267 Wis. 2d at 46-47, 671 N.W.2d at 286.

An agency's conclusion of law is unreasonable and may be reversed by a reviewing court if it directly contravenes the words of the statute or the federal or state constitution, if it is clearly contrary to the legislative intent, history, or purpose of the statute, or if it is without rational basis.

Ibid.'

¶ 5. Although the Tax Appeals Commission has never before determined the applicability of Wis. Stat. § 77.25(15s) in a case like this, the " 'correct test'" of whether we give great-weight deference to an agency's legal conclusions is whether the agency "has experience in interpreting a particular statutory scheme, not whether it has ruled on precise, or even substantially similar, facts before." Honthaners Rests., Inc. v. Labor and Indus. Review Comm'n, 2000 WI App 273, ¶ 12, 240 Wis. 2d 234, 243, 621 N.W.2d 660, 664 (quoted source omitted). The Commission has extensive experience in interpreting and applying other exemption provisions in § 77.25, Wolter, 231 Wis. 2d at 657-659, 605 N.W.2d at 287-288, and, perforce, analyzed the issues here based on that experience. Although the "uniformity" aspect of the four-part test recognized by Brown is not implicated here, the companies have not presented anything that leads us to conclude that the general rule of giving great deference to decisions of the Tax Appeals Commission does not apply.

¶ 6. In deciding whether the Commission's decision was reasonable, we must determine what the applicable statutes reveal about the legislature's intent in connection with the Wis. Stat. § 77.25(15s) exemption. See Columbus Park Hous. Corp. v. City of Kenosha, 2003 WI 143, ¶ 10, 267 Wis. 2d 59, 67-68, 671 N.W.2d 633, 637 ("In construing a statute, our primary purpose is to give effect to the legislative intent embodied in the language of the statute.").

If the language of a statute is clear on its face, we need not look any further than the statutory text to determine the statute's meaning. When a statute unambiguously expresses the intent of the legislature, we apply that meaning without resorting to extrinsic sources of legislative intent. Statutory language is given its common, ordinary and accepted meaning.

State v. Peters, 2003 WI 88, ¶ 14, 263 Wis. 2d 475, 481-482, 665 N.W.2d 171, 174 (quoted source and internal citations omitted). As we will see, the words in § 77.25(15s) are not ambiguous. See Bruno v. Milwaukee County, 2003 WI 28, ¶ 19, 260 Wis. 2d 633, 644, 660 N.W.2d 656, 661 ("A statute or portion thereof is ambiguous when it is capable of being understood by reasonably well-informed persons in either of two or more senses.") (quoted source omitted). Further, as we discuss below, the Commission's application of those words to this case was reasonable. We address the companies' contentions in their logical order.

A. Conveyance.

¶ 7. As we have seen, Wis. Stat. § 77.22(1) imposes "a real estate transfer fee ... on every conveyance not exempted or excluded under" Wis. Stat. §§ 77.21-77.30. Thus, before we get to whether the real-estate transfers were exempt, we must first address the companies' argument that the second transfer — of the forty-two acres — was not a "conveyance."

¶ 8. A " '[conveyance' includes deeds and other instruments for the passage of ownership interests in real estate, including contracts and assignments of a vendee's interest therein." Wis. Stat. § 77.21(1). This is a "very broad" definition. Wolter, 231 Wis. 2d at 662, 605 N.W.2d at 290. Nevertheless, the companies argue, as phrased by their brief-in-chief on this appeal, that "there must be both a conveyance and consideration with value for the conveyance" before a transfer is subject to the transfer fee. They contend that F.M. Management paid for its membership in F.M. Real Estate with the twenty-five acres that F.M. Real Estate owned following F.M. Real Estate's return of the forty-two acres to F.M. Management. The companies assert that the two-step deal was designed to, as they put it in their brief-in-chief, "avoid the necessity of going through a formal land division process" in Oak Creek and did not in fact reflect two separate transfers. Thus, they claim that there was no consideration for the forty-two-acre transfer.

¶ 9. The argument that "there must be both a conveyance and consideration with value for the conveyance" for the transfer to be subject to the transfer fee ignores Wis. Stat. § 77.21(3), which recognizes that conveyances subject to the transfer fee include not only those conveyances for "actual consideration," in which case the "actual consideration paid" is the "value" of the conveyance for the purpose of determining the amount of the transfer fee under Wis. Stat. § 77.22(1) ("There is imposed on the grantor of real estate a real estate transfer fee at the rate of 30 cents for each $100 of value."), § 77.21(3)(a), but also includes those conveyances that constitute "a gift, or any deed of nominal consideration or any exchange of properties," § 77.21 (3) (b). Each transfer here was accomplished by a separate deed', and whatever the motive for the two-step structure, each deed represented a "conveyance" as that term is defined by § 77.21(1) and was part of the process by which F.M. Management became a member in F.M. Real Estate. This is true irrespective of whether there was separate consideration for the forty-two-acre transfer, which is a matter that we do not analyze. See Gross v. Hoffman, 227 Wis. 296, 300, 277 N.W 663, 665 (1938) (only dispositive issue need be addressed). Accordingly, the Tax Appeals Commission reasonably determined that the transfers, accomplished by the two deeds, were "conveyances."

B. Claimed Exemption.

¶ 10. As noted, F.M. Management partnership and F.M. Real Estate company contend that the initial transfer of the approximately sixty-seven acres and the second-step transfer of the approximately forty-two acres were entitled to transfer-fee exemptions under Wis. Stat. § 77.25(15s). As material here, § 77.25 provides:

The fees imposed by [Wis. Stat. §§ 77.21-77.30] do not apply to a conveyance:
(15s) Between a limited liability company and one or more of its members if all of the members are related to each other as spouses, as linear ascendants, lineal descendants or siblings, whether by blood or by adoption, or as spouses of siblings and if the transfer is for no consideration other than the assumption of debt or an interest in the limited liability company.

There are thus three requirements that must be met before the exemption kicks in. First, the conveyance must be between "a limited liability company and one or more of its members." Second, all the members must be "related to each other" in one of the specified ways. Third, the transfer must be "for no consideration other than the assumption of debt or an interest in the limited liability company." Here, the transfers satisfied the first and third prerequisites: the conveyances were between F.M. Real Estate, the limited liability company, and its member, EM. Management partnership; and we will assume that there was no other consideration for the transfers other than F.M. Management becoming a member in F.M. Real Estate. The Commission upheld the Department's view that the exemption applied only if the member of the limited liability company is a human. This was a reasonable conclusion.

¶ 11. As we have seen, Wis. Stat. § 77.25(15s) provides that a transfer-fee exemption under that subsection only applies if "all of the members" of the limited liability company "are related to each other as spouses, as linear ascendants, lineal descendants or siblings, whether by blood or by adoption, or as spouses of siblings." The companies argue that where there is only one member, that member need not be human because neither humans nor entities may be "related" to themselves.

¶ 12. In enacting Wis. Stat. § 77.25(15s), the legislature was presumptively aware of the noscitur a sociis concept of statutory construction where, "ordinarily the coupling of words denotes an intention that they be understood in the same general sense." Citizens' Util. Bd. v. Public Serv. Comm'n of Wis., 2003 WI App 206, ¶ 8, 267 Wis. 2d 414, 421, 671 N.W.2d 11, 15. "It is presumed that the legislature is cognizant of what language to include or omit when it enacts laws." Town of Sheboygan v. City of Sheboygan, 2001 WI App 279, ¶ 9, 248 Wis. 2d 904, 910, 637 N.W.2d 770, 774. Thus, the legislature's use in § 77.25(15s) of words and concepts that can only be applied to humans is strong evidence that it did not intend that subsection to also apply to non-human entities. Indeed, the companies offer no evidence of a contrary intent. If the legislature had intended the § 77.25(15s) exemption to apply to non-humans when, as here, that non-human entity was the only member of the limited liability company involved in the real estate transfer, the legislature could have easily so provided. Significantly, § 77.25 is replete with examples where the legislature has, in haec verba, granted transfer-fee exemptions to entities. Thus, under § 77.25, transfer fees "do not apply to a conveyance:"

• "Pursuant to mergers of corporations," § 77.25(6);
• "Pursuant to partnerships registering as limited liability partnerships under s. 178.40," § 77.25(6d);
• "Pursuant to the conversion of a business entity to another form of business entity" provided some conditions not material here are met, § 77.25(6m); and
• "By a subsidiary corporation to its parent for no consideration, nominal consideration or in sole consideration of cancellation, surrender or transfer of capital stock between parent and subsidiary corporation," § 77.25(7).

Simply put, had the legislature intended to grant the exemption the companies seek, it could have done so easily — without relying on alchemic, albeit ingenious, statutory deconstruction. The conclusion of the Tax Appeals Commission that F.M. Management partnership and F.M. Real Estate company were not entitled to exemptions under § 77.25(15s) for the two April 9, 1998, real-estate transfers is more than reasonable, and, as did the circuit court, we uphold that conclusion.

C. Penalties.

¶ 13. Wisconsin Stat. § 77.26(8) provides, as material here: "If the department of revenue determines .. . that an exemption was improperly claimed under s. 77.25, the department shall assess and collect a penalty of $25 or 25% of the additional fee due, whichever is greater." The companies argue that the penalty exaction against them was unfair because the Department had previously permitted an exemption under Wis. Stat. § 77.25(15s) where the real-estate transfer was between a limited liability company and a human who was the company's only member, and who thus could not be "related" to any other member, as the section requires. The companies assert in their appellate brief-in-chief that by claiming the exemption, they thus made a "reasonable interpretation" of § 77.25(15s), and "should not be penalized for their inability to anticipate the distinction between different kinds of sole members which was made by the Department after they had claimed the exemption."

¶ 14. First, we doubt that the Department has any discretion under Wis. Stat. § 77.26(8) whether to apply the penalty if there is an improper claim for an exemption. The statute uses the word "shall," and, generally, "shall" creates a mandatory duty. Hubbard v. Messer, 2003 WI 145, ¶ 18, No. 02-1701; State v. Sprosty, 227 Wis. 2d 316, 324, 595 N.W.2d 692, 696 (1999). Further, the statute also requires that the penalty shall be the "greater" of "$25 or 25% of the additional fee due." The companies have not pointed us to anything that even hints that the Department has discretion whether to impose the penalty mandated by § 77.26(8) or as to how much that penalty should be.

¶ 15. Second, the Department's grant of a Wis. Stat. § 77.25(15s) exemption where the limited liability company had only one member was where that member was human, not a non-human entity. Whether that application of § 77.25(15s) was correct, which we do not have to decide here, it was consistent with the Department's application of the statute here — limiting the subsection to situations where the member of the limited liability company is a human. In our view, it did not take a refined augury to foresee that the exemptions claimed here would be denied. The Tax Appeals Commission acted reasonably in upholding the assessed penalties.

By the Court. — Order affirmed.

       We see no meaningful distinction between an interpretation that would be "contrary to the legislative intent" and one that would be "contrary to the ... purpose of the statute."

       Although the companies note that under Wis. Stat. § 183.0102(15) a "person" can be a member of a limited liability company and that the word "person" can, under Wis. Stat. §§ 183.0102(18) and 990.01(26), include limited liability companies and partnerships, we are unaware of anything in either law or human experience that equates "spouses," "linear ascendants," "lineal descendants," or "siblings," with non-human entities or that declares that non-human entities can be related to one another by either "blood" or "adoption."


text:
    In the Matter of Disciplinary Proceedings Against Kevin M. Kelsay, Attorney at Law: Office of Lawyer Regulation, f/k/a Board of Attorneys Professional Responsibility, Complainant, v. Kevin M. Kelsay, Respondent.
    Supreme Court

      No. 88-2087-D.

      Decided March 16, 2004.

    2004 WI 22
    (Also reported in 676 N.W.2d 153.)
   The Court entered the following order on this date:

Attorney Kevin M. Kelsay was admitted to practice law in Wisconsin in 1984. On June 4, 1990, his license to practice law in Wisconsin was suspended for three years for professional misconduct. Disciplinary Proceedings Against Kelsay, 155 Wis. 2d 480, 455 N.W.2d 871 (1990). On June 3, 2002, Attorney Kelsay filed a petition for reinstatement. However, on August 23, 2002, while the reinstatement proceeding was pending, the Office of Lawyer Regulation (OLR) filed a new complaint against Attorney Kelsay, alleging he had engaged in the practice of law while his license was under suspension in violation of SCR 20:5.5(a) and SCR 22.26(2). The petition for reinstatement was stayed pending resolution of this complaint.

On November 12, 2003, this court suspended Attorney Kelsay's license for an additional period of six months, in connection with findings he had engaged in the unauthorized practice of law. Disciplinary Proceedings Against Kelsay, 2003 WI 141.

On December 22, 2003, the referee issued the report and recommendation on the reinstatement petition. The referee recommended the petition be denied. Neither Attorney Kelsay nor the OLR appealed this recommendation on the merits, however Attorney Kelsay has filed a letter objecting to the OLR's statement of costs associated with the reinstatement proceeding, which total $20,317.81.

We adopt the referee's report and recommendation and agree that Attorney Kelsay's petition for reinstatement should be denied. He has failed to establish the requirements for reinstatement set forth in SCR 22.29. As the referee cogently stated:

. . . Mr. Kelsay's continuing pattern of conduct in the matters discussed above, which span the entire time since he was eligible for reinstatement demonstrate that Mr. Kelsay's petition for reinstatement should be denied. Mr. Kelsay has not been entirely honest in his dealings with others, he has demonstrated a willingness to file frivolous claims on several occasions, he has engaged in the practice of law on at least two occasions, and has generally acted in a manner that is not befitting a member of the Wisconsin Bar. For these reasons, I recommend that Mr. Kelsay's petition for reinstatement be denied.

Report and recommendation at 20-21.

Attorney Kelsay objects to the assessment of costs against him on the grounds that he lacks the financial resources to pay the costs. He has also questioned the OLR's authority to impose costs in this proceeding. This court may assess costs in reinstatement proceedings where the respondent has been denied reinstatement. See SCR 22.24; In re Disciplinary Proceedings Against Eisenberg, 122 Wis.2d 627, 632, 363 N.W.2d 430 (1985). Attorney Kelsay has not made specific objections regarding the costs assessed in this proceeding. Therefore, OLR's request for costs in the amount of $20,317.81 incurred in this reinstatement proceeding is granted. To the extent that Attorney Kelsay demonstrates that he is unable to pay the costs imposed upon him, that will be considered in future reinstatement proceedings. See, e.g., In re Disciplinary Proceedings Against Harman, 2003 WI 45, 261 Wis. 2d 322, 661 N.W.2d 403.

IT IS ORDERED that Attorney Kelsay's petition for reinstatement is denied;

IT IS FURTHER ORDERED that Attorney Kelsay's objection to the OLR's statement of costs is denied;

IT IS FURTHER ORDERED that within 60 days of the date of this order, Attorney Kevin Kelsay shall pay to the Office of Lawyer Regulation the costs of this reinstatement proceeding. If the costs are not paid within the time specified, and absent a showing to this court of his inability to pay the costs within that time, the license of Kevin Kelsay to practice law in Wisconsin shall remain suspended until further order of the court.

Roggensack, J., dissenting as to the imposition of costs.

Cornelia G. Clark

Clerk of Supreme Court


author: DIANE S. SYKES, J.

text:
    State of Wisconsin ex rel. Richard W. Ziervogel and Maureen A. McGinnity, Plaintiffs-Appellants-Petitioners, v. Washington County Board of Adjustment, Defendant-Respondent, State of Wisconsin, Intervenor-Respondent.
    Supreme Court

      No. 02-1618.

      Oral argument December 4, 2003.

      Decided March 19, 2004.

    2004 WI 23
    (Also reported in 676 N.W.2d 401.)

      For the plaintiffs-appellants-petitioners there were briefs by Maureen A. McGinnity and Foley & Lardner, Milwaukee, and oral argument by Maureen A. McGin-nity.

    For the defendant-respondent there was a brief by Kimberly A. Nass, corporation counsel, Christine E. Ohlis, assistant corporation counsel, and oral argument by Christine E. Ohlis.

    For the intervenor-respondent the cause was argued by P. Philip Peterson, assistant attorney general, with whom on the brief was Peggy A. Lautenschlager, attorney general.
    An amicus curiae brief was filed by John A. Kassner send Murphy Desmond, S.C., Madison, on behalf of the Wisconsin Builders Association, and oral argument by John A. Kassner.

    An amicus curiae brief was filed by Daniel M. Olson, Madison, on behalf of the League of Wisconsin Municipalities.
    An amicus curiae brief was filed by Thomas D. Larson and Debra P. Conrad, Madison, on behalf of the Wisconsin Realtors Association, and oral argument by John A. Kassner.

    An amicus curiae brief was filed by William P. O'Connor, Tracy K. Kuczenski, Mary Beth Peranteau and Wheeler, VanSickle & Anderson, S.C., Madison, on behalf of Wisconsin Association of Lakes, and oral argument by William P. O'Connor.

   DIANE S. SYKES, J.

¶ 1. We are called upon in this case to reconsider the legal standard by which zoning boards of adjustment measure "unnecessary hardship" when determining whether to grant area zoning variances.

¶ 2. The legislature has by statute vested local boards of adjustment with broad discretionary power to authorize variances where the strict enforcement of zoning regulations results in unnecessary hardship to individual property owners. "Unnecessary hardship," however, is not defined in the statute. It has fallen to courts to give meaning to the term.

¶ 3. The present, need to revisit the meaning of "unnecessary hardship" is precipitated by our decisions in State v. Kenosha County Bd. of Adjustment, 218 Wis. 2d 396, 577 N.W.2d 813 (1998), and State v. Outagamie County Bd. of Adjustment, 2001 WI 78, 244 Wis. 2d 613, 628 N.W.2d 376. Kenosha County merged the previously distinct legal standards for unnecessary hardship in use and area variance cases that had existed since Snyder v. Waukesha County Zoning Bd. of Adjustment, 74 Wis. 2d 468, 247 N.W.2d 98 (1976), establishing a single, "no reasonable use of the property" standard for unnecessary hardship in all variance applications. We reconsidered Kenosha County's unitary "no reasonable use" standard in Outagamie County, but split on whether it should be overruled (three justices), maintained but not applied to defeat the area variance in the case (two justices in concurrence), or maintained and applied to defeat the variance (two justices in dissent). Outagamie County, 244 Wis. 2d 613, ¶ 5.

¶ 4. We now conclude that the distinctions in purpose and effect of use and area zoning make the perpetuation of a single, highly-restrictive "no reasonable use of the property" standard for all variances unworkable and unfair. Use zoning regulates fundamentally how property may be used, in order to promote uniformity of land use within neighborhoods or regions. Area zoning regulates lot area, density, height, frontage, setbacks, and so forth, in order to promote uniformity of development, lot, and building size.

¶ 5. Restricting the availability of variances to those property owners who would have "no reasonable use" of their property without a variance may be justifiable in use variance cases, given the purpose of use zoning and the substantial effect of use variances on neighborhood character. But applying the same strict "no reasonable use" standard to area variance applications is unjustifiable. The "no reasonable use" standard is largely disconnected from the purpose of area zoning, fails to consider the lesser effect of area variances on neighborhood character, and operates to virtually eliminate the statutory discretion of local boards of adjustment to do justice in individual cases.

¶ 6. A forthright recognition of these differences in purpose and effect of use and area zoning and variances requires perceptibly different standards for the evaluation of use and area variance applications. Henceforward, area variance applicants need not meet the "no reasonable use of the property" standard that is applicable to use variance applications.

¶ 7. We now reaffirm the Snyder standard for unnecessary hardship in area variance cases: "[w]hen considering an area variance, the question of whether unnecessary hardship . . . exists is best explained as '[wjhether compliance with the strict letter of the restrictions governing area, set backs, frontage, height, bulk or density would unreasonably prevent the owner from using the property for a permitted purpose or would render conformity with such restrictions unnecessarily burdensome.'" Snyder, 74 Wis. 2d at 475 (quoting 2 Rathkopf, The Law of Zoning & Planning § 45-28 (3d ed. 1972)). Whether this standard is met in individual cases depends upon a consideration of the purpose of the zoning restriction in question, its effect on the property, and the effect of a variance on the neighborhood and the larger public interest. The longstanding requirements that the hardship be unique to the property and not self-created are maintained. Snyder, 74 Wis. 2d at 476, 479. The burden of proving unnecessary hardship remains on the property owner.

¶ 8. The variance applicants in this case were denied an area variance from a shoreland zoning setback restriction because they failed to meet Kenosha County's restrictive "no reasonable use of the property" test. The denial was upheld on certiorari review and appeal. Because we now hold that Kenosha County's "no reasonable use" standard does not govern area variance applications, we reverse.

I. FACTS AND PROCEDURAL HISTORY

¶ 9. Richard Ziervogel and Maureen McGinnity ("petitioners") own a 1.4 acre parcel of property on Big Cedar Lake in the Town of West Bend in Washington County. The property has 200 feet of lake frontage and a 1600-square-foot house with a legal nonconforming setback of 26 feet from the ordinary high water mark of the lake. A public roadway bisects the lot along the side of the house opposite the lake, and the remainder of the lot on the other side of roadway is in a floodplain.

¶ 10. The petitioners purchased the property in 1996 and have used it as a summer home. They now wish to live in the house year-round, and would like to construct a ten-foot vertical addition to the structure consisting of two bedroom-bathroom suites and an office. In 1996, such an addition would have been permissible under the applicable shoreland zoning ordinance. However, in 2001 Washington County amended its ordinance to prohibit any expansion of any portion of an existing structure within 50 feet of the ordinary high-water mark of the lake. Washington Cty., Wis., Code § 23.13(3)(d). Accordingly, the petitioners need a variance to go ahead with their plans.

¶ 11. The Washington County Board of Adjustment considered the petitioners' variance application at a public hearing on October 22, 2001. The petitioners appeared and described their project in detail. A letter from the Wisconsin Department of Natural Resources (DNR) objecting to the variance was read into the record. A representative of the Washington County Department of Planning and Parks was also heard; he, too, opposed the variance. At the conclusion of the hearing, the Board denied the variance because the petitioners failed to show that they would have no reasonable use of their property without the variance.

¶ 12. The petitioners sought review via certiorari in Washington County Circuit Court. The Honorable David C. Resheske affirmed, concluding that under the "no reasonable use" standard of Kenosha County, the Board's denial of the variance must be upheld. The court of appeals affirmed on the same ground. State ex rel. Ziervogel v. Washington County Bd. of Adjustment, 2003 WI App 82, 263 Wis. 2d 321, 661 N.W.2d 884. We reverse.

II. STANDARD OF REVIEW

¶ 13. A person aggrieved by the issuance or denial of a zoning variance may commence an action in circuit court seeking the remedy available by certiorari, as the petitioners did here. See Wis. Stat. § 59.694(10). A court on certiorari review must accord a presumption of correctness and validity to a board of adjustment's decision. Snyder, 74 Wis. 2d at 476. A reviewing court may not substitute its discretion for that of the board, the entity to which the legislature has committed these decisions. Id.

¶ 14. When no additional evidence is taken, statutory certiorari review is limited to: (1) whether the board kept within its jurisdiction; (2) whether it proceeded on a correct theory of law; (3) whether its action was arbitrary, oppressive, or unreasonable and represented its will and not its judgment; and (4) whether the board might reasonably make the order or determination in question based on the evidence. Arndorfer v. Sauk County Bd. of Adjustment, 162 Wis. 2d 246, 253, 469 N.W.2d 831 (1991). The second of these elements of certiorari review is implicated here: at issue is the appropriate legal standard for the determination of statutory "unnecessary hardship." This is a question of law that we review independently. Outagamie County, 244 Wis. 2d 613, ¶ 22.

III. ANALYSIS

¶ 15. Counties are statutorily required to zone their shorelands by ordinance. Wis. Stat. § 59.692(lm) (1999-2000). Washington County adopted a revised Shoreland/Wetland/Floodplain ordinance that became effective June 1, 2001. Washington Cty., Wis., Code ch. 23.

¶ 16. The zoning enabling statutes also empower county boards of adjustment to authorize variances from the terms of zoning ordinances in harmony with their general purpose and intent. Wis. Stat. § 59.694(1). Washington County has established a board of adjustment pursuant to the variance enabling statute. Washington County., Wis., Code § 23.15(e).

¶ 17. Variance procedure in zoning law serves several essential purposes: to prevent otherwise inflexible zoning codes from precipitating regulatory takings; to provide a procedure by which the public interest in zoning compliance can be balanced against the private interests of property owners in individual cases; and, most broadly, to allow a means of obtaining relief from the strict enforcement of zoning restrictions where individual injustices might occasionally occur. Outagamie County, 244 Wis. 2d 613, ¶¶ 44-47. Zoning variances "are designed to afford a protective device against individual hardships, to provide relief against unnecessary and unjust invasions of the right to private property, and to provide a flexibility of procedure necessary to the protection of constitutional rights." 8 Eugene McQuillin, Municipal Corporations § 25.160, at 590-91 (Rev. ed. 2000) (internal citations omitted). Thus,

[i]t has been said that to preserve the validity of the zoning ordinance in its application to the community in general, the variance provision of the enabling act functions as an "escape valve," so that when regulations that apply to all are unnecessarily burdensome to a few because of certain unique circumstances a means of relief from the mandates of the ordinance is provided.

3 E.C. Yokley, Zoning Law & Practice § 20-1 (2002 revision), at 20-2.

¶ 18. Consistent with these principles, Wis. Stat. § 59.694(7) vests county boards of adjustment with the following authority to grant zoning variances:

To authorize upon appeal in specific cases variances from the terms of the ordinance that will not be contrary to the public interest, where, owing to special conditions, a literal enforcement of the provisions of the ordinance will result in unnecessary hardship, and so that the spirit of the ordinance shall be observed and substantial justice done.

Wis. Stat. § 59.694(7)(c).

¶ 19. The legislature has by this enactment delegated to local boards of adjustment substantial discretion to grant variances where the literal application of zoning regulations would result in unnecessary hardship not justified by the underlying purposes of the ordinance in question. The statute, however, does not define "unnecessary hardship," which is a prerequisite to the issuance of a variance. It has been left to courts to give content to the term.

¶ 20. The following judicial rules of unnecessary hardship are well-established: The hardship must be based on conditions unique to the property rather than considerations personal to the property owner. Snyder, 74 Wis. 2d at 479; see also 3 Kenneth H. Young, Anderson's American Law of Zoning §§ 20.35-20.40 (4th ed. 1996); 3 Edward H. Ziegler, Jr., Rathkopfs Law of Zoning and Planning § 58:18 (2003). The hardship cannot be self-created. Snyder, 74 Wis. 2d at 476; see also Outagamie County, 244 Wis. 2d 613, ¶ 24; 3 Ziegler, supra § 58:21; 3 Young, supra § 20.44-47. The board of adjustment is to evaluate the hardship in light of the purpose of the zoning restriction at issue. Snyder, 74 Wis. 2d at 473; see also Outagamie County, 244 Wis. 2d 613, ¶ 24; Id., ¶ 74, (Crooks, J., concurring). A variance cannot be contrary to the public interest. Arndorfer, 162 Wis. 2d at 256; see also Outagamie County, 244 Wis. 2d 613, ¶ 24. The property owner bears the burden of proving unnecessary hardship. Arndorfer, 162 Wis. 2d at 253; see also Outagamie County, 244 Wis. 2d 613, ¶ 50. While these general principles help guide the board's discretion, they do not establish the meaning of the term "unnecessary hardship" or provide a legal standard for determining whether it has been proved.

¶ 21. By definition, all variances depart from the purpose of the zoning ordinance and implicate the public interest, because they permit something that is otherwise strictly prohibited. But they do so to varying degrees and levels of acceptability, depending on the type of variance requested and the nature of the zoning restriction in question. As such, courts have long recognized a distinction between use variances, which permit a landowner to put property to an otherwise prohibited use, and area variances, which provide exceptions from such physical requirements as setbacks, lot area, and height limits. Snyder, 74 Wis. 2d at 474-75; see also Outagamie County, 244 Wis. 2d 613, ¶¶ 34-36. The distinction has been described in this way:

A use variance is one that permits a use other than that prescribed by the zoning ordinance in a particular district. An area variance has no relationship to a change of use. It is primarily a grant to erect, alter, or use a structure for a permitted use in a manner other than that prescribed by the restrictions of a zoning ordinance.

3 Yokley, supra § 20-3, at 20-8-9; see also 3 Ziegler, supra, 58.4.

¶ 22. The law treats use and area variances differently because use and area zoning serve distinct purposes and affect property rights in distinct ways; also, use and area variances affect public and private interests differently. In the most general sense, the purpose of all zoning is to control land use and development in order to promote public health, safety, welfare, morals, and aesthetics. Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 394-95 (1926). Shoreland zoning, at issue here, carries the additional general purposes of protecting the public's interest in navigable waters, including promoting safe and healthful water conditions, controlling pollution, and protecting fish and aquatic life and natural beauty. Wis. Stat. § 281.31(1). Within these general purposes, use zoning regulates fundamentally how property may be used, in order to promote uniformity of use within neighborhoods and regions. Area zoning, on the other hand, regulates density, setbacks, frontage, height, and other dimensional attributes, in order to promote uniformity of development, lot size, and building configuration and size.

¶ 23. Use and area variances thus threaten the integrity of zoning ordinances in qualitatively different ways, and generally to a different extent. Use variances by their nature have the potential to bring about great changes in neighborhood character, but area variances usually do not have this effect. Synder, 74 Wis. 2d at 473; see also Outagamie County, 244 Wis. 2d 613, ¶¶ 36-38. While area variances provide an increment of relief (normally small) from a physical dimensional restriction such as building height, setback, and so forth, use variances permit wholesale deviation from the way in which land in the zone is used. Accordingly, the measure of unnecessary hardship for use and area variances is different; "in most states, the courts will approve an area variance upon a lesser showing by the applicant than is required to sustain a use variance." 3 Young, supra, § 20:48, at 580. Until Kenosha County, Wisconsin followed this general rule, pursuant to this court's decision in Snyder.

¶ 24. Snyder linked the definition of "unnecessary hardship" in use variance cases to the goal of preventing zoning from rendering property useless, holding that "unnecessary hardship" in use variance cases is established only when, in the absence of a variance, no reasonable or feasible use can be made of the property. Snyder, 74 Wis. 2d at 474. However, because of the difference in purpose and effect of area zoning and area variances, Snyder established a different definition of "unnecessary hardship" for area variance cases:

When considering an area variance, the question of whether unnecessary hardship or practical difficulty exists is best explained as "whether compliance with the strict letter of the restrictions governing area, set backs, frontage, height, bulk or density would unreasonably prevent the owner from using the property for a permitted purpose or would render conformity with such restrictions unnecessarily burdensome."

Id. at 474-75.

¶ 25. Snyder's less-stringent and more flexible definition of unnecessary hardship for area variances allows variance procedure to function as more than just a protection against unconstitutional takings of private property. It allows variance procedure to function as the regulatory "escape valve" it was meant to be: "The purpose of variances in the broadest sense is the rendering of justice in unique and individual cases of practical difficulties or unnecessary hardships arising from literal application of zoning ordinances." 8 Quillin, supra § 25.172, at 648.

¶ 26. Snyder's dual approach to use and area variances furthers the purpose of use and area zoning, allows for individualized balancing of public and private interests, and is consistent with the approach of most courts around the country:

The prime justification for requiring less of an applicant for an area variance than is required in the case of a use variance is that the former does not affect the use of the land. An area variance is thought not to threaten adjacent land with the establishment of an incompatible use, or to hazard the maintenance of a use which will change the essential character of a neighborhood. Such a variance has some capacity to impose an adverse effect on adjacent land, and standards must be imposed to insure the protection of neighboring property, but in the case of area variances, it is assumed by most courts that adequate protection of the neighborhood can be effected without the imposition of the stringent limitations which have been developed in the use variance cases.

3 Young, supra § 20.48, at 581 (internal citations omitted). Snyder remained in place for more than two decades, until Kenosha County was decided in 1998.

¶ 27. Kenosha County blurred the distinction between use and area variances, by adopting the "no reasonable use of the property" test from use variance analysis for area variance cases. Kenosha County, 218 Wis. 2d at 398, 413-14. This has had the effect of severely curtailing the discretion vested by the legislature in boards of adjustment. See Outagamie County, 244 Wis. 2d 613, ¶ 32; State ex rel. Spinner v. Kenosha County Bd. of Adjustment, 223 Wis. 2d 99, 110, 588 N.W.2d 662 (Ct. App. 1998)(Nettesheim, J., concurring). It also had the effect of displacing Snyder sub silentio. By operation of the now-uniform "no reasonable use" standard, local zoning boards cannot even begin to evaluate the individual circumstances of an area variance application when the property in question is capable of any reasonable use without the variance; a property owner with a "reasonable use" is disqualified from the start.

¶ 28. Application of the "no reasonable use" standard to area variances overwhelms all other considerations in the analysis, rendering irrelevant any inquiry into the uniqueness of the property, the purpose of the ordinance, and the effect of a variance on the public interest. As Justice Crooks has noted:

Consideration of a variance request as it relates to the purpose of the zoning ordinance, along with review of the specific restriction at issue, must necessarily take into account the differences resulting from the granting of an area or use variance. Indeed, "because area variances do not involve great changes in the character of neighborhoods as do use variances," the purpose of the zoning ordinance may not be so likely undermined by an area variance as it might be by a use variance.

Outagamie County, 244 Wis. 2d 613, ¶ 74 (Crooks, J., concurring) (quoting Snyder, 74 Wis. 2d at 473.)

¶ 29. For the statutory discretionary authority to be meaningful, boards of adjustment must have the opportunity to distinguish between hardships that are unnecessary in light of unique conditions of the property and the purpose of the ordinance, and hardships that do not warrant relief, either because they are inconsequential or not unique or because a variance would unduly undermine the purpose of the ordinance or the public interest. Boards of adjustment must "have some very real flexibility in granting variances." Id. (Crooks, J., concurring). Under the "no reasonable use" standard, however, boards of adjustment are effectively-prohibited from considering the graduated nature of intrusions upon the strict letter of area restrictions. The "no reasonable use" standard, therefore, leaves boards of adjustment with almost no flexibility and empties the concept of "discretion" of any real meaning.

¶ 30. Kenosha County's adoption of the "no reasonable use" standard for area variances generally precludes any property owner currently using his property from ever getting a variance, regardless of the merits of the application or the type, size, and nature of the variance requested. This "unreasonably prevent[s] private property owners from making even highly beneficial, completely legal improvements to their property," if doing so requires a variance to legalize even the slightest nonconformity. Id., ¶¶ 42, 47. Almost all variance applicants — certainly all applicants who are putting their property to some use at the time of application — will flunk the "no reasonable use" test, divesting the board of any real discretion. Universal application of the "no reasonable use" definition of unnecessary hardship to all variances has drained the variance statute of its meaning and effect.

¶ 31. In Outagamie County we reconsidered Kenosha County's adoption of the "no reasonable use" standard for measuring unnecessary hardship in area variance cases, but divided on whether it should be overruled (three justices), maintained but not applied to defeat the variance in the case (two justices in concurrence), or maintained and applied to defeat the variance (two justices in dissent). Id., ¶ 5. We now conclude that Kenosha County's "no reasonable use of the property" standard for unnecessary hardship no longer applies in area variance cases, and the Snyder definition of unnecessary hardship in area variance cases is reaffirmed.

¶ 32. Applying the "no reasonable use" standard to area variances is inconsistent with the purpose of area zoning, fails to recognize the lesser effect of area variances on the public interest, and very nearly extinguishes the statutory discretion of local boards of adjustment. Continuing to condition area variances upon a showing of "no reasonable use of the property" makes variance procedure unworkable and unfairly forecloses almost all property owners from the opportunity to demonstrate hardship.

¶ 33. We therefore reinstate Snyder's formulation of unnecessary hardship for area variance cases: " '[w]hether compliance with the strict letter of the restrictions governing area, set backs, frontage, height, bulk or density would unreasonably prevent the owner from using the property for a permitted purpose or would render conformity with such restrictions unnecessarily burdensome.'" Snyder, 74 Wis. 2d at 475 (quoting 2 Rathkopf, The Law of Zoning and Planning § 45-28 (3d ed. 1972)). Snyder also emphasized that variance requests are always evaluated in light of the purpose of the zoning ordinance and the public interests at stake. Id. at 473. Accordingly, whether the Snyder standard is met in individual cases depends upon a consideration of the purpose of the zoning restriction in question, its effect on the property, and the effect of a variance on the neighborhood and larger public interest. The established requirements that the hardship be unique to the property and not self-created are maintained, and the burden of proving unnecessary hardship remains on the property owner. Id. at 476-79; see also Outagamie County, 244 Wis. 2d 613, ¶¶ 24, 50.

¶ 34. It is axiomatic that all zoning restrictions impose some burdensome effect on property and all variances run contrary to the purpose of the ordinance to some degree. The inquiry should focus on how they do so, and to what extent, in light of the circumstances of each individual case. The board must determine whether a hardship unique to the property has been demonstrated and whether the relief requested is consistent with the public interest such that the variance should be granted, or whether a variance would subvert the purpose of the zoning restriction to such an extent that it must be denied.

¶ 35. We note in this case that the Washington County zoning ordinance incorporates Kenosha County's "no reasonable use of the property" definition of statutory unnecessary hardship, which we have now determined is no longer applicable. Washington Cty., Wis., Code § 23.18(78). A local ordinance defining "unnecessary hardship" as "no reasonable use" has the same effect as a judicial opinion adopting the same definition, that is, it virtually eliminates the statutory discretion of the board of adjustment.

¶ 36. The zoning enabling statute authorizes the availability of variances upon a showing of unnecessary hardship, and explicitly commits to boards of adjustment the discretion to make variance decisions. Wis. Stat. § 59.694(7)(c). The "no reasonable use" definition in the Washington County ordinance, to the extent it is applicable to area variance requests, conflicts with the statutory grant of authority and operates to eliminate what the statute allows.

¶ 37. Counties have statutory home rule authority pursuant to Wis. Stat. § 59.03, but may not exercise that authority in a way that conflicts with legislative enactments of statewide concern that uniformly affect all counties. Wis. Stat. § 59.03(1); Mommsen v. Schueller, 228 Wis. 2d 627, 635-36, 599 N.W.2d 21 (Ct. App. 1999). This is consistent with the general rule of limitation on the constitutionally-based home rule authority of other local units of government. See Wis. Const, art. XI, § 3(1); De Rosso Landfill Company, Inc. v. City of Oak Creek, 200 Wis. 2d 642, 657, 547 N.W.2d 770 (1996); Anchor Savings & Loan Association v. Madison Equal Opportunities Commission, 120 Wis. 2d 391, 395-97, 355 N.W.2d 234 (1984). While local units of government may adopt "ordinances which, while addressed to local issues, concomitantly regulate matters of statewide concern," this authority is limited to ordinances that complement rather than conflict with the state legislation. DeRosso, 200 Wis. 2d at 651-52.

¶ 38. Accordingly, local home rule regulations in areas where the legislature has adopted uniformly applicable statutes on matters of statewide concern are subjected to the following analysis for validity: 1) has the legislature withdrawn the power of municipalities to act; 2) does the local ordinance logically conflict with the state legislation; 3) does the ordinance defeat the purpose of the state legislation; or 4) does the ordinance go against the spirit of the state legislation? DeRosso, 200 Wis. 2d at 651-52 (citing Anchor, 120 Wis. 2d at 397); Mommsen, 228 Wis. 2d at 636-37. If "any one of these tests [is] met, the municipal ordinance is void." DeRosso, 200 Wis. 2d at 652.

¶ 39. For the reasons we have noted, the Washington County ordinance adopting the "no reasonable use of the property" definition for unnecessary hardship in area variance cases logically conflicts with the statutory grant of discretion to local boards of adjustment pursuant to Wis. Stat. § 59.694(7)(c). It also operates to defeat the purpose of the statute, for the reasons we have discussed, and contradicts the spirit of the statutory grant of discretion to local boards of adjustment.

¶ 40. In Outagamie County we invalidated a DNR rule that prohibited a certain type of variance because it conflicted with the statutory grant of authority to boards of adjustment. Outagamie County, 244 Wis. 2d 613, ¶¶ 59-60. We also concluded that two county ordinance provisions — one which purported to permit certain variances and another that appeared to prohibit them — were irreconcilable and therefore unenforceable. Id., ¶ 66. We reach a similar conclusion here. The ordinance's "no reasonable use" requirement for unnecessary hardship in area variance cases, which mirrors Kenosha County's "no reasonable use" standard for area variances, conflicts with the statute and is therefore unenforceable as applied to area variances.

¶ 41. The petitioners' variance application was denied, and the denial upheld on certiorari review and appeal, for the sole reason that Kenosha County's strict "no reasonable use of the property" standard for determining unnecessary hardship had not been met. We have now concluded that the "no reasonable use" standard is no longer applicable in area variance cases and reaffirmed the Snyder definition of unnecessary hardship for area variance cases: whether compliance with area zoning restrictions "would unreasonably prevent the owner from using the property for a permitted purpose or would render conformity with such restrictions unnecessarily burdensome." Snyder, 74 Wis. 2d at 475.

¶ 42. Whether this standard is met in this case will depend upon the board of adjustment's consideration of the purpose of the zoning restriction in question (including the important public purposes of shore-land zoning generally), the effect of the restriction on the property, and the effect of a variance on the neighborhood and the larger public interest. In addition, the petitioners must demonstrate that the hardship is based upon conditions unique to the property and is not self-created. Accordingly, we reverse and remand for proceedings consistent with this opinion.

By the Court. — The decision of the Court of Appeals is reversed and the cause remanded for further proceedings consistent with this opinion.

¶ 43. SHIRLEY S. ABRAHAMSON, C.J., and ANN WALSH BRADLEY, J., did not participate.

       All references to the Wisconsin Statutes are to the 1999-2000 version unless otherwise indicated.

       In some states, these differences are formalized in the variance statute itself. "[Sjtatutes governing use and area variances fall into three categories: (1) those which allow use and nonuse (area) variances and which allow nonuse (area) variances to be granted upon a showing of practical difficulty; (2) those which allow use and nonuse (area) variances and require a showing of unnecessary hardship for both; and (3) those which do not allow use variances and require unnecessary hardship for the granting of nonuse (area) variances. . .. [Wisconsin's] statute falls into the second category, allowing both use and area variances upon a showing of 'unnecessary hardship.'" State v. Outagamie County Bd. of Adjustment, 2001 WI 78, ¶ 35, 244 Wis. 2d 613, 635, 628 N.W.2d 376; see also 3 Edward H. Ziegler, Jr., Rathkopfs The Law of Zoning and Planning § 58.4 (2003).

       The term "practical difficulties" does not appear in our statute, which authorizes both use and area variances on a showing of "unnecessary hardship." Wis. Stat. § 59.694(7)(c). Snyder concluded that there was no real difference between the phrases "unnecessary hardship" and "practical difficulties" in the secondary authorities, but held that unnecessary hardship in use and area variance cases must be governed by distinct standards because use and area variances produce different effects. Snyder v. Waukesha County Zoning Bd. of Adjustment, 74 Wis. 2d 468, 474-75, 247 N.W.2d 98 (1976).

       The court of appeals identified some of these anomalies almost immediately after the decision in State v. Kenosha County Bd. of Adjustment, 218 Wis. 2d 396, 577 N.W.2d 813 (1998), see State ex rel. Spinner v. Kenosha County Bd. of Adjustment, 223 Wis. 2d 99, 110, 588 N.W.2d 662 (Ct. App. 1998)(Nettesheim, J., concurring)("[t]he real effect of the [.Kenosha County] decision is to significantly curtail a board of adjustment's discretion in such matters"), but has considered itself bound by the new "no reasonable use" standard for area variances. See, State ex rel. Ziervogel v. Washington County Bd. of Adjustment, 2003 WI App 82, ¶¶ 21-25, 263 Wis. 2d 321, 661 N.W.2d 884. See also, for illustrative purposes only, the following unpublished, nonprecedential opinions: State v. Waushara County Bd. of Adjustment, No. 02-2400, unpublished order (WI App May 7, 2003); Voss v. Waushara County Bd. of Adjustment, 2003 WI App 111, 264 Wis. 2d 893, 664 N.W.2d 126 (unpublished table decision); State v. Outagamie County Bd. of Adjustment, 222 Wis. 2d 220, 587 N.W.2d 215 (Ct. App. 1998) (unpublished table decision).

       "Unnecessary hardship" in zoning variance cases "is neither the same nor as demanding as a takings analysis." 3 E.C. Yokley, Zoning Law and Practice § 20-6, at 20-25 (2002 revision) (emphasis in original). The United States Supreme Court has held that a categorical regulatory taking occurs when a zoning regulation deprives property of all economically beneficial or productive use. Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992). The "no reasonable use" test arguably accomplishes the bare constitutional minimum of preventing regulatory takings. But requiring all variance applicants to show "no reasonable use" of the property without a variance frustrates rather than furthers the broader purposes of variance procedure.