author: NETTESHEIM, J.

text:
    Janet M. Klawitter, Plaintiff-Respondent, v. Elmer H. Klawitter, Defendant-Appellant.

    Court of Appeals

      No. 00-1464.

      Submitted on briefs October 13, 2000.

    Decided December 20, 2000.

    2001 WI App 16
    (Also reported in 623 N.W.2d 169.)

      On behalf of the defendant-appellant, the cause was submitted on the briefs oí David Goluba of Ripon.
    On behalf of the plaintiff-respondent, the cause was submitted on the brief oí James Grant of Waupun.
    Before Nettesheim, Anderson and Snyder, JJ.

      Petition to review denied.

   NETTESHEIM, J.

¶1. Elmer H. Klawitter appeals from the terms of a real estate partition judgment granted to Janet M. Klawitter, his former wife. Although not challenging the partition, Elmer complains that the trial court erred by rejecting his counterclaim seeking contribution from Janet for one-half of the land contract and other property-related payments he made after the parties terminated their postdivorce, nonmarital relationship and Janet left the property. The court ruled that Janet's equitable entitlement to an offset for Elmer's use and occupancy of the property barred Elmer's contribution claim.

¶ 2. We affirm the trial court's legal and equitable determinations that Elmer's contribution claim was subject to an offset for his use and occupancy of the property. However, we hold that the court erred in failing to make the necessary factual findings as to the reasonable value of Elmer's contributions vis-a-vis the reasonable value of his use and occupancy of the property. Once that determination is made, the trial court may then determine the amount of contribution, if any, to which Elmer is entitled. We remand for further proceedings on this latter question.

Facts

¶ 3. The historical facts in this case are not in dispute. Elmer and Janet were divorced in 1983, but thereafter resumed living together. In 1987, they purchased a five-acre "farmette" for $35,000 as joint tenants pursuant to a land contract. They lived on this property. They also leased additional property for farming purposes. The parties orally agreed to equally share the land contract payments and other expenses relating to the farmette. During this time, both parties were employed outside their home and both contributed some of their income to these obligations. The parties filed individual tax returns for these years. Since Elmer reported the farm operation on his returns, he was able to deduct the appropriate business expenses, take the appropriate depreciation on farm equipment, and credit any losses against his employment income.

¶ 4. Over time, the parties' relationship deteriorated and Janet left the residence in 1994. Thereafter, Elmer made all of the land contract, real estate tax, insurance and other maintenance payments relating to the property.

¶ 5. In October 1997, Janet commenced this partition action pursuant to WlS. STAT. § 842.02 (1997-98). Elmer responded with a counterclaim asking the trial court to quiet title in him under a declaratory judgment pursuant to WlS. STAT. § 841.01. Alternatively, Elmer asked for contribution from Janet for one-half of the land contract and related property payments he had made after Janet left the relationship. Following a bench trial, the trial court granted Janet's request for partition and ordered the property sold. The court also denied Elmer's request that Janet reimburse him for one-half of the property-related payments he had made after Janet's departure. The court reasoned that Elmer's right to a proportionate share of reimbursement was offset by Janet's equitable entitlement to a proportionate share of Elmer's use and occupancy of the property. Elmer appeals this portion of the judgment.

Discussion

¶ 6. As noted, Elmer does not appeal the trial court's grant of partition to Janet. Rather, he challenges the trial court's ruling that his contribution claim was subject to an offset for his use and occupancy of the property.

¶ 7. Although the trial court's grant of partition is not at issue, we begin with the law of partition because it bears upon the appellate issue. WISCONSIN Stat. § 842.02 authorizes a partition action. The statute represents a codification of the common law of partition. See Watts v. Watts, 137 Wis. 2d 506, 535, 405 N.W.2d 303 (1987). Thus, "partition is a remedy under both the statutes and common law." Id. Partition, although now codified in our statutes, is an equitable action. See Rubina v. Nichols, 241 Wis. 644, 648, 6 N.W.2d 657 (1942).

¶ 8. We apply the erroneous exercise of discretion standard in reviewing decisions in equity. See Wynhoff v. Vogt, 2000 WI App 57, ¶ 3, 233 Wis. 2d 673, 608 N.W.2d 400, review denied, 237 Wis. 2d 258, 618 N.W.2d 749 (Wis. July 27, 2000) (No. 99-0103). Such review is "highly deferential." Tralmer Sales & Serv., Inc. v. Erickson, 186 Wis. 2d 549, 572, 521 N.W.2d 182 (Ct. App. 1994). "Discretionary acts are upheld if the circuit court 'examined the relevant facts, applied a proper standard of law, and, using a demonstrated rational process, reached a conclusion that a reasonable judge could reach.'" Wynhoff, 2000 WI App 57 at ¶ 13 (citations omitted).

¶ 9. Wisconsin Stat. § 842.14(4) expressly authorizes a circuit court in equity to order compensation by one party to the other when a partition does not equalize the positions of the parties. Although Elmer did not invoke § 842.14(4) as the basis for his contribution claim, the situation envisioned by the statute is the very one represented by Elmer's counterclaim. Elmer contended that a partition would not make him equal ■with Janet because he had continued to make the various property-related payments after Janet had left the relationship. But the trial court saw Elmer's claim as also implicating equitable considerations on Janet's side of the ledger. In support of its ruling, the trial court said, "It would not be justice ... to require [Janet] to contribute to [Elmer's] . . . payments, on the one hand, and on the other, not require him to account for his profits and use since [Janet] left."

¶ 10. The evidence established that the parties agreed to share the farmette expenses equally. That arrangement broke down when the parties terminated their relationship. To his detriment, Elmer then took on all of the property-related payments. But to his benefit, he continued to enjoy the full use and occupancy of the property. To her benefit, Janet no longer contributed to the expenses of the property. But to her detriment, she lost the use and occupancy of the property. The trial court properly noted these factors in its decision. In addition, we note that while the parties lived together, they filed separate income tax returns with Elmer reporting the farm business on his return. Thus, he was able to obtain the tax benefits from that operation including deductions, depreciation, and any losses credited against his regular employment income. Yet, during this same period of time, Janet contributed to the expenses of the farm operation without any corresponding tax benefits.

¶ 11. We view these facts as supporting the trial court's equitable determination that Elmer's contribution claim should be offset by the reasonable value of his use and occupancy of the premises. As noted, WlS. STAT. § 842.14(4) expressly authorizes a trial court to invoke equity when considering whether an equalizing payment should be made in a partition action.

¶ 12. Elmer argues, however, that because Janet voluntarily departed, she should not be heard in equity to assert an offset against his contribution claim. Actually, the evidence is in conflict as to whether Janet's departure was voluntary. Janet testified that Elmer was abusive to her and had threatened her with a weapon. She also testified that she left the premises without advance notice to Elmer because she was afraid he would not otherwise allow her to leave. Elmer denied these accusations. But the trial court did not see a need to resolve this dispute. Instead, the court took a more practical approach, noting that the parties' marital-like relationship had soured. Thus, the court reasoned, "When that relationship ended, one or the other, common sense tells us, is going to have to leave the premises." Therefore, the court declined to hold Janet's departure, whether voluntary or involuntary, against her. We agree with the trial court's "commonsense" handling of this event.

¶ 13. Elmer has an alternative argument against the trial court's ruling. He contends that WlS. STAT. § 700.23 is the controlling statute as to Janet's right to an offset, and he argues that the requirements of the statute were not satisfied in this case. This statute provides that after a written demand, a nonoccupying cotenant may recover from an occupying cotenant a proportionate share of the reasonable rental value of the land if the occupying cotenant has ousted the nonoccupying cotenant. Elmer says that the evidence does not establish either a written demand by Janet or his "ouster" of her from the property.

¶ 14. We agree with Elmer that the evidence does not demonstrate a written demand by Janet. And while the evidence might arguably demonstrate an "ouster," we have previously noted that the trial court did not make such a finding. But we do not agree that this barred Janet from asserting an offset claim as a defense to Elmer's counterclaim. As noted, WlS. STAT. § 700.23(3) speaks to a situation where the nonoccupy-ing cotenant has been ousted from the property. But the statute does not purport to address a situation such as here where there has been no ouster. Therefore, we reject Elmer's premise that the statute addresses all situations where a nonoccupying cotenant asserts a claim against a cotenant in possession.

¶ 15. Our holding is supported by the supreme court's decision in Rainer v. Holmes, 272 Wis. 349, 75 N.W.2d 290 (1956), a case noted by the trial court. In Rainer, the occupying cotenant sought partition and proportionate reimbursement for improvement, taxes and insurance payments she had made relative to the property. See id. at 350. The trial court ordered the property sold and granted the occupying cotenant's reimbursement request. See id. at 350-52. One of the nonoccupying cotenants challenged this reimbursement award, see id. at 352, contending that the trial court should have offset the reasonable value of the occupying cotenant's use and occupancy of the property against her reimbursement award. See id. at 353.

¶ 16. The supreme court began its analysis by stating the general rule that "the cotenant in possession is not held accountable for use and occupancy in the absence of ouster or agreement to pay rent." Id. However, the court adopted an important qualifier: "[W]e are of the opinion that an allowance for use and occupancy in a case such as this should not be made unless the equities of the particular case require it." Id. (emphasis added). After considering the equities of the case, the supreme court upheld the trial court's ruling that the occupying cotenant was entitled to reimbursement "without being required to account for her use and occupancy of the premises." Id. at 355.

¶ 17. Here, although the facts are different than those in Rainer, the core issue is the same: under what circumstances, if any, does the law allow for an offset for use and occupancy by the occupying cotenant? The answer is set out in Rainer: generally an allowance for use and occupancy is not proper, but the equities of a given case may permit such an allowance. See id. at 353. And as we have already held, the trial court properly exercised its equity discretion in this case.

¶ 18. Elmer argues that Rainer does not govern this case because "Rainer dealt only with the issue of recoupment of expenditures made for improvements." We disagree. The supreme court cast the appellants' argument as follows: "What appellants seek in this action is the offset of the value of use and occupancy by respondent." Id. (emphasis added). And the court's discussion focused squarely on the "use and occupancy" question. We reject Elmer's attempt to put a different slant on Rainer. .

¶ 19. Having upheld the trial court's equitable determination that the reasonable value of Elmer's use and occupancy of the premises can be offset against the reasonable value of his contributions, the next question is what are those reasonable values? But the court made no express findings on this question. It may be that the court was implicitly finding that these values were sufficiently equal such that no balancing payment to Elmer was warranted. But we are unable to glean that from the evidence in this case.

¶ 20. We acknowledge that the trial court did say, "the only evidence of value shows that the value of the farmette is now less than that on the date of defendant's departure." But that remark speaks to the value of the property, not to the reasonable value of Elmer's contributions measured against the reasonable value of his use and occupancy. And even assuming, without deciding, that diminished value of the property bears upon this "balancing" exercise, we question whether the evidence supports the trial court's statement. The parties purchased the property for $35,000. According to Janet's appraiser, the value of the property in 1994 when Janet left the relationship was $55,000. A later appraisal in 1998 placed the value of the property at $65,000.

¶ 21. In summary, the trial court answered only half of the inquiry. The court correctly interpreted the law of partition and properly exercised its discretion by ruling that Elmer's contribution claim was subject to an offset for his use and occupancy of the property. But the trial court did not answer the other half of the inquiry — what are the values of these two components? Only after these additional answers are provided can the court determine the amount, if any, of Elmer's "balancing" payment. We therefore reverse this portion of the judgment and remand for further proceedings. If the court concludes that it needs additional evidence on this question, it is authorized to reopen the evidentiary proceedings.

Conclusion

¶ 22. We uphold the trial court's legal and equitable holdings that Elmer's contribution claim is subject to an offset for his use and occupancy of the property. However, those holdings alone do not fully resolve the case. We remand for further fact-finding as to the reasonable value of these two components. Those further findings will then allow the trial court to determine the ultimate issue — what amount of reimbursement, if any, should be awarded to Elmer.

¶ 23. Costs are not awarded to either party.

By the Court. — Judgment and order affirmed in part; reversed in part and cause remanded with directions.

       Janet's complaint also sought partition of certain personal property that the parties had owned. In addition, her complaint alleged causes of action for breach of contract, unjust enrichment, constructive trust and conversion. The trial court ordered partition of the personal property, and that matter is not before us. Nor are the other causes of action alleged by Janet since the court did not base its decision on those claims.
      All references to the Wisconsin statutes are to the 1997-98 version.

       Thus, the trial court rejected Elmer's quiet title request. Elmer does not appeal this ruling.

       Wisconsin Stat. § 842.02 states:
      (1) A person having an interest in real property jointly or in common with others may sue for judgment partitioning such interest unless an action for partition is prohibited elsewhere in the statutes or by agreement between the parties for a period not to exceed 30 years.
      (2) The plaintiff in the plaintiffs complaint may demand judgment of partition and, in the alternative, if partition is impossible, judicial sale of the land or interest, and division of the proceeds.
      Here, the trial court determined that pure partition was not practical, so the court ordered the property sold and the proceeds divided pursuant to subsec. (2). Neither party challenges this ruling.

       Wisconsin Stat. § 842.14(4) states in part:
      If partition is adjudged, and if it appears that it-cannot be made equal between the parties without prejudice to the rights or interests of some of them, the court may provide in its judgment that compensation be made by one party to the other for equality of partition, according to the equity of the case (Emphasis added.)

       We acknowledge that Janet's complaint did not seek any payment for Elmer's use and occupancy of the premises. Rather, she limited her claim to partition. However, she defended against Elmer's counterclaim on the basis of her entitlement to an offset even though she was not seeking such an award.

       The trial court did not expressly cite to this tax history in its ruling. However, this history was detailed at the bench trial and in the arguments to the trial court. When reviewing a trial court's exercise of discretion, we are permitted to search the record for reasons to sustain such a determination. See Tralmer Sales & Serv., Inc. v. Erickson, 186 Wis. 2d 549, 572-73, 521 N.W.2d 182 (Ct. App. 1994).

       WISCONSIN Stat. § 700.23(3) provides, in relevant part:
      If land belonging to such cotenants is occupied by one cotenant and not by another, any cotenant not occupying the premises may recover from the occupying cotenant:
      (a) A proportionate share of the reasonable rental value of the land accruing after written demand for rent if the occupying tenant manifests an intent to occupy the premises to the exclusion of the other cotenant or cotenants.

       Thus, this is not a case where the trial court improperly invoked equity in the face of a statutory mandate to the contrary. See GMAC Mortgage Corp. v. Gisvold, 215 Wis. 2d 459, 480, 572 N.W.2d 466 (1998).

       Elmer also argues that any reliance on Rainer v. Holmes, 272 Wis. 349, 75 N.W.2d 290 (1956), is misplaced because of the legislature's later enactment of WlS. Stat. § 700.23(3). However, we have already held that the statute does not apply to this case. Moreover, the statute does not speak to partition or the authority of a court acting in equity to order a balancing payment pursuant to WlS. STAT. § 842.14(4).


source: Caselaw Access Project

author: DEININGER, J.

license: Public Domain

text:
    State of Wisconsin, Plaintiff-Respondent, v. Dennis R. Fosnow, Defendant-Appellant.

    Court of Appeals

      No. 00-0122.

      Submitted on briefs December 7, 2000.

    Decided December 21, 2000.

    2001 WI App 2
    (Also reported in 624 N.W.2d 883.)

      On behalf of the defendant-appellant, the cause was submitted on the briefs oí David D. Cook, Monroe.
    On behalf of the plaintiff-respondent, the cause was submitted on the brief of James M. Freimuth, assistant attorney general, and James E. Doyle, attorney general.
    Before Vergeront, Roggensack and Deininger, JJ.

      Petition to review denied.

   DEININGER, J.

¶ 1. Dennis Fosnow appeals an order denying postconviction relief under WlS. STAT. §974.06 (1997-98). In September 1989, he was charged with various crimes including armed burglary, kidnapping, and sexual assault. Although Fosnow originally pleaded not guilty by reason of mental disease or defect to these charges, he withdrew the pleas after psychiatric evaluations did not support it. He then pleaded no contest to reduced charges. In December 1998, Fosnow moved to withdraw his no contest pleas based on "newly discovered evidence" that he suffered from Dissociative Identity Disorder (DID) at the time of the crimes. Because we conclude that Fosnow's new DID diagnosis does not constitute newly discovered evidence, we affirm the circuit court's order.

BACKGROUND

¶ 2. In September 1989, Fosnow pointed a sawed-off shotgun at occupants of a Grant County tavern. Next, he kidnapped a bartender "for insurance purposes" and took her to a home in rural Crawford County, which he entered without the owner's consent. Fosnow then battered and sexually assaulted the bartender. He subsequently shot himself in an unsuccessful suicide attempt.

¶ 3. The State charged Fosnow with five crimes in Grant County and four in Crawford County arising from the incident. He entered pleas of not guilty and not guilty by reason of mental disease or defect to all charges, and the court ordered mental examinations pursuant to WlS. STAT. § 971.16 (1987-88). At least three psychiatrists examined Fosnow, and all concluded that he was not suffering from a mental disease or defect at the time of the offenses which would render him not responsible for his actions under WlS. STAT. § 971.15 (1987-88). Fosnow informed two of the psychiatrists that he heard voices or had "imaginary friends." According to Fosnow, one of the psychiatrists, Dr. Wilson, rejected his explanation of "hearing voices," saying that "the devil made me do it defense went out in the 60s and he wasn't going to hear it." Another psychiatrist, Dr. Van Dyke, specifically addressed and rejected a diagnosis of DID for Fosnow.

¶ 4. In January 1990, Fosnow entered a plea agreement under which all pending charges were consolidated in Grant County. Fosnow withdrew his pleas of not guilty and not guilty by reason of mental disease or defect "based on the reports by all psychiatrists." Pursuant to the agreement, he entered pleas of no contest to five of the nine charges: recklessly endangering safety, kidnapping, first-degree sexual assault, armed burglary, and possession of a short-barreled shotgun. The remaining four charges were dismissed. The court subsequently sentenced Fosnow to a cumulative term of sixty years imprisonment.

¶ 5. In December 1998, Fosnow filed a motion to withdraw his no contest pleas pursuant to WlS. STAT. § 974.06. He alleged that he had not knowingly and voluntarily entered his pleas because he was not aware that he had a mental illness at the time of the offense which rendered him not criminally responsible for his actions under WlS. Stat. § 971.15 (1987-88). The circuit court conducted a hearing regarding Fosnow's postcon-viction claim of "newly discovered evidence," that is, his newly diagnosed DID. At the postconviction hearing, Fosnow presented the testimony of Dr. Richard Arnesen, who was his treating psychiatrist in prison from 1992 to 1998. Dr. Arnesen testified that in 1995 he determined that Fosnow had DID at the time of the crimes, and that therefore he was not criminally responsible for them. The State countered with testimony from two of the psychiatrists who evaluated Fosnow shortly following the crimes in 1989.

¶ 6. The circuit court denied Fosnow's request to withdraw his no contest pleas. The court reasoned that Dr. Arnesen's opinion that Fosnow had DID in 1989 was not credible because its premises were "faulty" and "not true." Fosnow appeals the court's order denying him relief.

ANALYSIS

¶ 7. "After sentencing, a defendant who seeks to withdraw a guilty or no contest plea carries the heavy burden of establishing, by clear and convincing evidence, that withdrawal of the plea is necessary to correct a manifest injustice." State v. McCallum, 208 Wis. 2d 463, 473 ¶ 15, 561 N.W.2d 707 (1997); State v. Krieger, 163 Wis. 2d 241, 249, 471 N.W.2d 599 (Ct. App. 1991). Plea withdrawal is committed to the trial court's discretion. McCallum, 208 Wis. 2d at 473 ¶ 15. A reviewing court will reverse the trial court only if it has erroneously exercised its discretion in denying a plea withdrawal request, and this may occur when a trial court's decision is based on an erroneous application of the law. Id.

¶ 8. Fosnow argues that the new DID diagnosis constitutes "newly discovered evidence" entitling him to withdraw his no contest pleas. We agree that "[njewly discovered evidence may be sufficient to establish that a manifest injustice has occurred." Id. at ¶ 16. This is so because of the requirement that all pleas be supported by evidence establishing a factual basis to support the plea, and because newly discovered facts "could establish that conduct originally admitted by the defendant did not constitute the offense charged." Krieger, 163 Wis. 2d at 255.

¶ 9. Generally, in order to warrant plea withdrawal on the basis of newly discovered evidence a defendant must show by clear and convincing evidence that:

(1) the evidence was discovered after conviction; (2) the defendant was not negligent in seeking evidence; (3) the evidence is material to an issue in the case; and (4) the evidence is not merely cumulative. If the defendant proves these four criteria by clear and convincing evidence, the circuit court must determine whether a reasonable probability exists that a different result would be reached in a trial.

McCallum, 208 Wis. 2d at 473 ¶ 16. Newly discovered evidence, however, does not include the "new appreciation of the importance of evidence previously known but not used." State v. Bembenek, 140 Wis. 2d 248, 256, 409 N.W.2d 432 (Ct. App. 1987) (citation omitted). The State maintains that Fosnow's new DID diagnosis falls into the latter category — that it can be properly viewed only as the newly discovered importance of evidence previously known or knowable by Fosnow and his trial counsel. We agree.

¶ 10. As we have noted, our overall task is to determine whether the trial court erroneously exercised its discretion in denying Fosnow's plea withdrawal request. The standard for reviewing a trial court's determination that a defendant has not presented "newly discovered evidence" is not as clearly established. This court has on at least one occasion determined it to be a question of law, subject to de novo review on appeal. See State v. Jackson, 188 Wis. 2d 187, 197, 525 N.W.2d 739 (Ct. App. 1994). Chief Justice Abrahamson has suggested in a concurring opinion, however, that the first two elements of the McCallum test (whether evidence was discovered after conviction and whether the defendant was not negligent in seeking evidence) are factual in nature and should be reviewed on the "clearly erroneous" standard; while the third and fourth elements (materiality and cumula-tiveness) are evidentiary rulings, reviewable for an erroneous exercise of discretion. McCallum, 208 Wis. 2d at 486 ¶¶ 43-44 (Abrahamson, C.J., concurring).

¶ 11. Here, as Fosnow points out, the trial court did not separately address the first four McCallum factors, and it would thus be difficult for us to separately review the trial court's determinations regarding them for clear error or an erroneous exercise of discretion. The trial court simply noted in its written decision that "[i]f [Fosnow] had this [DID] disorder, an Axis I disorder, when he changed his plea in 1989, the court concludes he would be entitled to the relief of being allowed to withdraw his 1989 plea, since this would be newly discovered evidence since it was unknown in 1989." The court went on to conclude that Dr. Arnesen's opinion was not credible, which is a part of the final element in the McCallum analysis. We conclude, however, that our disposition of this appeal is not governed by a review of the trial court's application of the McCallum factors. We may nonetheless affirm the proper result the trial court reached, even if we do so for a different reason. See State v. Holt, 128 Wis. 2d 110, 124, 382 N.W.2d 679 (Ct. App. 1985).

¶ 12. As we discuss below, we conclude that Dr. Arnesen's opinion and diagnosis were not "new evidence" at all, but merely "the newly discovered importance of existing evidence." Krieger, 163 Wis. 2d at 256. We further conclude that we may make this determination de novo, because it is in the nature of an exception to the application of the "newly discovered evidence" tests, and because it is a determination which the trial court is no better positioned than a reviewing court to make. An item proffered postconviction may present an exception to the McCallum analysis when, even though it was "discovered" after conviction, the defendant was not negligent in not seeking it earlier, and it is arguably material and noncumulative, it is nonetheless not "newly discovered evidence," but something else. The determination of whether something proffered postconviction should be categorically excepted from being declared "newly discovered evidence" thus presents a question of law, requiring an assessment only of the nature of the proffered item, and not of the facts surrounding its discovery, the defendant's diligence, or the item's materiality to issues in the case.

¶ 13. Wisconsin courts have previously addressed the issue of whether a postconviction mental health diagnoses constitutes "newly discovered evidence." The defendant in Vara v. State, 56 Wis. 2d 390, 393-94, 202 N.W.2d 10 (1972), sought a new trial because he had sustained a brain injury prior to the homicide of which he was convicted, which, in combination with alcohol, "would be the basis of a defense of insanity or intoxication or the inability to form the specific intent required by first-degree murder." Id. at 393. The supreme court rejected the claim of newly discovered evidence, explaining:

Vara and his attorney knew he had the head injury which formed the basis of the claim of insanity. This knowledge did not come after the trial but was known before the trial and therefore is no ground for the motion. . . . The claim is made the importance of the brain injury was not realized until after trial. But newly discovered evidence does not include newly discovered importance of evidence previously known and not used.

Id. at 394 (citations omitted).

¶ 14. We reached a similar conclusion in a case whose procedural posture closely parallels that before us now. See State v. Krieger, 163 Wis. 2d 241, 471 N.W.2d 599 (Ct. App. 1991). Krieger sought to withdraw his no contest pleas to numerous charges involving the sexual assault and sexual exploitation of children on the basis of a postconviction expert opinion that he "suffers from pedophilia; that pedophilia is a mental disorder; and that, as a result, Krieger was not criminally responsible when he committed" the offenses to which he pled. Id. at 256.

¶ 15. We rejected the newly discovered evidence claim, noting that "voluminous evidence" of the defendant's mental health was available to counsel before sentencing. Id. Specifically, we pointed out that Krie-ger had completed a "seven-week intensive, inpatient treatment program at a psychiatric hospital," which yielded a "psychiatric and psychological assessment," concluding that he suffered "from depression and sexual addiction." Id. Despite this, "Krieger failed to obtain any diagnosis that his sexual addiction met the standards" for the lack of criminal responsibility under Wis. Stat. § 971.15. Id. We concluded:

Krieger has failed to differentiate the voluminous psychiatric evidence available before sentencing from Berlin's [postconviction] opinion that Krieger met the standards of sec. 971.15(1), Stats., and was not responsible for his conduct occurring after sentencing. We conclude that Berlin's opinion was nothing more than the newly discovered importance of existing evidence and does not constitute "manifest injustice."

Id. (citing Vara, 56 Wis. 2d at 394).

¶ 16. In both Vara and Krieger, evidence forming the basis for a possible defense of lack of criminal responsibility under Wis. STAT. § 971.15 (1987-88) existed and was available to the defendants or their counsel prior to conviction and sentencing. The same is true in this case. Evidence of Fosnow's dissociative personality features and other possible DID symptoms existed and was known to him and his counsel at the time he entered his pleas. We conclude that Dr. Arnesen's postconviction opinion that Fosnow suffered from DID at the time of the crimes and was thus not criminally responsible for them, is, like the postconviction opinions proffered in Vara and Krieger, simply "the newly discovered importance of existing evidence," rather than newly discovered evidence. See Krieger, 163 Wis. 2d at 256; Vara, 56 Wis. 2d at 394.

¶ 17. Fosnow argues that his case is distinguishable from Vara, however, because he did attempt to raise a defense under Wis. Stat. §971.15 (1987-88) before changing his pleas, and thus he is not guilty of "changing tactics" after conviction, as was the defendant in Vara. We reject this distinction. Although the supreme court noted that Vara had "effectively waived" a criminal non-responsibility defense by making the "tactical choice" to instead pursue a self-defense theory at trial, see Vara, 56 Wis. 2d at 393, the court also deemed Vara's failure to present "newly discovered evidence" a separate and sufficient ground for denying relief. See id. ("In addition, the evidence is not newly discovered ....").

¶ 18. Fosnow's attempt to distinguish Krieger is equally unavailing. He claims that unlike that case, here "there was very little psychiatric evidence available at the time of the plea and prior to sentencing." We disagree. Fosnow had a lengthy history of criminal activity (beginning as a juvenile) and psychiatric observation (beginning in approximately 1975) which he communicated to the examining psychiatrists in 1989. Fosnow provided the following information regarding his history of mental health treatment to Dr. Fosdal:

First received mental health care after dropping out of high school [around 1975] — first at the Rock County Hospital for a couple of months — apparently under a Chapter 51 petition — around 1982 — made a suicide attempt — was on antidepressants.... Continued under outpatient care for a short period of time. Next received outpatient care around 1984-85, in Prairie du Chien for about one year — was restarted on an antidepressant — Sinequan. Continued under outpatient care for about one year and had monthly visits with Dr. Kempten — this doctor has now moved out of state. Later was followed by Dr. Wienberg' from LaCrosse — had his visits at the Crawford County Mental Health Center. Was later sent to prison in Iowa and did not have any mental health care while in prison. While on parole, had one visit with Dr. Wilson in Prairie du Chien, but did not have any subsequent visits has not been on any psychiatric medications while on parole. Then said he was admitted to a mental health institute, around 1986, in Independence, Iowa .. . "because I started drinking again." Was hospitalized for about one month and participated in alcohol treatment program.

Dr. Van Dyke's 1989 report contains the following information regarding Fosnow's mental health history:

There was also a previous incident in Iowa where he barricaded himself in an apartment, held the cops off for several hours, and indicated that he was suicidal at that time.. . .
He also has other mental health history. He was committed to the Mental Health Institute in Independence, Iowa for thirty days. He described himself as being wild, carrying a gun, fighting, and suicidal. He was not treated with medication. He was in the Rock County Mental Health Center for 70 days. He was then on the antidepressant, Sine-quan. He saw Dr. Kempton in 1984 for quite a period of time as an outpatient in Prairie du Chien and he was on medications. He states that throughout his life he has had many fights and he is much more likely to do so if he is on drugs or alcohol.

¶ 19. Thus, Fosnow was very much aware of his own prior history of mental health treatment, and upon receiving the 1989 reports, if not before, so was his attorney. The record does not disclose whether Fosnow or his trial counsel attempted to obtain records of his prior mental health treatment, but it is reasonable to infer that such records existed and could have been obtained by Fosnow. Moreover, at least three psychiatric assessments were performed on Fosnow in 1989, all specifically relating to his criminal responsibility for the crimes at issue, and written reports of the evaluations were provided to counsel. Thus, we are satisfied that, like in Krieger, extensive "psychiatric evidence" was available to Fosnow prior to his plea and sentencing. Krieger, 163 Wis. 2d at 256.

¶ 20. Fosnow also attempts to distinguish his situation from that in Krieger by asserting that (1) DID is a disorder that "cannot normally be accurately diagnosed with[in] the statutory time frame for [pretrial] psychiatric evaluations," and (2) "Dr. Arnesen's opinion was not based on an evaluation of evidence already in existence at the time of the trial." We remain unpersuaded, however, that our conclusions in Krieger should not apply on the present facts.

¶ 21. According to the American PSYCHIATRIC Association's Diagnostic and Statistical Manual of Mental Disorders § 300.14, at 486 (4th ed. 1994), DID "appears to have a fluctuating clinical course that tends to be chronic and recurrent. The average time period from first symptom presentation to diagnosis is 6-7 years." Here, Fosnow experienced possible DID symptoms (see footnote 3) for several years prior to the time of his psychiatric evaluations for these crimes. He told Dr. Van Dyke in 1989 that "when he begins feeling very angry or depressed, he is greatly influenced by a person that he describes as an imaginary friend," and that he had developed imaginary friends since childhood. Fosnow also related in 1989 how his imaginary friend, "Scarface," would influence him to do bad things, and that "he would stand by and watch as Scarface did those things." Based on this symptomology, Dr. Van Dyke noted that Fosnow "dissociates to a degree during some of his misbehavior," but rejected a DID diagnosis based on his other observations during two psychiatric interviews with Fosnow. We therefore reject the implication that a DID diagnosis could not have been made in 1989 — it simply was not made at that time.

¶ 22. We further conclude that the three main factors contributing to Dr. Arnesen's postconviction DID diagnosis all existed, and that they were known or knowable at the time of the Fosnow's psychiatric evaluations in 1989. The first is the presence of alternate personalities. As we have noted, Fosnow described his "imaginary friends," dating back to his childhood, to Dr. Van Dyke. Fosnow also told Dr. Wilson in 1989 that he blamed the crimes on hearing "voices." More specifically, he told Dr. Van Dyke that Scarface was with him and goading him into the crimes on the night in question. Thus, the presence or possibility of alternate personalities, particularly Scarface, was known at the time of the initial evaluations, notwithstanding the fact that the examining psychiatrists rejected a finding that Fosnow committed the crimes during a psychotic episode that would render him not criminally responsible for them.

¶ 23. A second factor in Dr. Arnesen's DID diagnosis is Fosnow's alleged lack of memory regarding the crimes at issue. The parties dispute the extent, if any, of Fosnow's memory of the crimes. However, according to Drs. Van Dyke and Fosdal's psychiatric reports from 1989, Fosnow had memory of "some, but not all of what happened." (Emphasis added.) Some of the information that Fosnow could not remember included: returning home to retrieve the gun, backing into another car, going into the bar with the shotgun, and the entire drive out to Crawford County. His lack of memory of certain key events in 1989 is sufficient for us to conclude that Fosnow's memory lapses were not unknown prior to his pleas.

¶ 24. A third factor in Dr. Arnesen's DID diagnosis is traumatic childhood experiences. In at least one of the 1989 psychiatric evaluations, Fosnow revealed that he had been physically abused by his caregivers, including his grandmother and his stepfather. Moreover, at his sentencing, Fosnow told the court that "growing up I was physically and sexually abused by members of my family continuously." Thus, Fosnow's traumatic childhood experiences too were known at the time of his initial evaluations.

¶ 25. In sum, the examining psychiatrists at the time of his pleas either were aware of or had available the information necessary to evaluate Fosnow's mental status at the time of the crimes. Fosnow and his trial counsel were aware of a possible DID diagnosis from Dr. Van Dyke's report and did not choose to obtain additional evaluations that might have supported it in 1989. Another of the original examiners, Dr. Fosdal, explained at the postconviction hearing that Arnesen's "new" diagnosis of DID, even if true, does not necessarily invalidate the conclusions reached in the 1989 evaluations:

It doesn't change my opinion. The issue that we described back in those days ten years ago was true. In other words, he did have a personality which has strong anti-social associations. He has been in a lot of trouble. He has a drinking history and drug abuse history, so those things are true, but the personality we are seeing now if later on in prison alternate selves become available, then this would be a supplemental diagnostic category. It doesn't change the fact that he has had a drinking problem or that he has been anti-social for many years. That's still true, but if Dr. Arnesen's involvement raises the possibility of . . . his having [DID] on top of the previous diagnostic formulations, it doesn't replace them.

We conclude, therefore, that this new expert opinion is "nothing more than the newly discovered importance of existing evidence," Krieger, 163 Wis. 2d at 256, not newly discovered evidence for purposes of plea withdrawal.

¶ 26. We are not the only court to conclude, as we have both here and in Krieger, that new expert opinions obtained postconviction do not qualify as newly discovered evidence regarding a defendant's mental responsibility for a crime. The Minnesota Supreme Court, applying a standard for newly discovered evidence that is nearly identical to the McCollum formulation, concluded as follows:

Dr. Vinnes' evidence is merely a different opinion from a different expert, based on a different test which measures many of the same capacities as the other tests which were administered before trial. Generally expert testimony does not constitute newly discovered evidence justifying a new trial.... Nine medical experts gave testimony at appellant's trial; if the discovery of a tenth expert is new evidence warranting a new trial, no verdict would ever be final.

State v. Blasus, 445 N.W.2d 535, 543 (Minn. 1989) (citation omitted). Similarly, the Court of Appeals of Washington, in denying a new trial request based on a postconviction psychiatric opinion supporting a diminished capacity defense, concluded that a "new expert opinion, based on the facts available to the trial expert, did not constitute 'newly discovered evidence'" under factors similar to the McCallum factors. State v. Harper, 823 P.2d 1137, 1143 (Wash. App. 1992). The Washington court adopted the following language from a concurring opinion in a prior case:

[W]e must ask whether all of those defendants who could now unearth a new expert, who finds "new facts" — which if believed by the same jury might cause them to acquit — were denied a fair trial, i.e. failed to receive substantial justice. Surely we have to answer in the negative, or finality goes by the boards and the system fails.

Id. (citation omitted).

¶ 27. We note also that the Wisconsin Supreme Court has expressed concern regarding the ability of litigants to procure testimony from psychiatric experts that is "tailor[ed]... to the particular client whom they represent." Steele v. State, 97 Wis. 2d 72, 97, 294 N.W.2d 2 (1980). We emphasize that there is no indication in the present record that Fosnow or his postconviction counsel sought out Dr. Arnesen for the purpose of obtaining a specific diagnosis or a new opinion regarding Fosnow's criminal non-responsibility under WlS. STAT. §971.15. To the contrary, Dr. Arnesen's diagnosis and opinion appears to have evolved during his treatment of Fosnow in prison. Nonetheless, Arnesen's diagnosis remains "merely a different opinion from a different expert." Blasus, 445 N.W.2d at 543. Permitting Fosnow to withdraw his plea on the basis of the Arnesen diagnosis would establish a precedent for the "classic case" described by the Washington Court of Appeals: "the defendant loses, then hires a new lawyer, who hires a new expert, who examines the same evidence and produces a new opinion. We cannot accept this as a basis for a new trial." Harper, 823 P.2d at 1143 (citation omitted).

¶ 28. The State asserts that, even if the DID diagnosis constitutes "newly discovered evidence," there is no reasonable probability that the evidence would lead to a different result. The parties also dispute whether, if we were to permit Fosnow to withdraw his no contest pleas, he would be entitled to contest his factual guilt on the charges, or only his mental responsibility for them. Given our conclusion that the DID diagnosis is not newly discovered evidence, we need not address either issue.

CONCLUSION

¶ 29. For the reasons discussed above, we affirm the appealed order.

By the Court. — Order affirmed.

      A11 references to the Wisconsin Statutes are to the 1997-98 version unless otherwise noted.

       Drs. David Van Dyke and Frederick Fosdal conducted psychiatric evaluations of Fosnow in 1989, and their reports are part of the appellate record. Dr. John Wilson apparently conducted a pretrial psychiatric examination of Fosnow for the Crawford County court, but his report is not part of the appellate record. During cross-examination of Fosnow's postconviction psychiatric expert, Dr. Arnesen, however, the State noted Dr. Wilson's opinion that Fosnow had an "Axis I adjustment reaction with depressed mood, alcohol dependence, history of poly substance abuse and Axis II primary diagnosis anti-social personality disorder." Also, Dr. Fosdal mentions in his report that a "Dr. Miller" was also appointed to evaluate Fosnow regarding the Grant County charges, but we have found no other references to Dr. Miller in the record.

       Dissociative Identity Disorder (DID) was previously known as Multiple Personality Disorder, or MPD. For clarity, we employ only the current term for the disorder, which has been described as follows:
      The essential feature of Dissociative Identity Disorder is the presence of two or more distinct identities or personality states (Criterion A) that recurrently take control of behavior (Criterion B). There is an inability to recall important personal information, the extent of which is too great to be explained by ordinary forgetfulness (Criterion C). The disturbance is not due to the direct physiological effects of a substance or a general medical condition (Criterion D).
      American Psychiatric Association, Diagnostic and Statistical Manual of Mental Disorders § 300.14, at 484 (4th ed. 1994) (DSM-IV).

       The trial court also determined that Fosnow had not established grounds for re-sentencing because Fosnow, his counsel, and the court all knew of Fosnow's dissociative problems at the time of his plea and sentencing. Fosnow does not pursue this issue on appeal.

       The State concedes that Fosnow's claim of "newly discovered evidence" raises a due process issue cognizable under Wis. STAT. § 974.06, and avoids any procedural bar under § 974.06(4).

       The issue in State v. Jackson, 188 Wis. 2d 187, 525 N.W.2d 739 (Ct. App. 1994) was whether a co-defendant's testimony, which was known but "unavailable" at the time of trial due to the co-defendant's invocation of the Fifth Amendment, constituted "newly discovered evidence." We cited State v. Michels, 150 Wis. 2d 94, 97, 441 N.W.2d 278 (Ct. App. 1989) as supporting de novo review, although we note that the question in Michels was whether a defendant had presented a "new factor" for sentence modification purposes.

       Dr. Arnesen also pointed to Fosnow's memory lapses since childhood. Again, these lapses were known or knowable at the time of the initial psychiatric evaluations.

       At the time of the crimes and Fosnow's psychiatric evaluations in 1989, DID was a known disorder in the psychiatric field. See AmeRican Psychiatric Association, Diagnostic and Statistical Manual or Mental Disorders § 300.14, at 477 (3d ed. 1980). Also, the courts experienced a significant increase in criminal dissociative disorder litigation in the 1980's. Sabra M. Owens, The Multiple Personality Disorder (MPD) Defense, 8 Md. J. Con-TEMP. L. ISSUES 237, 244 (1997) (thirty-one such appellate cases in the 1980's). Contrast Coogan v. McCaughtry, 958 F.2d 793, 803 n.5 (7th Cir. 1992) (noting that post-traumatic stress disorder "was not as widely recognized then [1979] as it is now").

       The issue in Steele was whether psychiatric testimony should be admitted in the guilt phase of a bifurcated criminal trial on the issue of whether the defendant had the capacity to form the specific intent specified for the crime. The court concluded that it should not be admitted for that purpose, noting that "[w]hile some courts may have blind faith in all phases of psychiatry, this court does not." Steele v. State, 97 Wis. 2d 72, 97, 294 N.W.2d 2 (1980).


author: ROGGENSACK, J.

text:
    Rainald Schurmann, Plaintiff-Appellant, v. Guy Neau and Employers Reinsurance Corporation, Defendants-Respondents.

    Court of Appeals

      No. 00-0332.

      Submitted on briefs September 12, 2000.

    Decided December 21, 2000.

    2001 WI App 4
    (Also reported in 624 N.W.2d 157.)

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Cynthia A. Curtes of Kramer, Ott, Curtes & Rooney, S.C. of Mount Horeb.
    On behalf of the defendants-respondents, the cause was submitted on the brief oí James J. Jacobson and Daniel C. Conway of Jacobson & Ratzel of Brookfield.

      Before Roggensack and Dillon, JJ., and William Eich, Reserve Judge.

      Petition to review denied.

       Circuit Judge Daniel T. Dillon is sitting by special assignment pursuant to the Judicial Exchange Program.

   ROGGENSACK, J.

¶1. Rainald Schurmann appeals a judgment dismissing his claims for misrepresentation against Guy Neau, an independent insurance agent, from whom he purchased a disability insurance policy that Schurmann claims did not provide the level of insurance he had requested and Neau said had been approved by the Franklin Life Insurance Company. Because we conclude that material issues of fact exist which, if proved, would entitle Schurmann to relief, we reverse the circuit court's summary judgment dismissing the amended complaint, and we remand for a trial on the merits.

BACKGROUND

¶ 2. Schurmann attempted to purchase disability insurance that would provide $4,000 per month of income continuation in the event of his total disability. To do so, he met with Neau, an insurance agent, to discuss his insurance needs. Schurmann, who was self-employed as a dental appliance technician, stated his interest in obtaining an increase in the disability insurance coverage he currently had. According to Schurmann, after Neau reviewed a financial statement Schurmann provided from his accountant, Neau said that Schurmann should qualify for $4,000 to $6,000 per month disability insurance, which would be in excess of any social security and other payments Schurmann might be entitled to receive in the event of his total disability. Neau completed an application to Franklin for disability insurance coverage in the amount of $4,000 per month to age sixty-five, and Schurmann signed it. At the time of the application, Schurmann gave Neau a check for the first premium payment. Later, again according to Schurmann, Neau told him that his application had been approved by Franklin and he would receive a policy which would provide $4,000 per month income for total disability. Franklin did issue a policy, effective January 1,1995, that stated that the monthly payment for total disability was $4,000.

¶ 3. On January 18,1995, Schurmann slipped on an icy driveway, hit his head and suffered a severe injury resulting in his total disability. Following his injury, Schurmann applied to Franklin for disability payments. Franklin made five monthly payments of $4,000 each; then it stopped all payments because it had concluded that Schurmann's past income was insufficient to qualify him for $4,000 per month payments and that any benefits due must first be reduced by other payments Schurmann was entitled to receive.

¶ 4. Schurmann sued Franklin to perform under the policy. Franklin calculated that Schurmann would not be entitled to receive more than $1,500 per month. However, as a settlement, Franklin agreed to pay Schurmann $2,044 per month to age sixty-five, net of social security benefits Schurmann was receiving, rather than the $4,000 per month which Schurmann believed he had purchased. Franklin also made a lump sum payment of $47,452 as a net sum for those months in which no payment of $2,044 had been made, after crediting amounts paid in excess of $2,044 during the first five months. The settlement with Franklin specifically reserved any claim Schurmann had against Neau. ¶ 5. Schurmann then sued Neau and his errors and omissions insurer, Employers Reinsurance Corporation, alleging claims for strict responsibility and intentional misrepresentation in the sale of the insurance policy. Neau responded with a general denial and raised one affirmative defense, the failure to mitigate damages. Neau moved for summary judgment asserting that even if he made the representations Schurmann claimed, they were not actionable. The circuit court agreed with Neau and granted his motion for summary judgment dismissing Schurmann's complaint. He appeals.

DISCUSSION

Standard of Review.

¶ 6. We review summary judgment decisions de novo, applying the same standards employed by the circuit court. Smith v. Dodgeville Mut. Ins. Co., 212 Wis. 2d 226, 232, 568 N.W.2d 31, 34 (Ct. App. 1997). We first examine the complaint to determine whether it states a claim, and then we review the answer to determine whether it joins an issue of material fact or law. Id. If we determine that the complaint and answer are sufficient to join issue, we examine the moving party's affidavits to determine whether they establish a prima facie case for summary judgment. Id. at 232-33, 568 N.W.2d at 34. If the movant has carried his initial burden, we then look to the opposing party's affidavits to determine whether any material facts are in dispute that entitle the opposing party to a trial. Id. at 233, 568 N.W.2d at 34.

¶ 7. The existence of a material misrepresentation is essentially a question of fact, which is generally left for a jury to determine. See Hartwig v. Bitter, 29 Wis. 2d 653, 656, 139 N.W.2d 644, 647 (1966). However, when an essential element of a claim cannot be proved under any view of the facts, summary judgment is appropriate. Smith, 212 Wis. 2d at 233, 568 N.W.2d at 34.

Misrepresentation Claims.

¶ 8. Schurmann claims for misrepresentation under two theories, strict responsibility and intentional deceit, based on the Franklin policy which afforded him less than the $4,000 per month that he requested and Neau told him had been approved. Neau's answer denies all Schurmann's material allegations. In support of his motion for summary judgment to dismiss the amended complaint, Neau contends that: (1) even if he made the representations which Schurmann alleges in regard to the coverage that would be afforded, the representations were made during the course of an application process. Therefore, his statements related to facts which were not then in existence or were only statements of his opinion and not actionable; (2) Schurmann did not rely on Neau's representations to his detriment; and (3) Schurmann's settlement with Franklin precludes his claim against Neau.

¶ 9. Agency law in Wisconsin does not insulate an agent from liability for the agent's torts. Ford v. Wisconsin Real Estate Examining Bd., 48 Wis. 2d 91, 102, 179 N.W.2d 786, 792 (1970) (further citations omitted). It has long been the rule that an insured whose insurer denies him benefits that he had requested his agent to secure may bring a tort action against his insurance agent for failing to procure the requested coverage. Appleton Chinese Food Serv., Inc. v. Murken Ins., Inc., 185 Wis. 2d 791, 804, 519 N.W.2d 674, 678 (Ct. App. 1994). Therefore, even when an insured has settled with and released the insurer for payment less than would have resulted if the sought-after insurance had been provided, the agent may remain personally liable in tort to the insured for failing to procure the insurance that was requested, as the agent's liability is not dependent on his relationship to the principal but is attributable to the agent's own misconduct. Id.

¶ 10. Schurmann bases his complaint on misrepresentation claims. To prevail on a strict responsibility claim, he must plead and prove all of the following: (1) Neau made a representation of material fact; (2) it was untrue; (3) the representation was made on Neau's personal knowledge or under circumstances in which he necessarily ought to have known the truth or untruth of the statement; (4) Neau had an economic interest in the transaction; and (5) Schumann believed Neau's representation to be true and relied on it to his damage. Whipp v. Iverson, 43 Wis. 2d 166, 169-70, 168 N.W.2d 201, 203 (1969). To prevail on a claim for intentional misrepresentation, Schurmann must plead and prove the first, second and fifth elements of a strict responsibility claim and also plead and prove that Neau knew his statement was false or that he made it recklessly without caring whether it was true or false and with intent to deceive and induce Schurmann to act upon it. Id. at 169, 168 N.W.2d at 203. However, unless the speaker knew of facts inconsistent with his statements or had a present intent not to perform, an action for misrepresentation cannot be based on future events or facts not in existence when the representation was made, or on unfulfilled promises. Hartwig, 29 Wis. 2d at 658, 139 N.W.2d at 647.

1. Elements of Misrepresentation.

¶ 11. Here, the amended complaint alleges that Neau advised Schurmann that he could apply for $4,000 to $6,000 per month of income continuation coverage in the event of total disability, which payments would be in addition to any social security or other benefits available to him. It also alleges that Neau completed an application, which Schurmann signed and for which he made the first premium payment, that Neau told Schurmann that his application had been approved by Franklin in the amount of $4,000 per month and that Schurmann believed all Neau's representations to be true and relied on them to his. detriment, causing him injury. And finally, it alleges that Neau had an economic interest in the sale of insurance to Schurmann and that Neau made the representations recklessly without caring whether they were true, but with the intent to deceive Schurmann. Those allegations constitute more than representations of future facts or statements of opinion. According to the amended complaint, Neau told Schurmann that Franklin had approved his application for $4,000 per month disability insurance, but after his injury, Franklin refused to pay $4,000 per month. Those allegations are of pre-existing events and facts; therefore, when examined with the rest of the factual allegations in the amended complaint, they are sufficient to set forth claims for strict responsibility and intentional misrepresentation. Whipp, 43 Wis. 2d at 169-70, 168 N.W.2d at 203; Hartwig, 29 Wis. 2d at 658, 139 N.W.2d at 647.

¶ 12. For his part, Neau's answer to the amended complaint denied all the material allegations and asserted, as the sole affirmative defense, that Schurmann failed to mitigate his damages. Issues of material fact were joined by the answer.

¶ 13. To successfully complete the third step in his motion for summary judgment, Neau must submit evidentiary materials sufficient to make a prima facie case that Schurmann's complaint must be dismissed as a matter of law. Smith, 212 Wis. 2d at 233, 568 N.W.2d at 34. Neau's motion was supported by his answers to Schurmann's requests to admit and Neau's descriptions of why certain requests to admit had been denied. However, Schurmann's material allegations that Neau represented to Schurmann that there had been an application made for $4,000 per month disability insurance; that that application had been approved; that Schurmann would receive $4,000 per month until age sixty-five in the event of his total disability; and that the payments to him under the Franklin policy would be in excess of any social security or other payments he was entitled to receive were not set aside by the submissions in support of Neau's motion for summary judgment. They remain material facts that were denied in Neau's answer, and therefore they continue to require a trial where the fi nder of fact can determine whether it believes Schurmann or Neau.

¶ 14. In support of his motion, Neau also submitted several pages from Schurmann's deposition where the American Family disability policy Schurmann had had was compared with what he was being provided by way of settlement with Franklin under the policy Neau assisted him in purchasing. Apparently this was done to show that, even though Schurmann was receiving $2,044 per month instead of $4,000, he was better off than he had been before he purchased the Franklin policy. Neau also identifies testimony from Schurmann's deposition where Schurmann agrees that he could only speculate about what he would have done in regard to upgrading his disability insurance if the Franklin policy had not been issued. From these facts, Neau contends that Schurmann cannot prove that he relied to his detriment on any representation Neau made. Neau misunderstands the concept of detrimental reliance.

¶ 15. The measure of damages for both strict responsibility and intentional misrepresentation is the benefit of the bargain. Skrupky v. Elbert, 189 Wis. 2d 31, 47, 526 N.W.2d 264, 270 (Ct. App. 1994); Lundin v. Shimanski, 124 Wis. 2d 175, 195, 368 N.W.2d 676, 686 (1985). Under the benefit of the bargain rule of damages, a plaintiff who prevails on his claim is entitled to damages equivalent to what he would have received if the representation relied upon had been true. Skrupky, 189 Wis. 2d at 47, 526 N.W.2d at 270. That is the legal measure of his detrimental reliance.

¶ 16. Here, Neau tries to stand the rule on its head when he asserts that because the insurance Franklin provided by way of settlement is worth more than a disability policy Schurmann relinquished after purchasing what he thought was a $4,000-per-month policy, he did not rely to his detriment on Neau's statements. The amount of disability insurance Schurmann had already purchased prior to meeting with Neau is irrelevant to whether he was denied the benefit of the bargain in regard to the Franklin policy. It is equally irrelevant that Schurmann could only "speculate" about what he would have done about upgrading his disability insurance if his application had not been approved. If Schurmann can prove the facts asserted in the amended complaint, his benefit of the bargain damages shall be measured by what he would have recovered with payments of $4,000 per month during the course of his disability, less the $2,044 per month payments he is actually receiving. Skrupky, 189 Wis. 2d at 48, 526 N.W.2d at 270.

2. Settlement with the Insurer.

¶ 17. Neau also contends that Schurmann's settlement with Franklin precludes his suit against Neau. He relies on Scheideler v. Smith & Assocs., Inc., 206 Wis. 2d 480, 557 N.W.2d 445 (Ct. App. 1996). Neau's reliance on Scheideler is misplaced.

¶ 18. Scheideler involved a motor vehicle accident where the person liable had insufficient insurance to cover all of the damages Rebecca Scheideler and her four children sustained. She made a claim for $200,000 of underinsured motorist (UIM) coverage under her own General Casualty policy. The claim was denied because, although she had once had that level of UIM coverage, it had been deleted from the policy for the car she was driving at the time of the accident. Scheideler sued General Casualty and Smith & Associates, the agent who had deleted Scheideler's UIM coverage. General Casualty settled with Scheideler by paying her $200,000, the maximum she would have received if her UIM coverage had not been deleted. Scheideler, 206 Wis. 2d at 489, 557 N.W.2d at 449. Because Scheideler was paid all she could have been paid if General Casualty's agent had not erroneously deleted the UIM coverage, we concluded that the election of remedies doctrine precluded a claim against the agent subsequent to settlement. That is, we concluded Scheideler's claim had been fully satisfied.

¶ 19. Here, Schurmann's settlement with Franklin was not for the full amount for which he had bargained. It was for approximately fifty-one percent of that amount. Therefore, his claim was not fully satis-tied, and our holding in Scheideler is not a bar to Schurmann's continuation of this claim against Neau. Rather, we apply Appleton Chinese Foods, where we concluded that "even where an insured has settled and released an insurer, the agent may remain personally liable in tort to the insured for failing to procure the proper insurance." Appleton Chinese Foods, 185 Wis. 2d at 804, 519 N.W.2d at 678. Accordingly, we conclude that Neau has not made a prima facie case to dismiss Schurmann's amended complaint, and we reverse the judgment and remand to the circuit court.

CONCLUSION

¶ 20. Because we conclude that material issues of fact exist that, if proved, would entitle Schurmann to relief, we reverse the circuit court's summary judgment dismissing the amended complaint, and we remand for a trial on the merits.

By the Court. — Judgment reversed and cause remanded.

       The settlement documents from Schurmann's suit against Franklin are part of the record in this appeal.

       In the amended complaint, the first claim for relief is labeled "Negligent Misrepresentation," but on appeal, as well as in the circuit court, Schurmann disregards the label and looks to the factual allegations, which he contends support a claim for strict responsibility for misrepresentation. Neau does not object, so we focus our analysis on the arguments presented to us by the parties.

       However, when the insurer provides the same coverage through settlement with the insured as was requested, no action against the agent exists because he has not failed to produce what was promised. Smith v. Dodgeville Mut. Ins. Co., 212 Wis. 2d 226, 231, 568 N.W.2d 31, 33 (Ct. App. 1997).

       Most of the cases which claim against an agent for failure to procure the insurance requested by the insured are based on common law negligence. Appleton Chinese Food Serv., Inc., 185 Wis. 2d 791, 519 N.W.2d 674 (Ct. App. 1994). However, we see no reason why such a claim cannot be presented as one for misrepresentation if proof of the material allegations is available.

       According to submissions Schurmann relied on in opposition to Neau's summary judgment motion, he may have had more than one disability policy from American Family at the time he purchased the Franklin policy. However, it is undisputed that the combined payments from all disability policies that were in force when the Franklin policy was issued would have paid less than the settlement he received from Franklin.


author: DYKMAN, P.J.

text:
    Ronald Beauchamp, June Rittenhouse, Robert Beauchamp, and Margaret Boulanger, Plaintiffs-Appellants, v. James A. Kemmeter, Lathrop & Clark, LLP, and Wisconsin Lawyers Mutual Insurance Company, Defendants-Respondents.
    Court of Appeals

      No. 00-0470.

      Submitted on briefs September 12, 2000.

    Decided December 21, 2000.

    2001 WI App 5
    (Also reported in 625 N.W.2d 297.)

      On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of Cynthia L. Manlove of Hall Chame Buree & Olson, S.C., Milwaukee.
    On behalf of the defendant-respondent, James A. Kemmeter and Wisconsin Lawyers Mutual Insurance Company, the cause was submitted on the brief of Ward, I. Richter and Sheila M. Sullivan of Bell, Gierhart & Moore S.C., Madison.
    On behalf of the defendant-respondent, Lathrop & Clark, LLP, and Wisconsin Lawyers Mutual Insurance Company, the cause was submitted on the brief of Earl H. Munson of Boardman, Suhr, Curry & Field, LLP, Madison.
    Before Dykman, P.J., Deininger, J., and William Eich, Reserve Judge.

      Petition to review denied.

   DYKMAN, P.J.

¶ 1. Ronald Beauchamp, June Rittenhouse, Robert Beauchamp, and Margaret Bou-langer (Appellants) appeal from a judgment and an order dismissing their negligence claim against the law firm of Lathrop & Clark, LLP, and James A. Kemme-ter, the attorney who drafted their uncle's will. They assert that, when extrinsic evidence of a testator's intent is available, third parties unnamed in a will should be permitted to maintain negligence actions against the drafting attorney. We disagree and conclude that the trial court properly dismissed the Appellants' claim because, as non-clients unnamed in any will documents, they have no standing to sue Kem-meter. We therefore affirm.

I. Background

¶ 2. The pleadings and affidavits set forth the following facts, which we note for background. Kemme-ter is an attorney licensed to practice law in Wisconsin. Kemmeter drafted a will for Roy Burgo in 1986, and then drafted a new will for Burgo in 1990. The 1990 will provided that twenty-five percent of Burgo's estate would pass to his sister, Evelyn Beauchamp. Evelyn passed away in December 1995. After Evelyn's death, Burgo's live-in aid, Robert Schneider, prepared a list of Evelyn's four children and two stepchildren. Her four children are the Appellants, none of whom were named in the 1990 will.

¶ 3. At a January 1996 meeting, Kemmeter was told of Evelyn's death and given the list of Evelyn's children and stepchildren. Burgo died in May 1996. Whether Burgo had intended to change his estate plan and whether he directed Kemmeter to redraft a will to include the Appellants are questions the parties dispute.

¶ 4. The Appellants sued Kemmeter, Lathrop & Clark, and Wisconsin Lawyers Mutual Insurance Company, alleging that Kemmeter was negligent in failing to properly prepare a new will according to Burgo's intentions. Kemmeter moved for summary judgment, arguing that he had no duty to the Appellants as a matter of law. Lathrop & Clark also moved for summary judgment, similarly arguing that the Appellants had no standing to sue Kemmeter or Lathrop & Clark. The Appellants countered that whether instructions given to Kemmeter at the January 1996 meeting created a duty in Kemmeter to change Burgo's will was a question of fact, and thus inappropriate for summary judgment. The trial court granted Kemmeter's and Lathrop & Clark's motions and dismissed the complaint. The Appellants appeal.

II. Analysis

¶ 5. We review summary judgments de novo, using the same methodology as the trial court. Estate of Thompson v. Jump River Elec. Coop., 225 Wis. 2d 588, 593, 593 N.W.2d 901 (Ct. App. 1999). The methodology is well known, and we need not repeat it in its entirety here. When using summary judgment methodology, we first determine whether the plaintiff has stated a valid claim for relief. Eternalist Found., Inc. v. City of Platteville, 225 Wis. 2d 759, 770, 593 N.W.2d 84 (Ct. App. 1999), review denied, 228 Wis. 2d 174, 602 N.W.2d 760 (1999). We examine the plaintiffs complaint and accept as true all facts pleaded and all inferences that can reasonably be derived from those facts. Id. For the reasons discussed below, we conclude that the Appellants' complaint fails to state a valid claim. Therefore, our analysis ends at this first step in summary judgment methodology, and we need go no further. Id.

¶ 6. The precise issue we address is whether parties who are unnamed in a will, but claim to be intended beneficiaries based on evidence extrinsic to a will, may maintain a negligence action against the attorney who drafted the will. We conclude that they may not.

¶ 7. As a general rule, an attorney is not liable to third parties for negligent acts committed within the scope of the attorney-client relationship. Green Spring Farms v. Kersten, 136 Wis. 2d 304, 321, 401 N.W.2d 816 (1987). In other words, only an attorney's clients may normally sue that attorney for malpractice. In matters of estate planning, the supreme court carved out an exception to this general rule in Auric v. Continental Cas. Co., 111 Wis. 2d 507, 512, 514, 331 N.W.2d 325 (1983). The Auric court held that an attorney could be liable to a third party if that attorney "acts negligently in drafting or supervising the execution of a will resulting in a loss to a beneficiary named therein." Auric, 111 Wis. 2d at 514.

¶ 8. The Appellants argue that we should extend the rule of Auric and apply it in this case. They assert that where, as here, extrinsic evidence of the testator's intent is available, courts should permit third parties unnamed in estate planning documents to proceed against the drafting attorney. Kemmeter argues that Auric and Anderson v. McBurney, 160 Wis. 2d 866, 467 N.W.2d 158 (Ct. App. 1991), preclude suits by third parties other than beneficiaries named in a will.

¶ 9. We hold that third parties may not maintain a cause of action for malpractice against the drafting attorney unless they are named in an executed or unex-ecuted will or similar estate planning document. Our conclusion is based primarily on the holdings of Auric and Anderson, and is supported by sound public policy and persuasive foreign authority.

¶ 10. In Auric, the testator's attorney, Timothy Crawford, drafted a new will and revocable trust in 1973 to replace a will executed in 1970. Auric, 111 Wis. 2d at 510. After the testator signed the trust, Crawford and his secretary signed as witnesses. Id. However, only the testator and Crawford signed the new will. Id. Due to "confusion" or a "mistake of the moment," Crawford's secretary failed to sign the will. Id. Because the 1973 will was only signed by one witness, it did not meet the will formality requirements of Wis. STAT. § 853.03(2) (1971). Auric, 111 Wis. 2d at 510-11. The probate court denied its admission and admitted the 1970 will instead. Id. The 1973 will contained a $25,000 bequest to Robert Auric; the 1970 will did not. Id. at 510. Auric sued Crawford, and the circuit court ruled that the lack of privity between Auric and Crawford barred Auric's action for negligence. Id. at 511-12. The supreme court reversed, concluding that Auric had a valid claim against Crawford. Id. at 515.

¶ 11. The Auric court rested its conclusion on the state constitutional right "to make a will and to have it carried out according to the testator's intentions." Auric, 111 Wis. 2d at 513 (citing Will of Wright, 12 Wis. 2d 375, 380, 107 N.W.2d 146 (1961); Estate of Ogg, 262 Wis. 181, 186-87, 54 N.W.2d 175 (1952)). The court reasoned that this right was promoted by allowing will beneficiaries to maintain suits against attorneys who negligently draft or negligently supervise the execution of a will. Id.

¶ 12. In Anderson, 160 Wis. 2d at 870, Mary Jean Anderson was her father's sole heir at law, and thus would have received her father's estate had he died intestate. See also Black's Law Dictionary 727 (7th ed. 1999). However, Anderson's father had a will leaving $1,000 to a church and the balance of his estate to Floyd McBurney. Anderson, 160 Wis. 2d at 872. A previous will had left $1,000 to a church and the balance of the estate to McBurney's mother. Id. McBurney also happened to be a shareholder in the law firm that probated Anderson's father's estate. Id. at 871.

¶ 13. Anderson alleged that McBurney and his firm negligently investigated heirship during probate. Anderson, 160 Wis. 2d at 872. Anderson further alleged that during the probate proceedings, McBurney falsely testified that Anderson's father was not survived by any children. Id. at 871. Finally, Anderson alleged that, as a result of McBurney's negligence, she received no notice of probate and was deprived of an opportunity for a judicial determination of whether her father had unintentionally failed to provide for her in his will. Id. at 872.

¶ 14. Relying on the general rule of Green Spring Farms that an attorney is not liable to third parties for negligent acts committed in the course of an attorney-client relationship, we concluded that Anderson failed to state a valid claim for negligence. Anderson, 160 Wis. 2d at 872-74. We reasoned, "[i]f defendants negligently served their client, the personal representative, that does not give rise to a claim by Anderson, a third party." Id. at 874. We concluded that the Auric exception did not apply to Anderson. Id. at 873. She was not named in either of her father's wills. Id. at 871.

¶ 15. While neither Auric nor Anderson presented an identical issue to that we decide here, we are convinced that the question presented by Appellants' case is more closely analogous to the situation in Anderson than in Auric.

¶ 16. Like the Appellants, the plaintiff in Anderson was unnamed in any will, although the testator had revised his will at least once over the years. Anderson, 160 Wis. 2d at 871-72. Like the Appellants, the only evidence of testator intent Anderson could rely on was extrinsic to any will. In that situation, we interpreted the exception to attorney nonliability to third parties narrowly. Citing Auric, we recognized, "[a]n exception to the Green Spring [Farms] rule exists for beneficiaries named in a will: an attorney may be liable to a named beneficiary who lost a bequest because the will was improperly executed under the attorney's supervision." Id. at 873 (emphasis added).

¶ 17. In Auric, the testator's intent was apparent from a completed will that had merely been executed improperly. Auric, 111 Wis. 2d at 510-11. The Appellants have not alleged that they were ever named in any estate planning document. Thus, unlike in the case before us, in Auric the court could look to an obvious technical error and conclude that "it is clear that this will was intended to bring direct benefit to the plaintiff." Id. at 514. As we explained in Anderson, "[i]f by mistake or accident [Anderson's] father failed to provide for her when he made his will, then she would be entitled to receive her intestate share, but failure to mention her in his will is not in itself evidence of mistake or accident." Anderson, 160 Wis. 2d at 873.

¶ 18. Questions of attorney nonliability to third parties also involve a consideration of public policy. Auric, 111 Wis. 2d at 512. The core concern of the Auric court, "this state's longstanding public policy supporting the right of a testator to make a will and have its provisions carried out," id. at 514, is not promoted by expanding the Auric exception to permit any disappointed potential beneficiary to maintain suit against a drafting attorney. When the only evidence a plaintiff relies on is extrinsic to the estate planning documents, the testator's intentions are at least as likely thwarted as not. Unlike Auric, this case presents a considerable risk that an attorney would be held liable, not for thwarting testator intentions, but for properly carrying them out. Extending the Auric holding would frustrate testator intent and depart from the rationale of the Auric decision.

¶ 19. In addition to protecting testator intent, maintaining narrow limits on attorney liability to third parties named in a will serves other public policies. First, it ensures that attorneys face fewer conflicts of interest in estate planning. Holding attorneys accountable to a nebulous class of third parties who are likely to be more concerned with their own hopes of inheritance than testator intent further compromises the duty an attorney owes to the client. See Auric, 111 Wis. 2d at 513; Barcelo v. Elliott, 923 S.W.2d 575, 578 (Tex. 1996). Second, a bright-line rule limiting the Auric exception to parties who are actually named in a will document facilitates predictability in estate planning. In contrast, allowing malpractice suits in every case where a third party can produce extrinsic evidence of contrary intent would likely result in inconsistent determinations and constant collateral attacks on probate proceedings.

¶ 20. We acknowledge public policy concerns that cut in the other direction. For example, imposing broader liability has been said to make attorneys more careful in carrying out their responsibilities to their clients. Auric, 111 Wis. 2d at 513. Nonetheless, the many advantages of not extending the Auric exception here outweigh the few advantages of a broad extension of the holding of Auric. Moreover, significantly broadening the Auric exception as the Appellants ask would be inconsistent with the holdings and rationale of both Auric and Anderson.

¶ 21. Both parties rely on authority from other jurisdictions, and we may look to foreign jurisdictions when no Wisconsin case is on point. See State v. Frey, 178 Wis. 2d 729, 740, 505 N.W.2d 786 (Ct. App. 1993). The Appellants assert that some jurisdictions allow extrinsic evidence to show testator intent in negligence actions "regardless of whether such intent is indicated in the will document." However, the Appellants cite no authority for this particular proposition. We are convinced that the weight of authority from other jurisdictions supports our decision not to extend the Auric exception to third parties not named in a will.

¶ 22. In Espinosa v. Sparber, Shevin, Shapo, Rosen & Heilbronner, 612 So. 2d 1378, 1380 (Fla. 1993), the Supreme Court of Florida also declined to allow parties not identified in a will to maintain a cause of action against the drafting attorney, even in light of extrinsic evidence of testator intent. The Espi-nosa court concluded as follows:

If extrinsic evidence is admitted to explain testamentary intent, as recommended by the petitioners, the risk of misinterpreting the testator's intent increases dramatically. Furthermore, admitting extrinsic evidence heightens the tendency to manufacture false evidence that cannot be rebutted due to the unavailability of the testator. For these reasons, we adhere to the rule that standing in legal malpractice actions is limited to those who can show that the testator's intent as expressed in the will is frustrated by the negligence of the testator's attorney.

Espinosa, 612 So. 2d at 1380 (emphasis added). Other states have also expressed doubt at relying on evidence extrinsic to will documents in third-party malpractice actions. See, e.g., Mieras v. DeBona, 550 N.W.2d 202, 208-09 (Mich. 1996); Barcelo, 923 S.W.2d at 578.

¶ 23. In sum, we conclude that when a plaintiff is named in an executed or unexecuted will, then she or he has standing to bring a negligence action against the drafting attorney. This rule will continue to hold attorneys accountable for faulty drafting, lack of diligence, or failure to execute wills according to the necessary formalities. In contrast, third parties claiming to be intended beneficiaries based only on evidence extrinsic to a will document are barred from proceeding with malpractice suits against the drafting attorney as a matter of law.

By the Court. — Judgment and order affirmed.

       Kemmeter was a partner at Lathrop & Clark at the time of the January 1996 meeting. Both Kemmeter and Lathrop & Clark carried liability insurance with Wisconsin Lawyers Mutual Insurance Company. Because we conclude that the Appellants have failed to state a claim, we do not reach the question of Lathrop & Clark's liability or amounts payable under the insurance policies.


author: VERGERONT, J.

text:
    Richard R. Rayburn and Rhonda Rayburn, Plaintiffs, v. MSI Insurance Company and Mark Phillips, Defendants, Sheboygan Falls Mutual Insurance Company, Defendant-Appellant, Society Insurance, a Mutual Company, Defendant-Respondent.
    Court of Appeals

      No. 00-0749.

      Submitted on briefs December 7, 2000.

    Decided December 21, 2000.

    2001 WI App 9
    (Also reported in 624 N.W.2d 878.)

      On behalf of the defendant-appellant, the cause was submitted on the briefs of Michael J. Kuborn of Olsen, Kloet, Gunderson & Conway of Sheboygan.
    On behalf of the defendant-respondent, the cause was submitted on the brief of James W. Mohr, Jr. of Mohr & Anderson, S.C. of Hartford.
    Before Vergeront, Deininger, JJ., and Hue, J.

       Circuit Judge William Hue is sitting by special assignment pursuant to the Judicial Exchange Program.

   VERGERONT, J.

¶ 1. The issue on this appeal is the interpretation of a business owner's liability insurance policy that defines the insured, when identified as an individual bn the declaration page, as that individual, "but only with respect to the conduct of a business." Society Insurance issued the policy to Mark Phillips, who was identified as an individual and whose business was identified as "residential carpentry" on the declaration page of the policy. The trial court ruled Phillips was not engaged in the conduct of his business when he was helping his father construct a shed on his father's property, and, therefore, the policy provided no coverage for a neighbor who was injured during the construction allegedly due to the negligence of Phillips. We agree with the trial court's conclusion and therefore affirm.

BACKGROUND

¶ 2. The relevant facts are not disputed. Mark Phillips is the sole proprietor of Phillips Construction, the business of which is building homes. He has no employees. He was helping his father build a shed on bis father's property, along with his brother and a neighbor, Richard Rayburn, when Rayburn was injured. The type of work Phillips did on that date for his father was the same type of work he routinely did in his business. Phillips was not paid for his work on the shed and did not receive anything of value for it. He volunteered his time as a son "on a cooperative family project." Phillips Construction was not hired to do the work, did not send any invoices for the work, and received no compensation for the work. There were no business records at Phillips Construction pertaining to the work on the shed. The only equipment belonging to Phillips that was used in the shed project was a couple of scaffolding planks, a ladder and Skil saw. He owned these personally and had owned them prior to going into business as Phillips Construction.

¶ 3. Phillips' business owner's liability policy from Society Insurance provides in section Al(a) that Society will pay those sums that "the insured becomes legally obligated to pay as damages because of 'bodily injury,' 'property damage,' 'personal injury' or 'advertising injury' to which this insurance applies." Section C provides in part:

WHO IS AN INSURED

1. If you are designated in the Declarations as:
a. An individual, you and your spouse are insureds, but only with respect to the conduct of a business of which you are the sole owner.

The declaration page of the policy names Phillips as the insured, and states the named insured is "Individual" and the business description is "Residential Carpentry."

¶ 4. Rayburn's complaint alleged that Phillips' father and/or Phillips and/or his brother were negligent. The amended complaints also named as defendants Society and Sheboygan Falls Mutual Insur-anee Company, which issued Phillips' homeowner's policy. Both insurers moved for summary judgment, asking for a declaration that their respective policies did not provide coverage and that they had no duty to defend or indemnify Phillips.

¶ 5. The trial court decided Sheboygan Falls homeowner's policy provided coverage but Society's business owner's policy did not. The conclusion of no coverage under Society's policy was based on the court's reasoning that one is not engaged in the conduct of one's business simply because one is performing the type of work one performs in one's business, and Phillips was involved in a personal, volunteer act when the accident occurred.

¶ 6. Thereafter, .the parties reached a settlement and entered into a stipulation and order for dismissal. The stipulation preserved the right of Sheboygan Falls to seek indemnification and/or contribution from Society. Sheboygan Falls appeals the court's judgment declaring that Society's policy does not provide coverage for Phillips.

DISCUSSION

¶ 7. We review the grant or denial of summary judgment de novo and apply the same standards as the trial court. Brownelli v. McCaughtry, 182 Wis. 2d 367, 372, 514 N.W.2d 48 (Ct. App. 1994). Summary judgment is proper if there are no disputed issues of fact and one party is entitled to judgment as a matter of law. Wis. Stat. § 802.08(2) (1997-98). The interpretation of an insurance contract is also a question of law, which we review de novo. Katze v. Randolph & Scott Mut. Fire Ins. Co., 116 Wis. 2d 206, 212, 341 N.W.2d 689 (1984).

¶ 8. We construe the words in an insurance contract as a reasonable person in the position of an insured would understand them. Garriguenc v. Love, 67 Wis. 2d 130, 134-35, 226 N.W.2d 414 (1975). A word or phrase in an insurance contract is ambiguous if it is susceptible to more than one reasonable construction, and whatever ambiguity exists is resolved against the insurer as the drafter. Id. at 135. However, when the terms of a policy are plain on their face, we may not rewrite them. Id.

¶ 9. Sheboygan Falls contends there is more than one reasonable interpretation of the phrase "with respect to the conduct of a business" and the phrase should therefore be construed in favor of the insured. In support of its position, Sheboygan Falls points out there is no definition in the policy of "business" or "conduct of a business," and it is reasonable to interpret the phrase as covering the carpentry services Phillips ordinarily performs in his business capacity whether or not he is paid for them. Sheboygan Falls urges us to look at the activity Phillips was engaging in at the time of the accident and not the fact that he was not paid to build the shed. Society responds that the language in dispute is not ambiguous and plainly applies only to activities that are for the purpose of the business.

¶ 10. At the time the parties submitted their briefs there was no reported Wisconsin case interpreting this policy language. However, we have recently done so in Society Ins. v. Linehan, 2000 WI App 163, 238 Wis. 2d 359, 616 N.W.2d 918, review denied, although the facts there presented a different issue.

¶ 11. In Linehan, the business owner was the sole proprietor of a tavern. He was sued because the dog he owned, which stayed at the tavern, was let outside by an employee and attacked someone. The insurer (also Society) conceded the dog served a business purpose because patrons came to the tavern to see the dog; also, the dog provided some security for the tavern because it slept there at night. However, the insurer argued there was no coverage because the dog was not furthering the purpose of the business when it attacked the person. The business owner contended that the phrase "with respect to the conduct of a business" focused on his activities and the activities of his employees, not the activity of the dog, which was his property. He asserted that his keeping the dog was part of the conduct of his business.

¶ 12. We decided the phrase "conduct of a business" was not ambiguous, although we recognized it was not defined in the policy; we were persuaded by a number of cases in other jurisdictions that held the same phrase was not ámbiguous. Id. at ¶¶ 11-12. We agreed with the business owner that the phrase required that we focus on his activities, not the activities of his dog, which was his property. Id. at ¶ 13. We observed that, based on the cases from other jurisdictions, "conduct is either business or personal." Id. at ¶ 14. We therefore framed the dispositive question as whether the conduct of the business owner and his employees, with respect to the dog, was business or personal. Id. at ¶ 15. Because it was undisputed the dog served a business purpose, we concluded that the owner's keeping of the dog was part of the conduct of his business, and because the injury occurred when an employee temporarily released the dog from the tavern, we concluded the owner was an "insured" as defined in the policy. Id.

¶ 13. Although we held in Linehan that the phrase "conduct of a business" was not ambiguous, we determine ambiguity in the context of the issues and facts before us, and, therefore, the same phrase may be ambiguous in one case but not in another. Seider v. O'Connell, 2000 WI 76, ¶ 43, 236 Wis. 2d 211, 612 N.W.2d 659. This case, unlike Linehan and the cases from other jurisdictions we cited there, is concerned with an activity that is indisputably one engaged in by the business owner in his business; the dispute here centers on whether the activity must, in addition, be engaged in for the purpose of the business. The ques-. tion, therefore, is whether a reasonable person would understand that one is engaged in the conduct of a business only when the purpose of his or her activity is the business.

¶ 14. In arguing to the contrary, Sheboygan Falls fails to focus on the policy language. The language is not "only with respect to activities that are your ordinary business activities," but "only with respect to the conduct of a business of which you are the sole owner." We conclude the language is not ambiguous on this point, because a reasonable person would understand that one is not engaged in the conduct of a business when the activity is not performed for the purpose of the business, even if the activity is one the insured ordinarily engages in as the sole owner of the business.

¶ 15. This construction of the phrase is consistent with the distinction we made in Linehan between business and personal activities and with our focus there on the purpose of owning the dog. In Linehan, the keeping of the dog, we concluded, constituted the conduct of the business because keeping the dog had a business purpose, not a personal purpose. Id. at ¶ 15. In this case, Phillips' activity of helping his father build the shed does not constitute the conduct of his business unless he is performing that activity for the purpose of his business.

¶ 16. Based on the undisputed facts, we conclude Phillips was not acting "with respect to the conduct of [his] business" when helping his father build the shed because he did not do so for the purpose of his business; he did so for the personal reason of helping his father. Phillips' use of a few tools from his business does not alter this conclusion: the use of those tools does not, in this case, alter the purpose of his activity.

¶ 17. We agree with Sheboygan Falls that a sole proprietor may have a business purpose in providing the services of the business without compensation — for example, to build goodwill and thereby gain new customers, to gain experience useful for the business, or for advertising purposes. We do not suggest that receiving compensation for the services of the business is in all cases necessary to constitute "the conduct of the business." However, there is no evidence in this case that Phillips was helping his father build the shed for these or similar purposes.

¶ 18. Sheboygan Falls contends Sprangers v. Greatway Ins. Co., 182 Wis. 2d 521, 514 N.W.2d 1 (1994), supports its position. According to Sheboygan Falls, Sprangers holds that the focus is on the activity rather than the non-profit status of the insured, and this holding supports its position that we should look only at the activity Phillips was engaged in and not its purpose.

¶ 19. The pertinent issue in Sprangers was whether the VFW was "in the business of' selling or serving alcoholic beverages, because the VFW's business insurance policy excluded bodily injury caused by an intoxicated person if the insured was "in the business of manufacturing, distributing, selling, serving or furnishing alcoholic drinks. The plaintiff was injured when his motorcycle was struck by a driver who had been drinking alcohol at a VFW clubhouse. The court concluded the VFW was "in the business of selling . . . [and] . . . serving . . . alcoholic beverages," rejecting the argument that the exclusion did not apply because of the non-profit status of the VFW. Id. at 538. The court reasoned that: (1) the existence of more than one dictionary definition for " business" did not, in itself, render the policy language ambiguous; (2) the nature and purpose of the policy bear on the reasonable expectation of the insured and the terms of the policy showed coverage was tied to the activities of the VFW and not to its non-profit status, since the policy used the term "business" in numerous places to encompass various types of activities; and, (3) exclusions in a liability policy are generally directed to a risk, which results from the nature of the activity, not to the corporate status of the insured. Id. at 537-40.

¶ 20. Other than the use of the word "business," the phrase at issue in Sprangers is not similar to that in this case, and Sprangers teaches we must look to the purpose and terms of the particular policy to decide whether the meaning of that word is ambiguous. The Sprangers court focused on the activities of the insured rather than its non-profit status because of the policy language at issue and its context, not because the use of "business" in every phrase and every context commands an attention to the type of activity engaged in to the exclusion of the activity's purpose. Unlike Sprangers, we are not concerned with whether Phillips Construction is "in the business of residential carpentry. That is undisputed. The dispute here is whether Phillips, the sole owner of the business, was acting "with respect to the conduct of a business" when he used his residential carpentry skills to help his father build a shed. Sprangers provides no support for concluding that Phillips was.

¶ 21. Because Phillips was not an insured within Society's policy definition, the trial court correctly concluded there was no coverage under the policy and Society did not have an obligation to either defend or indemnify Phillips.

By the Court. — Judgment affirmed.

       MSI Insurance Company, which issued a homeowner's policy to Phillips' father, was also named as a defendant. The court determined on motion for summary judgment that there was coverage under its policy for any negligence of Phillips' father, but not for Phillips or his brother.

       All references to the Wisconsin Statutes are to the 1997-98 version unless otherwise noted.