author: SNYDER, J.

text:
    Mary K. Sulzer, Plaintiff-Respondent-Cross-Appellant, v. Mary Susan Diedrich, Defendant-Appellant-Cross-Respondent.
    Court of Appeals

      No. 02-0036.

      Submitted on briefs September 12, 2002.

    Decided October 23, 2002.

    2002 WI App 278
    (Also reported in 654 N.W.2d 67.)

      On behalf of the defendant-appellant-cross-respondent, the cause was submitted on the briefs of John K. Brendel of Brendel Law Offices, Brookfield.
    On behalf of the plaintiff-respondent-cross-appellant, the cause was submitted on the briefs of C. Michael Hausman of C. Michael Hausman & Associates, Ltd., Delafield.

      Before Brown, Anderson and Snyder, JJ.

       Petition to review granted 2-19-03.

   SNYDER, J.

¶ 1. Mary Susan Diedrich (Diedrich) appeals from a judgment awarding Mary K. Sulzer (Sulzer) a money judgment in the amount of $169,482.79. Sulzer, who was married to Frederick Diedrich until September 1989, brought this action for a constructive trust over survivorship benefits distributed to Diedrich, Fred's second wife, after his death. Sulzer claimed that she never received her share of Fred's retirement benefits awarded to her in the divorce judgment, which were then converted to survivorship benefits upon Fred's death and distributed to Diedrich as the named beneficiary of those benefits. The trial court found in favor of Sulzer and awarded her a money judgment.

¶ 2. On appeal, Diedrich argues that the trial court erroneously awarded Sulzer the judgment on the theory of unjust enrichment and that the amount awarded is excessive. Sulzer cross-appeals, also arguing that a money judgment was inappropriate but maintaining that the trial court erred in relinquishing the imposition of a constructive trust over the pension funds in question. We conclude that a money judgment was inappropriate and the trial court erred in vacating the constructive trust. We also conclude that Sulzer should not have earned interest or appreciation on the benefits after Fred died. We remand this matter to the trial court to impose a constructive trust over the appropriate amount of the pension funds as provided in this opinion.

FACTS

¶ 3. Sulzer was married to Fred on September 25, 1976; divorce proceedings were commenced on January-26, 1989, in Waukesha county. A judgment of divorce was granted by Judge Willis J. Zick on September 6, 1989. At the time of the divorce, Sulzer and Fred orally stipulated to the following:

[T]he parties have agreed to divide equally all of [Fred's] interests through the Wisconsin Retirement [S]ystem with the values established as of today's date, and all of [Fred's] interest in his deferred compensation program through the State of Wisconsin.

The judgment of divorce also contained such a written stipulation:

The parties will divide equally all of [Fred's] interest in the retirement, pension, profit sharing, or deferred compensation benefits through the Wisconsin Retirement System or the State of Wisconsin. The deferred compensation plan of [Fred] is presently administered by the Copeland Companies and his retirement benefits are with the State of Wisconsin Retirement System. It is the parties^] intent to have these benefits divided as to their balance on the date of the divorce trial of September 6, 1989, by a Qualified Domestic Relations Order, or an order of the Court having a similar effect.

¶ 4. After the divorce, over the years the trial court began issuing orders seeking a division of the retirement benefits in WRS and Copeland. An order for division of the benefits was issued by Judge Zick on August 17, 1990. A domestic relations order for division of deferred compensation was entered by Judge Zick on February 24, 1993, and an order to divide the WRS benefits was entered by Judge Donald J. Hassin, Jr. on April 6, 1995. Despite these orders, Sulzer was unsuccessful in her attempts to secure division of either WRS or Copeland.

¶ 5. On May 9, 1992, Fred married Diedrich. Shortly after the marriage, on May 22, 1992, Fred executed a "Beneficiary Designation" form listing Diedrich as the primary beneficiary and directing WRS to pay all death benefits due to Diedrich under the WRS program.

¶ 6. On February 8, 1995, Fred died. On March 14, 1995, Copeland denied Sulzer's request for issuance of the benefits because she was not a designated beneficiary; on March 30, 1995, WRS did the same. On April 5, 1995, Diedrich executed a "Beneficiary Designation" form to WRS listing her sister as primary beneficiary of any benefits payable under the WRS program.

¶ 7. On December 20, 1996, Sulzer initiated this action, requesting the imposition of a constructive trust against Diedrich. After numerous delays, postponements and adjournments, on September 18, 2000, the trial court imposed a constructive trust upon all the funds from Copeland and WRS and set a hearing to determine the monetary interest that Sulzer may have had in each of the accounts. However, at an August 8, 2001 hearing, the trial court vacated the constructive trust and awarded Sulzer a money judgment. Diedrich appeals and Sulzer cross-appeals.

DISCUSSION

¶ 8. Diedrich first argues on appeal that a judgment on the grounds of unjust enrichment is inappropriate. Sulzer responds that this was not an action to recover for unjust enrichment but was commenced as an action for a constructive trust. We agree that this action originally began as an action for imposition of a constructive trust and that a constructive trust was initially imposed. However, on August 8, 2001, the trial court unequivocally vacated the constructive trust and awarded Sulzer a money judgment. Unfortunately,, the trial court never supplied any explanation nor provided any legal basis for awarding said money judgment but merely vacated the constructive trust and awarded judgment to Sulzer. Without the benefit of any kind of analysis, we can only assume that the trial court did so on the grounds of unjust enrichment.

¶ 9. A trial court's decision to grant equitable relief in an action for unjust enrichment is discretionary. See Ulrich v. Zemke, 2002 WI App 246, ¶ 8, 258 Wis. 2d 180, 654 N.W.2d 458, review denied, 2003 WI 1, 258 Wis. 2d 108, 655 N.W.2d 128 (Wis. Dec. 20, 2002) (No. 01-2195). Discretionary decisions are sustained if the trial court examined the relevant facts, applied a proper standard of law, and, using a rational process, reached a conclusion that a reasonable judge could reach. Loy v. Bunderson, 107 Wis. 2d 400, 414-15, 320 N.W.2d 175 (1982). Whether the trial court utilized the proper legal standard is a question of law we review de novo. Three & One Co. v. Geilfuss, 178 Wis. 2d 400, 410, 504 N.W.2d 393 (Ct. App. 1993). Additionally, we will not set aside factual determinations made by the trial court unless the findings are clearly erroneous. Wis. Stat. § 805.17(2).

¶ 10. The elements of an unjust enrichment claim are: (1) a benefit conferred upon the defendant by the plaintiff; (2) an appreciation or knowledge by the defendant of the benefit; and (3) acceptance or knowledge by the defendant of the benefit under circumstances making it inequitable for the defendant to retain the benefit without payment of its value. Murray v. City of Milwaukee, 2002 WI App 62, ¶ 16, 252 Wis. 2d 613, 642 N.W.2d 541. We conclude that the elements of unjust enrichment have not been met here.

¶ 11. While Diedrich may have received a benefit (the proceeds from WRS and Copeland), the benefit was not conferred upon her by Sulzer. Nothing Sulzer said or did provided Diedrich with this benefit. The first element of unjust enrichment has not been met here and thus a money judgment on this basis was erroneous.

¶ 12. This matter does not end here, however. Sulzer argues in her cross-appeal that the trial court erred in relinquishing the imposition of a constructive trust over the pension funds. We agree.

¶ 13. A constructive trust is an equitable device created by law to prevent unjust enrichment, which occurs when one party receives a benefit and its retention is unjust to another. Wilharms v. Wilharms, 93 Wis. 2d 671, 678, 287 N.W.2d 779 (1980). A constructive trust is imposed only when legal ownership is held by someone who, in equity and good conscience, should not be entitled to beneficial enjoyment and when ownership was obtained by means of fraud, duress, abuse of a confidential relationship, mistake, commission of a wrong or by any form of unconscionable conduct. Id. at 678-79.

¶ 14. A constructive trust may be imposed against a person who did not participate in the wrongful conduct or even know of the conduct initially. See id. at 679. Mere ignorance of an impropriety does not render the recipient so innocent as to make inappropriate the impression of a constructive trust. Prince v. Bryant, 87 Wis. 2d 662, 670, 275 N.W.2d 676 (1979). If the elements have been satisfied and the person claiming ownership is not a bona fide owner, then a constructive trust may be imposed. Wilharms, 93 Wis. 2d at 679. Whether the facts warrant imposition of a constructive trust is a question of law which we review independently of the trial court. Hendricks v. M.C.I., Inc., 152 Wis. 2d 363, 366, 448 N.W.2d 289 (Ct. App. 1989).

¶ 15. Here, the trial court initially imposed a constructive trust but then vacated it. We conclude that the trial court's initial decision to impose a constructive trust was proper and therefore the trial court erred when it vacated said trust. The divorce judgment, both written and oral pronouncements, clearly expressed both Fred's and Sulzer's intent to divide Copeland and WES, as determined on the date of the divorce, equally. Diedrich obtained title to all of these funds only because Fred, whether by mistake or otherwise, incorrectly named her as the sole beneficiary. Thus, a portion of the pension funds which were allocated to Sulzer in the divorce judgment are being wrongfully held by Diedrich, someone who in equity and good conscience should not be entitled to the beneficial enjoyment of them. The facts here warrant the imposition of a constructive trust and the trial court erred in vacating it.

¶ 16. In her appeal, Diedrich argues that the amount awarded Sulzer was excessive; she specifically argues that the evidence does not support the amount of the award. We agree that the amount awarded in the money judgment exceeds the amount to be placed in a constructive trust.

¶ 17. The funds at issue are no longer retirement benefits that have been sitting in an account accruing earnings but were converted to survivorship benefits that were distributed upon Fred's death on February 8, 1995. Based upon the affidavit of Sulzer's expert, we conclude that Sulzer is entitled to a constructive trust equal to her fifty percent share of the marital portion of the benefits accruing up to February 8, 1995. Because Sulzer would have received this portion upon Fred's death, this is all she is entitled to. She is not entitled to any appreciation after the date of death.

¶ 18. In addition, Sulzer is not entitled to interest on that sum after the date of death. Interest is normally awarded where one party has wrongfully retained use of a second party's money. See Kilgust Heating Div. of Wolff, Kubly & Hirsig, Inc. v. Kemp, 70 Wis. 2d 544, 550, 235 N.W.2d 292 (1975). Here, Diedrich did not wrongfully retain the use of Sulzer's money. We note that Fred died in February 1995 and while Sulzer initiated this action in December 1996, it is because of numerous requests for postponements, adjournments, substitution of attorneys and the like that delay resulted. Because the claim sounds in equity, we conclude that Sulzer is not entitled to interest on her share of the benefits accruing after the date of death.

CONCLUSION

¶ 19. In sum, we conclude that the trial court erroneously awarded Sulzer a money judgment on the theory of unjust enrichment and erred in vacating the constructive trust. We also conclude that Sulzer should have not have earned interest or appreciation on the benefits after the death of Fred on February 8,1995. We remand this matter to the trial court with instructions to impose the constructive trust after determining the appropriate amount of money consistent with this opinion.

¶ 20. Costs are denied to both parties.

By the Court. — On appeal, judgment affirmed in part, reversed in part and cause remanded with directions; on cross-appeal, judgment reversed.

       For the purposes of this appeal, the facts have, for the most part, been gleaned from Sulzer's briefs. On her appeal, Diedrich did not provide any citations to the record to corroborate the facts set out in her briefs. Such failure is a clear violation of Wis. Stat. Rule 809.19(1)(d) and (3) (1999-2000) of the rules of appellate procedure, which requires parties to set out facts "relevant to the issues presented for review, with appropriate references to the record." An appellate court is improperly burdened where briefs fail to consistently and accurately cite to the record. Meyer v. Fronimades, 2 Wis. 2d 89, 93-94, 86 N.W.2d 25 (1957). We therefore hold Diedrich to those facts set forth in Sulzer's brief. All references to the Wisconsin Statutes are to the 1999-2000 version.

       We will refer to the interest in the employee trust fund of the Wisconsin Retirement System as "WRS" and the retirement interest in the City of Waukesha Retirement/Deferred Compensation Plans administered by the Copeland Companies as "Copeland."

       While there is no document in the record that demonstrates Fred also named Diedrich beneficiary of Copeland, a letter from Copeland Companies indicates that Sulzer was not Copeland's named beneficiary. We therefore assume that Fred likewise changed the beneficiary designation with Copeland to Diedrich.

       Sulzer also named Fred's estate as a respondent in this action; the estate responded with a motion to dismiss. There is no formal court action addressing the disposition of this motion or the estate's position in these proceedings; however, Sulzer's trial brief indicates that the parties stipulated to the estate's dismissal from this action with the trial court's approval.


source: Caselaw Access Project

license: Public Domain

text:
    Leonard Chmill, Plaintiff-Respondent, v. Lauderdale Lakes Lake Management District, a/k/a Lauderdale Lakes Protection and Rehabilitation District, Defendant-Appellants.

    Court of Appeals

      No. 02-0475.

      Submitted on briefs September 26, 2002.

    Decided October 23, 2002.

    2002 WI App 285
    (Also reported in 653 N.W.2d 900.)

      On behalf of the defendant-appellant, the cause was submitted on the briefs of Patrick J. Hudec and Gabrielle Boehm of Hudec Law Offices, S.C., East Troy.
    On behalf of the plaintiff-respondent, the cause was submitted on the brief of Berwyn B. Braden of Braden & Olson, Lake Geneva.
    Before Brown, Anderson and Snyder, JJ.

       Petition to review denied 1-14-03.

   SNYDER, J.

¶ 1. Lauderdale Lakes Lake Management District (Lake District) appeals from a judgment granting Leonard Chmill's petition for certiorari relief wherein Chmill alleged that the Lake District did not act according to law when it adopted a tax levy of $32,400 over and in addition to the announced budget of $182,574 for the Lake District. The Lake District argues that the circuit court erred in granting the certiorari petition because all statutory notice requirements were met and once these requirements were met, the electors and property owners had the authority to take any action specified by statute. We disagree that all statutory notice requirements were met and affirm the judgment of the circuit court.

FACTS

¶ 2. The facts are generally undisputed. The Lake District was established by the Walworth county board pursuant to statutory authority. In a publication dated August 20, 2000, entitled District Dialogue, the Lake District announced its annual meeting to take place on September 2, 2000, in the town of LaGrange. The District Dialogue was mailed to all property owners within the district.

¶ 3. In addition, on August 23 and August 30, 2000, the Lake District published a notice containing the meeting agenda and the proposed 2001 budget in the Elkhorn Independent. The District Dialogue reported that programs planned for the next year would be discussed at this annual meeting. The District Dialogue also noted that at the meeting, the Lake District would be asking for approval of the 2001 budget. Furthermore, the District Dialogue stated that some work had been completed on the water safety patrol program and progress on the program would be reported at the annual meeting.

¶ 4. The District Dialogue further contained a two-page summary of the water safety patrol proposal which noted that the Lake District and the town of LaGrange were in discussions relative to the town disbanding its police department and the Lake District assuming control of water safety patrol on the lake. A presentation to the town of LaGrange town board was summarized and stressed the Lake District's ability to handle water safety patrol; the District Dialogue author indicated that water safety patrol was being compromised by a feud between the town police chief and the town. The District Dialogue proposed the following questions to be addressed at the Lake District's annual meeting:

1. Is the lake district community in favor of continuing the pursuit of replacing the town police department with a lake district water safety patrol? We are prepared to accept the financial responsibility of that action.
2. If that vote is favorable, and the town continues to resist dropping their operation, should the district pursue alternative strategies to achieve our goal of increased coverage? There are several options which will be explained at the annual meeting.

¶ 5. On the next page of the District Dialogue, the proposed budget was discussed. The proposed budget called for only a slight increase over the year 2000 budget, $182,574 compared to year 2000's $174,288 budget. The language of the proposed budget explained the reasons for the increase but made no mention of water safety patrol. Nowhere in the District Dialogue or the proposed budget did it mention any amounts for the water safety patrol program.

¶ 6. In the publication notice in the Elkhorn Independent, the same agenda items were listed, including a proposed 2001 budget of $182,574; however, the publication notice did not include any reference to water safety patrol or any amounts to be budgeted for it.

¶ 7. At the annual meeting on September 2, 2000, ballots were distributed with reference to the water safety patrol with boxes where potential voters could vote yes or no. During the meeting, a great deal of discussion addressed water safety patrol. Members of the district board summarized the discussions that had taken place with the town board and then suggested that the Lake District set up a water safety patrol. One of the board members estimated that on an average over a number of years the cost of operating a water safety patrol would be $32,400. Persons present were then asked to vote on whether to adopt the water safety patrol, including approval of the $32,400 budget.

¶ 8. The water safety patrol proposal passed. The treasurer of the Lake District subsequently certified the annual budget to the town of LaGrange town clerk in the amount of $214,974, which included the $32,400 water safety patrol budget, levied and collected against all properties in the Lake District as part of the real estate tax bills sent out in December 2000. On February 28, 2001, Chmill filed a petition for certiorari review challenging the actions of the electors at the annual meeting, including the authority to adopt a tax levy.

¶ 9. The circuit court found that the Lake District's decision to form a water safety patrol and the assessment of a $32,400 tax levy to finance it were void for failure to comply with the notice requirements of Wis. Stat. § 65.90(1) and (3) (1999-2000). The circuit court prohibited the collection of the tax levy or, if already collected, ordered it refunded.

¶ 10. After a motion for reconsideration, the circuit court entered an amended judgment on January 14, 2002, which again held that the action by the Lake District to form a water safety patrol and the assessment of the $32,400 tax levy were void; however, the circuit court withdrew the previous order that the tax levy be refunded. The Lake District appeals.

DISCUSSION

¶ 11. Chmill argues that the Lake District failed to follow the notice requirements of Wis. Stat. § 65.90. The Lake District argues that all statutory notice requirements were met because the provisions of § 65.90 were not applicable to written notices but only to electors at the annual meeting. We disagree with the Lake District.

¶ 12. On certiorari review, the appellate court reviews the decision of the Lake District, not the decision of the circuit court. See Bd. of Regents of Univ. of Wis. v. Dane County Bd. of Adjustment, 2000 WI App 211, ¶ 10, 238 Wis. 2d 810, 618 N.W.2d 537, review denied, 2001 WI 43, 242 Wis. 2d 544, 629 N.W.2d 784 (Wis. Mar. 6, 2001) (No. 99-2662). The scope of our certiorari review is limited to whether the Lake District (1) acted within its jurisdiction; (2) proceeded on a correct theory of law; (3) was arbitrary, oppressive or unreasonable; or (4) might have reasonably made the order or finding it made based on the evidence. Antisdel v. City of Oak Creek Police & Fire Comm'n, 2000 WI 35, ¶ 13, 234 Wis. 2d 154, 609 N.W.2d 464. Furthermore, the interpretation of a statute and its application to a set of facts are questions of law we review de novo. Reyes v. Greatway Ins. Co., 227 Wis. 2d 357, 364-65, 597 N.W.2d 687 (1999).

¶ 13. Wisconsin Stat. ch. 33 addresses public inland waters; Wis. Stat. § 33.30 addresses the annual meeting of lake districts and states, in relevant part:

(2) The annual meeting shall be preceded by written notice mailed at least 10 days in advance of the meeting to all electors within the district and owners of property within the district, whose address is known or can be ascertained with reasonable diligence, and to the department. The district board of commissioners may substitute a class 2 notice, under ch. 985, in lieu of sending written notice to electors residing within the district.

Both parties agree that this section applies to the Lake District and the Lake District must comply with it.

¶ 14. Wisconsin Stat. § 33.30(3) states:

(3) At the annual meeting, electors and property owners shall do all of the following:
(b) Approve a budget for the coming year. The budget shall separately identify the capital costs and the costs of operation of the district, shall conform with the applicable requirements under s. 65.90 and shall specify any item that has a cost to the district in excess of $10,000. (Emphasis added.)

Wisconsin Stat. § 65.90, as provided in § 33.30(3), addresses municipal budgets and states, in relevant part:

(1) Unless otherwise provided, in this section, "municipality" means each county other than counties having a population of 500,000 or more, each city, excepting cities of the 1st class, village, town, school district, technical college district and all other public bodies that have the power to levy or certify a general property tax or budget. Every municipality shall annually, prior to the determination of the sum to be financed in whole or in part by a general property tax, funds on hand or estimated revenues from any source, formulate a budget and hold public hearings thereon.
(2) Such budget shall list all existing indebtedness and all anticipated revenue from all sources during the ensuing year and shall likewise list all proposed appropriations for each department, activity and reserve account during the said ensuing year. Such budget shall also show actual revenues and expenditures for the preceding year, actual revenues and expenditures for not less than the first 6 months of the current year and estimated revenues and expenditures for the balance of the current year. Such budget shall also show for informational purposes by fund all anticipated unex-pended or unappropriated balances, and surpluses.
(3) (a) A summary of the budget required under sub. (1) and notice of the place where the budget in detail is available for public inspection and notice of the time and place for holding the public hearing thereon shall be published as a class 1 notice, under ch. 985, in the municipality at least 15 days prior to the time of the public hearing except that:
1. In towns a summary of the budget required under sub. (1) and notice of the time and place of the public hearing thereon shall be posted in 3 public places at least 15 days prior to the time of the public hearing.
2. Any school district reproducing and providing general distribution within the district of an annual report incorporating a budget summary at least 15 days prior to the annual meeting is exempt from the notice requirements of this paragraph.
3. A common school district, as defined under s. 115.01(3), shall publish a class 1 notice, under ch. 985, as required under this paragraph, at least 10 days prior to the time of the public hearing thereon.
(b) Any budget summary required under par. (a) shall include all of the following for the proposed budget and the budget in effect, and shall also include the percentage change between the budget of the current year and the proposed budget:
1. For the general fund, all expenditures in the following categories:
a. General government.
b. Public safety.
c. Public works.
d. Health and human services.
e. Culture, recreation and education.
f. Conservation and development.
g. Capital outlay.
h. Debt service.
i. Other financing uses.
(bm) Any budget summary created under par. (a) shall include an itemization of proposed increases and decreases to the current year budget due to new or discontinued activities and functions.

¶ 15. In essence, the Lake District argues that Wis. Stat. § 65.90 does not apply here; more specifically, it argues that only § 65.90(2) applies. This argument is without merit. Wisconsin Stat. § 33.30(3)(b) explicitly states a budget must conform with the applicable requirements of § 65.90 and there is nothing in the plain, straightforward language of § 33.30(3)(b) or § 65.90 to intimate the limitation suggested by the Lake District. The question, then, is whether both the requirements of §§ 33.30(3)(b) and 65.90 were followed?

¶ 16. The proposed budget, as provided in the District Dialogue and the Elkhorn Independent, did not specify the water safety patrol budget amount that, at $32,400, was clearly in excess of $10,000. That alone violated the statutory notice requirements of Wis. Stat. § 33.30(3)(b). Furthermore, a proposed budget must comply with the requirements of Wis. Stat. § 65.90, which requires publication at least fifteen days prior to the meeting. Sec. 65.90(3)(a). The first newspaper publication occurred on August 23, 2000, only ten days before the meeting.

¶ 17. The Lake District's own bylaws, whose interpretation must be consistent with Wis. Stat. ch. 33, implicitly recognize this fifteen-day statutory requirement because Article 3, Section 2 requires that same fifteen-day publication prior to the meeting. In addition, the bylaws require that the second publication occur seven days before the meeting. Neither of these requirements of the bylaws was met. Thus, the Lake District violated not only its own bylaws in the notice but also the requirements of Wis. Stat. §§ 33.30 and 65.90.

¶ 18. The Lake District provides several alternative explanations for why Wis. Stat. § 65.90(3) does not apply here, none of which, have any merit. The Lake District argues that § 65.90 does not apply because it does not have the power to levy or certify a general property tax or budget. However, the Lake District is clearly levying a tax and even calls it such in its records.

¶ 19. The Lake District also argues that Wis. Stat. § 65.90 does not apply because § 65.90(3) includes budget summary requirements involving items it would not handle such as health and human services or public works. While it is true that some of those items would not apply to the Lake District, some of them would such as public safety or conservation and development. That is the very reason Wis. Stat. § 33.30(3)(b) indicates that the Lake District must conform with the applicable requirements of § 65.90.

¶ 20. In addition, the Lake District implicitly argues that a class 2 notice for publication was acceptable; however, the Lake District cites no authority for this proposition. Pursuant to Wis. Stat. § 33.30(2), the district board of commissioners may substitute a class 2 notice in lieu of sending written notice to electors residing within the district. This does not allow use of a second class notice instead of a first class notice but merely allows the Lake District to send a second class notice in lieu of sending written notice. Here, the Lake District actually sent written notice so use of a second class notice would have been redundant. In any event, the Lake District's own bylaws require written notice to be followed by publication twice in a paper of general circulation fifteen days and seven days prior to the meeting.

¶ 21. The Lake District further argues that Wis. Stat. § 33.30(3)(b) requires that only at the actual meeting itself does the budget have to specify any item with a cost in excess of $10,000 and thus since this matter was raised at the meeting, it sufficiently specified the cost. This is contrary to the plain language of the statute. Section 33.30(3)(b) explicitly states: "At the annual meeting, electors and property owners shall. . . [a]pprove a budget for the coming year." The statute next requires that this budget must not only "separately identify the capital costs and the costs of operation of the district" but must also "conform with the applicable requirements under s. 65.90" which entails the necessary notice requirements. Sec. 33.30(3)(b). The Lake District cannot argue that merely mentioning the $32,400 cost at the meeting satisfies the notice requirements of §§ 33.30 and 65.90.

CONCLUSION

¶ 22. We reject the Lake District's argument that all statutory notice requirements were met and conclude that the Lake District's decision to form a water safety patrol and the assessment of a $32,400 tax levy to finance it were void for failure to comply with the notice requirements of Wis. Stat. §§ 33.30 and 65.90. We affirm the judgment of the circuit court.

By the Court. — Judgment affirmed.

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

       Chmill filed but later voluntarily dismissed a cross-appeal in this matter.

       A district is defined as a "public inland lake protection and rehabilitation district." Wis. Stat. § 33.01(3).


author: CANE, C.J.

text:
    Gary Hanson, Kathy Hanson and Federal Foam Technologies, Inc., Plaintiffs-Respondents-Cross-Appellants, v. Prudential Property & Casualty Insurance Company, Defendant-Appellant-Cross-Respondent.

    Court of Appeals

      No. 02-0019.

      Submitted on briefs October 7, 2002.

    Decided October 29, 2002.

    2002 WI App 275
    (Also reported in 653 N.W.2d 915.)

      On behalf of the defendant-appellant-cross-respondent, the cause was submitted on the briefs of Shawn M. Raiter of Larson King LLP of St. Paul, MN.
    On behalf of the plaintiffs-respondents-cross-appellants, the cause was submitted on the briefs of
      Timothy T. Sempf and Jason W. Whitley of Novitzke, Gust, Sempf & Whitley of Amery.
    On behalf of the Wisconsin Academy of Trial Lawyers, the cause was submitted on the amicus curiae brief of Robert L. Jaskulski of Domnitz, Mawicke & Goisman, S.C. of Milwaukee.
    Before Cane, C.J., Hoover, EJ., and Peterson, J.

       Petition to review dismissed 12-2-02.

   CANE, C.J.

¶ 1. Prudential Property and Casualty Insurance Company appeals a judgment declaring its reducing clause unenforceable. Prudential sought to enforce a reducing clause contained in Gary Hanson's underinsured motorist (UIM) policy and limit its liability to $25,000 based on payments Hanson received from the underinsured motorist's insurer. The circuit court denied Prudential's motion, determining the policy was ambiguous and the reducing clause unenforceable.

¶ 2. On appeal, Prudential contends the circuit court erred in this determination and argues its UIM coverage is not ambiguous based on the relevant statutory and case law involving UIM reducing clauses. The Hansons cross-appeal, arguing Prudential is barred from enforcing the reducing clause because it failed to raise the issue on a prior summary judgment motion, which Prudential also appealed. We conclude both the reducing clause itself and the policy as a whole failed to clearly inform Hanson as to the amount of UIM coverage he was purchasing and therefore affirm the judgment. As a result, we do not address the Hansons' cross-appeal.

BACKGROUND

¶ 3. The facts are undisputed. In September 1995, Gary Hanson was injured in an automobile accident. He was not at fault and settled with the tortfeasor, Thomas Pietz, for Pietz's automobile insurance liability limit of $150,000. Hanson's damages, however, exceeded this limit and he sought coverage under his Prudential UIM policy, which provided $100,000 coverage for each person injured in an accident involving an underinsured motorist. On cross-motions for summary judgment, the trial court determined Hanson (1) qualified for UIM coverage under a "damages basis" definition of under-insured motorist in a prior version- of his Prudential policy and (2) was entitled to stack his UIM coverage. Prudential appealed, and we affirmed the trial court's determination of the "damages basis" definition but reversed the decision allowing Hanson to stack his coverage. See Hanson v. Prudential Prop. & Cas. Ins. Co., 224 Wis. 2d 356, 367-71, 591 N.W.2d 619 (Ct. App. 1999).

¶ 4. After the appeal, Prudential offered Hanson $25,000 to settle his UIM claim, based on a reducing clause in his UIM policy. After Hanson refused the offer, Prudential filed a declaratory judgment motion to determine its liability under the policy. The circuit court denied Prudential's request, finding the policy's UIM coverage "misleading, confusing, arguably contradictory, and . . . therefore ambiguous with regard to UIM coverage limits." Prudential appeals. Hanson cross-appeals, arguing Prudential is barred from asserting the reducing clause because it failed to do so on summary judgment.

DISCUSSION

¶ 5. The construction or interpretation of an insurance policy presents a question of law we review de novo. Hull v. State Farm Mut. Auto. Ins. Co., 222 Wis. 2d 627, 636, 586 N.W.2d 863 (1998). If the language in an insurance policy is unambiguous, we must not rewrite the policy by construction. See Dowhower v. West Bend Mut. Ins. Co., 2000 WI 73, ¶ 34, 236 Wis. 2d 113, 613 N.W.2d 557. If the policy is ambiguous, we must construe these ambiguities in favor of coverage. Id. When construing ambiguous language, we attempt to determine what a reasonable person in the position of the insured would have understood the policy's words to mean. Id. at ¶ 35.

¶ 6. Reducing clauses in UIM policies are authorized by Wis. Stat. § 632.32(5)(i). This statute reads:

(5) PERMISSIBLE PROVISIONS. . . .
(i) A policy may provide that the limits under the policy for uninsured or underinsured motorist coverage for bodily injury or death resulting from any one accident shall be reduced by any of the following that apply:
1. Amounts paid by or on behalf of any person or organization that may be legally responsible for the bodily injury or death for which the payment is made.
2. Amounts paid or payable under any worker's compensation law.
3. Amounts paid or payable under any disability benefits laws.

¶ 7. UIM reducing clauses are valid if "the policy clearly sets forth that the insured is purchasing a fixed level of UIM recovery that will be arrived at by combining payments made from all sources." Doyohower, 2000 WI 73 at ¶ 33. Recently, in. Badger Mut. Ins. Co. v. Schmitz, 2002 WI 98, 647 N.W.2d 223, our supreme court clarified the analysis for determining the validity of UIM reducing clauses. There, the court determined a UIM reducing clause is not valid merely because its terms are unambiguous and it complies with Wis. Stat. § 632.32(5)(i). See id at ¶¶ 48-49. Rather, the clause must be "crystal clear in the context of the whole policy." Id at ¶ 46. If the coverage provided is misleading and unclear, the policy is ambiguous or worse, and the reducing clause is not enforceable. Id. at ¶ 49.

¶ 8. Hanson's thirty-three-page policy consists of declarations, five coverage parts, and a set of Wisconsin-specific provisions. The declarations list the UIM coverage limits for bodily injury to each person at $100,000 and for each accident at $300,000. At the bottom of the first and the top of the second declaration pages, the following statement appears: "Your policy is made up of your application, your most recent Declarations, and the forms and endorsements listed below. Forms and endorsements being made part of your policy with this transaction are provided in separate booklets or are indexed and reproduced on pages which follow." Below this statement on the second page of the declarations, the following are listed: (1) PAC 186, which is policy parts one, two, and three, (2) PAC 226 WI, which is the special state provisions, and (3) PAC 190/WI, which is policy parts four and five.

¶ 9. Policy part one contains the general provisions. This includes a provision titled "DECLARATIONS" that reads:

The Declarations is an important part of this policy. It lists the named insured and describes the cars this policy covers. Refer to the Declarations to see which parts of the policy apply and what amounts of insurance you have for each of your cars. You only have the coverage for which a specific premium charge is shown for the coverage. You will receive a Declarations when the policy is first issued, each time a change is made and at each renewal.

¶ 10. Below the "DECLARATIONS" provision is a paragraph entitled "ENDORSEMENTS." It reads:

Endorsements are part of this policy. They add to, delete, or change parts of the policy. They may be necessary to conform to the laws of your state or to new programs we have implemented. Only those Endorsements whose numbers appear on the Declarations are part of your policy.

¶ 11. The general provisions also contain a "LIMIT OF COVERAGE," that reads in relevant part, "If you or any other person insured under this policy is in an accident: 1. In a car that is insured by this policy — We will not pay more than the limit of coverages for that particular car." Under the terms of the special state provisions in PAC 226 WI, this section does not apply to part four of the policy, the uninsured motorists coverage (UM).

¶ 12. The UIM coverage is listed in part five, which begins on page twenty-four of the policy. The first clause of part five, listed under a heading "OUR OBLIGATIONS TO YOU," reads:

UNDERINSURED MOTORISTS COVERAGE
If you have this coverage (see the Declarations), we will pay up to our limit of liability for bodily injury that is covered under this part when an insured (whether or not occupying a car) is struck by an underinsured motor vehicle. Our payment is based on the amount that an insured is legally entitled to recover for bodily injury because:
THE OWNER OR DRIVER IS UNDERINSURED
The owner or driver responsible for the accident has liability insurance or a liability bond in an amount that is less than the limits shown for this coverage on the Declarations.

¶ 13. Part five also limits the liability for bodily injury suffered by each person through the following clause:

The limit stated under UNDERINSURED MOTORISTS — EACH PERSON on the Declarations is the limit of our liability less all amounts recovered for all damages, including damages for care or loss of services, arising out of bodily injury to one person as a result of any one accident.

¶ 14. The policy limits this liability further through the reducing clause found on the last page of PAC 226 WI, which is also the last page of the policy. It reads:

The limit of liability for this coverage will be reduced by any amounts paid by the person responsible for the accident. The limit of liability for this coverage will also be reduced by an amount paid under any other source; however, in no event will the limit of liability be reduced below the Financial Responsibility Limit.

¶ 15. Part four of the policy, the uninsured motorists coverage, contains a similar "limit of liability" clause as part five. The only difference is that it lacks the "less all amounts recovered" language found in the UIM limit. In addition, PAC 226 WI applies an identical reducing clause to part four.

¶ 16. Prudential argues the reducing clause and the rest of the policy are unambiguous and would inform a reasonable insured that his or her UIM coverage would be arrived at by a combination of sources. Accordingly, Prudential seeks to enforce the reducing clause and limit its liability to $25,000, which was the financial responsibility limit at the time of the accident. We agree, however, with the trial court's determination that the policy is ambiguous, confusing, misleading and contradictory and, therefore, hold the reducing clause unenforceable.

¶ 17. At the outset, we determine the reducing clause does not comply with Wis. Stat. § 632.32(5)(i). The public policy of this state, as reflected in this statute, is to allow insurers to reduce UIM liability only by amounts paid to the insured by or on behalf of persons or organizations legally responsible for the injury suffered, or by worker's compensation or disability benefits law. See Wis. Stat. § 632.32(5)(i); Dowhower, 2000 WI 73 at ¶ 20. The reducing clause in Prudential's UIM coverage reduces liability by any amounts paid by the person responsible for the accident or "paid under any other source." This goes beyond the permissible reducing sources allowed by the statute. A UIM policy with a reducing clause must clearly inform the insured he or she is "purchasing a fixed level of UIM recovery that will be arrived at by combining payments made from all sources." Id. at ¶ 33. "All sources," however, can only include the three listed in the statute. Prudential's policy, by saying the insured's UIM coverage would be reduced by payments from any and every source, rather than the three allowed by statute, does not clearly inform the insured of the level of UIM coverage actually purchased.

¶ 18. The preceding analysis presumes a reasonable insured would be able to find and understand the effect of the reducing clause within the context of the entire policy. We cannot say this is the case. Even if the reducing clause conformed to Wis. Stat. § 632.32(5)(i), it is not "crystal clear" within the context of the whole policy. See Schmitz, 2002 WI 98 at ¶ 46.

¶ 19. In Schmitz, the supreme court invalidated a reducing clause that, while complying with Wis. Stat. § 632.32(5)(i), was ambiguous when the policy was considered as a whole. Id. at ¶ 61. There, the court examined the entire policy, tracing the route the insured would have to take from the declarations through the UIM portion and to the endorsement containing the reducing clause. Id. at ¶¶ 62-66. The policy did not mention its UIM coverage in its declarations, nor did the declarations alert the insured he or she would never receive from the insurer the whole limit of the UIM coverage stated in the declarations. Id. at ¶ 62. In addition, the section in the policy containing the UIM limits did not inform the insured these limits would be paid by combining sources. Id. The only section that possibly explained the effect of the reducing clause was a statutorily required notice that informed insureds to disregard it if they had purchased UIM coverage. Id. at ¶¶ 66-68. The supreme court described the policy as "organizationally complex and plainly contradictory," and held the reducing clause unenforceable. Id. at ¶ 72.

¶ 20. We encounter similar problems when we trace the path the insured would have to take through the policy to understand Prudential's UIM coverage. The declarations, while listing the amount of UIM coverage, do not mention that the coverage is subject to further limitations. The only arguable sign pointing to the reducing clause is the language at the bottom of the first page and the top of the second page saying the policy is made up of the declarations, forms and endorsements. Under the description of "DECLARATIONS" in the general provisions, the policy states an insured should refer to the declarations to determine the insured's level of coverage. Nothing in this description suggests the UIM coverage will be paid based on other amounts paid to the insured.

¶ 21. Further, the description of "ENDORSEMENTS" in the general provisions provides endorsements "add to, delete, or change parts of the policy." This could potentially inform the insured to read the endorsements, where he or she would eventually find the reducing clause. However, the endorsements, found in PAC 226 WI, are not labeled as endorsements, merely as "Special State Provisions." The declarations list the forms and endorsements comprising the policy, but do not say which is which. In addition, the general provisions do not define forms. A reasonable insured would not know what constitutes the policy's endorsements as compared with its forms and would be unable to determine which sections limit others.

¶ 22. Even if the insured were to determine PAC 226 WI contained the endorsements, he or she would be presented with conflicting terms of coverage. The "LIMIT OF COVERAGE" in the general provisions states Prudential will not pay more than the limit of coverage if an insured person is injured in an insured car. In part five, however, the insurance company's liability for bodily injury to each person is limited to the amount listed under "Underinsured Motorist — Each Person" in the declarations, "less all amounts recovered for all damages." This language seems to function as a reducing clause as well, but even if we ignore it, the reducing clause found in PAC 226 WI limits Prudential's liability by amounts the insured receives from any source. The "LIMIT OF COVERAGE" in the general provisions and part five's liability limits modified by the reducing clause found in PAC 226 WI set up two conflicting levels of coverage, and the policy, by not clearly labeling what constitutes the endorsements, does not allow the insured to resolve this conflict.

¶ 23. As noted, it appears part five contains two reducing clauses, one in the limit of liability for bodily injury to each person and the other inserted from PAC 226 WI. The first clause limits Prudential's liability to the amount listed in the declarations "less all amounts recovered for all damages." This clause, like the one found in PAC 226 WI, is beyond the scope of Wis. Stat. § 632.32(5)(i), and similarly does not clearly inform an insured about the level of coverage he or she is purchasing.

¶ 24. Further, the "less all"amounts recovered for all damages" language is missing from other limit of liability sections in the UIM coverage, including the UIM "each accident" limitation directly below the each person limit. Reading the "each person" and "each accident" clauses together suggests liability will be reduced only when the each person limitation applies. The reducing clause found in PAC 226 WI only compounds the confusion by limiting all UIM liability using a differently worded clause. If we are unsure how to reconcile "less all amounts recovered for all damages" with "an amount paid by any other source," we cannot expect a reasonable insured to do it.

¶ 25. If an insured were to come to the conclusion that the part five liability limits and reducing clause serve to reduce Prudential's UIM coverage from its overall statement of coverage found in the general provisions, he or she would very likely be confused by the clause in PAC 226 WI that says the "LIMIT OF COVERAGE" in the general provisions does not apply to part four. Part four contains the policy's uninsured motorists coverage. It has a similar limit of liability section as the UIM coverage. In addition, part four and part five have identical reducing clauses. The only possible reason we can discern for excluding the general "LIMIT OF COVERAGE" from part four is to avoid confusion between the two different liability structures. The UM liability structure, however, is very similar to the UIM's. A reasonable insured would be confused about why only part four is exempted, adding to the difficulty in reconciling the general coverage with the reduced UIM liability.

¶ 26. Prudential relies primarily on our decision in Sukala v. Heritage Mut. Ins. Co., 2000 WI App 266, 240 Wis. 2d 65, 622 N.W.2d 457, to support its claim its policy is unambiguous. Sukala, however, must be distinguished. In Sukala, we enforced two UIM reducing clauses. Id. at ¶ 13, ¶ 14, In one policy, the first paragraph of the form containing the UIM coverage told the insured that provisions within the policy restricted coverage. Id. at ¶ 12. Further, on the endorsement containing the reducing clause, the first line after the title said the endorsement modified the form containing the UIM coverage. Id. The other policy did not originally contain UIM coverage. Id. at ¶ 13. Instead, all the provisions were listed within the endorsement, which stated in large capital letters: "This endorsement changes the policy. Please read it carefully. Underin-sured Motorists Coverage." Id. Both reducing clauses mirrored Wis. Stat. § 632.32(5)(i). Id. at ¶ 12, ¶ 13.

¶ 27. Here, Prudential's policy does not comply with the statute, but exceeds its permissible scope. Further, the Sukala endorsements were clearly labeled and informed the insured of their effect. Prudential's policy does neither. PAC 226 WI is not marked specifically as an endorsement, nor does the actual document clearly state its effect. Instead, the insured would have had to refer to the definition of endorsement in the general provisions to determine the effect, which is of little help when the policy does not clearly state what constitutes the endorsements.

¶ 28. Prudential also relies on Taylor v. Greatway Ins. Co., 2001 WI 93, 245 Wis. 2d 134, 628 N.W.2d 916, and Hinrichs v. American Fam. Mut. Ins. Co., 2001 WI App 114, 244 Wis. 2d 191, 629 N.W.2d 44, in which the supreme court and this court, respectively, enforced UIM reducing clauses. Specifically, Prudential argues the circuit court ignored the dictates of these cases, along with Sukala and Dowhower, in reaching its decision. Prudential does not, however, make any argument why the specific decisions in Taylor or Hinrichs require us to conclude that its policy is unambiguous and we will not develop this argument for it. See State v. Gulrud, 140 Wis. 2d 721, 730, 412 N.W.2d 139 (Ct. App. 1987). Instead, we are satisfied our decision here follows the requirement, found in all these cases, that a UIM policy containing a reducing clause must clearly inform the insured he or she is buying a predetermined amount of insurance that will be arrived at by combining payments from the permissible other sources. Prudential's policy does not do this.

¶ 29. The policy requires the insured to leap too many hurdles in the form of assumptions and guesses. Prudential contends ail insurance policy does not become ambiguous merely because the process of cross-referencing the declarations and limiting provisions may be complex. Sukala, 2000 WI App 266 at ¶ 14. While this is true, Prudential's policy goes well beyond cumbersome page-flipping and clause substitution. An insured would have to make guesses regarding which parts of the policy are which and reconcile conflicting clauses in order to understand that his or her UIM coverage will be determined by combining amounts received from other sources. While it is true an insured might work his or her way through the policy, after doing so the insured would still not know the extent of his or her UIM coverage. The reducing clause's effect is not crystal clear in the context of the whole policy. See Schmitz, 2002 WI 98 at ¶ 46. We therefore conclude the UIM language is ambiguous and we must construe the policy in favor of coverage. Because our decision resolves this matter, we do not address Hanson's cross-appeal. See Sweet v. Berge, 113 Wis. 2d 61, 67, 334 N.W.2d 559 (Ct. App. 1983).

By the Court. — Judgment affirmed.

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

       Hanson recovered $150,000 from the tortfeasor, exceeding his $100,000 in UIM coverage. Even if the reducing clause is enforceable, Prudential must still pay the financial responsibility limit.


text:
    William Poluk, Personal Representative of the Estate of Millie Fusfeld, Plaintiff-Respondent, v. J.N. Manson Agency, Inc. and General Insurance Company of America, Defendants-Appellants.
    Court of Appeals

      No. 02-0486.

      Submitted on briefs September 30, 2002.

    Decided October 29, 2002.

    2002 WI App 286
    (Also reported in 653 N.W.2d 905.)

      On behalf of the defendants-appellants, the cause was submitted on the briefs of Bruce A. Olson of Davis & Kuelthau, S.C. of Green Bay.
    On behalf of the plaintiff-respondent, the cause was submitted on the brief of James A. Higgins of Byrne, Goyke, Tillisch & Higgins, S.C. of Wausau.
    Before Cane, C.J., Peterson and Curley, JJ.
   CANE, C.J.

¶ 1. J.N. Manson Agency, Inc., and General Insurance Company of America appeal a judgment entered on a jury verdict finding Manson liable to the Estate of Millie Fusfeld for negligence while acting as the Estate's insurance agent. Manson argues the trial court erred when it submitted the issue of Manson's negligence to the jury. The court determined Manson should have informed the Estate's agent about the vacancy clause and further clarified the coverage the Estate sought when the agent informed Manson the building was being sold and its tenant was leaving. Manson argues it had no duty to inquire further to determine if coverage was needed in the event of a vacancy, and we should therefore reverse the trial court's judgment. In the alternative, Manson argues if it did have this duty, the evidence established at trial was insufficient to trigger the duty. In addition, Manson requests a new trial based on two evidentiary errors. Manson contends the trial court erred when it (1) admitted a portion of Fusfeld's will that showed the building's sale proceeds would go to local charities and (2) refused to allow Manson to introduce a letter from the Estate's attorney contending the building was not vacant at the time it burned.

¶ 2. We determine the trial court did not err by determining Manson had a duty to inform the Estate of the vacancy clause and by further clarifying the extent of the Estate's requested coverage. Further, there was sufficient evidence for the jury to conclude the duty had been triggered. In addition, although the trial court erred by admitting Fusfeld's will, we conclude the error was harmless. Finally, we determine the trial court did not err by refusing to admit the letter because it correctly concluded it was irrelevant. We therefore affirm the trial court's judgment.

BACKGROUND

¶ 3. Millie Fusfeld died on March 17,1999. Part of her estate included a building located in downtown Wausau that she and her husband, who died in 1984, had owned for over forty years. The Fusfelds had operated a clothing store in the building and later, a bridal store. Eventually, they closed their business and leased the building. At the time of Millie's death, the tenant was a business called the Bridal Boutique.

¶ 4. William Poluk, Millie's brother, was appointed the personal representative of her estate. Poluk lived in Mississippi, where Millie was also living at the time of her death. Patricia Pagel, a Wausau resident and longtime employee of the Fusfelds, took care of Millie's business affairs in Wausau after Millie moved to Mississippi. One of her responsibilities was arranging the building's insurance coverage and paying the premiums.

¶ 5. The Fusfelds had purchased the building's fire and liability insurance through Manson for more than twenty years before Millie's death. In 1989, Manson obtained the building's policy from Traveler's Property Casualty Insurance Company. The policy was renewed annually and limits increased based on inflation. A clause excluded coverage for losses if the building was vacant for sixty days prior to the loss. Pagel had paid the annual premium for at least five years before Millie's death. She did not change the coverage during these five years, and Millie did not ask her to.

¶ 6. After Millie's death, the Estate placed the building for sale. Poluk retained Pagel to assist him with the estate, essentially continuing her duties involving the building. The Estate offered the Bridal Boutique a right of first refusal on the building, which it declined, and the Bridal Boutique said it planned to close the business at the end of October 1999. Although the tenant planned to have its property out of the building by then, it requested a few extra weeks to remove its merchandise, which the Estate allowed.

¶ 7. Pagel received the policy's renewal notice in November 1999. The Estate's attorneys suggested she look into establishing month-to-month coverage so the coverage could be easily terminated when the building was sold. At trial, Pagel said she called Manson to make this inquiry and spoke with a representative named Sharon. During the conversation, Pagel told Sharon the building was being sold and the tenant was in the process of leaving. When she requested month-to-month coverage, Pagel said Sharon told her she should pay the entire premium and when the sale closed, the Estate would receive a pro rata refund. Pagel testified Sharon told her the building would be covered.

¶ 8. In February 2000 a fire destroyed the building. Traveler's denied coverage based on the vacancy clause. The Estate brought suit, challenging the denial and alleging negligence and misrepresentation by Manson. It also brought suit against General Insurance, Manson's omissions and errors insurer. After initial discovery, Traveler's moved for summary judgment based on the vacancy clause, and the trial court granted the motion, determining there was no dispute the building was vacant for sixty days before the fire.

¶ 9. Manson also moved for summary judgment, contending it owed no duty to the Estate to inquire further and determine whether the building needed coverage in the event of a vacancy. The trial court denied the motion, concluding a duty existed because it was alleged Pagel informed Manson of the potential vacancy. At trial, the parties disputed whether Pagel's conversation with Sharon ever took place. In addition to Pagel's testimony, the Estate offered a note she had written memorializing the conversation. The note did not contain a reference to any discussion about vacancy. The agency's only employee named Sharon said she did not recall speaking with Pagel, nor did the policy's file show any record of a telephone conversation with Pagel.

¶ 10. The Estate also introduced Millie's will and had Pagel read the clause disposing of the proceeds of the building's sale. The will provided the proceeds would fund two scholarships, one for the nursing program at a technical college and the other for a music scholarship at a local conservatory. Manson brought a motion in limine seeking to preclude this testimony and renewed its objection at trial, arguing the evidence was irrelevant and prejudicial. The court denied the motion and the subsequent objection.

¶ 11. Manson also sought to admit a letter from the Estate's attorney while cross-examining the Estate's expert. The letter was to Traveler's and maintained the building was not vacant at the time of the fire. Manson sought to use it to impeach the witness, who claimed there was no question the building was vacant. The trial court denied the request because the summary judgment affidavits had established that the building was vacant at the time of the fire.

¶ 12. Although the Estate requested instructions on misrepresentation and negligence, the court only instructed the jury on negligence. The jury found Manson and Pagel causally negligent and apportioned the negligence ninety-nine percent to Manson and one percent to Pagel. Prior to trial, the parties had stipulated to the Estate's damages. Manson filed post-trial motions, all of which the court denied. Manson now appeals.

DISCUSSION

A. Duty of Insurance Agency

¶ 13. We first address Manson's contention it owed no duty to the Estate. In order to sustain a claim for negligence, a plaintiff must show a duty owed by the defendant. Lenz Sales & Serv. v. Wilson Mut. Ins. Co., 175 Wis. 2d 249, 254, 499 N.W.2d 229 (Ct. App. 1993). The question of an insurance agent's duty to an insured presents an issue of law we decide de novo. Id. An insurance agent has the duty to act in good faith and carry out the insured's instructions. Nelson v. Davidson, 155 Wis. 2d 674, 681-82, 456 N.W.2d 343 (1990). This duty does not, however, impose the affirmative obligation, absent special circumstances, to advise a client regarding the availability or adequacy of coverage. Id. at 685.

¶ 14. Here, the trial court determined that if Pagel did inform Manson that the building's tenant was vacating, then Manson had a duty to inquire further in order to provide coverage for the building, as Pagel had requested. The court reasoned because Pagel sought coverage for the building until it was sold, and because Manson should have considered the possibility the building would be vacant for at least sixty days before the sale, Manson should have informed Pagel the current policy could be inadequate and should have asked for more information from Pagel. We agree. Pagel testified that in her conversation with Sharon, she requested coverage for the building until it was sold and said the building's tenant would be leaving during this time. If this conversation took place, Manson, with knowledge of the vacancy clause, should have asked Pagel whether the building would be vacant when the tenant left and should have asked other questions about the particular circumstances in order to obtain adequate coverage for the building.

¶ 15. Manson relies on several cases to support its argument that it had no duty to alert Pagel to the vacancy clause. Most notably, it points to our supreme court's decision in Sprangers v. Gateway Ins. Co., 182 Wis. 2d 521, 514 N.W.2d 1 (1994). In Sprangers, the court determined an insurance company had no duty to inform the insured, a VFW post, of the policy's liability exclusion for insureds "in the business of selling alcoholic . . . beverages." Id. at 527-28, 548. The court, applying the law of insurance agent liability, ruled the insurer had no duty to inform the post of the exemption because it was a common clause in liability contracts and the VFW as a tavern operator, should have been aware of this. Id. at 547-48. The insurer, the court held, had no duty to anticipate "what liabilities the VFW expected a policy to cover or to identify which exclusions in the policy the VFW may have deemed important." Id. at 548. Similarly, Manson argues it has no duty to anticipate what coverage the Estate expected.

¶ 16. Here, Pagel sought continued coverage for the building. Her comment that the tenant was leaving should have alerted Manson that the vacancy clause might then exempt the building from coverage. From this, Manson would have known what Pagel expected the policy to cover and what exclusions she deemed important. This knowledge of the insured's desires is what is missing from Sprangers and is why no duty was imposed there.

¶ 17. Nor do we find support for Manson's position in the other Wisconsin cases it cites. For instance, in Nelson, the supreme court determined there was no obligation for an insurance agent to inform insureds about the availability of uninsured motorist coverage. Nelson, 155 Wis. 2d at 685. In that case, the plaintiff allegedly requested the "best coverage." Id. at 684. She did not, however, show that at the time she made the request, her insurer offered UM coverage or that she wanted her coverage to continue being the "best" throughout the time she insured with the company. Id. at 684-85. Here, Pagel told Manson she needed coverage and the building's tenant was leaving. This information created Manson's obligation to make a further inquiry so Manson could determine whether the vacancy clause would be triggered. Unlike Nelson, where the insureds never said anything suggesting they might want UM coverage, here Manson had knowledge about the insured's situation that required further inquiry.

¶ 18. Manson also relies on our decision in Lenz. There, we determined an insurance agent had no duty to advise insureds to seek higher coverage. Lenz, 175 Wis. 2d at 257. In Lenz, the insureds bought a policy for the replacement value of their store, which at the time was $18,500. When their store was destroyed several years later, it was still insured for that amount, but valued much higher. Id. at 253. The insureds argued their agent had a duty to advise them to increase their amount of coverage based on the value of their store. Id. at 254. We disagreed, and held the agent complied with what the insureds had requested, a policy for the replacement value of their store. Id. The focus of Lenz is that the agent did exactly what the insureds asked him to do, based on the information presented. Here, Manson should have made a further inquiry based on the information Pagel offered and the existence of the vacancy clause.

¶ 19. Finally, in Lisa's Style Shop v. Hagen Ins. Agency, 181 Wis. 2d 565, 511 N.W.2d 849 (1994), the supreme court determined an insurance agent had no duty to advise the insured to increase its coverage limits. In that case, the agent found a less expensive policy offering the same coverage and switched without telling the insured. Id. at 575-76. The new policy offered a peak season endorsement allowing the insured to collect an additional twenty-five percent above the policy limits if the insured's inventory was damaged at those times of the year when the inventory was at its peak. Id. at 570. In order to take advantage of this, however, the insured had to insure its entire inventory for its full value. Id. Under the previous policy, the insured had $36,000 in coverage, less than the inventory's value, and this is what the agent obtained under the new policy as well. Id. The insured argued the agent should have informed her of the endorsement and advised her to increase her policy. Id. at 574. The supreme court disagreed, concluding the agent had only done what the insured had asked, obtain $36,000 in coverage. Id. at 576-77. Again, the focus of Lisa's Style Shop is that the agent did exactly what he was asked. What distinguishes Lisa's Style Shop, Lenz, and Nelson, is the information Pagel provided. Pagel wanted to continue coverage on the building until it was sold, and told Manson the tenant was leaving. This, along with Manson's knowledge of the vacancy clause, created an obligation for further inquiry. Because Manson did not make this inquiry, it breached its duty to the Estate.

¶ 20. We note our approach is consistent with that of Illinois. In National Blvd. Bank v. Brokerage Res., Inc., 356 N.E.2d 988 (Ill. App. 1976), the Illinois Court of Appeals held that an insurance agent had a duty to secure a vacancy endorsement on a policy insuring a building being remodeled. Id. at 989. There, the insureds informed their agent they were planning on remodeling their apartment building, and the agent obtained coverage. Id. The building burned down and the insurers denied coverage based on the policy's vacancy provisions. Id. Although the parties disputed whether the insureds told the agent the building would be vacant, the court determined the issue was irrelevant because whether the building would be vacant was material to the insurance risk and the agent had a duty to inquire. Id. at 990-91. Although learning a building is being remodeled arguably alerts an insurance agent to the possibility of vacancy under any circumstances, we are satisfied in this case that hearing the building was being sold and the tenant was leaving should have alerted Manson to the possibility of vacancy as well.

¶ 21. Manson also argues the conversation between Pagel and Sharon, if it happened, was insufficient to establish a duty. Pagel told Sharon the tenant would be leaving prior to the end of November, the building was going to be placed for sale, and the Estate wanted the building insured. This information, along with the knowledge the policy had a vacancy clause, is what triggers the duty. Upon hearing the tenant was leaving, Manson should have inquired whether the building would be vacant for more than sixty days prior to being sold, and explained the consequences to Pagel.

¶ 22. Manson argues imposing a duty based on the information Pagel provided violates public policy. The question of whether a duty exists is essentially a policy determination. Nelson, 155 Wis. 2d at 679. Manson argues an insurance agent should not be expected to take on the role of real estate agent and inquire into all the potential occupancy conditions that could affect coverage. It contends the information Pagel told Sharon did not alert Manson the building would be vacant, but merely that a tenant was moving out. Manson argues by establishing this duty, an insurance agent would be forced to investigate all possible leaseholds through lengthy and costly record searches.

¶ 23. This is not our holding. An insurance agent's duty is to obtain the insurance sought by the insured. When Pagel told Sharon the Estate wanted coverage until the building was sold and that the tenant was leaving, this should have raised a red flag because of the existence of the vacancy clause, and Manson should have inquired further. While we do not expect insurance agents to be clairvoyant, when they are presented with information suggesting an exemption clause might he triggered in a policy being renewed, they have a duty to inquire further. To hold otherwise would be to absolve the agent of their duty to obtain the insurance requested by the insured.

B. Sufficiency of the Evidence

¶ 24. Manson next argues the trial court erred by not granting his motion after trial challenging the sufficiency of the evidence. Even if a duty exists, Manson argues, the evidence did not establish a violation. We review a trial court's decision on a motion challenging the sufficiency of the evidence de novo, applying the same standards. See Richards v. Mendivil, 200 Wis. 2d 665, 670, 548 N.W.2d 85 (Ct. App. 1996). The test for determining the sufficiency of the evidence is set forth in Wis. Stat. § 805.14(1). We must first consider all credible evidence and all reasonable inferences that can be made from it in the light most favorable to the party against whom the motion is made. If, after this examination, no credible evidence exists to sustain the finding, we must overturn it. Richards, 200 Wis. 2d at 670.

¶ 25. Here, Manson argues Pagel's testimony did not contain adequate information to trigger the duty. Manson contends the evidence establishing what Pagel said to Sharon is short on details, specifically, Pagel not giving the actual date of the vacancy, not mentioning the building was for sale, and not using the words tenant and vacant. Pagel's direct examination testimony regarding the contents of the telephone call was:

Q: What did you say to Sharon?
A: I told Sharon that the Bridal Boutique was - quit business at the end of October, and that the building was in the process of being sold, and that they were in the process of moving out their merchandise, and I wanted to know if I would be covered, or if she had a month-to-month insurance policy that would be covered for us.
Q: Let's talk about that month-to-month inquiry that you made. What did you say to her in that regard?
A: That the building was in the process of being sold and, well, I didn't know when. And rather than paying it for the full year premium, if it was possible that there was a premium, that that would be just for a month-to-month basis, if they had anything like that.
Q: Do you remember anything else that you said to Sharon during that conversation?
A: No. She just answered my questions, really.
Q: Did you ask her if you would be covered?
A: Yes.
Q: If you paid the full year premium?
A: Yes.
Q: And what did she say?
A: She said yes, that we would ....

¶ 26. Pagel also produced a note memorializing the phone conversation. We determine this note and the description of the phone conversation properly allowed the jury to conclude Manson failed to use reasonable skill and care when putting the coverage into effect. See Wis JI — Civil 1023.6. Manson argues Pagel was required to give the exact details for the duty to be triggered. The agent's duty, however, is to inquire once the insured reveals information that could affect a coverage exclusion. Here, Pagel testified she told Sharon the building was for sale, the tenant was in the process of leaving, and she wanted the building insured. If the jury accepted Pagel's testimony, then it could have properly determined Manson breached its duty.

¶ 27. In addition, the testimony of the Estate's expert, Leroy Utschig, supports the jury's verdict. Ut-schig testified Pagel's informing Manson the building was going to be sold and the tenant was leaving created a duty for Manson to inquire further to determine if the building would actually be vacant or to secure additional coverage for the insured. Manson's expert said Pagel had to have been more specific in her conversation to trigger a duty to inquire. The weight and credibility given to these experts is an issue solely for the jury, as is its resolution of the information Pagel communicated to Manson. See Reiman Assocs., Inc. v. RIA Adver., Inc., 102 Wis. 2d 305, 318, 306 N.W.2d 292 (Ct. App. 1981). If the jury accepted Pagel's testimony, it could have concluded Pagel gave enough information to trigger Manson's duty.

C. Evidentiary Issues

¶ 28. Finally, we address Manson's claim the trial court erred when it admitted portions of Millie's will and when it refused to admit the letter from the Estate's counsel to Traveler's. We review a trial court's decision to admit or exclude evidence under an erroneous exercise of discretion standard. Morden v. Continental AG, 2000 WI 51, ¶ 81, 235 Wis. 2d 325, 611 N.W.2d 659. We will affirm the trial court's decision if the court examined the relevant facts, applied a proper legal standard and reached a reasonable conclusion using a demonstrated rational process. Martindale v. Ripp, 2001 WI 113, ¶ 28, 246 Wis. 2d 67, 629 N.W. 2d 698.

¶ 29. We first address the will's admission. The testimony came in through Pagel, who read part of the will. Manson objected to the testimony prior to the trial and renewed its objection when Pagel testified. The Estate offered the testimony as evidence of Pagel's credibility, arguing because she would not receive anything under the will, her testimony should be more believable. Manson argued the evidence's prejudice far outweighed its value in probing Pagel's credibility because the jury would find out any damages awarded would all go to charity if the Estate won.

¶ 30. Ruling on Manson's motion, the court said:

Anyway, then the other thing is that we were talking at the final pretrial about the fact that Pat Pagel who is the party here who has stated that she called Manson Insurance Agency, or whatever did happen, and the plaintiff wants to show for credibility purposes that she was not, and is not a beneficiary of the will. Mr. Olson objects to the will going in because the will actually shows that all of the proceeds of the will and beneficiaries are basically charities.
And there again, my opinion is to let the will go in, because I think that even though the beneficiaries are not involved in the lawsuit, the plaintiff is the personal representative of the estate, and it's the personal representative's job by law to gather all of the assets for the estate to the best of his ability. And therefore, he could be sued by the beneficiaries. So he's got to do it. That's his recommendation.

¶ 31. We agree with Manson and conclude the trial court erroneously exercised its discretion by admitting the will. Manson argued admitting the will would be prejudicial. The proper legal standard, then, is for the court to balance the will's probative value and its prejudicial impact pursuant to Wis. Stat. § 904.03. The record shows the court did not engage in this balancing and therefore erroneously exercised its discretion in admitting the will.

¶ 32. Nonetheless, we conclude the error was harmless. Under a harmless error analysis, we will reverse only where there is a reasonable possibility that the error contributed to the final result. State v. Britt, 203 Wis. 2d 25, 41, 553 N.W.2d 528 (Ct. App. 1996). In making this determination, we weigh the effect of the inadmissible evidence against the totality of the credible evidence supporting the verdict. Id. An error is harmless if there is no reasonable possibility that the error affected the outcome of the trial. State v. Roller, 2001 WI App 253, ¶ 62, 248 Wis. 2d 259, 635 N.W.2d 838.

¶ 33. Most of the testimony in this case involved the existence and the contents of Pagel's telephone call and testimony from several insurance agents regarding their professional duties and standards of care. While much of this was disputed, there is enough evidence to support the jury's verdict. We cannot say there is a reasonable possibility the error affected the jury's verdict. The jury did not know the amount of money at stake, and our review of the record does not disclose any attempt by the Estate to argue the jury should decide in the Estate's favor to benefit the charities. Instead, the record reflects the Estate only used the will in an attempt to bolster Pagel's credibility. Further, we note Manson rejected the trial court's offer of a limiting instruction prior to the trial. Any prejudice Manson may have suffered was greatly outweighed by the evidence supporting the verdict.

¶ 34. Manson also argues it should have been allowed to introduce a letter from the Estate's attorneys to Traveler's in which the attorneys contested Traveler's claim the building was vacant. The letter had been sent after the Estate brought suit, but prior to the summary judgment motions, and contested Traveler's denial of coverage. The trial court refused to admit the letter at trial, determining it was irrelevant because the court had determined, as a matter of law, that the building was vacant when it burned. We agree.

¶ 35. Manson sought to introduce the letter to impeach the Estate's liability expert, who testified the building's vacancy was not an issue, saying "everybody accepted the building was vacant." Manson argued the letter showed it was an issue. The witness's testimony, however, was that Traveler's and Manson had always contended the building was vacant, not that all the parties had agreed. His testimony focused on an insurance agent's standard of care, and his statement was part of that discussion. The letter, as the court noted, was part of the Estate's challenge to Traveler's coverage denial, and would not be relevant to impeach the witness regarding his opinion of an insurance agent's standard of care. The trial court properly excluded the letter.

By the Court. — Judgment affirmed.

       At trial, the parties disputed whether Pagel ever called Sharon and what Pagel said if she did. In part B of this opinion, we determine there was sufficient evidence for the jury to find Pagel told Sharon the building was being sold and the Bridal Boutique was leaving. For the purpose of determining Manson's duty to the Estate, we will assume Pagel told Sharon this information in their conversation.

       All statutory references are to the 1999-2000 version unless stated otherwise.