author: SCHUDSON, J. WEDEMEYER, EJ.

text:
    Austin J. Fox, a minor, by Matthew T. Fricker, guardian ad litem, Plaintiff-Appellant, v. Catholic Knights Insurance Society, a Wisconsin corporation, Defendant-Respondent.

    Court of Appeals

      No. 01-1469.

      Submitted on briefs February 6, 2002.

    Decided April 9, 2002.

    2002 WI App 117
    (Also reported in 649 N.W.2d 307.)

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Matthew T. Fricker of Kersten & McKinnon, S.C., of Milwaukee.
    On behalf of the defendant-respondent, the cause was submitted on the brief of Michelle M. Stoeck of Hills Legal Group, Ltd., of Waukesha.
    Before Wedemeyer, RJ., Fine and Schudson, JJ.

       Petition to review granted 7-29-02.

   SCHUDSON, J.

¶ i. Austin J. Fox, by his guardian ad litem, Matthew T. Fricker, (Fox) appeals from the circuit court's amended order granting summary judgment to Catholic Knights Insurance Society (CKIS), denying his motion for summary judgment, and dismissing his complaint on the merits and with prejudice. Fox argues that the circuit court erred in concluding that the CKIS life insurance policy for his father, Patrick Fox, had not taken effect by the time Patrick died in a car accident. Fox contends, therefore, that the court erred in granting summary judgment upholding CKIS's denial of his claim for $150,000 under the policy for which Patrick had applied.

¶ 2. We conclude that under the unusual circumstances of this case, and by operation of Wis. Stat. § 631.11(3) (1999-2000), Patrick's policy was in effect at the time of his death even if a blood test was a condition precedent to the activation of the policy, even though Patrick died before having that test, and even though a blood test could only have been performed on the blood that had been drawn from Patrick following his fatal accident. Accordingly, we reverse.

I. BACKGROUND

¶ 3. The facts relevant to resolution of this appeal are undisputed. According to the complaint and summary judgment submissions, on May 21, 1997, Patrick Fox completed a CKIS "Application For Membership And Life Insurance" for a $150,000 term life insurance policy, naming Austin, then two years old, as the primary beneficiary for benefits payable upon Patrick's death. Also on May 21, 1997, Patrick paid CKIS $31.94 for the first premium.

¶ 4. The application included a section titled, "Receipt For Payment and Conditional Insurance Agreement," which provided, in relevant part:

A. Coverage Amount.
The amount of insurance that is in effect by this Agreement for each Proposed Insured is the amount shown in the application ....
B. Coverage Limitations.
2. No coverage shall be in force if the person(s) proposed to be insured is not a risk insurable in accordance with CKIS rules ....
C. When Coverage Begins (subject to the Limitations in section B above)
Coverage under this Agreement begins on the latest of the following dates:
—The date of this application
—The date of this Agreement
' —The effective date specifically requested in the application
—The date of completion of all examinations and medical studies required by the rules and practices of CKIS.

(Underlining added; bold and italics in original.)

¶ 5. The application also included a section titled, "Agent's Report," containing questions for the insurance agent completing the form with the applicant, and concluding with a subsection stating: "Check medical requirements ordered." There followed four options, allowing the agent to indicate whether "Exam," "Blood," "EKG," and/or "Urine Specimen" was required. On Patrick's application, the agent entered an "x" in only the ’Yes" box for "Blood."

¶ 6. Patrick was scheduled to have his blood drawn on May 30,1997. He cancelled that appointment, however, and rescheduled for the afternoon of June 6, 1997. Tragically, in the early morning hours of June 6, Patrick died as a result of massive head and face trauma suffered in a car accident. Shortly after his death, Washburn County Coroner Karen Baker drew a sample of his blood, which was forwarded to the Wisconsin State Laboratory of Hygiene.

¶ 7. CKIS refused to pay any death benefit. Fred W. Muenkel, CKIS Vice President for Member Services, wrote Patrick's father, Bernard Fox, explaining, in part:

Although [Patrick] did have a blood draw scheduled prior to his death, he canceled the blood draw and did not have one done prior to his death. The application process and the need for a blood draw was [sic] fully explained at the time of application and the application includes a signed acknowledgement of such procedures and requirements. Because of the failure to obtain the necessary blood draw, the life insurance policy never took effect.

As a result, CKIS refunded the initial premium payment to Patrick's estate, but denied insurance coverage.

¶ 8. On August 19, 1997, at Patrick's father's request, Attorney Thomas Graham wrote Vice President Muenkel, enclosing a July 29,1997 letter from the Washburn County District Attorney to Patrick's parents regarding the sample of Patrick's blood drawn following the fatal accident and retained by the Laboratory of Hygiene. Attorney Graham's letter concluded, in relevant part:

On behalf of Bernard Fox and the Estate of Patrick Fox, I would ask that you use that blood sample to determine the insurability of Patrick Fox on May 21, 1997. I would ask that you make arrangements with the Wisconsin State Crime Lab for shipment of that blood sample to whatever testing facility or medical facility you wish to use to determine Mr. Fox's insur-ability. If you need assistance in doing so, I would be happy to assist you.

¶ 9. On August 26,1997, Vice President Muenkel responded with a letter declining Attorney Graham's request to contact the state laboratory to obtain the blood sample. In his letter, Mr. Muenkel provided a lengthy explanation for CKIS's conclusion that "no policy was ever in place for [Patrick] Fox before he died." In part, he wrote:

[M]ost importantly, [the agent] states that he gave Mr. Fox a Receipt for Payment and Conditional Insurance Agreement which clearly states that coverage will [not] begin until "the date of completion of all examinations and medical studies required by the rules and practices ofCKIS."
The Catholic Knights Rate Book... specifies that a blood profile is a routine requirement for all applications for coverage in excess of $99,999. Mr. Fox applied for $150,00[0] in coverage, and, therefore, a blood profile was a condition of our Conditional Insurance Agreement form, without which a final decision for insurance coverage could not be made. The rate [b]ook explains that the blood profile is to be done by one of our paramedical providers, with a complete analysis done according to our prescribed protocol by Osborne Laboratories.
The agent... attests that he fully explained the terms of the Conditional Agreement to Mr. Fox, including the requirement that a blood draw would be needed from Mr. Fox before coverage could become effective ....
... The purpose of the blood profile is to determine insurability of an applicant. Clearly, a deceased person is not insurable. Therefore, a blood draw from a deceased person cannot be used to determine insurability.

¶ 10. Fox brought an action alleging breach of contract under the application and/or the conditional insurance agreement. Resolving the case on cross-motions for summary judgment, the circuit court stated that it had "struggled with it back and forth" but ultimately concluded that section C, "When Coverage Begins," established that coverage had not begun and that Patrick "died before the policy began."

II. DISCUSSION

¶ 11. Summary judgment methodology is used to determine whether a legal dispute requires a trial. U.S. Oil Co. v. Midwest Auto Care Servs., Inc., 150 Wis. 2d 80, 86, 440 N.W.2d 825 (Ct. App. 1989). A circuit court must enter summary judgment when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Wis. Stat. § 802.08(2).

¶ 12. Reviewing an order granting summary judgment, we apply the same methodology employed by the circuit court. Doe v. Archdiocese of Milwaukee, 211 Wis. 2d 312, 332, 565 N.W.2d 94 (1997). Accordingly, we will reverse a summary judgment decision only when "the record reveals that one or more genuine issues of material fact are in dispute or the moving party is not entitled to judgment as a matter of law." Strasser v. Transtech Mobile Fleet Serv., Inc., 2000 WI 87, ¶ 30, 236 Wis. 2d 435, 613 N.W.2d 142.

¶ 13. The interpretation of an insurance contract presents a question of law we review de novo. Tower Ins. Co. v. Chang, 230 Wis. 2d 667, 672, 601 N.W.2d 848 (Ct. App. 1999), review denied, 2000 WI 36, 234 Wis. 2d 177, 612 N.W.2d 733. Statutory construction also presents a question of law subject to our de novo review. Gloudeman v. City of St. Francis, 143 Wis. 2d 780, 784, 422 N.W.2d 864 (Ct. App. 1988). Here, examining the conditional insurance contract and applying Wis. Stat. § 631.11(3), we conclude that CKIS was not entitled to judgment as a matter of law and, indeed, that Fox was.

¶ 14. At first blush, section C of the Conditional Insurance Agreement, specifying when coverage begins, would seem to preclude coverage because Patrick, by the time of his death, had not reached "completion of all examinations and medical studies required by the rules and practices of CKIS." In this case, however, Wis. Stat. § 631.11(3) trumps what otherwise might be the preclusive effect of that provision.

¶ 15. Wisconsin Stat. §-631.11(3) provides:

Effect of failure of condition or breach of promissory warranty. No failure of a condition prior to a loss and no breach of a promissory warranty constitutes grounds for rescission of, or affects an insurer's obligations under, an insurance policy unless it exists at the time of the loss and either increases the risk at the time of the loss or contributes to the loss. This subsection does not apply to failure to tender payment of premium.

(Emphasis added.) To avoid the statute's impact, an insurer has the burden to prove that the "failure of a condition prior to a loss" affects its obligations under the policy. See Comment to Wis JI — Civil 3105 (1994) (On issues relating to Wis. Stat. § 631.11(3), "[t]he burden of proof is upon the insurance company as to all questions and it is the middle burden."). Here, while the "failure of a condition" — completion of the blood test and required medical studies — existed at the time of the loss, it did not "contributed to the loss," and CKIS did not prove that it "increase [d] the risk at the time of the loss."

¶ 16. Obviously, the failure to complete the blood test and related medical studies did not contribute to the loss. Patrick was killed in a car accident, unrelated to his failure to complete the test.

¶ 17. Further, CKIS did not prove that the failure to complete the blood test and related medical studies increased the risk at the time of Patrick's death. Had Patrick's blood been drawn before the accident, CKIS could have arranged for analysis of his blood to determine whether he was, in the words of the conditional agreement, "a risk insurable in accordance with CKIS rules." Only if the medical study of Patrick's blood revealed something that rightfully reduced his insur-ability would "the risk at the time of the loss" have been increased. See Wis. Stat. § 631.11(3); see also Wis JI— Civil 3105 (1994) (providing, in part, that under Wis. Stat. § 631.11(3), "[r]isk is increased whenever the chance of loss is increased by a failure of the condition").

¶ 18. Indeed, CKIS's summary judgment submissions clarified this very point. According to the affidavit of Emma Santiago, a senior underwriter for CKIS:

The blood and urine test results are used to determine a number of factors which impact the underwriting decision on a life insurance policy including, but not limited to, tobacco usage, indications of liver disease, diabetes, kidney function and drug usage.
An adverse finding in the blood or urine sample can materially affect the underwriting decision either by increasing the premium rating or by declination to extend coverage.
Without a reliable blood and urine sample from the applicant, [CKIS] is unable to complete the underwriting process in accord with its standards and guidelines.

¶ 19. Thus, analyzing the blood drawn following Patrick's fatal accident could have enabled CKIS to determine whether his insurability would have been affected by any condition, detected through blood testing, that "increase [d] the risk at the time" of his death. See Wis. Stat. § 631.11(3). But not performing the analysis precluded CKIS from determining whether a failure to complete "all examinations and medical studies required by the rules and practices of CKIS," under section C of the conditional contract, would have prevented the detection of a condition that would have "increase [d] the risk at the time" of Patrick's death. See Wis. Stat. § 631.11(3).

¶ 20. Nevertheless, CKIS presents two intriguing fact-based theories that, if correct, could counter our analysis. One theory, however, substantially misrepresents the record; the other, while more supportable, still fails.

¶ 21. First, in its brief to this court, CKIS writes that it "required both a blood and urine sample as a condition to commencement of the coverage subject to a determination of insurability," and that "no urine sample as required for this level of insurance was ever submitted." The documentary record, however, refutes CKIS's contention that Patrick's conditional contract required a urine sample. While the Santiago affidavit states that "[w]ithout a reliable blood and urine sample from the applicant, [CKIS] is unable to complete the underwriting process in accord with its standards and guidelines," and while the agent's affidavit stated that he told Patrick that "the terms of the Conditional Insurance Agreement required that a blood and urine specimen be collected and analyzed before coverage could become effective," Patrick's contract required only a blood test. (Emphases added.) As noted, on Patrick's application, the agent did not enter an "x" indicating that "Urine Specimen" was among the "medical requirements ordered."

¶ 22. Second, CKIS argues that Patrick's postmortem blood sample would not satisfy its requirements. CKIS relies on the affidavit of Dr. Charlotte Lee, Senior Vice-President and Medical Director of Osborne Laboratories, an independent testing laboratory that "performed blood and urine analysis tests for [CKIS] life insurance applications," who stated that "the postmortem blood sample collected from Patrick ... would not have been a useful sample in rendering reliable test results required by [CKIS] for its underwriting requirements." She explained, "Since the blood sample was uncentrifuged, the chemical constituents would have become altered over the period of time between death and the date the specimen was made available for re-testing." Thus, she concluded, the laboratory results from testing the sample "would not be accurate for insurance testing purposes." We are not persuaded.

¶ 23. Even if, as Dr. Lee opined, Patrick's blood sample was "uncentrifuged" and "would not be accurate for insurance testing purposes," nothing in Patrick's contract conditioned his insurability on any specific timing or methodology for the "medical studies." Notably, while the summary judgment submissions suggested that blood analysis was to be done "according to [CKIS] prescribed protocol by Osborne Laboratories," CKIS concedes that "the Conditional Insurance Agreement does not require that the medical studies be conducted while the applicant is living." And most significantly, any possible inaccuracy in the study of uncentrifuged blood "for insurance testing purposes" punctuates the point: with or without post-mortem blood testing, CKIS simply could not prove that Patrick's failure to provide a blood sample before his death "increase[d] the risk at the time of the loss," under Wis. Stat. § 631.11(3).

¶ 24. Thus, CKIS, by insisting that a urine sample was needed and required, and by claiming that only a "centrifuged" blood sample would have served its purposes, anchors its appellate theories in factual quicksand. We may not assist CKIS by adding conditions to its contract. See Brown v. Equitable Life Ins. Co. of Iowa, 60 Wis. 2d 620, 630, 211 N.W.2d 431 (1973) (considering case involving "insurability" as a "condition precedent" to insurance coverage, appellate court does not have "the power to create a new contract for the parties"). And CKIS may not deny coverage based on what, ultimately, emerges as its own failure to even attempt to perform the medical studies its conditional contract required. See Variance, Inc. v. Losinske, 71 Wis. 2d 31, 40, 237 N.W.2d 22 (1976) ("[A] party may not take advantage of a failure of a condition when it has unjustifiably prevented that condition from taking place."); see also Brown, 60 Wis. 2d at 627 (life insurance applicant's death does not eliminate insurer's obligation to complete good faith investigation to ascertain whether applicant was "insurable as a standard risk" so as to determine insurer's liability under conditional receipt); Smith v. N. Am. Co. for Life & Health Ins., 775 F.2d 777, 778 (7th Cir. 1985) (where life insurance applicant died during time of application processing, insurer "was duty-bound to complete its investigation, and if the investigation had shown that [the applicant] (if he had survived) would have been contractually entitled to the issuance of the insurance policy on which he paid the first premium," insurer would have owed applicant's beneficiaries face value of policy).

¶ 25. Therefore, under the unusual circumstances of this case, the "date of completion" language of section C was not triggered and did not postpone the commencement of coverage. Patrick's coverage began, under the express terms of section C, on "[t]he date of this application" and "[t]he date of this Agreement": May 21, 1997 — sixteen days before his death. Accordingly, we conclude that the circuit court erred in granting CKIS's motion for summary judgment; we reverse and remand for the entry of an order granting Fox's motion for summary judgment.

By the Court. — Order reversed and cause remanded with instructions.

WEDEMEYER, EJ.

¶ 26. (dissenting). I write separately from the majority because I believe the trial court correctly ruled that Wis. Stat. § 631.11(3) does not apply to this case, and that because the blood was not drawn from Patrick until after he died, the life insurance policy did not go into effect.

¶ 27. This is a significant case in the development of insurance law as it is the first Wisconsin case to interpret Wis. Stat. § 631.11(3). I conclude that the majority has incorrectly interpreted the statute. Although the unusual and unfortunate circumstances presented in this case generate sympathy for Patrick and his family, our decision cannot be influenced by those circumstances, but must be decided by the language of the statute and the language of the insurance provisions involved. There is an old saying that "tough cases make bad law," and I fear that is what will happen here if this case is published.

¶ 28. As noted, our review on a summary judgment decision, the interpretation of a statute, and the interpretation of an insurance contract present issues of law, which this court reviews independently.

¶ 29. I agree with the trial court that Wis. Stat. §631.11(3) does not trump the contractual provisions involved because it does not apply under the circumstances presented by this case. This statutory section applies to conditions after the insurance policy comes into effect. Because the insurance policy here never went into effect, § 631.11(3) does not apply.

¶ 30. My conclusion is supported by four separate sources. First, the statutory language itself suggests that for the requirements under the statute to apply, there must be an insurance policy in effect. See Wis. Stat. § 631.11(3) ("No failure of a condition ... affects the insurer's obligations under {an insurance] policy....") (emphasis added). Second, the jury instructions and comment on this statute clearly imply that the statute only applies after a policy is in effect. The instructions use two examples of the "condition" referred to in the statute. The first was the insured's "failure to have a night watchman on the premises" and the second was where the insured stored inflammables on the premises. Wis JI — Civil 3105. The comment states that the "condition" the statute refers to is one "that require [s] that something shall or shall not be done after the policy takes effect." Id. (Emphasis added). The instructions/comment suggest that the "condition" referred to in § 631.11(3) is not a condition precedent, which must occur before the policy takes effect. Rather, the "condition" under the statute is an event that takes place after the contract has come into being.

¶ 31. My third source is the legislative history behind the statute. The legislative committee comments to Wis. Stat. § 631.11(3) explain:

This draft seeks a better balance, protecting the insurer against fraud and violations of conditions that would preclude acceptance of the risk, and giving [the insurer] access to the information it needs to underwrite, without giving it arbitrary power over the insured through application of the harsh common law doctrines.

¶ 32. Fourth, a Wisconsin federal court faced with this issue concluded that this statute does not apply to the situation where a policy is not yet in effect due to failure of a condition precedent. LaBonte v. Connecticut Gen. Life Ins. Co., 723 F. Supp. 392, 395 (E.D. Wis. 1989) (the "condition" referred to in the statute applies to conditions that occur after the policy takes effect, not before).

¶ 33. This is, in my view, the more reasonable interpretation of the statute and the only interpretation that comports with common sense. It would lead to absurd results to conclude that the statute applies to conditions required before a policy goes into effect. Taking such a premise to its logical conclusion, an applicant could indefinitely postpone required medical examinations and secure life insurance without affording the insurer any opportunity to evaluate the risk or the insurability of the applicant. In fact, the majority points out that the insurance company did not set forth any "specific timing" for the medical studies. Majority at ¶ 23. This was entirely within the potential insured's control. The majority's conclusion will eliminate an insurance company's ability to underwrite the risk that it is to assume in all cases where an insurance applicant postpones or repeatedly delays submitting to required medical studies. There is no reason to infer that Wis. Stat. § 631.11(3) was intended to remove an insurer's ability to perform effective underwriting.

¶ 34. Having concluded that the language of the statute does not apply, the analysis turns to the language at issue in the contract. Here, the conditional agreement provided that coverage would not begin until "[t]he date of completion of all examinations and medical studies required by the rules and practices of CKIS." Thus, the life insurance contract did not come into being until Patrick completed the required medical studies. "If a condition is attached to the contract's coming into being, there is as yet no contract." Kocinski v. Home Ins. Co., 147 Wis. 2d 728, 738, 433 N.W.2d 654 (Ct. App. 1988) (citation omitted), aff'd, 154 Wis. 2d 56, 452 N.W.2d 360 (1990).

¶ 35. Although there is some dispute whether both a urine test and a blood test were required or whether only a blood test was required, that dispute is immaterial because neither test occurred before Patrick died. The trial court made an important distinction when ruling on this matter. It stated that the required medical exam — a blood draw — was not completed until after Patrick died. If Patrick's blood had been drawn before he died, according to the language of the policy, coverage would have gone into effect. Thus, this case was distinguishable from Brown v. Equitable Life Insurance Co., 60 Wis. 2d 620, 211 N.W.2d 431 (1973) because Mr. Brown completed all the medical examinations that were required before he died. Id. at 625. Thus, the insurance company in Brown had the necessary information to underwrite the risk.

¶ 36. That was not the case here. It is undisputed that Patrick understood he had an obligation to submit to the blood draw and that the coverage would not be effective until that time. Patrick did not complete the blood draw before his death and, therefore, coverage never went into effect. The majority suggests that the insurance company should have attempted to perform the required tests using the blood drawn from Patrick's body post-mortem. Majority at ¶ 19.1 disagree. It was Patrick's responsibility to submit to a blood test in the manner prescribed by the insurance company. Moreover, the insurance company submitted an expert affidavit attesting that it would not be able to perform the necessary tests on the post-mortem blood because the chemical components of the blood would have changed and become insufficient for underwriting requirements.

¶ 37. The majority also states that the insurance company "could not prove that Patrick's failure to provide a blood sample before his death ’increase[d] the risk at the time of the loss,'" as required by Wis. Stat. § 631.11(3). Majority at ¶ 23. This statement reveals another reason why § 631.11(3) cannot apply to medical studies required as conditions precedent before an insurance policy becomes effective. If the insured applicant dies before completing the required medical studies, an insurance company will never be able to show that such failure "increased the risk." The purpose of the medical studies is to determine the risk of insuring the applicant. The insurance company does not have the ability to control the timing of the required medical studies, but must rely on the applicant to submit to the testing in a timely fashion. The incentive for the applicant to complete the medical studies timely is that until he or she does so, no coverage is in effect. The majority's opinion changes all that. Now, an applicant does not have that incentive because if he/she postpones the medical tests and dies before submitting to the studies, the insurance company has no way to prove that the applicant would have been denied for medical reasons. The insurance company will have to pay the benefits even though it had no opportunity to underwrite the risks. The legislature could not have intended such a result when it enacted § 631.11(3).

¶ 38. Accordingly, I respectfully dissent.

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

       Resolving the appeal on this basis obviates the need to address the interesting arguments the parties present on several of Fox's theories challenging the circuit court's conclusion. See Gross v. Hoffman, 227 Wis. 296, 300, 277 N.W. 663 (1938) (only dispositive issue need be addressed). We do acknowledge, however, that Fox has argued, among other things, that Patrick's policy was in effect regardless of whether the blood testing was done. In this opinion, we will assume that the policy required blood testing before coverage could commence.

       In a number of the summary judgment submissions to which we will refer, the Wisconsin State Laboratory of Hygiene is referred to as "the State Crime Lab" or variations of those terms.

       The July 29, 1997 letter, from Washburn County District Attorney J. Michael Bitney to Donna and Bernard Fox, stated, in part:
      Our office has inquired from the coroner's office regarding any blood sample taken from your son, Pat. Ms. Baker advises that a blood sample was taken, and that it was sent to the State Crime Lab in Madison, WI.

        We then contacted the Crime Lab and were informed that blood samples are normally kept for six months. The sample may only he released to medical facilities or testing facilities. The crime lab will package and forward the sample to the facility.
      Please let me know where you would like the blood sample sent and to whom it should be directed. I will then contact the crime lab and see if they [sic] will release the same without a Court Order to further an insurance claim on Pat's behalf. If, however, they [sic] refuse I would suggest that you contact a private attorney to handle this for you. This office will cooperate with that attorney.

       CKIS argues that Wis. Stat. § 631.11(3) "does not explicitly state whether or not it was intended to apply to conditions precedent" and "is capable of being construed in different ways with respect to whether the term 'condition' includes conditions precedent" and is therefore ambiguous. CKIS then looks beyond the statutory terms and contends that the statute simply is inapplicable to this case. We disagree. It is undisputed that CKIS and Patrick entered into a conditional insurance contract. It is undisputed that completion of a blood test and related medical studies was a condition potentially affecting the date of coverage. The statutory terms, "[n]o failure of a condition prior to a loss," are unambiguous and clearly applicable. See Peterson v. Midwest Sec. Ins. Co., 2000 WI App 213, ¶ 8, 238 Wis. 2d 677, 617 N.W.2d 876 ("If the statute's language is clear, we look no further and simply apply the statute to the facts and circumstances before us."), aff'd, 2001 WI 131, 248 Wis. 2d 567, 636 N.W.2d 727.

       CKIS, in its brief to this court, also writes, "[CKIS] requires that life insurance applicants undergo a paramedical exam which includes providing blood and urine samples." (Emphasis added.) In support of that assertion, it cites the document containing the "Receipt for Payment and Conditional Insurance Agreement" and the "Notice of Insurance Information Practices." This document, however, while referring to "completion of all examinations and medical studies required by the rules and practices of CKIS," does not specifically refer to blood or urine testing and does not substantiate CKIS's claim in any other way. See Wis. Stat. Rule 809.19(l)(e) & (3)(a) (appellate arguments must be supported by authority and record references).

       Fox also asks this court to conclude that CKIS owes prejudgment interest under Wis. Stat. § 628.46(1). Fox acknowledges, however, that because the circuit court granted summary judgment to CKIS, it did not reach the interest issue. On remand, the circuit court can consider Fox's request.

       The majority summarily concludes that the statute is not ambiguous. I disagree. As evidenced by the split of this court in analyzing the statute, reasonable minds differ as to its meaning, and it is therefore ambiguous. State v. Sweat, 208 Wis. 2d 409, 416-17, 561 N.W.2d 695 (1997). Because I conclude that the statute is ambiguous, an examination of the legislative history is appropriate. UVE, Inc. v. LIRC, 201 Wis. 2d 274, 281-82, 548 N.W.2d 57 (1996).

       The conditional agreement also listed "Coverage Limitations." The second limitation stated: "No coverage shall be in force if the person(s) proposed to be insured is not a risk insurable in accordance with CKIS rules, limits and standards for the plans ...." CKIS was never able to determine whether Patrick was a "risk insurable" because he did not complete the medical studies required before he died. Thus, the limitation provides additional support for the conclusion that no coverage was in effect under the conditional agreement or the insurance policy.


source: Caselaw Access Project

author: CURLEY, J.

license: Public Domain

text:
    State of Wisconsin, Plaintiff-Respondent, v. Zebelum Smith, Defendant-Appellants.

    Court of Appeals

      No. 01-1662-CR.

      Submitted on briefs February 5, 2002.—

      Decided April 9, 2002.

    2002 WI App 118
    (Also reported in 648 N.W.2d 15.)

      On behalf of the defendant-appellant, the cause was submitted on the briefs of Erich C. Straub oí Kachelski, Atta & Straub, S.C., of Milwaukee.
    On behalf of the plaintiff-respondent, the cause was submitted on the brief of Marguerite M. Moeller, assistant attorney general, and James E. Doyle, attorney general.
    Before Wedemeyer, EJ., Fine and Curley, JJ.

       Petition to review denied 7-26-02.

   CURLEY, J.

¶ 1. Zebelum Smith appeals from the judgment of conviction entered after a jury convicted him of second-degree sexual assault of a child, party to a crime, contrary to Wis. Stat. §§ 948.02(2) and 939.05 (1999-2000). He also appeals from the trial court's order denying his postconviction motion for a new trial. Smith claims that the trial court violated his constitutional rights to confrontation, due process and compulsory process by excluding extrinsic evidence of the victim's alleged prior inconsistent statements. We disagree and affirm.

I. Background.

¶ 2. At the time of this incident, the victim was fourteen years old. She testified that on February 23, 2000, she was on her way to the corner grocery store when she saw an acquaintance, John Harris, along with two other individuals sitting in a car across the street from the store. John signaled for her to come over, and she approached the car. John then asked her to run up to Smith's apartment, which was located near the store, to get some cigarettes from his brother, Albert Harris, whom she knew by the name of "Tweet." The victim agreed and went to the apartment.

¶ 3. The victim testified that she knocked on the front door of the apartment, which Smith answered. When she asked for Tweet, Smith signaled to a back bedroom. She went to the back bedroom, but the light was turned off and nobody was in the room. Then Smith entered the bedroom with three other men, Torrence Whitmore and two other men that she only knew by the names "Red" and "Black." Red then forced her down on the bed and began kissing her neck, while Black put his hands down her pants and put his finger in her vagina. She testified that Smith left the room as these two men continued molesting her, but that he later returned to the bedroom completely naked, touched his erect penis to her cheek, and told her to "kiss it." Albert Harris then entered the room, turned on the light, chastised the others, and escorted the victim out of the house. Although Whitmore was present during the entire incident, the victim testified that he never touched her.

¶ 4. After the incident, the victim gave three statements to the police regarding the activities on the night of February 23, 2000. The victim gave one statement to each of the following in order: Officer Peter Reichert, Detective Paul Leshok, and Detective Vickie Hall. During cross-examination of the victim, defense counsel questioned her regarding whether she had given a number of statements to the police, but never confronted the victim with any inconsistencies in those prior statements. However, Smith later attempted to. introduce these statements as prior inconsistent statements pursuant to Wis. Stat. § 906.13. The trial court excluded the statements, ruling that a proper foundation had not been laid pursuant to § 906.13 and, exercising its powers pursuant to Wis. Stat. § 906.11, determined that the victim could not be recalled, in order to avoid needless consumption of time and harassment.

II. Analysis.

¶ 5. Smith first contends that the trial court erred by precluding the testimony of the law enforcement officers regarding prior statements made by the victim. He argues that because the requirements of Wis. Stat. § 906.13(2)(a)2 had been satisfied, the trial court erroneously excluded the evidence pursuant to Wis. Stat. § 906.11(1). While we agree that Smith met the evi-dentiary requirements of § 906.13(2) (a)2, and that such evidence may not be excluded merely by invoking § 906.11(1), we conclude that any error was harmless.

¶ 6. "Few rights are more fundamental than that of an accused to present witnesses in his own defense." Chambers v. Mississippi, 410 U.S. 284, 302 (1973). In the exercise of this right, the accused must comply with established rules of procedure and evidence designed to assure both fairness and reliability in the ascertainment of guilt and innocence. See id. Further, due process prohibits the trial court from applying the evidentiary rules so that critical defense evidence is excluded. See State v. Sharlow, 110 Wis. 2d 226, 233, 327 N.W.2d 692 (1983).

¶ 7. Generally, the trial court's determination to admit or exclude evidence is a discretionary decision that will not be upset on appeal absent an erroneous exercise of discretion. State v. Jenkins, 168 Wis. 2d 175, 186, 483 N.W.2d 262 (Ct. App. 1992). However, in the present case, where the focus of the claim is on the constitutional right of a defendant to confront witnesses, the issue is one of constitutional fact. See State v. Dunlap, 2001 WI App 251, ¶ 17, 239 Wis. 2d 423, 620 N.W.2d 398 (stating that "a determination of whether the circuit court's actions violate the defendant's constitutional rights to confrontation and to present a defense is a question of constitutional fact"), rev'd, on other grounds, 2002 WI 19, 250 Wis. 2d 466, 640 N.W.2d 112.

¶ 8. "This court has traditionally treated questions of constitutional fact as mixed questions of fact and law, and it has applied a two-step standard when reviewing lower court determinations of constitutional fact." State v. Phillips, 218 Wis. 2d 180, 189, 577 N.W.2d 794 (1998).

[A]n appellate court reviewing issues of constitutional fact examines two determinations made by the circuit court, but applies a different standard of review to each. The circuit court first determines the evidentiary or historical facts relevant to the issue. The circuit court then applies those facts to resolve the constitutional questions.
The standard of review by the appellate court of the trial court's findings of evidentiary or historical facts is that those findings will not be upset on appeal unless they are [clearly erroneous]. This standard of review does not apply, however, to the trial court's determination of constitutional questions. Instead, the appellate court independently determines the questions of "constitutional" fact.

Id. (citations omitted).

¶ 9. "The constitutional right to present evidence is grounded in the confrontation and compulsory process clauses of Article I, Section 7 of the Wisconsin Constitution and the Sixth Amendment of the United States Constitution." State v. Pulizzano, 155 Wis. 2d 633, 645, 456 N.W.2d 325 (1990). The Sixth and Fourteenth Amendments to the United States Constitution and Art. I, § 7 of the Wisconsin Constitution assure criminal defendants the right to confront any witnesses against them. The Sixth Amendment to the United States Constitution provides: "In all criminal prosecutions, the accused shall enjoy the right... to be confronted with the witnesses against him [and] to have compulsory process for obtaining witnesses in his favor ...." Article I, Section 7 of the Wisconsin Constitution similarly provides: "In all criminal prosecutions the accused shall enjoy the right... to meet the witnesses face to face [and] to have compulsory process to compel the attendance of witnesses in his behalf...."

The rights granted by the confrontation and compulsory process clauses are fundamental and essential to achieving the constitutional objective of a fair trial. The two rights have been appropriately described as opposite sides of the same coin and together, they grant defendants a constitutional right to present evidence. The former grants defendants the right to "effective" cross-examination of witnesses whose testimony is adverse, while the latter grants defendants the right to admit favorable testimony. The right to present evidence is not absolute, however. Confrontation and compulsoiy process only grant defendants the constitutional right to present relevant evidence not substantially outweighed by its prejudicial effect.

Pulizzano, 155 Wis. 2d at 645-46 (citations omitted).

¶ 10. When Smith attempted to call Officer Re-ichert to introduce the alleged inconsistent statements of the victim into evidence, the trial court and defense counsel had the following exchange:

[The CouRt:] Do you have an offer of proof as to what Reichert would say?
[Defense Counsel:] Yes. I am actually going to bring in the prior inconsistent statements. I do have [the victim] here again today under subpoena, so she would be available to be recalled.
She is available right now, because she is here under subpoena. And so I believe that pursuant to 906.13, that because she is here, she has not been excused from giving further testimony in the action.
[The CouRt:] In examining [the victim,] you had the witness on the stand. You examined the witness.... What I'm saying is you could have done it under 906.13 when she was on the stand and when you ventured into your area of cross-examination regarding [the victim's] interaction with Reichert, but you chose not to go far enough. You could have done it, but you didn't.
I'm exercising my authority under 906.11.... We're going to avoid needless consumption of time, [and] I'm going to protect [the victim] from further harassment.

¶ 11. The trial court erred in two respects. First, because Smith satisfied the evidentiary foundation set forth in Wxs. Stat. § 906.13(2)(a)2, we conclude that the trial court erred, as a matter of law, when it ruled that Smith was precluded from calling Officer Reichert to testify regarding the alleged prior inconsistent statement of the victim.

¶ 12. Although Wis. Stat. § 906.13(2)(a)l states that "[e]xtrinsic evidence of a prior inconsistent statement by a witness is not admissible unless ... [t]he witness was so examined while testifying as to give the witness an opportunity to explain or to deny the statement," § 906.13(2)(a)2 adds that extrinsic evidence of a prior inconsistent statement is admissible if "[t]he witness has not been excused from giving further testimony in the action." The Judicial Council Committee's Note to § 906.13 explains that § 906.13(2)(a)2 "modifies the 'prior warning' condition to extrinsic evidence of impeachment," in that "[t]he rule is... modified to eliminate the 'prior warning' condition where a witness has not been excused from further testimony." See also Wis. Stat. § 906.13(1) (stating that the statement need not be shown to the witness in examining that witness concerning the prior statement).

¶ 13. Thus, the trial court was clearly wrong in ruling that Smith had not established a proper foundation in order to introduce the alleged inconsistent statements under Wis. Stat. § 906.13(2)(a)2. A prior inconsistent statement is admissible under § 906.13(2) without first confronting the witness with that statement. Under § 906.13(2)(a)2 and 3, extrinsic evidence of prior inconsistent statements is admissible if the witness has not been excused from giving further testimony in the case, or if the interest of justice otherwise requires its admission. See Ruiz v. State, 75 Wis. 2d 230, 232-33, 249 N.W.2d 277 (1977). In the instant case, because Smith intended to introduce extrinsic evidence of alleged prior inconsistent statements of the victim - inconsistent with testimony that the victim had previously given - who was under subpoena, and, therefore, not excused from giving further testimony in the action, we conclude that such evidence is admissible pursuant to § 906.13(2)(a)2.

¶ 14. Second, the trial court incorrectly concluded that evidence that is admissible pursuant to Wis. Stat. § 906.13(2)(a)2 may be excluded merely by invoking Wis. Stat. § 906.11(1). Generally, § 906.11 allows the trial court control over the conduct of the trial, including, but not limited to, the extent of cross-examination, see Neider v. Spoehr, 41 Wis. 2d 610, 617-18, 165 N.W.2d 171 (1969), the form of questions, see id., the admission or exclusion of exhibits, see Shurpit v. Brah, 30 Wis. 2d 388, 396-97, 141 N.W.2d 266 (1966), and sending exhibits to the jury room, see Rodriguez v. Slattery, 54 Wis. 2d 165, 172, 194 N.W.2d 817 (1972). The trial court’s determination of these issues pursuant to § 906.11 is largely within its discretion and will not be disturbed unless the rights of the parties have been prejudiced. See Dutcher v. Phoenix Ins. Co., 37 Wis. 2d 591, 606, 155 N.W.2d 609 (1968).

¶ 15. "[W]hile we agree that the evidentiary rule § 906.11(1) provides the circuit court with broad discretion in its control over the presentation of evidence at trial, that discretion is not unfettered." Waters ex rel. Skow v. Pertzborn, 2001 WI 62, ¶ 31, 243 Wis. 2d 703, 627 N.W.2d 497. Rather, Wis. Stat. § 906.11 "must give way where the exercise of discretion runs afoul of other statutory provisions that are not discretionary." Id. Here, Wis. Stat. § 906.13(2)(a)2 limits that discretion. In other words, § 906.11 does not trump § 906.13, because Smith satisfied the requirements of § 906.13(2)(a)2, which specifically controls the introduction of prior statements of witnesses. See State ex rel. S.M.O. v. Resheske, 110 Wis. 2d 447, 453, 329 N.W.2d 275 (Ct. App. 1982) (acknowledging the rule that "where a general statute conflicts with a specific statute, the specific statute prevails").

¶ 16. Finally, however, although Wis. Stat. § 906.11 is not applicable, Wis. Stat. § 904.03 may provide an impediment to the receipt of evidence, including prior inconsistent statements under Wis. Stat. § 906.13. Section 904.03 requires that the trial court balance the probative value of the evidence against a number of other factors:

Exclusion of relevant evidence on grounds of prejudice, confusion, or waste of time. Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.

When the trial court stated that it saw a need to "avoid needless consumption of time" and to "protect [the victim] from further harassment," it tacitly invoked § 904.03. In light of this, see State v. Ralph, 156 Wis. 2d 433, 438, 456 N.W.2d 657 (Ct. App. 1990) (stating that we may sustain a trial court's discretionary determination on a basis independent of that invoked by the trial court), and the following reasons, we conclude that the trial court's reliance on § 906.11 was harmless error, see also State v. Zellmer, 100 Wis. 2d 136, 150, 301 N.W.2d 209 (1981) (stating that errors of constitutional dimension are subject to harmless error analysis); Crane v. Kentucky, 476 U.S. 683, 691 (1986) (stating that even if the exclusion of evidence was a constitutional violation, the violation is subject to harmless error analysis).

¶ 17. Wisconsin Stat. § 805.18(2) provides:

805.18 Mistakes and omissions; harmless error.
(2) No judgment shall be reversed or set aside or new trial granted in any action or proceeding on the ground of selection or misdirection of the jury, or the improper admission of evidence, or for error as to any matter of pleading or procedure, unless in the opinion of the court to which the application is made, after an examination of the entire action or proceeding, it shall appear that the error complained of has affected the substantial rights of the party seeking to reverse or set aside the judgment, or to secure a new trial.

Wisconsin Stat. § 901.03 further provides:

901.03 Rulings on evidence. (1) Effect of ERRONEOUS Ruling. Error may not be predicated upon a ruling which admits or excludes evidence unless a substantial right of the party is affected.

¶ 18. In Martindale v. Ripp, 2001 WI 113, 246 Wis. 2d 67, 629 N.W.2d 698, our supreme court explained the interplay of these two statutory sections in the harmless error analysis of evidentiary decisions:

An erroneous exercise of discretion in admitting or excluding evidence does not necessarily lead to a new trial. The appellate court must conduct a harmless error analysis to determine whether the error "affected the substantial rights of the party." If the error did not affect the substantial rights of the party, the error is considered harmless.
Two statutes govern this situation, Wis. Stat. § 901.03 (Rulings on evidence) and Wis. Stat. § 805.18(2) (Mistakes and Omissions; Harmless Error). Section 901.03 provides that error may not be predicated on a ruling that admits or excludes evidence "unless a substantial right of the party is affected." This statute must be read together with § 805.18(2), which provides that a new trial shall not be granted for an error unless the error has affected the substantial rights of the party. This latter provision, which dates back to the early years of Wisconsin statehood, applies to both civil and criminal cases ....
For an error "to affect the substantial rights" of a party, there must be a reasonable possibility that the error contributed to the outcome of the action or proceeding at issue. A reasonable possibility of a different outcome is a possibility sufficient to "undermine confidence in the outcome."

Id. at ¶¶ 30-32 (footnotes omitted) (citations omitted); see also State v. Dyess, 124 Wis. 2d 525, 543-47, 370 N.W.2d 222 (1985); Town of Geneva v. Tills, 129 Wis. 2d 167, 184-85, 384 N.W.2d 701 (1986) (holding that that the harmless error analysis set forth in Dyess applies in both civil as well as criminal cases).

¶ 19. Smith asserts that each of the victim's prior statements to police is inconsistent with her trial testimony. Smith argues that he would have been able to establish that the victim made the following statements to Officer Reichert in contrast to her trial testimony: (1) Tweet invited her inside the house instead of Smith; (2) Red escorted her to the bedroom instead of Smith; (3) Smith fondled her breasts instead of Red; and (4) The light was on during the entire incident, rather than Tweet coming into the bedroom and turning on the light. With respect to the victim's statement to Detective Leshok, Smith highlights the following alleged inconsistencies with her trial testimony: (1) the victim stated that Smith answered the door rather than Tweet; (2) the victim stated that she walked to the bedroom after being directed by Smith rather than being escorted by Red; (3) Red fondled her breasts rather than Smith; and (4) the victim gave a description of Smith to Detective Leshok that did not include any reference to his tattoos. Finally, Smith argues that because the victim did not disclose Whitmore's involvement until being confronted by Detective Hall, her statement to Detective Hall is inconsistent with her prior statements and her trial testimony.

¶ 20. "Even though there [may] be glaring discrepancies in the testimony of a witness at trial, or between his [or her] trial testimony and his [or her] previous statements, that fact in itself does not result in concluding as a matter of law that the witness is wholly incredible." Ruiz, 75 Wis. 2d at 232. Here, any error was harmless because the discrepancies between the victim's prior statements and her trial testimony were minor compared with the overall consistency of each of her accounts of this traumatic experience. See id. at 233 ("Discrepancy between the sequence of events recited at the preliminary and the sequence related at trial does not constitute a repudiation of the prior testimony, nor does it impel the conclusion that none of the testimony was believable."); see also Fells v. State, 65 Wis. 2d 525, 531, 223 N.W.2d 507 (1974) (holding that inconsistencies in victim's preliminary hearing testimony that her attacker had no mustache and had somewhat wavy or curly hair and her trial testimony that her assailant had a very thin mustache and that his hair was somewhat kinky and short were not so serious as to render her testimony patently incredible).

¶ 21. First, with respect to the victim's statement to Detective Hall, while the statement was inconsistent, or at least less complete, than her two prior statements to Officer Reichert and Detective Leshok, this statement is consistent with the victim's trial testimony, in that in both instances she testified that Whitmore was present in the room but did not physically touch her. Therefore, the victim's statement to Detective Hall is not "a prior inconsistent statement." See Shoemaker v. Marc's Big Boy, 51 Wis. 2d 611, 618, 187 N.W.2d 815 (1971) ("Extrajudicial statements of a hearsay nature may be used to impeach a witness on the theory that one who gives testimony inconsistent with his prior statements is subject to having the truthfulness of both statements attacked.").

¶ 22. Second, regarding the victim's prior statement to Detective Leshok, the inconsistencies Smith identifies are between that statement and the victim's prior statement to Officer Reichert, not between her statement to Detective Leshok and her trial testimony. Again, this statement does not qualify as a prior inconsistent statement because it is consistent with the victim's trial testimony.

¶ 23. Third, and finally, with respect to the victim's statement to Officer Reichert, any inconsistency regarding who opened the front door and directed the victim to the bedroom is insignificant in light of the later sexual abuse by Smith. Further, any alleged benefit that Smith would have gained by revealing the inconsistency in the victim's testimony referring to who groped her breasts would have been outweighed by the prejudice caused by suggesting that Smith not only stuck his erect penis into the victim's face and told her to kiss it, but also that he, not Red, had groped and fondled the victim's breasts beforehand. Because these discrepancies did not affect the substance of the victim's testimony and Smith was not prejudiced by their exclusion, we conclude that the victim's trial testimony did not constitute a repudiation of her prior statements, and, thus, Smith has failed to establish a reasonable possibility of a different outcome.

By the Court — Judgment and order affirmed.

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

       Wisconsin Stat. § 906.13 provides:
      906.13 Prior statements of witnesses.
      (2) Extrinsic evidence op prior inconsistent statement of a witness, (a) Extrinsic evidence of a prior inconsistent statement by a witness is not admissible unless any of the following is applicable:
      1. The witness was so examined while testifying as to give the witness an opportunity to explain or to deny the statement.
      2. The witness has not been excused from giving further testimony in the action.
      3. The interests of justice otherwise require.
      Wisconsin Stat. § 906.11 provides:
      906.11 Mode and order of interrogation and presentation.
      (1) Control by judge. The judge shall exercise reasonable control over the mode and order of interrogating witnesses and presenting evidence so as to do all of the following:

        (a) Make the interrogation and presentation effective for the ascertainment of the truth.
      (b) Avoid needless consumption of time.
      (c) Protect witnesses from harassment or undue embarrassment.

       The confrontation right in the Sixth Amendment of the United States Constitution was made applicable to the states in Pointer v. Texas, 380 U.S. 400 (1965).

       Alternatively, Smith claims that his defense counsel was ineffective for failing to confront the victim with her prior statements during cross-examination. However, because we have already concluded that Smith was not prejudiced by the exclusion of the prior statements, we also conclude that his defense counsel was not ineffective. See Strickland v. Washington, 466 U.S. 668, 697 (1984) (staging that if the defendant fails to establish either deficient performance or prejudice, we may conclude that counsel was not ineffective and need not address the other prong).


author: PETERSON, J.

text:
    Myron A. Goldstein and Park Family Limited Partnership, Plaintiffs-Appellants, v. James R. Lindner, Joan C. Lindner, David A. Norrbom, Kathleen M. Norrbom, Robert J. Lindner, Debra J. Lindner, Lindner Minerals Limited Partnership, Raymond Hoffman, Maymie Hoffman, John C. Bojarski, Northwoods Minerals Limited Partnership, Wilderness Minerals Limited Partnership, Mineral Heights Limited Partnership, Forest Minerals Limited Partnership, Woodland Minerals Limited Partnership, Christine M. Flamme, Julianne Koll, Clara D. Michailoff, Joyce D. Nemec, Antonette Ehrenberg and Nicolet Minerals Company, Defendants-Respondents.
    Court of Appeals

      No. 01-2068.

      Submitted on briefs March 11, 2002.

    Decided April 9, 2002.

    2002 WI App 122
    (Also reported in 648 N.W.2d 892.)

      On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of Francis R. Croak, Michael J. Lund and Steven L. Nelson of Cooke & Franke S.C., Milwaukee.
    On behalf of the defendants-respondents, the cause was submitted on the brief of William Schroeder of Sommer, Oik, Schroeder & Payant, Rhinelander and James L. Huston and Kelli Taffora of Foley & Lardner, Milwaukee.
    Before Cane, C.J., Hoover, EJ., and Peterson, J.

       Petition to review denied 9-3-02.

   PETERSON, J.

¶ 1. Myron Goldstein and the Park Family Limited Partnership (Goldstein) appeal a summary judgment dismissing their complaint seeking declaratory relief with respect to their interest in mineral rights. Because we agree with the circuit court that there are no genuine issues of material fact, we affirm the judgment.

BACKGROUND

¶ 2. This case involves a forty-acre parcel of land in the Town of Nashville. On February 1, 1975, Ernest and Antonette Ehrenberg, owners of the parcel, signed a twenty-five-year mining lease with Exxon Corporation. The mining lease granted Exxon the right to conduct mining operations on the parcel.

¶ 3. In May 1976, the Ehrenbergs assigned a one-half interest in the 1975 mining lease to James Lindsay. The assignment conveyed half of the "royalties and/or contractual interests" arising out of the 1975 mining lease. In addition, the assignment gave Lindsay the right to explore and mine the parcel in the event Exxon terminated the lease. In 1979, Frederick Park and Goldstein each purchased one-third of Lindsay's "royalties and/or contractual interests."

¶ 4. In 1981, James Lindner secured the right to purchase the Ehrenbergs' remaining interest under the 1975 mining lease. Under an option agreement, Lind-ner had the right to purchase the Ehrenbergs' share of. production royalties and rental payments. The option agreement has since been exercised. In addition, the Ehrenbergs assigned to Lindner "any and all other financial or beneficial rights" under the mining lease "including any reversionary rights in the lease."

¶ 5. Exxon pursued state and federal permits to open the mine. In late 1986, it withdrew its permit applications because future mineral prices were not promising. The permit process was started again in 1993 by Crandon Mining Company. Crandon Mining was a Wisconsin partnership of Exxon Corporation and Rio Algom, Ltd.

¶ 6. On September 22, 1997, Lindner and Cran-don Mining entered into a new twenty-five-year mining lease to commence on February 1, 2000, the date the 1975 mining lease was to expire. Section 17 of the 1997 lease ratifies and reaffirms the 1975 mining lease and provides "that as of February 1, 2000, the 1975 Lease shall be superseded by this Lease in all respects as to the interest in the Premises leased hereby." The "interest in the Premises leased hereby" refers to the Ehren-bergs' one-half interest in the 1975 mining lease that Lindner purchased.

¶ 7. In 1998, Rio Algom purchased Exxon's interest and the partnership was renamed Nicolet Minerals Company. Nicolet Minerals continues to seek permits for the mine.

¶ 8. Goldstein filed this action against Nicolet Minerals, Antonette Ehrenberg and Lindner, seeking declaratory relief with respect to his interest in the parcel. Goldstein moved for summary judgment, arguing that: (1) he possesses a one-half interest in the reversionary interest under the mining lease; (2) he has the right to conduct mining operations pursuant to the Lindsay assignment; and (3) Nicolet Minerals terminated the mining lease.

¶ 9. Nicolet Minerals, Ehrenberg, and Lindner filed a motion for summary judgment seeking dismissal of Goldstein's complaint. The circuit court granted their motion and denied Goldstein's motion. The court held that Goldstein had not acquired the Ehrenbergs' rever-sionary interests and that Nicolet Minerals did not terminate the lease.

STANDARD OF REVIEW

¶ 10. When reviewing a grant of summary judgment, we apply the same methodology as the trial court and decide independently whether summary judgment was appropriate. Coopman v. State Farm Fire & Cas. Co., 179 Wis. 2d 548, 555, 508 N.W.2d 610 (Ct. App. 1993). If the pleadings set forth a claim for relief and a material issue of fact, our inquiry shifts to the moving party's affidavits or other proof to determine whether a prima facie case for summary judgment has been presented. Grams v. Boss, 97 Wis. 2d 332, 338, 294 N.W.2d 473 (1980). If the moving party has made a prima facie case, the affidavits or other proof of the opposing party must be examined to determine whether there are disputed material facts, or undisputed material facts from which reasonable alternative inferences may be drawn, sufficient to entitle the opposing party to a trial. Id.

DISCUSSION

I. Reversionary Interests

¶ 11. Based on the Lindsay assignment, Goldstein argues that he possesses a one-half interest in the Ehrenbergs' reversionary interest in the 1975 mining lease. As a result of the use of "and/or" in the Lindsay assignment, Goldstein contends that the Lindsay assignment is ambiguous. According to Goldstein, the Ehrenbergs intended to convey not only royalties and other contractual interests arising from the 1975 mining lease, but also their reversionary interest in the property.

¶ 12. Contracts are construed to achieve the parties' intent. Eden Stone Co. v. Oakfield Stone Co., 166 Wis. 2d 105, 116, 479 N.W.2d 557 (Ct. App. 1991). The terms used in a contract are to be given their plain or ordinary meaning. In re All-Star Ins. Corp., 112 Wis. 2d 329, 333, 332 N.W.2d 828 (Ct. App. 1983). The analysis ends if the words convey a clear and unambiguous meaning. Eden Stone Co., 166 Wis. 2d at 116. "If [the parties'] intent can be determined with reasonable certainty from the face of the contract itself, there is no need to resort to extrinsic evidence." Id.

¶ 13. The passage at issue in the Lindsay assignment states that the Ehrenbergs "do hereby grant, bargain and convey unto said James B. Lindsay, one half (1/2) or Fifty Percent (50%) of the royalties and/or contractual interests" arising out of the 1975 mining lease. When contractual terms Eire reasonably susceptible to more than one construction, the contract is ambiguous. Gorton v. Hostak, Henzl & Bichler, 217 Wis. 2d 493, 506, 577 N.W.2d 617 (1998). The very nature of "and/or" is ambiguous because it renders a contract susceptible to three interpretations. Here, those interpretations are: (1) one-half of the royalties; (2) one-half of the contractued interests; or (3) one-half of both the royalties Emd contractual interests.

¶ 14. However, this ambiguity makes no difference in resolving this dispute. Regardless which of the three alternatives was conveyed, none includes a rever-sionary interest.

¶ 15. Unlike royalties and contractual interests,.a reversion is not an interest that arises from a contract. Rather, a reversion "arises by construction and operation of law whenever a grantor has conveyed less than his whole interest or estate" the undisposed portion being his when the grant is terminated. 31 C.J.S. Estates § 104 (1996). Other authorities agree that re-versionary interests arise by operation of law and not from contracts. Black's Law Dictionary 1320 (7th ed. 1999), defines a reversion as a "future interest in land arising by operation of law whenever an estate owner grants to another a particular estate, such as ... a term of years." "[R]eversions arise by operation of law, and not by any act of a party." 28 Am. Jur 2d Estates § 197 (2000).

¶ 16. By the Lindsay assignment's terms, the Ehrenbergs intended to convey either royalties, contractual interests, or both, to Lindsay. However, nothing suggests that the Ehrenbergs also intended to give up their reversionary interest in the 1975 mining lease. The first time that reversion is found in the chain of title is when the Ehrenbergs conveyed their reversion to Lindner in the option agreement. The option agreement expressly included "any reversionary rights in the [1975 mining lease]."

¶ 17. Yet Goldstein argues that a one-half interest in the Ehrenbergs' reversionary interest under the 1975 mining lease was conveyed in the Lindsay assignment. Goldstein ignores the plain meaning of reversion and does not explain how either "royalties" or "contractual interests" can be construed to mean a reversionary interest. Goldstein cites no authority describing a re-versionary interest as a royalty or a contractual interest or as something that arises from a royalty or a contract.

¶ 18. We conclude that there is no material ambiguity in the Lindsay assignment. Lindsay and his assignees did not acquire a one-half interest in the Ehrenbergs' reversionary interest in the 1975 mining lease.

II. TERMINATION OF THE MINING LEASE

¶ 19. The 1997 mining lease between Lindner and Crandon Mining includes an undivided 50% interest in the parcel and has a term of twenty-five years commencing February 1, 2000. Section 17 of the 1997 mining lease provides that "as of February 1, 2000, the 1975 Lease shall be superseded by this Lease in all respects as to the interest in the Premises leased hereby."

¶ 20. Goldstein argues that the 1975 mining lease continued in effect beyond February 1, 2000, either: (1) under its express terms or (2) under its force majeure provisions. Therefore, according to Goldstein, Crandon Mining terminated the lease and, as a result, Goldstein possesses the right to mine the parcel, pursuant to the terms of the Lindsay assignment.

A. Express Terms of the Mining Lease

¶ 21. Goldstein argues that the mining lease continued in effect for at least 180 days after its initial term. The first sentence of Section Two of the 1975 mining lease reads:

This Lease is granted for an initial term of twenty-five (25) years from and after the date hereof, and for a continuing term as long after the initial term as any mining, development or processing is being conducted hereunder on a continuous basis.

By itself, this sentence means that the lease ran for twenty-five years plus any period in which mining or development work continued.

¶ 22. The second sentence in Section Two states:

Such operations shall be deemed conducted on a continuous basis unless and until, after the end of the initial term, a period of one hundred eighty (180) consecutive days elapses in which no mining or development or processing is conducted, excluding, however, periods of force majeure as defined below.

Read together, the two sentences describe a twenty-five-year initial term that would be extended if the mine was in operation at the end of the initial term. During this "continuing term," the mining company could suspend mining operations up to 180 days for any reason without losing its lease.

¶ 23. Goldstein also relies on Section Three and Section 7-3 of the 1975 mining lease. Section Three states:

Lessee shall pay Lessor an annual payment, except as otherwise provided herein, of rental or advance royalty determined according to the schedule and provisions contained in this Section.

The second sentence of Section 7-3 states:

Each annual payment, whether rental or advance royalty, shall been deemed, during the initial term of this Lease, the equivalent of reasonable development and working of the premises for all purposes of this Lease....

Goldstein argues that by making the required annual payments during the 1975 mining lease, Exxon and its successors were deemed to be developing and working the premises "for all purposes." Therefore, Goldstein concludes that the 1975 mining lease extended beyond February 1, 2000, by at least 180 days.

¶ 24. In order to fully protect the lessor, courts have found that a mining lease "automatically terminates by its own terms upon the occurrence of the stated event, namely, expiration of the primary term without production or operations at such time...." McCullough Oil, Inc. v. Rezek, 346 S.E.2d 788, 794 (W. Va. 1986). McCullough Oil's discussion of oil, gas and mineral leases is instructive. Id. at 792-94. Term clauses typically include three elements. One element sets the primary term of the lease, which is to bring the project into commercial production. See id. at 792-93. Here, the lease was for twenty-five years. The second element is a "thereafter" provision creating a continuing term that took effect if the mining company achieved production during the primary term and extended for as long as commercial production continued. See id. at 793. Here, the first sentence of Section Two states both the primary and the "thereafter" or continuing term, and the second sentence defines what triggered the continuing term.

¶ 25. In addition, leases often contain a third element, a "savings" or "cessation of production" clause, intended to give the lessee a grace period. Id. Under these clauses, the continuing term does not expire if production, once begun but temporarily suspended, was resumed within the period specified. See id. at 793-94. Here, the "savings" clause is found in the second sentence of Section Two and provides for a 180-day grace period.

¶ 26. Contrary to Goldstein's argument, Section 7-3 has nothing to do with the lease term. Rather, it reflects the fact that mining companies have a duty to take reasonable steps toward developing a leasehold. See, e.g., Leck v. Cont'l Oil Co., 800 P.2d 224, 228 (Okla. 1989) (all mining leases contain the lessee's implied promise to develop the leasehold as a prudent operator). The principal consideration for lessors is their expectation of receiving royalties, and lessees have an obligation to act with diligence to satisfy that expectation. See Morley v. Berg, 235 S.W.2d 873, 874-75 (Ark. 1951).

¶ 27. In other words, Section 7-3 creates a safe harbor, providing that the annual payments required by the lease are "the equivalent of reasonable development and working of the premises . ..." As long as payments were made, the mining company's failure to develop the mine during the 1975 mining lease would not breach the implied covenant of development. Therefore, the 1975 mining lease expired by its terms on February 1, 2000.

¶ 28. Goldstein argues that the language in the 1997 mining lease, "as of February 1, 2000, the 1975 Lease shall be superseded by this Lease," is equivalent to termination of the 1975 mining lease. However, the 1975 mining lease did not recognize termination by supersession. Rather, under Section 11-2 of the 1975 mining lease, the only way in which the lease could be terminated was by "delivering or mailing Lessor written notice stating such intention to terminate.... The termination shall take effect upon the date specified in the notice or, if no date is specified, upon the date on which the notice is given." Here, no notice has ever been given. Neither Exxon, nor any of its successors, ever gave notice that the lease was to be terminated.

B. Force Majeure

¶ 29. Goldstein also argues that the 1975 mining lease remained in effect pursuant to its force majeure clause. He contends that the combination of private and governmental inaction constituted an event of force majeure.

¶ 30. As stated earlier, the 1975 mining lease was for "an initial term of twenty-five years" and "a continuing term as long after the initial term as any mining, development or processing is being conducted hereunder on a continuous basis." Whether "mining or development or processing is conducted" is determined in accordance with Section Twelve of the 1975 mining lease:

Lessee shall not be deemed ... to have ceased performance or operations hereunder, during any period in which performance or operations are prevented by any cause reasonably beyond Lessee's control, each of which causes is called "force majeure." Force majeure shall include, without limitation ... inability to obtain competent workmen ... lack of market reasonably satisfactory to Lessee for product from the premises, action of government authority, litigation.... The duration of this lease shall be extended for a period equal to the period of force majeure.

¶ 31. Under Section Twelve, force majeure existed when non-performance resulted from something beyond the lessee's control. Force majeure clauses extend leases only when the non-performance is "caused by circumstances beyond the reasonable control of the lessee or by an event which is unforeseeable at the time the parties entered into the contract." Atkinson Gas Co. v. Albrecht, 878 S.W.2d 236, 241 (Tex. App. 1994). Parties to a lease are assumed to know what laws and regulations will affect the company's ability to win permits. Id. For that reason a lessee's failure to secure a permit is not deemed an event of force majeure. Id.

¶ 32. In Erickson v. Dart Oil & Gas Corp., 474 N.W.2d 150, 155-56 (Mich. Ct. App. 1991), the Michigan appellate court held that the government's failure to issue drilling permits did not constitute force majeure. In that case, the primary term of the lease expired before the lessee was able to obtain the necessary permits. Id. In analyzing the lessee's resort to the force majeure clause, the court first noted that "Where governmental action is alleged to be the cause of delay, the parties to the lease are presumed to have contracted with knowledge of any preexisting law that could have caused delay." Id. at 155. The court held that the failure to obtain the necessary permits was not force majeure. Id.

¶ 33. Here, Nicolet Minerals has not obtained the state and federal permits necessary to begin mining. In large part, there are no permits because Exxon voluntarily suspended its applications in 1986. There was no further action until 1993, when Exxon joined with Rio Algom and the application process started over. Nicolet Minerals was not able to satisfy all of the permitting agencies' requests for information about the mining plan by the time the 1975 mining lease expired.

¶ 34. The primary reason that force majeure did not extend the 1975 mining lease is that only the lessee can invoke the clause. The last sentence of Section Twelve provides that "Lessee shall notify Lessor of the beginning and ending date of such period" of force majeure. Because neither Exxon nor Nicolet Minerals ever gave notice, the force majeure clause has not been triggered.

¶ 35. Even if there were doubt whether Exxon or Nicolet Minerals could invoke the force majeure clause before actual operations began, the last sentence of Section Twelve makes clear that periods of force ma-jeure begin "at the time Lessee stops performance or operations hereunder by reason of force majeure." Because the lessee never stopped performance and there were never any mining operations that could be stopped, there was never a time when the force majeure clause could have been invoked.

By the Court. — Judgment affirmed.

       The mining lease itself was never recorded, but a memorandum agreement describing the lease was recorded in April 1975.

       The Lindsay assignment states that in the event Exxon terminated the 1975 mining lease, "Lindsay, his heirs and assigns shall have the right to go upon the premises" and "extract the mineral deposits" from the property.

       Frederick Park assigned his interest on August 3, 2000, to the Park Family Limited Partnership.

       Joan Lindner, David Norrbom, and Kathleen Norrbom also secured the right to purchase the Ehrenbergs' rights under the 1975 mining lease.

       In the 1980s, fractional interests in the parcel were conveyed to the individual defendants named here and to WA. Mines, Inc., an Exxon subsidiary.

       Ernest Ehrenberg died prior to the commencement of this lawsuit. Antonette Ehrenberg was alive at the time the complaint was filed, but has since died.

       "Contractual interests" here included, for example, the Ehrenbergs' right to require Exxon to conduct all operations in a careful and "miner-like" manner; the Ehrenbergs' right to be indemnified by Exxon for personal injuries and property damage to third parties; the Ehrenbergs' right to assign interests in the lease; the Ehrenbergs1 right to terminate the lease if Exxon defaulted; Exxon's promise to pay its proportionate share of severance taxes on minerals mined from the parcel; and Exxon's promise to keep title free of all liens or encumbrances resulting from its activities.