Emer's Camper Corral, LLC v. Western Heritage Insurance Company , 2020 WI 46 ( 2020 )

2020 WI 46
SUPREME COURT OF WISCONSIN
CASE NO.: 2018AP458
COMPLETE TITLE: Emer's Camper Corral, LLC,
Plaintiff-Appellant-Petitioner,
v.
Michael A. Alderman, Alderman, Inc. d/b/a
Jensen-Sundquist
Insurance Agency and Western Heritage Insurance
Company,
Defendants-Respondents.
REVIEW OF DECISION OF THE COURT OF APPEALS
Reported at 386 Wis. 2d 592,928 N.W.2d 641
PDC No:2019 WI App 17 - Published
OPINION FILED: May 21, 2020
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: November 25, 2019
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Burnett
JUDGE: Melissia R. Mogen
JUSTICES:
KELLY, J., delivered the majority opinion of the Court, in which
ANN WALSH BRADLEY, ZIEGLER, REBECCA GRASSL BRADLEY, DALLET and
HAGEDORN, JJ., joined. ROGGENSACK, C.J., filed a dissenting
opinion.
NOT PARTICIPATING:
ATTORNEYS:
For the plaintiff-appellant-petitioner, there were briefs
filed by Steven L. Miller and Miller Appellate Practice, LLC, River
Falls, WI. There was an oral argument by Steven L. Miller.
For the defendant-respondent, there was a brief filed by Rolf
E. Sonnesyn, Beth L. LaCanne, and Tomsche, Sonnesyn & Tomsche,
P.A., Minneapolis, Minnesota. There was an oral argument by Rolf
E. Sonnesyn.
2
2020 WI 46
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2018AP458
(L.C. No. 2015CV25)
STATE OF WISCONSIN : IN SUPREME COURT
Emer's Camper Corral, LLC,
Plaintiff-Appellant-Petitioner,
v.
FILED
Michael A. Alderman, Alderman, Inc. d/b/a MAY 21, 2020
Jensen-Sundquist
Sheila T. Reiff
Clerk of Supreme Court
Insurance Agency and Western Heritage Insurance
Company,
Defendants-Respondents.
KELLY, J., delivered the majority opinion of the Court, in which
ANN WALSH BRADLEY, ZIEGLER, REBECCA GRASSL BRADLEY, DALLET, and
HAGEDORN, JJ., joined. ROGGENSACK, C.J., filed a dissenting
opinion.
REVIEW of a decision of the Court of Appeals. Affirmed.
¶1 DANIEL KELLY, J. Emer's Camper Corral, LLC ("Camper
Corral") thought its insurance agent had acquired a policy with a
deductible of $1,000 per camper in the event of hail damage with
a $5,000 aggregate deductible limit. In actuality, the policy
required a $5,000 deductible per camper, with no aggregate limit.
Camper Corral did not discover the truth until after a hailstorm
damaged many of the campers on its lot.
No. 2018AP458
¶2 Camper Corral sued its insurance agent, Michael A.
Alderman, and Alderman, Inc. d/b/a Jensen-Sundquist (collectively,
"Mr. Alderman") claiming he was negligent because he procured a
policy that did not conform to its requirements.1 The circuit
court directed a verdict because Camper Corral's failure to
introduce evidence that an insurer would have insured the company
with the deductible limits it thought it had meant that it had not
proven a causal link between the agent's negligence and the
sustained loss.2
¶3 We granted Camper Corral's petition for review to
determine whether it must prove not just that an insurance policy
with the requested deductibles was commercially available, but
also that an insurer would actually write that policy for Camper
Corral in particular. We hold that commercial availability is
insufficient to establish causation; Camper Corral must also prove
it would have qualified for an insurance policy with better terms
than the policy it actually obtained. Therefore, we affirm the
court of appeals.
I. BACKGROUND3
1 Camper Corral also filed a claim for reformation of contract
based on mutual mistake against its insurer, Western Heritage
Insurance Company. That claim is not before us.
2 This is a review of a published court of appeals opinion,
Emer's Camper Corral, LLC v. Alderman, 2019 WI App 17, 386
Wis. 2d 592, 928 N.W.2d 641, which affirmed the Burnett County
Circuit Court, the Honorable Melissia R. Mogen, presiding.
3 The facts are taken from the Complaint, trial testimony,
and the circuit court's written order granting Mr. Alderman's
motion for a directed verdict, which was filed on January 26, 2018.
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No. 2018AP458
¶4 Camper Corral (owned by Rhonda Emer and her husband) has
been in the business of selling new and used camper trailers since
approximately 2004.4 Since shortly after it started business,
Camper Corral has obtained its insurance through its agent, Mr.
Alderman. In approximately 2007, it contacted Mr. Alderman to
obtain an insurance policy to cover its camper inventory.
¶5 Mrs. Emer said Camper Corral's first garage policy
(issued by General Casualty in 2007) included coverage for hail
damage. She said it carried a $500 deductible per camper and, to
her knowledge, had no aggregate limit on the deductible. The
General Casualty policy commenced on September 30, and expired on
September 30 of the following year. Succeeding policies commenced
immediately upon expiration of the preceding policy.
¶6 In 2011, Camper Corral sustained approximately $100,000
in damages to numerous campers in a hailstorm. Camper Corral
submitted a claim to General Casualty pursuant to the policy then
in effect. General Casualty duly paid the claim and subsequently
renewed Camper Corral's policy under the same terms for the 2011-
2012 policy period. Camper Corral again sustained hail damage
totaling approximately $100,000 in the summer of 2012. As before,
General Casualty paid on the claim, but this time it sent Camper
Corral a non-renewal letter prior to commencement of the 2012-2013
policy term.
4 At the outset, Camper Corral focused on selling used campers
only; however, in or around 2008, it also began selling new camper
trailers.
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No. 2018AP458
¶7 Mr. Alderman told Camper Corral that its next insurance
policy would have to come from "other markets," which Mrs. Emer
understood to mean that Camper Corral would likely pay higher
premiums and would have less favorable deductibles. Ultimately,
Camper Corral obtained coverage for the 2012-2013 policy period
from Western Heritage Insurance Company ("Western Heritage").
Mrs. Emer said she knew this policy contained a $5,000 deductible
per camper for hail damage. She also said she understood that,
due to Camper Corral's recent claims history, she could not obtain
a policy with more favorable terms. Mr. Alderman told her that if
Camper Corral remained claims free for one to two years, he could
potentially get the deductible down to $1,000 per camper. She
understood, however, that this was a goal——not a promise that it
would be possible.
¶8 Camper Corral did, in fact, go claims free during the
2012-2013 policy period. According to Camper Corral, as the 2013-
2014 policy period approached, Mr. Alderman contacted Camper
Corral with the "great news" that he had obtained a policy from
Western Heritage with a $1,000 deductible per camper for hail
damage with a $5,000 aggregate deductible limit. Unbeknownst to
Camper Corral, however, the 2013-2014 policy placed by Mr. Alderman
with Western Heritage actually required a $5,000 per camper
deductible with no aggregate limit.
¶9 In August 2014, Mr. Alderman contacted Camper Corral to
discuss policy options for the upcoming 2014-2015 period. Mr.
Alderman explained that he had obtained quotes from Western
Heritage (the current provider) and Erie Insurance Company, an
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No. 2018AP458
insurance company in the standard market. According to Mrs. Emer,
he indicated that both quotes offered a $1,000 per camper hail
deductible and that the Western Heritage quote had the same terms
as the soon-to-expire 2013-2014 policy. Before the two could meet
to discuss the quotes, however, Camper Corral sustained hail damage
to 25 campers in its inventory on September 3, 2014. As a result,
Erie rescinded its quote. Western Heritage, however, could not
rescind its quote because, according to Mrs. Emer's trial
testimony, the hail damage claim occurred within 60 days of the
renewal period.
¶10 After the hail event on September 3, 2014, Mrs. Emer
discovered that the 2013-2014 Western Heritage policy actually
contained a $5,000 per camper deductible for hail damage rather
than the $1,000 deductible she thought it had, and that there was
no aggregate deductible limit. With damage to 25 campers, Camper
Corral's total deductible came to $125,000.
¶11 Camper Corral's lawsuit against Mr. Alderman claimed he
breached his duty of care to Camper Corral by obtaining a policy
for the 2013-2014 period with a $5,000 per camper deductible
despite being aware that Camper Corral desired coverage with a
lower deductible. The Complaint alleges that Mr. Alderman is
liable in the amount of $120,000——the difference between the
$125,000 deductible Camper Corral paid for the September 3, 2014
hail event and the $5,000 aggregate deductible Camper Corral
believed it had obtained for the 2013-2014 policy period.
¶12 Mr. Alderman moved for summary judgment, arguing that
Camper Corral's negligence claim must fail because there was no
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No. 2018AP458
evidence that Mr. Alderman had caused Camper Corral's damages.
The circuit court denied the motion and the case proceeded to a
jury trial.
¶13 Before submitting the case to the jury, Mr. Alderman
moved for a directed verdict challenging the causal connection
between Camper Corral's damages and his failure to obtain an
insurance policy with the desired terms. Specifically, he argued
there could be no causal connection unless Camper Corral had been
eligible for an insurance policy with the more favorable terms it
believed it had for the 2013-2014 policy period. The circuit court
took the motion under advisement and counsel for Mr. Alderman then
read the deposition testimony of Robert Sutton, an insurance expert
Camper Corral had hired but did not call at trial, to the jury.
As relevant here, Mr. Sutton stated that, because of Camper
Corral's claims history in 2011 and 2012, it was not possible for
Camper Corral to have obtained an insurance policy with a $1,000
hail deductible and $5,000 aggregate deductible for the 2013-2014
policy period. Mr. Alderman then renewed his motion, which the
circuit court granted. The circuit court stated that "[t]he
evidence presented in this case through the testimony and the
exhibits presents no evidence that the policy . . . was available
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No. 2018AP458
or could have been available[,]" and therefore the claim failed as
a matter of law.5
¶14 The court of appeals affirmed, noting that "no credible
evidence was introduced at trial to support a finding that, absent
Alderman's alleged negligence, Camper Corral could have obtained
a policy with a hail damage deductible of less than $5000 per
unit. . . . The circuit court's assessment of the evidence was
not 'clearly wrong.'" Emer's Camper Corral, LLC v. Alderman, 2019
WI App 17, ¶24, 386 Wis. 2d 592, 928 N.W.2d 641 (internal citation
omitted). We granted Camper Corral's petition for review and now
affirm the court of appeals.
II. STANDARD OF REVIEW
¶15 "A motion for a directed verdict challenges the
sufficiency of the evidence." Marquez v. Mercedes-Benz USA, LLC,
2012 WI 57, ¶47, 341 Wis. 2d 119, 815 N.W.2d 314; see also Wis.
Stat. § 805.14(4) (2017-18)6 ("In trials to the jury, at the close
of all evidence, any party may challenge the sufficiency of the
evidence as a matter of law by moving for directed
5 The circuit court determined that the case failed for the
additional reason that, in a negligent procurement claim, expert
testimony is necessary to establish the standard of care. Camper
Corral did not introduce any such testimony. But because the court
of appeals affirmed the circuit court on the question of causation,
it did not address whether expert testimony on the standard of
care was necessary. Emer's Camper Corral, 386 Wis. 2d 592, ¶2, n.
1. It is unclear why the dissent discusses this issue inasmuch as
Camper Corral did not raise it in its petition for review and we
do not address it here. See dissent, ¶8.
6 All subsequent references to the Wisconsin Statutes are to
the 2017-18 version unless otherwise indicated.
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No. 2018AP458
verdict . . . ."). The court may grant the motion if it "is
satisfied that, considering all credible evidence and reasonable
inferences therefrom in the light most favorable to the party
against whom the motion is made, there is no credible evidence to
sustain a finding in favor of such party." § 805.14(1). Where
a circuit court grants a motion for a directed verdict, we will
uphold the circuit court's decision unless the circuit court was
clearly wrong. Gagliano & Co., Inc. v. Openfirst, LLC, 2014 WI 65,
¶30, 355 Wis. 2d 258, 850 N.W.2d 845 (citing Weiss v. United Fire
& Cas. Co., 197 Wis. 2d 365, 389, 541 N.W.2d 753 (1995)) (when
reviewing a "circuit court's decision to grant a directed verdict,
the verdict must stand unless the record reveals that the circuit
court was clearly wrong."). "A circuit court's evidentiary
determination is clearly wrong when there is any credible evidence
to support the position of the non-moving party." Gagliano, 355
Wis. 2d 258, ¶30.
¶16 Whether the circuit court applied the proper legal
standard in analyzing causation is a question of law we review de
novo. See State v. Greenwold, 181 Wis. 2d 881, 884-885, 512
N.W.2d 237 (Ct. App. 1994).
III. ANALYSIS
¶17 Camper Corral says it may have recovery against Mr.
Alderman because he acted negligently when he obtained an insurance
policy with higher than requested deductibles. A plaintiff
succeeds on such a claim by proving the standard quartet of
negligence elements, which in this case comprise: (1) Mr.
Alderman's duty of care to Camper Corral; (2) Mr. Alderman's breach
8
No. 2018AP458
of that duty; (3) injury caused by Mr. Alderman's breach; and (4)
actual loss or damage resulting from the injury. See Avery v.
Diedrich, 2007 WI 80, ¶20, 301 Wis. 2d 693, 734 N.W.2d 159;
Gritzner v. Michael R., 2000 WI 68, ¶19, 235 Wis. 2d 781, 611
N.W.2d 906; Robinson v. Mount Sinai Med. Ctr., 137 Wis. 2d 1, 15,
402 N.W.2d 711 (1987).
¶18 This case involves only the third of the four negligence
elements. To establish causation, Camper Corral must prove that
it would not have sustained its alleged $120,000 loss absent Mr.
Alderman's negligence. The loss in this case represents the
difference between the $125,000 aggregate deductible for which
Camper Corral was responsible under the 2013-2014 Western Heritage
policy and the $5,000 aggregate deductible for which it would have
been responsible if Mr. Alderman had procured a policy with the
terms Camper Corral requested.7
¶19 The circuit court granted a directed verdict because it
saw no evidence linking Mr. Alderman's breach to Camper Corral's
loss. It concluded that Mr. Alderman could not have caused the
loss because nothing in the record indicated that Camper Corral
would have qualified for a policy with the requested deductibles.
Camper Corral argues, however, that its insurability under the
requested terms is irrelevant. Instead, it says it need only
demonstrate that policies with the requested terms were
7 See, e.g., Appleton Chinese Food Serv., Inc. v. Murken Ins.,
Inc., 185 Wis. 2d 791, 808, 519 N.W.2d 674 (Ct. App. 1994)
("Damages arising out of a broker's failure to procure insurance
are commonly determined by the terms of the policy the agent failed
to procure.").
9
No. 2018AP458
commercially available. We will refer to this as the "commercial
availability" theory of causation. Alternatively, it says it can
prove a causal connection between Mr. Alderman's breach and its
losses based on its reliance on his representation that he had
obtained a policy with the requested deductibles. If it had known
Mr. Alderman had failed in that regard, Camper Corral says, it
could have changed its business practices during the 2013-2014
policy period to mitigate the vulnerability of its inventory to
hail damage. This is Camper Corral's "reliance" theory of
causation. We will address each of these theories in turn.
A. General Availability v. Particular Availability
¶20 With the exception of the court of appeals' opinion under
review, it appears there are no reported Wisconsin cases in which
the court has determined whether, in establishing causation under
the commercial availability theory, a policyholder must prove it
was insurable under the policy terms the broker was supposed to
obtain. So our analysis will begin with general principles of
causation and discern what lessons they have for us in these
circumstances. We will also consult the decisions of other courts
that have addressed themselves to this issue.
¶21 In negligence cases, "the test for causation is whether
the conduct at issue was a 'substantial factor' in producing
plaintiff's injury." Baumeister v. Automated Products, Inc., 2004
WI 148, ¶24, 277 Wis. 2d 21, 690 N.W.2d 1 (citing Estate of
Cavanaugh v. Andrade, 202 Wis. 2d 290, 306, 550 N.W.2d 103
(1996)). Or, in the negative formulation, we ask whether the loss
would have occurred even in the absence of Mr. Alderman's
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No. 2018AP458
negligence: "Causation is not established by testimony that even
without defendant's negligence, the harm would have occurred
anyway." Beacon Bowl, Inc. v. Wis. Elec. Power Co., 176
Wis. 2d 740, 788, 501 N.W.2d 788 (1993) (citing § 432(1),
Restatement (Second) of Torts (1965) ("[T]he actor's negligent
conduct is not a substantial factor in bringing about harm to
another if the harm would have been sustained even if the actor
had not been negligent.")).
¶22 Camper Corral's proposed "commercial availability" test
is, certainly, a necessary prerequisite to satisfying the
"substantial factor" standard of causation. After all, if the
insured requests a policy that is not available in the market, the
insured's harm comes from its unavailability, not from the broker's
failure to obtain what does not exist. So the desired policy must
be commercially available before the broker's failure can be a
substantial factor in causing the insured's loss. The question,
therefore, resolves to whether "commercial availability" is a
condition sufficient for that causal link.
¶23 We conclude that Camper Corral's "commercial
availability" standard does not fully answer whether the desired
policy was available within the meaning of the "substantial factor"
test. An insurance policy is not a mass-produced good or service
that is available to the public without regard for the
circumstances of the prospective purchaser. Instead, the
coverage, terms, and premium depend on factors specific to the
insured company, such as, for example, its claims history. See,
e.g., Leicht Transfer & Storage Co. v. Pallet Cent. Enters., Inc.,
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No. 2018AP458
2019 WI 61, ¶11, 387 Wis. 2d 95, 928 N.W.2d 534 (quoted source
omitted) (explaining that we do "'not interpret insurance policies
to provide coverage for risks that the insurer did not contemplate
or underwrite and for which it has not received a premium'"); see
also Certain Underwriters at Lloyd's v. Montford, 52 F.3d 219, 222
(9th Cir. 1995) (explaining that an insurance applicant's loss
history is a fact material to the risk). So when we say a policy
with certain deductible limits is "commercially available," what
we mean is that somewhere in the market there is an insurance
company willing to write that policy for a hypothetical company
with a hypothetical set of insurability factors.
¶24 But just because an insurance company would write a
specific policy for one company does not mean it would insure all
companies under the same terms. Consequently, "commercial
availability" of the policy requested by Camper Corral
establishes, at most, that some company somewhere could get the
desired deductible limits. It does not answer whether such a
policy was available to Camper Corral. So, if general commercial
unavailability prevents formation of a causal link between a
broker's negligence and an insured's loss, then it necessarily
follows that the policy's unavailability to Camper Corral in
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No. 2018AP458
particular must also prevent formation of a causal link.8 Whether
the unavailability is general, or instead particular to Camper
Corral, the policy's unavailability exists independently of any
negligence on behalf of the broker. And if that is so, then the
broker's negligence cannot be a substantial factor in producing
Camper Corral's loss because it would have occurred even if the
broker had not been negligent. See Beacon Bowl, Inc., 176
Wis. 2d at 788 ("Causation is not established by testimony that
even without defendant's negligence, the harm would have occurred
anyway.").
¶25 If we did not require Camper Corral to prove it could
have obtained a policy with the desired deductible limits, we would
create a substantive wrinkle in the burden of proof for this type
of case. Generally, we require a tort claimant to prove each
element of its claim by a preponderance of the evidence. See,
e.g., Atkinson v. Goodrich Transp. Co., 69 Wis. 5, 13, 31 N.W. 164
8 Tri-Town Marine, Inc. v. J.C. Milliken Agency, Inc., 924
A.2d 1066 (Me. 2007), provides additional instruction. In that
case, the insured asserted the commercial availability theory of
causation, despite conceding that the scope of coverage it sought
was "not offered by or available from any other insurer[.]" Id.
at 1069. The Supreme Judicial Court of Maine analogized the case
to legal malpractice cases "in which proof that better
representation would have brought about a more favorable outcome
is required." Id. at 1070.
Tri-Town Marine's analogy suggests that mere commercial
availability of the desired coverage is insufficient to establish
causation because it does not establish that a specific insured
would have had a more favorable outcome but for the insurance
agent's actions. The insured would not have a more favorable
outcome, of course, unless it was actually eligible for the desired
policy terms.
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No. 2018AP458
(1887) ("Negligence being an affirmative fact, necessary to be
proved by the plaintiff who alleges it, the universal rule is that
the plaintiff must prove the fact by a preponderance of the
evidence."); Zillmer v. Miglautsch, 35 Wis. 2d 691, 700, 151
N.W.2d 741 (1967) ("the plaintiff in a tort case does have the
burden of proof and, in meeting this burden, he must come forward
with evidentiary facts that establish the ultimate facts; and the
degree of proof must be such as to remove these ultimate facts
from the field of mere speculation and conjecture."); Ehlinger v.
Sipes, 155 Wis. 2d 1, 12, 454 N.W.2d 754 (1990) ("To establish
causation in Wisconsin, the plaintiff bears the burden of proving
that the defendant's negligence was a substantial factor in causing
the plaintiff's harm."); see also Wis JI——Civil 200 (2004)
(explaining that the burden of proof "is to satisfy [the
factfinder] by the greater weight of the credible evidence, to a
reasonable certainty . . . .").
¶26 But in asking us to accept "commercial availability" as
sufficient proof of causation, Camper Corral is actually asking us
to grant it an evidentiary presumption to help it bridge the gap
between general and particular availability of the desired
insurance policy. It says this presumption is necessary so that
we do not "impose [on the insured] the difficult task of having to
retroactively prove——often years later——that an individual
plaintiff could have obtained a better policy during the policy
period at issue." We do not think the difficulty of a task is a
sufficient basis for relieving a plaintiff of its duty to prove
the essential elements of its claim. Alternatively, Camper Corral
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No. 2018AP458
suggests we could make the presumption rebuttable by allowing the
insurer to prove the required policy was not actually available to
the insured. See, e.g., United Capitol Ins. Co. v. Kapiloff, 155
F.3d 488, 499 (4th Cir. 1998) (citing Patterson Agency, Inc. v.
Turner, 372 A.2d 258, 261 (Md. Ct. Spec. App. 1977)). This, of
course, would require proof of a negative. And because
insurability is not susceptible of generalizations, Mr. Alderman
would have to prove that no insurer in the market would insure
Camper Corral under the requested terms.
¶27 Aside from evidentiary difficulties, Camper Corral has
offered no rationale for either relieving it of its duty to prove
each element of its claim, or requiring Mr. Alderman to negate the
presumption in favor of causation. Therefore, we conclude that
the general principles governing proof of causation do not support
Camper Corral's "commercial availability" standard.
¶28 Nor do we find anything in prior opinions (either ours
or those of other courts) that suggests we should modify the
teaching of our general principles. Camper Corral directs our
attention to Kapiloff, in which the Fourth Circuit recognized that,
under Maryland law, "[t]he burden of proving the nonavailability
of insurance coverage is on the insurer or the broker, because it
is an affirmative defense that is within the peculiar knowledge of
those familiar with the market." 155 F.3d at 499 (citing
Patterson, 372 A.2d at 261). The Kapiloff court relied on
Patterson, a Maryland court of appeals opinion, which in turn
relied on an A.L.R. annotation for its reasoning. The annotation
describes "a split of authority . . . as to who bears the burden
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No. 2018AP458
of proof on the availability of insurance . . . ." Patterson, 372
A.2d at 261. The annotation observed that several jurisdictions
place the burden on the plaintiff:
In addition to being required to establish the existence
of a duty to procure insurance and its breach, the
plaintiff in an action against an agent or broker for
failure to procure insurance has often been required to
show that there was a casual (sic [causal]) relationship
between the negligence of the agent and the loss suffered
by the client. In several jurisdictions, the causation
requirement has been a formidable barrier to recovery,
which has prevented a finding of liability against the
agent or broker unless the client is able to clearly
show that were it not for the agent's negligence, he
would have been issued a valid policy which would have
protected him against the loss which he suffered.
Id. (footnote omitted) (citing MacDonald v. Carpenter & Pelton,
Inc., 31 A.D.2d 952 (N.Y. App. Div. 1969) and Pac. Dredging Co. v.
Hurley, 397 P.2d 819 (Wash. 1964)). But not all courts employ
that standard:
[A] few courts, recognizing that the question of whether
a valid policy would have been issued is a matter
peculiarly within the knowledge of the agent or broker,
have concluded that causation need not be proved by the
client and will only enter the case if the issue is
raised by the agent as an affirmative defense.
Patterson, 372 A.2d at 261 (citing Annot., 64 A.L.R. 3d 398, 407
(1975); Hans Coiffures Int'l, Inc. v. Hejna, 469 S.W.2d 38 (Mo.
App. 1971); Scott v. Conner, 403 S.W.2d 453 (Tex. Civ. App. 1966)).
¶29 In response to the annotation's content, the Patterson
court cryptically analogized the causation issue to a completely
unrelated affirmative defense. Specifically, it noted that when
concurrent causes result in a loss, one covered by the insurance
policy and one not, it is the insurer's burden to prove the loss
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No. 2018AP458
resulted from the non-covered cause. Based on this analogy, the
Patterson court concluded that the "burden of proving the non-
availability [of the requested insurance] should be shouldered by
the insurer, in the nature of an affirmative defense." Patterson,
372 A.2d at 261. So Patterson, and by extension Kapiloff, provide
guidance only if we were to conclude that Camper Corral's
insurability is a piece of information peculiarly within Mr.
Alderman's knowledge or that insurability is akin to a concurrent
causation question. But no party has alleged that Mr. Alderman
alone would know whether an insurance company would deem Camper
Corral insurable with the requested deductibles, and we discern
nothing so peculiar about this information that it could not be
established through alternative sources (such as other insurance
brokers or an expert witness). Further, the concurrent causation
analogy is inapt because, under those circumstances, the insured
still must prove the existence of a cause sufficient to explain
the loss. Here, however, the Patterson formulation would allow
Camper Corral to establish causation without ever proving an event
sufficient to result in its loss.
¶30 Camper Corral also cites Appleton Chinese Food Serv.,
Inc. v. Murken Ins., Inc., 185 Wis. 2d 791, 519 N.W.2d 674 (Ct.
App. 1994), and Rainer v. Schulte, 133 Wis. 130, 113 N.W. 396
(1907), as examples of recovery without proof of insurability under
more favorable terms. It acknowledges that neither case explicitly
addressed the question, and we agree with that assessment. In the
Appleton Chinese Food Service case, the court of appeals recounted
our prior statement that "'[a]n insurance broker is bound to
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No. 2018AP458
exercise reasonable skill and diligence in the transaction of the
business entrusted to him and he will be responsible to his
principal for any loss from his failure to do so . . . .'"
Appleton Chinese Food, 185 Wis. 2d at 802–03 (alteration in
original; one set of quotation marks omitted) (quoting Master
Plumbers Ltd. Mut. Liab. Co. v. Cormany & Bird, Inc., 79
Wis. 2d 308, 313, 255 N.W.2d 533 (1977)). As a general statement
of law, that is undoubtedly true. But the statement does not
extend far enough to address the question here, which is whether
the broker's failure was actually responsible for the insured's
loss.
¶31 We had no need to address the issue in Rainer because we
resolved the case on grounds that did not relate to the plaintiff's
insurability under the requested terms. There, we considered an
alleged insurance agent's agreement to obtain an insurance policy
for his customer, which he failed to do before the customer
suffered a loss that would have been covered by the policy. In
considering a challenge to the sufficiency of evidence in support
of the jury verdict, we said "it was immaterial whether the
defendant, at the time, had authority to represent and bind some
unnamed insurance company or some insurance agent. The defendant
certainly had authority to bind himself to procure such insurance."
Rainer, 113 N.W. at 397 (internal citations omitted). But that
statement responded to the alleged agent's defense that "at the
time of entering into said contract the defendant was not an
insurance agent, and was not authorized to enter into said contract
for or on behalf of any insurance company or person whatsoever[.]"
18
No. 2018AP458
Id. What we said about immateriality is good support for the
proposition that an alleged agent's lack of authority to obtain
insurance is not a bar to a successful claim. But it does not
necessarily support the proposition that a promise to obtain
insurance is actionable without regard to whether the person was
insurable. As a general rule, if a defendant does not contest a
complaint's specific allegation, it is taken as admitted and the
parties do not contest it further. See Wis. Stat. § 802.02(4).9
The Ranier opinion does not say whether the defendant had put the
plaintiff's insurability at issue, and so the opinion's silence on
that subject may simply reflect that the defendant conceded the
issue.
¶32 But just as there are no cases authoritatively
establishing that Camper Corral need not prove an insurer would
have written a policy with the requested deductibles, there are no
cases authoritatively establishing the converse. A majority of
jurisdictions require, at the very least, evidence that a policy
with the requested terms was commercially available. See, e.g.,
Hawk v. Roger Watts Ins. Agency, 989 So. 2d 584, 591 (Ala. Civ.
9 Wisconsin Stat. § 802.02(4) provides:
Averments in a pleading to which a responsive pleading
is required, other than those as to the fact, nature and
extent of injury and damage, are admitted when not denied
in the responsive pleading, except that a party whose
prior pleadings set forth all denials and defenses to be
relied upon in defending a claim for contribution need
not respond to such claim. Averments in a pleading to
which no responsive pleading is required or permitted
shall be taken as denied or avoided.
19
No. 2018AP458
App. 2008) (lack of evidence that the desired coverage was
commercially available resulted in inability to establish
causation); Johnson & Higgins of Alaska Inc. v. Blomfield, 907
P.2d 1371, 1374-75 (Alaska 1995) (explaining that the majority
rule requires evidence of commercial availability); Bayly, Martin
& Fay, Inc. v. Pete's Satire, Inc., 739 P.2d 239, 244 (Colo. 1987)
(requiring plaintiff to introduce evidence of commercial
availability before requiring defendant to introduce evidence of
noninsurability); Tri-Town Marine, Inc. v. J.C. Milliken Agency,
Inc., 924 A.2d 1066, 1069-1070 (Maine 2007) (collecting cases).
But as discussed above, "commercial availability," while a
necessary condition to a successful claim, is not necessarily a
sufficient condition.
¶33 We find the Minnesota case Melin v. Johnson, 387
N.W.2d 230 (Minn. Ct. App. 1986), particularly helpful in
addressing the question of general versus particular availability
of the requested policy terms. In Melin, the plaintiff sought
long-term disability coverage through his insurance agent. Id. at
231. The agent obtained coverage through a group policy because
the plaintiff was not insurable under an individual policy. Id.
But the agent did not tell Mr. Melin that his coverage under the
group policy was less favorable than what he had expected. Id.
So Mr. Melin sued his agent for his "negligen[ce] in failing to
inform [him] of limitations contained in the insurance policy he
procured." Id. at 232. With respect to Mr. Melin's "negligent
procurement" cause of action, the court said that, "[w]ithout some
evidence that reasonable care would have produced a better policy,
20
No. 2018AP458
there is no breach of duty under this doctrine." Id. A better
policy could not be produced, of course, unless the plaintiff was
actually insurable under the better terms. So the Melin court
concluded that "[i]f the jury's verdict was based on the theory
that [the agent] was negligent in his duty to procure insurance,
the evidence is conclusive against that verdict." Id. The same
result obtained with respect to the plaintiff's "negligent failure
to inform" cause of action.
¶34 Here in Wisconsin, we have hinted that availability of
the insurance policy to the particular plaintiff is important, not
just generalized commercial availability. In Wallace v.
Metropolitan Life Ins. Co., 212 Wis. 346, 248 N.W. 435 (1933), we
addressed causation in the context of an insurance company's
unreasonable delay in rejecting a life insurance application. In
that case, Mr. Bell, the prospective insured, did not know the
insurer had rejected his application before he died. Upon the
intended beneficiary's claim of negligence in notifying Mr. Bell
of the underwriting decision, the court concluded that "there is
no evidence tending to show that the assured could have obtained
other insurance of the same kind and character." Id. at 436
(emphasis added). Without such evidence, it was "evident that
plaintiff has proved no damages." Id. Our conclusion did not
depend on the general commercial availability of life insurance
21
No. 2018AP458
policies in the desired amount, but instead on whether Mr. Bell in
particular was insurable.10
¶35 Wallace and Melin are consistent with our general
principles regarding causation. "Causation is not established by
testimony that even without defendant's negligence, the harm would
have occurred anyway." Beacon Bowl, Inc., 176 Wis. 2d at 788. It
necessarily follows that if the harm would have occurred even in
the absence of the defendant's negligence, then it is impossible
for the negligence to have been a "substantial factor in producing
[plaintiff's injury]." Baumeister, 277 Wis. 2d 21, ¶24; see also
10Chief Justice Roggensack says Wallace v. Metropolitan Life
Ins. Co., 212 Wis. 346, 248 N.W. 435 (1933), "has no relevance"
because it addressed life insurance whereas this case addresses
casualty insurance. Dissent, ¶62. But she does not say why that
difference affects the proposition that there can be no causation
unless the plaintiff could have obtained a policy with the desired
terms.
The dissent prefers Kukuska v. Home Mut. Hail-Tornado Ins.
Co., 204 Wis. 166, 235 N.W. 403 (1931), in which we held that a
farmer had a good cause of action for an insurer's failure to
timely accept or reject an insurance application because, the
dissent says——quoting Kukuska——"'had [the farmer] been seasonably
notified, other insurance could have been readily obtained.'"
Dissent, ¶63 (citing Kukuska, 204 Wis. at 173-74) (brackets in
Chief Justice Roggensack's dissent). But the full sentence from
which the dissent takes that quote shows that the case does not
support the dissent's proposition. We said: "So that, upon any
theory, the defendant would be liable to the plaintiff for the
amount of damages sustained where it appeared, as the court found
in this case, that, had he been seasonably notified, other
insurance could have been readily obtained." Kukuska, 204 Wis. at
173-74 (emphasis added). This was not a normative statement; it
was instead an observation that the circuit court had found, in
that case, that the farmer could have readily obtained the
insurance. Not that it was commercially available, but that it
was obtainable. Camper Corral, of course, has not shown it could
obtain an insurance policy with the desired deductible terms.
22
No. 2018AP458
Bayly, 739 P.2d at 244 ("[E]vidence that the type of insurance
sought by the plaintiff was not generally available in the
insurance industry when the broker or agent procured the
plaintiff's insurance policy, or that, even if this type of
insurance was generally available, the plaintiff nonetheless was
uninsurable" precluded a finding of causation (emphasis added)).
¶36 Based on these principles, and fortified by both Wallace
and Melin, we conclude that Camper Corral cannot prove causation
under the commercial availability theory in the absence of evidence
that it was insurable under a policy with more favorable terms.
Evidence establishing mere commercial availability demonstrates
only that someone may qualify for insurance under the specified
terms. It does not establish that the desired insurance terms
were available to Camper Corral in particular. Without evidence
that an insurer would have written a policy for Camper Corral with
more favorable terms, it is not possible to say that Mr. Alderman's
negligence was a substantial factor in causing the loss, and no
such evidence exists in this case. As far as the state of the
record is concerned, it cannot be said that Camper Corral's loss
would not have happened in the absence of Mr. Alderman's
negligence. Indeed, Camper Corral's own expert testified that,
based on Camper Corral's claim history in 2011 and 2012, he did
not believe it would have qualified for a $1,000 hail deductible
per camper with a $5,000 total maximum deductible during the 2013-
2014 policy period. Therefore, the circuit court did not err in
holding there was no credible evidence from which the jury could
23
No. 2018AP458
find that Mr. Alderman's negligence caused Camper Corral's loss
under the commercial availability theory.11
¶37 Chief Justice Roggensack's dissent would make this an
entirely academic discussion by finding that Camper Corral proved
it was actually insurable under a policy with a $1,000 deductible
per unit and a $5,000 aggregate limit. Camper Corral did not make
that argument here, nor in the court of appeals, nor in the circuit
court. In fact, in the entire history of this case, Chief Justice
Roggensack is the only one who has suggested Camper Corral was
insurable under those terms. Even Mrs. Emer did not make this
claim in her testimony. What she said was that the summary sheet
from a Western Heritage insurance quote (Exhibit 103)12 led her to
believe that Camper Corral's insurance policy contained the
favorable deductible terms. But she never claimed the quote proved
11 Chief Justice Roggensack is worried that this conclusion
"is unnecessarily harsh on the consumer" because it "will immunize
misrepresentations by insurance agents who have superior knowledge
of how to search the insurance industry to determine whether the
insured was eligible for particularized insurance." Dissent, ¶61.
It is not harsh at all. It simply prevents a plaintiff from
imposing liability on a defendant for failing to procure something
for which the plaintiff was not eligible. If the insurance agent's
representations cause the insured to expose itself to risk it would
not have undertaken if it had known it was not eligible for the
requested insurance, the insured may have a reliance claim (as
described below). If we were to agree with the Chief Justice, we
would be awarding a windfall to Camper Corral by allowing it a
recovery when there is no evidence any company would have insured
it under the requested terms. Denying a recovery to which Camper
Corral is not entitled is not harsh, it is just.
12In the trial, Mrs. Emer actually referred to Exhibit 8,
which is the same as Exhibit 103. Exhibit 8 was not admitted into
evidence, so we refer to Exhibit 103 instead.
24
No. 2018AP458
she was actually insurable under a policy with the $1,000/$5,000
deductible terms. Nor did anyone else, until the Chief Justice's
dissent. Indeed, Camper Corral's attorney even conceded this
specific point when he acknowledged that if Camper Corral were
required to prove it could have obtained a better policy during
the 2013-2014 policy period, then "the claim fails."13
13Chief Justice Roggensack also finds significance in the
difference between Exhibit 103 (Western Heritage's quote from
August 2, 2013) and Exhibit 106 (Western Heritage's revised quote
from September 12, 2013). Based on those differences, the Chief
Justice concludes that "nevertheless, Michael Alderman increased
the deductible for hail damage. A review of Rhonda Emer's
testimony in regard to the $7,493 premium she believed she paid
and the coverage afforded by Exhibit 8, as also shown on Exhibit
103, comes in sharp contrast to the lower premium of Exhibit 106,
which has a higher hail damage deductible." Dissent, ¶58.
This is erroneous for two reasons. First, the differences in
the quotes are not necessarily attributable to some nefarious plan
executed by Mr. Alderman. There is a much more innocent
explanation, one offered by Mrs. Emer herself. She testified that
the first quote was not acceptable to her because she wanted the
policy's total coverage reduced from $800,000 to $300,000, and she
wanted the per camper coverage increased from $25,000 to $50,000.
So she rejected the quote contained in Exhibit 103.
Secondly, the Chief Justice's argument depends on the unsound
assumption that Exhibit 103 proves Camper Corral was, in fact,
eligible for $1,000/$5,000 deductible terms (which is not a
warranted assumption, as described above). Although it is true
that Exhibit 106 refers to the hail deductible on the summary page
and Exhibit 103 does not, that has nothing to do with what the
policy's actual terms would be. Both Exhibit 103 and Exhibit 106
indicate that the hail damage deductible would be found in Form
WHI 26-0496.
25
No. 2018AP458
B. Reliance
¶38 Alternatively, Camper Corral says it can establish a
causal connection between Mr. Alderman's negligence and its loss
through the principle of detrimental reliance. It refers us to
Runia v. Marguth Agency, Inc., 437 N.W.2d 45 (Minn. 1989), as an
example of how this principle would function in the context of a
broker's failure to obtain an insurance policy on the terms
requested by the insured. The case involved an insured's request
that his agent obtain coverage on a snowmobile he owned. Id. at
46-47. The insured told the agent that the policy should cover
himself, his daughter, and any other individual who may use the
snowmobile. Id. The agent obtained a policy and attached the
coverage to the insured's homeowner's policy. Id. at 47. The
insured then loaned the snowmobile to his daughter, who was injured
in an accident while riding it with her fiancé. Id. In the
ensuing lawsuit, the insured's daughter obtained a judgment
against the fiancé, but the insurance company denied coverage
because only the father was covered by the policy it wrote. Id.
The Chief Justice suggests that, in making this point, we are
not accounting for the binding nature of an insurance quote.
Dissent, ¶59. This is not about whether a quote is binding, it is
about what the quote's summary page says. The absence of a
separate hail deductible on the quote's summary page does not prove
the quote did not provide for a separate hail deductible. One of
the unavoidable aspects of a summary is that, by definition, it is
less than comprehensive. The absence of a piece of information on
the summary page is not evidence it does not exist elsewhere in
the quote, it is just evidence it didn't make it to the summary
page. And, as already mentioned, the quote did say the hail
deductible would be found in Form WHI 26-0496. So the absence of
the hail deductible on the summary page proves precisely nothing.
26
No. 2018AP458
The court agreed the insurance company had no duty to indemnify.
Id.
¶39 There then arose a second lawsuit, this time against the
insurance agent for negligently failing to obtain an insurance
policy on the requested terms. Upon the question of whether the
failure to procure an insurance policy on those terms caused the
loss, the Runia court held that if the plaintiffs had known they
did not have the coverage they believed they had, they simply could
have "elect[ed] not to engage in the uninsured activity." Id. at
49. Thus, the court stated that "[l]iability attaches
independently of whether any insurance policies would have
provided the requested coverage." Id.
¶40 Camper Corral says it could have altered its behavior,
just like the Runia plaintiffs could have, if it had known its
policy had deductible limits higher than requested. For example,
it says it could have reduced or eliminated its on-site inventory,
or stored its inventory under cover, or made alternate arrangements
with the supplier, or stopped selling new campers altogether. Any
of these alternatives, it argues, would have allowed Camper Corral
to minimize or eliminate its uninsured risk. And that, it
concludes, proves a causal connection between Mr. Alderman's
actions and its damages.
¶41 We do not preclude the possibility of proving causation
under the reliance theory, but we need not resolve the issue here.
Camper Corral offered the many ways by which it could have
mitigated or eliminated its exposure to high deductibles as
theoretical possibilities. But it referred to no evidence in the
27
No. 2018AP458
record to suggest it actually would have availed itself of one of
these methods of risk mitigation. Because the record contains no
evidence that Camper Corral would have changed its business
practices had it known of the higher deductibles, the circuit court
did not err in concluding there was no credible evidence of
causation.
C. Camper Corral Forfeited Its Alternate Theories of
Recovery
¶42 Finally, Camper Corral argues that it is entitled to
damages under the benefit of the bargain rule because its
Complaint, although asserting a single negligence cause of action,
can nevertheless be construed as having stated claims for breach
of contract and strict responsibility misrepresentation.
According to Camper Corral, these alternate theories of recovery
are available because the circuit court's decision was actually a
decision on a summary judgment motion rather than a motion for a
directed verdict. This is so, says Camper Corral, because the
circuit court relied on materials outside the trial record in
reaching its decision. We disagree, for two reasons.
¶43 First, the court of appeals properly analyzed Camper
Corral's argument that the circuit court actually decided the
motion as a request for summary judgment rather than a directed
verdict. See Emer's Camper Corral, LLC, 386 Wis. 2d 592, ¶13
(explaining that it would review the circuit court's ruling under
the directed verdict standard because the circuit court did not
cite evidence outside the trial record in the portion of its
written decision addressing Mr. Alderman's causation argument and
28
No. 2018AP458
that the expert deposition testimony the circuit court referenced
was read to the jury at trial). We agree with the court of appeals
and see no need to further expand upon its rationale.
¶44 Second, and perhaps more importantly, we will not
consider these issues because Camper Corral did not present them
to us in its petition for review. See Wis. Stat. § (Rule)
809.62(6) ("If a petition is granted, the parties cannot raise or
argue issues not set forth in the petition unless ordered otherwise
by the supreme court."). Here, Camper Corral's petition for review
identified one issue: "In a suit for failure to procure requested
insurance, must the plaintiff prove causal damages by showing she
could have personally obtained an insurance policy equal to or
better than the policy promised to her by her agent?" Camper
Corral acknowledges that its petition did not list its alternate
theories of recovery as reviewable issues, but says its summary of
its position in a lengthy footnote adequately preserved them for
presentation in their merits briefs. However, our order granting
review in this case said that Camper Corral "may not raise or argue
issues not set forth in the petition for review unless otherwise
ordered by the court . . . ." We have been presented with no
adequate reason for departing from the terms of our order, and
therefore will not address Camper Corral's alternative theories of
recovery.14
14The court of appeals likewise declined to address Camper
Corral's alternate arguments regarding breach of contract and
strict responsibility misrepresentation because Camper Corral
failed to raise the arguments in the circuit court. Emer's Camper
Corral, LLC, 386 Wis. 2d 592, ¶¶26-27.
29
No. 2018AP458
IV. CONCLUSION
¶45 In a cause of action for negligent procurement of an
insurance policy, the insured cannot establish the insurance
agent's negligence was a "substantial factor" in causing its loss
under the commercial availability theory without evidence that a
policy with the requested terms was available to the insured.15
Because Camper Corral failed to introduce any evidence that it was
eligible for an insurance policy with the requested deductible
limits, we conclude that the circuit court did not err in granting
Mr. Alderman's motion for a directed verdict.
By the Court.—The decision of the court of appeals is
affirmed.
15Our decision today does not foreclose the possibility of
establishing causation under the reliance theory.
30
No. 2018AP458.pdr
¶46 PATIENCE DRAKE ROGGENSACK, C.J. (dissenting). The
majority opinion is wrong on the law and wrong on the facts.
First, it creates a new and rigid evidentiary burden for causation
that immunizes an insurance agent's misrepresentations about the
insurance policy he said that he was providing and the policy he
actually provided, all at the expense of the consumer.1 Second,
even if I were to accept the new evidentiary burden the majority
opinion places on insureds, Rhonda Emer's trial testimony and trial
Exhibit 103 provided a factual basis to show that coverage with a
$1,000/$5,000 deductible for hail damage that she thought she
bought was commercially available and that Camper Corral was
eligible for that coverage during the 2013-14 policy term from
Western Heritage because those are the terms that were on the
exhibit provided to Camper Corral. Accordingly, I respectfully
dissent.
I. BACKGROUND
¶47 This case was tried, in part, before a jury based on
Camper Corral's claim that insurance agent, Michael Alderman,
negligently did not provide the insurance policy for Camper Corral
that he represented to Rhonda Emer that he was providing.2 Rhonda
Emer based her claim on statements that her insurance agent,
Michael Alderman, made orally and as provided in Exhibit 8, a quote
from Western Heritage that he reviewed with her at their meeting
for the 13/14 insurance renewal. In support of her belief that
1 Majority op., ¶3.
2 Rawle at 107, 65-66.
1
No. 2018AP458.pdr
she had purchased a 2013-14 year policy that had a $1,000 hail
damage deductible with a $5,000 cap (hereinafter $1,000/$5,000),
Rhonda Emer testified about deductibles for hail damage that she
believed Camper Corral purchased based on what Michael Alderman
told her and the quote from Western Heritage that he reviewed with
her:
Q. I am showing you now what has been marked as
Exhibit 8. Do you recognize that document? Just looking
at the first page, do you recognize this document, the
first page?
A. Yes, definitely.
Q. Can you describe what that first page is?
A. Yes, it's a cover letter from Jensen-Sundquist
signed by Michael Alderman.
Q. Okay. Do you recall receiving that?
A. Yes, I do.
Q. When did you receive it?
A. I received that at our meeting for the '13/'14
renewal.[3]
. . . .
Q. What is the date on the first page of Exhibit
No. 8?
A. August 6, 2013.[4]
. . . .
Q. I'd like to turn your attention to Page No. 2.
A. Okay.
3 Rawle at 107, 146.
4 Rawle at 107, 148.
2
No. 2018AP458.pdr
Q. Do you recognize that document?[5]
A. Yes, I do.
Q. And can you describe for the jury what that
document is?
A. This is a summary page, a declaration page
that is a snapshot of your deductibles for a certain
policy term.
Q. Okay. And what are your deductibles for wind
and hail?
A. Okay. Well, this is where it gets explained
to me by Mr. Alderman in person.
Q. I am asking you --
A. Okay.
Q. Review Page No. 2 of Exhibit 8, and tell me
what your deductibles are for wind and hail.
A. My deductible for wind and hail is $1,000 per
unit with a $5,000 maximum aggregate out-of-pocket.
. . . .
A. It says under dealer physical damage comp and
collateral 1,000/5,000.[6]
. . . .
Q. Is there anything in that document that
specifically defines what the deductible for hail would
be?
A. Yes. Under dealer physical damage comp and
collateral is marked as 1,000/5,000 maximum
aggregate.[ ]
7
. . . .
5 Id.
6 R. at 107, 149.
7 Id., 154.
3
 No. 2018AP458.pdr
Q. Okay. And during this conversation with
Mr. Alderman, when you saw Exhibit 8 for the very first
time, did you confirm with him -- did you ask him to
make sure that you only had a $1,000 hail deductible?
A. Oh, most certainly, and then he pointed it out
to me.[8]
. . . .
Q. Okay. And how long was it after that meeting
that you got the policy?
A. I never received the policy.
Q. Ever?
A. Not until I requested it after my hailstorm.
Q. When was your hailstorm?
A. September 3rd of 2014.[9]
. . . .
Q. And what is the premium for 2013-'14?
A. $5,200 plus -- well, actually it's more than
that. It's $7,493 . . . .[10]
Q. I am asking about the quote, Exhibit No. 8.
A. Yes.[11]
¶48 Through her testimony set out above, which is supported
by trial exhibits, Rhonda Emer explained at least two things that
are important to this appeal. First, her testimony and Exhibit
103, dated August 2, 2013 provided a factual basis to show that
Camper Corral was eligible for a $1,000/$5,000 hail damage
8 Id., 158.
9 Id., 163.
10 R. at 108, 9.
11 Id., 10.
4
 No. 2018AP458.pdr
deductible for the 2013-14 year, notwithstanding its history of
hail damage, because those are the terms that were on the exhibit
provided to Camper Corral.12 And second, the terms of what she
thought she bought in August 2013 changed between the time when
Michael Alderman reviewed the quote for the 2013-14 policy year
with her and when she made her claim for damages due to the
September 3, 2014 hail storm.13
II. DISCUSSION
A. Standard of Review
¶49 The circuit court dismissed this case based on a motion
for a directed verdict, pursuant to Wis. Stat. § 805.14(3), and on
summary judgment, pursuant to Wis. Stat. § 802.08, during a jury
trial. In either case, judgment cannot be granted to a movant if
there is any dispute of material fact. Anthony Gagliano & Co.,
Inc. v. Openfirst, LLC, 2014 WI 65, ¶¶30-32, 355 Wis. 2d 258, 850
N.W.2d 845.
¶50 Although we have said that an appellate court should not
overturn a circuit court's dismissal on directed verdict unless
the circuit court is "clearly wrong," a circuit court is clearly
wrong "when there is any credible evidence to support the position
of the non-moving party." Id., ¶30. Furthermore, we review
independently whether there is any credible evidence to support
the non-moving party's position. Id., ¶32.
¶51 We also independently review whether summary judgment
was properly granted, employing the same standards as the circuit
12 Id., Ex. 103.
13 Id., Ex. 106.
5
No. 2018AP458.pdr
court and the court of appeals, while "benefitting from their prior
discussions." Id., ¶33 (citing City of Janesville v. CC Midwest,
Inc., 2007 WI 93, ¶13, 302 Wis. 2d 599, 734 N.W.2d 428).
B. Directed Verdict/Summary Judgment
1. Directed verdict
¶52 The standard under which a directed verdict may be
granted during a jury trial is set out in Wis. Stat. § 805.14(3),
which provides:
At the close of plaintiff's evidence in trials to the
jury, any defendant may move for dismissal on the ground
of insufficiency of evidence. If the court determines
that the defendant is entitled to dismissal, the court
shall state with particularity on the record or in its
order of dismissal the grounds upon which the dismissal
was granted and shall render judgment against the
plaintiff.
In regard to the particularity for its decision, the circuit
court's Order of January 26, 2018 provided:
This Court does not find that Alderman's conduct
was so obviously negligent as a matter of law, as such,
expert testimony is necessary to ascertain whether
Alderman's conduct fell within the scope of the usual
care exercised by insurance professionals under the
circumstances. . . .[14]
In this case, Camper Corral has failed to produce
any evidence that a policy was available or could have
been available in the insurance market for the September
30, 2013-September 30, 2014 time period with a $1,000.00
per auto/camper deductible and a $5,000.00 aggregate for
wind, hail, earthquake, and flood for Camper Corral.
Further, Camper Corral has produced no evidence to
demonstrate that Michael Alderman misrepresented the
insurance coverage. . . .
Based on the evidence provided, along with the fact
that the cause of action pleaded by Camper Corral against
14 Rawle at 86, 3
6
No. 2018AP458.pdr
Alderman for professional negligence requires expert
testimony at the time of trial, and that Camper Corral
has failed to provide any evidence where a reasonable
jury could find that Alderman were a direct and proximate
cause to the damages sustained by Camper Corral, and
that expert testimony was needed to prove causation in
this matter, the Court grants Alderman's motion.
IT IS HEREBY ORDERED that: Judgment for the Defendant
is GRANTED.[15]
¶53 The circuit court's decision that dismissal was required
in part because Camper Corral did not provide expert testimony
about standards applicable to insurance agents is without legal
foundation and is clearly wrong in at least two respects. First,
no expert testimony is necessary to prove that an insurance agent
misrepresented the terms of the policy that he sold to an insured.
All that is needed to reach the jury on misrepresentation is trial
testimony showing Alderman made a representation of material fact;
it was untrue; Rhonda Emer believed the representation to be true;
and she reasonably relied on it to the damage of Camper Corral.
Whipp v. Iverson, 43 Wis. 2d 166, 169, 168 N.W.2d 201 (1969).
Benefit of the bargain is the legal measure of damages for
detrimental reliance, i.e., the difference between the payment
Camper Corral would have received for the 2014 hail damage if the
deductible had been $1,000/$5,000 and what she actually was paid.
Appleton Chinese Food Serv., Inc. v. Murken Ins., Inc., 185 Wis. 2d
791, 808, 519 N.W.2d 674 (Ct. App. 1994) (concluding that damages
are measured by the terms of the policy that the insurance agent
failed to provide). Michael Alderman asserted he did not represent
that the 2013-14 policy had hail damage deductible of
15 Id., 7.
7
 No. 2018AP458.pdr
$1,000/$5,000. This created a dispute of material fact that the
jury should have decided and on which no expert testimony was
required.
¶54 Second, Camper Corral's trial did produce evidence that
a policy with a $1,000/$5,000 deductible for hail damage was
commercially available and that Camper Corral was eligible to
purchase it. The circuit court, the court of appeals and the
majority opinion ignore Exhibits 103 and 10616 and Rhonda Emer's
testimony, which is repeated above, that discusses the Western
Heritage quote that Michael Alderman gave her shortly after August
6, 2013, which shows Camper Corral's eligibility for that policy
(Exhibit 8).17
¶55 Rhonda Emer's testimony points out differences in the
quotes: the dates are different, the premiums for the year are
different, and the statement about deductibles for hail damage are
different. Exhibit 103's quote is dated August 2, 2013 and Exhibit
106's quote is dated September 12, 2013. Exhibit 103 has a
$1,000/$5,000 deductible, without singling out hail damage, but
its premium for this coverage was $7,493 per year. Exhibit 106
has a notation at the bottom that said, "$5,000 DEDUCTIBLE APPLIES
TO WIND, HAIL, EARTHQUAKE AND FLOOD."18 However, with that
16 Michael Alderman identified Exhibit 106. R. at 108, 86.
Each of Western Heritage's quotes for Camper Corral is
17
titled "Garage Premium Summary." Exhibits 8, 103 and 106 are
quotes from Western Heritage.
This statement about deductibles was not on exhibit 8,
18
which Michael Alderman gave to her in early August 2013.
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additional clause limiting payment for hail damage, the annual
premium was reduced to $4,399.
¶56 To explain more fully, the hail damage larger deductible
shown on Exhibit 106 is not shown on Exhibit 103; the only notation
about deductibles on Exhibit 103 is $1,000/$5,000 for "Comp &
Coll." Hail is not mentioned. The policy premium shown on Exhibit
103 is $7,493, which is the amount that Rhonda Emer testified
Camper Corral paid. Therefore, Exhibit 10319 combined with Rhonda
Emer's testimony about Exhibit 8 shows that the deductible limits
that she thought Camper Corral had purchased were commercially
available from Western Heritage and Camper Corral was eligible for
them at the $7,493 premium she agreed to pay in early August 2013.
¶57 Michael Alderman testified that Camper Corral's premium
and coverage are shown in Exhibit 106, which is a quote stating,
"$5,000 DEDUCTIBLE APPLIES TO WIND, HAIL, EARTHQUAKE AND FLOOD"
for an annual premium of $4,399. The increased deductible for
hail damage and the lower premium on Exhibit 106 create a dispute
of material fact, as Rhonda Emer testified that she paid $7,493
for her 2013-14 insurance that provided a $1,000/$5,000 deductible
for hail damage.
¶58 In light of two previous hailstorms that each created
damage in excess of $100,000, reducing the deductible for hail
damage was a major concern for Rhonda Emer, but nevertheless,
Michael Alderman increased the deductible for hail damage. A
review of Rhonda Emer's testimony in regard to the $7,493 premium
she believed she paid and the coverage afforded by Exhibit 8, as
19 Michael Alderman identified Exhibit 103. R. at 108, 77.
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also shown on Exhibit 103, comes in sharp contrast to the lower
premium of Exhibit 106, which has a higher hail damage deductible.
¶59 The majority opinion's response to Rhonda Emer's
testimony is that Exhibit 103 is only a quote and therefore, it
"has nothing to do with what the policy's actual terms would be."20
However, an insurance quote is a proposal by an insurance company
of the terms under which it will provide insurance and the cost
thereof. Kimberly J. Winbush, Supplement, Validity, construction,
and effect of assault and battery exclusion in liability insurance
policey at issue, 44 A.L.R. 5th 91 (1996) (citing Regis Ins. Co.
v. All American Rathskeller, Inc., 976 A.2d 1157, 1167 (Pa. Super.
Ct. 2009) (discussing a "pre-insurance quote" that identified
subsequent limitations of the policy's coverage)). Accordingly,
the quote given to Rhonda Emer has probative value in regard to
the terms of the policy that she could expect would follow.
¶60 The majority opinion drifts into further error when it
fails to recognize that "there may be several substantial factors
contributing to the same result." Blashaski v. Classified Risk
Ins. Corp., 48 Wis. 2d 169, 175, 179 N.W.2d 924 (1970). As we
have explained, "[a]n injury may be produced by several substantial
factors, acting in sequence or simultaneously, and responsibility
need not be restricted to the last and most immediate factor."
Stewart v. Wulf, 85 Wis. 2d 461, 469, 271 N.W.2d 79 (1978)
(citation omitted). "Cause is a question for the jury unless the
facts are so clear that reasonable persons could not differ on the
question." Id. (citation omitted). Michael Alderman's failure to
20 Majority op., ¶37, n.13.
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provide the insurance policy he said he was providing is a
substantial factor in causing Camper Corral's damage.
¶61 Furthermore, although Camper Corral provided proof
sufficient to reach a jury on whether a policy with $1,000/$5,000
was commercially available and that Camper Corral was eligible to
obtain it, I object to those requirements becoming legal
requirements for causation in Wisconsin. The majority opinion is
unnecessarily harsh on the consumer and, as it has in this case,
will immunize misrepresentations by insurance agents who have
superior knowledge of how to search the insurance industry to
determine whether the insured was eligible for particularized
insurance.
¶62 In addition, the majority opinion relies on Wallace v.
Metro. Life Ins. Co., 212 Wis. 346, 248 N.W. 436 (1933), to reason,
"we have hinted that availability of the insurance policy to the
particular plaintiff is important, not just generalized commercial
availability."21 However, Wallace addressed life insurance for a
man with a known heart defect that permanently precluded his
insurability. Stated otherwise, Wallace could not change the
condition of his heart; it always would affect his insurability.
Therefore, Wallace's reasoning that "there is no evidence tending
to show that the assured could have obtained other insurance of
the same kind and character," id. at 350, has no relevance in
regard to insuring for hail damage. This is so because in any
given year, hail may not be a factor affecting property damage for
Camper Corral, but Wallace's heart condition always would be a
21 Majority op., ¶34.
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factor affecting his actuarial longevity. Also, Wallace
distinguished Kukuska v. Home Mut. Hail-Tornado Ins. Co., 204
Wis. 166, 235 N.W.403 (1931), which dealt with insurance coverage
more analogous to the case-at-hand.
¶63 In Kukuska, a farmer applied for crop insurance against
hail damage in early July of 1928. Id. at 167. On August 1, 1928,
the farmer was notified that his application had been rejected.
Id. at 168-69. That same day, a "violent hailstorm" damaged the
farmer's crops. Id. at 169. We concluded that "had [the farmer]
been seasonably notified, other insurance could have been readily
obtained" and we affirmed the judgment in favor of the farmer.
Id. at 173-74. We did not place the burden on Kukuska that the
circuit court placed and the majority opinion now places on Camper
Corral. Here there was no circuit court finding about whether
insurance with a $1,000/$5,000 deductible for hail damage could,
or could not, have been obtained. Rhonda Emer's testimony, quoted
above, simply was ignored.
¶64 The majority opinion presumes that reliance provides an
alternative theory for plaintiffs in insurance cases such as this,
which is why it concludes that its decision is not harsh on
consumers.22 It faults Rhonda Emer for not explaining what she
would have done differently had she realized that Camper Corral
was underinsured. But what she would have done would be
speculation because she believed Camper Corral was properly
insured until after the September 3, 2014 hail storm. Given the
22 Majority op., ¶36, n.11.
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vigorous defense that counsel for the defendants provided,
speculation would never have found its way to the jury.
¶65 And finally, were I writing for the majority, I would
conclude that once general commercial availability in the
insurance industry has been shown by the plaintiff, plaintiff has
satisfied its burden in regard to causation. Johnson & Higgins of
Alaska Inc. v. Blomfield, 907 P.2d 1371, 1374-75 (Alaska 1995);
Bayly, Martin & Fay, Inc. v. Pete's Satire, Inc., 739 P.2d 239,
244 (Colo. 1987). If it is raised, uninsurability then becomes an
affirmative defense for which the defendant bears the burden of
proof. Id. In that manner, the entirety of causation for alleged
negligence by an insurance agent can be placed before the finder
of fact.
2. Summary Judgment
¶66 We also have said that summary judgment, which rests on
a legal conclusion by the court, can rest on the same legal theory
as a directed verdict. Gagliano, 355 Wis. 2d 258, ¶32 (citing
Steven V. v. Kelly H., 2004 WI 47, ¶35, 271 Wis. 2d 1, 678 N.W.2d
856). Summary judgment is appropriate when there is no genuine
issue of material fact and the moving party is entitled to judgment
as a matter of law. Sands v. Menard, 2017 WI 110, ¶28, 379 Wis. 2d
1, 904 N.W.2d 789; Wis. Stat. § 802.08(2).
¶67 Wisconsin Stat. § 802.08(2) provides in relevant part:
The judgment sought shall be rendered if the pleadings,
depositions, answers to interrogatories, and admissions
on file, together with the affidavits, if any, show that
there is no genuine issue as to any material fact and
that the moving party is entitled to a judgment as a
matter of law.
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When a motion for summary judgment is made before trial, we begin
our review by determining whether the complaint and answer are
sufficient to join issue. Schwegel v. Milwaukee Cty., 2015 WI 12,
¶20, 360 Wis. 2d 654, 859 N.W.2d 78. Then, we examine the moving
party's affidavits that support the motion and affidavits that
oppose the motion. Id. Here, summary judgment was granted during
the course of a jury trial. Therefore, my starting point in this
discussion differs from Schwegel; however, the ultimate test
remains the same. Summary judgment can be granted only when there
is no dispute of material fact. Id.
¶68 Here, the circuit court ignored disputes of material
fact and, as a legal conclusion, held that judgment should be
entered for Michael Alderman. As I pointed out above, and will
not repeat here, there was credible evidence on disputes of
material fact, e.g., what did Michael Alderman tell Rhonda Emer
about the policy he sold to her. If the jury believed Rhonda
Emer's testimony and the related trial exhibits, the jury would
have ruled in her favor. Stated otherwise, taking all the
testimony in the light most favorable to Camper Corral, there is
no legal principle upon which Camper Corral's claim of negligent
misrepresentation should have been taken from the jury and decided
by a court in favor of Michael Alderman.
¶69 And finally, every court has jumped the gun on this
case: First, the circuit court, who seemed to believe that
everything an insurance agent says is ok unless there is an expert
opinion saying that the agent's statement was not ok; second, the
court of appeals, who decided the case by importing into Wisconsin
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No. 2018AP458.pdr
law a new and heavy evidentiary burden on causation for insureds
who were told one thing by their insurance agents and found the
policy they were sold contained something else; and third, the
majority opinion of this court, that affirms the court of appeals
new evidentiary burden for proof of causation, but ignores trial
court exhibits and testimony that show the evidentiary burden it
creates actually was met at trial.
III. CONCLUSION
¶70 In conclusion, the majority opinion is wrong on the law
and wrong on the facts. First, it creates a new and rigid
evidentiary burden for causation that immunizes an insurance
agent's misrepresentations about the insurance policy he said that
he was providing and the policy he actually provided, all at the
expense of the consumer.23 Second, even if I were to accept the
new evidentiary burden the majority opinion places on insureds,
Rhonda Emer's trial testimony and trial Exhibit 103 provide a
factual basis to show that coverage with a $1,000/$5,000 deductible
for hail damage was commercially available and that Camper Corral
was eligible for that coverage during the 2013-14 policy term
because those are the terms that were on the exhibit provided to
Camper Corral. Accordingly, I respectfully dissent.
23 Majority op., ¶3.
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