Case Title: Leicht Transfer & Storage Co. v. Pallet Central Enterprises, Inc.

Citation: 

Docket Number: 2016AP002334

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2019-05-31T00:00:00Z

Document:
2019 WI 61 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2016AP2334 
COMPLETE TITLE: 
Leicht Transfer & Storage Company, 
          Plaintiff-Appellant-Petitioner, 
     v. 
Pallet Central Enterprises, Inc., 
          Defendant, 
Travelers Property Casualty Company, Acuity, A 
Mutual Insurance Company and Hiscox Insurance 
Company Inc., 
          Defendants-Respondents. 
 
 
 
 
REVIEW OF DECISION OF THE COURT OF APPEALS 
Reported at 382 Wis. 2d 270,915 N.W.2d 729 
 (2018 – unpublished) 
 
 
OPINION FILED: 
May 31, 2019 
SUBMITTED ON BRIEFS: 
      
ORAL ARGUMENT: 
February 1, 2019 
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit 
 
COUNTY: 
Brown 
 
JUDGE: 
Marc A. Hammer 
 
 
 
JUSTICES: 
 
 
CONCURRED: 
      
 
DISSENTED: 
A.W. WALSH, J. dissents (opinion filed).  
 
NOT PARTICIPATING:          
 
 
 
ATTORNEYS: 
 
 
For the plaintiff-appellant-petitioner, there were briefs 
filed by George Burnett and Conway, Olejniczak & Jerry, S.C., 
Green Bay. There was an oral argument by George Burnett.   
 
 For the defendant-respondent Hiscox Insurance Company, 
Inc., there was a brief filed by Kris Bartos, and Jeffrey 
Leavell, S.C., Racine. There was an oral argument by Jeffrey 
Leavell. 
 
 
2019 WI 61
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2016AP2334 
 
(L.C. No. 
2015CV878) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Leicht Transfer & Storage Company, 
 
          Plaintiff-Appellant-Petitioner, 
 
     v. 
 
Pallet Central Enterprises, Inc., 
 
          Defendant, 
 
Travelers Property Casualty Company, Acuity, A 
Mutual Insurance Company and Hiscox Insurance 
Company Inc., 
 
          Defendants-Respondents. 
 
 
 
FILED 
 
May 31, 2019 
 
Sheila T. Reiff 
Clerk of Supreme Court 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed.   
 
¶1 
DANIEL KELLY, J.   Pallet Central Enterprises, Inc., 
("Pallet Central") forged certain delivery tickets and used them 
to bill Leicht Transfer & Storage Company ("Leicht") for the 
sale and delivery of pallets that Pallet Central never sold or 
delivered.  This case followed, and in the piece of it we 
address today, Leicht sought coverage for its losses under the 
No. 
2016AP2334 
   
 
2 
 
Commercial Crime Insurance Policy issued to it by Hiscox 
Insurance Company, Inc. ("Hiscox").  Specifically, Leicht 
asserts that the forged delivery tickets comprise "directions to 
pay" within the meaning of the "Forgery or Alteration" insuring 
agreement of the Hiscox policy.  We disagree, and so we affirm 
the court of appeals.1  
I.  BACKGROUND 
¶2 
Leicht provides warehousing services in the Green Bay 
area.  It uses pallets to assist in the storage and shipment of 
warehoused items.  Between January 2013 and February 2015, 
Leicht purchased pallets from Pallet Central.  The companies 
followed a standard practice for documenting these transactions 
for the purpose of inventory control and billing.  Part of that 
standard practice involved Pallet Central's preparation of a 
delivery ticket describing the shipment, including the type of 
pallets, the number to be delivered, the delivery date, and the 
identification number of the trailer conveying them.  The 
delivery ticket would accompany the truck driver making the 
shipment.  Upon delivery, a Leicht employee would verify the 
shipment and sign the delivery ticket.  The truck driver would 
then return a copy of the delivery ticket to Pallet Central, 
after which Pallet Central would prepare an invoice package.  
                                                 
1 This is a review of an unpublished per curiam opinion of 
the court of appeals, Leicht Transfer & Storage Co. v. Pallet 
Cent. Enter., No. 2016AP2334, unpublished slip op. (Wis. Ct. 
App. Apr. 25, 2018) (per curiam), which affirmed the Brown 
County Circuit Court, the Honorable Marc A. Hammer, presiding. 
No. 
2016AP2334 
   
 
3 
 
The package comprised an invoice, a copy of the signed delivery 
ticket, and a voucher.2  Pallet Central would then submit the 
invoice package to Leicht for payment.  Leicht would pay the 
invoice only if the package contained a copy of the signed 
delivery ticket.  Leicht would then bill its customers for, 
inter alia, the pallets it used in storing and shipping their 
goods. 
¶3 
Eventually, Leicht became aware that the number of 
invoice packages Pallet Central was submitting had dramatically 
increased.  Leicht's internal investigation revealed that many 
of the delivery tickets bore the apparent signatures of Leicht 
employees who could not possibly have executed the documents.  
Ultimately, Leicht concluded that the signatures were forged, 
and that it had consequently paid Pallet Central for pallets it 
never received.3  Leicht says Pallet Central submitted fraudulent 
invoice packages worth approximately $751,000.00, of which it 
paid approximately $505,000.00. 
                                                 
2 Leicht did not describe the voucher, and the sole invoice 
package in the Record contains only an invoice and delivery 
ticket.  Therefore, our analysis does not rely on the nature or 
content of the voucher.  We have included the invoice package as 
an appendix to our opinion.  We assume this invoice package is 
representative of all invoice packages submitted by Pallet 
Central to Leicht (aside from the question of forgery and the 
absence of the voucher). 
3 Leicht reported its findings to the DePere Police 
Department.  The investigating officer concluded that Leicht had 
been the victim of theft by use of fraudulent invoices.  Whether 
the delivery tickets at issue actually were forged is not before 
us, and we express no opinion on that question. 
No. 
2016AP2334 
   
 
4 
 
¶4 
Leicht submitted its loss to Hiscox pursuant to the 
terms of its Commercial Crime Insurance Policy (the "Policy").  
The relevant language, found in the "Forgery or Alteration" 
insuring agreement, states the following: 
(1) Checks 
We will pay for loss resulting directly from Forgery 
or alteration of checks, drafts, promissory notes, 
convenience checks, HELOC checks, or similar written 
promises, orders or directions to pay a sum certain in 
Money that are: 
(i)  Made or drawn by or drawn upon You; or 
(ii)  Made or drawn by one acting as Your 
agent; or that are purported to have been so 
made or drawn.[4] 
(Emphasis added).  Hiscox denied coverage, and Leicht sued.  It 
alleged Hiscox breached its contract, and asked the circuit 
court to declare that the Policy covers its losses from the 
forged delivery tickets.5 
¶5 
Hiscox moved for summary judgment, arguing that the 
Policy's "Forgery or Alteration" insuring agreement did not 
provide coverage because the forged delivery tickets were 
neither "checks" nor any of the other types of documents 
                                                 
4 The Policy emphasizes certain words to indicate they are 
defined terms.  We have omitted the emphasis to avoid a 
suggestion we are assigning particular importance to those 
words. 
5 Leicht also named two of its other insurers, as well as 
Pallet Central, as defendants.  However, Hiscox is the only 
defendant currently before the court, and so we do not address 
claims made against any other party. 
No. 
2016AP2334 
   
 
5 
 
identified by the Policy.  Hiscox also argued that the forged 
delivery tickets were not "drawn upon" Leicht, which it said is 
a prerequisite to coverage.  Leicht disagreed.  It said the 
Policy covers the delivery tickets because Pallet Central used 
them as a means of directing payment.  Therefore, it concluded, 
the Policy covers the delivery tickets as "directions to pay a 
sum certain in Money."6   
¶6 
The circuit court granted Hiscox's motion, concluding 
that the Policy's "Forgery or Alteration" insuring agreement did 
not provide coverage.  The court of appeals affirmed, explaining 
that the Policy "enumerate[s] specific covered instruments, 
including checks, drafts and promissory notes, and 'similar 
written promises, orders or directions to pay a sum certain' in 
money" and that "[t]he delivery tickets Leicht relies upon were 
not written promises, orders or directions to pay 'similar' to 
the enumerated documents covered under the polic[y]."  Leicht 
Transfer & Storage Co. v. Pallet Cent. Enter., No. 2016AP2334, 
unpublished slip op., ¶11 (Wis. Ct. App. Apr. 25, 2018) (per 
curiam).  The court of appeals said the forged delivery tickets 
"were merely evidence of a claim that pallets were delivered by 
Pallet Central to Leicht."  Id., ¶¶12-13. 
                                                 
6 To the extent Leicht previously argued that coverage 
exists under other portions of the Hiscox policy, those 
arguments are not before this court and we therefore consider 
only the coverage question presented.  See, e.g., A.O. Smith 
Corp. 
v. 
Allstate 
Ins. 
Cos., 
222 
Wis. 2d 475, 
491, 
588 
N.W.2d 285 (Ct. App. 1998) ("[A]n issue raised in the trial 
court, but not raised on appeal, is deemed abandoned."). 
No. 
2016AP2334 
   
 
6 
 
¶7 
Leicht's 
petition 
for 
review 
asserted 
that 
the 
Policy's coverage of "similar written promises, orders or 
directions to pay a sum certain" is a "recipe for ambiguity" 
because "[n]othing in the policy alerts the policyholder how or 
why other forged documents might be similar."  We granted 
Leicht's petition and now hold that the Policy does not afford 
the coverage Leicht seeks because Pallet Central's delivery 
tickets are not "written . . . directions to pay a sum certain 
in Money."  
II.  STANDARD OF REVIEW 
No. 
2016AP2334 
   
 
7 
 
¶8 
We review the disposition of a motion for summary 
judgment de novo, applying the same methodology the circuit 
courts apply.  Green Spring Farms v. Kersten, 136 Wis. 2d 304, 
315, 401 N.W.2d 816 (1987).  While our review is independent 
from the circuit court and court of appeals, we benefit from 
their analyses.  See Preisler v. Gen. Cas. Ins. Co., 2014 
WI 135, ¶16, 360 Wis. 2d 129, 857 N.W.2d 136.  Summary judgment 
is appropriate only "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 
judgment as a matter of law."  Wis. Stat. § 802.08(2) (2017-18); 
see also Columbia Propane, L.P. v. Wis. Gas Co., 2003 WI 38, 
¶11, 261 Wis. 2d 70, 661 N.W.2d 776 (quoting and applying Wis. 
Stat. § 802.08(2) (2001-02)). 
¶9 
The interpretation of an insurance policy presents a 
question of law.  Water Well Sols. Serv. Grp. Inc. v. Consol. 
Ins. Co., 2016 WI 54, ¶12, 369 Wis. 2d 607, 881 N.W.2d 285.  We 
review such questions de novo.  Id. 
III.  ANALYSIS 
¶10 The Policy contains three relevant requirements that 
Leicht must satisfy before it is entitled to coverage for its 
losses.  First, it must demonstrate that a "delivery ticket" is 
the type of document encompassed by the Policy's insuring 
agreement.  Second, it must show that the delivery tickets were 
"[m]ade or drawn by or drawn upon [Leicht]; or [m]ade or drawn 
No. 
2016AP2334 
   
 
8 
 
by one acting as [Leicht's] agent; or that are purported to have 
been so made or drawn."  And third, it must establish that the 
payments it made to Pallet Central constitute a "loss resulting 
directly" from the forgery.  To evaluate these requirements, we 
must discern the meaning of the Policy's insuring agreement, and 
how its terms apply to the facts of this case. 
¶11 Our goal in interpreting and applying an insurance 
policy's terms is the same as it is in addressing any other 
contract:  To "effectuate the intent of the contracting 
parties."  Estate of Sustache v. Am. Family Mut. Ins. Co., 2008 
WI 87, ¶19, 311 Wis. 2d 548, 751 N.W.2d 845 (citations omitted).  
In doing so, we construe insurance contracts "as they would be 
understood by a reasonable person in the position of the 
insured[,]" yet we will "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."  Am. 
Family Mut. Ins. Co. v. Am. Girl, Inc., 2004 WI 2, ¶23, 268 
Wis. 2d 16, 
673 
N.W.2d 65 
(citations 
omitted). 
 
We 
will 
interpret 
undefined 
words 
and 
phrases 
as 
they 
would 
be 
understood by a reasonable insured, Bethke v. Auto-Owners Ins. 
Co., 2013 WI 16, ¶22, 345 Wis. 2d 533, 825 N.W.2d 482, and "[w]e 
give undefined words and phrases their common and ordinary 
meaning."  Day v. Allstate Indem. Co., 2011 WI 24, ¶28, 332 
Wis. 2d 571, 798 N.W.2d 199.  "If the undefined language is 
ambiguous, we will construe it in favor of the insured to afford 
coverage."  Bethke, 345 Wis. 2d 533, ¶22.  A term or phrase is 
No. 
2016AP2334 
   
 
9 
 
ambiguous only if it is "'fairly susceptible to more than one 
reasonable interpretation.'"  Wilson Mut. Ins. Co. v. Falk, 2014 
WI 136, ¶24, 360 Wis. 2d 67, 857 N.W.2d 156 (citation omitted). 
¶12 We begin our analysis with Leicht's position that 
"delivery tickets," when combined with corresponding invoices, 
are included in the type of documents the Policy covers.  The 
insuring agreement describes covered documents as "checks, 
drafts, promissory notes, convenience checks, HELOC checks, or 
similar written promises, orders or directions to pay a sum 
certain in Money."  Because Leicht says the delivery tickets are 
covered as "directions to pay a sum certain in Money," this part 
of the inquiry actually involves two steps.  First, we must 
determine whether a delivery ticket is, in fact, a direction to 
pay a sum certain in money (alone or in conjunction with an 
invoice).  If it is, then we must consider whether it is 
"similar" to "checks, drafts, promissory notes, convenience 
checks, [or] HELOC checks."  It is a covered document only if it 
meets both criteria. 
¶13 Neither party has suggested the phrase "directions to 
pay a sum certain in Money" is ambiguous.  And as the following 
analysis will demonstrate, we espy no ambiguity in it either.  
Therefore, we "interpret the policy according to its plain and 
ordinary meaning to avoid imposing contract obligations that the 
parties did not undertake."  Frost ex rel. Anderson v. Whitbeck, 
2002 WI 129, ¶17, 257 Wis. 2d 80, 654 N.W.2d 225.  The plain and 
ordinary meaning of the phrase unmistakably indicates that, by 
No. 
2016AP2334 
   
 
10 
 
themselves, the delivery tickets are not "directions to pay a 
sum certain in Money."  The documents' most obvious defect in 
this regard is that they contain no directions to pay.  They 
are, instead, simple statements that Pallet Central delivered a 
certain type and number of pallets on a particular day.  To the 
extent the delivery tickets contain any directions at all, they 
are as follows: 
[Leicht] [m]ust notify us of any quantity disputes 
and/or quality matters within 72 hours of delivery or 
credit will not be issued. 
Please use our tickets for DELIVERIES and PLEASE make 
three (3) copies, one for you, one for the customer 
and one for the driver.  Have the driver fill out the 
ticket (truck #, trailer # and driver signature).  
Then PLEASE fax the filled out ticket back to me at 
[###-###-####]. 
With respect to payment, they are entirely inert, and contain no 
motive force whatsoever by which to direct anyone to pay 
anything. 
¶14 The delivery tickets also conspicuously lack any 
reference to a "sum certain."  In fact, they do not reference an 
amount due, or even a calculation by which one may arrive at an 
amount due.  Indeed, they say nothing about currency, payment, 
or anything else one might associate with money, much less a 
"sum certain."  Leicht conceded this point at oral argument, and 
further admitted it would not have paid Pallet Central if it had 
presented nothing but a delivery ticket.  The unavoidable 
conclusion, therefore, is that a delivery ticket——by itself——is 
not a direction to pay a sum certain in money. 
No. 
2016AP2334 
   
 
11 
 
¶15 Nor does a delivery ticket become a direction to pay 
when bundled with a corresponding invoice.  Leicht acknowledged 
that an invoice is a request for payment, not a direction to 
pay.  So if the delivery ticket becomes a direction to pay when 
attached to an invoice, the combination must be capable of 
making the invoice package greater than the sum of its parts.  
But Leicht did not explain how combining the two would turn one 
of them (or both) into a direction to pay a sum certain in 
money.  The best it could offer was this:  "Without the signed 
ticket Pallet Central could not be paid.  Indeed, that is why 
Pallet Central forged those tickets in the first place."  That 
is likely so, and we accept Leicht's reasoning for the purpose 
of this analysis.  But it cannot carry the weight of its 
argument.  Leicht's explanation describes a document evidencing 
Pallet Central's satisfaction of a condition precedent to 
payment.  Just because the signed delivery ticket is a 
prerequisite to payment, however, does not transform it (or the 
combined documents) into a direction to pay a sum certain in 
money.  The delivery ticket does not affect the invoice's nature 
(it is still a request), and the invoice does not create terms 
in the delivery ticket that were not there before (it still 
directs no payment, much less a sum certain).  Combined, the 
documents retain the same characteristics that defined them 
separately:  A request for payment, and proof of delivery.  
Consequently, the delivery ticket——whether taken on its own 
No. 
2016AP2334 
   
 
12 
 
terms or in conjunction with an invoice——is not a direction to 
pay a sum certain in money. 
¶16 That, however, does not address Leicht's position in 
full.  A close examination of its arguments reveals that Leicht 
did not explicitly claim that a delivery ticket is a direction 
to pay.  Instead, it said "the delivery ticket[s] represented a 
direction to pay," and that "the parties used these delivery 
tickets to direct payment from Leicht's finance department," and 
that the "tickets served as a written direction to Leicht's 
bursar to pay Pallet Central's invoices."  That is to say, 
Leicht asserts that delivery tickets function as a direction to 
pay. 
¶17 The distinction is subtle, but no less real for that.  
And that distinction helps illustrate why there can be no 
coverage for the forged delivery tickets.  It is a commonplace 
that what something "is" can differ from the function to which 
it is put.  An object might be a chair, and at times function as 
a very short ladder.  But that does not mean the chair is a 
ladder.  And if an insurance policy insures only against the 
loss of ladders, the chair owner will be disappointed.  Here, 
the Policy applies to forgery of "directions to pay a sum 
certain in Money."  As discussed above, the delivery tickets are 
unquestionably not that.  Therefore, there can be no coverage 
unless the Policy applies to writings that are not "directions 
to pay," but which are nonetheless used for that purpose.  We 
see nothing in the Policy, however, that grants coverage to 
No. 
2016AP2334 
   
 
13 
 
documents not covered by its terms, but which are used as 
functional proxies for documents that are covered by its terms.  
So when Leicht says "the delivery tickets functioned as a 
direction to make payment, just as the policies required," it is 
mistaken.  The Policy required a direction to pay, not a stand-
in for a direction to pay.7 
* 
                                                 
7 For a similar reason, the dissent's analysis cannot reach 
Leicht's preferred end.  The author says:  "Examining the policy 
language in light of the parties' habitual practice, and 
consistent with this court's precedent, I arrive at the opposite 
conclusion."  Dissent, ¶22.  The insurance policy, of course, 
does not insure against loss caused by "Forgery or alteration" 
of Leicht and Pallet Central's "habitual practice."  It insures 
against loss from "Forgery or alteration" of specifically 
described documents, of which a delivery ticket is not one. 
The key explanation the dissent offers for its contrary 
conclusion is this: 
"[I]f it looks like a duck, swims like a duck, and quacks 
like a duck, then it probably is a duck." This test 
suggests that something can be identified by its habitual 
characteristics, i.e. how it routinely functions. 
Id., ¶34.   
The point of the "duck" exercise is not to equate two 
things that are not the same.  It is to identify what something 
really is.  That is, one does not build an animatronic duck, set 
it afloat in a puddle with a quack soundtrack, and conclude it 
is an actual member of the Anatidae family.  But that is what 
the dissent proposes here.  Leicht and Pallet Central may have a 
private understanding that they will act as though the delivery 
ticket is a direction to pay a sum certain.  But that does not 
mean we (and Hiscox) must conclude it is such a document any 
more 
than 
an 
ornithologist 
must 
conclude 
the 
floating 
fabrication actually is a duck. 
No. 
2016AP2334 
   
 
14 
 
¶18 If we had concluded that the delivery tickets, alone 
or in conjunction with corresponding invoices, constituted 
"directions to pay," we then would have needed to consider 
whether the Policy's insuring agreement covered only those 
"directions to pay" that are similar to the specifically 
identified documents (i.e., checks, drafts, promissory notes, 
convenience checks, or HELOC checks).  We also would have needed 
to determine whether they had been "[m]ade or drawn by or drawn 
upon" Leicht, or were "[m]ade or drawn by one acting as 
[Leicht's] agent; or that [were] purported to have been so made 
or drawn."  And finally, we would have needed to determine 
whether the payments induced by the forged delivery tickets 
comprised losses "resulting directly from" the forgery.  But all 
of these issues are contingent on having discerned a "direction 
to pay" in the forged delivery tickets.  Because we did not, we 
have no need to examine these additional issues.  Am. Girl, 
Inc., 268 Wis. 2d 16, ¶24 ("If it is clear that the policy was 
not intended to cover the claim asserted, the analysis ends 
there."). The Policy's insuring agreement does not encompass the 
forged delivery tickets, and we may not add coverage for which 
the parties did not bargain.  Id., ¶23 (citations omitted) 
("[W]e 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.").  Consequently, 
Leicht's quest for coverage must end. 
IV.  CONCLUSION 
No. 
2016AP2334 
   
 
15 
 
¶19 We conclude that the Policy unambiguously demonstrates 
that the delivery tickets at issue in this case, either alone or 
in combination with corresponding invoices, do not qualify as 
"written . . . directions to pay a sum certain in Money."  
Further, we conclude that the Policy does not provide coverage 
for forged documents that are not themselves "directions to 
pay," but which are used as proxies for such documents.  Summary 
judgment for Hiscox was, therefore, appropriate.  We affirm the 
court of appeals. 
By the Court.—The decision of the court of appeals is 
affirmed. 
 
 
No. 
2016AP2334 
   
 
 
 
1
 
 
No. 
2016AP2334 
   
 
 
 
2
 
No.  2016AP2334.awb 
 
1 
 
¶20 ANN WALSH BRADLEY, J.   (dissenting).  This case arose 
after Pallet Central Enterprises, Inc. submitted fraudulent 
invoices to Leicht Transfer & Storage Company for nonexistent 
pallets that were never delivered.  Majority op., ¶3.  Leicht 
purchased a crime insurance policy to protect itself against 
precisely this type of fraudulent activity.  Nevertheless, the 
majority denies coverage, sticking Leicht with a half million 
dollar bill for losses that resulted from Pallet Central 
Enterprises, Inc.'s fraudulent scheme. 
¶21 The 
majority 
can 
reach 
its 
conclusion 
only 
by 
disregarding 
long-held 
principles 
of 
insurance 
policy 
interpretation——which 
we 
call 
precedent. 
 
It 
is 
firmly 
established 
that 
an 
insurance 
policy's 
terms 
are 
to 
be 
interpreted as they would be understood from the perspective of 
a reasonable person in the position of the insured.  Shugarts v. 
Mohr, 2018 WI 27, ¶20, 380 Wis. 2d 512, 909 N.W.2d 402 (citation 
omitted).  Likewise, it is well-settled that ambiguity in an 
insurance policy is construed in favor of an insured seeking 
coverage.  Olson v. Farrar, 2012 WI 3, ¶42, 338 Wis. 2d 215, 809 
N.W.2d 1 (citation omitted). 
¶22 Casting 
these 
principles 
aside, 
the 
majority 
determines that Leicht is not entitled to insurance coverage for 
losses incurred due to the fraudulent actions of Pallet Central.  
Examining the policy language in light of the parties' habitual 
practice, and consistent with this court's precedent, I arrive 
at the opposite conclusion. 
¶23 Accordingly, I respectfully dissent. 
No.  2016AP2334.awb 
 
2 
 
I 
¶24 For a period of over two years, Leicht purchased 
pallets for its warehouse from Pallet Central.  Majority op., 
¶2.  As the majority accurately details, Leicht and Pallet 
Central "followed a standard practice for documenting these 
transactions for the purpose of inventory control and billing."  
Id. 
¶25 Pursuant to this practice, each time Pallet Central 
made a delivery of pallets, it would give to Leicht a delivery 
ticket.  Id.  The delivery ticket described the shipment of 
pallets, identified the number of pallets delivered, specified 
the delivery date, and provided the identification number of the 
trailer on which the pallets arrived.  Id.  A Leicht employee 
would then sign the delivery ticket, indicating the pallets had 
been received.  Id. 
¶26 After the delivery ticket had been signed, Pallet 
Central would prepare an invoice package that included the 
signed delivery ticket.  Id.  Leicht would then pay Pallet 
Central for the delivery, but only if the invoice was 
accompanied by a signed delivery ticket.  Id. 
¶27 When it came to light that Pallet Central submitted 
invoices to Leicht for nonexistent pallets that were never 
delivered, an investigation ensued.  It revealed that Leicht 
employees' signatures on the delivery tickets had been forged.  
Id., ¶3.  This caused Leicht to suffer a loss of approximately 
$505,000 from paying the fraudulent invoices.  Id. 
No.  2016AP2334.awb 
 
3 
 
¶28 Leicht carried a crime insurance policy.  As relevant 
here, the policy provides: 
(1) Checks 
We will pay for loss resulting directly from Forgery 
or alteration of checks, drafts, promissory notes, 
convenience checks, HELOC checks, or similar written 
promises, orders or directions to pay a sum certain in 
Money that are: 
(i) 
Made or drawn by or drawn upon You; or 
(ii) 
Made or drawn by one acting as Your agent; 
or that are purported to have been so made or 
drawn. 
¶29 The majority determines that Leicht is not entitled to 
coverage under this provision of the policy.  It concludes that 
a "delivery ticket——whether taken on its own terms or in 
conjunction with an invoice——is not a direction to pay a sum 
certain in money."  Majority op., ¶15.  In the majority's view, 
the delivery ticket contains no direction to pay and no 
reference to a sum certain.  Id., ¶14.  Further, it opines that 
coverage does not attach to a signed delivery ticket that 
functions as a direction to pay, but is not itself a direction 
to pay.  Id., ¶¶16-17. 
II 
¶30 As I see it, the language of the policy creates 
several conditions that the signed delivery ticket at issue in 
this case must fulfill in order for coverage to attach.  First, 
the signed delivery ticket must be a written promise, order or 
direction to pay a sum certain in money.  Second, it must be 
similar to a check, draft, promissory note, convenience check, 
No.  2016AP2334.awb 
 
4 
 
or HELOC checks.  Finally, as provided in the crime insurance 
policy, the signed delivery ticket must be "[m]ade or drawn by 
or drawn upon [Leicht], [m]ade or drawn by one acting as 
[Leicht's] agent; or [was] purported to have been so made or 
drawn."1 
A 
¶31 I address first whether a signed delivery ticket is, 
as interpreted by reasonable person in the position of the 
insured, a "direction to pay" a sum certain in money. 
¶32 It is imperative that our review of the language of an 
insurance policy be through the lens of a reasonable insured.  
Shugarts, 380 Wis. 2d 512, ¶20.  The insured, Leicht, was 
engaged in a repeated and specific process by which payment was 
directed by the submission of certain documents, namely a signed 
delivery ticket and invoice. 
¶33 Given the habitual practice the parties followed in 
their transactions, a reasonable insured in Leicht's position 
would understand that a signed delivery ticket serves as a 
"direction to pay."  Indeed, the record reflects that an 
unsigned delivery ticket would not be paid, unlike a signed 
ticket that would be paid.  Accompanying a signed delivery 
ticket is an invoice containing a sum certain for payment.  The 
parties' habitual routine was that this package of documents 
would direct that payment be made. 
                                                 
1 Because it determines that a signed delivery ticket is not 
a direction to pay a sum certain in money, the majority does not 
address the second and third issues I raise.   
No.  2016AP2334.awb 
 
5 
 
¶34 The majority departs from the language as viewed by a 
reasonable insured engaging in the habitual practice of these 
parties.  Simply put, its technical and theoretical distinction 
between what a signed delivery ticket "is" and its "function" 
not 
only 
discards 
our 
precedent 
on 
insurance 
policy 
interpretation, but it also fails an elementary test.  See 
majority op., ¶¶16-17.  Namely, "if it looks like a duck, swims 
like a duck, and quacks like a duck, then it probably is a 
duck."  This test suggests that something can be identified by 
its habitual characteristics, i.e. how it routinely functions. 
¶35 The bottom line is that the habitual practice of the 
parties established that a signed delivery ticket directed 
payment.  It is from this perspective that we must examine the 
policy's language.  Viewing the parties' habitual practice from 
Leicht's point of view, I determine that a signed delivery 
ticket fulfills the policy's requirement of a "direction to pay" 
a sum certain in money. 
B 
¶36 I turn next to address whether a signed delivery 
ticket is "similar" to the instruments listed in the policy:  
checks, drafts, promissory notes, convenience checks, or HELOC 
checks. 
¶37 In 
addressing 
this 
question, 
another 
maxim 
of 
insurance policy interpretation must be considered.  Namely, 
ambiguous terms must be construed in favor of coverage, and 
against the drafter.  Olson, 338 Wis. 2d 215, ¶42; see Maryland 
No.  2016AP2334.awb 
 
6 
 
Arms Ltd. P'ship v. Connell, 2010 WI 64, ¶44, 326 Wis. 2d 300, 
786 N.W.2d 15 (citation omitted). 
¶38 The policy uses the term "similar."  Inherent in the 
term "similar" is a certain amount of ambiguity.  It begs the 
question, how similar is similar enough?  The text of the policy 
provides no guidance. 
¶39 As 
Leicht 
aptly 
argued 
in 
its 
brief, 
"[n]o 
policyholder can know with certainty what documents are similar 
to a check, to a draft, or to a promissory note, and conversely, 
no policyholder can surmise what written 'promises, orders, or 
directions for payment' are too dissimilar for coverage to 
apply." 
¶40 I agree with Leicht.  As analyzed above, a reasonable 
insured would believe that a signed delivery ticket "directs 
payment" within the language of the policy.  But under the 
language of this policy, a policyholder is left guessing whether 
such a "direction to pay" is covered if it is not explicitly 
listed.  Construing the ambiguity in favor of coverage, as our 
precedent requires, I determine that a signed delivery ticket 
fulfills the policy's "similarity" requirement. 
C 
¶41 The next inquiry raised by the policy language is 
whether the signed delivery ticket is "[m]ade or drawn by or 
drawn upon [Leicht], [m]ade or drawn by one acting as [Leicht's] 
agent; or [was] purported to have been so made or drawn." 
No.  2016AP2334.awb 
 
7 
 
¶42 Leicht alleges that the signatures of Leicht employees 
on delivery tickets were forged.  That is, the signatures were 
"purported to have been" made by Leicht employees. 
¶43 Further, the forged signatures were purportedly made 
by Leicht employees acting as Leicht's agents.  "Agent" is not a 
defined term in the policy, meaning that we interpret it as it 
would be understood by a reasonable insured.  Acuity v. Bagadia, 
2008 WI 62, ¶13, 310 Wis. 2d 197, 750 N.W.2d 817 (citation 
omitted). 
¶44 An employee acting on behalf of an employer is the 
employer's agent.  See Romero v. West Bend Mut. Ins. Co., 2016 
WI App 59, ¶39, 371 Wis. 2d 478, 885 N.W.2d 591 (citation 
omitted).  By forging signatures on delivery tickets, Pallet 
Central employees purported to be acting as Leicht employees, 
thereby confirming receipt of pallets that were never delivered 
and directing Leicht to pay for them. 
¶45 In sum, properly examining the policy as would a 
reasonable person in the position of the insured, I conclude 
that all conditions for coverage are fulfilled.  Specifically, a 
forged signed delivery ticket is a similar written promise, 
order or direction to pay a sum certain that was purported to 
have been made by Leicht's agent. 
¶46 Accordingly, I respectfully dissent. 
 
No.  2016AP2334.awb 
 
1