Case Title: David Zastrow v. Journal Communications, Inc.

Citation: 2006 WI 72

Docket Number: 2004AP000276

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2006-06-20T00:00:00Z

Document:
2006 WI 72 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2004AP276 
 
 
COMPLETE TITLE: 
 
 
David Zastrow, the Employee Stockholders of 
Perry Printing, Larry J. Gocker, Neal C. 
Kopplin, Catherine Thompson and Eunice Weihert, 
          Plaintiffs-Appellants-Cross-
Respondents-Petitioners, 
     v. 
Journal Communications, Inc., Journal Employees 
Stock Trust (JESTA) and Trustees of Journal 
Employees Stock, 
          Defendants-Respondents-Cross-
Appellants, 
 
Perry Printing Division n/k/a Northstar 
Printgroup, Inc., Paul M. Bonaiuto, Keith M. 
Spore, Executive Risk Indemnity, Inc., Robert A. 
Kahlor, Steven J. Smith, Thomas M. Karavakis, 
Peter P. Jarzembinski and Douglas G. Kiel, 
          Defendants-Respondents. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2005 WI App 178 
Reported at: 286 Wis. 2d 416, 703 N.W.2d 673 
(Ct. App. 2005-Published) 
 
 
OPINION FILED: 
June 20, 2006   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
February 23, 2006   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Jefferson   
 
JUDGE: 
John  Ullsvik 
 
 
 
JUSTICES: 
 
 
CONCURRED: 
ABRAHAMSON, C.J., concurs (opinion filed). 
BRADLEY, J., joins the concurrence. 
CROOKS, J., joins Part I of the concurrence.   
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the plaintiffs-appellants-cross-respondents-petitioners 
there were briefs by Kevin Demet, Donal Demet, and Demet & Demet 
SC, Milwaukee, and oral argument by Kevin Demet. 
 
 
2
 
For the defendants-respondents-cross-appellants there was a 
brief by Thomas L. Shriner, Jr., David W. Simon, and Foley & 
Lardner LLP, Milwaukee, and oral argument by Thomas L. Shriner, 
Jr. 
 
An amicus curiae brief was filed by Jennifer L. Peterson 
and LaFollette Godfrey & Kahn, Madison, on behalf of Wisconsin 
Manufacturers and Commerce. 
 
 
 
 
2006 WI 72
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2004AP276  
(L.C. No. 
2000CV97) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
David Zastrow, the Employee Stockholders of 
Perry Printing, Larry J. Gocker, Neal C. 
Kopplin, Catherine Thompson and Eunice Weihert, 
 
          Plaintiffs-Appellants-Cross- 
          Respondents-Petitioners, 
 
     v. 
 
Journal Communications, Inc., Journal Employees 
Stock Trust (JESTA) and Trustees of Journal 
Employees Stock, 
 
          Defendants-Respondents- 
          Cross-Appellants, 
 
Perry Printing Division n/k/a Northstar 
Printgroup, Inc., Paul M. Bonaiuto, Keith M. 
Spore, Executive Risk Indemnity, Inc., Robert 
A. Kahlor, Steven J. Smith, Thomas M. 
Karavakis, Peter P. Jarzembinski and Douglas G. 
Kiel, 
 
          Defendants-Respondents. 
 
FILED 
 
JUN 20, 2006 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed.   
 
¶1 
PATIENCE DRAKE ROGGENSACK, J.   In this review of a 
court of appeals decision that reversed and remanded to the 
No. 
2004AP276   
 
2 
 
circuit court1 to dismiss plaintiffs' claims for breach of 
fiduciary duty based on a statute of limitations defense, we are 
asked to determine whether a claim for breach of fiduciary duty 
of loyalty must be intentional, or whether it can also be based 
on negligence.  We conclude that the circuit court found that 
the Trustees of Journal Employees Stock (Trustees) created 
circumstances that adversely affected the plaintiffs' interests 
by 
giving 
plaintiffs 
incomplete 
information 
relative 
to 
plaintiffs' holdings, which we conclude is a breach of the 
fiduciary duty of loyalty, an intentional tort.  As a result, 
the two-year statute of limitations found in Wis. Stat. § 893.57 
(2003-04),2 which is applicable to intentional torts, requires 
dismissal of the lawsuit.  Accordingly, we affirm the decision 
of the court of appeals. 
I.  BACKGROUND 
¶2 
Plaintiffs are former employees of Perry Printing 
(Perry), which was a wholly owned subsidiary of Journal 
Communications, Inc. (Journal Communications).  Since 1937, 90 
percent of Journal Communications' stock has been held in the 
Journal Employees Stock Trust (Trust).  Administration of that 
Trust is governed by the Journal Employees' Stock Trust 
Agreement (JESTA) and managed by the Trustees of the Trust.   
                                                 
1 The Honorable John M. Ullsvik, Circuit Court Judge for 
Jefferson County, presided prior to the appeal. 
2 All subsequent references to the Wisconsin Statutes are to 
the 2003-04 version unless otherwise noted. 
No. 
2004AP276   
 
3 
 
¶3 
As a part of their employee benefits, employees of 
Perry could, under certain circumstances, purchase units of the 
Trust 
(Trust-units) 
at 
a 
price 
that 
was 
formulaically 
determined.  The JESTA required employees who owned Trust-units 
and whose employment terminated for any reason other than 
retirement to immediately offer for sale to persons who were 
eligible purchasers under the JESTA all Trust-units at the then-
current formula price.  The JESTA also provided that when an 
employee retired, the employee was permitted to offer his or her 
Trust-units for sale over a period of ten years, with not less 
than ten percent of the Trust-units offered for sale in each 
year.  Having an extended sell-back opportunity is claimed to be 
beneficial because the Trust-units have always appreciated in 
value. 
¶4 
In 1995 as part of its corporate restructuring, 
Journal Communications sold Perry's assets.  The sale agreement 
required the buyer to continue to operate the business and to 
offer 
similar 
positions 
with 
comparable 
compensation 
and 
benefits to all Perry employees.  When the sale closed, all 
employees were terminated by Perry and rehired by the buyer of 
Perry's assets.   
¶5 
Because their employment with a Journal Communications 
company terminated when Perry was sold, under the JESTA, the 
former employees had to offer to sell back their Trust-units 
immediately, unless they retired.  In that case, the JESTA 
accorded them ten years to accomplish the sell-back.  None of 
the employees actually retired, and the Trustees did not treat 
No. 
2004AP276   
 
4 
 
any of the Perry employees as retirees, even though some who 
accepted new employment with the buyer were eligible to retire.  
Instead, the Trustees told the former employees of Perry they 
had one to five years, depending on how long each person had 
owned the Trust-units, during which they had to re-sell them.   
¶6 
In April of 2000, former Perry employees who had been 
employed on the date of the Perry asset sale and who had sold 
their Trust-units at the time of the corporate restructuring, 
filed a class action against Journal Communications, the Trust, 
and its Trustees (collectively, the defendants).  The complaint 
alleged that the plaintiffs were entitled under the JESTA to be 
treated as retirees with the right to sell their Trust-units 
over a ten-year period, but that the Trustees denied them this 
right.  Plaintiffs' claims included breach of fiduciary duty, 
breach of contractual rights and denial of a statutory right to 
wages under ch. 109.   
¶7 
The defendants moved for partial summary judgment, 
asking the circuit court to reject these theories because many 
plaintiffs were not eligible to retire and of those who were 
eligible, none had retired.  Eventually, after reaching a 
decision on that initial motion and several other motions that 
followed, the circuit court granted the defendants' request to 
dismiss the complaint and amended complaint, in part.3  It denied 
                                                 
3 The procedural narrative recited herein is a summary of 
the actions in circuit court.  It is not meant to repeat each 
procedural step that eventually led to the trial of only one 
claim of breach of fiduciary duty.  
No. 
2004AP276   
 
5 
 
all claims relative to those former employees who were not 
eligible to retire when Perry's assets were sold, and it 
dismissed all other claims for relief, except those for breach 
of fiduciary duty.   
¶8 
As part of the defendants' motions, they asserted that 
the two-year statute of limitations for intentional torts, Wis. 
Stat. § 893.57, barred the plaintiffs' breach of fiduciary duty 
claim.  The circuit court did not agree.  Instead, it concluded 
that not all breaches of fiduciary duty are intentional torts, 
reasoning that there is a distinction between claims based on 
negligent conduct and claims that are based on intentional 
conduct or conduct that evinces a reckless disregard of 
another's rights.  For breaches of duty based on negligent 
conduct, the circuit court reasoned that the six-year statute of 
limitations in either Wis. Stat. §§ 893.52 or 893.53 applied.  
The circuit court determined that the applicable moment at which 
to toll the statute of limitations was the date of each 
plaintiff's sale of his or her last Trust-unit, and that any 
time-bar would depend upon that date for each individual 
plaintiff.   
¶9 
The breach of fiduciary duty claims of the plaintiffs 
who were eligible to retire when Perry's assets were sold were 
tried to the court.  Subsequent to the trial, the court made the 
following findings and conclusions:  (1) none of the plaintiffs 
had intended to retire; (2) the Trustees told the plaintiffs 
they had to sell back their Trust-units over a one to five year 
period after leaving their employment with Perry; (3) the 
No. 
2004AP276   
 
6 
 
defendants had a fiduciary obligation to tell the plaintiffs 
that they could retire from Perry before the sale closed, which 
would have made them eligible for a ten-year sell-back period; 
(4) retirement would mean those who made that choice would not 
be entitled to automatic employment by the buyer, but would have 
to apply for such employment; (5) three of the plaintiffs would 
have retired, if the Trustees had told them they could do so; 
(6) the same three plaintiffs did not know about the ten-year 
sell-back opportunity; (7) the Trustees had a conflict of 
interest with respect to advising the plaintiffs about a choice 
of either retirement or immediate employment with the buyer 
because the Trustees, as employees of Journal Communications, 
had the right to purchase some of the Trust-units sold by the 
plaintiffs; (8) the Trustees negligently failed to fulfill their 
duty to advise plaintiffs; and (9) the six-year statute of 
limitations applies.4 
¶10 The 
defendants 
appealed, 
challenging 
the 
circuit 
court's application of a six-year statute of limitations and 
raising Clause 33 of the JESTA5 as a bar to all negligence 
claims.  The defendants asserted that the conduct found by the 
                                                 
4 The court awarded damages to the three employees who it 
determined did not know about the ten-year sell-back opportunity 
for retirees and would have retired and then applied for 
employment with the new company if they had known.  By 
stipulation, damages were awarded to a fourth employee.  The 
circuit court also awarded attorney's fees. 
5 The JESTA has a liability limitation clause, Clause 33, 
which precludes negligence claims against the Trustees.    
No. 
2004AP276   
 
7 
 
circuit court as proof of plaintiffs' claims was a violation of 
the Trustees' duty of loyalty to the plaintiffs.  As such, it is 
an intentional tort and barred by the two-year statute of 
limitations.  
¶11 The court of appeals reasoned that Beloit Liquidating 
Trust v. Grade, 2004 WI 39, 270 Wis. 2d 356, 677 N.W.2d 298, 
which we decided after the circuit court's decision, controlled 
because Beloit Liquidating concluded that the two-year statute 
of limitations for intentional torts applies to breach of 
fiduciary duty claims.  Zastrow v. Journal Communications, Inc., 
2005 WI App 178, ¶2, 286 Wis. 2d 416, 703 N.W.2d 673.  The 
plaintiffs on appeal did not dispute that if the two-year 
statute of limitations applies, their claims were not timely 
brought.  Id.  Accordingly, the court of appeals reversed the 
circuit court and remanded with directions to dismiss the 
complaint.  Id. 
II.  DISCUSSION 
A. 
Standard of Review 
¶12 Our review requires us to choose and apply the 
appropriate Wisconsin statute to the plaintiffs' claims to 
determine if they are time-barred.  Choosing the correct statute 
of limitations involves a question of law that we independently 
review.  Estate of Hegarty v. Beauchaine, 2001 WI App 300, ¶14, 
249 Wis. 2d 142, 638 N.W.2d 355.  Whether one breached a 
fiduciary duty is also a question of law that we review 
independently.  Jorgensen v. Water Works, Inc., 2001 WI App 135, 
¶8, 246 Wis. 2d 614, 630 N.W.2d 230. 
No. 
2004AP276   
 
8 
 
B. 
Wisconsin Stat. §§ 893.57 and 893.43 
¶13 A question in our review of the court of appeals 
decision is which statute of limitations applies to the 
plaintiffs' claims:  the two-year statute of limitations in Wis. 
Stat. § 893.57, or the six-year limit found in either Wis. Stat. 
§§ 893.43 or 893.52.  This question is answered by the answers 
to two broader questions:  (1) whether a breach of the fiduciary 
duty of loyalty is always an intentional tort and (2) whether 
the circuit court found that the Trustees breached their 
fiduciary duty of loyalty. 
¶14 Wisconsin Stat. § 893.57, the statute of limitations 
for intentional torts, states: 
An action to recover damages for libel, slander, 
assault, 
battery, 
invasion 
of 
privacy, 
false 
imprisonment or other intentional tort to the person 
shall be commenced within 2 years after the cause of 
action accrues or be barred. 
The parties do not dispute the overall meaning of the statute, 
but rather, they ask us to answer the question of whether the 
plaintiffs' claims, which the circuit court found the plaintiffs 
proved, are time-barred because they are intentional torts.   
¶15 The plaintiffs contend that the defendants negligently 
breached their fiduciary duty.  Based on that theory, plaintiffs 
claim that the six-year statute of limitations of Wis. Stat. 
No. 
2004AP276   
 
9 
 
§§ 893.52 or 893.53 applies to their claims.6  Section 893.52 
states:  
An action, not arising on contract, to recover damages 
for an injury to real or personal property shall be 
commenced within 6 years after the cause of action 
accrues or be barred, except in the case where a 
different period is expressly prescribed. 
Section 893.53 states: 
An action to recover damages for an injury to the 
character or rights of another, not arising on 
contract, shall be commenced within 6 years after the 
cause of action accrues, except where a different 
period is expressly prescribed, or be barred. 
¶16 The plaintiffs assert that the Trustees committed two 
types of breaches of fiduciary duty:  an intentional breach and 
a negligent breach.  They argue that the court of appeals made 
an artificial distinction between negligence and the negligent 
breach of a fiduciary duty.  In sum, their argument implies that 
where a trustee has a fiduciary duty, all potential errors of 
judgment are breaches of a fiduciary duty, although some can be 
intentional and some can be negligent.  
                                                 
6 Plaintiffs also suggest in their brief that Wis. Stat. 
§ 893.43 could apply to their claims, as contract claims, 
thereby providing a six-year statute of limitations.  Section 
§ 893.43 reads, in pertinent part: 
An action upon any contract, obligation or liability, 
express or implied, including an action to recover 
fees 
for 
professional 
services 
. . . 
shall 
be 
commenced within 6 years after the cause of action 
accrues or be barred. 
However, we note that the circuit court dismissed the breach of 
contract claims, and that decision has not been brought before 
us. 
No. 
2004AP276   
 
10 
 
¶17 Plaintiffs 
argue 
that 
the 
defendants' 
conduct 
contravened their duties as fiduciaries because they acted in 
their own self-interest due to their ability to purchase some of 
the Trust-units plaintiffs sold.  They assert, and the circuit 
court found, that telling the plaintiffs they had to sell back 
their Trust-units over a one to five year period, while not 
telling them that the JESTA provided for a ten-year sell-back 
opportunity if they retired, was not done in good faith.  At the 
same time, plaintiffs assert that these actions constitute 
negligent breaches of fiduciary duty, are not intentional acts, 
and therefore their claims come under the six-year statute of 
limitations in either Wis. Stat. §§ 893.52 or 893.53.7   
                                                 
7 In support of their position, plaintiffs cite an extensive 
list of Wisconsin cases in which they contend the courts applied 
a six-year statute of limitations to a breach of duty on the 
part of a trustee.  However, the cases cited are not on point.  
See Younger v. Rosenow Paper & Supply Co., 51 Wis. 2d 619, 626, 
188 N.W.2d 507 (1971) (analyzing breach of contract claim); 
Hammes v. First Nat'l Bank & Trust Co. of Racine, 79 Wis. 2d 
355, 359, 255 N.W.2d 555 (1977) (concluding that summary 
judgment was improperly granted on negligence and breach of 
fiduciary duty claims, but making no determination of any 
statute of limitations issue); Policemen's Annuity & Benefit 
Fund of Milwaukee v. City of Milwaukee, 2001 WI App 144, ¶13, 
246 Wis. 2d 196, 630 N.W.2d 236 (concluding the six-year statute 
of limitations in Wis. Stat. § 893.43 was erroneously applied 
and that the city is estopped from raising the statute of 
limitations);  Welter v. City of Milwaukee, 214 Wis. 2d 485, 
488-89, 571 N.W.2d 459 (Ct. App. 1997) (analyzing a municipal 
ordinance where no breach of fiduciary duty was alleged); 
Schroeder v. Gateway Transp. Co., 53 Wis. 2d 59, 67, 191 N.W.2d 
860 (1971) (relying on Younger to conclude that the statute of 
limitations for an action upon any other contract applies to an 
action on a pension plan); Green v. Granville Lumber & Fuel Co., 
60 Wis. 2d 584, 590, 211 N.W.2d 467 (1973) (concluding that 
"six-year statute of limitations . . . for actions on contract, 
governs"); Jensen v. Janesville Sand & Gravel Co., 141 Wis. 2d 
No. 
2004AP276   
 
11 
 
¶18 The 
defendants, 
on 
the 
other 
hand, 
argue 
that 
according to our decisions in Beloit Liquidating and Warmka v. 
Hartland Cicero Mutual Insurance Co., 136 Wis. 2d 31, 400 N.W.2d 
923 (1987), breach of fiduciary duty claims are intentional tort 
claims and are time-barred by Wis. Stat. § 893.57.  They note 
that as a result, the plaintiffs are in a catch-22 that leaves 
them without an actionable claim no matter how the defendants' 
conduct 
is 
classified, 
because 
any 
remaining 
claims 
not 
considered a breach of the fiduciary duty of loyalty constitute 
claims of negligence that are expressly precluded by the 
limitation of liability provision in Clause 33 of the JESTA. 
¶19 The defendants argue that the court of appeals was 
correct in concluding that Beloit Liquidating controlled.  In 
Beloit Liquidating, 270 Wis. 2d 356, ¶40, we held that Wis. 
Stat. § 893.57 barred a claim for breach of fiduciary duty where 
a liquidating trust that was established under a Chapter 11 
debtor's plan brought an action against the debtor's officers 
and directors.  It was alleged that the officers and directors 
had 
"allowed 
the 
corporation 
to 
enter 
into 
money-losing 
contracts, [had] failed to keep adequate accounting systems to 
deal with the losses, [had] continued operations after prudent 
                                                                                                                                                             
521, 527-28, 415 N.W.2d 559 (Ct. App. 1987) (holding that 
§ 893.43 applies to a contract action against employer for past 
due pension payments); Atkinson v. Everbrite, Inc., 224 Wis. 2d 
724, 726, 733, 592 N.W.2d 299 (Ct. App. 1999) (concluding that 
widow had only contract claims against her deceased husband's 
former employer); Noonan v. Nw. Mut. Life Ins. Co., 2004 WI App 
154, ¶¶31-32, 276 Wis. 2d 33, 687 N.W.2d 254 (applying § 893.43 
to breach of contracts claims). 
No. 
2004AP276   
 
12 
 
managers would have shut the corporation down, and [had] failed 
to disclose the corporation's losses."  Id., ¶10.  The court of 
appeals in its decision in the case before us reasoned that for 
purposes of deciding whether the claimed breach of fiduciary 
duty is an intentional tort, the conduct of the Trustees here 
was not significantly different from what was held to be an 
intentional tort by the officers and directors in Beloit 
Liquidating.  Zastrow, 286 Wis. 2d 416, ¶16.   
¶20 The plaintiffs respond to the alleged precedent of 
Beloit Liquidating and Warmka by asserting that in Warmka, the 
basis for the court's decision regarding the statute of 
limitations was a rejection of a one-year contractual statute of 
limitations and also that the suit had been commenced within two 
years.  The plaintiffs also argue Warmka never actually decided 
the issue of whether breaches of fiduciary duty are always 
intentional torts, both because of the nature of the holding in 
the case and because it involved only intentional bad faith 
insurance practices. 
¶21 The parties agree that the Trustees are fiduciaries 
with regard to the Trust and with regard to the plaintiffs.  
They do dispute whether Journal Communications and the Trust, 
itself, is a fiduciary of the plaintiffs.  Plaintiffs' claims of 
breach of fiduciary duty are focused solely on the actions and 
omissions of the Trustees.  Therefore, we need analyze only the 
actions of the Trustees in order to decide the questions 
presented by this review.   
No. 
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13 
 
¶22 It is well established in Wisconsin that trustees have 
a fiduciary duty in managing a trust.  Hatleberg v. Norwest Bank 
Wis., 2005 WI 109, ¶21, 283 Wis. 2d 234, 700 N.W.2d 15 (citing 
Sensenbrenner v. Sensenbrenner, 76 Wis. 2d 625, 635, 252 N.W.2d 
47 (1977)).  Furthermore, Wisconsin has enacted the Uniform 
Fiduciaries Act, which defines "fiduciary" to include "a trustee 
under any trust . . . ."  Wis. Stat. § 112.01(1)(b).  
¶23 What is at issue, and what we must determine, is 
whether the breach of fiduciary duty claims the circuit court 
found the plaintiffs proved were properly dismissed because the 
two-year statute of limitations applies to them.  The circuit 
court found the Trustees breached their fiduciary duty to the 
plaintiffs because the Trustees told the plaintiffs "they had to 
sell-back their Trust units over a 1 to 5 year period, and no 
information was provided plaintiffs in writing about the 
availability of the 10-year sell-back right upon retirement."  
Mem. Decision After Trial 15 (Jefferson County Cir. Ct. Mar. 4, 
2003). 
 
The 
circuit 
court's 
factual 
findings 
and 
legal 
conclusion in that regard are not contested.   
C. 
Fiduciary Duty 
¶24 In order to better understand the claims tried here, 
we begin by examining the nature of a fiduciary duty.  We are 
assisted by various scholarly sources and by established 
principles of fiduciary law set out in Wisconsin appellate court 
decisions.   
¶25 The foundations of fiduciary law originated in courts 
of equity where it was developed to address claimed abuses by 
No. 
2004AP276   
 
14 
 
one who had accepted a position of authority with regard to the 
affairs of another.  Eileen A. Scallen, Promises Broken vs. 
Promises Betrayed:  Metaphor, Analogy, and The New Fiduciary 
Principle, 1993 U. Ill. L. Rev. 897, 905-06 (hereinafter, 
Promises Broken vs. Promises Betrayed).  The term "fiduciary" 
has been applied to many different types of relationships that 
have 
varying 
obligations, 
e.g., 
"trustee 
to 
beneficiary, 
guardian to ward, agent to principal, attorney to client."  Id., 
at 905 n.22.  Courts have developed fiduciary law by analogy:  
by identifying paradigm cases in which a fiduciary relationship 
was found to exist and examining whether the relationship under 
consideration "is sufficiently like those in the paradigm cases 
to support an extension of the obligation to that relationship."  
Deborah A. DeMott, Beyond Metaphor:  An Analysis of Fiduciary 
Obligation, 1988 Duke L.J. 879, 879 (hereinafter, Beyond 
Metaphor). 
¶26 Perhaps as a result of this long evolution, clearly 
defining the duties of a fiduciary in a particular situation is 
difficult, as Deborah A. DeMott aptly explained: 
[A] [f]iduciary obligation is one of the most 
elusive concepts in Anglo-American law.  Applicable in 
a variety 
of 
contexts, 
and 
apparently 
developed 
through 
a 
jurisprudence 
of 
analogy 
rather 
than 
principle, the fiduciary constraint on a party's 
discretion 
to 
pursue 
self-interest 
resists 
tidy 
categorization.  Although one can identify common core 
principles of fiduciary obligation, these principles 
apply with greater or lesser force in different 
contexts involving different types of parties and 
relationships.  Recognition that the law of fiduciary 
obligation 
is 
situation-specific 
should 
be 
the 
starting point for any further analysis.   
No. 
2004AP276   
 
15 
 
Id. 
¶27 However, in any analysis of a claimed breach of 
fiduciary duty, there are two central questions to address:  was 
the relationship a fiduciary relationship, and if so, what is 
the nature of the fiduciary duty that is at issue?  Promises 
Broken vs. Promises Betrayed, supra, at 905.  Because there is 
no question that the Trustees who managed the Trust under the 
terms set out in the JESTA were fiduciaries, at least in regard 
to the plaintiffs, we explore the second question. 
¶28 The expression, fiduciary duty, relates to those 
obligations that are peculiar to a fiduciary and are based on 
the conscious undertaking of a special position with regard to 
another.  William A. Gregory, The Fiduciary Duty of Care:  A 
Perversion of Words, 38 Akron L. Rev. 181, 185-86 (2005) 
[hereinafter, The Fiduciary Duty of Care].   A consistent facet 
of a fiduciary duty is the constraint on the fiduciary's 
discretion to act in his own self-interest because by accepting 
the obligation of a fiduciary he consciously sets another's 
interests before his own.  Beyond Metaphor, supra, at 882.   
¶29 This constraint on acting in one's own self-interest 
has been described as a fiduciary's duty of loyalty.  Id.  
However, the duty of loyalty is broader than simply requiring 
No. 
2004AP276   
 
16 
 
the fiduciary to refrain from acting in his own self-interest.8  
The Fiduciary Duty of Care, supra, at 183.  For example, it also 
may require keeping a beneficiary's information confidential, 
id. at 193 n.107 (citing 2 Ronald E. Mallen & Jeffrey M. Smith, 
Legal Malpractice § 14.1 (4th ed. 1996)), and fully disclosing 
to the beneficiary all information relevant to the beneficiary's 
interest, id. at 183-85.  Webster defines loyalty as "tenacious 
adherence" to principle and an obligation "based on individual 
choice."  Webster's Third New International Dictionary 1342 
(14th ed. 1961).  
¶30 A breach of the duty of loyalty imports something 
different from mere incompetence; it "connotes disloyalty or 
infidelity."  The Fiduciary Duty of Care, supra, at 183 
(citation omitted).  At its core, a fiduciary's duty of loyalty 
involves a state of mind, so that a claimed breach of that duty 
goes beyond simple negligence.  For example, a lawyer can breach 
his fiduciary duty of loyalty to a client by entering into a 
                                                 
8 The concurrence takes issue with the assertion that the 
fiduciary duty of loyalty is broader than requiring that the 
fiduciary not act in his own self-interest.  Concurrence, ¶57.  
We stand by the statement.  Recently, the court of appeals 
examined an alleged disclosure of confidential information as a 
claimed breach of the duty of loyalty.  Aon Risk Servs., Inc. v. 
Liebenstein, 2006 WI App 4, ¶31, ___ Wis. 2d ___, 710 N.W.2d 
175.  The Restatement (Second) of Agency § 395 (1958) includes 
within the duty of loyalty the duty not to disclose confidential 
information that was given to the fiduciary by his principal: 
[A]n agent is subject to a duty to the principal not 
to use or to communicate information confidentially 
given him by the principal or acquired by him during 
the course of or on account of his agency . . . . 
No. 
2004AP276   
 
17 
 
contract with a client without full disclosure that the contract 
will benefit the lawyer and potentially disadvantage the client.  
However, simple carelessness in drafting a will so that it does 
not achieve the tax savings that the client requested is 
negligence.  Neither duty is of lesser importance; they are just 
different obligations.  Said otherwise, "not every legal claim 
arising out of a relationship with fiduciary incidents will give 
rise to a claim for breach of fiduciary duty."  Id. at 186 
(citation omitted).   
¶31 The courts of Wisconsin have followed the general 
principles we set out above.  For example, we have held that a 
fiduciary relationship results in the legal assumption of the 
"obligation to act for another's benefit."  Merrill Lynch, 
Pierce, Fenner & Smith, Inc. v. Boeck, 127 Wis. 2d 127, 136, 377 
N.W.2d 605 (1985).  The fiduciary's duty of loyalty is "to act 
solely for the benefit of the principal in all matters connected 
with the agency, even at the expense of the agent's own 
interests."  Losee v. Marine Bank, 2005 WI App 184, ¶16, 286 
Wis. 2d 438, 703 N.W.2d 751 (citation omitted).  Courts have 
characterized that obligation as one of fidelity and loyalty.  
Id., ¶19 (citation omitted).  The fiduciary relationship comes 
into being by the manifestation of consent by the fiduciary to 
act on behalf of another.  State v. Knight, 2000 WI App 16, ¶12, 
232 Wis. 2d 305, 606 N.W.2d 291 (citing Restatement (Second) of 
Agency § 1(1) (1958)).  The court of appeals recently examined 
the breach of the duty of loyalty based on the allegation that 
an employee gave his employer's confidential information to a 
No. 
2004AP276   
 
18 
 
competitor of the employer.  Aon, 2006 WI App 4, ¶31.  We have 
also held that an employee's theft from his employer is a breach 
of an employee's duty of loyalty.  Hartford Elevator, Inc. v. 
Lauer, 94 Wis. 2d 571, 580, 289 N.W.2d 280 (1980). 
¶32 A fiduciary relationship may be created by contract, 
such as the relationship between a trust and trustee.  Prod. 
Credit Ass'n of Lancaster of Wis. v. Croft, 143 Wis. 2d 746, 
752, 423 N.W.2d 544 (Ct. App. 1988).  Or, it may arise from a 
formal legal relationship such as attorney and client, guardian 
and ward.  Id.    
¶33 When the fiduciary is a trustee, generally the tasks 
that the trustee is agreeing to undertake are set out in a trust 
agreement.  Hatleberg, 283 Wis. 2d 234, ¶19.  "[T]he instrument 
creating the trust . . . is to be looked to for stipulations 
fixing the obligations of the parties."  Id. (citing McGeoch 
Bldg. Co. v. Dick & Reuteman Co., 253 Wis. 166, 175, 33 N.W.2d 
252 (1948)).  A trustee must comply with the terms of the trust 
under which he agrees to perform certain tasks.  Saros v. 
Carlson, 244 Wis. 84, 88, 11 N.W.2d 676 (1943).   
¶34 We reviewed the duty of loyalty of a trustee in Hammes 
v. First National Bank & Trust Co. of Racine, 79 Wis. 2d 355, 
255 N.W.2d 555 (1977).  Hammes required us to consider the 
breach of fiduciary duty claims of trust beneficiaries brought 
against former trustees to determine whether those claims were 
barred under principles of res judicata.  Id. at 359.  In 
deciding whether the claims could be maintained, we reviewed the 
common law relating to the obligations of a trustee.  One of the 
No. 
2004AP276   
 
19 
 
allegations made was that the trustees did not disclose all the 
material 
facts 
that 
should 
have 
been 
disclosed 
to 
the 
beneficiaries before the beneficiaries agreed to sell their 
stock and that the lack of disclosure benefited the trustees.  
Id. at 367.  We explained, "It is a fundamental principle of the 
law of trusts that the trustee is under a duty of undivided 
loyalty to the beneficiaries of the trust."  Id. (citing Dick & 
Reuteman Co. v. Doherty Realty Co., 16 Wis. 2d 342, 348, 114 
N.W.2d 475 (1962)).  We explained that this duty of loyalty 
requires that a trustee not profit, personally, from his 
position as a trustee.  Id. at 368.  We pointed out that the 
duty of loyalty also encompasses a "trustee's affirmative duty 
to make 
full 
disclosure" 
of all 
facts relevant to the 
transaction the beneficiary is about to undertake.  Id. at 369.   
¶35 With the general principles of the fiduciary duty of 
loyalty in mind, we are persuaded that there is a distinct 
difference between a claim for the breach of the fiduciary duty 
of loyalty and a claim for the breach of the duty of ordinary 
care, i.e., a negligence claim.  That difference arises from the 
conscious assumption of the role of fiduciary, on which the law 
imposes an obligation of absolute loyalty in all matters 
relating to the object of the duty, e.g., the beneficiaries of a 
trust.  A fiduciary agrees to assume a position of authority in 
regard to the affairs of another in which position the fiduciary 
may have access to confidential information or to property of 
the object of the fiduciary's obligation.  Therefore, if a 
trustee does not make a full disclosure of material facts to a 
No. 
2004AP276   
 
20 
 
beneficiary, that conduct is a breach of the trustee's duty of 
loyalty.  The law concludes this breach is intentional.  Beloit 
Liquidating, 270 Wis. 2d 356, ¶40.  Similarly, if a trustee 
personally profits from his role as a trustee, that conduct is a 
breach of the trustee's duty of loyalty, and the law concludes 
it is intentional.  Cmty. Nat'l Bank v. Med. Benefit Adm'rs, 
LLC, 2001 WI App 98, ¶8, 242 Wis. 2d 626, 626 N.W.2d 340. 
¶36 The concept that a fiduciary can comport with his 
fiduciary duty of loyalty, but nevertheless violate the duty of 
ordinary care, also is supported by the standard set out in Wis. 
Stat. § 112.01(1)(c), the Wisconsin version of the Uniform 
Fiduciaries Act.  Section 112.01(1)(c) states:  "A thing is done 
'in good faith' within the meaning of this section, when it is 
in fact done honestly, whether it be done negligently or not."  
Section 112.01(1)(c) recognizes that negligent conduct does not 
rise to the level of a breach of fiduciary duty.  We conclude 
that good faith is encompassed within what we have more 
succinctly referred to as the duty of loyalty that arises when a 
fiduciary role is accepted.   
¶37 Why does the law conclude that the breach of a 
fiduciary duty of loyalty is an intentional tort?  It does so 
because the fiduciary consciously agreed to be committed to the 
interests of those to whom the fiduciary assumed that special 
role.  For example, this commitment overlays all of the tasks 
that a trustee agrees to undertake in a given trust agreement.  
Whether a breach of the fiduciary duty of loyalty will lie 
against a trustee will depend upon what facts are proved.  As 
No. 
2004AP276   
 
21 
 
explained above, there are a number of ways in which this breach 
can occur, e.g., self-dealing by the trustee; failing to 
disclose material information to the beneficiary; disclosing the 
beneficiary's confidential information.  
¶38 Our conclusion that a breach of the fiduciary duty of 
loyalty is grounded in an intentional tort is consistent with 
all Wisconsin appellate decisions that have mentioned the issue.  
Most recently, in Beloit Liquidating, 270 Wis. 2d 356, ¶40, we 
held that Wis. Stat. § 893.57 applies to breach of fiduciary 
duty claims, although we did not discuss in detail our reasoning 
for that holding.  We did have before us the assertion that the 
trustee acted negligently, and we rejected that contention.  
Id., ¶¶10, 33.  Previously, in Warmka, 136 Wis. 2d at 35, we 
held that "[t]he breach of the fiduciary duty is an intentional 
tort" and that § 893.57 provides the applicable statute of 
limitations.  In Warmka, we reviewed an insured's cause of 
action against an insurer for breach of contract and bad faith, 
and also addressed the question of which statute of limitations 
was applicable to the claims.  We concluded that the insurer had 
a duty that was analogous to a fiduciary duty owed to the 
insured and that a breach of fiduciary duty is an intentional 
tort, governed by § 893.57.  Therefore, we held that it was the 
applicable statute of limitations for the claim presented.   
¶39 Twice, federal courts have followed these cases in 
applying the two-year statute of limitations to breach of 
fiduciary duty claims.  See McMahon v. Pa. Life Ins. Co., 891 
F.2d 1251, 1255 (7th Cir. 1989) (affirming the district court's 
No. 
2004AP276   
 
22 
 
dismissal of the breach of fiduciary duty claim based on our 
decision in Warmka); see also Lewis v. Paul Revere Life Ins. 
Co., 80 F. Supp. 2d 978, 1004 (E.D. Wis. 2000) (concluding that 
insurer's breach of fiduciary duty claim against broker who sold 
policy, but did not fully disclose all facts relevant to the 
proposed insured, was time barred under Warmka). 
¶40 Our conclusion that a breach of the fiduciary duty of 
loyalty is an intentional tort is also consistent with the 
decisions of courts in many other jurisdictions.  For example, 
in Brosted v. Unum Life Insurance Co. of America, 421 F.3d 459 
(7th Cir. 2005), where the plaintiff's claim was based on a 
miscalculation and overstatement of benefits, the court held no 
claim for breach of fiduciary duty existed because there was no 
evidence that the misrepresentation was intentional.  Id. at 
466.  It would have taken an intentional misrepresentation to 
breach the fiduciary's duty of loyalty.  Id.  In Crabtree v. 
Metalworks & Hydra-Assembly, Inc., 2003 WL 42442 (Ohio App. 10th 
Dist.), 
where 
minority 
shareholders 
claimed 
a 
breach 
of 
fiduciary duty based on the failure to provide necessary 
information, the court classified the breach of fiduciary duty 
"just like other intentional torts."  Crabtree, 2003 WL 42442 at 
2 (citing Schafer v. RMS Realty, 741 N.E.2d 155 (Ohio Ct. App. 
2000).  In Lundstrom Realty Advisors, Inc. v. Schickedanz Bros.-
Riviera Ltd., 856 So. 2d 1117 (Fla. Dist. Ct. App. 2003), the 
court concluded that plaintiff had four years in which to bring 
its claim for breach of fiduciary duty under the applicable 
Florida statute of limitations for intentional torts.  Id. at 
No. 
2004AP276   
 
23 
 
1123.  In Posner v. Essex Insurance Co., 178 F.3d 1209 (11th 
Cir. 1999), the court applied Florida law and noted that a 
breach of fiduciary duty claim is an intentional tort in 
Florida.  Id. at 1219.  
D. 
Plaintiffs' Claims 
¶41 The fiduciary relationship between the plaintiffs and 
the Trustees was created by contract, the JESTA; accordingly, 
the tasks that the Trustees agreed to undertake are as set out 
in the JESTA.  However, the state of mind that the Trustees were 
required to employ as they undertook their contractually agreed 
upon tasks is one of absolute loyalty to the beneficiaries of 
the Trust, which includes the plaintiffs.  Their duty of loyalty 
required the Trustees to make a full disclosure to the Perry 
employees, as a group, of all material facts that related to the 
consequences of retirement before the sale of Perry.  One of 
those facts was that if the plaintiffs who were eligible for 
retirement retired before the Perry sale closed, they would be 
eligible for a ten-year sell-back opportunity for their Trust-
units.  Because the Trust-units have always appreciated in 
value, the plaintiffs needed to know that they could retain the 
Trust-units over a longer period of time so they could decide if 
they wished to retire in order to have this opportunity.  Any 
employee who retired would be required to apply for employment 
with the buyer of Perry's assets, rather than having employment 
by the new owner immediately available on the same terms and 
conditions as the employee had at Perry.   
No. 
2004AP276   
 
24 
 
¶42 The circuit court found that the Trustees breached 
their fiduciary duty by telling the plaintiffs "they had to 
sell-back their Trust units over a 1 to 5 year period, and no 
information was provided plaintiffs in writing about the 
availability of the 10-year sell-back right upon retirement."  
Mem. Decision, at 15.9  These found facts prove that the Trustees 
created circumstances that adversely affected the plaintiffs' 
ability to make an informed decision about whether to retire and 
then apply for work with the new owner or whether to proceed 
immediately to employment with the new owner.  This constitutes 
a breach of the Trustees' duty of loyalty, which the Trustees 
voluntarily undertook when they agreed to be Trustees of the 
Trust.  As such, the breach of fiduciary duty of loyalty, which 
the plaintiffs proved, is an intentional tort that is precluded 
                                                 
9 The circuit court also found that the Trustees had not put 
aside the discretion of one who is not a fiduciary to act in his 
own self-interest, that one who is a fiduciary must put aside, 
because the Trustees were eligible to purchase some of the 
Trust-units that the plaintiffs were forced to sell back.  
However, the circuit court made no finding that any Trustee had 
done so.  Therefore, there were no findings that the Trustees 
had actually breached their fiduciary duty by self-dealing. 
No. 
2004AP276   
 
25 
 
by the two-year statute of limitations set out in Wis. Stat. 
§ 893.57.10  
III.  CONCLUSION 
¶43 We conclude that the circuit court found that the 
Trustees created circumstances that adversely affected the 
plaintiffs' 
interests 
by 
giving 
plaintiffs 
incomplete 
information relative to plaintiffs' holdings, which we conclude 
is a breach of the fiduciary duty of loyalty, an intentional 
tort.  As a result, the two-year statute of limitations found in 
Wis. Stat. § 893.57, which is applicable to intentional torts, 
requires dismissal of the lawsuit.  Accordingly, we affirm the 
decision of the court of appeals.    
By the Court.—The decision of the court of appeals is 
affirmed. 
 
                                                 
10 The plaintiffs before us argued that the discovery rule, 
explained in John Doe 67C v. Archdiocese of Milwaukee, 2005 WI 
123, ¶24, 284 Wis. 2d 307, 700 N.W.2d 180, should apply to the 
accrual of their claims of negligence.  Plaintiffs assert that 
their claims accrued when the last Trust-unit was sold, rather 
than on the date that the incomplete information was given to 
them, as the defendants assert.  We do not address this issue 
because we conclude that the breach of the duty of loyalty that 
the trial court found is controlled by the two-year statute of 
limitations of Wis. Stat. § 893.57.  The plaintiffs commenced 
this action April 7, 2000, and they sold their last Trust-unit 
before April 6, 1998.  Therefore, plaintiffs do not contend that 
if the two-year statute of limitations applies, their claims 
survive.   
No.  2004AP276.ssa 
 
1 
 
 
¶44 SHIRLEY S. ABRAHAMSON, C.J.   (concurring).  I write 
separately (1) to set forth the issue presented and my answer 
thereto; and (2) to provide context for the case regarding 
claims of a trustee's breach of fiduciary duty and claims of 
negligence. 
I 
¶45 The majority opinion begins by stating the issue of 
law presented in the instant case as "whether a claim for breach 
of fiduciary duty of loyalty must be intentional, or whether it 
can also be based on negligence."1   
¶46 The plaintiffs present the issue as follows: whether a 
claim for a negligent breach of fiduciary duty is governed by 
the two-year statute of limitations in Wis. Stat. § 893.57, or 
by the six-year statute of limitations in either Wis. Stat. 
§ 893.52 or § 893.43.2  The defendants and the amicus briefs 
accept and respond to the issue as stated by the plaintiffs. 
¶47 I agree with the issue as stated by the parties.  The 
present case does not require this court to determine whether a 
claim for the Trustees' breach of fiduciary duty of loyalty must 
                                                 
1 Majority op., ¶1.  Compare with a different statement of 
the issue at majority op., ¶23: "whether the breach of fiduciary 
duty claims the circuit court found the plaintiffs proved were 
properly dismissed because the two-year statute of limitations 
applies to them." 
2 The majority opinion further misstates the issue by 
limiting its holding to the "fiduciary duty of loyalty."  As I 
discuss in Part II of this opinion, this case is not only a 
fiduciary duty of loyalty case.  Rather, the plaintiffs allege 
breaches of other fiduciary duties.   
No.  2004AP276.ssa 
 
2 
 
be intentional or may be based on negligence.  We need determine 
only what statute of limitations applies to the claim for breach 
of fiduciary duty presented in the instant case.3   
¶48 The 
circuit 
court 
determined 
that 
the 
Trustees 
breached 
their 
fiduciary 
duty 
and 
applied 
the 
six-year 
negligence statute of limitations.  The circuit court reasoned 
as follows:  The Trustees had a fiduciary duty of loyalty.  
Ordinarily self-dealing is a violation of the fiduciary duty of 
loyalty.  The trust instrument allowed the Trustees as employees 
of Journal Communications to buy the plaintiffs' stock, which 
might be considered self-dealing.  The circuit court concluded 
that, as a result, the Trustees were under a heightened duty to 
disclose information to the plaintiffs in order to fulfill the 
Trustees' fiduciary duty of loyalty.  The Trustees did not 
inform the employees fully and correctly as required by their 
heightened duty to disclose.  The Trustees' failure to inform 
the plaintiffs correctly was not intentional, just negligent, 
and, 
accordingly, 
ruled 
the 
circuit 
court, 
the 
six-year 
negligence statute of limitations applied.   
¶49 In contrast, the majority opinion concludes that the 
two-year statute of limitations for intentional torts, Wis. 
                                                 
3 The 
majority 
opinion 
also states that 
because the 
plaintiffs' claims for breach of fiduciary duty "are focused 
solely on the actions and omissions of the Trustees . . . we 
need analyze only the action of the Trustees in order to decide 
the questions presented by this review."  Majority op., ¶21.  
The complaint in the instant case, however, also alleges breach 
of fiduciary duty by Journal Communications and the trust 
itself.  The majority opinion is silent. 
No.  2004AP276.ssa 
 
3 
 
Stat. § 893.57, applies to claims for breach of fiduciary duty 
based on breach of the fiduciary duty of loyalty.     
¶50 Beloit Liquidating Trust v. Grade, 2004 WI 39, 270 
Wis. 2d 356, 677 N.W.2d 298, appears to control the outcome of 
the instant case.4  See also Warmka v. Hartland Cicero Mut. Ins. 
Co., 136 Wis. 2d 31, 34-35, 400 N.W.2d 923 (1987) (cause of 
action for insurer's bad faith; insurer's duty to insured 
analogized to fiduciary duty; breach of fiduciary duty is 
intentional tort under statute of limitations).  In Beloit 
Liquidating, this court considered allegations that corporate 
officers and directors negligently allowed the corporation to 
enter into money-losing contracts, failed to keep adequate 
accounting systems, continued operations after prudent managers 
would have shut down the corporation, and failed to disclose 
corporate 
losses.5 
 These 
allegations 
fit 
within several 
fiduciary duties of officers and directors of corporations, 
including the duty to keep and render accounts and the duty to 
furnish information.  It does not appear that the plaintiffs in 
Beloit Liquidating alleged breach of the fiduciary duty of 
loyalty.  This court held in Beloit Liquidating, despite the 
fact that the claim was that the officers and directors were 
negligent in performing fiduciary duties, that "a breach of 
fiduciary duty claim involves an intentional tort."6  The court 
                                                 
4 See Zastrow v. Journal Commc'ns, Inc., 2005 WI App 178, 
¶2, 286 Wis. 2d 416, 703 N.W.2d 673. 
5 Beloit Liquidating Trust v. Grade, 2004 WI 39, ¶10, 270 
Wis. 2d 356, 677 N.W.2d 298. 
6 Beloit Liquidating, 270 Wis. 2d 356, ¶40. 
No.  2004AP276.ssa 
 
4 
 
therefore held that the two-year statute of limitations for 
intentional torts, Wis. Stat. § 893.57, barred the claims in 
that case.7   
¶51 As the court of appeals observed in the instant case, 
this court in Beloit Liquidating "described the breach of 
fiduciary duty claim as an intentional tort even though the 
conduct alleged in that case was negligently allowing certain 
contracts and failing to keep adequate accounts, act prudently 
and disclose losses, rather than the type of bad faith conduct 
or intentionally wrongful conduct the circuit court here 
considered essential to the application of § 893.57."8  Thus the 
court of appeals simply concluded that Beloit Liquidating 
controlled the outcome of the instant case.  
¶52 Beloit Liquidating involved numerous issues that this 
court discussed at length.  This court did not discuss how it 
reached its conclusion regarding the application of the two-year 
statute of limitations and cited no authority for its conclusion 
that breach of fiduciary duty is an intentional tort or that the 
two-year statute of limitations applied in that case.  
¶53 The plaintiffs in the instant case distinguish Beloit 
Liquidating, asserting that it did not involve claims of 
negligent breach of fiduciary duties because the statutes and 
the business judgment rule prevented action for negligent 
breach.  The plaintiffs assert that Beloit Liquidating simply 
                                                 
7 Id., ¶40; see also Warmka v. Hartland Cicero Mut. Ins. 
Co., 136 Wis. 2d 31, 34-35, 400 N.W.2d 923 (1987). 
8 Zastrow, 286 Wis. 2d 416, ¶14. 
No.  2004AP276.ssa 
 
5 
 
found that the corporate officers and directors owed no duty to 
the creditors.     
¶54 In the interest of stare decisis and relying on the 
text of Beloit Liquidating, I conclude that Beloit Liquidating 
controls the outcome of the instant case and creates a uniform, 
predictable rule that the statute of limitations applicable in 
all claims of any breach of fiduciary duty is the two-year 
statute.  This conclusion should end the majority opinion in the 
instant case. 
II 
¶55 The majority opinion in this case, however, does not 
stop at deciding the statute of limitations issue in the instant 
case based on Beloit Liquidating.  It has raised more complex 
issues than the application of the statute of limitations to all 
claims asserting a breach of fiduciary duty by a trustee of an 
express trust.  Instead of explaining settled law, it appears 
that the majority opinion can be interpreted as making new law 
regarding the nature and content of fiduciary duty and the duty 
of care. 
¶56 In some places, the majority opinion puts forth a 
novel view of fiduciary duty that the only fiduciary duty is a 
duty of loyalty.9  The majority opinion might be interpreted as 
herding some or all fiduciary duties into the pasture of the 
duty of loyalty.  
¶57 The majority opinion concludes, for example, that the 
duty of confidentiality and the duty to furnish information are 
                                                 
9 See majority op., ¶¶22-35, 41-42. 
No.  2004AP276.ssa 
 
6 
 
aspects of the duty of loyalty.10  Yet the authority cited by the 
majority opinion does not support this statement.  On the 
contrary, the cited law review article makes clear that the duty 
of loyalty is one of the fiduciary duties, but that there are 
other duties as well.11   
¶58 I am concerned whether the majority opinion is 
creating a new body of fiduciary law for trustees that is 
inconsistent with prior case law in this state and inconsistent 
with the view taken in the Restatement (Second) of Trusts and 
well-known treatises on the law of trusts.   
¶59 While broad in scope, a trustee's fiduciary duty of 
loyalty does not, in ordinary trust parlance, encompass every 
fiduciary duty.12  It is hornbook, blackletter law that a trustee 
                                                 
10 Majority op., ¶29 ("[T]he duty of loyalty is broader than 
simply requiring the fiduciary to refrain from acting in his own 
self-interest.  For example, it also may require keeping a 
beneficiary's information confidential and fully disclosing to 
the beneficiary all information relevant to the beneficiary's 
interest."  (Citations omitted.)). 
11 See William A. Gregory, The Fiduciary Duty of Care: A 
Perversion of Words, 38 Akron L. Rev. 181, 183 (citing 
Restatement (Second) of Agency §§ 379-384, 387-398 (1958)) ("An 
agent owes various duties to its principal.  The duty of loyalty 
is the most significant of them.  The courts have expanded the 
duties of an agent over the years by describing a duty to 
disclose and a duty of candor." (Footnote references omitted.)). 
12 See, e.g., Hammes v. First Nat'l Bank & Trust Co. of 
Racine, 79 Wis. 2d 355, 369, 255 N.W.2d 555 (1977) (discussing 
fiduciary 
duty 
of 
loyalty, 
and 
then 
discussing 
separate 
fiduciary duty of full disclosure); Modern Materials, Inc. v. 
Advanced Tooling Specialists, Inc., 206 Wis. 2d 435, 442, 557 
N.W.2d 835 (Ct. App. 1996) (citing Racine v. Weisflog, 165 
Wis. 2d 184, 190, 477 N.W.2d 326 (Ct. App. 1991)) ("It is well 
established that a corporate officer or director is under a 
fiduciary duty of loyalty, good faith and fair dealing in the 
conduct of corporate business."). 
No.  2004AP276.ssa 
 
7 
 
has many fiduciary duties, one of which is the duty of loyalty.13  
While a trustee's duty of loyalty may be described as "the most 
fundamental duty,"14 it is not the only one.     
¶60 Restatement (Second) of Trusts § 170 describes the 
duty of loyalty as the duty to administer the trust solely in 
the interest of the beneficiary: 
(1) The trustee is under a duty to the beneficiary to 
administer the trust solely in the interest of the 
beneficiary. 
(2) The trustee in dealing with the beneficiary on the 
trustee's 
own 
account 
is 
under 
a 
duty 
to 
the 
beneficiary to deal fairly with him and to communicate 
to him all material facts in connection with the 
transaction which the trustee knows or should know.15 
¶61 The treatises and texts state that the fiduciary 
duties of a trustee include not only the duty of loyalty but 
                                                 
13 2A Austin Wakeman Scott & William Franklin Fratcher, 
Scott on Trusts §§ 169-185 (4th ed. 1987) (listing 17 distinct 
fiduciary duties of a trustee); Restatement (Second) of Trusts 
§§ 169-186 (1959) (listing 17 distinct fiduciary duties of a 
trustee).   
The duties listed in the Restatement and Scott on Trusts 
are substantially the same.  Both clearly include the duty of 
loyalty as a fiduciary duty distinct from the other fiduciary 
duties listed. 
14 2A Scott & Fratcher, supra note 13, § 170; George Gleason 
Bogert & George Taylor Bogert, The Law of Trusts and Trustees 
§ 543 at 217 (rev. 2d ed. replacement vol. 1993). 
15 Similarly, Scott on Trusts defines the fiduciary duty of 
loyalty as "the duty of a trustee to administer the trust solely 
in the interest of the beneficiaries.  [A trustee] is not 
permitted to place himself in a position where it would be for 
his own benefit to violate his duty to the beneficiaries."  2A 
Scott & Fratcher, supra note 13, § 170.  For another discussion 
of the duty of loyalty, see Bogert & Bogert, supra note 14, 
§§ 543-543(V). 
No.  2004AP276.ssa 
 
8 
 
also the duty to administer the trust,16 the duty to keep and 
render accounts,17 and the duty to furnish information.18  For 
example, a trustee might breach the duty to furnish information 
by accidentally providing incorrect or inaccurate information 
about the content of the trust corpus or the beneficiary's 
rights under the trust. 
¶62 Another fiduciary duty of a trustee to the beneficiary 
is the duty to exercise care and skill in administering the 
trust.  The trustee's fiduciary duty to the beneficiary to 
administer the trust with care and skill is described in the 
Restatement (Second) of Trusts: 
The trustee is under a duty to the beneficiary in 
administering the trust to exercise such care and 
skill as a man of ordinary prudence would exercise in 
dealing with his own property; and if the trustee has 
or procures his appointment as trustee by representing 
that he has greater skill than that of a man of 
                                                 
16 2A Scott & Fratcher, supra note 13, § 169; Restatement 
(Second) of Trusts § 169 (1959). 
17 Richards v. Barry, 39 Wis. 2d 437, 441-42, 159 N.W.2d 660 
(1968) (duty to keep accounts); Leonard v. Ingram, 202 Wis. 117, 
124-26, 230 N.W. 715 (1930) (same); 2A Scott & Fratcher, supra 
note 13, § 172; Restatement (Second) of Trusts § 172 (1959). 
18 2A Scott & Fratcher, supra note 13, § 173 ("The trustee 
is under a duty to the beneficiaries to give them on their 
request at reasonable times complete and accurate information as 
to the administration of the trust."); Restatement (Second) of 
Trusts § 173 (1959). 
For another example of stating the trustee's duties, see 
Bogert & Bogert, supra note 14, §§ 541 (exercise reasonable care 
and skill), 582 (protect and preserve trust assets), 596 
(earmark and separate trust property), 611 (make trust property 
productive), 975 (furnish information to beneficiary). 
No.  2004AP276.ssa 
 
9 
 
ordinary prudence, he is under a duty to exercise such 
skill.19 
¶63 According to the treatises, a trustee's breach of a 
fiduciary duty can be intentional or negligent, and in certain 
circumstances there may be liability without fault.20  
¶64 As I have said, the majority opinion might be read to 
fit some or all the trustee's fiduciary duties within the 
fiduciary duty of loyalty.  However, the majority opinion might 
also be read to say that the other duties normally thought of as 
a trustee's fiduciary duties are not fiduciary duties at all, 
but are duties owed by many persons, such as the duty of 
ordinary care, and are not analyzed as breach of fiduciary duty.  
Thus, the majority opinion addresses the relationship between a 
trustee's fiduciary duties and the non-fiduciary duty of 
ordinary care. 
¶65 If this latter view is an accurate characterization of 
the majority opinion, it is making very broad statements about 
the nature and content of fiduciary duties.     
                                                 
19 Restatement (Second) of Trusts § 174 (1959); see also 3 
Scott & Fratcher, supra note 13, § 174; Sensenbrenner v. 
Sensenbrenner, 
76 
Wis. 2d 625, 
635, 
252 
N.W.2d 47 
(1977) 
(trustees have duty to employ "diligence, prudence, and absolute 
fidelity"). 
20 3 Scott & Fratcher, supra note 13, § 201 (breach of trust 
ordinarily by intentional or negligent conduct, but there may 
also be liability without fault); Restatement (Second) of Trusts 
§ 201 (1959) (same). 
For example, where a trustee under a mistake of law makes 
payment to a person not entitled as beneficiary, he is liable to 
the beneficiary, even though his conduct was neither intentional 
nor negligent.  Galard v. Winans, 74 A. 626 (Md. 1909). 
No.  2004AP276.ssa 
 
10 
 
¶66 The majority opinion relies on commentators and cases 
addressing the relationship between fiduciary duties and the 
non-fiduciary duty of care in the context of fiduciaries other 
than trustees.  It appears that this literature is primarily in 
the context of the duties owed by an attorney to a client or the 
duty other agents owe to principals, such the duty of corporate 
officers and directors to shareholders.21  The literature cited 
by the majority opinion criticizes cases confusing an attorney's 
fiduciary duties to a client and an attorney's duty of due care 
in performance of services.  According to the commentators, the 
latter is the basis for a malpractice negligence action, not an 
action for breach of fiduciary duty.  The commentators suggest 
that these two types of breach of duty should be analyzed 
separately because of differences regarding proof of causation, 
proof of damages, and applicable statutes of limitations. 
¶67 At first blush, it appears that in Hatleberg v. 
Norwest Bank of Wisconsin, 2005 WI 109, 283 Wis. 2d 234, 700 
N.W.2d 15, 
this 
court 
created 
confusion 
regarding 
the 
relationship between a fiduciary duty and a non-fiduciary duty 
of ordinary care.  In Hatleberg this court addressed claims 
relating to an irrevocable trust that did not include certain 
provisions necessary to avoid tax liability upon the settlor's 
                                                 
21 See, e.g., Gregory, supra note 11; Ray Ryden Anderson & 
Walter W. Steele, Jr., Fiduciary Duty, Tort and Contract: A 
Primer on the Legal Malpractice Puzzle, 47 S.M.U. L. Rev. 235 
(1994) (also comparing contract actions); Smith v. Mehaffy, 30 
P.3d 727 (Col. Ct. App. 2000); Bristol & West Bldg. Soc'y v. 
Mothew, [1998] Ch. 1, at 17, 1996 WL 1092374 (British Court of 
Appeal). 
No.  2004AP276.ssa 
 
11 
 
death.  The bank that was trustee was aware of the defect but 
did not reveal it to the settlor.  The settlor's estate sued the 
bank trustee for erroneously informing the settlor, after 
creation of the trust, that she would avoid tax liability by 
annually depositing additional funds in the trust.22   
¶68 This court held that the bank could be held liable for 
providing the incorrect information.  The court concluded that 
the bank held itself out as an expert in financial planning and 
was liable for negligent performance of professional services 
when it provided false information.23   
¶69 The court of appeals in the instant case points out 
that Hatleberg might be read to imply that a claim for 
negligence is indistinguishable from a claim for breach of 
fiduciary duty.24  
¶70 However, the court of appeals also suggests a more 
appropriate reading of Hatleberg.  In Hatleberg, this court 
addressed the negligence theories presented by the plaintiff and 
did not intend to opine on the relationship between a claim for 
the breach of a fiduciary duty and a claim for negligent 
performance of professional services, a relationship that was 
not an issue in the case before the court.25  See the court of 
                                                 
22 Hatleberg v. Norwest Bank of Wis., 2005 WI 109, ¶¶6-12, 
283 Wis. 2d 234, 700 N.W.2d 15. 
23 Id., ¶¶34-39, 42.  The court also concluded that the bank 
committed negligent misrepresentation.  Id., ¶¶40-41. 
24 Zastrow, 286 Wis. 2d 416, ¶22. 
25 Id., ¶23. 
No.  2004AP276.ssa 
 
12 
 
appeals decision, discussing the distinction between a fiduciary 
duty claim and a negligence claim.26 
¶71 As I read Hatleberg, this court noted three distinct 
duties under which the bank might be liable to the settlor's 
estate, clearly distinguishing between breach of fiduciary 
duties and the breach of the duty of ordinary care.27  Hatleberg, 
then, can be explained by recognizing that the bank, in dealing 
with the settlor after the trust was established, owed her no 
fiduciary duty as a trustee of the trust.28  Although the bank 
was held to a professional standard of care, it was held to that 
standard because it held itself out to the settlor as an expert 
financial advisor, not because of a fiduciary relationship as 
trustee with the settlor.29   
                                                 
26 Id., ¶¶23-24, 26. 
27 See Hatleberg, 283 Wis. 2d 234, ¶18 ("We have organized 
our analysis into three categories: (1) Duties arising in [the 
defendant's] undisputed capacity as trustee; (2) Duties arising 
in [the defendant's] disputed capacity as financial planner or 
advisor; and (3) Duty to avoid negligently providing inaccurate 
information."). 
28 Restatement (Second) of Trusts § 174 (1959) (trustee's 
duty of care owed to beneficiary). 
29 Hatleberg, 283 Wis. 2d 234, ¶¶38-39; see Zastrow, 286 
Wis. 2d 416, ¶¶24-26. 
In Hatleberg, 283 Wis. 2d 234, ¶32, the court noted that 
fiduciary duties may arise from the relationship between a 
financial advisor and a client.  However, the court concluded 
that it need not address the existence of such duties because it 
found that the bank had violated the ordinary duty of care and 
could be held liable for negligence.  The conclusion that the 
court did not need to address the fiduciary duty claim may be 
part of the cause for confusion surrounding the Hatleberg case. 
No.  2004AP276.ssa 
 
13 
 
¶72 Thus, at least with respect to the law of trusts, it 
appears to me that the case law in this state has not confused a 
fiduciary duty of the trustee and the non-fiduciary duty of 
ordinary care.  Indeed, in Hatleberg, when the duty of care was 
not the trustee's fiduciary duty of care, the court recognized 
this distinction and analyzed the claim as a negligence claim.   
¶73 The principles of fiduciary duty apply with different 
force in different contexts involving different persons and 
relationships.  None of the sources I have found, and none of 
the sources cited by the majority opinion, addresses the duties 
of a trustee.  As Professor Deborah A. DeMott explains, the law 
of fiduciary duty is "situation-specific."30  Litigants and 
courts should therefore take care in identifying the fiduciary 
and the fiduciary duty at issue in each case because different 
fiduciaries may have different duties, including the duty of 
care.   
¶74 In sum, I conclude that, as dictated by our precedent 
in Beloit Liquidating, the two-year statute of limitations for 
intentional torts, Wis. Stat. § 893.57, applies to claims for 
breach of fiduciary duty.  That analysis is sufficient to decide 
the instant case.  I would go no further. 
¶75 I am authorized to state that Justice ANN WALSH 
BRADLEY joins this opinion and Justice N. PATRICK CROOKS joins 
Part I of this opinion. 
                                                 
30 See Deborah A. DeMott, Beyond Metaphor: An Analysis of 
Fiduciary Obligation, 1988 Duke L.J. 879, 879 (1988). 
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