Title: Robert Stuart v. Weisflog's Showroom Gallery, Inc.

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2008 WI 86 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2005AP1287 
COMPLETE TITLE: 
 
 
Robert Stuart and Lin Farquhar-Stuart, 
          Plaintiffs-Respondents, 
     v. 
Weisflog's Showroom Gallery, Inc. and Ronald R. 
Weisflog, 
          Defendants-Respondents, 
 
American Family Mutual Insurance Company, 
          Defendant-Appellant-Petitioner. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2006 WI App 109 
Reported at:  293 Wis. 2d 668, 721 N.W.2d 127 
(Ct. App. 2006-Published) 
 
 
OPINION FILED: 
July 10, 2008   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
September 5, 2007   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Waukesha   
 
JUDGE: 
Patrick C. Haughney   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
BRADLEY, J., concurs (opinion filed). 
ABRAHAMSON, C.J., joins concurrence. 
 
ROGGENSACK, J., concurs (opinion filed). 
ZIEGLER, J., joins concurrence.   
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the defendant-appellant-petitioner there were briefs by 
Paul J. Pytlik, Michelle M. Stoeck, and Hills Legal Group, Ltd., 
Waukesha, and oral argument by Paul J. Pytlik. 
 
For the plaintiffs-respondents there was a brief by James 
J. Carrig, Matthew R. Jelenchick, and Niebler, Pyzyk, Klaver & 
Carrig LLP, Menomonee Falls, and oral argument by Matthew R. 
Jelenchick. 
 
 
 
2 
An amicus curiae brief was filed by Jeffrey Leavell and 
Jeffrey Leavell, S.C., Racine, on behalf of the Civil Trial 
Counsel of Wisconsin. 
 
 
 
 
2008 WI 86
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2005AP1287  
(L.C. No. 
2003CV925) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Robert Stuart and Lin Farquhar-Stuart, 
          Plaintiffs-Respondents, 
 
     v. 
 
Weisflog's Showroom Gallery, Inc., and  
Ronald R. Weisflog, 
          Defendants-Respondents, 
 
American Family Mutual Insurance Company, 
          Defendant-Appellant-Petitioner. 
 
FILED 
 
JUL 10, 2008 
 
David R. Schanker 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed and 
cause remanded.   
 
¶1 
LOUIS B. BUTLER, JR., J.   This is a review of a 
published court of appeals opinion1 affirming the circuit court's 
determination 
that 
a 
commercial 
general 
liability 
(CGL) 
insurance policy issued by American Family Mutual Insurance 
Company (American Family) to Weisflog's Showroom Gallery, Inc. 
                                                 
1 Stuart v. Weisflog's Showroom Gallery, Inc., 2006 WI App 
184, 296 Wis. 2d 249, 722 N.W.2d 766. 
No. 
2005AP1287   
 
2 
 
(WSGI)2 covered damages awarded to Robert Stuart and Lin 
Farquhar-Stuart (the Stuarts) in a lawsuit resulting from the 
misrepresentations, as well as design and construction defects, 
related to a home remodeling project WSGI performed for the 
Stuarts. 
¶2 
A jury found WSGI liable for the statutory and tort 
violations alleged by the Stuarts, estimating damages "resulting 
from the negligence" of the defendants at $95,000.  The Circuit 
Court for Waukesha County, Judge Patrick C. Haughney presiding, 
also required the jury to apportion the damages between the 
misrepresentation and negligence in construction claims.  The 
court 
subsequently 
accorded 
statutory 
double 
damages 
and 
attorney fees to only the percentage of the award assigned to 
the misrepresentation claim.   
                                                 
2 Record exhibits include various documents that depict the 
name of the business as "Weisflog Homes," "Weisflog's Showroom 
Gallery, Inc.," "Weisflog Homes Specialty Drywalling & Repairs," 
and "Weisflog's Home and Remodeling Showroom."  The Stuarts' 
"Remodeling Architectural Contract" was with Weisflog's Showroom 
Gallery, Inc., and the "Remodeling Contract" was with Weisflog 
Homes Specialty Drywall & Repairs.  Except where it is necessary 
to differentiate, "WSGI" will refer to the business under all of 
its names. 
No. 
2005AP1287   
 
3 
 
¶3 
The court of appeals reversed.3  The damage award and 
related issues raised in that appeal are the subjects of the 
companion case, Stuart v. Weisflog's Showroom Gallery, Inc., 
2008 WI 22, ___ Wis. 2d ___, 746 N.W.2d 762 (Stuart I), which 
was released earlier this term.   
¶4 
The subject of the present opinion is a separate 
appeal by American Family, in which the insurance company asks 
us to determine whether WSGI's CGL insurance policy covers the 
damages awarded to the Stuarts.4  We agree with American Family 
that the damages caused by Weisflog and WSGI in this case are 
not 
covered 
by 
the 
insurance 
policy 
because 
their 
misrepresentations were not accidental "occurrences" within the 
meaning of the policy, and because property damage arising out 
of their work is excluded from coverage.  We therefore reverse 
                                                 
3 In a decision described in more detail in the background 
section of this opinion, the court of appeals held that the 
apportionment of damages between the misrepresentation and 
negligence and resulting limitation of double damages was 
erroneous, and that the attorney fees award was similarly 
erroneous, being based in part on the apportionment calculation.  
Stuart v. Weisflog's Showroom Gallery, Inc., 2006 WI App 109, 
¶¶5, 42-57, 293 Wis. 2d 668, 721 N.W.2d 127.  The court of 
appeals also ruled in relevant part that the Stuarts' claims 
were not barred by the economic loss doctrine or any statute of 
limitations.  Id., ¶¶4, 19-34, 62.  
4 American Family also raises economic loss doctrine, damage 
apportionment and attorney fees arguments that we have resolved 
in Stuart v. Weisflog's Showroom Gallery, Inc., 2008 WI 22, ___ 
Wis. 2d ___, 746 N.W.2d 762 (Stuart I).  Therefore, we do not 
address those issues further in this opinion.  Although those 
issues were also discussed in the court of appeals decision 
which we review in the present opinion, the mandate of that 
decision was limited to the issue of insurance coverage, and 
consequently so is the mandate and ruling in this decision.     
No. 
2005AP1287   
 
4 
 
the decision of the court of appeals and remand this matter for 
further proceedings consistent with this opinion and with Stuart 
I. 
I 
¶5 
The facts of this case are identical to those set out 
in the companion case, Stuart I.  Only those facts pertinent to 
the issues raised in this appeal will be repeated here.  
¶6 
In 1995 the Stuarts entered into a "Remodeling 
Architectural Contract" with WSGI for architectural drawings for 
a sizable home remodeling project.5  The next year, the Stuarts 
entered a "Remodeling Contract" with "Weisflog Homes" to perform 
the construction work on the project, which included, among 
other things, expansion of the living room, family room, master 
bedroom and garage, and the addition of a bedroom and a hot 
tub/spa room, at a cost of approximately $278,000.6   
¶7 
WSGI completed construction in 1997.  Four years 
later, the Stuarts discovered problems with the floor in the hot 
tub/spa room.  An engineer/home inspector hired by the Stuarts 
found significant defects in the design and construction of the 
project, including rotted wood, warped windows, mold and mildew, 
inadequate ventilation, improper clearance to floor joists, 
exposed insulation, lack of access to attic and crawl spaces, 
drainage problems, improperly installed lighting, lack of rain 
                                                 
5 The "Remodeling Architectural Contract" was signed by 
Ronald R. Weisflog, president, on behalf of WSGI. 
6 The 
"Remodeling Contract" was signed by Robert R. 
Weisflog, on behalf of Weisflog Homes. 
No. 
2005AP1287   
 
5 
 
gutters, improperly constructed stairs, and lack of hand rails.  
In 2003 the Stuarts brought suit against WSGI, Weisflog, and 
Employers Insurance of Wausau, alleging negligence.  The action 
against Employers Insurance of Wausau was voluntarily dismissed 
on April 29, 2003, and an amended complaint filed the same day 
named American Family, with whom WSGI had a CGL policy, as a 
party to the suit.  A second amended complaint was filed on 
August 11, 2003, alleging that WSGI and Weisflog engaged in 
misrepresentation in violation of the Home Improvement Trade 
Practices Act, codified as Wis. Admin. Code § ATCP 110 (Sept. 
2001) and enforced through Wis. Stat. § 100.20(2005-06),7 and 
                                                 
7 The Stuarts' second amended complaint lists a number of 
provisions under Wis. Admin. Code § ATCP 110.02 and .05 (Sept. 
2001), 
which 
they 
claim 
WSGI 
and 
Weisflog 
violated.  
Section ATCP 110.02(11) remains a focus in this appeal.  The 
section provides in relevant part: 
Prohibited Trade Practices.  No seller shall 
engage in the following unfair methods of competition 
or unfair trade practices: 
 . . . . 
(11) 
Misrepresentations; 
general. 
 
Make 
any 
false, deceptive or misleading representation in order 
to induce any person to enter into a home improvement 
contract, to obtain or keep any payment under a home 
improvement contract, or to delay performance under a 
home improvement contract. 
All references to the Wisconsin Administrative Code are to the 
September 2001 register date unless otherwise noted.  All 
subsequent references to the Wisconsin Statutes are to the 2005-
06 version unless otherwise indicated. 
No. 
2005AP1287   
 
6 
 
breach of contract,8 while incorporating the negligence claims of 
the first amended complaint.  The Stuarts sought double damages, 
pursuant to Wis. Stat. § 100.20(5).9 
¶8 
In its answer to the second amended complaint, 
American Family stated that the policy it issued "may not 
provide coverage" for the claims.  In a motion filed on March 5, 
2004, American Family asked the circuit court for a declaration 
that the Stuarts' claims and damages were not covered by the 
policies issued to Weisflog and WSGI, and requested that 
American Family be summarily dismissed from the case.  In an 
order signed on June 22, 2004, the court determined that the 
homeowners' policies issued to Weisflog did not cover the 
damages, but the court denied the motion as to the CGL policy 
issued to WSGI.  In a pretrial report, American Family again set 
forth its position that it had no responsibility to cover 
damages caused by WSGI.  
¶9 
In support of his misrepresentation claim, Robert 
Stuart testified at trial that Ronald Weisflog had made 
assurances 
that 
his 
products 
are 
high 
quality, 
that 
he 
                                                 
8 The breach of contract claims were voluntarily dismissed 
by the Stuarts at the opening of trial and are no longer at 
issue on appeal.   
9 Wisconsin Stat. § 100.20(5) provides: 
Any person suffering pecuniary loss because of a 
violation by any other person of any order issued 
under this section may sue for damages therefor in any 
court of competent jurisdiction and shall recover 
twice the amount of such pecuniary loss, together with 
costs, including a reasonable attorney's fee. 
No. 
2005AP1287   
 
7 
 
understood local codes and regulations, and that "he could 
provide architectural service for us where he would do all the 
architectural design work for us."  In contrast with such 
assurances, the Stuarts highlighted not just the undisputedly 
poor quality of the product and services they received, but also 
the statements of both Ronald and Robert Weisflog admitting 
unfamiliarity with the building code.10 
                                                 
10 In particular, Robert Weisflog testified that he did not 
even know there was a Brookfield code.  In contrast with Robert 
Stuart's testimony, his father, Ronald Weisflog, testified that 
he did not recall telling the Stuarts he would comply with the 
building code, and he refused to concede that he was completely 
unfamiliar with the codes.  During cross-examination, Ronald 
answered the question, "Well, isn't the truth that you didn't 
know what the codes were?" with the flat denial, "no."  However, 
Ronald soon afterwards conceded unfamiliarity with part of the 
code pertinent to this case.  In response to the question, "But, 
in fact, you did not know what the building code was for 
exhausting dryer vents, fair statement?"  Ronald answered, 
"That's fair."  
No. 
2005AP1287   
 
8 
 
¶10 On October 6, 2004, a jury found that WSGI did make 
false, deceptive or misleading representations in order to 
induce the Stuarts to enter into a remodeling architecture 
contract, that the Stuarts relied on those representations, and 
that those representations were a cause of damages to the 
Stuarts.  The jury further found WSGI negligent in the design of 
                                                                                                                                                             
Justice 
Roggensack's 
concurring 
opinion 
describes 
our 
reference to such statements in the record as inappropriate 
references because, she contends, we may not refer to facts in 
the record beyond the words of the jury's special verdict 
answers 
to 
support 
our 
opinion. 
 
Justice 
Roggensack's 
concurrence, ¶100.  However, this limited approach to appellate 
review is not supported by legal authority.  It is well 
established that upon reviewing a jury's special verdict answers 
or other findings, we may refer to whatever facts in the record 
support the jury's findings.  See Coney v. Milwaukee & Suburban 
Transp. Corp., 8 Wis. 2d 520, 528, 99 N.W.2d 713 (1959); Huffman 
v. Reinke, 268 Wis. 489, 490, 67 N.W.2d 871 (1955).  Similarly, 
we may turn to supporting documents in the record to interpret a 
jury's findings.  See U.S. v. Bass, 327 F. Supp. 959, 960 (E.D. 
Wis. 1971).  Here, the jury answered "yes" to Special Verdict 
Question #1, which asked whether Weisflog Showroom Gallery, Inc. 
made "any false, deceptive, or misleading representations in 
order to induce the Plaintiffs, Robert & Lin Stuart to enter 
into a remodeling architecture contract, or to obtain or keep 
any payment under the remodeling contract" (emphasis added).  
Contrary 
to 
Justice 
Roggensack's 
representation 
of 
this 
question, it did not use the same wording of the later Special 
Verdict 
Question 
#13, 
which 
limited 
its 
inquiry 
to 
representations about future compliance with building codes, but 
rather asks about "any" misrepresentations.  Because Question #1 
is 
comparatively 
broad 
and 
not 
limited 
to 
specific 
misrepresentations, it is appropriate to turn to the record to 
review what evidence of misrepresentations was presented to the 
jury.  Indeed, in her dissent to Stuart I, Justice Roggensack 
herself cites the record, and not just the special verdict, 
where it supports her argument to do so.  See Stuart I, ___ Wis. 
2d 
___, 
¶¶88-89 (Roggensack, J., dissenting)(referring to 
testimony of an expert witness to argue that such testimony 
provided the support for the jury's damage award for negligent 
construction).  
No. 
2005AP1287   
 
9 
 
the remodeling project, and that such negligence was a cause of 
damages to the Stuarts.  The jury also found WSGI negligent with 
respect to the construction of the addition to the Stuarts' 
home, and that such negligence was a cause of damage to the 
Stuarts.  Finally, the jury found that WSGI made false, 
deceptive or misleading representations that remodeling work 
would comply with building codes in order to induce the Stuarts 
to enter the remodeling contract, that the Stuarts relied on 
those representations, and that those representations were a 
cause of damage to the Stuarts.   
¶11 The jury held WSGI liable for $95,000 in damages 
"resulting from the negligence" to the Stuarts.  In accordance 
with the special verdict instructions, the jury then apportioned 
the damages between the misrepresentation and negligence claims, 
allocating 25 percent of the award to violations of Wis. Admin. 
Code ch. ATCP 110 and 75 percent to negligence in construction.  
¶12 In a post-verdict motion filed on October 27, 2004, 
American Family requested an order ruling that WSGI's CGL policy 
excluded coverage for the damages awarded to the Stuarts; 
dismissing the portion of damages related to misrepresentations 
because, American Family argued, the statute of limitations had 
expired; and dismissing the portion of damages related to 
negligence because, American Family argued, those claims were 
barred by the economic loss doctrine.  The motion also requested 
that, in the alternative, a new trial be conducted to apportion 
those damages covered by insurance from those which are not.  
No. 
2005AP1287   
 
10 
 
¶13 In an order dated January 10, 2005, the circuit court 
denied the motion and concluded that insurance coverage existed 
under the CGL policy for the damages awarded.  On February 10, 
2005, judgment was entered against WSGI and American Family in 
the amount of $154,108.  The award included the $95,000 awarded 
by the jury, in addition to double damages in the amount of 
$23,750 for the misrepresentation portion of the award, attorney 
fees of $15,675, and costs in the amount of $19,683.  
¶14 The Stuarts filed an appeal on April 6, 2005; Weisflog 
and WSGI filed a cross-appeal.  On May 9, 2005, American Family 
also filed a cross-appeal, which was subsequently designated a 
new appeal and given a separate case number. 
¶15 On May 3, 2006, the court of appeals decided the 
Stuarts' appeal and Weisflog's and WSGI's cross-appeal.  In 
Stuart v. Weisflog's Showroom Gallery, Inc., 2006 WI App 109, 
293 Wis. 2d 668, 721 N.W.2d 127, the court of appeals affirmed 
the circuit court's decision that the Stuarts' lawsuit was not 
barred by the statute of limitations and that the economic loss 
doctrine did not apply.  Id., ¶¶4, 19-34.  However, the court of 
appeals reversed the circuit court's decision to double only a 
portion of the award, and it remanded the matter for entry of 
judgment reflecting a doubling of the entire damage award and 
for redetermination of attorney fees.  Id., ¶¶5, 42-57.  The 
court of appeals also held that the circuit court erred in 
excluding a question as to Ronald Weisflog's personal liability 
from the verdict form, and remanded the matter for a retrial on 
that limited question.  Id., ¶¶58-62.  WSGI, Weisflog, and 
No. 
2005AP1287   
 
11 
 
American Family petitioned this court for review, and review was 
granted on December 6, 2006.11   
¶16 The 
court 
of 
appeals 
decided 
American 
Family's 
separate cross-appeal in Stuart v. Weisflog's Showroom Gallery, 
Inc., 2006 WI App 184, 296 Wis. 2d 249, 722 N.W.2d 766, 
affirming the circuit court's determination that the American 
Family policy covers the Stuarts' damage award.  Specifically, 
the court of appeals concluded that the general coverage 
provisions 
of 
the 
CGL 
policy 
do 
not 
exclude 
ATCP 
misrepresentation 
violations, 
because 
even 
though 
an 
"occurrence" is defined as "accidental" under the policy, the 
ATCP misrepresentation cause of action does not require proof of 
intent to deceive.  Id., ¶¶1, 23-33.  The court concluded that 
other damages would also be covered under the main coverage 
clause because "all the damages awards here flowed from the 
defendant's liability for property damage, in that but for the 
misrepresentations, the latter would not have occurred."  See 
id., ¶38.  Finally, the court concluded that neither the "your 
work" nor the "your product" business risk exclusion in the CGL 
policy cited by American Family applies.  Id., ¶¶1, 17-22, 38.  
American Family petitioned this court for review, and review was 
granted on December 6, 2006. 
¶17 In our separate Stuart I opinion, we affirmed the 
court of appeals decision remanding on the bases that the 
                                                 
11 Additional facts and procedural background are set forth 
in Stuart I, ___ Wis. 2d ___, ¶¶1-9. 
No. 
2005AP1287   
 
12 
 
circuit court should not have required the jury to apportion 
damages between misrepresentation and negligence, that the 
attorney fees calculation erroneously failed to apply the 
correct rule of law, that neither the economic loss doctrine nor 
any statutes of limitations bars the negligence claims in this 
case, and that there remain unresolved issues regarding the 
personal liability of Ronald Weisflog.  See Stuart I, ___ Wis. 
2d ___, ¶¶4, 48.  We now address the remaining insurance 
coverage issues, concluding for the below reasons that the 
damages caused by Weisflog and WSGI in this case are not covered 
by the CGL insurance policy issued by American Family.12 
II 
¶18 This case primarily involves interpretation of an 
insurance policy, which is ordinarily a question of law subject 
to de novo review.  See Welin v. Am. Family Mut. Ins. Co., 2006 
WI 81, ¶16, 292 Wis. 2d 73, 717 N.W.2d 690.  An insurance 
policy's terms should be interpreted as they would be understood 
by a reasonable person in the position of the insured.  State 
Farm Mut. Auto. Ins. Co. v. Langridge, 2004 WI 113, ¶47, 275 
Wis. 2d 35, 683 N.W.2d 75.  We will interpret a policy's 
language so that it comports with the common and ordinary 
meaning it would have in the mind of a lay person.  Cieslewicz 
                                                 
12  
Because we have already explained in Stuart I, ___ 
Wis. 2d. ___, ¶¶13-37, the reasons why the economic loss 
doctrine does not bar the Stuarts' claims, we do not here 
address Justice Roggensack's arguments related to that issue 
which she raises in her separate opinions both to this case and 
to Stuart I. 
No. 
2005AP1287   
 
13 
 
v. Mut. Serv. Cas. Ins. Co., 84 Wis. 2d 91, 97-98, 267 N.W.2d 
595 (1978).   
¶19 If an insurance policy's language is ambiguous, i.e., 
susceptible of more than one reasonable interpretation, we will 
construe it in favor of coverage.  Cardinal v. Leader Nat'l Ins. 
Co., 166 Wis. 2d 375, 382, 480 N.W.2d 1 (1989).  Similarly, 
exclusions to insurance coverage are narrowly construed against 
the insurer, especially if their effect is uncertain.  Id.  
¶20 If, however, the language of a policy is unambiguous, 
and its terms plain on their face,  
the policy should not be rewritten by construction to 
bind the insurer to a risk it was unwilling to cover, 
and for which it was not paid.  Litigants should not 
be able to resort to rules of construction for the 
purpose of modifying the contract or creating a new 
contract; and a court need not resort to either 
construction or case law to bolster its recognition of 
that plain meaning. 
Garriguenc v. Love, 67 Wis. 2d 130, 135, 226 N.W.2d 414 (1975).  
An otherwise unambiguous provision is not rendered ambiguous 
solely because it is difficult to apply the provision to the 
facts of a particular case.  Lawver v. Boling, 71 Wis. 2d 408, 
422, 238 N.W.2d 514 (1976). 
III 
¶21 This case requires us to determine whether the CGL 
policy issued by American Family to WSGI contains coverage for 
the damages awarded to the Stuarts.  As a threshold matter, we 
must first determine whether the main coverage clause of the 
policy includes coverage for the damages, or whether, as 
No. 
2005AP1287   
 
14 
 
American Family argues, coverage is precluded because the 
misrepresentations in this case were not "accidents."  We then 
address American Family's other arguments, including whether 
coverage is precluded because WSGI caused only economic damages, 
not property damage, and whether the policy's business risk 
exclusion clauses invoked by American Family apply.   
A 
¶22 We begin our examination of the coverage issue by 
reviewing the language of the "bodily injury and property damage 
liability" coverage clause of the CGL policy.  The coverage 
clause provides in relevant part: 
COVERAGE A.  BODILY INJURY AND PROPERTY DAMAGE LIABILITY 
1. 
Insuring Agreement 
a. We will pay those sums that the insured becomes 
legally obligated to pay as damages because of 
"bodily injury" or "property damage" to which 
this insurance applies. . . . 
 . . . . 
b. This insurance applies to "bodily injury" and 
"property damage" only if: 
(1) 
The "bodily injury" or "property damage" 
is caused by an "occurrence" that takes 
place in the "coverage territory"; and 
(2) 
The "bodily injury" or "property damage" 
occurs during the policy period.  
The policy defines "occurrence" as "an accident, including 
continuous or repeated exposure to substantially the same 
general harmful conditions."  
No. 
2005AP1287   
 
15 
 
¶23 Relying 
on 
this 
language 
limiting 
coverage 
to 
accidental 
occurrences, 
American 
Family 
argues 
that 
misrepresentation violations under Wis. Admin. Code § ATCP 
110.02 are by definition intentional, and thus do not constitute 
accidental occurrences.  We agree for the below reasons that 
ATCP § 110 misrepresentations do not constitute "accidents" 
triggering coverage. 
¶24 The plain text of the American Family CGL policy 
unambiguously defines "occurrence" as an "accident."  The 
meaning of "accident" itself is similarly unambiguous; we need 
look no farther than the common and ordinary meaning of the word 
as understood by a lay person.  See Cieslewicz, 84 Wis. 2d at 
97-98.  To determine the common and ordinary meaning of a word, 
we often rely upon definitions from recognized dictionaries.  
See, e.g., State v. Polashek, 2002 WI 74, ¶19, 253 Wis. 2d 527, 
646 N.W.2d 330.  Webster's Third New International Dictionary 
defines an accident as "1.a.  an event or condition occurring by 
chance or arising from unknown or remote causes . . .  b.  lack 
of intention or necessity . . ." (emphasis added).  Webster's 
Third New International Dictionary 11 (3d ed. 1986).  Therefore, 
applying the common and ordinary meaning that "accident" would 
have in the mind of a lay person, we conclude that an accident 
No. 
2005AP1287   
 
16 
 
is an event or condition occurring by chance or one that arises 
from unknown causes, and is unforeseen and unintended.13 
¶25 The parties do not appear to dispute whether an 
accident is, by definition, an unintentional act.  Rather, the 
focus of their dispute is whether an ATCP misrepresentation is 
an unintentional act, thereby rendering it an accident.   
¶26 American Family argues that the language of Wis. 
Admin. Code § ATCP 110.02(11) clearly indicates that intent is 
an element of the statutory misrepresentation violation, with 
the code section providing that a seller may not make a false 
representation "in order to" obtain a contract, obtain any 
payment, or delay performance.  In support of this argument, 
American Family cites Everson v. Lorenz, 2005 WI 51, 280 Wis. 2d 
1, 
695 N.W.2d 298, in which this court concluded that 
misrepresentations are not "accidents" within the context of a 
similar CGL policy.  American Family urges us to follow Everson 
and come to the same conclusion in this case, explaining that 
"[m]aking representations with an intent to induce the signing 
of a contract involves a purposeful intent which is inherently 
inconsistent with the concept of an [accidental] 'occurrence.'"  
                                                 
13 A similar dictionary definition of "accident" was cited 
in Doyle v. Engelke, 219 Wis. 2d 277, 289, 580 N.W.2d 245 
(1998)("'accident' is defined as '[a]n unexpected, undesirable 
event' or 'an unforeseen incident' which is characterized by a 
'lack of intention'")(quoting The American Heritage Dictionary 
of the English Language 11 (3d ed. 1992)).   
No. 
2005AP1287   
 
17 
 
¶27 We 
agree 
with 
American 
Family 
that 
the 
ATCP 
misrepresentations in this case were not accidental occurrences, 
and that Everson controls.   
¶28 The Stuarts do not take issue with the jury's findings 
that WSGI made misrepresentations "in order to induce" the 
Stuarts to enter into the architecture or remodeling contract.  
Applying a common and ordinary interpretation of the "in order 
to" language of the code and special verdict in this case, we 
conclude that this language evinces a clear element of volition.  
With the jury having found the presence of such volition and 
intent, in accordance with the requirements of the code, the 
only reasonable conclusion regarding WSGI's conduct "in order to 
induce" is that such conduct cannot qualify as an accidental, 
i.e., unintentional, occurrence. 
¶29 In support of this conclusion, we turn to Everson, 
which involved a similar insurance interpretation question.  In 
that case, Everson, the plaintiff, brought negligent, strict 
liability, and intentional misrepresentation claims against 
Lorenz after Lorenz misrepresented that the property he sold 
Everson was not within a flood plain.  Everson, 280 Wis. 2d 1, 
¶¶4-5, 13.  As a result of the misrepresentation, Everson 
purchased land which was unsuited for the construction of the 
home he had intended to build on it.  Id.  
¶30 Among the questions the court of appeals certified to 
this court in Everson was the issue of "[whether] an alleged 
strict 
responsibility 
misrepresentation 
and/or 
negligent 
misrepresentation in a real estate transaction constitute an 
No. 
2005AP1287   
 
18 
 
'occurrence' for the purpose of a commercial general liability 
insurance policy such that the insurer's duty to defend the 
insured is triggered[.]"  Id., ¶2.  In Everson, we concluded 
that no coverage existed under the CGL policy, which defined 
"occurrence" in the same manner as the CGL policy in the present 
case.  See id., ¶¶12, 41.  The basis for our decision that the 
CGL policy did not provide coverage was our conclusion that a 
volitional misrepresentation could not be considered an accident 
for purposes of coverage.  Id., ¶¶18-20.  
¶31 Everson 
is 
directly 
applicable 
to 
this 
case, 
particularly in light of the fact that both cases require us to 
address whether misrepresentations are covered under a CGL 
policy that limits coverage to accidental occurrences.  In the 
present case, the jury found that WSGI made misrepresentations 
in order to induce the Stuarts into the remodeling architectural 
contract and the remodeling contract.  In addition, Ronald 
Weisflog knew at the time of the misrepresentations that he was 
not familiar with an applicable building code.14  Stuart, 296 
Wis. 2d 249, ¶3.   
¶32 Such evidence illustrates that WSGI's conduct was a 
volitional act, as opposed to an accidental occurrence.  In 
Everson, we concluded that a false assertion "requires a degree 
of volition inconsistent with the term accident," and we held 
that "where there is a volitional act involved in such a 
misrepresentation, that act removes it from coverage as an 
                                                 
14 See supra, ¶9 n. 10. 
No. 
2005AP1287   
 
19 
 
'occurrence' under the liability insurance policy."  Everson, 
280 Wis. 2d 1, ¶¶19-20.  The same principle applies here.  
WSGI's false assertions to the Stuarts reflect a similar degree 
of volition, rendering the misrepresentations, along with the 
damage they caused, inapplicable for coverage as an accidental 
occurrence.  
¶33 The Stuarts attempt to distinguish this court's ruling 
in 
Everson 
as 
limited 
to 
negligent 
or 
strict 
liability 
misrepresentation claims.  They argue that the ruling does not 
preclude 
CGL 
policy 
coverage 
for 
damages 
resulting 
from 
misrepresentations under Wis. Admin. Code § ATCP 110, which they 
argue can still be considered accidental occurrences.  The 
difference, 
the 
Stuarts 
contend, 
is 
that 
statutory 
misrepresentation claims under § ATCP 110 do not require the 
same degree of knowledge or intent as negligent or strict 
liability misrepresentation claims.  
¶34 We reject this argument.  It defies logic to suggest 
that 
an 
ATCP 
misrepresentation 
claim, 
which 
includes 
a 
volitional "in order to induce" element, does not "rise to the 
level of common law misrepresentations," as the Stuarts argue.  
The Stuarts' argument is tied to their claim that, unlike common 
law 
misrepresentation 
claims, 
a 
Wis. 
Stat. 
§ 100.18 
misrepresentation claim does not include an element of "intent 
No. 
2005AP1287   
 
20 
 
to deceive or knowledge of falsity."15  However, proof of intent 
or knowledge of falsity is not required in either strict 
liability or negligent misrepresentation claims.  See Kailin v. 
Armstrong, 2002 WI App 70, ¶40 n.23, 252 Wis. 2d 676, 643 N.W.2d 
132.   
¶35 Indeed, Kailin, upon which the Stuarts rely, provides 
a helpful guide to the different types of misrepresentation 
claims, explaining that proof of intent to defraud is required 
for 
an 
intentional 
misrepresentation 
claim, 
while 
strict 
liability and negligent misrepresentation claims do not include 
actual intent elements at all.  See id., ¶37 & n.22, ¶40 & n.23.  
In 
contrast, 
§ ATCP 
110 
and 
Wis. 
Stat. 
§ 100.18 
misrepresentation claims do indeed require proof of intent to 
sell or induce.  As such, not only is the act in this case 
clearly volitional in nature, but the Stuarts' attempt to 
distinguish Everson on the basis that this case involves a 
misrepresentation claim fails. 
¶36 Not 
only 
is 
the 
Stuarts' 
proposed 
approach 
unreasonable, but it is also inappropriate in its failure to 
                                                 
15  The Stuarts appear to cite § ATCP 110 and Wis. Stat. 
§ 100.18 
interchangeably 
in 
their 
discussion 
about 
the 
difference between statutory and common law claims because, as 
Wisconsin courts have recognized, "public policy dictates that 
consumer protection statutes and administrative rules must be 
read in pari materia to achieve the goal of providing protection 
and remedies to consumers."  Rayner v. Reeves Custom Builders, 
Inc., 2004 WI App 231, 277 Wis. 2d 535, 691 N.W.2d 705.  Those 
cases interpreting Wis. Stat. § 100.18 are pertinent to our 
§ ATCP 110 analysis, particularly in light of the fact that 
statutes contain "intent to induce" language that is the focus 
of our volition discussion. 
No. 
2005AP1287   
 
21 
 
abide by the longstanding rule that we "must focus on the 
incident or injury that gives rise to the claim, not the 
plaintiff's theory of liability."  Berg v. Schultz, 190 Wis. 2d 
170, 177, 526 N.W.2d 781 (Ct. App. 1994).  In Berg, the court of 
appeals explained that this rule applies specifically to 
insurance coverage issues as well as to other situations.  Id. 
(citing Bankert v. Threshermen's Mut. Ins. Co., 110 Wis. 2d 469, 
480, 329 N.W.2d 150 (1983)).  Most pertinently, this court held 
in Bankert that:  
we need not speculate as to what was intended by the 
company when it issued the policy or by the insured 
when he acquired it.  As pointed out above, the 
company becomes legally liable to pay only when the 
insured incurs 
liability for personal injury or 
property damage caused by an "occurrence."  An 
occurrence is defined as an accident.  This is what is 
insured against——not theories of liability. 
Bankert, 110 Wis. 2d at 480 (emphasis added).   
¶37 Applying these principles to the arguments made by the 
Stuarts in this case, we conclude that the Stuarts place undue 
and inappropriate emphasis on the relative mens rea requirements 
of various misrepresentation causes of action.  To determine 
whether an act is accidental within the meaning of the CGL 
policy in this case, we need only determine whether the 
occurrence giving rise to the claims16 was an unintentional act 
in the sense that it was not volitional.   
                                                 
16 See Am. Family Mut. Ins. Co. v. Am. Girl, 2004 WI 2, ¶37, 
268 Wis. 2d 16, 673 N.W.2d 65.   
No. 
2005AP1287   
 
22 
 
¶38 Even if it were appropriate for us to distinguish 
among various types of misrepresentation claims, Kailin provides 
us the guidance we need to determine that ATCP misrepresentation 
claims are at least as intentional in nature as negligent or 
strict liability misrepresentation claims.  See Kailin, 252 Wis. 
2d 676, ¶37 & n.22, ¶40 & n.23.  Consequently, the Everson 
holding that common law misrepresentation claims are not 
"accidental" 
in 
nature 
logically 
applies 
to 
ATCP 
misrepresentation cases as well.   
¶39 The Stuarts' other attempts to distinguish Everson as 
inapplicable 
to 
Wis. 
Admin. 
Code 
§ ATCP 
110 
claims 
are 
fundamentally fallacious as well.  The Stuarts further argue, 
for instance, that, unlike the misrepresentation in Everson, 
WSGI’s representations became false only after the design and 
construction of the home addition were completed.  The Stuarts 
contend that an infringer’s knowledge is "absolutely irrelevant" 
because, under § ATCP 110, a representation may later ripen to a 
falsehood upon subsequent non-performance, as in this case.   
¶40 The Stuarts have it backwards.  As we have explained, 
the ordinary meaning of the word "accident," as used in accident 
insurance policies, is "an event which takes place without one's 
foresight or expectation.  A result, though unexpected, is not 
an accident"; rather, it is the causal event that must be 
accidental for the event to be an accidental occurrence.  See 
Am. Family Mut. Ins. Co. v. Am. Girl, Inc., 2004 WI 2, ¶37, 268 
Wis. 2d 16, 673 N.W.2d 65 (citation omitted).  See also Doyle, 
219 Wis. 2d at 290 (The definitions of both negligence and 
No. 
2005AP1287   
 
23 
 
accident "center on an unintentional occurrence leading to 
undesirable results. . . .  [C]omprehensive general liability 
policies are 'designed to protect an insured against liability 
for 
negligent 
acts 
resulting 
in 
damage 
to 
third-
parties.'")(citations omitted); United Coop. v. Frontiers FS 
Coop., 2007 WI App 197, ¶13, 304 Wis. 2d 750, 738 N.W.2d 578, 
(describing the determinate factor for coverage as the event 
that caused the damage, i.e., the "causal 'occurrence'").  In 
this case, the jury found (and ensuing court opinions, including 
Stuart I, clarified) that the property damage arose from the 
misrepresentations made in order to induce the Stuarts to enter 
into the contracts with WSGI.  It does not matter whether WSGI 
intended a specific result; what matters is whether the cause of 
the damage was accidental.  Consequently, contrary to the 
Stuarts' arguments, the defendants' intent to induce at the time 
they engaged in misrepresentations, not their ability to predict 
the exact result of their actions, is the key to determining 
whether their conduct was accidental.   
¶41 The Stuarts' attempt to distinguish Everson by arguing 
that WSGI's representations became false only after the job 
performance had ended depends upon a condition not supported by 
the record:  that the only misrepresentations by WSGI were 
assurances 
regarding 
future 
performance, 
as 
opposed 
to 
misrepresentations about existing conditions.  In fact, the 
record shows that the Stuarts themselves alleged, argued to the 
jury, and produced supporting evidence that Weisflog made 
misrepresentations on behalf of WSGI about his then existing 
No. 
2005AP1287   
 
24 
 
qualifications, knowledge, and abilities, not just about future 
performance.  For example, Robert Stuart's testimony describes 
Ronald Weisflog's statements during their first meeting in the 
following terms:   
[H]e professed a very high standard of quality, and he 
felt he could deliver exactly what we wanted.  And he 
talked about his qualities.  He understood Brookfield 
codes and regulations very well [emphasis added].  
That process would be easy.  He could provide 
architectural service for us where he would do all the 
architectural design work for us. . . .  
These statements constitute a representation of Weisflog's 
knowledge and WSGI's abilities at the time the statements were 
made, rather than merely being promises of future performance.   
¶42 As such, with the Stuarts basing their ATCP claims in 
Stuart I largely on misrepresentations about the defendants' 
already existing abilities, skills, and past work, the Stuarts 
have refuted their own argument in this case that the only 
"misrepresentations" made were promises of future actions, which 
Weisflog could not have known were "false" until after WSGI's 
performance.  
 
¶43 The final "occurrence" argument by the Stuarts we 
address is their contention that the CGL policy's property 
damage 
coverage 
clause 
must 
include 
coverage 
for 
misrepresentation claims because the policy's business risk 
exclusions 
specifically 
refer 
to 
"warranties 
or 
representations."  The Stuarts cite this court's decision in 
American 
Girl 
in 
support 
of 
their 
argument 
that 
if 
a 
misrepresentation were not an occurrence, there would be no need 
No. 
2005AP1287   
 
25 
 
for 
the 
policy's 
exclusions 
to 
expressly 
include 
representations.  However, the American Girl passage cited by 
the Stuarts did not address misrepresentations.  Rather, in that 
passage, we were rejecting American Family's contention that 
losses actionable in contract could never be CGL "occurrences," 
pointing to business risk exclusions applicable to contractual 
relationships as indicative that in some cases actions in 
contract could be occurrences.   
¶44 The same logic does not necessarily extend to an 
analysis of whether a CGL policy which does not include 
misrepresentations among those "occurrences" generally entitled 
to coverage could still reference other representations in a 
"your work" exclusion.  In other words, the reference to certain 
types of representations in the description of a business risk 
exclusion 
does 
not 
necessarily 
include 
reference 
to 
misrepresentations specifically.  "Misrepresentations" are but a 
subset of "representations."  Under the plain text of the 
"products-completed operations hazard" "your work" exclusion in 
the CGL policy, so long as a person made a representation that 
caused property damage away from the owned or rented premises of 
the person making the representation after the work was 
completed, the exclusion would apply.  The representation is not 
required under that exclusion to be false, let alone a 
No. 
2005AP1287   
 
26 
 
misrepresentation accompanied by the type of volition described 
in Everson.17   
¶45 In sum, each of the Stuarts' attempts to paint WSGI's 
misrepresentations as accidental occurrences fail.  Neither case 
law nor common sense supports an interpretation of "accidental 
occurrence" that would include misrepresentations volitionally 
made with the particular intent to induce.  The CGL policy 
unambiguously 
limits 
coverage 
to 
accidental 
occurrences.  
Therefore, we cannot reasonably view the misrepresentations in 
this case as occurrences within the meaning of the CGL policy. 
B 
¶46 Having concluded that WSGI's misrepresentations are 
not the type of occurrence covered by the CGL policy, we must 
nevertheless address three issues raised by American Family's 
remaining arguments:  (1) whether the policy also fails to 
include coverage because the damages in this case were economic, 
not property, damages; (2) whether, even if coverage generally 
existed, the "your product" business risk exclusion in the 
policy would apply; and (3) if not, whether the "your work" 
business risk exclusion would apply.   
¶47 The reason we do so is because the Stuarts raise an 
argument in this appeal that broadens the scope of the issues 
beyond just the misrepresentation claim.  The Stuarts argue that 
                                                 
17 Our holding today does not, however, resolve the question 
of whether an "occurrence" in a future case could involve an 
accidental misrepresentation, in which a person may have 
misspoken. 
No. 
2005AP1287   
 
27 
 
even if Wis. Admin. Code § ATCP 110 violations do not constitute 
an "occurrence," the rule of concurrent risks could still compel 
coverage due to the negligence claims in this case, citing 
Lawver, 71 Wis. 2d 408, and Varda v. Acuity, 2005 WI App 167, 
284 Wis. 2d 552, 702 N.W.2d 65.  
¶48 In Lawver, this court ruled that an insurance company 
"should not be excused from its obligation to defend the action 
or pay benefits until it has been determined that the injuries 
did not result, even in part, from a risk for which it provided 
coverage and collected a premium."  Lawver, 71 Wis. 2d at 422.  
In Varda, the court of appeals similarly described the rule of 
concurrent risks in the following manner: 
When an insurance policy expressly insures against 
loss caused by one risk, but excludes loss caused by 
another risk, coverage is extended to a loss caused by 
the insured risk even though the excluded risk is a 
contributory cause.  An independent concurrent cause 
must provide the basis for a claim in and of itself, 
and must not require the occurrence of the excluded 
risk to make it actionable. 
Varda, 284 Wis. 2d 552, ¶24 (citations omitted). 
¶49 Applying these precedents, the Stuarts argue that in 
the present case, the jury determined that the Stuarts' loss was 
caused 
by 
multiple 
concurrent 
risks 
involving 
not 
just 
Wis. Admin. Code § ATCP 110 misrepresentations, but also 
No. 
2005AP1287   
 
28 
 
negligence.18  As a result, the Stuarts argue, the damages in 
this case are still covered, despite the lack of coverage for 
misrepresentations, because the damages also arose out of the 
defendants' negligent actions.   
¶50 We also acknowledge that during oral arguments, WSGI's 
attorney asked us to consider two different things which might 
be considered "occurrences" within the meaning of the policy:  
the misrepresentations, and the physical damage (the "rot and 
mold") to the Stuarts' house.  American Family also appeared to 
concede during oral arguments there could be residual insurance 
coverage issues arising from the negligence claims even if we 
resolved that there was no coverage for misrepresentations.  
¶51 Therefore, although we concluded in Stuart I that 
neither the evidence in the record nor legal authority supports 
separating the statutory and negligence claims for purposes of 
damage apportionment, see Stuart I, ___ Wis. 2d ___, ¶¶25-31, 
there may be justification for treating the two types of claims 
separately in this appeal for the limited purpose of addressing 
                                                 
18 Only the Stuarts, not American Family, mention negligence 
in reference to insurance coverage.  In contrast, American 
Family's arguments are focused on the damages flowing from the 
statutory misrepresentations in this case, and do not address 
separately the issue of whether coverage would apply to 
negligence as well.  It appears from their briefs that American 
Family declined to address the applicability of the policy's 
main property damage coverage clause to damages arising out of 
negligent acts because they assumed that the Stuarts' negligence 
claims 
would 
otherwise 
be 
barred 
under 
the 
statute 
of 
limitations or economic loss doctrine.  As we explained in 
Stuart I, however, that assumption is not true.  Stuart I, ___ 
Wis. 2d ___, ¶¶15-19, 32-37. 
No. 
2005AP1287   
 
29 
 
the remaining insurance coverage issues.  Because the occurrence 
in this case could be described either solely in terms of 
misrepresentations, 
or 
more 
broadly, 
to 
include 
WSGI's 
negligence in the relevant chain of events, we assume that the 
rule of concurrent risks might enable coverage due to the 
existence of negligence, notwithstanding the fact that the 
misrepresentations 
viewed 
in 
isolation 
were 
not 
covered.  
Because the rule of concurrent risks and the continuing presence 
of negligence in this case may re-open the door of potential 
coverage, we assume that coverage could exist, or be excluded, 
on other grounds.   
1 
¶52 We first address American Family's argument that the 
damages in this case are economic damages, not property damage, 
and therefore do not trigger coverage under the CGL policy.  We 
agree with the Stuarts that the damages in this case clearly 
correspond with the approximately $95,000 awarded by the jury, 
which in turn corresponded with the cost to remedy the property 
damage to their home.  
¶53 In support, American Family cites several cases, 
including Smith v. Katz, 226 Wis. 2d 798, 816-17, 595 N.W.2d 345 
(1999); Benjamin v. Dohm, 189 Wis. 2d 352, 360-61, 525 N.W.2d 
371 (Ct. App. 1994); and Qualman v. Bruckmoser, 163 Wis. 2d 361, 
366, 471 N.W.2d 282 (Ct. App. 1991), but American Family fails 
to explain the applicability of these cases, which involve 
"difference in value" damages as awarded to remedy failure to 
disclose preexisting defects in property sales.  Id.  In this 
No. 
2005AP1287   
 
30 
 
case, in contrast, the Stuarts were awarded compensation for the 
damage to their property that came after, and was caused by, the 
defendants' 
statutory 
misrepresentation 
and 
common 
law 
negligence.  Unlike this case, the plaintiffs in the cases cited 
by American Family did not allege any property damage caused by 
the defendants.  See Katz, 226 Wis. 2d at 817; Benjamin, 189 
Wis. 2d at 361-62; Qualman, 163 Wis. 2d at 366.   
¶54 Furthermore, contrary to American Family's apparent 
interpretation of Katz as labeling all misrepresentation-related 
damages as economic damages, not property damages, we explicitly 
stated in Katz that we were not making such a sweeping 
conclusion:   
We are not saying that strict responsibility 
misrepresentations or negligent misrepresentations can 
never cause "property damage" as defined in the 
policies, particularly when "property damage" can 
include "loss of use of tangible property that is not 
physically injured."  But we recognize that the 
majority view in the cases is that misrepresentations 
and omissions do not produce "property damage" as 
defined in insurance policies.  They produce economic 
damage. 
Given this well established law, a complaint 
claiming strict responsibility misrepresentation or 
negligent 
misrepresentation 
must 
contain 
some 
statement about physical injury to tangible property, 
some reference to loss of use, or some demand for 
relief beyond money damages if the complaint is to 
satisfy the requirement that "property damage" be 
alleged within the four corners of the complaint. 
Katz, 226 Wis. 2d 798, 816-17 (citations omitted).  In this 
case, the Stuarts' complaints clearly alleged property damage 
No. 
2005AP1287   
 
31 
 
arising out of WSGI's misrepresentations and negligence, which 
falls within the parameters of Katz. 
¶55 Because we reject American Family's argument that the 
damages in this case were economic damages, rather than property 
damages, we will address the potential application of the 
business risk exclusions invoked by American Family.  If either 
applies, American Family would be exempt from covering the 
damages arising out of the negligence claims of the Stuarts.  
For the below reasons, we conclude that the "your work" 
exclusion, but not the "your product" exclusion, applies to bar 
coverage. 
2 
¶56  We next address American Family's argument that the 
"your product" business risk exclusion in WSGI's CGL policy bars 
coverage.  The "your product" exception in the policy provides 
that the policy does not apply to "'property damage' to 'your 
product arising out of it or any part of it.'"  The policy 
defines "your product" as "[a]ny goods or product, other than 
real property, manufactured, sold, handled, distributed, or 
disposed of by:  (1) You; (2) Others trading under your name; or 
(3) A person or organization whose business or assets you have 
acquired . . ." (emphasis added).   
¶57 The Stuarts argue that the CGL policy's "your product" 
exclusion does not apply here.  Specifically, they argue that 
the plain text of the policy's "your product" definition 
explicitly omits services and real estate, thus allowing 
coverage in this case.  The Stuarts explain that the addition to 
No. 
2005AP1287   
 
32 
 
their house is real property, rendering the "your product" 
exclusion inapplicable by its terms.  We agree. 
¶58 A plain language interpretation of the "real property" 
exception to the "your product" exclusion results in no other 
reasonable conclusion than that the Stuarts' home addition is 
"real property."  Black's Law Dictionary defines "real property" 
as "[l]and and anything growing on, attached to, or erected on 
it, excluding anything that may be severed without injury to the 
land." 
 
Black's 
Law 
Dictionary 
1254 
(8th 
ed. 
2004).  
Wisconsin Stat. § 990.01 defines real property synonymously with 
real estate, providing:  "Real estate or real property.  'Real 
estate' or 'real property' includes lands, tenements and 
hereditaments and all rights thereto and interests therein."  
Wis. Stat. § 990.01(35).19  The Stuarts' home addition clearly 
falls within these definitions, and therefore qualifies as "real 
property," not subject to the "your product" exclusion.  
¶59 American Family argues that the court of appeals' 
rejection of the "your product" exclusion is contrary to other 
decisions in which, American Family claims, Wisconsin courts 
have held that remodeling or home construction projects fall 
within a CGL policy's "your product" exception.  However, the 
cases American Family cites are inapposite; only one of them 
                                                 
19 See also Pulsfus Poultry Farms, Inc. v. Town of Leeds, 
149 Wis. 2d 797, 810, 440 N.W.2d 329 (1989)(In the context of 
tax exemptions, "[t]he statutes have defined real property as 
'the land itself and all buildings and improvements thereon 
together 
with 
all 
fixtures 
and 
rights 
and 
privileges 
appertaining thereto.'")(citation omitted).   
No. 
2005AP1287   
 
33 
 
described a CGL policy with a "your product" exception matching 
the one in the present case, i.e., having a "real property" 
exception, and in that case, Nu-Pak, Inc. v. Wine Specialties 
International, Ltd., 2002 WI App 92, 253 Wis. 2d 825, 643 N.W.2d 
848, the real property exception was not at issue.  American 
Family therefore fails to meet its burden of establishing the 
applicability of the "your product" exclusion in the face of the 
obviously 
applicable 
"real 
property" 
exception 
to 
that 
exclusion. 
3 
¶60 Finally, we address American Family's argument that 
the damages in this case "are not covered by a CGL policy which 
excludes coverage for 'your work' and which defines 'your work' 
to include representations about the quality of the work."  In 
particular, American Family argues that the following exclusion 
applies, denying insurance coverage for  
l.  Damage to Your Work 
"Property damage" to "your work" arising out of it or 
any part of it and included in the "products-completed 
operations hazard."  
This exclusion does not apply if the damaged work or 
the work out of which the damage arises was performed 
on your behalf by a subcontractor.  
¶61 We agree that this exclusion is applicable, but 
observe that American Family failed to complete its argument 
explaining why it is applicable.  In order to see how the 
exclusion American Family cites applies to damage arising out of 
No. 
2005AP1287   
 
34 
 
WSGI's negligence, it is necessary to look at the policy's 
definition of "products-completed operations hazard": 
"Products-completed operations hazard" includes all 
"bodily injury" and "property damage" occurring away 
from premises you own or rent and arising out of "your 
product" or "your work" except: 
(1) 
Products 
that 
are 
still 
in 
your 
physical 
possession; or 
(2) 
Work 
that 
has 
not 
yet 
been 
completed 
or 
abandoned.   
 
¶62 It is clear from the terms of the main exclusion (l) 
clause, read together with this definition, that this "your 
work" exclusion applies to this case, in which property damage 
arose out of WSGI's negligence and misrepresentations, the 
damage did not occur on WSGI's own property, and the work was 
completed at the time the damages arose.   
¶63 The words of the policy are not ambiguous:  the CGL's 
"products-completed operations hazard" "your work" exclusion 
applies to property damage arising out of "your work," where 
that work occurs away from the premises owned or rented by the 
person doing the work, and where the work was completed at the 
time of the damage.  "Your work" is defined as including "work 
or operations performed by you or on your behalf."  Such a 
description is clearly applicable to WSGI's negligent design and 
construction of the home remodeling project, which caused 
property damage, did not occur on WSGI's own property, and was 
completed at the time the damages arose.  
No. 
2005AP1287   
 
35 
 
¶64 As to the subcontractor exception, the Stuarts do not 
contend 
that 
the 
subcontractors 
committed 
the 
"misrepresentations" at all, which are the focus of American 
Family's "your work" exclusion argument, and from which, as we 
explained in Stuart I, the negligent work flowed in this case.  
We agree with the court of appeals that this issue is 
nongermane, as no subcontractors were involved with the initial 
design other than to implement the design by doing the 
construction.  See Stuart, 296 Wis. 2d 249, ¶21 n. 5.   
¶65 Furthermore, 
as 
this 
court 
previously 
noted 
in 
American Girl, cases in Wisconsin and other jurisdictions have 
consistently recognized that under this provision of the policy, 
the "your work" exclusion does not apply to "damage caused to 
construction projects by subcontractor negligence."  Id., 268 
Wis. 2d 16, ¶69 (emphasis added).  See also Kalchthaler v. 
Keller Const. Co., 224 Wis. 2d 387, 391, 591 N.W.2d 169 (Ct. 
App. 1999)("The only reasonable reading of this exception is 
that it restores coverage to completed work caused by the work 
of a subcontractor.").  In this action, the subcontractors 
performed at the direction and under the supervision of WSGI.  
Absent a showing of independent subcontractor negligence, the 
subcontractor exception to the "your work" exclusion is simply 
not applicable here.   
¶66 For the above reasons, we conclude that even if 
coverage might otherwise apply to the negligence claims in this 
case, the "your work" business risk exclusion cited by American 
No. 
2005AP1287   
 
36 
 
Family would preclude coverage, and the subcontractor exception 
to that exclusion would not reinstate coverage. 
IV 
¶67 Because the property damage suffered by the Stuarts 
arose out of the volitional misrepresentations of WSGI, and 
because the CGL policy issued by American Family contains a 
business risk exclusion applicable to this case, we conclude 
that the policy does not cover the damages award to the Stuarts 
in this action.  Consequently, we reverse the court of appeals' 
ruling that coverage applies under the policy, and remand this 
matter for further proceedings consistent with this opinion and 
with Stuart I. 
By the Court.—The decision of the court of appeals is 
reversed, and the cause is remanded to the circuit court for 
further proceedings consistent with this opinion and with Stuart 
I. 
 
No.  2005AP1287.awb 
 
1 
 
¶68 ANN WALSH BRADLEY, J.   (concurring).  I agree with 
the majority that the misrepresentations in this case were not 
occurrences within the meaning of the American Family CGL 
policy. Majority op., ¶4. Accordingly, I agree that the policy 
here does not provide coverage. Id.  Likewise, I  agree that the 
property damage falls under the "your work" exclusion of the 
policy. Id., ¶64. I also agree with the majority that the 
holding today does not address the question of whether an 
"occurrence" could involve an accidental misrepresentation in a 
future case. Id., ¶46 n. 17. I therefore join the majority 
opinion. 
¶69 I write separately, however, to address the discussion 
in section III A of the majority opinion and to respond to the 
concurrence of Justice Roggensack.  
¶70 The majority concludes in its discussion in section 
III 
A 
that 
"misrepresentations 
volitionally 
made" 
cannot 
constitute an occurrence within the meaning of a CGL policy. 
Id., ¶45. To the extent that the discussion in III A stands for 
the 
proposition 
that 
a 
volitional 
misrepresentation 
is 
synonymous with an intentional misrepresentation, and that 
damages 
resulting 
from 
volitional 
(i.e., 
intentional) 
misrepresentations are not covered by the CGL policy here, I am 
in complete accord.  
¶71 To the extent that the discussion set forth in ¶¶39-44 
of section III A suggests otherwise, I would not join that part 
of the discussion.  I believe that "accident" should be 
construed as understood by the reasonable insured and, following 
No.  2005AP1287.awb 
 
2 
 
the majority of jurisdictions, the determination should be based 
on 
whether 
the 
injury 
or 
damages 
are 
unexpected 
and 
unintentional.1 
¶72 I turn next to address the interpretation of accident 
in Justice Roggensack's concurrence. The concurrence argues that 
the majority misreads Everson v. Lorenz, 2005 WI 51, 280 
Wis. 2d 1, 
695 
N.W.2d 298. 
It 
attacks 
the 
majority's 
interpretation of the conclusion in Everson: "[I]n interpreting 
Everson, the majority asserts that we concluded that a false 
assertion requires a degree of volition inconsistent with the 
term accident." Justice Roggensack's concurrence, ¶99 (internal 
quotes and cites omitted).  
¶73 The 
concurrence 
advances 
that 
the 
majority 
misapprehends what was intended by Everson.  Id.  It takes the 
majority to task for concluding that "under Everson it is only 
the false assertion that must be volitional." Id.  
                                                 
1 This 
court's 
longstanding 
doctrine 
in 
interpreting 
insurance policies is that language in an insurance policy 
should be construed as understood by a reasonable person in the 
position of the insured. Frost v. Whitbeck, 2002 WI 129, ¶20, 
257 Wis. 2d 80, 654 N.W.2d 225. A reasonable insured would 
understand "accident" to include injury or damages caused by 
negligent actions, even where some action down the line was 
intended.  
The relevant event or incident should be the injury or 
damages. The approach focusing on injury or damages rather than 
whether there is some intentional act involved somewhere down 
the line is the approach in the majority of jurisdictions. See 
J.P. Luddington, Liability Insurance: "Accident" or "Accidental" 
as Including Loss Resulting From Ordinary Negligence of Insured 
or His Agent, 7 A.L.R.3d 1262 (1966)(updated 2008);  2 Allan D. 
Windt, Insurance Claims and Disputes, § 11.3 (5th ed. 2007). It 
has also been this court's longstanding approach.  
No.  2005AP1287.awb 
 
3 
 
¶74 I submit that it is the majority that correctly 
interprets 
Everson 
and 
that 
it 
is 
the 
concurrence 
that 
misapprehends Everson's intent. The concurrence appears to 
interpret Everson as determining that any time there is a 
volitional act involved in causing damages——including the mere 
act of speaking——no accident has occurred.2 Id. 
¶75 By implying that accidents involve only circumstances 
in which there are no volitional acts of any sort,  the 
concurrence appears to not only misinterpret Everson, but also 
contradicts 
our 
prior 
cases. 
In 
Doyle 
v. 
Engelke, 
219 
Wis. 2d 277, 580 N.W.2d 245 (1998), the plaintiff alleged that 
the insured had negligently supervised two of its employees. She 
argued that the employees had intentionally filed a false 
security agreement that encumbered Doyle's assets and served a 
false subpoena at her residence, causing emotional injury to 
Doyle. Id. at 282.  
¶76 The employer carried an insurance policy that covered 
an "event," and which defined "event" as the CGL policy in this 
                                                 
2 In 
the 
context 
of 
negligent 
misrepresentation, 
the 
presence of a volitional act by itself does not preclude an 
action from being an accident. See H. Brent Brennenstuhl, 
Negligent 
Misrepresentation 
as 
"Accident" 
or 
"Occurrence" 
Warranting Insurance Coverage, 58 A.L.R.5th 483 (1998). Courts 
have generally determined whether negligent misrepresentation 
may be an accident for the purposes of insurance coverage based 
upon whether the insured intended to make a misrepresentation, 
Id., § 3[a], whether the insured intended to cause injury, Id., 
§ 3[b], or whether the injury was foreseeable, Id., §§ 3[c] and 
4[c]. Those jurisdictions considering intent to induce reliance 
as precluding negligent misrepresentation from being an accident 
have generally done so on the basis that misrepresentation 
claims are akin to fraud. Id., §§ 4[a] and 4[b]. 
No.  2005AP1287.awb 
 
4 
 
case defines "occurrence," that is, as an accident. Id. at 289. 
We determined that there was coverage because a reasonable 
insured would expect negligent acts, including the negligent 
supervision of 
employees' intentional acts, to constitute 
accidents. Accordingly, we concluded the policy covered the 
allegations in the case as an accident, and therefore as an 
event. Id. at 290.  
¶77 The concurrence's analysis would appear to preclude 
coverage in Doyle. We were explicit that the employees' acts 
were intentional. Nonetheless, it was an accident covered under 
the policy because the harm to Doyle was "an unexpected, 
undesirable event or an unforeseen incident . . . characterized 
by a lack of intention." Id. at 289 (internal quotations and 
citations omitted). 
¶78 The concurrence's view would also appear to conflict 
with Westfield Ins. Co. v. J.C. Penney Corp., Inc., in which a 
federal court interpreted Wisconsin law in addressing whether 
there was an accident for the purpose of insurance coverage. 458 
F. Supp. 2d 
953 
(W.D. 
Wis., 
2006). 
Westfield 
involved 
allegations that the negligent design and manufacture of a lamp 
and lamp cord were substantial factors in causing a fire. Id. at 
956-57. Although the Western District of Wisconsin determined 
that there was an accident for the purposes of insurance 
coverage, it would seem that designing and manufacturing 
products are volitional acts, and were a cause of the damage. 
Would the concurrence's view preclude coverage in that case?  
No.  2005AP1287.awb 
 
5 
 
¶79 Similarly, the test set forth for determining whether 
there is an accident may conflict with Kalchthaler v. Keller 
Const. Co., 224 Wis. 2d 387, 591 N.W.2d 169 (Ct. App. 1999). 
That case involved damage to a building caused by negligent 
construction. Id. at 392 n.2. The court of appeals determined 
that the damage was an accident for the purposes of insurance 
coverage. Id. at 397. Was the cause of the damage intentional 
insofar 
as 
the 
construction 
was 
intended? 
Does 
the 
interpretation of accident in the concurrence suggest that the 
Kalchthaler court erred? 
¶80 I agree with the majority's conclusion that there is 
no accident here. As I see it, this is not a case of negligence. 
Rather, it is a case in which the misrepresentation was 
intended.  
¶81 Accordingly, I respectfully concur.  
¶82 I am authorized to state that Chief Justice SHIRLEY S. 
ABRAHAMSON joins this concurrence.  
 
No.  2005AP1287.pdr 
 
1 
 
¶83 PATIENCE DRAKE ROGGENSACK, J. (concurring).   I join 
only the majority opinion's conclusion that American Family 
Mutual Insurance Company's (American Family) policy does not 
provide coverage for the misrepresentations1 and the negligent 
                                                 
1 As I explained in my concurrence/dissent in Stuart v. 
Weisflog's Showroom Gallery, Inc., 2008 WI 22, ___ Wis. 2d ___, 
746 N.W.2d 762 (Stuart I), the findings of the jury are not 
sufficient to sustain an actionable claim for misrepresentation 
because the jury found only promises of future performance, not 
representations of facts then in existence.  Id., ¶¶69-73 
(Roggensack, J., concurring in part and dissenting in part); see 
also Consol. Papers, Inc. v. Dorr-Oliver, Inc., 153 Wis. 2d 589, 
594, 451 N.W.2d 456 (Ct. App. 1989) (concluding that Dorr-
Oliver's representation that the clarifier it promised to 
construct would meet the specific operating requirements of 
Consolidated Papers was not actionable as a misrepresentation, 
even though the clarifier that was built did not comply with 
Consolidated 
Papers' 
specific 
operating 
requirements).  
Representations that are promises of future performance are not 
actionable as misrepresentations, unless the person promising 
future performance had no intention of carrying out that promise 
at the time he made the promise.  Consol. Papers, 153 Wis. 2d at 
594.   
Because the majority opinion in Stuart I chose not to 
address the issue of whether a promise of future performance is 
actionable as a misrepresentation and simply assumed that it was 
actionable, that issue is not before the court in regard to the 
coverage questions relating to the American Family CGL policy 
for the same conduct as Stuart I addressed.  Therefore, I do not 
address it further in this opinion, except to note that the 
Stuarts' own argument in regard to coverage at once refutes 
their claim for misrepresentation and supports my view of the 
law.   
This is so because the Stuarts argue in this review that 
"Weisflog's Showroom's representations became false after poor 
design and construction."  The majority opinion recognizes that 
the Stuarts have changed their tune in this review, and it 
refuses to permit them to do so by stating the majority 
opinion's view of what "the record shows."  Majority op., ¶42.  
A representation, of course, cannot ripen into an actionable 
misrepresentation at a later date, if promises are not kept.  
See Consol. Papers, 153 Wis. 2d at 594. 
No.  2005AP1287.pdr 
 
2 
 
construction that the jury found.  I write separately because:  
(1) the majority opinion appears to misread Everson v. Lorenz, 
2005 WI 51, 280 Wis. 2d 1, 695 N.W.2d 298; (2) the majority 
opinion employs disputed facts that the jury did not find in 
order to support its reasoning; and (3) the claim for coverage 
due to Weisflog's Showroom Gallery, Inc.'s (Weisflog's Showroom) 
negligent construction of the addition to Robert Stuart and Lynn 
Farquhar-Stuart's (the Stuarts) residence is barred by the 
economic loss doctrine.  Accordingly, although I respectfully 
concur, I join none of the majority opinion except its ultimate 
conclusion that the American Family policy provides no coverage 
for the claims on which the Stuarts prevailed before the jury. 
I.  BACKGROUND 
¶84 This lawsuit arises from the design and construction 
of an addition to the home of the Stuarts.  It is the second 
decision of this court relative to the construction of the 
Stuarts' addition, the first being Stuart v. Weisflog's Showroom 
Gallery, Inc., 2008 WI 22, ___ Wis. 2d ___, 746 N.W.2d 762 
(Stuart I), to which I filed a separate opinion, concurring in 
part and dissenting in part.   
¶85 The Stuarts wanted to enlarge their home.  To this 
end, they entered into a written contract entitled, "Remodeling 
Architectural Contract" wherein plans were drawn by Weisflog's 
                                                                                                                                                             
Failure to keep a promise of future performance is 
actionable as a breach of contract.  Eli Envtl. Contractors, 
Inc. v. 435 Partners, LLC, 2007 WI App 119, ¶6, 300 Wis. 2d 712, 
731 N.W.2d 354.  Accordingly, I continue to stand by my separate 
opinion in Stuart I as a correct statement of the law of 
actionable misrepresentation.    
No.  2005AP1287.pdr 
 
3 
 
Showroom for an addition that would double the size of their 
home and provide an in-ground swimming pool with surrounding 
deck.  The total cost of the plans produced for the Stuarts 
under the Remodeling Architectural Contract was $1,500. 
¶86 Five 
months 
after 
entering 
into 
the 
Remodeling 
Architectural Contract, the Stuarts entered into a second 
contract 
with 
Weisflog's 
Showroom2 
entitled, 
"Remodeling 
Contract," in the amount of $278,076.96, to construct their home 
improvements.   
¶87 Approximately four years after the construction was 
completed, the Stuarts commenced this action alleging negligence 
in the design and construction of their home addition and breach 
of contract.  They later amended the complaint to allege that 
they were damaged because of Home Improvement Protection Act 
(HIPA) violations under Wis. Stat. § 100.20(5) and Wis. Admin. 
Code § ATCP 110.02(11), based on alleged misrepresentations that 
induced them to enter into the two contracts.  However, before 
trial, the Stuarts dismissed their breach of contract claims and 
proceeded 
on 
claimed 
HIPA 
violations, 
based 
on 
alleged 
                                                 
2 In answering Special Verdict Question No. 9, the jury 
found that the Remodeling Contract was a contract between the 
Stuarts and Weisflog's Showroom. 
No.  2005AP1287.pdr 
 
4 
 
misrepresentations with regard to both contracts,3 and on claims 
of common law negligence in the design and construction of the 
addition. 
¶88 The jury was the fact finder for the Stuarts' claims.  
It found false, deceptive or misleading representations4 were 
                                                 
3 Although it has no effect on the coverage question 
presented by the case at hand, I note that the Remodeling 
Architectural Contract, under which the plans for the addition 
were drawn, may not be a "home improvement contract" as that 
term is defined in HIPA.  Wis. Admin. Code § ATCP 110.01(4) 
(Oct. 2004) defines a "home improvement contract" as an 
agreement "to perform labor or render services for home 
improvements, or furnish materials in connection therewith."  
Section ATCP 110.01(2) defines "home improvement" as "the 
remodeling, altering, repairing, painting, or modernizing of 
residential or non-commercial property, or the making of 
additions 
thereto 
. . ." 
 
Nothing 
in 
the 
Architectural 
Remodeling Contract provides that Weisflog's Showroom will 
construct the addition to the Stuarts' home.  Robert Stuart 
testified that he believed he owned the plans produced under 
that contract and could take them to any builder he chose.  The 
contract wherein Weisflog's Showroom agreed to perform "home 
improvements" is the Remodeling Contract.   
4 Special Verdict Questions 1 and 13 addressed the Stuarts' 
misrepresentation claims.  They provided: 
1. 
Did Weisflog's Showroom Gallery, Inc., make any 
false, deceptive, or misleading representations 
in order to induce the Plaintiffs, Robert & Lin 
Stuart to enter into a remodeling architecture 
contract, or to obtain or keep any payment under 
the remodeling architecture contract? 
ANSWER:  Yes. 
13. Did the remodeling contractor or its agents make 
false, deceptive or misleading representations 
that 
remodeling 
work 
will 
comply 
with 
the 
building codes in order to induce the Plaintiffs 
Robert and Lin Stuart to enter the remodeling 
contract? 
ANSWER:  Yes. 
No.  2005AP1287.pdr 
 
5 
 
made to induce the Stuarts to enter into both contracts.  The 
jury found common law negligence in regard to the design and 
construction of the addition.  Because the jury was the fact 
finder, the Special Verdict answers are critical to a correct 
application of the relevant law.  In this case, we are asked to 
interpret the Commercial General Liability (CGL) policy that 
American Family provided to Weisflog's Showroom to decide 
whether coverage exists thereunder, in light of the findings of 
the jury.   
II.  DISCUSSION 
A. 
Standard of Review  
¶89 Resolution of the issues that I will address are 
questions of law, wherein we provide independent review, "but 
benefiting from the analyses of the court of appeals and the 
circuit court."  Marder v. Bd. of Regents of the Univ. of Wis. 
Sys., 2005 WI 159, ¶19, 286 Wis. 2d 252, 706 N.W.2d 110.  The 
interpretation of an insurance contract is a question of law.  
Katze v. Randolph & Scott Mut. Fire Ins. Co., 116 Wis. 2d 206, 
212, 341 N.W.2d 689 (1984).  Whether the economic loss doctrine 
applies either to a particular type of claim or to a particular 
fact set presents a question of law.  See Kaloti Enters., Inc. 
v. Kellogg Sales Co., 2005 WI 111, ¶10, 283 Wis. 2d 555, 699 
N.W.2d 205; Kailin v. Armstrong, 2002 WI App 70, ¶43, 252 
Wis. 2d 676, 643 N.W.2d 132.   
No.  2005AP1287.pdr 
 
6 
 
B. 
Insurance Coverage 
 
1. 
The misrepresentation verdicts' effect on coverage 
¶90 The Stuarts contend that they suffered property damage 
due to Weisflog's Showroom's representations that caused them to 
enter into the Remodeling Architectural Contract and the 
Remodeling Contract.  The parties do not dispute that it is 
necessary to show that the property damage was caused by an 
"occurrence," in order to come within the American Family CGL 
policy.  "Occurrence" is defined in the policy.  Accordingly, we 
must determine whether the representations that the jury found 
were false, deceptive or misleading are "occurrences" under the 
policy.   
¶91 We interpret the language of an insurance policy as "a 
reasonable person in the position of the insured would have 
understood the words."  Kremers-Urban Co. v. Am. Employers Ins. 
Co., 119 Wis. 2d 722, 735, 351 N.W.2d 156 (1984).  In regard to 
property damage, the policy provides: 
COVERAGE A.  BODILY INJURY AND PROPERTY DAMAGE 
LIABILITY 
1. 
Insuring Agreement. 
. . . . 
b. 
This insurance applies to "bodily injury" 
and "property damage" only if:   
(1) the "bodily injury" or "property damage" is 
caused by an "occurrence" that takes place in the 
"coverage territory"; and  
(2) the "bodily injury" or "property damage" 
occurs during the policy period. 
No.  2005AP1287.pdr 
 
7 
 
"Occurrence" is defined in the policy as "an accident, including 
continuous or repeated exposure to substantially the same 
general harmful conditions."  Therefore, the policy requires 
that the property damage be caused by an accident in order for 
damages to be covered by the policy.  It follows that, in order 
for 
the 
property 
damage 
the 
Stuarts 
claim 
the 
HIPA-
misrepresentations caused to fall within the policy, the 
defendants' statements must be accidents.   
¶92 We have reviewed insurance policies' definitions of 
"accident" in a number of cases.  We recently considered the 
meaning of "accident" in a case involving an insurance policy 
that defined that term identically to how it is defined in the 
American Family CGL policy.  We did so in the context of a 
coverage claim for property damage that was allegedly caused by 
a misrepresentation.  Everson, 280 Wis. 2d 1, ¶¶15-16. 
¶93 Everson sued Lorenz based on theories of intentional, 
negligent and strict liability for misrepresentation due to a 
typographical error in a real estate condition report that 
Lorenz, the seller of the real estate, gave to Everson, the 
buyer.  Id., ¶¶4-5.  The condition report disclosed that 
portions of 16 of the lots that Lorenz was selling came within 
the 100-year floodplain.  Id.  However, it failed to list the 
lot that Everson purchased, even though portions of it also came 
within the 100-year floodplain.  Id., ¶5.  When Everson 
discovered that a portion of his lot lay within the 100-year 
floodplain, he sued Lorenz, claiming that he could not build his 
No.  2005AP1287.pdr 
 
8 
 
home 
in 
the 
location 
that 
he 
desired 
due 
to 
Lorenz's 
misrepresentation.  Id.   
¶94 Lorenz tendered the defense of Everson's suit for 
property damage to his CGL insurer.  Id., ¶6.  We opined that 
coverage for property damage under Lorenz's CGL policy was 
dependent on whether the property damage was caused by an 
"occurrence." 
 
Id., 
¶15. 
 
Lorenz's 
CGL 
policy 
defined 
"occurrence" as an "accident, including continuous or repeated 
exposure to substantially the same general harmful conditions."  
Id.   
¶95 Lorenz argued that a typographical error caused the 
omission of the lot Everson purchased from the list of 16 lots 
shown on the condition report as lying partially in the 100-year 
floodplain.  Therefore, Lorenz argued the failure to disclose 
the true condition of the lot he sold to Everson was an 
"accident."  Id., ¶16.   
¶96 We disagreed.  We explained that while the condition 
report may have accidentally misrepresented the condition of the 
lot, the giving of the condition report to Everson was a 
"volitional act."  Id., ¶¶19-21.  We held that volitional acts 
are not accidents.  Id., ¶22.  As we explained, "What happened 
here, stripped to its essentials, is that an 'action,' not an 
'accident,' of Lorenz gave Everson the misleading information.  
. . .  [T]he decision to give Everson the report is not an 
'accident' within the meaning of the policy."  Id. (citations 
omitted).  
No.  2005AP1287.pdr 
 
9 
 
¶97 Everson is on all fours with the case before us.  
First, the policy definition of "accident" is the same in 
Everson as it is in the American Family CGL policy under review 
here.  Second, the context here is similar to that in Everson, 
i.e., 
the 
Stuarts 
claim 
property 
damage 
caused 
by 
representations that the defendants made.  Third, the defendants 
chose to promise the Stuarts that Weisflog's Showroom will 
design plans and construct an addition to the Stuarts' home that 
will comply with the building codes.  The defendants' statements 
were part of the sales pitch to do business with the Stuarts, 
just as Lorenz's giving of the real estate condition report to 
Everson was part of Lorenz's sales pitch.  Therefore, I conclude 
that the defendants' statements are volitional acts and not 
accidents within the meaning of the American Family CGL policy.  
Since the defendants' statements are not accidents, they cannot 
be occurrences under the CGL policy.  Accordingly, I conclude 
that there is no coverage under the American Family CGL policy 
for the misrepresentations that the jury found.  
¶98 The majority opinion employs a somewhat different 
interpretation of Everson.  It relates:  
With the jury having found the presence of such 
volition 
and 
intent, 
in 
accordance 
with 
the 
requirements 
of 
the 
code, 
the 
only 
reasonable 
conclusion 
regarding 
WSGI's 
[Weisflog's 
Showroom 
Gallery, Inc.] conduct "in order to induce" is that 
such conduct cannot qualify as an accidental, i.e., 
unintentional, occurrence.  . . .   
In support of this conclusion, we turn to Everson 
. . . .5 
                                                 
5 Majority op., ¶¶28-29. 
No.  2005AP1287.pdr 
 
10 
 
¶99 It appears to me that the majority opinion misreads 
Everson and confuses Everson's discussion of "volitional act" by 
adding an intent to deceive to the volitional act.6  Everson did 
not address whether Lorenz knew the information he gave Everson 
was false.  Everson focused on whether Lorenz gave Everson a 
real estate condition report that had a typo on it.  Everson, 
280 Wis. 2d 1, ¶22.  We concluded that when Lorenz gave Everson 
the report, Lorenz's act was volitional because he intended to 
give Everson a copy of the report.  Id.  There is nothing in 
Everson that implies the court concluded Lorenz knew the report 
was inaccurate or intended to deceive Everson.  However, in 
interpreting Everson, the majority asserts that "we concluded 
that 
a 
false 
assertion 
'requires 
a 
degree 
of 
volition 
inconsistent with the term accident.'"7  The majority's reading 
of Everson misapprehends what must be volitional to be deemed 
nonaccidental.  The majority appears to conclude that, under 
Everson, it is only the false assertion that must be volitional.  
The majority is mistaken.  The volitional act in Everson was not 
Lorenz's assertion, but rather, Lorenz's giving to Everson the 
written condition report, regardless of the veracity of the 
report's content.  Id.  
¶100 Furthermore, we are not free on this review to add 
questions and answers to the Special Verdict.  Nor are we free 
                                                 
6 The majority opinion asserts that "Ronald Weisflog knew at 
the time of the misrepresentations that he was not familiar with 
an applicable building code."  Id., ¶31. 
7 Id., ¶32. 
No.  2005AP1287.pdr 
 
11 
 
to support our reasoning in an opinion by inserting facts that 
were disputed, but which the jury did not find.  The majority 
opinion finds facts throughout the opinion.   
¶101 The jury made two specific findings in regard to the 
defendants' representations.  In answering question number 13, 
the jury found representations were made that the addition "will 
comply" with the building codes.  In answering question 4, the 
jury found the defendants did not represent that they were 
licensed architects.  The jury did not find that Ronald Weisflog 
did not understand the Brookfield codes and regulations; yet 
that is the impression the majority opinion gives.   
¶102 For 
example, the majority opinion quotes Robert 
Stuart's statement that Ronald Weisflog told him that he 
"professed a very high standard of quality . . . .  He 
understood Brookfield codes and regulations very well.  . . .  
He could provide architectural service for us."8  The majority 
opinion then says, "Ronald Weisflog knew at the time of the 
misrepresentations that he was not familiar with an applicable 
building code."9  The jury did not find that Ronald Weisflog was 
not familiar with the building codes when he said that he would 
construct the addition in compliance with them.  Ronald Weisflog 
repeatedly asserted that he was familiar with the relevant 
codes.  However, the majority opinion supports some of its 
conclusions by finding facts, which we are not permitted to do 
                                                 
8 Id., ¶41. 
9 Id., ¶31. 
No.  2005AP1287.pdr 
 
12 
 
on this review.  See Wurtz v. Fleischman, 97 Wis. 2d 100, 108, 
293 N.W.2d 155 (1980).10    
¶103 The 
majority 
opinion 
attempts 
to 
put 
aside 
my 
objection in this regard by citing Coney v. Milwaukee & Suburban 
Transport Corp., 8 Wis. 2d 520, 99 N.W.2d 713 (1959) and 
asserting, "we may refer to whatever facts in the record support 
the jury's findings."11  Coney does not apply because Coney is a 
sufficiency of the evidence opinion where the jury's findings 
were challenged.  When a claim is made that the evidence is not 
sufficient to support a jury's verdict, we do consider the 
record to determine whether there is credible evidence to 
support that verdict.  D'Huyvetter v. A.O. Smith Harvestore 
Prods., 164 Wis. 2d 306, 320, 475 N.W.2d 587 (Ct. App. 1991).  
However, the majority opinion is not evaluating the sufficiency 
of the evidence in this case.  It is using portions of the trial 
transcript to support findings it chooses to make, not to 
support findings that the jury made.   
¶104 By contrast with the majority opinion herein, the 
record cites I employed in my dissent in Stuart I relative to 
the jury's apportionment of damages (Stuart I, ___ Wis. 2d ___, 
¶45) were necessary because the majority opinion concluded that 
the evidence was not sufficient to support the jury's verdict on 
damages.  Stuart I, ___ Wis. 2d ___, ¶31.  As many cases have 
                                                 
10 Other portions of the majority opinion make similar 
factual findings.  I have chosen not to detail all of them here, 
except to repeat that we are bound by the jury's findings.  See 
id., ¶¶9 n.10, 41-42.   
11 Id., ¶9 n.10.   
No.  2005AP1287.pdr 
 
13 
 
explained, upon a challenge to the jury's verdict based on the 
sufficiency of the evidence, we must review the record to 
determine if there is credible evidence to support the verdict.  
Coryell v. Conn, 88 Wis. 2d 310, 315, 276 N.W.2d 723 (1979) 
(reviewing whether the record contains credible evidence that 
supports the jury's damages award).  That is what I have done in 
reviewing the evidence of damages in Stuart I.    
2. 
Economic loss doctrine 
¶105 The Stuarts also assert that there is coverage under 
the CGL policy for property damage they sustained due to 
Weisflog's Showroom's negligent construction of the addition to 
their home.12  The majority addresses this contention by 
interpreting other provisions of the CGL policy.13  I address it 
under the economic loss doctrine because I conclude that the 
Stuarts' negligent construction claim is precluded by the 
economic loss doctrine.  Therefore, there are no damages that 
can be awarded for negligent construction and no coverage is 
needed. 
 
a. 
General principles 
¶106 The economic loss doctrine is a common law doctrine 
created by the courts to recognize that contract law and the law 
                                                 
12 This position is inconsistent with the Stuart's position 
before this court in Stuart I where they maintained that all of 
their damages arose out of Weisflog Showroom's representations.  
They apparently took this position because they sought to double 
their damages under HIPA provisions that proscribe false, 
deceptive or misleading representations.  See Stuart I, ___ 
Wis. 2d ___, ¶¶27-28.   
13 Majority op., ¶¶56-66. 
No.  2005AP1287.pdr 
 
14 
 
of warranty are better suited than tort law to deal with purely 
economic loss between two contracting parties.  Kaloti, 283 
Wis. 2d 555, ¶28.  We have defined "economic loss" as "damages 
resulting from inadequate value because the product is inferior 
and does not work for the general purposes for which it was 
manufactured and sold."  Id., ¶29 (quoting Daanen & Janssen, 
Inc. v. Cedarapids, Inc., 216 Wis. 2d 395, 400-01, 573 N.W.2d 
842 (1998)).  Economic damages include damages to the product 
itself and to other components in an integrated system.  Wausau 
Tile, Inc. v. County Concrete Corp., 226 Wis. 2d 235, 249-50, 
593 N.W.2d 445 (1999).  We have applied it to the construction 
of residential real estate, Linden v. Cascade Stone Co., 2005 WI 
113, 283 Wis. 2d 606, 699 N.W.2d 189, and to remodeling 
contracts, 1325 North Van Buren, LLC v. T-3 Group, Ltd., 2006 WI 
94, 293 Wis. 2d 410, 716 N.W.2d 822.  However, contracts for 
services, where a product is merely incidental, do not fall 
within the scope of the economic loss doctrine.  Ins. Co. of N. 
Am. v. Cease Elec., Inc., 2004 WI 139, ¶36, 276 Wis. 2d 361, 688 
N.W.2d 462.  When a contract is mixed, including both services 
and the creation of a product, we must determine the predominant 
purpose of the contract before we may conclude whether the 
economic loss doctrine applies.  Linden, 283 Wis. 2d 606, ¶22.  
¶107 In order to determine whether the economic loss 
doctrine applies to preclude common law claims for negligence 
between contracting parties where both a product and services 
are provided, a court must determine whether the predominant 
purpose of the contract is to provide a product or to provide 
No.  2005AP1287.pdr 
 
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services.  1325 N. Van Buren, 293 Wis. 2d 410, ¶24; Linden, 283 
Wis. 2d 606, ¶¶18-22.  We employ a totality of the circumstances 
test to determine the predominant purpose of a contract.  
Linden, 283 Wis. 2d 606, ¶22.  The totality of circumstances 
includes both subjective and objective factors.  Id.  Those 
factors include, but are not limited to, the primary objective 
the contracting parties entered into the contract to achieve, 
the requirements of the contract, the nature of the business of 
the party doing work under the contract, and the value of the 
materials used.  1325 N. Van Buren, 293 Wis. 2d 410, ¶42. 
¶108 The Stuarts entered into two separate contracts with 
Weisflog's Showroom, and the jury found Weisflog's Showroom was 
negligent in the design and in the construction of the 
addition.14  However, the jury awarded no damages for negligent 
design; it awarded damages only for negligent construction.15  
The parties contracted to construct the addition to the Stuarts' 
home in the Remodeling Contract.    
b. 
The Remodeling Contract 
¶109 The Remodeling Contract indisputably involved:  (1) 
the creation of a product, the addition, and (2) services, the 
construction labor.  Therefore, I review the totality of the 
circumstances to determine the predominant purpose of this 
contract.   
¶110 First, the addition constructed included many facets:  
a new hot tub room; a new, expanded kitchen; a new, expanded 
                                                 
14 See Special Verdict Questions No. 7 and 11. 
15 See Special Verdict Question No. 16B. 
No.  2005AP1287.pdr 
 
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master bedroom suite; a powder room and entry change; an add-on 
to the garage with a mudroom, bath and family room; and an 
outdoor 
in-ground 
swimming 
pool 
and 
surrounding 
deck.  
Accordingly, a product was created.  Second, the Stuarts' 
primary objective in entering into the Remodeling Contract was 
to nearly double the size of their home and significantly 
upgrade its amenities.  The Stuarts sought a product.  Third, 
the "remodeling contractor," Weisflog's Showroom, was in the 
business 
of 
creating 
products: 
 
remodeled 
residential 
properties.  Fourth, the addition's cost to the Stuarts was 
$278,076.96.  This cost included materials and the labor 
necessary to create a 2,000 square foot addition and an in-
ground swimming pool.  The Remodeling Contract stated that the 
"Contract amount is based upon bid sheet."  Any changes in the 
specifications bid upon that raised or lowered the cost of the 
addition 
would 
be 
charged 
or 
credited 
to 
the 
Stuarts.  
Therefore, the parties bargained for the price of a product 
based on the addition's specifications, not on the hours of 
labor it took to complete the addition.   
¶111 I 
conclude 
that 
under 
the 
totality 
of 
the 
circumstances presented, the Stuarts contracted for much more 
than services with materials being merely incidental, in 
contrast with the circumstances in Cease Electric.  The 
Remodeling Contract had as its predominant purpose the creation 
of a product, the Stuarts' home addition.  Accordingly, it falls 
squarely within the economic loss doctrine's proscription that 
the Stuarts may not maintain tort claims for the failure to 
No.  2005AP1287.pdr 
 
17 
 
complete the addition's construction in a workmanlike manner.  
Their claims sound in contract, not in tort.  Linden, 283 
Wis. 2d 606, ¶22.   
¶112 My analysis of the Remodeling Contract for the 
Stuarts' home follows the analysis we employed in 1325 North Van 
Buren.  There, we applied the totality of circumstances test to 
the remodeling of a warehouse and concluded that the parties 
bargained to produce a product:  42 residential condominiums and 
adjacent parking garages.  1325 N. Van Buren, 293 Wis. 2d 410, 
¶46.  My conclusion here is consistent with 1325 North Van Buren 
and 
with 
Linden. 
 
Accordingly, 
in 
compliance 
with 
that 
precedent, I conclude that the predominant purpose of the 
Remodeling Contract is to produce a product:  the 2,000 square 
foot addition and the in-ground swimming pool with surrounding 
deck.  Therefore, I also conclude that the Stuarts' claim for 
negligent construction should be dismissed, and the $71,25016 in 
damages awarded by the jury for that claim should be vacated.  
The economic loss doctrine precludes damages for negligent 
construction; therefore, no insurance coverage for those damages 
is needed.  
                                                 
16 The jury found total damages of $95,000 and that 75% 
($71,250) of those damaged were caused by negligent construction 
of the addition. 
No.  2005AP1287.pdr 
 
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III.  CONCLUSION 
¶113 Although I respectfully concur, I join none of the 
majority opinion except its ultimate conclusion that the 
American Family policy provides no coverage for the claims on 
which the Stuarts prevailed before the jury. 
¶114 I 
am 
authorized 
to 
state 
that 
Justice 
ANNETTE 
KINGSLAND ZIEGLER joins this concurrence. 
 
 
No.  2005AP1287.pdr 
 
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