Title: Fireman's Fund Insurance Company of Wisconsin v. Bradley Corporation

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2003 WI 33 
 
 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
01-2432 
 
 
COMPLETE TITLE: 
 
 
Fireman's Fund Insurance Company of Wisconsin,  
 
Plaintiff-Appellant, 
 
v. 
Bradley Corporation and Kevin B. Kline,  
 
Defendants-Respondents-Petitioners, 
Lawler Manufacturing Corporation, Inc.,  
 
Defendant. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2002 WI App 179 
Reported at:  256 Wis. 2d 643, 649 N.W.2d 685 
(Ct. App. 2002-Published) 
 
 
OPINION FILED: 
May 6, 2003   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
February 11, 2003   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Milwaukee   
 
JUDGE: 
Thomas R. Cooper   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For 
the 
defendants-respondents-petitioners 
there 
were 
briefs by Thomas L. Shriner, Jr., Lisa S. Neubauer, G. Michael 
Halfenger, and Foley & Lardner, Milwaukee, and oral argument by 
Thomas L. Shriner, Jr. 
 
For the plaintiff-appellant there was a brief by William P. 
Croke, Todd M. Rowe, and Quale, Feldbruegge, Calvelli, Thom & 
Croke, S.C. Milwaukee, and oral argument by William P. Croke. 
 
An amicus curiae brief was filed by Heidi L. Vogt and Cooke 
& Franke S.C., Milwaukee, on behalf of the Wisconsin Insurance 
Alliance. 
 
2003 WI 33 
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.01-2432  
(L.C. No. 
00 CV 6844) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Fireman's Fund Insurance Company of  
Wisconsin,  
 
          Plaintiff-Appellant, 
 
     v. 
 
Bradley Corporation and Kevin B. Kline,  
 
          Defendants-Respondents- 
          Petitioners, 
 
Lawler Manufacturing Corporation, Inc.,  
 
          Defendant. 
 
FILED 
 
MAY 6, 2003 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed and 
remanded.   
 
¶1 
SHIRLEY S. ABRAHAMSON, CHIEF JUSTICE.   This is a 
review of a published opinion of the court of appeals, Fireman's 
Fund Insurance Co. v. Bradley Corp., 2002 WI App 179, 256 
Wis. 2d 643, 649 N.W.2d 685.  The circuit court for Milwaukee 
County, Thomas R. Cooper, Judge, granted summary judgment in 
favor of the defendants, Bradley Corporation (Bradley), and its 
employee, Kevin B. Kline, against Fireman's Fund Insurance Co. 
No. 
01-2432   
 
2 
 
(Insurance Company).  The court of appeals reversed the judgment 
of the circuit court. 
¶2 
The Insurance Company initiated a declaratory judgment 
action against the defendants seeking a determination of whether 
the Insurance Company had a duty under its Comprehensive General 
Liability (CGL) insurance policies to defend Bradley in a 
lawsuit brought by Lawler Manufacturing Corporation (Lawler).1 
¶3 
The circuit court denied the Insurance Company's 
motion for summary judgment and granted summary judgment to the 
defendants instead.  The circuit court held that the Insurance 
Company had a duty to defend Bradley in the underlying Lawler 
lawsuit because count II of the Lawler complaint, alleging 
"trade secret misappropriation," constituted an "advertising 
injury" covered by the CGL insurance policies.  In addition, the 
circuit court held that although the notice provided by Bradley 
was untimely, the Insurance Company was not prejudiced by the 
delay and therefore the lack of timely notice did not result in 
the loss of coverage.2 
¶4 
The court of appeals reversed the judgment of the 
circuit court.  The court of appeals held that neither count II 
(alleging 
"trade 
secret 
misappropriation") 
nor 
count 
VII 
                                                 
1 Lawler was originally included as a defendant in this 
action as well but was later dismissed.  
2 The circuit court then entered judgment in favor of the 
defendants dismissing the insurance company's suit and awarding 
Bradley a total of $2,887,594.24 for defense and indemnification 
costs in the underlying suit, as well as costs and disbursements 
in the present action.  
No. 
01-2432   
 
3 
 
(alleging "federal unfair competition") of Lawler's complaint 
triggered the Insurance Company's duty to defend.   
¶5 
The issue presented is whether the Insurance Company 
had a duty to defend Bradley under the advertising injury 
provisions of its CGL insurance policies.  We conclude that it 
had such a duty and therefore reverse the decision of the court 
of appeals. 
¶6 
We hold that the allegations in count VII of the 
Lawler complaint, alleging unfair competition in violation of 
the federal Lanham Act, give rise to the possibility of 
coverage.  Count VII of the Lawler complaint arguably makes a 
claim for trade dress infringement that falls within the 
advertising injury's "infringement of trademark" provision.3  The 
                                                 
3 Bradley's 
CGL 
insurance 
policies, 
unlike 
many 
CGL 
policies, specifically define advertising injury to include 
"infringement of trademark."  Under the standard form CGL 
policy, insureds frequently seek coverage for trademark or trade 
dress infringement and trade secret theft by arguing that these 
offenses constitute either the offense of "misappropriation of 
advertising ideas or style of doing business" or the offense of 
"infringement of copyright, title or slogan."  Indeed, in the 
present case, Bradley asserts that count VII in the Lawler 
complaint 
also 
triggers 
a 
duty 
to 
defend 
under 
the 
"misappropriation of advertising ideas or style of doing 
business" provision in its CGL policies. 
No. 
01-2432   
 
4 
 
complaint also alleges an injury——consumer confusion——that is 
arguably caused by Bradley's advertising of products that 
include Lawler's misappropriated designs.4 
¶7 
Furthermore, we hold that although Bradley did not 
provide timely notice to the Insurance Company of the Lawler 
lawsuit, Bradley carried the burden of persuasion that the late 
notice did not prejudice the Insurance Company.  
¶8 
Accordingly, we hold, as a matter of law, that the 
Insurance Company had a duty to defend Bradley in the Lawler 
lawsuit and therefore reverse the decision of the court of 
                                                                                                                                                             
Courts that have faced such claims have struggled to 
delineate the proper scope of coverage that advertising injury 
provisions guarantee, and courts remain divided over the 
conditions necessary to give rise to coverage in intellectual 
property cases.  Compare Advance Watch Co., Ltd. v. Kemper Nat'l 
Ins. Co., 99 F.3d 795 (6th Cir. 1996), with Lebas Fashion 
Imports v. ITT Hartford Ins. Group, 59 Cal. Rptr. 2d 36 (Ct. 
App. 1996).  See generally Christopher L. Graff, Insurance 
Coverage of Trademark Infringement Claims: The Contradiction 
Among the Courts, and the Ramifications for Trademark Attorneys, 
89 Trademark Rep. 939 (1999); D. Peter Harvey, Insurance for 
Intellectual Property Claims: The Growing Coverage Debate, 
Intell. Prop. L. Bull., Fall 2001, at 1. 
Because we agree with Bradley that the allegations set 
forth in count VII of Lawler's complaint trigger the Insurance 
Company's duty to defend under the "infringement of trademark" 
provision of its CGL policies, we need not address the scope or 
meaning of "misappropriation of advertising idea or style of 
doing business" to determine whether these provisions include 
trademark or trade dress infringement claims. 
4 Because we conclude, based on count VII, that a duty to 
defend exists under the "infringement of trademark" provision, 
we need not address Bradley's arguments that counts II, VII, and 
VIII are also covered under the "misappropriation of advertising 
ideas or style of doing business" provision of the policies or 
that any other injuries were caused by Bradley's advertising. 
No. 
01-2432   
 
5 
 
appeals.  We remand the award of attorney fees to the circuit 
court 
for 
additional 
evidence 
and 
the 
determination 
of 
reasonable attorney fees.    
I 
¶9 
The court of appeals cogently summarized the facts of 
this case, and we substantially adopt its statement of the facts 
here.   
¶10 The 
Insurance 
Company 
issued 
four 
Comprehensive 
General Liability (CGL) insurance policies to Bradley effective 
from February 1, 1996 to February 1, 2000.  The insurance 
policies provided that the Insurance Company would pay those 
sums that Bradley became obligated to pay as damages because of 
bodily injury, property damage, personal injury, or advertising 
injury.  The insurance policies define each of these terms. 
¶11 On December 3, 1998, Lawler filed a lawsuit against 
the defendants in the United States District Court for the 
Southern District of Indiana.  The original complaint set forth 
eight counts, including breach of fiduciary duty, trade secret 
misappropriation, unjust enrichment, diversion of corporate 
opportunities, 
conversion, 
negligence, 
federal 
unfair 
competition, and common law unfair competition.  Lawler's 
supplemental complaint further asserted a claim for patent 
infringement. 
¶12 Bradley and Lawler are competitors in the development 
and sale of thermostatic mixing systems intended for emergency 
applications. 
 
The 
lawsuit 
resulted 
from 
alleged 
corporate/industrial espionage by a former Lawler employee, 
No. 
01-2432   
 
6 
 
Kevin Kline.5  Lawler designed and patented thermostatic mixing 
valves capable of regulating the inflow of hot and cold water 
into emergency showers and eyewash systems so as to consistently 
and immediately produce tempered water.6  The complaint alleges 
that Kline stole Lawler's "ideas, concepts, and designs" for its 
thermostatic mixing valves, and that Bradley then hired Kline 
and used the stolen information to create its own thermostatic 
mixing valves for emergency showers and eyewash systems.   
¶13 Bradley did not notify the Insurance Company of the 
Lawler lawsuit until March 2, 2000, nearly 15 months after the 
initial complaint and just two weeks before a hearing on a 
preliminary injunction had been scheduled.  At that time, the 
Insurance Company denied coverage for the lawsuit.   
¶14 On August 18, 2000, the Insurance Company sought a 
declaratory judgment in Milwaukee County circuit court that it 
had no obligation under its insurance policies to defend or 
indemnify Bradley in the Lawler lawsuit.  On July 25, 2001, the 
circuit court denied the Insurance Company's motion for summary 
judgment and granted summary judgment to the defendants.  The 
                                                 
5 Kevin Kline was a shareholder, officer, and director of 
Lawler, a closely held corporation with never more than three 
shareholders.  He was also its senior valve engineer, either 
inventing or co-inventing much of the technology used in 
Lawler's thermostatic mixing valves. 
6 The valves are apparently essential in emergency shower 
and eyewash systems to ensure that the systems deliver water at 
a safe temperature whenever needed in a chemical or industrial 
emergency. 
No. 
01-2432   
 
7 
 
circuit court ordered the Insurance Company to pay Bradley 
$2,887,594.24 for defense and indemnification costs. 
II 
¶15 We review a circuit court order granting summary 
judgment applying the same methodology as that used by the 
circuit court.7  Summary judgment will be entered when a court is 
satisfied 
that 
the 
pleadings, 
depositions, 
answers 
to 
interrogatories, admissions, and affidavits show that no genuine 
issues of material fact exist and the moving party is entitled 
to judgment as a matter of law.8   
¶16 This declaratory judgment action also involves the 
interpretation of insurance policies.  The court has set forth, 
in numerous cases, overlapping rules for interpreting an 
insurance policy.  The rules of interpretation applicable in the 
present case are as follows:  Words and phrases in insurance 
contracts are subject to the same rules of construction that 
apply 
to 
contracts 
generally;9 
the 
primary 
objective 
in 
interpreting and construing a contract is to ascertain and carry 
out the true intent of the parties.10 
                                                 
7 Grams v. Boss, 97 Wis. 2d 332, 338-39, 294 N.W.2d 473 
(1980). 
8 Wis. Stat. § 802.08(2) (1999-2000). 
9 Peace v. Northwestern Nat'l Ins. Co., 228 Wis. 2d 106, 
120, 596 N.W.2d 429 (1999); Kremers-Urban Co. v. Am. Employers 
Ins., 119 Wis. 2d 722, 735, 351 N.W.2d 156 (1984). 
10 Mau v. N.D. Ins. Reserve Fund, 2001 WI 134, ¶13, 248 
Wis. 2d 1031, 637 N.W.2d 45; Peace, 228 Wis. 2d at 120; Kremers-
Urban Co., 119 Wis. 2d at 735. 
No. 
01-2432   
 
8 
 
¶17 When 
no 
extrinsic 
evidence 
is 
introduced, 
the 
interpretation of an insurance policy is a question of law that 
we determine independently of the circuit court or court of 
appeals but benefiting from their analyses.11  No extrinsic 
evidence was introduced in the present case.   
III 
¶18 The relevant legal analysis for determining when an 
insurer has a duty to defend an insured is well established in 
Wisconsin.   
¶19 An insurer's duty to defend an insured is determined 
by comparing the allegations of the complaint to the terms of 
the insurance policy.12  "An insurer's duty to defend the insured 
in a third-party suit is predicated on allegations in a 
complaint which, if proven, would give rise to the possibility 
of recovery that falls under the terms and conditions of the 
insurance policy."13  The duty to defend is based solely on the 
allegations 
"contained 
within 
the 
four 
corners 
of 
the 
complaint," without resort to extrinsic facts or evidence.14 
                                                 
11 Smith v. Katz, 226 Wis. 2d 798, 805, 595 N.W.2d 345 
(1999); Katze v. Randolph & Scott Mut. Fire Ins. Co., 116 
Wis. 2d 206, 212, 341 N.W.2d 689 (1984); RTE Corp. v. Maryland 
Cas. Co., 74 Wis. 2d 614, 620, 247 N.W.2d 171 (1976). 
12 Smith, 226 Wis. 2d at 806 (citing School Dist. of 
Shorewood v. Wausau Ins. Co., 170 Wis. 2d 347, 364-65, 488 
N.W.2d 82 (1992)). 
13 Shorewood, 170 Wis. 2d at 364. 
14 Atl. Mut. Ins. Co. v. Badger Med. Supply Co., 191 
Wis. 2d 229, 236, 528 N.W.2d 486 (Ct. App. 1995). 
No. 
01-2432   
 
9 
 
¶20 When comparing the allegations of a complaint to the 
terms of an insurance policy, the allegations in the complaint 
are construed liberally.15  The duty to defend is necessarily 
broader than the duty to indemnify because the duty to defend is 
triggered by arguable, as opposed to actual, coverage.16  We 
therefore "assume all reasonable inferences"17 in the allegations 
of a complaint and resolve any doubt regarding the duty to 
defend in favor of the insured.18  
¶21 In addition, a duty to defend is based upon the nature 
of the claim and not on the merits of the claim.  "It is the 
nature of the claim alleged against the insured which is 
controlling even though the suit may be groundless, false or 
fraudulent."19  Consequently, "an insurer may have a clear duty 
to defend a claim that is utterly specious because, if it were 
meritorious, it would be covered."20  Finally, when an insurance 
                                                 
15 Doyle v. Engelke, 219 Wis. 2d 277, 284, 580 N.W.2d 245, 
(1998). 
16 General Cas. Co. of Wis. v. Hills, 209 Wis. 2d 167, 176 
n.11, 561 N.W.2d 718 (1997); Bruner v. Heritage Cos., 225 
Wis. 2d 728, 735, 593 N.W.2d 814 (Ct. App. 1999). 
17 Doyle v. Engelke, 219 Wis. 2d 277, 284, 580 N.W.2d 245, 
248 (1998). 
18 Wausau 
Tile, 
Inc. 
v. 
County 
Concrete 
Corp., 
226 
Wis. 2d 235, 
266, 
593 
N.W.2d 445 
(1999); 
Shorewood, 
170 
Wis. 2d at 364. 
19 Grieb v. Citizens Cas. Co., 33 Wis. 2d 552, 558, 148 
N.W.2d 103 (1967). 
20 Smith, 226 Wis. 2d at 807. 
No. 
01-2432   
 
10 
 
policy provides coverage for even one claim made in a lawsuit, 
the insurer is obligated to defend the entire suit.21 
IV 
 
¶22 To determine the Insurance Company's duty to defend we 
first examine the advertising injury provision of the CGL 
insurance policies and then turn to the allegations in the 
Lawler complaint, focusing especially on count VII.   
¶23 The CGL insurance policies in the present case provide 
that the Insurance Company will have the right and duty to 
defend Bradley against any suit alleging advertising injury.  
Advertising injury provisions have been part of the standard 
form CGL insurance policy for many years, and a growing body of 
case law has developed around claims that advertising injury 
provisions provide coverage for intellectual property lawsuits, 
including trademark and trade dress, patent, copyright, and 
trade secret cases.22 
¶24 Part B of the CGL insurance policies relating to 
"Personal and Advertising Injury Liability" provides coverage 
for an "advertising injury" caused by an offense committed in 
the course of advertising the insured's goods, products, or 
services. 
 
The 
insurance 
policies 
specifically 
define 
"advertising injury" as an injury "arising out of one or more 
                                                 
21 Doyle, 219 Wis. 2d at 285 n.4; Shorewood, 170 Wis. 2d at 
366. 
22 See, e.g., Graff, supra note 3; Harvey, supra note 3. 
No. 
01-2432   
 
11 
 
of" 
four 
distinct 
offenses, 
including 
"infringement 
of 
trademark."   
¶25 The CGL insurance policies read, in relevant part, as 
follows: 
We will pay those sums that the insured becomes 
legally obligated to pay as damages because of 
personal injury or advertising injury . . . .  
. . . . 
. . . This insurance applies to:  
. . . . 
. . . Advertising 
injury 
caused 
by 
an 
offense 
committed in the course of advertising your goods, 
products or services.  
. . . . 
Advertising injury means injury arising out of one or 
more of the following offenses:  
a. Oral, written, televised or videotaped publication 
of material that slanders or libels a person or 
organization 
or 
disparages 
a 
person's 
or 
organization's goods, products or services;  
b. Oral, written, televised or videotaped publication 
of material that violates a person's right of privacy;  
c. Misappropriation of advertising ideas or style of 
doing business; or  
No. 
01-2432   
 
12 
 
d. Infringement of trademark, copyright, title or 
slogan.23 
 
¶26 We now turn to the allegations in the Lawler complaint 
to determine whether they give rise to the possibility of 
coverage under the CGL insurance policies' advertising injury 
provision 
(subsection 
(d)) 
relating 
to 
infringement 
of 
trademark.  In order to make this determination we must answer 
three questions:  (a) Does the Lawler complaint state an offense 
covered under the advertising injury provisions of the insurance 
policies?  (b) Does the Lawler complaint allege that Bradley 
engaged in advertising activity?  (c) Does the Lawler complaint 
allege a causal connection between the injury alleged and 
Bradley's advertising activity?24    
A 
                                                 
23 The insurance policies providing coverage from February 
1, 1996, through February 1, 1998, did not include coverage for 
trademark infringement.  Subsection (d) above originally covered 
only "infringement of copyright, title or slogan."  Trademark 
infringement was added by a broadened form endorsement to the 
policies executed with the 1998-99 and 1999-2000 policies.  
Neither party disputes that the broadened definition, including 
trademark infringement, applies in the present case. 
For general discussions of insurance policies covering 
"advertising injury," see, e.g., 9 Lee R. Russ & Thomas S. 
Segalla, Couch on Insurance §§ 129:25-28 (3d ed. 1999 & Supp. 
2002); Graff, supra note 3; Harvey, supra note 3; Elizabeth D. 
Lauzon, Advertising Injury Insurance, 98 A.L.R. 5th 1 (2002); 
Byron L. Romine, Advertising Injury Coverage Analysis for 
Trademark and Trade Infringement Claims In Texas: As Easy As 
One, Two, Three, 6 Tex. Wesleyan L. Rev. 211 (2000). 
24 See Graff, supra note 3; Harvey, supra note 3; Romine, 
supra note 23. 
No. 
01-2432   
 
13 
 
¶27 The touchstone for determining whether the Lawler 
complaint has alleged an advertising injury is the enumerated 
offenses in the insurance policy.  Only those risks are insured, 
no others.25 
¶28 Both parties agree that under the CGL insurance 
policies in the present case, an advertising injury arising from 
the offense of "infringement of trademark" denotes the entire 
field of trademarks, service marks, trade names, and trade 
dress.26  An alleged trade dress infringement is the trademark 
infringement involved in the present case.  Trade dress is 
defined as a product's "total image"27 and "refers to the total 
image of a product, including features such as size, shape, 
color 
or 
color 
combinations, 
texture, 
graphics, 
or 
even 
particular sales techniques."28  Moreover, it includes not only 
                                                 
25 Heritage Mut. Ins. Co. v. Advanced Polymer Tech., 97 F. 
Supp. 2d 913, 921 (S.D. Ind. 2000). 
26 See Platinum Home Mortgage Corp. v. Platinum Fin. Group, 
Inc., 149 F.3d 722, 726 n.1 (7th Cir. 1998) ("The term 
'trademark' can be used in a broad and generic sense to denote 
the entire field of trademarks, service marks, trade names, and 
trade dress."). 
Jon Wittig, the litigation manager for the Insurance 
Company, conceded in his deposition that a claim for "trade 
dress infringement" that otherwise met all of the requirements 
for coverage would be included under the "infringement of 
trademark" provision in its CGL policies.  The Insurance Company 
does not dispute that concession in the present case. 
27 John H. Harland Co. v. Clarke Checks, Inc., 711 F.2d 966, 
980 (11th Cir. 1983). 
28 Syndicate Sales Inc. v. Hampshire Paper Corp., 192 F.3d 
633, 636 (7th Cir. 1999) (citations omitted). 
No. 
01-2432   
 
14 
 
the packaging or "dressing" of a product but can also encompass 
the "design of a product."29  The purpose of both trade dress and 
trademark is to enable a business to identify itself as the 
source of a given product through the adoption of some 
distinctive mark.30   
¶29 The Lawler complaint alleges that the defendants 
committed nine separate offenses.  Our inquiry focuses on count 
VII titled "Federal Unfair Competition," alleging that Bradley 
violated § 43 of the federal Lanham Act (15 U.S.C. § 1125).31  A 
                                                 
29 Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 209 
(2000) (emphasis added) (citing Ashley Furniture Indus., Inc. v. 
Sangiacomo N.A., Ltd., 187 F.3d 363 (4th Cir. 1999); Knitwaves, 
Inc. v. Lollytogs, Ltd., 71 F.3d 996 (2d Cir. 1995); Stuart Hall 
Co., Inc. v. Ampad Corp., 51 F.3d 780 (8th Cir. 1995)). 
30 Wal-Mart, 529 U.S. at 210; Roulo v. Russ Berrie & Co., 
886 F.2d 931, 935-36 (7th Cir. 1989). 
31 15 U.S.C. § 1125 reads, in relevant part: 
(1) Any person who, on or in connection with any goods 
or services, or any container for goods, uses in 
commerce any word, term, name, symbol, or device, or 
any combination thereof, or any false designation of 
origin, false or misleading description of fact, or 
false or misleading representation of fact, which— 
(A) is likely to cause confusion, or to cause 
mistake, or to deceive as to the affiliation, 
connection, or association of such person with 
another person, or as to the origin, sponsorship, 
or approval of his or her goods, services, or 
commercial activities by another person, or  
(B) in 
commercial 
advertising 
or 
promotion, 
misrepresents 
the 
nature, 
characteristics, 
qualities, or geographic origin of his or her or 
another person's goods, services, or commercial 
activities, shall be liable in a civil action by 
No. 
01-2432   
 
15 
 
party may obtain relief under this statutory provision for trade 
dress infringement.32 
¶30 Section 43 of the Lanham Act was designed to create a 
new federal remedy for the particular kind of unfair competition 
that results from false designation of origin or other false 
representation used in connection with the sale of a product.33 
The key to finding a violation under § 43 "is a determination 
that the materials used by the defendant created a likelihood of 
confusion, deception or mistake on the part of the consuming 
public."34   
¶31 Count VII specifically alleges a violation of § 43 of 
the 
Lanham 
Act 
(15 
U.S.C. 
§ 1125) 
based 
on 
Bradley's 
misappropriation of Lawler's "Trade Secrets, technologies and 
designs relating to thermostatic mixing valves" and the use of 
                                                                                                                                                             
any person who believes that he or she is or is 
likely to be damaged by such act. 
32 Badger Meter, Inc. v. Grinnell Corp., 13 F.3d 1145, 1151 
(7th Cir. 1994). 
33 Metric & Multistandard Components Corp. v. Metric's, 
Inc., 635 F.2d 710, 713 (8th Cir. 1980) (citations omitted). 
Section 43 of the Lanham Act gives a producer "a cause of 
action for the use by any person of 'any word, term, name, 
symbol, 
or 
device, 
or 
any 
combination 
thereof . . . which . . . is likely to cause confusion . . . as 
to the 
origin, sponsorship, 
or approval of 
his or her 
goods . . . .'" Wal-Mart, 529 U.S. at 209 (2000) (quoting 15 
U.S.C. § 1125(a)). 
34 Metric, 635 F.2d at 713 (citations omitted).  See also 
Environ Prods., Inc. v. Furon Co., Inc., 1998 WL 398074, *4 
(E.D. Pa. June 26, 1998). 
No. 
01-2432   
 
16 
 
those designs to create a "false designation of origin."  Count 
VII of the complaint reads: 
115. Bradley's misappropriation of Lawler's Trade 
Secrets, 
technologies 
and 
designs 
relating 
to 
thermostatic mixing valves and the use thereof in 
connection with the accused products is a false 
designation of origin, or a false description or 
representation, and wrongfully and falsely designates 
the origin of Lawler's thermostatic mixing valve 
technology as originating from or being connected with 
Bradley, and amounts to using a false description or 
representation in commerce.  
116. Bradley's said acts are in violation of the 
federal Lanham Act (15 U.S.C. § 1125). 
¶32 We conclude that the allegations in Lawler's complaint 
arguably fit within trade dress infringement.  Paragraph 115 of 
Lawler's complaint accuses Bradley of misappropriating mixing 
valve "designs."  The complaint expressly distinguishes the 
misappropriated 
designs 
from 
stolen 
trade 
secrets 
and 
technologies by alleging misappropriation of three separate 
items:  "Trade Secrets, technologies and designs."  It is a 
reasonable inference, therefore, to conclude that the word 
"designs" refers to something apart from both trade secrets and 
misappropriated 
technologies 
and 
possibly 
reaches 
No. 
01-2432   
 
17 
 
distinguishing, 
non-functional 
items 
in 
the 
mixing 
valve 
system.35  
¶33 Furthermore, the allegations in paragraph 115 of 
Lawler's complaint specifically refer to the Lanham Act's 
language regarding consumer confusion, deception, and mistake.  
Lawler alleges that Bradley's use of its protected designs has 
led to "a false designation of origin" and a "false description 
or representation," and "falsely designates the origin of 
Lawler's thermostatic mixing valve technology as originating 
from or being connected with Bradley [which] amounts to using a 
false description or representation in commerce." 
¶34 Thus, when paragraphs 115 and 116 are read together, 
count VII of Lawler's complaint is reasonably construed to 
allege the infringement of trademark under the CGL insurance 
policies; the nature of the claim in count VII of Lawler's 
complaint is that Bradley committed trade dress infringement in 
violation of § 43 of the Lanham Act.   
¶35 The Insurance Company contends that Bradley's argument 
must fail because Lawler's complaint does not use the words 
"trademark" or "trade dress" and that neither the complaint nor 
                                                 
35 See, e.g., Badger Meter, Inc. v. Grinnell Corp., 13 F.3d 
1145 (7th Cir. 1994).  In Badger Meter, Badger alleged that one 
of its competitors copied the design of its water meter.  The 
copied design included many functional elements not subject to 
trade dress protection but also included a single ornamental 
aspect——a distinguishing "Badger blue" plastic collar.  The 
court held that trade dress protection extended to a plastic 
collar in a water meter with this design if it was "Badger 
blue." 
No. 
01-2432   
 
18 
 
Bradley ever identifies a single distinguishing, non-functional 
feature of the mixing valve system that could possibly be the 
subject of a trade dress claim.   
¶36 We disagree with the Insurance Company.  It is not 
dispositive that the specific words "trademark" and "trade 
dress" are not included in the complaint or that neither the 
complaint nor Bradley identifies a single distinguishable, non-
functional feature of the mixing valve system that could be the 
subject of a trade dress claim.36  Allegations in a complaint are 
to be liberally construed when ascertaining whether a duty to 
defend exists and a reviewing court is obliged to make 
reasonable inferences based on the complaint's language.37  
Moreover, in analyzing a duty to defend, the merits of the claim 
are irrelevant; it is the nature of the claim that controls our 
inquiry.38  
¶37 The 
Insurance 
Company 
further 
argues 
that 
the 
complaint, when viewed in its entirety, clearly alleges the 
theft of only patented, functional designs.  According to the 
Insurance Company, any focus on the word "designs" in count VII 
must be viewed in the context of the entire complaint, which 
has, as its "aim," redress for stolen patented technology, and 
                                                 
36 Allison v. Ticor Title Ins. Co., 907 F.2d 645, 649 (7th 
Cir. 1990) ("In a system of notice pleading, an insurer may be 
called on to defend without a complete articulation of the claim 
against its policyholders."). 
37 Doyle, 219 Wis. 2d at 284. 
38 Smith, 226 Wis. 2d at 807; Grieb, 33 Wis. 2d at 558. 
No. 
01-2432   
 
19 
 
thus it is not reasonable to infer that any of the designs were 
distinctive or non-functional. 
¶38 To support its position the Insurance Company points 
to paragraph 48 of the complaint, which alleges that Kline 
"conceived ideas, concepts and designs for thermostatic mixing 
valves intended to avoid the Lawler Patents."  The Insurance 
Company also points to paragraph 123, alleging that "Bradley is 
infringing one or more of the Lawler patents by making, using, 
selling or offering for sale thermostatic mixing valves which 
incorporate one or more of the inventions patented by the Lawler 
Patents." 
¶39 We 
again 
disagree 
with 
the 
Insurance 
Company's 
construction of the allegations in the complaint.  Paragraph 123 
is found in Lawler's amended complaint, count IX, alleging 
"patent infringement."  That Bradley may be guilty of patent 
infringement for selling mixing valves incorporating one or more 
patented inventions does not preclude the possibility that 
Bradley is also guilty of trade dress infringement under count 
VII for selling those same valves, if those valves also include 
a misappropriated distinctive, non-functional design.  Pleading 
rules permit plaintiffs to plead inconsistent theories for 
relief.39  Thus it is not essential that all allegations be 
construed harmoniously. 
¶40 Based upon the four corners of the complaint liberally 
construed 
and 
drawing 
reasonable 
inferences 
therefrom, we 
                                                 
39 See Wis. Stat. § 802.02(5)(b) (2001-02).   
No. 
01-2432   
 
20 
 
conclude 
that 
the 
Lawler 
complaint 
alleges 
that 
Bradley 
committed an offense covered under the advertising injury 
provision of the CGL insurance policies.   
B 
 
¶41 The second question we must answer to determine 
whether the Insurance Company owes a duty to defend is whether 
Bradley engaged in advertising.   
¶42 The CGL insurance policies in question do not define 
the word "advertising."  Wisconsin case law, however, has 
concluded that the word "advertising" is a non-technical word in 
an insurance policy that should be given its ordinary meaning.40  
Generally speaking, advertising refers to calling the public's 
attention to a product or business by proclaiming its qualities 
or advantages in order to increase sales or arouse a desire to 
buy or patronize.41   
¶43 In 
the 
context 
of 
trademark 
and 
trade 
dress 
infringement cases, courts are divided regarding how broadly to 
interpret the word "advertising," even understood in this 
ordinary 
and 
popular sense.42 
 Courts 
adopting 
a 
narrow 
                                                 
40 See Atl. Mut. Ins. Co., 191 Wis. 2d at 239 (interpreting 
the word "advertising" as part of the phrase "advertising ideas" 
in an insurance policy that provided coverage for advertising 
injuries including the "misappropriation of advertising ideas or 
style of doing business"). 
41 See id. (quoting Cuna Mut. Ins. Soc'y v. DOR, 120 
Wis. 2d 445, 450, 355 N.W.2d 541 (Ct. App. 1984) (quoting The 
American Heritage Dictionary of the English Language (New 
College 
ed. 
1980) 
and 
Webster's 
Third 
New 
International 
Dictionary (4th ed. 1976))). 
42 See, e.g., Graff, supra note 3, at 963-64. 
No. 
01-2432   
 
21 
 
definition of advertising require that advertising include the 
widespread 
announcement 
or 
distribution 
of 
promotional 
materials.43 
 
Courts 
adopting 
a 
broader 
definition 
of 
advertising, however, hold that "any oral, written, or graphic 
statement made by the seller in any manner in connection with 
the solicitation of business" is sufficient.44  In many cases, 
the specific context, including the product and the business, 
will dictate a particular interpretation.45 
¶44 The Lawler complaint does not require that we parse 
the word "advertising" in the present case and adopt either the 
narrow or broad interpretation to decide this case.  The alleged 
activities in the present case satisfy both definitions.  The 
complaint expressly alleges that Bradley has created "materials 
promoting" its thermostatic mixing valves.  Lawler even attached 
one 
of 
Bradley's 
brochures 
to 
the 
original 
complaint.46  
Moreover, the complaint alleges that Bradley displayed its 
shower systems, including the thermostatic mixing valves, to 
                                                 
43 Id. at 964 (citing, among others, Farmington Cas. Co. v. 
Cyberlogic Techs., Inc., 996 F.Supp. 695, 700 (E.D. Mich. 1998); 
Playboy Enters., Inc. v. St. Paul Fire & Marine Ins. Co., 769 
F.2d 425, 428-29 (7th Cir. 1985)). 
44 Id. (quoting Farmington Cas. Co. v. Cyberlogic Techs., 
Inc., 996 F.Supp. 695, 700 (E.D. Mich. 1998)). 
45 See, e.g., Charter Oak Fire Ins. Co. v. Hedeen & Cos., 
C.V., 280 F.3d 730, 737 (7th Cir. 2002) (finding advertising 
where insured sent business letters because insured was involved 
in a business with a very limited commercial audience). 
46 Paragraphs 55 and 63 of the complaint are incorporated by 
reference in count VII.  This brochure is not part of the 
appellate record before us. 
No. 
01-2432   
 
22 
 
"existing and potential customers" at a trade show.  The 
complaint reads: 
55. Bradley's thermostatic mixing valve [sic] have 
been and are presently being made and sold under the 
product Model Nos. S19-2000, S19-2100 and S19-2200 
(hereinafter referred to as the "accused products").  
Attached as Exhibit D are copies of selected Bradley 
materials promoting, as well as installation and 
maintenance instructions, for these accused products. 
. . . . 
63. During the week of October 26, 1998, at a show of 
the American Society of Plumbing Engineers (ASPE) held 
in 
Indianapolis, 
Indiana, 
Bradley 
and 
its 
representatives displayed emergency shower systems 
incorporating the accused products to existing and 
potential customers. 
¶45 Creating brochures and displaying products at a trade 
show clearly involve the widespread announcement or distribution 
of promotional materials and calling the attention of the public 
to the emergency shower systems by proclaiming their qualities 
in order to increase sales or arouse a desire to buy.  The 
complaint alleges that the brochures are used to promote the 
products; it also alleges that the trade show display was 
directed to customers.47  
C 
¶46 Having determined that count VII alleges an offense 
covered under the advertising injury provisions of the CGL 
insurance policies and that Bradley engaged in advertising, we 
                                                 
47 Bear Wolf, Inc. v. Hartford Ins. Co. of the Southeast, 
819 So.2d 818 (Fla. Ct. App. 2002) (display at trade show is 
advertising). 
No. 
01-2432   
 
23 
 
now turn to the most difficult question presented in this case:  
whether the Lawler complaint alleges that Bradley's advertising 
activities caused the advertising injury.  We conclude that a 
causal connection is alleged, and that the Lawler complaint 
therefore triggers the Insurance Company's duty to defend. 
¶47 The 
CGL 
insurance 
policies 
provide 
coverage for 
damages resulting from an enumerated offense that causes injury 
committed in the course of advertising goods, products, or 
services.48  This "causal connection" requirement is standard in 
advertising injury provisions of CGL insurance policies, though 
its treatment by courts is anything but uniform.  As the Third 
Circuit has explained, "there is much confusion in the case law 
concerning 
when 
an 
'advertising 
injury' 
is 
'caused' 
by 
advertising within the meaning of standard business insurance 
policies."49 
 
¶48 The dispute between the parties in the case at hand 
includes a dispute over which line of cases to follow.  Some 
courts 
interpreting 
the 
causal 
connection 
requirement 
in 
trademark and trade dress infringement cases hold that the cause 
of an alleged trademark or trade dress advertising injury is the 
initial copying of the trademark or trade dress, not the 
subsequent advertising that depicts the copied trademarks or 
                                                 
48 The 
policy 
reads: 
"This 
insurance 
applies 
to . . . [a]dvertising injury caused by an offense committed in 
the course of advertising your goods, products or services." 
49 Frog, Switch & Mfg. Co. v. Travelers Ins. Co., 193 F.3d 
742, 750 n.8 (3d Cir. 1999).  See also Graff, supra note 3, at 
966-73; Romine, supra note 23, at 234-37. 
No. 
01-2432   
 
24 
 
trade dress.50  The Insurance Company asserts that the court of 
appeals correctly concluded that the alleged injury Lawler 
suffered was the theft of its trade secrets, and nothing about 
Bradley's brochures or participation in a trade show caused that 
theft or led to the misappropriation of those trade secrets.   
¶49 Other courts conclude more broadly that the causal 
connection requirement is satisfied when a defendant advertises 
the products with confusingly similar trademarks or trade dress, 
because the resulting consumer confusion is part of the injury 
caused by trademark or trade dress infringement.51  Bradley 
argues that the theft of trade secrets is but one alleged injury 
in the Lawler complaint and that the court of appeals improperly 
construed the complaint when it concluded that the only injury 
suffered by Lawler was the theft of its trade secrets.  Properly 
construed, argues Bradley, Lawler's complaint also alleges harm 
due to consumer confusion over the origin of the thermostatic 
mixing valve. 
 
¶50 We agree with Bradley that the Insurance Company and 
the court of appeals have construed the complaint——and Lawler's 
                                                 
50 See R.C. Bigelow, Inc. v. Liberty Mut. Ins. Co., 287 F.3d 
242, 247, 248 (2d Cir. 2002) (citing Advance Watch Co. v. Kemper 
Nat'l Ins. Co., 99 F.3d 795, 806-07 (6th Cir. 1996)). 
51 See R.C. Bigelow, 287 F.3d at 247-48 (citing Energex Sys. 
Corp. v. Fireman's Fund Ins. Co., 1997 WL 358007, at *4 
(S.D.N.Y. June 25, 1997); J.A. Brundage Plumbing & Roto-Rooter, 
Inc. v. Mass. Bay Ins. Co., 818 F. Supp. 553, 558 (W.D.N.Y. 
1993) (vacated due to settlement, 153 F.R.D. 36 (W.D.N.Y. 
1994)); Allou Health & Beauty Care, Inc. v. Aetna Cas. & Sur. 
Co., 703 N.Y.S.2d 253, 255-56 (2000).  For a discussion of the 
cases, see Lauzon, supra note 23, § 19. 
No. 
01-2432   
 
25 
 
injuries——too narrowly.  Count VII of the Lawler complaint 
alleges 
that 
the 
misappropriation 
of 
Lawler's 
designs 
"wrongfully and falsely designates the origin of Lawler's 
thermostatic mixing valve technology as originating from or 
being connected with Bradley, and amount to utilizing a false 
description or representation in commerce."   
 
¶51 The allegations in the Lawler complaint state claims 
for injuries above and beyond the initial misappropriation of 
trade secrets and designs.  Even if the main thrust of the 
complaint is recovery for trade secret theft, the four corners 
of the complaint include more.  Count VII of the complaint 
alleges that Lawler was injured by the consumer confusion caused 
by the thermostatic mixing valves that Bradley produced with 
misappropriated designs.  It is a reasonable inference, in the 
present case, that the promotional materials and trade show 
display caused at least some of that injury. 
¶52 The Second Circuit Court of Appeals recently addressed 
a similar issue in R.C. Bigelow, Inc. v. Liberty Mutual 
Insurance Company, 287 F.3d 242 (2d Cir. 2002).  The Bigelow 
court held that allegations of trade dress infringement in a 
third-party complaint satisfied the causal nexus requirement of 
the insurance policy when one of the alleged injuries was 
consumer confusion and advertisements of the alleged product 
were attached.  The Bigelow court explained that trademark and 
trade dress infringement is a "continuing" tort that gives rise 
No. 
01-2432   
 
26 
 
to a claim for relief as long as "the infringement persists."52  
Thus, it rejected the view that trade dress infringement 
injuries were caused only at the moment of copying and not by 
subsequent advertising.  The Second Circuit explained: 
The causation issue is not whether the advertisement 
can be the cause of the creation of the infringing 
product; the issue, under the terms of the policy, is 
whether there has been "advertising injury" that was 
"caused by an offense committed in the course of 
advertising" the insured products.  In this case, the 
alleged "offense" is creating consumer confusion by 
the use of copied trade dress.  As the Third Circuit 
observed in Frog, Switch, where an advertising injury 
is alleged, the relevant causation issue with regard 
to insurance coverage is not whether "the injury could 
have 
taken 
place 
without 
the 
advertising," 
but 
"whether 
the 
advertising 
did in 
fact 
contribute 
materially to the injury."  [The insured's] ads 
displayed the allegedly infringing trade dress.  If, 
as [was] alleged, [the insured's] copied trade dress 
created consumer confusion, the ads could be found to 
have contributed to such confusion.53 
 
¶53 We agree with the reasoning of the Second Circuit.  
Our inquiry is whether, based on the allegations in the 
complaint, Bradley's advertising of products contributed to the 
                                                 
52 R.C. Bigelow, Inc. v. Liberty Mut. Ins. Co., 287 F.3d 
242, 248 (2d Cir. 2002) (citing Menendez v. Holt, 128 U.S. 514, 
523 (1888); Brunswick Corp. v. Spinit Reel Co., 832 F.2d 513, 
526 (10th Cir. 1987) (quoting James Burrough Ltd. v. Sign of 
Beefeater, Inc., 572 F.2d 574, 578 (7th Cir. 1978))). 
53 R.C. Bigelow, Inc., 287 F.3d at 248 (quoting Frog, 
Switch, 193 F.3d at 750 n.8 (second emphasis added)). 
No. 
01-2432   
 
27 
 
alleged injury of consumer confusion suffered by Lawler.54  We 
conclude that it is reasonable to infer, based upon the 
allegations 
that 
Bradley 
created 
materials 
promoting 
the 
misappropriated designs and displayed those designs at a trade 
show, that these advertising activities contributed to the 
alleged injuries.  Thus, we conclude that the causal connection 
requirement was met in this case.   
 
¶54 For the reasons set forth, the Lawler complaint states 
an offense covered under the CGL insurance policies, the 
complaint alleges that Bradley engaged in advertising, and the 
complaint alleges a causal connection between the injury alleged 
and Bradley's advertising.  We therefore hold that the Insurance 
Company had a duty to defend Bradley in the lawsuit brought by 
Lawler against Bradley. 
V 
 
¶55 The next issue we must decide is whether the Insurance 
Company's duty to defend was abrogated by Bradley's failure to 
notify the Insurance Company of the Lawler lawsuit until almost 
fifteen months after the lawsuit was first brought. 
                                                 
54 We do not address in the present case whether a claim for 
trademark or trade dress infringement under the Lanham Act will 
always satisfy the causal nexus requirements, as Bradley 
asserts.  See, e.g., Poof Toy Prods., Inc. v. United States Fid. 
and Guar. Co., 891 F.Supp. 1228 (E.D. Mich. 1995) (allegations 
of trademark and trade dress infringement inherently involve 
advertising 
activity 
because 
in 
order 
to 
cause 
consumer 
confusion one must advertise the mark or dress). 
No. 
01-2432   
 
28 
 
 
¶56 The CGL insurance policies required that Bradley 
"promptly notify" Fireman's Fund in the event of a lawsuit.  The 
insurance policies read, in relevant part: 
Section IV – Commercial General Liability Conditions, 
2. 
. . . . 
a. In the event of an occurrence, offense, claim or 
suit, you must promptly notify us.  Your duty to 
promptly notify us is effective when your executive, 
officers, partners, members, or legal representatives 
are 
aware 
of 
the 
General 
Liability 
occurrence, 
offense, claim, or suit.  Knowledge of an occurrence, 
offense, claim or suit by other employee(s) does not 
imply you also have such knowledge.55  
¶57 Lawler first filed its complaint on December 3, 1998. 
On December 14, 1998, the defendants filed their appearances in 
the case.  The Insurance Company, however, did not receive 
                                                 
55 This language applies to the CGL policies in effect 
February 1, 1998, through February 1, 2000.  It was added as 
part of the broadened endorsement, modifying the original 
language below: 
Section IV – Commercial General Liability Conditions 
2. Duties in the event of occurrence, offense, claim 
or suit:  
. . . . 
b. If a claim is made or "suit" is brought against any 
insured, you must: 
(1) Immediately record the specifics of the claim or 
"suit" and the date received; and 
(2) Notify us as soon as practicable. 
You must see to it that we receive written notice of 
the claim or "suit" as soon as practicable. 
No. 
01-2432   
 
29 
 
notice until March 2, 2000, when AON Risk Service, on behalf of 
Bradley, forwarded loss notices to the Insurance Company.     
¶58 According to the Insurance Company, because Bradley 
waited nearly fifteen months to provide it with notice of the 
suit, the Insurance Company need not defend the suit or 
indemnify Bradley.  Bradley does not dispute that its notice was 
neither prompt nor timely.  Rather, Bradley argues that an 
insurer is liable even when notice is untimely if the insurer is 
not prejudiced by the failure to provide prompt notice.  In this 
case, according to Bradley, the Insurance Company was not 
prejudiced by the nearly fifteen-month delay in receiving notice 
of the Lawler lawsuit. 
¶59 Prejudice is presumed under Wisconsin law if notice of 
a suit is given more than one year after the time required in an 
insurance policy.56  The burden is on the insured to prove that 
no prejudice resulted to the insurer.57  Whether there was 
prejudice is typically a question of fact.58  However, summary 
judgment may be granted on the issue of prejudice because of an 
insured's untimely notice when no genuine issue as to material 
                                                 
56 Gerrard 
Realty Corp. 
v. Am. States 
Ins. Co., 89 
Wis. 2d 130, 145-47, 277 N.W.2d 863 (1979).  
57 Neff v. Pierzina, 2001 WI 95, ¶43, 245 Wis. 2d 285; 629 
N.W.2d 177; see also Wis. Stat. § 632.26(2) (2001-02) (failure 
to give notice "does not bar liability under the policy if the 
insurer was not prejudiced by the failure, but the risk of 
nonpersuasion 
is 
upon 
the 
person 
claiming 
there 
was 
no 
prejudice").   
58 Neff, 2001 WI 95, ¶47. 
No. 
01-2432   
 
30 
 
fact exists and one party is entitled to judgment as a matter of 
law. 
¶60 The Insurance Company and Bradley dispute whether the 
Insurance Company was prejudiced by the untimely notice.  Yet 
their dispute goes only to the conclusion of law to be drawn 
from undisputed facts; no dispute exists over material facts. 
¶61 An insurer is prejudiced by late notice when, for 
example, it cannot investigate the facts necessary to determine 
whether coverage should be provided and when it has been denied 
the opportunity to have input into the manner in which the 
underlying claim is being defended.59  The Insurance Company 
argues that Bradley's late notice was prejudicial because it was 
given only two weeks to engage in discovery prior to the 
preliminary injunction hearing scheduled for March 16, 2000.  
According to the Insurance Company, such late notice denied it 
the opportunity to participate in the extensive discovery that 
had taken place up until that point and put it in the untenable 
position of attempting to hire counsel and digest a year's worth 
of discovery in just two weeks.   
¶62 Bradley does not dispute either that the Insurance 
Company had only two weeks' notice or that having only two 
weeks' notice made it difficult to prepare for a preliminary 
injunction hearing of this magnitude.  Yet Bradley responds that 
the untenable position in which the Insurance Company found 
itself was inconsequential in the present case.  Bradley points 
                                                 
59 Gerrard Realty, 89 Wis. 2d at 146-47. 
No. 
01-2432   
 
31 
 
to the fact that Jon Wittig, the Insurance Company's litigation 
manager, testified that he would have denied a duty to defend on 
the exact same complaint even if he had been provided with 
notice only one month after the Lawler lawsuit was filed, to 
support its conclusion.  Wittig testified as follows: 
Q: [I]f this lawsuit had been filed in December of 
2000 and you received notice of the complaint in 
January of 2001, would you have handled the claim any 
differently? 
A: The same lawsuit, exact same lawsuit? 
Q: Correct. 
A: No. 
Q: You would have denied coverage? 
A: Yes. 
Q: And would you have done any further investigation? 
A: No, because all I'm required to do is compare the 
complaint to the policy. 
Q: Would you have——I take it you would not only have 
denied coverage, you would have denied the duty to 
defend; is that correct? 
A: Yes. 
¶63 The Insurance Company nowhere disputes this admission 
or its veracity.60 The Insurance Company has consistently 
                                                 
60 The Insurance Company's only argument concerning Wittig's 
testimony is that Bradley has not met its burden by relying on 
it.  The Insurance Company argues that it is not enough for 
Bradley to assert that "at the time of his deposition, Wittig 
never 
identified 
a 
specific 
example 
of 
prejudice;" 
such 
testimony 
is 
mere 
speculation 
as 
to 
actual 
prejudice.  
Plaintiff-Appellant's Brief at 53. 
No. 
01-2432   
 
32 
 
maintained no coverage existed.  Even if the lack of timely 
notice placed the Insurance Company in a difficult litigation 
position, the clear and uncontroverted evidence in the record is 
that the timing of Bradley's notice would not have changed the 
Insurance Company's decision to deny its duty to defend.61  Thus 
we conclude as a matter of law that the Insurance Company 
suffered no prejudice.  Bradley carried its burden to prove lack 
of prejudice.   
VI 
¶64 Finally, the Insurance Company disputes the amount the 
circuit court awarded to Bradley for attorney fees.  The 
Insurance Company asks this court to reverse the award of 
attorney fees and remand the case for a hearing to determine 
reasonable attorney fees.  The dispute does not involve whether 
the Insurance Company owes Bradley attorney fees but merely 
addresses the amount of those fees. 
¶65 The circuit court awarded Bradley attorney fees in the 
amount of $1,383,704.50 for defense of the Lawler lawsuit from 
the time that Bradley tendered defense to the Insurance Company.  
Bradley submitted a proposed order identifying this amount as 
the total for attorney fees.  The proposed order was supported 
in large part by an affidavit submitted by the Bradley's Senior 
Vice President of Finance, Secretary and Treasurer and it 
                                                 
61 See, e.g., Maryland Cas. Co. v. Wausau Chem. Corp., 809 
F.Supp. 680, 695 (W.D. Wis. 1992) (finding no prejudice as a 
matter of law where there was evidence that insurers would not 
have acted any differently even if insured had given timely 
notice). 
No. 
01-2432   
 
33 
 
included a monthly breakdown of the total amount due on legal 
bills related to the Lawler lawsuit; these total amounts were 
sub-divided 
into 
three 
categories 
of 
expenses——patent 
application, non-infringement of patent, and lawsuit.62   
¶66 The Insurance Company objected to the proposed order 
and requested a hearing to determine whether the attorney's fees 
claimed by Bradley were in fact reasonable.  The Insurance 
Company pointed out that the supporting material did not 
sufficiently detail the number of hours worked, the type of work 
being done, or the person completing the work; the Insurance 
Company also pointed out discrepancies in the amounts identified 
for particular months.  The circuit court did not grant the 
Insurance Company's request for a hearing and approved Bradley's 
proposed order for payment of attorney fees. 
¶67 The general rule is that a circuit court's findings of 
fact will not be disturbed on appeal unless clearly erroneous. 
An exception to this rule exists with respect to determinations 
                                                 
62 Bradley also submitted (1) an affidavit from the attorney 
primarily responsible for handling its coverage dispute case 
with the Insurance Company generally describing the type of 
legal work completed, and (2) an affidavit from a paralegal at 
its 
attorney's 
office, 
who 
is 
also 
a 
Certified 
Public 
Accountant, explaining his calculations of interest due on the 
owed amounts.   
In 
addition, 
Bradley's 
Motion 
in 
Opposition 
to 
the 
Insurance Company's Motion for Summary Judgment included a 
general description of services provided in defending against 
the Lawler complaint.  No reference is made to any of these 
additional documents in the calculation of attorney fees for 
defense of the Lawler complaint in the circuit court's order of 
judgment. 
No. 
01-2432   
 
34 
 
of the value of legal services,63 because the value of legal 
services is reviewed on appeal by judges who have expert 
knowledge as to the reasonable value of legal services.64  The 
proper factors to consider when determining reasonable attorney 
fees include: "the amount and character of the services 
rendered; the labor, time, and trouble involved; the character 
and importance of the litigation; the amount of money or value 
of the property affected; the professional skill and experience 
called for; the standing of the attorney in his profession; and 
the general ability of the client to pay and the pecuniary 
benefit derived from the services."65 
¶68 The Insurance Company argues that the affidavit did 
not provide sufficiently detailed information concerning who 
performed legal services, at what rate, for what amount of time, 
and what services were provided, for the circuit court to make a 
determination of reasonableness.  The court of appeals did not 
                                                 
63 Touchett v. E.Z. Paintr Corp., 14 Wis. 2d 479, 488, 111 
N.W.2d 419 (1961). 
64 Id. 
65 Three & One Co. v. Geilfuss, 178 Wis. 2d 400, 415, 504 
N.W.2d 393 (Ct. App. 1993) (citing Touchett, 14 Wis. 2d at 
488)). 
No. 
01-2432   
 
35 
 
reach this issue, and Bradley did not address this issue in its 
brief or at oral argument before this court.66 
¶69 We 
agree 
with 
the 
Insurance 
Company 
that 
the 
information provided by Bradley was not sufficient to enable the 
circuit court or this court to determine a reasonable figure for 
attorney fees in this case.  A list of monthly totals paid for 
legal services broadly grouped across areas of representation 
does not give either court enough information to employ the 
analysis required by Wisconsin law.  As the Insurance Company 
argues, it is not possible to know from the affidavits the 
character of the work performed, how much time was spent on each 
type of work, and who performed the work.  Without this 
information, a court cannot determine whether the amount that 
Bradley paid per month was in fact reasonable.   
¶70 Consequently, we reverse the circuit court's award of 
attorney fees in the amount of $1,383,704.50 and remand the 
award of attorney fees to the circuit court for additional 
evidence and the determination of reasonable attorney fees.    
VII 
                                                 
66 In the court of appeals, Bradley argued that the circuit 
court properly entered judgment in its favor in the amount of 
$2,887,594.24.  Regarding the amount of the attorney fees, 
Bradley asserted that the Insurance Company was made aware that 
the cost of defense work was approaching $1 million when it 
filed its reply to the Insurance Company's summary judgment 
motion and detailed some of the work done in defense of Bradley 
in an affidavit from Bradley's attorney.  Bradley also argued 
that the Insurance Company waived any right to contest the 
amount by failing to request additional information until after 
summary judgment was awarded to the defendants. 
No. 
01-2432   
 
36 
 
¶71 For the foregoing reasons, we reverse the decision of 
the court of appeals and remand the issue of the reasonableness 
of the attorney fees to the circuit court.  
By the Court.—The decision of the court of appeals is 
reversed and the issue of the reasonableness of the attorney 
fees is remanded. 
 
 
 
 
No. 
01-2432   
 
 
 
1