Title: Paul Abraham v. General Casualty Company of Wisconsin

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
95-2918 
 
 
Complete Title 
of Case: 
 
 
Paul Abraham, 
 
Plaintiff-Appellant, 
 
v. 
General Casualty Company of Wisconsin, 
 
Defendant-Respondent. 
 
 
ON CERTIFICATION FROM THE COURT OF APPEALS 
 
 
Opinion Filed: 
April 17, 1998 
Submitted on Briefs: 
 
Oral Argument: 
November 5, 1997 
 
 
Source of APPEAL 
 
COURT: 
Circuit 
 
COUNTY: 
LaCrosse 
 
JUDGE: 
Dennis G. Montabon 
 
 
JUSTICES: 
 
Concurred: 
Bradley, J., concurs (opinion filed) 
 
 
Abrahamson, C.J. and Geske, J., join 
 
Dissented: 
 
 
Not Participating:  
 
 
ATTORNEYS: 
For the plaintiff-appellant there were briefs (in 
the Court of Appeals) by James R. Koby, John H. Schroth, and 
Parke O'Flaherty, Ltd., LaCrosse and oral argument by James R. 
Koby. 
 
 
For the defendant-respondent there was a brief 
(in the Court of Appeals) by Michael W. Gill, Paul E. Guttormsson 
and Hale, Skemp, Hanson & Skemp, LaCrosse and oral argument by 
Michael W. Gill. 
 
No. 95-2918 
 
1 
 
NOTICE 
This opinion is subject to further editing and 
modification.  The final version will appear in 
the bound volume of the official reports. 
 
 
No. 95-2918 
 
STATE OF WISCONSIN               :        
        
 
 
 
 
IN SUPREME COURT 
 
 
Paul Abraham,  
 
          Plaintiff-Appellant, 
 
     v. 
 
General Casualty Company of Wisconsin,  
 
          Defendant-Respondent.  
FILED 
 
APR 17, 1998 
 
Marilyn L. Graves 
Clerk of Supreme Court 
Madison, WI 
 
 
 
 
 
APPEAL from a judgment of the Circuit Court for La Crosse 
County, Dennis G. Montabon, Judge.  Reversed and cause remanded. 
¶1 
JON P. WILCOX, J.   This case is before the court on 
certification from the court of appeals following an order of 
the Circuit Court for La Crosse County, Dennis G. Montabon, 
Judge, which dismissed the appellant Paul Abraham's ("Abraham") 
complaint for failure to file his cause of action within the 
applicable statute of limitations.  Abraham appealed. 
¶2 
On certification, we consider whether Abraham's action 
for breach of contract is a "foreign cause of action" under 
Wisconsin's borrowing statute, Wis. Stat. § 893.07 (1993-94).1  
                     
1 All future references to Wis. Stats. are to the 1993-94 
version of the statutes unless otherwise indicated. 
Wis. Stat. § 893.07 provides: 
Application of foreign statutes of limitation.  (1) If 
an action is brought in this state on a foreign cause 
of action and the foreign period of limitation which 
No. 95-2918 
 
2 
We hold that Abraham's cause of action is not "foreign" because 
the final significant event giving rise to his suable claim—the 
alleged breach of contract by the respondent General Casualty 
Company of Wisconsin ("General Casualty")—occurred within the 
state of Wisconsin.  Therefore, we conclude that Abraham was not 
required to file his action within the foreign jurisdiction's 
applicable statute of limitations, Fla. Stat. ch. 95.11(2)(b) 
(1994).2  Rather, we hold that Wisconsin's six-year statute of 
limitations for actions sounding in contract, Wis. Stat. 
§ 893.43,3 applies to Abraham's claim to render it timely.  
                                                                  
applies has expired, no action may be maintained in 
this state. 
 
(2) If an action is brought in this state on a 
foreign cause of action and the foreign period of 
limitation which applies to that action has not 
expired, 
but 
the 
applicable 
Wisconsin 
period of 
limitation has expired, no action may be maintained in 
this state. 
 
Although this decision encompasses the application of both 
subsections to causes of action sounding in contract, we note 
that this case emanates from the application of § 893.07(1) 
alone. 
2 Fla. Stat. ch. 95.11 (1994) provides in relevant part: 
Limitations other than for the recovery of real 
property.—Actions other than for recovery of real 
property shall be commenced as follows: 
. . . 
(2) WITHIN FIVE YEARS.— 
. . . 
(b) A legal or equitable action on a contract, 
obligation, 
or 
liability 
founded 
on 
a 
written 
instrument. 
3 Wis. Stat. § 893.43 provides: 
Action on contract.  An action upon any contract, 
obligation or liability, express or implied, including 
No. 95-2918 
 
3 
Accordingly, we reverse the order of the circuit court which 
dismissed Abraham's cause of action as untimely. 
¶3 
The relevant facts are not in dispute.  In September 
1988, following his completion of graduate studies at the 
University of Wisconsin-La Crosse, Abraham commenced employment 
as a cardiac therapist intern at Lee Memorial Hospital in Fort 
Myers, Florida.  On October 4, 1988, Abraham was struck and 
injured by an automobile while riding a bicycle near Fort Myers. 
 As a result of injuries sustained in the accident, he was 
admitted to Lee Memorial Hospital and was hospitalized there for 
a period of 17 days. 
¶4 
At the time of the accident, Abraham was insured under 
a policy for underinsured automobile insurance issued by General 
Casualty, an insurance company licensed to do business in 
Wisconsin and with its principal place of business in Wisconsin, 
with a limit of $100,000 per person and $300,000 per accident.  
Pursuant to this policy, General Casualty agreed to pay 
underinsured motorist coverage only after the limits of any 
                                                                  
an action to recover fees for professional services, 
except 
those 
mentioned 
in 
s. 
893.40, 
shall 
be 
commenced within 6 years after the cause of action 
accrues or be barred. 
 
Because we conclude that Abraham's cause of action was not 
"foreign," it is unnecessary to reach the secondary question 
that is presented on this appeal: assuming that Florida's five-
year statute of limitations applies, whether that time period 
commences as of the date of injury—which would render Abraham's 
action untimely—or as of the date of breach, which would make 
the action timely. 
No. 95-2918 
 
4 
applicable liability policy had been exhausted by payment of 
judgment or settlement. 
¶5 
In 1989, Abraham initiated settlement negotiations 
with State Farm Insurance Company ("State Farm"), the insurer 
for the driver of the automobile involved in the accident.  On 
March 22, 1990, Abraham notified General Casualty that State 
Farm had offered its liability policy limits of $25,000 to 
resolve its liability.  Because Abraham's claim for injuries 
allegedly exceeded $300,000, Abraham also notified General 
Casualty that it was his intention to pursue underinsured 
motorist benefits as provided by General Casualty's policy. 
¶6 
On September 25, 
1990, 
Abraham notified General 
Casualty by letter of his intention both to accept State Farm's 
offer to settle for the full amount of State Farm's liability 
policy limits, as well as to seek no-fault liability benefits 
from State Farm.  By that same correspondence, Abraham asked 
General Casualty to pay State Farm's liability policy limits and 
the no-fault benefits he sought as a result of the accident. 
¶7 
By letter dated October 8, 1990, General Casualty 
refused to pay State Farm's policy limits and granted its 
permission for Abraham to accept the policy limits provided by 
State Farm.  Subsequently, General Casualty refused to pay the 
underinsured motorist benefits requested by Abraham, leading 
Abraham to commence the present action on September 30, 1994. 
¶8 
In this action, Abraham sought a judgment declaring 
that General Casualty's policy provided underinsured motorist 
coverage to Abraham, and an order requiring General Casualty to 
No. 95-2918 
 
5 
arbitrate in good faith pursuant to Wis. Stat. § 788.03.  
General Casualty moved to dismiss on grounds that the applicable 
statute of limitations had expired.  Specifically, General 
Casualty alleged that Abraham's lawsuit was a "foreign cause of 
action" within the meaning of Wisconsin's borrowing statute, 
Wis. Stat. § 893.07(1), and that Florida's five-year statute of 
limitations for actions upon contract should therefore apply to 
render Abraham's suit untimely.  See Fla. Stat. ch. 95.11(2)(b) 
(1994); see also State Farm Mut. Auto. Ins. Co. v. Kilbreath, 
419 So. 2d 632 (Fla. 1982) (holding that Florida statute of 
limitations commences on the date of the accident in an action 
under an uninsured/underinsured motorist insurance policy). 
¶9 
Abraham responded by asserting that his cause of 
action was not "foreign" within the meaning of Wis. Stat. 
§ 893.07.  Rather, Abraham argued that his action was a 
Wisconsin 
contract 
claim 
because 
Wisconsin 
had 
the 
most 
significant contacts with the insurance contract between the 
Wisconsin insured and the Wisconsin insurer. 
¶10 On September 21, 1995, the circuit court granted 
General Casualty's motion to dismiss, holding that Abraham's 
lawsuit was a "foreign cause of action" because the parties' 
most significant contacts involving the contract were with the 
state of Florida.  See Decision and Order at 6 ("If it were not 
for the Florida accident, Abraham's present cause of action 
would be nonexistent.").  Further, the circuit court held that 
the five-year limitation period commenced on the date of the 
accident because Abraham had a claim against General Casualty 
No. 95-2918 
 
6 
that was presently enforceable as of that date.  Therefore, the 
circuit court dismissed Abraham's action as untimely under 
Wisconsin's borrowing statute and the five-year Florida statute 
of limitations.  Abraham appealed from the circuit court's 
order. 
I. 
¶11 Today we must determine how to apply Wis. Stat. 
§ 893.07 to cases in which the underlying cause of action sounds 
in contract.  Before proceeding to this question of first 
impression, we must first determine whether § 893.07 applies to 
contract actions.  There being no explicit reference to contract 
actions in § 893.07, we look outside the statute to determine 
the legislature's intent.  See Odd S.-G. v. Carolyn S.-G., 194 
Wis. 2d 365, 371, 533 N.W.2d 794 (1995).  An examination of the 
legislative history of that provision as well as its purpose 
reveals that the borrowing statute does apply to contract 
actions. 
¶12 The predecessor statute to Wis. Stat. § 893.07(1) was 
Wis. Stat. § 893.205(1) (1977).  That provision provided in 
relevant part: 
 
But no action to recover damages for injuries to the 
person, received without this state, shall be brought 
in any court in this state when such action is barred 
by any statute of limitations of actions of the state 
or county in which such injury was received . . . . 
A plain reading of the predecessor borrowing statute suggests 
that it was intended to apply only to personal injury actions. 
No. 95-2918 
 
7 
¶13 However, the current version of the borrowing statute, 
as amended in 1979, replaces the phrase "action to recover 
damages for injuries to the person" with the more broadly 
phrased 
"foreign 
cause 
of 
action." 
 
We 
interpret 
this 
substitution of a specific phrase for a more general one to 
indicate the legislature's intent to apply Wisconsin's borrowing 
statute beyond the narrow context of personal injury cases to 
causes of action similar to the case at bar. 
¶14 Moreover, application of the borrowing statute to 
contract 
actions 
would 
be 
consistent 
with 
our 
stated 
understanding of the legislature's basis for enacting Wis. Stat. 
§ 893.07.  In Guertin v. Harbour Assurance Co., 141 Wis. 2d 622, 
631-32, 415 N.W.2d 831 (1987), we indicated: 
 
The manifest intent of the legislature in enacting 
this borrowing statute was to adopt the shortest 
possible limitation period for actions litigated in 
this state potentially subject to more than one 
statute of limitations.  The policies advanced by such 
a statute include the reduction of forum shopping, the 
prevention of stale claims, the expedient litigation 
of 
controverted 
matters, 
and 
the 
avoidance 
of 
uncertainty in assessing the timeliness of bringing an 
action in this state without the necessity of a court 
hearing . . . . 
The same concerns are present regardless of whether the cause of 
action sounds in tort or contract. 
¶15 Accordingly, because the amended language of the 
borrowing statute indicates the legislature's intent to broaden 
application of the statute, and because application of the 
statute to causes of action sounding in contract comports with 
our understanding of the purposes of the statute, Wis. Stat. 
No. 95-2918 
 
8 
§ 893.07(1) can be interpreted to govern contract actions.  See, 
e.g., McMahon v. Pennsylvania Life Ins. Co., 891 F.2d 1251 (7th 
Cir. 1989); Johnson v. Deltadynamics, Inc., 813 F.2d 944, 946 
(7th Cir. 1987). 
II. 
¶16 Having determined that Wis. Stat. § 893.07 applies to 
causes of action sounding in contract, we now turn to the facts 
of this case in order to determine the proper application of the 
borrowing statute to contract claims.  Our review of questions 
of law involving the application of a statute to a particular 
set of facts is de novo.  Therefore, we examine this issue 
independently of the circuit court's conclusion of law and 
without deference to that court's reasoning.  See Guertin, 141 
Wis. 2d at 627-28. 
¶17 Prior to analyzing the application of Wis. Stat. 
§ 893.07 to contract actions, we first examine Wisconsin 
jurisprudence relating to the borrowing statute when the 
underlying cause of action sounds in tort.  Although General 
Casualty characterizes this litigation as "a torts case under a 
contracts veneer," we do not interpret its choice of words to 
advance 
the 
argument 
that 
Abraham's 
action 
to 
recover 
underinsured motorist benefits actually sounds in tort.  Rather, 
General Casualty appears to emphasize the unique nature of this 
lawsuit—one in which the claim sounds in contract, but "arise[s] 
from and remain[s] intertwined with underlying torts"—in order 
to have the bright-line test for identifying a "foreign cause of 
No. 95-2918 
 
9 
action" in tort cases applied here.4  Therefore, we proceed first 
to examine the test that has been established for cases sounding 
in tort, and second, to determine whether that same test should 
be applied to causes of action arising in contract. 
A. 
¶18 This court has previously interpreted the phrase 
"foreign cause of action" as it is used in Wis. Stat. § 893.07. 
 See Guertin, 141 Wis. 2d 622.  In Guertin, a truck driver 
brought an action in Wisconsin alleging negligence and strict 
liability in tort to recover for personal injuries sustained in 
the state of Illinois when he fell from the fuel tank of the 
semi-tractor he was employed to drive.  See id. at 625.  Several 
of the defendants moved to dismiss Guertin's complaint, claiming 
that his cause of action was "foreign," and therefore barred 
under § 893.07 by an Illinois two-year statute of limitations 
for personal injuries.  See id. at 625-26. 
¶19 To determine whether Guertin's lawsuit was a "foreign 
cause of action" within the meaning of Wis. Stat. § 893.07, we 
were faced with two possible meanings of the phrase: a cause of 
action which existed because of significant contacts with 
another jurisdiction—frequently referred to as the "significant 
contacts" or "center of gravity" test, see Wilcox v. Wilcox, 26 
Wis. 2d 617, 635, 133 N.W.2d 408 (1965)—or an action where the 
                     
4 That General Casualty does not intend to argue that 
Abraham's action sounds in tort is apparent from the fact that 
General Casualty requests this court to apply Florida's statute 
of limitations for contract actions to Abraham's claim.  See 
Resp. Brief at 14; Fla. Stat. ch. 95.11(2)(b) (1994).  
No. 95-2918 
 
10
plaintiff's injury arises outside the forum state.  See Guertin, 
141 Wis. 2d at 628.  Because we concluded that the legislature 
intended the phrase "foreign cause of action" to be synonymous 
with actions "'for injuries to the person, received without this 
state,'" id. at 629-30 (quoting former borrowing statute, Wis. 
Stat. § 893.205(1) (1977)), we adopted the latter interpretation 
of § 893.07.  See id. at 632; see also Scott v. First State Ins. 
Co., 155 Wis. 2d 608, 613, 456 N.W.2d 152 (1990) (adhering to 
Guertin's interpretation of § 893.07).5 
¶20 Therefore, 
the 
place 
of 
the 
tortious 
injury 
(hereinafter "place of injury test") is the decisive factor for 
causes of action sounding in tort: if a party is injured outside 
the state of Wisconsin, the injured's claim in tort is a 
"foreign cause of action."  Once a cause of action is determined 
to be "foreign," Wis. Stat. § 893.07 "adopts as Wisconsin law 
                     
5 In Guertin, we based our interpretation of Wis. Stat. 
§ 893.07(1) on a Judicial Committee Note which indicated that 
"[t]he previous provisions of ch. 893 are found in the recreated 
chapter in the same form that they previously existed or are 
redrafted only for greater clarity and ease of application 
except as otherwise noted."  As we concluded in that case, this 
language indicates that the creation of the amended borrowing 
statute was not intended to alter the test applied by the court 
to personal injury actions.  However, as the McMahon court 
noted, "a different question [is] presented . . . when a case 
involve[s] a contract rather than a tort . . . ."  McMahon v. 
Pennsylvania Life Ins. Co., 891 F.2d 1251, 1257 (7th Cir. 1989) 
(referring to Johnson v. Deltadynamics, Inc., 813 F.2d 944, 946 
(7th Cir. 1987)).  Accordingly, Guertin's interpretation of the 
legislative history applies only to the test utilized by the 
court in a personal injury "foreign cause of action" under 
§ 893.07(1) and should not be considered dispositive of contract 
cases arising under that same statute. 
No. 95-2918 
 
11
either the law of the state where the cause of action arose or 
Wisconsin's law, whichever is shorter."  Guertin, 141 Wis. 2d at 
631. 
B. 
¶21 Having previously interpreted Wis. Stat. § 893.07's 
use of the phrase "foreign cause of action" to mean any action 
where the plaintiff's injury arises outside the forum state, we 
need only decide how this interpretation comports with causes of 
action sounding in contract.  As the United States Court of 
Appeals for the Seventh Circuit has noted, this task may be more 
difficult "in the case of a dispute over a contract, whose 
'location' is not easily pinned to a particular state if, for 
example, as is common, the contract is negotiated in one state, 
signed in another, and performed in a third."  Johnson, 813 F.2d 
at 946. 
¶22 Moreover, as the district court pointed out in 
Terranova v. Terranova, 883 F. Supp. 1273, 1280 (W.D. Wis. 
1995), the application of borrowing statutes to causes of action 
sounding in contract is "an area of conflicts law generally 
regarded as 'fraught with ambiguity.'" (quoting John W. Ester, 
Borrowing Statutes of Limitation and Conflict of Laws, 15 U. 
Fla. L. Rev. 33, 48 (1962)).  The truth of this proposition is 
made evident by the circuit court's rationale in this case and 
the parties' arguments on appeal. 
¶23 The circuit court applied the "center of gravity" test 
to conclude that Abraham's lawsuit was a "foreign cause of 
action" because the parties' most significant contacts involving 
No. 95-2918 
 
12
the insurance contract were with the state of Florida.  In doing 
so, the court followed the decision of the eastern district in 
Office Supply Co. v. Basic/Four Corp., 538 F. Supp. 776, 781-82 
(E.D. Wis. 1982), which employed the "center of gravity" test in 
a contract action. 
¶24 Abraham also argues that the "center of gravity" test 
is the proper approach, but seeks a different result under that 
rule.  He contends that Wisconsin, not Florida, has the most 
significant contacts with the underinsured motorist contract in 
this case because Abraham is a Wisconsin insured, General 
Casualty is a Wisconsin insurer with an agent located in 
Wisconsin, and because the insurance contract was negotiated and 
issued in Wisconsin.  In the alternative, Abraham argues that a 
court could apply an altogether different test—one which 
pinpoints the location of the final significant event giving 
rise to the action.  This test was employed by the western 
district in Terranova, 883 F. Supp. at 1280-81, and will be 
discussed in more detail in Part II(C). 
¶25 Finally, General Casualty offers yet another view on 
the proper application of Wis. Stat. § 893.07 to contract 
actions.  General Casualty disagrees with the circuit court's 
use of the "center of gravity" test, arguing that it subverts 
the public policy behind § 893.07 to employ such an analysis.  
Instead, General Casualty would have this court adopt the "place 
of injury" test solely for those contract claims which are 
intertwined with or necessitate an underlying tort, such as the 
uninsured/underinsured motorist claim involved here.  Under this 
No. 95-2918 
 
13
interpretation—one 
which 
General 
Casualty 
contends 
will 
establish a "bright-line rule" that would "provide litigants 
with certainty"—the place of the tortious injury would be 
dispositive when applying § 893.07 to contract claims that rely 
upon an underlying tort. 
¶26 We wade into this morass of arguments and precedent by 
examining first the "place of injury" test in a contract 
setting.  As an initial matter, it is difficult to see how the 
adoption of a limited "place of injury" test, solely for those 
contract actions that are based upon an underlying tort, will 
establish a bright-line rule for this area of conflicts law.  To 
the contrary, this approach will almost certainly necessitate 
further litigation and future decisions by this court to 
determine the proper standard for contract actions that remain 
wholly separate from tort law. 
¶27 More importantly, however, to focus exclusively on the 
underlying tortious injury—in this case the automobile/bicycle 
accident in Florida—would be to ignore the indispensable fact 
that Abraham's claim arises from the alleged breach of an 
underinsured motorist insurance policy.  See Sahloff v. Western 
Casualty & Surety Co., 45 Wis. 2d 60, 70, 171 N.W.2d 914 (1969) 
("We think it clear the action by an insured against his insurer 
under the uninsured [or underinsured] motorist endorsement is an 
action on the policy and sounds in contract although in order to 
recover the insured must prove the negligence of an uninsured 
motorist."). 
No. 95-2918 
 
14
¶28 In other words, Abraham's "injury," for purposes of 
this case, arose not from the car accident in Florida, but from 
the alleged breach of contract by General Casualty.  Although it 
is clear that Abraham's claim against General Casualty would not 
have come to fruition without the injury in Florida, it is also 
true that his claim would not have arisen without the subsequent 
alleged breach of contract—in this case, General Casualty's 
choice to withhold underinsured motorist benefits.  Accordingly, 
we decline to adopt a limited version of the "place of injury" 
test for contract claims of this sort. 
¶29 Given the complex nature of this area of conflicts 
law, the circuit court's use of the "center of gravity" or 
"significant 
contacts" 
test 
is 
certainly 
understandable.  
However, we also disagree with this approach.  We have 
previously rejected this option in a tort setting, see Guertin, 
141 Wis. 2d at 626-32, and we do so again today in the contracts 
context.  In declining to employ a significant contacts analysis 
in Guertin, we were persuaded by the reasoning of the United 
States Court of Appeals for the Seventh Circuit in Johnson, 813 
F.2d 944, which, like Guertin, held that the place of injury 
controls the determination whether a cause of action in tort is 
"foreign" for purposes of Wisconsin's borrowing statute.  The 
Seventh Circuit stated: 
 
Indeed, [Wis. Stat. § 893.07] would add little or 
nothing to the common law of Wisconsin if by the use 
of the expression "foreign cause of action" the 
legislators meant to require the courts to go through 
their usual conflict of laws analysis in deciding 
whether the foreign period of limitations is a bar. 
No. 95-2918 
 
15
Id. at 946. 
¶30 We find this statement to be equally applicable to 
actions sounding in contract.  Not only is the "center of 
gravity" test better left for the resolution of substantive 
conflict of law questions, see Guertin, 141 Wis. 2d at 630-31, 
but adopting such a method would produce "the incongruous result 
of 
the 
Wisconsin 
legislature 
making 
a 
choice-of-law 
determination through enactment of section 893.07, only to be 
followed by the court's independent analysis based on the 
center-of-gravity approach to determine if the action falls 
within the 'foreign cause of action' parameters of the statute." 
 Donna Mae Endreson, Comment, Wisconsin's Borrowing Statute: Did 
We Shortchange Ourselves?, 70 Marq. L. Rev. 120, 128 (1986).  
See also McMahon, 891 F.2d at 1258 (criticizing use of the 
"center of gravity" test in a contract action).6 
¶31 Considering that one of the foremost policies advanced 
by a borrowing statute such as Wis. Stat. § 893.07 is the 
"avoidance of uncertainty in assessing the timeliness of 
bringing an action in this state without the necessity of a 
                     
6 As mentioned, McMahon, 891 F.2d 1251, also interpreted 
Wisconsin's borrowing statute in the context of a contract 
dispute.  See id. at 1257-58.  However, McMahon presented a 
unique situation that is not before this court.  There, the 
United States Court of Appeals for the Seventh Circuit found the 
plaintiff's contract action for a breach of the implied duty of 
good faith and fair dealing in his employment contract to be 
"foreign" because the foreign jurisdiction was "the only 
jurisdiction involved [that recognized] the covenant of good 
faith and fair dealing as a separate theory of liability in 
employment contract cases."  Id. at 1259.  This situation is not 
present in this case. 
No. 95-2918 
 
16
court hearing to make such a determination, thereby preserving 
scarce judicial resources," Guertin, 141 Wis. 2d at 631-32, such 
an approach would be particularly inappropriate.  Therefore, we 
also decline to adopt the "center of gravity" test, as employed 
by the circuit court in this case, and by the eastern district 
in Office Supply, 538 F. Supp. at 781-82, for actions sounding 
in contract. 
C. 
¶32 Instead, we are persuaded by the reasoning employed in 
Terranova, 883 F. Supp. at 1280-81.  In Terranova, litigation 
ensued 
between 
family 
members 
after 
their 
family-owned 
corporation was split into a Wisconsin corporation and a 
California corporation.  The split resulted in a number of 
complex transactions between the two groups, including an 
agreement by contract to indemnify and hold each other harmless 
from and against fifty percent (50%) of the liabilities arising 
out of the activities of the companies prior to the breakup.  
See id. at 1276.  After the state of California performed a use 
tax audit of the California corporation relating to equipment 
purchased prior to the split, the California plaintiffs filed 
suit in Wisconsin seeking indemnification from the Wisconsin 
defendants for the tax liabilities. 
¶33 The defendants argued that the plaintiffs' contract 
claims were "foreign" causes of action such that California's 
statute of limitations for actions sounding in contract, shorter 
than the six-year period allowed in Wisconsin, would apply to 
render the plaintiffs' claims untimely.  See id. at 1275.  After 
No. 95-2918 
 
17
rejecting the analysis set forth by the eastern district in 
Office Supply, 538 F. Supp. 776, and distinguishing the case 
from McMahon, 891 F.2d 1251, the Terranova court employed the 
analysis set forth in Mack Trucks, Inc. v. Bendix-Westinghouse 
Automotive Air Brake Co., 372 F.2d 18 (3d Cir. 1966), to 
determine whether the plaintiffs' contract claims were "foreign" 
within the meaning of Wis. Stat. § 893.07. 
¶34 In 
Mack 
Trucks, 
also 
involving 
a 
claim 
for 
indemnification, the United States Court of Appeals for the 
Third Circuit held that the cause of action "arises where as 
well as when the final significant event that is essential to a 
suable claim occurs."  Id. at 20 (citations omitted).  As the 
Terranova court stated: 
 
In Guertin, the [Wisconsin Supreme] court made the 
logical choice of the "place of injury" as the 
determinative factor whether a particular tort is a 
"foreign cause of action" because "[a] tort is not 
complete till the victim is injured." Johnson, 813 
F.2d at 945-46.  In the contracts context, the 
parallel event is the breach, the "final significant 
event that is essential to a suable claim."  Mack 
Trucks, 372 F.2d at 20. 
Terranova, 883 F. Supp. at 1280-81.  Because the alleged breach 
occurred 
in 
Wisconsin, 
the 
plaintiffs' 
claims 
were 
not 
"foreign," and were timely filed under Wisconsin's six-year 
statute of limitations.  See id. at 1281-82. 
¶35 We agree with the reasoning of the Terranova court, 
and hereby adopt its standard for all causes of action sounding 
in contract.  This standard is not only consistent with 
Guertin's interpretation of Wis. Stat. § 893.07, but also 
No. 95-2918 
 
18
clarifies how that interpretation applies to causes of action 
sounding in contract where it is frequently difficult to attach 
the 
plaintiff's 
contractual 
"injury" 
to 
any 
one 
locale.  
Therefore, a claim sounding in contract is a "foreign cause of 
action" when the final significant event giving rise to a suable 
claim occurs outside the state of Wisconsin.7  Resolution of the 
issue in this case turns on a determination of where the final 
significant 
event 
giving 
rise 
to 
Abraham's 
suable 
claim 
occurred. 
III. 
¶36 In this case, the alleged breach of contract occurred 
in Wisconsin when General Casualty denied the underinsured 
motorist benefits requested by Abraham.  Therefore, if the 
alleged breach is the last significant event giving rise to 
Abraham's suable claim, his cause of action would not be 
                     
7 We recognize that in certain factual situations not 
present here, even this test would not be without ambiguity.  
However, as with any judicial standard, no one "test" can give 
complete certainty to future litigants.  On balance, we conclude 
that this is the most appropriate standard for determining 
whether a cause of action sounding in contract is "foreign" for 
purposes of Wisconsin's borrowing statute. 
The concurrence would have us go further, in order to 
establish an all-pervasive standard for determining where the 
breach occurs in all contract actions that might come before 
this court, or any other Wisconsin court, in the future.  See 
generally concurrence.  To this end, the concurrence enlightens 
the court with a number of examples, poses a series of 
extraneous questions, and labels this opinion as "vague," 
"inaccurate" and potentially "inconsistent"; yet the concurrence 
fails to provide a "standard" of its own.  See id.  We expressly 
decline the invitation of the concurrence to address the various 
scenarios that might arise in future cases. 
No. 95-2918 
 
19
"foreign" within the meaning of Wis. Stat. § 893.07.  However, 
at oral argument General Casualty asserted that the final 
significant event giving rise to a suable claim was the accident 
in Florida.  According to General Casualty, nothing occurred 
after the accident which would be a "suable event." 
¶37 Apparently consistent with this argument is General 
Casualty's contention that no breach of contract has occurred in 
this case.  Counsel for General Casualty asserts that the mere 
denial of an initial request for underinsured motorist benefits 
does not constitute a breach.  Rather, a breach occurs when the 
insurer denies benefits to the insured despite a determination 
that the insured is truly entitled to a benefit.  We find these 
arguments to have little merit for purposes of this case. 
¶38 General Casualty confuses the ultimate merits of a 
breach of contract argument with a sufficient allegation of 
breach.  Abraham has a "suable claim" for breach of contract 
when his request for benefits is denied by General Casualty, 
regardless of whether he eventually succeeds on the merits of 
that claim.  More importantly, Abraham would not have had a 
cause of action against General Casualty absent the insurer's 
initial denial of benefits.  Common sense dictates that Abraham 
would not file, and indeed could not sustain, a lawsuit against 
his insurer for denial of benefits unless the insurer had first 
denied his request for coverage.  Therefore, we conclude that 
the last significant event giving rise to Abraham's suable claim 
was not the accident in Florida, but rather the alleged breach 
of contract by General Casualty in Wisconsin. 
No. 95-2918 
 
20
IV. 
¶39 Because Abraham's breach of contract claim is not a 
"foreign cause of action," the borrowing statute does not apply 
to his claim, and the timeliness of his action will be 
determined by Wisconsin's six-year period for commencing an 
action sounding in contract.  See Wis. Stat. § 893.43. 
¶40 As mentioned above, the alleged breach of contract by 
General Casualty occurred at the earliest in October 1990.  
Abraham subsequently filed his claim on September 30, 1994.  
Therefore, Abraham's action falls well within the six-year 
period provided under Wisconsin law, see CLL Assocs. Ltd. 
Partnership v. Arrowhead Pacific Corp., 174 Wis. 2d 604, 607, 
497 N.W.2d 115 (1993) (holding that a contract cause of action 
under Wis. Stat. § 893.43 accrues at the moment the contract is 
breached), and his cause of action for breach of contract may 
proceed accordingly. 
By the Court.— The order of the circuit court is reversed, 
and the cause is remanded to the circuit court for further 
proceedings consistent with this opinion. 
95-2918.awb 
 
1 
¶41 ANN WALSH BRADLEY, J. (Concurring).  Although I join 
the opinion of the court, I write separately because the 
majority neglects to provide adequate guidance to courts and 
litigants in the application of the "last significant event" 
test.  
¶42  This case presents the court with the question of 
whether a Wisconsin insurance company's refusal to pay benefits 
arising from a Wisconsin insured's personal injury in the State 
of Florida may constitute a "foreign cause of action" pursuant 
to Wis. Stat. § 893.07 (1993-94), requiring application of 
Florida law.  In answering this inquiry, the majority adopts, 
without significant explanation, the "last significant event" 
test set forth in Terranova v. Terranova, 883 F. Supp. 1273 
(W.D. Wis. 1995), for determining the proper state's statute of 
limitations laws to be applied to the contractual dispute. 
¶43 Unfortunately 
for 
future 
litigants, 
the 
"last 
significant event" inquiry is easily resolved under the facts of 
this case.  General Casualty is a Wisconsin corporation.  
Abraham is a Wisconsin resident.  The negotiation and purchase 
of the insurance contract took place entirely within Wisconsin. 
 Similarly, General Casualty's decision to refuse to pay 
Abraham's claim and the subsequent conveyance of that decision 
to Abraham also occurred in Wisconsin.  Thus, every significant 
factor that might be considered determinative in a "last 
significant event" test argues in favor of applying Wisconsin 
law to this case. 
95-2918.awb 
 
2 
¶44 Subsequent cases, however, may not present themselves 
in such an accommodating manner.  In adopting the "last 
significant event" test based on these homogenous facts, the 
majority not only fails to provide our courts with a cogent set 
of rules or standards with which to evaluate breach of contract 
cases that more directly implicate the interstate sale of 
insurance contracts or the mobile nature of purchasers, but also 
labels any such inquiry "extraneous."  I fail to see how 
providing our courts with sufficient guidance in applying a test 
which the majority adopts as the substantive law of this state 
is 
in 
any 
way 
an 
"extraneous" 
inquiry. 
 
A 
series 
of 
hypotheticals may be illustrative of my concern. 
¶45 First, a Minnesota insurance company sells a policy to 
a Wisconsin resident and later denies her claim in writing via a 
letter mailed from Minnesota.  Second, the same Minnesota 
insurance company instead mails its decision to deny coverage to 
an agent in Wisconsin, who then copies the letter to the 
Wisconsin insured.  Third, a Wisconsin insurance company sells a 
policy in Wisconsin to a Minnesota resident who travels through 
the state.  The Wisconsin company then denies a claim by calling 
the Minnesota insured when he again passes through the state of 
Wisconsin. 
¶46 In each of these scenarios we are left with the same 
question:  if the breach of contract is the last significant 
event, as the majority and Terranova indicate, where does that 
breach occur?  Does it occur in the state where the party in 
breach is located?  Does it occur in the state wherein the 
95-2918.awb 
 
3 
injured party resides?  Does it occur in the state where the 
insurance contract was negotiated or purchased?  Does it occur 
in the state from which the breach is communicated?  Any one of 
these inquiries might be the dispositive question in an attempt 
to determine in which state the breach of contract or "last 
significant event" occurred.  Yet, our courts are left to 
speculate. 
¶47 Alternatively, it 
is 
possible that 
the majority 
intends our courts to consider each of the questions above and 
then reach a decision based on the totality of circumstances.  
If this is indeed the intent of the majority, such reasoning is 
inconsistent with the majority's rejection of the "center of 
gravity" test which employs a similar totality of circumstances 
approach. 
¶48 Finally, I note that the majority explicitly rejected 
application of the "place of injury" and "center of gravity" 
tests on the grounds that such tests would overuse scarce 
judicial resources and "almost certainly necessitate further 
litigation and future decisions by this court to determine the 
proper standard for contract actions that remain wholly separate 
from tort law."  Majority Op. at 13.  Yet, the majority 
acknowledges in relation to the "last significant event" test 
that "in certain factual situations not present here, even this 
test would not be without ambiguity."  The majority attempts to 
justify its failure to resolve this ambiguity by then noting, 
"[h]owever, as with any judicial standard, no one "test" can 
95-2918.awb 
 
4 
give complete certainty to future litigants."  Majority Op. at 
18, fn.7   
¶49 This contention is simply inaccurate.  The majority's 
failure to lay out the parameters of the "last significant 
event" test in contract actions does not mean that bright-line 
rules, or even a set of standards that might appropriately be 
applied, do not exist.  Rather, it indicates a failure by the 
majority to consider the future ramifications of its vague 
opinion on our courts and litigants. 
¶50 I agree with the majority's conclusion that Wis. Stat. 
§ 893.07(1) governs contract actions and with its adoption of 
the "last significant event" test.  However, the majority errs 
when it assumes such a conclusion without examination or 
explanation and when it fails to set out sufficient standards of 
application that can assist our courts and guide expectations of 
potential litigants.  Accordingly, I concur. 
¶51 I am authorized to state that Chief Justice Shirley S. 
Abrahamson and Justice Janine P. Geske join this opinion.