Title: Marks v. Houston Cas. Co.

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2016 WI 53 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2013AP2756 
COMPLETE TITLE: 
David M. Marks, 
          Plaintiff-Appellant-Cross-Respondent-
Petitioner, 
     v. 
Houston Casualty Company, 
          Defendant-Respondent-Cross-Appellant, 
Bedford Underwriters, Ltd., 
          Defendant-Respondent. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
(Reported at 363 Wis. 2d 505, 866 N.W.2d 393) 
(Ct. App. 2015 – Published) 
PDC No: 2015 WI App 44 
 
 
OPINION FILED: 
June 30, 2016 
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
March 16, 2016 
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit 
 
COUNTY: 
Milwaukee 
 
JUDGE: 
Richard J. Sankovitz 
 
 
 
JUSTICES: 
 
 
CONCURRED: 
BRADLEY, A. W., J. and ABRAHAMSON, J. concur 
(Opinion filed). 
BRADLEY, R. G., J. concurs (Opinion filed). 
 
DISSENTED: 
      
 
NOT PARTICIPATING:          
 
 
 
ATTORNEYS: 
 
For 
the 
plaintiff-appellant-cross-respondent-petitioner, 
there were briefs by Jon E. Fredrickson, Brian T. Fahl, Aaron H. 
Aizenberg, Stuart J. Check, and Kravit, Hovel & Krawczyk, S.C., 
Milwaukee, and oral argument by Jon E. Fredrickson. 
 
 
For the defendant-respondent-cross-appellant, there was a 
brief by John D. Finerty, Adam E. Witkov, and Michael Best & 
Friedrich LLP, Milwaukee and Aidan M. McCormack, Robert C. 
 
 
2 
Santoro, and DLA Piper LLC (US), New York.  Oral argument by 
Aidan M. McCormack. 
 
There was an amicus curiae brief by James A. Friedman, Todd 
G. Smith, Linda S. Schmidt, and Godfrey & Kahn, S.C., Madison on 
behalf of Wisconsin Insurance Alliance and American Insurance 
Association.  Oral argument by James A. Friedman. 
 
 
 
 
 
 
2016 WI 53
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2013AP2756 
(L.C. No. 
2009CV18145) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
David M. Marks, 
 
          Plaintiff-Appellant-Cross-Respondent- 
          Petitioner, 
 
     v. 
 
Houston Casualty Company, 
 
          Defendant-Respondent-Cross-Appellant, 
 
Bedford Underwriters, Ltd., 
 
          Defendant-Respondent. 
FILED 
 
JUN 30,2016 
 
Diane M. Fremgen 
Clerk of Supreme Court 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed.   
 
¶1 
ANNETTE KINGSLAND ZIEGLER, J.   This is a review of a 
published decision of the court of appeals, Marks v. Houston 
Casualty Co., 2015 WI App 44, 363 Wis. 2d 505, 866 N.W.2d 393, 
which affirmed the Milwaukee County circuit court's1 grant of 
                                                 
1 The Honorable Richard J. Sankovitz presided. 
No. 
2013AP2756   
 
2 
 
summary judgment in favor of Houston Casualty Company ("Houston 
Casualty") and Bedford Underwriters, Ltd.2 
¶2 
In July of 2009, trustee David Marks ("Marks") asked 
his professional liability insurer, Houston Casualty, to defend 
him in six lawsuits filed in 2007, 2008, and 2009 in five 
different states.  Houston Casualty informed Marks that it had 
no duty to defend him in any of those lawsuits, and Marks then 
brought suit against Houston Casualty.  Both the circuit court 
and the court of appeals agreed with Houston Casualty that a 
comparison of Marks' policy to the allegations in the complaints 
against Marks established that Houston Casualty had no duty to 
defend Marks.  
¶3 
We conclude that the complaints and counterclaim 
against Marks do not allege facts which, if proven, would 
constitute claims covered under the insurance policy Marks 
obtained from Houston Casualty.  Houston Casualty therefore did 
not breach its duty to defend Marks when it declined to defend 
him in the six lawsuits at issue.  Consequently, we affirm the 
decision of the court of appeals. 
I.  FACTUAL AND PROCEDURAL BACKGROUND 
¶4 
David Marks is the trustee of two trusts: the 
Irrevocable 
Children's 
Trust 
("ICT") 
and 
the 
Irrevocable 
                                                 
2 Although 
involved 
in 
these 
proceedings, 
Bedford 
Underwriters did not file a separate brief in this case and 
instead joins the positions taken by Houston Casualty.  For 
simplicity, Bedford Underwriters will generally not be mentioned 
in this opinion. 
No. 
2013AP2756   
 
3 
 
Children's Trust No. 2 ("ICT2").  At all times relevant to this 
dispute, ICT and ICT2 owned a controlling interest in a company 
known as Titan Global Holdings, Inc. ("Titan").3  From 2007 to 
2009, a number of lawsuits involving Marks and Titan were filed 
throughout the country.  Because the outcome of this case turns 
on the allegations contained in the five complaints and one set 
of counterclaims filed against Marks, we will set forth the 
contents of these documents in some detail. 
¶5 
On or about December 21, 2007, Oblio Telecom, Inc. 
("Oblio") filed a lawsuit against Hawaii Global Exchange, Inc. 
("Hawaii Global") in the United States District Court for the 
Northern District of Texas (the "Hawaii Global action").4  On 
April 7, 2008, Hawaii Global filed a counterclaim against Oblio, 
Titan, 
Frank 
Crivello 
("Crivello"), 
Marks, 
Bryan 
Chance 
("Chance"), and Kurt Jensen ("Jensen").  The counterclaim 
described Marks as a "citizen of the State of Wisconsin" and "a 
principal shareholder and equitable owner of Titan" and asserted 
one count of conspiracy to commit fraud against the counterclaim 
                                                 
3 One of the complaints filed against Titan (discussed 
infra) describes Titan as a "high-growth diversified holding 
company with a dynamic portfolio of companies engaged in 
emerging telecommunications markets and advanced technologies."  
A holding company is a "company formed to control other 
companies, 
usu. 
confining 
its 
role 
to 
owning 
stock 
and 
supervising 
management." 
 
Holding 
company, 
Black's 
Law 
Dictionary 339 (10th ed. 2014). 
4 Houston Casualty supplied this date, which is not in the 
record.  Marks does not dispute the fact and it is not relevant 
to the disposition of this case. 
No. 
2013AP2756   
 
4 
 
defendants.5  On October 24, 2008, Hawaii Global filed amended 
counterclaims against Titan, Oblio, Marks, Chance, and Jensen.6 
¶6 
On October 28, 2008, the Professional Liability Errors 
& Omissions Insurance Policy at issue in this case ("the policy" 
or "Marks' policy"), issued by Houston Casualty to Marks, took 
effect.  The policy's expiration date was October 28, 2009.  The 
policy provided coverage for  
any 
Loss 
and 
Claim 
Expenses 
in 
excess 
of 
the 
Deductible 
amount 
and 
subject 
to 
the 
Limit 
of 
Liability as the Insured acting in the profession 
described in Item 3 of the Declarations shall become 
legally obligated to pay for Claim or Claims first 
made against the Insured during the Policy Period by 
reason of any Wrongful Act by an Insured provided 
always that the Insured has no knowledge of such 
Wrongful Act prior to the Inception Date of this 
                                                 
5 The allegations in this lawsuit concern a business 
relationship 
between 
Hawaii 
Global 
and 
the 
counterclaim 
defendants apparently gone sour.  According to the complaint, 
Hawaii Global purchased prepaid phone cards from Oblio and Titan 
and sold them to distributors, retailers, and individual users.  
Hawaii Global alleges that the counterclaim defendants conspired 
to defraud Hawaii Global, among others, by "inducing and 
extorting" them to purchase phone cards with "no intention to 
deliver the promised service."  Further, the counterclaim 
defendants allegedly  
conspired to use Titan and Oblio and other corporate 
shells to perpetrate a fraud upon Oblio's former 
distributors, including [Hawaii Global], with the 
intention of bankrupting them and eliminating them 
from the marketplace so that it could usurp their 
business for the benefit of a newly formed entity, 
Planet Direct, Inc.  
6 These counterclaims are not in the record.  The parties do 
not argue that these claims affect our analysis, so we do not 
address them.   
No. 
2013AP2756   
 
5 
 
Policy and further provided that such Wrongful Act 
took place subsequent to the Retroactive Date set 
forth in Item 8 of the Declarations. 
¶7 
"Loss" is defined in the policy to mean, in part, "a 
monetary judgment, award or settlement for damages including an 
award by a court of reasonable attorney's fees and costs to a 
party making [a] Claim."  "Claim" is defined in the policy to 
mean "a demand received by the Insured for compensation of 
damages, 
including 
the 
service 
of 
suit . . . against 
the 
Insured."  "Claim Expenses" is defined in the policy to mean, in 
part:  
(1) fees charged by an attorney designated by the 
Company and (2) all other fees, costs or expenses 
incurred in the investigation, adjustment, defense and 
appeal of a Claim if incurred by the Company or an 
attorney designated by the Company, or by the Insureds 
with the written consent of the Company. 
"Wrongful Act" is defined in the policy to mean "any actual or 
alleged error or omission or breach of duty committed or alleged 
to 
have 
been 
committed 
or 
for 
failure 
to 
render 
such 
professional services as are customarily rendered in the 
profession of the Insured as stated in Item 3 of the 
Declarations." 
¶8 
"Item 3 of the Declarations" lists Marks' profession 
as follows: "[s]olely in the performance of services as the 
Trustee of the Irrevocable Children's Trust (ICT), and/or 
Irrevocable Children's Trust No. 2 (ICT2), for a fee."  Relevant 
to this appeal, the policy contained the following exclusions:  
This Policy does not apply either directly or 
indirectly to any Claim and Claim Expenses: 
No. 
2013AP2756   
 
6 
 
a) 
Based 
upon 
or 
arising 
out 
of 
any 
dishonest, criminal, fraudulent, malicious or 
intentional Wrongful Acts, errors or omissions 
committed by or at the direction of the Insured. 
b) 
For 
liability 
arising 
out 
of 
the 
Insured's services and/or capacity as: 
1) 
an 
officer, 
director, 
partner, 
trustee, 
or 
employee 
of 
a 
business 
enterprise not named in the Declarations or 
a 
charitable 
organization 
or 
pension, 
welfare, 
profit 
sharing, 
mutual 
or 
investment fund or trust; . . . . 
¶9 
Finally, Endorsement Number 10 of the policy reads in 
part as follows: 
c) Defense, Investigation, and Settlement of 
Claim 
1) With respect to the insurance afforded by this 
Policy, the Company shall have the right and duty to 
defend any Claim brought against the Insured alleging 
a covered Wrongful Act. 
¶10 On December 23, 2008, ILDN West, LLC ("ILDN") filed a 
lawsuit against Titan, Oblio, Titan Communications, Inc. ("Titan 
Communications"), Planet Direct, Inc. ("Planet Direct"), Marks, 
Crivello, and Does 1-50 in the Superior Court of the State of 
California for the County of Los Angeles (the "ILDN action").  
The complaint described Marks as "an individual residing at all 
material times in or around Dallas, Texas," and stated that 
"[a]t all times relevant hereto, Marks was a Chairman of Titan 
and represented Oblio, Titan Communications and Planet Direct." 
The complaint asserted seven causes of action: breach of 
contract against Titan, Titan Communications, and Planet Direct; 
breach of contract against Oblio, Titan Communications, and 
No. 
2013AP2756   
 
7 
 
Planet Direct; breach of guaranty against Titan; fraud against 
Titan, Marks, and Crivello; negligent misrepresentation against 
Titan, Marks, and Crivello; quantum meruit/unjust enrichment 
against Titan, Oblio, Titan Communications, and Planet Direct; 
and "account stated"7 against Titan, Oblio, Titan Communications, 
and Planet Direct.8 
¶11 On February 2, 2009, George L. Miller, Chapter 7 
Trustee of the Estate of USA Detergents, Inc. ("USAD"), filed a 
lawsuit 
against 
Greystone 
Business 
Credit 
II, 
LLC. 
("Greystone"), GBC Funding, L.L.C. ("GBC"), Titan, Frank Orlando 
("Orlando"), Chance, R. Scott Hensell ("Hensell"), Marks, Titan 
PCB West, Inc., n/k/a Titan Electronics, Inc. ("Titan PCB 
West"), Titan PCB East, Inc., n/k/a Titan East, Inc. ("Titan PCB 
East"), Oblio, Titan Wireless Communications, Inc. ("Titan 
Wireless"), 
StartTalk 
Inc. 
("StartTalk"), 
Pinless, 
Inc. 
("Pinless"), Appalachian Oil Company ("Appalachian"), Appco-Ky, 
Inc. ("Appco"), and Crivello in the United States Bankruptcy 
Court for the District of Delaware (the "USAD action").  The 
                                                 
7 "Generally, an account stated is defined as an agreement 
between parties who have had previous transactions of a monetary 
character that all the items of the account representing those 
transactions, and the balance struck, are correct, together with 
a promise, express or implied, for the payment of that balance."  
1A C.J.S. Account Stated § 1 (2016). 
8 The ILDN action concerns debts allegedly due ILDN by the 
defendants in that suit for telecommunications services provided 
to the defendants by ILDN, and allegedly false representations 
made by certain of the defendants to ILDN regarding payment of 
those debts. 
No. 
2013AP2756   
 
8 
 
complaint described Marks as "a citizen of Wisconsin," "Chairman 
of the Board of Directors of USAD at some point after August 1, 
2007," and, "[a]t all material times hereto," "Chairman of Titan 
and a Member of Crivello Group[, LLC]."9  
¶12 The complaint asserted nine counts: to avoid and 
recover preferential transfers pursuant to 11 U.S.C. §§ 547 and 
550 against Greystone and GBC; to avoid and recover preferential 
transfers 
pursuant 
to 
11 
U.S.C. 
§§ 547 
and 
550 
against 
Greystone, GBC, Titan, Titan PCB West, Titan PCB East, Oblio, 
Titan Wireless, StartTalk, Pinless, Appalachian, and Appco; 
disallowance of all claims pursuant to 11 U.S.C. § 502(d) 
against Greystone and GBC; objection to proof of claim pursuant 
to 11 U.S.C. § 502 against Greystone and GBC; equitable 
subordination pursuant to 11 U.S.C. § 510(c) against Greystone 
and GBC; breach of fiduciary duty against Orlando, Chance, 
Hensell, and Marks; aiding and abetting breach of fiduciary duty 
against Greystone, GBC, Titan, and Crivello; civil conspiracy 
                                                 
9 The 
allegations 
in 
this 
lawsuit 
concern 
Titan's 
acquisition of a controlling interest in USAD, "a manufacturer 
and distributor of value priced and mid-priced laundry care 
products, household cleaners, personal care items, candles and 
air fresheners."  The complaints allege that Titan's operation 
of USAD enriched the defendants at the expense of USAD and its 
creditors.  More specifically, the complaint alleges that the 
defendants should have either recapitalized or liquidated USAD 
"for 
the 
benefit 
of 
all 
creditors," 
but 
"chose 
instead 
wrongfully to perpetuate the USAD entity" for the defendants' 
own benefit.  Additionally, the complaint alleges that the 
defendants 
"orchestrated 
and/or 
compelled 
the 
payment 
of 
preferential transfers for their own benefit at the expense of 
USAD and its creditors."  
No. 
2013AP2756   
 
9 
 
against Greystone, GBC, Titan, Orlando, Chance, Hensell, Marks, 
and Crivello; and for an accounting against Greystone and GBC.  
¶13 On or about May 4, 2009, Phillip L. Near filed a 
lawsuit against Titan, Crivello, Marks, Chance, Greystone, and 
Goldberg, 
Kohn, 
Bell, 
Black, 
Rosenbloom 
& 
Moritz, 
Ltd. 
("Goldberg Kohn") in the United States District Court for the 
District of Kansas (the "Near action").  The complaint described 
Marks as "a resident of Wisconsin," "the Chairman of Titan and, 
through one or more of his business entities, a shareholder of 
Titan."  The complaint also stated that Marks "claims to be a 
director of Crescent."10  The complaint asserted ten counts: 
fraud against Titan, Crivello, Marks, and Chance; fraudulent 
inducement against Titan, Crivello, Marks, and Chance; negligent 
misrepresentation against Titan, Crivello, Marks, and Chance; 
fraud by silence against Titan, Crivello, Marks, and Chance; 
breach of contract against Titan; conversion against Titan, 
Crivello, Marks, and Chance; conversion against Greystone; 
conversion against Goldberg Kohn; civil conspiracy against all 
                                                 
10 "Crescent" refers to Crescent Fuels, Inc. and its 
subsidiaries, including Crescent Oil Company, Inc., Crescent 
Corporation, Crescent Stores Corporation, Crescent Holdings, 
Inc., and Crescent Realty, Inc. 
No. 
2013AP2756   
 
10 
 
the defendants; and breach of fiduciary duty against Goldberg 
Kohn.11 
¶14 On July 1, 2009, Lanny Houillion filed a lawsuit 
against Chance, Hensell, Oblio, Titan, and Marks in the County 
Court of Dallas (the "Houillion action").  The complaint 
described Marks as "an individual and Chairman of the Board for 
[Titan]."12  The complaint asserted three causes of action 
against the defendants: breach of contract; negligence; and 
fraud.13 
¶15 On July 10, 2009, Appalachian filed a lawsuit against 
Titan, Marks, Chance, and Hensell, "individually, and in their 
capacities as directors of [Appalachian]," in the United States 
Bankruptcy Court for the Eastern District of Tennessee (the 
"Appalachian action").  The complaint described Marks as "an 
individual residing in Milwaukee, Wisconsin," "a member of 
[Appalachian's] Board of Directors at all times relevant to this 
                                                 
11 The Near action alleges that Near "lost his company, his 
life savings, and his business reputation by the repugnant, 
fraudulent, and unlawful conduct of the Defendants."  Near 
contends that Titan acquired an interest in Crescent, a company 
involved in the fuel distribution industry, "looted" Crescent 
for "millions of dollars," terminated Near, who was once 
president and majority shareholder of Crescent Fuels, Inc., and 
left him liable to other entities for millions of dollars in 
personal guarantees.  
12 The complaint is titled "Plaintiff's First Amended 
Original Petition."  No other petition is in the record. 
13 The Houillion action involves an alleged breach of a 
commercial lease agreement between the defendants in that case 
and Houillion. 
No. 
2013AP2756   
 
11 
 
Complaint," and "an 'Insider' of [Appalachian] as defined in 
§ 101(31) of the Bankruptcy Code."  
¶16 The complaint asserted six counts: to avoid fraudulent 
transfers pursuant to 11 U.S.C. § 548(a)(1)(B) and recover 
fraudulent transfers pursuant to 11 U.S.C. § 550 against Titan; 
to 
avoid 
fraudulent 
transfers 
pursuant 
to 
11 
U.S.C. 
§ 548(a)(1)(A) and recover fraudulent transfers pursuant to 11 
U.S.C. § 550 against Titan; to avoid fraudulent conveyances 
pursuant to 11 U.S.C. § 544 and applicable state law and to 
recover fraudulent conveyances pursuant to 11 U.S.C. § 550 
against Titan; to avoid preferential transfers pursuant to 11 
U.S.C. § 547 and recover preferential transfers pursuant to 11 
U.S.C. § 550 against Titan; to avoid wrongful distributions to 
shareholders pursuant to T.C.A. § 48-16-401(C) [of the Tennessee 
Code] against Titan; and to recover wrongful distributions to 
shareholders pursuant to T.C.A. § 48-18-304 [of the Tennessee 
Code] against the director defendants.14 
¶17 Except as detailed below with regard to certain 
supplemental counterclaims in the Hawaii Global action, the 
parties do not point us to any language in the complaints that 
                                                 
14 The Appalachian action involves allegations that Titan 
became the 100 percent shareholder of Appalachian, after which 
Titan began "to cause [Appalachian] to transfer large amounts of 
cash to Titan for its own use . . . with full knowledge that 
[Appalachian] (i) was insolvent and (ii) did not have sufficient 
capital to operate."  
No. 
2013AP2756   
 
12 
 
reference ICT, ICT2, or Marks' position as trustee of ICT and 
ICT2. 
¶18 On July 28, 2009, Marks provided notice of each 
lawsuit——the Hawaii Global action, the ILDN action, the USAD 
action, 
the 
Near 
action, 
the 
Houillion 
action, 
and 
the 
Appalachian action——to Houston Casualty.  In letters to Marks 
dated July 30, 2009, Professional Indemnity Agency, Inc. 
("Professional Indemnity") acknowledged receipt of the six 
claims on behalf of Houston Casualty and stated that it was 
"presently in the process of establishing a claim file and 
reviewing the information provided."  
¶19 On October 23, 2009, Marks filed a complaint against 
Houston Casualty in Milwaukee County circuit court alleging, 
among other things, breach of Houston Casualty's duty to defend 
Marks in each of the six lawsuits discussed and denial of Marks' 
six claims in bad faith.15    
¶20 On October 27, 2009, Hawaii Global and TransPac 
Telecom, Inc. ("TransPac")——parties in the earliest of the 
lawsuits discussed above, the Hawaii Global action——filed a 
"Motion 
for 
Leave 
to 
File 
Supplemental 
and 
Amended 
Counterclaims."  
¶21 On October 28, 2009, Marks notified Houston Casualty 
of Hawaii Global and TransPac's motion.  The same day, Marks' 
policy expired.  
                                                 
15 Neither party argues that it was improper to bring this 
suit in Wisconsin. 
No. 
2013AP2756   
 
13 
 
¶22 In letters dated November 4, 2009, Professional 
Indemnity informed Marks on behalf of Houston Casualty that 
Houston Casualty had "determined that it has no obligation under 
the Policy either to defend or indemnify you . . . in connection 
with" any of the six lawsuits.  Although the letters provided 
multiple reasons for Houston's refusal to defend or indemnify 
Marks, two are most relevant to this appeal: (1) the alleged 
conduct giving rise to the claims did "not arise out of the 
performance of services by the Insured as the Trustee of the 
Irrevocable Children's Trust and/or Irrevocable Children's Trust 
No. 2, for a fee"; and (2) exclusion b)1) (the "business 
enterprise exclusion") excluded any indemnity obligation for 
liability arising out of Marks' services and/or capacity as an 
officer, director, partner, trustee, or employee of a business 
enterprise not named in the declarations of the policy.16  
                                                 
16 The policy at issue in this appeal is numbered H708-
15868.  When Marks notified Houston Casualty of the lawsuits 
against him, he listed the applicable policy as policy H708-
15868.  Five out of the six letters sent from Houston Casualty 
to Marks listed the applicable policy as policy H708-15868.  
However, the letter tied to the Hawaii Global action lists the 
applicable policy as policy H707-16515.  This is the number of a 
previous policy Marks had obtained from Houston Casualty and 
which had a policy term of October 28, 2007, to October 28, 
2008.  
(continued) 
No. 
2013AP2756   
 
14 
 
¶23 On November 16, 2009, Houston Casualty filed a notice 
of removal to the United States District Court for the Eastern 
District of Wisconsin.  
¶24 On November 17, 2009, Marks voluntarily dismissed his 
case and again filed a complaint against Houston Casualty in 
Milwaukee County circuit court alleging, among other things, 
breach of Houston Casualty's duty to defend Marks in each of the 
six lawsuits discussed and denial of Marks' six claims in bad 
faith.  This second complaint, unlike the first, named Bedford 
Underwriters as a defendant. 
¶25 On December 18, 2009, Houston Casualty again removed 
the case to federal court.  On March 22, 2010, the case was 
remanded to state court.  
¶26 On January 21, 2010, the United States District Court 
for the Northern District of Texas granted Hawaii Global and 
TransPac's "Motion for Leave to File Supplemental and Amended 
                                                                                                                                                             
The reason for this discrepancy is likely because Hawaii 
Global filed its counterclaim on April 7, 2008, a date within 
the policy term of policy H707-16515, not policy H708-15868.  
However, Marks' complaint against Houston Casualty discusses 
policy No. H708-15868, arguing that "[t]here is at least one 
claim within the four corners of each and every one of the 
complaints in the six lawsuits that arguably and/or actually 
triggers coverage under the Policy" (the "Policy" being policy 
H708-15868).  The complaint notes only in passing that "[t]he 
Policy was a renewal of policy H707-16515."  Unfortunately, the 
parties do not discuss these seemingly significant facts.  
We will address Marks' arguments as he has made them.  We 
note that the letter from Houston Casualty denying coverage for 
the Hawaii Global action provides the same two reasons for the 
denial as are set out above. 
No. 
2013AP2756   
 
15 
 
Counterclaims."  On January 25, 2010, Hawaii Global and TransPac 
Telecom, Inc. filed supplemental counterclaims against  
[Crivello], both individually and as settlor, de facto 
trustee and de facto beneficiary of the Irrevocable 
Children's Trust and Irrevocable Children's Trust 2, 
[Marks], both individually and as trustee of the 
Irrevocable 
Children's 
Trust 
and 
Irrevocable 
Children's Trust 2, . . . the Irrevocable Children's 
Trust[,] . . . the 
Irrevocable 
Children's 
Trust 
2 [,] . . . Crivello 
Group 
LLC[,] . . . Phoenix 
Investors LLC[,] . . . and Farwell Equity Partners 
LLC.  
The counterclaims collectively refer to these latter five 
entities as the "Crivello Family Interests," and assert that 
they are "a group of trusts, limited liability companies and/or 
corporations owned or controlled by Crivello and managed by 
Crivello and Marks." 
¶27 The supplemental counterclaims described Marks as "a 
citizen of the State of Wisconsin" and further stated: 
According to Titan's 10-K for the fiscal year ending 
August 31, 2008,  
Mr. 
Marks 
has 
served 
as 
Trustee 
of 
Irrevocable Children's Trust and Irrevocable 
Children's 
Trust 
No. 
2 
since 
1994.  
Irrevocable Children's Trust and Irrevocable 
Children's Trust No. 2 currently have an 
ownership 
or 
investment 
interest 
in 
commercial properties, private residences, 
natural resources, telecommunications, and 
technology companies, and other business and 
investment ventures.  Mr. Marks has the 
responsibility in overseeing all investments 
by 
Irrevocable 
Children's 
Trust 
and 
Irrevocable Children's Trust No. 2 with 
responsibilities beginning at acquisition 
and continuing through ownership.  Mr. Marks 
generally acts in the capacity of officer or 
director for all of the operating companies 
No. 
2013AP2756   
 
16 
 
that are vehicles for investments by the 
Trusts 
and 
is 
involved 
in 
strategic 
planning, and major decision-making.   
In addition to his individual capacity, Marks is being 
added in a representative capacity as ostensible 
trustee and chairman of Crivello-controlled alter ego 
entities alleged herein. 
¶28 Hawaii Global alleges, among other things, that "[i]n 
their various capacities as settlor, de facto trustee, trustee, 
de facto beneficiaries, shareholders, board members and/or 
officers, Crivello and Marks have caused the Crivello Family 
Interests to intentionally misappropriate and shield assets 
obtained through fraud and artifice." 
¶29 The counterclaims asserted three causes of action: 
alter 
ego; 
RICO 
conspiracy 
against 
the 
Crivello 
Family 
Interests; and fraudulent transfer against all counterclaim 
defendants.17 
¶30 On October 28, 2010, Marks filed an amended complaint. 
¶31 On February 8, 2013, Houston Casualty and Marks filed 
motions for summary judgment in Marks' lawsuit against Houston 
Casualty in Milwaukee County circuit court.  Marks made four 
arguments relevant to this appeal.  First, he argued that 
although his policy covered only liability arising out of his 
                                                 
17 Although only one count had been asserted in Hawaii 
Global's original counterclaim, the supplemental counterclaims 
began at count three.  The filing, does, however, refer to 
"claims 
and 
allegations 
set 
forth 
in . . . the 
Complaint 
transferred from Hawaii [Global] . . . and consolidated in this 
action."  The parties do not discuss any such transferred 
complaint, so we do not address it.  See also supra, ¶5 & n.6. 
No. 
2013AP2756   
 
17 
 
"performance of services as the Trustee of the Irrevocable 
Children's Trust (ICT), and/or Irrevocable Children's Trust No. 
2 (ICT2), for a fee," the language in Marks' policy does not 
"define the scope of services that are covered when performed by 
the trustee."  More specifically, "Marks was sued in all six 
lawsuits because he was a director of Titan, and . . . Marks was 
on the board of directors of Titan only by virtue of the trusts' 
controlling investment position in Titan."  Second, Marks 
claimed he was sued in the Hawaii Global action "because of his 
position as trustee of ICT and ICT2."  Third, Marks argued that, 
in determining whether an insurer has breached its duty to 
defend an insured, a court may not consider exclusions or 
limiting language in the insurance policy at issue if the 
insurer had earlier rejected the insured's tender of defense 
without having coverage determined by a court.  Fourth, Marks 
asserted that the business enterprise exclusion in the Houston 
Casualty policy rendered the entire policy illusory, because it 
excluded coverage for liability arising out of Marks' "services 
and/or 
capacity 
as . . . an . . . trustee . . . of 
a 
. . . trust." 
¶32 On October 4, 2013, the circuit court issued an order 
granting Houston Casualty's motion for summary judgment and 
denying Marks' motion for summary judgment.  The circuit court 
determined 
that 
Marks' 
policy, 
"when 
construed 
liberally, . . . can be read to cover the work of a trustee when 
working as an officer or director of a corporation in which the 
trust corpus is [invested]."  Further, the court found that the 
No. 
2013AP2756   
 
18 
 
"allegations of the six lawsuits against Mr. Marks as presented 
within the four corners of the pleadings fall within the scope 
of the insuring [clause]."  However, the court also found that 
the business enterprise exclusion did not render the insurance 
policy illusory, "is enforceable[,] and does preclude coverage 
for the claims in this case."  Thus, the court concluded that 
Houston Casualty had not breached any duty to defend Marks.  On 
October 31, 2013, the court dismissed the case.  
¶33 On December 13, 2013, Marks filed a notice of appeal.  
On January 10, 2014, Houston Casualty filed a notice of cross-
appeal.  On May 7, 2015, the court of appeals "affirm[ed] the 
circuit court's determination that Houston Casualty did not have 
a duty to defend Marks."  Marks, 363 Wis. 2d 505, ¶1.  Like the 
circuit court, the court of appeals concluded that the business 
enterprise exclusion in the Houston Casualty policy precluded 
coverage and did not render the policy illusory.  Id., ¶¶17-27.18  
The court thus found it unnecessary to consider Houston 
Casualty's argument that its policy did not even provide an 
initial grant of coverage.  Id., ¶1. 
¶34 On July 6, 2015, Marks filed a petition for review in 
this court.  On September 15, 2015, we granted the petition. 
                                                 
18 As we will discuss below, the court of appeals tussled 
with some of its prior cases before arriving at its conclusion. 
See, e.g., Marks v. Houston Cas. Co., 2015 WI App 44, ¶10, 363 
Wis. 2d 505, 866 N.W.2d 393.  
No. 
2013AP2756   
 
19 
 
II.  STANDARD OF REVIEW 
¶35 "We review summary judgment rulings independently, 
applying the well-established standards set forth in Wis. Stat. 
§ 802.08" (2013-14).19  Hirschhorn v. Auto-Owners Ins. Co., 2012 
WI 20, ¶20, 338 Wis. 2d 761, 809 N.W.2d 529 (citations omitted).  
Specifically, summary judgment is granted if "the pleadings, 
depositions, answers to interrogatories, and admissions on file, 
together with the affidavits, if any, show that there is no 
genuine issue as to any material fact and that the moving party 
is entitled to a judgment as a matter of law."  § 802.08(2); 
Hirschhorn, 338 Wis. 2d 761, ¶20 (citation omitted). 
¶36 In this case we interpret an insurance contract.  "The 
interpretation of an insurance contract is a question of law, 
which this court reviews de novo."  Plastics Eng'g Co. v. 
Liberty Mut. Ins. Co., 2009 WI 13, ¶27, 315 Wis. 2d 556, 759 
N.W.2d 613 (citation omitted).  We also examine the "four-
corners rule," which is relevant in cases where an insured 
argues that its insurer breached its duty to defend the insured.  
See Olson v. Farrar, 2012 WI 3, ¶33, 338 Wis. 2d 215, 809 
N.W.2d 1.  "The proper application of the four-corners rule 
presents a question of law, which we decide independently of the 
determinations rendered by the circuit court and the court of 
appeals."  Id., ¶22 (determining whether four-corners rule 
applies). 
                                                 
19 All subsequent references to the Wisconsin Statutes are 
to the 2013-14 version unless otherwise indicated. 
No. 
2013AP2756   
 
20 
 
III.  ANALYSIS 
 
A.  General Principles Regarding an Insurer's  
Contractual Duty to Defend Its Insured 
¶37 Liability 
insurance 
policies 
often 
contractually 
obligate an insurer both to defend and to indemnify its insured.  
Maxwell v. Hartford Union High Sch. Dist., 2012 WI 58, ¶53, 341 
Wis. 2d 238, 814 N.W.2d 484.  Generally speaking, what is meant 
when courts reference an insurer's "duty to defend" its insured 
is the insurer's "responsibility to defend the insured from all 
actions brought against the insured based on alleged facts or 
circumstances falling within the purview of coverage under the 
policy, regardless of the suit's validity or invalidity."  14 
Steven Plitt et al., Couch on Insurance § 200:1 (3d ed. 2015) 
(citations omitted).  An insurer's duty to indemnify its 
insured, in contrast, is the insurer's duty "to pay all covered 
claims and judgments against [its] insured."  Id. § 200:3 
(citations omitted).  
¶38 When an insurer receives a tender of defense from its 
insured, it "makes an initial determination about whether it 
will defend its insured."  Olson, 338 Wis. 2d 215, ¶33.  The 
insurer must make this determination carefully, because if it 
refuses to defend and is later found to have "breache[d] a duty 
to defend its insured, [it] is on the hook for all damages that 
result from that breach of its duty."  Maxwell, 341 Wis. 2d 238, 
¶54.20 
                                                 
20 See also infra, ¶63 n.29. 
No. 
2013AP2756   
 
21 
 
¶39 Both insurers in making this initial determination and 
courts in examining whether an insurer has breached its duty to 
defend its insured use the same analytical framework, known in 
Wisconsin 
as 
the 
"four-corners 
rule." 
 
See 
Olson, 
338 
Wis. 2d 215, ¶33.  The name derives from the fact that "[t]he 
duty to defend is triggered by the allegations contained within 
the four corners of the complaint" against the insured.  Estate 
of Sustache v. Am. Family Mut. Ins. Co., 2008 WI 87, ¶20, 311 
Wis. 2d 548, 
751 
N.W.2d 845 
(citations 
omitted). 
 
Put 
differently, "[w]hen a complaint alleges facts that, if proven, 
would constitute a covered claim, the insurer must appoint 
defense counsel for its insured without looking beyond the 
complaint's four corners."  Id., ¶27.  Thus, only two documents 
are germane in any four-corners analysis: the insurance policy 
and the complaint against the insured.  No examination of 
extrinsic facts or evidence takes place.  Fireman's Fund Ins. 
Co. of Wis. v. Bradley Corp., 2003 WI 33, ¶19, 261 Wis. 2d 4, 
660 N.W.2d 666.  
¶40 The 
four-corners 
rule 
is 
"well 
established" 
in 
Wisconsin, Fireman's Fund, 261 Wis. 2d 4, ¶18, and is set out in 
detail in Estate of Sustache:  
An insurer's duty to defend its insured is 
determined 
by 
comparing 
the 
allegations 
of 
the 
complaint to the terms of the insurance policy. . . .  
It is the nature of the alleged claim that is 
controlling, even though the suit may be groundless, 
false, or fraudulent. . . .  
Courts liberally construe the allegations in the 
complaint and assume all reasonable inferences.  This 
No. 
2013AP2756   
 
22 
 
rule tends to help an insured's demand for coverage.  
As usual, ambiguity in the coverage terms will be 
construed against the insurer.  This familiar rule of 
contract construction also helps the insured. 
In determining whether there is a duty to defend, 
the 
court 
first 
considers 
whether 
the 
insuring 
agreement makes an initial grant of coverage——i.e., 
whether the insurer has a duty to indemnify its 
insured——for the claims asserted.  If the court 
determines that the policy was not intended to cover 
the claims asserted, the inquiry ends. . . .  
Only after concluding that coverage exists does 
the court examine the policy's exclusions to determine 
whether they preclude coverage.  In other words, when 
a court determines that there is no coverage in the 
policy for the allegations in the complaint, it is not 
necessary to interpret the policy's exclusions. 
Estate 
of 
Sustache, 
311 
Wis. 2d 548, 
¶¶20-23 
(citations 
omitted).  We add to this summary that a consideration of 
exclusions 
in 
the 
insurance 
policy 
necessarily 
includes 
consideration of any exceptions to those exclusions.  See, e.g., 
Prof'l Office Bldgs., Inc. v. Royal Indem. Co., 145 Wis. 2d 573, 
578-79, 580-84, 427 N.W.2d 427 (Ct. App. 1998). 
¶41 Importantly, the four-corners rule generally protects 
the insured: "[W]ithout the four-corners rule, 'the duty to 
defend would often be empty. The insurance company could refuse 
to defend in the hope that the facts as they emerged in the 
litigation that its insured had asked it to defend would reveal 
that there was no coverage.'"  Olson, 338 Wis. 2d 215, ¶32 
(citation omitted).  Moreover, "an insurer may have a clear duty 
to defend a claim that is utterly specious because, if it were 
meritorious, it would be covered."  Fireman's Fund, 261 
Wis. 2d 4, ¶21.  One commentator notes: 
No. 
2013AP2756   
 
23 
 
The complaint test, literally applied, usually will 
preclude insurers from rejecting tenders of defense 
based on policy exclusions.  The reason is that most 
complaints 
simply 
allege 
that 
the 
insured 
was 
negligent and that bodily injury or property damage 
resulted.  These kinds of allegations almost always 
give rise to a duty to defend under the coverage 
clauses 
of 
standard 
liability 
policies. 
 
The 
applicability of an exclusion, however, is rarely 
obvious 
from 
the 
allegations 
in 
the 
complaint.  
Insurers 
often 
have 
to 
rely 
on 
investigation, 
discovery and other information not stated in the 
complaint to determine whether an exclusion applies.  
The complaint test, rigidly enforced, forbids that.  
If the allegations fall within the coverage clause and 
are not on their face excluded, then the company must 
defend or promptly take steps to resolve its duty to 
defend in court. 
Peter F. Mullaney, Liability Insurers' Duty to Defend, Wis. 
Law., at 10-11 (July 1995).21 
                                                 
21 When an insurer receives a tender of defense from its 
insured, it can proceed in several different ways.  See 
generally Sheila M. Sullivan et al., Anderson on Wisconsin 
Insurance Law § 7.54 (7th ed. 2015).  For instance, it can: (1) 
"deny the tender of defense and state the grounds for deciding 
that the complaint does not trigger any obligation to defend 
under the policy," id.; see Liebovich v. Minnesota Ins. Co., 
2008 WI 75, ¶55, 310 Wis. 2d 751, 751 N.W.2d 764; (2) "request a 
bifurcated trial on the issue of coverage while moving to stay 
proceedings on the merits of the liability action until the 
issue of coverage is resolved," Liebovich, 310 Wis. 2d 751, ¶55; 
(3) "provide a defense to the insured on the merits, under a 
reservation of rights, until the coverage issue is resolved," 
Estate of Sustache v. Am. Family Mut. Ins. Co., 2008 WI 87, ¶25, 
311 Wis. 2d 548, 751 N.W.2d 845; or (4) obtain a declaratory 
ruling, see Liebovich, 310 Wis. 2d 751, ¶55. 
(continued) 
No. 
2013AP2756   
 
24 
 
¶42 A number of other legal principles beneficial to the 
insured are built into any four-corners analysis, some of which 
were noted above: (1) allegations in the complaint are construed 
liberally and all reasonable inferences are assumed, Estate of 
Sustache, 311 Wis. 2d 548, ¶21; (2) ambiguity in the insurance 
policy is construed against the insurer, id.; and (3) "when an 
insurance policy provides coverage for even one claim made in a 
lawsuit, the insurer is obligated to defend the entire suit,"  
Fireman's Fund, 261 Wis. 2d 4, ¶21 (citation omitted).   
¶43 With this general framework before us, we now examine 
whether the five complaints and one set of counterclaims against 
                                                                                                                                                             
In the current case, Houston Casualty decided on the first 
of the approaches listed above: deny the tender of defense and 
explain why it was doing so.  When an "insurance company refuses 
to defend, it does so at its own peril."  Elliott v. Donahue, 
169 Wis. 2d 310, 321, 485 N.W.2d 403 (1992); accord, e.g., Olson 
v. Farrar, 2012 WI 3, ¶30, 338 Wis. 2d 215, 809 N.W.2d 1. As was 
explained earlier, "[t]he general rule is that where an insurer 
wrongfully refuses to defend on the grounds that the claim 
against the insured is not within the coverage of the policy, 
the insurer is guilty of a breach of contract which renders it 
liable to the insured for all damages that naturally flow from 
the breach."  Newhouse v. Citizens Sec. Mut. Ins. Co., 176 
Wis. 2d 824, 837, 501 N.W.2d 1 (1993) (emphasis added).  
Certain of our past cases have "strongly encourage[d]" 
insurers to avoid "unilateral[] refus[al]" to defend their 
insureds.  Liebovich, 310 Wis. 2d 751, ¶55.  But we also 
recognize that in some cases it may be obvious to insurers that 
they have no duty to defend their insureds based on a comparison 
of the insurance policy with the complaint at issue. Insurance 
companies are in the business of risk.  They are undoubtedly 
cognizant of the risk that inheres in denial of an insured's 
tender.  Sheila M. Sullivan et al., supra, § 7:54 ("To be sure, 
when an insurance company denies and does nothing, it takes a 
risk.  Insurance companies are aware of the risk . . . ."). 
No. 
2013AP2756   
 
25 
 
Marks allege facts that, if proven, would constitute a claim 
covered under Marks' professional liability insurance policy.  
If they do not, Houston Casualty did not breach its duty to 
defend Marks when it denied Marks' tender of defense. 
 
B.  Whether Houston Casualty Breached Its  
Duty to Defend Marks 
1.  Initial Coverage 
¶44 The four-corners rule dictates that we first examine 
whether Marks' policy provides an initial grant of coverage for 
the claims against Marks in the six lawsuits at issue.  See 
Estate of Sustache, 311 Wis. 2d 548, ¶22.  
¶45 As explained supra, Marks' policy provides coverage 
for  
any Loss and Claim Expenses . . . as the Insured 
acting in the profession described in Item 3 of the 
Declarations shall become legally obligated to pay for 
Claim or Claims first made against the Insured during 
the Policy Period by reason of any Wrongful Act by an 
Insured . . . . 
(Emphasis added.)  "Item 3 of the Declarations" in turn lists 
Marks' profession as follows: "[s]olely in the performance of 
services as the Trustee of the Irrevocable Children's Trust 
(ICT), and/or Irrevocable Children's Trust No. 2 (ICT2), for a 
fee."  And, finally, "Wrongful Act" is defined in the policy to 
mean "any actual or alleged error or omission or breach of duty 
committed or alleged to have been committed or for failure to 
render such professional services as are customarily rendered in 
the profession of the Insured as stated in Item 3 of the 
Declarations." 
No. 
2013AP2756   
 
26 
 
¶46 Taken as a whole, the policy essentially provides 
coverage for liability arising out of mistakes Marks makes in 
rendering services in his capacity as trustee of ICT and ICT2.  
Though it does not affect our analysis, we note that such a 
scope of coverage is consistent with the type of policy Marks 
purchased: 
professional 
liability 
errors 
and 
omissions 
insurance. 
An 
errors-and-omissions 
policy 
is 
professional-
liability 
insurance 
providing 
a 
specialized 
and 
limited 
type 
of 
coverage 
compared 
to 
general 
comprehensive insurance.  It is designed to insure 
members of a particular professional group from 
liability arising out of the special risk such as 
negligence, omissions, mistakes and errors inherent in 
the 
practice 
of 
the 
profession. . . .  
These 
professional-liability 
policies 
differ 
in 
detail 
depending upon the company which issues them and are 
generally called malpractice insurance when issued to 
members of the healing profession where the exposure 
is largely bodily injury and errors-and-omissions 
insurance where the risk is primarily that of damage 
to intangible property such as coverage for attorneys, 
insurance agents, and architects.  
Grieb v. Citizens Cas. Co. of New York, 33 Wis. 2d 552, 556-57, 
148 N.W.2d 103 (1967). 
¶47 The circuit court below found that Marks' policy 
provides an initial grant of coverage.  The court of appeals 
assumed without deciding that Marks' policy provides an initial 
grant of coverage, then moved to step two: determining whether 
any exclusions preclude coverage.  Marks, 363 Wis. 2d 505, ¶9.  
The court of appeals ultimately concluded that the business 
enterprise exclusion "precludes coverage when measured against 
the allegations in the complaints."  Id., ¶22.  We agree with 
No. 
2013AP2756   
 
27 
 
the court of appeals on both counts: we need not and do not 
decide whether Marks' policy provides an initial grant of 
coverage based on the allegations in the six lawsuits, because, 
as we will now explain, the business enterprise exclusion 
clearly establishes that Houston Casualty could have no possible 
duty to indemnify Marks, even if the allegations in the 
complaints turned out to be true.  See Fireman's Fund, 261 
Wis. 2d 4, ¶21.22  Thus, Houston Casualty did not breach its duty 
to defend Marks when it declined to defend him. 
2.  The Business Enterprise Exclusion 
¶48 The business enterprise exclusion in Marks' policy 
excludes coverage: 
b) 
For 
liability 
arising 
out 
of 
the 
Insured's services and/or capacity as: 
1) 
an 
officer, 
director, 
partner, 
trustee, 
or 
employee 
of 
a 
business 
enterprise not named in the Declarations or 
a 
charitable 
organization 
or 
pension, 
welfare, 
profit 
sharing, 
mutual 
or 
investment fund or trust . . . . 
¶49 For purposes of this case, what is important is that 
the exclusion unambiguously precludes coverage for Marks' 
activities as an officer or director of any business enterprise 
                                                 
22 We have significant doubts that Marks' policy provides 
even an initial grant of coverage in this case.  Were we to 
determine that Marks' policy does not provide an initial grant 
of coverage, however, our analysis would end and we might not 
reach the important issues set forth in Marks' petition for 
review.  
No. 
2013AP2756   
 
28 
 
not named in the declarations.23  The only entities even 
mentioned in the declarations are ICT and ICT2.24  
¶50 We now turn to the complaints.  Except for the 
supplemental counterclaims in the Hawaii Global actions, which 
we 
will 
examine 
momentarily, 
the 
claims 
against 
Marks 
characterize Marks as follows: a "citizen of the State of 
Wisconsin" and "a principal shareholder and equitable owner of 
Titan" (the Hawaii Global action); "an individual residing at 
                                                 
23 We refer to this exclusion as the "business enterprise 
exclusion" because it bears a resemblance to "a standard [type 
of] exclusion in lawyers' professional liability insurance 
policies" sometimes referred to as a business enterprise 
exclusion.  See, e.g., Am. Guarantee & Liab. Ins. Co. v. Timothy 
S. Keiter, P.A., 360 F.3d 13, 16-17 (1st Cir. 2004).  
At least with respect to lawyers' professional liability 
insurance policies,  
 
Some courts have explained that standard business 
enterprise exclusions have two purposes:  
1) 
"to 
prevent 
collusive 
suits 
whereby 
malpractice coverage could be used to shift a lawyer's 
business loss onto the malpractice carrier" and 2) to 
avoid 
the 
circumstance 
where 
an 
insured 
so 
intermingles his business relationships with his law 
practice that an insurance carrier incurs additional 
risk of having to cover the insured for legal 
malpractice 
claims 
relating 
to 
the 
conduct 
of 
business, rather than solely out of the professional 
practice. 
Id. at 17 (citation omitted). 
24 Marks points us to Black's Law Dictionary, which defines 
a "business enterprise" as "[a] for-profit company, business, or 
organization that provides financial, commercial, or industrial 
goods 
and 
services." 
 
Business 
Enterprise, 
Black's 
Law 
Dictionary 240 (10th ed. 2014). 
No. 
2013AP2756   
 
29 
 
all material times in or around Dallas, Texas," and "[a]t all 
times 
relevant 
hereto . . . a 
Chairman 
of 
Titan 
and 
represent[ative] [of] Oblio, Titan Communications and Planet 
Direct" (the ILDN action); "a citizen of Wisconsin," "Chairman 
of the Board of Directors of USAD at some point after August 1, 
2007," and, "at all material times hereto," "Chairman of Titan 
and a Member of Crivello Group[, LLC]" (the USAD action); "a 
resident of Wisconsin," "the Chairman of Titan," "through one or 
more of his business entities, a shareholder of Titan," and "a 
[putative] 
director 
of 
Crescent" 
(the 
Near 
action); 
"an 
individual and Chairman of the Board for [Titan]" (the Houillion 
action); and "an individual residing in Milwaukee, Wisconsin," 
"a 
member 
of 
[Appalachian's] 
Board 
of 
Directors 
at 
all 
[relevant] times," and "an 'Insider' of [Appalachian] as defined 
in § 101(31) of the Bankruptcy Code" (the Appalachian action). 
¶51 Conspicuously absent from these characterizations is 
any mention of Marks' position as trustee of ICT and ICT2.  In 
fact, the allegations in the complaints do not discuss ICT and 
ICT2 at all.  Instead, the various claims against Marks attack 
him in his capacity as an officer or director of Titan, a 
business enterprise not named in the declarations, as well as in 
his capacity as an officer or director of other business 
enterprises not named in the declarations.  And, quite simply, 
the business enterprise exclusion of Marks' policy makes clear 
that the policy does not provide coverage for Marks' liability 
as a director or officer of Titan or other business enterprises 
not mentioned in the policy's declarations.  The phrasing of the 
No. 
2013AP2756   
 
30 
 
business enterprise exclusion itself suggests how Marks could 
have obtained coverage for his work as director or officer of 
Titan: he could have bargained for and obtained a policy that 
"named" Titan "in [its] Declarations."  He did not do so, and 
may not now force Houston Casualty to participate in lawsuits 
not contemplated by the contract between it and Marks. 
¶52 We acknowledge that ICT and ICT2 owned a controlling 
interest in Titan.  Marks explains that "[i]n order to properly 
and effectively manage the trusts' significant investment in 
Titan, Marks accepted a seat on the Titan board of directors and 
assumed the role of chairman," and that "Marks' professional 
positions with Titan were solely by virtue of the trusts' 
controlling investments in Titan."  Even if true, these facts do 
not change our conclusion.  At most, Marks has merely identified 
a causal relationship: his position as trustee of ICT and ICT2 
led him to accept a role as officer or director of Titan.  
However, that alleged connection is nonetheless deficient as 
Marks is being sued for his alleged failures as officer or 
director of Titan, not for any alleged failures as trustee of 
ICT and ICT2. 
¶53 The supplemental counterclaims against Marks in the 
Hawaii Global action were filed almost six months after Marks 
notified Houston Casualty of the lawsuits against him, almost 
three months after Marks' policy expired and Houston Casualty 
informed Marks it had no obligation to defend him, and over two 
months after Marks initially filed this lawsuit against Houston 
Casualty alleging breach of its duty to defend him.  Those 2010 
No. 
2013AP2756   
 
31 
 
counterclaims were not a part of Houston Casualty's 2009 duty to 
defend analysis and are not a part of our duty to defend 
analysis.25 
                                                 
25 Marks points out that on October 28, 2009, he notified 
Houston Casualty that Hawaii Global and TransPac had filed a 
"Motion 
for 
Leave 
to 
File 
Supplemental 
and 
Amended 
Counterclaims."  But "[t]he duty to defend is based solely on 
the allegations 'contained within the four corners of the 
complaint,' without resort to extrinsic facts or evidence," 
Fireman's Fund Ins. Co. v. Bradley Corp., 2003 WI 33, ¶19, 261 
Wis. 2d 4, 660 N.W.2d 666 (emphasis added) (citation omitted), 
which is what Hawaii Global and TransPac's motion amounts to, 
despite its formal trappings.  Marks suggests his October 28, 
2009 letter to Houston Casualty was "proper notice of claim," 
but no such "claim" had yet been made.  Those supplemental 
claims would not be made until January 25, 2010.  Cf. Amerisure 
Mut. Ins. Co. v. Microplastics, Inc., 622 F.3d 806, 812 (7th 
Cir. 2010) (Illinois law) ("[I]t is the actual complaint, not 
some hypothetical version, that must be considered." (citation 
omitted).); Travelers Prop. Cas. Co. of Am. v. Hillerich & 
Bradsby Co., 598 F.3d 257, 273 (6th Cir. 2010) (Kentucky law) 
(pursuant to duty to defend analysis, draft complaint attached 
as an exhibit to a motion for reconsideration would not be 
considered filed as a complaint on that day).  
(continued) 
No. 
2013AP2756   
 
32 
 
¶54 To summarize, Marks obtained a professional liability 
policy from Houston Casualty for his work as trustee of two 
trusts.  He was sued multiple times for activities pertaining to 
his performance as an officer or director of various businesses 
affiliated with those trusts, but these lawsuits had nothing to 
do with Marks' services as trustee of those trusts.  When 
Houston Casualty received Marks' request for a defense, it 
examined Marks' policy and the complaints at issue, and 
reasonably made the same conclusion that we do today: Houston 
Casualty had no duty to defend Marks based on the claims 
asserted against him. 
¶55 Ordinarily, our analysis would end here.  Perhaps 
realizing the weakness of his position given the plain terms of 
the business enterprise exclusion, however, Marks provides two 
                                                                                                                                                             
Although there was brief reference to it in the proceedings 
below, we are not faced with a developed argument that Houston 
Casualty separately breached a duty to defend on January 25, 
2010, a date which is outside of the applicable policy period.  
Such a claim would face its own hurdles, including: (1) the 
question of whether these counterclaims survive the business 
enterprise 
exclusion; 
(2) 
application 
of 
Marks' 
policy's 
intentional acts exclusion (in fact, although the circuit court 
concluded otherwise, Marks conceded before the circuit court 
that "Hawaii Global alleged only intentional acts"); and (3) an 
argument we have not otherwise addressed——the possibility that 
the Hawaii Global counterclaims should be read to date back to 
April 7, 2008, the original filing date of Hawaii Global's 
counterclaim and a date which is also outside of the applicable 
policy period.  With regard to this last issue, we note that a 
section of Marks' policy titled "Multiple Claims" reads: "One or 
more Claims based upon or arising out of the Same Wrongful Act 
or Interrelated Wrongful Acts by one or more of the Insureds 
shall be considered a single claim."  See also supra, n. 16. 
No. 
2013AP2756   
 
33 
 
reasons why we should not give effect to the business enterprise 
exclusion at all: (1) the exclusion renders the policy illusory, 
so we must interpret the policy in favor of coverage; and (2) 
because Houston Casualty "unilaterally disclaim[ed] coverage," 
it is "estopped from using policy exclusions to litigate 
coverage if it is sued for breaching its duty to defend."  Both 
arguments are without merit. 
 
C.  Whether the Business Enterprise Exclusion Renders the 
Houston Casualty Policy Illusory 
¶56 "Insurance policies are contracts and are governed by 
the same rules that govern interpretation of contracts in 
general."  Wisconsin Label Corp. v. Northbrook Prop. & Cas. Ins. 
Co., 2000 WI 26, ¶23, 233 Wis. 2d 314, 607 N.W.2d 276 (citation 
omitted).  "In order that a contract may arise, three things 
must concur: first, the offer; second, the acceptance; and, 
third, the consideration."  Briggs v. Miller, 176 Wis. 321, 325, 
186 N.W. 163 (1922).  "Where an illusory promise is made, that 
is, a promise merely in form, but in actuality not promising 
anything, it cannot serve as consideration."  3 Williston on 
Contracts 
§ 7:7 
(4th 
ed.). 
 
In 
the 
insurance 
context, 
"[i]llusory policy language defines coverage in a manner that 
coverage will never actually be triggered."  Continental Western 
Ins. Co. v. Paul Reid, LLP, 2006 WI App 89, ¶7, 292 Wis. 2d 674, 
715 N.W.2d 689 (citation omitted).  "Where a policy's purported 
coverage is illusory, the policy may be reformed to meet an 
No. 
2013AP2756   
 
34 
 
insured's reasonable expectations of coverage."  Id.26  We stress 
that "reformation is an extraordinary remedy, and . . . courts 
exercise it with great caution and restraint."  43 Am. Jur. 2d 
Insurance § 358 (citing Haddad v. Elkhateeb, 46 So. 3d 244, 255 
(La. Ct. App. 4th Cir. 2010)); see also, e.g., Kansas v. 
Nebraska, 575 U.S. ___, 135 S. Ct. 1042, 1061 (2015) ("Of 
course, courts generally hold parties to the deals they make; 
and of course, courts should hesitate, and then hesitate some 
more, before modifying a contract, even to remove an inadvertent 
flaw."); 2 Steven Plitt et al., Couch on Insurance § 26:1 
("Reformation is an extraordinary remedy . . . . Accordingly, 
the courts exercise it with great caution" (citing Mutual of 
Omaha Ins. Co. v. Russell, 402 F.2d 339 (10th Cir. 1968).).27  
                                                 
26 This statement of law is, in some sense, incomplete.  
Generally, the insurer's understanding of the contract is also 
of critical concern when reforming a policy.  See infra, n.27; 
Vandenberg v. Continental Ins. Co., 2001 WI 85, ¶53, 244 
Wis. 2d 802, 628 N.W.2d 876 ("In the context of insurance 
contracts, 
there 
are 
special 
considerations 
regarding 
reformation. . . .  [A] policy may not be rewritten to bind the 
insurer to a risk that it did not contemplate and for which it 
received no premium."). 
27 "Reformation is an equitable remedy which emanates from 
the maxim that equity treats that as done which ought to have 
been done. . . .  Reformation may be granted only in two narrow 
circumstances: Mutual mistake, or unilateral mistake plus 
fraudulent concealment."  27 Williston on Contracts § 70:19 (4th 
ed.).  With regard to the first of these circumstances,  
[t]he purpose of reforming a contract on the basis of 
mutual mistake is to make a defective writing conform 
to the agreement of the parties upon which there was 
mutual assent. While the erroneous instrument must be 
made to correctly express the real agreement between 
(continued) 
No. 
2013AP2756   
 
35 
 
¶57 Marks argues that the business enterprise exclusion 
"completely swallows the coverage granted in the insuring 
agreement" of his policy because it excludes coverage "[f]or 
liability arising out of the Insured's services and/or capacity 
as: 
an 
. . . trustee 
. . . of 
. . . a . . . trust . . . ."  
Thus, Mark concludes, this court must "reform the policy in 
favor of coverage."  This argument, though perhaps clever, does 
not withstand scrutiny. 
¶58 Marks essentially contends that because a portion of 
the 
business 
enterprise 
exclusion 
not 
at 
issue 
(the 
trustee/trust portion of the exclusion) renders the policy 
                                                                                                                                                             
the parties, no court can make a new contract for the 
parties. 
Id. (emphases added) (citations omitted); see also 2 Steven 
Plitt et al., Couch on Insurance § 26:1 (3d ed. 2015) ("[A]n 
insurance policy is subject to reformation precisely as any 
other written instrument upon the same grounds and subject to 
the same limitations. . . .  Reformation is a proper remedy 
where 
the 
parties 
have 
reached 
a 
definite 
and 
explicit 
agreement.  There must be an understanding that there is an 
agreement, but whether by mutual or common mistake, or mistake 
on one side and fraud or inequitable conduct on the other, the 
written contract fails to express the agreement; in which case, 
the policy will be corrected so as to make it conform to their 
real intent, and the parties will be placed as they would have 
stood if the mistake had not occurred." (citations omitted)). 
Such are the general principles.  Also present in Wisconsin 
case law is the recognition that "[i]n insurance cases less is 
required to make out a cause of action for reformation than in 
ordinary contract disputes."  Artmar, Inc. v. United Fire & Cas. 
Co., 34 Wis. 2d 181, 186, 148 N.W.2d 641 (1967).  This case does 
not require us to delve into the niceties of insurance policy 
reformation, but we raise these issues to emphasize that 
reformation is not a tool to be applied casually. 
No. 
2013AP2756   
 
36 
 
illusory, we should provide coverage otherwise eliminated by a 
separate portion of the business enterprise exclusion (the 
officer-director/business enterprise portion of the exclusion).   
¶59 Even if Marks is correct in his interpretation of the 
policy, our task would be to reform the policy so that it 
"conform[s] to [the] real intent" of the parties; that is, to 
reform the policy so that it represents the "definite and 
explicit agreement" originally reached by the parties before any 
mistake occurred.  2 Plitt et al., supra § 26:1; see also 
Vandenberg v. Continental Ins. Co., 2001 WI 85, ¶50 & n.35, 244 
Wis. 2d 802, 628 N.W.2d 876.  If a clause in Marks' policy 
renders the policy illusory, we consider whether to reform that 
clause.  We do not consider whether to reform other clauses, 
simply because they too eliminate coverage. 
¶60 The coverage provision of Marks' policy establishes 
that Marks is covered for liability arising out of his 
"performance of services as the Trustee of the Irrevocable 
Children's Trust (ICT), and/or Irrevocable Children's Trust No. 
2 (ICT2), for a fee."  If Marks is correct in his interpretation 
of the business enterprise exclusion, reformation might be 
appropriate and we might excise the trustee/trust portion of 
that exclusion.  We would not, however, absent other argument, 
excise other portions of the business enterprise exclusion not 
in conflict with the coverage provision of the policy.  Houston 
Casualty 
is 
not 
arguing 
that 
the 
putative 
trustee/trust 
No. 
2013AP2756   
 
37 
 
exclusion applies to exclude coverage, and we need not examine 
it further.28 
 
D.  Whether this Court Should, in Conducting Its Four-Corners 
Analysis, Consider the Exclusions in Marks' Policy 
¶61 Marks 
also 
argues 
that 
the 
business 
enterprise 
exclusion does not apply in this case because "an insurer that 
unilaterally disclaims coverage and its duty to defend will be 
estopped from using policy exclusions or limiting language to 
litigate coverage if it is subsequently sued by its insured for 
breaching its duty to defend."  Marks principally relies on 
three court of appeals cases for this proposition: Radke v. 
Fireman's Fund Insurance Co., 217 Wis. 2d 39, 577 N.W.2d 366 
(Ct. App. 1998); Kenefick v. Hitchcock, 187 Wis. 2d 218, 522 
N.W.2d 261 (Ct. App. 1994); and Grube v. Daun, 173 Wis. 2d 30, 
496 N.W.2d 106 (Ct. App. 1992).  As will be shown, Grube, the 
earliest of these cases, relied on an earlier case, Professional 
Office Bldgs., Inc. v. Royal Indemnity Co., 145 Wis. 2d 573, 427 
N.W.2d 427 (Ct. App. 1988).  We thus begin with Professional 
Office Buildings. 
                                                 
28 This reasoning applies with equal force to Marks' 
contention that because the business enterprise exclusion is 
supposedly ambiguous, Houston Casualty was obligated to defend 
him.  The fact that portions of Marks' policy not at issue (the 
trustee/trust portion of the business enterprise exclusion) may 
be ambiguous does not render the portion of the exclusion upon 
which Houston Casualty relied in denying Marks a defense (the 
officer-director/business enterprise portion of the business 
enterprise exclusion) ambiguous. 
No. 
2013AP2756   
 
38 
 
¶62 The facts in Professional Office Buildings stem from 
an airplane crash near Tupelo, Mississippi.  Prof'l Office 
Bldgs., 145 Wis. 2d at 577.  A passenger injured in the crash 
sued the corporate owner of the plane, Professional Office 
Buildings, Inc. ("POB"), which had leased the plane to another 
corporation at the time of the crash.  Id. at 577-78.  POB's 
insurer, Royal Indemnity Company ("Royal"), refused to defend it 
under two potentially applicable policies; Royal pointed to the 
coverage clause of one policy and an exclusion in the other 
policy.  Id. at 578-79.  POB sued Royal Indemnity alleging, 
among other things, breach of the duty to defend.  Id. at 579. 
¶63 After stating the four-corners rule, the court of 
appeals determined that Royal had a duty to defend POB.  Id. at 
580-83.  Importantly, the court relied for its conclusion on an 
exception to the exclusion which had been cited by Royal to POB 
when it had denied POB a defense.  Id. at 578, 583.  The court 
then concluded that "an insurer, who has breached its duty to 
defend an insured, may be estopped from later challenging 
coverage."  Id. at 584-85 (emphasis added).  "Royal could have 
tried coverage prior to undertaking the liability defense.  
Where 
coverage 
is 
an 
issue, 
bifurcated 
trials 
are 
the 
norm. . . .  Royal, having breached its duty to defend the 
Mississippi action, may not now challenge or otherwise litigate 
the coverage issues."  Id. at 585-86.  Professional Office 
No. 
2013AP2756   
 
39 
 
Buildings is consistent with our analysis in this case.29  We 
proceed to examine Grube.  
¶64 Grube involves many issues, and we recite only the 
portions of that opinion relevant to this appeal.  In Grube 
Louis Achter ("Achter") sold property to John Daun ("Daun") 
without mentioning a gasoline leak that had occurred on the 
property.  Grube, 173 Wis. 2d at 46-47.  Daun sold the property 
to Gordon and Julie Grube ("the Grubes").  Id. at 47.  The 
Grubes 
discovered 
that 
wells 
on 
the 
property 
had 
been 
contaminated by the leak, and a flurry of litigation ensued.  
Id. at 47-48.  Relevant to this case, Achter sued his insurer, 
Secura Insurance ("Secura"), demanding a defense and insurance 
coverage.  Id. at 48.  The court of appeals concluded that 
"[n]egligence causing property damage was alleged [against 
Achter] and is covered under Achter's policy" and that Secura 
                                                 
29 Lest we inadvertently undo recent work of this court, we 
observe our statement from a few years ago:  
When an insurer breaches a duty to defend its 
insured, the insurer is on the hook for all damages 
that result from that breach of its duty. . . .  
While these damage awards are sometimes framed as the 
insurer being "estopped" from denying coverage, see, 
e.g., 
Grube 
v. 
Daun, 
173 
Wis. 2d 30, 
74, 
496 
N.W.2d 106 (Ct. App. 1992) . . . , they are the 
measure of damages actually caused by an insurer's 
breach of the contractual duty to defend, not an 
estoppel based on some otherwise inequitable conduct 
in the eyes of the insured.  
Maxwell v. Hartford Union High Sch. Dist., 2012 WI 58, ¶¶54-55, 
341 Wis. 2d 238, 814 N.W.2d 484. 
No. 
2013AP2756   
 
40 
 
was therefore required to provide a defense.  Id. at 73.  Secura 
"argue[d] that it did not have a duty to defend because the 
claims alleged fall within exclusions of the policy."  Id. at 
74.  The court of appeals rejected the argument, stating, "We 
hold that under Professional Office Buildings, Secura is 
estopped from raising any challenges to coverage; it must both 
defend and indemnify Achter because Secura denied coverage 
outright."  Id. at 74 (citation omitted).  
¶65 The Grube court misinterpreted Professional Office 
Buildings. Important to the Professional Office Buildings. 
court's holding that Royal could not contest coverage was the 
fact that the court had already determined that Royal had 
breached its duty to defend POB——a determination made, notably, 
after the court analyzed an exclusion and an exception to that 
exclusion in POB's policy.  Prof'l Office Bldgs., 145 Wis. 2d at 
584-85.  The Grube decision is also internally inconsistent in 
this regard; later in its analysis, the Grube court stated, "The 
issue in the instant case——whether an insurer who breached its 
duty to defend can later contest coverage——is identical to the 
issue in Professional Office [Buildings]."  Grube, 173 Wis. 2d 
at 74-75 (emphasis added).  The Grube court should have 
addressed Secura's exclusions argument.30   
                                                 
30 It is not clear that examination of exclusions in the 
Secura policy would have changed the result in that case.  The 
trial court in that case had concluded that an exclusion "for 
damage to the insured's own property did not apply as the 
property was no longer owned by Achter."  Grube, 173 Wis. 2d  at 
49. 
No. 
2013AP2756   
 
41 
 
¶66 In 
Kenefick 
David 
and 
Carolyn 
Hitchcock 
("the 
Hitchcocks") were sued by their neighbors, Emmett and Amelia 
Kenefick ("the Keneficks"), who alleged that gasoline tanks on 
the Hitchcock's property had leaked and contaminated the 
groundwater.  Kenefick, 187 Wis. 2d at 221.  The Hitchcocks 
eventually sued their insurer, Federated Mutual Insurance 
Company ("Federated"), claiming that it had breached its duty to 
defend them.  Id.  The details of the case are not particularly 
germane to this case because Marks relies on a single statement 
made by the Kenefick court at the beginning of its duty to 
defend analysis:  
The nature of [the Keneficks'] claim [against the 
Hitchcocks] is such that——ignoring, as we must at this 
stage of the inquiry, both the merits of the claim and 
any exclusionary or limiting terms and conditions of 
the policies and, further, resolving all doubts in 
favor of the insured——we cannot say that there was no 
duty on Federated's part to defend the action, at 
least up to the point that its policy defenses to 
coverage were resolved. 
Id. at 232. 
¶67 As noted in a treatise on Wisconsin insurance law, 
"that statement . . . does not cite to any supporting authority.  
This is probably because case after case in Wisconsin has held 
that an insurance company's obligation to defend is based on the 
entire contract."  Sheila M. Sullivan et al., Anderson on 
Wisconsin Insurance Law § 7.23 (7th ed. 2015); see also Menasha 
Corp. v. Lumbermens Mut. Cas. Co., 361 F. Supp. 2d 887, 892-93 
(E.D. Wis. 2005) ("Plaintiff also argues that in determining 
whether defendants had duties to defend, I may not consider 
No. 
2013AP2756   
 
42 
 
exclusions in their policies.  Plaintiff bases this argument on 
statements in [Kenefick and Radke].  However, when addressing 
whether there is a duty to defend, Wisconsin courts frequently 
consider exclusions. . . .  [D]espite the language in Radke and 
Kenefick, 
I 
will 
consider 
the 
exclusions 
in 
defendants' 
policies." (citations omitted)).  
¶68 Moreover, the Kenefick court did not even apply the 
"estoppel" discussion in Grube; in fact, it recognized that 
unlike in Professional Office Buildings, the coverage and 
liability issues in Kenefick were bifurcated.  Kenefick, 187 
Wis. 2d at 233-34; see also id. at 235 n.7 ("There is no 
indication in Grube, however, that the insurer obtained a 
bifurcated trial as Federated did in this case. . . . Grube is 
inapposite.").31  
¶69 Radke is the last case for our consideration.  We need 
spend even less time with Radke because it simply quoted the 
                                                 
31 In Kenefick the court concluded that Federated did not 
breach 
its 
duty 
to 
defend, 
although 
Federated 
did 
not, 
apparently, request bifurcation until six months after the 
complaint against the Keneficks was filed.  Kenefick v. 
Hitchcock, 187 Wis. 2d 218, 233 & n.6, 522 N.W.2d 261 (Ct. App. 
1994).  The court remanded the case on the "very limited ground" 
that "if the Hitchcocks necessarily incurred expenses in defense 
of the liability and damage portions of the case prior to the 
time it was determined there was no coverage under the Federated 
policies, they could seek reimbursement from Federated."  Id. at 
236.  We do not discuss the merits of this aspect of the 
Kenefick court's analysis, and our comment that Kenefick 
distinguished 
itself 
from 
Grube 
and 
Professional 
Office 
Buildings is not meant as an endorsement of that conclusion; we 
merely point out that the Kenefick court did not purport to 
apply the estoppel discussion in Grube. 
No. 
2013AP2756   
 
43 
 
statement from Kenefick just discussed.  Radke, 217 Wis. 2d at 
44 ("However, our inquiry at this stage is limited; we are 
required to ignore 'both the merits of the claim and any 
exclusionary or limiting terms and conditions of the policies.'" 
(quoting Kenefick, 187 Wis. 2d at 232)).  
¶70 In sum, Marks' argument that we must ignore the 
business enterprise exclusion because Houston Casualty refused 
to defend him rests upon: (1) analysis in Grube based on a 
faulty reading of Professional Office Buildings; and (2) a 
statement in Kenefick that did not rely on any cases or other 
sources for support.  We decline to rely on these statements, 
for multiple reasons. 
¶71 First, as an original matter, a rule that an insurer 
who declines to provide a defense may not rely on policy 
exclusions to protect itself against allegations of breach of 
the duty to defend makes no sense.  If A demands that B perform 
an action under a contract, B relies on a particular clause in 
the contract in refusing to perform that action, and A sues B 
for breach of contract, a court of necessity must interpret that 
clause in order to determine whether B in fact breached the 
contract.  See Restatement (Second) of Contracts § 235 (1981) 
("When performance of a duty under a contract is due any non-
performance is a breach." (emphasis added)).  The fact that that 
contract may sometimes be an insurance contract does not change 
the analysis.  See Wis. Label Corp., 233 Wis. 2d 314, ¶23 
("Insurance policies are contracts and are governed by the same 
No. 
2013AP2756   
 
44 
 
rules that govern interpretation of contracts in general" 
(citation omitted).).  
¶72 Insurers are not allowed to contest coverage after a 
court has determined that the insurer has breached the duty to 
defend its insured because, having breached a contractual 
obligation, the insurer must pay damages flowing from that 
breach.  Maxwell, 341 Wis. 2d 238, ¶¶55-56 (citing Prof'l Office 
Bldgs., 145 Wis. 2d at 585-86).32  But if the insurer has not 
breached its duty to defend——something a court cannot determine 
based simply on the fact that the insurer declined to defend an 
action——then it is not obligated to pay out any damages.  See 
Sullivan et al., supra ¶67, at § 11.100 ("If there is, in fact, 
no contract to defend an insured, an insurer should not have a 
duty to defend.  If no duty to defend exists, there should be no 
waiver or estoppel for failure to respond to a tender of 
defense."); Prod. Stamping Corp. v. Maryland Cas. Co., 199 
Wis. 2d 322, 327, 544 N.W.2d 584 (Ct. App. 1996); cf. Sisson v. 
Hansen Storage Co., 2008 WI App 111, ¶16, 313 Wis. 2d 411, 756 
N.W.2d 667 ("Although it is risky for an insurance carrier to 
reject a tender of defense by its insured, the justified 
rejection of a tender does not create coverage where none 
exists . . . .").  In the current case, we needed to examine the 
business enterprise exclusion to determine whether Houston 
Casualty had breached its duty to defend Marks.  
                                                 
32 See supra, ¶63 n.29. 
No. 
2013AP2756   
 
45 
 
¶73 Second, as we have explained, Grube, Kenefick, and 
Radke are inconsistent with a long line of Wisconsin case law.  
See, e.g., Liebovich v. Minnesota Ins. Co., 2008 WI 75, ¶¶2, 13, 
310 Wis. 2d 751, 751 N.W.2d 764; Last v. Am. Family Mut. Ins. 
Co., 2000 WI App 169, ¶¶2-4, 9-10, 238 Wis. 2d 140, 617 
N.W.2d 215; Bruner v. Heritage Companies, 225 Wis. 2d 728, 732-
33, 737-40, 593 N.W.2d 814 (Ct. App. 1999); Production Stamping 
Corp., 199 Wis. 2d at 325-26, 329-31; Prof'l Office Bldgs., 145 
Wis. 2d at 578-79, 580-83; Sola Basic Indus., Inc. v. U.S. Fid. 
& Guar. Co., 90 Wis. 2d 641, 644-47, 653-54 280 N.W.2d 211 
(1979); Grieb v. Citizens Cas. Co. of New York, 33 Wis. 2d 552, 
556-57, 148 N.W.2d 103 (1967). 
¶74 Grube, Kenefick, and Radke constitute a stunted strand 
of law that conflicts with our four-corners jurisprudence; it 
also has produced uncertainty.  See Menasha Corp. v. Lumbermens 
Mut. Cas. Co., 361 F. Supp. 2d 887, 893 (noting conflict and 
declining to apply Radke and Kenefick); Sullivan et al., supra 
¶67, at § 7.23 (discussing Radke and Kenefick and noting that 
"case after case in Wisconsin has held that an insurance 
company's 
obligation 
to 
defend 
is 
based 
on 
the 
entire 
contract").  The court of appeals below recognized this.  Marks, 
363 Wis. 2d 505, ¶10 ("Marks accurately portrays the pertinent 
parts of Grube, Kenefick, and Radke.  However, . . . in this 
respect the three cases impermissibly conflict with our earlier 
decision in Professional Office Bldgs.").  The circuit court 
below recognized this ("[M]y first reaction was astonishment 
when Mr. Marks argued that there is a rule in Wisconsin that 
No. 
2013AP2756   
 
46 
 
forbids a court in coverage disputes from looking at the 
exclusions. . . .  [I]t appears that Grube changed the rules set 
forth in Professional Office Bldgs. from a . . . process that 
makes estoppel contingent on coverage to a . . . process that 
makes estoppel automatic, regardless of coverage.  And the dicta 
we read in Radke and Kenefick reflects the same kind of 
automatic rule . . . .").33  
¶75 Grube, Kenefick, and Radke are "unsound in principle," 
and "detrimental to coherence and consistency in the law" 
insofar as they suggest that exclusions may not be considered in 
an analysis of whether an insurer has breached its duty to 
defend its insured simply because the insurer declined to defend 
its insured.  Johnson Controls, Inc. v. Employers Ins. of 
Wausau, 2003 WI 108, ¶¶98-99, 264 Wis. 2d 60, 665 N.W.2d 257; 
see supra, ¶¶71-74.  In order to resolve conflicting precedent 
in Wisconsin case law, we explicitly overrule any statements in 
these cases that suggest such an analysis is appropriate.   
¶76 Accordingly, the business enterprise exclusion is 
properly considered in this case and establishes that Houston 
Casualty did not breach its duty to defend Marks.    
                                                 
33 Indeed, even Marks seemingly recognized this conflict in 
his motion for summary judgment below, in which he noted 
"apparent tension in the law" between Grube, Kenefick, and Radke 
and "cases like Production Stamping [Corporation v. Maryland 
Casualty Company, 199 Wis. 2d 322, 544 N.W.2d 584 (Ct. App. 
1996)]," 
a 
case 
which 
"cites 
to 
various 
portions 
of 
Kenefick . . . but . . . incorporated a policy exclusion into 
its duty to defend analysis." 
No. 
2013AP2756   
 
47 
 
E.  Whether the Court of Appeals Complied with Cook v. Cook 
¶77 We must address one final issue.  As noted, the court 
of appeals below acknowledged it had erred in Grube, Kenefick, 
and Radke, stating, "Contrary to the approach that we applied in 
Professional Office Bldgs., in Grube and more explicitly in 
Kenefick and Radke, we imposed a different and illogical hurdle 
for insurers."  Marks, 363 Wis. 2d 505, ¶13.  However, the court 
of appeals then took a further step.  It concluded:  
To the extent. . . that in Grube, Kenefick and 
Radke we modified Professional Office Bldgs. as we 
have described, we agree with the circuit court that 
we lacked the authority to do so under Cook v. Cook, 
208 Wis. 2d 166, 189, 560 N.W.2d 246 (1997) (the court 
of appeals "must speak with a unified voice" and may 
not overrule, modify or withdraw language from its 
prior published decisions[).]  Likewise, court of 
appeals cases may not conflict with supreme court 
precedent.  Id. (the supreme court is the only court 
in the State of Wisconsin with the power to "overrule, 
modify or withdraw language from a previous supreme 
court case[").]  Consequently, Grube, Kenefick and 
Radke do not establish precedent for the modification 
of how a claim of breach of duty to defend is 
evaluated.  See, e.g., State v. Bolden, 2003 WI App 
155, ¶¶9-11, 265 Wis. 2d 853, 667 N.W.2d 364. 
Id., ¶15. 
¶78 The first of the two propositions cited by the court 
of appeals——the idea that the court of appeals need not follow a 
case that conflicts with an earlier case of that court——has been 
stated elsewhere in Wisconsin law.  See, e.g., State v. Swiams, 
2004 WI App 217, ¶23, 277 Wis. 2d 400, 690 N.W.2d 452 (citing 
Bolden for the proposition that "if two court of appeals 
decisions conflict, the first governs"); Steiner v. Steiner, 
No. 
2013AP2756   
 
48 
 
2004 WI App 169, ¶23 n.2, 276 Wis. 2d 290, 687 N.W.2d 740 
(Dykman, J., dissenting) (explaining that Bolden holds that "if 
a conflict exists between two published court of appeals cases, 
the first in time governs"); Leo's Salons, Inc. v. Deonne's 
Salon and Day Spa, LLC, No. 2006AP1563, unpublished slip op., 
¶13 & n.5 (Wis. Ct. App. 2007) (citing Bolden for the 
proposition that the "first of two published conflicting court 
of appeals opinions controls"). 
¶79 We need not express an opinion on the merits of the 
theory that, because "the court of appeals may not overrule, 
modify or withdraw language from a previously published decision 
of the court of appeals," Cook v. Cook, 208 Wis. 2d 166, 190, 
560 N.W.2d 246, 256 (1997), any court of appeals decision which 
does so, whether explicitly or not, is essentially voidable by 
the court of appeals in that respect.  This is so because, even 
if logically valid, application of that principle by the court 
of appeals is problematic.34  Whether a later case misinterpreted 
                                                 
34 Determining the theoretical validity of this principle 
would likely require interpretation of Article VII of the 
Wisconsin Constitution ("Judiciary") and Wis. Stat. § 752.41 
("Decisions"). See, e.g., Cook v. Cook, 208 Wis. 2d 166, 185-86, 
560 N.W.2d 246. Neither of these sources receive attention in 
the parties' briefing. Indeed, Houston Casualty did not address 
the issue at all, instead contending that it was moot. "Courts 
should 
think 
carefully 
before 
expending 
'scarce 
judicial 
resources' 
to 
resolve 
difficult 
and 
novel 
questions 
of 
constitutional or statutory interpretation that will 'have no 
effect on the outcome of the case.'" Ashcroft v. al-Kidd, 563 
U.S. 731, 735 (2011) (citations omitted). Given that this issue 
was not fully briefed, it would be dangerous to address an issue 
as weighty as the constitutional authority of the court of 
appeals. Therefore, we decline to do so.  
No. 
2013AP2756   
 
49 
 
or "modif[ied]" an earlier case is not always apparent, and 
judges might disagree on that question.  Additionally, a 
determination that a case impermissibly modified an earlier case 
and is thus not binding is effectively the same as overruling 
that case. 
It is our goal that the court of appeals speak 
with a unified voice . . . and it generally achieves 
that goal exceedingly well.  However, when a perceived 
conflict arises, which is understandable given the 
huge volume of cases the court of appeals so capably 
handles, a certification to this court that points out 
the perceived conflict will best serve the public 
interest and will also aid this court in its law 
developing 
and 
clarifying 
function.  
However, 
overruling an earlier court of appeals decision is not 
an option. 
State v. Johnson, 2004 WI 94, ¶18, 273 Wis. 2d 626, 681 
N.W.2d 901 (citations omitted).  
¶80 The court of appeals below was faced with a complex 
situation.  However, we clarify that the court of appeals should 
have certified this case rather than resolved for itself whether 
Grube, Kenefick, and Radke misinterpreted Professional Office 
Buildings, and we instruct it to certify cases presenting 
similar types of conflicts in the future.  Because we overrule 
portions of Grube, Kenefick, and Radke ourselves today, there is 
no reason to reverse the decision of the court of appeals.  
IV.  CONCLUSION 
¶81 We conclude that the complaints and counterclaim 
against Marks do not allege facts which, if proven, would 
constitute claims covered under the insurance policy Marks 
obtained from Houston Casualty.  Houston Casualty therefore did 
No. 
2013AP2756   
 
50 
 
not breach its duty to defend Marks when it declined to defend 
him in the six lawsuits at issue.  Consequently, we affirm the 
decision of the court of appeals. 
By the Court.— The decision of the court of appeals is 
affirmed. 
 
No. 2013AP2756.awb 
 
1 
 
 
¶82 ANN WALSH BRADLEY, J. (concurring).  I agree with the 
majority's conclusion that the four-corners rule includes 
consideration of exclusions as well as exceptions to those 
exclusions in an insurance policy.  Majority op., ¶40.   
¶83 Additionally, I agree with its determination that "the 
complaints and counterclaim against Marks do not allege facts 
which, if proven, would constitute claims covered under the 
insurance 
policy 
Marks 
obtained 
from 
Houston 
Casualty."  
Majority op., ¶3.      
¶84 I write separately, however, because I disagree with 
the majority's determination that "only two documents are 
germane in any four-corners analysis:  the insurance policy and 
the complaint against the insured.  No examination of extrinsic 
facts or evidence takes place."  Majority op., ¶39 (citing 
Fireman's Fund Ins. Co. of Wis. v. Bradley Corp., 2003 WI 33, 
¶19, 261 Wis. 2d 4, 660 N.W.2d 666); see also majority op., ¶53 
n. 25 ("[t]he duty to defend is based solely on the allegations 
contained within the four corners of the complaint, without 
resort to extrinsic facts or evidence . . . ") (citing Fireman's 
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2 
 
Fund, 261 Wis. 2d 4, ¶19) (emphasis in original) (internal 
quotations omitted).1 
¶85 The issue of whether the four-corners rule allows for 
an exception to consider the known facts extrinsic to the 
complaint is not before the court in this case.  Instead, it is 
presented in Water Well Sols. Serv. Grp. Inc. v. Consol. Ins. 
Co., 2016 WI 54, ___ Wis. 2d ___, ___ N.W.2d ___, which is being 
released concurrently with this decision today.   
¶86 My dissenting opinion in Water Well sets forth the 
analysis in support of my conclusion that when the complaint is 
factually incomplete or ambiguous, Wisconsin should adopt a 
narrow 
known 
fact 
exception 
to 
the 
four-corners 
rule.  
Consequently, I will not repeat the entirety of my dissent, but 
instead incorporate that conclusion and its analysis here. 
¶87 Accordingly, I respectfully concur. 
¶88 I am authorized to state that Justice SHIRLEY S. 
ABRAHAMSON joins this concurrence. 
                                                 
1 The majority opinion is internally inconsistent because on 
one hand it says the duty to defend decision is based solely on 
the four-corners of the complaint while on the other hand it 
encourages insurers to investigate in order to inform its 
decision, acknowledging that "the applicability of an exclusion 
is rarely obvious from the allegations in the complaint."  
Majority op., ¶41 (citing Peter F. Mullaney, Liability Insurers' 
Duty to Defend, Wis. Law., at 10-11 (July 1995).  See also Water 
Well Sols. Serv. Grp. Inc. v. Consol. Ins. Co., 2016 WI 54, ¶58-
59, ___ Wis. 2d ___, ___ N.W.2d ___ (Ann Walsh Bradley, J., 
dissenting). 
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1 
 
 
¶89 REBECCA G. BRADLEY, J.   (concurring).  I join the 
majority in affirming the court of appeals.  I write separately, 
however, to address two important issues.  First, although the 
majority reaffirms Cook v. Cook, 208 Wis. 2d 166, 560 N.W.2d 246 
(1997), and holds the court of appeals should certify an appeal 
when its disposition depends upon conflicting published court of 
appeals cases, the majority does not explicitly overrule State 
v. Swiams, 2004 WI App 217, 277 Wis. 2d 400, 690 N.W.2d 452, or 
State v. Bolden, 2003 WI App 155, 265 Wis. 2d 853, 667 N.W.2d 
364.  This, in my opinion, may leave the courts and the bar with 
uncertainty.  I write to clarify that the principle implied in 
Bolden and repeated as dicta in Swiams that "if two court of 
appeals 
decisions 
conflict, 
the 
first 
governs" 
directly 
conflicts with Cook and therefore is implicitly overruled by the 
majority 
opinion. 
 
Second, 
I 
would 
clarify 
or 
withdraw 
problematic language from Grube v. Daun, 173 Wis. 2d 30, 496 
N.W.2d 106 (Ct. App. 1992), rather than overrule it. 
I.  COOK V. COOK 
¶90 In Bolden, the court of appeals' disposition depended 
upon two cases, State v. Jackson, 187 Wis. 2d 431, 523 N.W.2d 
126 (Ct. App. 1994), and State v. Kuehl, 199 Wis. 2d 143, 545 
N.W.2d 840 (Ct. App. 1995).  The district II court of appeals 
decided Kuehl one year after district I decided Jackson.  
District II in Kuehl disagreed with district I's Jackson 
opinion, held that Jackson had been wrongly decided, and 
overruled it.  See Kuehl, 199 Wis. 2d at 149.  Although district 
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2 
 
II acknowledged it was obligated to abide by Jackson, district 
II explained that it believed Jackson conflicted with an earlier 
case, State v. Haseltine, 120 Wis. 2d 92, 352 N.W.2d 673 (Ct. 
App. 1984); therefore, district II concluded it was "free to 
follow the decision which we conclude is correct."  Kuehl, 199 
Wis. 2d at 149.  Kuehl, which was decided before this court's 
pronouncement in Cook, was not appealed.  Cook made clear that 
when the court of appeals believes a previously published court 
of appeals case was wrongly decided, the court of appeals does 
not have the power to overrule itself.  Cook, 208 Wis. 2d at 
189-90.  If the court of appeals finds itself in a situation 
where it wants to overrule an earlier decision, it has two 
choices:  (1) certify the appeal to this court; or (2) "decide 
the appeal, adhering to a prior case but stating its belief that 
the prior case was wrongly decided."  Cook, 208 Wis. 2d at 190.  
Cook did not, however, explicitly overrule Kuehl.  As a result, 
parties continued to ask the court of appeals to overrule its 
published decisions, relying on Kuehl's mistaken proposition.  
See Bolden, 265 Wis. 2d 853, ¶9. 
¶91 Bolden, relying on Cook's statement prohibiting the 
court of appeals from overruling itself, reasoned that district 
II in Kuehl did not have the power to overrule district I's 
Jackson decision, and therefore relied on Jackson to affirm 
Bolden's conviction.  Bolden, 265 Wis. 2d 853, ¶11.  One year 
after Bolden, this court specifically addressed Kuehl and 
Jackson and reiterated the Cook rule that the court of appeals 
cannot overrule an earlier court of appeals decision.  State v. 
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Johnson, 2004 WI 94, ¶¶16-18, 273 Wis. 2d 626, 681 N.W.2d 901.  
Johnson 
overruled 
the 
language 
in 
Kuehl 
suggesting 
that 
disregarding a published court of appeals opinion is a valid 
option.  Id., ¶17.  Johnson reiterated that the court of appeals 
does not have the option of disregarding its published opinions. 
Despite Johnson's clear holding that the court of appeals cannot 
overrule itself, the court of appeals has, on a few occasions 
since Johnson, cited Bolden for the very proposition that was 
overruled in Johnson.  The majority cites the court of appeals 
decisions that have done so, see majority op., ¶78, most notably 
Swiams. 
¶92 Swiams ignored this court's holding in Johnson and 
cited Bolden for the erroneous proposition that the court of 
appeals may decline to follow a case that conflicts with an 
earlier case.  See Swiams, 277 Wis. 2d 400, ¶23.1  This court has 
repeatedly held that the court of appeals cannot overrule itself 
and therefore does not have the option to disregard one 
published decision so it can follow an earlier published 
decision.  The majority says so again here, thereby implicitly 
overruling the language in Swiams and any decision supporting 
the proposition that "if two court of appeals decisions 
conflict, the first governs."  I would expressly overrule such 
language. 
                                                 
1 This language in State v. Swiams, 2004 WI App 217, 277 
Wis. 2d 400, 690 N.W.2d 452, was dicta as it appears in the last 
paragraph of that opinion, almost as an aside, and was not 
necessary for disposition of the appeal.  Id., ¶23. 
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¶93 The majority emphasizes that Cook and Johnson hold 
that the court of appeals does not have the power to overrule 
itself.  The majority explains why it is so important that the 
court of appeals does not disregard one opinion and choose to 
follow an earlier opinion:  (1) the court of appeals does not 
have the authority to do so; (2) choosing to follow an earlier 
case is overruling the more recent case; and (3) courts' 
interpretations of whether cases conflict can widely differ.  
Majority op., ¶79.  Also, as noted in Cook, allowing the court 
of appeals to follow the first-decided case because it believes 
a later case conflicts would interfere with "predictability, 
certainty and finality relied upon by litigants" and encourage 
forum shopping in the four districts of the court of appeals.  
Cook, 208 Wis. 2d at 189.  For these important reasons, the 
court of appeals must abide by Cook, Johnson, and now this 
opinion, and stop disregarding one court of appeals decision 
because it believes an earlier decision should be followed. 
¶94 In this case, both the circuit court and the court of 
appeals decided that Grube, 173 Wis. 2d 30, and two other cases2 
were not good law, disregarded those opinions, and applied the 
law from an earlier court of appeals opinion, Professional 
Office Buildings, Inc. v. Royal Indemnity Co., 145 Wis. 2d 573, 
427 N.W.2d 427 (Ct. App. 1988).  That should not have happened.  
                                                 
2 The other two cases were Kenefick v. Hitchcock, 187 
Wis. 2d 218, 522 N.W.2d 261 (Ct. App. 1994), and Radke v. 
Fireman's Fund Insurance Co., 217 Wis. 2d 39, 577 N.W.2d 366 
(Ct. App. 1998). 
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Such action creates dangerous precedent for our court system.  
The circuit court should have followed the case law and the 
court of appeals should have certified Marks to this court to 
resolve any perceived conflict.  See Cook, 208 Wis. 2d at 190; 
Johnson, 273 Wis. 2d 626, ¶¶16-18. 
II.  GRUBE 
¶95 The majority overrules Grube, 173 Wis. 2d 30, Kenefick 
v. Hitchcock, 187 Wis. 2d 218, 522 N.W.2d 261 (Ct. App. 1994), 
and Radke v. Fireman's Fund Ins. Co., 217 Wis. 2d 39, 577 N.W.2d 
218, 522 N.W.2d 366 (Ct. App. 1998) as "inconsistent with a long 
line of Wisconsin case law," and "unsound in principle."  
Majority op., ¶¶73, 75.  The majority explicitly overrules any 
statements in these cases "that exclusions may not be considered 
in an analysis of whether an insurer has breached its duty to 
defend its insured" when the insurer unilaterally denies a 
defense without seeking a coverage determination in court.  Id., 
¶75. 
¶96 I agree with the majority that Wisconsin duty-to-
defend law requires comparing the complaint to the entire 
insurance policy, including exclusions.  See Estate of Sustache 
v. Am. Family Mut. Ins. Co., 2008 WI 87, ¶20, ¶¶22-23, 311 
Wis. 2d 548, 751 N.W.2d 845.  Instead of overruling Grube and 
its line of cases, however, I would harmonize it with 
Professional Office Buildings. 
¶97 In determining whether a duty to defend exists under a 
policy, the court compares the four corners of the complaint to 
the entire policy, including exclusions.  Estate of Sustache, 
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311 Wis. 2d 548, ¶¶22-23.  Typically, however, as the majority 
notes at ¶41, an examination of policy exclusions at the duty-
to-defend stage will not operate to relieve an insurer of its 
duty to defend.  This is because whether an exclusion applies to 
preclude coverage often depends on extrinsic evidence, which is 
not considered in the duty-to-defend analysis.  See Fireman's 
Fund Ins. Co. of Wis. v. Bradley Corp., 2003 WI 33, ¶19, 261 
Wis. 2d 4, 660 N.W.2d 666. 
¶98 This 
basic 
principle, 
together 
with 
a 
lack 
of 
consistency of language used in insurance cases, is what has 
created confusion in the Grube line of cases.  Grube, Kenefick, 
and Radke are often cited to argue that a court, which is asked 
to rule on a duty-to-defend question, cannot consider exclusions 
if an insurer unilaterally denied a defense to its insured.  Of 
course, this is not the law.  A duty-to-defend analysis always 
requires a comparison of the complaint to the entire policy, 
regardless of whether the insurer unilaterally denied a defense 
or chose one of the preferred methods to determine if a duty to 
defend was triggered by a complaint.  It is only when a court 
determines an insurer breached its duty to defend, after the 
court compares the complaint to the entire policy, that an 
insurer may no longer rely on exclusions to avoid its indemnity 
obligations under the policy.  See Professional Office Bldgs., 
Inc., 145 Wis. 2d at 585-86. 
¶99 In Grube, the circuit court determined the insurer 
breached its duty to defend after the court considered the 
entire policy, including exclusions.  Grube, 173 Wis. 2d at 49, 
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Unlike this case, the policy exclusions in Grube, when compared 
to the language in the complaint, did not preclude coverage.  It 
was the insurer's breach of its duty to defend, and not the 
decision to unilaterally decline to defend its insured, which 
later precluded the insurer in Grube from invoking coverage 
defenses.  The concluding paragraph in Grube makes this clear:  
"[the insurer], by not contesting coverage in court and by 
breaching its duty to defend [the insured], is estopped from 
raising any challenges to coverage and must indemnify [the 
insured] up to the limits of his policy."  What the majority 
interprets as a departure from Wisconsin insurance law was more 
likely the court of appeals abbreviating its analysis in a case 
where it agreed with the circuit court that an insurer breached 
its duty to defend.3  When a court determines the insurer 
breached the duty to defend, the insurer cannot use its 
exclusions to avoid paying out on the policy.  Professional 
Office Bldgs., Inc., 145 Wis. 2d at 585-86.  It is for this 
reason that we repeatedly caution insurers to opt for one of the 
preferred methods of determining coverage, see majority, ¶41 & 
n.21, rather than unilaterally refusing to defend. 
                                                 
3 The language in Grube v. Daun, 173 Wis. 2d 30, 74, 496 
N.W.2d 106 (Ct. App. 1992), triggering the confusion about 
whether it is the breach of the duty to defend or the unilateral 
decision of the insurer not to defend is as follows:  "We hold 
that under Professional Office Bldgs., [the insurer] is estopped 
from raising any challenges to coverage; it must both defend and 
indemnify [the insured] because [the insurer] denied coverage 
outright." 
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8 
 
¶100 This case, and a companion insurance case heard the 
same 
day, 
Water 
Well 
Solutions 
Service 
Group 
Inc. 
v. 
Consolidated Insurance Co., 2016 WI 54, ___ Wis. 2d ___, ___ 
N.W.2d ___, presented the less typical scenario where exclusions 
demonstrated the insurer did not have a duty to defend.  In this 
case, we hold that a comparison of the complaint to the business 
enterprise exclusion confirms the insurer did not have a duty to 
defend.  Majority op., ¶¶47-55.  In Water Well we hold that a 
comparison of the complaint to the "your product" exclusion 
confirms the insurer did not have a duty to defend.  Water Well 
Sols. Serv. Grp., ___ Wis. 2d ___, ¶3. 
¶101 For these reasons, I respectfully concur.    
 
 
 
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