Title: Anderson v. Aul

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2015 WI 19 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2013AP500 
COMPLETE TITLE: 
Melissa Anderson and Kenneth Anderson, 
          Plaintiffs-Appellants, 
     v. 
Thomas Aul, 
          Defendant-Respondent, 
Aul Real Estate Investment Company, LLC, 
Cornerstone  
Investments of Delafield, LLC, Riverside 
Investments, LLC,  
XYZ Insurance Company and ABC Insurance Company, 
          Defendants, 
Wisconsin Lawyers Mutual Insurance Company, 
          Intervenor-Respondent-Petitioner. 
 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
Reported at 353 Wis. 2d 238, 844 N.W.2d 636 
(Ct. App. 2014 – Published) 
PDC No: 2014 WI App 30 
 
 
OPINION FILED: 
February 25, 2015 
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
November 5, 2014 
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit 
 
COUNTY: 
Waukesha 
 
JUDGE: 
Lee S. Dreyfus Jr.  
 
 
 
JUSTICES: 
 
 
CONCURRED: 
ZIEGLER, CROOKS, ROGGENSACK, GABLEMAN, JJJJ., 
concur. (Opinion filed.) 
 
DISSENTED: 
      
 
NOT PARTICIPATING:          
 
 
 
ATTORNEYS: 
 
For the intervenor-respondent-petitioner, there were briefs 
by Claude J. Covelli and Boardman & Clark LLP, Madison, and oral 
argument by Claude J. Covelli. 
 
For the plaintiffs-appellants, there was a brief by Holly 
Strop and Strop Law Offices, LLC, Madison, and Jeffrey O. Davis, 
 
 
2 
Patrick S. Nolan, and Quarles & Brady LLP, Milwaukee. Oral 
argument by Jeffrey O. Davis.  
 
An amicus curiae brief was filed by Lee M. Seese and 
Michael Best & Friedrich LLP, Waukesha, on behalf of the 
Wisconsin 
Bankers 
Association 
and 
Wisconsin 
Realtors 
Association.  
 
 
 
 
 
 
 
2015 WI 19
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2013AP500 
(L.C. No. 
2012CV732) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Melissa Anderson and Kenneth Anderson, 
 
          Plaintiffs-Appellants, 
 
     v. 
 
Thomas Aul, 
 
          Defendant-Respondent, 
 
Aul Real Estate Investment Company, LLC, 
Cornerstone Investments of Delafield, LLC, 
Riverside Investments, LLC, XYZ Insurance 
Company and ABC Insurance Company, 
 
          Defendants, 
 
Wisconsin Lawyers Mutual Insurance Company, 
 
          Intervenor-Respondent-Petitioner. 
 
 
 
FILED 
 
FEB 25, 2015 
 
Diane M. Fremgen 
Clerk of Supreme Court 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed.   
 
¶1 
SHIRLEY S. ABRAHAMSON, C.J.   This is a review of a 
published court of appeals decision and order reversing a 
No. 
2013AP500   
 
2 
 
judgment of the Waukesha County Circuit Court, Lee S. Dreyfus, 
Jr., Judge.1 
¶2 
Melissa 
and 
Kenneth 
Anderson 
sued 
their 
former 
attorney, Thomas Aul, for legal malpractice.  Wisconsin Lawyers 
Mutual Insurance Company (WILMIC), Attorney Aul's professional 
liability insurer, intervened in the lawsuit.  WILMIC sought 
summary judgment declaring that the insurance policy it issued 
to Attorney Aul did not cover the Andersons' claim. 
¶3 
The WILMIC insurance policy provides coverage for 
those "claims that are first made against the insured and 
reported to the [insurance company] during the policy period" 
(emphasis added).  This type of policy is commonly known as a 
claims-made-and-reported policy. 
¶4 
Wisconsin's 
notice-prejudice 
statutes, 
Wis. 
Stat. 
§§ 631.81(1) and 632.26(2) (2011-12),2 provide that an insured's 
failure to furnish timely notice of a claim as required by the 
terms of a liability policy will not bar coverage unless timely 
notice was "reasonably possible" and the insurance company was 
"prejudiced" by the delay. 
                                                 
1 Anderson v. Aul, 2014 WI App 30, 353 Wis. 2d 238, 844 
N.W.2d 636. 
Justices Ann Walsh Bradley and David T. Prosser join this 
lead 
opinion. 
 
Justices 
N. 
Patrick 
Crooks, 
Patience 
D. 
Roggensack, and Michael J. Gableman join Justice Annette K. 
Ziegler's concurring opinion, which represents the majority 
opinion of the court.  See ¶106 n.1 of Justice Ziegler's 
opinion. 
2 All subsequent references to the Wisconsin Statutes are to 
the 2011-12 version unless otherwise indicated. 
No. 
2013AP500   
 
3 
 
¶5 
The question presented is whether Wisconsin's notice-
prejudice statutes supersede the WILMIC policy's requirement 
that claims be reported during the policy period.  If the 
notice-prejudice statutes supersede this reporting requirement, 
the next question is whether, under the notice-prejudice 
statutes, WILMIC was prejudiced by Attorney Aul's failure to 
report the claim during the policy period. 
¶6 
The parties agree that the Andersons' claim against 
Attorney Aul was first made during the policy period, that 
Attorney Aul did not report the claim during the policy period, 
and that reporting the claim during the policy period was 
reasonably possible.  They dispute whether the WILMIC policy's 
requirement that claims be reported during the policy period is 
governed by the notice-prejudice statutes and also whether 
WILMIC was prejudiced by Attorney Aul's failure to report the 
claim during the policy period. 
¶7 
Upon considering the text of the notice-prejudice 
statutes, the historical context of claims-made-and-reported 
policies, 
the 
statutory 
history 
of 
the 
notice-prejudice 
statutes, the consequences of alternative interpretations of the 
notice-prejudice statutes, and the purpose of claims-made-and-
reported policies, we conclude that Wisconsin's notice-prejudice 
statutes do not supersede the reporting requirement specific to 
claims-made-and-reported policies. 
¶8 
Because we conclude that the notice-prejudice statutes 
do not supersede the WILMIC policy's requirement that claims be 
reported within the policy period, we need not address whether, 
No. 
2013AP500   
 
4 
 
under the notice-prejudice statutes, WILMIC was prejudiced by 
Attorney Aul's failure to report the claim during the policy 
period.  However, even if we had determined that the notice-
prejudice statutes supersede this reporting requirement, WILMIC 
would prevail.  Requiring an insurance company to provide 
coverage for a claim reported after the end of a claims-made-
and-reported policy period is per se prejudicial to the 
insurance company. 
¶9 
Accordingly, the decision of the court of appeals is 
reversed. 
¶10 Our analysis is as follows:  After briefly setting 
forth the undisputed facts, we discuss the standards of review 
applicable to a review of summary judgment and to the 
interpretation 
and 
application 
of 
insurance 
policies 
and 
statutes.  We follow this discussion with an analysis of the 
nature 
and 
history 
of 
claims-made-and-reported 
insurance 
policies and the terms of the WILMIC policy at issue in the 
instant case.  Lastly, we interpret the relevant statutes, Wis. 
Stat. §§ 631.81(1) and 632.26(2), and discuss their application 
to the WILMIC policy. 
I 
¶11 The facts are not in dispute for purposes of this 
review. 
¶12 On December 23, 2009, Melissa and Kenneth Anderson's 
attorney notified Attorney Thomas Aul by letter that they "were 
dissatisfied with the legal representation [Attorney Aul had] 
provided."  The specific allegations were that Attorney Aul had 
No. 
2013AP500   
 
5 
 
an unwaivable conflict of interest in the Andersons' purchase of 
commercial property in downtown Delafield; that Attorney Aul 
nonetheless represented the Andersons in that transaction; that 
the terms of the transaction were "unfair and unreasonable"; and 
that 
the 
"transaction 
violate[d] 
the 
rules 
of 
attorney 
professional responsibility."  The Andersons demanded that 
Attorney Aul pay them $117,125. 
¶13 Attorney Aul received the letter from the Andersons' 
attorney while he was insured under the claims-made-and-reported 
professional liability policy issued by WILMIC. 
¶14 It is undisputed that the letter from the Andersons' 
attorney constituted a "claim first made against the insured" 
during the policy period (April 1, 2009, to April 1, 2010) and 
that the policy required Attorney Aul to report that claim to 
WILMIC during the same period.  Attorney Aul did not report the 
claim to WILMIC until March 2011, nearly a year after the policy 
period expired. 
¶15 A year later, in March 2012, the Andersons filed suit 
against Attorney Aul and several companies owned by Attorney 
Aul.3  The Andersons alleged breach of fiduciary duty, legal 
malpractice 
(negligence), 
breach 
of 
contract, 
and 
misrepresentation 
contrary 
to 
Wis. 
Stat. 
§ 100.18. 
 
The 
Andersons also sought punitive damages for Attorney Aul's 
                                                 
3 The companies named as defendants were: Aul Real Estate 
Investment Company, LLC; Cornerstone Investments of Delafield, 
LLC; and Riverside Investments, LLC. 
No. 
2013AP500   
 
6 
 
"malicious" conduct toward the Andersons "or his intentional 
disregard of the[ir] rights." 
¶16 In May 2012, WILMIC moved to intervene in the lawsuit 
and undertook Attorney Aul's defense under a reservation of 
rights.  The circuit court granted WILMIC's motion to intervene 
and bifurcated the case to address the issue of coverage first. 
¶17 WILMIC filed a motion for summary judgment, seeking a 
declaration that the insurance policy it had issued to Attorney 
Aul did not provide coverage for the Andersons' claim.  The 
circuit court granted WILMIC's motion for summary judgment.  In 
an oral ruling, the circuit court stated that it was "satisfied 
that Mr. Aul did not notify [WILMIC] in a timely fashion."  The 
circuit court further stated that "there's nothing in this 
record 
that 
indicates 
specifically 
that 
WILMIC 
has 
been 
prejudiced by this [untimely reporting], but that's not the 
standard as it presently exists. . . ." 
¶18 On appeal, the court of appeals reversed the summary 
judgment in WILMIC's favor and held that "[b]oth the applicable 
statutes . . . and our case law make it clear that the circuit 
court must determine whether untimely notice prejudiced an 
insurer; the finding of untimeliness is not solely dispositive."4  
The court of appeals then applied the definition of "prejudice" 
adopted by this court in Neff v. Pierzina, 2001 WI 95, ¶44, 245 
                                                 
4 Anderson, 353 Wis. 2d 238, ¶11. 
No. 
2013AP500   
 
7 
 
Wis. 2d 285, 629 N.W.2d 177,5 and concluded that because Attorney 
Aul's untimely reporting of the claim did not hinder WILMIC's 
"ability to investigate, evaluate, or settle [the] claim, 
determine coverage, or present an effective defense," WILMIC had 
not been prejudiced.6 
II 
¶19 Summary judgment is granted when there is no genuine 
issue as to any material fact and the moving party is entitled 
to judgment as a matter of law.7  "An appellate court reviews a 
summary judgment applying the same standards and methods used by 
the circuit court."8 
¶20 Whether summary judgment should be granted in the 
instant case depends on the interpretation of the WILMIC 
insurance policy and the interpretation and application of Wis. 
Stat. §§ 631.18 and 632.26, the notice-prejudice statutes.  
Interpretation 
and 
application 
of 
insurance 
policies 
and 
statutes are ordinarily questions of law this court decides 
                                                 
5 "Prejudice to the insurer in this context is a serious 
impairment of the insurer's ability to investigate, evaluate, or 
settle a claim, determine coverage, or present an effective 
defense, resulting from the unexcused failure of the insured to 
provide timely notice."  Neff v. Pierzina, 2001 WI 95, ¶44, 245 
Wis. 2d 285, 629 N.W.2d 177. 
6 Anderson, 353 Wis. 2d 238, ¶¶13, 16. 
7 Wis. Stat. § 802.08(2). 
8 Frost ex rel. Anderson v. Whitbeck, 2002 WI 129, ¶4, 257 
Wis. 2d 80, 654 N.W.2d 225. 
No. 
2013AP500   
 
8 
 
independently of the decisions of the circuit court and court of 
appeals but benefiting from their analyses. 
III 
¶21 Before examining the reporting requirement set forth 
as a condition of coverage in the claims-made-and-reported 
policy at issue in the instant case, we examine the nature and 
history of claims-made-and-reported policies, comparing them 
with other types of liability policies.  This background 
information helps inform our interpretation of the text of the 
WILMIC insurance policy and the notice-prejudice statutes. 
A 
¶22 There are two primary types of professional liability 
insurance 
policies: 
 
occurrence 
policies 
and 
claims-made 
policies.9  Claims-made policies are further divisible into two 
primary types:  pure claims-made policies and claims-made-and-
reported policies.10 
                                                 
9 See generally New Appleman on Insurance Law § 20.01[5][a] 
(Library ed.) (discussing occurrence-based and claims-made-based 
liability insurance).  See also Gerald Kroll, The "Claims Made" 
Dilemma in Professional Liability Insurance, 22 UCLA L. Rev. 
925, 
928-31 
(1974) 
(comparing 
occurrence 
and 
claims-made 
policies from the perspective of insurance companies and 
insureds). 
10 See Jeffrey P. Griffin, The Inapplicability of the 
Notice-Prejudice Rule to Pure Claims-Made Insurance Policies, 42 
Conn. L. Rev. 235, 246-47 (2009) (distinguishing claims-made-
and-reported policies from pure claims-made policies). 
Courts and commentators often imprecisely use the term 
"claims-made" when they are in fact referring to pure claims-
made policies or claims-made-and-reported policies. 
No. 
2013AP500   
 
9 
 
¶23 Occurrence policies provide coverage "if the negligent 
act or omission occurs within the policy period, regardless of 
the date . . . the claim is made or asserted."11  It is the 
timing of the event causing injury, not the assertion or 
reporting of a claim based on that injury, that triggers the 
initial grant of coverage.  An insurance company may be held 
liable under an occurrence policy for claims made long after the 
policy period has expired.  
¶24 An occurrence policy may, however, require the insured 
to provide notice of a claim "as soon as practicable" or within 
a stated period.  The requirement that notice be given to the 
insurance company "as soon as practicable" or within a stated 
period serves to maximize the insurance company's "opportunity 
to investigate, set reserves, and control or participate in 
negotiations with the third party asserting the claim against 
the insured."12 
                                                 
11 Griffin, supra note 10, at 239 (quoting Gulf Ins. Co. v. 
Dolan, 433 So. 2d 512, 514 (Fla. 1983)). 
12 Prodigy Commc'ns Corp. v. Ag. Excess & Surplus Ins. Co., 
288 S.W.3d 374, 380 (Tex. 2009) (internal quotations omitted) 
(citing Steven Plitt et al., Couch on Insurance § 186:13 (3rd 
ed. 1997)).  See also Underwood Veneer Co. v. London Guarantee & 
Accident Co., 100 Wis. 378, 381, 75 N.W. 996 (1898) ("The reason 
for 
requiring 
[immediate] 
notice 
is . . . to 
enable 
the 
[insurance company] to investigate the facts and circumstances 
of the accident while they [a]re fresh in mind, with the view of 
settling the loss . . . and, in case of a contest, to be 
prepared to defend the same . . . ."). 
No. 
2013AP500   
 
10 
 
¶25 In contrast, a pure claims-made policy provides 
coverage for claims made during the policy period.13  Like an 
occurrence policy, a pure claims-made policy may require the 
insured to provide notice "as soon as practicable" or within a 
stated period. 
¶26 A 
claims-made-and-reported 
policy, 
as 
its 
name 
suggests, provides coverage for claims both made and reported 
during the policy period.  To trigger an initial grant of 
coverage, the injured third party must make a claim against the 
insured during the policy period and the insured must report 
that claim to the insurance company within the same period.14  
The event upon which the claim is based can, and often does, 
occur before the policy came into existence.15 
¶27 Like 
occurrence 
policies 
and 
pure 
claims-made 
policies, a claims-made-and-reported policy can also contain a 
notice provision requiring the insured to give notice to the 
                                                 
13 See 5 Ronald E. Mallen & Jeffrey M. Smith, Legal 
Malpractice § 34:14 (5th ed. 2000). 
14 New Appleman on Insurance Law § 20.01[7][c] (stating that 
"coverage is triggered only where the third-party claim is 
asserted against the policyholder during the policy period and 
the policyholder notifies the carrier of the claim during the 
policy period" (emphasis in original)). 
15 1 Arnold P. Anderson, Wisconsin Insurance Law § 5.4 (6th 
ed. 2013) ("The claims-made policy usually provides coverage for 
negligent acts that occurred before the policy's effective 
date . . . ."). 
No. 
2013AP500   
 
11 
 
insurance company "as soon as practicable" or within a stated 
period.16  
¶28 The requirement in a claims-made-and-reported policy 
that claims be reported within the policy period and the 
requirement that notice be provided "as soon as practicable" or 
within a stated period are distinct and serve different 
purposes.17  The requirement that claims be reported during the 
policy period "is directed to the temporal boundaries of the 
policy's basic coverage terms . . . ."18  If the claim is not 
reported within the policy period, there is no initial grant of 
coverage.  As we stated previously, the purpose of the 
requirement that notice be given "as soon as practicable" or 
within a stated period is to enable the insurance company to 
begin investigating the claim. 
                                                 
16 See Griffin, supra note 10, at 247 ("The insuring 
agreements 
in 
[claims-made-and-reported] 
policies 
typically 
state that 'the insured shall, as a condition precedent to their 
rights under this policy, give written notice as soon as 
practicable to the company of a claim made against the 
insured . . . ."). 
17 See Chas. T. Main, Inc. v. Fireman's Fund Ins. Co., 551 
N.E.2d 28, 29 (Mass. 1990) ("There are, in general, two types of 
notice 
requirements . . . . 
One 
is 
a 
requirement 
that 
notice . . . be 
given 
to 
the 
insurer 
'as 
soon 
as 
practicable' . . . . The other . . . requires reporting of the 
claim during the term of the policy . . . . The purposes of the 
two types of reporting requirements differ sharply."). 
18 Prodigy Commc'ns Corp., 288 S.W.3d at 380 (citing Steven 
Plitt et al., Couch on Insurance § 186:13 (3rd ed. 1997)). 
No. 
2013AP500   
 
12 
 
¶29 Not surprisingly, these two provisions (the reporting 
requirement specific to claims-made-and-reported policies and 
the notice requirement in all three kinds of liability policies) 
have been confused by practitioners and the judiciary.19  This 
confusion can make it difficult to interpret notice-prejudice 
statutes and the cases discussing them. 
¶30 Occurrence policies once dominated the professional 
liability insurance market.20  However, in the late 1960s and 
early 1970s, pure claims-made policies and claims-made-and-
reported policies began gaining favor in the professional 
liability insurance market as an antidote to the problems 
arising with occurrence insurance.21 
                                                 
19 Steven Plitt et al., Couch on Insurance § 186:13 (3rd ed. 
1997). 
20 See Sol Kroll, "Claims Made" - Industry's Alternative: 
"Pay as You Go" Products Liability Insurance, 1976 Ins. L.J. 63, 
64 (1976) (discussing the history of liability insurance and the 
industry's transition from occurrence-based to "claims made"-
based policies). 
21 John K. Parker, The Untimely Demise of the "Claims Made" 
Insurance Form?  A Critique of Stine v. Continental Casualty 
Company, 1983 Det. C. L. Rev. 25, 28-29 (1983).  See also 
Carolyn M. Frame, "Claims-Made" Liability Insurance: Closing the 
Gaps With Retroactive Coverage, 60 Temp. L.Q. 165, 171 (1987) 
("In an attempt to reverse escalating losses, insurers developed 
the claims-made policy to replace the occurrence policy.").  See 
also Gerald Kroll, The "Claims Made" Dilemma in Professional 
Liability Insurance, 22 UCLA L. Rev. 925, 927 (1974) ("[T]he 
'claims made' policy can be advantageous to both insureds and 
insurers and deserves preservation."). 
For a general discussion of this history, see Griffin, 
supra note 10, at 239-46. 
No. 
2013AP500   
 
13 
 
¶31 The primary drawback of occurrence-based professional 
liability policies is that the insurance company faces long tail 
exposure.  "This 'tail' is the lapse of time between the date of 
the error and the time the claim is made."22  Long tail exposure 
prevents insurance companies from making a precise calculation 
of premiums based upon the cost of the risks assumed.23   
¶32 In contrast, "[t]he principal advantage of the claims-
made policy for insurers is the avoidance of 'tail liability.'  
After termination of a policy, the claims-made insurer is no 
longer exposed to liability . . . ."24  In addition, because pure 
claims-made policies and claims-made-and-reported policies are 
advantageous to insurance companies, they apparently result in 
lower premiums for the insured.25 
¶33 By 
the 
mid-1980s, 
there 
was 
"almost 
universal 
acceptance of the 'claims made' insurance form."26  "Most recent 
                                                 
22 Zuckerman v. Nat'l Union Fire Ins. Co., 495 A.2d 395, 399 
(1985). 
23 Zuckerman, 495 A.2d at 399. 
Occurrence policy premiums have proven to be "inadequate to 
cover the inflationary increase in the cost of settling claims 
asserted years later."  Id.  Furthermore, the insurance company 
may no longer be in existence when the claim is finally made.  
Id. 
24 Frame, supra note 21, at 166 (footnote omitted). 
25 Griffin, supra note 10, at 244-45. 
26 Parker, supra note 21, at 32.  See also, e.g., Zuckerman, 
495 A.2d 395; Gulf Ins. Co., 433 So. 2d 512; Poirier v. Nat'l 
Union Fire Ins. Co., 517 So. 2d 225 (Ct. App. La. 1987). 
No. 
2013AP500   
 
14 
 
forms [for legal malpractice insurance] are 'claims-made-and-
reported,' requiring that the claim first be made against the 
insured and reported to the insurer within the policy term."27 
B 
¶34 With this background regarding the three main types of 
professional liability insurance policies in mind, and cognizant 
of the distinction between the reporting requirement specific to 
claims-made-and-reported policies and the notice requirement 
that may appear in all three types of policies, we turn to the 
text of the WILMIC insurance policy. 
¶35 The requirement that all claims made against the 
insured during the policy period be reported to WILMIC during 
the policy period is set forth in several places within the 
policy. 
¶36 First, the declarations page of the insurance contract 
states:  "This policy is limited to liability for only those 
claims that are first made against the insured and reported to 
the Company during the policy period.  This is a non-renewable 
policy." 
¶37 Second, the introduction to the reissue application 
that Attorney Aul submitted to WILMIC in 2009, which is 
incorporated into the policy, begins by stating:  "Because 
claims made and reported policies expire each year, it is 
                                                 
27 5 Mallen & Smith, supra note 13, § 34:14. 
No. 
2013AP500   
 
15 
 
critical that you report claims promptly and before your policy 
expires" (emphasis in policy). 
¶38 Third, a box titled "IMPORTANT NOTICE" on the cover of 
the policy booklet states: "THIS IS A CLAIMS MADE AND REPORTED 
INSURANCE POLICY.  COVERAGE IS LIMITED TO LIABILITY FOR ONLY 
THOSE CLAIMS THAT ARE FIRST MADE AGAINST YOU AND REPORTED IN 
WRITING TO US DURING THE POLICY PERIOD.  THIS IS A NONRENEWABLE 
POLICY" (emphasis in policy). 
¶39 Fourth, the first paragraph of Article I of the 
insurance policy (titled "COVERAGE AGREEMENTS") states: 
This insurance applies to claims first made against 
you and first reported to us in writing during the 
policy period that result from wrongful acts that 
occur after the retroactive date, if any.  You must 
send a written report of a claim or claim incident to 
us at our address set forth on the declarations page 
during the policy period. . . . Your failure to send a 
written report of a claim or claim incident to us 
within the policy period shall be conclusively deemed 
prejudicial to us. 
(Emphasis in policy.) 
¶40 Fifth, Article IV of the insurance policy (titled 
"CONDITIONS") states: 
A.  Notice of claim, claim incident or suit 
1. 
As a condition of this insurance coverage, 
you shall, within this policy period: 
 
a. give us written notice of any claim or 
claim incident; and 
 
b. immediately forward to us every demand, 
notice, summons or other process received 
directly 
by 
you 
or 
by 
your 
representatives, in the event suit is 
brought against you. 
No. 
2013AP500   
 
16 
 
2. 
The written notice of a claim or claim 
incident shall include the: 
a. date or dates of the alleged wrongful 
act, error or omission; and 
b. injury or damages that have resulted or 
may result; and 
c. circumstances by which you first became 
aware of such alleged wrongful act. 
(Emphasis in policy.) 
¶41 Finally, Article V of the insurance policy (titled 
"EXCLUSIONS") states: 
We will not defend or pay, under this coverage: 
. . . . 
J.  Any claim or claim incident not reported in 
writing within the time period required in 
Article IV, Conditions. 
(Emphasis in policy.) 
¶42 The text of the WILMIC insurance policy clearly 
states, and the parties do not dispute, that the policy's 
coverage is limited to those claims that were first made against 
Attorney Aul and first reported in writing to WILMIC between 
April 1, 2009, and April 1, 2010.  As we discussed previously, 
the purpose of restricting coverage to claims both made and 
reported during the policy period is to set "the temporal 
boundaries of the policy's basic coverage terms," that is, to 
"define[ ] the limits of the insurer's obligation."28 
                                                 
28 13 Steven Plitt et al., Couch on Insurance § 186:13 (3rd 
ed. 1997). 
No. 
2013AP500   
 
17 
 
¶43 Neither party asks the court to rewrite the insurance 
policy (a task we will not undertake) to bind WILMIC to a risk 
it "did not contemplate and for which it has not been paid."29  
Rather, the parties dispute the effect of the notice-prejudice 
statutes on the WILMIC policy's reporting requirement. 
¶44 We therefore turn to the notice-prejudice statutes. 
IV 
¶45 There are two notice-prejudice statutes at issue in 
the instant case. 
¶46 First is Wis. Stat. § 631.81(1), which applies to all 
insurance policies delivered in this state30 and provides that 
failure to furnish "notice or proof of loss" within the time 
required by the policy will "not invalidate or reduce a claim 
unless the insurer is prejudiced thereby and it was reasonably 
possible to meet the time limit."  The text of § 631.81(1) reads 
as follows: 
(1) 
Timeliness of notice. Provided notice or proof of 
loss is furnished as soon as reasonably possible 
and within one year after the time it was 
required by the policy, failure to furnish such 
notice or proof within the time required by the 
policy does not invalidate or reduce a claim 
unless the insurer is prejudiced thereby and it 
was reasonably possible to meet the time limit. 
                                                 
29 Smith v. Katz, 226 Wis. 2d 798, 807, 595 N.W.2d 345 
(1999) ("It is important to remember that 'a contract of 
insurance is not to be rewritten by the court to bind an insurer 
to a risk which the insurer did not contemplate and for which it 
has not been paid.'"). 
30 See Wis. Stat. § 631.01(1). 
No. 
2013AP500   
 
18 
 
¶47 Second is Wis. Stat. § 632.26, which applies to "every 
liability insurance policy" delivered in this state31 and 
provides that an insured's failure to give any notice required 
by the policy will not preclude coverage if it was not 
reasonably possible to give the prescribed notice, notice was 
given as soon as reasonably possible,32 and the insurance company 
was not prejudiced by the late notice.33  The statute further 
states that "the risk of nonpersuasion is upon the person 
claiming there was no prejudice."34  The text of Wis. Stat. 
§ 632.26 reads as follows: 
(1) Required provisions.  Every liability insurance 
policy shall provide: 
 . . . . 
(b) That failure to give any notice required by the 
policy within the time specified does not invalidate a 
claim made by the insured if the insured shows that it 
was not reasonably possible to give the notice within 
the prescribed time and that notice was given as soon 
as reasonably possible. 
(2) Effect of failure to give notice.  Failure to give 
notice as required by the policy as modified by sub. 
(1)(b) does not bar liability under the policy if the 
insurer was not prejudiced by the failure, but the 
risk of nonpersuasion is upon the person claiming 
there was no prejudice. 
                                                 
31 Wis. Stat. § 632.26(1). 
32 Wis. Stat. § 632.26(1)(b). 
33 Wis. Stat. § 632.26(2). 
34 Id. 
No. 
2013AP500   
 
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¶48 We are faced with a difficult and close question of 
statutory 
interpretation, 
namely 
whether 
these 
statutes 
supersede the terms of the WILMIC policy that limit its coverage 
to those claims that are first made against Attorney Aul and 
first reported to WILMIC within the policy period.  We resolve 
this 
question 
by 
employing 
the 
tools 
of 
statutory 
interpretation. 
¶49 The court has set forth the tools of statutory 
interpretation many times.  "Our goal in interpreting a statute 
is 
to 
discern 
and 
give 
effect 
to 
the 
intent 
of 
the 
legislature."35  We begin with the statute's text.36  "Words are 
ordinarily interpreted according to their common and approved 
usage; 
technical 
words 
and 
phrases . . . are 
ordinarily 
interpreted according to their technical meaning."37  We read 
statutes as a whole and "give effect to each word" in the 
statute "to avoid surplusage."38 
¶50 "[I]t is often valuable to examine the statute in 
context."39  "[C]ontext inflects statutory interpretation."40  
                                                 
35 Hubbard v. Messer, 2003 WI 145, ¶9, 267 Wis. 2d 92, 673 
N.W.2d 676. 
36 Legue v. City of Racine, 2014 WI 92, ¶61, 357 Wis. 2d 250, 849 N.W.2d 837. 
37 Id. 
38 Id. 
39 Seider v. O'Connell, 2000 WI 76, ¶43, 236 Wis. 2d 211, 
612 N.W.2d 659.  
40 Id., ¶45. 
No. 
2013AP500   
 
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"The statutory language is examined in the context in which it 
is used."41  Context refers not only to the language of the 
statute but also to the relationship of the statute at issue 
with other statutes.42  Context can also mean the factual 
setting.43  The same statute may be "ambiguous in one setting and 
unambiguous in another."44  "[R]easonable minds can differ about 
a statute's application when the text is a constant but the 
circumstances to which the text may apply are kaleidoscopic."45 
¶51 To determine a statute's meaning, we examine the 
statutory history and case law.  In addition, the purpose of the 
statute and "the consequences of alternative interpretations" 
inform our interpretation.46  We decline to read statutes in a 
way that produces absurd, implausible, or unreasonable results, 
or results that are at odds with the legislative purpose.47 
¶52 We begin our interpretation of the notice-prejudice 
statutes with the statutory texts. 
                                                 
41 Klemm v. Am. Transmission Co., 2011 WI 37, ¶10, 333 
Wis. 2d 580, 798 N.W.2d 223. 
42 Seider, 236 Wis. 2d 211, ¶43. 
43 Id. 
44 Id. 
45 Id. 
46 Legue, 357 Wis. 2d 250, ¶61. 
47 Hubbard, 267 Wis. 2d 92, ¶9. 
No. 
2013AP500   
 
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¶53 On their face, these statutes can be read to prohibit 
an insurance company from denying coverage under a liability 
policy because notice of a claim was given after the end of the 
policy period, unless the insurance company was prejudiced by 
the delay.  The Andersons urge us to adopt this reading of the 
statutes and to invalidate the WILMIC policy's requirement that 
claims be reported during the policy period.  They argue that 
the statutes supersede this requirement. 
¶54 The only court that has considered Wisconsin's notice-
prejudice statutes in the context of a claims-made-and-reported 
policy is the United States Court of Appeals for the Seventh 
Circuit.48  In Lexington Insurance Co. v. Rugg & Knopp, Inc., 165 
F.3d 1087 (7th Cir. 1999), the federal court of appeals adopted 
the literal reading of the statutes advanced by the Andersons in 
the present case.  In adopting this interpretation, the federal 
court of appeals was greatly influenced by its limited role as a 
federal court sitting in diversity on a case requiring the 
interpretation of Wisconsin law.49 
¶55 The insurance policy at issue in Lexington Insurance 
required that any claim made within the policy period be 
reported to the insurance company within 30 days of the policy's 
expiration.  The federal court of appeals first noted that if 
interpretation of the insurance policy were the only issue, 
                                                 
48 Lexington Ins. Co. v. Rugg & Knopp, Inc., 165 F.3d 1087 
(7th Cir. 1999). 
49 Id. at 1092. 
No. 
2013AP500   
 
22 
 
there would be no coverage because the insured indisputably 
failed to report the claim as required by the policy.50  It then 
examined Wisconsin's notice-prejudice statutes, noting that "a 
federal court sitting in diversity must proceed with caution in 
making pronouncements about state law."51 
¶56 The 
federal 
court 
of 
appeals 
concluded 
that, 
regardless of the type of policy, the insurance company could 
not “refuse liability for payment merely because of late 
notice."52  It based this determination on the literal words of 
the statutes, holding that on their face, the notice-prejudice 
statutes provide that in Wisconsin, an insurance company may not 
contractually limit its liability to claims reported within the 
policy period.53 
 
¶57 Nevertheless, the federal court of appeals recognized 
that statutory interpretation does not end with an examination 
of the statute's text.54  We agree.  Although the literal reading 
of a statute is important, a court is not bound by that reading 
when other factors contradict it.  A statute that has 
superficial clarity may nevertheless contain latent ambiguities, 
                                                 
50 Id. at 1089. 
51 Id. at 1092. 
52 Id. at 1094. 
53 Id. at 1092. 
54 Id. at 1091-92. 
No. 
2013AP500   
 
23 
 
and courts may turn to various interpretive aids for guidance in 
resolving them.55 
¶58 The notice-prejudice statutes state that they apply to 
all liability policies, but as we explained previously, there 
are three different types of professional liability policies 
with two different types of notice and reporting requirements.  
The statutes do not differentiate between the notice requirement 
that may be included in any of the three types of liability 
policies and the reporting requirement particular to claims-
made-and-reported policies. 
¶59 We conclude after a close examination of the notice-
prejudice statutes that they were not intended to supersede the 
reporting 
requirement 
specific 
to 
claims-made-and-reported 
policies.  
¶60 We begin by examining the context of the statutes, 
including the historical context of occurrence and claims-made-
and-reported policies, as well as the statutory history. 
¶61 We discussed previously the history of claims-made-
and-reported policies.  Claims-made-and-reported policies were 
relatively new to the liability insurance market in the 1970s.  
Occurrence liability policies were predominant. 
¶62 Wisconsin 
Stat. 
§ 631.81 
was 
enacted 
in 
1975.56  
Wisconsin Stat. § 632.26 was enacted in 1979.57  Thus, both 
                                                 
55 2A Norman Singer & Shambie Singer, Sutherland Statutes 
and Statutory Construction § 46:4 (7th ed. 2008). 
56 Ch. 375, Laws of 1975. 
No. 
2013AP500   
 
24 
 
notice-prejudice statutes were enacted when occurrence liability 
policies were predominant.  These notice-prejudice statutes were 
part of a broader revision of Wisconsin's insurance laws in 
response to recommendations made by the Insurance Laws Revision 
Committee of the Wisconsin Legislative Council.  The minutes 
from this Committee's meetings are not helpful in determining 
whether the notice-prejudice statutes were intended to reach the 
reporting 
requirement 
specific 
to 
claims-made-and-reported 
policies. 
¶63 Based, however, on the timing of the development of 
claims-made-and-reported insurance and the enactment of the 
notice-prejudice statutes, it is plausible that the Committee 
and the legislature were thinking of the traditional requirement 
that insureds provide notice "as soon as practicable" or within 
a stated period, not the reporting requirement specific to 
claims-made-and-reported policies. 
¶64 We turn now to statutory history, that is, to the 
predecessor statutes to Wis. Stat. §§ 631.81 and 632.26, for 
insight into the scope of these notice-prejudice statutes and 
their applicability to the reporting requirement in claims-made-
and-reported policies. 
¶65 The historical context of the statutes begins with 
Bachhuber v. Boosalis, 200 Wis. 574, 229 N.W. 117 (1930), which 
                                                                                                                                                             
57 Ch. 102, Laws of 1979. 
No. 
2013AP500   
 
25 
 
involved an occurrence-based automobile liability policy.58  
After a collision, the insured was charged with "negligence 
causing the damage."59  The insurance company argued that the 
insured was not covered under the policy because he failed to 
comply with the policy's notice provisions.60  The policy 
required 
the 
insured 
to 
give 
"immediate 
notice 
of 
the 
accident . . . and immediate notice of the claim."61  This court 
agreed with the insurance company: "The provisions in the policy 
as to notice . . . are conditions precedent, failure to perform 
which . . . constitutes 
[a] defense[] to liability on the 
policy" (emphasis added).62 
¶66 The important words are "conditions precedent."  A 
condition 
precedent 
is 
an 
event that 
must 
occur before 
performance under a contract becomes due.63  In other words, 
                                                 
58 For earlier cases requiring compliance with an insurance 
policy's notice requirements in order to gain coverage, see 
Britz v. Am. Ins. Co., 2 Wis. 2d 192, 199-200, 86 N.W.2d 18 
(1957). 
59 Bachhuber v. Boosalis, 200 Wis. 574, 575, 229 N.W. 117 
(1930). 
60 Id. 
61 Id. 
62 Id. 
63 Restatement (Second) of Contracts § 224, at 160 (1981).  
The 
Restatement 
(Second) 
of 
Contracts 
abandons 
the 
term 
"condition precedent" in favor of "condition."  Id. at 164.  The 
Reporter's Note to § 224 states that the phrase "condition 
precedent" has been the subject of frequent criticism and has 
caused unnecessary confusion.  Id. 
(continued) 
No. 
2013AP500   
 
26 
 
there is no coverage under the policy until the condition 
precedent has been performed.64  Thus, by construing the 
occurrence 
policy's 
"immediate 
notice" 
requirement 
as 
a 
condition precedent, the Bachhuber court determined that no 
coverage existed under the policy in the absence of "immediate 
notice." 
¶67 Bachhuber reflects what was then the prevailing 
interpretation of policy provisions requiring notice "as soon as 
                                                                                                                                                             
For a discussion of the use of the phrase "condition 
precedent," see Fox v. Catholic Knights Ins. Soc'y, 2003 WI 87, 
¶¶23-24, 263 Wis. 2d 207, 665 N.W.2d 181. 
64 See Richard Lord, 16 Williston on Contracts § 49:87 (4th 
ed. 2000) (stating that when an insurance contract contains a 
condition precedent, "the fulfillment of the condition by the 
insured must occur before the insurer becomes legally liable on 
the policy").  See also id., § 49:109 ("Insurance contracts 
quite commonly contain, as an express condition precedent to the 
insurer's duty to defend or indemnify the insured, a provision 
requiring the insured to give notice to the insurer, within a 
specified or reasonable time . . . . [L]iability will arise only 
when notice is given."). 
No. 
2013AP500   
 
27 
 
practicable" or within a stated time.65  Such provisions were 
considered 
"of 
the 
essence 
of 
the 
[liability 
insurance] 
contract."66  Even when the liability policy lacked a forfeiture 
clause, an insured's failure to provide notice "as soon as 
practicable" or within a stated time would usually "release the 
insurer from liability."67  In other words, there was no coverage 
                                                 
65 See L.S. Elkins, Annotation, Liability Insurance: Clause 
with Respect to Notice of Accident, Claim, etc., or with Respect 
to Forwarding Suit Papers, 76 A.L.R. 23, 53-74 (1932) (surveying 
cases 
holding 
that 
liability 
policy 
provisions 
requiring 
immediate notice or notice within a reasonable time create 
conditions precedent to the insurance company's obligation to 
pay); Restatement of Contracts § 259, at 371 (1932) ("Though 
failure by [the insured] to notify the [insurance company] 
within the 30-day period is stated as a condition subsequent 
terminating a duty to pay, such notification is in effect a 
condition precedent, since there is no duty of immediate 
performance until notification has been given.").  See also 
Foster v. Fid. & Cas. Co., 99 Wis. 447, 449, 75 N.W. 69 (1898) 
(because the insured failed to fulfill the condition precedent 
of providing immediate notice of "any accident or injury for 
which a claim is to be made," judgment in the insured's favor 
was reversed). 
66 L.S. Elkins, Annotation, Liability Insurance: Clause with 
Respect to Notice of Accident, Claim, etc., or with Respect to 
Forwarding Suit Papers, 76 A.L.R. 23, 58 (1932). 
67 L.S. Elkins, Annotation, Liability Insurance: Clause with 
Respect to Notice of Accident, Claim, etc., or with Respect to 
Forwarding Suit Papers, 76 A.L.R. 23, 201-02 (1932). 
(continued) 
No. 
2013AP500   
 
28 
 
under the policy when an insured did not comply with a condition 
precedent such as notice within a specified time. 
¶68 The Wisconsin legislature responded swiftly to the 
harsh result in Bachhuber by enacting Wis. Stat. § 204.33 (1931-
32).68  This notice-prejudice statute provided that failure to 
give timely notice would not bar coverage if the insurance 
company was not prejudiced by the delay.  The effect of the 
statute was to expand certain policies' coverage.  The statute 
applied, however, only to "liability or loss arising by reason 
of the ownership, maintenance or use of a motor vehicle issued 
in this state."69  The statute reads in relevant part as follows: 
(3) . . . . Failure to give [timely] notice shall not 
bar liability under such policy of insurance, 
                                                                                                                                                             
Even now, "a vast majority of notice provisions are 
described 
as 
conditions 
precedent 
to 
recovery 
under 
the 
policies."  13 Steven Plitt et al., Couch on Insurance § 186:41 
(3rd ed. 1997).  However, many courts do not apply the "strict 
forfeiture" rule when an insured fails to fulfill the condition 
precedent that notice be provided "as soon as practicable" or 
within a stated time.  Steven Plitt et al., Couch on Insurance 
§ 186:6 (3rd ed. 1997).  "A recent survey places 11 states and 
the 
District 
of 
Columbia 
in 
this 
[strict 
forfeiture] 
category . . . ; 25 states require some showing of prejudice 
from the insurer."  Id. 
68 See ch. 477, Laws of 1931; Britz, 2 Wis. 2d at 201. 
69 Wis. Stat. § 204.33(1) (1931-32).  See RTE Corp. v. 
Maryland Cas. Co., 74 Wis. 2d 614, 631, 247 N.W.2d 171 (1976) 
(holding that "[t]his court has consistently treated the rule 
established in the [notice-prejudice] statute as an exception to 
the general rule" that insurance companies need not show 
prejudice to bar coverage based on an insured's failure to 
fulfill the condition precedent of providing notice "as soon as 
practicable" or within a stated time.). 
No. 
2013AP500   
 
29 
 
agreement 
of 
indemnity 
or 
bond . . . if 
the 
insurer was not prejudiced or damaged by such 
failure, but the burden of proof to so show shall 
be upon the person claiming such liability.70 
¶69 Bachhuber was followed by Britz v. American Insurance 
Co., 2 Wis. 2d 192, 202, 86 N.W.2d 18 (1957).  Britz did not 
involve an automobile accident; it involved theft.  The parties 
disputed whether the notice-prejudice statute applied to the 
insurance policy at issue, which required notice "as soon as 
practicable."  The court concluded that the statute's explicit 
reference to automobile liability policies was dispositive.  
Insurance companies could deny coverage under non-automobile 
liability insurance policies when the insured failed to provide 
notice within the period stated in the policy. 
¶70 A decade later, Allen v. Ross, 38 Wis. 2d 209, 156 
N.W.2d 434 (1968), involved an automobile liability policy.  The 
policy provided that notice had to be given to the insurance 
company "as soon as practicable" after an accident occurred.  
The court declared that the automobile liability policy's notice 
requirement was subject to the notice-prejudice statute.71 
¶71 Thus, by the mid-1970s, it was well settled that the 
notice-prejudice statute then in existence applied only to 
automobile liability policies.  The statute had not been applied 
                                                 
70 Wis. Stat. § 204.33(3) (1931-32). 
71 Allen v. Ross, 38 Wis. 2d 209, 213, 156 N.W.2d 434 
(1968). 
No. 
2013AP500   
 
30 
 
to any non-automobile liability policy or to the reporting 
requirement specific to claims-made-and-reported policies. 
¶72 In 1975, the legislature modified and reenacted the 
notice-prejudice statute as Wis. Stat. § 631.81.  The scope of 
the notice-prejudice statute's applicability was expanded from 
automobile liability policies to "all insurance policies."72   
¶73 It is clear the legislature intended Wis. Stat. 
§ 631.81 to reach beyond automobile liability polices, but 
neither the text of the revised statute nor the Committee 
comments discussing the provision addresses the distinction 
between the requirement that notice be provided "as soon as 
practicable" or within a stated period and the reporting 
requirement specific to claims-made-and-reported policies. 
¶74 Although it is not clear from the statutory history or 
Committee materials we located that the legislature intended 
this notice-prejudice statute to reach beyond the traditional 
type of notice requirement, the Committee comments to Wis. Stat. 
§ 631.81 are helpful.  They seem to signify that the statute 
does not reach the reporting requirement specific to claims-
made-and-reported policies.   
¶75 The Comments state that "[t]he proper time for giving 
notice of a loss or injury depends on the nature of the 
coverage . . . . In each class of insurance, the interests of 
the insured and insurer must be carefully evaluated and weighed 
                                                 
72 Ch. 375, Laws of 1975, § 41, Leg. Council Note to 
631.81(1). 
No. 
2013AP500   
 
31 
 
against each other."73  The Comments then provide the following 
example: "For instance, the conditions for hospitalization 
benefits in case of plain sickness insurance are easy to check 
even after some time . . . . The insurer's position in adjusting 
such claims may not be materially affected if it receives the 
hospital or doctors' bills months later."74   
¶76 These Comments suggest that the statute refers to the 
kind of notice provision that enables an insurance company to 
effectively 
investigate 
a 
claim, 
not 
to 
the 
reporting 
requirement 
in 
claims-made-and-reported 
policies. 
 
As 
we 
explained 
previously, 
the 
requirement 
in 
claims-made-and-
reported policies that claims be reported during the policy 
period is not designed to assist the insurance company in 
investigating those claims.  It therefore appears that Wis. 
Stat. § 631.81 does not reach the reporting requirement specific 
to claims-made-and-reported policies. 
¶77 Wisconsin Stat. § 632.26 was enacted in 1979, just 
four years later.75  The statute explicitly states that it 
applies to "[e]very liability insurance policy."76  The statute 
again 
fails, 
however, 
to 
distinguish 
between 
a 
policy 
requirement that notice be provided "as soon as practicable" or 
                                                 
73 Id. 
74 Id. 
75 See ch. 102, Laws of 1979. 
76 Wis. Stat. § 632.26(1). 
No. 
2013AP500   
 
32 
 
within a stated period and the reporting requirement specific to 
claims-made-and-reported policies.  Again, it is not clear from 
the 
statutory 
history 
or 
Committee 
materials 
that 
the 
legislature intended this notice-prejudice statute to reach 
beyond the traditional type of notice requirement to the 
reporting 
requirement 
specific 
to 
claims-made-and-reported 
policies. 
¶78 There is no indication from the historical context of 
claims-made-and-reported policies or the statutory history that 
the legislature intended to extend the reach of the notice-
prejudice statutes to the reporting requirement specific to 
claims-made-and-reported policies. 
¶79 To aid us in reaching the correct interpretation of 
the notice-prejudice statutes, we next examine the consequences 
of alternative interpretations. 
¶80 If we interpret the notice-prejudice statutes as 
inapplicable to the reporting requirement specific to claims-
made-and-reported 
policies, 
the 
consequence 
is 
that 
such 
reporting requirements will remain in full force and effect and 
an insured may lose coverage by missing the reporting deadline.  
Strictly limiting the time in which an insured must report a 
claim can lead to harsh results for the insured and third-party 
victims.  Indeed, in the present case, the Andersons can be 
viewed as being victimized twice; first they were allegedly 
harmed by Attorney Aul's negligence in representing them and now 
they are harmed by Attorney Aul's failure to abide by the WILMIC 
policy's reporting requirement. 
No. 
2013AP500   
 
33 
 
¶81 Furthermore, 
we 
are 
concerned 
that 
a 
decision 
favorable to WILMIC in the present case may open the door for 
insurance 
companies 
to 
incorporate 
similar 
reporting 
requirements into a wide range of insurance policies and thereby 
circumvent the consumer protection aspects of these notice-
prejudice statutes. 
¶82 Yet, if we interpret the notice-prejudice statutes to 
apply to the reporting requirement specific to claims-made-and-
reported policies, we will in effect rewrite the terms of such 
policies.  This interpretation would mean the legislature has 
eliminated a significant element of claims-made-and-reported 
policies.  The reporting requirement, after all, is what 
distinguishes claims-made-and-reported policies from other kinds 
of liability policies.  Thus, claims-made-and-reported policies 
would be converted into pure claims-made policies or occurrence 
policies.  Such an interpretation would frustrate the purpose of 
claims-made-and-reported policies.77 
¶83 We did not locate anything in the statutory text, the 
history of claims-made-and-reported policies, the statutory 
history, 
or 
the 
Committee 
materials 
indicating 
that 
the 
                                                 
77 "The ultimate threat (and evidence of prejudice) is that 
allowing late notice will turn a claims-made policy into an 
occurrence policy, which could make insurance difficult to 
obtain for . . . professional liability.  Insurers do not write 
occurrence policies for such risks because it is unprofitable 
and difficult to underwrite."  1 Arnold P. Anderson, Wisconsin 
Insurance Law § 5.10 (6th ed. 2013). 
No. 
2013AP500   
 
34 
 
legislature 
intended 
to 
invalidate 
claims-made-and-reported 
policies. 
¶84 In this close statutory interpretation case, we 
conclude that requiring an insurance company to cover a claim 
reported after the end of a claims-made-and-reported policy 
period would mean expanding the policy's initial grant of 
coverage.  We conclude that interpreting Wisconsin's notice-
prejudice statutes to rewrite the fundamental terms of the 
WILMIC insurance policy would be unreasonable. 
¶85 Persuasive authority from several courts that have 
decided issues substantially similar to those presented in the 
instant case bolsters our conclusion that the notice-prejudice 
statutes do not apply to the requirement in claims-made-and-
reported policies that claims be reported during the policy 
period.78 
¶86 Numerous courts have concluded that a claims-made-and-
reported policy's limitation of coverage to claims reported 
during the policy period is enforceable notwithstanding a 
                                                 
78 See Russ ex rel. Schwartz v. Russ, 2007 WI 83, ¶34 n.9, 
302 Wis. 2d 264, 734 N.W.2d 874 ("The present case involves a 
matter of first impression for which no Wisconsin cases are 
directly 
on 
point. 
 
Therefore, 
we 
may 
look 
to 
other 
jurisdictions for persuasive authority."). 
No. 
2013AP500   
 
35 
 
statutory or common-law notice-prejudice rule.79  Other courts 
have held the reporting requirement in claims-made-and-reported 
policies unenforceable in light of statutory or common-law 
notice-prejudice rules.80 
                                                 
79 See, e.g., Gargano v. Liberty Int'l Underwriters, Inc., 
572 F.3d 45, 49 (1st Cir. 2009); DiLuglio v. New England Ins. 
Co., 959 F.2d 355, 359 (1st Cir. 1992); Burns v. International 
Ins. Co., 929 F.2d 1422, 1425 (9th Cir. 1991); Esmailzadeh v. 
Johnson & Speakman, 869 F.2d 422, 424-25 (8th Cir. 1989); 
Simundson v. United Coastal Ins. Co., 951 F. Supp. 165, 167-68 
(D. N.D. 1997); Bianco Prof'l Ass'n v. Home Ins. Co., 740 
A.2d 1051, 1057-58 (N.H. 1999); Textron, Inc. v. Liberty Mut. 
Ins. Co., 639 A.2d 1358, 1364-66 (R.I. 1994); Hasbrouck v. St. 
Paul Fire & Marine Ins. Co., 511 N.W.2d 364, 367-69 (Iowa 1993); 
Chas. T. Main, Inc., 551 N.E.2d at 29-30; Zuckerman, 495 A.2d at 
403-05; Gulf Ins. Co., 433 So. 2d at 515-16; Ins. Placements, 
Inc. v. Utica Mut. Ins. Co., 917 S.W.2d 592, 597 (Mo. Ct. App. 
1996); Sletten v. St. Paul Fire and Marine Ins. Co., 780 
P.2d 428, 430-31 (Ariz. Ct. App. 1989). 
80 See, e.g., Lexington Ins. Co., 165 F.3d at 1092-94 
(concluding, in the absence of a state appellate court ruling on 
the matter, that Wisconsin's notice-prejudice statutes supersede 
the reporting requirement in claims-made-and-reported policies, 
but noting that the insurance company likely had a meritorious 
claim of prejudice due to the insured's late reporting); 
Sherwood Brands, Inc. v. Great Am. Ins. Co., 13 A.3d 1268, 1288 
(Md. 2011) (holding that Maryland's notice-prejudice statute 
requires a showing of prejudice by the insurance company when 
"the act triggering coverage occurs during the policy period, 
but the insured does not comply strictly with the policy's 
notice provisions," even when the policy is a claims-made-and-
reported policy).  In Sherwood Brands, the Court of Appeals of 
Maryland repeatedly highlighted the difference between the 
notice-prejudice statutes in Wisconsin and Maryland to support 
its holding that in Maryland, an insurance company must show 
prejudice to deny coverage on the grounds that an insured 
reported a claim after the end of a claims-made-and-reported 
policy period.  Sherwood Brands, 13 A.3d at 1286, 1288. 
No. 
2013AP500   
 
36 
 
¶87 Gulf Insurance Co. v. Dolan, 433 So. 2d 512 (Fla. 
1983), 
was 
an 
early 
and 
influential 
case 
regarding 
the 
enforceability of claims-made-and-reported insurance.81  The 
insured 
argued 
that 
general 
public 
policy 
considerations 
rendered unenforceable the insurance policy's limitation of 
coverage to claims both made and reported during the policy 
period.  The Florida Supreme Court disagreed with the insured. 
¶88 The insured asserted that enforcing the requirement of 
notice within the policy period, when the claim at issue was 
first made against the insured the day before the policy period 
ended, would be unjust.  In rejecting the insured's argument, 
the court noted that "[t]he essence" of a claims-made-and-
reported policy is "notice to the carrier within the policy 
period."82  The court reasoned that if it held otherwise it would 
be rewriting the policy to extend coverage: 
If a court were to allow an extension of reporting 
time after the end of the policy period, such is 
tantamount to an extension of coverage to the insured 
gratis, something for which the insurer has not 
bargained.  This extension of coverage . . . in effect 
rewrites the contract between the two parties.  This 
we cannot and will not do.83 
¶89 Gulf Insurance involves a factual scenario different 
from the present case.  In Gulf Insurance, reporting the claim 
                                                 
81 See Griffin, supra note 10, at 251-52. 
82 Gulf Ins. Co. v. Dolan, 433 So. 2d 512, 514 (Fla. 1983) 
(emphasis in original). 
83 Id. at 515-16. 
No. 
2013AP500   
 
37 
 
within the policy period may not have been reasonably possible.  
In the instant case, it was reasonably possible for Attorney Aul 
to report the claim within the policy period.  We do not address 
in this case whether a policy's limitation of coverage to claims 
reported during the policy period is enforceable when reporting 
the claim during the policy period was not reasonably possible.  
However, 
even 
Gulf 
Insurance 
acknowledged 
that 
"if 
an 
impossibility prevented notice being given to an insurer at the 
very end of the policy period, it may well be that an insured 
would be relieved of giving notice during the period of such 
impossibility."84 
¶90 In Zuckerman v. National Union Fire Insurance Co., 495 
A.2d 395 (N.J. 1985), the New Jersey Supreme Court adopted the 
Gulf Insurance reasoning and held that "no considerations of 
public policy . . . inhibit our enforcement" of a claims-made-
and-reported policy's limitation of coverage to claims both made 
and reported during the policy period.85  The court rejected the 
insured's argument that the insurance company should be required 
to prove "appreciable prejudice" in order to avoid liability.86  
"Appreciable prejudice" was a New Jersey common-law doctrine 
applicable to notice requirements in occurrence-based automobile 
                                                 
84 Gulf Ins. Co., 433 So. 2d at 512 n.1. 
85 Zuckerman v. Nat'l Union Fire Ins. Co., 495 A.2d 395, 404 
(N.J. 1985). 
86 Id. at 405-06. 
No. 
2013AP500   
 
38 
 
insurance policies.87  The court held this common-law doctrine 
inapplicable "to a 'claims made' policy that fulfills the 
reasonable expectations of the insured with respect to the scope 
of coverage."88 
¶91 In Chas. T. Main v. Fireman's Fund Insurance Co., 551 
N.E.2d 28 
(Mass. 
1990), 
the 
Supreme 
Judicial 
Court 
of 
Massachusetts addressed the effect of a notice-prejudice statute 
on an insurance company's ability to deny coverage under a 
claims-made-and-reported policy for a claim reported after the 
end of the policy period.  The statute, Mass. Gen. Laws ch. 175, 
§ 112, stated in relevant part: 
An insurance company shall not deny insurance coverage 
to an insured because of failure of an insured to 
seasonably 
notify 
an 
insurance 
company 
of 
an 
occurrence, incident, claim or of a suit founded upon 
an occurrence, incident or claim, which may give rise 
to liability insured against unless the insurance 
company has been prejudiced thereby. 
¶92 In holding this statute applicable "only to the 'as 
soon as practicable' type of notice [requirement] and not to the 
'within the policy year' type of reporting requirement,"89 the 
court 
emphasized 
the 
distinction 
between 
claims-made-and-
reported policies and occurrence policies and the purposes of 
each:  
                                                 
87 Id. at 405. 
88 Id. at 406. 
89 Chas. T. Main, Inc., 551 N.E.2d at 30. 
No. 
2013AP500   
 
39 
 
The purpose of a [claims-made-and-reported] policy is 
to minimize the time between the insured event and the 
payment.  For that reason, the insured event is the 
claim being made against the insured during the policy 
period and the claim being reported to the insurer 
within that same period . . . . If a claim is made 
against an insured, but the insurer does not know 
about it until years later, the primary purpose of 
insuring claims rather than occurrences is frustrated.  
Accordingly, the requirement that notice of the claim 
be given in the policy period . . . is of the essence 
in determining whether coverage exists.  Prejudice for 
an untimely report in this instance is not an 
appropriate inquiry.90 
¶93 The Supreme Judicial Court of Massachusetts concluded 
that requiring an insurance company writing a claims-made-and-
reported policy to show prejudice on account of the "insured's 
failure to report a claim within the policy period . . . would 
defeat the fundamental concept on which [claims-made-and-
reported] policies are premised."91  The court stated that it 
would be unreasonable to think the legislature intended to 
invalidate claims-made-and-reported policies.92 
¶94 In Simundson v. United Coastal Insurance Co., 951 F. 
Supp. 165 (D.N.D. 1997), the United States District Court for 
the District of North Dakota took a similar approach with regard 
to a common-law notice-prejudice rule.  According to the 
insurance company, the claims-made-and-reported policy it had 
issued to the insured did not cover the claim because it was not 
                                                 
90 Id. 
91 Id. 
92 Id. 
No. 
2013AP500   
 
40 
 
reported until roughly two years after the policy period 
expired.  The general rule applicable to occurrence policies in 
North Dakota is that insurance companies cannot refuse coverage 
because of untimely notice of a claim unless the company suffers 
prejudice.   
¶95 The federal district court granted summary judgment to 
the insurance company.  The federal court refused to accept the 
argument in this claims-made-and-reported policy case that 
"coverage should be available because [the insurance company] 
suffered no actual prejudice from the delay . . . ."93  Even 
though the North Dakota courts had not yet ruled on the issue, 
the federal court held for the insurance company, refusing to 
rewrite the basic terms of the claims-made-and-reported policy.  
It stated: 
[T]o require an insurer to suffer actual prejudice 
from a tardy notice of claim before denying coverage 
under a "claims made" policy would be changing the 
very nature of the policy. . . . Such a rule would in 
effect treat a "claims made" policy as an "occurrence" 
type policy, presumably a more expensive policy that 
was not bargained for.  Therefore, this court finds 
that the North Dakota Supreme Court, if faced with the 
issue, would find in accordance with the majority of 
other courts that the actual prejudice rule does not 
apply to "claims made" insurance policies.94 
¶96 Finally, 
in 
Gargano 
v. 
Liberty 
International 
Underwriters, Inc., 572 F.3d 45, 49 (1st Cir. 2009), the United 
                                                 
93 Simundson v. United Coastal Ins. Co., 951 F. Supp. 165, 
167 (D. N.D. 1997). 
94 Id. at 167. 
No. 
2013AP500   
 
41 
 
States Court of Appeals for the First Circuit cited Chas T. Main 
with approval.  The federal court of appeals stated that under 
settled Massachusetts law, an "insured event" arises in the 
context of a claims-made-and-reported policy when: "(1) the 
claim [is] . . . first made against the insured during the 
policy period, and (2) the claim [is] . . . reported to the 
insurer within the policy period."95  The court "reject[ed] out 
of hand Gargano's assertion that the insurance companies must 
demonstrate prejudice . . . to escape liability."96  Rather, the 
court declared that the requirement of reporting "within the 
policy period 'is of the essence in determining whether coverage 
exists.'"97 
¶97 Thus, these courts have held that claims-made-and-
reported policies' restriction of coverage to claims both made 
and reported during the policy period is enforceable despite 
statutory or common-law notice-prejudice rules similar to our 
own notice-prejudice statutes. 
¶98 In sum, the benefits to insurance companies and 
insureds of claims-made-and-reported policies, the statutory 
history underlying Wisconsin's notice-prejudice statutes, the 
persuasive authority of other courts that have decided the 
question presented by this case, and the unreasonable results a 
                                                 
95 Gargano, 572 F.3d at 49. 
96 Id. at 51. 
97 Id. at 49 (quoting Chas. T. Main, Inc., 551 N.E.2d at 
30). 
No. 
2013AP500   
 
42 
 
contrary holding would produce persuade us that Wisconsin's 
notice-prejudice statutes permit an insurance company to deny 
coverage without a showing of prejudice when an insured fails to 
report a claim within a claims-made-and-reported policy period. 
V 
¶99 Because 
we 
hold 
the 
notice-prejudice 
statutes 
inapplicable to the WILMIC insurance policy's requirement that 
claims be reported during the policy period, we need not 
consider the prejudice element of the statutes.  However, even 
if we were to conclude that the notice-prejudice statutes apply 
to the reporting requirement at issue, WILMIC would prevail. 
¶100 In short, requiring an insurance company to provide 
coverage for a claim reported after the end of a claims-made-
and-reported policy period is per se prejudicial to the 
insurance company because it expands the grant of coverage 
provided by the insurance policy.   
¶101 Premiums 
on 
claims-made-and-reported 
insurance 
policies are ordinarily set below the levels charged for 
comparable occurrence policies based in part on the limitation 
of coverage to claims reported within the policy period.  Thus, 
when a claim is not reported within the policy period, requiring 
the insurance company to nevertheless provide coverage is 
prejudicial.98  Holding otherwise would defeat the fundamental 
premise of claims-made-and-reported policies. 
                                                 
98 See DiLuglio v. New England Ins. Co., 959 F.2d 355, 359 
(1st Cir. 1992); Bianco Prof. Ass'n, 740 A.2d at 1057.   
(continued) 
No. 
2013AP500   
 
43 
 
¶102 In their briefs and at oral argument, the parties 
focused on the question of prejudice.  WILMIC argued that 
requiring it to provide coverage for a claim reported after the 
end of the policy period would be per se prejudicial and would 
negate the purpose of the claims-made-and-reported policy for 
which the parties had bargained.  The Andersons argued that 
establishing prejudice from the fact of late reporting in the 
context of claims-made-and-reported insurance would negate the 
purpose of the notice-prejudice statutes. 
¶103 As we noted previously, from the Andersons' vantage 
point, they have been victimized twice: first by Attorney Aul's 
malpractice and now by his failure to comply with his 
malpractice insurance policy's reporting requirement.  We reach 
a harsh result, but one we have determined the law requires.  We 
                                                                                                                                                             
Although the seventh circuit court of appeals held against 
the insurance company, it characterized this prejudice approach 
as a promising one for insurance companies (but one that was 
waived in the case at hand).  Lexington Ins. Co., 165 F.3d at 
1095. 
See also Chas. T. Main, Inc., 551 N.E.2d at 30 (holding 
that Massachusetts's notice-prejudice statute "applies only to 
the 'as soon as practicable' type of notice [requirement] and 
not to the 
'within the policy year' type of reporting 
requirement" because requiring an insurance company to show 
prejudice based on an "insured's failure to report a claim 
within the policy period or a stated period thereafter would 
defeat the fundamental concept on which claims-made policies are 
premised"); New Appleman on Insurance § 20.01[7][b] ("In those 
jurisdictions that have examined the distinction between [pure] 
claims-made and claims-made-and-reported policies, the courts 
have uniformly relieved the insurers from any requirement to 
prove prejudice under the latter form of coverage."). 
No. 
2013AP500   
 
44 
 
conclude that the legislature did not intend to rewrite the 
fundamental terms of the WILMIC insurance policy or to make the 
strict reporting requirement underlying claims-made-and-reported 
policies unenforceable in this state. 
¶104 For 
the 
reasons 
set 
forth, 
we 
conclude 
that 
Wisconsin's notice-prejudice statutes do not supersede the 
reporting 
requirement 
specific 
to 
claims-made-and-reported 
policies. 
¶105 Because we so conclude, we need not address whether, 
under the notice-prejudice statutes, WILMIC was prejudiced by 
Attorney Aul's failure to report the claim during the policy 
period.  However, even if we had determined that the notice-
prejudice statutes supersede this reporting requirement, WILMIC 
would prevail.  Requiring an insurance company to provide 
coverage for a claim reported after the end of a claims-made-
and-reported policy period is per se prejudicial to the 
insurance company. 
By the Court.—The decision of the court of appeals is 
reversed. 
No.  2013AP500.akz 
 
1 
 
¶106 ANNETTE KINGSLAND ZIEGLER, J.   (concurring).  I agree 
with the lead opinion's1 conclusion that Wis. Stat. §§ 631.81 and 
632.26 do not apply to the "within the policy period" reporting 
requirement at issue.  I am compelled to write separately to 
clarify that a majority of the court concluded that the statutes 
at issue are not ambiguous and that their plain meaning dictates 
the outcome in this case.  The opinion of the court was to be 
written to clearly state these conclusions.  State ex rel. Kalal 
v. Circuit Court for Dane Cnty., 2004 WI 58, ¶¶45-46, 271 
Wis. 2d 633, 681 N.W.2d 110.  I need to write because the lead 
opinion writer has rejected suggested changes to the opinion 
which would make these conclusions clear, and as a result, I 
write to clarify the majority opinion of the court. 
¶107 I write to clarify that although a court may consider 
whether a particular interpretation of a statute would produce 
an absurd or unreasonable result, a court may not balance the 
policy concerns associated with the "consequences of alternative 
interpretations."  I do not join the lead opinion's discussion 
of these "consequences," because I would engage in a more 
traditional plain-meaning analysis to interpret the notice-
prejudice statutes, Wis. Stat. §§ 631.81 and 632.26.  I write 
separately because the lead opinion does not use the phraseology 
typically associated with a plain-meaning analysis, but instead 
                                                 
1 Today, three justices join this concurrence.  Accordingly, 
this concurrence represents the majority opinion of the court.  
The opinion authored by Chief Justice Shirley S. Abrahamson is 
now the lead opinion. 
No.  2013AP500.akz 
 
2 
 
engages in this more subjective "consequences" analysis, which 
is seemingly inconsistent with our jurisprudence. 
¶108 "[S]tatutory interpretation 'begins with the language 
of the statute.  If the meaning of the statute is plain, we 
ordinarily stop the inquiry.'"  Id., ¶45 (quoting Seider v. 
O'Connell, 2000 WI 76, ¶43, 236 Wis. 2d 211, 612 N.W.2d 659).  
We 
interpret 
statutes 
"reasonably, 
to 
avoid 
absurd 
or 
unreasonable results."  Id., ¶46.  "'If this process of analysis 
yields a plain, clear statutory meaning, then there is no 
ambiguity, and the statute is applied according to this 
ascertainment of its meaning.'"  Id. (quoting Bruno v. Milwaukee 
Cnty., 2003 WI 28, ¶20, 260 Wis. 2d 633, 660 N.W.2d 656).  "'In 
construing or interpreting a statute the court is not at liberty 
to disregard the plain, clear words of the statute.'"  Id. 
(quoting State v. Pratt, 36 Wis. 2d 312, 317, 153 N.W.2d 18 
(1967)).   
¶109 "[A] statute is ambiguous if it is capable of being 
understood by reasonably well-informed persons in two or more 
senses."  Id., ¶47.  "[T]he test for ambiguity examines the 
language of the statute 'to determine whether well-informed 
persons should have become confused, that is, whether the 
statutory . . . language reasonably gives rise to different 
meanings.'"  Id. (quoting Bruno, 260 Wis. 2d 633, ¶21) (internal 
quotation marks omitted).  Wisconsin courts ordinarily do not 
consult extrinsic sources of statutory interpretation, such as 
legislative history, unless the language of the statute is 
ambiguous.  Id., ¶50.  However, "legislative history is 
No.  2013AP500.akz 
 
3 
 
sometimes consulted to confirm or verify a plain-meaning 
interpretation."  Id., ¶51.  A court may also verify a plain-
meaning interpretation by consulting statutory history, that is, 
prior enacted and repealed versions of the statute under review.  
Cnty. of Dane v. LIRC, 2009 WI 9, ¶27, 315 Wis. 2d 293, 759 
N.W.2d 571. 
¶110 The notice-prejudice statutes at issue, Wis. Stat. 
§§ 631.81 and 632.26, by their plain language are not ambiguous 
and do not apply to the "within the policy period" reporting 
requirement at issue.  These statutes expressly prevent an 
insurer 
from 
"invalidat[ing]" 
"a 
claim" 
under 
certain 
conditions.  Wis. Stat. §§ 631.81(1), 632.26(1)(b).  These 
statutes do not create an initial grant of coverage.  Lead op., 
¶¶82-84.  There is no initial grant of coverage for a claim 
reported outside of the claims-made-and-reported policy period.  
Lead op., ¶28.  The notice-prejudice statutes, therefore, do not 
apply to such a claim.  Lead op., ¶59.2  Applying these statutes 
to the reporting requirement at issue would create an initial 
grant of coverage, which would go far beyond the statutory 
language that prevents the invalidation of existing coverage 
under 
certain 
conditions. 
 
See 
Shannon 
v. 
Shannon, 
150 
                                                 
2 When the notice-prejudice statutes apply to a claim, "the 
determination whether an insurer has been prejudiced by the lack 
of timely notice is essentially a question of fact."  Neff v. 
Pierzina, 2001 WI 95, ¶47, 245 Wis. 2d 285, 629 N.W.2d 177.  
"'[W]e will uphold the trial court's factual determinations 
underlying the question of prejudice unless clearly erroneous.'"  
Id., ¶44 (quoting Rentmeester v. Wis. Lawyers Mut. Ins. Co., 164 
Wis. 2d 1, 8-9, 473 N.W.2d 160 (Ct. App. 1991)). 
No.  2013AP500.akz 
 
4 
 
Wis. 2d 434, 450-54, 442 N.W.2d 25 (1989) (explaining that 
courts may use estoppel or waiver to prevent forfeiture of 
existing coverage but not to create an initial grant of 
coverage).  Accordingly, these statutes are unambiguous in the 
present case because reasonably well-informed persons should 
know that these statutes do not apply to the reporting 
requirement at issue.  See Kalal, 271 Wis. 2d 633, ¶47.  
¶111 The lead opinion analyzes the statutory history of 
these statutes.  Lead op., ¶¶64-73.  The lead opinion's analysis 
should not be construed as a determination that such analysis is 
necessary because of any ambiguity in the statutes.  To the 
contrary, analysis of statutory history is part of a plain-
meaning analysis and can be used to confirm a statute's plain 
meaning.  Heritage Farms, Inc. v. Markel Ins. Co., 2009 WI 27, 
¶15, 316 Wis. 2d 47, 762 N.W.2d 652 (relying on statutory 
history to confirm a statute's plain meaning); Cnty. of Dane, 
315 Wis. 2d 293, ¶27 (explaining that statutory history is part 
of a plain-meaning analysis). 
¶112 After analyzing statutory history, the lead opinion 
briefly considers legislative history——specifically, comments 
made by Wisconsin Legislative Council's Insurance Laws Revision 
Committee.  Lead op., ¶¶74-76.  Because the statutes are 
unambiguous, the opinion's reason for consulting legislative 
history also must be to confirm the plain meaning of these 
statutes.  See Kalal, 271 Wis. 2d 633, ¶51 ("[L]egislative 
history is sometimes consulted to confirm or verify a plain-
meaning interpretation."); Manitowoc Cnty.  v. Samuel J.H., 2013 
No.  2013AP500.akz 
 
5 
 
WI 68, ¶27, 349 Wis. 2d 202, 833 N.W.2d 109 (relying on 
legislative history to confirm plain meaning). 
¶113 I 
also 
briefly 
discuss 
the 
lead 
opinion's 
consideration of "consequences of alternative interpretations."  
Lead op., ¶¶79-84.  I do not join the lead opinion's analysis of 
these "consequences."  The lead opinion states that our holding 
might harm the Andersons by depriving them of insurance proceeds 
from Wisconsin Lawyers Mutual Insurance Company and might 
encourage insurers to add "within the policy period" reporting 
requirements to more policies.  Lead op., ¶¶80-81.  The lead 
opinion then weighs those concerns against the consequences of a 
contrary 
holding: 
transforming 
all 
claims-made-and-reported 
policies into pure claims-made policies and creating an initial 
grant of coverage for which an insurer did not receive a 
premium.  Lead op., ¶¶82, 84.  The lead opinion correctly 
concludes that applying the notice-prejudice statutes to the 
reporting requirement at issue "would be unreasonable."  Lead 
op., ¶84.  See Chas. T. Main, Inc. v. Fireman's Fund Ins. Co., 
551 N.E.2d 28, 30 (Mass. 1990) ("A requirement that an insurer 
on a [claims-made-and-reported] policy must show that it was 
prejudiced by its insured's failure to report a claim within the 
policy period . . . would defeat the fundamental concept on 
which [claims-made-and-reported] policies are premised.  The 
likely result would be that [claims-made-and-reported] policies, 
which offer substantial benefits to purchasers of insurance as 
well as insurance companies, would vanish from the scene.  It 
would be unreasonable to think that the Legislature intended 
No.  2013AP500.akz 
 
6 
 
such a result.").  However, the lead opinion's analysis of 
"consequences" is not in step with a more traditional plain-
meaning analysis.  As a result, I depart from the lead opinion 
so as to avoid confusion. 
¶114 While courts interpret statutes "to avoid absurd or 
unreasonable results," Kalal, 271 Wis. 2d 633, ¶46, it is not 
the role of the court to weigh the "consequences of alternative 
interpretations."  A court may consider the consequences of a 
particular interpretation of a statute to determine whether that 
interpretation would produce an absurd or unreasonable result.  
Here, however, the lead opinion goes beyond the avoidance of 
absurd or unreasonable results by weighing the "consequences of 
alternative interpretations" so to inject a subjective component 
into an otherwise objective analysis.  See Force ex rel. 
Welcenbach v. Am. Family Mut. Ins. Co., 2014 WI 82, ¶165, 356 
Wis. 2d 582, 850 N.W.2d 866 (Ziegler, J., dissenting) ("An 
unpalatable result is not the same as an absurd result.  We are 
to look to the text of the statute to determine whether relief 
is afforded to the litigants.").  I could agree with the lead 
opinion's analysis in paragraphs 82 and 84 only to the extent 
that it confirms the notice-prejudice statutes' plain meaning by 
considering the unreasonable results that a contrary holding 
would produce.  See Samuel J.H., 349 Wis. 2d 202, ¶¶24, 26 
(confirming plain-meaning interpretation by determining that a 
contrary interpretation would produce an absurd or unreasonable 
result).   
No.  2013AP500.akz 
 
7 
 
¶115 To 
be 
clear, 
courts 
should 
not 
consider 
the 
"consequences of alternative interpretations" when interpreting 
a statute.  Doing so goes beyond the avoidance of unreasonable 
or absurd results.  See Force, 356 Wis. 2d 582, ¶165 (Ziegler, 
J., 
dissenting). 
 
The 
"consequences 
of 
alternative 
interpretations" 
language 
was 
created 
by 
Chief 
Justice 
Shirley S. Abrahamson's opinion in State v. Hayes, 2004 WI 80, 
¶16, 273 Wis. 2d 1, 681 N.W.2d 203.  See Hayes, 273 Wis. 2d 1, 
¶112 (Sykes, J., concurring) (explaining that consideration of 
consequences of alternative interpretations "is new to our 
statutory interpretation jurisprudence, and the majority cites 
no 
authority 
for 
it"). 
 
This 
approach 
to 
statutory 
interpretation is problematic because it involves "a judicial 
policy judgment based upon a weighing and balancing of competing 
'purposes and consequences' of alternative interpretations.  
This leaves room for the substitution of the judiciary's 
subjective policy choices for those of the legislature, a 
phenomenon 
that 
a 
text-based, 
plain-meaning 
approach 
to 
statutory interpretation seeks to guard against."  Id. (Sykes, 
J., concurring).  I agree that the lead opinion's analysis in 
this regard is problematic.   
¶116 Although I reject the lead opinion's consideration of 
"consequences of alternative interpretations," I agree with the 
lead opinion's conclusion that the notice-prejudice statutes, by 
their plain meaning, do not apply to the reporting requirement 
at issue.  I also agree with the lead opinion's conclusion, 
consistent with that plain meaning, that applying these statutes 
No.  2013AP500.akz 
 
8 
 
to the reporting requirement at issue would produce unreasonable 
results.  I join that conclusion only to the extent that it can 
be construed as engaging in a plain-meaning analysis of these 
unambiguous statutes.  This writing is intended make clear the 
majority opinion of the court. 
¶117 For the foregoing reasons, I respectfully concur. 
¶118 I am authorized to state that Justices N. PATRICK 
CROOKS, PATIENCE DRAKE ROGGENSACK, and MICHAEL J. GABLEMAN join 
this concurrence. 
No.  2013AP500.akz 
 
1