2020 WI App 62

COURT OF APPEALS OF WISCONSIN

PUBLISHED OPINION

Case No.: 2019AP531

Complete Title of Case: 

SCOTT DHEIN,

 PLAINTIFF,

 V.

FRANKENMUTH MUTUAL INSURANCE COMPANY AND CITY CENTRE,

LLC,

 DEFENDANTS-THIRD-PARTY 

 PLAINTIFFS-APPELLANTS,

BEAMACO, LLC, SENTRY INSURANCE, A MUTUAL COMPANY AND 

LIBERTY MUTUAL INSURANCE COMPANY,

 DEFENDANTS,

 V.

ACE AMERICAN INSURANCE COMPANY,

 THIRD-PARTY DEFENDANT-RESPONDENT.

Opinion Filed: September 23, 2020

Submitted on Briefs: 

Oral Argument: March 4, 2020
2

JUDGES: Neubauer, C.J., Reilly, P.J., and Davis, J.

Concurred:

Dissented:

Appellant

ATTORNEYS: On behalf of the defendants-third-party plaintiffs-appellants, the cause 

was submitted on the briefs of Erik J. Pless and Brian D. Anderson of 

Everson, Whitney, Everson & Brehm, S.C., Green Bay.

Respondent

ATTORNEYS: On behalf of the third-party defendant-respondent, the cause was 

submitted on the brief of Jacob A. Sosnay of Bascom, Budush & Ceman, 

S.C., Germantown. 
2020 WI App 62

COURT OF APPEALS

DECISION

DATED AND FILED

September 23, 2020

Sheila T. Reiff

Clerk of Court of Appeals

NOTICE

This opinion is subject to further editing. If 

published, the official version will appear in 

the bound volume of the Official Reports. 

A party may file with the Supreme Court a 

petition to review an adverse decision by the 

Court of Appeals. See WIS. STAT. § 808.10 

and RULE 809.62. 

Appeal No. 2019AP531 Cir. Ct. No. 2016CV293

STATE OF WISCONSIN IN COURT OF APPEALS

SCOTT DHEIN,

 PLAINTIFF,

 V.

FRANKENMUTH MUTUAL INSURANCE COMPANY AND CITY CENTRE, LLC,

 DEFENDANTS-THIRD-PARTY 

 PLAINTIFFS-APPELLANTS,

BEAMACO, LLC, SENTRY INSURANCE, A MUTUAL COMPANY AND 

LIBERTY MUTUAL INSURANCE COMPANY,

 DEFENDANTS,

 V.

ACE AMERICAN INSURANCE COMPANY,

 THIRD-PARTY DEFENDANT-RESPONDENT.
No. 2019AP531

2

APPEAL from an order of the circuit court for Manitowoc County: 

MARK R. ROHRER, Judge. Reversed and cause remanded. 

Before Neubauer, C.J., Reilly, P.J., and Davis, J.

¶1 REILLY, P.J. City Centre, LLC (City Centre) and Frankenmuth 

Mutual Insurance Company1appeal from the summary judgment dismissal of City 

Centre’s claim for coverage against ACE American Insurance Company (ACE). 

ACE is the comprehensive general liability (CGL) carrier for Broadwind, Inc., d/b/a 

Tower Tech Systems (Broadwind), one of City Centre’s commercial tenants. City 

Centre is an additional insured on the ACE policy pursuant to its lease with 

Broadwind. The lease provided contractual indemnification, requiring Broadwind 

to hold City Centre harmless for any injury caused in whole or in part by 

Broadwind’s negligence. City Centre was sued by Scott Dhein, an employee of 

Broadwind, following an accident on September 9, 2013. The accident occurred on 

property owned by City Centre but used by Broadwind on a daily basis in the course 

of its business. City Centre tendered coverage to ACE. ACE refused to provide a 

defense or coverage to City Centre. 

¶2 The circuit court granted summary judgment to ACE on the grounds 

that any coverage under the ACE policy was excluded as Dhein’s accident did not 

occur on premises rented by Broadwind and no evidence existed that Broadwind 

was causally negligent for Dhein’s injuries. City Centre argues that the court erred 

in granting summary judgment as coverage exists under both the “additional 

 

1

 Frankenmuth is City Centre’s insurance carrier. Going forward, we will refer to these 

parties collectively as “City Centre.”
No. 2019AP531

3

insured” and “insured contract” provisions of the ACE policy and a genuine issue 

of material fact exists as to Broadwind’s causal negligence.

¶3 We conclude that the additional insured endorsement provides 

coverage to City Centre for liability incurred for bodily injury caused by

Broadwind’s “acts or omissions,” regardless of whether Broadwind is legally 

negligent. Even in the absence of our first conclusion, a genuine issue of material 

fact would exist as to Broadwind’s causal negligence so as to trigger coverage for 

any resulting liability under the additional insured endorsement to the extent, upon 

further appeal, negligence is deemed a required element for coverage under the 

endorsement. Moreover, Broadwind has coverage under the same policy for certain 

contractual indemnification obligations it may owe to City Centre as a result of 

Broadwind’s negligence. We also conclude, however, that City Centre cannot 

invoke the direct action statute to enforce Broadwind’s rights to that coverage as the 

direct action statute only permits an action against a liability insurer to recover 

insurance proceeds attributable to a negligence action, and, in this case, 

Broadwind’s underlying liability to City Centre can only result from contractual 

indemnity. 

¶4 We recite the pertinent facts, address negligence and insurance law in 

Wisconsin, and analyze the additional insured and insured contract provisions of the 

ACE policy and how they apply in this case. 

Facts

¶5 City Centre owns a large tract of industrial land referred to as the 

“peninsula” in the City of Manitowoc and leases parcels within the peninsula to 

various tenants. Broadwind, a wind turbine company, leased three separate parcels 

of land on the peninsula from City Centre. Land between the various tenants was 
No. 2019AP531

4

available for use by the tenants and is described as “common areas” in Broadwind’s 

lease. The “common areas” are owned by City Centre, and City Centre is required 

to maintain and repair the “common areas.” 

¶6 Dhein was operating a snorkel lift on September 9, 2013, when a tire 

of the snorkel lift fell into a drainage basin whose grate had become dislodged. The 

drainage basin is located in the parking lot, which is adjacent to and between 

buildings leased by Broadwind and another tenant. The parking lot is “common 

area” land that Broadwind employees used on a daily basis to move tower sections 

between their parcels via large forklifts and machines. Broadwind admitted that 

their employees’ use of large forklifts and heavy equipment to move tower sections 

would occasionally dislodge the grate covering the drainage basin and that 

snowplowing would also dislodge the grate “just about every time they plowed 

snow until there was a good base.”2 A maintenance manager for Broadwind testified 

that the grate was dislodged on a number of occasions prior to Dhein’s accident and 

that he or others would replace the grate. The maintenance manager described the 

drainage basin area as “somewhat a shared responsibility. The grounds was City 

Centre’s responsibility. For a grate being out of place like that, we would just put 

it back in place.” Broadwind never notified City Centre that the grate was being 

dislodged—or that it was defective—and never asked City Centre to fix the 

defective grate.

¶7 The lease between City Centre and Broadwind required Broadwind to 

carry a CGL policy with City Centre as an “Additional Named Insured,” insuring 

both Broadwind and City Centre “against injury to ... person ... arising out of the 

 

2

 A maintenance manager for Broadwind also “blew his tire” on the open drainage basin 

prior to Dhein’s accident. 
No. 2019AP531

5

use and occupancy of the Premises.” Broadwind was also required by the lease to 

“protect[,] indemnify, save, and keep harmless” City Centre “from any and all 

claims arising out of or from any accidents or other occurrences on or about the 

Premises causing injury ... due directly or indirectly to negligent use of the 

Premises” by Broadwind or its employees. (Emphasis added.)

¶8 ACE issued the required CGL policy to Broadwind (the ACE policy), 

which provided coverage to additional insureds. The ACE policy provided, in 

relevant part:

A. Section II – Who Is An Insured is amended to include 

as an additional insured the person(s) or organization(s) 

shown in the Schedule, but only with respect to liability for 

“bodily injury”, “property damage” or “personal and 

advertising injury” caused, in whole or in part, by your acts 

or omissions or the acts or omissions of those acting on your 

behalf:

 1. In the performance of your ongoing operations; or 

 2. In connection with your premises owned by or rented 

to you. 

Pursuant to the policy language, the coverage for an additional insured extended 

only to liability for injuries “caused, in whole or in part, by [Broadwind’s] acts or 

omissions” or those acting on behalf of Broadwind. Coverage was further limited 

to “acts or omissions” that Broadwind or its actors undertook “[i]n the performance” 

of its “ongoing operations” or “[i]n connection with” “premises owned by or rented” 

by Broadwind. 

¶9 The ACE policy contained standard CGL language indemnifying 

Broadwind for any liability it might incur for “bodily injury” caused by an 

“occurrence.” It also included a standard contractually-assumed liability exclusion 

which read as follows:

2. Exclusions
No. 2019AP531

6

This insurance does not apply to:

....

b. Contractual Liability

“Bodily injury” or “property damage” for which the insured 

is obligated to pay damages by reason of the assumption of 

liability in a contract or agreement. This exclusion does not 

apply to liability for damages:

(1) That the insured would have in the absence of the 

contract or agreement; or

(2) Assumed in a contract or agreement that is an “insured 

contract,” provided the “bodily injury” or “property 

damage” occurs subsequent to the execution of the contract 

or agreement.... 

The ACE policy defines “insured contract” as “[a] contract for a lease of premises” 

or that “part of any other contract or agreement pertaining to your business ... under 

which you assume the tort liability of another party to pay for ‘bodily injury’ or 

‘property damage’ to a third person or organization.” 

¶10 Dhein filed a personal injury lawsuit against City Centre, Beamaco, 

LLC,3and their respective insurers, alleging negligence and safe place violations. 

After initial discovery, City Centre filed a Third-Party Summons and Complaint 

against ACE, alleging that ACE was liable to City Centre as an additional insured 

and under the insured contract exception to the contractually-assumed liability 

exclusion referenced above, that ACE was liable for any negligence of Broadwind 

employees related to Dhein’s injury, and that ACE owed it a duty of defense. 

¶11 As relevant to this appeal, ACE moved for declaratory and summary 

judgment, arguing that City Centre did not have coverage. The circuit court granted 

 

3

 Beamaco, LLC, also leased property on the peninsula adjacent to the location where 

Dhein’s accident occurred. The circuit court dismissed Dhein’s claims against Beamaco by its 

February 8, 2019 order. The parties do not challenge this dismissal on appeal.
No. 2019AP531

7

summary judgment to ACE on the grounds that any coverage that did exist was 

excluded as Dhein’s accident did not occur on premises rented by Broadwind and 

no evidence existed that Broadwind was causally negligent for Dhein’s injuries. 

The circuit court found that City Centre had constructive notice of the defective 

grate given the length of time the grate was being dislodged. City Centre appeals.

Standard of Review and Principles of Insurance Contract Interpretation

¶12 At issue in this case is whether City Centre and Broadwind have

coverage under the ACE policy. Interpretation of an insurance contract is a question 

of law that we review de novo. American Family Mut. Ins. Co. v. American Girl, 

Inc., 2004 WI 2, ¶23, 268 Wis. 2d 16, 673 N.W.2d 65. In reviewing the ACE policy, 

we are guided by the familiar principles that insurance policies are construed as they 

would be understood by a reasonable person in the position of the insured, and that 

any ambiguities are construed in favor of coverage, and against the insurer who 

drafted the policy. See Heineke v. Aurora Healthcare, Inc., 2013 WI App 133, 

¶11, 351 Wis. 2d 463, 841 N.W.2d 52. However, we do not interpret insurance 

policies to provide coverage for risks that the insurer did not contemplate, 

underwrite, or receive a premium. American Girl, 268 Wis. 2d 16, ¶23. In applying 

these principles, we follow a three-step process: (1) “we examine the facts of the 

insured’s claim to determine whether the policy’s insuring agreement makes an 

initial grant of coverage”; (2) if a covered claim is triggered, we then examine 

whether any exclusions preclude coverage; and (3) we examine whether any 

exception to an exclusion reinstates coverage. Id., ¶24.

¶13 On appeal, our review of a decision on summary judgment is de novo, 

applying the same methodology as the circuit court. Id., ¶22. Summary judgment 

is appropriate if there are no genuine issues of material fact in dispute and a party is 
No. 2019AP531

8

entitled to judgment as a matter of law. Id. If there are disputed material facts or 

undisputed material facts from which reasonable alternative inferences can be 

drawn, then the matter is to be determined by the fact finder at trial. Lambrecht v. 

Estate of Kaczmarczyk, 2001 WI 25, ¶¶21-24, 241 

Wis. 2d 804, 623 N.W.2d 751; see also Delmore v. American Family Mut. Ins. 

Co., 118 Wis. 2d 510, 512, 348 N.W.2d 151 (1984). 

¶14 We now address the additional insured and insured contract 

provisions of the ACE policy and apply them to the facts presented.

The Additional Insured Endorsement Provides Coverage to City Centre for 

Liability It Incurs as a Result of Broadwind’s “Acts or Omissions,” Regardless of 

Whether Broadwind is Legally Negligent

¶15 The additional insured endorsement issued to Broadwind makes City 

Centre an insured, able to enforce the policy, but only in situations involving 

liability it incurs as a result of its relationship with the named insured, Broadwind. 

First, City Centre’s liability (or potential liability that might trigger a defense) must 

stem from bodily injury caused by an “act[] or omission” of Broadwind, the named 

insured. Second, the “act[] or omission” must occur “[i]n the performance of 

[Broadwind’s] ongoing operations” or “[i]n connection with [Broadwind’s] 

premises owned by or rented to [Broadwind].” 

¶16 Our threshold question, then, concerns the interpretation of the phrase 

“acts or omissions” in the endorsement. The parties have treated this issue as 

involving the question of whether Dhein’s injuries resulted from Broadwind’s 

negligence, but we cannot find from the plain language that the endorsement is so 

limited, particularly in light of the rules of construction referenced above. The 

language simply provides liability coverage to the additional insured for bodily 

injury that is “caused in whole or in part by” an “act or omission” of the named 
No. 2019AP531

9

insured, Broadwind, or those acting on its behalf (such as its employee, Dhein). 

This suggests that if some act or omission of Dhein or Broadwind caused Dhein’s 

injury then whatever liability might exist on the part of City Centre in contributing 

to that injury is covered. Nothing in this language restricts coverage to liability for 

the named insured’s negligence or is otherwise “fault-based” as it relates to 

Broadwind. 

¶17 In reaching this conclusion, we are guided by cases from other 

jurisdictions, including a federal case from the Eastern District of Wisconsin 

applying Wisconsin law, Ryder Truck Rental, Inc. v. National Fire Ins. Co. of 

Hartford, 246 F. Supp. 3d 1231 (E.D. Wis. 2017), in which the court rejected the 

notion that the additional insured language requires an element of fault on the part 

of the named insured. In Ryder Truck Rental, the plaintiff was an employee of 

Rockline Industries, LLC, which had leased a truck from Ryder. Id. at 1233-34. 

The employee was injured when he stepped onto a step attached to the truck. Id. 

He sued Ryder, claiming that it was negligent in maintaining the step. Id. The lease 

required Rockline to provide liability insurance to Ryder, making Ryder an 

additional insured with respect to liability it incurred as a result of the “acts or 

omissions” of Rockline or its employees. Id. at 1237-38. The insurer denied 

coverage, claiming that this language only allowed coverage to Ryder for 

Rockline’s negligence. Id. at 1238. The district court disagreed, finding that so 

long as the injury arose out of an “act or omission” of Rockline or its employee, 

then Ryder was covered, and nothing in the policy language required that the act or 

omission be accompanied by fault or negligence: 

National argues that Ryder cannot be an “insured” under this 

reasoning because the [employee’s] complaint does not 

allege that [the employee] was negligent or otherwise at fault 

for his injuries; rather, it alleges that Ryder was negligent in 

repairing the step. However, while it is true that the 
No. 2019AP531

10

[employee does] not allege that [the employee’s] own 

negligence or other wrongdoing contributed to his injuries, 

nothing in the lessor endorsement (or any other part of the 

policy) states that a lessor is an “insured” for bodily injury 

resulting from acts or omissions of the named insured’s 

employee only if the employee’s act or omission was 

negligent or otherwise blameworthy. Rather, the 

endorsement just says “acts or omissions,” and the policy 

does not define these terms at all, much less in a way that 

incorporates an element of fault. 

Id.

¶18 We agree and adopt this plain language reasoning, which also appears 

consistent with how most other courts have construed this language. See, e.g., Arch 

Specialty Ins. Co. v. Farm Family Cas. Ins. Co., 238 F. Supp. 3d 604, 613-14 

(S.D.N.Y. 2017) (noting that the policy “does not condition coverage on fault by 

[the named insured or its employee]; rather “the concept of causation turns on the 

relationship of [the named insured or its employee] to the worksite”); Great W. Cas.

Co. v. National Cas. Co., 53 F. Supp. 3d 1154, 1172 (D. N.D. 2014) (“There is no 

mention in the language of the endorsement that the acts or omissions must be 

‘negligent’ or ‘intentional.’ In other words, fault is not an element.”); PAR Elec.

Contractors, Inc. v. Blueline Rental, LLC, No. 2:16-CV-0246-TOR, 2017 WL 

374477, at *24 (E.D. Wash. Jan. 25, 2017) (“Because a plain reading of the 

insurance contract covers acts or omissions, not just negligent acts or omissions, the 

Court will decline Old Republic’s invitation to insert the word ‘negligent’ into the 

contract where it was not provided, especially where that would work to limit the 

insured’s coverage and where the insurance company very well could have included 

the word ‘negligent’ when drafting the policy.”); see also American Guarantee & 

Liab. Ins. Co. v. Norfolk S. Ry. Co., 278 F. Supp. 3d 1025, 1041 (E.D. Tenn. 2017) 

(“Here, the phrase ‘caused, in whole or in part,’ is not ambiguous. In effect, it 

assigns Norfolk additional insured status if the accident was caused by East Coast’s 
No. 2019AP531

11

work, act, or omission in some way, even partially. Accordingly, it must be 

determined whether East Coast caused the accident.”).4 

¶19 In light of these authorities, we conclude that, while City Centre’s 

status as an additional insured depends on whether it faces liability for bodily injury 

caused by the “acts or omissions” of Broadwind or its employees, the plain language 

of the ACE policy does not require a finding of fault/negligence by Broadwind (or 

its employees). Dhein is indisputably a Broadwind employee. His injury 

 

4

 We note that at least one published decision has reached a contrary conclusion. See

Bacon Constr. Co., Inc. v. Arbella Prot. Ins. Co., Inc., 208 A.3d 595, 600 (R.I. 2019) (“We are 

satisfied that the endorsement is fault-based .... [T]he endorsement, by including the terms 

‘liability’ and ‘bodily injury caused by’ one’s acts or omissions, includes a negligence trigger.”). 

We disagree with Bacon Construction, as the court’s reasoning appears conclusory and lacks an 

analysis of why the policy language led to the result reached. Here, had the additional insured 

endorsement simply indemnified City Centre for Broadwind’s acts or omissions that result in 

liability of the additional insured, the endorsement could possibly be read to require a fault-based 

trigger, but that is not what the endorsement says. Rather, City Centre is an additional insured for 

any liability it incurs for bodily injury so long as the injury is caused in whole or part by some act 

or omission of Broadwind. Nothing requires that the additional insured’s liability be based on any 

actionable conduct of the named insured, a point that appears to have been recognized by the 

majority of courts addressing this language in the context of injury suffered by the named insured’s 

employee.

We acknowledge an unpublished decision from this court which appears to read a 

negligence trigger into this policy language, but its analysis as to the issue is lacking. See Ritter v. 

Penske Trucking Leasing Co., L.P., No. 2011AP2285, unpublished slip op. ¶23 (WI App Dec. 6, 

2012). Ritter’s reference to a negligence trigger was unsupported and made in passing, a point the 

PAR Electrical Contractors court noted in denying a reconsideration motion filed in connection 

with the decision referenced above. See PAR Elec. Contractors, Inc. v. Blueline Rental, LLC, 

No. 2:16-CV-0246-TOR, 2017 WL 2727901, at *2 n.1 (E.D. Wash. Mar. 17, 2017) (“The Ritter

case does not even directly address the issue—rather, it focuses on a lack of an allegation in the 

underlying complaint and reasonable expectations—and its conclusion that the policy was limited 

to negligence was not explained or supported, contrary to the cases this Court references in its 

Order.”). The court in Ryder Truck Rental also noted that whether Ritter actually adopted a 

negligence or fault-based trigger “is not clear” but in any event found the case to have “no 

persuasive value” on this point since “the court did not give any reasons for reading an element of 

fault into the ‘acts or omissions’ language in the lessor endorsement (if in fact it read such an 

element into that language).” Ryder Truck Rental, Inc. v. National Fire Ins. Co. of Hartford, 246 

F. Supp. 3d 1231, 1239 (E.D. Wis. 2017). 
No. 2019AP531

12

indisputably occurred as a result of his act of driving over the grate in question. As 

a result, City Centre satisfies the “acts or omissions” element as a matter of law and 

has coverage under the ACE policy.5 

Even If the Additional Insured Endorsement Required a Finding of Negligence by 

Broadwind, There is a Genuine Issue of Material Fact as to Whether Dhein’s 

Injury was Attributable to any Such Negligence

¶20 As the preceding discussion makes clear, City Centre’s additional 

insured status depends on whether its liability is for bodily injury that is caused by 

an “act or omission” of Broadwind or its employees, without regard to whether City 

Centre’s liability stems from Broadwind’s “negligence.” Nonetheless, because a 

negligence trigger for this endorsement was assumed by the parties, and for 

purposes of providing guidance in the event of any further review of this matter on 

appeal, we deem it appropriate to address the trial court’s summary judgment 

finding that there could be no negligence as a matter of law. We conclude that there 

are disputed issues of fact on this point, which would have required a trial if this 

endorsement were construed to contain a negligence trigger.

 

5

 In reaching this result, we recognize that the lease limits Broadwind’s indemnity 

obligations to City Centre for injury “due directly or indirectly to negligent use of the Premises or 

any part thereof” by Broadwind. Moreover, the additional insured endorsement expressly states 

that the insurance afforded to City Centre will not be broader than what is required by any 

contractual provision by which Broadwind is to make City Centre an additional insured. The 

combination of these two provisions cannot, however, change the interpretation of the endorsement 

because the indemnification provision says nothing about the insurance that Broadwind must 

procure covering City Centre. To the contrary, the lease contains an entirely separate insurance 

requirement provision, which simply requires Broadwind to procure commercial general liability 

insurance insuring both itself and City Centre against injury “arising out of the use and occupancy 

of the Premises” without regard to Broadwind’s negligence. This case is thus governed by the 

principle that limiting language in an indemnity agreement does not affect coverage under an 

additional insured endorsement absent explicit contrary language in either the contract or the 

policy—or, put another way, the court must consider the terms of an underlying contract only to 

the extent the policy language directs it to do so. See American Cas. Co. v. General Star Indem.

Co., 24 Cal. Rptr. 3d 34, 46-48 (Cal. Ct. App. 2005); In Re Deepwater Horizon, 470 S.W.3d 452, 

464 (Tex. 2015). 
No. 2019AP531

13

¶21 Negligence exists when there is: (1) the existence of a duty of care; 

(2) a breach of that duty of care; (3) a causal connection between the duty breached 

and the harm caused; and (4) actual loss or damages. Nichols v. Progressive N. Ins. 

Co., 2008 WI 20, ¶11, 308 Wis. 2d 17, 746 N.W.2d 220; see also Hocking v. City 

of Dodgeville, 2009 WI 70, ¶10, 318 Wis. 2d 681, 768 N.W.2d 552. Wisconsin has 

adopted the minority view from Palsgraf v. Long Island Railroad Co., 162 N.E. 99 

(N.Y. 1928), that everyone owes a duty to the world at large. Hocking, 318 Wis. 

2d 681, ¶12. That duty, however, is not unlimited and “is restricted to what is 

reasonable under the circumstances.” Id. In this case, the parties do not dispute that 

Dhein was injured and that Dhein incurred an actual loss. We address the remaining 

elements of a negligence claim below.

¶22 As everyone owes a duty to the world at large, we begin by accepting 

that Broadwind owed a duty of care to Dhein. The duty of care involves two aspects: 

the existence of a duty of ordinary care and the assessment of what ordinary care 

requires under the circumstances. Id., ¶11. In this case, there is a genuine issue of 

material fact as to Broadwind’s duty of care and whether Broadwind breached that 

duty. Broadwind knew of the defective grate prior to Dhein’s accident and knew 

that its operation of heavy equipment on a daily basis in the vicinity of the grate 

would occasionally cause the grate to become dislodged, leaving a hole in the 

pavement. Broadwind had notice prior to Dhein’s accident that the hole left by the 

dislodged grate had caused damage to one of its employee’s vehicles. Broadwind 

acknowledged a “shared responsibility” for maintaining the grate (perhaps because 

Broadwind employees were the ones who were dislodging the grate from the 

drainage basin with the heavy equipment) and acknowledged that it never informed 

City Centre of the defective grate and never asked City Centre to fix the grate. This 

could imply that Broadwind accepted the responsibility of making sure the grate 
No. 2019AP531

14

was on the drainage basin and/or that Broadwind’s acts precluded knowledge on 

City Centre’s part. Therefore, Broadwind’s acts and omissions in this case 

foreseeably created an unreasonable risk to Dhein and others. 

¶23 Furthermore, given Broadwind’s knowledge of the defective 

condition of the grate and the fact that Dhein was injured when his snorkel lift fell 

into the hole of the drainage basin as a result of the grate being dislodged, a clear 

causal connection has been shown between Broadwind’s breached duty and the 

harm caused.

¶24 ACE argues that Broadwind cannot be negligent as City Centre cannot 

delegate its responsibility to inspect and maintain its premises, citing to Barry v. 

Employers Mutual Casualty Co., 2001 WI 101, ¶42, 245 Wis. 2d 560, 630 N.W.2d 

517. The circuit court held that City Centre knew or should have known that the 

condition of the basin constituted a dangerous condition. The fact that City Centre, 

as owner of the common area, also had a duty of care owed to Dhein does not 

eliminate Broadwind’s duty.6 While a landowner may not delegate its responsibility 

 

6

 Furthermore, and as suggested by the preceding authorities cited supra ¶¶17-18, all of 

which involve lawsuits by a named insured’s employee against an additional insured, the fact that 

Dhein could not sue Broadwind, his employer, in tort pursuant to Wisconsin’s Worker’s 

Compensation Act does not change our analysis of Broadwind’s duty of care under negligence law 

or, correspondingly, City Centre’s rights as an additional insured under the ACE policy, which by 

its terms directly provides contractual coverage from ACE to City Centre for liability for bodily 

injury caused by Broadwind’s acts or omissions. 
No. 2019AP531

15

under the safe place statute,7the safe place statute does not extinguish City Centre’s 

contractual rights under the ACE policy that ACE will provide coverage for 

Broadwind’s acts or omissions. While constructive notice applies to Dhein’s safe 

place claim, it does not apply to common law negligence and does not change the 

fact that Broadwind owed a duty of care to Dhein. Both City Centre and Broadwind 

owed a duty of care to Dhein given the facts presented.

¶25 Accordingly, under Wisconsin’s standard of duty, we have no 

hesitation in concluding that based on the evidence, a jury could find that

 

7

 WISCONSIN STAT. § 101.11 (2017-18), the safe place statute, “is a negligence statute that, 

rather than creating a distinct cause of action, ... instead establishes a duty greater than that of 

ordinary care imposed at common law.” Barry v. Employers Mut. Cas. Co., 2001 WI 101, ¶18, 

245 Wis. 2d 560, 630 N.W.2d 517. The statute requires that “[e]very employer and every owner 

of a place of employment or a public building now or hereafter constructed shall so construct, repair 

or maintain such place of employment or public building as to render the same safe.” 

Sec. 101.11(1) (2017-18). “Safe” is defined as “such freedom from danger to the life, health, safety 

or welfare of employees or frequenters, or the public, or tenants, or fire fighters, and such 

reasonable means of notification, egress and escape in case of fire, and such freedom from danger 

to adjacent buildings or other property, as the nature of the employment, place of employment, or 

public building, will reasonably permit.” WIS. STAT. § 101.01(13) (2017-18). All references to 

the Wisconsin Statutes are to the 2017-18 version unless otherwise noted.

“The duties imposed on employers and property owners under the safe place statute are 

non-delegable.” Barry, 245 Wis. 2d 560, ¶42. “[T]he person who has that duty [under the safe 

place statute] cannot assert that another to whom he has allegedly delegated the duty is to be 

substituted as the primary defendant in his stead for a violation of safe place provisions. Under 

any circumstance, it is the owner or the employer who must answer to the injured party.” Id.

(alteration in original; citation omitted). Under safe place law, an injured party recovers from 

property owners; however, a property owner may seek contribution from other negligent parties. 

Id., ¶¶43-44.
No. 2019AP531

16

Broadwind was causally negligent, in whole or in part, for Dhein’s accident.8 The 

inferences that could be drawn from the evidence are many, including a finding that 

City Centre was negligent in failing to properly inspect its property and that 

Broadwind was negligent in failing to give City Centre notice of the known danger 

in an area of “shared responsibility” with City Centre.

City Centre Satisfies the Remaining Elements Necessary to Establishing Its Status 

as an Additional Insured Under the ACE Policy

¶26 The final step in our analysis of the additional insured provision 

concerns the remaining language that must be satisfied before City Centre can be 

considered an additional insured. Specifically, the “acts or omissions” that must be 

the cause of City Centre’s liability must also occur “[i]n the performance of 

[Broadwind’s] ongoing operations” or “[i]n connection with” the premises leased 

by Broadwind. Broadwind leased three buildings on the peninsula and there is no 

 

8

 We recognize that “even if all the elements for a claim of negligence are proved, or 

liability for negligent conduct is assumed by the court, the court nonetheless may preclude liability 

based on public policy factors” as “negligence and liability are distinct concepts.” Nichols v. 

Progressive N. Ins. Co., 2008 WI 20, ¶19, 308 Wis. 2d 17, 746 N.W.2d 220 (citations omitted). 

“The prevalence of a public policy factor analysis, however, does not eliminate consideration of 

the four elements of negligence.” Hocking v. City of Dodgeville, 2009 WI 70, ¶11, 318 Wis. 2d 

681, 768 N.W.2d 552.

Some of the public policy reasons for not imposing liability 

despite a finding of negligence as a substantial factor producing 

injury are: (1) The injury is too remote from the negligence; or 

(2) the injury is too wholly out of proportion to the culpability of 

the negligent tort-feasor; or (3) in retrospect it appears too highly 

extraordinary that the negligence should have brought about the 

harm; or (4) because allowance of recovery would place too 

unreasonable a burden on the negligent tort-feasor; or (5) because 

allowance of recovery would be too likely to open the way for 

fraudulent claims; or (6) allowance of recovery would enter a field 

that has no sensible or just stopping point.

Morgan v. Pennsylvania Gen. Ins. Co., 87 Wis. 2d 723, 737, 275 N.W.2d 660 (1979); see also

Nichols, 308 Wis. 2d 17, ¶¶22-27. While we raised this issue and requested supplemental briefing, 

upon review, we do not see that public policy would preclude a negligence claim under the facts 

presented here.
No. 2019AP531

17

dispute that Dhein’s injury occurred in the common area adjacent to Broadwind’s 

leased premises while Dhein was driving the snorkel lift between worksite locations 

as part of his regular work activities. 

¶27 The circuit court concluded that there was no coverage for City Centre 

under the ACE policy as the accident occurred in the common area adjacent to the 

leased premises and as Broadwind “is in the business of making turbines, not 

maintenance of grates and basins.” We disagree that simply because the accident 

occurred in the common area adjacent to the leased premises that there can be no

coverage to City Centre under the ACE policy.

¶28 The phrase “ongoing operations” should not be so narrowly defined 

as to require Broadwind to be in the business of “maintenance of grates and basins” 

in order for the policy language to apply. We interpret an insurance contract as it 

would be understood by a reasonable person in the position of the insured. 

American Girl, 268 Wis. 2d 16, ¶23. In interpreting insurance policy language, we 

seek to “give effect to the intent of the contracting parties.” Id. The phrase “ongoing 

operations” is not defined in the ACE policy. In Mikula v. Miller Brewing Co., 

2005 WI App 92, ¶21, 281 Wis. 2d 712, 701 N.W.2d 613 (citation omitted), this 

court determined that “‘[o]ngoing operations,’ ... can be understood to mean the 

‘doing or performing of a practical work or of something involving practical 

application of principles or processes ... as a part of a series of actions’ ... ‘that is 

actually in process.’” In other words, the court explained, the phrase could 

“reasonably be interpreted to refer to the ongoing performance of the work” 

performed for the additional insured. Id. While the parties in Mikula had contracted 

for work to be performed between the parties, and did not involve a lease agreement, 

we conclude that the same definition can apply to the work performed by 

Broadwind.
No. 2019AP531

18

¶29 Broadwind employees, like Dhein, were required to move large 

equipment within the common area to perform their work on the leased premises, 

and Broadwind utilized the common area between its three parcels in the normal 

course of its operations. Case in point, Dhein was operating heavy machinery in the 

common area when his accident occurred. Broadwind knew of the hazard posed by 

the drainage basin as its own large equipment had previously dislodged the grate, 

creating an open hole in the ground, in the course of moving the equipment between 

worksites within the leased premises. Further, Broadwind employees would 

regularly replace the grate when they noticed it was dislodged, in what an employee 

called a “shared responsibility.” Therefore, we conclude that Dhein driving the 

snorkel lift between worksites and employees replacing the grate were within the 

performance of Broadwind’s “ongoing operations.”

¶30 Second, we conclude that the common area where the accident 

occurred was “in connection with” premises rented by Broadwind. The ACE policy 

does not define the phrase “in connection with.” The word “connection” is defined 

as a “relationship or association in thought (as of cause and effect, logical sequence, 

mutual dependence or involvement).” Connection, WEBSTER’S THIRD NEW 

INTERNATIONAL DICTIONARY (unabridged ed. 1993); see also Melby v. 

Metropolitan Prop. & Cas. Ins. Co., No. 2013AP12, unpublished slip op. ¶15 (WI 

App Feb. 12, 2015) (“[T]he word ‘connection’ is defined as ‘a relationship; 

association; ... causal relationship.’” (citation omitted)). This definition is similar to 

the definition for the phrase “arising out of,” used in liability insurance policies, 

which has been read “broadly” and is “commonly understood to mean originating 

from, growing out of, or flowing from, and require[s] only that there be some causal 

relationship between the injury and the risk for which coverage is provided.” See

Mikula, 281 Wis. 2d 712, ¶21 (alteration in original; citation omitted). Thus, based 
No. 2019AP531

19

on those definitions, we read “in connection with” broadly and conclude that there 

must be a “causal relationship” between the bodily injury caused, in whole or in 

part, by Broadwind’s acts or omissions and the leased premises. Driving large 

machinery in the common area between the leased worksites in the normal course 

of Broadwind’s operations satisfies that causal relationship. Indeed, given the 

separation of the leased buildings and the nature of Broadwind’s operations 

requiring them to move large machinery between the buildings, we agree with City 

Centre that it would be disingenuous to assert that Broadwind intended to check its 

insurance coverage at the door of each building. 

City Centre Does Not Have Standing to Assert the Insured Contract Exception 

to the Contractually-Assumed Liability Exclusion Under Wisconsin’s Direct 

Action Statute

¶31 The second coverage theory asserted in this case pertains to coverage 

that might be afforded to Broadwind for City Centre’s contractual indemnification 

claim against it for Broadwind’s negligence. City Centre seeks to avail itself of that 

coverage by way of Wisconsin’s direct action statute, WIS. STAT. § 632.24. We 

start by analyzing Broadwind’s right to coverage and then whether City Centre has 

standing to assert those rights under the direct action statute.

¶32 Applying the three-part coverage methodology referenced above, 

there can be no question that Broadwind’s potential liability falls within the

coverage grant of the policy: Broadwind is facing potential liability for “bodily 

injury” (Dhein’s injuries) caused by an “occurrence” (the alleged accidental 

negligence involving the grate discussed above). Broadwind’s liability stems from 

the indemnification agreement it entered into with City Centre as Dhein did not (and 

per Wisconsin’s worker’s compensation law, could not) sue Broadwind directly. 

The second step addresses exclusions, and, in this case, the ACE policy has a 

contractually-assumed liability exclusion for “‘[b]odily injury’ or ‘property 
No. 2019AP531

20

damage’ for which the insured is obligated to pay damages by reason of the 

assumption of liability in a contract or agreement.” We move then to the third step 

in the methodology to determine whether an exception restores coverage. The ACE 

policy provides that the contractually-assumed liability exclusion does not apply if 

the contractually-assumed liability is for damages “[a]ssumed in a contract or 

agreement that is an ‘insured contract.’” An “insured contract” is defined by the 

policy as “[a] contract for a lease of premises” as well as

 [t]hat part of any other contract or agreement pertaining 

to [Broadwind’s] business ... under which [Broadwind] 

assume[s] the tort liability of another party to pay for “bodily 

injury” ... to a third person or organization. Tort liability 

means a liability that would be imposed by law in the 

absence of any contract or agreement.” 

The lease between Broadwind and City Centre is an insured contract as both a 

“contract for a lease of premises” and an agreement in which Broadwind agreed to 

assume City Centre’s tort liability to pay for bodily injury. 

¶33 In American Girl, our supreme court addressed the “contractuallyassumed liability exclusion” and concluded that where an insured (Broadwind) has 

contractually assumed the liability of a third-party (City Centre), such as in an 

indemnification or hold harmless agreement, the policy does not exclude coverage 

for liabilities the insured is exposed to under the terms of the contracts it makes 

generally. See American Girl, 268 Wis. 2d 16, ¶58. Broadwind’s liability is by 

virtue of the indemnification/hold harmless provision, which provides:

 [Broadwind] agrees that it will at all times protect[,]

indemnify, save, and keep harmless [City Centre] against 

and from any and all claims arising out of or from any 

accidents or other occurrences on or about the Premises 

causing injury to any person or persons or property 

(including but not limited to any injuries indirectly or 

directly caused by lack of security), whomsoever or 

whatsoever and due directly or indirectly to negligent use of 

the Premises or any part thereof by [Broadwind], its 

employees, agents, or invitees.
No. 2019AP531

21

Broadwind has coverage for this liability because it has coverage under the ACE 

policy for “bodily injury” caused by an “occurrence” (accident). Dhein’s accident 

occurred “on or about the Premises” in an area of “shared responsibility” “due 

directly or indirectly” to Broadwind’s negligence.9

¶34 Our conclusion that Broadwind has coverage for its indemnification 

obligations does not necessarily lead to the conclusion that City Centre has the right 

to access that coverage under Wisconsin’s direct action statute. Indeed, we 

conclude that, under the facts of this case, it cannot. And while this may not make 

a difference to ultimate recovery from ACE, in light of our conclusion that City 

Centre is an additional insured and therefore has coverage under the ACE policy as 

a matter of law, we address the issue to clarify that no similar right exists to sue 

ACE directly under Wisconsin’s direct action statute.10 

¶35 WISCONSIN STAT. § 632.24 confers standing to sue on a “policy of 

insurance covering liability to others for negligence” to any “persons entitled to 

 

9

 It is important to note that the coverage for Broadwind’s indemnification obligations, 

unlike its coverage under the additional insured provision, is limited to injury caused by 

Broadwind’s negligence since, as previously noted, the indemnification agreement is expressly so 

limited. Specifically, the indemnification obligation in the lease provides that Broadwind must 

indemnify City Centre for injuries “due directly or indirectly to negligent use of the Premises or 

any part thereof” by Broadwind. 

10

 Aside from addressing this issue for the sake of completeness, we note that there are 

substantive implications to whether City Centre’s right to seek coverage arises by virtue of its status 

as an additional insured versus its right to tap into Broadwind’s coverage under the direct action 

statute. First, City Centre’s rights as an insured implicate both ACE’s right and duty to defend, as 

opposed to simply a right to seek coverage that Broadwind might have for reimbursement of 

defense costs it might be required to pay under its indemnification agreement. Second, per the terms 

of the policy, coverage under the insured contract exception to the contractually-assumed liability 

exclusion would cause any defense costs paid by ACE to erode the limits of the ACE policy (other 

than in certain narrow circumstances we need not delve into here). That is not the case with respect 

to defense costs that ACE may be required to fund in defending City Centre as its insured. 
No. 2019AP531

22

recover against the insured ... for injury to persons ... irrespective of whether the 

liability is presently established or is contingent.” On its face, the statute appears 

applicable: the ACE policy is a “policy of insurance covering liability to others for 

negligence” and City Centre is a “person[] entitled to recover” from Broadwind for 

“injury to persons.” See § 632.24. As ACE points out, however, our court has 

previously held that a direct action under § 632.2411 cannot be brought with respect 

to contract claims. See Rogers ex rel. Rogers v. Saunders, 2008 WI App 53, 309 

Wis. 2d 238, 750 N.W.2d 477. 

¶36 In Rogers, a patient brought a medical malpractice claim against a 

health care provider. Id., ¶3. The provider’s liability insurer, who was subrogated 

to the provider, filed a third-party complaint, seeking contribution or 

indemnification against the liability insurer for the staffing agency that employed 

the nurse who had provided care, arguing that it was entitled to proceed directly 

against the staffing agency’s insurer under the direct action statute.

12 Id. The only 

basis for the staffing agency’s liability arose by contractual indemnity owed by the 

staffing agency to the health care provider because, this court concluded, any 

 

11

 We note that Wisconsin has two direct action statutes, WIS. STAT. §§ 632.24 and 

803.04(2). The former is often described as “substantive”; the latter “procedural.” Decade’s 

Monthly Income & Appreciation Fund v. Whyte & Hirschboeck, S.C., 164 Wis. 2d 227, 232-35, 

474 N.W.2d 766 (Ct. App. 1991). The parties do not appear to address § 803.04.

12

 The clause at issue in the agreement between the staffing company and the health care 

provider read:

 Contractor agrees to indemnify and hold harmless the Client, 

its officers, agents, directors, trustees, and employees from claims 

and liabilities (including reasonable attorneys’ fees and expenses 

incurred in the defense thereof) relating to any property damage, 

personal injuries or death (“Damages”) arising out of its [sic] acts 

or omissions of Contractor in connection with Contractor’s duties 

and services provided under this Agreement.

Rogers ex rel. Rogers v. Saunders, 2008 WI App 53, ¶7, 309 Wis. 2d 238, 750 N.W.2d 477 

(alteration in original).
No. 2019AP531

23

separate claim against the nurse or her insurer for negligence was statutorily 

precluded under a liability limitation contained in WIS. STAT. § 655.23(5) (2005-

06). This limitation, we concluded, was fatal to the provider’s insurer’s effort to 

invoke the direct action statute against the staffing company’s insurer since that 

statute “allows direct actions against a negligence insurer for negligence claims. It 

does not allow a plaintiff in a contract action to sue the defendant’s insurer.” 

Rogers, 309 Wis. 2d 238, ¶8.

¶37 Despite some superficial distinctions, Rogers’ overriding premise is 

on all fours with this case. Because Dhein is an employee of Broadwind, he has no 

claim against Broadwind for negligence pursuant to the worker’s compensation bar 

in WIS. STAT. § 102.03(2). Likewise, Wisconsin precedent holds that the worker’s 

compensation bar applies to common law contribution claims that third- party 

defendants might assert against the injured party’s employer for the employer’s 

negligence. See Mulder v. Acme-Cleveland Corp., 95 Wis. 2d 173, 177-78, 290 

N.W.2d 276 (1980). Thus, City Centre has no claim of negligence against 

Broadwind; the only potentially viable claim it could have that might trigger an 

exception to the contractually-assumed liability exclusion is for contractual 

indemnity, and, in fact, that is the only exception it has asserted.13 Suffice it to say 

that such a claim does not allow the indemnified party to file a direct action against 

 

13

 The contractually-assumed liability exclusion contains a separate carve-out for “liability 

that would be imposed by law in the absence of any contract or agreement.” The worker’s 

compensation bar, as extended to third-party contribution claims by Mulder v. Acme-Cleveland 

Corp., 95 Wis. 2d 173, 290 N.W.2d 276 (1980), precludes the applicability of this exception.

We note that a claim for contractual indemnity by City Centre against Broadwind itself is 

not barred, although City Centre has not asserted such a claim. See Schaub v. West Bend Mut., 

195 Wis. 2d 181, 183, 536 N.W.2d 123 (Ct. App. 1995); see also Larsen v. J. I. Case Co., 37 Wis. 

2d 516, 520, 155 N.W.2d 666 (1968).
No. 2019AP531

24

the indemnitor’s insurer in light of our holding in Rogers, to which we are bound. 

We therefore conclude that, while Broadwind’s indemnity obligations encompass 

City Centre’s alleged negligence, and the ACE policy covers Broadwind’s 

indemnity obligations, City Centre has no standing to seek that coverage under WIS.

STAT. § 632.24.14

Conclusion

¶38 ACE agreed, per the additional insured endorsement in its policy with 

Broadwind, to cover City Centre with respect to liability for bodily injury caused in 

whole or part by “acts or omissions” of Broadwind or those acting on its behalf. 

Dhein’s accident was at least partially caused by the “acts or omissions” of 

Broadwind or one acting on its behalf, namely Dhein. That the accident occurred 

 

14

 ACE contends that even if City Centre is an additional insured, coverage is precluded 

by late notice of the accident and resulting claim. We do not address ACE’s argument that City 

Centre failed to give timely notice of the claim or whether ACE was prejudiced by such failure as 

these are issues that should be addressed by the trial court on remand. We do note that the policy’s 

notice of occurrence provision applies only to the named insured and any failure to provide such a 

notice cannot be attributed to the additional insured. In contrast, the policy separately requires that 

the named insured “and any other involved insured must ... immediately send [ACE] copies of any 

demands, notices, summonses or legal papers received in connection with the claim or ‘suit.’” 

From the record, it appears that the third-party suit against ACE was the first notice of the incident 

or any claim arising therefrom and that this suit was filed approximately fourteen months after 

Dhein’s original suit against City Centre. The questions on notice will therefore be when was it 

reasonably possible for City Centre to provide notice and whether notice of the claim was provided 

as soon as reasonably possible, and if it was not, whether ACE was prejudiced by the fourteenmonth delay in providing notice. See WIS. STAT. § 632.26. In addressing this issue, factual 

questions will need to be resolved concerning, among other things, when City Centre first became 

aware of the incident and any claim against it, when it became aware of the policy at issue sufficient 

to allow it to provide such notice, and whether the insurer was prejudiced by any late notice of the 

claim. 
No. 2019AP531

2

on premises owned by City Centre does not preclude such coverage.15 We make 

clear that ACE’s coverage obligation stems from the additional insured provision, 

and not from the insured contract provision, since the direct action statute does not 

permit City Centre to seek insurance coverage separately available to Broadwind 

for liability that exists under contract. We reverse and remand for proceedings 

consistent with this decision.

By the Court.—Order reversed and cause remanded.

 

15

 The parties do not address any issues concerning ACE’s duty to defend, and to the extent 

this is an issue, it would need to be addressed on remand. We note that any such duty would not 

arise unless and until the underlying suit was tendered to ACE, and this would preclude recovery 

of pre-tender defense costs. See Towne Realty, Inc. v. Zurich Ins. Co., 201 Wis. 2d 260, 271, 548 

N.W.2d 64 (1996) (“Zurich had no duty to defend until it had been put on notice that there was a 

claim against the Insureds.”).