Title: Rural Mutual Insurance Co. v. Lester Buildings, LLC
Citation: N/A
Docket Number: 2016AP001837
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: June 18, 2019

2019 WI 70 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2016AP001837 
COMPLETE TITLE: 
Rural Mutual Insurance Company, 
          Plaintiff-Appellant-Petitioner, 
     v. 
Lester Buildings, LLC and The Phoenix Insurance 
Company, 
          Defendants-Third-Party  
          Plaintiffs-Respondents, 
West Bend Mutual Insurance Company, 
          Defendant-Respondent, 
Jim Herman, Inc., 
          Defendant-Co-Appellant, 
     v. 
Van Wyks, Inc., 
          Third-Party Defendant-Respondent. 
 
 
 
REVIEW OF DECISION OF THE COURT OF APPEALS 
Reported at 382 Wis. 2d 269,915 N.W.2d 729 
(2018 – unpublished) 
 
 
OPINION FILED: 
June 18, 2019 
SUBMITTED ON BRIEFS: 
 
ORAL ARGUMENT: 
March 20, 2019 
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit 
 
COUNTY: 
Dane 
 
JUDGE: 
Maryann Sumi & Valerie Bailey-Rihn 
 
 
 
JUSTICES: 
 
 
CONCURRED: 
      
 
DISSENTED: 
KELLY, J. dissents, joined by A.W. BRADLEY, J. 
(opinion filed). 
 
NOT PARTICIPATING: ABRAHAMSON, J. did not participate,  
ZIEGLER, J. withdrew from participation.    
 
 
 
ATTORNEYS: 
 
 
For the plaintiff-appellant-petitioner, there were briefs 
filed by Monte E. Weiss, Charles W. Kramer, and Weiss Law 
Offices S.C., Mequon. There was oral argument by Monte E. Weiss. 
 
For the defendant-third-party-plaintiff-respondent, there 
was a brief filed by Kevin A. Christensen, Patricia A. Stone, 
 
 
2
and Wilson Elser Moskowitz Edelman & Dicker, LLP, Milwaukee. 
There was oral argument by Kevin A. Christensen. 
 
For the third-party-defendant-respondent, there was a brief 
filed by Eugene M. LaFlamme, Esq., Michael A. Snider, Esq., and 
McCoy Leavitt Laskey LLC, Waukesha. There was oral argument by 
Eugene M. LaFlamme. 
 
For the defendant-respondent, there was a brief filed by 
Jeffrey Leavell, Danielle N. Rousset, and Jeffrey Leavell, S.C., 
Racine. There was oral argument by Jeffrey Leavell. 
 
 
 
2019 WI 70
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2016AP1837 
(L.C. No. 
2014CV1354) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Rural Mutual Insurance Company, 
 
          Plaintiff-Appellant-Petitioner, 
 
     v. 
 
Lester Buildings, LLC and The Phoenix Insurance 
Company, 
 
          Defendants-Third-Party  
          Plaintiffs-Respondents, 
 
West Bend Mutual Insurance Company, 
 
          Defendant-Respondent, 
 
Jim Herman, Inc., 
 
          Defendant-Co-Appellant, 
 
     v. 
 
Van Wyks, Inc., 
 
          Third-Party Defendant-Respondent. 
FILED 
 
JUN 18, 2019 
 
Sheila T. Reiff 
Clerk of Supreme Court 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed.   
 
¶1 
REBECCA FRANK DALLET, J.   Rural Mutual Insurance 
Company seeks review of an unpublished per curiam decision of 
No. 
2016AP1837   
 
2 
 
the court of appeals1 affirming the circuit court's grant of 
summary judgment dismissing Rural Mutual's subrogation claims.2  
The circuit court determined that Rural Mutual's claims against 
Lester Buildings, LLC, Phoenix Insurance Company, Van Wyks, 
Inc., and West Bend Mutual Insurance Company were barred 
pursuant 
to 
a 
subrogation 
waiver 
contained 
in 
a 
Lester 
Buildings' contract with Rural Mutual's insured, Jim Herman, 
Inc. ("Herman").  The circuit court also found that Wis. Stat. 
§ 895.447 did not void that subrogation waiver.3 
¶2 
The court of appeals affirmed the circuit court and 
dismissed Rural Mutual's claims.  However, the court of appeals 
declined to address whether Wis. Stat. § 895.447 voided the 
subrogation 
waiver, 
reasoning 
that 
the 
argument 
was 
insufficiently developed.  We granted review as to two issues:  
Does § 895.447 void the subrogation waiver at issue?  And was 
the subrogation waiver an unenforceable exculpatory contract 
contrary to public policy?  
¶3 
We conclude that Wis. Stat. § 895.447 does not void 
the subrogation waiver in Lester Buildings' contract because the 
waiver does not limit or eliminate tort liability.  We also 
                                                 
1 Rural Mut. Ins. Co. v. Lester Buildings, LLC, No. 
2016AP1837, unpublished slip op. (Wis. Ct. App. Apr. 26, 2018). 
2 Judges Maryann Sumi and Valerie Bailey-Rihn of Dane County 
Circuit Court presided.   
3 All subsequent references to the Wisconsin Statutes are to 
the 2017-18 version unless otherwise indicated. 
No. 
2016AP1837   
 
3 
 
conclude that the subrogation waiver is not an unenforceable 
exculpatory contract contrary to public policy.  We therefore 
affirm the court of appeals.   
I.  FACTUAL BACKGROUND AND PROCEDURAL POSTURE 
¶4 
As the court of appeals correctly noted, "[t]he 
procedural history of this case is lengthy and complicated."  
Rural Mut. Ins. Co. v. Lester Buildings, LLC, No. 2016AP1837, 
unpublished slip op., ¶2 (Wis. Ct. App. Apr. 26, 2018).  In 
2009, Herman entered into a contract with Lester Buildings for 
the design and construction of a barn on its property.  The 
contract included the following language: 
Both parties waive all rights against each other 
and 
any 
of 
their 
respective 
contractors, 
subcontractors and suppliers of any tier and any 
design professional engaged with respect to the 
Project, for recovery of any damages caused by 
casualty or other perils to the extent covered by 
property insurance applicable to the Work or the 
Project, except such rights as they have to the 
proceeds of such property insurance and to the extent 
necessary to recover amounts relating to deductibles 
of 
self-insured 
retentions 
applicable 
to 
insured 
losses. . . .  This waiver of subrogation shall be 
effective 
notwithstanding 
allegations 
of 
fault, 
negligence, or indemnity obligation of any party 
seeking the benefit or production of such waiver.   
¶5 
Herman's barn required concrete in several areas, 
including the foundation, walls, and piers that supported the 
roof.  The specifications for the concrete were provided by 
Lester Buildings, but Herman entered into a separate contract 
No. 
2016AP1837   
 
4 
 
with Van Wyks in May 2010 to provide the concrete.4  The barn 
that Lester Buildings and Van Wyks constructed was covered by 
Herman's insurance policy with Rural Mutual.  In that policy, 
Rural Mutual explicitly allowed its insured, Herman, to waive 
its rights without interfering with Rural Mutual's insurance 
coverage:  "You may waive your right of recovery in writing 
before a loss occurs without voiding the coverage." 
¶6 
The barn was completed in June 2010.  In May 2013, one 
half of the barn collapsed due to strong winds, killing or 
causing catastrophic injuries to a large number of Herman's 
cattle.  Rural Mutual asserts that the barn collapsed due to the 
improper installation of steel rebar cages in the concrete piers 
supporting the barn's roof.  The cages were allegedly installed 
by Van Wyks several inches below where Lester Buildings' design 
had called for them to be installed, which led to the column 
tops cracking from the strong winds.5  Rural Mutual paid 
approximately 
$607,000 
to 
rebuild 
Herman's 
barn 
and 
approximately $51,000 for the losses related to cattle and other 
miscellaneous damages.   
                                                 
4 The Van Wyks' contract also contained a waiver of claims, 
similar to that found in the Lester Buildings' contract, which 
read:  "Both parties waive all rights against each other and any 
of their respective contractors, subcontractors and suppliers 
. . . ."  Van Wyks' contract is not at issue on appeal.   
5 The parties dispute who is at fault regarding where the 
rebar cages were ultimately placed.   
No. 
2016AP1837   
 
5 
 
¶7 
In 2014, Rural Mutual brought a subrogation action 
against Lester Buildings and its insurer, Phoenix, alleging that 
Lester Buildings had breached its contract with Herman and had 
been negligent in placing the rebar cages lower than where the 
specifications required.  Lester Buildings and Phoenix then 
filed third-party cross-claims against Van Wyks and its insurer, 
West Bend, alleging that if Lester Buildings was liable to Rural 
Mutual, then Van Wyks would be responsible for any damages owed.  
Rural Mutual filed an amended complaint which included a count 
against West Bend, pursuant to Wisconsin's direct action 
statute, Wis. Stat. § 632.24.6  Lester Buildings also moved to 
join Herman as a defendant in the case.  Lester Buildings and 
Van Wyks, and their respective insurers (collectively the 
"Contractors"), filed separate motions for summary judgment 
against Rural Mutual.  The Contractors asserted that the 
subrogation waiver in the Lester Buildings' contract barred 
Rural Mutual's claims against all of them.   
¶8 
The circuit court granted summary judgment to the 
Contractors on all of Rural Mutual's claims, reasoning that the 
                                                 
6 Wisconsin Stat. § 632.24 reads:  
Any 
bond 
or 
policy 
of 
insurance 
covering 
liability to others for negligence makes the insurer 
liable, up to the amounts stated in the bond or 
policy, to the persons entitled to recover against the 
insured for the death of any person or for injury to 
persons or property, irrespective of whether the 
liability is presently established or is contingent 
and to become fixed or certain by final judgment 
against the insured. 
No. 
2016AP1837   
 
6 
 
subrogation waiver was enforceable and precluded Rural Mutual's 
claims.  The circuit court determined that Gerdmann and Dykstra 
controlled its interpretation of Wis. Stat. § 895.447 and 
resolved the claims against Rural Mutual.  Gerdmann v. United 
States Fire Ins. Co., 119 Wis. 2d 367, 350 N.W.2d 730 (Ct. App. 
1984); Dykstra v. Arthur G. McKee & Co., 100 Wis. 2d 120, 301 
N.W.2d 201 (1981).  In affirming the circuit court's decision, 
the court of appeals did not address Rural Mutual's argument 
that § 895.447 barred the subrogation waiver because it found 
Rural Mutual's argument regarding the specific waiver to be 
"woefully insufficient."  Rural Mut., No. 2016AP1837, ¶20.7  
Rural Mutual filed a motion to reconsider, which was denied.  
Rural Mutual then petitioned this court for review.  
II.  STANDARD OF REVIEW 
¶9 
We review a decision on summary judgment using the 
same methodology as the circuit court.  Green Spring Farms v. 
Kersten, 136 Wis. 2d 304, 314-15, 401 N.W.2d 816 (1987).  
Summary judgment shall be granted where the record demonstrates 
                                                 
7 However, in a footnote, the court of appeals stated that 
if it had reached the issue, it would have concluded that Wis. 
Stat. § 895.447 did not void the subrogation waiver.  Rural 
Mut., No. 2016AP1837, ¶23 n.6.  The court of appeals observed 
that 
the 
subrogation 
waiver 
does 
not 
limit 
Herman 
from 
recovering against Lester Buildings in all circumstances.  Id.  
Instead, it limits Herman from recovering damages from Lester 
Buildings that were covered by insurance and limits recovery by 
the insurer for damages paid under the insurance policy.  Id.  
For example, the court of appeals discerned that if the collapse 
was not covered by an insurance policy, there would be no limit 
on Lester Buildings' tort liability.  Id.   
No. 
2016AP1837   
 
7 
 
"that there is no genuine issue as to any material fact and that 
the moving party is entitled to a judgment as a matter of law."  
Wis. Stat. § 802.08(2).  The facts related to this issue are not 
in 
dispute 
and therefore 
only 
questions 
of 
law 
remain.  
Statutory interpretation and the interpretation of an insurance 
policy present questions of law that this court reviews de novo.  
Mau v. North Dakota Ins. Reserve Fund, 2001 WI 134, ¶¶12, 28, 
248 Wis. 2d 1031, 637 N.W.2d 45.  
III.  ANALYSIS 
¶10 This case involves the validity of a subrogation 
waiver contained in Lester Buildings' contract with Rural 
Mutual's insured, Herman.  The Contractors argue that Rural 
Mutual's subrogation claims are entirely precluded by the 
subrogation waiver in Lester Buildings' contract with Herman.  
Rural Mutual asserts that Wis. Stat. § 895.447 voids the 
subrogation waiver.  In the alternative, Rural Mutual asserts 
that the subrogation waiver is an unenforceable exculpatory 
contract contrary to public policy.8   
 
A. 
Wisconsin Stat. § 895.447 does not void the 
subrogation waiver. 
¶11 We first interpret Wis. Stat. § 895.447 to determine 
whether 
it 
voids 
the 
subrogation 
waiver. 
 
Statutory 
interpretation begins with the language of the statute and if 
the meaning is plain, the inquiry ordinarily ends.  State ex 
                                                 
8 Rural Mutual concedes that if the subrogation waiver is 
valid, all of its claims would be extinguished.   
No. 
2016AP1837   
 
8 
 
rel. Kalal v. Circuit Court for Dane Cty., 2004 WI 58, ¶45, 271 
Wis. 2d 633, 681 N.W.2d 110.  "A statute's purpose or scope may 
be readily apparent from its plain language or its relationship 
to surrounding or closely-related statutes——that is, from its 
context or the structure of the statute as a coherent whole."  
Id., ¶49.   
¶12 We begin with an examination of the plain language of 
Wis. Stat. § 895.447, which reads: 
Any 
provision 
to 
limit 
or 
eliminate 
tort 
liability as a part of or in connection with any 
contract, covenant or agreement relating to the 
construction, alteration, repair or maintenance of a 
building, 
structure, 
or 
other 
work 
related 
to 
construction, including any moving, demolition or 
excavation, is against public policy and void.   
(Emphasis added.)  Neither § 895.447 nor surrounding statutes 
define the term "tort liability."  "Statutory language is given 
its 
common, 
ordinary, 
and 
accepted 
meaning, 
except 
that 
technical or specially defined words or phrases are given their 
technical or special definitional meaning."  Kalal, 271 Wis. 2d 
633, ¶45.  "Technical terms or legal terms of art appearing in a 
statute 
are 
given 
their 
accepted 
technical 
or 
legal 
definitions . . . ."  See Bosco v. LIRC, 2004 WI 77, ¶23, 272 
Wis. 2d 586, 681 N.W.2d 157; see also Wis. Stat. § 990.01(1). 
¶13 The dispute lies in whether the subrogation waiver 
here limits or eliminates "tort liability" and is therefore 
void.  Due to the absence of a statutory definition for the 
legal term "tort liability," we look to Black's Law Dictionary 
for assistance.  A "tort" is defined as a "civil wrong . . . for 
No. 
2016AP1837   
 
9 
 
which a remedy may be obtained."  Tort, Black's Law Dictionary 
1717 (10th ed. 2014); see also Curda-Derickson v. Derickson, 
2003 WI App 167, ¶17, 266 Wis. 2d 453, 668 N.W.2d 736 (citing to 
Black's Law Dictionary for the definition of tort).  "Liability" 
is defined as "[t]he quality, state, or condition of being 
legally obligated or accountable; legal responsibility to 
another or to society, enforceable by civil remedy or criminal 
punishment."  Liability, Black's Law Dictionary 1053 (10th ed. 
2014).  Taken together, "tort liability" is the legal obligation 
or responsibility to another resulting from a civil wrong or 
injury for which a remedy may be obtained.9   
¶14 Rural Mutual selectively reads the words "waive all 
rights 
against 
each 
other" 
together 
with 
the 
words 
"notwithstanding 
allegations 
of 
fault, 
negligence, 
or 
indemnity," in the Lester Buildings' contract and concludes that 
this language eliminates tort liability in violation of Wis. 
Stat. § 895.447.  The subrogation waiver must be read in its 
entirety, however, to understand exactly what is being waived:  
"Both parties waive all rights against each other . . . for 
recovery of any damages . . . to the extent covered by property 
insurance . . . .  This waiver of subrogation shall be effective 
                                                 
9 The Supreme Court of Michigan recently took a similar 
approach in defining the term "tort liability" when there was no 
statutory definition or case law defining the term.  See In re 
Bradley Estate, 835 N.W.2d 545, 555 (Mich. 2013). 
No. 
2016AP1837   
 
10 
 
notwithstanding allegations of fault, negligence, or indemnity 
obligation of any party . . . ."  (Emphasis added.)10 
¶15 The subrogation waiver does not limit or eliminate the 
legal responsibility of the Contractors to Herman for the 
collapse of Herman's barn.  The Contractors and any other 
subcontractors or suppliers who constructed the barn are still 
liable to Herman for their negligent acts.11  Instead, the 
subrogation waiver waives Herman's right to recover damages from 
the Contractors for their wrongful acts to the extent those 
damages are covered by a property insurance policy such as the 
one between Herman and Rural Mutual.  Responsibility for payment 
of damages, the remedy for tort liability, has shifted from the 
Contractors to Rural Mutual.12  The dissent improperly equates 
collection of damages with liability and asserts that if Herman 
cannot collect all of its damages from the Contractors, then the 
                                                 
10 Contrary to Rural Mutual's assertion, the language 
"notwithstanding [any] allegations of fault, negligence, or 
indemnity" does not broaden the subrogation waiver; rather, it 
is illustrative of the types of claims that may be brought.    
11 The waiver stated that Lester Buildings and Herman "waive 
all rights against each other and any of their respective 
contractors, subcontractors and suppliers of any tier" and do so 
"notwithstanding allegations of fault, negligence . . . ."  The 
waiver 
therefore 
unambiguously 
applies 
to 
all 
of 
the  
"contractors, subcontractors and suppliers of any tier."  As a 
contractor to Herman, Van Wyks was included within this 
provision.   
12 Tort liability, "the legal obligation or responsibility 
to another resulting from a civil wrong or injury for which a 
remedy may be obtained," does not specify from whom the remedy 
may be obtained. 
No. 
2016AP1837   
 
11 
 
Contractors' liability is limited.13  However, the Contractors 
could be 100 percent liable for wrongful conduct but, based on 
the subrogation waiver expressly allowed by Rural Mutual's 
policy, Rural Mutual could be responsible for paying damages to 
Herman for property loss. 
¶16 Moreover, the remedy that may be obtained as a result  
of the Contractors' civil wrong is not limited because Herman 
may still recover damages that are not covered by its policy 
with Rural Mutual, including any deductibles applicable to its 
losses.14  In fact, Herman pursued and ultimately resolved its 
claims against the Contractors for uncovered losses they 
allegedly caused.15   
¶17 Lastly, we examine prior case law interpreting Wis. 
Stat. § 895.447 to corroborate its plain meaning.  See Legue v. 
City of Racine, 2014 WI 92, ¶61, 357 Wis. 2d 50, 849 N.W.2d 837; 
Force ex rel. Welcenbach v. American Family Mut. Ins. Co., 2014 
WI 82, ¶31, 356 Wis. 2d 582, 850 N.W.2d 866.  Only one case has 
applied the plain language of Wis. Stat. § 895.447, Gerdmann, 
                                                 
13 The dissent writes:  "[o]f course the Contractors' tort 
liability to Herman is limited——the subrogation clause made it 
responsible for only 20 percent of the damage it caused."  
Dissent, ¶39. 
14 The subrogation waiver provides an exception for rights 
to the proceeds of the property insurance and, as necessary, to 
recover amounts relating to deductibles.   
15 Herman was ultimately made whole through a combination of 
its policy with Rural Mutual and its ability to sue the 
Contractors for damages not covered by that policy.   
No. 
2016AP1837   
 
12 
 
119 Wis. 2d 367, and it supports our conclusion regarding the 
subrogation waiver at issue.  In Gerdmann, the court of appeals 
held that an indemnity clause between Roen, a contractor, and 
Manitowoc, the property owner, was not void under Wis. Stat. 
§ 895.49, the statutory precursor to § 895.447.16  Gerdmann, 119 
Wis. 2d at 374.  The Gerdmann court reasoned that the indemnity 
agreement at issue "neither limits nor eliminates Manitowoc's 
tort liability to third parties [Gerdmann].  Rather, it makes 
Roen the insurer should damages result."  Id.  The Gerdmann 
court 
relied 
on 
this 
court's 
decision 
in 
Dykstra, 
100 
Wis. 2d 120, which upheld an indemnification agreement executed 
prior to the codification of the precursor to § 895.447.  In a 
footnote the court stated:  "[w]e note in passing, however, that 
                                                 
16 The indemnity agreement in Gerdmann read: 
Contractor shall indemnify the Owner and Engineer 
against and hold the Owner and Engineer harmless from 
any and all liability for damages on account of 
injury, 
including 
death, 
to 
persons, 
including 
employees 
of 
Contractor, 
or 
damage 
to 
property 
resulting from or arising out of or in any way 
connected with the performance of work under this 
Contract by Contractor or any Subcontractor. In 
addition, Contractor shall reimburse Owner for all 
costs, 
expenses, 
and 
loss 
incurred 
by 
them 
in 
consequence of any claims, demands, and causes of 
action, whether meritorious or not, which may be 
brought against them and arising out of the operations 
covered by the Contract. . . .  Contractor shall pay 
any costs, including Attorney's fees, that may be 
incurred by Owner in enforcing this indemnity. . . .   
Gerdmann v. United States Fire Ins. Co., 119 Wis. 2d 367, 374, 
350 N.W.2d 730 (Ct. App. 1984).   
No. 
2016AP1837   
 
13 
 
it does not appear that this statute [§ 895.447] necessarily 
outlaws indemnity agreements of the kind with which this opinion 
is concerned."  Dykstra, 100 Wis. 2d at 130 n.4.  The Gerdmann 
court characterized this court's observation in Dykstra as 
"important" because it indicated that this court "did not 
believe 
that 
the 
statute 
clearly 
voids 
such 
indemnity 
agreements."  Gerdmann, 119 Wis. 2d at 374.  As in Gerdmann, the 
subrogation 
waiver 
neither 
limits 
nor 
eliminates 
the 
Contractors' tort liability, it simply makes Rural Mutual the 
insurer should property damage result.  Therefore, we conclude 
that § 895.447 does not void the subrogation waiver here because 
it does not limit or eliminate tort liability.   
 
B.  The subrogation waiver does not relieve a party from 
liability for harm caused by its own negligence and therefore it 
is not an unenforceable exculpatory contract. 
¶18 Rural Mutual asserts that the subrogation waiver is an 
unenforceable exculpatory contract that is contrary to public 
policy.  While Rural Mutual did not brief this argument to the 
court of appeals, we will nonetheless consider it.17  To the 
extent that Rural Mutual argues that Wisconsin law prohibits the 
enforcement of exculpatory contracts for reckless conduct, there 
is no evidence in the record to establish reckless conduct on 
                                                 
17 See e.g., Hopper v. City of Madison, 79 Wis. 2d 120, 137, 
256 N.W.2d 139 (1977) (noting that whether this court will 
consider an issue not raised before the circuit court "depends 
upon the facts and circumstances of each case."). 
No. 
2016AP1837   
 
14 
 
the part of the Contractors, and therefore we will not reach 
that issue.18   
¶19 In Merten v. Nathan, 108 Wis. 2d 205, 210, 321 
N.W.2d 173 (1982), we defined an exculpatory contract as one 
which "relieve[s] a party from liability for harm caused by his 
or her own negligence."  In its oral ruling in this case, the 
circuit court held that the subrogation waiver was not an all-
encompassing avoidance of liability and therefore did not meet 
the definition of an exculpatory contract.19  The circuit court 
relied upon Rainbow Country Rentals & Retail, Inc. v. Ameritech 
Publishing, Inc., 2005 WI 153, 286 Wis. 2d 170, 706 N.W.2d 95, 
where this court held that a contract restricting recoverable 
damages, but not releasing a party from liability, did not meet 
the operational definition of an exculpatory contract.   
¶20 We agree with the circuit court's conclusion.  As 
detailed above, the subrogation waiver in this case did not 
exculpate the Contractors from liability, it merely shifted the 
responsibility for payment of damages.  If the Contractors were 
negligent or otherwise at fault, the subrogation waiver shifted 
recovery of damages for property loss to Herman's insurer, Rural 
                                                 
18 We decline to answer a question unsupported by the facts 
of the case or to render an advisory opinion on an issue that is 
not ripe for adjudication.  See Tammi v. Porsche Cars N. Am., 
Inc., 2009 WI 83, ¶3, 320 Wis. 2d 45, 768 N.W.2d 783. 
19 The circuit court also relied on the equal bargaining 
positions of the parties; however, we can identify no authority 
to support the consideration of bargaining positions when 
deciding if a contract meets the definition of exculpatory. 
No. 
2016AP1837   
 
15 
 
Mutual, only to the extent covered by Herman's policy with Rural 
Mutual.  Herman could still recover damages not covered by its 
policy with Rural Mutual from the Contractors, including any 
deductibles.   
¶21 We also observe that the court of appeals rejected a 
public policy challenge to a contractual subrogation waiver in a 
similar situation involving sophisticated parties where the 
waiver was expressly authorized by the insurer in its policy.  
See Factory Mut. Ins. Co. v. Citizens Ins. Co. of America, 2006 
WI App 16, ¶20, 288 Wis. 2d 730, 709 N.W.2d 82.  Here, Rural 
Mutual expressly anticipated and allowed for this outcome, as 
evidenced by its policy language permitting Herman to "waive 
[its] right of recovery in writing before a loss occurs without 
voiding the coverage."  Rural Mutual received a benefit, in the 
form of premium payments, for expressly allowing its insured to 
allocate risk in this way.  We will not rewrite Rural Mutual's 
policy to exonerate it from a risk that it contemplated and for 
which it received a premium.  See Algrem v. Nowlan, 37 
Wis. 2d 70, 79, 154 N.W.2d 217 (1967) ("'when parties to a 
contract adopt a provision . . . which contains no element of 
ambiguity, 
the 
court 
has 
no 
right, 
by 
a 
process 
of 
interpretation to relieve one of them from any disadvantageous 
terms which [it] has actually made'") (quoted source omitted).   
¶22 The subrogation waiver in this case does not immunize 
the allegedly negligent parties from liability or require the 
injured party to go uncompensated, and thus it is not an 
unenforceable exculpatory contract contrary to public policy.   
No. 
2016AP1837   
 
16 
 
IV. CONCLUSION 
¶23 We conclude that Wis. Stat. § 895.447 does not void 
the subrogation waiver in Lester Buildings' contract because the 
waiver does not limit or eliminate tort liability.  We also 
conclude that the subrogation waiver is not an unenforceable 
exculpatory contract contrary to public policy.  We therefore 
affirm the court of appeals and uphold the grant of summary 
judgment.  
By the Court.—The decision of the court of appeals is 
affirmed. 
¶24 SHIRLEY 
S. 
ABRAHAMSON, 
J., 
withdrew 
from 
participation. 
¶25 ANNETTE KINGSLAND ZIEGLER, J., did not participate. 
 
 
No. 2016AP1837.dk 
1 
 
¶26 DANIEL KELLY, J.   (dissenting).  The court's error is 
really pretty simple.  Where the Legislature said that a 
contract may not limit a tortfeasor's liability, the court heard 
that a contract may not limit the victim's right to be made 
whole.  These are not the same things.  Because the court said 
they are, I respectfully dissent. 
¶27 Demonstrating 
where 
the 
court's 
analysis 
stopped 
tracking Wis. Stat. § 895.447 requires some table-setting.  So 
I'll start with the central parties and some hypothetical 
numbers.  Jim Herman, Inc. ("Herman") hired Lester Buildings, 
LLC, and others ("the Contractors") to build a barn.  The barn 
failed because of the Contractors' (alleged) negligence, causing 
Herman significant damages.  Rural Mutual Insurance Company 
("Rural") paid Herman for most of the damage he suffered, and 
the Contractors paid the balance.  For the sake of simplicity, 
I'll say the total damages were $100,000, Rural paid $80,000 of 
that, and because of the contract clause at issue in this case, 
the Contractors paid $20,000. 
¶28 Next we need to know what we mean when we talk about 
"tort liability."   The court provided a workable definition——it 
is "the legal obligation or responsibility to another resulting 
from a civil wrong or injury for which a remedy may be 
obtained."  Majority op., ¶13.  In this case, therefore, when we 
speak of tort liability we are speaking of "[the Contractors'] 
legal obligation or responsibility to [Herman] resulting from a 
civil wrong or injury for which a remedy may be obtained."  Id.  
That is to say, we look at this from the perspective of what the 
Contractors owe Herman for their tortious behavior. 
No. 2016AP1837.dk 
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¶29 Now we are ready to assess the contract's impact on 
the tort liability involved in this case.  Without Rural's 
insurance payment and the contract's subrogation waiver, the 
Contractors would be liable to Herman for $100,000.  But with 
the insurance payment and subrogation waiver, the Contractors 
are liable to Herman for only $20,000.  In either scenario, 
Herman still receives $100,000.  The question is whether the 
latter scenario represents the limitation or elimination of tort 
liability. 
¶30 The court sees no difference in tort liability between 
these two scenarios.  In fact, it says "[t] he subrogation 
waiver does not limit or eliminate the legal responsibility of 
the Contractors to Herman for the collapse of Herman's barn.  
The Contractors and any other subcontractors or suppliers who 
constructed the barn are still liable to Herman for their 
negligent acts."  Id., ¶15 (footnote omitted).  But how can that 
be true if the duty to pay Herman has decreased from $100,000 to 
$20,000?  The court does not explain, but does give some insight 
into the nature of its error. 
¶31 I think the court's misunderstanding stems from the 
following four errors:  (1) its basic misunderstanding of tort 
law; (2) its failure to distinguish between casualty insurance 
policies and commercial general liability ("CGL") insurance 
policies; (3) its conflation of contract and tort liability; and 
(4) its shift in focus from liability to wholeness. 
¶32 The court's first error goes to the very concept of 
torts.  The raison d'être of tort law is holding tortfeasors 
responsible for the damages they cause.  The court, however, 
No. 2016AP1837.dk 
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isn't so sure.  It says:  "Tort liability, 'the legal obligation 
or responsibility to another resulting from a civil wrong or 
injury for which a remedy may be obtained,' does not specify 
from whom the remedy may be obtained."  Id., ¶15 n.12.  Yes, 
actually it does.  The remedy may be obtained from the 
tortfeasor.  The court's own definition of "tort liability" 
should have informed it that we really do know the identity of 
the one against whom a remedy may be had.  The "legal 
obligation" and the "remedy" to which the court refers are 
reciprocals.  The one with the right to a remedy is the one to 
whom the legal obligation is owed.  Inversely, the one with a 
legal obligation owes it to the one with a remedy.  So if a 
civil wrong gives rise to a legal obligation to someone else, 
the "someone else" is the person who has the right to pursue the 
remedy.  And that person may pursue the remedy against the one 
who owes the legal obligation.  So the court cannot maintain its 
definition of "tort liability" while professing agnosticism 
about the target of the remedy. 
¶33 We used to know this.  "An individual is personally 
responsible for his own tortious conduct."  Oxmans' Erwin Meat 
Co. v. Blacketer, 86 Wis. 2d 683, 692, 273 N.W.2d 285 (1979). 
That is to say, the injured person has a remedy against the 
tortfeasor.  We have recognized this as a basic proposition as 
recently as 2001:  "It is a basic principle of law, as well as 
common sense, that one is typically liable only for his or her 
own acts, not the acts of others."  Lewis v. Physicians Ins. Co. 
of Wisconsin, 2001 WI 60, ¶11, 243 Wis. 2d 648, 627 N.W.2d 484 
(footnote omitted).  For what is a tortfeasor liable?  Damages, 
No. 2016AP1837.dk 
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of course:  "Tort law has generally been viewed as serving three 
broad social purposes:  (1) as a matter of justice, tort law 
shifts the losses caused by a personal injury to the one at 
fault . . . ."  CLL Assocs. Ltd. P'ship v. Arrowhead Pac. Corp., 
174 Wis. 2d 604, 610, 497 N.W.2d 115 (1993) (emphasis added).  
The tortfeasor's responsibility for the damages he causes is so 
basic that over a century ago Justice Oliver Wendell Holmes 
thought we were all agreed on this proposition.  "I assume that 
common-sense is opposed to making one man pay for another man's 
wrong, unless he actually has brought the wrong to pass 
according to the ordinary canons of legal responsibility."  
Oliver Wendell Holmes Jr., Agency, 5 Harv. L. Rev. 1, 14 (1891).   
¶34 Although we used to know this, we have apparently 
forgotten.  So now we say that "the Contractors could be 100 
percent liable for wrongful conduct but . . . Rural Mutual could 
be responsible for paying damages to Herman for property loss."  
Majority op., ¶15.1  What would Justice Holmes say about this?  
He would say "I assume that common-sense is opposed to making 
[Rural] pay for [the Contractors'] wrong, unless [Rural] 
actually has brought the wrong to pass according to the ordinary 
canons of legal responsibility."  Holmes, supra at 14.  We used 
to say the same thing.  See Oxmans' Erwin Meat Co., 86 
Wis. 2d at 692; CLL Assocs. Ltd. P'ship, 174 Wis. 2d at 610. 
                                                 
1 The phrase I elided from my quote of the court's opinion 
was this:  "based on the subrogation waiver expressly allowed by 
Rural Mutual's policy . . . ."  Majority op., ¶15.  The efficacy 
of that waiver depends on the enforceability of the subrogation 
waiver.  If Wis. Stat. § 895.447 invalidates the subrogation 
waiver, then the fact that the policy allows for such a waiver 
is entirely irrelevant. 
No. 2016AP1837.dk 
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¶35 The court's second through fourth errors all fluoresce 
in this single sentence:  "Responsibility for payment of 
damages, the remedy for tort liability, has shifted from the 
Contractors to Rural Mutual."  Majority op., ¶15.  The court's 
second error was conflating casualty and CGL insurance policies.  
CGL policies insure against, inter alia, the insured's tort 
liability.  Casualty policies, generally speaking, pay for loss 
without respect to anyone's tort liability.  So when the court 
casually says the responsibility to pay for Herman's losses 
"shifted" from the Contractors to Rural, it means that a 
casualty insurer, instead of a CGL insurer, was responsible for 
paying for the loss.  This is significant because a casualty 
insurer does not promise to pay for someone's torts; it promises 
to pay for property loss.  So payments made pursuant to Rural's 
policy have nothing to do with tort liability.  The court's 
error on this point feeds directly into its third error——the 
failure to distinguish between tort and contract liability. 
¶36 To accurately determine whether the subrogation clause 
limited tort liability, we must account for the nature of the 
obligations that brought $100,000 into Herman's hands.  Rural 
paid $80,000 to Herman.  But it did not do so because it 
committed a tort against Herman.  It did so because it issued a 
casualty insurance policy in which it promised to pay Herman for 
certain property losses.  In other words, Rural was liable to 
Herman in contract, not tort.  The Contractors, on the other 
hand, paid $20,000 based on their tort liability to Herman.  So 
Herman received $80,000 based on contract liability and $20,000 
based on tort liability.  Therefore, by "shifting" to Rural the 
No. 2016AP1837.dk 
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Contractor's responsibility to pay Herman for the damage it 
caused, the subrogation clause converted $80,000 of tort 
liability into contract liability.  So the court's statement 
that "[t]he Contractors could therefore be 100 percent liable 
for wrongful conduct but, based on the subrogation waiver 
expressly allowed by Rural Mutual's policy, Rural Mutual could 
be responsible for paying damages to Herman for property loss" 
cannot possibly be true.  Majority op., ¶15.  The "shift" made 
the Contractors only 20 percent liable for their tort. 
¶37 The court says this conclusion is a result of my 
mistaken equation of "tort liability" and "damages":  "The 
dissent improperly equates collection of damages with liability 
and asserts that if Herman cannot collect all of its damages 
from the Contractors, then the Contractors' liability is 
limited."2  Id.  But I made no such equation.  All I have done is 
repeat the age-old understanding that there is a necessary and 
inextricable link between tort liability and damages.  It is 
necessary and inextricable because "damages" are part of the 
very definition of a tort.  "Tort claims comprise the familiar 
elements of duty, breach, causation, and damage."  Springer v. 
Nohl Elec. Prod. Corp., 2018 WI 48, ¶36, 381 Wis. 2d 438,  912 
N.W.2d 1; see also United States v. Burke, 504 U.S. 229, 234 
(1992) ("A 'tort' has been defined broadly as a 'civil wrong, 
                                                 
2 This statement is actually a little ironic because it is 
the court's focus on Herman's ability to collect rather than the 
Contractor's liability to pay that forms one of its fundamental 
errors.  See infra, ¶14.  My analysis has nothing to do with 
anyone's ability to collect anything.  It is entirely about the 
tortfeasor's legal obligation to pay. 
No. 2016AP1837.dk 
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other than breach of contract, for which the court will provide 
a remedy in the form of an action for damages.'") (quoted source 
omitted); Anderson v. Green Bay & W.R.R., 99 Wis. 2d 514, 516, 
299 N.W.2d 615 (Ct. App. 1980) ("Before a cause of action for 
negligence can be successfully alleged, there must exist a duty 
of care on the part of the defendant, a breach of that duty, a 
causal connection between the conduct and the injury, and an 
actual loss or damage as a result of the injury.") (footnote 
omitted); and Coffey v. City of Milwaukee, 74 Wis. 2d 526, 531, 
247 N.W.2d 132 (1976) ("In order to constitute a cause of action 
for negligence there must exist:  (1) A duty of care on the part 
of the defendant; (2) a breach of that duty; (3) a causal 
connection between the conduct and the injury; and (4) an actual 
loss or damage as a result of the injury."). 
¶38 So there can be no tort liability without damages.  
And as the court's own definition says, to be liable for a tort 
means to owe a "legal obligation or responsibility" to the 
injured party.  What is the nature of that "obligation or 
responsibility"?  To pay damages.  And if the person is relieved 
of the responsibility for some of those damages, it necessarily 
follows that his tort liability has been, in the words of the 
No. 2016AP1837.dk 
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statute, "limited."3  And this has nothing to do with Herman's 
collection of damages; it relates entirely to the tortfeasor's 
liability for them, which leads to the court's fourth error. 
¶39 The 
court's 
analysis 
is 
inaccurate 
because 
the 
provisions 
of 
Wis. 
Stat. 
§ 895.447 
are 
directed 
at 
the 
Contractors and their liability, whereas the court is focused on 
Herman and its wholeness.  The statute does not prohibit 
contract clauses that prevent a tort victim from being made 
whole.  It prohibits contract provisions that limit or eliminate 
the tortfeasor's liability.  The court sees no difference 
between the two, which is why it can say "the remedy that may be 
obtained as a result of the Contractors' civil wrong is not 
limited because Herman may still recover damages that are not 
covered by its policy with Rural Mutual."  Majority op., ¶16.  
                                                 
3 Neither Gerdmann v. United States Fire Ins. Co., 119 
Wis. 2d 367, 350 N.W.2d 730 (Ct. App. 1984), nor Dykstra v. 
Arthur G. McKee & Co., 100 Wis. 2d 120, 301 N.W.2d 201 (1981), 
support the majority's position.  Nor are they inconsistent with 
mine.  Both the Gerdmann and Dykstra courts addressed indemnity 
agreements, not subrogation waivers.  In an indemnity agreement, 
one contracting party stands in relation to the other as an 
insurer of tort liability, as does an insurer who issues a CGL 
policy.  A tortfeasor with a CGL policy is still entirely liable 
to the injured party for damages; the insurance policy simply 
makes a contracted-for pool of resources available to satisfy 
the judgment.  An indemnity agreement performs largely the same 
function——that is, it does not shift liability, it just makes 
someone else's resources available to satisfy the judgment.  We 
know Wis. Stat. § 895.447 does not forbid insurance for tort 
liability because the statute says so:  "This section does not 
apply to any insurance contract."  § 895.447(2).  On the other 
hand, a subrogation waiver is not an agreement to act as the 
tortfeasor's liability insurer.  It simply eliminates part of 
the tortfeasor's legal responsibility to pay damages to the 
injured party. 
No. 2016AP1837.dk 
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Of course the Contractors' tort liability to Herman is limited——
the subrogation clause made it responsible for only 20 percent 
of the damage it caused.  That is the statute's focus, not 
Herman's full recovery.  Yes, Herman can turn to its own 
casualty insurer to obtain a contract-based recovery for its 
loss.  But the statute has nothing to say about that.  The 
statute says the construction contract may not limit the 
Contractors' tort-based liability to Herman.  By "shifting" 
responsibility for its tort liability to Herman's casualty 
insurer, the subrogation clause quite obviously limited the 
Contractors' tort-based liability to Herman. 
¶40 Finally, there is this.  The court does not explain 
what Wis. Stat. § 895.447 actually does.  Presumably, the court 
would agree that the statute must prohibit some type of 
contractual provision that operates against one of the four 
elements of a tort (duty, breach, causation, damage).  It 
concludes today that the statute does not refer to provisions 
that reduce the tortfeasor's legal obligation to pay damages to 
the victim.  But it says nothing about which tort element the 
statute does immunize against contractual revision.  For all of 
these reasons, I respectfully dissent. 
¶41 I am authorized to state that Justice ANN WALSH 
BRADLEY joins this dissent. 
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