Title: Columbia Propane v. Wisconsin Gas Company
Citation: 2003 WI 38
Docket Number: 2001AP000090
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: May 13, 2003

2003 WI 38 
 
 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
01-0090 
 
 
COMPLETE TITLE: 
 
 
Columbia Propane, L.P., a Limited Partnership,  
 
Plaintiff-Appellant, 
 
v. 
Wisconsin Gas Company, a Wisconsin Corporation,  
 
Defendant-Respondent-Petitioner, 
ABC Insurance Co., a corporation or other 
entity, and DEF Insurance Co., a corporation or 
other entity,  
 
Defendants. 
 
- 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2002 WI App 9 
Reported at:  250 Wis. 2d 582, 649 N.W.2d 819 
(Ct. App. 2002-Published) 
 
 
OPINION FILED: 
May 13, 2003   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
January 15, 2003   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Wood   
 
JUDGE: 
Dennis D. Conway   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING: WILCOX, J., did not participate.   
 
 
 
ATTORNEYS: 
 
For the defendant-respondent-petitioner there were briefs 
by O. Thomas Armstrong, John A. Casey and Quarles & Brady LLP, 
Milwaukee, and oral argument by O. Thomas Armstrong and John A. 
Casey. 
 
For the plaintiff-appellant there was a brief by Michael 
Ash, Michael B. Apfeld, John L. Clancy and Godfrey & Kahn, S.C., 
Milwaukee, and Gerald M. O'Brien and Anderson, Shannon, O'Brien, 
Rice & Bertz, Stevens Point, and oral argument by Michael B. 
Apfeld. 
 
 
 
2
An amicus curiae brief was filed by Charles P. Graupner, 
Pamela L. Gergens and Michael Best & Friedrich LLP, Milwaukee, 
on behalf of Wisconsin Manufacturers and Commerce and the 
Metropolitan Milwaukee Association of Commerce. 
 
 
2003 WI 38 
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  01-0090   
(L.C. No. 
99-CV-242) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Columbia Propane, L.P., a Limited  
Partnership,  
 
          Plaintiff-Appellant, 
 
     v. 
 
Wisconsin Gas Company, a Wisconsin  
Corporation,  
 
          Defendant-Respondent-Petitioner, 
 
ABC Insurance Co., a corporation or other  
entity, and DEF Insurance Co., a  
corporation or other entity,  
 
          Defendants. 
 
FILED 
 
MAY 13, 2003 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed.   
 
¶1 
WILLIAM A. BABLITCH, J.   At issue in this case is 
whether a company that acquires the assets of another company 
via an asset purchase agreement is liable for the liabilities of 
the selling company which are unknown to either party at the 
time they enter into the agreement.   
No.  01-0090    
 
   
 
2 
 
¶2 
The petitioner, Wisconsin Gas Company (Wisconsin Gas) 
purchased the assets of the now defunct People's Gas Company 
(People's Gas), primarily consisting of a tract of real 
property.  Wisconsin Gas subsequently sold the property to 
Columbia Propane, L.P. (Columbia Propane).  About 30 years 
later, 
environmental 
contamination 
was 
discovered 
on 
the 
property, which had been caused by the gas manufacturing 
operations of People's Gas.  The State of Wisconsin brought an 
action 
against 
Columbia 
Propane 
for 
this 
environmental 
contamination.  Columbia Propane then brought an action against 
Wisconsin Gas, claiming that Wisconsin Gas was liable for the 
environmental contamination because it had assumed all the 
liabilities of People's Gas when it purchased its assets.                
¶3 
The Circuit Court for Wood County, Judge Dennis D. 
Conway presiding, found in favor of Wisconsin Gas and granted 
their motion for summary judgment.  The court of appeals 
reversed, concluding that the language in the asset purchase 
agreement between People's Gas and Wisconsin Gas was ambiguous 
regarding whether Wisconsin Gas agreed to assume unknown tort 
liabilities.1  Based on (1) the general rule of non-liability for 
purchasing corporations in the context of asset purchase 
agreements; (2) the express language in the asset purchase 
agreement between Wisconsin Gas and People's Gas; and (3) the 
common interpretation and use of asset purchase agreements in 
                                                 
1 Columbia Propane, L.P. v. Wisconsin Gas Co., 2002 WI App 
9, 250 Wis. 2d 582, 640 N.W.2d 819. 
No.  01-0090    
 
   
 
3 
 
the business community, we conclude that Wisconsin Gas did not 
assume liabilities of People's Gas that were unknown to either 
party at the time they entered into the asset purchase 
agreement.  Accordingly, we reverse the decision of the court of 
appeals and hold that the circuit court properly granted summary 
judgment in favor of Wisconsin Gas.       
I.  FACTS AND PROCEDURAL HISTORY 
¶4 
The now defunct People's Gas owned approximately 1.4 
acres of real estate in Marshfield, Wisconsin consisting of two 
parcels: a southern parcel and a northern parcel.  From 
approximately 1929 to 1959, People's Gas operated a coal gas 
plant on the southern parcel.  In 1959, Wisconsin Gas2 and 
People's Gas began negotiations regarding the sale of the 
southern parcel.  On November 12, 1959, Wisconsin Gas and 
People's Gas signed an "Agreement Between Milwaukee Gas Light 
Company [Wisconsin Gas] And The Stockholders Of People's Gas 
Company" (Stock Agreement), in which the stockholders of 
People's Gas agreed to sell, and Wisconsin Gas agreed to buy, 
all of the outstanding capital stock on the date of a specified 
closing.  
¶5 
The next day, on November 13, 1959, Wisconsin Gas 
filed 
an 
application 
with 
the 
Wisconsin 
Public 
Service 
Commission (PSC) seeking approval to acquire the assets of 
People's Gas by purchasing the outstanding shares of capital 
                                                 
2 At this time, Wisconsin Gas was known as "Milwaukee Gas 
Light Company;" however, we will refer to the company as 
"Wisconsin Gas." 
No.  01-0090    
 
   
 
4 
 
stock of People's Gas in accordance with the Stock Agreement and 
merging People's Gas into Wisconsin Gas in accordance with 
Wis. Stat. § 196.80 (1)(c) (1959-60).3  On December 4, 1959, the 
PSC held a hearing on Wisconsin Gas's application for a stock 
purchase and merger.  On December 22, 1959, Wisconsin Gas wrote 
a letter to the PSC informing it that it was revising the 
proposed form of the acquisition from a stock purchase to an 
                                                 
3 Wis. Stat. § 196.80(1)(c) (1959-1960) provided:  
 
Any public utility owning all the stock of any 
other public utility may file in the office of the 
secretary of state a certificate of such ownership, in 
its name and under its corporate seal, signed by its 
president or a vice president and its secretary or 
treasurer, and setting forth a copy of the resolution 
of its board of directors to merge such other 
corporation and to assume all of its obligations, and 
the 
date 
of 
the 
adoption 
of 
such 
resolution.  
Thereupon 
all 
of 
the 
estate, 
property 
rights, 
privileges and franchises of such other corporation 
shall vest in and be held and enjoyed by such 
possessor 
corporation 
as 
fully and entirely and 
without change or diminution as the same were before 
held and enjoyed by such other corporation, and be 
managed and controlled by such possessor corporation, 
but subject to all liabilities and obligations of such 
other corporation and the rights of all creditors 
thereof.  The possessor corporation shall be deemed to 
have assumed all the liabilities and obligations of 
the merged corporation, and shall be liable in the 
same manner as if it had itself incurred such 
liabilities 
and 
obligations. 
 
The 
possessor 
corporation may relinquish its corporate name and 
assume in place thereof the name of the merged 
corporation by including a provision to that effect in 
the resolution of merger adopted by the board of 
directors and set forth in the certificates of 
ownership and upon the filing of such certificate the 
change of name shall be complete.   
No.  01-0090    
 
   
 
5 
 
asset purchase.4  Two days later, the legal counsel for People's 
Gas wrote a letter to the PSC stating that People's Gas accepted 
the proposed change in form from a stock purchase and merger to 
an asset purchase.5  On January 5, 1960, Wisconsin Gas and 
                                                 
4 The letter from Wisconsin Gas to the PSC stated in part:  
 
At the time we filed our application in this 
docket and at the time the hearing was held it was 
contemplated 
that 
Milwaukee 
Gas 
Light 
Company 
[Wisconsin Gas] would acquire the assets of People's 
Gas Company through purchase of the stock of that 
Company 
and 
the 
immediate 
merger 
thereof 
into 
Milwaukee Gas Light Company [Wisconsin Gas].  It now 
appears that it will be advisable to revise the 
proposed form of the acquisition so as to eliminate 
the step involving purchase of stock and to provide 
for acquisition of such assets directly by Milwaukee 
Gas Light Company [Wisconsin Gas] from either People's 
Gas Company or from the stockholders of People's Gas 
Company after liquidation of such Company.  Except for 
such change in form, it is contemplated that the price 
and other terms and the ultimate effect of the 
transaction 
would 
be 
the 
same 
as 
originally 
contemplated and as presented to the Commission.   
 
In view of this change in the form of the 
transaction, we hereby respectfully request that the 
Commission give its approval and consent to the 
consummation of such acquisition of assets by purchase 
thereof either directly from People's Gas Company or 
from its stockholders. 
5 The letter from People's Gas to the PSC stated in part: 
At the time the application was filed in the above-
entitled matter with your Commission and also at the 
time of the hearing of such application, it was 
contemplated 
that 
Milwaukee 
Gas 
Light 
Company 
[Wisconsin Gas] would acquire the assets of Peoples 
Gas Company by purchasing the common stock of Peoples 
Gas Company.  
Representatives 
of 
Milwaukee 
Gas 
Light 
Company 
[Wisconsin Gas] have now concluded that it would be 
No.  01-0090    
 
   
 
6 
 
People's 
Gas 
signed 
an 
asset 
purchase 
agreement 
(1960 
Agreement), whereby Wisconsin Gas would purchase the assets of 
People's Gas.  The 1960 Agreement between Wisconsin Gas and 
People's Gas provided in relevant part:  
[T]he parties now desire to cancel the aforesaid 
agreement dated November 12, 1959, and to supersede 
the same with this Agreement in order to revise the 
form of such transaction so as to provide that 
Milwaukee [Wisconsin Gas] shall acquire all of the 
assets, franchises and 
business 
of People's Gas 
through purchase thereof directly from People's Gas in 
consideration for cash and the assumption by Milwaukee 
[Wisconsin Gas] of the liabilities and obligations of 
People's Gas, subject to the provisions of this 
Agreement; 
 
NOW, THEREFORE, in consideration of the mutual 
promises of the parties herein set forth, the parties 
do hereby agree with each other as follows: 
 
1. (a)  People's Gas hereby agrees to sell to 
Milwaukee [Wisconsin Gas], at the date of closing 
hereunder, subject to the terms and conditions of this 
Agreement, all of the assets, franchises and business 
as a going concern which immediately prior to closing 
shall have been owned and operated by People's Gas 
(the "Assets"). . . . Such sale, conveyance, transfer 
and delivery shall be made free and clear of any 
                                                                                                                                                             
advisable to revise the proposed form of acquisition 
of the Peoples Gas Company assets by arranging for the 
purchase of the assets themselves and the assumption 
of the payment of all liabilities rather than the 
acquisition of these assets through the purchase of 
all of the capital stock of Peoples Gas Company.  On 
behalf of all of the stockholders of Peoples Gas 
Company . . . I wish to take this means of advising 
you that the change in the manner of acquisition of 
the assets of Peoples Gas Company as proposed by 
Milwaukee 
Gas 
Light 
Company 
[Wisconsin 
Gas] 
is 
acceptable to Peoples Gas Company and its stockholders 
and they request that an Order be issued by your 
Commission authoring this purchase and sale. 
No.  01-0090    
 
   
 
7 
 
liability, obligation, imperfection of title, lien or 
encumbrance except only those referred to in paragraph 
4(d) hereof and those liabilities and obligations 
which are to be assumed by Milwaukee [Wisconsin Gas] 
at the closing as hereinafter provided, and People's 
Gas agrees to indemnify and save Milwaukee [Wisconsin 
Gas] harmless with respect to any liability of 
People's Gas which is not assumed by Milwaukee 
hereunder.  
   (b) Milwaukee [Wisconsin Gas] hereby agrees, 
subject to the terms and conditions of this Agreement 
and in reliance on the representations and warranties 
herein contained of People's Gas, to purchase the 
Assets from People's Gas at the date of closing as 
aforesaid and to assume all of the then outstanding 
debts, 
obligations, 
contracts 
and 
liabilities 
of 
People's Gas, provided, that Milwaukee [Wisconsin Gas] 
shall have no liability with respect to the following:  
(ii) 
any 
obligations 
or 
liabilities incurred by 
People's Gas after the closing . . .  
 . . . .   
4.  As an inducement to Milwaukee [Wisconsin Gas] 
to purchase the Assets, People's Gas makes the 
following 
representations 
and 
warranties, 
and 
covenants that they shall be true at the time of 
closing: 
 . . . .    
(c)  The balance sheet as of September 30, 1959, 
Exhibit A hereto, has been prepared in accordance with 
generally accepted accounting practices; it correctly 
reflects the Assets, liabilities and financial status 
of People's Gas as of said date; People's Gas has no 
liabilities of any nature, whether accrued, absolute, 
contingent 
or 
otherwise, 
and 
whether 
for 
taxes, 
contract or tort claims or otherwise, for which 
adequate provision has not been made in Exhibit A or 
by insurance . . .  There are no actions, suits or 
proceedings pending or threatened against or affecting 
People's Gas which are not fully covered by insurance 
of 
which 
would 
materially 
adversely 
affect 
the 
financial position or Assets or operations of People's 
Gas.  
No.  01-0090    
 
   
 
8 
 
(Emphasis added.)  Two days later, on January 7, 1960, the PSC 
issued its Findings of Fact, Opinion, and Order, which approved 
the asset purchase agreement between Wisconsin Gas and People's 
Gas and the transaction closed on February 1, 1960.          
 
¶6 
In 1962, Columbia Propane6 purchased the southern 
parcel from Wisconsin Gas.  Four years prior, in 1958, Columbia 
Propane had purchased the northern parcel from People's Bottled 
Gas Company.7  Consequently, Columbia Propane has been the owner 
of the entire parcel of real estate since 1962.  Subsequently, 
the State of Wisconsin brought an action against Columbia 
Propane for environmental contamination that had been caused by 
People's Gas, which had been discovered on the southern parcel 
and allegedly migrated to the northern parcel and possibly off 
the site.   
 
¶7 
Columbia 
Propane 
commenced 
this 
action 
against 
Wisconsin Gas in August 1999, alleging that based on the 1960 
Agreement, Wisconsin Gas had assumed the liabilities and 
obligations of People's Gas for the environmental contamination.  
Wisconsin Gas moved for summary judgment, arguing that it had 
assumed only certain liabilities that were "then outstanding," 
which did not include unknown liabilities.  Columbia Propane 
moved for partial summary judgment, asserting that Wisconsin 
                                                 
6 At this time, Columbia Propane was known as "National 
Propane, L.P.;" however we will refer to the company as 
"Columbia Propane." 
7 People's 
Bottled 
Gas 
is 
a 
now 
defunct 
Wisconsin 
corporation that was related by common ownership to People's 
Gas. 
No.  01-0090    
 
   
 
9 
 
Gas's motion for summary judgment should be denied and that 
Columbia Propane should be awarded partial summary on the 
successor liability issue.  Columbia Propane argued that the 
language in the 1960 Agreement clearly demonstrated that 
Wisconsin Gas intended to assume the obligations and liabilities 
at issue in this case, especially when read in light of 
Wisconsin Gas's representations to the PSC.  Alternatively, 
Columbia Propane argued that even if Wisconsin Gas did not 
assume all the liabilities and obligations of People's Gas, then 
it fraudulently entered into the transaction to escape these 
liabilities.   
 
¶8 
The circuit court granted Wisconsin Gas's motion for 
summary judgment, finding that Wisconsin Gas did not assume 
liability for the unknown environmental contamination when it 
entered into the 1960 Agreement.  With respect to Columbia 
Propane's allegation of fraud, the circuit court noted that 
Columbia Propane did not allege fraud in its complaint, but 
rather only brought it up in its brief for partial summary 
judgment.  Since fraud had not been pled, the circuit court did 
not consider the claim.  However, it did note that it would be 
"difficult to envision how Wisconsin Gas entered into the 
January, 1960 contract to fraudulently escape a liability which 
all parties agree was unknown to either of the parties to the 
contract in 1960."  After Wisconsin Gas had prevailed on its 
motion for summary judgment, Columbia Propane moved to amend its 
complaint to include constructive fraud.  The circuit court 
No.  01-0090    
 
   
 
10 
 
denied Columbia Propane's 
motion, 
reasoning 
that Columbia 
Propane could have brought the motion to amend its complaint 
earlier, but instead waited to see whether or not it would be 
successful in its motion for partial summary judgment.  The 
circuit court concluded that it would be unfair to Wisconsin Gas 
to allow Columbia Propane to essentially resurrect the action on 
another theory after summary judgment had already been granted 
in favor of Wisconsin Gas.        
 
¶9 
The 
court 
of 
appeals 
reversed, 
with 
one 
judge 
dissenting.  The court of appeals concluded that the language in 
the 1960 Agreement is ambiguous regarding whether Wisconsin Gas 
agreed to assume liability for unknown tort claims and that 
resolution of the ambiguity presents issues of fact, making 
summary judgment inappropriate.  The court of appeals also 
remanded for reconsideration of whether Columbia Propane should 
be allowed to amend its complaint to add allegations of fraud 
since the circuit court had based its decision to deny Columbia 
Propane's motion on an erroneous view of Wisconsin Gas's 
entitlement to summary judgment.  Judge Roggensack dissented, 
concluding that the 1960 Agreement was not ambiguous and that 
Wisconsin 
Gas 
did 
not 
assume 
liability 
for 
the 
unknown 
environmental contamination caused by People's Gas.   
 
¶10 Wisconsin Gas petitioned this court for review, which 
was accepted on March 22, 2002.     
II.  STANDARDS OF REVIEW 
No.  01-0090    
 
   
 
11 
 
¶11 A grant of summary judgment is reviewed using the same 
methodology as the circuit court.  Ahrens v. Town of Fulton, 
2002 WI 29, ¶15, 251 Wis. 2d 135, 641 N.W.2d 423.  Summary 
judgment shall be granted "if the pleadings, depositions, 
answers to interrogatories, and admissions on file, together 
with the affidavits . . . show that there is no genuine issue to 
any material fact and that the moving party is entitled to 
judgment as a matter of law."  Wis. Stat. § 802.08(2) (2001-02).8   
¶12 The interpretation of a written contract is a question 
of law that this court reviews independently on appeal.  Jones 
v. Jenkins, 88 Wis. 2d 712, 722, 277 N.W.2d 815 (1979).  The 
construction of a contract is "essentially one of determining 
the intent of the parties."  In re Marriage of Levy v. Levy, 130 
Wis. 2d 523, 533-34, 388 N.W.2d 170 (1986).  A term or provision 
in a contract is not ambiguous merely because it is general 
enough to encompass more than one interpretation; rather, we 
seek to ascertain its meaning by looking at the intent of the 
contracting parties.  Mattheis v. Heritage Mut. Ins. Co., 169 
Wis. 2d 716, 
722, 
487 
N.W.2d 52 
(Ct. 
App. 
1992). 
 
In 
constructing a contract, "courts cannot insert what has been 
omitted or rewrite a contract made by the parties."  Levy, 130 
Wis. 2d at 533 (citing Batavian Nat'l Bank of LaCrosse v. S&H, 
Inc., 3 Wis. 2d 565, 569, 89 N.W.2d 309 (1958)).  Thus, 
contracts must be construed as they are written.  Amcast Indus. 
                                                 
8 All references to the Wisconsin Statutes are to the 2001-
02 version unless otherwise noted. 
No.  01-0090    
 
   
 
12 
 
Corp. v. Affiliated FM Ins. Co., 221 Wis. 2d 145, 164, 584 
N.W.2d 218 (Ct. App. 1998).  In addition, a contract is to be 
interpreted in the manner that it would be understood by persons 
in the business to which the contract relates.  Matter of 
Liquidation 
of 
All-Star 
Ins., 
112 
Wis. 2d 329, 
333, 
332 
N.W.2d 828 (Ct. App. 1983); see also 17A Am Jur 2d Contracts 
§ 405 (1991) (a business contract must be construed in light of 
what a business person would reasonably expect to give or 
receive under its terms).   
¶13 A circuit court's decision on whether to permit an 
amendment to a complaint later than six months after it has been 
filed is within the discretion of the circuit court.  Employees 
Local 1901 v. Brown County, 146 Wis. 2d 728, 737, 432 N.W.2d 571 
(1988).  A circuit court properly exercises its discretion when 
it considers the relevant facts, applies the correct law, and 
articulates a reasonable basis for its decision.  In re Marriage 
of Krebs v. Krebs, 148 Wis. 2d 51, 55, 435 N.W.2d 240 (1989).  
Therefore, this court will affirm a discretionary decision by a 
circuit court as long as the court did not erroneously exercise 
its discretion.  State v. Davis, 2001 WI 136, ¶28, 248 
Wis. 2d 986, 637 N.W.2d 62.  
¶14 Applying these standards of review, we examine the 
primary 
issue 
of 
whether 
Wisconsin 
Gas 
assumed 
all 
the 
liabilities of People's Gas, including unknown and potentially 
unlimited tort liabilities, in the asset purchase agreement it 
entered into with People's Gas.  We also review the issue of 
No.  01-0090    
 
   
 
13 
 
whether the circuit court properly exercised its discretion in 
denying Columbia Propane's motion to amend its complaint to add 
constructive fraud.         
III.  ANALYSIS 
¶15 The general rule of successor liability in the context 
of asset purchase agreements is that a "corporation which 
purchases the assets of another corporation does not succeed to 
the liabilities of the selling corporation," subject to certain 
exceptions.  Leannais v. Cincinnati, Inc., 565 F.2d 437, 439 
(7th Cir. 1977) (citations omitted).   
¶16 The court in Leannais noted that non-liability is the 
"general rule in the majority of American jurisdictions . . . ."  
Id.  See, e.g., Moriarty v. SVEC, 164 F.3d 323 (7th Cir. 1998); 
Ed Peters Jewelry Co. v. C & J Jewelry Co., 124 F.3d 252 (1st 
Cir. 1997); Kaiser Found. Health Plan v. Clary & Moore, 123 F.3d 
201 (4th Cir. 1997); Are Sikeston Ltd. P'ship v. Weslock Nat'l, 
Inc., 120 F.3d 820 (8th Cir. 1997); Oppenheimer v. Prudential 
Sec. Inc., 94 F.3d 189 (5th Cir. 1996); Seetransport Wiking 
Trader v. Navimpex Centrala Navala, 989 F.2d 572 (2d Cir. 1993); 
Raytech Corp. v. White, 54 F.3d 187 (3rd Cir. 1995); Kline v. 
Johns-Manville, 745 F.2d 1217 (9th Cir. 1984); R.J. Enstrom 
Corp. v. Interceptor Corp., 555 F.2d 277 (10th Cir. 1977); 
Horphag Research Ltd. V. Consac Indus., Inc., 116 F.3d 1450 
(Fed. Cir. 1997).       
¶17 Wisconsin explicitly recognized this rule almost 20 
years ago in Fish v. Amsted Indus., Inc., 126 Wis. 2d 293, 298, 
No.  01-0090    
 
   
 
14 
 
376 N.W.2d 820 (1985).  Even one of the dissenters in Fish 
acknowledged 
that 
"[u]nder 
traditional 
corporate 
law 
a 
corporation purchasing the assets of another corporation is not 
liable for the debts and liabilities of the seller corporation."  
Id. at 314 (Abrahamson, J., dissenting). 
¶18 There are four exceptions to this general rule: 
"(1) when the purchasing corporation expressly or 
impliedly agreed to assume the selling corporation's 
liability; (2) when the transaction amounts to a 
consolidation or merger of the purchaser and seller 
corporations; (3) when the purchaser corporation is 
merely a continuation of the seller corporation; or 
(4) when the transaction is entered into fraudulently 
to escape liability for such obligations." 
Id. at 298 (quoting Leannais, 565 F.2d at 439).   
¶19 Only the first exception is at issue in this case —— 
namely, whether Wisconsin Gas expressly or impliedly agreed to 
assume liabilities of People's Gas that were unknown to the 
parties at the time they entered into the contract.  In order to 
determine whether Wisconsin Gas assumed unknown tort liabilities 
of People's Gas, we review the relevant contract language in the 
1960 Agreement.  The 1960 Agreement provided, in part: 
Milwaukee [Wisconsin Gas] hereby agrees, subject to 
the terms and conditions of this Agreement and in 
reliance on the representations and warranties herein 
contained of People's Gas, to purchase the Assets from 
People's Gas at the date of closing as aforesaid and 
to 
assume 
all 
of 
the 
then 
outstanding 
debts, 
obligations, contracts and liabilities of People's 
Gas, provided, that Milwaukee [Wisconsin Gas] shall 
have no liability with respect to the following:  (ii) 
any obligations or liabilities incurred by People's 
Gas after the closing . . . .            
No.  01-0090    
 
   
 
15 
 
(Emphasis added.)  Columbia Propane and Wisconsin Gas disagree 
as to the liabilities covered by the phrase "then outstanding."  
Columbia Propane argues that the language indicates that 
Wisconsin Gas assumed all pre-closing liabilities, including 
those that were unknown to the parties at the time they entered 
into the contract.  In contrast, Wisconsin Gas claims that the 
language clearly illustrates that the parties' intention was 
that Wisconsin Gas assume only those liabilities that were then 
known to the parties prior to closing.  We agree with Wisconsin 
Gas that based on the language in the 1960 Agreement, Wisconsin 
Gas did not assume unknown and potentially unlimited tort 
liabilities.   
 
¶20 The first exception under Fish requires an express or 
implied assumption of liabilities, not an express exclusion of 
liabilities.  Fish, 126 Wis. 2d at 298.  In this case, Wisconsin 
Gas only assumed certain liabilities, including those that were 
"then outstanding" prior to closing.  Consistent with the 
general rule that a purchasing corporation is not liable for the 
obligations 
and 
liabilities 
of 
the 
selling 
corporation, 
Wisconsin Gas agreed to purchase the assets of People's Gas 
"free and clear of any liability, obligation, imperfection of 
title, lien or encumbrance except only those referred to in 
paragraph 4(d) . . . and those liabilities and obligations which 
are to be assumed by Milwaukee [Wisconsin Gas] at the closing."   
¶21 Throughout the 1960 Agreement, it is clear that 
Wisconsin Gas assumed only certain liabilities, including those 
No.  01-0090    
 
   
 
16 
 
that were "then outstanding."  We agree with Wisconsin Gas that 
the phrase "then outstanding" includes only liabilities that 
were known to the parties at the time they entered into the 1960 
Agreement.  First, the phrase itself, "then outstanding," 
indicates that the liabilities referred to were known at the 
time the parties contracted.  Indeed, it would be an odd 
construction 
to 
refer 
to 
unknown 
liabilities 
as 
"then 
outstanding;" rather, unknown liabilities are more commonly 
referred to as "contingent" or "unknown," as opposed to "then 
outstanding."  Relatedly, the 1960 Agreement provided that the 
balance sheet on Exhibit A of the Agreement accurately reflected 
the assets, liabilities, and financial status of People's Gas 
and that People's Gas had "no liabilities of any nature, whether 
accrued, absolute, contingent or otherwise, and whether for 
taxes, contract or tort claims or otherwise, for which adequate 
provision 
[had] 
not 
been 
made 
in 
Exhibit 
A 
or 
by 
insurance . . . ."  This reaffirms that Wisconsin Gas did not 
intend to assume any unknown liabilities of People's Gas.  
Finally, it would be unreasonable to conclude that Wisconsin Gas 
would 
agree 
to 
assume 
unknown 
and 
potentially 
unlimited 
liabilities of People's Gas in light of the limiting language in 
the Agreement; the representations by People's Gas regarding the 
accuracy of its assets and liabilities; and a contract provision 
that required an updated valuation of the net book value of the 
assets (i.e. excess of assets over liabilities) as of the 
No.  01-0090    
 
   
 
17 
 
closing date in order to precisely calculate the exact purchase 
price.   
¶22 In addition, it is important that we not blur, but 
rather 
maintain, 
the 
well-established 
and 
fundamental 
distinction between an asset purchase and a stock purchase.  As 
described by one commentator, "asset purchases feature the 
advantage of specifying the assets to be acquired and the 
liabilities to be assumed."9  It is understood that:  
An 
important 
reason 
for 
structuring 
an 
acquisition as an asset transaction is the desire on 
the part of a buyer to limit its responsibility for 
liabilities, 
particularly 
unknown 
or 
contingent 
liabilities.   
Unlike a stock purchase or statutory combination, 
where the acquired corporation retains all of its 
liabilities and obligations, known and unknown, the 
buyer in an asset purchase has an opportunity to 
determine which liabilities of the seller it will 
contractually assume.10         
¶23 Courts 
have 
also 
recognized 
this 
distinction, 
observing that the "rule of non-liability for asset acquisitions 
is frequently the reason why parties choose that option in 
acquiring 
a business, 
as 
opposed 
to 
a merger 
or 
stock 
acquisition, 
in 
which 
the 
predecessor's 
obligations 
and 
liabilities continue in the surviving entity."  Lockheed Martin 
Corp. v. Gordon, 16 S.W.3d 127, 134 (Tex. Ct. App. 2000).  In 
other words, the general rule of non-liability in an asset 
                                                 
9 Byron F. Egan et al., Asset Acquisitions: A Colloquy, 10 
U. Miami Bus. L. Rev. 145, 149 (2002).   
10 Id. at 152. 
No.  01-0090    
 
   
 
18 
 
purchase is "based upon the premise that when one corporation 
sells its assets, it transfers an interest distinct from that of 
the corporate entity itself.  The rule protect[s] a bona fide 
purchaser from liabilities caused by a predecessor corporation 
of which the bona fide purchaser was unaware at the time of 
acquisition."11   
 
¶24 The importance of how a transaction is structured is 
illustrated 
by 
discussions 
of 
acquisition 
agreements 
in 
publications by law firms and legal service providers.  For 
example, stock versus asset acquisitions have been discussed in 
the following manner:   
A buyer may either purchase the assets of a seller or 
the stock of the seller's corporation to effectuate an 
acquisition.  An asset purchase provides greater 
security 
to 
the 
buyer 
that 
no 
undisclosed 
or 
contingent liabilities will be transferred.  In a 
stock sale, all undisclosed or contingent liabilities 
remain with the corporation.12          
                                                 
11 Eva M. Fromm, Allocating Environmental Liabilities in 
Acquisitions, 22 J. Corp. L. 429, 441 (1997) (footnote omitted). 
12 Howard S. Goldman, Esq., Business Acquisitions, Goldman & 
Pease, 
at 
http://www.goldmanpease.com/howard/business_acquisitions.htm 
(Feb. 6, 2003). 
Similarly, other publications have stated: 
The decision to purchase stock versus assets is 
usually driven by tax and liability considerations.  
The stock purchase agreement is more useful than the 
asset purchase agreement when you are purchasing a 
portion of the business for investment purposes as 
opposed to buying the entire business.  The asset 
purchase agreement is best when there may be hidden or 
visible liabilities that you want to avoid.  You can 
leave those with the original corporation. 
No.  01-0090    
 
   
 
19 
 
 
¶25 Nevertheless, Columbia Propane claims that the 1960 
Agreement is ambiguous regarding whether Wisconsin Gas assumed 
all liabilities of People's Gas, including unknown liabilities.  
We first note that contract language is ambiguous only if it is 
reasonably susceptible to more than one meaning.  Wausau 
Underwriters Ins. v. Dane County, 142 Wis. 2d 315, 322, 417 
N.W.2d 917 (Ct. App. 1987).  In this case, the language in the 
1960 Agreement is not reasonably susceptible to more than one 
meaning in light of the limiting language in the contract, the 
general rule of non-liability for a purchasing corporation in an 
asset 
purchase, 
and 
the 
manner 
in 
which 
asset 
purchase 
agreements are typically understood and used in the business 
community.  However, even if the contract is considered 
                                                                                                                                                             
Acquisition 
Agreements, 
Partnering 
Agreements, 
at 
http://partneringagreements.com/acquisitionagreementslist.htm 
(Feb. 6, 2003). 
Sellers will generally prefer a Stock Purchase because 
it allows them to completely step away from the 
business. . . .  In addition, a seller is usually 
entitled to pay taxes at the lower capital gains rate 
in a Stock Purchase. . . .   
Conversely, 
a 
buyer 
generally 
prefers 
an 
Asset 
Purchase.  The buyer knows exactly which assets are 
being 
acquired 
and 
which 
liabilities 
are 
being 
assumed.  This is particularly important to a buyer if 
the business has a significant number of actual or 
potential liabilities, and it is difficult to quantify 
the amount of those liabilities.   
Basic Deal Structures - Stock Purchase vs. Asset Purchase, USBX, 
at 
http://www.usbx.com/articles/edu_basicdealstructures.asp?type=pr
int (Feb. 6, 2003).    
No.  01-0090    
 
   
 
20 
 
ambiguous regarding the liabilities assumed by Wisconsin Gas, we 
will adopt a construction that is reasonable, fair, and just, as 
opposed to one that is unusual or extraordinary.  Carey v. 
Rathman, 55 Wis. 2d 732, 738, 200 N.W.2d 591 (1972).  In 
ascertaining the meaning of a contract that is ambiguous, "the 
more reasonable meaning should be given [effect] on the 
probability that persons situated as the parties were would be 
expected to contract in that way as opposed to a way which works 
an unreasonable result."  Id.  Therefore, even if the contract 
might be considered ambiguous regarding the liabilities assumed 
by 
Wisconsin 
Gas, 
the 
more 
reasonable, 
fair 
and 
just 
construction, 
which 
conforms 
with 
established 
business 
practices, is that Wisconsin Gas only assumed certain known 
liabilities in the 1960 Agreement.         
¶26 Thus, we hold that Wisconsin Gas did not expressly or 
impliedly assume unknown tort liabilities of People's Gas based 
on the following: (1) the 1960 Agreement was an asset purchase 
agreement, 
where 
the 
general 
rule 
is 
that 
a 
purchasing 
corporation does not succeed the liabilities of the selling 
corporation; (2) nowhere in the language of the 1960 Agreement 
does Wisconsin Gas explicitly assume any unknown liabilities of 
People's Gas——rather, the language indicates to the contrary; 
and (3) the only rational business interpretation of the 
contract 
is 
that 
Wisconsin 
Gas 
assumed 
certain 
known 
liabilities.  Accordingly, we conclude that the only reasonable 
interpretation of the 1960 Agreement is that Wisconsin Gas did 
No.  01-0090    
 
   
 
21 
 
not assume any unknown liabilities; therefore, we affirm the 
circuit court's grant of summary judgment in favor of Wisconsin 
Gas. 
 
¶27 Finally, 
we 
briefly 
address 
Columbia 
Propane's 
argument that the change from a stock purchase to an asset 
purchase was merely a change in form, which had the same effect.  
Columbia Propane relies on the letter sent by Wisconsin Gas to 
the PSC informing it of the change, which stated: "Except for 
such change in form, it is contemplated that the price and other 
terms and the ultimate effect of the transaction would be the 
same as originally contemplated . . . ."  Columbia Propane 
claims that since the change was merely one of form, the 
transaction was supposed to have the same effect; namely, that 
Wisconsin Gas assumed all the liabilities of People's Gas.  We 
cannot agree.   
 
¶28 First, the original stock purchase agreement, which 
was cancelled and superseded by the asset purchase agreement did 
not 
contain 
the 
same 
language 
regarding 
Wisconsin 
Gas's 
assumption of liabilities.  The stock purchase agreement merely 
stated that Wisconsin Gas "agrees to buy from the Stockholders 
at the time of closing . . . all of the outstanding capital 
stock (the 'Stock') of People's Gas Company."  On the other 
hand, the asset purchase agreement provided that "Such sale, 
conveyance, transfer and delivery [of assets] shall be made free 
and clear of any liability, obligation, imperfection of title, 
lien or encumbrance except only those referred to in paragraph 
No.  01-0090    
 
   
 
22 
 
4(d) hereof and those liabilities and obligations which are to 
be assumed by Milwaukee [Wisconsin Gas] at the closing . . . ."  
Thus, despite Columbia Propane's assertion, the two agreements 
were not exactly the same, but rather illustrated the difference 
between a stock purchase and an asset purchase.  Both parties 
agreed to change the transaction from a stock purchase to an 
asset purchase and informed the PSC of the change, which was 
then approved by the PSC.  The only comment by the PSC in its 
Findings of Fact, Opinion, and Order regarding the supposed 
"same effect," despite the change in form, was that "the 
aggregate acquisition cost of the assets of People's Gas will 
not be changed thereby."  Thus, it seems that the "effect" the 
PSC was concerned about dealt with the general acquisition of 
People's Gas by Wisconsin Gas for a similar purchase price, not 
whether Wisconsin Gas would assume all the liabilities of 
People's Gas.     
¶29 Second, as previously discussed, the difference in a 
buyer's assumption of liabilities when entering into a stock 
purchase agreement versus an asset purchase agreement is well-
known in the business community.  This distinction was clearly 
illustrated by the different language used in the original stock 
purchase agreement as compared to the asset purchase agreement.  
We are unable to determine from the record why Wisconsin Gas 
proposed to change the transaction from a stock purchase to an 
asset purchase——perhaps it might have realized that an asset 
purchase was a more appropriate method to accomplish its 
No.  01-0090    
 
   
 
23 
 
intention 
of 
acquiring 
the 
assets 
of 
People's 
Gas.  
Nevertheless, the relevant point is that the transaction was 
changed from a stock purchase to an asset purchase, which 
specifically provided that Wisconsin Gas would only assume 
certain liabilities of People's Gas.         
¶30 Accordingly, based on the language in the asset 
purchase agreement, in which Wisconsin Gas assumed only certain 
liabilities, thereby differing from the language in the original 
stock purchase, as well as the established differences between a 
stock purchase and an asset purchase with respect to a buyer's 
assumption of liabilities, we conclude that the change in the 
form of the transaction was not just a superficial and 
inconsequential alteration.  
¶31 In sum, we conclude that Wisconsin Gas did not 
expressly or impliedly assume any unknown tort liabilities of 
People's Gas in the 1960 Agreement.  Therefore, we uphold the 
circuit court's grant of summary judgment in favor of Wisconsin 
Gas.   
¶32 Further, we uphold the circuit court's decision to 
deny Columbia Propane's motion to amend its complaint to add 
constructive fraud.  The circuit court denied the amendment 
since it had already granted summary judgment in favor of 
Wisconsin Gas and deemed it would be unfair to allow Columbia 
Propane to effectively resurrect the action on a different 
theory.  It is within a circuit court's discretion to decide 
whether to permit an amendment to a complaint later than six 
No.  01-0090    
 
   
 
24 
 
months after it has been filed.  Employees Local 1901, 146 
Wis. 2d at 737.  Based on our review of the facts and the record 
in this case, we conclude that the circuit court did not 
erroneously 
exercise 
its 
discretion 
in 
denying 
Columbia 
Propane's late amendment.      
By the Court.—The decision of the court of appeals is 
reversed. 
¶33 JON P. WILCOX, J., did not participate.                      
 
 
 
 
 
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