Title: Maya Elaine Smith v. Jeff Anderson
Citation: N/A
Docket Number: 2015AP000079
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: April 27, 2017

2017 WI 43 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2015AP79 
COMPLETE TITLE: 
Maya Elaine Smith, 
          Plaintiff, 
     v. 
Jeff Anderson, d/b/a Anderson Real Estate 
Services, 
          Defendant-Third-Party Plaintiff, 
     v. 
4th Dimension Design, Inc., 
          Third-Party Defendant, 
R & B Construction, Inc., 
          Third-Party  
          Defendant-Appellant-Petitioner, 
West Bend Mutual Insurance Company, 
          Intervenor-Respondent. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
Reported at 366 Wis. 2d 808, 874 N.W.2d 347 
(WI Ct. App. 2016 – Unpublished) 
 
 
OPINION FILED: 
April 27, 2017 
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
October 18, 2016 
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit 
 
COUNTY: 
Milwaukee 
 
JUDGE: 
Pedro Colon 
 
 
 
JUSTICES: 
 
 
CONCURRED: 
ROGGENSACK, C. J. concurs (opinion filed). 
 
DISSENTED: 
ABRAHAMSON, J. dissents, joined by BRADLEY A. 
W., J. (opinion filed). 
 
NOT PARTICIPATING: ZIEGLER, J. and BRADLEY, R. G., J. did not 
participate.    
 
 
 
ATTORNEYS: 
 
For the third-party defendant-appellant-petitioner, there 
were briefs by John E. Machulak and Machulak, Robertson & Sodos, 
S.C., Milwaukee, and oral argument by John E. Machulak. 
 
For the intervenor-respondent, there was a brief by Jeffrey 
L. Leavell, Danielle N. Rousset and Jeffrey Leavell, S.C., 
Racine, 
and 
oral 
argument 
by 
Jeffrey 
L. 
Leavell.
 
 
2017 WI 43
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.   2015AP79 
(L.C. No. 
2013CV7085) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Maya Elaine Smith, 
 
          Plaintiff, 
 
     v. 
 
Jeff Anderson, d/b/a Anderson Real Estate 
Services, 
 
          Defendant-Third-Party Plaintiff, 
 
     v. 
 
4th Dimension Design, Inc., 
 
          Third-Party Defendant, 
 
R & B Construction, Inc., 
 
          Third-Party Defendant-Appellant- 
          Petitioner, 
 
West Bend Mutual Insurance Company, 
 
          Intervenor-Respondent. 
 
FILED 
 
APR 27, 2017 
 
Diane M. Fremgen 
Clerk of Supreme Court 
 
 
 
 
Review of the decision of the Court of Appeals is dismissed 
as improvidently granted.  
¶1 
PER 
CURIAM.   On 
April 
6, 
2016 
we 
granted 
R&B 
Construction, Inc.'s petition for review of an unpublished 
No. 
2015AP79   
 
2 
 
decision of the Court of Appeals.1  Briefing of the parties and 
of the amicus, Wisconsin Defense Counsel, Inc., were timely 
completed, and on October 18, 2016, the court held oral 
argument.   
¶2 
The petition for review asked the court to decide:  
(1) whether a third-party complaint may state a claim for which 
an insurance company has a duty to defend when the third-party 
plaintiff was sued for misrepresentation by the first-party 
plaintiff; (2) whether a third-party defendant may supplement 
the third-party complaint with additional facts when the third-
party defendant seeks a defense from its insurance company; and 
(3) whether summary judgment denying a claim for defense 
conclusively 
concludes 
the 
duty 
to 
defend 
question, 
notwithstanding subsequent developments in the lawsuit.   
¶3 
The circuit court granted summary judgment to West 
Bend Mutual Insurance Company.2  The circuit court concluded that 
there was no initial grant of coverage and also, if there were 
an initial grant of coverage, the policy exclusions prevented 
coverage for the claims for which R&B Construction sought 
defense.  Therefore, West Bend Mutual had no duty to defend.  
The circuit court dismissed West Bend Mutual from the lawsuit 
and R&B appealed.  
                                                 
1 Smith v. Anderson, No. 2015AP79, unpublished slip op. 
(Wis. Ct. App. Dec. 22, 2015). 
2 The Honorable Pedro A. Colon of Milwaukee County presided.   
No. 
2015AP79   
 
3 
 
¶4 
In considering R&B's claim that West Bend Mutual had a 
duty to defend R&B, the Court of Appeals decided no defense was 
due based solely on its conclusion that there was no initial 
grant of coverage for the injury from which a duty to defend 
could arise.3  However, that was not the only argument that West 
Bend Mutual made to the Court of Appeals.  West Bend Mutual also 
asserted that if the Court of Appeals concluded that there was 
an initial grant of coverage, the policy exclusions obviated 
coverage and therefore, there was no duty to defend.  
¶5 
The petition for review and the responses presented to 
us during our review focused on the Court of Appeals decision.  
Therefore, they were limited to whether there was an initial 
grant of coverage under the policy.  No party argued that if 
there was an initial grant of coverage, the policy exclusions 
nevertheless precluded coverage.  Therefore, no party challenged 
the circuit court's conclusion that the policy exclusions 
precluded coverage, a conclusion that the Court of Appeals' 
decision left in place because the Court of Appeals did not 
address policy exclusions.   
¶6 
In 2016, we decided Water Well Sol. Serv. Group, Inc. 
v. Consolidated Ins. Co., 2016 WI 54, 369 Wis. 2d 607, 881 
N.W.2d 285.  One of the questions presented in Water Well was 
whether a four-corners analysis required interpretation of the 
entire policy, i.e., whether there was an initial grant of 
                                                 
3 Smith v. Anderson, No. 2015AP79, unpublished slip op., 
¶¶16-17 (Wis. Ct. App. Dec. 22, 2015).  
No. 
2015AP79   
 
4 
 
coverage and whether any exclusion or exception affected 
coverage.  Id., ¶2.  We concluded that when a claim for defense 
is made, courts must interpret the entire policy – including any 
grant of coverage and all applicable exclusions and exceptions 
to exclusions that bear on coverage.  Id., ¶¶2-3 (citing Marks 
v. Houston Cas. Co., 2016 WI 53, ¶¶61-76, 369 Wis. 2d 547, 881 
N.W.2d 309). 
¶7 
In the case now before us, if we were to stop our 
analysis after determining that there was an initial grant of 
coverage, the parties would not receive a full four-corners 
analysis.  Our decision could be viewed as retreating from the 
clear directive we gave in Water Well where we said, "under the 
four-corners rule the entire policy must be examined, including 
the coverage-granting clauses, exclusions, and exceptions to any 
applicable exclusions."  Id., ¶2.   
¶8 
Our decision also would create confusion because the 
circuit court concluded that the "Your Work" exclusion precluded 
coverage, and that decision was not overturned by the Court of 
Appeals.  Before us, neither party briefed or argued that 
coverage was precluded by a policy exclusion.  Therefore, were 
we to follow the lead of the parties and the Court of Appeals 
and not address exclusions and any applicable exceptions to 
exclusions, a question would remain about whether West Bend 
Mutual had a duty to defend R&B because the circuit court 
concluded that an exclusion precluded coverage under the West 
Bend policy.   
No. 
2015AP79   
 
5 
 
¶9 
Accordingly, because there are coverage questions for 
which no argument or briefing was provided to us and because 
deciding only whether there is a grant of coverage will cause 
confusion and provide no answer to the parties on how they are 
to proceed, we conclude that the petition for review was 
improvidently decided.   
By the Court.—The review of the decision of the court of 
appeals is dismissed as improvidently granted. 
¶10 ANNETTE KINGSLAND ZIEGLER and REBECCA GRASSL BRADLEY, 
JJ., did not participate. 
 
No.  2015AP79.pdr 
 
1 
 
¶11 PATIENCE 
DRAKE 
ROGGENSACK, 
C.J.   (concurring).  
Although I agree that the review herein was improvidently 
granted, I write in concurrence for two reasons:  (1) to point 
out the significant risk parties face in failing to complete a 
full, four-corners analysis before us, as is required by Water 
Well Sol. Serv. Group, Inc. v. Consolidated Ins. Co., 2016 WI 
54, ¶2, 369 Wis. 2d 607, 881 N.W.2d 285, and (2) to avoid public 
confusion, which could result from Justice Abrahamson's dissent.  
¶12 Unlike the full, four-corners analysis, which the 
parties completed in both the circuit court and the court of 
appeals, they presented only a partial analysis here.  They 
addressed only the initial grant of coverage issue.  As is 
apparent from Justice Abrahamson's writing that follows, she 
would conclude that there was an initial grant of coverage.  
West Bend Mutual ignored the risk that we could conclude that 
its policy made an initial grant of coverage when West Bend 
Mutual limited the issues it presented to us and did not address 
the policy exclusions.  Ms. Smith ignored the risk that the 
circuit court's conclusion that the "Your Work" exclusion 
precluded coverage when she chose not to attack that decision as 
part of her review here.  As a cautionary note, a full, four-
corners analysis is required, as we explained in Water Well.  
¶13 Justice Abrahamson states, "We conclude” that no 
policy exclusion excuses West Bend's duty to defend.  However 
this conclusion is unsupported by anything other than one 
sentence found in ¶43 of her writing.  In ¶43, she also states, 
"we reverse the decision of the court of appeals," when the 
No.  2015AP79.pdr 
 
2 
 
majority of the court does not reverse the decision of the court 
of appeals.  Accordingly, I write to avoid the potential for 
public confusion that her writing may create.    
No.  2015AP79.ssa 
 
1 
 
¶14 SHIRLEY S. ABRAHAMSON, J.   (dissenting).  This court 
seriously errs in dismissing this petition for review as 
improvidently granted.  It errs because the parties and the 
public need a decision from this court on the important issues 
the parties presented, briefed, and argued in this court.   
¶15 This dismissal embodies regrettable appellate practice 
given the circumstances of this case and the court's scanty 
workload.   
¶16 This dismissal has unnecessarily caused these parties 
and the amicus curiae expense and delay without giving the 
parties, the amicus, or the public the benefit of a decision on 
important issues.1   
¶17 The parties have been awaiting a final appellate 
decision for more than two years since the circuit court issued 
its judgment.  Obviously, they have incurred substantial 
expenses.  The circuit court entered judgment on November 25, 
2014.  The court of appeals issued its decision on December 22, 
2015.  This court granted R&B Construction's petition for review 
on April 6, 2016.  R&B Construction, Inc., West Bend Mutual 
Insurance Company, and Wisconsin Defense Counsel Inc., as amicus 
curiae, all filed briefs in this court.  This court held oral 
argument on October 18, 2016.    
¶18 The petition for review in the instant case raised the 
following significant issues:  
                                                 
1 Wisconsin Defense Counsel, Inc. filed an amicus curiae 
brief. 
No.  2015AP79.ssa 
 
2 
 
1. 
Can a third-party complaint state a claim that an 
insurance company has a duty to defend, where the 
complaint against the third-party plaintiff is for 
misrepresentation? 
2. 
Should a party looking to his insurance company to 
provide him with a defense be able to introduce 
information not stated in the pleadings to show that 
there could be claims requiring his insurer to 
provide a defense?  
3. 
Can a party denied a defense after his insurance 
company succeeds on a motion for summary judgment 
reassert a right to a defense if later developments 
in the case show that he is entitled to a defense? 
¶19 We granted review of these issues because they are 
law-developing. Resolving the first issue relating to third-
party practice would have given this court the opportunity to 
explain the proper application of the four-corners rule in duty-
to-defend cases involving third-party complaints and answers. 
¶20 The 
case 
also 
presents 
yet 
another 
important 
opportunity to educate litigants and ourselves about preserving 
issues for review in this court.  We have missed a good 
opportunity to once again clarify the rules of appellate 
practice. 
¶21 Furthermore, the court's case load is scanty.  We 
probably will decide fewer than 55 cases from September 2016 
through June 2017 (up from fewer than 45 cases from September 
2015 through June 2016). 
¶22 Here are the circumstances leading to the untoward 
dismissal in the instant case. 
¶23 The court of appeals held in favor of West Bend 
Insurance on coverage, a dispositive issue.  As a result, the 
court of appeals need not, and did not, decide whether certain 
No.  2015AP79.ssa 
 
3 
 
policy exclusions precluded a duty to defend.2  Because West Bend 
Insurance failed to assert in this court that its duty to defend 
was precluded by policy exclusions, an argument that would have 
supported the decision of the court of appeals, West Bend 
Insurance waived (forfeited) its right to have this court decide 
the policy exclusion issue as a matter of right.   
¶24 To preserve the issue of the effect of the policy 
exclusions for review as a matter of right in this court, West 
Bend Insurance was required to present the issue of policy 
exclusions to this court.  It could have accomplished this goal 
in one of two ways. 
¶25 West Bend Insurance could have presented the issue of 
policy exclusions to this court in its response to R&B 
Construction's 
petition 
for 
review. 
 
Wisconsin 
Stat. 
§ (Rule) 809.62(3)(d) provides:  "If filed, the response may 
contain any of the following: . . . (d) Any alternative ground 
supporting the court of appeals result or a result less 
favorable to the opposing party than that granted by the court 
of appeals."3  West Bend did not present the issue of policy 
exclusions in its response to R&B Construction's petition for 
review.4  
                                                 
2 Smith v. Anderson, No. 2015AP79, unpublished slip op., 
¶17, n.2 (Wis. Ct. App. Dec. 22, 2015). 
3 See In Interest of Jamie L., 172 Wis. 2d 218, 232–33, 493 
N.W.2d 56 (1992). 
4 Michael S. Heffernan gives the following practice tip in 
Appellate Practice and Procedure in Wisconsin § 23.13 (7th ed. 
2016), regarding a response to a petition for review:  
(continued) 
No.  2015AP79.ssa 
 
4 
 
¶26 Alternatively, West Bend Insurance could have asserted 
and discussed the issue of policy exclusions in its brief in 
this court.5  West Bend Insurance's brief in this court did not 
present or develop this issue of policy exclusions.   
¶27 Having taken neither alternative course of action, 
West Bend Insurance has not preserved this issue for review as a 
matter of right. 
¶28 In light of West Bend Insurance's failure to preserve 
the issue of policy exclusions as a matter of right, the court 
has three alternative courses of action it might take in the 
instant case:  (1) The court may review the issue; (2) the court 
may decide West Bend Insurance has waived (forfeited) the right 
to a review of the issue; or (3) the court may remand the issue 
to the court of appeals for a review of the decision of the 
circuit court on the issue.6 
                                                                                                                                                             
It is particularly important to file a response if the 
respondent believes that there are alternative grounds 
to support the underlying decision, or if there are 
issues that need to be decided other than those relied 
on by the court of appeals.  See State v. Smith, 2016 
WI 23, ¶41, 367 Wis. 2d 483, 878 N.W.2d 135, petition 
for cert. filed (U.S., Oct. 10, 2016 (No. 16-6409); 
see also Wis. Stat. Ann. § 809.62(3), Judicial Council 
Committee cmt.——2008.  
West Bend Insurance did not have to file a cross-petition.  
It had no adverse decision from which to cross-petition.  See 
Wis. Stat. § (Rule) 809.62(7); In Interest of Jamie L., 172 
Wis. 2d 218, 232–33, 493 N.W.2d 56 (1992); Michael S. Heffernan, 
Appellate Practice and Procedure in Wisconsin § 23.13 (7th ed. 
2016).  West Bend Insurance did not file a cross-petition. 
5 See Jamie L., 172 Wis. 2d at 232–33. 
6 See Jamie L., 172 Wis. 2d at 232–33. 
No.  2015AP79.ssa 
 
5 
 
¶29 Holding West Bend Insurance to have waived (forfeited) 
the application of its policy exclusions is especially apt in 
the instant case.  The court should not decide the issue without 
briefs.7  Nor should the court examine the briefs filed in the 
court of appeals on appeal from the circuit court in lieu of 
requiring briefs here.  The order granting the petition for 
review explicitly states that if a party wishes to rely on any 
materials in its brief to the court of appeals, the material has 
to be restated in the brief filed in this court.  Nor should the 
court order additional briefs here or remand the issue to the 
court of appeals.  West Bend Insurance was fully cognizant of 
the policy exclusion issue and obviously decided not to raise it 
in this court.  There is no compelling reason to give West Bend 
Insurance another kick at the can.8    
¶30 Here's the opinion that I think this court should be 
issuing reversing the decision of the court of appeals:      
* * * * 
REVIEW of a decision of the Court of Appeals.  Reversed and 
remanded.   
                                                 
7 Cf. 
State 
v. 
Howes, 
2017 
WI 
18, 
¶¶103-106, 
373 
Wis. 2d 468, ___ N.W.2d ___ (Abrahamson, J., dissenting).    
8 See State v. Alexander, 2013 WI 70, ¶31 n.10, 349 
Wis. 2d 327, 833 N.W.2d 126, quoting with approval Rivera–Gomez 
v. de Castro, 843 F.2d 631, 635 (1st Cir. 1988) ("Judges are not 
expected to be mindreaders.  Consequently, a litigant has an 
obligation 
to 
spell 
out 
its 
arguments 
squarely 
and 
distinctly . . . , or else forever hold its peace.") (internal 
quotation marks and citation omitted). 
No.  2015AP79.ssa 
 
6 
 
¶31 SHIRLEY S. ABRAHAMSON, J.   This is a review of an 
unpublished decision of the court of appeals.9  The court of 
appeals affirmed the order of the circuit court for Milwaukee 
County, Pedro Colon, Judge, granting summary judgment in favor 
of West Bend Mutual Insurance Company against its insured, R&B 
Construction, Inc.  The circuit court declared that West Bend 
Insurance had no duty to defend its insured, R&B Construction, 
with respect to a third-party complaint Jeff Anderson, d/b/a 
Anderson Real Estate Services, filed against R&B Construction, 
Inc.   
¶32 According to the court of appeals, the third-party 
complaint did not allege "property damage" or an "occurrence" 
under the terms of the insurance policy.  
¶33 For the reasons set forth, we conclude that the 
allegations against R&B Construction in Jeff Anderson's third-
party complaint assert property damage caused by an occurrence, 
as those words are used within the insurance policy issued by 
West Bend Insurance.  Thus, West Bend Insurance has a duty to 
defend R&B Construction in Jeff Anderson's third-party action.   
¶34 West Bend Insurance failed to assert in this court 
that its duty to defend was precluded by exclusions in the 
policy.  Thus, West Bend Insurance failed to preserve this issue 
for review as a matter of right.  It has waived or forfeited 
this issue. 
                                                 
9 Smith v. Anderson, No. 2015AP79, unpublished slip op. 
(Wis. Ct. App. Dec. 22, 2015).   
No.  2015AP79.ssa 
 
7 
 
¶35 The facts giving rise to the waiver or forfeiture 
began when the court of appeals held in favor of West Bend 
Insurance on coverage, a dispositive issue, and did not decide 
whether certain policy exclusions precluded a duty to defend.10  
Because West Bend Insurance failed to assert in this court that 
its duty to defend was precluded by policy exclusions, an 
argument that would have supported the decision of the court of 
appeals, West Bend Insurance waived (forfeited) its right to 
have this court decide the policy exclusion issue as a matter of 
right.  
¶36 To preserve the issue of the effect of the policy 
exclusions for review as a matter of right in this court, West 
Bend Insurance was required to present the issue of policy 
exclusions to this court.  It could have accomplished this in 
one of two ways. 
¶37 West Bend Insurance could have presented the issue of 
policy exclusions to this court in its response to R&B 
Construction's 
petition 
for 
review. 
 
Wisconsin 
Stat. 
§ (Rule) 809.62(3)(d) provides:  "If filed, the response may 
contain any of the following: . . . (d) Any alternative ground 
supporting the court of appeals result or a result less 
favorable to the opposing party than that granted by the court 
of appeals."11  West Bend did not present the issue of policy 
                                                 
10 Smith v. Anderson, No. 2015AP79, unpublished slip op., 
¶17, n.2 (Wis. Ct. App. Dec. 22, 2015). 
11 See Jamie L., 172 Wis. 2d at 232–33. 
No.  2015AP79.ssa 
 
8 
 
exclusions in its response to R&B Construction's Petition for 
Review.12  
¶38 Alternatively, West Bend Insurance could have asserted 
and discussed the issue of policy exclusions in its brief in 
this court.13  West Bend Insurance's brief in this court did not 
present or develop this issue of policy exclusions.   
¶39 Having taken neither alternative course of action, 
West Bend Insurance has not preserved this issue for review as a 
matter of right. 
¶40 In light of West Bend Insurance's failure to preserve 
the issue of policy exclusions as a matter of right, the court 
has three alternative courses of action it might take in the 
instant case: (1) The court may review the issue; (2) the court 
                                                 
12 Michael S. Heffernan gives the following practice tip in 
Appellate Practice and Procedure in Wisconsin § 23.13 (7th ed. 
2016), regarding a response to a petition for review:  
It is particularly important to file a response if the 
respondent believes that there are alternative grounds 
to support the underlying decision, or if there are 
issues that need to be decided other than those relied 
on by the court of appeals.  See State v. Smith, 2016 
WI 23, ¶41, 367 Wis. 2d 483, 878 N.W.2d 135, petition 
for cert. filed (U.S., Oct. 10, 2016 (No. 16-6409); 
see also Wis. Stat. Ann. § 809.62(3), Judicial Council 
Committee cmt.——2008.  
West Bend Insurance did not have to file a cross-petition.  
It had no adverse decision from which to cross-petition.  See 
Wis. Stat. § (Rule) 809.62(7).  See Jamie L., 172 Wis. 2d at 
232–33; Michael S. Heffernan, Appellate Practice and Procedure 
in Wisconsin § 23.13 (7th ed. 2016).  West Bend Insurance did 
not file a cross-petition. 
13 See Jamie L., 172 Wis. 2d at 232–33. 
No.  2015AP79.ssa 
 
9 
 
may decide West Bend Insurance has waived (forfeited) the right 
to a review of the issue; or (3) the court may remand the issue 
to the court of appeals for a review of the decision of the 
circuit court on the issue.14 
¶41 Holding West Bend Insurance to have waived (forfeited) 
the application of its policy exclusions is especially apt in 
the instant case.  The court should not decide the issue without 
briefs.15  Nor should the court examine the briefs filed in the 
court of appeals on appeal from the circuit court in lieu of 
requiring briefs here.  The order granting the petition for 
review explicitly states that if a party wishes to rely on any 
materials in its brief to the court of appeals, the material has 
to be restated in the brief filed in this court.  Nor should the 
court order additional briefs here or remand the issue to the 
court of appeals.  West Bend Insurance was fully cognizant of 
the policy exclusion issue and obviously decided not to raise it 
in this court.  There is no compelling reason to give West Bend 
Insurance another kick at the can.16 
                                                 
14 See Jamie L., 172 Wis. 2d at 232–33. 
15 Cf. 
State 
v. 
Howes, 
2017 
WI 
18, 
¶¶103-106, 
373 
Wis. 2d 468, ___ N.W.2d ___ (Abrahamson, J., dissenting).    
16 See State v. Alexander, 2013 WI 70, ¶31 n.10, 349 
Wis. 2d 327, 833 N.W.2d 126, quoting with approval Rivera–Gomez 
v. de Castro, 843 F.2d 631, 635 (1st Cir. 1988) ("Judges are not 
expected to be mindreaders.  Consequently, a litigant has an 
obligation 
to 
spell 
out 
its 
arguments 
squarely 
and 
distinctly . . . , or else forever hold its peace.") (internal 
quotation marks and citation omitted). 
No.  2015AP79.ssa 
 
10 
 
¶42 Accordingly, we need address only whether West Bend 
has a duty to defend under the coverage provisions of the 
policy, namely the provisions regarding "property damage" and 
"occurrence" because that is the only issue raised and briefed 
by the parties in regard to the duty to defend.    
¶43 We conclude that West Bend Insurance has a duty to 
defend under the coverage provisions of the policy, and that 
West Bend has forfeited or waived any argument it had that a 
policy exclusion excuses its duty to defend.  Accordingly, we 
reverse the decision of the court of appeals and remand the 
cause 
to 
the 
circuit 
court 
for 
further 
proceedings 
not 
inconsistent with this decision.      
¶44 To understand the legal issue regarding the duty to 
defend, we have to set the stage from the beginning.  This 
litigation began shortly after Maya Elaine Smith purchased a 
residence in Milwaukee from the owner, Jeff Anderson, d/b/a 
Anderson Real Estate Services.  After apparently discovering 
defects in the structure, including leaks in the basement, 
Smith, the plaintiff, sued Jeff Anderson, the defendant, 
asserting a claim for breach of contract and numerous claims for 
misrepresentation.  Smith amended her complaint on January 27, 
2014.   
¶45 When we refer herein to the Smith complaint, we are 
referring to the amended Smith complaint.  For purposes of this 
decision it would not matter whether we referred to the original 
Smith complaint or the amended complaint; they are substantially 
No.  2015AP79.ssa 
 
11 
 
the same.17  The amended complaint further develops factual 
allegations.  The facts that are material to our analysis——that 
the basement leaked and the drain tiles were clogged, both of 
which require repair——appear in both complaints.  
¶46 Jeff Anderson, the defendant in Smith's complaint, in 
turn sued (by means of a third-party complaint) 4th Dimension 
                                                 
17 Anderson's third-party complaint was filed before Smith's 
amended complaint was served on Anderson.  Anderson attached the 
original Smith complaint to his third-party complaint.  The 
third-party complaint was not amended to attach the amended 
Smith complaint.  We examine the amended complaint for several 
reasons.     
The parties, the circuit court, and the court of appeals 
discuss the amended complaint.  For example, West Bend Insurance 
stated in its Intervenor Complaint that its "policy does not 
provide 
coverage, 
either 
defense 
or 
indemnity, 
for 
the 
allegations of the amended complaint or the third party 
complaint."     
The amended complaint in the instant case was filed as a 
matter of course.  No permission was needed from the circuit 
court or parties because the amended complaint was filed within 
six months of the filing of the complaint.  Wis. Stat. 
§ 802.09(1).  "[A]n amended complaint supersedes or supplants 
the prior complaint.  When an amended complaint supersedes a 
prior complaint, the amended complaint becomes the only live, 
operative complaint in the case . . . ."  Holman v. Family 
Health Plan, 227 Wis. 2d 478, ¶12, 596 N.W.2d 358 (1999) 
(footnote omitted).  The amended complaint in the instant case 
apparently became effective as to Jeff Anderson on February 3, 
2014, when he was served with the amended complaint.   
"Generally, an amended complaint supersedes a previous 
pleading and will determine a liability insurer's duty to 
defend. . . . Accordingly, most courts require that the latest 
amended pleadings or potential amendments be relied upon by the 
insurer in determining its duty to defend."  14 Steven Plitt et 
al., Couch on Insurance § 200:20 (3d ed. 2005).   
No.  2015AP79.ssa 
 
12 
 
Design, Inc., an engineering firm,18 and R&B Construction, a 
contractor, naming both as third-party defendants.  Jeff 
Anderson, the third-party plaintiff, had contracted with these 
two firms to do work on the residence before the sale to Smith.  
¶47 4th Dimension Design, Inc. inspected the residence, 
assessed the basement walls' structural integrity, and submitted 
a report to Jeff Anderson.  Jeff Anderson then gave the report 
and engineering plans to the contractor, R&B Construction, with 
directions to implement 4th Dimension's recommendations and 
plans.  According to Jeff Anderson's third-party complaint, R&B 
Construction, among other things, repaired the basement's walls, 
replaced drain tiles, installed a sump pump and sump crock, and 
provided warranties against faulty workmanship or materials for 
the basement repair and resolution of drainage issues.  
¶48 Jeff 
Anderson's 
third-party 
complaint 
seeks 
contribution or indemnity from these two third-party defendants, 
should Jeff Anderson be held liable to Smith.19  Contribution and 
indemnification seek to distribute liability among multiple 
actors that cause the same harm. 
¶49 R&B Construction was insured under a Contractors 
Businessowners' Liability Policy with West Bend Insurance.  This 
                                                 
18 4th Dimension Design is not a party in the review before 
us. 
19 Jeff Anderson's third-party complaint alleged that if he 
is found liable to Smith, "he is entitled to be indemnified and 
held harmless from any and all liabilities . . . ," "requests 
that the third party defendants contribute their respective 
share 
of 
liability," 
and 
asserts 
"a 
claim 
for 
contribution . . . against [the] third party defendants." 
No.  2015AP79.ssa 
 
13 
 
is a standard Commercial General Liability Policy ("CGL"), which 
"protects 
the 
insured 
against 
liability 
for 
damages 
the 
insured's negligence causes to third parties."20  
¶50 R&B Construction tendered its defense in Anderson's 
third-party action to West Bend Insurance, its insurance 
company.  West Bend Insurance intervened in the lawsuit.21  It 
moved for summary judgment, asserting that it has no duty to 
defend R&B Construction because the Smith complaint and the Jeff 
Anderson third-party complaint do not allege property damage (as 
defined in the policy) caused by an occurrence (as defined in 
the policy).  The circuit court granted summary judgment in 
favor of West Bend Insurance, concluding that West Bend 
Insurance had no duty to defend R&B Construction.    
¶51 In deciding the instant case, we must examine both 
Smith's complaint and Anderson's third-party complaint, as did 
the parties, the circuit court, and the court of appeals.   
¶52 After the circuit court ruled that West Bend Insurance 
had no duty to defend R&B Construction in Jeff Anderson's third-
party complaint against R&B Construction, R&B Construction moved 
for summary judgment seeking dismissal of Jeff Anderson's third-
party complaint against it.  The circuit court denied this 
motion, seemingly suggesting that R&B Construction's negligent 
                                                 
20 Wis. Label Corp. v. Northbrook Prop. & Cas. Ins. Co., 
2000 WI 26, ¶27, 233 Wis. 2d 314, 607 N.W.2d 276. 
21 On tender of defense from its insured, an insurance 
company can proceed in several different ways.  See Marks v. 
Houston Cas. Co., 2016 WI 53, ¶41, n.21, 369 Wis. 2d 547, 881 
N.W.2d 309.     
No.  2015AP79.ssa 
 
14 
 
work at the residence may have caused the damage Smith claimed 
was caused by Jeff Anderson.     
¶53  The circuit court's explanation for denying R&B 
Construction's motion for summary judgment against Jeff Anderson 
is as follows:  
[T]here's some deviations which are significant in the 
design by 4-D of the basement walls.  Now I'm not 
concluding that that is in fact the standard or that 
in fact their deviation, if there is one, would 
contribute to the condition of this faulty leaky 
basement.  But it is a disputed fact. 
. . . .  
So with the evidence before the court, there's——and 
taking all inferences in favor of the defendant, I 
can't find that there's not a dispute of material 
fact.  I think there is a dispute of material fact and 
the allocation of responsibility within or——negligence 
within which is allocated, I am not sure about at this 
juncture nor do I have to decide. 
. . . . 
I don't know that we have the facts today.  But I 
wonder whether or not R&B shares responsibility, but 
we'll find that out through discovery I suspect. 
¶54 R&B Construction stresses the disparity in the circuit 
court's rulings on the two summary judgment motions.  R&B 
Construction interprets the circuit court as concluding, in R&B 
Construction Company's summary judgment motion against Jeff 
Anderson (the second summary judgment motion), that Anderson's 
third-party 
complaint 
stated 
a 
valid 
claim 
against 
R&B 
Construction for negligent or faulty work on the basement or 
drain tiles.  R&B Construction further asserts that because such 
a claim against R&B Construction is the sort of claim that is 
covered by R&B Construction's policy, West Bend Insurance should 
No.  2015AP79.ssa 
 
15 
 
have a duty to defend R&B Construction in Jeff Anderson's third-
party complaint against R&B Construction and that West Bend 
Insurance should not have been relieved of any duty to defend 
R&B Construction.   
¶55 R&B Construction filed a petition for leave to file an 
interlocutory appeal of the circuit court's denial of its motion 
for summary judgment against Jeff Anderson, but the court of 
appeals 
denied 
R&B 
Construction's 
petition. 
 
On 
R&B 
Construction's 
motion, 
the 
circuit 
court 
has 
stayed 
all 
proceedings in the instant case pending before it.          
¶56 In the instant case, the court of appeals refused to 
consider the circuit court's order denying R&B Construction's 
motion for summary judgment against Jeff Anderson (the second 
summary judgment motion).  The court of appeals declared that 
that order was not before it.22  
¶57 Similarly, the circuit court's order denying R&B 
Construction's motion for summary judgment against Jeff Anderson 
(the second summary judgment) is not before this court.  The 
only order before us is the order in favor of West Bend 
Insurance against R&B Construction on the issue of whether West 
Bend Insurance has a duty to defend R&B Construction in Jeff 
Anderson's third-party complaint against it.     
¶58 The basic issue presented is whether Jeff Anderson's 
third-party complaint against R&B Construction (to which Smith's 
complaint against Jeff Anderson is attached) states a claim that 
                                                 
22 Smith v. Anderson, No. 2015AP79, unpublished slip op. 
(Wis. Ct. App. Dec. 22, 2015), ¶17 n.2.   
No.  2015AP79.ssa 
 
16 
 
West Bend Insurance had a duty to defend R&B Construction.  The 
answer to this question depends on several rules and principles 
of law that we shall address on the way to reversing the 
decision of the court of appeals and concluding that West Bend 
Insurance has a duty to defend R&B Construction in the third-
party action.  We remand the cause to the circuit court for 
further proceedings not inconsistent with this decision. 
I 
¶59 The first issue of law we address is the standard of 
review of the circuit court order granting summary judgment to 
West Bend Insurance.  We then set forth the four-corners rule 
used to determine whether West Bend Insurance has a duty to 
defend its insured.  We then examine rules for interpreting 
complaints and insurance policies, and principles applicable to 
contribution and indemnification.   
¶60 When we review a circuit court order granting summary 
judgment, we apply the same standard of review and methodology 
as that used by the circuit court.23  Summary judgment is 
appropriate when there is no issue of material fact and the 
moving party is entitled to judgment as a matter of law.24    
¶61 When no extrinsic evidence is admitted on the motion 
for summary judgment (and none is considered in the instant 
case), the interpretation of an insurance policy, including the 
                                                 
23 Fireman's Fund Ins. Co. of Wis. v. Bradley Corp., 2003 WI 
33, ¶15, 261 Wis. 2d 4, 660 N.W.2d 666.   
24 Wis. Stat. § 802.08(2) (2011-12).    
No.  2015AP79.ssa 
 
17 
 
duty to defend, is a question of law that this court determines 
independently of the circuit court or the court of appeals while 
benefiting from their analyses.25     
¶62 In determining whether an insurance company has a duty 
to defend its insured, the court applies the four-corners rule.26  
Under the four-corners rule, the court determines an insurance 
company's duty to defend its insured by comparing the terms of 
the insurance policy to the allegations of the complaint.  "The 
insurer's duty arises when the allegations in the complaint 
coincide with the coverage provided by the policy."27  Thus, 
"[i]f the [factual] allegations in the complaint, construed 
liberally, appear to give rise to coverage, insurers are 
required to provide a defense until the final resolution of the 
coverage question by a court."28  The proper application of the 
four-corners rule presents a question of law that the court 
                                                 
25 Fireman's Fund, 261 Wis. 2d 4, ¶17.   
26 In 
Water 
Well 
Solutions 
Service 
Group, 
Inc. 
v. 
Consolidated Insurance Co., 2016 WI 54, ¶24, 369 Wis. 2d 607, 
881 N.W.2d 285, this court "unequivocally [held] that there is 
no exception to the four-corners rule in duty to defend cases in 
Wisconsin."  Because we recently concluded that the four-corners 
rule has no exceptions, we will not address R&B Construction's 
argument asserting that the court should carve out an exception 
to the four-corners rule. 
27 Smith v. Katz, 226 Wis. 2d 798, 807, 595 N.W.2d 345 
(1999). 
28 Olson v. Farrar, 2012 WI 3, ¶30, 338 Wis. 2d 215, 229, 
809 N.W.2d 1.   
No.  2015AP79.ssa 
 
18 
 
decides independently of the determinations rendered by the 
circuit court and court of appeals.29 
¶63 In applying the four-corners rule in the instant case, 
the court is guided by the following rules for interpreting the 
complaint:  
• A court construes all allegations in the complaint 
liberally 
when 
comparing 
the 
allegations 
of 
a 
complaint to the terms of an insurance policy.30  
• We assume all reasonable inferences in the allegations 
of a complaint in favor of the insured.31   
• Assuming all reasonable inferences in favor of the 
insured means that we "resolve any doubt regarding the 
duty to defend in favor of the insured."32 
• The facts alleged in the complaint establish an 
insurance company's duty to defend the insured.33  
                                                 
29 Olson, 338 Wis. 2d 215, ¶22. 
30 Estate of Sustache v. Am. Family Mut. Ins. Co., 2008 WI 
87, ¶21, 311 Wis. 2d 548, 751 N.W.2d 845.  
31 Doyle v. Engelke, 219 Wis. 2d 277, 284, 580 N.W.2d 245, 
248 (1998).   
32 Fireman's Fund 261 Wis. 2d 4, ¶20; Wausau Tile, Inc. v. 
County Concrete Corp., 226 Wis. 2d 235, 266, 593 N.W.2d 445 
(1999) ("Any doubt as to the existence of the duty to defend 
must be resolved in favor of the insured."). 
33 Doyle, 219 Wis. 2d at 284 ("In determining an insurer's 
duty to defend, we apply the factual allegations present in the 
complaint to the terms of the disputed insurance policy."); Am. 
Family Mut. Ins. Co. v. Am. Girl, Inc., 2004 WI 2, ¶24, 268 
Wis. 2d 16, 673 N.W.2d 65 ("First, we examine the facts of the 
insured's claim to determine whether the policy's insuring 
agreement makes an initial grant of coverage."). 
(continued) 
No.  2015AP79.ssa 
 
19 
 
"[W]e must focus on the incident or injury that gives 
rise to the claim, not the plaintiff's theory of 
liability."34 
¶64 In applying the four-corners rule in the instant case, 
the court is guided by the following rules for interpreting an 
insurance policy: 
• Words and phrases in insurance contracts are subject 
to the same rules of construction that apply to 
contracts generally.35 
                                                                                                                                                             
Looking at the facts alleged rather than the legal theories 
asserted 
comports 
with 
the 
concept 
of 
notice 
pleading.  
Wisconsin Stat. § 802.01(1)(a) requires complaints to "plead 
facts, which if true, would entitle the plaintiff to relief."33 
Data Key Partners v. Permira Advisors LLC, 2014 WI 86, ¶21, 356 
Wis. 2d 665, 849 N.W.2d 693. 
34 Stuart v. Weisflog's Showroom Gallery, Inc., 2008 WI 86, 
¶36, 311 Wis. 2d 492, 753 N.W.2d 448 (internal quotation marks 
and quoted source omitted). 
C.L. v. School Dist. of Menomonee Falls, 221 Wis. 2d 692, 
701, 585 N.W.2d 826 (Ct. App. 1998), illustrates how to apply 
this principle.  In C.L., the plaintiff alleged that her 
school's librarian sexually assaulted her.  The court of appeals 
looked to the facts alleged and concluded that an "intentional 
acts" exclusion in the insured's policy precluded coverage 
despite the plaintiff's characterization of her legal claims as 
alleged negligent infliction of emotional distress.  The court 
stated that this legal theory, "although labeled as 'negligent' 
infliction of emotional distress, allege[d] facts that certainly 
are intentional in nature."  C.L., 221 Wis. 2d at 701.  The 
court of appeals therefore concluded that the facts trumped the 
legal theories asserted and precluded coverage under the policy. 
C.L., 221 Wis. 2d at 704-05.  
14 Steven Plitt et al., Couch on Insurance § 200.19 (3d ed. 
2005) ("It is the factual allegations instead of the legal 
theories alleged which determine the existence of a duty to 
defend.").  
No.  2015AP79.ssa 
 
20 
 
• The primary objective in interpreting and construing a 
contract is to ascertain and carry out the true intent 
of the parties.36   
• The terms of an insurance policy are interpreted from 
the perspective of a reasonable insured, but a court 
will not find coverage that the insurance company did 
not contemplate or for which the insurance company has 
not received a premium.37  
• A court broadly construes the policy to "ensure that 
insurers do not frustrate the expectations of their 
insureds by [prematurely] resolving the coverage issue 
in their own favor[.]"38   
• An insurance company's duty to defend its insured in a 
lawsuit is necessarily broader than its duty to 
indemnify, the other duty generally imposed on an 
insurance company under a Commercial General Liability 
Policy.39  The insurance company is required to "defend 
all suits where there would be coverage if the 
allegations were proven . . . ."40   By contrast, the 
                                                                                                                                                             
35 Fireman's Fund, 261 Wis. 2d 4, ¶16. 
36 Fireman's Fund, 261 Wis. 2d 4, ¶16. 
37 Am. Girl, 268 Wis. 2d 16, ¶23. 
38 Olson, 338 Wis. 2d 215, ¶32 (quoting Baumann v. Elliott, 
2005 WI App 186, ¶10, 286 Wis. 2d 667, 704 N.W.2d 361). 
39 Olson, 338 Wis. 2d 215, ¶29. 
40 Olson, 338 Wis. 2d 215, ¶29.   
No.  2015AP79.ssa 
 
21 
 
duty to indemnify kicks in once a covered claim 
against the insured has actually been proven.   
• "The duty of defense depends on the nature of the 
claim and has nothing to do with the merits of the 
claim."41  Accordingly, the insurance company must 
provide a defense for any suit where there would be 
coverage, 
even 
if 
the 
allegations 
are 
"utterly 
specious."42  
• If any one claim falls within the policy coverage, 
regardless of the merits of the claim, the insurance 
company has a duty to provide a defense for its 
insured.43  
¶65 Finally we consider the terms of the complaints and 
insurance policy in light of Jeff Anderson's third-party 
complaint's request for indemnification and contribution.  Both 
                                                 
41 Elliott v. Donahue, 169 Wis. 2d 310, 321, 485 N.W.2d 403 
(1992).   
42 Smith v. Katz, 226 Wis. 2d 798, 807, 595 N.W.2d 345 
(1999).   
43 "Insurers have an obligation to defend the entire lawsuit 
when one theory of liability falls within coverage."  2 Sheila 
M. Sullivan et al., Anderson on Wisconsin Insurance Law § 7.82 
(7th ed. 2015), citing Charter Oak Fire Ins. Co. v. Hedeen & 
Cos., 280 F.3d 730, 738 (7th Cir. 2002) (applying Wisconsin law) 
and School Dist. of Shorewood v. Wausau Ins. Cos., 170 
Wis. 2d 347, 366, 488 N.W.2d 82 (1992), rejected on other 
grounds by Johnson Controls, Inc. v. Employers Ins. of Wausau, 
2003 WI 108, ¶¶38–39, 264 Wis. 2d 60, 665 N.W.2d 257.   
No.  2015AP79.ssa 
 
22 
 
of these doctrines distribute loss for a single harm among 
multiple persons liable for the same harm.44 
¶66 The underlying premise of the two doctrines is that 
when multiple parties are liable for the same harm, the party 
that paid may have a right, either contractually or under common 
law, to reimbursement from the other parties.  These doctrines 
"tend to merge" even though they are distinct:  
Contribution distributes the loss by requiring each 
person to pay his proportionate share of the damages 
on a comparative fault basis.  Indemnification shifts 
the entire loss from one person who has been compelled 
to pay it to another who on the basis of equitable 
principles should bear the loss.45  
¶67 "A cause of action for contribution is separate and 
distinct from the underlying cause of action, whether the latter 
involves contract or tort claims . . . ."46 
¶68 Jeff 
Anderson's 
claim 
of 
indemnification 
or 
contribution rests on his claim of his "bearing . . . a greater 
share of a common liability than is justified, and not the 
source of the underlying liability."  "It is enough that a joint 
liability from whatever source exist."47   
                                                 
44 Swanigan v. State Farm Ins. Co., 99 Wis. 2d 179, 196, 299 
N.W.2d 234 (1980); see also 2 Sheila M. Sullivan et al., 
Anderson on Wisconsin Insurance Law § 10.19 (7th ed. 2015). 
45 Swanigan, 99 Wis. 2d at 196 (internal citations omitted). 
46 III The Law of Damages in Wisconsin § 31.29, at 26 
(Russell M. Ware ed., 6th ed. 2016) (citing Johnson v. Heintz, 
73 Wis. 2d 286, 295, 243 N.W.2d 815 (1976); State Farm Mut. Auto 
Ins. Co. v. Schara, 56 Wis. 2d 262, 201 N.W.2d 758 (1972); Wis. 
Stat. § 893.92). 
47 Schara, 56 Wis. 2d at 266.  
(continued) 
No.  2015AP79.ssa 
 
23 
 
¶69 In sum, in the instant case, Jeff Anderson's third-
party 
complaint 
does 
not 
explicitly 
state 
that 
R&B 
Construction's work was "faulty, negligent, or defective."  But 
evidence of R&B Construction's negligence need not be proved to 
determine whether West Bend Insurance has a duty to defend.  In 
a duty-to-defend case, a court is not charged with deciding 
liability and the issue of damages.48  A claimant (here Jeff 
Anderson) is entitled to recover on the general principles of 
indemnity when the claimant has been obliged to pay damages by 
reason of another's (here R&B Construction's) torts.49  
II 
¶70 We begin by examining Smith's complaint against Jeff 
Anderson.  We then examine Jeff Anderson's third-party complaint 
against R&B Construction.   
¶71 Smith alleged the following facts in her complaint:50  
                                                                                                                                                             
"[T]he contribution cause of action [may] be considered in 
the same proceeding as the underlying cause of action, despite 
the contingent nature of the contribution cause of action."  III 
The Law of Damages in Wisconsin § 31.29, at 26-27 (Russell M. 
Ware ed., 6th ed. 2016) (citing Johnson, 73 Wis. 2d at 295). 
48 2 Sheila M. Sullivan et al., Anderson on Wisconsin 
Insurance Law § 7.53 (7th ed. 2015) ("An insured is not required 
to produce evidence of the tortfeasor's negligence in a 
declaratory-judgment 
action 
filed 
to 
determine 
insurance 
coverage.  A court in a declaratory judgment action is not 
charged with deciding liability and damages issues."). 
49 Milwaukee Mut. Ins. Co. v. Priewe, 118 Wis. 2d 318, 322-
23, 348 N.W.2d 585 (Ct. App. 1984) (citing Milwaukee v. Boynton 
Cab Co., 201 Wis. 581, 586, 229 N.W. 28 (1930)).  
50 As we explained previously, references are to Smith's 
amended complaint.   
No.  2015AP79.ssa 
 
24 
 
• Jeff Anderson painted and cleaned the basement so that 
it appeared to be free from any defects prior to the 
sale of the residence to Smith.   
• After she purchased the residence, she discovered that 
the drain tiles were plugged, that the basement 
leaked, 
and 
that 
Jeff 
Anderson 
had 
performed 
structural repair work without obtaining the required 
permits. 
• She was informed by experts that the defects existed 
when Jeff Anderson owned the house.   
• To repair or correct the condition of the property she 
will need to obtain proper permits, install and 
replace the drain tile, and correct Jeff Anderson's 
structural repair work. 
• She believed that Jeff Anderson failed to disclose 
problems with the property. 
¶72 The Smith complaint pleaded four causes of action 
based on the facts stated above:  
• Breach of Contract. As a term of the contract, Jeff 
Anderson warranted that he had no notice of any 
conditions 
affecting 
the 
property 
except 
those 
identified in his Real Estate Condition Report.  Jeff 
Anderson breached his contract by failing to disclose 
the condition of the property in his Real Estate 
Condition Report or in the Offer to Purchase.      
• Misrepresentation: 
Intentional. 
Jeff 
Anderson 
represented that he had no notice or knowledge of any 
No.  2015AP79.ssa 
 
25 
 
conditions affecting the property, failed to disclose 
that the basement leaked, and concealed leaky basement 
walls 
with 
paint, 
knowing 
the 
true 
material 
significant defects in the property with the intent to 
deceive and induce Smith to purchase the residence.  
• Misrepresentation (Violation of Wis. Stat. §§ 895.44651 
and 943.20(1)(d)).52  Jeff Anderson falsely represented 
that he had no notice or knowledge of any conditions 
affecting the property, failed to disclose that the 
basement leaked, and concealed leaky basement walls 
with paint.  Jeff Anderson's false representations 
were defects in violation of the statutes cited, with 
the intent to deceive and induce Smith to purchase the 
                                                 
51 Wisconsin Stat. § 895.446(1) provides in relevant part: 
(1) Any person who suffers damage or loss by reason of 
intentional conduct that occurs on or after November 
1, 
1995, 
and 
that 
is 
prohibited 
under 
s. . . . 943.20, . . . has a cause of action against 
the person who caused the damage or loss. 
52 Wisconsin Stat. § 943.20(1)(d) provides in relevant part: 
(1) Acts.  Whoever does any of the following may be 
penalized as provided in sub. (3): 
. . . . 
(d) Obtains title to property of another person by 
intentionally deceiving the person with a false 
representation which is known to be false, made with 
intent to defraud, and which does defraud the person 
to whom it is made. "False representation" includes a 
promise made with intent not to perform it if it is a 
part of a false and fraudulent scheme. 
No.  2015AP79.ssa 
 
26 
 
residence, entitling Smith to treble damages, attorney 
fees, and costs. 
• Misrepresentation (Violation of Wis. Stat. § 100.18:53 
Jeff Anderson's untrue, deceptive, and misleading 
representations in the purchase contract and his 
concealing leaky basement walls with paint constituted 
fraudulent misrepresentations in violation of the 
statute, entitling Smith to monetary damages, attorney 
fees, and costs.54   
                                                 
53 Wisconsin Stat. § 100.18 provides in relevant part:  
(1) No person . . . with intent to sell, distribute, 
increase the consumption of or in any wise dispose of 
any real estate . . . directly or indirectly, to the 
public 
for 
sale . . . shall 
make, 
publish, 
disseminate, circulate, or place before the public, or 
cause, directly or indirectly, to be made, published, 
disseminated, circulated, or placed before the public, 
in this state . . . an advertisement, announcement, 
statement or representation of any kind to the public 
relating to such purchase . . . [which] contains any 
assertion, representation or statement of fact which 
is untrue, deceptive or misleading. 
54 See Everson v. Lorenz, 2005 WI 51, 280 Wis. 2d 1, 695 
N.W.2d 298, for a discussion of Wis. Stat. § 100.18.  In 
Everson, the court of appeals certified to this court the issue 
"[whether] an alleged strict responsibility misrepresentation 
and/or negligent misrepresentation in a real estate transaction 
constitute an 'occurrence' for the purpose of a commercial 
general liability insurance policy such that the insurer's duty 
to defend is triggered.  In Everson, we concluded that no 
coverage 
existed 
under 
the 
CGL 
policy, 
which 
defined 
'occurrence' . . . .  The basis for our decision that the CGL 
policy did not provide coverage was our conclusion that a 
volitional misrepresentation could not be considered an accident 
for purposes of coverage."  Stuart, 311 Wis. 2d 492, ¶30 
(internal citations omitted).   
(continued) 
No.  2015AP79.ssa 
 
27 
 
¶73 The "Wherefore" clause of Smith's complaint asked for 
judgment against Jeff Anderson for the difference in value 
between the property as represented and its actual value, the 
cost of placing the property in the condition it was represented 
to be in, the cost of all repairs, the costs of the action, and 
actual reasonable attorney fees.  As an additional remedy 
Smith's complaint sought "rescission/restitution." 
¶74 In sum, Smith alleges that Jeff Anderson breached his 
contract with Smith and that Jeff Anderson is a tortfeasor, that 
is, that Anderson made misrepresentations to induce her to 
purchase the residence.  Factually, her complaint alleges 
damages arising out of buying a residence from Jeff Anderson 
with a leaky basement and damaged drain tiles.  The legal causes 
of action in Smith's complaint against Jeff Anderson are breach 
of contract and misrepresentation.  Smith's complaint does not 
mention R&B Construction directly or indirectly.  
¶75 The following facts were alleged in Jeff Anderson's 
third-party complaint against R&B Construction: 
• Jeff Anderson hired 4th Dimension to inspect and 
assess the basement and recommend repairs of any 
defects in the basement walls and foundation. 
                                                                                                                                                             
Smith's complaint alleging that Jeff Anderson's conduct 
violated Wis. Stat. § 100.18 removed the complaint from coverage 
as an occurrence under the liability insurance policy. See 
Stuart, 311 Wis. 2d 492, ¶32.   
For further discussion of Everson, see ¶109, nn.62-64, 
infra.    
No.  2015AP79.ssa 
 
28 
 
• Jeff Anderson gave 4th Dimension's report to R&B 
Construction, contracting with it to perform repairs 
according to the report. 
• In addition, Jeff Anderson directed R&B Construction 
to install drain tiles along the east wall and install 
a sump crock and a sump pump.  Jeff Anderson and R&B 
Construction agreed that ground to the east of the 
residence 
gradually 
sloped 
down 
in 
a 
westward 
direction, 
which 
directed 
run-off 
towards 
the 
basement's east wall.   
• R&B Construction properly installed a new drain 
system, a sump crock, and a sump pump, and made 
certain that the drainage system was tested and "was 
in good working order and draining to the proper area 
of the property."   
• "Without admitting that any of the work performed by 
third-party 
defendant, 
R&B 
Construction, . . . was 
faulty, negligent or defective," Jeff Anderson sought 
indemnification and contribution from R&B Construction 
were Jeff Anderson held liable to Smith. 
• Based upon the warranties R&B Construction provided, 
Jeff Anderson requested R&B Construction to correct 
deficiencies, if any, arising out of its work. 
• In the sale of the residence, Jeff Anderson made no 
warranties as to the condition of the residence, sold 
the residence to Smith in "as is" condition, and gave 
Smith "copies of the third party defendant's reports, 
No.  2015AP79.ssa 
 
29 
 
details of work performed and warranties regarding the 
work performed." 
• Smith did not contact R&B Construction and request it 
to correct any deficiencies in its work.      
¶76 In 
sum, 
Anderson's 
third-party 
complaint 
seeks 
contribution or indemnification from R&B Construction should 
Anderson be held liable to Smith.   
¶77 Jeff 
Anderson's 
third-party 
complaint 
does 
not 
explicitly assert that R&B Construction was negligent in 
repairing the residence or causing the basement to leak and the 
drain tiles to be damaged and that R&B Construction's conduct 
caused Anderson to be held liable to Smith.      
¶78 These assertions can, however, be reasonably inferred 
from the facts stated in Smith's complaint and Anderson's third-
party complaint.  The third-party complaint, "without admitting 
that any of the work performed by third party defendant, R&B 
Construction, . . . was faulty, negligent or defective," asked 
that R&B Construction repair any defects should Jeff Anderson be 
held liable to Smith.  The third-party complaint further stated 
that based upon the warranties R&B Construction provided, Jeff 
Anderson requested R&B Construction to correct deficiencies, if 
any, arising out of its work.  
¶79 These parts of the third-party complaint reveal that 
Jeff Anderson apparently attempted to construct the third-party 
complaint to be consistent with his denial of liability to 
Smith.  A reasonable reading of the Smith complaint and the 
third-party complaint is that Anderson was asserting that if he 
No.  2015AP79.ssa 
 
30 
 
lost to Smith on her claims, he is entitled to compensation from 
R&B Construction for its deficient performance that rendered him 
liable to Smith.    
¶80 It is evident from the two complaints that Smith and 
Jeff Anderson have set forth distinct but interrelated facts and 
claims.  Smith's complaint alleges defects with the residence 
and 
blames 
Jeff 
Anderson 
for 
breach 
of 
contract 
and 
misrepresentation.  Jeff Anderson obviously refuses to concede 
liability to Smith and seeks compensation from R&B Construction 
should he be liable to Smith.  R&B Construction's work on the 
residence before the sale to Smith may have caused, contributed 
to, or aggravated the defects alleged by Smith.         
III 
 
¶81 Now that we have examined the complaints, we examine 
the coverage provisions of the Contractors Businessowners' 
policy that R&B Construction purchased from West Bend Insurance.  
¶82 Under the policy, West Bend Insurance has a duty to 
defend R&B Construction if the facts alleged in Anderson's 
third-party complaint (to which Smith's complaint is attached) 
constitute "property damage" caused by an "occurrence."  
¶83 The West Bend Insurance policy contains standard CGL 
policy language regarding "property damage" and "occurrence."  
With regard to property damage, the policy reads as follows:  
We will pay those sums that the insured becomes 
legally 
obligated 
to 
pay 
as 
damages 
because 
of . . . "property damage" to which this insurance 
applies.  We will have the right and duty to defend 
the insured against any "suit" seeking those damages.  
However, we will have no duty to defend the insured 
No.  2015AP79.ssa 
 
31 
 
against any "suit" seeking damages for . . . "property 
damage" to which this insurance does not apply. 
. . . .   
This insurance applies to . . . "property damage" only 
if: 
(1) The . . . "property damage" is caused by an 
"occurrence" 
that 
takes 
place 
in 
the 
"coverage 
territory"; [and] 
(2) The . . . "property damage" occurs during the 
policy period . . . .  
. . . . 
"Property damage" means: 
a. Physical injury to tangible property, including all 
resulting loss of use of that property.  All such loss 
of use shall be deemed to occur at the time of the 
physical injury that caused it; or 
b. Loss of use tangible personal property that is not 
physically injured.  All such loss of use shall be 
deemed to occur at the time of the "occurrence" that 
caused it.  (Emphasis added.)    
¶84 The facts that Smith alleges——"drain tiles are plugged 
with iron ochre, the basement leaked"——allege physical injury to 
tangible property or allege loss of use of tangible property. 
The drain tiles were physically injured when they were clogged 
and did not function properly.  Likewise, the basement walls 
were physically injured, causing water leakage in the basement.   
¶85 West 
Bend 
Insurance 
characterizes 
the 
amended 
complaint as alleging only pecuniary loss or damage.  This 
characterization is not an accurate depiction of the Smith 
complaint.  Smith asserts that "in order to repair or correct 
the condition of the property [she] will need to . . . install 
and replace drain tile, and correct the defendant's structural 
No.  2015AP79.ssa 
 
32 
 
repair work." Smith demands judgment for the cost of all 
repairs.  Ordinarily, tangible property that is not damaged does 
not need to be repaired.  Read liberally and with reasonable 
inferences drawn in favor of the insured, the facts in the 
amended complaint allege property damage as defined in the 
policy. 
¶86 Furthermore, the Smith complaint seeks damages for 
loss of use of tangible property.  Loss of use of tangible 
property that is injured is property damage covered in the 
policy.  The Smith complaint can be read to state that the drain 
tiles and the basement have been physically injured so that they 
cannot be used to their full extent.       
¶87 Although we conclude that the amended complaint can be 
read to allege "property damage" under the insurance policy, 
West Bend Insurance asserts that it has no duty to defend its 
insured in the instant case unless an "occurrence" caused the 
property damage.     
¶88 The policy defines "occurrence" as "an accident, 
including continuous or repeated exposure to substantially the 
same general harmful conditions."   
¶89 The word "accident" in this definition of "occurrence" 
was considered in American Family Mutual Insurance Co. v. 
American Girl, Inc., 268 Wis. 2d 16, ¶37, in which the court 
stated:   
The term "accident" is not defined in the policy.  The 
dictionary definition of "accident" is:  "an event or 
condition occurring by chance or arising from unknown 
or remote causes."  Webster's Third New International 
Dictionary of the English Language 11 (2002).  Black's 
No.  2015AP79.ssa 
 
33 
 
Law Dictionary defines "accident" as follows:  "The 
word 'accident,' in accident policies, means an event 
which 
takes 
place 
without 
one's 
foresight 
or 
expectation.  A result, though unexpected, is not an 
accident; the means or cause must be accidental." 
Black's Law Dictionary 15 (7th ed. 1999).   
 
¶90 Applying this definition of "occurrence," the American 
Girl court concluded that the damage at issue in that case——"the 
continuous, substantial, and harmful settlement of the soil 
underneath the building" that resulted from inadequate site-
preparation advice given by a soil engineer——was an occurrence 
because "[n]either the cause nor the harm was intended, 
anticipated, or expected."55  The property damage in American 
Girl was ongoing and was an unintended result of a soil 
engineer's faulty advice, so it was caused by an "occurrence."56   
 
¶91 In reaching this conclusion, however, American Girl 
distinguished "faulty workmanship" from "accidents."  Faulty 
workmanship claims alone are not "occurrences" because the 
resulting harm is not accidental.  But the harm is accidental 
when "faulty workmanship" causes an unexpected harm, such as the 
damaged building in American Girl.  In other words, "while 
faulty workmanship is not an 'occurrence,' faulty workmanship 
                                                 
55 Am. Girl, 268 Wis. 2d 16, ¶38. 
56 See also Acuity v. Society Ins., 2012 WI App 13, ¶17, 339 
Wis. 2d 217, 810 N.W.2d 812 (excavation adjacent to building's 
wall caused cracking of floor within the building, which also 
led to other injuries to physical property; "[i]t is clear that 
this damage was caused by the accidental soil erosion that 
occurred because of faulty excavation techniques.  Accordingly, 
the 'property damage' was caused by an 'occurrence' . . . . "). 
No.  2015AP79.ssa 
 
34 
 
may 
cause 
an 
'occurrence[,]' . . . [t]hat 
is, . . . an 
unintended event."57   
 
¶92 The court of appeals made this point in Acuity v. 
Society Ins., 2012 WI App 13, ¶34, 339 Wis. 2d 217, 810 
N.W.2d 812, as follows: 
The lessons of American Girl, Glendenning's [Limestone 
& Ready-Mix Co. v. Reimer, 2006 WI App 161, 295 
Wis. 2d 556, 721 N.W.2d 704] and Kalchthaler [Keller 
Const. Co., 224 Wis. 2d 387, 397, 591 N.W.2d 169 
(1999)] are that while faulty workmanship is not an 
"occurrence," 
faulty 
workmanship 
may 
cause 
an 
"occurrence."  That is, faulty workmanship may cause 
an unintended event, such as soil settling in American 
Girl, the leaking windows in Kalchthaler, or, in this 
case, 
the 
soil 
erosion, 
and 
that 
event——the 
"occurrence"——may result in harm to other property. 
 
¶93 The "occurrence" that R&B Construction is alleged to 
have caused in the instant case is the continuous and repeated 
exposure to water leaking into the basement and matter flowing 
into and clogging the drain tiles.   
¶94 Like the faulty workmanship in these prior cases, R&B 
Construction's allegedly faulty workmanship in the instant case 
led to our conclusion that R&B Construction's alleged negligence 
led to leaking basement walls and clogging of the drain tiles.   
¶95 Either 
of 
these 
conditions 
continually 
caused 
unexpected water damage to Smith's house.  Water damage, when it 
                                                 
57 Acuity, 339 Wis. 2d 217, ¶24.   
No.  2015AP79.ssa 
 
35 
 
is 
a 
condition 
that 
unexpectedly 
results 
from 
faulty 
workmanship, is an "occurrence" under the policy.58   
¶96 Therefore, we conclude that the complaints allege 
facts that Smith's residence experienced property damage caused 
by an occurrence.   
¶97 As we stated previously, Jeff Anderson is entitled to 
recover under the general principles of indemnification or 
contribution if he is held liable to Smith for breach of 
contract or misrepresentation by reason of R&B Construction's 
alleged tortious conduct.   
¶98 Here, Jeff Anderson's complaint can be read to allege 
that R&B Construction negligently performed work on the Smith 
residence, which caused property damage.  This property damage 
may result in Anderson being held liable for breach of his 
contract with Smith and for misrepresentation of the condition 
of the residence. 
¶99 West Bend Insurance ultimately argues that Jeff 
Anderson's 
"garden-variety 
contribution 
or 
indemnification" 
claim passes through the same type of liability as that asserted 
in Smith's complaint.  According to West Bend Insurance, it has 
no duty to defend because the insurance policy in the instant 
case 
does 
not 
provide 
for 
defense 
or 
coverage 
of 
misrepresentation claims.          
                                                 
58 Kalchthaler v. Keller Const. Co., 224 Wis. 2d 387, 391, 
591 N.W.2d 169 (1999) (an "occurrence" under the policy existed 
when a subcontractor's faulty work resulted in leaking windows, 
which, in turn, caused water damage to the interior of the 
house).   
No.  2015AP79.ssa 
 
36 
 
¶100 West Bend Insurance's argument construes Wis. Stat. 
§ 803.05, which permits third-party actions, too narrowly.  
Section 803.05 provides, in relevant part, that "a defending 
party, as a 3rd-party plaintiff, may cause a summons and 
complaint to be served upon a person not a party to the action 
who is or may be liable to the defending party for all or part 
of the plaintiff's claim against the defending party . . . ."  
Nothing in this statutory provision precludes a third-party 
plaintiff, here Jeff Anderson, from asserting a theory of 
liability that is distinct from the theory asserted in the 
underlying action.59   
¶101 Jeff Anderson's third-party complaint is distinct from 
the underlying Smith action.  Smith's allegations of facts 
relate to breach of contract and misrepresentation.  Jeff 
Anderson's allegations of facts in his third-party complaint 
against R&B Construction do not relate to misrepresentation by 
R&B Construction; they relate to negligent performance of R&B 
Construction's work for Jeff Anderson. 
 
¶102 In sum, applying the four-corners rule and comparing 
the liberal interpretation of the factual allegations in the 
complaints (assuming all reasonable inferences in favor of the 
                                                 
59 See also 6 Wright & Miller, Federal Practice & Procedure 
§ 1446 & n.23 (3d ed. 2016) (discussing Federal Rule of Civil 
Procedure Rule 14, which has language analogous to Wis. Stat. 
§ 803.05) ("The third-party claim need not be based on the same 
theory as the main claim. . . . [because the] [p]urpose of 
impleader would be defeated if its scope was circumscribed by a 
requirement 
of 
identity 
of 
claims. 
 
Therefore, 
courts 
consistently have held that impleader does not require an 
identity of claims or even that they rest on the same theory."). 
No.  2015AP79.ssa 
 
37 
 
insured) with the liberal interpretation of the text of the 
policy (which we interpret from the perspective of a reasonable 
insured), we conclude (resolving  doubts in favor of the insured 
and focusing on the incident or injury, not the theory of 
liability) that West Bend Insurance has a duty to defend R&B 
Construction in Jeff Anderson's action against it.  This duty to 
defend R&B Construction is triggered by facts in the complaints, 
which demonstrate that at least one claim falls within the 
policy coverage, regardless of the merits of the claim:  the 
leaking basement walls and the clogging of the drain tiles are 
property damage, caused by a harmful condition that is the 
unexpected result of R&B Construction's allegedly negligent 
repairs in the basement.  The complaints thus assert "property 
damage" caused by an "occurrence" under the terms of the policy. 
IV 
¶103 Before we conclude, we turn to Qualman v. Bruckmoser, 
163 Wis. 2d 361, 471 N.W.2d 282 (Wis. Ct. App. 1991), upon which 
the court of appeals and West Bend Insurance rely.  Qualman is 
not dispositive in the instant case. 
¶104 Asserting that the instant case is "on all fours" with 
Qualman v. Bruckmoser, 163 Wis. 2d 361, 471 N.W.2d 282 (Wis. Ct. 
App. 1991), West Bend Insurance contends that no property 
damages are alleged in the instant case.    
¶105 Qualman, like the instant case, arose out of the sale 
of residential real property.  The home-buyer in Qualman sued 
the seller, claiming breach of contract and misrepresentation of 
No.  2015AP79.ssa 
 
38 
 
existing significant structural aspects of the property.60  The 
Qualman court noted that the damages for such claims, if proven, 
would be "the difference between the market value of the 
property at the time of purchase and the amount actually paid" 
and concluded that "the damages alleged . . . are pecuniary in 
nature and do not constitute property damage" under the 
insurance policy.61  
¶106 The court of appeals in the instant case viewed the 
instant case as being controlled by Qualman for two reasons:  
(1) In the Smith case, as in the Qualman case, the complaint 
alleges 
that 
the 
seller 
breached 
its 
contract 
and 
made 
misrepresentations, and misrepresentations do not constitute an 
"occurrence" as defined in the policy; and (2) in the Smith 
case, as in the Qualman case, the complaint does not allege 
"property damage." 
¶107 Qualman does not, however, govern the instant case 
because the instant case is significantly different from 
Qualman. 
¶108 We first compare the complaints in the two cases with 
regard to factual allegations claiming misrepresentations to 
determine whether West Bend Insurance's policy requirement of an 
"occurrence" has been satisfied.      
                                                 
60 Qualman 
v. 
Bruckmoser, 
163 
Wis. 2d 361, 
367, 
471 
N.W.2d 282 (Wis. Ct. App. 1991).   
61 Qualman, 163 Wis. 2d at 366.   
No.  2015AP79.ssa 
 
39 
 
¶109 Qualman stands for the proposition that most, if not 
all, misrepresentation claims are not "occurrences" as defined 
in 
the 
standard 
CGL 
insurance 
policy.62 
 
Each 
type 
of 
misrepresentation 
requires 
a 
false 
assertion, 
and 
false 
assertions "require[] a degree of volition inconsistent with the 
term accident."63  Therefore, "where there is a volitional act 
involved in such a misrepresentation, that act removes it from 
coverage as an 'occurrence' under the liability insurance 
policy."64   
¶110 In Qualman, the insurance company was asked to defend 
against a complaint by a buyer alleging breach of contract and 
intentional misrepresentation.  The Qualman court did not have 
to consider a third-party complaint.  
¶111 In the instant case, Smith's complaint alleges facts 
against Jeff Anderson claiming he breached his contract and made 
misrepresentations to her about the condition of the property to 
induce the sale to her.  But we are not deciding whether West 
Bend Insurance has a duty to defend Jeff Anderson.  No one 
claims that West Bend Insurance has a duty to defend Jeff 
Anderson.      
¶112 Rather, we are deciding whether West Bend Insurance 
has a duty to defend R&B Construction in Jeff Anderson's third-
                                                 
62 Everson v. Lorenz, 2005 WI 51, 280 Wis. 2d 1, 695 
N.W.2d 298.  See also ¶72 n.54, supra.   
63 Everson, 280 Wis. 2d 1, ¶¶19-20 (citing Qualman).   
64 Everson, 280 Wis. 2d 1, ¶¶19-20 (citing Qualman).  
No.  2015AP79.ssa 
 
40 
 
party action.  Jeff Anderson's third-party complaint does not 
allege that R&B Construction made misrepresentations to him.  
¶113 Anderson's complaint should be interpreted, as we have 
previously explained, as alleging facts claiming that R&B 
Construction's negligent conduct caused property damage to the 
residence and claiming that if Jeff Anderson is liable to Smith 
for breach of contract or the tort of misrepresentation, R&B 
Construction is liable to Jeff Anderson.        
¶114 Neither Smith's complaint nor Jeff Anderson's third-
party complaint alleges facts that suggest R&B Construction 
committed a volitional act misrepresenting the quality of its 
work 
to 
either 
Smith 
or 
Jeff 
Anderson. 
 
A 
reasonable 
interpretation of the complaints supports our reading that, if 
R&B Construction is liable to Anderson, its liability rests not 
on a volitional act involving misrepresentation but on R&B 
Construction's negligence in performing its construction work 
for Anderson. 
¶115 The rule of law Qualman sets forth——that an insurance 
company does not generally have a duty to defend an insured 
against a complaint alleging facts constituting a claim for 
misrepresentation——is not dispositive of West Bend Insurance's 
duty to defend R&B Construction against Jeff Anderson's factual 
allegations of R&B Construction's negligence. 
¶116 We now compare the complaints in Qualman and the 
instant case with regard to whether the complaint in the instant 
case sets forth a claim for property damage within the policy.   
No.  2015AP79.ssa 
 
41 
 
¶117 The Smith complaint, unlike the Qualman complaint, was 
not limited to seeking "difference in value" (pecuniary) 
damages.  Smith's complaint (in contrast to Qualman's complaint) 
was not confined to the diminished value of Smith's residence.65   
¶118 Smith made claims in the alternative for property 
damages:  Smith alleged that, in order to repair or correct the 
condition of the property, she will have to replace drain tiles. 
Drain tile is property and it need not be replaced unless it is 
damaged.66  Smith's claim for repair of property evidences a 
claim for property damage, including loss of property use. 
¶119 Furthermore, when the third-party complaint (along 
with Smith's complaint) and West Bend's insurance policy are 
                                                 
65 See Stuart, 311 Wis. 2d 492, ¶53 (Qualman "involve[s] 
'difference in value' damages as awarded to remedy failure to 
disclose preexisting defects in property sales.  In this case, 
in contrast, the Stuarts were awarded compensation for the 
damage to their property that came after, and was caused by, the 
defendants' 
statutory 
misrepresentation 
and 
common 
law 
negligence."). 
66 West Bend also relies on Wausau Tile, Inc. v. County 
Concrete Corp., 226 Wis. 2d 235, 593 N.W.2d 445 (1999), for the 
proposition that an insurance company has no duty to defend an 
insured when the complaint does not allege property damage.  In 
Wausau Tile, the court held that the loss Wausau Tile claimed 
for repairing and replacing pavers was not property damage but 
economic loss not covered by the policy; the pavers were damaged 
because one or more of their ingredients was of insufficient 
quality.  The parts of the complaint in Wausau Tile alleging 
negligence, future personal injury claims of pedestrians, and 
property damage to property adjoining the pavers were not in 
litigation because the real parties in interest for these claims 
were not parties to the action.  Third parties, not Wausau Tile, 
sustained and had claims for property damage or personal injury.  
In the instant case, Jeff Anderson is the real party in interest 
against whom claims for property damage are being made.   
No.  2015AP79.ssa 
 
42 
 
liberally read and construed in favor of the insured, Jeff 
Anderson claimed that R&B Construction worked on the residence, 
that R&B Construction was arguably negligent in its work on the 
residence, and that R&B Construction's negligence in the work 
resulted in property damage, including loss of property use. 
¶120 In sum, the court of appeals erred in stating that "no 
contention [is made] that R&B's faulty workmanship caused the 
water exposure or the multiple issues that resulted therefrom."67   
¶121 West 
Bend 
Insurance 
has 
a 
duty 
to 
defend 
R&B 
Construction in Jeff Anderson's third-party action against it.  
Anderson's claim for contribution or indemnification impliedly 
rests on factual allegations that R&B Construction negligently 
performed its work on the residence.  The third-party complaint 
is 
separate 
and 
distinct 
from 
Smith's 
complaint 
against 
Anderson, which rests on facts evidencing a breach of contract 
or misrepresentation.  Reading the facts alleged in both the 
Smith and Jeff Anderson complaints liberally and drawing 
reasonable inferences in R&B Construction's favor leads to the 
following conclusion:  Smith's complaint alleges property damage 
(the leaking basement walls and clogged drain tiles), which was 
caused 
by 
an 
occurrence 
(the 
accidental 
result 
of 
R&B 
Construction's negligent conduct).   
¶122 Accordingly, West Bend Insurance has a duty to defend 
and the cause should be remanded to the circuit court for 
further proceedings not inconsistent with this decision.  
                                                 
67 Smith v. Anderson, No. 2015AP79, ¶17, unpublished slip 
op. (Wis. Ct. App. Dec. 22, 2015).   
No.  2015AP79.ssa 
 
43 
 
* * * * 
¶123 That's the opinion I think the court should have 
adopted, reversing the decision of the court of appeals and 
remanding 
the 
cause 
to 
the 
circuit 
court 
for 
further 
proceedings. 
¶124 I am authorized to state that Justice ANN WALSH 
BRADLEY joins this opinion.     
 
No.  2015AP79.ssa 
 
 
 
1