Court Opinion

ID: 9670310
Source: CourtListenerOpinion
Date Created: 2023-08-24 03:18:43.293665+00
Date Added: 2024-06-11T18:16:03.809392
License: Public Domain

CANE, P.J.
(dissenting). I dissent only from that portion of the majority's conclusion that the respondents (Towne) are entitled to recover their attorney fees incurred prior to notifying their insurer of the complaint and in pursuing their counterclaim. Therefore, I would remand the matter back to the trial court for redetermination of attorney fees.
Here, the Balestrieris filed their suit on October 10, 1991, alleging various improper business transactions committed by Towne concerning the Balestrieris' involvement in and subsequent ouster from promoting events at the Alpine Valley Music Theatre and the Riverside Theatre. In their complaint, the Balestrieris sought damages for their injuries allegedly suffered as a result of Towne's actions. This was not an action seeking immediate relief in court, such as an injunction or other proceeding requiring immediate response. Rather than notifying their insurer, Zurich Insurance, Towne immediately elected to retain their own counsel to represent them. Towne did not request Zurich to furnish them with legal counsel or a defense, nor did they seek authorization from Zurich for expenditures for attorney fees. Eventually, in a letter dated October 21,1991, Towne notified Zurich of Balestrieris' action.1 After Zurich declined to defend, Towne filed their answer and also asserted a counterclaim asserting sev*568eral causes of action including one for defamation and another dealing with the status of the shareholders.
The Zurich insurance policy requires Towne to give prompt notice of any suit. Also, the policy provides that "No insureds will, except at their own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent." Simply put, under the terms of the insurance contract, Zurich's duty to defend Towne did not arise until it was put on notice of the suit. Until it received that notice, Zurich had no duty to pay any expenses voluntarily incurred by Towne. It is not the court's function to rewrite the insurance contract between the parties. Although there was an ongoing dispute with the Balestrieris, there is nothing in the record to suggest that Towne did not have time to notify Zurich of the Balestrieris' complaint and request a defense. They simply elected to immediately proceed with their own counsel.
It is basic insurance law that an insurer's obligation to defend does not arise until the insured notifies the insurer of the complaint. See 7C Appleman Insurance Law and Practice, § 4682 (West Supp. 1994). Therefore, because Towne had sufficient time to notify Zurich of the complaint, but instead elected to retain their own legal counsel, I would hold that Towne is precluded from recovering any defense costs incurred prior to the tender of the defense to Zurich.
I also reject the majority's conclusion that Towne should be entitled to recover their legal costs incurred in prosecuting the counterclaim against the Bales-trieris; especially those legal expenses and costs incurred even after the Balestrieri lawsuit was voluntarily dismissed on January 21, 1992. Towne contends that the counterclaim was. a good "defense" strategy *569and its continuation was necessary to prevent the Balestrieris from refiling their lawsuit. However, Zurich's obligation under its policy with Towne is to "defend any suit" which is defined as: " 'Suit' means a civil proceeding in which damage because of 'bodily injury', 'property damage', 'personal injury' or 'advertising injury' to which this insurance applies are alleged ...
I agree with Zurich that its only obligation under the insurance policy with respect to its defense obligation is to defend suits filed against its insured. The policy does not obligate Zurich to pay legal costs for its insured to prosecute counterclaims. Nor is there an obligation to file suits on the insured's behalf as a buffer to "suits" which might be filed, against its insured.
Recently, our Supreme Court in Edgerton v. General Cas. Co., 184 Wis. 2d 750, 781, 517 N.W.2d 463, 477 (1994), held that there was no ambiguity in the term "suit" as used in insurance policies. The Edgerton court held that "suit" denotes court proceedings, not a functional equivalent. Id. It defined suit as "any proceeding by one person or persons against another or others in a court of law in which the plaintiff pursues, in such court, the remedy which the law affords him for the redress of an injury or the enforcement of a right, whether at law or equity." Id. at 774, 517 N.W.2d at 474 (quoting State v. P.G. Miron Constr. Co., 181 Wis. 2d 1045, 1053, 512 N.W.2d 499, 503 (1994) (emphasis in original)). As succinctly stated: "When there is no suit, there is no duty to defend." Id. at 781, 517 N.W.2d at 477.
Therefore, I would conclude that Zurich had no duty to pursue a counterclaim for its insured even though arguably, it might be a good defense strategy. It *570may be true that a good defense is a good offense, but that does not create an obligation beyond the terms of the insurance policy which is to defend against any suits filed against its insured. It is not to pursue counterclaims which by their very nature are for the benefit of the person pursuing the counterclaim, in this instance Towne.
I am also more emphatic that pursuing a counterclaim after the lawsuit against the insured has been dismissed is not included within Zurich's obligation to defend suits against it insured. Obviously, when there is no longer a suit, there is no longer a suit to defend. Here, the fear that the Balestrieris might file another lawsuit is irrelevant. As held in Edgerton, the threat of litigation or the fear that one might file suit does not trigger an insurer's duty to defend, especially in this case by pursuing a counterclaim.
Accordingly, I would reverse that portion of the judgment awarding attorney fees and costs incurred prior to Towne notifying Zurich of the Balestrieri lawsuit and those attorney fees and costs incurred in pursuing Towne's counterclaim. I would therefore remand the matter back to the trial court for redeter-mination of attorney fees.

 Although this letter arguably did not request Zurich to defend the Balestrieri complaint, I agree with the majority that it was sufficient to put Zurich on notice such that it had a duty to defend.