Court Opinion

ID: 9403104
Source: CourtListenerOpinion
Date Created: 2023-06-20 14:12:16.151964+00
Date Added: 2024-06-11T17:20:04.384305
License: Public Domain

2023 WI 51

                  SUPREME COURT         OF   WISCONSIN
CASE NO.:              2019AP1085 & 2019AP1086

COMPLETE TITLE:        5 Walworth, LLC,
                                 Plaintiff,
                            v.
                       Engerman Contracting, Inc.,
                                 Defendant,
                       Downes Swimming Pool Co., Inc. and The
                       Cincinnati Insurance Company,
                                 Defendants-Third-Party Plaintiffs,
                       West Bend Mutual Insurance Company and General
                       Casualty Company of Wisconsin,
                                 Defendants-Petitioners,
                            v.
                       Otto Jacobs Company, LLC,
                                 Third-Party Defendant-Appellant,
                       Acuity, A Mutual Insurance Company,
                                 Third-Party
                                 Defendant-Respondent-Petitioner.

                       5 Walworth, LLC,
                                 Plaintiff,
                            v.
                       Engerman Contracting, Inc.,
                                 Defendant-Appellant,
                       Downes Swimming Pool Co., Inc. and The
                       Cincinnati Insurance Company,
                                 Defendants-Third-Party Plaintiffs,
                       West Bend Mutual Insurance Company and General
                       Casualty Company of Wisconsin,
                                 Defendants-Respondents-Petitioners,
                            v.
                       Otto Jacobs Company, LLC,
                                 Third-Party Defendant,
                       Acuity, A Mutual Insurance Company,
                                 Third-Party Defendant-Petitioner.

                         REVIEW OF DECISION OF THE COURT OF APPEALS
                         Reported at 399 Wis. 2d 240, 963 N.W.2d 779
                             PDC No: 2021 WI App 51 - Published

OPINION FILED:         June 20, 2023
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:         September 12, 2022
SOURCE OF APPEAL:
   COURT:              Circuit
   COUNTY:             Walworth
   JUDGE:              Daniel Steven Johnson

JUSTICES:
HAGEDORN, J., delivered the majority opinion of the Court, in
which ANN WALSH BRADLEY, DALLET, and KAROFSKY, JJ., joined, and
in which ZIEGLER, C.J., joined except for ¶¶5, 7, 39-42, and 49.
ROGGENSACK, filed a concurring opinion. ZIEGLER, C.J., filed an
opinion concurring in part and dissenting in part, in which
REBECCA GRASSL BRADLEY, J., joined.

NOT PARTICIPATING:

ATTORNEYS:

       For       defendants-petitioners             and     defendants-respondents-
petitioners, there were briefs filed by Henry E. Koltz, Robert
F. Johnson, Douglas M. Raines, and Schmidt, Darling & Erwin,
Milwaukee, and von Briesen & Roper, S.C., Milwaukee. There was
an oral argument by Henry E. Koltz.

       For third-party defendant-respondent-petitioner and third-
party defendant-petitioner, there were briefs filed by Joseph M.
Mirabella        and   Simpson   &     Deardorff,         S.C.    There     was   an   oral
argument by Joseph M. Mirabella.

       For       third-party      defendant-appellant                and     third-party
defendant, there was a brief filed by Sheila L. Shadman Emerson,
Scott R. Halloin, and Halloin Law Group, S.C., Milwaukee. There
was an oral argument by Sheila L. Shadman Emerson.

       For defendant and defendant-appellant, there was a brief
filed       by   Thomas   G.   Gardiner    and      Gardiner,        Koch,    Weisberg    &
Wrona,       Lake    Geneva.   There    was    an    oral        argument    by   Michelle
LaGrota and Douglas M. Raines.

                                           2
                                                                   2023 WI 51
                                                           NOTICE
                                             This opinion is subject to further
                                             editing and modification.   The final
                                             version will appear in the bound
                                             volume of the official reports.
Nos.   2019AP1085 & 2019AP1086
(L.C. No.   2018CV319)

STATE OF WISCONSIN                       :            IN SUPREME COURT

5 Walworth, LLC,

            Plaintiff,

       v.

Engerman Contracting, Inc.,

            Defendant,

Downes Swimming Pool Co., Inc. and The
Cincinnati Insurance Company,

            Defendants-Third-Party Plaintiffs,
                                                                FILED
West Bend Mutual Insurance Company and General             JUN 20, 2023
Casualty Company of Wisconsin,
                                                              Sheila T. Reiff
                                                           Clerk of Supreme Court
            Defendants-Petitioners,

       v.

Otto Jacobs Company, LLC,

            Third-Party Defendant-Appellant,

Acuity, A Mutual Insurance Company,

            Third-Party
            Defendant-Respondent-Petitioner.

5 Walworth, LLC,

            Plaintiff,

       v.
Engerman Contracting, Inc.,

         Defendant-Appellant,

Downes Swimming Pool Co., Inc. and The
Cincinnati Insurance Company,

         Defendants-Third-Party Plaintiffs,

West Bend Mutual Insurance Company and General
Casualty Company of Wisconsin,

         Defendants-Respondents-Petitioners,

    v.

Otto Jacobs Company, LLC,

         Third-Party Defendant,

Acuity, A Mutual Insurance Company,

         Third-Party Defendant-Petitioner.

HAGEDORN, J., delivered the majority opinion of the Court, in
which ANN WALSH BRADLEY, DALLET, and KAROFSKY, JJ., joined, and
in which ZIEGLER, C.J., joined except for ¶¶5, 7, 39-42, and 49.
ROGGENSACK, filed a concurring opinion. ZIEGLER, C.J., filed an
opinion concurring in part and dissenting in part, in which
REBECCA GRASSL BRADLEY, J., joined.

    REVIEW of a decision of the Court of Appeals.    Affirmed.

    ¶1   BRIAN HAGEDORN, J.     This is an insurance dispute over

damages allegedly caused by the deficient construction of an in-

ground pool.   The pool cracked and caused vast amounts of water
to leak into the surrounding soil.       In the end, the homeowner
                                                        No.    2019AP1085 & 2019AP1086

had to demolish the entire pool structure and construct a new

one.    Two of the insurers in this case issued commercial general

liability (CGL) polices to the general contractor, and the other

issued a CGL policy to the supplier of the shotcrete pump mix

used to construct the pool.          In this suit by the homeowner, all

three   insurers    seek       summary    judgement        declaring     that    their

policies do not provide coverage to their insureds.

       ¶2   A   threshold      question       in   this    case    concerns     how   to

analyze whether there has been "property damage" caused by an

"occurrence" under the three CGL policies.                    The argument centers

around our decision in Wisconsin Pharmacal Co., LLC v. Nebraska

Cultures of California, Inc., where we stated that "property

damage" under a CGL policy requires damage to "other property"

and utilized the "integrated systems analysis"——a test derived

from tort law——to assess whether other property was damaged.

2016 WI 14, ¶28, 367 Wis. 2d 221, 876 N.W.2d 72.                         At a basic

level, the integrated systems analysis asks whether the product

is part of an integrated whole such that any damage can be
ascribed    only   to    the    product       itself,     rather    than   to    other

property.       Wausau    Tile,    Inc.       v.   Cnty.      Concrete   Corp.,       226

Wis. 2d 235, 249-50, 593 N.W.2d 445 (1999).                       The insurers here

argue we must first undertake this analysis to determine whether

any "property damage" occurred for purposes of determining an

initial grant of coverage under their policies.

       ¶3   We do not see it the same way.                    With the benefit of

hindsight, we conclude our approach in Pharmacal was a departure
from our well-established law.            The decision flatly contradicted
                                          2
                                                No.     2019AP1085 & 2019AP1086

prior cases without addressing those conflicts head on.                   See,

e.g., Am. Fam. Mut. Ins. Co. v. Am. Girl, Inc., 2004 WI 2, ¶¶6,

24, 35, 268 Wis. 2d 16, 673 N.W.2d 65.          Pharmacal wrongly stated

that "property damage" must be to "other property" for purposes

of determining an initial grant of coverage in a CGL policy.                It

then   improperly    imported   the    integrated     systems   analysis    to

determine    if   "other   property"   was   damaged.       Accordingly,    we

overrule these portions of Pharmacal, and affirm, as we have

repeatedly said, that our task in insurance coverage disputes is

to read the policy and give effect to the parties' agreement.

Therefore, we return to that contract-focused analysis here.

       ¶4   General Casualty Company of Wisconsin, the insurer for

general contractor Engerman Contracting, Inc., contends that its

policy does not provide an initial grant of coverage because the

issues related to the pool did not constitute "property damage"

caused by an "occurrence" as those terms are defined in the

policy.     We disagree.    Reviewing the record before us on summary

judgment, we conclude that a trier of fact could conclude that
the water leakage and consequent cracks in the pool and damage

to the surrounding soil constituted property damage caused by an

occurrence.       Accordingly, General Casualty is not entitled to

summary judgment.

       ¶5   West Bend Mutual Insurance Company, which also insures

Engerman, asserts that its policy does not provide an initial

grant of coverage for two reasons.           First, it likewise contends

there was no "property damage" caused by an "occurrence" under
its policy.       In this regard, West Bend's policy is materially
                                       3
                                                        No.      2019AP1085 & 2019AP1086

identical to General Casualty's policy, and West Bend is not

entitled     to   summary    judgment      on   this       argument     for    the       same

reasons.      Alternatively, West Bend claims Engerman knew that the

property     damage      occurred    before     the    policy     period      began       and

therefore the policy does not provide coverage.                             We disagree.

The record before us does not conclusively establish that the

property damage here was a continuation, change, or resumption

of   the    damage    Engerman      knew   about      before     the    policy      began.

Therefore, West Bend is not entitled to summary judgment.

      ¶6      Finally,     Acuity,    A    Mutual     Insurance        Company      is    the

insurer for Otto Jacobs Company, the entity that provided the

shotcrete used to construct the floor and walls of the pool.

Acuity argues that its policy does not provide an initial grant

of coverage and that, even if there is an initial grant of

coverage, the "your product" exclusion precludes coverage.                                We

see it differently.          Acuity's policy likewise provides coverage

when "property damage" is caused by an "occurrence."                             If Otto

Jacobs     supplied      defective    shotcrete,       a      trier    of    fact    could
determine that it caused the water leakage——an occurrence——and

damaged the surrounding soil and pool structure.                            Moreover, a

trier of fact could conclude based on this record that the "your

product" exclusion in Acuity's policy does not apply here when

the property damage is to the surrounding soil and pool complex—

—more      than   just    Otto   Jacobs'       product      or    arising      from      the

product.      Therefore, Acuity is not entitled to summary judgment.

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                                                         No.        2019AP1085 & 2019AP1086

       ¶7      Accordingly, we affirm the decision of the court of

appeals       and   remand      back    to   the   circuit          court    for    further

proceedings.

                                   I.    BACKGROUND

       ¶8      5 Walworth LLC owns lakeshore property in Lake Geneva

and    hired    Engerman     to    serve     as    the    general          contractor    for

construction of an in-ground swimming pool complex.                                Engerman

subcontracted with Downes Swimming Pool Co., Inc. to construct

the    pool    complex,      which      included    both        a    main    pool     and   a

children's pool.         Otto Jacobs supplied Downes with a ready-mixed

concrete       called    shotcrete       commonly        used       in     swimming     pool

construction.         Construction began in June 2012 and finished that

August.

       ¶9      Shortly after the contractors finished the project, 5

Walworth noticed a leak in the main pool and in the children's

pool.       The leaking persisted in the summers of 2013, 2014, and

2015, with Downes attempting to repair the leaks each year.                                 In
2015, 5 Walworth commissioned a report from engineering firm

Wiss,   Janney,       Elstner     Associates,       Inc.       (WJE).        WJE's    final

report, which is part of the summary judgment record, concluded

that    the    pool     walls     cracked    because       of       less    than    optimal

installation, moist conditions due to significant water leakage,

and the placement of steel reinforcing bars.                         It determined that

the cracking would continue, with either new cracks forming or

existing cracks worsening.               While the report took samples from
the main pool, WJE concluded that the children's pool faced the
                                             5
                                                            No.       2019AP1085 & 2019AP1086

same probable cause of cracking.                     The report also mentioned the

findings    of     soil     reports       from       neighboring         properties       which

indicated that water existed at levels above the normal water

table.      The report recommended removing unsuitable soils from

one of the neighboring properties.                     Ultimately, 5 Walworth hired

a new contractor to demolish the old pool and construct a new

one, which was completed in October 2017.

      ¶10   In 2018, six years after the initial construction, 5

Walworth    sought      damages         for   demolition        of     the     old    pool   and

construction       of   a   new    one.         It    brought     a     complaint      against

subcontractor       Downes        and     its       insurer,      and    against       general

contractor       Engerman    and        its   insurers——West            Bend    and    General

Casualty.        The complaint alleged negligence against Downes, and

breach      of     contract,            breach        of     implied           warranty      of

merchantability and fitness, negligence, and violation of Wis.

Stat. § 100.18(1) (2021-22) against Engerman.1                                Downes filed a

third-party complaint against shotcrete provider Otto Jacobs and

its   insurer      Acuity,    alleging           Otto      Jacobs       was    negligent     in
providing Downes inferior shotcrete.2                        Engerman and West Bend

then brought a cross-claim against Downes (and its insurer) and

Otto Jacobs for contribution and/or indemnification.

      1On appeal, Engerman does not challenge the circuit court's
ruling that there was no coverage arising out of 5 Walworth's
Wis. Stat. § 100.18 claim. Accordingly, we do not address this.

     All subsequent references to the Wisconsin Statutes are to
the 2021-22 version.
      2Downes did not originally name Acuity in this complaint;
Acuity intervened.

                                                6
                                                          No.     2019AP1085 & 2019AP1086

      ¶11     General     Casualty,       West    Bend,    and     Acuity       tendered    a

defense     of    their    respective       insureds.            They     all     moved    to

bifurcate        and   litigate     coverage.         Each        moved     for    summary

judgment and requested declarations that they did not have a

duty to indemnify or further defend under their policies.                             With

respect to General Casualty and West Bend's motions, the circuit

court3 concluded that there was no property damage caused by an

occurrence——only faulty workmanship——and therefore the insurers

owed no coverage.           And when analyzing Acuity's motion against

shotcrete provider Otto Jacobs, the court applied the integrated

systems analysis we utilized in Pharmacal to conclude there was

no property damage caused by an occurrence                             and therefore no

coverage.         Accordingly,      the    circuit    court       granted       all   three

motions for summary judgment and dismissed the three insurers

from the action.

      ¶12     The two insureds, Engerman and Otto Jacobs, appealed

the   grant      of    summary    judgment       against    them.         The     court    of

appeals consolidated the appeals and reversed.                          5 Walworth, LLC
v. Engerman Contracting, Inc., 2021 WI App 51, 399 Wis. 2d 240,

963   N.W.2d 779.           All    three        insurers        then    filed      separate

petitions for review which we granted.

      3The Honorable Daniel S. Johnson of the Walworth County
Circuit Court presided.

                                            7
                                                              No.    2019AP1085 & 2019AP1086

                                      II.     ANALYSIS

       ¶13    This    case     comes        before    us      on    motions    for    summary

judgment      by    the     insurers        seeking      a    declaration          that    their

policies do not provide coverage to their insureds.                                 All three

insurers tendered a defense, so we are analyzing if they are

entitled to summary judgment on the question of coverage based

on    the    full    record,       not    just     the     complaint.         See     Est.     of

Sustache      v.    Am.     Fam.     Mut.    Ins.     Co.,     2008    WI 87,        ¶29,      311

Wis. 2d 548, 751 N.W.2d 845.                   "Summary judgment is appropriate

when there is no genuine issue of material fact and 'the moving

party is entitled to judgment as a matter of law.'"                                        Quick

Charge Kiosk LLC v. Kaul, 2020 WI 54, ¶9, 392 Wis. 2d 35, 944

N.W.2d 598 (quoting Wis. Stat. § 802.08(2)).                           We review motions

for   summary       judgment       independently,          without     deference          to   the

lower courts.         Id.     The legal issues in this case require us to

interpret the terms of three insurance contracts.                                   This also

presents questions of law we review independently.                                  Am. Girl,

268 Wis. 2d 16, ¶23.
       ¶14    We     begin     our       analysis        by    clearing       up    confusion

engendered by our decision in Pharmacal regarding how to analyze

whether a CGL policy provides an initial grant of coverage.                                    We

then apply the proper framework to this case based on the facts

presented in the summary judgment record, examining the three

policies in turn.

                                               8
                                                   No.     2019AP1085 & 2019AP1086

                                A.    Pharmacal

      ¶15    Before    we   explain   Pharmacal's        errors,   we    begin    by

outlining our standard approach to these kinds of cases.                         CGL

policies, like those here, are a particular type of insurance

contract that protect "the insured against liability for damages

the insured's negligence causes to third parties."                      Wis. Label

Corp. v. Northbrook Prop. & Cas. Ins. Co., 2000 WI 26, ¶27, 233

Wis. 2d 314, 607 N.W.2d 276.          This kind of policy is designed to

insure against "the possibility that the goods, products or work

of   the    insured,   once   relinquished    or    completed,      will     cause

bodily injury or damage to property other than to the product or

completed work itself, and for which the insured may be found

liable."     Id. (quoting another source).

      ¶16    When analyzing whether an insurance policy provides

coverage, we examine the terms of the policy and compare it to

the facts in the record.         See, e.g., Am. Girl, 268 Wis. 2d 16,

¶32 ("[W]hether the insuring agreement confers coverage depends

upon whether there has been 'property damage' resulting from an
'occurrence' within the meaning of the CGL policy language.").4

      4See also Day v. Allstate Indem. Co., 2011 WI 24, ¶36, 332
Wis. 2d 571, 798 N.W.2d 199 (noting that a claim fell within a
policy's initial grant of coverage because there was bodily
injury); Everson v. Lorenz, 2005 WI 51, ¶27, 280 Wis. 2d 1, 695
N.W.2d 298 (explaining that the complaint did not allege
property damage and therefore did not trigger insurance
coverage); Wis. Label Corp. v. Northbrook Prop. & Cas. Ins. Co.,
2000 WI 26, ¶¶28-32, 233 Wis. 2d 314, 607 N.W.2d 276 (concluding
the facts in the record did not satisfy the policy definition of
property damage); Acuity v. Soc'y Ins., 2012 WI App 13, ¶15, 339
Wis. 2d 217, 810 N.W.2d 812 (stating "[w]e begin with the policy
language and then examine the factual pleadings to determine
whether there is an initial grant of coverage."); United Co-op.
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                                                               No.     2019AP1085 & 2019AP1086

We conduct this analysis in three stages.                            Id., ¶24.         First, we

determine if the policy "makes an initial grant of coverage."

Id.    If so, we "examine the various exclusions to see whether

any    of    them   preclude       coverage."            Id.         Finally,       should      any

exclusion apply, we "look to see whether any exception to that

exclusion reinstates coverage."                   Id.

       ¶17    In American Girl, this court was faced with several

issues      germane     to   the    issues        before       us     today.        By    way   of

background, American Girl involved "a construction project gone

awry."       Id., ¶3.      A soil engineer had given faulty advice to the

general      contractor,          leading    to     problematic              soil   settlement

underneath the completed warehouse.                      Id.         This then damaged the

building's      foundation,         which    eventually              led    to   the     building

being declared unsafe and torn down.                     Id., ¶¶3, 5.

       ¶18    The CGL insurer in that case argued that the economic

loss doctrine should bar coverage under the CGL policy.                                      Id.,

¶34.     Not so, we concluded.              Id., ¶¶34-36.                  "The economic loss

doctrine operates to restrict contracting parties to contract
rather      than    tort     remedies       for    recovery           of     economic      losses

associated with the contract relationship."                            Id., ¶35.         It is a

remedies      principle       applicable      in        tort    cases,        and   "does       not

determine      whether       an   insurance       policy        covers       a   claim,     which

depends instead upon the policy language."                            Id.     Thus, while the

economic loss doctrine may preclude recovery in tort, it should

v. Frontier FS Co-op., 2007 WI App 197, ¶13, 304 Wis. 2d 750,
738 N.W.2d 578 (indicating that the record established an
occurrence as that term is defined in the policy).

                                             10
                                                         No.   2019AP1085 & 2019AP1086

not be used to ascertain if a CGL policy——a contract——provides

coverage.     Id., ¶36.

       ¶19   Turning       then    to   the    contract    language,   we    examined

whether there was an initial grant of coverage, which (as is the

case here) required an inquiry into whether an "occurrence,"

defined as an "accident," caused "property damage."                         Id., ¶37.

The insurer argued that the defective work could not constitute

an "occurrence" because CGL policies are not meant to cover an

insured's defective work or product.                     Id., ¶39.     That general

principle is correct, we explained, but not because it is not an

"occurrence"       under    the     policy.        Id.    Rather,    the    reason   an

insured's defective work or product is generally not covered by

a CGL policy is due to the business risk exclusions in the CGL

policy.      Id.    This exclusions analysis only comes into play in

the second stage after a determination of an initial grant of

coverage——that an "occurrence" caused "property damage."                         Id.,

¶47.    As such, the insurer incorrectly tried to incorporate the

exclusions     analysis      into       the   initial     coverage   determination.
Id.

       ¶20   After clarifying these issues, we concluded there was

an accident, i.e., an occurrence, which caused property damage,

thus providing an initial grant of coverage.                    Id., ¶49.     We then

considered the exclusions——step two of the analysis——along with

other issues in the case, the details of which are unnecessary

here.     Id., ¶¶50-86.           With this background in place, we turn to

Pharmacal.

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                                                              No.     2019AP1085 & 2019AP1086

       ¶21    In Pharmacal, the supplier of a supplement tablet sued

two companies that provided an improper species of bacteria.

Pharmacal, 367 Wis. 2d 221, ¶¶4-7.                         The incorrect bacteria was

blended      with    the        other    ingredients         of      the   supplement       and

compressed into tablet form; none of the ingredients could be

separated.          Id.,    ¶5.         We    then    considered       whether      there    was

"property damage" caused by an "occurrence" under the terms of

the CGL policies for the insurers of the companies that supplied

the wrong bacteria.              Id., ¶¶8-9, 23.            Our analysis went wayward

in two respects.

       ¶22    First,       in    conducting      the       initial    grant    of    coverage

analysis,      Pharmacal          reasoned       that       to      constitute      "property

damage"      under   the        CGL    policy,       the   damage     must    be    to    "other

property."       Id., ¶¶24-27.                The policy language in Pharmacal,

however, made no mention of an "other property" requirement.

Like   the    three    policies          at    issue       here,    property       damage    was

defined as, "Physical injury to tangible property, including all

resulting loss of use of that property."                         Id., ¶23.
       ¶23    Rather than relying on the language in the CGL policy,

Pharmacal supported this "other property" requirement by citing

two prior opinions:              Wisconsin Label Corp., 233 Wis. 2d 314 and

Vogel v. Russo, 2000 WI 85, 236 Wis. 2d 504, 613 N.W.2d 177.

Both   were     discussed         in    American       Girl,       however,    and       neither

contains such a requirement as part of the initial grant of

coverage analysis.              The portions cited in Pharmacal were not in

the initial grant of coverage discussions; they were general
comments on the purpose of a CGL policy.                            See Wis. Label Corp.,
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                                                                    No.        2019AP1085 & 2019AP1086

233 Wis. 2d 314, ¶27; Vogel, 236 Wis. 2d 504, ¶17.                                              The cited

language simply explains that the risk insured in a CGL policy

includes       "damage          to    property          other      than    to        the   product        or

completed work itself."                     Wis. Label Corp., 233 Wis. 2d 314, ¶27

(quoting another source).                         But as        American Girl              explains in

depth, this is true because of the business risk exclusions, not

the initial coverage determination.                             See 268 Wis. 2d 16, ¶¶39,

43   (discussing         Vogel,             236   Wis. 2d 504).                 In     effect,         then,

Pharmacal incorporated an "other property" analysis that may be

relevant to the policy's business exclusions (stage two) into

the determination of whether an "occurrence" caused "property

damage" (stage one).                  See 367 Wis. 2d 221, ¶¶24-27.

      ¶24      Pharmacal's             second          error       stems        from       its     first.

Because the court thought it must analyze whether there was

damage    to    "other          property"          when      analyzing          whether         "property

damage"     occurred,            Pharmacal         enlisted         the        assistance         of     the

integrated       systems             analysis.              Id.,        ¶27-28.            By     way     of

background,       for       a    tort        claim      to     survive         the     economic         loss
doctrine,       the     damage          alleged         must       be     to     other      property——

something other than a loss to the defective product itself.

Wausau    Tile,       226       Wis. 2d at         247-48.           The       integrated         systems

analysis is used to ascertain whether damage to a defective

component of an integrated system constitutes damage to other

property.         Id. at             249.         In    Wausau      Tile,        we     embraced         the

integrated       system          analysis         from       the    Restatement            (Third)        of

Torts, which states in part:

                                                       13
                                                          No.     2019AP1085 & 2019AP1086

       What constitutes harm to other property rather than
       harm to the product itself may be difficult to
       determine.   A product that nondangerously fails to
       function due to a product defect has clearly caused
       harm only to itself. A product that fails to function
       and causes harm to surrounding property has clearly
       caused harm to other property.        However, when a
       component part of a machine or a system destroys the
       rest of the machine or system, the characterization
       process becomes more difficult.    When the product or
       system is deemed to be an integrated whole, courts
       treat such damage as harm to the product itself.
Id. at 249 (quoting Restatement (Third) of Torts § 21 cmt. e

(1997)).      Again, the purpose of this test is to ascertain if a

party may pursue tort remedies, or whether the economic loss

doctrine      bars     them,    leaving      the    plaintiff          to    pursue    only

contract remedies.

       ¶25   So     rather     than    focus      its   analysis        on    the     policy

language, Pharmacal took this integrated systems analysis from

tort   law    and    held    that     such   an    analysis       is   "necessary      when

evaluating coverage under a CGL policy."                        367 Wis. 2d 221, ¶28.

Pharmacal painted with a broad brush and seemed to incorporate

the    integrated      systems      analysis       into    all     determinations         of
whether "property damage" has occurred under the terms of a CGL

policy.      See id.

       ¶26   This move was problematic for several reasons.                               As

we've noted, it runs headlong into the fundamental principle

running through our insurance cases that policy interpretation

should focus on the language of the insurance policy.                                   See,

e.g., Am. Girl, 268 Wis. 2d 16, ¶¶6, 32, 35; supra ¶16 n.4.                              And

relatedly, this broad directive flatly contradicts our holding
in American Girl that we resolve whether an insurance policy

                                             14
                                                            No.    2019AP1085 & 2019AP1086

covers a claim based on the policy language and without resort

to tort principles such as the economic loss doctrine, and by

implication, the integrated systems analysis used to assess its

application.         Compare Am. Girl, 268 Wis. 2d 16, ¶¶6, 34-35 with

Pharmacal, 367 Wis. 2d 221, ¶¶28, 34-35.

      ¶27     This    is    important        because       economic        loss   doctrine

principles     are     aimed    at    keeping       tort     law     and    contract    law

separate.       Once again, the "economic loss doctrine generally

operates to confine contracting parties to contract rather than

tort remedies for recovery of purely economic losses associated

with the contract relationship."                   Am. Girl, 268 Wis. 2d 16, ¶6.

The   economic         loss     doctrine           maintains         "the     fundamental

distinction between tort law and contract law."                          Hinrichs v. DOW

Chemical Co., 2020 WI 2, ¶29, 389 Wis. 2d 669, 937 N.W.2d 37

(quoting    another        source).      By       keeping    these       purely   economic

losses in the realm of contract, commercial parties are free to

assess the economic risks and contract accordingly.                               Id.   The

commercial     purchaser       is     empowered       to     "assume,       allocate,    or
insure against that risk."             Id.    (quoting another source).

      ¶28     This is why we made clear in American Girl that the

economic loss doctrine should not be used to ascertain if a CGL

policy (a contract) provides coverage.                        We followed the same

approach in Wausau Tile, where even though the tort claims were

barred   by    the     economic       loss    doctrine,           that   conclusion     was

separate from whether the insurer had a duty to defend based on

the language of the insurance policy.                      226 Wis. 2d at 259, 265-
68.
                                             15
                                                              No.    2019AP1085 & 2019AP1086

       ¶29    In addition,       Pharmacal's conclusion was an outlier,

and raises further doctrinal anomalies.                        As the Seventh Circuit

recognized      in    Haley    v.    Kolbe     &    Kolbe       Millwork       Co.,    "[t]he

economic-loss doctrine generally does not apply to insurance-

coverage disputes."           866 F.3d 824, 828 (7th Cir. 2017).                      Yet it

recognized that we did exactly that in Pharmacal, while at the

same time affirming our traditional focus on the policy language

in other parts of the opinion.                Id. at 828-29.             In the end, the

Seventh Circuit seemingly concluded that Pharmacal was not as

broad as its language suggests, and determined the integrated-

systems analysis was not appropriate in an insurance dispute

where the underlying claim concerned leaky windows.                               Id.      The

court of appeals in the decision we are reviewing similarly

struggled      with    how     to    square        Pharmacal's         adoption       of   the

integrated      systems       analysis      with        our     standard       approach    of

applying the facts to the terms of the policy.                          5 Walworth, LLC,

399 Wis. 2d 240, ¶37.               It could not be, the court of appeals

reasoned, that Pharmacal should be read "as importing language
that does not exist into a policy."                     Id.

       ¶30    In this case, the insurers ask us to enforce what we

said   in     Pharmacal——that         the    integrated             systems    analysis     is

"necessary when evaluating coverage under a CGL policy."                                   367

Wis. 2d 221, ¶28.         The insureds, on the other hand, do not ask

us to overrule Pharmacal.              They instead ask that we limit its

application——much like the Seventh Circuit did in Haley and the

court of appeals did below.                 But while Haley and the court of
appeals      made    admirable      attempts       to    reconcile       our    conflicting
                                            16
                                                            No.    2019AP1085 & 2019AP1086

statements, this case illustrates inconsistencies that cannot be

remedied by affirming both approaches.                            We are reluctant to

reject the holding of a case so recently decided, and to do so

without being asked by the parties.                   But as we see it, this case

forces us to choose whether to remain consistent with our prior

cases, or follow the new course charted by Pharmacal.                               In the

end, we conclude we must bring consistency and clarity to this

area of law that is now muddled by Pharmacal's missteps.

    ¶31       Therefore,          we        overrule          Pharmacal's          holding

incorporating      the     integrated        systems      analysis       into    insurance

policy    disputes.           We       further       reject        and    overrule        its

incorporation of an "other property" analysis into the initial

determination      of    whether       an    occurrence         has   caused     "property

damage" under an insurance policy.5                   The proper approach is the

one we laid out in American Girl and multiple other cases:                                our

task is to interpret and apply the language of the insurance

policy.       In   doing    so,    we       follow    the    three-step         process    we

outlined above.         We first examine if the policy makes an initial
grant    of   coverage,     then       analyze       if   any     exclusions      preclude

coverage, and finally, review if any exceptions to a particular

exclusion reinstate coverage.                Am. Girl, 268 Wis. 2d 16, ¶24.

    5  While we overrule Pharmacal's improper incorporation of
the integrated systems analysis into all CGL claims and its
errant focus on damage to "other property" when analyzing if
there is "property damage," we do not address the decision's
analysis on other matters.

                                             17
                                                          No.   2019AP1085 & 2019AP1086

      ¶32    These     clarifications         in    place,       we     turn     to     the

arguments by each of the three insurers that their policies do

not provide coverage and they are entitled to summary judgment.

                        B.    General Casualty's Policy

      ¶33    General Casualty issued a CGL policy to Engerman, the

general contractor.           Engerman faces claims arising out of its

allegedly     faulty    installation         and    construction        of   the      pool.

General Casualty moved for summary judgment and contends that

its policy does not provide an initial grant of coverage to

Engerman     because     "property      damage"       was       not     caused     by    an

"occurrence."

      ¶34    General Casualty's policy provides that coverage is

triggered    by     "property      damage"    if    the    "'property        damage'     is

caused by an 'occurrence.'"            "Property damage" and "occurrence"

are both defined terms in the policy.                       "Property damage," as

relevant here, means "[p]hysical injury to tangible property,

including all resulting loss of use of that property."                                  And
"'Occurrence'        means    an     accident,       including          continuous       or

repeated     exposure    to     substantially        the    same      general    harmful

conditions."        "Accident" is not a defined term in the policy,

but Wisconsin courts have interpreted identical policy language

many times.       Generally, an "accident" is "an event or condition

occurring by chance or arising from unknown or remote causes,"

or   "an    event    which    takes    place       without      one's    foresight      or

expectation."        Am. Girl, 268 Wis. 2d 16, ¶37 (quoting Webster's

                                         18
                                                          No.     2019AP1085 & 2019AP1086

Third New Int'l Dictionary of the English Language 11 (2002);

Black's Law Dictionary 15 (7th ed. 1999)).

       ¶35   When we compare these policy terms to the record, we

conclude a jury could find that property damage caused by an

occurrence     existed.          We       observe      and      reiterate    the     basic

principle "that while faulty workmanship is not an 'occurrence,'

faulty workmanship may cause an 'occurrence.'"                        Acuity v. Soc'y

Ins., 2012 WI App 13, ¶24, 339 Wis. 2d 217, 810 N.W.2d 812.                              For

example, we held in American Girl that faulty workmanship caused

soil    to   settle.       268   Wis. 2d 16,        ¶5.         The   settling     was    an

accident,     and    therefore       an    occurrence,       that     caused     property

damage.      Id.    The court of appeals reasoned similarly in a case

where     faulty    work    by   a        subcontractor         resulted    in     leaking

windows.      Kalchthaler v. Keller Constr. Co., 224 Wis. 2d 387,

391-92, 591 N.W.2d 169 (Ct. App. 1999).                         The court of appeals

explained that an initial grant of coverage was present because

the window leaking was an accident, and thus an occurrence, that

caused property damage.          Id. at 397.           The court of appeals again
utilized the same approach in a case where faulty excavation

techniques (faulty workmanship) accidentally caused soil erosion

(an    occurrence)     which     led       part   of    a    building       to   collapse

(property damage).          Acuity, 339 Wis. 2d 217, ¶17.                    The lesson

from our case law examining similar policy language is this:

faulty workmanship is not an occurrence, but faulty workmanship

can lead to an occurrence that causes property damage.

       ¶36   Turning to the summary judgment record, the WJE report
concluded that cracks in the main pool occurred, and therefore
                                            19
                                                                     No.     2019AP1085 & 2019AP1086

water leaked into the surrounding soil.                                    This was the result,

according to the report, of less-than-optimal installation of

the    shotcrete            and    poor    placement          of    steel        reinforcing       bars,

among other reasons.                    The improper installation of the shotcrete

and the incorrect placement of the steel reinforcing bars are

not enough on their own to constitute an occurrence; if proven,

that       is    faulty         workmanship.        But        the       record     can    support      a

conclusion that this faulty work caused the pool to crack and

leak,      and        those      cracks    became      worse        as     the    pool    leaked      and

destabilized the surrounding soil.                                 The cracks, leakage, and

soil        damage              could     constitute           accidents——unexpected                  and

unforeseen events——caused by improper installation.                                        And these

cracks          and       the    damage    to    the     surrounding              soil    also     could

constitute             physical         injuries       to      the         homeowner's       tangible

property——i.e., property damage as defined by the policy.6                                             In

the     end,          5    Walworth       claims        the        whole     pool        complex      was

compromised and needed to be rebuilt.                                    Therefore, a trier of

fact could conclude that General Casualty's policy provides an
initial         grant       of     coverage      because       there        is     property      damage

caused       by       an    occurrence      as    those        terms        are    defined       in   the

policy.          As such, General Casualty is not entitled to summary

       The WJE report states that while the cracks were initially
       6

caused by less-than-optimal installation of the shotcrete and
poor placement of the steel reinforcing bars, among other
reasons, they continued to worsen in part due to the
destabilization of the soil.       Thus, while the cracks were
initially an occurrence, their continued growth——caused at least
in part by the water in the surrounding soil——could constitute
property damage.

                                                   20
                                                            No.        2019AP1085 & 2019AP1086

judgment.        And because it does not argue at this stage that any

of its policy's exclusions preclude coverage, we end our inquiry

here.

                               C.    West Bend's Policy

      ¶37    West Bend also issued a CGL policy to Engerman.                                 It

asserts the policy does not provide an initial grant of coverage

for two reasons:           (1) there was no "property damage" caused by

an "occurrence" and (2) Engerman knew about the property damage

before the policy issued.

      ¶38    With respect to the first argument, West Bend's policy

language granting coverage when "property damage" is caused by

an   "occurrence"         is   identical        to    General          Casualty's    policy.

Furthermore,       both    policies       were       issued       to    the   same   insured

(Engerman) defending against the same claims; West Bend's policy

applies     to    the   facts       in   the   same       way.         Therefore,    for    the

reasons explained above, a factfinder could conclude based on

the facts in this summary judgment record that "property damage"
was caused by an "occurrence."                      West Bend is not entitled to

summary judgment on this argument.

      ¶39    West Bend's second argument fares no better.                                  West

Bend's policy only insures "property damage" that "occurs during

the policy period."             The policy provides that if an insured or

authorized       employee      "knew,     prior      to    the     policy     period,      that

the . . . 'property            damage'     occurred,        then        any   continuation,

change or resumption of such . . . 'property damage' during or
after the policy period will be deemed to have been known prior
                                               21
                                                                No.     2019AP1085 & 2019AP1086

to the policy period."                     So, if Engerman knew of the property

damage before the policy issued, West Bend's policy does not

provide coverage.

       ¶40       West Bend's first policy issued to Engerman commenced

on October 27, 2013.                But West Bend argues Engerman knew of the

property damage well before then.                          After the pool complex was

completed         in    August      2012,     5   Walworth       noticed          a    leak    almost

immediately.            John Engerman, the President and CEO of Engerman

and    an    insured      under       West    Bend's       policy,         sent       and    received

emails      in    August       of   2012     that      indicate       he    visited         the    pool

complex        and      noted       that     subcontractor            Downes          replaced      the

stonework that was near the children's pool——the believed source

of the leak.            The leak persisted into May of 2013, and Downes

investigated the issue the next month.                          Emails in June of 2013,

that John Engerman was copied on in August 2013, reveal that

Engerman         knew    the    pool       complex,       and   the     children's           pool    in

particular, was still leaking.                         These emails state that, "The

auto fill is running 24/7 and cannot keep up with the leak" and
that, "Clearly it is a LEAK."                          West Bend contends these facts

clearly show that Engerman knew about the property damage at

issue in this case before its policy began.

       ¶41       Engerman       interprets          the     record         differently.              It

contends this issue should be remanded because John Engerman

testified in his deposition that he believed the leaking in both

2012     and      2013     referred         to    waterproofing             issues          with    the

stonework near the children's pool——not the property damage at
issue       here.          Engerman         further        maintains         the        record       is
                                                  22
                                                               No.    2019AP1085 & 2019AP1086

insufficient on whether the leaking that occurred in 2012 and

2013 gave rise to the property damage at issue in this case.

     ¶42    We   conclude      the      record          is   insufficient       for   us    to

determine, as a matter of law, that Engerman knew about the

property damage alleged here prior to the commencement of its

policy   with    West    Bend.         West    Bend's          argument      relies   on    the

inference    that       the   property         damage          in     this    case    was     a

"continuation, change or resumption" of the damage Engerman knew

about in 2012 and 2013.              But the record does not conclusively

establish this link.          The WJE report does not connect the damage

Engerman knew of in 2012 and 2013 to the later cracks in the

pool and damage to the surrounding soil.                               And John Engerman

testified that he did not know of these specific problems until

2016.    On summary judgment, we draw reasonable inferences in the

light most favorable to the non-moving party.                                Burbank Grease

Servs., LLC v. Sokolowski, 2006 WI 103, ¶40, 294 Wis. 2d 274,

717 N.W.2d 781.         Here, that's Engerman.                   So, while West Bend's

arguments might win the day before a jury, West Bend is not
entitled to summary judgment on the theory that its policy does

not provide an initial grant of coverage.7

                              D.     Acuity's Policy

     ¶43    Acuity      issued     a    CGL        policy        to    Otto    Jacobs,      the

shotcrete   supplier.         According            to    the    third-party      complaint,

     7 West Bend does not argue at this stage that any of the
policy's exclusions preclude coverage.    Its two arguments are
focused solely on the initial grant of coverage.

                                              23
                                                       No.    2019AP1085 & 2019AP1086

Otto    Jacobs     negligently       provided       subcontractor     Downes        with

inferior shotcrete to construct the pool.                     Acuity argues that

its policy does not provide an initial grant of coverage because

there was no "property damage" caused by an "occurrence."                           And

even if it does, Acuity asserts the policy's "your product"

exclusion precludes coverage.             Neither argument prevails at this

stage and on this record.

       ¶44   Acuity's policy, like those of General Casualty and

West Bend, provides an initial grant of coverage when "property

damage" "is caused by an occurrence."                    And it has identical

definitions       of    "property    damage"     and    "occurrence"      to    those

previously discussed.            The analysis is slightly different under

this policy, however, because of the nature of the claim against

Otto    Jacobs.         Namely,     the   allegation     is    that     the    product

supplied by Otto Jacobs for use in the construction project——the

shotcrete——was defective.

       ¶45   Acuity's      arguments      seeking    summary    judgment       largely

ask us to see the allegedly defective shotcrete as part of an
integrated    system,      the    pool    complex.      We    decline    to    do   so.

Rather, the proper analysis based on the language of the policy

is whether the defective shotcrete (assuming this is proven) led

to an accident, which then caused property damage.                       As we have

discussed, the water leakage, among other things, is sufficient

to constitute an accident.                And this led to cracking in the

pool,   further        leakage,   damage    to   the    surrounding       soil,     and

eventually, replacement of the entire pool complex.                            If the
shotcrete was defective, a jury could find that it led to an
                                          24
                                                      No.   2019AP1085 & 2019AP1086

accident (water leakage at the very least) that caused property

damage.       Therefore, at this stage of the proceedings, Acuity's

policy does not preclude an initial grant of coverage to Otto

Jacobs.

      ¶46     That leads us to Acuity's alternative argument that

its "your product" exclusion precludes coverage.                    This exclusion

bars coverage to "Property damage to your product arising out of

it or any part of it."            We already addressed the definition of

"property damage" above.             And relevant here, "'Your product'

means:       a. Any goods or products, other than real property,

manufactured, sold, handled, distributed or disposed of by:                        (1)

You."

      ¶47     Here, Otto Jacobs' product is the shotcrete.                   Acuity

argues      that   the    "your   product"     exclusion    applies      because    of

damage to the shotcrete, and damages necessarily incurred to

repair or replace the allegedly defective shotcrete.                       However,

the   record       does   not   clearly   establish     this   as    a   matter    of

undisputed fact; significant evidence cuts the other way.                          The
WJE report stated the cracks in the shotcrete arose not from a

deficiency in Otto Jacob's product, but from installation errors

(by     a   different      company   with      a   different   insurer),      moist

conditions in the soil, and placement of the steel reinforcing

bars.       Therefore, Acuity is not entitled to summary judgment on

the theory that its "your product" exclusion bars coverage.

                                          25
                                                         No.   2019AP1085 & 2019AP1086

                                  III.    CONCLUSION

      ¶48   Resolution       of    the     parties'    dispute     requires    us    to

overrule    portions    of    our        decision   in    Pharmacal.       The      main

takeaway is this:       When analyzing if there is "property damage"

under a CGL policy in the initial grant of coverage stage, we do

not employ the integrated systems analysis nor do we limit our

review of property damage to damage to "other property."                             We

apply the terms of the policy.

      ¶49   Doing so here, we affirm the decision of the court of

appeals.     With respect to General Casualty's policy, we conclude

it is not entitled to summary judgment because a trier of fact

could     conclude    there       is     "property       damage"    caused    by     an

"occurrence" as those terms are defined in its policy.                        For the

same reasons, West Bend is not entitled to summary judgment on

its     argument   there     is    no      "property     damage"    caused     by     an

"occurrence."        And West Bend is also not entitled to summary

judgment on its        argument that Engerman knew of the property

damage prior to the commencement of West Bend's policy because
the record does not sufficiently establish that the property

damage here was a continuation, change, or resumption of the

damage Engerman knew about before the policy began.                     Finally, we

conclude that Acuity is not entitled to summary judgment on

either of its arguments.               A trier of fact could conclude that

there was "property damage" caused by an "occurrence" and that

the property damage is to more than just Otto Jacobs' product or

arising from the product.

                                           26
                                             No.     2019AP1085 & 2019AP1086

    By   the   Court.—The   decision   of   the    court   of   appeals   is

affirmed, and the cause is remanded to the circuit court for

further proceedings consistent with this opinion.

                                  27
                                                 Nos.    2019AP1085 & 2019AP1086.pdr

      ¶50   PATIENCE     DRAKE       ROGGENSACK,   J.       (concurring).        The

majority opinion appears not to understand the judicial history

of the commercial law doctrines that underlie Wis. Pharmacal

Co., LLC v. Neb. Cultures of Cal., Inc., 2016 WI 14, 367 Wis. 2d

221, 876 N.W.2d 72, Wausau Tile, Inc. v. Cnty. Concrete Corp.,

226 Wis. 2d 235, 593 N.W.2d 445 (1999), Vogel v. Russo, 2000 WI

85, 236 Wis. 2d 504, 613 N.W.2d 177, Am. Fam. Mut. Ins. Co. v.

Am. Girl, Inc., 2004 WI 2, 268 Wis. 2d 16, 673 N.W.2d 65 and

Wis. Label Corp. v. Northbrook Prop. & Cas. Ins. Co., 2000 WI

26,   233   Wis. 2d    314,    607    N.W.2d    276.      Because    it   does   not

recognize the judicial history of interpretations of terms in a

Commercial General Liability (CGL) insurance policy, it relies

entirely on American Girl, which decision was a sea change in

judicial interpretations of "property damage" in a CGL policy,

as I explain more fully below.

      ¶51   At   times   the     majority      opinion    misuses    foundational

commercial analyses such as the integrated system, economic loss

doctrine and their interplay with the three-step process we use

to determine whether there is coverage under a CGL insurance
policy.1    The majority opinion does so, in part, because it does

not factor into its analysis the purpose of a CGL policy, when

      1We articulated the three-step process in Wis. Pharmacal
Co., LLC v. Neb. Cultures of Cal., Inc., 2016 WI 14, ¶22, 367
Wis. 2d 221, 876 N.W.2d 72 (citing Preisler v. Gen. Cas. Ins.
Co., 2014 WI 135, ¶22, 360 Wis. 2d 129, 857 N.W.2d 136). First,
we examine the facts of the claim to decide "whether the policy
makes an initial grant of coverage."     Pharmacal, 367 Wis. 2d
221, ¶22.    If so, we examine whether any policy exclusions
preclude coverage.   Id.  Lastly, "we analyze exceptions to the
exclusion   to  determine   whether  any   exception  reinstates
coverage." Id.

                                          1
                                                        Nos.   2019AP1085 & 2019AP1086.pdr

it   is   purchased    by       a   contractor        to   cover    liability         that   a

contractor may have to another person, for bodily injury to them

or to their property.               Stated otherwise, a CGL policy has been

held to cover the risk of tort liability of a contractor that

could arise from the contractor's acts that injure other persons

or their property.

      ¶52    I agree that the facts are as yet too undeveloped to

determine    each     of    the      coverage       defenses      mounted      by    General

Casualty,     West     Bend         Mutual        Insurance      and     Acuity       Mutual

Insurance.     Therefore, I would affirm the court of appeals.                               In

so doing, I fully examine the judicial history of the risk that

a CGL policy had been held to cover and the unarticulated change

of   potential       coverage        for     a     CGL     policy      that    was       first

accomplished     in   American         Girl.        I    also    explain      the    limited

application    of     the    integrated           systems       analysis      employed       in

Pharmacal.     In so doing, I concur in the remand ordered by the

majority opinion.

                                     I.     DISCUSSION

      ¶53    Insurance      policies         insure      against    various         risks    of
liability that may be generated by the insured.                             As a general

matter when a contractor is the insured, a CGL policy insures

the risk that the contractor may be negligent and cause damage

to   other   persons       or       their    property.           Restatement        of    Law,

Liability Insurance, Ch. 1, § 7.                        If the damages are purely

economic, contract remedies, not tort remedies, are available.

Sunnyslope Grading, Inc. v. Miller, Bradford & Risberg, Inc.,

148 Wis. 2d 910, 916, 437 N.W.2d 213 (1989).                        This conclusion is
grounded in the economic loss doctrine, which precludes purely

                                              2
                                                   Nos.    2019AP1085 & 2019AP1086.pdr

economic damages due to a defective product or service that are

disguised as tort claims unless personal injury or damage to

property other than the defective product are present.                        Daanen &

Janssen, Inc. v. Cedarapids, Inc., 216 Wis. 2d 395, 402, 573

N.W.2d 842 (1998).           Whether the damage to property is to "other

property" is sometimes difficult to ascertain.

      ¶54     In    East   River   S.S.    Corp.      v.    Transamerica      Delaval,

Inc.,   476    U.S.    858    (1986),     the    United     States      Supreme    Court

explained why there are occasions when determining whether the

damaged property was, or was not, that of another is difficult.

In reasoning to its conclusion, the Court employed an integrated

systems analysis.

      ¶55     There, charterers of supertankers brought suit against

the   turbine       manufacturer,    claiming         design     and    manufacturing

defects that caused supertankers to malfunction while on the

high seas.         Damages were sought.          Id. at 860.       In coming to its

decision the Court said, "In the traditional 'property damage'

cases, the defective product damages other property.                          In this

case, there was no damage to 'other' property. . . .                               [The]
supertanker's        defectively    designed       turbine       components      damaged

only the turbine itself."            Id. at 867.            In so concluding, the

Court regarded each turbine as a single integrated unit.                             Id.

The   Court    explained,       "Since     all    but      the   very    simplest    of

machines      have    component     parts,       [a   contrary]        holding    would

require a finding of 'property damage' in virtually every case

where a product damages itself.                 Such a holding would eliminate

the distinction between warranty and strict products liability."
Id.

                                           3
                                                Nos.   2019AP1085 & 2019AP1086.pdr

    ¶56     Whether damage that occurs through the acts of the

insured    requires    damage    to    other    property    for    CGL    coverage

varies state by state.          See James Duffy O'Connor, What Every

Court     Should    Know    About     Insurance     Coverage      for    Defective

Construction, 5 J. Am. Coll. Constr. L. No. 1 (2011) (explaining

that in states applying the business risk doctrine, the event

insured is "the possibility that the goods, product or work of

the insured . . . will cause bodily injury or damage to property

other than the product or completed work itself, and for which

the insured may be liable.").               See also, Jeffrey P. Aken &

Tamara    Hayes     O'Brien,    Contractor       Coverage    For    Construction

Claims Under CGL Policies, 44 Tort Trial & Ins. L.J. 993 (2009)

(reviewing whether property damage must be to property other

than that provided by the insured is decided differently in

different jurisdictions).

    ¶57     Until     American Girl, Wisconsin courts had concluded

that the property damage addressed in a CGL policy was damage to

other     property.        Reviewing    that      history   is     important    to

understanding the case before us.              I begin with Vogel because it
is an early and clearly stated case:               "The risk intended to be

insured [in a CGL policy] is the possibility that the goods,

products or work of the insured . . . will cause bodily injury

or damage to property other than to the product or completed

work itself, and for which the insured may be found liable."

Vogel, 236 Wis. 2d 504, ¶17 (citing Bulen v. West Bend Mut. Ins.

Co., 125 Wis. 2d 259, 264-65, 371 N.W.2d 392 (Ct. App. 1985),

                                        4
                                                 Nos.    2019AP1085 & 2019AP1086.pdr

which quoted Weedo v. Stone-E-Brick, Inc., 405 A.2d 788, 791

(N.J. 1979)).2

     ¶58       Wausau   Tile   arose   in     the     context   of   another    CGL

coverage dispute.        Wausau Tile, 226 Wis. 2d at 266.             It involved

breach    of    warranty/contract,       negligence       and   strict    liability

claims.    Id. at 242.

     ¶59       Wausau Tile had combined Medusa concrete, aggregate,

water and other materials to make Terra pavers.                          The pavers

cracked    and    Wausau   Tile   sued       County     Concrete,    claiming   the

Medusa concrete was defective.                County Concrete referred the

claim to its insurer, Travelers Insurance.                   Travelers moved to

dismiss, claiming there was no damage to other property, which

is the type of damage that was then necessary for a CGL policy

to afford coverage.

     Physical harm to property other than the product
     itself may also be measured by the cost of repair or
     replacement of the product.      Consequently, we must
     determine whether Wausau Tile has alleged repair or
     replacement costs as a measure of harm to property
     other than the defective product.
Id. at 248-49.

     ¶60       Travelers alleged it had no duty to defend on the

breach of warranty/contract claims.                   Id. at 243.        We agreed

     2 The majority dismisses our use of Vogel by adding
"includes" to modify a Wis. Label quote as: "simply explains
that the risk insured in a CGL policy includes 'damage to
property other than to the product or completed work itself.'
[Citing] [Wis. Label Corp. v. Northbrook Prop. & Cas. Ins. Co.,
2000 WI 26, ¶27, 233 Wis. 2d 314, 607 N.W.2d 276]."    (Emphasis
added.)   Majority op., ¶23.    However, in its conclusion that
there was no initial grant of coverage, Wis. Label explained,
"[CGL policies] provide coverage for the insured's liability for
physical injury to, or loss of use of, another's property."
Id., ¶33.

                                         5
                                                           Nos.   2019AP1085 & 2019AP1086.pdr

because the damages from those claims were purely economic and

therefore, they were contract damages barred by the economic

loss doctrine.       Id. at 259.

      ¶61    In consideration of whether the insurer had a duty to

defend County Concrete on the remaining tort claims, a key issue

was whether the damage that occurred was to property other than

the     contracted      for    defective             property.3         Id.    at    247   (the

"economic loss doctrine does not preclude a product purchaser's

claims of personal injury or damage to property other than the

product     itself").          "In    short,         economic     loss    is    damage     to   a

product itself or monetary loss caused by the defective product,

which     does    not    cause        personal         injury      or    damage      to    other

property."       Id. (quoting Daanen, 216 Wis. 2d at 402).

      ¶62    For many years, it was important to correctly resolve

the   question     of    what        type   of       property      damage      was   at    issue

because a CGL policy, prior to American Girl, had insured the

risk of damage to "other property," not damage solely to the

contracted for product or service.                         Vogel, 236 Wis. 2d 504, ¶17;

Wis. Label, 233 Wis. 2d 314, ¶58.                           It was a performance bond
that insured risk that the work performed would not meet the

requirements of the contract under which it was performed.                                    See

Gaastra     v.   Vill.    of    Fairwater,            77    Wis. 2d     7,    252    N.W.2d     60

      3The majority opinion does not understand the two decisions
we made in Wausau Tile, wherein we denied coverage for the
contract claims and explained potential coverage existed for the
tort claims when a defective product causes "personal injury or
damage to other property." Wausau Tile, Inc. v. Cnty. Concrete
Corp., 226 Wis. 2d 235, 247, 259, 593 N.W.2d 445 (1999).

                                                 6
                                                 Nos.       2019AP1085 & 2019AP1086.pdr

(1977); Kniess v. Am. Sur. Co. of N.Y., 239 Wis. 261, 300 N.W.

913 (1941).

    ¶63     Accordingly, we agreed with Travelers, concluding that

damage     to    the   pavers      themselves    was        not     damage    to     other

property.       We determined other property was not damaged by the

allegedly       defective    cement   because    the        pavers      constituted     an

integrated system or product where one component could not be

separated from the other components.                  Wausau Tile, 226 Wis. 2d

at 249 (citing Restatement (Third) of Torts § 21 cmt. e (1997),

which    acknowledged       and    explained    the     use       of    the   integrated

systems rule).

    ¶64     Our opinion in Wausau Tile reasoned that "[d]amage by

a defective       component of an integrated system to either the

system as a whole or other system components is not damage to

'other property.'"           Id. (citing East River S.S., 476 U.S. at

867-68).        The "United States Supreme Court has recognized that

courts have interpreted the Supreme Court's decision in East

River    S.S.     as   standing     for   the   proposition            that   when    harm

results from a defective component of a product, the product
itself is deemed to have caused the harm."                          Wausau Tile, 226

Wis. 2d at 250 (citing Saratoga Fishing Co. v. J.M. Martinac &

Co., 520 U.S. 875, 883 (1997)).

    ¶65     American        Girl   also   involved      a     CGL      coverage    claim.

However, American Girl provided coverage for contract damages,

which was an unarticulated sea change from our prior holdings.

Before American Girl, the first step of our three-step coverage

analysis for a CGL policy had been to assess whether there was
damage to property other than or in addition to the insured's

                                          7
                                                       Nos.     2019AP1085 & 2019AP1086.pdr

defective work.             If that were not the case, as American Girl may

have held but did not articulate, CGL policies would function as

performance bonds.              Am. Girl, 268 Wis. 2d 16, ¶94 (Crooks, J.,

dissenting).

       ¶66       The claim in American Girl was that Renschler, the

general      contractor         for   constructing       a    building,      breached   its

warranty by failing to construct a building that was free from

defects          as   it    warranted      it    would    do     in    the   construction

contract.             Id., ¶¶4, 21.         Breach of warranty is a contract

claim.           Tietsworth      v. Harley-Davidson, 2007 WI 97,                 ¶10, 303

Wis. 2d 94, 735 N.W.2d 418.

       ¶67       American Family Insurance argued that because American

Girl's claim was for breach of warranty/breach of contract it

was not an "occurrence" under its policy because CGL policies

are not intended to cover contract claims arising out of the

insured's defective work.                  Id., ¶39.4        While acknowledging that

it had been held that CGL policies do not cover claims arising

out of the insured's defective work, American Girl shifted the

focus of the allegation posed by American Family and responded
that       the    lack     of   coverage    in   the     past    had   occurred   due    to

business risk coverage exclusions in insurance policies.5                               Id.

       Faulty workmanship is not an accident unless it causes an
       4

unexpected harm, and occurrences are defined as accidents.
Smith v. Anderson, 2017 WI 43, ¶91, 374 Wis. 2d 715, 893 N.W.2d
790 (Abrahamson, J., dissenting); Am. Fam. Mut. Ins. Co. v. Am.
Girl, Inc., 2004 WI 2, ¶5, 268 Wis. 2d 16, 673 N.W.2d 65.

       It was possible to find an initial grant of coverage due
       5

to faulty work of the contractor when that contracted for work
harmed other property and then to deny coverage based on the
policy's business risk exclusion to coverage.   However, we had
repeatedly concluded that there was no property damage of the
type required by a CGL policy, when no property of another was
                               8
                                             Nos.   2019AP1085 & 2019AP1086.pdr

However, business risk exclusions could apply only if there had

been an initial grant of coverage under the first step of our

coverage analysis to which the exclusion was then applied at the

second step of our analysis.

    ¶68     In   shifting   the     focus   of   the   contention    American

Family Insurance actually made, American Girl ignored years of

our decisions that had held that under a CGL policy, the term

"property damage" required damage to property other than or in

addition to damage to the contracted for product or services.

Stated otherwise, nowhere in the American Girl decision does it

reflect any recognition that the words of the policy defining

property damage repeatedly had been interpreted by this court to

require    damage   to   property   other   than    the   product   Renschler

produced for American Girl.6          The majority opinion got by what

may have been an initial stumbling block by never addressing the

"other property" concern and concluding that the soil settlement

was the result of a subcontractor's alleged negligence.                   Id.,

¶¶5, 9.     However, alleged negligence of a subcontractor would

enter only at the third step of our coverage analysis where we
consider exceptions to any policy exclusions found during the

second step of the analysis.

    ¶69     American Girl's providing coverage under a CGL policy

for damage because of the defective work of a contractor that

damaged no identified other property was a huge sea change from

damaged.    See decisions pre-American Girl discussed above.
    6  It was undisputed that the damage at issue in American
Girl was solely to the defective building that Renschler
contracted for and constructed. Id., ¶¶13-16.

                                       9
                                                 Nos.   2019AP1085 & 2019AP1086.pdr

our past decisions.         In past cases, personal injury or property

damage to another was necessary to afford an initial grant of

coverage under a CGL policy.             Wausau Tile, 226 Wis. 2d at 248-

49; Vogel, 236 Wis. 2d 504, ¶17; Bulen, 125 Wis. 2d at 264-65;

Wis. Label, 233 Wis. 2d 314, ¶58.              Because American Girl did not

address the question that American Family Insurance posed to

find an initial grant of coverage, American Girl did not address

whether the damaged property was "other property."                      In so doing,

it effected a significant change in insurance law, and it did

not tell the reader about the change that it was making.7

      ¶70    Pharmacal presented another CGL policy dispute.                          The

majority     contends      that    Pharmacal     "flatly       contradicted         prior

cases without addressing those conflicts head on."8                     The majority

opinion     cites    not    one     single    case   to       support    this   broad

assertion.      However, as I explained above through the use of

this court's past opinions, it is the majority opinion that has

not undertaken a sufficient study of the judicial history of CGL

policies.      Our     decision     in   Pharmacal      did    not    recognize      the

significant change in the definition of property damage under a
CGL   policy    that    American      Girl     may   have      made     but   did    not

articulate.         Instead,      Pharmacal   applied     our    past     requirement

that property damage under a CGL policy must include damage to

more than the insured's work.

      7Perhaps the court did not recognize that it was making a
change in CGL insurance law because the court sat five in
American Girl.     The majority was three justices, with two
justices dissenting and two justices not participating.
      8   Majority op., ¶3.

                                         10
                                                   Nos.    2019AP1085 & 2019AP1086.pdr

      ¶71    In     Pharmacal,    problems        arose    when,        at       Pharmacal's

request, Nutritional Manufacturing provided a probiotic tablet

that incorporated a different species of bacteria than Pharmacal

requested.        Pharmacal, 367 Wis. 2d 221, ¶5.                     Nebraska Cultures

had provided the defective bacterium that Nutritional had used.

Id.       Once    provided,      the     bacterium        was    mixed           with   other

ingredients and compressed into tablet form.                          Id.        None of the

ingredients        could   be     separated        from         one     another          after

compression into a tablet.             Id.

      ¶72    Netherlands Insurance and Evanston Insurance moved to

dismiss Pharmacal's complaint.                They contended that Pharmacal's

underlying        claims   arose        from      incorporating              a     defective

ingredient into Pharmacal's probiotic supplement tablets.                                  The

insurers asserted that this error did not damage other property

because the tablets were an integrated system and therefore, the

other ingredients in the tablets could not be separated out in a

way that would demonstrate damage to "other property."                                  Damage

to other property was required in order to have an initial grant

of coverage under their CGL policies.                      Id., ¶24 (citing Wis.
Label, 233 Wis. 2d 314, ¶27).

      ¶73    In assessing whether the defective ingredient damaged

other property, we identified the usual three steps to determine

whether     there    was   potential         policy   coverage          of       the    claim.

Pharmacal, 367 Wis. 2d 221, ¶22.                  We began with whether there

was an initial grant of coverage under the terms of the policy.

Id., ¶23.     We addressed the "standard CGL definition of property

damage."

                                             11
                                            Nos.    2019AP1085 & 2019AP1086.pdr
      The risk intended to be insured [in a CGL policy] is
      the possibility that the goods, products or work of
      the insured, once relinquished or completed, will
      cause bodily injury or damage to property other than
      to the product or completed work itself, and for which
      the insured may be found liable.
Id., ¶24 (quoting Wis. Label, 233 Wis. 2d 314, ¶27 (alteration

in original)).     We reasoned that the damage to "other property"

requirement was important because a "CGL policy. . . is not a

performance bond."     Pharmacal, 367 Wis. 2d 221, ¶26.

      ¶74   In order to assess whether the damage that occurred

from the defective bacterium caused damage to other property, we

analyzed "whether a supplement tablet is an integrated system

because if it is, damage to the system has been defined as

damage to the product itself, not damage to other property."

Id., ¶27 (citing Wausau Tile, 226 Wis. 2d at 249).9              We employed

an integrated systems analysis because of the factual difficulty

in   determining   whether   the   defective       bacterium    damaged   only

itself or also damaged other property.

      ¶75   We   reasoned   that   an   integrated     system   analysis    is

sometimes necessary when evaluating whether there is an initial

grant of coverage under a CGL policy because of the historic

requirement that damage to property of another was required for

an initial grant of coverage.       Wis. Label, 233 Wis. 2d 314, ¶27;

East River S.S., 476 U.S. at 867-68.               Accordingly, whether to

      9The majority opinion errs when it implies that Pharmacal
concludes that an integrated systems analysis always is
necessary when evaluating coverage under a CGL policy. Majority
op., ¶31. Whether an integrated systems analysis is appropriate
depends on the factual setting from which CGL coverage is
asserted.    Wausau Tile, 266 Wis. 2d at 249; Pharmacal, 367
Wis. 2d 221, ¶31.

                                    12
                                                           Nos.    2019AP1085 & 2019AP1086.pdr

employ an integrated systems analysis depends on the facts under

which the insurance coverage dispute arises.                                 We analyzed the

undisputed facts to decide whether the tablet was to be treated

as a unified whole or "whether a defective component can be

separated out such that the claimed damage constitutes damage to

property other than the defective component itself."                                Pharmacal,

367 Wis. 2d 221, ¶28; see also East River S.S., 476 U.S. at 867-

68 (explaining that a defective component of a product does not

damage       other      property    when        the     component            is   part    of    an

integrated        system).         In     Pharmacal,          we       concluded    that       once

ingredients were compressed into tablets, a unified whole was

created, and therefore, there was no property damage to other

property, which a CGL policy had required for an initial grant

of coverage.

       ¶76    We     discussed      how    supplying              an    incorrect    bacterium

affected      a    potential      grant    of        coverage          by   reviewing    whether

supplying         that    bacterium        was        an     "occurrence"           under      the

Netherlands policy.            Pharmacal, 367 Wis. 2d 221, ¶¶51-56.                              We

concluded that the breach of contract in supplying an incorrect
bacterium was not an "occurrence" in and of itself.                                  Id., ¶52.

Glendenning's Limestone & Ready-Mix v. Reimer, 2006 WI App 161,

¶39, 295 Wis. 2d 556, 721 N.W.2d 704 (explaining that "faulty

workmanship        in    itself    is     not    an     'occurrence'——that               is,    'an

accident'——within the meaning of the CGL policy").                                       Property

damage or personal injury resulting from the breach must follow

if there is to be an initial grant of coverage because the

policy at issue was a CGL policy.                       Pharmacal, 367 Wis. 2d 221,
¶56.     Accordingly, the property damage necessary was damage to

                                                13
                                                 Nos.    2019AP1085 & 2019AP1086.pdr

other property, which had not occurred.                  Id.    Therefore, there

was no initial grant of potential coverage.

       ¶77    The majority opinion overrules Pharmacal, even though

no party asked the court to do so.10                    It overrules Pharmacal

because it does not understand the integrated system analysis

and why it was applied in that case to determine whether there

was    property     damage     to     other   property      once    tablets    were

constructed.11      It also does not understand the sea change that

may have occurred in American Girl, wherein damages for breach

of warranty (a contract claim) were covered by American Family's

CGL policy without a finding that the breach of warranty had

caused damage to other property.

       ¶78    The   majority        opinion   asserts,      "Pharmacal     wrongly

stated that 'property damage' must be to 'other property' for

purposes of determining an initial grant of coverage in a CGL

policy."12      The majority cites Kalchthaler v. Keller Constr. Co.,

224 Wis. 2d 387, 591 N.W.2d 169 (Ct. App. 1999), in support of

that contention.       However, Kalchthaler employed our pre-American

Girl    CGL    analysis   relating      to    other     property.     Kalchthaler
involved poorly installed windows that leaked, and due to that

       Majority op., ¶31.
       10                     It is risky to overrule a past
decision without briefs from the parties and when the majority
does not understand the commercial doctrines that drive the past
decision.

       We have held that certain types of contamination provided
       11

through the insured's action, when they pose personal injury
dangers, can constitute property damage under a CGL policy.
Northridge Co. v. W.R. Grace & Co., 162 Wis. 2d 918, 937-38, 471
N.W.2d 179 (1991). Pharmacal did not raise those concerns.
       12   Majority op., ¶3.

                                         14
                                                   Nos.    2019AP1085 & 2019AP1086.pdr

leakage    damaged       draperies     and     wallpaper.        Id.   at    397.      In

explaining       its     reasoning,       Kalchthaler        said,     "Under       well-

established       case    law,     a   CGL    policy      does   not   cover    faulty

workmanship, only faulty workmanship that causes damage to other

property."       Id. at 395.       The damage to other property was damage

to draperies and wallpaper.

     ¶79    As     it     criticizes      Pharmacal,       the    majority      opinion

states the proper standard for assessing property damage under a

CGL policy:

     This kind of policy is designed to insure against "the
     possibility that the goods, products or work of the
     insured, once relinquished or completed, will cause
     bodily injury or damage to property other than to the
     product or completed work itself, and for which the
     insured may be found liable."
(citing    Wis.    Label,       233    Wis. 2d    314,     ¶27    (emphasis     in    the

original)).13           The    majority      opinion   then      relates    that     when

considering coverage, "we examine the terms of the policy and

compare it to the facts of record. . . .                      Whether the insuring

agreement confers coverage depends upon whether there has been

'property    damage'          resulting   from    an   'occurrence'         within    the

meaning of the CGL policy language."14

     ¶80    I agree with all of that, but what the majority misses

is that the words, "property damage," in a CGL policy have had

at least 24 years of interpretation by this court as requiring

damage to property other than the contracted-for product.15                          This

     13   Id., ¶15.
     14   Id., ¶16.
     15See e.g., Wausau Tile, 226 Wis. 2d at 248-49; Vogel v.
Russo, 2000 WI 85, ¶17, 236 Wis. 2d 504, 613 N.W.2d 177;
Northridge, 162 Wis. 2d at 932, Wis. Label, 233 Wis. 2d 314,
                              15
                                                   Nos.   2019AP1085 & 2019AP1086.pdr

requirement serves the purpose of keeping the risk for which a

CGL policy is issued (see Wis. Label quoted above) from risks

that may be insured by a performance bond such as poor contract

performance.        The words of the policy are key, but the reader

must    understand       the    judicial        history   that     surrounds   their

interpretation.          See In re Estate of Atkinson, 19 Wis. 2d 272,

278, 120 N.W.2d 109 (1963) (explaining that the meaning of even

statutory terms are affected by prior judicial interpretations).

       ¶81     The majority also finds fault with Pharmacal's use of

Vogel and Wis. Label because the "portions cited in Pharmacal

were not in the initial grant of coverage discussions; they were

general comments on the purpose of a CGL policy. . . .                           The

cited language simply explains that the risk insured in a CGL

policy includes 'damage to property other than to the product or

completed work itself.'"16           The majority is only partially right.

Discussions of property damage were in general comments on the

purpose of a CGL policy, but they were repeated when initial

grants of coverage were discussed.                    Vogel, 236 Wis. 2d 504,

¶¶17, ¶21; Wis. Label, 233 Wis. 2d 314, ¶¶27, ¶33.
       ¶82     The majority opinion finds fault with Pharmacal's use

of     the     integrated      systems   analysis.17         The    majority    also

characterizes the economic loss doctrine as "tort principles"

that "[implicate] the integrated systems analysis."18                     "Although

¶27.
       16    Majority op., ¶23.
       17    Id., ¶24.
       18    Id., ¶26.

                                           16
                                                         Nos.    2019AP1085 & 2019AP1086.pdr

both    the       economic    loss    doctrine          and     the   integrated       systems

analysis may appear in the same opinion, they address different

commercial concerns.            Simply stated, the economic loss doctrine

is a judicial doctrine that prevents suing in tort for damages

that     are      simply     breach    of        contract       damages,      unless     other

property also has been damaged.                         Foremost Farms USA Coop. v.

Performance Process, Inc., 2006 WI App 246, ¶¶13-14, 297 Wis. 2d

724, 726 N.W.2d 289; Kaloti Enters., Inc. v. Kellogg Sales Co.,

2005    WI     111,    ¶27,    283    Wis. 2d          555,     699   N.W.2d    205.       The

integrated systems analysis is used to determine whether there

has been damage to property other than the work of the insured,

when an integrated system is alleged to be factually present.

East River S.S., 476 U.S. at 867 (see above).                                  "If damaged

property is not 'other property' under the 'integrated system'

test, the economic loss doctrine applies and tort claims are

barred."          Foremost Farms, 297 Wis. 2d 724, ¶16.

       ¶83     The majority opinion relies on Haley v. Kolbe & Kolbe

Millwork       Co.,   866     F.3d    824    (7th       Cir.    2017),   to    support     its

attack       on     Pharmacal.19            It        quotes    Haley    as     criticizing
Pharmacal's use of the economic loss doctrine in the context of

an insurance coverage dispute.20                      Haley has a long way to go in

       19   Id., ¶29.

       In its discussion of Haley v. Kolbe Millwork Co.,
       20

866 F.3d 824 (7th Cir. 2017), the majority approves Haley's
statement that applying the economic loss doctrine to an
insurance coverage dispute is exactly what Pharmacal did.
Majority op., ¶29.     What Pharmacal actually says is, "the
economic loss doctrine does not control a coverage dispute and,
therefore is not at issue here."    Pharmacal, 367 Wis. 2d 221,
¶32.
                                                 17
                                                           Nos.    2019AP1085 & 2019AP1086.pdr

providing an accurate articulation of commercial doctrines and

in its reading of Pharmacal.                           First, Haley characterizes the

integrated-system rule as a "common-law rule from the so-called

'economic       loss'      doctrine."               Id.     at    827       (emphasis        added).

However,      they    are      separate       and        distinct    commercial          doctrines

that have been addressed by the United States Supreme Court, as

I have explained above.                    See East River S.S., 476 U.S. at 866-

68.

      ¶84      In    commenting        on     Wausau       Tile,     Haley        asserts       that,

"[a]s    the    cement         was    an    integral        component        of    the       finished

blocks, the cement had not damaged any 'other property,' and the

economic-loss doctrine applied."                        Haley, 866 F.3d at 828.                 Haley

also asserts that "The economic-loss doctrine generally does not

apply    to     insurance-coverage                disputes . . . but              in    2016,     the

Wisconsin Supreme Court extended Wausau Tile's integrated-system

analysis       to    an    insurance         case       involving       a    general-liability

policy    similar         to    the    ones        at     issue     here."             Id.      Those

statements from Haley support its belief that the integrated

systems analysis is part of the economic loss doctrine.                                      That is
an incorrect understanding of both commercial doctrines.

      ¶85      In regard to the 5 Walworth dispute that is pending

before us, the integrated systems analysis could be discussed in

regard    to    the       pool's      use    of     shotcrete       in      its   construction.

However,       the    significant            and        continual    water        leakage       that

followed construction of the pool may well have damaged property

of the owner and therefore damaged other property.                                      This could

support     the      conclusion        that       an     occurrence         (an   accident)       had
occurred that caused property damage to structures outside of

                                                   18
                                                   Nos.   2019AP1085 & 2019AP1086.pdr

the     pool    itself.        It    also     is   not    possible       to   determine

conclusively whether the re-bars used in the pool construction

were a cause of the cracking that resulted in continual pool

leakage.        Those are fact-based determinations.                     And finally,

because it is not unusual for construction projects of this size

to have some initial problems that are resolved, the question of

when John Engerman discovered the leak that eventually proved so

significant also would benefit from further factual development.

                                    II.   CONCLUSION

      ¶86      Accordingly, given all of the law described above, I

would    affirm    the    court      of     appeals.      In   so    doing,     I   have

explained the historic risk that a CGL policy had been purchased

to cover and I affirm the limited use of the integrated systems

analysis       employed   in    Pharmacal.          Therefore,       I    respectfully

concur.

                                            19
                                                Nos.   2019AP1085 & 2019AP1086.akz

    ¶87     ANNETTE KINGSLAND ZIEGLER, C.J.              (concurring in part,

dissenting in part).         I agree with the majority that Wisconsin

Pharmacal Co. v. Nebraska Cultures of California, Inc.1 should be

overruled.       I also agree that General Casualty and Acuity are

not entitled to summary judgment.2          However, I disagree with the

majority's conclusion that West Bend is not entitled to summary

judgment.        The undisputed facts demonstrate that West Bend's

insured, Engerman Contracting, Inc.,3 knew of the property damage

at issue in this case prior to the policy period with West Bend.

Before the policy period, Engerman knew the pool complex was

leaking.     The leaking was, at least in part, caused by cracking

in the pool walls.      Engerman therefore knew of a "resulting loss

of use of th[e] property," which constitutes "property damage"

under West Bend's policy.             As a result, Engerman knew of the

property damage prior to the policy period, and the known-loss

provision precludes coverage from West Bend.                   These undisputed

facts show that West Bend is entitled to summary judgment.

    ¶88     "We will affirm a grant of summary judgment when there
are no genuine issues of material fact and the moving party is

entitled    to    judgment   as   a    matter    of    law."     Baumeister    v.

Automated Prods., Inc., 2004 WI 148, ¶11, 277 Wis. 2d 21, 690

    1   2016 WI 14, 367 Wis. 2d 221, 876 N.W.2d 72.
    2  I therefore join the majority opinion except for ¶¶5, 7,
39-42, and 49.
    3  Engerman Contracting, Inc., and John Engerman, Engerman
Contracting's President and CEO, are both "insureds" under West
Bend's policy.   Accordingly, I refer to them collectively as
"Engerman."

                                        1
                                                Nos.       2019AP1085 & 2019AP1086.akz

N.W.2d 1.    "A factual issue is 'genuine' if the evidence is such

that a reasonable jury could return a verdict in favor of the

non-moving party."        Midwest Neurosciences Assocs., LLC v. Great

Lakes     Neurosurgical     Assocs.,     LLC,    2018         WI     112,   ¶80,     384

Wis. 2d 669, 920 N.W.2d 767.

    ¶89     West   Bend's    policy    contains        a    known-loss      provision

precluding coverage for "property damage" if the insured knew

that the property damage "had occurred, in whole or in part."

The full provision precludes coverage unless,

    [p]rior to the policy period, no insured . . . and no
    "employee" authorized by you to give or receive notice
    of an "occurrence" or claim, knew that the "bodily
    injury" or "property damage" had occurred, in whole or
    in part.    If such a listed insured or authorized
    "employee" knew, prior to the policy period, that the
    "bodily injury" or "property damage" occurred, then
    any continuation, change or resumption of such "bodily
    injury" or "property damage" during or after the
    policy period will be deemed to have been known prior
    to the policy period.
The policy also defines "property damage" as "[p]hysical injury

to tangible property, including all resulting loss of use of

that property," and as "[l]oss of use of tangible property that

is not physically injured."

    ¶90     Engerman   has    no   coverage      under        West    Bend's      policy

because Engerman knew of the property damage prior to the policy

period.      The   policy    period    commenced       on      October      27,    2013.

Before that time, Engerman received numerous emails notifying

him of the property damage.            He was therefore aware that "loss

of use" of the pool, which constitutes part of the "property
damage" under West Bend's policy, had occurred.

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                                                       Nos.    2019AP1085 & 2019AP1086.akz

      ¶91    On August 19, 2012, Engerman received an email from 5

Walworth, LLC, informing him that "the wading pool was empty"

and   "a    pool      leak   was    found       and    supposedly        fixed     yesterday

morning——unsuccessfully            unfortunately."              Engerman        replied     the

next day that he would "like to pay a visit," and he later

stated in his deposition that he did so.                         Engerman followed up

on August 27, stating "the stone is being replaced [and] that

was also a source of the water leak."                         Engerman's attempts at

resolving       the   leak    proved      unsuccessful.             On    June    21,     2013,

Engerman was forwarded an email complaining "the kiddie pool has

been leaking since day one, and you guys have come up with all

sorts of excuses.            Clearly it is a LEAK.                  Fix the damn leak."

The     email    continued,        "The     auto      fill     is    running       24/7    and

obviously can not keep up with the leak."

      ¶92    Engerman did aver in his deposition that these emails,

"to the best of [his] knowledge," discussed leaking that was

"always contained to [a] trough issue that [he] thought [was]

rectified at the end of that summer of 2012," and he did "not
[hear of] anything prior – or afterwards of any ongoing pool

issues     directly."         However,       Engerman         received     one     of     these

emails after the "summer of 2012" in June 2013, still before the

policy      period     commenced.           Additionally,           as    stated    in     the

engineering      firm's      report,      "It    was    reported         that    significant

cracking developed in the shotcrete walls and bottom of the

pools    soon    after       construction        in    2012,     and     excessive        water

leakage has continued to occur."

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                                                      Nos.   2019AP1085 & 2019AP1086.akz

       ¶93     Based on the evidence in the record, Engerman clearly

knew    of     the     "property    damage"          before     the     policy     period

commenced.       The definition of "property damage" in West Bend's

policy includes "all resulting loss of use of that property."

Such loss of use occurred because, as Engerman undisputedly knew

prior    to    the    policy    period,     the      pool     complex     was    leaking.

Whether Engerman thought this leak was caused by cracking in the

pool walls or a "trough issue" is irrelevant.                      The cracks in the

pool    walls    were    present    since      2012,     and    the     pool    continued

leaking       notwithstanding      Engerman's         attempts     at     rectifying      a

"trough issue."          The only reasonable conclusion, based on the

evidence in the record, is that at least some of the leaking

Engerman knew about prior to the policy period was caused by

cracks in the pool walls.

       ¶94     Because Engerman knew there was "resulting loss of use

of th[e] property," he knew there was "property damage" prior to

West    Bend's       policy    period.         All    further     "property       damage"

alleged in 5 Walworth's complaint stemmed from the cracking in
the pool walls and therefore constitutes a "continuation, change

or resumption of such . . . 'property damage.'"                           As a result,

under    West    Bend's       policy,    all    resulting       property        damage   is

"deemed to have been known [by Engerman] prior to the policy

period," precluding coverage for such property damage.                           Based on

these     undisputed      facts,    West       Bend     is     entitled    to     summary

judgment.

       ¶95     For the foregoing reasons, I respectfully concur in
part and dissent in part.

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                                    Nos.   2019AP1085 & 2019AP1086.akz

    ¶96   I am authorized to state that Justice REBECCA GRASSL

BRADLEY joins this writing.

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    Nos.   2019AP1085 & 2019AP1086.akz

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