                                                                2017 WI 43

                  SUPREME COURT              OF      WISCONSIN
CASE NO.:               2015AP79
COMPLETE TITLE:         Maya Elaine Smith,
                                  Plaintiff,
                             v.
                        Jeff Anderson, d/b/a Anderson Real Estate
                        Services,
                                  Defendant-Third-Party Plaintiff,
                             v.
                        4th Dimension Design, Inc.,
                                  Third-Party Defendant,
                        R & B Construction, Inc.,
                                  Third-Party
                                  Defendant-Appellant-Petitioner,
                        West Bend Mutual Insurance Company,
                                  Intervenor-Respondent.

                           REVIEW OF A DECISION OF THE COURT OF APPEALS
                            Reported at 366 Wis. 2d 808, 874 N.W.2d 347
                                  (WI Ct. App. 2016 – Unpublished)

OPINION FILED:          April 27, 2017
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:          October 18, 2016

SOURCE OF APPEAL:
   COURT:               Circuit
   COUNTY:              Milwaukee
   JUDGE:               Pedro Colon

JUSTICES:
   CONCURRED:           ROGGENSACK, C. J. concurs (opinion filed).
   DISSENTED:           ABRAHAMSON, J. dissents, joined by BRADLEY A.
                        W., J. (opinion filed).
  NOT PARTICIPATING:    ZIEGLER, J. and BRADLEY, R. G., J. did not
                        participate.

ATTORNEYS:
       For      the    third-party    defendant-appellant-petitioner,        there
were briefs by John E. Machulak and Machulak, Robertson & Sodos,
S.C., Milwaukee, and oral argument by John E. Machulak.


       For the intervenor-respondent, there was a brief by Jeffrey
L.   Leavell,         Danielle   N.   Rousset   and   Jeffrey   Leavell,   S.C.,
Racine,         and      oral    argument       by    Jeffrey    L.    Leavell.
                                                                          2017 WI 43
                                                                  NOTICE
                                                   This opinion is subject to further
                                                   editing and modification.   The final
                                                   version will appear in the bound
                                                   volume of the official reports.
No.    2015AP79
(L.C. No.   2013CV7085)

STATE OF WISCONSIN                            :             IN SUPREME COURT

Maya Elaine Smith,

            Plaintiff,

      v.

Jeff Anderson, d/b/a Anderson Real Estate
Services,

            Defendant-Third-Party Plaintiff,
                                                                       FILED
      v.
                                                                  APR 27, 2017
4th Dimension Design, Inc.,
                                                                     Diane M. Fremgen
            Third-Party Defendant,                                Clerk of Supreme Court


R & B Construction, Inc.,

            Third-Party Defendant-Appellant-
            Petitioner,

West Bend Mutual Insurance Company,

            Intervenor-Respondent.




      Review of the decision of the Court of Appeals is dismissed

as improvidently granted.

      ¶1    PER    CURIAM.     On   April     6,     2016        we    granted      R&B
Construction,     Inc.'s     petition   for   review        of    an    unpublished
                                                                              No.     2015AP79



decision of the Court of Appeals.1                  Briefing of the parties and

of    the   amicus,     Wisconsin      Defense      Counsel,       Inc.,      were     timely

completed,      and    on      October    18,      2016,    the       court     held       oral

argument.

       ¶2     The petition for review asked the court to decide:

(1) whether a third-party complaint may state a claim for which

an insurance company has a duty to defend when the third-party

plaintiff      was    sued     for    misrepresentation          by    the     first-party

plaintiff; (2) whether a third-party defendant may supplement

the third-party complaint with additional facts when the third-

party defendant seeks a defense from its insurance company; and

(3)    whether       summary     judgment        denying    a     claim       for    defense

conclusively          concludes        the       duty      to      defend           question,

notwithstanding subsequent developments in the lawsuit.

       ¶3     The    circuit     court   granted        summary       judgment       to    West

Bend Mutual Insurance Company.2              The circuit court concluded that

there was no initial grant of coverage and also, if there were

an initial grant of coverage, the policy exclusions prevented
coverage      for    the     claims    for   which       R&B     Construction          sought

defense.       Therefore, West Bend Mutual had no duty to defend.

The circuit court dismissed West Bend Mutual from the lawsuit

and R&B appealed.



       1
       Smith v. Anderson, No.                2015AP79,          unpublished         slip   op.
(Wis. Ct. App. Dec. 22, 2015).
       2
           The Honorable Pedro A. Colon of Milwaukee County presided.


                                             2
                                                                      No.     2015AP79



      ¶4     In considering R&B's claim that West Bend Mutual had a

duty to defend R&B, the Court of Appeals decided no defense was

due based solely on its conclusion that there was no initial

grant of coverage for the injury from which a duty to defend

could arise.3        However, that was not the only argument that West

Bend Mutual made to the Court of Appeals.               West Bend Mutual also

asserted that if the Court of Appeals concluded that there was

an initial grant of coverage, the policy exclusions obviated

coverage and therefore, there was no duty to defend.

      ¶5     The petition for review and the responses presented to

us during our review focused on the Court of Appeals decision.

Therefore, they were limited to whether there was an initial

grant of coverage under the policy.                  No party argued that if

there was an initial grant of coverage, the policy exclusions

nevertheless precluded coverage.             Therefore, no party challenged

the   circuit    court's       conclusion     that    the    policy     exclusions

precluded    coverage,     a   conclusion     that    the    Court    of    Appeals'

decision left in place because the Court of Appeals did not
address policy exclusions.

      ¶6     In 2016, we decided Water Well Sol. Serv. Group, Inc.

v. Consolidated Ins. Co., 2016 WI 54, 369 Wis. 2d 607, 881

N.W.2d 285.      One of the questions presented in Water Well was

whether a four-corners analysis required interpretation of the

entire     policy,    i.e.,    whether   there   was    an   initial        grant   of

      3
       Smith v. Anderson, No. 2015AP79, unpublished slip op.,
¶¶16-17 (Wis. Ct. App. Dec. 22, 2015).


                                         3
                                                                              No.    2015AP79



coverage      and      whether      any     exclusion      or       exception       affected

coverage.         Id., ¶2.      We concluded that when a claim for defense

is made, courts must interpret the entire policy – including any

grant of coverage and all applicable exclusions and exceptions

to exclusions that bear on coverage.                      Id., ¶¶2-3 (citing Marks

v. Houston Cas. Co., 2016 WI 53, ¶¶61-76, 369 Wis. 2d 547, 881

N.W.2d 309).

      ¶7      In the case now before us, if we were to stop our

analysis after determining that there was an initial grant of

coverage,     the      parties      would    not    receive     a    full    four-corners

analysis.         Our decision could be viewed as retreating from the

clear directive we gave in Water Well where we said, "under the

four-corners rule the entire policy must be examined, including

the coverage-granting clauses, exclusions, and exceptions to any

applicable exclusions."             Id., ¶2.

      ¶8      Our decision also would create confusion because the

circuit court concluded that the "Your Work" exclusion precluded

coverage, and that decision was not overturned by the Court of
Appeals.          Before      us,   neither       party   briefed      or    argued     that

coverage was precluded by a policy exclusion.                             Therefore, were

we to follow the lead of the parties and the Court of Appeals

and   not    address       exclusions       and    any    applicable        exceptions    to

exclusions,        a   question     would     remain      about     whether     West    Bend

Mutual      had    a   duty    to   defend    R&B     because       the    circuit     court

concluded that an exclusion precluded coverage under the West

Bend policy.


                                              4
                                                                  No.   2015AP79



      ¶9    Accordingly, because there are coverage questions for

which no argument or briefing was provided to us and because

deciding only whether there is a grant of coverage will cause

confusion and provide no answer to the parties on how they are

to   proceed,   we   conclude   that       the   petition   for   review    was

improvidently decided.

      By the Court.—The review of the decision of the court of

appeals is dismissed as improvidently granted.

      ¶10   ANNETTE KINGSLAND ZIEGLER and REBECCA GRASSL BRADLEY,

JJ., did not participate.




                                       5
                                                                          No.    2015AP79.pdr


       ¶11   PATIENCE          DRAKE       ROGGENSACK,            C.J.      (concurring).

Although     I   agree       that    the    review       herein    was     improvidently

granted, I write in concurrence for two reasons:                            (1) to point

out the significant risk parties face in failing to complete a

full, four-corners analysis before us, as is required by Water

Well Sol. Serv. Group, Inc. v. Consolidated Ins. Co., 2016 WI

54, ¶2, 369 Wis. 2d 607, 881 N.W.2d 285, and (2) to avoid public

confusion, which could result from Justice Abrahamson's dissent.

       ¶12   Unlike      the    full,      four-corners         analysis,        which     the

parties completed in both the circuit court and the court of

appeals, they presented only a partial analysis here.                                     They

addressed     only     the     initial     grant    of    coverage       issue.       As   is

apparent     from    Justice        Abrahamson's        writing    that     follows,       she

would conclude that there was an initial grant of coverage.

West Bend Mutual ignored the risk that we could conclude that

its policy made an initial grant of coverage when West Bend

Mutual limited the issues it presented to us and did not address

the policy exclusions.                Ms. Smith ignored the risk that the
circuit      court's     conclusion        that     the    "Your     Work"        exclusion

precluded coverage when she chose not to attack that decision as

part of her review here.               As a cautionary note, a full, four-

corners analysis is required, as we explained in Water Well.

       ¶13   Justice      Abrahamson        states,       "We     conclude”        that     no

policy exclusion excuses West Bend's duty to defend.                                However

this    conclusion       is    unsupported         by    anything        other    than     one

sentence found in ¶43 of her writing.                     In ¶43, she also states,
"we reverse the decision of the court of appeals," when the

                                             1
                                                  No.   2015AP79.pdr


majority of the court does not reverse the decision of the court

of appeals.   Accordingly, I write to avoid the potential for

public confusion that her writing may create.




                                2
                                                                  No.    2015AP79.ssa


      ¶14    SHIRLEY S. ABRAHAMSON, J.             (dissenting).         This court

seriously     errs    in   dismissing       this    petition     for     review   as

improvidently granted.           It errs because the parties and the

public need a decision from this court on the important issues

the parties presented, briefed, and argued in this court.

      ¶15    This dismissal embodies regrettable appellate practice

given the circumstances of this case and the court's scanty

workload.

      ¶16    This dismissal has unnecessarily caused these parties

and   the   amicus    curiae    expense     and    delay    without      giving   the

parties, the amicus, or the public the benefit of a decision on

important issues.1

      ¶17    The    parties    have   been    awaiting       a   final    appellate

decision for more than two years since the circuit court issued

its     judgment.      Obviously,      they       have     incurred     substantial

expenses.     The circuit court entered judgment on November 25,

2014.     The court of appeals issued its decision on December 22,

2015.     This court granted R&B Construction's petition for review
on April 6, 2016.             R&B Construction, Inc., West Bend Mutual

Insurance Company, and Wisconsin Defense Counsel Inc., as amicus

curiae, all filed briefs in this court.                    This court held oral

argument on October 18, 2016.

      ¶18    The petition for review in the instant case raised the

following significant issues:



      1
          Wisconsin Defense Counsel, Inc. filed an amicus curiae
brief.


                                        1
                                                                                No.   2015AP79.ssa

    1. Can a third-party complaint state a claim that an
       insurance company has a duty to defend, where the
       complaint against the third-party plaintiff is for
       misrepresentation?

    2. Should a party looking to his insurance company to
       provide him with a defense be able to introduce
       information not stated in the pleadings to show that
       there could be claims requiring his insurer to
       provide a defense?

    3. Can a party denied a defense after his insurance
       company succeeds on a motion for summary judgment
       reassert a right to a defense if later developments
       in the case show that he is entitled to a defense?
    ¶19     We granted review of these issues because they are

law-developing.        Resolving          the    first      issue    relating         to   third-

party practice would have given this court the opportunity to

explain the proper application of the four-corners rule in duty-

to-defend cases involving third-party complaints and answers.

    ¶20     The        case     also        presents         yet     another           important

opportunity to educate litigants and ourselves about preserving

issues   for   review         in    this        court.       We     have    missed         a   good

opportunity       to    once       again        clarify     the     rules        of    appellate

practice.

    ¶21     Furthermore,            the    court's       case     load     is    scanty.        We

probably will decide fewer than 55 cases from September 2016

through June 2017 (up from fewer than 45 cases from September

2015 through June 2016).

    ¶22     Here       are    the    circumstances           leading       to    the    untoward

dismissal in the instant case.

    ¶23     The    court       of    appeals         held    in     favor       of    West     Bend

Insurance on coverage, a dispositive issue.                              As a result, the
court of appeals need not, and did not, decide whether certain

                                                 2
                                                                             No.   2015AP79.ssa


policy exclusions precluded a duty to defend.2                          Because West Bend

Insurance failed to assert in this court that its duty to defend

was precluded by policy exclusions, an argument that would have

supported       the    decision     of    the      court    of    appeals,          West      Bend

Insurance waived (forfeited) its right to have this court decide

the policy exclusion issue as a matter of right.

       ¶24     To preserve the issue               of the effect of the policy

exclusions for review as a matter of right in this court, West

Bend       Insurance   was   required       to     present       the    issue       of    policy

exclusions to this court.                It could have accomplished this goal

in one of two ways.

       ¶25     West Bend Insurance could have presented the issue of

policy       exclusions      to    this    court      in     its       response          to    R&B

Construction's          petition         for       review.              Wisconsin             Stat.

§ (Rule) 809.62(3)(d)             provides:        "If     filed,      the    response          may

contain any of the following: . . . (d) Any alternative ground

supporting       the    court      of    appeals      result       or    a     result          less

favorable to the opposing party than that granted by the court
of appeals."3          West Bend did not present the issue of policy

exclusions in its response to R&B Construction's petition for

review.4

       2
       Smith v. Anderson, No. 2015AP79, unpublished slip op.,
¶17, n.2 (Wis. Ct. App. Dec. 22, 2015).
       3
       See In Interest of Jamie L., 172 Wis. 2d 218, 232–33, 493
N.W.2d 56 (1992).
       4
       Michael S. Heffernan gives the following practice tip in
Appellate Practice and Procedure in Wisconsin § 23.13 (7th ed.
2016), regarding a response to a petition for review:

                                                                                   (continued)
                                               3
                                                             No.   2015AP79.ssa


     ¶26    Alternatively, West Bend Insurance could have asserted

and discussed the issue of policy exclusions in its brief in

this court.5    West Bend Insurance's brief in this court did not

present or develop this issue of policy exclusions.

     ¶27    Having   taken   neither       alternative   course    of   action,

West Bend Insurance has not preserved this issue for review as a

matter of right.

     ¶28    In light of West Bend Insurance's failure to preserve

the issue of policy exclusions as a matter of right, the court

has three alternative courses of action it might take in the

instant case:    (1) The court may review the issue; (2) the court

may decide West Bend Insurance has waived (forfeited) the right

to a review of the issue; or (3) the court may remand the issue

to the court of appeals for a review of the decision of the

circuit court on the issue.6

     It is particularly important to file a response if the
     respondent believes that there are alternative grounds
     to support the underlying decision, or if there are
     issues that need to be decided other than those relied
     on by the court of appeals. See State v. Smith, 2016
     WI 23, ¶41, 367 Wis. 2d 483, 878 N.W.2d 135, petition
     for cert. filed (U.S., Oct. 10, 2016 (No. 16-6409);
     see also Wis. Stat. Ann. § 809.62(3), Judicial Council
     Committee cmt.——2008.

     West Bend Insurance did not have to file a cross-petition.
It had no adverse decision from which to cross-petition.     See
Wis. Stat. § (Rule) 809.62(7); In Interest of Jamie L., 172
Wis. 2d 218, 232–33, 493 N.W.2d 56 (1992); Michael S. Heffernan,
Appellate Practice and Procedure in Wisconsin § 23.13 (7th ed.
2016). West Bend Insurance did not file a cross-petition.
     5
         See Jamie L., 172 Wis. 2d at 232–33.
     6
         See Jamie L., 172 Wis. 2d at 232–33.


                                       4
                                                     No.   2015AP79.ssa


     ¶29    Holding West Bend Insurance to have waived (forfeited)

the application of its policy exclusions is especially apt in

the instant case.    The court should not decide the issue without

briefs.7    Nor should the court examine the briefs filed in the

court of appeals on appeal from the circuit court in lieu of

requiring briefs here.      The order granting the    petition for

review explicitly states that if a party wishes to rely on any

materials in its brief to the court of appeals, the material has

to be restated in the brief filed in this court.     Nor should the

court order additional briefs here or remand the issue to the

court of appeals.     West Bend Insurance was fully cognizant of

the policy exclusion issue and obviously decided not to raise it

in this court.    There is no compelling reason to give West Bend

Insurance another kick at the can.8

     ¶30    Here's the opinion that I think this court should be

issuing reversing the decision of the court of appeals:

                             * * * *

     REVIEW of a decision of the Court of Appeals.     Reversed and
remanded.




     7
       Cf.  State   v.  Howes,   2017  WI   18,  ¶¶103-106,        373
Wis. 2d 468, ___ N.W.2d ___ (Abrahamson, J., dissenting).
     8
       See State v. Alexander, 2013 WI 70, ¶31 n.10, 349
Wis. 2d 327, 833 N.W.2d 126, quoting with approval Rivera–Gomez
v. de Castro, 843 F.2d 631, 635 (1st Cir. 1988) ("Judges are not
expected to be mindreaders.     Consequently, a litigant has an
obligation   to   spell   out    its   arguments  squarely   and
distinctly . . . , or else forever hold its peace.") (internal
quotation marks and citation omitted).


                                 5
                                                                       No.    2015AP79.ssa


       ¶31       SHIRLEY S. ABRAHAMSON, J.                 This is a review of an

unpublished decision of the court of appeals.9                          The court of

appeals affirmed the order of the circuit court for Milwaukee

County, Pedro Colon, Judge, granting summary judgment in favor

of West Bend Mutual Insurance Company against its insured, R&B

Construction, Inc.              The circuit court declared that West Bend

Insurance had no duty to defend its insured, R&B Construction,

with respect to a third-party complaint Jeff Anderson, d/b/a

Anderson Real Estate Services, filed against R&B Construction,

Inc.

       ¶32       According     to   the    court      of   appeals,   the     third-party

complaint did not allege "property damage" or an "occurrence"

under the terms of the insurance policy.

       ¶33       For     the   reasons     set       forth,   we   conclude    that    the

allegations against R&B Construction in Jeff Anderson's third-

party complaint assert property damage caused by an occurrence,

as those words are used within the insurance policy issued by

West Bend Insurance.                Thus, West Bend Insurance has a duty to
defend R&B Construction in Jeff Anderson's third-party action.

       ¶34       West Bend Insurance failed to assert in this court

that       its    duty    to   defend     was    precluded    by   exclusions     in   the

policy.          Thus, West Bend Insurance failed to preserve this issue

for review as a matter of right.                        It has waived or forfeited

this issue.



       9
       Smith v. Anderson, No.                    2015AP79,     unpublished      slip   op.
(Wis. Ct. App. Dec. 22, 2015).


                                                 6
                                                                             No.   2015AP79.ssa


       ¶35    The   facts    giving       rise   to    the    waiver         or    forfeiture

began when the court of appeals held in favor of West Bend

Insurance on coverage, a dispositive issue, and did not decide

whether certain policy exclusions precluded a duty to defend.10

Because West Bend Insurance failed to assert in this court that

its    duty    to   defend       was   precluded       by    policy       exclusions,           an

argument that would have supported the decision of the court of

appeals, West Bend Insurance waived (forfeited) its right to

have this court decide the policy exclusion issue as a matter of

right.

       ¶36    To preserve the issue              of the effect of the policy

exclusions for review as a matter of right in this court, West

Bend    Insurance     was    required       to   present       the      issue      of    policy

exclusions to this court.                 It could have accomplished this in

one of two ways.

       ¶37    West Bend Insurance could have presented the issue of

policy       exclusions     to     this    court      in     its     response           to    R&B

Construction's        petition         for       review.                Wisconsin            Stat.
§ (Rule) 809.62(3)(d)            provides:       "If    filed,       the      response         may

contain any of the following: . . . (d) Any alternative ground

supporting      the   court       of    appeals       result       or    a     result         less

favorable to the opposing party than that granted by the court

of appeals."11        West Bend did not present the issue of policy


       10
       Smith v. Anderson, No. 2015AP79, unpublished slip op.,
¶17, n.2 (Wis. Ct. App. Dec. 22, 2015).
       11
            See Jamie L., 172 Wis. 2d at 232–33.


                                             7
                                                             No.   2015AP79.ssa


exclusions in its response to R&B Construction's Petition for

Review.12

     ¶38    Alternatively, West Bend Insurance could have asserted

and discussed the issue of policy exclusions in its brief in

this court.13    West Bend Insurance's brief in this court did not

present or develop this issue of policy exclusions.

     ¶39    Having   taken   neither       alternative   course    of   action,

West Bend Insurance has not preserved this issue for review as a

matter of right.

     ¶40    In light of West Bend Insurance's failure to preserve

the issue of policy exclusions as a matter of right, the court

has three alternative courses of action it might take in the

instant case: (1) The court may review the issue; (2) the court


     12
       Michael S. Heffernan gives the following practice tip in
Appellate Practice and Procedure in Wisconsin § 23.13 (7th ed.
2016), regarding a response to a petition for review:

     It is particularly important to file a response if the
     respondent believes that there are alternative grounds
     to support the underlying decision, or if there are
     issues that need to be decided other than those relied
     on by the court of appeals. See State v. Smith, 2016
     WI 23, ¶41, 367 Wis. 2d 483, 878 N.W.2d 135, petition
     for cert. filed (U.S., Oct. 10, 2016 (No. 16-6409);
     see also Wis. Stat. Ann. § 809.62(3), Judicial Council
     Committee cmt.——2008.

     West Bend Insurance did not have to file a cross-petition.
It had no adverse decision from which to cross-petition.    See
Wis. Stat. § (Rule) 809.62(7).   See Jamie L., 172 Wis. 2d at
232–33; Michael S. Heffernan, Appellate Practice and Procedure
in Wisconsin § 23.13 (7th ed. 2016).   West Bend Insurance did
not file a cross-petition.
     13
          See Jamie L., 172 Wis. 2d at 232–33.


                                       8
                                                      No.   2015AP79.ssa


may decide West Bend Insurance has waived (forfeited) the right

to a review of the issue; or (3) the court may remand the issue

to the court of appeals for a review of the decision of the

circuit court on the issue.14

     ¶41    Holding West Bend Insurance to have waived (forfeited)

the application of its policy exclusions is especially apt in

the instant case.     The court should not decide the issue without

briefs.15    Nor should the court examine the briefs filed in the

court of appeals on appeal from the circuit court in lieu of

requiring briefs here.       The order granting the    petition for

review explicitly states that if a party wishes to rely on any

materials in its brief to the court of appeals, the material has

to be restated in the brief filed in this court.      Nor should the

court order additional briefs here or remand the issue to the

court of appeals.      West Bend Insurance was fully cognizant of

the policy exclusion issue and obviously decided not to raise it

in this court.     There is no compelling reason to give West Bend

Insurance another kick at the can.16




     14
          See Jamie L., 172 Wis. 2d at 232–33.
     15
       Cf. State v. Howes, 2017 WI 18, ¶¶103-106,                   373
Wis. 2d 468, ___ N.W.2d ___ (Abrahamson, J., dissenting).
     16
       See State v. Alexander, 2013 WI 70, ¶31 n.10, 349
Wis. 2d 327, 833 N.W.2d 126, quoting with approval Rivera–Gomez
v. de Castro, 843 F.2d 631, 635 (1st Cir. 1988) ("Judges are not
expected to be mindreaders.     Consequently, a litigant has an
obligation   to   spell   out    its   arguments  squarely   and
distinctly . . . , or else forever hold its peace.") (internal
quotation marks and citation omitted).


                                  9
                                                                         No.    2015AP79.ssa


      ¶42      Accordingly, we need address only whether West Bend

has   a   duty       to    defend    under    the    coverage      provisions      of    the

policy, namely the provisions regarding "property damage" and

"occurrence" because that is the only issue raised and briefed

by the parties in regard to the duty to defend.

      ¶43      We conclude that West Bend Insurance has a duty to

defend under the coverage provisions of the policy, and that

West Bend has forfeited or waived any argument it had that a

policy exclusion excuses its duty to defend.                            Accordingly, we

reverse the decision of the court of appeals and remand the

cause     to      the      circuit    court        for   further     proceedings        not

inconsistent with this decision.

      ¶44      To understand the legal issue regarding the duty to

defend, we have to set the stage from the beginning.                                    This

litigation began shortly after Maya Elaine Smith purchased a

residence       in    Milwaukee      from    the    owner,    Jeff      Anderson,    d/b/a

Anderson       Real       Estate   Services.        After    apparently        discovering

defects     in     the      structure,      including     leaks    in    the     basement,
Smith,      the      plaintiff,      sued     Jeff       Anderson,      the    defendant,

asserting a claim for breach of contract and numerous claims for

misrepresentation.             Smith amended her complaint on January 27,

2014.

      ¶45      When we refer herein to the Smith complaint, we are

referring to the amended Smith complaint.                      For purposes of this

decision it would not matter whether we referred to the original

Smith complaint or the amended complaint; they are substantially



                                              10
                                                        No.   2015AP79.ssa


the   same.17   The   amended   complaint   further   develops   factual

allegations.    The facts that are material to our analysis——that

the basement leaked and the drain tiles were clogged, both of

which require repair——appear in both complaints.

      ¶46   Jeff Anderson, the defendant in Smith's complaint, in

turn sued (by means of a third-party complaint) 4th Dimension




      17
       Anderson's third-party complaint was filed before Smith's
amended complaint was served on Anderson. Anderson attached the
original Smith complaint to his third-party complaint.       The
third-party complaint was not amended to attach the amended
Smith complaint.   We examine the amended complaint for several
reasons.

     The parties, the circuit court, and the court of appeals
discuss the amended complaint. For example, West Bend Insurance
stated in its Intervenor Complaint that its "policy does not
provide   coverage,  either  defense  or  indemnity,  for   the
allegations of the amended complaint or the third party
complaint."

     The amended complaint in the instant case was filed as a
matter of course.    No permission was needed from the circuit
court or parties because the amended complaint was filed within
six months of the filing of the complaint.           Wis. Stat.
§ 802.09(1).   "[A]n amended complaint supersedes or supplants
the prior complaint.    When an amended complaint supersedes a
prior complaint, the amended complaint becomes the only live,
operative complaint in the case . . . ."       Holman v. Family
Health Plan, 227 Wis. 2d 478, ¶12, 596 N.W.2d 358 (1999)
(footnote omitted).   The amended complaint in the instant case
apparently became effective as to Jeff Anderson on February 3,
2014, when he was served with the amended complaint.

     "Generally, an amended complaint supersedes a previous
pleading and will determine a liability insurer's duty to
defend. . . . Accordingly, most courts require that the latest
amended pleadings or potential amendments be relied upon by the
insurer in determining its duty to defend." 14 Steven Plitt et
al., Couch on Insurance § 200:20 (3d ed. 2005).


                                   11
                                                                   No.     2015AP79.ssa


Design,     Inc.,    an    engineering    firm,18   and   R&B     Construction,      a

contractor,        naming    both   as    third-party      defendants.            Jeff

Anderson, the third-party plaintiff, had contracted with these

two firms to do work on the residence before the sale to Smith.

      ¶47    4th Dimension Design, Inc. inspected the residence,

assessed the basement walls' structural integrity, and submitted

a report to Jeff Anderson.             Jeff Anderson then gave the report

and engineering plans to the contractor, R&B Construction, with

directions     to    implement      4th   Dimension's      recommendations         and

plans.      According to Jeff Anderson's third-party complaint, R&B

Construction, among other things, repaired the basement's walls,

replaced drain tiles, installed a sump pump and sump crock, and

provided warranties against faulty workmanship or materials for

the basement repair and resolution of drainage issues.

      ¶48    Jeff         Anderson's      third-party        complaint          seeks

contribution or indemnity from these two third-party defendants,

should Jeff Anderson be held liable to Smith.19                   Contribution and

indemnification       seek    to    distribute      liability      among     multiple
actors that cause the same harm.

      ¶49    R&B    Construction       was     insured    under    a     Contractors

Businessowners' Liability Policy with West Bend Insurance.                        This

      18
           4th Dimension Design is not a party in the review before
us.
      19
       Jeff Anderson's third-party complaint alleged that if he
is found liable to Smith, "he is entitled to be indemnified and
held harmless from any and all liabilities . . . ," "requests
that the third party defendants contribute their respective
share    of    liability,"    and   asserts    "a    claim  for
contribution . . . against [the] third party defendants."


                                          12
                                                                   No.   2015AP79.ssa


is a standard Commercial General Liability Policy ("CGL"), which

"protects       the    insured     against    liability      for      damages    the

insured's negligence causes to third parties."20

     ¶50       R&B Construction tendered its defense in Anderson's

third-party       action    to    West   Bend     Insurance,       its    insurance

company.       West Bend Insurance intervened in the lawsuit.21                   It

moved for summary judgment, asserting that it has no duty to

defend R&B Construction because the Smith complaint and the Jeff

Anderson third-party complaint do not allege property damage (as

defined in the policy) caused by an occurrence (as defined in

the policy).           The circuit court granted summary judgment in

favor     of    West    Bend     Insurance,     concluding     that      West   Bend

Insurance had no duty to defend R&B Construction.

     ¶51       In deciding the instant case, we must examine both

Smith's complaint and Anderson's third-party complaint, as did

the parties, the circuit court, and the court of appeals.

     ¶52       After the circuit court ruled that West Bend Insurance

had no duty to defend R&B Construction in Jeff Anderson's third-
party complaint against R&B Construction, R&B Construction moved

for summary judgment seeking dismissal of Jeff Anderson's third-

party     complaint     against    it.    The    circuit     court    denied    this

motion, seemingly suggesting that R&B Construction's negligent

     20
       Wis. Label Corp. v. Northbrook Prop. & Cas. Ins. Co.,
2000 WI 26, ¶27, 233 Wis. 2d 314, 607 N.W.2d 276.
     21
       On tender of defense from its insured, an insurance
company can proceed in several different ways.  See Marks v.
Houston Cas. Co., 2016 WI 53, ¶41, n.21, 369 Wis. 2d 547, 881
N.W.2d 309.


                                         13
                                                                  No.   2015AP79.ssa


work at the residence may have caused the damage Smith claimed

was caused by Jeff Anderson.

    ¶53       The    circuit      court's     explanation   for     denying     R&B

Construction's motion for summary judgment against Jeff Anderson

is as follows:

    [T]here's some deviations which are significant in the
    design by 4-D of the basement walls.      Now I'm not
    concluding that that is in fact the standard or that
    in fact their deviation, if there is one, would
    contribute to the condition of this faulty leaky
    basement. But it is a disputed fact.

           . . . .

    So with the evidence before the court, there's——and
    taking all inferences in favor of the defendant, I
    can't find that there's not a dispute of material
    fact. I think there is a dispute of material fact and
    the allocation of responsibility within or——negligence
    within which is allocated, I am not sure about at this
    juncture nor do I have to decide.

           . . . .

    I don't know that we have the facts today.       But I
    wonder whether or not R&B shares responsibility, but
    we'll find that out through discovery I suspect.
    ¶54    R&B Construction stresses the disparity in the circuit
court's   rulings      on   the    two     summary   judgment     motions.      R&B

Construction interprets the circuit court as concluding, in R&B

Construction    Company's         summary    judgment    motion    against     Jeff

Anderson (the second summary judgment motion), that Anderson's

third-party     complaint         stated     a   valid   claim      against     R&B

Construction for negligent or faulty work on the basement or

drain tiles.        R&B Construction further asserts that because such
a claim against R&B Construction is the sort of claim that is

covered by R&B Construction's policy, West Bend Insurance should
                               14
                                                                     No.      2015AP79.ssa


have a duty to defend R&B Construction in Jeff Anderson's third-

party       complaint    against       R&B   Construction   and     that      West    Bend

Insurance should not have been relieved of any duty to defend

R&B Construction.

       ¶55     R&B Construction filed a petition for leave to file an

interlocutory appeal of the circuit court's denial of its motion

for summary judgment against Jeff Anderson, but the court of

appeals        denied      R&B     Construction's       petition.               On     R&B

Construction's          motion,        the   circuit   court      has        stayed    all

proceedings in the instant case pending before it.

       ¶56     In the instant case, the court of appeals refused to

consider the circuit court's order denying R&B Construction's

motion for summary judgment against Jeff Anderson (the second

summary judgment motion).                The court of appeals declared that

that order was not before it.22

       ¶57     Similarly,        the    circuit   court's    order       denying       R&B

Construction's motion for summary judgment against Jeff Anderson

(the second summary judgment) is not before this court.                               The
only    order     before    us     is    the   order   in   favor       of    West    Bend

Insurance against R&B Construction on the issue of whether West

Bend Insurance has a duty to defend R&B Construction in Jeff

Anderson's third-party complaint against it.

       ¶58     The basic issue presented is whether Jeff Anderson's

third-party complaint against R&B Construction (to which Smith's

complaint against Jeff Anderson is attached) states a claim that

       22
       Smith v. Anderson, No. 2015AP79, unpublished slip op.
(Wis. Ct. App. Dec. 22, 2015), ¶17 n.2.


                                             15
                                                                       No.   2015AP79.ssa


West Bend Insurance had a duty to defend R&B Construction.                           The

answer to this question depends on several rules and principles

of   law    that    we    shall    address       on   the   way   to   reversing     the

decision of the court of appeals and concluding that West Bend

Insurance has a duty to defend R&B Construction in the third-

party action.            We remand the cause to the circuit court for

further proceedings not inconsistent with this decision.

                                            I

      ¶59    The first issue of law we address is the standard of

review of the circuit court order granting summary judgment to

West Bend Insurance.              We then set forth the four-corners rule

used to determine whether West Bend Insurance has a duty to

defend its     insured.           We then examine rules for interpreting

complaints and insurance policies, and principles applicable to

contribution and indemnification.

      ¶60    When we review a circuit court order granting summary

judgment, we apply the same standard of review and methodology

as   that    used    by    the    circuit       court.23     Summary     judgment     is
appropriate when there is no issue of material fact and the

moving party is entitled to judgment as a matter of law.24

      ¶61    When no extrinsic evidence is admitted on the motion

for summary judgment (and none is considered in the instant

case), the interpretation of an insurance policy, including the


      23
       Fireman's Fund Ins. Co. of Wis. v. Bradley Corp., 2003 WI
33, ¶15, 261 Wis. 2d 4, 660 N.W.2d 666.
      24
           Wis. Stat. § 802.08(2) (2011-12).


                                            16
                                                                     No.    2015AP79.ssa


duty to defend, is a question of law that this court determines

independently of the circuit court or the court of appeals while

benefiting from their analyses.25

     ¶62        In determining whether an insurance company has a duty

to defend its insured, the court applies the four-corners rule.26

Under the four-corners rule, the court determines an insurance

company's duty to defend its insured by comparing the terms of

the insurance policy to the allegations of the complaint.                          "The

insurer's       duty     arises    when   the    allegations    in    the    complaint

coincide with the coverage provided by the policy."27                             Thus,

"[i]f     the    [factual]        allegations    in    the   complaint,      construed

liberally,        appear     to    give   rise    to    coverage,     insurers      are

required to provide a defense until the final resolution of the

coverage question by a court."28                 The proper application of the

four-corners rule presents a question of law that the court




     25
          Fireman's Fund, 261 Wis. 2d 4, ¶17.
     26
       In   Water   Well  Solutions  Service   Group,  Inc.   v.
Consolidated Insurance Co., 2016 WI 54, ¶24, 369 Wis. 2d 607,
881 N.W.2d 285, this court "unequivocally [held] that there is
no exception to the four-corners rule in duty to defend cases in
Wisconsin." Because we recently concluded that the four-corners
rule has no exceptions, we will not address R&B Construction's
argument asserting that the court should carve out an exception
to the four-corners rule.
     27
          Smith     v.     Katz,    226   Wis. 2d 798,       807,    595    N.W.2d 345
(1999).
     28
       Olson v. Farrar, 2012 WI 3, ¶30, 338 Wis. 2d 215, 229,
809 N.W.2d 1.


                                           17
                                                                  No.   2015AP79.ssa


decides    independently      of   the   determinations      rendered       by    the

circuit court and court of appeals.29

     ¶63    In applying the four-corners rule in the instant case,

the court is guided by the following rules for interpreting the

complaint:

          • A   court   construes     all     allegations   in    the    complaint

            liberally     when     comparing        the   allegations        of     a

            complaint to the terms of an insurance policy.30

          • We assume all reasonable inferences in the allegations

            of a complaint in favor of the insured.31

          • Assuming    all   reasonable       inferences    in    favor    of    the

            insured means that we "resolve any doubt regarding the

            duty to defend in favor of the insured."32

          • The   facts    alleged       in   the     complaint    establish       an

            insurance     company's      duty    to    defend     the    insured.33

     29
          Olson, 338 Wis. 2d 215, ¶22.
     30
       Estate of Sustache v. Am. Family Mut. Ins. Co., 2008 WI
87, ¶21, 311 Wis. 2d 548, 751 N.W.2d 845.
     31
       Doyle v. Engelke, 219 Wis. 2d 277, 284, 580 N.W.2d 245,
248 (1998).
     32
       Fireman's Fund 261 Wis. 2d 4, ¶20; Wausau Tile, Inc. v.
County Concrete Corp., 226 Wis. 2d 235, 266, 593 N.W.2d 445
(1999) ("Any doubt as to the existence of the duty to defend
must be resolved in favor of the insured.").
     33
       Doyle, 219 Wis. 2d at 284 ("In determining an insurer's
duty to defend, we apply the factual allegations present in the
complaint to the terms of the disputed insurance policy."); Am.
Family Mut. Ins. Co. v. Am. Girl, Inc., 2004 WI 2, ¶24, 268
Wis. 2d 16, 673 N.W.2d 65 ("First, we examine the facts of the
insured's claim to determine whether the policy's insuring
agreement makes an initial grant of coverage.").

                                                                        (continued)
                                         18
                                                            No.    2015AP79.ssa


           "[W]e must focus on the incident or injury that gives

           rise   to   the    claim,   not    the   plaintiff's    theory   of

           liability."34

    ¶64    In applying the four-corners rule in the instant case,

the court is guided by the following rules for interpreting an

insurance policy:

         • Words and phrases in insurance contracts are subject

           to   the    same   rules    of    construction   that    apply   to

           contracts generally.35


     Looking at the facts alleged rather than the legal theories
asserted   comports  with   the  concept  of   notice  pleading.
Wisconsin Stat. § 802.01(1)(a) requires complaints to "plead
facts, which if true, would entitle the plaintiff to relief."33
Data Key Partners v. Permira Advisors LLC, 2014 WI 86, ¶21, 356
Wis. 2d 665, 849 N.W.2d 693.
    34
       Stuart v. Weisflog's Showroom Gallery, Inc., 2008 WI 86,
¶36, 311 Wis. 2d 492, 753 N.W.2d 448 (internal quotation marks
and quoted source omitted).

     C.L. v. School Dist. of Menomonee Falls, 221 Wis. 2d 692,
701, 585 N.W.2d 826 (Ct. App. 1998), illustrates how to apply
this principle.     In C.L., the plaintiff alleged that her
school's librarian sexually assaulted her. The court of appeals
looked to the facts alleged and concluded that an "intentional
acts" exclusion in the insured's policy precluded coverage
despite the plaintiff's characterization of her legal claims as
alleged negligent infliction of emotional distress.    The court
stated that this legal theory, "although labeled as 'negligent'
infliction of emotional distress, allege[d] facts that certainly
are intentional in nature."    C.L., 221 Wis. 2d at 701.     The
court of appeals therefore concluded that the facts trumped the
legal theories asserted and precluded coverage under the policy.
C.L., 221 Wis. 2d at 704-05.

     14 Steven Plitt et al., Couch on Insurance § 200.19 (3d ed.
2005) ("It is the factual allegations instead of the legal
theories alleged which determine the existence of a duty to
defend.").


                                       19
                                                               No.    2015AP79.ssa


         • The primary objective in interpreting and construing a

           contract is to ascertain and carry out the true intent

           of the parties.36

         • The terms of an insurance policy are interpreted from

           the perspective of a reasonable insured, but a court

           will not find coverage that the insurance company did

           not contemplate or for which the insurance company has

           not received a premium.37

         • A court broadly construes the policy to "ensure that

           insurers do not frustrate the expectations of their

           insureds by [prematurely] resolving the coverage issue

           in their own favor[.]"38

         • An insurance company's duty to defend its insured in a

           lawsuit     is    necessarily     broader    than    its     duty    to

           indemnify,       the   other    duty   generally    imposed    on   an

           insurance company under a Commercial General Liability

           Policy.39     The insurance company is required to "defend

           all   suits      where   there    would     be   coverage     if    the
           allegations were proven . . . ."40               By contrast, the


    35
         Fireman's Fund, 261 Wis. 2d 4, ¶16.
    36
         Fireman's Fund, 261 Wis. 2d 4, ¶16.
    37
         Am. Girl, 268 Wis. 2d 16, ¶23.
    38
       Olson, 338 Wis. 2d 215, ¶32 (quoting Baumann v. Elliott,
2005 WI App 186, ¶10, 286 Wis. 2d 667, 704 N.W.2d 361).
    39
         Olson, 338 Wis. 2d 215, ¶29.
    40
         Olson, 338 Wis. 2d 215, ¶29.

                                      20
                                                                        No.    2015AP79.ssa


            duty    to    indemnify          kicks    in   once     a   covered     claim

            against the insured has actually been proven.

          • "The duty of defense depends on the nature of the

            claim and has nothing to do with the merits of the

            claim."41          Accordingly,          the   insurance      company      must

            provide a defense for any suit where there would be

            coverage,       even       if     the     allegations        are     "utterly

            specious."42

          • If any one claim falls within the policy coverage,

            regardless of the merits of the claim, the insurance

            company      has     a    duty    to     provide    a     defense    for    its

            insured.43

    ¶65     Finally we consider the terms of the complaints and

insurance    policy       in     light       of    Jeff    Anderson's         third-party

complaint's request for indemnification and contribution.                              Both




    41
          Elliott v. Donahue, 169 Wis. 2d 310, 321, 485 N.W.2d 403
(1992).
    42
          Smith    v.    Katz,       226    Wis. 2d 798,       807,     595    N.W.2d 345
(1999).
    43
       "Insurers have an obligation to defend the entire lawsuit
when one theory of liability falls within coverage."    2 Sheila
M. Sullivan et al., Anderson on Wisconsin Insurance Law § 7.82
(7th ed. 2015), citing Charter Oak Fire Ins. Co. v. Hedeen &
Cos., 280 F.3d 730, 738 (7th Cir. 2002) (applying Wisconsin law)
and School Dist. of Shorewood v. Wausau Ins. Cos., 170
Wis. 2d 347, 366, 488 N.W.2d 82 (1992), rejected on other
grounds by Johnson Controls, Inc. v. Employers Ins. of Wausau,
2003 WI 108, ¶¶38–39, 264 Wis. 2d 60, 665 N.W.2d 257.


                                             21
                                                                    No.    2015AP79.ssa


of   these      doctrines    distribute    loss    for      a   single    harm   among

multiple persons liable for the same harm.44

      ¶66       The underlying premise of the two doctrines is that

when multiple parties are liable for the same harm, the party

that paid may have a right, either contractually or under common

law, to reimbursement from the other parties.                      These doctrines

"tend to merge" even though they are distinct:

      Contribution distributes the loss by requiring each
      person to pay his proportionate share of the damages
      on a comparative fault basis.    Indemnification shifts
      the entire loss from one person who has been compelled
      to pay it to another who on the basis of equitable
      principles should bear the loss.45
      ¶67       "A cause of action for contribution is separate and

distinct from the underlying cause of action, whether the latter

involves contract or tort claims . . . ."46

      ¶68       Jeff    Anderson's       claim         of   indemnification           or

contribution rests on his claim of his "bearing . . . a greater

share      of   a   common   liability    than    is    justified,       and   not   the

source of the underlying liability."               "It is enough that a joint

liability from whatever source exist."47

      44
       Swanigan v. State Farm Ins. Co., 99 Wis. 2d 179, 196, 299
N.W.2d 234 (1980); see also 2 Sheila M. Sullivan et al.,
Anderson on Wisconsin Insurance Law § 10.19 (7th ed. 2015).
      45
           Swanigan, 99 Wis. 2d at 196 (internal citations omitted).
      46
       III The Law of Damages in Wisconsin § 31.29, at 26
(Russell M. Ware ed., 6th ed. 2016) (citing Johnson v. Heintz,
73 Wis. 2d 286, 295, 243 N.W.2d 815 (1976); State Farm Mut. Auto
Ins. Co. v. Schara, 56 Wis. 2d 262, 201 N.W.2d 758 (1972); Wis.
Stat. § 893.92).
      47
           Schara, 56 Wis. 2d at 266.

                                                                          (continued)
                                          22
                                                            No.   2015AP79.ssa


     ¶69    In sum, in the instant case, Jeff Anderson's third-

party      complaint   does     not        explicitly   state     that    R&B

Construction's work was "faulty, negligent, or defective."                But

evidence of R&B Construction's negligence need not be proved to

determine whether West Bend Insurance has a duty to defend.                In

a duty-to-defend case,        a court is not charged with deciding

liability and the issue of damages.48              A claimant (here Jeff

Anderson) is entitled to recover on the general principles of

indemnity when the claimant has been obliged to pay damages by

reason of another's (here R&B Construction's) torts.49

                                      II

     ¶70    We begin by examining Smith's complaint against Jeff

Anderson.     We then examine Jeff Anderson's third-party complaint

against R&B Construction.

     ¶71    Smith alleged the following facts in her complaint:50


     "[T]he contribution cause of action [may] be considered in
the same proceeding as the underlying cause of action, despite
the contingent nature of the contribution cause of action." III
The Law of Damages in Wisconsin § 31.29, at 26-27 (Russell M.
Ware ed., 6th ed. 2016) (citing Johnson, 73 Wis. 2d at 295).
     48
       2 Sheila M. Sullivan et al., Anderson on Wisconsin
Insurance Law § 7.53 (7th ed. 2015) ("An insured is not required
to produce evidence of the tortfeasor's negligence in a
declaratory-judgment   action   filed  to   determine  insurance
coverage.   A court in a declaratory judgment action is not
charged with deciding liability and damages issues.").
     49
       Milwaukee Mut. Ins. Co. v. Priewe, 118 Wis. 2d 318, 322-
23, 348 N.W.2d 585 (Ct. App. 1984) (citing Milwaukee v. Boynton
Cab Co., 201 Wis. 581, 586, 229 N.W. 28 (1930)).
     50
       As we explained previously, references are to Smith's
amended complaint.


                                      23
                                                                      No.       2015AP79.ssa


       • Jeff Anderson painted and cleaned the basement so that

          it appeared to be free from any defects prior to the

          sale of the residence to Smith.

       • After she purchased the residence, she discovered that

          the    drain     tiles       were     plugged,       that       the     basement

          leaked,     and        that     Jeff        Anderson        had        performed

          structural repair work without obtaining the required

          permits.

       • She was informed by experts that the defects existed

          when Jeff Anderson owned the house.

       • To repair or correct the condition of the property she

          will    need     to    obtain        proper     permits,         install          and

          replace the drain tile, and correct Jeff Anderson's

          structural repair work.

       • She     believed       that    Jeff    Anderson       failed       to    disclose

          problems with the property.

    ¶72   The    Smith    complaint       pleaded       four       causes       of   action

based on the facts stated above:
       • Breach of Contract. As a term of the contract, Jeff

          Anderson       warranted      that     he     had    no     notice         of    any

          conditions        affecting          the     property        except             those

          identified in his Real Estate Condition Report.                                 Jeff

          Anderson breached his contract by failing to disclose

          the    condition       of    the     property       in    his    Real       Estate

          Condition Report or in the Offer to Purchase.

       • Misrepresentation:               Intentional.              Jeff          Anderson
          represented that he had no notice or knowledge of any

                                         24
                                                        No.    2015AP79.ssa


       conditions affecting the property, failed to disclose

       that the basement leaked, and concealed leaky basement

       walls     with   paint,        knowing   the     true     material

       significant defects in the property with the intent to

       deceive and induce Smith to purchase the residence.

     • Misrepresentation (Violation of Wis. Stat. §§ 895.44651

       and 943.20(1)(d)).52      Jeff Anderson falsely represented

       that he had no notice or knowledge of any conditions

       affecting the property, failed to disclose that the

       basement leaked, and concealed leaky basement walls

       with    paint.   Jeff     Anderson's     false   representations

       were defects in violation of the statutes cited, with

       the intent to deceive and induce Smith to purchase the



51
     Wisconsin Stat. § 895.446(1) provides in relevant part:

(1) Any person who suffers damage or loss by reason of
intentional conduct that occurs on or after November
1,    1995,    and    that    is    prohibited   under
s. . . . 943.20, . . . has a cause of action against
the person who caused the damage or loss.
52
     Wisconsin Stat. § 943.20(1)(d) provides in relevant part:

(1) Acts.   Whoever does any of the following may be
penalized as provided in sub. (3):

       . . . .

(d) Obtains title to property of another person by
intentionally deceiving the person with a false
representation which is known to be false, made with
intent to defraud, and which does defraud the person
to whom it is made. "False representation" includes a
promise made with intent not to perform it if it is a
part of a false and fraudulent scheme.


                                 25
                                                         No.    2015AP79.ssa


           residence, entitling Smith to treble damages, attorney

           fees, and costs.

         • Misrepresentation (Violation of Wis. Stat. § 100.18:53

           Jeff   Anderson's    untrue,    deceptive,   and     misleading

           representations     in   the   purchase   contract     and   his

           concealing leaky basement walls with paint constituted

           fraudulent   misrepresentations     in    violation     of   the

           statute, entitling Smith to monetary damages, attorney

           fees, and costs.54


    53
         Wisconsin Stat. § 100.18 provides in relevant part:

    (1) No person . . . with intent to sell, distribute,
    increase the consumption of or in any wise dispose of
    any real estate . . . directly or indirectly, to the
    public    for    sale . . . shall    make,    publish,
    disseminate, circulate, or place before the public, or
    cause, directly or indirectly, to be made, published,
    disseminated, circulated, or placed before the public,
    in this state . . . an advertisement, announcement,
    statement or representation of any kind to the public
    relating to such purchase . . . [which] contains any
    assertion, representation or statement of fact which
    is untrue, deceptive or misleading.
    54
       See Everson v. Lorenz, 2005 WI 51, 280 Wis. 2d 1, 695
N.W.2d 298, for a discussion of Wis. Stat. § 100.18.          In
Everson, the court of appeals certified to this court the issue
"[whether] an alleged strict responsibility misrepresentation
and/or negligent misrepresentation in a real estate transaction
constitute an 'occurrence' for the purpose of a commercial
general liability insurance policy such that the insurer's duty
to defend is triggered.       In Everson, we concluded that no
coverage   existed   under   the   CGL   policy, which   defined
'occurrence' . . . .   The basis for our decision that the CGL
policy did not provide coverage was our conclusion that a
volitional misrepresentation could not be considered an accident
for purposes of coverage."        Stuart, 311 Wis. 2d 492, ¶30
(internal citations omitted).

                                                               (continued)
                                    26
                                                                        No.   2015AP79.ssa


      ¶73    The "Wherefore" clause of Smith's complaint asked for

judgment     against    Jeff    Anderson       for    the    difference         in   value

between the property as represented and its actual value, the

cost of placing the property in the condition it was represented

to be in, the cost of all repairs, the costs of the action, and

actual   reasonable      attorney    fees.            As    an   additional          remedy

Smith's complaint sought "rescission/restitution."

      ¶74    In sum, Smith alleges that Jeff Anderson breached his

contract with Smith and that Jeff Anderson is a tortfeasor, that

is,   that   Anderson    made     misrepresentations             to    induce     her   to

purchase     the   residence.        Factually,            her   complaint       alleges

damages arising out of buying a residence from Jeff Anderson

with a leaky basement and damaged drain tiles.                        The legal causes

of action in Smith's complaint against Jeff Anderson are breach

of contract and misrepresentation.                   Smith's complaint does not

mention R&B Construction directly or indirectly.

      ¶75    The following facts were alleged in Jeff Anderson's

third-party complaint against R&B Construction:
         • Jeff    Anderson       hired    4th       Dimension        to   inspect      and

             assess    the     basement    and       recommend        repairs    of     any

             defects in the basement walls and foundation.



     Smith's complaint alleging that Jeff Anderson's conduct
violated Wis. Stat. § 100.18 removed the complaint from coverage
as an occurrence under the liability insurance policy. See
Stuart, 311 Wis. 2d 492, ¶32.

     For     further   discussion     of       Everson,      see      ¶109,     nn.62-64,
infra.


                                          27
                                                            No.     2015AP79.ssa


• Jeff   Anderson      gave    4th    Dimension's        report           to    R&B

  Construction, contracting with it to perform repairs

  according to the report.

• In addition, Jeff Anderson directed R&B Construction

  to install drain tiles along the east wall and install

  a sump crock and a sump pump.                 Jeff Anderson and R&B

  Construction agreed that ground to the east of the

  residence     gradually       sloped         down    in       a     westward

  direction,     which        directed         run-off       towards            the

  basement's east wall.

• R&B    Construction     properly         installed        a       new    drain

  system,   a   sump    crock,       and   a    sump     pump,       and       made

  certain that the drainage system was tested and "was

  in good working order and draining to the proper area

  of the property."

• "Without admitting that any of the work performed by

  third-party     defendant,         R&B       Construction, . . . was

  faulty, negligent or defective," Jeff Anderson sought
  indemnification and contribution from R&B Construction

  were Jeff Anderson held liable to Smith.

• Based upon the warranties R&B Construction provided,

  Jeff Anderson requested R&B Construction to                             correct

  deficiencies, if any, arising out of its work.

• In the sale of the residence, Jeff Anderson made no

  warranties as to the condition of the residence, sold

  the residence to Smith in "as is" condition, and gave
  Smith "copies of the third party defendant's reports,

                              28
                                                                         No.   2015AP79.ssa


            details of work performed and warranties regarding the

            work performed."

         • Smith did not contact R&B Construction and request it

            to correct any deficiencies in its work.

    ¶76     In     sum,      Anderson's           third-party      complaint          seeks

contribution      or    indemnification           from   R&B    Construction       should

Anderson be held liable to Smith.

    ¶77     Jeff        Anderson's     third-party             complaint       does    not

explicitly       assert     that     R&B     Construction         was     negligent     in

repairing the residence or causing the basement to leak and the

drain tiles to be damaged and that R&B Construction's conduct

caused Anderson to be held liable to Smith.

    ¶78     These assertions can, however, be reasonably inferred

from the facts stated in Smith's complaint and Anderson's third-

party complaint.          The third-party complaint, "without admitting

that any of the work performed by third party defendant, R&B

Construction, . . . was faulty, negligent or defective," asked

that R&B Construction repair any defects should Jeff Anderson be
held liable to Smith.          The third-party complaint further stated

that based upon the warranties R&B Construction provided, Jeff

Anderson requested R&B Construction to correct deficiencies, if

any, arising out of its work.

    ¶79     These parts of the third-party complaint reveal that

Jeff Anderson apparently attempted to construct the third-party

complaint    to    be     consistent       with    his   denial     of    liability     to

Smith.      A reasonable reading of the Smith complaint and the
third-party complaint is that Anderson was asserting that if he

                                            29
                                                             No.   2015AP79.ssa


lost to Smith on her claims, he is entitled to compensation from

R&B Construction for its deficient performance that rendered him

liable to Smith.

      ¶80   It is evident from the two complaints that Smith and

Jeff Anderson have set forth distinct but interrelated facts and

claims.     Smith's complaint alleges defects with the residence

and   blames     Jeff   Anderson     for      breach   of     contract     and

misrepresentation.      Jeff Anderson obviously refuses to concede

liability to Smith and seeks compensation from R&B Construction

should he be liable to Smith.             R&B Construction's work on the

residence before the sale to Smith may have caused, contributed

to, or aggravated the defects alleged by Smith.

                                    III

      ¶81   Now that we have examined the complaints, we examine

the   coverage    provisions   of    the     Contractors     Businessowners'

policy that R&B Construction purchased from West Bend Insurance.

      ¶82   Under the policy, West Bend Insurance has a duty to

defend    R&B   Construction   if   the    facts   alleged    in   Anderson's
third-party complaint (to which Smith's complaint is attached)

constitute "property damage" caused by an "occurrence."

      ¶83   The West Bend Insurance policy contains standard CGL

policy language regarding "property damage" and "occurrence."

With regard to property damage, the policy reads as follows:

      We will pay those sums that the insured becomes
      legally   obligated  to   pay   as   damages  because
      of . . . "property damage" to which this insurance
      applies.   We will have the right and duty to defend
      the insured against any "suit" seeking those damages.
      However, we will have no duty to defend the insured

                                     30
                                                                   No.    2015AP79.ssa

    against any "suit" seeking damages for . . . "property
    damage" to which this insurance does not apply.

            . . . .

    This insurance applies to . . . "property damage" only
    if:

    (1) The . . . "property damage"                is     caused by an
    "occurrence"   that takes place                in     the   "coverage
    territory"; [and]

    (2) The . . . "property             damage"    occurs        during     the
    policy period . . . .

            . . . .

    "Property damage" means:

    a. Physical injury to tangible property, including all
    resulting loss of use of that property. All such loss
    of use shall be deemed to occur at the time of the
    physical injury that caused it; or

    b. Loss of use tangible personal property that is not
    physically injured.   All such loss of use shall be
    deemed to occur at the time of the "occurrence" that
    caused it. (Emphasis added.)
    ¶84     The facts that Smith alleges——"drain tiles are plugged

with iron ochre, the basement leaked"——allege physical injury to

tangible property or allege loss of use of tangible property.
The drain tiles were physically injured when they were clogged

and did not function properly.               Likewise, the basement walls

were physically injured, causing water leakage in the basement.

    ¶85     West     Bend     Insurance      characterizes          the      amended

complaint    as    alleging   only     pecuniary   loss     or    damage.         This

characterization      is    not   an   accurate    depiction       of     the   Smith

complaint.        Smith asserts that "in order to repair or correct

the condition of the property [she] will need to . . . install
and replace drain tile, and correct the defendant's structural

                                        31
                                                                       No.   2015AP79.ssa


repair    work."   Smith      demands       judgment     for     the    cost    of    all

repairs.     Ordinarily, tangible property that is not damaged does

not need to be repaired.               Read liberally and with reasonable

inferences    drawn     in    favor    of    the     insured,    the    facts    in   the

amended     complaint      allege     property       damage     as    defined    in   the

policy.

      ¶86    Furthermore,      the     Smith       complaint    seeks    damages      for

loss of use of tangible property.                      Loss of use of tangible

property    that   is      injured    is    property     damage       covered    in   the

policy.     The Smith complaint can be read to state that the drain

tiles and the basement have been physically injured so that they

cannot be used to their full extent.

      ¶87    Although we conclude that the amended complaint can be

read to allege "property damage" under the insurance policy,

West Bend Insurance asserts that it has no duty to defend its

insured in the instant case unless an "occurrence" caused the

property damage.

      ¶88    The   policy      defines       "occurrence"        as    "an     accident,
including continuous or repeated exposure to substantially the

same general harmful conditions."

      ¶89    The word "accident" in this definition of "occurrence"

was   considered      in     American       Family    Mutual     Insurance      Co.    v.

American Girl, Inc., 268 Wis. 2d 16, ¶37, in which the court

stated:

      The term "accident" is not defined in the policy. The
      dictionary definition of "accident" is:   "an event or
      condition occurring by chance or arising from unknown
      or remote causes."   Webster's Third New International
      Dictionary of the English Language 11 (2002). Black's

                                            32
                                                                            No.    2015AP79.ssa

       Law Dictionary defines "accident" as follows:       "The
       word 'accident,' in accident policies, means an event
       which   takes   place  without   one's    foresight   or
       expectation.   A result, though unexpected, is not an
       accident; the means or cause must be accidental."
       Black's Law Dictionary 15 (7th ed. 1999).
       ¶90    Applying this definition of "occurrence," the American

Girl court concluded that the damage at issue in that case——"the

continuous,      substantial,         and       harmful      settlement       of       the   soil

underneath      the    building"      that       resulted         from   inadequate          site-

preparation advice given by a soil engineer——was an occurrence

because       "[n]either      the     cause          nor    the     harm    was        intended,

anticipated, or expected."55                    The property damage in American

Girl    was    ongoing     and      was     an       unintended      result       of    a    soil

engineer's faulty advice, so it was caused by an "occurrence."56

       ¶91    In reaching this conclusion, however,                         American Girl

distinguished         "faulty    workmanship"              from    "accidents."             Faulty

workmanship      claims       alone       are    not       "occurrences"      because         the

resulting harm is not accidental.                          But the harm is accidental

when "faulty workmanship" causes an unexpected harm, such as the

damaged      building    in     American         Girl.        In    other   words,          "while

faulty workmanship is not an 'occurrence,' faulty workmanship




       55
            Am. Girl, 268 Wis. 2d 16, ¶38.
       56
       See also Acuity v. Society Ins., 2012 WI App 13, ¶17, 339
Wis. 2d 217, 810 N.W.2d 812 (excavation adjacent to building's
wall caused cracking of floor within the building, which also
led to other injuries to physical property; "[i]t is clear that
this damage was caused by the accidental soil erosion that
occurred because of faulty excavation techniques.    Accordingly,
the 'property damage' was caused by an 'occurrence' . . . . ").


                                                33
                                                                    No.   2015AP79.ssa


may        cause     an        'occurrence[,]' . . . [t]hat           is, . . . an

unintended event."57

      ¶92     The court of appeals              made   this point    in   Acuity v.

Society      Ins.,     2012     WI   App   13,     ¶34,   339   Wis. 2d 217,      810

N.W.2d 812, as follows:

      The lessons of American Girl, Glendenning's [Limestone
      & Ready-Mix Co. v. Reimer, 2006 WI App 161, 295
      Wis. 2d 556, 721 N.W.2d 704] and Kalchthaler [Keller
      Const. Co., 224 Wis. 2d 387, 397, 591 N.W.2d 169
      (1999)] are that while faulty workmanship is not an
      "occurrence,"   faulty   workmanship   may   cause   an
      "occurrence."   That is, faulty workmanship may cause
      an unintended event, such as soil settling in American
      Girl, the leaking windows in Kalchthaler, or, in this
      case,   the   soil   erosion,   and   that   event——the
      "occurrence"——may result in harm to other property.
      ¶93     The "occurrence" that R&B Construction is alleged to

have caused in the instant case is the continuous and repeated

exposure to water leaking into the basement and matter flowing

into and clogging the drain tiles.

      ¶94     Like the faulty workmanship in these prior cases, R&B

Construction's allegedly faulty workmanship in the instant case

led to our conclusion that R&B Construction's alleged negligence

led to leaking basement walls and clogging of the drain tiles.

      ¶95     Either      of     these     conditions       continually       caused

unexpected water damage to Smith's house.                  Water damage, when it




      57
           Acuity, 339 Wis. 2d 217, ¶24.


                                           34
                                                                              No.   2015AP79.ssa


is     a     condition          that      unexpectedly        results           from       faulty

workmanship, is an "occurrence" under the policy.58

       ¶96    Therefore,         we     conclude     that     the       complaints         allege

facts that Smith's residence experienced property damage caused

by an occurrence.

       ¶97    As we stated previously, Jeff Anderson is entitled to

recover      under       the    general       principles      of    indemnification            or

contribution        if     he    is    held    liable    to    Smith          for   breach     of

contract or misrepresentation by reason of R&B Construction's

alleged tortious conduct.

       ¶98    Here, Jeff Anderson's complaint can be read to allege

that R&B Construction negligently performed work on the Smith

residence, which caused property damage.                           This property damage

may    result      in    Anderson      being    held    liable      for       breach   of     his

contract with Smith and for misrepresentation of the condition

of the residence.

       ¶99    West       Bend     Insurance         ultimately       argues         that     Jeff

Anderson's         "garden-variety            contribution         or        indemnification"
claim passes through the same type of liability as that asserted

in Smith's complaint.                 According to West Bend Insurance, it has

no duty to defend because the insurance policy in the instant

case        does     not        provide       for      defense          or     coverage       of

misrepresentation claims.

       58
        Kalchthaler v. Keller Const. Co., 224 Wis. 2d 387, 391,
591 N.W.2d 169 (1999) (an "occurrence" under the policy existed
when a subcontractor's faulty work resulted in leaking windows,
which, in turn, caused water damage to the interior of the
house).


                                               35
                                                                          No.     2015AP79.ssa


      ¶100 West Bend Insurance's argument construes                              Wis. Stat.

§ 803.05,       which     permits       third-party       actions,        too      narrowly.

Section 803.05 provides, in relevant part, that "a defending

party,     as    a     3rd-party     plaintiff,         may    cause    a       summons       and

complaint to be served upon a person not a party to the action

who is or may be liable to the defending party for all or part

of the plaintiff's claim against the defending party . . . ."

Nothing    in    this        statutory    provision       precludes         a    third-party

plaintiff,       here    Jeff      Anderson,       from       asserting     a     theory       of

liability       that    is    distinct    from     the    theory       asserted         in   the

underlying action.59

      ¶101 Jeff Anderson's third-party complaint is distinct from

the   underlying        Smith      action.        Smith's       allegations        of    facts

relate     to    breach       of   contract       and    misrepresentation.                  Jeff

Anderson's      allegations        of    facts    in    his     third-party        complaint

against R&B Construction do not relate to misrepresentation by

R&B Construction; they relate to negligent performance of R&B

Construction's work for Jeff Anderson.
      ¶102 In sum, applying the four-corners rule and comparing

the liberal interpretation of the factual allegations in the

complaints (assuming all reasonable inferences in favor of the

      59
       See also 6 Wright & Miller, Federal Practice & Procedure
§ 1446 & n.23 (3d ed. 2016) (discussing Federal Rule of Civil
Procedure Rule 14, which has language analogous to Wis. Stat.
§ 803.05) ("The third-party claim need not be based on the same
theory as the main claim. . . . [because the] [p]urpose of
impleader would be defeated if its scope was circumscribed by a
requirement   of  identity   of   claims.     Therefore,   courts
consistently have held that impleader does not require an
identity of claims or even that they rest on the same theory.").


                                             36
                                                                      No.     2015AP79.ssa


insured) with the liberal interpretation of the text of the

policy (which we interpret from the perspective of a reasonable

insured), we conclude (resolving                  doubts in favor of the insured

and    focusing   on     the   incident       or    injury,    not   the      theory   of

liability) that West Bend Insurance has a duty to defend R&B

Construction in Jeff Anderson's action against it.                       This duty to

defend R&B Construction is triggered by facts in the complaints,

which   demonstrate       that    at    least      one   claim   falls      within     the

policy coverage, regardless of the merits of the claim:                                the

leaking basement walls and the clogging of the drain tiles are

property   damage,       caused    by    a    harmful     condition      that    is    the

unexpected    result      of     R&B    Construction's         allegedly       negligent

repairs in the basement.               The complaints thus assert "property

damage" caused by an "occurrence" under the terms of the policy.

                                             IV

       ¶103 Before we conclude, we turn to Qualman v. Bruckmoser,

163 Wis. 2d 361, 471 N.W.2d 282 (Wis. Ct. App. 1991), upon which

the court of appeals and West Bend Insurance rely.                          Qualman is
not dispositive in the instant case.

       ¶104 Asserting that the instant case is "on all fours" with

Qualman v. Bruckmoser, 163 Wis. 2d 361, 471 N.W.2d 282 (Wis. Ct.

App.    1991),    West    Bend     Insurance        contends     that    no     property

damages are alleged in the instant case.

       ¶105 Qualman, like the instant case, arose out of the sale

of residential real property.                 The home-buyer in Qualman sued

the seller, claiming breach of contract and misrepresentation of



                                             37
                                                                          No.   2015AP79.ssa


existing significant structural aspects of the property.60                               The

Qualman court noted that the damages for such claims, if proven,

would     be    "the        difference      between    the      market    value    of    the

property at the time of purchase and the amount actually paid"

and concluded that "the damages alleged . . . are pecuniary in

nature     and        do    not     constitute      property      damage"       under    the

insurance policy.61

     ¶106 The court of appeals in the instant case viewed the

instant case as being controlled by Qualman for two reasons:

(1) In the Smith case, as in the Qualman case, the complaint

alleges        that        the    seller    breached      its     contract      and     made

misrepresentations, and misrepresentations do not constitute an

"occurrence" as defined in the policy; and (2) in the Smith

case, as in the Qualman case, the complaint does not allege

"property damage."

     ¶107 Qualman            does    not,    however,     govern    the    instant      case

because        the     instant      case     is     significantly        different      from

Qualman.
     ¶108 We first compare the complaints in the two cases with

regard    to     factual         allegations      claiming      misrepresentations        to

determine whether West Bend Insurance's policy requirement of an

"occurrence" has been satisfied.




     60
       Qualman   v.   Bruckmoser,                   163   Wis. 2d 361,          367,     471
N.W.2d 282 (Wis. Ct. App. 1991).
     61
          Qualman, 163 Wis. 2d at 366.


                                               38
                                                                    No.   2015AP79.ssa


     ¶109 Qualman stands for the proposition that most, if not

all, misrepresentation claims are not "occurrences" as defined

in   the     standard     CGL   insurance        policy.62         Each     type     of

misrepresentation         requires   a        false    assertion,         and    false

assertions "require[] a degree of volition inconsistent with the

term accident."63         Therefore, "where there is a volitional act

involved in such a misrepresentation, that act removes it from

coverage     as   an     'occurrence'     under       the    liability     insurance

policy."64

     ¶110 In Qualman, the insurance company was asked to defend

against a complaint by a buyer alleging breach of contract and

intentional misrepresentation.            The Qualman court did not have

to consider a third-party complaint.

     ¶111 In the instant case, Smith's complaint alleges facts

against Jeff Anderson claiming he breached his contract and made

misrepresentations to her about the condition of the property to

induce the sale to her.          But we are not deciding whether West

Bend Insurance has a duty to defend Jeff Anderson.                              No one
claims     that   West   Bend   Insurance      has     a    duty   to   defend     Jeff

Anderson.

     ¶112 Rather, we are deciding whether West Bend Insurance

has a duty to defend R&B Construction in Jeff Anderson's third-


     62
       Everson v. Lorenz, 2005 WI                     51,    280   Wis. 2d 1,       695
N.W.2d 298. See also ¶72 n.54, supra.
     63
          Everson, 280 Wis. 2d 1, ¶¶19-20 (citing Qualman).
     64
          Everson, 280 Wis. 2d 1, ¶¶19-20 (citing Qualman).


                                         39
                                                                         No.      2015AP79.ssa


party action.           Jeff Anderson's third-party complaint does not

allege that R&B Construction made misrepresentations to him.

         ¶113 Anderson's complaint should be interpreted, as we have

previously          explained,      as    alleging       facts    claiming         that     R&B

Construction's negligent conduct caused property damage to the

residence and claiming that if Jeff Anderson is liable to Smith

for breach of contract or the tort of misrepresentation, R&B

Construction is liable to Jeff Anderson.

         ¶114 Neither Smith's complaint nor Jeff Anderson's third-

party     complaint         alleges      facts    that    suggest     R&B       Construction

committed a volitional act misrepresenting the quality of its

work      to       either    Smith       or     Jeff     Anderson.          A    reasonable

interpretation of the complaints supports our reading that, if

R&B Construction is liable to Anderson, its liability rests not

on   a    volitional        act    involving         misrepresentation          but   on    R&B

Construction's negligence in performing its construction work

for Anderson.

         ¶115 The rule of law Qualman sets forth——that an insurance
company does not generally have a duty to defend an insured

against        a   complaint      alleging       facts    constituting      a     claim     for

misrepresentation——is not dispositive of West Bend Insurance's

duty to defend R&B Construction against Jeff Anderson's factual

allegations of R&B Construction's negligence.

         ¶116 We     now     compare      the    complaints      in   Qualman         and   the

instant case with regard to whether the complaint in the instant

case sets forth a claim for property damage within the policy.



                                                40
                                                                 No.    2015AP79.ssa


      ¶117 The Smith complaint, unlike the Qualman complaint, was

not   limited    to    seeking       "difference     in   value"       (pecuniary)

damages.     Smith's complaint (in contrast to Qualman's complaint)

was not confined to the diminished value of Smith's residence.65

      ¶118 Smith      made   claims    in    the   alternative     for    property

damages:     Smith alleged that, in order to repair or correct the

condition of the property, she will have to replace drain tiles.

Drain tile is property and it need not be replaced unless it is

damaged.66      Smith's claim for repair of property evidences a

claim for property damage, including loss of property use.

      ¶119 Furthermore,       when    the    third-party    complaint       (along

with Smith's complaint) and West Bend's insurance policy are


      65
       See Stuart, 311 Wis. 2d 492, ¶53 (Qualman "involve[s]
'difference in value' damages as awarded to remedy failure to
disclose preexisting defects in property sales.    In this case,
in contrast, the Stuarts were awarded compensation for the
damage to their property that came after, and was caused by, the
defendants'    statutory  misrepresentation   and   common   law
negligence.").
      66
       West Bend also relies on Wausau Tile, Inc. v. County
Concrete Corp., 226 Wis. 2d 235, 593 N.W.2d 445 (1999), for the
proposition that an insurance company has no duty to defend an
insured when the complaint does not allege property damage. In
Wausau Tile, the court held that the loss Wausau Tile claimed
for repairing and replacing pavers was not property damage but
economic loss not covered by the policy; the pavers were damaged
because one or more of their ingredients was of insufficient
quality.   The parts of the complaint in Wausau Tile alleging
negligence, future personal injury claims of pedestrians, and
property damage to property adjoining the pavers were not in
litigation because the real parties in interest for these claims
were not parties to the action. Third parties, not Wausau Tile,
sustained and had claims for property damage or personal injury.
In the instant case, Jeff Anderson is the real party in interest
against whom claims for property damage are being made.


                                        41
                                                                           No.    2015AP79.ssa


liberally        read    and    construed     in    favor       of   the   insured,       Jeff

Anderson claimed that R&B Construction worked on the residence,

that R&B Construction was arguably negligent in its work on the

residence, and that R&B Construction's negligence in the work

resulted in property damage, including loss of property use.

      ¶120 In sum, the court of appeals erred in stating that "no

contention [is made] that R&B's faulty workmanship caused the

water exposure or the multiple issues that resulted therefrom."67

      ¶121 West          Bend     Insurance        has     a    duty   to        defend   R&B

Construction in Jeff Anderson's third-party action against it.

Anderson's claim for contribution or indemnification impliedly

rests on factual allegations that R&B Construction negligently

performed its work on the residence.                       The third-party complaint

is    separate          and    distinct     from         Smith's     complaint       against

Anderson, which rests on facts evidencing a breach of contract

or misrepresentation.              Reading the facts alleged in both the

Smith      and    Jeff        Anderson    complaints           liberally     and     drawing

reasonable inferences in R&B Construction's favor leads to the
following conclusion:             Smith's complaint alleges property damage

(the leaking basement walls and clogged drain tiles), which was

caused      by     an     occurrence       (the      accidental        result       of     R&B

Construction's negligent conduct).

      ¶122 Accordingly, West Bend Insurance has a duty to defend

and   the    cause       should    be    remanded        to    the   circuit      court   for

further proceedings not inconsistent with this decision.

      67
       Smith v. Anderson, No. 2015AP79, ¶17, unpublished slip
op. (Wis. Ct. App. Dec. 22, 2015).


                                            42
                                                                    No.   2015AP79.ssa


                                   * * * *

    ¶123 That's     the     opinion     I    think    the    court     should    have

adopted,    reversing the decision of the court of appeals and

remanding    the    cause     to   the        circuit       court    for     further

proceedings.

    ¶124 I     am   authorized     to       state    that    Justice      ANN   WALSH

BRADLEY joins this opinion.




                                        43
    No.   2015AP79.ssa




1
