                                                             2014 WI 21

                  SUPREME COURT            OF   WISCONSIN
CASE NO.:              2011AP1514
COMPLETE TITLE:        Robert L. Kimble and Judith W. Kimble,
                                  Plaintiffs,
                            v.
                       Land Concepts, Inc., John E. Stevenson and Jane
                       E.
                       Stevenson, Trustees of the John E. and Jane E.
                       Stevenson
                       Revocable Trust, Dorene E. Dempster and Mark F.
                       Herrell,
                                  Defendants,
                       John E. Stevenson and Jane E. Stevenson,
                                  Defendants-Respondents,
                       First American Title Insurance Company,
                                  Defendant-Appellant-Petitioner.


                         REVIEW OF A DECISION OF THE COURT OF APPEALS
                          Reported at 345 Wis. 2d 60, 823 N.W.2d 839
                                 (Ct. App. 2012 – Unpublished)

OPINION FILED:         April 22, 2014
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:         December 19, 2013

SOURCE OF APPEAL:
   COURT:              Circuit
   COUNTY:             Door
   JUDGE:              D. Todd Ehlers

JUSTICES:
   CONCURRED:
   DISSENTED:          ABRAHAMSON, C.J., BRADLEY, J., dissent. (Opinion
                       filed.)
  NOT PARTICIPATING:   PROSSER, J., did not participate.

ATTORNEYS:
       For the defendant-appellant-petitioner, there were briefs
by J. Bushnell Nielsen, Rebecca Leair, and Reinhart Boerner Van
Deuren S.C., Waukesha, and oral argument by J. Bushnell Nielsen.


       For the defendants-respondents, there was a brief by David
H. Weber, T. Wickham Schmidt, and Conway, Olejniczak & Jerry,
S.C., Green Bay, and oral argument by David H. Weber.
    An amicus curiae brief was filed by                James A. Friedman,
Kerry   L.   Gabrielson,   and   Godfrey   &   Kahn,   S.C.,   Madison,   on
behalf of the Wisconsin Insurance Alliance, the Wisconsin Civil
Justice Council, Inc., and Wisconsin Manufacturers & Commerce.




                                    2
                                                                   2014 WI 21
                                                           NOTICE
                                             This opinion is subject to further
                                             editing and modification.   The final
                                             version will appear in the bound
                                             volume of the official reports.
No.    2011AP1514
(L.C. No.   2009CV188)

STATE OF WISCONSIN                       :            IN SUPREME COURT


Robert L. Kimble and Judith W. Kimble,

            Plaintiffs,

      v.

Land Concepts, Inc., John E. Stevenson and Jane
E. Stevenson, Trustees of the John E. and Jane                  FILED
E. Stevenson Revocable Trust, Dorene E.
Dempster and Mark F. Herrell,                              APR 22, 2014
            Defendants,                                       Diane M. Fremgen
                                                           Clerk of Supreme Court
John E. Stevenson and Jane E. Stevenson,

            Defendants-Respondents,

First American Title Insurance Company,

            Defendant-Appellant-Petitioner.




      REVIEW of a decision of the Court of Appeals.                   Reversed

and cause remanded.



      ¶1    ANNETTE KINGSLAND ZIEGLER, J.       This is a review of an

unpublished decision of the court of appeals, Kimble v. Land
Concepts, Inc., No. 2011AP1514, unpublished slip op. (Wis. Ct.
                                                                      No.   2011AP1514



App. Oct. 11, 2012), affirming the judgment of the Door County

Circuit     Court,1    upholding     a    jury   award     of   punitive     damages

against      First     American      Title       Insurance      Company      ("First

American").

      ¶2     First American argues that the punitive damages award

against it was excessive and violated its right to due process

under the United States and Wisconsin constitutions.2

      ¶3     John E. and Jane E. Stevenson ("Stevensons")3 argue

that First American had no right to appeal the punitive damages

award     because     it    filed   its   post-verdict       motion    late.      The

Stevensons also argue that the award was reasonable in light of

First American's bad faith conduct, and the harm that they might

have suffered as a result of that bad faith.                      The Stevensons

further contend that punitive damages were appropriate because

First American's conduct needed to be deterred.

      ¶4     We conclude that the punitive damages award in this

case was excessive and deprived First American of its right to

due   process.         We    therefore    reverse    the     court     of   appeals'




      1
          The Honorable D. Todd Ehlers presided.
      2
       First American's petition for review addressed four
issues.    We granted review, however, solely on the issue of
whether the punitive damages award was unconstitutionally
excessive.
      3
       The original plaintiffs in this action, Robert L. Kimble
and Judith W. Kimble, assigned their rights under their title
insurance policy, including any claims against First American,
to the Stevensons as part of a settlement agreement.

                                          2
                                                                 No.   2011AP1514



decision and remand this case to the circuit court for entry of

a judgment against First American in the amount of $239,738.49.

                          I.     BACKGROUND FACTS

      ¶5    On October 26, 2004, Robert L. Kimble and Judith W.

Kimble ("Kimbles") purchased a lakefront lot located in the Town

of Nasewaupee in Door County ("Kimble Lot") from Dorene Dempster

("Dempster") and Mark Herrell ("Herrell").4               A private cut-off

road that crossed the property immediately to the west provided

access to the Kimble Lot.          That property was             owned by Land

Concepts, Inc. ("Land Concepts").

      ¶6    The deed executed by Dempster and Herrell conveying

the Kimble Lot to the Kimbles warranted that the property was

benefitted by two easements.           One easement purported to grant

the Kimble Lot use of a private driveway connecting it to County

Highway M across property to the north ("North Easement").                  That

private driveway had not been used in many years at the time of

the sale.    The other easement purported to grant the Kimble Lot

access to County Highway M across Land Concepts' property ("West
Easement").5    It is undisputed that the cut-off road was not

within the boundaries of either of these easements.

      ¶7    On October 27, 2004, First American issued the Kimbles

a   title   insurance   policy   for       the   Kimble   Lot.      The   policy

      4
       Dempster and Herrell had originally purchased the lot from
the Stevensons.   All were initially defendants in the Kimbles'
lawsuit.
      5
       The West Easement traversed property belonging only to
Land Concepts, while the North Easement traversed property
belonging to both Land Concepts and other owners.

                                       3
                                                                       No.   2011AP1514



obligated First American to defend and indemnify the Kimbles for

any       covered        loss,     including       losses        resulting        from

"[u]nmarketability         of    the   title"   and    "[l]ack    of     a   right    of

access to and from the land."                 The policy did not insure any

specific route of access.

      ¶8        In early 2008, the Kimbles listed their property for

sale with a real estate agent.6               On March 5, 2008, the Kimbles'

agent received a letter from Land Concepts stating that the

Kimbles "do not own——and cannot convey——any access rights to

County Highway M" from the Kimble Lot.                      The letter instructed

the agent to make prospective purchasers of the Kimble Lot aware

of lack of access rights "[i]n order to avoid possible future

misunderstandings and/or confusion."                   On March 17, 2008, the

Kimbles' attorney contacted the Kimbles' local insurance agent,

Marilyn     DeNamur       ("DeNamur"),     about      the     dispute.        DeNamur

forwarded        the   matter     to   Donald    Schenker       ("Schenker"),        an

assistant vice president at First American.

      ¶9        On March 18, 2008, DeNamur provided Schenker with the
deeds     and    other    recorded     documents      purportedly      granting      the

North and West Easements to the Kimbles' predecessors in title.

In a follow-up message to Schenker on March 28, DeNamur noted

that there appeared to be a problem with the deeds purporting to

grant and convey the North Easement.                    DeNamur asked Schenker




      6
       The precise date of the real estate listing is not a part
of the record.

                                          4
                                                                          No.       2011AP1514



whether she should "continue to dig for more documentation?"

Schenker never asked for more research.7

     ¶10    On    March    31,       2008,    Schenker,        on      behalf       of    First

American, sent the Kimbles a letter which addressed the access

issue.     Schenker indicated in his letter that he believed the

West Easement was defective.8                 Schenker asserted, however, that

the North Easement continued to provide the Kimble Lot access to

the highway, and because the title remained as insured, First

American    had    no    duty   to    intervene         in   the    dispute.             In   his

letter,     Schenker      described      the       chain     of     title   he       claimed

supported    the    North       Easement,         but   made      no   mention       of       the

problems identified by DeNamur.

     ¶11    On May 27, 2008, the Kimbles forwarded Schenker a copy

of a letter they intended to send to Land Concepts asserting

their right to use the cut-off road.                    The Kimbles asked Schenker

whether the letter jeopardized their title insurance policy.                                  On

May 28, 2008, Schenker assured the Kimbles that it did not,

again implicitly asserting that another right of access existed.
     ¶12    On    June    13,    2008,       the   Kimbles     received         a    response

letter from Land Concepts, wherein Land Concepts threatened to

"close the access over [its] property" if the dispute was not

     7
       The record is devoid of any direct response from Schenker
to DeNamur's March 28, 2008 e-mail message.
     8
       Specifically, Schenker wrote that the document recording
the easement failed to identify the property benefitted, and
thus failed to comply with Wis. Stat. § 706.02(1) (2009-10).
All subsequent references to the Wisconsin Statutes are to the
2009-10 version unless otherwise indicated.

                                              5
                                                                    No.    2011AP1514



"promptly resolved."        On June 18, 2008, the Kimbles contacted

Schenker regarding the threatened closure.                     The Kimbles asked

Schenker whether First American would insure the North Easement

under the title policy if the Kimbles constructed a new driveway

following the route of that easement.

    ¶13     On June 25, 2008, Schenker reiterated to the Kimbles

that their title policy did not insure any particular route of

access.      Schenker     again    asserted        that    the    North    Easement

provided   access   and     stated,    "[w]hether         there   is    some   legal

defense to prevent the Kimbles from using it, which falls under

some exclusion or exception in the policy, we do not know."

Schenker further recommended that the Kimbles have a survey of

the North Easement performed before constructing any driveway.

    ¶14     The   Kimbles     continued       to     market       their    property

throughout 2008, relying on Schenker's assurances that it had

good access to the highway.           Land Concepts continued to dispute

the Kimbles' right of access, but did not follow through on its

threat to physically close the cut-off road.
    ¶15     On January 12, 2009, the Kimbles received a cash offer

to purchase their property.         The sale was made contingent on the

access    issue   being   resolved.        Despite        an   extension    on   the

original 30-day time limit, the Kimbles were unable to negotiate

a resolution with Land Concepts and lost the sale.

                          II.     PROCEDURAL POSTURE

    ¶16     On June 3, 2009, the Kimbles filed suit against Land

Concepts and the Stevensons.           The Kimbles sought a declaration
that the North Easement was valid and sought a                         prescriptive
                                       6
                                                                    No.     2011AP1514



easement for their use of the cut-off road.                     The Kimbles also

claimed that Land Concepts, in recording the West Easement, had

slandered the title to the Kimbles' property.

       ¶17    On   October    23,       2009,    the    Kimbles    amended       their

complaint     adding    breach     of    warranty      claims   against    Dempster,

Herrell, and the Stevensons,               and a breach of contract claim

against First American for failing to defend the title to their

property.

       ¶18    On July 21, 2010, the Kimbles settled their claims

against all the defendants except First American.                         As part of

the    settlement,      the   Kimbles      and    the     Stevensons      paid   Land

Concepts $40,000 to secure an easement over the route of the

existing      cut-off   road.        The    Stevensons      paid   an     additional

$10,000 to the Kimbles for an assignment of the Kimbles' rights

under the title insurance policy, including any claims against

First American.

       ¶19    On August 6, 2010, the Stevensons filed a cross-claim

against First American, alleging breach of contract and breach
of fiduciary duty and bad faith in First American's refusal to

defend the title to the Kimble Lot.

       ¶20    On December 1, 2010, First American filed a motion for

declaratory and summary judgment, asking the court to dismiss

the Stevensons' cross-claim.               First American argued that the

Stevensons were not "insureds," and thus had no rights under the

title policy.        First American also contended that the Kimbles

were    not    permitted      to    settle      their    claims    against       other


                                           7
                                                                  No.   2011AP1514



defendants without the written consent of First American.                   First

American asserted that the title policy was void as a result.

    ¶21       The Stevensons argued that the Kimbles were permitted

to assign their rights under the title policy, and that the

partial settlement was proper under the terms of the insurance

contract.          The Stevensons also asserted that, to the extent

summary judgment was warranted, it should be granted against

First American on the Stevensons' breach of contract claim.

    ¶22       On January 18, 2011, the circuit court denied First

American's motion for declaratory and summary judgment.                       The

court concluded that the assignment of rights from the Kimbles

to the Stevensons was proper and that there were issues of fact

to be tried regarding the Stevensons' breach of contract and

breach of fiduciary duty and bad faith claims.

    ¶23       On February 4, 2011, the Stevensons filed a motion in

limine which asked the court to exclude any evidence of the

monetary terms of the settlement agreements between the Kimbles

and the other defendants.
    ¶24       On February 21, 2011, First American filed a motion in

limine asking the court to exclude evidence that the Kimbles'

title   was    unmarketable      as   a   result   of   the   access    problems.

First American argued that, while the access issues might have

impaired the value of the property, they did not constitute a

defect in the title.

    ¶25       On    March   1,   2011,    the   circuit   court    granted    the

Stevensons' motion in limine to exclude evidence of the terms of
the settlement between the Kimbles and the other defendants.
                                          8
                                                                    No.     2011AP1514



Additionally, the circuit court denied First American's motion

in limine to exclude evidence of unmarketability.                         In denying

First American's motion, the court determined that the issue of

marketability was a legal question to be determined by the court

prior to trial.          The court concluded that title to the Kimble

Lot   was    rendered     unmarketable      by    the    access   dispute.      As   a

result, the court concluded that coverage was triggered under

the title insurance policy.            The court determined that it was

for the jury to decide whether First American's decision not to

defend      the    Kimbles    under   the       policy   constituted      breach     of

contract and breach of fiduciary duty and bad faith.

       ¶26     On March 2, 2011, the jury trial began.              At trial, the

Stevensons presented evidence that First American was obligated

to    defend      the   Kimbles'   title        and   failed   to   do    so.      The

Stevensons further presented evidence that First American knew

the North Easement was defective and concealed that information

from the Kimbles.         First American presented evidence that it had

a good faith belief that the North Easement provided access, and
that as a result, its failure to disclose the defect to the

Kimbles was merely a mistake.9

       ¶27     On March 3, 2011, the jury returned a verdict in favor

of the Stevensons.           The jury found that First American breached


       9
       As we have granted review only on the legal issue of
whether the punitive damages award in this case was excessive,
this opinion does not provide a detailed description of the
arguments presented at trial.    The evidence in the record is
assumed to be sufficient to support the jury's findings in all
respects except the size of the punitive damages award.

                                            9
                                                                    No.    2011AP1514



its contract and exercised bad faith in refusing to defend the

Kimbles' title.         The jury awarded the Stevensons $50,000 in

compensatory damages for the breach of contract, and $1,000,000

in punitive damages to punish First American's bad faith.

    ¶28     On March 24, 2011, First American filed three motions

after the verdict with the circuit court.10                     Initially, First

American asked the court, pursuant to Wis. Stat. § 805.14(5)(c),

to reduce the compensatory damages award.                  Next, First American

asked the court to change the jury's answer to the bad faith

question to "no" and delete the jury's punitive damages award.

First    American   asserted    that     there    was    insufficient        evidence

supporting    the   findings.      Finally,       First       American    asked   the

court, in the alternative, to set aside the punitive damages

award, which First American argued was excessive, and order a

new trial on damages.

    ¶29     The Stevensons opposed First American's post-verdict

motions.      The   Stevensons     argued       that    the    jury's     award   was

appropriate,     and    that     First        American's       conduct    justified
punitive    damages.      Further,      the     Stevensons      argued     that   the

jury's punitive damages award was not excessive.

    ¶30     On   June   14,    2011,   the     circuit     court    granted    First

American's    motion    regarding      the     compensatory        damages    award,

reducing it to $29,738.49.             The court denied First American's


    10
       The Stevensons argue that First American waived its right
to appeal the punitive damages award by filing its post-verdict
motions late.    See Wis. Stat. § 805.16(1).    We address this
argument in part IV(A) of this opinion.

                                         10
                                                                   No.     2011AP1514



other motions, however, allowing the bad faith finding and the

punitive     damages      award    to   stand.     The    court    then     entered

judgment against First American in the amount of $1,029,738.49.

      ¶31    On June 29, 2011, First American filed its notice of

appeal.      On July 11, 2011, First American filed a motion with

the circuit court requesting the court stay the effect of the

judgment pending appeal.            On August 3, 2011, the circuit court

granted First American's motion.

      ¶32    Before the court of appeals, First American made four

arguments.     First, it argued that the Kimbles were not permitted

to assign their rights under the title insurance policy to the

Stevensons.        Second,    First     American   argued   that     the    circuit

court improperly determined that coverage under the policy was

invoked prior to trial.            Third, First American argued that there

was insufficient evidence to support the jury's finding of bad

faith.      Finally, First American argued that the punitive damages

award was excessive.11

      ¶33    The Stevensons argued that the Kimbles' assignment of
their rights under the insurance policy was valid, and that the

circuit court properly found coverage under the title policy as

a   matter    of   law.      The   Stevensons    also    contended       that   First


      11
       First American also argued that the compensatory damages
award should be further reduced. Because this argument was not
raised in First American's post-verdict motion, however, the
court of appeals declined to address the issue. Kimble v. Land
Concepts, Inc., No. 2011AP1514, unpublished slip op., ¶37 (Wis.
Ct. App. Oct. 11, 2012) (citing Segall v. Hurwitz, 114
Wis. 2d 471, 489, 339 N.W.2d 333 (Ct. App. 1983)).

                                         11
                                                                              No.     2011AP1514



American's conduct supported the jury's finding of bad faith,

and that the punitive damages award was not excessive.

      ¶34        On October 11, 2012, the court of appeals affirmed the

circuit court.            Kimble, No. 2011AP1514, slip op., ¶1.                           First,

the court of appeals concluded that the Kimbles were permitted

to assign their rights under the title policy to the Stevensons,

and   that       they    had     not    violated        the    terms    of   the     policy   in

agreeing to a partial settlement.                         Id., ¶¶16-17.            Second, the

court      of    appeals        affirmed       the    circuit     court's      determination

that, as a matter of law, there was coverage under the title

policy.         Id., ¶¶24-28.            Third, the court appeals affirmed the

circuit court's determination that the jury's finding of bad

faith      was    supported        by    sufficient           evidence.       Id.,    ¶¶33-35.

Finally,        the     court    of     appeals       summarily       affirmed      the   jury's

punitive         damages        award,        finding    First        American's      argument

regarding        excessiveness           of    the     award     to    be    "insufficiently

developed."           Id., ¶41.12




      12
       Given that the availability of "'meaningful and adequate
review by the trial court' and subsequent appellate review" of
punitive damages awards is necessary to ensure that such awards
are not imposed in an arbitrary manner, see Honda Motor Co.,
Ltd. v. Oberg, 512 U.S. 415, 420 (1994), the court of appeals'
lack of analysis is remarkable.     We take this opportunity to
remind courts, both trial and appellate, of their obligation to
ensure that punitive damages awards comply with due process.

                                                 12
                                                                   No.     2011AP1514



      ¶35       On December 28, 2012, First American petitioned this

court for review, which we granted on July 18, 2013.13

      ¶36       On September 3, 2013, the Stevensons filed a motion

for summary disposition in this court, arguing that by filing

its   post-verdict         motion   late,    First    American   had     waived    its

right      to   appellate    review.        See    Wis.   Stat. §§ 805.14(5)       and

805.15(1).         We held the motion in abeyance.14

                              III. STANDARD OF REVIEW

      ¶37       "[T]he constitutional issue of punitive damages merits

de novo review."            Trinity Evangelical Lutheran Church & Sch.-

Freistadt v. Tower Ins. Co., 2003 WI 46, ¶47, 261 Wis. 2d 333,

661 N.W.2d 789 (citing Cooper Indus., Inc. v. Leatherman Tool

Grp.,      Inc.,     532   U.S. 424,   431        (2001)).    "[I]n    determining

whether a jury's award [is] excessive, . . . the reviewing court

properly review[s] the entire record 'ab inito' . . . ."                          Id.,

¶48 (citing Mgmt. Computer Servs. v. Hawkins, Ash, Baptie & Co.,

206 Wis. 2d 158, 192 n.32, 557 N.W.2d 67 (1996)).




      13
       Because we granted review solely on the issue of whether
the punitive damages award was excessive, this opinion assumes,
without deciding, that the assignment was valid, that there was
coverage under the insurance policy, and that the jury's finding
of bad faith was supported by the evidence.
      14
       In response to the Stevensons' motion for summary
disposition, First American filed a motion to supplement the
record, purporting to show that its post-verdict motion was
filed timely, and a motion to strike the Stevensons' reply brief
on the motion for summary disposition.    The motion for summary
disposition, as well as these additional motions are rendered
moot by our decision and thus are not addressed.

                                            13
                                                                       No.   2011AP1514



      ¶38    We    recognize    that   our     prior   case     law,    particularly

Jacque v. Steenberg Homes, Inc., 209 Wis. 2d 605, 563 N.W.2d 154

(1997), has created confusion with respect to the standard of

review in punitive damages cases.                    Jacque, however, predates

both Cooper, wherein the United States Supreme Court clarified

that de novo is the appropriate standard of review, and Trinity,

wherein     this    court    explicitly     adopted    that     standard.         While

judges     "serve    as     gatekeepers     before     sending    a     question    on

punitive damages to the jury," Strenke v. Hogner, 2005 WI 25,

¶40, 279 Wis. 2d 52, 694 N.W.2d 296,15 once the issue of punitive

damages     is    properly    before   the     jury,   its    decision       to   award

punitive damages is accorded deference.                 The size of the award,

however, is subject to de novo review to ensure it accords with

the   constitutional         limits    of      due   process.          Trinity,     261

Wis. 2d 333, ¶¶47-49.

                                   IV.      ANALYSIS

                               A. Post-Verdict Motion

      ¶39    As an initial matter we address the argument, raised
by the Stevensons in their motion for summary disposition, that

First American lost its right to appeal the punitive damages

award when it failed to timely file its post-verdict motion

under Wis. Stat. § 805.16(1).




      15
       Strenke v. Hogner interpreted Wis. Stat. § 895.85(3)
(2001-02), the predecessor to the current punitive damages
statute.   2005 WI 25, ¶2, 279 Wis. 2d 52, 694 N.W.2d 296; see
also Wis. Stat. § 895.043(3).

                                          14
                                                                         No.   2011AP1514



       ¶40     Wisconsin Stat. § 805.16(1) provides that "[m]otions

after verdict shall be filed and served within 20 days after the

verdict is rendered, unless the court, within 20 days after the

verdict is rendered, sets a longer time by an order specifying

the    dates    for    filing    motions,        briefs    or     other    documents."

Further, a litigant's failure to comply with the statute causes

"the   circuit       court   [to]      'los[e]    competency       to     exercise     its

jurisdiction.'"         Hartford Ins. Co. v. Wales, 138 Wis. 2d 508,

513, 406 N.W.2d 426 (1987) (quoting                Jos. P. Jansen v. Milwaukee

Area Dist. Bd., 105 Wis. 2d 1, 10, 312 N.W.2d 813 (1981)).

       ¶41     The   circuit    court's     inability      to     consider      a   post-

verdict      motion,    however,        does     not   deprive      this       court   of

appellate      jurisdiction.           Failure    to   comply      with     Wis.    Stat.

§ 805.16 "limit[s] the issues that may be asserted as a matter

of right on the appeal . . . ."                 Wales, 138 Wis. 2d at 510-511.

"A trial court's failure to conform with sec. 805.16, Stats.,

however, does not strip this court of its discretionary power[]"

to    review    the    case.        Brandner      v.   Allstate      Ins.      Co.,    181
Wis. 2d 1058, 1071, 512 N.W.2d 753 (1994).

       ¶42     The merits issue in this case is of constitutional

dimension and has been fully briefed and argued by both parties.

We therefore exercise our discretion and address whether the

punitive        damages        award      against         First         American       was

unconstitutionally excessive.

                             B. Punitive Damages Award

       ¶43     Punitive damages are not intended to compensate the
plaintiff, but rather are awarded "to punish the wrongdoer, and
                                           15
                                                                            No.    2011AP1514



to    deter    the       wrongdoer    and    others       from       similar      conduct."

Trinity, 261 Wis. 2d 333, ¶50.                   "Punitive damages may properly

be    imposed       to    further    a     State's       legitimate         interests       in

punishing unlawful conduct and deterring its repetition."                                 BMW

of N. Am., Inc. v. Gore, 517 U.S. 559, 568 (1996).16

      ¶44     In    Wisconsin,       punitive      damages       are     authorized         by

statute,      see    Wis.    Stat.    § 895.043,         and    may    be    awarded      "if

evidence      is     submitted       showing       that        the     defendant      acted

maliciously toward the plaintiff or in an intentional disregard

of the rights of the plaintiff."                  Wis. Stat. § 895.043(3).                The

judge has the duty to act as the "gatekeeper" when determining

whether the issue of punitive damages is properly before the

jury.       Strenke,       279    Wis. 2d 52,      ¶40.         Once    the       judge   has

determined that the issue of punitive damages is properly before

the   jury,     whether     to    actually       award    punitive       damages      "in    a

particular case is entirely within the discretion of the jury."

Jacque, 209 Wis. 2d              at 626.     Both the judicial determination

regarding whether punitive damages is a proper jury question and
the size of the jury's punitive damages award are subject to

review.       The Due Process Clause of the Fourteenth Amendment


      16
       Because punitive damages serve the State's interests,
rather than serving to compensate a party, punitive damages
awards do not implicate a plaintiff's right to a remedy or to a
jury trial. See Wis. Const. art. I, §§ 5 and 9; compare Ferdon
ex rel. Petrucelli v. Wis. Patients Comp. Fund, 2005 WI 125,
¶69, 284 Wis. 2d 573, 701 N.W.2d 440 (suggesting that a
statutory   cap  on   noneconomic  compensatory  damages  might
implicate a plaintiff's right to a jury trial and to a remedy
under the Wisconsin Constitution).

                                            16
                                                                      No.   2011AP1514



"imposes substantive limits on the size of a punitive damages

award."      Trinity, 261 Wis. 2d 333, ¶49 (citing Mgmt. Computer

Servs., 206 Wis. 2d at 193).17

      ¶45    A punitive damages award "is excessive, and therefore

violates due process, if it is more than necessary to serve the

purposes of punitive damages, or inflicts a penalty or burden on

the   defendant         that   is   disproportionate      to    the    wrongdoing."

Trinity, 261 Wis. 2d 333, ¶50.               "Elementary notions of fairness

enshrined     in    our    constitutional     jurisprudence       dictate    that   a

person receive fair notice not only of the conduct that will

subject     him    to    punishment,   but    also   of   the    severity    of   the

penalty that a State may impose."                BMW, 517 U.S. at 574; see

also Trinity, 261 Wis. 2d 333, ¶51.

      ¶46    The United States Supreme Court has applied a three-

part test to determine whether an award of punitive damages is

excessive.         See BMW, 517 U.S. at 574-75; State Farm Mut. Auto

Ins. Co. v. Campbell, 538 U.S. 408 (2003).                     This test asks the

reviewing court to weigh: "(1) the degree of egregiousness or
reprehensibility of the conduct; (2) the disparity between the


      17
       We have previously stated that "the evidence must be
viewed in the light most favorable to the plaintiff, and a
jury's punitive damages award will not be disturbed, unless the
verdict is so clearly excessive as to indicate passion and
prejudice."     Trinity, 261 Wis. 2d 333, ¶56; Jacque, 209
Wis. 2d at 626-27.   Given that punitive damages awards mandate
de novo review, see Trinity, 261 Wis. 2d 333, ¶47, this language
should not be read to require deference to the amount of the
jury's award.    Rather, stating that an award is "so clearly
excessive as to indicate passion and prejudice" is simply
another way of referring to an award that violates due process.

                                         17
                                                                       No.    2011AP1514



harm or the potential harm suffered and the punitive damages

award; and (3) the difference between the punitive damages and

the     possible       civil     or    criminal     penalties      imposed    for     the

conduct."            Trinity,    261    Wis. 2d 333,        ¶52   (citing    BMW,     517

U.S. at 575).

      ¶47       Wisconsin       case    law    calls   on     courts    to    apply     a

substantively identical test applying six factors rather than

three:

                1.    The grievousness of the acts;

                2.    The degree of malicious intent;

           3.   Whether   the   award  bears   a   reasonable
      relationship to the award of compensatory damages;

           4.   The potential damage that might have been
      caused by the acts;

           5.   The ratio of the award to civil or criminal
      penalties that could be imposed for comparable
      misconduct; and

                6.    The wealth of the wrongdoer.
Trinity,        261    Wis. 2d 333,      ¶53;      Mgmt.    Computer    Servs.,       206

Wis. 2d at 194.             Wisconsin courts are called upon to analyze

only "those factors which are most relevant to the case, in

order      to    determine       whether      a    punitive       damages    award    is

excessive."18         Id.

      18
       While Wisconsin courts are free to apply these six
factors flexibly, based upon their relevancy to a given case,
they should be analyzed in conjunction with the three
constitutional "guideposts" described by the Supreme Court in
BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 575 (1996).    The
factors are not intended to supplant the test mandated by the
Constitution.

                                              18
                                                                    No.     2011AP1514



                               1. Reprehensibility

    ¶48        "'[T]he most important indicium of the reasonableness

of a punitive damage[s] award is the degree of reprehensibility

of the defendant's conduct.'"                Trinity, 261 Wis. 2d 333, ¶57

(quoting Jacque, 209 Wis. 2d at 628).                "This principle reflects

the accepted view that some wrongs are more blameworthy than

others."       BMW, 517 U.S. at 575.

    ¶49        In Campbell, the Supreme Court explained the standard

courts should apply in determining the reprehensibility of a

defendant's conduct:

    We   have   instructed    courts   to   determine   the
    reprehensibility   of   a   defendant  by   considering
    whether: the harm caused was physical as opposed to
    economic; the tortious conduct evinced an indifference
    to or a reckless disregard of the health or safety of
    others; the target of the conduct had financial
    vulnerability; the conduct involved repeated actions
    or was an isolated incident; and the harm was the
    result of intentional malice, trickery, or deceit, or
    mere accident.    The existence of any one of these
    factors weighing in favor of a plaintiff may not be
    sufficient to sustain a punitive damages award; and
    the absence of all of them renders any award suspect.
538 U.S. at 419 (citation omitted); see also BMW, 517 U.S. at

576-77.

    ¶50        Turning to the case at issue, we must acknowledge that

First American's conduct in the case at issue is reprehensible.

First American knew that             the North Easement did not provide

access    to    the   Kimble   Lot    and    that    there   was   no     reasonable

alternative       access    point,     and    yet     refused      to     honor   its

obligation      to    assist   the   Kimbles    in    defending     their     title.
First American further withheld the information it had in its

                                        19
                                                                      No.    2011AP1514



possession from the Kimbles, causing them to waste valuable time

and resources.           These circumstances support an award of punitive

damages.19         The    question,    however,    is     whether    the    degree   of

reprehensibility supports the punitive damages actually awarded.

     ¶51     In that regard, it is noteworthy that none of the

reprehensibility          factors     identified    by    the    Supreme    Court    in

Campbell are present in this case.                 The damage suffered by the

Kimbles      was     indisputably       economic,        not    physical.       First

American's bad faith did not endanger the health or safety of

any person.          There is no indication in the record that the

Kimbles were financially vulnerable.20               The conduct complained of

was an isolated incident.               And while First American's conduct

indisputably        involved    deception,     there       is   no   indication      of

intentional malice on the part of the company or its employees.

The punitive damages award against First American is therefore

suspect.     Campbell, 538 U.S. at 419.

     ¶52     Further, the degree of reprehensibility in this case

falls short of that found in prior Wisconsin cases supporting
substantial punitive damages awards.



     19
       The failure of an insurer to diligently investigate
before denying a claim and concealing material information from
an insured clearly meet this standard. See, e.g., Trinity, 261
Wis. 2d 333, ¶62.
     20
       While Judith Kimble testified at trial that a dire
financial situation faced by her elderly parents caused the
Kimbles to reduce their asking price and be "more aggressive" in
selling their home, the record does not contain any indication
that the Kimbles themselves were in any financial trouble.

                                          20
                                                                               No.       2011AP1514



     ¶53     For     example,       in     Trinity,             the    insurance          company

defendant    denied     a    claim       based       on   an     omission      in    coverage,

despite knowing that the omission in the policy was the result

of its own error.          261 Wis. 2d 333, ¶¶7-8.                    This court held that

the insurance carrier not only "engaged in prohibited conduct

while     knowing     or     recklessly          disregarding            the    lack        of    a

reasonable    basis     for    denying       the      claim,"         but   further         was   a

recidivist,    having       previously       been         the    subject       of    a    lawsuit

involving precisely the same kind of conduct.                                  Id., ¶¶57-59.

These facts allowed the defendant to be subjected to a more

severe    punitive    damages       award       without         offending      due       process:

$3,500,000 in a case where only $490,000 in harm or potential

harm had been established.21              Id.

     ¶54     Here,    there    is    no     indication           from    the    record        that

First American engaged in repeated conduct.                              Neither does the

record     support     any    finding           of    malicious          intent.            First

American's conduct, while                "sufficiently reprehensible to give

rise to tort liability, and even a modest award of exemplary
damages does not establish the high degree of culpability that

warrants a substantial punitive damages award."                                BMW, 517 U.S.

at 580.

                                         2. Disparity



     21
       "'[O]ur holdings that a recidivist may be punished more
severely   than   a first   offender  recognize  that  repeated
misconduct is more reprehensible than an individual instance of
malfeasance.'" Trinity, 261 Wis. 2d 333, ¶58 (quoting Campbell,
538 U.S. at 423).

                                            21
                                                                                     No.     2011AP1514



       ¶55    "When compensatory damages are awarded, the reviewing

court is to consider whether the [punitive damages] award bears

a reasonable relationship to the award of compensatory damages."

Trinity, 261 Wis. 2d 333, ¶63.                        "Wisconsin law expressly rejects

the     use   of      a     fixed       multiplier,          either        a   fixed        ratio     of

compensatory         to     punitive           damages       or     of     civil      or     criminal

penalties      to     punitive           damages,       to    calculate         the        amount     of

reasonable         punitive            damages."             Id.     (citations             omitted).

"However,       we        have     held        that    in     the    appropriate             case,    a

comparison of the compensatory damages and the punitive damages

award is important."                  Id. (citing Jacque, 209 Wis. 2d at 629).

       ¶56    In      the        case     at     issue,       the        compensatory         damages

ultimately      awarded           were       $29,738.49.           Using       the    compensatory

damages       award        as     a     baseline       thus       represents          a     ratio    of

approximately 33:1.                   Such a ratio is transparently problematic

under the United States Constitution.

       ¶57    The         Supreme        Court,        however,          has     declared           that

reviewing courts can consider not only the compensatory damages
award, but also "'the harm likely to result from the defendant's

conduct.'"          BMW, 517 U.S. at 581 (quoting TXO Prod. Corp. v.

Alliance      Res.        Corp.,       509     U.S. 443,      460    (1993)).              Similarly,

where    it    is     relevant           and     appropriate,            our   prior        case     law

supports      consideration             of     "potential         damage"      that        might    have

been caused by a defendant's acts.                            Trinity, 261 Wis. 2d 333,

¶53.

       ¶58    The Stevensons argue that the appropriate figure to
use in assessing the disparity, in light of the sale the Kimbles
                                                  22
                                                                        No.     2011AP1514



lost during the dispute, is the full $1,300,000 sale price of

the Kimbles' home.          We disagree.        The Stevensons can point to no

indication in the record that the full value of the Kimbles'

property was ever in danger.22              Case law does not support this

type of speculative "potential damage," particularly where it is

unsupported by the record.

    ¶59     For     example,     in      TXO,    the    petitioner       fraudulently

attempted to undermine the title to a tract of land in order to

avoid paying royalties for oil and gas extraction.                        509 U.S. at

448-50.      The    respondent      received      a    judgment    for        common    law

slander of title in its favor, including $19,000 in compensatory

damages    and     $10,000,000      in    punitive      damages.        Id.     at     453.

Petitioner       appealed,      arguing         that    the      526:1        ratio      of

compensatory        to      punitive       damages        rendered        the        award

unconstitutionally excessive.              Id.     A plurality of the Supreme

Court held that, in addition to the compensatory damages award,

it was appropriate to consider the "between $5 million and $8.3

million"    in     lost     royalties     that    the     respondent      would        have
suffered had petitioner's plan succeeded.                  Id. at 460-61.

    ¶60     Similarly, in Trinity, this court accepted that the

appropriate        figure     for     comparison        was      not    the      $17,000

compensatory       damages    award,      but    rather    was    the    $490,000        in

potential damages at risk in the underlying negligence suit.

    22
       On December 26, 2013, the Stevensons filed a motion to
supplement the record by judicial notice, asking this court to
take into account the eventual sale price of the Kimbles' home.
We deny that motion. The supplemental information was not part
of the record before the trial court.

                                           23
                                                                             No.     2011AP1514



       ¶61   Notably, the "potential harm" in both of these cases

is grounded in record and is not merely speculative.                                  Had the

plaintiff in Trinity lost its case, $490,000 was the amount it

would have had to pay.                   Had the petitioner's scheme in TXO

succeeded, it was undisputed that the respondent would have been

deprived of millions of dollars in royalties.                              These analyses

were firmly rooted in fact, and the amounts in question were

derived from the record.

       ¶62   Here, the Stevensons invite this court to depart from

the facts of the record and speculate that, had the Kimbles

failed to discover First American's bad faith, they would have

been   completely       unable      to    sell    their       property,      rendering       it

valueless.        We decline this invitation.                 Many factors enter into

a   completed        sale    of    real     estate,          and   to      attribute      full

responsibility for the lost sale to First American is highly

speculative.         There is no clear indication in the record of what

impact    the     access     dispute      had    on    the    value     of   the     Kimbles'

property.
       ¶63   We    share     Justice       Kennedy's        concern     that,      without    a

meaningful standard, a court can end up "relying upon nothing

more than its own subjective reaction to a particular punitive

damages      award     in    deciding       whether         the    award     violates      the

Constitution."              TXO,    509     U.S.       at     466-67       (Kennedy,       J.,

concurring).

       ¶64   Fortunately,          there    is    no    need       to   speculate       about

potential harm, or to rely on subjective reactions, in order to
appropriately assess the disparity in this case.                                   The record
                                             24
                                                                              No.    2011AP1514



reveals that the Kimbles spent $40,000 to purchase the access to

their property that their title policy was supposed to insure.23

Given that the compensatory damages award merely accounted for

legal       expenses,      it    is     appropriate          to   add   the    compensatory

damages together with the cost of purchasing the access for

purposes      of    assessing          the    disparity      of   the   punitive      damages

award.        This    $69,738.49         figure,         however,     still   represents      a

problematic ratio of approximately 14:1.

       ¶65     "[I]n practice, few awards exceeding a single-digit

ratio       between     punitive             and        compensatory     damages,       to    a

significant degree, will satisfy due process."                                Campbell, 538

U.S. at 425.          Even a punitive damages award of just four times

compensatory damages can come "'close to the line'" of violating

due process.         BMW, 517 U.S. at 581 (quoting Pac. Mut. Life Ins.

Co. v. Haslip, 499 U.S. 1, 23 (1991)).24

       ¶66     In    the        case     at        issue,     there     are     no    special

circumstances calling for a high ratio punitive damages award.

This    becomes       especially         apparent          when   the   conduct      here    is

       23
       Although this evidence was not before the jury at trial,
it was before the circuit court and was made a part of the
record on appeal.   We may, therefore, properly consider it in
"review[ing] the entire record 'ab inito' . . . ." Trinity, 261
Wis. 2d 333, ¶48.
       24
       Additionally, the Wisconsin Legislature recently enacted
a law limiting punitive damages awards.    See 2011 Wis. Act 2
§ 23m.   The new statute caps punitive damage awards at a 2:1
ratio of compensatory damages or $200,000, whichever is greater.
Wis. Stat. § 895.043(6) (2011-12).    While the statute is not
applicable to this case, it is nonetheless appropriate to
consider the legislature's judgment of a reasonable disparity of
punitive to compensatory damages.

                                                   25
                                                                   No.     2011AP1514



compared to other cases where courts have upheld high ratio

awards.    See, e.g., Trinity, 261 Wis. 2d 333; J.K. v. Peters,

2011 WI App 149, 337 Wis. 2d 504, 808 N.W.2d 141 (upholding a

high ratio punitive damages award against a social worker who

sexually assaulted his minor client); Strenke v. Hogner, 2005 WI

App 194, 287 Wis. 2d 135, 704 N.W.2d 309 (upholding a high ratio

punitive   damages      award    against     a   drunk     driver    who     caused

substantial injuries to another motorist).25                These prior cases

involve the kind of especially egregious conduct identified by

the Supreme Court in Campbell, including "physical as opposed to

economic" harm, and "indifference to or a reckless disregard of

the health or safety of others."             538 U.S. at 419.            As we have

discussed, the case at issue does not involve such conduct.

    ¶67    In    sum,   the     award   in   this   case    does    not     bear   a

"reasonable     relationship"     to    either   the     compensatory       damages

award or the potential harm faced by the Kimbles.                   We conclude,

therefore, that the award does not comport with due process.

                        3. Civil or Criminal Penalties
    ¶68    Finally, "we engage in a comparison of the punitive

damages award and the civil or criminal penalties that could be

imposed for comparable misconduct."              Trinity, 261 Wis. 2d 333,

¶66 (citing Jacque, 209 Wis. 2d at 630).                 In this case, as in

Trinity, First American could be subject to a criminal penalty,


    25
       The court of appeals upheld the damages award in Strenke
on remand from this court.   This court was equally divided on
the question of whether the award of punitive damages was
excessive. See Strenke, 279 Wis. 2d 52, ¶58.

                                        26
                                                                  No.   2011AP1514



including a fine of up to $10,000, for the violation of "any

insurance        statute    or    rule   of   this    state."       Wis.     Stat.

§ 601.64(4).        The Stevensons argue that First American violated

Wis.    Admin.     Code     § Ins.    6.11(3)(a),     which   prohibits     unfair

settlement practices.

       ¶69   In this case we conclude, as we did in Trinity, that

"a criminal penalty has 'less utility' when used to determine

the     dollar     amount    of    the   punitive     damages    award."       261

Wis. 2d 333,       ¶68     (citing    Campbell,     538   U.S.   at 428).       We

nonetheless note that "[t]he existence of a criminal penalty

does have bearing on the seriousness with which a State views

the wrongful action."             Id., ¶66 (quoting Campbell, 538 U.S. at

428).

                                     4. Application

       ¶70   Applying the relevant factors to the case at issue, we

conclude that the punitive damages award against First American

is excessive.        First, First American's conduct "is sufficiently

reprehensible to give rise to tort liability, and even a modest
award of exemplary damages does not establish the high degree of

culpability that warrants a substantial punitive damages award."

BMW, 517 U.S. at 580.             Second, there is no especially egregious

conduct supporting a high ratio punitive damages award.                     Absent

such egregious conduct, even the 7:1 ratio imposed in Trinity

would be unconstitutionally excessive.                 Finally, the existence

of an additional civil or criminal penalty has "limited utility"




                                         27
                                                                                   No.   2011AP1514



in    determining            the    reasonableness           of   the      punitive        damages

award.26        See Trinity, 261 Wis. 2d 333, ¶68.

      ¶71       We conclude, in consideration of the case law, that

the   appropriate            amount       of    punitive     damages       in    this    case   is

$210,000.         Comparing the amount of this award to the $69,738.49

amount of compensatory and potential damages results in a ratio

of approximately 3:1, below the ratio we upheld in Trinity, and

just below the constitutional "line" mentioned by the Supreme

Court      in    BMW,       517    U.S.    at 581,     and    Haslip,        499    U.S.    at 23.

Because "[t]he precise award in any case, of course, must be

based      upon       the    facts        and   circumstances         of     the     defendant's

conduct and the harm to the plaintiff," Campbell, 538 U.S. at

425, we conclude that this amount effectively punishes First

American's misconduct, while acknowledging that its conduct did

not   rise       to    level       of     egregiousness       found     in      prior    punitive

damages cases.

                                           V.     CONCLUSION

      ¶72       We conclude that the punitive damages award in this
case was excessive and deprived First American of its right to

      26
        We note here, as we did in Trinity that "[t]he factors
discussed are the ones most relevant in this case . . . [and]
there are other factors that may be relevant given the nature of
the case at hand."    261 Wis. 2d 333, ¶69.    In particular, we
note that while the "[d]efendant's wealth is oftentimes a
significant factor," id., it is not significant in this case.
The record indicates First American would likely be able to pay
the amount specified by the jury. Standing alone, however, the
"wealth    of  a   defendant   cannot   justify   an   otherwise
unconstitutional punitive damages award."   State Farm Mut. Auto
Ins. Co. v. Campbell, 538 U.S. 408, 427 (2003) (citing BMW, 517
U.S. at 585).

                                                  28
                                                                No.     2011AP1514



due   process.       We   therefore   reverse     the   court      of   appeals'

decision and remand this case to the circuit court for entry of

judgment against First American in the amount of $239,738.49.

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

reversed, and the cause is remanded to the circuit court.

      ¶73    DAVID T. PROSSER, J., did not participate.




                                      29
                                                                        No.   2011AP1514.ssa


      ¶74     SHIRLEY      S.    ABRAHAMSON,            C.J.     (dissenting).           The

majority opinion reaches a shocking result:                              It makes First

American's wrongdoing an efficient way of doing business.                                For

all its reprehensible conduct, First American in fact pays less

by   acting    in   bad    faith       and   wrongfully         refusing      to   pay   the

Kimbles' claim than it would have paid had it honored the claim

in good faith after discovering its error.                            Under the majority

opinion, the combined punitive and compensatory damages amount

to $239,738.49——a sum smaller than the title insurance policy

limit of $370,000.          This result directly contravenes the entire

purpose of punitive damages——making wrongdoers pay and deterring

future wrongful conduct.

      ¶75     Trinity Evangelical Lutheran Church & School-Freistadt

v.   Tower    Insurance         Co.,    2003       WI   46,     261    Wis. 2d 333,      661

N.W.2d 789, is the leading case for determining whether punitive

damages are unconstitutionally excessive as a violation of due

process.       The majority opinion dutifully recites the Trinity

factors.1      Yet the majority opinion jettisons Trinity, turning
the test on its head in favor of the reasoning set forth in

Trinity's dissent.

      ¶76     The majority opinion achieves a result in which the

wrongdoer was enriched by its wrongdoing.                            This result, in my

opinion, cannot stand.

      ¶77     The   test    in    Trinity          applies     six    factors   to   assess

whether a punitive damages amount is justified:

      1. The grievousness of the acts;

      1
          Majority op., ¶48.

                                               1
                                                    No.   2011AP1514.ssa

     2. The degree of malicious intent;

     3. Whether the award bears a reasonable relationship
        to the award of compensatory damages;

     4. The potential damage that might have been caused by
        the acts;

     5. The ratio of the award to civil or criminal
        penalties that could be imposed for comparable
        conduct; and

     6. The wealth of the wrongdoer.
Majority op., ¶48; Trinity, 261 Wis. 2d 333, ¶53.

     ¶78   It is perverse not to apply the Trinity test to the

instant case.   The instant case is on all fours with Trinity.

In both cases an insurance company refused to pay the insured's

claim (breach of contract); the court found that the insurance

company breached the insurance contract; the insurance company

was found to have acted in bad faith; and the fact-finder found

that the misconduct justified a punitive damage award.2




     2
       Here are the facts of Trinity:     An employee of Trinity
Church, the insured, was in a motor vehicle accident, and
Trinity Church was liable for damages of $490,000.

     An agent of Tower Insurance erred by not providing Trinity
Church the coverage that Trinity Church requested.

     Tower Insurance refused to reform the policy to cover
Trinity Church (as the law required it to do) and to pay
$490,000 on behalf of Trinity Church. Trinity Church sued Tower
Insurance for breach of contract, bad faith, and punitive
damages.

     Tower Insurance paid $490,000 on Trinity Church's behalf.

                                2
                                                             No.   2011AP1514.ssa


    ¶79   In    Trinity,    the     court   held   that   due      process   was

satisfied by a punitive damages amount of $3,500,000 based on a

potential harm of $490,000, a 7:1 ratio.

    ¶80   Because the majority opinion fails to apply Trinity

properly, I dissent.

                                       I

    ¶81   The    first     factor     of    the    Trinity      test    is   the

grievousness of the acts.           The insurance company's misconduct

was substantially the same in Trinity and in the present case:

       • In each case, an insurance company was sued by its

          insured (or someone standing in the insured's shoes);

       • In each case, the insurance company had failed to pay

          the claim of its own insured;

       • In each case, the insurance company was given repeated

          opportunities to pay the claim and refused to do so,




     The Trinity court used the $490,000 figure as harm to
Trinity Church to calculate the punitive damages.      Had Tower
Insurance's misconduct not been discovered, Trinity Church would
have had to pay the full $490,000 from its own funds; Tower
Insurance would have received a net gain of $490,000.         In
calculating the harm to Trinity Church, the Trinity court did
not take into account that Tower Insurance's agent might
ultimately be responsible for paying the $490,000.

     Here are the facts in the instant case:     First American
erred in not providing the Kimbles with their policy limits of
$370,000 when First American discovered that the Kimbles' title
was not marketable.    Had First American's misconduct not been
discovered, the Kimbles could not have sold their property,
leaving them with a loss of both the $1.3 million sale price of
the property and the $370,000 policy limits of the First
American title insurance policy.     First American would have
received a net gain of $370,000.

                                       3
                                                             No.   2011AP1514.ssa


            despite knowing the facts justifying payment of the

            claim;

         • In each case, the insurance company was found to have

            acted in bad faith; and

         • In    each   case,   a    jury   awarded   over    $1    million   in

            punitive damages.

     ¶82    The Trinity court held that the insurance company's

misconduct constituted a "continuing, egregious, and flagrant

pattern of disregard toward [the insurance company's] duty owed

to its insured," which justified the punitive damages in that

case.3

     ¶83    The majority opinion in the present case characterizes

First American's conduct as not as reprehensible as that of the

insurance company in Trinity.         Majority op., ¶¶53-55, 71.

     ¶84    The majority opinion's conclusion does not square with

the facts of the two cases.

     ¶85    First, as in Trinity, the legislature has made the

insurance company's misconduct a crime, demonstrating the public
policy      of     this      state      regarding      the         misconduct's

reprehensibility.         See majority op., ¶69; accord Trinity, 261

Wis. 2d 333, ¶57.

     ¶86    Second, as in Trinity, First American's misconduct was

repeated; First American was a recidivist.4                  In Trinity, the
     3
         Trinity, 261 Wis. 2d 333, ¶62.
     4
       Majority op., ¶53 n.20 (quoting Trinity, 261 Wis. 2d 333,
¶58:   "'[O]ur holdings that a recidivist may be punished more
severely   than  a   first  offender   recognize  that  repeated
misconduct is more reprehensible than an individual instance of
malfeasance.'") (internal citation omitted).
                                       4
                                                                        No.    2011AP1514.ssa


court noted that the insurance company's agent "made a series of

decisions that illustrate bad faith" and chastised the insurance

company's repeated misconduct and failure to investigate.5

     ¶87    The    majority      opinion           erroneously     states      that     First

American's      misconduct       was    "an        isolated     incident,"        and      that

"there is no indication from the record that First American

engaged    in    repeated    conduct."              Majority     op.,    ¶51.         On   the

contrary,    First    American         in    the     instant    case     demonstrates        a

pattern of repeated misconduct.                     After discovering its initial

error,    First    American      had        many    opportunities        to    remedy      its

misconduct and instead continued to act improperly:

          • When     the    Kimbles         first     inquired     about       their       road

            access, First American asserted that an easement gave

            them access, when it in fact knew that the easement

            granted to the Kimbles was invalid.6

          • When the Kimbles inquired whether they could assert a

            claim    to    the    easement,          First    American        assured      them

            that they had road access.7
          • At    trial,    First       American's         agent   admitted        that      it

            discovered       the       deed         that     rendered     the      Kimbles'

            easement       invalid,         and     chose     never     to     inform       the

            Kimbles about the deed.8


     5
         Trinity, 261 Wis. 2d 333, ¶60.
     6
         Majority op., ¶9.
     7
         Majority op., ¶10.
     8
         The trial yielded the following testimony:

                                              5
                                                       No.   2011AP1514.ssa


         • At   trial,   First   American's   agent   admitted   that   it

           deliberately failed to investigate the alleged title

           defect.9

         • Each time the Kimbles inquired as to their access,

           First American insisted that the Kimbles could access

           the road, variously stating that the Kimbles could go

           across a 25-foot strip to which they had no access,10




    [KIMBLES' COUNSEL]: Now, at your——at your deposition,
    I asked you whether you made any mention of the Cofrin
    deed [which rendered the easement invalid] to [the
    Kimbles' agent] in March of 2008. Do you recall that?

    [FIRST AMERICAN'S AGENT]: Yes.

    [KIMBLES' COUNSEL]: And we talked about your letters
    that you sent back and forth with him, correct?

    [FIRST AMERICAN'S AGENT]: Yes.

    [KIMBLES' COUNSEL]: And you acknowledge that it's true
    that you never told [the Kimbles' agent] about the
    Cofrin deed at any time in any of your conversations
    or in any of your letters?

    [FIRST AMERICAN'S AGENT]: That is correct.
    9
       At trial, an investigator employed by First American
testified that she asked First American's agent whether she
should investigate further. The investigator suggested problems
with the validity of the deed, and asked, "What does all of this
mean for us?" and "Do you want me to dig for more
documentation?"    The investigator testified that she never
received a response.
    10
       The access to the south depended on an easement across a
25-foot strip of property.    First American testified at trial
that "Land Concepts [which does not want to give access] owns
the fee simple interest to the 25-foot strip."

                                    6
                                                               No.    2011AP1514.ssa


           through   a      wetland       that   was    barred         from      road

           construction,11 and confusingly, "by water."12

    ¶88    The   majority     opinion      maintains    that         the   repeated

misconduct    here   is     less   reprehensible        than     the       repeated

    11
       See court of appeals brief of defendant-appellant at 21.
The access to the south also needed to cross lands marked as
wetlands. The trial record reflects the following exchange:

    [KIMBLES' COUNSEL]:    And did you take the position
    that the [Kimbles] had a right of access to their
    property to the south?

    [FIRST AMERICAN'S AGENT]: Yes.

    [KIMBLES' COUNSEL]:        Through      an   area   of   forest        and
    wetlands, correct?

    [FIRST AMERICAN'S AGENT]: Yes.

     Yet, government regulations prohibited development on the
forest and wetlands, as the defendant's agent testified:

    [KIMBLES' COUNSEL]: And you know from reading [the
    government official's] deposition that the area that
    you've described is defined as wetlands according to
    Door County Planning, right?

    [FIRST AMERICAN'S AGENT]: That's correct.

    [KIMBLES' COUNSEL]: And that, in fact, Door County
    Planning has indicated that that area could not be
    developed into any road or opened or cleared, true?

    [FIRST AMERICAN'S AGENT]: That is correct.
    12
         The trial record reflects the following exchange:

    [KIMBLES' COUNSEL]: Well, you recall testifying at
    that court trial regarding whether the company was, in
    fact, at that time on Tuesday going to assert that the
    Kimbles enjoyed a right of access by water.     Do you
    recall that testimony?

    [FIRST AMERICAN'S AGENT]:             It came up.        I recall it
    coming up.

                                      7
                                                                        No.   2011AP1514.ssa


misconduct in Trinity because the insurance company in Trinity

had    committed       similar    misconduct          in    another     case     30    years

previously.      Majority op., ¶53.

       ¶89   Yet the key factor for the reprehensibility of the

insurance company's misconduct in Trinity was not that a 30-

year-old prior court case existed or that the insurance company

knew    about     it,     but     rather       that        the   insurance       company's

"decisions, acts, and omissions . . . illustrate a continuing,

egregious,       and    flagrant       pattern        of     disregard        toward       [the

insurance company's] duty owed to its insured . . . ."                            Trinity,

261 Wis. 2d 333, ¶62.

       ¶90   The record in the present case demonstrates that First

American exhibited a similar continuing, egregious, and flagrant

pattern of misconduct.

                                              II

       ¶91   The second factor is whether there was "intentional

malice."

       ¶92   The majority opinion in the present case states that
"there is no indication of intentional malice on the part of the

First    American        or     its    employees."               Majority      op.,        ¶52.

Similarly,       the    Trinity       court       concluded      that    there     was      no

indication of intentional malice in that case either.                                  Indeed

Trinity does not require malice in order for punitive damages to

be    awarded.         Rather,    Trinity          justified      the   amount        of    the

punitive damages award on the insurance company's "intentional

disregard of its duty to investigate diligently to ascertain and



                                              8
                                                         No.    2011AP1514.ssa


evaluate   the   facts    and   circumstances . . . ."         Trinity,   261

Wis. 2d 333, ¶59.

    ¶93    The jury in the instant case found sufficient grounds

to justify a finding that punitive damages should be awarded,

based on the evidence presented and the jury instructions.                The

jury instructions stated that the jury should award punitive

damages if it found that "the defendant acted maliciously toward

the plaintiff or in an intentional disregard for the rights of

the plaintiff."13        With a $1 million jury award of punitive

    13
       Wis JI——Civil 1707.1, which was given to the jury, reads
in relevant part:

    Punitive damages may be awarded, in addition to
    compensatory damages, if you find that the defendant
    acted maliciously toward the plaintiff or in an
    intentional disregard of the rights of the plaintiff.

    A person's acts are malicious when they are the result
    of hatred, ill will, desire for revenge, or inflicted
    under   circumstances  where  insult   or   injury  is
    intended.

    A person acts in an intentional disregard of the
    rights of the plaintiff if the person acts with the
    purpose to disregard the plaintiff's rights, or is
    aware that his or her acts are substantially certain
    to result in the plaintiff's rights being disregarded.
    Before you can find an intentional disregard of the
    rights of the plaintiff, you must be satisfied that
    the defendant's act or course of conduct was:

    (1) deliberate;

    (2) an actual disregard of the plaintiff's right to
    safety, health, or life, a property right, or some
    other right; and

    (3) sufficiently aggravated to warrant punishment by
    punitive damages.

            . . . .

                                     9
                                                                    No.   2011AP1514.ssa


damages, the jury found the "high degree of culpability" that

could      justify   a   punitive    damages     award.14      Credible       evidence

supports      the    jury's   finding      of    either     malicious      intent    or

intentional      disregard     of    the    rights    of     the    insured.        The

majority      opinion     does      not    state     that     the     evidence      was

insufficient for the jury to make such a finding.                            The jury

finding is sufficient to satisfy Trinity.

                                           III

      ¶94     The Trinity test's third factor (ratio of compensatory

damages to punitive damages) and fourth factor (potential damage

to the plaintiff) are linked.

      ¶95     Trinity examined the ratio between potential harm and

punitive damages to determine the appropriateness of the award.

Trinity, 261 Wis. 2d 333, ¶65.              "Wisconsin law expressly rejects

the     use    of    a    fixed     multiplier . . . ."               Trinity,      261

Wis. 2d 333, ¶63.


      Factors you should consider in answering Question No.
      6 [awarding the amount of punitive damages] include:

      1. the grievousness of the defendant's acts,

      2. the degree of malice involved,

      3. the potential damage which might have been done by
      such acts as well as the actual damage, and

      4. the defendant's ability to pay.   You may consider
      the defendant's wealth in determining what sum of
      punitive damages will be enough to punish the
      defendant and deter the defendant and others from the
      same conduct in the future.

See also Wis. Stat. § 895.043(3).
      14
           Majority op., ¶54.

                                           10
                                                                         No.       2011AP1514.ssa


    ¶96     Despite    the       lack      of        a    fixed    multiplier,          Trinity

provides a benchmark for the court.                       If a 7:1 ratio of punitive

damages     to    potential       harm      ($3,500,000             punitive;          $450,000

potential harm) and a 200:1 ratio of punitive damages to actual

damages     ($3,500,000      punitive;           $17,570        actual     damages)          were

permissible in Trinity, the instant case, so similar in facts,

also supports an identical or similar ratio.

    ¶97     The     amount     of       potential           harm    is     calculated           by

analyzing    "'the    harm     likely       to       result       from   the       defendant's

conduct as well as the harm that actually has occurred.'"                                      TXO

Production Corp. v. Alliance Resources Corp., 509 U.S. 443, 460,

(1993) (quoted source omitted).

    ¶98     In the instant case, the Kimbles were harmed.                                    They

had an offer to buy their property for $1.3 million.                                         They

wanted to sell.       They chose to reduce the asking price to secure

the sale because they needed to care for aging parents who had

lost their home.       The Kimbles introduced evidence that the sale

failed    because     of   the      lack        of       road   access,        a    defect      in
marketable title that had been insured by First American.

    ¶99     The Kimbles had purchased title insurance to protect

them from damages arising out of the unmarketability of their

title.      The   policy     limit      was      $370,000.           The    value       of     the

property with marketable title was about three times the policy

limit.

    ¶100 The        majority      opinion            erroneously         asserts        that     a

consideration of the loss of value of Kimbles' home would force
the court "to depart from the facts of the record and speculate

                                            11
                                                                               No.    2011AP1514.ssa


that, had the Kimbles failed to discover First American's bad

faith, they would have been completely unable to sell their

property, rendering it valueless."                         Majority op., ¶62.

     ¶101 Yet this potential harm is borne by the record.                                          The

lack of access constituted "unmarketability of the title."15                                       The

policy    itself       defines      "unmarketability               of    the    title"        as   "an

alleged    or         apparent      matter           affecting          the    title      to       the

land . . . which would entitle a purchaser of the estate [or the

Kimbles]       to    be   released           from    the    obligation         to    purchase       by

virtue    of    a     contractual        condition          requiring         the     delivery      of

marketable          title."        As    First       American's         agent        stated    in    a

deposition entered into evidence at trial, the risk of wrongly

denying the claim was that the Kimbles "would have had a real

big claim on the policy . . . ."

     ¶102 In Trinity, the facts were similar.                                   The insured in

Trinity would have incurred a potential loss of up to $490,000

(damages in the auto accident case), had the insurance company

successfully          continued         to    deny       Trinity    Church's          claim.       The
majority       opinion        in   Trinity           used    the    $490,000          figure       for

evaluating the punitive damages award.

     ¶103 In          the      instant          case,       the     Kimbles           would        have

potentially incurred a loss of up to $1.3 million, the sale

price of the property if they had marketable title, and would

     15
       "[E]ven if the policy does not expressly cover lack of a
right of access, if it insures against unmarketability of the
title, the title insurer will be liable if no legal access to
the land exists. The majority rule is that lack of access makes
title unmarketable."    1 Joyce D. Palomar, Title Insurance Law
§ 5:8 (West 2013-2014).

                                                    12
                                                                                  No.    2011AP1514.ssa


not    have        recovered      First           American's             title        policy     limits

($370,000), had First American successfully denied the Kimbles'

claim.

       ¶104 The majority opinion refuses to use the $1.3 million

sale     price      or    $370,000          policy        limit          figures        to    calculate

punitive      damages.           Instead          the    majority           opinion          adopts   the

reasoning of the dissent in Trinity.

       ¶105 Justice         Sykes'         dissent        in       Trinity       argues        that    the

insured     "was     never       at    risk       for        the     auto       accident       damages,

because     either       the    agent       (that       is,        his    error       and     omissions

carrier)      or    [the    insurance         company]             was    responsible           for    the

mistake in the insurance application.                                The actual compensatory

damages in the bad faith claim consisted of the attorneys' fees

Trinity     [Church]        incurred         in     the       coverage          dispute,        not   the

personal injury damages in the underlying lawsuit, which Trinity

[Church] would not and did not have to pay."                                            Trinity, 261

Wis. 2d 333, ¶106.

       ¶106 The       majority         opinion          in     the       present        case    follows
Justice Sykes' approach by severely limiting what is actual and

potential        harm,      rather         than     employing             the    correct        Trinity

majority opinion approach of using "the harm that is likely to

result."16

       ¶107 When         title        is    not     marketable,              the        significantly

reduced value of the property and the inability of an insured to

collect     from      the      title       insurance           company          are     exactly       "the


       16
       TXO Production Corp. v. Alliance Resources Corp., 509
U.S. 443, 460 (1993).

                                                   13
                                                                 No.    2011AP1514.ssa


harm[s]   that    [are]     likely   to     have   occurred"       when      a    title

insurance company fails to pay a worthy claim.                   Thus, the proper

potential harm is at least the policy limits of $370,000, if not

the lost sale of the house ($1.3 million), or both, rather than

the mere $40,000 used by the majority opinion.

      ¶108 As    to   the   proper   ratio    here,      the     majority        opinion

relies upon its mistaken "reprehensibility of conduct" analysis

to justify a lower ratio than the Trinity 7:1 ratio of punitive

damages   to    potential    harm    and    the    200:1    ratio      of    punitive

damages to actual damages that this court held constitutional.

Trinity, 261 Wis. 2d 333, ¶¶65, 68, 105; majority op., ¶66.

      ¶109 Even though the misconduct of First American here is

essentially analogous to the misconduct in Trinity and may even

be more egregious, the majority opinion applies only one guiding

principle:      High numbers for compensatory and punitive damages

are bad; low numbers are good.

      ¶110 The    majority     settles       on    its     3:1    ratio      for     no

ostensible reason other than that it is lower than the 7:1 and
200:1 ratios in Trinity and the 4:1 ratio in Pacific Mutual Life

Insurance Co. v. Haslip, 499 U.S. 1, 23-24 (1996).                               Yet in

Pacific Mutual Life Insurance Co., the United States Supreme

Court held that the 4:1 ratio was "close to the line," not over

it.

      ¶111 The majority opinion also looks to a newly adopted

state statute, which fixes $200,000 or a 2:1 ratio of punitive

damages   to    compensatory    damages      as    the   limits        for   punitive
damages   awards.       Majority     op.,    ¶66    n.23.        The    statute       is

                                      14
                                                                        No.    2011AP1514.ssa


irrelevant.             The     majority      opinion        deliberately      defies      the

legislative direction that the statute does not apply to the

present         case.      Furthermore,         the     constitutional        due     process

doctrine that we must apply in the present case rejects a fixed

amount for punitive damages or a fixed multiplier.                             "Excessive"

for   due       process       purposes     is    a     "fluid     concept"     that     takes

"substantive content from the particular context[] in which the

standard[] [is] being assessed."17

      ¶112 What was good enough for the Trinity court seems to no

longer be good enough for the majority opinion in the present

case.

                                                IV

      ¶113 The          fifth    Trinity      factor        is   "a   comparison      of   the

punitive damages award and the civil or criminal penalties that

could      be    imposed      for   comparable         misconduct."           Trinity,     261

Wis. 2d 333, ¶66.               I agree with the majority opinion that the

imposition of criminal or civil fines does not directly impact

the amount of punitive damages in the instant case, for the same
reasoning we used in Trinity.                   See majority op., ¶69.

      ¶114 Nevertheless, the prohibited conduct's punishment by

criminal        sanctions       under    Wis.       Stat.    § 601.64(4)       evinces     the

legislative         determination        of      the    reprehensibility         of     First

American's misconduct.

                                                V




      17
       Cooperman Indus., Inc. v. Leatherman Tool Group, Inc.,
532 U.S. 424, 436 (2001).

                                                15
                                                         No.   2011AP1514.ssa


     ¶115 The   sixth     Trinity   factor    is   the   wealth          of   the

wrongdoer.   The United States Supreme Court has also recognized

the wealth of the wrongdoer as a factor to be considered in

gauging the constitutionality of a punitive damage award.18

     ¶116 The   purpose    behind   the   wealth   factor    is     to    punish

wrongdoers and make the penalty for wrongdoing sufficiently high

for wealthy wrongdoers that they are deterred from engaging in

future misconduct.19


     18
        The wealth and financial position of the defendant are
examined to assess the excessiveness of the punitive damages
award.    See, e.g., TXO Production Corp., 509 U.S. 443, 462
(1993); Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 23-24
(1996).
     19
       The majority       opinion   states   the   purpose     of    punitive
damages as follows:

     [Punitive   damages]  are   awarded   "to  punish  the
     wrongdoer, and to deter the wrongdoer and others from
     similar conduct."     Trinity, 261 Wis. 2d 333, ¶50.
     "Punitive damages may properly be imposed to further a
     State's legitimate interests in punishing unlawful
     conduct and deterring its repetition." BMW of N. Am.,
     Inc. v. Gore, 517 U.S. 559, 568 (1996).

Majority op., ¶43.

     Justice   Steinmetz   articulated  the   reasoning   behind
considering the wealth of the parties in his dissent in Brown v.
Maxey, 124 Wis. 2d 426, 452, 369 N.W.2d 677 (1985) (Steinmetz,
J., dissenting). He stated:

     The policy justifications for punitive damages are
     generally considered to be: punish the wrongdoer and
     specifically deter him and generally deter others from
     engaging in similar conduct. . . . It is almost
     universally accepted that money talks.    By tailoring
     the amount of punitive damages to the relative wealth
     of the individual, every wrongdoer is more or less
     equally affected by the sanction.

                                    16
                                                                      No.   2011AP1514.ssa


     ¶117 In the instant case, the record demonstrates that in

2010,     First    American     had    revenues      over        $2   billion    and   net

profits of $65 million.              First American easily had the ability

to pay the $1 million the jury awarded as punitive damages and

then some.

     ¶118 Yet        in   the    instant         case,     the    majority      opinion's

result, as I noted previously, creates a final combined punitive

and compensatory damages amount of $239,738.49——a sum smaller

than the title insurance policy limit of $370,000.                          The majority

opinion makes First American's wrongdoing an efficient course of

business.         First American in fact pays less by acting in bad

faith and wrongfully refusing to pay the Kimbles' claim than it

would have paid had it honored the claim in good faith after

discovering its error.               This result directly contravenes the

entire purpose of punitive damages, let alone the purpose of

awarding punitive damages against a wealthy defendant.20

     ¶119 The        majority        opinion      again     strays      from    Trinity.

Trinity held, contrary to the majority opinion in the instant
case,     that     evidence     of    the   insurance        company's       wealth    and

ability to pay the full amount was "sufficient to justify the

size of the punitive damages award."                     Trinity, ¶69.       In Trinity,

     20
       This rationale was echoed by the court in Jacque v.
Steenberg Homes, 209 Wis. 2d 605, 631, 563 N.W.2d 154 (1997),
which explained the need to eliminate the profit motive for
wrongdoing:

     Punitive damages, by removing the profit from illegal
     activity, can help to deter such conduct. In order to
     effectively do this, punitive damages must be in
     excess of the profit created by the misconduct so that
     the defendant recognizes a loss.

                                            17
                                                                  No.    2011AP1514.ssa


the   company       would   have   had   to    liquidate       assets    to   pay   the

award.21     First American has no similar concern here.

      ¶120 The majority opinion dismisses the wealth factor in

the present case in a footnote, flouting Trinity and the United

States Supreme Court cases.              The majority opinion states simply

that "it is not significant in this case."                       Majority op., ¶70

n.25.      Why is the wealth of First American not significant in

this case?         The majority opinion does not explain, other than to

cryptically         state   that    "[t]he     record    indicates       that      First

American would likely be able to pay the amount specified by the

jury."        Id.      Is   the    majority    opinion        implying   that      First

American's ability to pay means the punitive damages were too

low or that the punitive damages can never be high enough to

deter      First    American's     misconduct    in     the    future?        Is   First

American too big, too well-to-do to punish?

                                      * * * *

      ¶121 The majority opinion has ignored and misapplied the

Trinity test to substantially similar facts in the present case
and reaches an outcome contrary to Trinity.

      ¶122 The majority opinion achieves a result in which the

wrongdoer is enriched by its wrongdoing.                 First American ends up

paying less in damages for acting improperly than it would have

paid had it acted properly and paid the claim.                     This result, in

my opinion, cannot stand.

      ¶123 For the foregoing reasons, I dissent.



      21
           Trinity, 261 Wis. 2d 333, ¶69 n.8.

                                          18
                                                       No.    2011AP1514.ssa


    ¶124 I   am   authorized   to    state   that   Justice    ANN   WALSH

BRADLEY joins this dissent.




                                    19
    No.   2011AP1514.ssa




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