                                                            2015 WI 19

                  SUPREME COURT            OF   WISCONSIN
CASE NO.:              2013AP500
COMPLETE TITLE:        Melissa Anderson and Kenneth Anderson,
                                 Plaintiffs-Appellants,
                            v.
                       Thomas Aul,
                                 Defendant-Respondent,
                       Aul Real Estate Investment Company, LLC,
                       Cornerstone
                       Investments of Delafield, LLC, Riverside
                       Investments, LLC,
                       XYZ Insurance Company and ABC Insurance Company,
                                 Defendants,
                       Wisconsin Lawyers Mutual Insurance Company,
                                 Intervenor-Respondent-Petitioner.



                         REVIEW OF A DECISION OF THE COURT OF APPEALS
                          Reported at 353 Wis. 2d 238, 844 N.W.2d 636
                                  (Ct. App. 2014 – Published)
                                     PDC No: 2014 WI App 30

OPINION FILED:         February 25, 2015
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:         November 5, 2014

SOURCE OF APPEAL:
   COURT:              Circuit
   COUNTY:             Waukesha
   JUDGE:              Lee S. Dreyfus Jr.

JUSTICES:
   CONCURRED:          ZIEGLER, CROOKS, ROGGENSACK, GABLEMAN, JJJJ.,
                       concur. (Opinion filed.)
  DISSENTED:
  NOT PARTICIPATING:


ATTORNEYS:
       For the intervenor-respondent-petitioner, there were briefs
by Claude J. Covelli and Boardman & Clark LLP, Madison, and oral
argument by Claude J. Covelli.


       For the plaintiffs-appellants, there was a brief by Holly
Strop and Strop Law Offices, LLC, Madison, and Jeffrey O. Davis,
Patrick   S.   Nolan,     and    Quarles     &    Brady   LLP,      Milwaukee.      Oral
argument by Jeffrey O. Davis.


    An    amicus       curiae    brief   was     filed    by   Lee    M.   Seese     and
Michael   Best     &    Friedrich    LLP,        Waukesha,     on    behalf    of   the
Wisconsin      Bankers          Association        and       Wisconsin        Realtors
Association.




                                         2
                                                                         2015 WI 19
                                                                 NOTICE
                                                   This opinion is subject to further
                                                   editing and modification.   The final
                                                   version will appear in the bound
                                                   volume of the official reports.
No.    2013AP500
(L.C. No.   2012CV732)

STATE OF WISCONSIN                             :            IN SUPREME COURT

Melissa Anderson and Kenneth Anderson,

            Plaintiffs-Appellants,

      v.

Thomas Aul,

            Defendant-Respondent,                                     FILED
Aul Real Estate Investment Company, LLC,
Cornerstone Investments of Delafield, LLC,                       FEB 25, 2015
Riverside Investments, LLC, XYZ Insurance
Company and ABC Insurance Company,                                  Diane M. Fremgen
                                                                 Clerk of Supreme Court

            Defendants,

Wisconsin Lawyers Mutual Insurance Company,

            Intervenor-Respondent-Petitioner.




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



      ¶1    SHIRLEY S. ABRAHAMSON, C.J.              This is a review of a

published    court       of   appeals   decision    and    order      reversing       a
                                                                        No.     2013AP500



judgment of the Waukesha County Circuit Court, Lee S. Dreyfus,

Jr., Judge.1

     ¶2     Melissa    and        Kenneth        Anderson   sued       their     former

attorney, Thomas Aul, for legal malpractice.                     Wisconsin Lawyers

Mutual Insurance Company (WILMIC), Attorney Aul's professional

liability insurer, intervened in the lawsuit.                          WILMIC sought

summary judgment declaring that the insurance policy it issued

to Attorney Aul did not cover the Andersons' claim.

     ¶3     The    WILMIC    insurance          policy   provides      coverage      for

those    "claims   that     are    first        made   against   the    insured      and

reported to the [insurance company] during the policy period"

(emphasis added).         This type of policy is commonly known as a

claims-made-and-reported policy.

     ¶4     Wisconsin's      notice-prejudice            statutes,       Wis.     Stat.

§§ 631.81(1) and 632.26(2) (2011-12),2 provide that an insured's

failure to furnish timely notice of a claim as required by the

terms of a liability policy will not bar coverage unless timely

notice was "reasonably possible" and the insurance company was
"prejudiced" by the delay.
     1
       Anderson v. Aul, 2014 WI App 30, 353 Wis. 2d 238, 844
N.W.2d 636.

     Justices Ann Walsh Bradley and David T. Prosser join this
lead opinion.     Justices N. Patrick Crooks, Patience D.
Roggensack, and Michael J. Gableman join Justice Annette K.
Ziegler's concurring opinion, which represents the majority
opinion of the court.      See ¶106 n.1 of Justice Ziegler's
opinion.
     2
       All subsequent references to the Wisconsin Statutes are to
the 2011-12 version unless otherwise indicated.


                                            2
                                                                              No.   2013AP500



       ¶5     The question presented is whether Wisconsin's notice-

prejudice      statutes      supersede       the    WILMIC       policy's      requirement

that   claims       be    reported     during      the     policy      period.      If   the

notice-prejudice statutes supersede this reporting requirement,

the    next    question       is      whether,      under        the    notice-prejudice

statutes, WILMIC was prejudiced by Attorney Aul's failure to

report the claim during the policy period.

       ¶6     The parties agree that the Andersons' claim against

Attorney      Aul    was    first     made    during       the      policy   period,     that

Attorney Aul did not report the claim during the policy period,

and    that   reporting       the     claim       during      the    policy    period    was

reasonably possible.            They dispute whether the WILMIC policy's

requirement that claims be reported during the policy period is

governed      by    the    notice-prejudice          statutes          and   also   whether

WILMIC was prejudiced by Attorney Aul's failure to report the

claim during the policy period.

       ¶7     Upon       considering    the       text     of    the    notice-prejudice

statutes,      the       historical    context       of       claims-made-and-reported
policies,      the        statutory     history          of      the    notice-prejudice

statutes, the consequences of alternative interpretations of the

notice-prejudice statutes, and the purpose of claims-made-and-

reported policies, we conclude that Wisconsin's notice-prejudice

statutes do not supersede the reporting requirement specific to

claims-made-and-reported policies.

       ¶8     Because we conclude that the notice-prejudice statutes

do not supersede the WILMIC policy's requirement that claims be
reported within the policy period, we need not address whether,
                                              3
                                                                         No.    2013AP500



under the notice-prejudice statutes, WILMIC was prejudiced by

Attorney Aul's failure to report the claim during the policy

period.     However, even if we had determined that the notice-

prejudice statutes supersede this reporting requirement, WILMIC

would    prevail.          Requiring    an       insurance     company    to    provide

coverage for a claim reported after the end of a claims-made-

and-reported      policy       period       is    per   se    prejudicial       to   the

insurance company.

    ¶9      Accordingly, the decision of the court of appeals is

reversed.

    ¶10     Our analysis is as follows:                      After briefly setting

forth the undisputed facts, we discuss the standards of review

applicable      to     a    review     of    summary     judgment        and    to   the

interpretation        and      application        of    insurance    policies        and

statutes.       We follow this discussion with an analysis of the

nature    and        history     of     claims-made-and-reported               insurance

policies and the terms of the WILMIC policy at issue in the

instant case.         Lastly, we interpret the relevant statutes, Wis.
Stat. §§ 631.81(1) and 632.26(2), and discuss their application

to the WILMIC policy.

                                             I

    ¶11     The facts are not in dispute for purposes of this

review.

    ¶12     On December 23, 2009, Melissa and Kenneth Anderson's

attorney notified Attorney Thomas Aul by letter that they "were

dissatisfied with the legal representation [Attorney Aul had]
provided."      The specific allegations were that Attorney Aul had
                                             4
                                                                                No.     2013AP500



an unwaivable conflict of interest in the Andersons' purchase of

commercial         property     in   downtown       Delafield;         that     Attorney     Aul

nonetheless represented the Andersons in that transaction; that

the terms of the transaction were "unfair and unreasonable"; and

that        the     "transaction      violate[d]           the        rules     of    attorney

professional          responsibility."              The    Andersons          demanded      that

Attorney Aul pay them $117,125.

        ¶13       Attorney Aul received the letter from the Andersons'

attorney while he was insured under the claims-made-and-reported

professional liability policy issued by WILMIC.

        ¶14       It is undisputed that the letter from the Andersons'

attorney constituted a "claim first made against the insured"

during the policy period (April 1, 2009, to April 1, 2010) and

that the policy required Attorney Aul to report that claim to

WILMIC during the same period.                     Attorney Aul did not report the

claim to WILMIC until March 2011, nearly a year after the policy

period expired.

        ¶15       A year later, in March 2012, the Andersons filed suit
against Attorney Aul and several companies owned by Attorney

Aul.3        The Andersons alleged breach of fiduciary duty, legal

malpractice               (negligence),        breach            of         contract,        and

misrepresentation             contrary    to        Wis.    Stat.           § 100.18.        The

Andersons          also     sought   punitive        damages          for     Attorney    Aul's


        3
       The companies named as defendants were: Aul Real Estate
Investment Company, LLC; Cornerstone Investments of Delafield,
LLC; and Riverside Investments, LLC.


                                               5
                                                                           No.    2013AP500



"malicious"        conduct   toward    the      Andersons    "or     his    intentional

disregard of the[ir] rights."

      ¶16    In May 2012, WILMIC moved to intervene in the lawsuit

and   undertook       Attorney     Aul's    defense   under     a    reservation          of

rights.     The circuit court granted WILMIC's motion to intervene

and bifurcated the case to address the issue of coverage first.

      ¶17    WILMIC filed a motion for summary judgment, seeking a

declaration that the insurance policy it had issued to Attorney

Aul did not provide coverage for the Andersons' claim.                                   The

circuit court granted WILMIC's motion for summary judgment.                               In

an oral ruling, the circuit court stated that it was "satisfied

that Mr. Aul did not notify [WILMIC] in a timely fashion."                               The

circuit     court     further     stated     that   "there's       nothing        in    this

record      that      indicates     specifically      that      WILMIC           has    been

prejudiced       by   this   [untimely      reporting],      but     that's       not    the

standard as it presently exists. . . ."

      ¶18    On appeal, the court of appeals reversed the summary

judgment in WILMIC's favor and held that "[b]oth the applicable
statutes . . . and our case law make it clear that the circuit

court     must     determine      whether    untimely       notice    prejudiced          an

insurer; the finding of untimeliness is not solely dispositive."4

The court of appeals then applied the definition of "prejudice"

adopted by this court in Neff v. Pierzina, 2001 WI 95, ¶44, 245




      4
          Anderson, 353 Wis. 2d 238, ¶11.


                                            6
                                                                            No.     2013AP500



Wis. 2d 285, 629 N.W.2d 177,5 and concluded that because Attorney

Aul's untimely reporting of the claim did not hinder WILMIC's

"ability    to    investigate,      evaluate,          or     settle        [the]    claim,

determine coverage, or present an effective defense," WILMIC had

not been prejudiced.6

                                          II

     ¶19    Summary judgment is granted when there is no genuine

issue as to any material fact and the moving party is entitled

to judgment as a matter of law.7                "An appellate court reviews a

summary judgment applying the same standards and methods used by

the circuit court."8

     ¶20    Whether     summary     judgment         should    be   granted         in   the

instant    case   depends      on   the        interpretation          of    the     WILMIC

insurance policy and the interpretation and application of Wis.

Stat.     §§ 631.18    and    632.26,      the       notice-prejudice             statutes.

Interpretation        and    application        of     insurance        policies         and

statutes    are   ordinarily      questions       of    law    this     court       decides



     5
       "Prejudice to the insurer in this context is a serious
impairment of the insurer's ability to investigate, evaluate, or
settle a claim, determine coverage, or present an effective
defense, resulting from the unexcused failure of the insured to
provide timely notice." Neff v. Pierzina, 2001 WI 95, ¶44, 245
Wis. 2d 285, 629 N.W.2d 177.
     6
         Anderson, 353 Wis. 2d 238, ¶¶13, 16.
     7
         Wis. Stat. § 802.08(2).
     8
       Frost ex rel. Anderson v. Whitbeck, 2002 WI 129, ¶4, 257
Wis. 2d 80, 654 N.W.2d 225.


                                          7
                                                                         No.   2013AP500



independently of the decisions of the circuit court and court of

appeals but benefiting from their analyses.

                                          III

       ¶21     Before examining the reporting requirement set forth

as   a      condition    of    coverage   in     the    claims-made-and-reported

policy at issue in the instant case, we examine the nature and

history       of    claims-made-and-reported           policies,    comparing      them

with       other    types     of   liability     policies.         This    background

information helps inform our interpretation of the text of the

WILMIC insurance policy and the notice-prejudice statutes.

                                           A

       ¶22     There are two primary types of professional liability

insurance          policies:        occurrence     policies        and    claims-made

policies.9         Claims-made policies are further divisible into two

primary types:          pure claims-made policies and claims-made-and-

reported policies.10

       9
       See generally New Appleman on Insurance Law § 20.01[5][a]
(Library ed.) (discussing occurrence-based and claims-made-based
liability insurance). See also Gerald Kroll, The "Claims Made"
Dilemma in Professional Liability Insurance, 22 UCLA L. Rev.
925, 928-31 (1974) (comparing occurrence and claims-made
policies from the perspective of insurance companies and
insureds).
       10
       See Jeffrey P. Griffin, The Inapplicability of the
Notice-Prejudice Rule to Pure Claims-Made Insurance Policies, 42
Conn. L. Rev. 235, 246-47 (2009) (distinguishing claims-made-
and-reported policies from pure claims-made policies).

     Courts and commentators often imprecisely use the term
"claims-made" when they are in fact referring to pure claims-
made policies or claims-made-and-reported policies.


                                           8
                                                                   No.   2013AP500



      ¶23       Occurrence policies provide coverage "if the negligent

act or omission occurs within the policy period, regardless of

the date . . . the claim is made or asserted."11                     It is the

timing     of    the   event    causing    injury,   not   the    assertion    or

reporting of a claim based on that injury, that triggers the

initial grant of coverage.             An insurance company may be held

liable under an occurrence policy for claims made long after the

policy period has expired.

      ¶24       An occurrence policy may, however, require the insured

to provide notice of a claim "as soon as practicable" or within

a stated period.         The requirement that notice be given to the

insurance company "as soon as practicable" or within a stated

period serves to maximize the insurance company's "opportunity

to   investigate,      set     reserves,   and   control   or    participate   in

negotiations with the third party asserting the claim against

the insured."12




      11
       Griffin, supra note 10, at 239 (quoting Gulf Ins. Co. v.
Dolan, 433 So. 2d 512, 514 (Fla. 1983)).
      12
        Prodigy Commc'ns Corp. v. Ag. Excess & Surplus Ins. Co.,
288 S.W.3d 374, 380 (Tex. 2009) (internal quotations omitted)
(citing Steven Plitt et al., Couch on Insurance § 186:13 (3rd
ed. 1997)). See also Underwood Veneer Co. v. London Guarantee &
Accident Co., 100 Wis. 378, 381, 75 N.W. 996 (1898) ("The reason
for   requiring   [immediate]  notice  is . . . to   enable  the
[insurance company] to investigate the facts and circumstances
of the accident while they [a]re fresh in mind, with the view of
settling the loss . . . and, in case of a contest, to be
prepared to defend the same . . . .").


                                           9
                                                                    No.     2013AP500



     ¶25    In     contrast,   a    pure   claims-made     policy          provides

coverage for claims made during the policy period.13                        Like an

occurrence policy, a pure claims-made policy may require the

insured to provide notice "as soon as practicable" or within a

stated period.

     ¶26    A     claims-made-and-reported      policy,        as         its    name

suggests, provides coverage for claims both made and reported

during    the    policy   period.    To    trigger   an   initial         grant   of

coverage, the injured third party must make a claim against the

insured during the policy period and the insured must report

that claim to the insurance company within the same period.14

The event upon which the claim is based can, and often does,

occur before the policy came into existence.15

     ¶27    Like     occurrence     policies     and      pure       claims-made

policies, a claims-made-and-reported policy can also contain a

notice provision requiring the insured to give notice to the




     13
       See 5 Ronald E. Mallen &                Jeffrey    M.     Smith,         Legal
Malpractice § 34:14 (5th ed. 2000).
     14
       New Appleman on Insurance Law § 20.01[7][c] (stating that
"coverage is triggered only where the third-party claim is
asserted against the policyholder during the policy period and
the policyholder notifies the carrier of the claim during the
policy period" (emphasis in original)).
     15
       1 Arnold P. Anderson, Wisconsin Insurance Law § 5.4 (6th
ed. 2013) ("The claims-made policy usually provides coverage for
negligent acts that occurred before the policy's effective
date . . . .").


                                      10
                                                                        No.     2013AP500



insurance company "as soon as practicable" or within a stated

period.16

       ¶28       The requirement in a claims-made-and-reported policy

that    claims      be     reported        within     the   policy   period    and   the

requirement that notice be provided "as soon as practicable" or

within       a    stated        period     are    distinct    and    serve     different

purposes.17        The requirement that claims be reported during the

policy period "is directed to the temporal boundaries of the

policy's basic coverage terms . . . ."18                      If the claim is not

reported within the policy period, there is no initial grant of

coverage.           As     we     stated     previously,      the    purpose    of   the

requirement that notice be given "as soon as practicable" or

within a stated period is to enable the insurance company to

begin investigating the claim.




       16
       See Griffin, supra note 10, at 247 ("The insuring
agreements in [claims-made-and-reported] policies typically
state that 'the insured shall, as a condition precedent to their
rights under this policy, give written notice as soon as
practicable to the company of a claim made against the
insured . . . .").
       17
       See Chas. T. Main, Inc. v. Fireman's Fund Ins. Co., 551
N.E.2d 28, 29 (Mass. 1990) ("There are, in general, two types of
notice   requirements . . . .   One   is   a   requirement   that
notice . . . be   given    to   the    insurer   'as    soon   as
practicable' . . . . The other . . . requires reporting of the
claim during the term of the policy . . . . The purposes of the
two types of reporting requirements differ sharply.").
       18
       Prodigy Commc'ns Corp., 288 S.W.3d at 380 (citing Steven
Plitt et al., Couch on Insurance § 186:13 (3rd ed. 1997)).


                                                 11
                                                                      No.   2013AP500



     ¶29     Not surprisingly, these two provisions (the reporting

requirement    specific     to    claims-made-and-reported            policies    and

the notice requirement in all three kinds of liability policies)

have been confused by practitioners and the judiciary.19                         This

confusion can make it difficult to interpret notice-prejudice

statutes and the cases discussing them.

     ¶30     Occurrence    policies    once      dominated      the    professional

liability insurance market.20              However, in the late 1960s and

early     1970s,   pure   claims-made       policies      and    claims-made-and-

reported     policies     began    gaining       favor    in    the    professional

liability     insurance    market     as    an    antidote      to    the   problems

arising with occurrence insurance.21


     19
          Steven Plitt et al., Couch on Insurance § 186:13 (3rd ed.
1997).
     20
       See Sol Kroll, "Claims Made" - Industry's Alternative:
"Pay as You Go" Products Liability Insurance, 1976 Ins. L.J. 63,
64 (1976) (discussing the history of liability insurance and the
industry's transition from occurrence-based to "claims made"-
based policies).
     21
       John K. Parker, The Untimely Demise of the "Claims Made"
Insurance Form?    A Critique of Stine v. Continental Casualty
Company, 1983 Det. C. L. Rev. 25, 28-29 (1983).         See also
Carolyn M. Frame, "Claims-Made" Liability Insurance: Closing the
Gaps With Retroactive Coverage, 60 Temp. L.Q. 165, 171 (1987)
("In an attempt to reverse escalating losses, insurers developed
the claims-made policy to replace the occurrence policy."). See
also Gerald Kroll, The "Claims Made" Dilemma in Professional
Liability Insurance, 22 UCLA L. Rev. 925, 927 (1974) ("[T]he
'claims made' policy can be advantageous to both insureds and
insurers and deserves preservation.").

     For a general discussion              of    this    history,     see   Griffin,
supra note 10, at 239-46.


                                       12
                                                         No.    2013AP500



     ¶31    The primary drawback of occurrence-based professional

liability policies is that the insurance company faces long tail

exposure.    "This 'tail' is the lapse of time between the date of

the error and the time the claim is made."22       Long tail exposure

prevents insurance companies from making a precise calculation

of premiums based upon the cost of the risks assumed.23

     ¶32    In contrast, "[t]he principal advantage of the claims-

made policy for insurers is the avoidance of 'tail liability.'

After termination of a policy, the claims-made insurer is no

longer exposed to liability . . . ."24       In addition, because pure

claims-made policies and claims-made-and-reported policies are

advantageous to insurance companies, they apparently result in

lower premiums for the insured.25

     ¶33    By   the   mid-1980s,    there   was   "almost     universal

acceptance of the 'claims made' insurance form."26       "Most recent

     22
          Zuckerman v. Nat'l Union Fire Ins. Co., 495 A.2d 395, 399
(1985).
     23
          Zuckerman, 495 A.2d at 399.

     Occurrence policy premiums have proven to be "inadequate to
cover the inflationary increase in the cost of settling claims
asserted years later." Id. Furthermore, the insurance company
may no longer be in existence when the claim is finally made.
Id.
     24
          Frame, supra note 21, at 166 (footnote omitted).
     25
          Griffin, supra note 10, at 244-45.
     26
       Parker, supra note 21, at 32. See also, e.g., Zuckerman,
495 A.2d 395; Gulf Ins. Co., 433 So. 2d 512; Poirier v. Nat'l
Union Fire Ins. Co., 517 So. 2d 225 (Ct. App. La. 1987).


                                    13
                                                                            No.     2013AP500



forms [for         legal malpractice insurance]              are 'claims-made-and-

reported,' requiring that the claim first be made against the

insured and reported to the insurer within the policy term."27

                                             B

       ¶34    With this background regarding the three main types of

professional liability insurance policies in mind, and cognizant

of the distinction between the reporting requirement specific to

claims-made-and-reported           policies        and    the    notice       requirement

that may appear in all three types of policies, we turn to the

text of the WILMIC insurance policy.

       ¶35    The    requirement      that       all   claims        made   against       the

insured during the policy period be reported to WILMIC during

the policy period is set forth in several places within the

policy.

       ¶36    First, the declarations page of the insurance contract

states:       "This policy is limited to liability for only those

claims that are first made against the insured and reported to

the Company during the policy period.                     This is a non-renewable
policy."

       ¶37    Second, the introduction to the reissue application

that     Attorney     Aul    submitted       to     WILMIC      in    2009,       which   is

incorporated        into    the   policy,        begins   by    stating:           "Because

claims      made    and    reported   policies         expire    each       year,    it   is




       27
            5 Mallen & Smith, supra note 13, § 34:14.


                                         14
                                                            No.    2013AP500



critical that you report claims promptly and before your policy

expires" (emphasis in policy).

    ¶38   Third, a box titled "IMPORTANT NOTICE" on the cover of

the policy booklet states: "THIS IS A CLAIMS MADE AND REPORTED

INSURANCE POLICY.     COVERAGE IS LIMITED TO LIABILITY FOR ONLY

THOSE CLAIMS THAT ARE FIRST MADE AGAINST YOU AND REPORTED IN

WRITING TO US DURING THE POLICY PERIOD.          THIS IS A NONRENEWABLE

POLICY" (emphasis in policy).

    ¶39   Fourth,    the   first   paragraph    of   Article   I   of   the

insurance policy (titled "COVERAGE AGREEMENTS") states:

    This insurance applies to claims first made against
    you and first reported to us in writing during the
    policy period that result from wrongful acts that
    occur after the retroactive date, if any.     You must
    send a written report of a claim or claim incident to
    us at our address set forth on the declarations page
    during the policy period. . . . Your failure to send a
    written report of a claim or claim incident to us
    within the policy period shall be conclusively deemed
    prejudicial to us.

(Emphasis in policy.)
    ¶40   Fifth,    Article   IV   of   the   insurance   policy   (titled
"CONDITIONS") states:

    A.    Notice of claim, claim incident or suit

          1.    As a condition of this insurance coverage,
                you shall, within this policy period:

                a. give us written notice of any claim or
                   claim incident; and

                b. immediately forward to us every demand,
                   notice, summons or other process received
                   directly    by    you    or    by    your
                   representatives, in the event suit is
                   brought against you.

                                   15
                                                                            No.     2013AP500


            2.     The written notice of a                     claim      or      claim
                   incident shall include the:

                   a.   date or dates of the alleged                       wrongful
                        act, error or omission; and

                   b. injury or damages that have resulted or
                      may result; and

                   c. circumstances by which you first became
                      aware of such alleged wrongful act.
(Emphasis in policy.)

     ¶41    Finally,      Article        V   of    the    insurance       policy    (titled

"EXCLUSIONS") states:

     We will not defend or pay, under this coverage:

            . . . .

     J.     Any claim or claim incident not reported                                in
            writing within the time period required                                 in
            Article IV, Conditions.

(Emphasis in policy.)
     ¶42    The    text       of   the       WILMIC      insurance       policy     clearly

states,    and    the   parties      do      not    dispute,       that    the     policy's

coverage is limited to those claims that were first made against

Attorney Aul and first reported in writing to WILMIC between

April 1, 2009, and April 1, 2010.                     As we discussed previously,

the purpose of restricting coverage to claims both made and

reported    during      the    policy        period      is   to   set    "the     temporal

boundaries of the policy's basic coverage terms," that is, to

"define[ ] the limits of the insurer's obligation."28


     28
       13 Steven Plitt et al., Couch on Insurance § 186:13 (3rd
ed. 1997).


                                             16
                                                       No.   2013AP500



    ¶43    Neither party asks the court to rewrite the insurance

policy (a task we will not undertake) to bind WILMIC to a risk

it "did not contemplate and for which it has not been paid."29

Rather, the parties dispute the effect of the notice-prejudice

statutes on the WILMIC policy's reporting requirement.

    ¶44    We therefore turn to the notice-prejudice statutes.

                                 IV

    ¶45    There are two notice-prejudice statutes at issue in

the instant case.

    ¶46    First is Wis. Stat. § 631.81(1), which applies to all

insurance policies delivered in this state30 and provides that

failure to furnish "notice or proof of loss" within the time

required by the policy will "not invalidate or reduce a claim

unless the insurer is prejudiced thereby and it was reasonably

possible to meet the time limit."      The text of § 631.81(1) reads

as follows:

    (1)    Timeliness of notice. Provided notice or proof of
           loss is furnished as soon as reasonably possible
           and within one year after the time it was
           required by the policy, failure to furnish such
           notice or proof within the time required by the
           policy does not invalidate or reduce a claim
           unless the insurer is prejudiced thereby and it
           was reasonably possible to meet the time limit.

    29
       Smith v. Katz, 226 Wis. 2d 798, 807, 595 N.W.2d 345
(1999) ("It is important to remember that 'a contract of
insurance is not to be rewritten by the court to bind an insurer
to a risk which the insurer did not contemplate and for which it
has not been paid.'").
    30
         See Wis. Stat. § 631.01(1).


                                 17
                                                                     No.    2013AP500



     ¶47     Second is Wis. Stat. § 632.26, which applies to "every

liability        insurance    policy"    delivered    in     this     state31    and

provides that an insured's failure to give any notice required

by   the    policy     will   not     preclude    coverage    if     it    was   not

reasonably possible to give the prescribed notice, notice was

given as soon as reasonably possible,32 and the insurance company

was not prejudiced by the late notice.33                   The statute further

states     that    "the   risk   of   nonpersuasion     is    upon    the    person

claiming there was no prejudice."34                 The text of Wis. Stat.

§ 632.26 reads as follows:

     (1) Required provisions.                 Every liability insurance
     policy shall provide:

      . . . .

     (b) That failure to give any notice required by the
     policy within the time specified does not invalidate a
     claim made by the insured if the insured shows that it
     was not reasonably possible to give the notice within
     the prescribed time and that notice was given as soon
     as reasonably possible.

     (2) Effect of failure to give notice. Failure to give
     notice as required by the policy as modified by sub.
     (1)(b) does not bar liability under the policy if the
     insurer was not prejudiced by the failure, but the
     risk of nonpersuasion is upon the person claiming
     there was no prejudice.



     31
           Wis. Stat. § 632.26(1).
     32
           Wis. Stat. § 632.26(1)(b).
     33
           Wis. Stat. § 632.26(2).
     34
           Id.


                                         18
                                                                                  No.     2013AP500



       ¶48      We are faced with a difficult and close question of

statutory            interpretation,          namely           whether      these        statutes

supersede the terms of the WILMIC policy that limit its coverage

to those claims that are first made against Attorney Aul and

first reported to WILMIC within the policy period.                                   We resolve

this         question         by     employing          the       tools        of       statutory

interpretation.

       ¶49      The       court     has    set     forth       the     tools    of      statutory

interpretation many times.                   "Our goal in interpreting a statute

is     to      discern        and    give        effect     to       the    intent        of    the

legislature."35             We begin with the statute's text.36                      "Words are

ordinarily interpreted according to their common and approved

usage;         technical           words     and       phrases . . . are                ordinarily

interpreted according to their technical meaning."37                                      We read

statutes        as    a    whole    and     "give      effect     to    each   word"       in   the

statute "to avoid surplusage."38

       ¶50      "[I]t       is    often    valuable       to    examine     the      statute     in

context."39               "[C]ontext       inflects       statutory        interpretation."40

       35
       Hubbard v. Messer, 2003 WI 145, ¶9, 267 Wis. 2d 92, 673
N.W.2d 676.
       36
            Legue v. City of Racine, 2014 WI 92, ¶61, 357 Wis. 2d 250, 849 N.W.2d 837.
       37
             Id.
       38
             Id.
       39
       Seider v. O'Connell, 2000 WI 76, ¶43, 236 Wis. 2d 211,
612 N.W.2d 659.
       40
             Id., ¶45.


                                                  19
                                                                      No.    2013AP500



"The statutory language is examined in the context in which it

is used."41         Context refers not only to the language of the

statute but also to the relationship of the statute at issue

with    other      statutes.42       Context    can    also   mean    the    factual

setting.43        The same statute may be "ambiguous in one setting and

unambiguous in another."44           "[R]easonable minds can differ about

a statute's application when the text is a constant but the

circumstances to which the text may apply are kaleidoscopic."45

       ¶51    To    determine    a   statute's     meaning,    we     examine      the

statutory history and case law.               In addition, the purpose of the

statute and "the consequences of alternative interpretations"

inform our interpretation.46            We decline to read statutes in a

way that produces absurd, implausible, or unreasonable results,

or results that are at odds with the legislative purpose.47

       ¶52    We begin our interpretation of the notice-prejudice

statutes with the statutory texts.




       41
       Klemm v. Am. Transmission                Co.,   2011   WI     37,    ¶10,   333
Wis. 2d 580, 798 N.W.2d 223.
       42
            Seider, 236 Wis. 2d 211, ¶43.
       43
            Id.
       44
            Id.
       45
            Id.
       46
            Legue, 357 Wis. 2d 250, ¶61.
       47
            Hubbard, 267 Wis. 2d 92, ¶9.


                                         20
                                                                       No.     2013AP500



     ¶53     On their face, these statutes can be read to prohibit

an insurance company from denying coverage under a liability

policy because notice of a claim was given after the end of the

policy period, unless the insurance company was prejudiced by

the delay.     The Andersons urge us to adopt this reading of the

statutes and to invalidate the WILMIC policy's requirement that

claims be reported during the policy period.                     They argue that

the statutes supersede this requirement.

     ¶54     The only court that has considered Wisconsin's notice-

prejudice statutes in the context of a claims-made-and-reported

policy is the United States Court of Appeals for the Seventh

Circuit.48    In Lexington Insurance Co. v. Rugg & Knopp, Inc., 165

F.3d 1087 (7th Cir. 1999), the federal court of appeals adopted

the literal reading of the statutes advanced by the Andersons in

the present case.          In adopting this interpretation, the federal

court of appeals was greatly influenced by its limited role as a

federal    court    sitting      in   diversity   on    a     case   requiring      the

interpretation of Wisconsin law.49
     ¶55     The insurance policy at issue in Lexington Insurance

required     that    any    claim     made    within    the    policy    period      be

reported to the insurance company within 30 days of the policy's

expiration.        The federal court of appeals first noted that if

interpretation      of     the   insurance     policy   were     the    only    issue,

     48
       Lexington Ins. Co. v. Rugg & Knopp, Inc., 165 F.3d 1087
(7th Cir. 1999).
     49
          Id. at 1092.


                                         21
                                                                             No.    2013AP500



there       would    be    no   coverage      because    the       insured   indisputably

failed to report the claim as required by the policy.50                              It then

examined Wisconsin's notice-prejudice statutes, noting that "a

federal court sitting in diversity must proceed with caution in

making pronouncements about state law."51

       ¶56     The        federal     court      of     appeals       concluded           that,

regardless of the type of policy, the insurance company could

not     “refuse       liability       for   payment      merely       because       of    late

notice."52          It based this determination on the literal words of

the statutes, holding that on their face, the notice-prejudice

statutes provide that in Wisconsin, an insurance company may not

contractually limit its liability to claims reported within the

policy period.53

       ¶57     Nevertheless, the federal court of appeals recognized

that statutory interpretation does not end with an examination

of the statute's text.54              We agree.       Although the literal reading

of a statute is important, a court is not bound by that reading

when     other       factors        contradict     it.         A     statute       that    has
superficial clarity may nevertheless contain latent ambiguities,




       50
            Id. at 1089.
       51
            Id. at 1092.
       52
            Id. at 1094.
       53
            Id. at 1092.
       54
            Id. at 1091-92.


                                              22
                                                                        No.    2013AP500



and courts may turn to various interpretive aids for guidance in

resolving them.55

      ¶58     The notice-prejudice statutes state that they apply to

all liability policies, but as we explained previously, there

are   three    different     types     of    professional      liability       policies

with two different types of notice and reporting requirements.

The statutes do not differentiate between the notice requirement

that may be included in any of the three types of liability

policies     and   the    reporting     requirement         particular    to   claims-

made-and-reported policies.

      ¶59     We conclude after a close examination of the notice-

prejudice statutes that they were not intended to supersede the

reporting      requirement          specific     to    claims-made-and-reported

policies.

      ¶60     We begin by examining the context of the statutes,

including the historical context of occurrence and claims-made-

and-reported policies, as well as the statutory history.

      ¶61     We discussed previously the history of claims-made-
and-reported policies.              Claims-made-and-reported policies were

relatively new to the liability insurance market in the 1970s.

Occurrence liability policies were predominant.

      ¶62     Wisconsin     Stat.      § 631.81       was     enacted     in    1975.56

Wisconsin     Stat.      § 632.26    was    enacted    in    1979.57      Thus,    both

      55
       2A Norman Singer & Shambie Singer, Sutherland Statutes
and Statutory Construction § 46:4 (7th ed. 2008).
      56
           Ch. 375, Laws of 1975.


                                            23
                                                                    No.   2013AP500



notice-prejudice statutes were enacted when occurrence liability

policies were predominant.          These notice-prejudice statutes were

part of a broader revision of Wisconsin's insurance laws in

response to recommendations made by the Insurance Laws Revision

Committee of the Wisconsin Legislative Council.                      The minutes

from this Committee's meetings are not helpful in determining

whether the notice-prejudice statutes were intended to reach the

reporting      requirement      specific     to     claims-made-and-reported

policies.

      ¶63    Based, however, on the timing of the development of

claims-made-and-reported        insurance    and        the   enactment   of   the

notice-prejudice statutes, it is plausible that the Committee

and the legislature were thinking of the traditional requirement

that insureds provide notice "as soon as practicable" or within

a   stated    period,   not   the   reporting      requirement      specific    to

claims-made-and-reported policies.

      ¶64    We turn now to statutory history, that is, to the

predecessor statutes to Wis. Stat. §§ 631.81 and 632.26, for
insight into the scope of these notice-prejudice statutes and

their applicability to the reporting requirement in claims-made-

and-reported policies.

      ¶65    The   historical   context     of    the    statutes   begins     with

Bachhuber v. Boosalis, 200 Wis. 574, 229 N.W. 117 (1930), which




      57
           Ch. 102, Laws of 1979.


                                      24
                                                                          No.    2013AP500



involved        an    occurrence-based          automobile      liability       policy.58

After     a    collision,    the      insured      was   charged   with    "negligence

causing the damage."59             The insurance company argued that the

insured was not covered under the policy because he failed to

comply        with    the   policy's     notice      provisions.60         The    policy

required        the    insured     to     give       "immediate    notice        of   the

accident . . . and immediate notice of the claim."61                        This court

agreed with the insurance company: "The provisions in the policy

as to notice . . . are conditions precedent, failure to perform

which . . . constitutes            [a]        defense[]    to    liability       on   the

policy" (emphasis added).62

     ¶66       The    important    words       are   "conditions    precedent."         A

condition        precedent       is      an     event that      must      occur before

performance under a contract becomes due.63                        In other words,

     58
        For earlier cases requiring compliance with an insurance
policy's notice requirements in order to gain coverage, see
Britz v. Am. Ins. Co., 2 Wis. 2d 192, 199-200, 86 N.W.2d 18
(1957).
     59
          Bachhuber v. Boosalis, 200 Wis. 574, 575, 229 N.W. 117
(1930).
     60
          Id.
     61
          Id.
     62
          Id.
     63
       Restatement (Second) of Contracts § 224, at 160 (1981).
The Restatement (Second) of Contracts abandons the term
"condition precedent" in favor of "condition." Id. at 164. The
Reporter's Note to § 224 states that the phrase "condition
precedent" has been the subject of frequent criticism and has
caused unnecessary confusion. Id.

                                                                           (continued)
                                              25
                                                                     No.    2013AP500



there    is   no     coverage    under   the     policy    until    the    condition

precedent      has    been    performed.64         Thus,     by    construing      the

occurrence      policy's        "immediate       notice"     requirement      as    a

condition     precedent,        the   Bachhuber    court    determined      that    no

coverage existed under the policy in the absence of "immediate

notice."

    ¶67       Bachhuber      reflects     what     was     then    the    prevailing

interpretation of policy provisions requiring notice "as soon as




     For a discussion of the use of the phrase "condition
precedent," see Fox v. Catholic Knights Ins. Soc'y, 2003 WI 87,
¶¶23-24, 263 Wis. 2d 207, 665 N.W.2d 181.
    64
       See Richard Lord, 16 Williston on Contracts § 49:87 (4th
ed. 2000) (stating that when an insurance contract contains a
condition precedent, "the fulfillment of the condition by the
insured must occur before the insurer becomes legally liable on
the policy").    See also id., § 49:109 ("Insurance contracts
quite commonly contain, as an express condition precedent to the
insurer's duty to defend or indemnify the insured, a provision
requiring the insured to give notice to the insurer, within a
specified or reasonable time . . . . [L]iability will arise only
when notice is given.").


                                         26
                                                              No.   2013AP500



practicable" or within a stated time.65              Such provisions were

considered     "of   the   essence    of    the   [liability    insurance]

contract."66    Even when the liability policy lacked a forfeiture

clause,   an   insured's   failure   to    provide   notice   "as   soon   as

practicable" or within a stated time would usually "release the

insurer from liability."67     In other words, there was no coverage




     65
       See L.S. Elkins, Annotation, Liability Insurance: Clause
with Respect to Notice of Accident, Claim, etc., or with Respect
to Forwarding Suit Papers, 76 A.L.R. 23, 53-74 (1932) (surveying
cases holding that liability policy provisions requiring
immediate notice or notice within a reasonable time create
conditions precedent to the insurance company's obligation to
pay); Restatement of Contracts § 259, at 371 (1932) ("Though
failure by [the insured] to notify the [insurance company]
within the 30-day period is stated as a condition subsequent
terminating a duty to pay, such notification is in effect a
condition precedent, since there is no duty of immediate
performance until notification has been given.").      See also
Foster v. Fid. & Cas. Co., 99 Wis. 447, 449, 75 N.W. 69 (1898)
(because the insured failed to fulfill the condition precedent
of providing immediate notice of "any accident or injury for
which a claim is to be made," judgment in the insured's favor
was reversed).
     66
       L.S. Elkins, Annotation, Liability Insurance: Clause with
Respect to Notice of Accident, Claim, etc., or with Respect to
Forwarding Suit Papers, 76 A.L.R. 23, 58 (1932).
     67
       L.S. Elkins, Annotation, Liability Insurance: Clause with
Respect to Notice of Accident, Claim, etc., or with Respect to
Forwarding Suit Papers, 76 A.L.R. 23, 201-02 (1932).

                                                               (continued)
                                     27
                                                                   No.    2013AP500



under the policy when an insured did not comply with a condition

precedent such as notice within a specified time.

       ¶68    The    Wisconsin   legislature      responded    swiftly     to   the

harsh result in Bachhuber by enacting Wis. Stat. § 204.33 (1931-

32).68       This notice-prejudice statute provided that failure to

give     timely     notice   would   not    bar   coverage   if   the    insurance

company was not prejudiced by the delay.                     The effect of the

statute was to expand certain policies' coverage.                   The statute

applied, however, only to "liability or loss arising by reason

of the ownership, maintenance or use of a motor vehicle issued

in this state."69       The statute reads in relevant part as follows:

       (3) . . . . Failure to give [timely] notice shall not
           bar liability under such policy of insurance,


     Even now, "a vast majority of notice provisions are
described as conditions precedent to recovery under the
policies." 13 Steven Plitt et al., Couch on Insurance § 186:41
(3rd ed. 1997).   However, many courts do not apply the "strict
forfeiture" rule when an insured fails to fulfill the condition
precedent that notice be provided "as soon as practicable" or
within a stated time.   Steven Plitt et al., Couch on Insurance
§ 186:6 (3rd ed. 1997).   "A recent survey places 11 states and
the   District   of  Columbia   in   this  [strict  forfeiture]
category . . . ; 25 states require some showing of prejudice
from the insurer." Id.
       68
            See ch. 477, Laws of 1931; Britz, 2 Wis. 2d at 201.
       69
       Wis. Stat. § 204.33(1) (1931-32).      See RTE Corp. v.
Maryland Cas. Co., 74 Wis. 2d 614, 631, 247 N.W.2d 171 (1976)
(holding that "[t]his court has consistently treated the rule
established in the [notice-prejudice] statute as an exception to
the general rule" that insurance companies need not show
prejudice to bar coverage based on an insured's failure to
fulfill the condition precedent of providing notice "as soon as
practicable" or within a stated time.).


                                           28
                                                                          No.   2013AP500


            agreement   of  indemnity   or  bond . . . if the
            insurer was not prejudiced or damaged by such
            failure, but the burden of proof to so show shall
            be upon the person claiming such liability.70
     ¶69    Bachhuber was followed by Britz v. American Insurance

Co., 2 Wis. 2d 192, 202, 86 N.W.2d 18 (1957).                            Britz did not

involve an automobile accident; it involved theft.                         The parties

disputed    whether    the    notice-prejudice         statute      applied      to    the

insurance policy at issue, which required notice "as soon as

practicable."      The court concluded that the statute's explicit

reference    to   automobile         liability      policies       was    dispositive.

Insurance    companies       could    deny       coverage   under    non-automobile

liability insurance policies when the insured failed to provide

notice within the period stated in the policy.

     ¶70    A decade later, Allen v. Ross, 38 Wis. 2d 209, 156

N.W.2d 434 (1968), involved an automobile liability policy.                            The

policy provided that notice had to be given to the insurance

company "as soon as practicable" after an accident occurred.

The court declared that the automobile liability policy's notice

requirement was subject to the notice-prejudice statute.71

     ¶71    Thus, by the mid-1970s, it was well settled that the

notice-prejudice       statute       then    in    existence       applied      only    to

automobile liability policies.              The statute had not been applied




     70
          Wis. Stat. § 204.33(3) (1931-32).
     71
          Allen   v.   Ross,     38    Wis. 2d 209,         213,    156     N.W.2d 434
(1968).


                                            29
                                                                                      No.    2013AP500



to   any    non-automobile            liability         policy       or    to     the       reporting

requirement specific to claims-made-and-reported policies.

      ¶72       In 1975, the legislature modified and reenacted the

notice-prejudice statute as Wis. Stat. § 631.81.                                      The scope of

the notice-prejudice statute's applicability was expanded from

automobile liability policies to "all insurance policies."72

      ¶73       It    is     clear       the    legislature          intended          Wis.     Stat.

§ 631.81        to    reach    beyond          automobile      liability          polices,          but

neither     the       text    of     the      revised    statute          nor     the       Committee

comments        discussing         the     provision         addresses          the    distinction

between the           requirement        that notice be provided "as soon as

practicable"          or     within       a    stated     period          and    the        reporting

requirement specific to claims-made-and-reported policies.

      ¶74       Although it is not clear from the statutory history or

Committee       materials       we       located      that    the    legislature             intended

this notice-prejudice statute to reach beyond the traditional

type of notice requirement, the Committee comments to Wis. Stat.

§ 631.81 are helpful.                 They seem to signify that the statute
does not reach the reporting requirement specific to claims-

made-and-reported policies.

      ¶75       The Comments state that "[t]he proper time for giving

notice     of    a     loss    or     injury       depends      on    the        nature       of    the

coverage . . . . In each class of insurance, the interests of

the insured and insurer must be carefully evaluated and weighed

      72
       Ch.           375,    Laws    of       1975,    § 41,     Leg.       Council          Note    to
631.81(1).


                                                 30
                                                                                 No.       2013AP500



against each other."73              The Comments then provide the following

example:         "For    instance,        the     conditions        for    hospitalization

benefits in case of plain sickness insurance are easy to check

even after some time . . . . The insurer's position in adjusting

such claims may not be materially affected if it receives the

hospital or doctors' bills months later."74

       ¶76       These Comments suggest that the statute refers to the

kind of notice provision that enables an insurance company to

effectively          investigate          a     claim,      not     to     the         reporting

requirement         in     claims-made-and-reported                policies.                As     we

explained         previously,        the        requirement        in     claims-made-and-

reported      policies       that    claims       be     reported       during     the      policy

period      is    not    designed       to     assist     the     insurance       company         in

investigating           those   claims.          It     therefore       appears        that      Wis.

Stat. § 631.81 does not reach the reporting requirement specific

to claims-made-and-reported policies.

       ¶77       Wisconsin      Stat.     § 632.26       was    enacted     in     1979,         just

four    years      later.75         The       statute    explicitly       states           that   it
applies to "[e]very liability insurance policy."76                                The statute

again       fails,       however,         to     distinguish        between            a    policy

requirement that notice be provided "as soon as practicable" or


       73
            Id.
       74
            Id.
       75
            See ch. 102, Laws of 1979.
       76
            Wis. Stat. § 632.26(1).


                                                31
                                                                             No.     2013AP500



within a stated period and the reporting requirement specific to

claims-made-and-reported policies.                      Again, it is not clear from

the   statutory           history        or     Committee        materials         that     the

legislature        intended       this    notice-prejudice          statute        to     reach

beyond      the    traditional       type        of    notice     requirement        to    the

reporting         requirement       specific           to   claims-made-and-reported

policies.

      ¶78     There is no indication from the historical context of

claims-made-and-reported policies or the statutory history that

the legislature intended to extend the reach of the notice-

prejudice     statutes       to     the       reporting     requirement      specific       to

claims-made-and-reported policies.

      ¶79     To aid us in reaching the correct interpretation of

the notice-prejudice statutes, we next examine the consequences

of alternative interpretations.

      ¶80     If    we    interpret           the     notice-prejudice       statutes        as

inapplicable to the reporting requirement specific to claims-

made-and-reported           policies,          the     consequence      is     that       such
reporting requirements will remain in full force and effect and

an insured may lose coverage by missing the reporting deadline.

Strictly limiting the time in which an insured must report a

claim can lead to harsh results for the insured and third-party

victims.          Indeed, in the present case, the Andersons can be

viewed   as       being   victimized          twice;     first   they   were       allegedly

harmed by Attorney Aul's negligence in representing them and now

they are harmed by Attorney Aul's failure to abide by the WILMIC
policy's reporting requirement.
                                                32
                                                                         No.    2013AP500



     ¶81    Furthermore,           we       are    concerned     that     a     decision

favorable to WILMIC in the present case may open the door for

insurance         companies           to     incorporate       similar         reporting

requirements into a wide range of insurance policies and thereby

circumvent       the       consumer    protection     aspects    of     these    notice-

prejudice statutes.

     ¶82    Yet, if we interpret the notice-prejudice statutes to

apply to the reporting requirement specific to claims-made-and-

reported policies, we will in effect rewrite the terms of such

policies.        This interpretation would mean the legislature has

eliminated       a     significant         element   of    claims-made-and-reported

policies.            The     reporting      requirement,      after     all,    is    what

distinguishes claims-made-and-reported policies from other kinds

of liability policies.                Thus, claims-made-and-reported policies

would be converted into pure claims-made policies or occurrence

policies.        Such an interpretation would frustrate the purpose of

claims-made-and-reported policies.77

     ¶83    We did not locate anything in the statutory text, the
history     of       claims-made-and-reported             policies,     the    statutory

history,     or        the    Committee       materials      indicating        that    the



     77
       "The ultimate threat (and evidence of prejudice) is that
allowing late notice will turn a claims-made policy into an
occurrence policy, which could make insurance difficult to
obtain for . . . professional liability.   Insurers do not write
occurrence policies for such risks because it is unprofitable
and difficult to underwrite."    1 Arnold P. Anderson, Wisconsin
Insurance Law § 5.10 (6th ed. 2013).


                                              33
                                                                                   No.       2013AP500



legislature       intended          to        invalidate          claims-made-and-reported

policies.

     ¶84    In     this       close       statutory             interpretation           case,     we

conclude that requiring an insurance company to cover a claim

reported    after      the     end       of    a     claims-made-and-reported                 policy

period    would       mean    expanding             the       policy's    initial        grant     of

coverage.        We    conclude       that          interpreting         Wisconsin's         notice-

prejudice    statutes         to     rewrite            the    fundamental       terms       of   the

WILMIC insurance policy would be unreasonable.

     ¶85    Persuasive         authority            from       several        courts     that     have

decided issues substantially similar to those presented in the

instant case bolsters our conclusion that the notice-prejudice

statutes do not apply to the requirement in claims-made-and-

reported    policies         that    claims          be       reported    during       the    policy

period.78

     ¶86    Numerous courts have concluded that a claims-made-and-

reported    policy's         limitation            of     coverage       to    claims     reported

during     the    policy      period           is       enforceable       notwithstanding           a




     78
       See Russ ex rel. Schwartz v. Russ, 2007 WI 83, ¶34 n.9,
302 Wis. 2d 264, 734 N.W.2d 874 ("The present case involves a
matter of first impression for which no Wisconsin cases are
directly   on  point.     Therefore,   we  may look  to  other
jurisdictions for persuasive authority.").


                                                   34
                                                           No.   2013AP500



statutory or common-law notice-prejudice rule.79           Other courts

have held the reporting requirement in claims-made-and-reported

policies   unenforceable    in   light   of   statutory   or   common-law

notice-prejudice rules.80




     79
       See, e.g., Gargano v. Liberty Int'l Underwriters, Inc.,
572 F.3d 45, 49 (1st Cir. 2009); DiLuglio v. New England Ins.
Co., 959 F.2d 355, 359 (1st Cir. 1992); Burns v. International
Ins. Co., 929 F.2d 1422, 1425 (9th Cir. 1991); Esmailzadeh v.
Johnson & Speakman, 869 F.2d 422, 424-25 (8th Cir. 1989);
Simundson v. United Coastal Ins. Co., 951 F. Supp. 165, 167-68
(D. N.D. 1997); Bianco Prof'l Ass'n v. Home Ins. Co., 740
A.2d 1051, 1057-58 (N.H. 1999); Textron, Inc. v. Liberty Mut.
Ins. Co., 639 A.2d 1358, 1364-66 (R.I. 1994); Hasbrouck v. St.
Paul Fire & Marine Ins. Co., 511 N.W.2d 364, 367-69 (Iowa 1993);
Chas. T. Main, Inc., 551 N.E.2d at 29-30; Zuckerman, 495 A.2d at
403-05; Gulf Ins. Co., 433 So. 2d at 515-16; Ins. Placements,
Inc. v. Utica Mut. Ins. Co., 917 S.W.2d 592, 597 (Mo. Ct. App.
1996); Sletten v. St. Paul Fire and Marine Ins. Co., 780
P.2d 428, 430-31 (Ariz. Ct. App. 1989).
     80
       See, e.g., Lexington Ins. Co., 165 F.3d at 1092-94
(concluding, in the absence of a state appellate court ruling on
the matter, that Wisconsin's notice-prejudice statutes supersede
the reporting requirement in claims-made-and-reported policies,
but noting that the insurance company likely had a meritorious
claim of prejudice due to the insured's late reporting);
Sherwood Brands, Inc. v. Great Am. Ins. Co., 13 A.3d 1268, 1288
(Md. 2011) (holding that Maryland's notice-prejudice statute
requires a showing of prejudice by the insurance company when
"the act triggering coverage occurs during the policy period,
but the insured does not comply strictly with the policy's
notice provisions," even when the policy is a claims-made-and-
reported policy).   In Sherwood Brands, the Court of Appeals of
Maryland repeatedly highlighted the difference between the
notice-prejudice statutes in Wisconsin and Maryland to support
its holding that in Maryland, an insurance company must show
prejudice to deny coverage on the grounds that an insured
reported a claim after the end of a claims-made-and-reported
policy period. Sherwood Brands, 13 A.3d at 1286, 1288.


                                   35
                                                                           No.   2013AP500



      ¶87     Gulf       Insurance     Co.     v.    Dolan,    433     So. 2d 512    (Fla.

1983),      was     an     early     and      influential       case     regarding    the

enforceability           of    claims-made-and-reported              insurance.81      The

insured      argued        that      general        public    policy     considerations

rendered      unenforceable          the     insurance       policy's    limitation    of

coverage to claims both made and reported during the policy

period.     The Florida Supreme Court disagreed with the insured.

      ¶88     The insured asserted that enforcing the requirement of

notice within the policy period, when the claim at issue was

first made against the insured the day before the policy period

ended, would be unjust.                In rejecting the insured's argument,

the   court       noted       that   "[t]he    essence"       of   a   claims-made-and-

reported policy is "notice to the carrier within the policy

period."82        The court reasoned that if it held otherwise it would

be rewriting the policy to extend coverage:

      If a court were to allow an extension of reporting
      time after the end of the policy period, such is
      tantamount to an extension of coverage to the insured
      gratis, something for which the insurer has not
      bargained. This extension of coverage . . . in effect
      rewrites the contract between the two parties.   This
      we cannot and will not do.83
      ¶89     Gulf Insurance involves a factual scenario different

from the present case.                In Gulf Insurance, reporting the claim


      81
           See Griffin, supra note 10, at 251-52.
      82
       Gulf Ins. Co. v. Dolan, 433 So. 2d 512, 514 (Fla. 1983)
(emphasis in original).
      83
           Id. at 515-16.


                                               36
                                                                No.   2013AP500



within the policy period may not have been reasonably possible.

In the instant case, it was reasonably possible for Attorney Aul

to report the claim within the policy period.              We do not address

in this case whether a policy's limitation of coverage to claims

reported during the policy period is enforceable when reporting

the claim during the policy period was not reasonably possible.

However,     even   Gulf     Insurance         acknowledged   that    "if   an

impossibility prevented notice being given to an insurer at the

very end of the policy period, it may well be that an insured

would be relieved of giving notice during the period of such

impossibility."84

     ¶90    In Zuckerman v. National Union Fire Insurance Co., 495

A.2d 395 (N.J. 1985), the New Jersey Supreme Court adopted the

Gulf Insurance reasoning and held that "no considerations of

public policy . . . inhibit our enforcement" of a claims-made-

and-reported policy's limitation of coverage to claims both made

and reported during the policy period.85             The court rejected the

insured's argument that the insurance company should be required
to prove "appreciable prejudice" in order to avoid liability.86

"Appreciable    prejudice"    was   a    New    Jersey   common-law   doctrine

applicable to notice requirements in occurrence-based automobile



     84
          Gulf Ins. Co., 433 So. 2d at 512 n.1.
     85
       Zuckerman v. Nat'l Union Fire Ins. Co., 495 A.2d 395, 404
(N.J. 1985).
     86
          Id. at 405-06.


                                        37
                                                                     No.     2013AP500



insurance policies.87              The court held this common-law doctrine

inapplicable     "to     a    'claims    made'    policy      that   fulfills      the

reasonable expectations of the insured with respect to the scope

of coverage."88

      ¶91    In Chas. T. Main v. Fireman's Fund Insurance Co., 551

N.E.2d 28      (Mass.        1990),     the    Supreme     Judicial        Court    of

Massachusetts addressed the effect of a notice-prejudice statute

on   an    insurance    company's       ability   to   deny    coverage     under   a

claims-made-and-reported policy for a claim reported after the

end of the policy period.             The statute, Mass. Gen. Laws ch. 175,

§ 112, stated in relevant part:

      An insurance company shall not deny insurance coverage
      to an insured because of failure of an insured to
      seasonably   notify   an  insurance  company   of   an
      occurrence, incident, claim or of a suit founded upon
      an occurrence, incident or claim, which may give rise
      to liability insured against unless the insurance
      company has been prejudiced thereby.
      ¶92    In holding this statute applicable "only to the 'as

soon as practicable' type of notice [requirement] and not to the

'within the policy year' type of reporting requirement,"89 the

court      emphasized        the    distinction    between       claims-made-and-

reported policies and occurrence policies and the purposes of

each:



      87
           Id. at 405.
      88
           Id. at 406.
      89
           Chas. T. Main, Inc., 551 N.E.2d at 30.


                                          38
                                                                   No.   2013AP500


     The purpose of a [claims-made-and-reported] policy is
     to minimize the time between the insured event and the
     payment.   For that reason, the insured event is the
     claim being made against the insured during the policy
     period and the claim being reported to the insurer
     within that same period . . . . If a claim is made
     against an insured, but the insurer does not know
     about it until years later, the primary purpose of
     insuring claims rather than occurrences is frustrated.
     Accordingly, the requirement that notice of the claim
     be given in the policy period . . . is of the essence
     in determining whether coverage exists. Prejudice for
     an untimely report in this instance is not an
     appropriate inquiry.90
     ¶93       The Supreme Judicial Court of Massachusetts concluded

that requiring an insurance company writing a claims-made-and-

reported policy to show prejudice on account of the "insured's

failure to report a claim within the policy period . . . would

defeat     the    fundamental       concept   on     which    [claims-made-and-

reported] policies are premised."91                 The court stated that it

would     be    unreasonable   to    think    the    legislature   intended    to

invalidate claims-made-and-reported policies.92

     ¶94       In Simundson v. United Coastal Insurance Co., 951 F.

Supp. 165 (D.N.D. 1997), the United States District Court for

the District of North Dakota took a similar approach with regard

to   a    common-law    notice-prejudice        rule.        According   to   the

insurance company, the claims-made-and-reported policy it had

issued to the insured did not cover the claim because it was not


     90
          Id.
     91
          Id.
     92
          Id.


                                        39
                                                                   No.     2013AP500



reported     until   roughly     two   years        after   the   policy    period

expired.     The general rule applicable to occurrence policies in

North Dakota is that insurance companies cannot refuse coverage

because of untimely notice of a claim unless the company suffers

prejudice.

    ¶95    The federal district court granted summary judgment to

the insurance company.          The federal court refused to accept the

argument     in   this     claims-made-and-reported         policy   case      that

"coverage should be available because [the insurance company]

suffered   no     actual   prejudice   from    the     delay . . . ."93        Even

though the North Dakota courts had not yet ruled on the issue,

the federal court held for the insurance company, refusing to

rewrite the basic terms of the claims-made-and-reported policy.

It stated:

    [T]o require an insurer to suffer actual prejudice
    from a tardy notice of claim before denying coverage
    under a "claims made" policy would be changing the
    very nature of the policy. . . . Such a rule would in
    effect treat a "claims made" policy as an "occurrence"
    type policy, presumably a more expensive policy that
    was not bargained for.    Therefore, this court finds
    that the North Dakota Supreme Court, if faced with the
    issue, would find in accordance with the majority of
    other courts that the actual prejudice rule does not
    apply to "claims made" insurance policies.94
    ¶96    Finally,        in    Gargano       v.      Liberty     International

Underwriters, Inc., 572 F.3d 45, 49 (1st Cir. 2009), the United

    93
       Simundson v. United Coastal Ins. Co., 951 F. Supp. 165,
167 (D. N.D. 1997).
    94
         Id. at 167.


                                       40
                                                                                     No.    2013AP500



States Court of Appeals for the First Circuit cited Chas T. Main

with approval.            The federal court of appeals stated that under

settled      Massachusetts            law,    an    "insured        event"       arises      in   the

context      of     a    claims-made-and-reported                 policy        when:      "(1)   the

claim       [is] . . . first           made    against           the    insured       during      the

policy      period,       and   (2)     the    claim       [is] . . . reported               to   the

insurer within the policy period."95                           The court "reject[ed] out

of hand Gargano's assertion that the insurance companies must

demonstrate prejudice . . . to escape liability."96                                   Rather, the

court declared that the requirement of reporting "within the

policy period 'is of the essence in determining whether coverage

exists.'"97

       ¶97     Thus,      these       courts       have    held        that    claims-made-and-

reported policies' restriction of coverage to claims both made

and reported during the policy period is enforceable despite

statutory or common-law notice-prejudice rules similar to our

own notice-prejudice statutes.

       ¶98     In       sum,    the    benefits           to     insurance       companies        and
insureds      of        claims-made-and-reported                 policies,       the       statutory

history      underlying         Wisconsin's         notice-prejudice             statutes,        the

persuasive        authority       of     other          courts    that        have   decided      the

question presented by this case, and the unreasonable results a

       95
            Gargano, 572 F.3d at 49.
       96
            Id. at 51.
       97
            Id. at 49 (quoting Chas. T. Main, Inc., 551 N.E.2d at
30).


                                                   41
                                                                            No.    2013AP500



contrary    holding       would     produce        persuade     us   that    Wisconsin's

notice-prejudice statutes permit an insurance company to deny

coverage without a showing of prejudice when an insured fails to

report a claim within a claims-made-and-reported policy period.

                                               V

      ¶99       Because    we       hold       the     notice-prejudice            statutes

inapplicable to the WILMIC insurance policy's requirement that

claims     be     reported     during      the     policy      period,     we     need    not

consider the prejudice element of the statutes.                            However, even

if we were to conclude that the notice-prejudice statutes apply

to the reporting requirement at issue, WILMIC would prevail.

      ¶100 In short, requiring an insurance company to provide

coverage for a claim reported after the end of a claims-made-

and-reported          policy    period        is   per   se       prejudicial      to     the

insurance       company    because       it    expands      the    grant    of     coverage

provided by the insurance policy.

      ¶101 Premiums            on        claims-made-and-reported                 insurance

policies        are   ordinarily      set      below     the      levels    charged      for
comparable occurrence policies based in part on the limitation

of coverage to claims reported within the policy period.                                Thus,

when a claim is not reported within the policy period, requiring

the   insurance         company     to     nevertheless        provide      coverage       is

prejudicial.98          Holding otherwise would defeat the fundamental

premise of claims-made-and-reported policies.

      98
       See DiLuglio v. New England Ins. Co., 959 F.2d 355, 359
(1st Cir. 1992); Bianco Prof. Ass'n, 740 A.2d at 1057.

                                                                                (continued)
                                              42
                                                                     No.    2013AP500



    ¶102 In    their   briefs     and    at     oral   argument,     the     parties

focused   on   the   question     of    prejudice.          WILMIC   argued       that

requiring it to provide coverage for a claim reported after the

end of the policy period would be per se prejudicial and would

negate the purpose of the claims-made-and-reported policy for

which the parties      had   bargained.          The Andersons argued             that

establishing prejudice from the fact of late reporting in the

context of claims-made-and-reported insurance would negate the

purpose of the notice-prejudice statutes.

    ¶103 As we noted previously, from the Andersons' vantage

point, they have been victimized twice: first by Attorney Aul's

malpractice    and    now    by   his        failure   to     comply       with   his

malpractice insurance policy's reporting requirement.                       We reach

a harsh result, but one we have determined the law requires.                       We


      Although the seventh circuit court of appeals held against
the insurance company, it characterized this prejudice approach
as a promising one for insurance companies (but one that was
waived in the case at hand).     Lexington Ins. Co., 165 F.3d at
1095.

     See also Chas. T. Main, Inc., 551 N.E.2d at 30 (holding
that Massachusetts's notice-prejudice statute "applies only to
the 'as soon as practicable' type of notice [requirement] and
not to the 'within the policy year' type of reporting
requirement" because requiring an insurance company to show
prejudice based on an "insured's failure to report a claim
within the policy period or a stated period thereafter would
defeat the fundamental concept on which claims-made policies are
premised"); New Appleman on Insurance § 20.01[7][b] ("In those
jurisdictions that have examined the distinction between [pure]
claims-made and claims-made-and-reported policies, the courts
have uniformly relieved the insurers from any requirement to
prove prejudice under the latter form of coverage.").


                                        43
                                                                      No.   2013AP500



conclude that the legislature did not intend to                        rewrite the

fundamental terms of the WILMIC insurance policy or to make the

strict reporting requirement underlying claims-made-and-reported

policies unenforceable in this state.

    ¶104 For       the     reasons    set    forth,       we     conclude        that

Wisconsin's     notice-prejudice      statutes      do     not   supersede        the

reporting     requirement      specific      to     claims-made-and-reported

policies.

    ¶105 Because we so conclude, we need not address whether,

under the notice-prejudice statutes, WILMIC was prejudiced by

Attorney Aul's failure to report the claim during the policy

period.     However, even if we had determined that the notice-

prejudice statutes supersede this reporting requirement, WILMIC

would   prevail.         Requiring   an    insurance      company      to   provide

coverage for a claim reported after the end of a claims-made-

and-reported     policy     period   is     per    se    prejudicial        to    the

insurance company.

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




                                      44
                                                                   No.    2013AP500.akz


      ¶106 ANNETTE KINGSLAND ZIEGLER, J.                 (concurring).         I agree

with the lead opinion's1 conclusion that Wis. Stat. §§ 631.81 and

632.26 do not apply to the "within the policy period" reporting

requirement at issue.        I am compelled to write separately to

clarify that a majority of the court concluded that the statutes

at issue are not ambiguous and that their plain meaning dictates

the outcome in this case.           The opinion of the court was to be

written to clearly state these conclusions.                    State ex rel. Kalal

v.   Circuit   Court   for   Dane    Cnty.,       2004    WI    58,   ¶¶45-46,      271

Wis. 2d 633, 681 N.W.2d 110.          I need to write because the lead

opinion writer has rejected suggested changes to the opinion

which would make these conclusions clear, and as a result, I

write to clarify the majority opinion of the court.

      ¶107 I write to clarify that although a court may consider

whether a particular interpretation of a statute would produce

an absurd or unreasonable result, a court may not balance the

policy concerns associated with the "consequences of alternative

interpretations."      I do not join the lead opinion's discussion
of   these   "consequences,"    because       I    would       engage     in   a   more

traditional    plain-meaning    analysis          to     interpret       the   notice-

prejudice statutes, Wis. Stat. §§ 631.81 and 632.26.                           I write

separately because the lead opinion does not use the phraseology

typically associated with a plain-meaning analysis, but instead


      1
       Today, three justices join this concurrence. Accordingly,
this concurrence represents the majority opinion of the court.
The opinion authored by Chief Justice Shirley S. Abrahamson is
now the lead opinion.


                                       1
                                                                            No.      2013AP500.akz


engages in this more subjective "consequences" analysis, which

is seemingly inconsistent with our jurisprudence.

      ¶108 "[S]tatutory interpretation 'begins with the language

of the statute.               If the meaning of the statute is plain, we

ordinarily stop the inquiry.'"                        Id.,    ¶45 (quoting             Seider v.

O'Connell, 2000 WI 76, ¶43, 236 Wis. 2d 211, 612 N.W.2d 659).

We    interpret          statutes        "reasonably,          to     avoid           absurd       or

unreasonable results."                Id., ¶46.        "'If this process of analysis

yields    a    plain,         clear     statutory      meaning,       then      there        is    no

ambiguity,         and     the    statute        is    applied       according          to     this

ascertainment of its meaning.'"                      Id. (quoting Bruno v. Milwaukee

Cnty., 2003 WI 28, ¶20, 260 Wis. 2d 633, 660 N.W.2d 656).                                      "'In

construing or interpreting a statute the court is not at liberty

to   disregard       the      plain,     clear       words   of     the   statute.'"              Id.

(quoting      State      v.    Pratt,     36    Wis. 2d 312,         317,       153    N.W.2d 18

(1967)).

      ¶109 "[A] statute is ambiguous if it is capable of being

understood by reasonably well-informed persons in two or more
senses."        Id., ¶47.             "[T]he test for ambiguity examines the

language      of    the       statute    'to     determine        whether       well-informed

persons       should      have     become      confused,       that       is,     whether         the

statutory . . . language                reasonably       gives       rise       to     different

meanings.'"        Id. (quoting Bruno, 260 Wis. 2d 633, ¶21) (internal

quotation marks omitted).                   Wisconsin courts ordinarily do not

consult extrinsic sources of statutory interpretation, such as

legislative        history,        unless      the    language       of    the       statute      is
ambiguous.           Id.,        ¶50.       However,         "legislative         history          is

                                                 2
                                                                         No.   2013AP500.akz


sometimes     consulted      to     confirm       or    verify       a     plain-meaning

interpretation."        Id., ¶51.       A court may also verify a plain-

meaning interpretation by consulting statutory history, that is,

prior enacted and repealed versions of the statute under review.

Cnty. of Dane v. LIRC, 2009 WI 9, ¶27, 315 Wis. 2d 293, 759

N.W.2d 571.

    ¶110 The        notice-prejudice        statutes         at    issue,      Wis.   Stat.

§§ 631.81 and 632.26, by their plain language are not ambiguous

and do not apply to the "within the policy period" reporting

requirement     at    issue.        These       statutes      expressly        prevent    an

insurer      from      "invalidat[ing]"           "a     claim"          under     certain

conditions.          Wis.   Stat.    §§ 631.81(1),            632.26(1)(b).           These

statutes do not create an initial grant of coverage.                             Lead op.,

¶¶82-84.      There is no initial grant of coverage for a claim

reported outside of the claims-made-and-reported policy period.

Lead op., ¶28.        The notice-prejudice statutes, therefore, do not

apply to such a claim.            Lead op., ¶59.2            Applying these statutes

to the reporting requirement at issue would create an initial
grant   of   coverage,      which    would       go    far    beyond      the    statutory

language     that    prevents     the   invalidation          of   existing       coverage

under     certain     conditions.           See       Shannon      v.     Shannon,       150


    2
       When the notice-prejudice statutes apply to a claim, "the
determination whether an insurer has been prejudiced by the lack
of timely notice is essentially a question of fact."     Neff v.
Pierzina, 2001 WI 95, ¶47, 245 Wis. 2d 285, 629 N.W.2d 177.
"'[W]e will uphold the trial court's factual determinations
underlying the question of prejudice unless clearly erroneous.'"
Id., ¶44 (quoting Rentmeester v. Wis. Lawyers Mut. Ins. Co., 164
Wis. 2d 1, 8-9, 473 N.W.2d 160 (Ct. App. 1991)).


                                            3
                                                                                No.    2013AP500.akz


Wis. 2d 434,       450-54,        442     N.W.2d 25           (1989)       (explaining           that

courts    may    use     estoppel       or    waiver         to    prevent       forfeiture       of

existing       coverage     but     not       to      create       an     initial        grant     of

coverage).        Accordingly, these statutes are unambiguous in the

present    case    because        reasonably           well-informed            persons       should

know     that    these     statutes          do       not     apply       to    the      reporting

requirement at issue.            See Kalal, 271 Wis. 2d 633, ¶47.

       ¶111 The    lead     opinion          analyzes        the    statutory          history     of

these statutes.          Lead op., ¶¶64-73.                 The lead opinion's analysis

should not be construed as a determination that such analysis is

necessary because of any ambiguity in the statutes.                                           To the

contrary, analysis of statutory history is part of a plain-

meaning analysis and can be used to confirm a statute's plain

meaning.        Heritage Farms, Inc. v. Markel Ins. Co., 2009 WI 27,

¶15,     316    Wis. 2d 47,        762       N.W.2d 652           (relying        on     statutory

history to confirm a statute's plain meaning); Cnty. of Dane,

315 Wis. 2d 293, ¶27 (explaining that statutory history is part

of a plain-meaning analysis).
       ¶112 After analyzing statutory history, the lead opinion

briefly    considers       legislative             history——specifically,                 comments

made by Wisconsin Legislative Council's Insurance Laws Revision

Committee.         Lead    op.,        ¶¶74-76.             Because       the     statutes        are

unambiguous,       the    opinion's          reason         for    consulting          legislative

history    also    must     be    to     confirm        the       plain    meaning       of    these

statutes.         See     Kalal,       271    Wis. 2d 633,              ¶51     ("[L]egislative

history is sometimes consulted to confirm or verify a plain-
meaning interpretation."); Manitowoc Cnty.                            v. Samuel J.H., 2013

                                                  4
                                                                    No.    2013AP500.akz


WI     68,    ¶27,     349   Wis. 2d 202,        833     N.W.2d 109       (relying      on

legislative history to confirm plain meaning).

       ¶113 I        also      briefly      discuss       the      lead      opinion's

consideration of "consequences of alternative interpretations."

Lead op., ¶¶79-84.           I do not join the lead opinion's analysis of

these "consequences."           The lead opinion states that our holding

might harm the Andersons by depriving them of insurance proceeds

from     Wisconsin      Lawyers    Mutual        Insurance      Company     and    might

encourage insurers to add "within the policy period" reporting

requirements to more policies.                   Lead op., ¶¶80-81.          The lead

opinion then weighs those concerns against the consequences of a

contrary       holding:      transforming        all     claims-made-and-reported

policies into pure claims-made policies and creating an initial

grant    of    coverage      for   which    an    insurer    did    not     receive      a

premium.        Lead    op.,    ¶¶82,    84.       The   lead    opinion     correctly

concludes      that    applying    the     notice-prejudice        statutes       to    the

reporting requirement at issue "would be unreasonable."                                Lead

op., ¶84.       See Chas. T. Main, Inc. v. Fireman's Fund Ins. Co.,
551 N.E.2d 28, 30 (Mass. 1990) ("A requirement that an insurer

on a [claims-made-and-reported] policy must show that it was

prejudiced by its insured's failure to report a claim within the

policy       period . . . would      defeat       the    fundamental       concept      on

which    [claims-made-and-reported]              policies    are   premised.            The

likely result would be that [claims-made-and-reported] policies,

which offer substantial benefits to purchasers of insurance as

well as insurance companies, would vanish from the scene.                                It
would be unreasonable to think that the Legislature intended

                                            5
                                                                  No.   2013AP500.akz


such    a    result.").       However,   the     lead   opinion's       analysis   of

"consequences" is not in step with a more traditional plain-

meaning analysis.         As a result, I depart from the lead opinion

so as to avoid confusion.

       ¶114 While courts interpret statutes "to avoid absurd or

unreasonable results," Kalal, 271 Wis. 2d 633, ¶46, it is not

the role of the court to weigh the "consequences of alternative

interpretations."         A court may consider the consequences of a

particular interpretation of a statute to determine whether that

interpretation would produce an absurd or unreasonable result.

Here, however, the lead opinion goes beyond the avoidance of

absurd or unreasonable results by weighing the "consequences of

alternative interpretations" so to inject a subjective component

into    an    otherwise    objective      analysis.        See    Force     ex   rel.

Welcenbach v. Am. Family Mut. Ins. Co., 2014 WI 82, ¶165, 356

Wis. 2d 582,      850     N.W.2d 866     (Ziegler,      J.,    dissenting)       ("An

unpalatable result is not the same as an absurd result.                      We are

to look to the text of the statute to determine whether relief
is afforded to the litigants.").                 I could agree with the lead

opinion's analysis in paragraphs 82 and 84 only to the extent

that it confirms the notice-prejudice statutes' plain meaning by

considering      the    unreasonable     results    that   a     contrary    holding

would    produce.       See    Samuel    J.H.,    349   Wis. 2d 202,       ¶¶24,   26

(confirming plain-meaning interpretation by determining that a

contrary interpretation would produce an absurd or unreasonable

result).



                                          6
                                                                         No.      2013AP500.akz


       ¶115 To     be      clear,       courts         should     not        consider      the

"consequences of alternative interpretations" when interpreting

a statute.       Doing so goes beyond the avoidance of unreasonable

or absurd results.             See Force, 356 Wis. 2d 582, ¶165 (Ziegler,

J.,     dissenting).                The     "consequences               of        alternative

interpretations"          language        was         created     by     Chief        Justice

Shirley S. Abrahamson's opinion in State v. Hayes, 2004 WI 80,

¶16, 273 Wis. 2d 1, 681 N.W.2d 203.                         See Hayes, 273 Wis. 2d 1,

¶112 (Sykes, J., concurring) (explaining that consideration of

consequences       of    alternative       interpretations             "is     new    to   our

statutory interpretation jurisprudence, and the majority cites

no     authority        for     it").               This     approach        to     statutory

interpretation is problematic because it involves "a judicial

policy judgment based upon a weighing and balancing of competing

'purposes    and        consequences'       of        alternative       interpretations.

This    leaves     room       for   the    substitution           of    the       judiciary's

subjective    policy          choices     for       those    of   the    legislature,        a

phenomenon       that     a     text-based,            plain-meaning          approach      to
statutory interpretation seeks to guard against."                                 Id. (Sykes,

J., concurring).          I agree that the lead opinion's analysis in

this regard is problematic.

       ¶116 Although I reject the lead opinion's consideration of

"consequences of alternative interpretations," I agree with the

lead opinion's conclusion that the notice-prejudice statutes, by

their plain meaning, do not apply to the reporting requirement

at issue.        I also agree with the lead opinion's conclusion,
consistent with that plain meaning, that applying these statutes

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to the reporting requirement at issue would produce unreasonable

results.   I join that conclusion only to the extent that it can

be construed as engaging in a plain-meaning analysis of these

unambiguous statutes.    This writing is intended make clear the

majority opinion of the court.

    ¶117 For the foregoing reasons, I respectfully concur.

    ¶118 I   am   authorized   to   state   that   Justices   N.   PATRICK

CROOKS, PATIENCE DRAKE ROGGENSACK, and MICHAEL J. GABLEMAN join

this concurrence.




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