                                                             2018 WI 62

                  SUPREME COURT             OF   WISCONSIN
CASE NO.:               2016AP1608
COMPLETE TITLE:         Richard Forshee, Judith Timmerman, Verlan E.
                        Edwards, Robert R. Olson, Mary L. Edwards on
                        behalf of Verlan & Mary Edwards LLP and Jean
                        Forshee, Janet A. Olson,
                                   Plaintiffs-Respondents-Petitioners,
                             v.
                        Lee Neuschwander and Mary Jo Neuschwander,
                                   Defendants-Appellants.

                            REVIEW OF DECISION OF THE COURT OF APPEALS
                           Reported at 377 Wis. 2d 162, 900 N.W.2d 100
                                PDC No: 2017 WI App 43 - Published

OPINION FILED:          June 5, 2018
SUBMITTED ON BRIEFS:
ORAL ARGUMENT:          February 23, 2018

SOURCE OF APPEAL:
   COURT:               Circuit
   COUNTY:              Sawyer
   JUDGE:               John M. Yackel

JUSTICES:
   CONCURRED:           ABRAHAMSON, J. concurs (Opinion filed).
                        KELLY, J. concurs (joining majority except to
                        the extent it is inconsistent with this
                        concurrence), joined by BRADLEY, R. G., J.
                        (Opinion filed).
  DISSENTED:            BRADLEY, A. W., J. dissents (Opinion filed).
  NOT PARTICIPATING:

ATTORNEYS:


       For        the   plaintiffs-respondents-petitioners,     there     were
briefs filed by Linda I. Coleman, John R. Carlson, and Spears,
Carlson, & Coleman, S.C., Washburn.              There was an oral argument
by Linda I. Coleman.


       For the defendants-appellants, there was a brief filed by
Anne     Berleman       Kearney,   Joseph   D.    Kearney,   and   Appellate
Consulting Group, Milwaukee.   There was an oral argument by Anne
Berleman Kearney.


    An amicus curiae brief was filed on behalf of the Wisconsin
REALTORS Association by Cori Moore Lamont and Wisconsin REALTORS
Association, Madison.




                                2
                                                                                2018 WI 62
                                                                      NOTICE
                                                      This opinion is subject to further
                                                      editing and modification.   The final
                                                      version will appear in the bound
                                                      volume of the official reports.
No.    2016AP1608
(L.C. No.    2016CV4)

STATE OF WISCONSIN                                :            IN SUPREME COURT

Richard Forshee, Judith Timmerman, Verlan E.
Edwards, Robert R. Olson, Mary L. Edwards on
behalf of Verlan & Mary Edwards LLP and
Jean Forshee, Janet A. Olson,                                              FILED
             Plaintiffs-Respondents-Petitioners,
                                                                      JUN 5, 2018
      v.
                                                                       Sheila T. Reiff
                                                                    Clerk of Supreme Court
Lee Neuschwander and Mary Jo Neuschwander,

             Defendants-Appellants.




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



      ¶1     PATIENCE      DRAKE    ROGGENSACK,       C.J.      Lee       and    Mary   Jo

Neuschwander      purchased       property   on   Hayward       Lake       in    Hayward,

Wisconsin.      They renovated the large house and began renting it

to vacationers on both short-term and long-term bases.                            Several

neighboring property owners (the "Neighbors") objected to the

use of the property as a vacation rental.                    They brought suit in

Sawyer      County      Circuit    Court,    claiming        that     a    restrictive

covenant that encumbers all lots in the subdivision of which
                                                                  No.    2016AP1608



Neuschwanders' property is a part, precludes short-term rentals

of property.1

     ¶2     The Sawyer County Circuit Court held in favor of the

Neighbors    and    enjoined      Neuschwanders     from    further     short-term

rentals,    except   for    the    Birkebeiner      weekend.2     The    court    of

appeals reversed.        Forshee v. Neuschwander, 2017 WI App 43, 377

Wis. 2d    162,    900   N.W.2d 100.         The   Neighbors     petitioned      for

review, which we granted.

     ¶3     We    review   a    single   issue:       Whether    the    short-term

rental of the Neuschwanders' property constitutes "commercial

activity" under the restrictive covenant that encumbers their

property.        We conclude that the term, "commercial activity,"

which is undefined in the covenant, is ambiguous.                 Therefore, we

narrowly interpret it and conclude that it does not preclude

either     short-term      or     long-term    rentals      of   Neuschwanders'

property.     Accordingly, we affirm the decision of the court of

appeals.

                                  I.   BACKGROUND
     ¶4     The    Neuschwanders'        property     was   purchased     by     the

Louisiana Pacific Corporation in 1984 and 1985.                  It consists of

two lots of a 15-lot subdivision that was originally owned by




     1
       No objection was made to long-term rentals of the
Neuschwanders' property.   Although what would be characterized
as long-term rentals is not apparent from the record before us.
     2
         The Honorable John M. Yackel of Sawyer County presided.


                                         2
                                                                              No.    2016AP1608



four       individuals.           All    lots       in     the    subdivision       have       been

encumbered by a restrictive covenant that provides:

               1.    No dwelling can be erected on said property
                     with a living space of less than 1,000 square
                     feet.

               2.    There    shall       be     no      subdivision    of    existing
                     lots.

               3.    There shall be no commercial activity allowed
                     on any of said lots.
       ¶5      Louisiana          Pacific      built       the     first     house    in       the

subdivision.         It is a large building that Louisiana Pacific used

to   provide        short    stays      to     clients,      vendors,      politicians          and

employees.          The house was used for everything from single-night

events to month-long stays, as well as serving as a corporate

social center.

       ¶6      In    2014,    the       Neuschwanders        bought     the   property          and

expended      a     substantial         amount      of    money    renovating       the    large

house.       While the Neuschwanders used the property themselves on

occasion, the primary use has been the rental of the property to

vacationers on both short-term and long-term bases through the

website VRBO (Vacation Rental By Owner).3

       ¶7      Neuschwanders' property consists of two lots equaling

2.2 acres and a large house.                     It is located on a peninsula in

Lake       Hayward    in     the       City    of     Hayward,       Wisconsin.           It     is

accessible via a narrow, private road that Louisiana Pacific

built.         There        are    a     number       of     other     residents      in       the

       3
           Vacation Rental By Owner, https://www.vrbo.com.


                                                 3
                                                                   No.    2016AP1608



subdivision, several of whom filed this action.                   Each of their

homes was built after Louisiana Pacific's construction of the

now-Neuschwander house.

      ¶8     The Neuschwanders' house is large, about 4,000 square

feet, and able to sleep up to 15 people.                      When renting the

property, the occupants treat the house in the same way that an

owner   would:    They       sleep,   cook,    eat,   and    recreate     in   their

preferred    manner.     During       the    course   of    renters'     stays   the

Neuschwanders    do    not    provide    any    services     to   renters.       For

example, there is no maid or room service of any type.

      ¶9     The Neighbors' complaint alleged that the restrictive

covenant that proscribes "commercial activity" was violated by

short-term    rentals    of    the    property.       They   sought      injunctive

relief to prevent the Neuschwanders from "further violating the

restrictions placed upon [their property]."                  Upon the parties'

competing motions for summary judgment, the circuit court agreed

with the Neighbors and concluded that short-term rentals of the

Neuschwanders' property violated the restrictive covenant.
      ¶10    The circuit court explained that the unstated "purpose

of the restrictive covenant was to ensure and maintain a quiet

neighborhood where people would know their neighbors," and that

the   Neuschwanders'     short-term         rentals   violated    that     purpose.

The circuit court enjoined the Neuschwanders from using their




                                         4
                                                                         No.    2016AP1608



property        for    short-term        rentals     except     for    the   Birkebeiner
            4
weekend.         The Neuschwanders appealed.

      ¶11       On     appeal,         the   Neuschwanders        alleged      that    the

restrictive covenant is ambiguous and that the circuit court

improperly           considered        extrinsic    evidence      in   coming    to    its

conclusion.           In a published opinion,5 the court of appeals agreed

with the Neuschwanders, concluding that the restrictive covenant

is   ambiguous         and    that      it   did    not   bar    short-term      rentals.

Accordingly, the court of appeals reversed the circuit court's

summary judgment and lifted the injunction on the Neuschwanders'

use of their property.

      ¶12       The Neighbors sought review of the court of appeals'

decision,        which       we    granted.         For    the     reasons      explained

hereafter, we affirm the court of appeals.

                                       II.   DISCUSSION

                                  A.    Standard of Review

      ¶13       We independently review a grant or denial of summary

judgment by applying the same standards used in the circuit
court     and    the     court     of    appeals,    while      benefitting     from   the

discussions of both courts.                  Sands v. Menard, 2017 WI 110, ¶28,

379 Wis. 2d 1, 904 N.W.2d 789; Dufour v. Progressive Classic

Ins. Co., 2016 WI 59, ¶12, 370 Wis. 2d 313, 881 N.W.2d 678.

      4
       The circuit court did not explain why the Birkebeiner
weekend was excluded from what it held was proscribed by the
restrictive covenant.
      5
       Forshee v. Neuschwander, 2017 WI App 43, 377 Wis. 2d 162,
900 N.W.2d 100.


                                               5
                                                                     No.     2016AP1608



Summary judgment is appropriate where there is no genuine issue

of material fact and the movant has established the right to

judgment as a matter of law.                 Wis. Stat. § 802.08(2) (2015–16);6

Sands, 379 Wis. 2d 1, ¶28.

     ¶14    Interpretation of a restrictive covenant is a question

of law that we review independently of prior court decisions.

Zinda v. Krause, 191 Wis. 2d 154, 165, 528 N.W.2d 55 (Ct. App.

1995).     Whether the language employed in a restrictive covenant

is ambiguous is also a question of law that we independently

decide.    Id.

                            B.     Restrictive Covenants

                              1.    General principles

     ¶15    Covenants come in various forms, and are characterized

by the nature of the burden or benefit imposed.                        Restatement

(Third) of Property: Servitudes § 1.3(3) cmt. e. (Am. Law Inst.

2000).     A covenant becomes a servitude on the land if either its

burden or its benefit runs with the land.                         Id. cmt. a.       "A

restrictive        covenant        is    a   negative    covenant     that     limits
permissible uses of land."               Id. § 1.3(3).

     ¶16    Public policy of the State of Wisconsin "favors the

free and unrestricted use of property."                    Crowley v. Knapp, 94

Wis. 2d     421,     434,     288       N.W.2d    815   (1980).      "Accordingly,

restrictions contained in deeds and in zoning ordinances must be

strictly    construed        to     favor     unencumbered    and    free     use   of

     6
       All subsequent references to the Wisconsin Statutes are to
the 2015-16 version unless otherwise indicated.


                                              6
                                                                         No.     2016AP1608



property."          Id. (citing McKinnon v. Benedict, 38 Wis. 2d 607,

619,     157    N.W.2d     665     (1968)        (further     citations        omitted)).

Consequently, in order to be enforceable, deed restrictions that

limit the free use of property "must be expressed in clear,

unambiguous, and peremptory terms."                 Id. at 435.

       ¶17     In     resolving        contests     about     the       meaning       of     a

restrictive covenant in a deed, we do not look for amorphous

general intent, but rather, we determine the meaning of the

restriction          by   the    words     actually       used.          Id.     at    438.

Construction of a covenant is necessary when the covenant is

ambiguous.          Id. at 434 (citing Bollenbeck v. Vill. of Shorewood

Hills, 237 Wis. 501, 297 N.W.568 (1941)); see also Peterson v.

Gales, 191 Wis. 137, 139-40, 210 N.W. 407 (1926) (construing

"house" as an ambiguous term such that the restrictive covenant

did not prohibit the use of the property as a machine shop).                                If

the words employed in the restrictive covenant are ambiguous, we

resolve disputes about the meaning of the restriction in favor

of the free use of the property.                  Crowley, 94 Wis. 2d at 438 n.3
(citing Schneider v. Eckhoff, 188 Wis. 550, 556, 206 N.W. 838

(1926)       (providing     that       because     "the     language     used     in       the

restriction is doubtful in meaning . . . all doubt, under the

general rule, should be resolved in favor of the free use [of

land]")).

       ¶18     On the other hand, if the meaning of a restrictive

covenant       clearly    can     be    ascertained       from    the    words    of       the

covenant itself, its restrictions will be enforced.                            See Zinda,
191 Wis. 2d at 166; see also Voyager Vill. Prop. Owners Ass'n v.
                                            7
                                                                          No.     2016AP1608



Johnson, 97 Wis. 2d 747, 749, 295 N.W.2d 14 (Ct. App. 1980)

(concluding that "camping equipment" clearly included camping

trailers).

                       2.    The restrictive covenant

       ¶19   Currently,      individuals           who     rent     and        occupy   the

Neuschwanders' residence on both short-term and long-term bases

use the property in a manner similar to how an owner uses his or

her own house.        They buy their own food, cook their own meals,

make   their    own   beds     and    recreate       as     the     house's       location

provides, just as a property owner would.

       ¶20   As we consider those uses, we review a restrictive

covenant     that   declares    that     "[t]here        shall     be     no    commercial

activity allowed on any of said lots."                       The key term in the

covenant, as focused on by the parties in their briefs and at

oral argument, is "commercial activity."                    Therefore, we examine

whether this term precludes short-term rentals of Neuschwanders'

property.

       ¶21   We consider the term, "commercial activity," not in
isolation, but in the context of the deed's restrictions as a

whole.       Zinda,    191     Wis. 2d        at    166.          However,       reviewing

"commercial activity" in the context of the two other provisions

of the restrictive covenant at issue here does not add clarity

to the term we must interpret.                We can see that the covenanters

clearly required dwellings to have a minimum size and that lots

could not be subdivided.             However, those two provisions provide

no guidance as to what was meant by the "commercial activity"
that the covenant precludes.            "Commercial activity" is simply an
                                          8
                                                                         No.    2016AP1608



undefined term, whether read separately or in the context of the

complete covenant.

       ¶22    It    could   be   that   the     drafters      were   attempting            to

prevent a lot from being used as a lakefront restaurant or a

filling      station     for   boats.      On    the     other    hand,        perhaps      a

homeowner could maintain a daycare for preschool children in his

or her home without running afoul of the commercial activity

proscription.           Because we are unable to clearly discern the

restrictive        covenant's    meaning       through      the   text    of    covenant

itself, we conclude that it is ambiguous.                     Id. at 165-66 ("The

language      in    a   restrictive     covenant       is    ambiguous         if    it    is

susceptible to more than one reasonable interpretation.").

       ¶23    When we determine the ordinary meaning of undefined

words, a dictionary often is helpful to our construction.                                 Xcel

Energy Servs. v. LIRC, 2013 WI 64, ¶30, 349 Wis. 2d 234, 833

N.W.2d 665 (quoting Cty. of Dane v. LIRC, 2009 WI 9, ¶23, 315

Wis. 2d 293, 759 N.W.2d 571).                  We do so here as we construe

"commercial activity" with the aid of its dictionary definition.
       ¶24    Webster's Dictionary defines "commercial" as "engaged

in work designed for the market," "of or relating to commerce,"

or    "characteristic       of   commerce."        Commercial,       Webster's            New

Collegiate Dictionary 226 (1974 ed.).                  "Commerce," then, refers

to "the exchange or buying and selling of commodities on a large

scale involving transportation from place to place."                            Commerce,

id.

       ¶25    These     dictionary    definitions        posit    that     "commercial
activity" includes some form of buying and selling.                                 However,
                                           9
                                                                      No.    2016AP1608



the dictionary definition is very nonspecific.                    One could read

these definitions to mean that "commercial activity" is limited

to products bought or sold and subsequently moved to another

location, thereby excluding purchases and sales that result in

consumption or use of the purchased item or service in a single

place.    However, what we take away from our review of dictionary

definitions   is   that    in    the   context       of   the   entirety       of   the

restrictive covenant on the Neuschwanders' property, we cannot

clearly decipher the meaning of "commercial activity."

    ¶26     Case law requires that in order to be enforceable,

deed restrictions "must be expressed in clear, unambiguous, and

peremptory terms."     Crowley, 94 Wis. 2d at 435.                However, we are

unable to determine precisely what the words in this covenant

preclude.     Stated otherwise, the covenant presents no "clear,

unambiguous, and peremptory terms" to follow.                   Id.    Accordingly,

because this restrictive covenant is ambiguous, we must resolve

the contest before us in favor of the property owners' ability

to use their property freely.          Id. at 438 n.3.
    ¶27     Furthermore,        support        for   interpreting       "commercial

activity" narrowly as not precluding use of the property for

short-term rentals is provided by the way in which the first

homeowner   in   the   subdivision,        Louisiana      Pacific,      interpreted

"commercial activity" as it used the same property.                         The record

establishes that since Louisiana Pacific's construction of the

house in the mid-1980s and throughout its ownership, the house




                                          10
                                                                  No.    2016AP1608



was used by individuals who were not the owners,7 for both short-

term and long-term stays.            Under Louisiana Pacific's ownership,

guests would arrive at the house and leave anywhere from hours

later to a full month later.             Therefore, because of Louisiana

Pacific's corporate status and because of its use of the house,

Louisiana Pacific's ownership did not further the purpose of

"ensuring a quiet neighborhood where people would know their

neighbors," which the circuit court concluded the restrictive

covenant     was    enacted     to    provide.         And    finally,    if   the

encumbrance actually were placed on the property to proscribe

short-term stays, as the original owner of the property who

would   have       been    well-aware    of     the    restrictive       covenant,

Louisiana Pacific would not have built and maintained the house

as it did.

    ¶28     Because       we   cannot   specify       the    precise    activities

included     in     the    definition    of     "commercial      activity,"     we

interpret    the    covenant    narrowly      and   conclude    that    short-term

rentals are not prohibited.             Therefore, the Neuschwanders are
not precluded from         renting their property for short or long

periods of time.          Accordingly, we affirm the court of appeals

decision voiding the injunction issued by the circuit court.




    7
       It is worth reiterating that Louisiana Pacific is a
corporation whose business operations includes buying products
from suppliers and selling products to vendors and consumers,
and that both suppliers and vendors were entertained at the
property during Louisiana Pacific's ownership.


                                        11
                                                                No.     2016AP1608



                              III.   CONCLUSION

    ¶29     Upon our review, we consider a single issue:                    Whether

the short-term rental of the Neuschwanders' property constitutes

"commercial     activity"    under   the        restrictive    covenant       that

encumbers     their   property.       We        conclude   that       the    term,

"commercial activity," which is undefined in the covenant, is

ambiguous.      Therefore, we narrowly interpret it and conclude

that it does not preclude either short-term or long-term rentals

of Neuschwanders' property.       Accordingly, we affirm the decision

of the court of appeals.



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

affirmed.




                                     12
                                                                           No.    2016AP1608.ssa


       ¶30       SHIRLEY S. ABRAHAMSON, J.                   (concurring).              The lead

opinion1 reaches the right conclusion for the wrong reasons.                                   The

decision of the court of appeals should be affirmed, but not

because         "commercial      activity"        is    an   ambiguous          term    that    is

construed        in    favor     of   the    free      and   unencumbered         use     of   the

property.

       ¶31       Instead, the decision of the court of appeals should

be   affirmed          because    the       Neuschwanders          did    not    violate        the

unambiguous language of the deed restriction.

       ¶32       Because the lead opinion incorrectly concludes that

the term "commercial activity" is ambiguous, it fails to address

many       of    the       parties'       substantive        arguments      regarding          the

application           of   the   restrictive          covenant      to    the    activity       in

question, namely, the short-term renting of the Neuschwanders'

property.

       ¶33       Accordingly,         I   write       separately     to    set     forth       the

correct legal analysis that should have been relied upon by the

lead opinion in deciding the instant case.
                                                  I

       ¶34       The lead opinion erroneously concludes that the term

"commercial activity" is ambiguous.                      It is not.

       ¶35       A restrictive covenant is ambiguous if its language is

reasonably susceptible to more than one interpretation.                                       Zinda

v.   Krause,       191      Wis. 2d 154,         165-66,     528    N.W.2d 55          (Ct.    App.

1995).          "[I]f      the   intent     of    a    restrictive        covenant       can    be


       1
           See ¶76 n.1, infra (Ann Walsh Bradley, J., dissenting).


                                                  1
                                                                       No.    2016AP1608.ssa


clearly ascertained from the covenant itself, the restrictions

will be enforced."            Zinda, 191 Wis. 2d at 166.                 "Intent" does

not mean "the subjective intent of the drafter," but rather, it

refers to "the scope and purpose of the covenant as manifest by

the language used."           Zinda, 191 Wis. 2d at 166.                     "'[W]here the

language used is clear and unambiguous[,] it will be given its

obvious meaning.'"         Bubolz v. Dane Cty., 159 Wis. 2d 284, 294,

464   N.W.2d 67        (Ct.        App.     1990)     (quoted       source       omitted).

Importantly, language is not rendered ambiguous simply because

it may be difficult to apply to the facts of a particular case.

Stuart v. Weisflog's Showroom Gallery, Inc., 2008 WI 86, ¶20,

311 Wis. 2d 492, 753 N.W.2d 448.

      ¶36   The restrictive covenant in the instant case reads as

follows:    "There shall be no commercial activity allowed on any

of said lots."

      ¶37   The    term        "commercial            activity"        is       reasonably

susceptible       to      only        one        interpretation,         namely,        the

interpretation attributed to it by both the circuit court and
court of appeals.         The term "commercial activity" refers to an

activity undertaken with the intent to profit.                          See Forshee v.

Neuschwander,      2017       WI     App     43,      ¶6,    377     Wis. 2d 162,       900

N.W.2d 100 (stating that the circuit court defined "commercial"

as "viewed with regard to profit"); Forshee, 377 Wis. 2d 162,

¶11 (using a dictionary to define "commercial activity" to mean

"activity   of    buying      and     selling,        or    activity    by     which   [the

Neuschwanders]     make       or    intend       to   make    a    profit");     see   also
Black's Law Dictionary 41 (10th ed. 2014) (defining "commercial

                                             2
                                                       No.   2016AP1608.ssa


activity"   as   "[a]n   activity,   such   as   operating   a   business,

conducted to make a profit").

    ¶38     The term "commercial activity," although breathtaking

in scope,2 does not appear to be reasonably susceptible to more

    2
       Indeed, the restrictive covenant may be so broad that it
is unenforceable.

     Although the drafters of the restrictive covenant may have
intended only to prohibit brick-and-mortar businesses and the
nuisances that come with them (e.g., incessant noise and
traffic), the language they used in the covenant is not limited
to a prohibition on brick-and-mortar businesses.

     It is easy to imagine many unobtrusive activities that
could have been conducted on the property in 1982 with the
intent to make a profit that would have been prohibited under a
literal application of the restrictive covenant.    For example,
could an attorney work on a case from home and bill for the
time?   Could an architect work on a design at home?    Could an
artist produce a work of art at home and mail it to the buyer?
These and many other "commercial activities" might be prohibited
under the expansive language of the restrictive covenant, even
though these activities would have had no effect on neighboring
property owners.

     Has a restrictive covenant that was broad when it was
written in 1982 become practically boundless with the passage of
time and the development of technology?      The advent of the
internet has vastly expanded the universe of activities that can
be conducted in one's home for profit. Can online entertainers
create content from home and upload that content to sites like
YouTube?   Can an author write an article and upload it to an
online publication from home?     Can an investor trade stock
online from home?   Can a person sell belongings on sites like
Craigslist from home?

     One might reasonably question whether putting the property
up for sale and showing it to potential buyers would be
prohibited under a literal application of the restrictive
covenant's plain language.    However, if the language of the
restriction is unambiguous, the language controls.    Tufail v.
Midwest Hospitality, LLC, 2013 WI 62, ¶¶25-26, 348 Wis. 2d 631,
833 N.W.2d 586.


                                     3
                                                           No.   2016AP1608.ssa


than one interpretation.         Notably, the lead opinion does not

posit a second reasonable interpretation.                Instead, the lead

opinion confuses ambiguous language with unambiguous language

that is difficult to apply to the facts of the instant case.3

     ¶39   Because the language of the restrictive covenant is

reasonably susceptible to only one meaning, I now apply that

unambiguous language to the facts of the instant case.

                                    II

                                     A

     ¶40   First,      it   must     be      determined         whether    the

Neuschwanders'      short-term     rentals     qualify     as     "commercial

activity."       The   short-term    rentals     constitute       "commercial

activity" if the Neuschwanders engaged in the short-term rentals

for the purpose of making a profit.

     ¶41   The conclusion that the short-term rentals qualify as

"commercial activity" is unavoidable.           As the court of appeals

observed, "it is undisputed that the Neuschwanders make money,

and intend to make money, and by inference a profit, by renting
their property to others on a short-term basis."

     ¶42   Second, in order for the "commercial activity" to be

prohibited by the restrictive covenant, it must be determined




     3
       See Stuart v. Weisflog's Showroom Gallery, Inc., 2008 WI
86, ¶20, 311 Wis. 2d 492, 753 N.W.2d 448 ("An otherwise
unambiguous provision is not rendered ambiguous solely because
it is difficult to apply the provision to the facts of a
particular case.").


                                     4
                                                                   No.   2016AP1608.ssa


that       the     "commercial    activity"       is     taking    place   "on"      the

property.4

       ¶43       In the instant case, there is no "commercial activity"

taking place on the Neuschwanders' property.                      The Neuschwanders

are correct that, as a factual matter, the only activity that

occurs      on     the     property    is   residential,     not     commercial,      in

nature.

       ¶44       The Neighbors' reliance on the federal district court

decision Gibbs v. Williams is misplaced.5                  The court in Gibbs was

tasked with interpreting language that is materially different

than the language at issue in the instant case.

       ¶45       In Gibbs, the court interpreted a restrictive covenant

that stated that the subject property "shall not at any time be

used        for      the     purpose        of    any . . . business          of     any

description . . . ."            Gibbs v. Williams, No. 14-cv-420-jdp, 2015

WL 5440628, at *1 (W.D. Wis. Sept. 14, 2015) (emphasis added).

       ¶46       If the property at issue in the instant case were

subject to the language of the restrictive covenant discussed in
Gibbs,       the     Neuschwanders'         short-term     rentals    would        likely

violate the restrictive covenant.                  The Neuschwanders' property

is being used for commercial activity in that the temporary use




       4
       There is no reasonable basis for concluding that "on," in
the context of the restrictive covenant, means anything other
than physically on the property.
       5
       Gibbs v. Williams, No. 14-cv-420-jdp, 2015 WL 5440628, at
*1 (W.D. Wis. Sept. 14, 2015).


                                              5
                                                                        No.    2016AP1608.ssa


and enjoyment of the property is the "thing" being bought and

sold.

     ¶47    However, the restrictive covenant in the instant case

is interested in the nature of the specific activities that

occur on the property.            In the instant case, the Neuschwanders'

activity involves the property, but it is not conducted on the

property.      To    conclude       otherwise         would   be    to        impermissibly

rewrite the language of the restrictive covenant.6

                                               B

     ¶48    The Neighbors cannot rewrite the unambiguous language

of the restrictive covenant so that it focuses on the use of the

property as opposed to focusing on the nature of the activities

that occur on the property.

     ¶49    However,        to    the        extent   the     restrictive          covenant

directs the court to focus on the use of the property, Wisconsin

courts focus on how the property is used by the occupants rather

than how the property is used by the owners.

     ¶50    The     court    of   appeals'         decisions       in    State     ex    rel.
Harding v. Door County Board of Adjustment7 and Heef Realty &

Investments,      LLP   v.   City       of    Cedarburg     Board       of    Appeals8   are


     6
       Columbia Propane, L.P. v. Wis. Gas Co., 2003 WI 38, ¶12,
261 Wis. 2d 70, 661 N.W.2d 776 (courts cannot insert into a
contract what has been omitted, nor can they rewrite a contract
made by the parties).
     7
       State ex rel. Harding v. Door Cty. Bd. of Adjustment, 125
Wis. 2d 269, 371 N.W.2d 403 (Ct. App. 1985).
     8
       Heef Realty & Invs., LLP v. City of Cedarburg Bd. of
Appeals, 2015 WI App 23, 361 Wis. 2d 185, 861 N.W.2d 797.


                                               6
                                                              No.   2016AP1608.ssa


instructive, even though they involve zoning ordinances rather

than restrictive covenants.

      ¶51     In Harding, a property owner sought a building permit

that would allow him to build a time-share property owned by 13

families, each of which would have rights to occupy the property

for four weeks per year.            Harding, 125 Wis. 2d at 270.              The

Board claimed that this proposed use would violate a zoning code

ordinance that restricts the use of the property to single-

family dwellings.        Harding, 125 Wis. 2d at 270.

      ¶52     The court of appeals held that the ordinance did not

unambiguously prohibit the property's use as a time-share.                       In

so holding, the court focused on how the time-share would be

used by its occupants (i.e., residential use) rather than how

the property was being used           by the owners        (i.e., commercial

use):

      The building's purpose is to provide living quarters
      for a family. The proposed building's floor plan has
      a kitchen, dining room, and living room in addition to
      four bedrooms.      The building would be occupied
      exclusively by one family.      Although a different
      family would occupy the building each week, that one
      family would occupy the building to the exclusion of
      the other twelve families.
Harding, 125 Wis. 2d at 271.

      ¶53     In Heef Realty, the owners of two homes initiated a

lawsuit when the Board told them that they could not use their

homes for short-term rentals.         Heef Realty, 361 Wis. 2d 185, ¶2.

The   Board    claimed    that   because    the   homes   were   located    in   a

"single-family     residential      zone"    that   permits      only   "single-



                                       7
                                                            No.   2016AP1608.ssa


family dwellings," short-term rentals were not allowed.                    Heef

Realty, 361 Wis. 2d 185, ¶5.

     ¶54    The court of appeals held that the zoning ordinance

did not prohibit short-term rentals of the homes at issue.                   In

so holding, the court of appeals relied heavily on                     Harding,

noting that "the cases are essentially the same."                 Heef Realty,

361 Wis. 2d 185, ¶10.          Like in Harding, the court of appeals

focused    on   how   the   property   would   be   used   by   its   occupants

rather than focusing on the commercial nature of the owners'

short-term rentals:

     The properties here are designed for use by one
     family, just like the property in Harding.        The
     Ordinance here permits single-family dwellings in a
     single-family residential zone, just like in Harding.
     And, just like in Harding, only one family will use
     each home at a time.
Heef Realty, 361 Wis. 2d 185, ¶10.9

     ¶55    The court of appeals in both Harding and Heef Realty

could not have reached the same conclusions if it had focused on

how the property was being used by its owners instead of how the

property was being used by its occupants.              The property owners

in both cases were using the properties for commercial purposes

(i.e.,     renting     for     profit),    not      residential       purposes.


     9
       The court of appeals also noted "that the home [in
Harding] was designed with a kitchen, dining room, living room,
and four bedrooms.   This focus on the daily living connotation
of   'residential'  gibes   [sic]   with  the   circuit court's
explanation that what makes a home a residence is its use 'to
sleep, eat, shower, relax, things of that nature.'" Heef Realty
& Invs., LLP v. City of Cedarburg Bd. of Appeals, 2015 WI App
23, ¶12, 361 Wis. 2d 185, 861 N.W.2d 797.


                                       8
                                                                      No.   2016AP1608.ssa


Nonetheless, because the occupants were using the properties for

residential purposes, the court of appeals in Harding and Heef

Realty both concluded that the ordinances at issue were not

violated by the property owners' commercial use of the property

for short-term rentals.

      ¶56    The court of appeals decision in Bubolz v. Dane County

is also instructive, even though it does not involve short-term

rentals.10

      ¶57    In     Bubolz,         the     property-owning          defendants        were

operating an electrical contracting business out of their home.

Bubolz, 159 Wis. 2d at 291.                 The property on which their home

was located was subject to a deed restriction that specified

that "[n]ot more than one (1) single family residence shall be

constructed       on    said    premises      at    a   cost    of    not    less      than

$20,000.00."        Bubolz, 159 Wis. 2d at 290.                 The property-owning

defendants argued that the restrictive covenant pertained to and

limited only what could be constructed on the property.                           Bubolz,

159   Wis. 2d      at    293.        They    contended       that    the    restrictive
covenant did not pertain to or limit their use of the property

for a commercial purpose.             Bubolz, 159 Wis. 2d at 293.

      ¶58    The    court      of    appeals      rejected     the    property-owning

defendants' argument.           First, the court of appeals held that the

restrictive       covenant      at    issue       extended     to    the    use   of    the

property.         Bubolz, 159 Wis. 2d at 294.                  Then, as it did in

Harding, the court of appeals focused on how the property was

      10
       Bubolz v. Dane Cty., 159 Wis. 2d 284, 464 N.W.2d 67 (Ct.
App. 1990).


                                              9
                                                                No.   2016AP1608.ssa


being used by the occupants.            In Bubolz, the occupants happened

to     also   be   the    property    owners       who   were    conducting        the

electrical contracting business out of their home.                           Thus, in

Bubolz, the occupants/owners were using the property for both

residential and commercial purposes.                 Bubolz, 159 Wis. 2d at

294.     This is in contrast to the occupants of the properties in

Harding and Heef Realty, who used the properties at issue for

residential purposes only.

       ¶59    Accordingly, to the extent the restrictive covenant

directs the court to focus on the use of the property rather

than on the nature of the activities occurring on the property,

Wisconsin     courts     focus   on   how    the   property     is    used    by   the

occupants, not how the property is used by the owners.

                                       III

       ¶60    In sum, because the lead opinion errs at the outset by

concluding that the term "commercial activity" is ambiguous, it

embarks down the wrong analytical path, leaving many questions

unanswered.
       ¶61    I concur with the mandate of the court, but I write

separately to set forth the correct legal analysis that the

court would have otherwise had to engage in but for its mistaken

conclusion that the term "commercial activity" is ambiguous.




                                        10
                                                                     No.   2016AP1608.dk


       ¶62     DANIEL KELLY, J.             (concurring).        "There shall be no

commercial activity allowed on any of said lots."                            Sentences

become unnecessarily convoluted when they speak in the passive

voice       through      split       verb     phrases,      as    this     one    does.

Fortunately,        neither     of    these    foibles     is,   strictly    speaking,

ungrammatical.1        And that means the quoted sentence will show us

its plain meaning if we just apply a little grammatical elbow-

grease.

       ¶63     We   start,     as    would    all   good   grade-school      students,

with identifying the sentence's subject.                    Unfortunately, authors

make this first step more difficult when they use the passive

voice.       Such a formulation allows them to hide the actor (the

sentence's grammatical subject) by replacing it with what would

have been the sentence's grammatical object if they had written

the sentence in the active voice.                   To identify the subject of

this sentence, we first must rearrange it into its active-voice

form so we can find the grammatical object.                        Thus rearranged,

the restrictive covenant would read:                   "Lot owners[2] shall allow
no commercial activity on any of said lots."                      The verb phrase in

this       formulation    is     "shall      allow,"     which    makes    "commercial



       1
       We do,         however,        generally     frown    on    them     for   their
obscurantism.
       2
       "Lot owners" were the hidden actors of the restrictive
covenant. Because they were hidden, identifying them requires a
little speculation. But only a little. Lot owners, of course,
are the only ones realistically capable of allowing commercial
activity on the lots, so it's a pretty safe guess that they are
the ones to whom the covenant applies.


                                              1
                                                                         No.    2016AP1608.dk


activity"      the     verb's     direct        object.3          The     passive       voice

transformation, therefore, moved                  "commercial activity"              to the

subject slot.

    ¶64       The    passive    voice       not     only        swaps    the     sentence's

subject and object, it also transforms the verb phrase ("shall

allow") by adding the verb "to be" while simultaneously putting

the existing verb into the past tense.                       Here, the author placed

the sentence's subject (commercial activity) in the middle of

the verb phrase, which made it read as follows:                               "shall be no

commercial     activity       allowed."           But    after     setting       aside   the

sentence's subject (commercial activity) for a moment, the verb

phrase easily resolves to "shall be allowed."

    ¶65       Now that we have accounted for the subject and verb

phrase, we may readily identify the remainder of the sentence as

a simple, but critical, prepositional phrase:                           "on any of said

lots."     Prepositional phrases come in two varieties——adjectival

and adverbial.          As the names imply, they provide additional

information         about   either     a    noun        or   a    verb.         Here,    the
prepositional        phrase     is    adjectival          because       the    preposition

provides      identifying         information           about      the        noun   phrase

"commercial activity."            That is to say, the prepositional phrase

tells    us    the     sentence      does    not        apply     to    all    "commercial

activity,"      but     only    to     "commercial           activity"         as    further

    3
       "[N]o," as it appears immediately before the direct
object, is simply a word of negation. Grammatically, an author
may accomplish the negation either by using "no" in conjunction
with the object to be negated, or "not" in conjunction with the
verb. The meanings are equivalent.


                                            2
                                                                       No.       2016AP1608.dk


described by the prepositional phrase.                    The preposition——"on"——

is locational, which tells                 us the sentence's subject is not

allowed      only     when      it     occurs      where        identified          by     the

prepositional phrase.

       ¶66   When we stitch all of this together, the restrictive

covenant says that no "commercial activity" (the subject) "shall

be allowed" (the verb) "on any of said lots" (the adjectival

prepositional        phrase).        The    covenant      does     not      prohibit       all

commercial activity, but only so much of it that takes place "on

any of said lots."              It says nothing about what may be done

"with" the property, or "to" the property, but only what may be

done    "on"    the    property.           That   is    to     say,    the       covenant's

restriction is locational.

                                             *

       ¶67   This     grammatical          exercise      makes        the        restrictive

covenant really quite easy to understand.                     It also unequivocally

prevents the covenant from saying what the Forshees want it to

say.      The   Forshees     assert        that   the    Neuschwanders            engage    in
commercial      activity        when       they   rent        their        property      (the

"Property"),        something    they      believe      the    restrictive          covenant

expressly forbids.          But they can make the covenant say this only

if they ignore either the nature of the activity taking place on

the Property, or the prepositional phrase.

       ¶68   Because     the     restrictive           covenant       is     a     location-

specific prohibition of commercial activity, our application of

its language must begin with surveying what is happening on the
Property.       As    the    court's       opinion      aptly     describes,         renters

                                             3
                                                                     No.    2016AP1608.dk


"sleep, cook, eat, and recreate in their preferred manner" on

the Property.      Majority op., ¶8.               If this is the "renting" about

which   the    Forshees     complain,         then    substituting       that    activity

into the covenant should produce a meaning that is satisfactory

to   them.      Here   is   how    it    would       read:      "There     shall   be    no

sleeping,      cooking,     eating,      or       recreating    commercial       activity

allowed on any of said lots."                 If the Forshees stopped a renter

in the middle of his meal to ask him what he was doing, he would

not say he was renting.            He would say he was eating.               And if the

renter had the temerity to stop the Forshees in the middle of

their meal to ask what they were doing, they would not say they

were owning.       The renters obtained the right to sleep, cook,

eat,    and     recreate      on     the          Property     through     the     rental

transaction, but "renting" does not describe what they do on the

Property.      We could not read the restrictive covenant this way

without      disastrous,    unintended            consequences.      If    we    were   to

conclude that what the renters do on the Property comprises

"commercial      activity,"       then     the      Neuschwanders'       neighbors      had
best pack their bags because the owners and renters are doing

the same thing.

       ¶69    Even though the covenant's restrictions only apply to

what occurs "on any of said lots," the Forshees are not actually

interested in what happens there.                     They are quite adamant, in

fact, that "[w]hat the customers do while on the property is

irrelevant."      Instead, they say, it is the Neuschwanders' act of

renting the Property that violates the covenant.                            If that is
what the covenant prohibits, plugging that activity into the

                                              4
                                                                            No.   2016AP1608.dk


restrictive covenant should produce the meaning favored by the

Forshees.         That     substitution       would      have       the     covenant    read,

"There shall be no renting of the Property commercial activity

allowed on any of said lots."                    "Renting of the Property," of

course, simply refers to the transaction by which one obtains

the right to use the Property for a defined period of time, just

as purchasing the Property refers to the transaction by which

one obtains ownership of the Property.

       ¶70   So     if   the   Forshees      are     right——that           "renting"     is    a

commercial       activity      to    which     the      covenant          refers——then      the

covenant     would       merely     prohibit      the    rental           transaction     from

taking place on the Property.                That, of course, is not what they

want the covenant to say.              But it could say that if we ignored

the prepositional phrase.              The Forshees' desired effect would

obtain if we further modified the covenant to say, "There shall

be no renting of the Property allowed on any of said lots."                                 But

that would make surplusage of the prepositional phrase, which we

avoid    whenever        possible.      See      Maryland          Arms    Ltd.    P'ship     v.
Connell, 2010 WI 64, ¶45, 326 Wis. 2d 300, 786 N.W.2d 15 ("When

possible, contract language should be construed to give meaning

to every word, 'avoiding constructions which render portions of

a     contract    meaningless,        inexplicable            or     mere     surplusage.'"

(quoted source omitted)).

       ¶71   The restrictive covenant's plain meaning simply does

not    say   what    the    Forshees    want       it    to    say.         No    grammatical

reading of the covenant could prevent the Neuschwanders from
renting their property——so long as the renters do not engage in

                                             5
                                                                       No.   2016AP1608.dk


"commercial activity" while residing there.                      The Forshees do not

appear to be claiming that activities like sleeping, cooking,

eating, and recreating are commercial in nature.                                Nor could

they——if such activity is commercial, the Forshees could no more

engage in it than the renters.

       ¶72    After      applying     a     few     rules     of      grammar     to     the

restrictive covenant, the sentence disclosed more than enough of

its plain meaning to resolve this case.                       Instead of employing

this   grammatical        analysis,        the    court   sought      a   comprehensive

definition of "commercial activity."                      When it was unable to

discover one, it declared the phrase ambiguous, and used a rule

of construction to resolve the covenant's language against the

Forshees.          If we should find our covenant construction efforts

in extremis, we certainly may have resort to this lifeline.                               We

shouldn't      grab      for   it,    however,       unless      we    really     are     in

extremis.          We   weren't,     and   we     could   have     (and   should       have)

stated       the    covenant's       meaning      without     it.         Therefore,       I

respectfully concur and join the majority except to the extent
it is inconsistent with this concurrence.

       ¶73    I am authorized to state that Justice REBECCA GRASSL

BRADLEY joins this concurrence.




                                             6
                                                              No.    2016AP1608.awb


     ¶74   ANN WALSH BRADLEY, J.            (dissenting).     The restrictive

covenant   at    issue   provides,    "There     shall   be     no    commercial

activity allowed on any of said lots."            Although the application

of the phrase "commercial activity" in some contexts may render

the statute ambiguous, it is not ambiguous here.

     ¶75   The    Neuschwanders      purchased    the    property       in   2014,

renovated it, and have primarily rented it out to vacationers.

Lead op., ¶6.     In 2015, the Neuschwanders received $55,784.93 in

rent including taxes and paid $4,973.81 in room tax to the City

of Hayward.

     ¶76   To run such a lucrative enterprise is, in my view,

plainly "commercial activity."             It relates to commerce and has

profit as its chief aim.          Accordingly, I reach a conclusion

contrary to the lead opinion1 and respectfully dissent.




     1
       I use the term "lead" opinion for two reasons. First, I
am concerned that without this cue, the reader may mistakenly
believe that the lead opinion has any precedential value.
Although six justices join in the mandate of the opinion to
affirm the court of appeals (Roggensack, C.J., joined by
Abrahamson, J., Ziegler, J., Gableman, J., Rebecca Grassl
Bradley, J., and Kelly, J.), it represents the reasoning of only
three justices (Roggensack, C.J., joined by Ziegler, J., and
Gableman, J.). Justices Abrahamson, Rebecca Grassl Bradley and
Kelly joined in the mandate, but they would rely on contrary
reasoning.

     Although set forth in three separate opinions, four
justices disagree with the reasoning of the lead opinion.
Contrary to the lead opinion, four justices determine that the
restrictive covenant is unambiguous (Abrahamson, J., Ann Walsh
Bradley, J., Rebecca Grassl Bradley, J., and Kelly, J.).

                                                                     (continued)
                                       1
                                                                         No.    2016AP1608.awb


                                             I

       ¶77    The lead opinion concludes that the term "commercial

activity"     as    used   in    the    restrictive         covenant       is    ambiguous.

Lead op., ¶¶21-22.          It therefore construes the words in favor of

the property owners' ability to use their property freely.                                 Id.,

¶26.    Accordingly, in the lead opinion's view, the restrictive

covenant does not prohibit any short-term or long-term rentals

of the Neuschwanders' property.                  Id., ¶28.

       ¶78    A    restrictive        covenant      will     be     enforced         if    the

intention     of    the    parties     is    clearly    shown       in     the     covenant.

Voyager Vill. Prop. Owners Ass'n v. Johnson, 97 Wis. 2d 747,

749, 295 N.W.2d 14 (Ct. App. 1980).                    Intent does not refer to

the    subjective     intent     of    the   drafter,        but    to    the     scope     and

purpose of the covenant as manifest by the language used.                                 Zinda

v. Krause, 191 Wis. 2d 154, 166, 528 N.W.2d 55 (Ct. App. 1995).

       ¶79    Further construction of a covenant is only necessary

when it is ambiguous.            Voyager Village, 97 Wis. 2d at 749.                         In

interpreting the language of a restrictive covenant, we apply
the plain and ordinary meaning of the words.                               See Tufail v.

Midwest      Hosp.,   LLC,      2013   WI    62,     ¶28,     348    Wis. 2d 631,           833


     Second, I use the term "lead" opinion because although it
is undefined in our Internal Operating Procedures, its use here
is consistent with past description. We have said "that a lead
opinion is one that states (and agrees with) the mandate of a
majority of the justices, but represents the reasoning of less
than a majority of the participating justices." State v. Lynch,
2016 WI 66, ¶143, 371 Wis.2d 1, 885 N.W.2d 89 (Abrahamson & Ann
Walsh Bradley, JJ., concurring in part, dissenting in part)
(citing Hoffer Props., LLC v. State, Dep't of Transp., 2016 WI
5, 366 Wis.2d 372, 874 N.W.2d 533).


                                             2
                                                                No.       2016AP1608.awb


N.W.2d 586; Solowicz v. Forward Geneva Nat'l., LLC, 2010 WI 20,

¶34, 323 Wis. 2d 556, 780 N.W.2d 111 (explaining that ordinary

contract rules apply to interpreting the terms of a restrictive

covenant).

      ¶80   "Commercial        activity"     is     susceptible          to   a    clear

definition.     As the lead opinion does, I turn to the dictionary

for   assistance.        The    dictionary    includes     as     definitions        of

"commercial" the rather obvious "[o]f or relating to commerce"

and   the    more    incisive     "[h]aving       profit   as    a       chief     aim."

American Heritage Dictionary 380 (3d ed. 1992).                       I accept the

plain meaning of these words, and therefore determine that the

covenant is unambiguous.

      ¶81   Applying      the     restrictive        covenant's           unambiguous

language to the specific activity in this case, I conclude that

the short-term vacation rental activity here is prohibited.                         The

record in this case indicates that the Neuschwanders profited

handsomely from the rental of their house.                  They further paid

substantial room tax to the City of Hayward and have held the
property out as a lodge available for rent in advertisements.

      ¶82   A   profit     motive     was     the     entire     basis        of    the

relationship.       The Neuschwanders did not operate the property as

a single or two family dwelling.             It was advertised to sleep up

to 15 people with a maximum of eight cars, regardless of the

family   relationship.          Instead,    they     conducted       a    short    term

transient lodging business and used the property as part of that

business enterprise.           Both the Neuschwanders and their renters
engaged in this enterprise.          The very presence of the renters on

                                       3
                                                                            No.   2016AP1608.awb


the property is the result of a commercial exchange.                                       Absent

payment, renters would not be able to engage in any activities

on the property, such as eating, sleeping, and recreating.

       ¶83   Additionally, the Neuschwanders acquired the property

in the first instance through a 1031 tax exchange.                                         See 26

U.S.C.    § 1031.       A        1031   tax   exchange        is   a     process      by    which

certain      properties           may    be    exchanged           without        the      I.R.S.

recognizing a gain or loss.                   See id.          The catch is that the

property exchanged must be "held for productive use in a trade

or   business     or    for       investment."          Id.        By    seeking        the   tax

advantage that accompanies a 1031 exchange, the Neuschwanders

tacitly acknowledge that the property is used for "business," or

in other words, "commercial activity."

                                              II

       ¶84   Although I conclude that the Neuschwanders' rental of

their    property      is    circumscribed         by   this       restrictive          covenant

because their activity relates to commerce and has profit as its

chief aim, I do not reach my conclusion without pause.
       ¶85   As   the       lead    opinion       observes,        the      breadth      of   the

restrictive covenant at issue raises concern.                                 See lead op.,

¶22.     It could be read to proscribe selling homemade crafts,

writing a blog post for compensation, or keeping any kind of

home office.        On the other hand, it also could be that these

activities     would        be    considered       de   minimus        or    "incidental       to




                                              4
                                                                       No.    2016AP1608.awb


their       occupation      of   the    premises        as     their     single       family

residence."2      But these facts are not before us.

       ¶86     Although     some    activities         may    be   close     calls    as    to

whether         they        constitute        "commercial            activity,"            the

Neuschwanders'         vacation     rental        is   not     a   close      call.        The

language of the covenant is unambiguous and its application to

the Neuschwanders does not render an absurd result.

       ¶87     The breadth of the restrictive covenant, however, is

not the only concern.              So, too, is the apparent breadth of the

lead       opinion's    holding.        Its       interpretation       of      "commercial

activity" has ramifications well beyond the facts of this case.

Likely there are a myriad of restrictive covenants that use the

same or a similar phrase.              Are all of those now void?                 The lead

opinion       seems    to   provide     a   blanket          statement       favoring      the

property owner's rights over the rights of others.                                Yet, it

supports its conclusion with only a truncated analysis that does

not consider the larger context in which it fits.

       ¶88     The breadth of the lead opinion's holding stands in
contrast to the dearth of its analysis.                            Without sufficient

explanation, the lead opinion extols the property rights of the



       2
       See Bubolz v. Dane Cty., 159 Wis. 2d 284, 295-96, 464
N.W.2d 67 (Ct. App. 1990) (injunction against violation of
restrictive covenant did not prohibit a residents from engaging
in business activities that are "incidental to their occupation
of the premises as their single family residence."); see also
Joyce v. Conway, 7 Wis. 2d 247, 251, 96 N.W.2d 530 (1959)
(explaining that acquiescence to past violations does not
deprive affected property owners of the right to enforce later
violations of a restrictive covenant).


                                              5
                                                                           No.   2016AP1608.awb


Neuschwanders at the expense of other rights and other property

owners.

      ¶89     Pivotal to the lead opinion's analysis is its premise

that "[p]ublic policy of the state of Wisconsin 'favors the free

and unrestricted use of property.'"                             Lead op.,        ¶16 (quoting

Crowley v. Knapp, 94 Wis. 2d 421, 434, 288 N.W.2d 815 (1980)).

But   what    about        the    public    policy        of    this    state    that    favors

freedom      to    contract?           Because       of   the     import    of     freedom     to

contract,         courts    in     the     past      have      supported     the    right      of

property owners to create and enforce covenants affecting their

own property.          See Solowicz, 323 Wis. 2d 556, ¶¶34-35.                               Which

right should prevail under these circumstances and why?                                       The

lead opinion does not explain.

      ¶90     Likewise, the lead opinion fails to explain why the

property     right     of        the   Neuschwanders           should   prevail      over     the

property      rights       of     their    neighbors.             Concerns       have    arisen

regarding     traffic,           noise,    and    other        disturbances.         Here     the

property is comprised of a house located on 2.2 acres.                                       What
about the rights of those where the rental is not so distant,

but rather the front doors are separated by only a few feet?

The lead opinion is silent.

      ¶91     Although espousing to be written narrowly,3 the lead

opinion instead appears to write large, without consideration or

analysis      of     the     competing       rights         and    implications         of    its

decision.         This is particularly problematic because the rapid


      3
          See lead op., ¶3.


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development of the short-term rental industry appears to have

outpaced    the      development   of       the   law.4     State    and    local

legislative bodies5 as well as courts6 have only recently been

grappling     with     the   weighty    issues       that   attend     to    this

enterprise.

    ¶92     Some courts addressing issues akin to that which we

address today employ an analysis and reach a conclusion similar

to that set forth in this dissent.                 See Eager v. Peasley, __

N.W.2d __, 322 Mich. App. 174 (Mich. Ct. App. 2017); Vonderhaar

    4
       See, e.g., Fruchter v. Zoning Bd. of Appeals of Town of
Hurley, 133 A.D.3d 1174, 1175 (N.Y. App. Div. 2015) ("The Town
Code does not appear to have been updated to consider the
ramifications from the emergence of the so-called 'sharing
economy,' which includes the type of house sharing or short-term
rentals recently made popular by various platforms on the
Internet . . . .").
    5
       See 2017 Wis. Act 59, §§ 985L, 985r (creating Wis. Stat.
§ 66.0615(1)(bs) and (5)); Wis. Stat. § 66.0615(5) (requiring
"lodging marketplaces" to register with the department of
revenue, and to collect sales and use tax, as well as room tax,
if applicable); see also Wis. Stat. § 66.0615(1)(bs) (defining
"lodging marketplace" as "an entity that provides a platform
through which an unaffiliated 3rd party offers to rent a short-
term rental to an occupant and collects the consideration for
the rental from the occupant."); see also Vanessa Katz,
Regulating the Sharing Economy, 30 Berkeley Tech. L.J. 1067
(2015).
    6
       As an example, the Pennsylvania Supreme Court recently
accepted review of Slice of Life, LLC v. Hamilton Twp. Zoning
Bd., 164 A.3d 633 (Pa. Commw. Ct. 2017), review granted 180 A.3d
367 (Pa. 2018).     There, the question to be addressed is set
forth as:     "Whether the Commonwealth Court disregarded the
binding precedent of this Court, set forth in the case Albert v.
Zoning Hearing Bd. of North Abington Twp., 578 Pa. 439, 854 A.2d
401 (2004), by finding that the purely transient use of a
property as part of a commercial short-term vacation rental
business was a permitted use in a residential zoning district?"


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v. Lakeside Place Homeowners Ass'n, Inc., No. 1021-CA-002193-MR,

unpublished    slip    op.       (Ky.   Ct.    App.   Aug.    8,   2014).      Others

embrace a contrary path and conclusion.                  See Santa Monica Beach

Prop. Owners Ass'n, Inc. v, Acord, 219 So.3d 111 (Fla. Dist. Ct.

App. 2017);     Wilkinson v. Chiwawa Cmtys.                  Ass'n, 327 P.3d 614

(Wash. 2014).

      ¶93   As new arguments are developed, new fact situations

presented, and new legislation passed, the law will continue to

evolve in this area.              Restrictive covenants will be only one

part of this evolution, as they intersect and overlap with the

enforcement of local zoning ordinances that attempt to regulate

this rapidly growing enterprise.                There will inevitably be more

litigation surrounding short-term rentals.

      ¶94   This court paints with a broad brush where a more

nuanced analysis is required.                 Lest by the apparent breadth of

its   decision,       the        lead   opinion       unintentionally        provides

inflexible    answers       to    questions     not   yet    presented.       A   more

nuanced analysis, at least recognizing the important rights it
is subjugating, together with an explanation of why, may provide

guidance to future courts and litigants as they grapple with the

developing issues that attend this burgeoning industry.

      ¶95   Accordingly,          for   the    reasons      set    forth    above,   I

respectfully dissent.




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