Anderson v. Aul
844 N.W.2d 636
Wis. Ct. App.2014Background
- Aul Real Estate Investment Co. LLC was owned by Thomas Aul and his wife; the Andersons bought property from Aul.
- At closing, the Andersons signed a Waiver of Conflict of Interest, acknowledging Aul advised independent counsel and that they would be represented by Aul's law firm.
- The Andersons later retained independent counsel and sent a December 23, 2009 letter demanding $117,125; Aul hired counsel in response.
- WILMIC, Aul's professional liability insurer, first received notice on March 9, 2011, eleven months after the policy period ended (April 1, 2009 to April 1, 2010).
- The Andersons filed suit against Aul on March 2, 2012 for multiple claims; WILMIC defended under a reservation of rights and later moved for summary judgment.
- The circuit court granted summary judgment for WILMIC, holding the December 23, 2009 letter was untimely and that prejudice need not be considered.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Prejudice from untimely notice under the statute | Andersons argued prejudice must be assessed; evidence showed no prejudice. | WILMIC argued untimely notice presumptively prejudicial and prejudice must be shown. | Prejudice must be determined; court held no prejudice as a matter of law. |
| Application of statutes to prejudice with a claims-made policy | Statutes apply to all liability policies; prejudice analysis remains necessary. | Policy type controls; claims-made nature dictates prejudice rules. | Statutes apply; no prejudice shown despite claims-made aspects. |
| Prejudice analysis when facts are undisputed | Even with untimely notice, no prejudice occurred given timing and defense. | Untimely notice is prejudicial absent contrary evidence. | Undisputed facts establish no prejudice to WILMIC as a matter of law. |
| circuit court's failure to address prejudice | Court should determine prejudice, not merely deny coverage on timeliness. | Presumed prejudice governs if untimeliness is shown; prejudice need not be addressed. | Court reversed; prejudice determination required and found in favor of not prejudicing insurer. |
| Remandability of issues not addressed below | All grounds for summary judgment should be considered on remand. | Only prejudice issue was central; other grounds need not be considered. | Remanded for proceedings not inconsistent with opinion. |
Key Cases Cited
- Fireman's Fund Ins. Co. of Wis. v. Bradley Corp., 261 Wis. 2d 4 (2003 WI) (prejudice analyzed where untimely notice; major prejudice shown if no remedy)
- Gerrard Realty Corp. v. American States Ins. Co., 89 Wis. 2d 130 (1979 WI) (notice timeliness can create presumption of prejudice; prejudice analysis remains)
- Neff v. Pierzina, 245 Wis. 2d 285 (2001 WI) (untimely notice: prejudice determination required)
- Phoenix Contractors, Inc. v. Affiliated Capital Corp., 273 Wis. 2d 736 (2004 WI) (notice-prejudice framework; insurer prejudice findings)
- Ansul, Inc. v. Employers Ins. Co. of Wausau, 345 Wis. 2d 373 (2012 WI App 135) (notice-prejudice statutory provisions; relevance to burden of proof)
- International Flavors & Fragrances, Inc. v. Valley Forge Ins. Co., 304 Wis. 2d 732 (2007 WI App 187) (statutory requirement that failure to provide timely notice does not defeat coverage absent prejudice)