Jonas Builders, Inc. v. United States Fidelity

• Decision Date: 21 November 2001
• Docket Number: 00-2190
• Citation: 639 N.W.2d 223,249 Wis. 2d 487
• Parties: This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports. A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. §808.10 and Rule 809.62. Jonas Builders, Inc., Plaintiff-Respondent, v. United States Fidelity & Guaranty Company a/k/a Fidelity and Guaranty Insurance Underwriters, Inc., Defendant-Appellant.STATE OF WISCONSIN IN COURT OF APPEALS DISTRICT I
• Court: Wisconsin Court of Appeals

This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports.

A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See Wis. Stat. §808.10 and Rule 809.62

Jonas Builders, Inc., Plaintiff-Respondent v United States Fidelity & Guaranty Company a/k/a Fidelity and Guaranty Insurance Underwriters, Inc., Defendant-Appellant

No. 00-2190

STATE OF WISCONSIN IN COURT OF APPEALS DISTRICT I

November 21, 2001

APPEAL from a judgment and an order of the circuit court for Milwaukee County: STANLEY A. MILLER, Judge. Affirmed.

Before Vergeront, P.J., Dykman and Deininger, JJ.

¶1. DYKMAN, J.

United States Fidelity & Guaranty Company appeals from a judgment of $996,417 plus prejudgment interest and double costs in favor of its insured, Jonas Builders, Inc., and from an order denying its postverdict motions. USF&G challenges the jury's findings that Jonas Builders' claim involved one "occurrence" within the meaning of the insurance policy, that Jonas Builders did not fail to give timely notice to USF&G, that Jonas Builders took reasonable steps to protect the covered property, and that the actual cash value of the property was $750,000. USF&G also challenges the circuit court's decision to enter judgment based on the replacement cost (rather than actual cash value) of the property, its refusal to apply the policy's coinsurance provision, and its award of statutory interest and double costs under Wis. Stat. §807.01 (1999-2000).¹ We affirm on all issues.

Background

¶2. United States Fidelity & Guaranty Company provided property insurance coverage to Jonas Builders, Inc., from March 1, 1995, to March 1, 1996. Among the property insured by USF&G was a complex of seven buildings in Milwaukee that had formerly been used for manufacturing, but were used mostly for storage in the Fall of 1995. In late October 1995, Gerald Jonas, owner of Jonas Builders, discovered that one of the insured properties, located at 2784 North 32nd Street, had been vandalized. Three different areas of that property were involved: a mezzanine, a boiler room and an open crane bay area. Anything that was copper or brass in these areas was stripped and taken, including the wiring, the pipes, and the copper from the boiler. The police were called and a police report was made. Gerald asked Christine Jonas, the officer manager for Jonas Builders, to call the insurance company.

¶3. In mid-November, Gerald discovered that another insured property, located at 2748 North 32nd Street, had been vandalized. The building at 2748 is approximately one-half city block away from the building at 2784. Again, copper wiring had been cut and stripped, this time from transformers outside the building and from troughs that connected the transformers. In addition, glass insulators on top of the transformers were smashed. Gerald again called the police and another police report was made on November 14, 1995.

¶4. Later in November 1995, Gerald, while he was visiting the property, witnessed someone burning insulation off copper wires there. He called the police and followed the thief to a scrap yard, where Gerald witnessed the thief selling the wires. The police arrived soon after, and arrested Lamar Moore. After this incident, Gerald installed some additional lighting and a video camera.

¶5. Apparently, Moore was released soon after he was arrested. The video camera captured Moore in the act of theft on the property on December 18, 1995. After this, Gerald again witnessed Moore stealing from the property, this time with an accomplice, Mr. Nash. The police were with Gerald this time, and Nash was arrested, though Moore escaped. The video camera had recorded the incident, and Gerald took the tape to the police. Moore, who was on probation at the time, was called in by his probation officer and arrested.

¶6. Jonas Builders provided a written notice of claim to USF&G on January 16, 1996. USF&G sent a claims adjustor to the property who then asked Eugene Coblentz, an electrician, to estimate the amount of damage. Coblentz estimated that the total cost of repair and replacement would be approximately $1million. In a letter dated May 10, 1996, USF&G denied Jonas Builders' claim because it concluded that Jonas Builders' covered losses did not exceed its deductible.

¶7. Jonas Builders sued USF&G. At trial, the jury returned a special verdict, finding that the vandalism and theft involved "continuous or repeated exposure to substantially the same general harmful conditions," that Jonas Builders did not fail to notify USF&G of its loss within a reasonable time or take reasonable steps to protect the property, that the replacement cost of the damage was $1,021,417, and the actual cash value of the property was $750,000.

¶8. The trial court denied USF&G's motion for judgment notwithstanding the verdict, and entered judgment for Jonas Builders in the amount of $996,417, based on the jury's finding of replacement cost less the $25,000 deductible. In addition, the court awarded Jonas Builders double costs and prejudgment interest at an annual rate of twelve percent. USF&G appeals.

Opinion

¶9. There is no dispute that the USF&G policy provides coverage for the theft and vandalism sustained by Jonas Builders. USF&G, however, alleges that Jonas Builders failed to comply with requirements of the policy regarding notice and protecting the property, invalidating its claim. Alternatively, USF&G asserts that other provisions of the policy work to reduce the amount Jonas Builders is entitled to recover below what the circuit court awarded in the judgment. USF&G argues that the jury made several erroneous factual findings in the special verdict and that the circuit court made a number of incorrect legal conclusions both during the trial and in denying USF&G's postverdict motions, requiring reversal.

A. Jury's Finding that Jonas Builders Gave Timely Notice

¶10. Section E.3.a(2) of the policy provides that Jonas Builders was required to give USF&G "prompt notice" in event of loss or damage to covered property. Question three on the special verdict form asked, "Did Jonas Builders fail to notify USF&G of the vandalism and/or theft damage within a reasonable time?"² The jury answered "No." USF&G argues that there is no credible evidence to support this answer. It further asserts that it was prejudiced by Jonas Builders' failure to give timely notice and that the notice requirement was reasonable, making the claim invalid under Wis. Stat. §631.81(1).³

¶11. We conclude that there was sufficient evidence to support the jury's finding that Jonas Builders gave USF&G timely notice. We will overturn a jury's finding only if there is no credible evidence, under any reasonable view, that leads to an inference supporting the jury's finding. Morden v. Continental AG, 2000 WI 51, ¶38, 235 Wis.2d 325, 611 N.W.2d 659; see also Wis. Stat. §805.14(1). It is therefore our duty to search the record for credible evidence that sustains the jury's verdict, not for evidence to support a verdict that the jury could have reached but did not. Morden, 2000 WI 51 at ¶39.

¶12. It is undisputed that Jonas Builders did not provide written notice of its claim to USF&G until January 1996. At trial, however, Christine Jonas, the office manager for Jonas Builders, testified that when she learned that the property had been vandalized in late October 1995, she called Jeff Stecker, who was Jonas Builders' insurance agent, to report the loss. In early November, she had a meeting with Stecker and Robert Lentz, who sold Jonas Builders the USF&G insurance policy. According to Christine, the purpose of the meeting was to discuss both the vandalism and the renewal of the insurance policy, which would expire on March 1, 1996. Lentz testified that he never had a conversation with Christine regarding the vandalism of Jonas Builders and did not recall having a meeting with her and Stecker in Fall 1995. Stecker did not testify.

¶13. USF&G does not argue that the jury was not entitled to believe Christine instead of Lentz, that the policy required that written rather than oral notice be given to satisfy the policy's notice requirement, or that giving notice to Lentz rather than directly to USF&G was insufficient. Instead, it argues that the circuit court erred when it allowed Christine to testify regarding the oral notice she gave to Lentz. In support, USF&G refers us to Jonas Builders' complaint, which alleged that it gave "due" notice of its loss to USF&G on January 16, 1996. Because USF&G admitted this allegation in its answer, it claims that there was no issue of material fact regarding when notice was first given to be decided by the jury, and that any testimony on this issue was irrelevant. See Savich v. Hines, 174 Wis. 181, 183, 182 N.W.2d 924 (1921) ("Where a material fact is alleged in the complaint and admitted in the answer, it becomes a veracity in the case, and evidence in respect thereto immaterial to the issues, there being no issue upon that matter.")

¶14. We disagree with USF&G because Jonas Builders never alleged in its complaint that the written notice it provided in January was the first or only notice it provided to USF&G. Rather, it simply made reference to "due" notice. Due notice in this context has questionable meaning, particularly because the term is not mentioned in either the policy or Wis. Stat. §631.81. USF&G should not have taken this allegation as a concession that another form of notice had not been given prior to that date. We therefore find its argument that it was unfairly surprised by Christine's testimony unpersuasive.

¶15. Furthermore, even if Jonas Builders had alleged that it had given no notice before January, USF&G has not persuaded us that the circuit court erred in concluding the evidence was relevant. The determination regarding the admissibility of evidence...