Rentmeester v. Wisconsin Lawyers Mut. Ins. Co., 90-2443

• Decision Date: 23 July 1991
• Docket Number: No. 90-2443,90-2443
• Citation: 473 N.W.2d 160,164 Wis.2d 1
• Parties: Marvin A. RENTMEESTER and Myrtle J. Rentmeester, his wife, Plaintiffs-Respondents, v. WISCONSIN LAWYERS MUTUAL INSURANCE COMPANY, Defendant-Respondent-Cross-Respondent, William HINKFUSS, Defendant-Third-Party Plaintiff-Respondent-Cross-Appellant, v. CONTINENTAL CASUALTY COMPANY, Third-Party Defendant-Appellant. d
• Court: Wisconsin Court of Appeals

Page 160

473 N.W.2d 160

164 Wis.2d 1

Marvin A. RENTMEESTER and Myrtle J. Rentmeester, his wife, Plaintiffs-Respondents, v. WISCONSIN LAWYERS MUTUAL INSURANCE COMPANY, Defendant-Respondent-Cross-Respondent, William HINKFUSS, Defendant-Third-Party Plaintiff-Respondent-Cross-Appellant, v. CONTINENTAL CASUALTY COMPANY, Third-Party

Defendant-Appellant. ^d

No. 90-2443.

Court of Appeals of Wisconsin.

Submitted on Briefs June 28, 1991.

Opinion Released July 23, 1991.

Opinion Filed July 23, 1991.

Jerome E. Smyth and Jon M. Counsell, Liebmann, Conway, Olejniczak & Jerry, S.C., Green Bay, for third-party defendant-appellant.

Thomas L. Schober and Dean R. Rohde, Schober & Ulatowski, S.C., Green Bay, for defendant-third-party plaintiff-respondent-cross-appellant.

Nila Jean Robinson and Avram D. Berk, Robinson, Robinson, Peterson, Berk & Cross, Appleton, for plaintiffs-respondents.

William W. Ehrke, Quale, Feldbruegge, Calvelli, Thom & Croke, S.C., Milwaukee, for defendant-respondent-cross-respondent.

Before CANE, P.J., and LaROCQUE and MYSE, JJ.

MYSE, Judge.

Continental Casualty Company (CNA) appeals a judgment requiring CNA to defend and to provide coverage to attorney William Hinkfuss in Marvin and Myrtle Rentmeesters' legal malpractice action against Hinkfuss. CNA contends that because the Rentmeesters made no claim during the CNA policy period as required by its claims made policy, it owes no duty to defend or provide coverage to Hinkfuss. Alternatively, CNA contends that coverage should be denied because it did not receive timely notice of the claim and was prejudiced by the failure to receive timely notice. Because a claim was made during the policy period and because CNA was not prejudiced by any notice deficiencies, we affirm. ¹

In 1979, the Rentmeesters sold property to Michael and Myrna Lane, and Hinkfuss drafted and recorded the land contract for the Rentmeesters. Five years later, a dispute arose between the Rentmeesters and the Lanes concerning the land contract. The Rentmeesters contended that the land contract failed to embody the parties' agreement. The trial court ruled that the land contract as originally recorded governed the sale and rendered a decision adverse to the Rentmeesters.

Attorney Winston Ostrow represented the Rentmeesters in the Lanes' action against them. Following the adverse decision, Ostrow wrote to Hinkfuss. The letter, dated August 12, 1986, included the following statement:

The Rentmeesters intend to appeal. While we disagree with the factual determinations made by the Trial Court, we don't see much chance of success on an appeal because of the applicable standard of review....

I am reluctant and embarrassed to address the next matter.... However under the circumstances, the Rentmeesters have asked us to ask you to notify your professional insurance carrier of this matter. We would ask that a representative of your carrier contact the undersigned [Winston A. Ostrow]. Again, because of my personal feelings for you and my general distaste for professional malpractice claims, I am reluctant in conveying this; but I believe it is necessary under the circumstances.

In response to this letter, Hinkfuss wrote back to Ostrow. That letter contained the following:

Please be advised that the [trial court] Decision and the potential claim will be forwarded to my insurance carrier. I hope the appeal does work out....

Hinkfuss, however, did not forward the decision and potential claim.

After losing on appeal, the Rentmeesters commenced an action against Hinkfuss alleging that Hinkfuss had negligently drafted and recorded the land contract in 1979. Hinkfuss, as third-party plaintiff, brought an action against CNA alleging that CNA owed him a duty to defend and to provide coverage on the Rentmeester claim because CNA provided "claims made" malpractice insurance coverage to Hinkfuss from July 1, 1986, through July 1, 1987. ²

We first note what facts are not disputed. The parties do not dispute that Ostrow sent the letter to Hinkfuss during the CNA policy period. Nor do the parties contest that Hinkfuss did not contact CNA upon receipt of the letter. Finally, the parties agree that the letter Ostrow sent to Hinkfuss provides the only basis for asserting that a claim was made on the CNA policy during the policy period.

The first issue concerns whether the correspondence between Ostrow and Hinkfuss constituted a claim within the meaning of the policy. The question whether undisputed facts give rise to the existence of a claim is a legal question. See Chalk, 153 Wis.2d at 624-25, 451 N.W.2d at 772. We review such questions de novo. State v. Nordness, 128 Wis.2d 15, 24, 381 N.W.2d 300, 304 (1986).

The CNA policy defines "claim" as "the receipt of a demand for money or services, naming you (insured) and alleging a wrongful act." This definition is substantially similar to the policy considered in Chalk. That policy defined a claim as " 'a demand received by the insured for money or services, including the service of suit or institution of arbitration proceedings against the Insured.' " Id. at 625, 451 N.W.2d at 772. In Chalk, the court held that two government requests seeking general information from an attorney's file did not constitute claims within the meaning of the "claims made" policy. The court concluded that these inquiries did not constitute a claim, because the agency investigators made no demand for money or other relief nor did they state that the attorney was going to be proceeded against for matters relating to his rendering of legal services. Id. at 631, 451 N.W.2d at 775. The court stated, "the agencies' requests can in no sense be seen as demands that Winderman [the attorney] take affirmative action to remedy any wrong, and that, ... is what claims made coverage is all about...." Id. The court also noted that neither inquiry suggested that Winderman's legal work was either flawed or violated any law. Id. at 632-33, 451 N.W.2d at 775-76.

In the present case, the only reasonable construction of Ostrow's letter was to notify Hinkfuss and his insurer that the Rentmeesters would hold Hinkfuss financially responsible in the event their appeal failed. In Ostrow's letter, he stated that the Rentmeesters intended to appeal. He next noted his "general distaste for professional malpractice claims," but requested that Hinkfuss notify his insurance carrier of the situation and ask a representative of his insurance carrier to contact Ostrow. In contrast to the inquires in Chalk, Ostrow's letter could only mean that the Rentmeesters planned to seek relief from Hinkfuss if they lost on appeal. Moreover, not only did Ostrow term his demand "a claim," this is the precise construction that Hinkfuss gave the letter. Hinkfuss responded to Ostrow's letter stating that the "potential claim" would be forwarded to his insurance carrier and that he hoped the appeal would "work out."

The context in which Ostrow sent his letter to Hinkfuss supports our conclusion that the...