Leicht Transfer & Storage Co. v. Pallet Central Enterprises, Inc.

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Justia Opinion Summary

The Supreme Court affirmed the judgment of the court of appeals affirming the decision of the circuit court granting summary judgment in favor of Hiscox Insurance Company on Leicht Transfer & Storage Company's complaint seeking coverage for its losses under a commercial crime insurance policy issued to it by Hiscox, holding that Leicht's losses were not covered under the policy.

Pallet Central Enterprises, Inc. forged delivery tickets and used them to bill Leicht for the sale and delivery of pallets that Pallet Central never sold or delivered. Leicht sought coverage for its losses under the policy issued to it by Hiscox. Hiscox denied coverage. Leicht sued for breach of contract, arguing that the forged delivery tickets comprised "directions to pay" within the meaning of the "forgery or alteration" insuring agreement of the Hiscox policy. The circuit court granted summary judgment for Hiscox, and the court of appeals affirmed. The Supreme Court affirmed, holding (1) the delivery tickets did not qualify as "written...directions to pay a sum certain in money"; and (2) the policy did not provide coverage for forged documents that were not themselves "directions to pay," but which were used as proxies for such documents.

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2019 WI 61 SUPREME COURT CASE NO.: COMPLETE TITLE: OF WISCONSIN 2016AP2334 Leicht Transfer & Storage Company, Plaintiff-Appellant-Petitioner, v. Pallet Central Enterprises, Inc., Defendant, Travelers Property Casualty Company, Acuity, A Mutual Insurance Company and Hiscox Insurance Company Inc., Defendants-Respondents. REVIEW OF DECISION OF THE COURT OF APPEALS Reported at 382 Wis. 2d 270,915 N.W.2d 729 (2018 – unpublished) OPINION FILED: SUBMITTED ON BRIEFS: ORAL ARGUMENT: SOURCE OF APPEAL: COURT: COUNTY: JUDGE: May 31, 2019 February 1, 2019 Circuit Brown Marc A. Hammer JUSTICES: CONCURRED: DISSENTED: NOT PARTICIPATING: A.W. WALSH, J. dissents (opinion filed). ATTORNEYS: For the plaintiff-appellant-petitioner, there were briefs filed by George Burnett and Conway, Olejniczak & Jerry, S.C., Green Bay. There was an oral argument by George Burnett. For Inc., the there defendant-respondent was a brief filed by Hiscox Kris Insurance Bartos, and Company, Jeffrey Leavell, S.C., Racine. There was an oral argument by Jeffrey Leavell. 2019 WI 61 NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 2016AP2334 (L.C. No. 2015CV878) STATE OF WISCONSIN : IN SUPREME COURT Leicht Transfer & Storage Company, Plaintiff-Appellant-Petitioner, v. FILED Pallet Central Enterprises, Inc., Defendant, May 31, 2019 Travelers Property Casualty Company, Acuity, A Mutual Insurance Company and Hiscox Insurance Company Inc., Sheila T. Reiff Clerk of Supreme Court Defendants-Respondents. REVIEW of a decision of the Court of Appeals. ¶1 DANIEL KELLY, J. Affirmed. Pallet Central Enterprises, Inc., ("Pallet Central") forged certain delivery tickets and used them to bill Leicht Transfer & Storage Company ("Leicht") for the sale and delivery of pallets that Pallet Central never sold or delivered. This case followed, and in the piece of it we address today, Leicht sought coverage for its losses under the No. Commercial Insurance Crime Insurance Company, Inc. Policy issued ("Hiscox"). to it 2016AP2334 by Hiscox Specifically, Leicht asserts that the forged delivery tickets comprise "directions to pay" within the meaning of the "Forgery or Alteration" insuring agreement of the Hiscox policy. We disagree, and so we affirm the court of appeals.1 I. ¶2 area. BACKGROUND Leicht provides warehousing services in the Green Bay It uses pallets to assist in the storage and shipment of warehoused items. Between January 2013 and February Leicht purchased pallets from Pallet Central. 2015, The companies followed a standard practice for documenting these transactions for the purpose of inventory control and billing. standard practice involved Pallet Central's Part of that preparation of a delivery ticket describing the shipment, including the type of pallets, the number to be delivered, the delivery date, and the identification delivery shipment. ticket number would of the trailer accompany the conveying truck driver them. making The the Upon delivery, a Leicht employee would verify the shipment and sign the delivery ticket. The truck driver would then return a copy of the delivery ticket to Pallet Central, after which Pallet Central would prepare an invoice package. 1 This is a review of an unpublished per curiam opinion of the court of appeals, Leicht Transfer & Storage Co. v. Pallet Cent. Enter., No. 2016AP2334, unpublished slip op. (Wis. Ct. App. Apr. 25, 2018) (per curiam), which affirmed the Brown County Circuit Court, the Honorable Marc A. Hammer, presiding. 2 No. 2016AP2334 The package comprised an invoice, a copy of the signed delivery ticket, and a voucher.2 Pallet Central would then submit the invoice package to Leicht for payment. invoice delivery only if ticket. the package Leicht contained Leicht would pay the a would then bill copy its of the signed customers for, inter alia, the pallets it used in storing and shipping their goods. ¶3 Eventually, Leicht became aware that the number of invoice packages Pallet Central was submitting had dramatically increased. Leicht's internal investigation revealed that many of the delivery tickets bore the apparent signatures of Leicht employees who could not possibly have executed the documents. Ultimately, Leicht concluded that the signatures were forged, and that it had consequently paid Pallet Central for pallets it never received.3 Leicht says Pallet Central submitted fraudulent invoice packages worth approximately $751,000.00, of which it paid approximately $505,000.00. 2 Leicht did not describe the voucher, and the sole invoice package in the Record contains only an invoice and delivery ticket. Therefore, our analysis does not rely on the nature or content of the voucher. We have included the invoice package as an appendix to our opinion. We assume this invoice package is representative of all invoice packages submitted by Pallet Central to Leicht (aside from the question of forgery and the absence of the voucher). 3 Leicht reported its findings to the DePere Police Department. The investigating officer concluded that Leicht had been the victim of theft by use of fraudulent invoices. Whether the delivery tickets at issue actually were forged is not before us, and we express no opinion on that question. 3 No. ¶4 2016AP2334 Leicht submitted its loss to Hiscox pursuant to the terms of its Commercial Crime Insurance Policy (the "Policy"). The relevant language, found in the "Forgery or Alteration" insuring agreement, states the following: (1) Checks We will pay for loss resulting directly from Forgery or alteration of checks, drafts, promissory notes, convenience checks, HELOC checks, or similar written promises, orders or directions to pay a sum certain in Money that are: (i) Made or drawn by or drawn upon You; or (ii) Made or drawn by one acting as Your agent; or that are purported to have been so made or drawn.[4] (Emphasis added). alleged Hiscox Hiscox denied coverage, and Leicht sued. breached its contract, and asked the It circuit court to declare that the Policy covers its losses from the forged delivery tickets.5 ¶5 Policy's Hiscox moved for summary judgment, arguing that the "Forgery or Alteration" provide coverage because neither "checks" nor any the of insuring forged the agreement delivery other types did tickets of not were documents 4 The Policy emphasizes certain words to indicate they are defined terms. We have omitted the emphasis to avoid a suggestion we are assigning particular importance to those words. 5 Leicht also named two of its other insurers, as well as Pallet Central, as defendants. However, Hiscox is the only defendant currently before the court, and so we do not address claims made against any other party. 4 No. identified by the Policy. 2016AP2334 Hiscox also argued that the forged delivery tickets were not "drawn upon" Leicht, which it said is a prerequisite to coverage. Leicht disagreed. It said the Policy covers the delivery tickets because Pallet Central used them as a means of directing payment. Therefore, it concluded, the Policy covers the delivery tickets as "directions to pay a sum certain in Money."6 ¶6 The circuit court granted Hiscox's motion, concluding that the Policy's "Forgery or Alteration" insuring agreement did not provide coverage. that the including Policy checks, The court of appeals affirmed, explaining "enumerate[s] drafts and specific promissory covered notes, instruments, and 'similar written promises, orders or directions to pay a sum certain' in money" and that "[t]he delivery tickets Leicht relies upon were not written promises, orders or directions to pay 'similar' to the enumerated documents covered under the polic[y]." Leicht Transfer & Storage Co. v. Pallet Cent. Enter., No. 2016AP2334, unpublished slip op., ¶11 (Wis. Ct. App. Apr. 25, 2018) (per curiam). The court of appeals said the forged delivery tickets "were merely evidence of a claim that pallets were delivered by Pallet Central to Leicht." Id., ¶¶12-13. 6 To the extent Leicht previously argued that coverage exists under other portions of the Hiscox policy, those arguments are not before this court and we therefore consider only the coverage question presented. See, e.g., A.O. Smith Corp. v. Allstate Ins. Cos., 222 Wis. 2d 475, 491, 588 N.W.2d 285 (Ct. App. 1998) ("[A]n issue raised in the trial court, but not raised on appeal, is deemed abandoned."). 5 No. ¶7 Leicht's petition coverage of Policy's for "similar review written 2016AP2334 asserted promises, that the orders or directions to pay a sum certain" is a "recipe for ambiguity" because "[n]othing in the policy alerts the policyholder how or why other forged documents might be similar." We granted Leicht's petition and now hold that the Policy does not afford the coverage Leicht seeks because Pallet Central's delivery tickets are not "written . . . directions to pay a sum certain in Money." II. STANDARD OF REVIEW 6 No. ¶8 judgment We review de novo, courts apply. the disposition applying the of same a 2016AP2334 motion for summary methodology the circuit Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315, 401 N.W.2d 816 (1987). While our review is independent from the circuit court and court of appeals, we benefit from their analyses. See Preisler v. Gen. Cas. WI 135, ¶16, 360 Wis. 2d 129, 857 N.W.2d 136. Ins. Co., 2014 Summary judgment is appropriate only "if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that judgment as a matter of law." the moving party is entitled to Wis. Stat. § 802.08(2) (2017-18); see also Columbia Propane, L.P. v. Wis. Gas Co., 2003 WI 38, ¶11, 261 Wis. 2d 70, 661 N.W.2d 776 (quoting and applying Wis. Stat. § 802.08(2) (2001-02)). ¶9 The interpretation of an insurance policy presents a question of law. Water Well Sols. Serv. Grp. Inc. v. Consol. Ins. Co., 2016 WI 54, ¶12, 369 Wis. 2d 607, 881 N.W.2d 285. review such questions de novo. III. ¶10 We Id. ANALYSIS The Policy contains three relevant requirements that Leicht must satisfy before it is entitled to coverage for its losses. the First, it must demonstrate that a "delivery ticket" is type agreement. of document encompassed by the Policy's insuring Second, it must show that the delivery tickets were "[m]ade or drawn by or drawn upon [Leicht]; or [m]ade or drawn 7 No. 2016AP2334 by one acting as [Leicht's] agent; or that are purported to have been so made or drawn." And third, it must establish that the payments it made to Pallet Central constitute a "loss resulting directly" from the forgery. To evaluate these requirements, we must discern the meaning of the Policy's insuring agreement, and how its terms apply to the facts of this case. ¶11 Our goal in interpreting and applying an insurance policy's terms is the same as it is in addressing any other contract: parties." To "effectuate the intent of the contracting Estate of Sustache v. Am. Family Mut. Ins. Co., 2008 WI 87, ¶19, 311 Wis. 2d 548, 751 N.W.2d 845 (citations omitted). In doing so, we construe insurance contracts "as they would be understood by a reasonable person in the position of the insured[,]" yet we will "not interpret insurance policies to provide coverage for risks that the insurer did not contemplate or underwrite and for which it has not received a premium." Am. Family Mut. Ins. Co. v. Am. Girl, Inc., 2004 WI 2, ¶23, 268 Wis. 2d 16, interpret 673 N.W.2d 65 undefined (citations words and omitted). phrases as We they will would be understood by a reasonable insured, Bethke v. Auto-Owners Ins. Co., 2013 WI 16, ¶22, 345 Wis. 2d 533, 825 N.W.2d 482, and "[w]e give undefined meaning." Wis. 2d 571, words and phrases their common and ordinary Day v. Allstate Indem. Co., 2011 WI 24, ¶28, 332 798 N.W.2d 199. "If the undefined language is ambiguous, we will construe it in favor of the insured to afford coverage." Bethke, 345 Wis. 2d 533, ¶22. 8 A term or phrase is No. 2016AP2334 ambiguous only if it is "'fairly susceptible to more than one reasonable interpretation.'" Wilson Mut. Ins. Co. v. Falk, 2014 WI 136, ¶24, 360 Wis. 2d 67, 857 N.W.2d 156 (citation omitted). ¶12 We begin our analysis with Leicht's position that "delivery tickets," when combined with corresponding invoices, are included in the type of documents the Policy covers. insuring agreement describes covered documents as The "checks, drafts, promissory notes, convenience checks, HELOC checks, or similar written promises, certain in Money." orders or directions to pay a sum Because Leicht says the delivery tickets are covered as "directions to pay a sum certain in Money," this part of the inquiry actually involves two steps. First, we must determine whether a delivery ticket is, in fact, a direction to pay a sum certain in money (alone or in conjunction with an invoice). "similar" If to it is, "checks, then we drafts, checks, [or] HELOC checks." must consider promissory whether notes, it is convenience It is a covered document only if it meets both criteria. ¶13 Neither party has suggested the phrase "directions to pay a sum certain in Money" is ambiguous. And as the following analysis will demonstrate, we espy no ambiguity in it either. Therefore, we "interpret the policy according to its plain and ordinary meaning to avoid imposing contract obligations that the parties did not undertake." Frost ex rel. Anderson v. Whitbeck, 2002 WI 129, ¶17, 257 Wis. 2d 80, 654 N.W.2d 225. The plain and ordinary meaning of the phrase unmistakably indicates that, by 9 No. 2016AP2334 themselves, the delivery tickets are not "directions to pay a sum certain in Money." The documents' most obvious defect in this regard is that they contain no directions to pay. They are, instead, simple statements that Pallet Central delivered a certain type and number of pallets on a particular day. To the extent the delivery tickets contain any directions at all, they are as follows: [Leicht] [m]ust notify us of any quantity disputes and/or quality matters within 72 hours of delivery or credit will not be issued. Please use our tickets for DELIVERIES and PLEASE make three (3) copies, one for you, one for the customer and one for the driver. Have the driver fill out the ticket (truck #, trailer # and driver signature). Then PLEASE fax the filled out ticket back to me at [###-###-####]. With respect to payment, they are entirely inert, and contain no motive force whatsoever by which to direct anyone to pay lack any anything. ¶14 The delivery tickets reference to a "sum certain." also conspicuously In fact, they do not reference an amount due, or even a calculation by which one may arrive at an amount due. Indeed, they say nothing about currency, payment, or anything else one might associate with money, much less a "sum certain." Leicht conceded this point at oral argument, and further admitted it would not have paid Pallet Central if it had presented nothing but a delivery ticket. The unavoidable conclusion, therefore, is that a delivery ticket——by itself——is not a direction to pay a sum certain in money. 10 No. ¶15 2016AP2334 Nor does a delivery ticket become a direction to pay when bundled with a corresponding invoice. Leicht acknowledged that an invoice is a request for payment, not a direction to pay. So if the delivery ticket becomes a direction to pay when attached to an invoice, the combination must be capable of making the invoice package greater than the sum of its parts. But Leicht did not explain how combining the two would turn one of them (or both) into a direction to pay a sum certain in money. The best it could offer was this: ticket Pallet Central could not be paid. "Without the signed Indeed, that is why Pallet Central forged those tickets in the first place." That is likely so, and we accept Leicht's reasoning for the purpose of this analysis. argument. Pallet But it cannot carry the weight of its Leicht's explanation describes a document evidencing Central's payment. satisfaction Just because the of a signed condition delivery precedent ticket to is a prerequisite to payment, however, does not transform it (or the combined documents) into a direction to pay a sum certain in money. The delivery ticket does not affect the invoice's nature (it is still a request), and the invoice does not create terms in the delivery ticket that were not there before (it still directs no payment, much less a sum certain). documents retain the separately: A Consequently, the same request for delivery characteristics payment, and ticket——whether 11 that proof taken Combined, the defined of on them delivery. its own No. 2016AP2334 terms or in conjunction with an invoice——is not a direction to pay a sum certain in money. ¶16 full. That, however, does not address Leicht's position in A close examination of its arguments reveals that Leicht did not explicitly claim that a delivery ticket is a direction to pay. Instead, it said "the delivery ticket[s] represented a direction to pay," and that "the parties used these delivery tickets to direct payment from Leicht's finance department," and that the "tickets served bursar to pay Pallet as a written Central's direction to invoices." That Leicht's is to say, Leicht asserts that delivery tickets function as a direction to pay. ¶17 And The distinction is subtle, but no less real for that. that distinction helps illustrate why coverage for the forged delivery tickets. there can be no It is a commonplace that what something "is" can differ from the function to which it is put. An object might be a chair, and at times function as a very short ladder. ladder. But that does not mean the chair is a And if an insurance policy insures only against the loss of ladders, the chair owner will be disappointed. the Policy applies certain in Money." to forgery of "directions to pay Here, a sum As discussed above, the delivery tickets are unquestionably not that. Therefore, there can be no coverage unless the Policy applies to writings that are not "directions to pay," but which are nonetheless used for that purpose. We see to nothing in the Policy, however, 12 that grants coverage No. documents not covered by its terms, but which are 2016AP2334 used as functional proxies for documents that are covered by its terms. So when Leicht says "the delivery tickets functioned as a direction to make payment, just as the policies required," it is mistaken. The Policy required a direction to pay, not a stand- in for a direction to pay.7 * 7 For a similar reason, the dissent's analysis cannot reach Leicht's preferred end. The author says: "Examining the policy language in light of the parties' habitual practice, and consistent with this court's precedent, I arrive at the opposite conclusion." Dissent, ¶22. The insurance policy, of course, does not insure against loss caused by "Forgery or alteration" of Leicht and Pallet Central's "habitual practice." It insures against loss from "Forgery or alteration" of specifically described documents, of which a delivery ticket is not one. The key explanation the dissent offers for its contrary conclusion is this: "[I]f it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck." This test suggests that something can be identified by its habitual characteristics, i.e. how it routinely functions. Id., ¶34. The point of the "duck" exercise is not to equate two things that are not the same. It is to identify what something really is. That is, one does not build an animatronic duck, set it afloat in a puddle with a quack soundtrack, and conclude it is an actual member of the Anatidae family. But that is what the dissent proposes here. Leicht and Pallet Central may have a private understanding that they will act as though the delivery ticket is a direction to pay a sum certain. But that does not mean we (and Hiscox) must conclude it is such a document any more than an ornithologist must conclude the floating fabrication actually is a duck. 13 No. ¶18 or in If we had concluded that the delivery tickets, alone conjunction "directions whether 2016AP2334 to the "directions with pay," we Policy's to corresponding then would insuring pay" that identified documents (i.e., invoices, have needed agreement are similar checks, constituted to covered to the consider only specifically drafts, promissory convenience checks, or HELOC checks). those notes, We also would have needed to determine whether they had been "[m]ade or drawn by or drawn upon" Leicht, or were "[m]ade or drawn by one acting as [Leicht's] agent; or that [were] purported to have been so made or drawn." whether And the finally, payments we induced would by have the needed forged to determine delivery comprised losses "resulting directly from" the forgery. tickets But all of these issues are contingent on having discerned a "direction to pay" in the forged delivery tickets. Because we did not, we have no need to examine these additional issues. Am. Girl, Inc., 268 Wis. 2d 16, ¶24 ("If it is clear that the policy was not intended to cover the claim asserted, the analysis ends there."). The Policy's insuring agreement does not encompass the forged delivery tickets, and we may not add coverage for which the parties did not bargain. Id., ¶23 (citations omitted) ("[W]e do not interpret insurance policies to provide coverage for risks that the insurer did not contemplate or underwrite and for which it has not received a premium."). Leicht's quest for coverage must end. IV. CONCLUSION 14 Consequently, No. ¶19 2016AP2334 We conclude that the Policy unambiguously demonstrates that the delivery tickets at issue in this case, either alone or in combination with corresponding invoices, do not qualify as "written . . . directions to pay a sum certain in Money." Further, we conclude that the Policy does not provide coverage for forged documents that are not themselves "directions pay," but which are used as proxies for such documents. judgment for Hiscox was, therefore, appropriate. to Summary We affirm the court of appeals. By the Court.—The decision affirmed. 15 of the court of appeals is No. 1 2016AP2334 No. 2 2016AP2334 No. ¶20 after ANN WALSH BRADLEY, J. Pallet Central This case arose (dissenting). Enterprises, Inc. 2016AP2334.awb submitted fraudulent invoices to Leicht Transfer & Storage Company for nonexistent pallets that were never delivered. Majority op., ¶3. Leicht purchased a crime insurance policy to protect itself against precisely this type of fraudulent activity. Nevertheless, the majority denies coverage, sticking Leicht with a half million dollar bill for losses that resulted from Pallet Central Enterprises, Inc.'s fraudulent scheme. ¶21 The disregarding majority long-held interpretation——which established can that an reach principles we call insurance its conclusion of by insurance policy It firmly precedent. policy's only terms is are to be interpreted as they would be understood from the perspective of a reasonable person in the position of the insured. Shugarts v. Mohr, 2018 WI 27, ¶20, 380 Wis. 2d 512, 909 N.W.2d 402 (citation omitted). Likewise, it is well-settled that ambiguity in an insurance policy is construed in favor of an insured seeking coverage. Olson v. Farrar, 2012 WI 3, ¶42, 338 Wis. 2d 215, 809 N.W.2d 1 (citation omitted). ¶22 Casting these principles aside, the majority determines that Leicht is not entitled to insurance coverage for losses incurred due to the fraudulent actions of Pallet Central. Examining the policy language in light of the parties' habitual practice, and consistent with this court's precedent, I arrive at the opposite conclusion. ¶23 Accordingly, I respectfully dissent. 1 No. 2016AP2334.awb I ¶24 For a period of over two years, Leicht pallets for its warehouse from Pallet Central. ¶2. As Central the majority "followed a accurately standard details, practice Majority op., Leicht for purchased and Pallet documenting these transactions for the purpose of inventory control and billing." Id. ¶25 Pursuant to this practice, each time Pallet Central made a delivery of pallets, it would give to Leicht a delivery ticket. Id. The delivery ticket described the shipment of pallets, identified the number of pallets delivered, specified the delivery date, and provided the identification number of the trailer on which the pallets arrived. Id. A Leicht employee would then sign the delivery ticket, indicating the pallets had been received. ¶26 Central signed Id. After would for delivery prepare delivery Central the ticket. the an ticket invoice Id. delivery, had package Leicht but only accompanied by a signed delivery ticket. ¶27 invoices been signed, that would if Pallet included then the pay the Pallet invoice was Id. When it came to light that Pallet Central submitted to Leicht for nonexistent delivered, an investigation ensued. pallets that were never It revealed that Leicht employees' signatures on the delivery tickets had been forged. Id., ¶3. This caused Leicht to suffer a loss of approximately $505,000 from paying the fraudulent invoices. 2 Id. ¶28 No. 2016AP2334.awb Leicht carried a crime insurance policy. As relevant here, the policy provides: (1) Checks We will pay for loss resulting directly from Forgery or alteration of checks, drafts, promissory notes, convenience checks, HELOC checks, or similar written promises, orders or directions to pay a sum certain in Money that are: (i) Made or drawn by or drawn upon You; or (ii) Made or drawn by one acting as Your agent; or that are purported to have been so made or drawn. ¶29 The majority determines that Leicht is not entitled to coverage under this provision of the policy. a "delivery ticket——whether taken on It concludes that its own terms or in conjunction with an invoice——is not a direction to pay a sum certain in money." the delivery Majority op., ¶15. ticket contains reference to a sum certain. coverage does not attach no In the majority's view, direction Id., ¶14. to a to pay and no Further, it opines that signed delivery ticket that functions as a direction to pay, but is not itself a direction to pay. Id., ¶¶16-17. II ¶30 As I see it, the language of the policy creates several conditions that the signed delivery ticket at issue in this case must fulfill in order for coverage to attach. First, the signed delivery ticket must be a written promise, order or direction to pay a sum certain in money. Second, it must be similar to a check, draft, promissory note, convenience check, 3 No. or HELOC checks. 2016AP2334.awb Finally, as provided in the crime insurance policy, the signed delivery ticket must be "[m]ade or drawn by or drawn upon [Leicht], [m]ade or drawn by one acting as [Leicht's] agent; or [was] purported to have been so made or drawn."1 A ¶31 as I address first whether a signed delivery ticket is, interpreted by reasonable person in the position of the insured, a "direction to pay" a sum certain in money. ¶32 It is imperative that our review of the language of an insurance policy be through the lens of a reasonable insured. Shugarts, 380 Wis. 2d 512, ¶20. The insured, Leicht, was engaged in a repeated and specific process by which payment was directed by the submission of certain documents, namely a signed delivery ticket and invoice. ¶33 Given the habitual practice the parties followed in their transactions, a reasonable insured in Leicht's position would understand "direction to that pay." a Indeed, unsigned delivery ticket ticket that would be signed delivery the ticket record reflects would not be paid, paid. Accompanying serves a as that a an unlike a signed signed delivery ticket is an invoice containing a sum certain for payment. The parties' habitual routine was that this package of documents would direct that payment be made. 1 Because it determines that a signed delivery ticket is not a direction to pay a sum certain in money, the majority does not address the second and third issues I raise. 4 No. ¶34 2016AP2334.awb The majority departs from the language as viewed by a reasonable insured engaging in the habitual practice of these parties. Simply put, its technical and theoretical distinction between what a signed delivery ticket "is" and its "function" not only discards interpretation, but our it precedent also majority op., ¶¶16-17. fails on an insurance elementary policy test. See Namely, "if it looks like a duck, swims like a duck, and quacks like a duck, then it probably is a duck." This test suggests that something can be identified by its habitual characteristics, i.e. how it routinely functions. ¶35 parties The bottom line is that the habitual practice of the payment. established that a signed delivery ticket directed It is from this perspective that we must examine the policy's language. Viewing the parties' habitual practice from Leicht's view, point of I determine that a signed delivery ticket fulfills the policy's requirement of a "direction to pay" a sum certain in money. B ¶36 I turn next to address whether a signed delivery ticket is "similar" to the instruments listed in the policy: checks, drafts, promissory notes, convenience checks, or HELOC checks. ¶37 In addressing this question, insurance policy interpretation ambiguous terms must be construed in against the drafter. must be another considered. favor of maxim of Namely, coverage, and Olson, 338 Wis. 2d 215, ¶42; see Maryland 5 No. 2016AP2334.awb Arms Ltd. P'ship v. Connell, 2010 WI 64, ¶44, 326 Wis. 2d 300, 786 N.W.2d 15 (citation omitted). ¶38 The policy uses the term "similar." Inherent in the term "similar" is a certain amount of ambiguity. question, how similar is similar enough? It begs the The text of the policy provides no guidance. ¶39 As Leicht aptly argued in its brief, "[n]o policyholder can know with certainty what documents are similar to a check, to a draft, or to a promissory note, and conversely, no policyholder can surmise what written 'promises, orders, or directions for payment' are too dissimilar for coverage to apply." ¶40 I agree with Leicht. As analyzed above, a reasonable insured would believe that a signed delivery ticket "directs payment" within the language of the policy. But under the language of this policy, a policyholder is left guessing whether such a "direction to pay" is covered if it is not explicitly listed. Construing the ambiguity in favor of coverage, as our precedent requires, I determine that a signed delivery ticket fulfills the policy's "similarity" requirement. C ¶41 The next inquiry raised by the policy language is whether the signed delivery ticket is "[m]ade or drawn by or drawn upon [Leicht], [m]ade or drawn by one acting as [Leicht's] agent; or [was] purported to have been so made or drawn." 6 No. ¶42 2016AP2334.awb Leicht alleges that the signatures of Leicht employees on delivery tickets were forged. That is, the signatures were "purported to have been" made by Leicht employees. ¶43 Further, the forged signatures were purportedly made by Leicht employees acting as Leicht's agents. "Agent" is not a defined term in the policy, meaning that we interpret it as it would be understood by a reasonable insured. 2008 WI 62, ¶13, 310 Wis. 2d 197, 750 Acuity v. Bagadia, N.W.2d 817 (citation omitted). ¶44 An employee acting on behalf of an employer is the employer's agent. See Romero v. West Bend Mut. Ins. Co., 2016 WI 371 App 59, omitted). ¶39, Wis. 2d 478, 885 N.W.2d 591 (citation By forging signatures on delivery tickets, Pallet Central employees purported to be acting as Leicht employees, thereby confirming receipt of pallets that were never delivered and directing Leicht to pay for them. ¶45 In sum, properly examining the policy as would a reasonable person in the position of the insured, I conclude that all conditions for coverage are fulfilled. forged signed delivery ticket is a similar Specifically, a written promise, order or direction to pay a sum certain that was purported to have been made by Leicht's agent. ¶46 Accordingly, I respectfully dissent. 7 No. 1 2016AP2334.awb
Primary Holding
The Supreme Court affirmed the judgment of the court of appeals affirming the decision of the circuit court granting summary judgment in favor of Hiscox Insurance Company on Leicht Transfer & Storage Company's complaint seeking coverage for its losses under a commercial crime insurance policy issued to it by Hiscox, holding that Leicht's losses were not covered under the policy.

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