No Exceptions: Wisconsin Supreme Court Upholds Four Corners Rule

The Wisconsin Supreme Court eliminates any doubt that there is no exception to the four-corners rule in duty to defend cases in Wisconsin.

In a split decision, the Wisconsin Supreme Court in Water Well Solutions Service Group, Inc. v. Consolidated Ins. Co., 2015 WI 54, 369 Wis.2d 607, 881 N.W.2d 285 (2016), reaffirmed the “four-corners” rule governing a liability insurer’s duty to defend in Wisconsin.

The Court unambiguously reaffirmed the rule and confirmed in the majority opinion that there were no exceptions to the rule that would permit extrinsic evidence to create a duty to defend where no duty to defend otherwise existed.

According to the majority’s view, the four-corners rule promoted certainty and avoided speculation over the underlying plaintiff’s true allegation.

A vigorous dissent by two Justices challenged the majority opinion both in principle and application. The dissent noted that Wisconsin was in a shrinking minority of jurisdictions clinging to a strict application of the four-corners rule and that Wisconsinites would be better served by a rule that recognized substance over form in allowing extrinsic evidence to inform the duty to defend decision.