Overview
A fire damaged part of an Eau Claire apartment building. Months later the city ordered it razed. The insurer paid for the portion physically damaged by fire, smoke, and water and refused the rest, invoking an exclusion for loss caused by enforcement of an ordinance requiring the tearing down of property. The court of appeals affirmed.1
D.M.B. says Wisconsin answered this in the 1970s: when a covered fire makes a building unreasonable to repair and a municipality orders it down, the fire caused the loss. Germantown says those cases construed the valued policy law, since narrowed to owner-occupied dwellings, and that the anti-concurrent-cause language forecloses the causation argument by its terms.2
What You Should Know
Four things to carry into the decision
- This is a contract case wearing a doctrine costume. The exclusion bars loss caused directly or indirectly by an ordinance requiring tear-down, regardless of any other cause or event that contributes concurrently or in any sequence. A raze order is the paradigm case.3
- The 1970s cases are load-bearing and the legislature cut the ground from under them. Gambrell and Gimbels construed the valued policy law when it reached all real property; it was narrowed in 1979 to owner-occupied dwellings.2
- Germantown’s theory requires accepting that one fire produces two losses, divided at the moment an inspector exercises discretion. Counsel embraced it.
- The bench was unpersuaded by ambiguity and uncomfortable with the result. Those are not the same thing, and the gap between them is where this case is decided.
One Fire, or Two Losses?
Both sides agree a covered fire started it. They disagree about what the raze order did.
The fire caused the loss
When a covered fire renders a building unsafe and unreasonable to repair and the municipality prohibits repairs and orders demolition, the fire caused the loss. Gambrell said no act of municipal authorities caused the loss; the municipality merely recognized that the loss was already complete.
The ordinance caused the rest
The exclusion bars loss caused directly or indirectly by enforcement of a tear-down ordinance, and the anti-concurrent-cause sentence excludes such loss regardless of any other cause contributing concurrently or in any sequence. The 1970s cases construed a statute since narrowed to owner-occupied dwellings.
What Happened
D.M.B. owned an occupied, revenue-generating apartment building in Eau Claire. Click any step for detail.
The fire
A fire damaged part of the building.
The building stands through harsh weather
It stood roughly four months before the city issued a raze order.
Unchallenged — and dispositive
Nobody challenged the order: D.M.B. was barred from obtaining a repair permit, and Germantown’s coverage position does not depend on the order’s reasonableness, the only issue at such a hearing.
Paid for the physical damage only
Germantown paid for the portion physically damaged by fire, smoke, and water — an initial figure a little over $300,000, later supplemented.
Two numbers
An appraisal panel produced the cost attributable to physical damage and, at the circuit court’s direction, the cost of the whole loss: roughly $1 million to rebuild. The building was insured for something over $600,000, which is why D.M.B. says it is entitled to policy limits — not because of any statute, but because the appraisal established the building was underinsured.4
Eau Claire County rules for Germantown
The Eau Claire County Circuit Court (Long, J.) ruled for the insurer.
Court of appeals affirms
District III held the exclusion unambiguous and distinguished Gambrell and Gimbels as valued-policy-law cases inapplicable to a building the insured did not occupy as a dwelling.1
Legal Background
Two bodies of law meet here, and the parties disagree about whether they were ever separate. The first is the valued policy law, Wis. Stat. § 632.05(2), which provides that when property owned and occupied by the insured primarily as a dwelling is wholly destroyed, the insurer must pay policy limits. Administrative interpretation treats a building subject to a raze order as wholly destroyed.
The second is the constructive total loss doctrine drawn from Gambrell and Gimbels. Gambrell contains the sentence D.M.B. built its argument on: no act of municipal authorities caused the loss; rather, the municipality’s action merely recognized that under legislatively sanctioned standards the loss was complete. D.M.B. reads that as a causation holding of general application. Germantown reads it as a device for fitting a partial physical loss into the statute’s binary, with no existence outside it.2
The third element is the policy, and it is the one the bench kept returning to. The Ordinance or Law exclusion bars loss caused directly or indirectly by enforcement of any ordinance requiring the tearing down of property, including debris removal. The anti-concurrent-cause sentence then excludes such loss regardless of any other cause contributing concurrently or in any sequence.3
Wisconsin construes exclusions narrowly and resolves ambiguities against the insurer. Germantown bears the burden on the exclusion, and conceded as much.
Key Exchanges
Summarized from the argument rather than quoted. Speakers are identified as the argument record identifies them.
Framed causation as a single chain: when a covered fire renders a building unsafe and unreasonable to repair and the municipality prohibits repairs and orders demolition, what caused the insured’s loss is the fire.
Drew the distinction the insurer’s reading depends on: destruction by fire is a necessary condition for coverage, but being subject to the raze order is a sufficient condition for the exclusion.
Pressed the consequence: had the fire department been less effective and the building burned to the ground, the insured would recover policy limits — and because the department saved part of the building, it does not. Counsel called that result unreasonable.
Zoom In
D.M.B. lost the ambiguity argument at the podium. Asked whether an exclusion for loss caused directly or indirectly by enforcement of a tear-down ordinance is ambiguous as applied to a raze order, counsel said yes and could not explain why; a justice answered that it is broad but not ambiguous.
The rule of construction against insurers operates only on ambiguity. Without it, D.M.B. needs the 1970s cases to state a rule of law that overrides policy language.
That lift got heavier when counsel conceded the statutory history. A justice put it plainly: the court there tied the public policy to the statute, and the legislature has since changed the statute.
On its reading, identical physical damage produces different coverage depending on whether a municipal official exercises discretion. Asked whether a building burned to a shell with no raze order would be covered in full, counsel said yes; asked whether the same building with a raze order would not, counsel said that is right.
Counsel then agreed that “contributes” means the fire-damage component is still owed. That concession makes this a case about how much rather than whether.
Anti-concurrent-cause language exists precisely to defeat the argument that a covered peril in the causal chain pulls an excluded consequence into coverage.
D.M.B.’s appeal to what other courts have done is weaker than it sounds, because many of those cases lack such provisions or turn on the grant of coverage rather than an exclusion.
What’s Next
Four things to watch in the opinion.
Anti-concurrent-cause, or constructive total loss?
If the clause is dispositive, Wisconsin commercial property owners take the raze-order risk unless they buy the endorsement, and the 1970s cases are confined to the valued policy law. That is the likeliest outcome based on the argument.
Are Gambrell and Gimbels statutory decisions?
An express statement would settle a question insurers and policyholder counsel have litigated for years. Germantown asked for exactly that.
The burden on exclusions
If plain language alone carries the insurer’s burden, the holding will be cited well beyond ordinance exclusions.
A dissent on the reasonable-insured question
The insured who suffers a worse fire recovers more, and the insured whose fire department performs well recovers less. That is coherent under the contract and unattractive in a paragraph — the natural subject of a separate writing.
Watch finally for an invitation to the Office of the Commissioner of Insurance or the legislature; D.M.B.’s counsel supplied the drafting fix on the record.
Endnotes & Authorities · 4 citations
- D.M.B., LLC v. Germantown Mutual Insurance Co., No. 2023AP1717 (Ct. App. Apr. 22, 2025) (unpublished) (Gill, J., joined by Stark, P.J., and Hruz, J.), affirming the Eau Claire County Circuit Court (Long, J.), No. 2020CV323. Review granted April 22, 2026; argued September 23, 2026. Issue presented: whether the ordinance or law exclusion excludes coverage for D.M.B.’s constructive total loss.
- Wis. Stat. § 632.05(2) (valued policy law); Gambrell v. Campbellsport Mutual Insurance Co., 47 Wis. 2d 483, 177 N.W.2d 313 (1970); Gimbels Midwest, Inc. v. Northwestern National Insurance Co., 72 Wis. 2d 84, 240 N.W.2d 140 (1976). Counsel represented that the valued policy law was repealed in 1975 and reenacted in 1979 limited to owner-occupied dwellings; the history note to § 632.05 reads “1975 c. 375; 1979 c. 73, 177; 2001 a. 65,” which corroborates that account.
- Ordinance or Law exclusion and anti-concurrent-cause sentence, as described at argument.
- Figures are as stated at argument and are approximate; the exact appraisal figures and policy limits are in the record. Counsel are identified by party because the argument record does not state the name of Germantown’s arguing attorney.