Author: Hamilton

Court of Appeals Decision: West Bend Mutual Insurance Co. v. Calumet Equity Mutual Insurance Co. (Coverage for Domestic Duties)

Posted on by Hamilton

In West Bend Mutual Insurance Co. v. Calumet Equity Mutual Insurance Co. (2018AP435), the Court of Appeals District II held that farming work is not a “domestic duty” covered by an insurance policy.

The case arises from an accident where plaintiff David Schaefer’s cows escaped and caused a collision on a nearby road. West Bend insured the person injured in the crash and recovered $114,000 from Schaefer. Calumet insured the property where Schaefer raised his cattle. In the instant case, West Bend and Schaefer sought $114,000 from Calumet, arguing Schaefer was an insured under the Calumet policy.

The Calumet policy, in part, defined “insured” as “persons in the course of performing domestic duties that relate to the ‘insured premises.’” The court ruled that Schaefer was not an insured under the Calumet policy because maintaining his cattle was not a “domestic duty” under the policy. Farming is not related to the management of a private place of residence, so Schaefer’s duties related to the cattle do not fall under “domestic duties” as defined by previous courts. The court declined to expand the term “domestic duties” to include any activity occurring on the insured premises.

Court of Appeals Decision: Turner v. Bounce Back, LLC (Personal Injury)

Posted on by Hamilton

In Turner v. Bounce Back, LLC (2018AP352), the Court of Appeals District III affirmed that the manufacturer of an inflatable air bag was not liable for injuries sustained when Colin Turner jumped onto it.

Fifty-eight-year-old Turner was injured at a Chippewa Valley music festival when he jumped from a platform onto the airbag, attempting to do a flip and landing on his head. Turner’s blood alcohol content at the time was nearly 40 percent above the legal limit. Turner sued US Airbag, which designed, owned and operated the airbag; N-Flatables, which sewed the airbag; and Chippewa Valley Musical Festival, which was hosting the event.

At the circuit court trial, a jury found that US Airbag was negligent in that the airbag was defective and unreasonably dangerous, but its negligence was not causal. Instead, the jury found Turner’s negligence caused his injuries and accordingly awarded him zero damages. The jury decided N-Flatables was not a manufacturer of the airbag since it only sewed the design created by US Airbag; therefore, N-Flatables could not be held negligent. The jury also declined to find Chippewa Valley negligent.

Turner appealed the circuit court decision, arguing:

  • The jury’s verdict was perverse because it did not find US Airbag causally negligent, it did not rule N-Flatables a manufacturer of the airbag, and it did not award damages to Turner. The appeals court found there was credible evidence to support the jury’s decisions on each of these issues.
  • The circuit court gave improper jury instructions by not defining the term “manufacturer,” giving repetitious instructions regarding Turner’s contributory negligence, and improperly instructing on how/whether to award damages. The court rejected Turner’s arguments because he did not raise them timely and because the instructions were based on statute.
  • The circuit court should have ordered a default judgment or mistrial because of a discovery violation and other errors by the defendants. The appeals court said the circuit court properly dealt with these violations without the need to declare a mistrial.

Overall, the appeals court declined to award Turner a new trial and upheld the jury’s verdicts.

Court of Appeals Decision: John Soletski v. Krueger International, Inc. (Statute of Repose/Independent Contractor Rule)

Posted on by Hamilton

In John Soletski v. Krueger International, Inc. (2017AP2063), the Court of Appeals District III held that Krueger was not liable for an injury to an independent contractor operating its scissor lift. The court held the plaintiff’s negligence claims were barred under the statute of repose and the rule of employer immunity for independent contractors. Furthermore, the court held that the right to recover costs is not forfeited if costs are filed timely, but the court does not timely resolve objections.

Krueger hired Spectrum Maintenance Services to clean its furniture production facility and allowed Spectrum to use its scissor lift. Two Spectrum employees accidentally drove the lift onto an unmarked ramp, where it tipped over, injuring plaintiff Soletski. Soletski sued Krueger for negligence and violation of Wisconsin’s safe place statute (Wis. Stat. § 101.11).

The court held that the builder’s statute of repose (Wis. Stat. § 893.89) barred Soletski’s safe place claims. (Note WCJC reduced the exposure period in the statute of repose from ten to seven years in 2017 Act 235.) Under the safe place statute, building owners may be held liable for 1) defects inherent in the construction of the building or 2) defects constructed safely but that become unsafe due to improper maintenance. The statute of repose applies only to inherent structural defects. In this case, the court ruled that the ramp was an inherent structural defect because there was no evidence Krueger had improperly maintained the ramp. Therefore, the statute of repose applied and barred Soletski’s safe place claim.

The court further held that Soletski’s claims were barred by the rule that employers are generally not liable for independent contractors’ injuries. The court rejected Soletski’s argument that his case was an exception because Krueger committed an affirmative act of negligence. The court said any potential negligence on Krueger’s part (i.e. failure to warn the Spectrum employees about the ramp) were not affirmative acts, so the exception did not apply.

Finally, the court ruled that Krueger was entitled to costs because it did file its bill of costs within 30 days in accordance with Wis. Stat. § 806.06(4). The court rejected Soletski’s argument that, because of the circuit court clerk’s failure to resolve the objections to the bill of costs within the 30 day period, Krueger violated the time limit.

Court of Appeals Decision: Danielle Jackson v. Diane Burczyk (Governmental Immunity)

Posted on by Hamilton

In Danielle Jackson v. Diane Burczyk (2018AP65), the Court of Appeals District II held that governmental immunity applied to correctional facility employees when a kettle tipped, spilling boiling water that injured Danielle Jackson, who was a cook at the facility.

Jackson argued that exceptions to governmental immunity applied in her case. The first exception states that government employees may be held liable if they fail to perform a ministerial duty. The court determined that fixing the kettles was a discretionary duty, so the first exception did not apply.

The second exception states that government employees may be held liable if they fail to respond to a known, present, and compelling danger. Although employees knew the kettles needed to be repaired, the court determined that the danger of tipping kettles was not so immediate that the second exception would apply.

In a dissent, Judge Reilly argued that the second exception for known and present danger does apply. Reilly further questioned whether the majority would have reached the same decision had Jackson not been a prisoner at the facility.

Court of Appeals Decision: Town of Forest v. PSC (Wind Farm Application)

Posted on by Hamilton

In Town of Forest v. PSC (2018AP367), the Court of Appeals District III declined on the grounds of claim preclusion Forest’s petition for judicial review of the Public Service Commission’s (PSC) final approval of a wind farm application. The court also declined to hold PSC in contempt of court following a previous circuit court order.

The issue arose when PSC approved Highland Wind Farm, LLC’s application to construct a wind energy facility partly located in Forest. The approved application included provisions that:

  1. Highland need only comply with noise limits in Wis. Amin. Code ch. PSC 128 95 percent of the time.
  2. Highland would obligate itself to a lower nighttime noise limit for six residences in the area with sensitivities to sound.
  3. Highland would implement a curtailment plan to reduce noise from the wind farm to levels below limits in PSC 128.

The Town of Forest petitioned for judicial review of the approved application. The reviewing circuit court ordered PSC to 1) hold a hearing on adopting a percentage compliance standard for noise limits in PSC 128; and 2) explain why it chose a lower nighttime noise limit for those six specific residences and determine whether to apply it to any other residences. The circuit court approved the curtailment plan.

In response to the circuit court order, PSC eliminated the 95 percent compliance provision altogether and declined to hold a hearing. PSC also eliminated the lower nighttime noise limits for any residences. With these amendments, PSC issued a final decision.

In the instant case, the Town of Forest sought to hold PSC in contempt of court for failing to comply with the circuit court orders and sought judicial review of the final PSC decision. The Court of Appeals District III held that PSC was not in contempt of court. Although PSC did not hold a hearing on the percent compliance provision nor did it explore extending the lower nighttime noise limit, PSC complied with the intent of the court order by altogether removing these two provisions that were not supported by substantial evidence and facts. On the question of judicial review, the appeals court declined the town’s petition on the grounds of claim preclusion. The court stated the town should have raised its argument that the curtailment plan is not allowed under PSC 128 in the judicial review of the first PSC application approval.

Court of Appeals Decision: Jacqueline Wise v. LIRC (Worker’s Compensation)

Posted on by Hamilton

In Jacqueline Wise v. LIRC (2017AP2191), the Court of Appeals District II overturned an LIRC decision denying worker’s compensation for procedures related to the patient’s pre-existing condition.

Jacqueline Wise slipped and fell on ice in the parking lot of her workplace, causing pain in her hips that prevented her from working at the caregiving facility. Wise attempted to return to work at several points, but the pain persisted. Eventually, she underwent a left hip replacement. The subsequent pressure on her right hip after the surgery led to her undergoing a right hip replacement as well. The pressure on her lower back from the left and right hip replacements caused further pain, which required more treatments. Wise filed a worker’s compensation claim.

The Labor and Industry Review Commission (LIRC) determined that Wise’s fall at work temporarily aggravated pre-existing avascular necrosis and awarded reimbursements for treatment of the initial injury. However, LIRC said the temporary aggravation was resolved before Wise underwent hip replacement surgery, so the commission denied permanent disability compensation and compensation for her subsequent procedures.

The appeals court overturned LIRC’s decision, ordering the lower court to appropriate compensation to Wise for both her initial injury and subsequent surgeries. The court said LIRC’s decision was not “supported by credible and substantial evidence” (Wis. Stat. § 102.23(6)) because it relied on a report that the court determined misinterpreted the record.

In a dissent, Judge Brian Hagedorn (who is running for state Supreme Court) criticized the majority for substituting its own judgment regarding the reliability of the supposedly misinterpreted report for LIRC’s. While he might have agreed with the facts pointed out by the majority, Hagedorn agued that it is not the court’s place to reweigh the facts LIRC used to support its decision, according to Wis. Stat. § 102.23(6).

Court of Appeals Decision: Aamaans Properties, Inc. v. DOT (Inverse Condemnation)

Posted on by Hamilton

In Aamaans Properties, Inc. v. DOT (2017AP1220), the Court of Appeals District IV held that a property owner is not entitled to compensation when the Department of Transportation (DOT) relocates a nearby highway but does not physically take the property or legally change its use.

Aamaans owned a property on a road that closely intersected with Highway 26 and developed the property into a sort of travel station with a gas station and restaurant. In 2011, DOT relocated Highway 26 so that it no longer connected with the road where the Aamaans property was located. The relocation increased travel time from the highway to the property by over a mile, decreasing the property’s value as a convenient travel stop. The restaurant closed and the assessed value of the property dropped by hundreds of thousands of dollars.

Aamaans argued that the relocation of the highway was a compensable inverse condemnation. However, the court ruled that compensable takings must be either a physical taking of property or a regulatory taking wherein all practical use of the property becomes restricted by law. Here, DOT did not physically take Aamaans’s property. Furthermore, the relocation of the highway did not impose any legal restrictions causing the property to lose all practical uses. Therefore, Aamaans was not entitled to compensation for his property’s loss of value.

Gov. Walker Signs Extraordinary Session Legislation Limiting AG Authority

Posted on by Hamilton

Last week, Gov. Scott Walker signed into law the extraordinary session legislation passed by the legislature earlier this month. The legislation, 2017 Act 369, provides a more stable, predictable regulatory and litigation environment for Wisconsin businesses by limiting the authority of activist attorneys general.

The extraordinary session legislation gives the legislature more oversight of settlements pursued by Wisconsin’s attorney general. The bill requires Joint Committee on Finance (JFC) approval of any compromise or discontinuance of an action pursued by the Department of Justice. (Current law requires approval from the governor.) Settlement plans my not concede the invalidity of a statue unless the Joint Committee on Legislative Organization approves. Actions for injunctive relief or proposed consent decrees are also subject to a 14-day passive review period by JFC. The legislation also removes the attorney general’s authority to expend settlement funds and instead automatically deposits any settlement funds directly into the general fund.

Under the Act, the legislature also may intervene in cases alleging that a state statute is unconstitutional, been preempted by federal law, or the validity of the statute is otherwise challenged.

Other provisions of Act 369 include the statutory removal of agency deference, incorporating the 2018 Wisconsin Supreme Court decision Tetra Tech v. Department of Revenue, and transparency and legislative oversight requirements for agency rulemaking.

Legislature Names Judiciary & Courts Committee Chairpersons

Posted on by Hamilton

Senate Majority Leader Scott Fitzgerald (R-Juneau) and Assembly Speaker Robin Vos (R-Rochester) have announced 2019-20 committee leaders for their respective chambers, including those committees that will likely be tasked with legal reform bills.

In the Senate, Sen. Van Wanggaard (R-Racine) was renamed chairman of the Committee on Judiciary & Public Safety. In addition, Sen. Dave Craig (R-Big Bend) will chair a Committee on Insurance, Financial Services, Government Oversight & Courts. (List of all Senate committee chairs.)

On the Assembly side, Rep. Jim Ott (R-Mequon) will again chair the Committee on Judiciary. (List of all Assembly committee chairs.)

Announcements on the makeup of committees are expected closer to the start of the 2019-20 legislative session on Jan. 7.

Supreme Court Decision: Midwest Neurosciences Associates, LLC v. Great Lakes Neurosurgical Associates, LLC (Arbitrability)

Posted on by Hamilton

In Midwest Neurosciences Associates, LLC v. Great Lakes Neurosurgical Associates (2018 WI 112), the Supreme Court held that circuit courts may decide whether a dispute should be arbitrated when an original contract contains a mandatory arbitration clause but a subsequent contract does not.

The parties in this case entered into an “Operating Agreement” contract with a noncompete restrictive covenant. The Operating Agreement contained a mandatory arbitration clause, incorporating by reference a rule that the arbitrator has jurisdiction to rule on arbitrability of disputes arising from the contract.

In the process of restructuring, Midwest and Great Lakes drafted a “Redemption Agreement” that contained a merger clause releasing Great Lakes from the terms of the Operating Agreement. Because Midwest did not officially sign the Redemption Agreement, the parties dispute whether it is enforceable.

The underlying litigation in this case involves whether Dr. Pannu violated a noncompete clause in the Operating Agreement by engaging in competitive practice after he signed the Redemption Agreement. The issue before the Supreme Court was whether the circuit court had authority to determine arbitrability despite the original Operating Agreement mandating arbitrability be determined by an arbitrator.

In a 5-1 ruling (Justice Ziegler, joined by Justices Walsh Bradley, Kelly, and Chief Justice Roggensack, with Justice Abrahamson concurring), the court determined that the circuit court can determine arbitrability when a subsequent contract does not contain an arbitration clause, even if the original contract mandated arbitration. The court stated that freedom of contract principles allow parties who have agreed to arbitrate to subsequently contract out of the arbitration agreement. The court also found that, if valid, the Redemption Agreement would supersede the Operating Agreement’s arbitration clause. However, because there were still issues of material fact as to whether both parties formally agreed to the Redemption Agreement, the Supreme Court remanded the case to circuit court to determine the validity of the Redemption Agreement.

In her concurring opinion, Justice Abrahamson suggested that, because the subject matter of the Redemption Agreement differed from the Operating Agreement, the Redemption Agreement did not entirely supersede all terms of the Operating Agreement. Abrahamson said circuit courts do have the authority to determine whether any part of a subsequent contract (here, the Redemption Agreement) supersede arbitration provisions in a previous contract.

In a dissent, Justice R. Bradley argued that the question of whether the Redemption Agreement supersedes the Operating Agreement is an issue of substantive arbitrability governed by the Operating Agreement. Therefore, an arbitrator – not the courts – should decide whether the Redemption Agreement is valid.