Author: Hamilton

WCJC Presents James E. Hough Distinguished Service Award to Bob Fassbender

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On Oct. 12, 2018, WCJC presented the James E. Hough Distinguished Service Award to Robert Fassbender. Bob helped co-found the Wisconsin Civil Justice Council in 2009 and served as its Executive Director until he retired from the Hamilton Consulting Group in December 2017. During his tenure as Executive Director, WCJC experienced unprecedented success, which started in 2009 when WCJC helped defeat numerous bills introduced at the behest of the plaintiff’s bar. Beginning in 2011 and lasting through 2017, Bob helped lead the coalition in passing an unprecedented number of civil justice bills supporting the business community and helping Wisconsin gain national recognition.

The Distinguished Service Award is presented in honor of James E. Hough, former Hamilton Consulting Group partner, who for many years represented Wisconsin business interests in civil justice matters before the Wisconsin Legislature.

Supreme Court Accepts Seven Cases

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The Supreme Court accepted seven new cases last week. Cases of note include:

 

John Teske v. Wilson Mutual Insurance Co. (claim preclusion)
The Supreme Court will decide whether previous litigation related to underinsured motorist (UIM) coverage precludes the instant tort claim alleging negligence by the driver insured by Wilson. The appeals court ruled the causes of action of the UIM action and the tort action differed, so claim preclusion should not apply. Wilson appealed to the Supreme Court, seeking to dismiss the tort action.

Ann Cattau v. National Insurance Services of Wisconsin (negligence and breach of fiduciary duty)
The plaintiffs, former teachers and school administrators, claim negligence, breach of fiduciary duty, and misrepresentation against MidAmerica and NIS, which administered their retirement plans. The plans were noncompliant with federal law, and the plaintiffs ultimately owed several years of tax dollars back to the Internal Revenue Service. The plaintiffs claim they relied on MidAmerica and NIS as experts to administer a qualifying plan, and MidAmerica and NIS misrepresented the plan as federally compliant. The issues before the Supreme Court are whether the plaintiffs stated an adequate claim against defendants MidAmerica and NIS and whether the plaintiffs should be able to amend their complaint for a second time.

L.G. v. Aurora Residential Alternatives, Inc. (compelled arbitration)
The issue presented in this case is whether a circuit court’s order denying a motion to compel arbitration is a “final order” under Wis. Stat. § 808.03(1), allowing the order to be appealed.

 

All Supreme Court pending cases.

Supreme Court October Oral Arguments

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The Supreme Court plans to hear several cases in October that are relevant to the Wisconsin business community. The court has already heard oral arguments in six cases and will hear three more at the end of the month.

On Oct. 10, the court heard oral arguments in City Deck Landing LLC v. Circuit Court for Brown County. The case will determine whether a circuit court properly stayed a private arbitration proceeding while a related insurance company duty to defend action proceeded in circuit court. The court also heard Midwest Neurosciences Associates v. Great Lakes Neurosurgical Associates, a contract dispute which will examine whether an arbitration clause from a prior agreement is applicable in a subsequent contract. In Stuart White v. City of Watertown, the court will determine whether cities, in addition to towns, may enforce statutes related to fences for farms.

On Oct. 12, the court traveled to Sparta, Wisconsin to hold oral arguments. One notable case was Kieninger v. Crown Equipment Corp., which will determine whether employees who voluntarily commute using an employer’s vehicle should be compensated for commuting time under the federal Employee Commuting Flexibility Act.

On Oct. 29, the court will be back in the state capitol to hear arguments in Steadfast Insurance Co. v. Greenwich Insurance Co., which will decide how coverage and defense costs should be allocated between the two insurance companies that covered Milwaukee Metropolitan Sewerage District during several rain events that caused damage to homeowners.

Check back on the WCJC blog for updates on these and other Supreme Court cases of note to the business community.

4th District Court of Appeals Decision: Thomas Zimmer Builders, LLC v. Roots (Compelled Arbitration)

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In Thomas Zimmer Builders, LLC v. Roots (2017AP2037), the Court of Appeals District IV held that an arbitration clause was enforceable because the complaint challenged the contract as a whole and because a company’s employee may invoke an arbitration clause even if the employee is not a signatory party to the contract.

Kurt and Monika Roots entered into a Design Consultant Agreement with Udvari-Solner Design Co. The Rootses later challenged the contract on the basis that employee Mark Udvari-Solner misrepresented himself as an architect before they signed the agreement. Udvari-Solner moved to compel arbitration pursuant to the contract’s arbitration clause.

The appeals court reversed the circuit court’s denial of Udvari-Solner’s motion to compel arbitration because:

  1. Federal and state cases have held that challenges to the validity of a contract as a whole must be arbitrated when the contract has an arbitration provision.
  2. An established legal rule states that employees may compel arbitration under a contract between their employer and a third party, even if the employee is not named in the contract, if the employee is acting within the scope of their employment.

2nd District Court of Appeals Decision: Daniel White v. LIRC (Worker’s Compensation)

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In Daniel White v. LIRC (2017AP1605), the Court of Appeals District II held that Sevenson Environmental Service did not violate Wisconsin worker’s compensation statutes when it refused to rehire an employee after he abandoned his job.

Daniel White injured his back while working for Sevenson and was subsequently placed on “light duty” instead of his usual tugboat operating duties. About a month later, White took a week of authorized leave for a family matter. White asked for another week off, but no one from Sevenson returned his call. White did not return to work for another month. When he returned, Sevenson said they no longer needed him. White claimed Sevenson violated Wis. Stat. § 105.35(3) by not rehiring him after his injury.

The court denied White’s claim for one year’s wages. The court found credible and substantial evidence supported LIRC’s decision that Sevenson did not violate Wis. Stat. § 102.35(3) because White abandoned his job, giving Sevenson “reasonable cause” to refuse to rehire him.

4th District Court of Appeals Decision: Gage Corp. v. Tamareed Co. (Contract Dispute)

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In Gage Corp. v. Tamareed Co.(2017AP881), the Court of Appeals District IV held that Gage Corp. did not owe commission to sales agent Tamareed Corp. after Gage’s deal for a Saudi building project collapsed.

Tamareed procured a contract between Gage and the Saudi company. Gage and the Saudi company entered into an agreement, but Gage later discovered that the Saudi company was counterfeiting the design for its product. The two companies settled, and Gage offered Tamareed a portion of its settlement proceeds. Tamareed rejected the settlement funds and sought its full commission payment in court.

The court determined that email agreements between Gage and Tamareed established a contract between the parties that Gage would only pay Tamareed upon receiving payment for the goods it sold. Therefore, since Gage ultimately sold no goods to the Saudi company, Tamareed was not entitled to the full commission payment. The court rejected Tamareed’s argument that a prior case, Foster v. Holbrook-Armstrong Iron Co., created a blanket rule that sales agents should receive commission for procuring contracts between buyers and sellers, whether or not the sale ultimately goes through. The court ruled such a “procuring clause doctrine” favoring sales agents does not override contracts. Furthermore, the court said Tamareed could not pursue an unjust enrichment claim as an alternative to its breach of contract claim.

The court also rejected Tamareed’s argument that the circuit court erred in allowing expert witness testimony under the Daubert standard. The court ruled the expert used by Gage to testify to custom and usage in the trade industry was relevant and reliable, so the admissibility was at the proper discretion of the circuit court.

3rd District Court of Appeals Decision: Olson v. Wisconsin Mutual Insurance Co. (Off-Property Coverage)

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In Olson v. Wisconsin Mutual Insurance Co. (2017AP1567), the Court of Appeals District III held that a request for “full coverage” did not make an insurance agent negligent for failing to include off-property automobile coverage in a homeowner’s policy, nor did it make the policy eligible for reformation.

Jeffrey Keyes had automobile insurance through Wisconsin Mutual Insurance Co. He also had a farmowners policy from Rural Mutual Insurance Co. with attached umbrella liability coverage. The umbrella coverage specifically excluded coverage for occurrences related to the use of automobiles away from the covered property. When Keyes was involved in an accident on a public road, he sought coverage from Rural under the umbrella policy, and Rural denied coverage based on the off-property exclusion.

On appeal, Keyes sought reformation of his Rural policy because he claimed there was a “mutual mistake” in that the policy was issued with the off-property exclusion. Keyes contended that his request for “full coverage” meant his insurance agent should have included off-property occurrences in the policy and suggested his agent was negligent in implementing the off-property exclusion in the policy. Because Keyes never specifically asked for off-property coverage, the court denied his claim for policy reformation and his claim of agent negligence, citing precedent that generic requests for coverage do not trigger an obligation for agents to include coverage for specific risks in a policy.

The court also denied Keyes’s argument that his satisfying of the policy’s underlying insurance requirement through a separate insurer should have made him eligible for off-property umbrella coverage.

3rd District Court of Appeals Decision: Badgerland Overhead Door v. Today’s Overhead Door (Successor Garnishment Action)

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In Badgerland Overhead Door v. Today’s Overhead Door (2017AP714), the Court of Appeals District III held that Day Enterprises was liable for $20,000 owed to Badgerland Overhead Door after Day purchased assets and became successor to Today’s Overhead Door.

Day and Today’s Overhead Door entered into an asset purchase agreement that included the provision of a $20,000 credit to Today’s Overhead Door from Day. Following the purchase, Badgerland Overhead Door sought a garnishment action against Day, claiming it could collect from Day debts owed by Today’s Overhead Door because Day still owed the company the $20,000 credit.

Agreeing with the circuit court, the court of appeals held that the $20,000 credit was “property” eligible for garnishment under Wis. Stat. § 812.01(1). The court denied Day’s arguments that the circuit court improperly applied successor liability and that Today’s Overhead Door breached their contract with Day.

Marquette Poll: Schimel Leads Kaul By 6 Points in AG Race

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The latest Marquette University (MU) Law School poll, released Sept. 18, showed incumbent Republican Wisconsin Attorney General Brad Schimel as an outlier among declining numbers for Republican candidates. In the first head to head question from the MU poll in this year’s attorney general race, Schimel led his opponent Josh Kaul 44 to 38 percent among likely voters.

However, the attorney general candidates are still largely unknown, with 69 percent saying they have not heard enough about Kaul, and 44 percent saying they have not heard enough about Schimel.

The poll showed that 24 percent of voters view Schimel as favorable and 20 percent view him as unfavorable (compared to 26 percent favorable and 16 percent unfavorable in the previous poll).

Just 7 percent of voters have a favorable opinion of Kaul, and 5 percent have an unfavorable opinion (compared to 4 percent favorable and 3 percent unfavorable in the previous poll).

Read more about Marquette poll results in other races.

Plaintiffs Refile in Gill v. Whitford Redistricting Case

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Democratic plaintiffs in Gill v. Whitford, the legal challenge to Wisconsin Republicans’ 2010 redistricting map, have refiled their case in district court. A three-judge panel (Chief U.S. District Judge James Peterson, appointed by President Barack Obama; 7th Circuit U.S. Court of Appeals Judge Kenneth Ripple, appointed by President Ronald Reagan; and U.S. District Judge William Griesbach, appointed by George W. Bush) will hear the case, which has been renewed with additional plaintiffs and refreshed arguments.

In June, the U.S. Supreme Court decided the plaintiffs lacked standing to challenge the statewide map. The Court remanded the case to district court, giving the plaintiffs another opportunity to demonstrate concrete injuries to their individual votes.

In their U.S. Supreme Court arguments, the plaintiffs, all Democratic voters from Wisconsin, argued that the map violated their rights to association and equal protection because it unfairly diminished their chances to achieve a majority and resultant legislative outcomes. The map, they said, unfairly gave Republicans a better chance of “translating their votes into seats.”

In defense, the state of Wisconsin argued the plaintiffs lack standing to challenge the entire map. The Court agreed that plaintiffs can only challenge their own voting districts and thus lacked standing for their statewide gerrymandering claim.

To address the standing issue, Democrats added 28 plaintiffs from districts statewide. Their renewed argument is that what they characterize as a gerrymandered map dilutes their votes in their individual districts. Their aggregate claims could force the map to be redrawn.

Wisconsin’s Assembly Democrats have also filed a lawsuit arguing the redistricting infringed upon their First Amendment rights of association. They are seeking to consolidate their case with Gill v. Whitford.