Author: Hamilton

Milwaukee Journal Sentinel Op-ed – “Vets Favor New State Asbestos Law”

Posted on by Hamilton

The Milwaukee Journal Sentinel on Sunday, July 20, published an op-ed by Wisconsin veterans Larry Kutschma and Steven Stefonik voicing their support for the new asbestos transparency law (2013 Wisconsin Act 154). The op-ed responded to a call by gubernatorial candidate Mary Burke to repeal the new law.  According to Kutschma and Stefonik:

As veterans, we empathize with those who suffer from mesothelioma, the asbestos-related disease. We were trained as veterans to never leave our fellow soldiers behind, and that is why we took the same position as the AMVETS Department of Wisconsin in supporting the asbestos legislation (2013 Wisconsin Act 154) passed by the Wisconsin Legislature and signed by Gov. Scott Walker. This new law will ensure that our brothers in arms are not left behind. Recently, Democratic gubernatorial candidate Mary Burke pledged to repeal the new law. Contrary to what has been claimed, Act 154 will not harm veterans. Instead, the law will help veterans by ensuring that valuable resources are not depleted.

…

Wisconsin’s new law provides transparency and fairness, and ensures that enough assets will be available for current and future veterans. That is why we, as veterans, fully support the new law and oppose any attempts to repeal it.

The Wisconsin Civil Justice Council actively supported Act 154 and were successful in helping the legislation be enacted into law. Wisconsin became the third state, behind Ohio and Oklahoma, to enact a law requiring plaintiffs’ attorneys to disclose any money received from trust funds when suing businesses in Wisconsin courts.

For more information about Act 154, click here.

Supreme Court Holds that Plaintiff’s Insurer is Required to Defend and Indemnify the Tortfeasor

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In a troubling 4-3 decision authored by Chief Justice Abrahamson, joined by Justices Crooks, Bradley, and Prosser, the Wisconsin Supreme Court held that the plaintiff’s insurance carrier, American Family Insurance, had a duty to defend and indemnify the tortfeasor because the torfeasor was a “permissive user” of the plaintiff’s vehicle under American Family’s policy. Justice Roggensack authored the dissenting opinion and was joined by Justices Ziegler and Gableman.

This decision is Blasing v. Zurich American Family Ins. Co., 2014 WI 73.

Background

The plaintiff, Vick Blasing, was injured by an employee of Menard, Inc. Blasing drove her pickup truck to a Menards store to purchase lumber. Blasing drove her vehicle into the lumberyard and stood outside of her vehicle. As the boards of lumber were being loaded into her truck, a Menards’ employee dropped a few boards onto Blasing’s foot, injuring her.

Blasing sued Menards and its insurer, Zurich, alleging negligence and a violation of Wisconsin’s safe place statute. Blasing’s vehicle was covered by American Family Insurance Co. Menards proceeded to tender its defense of Blasing’s claims to American Family, asserting that Menards was covered under Blasing’s policy because the Menards employee was a “permissive user of Blasing’s vehicle.”

American Family intervened in the case and argued that Menards was not covered as an additional insured under Blasing’s policy because the Menards employee was not “using” Blasing’s vehicle within the meaning of the policy or Wisconsin law (Wis. Stat. § 632.32(3)(a)). This law requires automobile insurance policies to provide additional vehicle users the same protection as is afforded to the named insured.

The circuit court ruled in favor of American Family, holding that American Family had no duty to defend or indemnify Menards.

Court of Appeals Decision

The Court of Appeals, Dist. III, reversed and held that American Family did owe a duty to defend and indemnify Menards. Specifically, the Court of Appeals held that because the policy holder/plaintiff (Blasing) would have been “using” her truck if engaged in the loading activity at Menards, and because the Menards employee was acting with Blasing’s permission to load her vehicle, then Wisconsin’s law requires coverage for Menards under Blasing’s American Family automobile policy.

Wisconsin Supreme Court Decision

The Supreme Court affirmed the Court of Appeals and held that American Family, the plaintiff’s insurance carrier, owed a duty to defend and indemnify the tortfeasor in this case.

In reaching its decision, the Supreme Court stated it was required to address three “separate inquiries”:

  1. Do the alleged tortfeasor’s actions constitute a “use” of the pickup truck under the American Family liability policy?
  2. Does American Family’s automobile liability insurance policy require American Family to defend and indemnify a permissive user tortfeasor when the injured victim is the named insured under the policy?
  3. Does the concept of a “permissive user” under Wisconsin’s Omnibus Statute (Wis. Stat. § 632.32(3)(a)) require an injured person’s own liability insurer to defend and indemnify the tortfeasor who injured the insured when the tortfeasor has its own liability insurance?

For the first two questions, the majority answered in the affirmative. According to the majority opinion, because the Court “disposed of the instant case based on the text of the American Family policy,” it did not need to address the third question.

In addressing the first question, the majority held that the Menards’ employee’s actions of loading the plaintiff’s vehicle constituted a “use” of the pickup under the American Family automobile liability insurance policy.

Addressing the second issue, the majority again held that American Family Insurance’s policy required American Family to defend and indemnify the tortfeasor when the injured victim is a named insured under the policy. The majority dismissed American Family’s argument that it would be absurd to require American Family to defend and indemnify the tortfeasor. Although the majority acknowledged that requiring American Family, as the insurer for the plaintiff, to defend and indemnify the tortfeasor “might appear to some to be anomalous,” it nonetheless affirmed the Court of Appeals’ decision.

According to the majority, “American Family drafted the policy, which the named insured accepted. In the policy, American Family ‘has a contractual duty to defend its insured…’ An insured under the American Family policy is the Menard employee. Thus, the result we reach is in accord with the policy.”

Dissenting Opinion

The dissenting opinion argues that the majority fails to address the third question posed by American Family, which is whether the concept of a “permissive user” under Wisconsin’s Omnibus Statute (Wis. Stat. § 632.32(3)(a)) requires an injured person’s own liability insurer to defend and indemnify the tortfeasor who injured the insured, and where the tortfeasor has its own liability insurance.

According to the dissenting opinion, the majority should have concluded that “when a direct action has been commenced against the insurer of a named defendant, as is the case here, the defendant’s insurer must provide the defense unless that insurer first can prove there is no coverage for any of the claims made.” The dissenting opinion further noted that majority should have prevented the plaintiff’s personal automobile policy from being converted into comprehensive liability insurance for the tortfeasor.

 

Wisconsin Supreme Court Rules that Trial Court Erred by Giving “Absent Witness” Jury Instruction

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In a 4-3 decision authored by Justice Roggensack, joined by Justices Crooks, Gableman, and Ziegler, the Wisconsin Supreme Court held that the trial court’s decision to give the absent witness instruction was erroneous and remanded the case back to the circuit court for a new trial.

Justice Bradley authored a dissenting opinion that was joined by Chief Justice Abrahamson. Justice Prosser also authored a dissenting opinion. The case is Kochanski v. Speedway Super America, 2014 WI 72.

Background
The case involves a lawsuit brought by James Kochanski against Speedway when he suffered injuries resulting from a fall outside one of Speedway’s convenience stores. After filling his vehicle with gas, Kochanski walked to the store to pay. It was snowing that day and there was approximately two inches of snow on the ground. As Kochanski approached the curb on the walkway leading to the store entrance, which was painted yellow, he noticed snow covering a portion of the sidwalk. Kochanski did not see any yellow in front of him so he thought the curb had been cut out or was a wheelchair access point. However, the wheelchair access was four to five feet to the side of the entrance.

Kochanski tripped and fell on the curb, breaking his arm and injuring his wrist. This was all caught on Speedway’s surveillance video. Kochanski sued Speedway for negligence and for violation of Wisconsin’s Safe Place Statute (Wis. Stat. § 101.11).

As the case went to trial, Kochanski’s attorney offered into evidence Speedway’s interrogatory responses indicating that there were five Speedway employees working when Kochanski fell. Speedway did not call any witnesses at trial, but instead offered into evidence the store video surveillance.

Kochanski then requested the trial court to give a jury instruction (Wis JI—Civil 410), commonly referred to as the “absent-witness” instruction, to the jury. This injury instruction states:

If a party fails to call a material witness within (his) (her) control, or whom it would be more natural for that party to call than the opposing party, and the party fails to give a satisfactory explanation for not calling the witness, you may infer that the evidence which the witness would give would be unfavorable to the party who failed to call the witness.

During closing argument, Kochanski’s attorney commented that Speedway did not call any witnesses and suggested that it was withholding information from the jury.

The jury determined that Speedway was negligent in failing to maintain its premises and found that Kochanski was not negligent. Speedway appealed the decision.

Court of Appeals Decision
The Court of Appeals reversed the circuit court and held that the trial court erroneously gave the jury instruction. The court held that the plaintiff failed to show that the uncalled witnesses (Speedway’s former employees) were not material or within Speedway’s control. As a result, the Court of Appeals held that the trial court’s decision to give the jury instruction was prejudicial error.

Wisconsin Supreme Court Decision

The Wisconsin Supreme Court affirmed the Court of Appeals and held that the circuit court’s decision to give the absent witness instruction was erroneous. Specifically, the Supreme Court held:

there was no evidence in the record that the absent witnesses, former Speedway employees who had been on duty at the time of the accident, were material and within Speedway’s control or that it was more natural for Speedway, rather than [the plaintiff] to call them. Furthermore, Speedway’s decision not to call the former employees did not reasonably lead to the conclusion that it was unwilling to allow the jury to have “the full truth.”

In addition, the Supreme Court determined that the jury instruction was “prejudicial because without drawing a negative inference about Speedway’s snow removal methods and processes from Speedway’s decision not to call the former employees, the jury would not have found that [the plaintiff] satisfied the notice element of his safe-place claim that was necessary to liability.”

The Supreme Court remanded the case back to the circuit court for a new trial.

 

Wisconsin Supreme Court Rules “Lemon Law King” Not Entitled to Attorney’s Fees

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In a 5-1 decision authored by Justice Ziegler and joined by Justices Crooks, Bradley, Prosser, and Gableman (Chief Justice Abrahamson dissenting and Justice Roggensack not participating), the Wisconsin Supreme Court handed the self-proclaimed “Lemon Law King” a defeat by refusing to award him attorney’s fees in a lawsuit. The case is Betz v. Diamond Jim’s Auto Sales, 2014 WI 66.

Background

The plaintiff, Randy Betz, purchased a used vehicle from Diamond Jim’s Auto Sales. Betz experienced problems with the automobile and ultimately sued Diamond Jim’s. Betz hired plaintiff attorney Vince Megna, the self-proclaimed “Lemon Law King.” Under one of the statutes (Wis. Stat. § 100.18(11)) that Megna sued under allowed for attorney’s fees for the plaintiff (commonly referred to as a “fee-shifting” provision).

However, before the case went to trial, Betz and the general manager of Diamond Jim’s entered into a settlement agreement without their attorneys’ knowledge. The settlement agreement did not include attorney’s fees for Megna.

Megna intervened in the case as a plaintiff arguing that the right to cover attorney’s fees under the statute belonged to him as a lawyer, not the client. The circuit court dismissed Megna’s lawsuit. The court of appeals reversed.

Wisconsin Supreme Court Decision

The Court reversed the court of appeals and held that the plaintiff (Megna’s client) did not assign his right to recover the attorney’s fees under statute to Megna in the fee agreement between Megna and Betz. Therefore, the Court held that Megna could not seek the statutory attorney’s fees directly from Diamond Jim’s (the defendant).

In reaching its decision, the Court stated that there were two issues to be decided: 1) whether Betz assigned his statutory right to recover attorney’s fees to Megna under their fee agreement, and 2) whether Diamond Jim’s had notice of the assignment at the time of the settlement.

Looking at the language of the fee agreement between Megna and his client, the Court determined that the language could not “be fairly characterized as a written assignment of Betz’s statutory authority right to recover fees.”

The Court went out of its way to give attorneys advice in how to properly draft their contracts with plaintiffs. Specifically, the Court stated that “attorneys are cautioned to clearly draft a fee agreement so that it unambiguously assigns the client’s statutory right to recover attorney’s fees from the defendant.” According to the Court, a “more clearly drafted fee agreement [between Megna and his client (Betz)] … would have resolved the problem without the necessity of additional litigation.”

Wisconsin Supreme Court Holds Property Owner Can Be Held Liable for Actions of Independent Contractor When Activity is “Inherently Dangerous”

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In a 4-3 decision authored by Justice Crooks, joined by Justices Roggensack, Ziegler, and Gableman (Chief Justice Abrahamson concurring/dissenting, joined by Justices Bradley and Prosser) the Supreme Court held that a property owner may be held liable for damage caused by an independent contractor hired to perform work on his or her property. The case is Brandenburg v. Briarwood Forestry Services, LLC, 2014 WI 37.

Background

The facts in the case are straight forward. The defendant (Robert Leuthi) hired an independent contractor to spray herbicide on his property. The spraying drifted to the plaintiffs/neighbors’ property, damaging a number of trees. The plaintiffs sued the the property owners for the negligence of the independent contractor. The circuit court ruled in favor of the defendant/employer, while the court of appeals reversed holding that the act of spraying was “inherently dangerous” and thus was an exception to the rule exempting liability of the employer for the actions of an independent contractor.

Wisconsin Supreme Court Decision

The Supreme Court engaged in a lengthy analysis of Wisconsin’s law as it relates to the negligence of independent contractors and the “inherently dangerous” exception. The Court explained the general rule that a principal employer is not generally liable for an independent contractor’s negligence. However, the exception to that rule is that if the independent contractor was performing an “inherently dangerous” activity which caused harm to the plaintiff, the employer (the defendant in this case) could be liable for the independent contractor’s negligence. The Court further explained that the employer can still avoid liability depending on whether the employer exercised “ordinary care.” Therefore, the Court held in this case that the activity of spraying an herbicide could be considered an inherently dangerous activity, yet the employer could still not be liable for the independent contractor’s negligence if it is determined that the employer exercised “ordinary care.” The Court therefore remanded the decision back to the lower court to decide: 1) whether the employer failed to use ordinary care with regard to any danger inherent in the herbicide spraying that he know or had reason to know about, and 2) if so, whether any harm that occurred was caused by the spraying.

Concurring/Dissenting Opinion

The dissent agreed with the majority that the matter was to be remanded to the circuit court to determine whether the independent contractor was negligent in damaging the neighbor’s property. However, the dissent disagreed that the lower court was to decide whether the property owner failed to use “ordinary care” with regard to the activity of spraying the herbicide. Instead, the dissent argued that because it was already determined that the spraying of herbicide was inherently dangerous activity, there was no need to inquire into the property owner’s level of care. According to the dissent, the determination that the activity of spraying herbicide was inherently dangerous means that the employer was automatically liable for the independent contractor’s negligence.

Wisconsin Supreme Court Holds Property Owner Can Be Held Liable for Actions of Independent Contractor When Activity is “Inherently Dangerous”

Posted on by Hamilton

In a 4-3 decision authored by Justice Crooks, joined by Justices Roggensack, Ziegler, and Gableman (Chief Justice Abrahamson concurring/dissenting, joined by Justices Bradley and Prosser) the Supreme Court held that a property owner may be held liable for damage caused by an independent contractor hired to perform work on his or her property. The case is Brandenburg v. Briarwood Forestry Services, LLC, 2014 WI 37.

Background The facts in the case are straight forward. The defendant (Robert Leuthi) hired an independent contractor to spray herbicide on his property. The spraying drifted to the plaintiffs/neighbors’ property, damaging a number of trees. The plaintiffs sued the the property owners for the negligence of the independent contractor. The circuit court ruled in favor of the defendant/employer, while the court of appeals reversed holding that the act of spraying was “inherently dangerous” and thus was an exception to the rule exempting liability of the employer for the actions of an independent contractor.

Wisconsin Supreme Court Decision The Supreme Court engaged in a lengthy analysis of Wisconsin’s law as it relates to the negligence of independent contractors and the “inherently dangerous” exception. The Court explained the general rule that a principal employer is not generally liable for an independent contractor’s negligence. However, the exception to that rule is that if the independent contractor was performing an “inherently dangerous” activity which caused harm to the plaintiff, the employer (the defendant in this case) could be liable for the independent contractor’s negligence. The Court further explained that the employer can still avoid liability depending on whether the employer exercised “ordinary care.” Therefore, the Court held in this case that the activity of spraying an herbicide could be considered an inherently dangerous activity, yet the employer could still not be liable for the independent contractor’s negligence if it is determined that the employer exercised “ordinary care.” The Court therefore remanded the decision back to the lower court to decide: 1) whether the employer failed to use ordinary care with regard to any danger inherent in the herbicide spraying that he know or had reason to know about, and 2) if so, whether any harm that occurred was caused by the spraying.

Concurring/Dissenting Opinion The dissent agreed with the majority that the matter was to be remanded to the circuit court to determine whether the independent contractor was negligent in damaging the neighbor’s property. However, the dissent disagreed that the lower court was to decide whether the property owner failed to use “ordinary care” with regard to the activity of spraying the herbicide. Instead, the dissent argued that because it was already determined that the spraying of herbicide was inherently dangerous activity, there was no need to inquire into the property owner’s level of care. According to the dissent, the determination that the activity of spraying herbicide was inherently dangerous means that the employer was automatically liable for the independent contractor’s negligence.

Supreme Court Rules Plaintiff Cannot Seek UIM Coverage When Not Using Vehicle that Injured Her

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In an unanimous decision authored by Justice Patrick Crooks (Justice David Prosser not participating), the Wisconsin Supreme Court held that a sheriff deputy could not seek underinsured motorist coverage under her employer’s insurance policy when she was struck by a vehicle in a cross-walk. The case is Jackson v. Wisconsin County Mutual Ins. Corp., 2014 WI 36.

Background
The plaintiff, Rachelle Jackson, was working as a deputy sheriff for Milwaukee County at the Milwaukee airport. While on duty on a sidewalk, a motorist approached Jackson and asked her for directions.

After providing the driver with directions, Jackson directed the driver back out into the traffic. As Jackson walked in the crosswalk in front of the vehicle, the driver unexpectedly moved forward and hit Jackson, injuring her.

Jackson sued many parties, including her employer’s insurer, Wisconsin County Mutual Insurance Corporation, seeking underinsured motorist coverage (UIM).

The insurance company argued that Jackson was not “using an automobile” as required by the insurance policy. The district court agreed, holding that Jackson was not entitled to the UIM coverage. The Court of Appeals, District 1, reversed holding that Jackson “manipulated” the vehicle being driven by the motorist who struck her and thus was “using” the vehicle, entitling her to coverage under the policy.

Issue
Whether the plaintiff was “using” the vehicle being driven by the driver who struck the plaintiff, entitling her to underinsured motorist coverage under her employer’s insurance policy.

Supreme Court Decision
The Supreme Court reversed the court of appeals. The court began its analysis by noting that Jackson satisfied two out of the three requirements allowing her to obtain UIM coverage under her employer’s insurance policy: 1) she was within the scope of her employment, and 2) she was insured under the policy.

However, the court determined that Jackson did not meet the third requirement – she was not “using an automobile” as prescribed under the policy. The court looked to the definition of “using” under the policy, which included “driving, operating, manipulating, riding in and any other use.”

The court explained that the only way Jackson could possibly be covered under this definition is under the “manipulating” or “other use” provisions. The court proceeded to review a number of cases where a person not driving the vehicle was deemed to be using the vehicle. However, the court determined that the facts in this case did not arise to Jackson controlling or using the vehicle that ultimately hit and injured her.

According to the court, “[u]nlike the cases in which the person guiding or giving directions was ‘controlling’ and therefore deemed a user of the vehicle, Jackson did not exercise such control over the vehicle to the extent that she essentially became the user. She was not communicating with, signaling, or exercising active control over the vehicle at the time of the injury.”

The court therefore concluded that Jackson could not recover under the policy because her actions did not “constitute using a vehicle in any way that is consistent with interpretations of ‘use’ in Wisconsin case law or with those of cases from other jurisdictions.”

Huffington Post – Wisconsin Asbestos Trust Fund Transparency Law Helps Veterans

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The Huffington Post recently published a column by Sara Warner in which she praised Wisconsin’s recently enacted Asbestos Trust Fund Transparency law (2013 Wisconsin Act 154). The article was notable for a number of reasons.

First, the Huffington Post is a left-of-center publication that doesn’t normally side with businesses. Second, the column agreed with the Wisconsin Civil Justice Council’s position that the law is not only decidedly not harmful to veterans, but the law actually helps veterans by ensuring that unscrupulous plaintiffs’ attorneys do not deplete the trust funds through double-dipping.

Below is an excerpt from the article:

Two things make this a veterans’ issue:

First, while many trust fund claims were no doubt driven by lawyers, they were signed — under penalty of perjury — by veterans or their survivors. Of course, people just signed whatever the lawyer told them to sign. But, as the Garlock case showcased, companies have made it clear that clients, not just lawyers, are subject to questions, thus reopening some old cases.

Secondly, anybody actually “gaming” the system reduces the funding available for legitimate claims, meaning that veterans seeking trust fund compensation are paid less than they would have been otherwise.

To see how veterans’ groups are front-and-center, you only need look at Wisconsin, which passed a state FACT Act this year. Alerted by FACT opponents, groups like the Wisconsin VFW and the Wisconsin Military of the Purple Heart expressed concerns that vets face more hurdles for compensation.

Republicans, usually known for supporting military issues, found themselves accused of being anti-vet. But then the state AMVETS group supported the legislation, saying that “in short, this bill is about transparency and fairness to protect our veterans with an emphasis on availability on assets for our current and future veterans.”

Plaintiff Lawyer Explains How Asbestos Trust Funds Are Platforms for “Institutionalized Fraud”

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In a recent Forbes magazine article, Daniel Fisher discusses a publication by a former asbestos plaintiff lawyer who explains how some of the asbestos trust funds set up under the U.S. Bankruptcy Code facilitates “fraud.” According to the article, the plaintiff attorneys explains how the trust funds are designed to be accessed by claimants with little evidence of exposure.

Fisher quotes from the article:

Plaintiff asbestos lawyers then use the millions of fees obtained from the system they were instrumental building, to run countless advertisements designed to obtain more clients so that they can submit more claims and obtain more fees. Thus, institutionalized fraud, as built into the system, allows the system to perpetuate itself.

To read more, click here.

U.S. Chamber Institute for Legal Reform Recognizes Wisconsin’s “Common Sense” Legal Reforms

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Lisa Rickard, President of the U.S. Chamber of Institute for Legal Reform (ILR), recently wrote an article (“Wisconsin: Capital of Common Sense”), in which she commends Gov. Scott Walker and the Wisconsin Legislature for leading the nation over the past three years in enacting civil justice reforms.

As Rickard notes:

During the current decade, Governor Walker and lawmakers have mindfully enacted bold legal reforms in Wisconsin — a major reason Walker feels confident in his push to create more jobs and job security in his state…The last three years of landmark reforms have provided a template that other elected officials — governors, state legislators and even members of Congress — can and should utilize.

In the article, Rickard highlights the comprehensive legislation Wisconsin has enacted into law over the past three years, including:

  • 2011 Wisconsin Act 2, which contained comprehensive reforms, such as capping punitive damages, adopting standards (Daubert) of submitting expert evidence in lawsuits, product liability changes, and curbing frivolous lawsuits.
  • 2013 Wisconsin Act 105 (Transparency in Private Attorney Contracting), which promotes transparency and limiting contingency fees when the state hires outside private plaintiffs’ attorneys.
  • 2013 Wisconsin 154 (Asbestos Trust Fund Transparency), which helps prevent double-dipping by plaintiffs’ attorneys by creating greater transparency from attorneys when pursuing claims from asbestos personal injury settlement trusts set up to compensate asbestos victims and suing solvent Wisconsin businesses.

Not mentioned in the ILR article are the other civil justice reforms introduced by Gov. Walker and enacted by the Wisconsin Legislature during the 2011-12 session, including:

  • 2011 Wisconsin Act 69, which sets reasonable pre- and post-judgment interest rates at the Federal Reserve prime rate, plus one percent.
  • 2011 Wisconsin Act 93, which protects owners and possessors of land by codifying  Wisconsin’s case law as it relates to the duty of care owed to a trespasser by a possessor of land.
  • 2011 Wisconsin Act 92, which set forth criteria courts are to consider when awarding attorneys’ fees when plaintiff’s’ attorneys seek attorneys’ fees. The law also created a rebuttable presumption that attorneys’ fees are no more than three times compensatory damages.

WCJC and WMC last year were recipients of ILR’s prestigious “Outstanding Organization Award” for helping pass these sweeping reforms over the past three years.