*This case is recommended for publication.

 

In Pennell v. American Family Mutual Insurance Co. (2019AP170), the Court of Appeals District II held that the jury in this personal injury case did not receive proper instructions on causation and pre-existing conditions and awarded the plaintiff a new trial.

Monica Pennell was injured in a car accident. Pennell alleged that another person in the accident, Carmella Covelli, was a cause of the accident, and that accident caused Pennell’s injuries. After receiving no damages for future pain and suffering at the circuit court trial, Pennell appealed on the grounds that the circuit court erroneously denied her requested jury instructions.

The appeals court agreed with Pennell that the jury should have been instructed according to WIS JI—CIVIL 1500 because the case involved disputes about what caused the accident and what caused Pennell’s injury. At trial, the jury was only instructed to determine whether Covelli caused the accident, and the instructions did not reference whether the accident caused Pennell’s injuries. Instructions in WIS JI—CIVIL 1500 would have taken into account both causation of the accident and causation of the injury.

The appeals court also agreed that the jury should have been given instructions related to consideration of aggravation of pre-existing conditions when assessing damages (WIS JI—CIVIL 1720). In this case, there was a dispute between the parties as to whether Pennell’s headaches were a pre-existing condition or whether they were aggravated by the accident. The appeals court said this issue was a question that the jury should have decided and about which the jury should have received instruction.  

Overall, the court said the outcome of the trial could have been different if the jury had received the proper instructions, so Pennell was awarded a new trial.

 

 

In Whittlesey v. LIRC (2018AP2164), the Court of Appeals District IV held that the plaintiff was eligible for unemployment benefits because he had good cause to terminate his employment.

Plaintiff Whittlesey worked for a restaurant for approximately two years before he terminated his employment because he “believed the work environment was hostile and insensitive to his race.” Incidents described in Whittlesey’s testimony included other employees using offensive racist language toward him. Whittlesey believed management did not sufficiently address these incidents, so he eventually terminated his employment and filed for unemployment benefits.

Wisconsin’s unemployment insurance statutes generally prohibit employees who voluntarily terminate their employment from receiving benefits. However, Wis. Stat. § 108.04(7)(b) does provide an exception if the employee terminates his employment “with good cause attributable to the employing unit.”

The appeals court determined that Whittlesey had good cause attributable to his employer to terminate his employment, so he was eligible for unemployment insurance under Wis. Stat. § 108.04(7)(b). Whittlesey did not need to prove that had pursued reasonable alternatives short of quitting to resolve his employment issue. Furthermore, some of the racist remarks were attributable to the employer; the employer failed to specifically prohibit the offensive language; and the incidents were not effectively addressed by the employer. The cumulative effects of racist remarks by employees at the restaurant were good cause for Whittlesey to terminate his employment; therefore, Whittlesey was entitled to unemployment benefits.

*This case is recommended for publication.

 

In Mechanical, Inc. v. Venture Electrical Contractors, Inc. (2018AP2380), the Court of Appeals District II held the economic loss doctrine bars a negligence claim from a subcontractor against another subcontractor with whom there was no contract. The economic loss doctrine is a judicially created doctrine typically barring lawsuits that seek to recover solely economic losses arising from the nonperformance of a contract, including costs associated with delays and lost profits.

J.P. Cullen & Sons, Inc. hired both Mechanical, Inc. and Venture Electrical Contractors, Inc. as subcontractors in a construction project. Mechanical and Venture did not have a contractual relationship with each other. The contracts between Mechanical and Cullen and between Venture and Cullen both required that the subcontractors perform the work within a specified amount of time. The subcontractors would be responsible for any costs incurred by delay.

There was a delay in the construction, and Venture first sought to recover its overtime pay and other incurred costs of delay from Cullen. Cullen denied Venture’s claim pursuant to the contract. Venture later sought these delay-related damages from Mechanical, claiming Mechanical was negligent in failing to timely perform work on the project, which in turn caused Venture to incur delay-related losses.

Mechanical argued Venture’s claims were barred by the economic loss doctrine. Venture argued that the economic loss doctrine does not preclude its claims because Mechanical and Venture did not have a contractual relationship.

The court held that the economic loss doctrine still applies to the horizontal relationship between subcontractors, even when there is no direct contractual relationship. In this case, the economic loss doctrine applied because the loss arose from construction duties under interrelated contracts on the Cullen project. Venture had the opportunity to address risk of economic loss due to delay in its contract with Cullen. In accordance with the purpose of the economic loss doctrine – to avoid tort claims when parties have contracted for potential losses – Venture cannot pursue a tort claim outside its contract with Cullen, which was interrelated to Cullen’s contract with Mechanical. Since Venture had the opportunity to address the risk of delay-related loss by contract, even if not in a contract specifically with Mechanical, it cannot file a tort claim against Mechanical for those losses.