Author: Hamilton

Town of Little Wolf v. Waupaca County (Mining Nonconforming Use)

Posted on by Hamilton

In Town of Little Wolf v. Waupaca County (2017AP1941), the Court of Appeals District IV upheld Waupaca County’s decision that a mine was a lawful nonconforming use after the passage of a non-metallic mining ordinance.

In 2015, Waupaca County passed the non-metallic mining ordinance, which requires new and expanding mines to obtain conditional use permits. The Waupaca County Planning and Zoning Committee determined that the Theil Pit mine was a lawful nonconforming use. Accordingly, the Theil Pit operators did not need to obtain a conditional use permit since the mine operated prior to the passage of the ordinance.

The Town of Little Wolf appealed the Zoning Committee’s decision, arguing that the Thiel Pit was not a lawful nonconforming use because its operators had failed to comply with a previous ordinance requiring them to obtain a reclamation permit. However, the court ruled that, whether the Thiel Pit was in violation of the reclamation ordinance or not, the mine was still operating legally in regard to zoning laws. The court stated that noncompliance with a regulatory, non-zoning ordinance like the reclamation ordinance does not prohibit the mine from continuing to be zoned as a lawful nonconforming use.

The court also rejected the town’s arguments that Waupaca should have considered whether the Thiel Pit was a public nuisance, that the appeal process violated the town’s due process rights, and that there was a conflict of interest related to a Waupaca attorney.

Vallier v. LIRC (Worker’s Compensation)

Posted on by Hamilton

In Vallier v. LIRC (2018AP936), the Court of Appeals District I held that the plaintiff was not entitled to worker’s compensation because her pre-existing condition was not aggravated by a minor injury at work.

Nurse Tamara Vallier hit her elbow against a wall while working for Aurora Health Care at St. Luke’s Medical Center. Vallier subsequently experienced pain and tingling in her right arm and sought several medical opinions. The doctors’ opinions agreed that Vallier had a pre-existing condition in her cervical spine that required surgery. However, the opinions conflicted on whether the minor elbow injury caused or aggravated the pre-existing condition.

The Labor and Industry Review Commission (LIRC) decided that Vallier was not entitled to worker’s compensation because, according to one doctor, the pre-existing cervical spine condition could not have been aggravated or caused by the way Vallier hit her elbow at work. The court upheld LIRC’s decision, agreeing that the decision was supported by the doctor’s opinion. The decision was also supported by the fact that Vallier had failed to disclose to her doctors that she had seen her family physician to be treated for pain in her shoulder before the work incident.

On appeal, Vallier further argued that LIRC’s decision should be overturned because of a factual error related to when she first complained of neck pain. The court (and LIRC) conceded the error but held that the error was not material to LIRC’s otherwise supported decision.

Bakkestuen v. Lepke Holdings LLC (Wages)

Posted on by Hamilton

In Bakkestuen v. Lepke Holdings LLC (2017AP2500), the Court of Appeals District IV held that employer Lepke owed dump truck drivers compensation for preparation time before and after actual loading time.

Citing the 2016 Wisconsin Supreme Court decision United Food & Com. Workers Union v. Hormel Foods Corp., which held that donning and doffing of required clothing was compensable work time, the appeals court ruled in this case that preparing trucks before and after loading was similarly compensable. The court stated that the preparation time was “integral and indispensable” to the drivers’ primary loading activity.

The court rejected Lepke’s argument that it did not owe the drivers the unpaid wages because it paid them more than the minimum wage for the primary hours worked. Citing the recent Tetra Tech v. DOR decision, the court did not, as Lepke requested, accord great weight deference to a prior Department of Workforce Development (DWD) decision, which stated that employers are required to pay employees only so that the total amount paid during a pay period divided by the total number of hours worked is at least the statutory minimum wage. Instead, the court held that DWD rules (Wis. Admin. Code §§ DWD 272.025 and 272.12(1)) require Lepke to pay employees the agreed-upon wage for all hours worked.

Finally, the court held that Lepke was required to pay the drivers overtime. Although the motor carrier exemption to federal and state overtime laws applied, Lepke owed the employees overtime because Lepke had contractually agreed to pay them overtime. Furthermore, Lepke owed the drivers the higher prevailing wage for overtime work they did on municipal and state works projects, according to the now repealed prevailing wage statute (2013-14 Wis. Stat. §§ 103.49 and 103.50).

Federal Litigation Funding Transparency Legislation Introduced

Posted on by Hamilton

Federal litigation funding transparency legislation has been introduced in the U.S. Senate. The bill would require the disclosure of third party litigation funding arrangements in class action and multidistrict litigation at the outset of federal cases. Judiciary Committee members Sens. Chuck Grassley (R-Iowa), Thom Tillis (R-North Carolina), John Cornyn (R-Texas), and Ben Sasse (R-Nebraska) reintroduced the bill, which stalled in the 2017-18 Congress.

Wisconsin led the nation on litigation funding transparency by passing 2017 Act 235 last session. The legislation provided that that, unless stipulated or ordered by the court, a party shall provide to the other parties any agreement under which any person, other than an attorney permitted to charge a contingent fee for representing a party, has a right to receive compensation that is contingent on and sourced from any proceeds of the civil action, by settlement, judgement, or otherwise. Read more about Act 235 here: https://www.wisciviljusticecouncil.org/policy-project/civil-litigation-reform-bill-2017-18/.

Langenhahn v. West Bend Mutual Insurance Co. (Recreational Immunity)

Posted on by Hamilton

In Langenhahn v. West Bend Mutual Insurance Co. (2017AP2178), the Court of Appeals District III held that recreational immunity applied when a pedestrian was injured leaving a community event.

Paula Langenhahn tripped on a barricade while walking to her vehicle from the community event Marathon Fun Days. The barricade was placed to close off a street for the event, which was organized by the American Legion Post 469. Langenhahn filed this negligence action against Post 469, but the circuit court dismissed the claim on the grounds of Wisconsin’s recreational immunity statute Wis. Stat. § 895.52.

The appeals court upheld the dismissal of the claim, restating that recreational immunity applied to Post 469. Relying on the case Roberts v. T.H.E. Insurance Co., which said the organizer of an event is an immune “owner” and “occupier” of property under Wis. Stat. § 895.52, the court determined that Post 469 was also an immune “owner” because it was occupying the park area as the organizer of the Marathon Fun Days event. Furthermore, the court determined that Langenhan walking back from the event was inextricably connected to the recreational activity of attending the event, so she was “engag[ing] in a recreational activity” for the purposes of Wis. Stat. § 895.52(2).

Anderson v. Kayser Ford, Inc. (Duty to Defend)

Posted on by Hamilton

In Anderson v. Kayser Ford, Inc. (2017AP2018), the Court of Appeals District IV held that insurers have a duty to defend insureds in lawsuits where the only indemnifiable claim is dismissed (leaving only noncovered claims to be litigated at the trial level) because the indemnifiable claim could recur on appeal.

Jody Anderson filed this lawsuit against Kayser Ford, making four claims. A circuit court ruled that Kayser’s insurer, Regent Insurance Co., had an obligation to indemnify Kayser only on Anderson’s first claim. The partial summary judgment decision left a trial only on Anderson’s fourth claim, on which Regent had no duty to indemnify Kayser if Anderson prevailed.

Regent argued that, since the only indemnifiable claim had been dismissed, it had no duty to defend Kayser in the litigation on the fourth claim. The appeals court rejected Regent’s argument, stating that the indemnifiable first claim could recur in an appeal.

The “four-corners test” requires courts to uphold insurers’ duty to defend so long as there is a possibility the insurer might be obligated to indemnify the insured under the “four corners” of the complaint. Wisconsin courts also follow the “entire suit rule,” which requires insurers to defend the insured in an entire lawsuit, even if the insurer only has an obligation to indemnify in one of the claims in the lawsuit.

Based on the four-corners test and the entire suit rule, the appeals court determined Regent had a duty to defend Kayser in this case. Although the indemnifiable claim had been dismissed, the partial summary judgment was not a final decision, leaving the possibility that Anderson could bring the indemnifiable first claim back on appeal. Whether or not an indemnifiable claim remains after the circuit court level, the court said the insurer’s duty to defend only ends when a final settlement is reached or the litigation has come to a final conclusion, with no more appeals available.

Manthe v. DOT (Condemnation)

Posted on by Hamilton

In Manthe v. DOT (2017AP1598), the Court of Appeals District IV held that Wisconsin’s freeway statute (Wis. Stat. § 84.295(3)) does not violate equal protection rights and denied damages to a property owner following the condemnation of his property by the state Department of Transportation (DOT).

Manthe’s property is located on either side of Highway 51. When DOT expanded Highway 51 from two to four lanes, Manthe lost the ability to cross the highway at a single location, and thus the route between his two parcels of property increased by two miles. Manthe argued he should be compensated for the increased travel time.

 

Designation of Highway 51 as Freeway

First, Manthe requested a writ of mandamus compelling DOT to designate Highway 51 (currently a controlled access highway) as a freeway. Wisconsin statutes entitle to compensation only landowners with property abutting a freeway. The court declined to require the designation of Highway 51 as a freeway because Wis. Stat. § 84.295(3) and related statutes give DOT the discretion, not a requirement, to designate freeways.

 

Equal Protection Challenge

Manthe’s equal protection challenge to Wis. Stat. § 84.295(3) argued that the statute creates two distinct groups: 1) landowners with property abutting a freeway and 2) landowners with property abutting a controlled access highway. Manthe contended that these two groups are similarly situated because Wis. Stat. § 84.295(3) allows DOT to designate identically constructed roadways as either a freeway or a controlled access highway. The groups are then given unequal treatment under the law because only landowners abutting freeways are entitled to compensation.

However, the court agreed with DOT’s analysis of the constitutionality of the statute, stating that the two groups are not similarly situated because landowners abutting controlled access highways may still have driveway access to the highway. The court declined to analyze whether there is a rational basis for the unequal treatment of the two groups because they are not similarly situated.

 

Compensation for Loss of Time

The court denied Manthe’s request for damages for increased travel time between his two property parcels that are separated by Highway 51. The court relied on prior case law stating that only loss of direct access is compensable. In this case, Manthe’s property still had direct access to the highway.

Furthermore, the court said compensation for loss of time under Wis. Stat. § 32.09 is not applicable because DOT took only a small part of Manthe’s land, so there was no actual taking of property.

Hinrichs v. DOW Chemical Co. (Fraudulent Representation)

Posted on by Hamilton

In Hinrichs v. DOW Chemical Co. (2017AP2361), the Court of Appeals District II dismissed misrepresentation claims on the basis of the economic loss doctrine, but ruled the plaintiffs might be considered “the public” for the purposes of bringing forth a fraudulent representation claim.

 

Facts

Chris Hinrichs developed acrylic skylight panels for vehicles and owned Autovation Limited, which manufactured, distributed, and installed the panels. Autovation used a DOW Chemical adhesive to install the panels. When Hinrichs discovered some of the panels were cracking, an agent from DOW issued him a report stating that the adhesives were properly functioning. However, Hinrichs later discovered that the adhesives in the panels were in fact failing, damaging his products and significantly affecting his sales. Hinrichs and Autovation filed the instant claims of negligent misrepresentation, intentional misrepresentation, strict responsibility misrepresentation, and violation of Wisconsin’s fraudulent representations statute (Wis. Stat. § 100.18).

 

Economic Loss Doctrine

The court barred Hinrichs’s misrepresentation claims on the basis of the economic loss doctrine, which provides that plaintiffs cannot sue to recover solely economic losses from the nonperformance of a contract.

The court ruled the “fraud in inducement” exception to the economic loss doctrine did not apply because the misrepresentation did not occur before Hinrichs’s contract with DOW was formed and because the alleged misrepresentation was not extraneous to the contract. The “other property” exception to the economic loss doctrine did not apply because the damaged panels and the adhesive the parities contracted for were parts of an integrated system. Furthermore, Hindrichs could have foreseen that failure of the adhesives would damage the panels.

In short, Hinrichs and DOW had the opportunity to address these circumstances in their contract and, since they declined to do so, Hinrichs is not entitled to damages for economic loss.

 

Fraudulent Representation

 The court found that the plaintiffs’ complaint against DOW made a sufficient case for the claim of untrue, deceptive, or misleading representations under Wis. Stat. § 100.18 to go forward. However, the court was still unclear on whether Hinrichs and Autovation are members of “the public” who can bring a fraudulent representation claim against DOW. The appeals court remanded this aspect of the case, asking the circuit court to address whether Hinrichs and Autovation had a significant enough relationship with DOW to prohibit them from claiming fraudulent representation.

Nutt v. Union Pacific Railroad Co. (Driver Negligence)

Posted on by Hamilton

In Nutt v. Union Pacific Railroad Co. (2018AP695), the Court of Appeals District III held that Union Pacific was not liable for injuries to a driver struck at a railroad crossing.

A Union Pacific train struck Jordan Nutt at a crossing in Baldwin, Wisconsin. The crossing had a stop sign and a retroreflective railroad crossing sign to warn drivers of approaching trains. Nutt failed to yield to the approaching train and did not come to a complete stop at the stop sign. The train conductors appropriately sounded the horn and applied the emergency brake but could not stop in time to avoid hitting Nutt, who was rolling through the stop sign and onto the tracks. Nutt filed the instant negligence claims against Union Pacific.

First, Nutt argued Union Pacific should have installed flashing lights and gates at the crossing, instead of just the railroad crossing sign. However, the court ruled that, because the sign was installed using federal funds, the Federal Railroad Safety Act preempted Nutt’s claim.

Second, Nutt argued Union Pacific illegally installed the stop sign at the crossing. According to Nutt, without the stop sign, he would not have slowed to a rolling stop and would have made it through the intersection in time to avoid the train. The court ruled that there was no evidence that Union Pacific installed the stop sign. Furthermore, there was not evidence that the accident would have occurred if Nutt had followed the law and came to a complete stop at the stop sign.

Finally, Nutt argued Union Pacific’s negligent maintenance of the vegetation and roadbed at the crossing caused the accident. The court found no evidence that Nutt’s view of the tracks was obstructed by vegetation, nor that Union Pacific violated Wis. Stat. § 195.29(6), requiring 330 feet of vegetation cleared along the tracks in each direction. The court also denied Nutt’s claim that Union Pacific’s roadbed maintenance created an illegal and dangerous “hump” that contributed to the accident.

Overall, the court found that summary judgment was appropriate under Wisconsin’s comparative negligence statutes (Wis. Stat. § 895.045(1)) because Nutt’s negligence clearly exceeded Union Pacific’s.

ATRA Report Highlights Rise of Public Nuisance Lawsuits

Posted on by Hamilton

A recent report from the American Tort Reform Association (ATRA) outlines the rise in recent years of private plaintiff attorneys bringing lawsuits against businesses on behalf of local governments. Local litigation seeks to hold private businesses liable for broad issues including lead paint, contaminants such as PFAS and PCBs, opioids, and even the global issue of climate change. Plaintiffs are using vague “public nuisance” theory to support their claims.

For example, in the climate change cases, municipalities are using state and federal common laws of public nuisance to seek damages from fossil fuel companies. The localities argue fossil fuel companies should pay for infrastructure protecting against rising sea levels and temperatures because their carbon emissions contribute to global warming. Despite losses at the federal circuit court level, activist local governments are continuing to pursue climate change cases for political purposes, claiming they are drawing attention to the issue that Congress and the executive branch have “failed” to act upon.

In the opioid cases, plaintiff localities are accusing pharmaceutical companies of downplaying risks and illegally touting benefits of opioid products to medical professional prescribers, which plaintiffs claim led to the “public nuisance” of the opioid crisis. Over 1,000 opioid lawsuits across 40 states are ongoing. Many local lawsuits have been consolidated into federal court in Ohio, while others are being pursued in state courts. The local lawsuits are in addition to – and undermining – over 40 state attorneys general who are investigating and suing at the state level.

A recent decision in California state courts has further opened the door to broad public nuisance litigation. Plaintiff localities in the case argue the defendants’ promotion of then-legal lead paint created the current “public nuisance” of lead paint in homes. A California appeals court ordered the three defendants to pay a $409 million abatement fund to find and remediate residential lead paint. Although the defendants stopped promoting and selling lead paint once science began to show its harmful effects and the plaintiffs failed to show the defendants actually caused any real harm, the three defendant companies were held individually liable for the statewide issue that involved may additional actors, including homeowners, landlords, and even the state of California itself.

The ATRA report argues that not only do duplicative local lawsuits violate what in many states are constitutional powers given to the attorney general, they also cost local and state government more money in legal fees that could go to real policy solutions. ATRA suggests solutions including transparency laws for local governments retaining outside counsel and giving state attorneys general author to intervene in local lawsuits in order to curb costly and ineffective local litigation.