Author: Hamilton

Court of Appeals Decision: Lamar Central Outdoor, LLC v. DOT (Billboard Nonconforming Use)

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In Lamar Central Outdoor, LLC v. DOT (2017AP1823), the Court of Appeals District IV held that the enlargement of a nonconforming outdoor advertising sign along an interstate highway caused it to lose its nonconforming status, making it illegal and subject to removal.

The sign in this case was erected on a state highway in 1991. When the highway became an interstate in 1996, the sign became legal but nonconforming according to state law. Lamar acquired the nonconforming sign in 1999 and later added extensions to it. In 2012, Lamar sought a permit from the Department of Transportation (DOT) to remove vegetation obstructing the sign. From the photographs in Lamar’s permit application, DOT recognized that the sign had been enlarged by the extensions in violation of Wis. Admin. Code § TRANS 201.10(2)(e), causing it to lose its nonconforming status. DOT ordered Lamar to remove the sign.

Lamar argues that DOT cannot order the removal of the sign because:

  1. DOT had insufficient evidence that the sign was enlarged beyond legal limits.
  2. Enlarging the sign is not prohibited under Wisconsin law and administrative code.
  3. If enlargement is illegal, Lamar should have had the right to cure the violation.
  4. DOT did not engage in the proper rulemaking process in order to enforce removal of the sign, since it previously treated extensions inconsistently.
  5. Common law says that only enlargement changing the use of the sign would invalidate its legal nonconforming use.

The court rejected all of Lamar’s arguments as follows:

  1. The photographs of the enlarged sign in addition to Lamar’s internal records provided ample evidence to DOT that the sign was illegally enlarged.
  2. Wisconsin law and administrative code do prohibit enlarging legal but nonconforming signs. Wis. Stat. § 84.30(14) gives DOT the authority to promulgate rules related to outdoor advertising. Wis. Admin. Code § TRANS 201.10(2)(e) states that nonconforming signs may not be enlarged after the effective date of state law. The court construed the “effective date of state law” as 1996, when the highway became an interstate, making the enlargements after Lamar acquired the sign in 1999 illegal.
  3. Stat. § 84.30(11) provides that owners of “signs erected…in violation” have the right to 60 days to cure the violation. However, the court construed the text of § 84.30(11) to apply only to signs in violation at the time of their erection, not to signs with violations occurring later.
  4. DOT was not required to promulgate a rule to enforce the removal of Lamar’s sign because its change in enforcement brought it into conformity with the statutes. This “error-correcting exception” to the requirement for agency rulemaking applies in this case because DOT’s order to remove Lamar’s sign was consistent with Wis. Stat. § 84.30(11).
  5. The statutes and DOT regulations control this case, not common law.

Court of Appeals Decision: Damien Berg v. Bradley Maxfield, M.D. (Medical Negligence)

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In Damien Berg v. Bradley Maxfield, M.D. (2017AP1448), the Court of Appeals District IV upheld summary judgment dismissing patient Berg’s medical negligence claim against Dr. Maxfield.

Dr. Maxfield performed a voiding cystourethrogram (VCUG) procedure on Berg but did not interpret any remarkable results from the images. Berg consulted another doctor, who found a mass of plastic tubing on Berg’s bladder, which had to be surgically removed.

Berg filed a negligence action against Dr. Maxfield, believing initially that Dr. Maxfield failed to remove plastic tubing during the VCUG. However, in depositions, Dr. Maxfield and the two doctors who found the tubing and performed Berg’s removal surgery all testified that the tubing found in Berg could not have been from the VCUG Dr. Maxfield performed.

When Dr. Maxfield moved for summary judgment, Berg asked for more time to investigate Dr. Maxfield’s liability based on the previous deposition testimony. Berg also requested permission for an additional expert. The appeals court denied Berg’s claims and upheld the circuit court’s grant of summary judgment in favor of Dr. Maxfield, stating that Berg could reasonably have discovered previously that the tubing found in his bladder was not from Dr. Maxfield’s negligence in performing the VCUG. Furthermore, Berg cited no legal authority that would grant him more time to investigate other potential negligence by Dr. Maxfield.

 

Court of Appeals Decision: Joshua Balde v. Olivia Haas (Vehicle and Property Coverage)

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In Joshua Balde v. Olivia Haas (2017AP2173), the Court of Appeals District III held that, in a coverage dispute related to a UTV accident, coverage from the property insurer was not due because another insurer covered the UTV.

Mt. Morris Mutual Insurance Co. issued an insurance policy on the property where the accident occurred. The Mt. Morris policy defined an insured as someone permissibly operating motor equipment on the property “if there is no other insurance covering the liability available to them.”

Wisconsin Mutual Insurance Co. issued an insurance policy on the UTV. However, since its policy only applied excess coverage over other applicable insurance policies, Wisconsin Mutual argued it is not an “available” insurance as stated in the Mt. Morris policy.

The court sided with Mt. Morris because the plain language of its policy states that the UTV driver is not an insured because the Wisconsin Mutual policy was “available” to her.

Court of Appeals Decision: Veritas Steel, LLC v. Lunda Construction Co. (Successor Liability)

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In Veritas Steel, LLC v. Lunda Construction Co. (2017AP822), the Court of Appeals District IV maintained a narrow application of the “de facto merger” and “mere continuation” exceptions to Wisconsin’s general rule against successor liability.

Construction contractor Lunda had secured a $16 million judgment against steel fabricator PDM Bridge, LLC. PDM also owed other lenders approximately $76 million. Those lenders used a series of transactions to acquire PDM’s assets, which were ultimately obtained by the entity Veritas. PDM could not satisfy Lunda’s $16 million judgment, and Lunda sought the instant successor liability claim against Veritas.

Relying on Wisconsin Supreme Court precedent in Fish v. Amsted Indus. Inc., the court of appeals dismissed Lunda’s claim for an exception to successor liability because there was not evidence showing identity of ownership between the original and successor entity. Under Fish, exceptions to successor liability include de facto mergers and cases where “the purchaser corporation is merely a continuation of the seller corporation.” Fish stated that these exceptions apply when there is an identity of ownership, evidenced by a transfer of ownership for stock or a continuity of owners between the selling and purchasing entities.

Lunda argued that an identity of control could show a mere continuation from seller to purchaser, establishing successor liability. In this case, Lunda said the purchasing entity had pre-acquisition control over seller PDM; therefore, the transaction was a mere continuation. The court acknowledged the tension between its narrow reading of the de facto merger and mere continuation exceptions in Fish and the ability of entities to achieve what is essentially a merger or continuation without satisfying the strict “identity of ownership” requirement. However, the court said it is bound by Fish, and only the Supreme Court could change this interpretation of the exceptions. Since Lunda failed to establish an identity of ownership between Veritas and PDM, the court dismissed its successor liability claim based on the mere continuation and de facto merger exceptions.

Federal District Court Strikes Down ACA Mandate

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A federal district court in Texas has ruled that the Affordable Care Act’s (ACA) individual mandate is unconstitutional. The court further found that, because the individual mandate is “essential” to the ACA, the remaining provisions of the law are also invalid.

Congress zeroed out the tax penalty appropriation, yet left in place the ACA’s individual mandate, in the federal tax reform bill in December 2017. Wisconsin, along with 18 other states, has led the lawsuit arguing that the remaining mandate, without an active tax penalty, violates the Commerce Clause of the U.S. Constitution, and Congress does not have the constitutional authority to compel citizens to purchase health insurance.

The district court did not place an immediate injunction on enforcement of the law, so there will be no immediate impact to 2019 coverage under the ACA. It is expected that the case will be appealed eventually to the U.S. Supreme Court.

Wisconsin Civil Justice Council Releases 2018 President’s Report

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WCJC released today the 2018 President’s Report from WCJC President Bill G. Smith. The report overviews WCJC’s successful 2017-18 legislative session.

Earlier this year, WCJC lobbied in support of 2017 Assembly Bill 773, which was signed into law by Gov. Scott Walker as 2017 Wisconsin Act 235. Act 235 amended Wisconsin’s civil discovery laws, which will reduce costs for businesses by curtailing the amounts of unnecessary, expensive discovery, and make Wisconsin the first state in the nation to shine the light on third-party litigation funding, the growing practice in which third parties “invest” in litigation and drive up the cost of lawsuits.

In addition to legislation, WCJC is also vigilant with respect to the courts. The biggest victory in 2018 before the Supreme Court was Mayo v. Wisconsin Injured Patients and Families Compensation Fund, where the Court upheld Wisconsin’s statutory limit on noneconomic damages in medical malpractice cases.

Finally, WCJC issued its comprehensive 2018 Guide to the Wisconsin Supreme Court and Judicial Evaluation, which reviews the most important cases decided by the Court affecting the business community.

WCJC has been extremely active again in 2017-18, and looks forward to continued success in 2019.

Download the 2018 President’s Report here: https://www.wisciviljusticecouncil.org/wwcms/wp-content/uploads/2018/12/Presidents-report-2018.pdf.

In Extraordinary Session, Wisconsin Legislature Approves Additional Oversight of AG Settlements

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In an extraordinary session on Dec. 4, the Wisconsin Senate and Assembly passed legislation giving the legislature additional oversight of settlements pursued by the state attorney general. The legislation provides a more stable, predictable regulatory and litigation environment for Wisconsin businesses by limiting the authority of activist attorneys general.

The extraordinary session legislation 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.

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.

It is anticipated that Gov. Scott Walker will sign the legislation into law later this month.

Read about other legislation passed in the extraordinary session.

 

 

2018-19 ATRA Judicial Hellholes Report Highlights Wis. Accomplishments

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The American Tort Reform Association recently released its 2018-19 Judicial Hellholes report. While the report’s focus is to recognize some of the worst-ranking civil justice climates in the country, the report also highlights several “Points of Light,” including civil justice reform accomplishments in Wisconsin over the past year.

The report recognizes the Wisconsin Supreme Court’s decision to uphold the constitutionality of a $750,000 limit on noneconomic damages in medical malpractice cases (Mayo v. Wisconsin Injured Patients and Families Compensation Fund, 2018 WI 78). WCJC had filed an amicus brief in the case, successfully arguing that the liability limit is constitutional.

The report also highlights civil justice reforms in AB 773 (signed into law as 2017 Wisconsin Act 235). Act 235 enacted several e-discovery and class action reforms to lower the costs of litigation for businesses, as well as groundbreaking provisions requiring transparency in third-party litigation funding.

Supreme Court December Oral Arguments

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The Wisconsin Supreme Court will meet just once for oral arguments in December. Of note, the Dec. 11 oral arguments include West Bend Mutual Insurance Co. v. Ixthus Medical Supply, Inc. The case will determine whether West Bend has a duty to defend Ixthus in a case involving the alleged illegal domestic sale of diabetic glucose test strips.

Health care manufacturing company Abbott filed a suit against Ixthus, claiming that Ixthus wrongfully diverted test strips intended for international markets to domestic markets. Ixthus subsequently filed a claim with its insurer West Bend for a covered “advertising injury” under its policy.

West Bend argues there is no coverage because the policy also contained an exclusion for instances where the insured knowingly violates the rights of another. West Bend also argues there is no connection between Ixthus’s covered advertising activity and the injury to Abbott.

The Supreme Court will review the Court of Appeals District II decision that granted Ixthus coverage.

3rd District Court of Appeals Decision: Engelking v. Enbridge (Pipeline Right of Way Grant)

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The Court of Appeals District III held in Engelking v. Enbridge (2017AP2450) that property owners’ future damages claims against Enbridge for pipelines located on their property were barred by claim preclusion. The appeals court also upheld summary judgment in favor of Enbridge, allowing it to continue transporting natural gas liquids (NGLs) via the pipelines.

Property owners Barbara and Jeremy Engelking inherited a Right of Way Grant from their predecessor in title. The grant allowed Enbridge right of way to transport “crude petroleum, its products and derivatives” via the pipelines on the Engelking property.

The Engelkings had filed a previous action against Enbridge in 2010, seeking damages for trespass and unjust enrichment from the pipelines on their property. The Engelkings argued the instant case is distinct from their 2010 claims because they sought future damages, whereas the 2010 claims sought remedy for past damages. However, the court ruled that the 2010 claims precluded the instant case because the Engelkings did have the opportunity to pursue future economic damages claims in 2010.

The Engelkings also argued the grant did not allow Enbridge to transport NGLs via the pipelines on their property because NGLs are not a derivative of crude petroleum. However, the court ruled the grant’s language as unambiguously including NGLs as an eligible derivative of crude petroleum, citing an Enbridge chemical engineer’s affidavit. The court upheld summary judgment in favor of Enbridge accordingly.