Category: Courts of Appeals

United America, LLC v. DOT (Nonstructural Damages in DOT Takings)

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*This case is recommended for publication.

 

In United America, LLC v. DOT (2018AP2383), the Court of Appeals District III held that nonstructural damages to private property are not compensable when the Department of Transportation (DOT) makes a change of grade to an abutting street.

When DOT changes the grade of a street or highway, landowners nearby may make claims for damages related to the change of grade, even if their land was not taken (Wis. Stat. § 32.18).

In this case, United America operated a gas station and convenience store on the property at issue. DOT completed a project that raised one of the streets at the intersection near United America’s property to match the grade of an overpass. The overpass significantly reduced vehicular access to United America’s gas station and convenience store, causing it to lose approximately 90 percent of its business. United America subsequently made a claim under § 32.18.

United America argued that “damages” under that statute include nonstructural damages such as reduction in commercial property value resulting from the change of grade. DOT argued that only structural, physical damages due to the change of grade are compensable under the statute.

The court agreed with DOT. The plain language of § 32.18 states that landowners can make claims for “any damages to said lands” from a change of grade. United America’s argument that “any damages” includes nonstructural damages – such as loss of business – would render the phrase “to said lands” superfluous. The Legislature did not specifically provide for damages for diminution in value in change of grade damages claims, as it has in other takings statutes. Therefore, non-physical damages related to lost property value or lost business are not compensable under § 32.18.

Welter v. LIRC (Worker’s Compensation)

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In Welter v. LIRC (2018AP1940), the Court of Appeals District III held that the plaintiff’s surgery was not compensable under Worker’s Compensation because her workplace injury had healed before the surgery.

Plaintiff Susan Welter served as a school bus monitor for Student Transit – Eau Claire. Welter had a knee replacement in 2003. In 2013, she experienced some knee pain but declined to undergo a second knee replacement at that time. In 2014, she slipped and fell on ice at work, and doctors said the work injury could have exacerbated her preexisting knee condition. Welter had a second knee replacement surgery in March 2014. Welter’s doctor said that the workplace injury caused her to undergo the knee replacement earlier than she would have had to otherwise.

A doctor hired by Student Transit opined that the injury caused by the workplace accident had healed by February 2014. The need for knee replacement was not caused by the slip and fall. In fact, the knee replacement had been recommended in 2013, before the fall.

Welter and Student Transit entered into an agreement on most of Welter’s Worker’s Compensation claims, but Welter later filed a Worker’s Compensation claim for medical expenses for costs related to her second knee replacement.

The Labor and Industry Review Commission agreed with Student Transit’s doctor that the workplace injury had healed before Welter’s second knee replacement surgery, so the surgery was not compensable under Worker’s Compensation. The appeals court found there was credible and substantial evidence in the doctor’s testimony to support the Commission’s finding. Therefore, Student Transit and its insurer were not liable for medical expenses related to Welter’s knee replacement surgery.

Southport Commons, LLC v. DOT (Inverse Condemnation)

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In Southport Commons, LLC v. DOT (2019AP130), the Court of Appeals District II held that claimants must file against the Department of Transportation (DOT) within three years after damage from DOT construction occurs, not after damage is discovered, according to Wis. Stat. § 88.87(2)(c).

Southport filed this lawsuit alleging damages from when DOT relocated an I-94 frontage road so that it bisected Southport’s property. DOT relocated the frontage road in 2008-09, but Southport didn’t learn of the damages until it received a survey and wetland delineation of its property 2016. Southport filed this lawsuit in 2017.

DOT argued the lawsuit was barred by § 88.87(2)(c), which allows property owners to file for damages from DOT “within three years after the alleged damage occurred.” Southport argued its lawsuit was timely because it filed within three years of discovering the damage.

Based on the plain language of the statute, the court rejected Southport’s argument that the three-year limitation period begins when damage is discovered. Other Wisconsin statutes of limitations distinguish between when damages are “discovered” and when they “occur.” Section § 88.87(2)(c) specifies the limitation begins upon occurrence, not discovery.

The court distinguished this case from Pruim v. Town of Ashford, where the court used “discovered” and “occurred” interchangeably. In that case, the discovery and occurrence happened contemporaneously, so the Pruim decision did not address the question at hand in Southport’s case.

Pennell v. American Family Mutual Insurance Co. (Jury Instructions)

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*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.

 

 

Martinez v. Regent Insurance Co. (Slip and Fall)

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In Martinez v. Regent Insurance Co. (2018AP1685), the Court of Appeals District IV denied a new trial for the plaintiff in this slip and fall case.

Jose Martinez slipped and fell at the Country Kitchen restaurant and filed this lawsuit seeking damages for his injuries. On appeal, Martinez argued that Country Kitchen had destroyed evidence, failed to disclose an expert witness, and provided misleading evidence at trial.

Country Kitchen had brought a private investigator as a witness at the trial, and Martinez argued that the private investigator should have been disclosed as an expert witness. The appeals court determined that the private investigator was not an expert witness because he did not rely on specialized knowledge but simply provided his observations of Martinez. Because the private investigator was a lay witness, Country Kitchen did not need to disclose him as an expert witness to Martinez. The appeals court further determined that the private investigator’s testimony was not misleading.

The appeals court also upheld the circuit court decision that the owner of Country Kitchen did not intentionally destroy surveillance footage of Martinez’s fall.

For these reasons, the appeals court upheld the circuit court decision denying Martinez a new trial.

Whittlesey v. LIRC (Unemployment Insurance)

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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.

Oneida County v. Sunflower Prop II, LLC (Pier Construction Permitting)

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*This case is recommended for publication.

 

In Oneida County v. Sunflower Prop II, LLC (2018AP2366), the Court of Appeals District III held that Wisconsin permit exemption laws for piers under Wis. Stat. §30.12(1g)(f) preempt municipal ordinances.  The court remanded to the circuit court as to whether the plaintiff’s pier in this case met the § 30.12(1g)(f) requirements.

Plaintiff Sunflower Properties constructed a new pier on its lakefront property. Oneida County said the pier violated county ordinances regarding the pier shape and width. Sunflower appealed the citation.

On appeal, the court agreed with Sunflower that municipal ordinances cannot apply to piers that qualify for a permit exemption under § 30.12(1g)(f). Sections 30.12 and 30.13 govern construction of piers without permits. Section 30.12(1g)(f) exempts a pier from permitting requirements if it meets certain criteria. Section 30.12(3)(1) also exempts a pier from permitting requirements if it meets a separate set of criteria, including the criterium that the pier does not violate municipal ordinances. (Section 30.13(2) allows municipalities to enact ordinances related to pier construction if they are not inconsistent with state statutes.)

The court agreed with Sunflower that piers meeting permit exemption requirements in § 30.12(1g)(f) do not have to comply with the § 30.13 requirement that the pier also meet municipal ordinances. A pier is exempt from permitting if it meets § 30.12(1g)(f) or § 30.13 requirements; piers are not required to meet both sets of permit exemption criteria.  

However, the court did not determine whether Sunflower met the § 30.12(1g)(f) requirements in this case. The case was remanded to circuit court to make that determination.

Mechanical, Inc. v. Venture Electrical Contractors, Inc. (Economic Loss Doctrine)

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*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.

Gunderson v. Franks (Personal Injury)

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In Gunderson v. Franks (2018AP981), the Court of Appeals District IV upheld a jury verdict on damages to a plaintiff involved in a vehicle accident. The plaintiff challenged the jury’s decisions on future damages and whether the court should have provided instruction on the collateral source rule.

Plaintiff Gunderson was injured in a vehicle accident caused by defendant Franks. Franks stipulated to her own negligence, so the question left for the jury was the extent of damages owed to Gunderson. The jury awarded Gunderson damages for past medical expenses, future medical expenses, past loss of earning capacity, and past pain and suffering. The jury did not award any damages for future loss of earning capacity, future pain and suffering, or loss of society and companionship of Gunderson’s son.

Gunderson appealed the jury’s verdict, arguing that

  1. The awarding of future medical expenses but not future pain and suffering was inconsistent.
  2. The jury should have been instructed on the collateral source rule, which provides that damages from the tortfeasor cannot be limited by outside benefits the plaintiff receives. In this case, Gunderson argued that instructions on the collateral source rule were necessary because the jury heard evidence about possible Social Security payments Gunderson received.
  3. There was insufficient evidence to support the award of $0 for future loss of earnings.

The appeals court upheld the verdict. The court found that

  1. The verdict was not inconsistent because there was evidence that Gunderson’s preexisting injuries could account for his future pain and suffering.
  2. Jury instructions on the collateral source rule were not necessary because the jury did not hear clear evidence that Gunderson did receive or would later receive Social Security payments.
  3. The jury heard evidence that Gunderson had extensive preexisting injuries, so the verdict awarding no future loss of earnings due to the accident was supported by credible evidence.

Defendant Franks had also filed a cross-appeal challenging the sanctions against her for failing to preserve data from the accident. The appeals court upheld those sanctions.

Wisconsin Courts Respond to COVID-19

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As Wisconsin government and the public struggle with the COVID-19 pandemic, Wisconsin courts remain operational but with reduced calendaring.

  • Subject to certain exceptions, all proceedings in Wisconsin courts are to be conducted via remote audio-video technology if practicable. (Supreme Court order)
  • Wisconsin Supreme Court March 18, March 30, and April 1 oral arguments cancelled. (More on oral arguments)
  • State courts administrative offices closed until at least April 3. (March 17 press release)
  • Some appellate filing deadlines extended and other filing procedures amended.  (Supreme Court order, extended order)
  • Nonemergency motions to the Court of Appeals and Supreme Court are discouraged through April 3. (Supreme Court order)
  • Many individual circuit courts have issued emergency orders related to COVID-19. (See COVID-19 tab at https://www.wicourts.gov/.)
  • The Supreme Court has also temporarily increased the number of credits from on-demand programs that lawyers may use to satisfy CLE requirements.
  • Civil and criminal jury trials are suspended until May 22.
  • The Supreme Court has postponed bar admissions ceremonies through May and instituted temporary procedures for admission to the bar.
  • The Supreme Court has established a temporary rule for the remote administration of oaths at depositions via remote audio-visual equipment.
  • The Supreme Court will hold a public hearing on May 1 (with written comments open until April 24) and its interim rule to temporarily suspend statutory deadlines for civil jury trials due to the pandemic.