Category: Courts of Appeals

Storm v. Wisconsin Mutual Insurance Co. (UIM Reducing Clause)

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In Storm v. Wisconsin Mutual Insurance Co. (2018AP1285), the Court of Appeals District III found that an insurer gave proper notice to its insured about a policy change adding a reducing clause. Therefore, the policy was valid, and the underinsured motorist (UIM) limit was properly reduced.

Teresa Storm was injured in a car accident and sued the other drivers and their insurers. After receiving the policy limit of $50,000 from one of the other drivers, Storm sought the $100,000 UIM coverage limit from her own insurer Wisconsin Mutual. Wisconsin Mutual paid Storm $50,000 based on the reducing clause in Storm’s policy.

On appeal, Storm argued that the reducing clause in her policy was invalid because Wisconsin Mutual failed to provide her proper notice under Wis. Stat. § 631.36(5) when it added the reducing clause to her policy. Section 631.36(5) requires insurers to notify policyholders sixty days prior to renewal when the renewing policy contains new terms less favorable to the insured.

The court found that the reducing clause was valid because Wisconsin Mutual did provide notice to Storm more than sixty days prior to when her policy was renewed with the reducing clause. Wisconsin Mutual sent an initial letter informing Storm of new legislation that allowed UIM reducing clauses. The initial letter noted that Storm’s coverage would change upon her next policy renewal. Wisconsin Mutual sent a second notification letter to Storm when her policy actually renewed with the new UIM reducing clause several months later.

The court rejected Storm’s argument that Wisconsin Mutual’s sixty day notice was untimely because Wisconsin Mutual sent the initial letter more than sixty days before Storm’s policy changed. Additionally, even if the initial letter did not suffice as notification under § 631.36(5), the statute provides that, upon violation, the original policy applies for an additional renewal period. Storm’s additional renewal period of six months had expired by the time the accident occurred, so the new policy with the reducing clause applied.

Because the court found the reducing clause in Storm’s policy valid, Storm’s $100,000 UIM coverage limit was reduced by the $50,000 paid to Storm by the other driver in the accident.

Hendrix v. Secura Insurance (Safe Place Statute)

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In Hendrix v. Secura Insurance (2018AP1103), the Court of Appeals District III allowed a plaintiff’s slip-and-fall safe place statute claim against the operator of a parking lot to proceed. The court found that the operator of the parking lot, Dedicated Fleet Services, could have had constructive notice of the unsafe condition, whereas the owner of the parking lot, 4X Corp., did not have constructive notice, dismissing 4X from the safe place statute claim.

Plaintiff George Hendrix slipped and fell in the parking lot of Dedicated Fleet Services. Hendrix then filed the instant safe place statute and negligence claims against Dedicated Fleet Services and 4X, which leased the parking lot to Dedicated Fleet Services.

Dedicated Fleet Services moved for summary judgment, arguing it did not have control over the snow removal and Hendrix did not provide evidence that Dedicated Fleet Services had constructive notice of the hazard. Under Dedicated Fleet Services’s contract with 4X, Dedicated Fleet Services would inform 4X of any snowfall, and 4X would be responsible for snow removal on the premises. However, testimony indicated that Dedicated Fleet Services did not notify 4X of the snowfall that occurred just before Hendrix’s injury. Because it was disputed whether Dedicated Fleet Services followed appropriate procedures for snow removal, the court found there was an issue of material fact barring summary judgment for Dedicated Fleet Services. Hendrix’s claim against Dedicated Fleet Services was allowed to proceed.

4X also moved for summary judgment, arguing it did not have constructive notice of the unsafe condition in the parking lot. The circuit court granted 4X’s motion for summary judgment, agreeing that 4X, as owner of the property, was not responsible for day-to-day operations and would not have had notice of the unsafe snow in the parking lot. On appeal, Dedicated Fleet Services argued that the circuit court improperly dismissed the claims against 4X. However, the appeals court found that Dedicated Fleet Services had forfeited the argument against 4X by failing to oppose 4X’s motion for summary judgment at the circuit court level.

Lampe v. State Farm Mutual Insurance Co. (Future Medical Expenses)

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In Lampe v. State Farm Mutual Insurance Co. (2019AP656), the Court of Appeals District I found insufficient evidence for a jury award of future health care expenses to a plaintiff injured in a car accident.

Plaintiff Brian Lampe was injured in a car accident and sued the other driver and his insurer State Farm. The parties entered into a stipulation that the other driver’s negligence caused Lampe’s injuries, so the only question left at trial was the damages owed to Lampe.

At trial, the jury awarded Lampe $175,000, including $45,000 in future health care expenses. On appeal, State Farm argued there was insufficient evidence for the jury to award any future health care expenses to Lampe.

The appeals court agreed with State Farm and reversed the trial court award of future health care expenses. Awards of future health care expenses must be supported by expert testimony that future treatment is required and testimony on the cost of such treatment. The court found that expert testimony provided by Lampe failed to establish the cost of future treatment.

Although Lampe’s expert physician acknowledged Lampe might need future pain treatment, the physician did not specify the actual cost of the treatment nor how many treatments would be necessary. The court rejected Lampe’s argument that the jury could have calculated cost of future treatment based on Lampe’s past medical bills. Therefore, the jury had no basis on which to award future health care expenses.

Nooyen v. Wisconsin Electric Power Co. (Construction Statute of Repose)

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*This case is recommended for publication.

 

In Nooyen v. Wisconsin Electric Power Co. (2019AP289), the Court of Appeals District III dismissed safe place statute claims based on the plaintiff’s husband’s development of mesothelioma from asbestos. The court found the construction statute of repose barred the claims.

Norbert Nooyen was working on the construction of two nuclear power plants owned by the utility defendants Wisconsin Electric Power Co., Madison Gas & Electric Co., Wisconsin Power & Light Co., and Wisconsin Public Service Corp. In 2016, Nooyen was diagnosed with mesothelioma. Nooyen and his wife filed the instant lawsuit alleging that his mesothelioma was caused by asbestos at the plants and that the utilities violated the safe place statute (Wis. Stat. § 101.11(1)). The safe place statute states that owners have a duty to construct, repair and maintain buildings safely.

The court found that the construction statute of repose (Wis. Stat. § 893.89) barred the Nooyens’ safe place statute claim.[1] Previous case law holds that the statute of repose bars after ten years claims resulting from “structural defects” inherent to the construction of a building, but allows claims resulting from “unsafe conditions” due to improper maintenance and repair to proceed. At issue here was whether Nooyen’s injury resulted from a structural defect or unsafe condition.

Since Nooyen worked and was exposed to asbestos during the original construction of the power plants, the court found his injury resulted from a structural defect. Therefore, because the Nooyens filed their claim more than ten years after the power plants were completed, the statute of repose barred the Nooyens’ claims.

The court also found that the maintenance exception to the statute of repose did not apply to the Nooyens’ claims because the exception applies only to owners’ failure to maintain the construction itself, not failure to maintain a safe workplace, as plaintiffs had argued.

The court also rejected Nooyen’s argument that because the legislature included a statute of repose exception for actions based on latent diseases in 2011 products liability reforms, the Legislature now has embraced policy “to preserve rights of latent disease victims to recover.” The court found that the legislature would have to adopt a specific latent disease exception for the construction statute of repose for that public policy to apply.

Finally, the court found that the construction statute of repose, enacted in 1994, did apply to Nooyen’s claims because he was not diagnosed until 2016. The court held that its decision did not violate Nooyen’s constitutional right to a legal remedy (Wis. Const. Art. I § 9) because the statute of repose extinguishes the right to remedy after the repose period.

 

 

 

 

[1] WCJC helped shorten the construction statute of repose from ten years to seven years in 2017 Act 235. However, this case began in 2017 before the enactment of Act 235, so the ten year statute of repose applied.

Delglyn v. Equifax (Fair Credit Reporting Act)

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In Delglyn v. Equifax (2019AP232), the Court of Appeals District I dismissed the plaintiff’s claims that Equifax violated the federal Fair Credit Reporting Act (FCRA) in its responses to the plaintiff’s notices of disputed items on his credit report.

Plaintiff James Delglyn sent a notice of dispute to Equifax regarding four accounts on his credit report. The entity running each of the four accounts responded and verified Delglyn’s accounts, and Equifax informed Delglyn of the results. Delglyn filed two more notices of dispute to Equifax regarding some of the accounts. Equifax reinvestigated those accounts and informed Delglyn accordingly.

Delglyn filed the instant complaint against Equifax, alleging that he had been denied a loan based on the Equifax reports, which he claimed failed to comply with the FCRA.

The FCRA provides that credit reporting agencies like Equifax must follow “reasonable procedures” to ensure accuracy. If a consumer notifies the agency of a dispute, the agency must conduct a “reasonable investigation.” Consumers like Delglyn alleging violations of the FCRA must establish that there was inaccurate information on their credit report because the agency did not follow “reasonable procedures” and that the inaccuracy caused damages.

The court found that Equifax did conduct a “reasonable investigation” into the accuracy of Delglyn’s accounts. Since the entities running the accounts verified the information with Equifax, Delglyn could not demonstrate that there was inaccurate information on his credit report. Therefore, Delglyn did not suffer damages due to an inaccuracy caused by Equifax, so his claims were dismissed.

Kiewiz v. My Custom Shop, Inc. (Warranty)

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In Kiewiz v. My Custom Shop, Inc. (2018AP2008), the Court of Appeals District II dismissed the plaintiff’s claims of misrepresentation and breach of warranty against the dealer from whom he purchased a truck.

After test driving the truck, plaintiff Kiewiz bought the truck from My Custom Shop for $3,800. My Custom Shop told Kiewiz it would repair parts of the truck it had installed based on the part manufacturer’s warranty. But the written purchase contract and the buyer’s guide My Custom Shop provided to Kiewiz clearly stated that the sale of the truck was “as is” and disclaimed any warranty.

Kiewiz experienced several issues with the truck and eventually asked My Custom Shop for a full refund. My Custom Shop refused, and Kiewiz filed the instant claims for misrepresentation, fraudulent practices, breach of implied warranty, and violation of the federal Magnuson-Moss Warranty Act. The appeals court dismissed all of Kiewiz’s claims.

On misrepresentation (Wis. Stat. § 100.18), the court found that My Custom Shop had performed reasonable inspections and made no misrepresentations in the buyer’s guide. Furthermore, Kiewiz failed to show that any of My Custom Shop’s representations led him to purchase the truck and thus caused him to incur a loss.

On fraudulent practices (Wis. Stat. § 218.0163), the court again found that My Custom Shop had taken reasonable care when inspecting the vehicle, so Kiewiz could not prove fraud.

On breach of implied warranty (Wis. Stat. § 402.314), the court found that the buyer’s guide and purchase contract clearly stated that the sale was “as is,” thus precluding any implied warranty.

On the federal claim, the court found My Custom Shop did not violate the prohibition against dealers disclaiming warranties and service contracts. The federal law prohibition applies to written warranties, and My Custom Shop provided no written warranty to Kiewiz.

For these reasons, Kiewiz’s claims were dismissed.

Verkler v. YRC, Inc. (Civil Negligence)

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In Verkler v. YRC, Inc. (2018AP1531), the Court of Appeals District I ruled against Allstate Property & Casualty Insurance Co. in a civil negligence action brought after a car accident.

Allstate’s insured Victoria Southern crashed into a truck in YRC, Inc.’s driveway. Southern initially told law enforcement that she had been lost and was looking for an address but blacked out and could not remember the events prior to her accident. However, Southern reversed her testimony at trial, stating she no longer believed she blacked out before the accident. The YRC truck driver told law enforcement and testified at trial that Southern had caused the accident when she made a U-turn into the driveway.

In the civil trial that followed, a jury found that Southern was negligent. Allstate appealed the verdict and argued the circuit court erred in denying its request for a jury instruction on the emergency doctrine.

The emergency doctrine excuses drivers from negligence in an emergency they did not cause if they react to the emergency in a way that an ordinarily prudent person would. At trial, Allstate asked the court to give the jury an instruction on the emergency doctrine but the court declined. The court of appeals upheld the trial court’s denial of Allstate’s request. The court agreed that the emergency doctrine did not apply in this case because there was no evidence of an emergency, as Southern could not clearly recall the accident.

The appeals court also found credible evidence supported the jury’s verdict that Southern was negligent. There was evidence for the jury to find that Southern breached her duty of care by failing to see the truck with its lights on in the YRC driveway, causing the accident to occur in the driveway, making a U-turn in the driveway, and looking for addresses when she was lost instead of focusing on the road.

Parsons v. Associated Banc-Corp (WOCCA and Negligent Training & Supervision)

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In Parsons v. Associated Banc-Corp (2018AP2329), the Court of Appeals District I upheld the dismissal of plaintiffs’ claims against their bank for violation of the Wisconsin Organized Crime Control Act (WOCCA) and for negligent training and supervision.

The Parsons filed this case regarding a home equity loan and construction loan they obtained through the bank. The trial court dismissed the Parsons claims and the appeals court affirmed.

The appeals court declined to overturn what the Parsons argued were several procedural errors by the trial court. On the WOCCA claim, the appeals court agreed with the trial court that the Parsons had not established that the bank’s loan officer had engaged in a pattern of racketeering; therefore, the bank had no liability under WOCCA. On the negligent training and supervision claim, the court found that the bank did not have a duty of care to the Parsons under the loan contract, so the bank was not liable for the loan officer’s actions. Finally, the court held that the trial court was not required to determine damages when the Parsons failed to establish the bank’s liability.

Stroede v. Society Insurance (Duty of Care to Trespassers)

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*This case is recommended for publication.

 

In Stroede v. Society Insurance (2018AP1880/2018AP2371), the Court of Appeals District I found the defendant immune from liability for a trespasser’s injury because the defendant was a “lawful occupant” on the premises where the incident occurred.

Plaintiff David Stroede sustained head injuries when, after becoming too intoxicated, he was escorted out of Railroad Station Bar by employee Jacob Tetting. Stroede filed this negligence claim against Tetting and his insurer West Bend Mutual and Railroad and its insurer Society Insurance.

Wis. Stat. § 895.529 provides that a “possessor of real property” does not have a duty of care to trespassers unless the possessor acts “willfully, wantonly, or recklessly.” The circuit court agreed with the defendants’ arguments that Stroede was a trespasser at the time of the incident since Railroad staff had ordered him out of the bar. At issue on appeal was:

  1. Whether Stroede had adequately stated a claim of wanton, willful or reckless conduct, allowing his claims against Tetting to proceed even though he was trespassing.
  2. Whether Tetting was an “other lawful occupant” under the definition of “possessor of real property” in § 895.529, granting him immunity from liability for Stroede’s injuries.

First, the appeals court found that Stroede did not allege a claim of wanton, willful or reckless conduct. Instead, Stroede’s claim alleged negligence and did not demonstrate that Tetting intentionally caused him harm. The appeals court found the circuit court properly denied Stroede’s motion to amend his complaint to include a claim of wanton, willful or reckless conduct.

Second, the appeals court found that Tetting was an “other lawful occupant” of Railroad premises at the time of the incident. The court concluded occupancy in the context of § 895.529 to mean “lawful presence,” and Tetting was lawfully present at Railroad when he removed Stroede. Since Tetting was a “lawful occupant,” he had no duty of care to trespasser Stroede under § 895.529.

Under the court of appeals decision, neither Tetting nor Railroad was liable for Stroede’s injuries.

 

Fankhauser v. Hestad (Damages Award)

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In Fankhauser v. Hestad (2019AP110), the Court of Appeals District III upheld a $500,000 damages award against a garbage collector who was driving on a customer’s bridge when it collapsed.

Curtis Hestad, an employee of Allied Waste Services, drove an Allied vehicle onto the Fankhausers’ property. The Fankhausers had instructed Allied to use the west entrance to their property when collecting their garbage, instead of the east entrance. Access from the east entrance required crossing a bridge on the Fankhausers’ property. When Hestad drove to pick up the Fankhausers’ trash for the first time, his GPS took him to the east entrance, and he crossed the bridge. The bridge collapsed under the weight of Hestad’s truck.

The Fankhausers sued Hestad and Allied for negligence, and a jury awarded them $500,000 in damages. Hestad and Allied filed counterclaims for negligence and violation of the safe place statute, but the circuit court dismissed the counterclaims. Hestad and Allied appealed both the jury award and the dismissal of their counterclaims.

The appeals court upheld the dismissal of Hestad and Allied’s counterclaims, finding that Hestad was a trespasser on the Fankhausers’ property when the bridge collapsed. Wisconsin case law has established that landowners are not liable to trespassers, nor does the safe place statute protect trespassers. The court found Hestad to be a trespasser because the Fankhausers had specifically instructed Allied – and Allied had instructed Hestad – to use the west entrance to their property. Since Hestad did not have permission to enter via the east entrance, the court considered him a trespasser and dismissed the negligence and safe place statute claims.

The appeals court also upheld the jury award of $500,000 to the Fankhausers. The appeals court found:

  • The circuit court property denied the defendants’ motion for a directed verdict because there was sufficient evidence for the jury to determine the precollapse value of the bridge.
  • The $500,000 award was not excessive because there was credible evidence to support the award (i.e. replacement cost, lost property value without a replacement, the Fankhausers’ loss of privacy and loss of recreational and access uses of the bridge).
  • The circuit court properly denied cross-examination questions the defendants asked the Fankhausers about their maintenance of the bridge. The court determined that such questions would have confused the jury, since the Fankhausers’ negligence in bridge maintenance was not at issue.
  • The Fankhausers’ expert on replacement cost used reliable principles and methods.
  • The circuit court did not need to include separate questions on the special verdict for different categories of damages.

For these reasons, the appeals court affirmed the circuit court’s dismissal of Hestad and Allied’s counterclaims and upheld the jury award of $500,000 to the Fankhausers.