In Rural Mutual Insurance Co. v. Kuhn North American, Inc. (2019AP001907), the Court affirmed a decision of summary judgement against Rural after they had failed to meet the deadline for disclosing lay witnesses.
Category: Editorials
Jasen Dane Ranch, LLC v. Nelson Hardwood Lumber Company, Inc. (Punitive Damages)
In Jasen Dane Ranch, LLC v. Nelson Hardwood Lumber Company, Inc. (2019AP1774), the Wisconsin Court of Appeals upheld a circuit court decision denying punitive damages under Wisconsin’s punitive damages statute.
Facts
J. Nelson Hardwood Lumber Company, Inc., mismarked a property boundary line and, as a result, erroneously harvested trees from a parcel that belonged to Jasen Dane Ranch, Inc. The sole legal question before the Court of Appeals was whether Jasen Dane Ranch, Inc. was entitled to punitive damages. (In other words, not just to the cost of the harvested trees, but extra money because of particularly malicious behavior.) The circuit court held they were not.
Decision
On appeal, Jasen Dane Ranch, Inc. brought two arguments: first, a claim that the circuit court applied the wrong standard of proof when it made its decision. And second, that Nelson Hardwood’s conduct satisfied the standard of conduct set forth in WIS. STAT. § 895.043(3) (Wisconsin’s punitive damages statute).
After an in-depth analysis of the relevant case law, the Court of Appeals upheld the trial court decision, determining that under the appropriate standard “a reasonable jury could not find by clear and convincing evidence that Nelson Hardwood was ‘aware’ that its conduct was ‘substantially certain to result in the [Jasen Dane Ranch, Inc’s] rights being disregarded.'” No punitive damages were warranted.
Scott Dhein v. Frankenmuth Mutual Insurance Company (Indemnification)
In Scott Dhein v. Frankenmuth Mutual Insurance Company (2019AP531) District II of the Wisconsin Court of Appeals reversed a summary judgement finding on multiple grounds, including finding that there is a genuine issue of material fact. Additionally, the court denied City Centre the use of the direct action statute.
Facts
City Centre, LLC and Frankenmuth Mutual Insurance Company appealed the summary judgment dismissal of City Centre’s claim for coverage against ACE American Insurance Company. City Centre is the owner of large parcel of land that it portions and leases out to multiple tenants. ACE is the CGL carrier for Broadwind, one of City Centre’s commercial tenants. “City Centre is an additional insured on the ACE policy pursuant to its lease with Broadwind. The lease provided contractual indemnification, requiring Broadwind to hold City Centre harmless for any injury caused in whole or in part by Broadwind’s negligence. City Centre was sued by Scott Dhein, an employee of Broadwind, following an accident on September 9, 2013. The accident occurred on property owned by City Centre but used by Broadwind on a daily basis in the course of its business. City Centre tendered coverage to ACE. ACE refused to provide a defense or coverage to City Centre.”
Decision
The court concluded that the additional insured endorsement provides coverage to City Centre for liability incurred for bodily injury caused by Broadwind’s “acts or omissions,” regardless of whether Broadwind is legally negligent. Additionally, “a genuine issue of material fact exists as to Broadwind’s causal negligence so as to trigger coverage for any resulting liability under the additional insured endorsement to the extent, upon further appeal, negligence is deemed a required element for coverage under the endorsement. Moreover, Broadwind has coverage under the same policy for certain contractual indemnification obligations it may owe to City Centre as a result of Broadwind’s negligence.” Finally, City Centre cannot invoke the direct action statute to enforce Broadwind’s rights to that coverage as the direct action statute only permits an action against a liability insurer to recover insurance proceeds attributable to a negligence action, where here Broadwind’s liability could only come from contractual indemnity.
Fond du Lac County v. Paul Meixensperger (Evictions)
In Fond du Lac County v. Paul Meixensperger (2019AP002195), the Wisconsin Court of Appeals ruled that Meixensperger had sufficient notice even though the complaint did not specify nonpayment of rent as a specific basis for eviction because he learned of it in the case and had opportunity to brief it.
Facts
Meixensperger rented an airplane hanger from Fond du Lac County. He failed to pay rent and the county filed suit to evict him. Prior to the start of trial, during argument on motions, counsel for Meixensperger acknowledged that Meixensperger had not paid the annual lump-sum rent for the year 2019, as required by the lease agreement. Based upon this, the county moved for judgment and the trial court ruled in the county’s favor.
Decision
On appeal, Meixensperger raised procedural issues, primarily that the complaint did not identify nonpayment of rent as a specific basis for eviction and that the county did not file a written motion seeking judgment on this basis in advance of trial. The county responded that any potential errors were harmless, pointing out that if Meixensperger was unduly surprised by the motion on the day of the scheduled court trial, that surprise was remedied when the court afforded the parties a full opportunity to address the issues upon Meixensperger’s motion for reconsideration.
The Court of Appeals agreed and upheld the decision.
Village of Chenequa v. Jill Dahlquist (City Parking Ordinances)
In Village of Chenequa v. Jill Dahlquist (2019AP001145), the Wisconsin Court of Appeals upheld a village parking ordinance.
Facts
The Village of Chenequa has a parking ordinance that generally prohibits parking on all Village highways and street. Jill Dahlquist drove into town to do some fishing, saw no “no parking” signs, and parked her car on a city street. She got a parking ticket. She appealed the ticket on the grounds that the parking ordinance violated state law.
Decision
The Court of Appeals began by noting that an ordinance receives every presumption in favor of its validity. Dahlquist argued that the ordinance’s regulation—essentially barring all highway and street parking—exceeds the enabling authority granted by the legislature, making the ordinance invalid and unenforceable.
The court found that to the contrary, “Under WIS. STAT. § 349.13(1e)(a), ‘local authorities’ are empowered to regulate parking by ‘prohibit[ing], limit[ing] the time of or otherwise restrict[ing]’ it. Therefore, the Village is expressly and specifically authorized to prohibit parking on Village highways and streets.”
Daniel J. Hennessy, Jr. v. Wells Fargo Bank, N.A. (Principles of Comity)
In Daniel J. Hennessy, Jr. v. Wells Fargo Bank, N.A. (2019AP001206), the Wisconsin Court of Appeals ruled that a Mexican court judgment applying Mexican law was valid in Wisconsin under principles of comity, a legal principle where political entities recognize each other’s judicial acts.
Facts
The Hennessys planned to build a new condominium building on property in the city of San José del Cabo located in Mexico. Mexican law limits ownership of certain types of real property by non-Mexican citizens such as the Hennessys. For this reason, the Hennessys placed the property (and mortgage) in trust with a Mexican entity as trustee. Per the agreement, if the Hennessys defaulted, and the bank holding the mortgage made a request, the Mexican trustee would “sell the Trust Property and use the income received from the sale to pay” the bank.
The Hennessys defaulted on the loan and Wells Fargo Bank initiated a form of foreclosure action in a Mexican federal court. The court awarded Wells Fargo Bank $ 7,500,000.00 plus interest.
After a failed appeal to the Mexican appellate courts, the Hennessys filed an action in Milwaukee County Circuit Court and sought a declaration “that Wells Fargo is barred from asserting any action or claim against the Hennessys to enforce any obligation under” the mortgage. The action was based on Wisconsin’s six-year statute of limitations for breach of contract claims. (WIS. STAT. § 893.43(1)) Separately, Wells Fargo Bank counterclaimed and asked the court to make the Mexican judgement enforceable.
After weighing this evidence and the arguments of the parties, the circuit court found that the Mexican judgment was valid under Mexican law and required enforcement under the principles of comity.
Decision
The Court of Appeals addressed two questions: whether the circuit court clearly erred in finding that the Mexican judgment was valid under Mexican law and whether it erroneously exercised its discretion in recognizing the Mexican judgment for domestication in Wisconsin. It sided with the circuit court on both issues.
After analyzing its role in reviewing the circuit court and contrasting the Hennessys’ claims with the actual fact findings, the court concluded: “[A]t most the Hennessys point to grounds for potential legitimate differences of opinion about what the Mexican court may have intended to establish in the Mexican judgment, but not to clear error by the circuit court.”
It also added on the comity issue,
“It is important to recognize that we review the circuit court’s comity decision based on the circuit court’s findings about Mexican law, including the degree to which the Mexican judgment represents a final judgment. The circuit court found that the Mexican judgment represented a judicial determination that Wells Fargo, as the creditor, could recover the deficiency after the sale of the Mexican property…We cannot say this was clear error.”
Friends of the Black River Forest v. DNR (Chapter 227 Judicial Review)
The Wisconsin Court of Appeals (District I) ruled September 15th that the the Friends of the Black River Forest alleged sufficient facts to satisfy a standing inquiry for judicial review under ch. 227
Facts
In 2014, Kohler Company, a Wisconsin manufacturing business, approached the Department of Natural Resources (DNR) for a land exchange in order to build a golf course. After negotiation, the two agreed that Kohler would deed 9.5 acres of land to Kohler-Andrae State Park in exchange for 4.59 acres of land inside the park and an easement on an additional 1.88 acres for its golf course. The Department of Natural Resources Board approved the land exchange on February 28, 2018.
In response, Friends of the Black River Forest filed a Wis. Stat. Chapter 227 petition seeking judicial review of the land exchange. Kohler Company petitioned to intervene and filed a motion to dismiss the case, arguing that the plaintiffs lacked standing, the land exchange was not a “decision” subject to judicial review under ch. 227, and that the land exchange was a ministerial act that is unreviewable under ch. 227. The circuit court dismissed the case on the standing argument.
Decision
Wis. Stat. § 227.52 permits judicial review of“[a]dministrative decisions which adversely affect the substantial interests of any person.”
The Friends of the Black River Forest stated the decision adversely affected them because (among other things), it “permanently eliminates their opportunity to use land” currently available for their enjoyment and would increase noise for local homeowners. The Court of Appeals agreed, finding the “anticipated recreational, aesthetic, and conservational injuries” sufficient to bring the case.
The case returns to the circuit court where the challenge will continue.
Friends of Frame Park, U.A. v. City of Waukesha (Open Records Requests)
In a published decision released September 16th, the Wisconsin Court of Appeals (District II) awarded attorneys fees to the Friends of Frame Park because their lawsuit over an open records request played a “substantial factor” in the release of the records.
Facts
In response to the City of Waukesha building a baseball stadium in Frame Park, a group of Waukesha citizens, property owners, and taxpayer formed Friends of Frame Park to track how the stadium used taxpayer funds.
In 2017, Friends of Frame Park submitted an open records request to the City of Waukesha for any letters of intent, memorandum of understanding, or lease agreements between the City and Big Top Baseball, a private organization that runs several baseball franchises.
The City denied the request, citing an exception to open records requests where “competitive or bargaining reasons” require it. Friends of Frame Park sued. Two days later, the City sent the draft contract since there was “no longer any need to protect the City’s negotiating and bargaining position.” The City then sought to dismiss the case.
Friends of Frame Park moved for court costs and attorneys fees, per Wis. Stat. § 19.37(2)(a), since a plaintiff can recover attorneys fees even if the record is disclosed so long as the lawsuit played a “substantial factor” in the disclosure. The City claimed the lawsuit did not play a substantial factor and that it would have released the contract anyway because the “competitive or bargaining ” exception no longer existed.
Decision
The Court of Appeals began its analysis by describing the confused case law about causation in public records lawsuits, finding it would lead to “absurd results” to credit a lawsuit every time the government releases an open records request after someone sued. It found:
This discussion is not meant to be entirely dismissive of causation, particularly given the significant precedent on which it is based. Rather, we seek to clarify the application of that test where, as here, an authority claims that the expiration of a public record exception, rather than the requester’s lawsuit, was the reason for what would otherwise be an unreasonable delay in the release of a record.
The court then turned to whether the City properly invoked the “competitive or bargaining reasons” exception, stating: “[S]everal cases focus on whether an unreasonable delay was caused by the authority’s improper reliance on an exception under the public records law, regardless of the subsequent voluntary disclosure.”
The court concluded that the exception was unwarranted as the City could not prove it would suffer harm from releasing the documents or on other grounds, adding “the evidence shows that the only competition was from one or more business groups that may have been working to locate a Northwoods League team in a different municipality.”
The City thus did not meet the high burden of proof necessary for denying an open records request and the Court of Appeals remanded the case to the trial court to determine the appropriate amount of attorney fees.
Haugen v. Northern State Bank (Negligence)
In Haugen v. Northern State Bank (2019AP746), the Court of Appeals affirmed a circuit court’s order barring Haugen from a tort claim against Northern State Bank for an injury caused by an over 10 years old structural defect over.
Facts
While a customer at Northern State Bank, Haugen asked to use the restroom and an employee directed him down a carpeted hallway that joined the original bank building to an adjacent building bought in 1972. Because the main floors were built at different levels, the hallway connecting the buildings had a slight incline of 4 and 1/8 inches over a distance of 21 inches. This incline allegedly caused Haugen to stumble and hurt his shoulder. He sued the bank for negligence.
The Bank moved for summary judgement under Wis. Stat. § 893.89, which bars any claims resulting from injuries caused by structural defects beginning ten years after a structure is substantially completed.
Decision
Haugen argued that pursuant to Wis. Stat. § 893.89(4)(c), the statute of repose does not protect “[a]n owner or occupier of real property for damages resulting from negligence in the maintenance, operation or inspection of an improvement to real property.”
The Court of Appeals, however, ruled that his argument did “not provide evidentiary facts sufficient to oppose summary judgment.” Therefore, the circuit court properly granted the bank summary judgement.
Timothy M. Casa De Calvo, Jr. v. Town of Hudson (Adverse Possession)
In Timothy M. Casa De Calvo, Jr. v. Town of Hudson (2019AP185), the Wisconsin Court of Appeals upheld a circuit court decision dismissing an adverse possession claim against the Town of Hudson because the specific property was held by the Town “for highway purposes” and so not subject to adverse possession.
Facts
Casa De Calvo purchased 3 property lots in a newly formed subdivision in 1986. He subsequently built a house and driveway on the property. The driveway was built over a platted but unimproved portion of the subdivision that was originally supposed to continue the road. Casa De Calvo did not believe the town would ever pave the section so he continued to improve and use the driveway. In 2017, he commenced a lawsuit against the Town of Hudson to claim adverse possession of the strip of land. He indisputably adversely possessed the platted but unimproved portion for the requisite 20 years.
The Town argued that Casa De Calvo still could not claim adverse possession because the property was “for highway purposes” and therefore, under Wis. Stat. § 893.29(2)(c), met an explicit exception to adverse possession claims.
Decision
Wis. Stat. § 893.29(2)(c) reads:
Notwithstanding sub. (1), no title to or interest in any of the following property shall be obtained by adverse possession … :
(c) Real property of a highway as defined in s. 340.01(22) and including property held by the state or a political subdivision for highway purposes, including but not limited to widening, alteration, relocation, improvement, reconstruction and construction.
The court of appeals went on to analyze what constituted “highway purposes.” Since the property was dedicated for public use as a street on the recorded subdivision plat, it found the strip could held for highway purposes.
The court further ruled against Casa De Calvo’s argument that “highway purposes” be limited to property that has already been opened for public use or that it should consider evidence regarding the town’s intent to actually use the property for that purpose.
Casa De Calvo’s adverse possession claim therefore failed under the exception.