In Coolidge A LLC v. City of Waukesha (2018AP1441), the Court of Appeals District II held that the city and its contractor were entitled to governmental immunity when a public works project allegedly damaged an apartment building.

Coolidge owns an apartment building constructed on top of a former landfill. The City of Waukesha contracted with Tomasini Contractors for public works projects near the building. Coolidge filed this lawsuit, alleging negligence in the public works project construction caused property damage to the apartment building.

The court dismissed Coolidge’s claims, finding that the city and Tomasini were entitled to governmental immunity. Wis. Stat. § 892.80(4) provides immunity from liability to governments and their employees acting in legislative and quasi-legislative functions. Here, the city was acting in a legislative or quasi-legislative function when it planned and executed the public works project.

Tomasini was also entitled to governmental immunity as a contractor of the city. Tomasini met the conditions to assert government contractor immunity: First, it was following the city’s reasonably precise specifications for the construction. Second, it was implementing the city’s legislative or quasi-legislative project plan.

The court also dismissed Coolidge’s intentional nuisance, inverse condemnation, and regulatory taking claims.

In Sierra v. Boston (2019AP94), the Court of Appeals District II dismissed the plaintiff’s claims of negligent training and supervision.

Plaintiff Sierra took a friend to defendant Boston’s dental clinic for a procedure. After the procedure, Sierra asked for narcotics for her friend and a confrontation ensured when staff denied her request. Boston called the police, and Sierra was later arrested and charged with a misdemeanor and felony.

Sierra filed this civil lawsuit against Boston alleging negligent training and supervision. Sierra claimed Boston negligently trained his staff in how to profile and handle drug-seeking patients, leading his staff to improperly report her to the police and cause her arrest and conviction for disorderly conduct.

The court dismissed Sierra’s claims, finding that Boston did not act with “willful, wanton, or reckless conduct” in training his staff, nor did his actions lead to any act by his employees that caused Sierra’s alleged injury.

In Uneeda Rest, LLC v. Hexum (2019AP1357), the Court of Appeals District III held there was no initial grant of coverage because the property damage did not constitute an “occurrence” under the insurance policy at issue.

Jake Westerhof is a member of Uneeda Rest, which owns property adjacent to Rick Hexum. When Westerhof hired contractors to build a home on the Uneeda Rest property, there were various disputes between Westerhof and Hexum about the construction process and effects of the new home on both their properties. Hexum contented that the new house increased water runoff onto his property and caused related damages. On appeal, this case involved Hexum’s claims against Uneeda Rest and Westerhof for private nuisance, civil trespass, and negligence, among other things.

Westerhof and Uneeda Rest tendered the defense of Hexum’s claims to Westerhof’s homeowners insurer Wisconsin Mutual. Wisconsin Mutual contended that there was no coverage because the property damage was not caused by an “occurrence” under the policy.

The court agreed that the Wisconsin Mutual policies did not provide an initial grant of coverage for Hexum’s claims. The injury-causing events leading to Hexum’s property damages (i.e. contractors driving on Hexum’s property and the construction of Westerhof’s new home) were intentional. No negligence or accident led to the property damage. Therefore, the injury-causing events did not constitute an occurrence under the Wisconsin Mutual policy, so there was no initial grant of coverage.

A few weeks after the Wisconsin Supreme Court invalidated the state’s “Safer at Home” emergency order, state and local leaders continue to grapple with the ongoing pandemic and economic recovery. The Department of Health Services (DHS) has declined to promulgate Safer at Home as a statewide rule and instead some local health departments have orders in place. Gov. Tony Evers has also begun allocating federal funds for Wisconsin COVID-19 efforts.

Local Orders

Immediately following the Supreme Court ruling, Dane County announced its own local order mandating residents to stay at home, and many other local health departments followed suit.

It was initially unclear whether the Supreme Court order limited local governments’ powers under Wisconsin’s communicable disease statutes as it did DHS’s. Several local governments quickly rescinded their stay-at-home orders after guidance from the Wisconsin Counties Association and League of Wisconsin Municipalities said local governments’ authorities under the Supreme Court order were unclear. 

In response to a request from the Outagamie County Executive, Wisconsin Attorney General Josh Kaul quickly issued an advisory opinion on the applicability of the Supreme Court decision to local health orders. The opinion advises that local governments may issue orders to address COVID-19 but should not enforce criminal penalties for violations. Specifically, the opinion concluded:

• The Legislature v. Palm case does not directly control local government powers to address communicable diseases.
• Per the court’s findings in Palm related to criminal enforcement, localities should limit enforcement to ordinances or administrative enforcement rather than criminal penalties tied to state statute.
• Because statutory rulemaking requirements apply only to state agencies, local governments may have more authority than DHS to issue broad stay-at-home orders as long as they are within local governments’ statutory powers under Wis. Stat. § 252.03(1)-(2).

With guidance from the AG opinion, many local orders including Dane County and Milwaukee remain in place, though they are beginning to dial back as localities seek to safely reopen.

A group of 17 plaintiffs have filed a lawsuit against local health officials arguing local orders violate their constitutional rights. That case is pending in federal court.

DHS Rulemaking

After the Supreme Court found that the Safer at Home order was a “rule” required to go through statutory rulemaking processes, Gov. Evers and DHS began the process to promulgate a similar order as an emergency rule, in accordance with the ruling. Gov. Evers approved a scope statement for an emergency rule on May 14. The scope statement said the emergency rule could include provisions similar to Safer at Home and a phased reopening plan similar to what the Evers administration had proposed in the “Badger Bounce Back” plan.

Republican legislative leadership, including Sen. Steve Nass (R-Whitewater), the chairperson for the Joint Committee for Review of Administrative Rules (JCRAR), immediately criticized the language of the scope statement, stated that they are not interested in “micromanaging” businesses as they begin to reopen and instead prefer to focus any rulemaking on big picture issues like large gatherings and K-12 schools. Nass sent a letter to DHS asking the agency to withdraw the scope statement. His committee would have had the power to suspend the emergency rule.

DHS ultimately did withdraw the scope statement on May 18 and has not indicated they will put forth a statewide rule of any kind. Local public health orders remain in place, though many are beginning to dial back restrictions.

Allocation of Federal Dollars

The federal CARES Act provided Wisconsin approximately $2 billion in funding for COVID-19 efforts. Gov. Evers has begun announcing how his administration will use the funds. Programs include:

• $10 million for clinics serving underserved populations;
• $200 million for local government recovery grants, allocated by population;
• $100 million for long-term care, home and community-based services, and emergency medical services;
• $50 million for relief for farmers and a $15 million food security initiative;
• $25 million rental assistance program;
• $1 billion effort to support COVID-19 testing, contact tracing, acquisition of needed supplies, emergency operations, and resources for local communities; and
• $75 million small business grant program. 

In Emer’s Camper Corral, LLC v. Alderman (2020 WI 46), the Supreme Court held 6-1 that plaintiffs claiming negligent procurement by an insurance agent must establish that the desired policy was both commercially available and that the insured would have qualified for it.

Decision

 After Camper Corral, a business that sells campers, had twice previously filed claims under previous insurers for approximately $100,000 in hail damage, its insurance agent Alderman procured an insurance policy through Western Heritage Insurance Company for Camper Corral to insure its inventory. The Western Heritage policy had a hail damage deductible of $5,000 per unit. According to Camper Corral, the following year Alderman told Camper Corral he obtained a reduced deductible of $1,000 per unit with a $5,000 total deductible cap. However, when Camper Corral filed a claim for another hail storm under the policy, the policy language actually retained the original $5,000 per unit.

Camper Corral filed the instant negligence action, seeking damages of amounts they were required to pay above the $5,000 total deductible cap they thought the policy included. Alderman argued that there was no evidence Camper Corral could otherwise have obtained a policy with the desired $1,000 per unit, $5,000 total deductible cap, so Alderman could have been the cause of Camper Corral’s injury.

The court found that the commercial availability of Camper Corral’s desired policy was not sufficient to establish that Alderman’s negligence caused Camper Corral’s injury. Plaintiffs like Camper Corral claiming negligent procurement must also establish that the individual plaintiff would have been able to obtain the desired policy terms. Plaintiffs themselves bear the burden to prove they could have been insurable under the desired policy terms. In this case, Camper Corral did not produce evidence to prove it could have obtained the desired hail damage policy, so Alderman did not cause Camper Corral’s damage, and the negligence claim failed.

Camper Corral raised an alternative argument under the “reliance theory” that Alderman’s negligence caused injury to Camper Corral because Camper Corral would have altered its behavior to minimize risk if it had known it was not covered by the desired policy terms. The court said plaintiffs can prove causation of injury using the reliance theory, but in this case Camper Corral failed to provide credible evidence that it would have changed its behaviors.

Dissent

In a dissent, Chief Justice Roggensack argued that proving general commercial availability should be sufficient to establish causation in negligent procurement cases. According to the dissent, the court’s new standard for proving causation of injury in negligent procurement cases by establishing insurability is too burdensome on the consumer. The dissent would also have found that in this case Camper Corral did prove both that the desired policy was commercially available and Camper Corral could have been eligible for it.