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Federal Extraordinary Session Case Dismissed

Posted on October 13, 2019October 13, 2019 by Hamilton

The U.S. District Court for the Western District of Wisconsin recently dismissed DPW v. Vos, the federal case challenging the 2018 extraordinary session laws. The Democratic Party of Wisconsin (DPW) had filed a complaint in February seeking to declare the extraordinary session legislation in violation of the U.S. Constitution. DPW alleged that the legislation violates the plaintiffs’ First and Fourteenth amendment rights, as well as the Guarantee Clause (a clause assuring States shall have a republican form of government).

The district court opinion states that it is not federal courts’ role to intervene in how states allocate power among their branches of government. Any remedy to the plaintiffs’ alleged harms would have to occur in state courts. The Wisconsin Supreme Court ruled this summer in League of Women Voters v. Evers that the Legislature’s extraordinary session was held constitutionally. The state Supreme Court is hearing oral arguments this month in SEIU v. Vos, which will litigate the policies contained in the legislation passed during the extraordinary session.

The district court further held that the plaintiffs lacked standing because they had not identified any concrete harms from the extraordinary session laws. The district court cited the recent U.S. Supreme Court decision Gill v. Whitford, the Wisconsin redistricting case, holding that plaintiffs must have “concrete and particularized” injuries and that voters do not have legally protected interests in advancing particular policies. The court found that the extraordinary session laws did not prohibit or require any actions by the plaintiffs. Instead, the laws were directed at the governor and attorney general, so plaintiffs had no standing to file the lawsuit.

Read more about this and other extraordinary session litigation at https://www.wisciviljusticecouncil.org/2019/04/10/extraordinary-session-litigation-update/

Supreme Court Oral Arguments – October 2019

Posted on October 13, 2019October 13, 2019 by Hamilton

The Wisconsin Supreme Court is in the midst of a busy month of oral arguments. Cases heard this month include the second case litigating the 2018 extraordinary session litigation, insurance issues, employee wages, and misrepresentation claims.

Hinrichs v. DOW Chemical Co. (Fraudulent Representation) – Oct. 3

This case involves a dispute between a manufacturer and a supplier over a failing product. Plaintiffs alleged claims of negligent misrepresentation, intentional misrepresentation, strict responsibility misrepresentation, and violation of Wisconsin’s fraudulent representations statute (Wis. Stat. § 100.18). The appeals court dismissed misrepresentation claims based on the “economic loss doctrine,” which provides that plaintiffs cannot sue to recover solely economic losses from the nonperformance of a contract, but the court remanded for further discussion on whether plaintiffs could file the fraudulent representation claim.

The Supreme Court will clarify who is a member of “the public” eligible to file a fraudulent representation claim under Wis. Stat. § 100.18. Specifically, the court will determine whether plaintiffs can file 100.18 claims against entities with which they have a commercial relationship. The court will also address the scope of the economic loss doctrine in misrepresentation claims.

Supreme Court Oral Arguments – September 2019

Posted on October 13, 2019October 13, 2019 by Hamilton

The Wisconsin Supreme Court held oral arguments on several notable cases in September. (Calendar and case synopses.) Issues before the court included legal nonconforming uses, successor liability, and annexation.

Lamar Central Outdoor, LLC v. Division of Hearings & Appeals (Legal Nonconforming Use) – Sept. 4

This case will review whether 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 Supreme Court will determine whether Wis. Stat. § 84.30(14) and Wis. Admin. Code § TRANS 201.10(2)(e) prohibit enlarging legal but nonconforming signs, whether the Department of Transportation (DOT) should have provided the sign owner a right to cure, and whether DOT’s policy change violated Wis. Stat. Ch. 227 rulemaking requirements. Read more about the case.

Veritas Steel, LLC v. Lunda Construction Co. (Successor Liability) – Sept. 19

In this case, the Supreme Court will review the Court of Appeals’s narrow application of the “de facto merger” and “mere continuation” exceptions to Wisconsin’s general rule against successor liability. The court will review previous case law Fish v. Amsted Indus. Inc., which held 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 Construction, which was seeking a $16 million judgment from successor company Veritas, argues that an identity of control could show a mere continuation from seller to purchaser, establishing successor liability. The appeals 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 appeals court said it is bound by Fish, and only the Supreme Court could change this interpretation of the exceptions. Read more about the case.

Town of Wilson v. City of Sheboygan (Annexation of Town) – Sept. 19

The Supreme Court will review Kohler Co.’s petition to annex land from the Town of Wilson to the City of Sheboygan for the purpose of developing a golf course. The City of Sheboygan adopted the annexation ordinance, and the Town of Wilson filed this lawsuit.

The Town argues that the annexation does not satisfy statutory requirements for contiguity, certified population count, and signatures. Furthermore, the City did not show there was a need for the annexed property.

On the other hand, the City argues they and Kohler followed all statutory requirements related to the annexation. Furthermore, the City argues it had a need for expanded residential housing and other economic benefits provided by the annexation.

McCormick v. Auto Club Insurance Association (Doctrine of Accord and Satisfaction)

Posted on October 13, 2019October 13, 2019 by Hamilton

In McCormick v. Auto Club Insurance Association (2018AP753), the Court of Appeals District I held that the doctrine of accord and satisfaction applied when the plaintiff cashed a check that the defendant insurer intended to settle the claim.

After David McCormick was injured in an automobile accident with an uninsured driver, McCormick sought his full uninsured motorist coverage policy limit of $300,000 from his insurer Auto Club Insurance Association (AAA). AAA disputed McCormick’s $300,000 claim, and instead offered a settlement of $20,000. In a letter, AAA included a check for $20,000 and a release form. McCormick cashed the check but did not sign the release form.

McCormick filed the instant lawsuit seeking the full policy limit plus damages for loss of companionship on behalf of his son. AAA pled the affirmative defense that the doctrine of accord and satisfaction barred McCormick’s claim because he cashed the $20,000 check.

The court agreed that the doctrine of accord and satisfaction barred McCormick’s claim. The accord and satisfaction doctrine requires a dispute, offer, acceptance, and consideration in order to bar future claims. In this case, the plaintiff and defendant disagreed over whether AAA had presented an offer to McCormick. The court found the $20,000 check that McCormick cashed constituted an offer because the language of the attached letter and notes on the check and check stub provided “reasonable notice” that the check was an offer to settle McCormick’s claims.

The court also found that McCormick’s failure to sign the release did not prevent the application of the defense of accord and satisfaction. McCormick’s cashing the check was enough to constitute accord and satisfaction, a separate defense than the defense of release.

Harwood v. Wheaton Franciscan Services, Inc. (Class Action Certification)

Posted on October 13, 2019October 13, 2019 by Hamilton

In Harwood v. Wheaton Franciscan Services, Inc. (2018AP1836), the Court of Appeals District I affirmed class action certification in a lawsuit against a medical provider related to medical record fees.

Plaintiff Elizabeth Harwood filed the lawsuit against Wheaton Franciscan, alleging Wheaton Franciscan illegally charged her attorney fees for copies of her health records. Harwood sought to certify a class including all Wheaton Franciscan patients in Wisconsin (or persons authorized to obtain their medical records) whom Wheaton Franciscan charged retrieval or certification fees in violation of Wis. Stat. § 146.83(3f)(b)4.-5. That statute allows health care providers to charge such fees only to persons other than the patient or person authorized by the patient.

The trial court certified the class, and Wheaton Franciscan appealed. The appeals court rejected Wheaton Franciscan’s argument that the trial court did not apply a rigorous analysis of the specific facts of the case as required by federal class action law. The trial court properly found that Harwood’s proposed class met the four prerequisites of Wisconsin’s class action law (§ 803.08):

Numerosity. Harwood presented 44 invoices wherein Wheaton had charged patients or their authorized representatives retrieval or certification fees. The numerosity requirement was met because it would be impracticable to bring all the invoiced patients before the court.
Commonality. All members of the proposed class suffered a common injury of allegedly unlawful charges for medical records.
Typicality. Harwood’s claim was typical of the claims of the rest of the proposed class. The court dismissed Wheaton’s argument that there was not enough evidence to determine typicality.
Adequacy. Harwood acting as class representative would adequately protect the interests of the class. Her claim was substantially similar and her interests were not adverse to the rest of the class’s interests.

The trial court further found – and the appeals court upheld – that the shared claims of the class members and Harwood were predominant to any individual claims. Class action was the superior means of addressing the controversy because addressing the individual claims, each of which was only $28, would be impracticable (§ 803.08(2)(c)).

Finally, the appeals court found that federal case law did not require additional discovery to certify the class. Therefore, Harwood’s class action lawsuit against Wheaton Franciscan could proceed.

Beedle v. Wisconsin Mutual Insurance Co. (Insurance Policy Business Exclusion)

Posted on October 13, 2019October 13, 2019 by Hamilton

In Beedle v. Wisconsin Mutual Insurance Co. (2018AP2147), the Court of Appeals District IV held that an insurance policy’s business exclusion applied when the insured was engaging in a side job, barring coverage for an injury caused by the insured’s negligence on the job.

Plaintiff Jacob Beedle was injured while helping the insured construct a pole barn. Beedle filed this lawsuit against the insured and his insurer IMT Insurance Co., alleging the insured’s negligence caused Beedle’s injury. The insured’s homeowner’s policy included an exclusion for losses from business, defining business as “a trade, profession, or occupation engaged in on a full-time, part-time, or occasional basis.”

The insured was primarily employed by a company that constructs pole barns, but the project where Beedle was injured was a side job outside of the insured’s primary employment. The issue in this case was whether the side job constituted “business” under the IMT policy, barring coverage for Beedle’s injuries.

The court found that the insured’s work on the side job was unambiguously a “trade” that he engaged in on an “occasional basis.” Using the “continuity-profit motive” test established in Bertler v. Employer Ins. of Wausau (1978), the court found that the side job was a continuation of the insured’s primary employment constructing pole barns. The court found the insured had a profit motive because he was ultimately paid $3,000 for work on the side job. By meeting both the continuity and profit motive standards, the side job would have fallen under the policy’s business exclusion according to Bertler.

The court rejected Beedle’s argument that the side job would not fall under the business exclusion because it was not the insured’s primary employment. Therefore, the policy’s business exclusion applied, barring coverage for Beedle’s injuries.

Paynter v. ProAssurance Wisconsin Insurance Co. (Medical Malpractice Coverage)

Posted on October 13, 2019October 13, 2019 by Hamilton

In Paynter v. ProAssurance Wisconsin Insurance Co. (2017AP739), the Court of Appeals District III held that a medical malpractice insurance policy did not provide coverage for a doctor’s alleged liability connected with services performed in another state.

The underlying claim in the case arose when Dr. James Hamp, who operates offices in both Wisconsin and Michigan, misdiagnosed a growth on patient David Paynter, a Michigan resident. Paynter first saw Dr. Hamp in his Michigan office, but Dr. Hamp called Paynter with the misdiagnosis from his Wisconsin office. Paynter was residing in Michigan at the time of the call and for the next four years before he found out his growth was cancerous.

Paynter sued Dr. Hamp and his Wisconsin malpractice insurer ProAssurance, claiming both negligence and violation of the patient’s right to informed consent. The Wisconsin Supreme Court dismissed Paynter’s informed consent claim based on Wisconsin’s borrowing statute, remanding the negligence claim to the court of appeals. The issue remaining on appeal was whether the ProAssurance policy provided coverage for the negligence claim.

The ProAssurance policy included a location endorsement, which stated ProAssurance would not cover “liability arising from, relating to, or in any way connected with the rendering of or failure to render professional services…in the State of Michigan and/or outside the State of Wisconsin.” The appeals court agreed with ProAssurance that, because Dr. Hamp first tested Paynter in Michigan, the alleged negligent misdiagnosis was “connected with” services provided in Michigan. Therefore, the ProAssurance policy’s location endorsement unambiguously excluded coverage for Paynter’s negligence claim.

State of Wisconsin ex rel. Collison v. City of Milwaukee Board of Review (Property Tax Assessment)

Posted on October 13, 2019October 13, 2019 by Hamilton

In State of Wisconsin ex rel. Collison v. City of Milwaukee Board of Review (2018AP669), the Court of Appeals District I upheld the tax assessment of a property with environmental pollution.

Property owner Ronald Collison appealed a $31,800 tax valuation of his property, arguing the property’s fair market value is zero dollars due to environmental pollution. However, the court upheld the assessor’s decision to derive market value by potential income generated from the property. The assessor was aware that there was contamination but had no information regarding the extent or cleanup costs. In reaching the $31,800 valuation, the assessor found that the property could generate income as a parking lot regardless of contamination. The court found that the assessor properly used the income assessment approach because it represented the highest and best use of the property.

Collison further challenged the legality of the City of Milwaukee Environmental Contamination Standards (CMECS), which he argued conflict with a requirement in Wis. Stat. § 70.32(1m) requiring assessors to consider impairment value from environmental pollution. CMECS prohibit assessors from valuing property as contaminated unless an audit has substantiated the contamination. The court rejected Collison’s argument because the assessor took into account impairment from environmental pollution even though the property had not undergone an audit.

Finally, Collison argued that the income approach in the Wisconsin Property Assessment Manual conflicts with § 70.32(1m). The court held that the assessor’s use of the income approach was compatible with the statutory requirements to take environmental pollution into account.

Mueller v. LIRC (Worker’s Compensation)

Posted on October 13, 2019October 13, 2019 by Hamilton

In Mueller v. LIRC (2018AP707), the Court of Appeals District III held that employees must show actual wage loss attributable to a work-related injury in order to be eligible for temporary disability worker’s compensation benefits. Employees may not receive temporary disability if they voluntarily retire, nor if subsequent attempts to re-enter the labor market are not impaired by a work-related injury.

Janet Mueller was injured when working for Ashley Furniture. Ashley placed Mueller on light duty with supplemental temporary partial disability benefits. Four months later, Mueller retired. Shortly after her retirement, Mueller reapplied for employment at Ashley but was not rehired. Mueller later found a part-time retirement job at a café.

Mueller filed this lawsuit seeking worker’s compensation benefits from Ashley during her retirement and during several months of her new part-time job. The court upheld the Labor & Industry Review Commission’s (LIRC) decision finding that Mueller could not show an actual wage loss entitling her to benefits because her voluntary retirement from Ashley was unrelated to her injury.

Alternatively, Mueller argued that her attempts to re-enter the labor market after retirement showed an actual wage loss entitling her to benefits. The court upheld the LIRC decision finding that Mueller showed no evidence her attempts to re-enter the labor market were impaired by a work-related injury. The record showed Ashley declined to hire Mueller because better applicants applied, and Mueller voluntarily chose to work part-time at the café.

Chapp v. Colgate-Palmolive Co. (Talcum Powder)

Posted on October 13, 2019October 13, 2019 by Hamilton

In Chapp v. Colgate-Palmolive Co. (2018AP937), the Court of Appeals District I held that the plaintiff presented insufficient evidence that Colgate talcum powder caused his wife’s cancer and therefore upheld summary judgment in favor of Colgate.

Ruth Chapp used Colgate’s Cashmere Bouquet talcum powder daily. Her husband Dale Chapp, who worked in an occupation where asbestos was present, acknowledged his wife was also regularly exposed to asbestos from being around his products, machinery, and work clothes. After Ruth died from mesothelioma, Chapp filed this lawsuit against Colgate, alleging its Cashmere Bouquet talcum powder contained asbestos that was a contributing cause to her cancer.

Chapp contended that the talc deposits where Colgate obtained its supply also contained asbestos. Some tests showed asbestos in the Colgate talc products, including the type of talcum powder that Ruth used, but Colgate’s expert challenged those tests, stating they were based on unreliable methodologies that are no longer used today. The actual product Ruth used was never tested for asbestos.

The court found that the probability of whether or not Ruth used Cashmere Bouquet talcum powder containing asbestos was speculative, so summary judgment by the court, not a jury trial, was appropriate. Any inference that the talc mines Colgate used contained asbestos and that the Cashmere Bouquet talcum powder Ruth used actually contained asbestos would be based on speculation or conjecture.

Furthermore, the court held that the exception in Wis. Stat. § 907.03 allowing experts to rely on inadmissible evidence did not apply in this case. Chapp presented expert testimony from two doctors, who each opined that Cashmere Bouquet contained asbestos which caused Ruth’s cancer. The court determined that these experts could not use § 907.03 to bring in the otherwise inadmissible hearsay that the Cashmere Bouquet talcum powder contained asbestos because that opinion was outside of their expertise as physicians.

Because Chapp did not present sufficient evidence to establish causation between the Colgate product and his wife’s cancer, the court upheld summary judgment dismissing the lawsuit against Colgate.