In an unanimous decision authored by Justice Patrick Crooks (Justice David Prosser not participating), the Wisconsin Supreme Court held that a sheriff deputy could not seek underinsured motorist coverage under her employer’s insurance policy when she was struck by a vehicle in a cross-walk. The case is Jackson v. Wisconsin County Mutual Ins. Corp., 2014 WI 36.

Background
The plaintiff, Rachelle Jackson, was working as a deputy sheriff for Milwaukee County at the Milwaukee airport. While on duty on a sidewalk, a motorist approached Jackson and asked her for directions.

After providing the driver with directions, Jackson directed the driver back out into the traffic. As Jackson walked in the crosswalk in front of the vehicle, the driver unexpectedly moved forward and hit Jackson, injuring her.

Jackson sued many parties, including her employer’s insurer, Wisconsin County Mutual Insurance Corporation, seeking underinsured motorist coverage (UIM).

The insurance company argued that Jackson was not “using an automobile” as required by the insurance policy. The district court agreed, holding that Jackson was not entitled to the UIM coverage. The Court of Appeals, District 1, reversed holding that Jackson “manipulated” the vehicle being driven by the motorist who struck her and thus was “using” the vehicle, entitling her to coverage under the policy.

Issue
Whether the plaintiff was “using” the vehicle being driven by the driver who struck the plaintiff, entitling her to underinsured motorist coverage under her employer’s insurance policy.

Supreme Court Decision
The Supreme Court reversed the court of appeals. The court began its analysis by noting that Jackson satisfied two out of the three requirements allowing her to obtain UIM coverage under her employer’s insurance policy: 1) she was within the scope of her employment, and 2) she was insured under the policy.

However, the court determined that Jackson did not meet the third requirement – she was not “using an automobile” as prescribed under the policy. The court looked to the definition of “using” under the policy, which included “driving, operating, manipulating, riding in and any other use.”

The court explained that the only way Jackson could possibly be covered under this definition is under the “manipulating” or “other use” provisions. The court proceeded to review a number of cases where a person not driving the vehicle was deemed to be using the vehicle. However, the court determined that the facts in this case did not arise to Jackson controlling or using the vehicle that ultimately hit and injured her.

According to the court, “[u]nlike the cases in which the person guiding or giving directions was ‘controlling’ and therefore deemed a user of the vehicle, Jackson did not exercise such control over the vehicle to the extent that she essentially became the user. She was not communicating with, signaling, or exercising active control over the vehicle at the time of the injury.”

The court therefore concluded that Jackson could not recover under the policy because her actions did not “constitute using a vehicle in any way that is consistent with interpretations of ‘use’ in Wisconsin case law or with those of cases from other jurisdictions.”

In a recent Forbes magazine article, Daniel Fisher discusses a publication by a former asbestos plaintiff lawyer who explains how some of the asbestos trust funds set up under the U.S. Bankruptcy Code facilitates “fraud.” According to the article, the plaintiff attorneys explains how the trust funds are designed to be accessed by claimants with little evidence of exposure.

Fisher quotes from the article:

Plaintiff asbestos lawyers then use the millions of fees obtained from the system they were instrumental building, to run countless advertisements designed to obtain more clients so that they can submit more claims and obtain more fees. Thus, institutionalized fraud, as built into the system, allows the system to perpetuate itself.

To read more, click here.

On April 22, the Wisconsin Supreme Court issued a positive decision (4-2) in Kimble v. Land Concepts, Inc., 2014 WI 21, holding that $1 million in punitive damages against a title insurance company violated due process and therefore was unconstitutional. Justice Annette Ziegler authored the decision, and was joined by Justices Patrick Crooks, Patience Roggensack, and Michael Gableman. Chief Justice Shirley Abrahamson authored a dissenting opinion and was joined by Justice Ann Walsh Bradley. Below is a discussion of the case and the court’s decision.

Wisconsin Insurance Alliance, Wisconsin Civil Justice Council, and Wisconsin Manufacturers & Commerce filed an amicus brief in the case arguing that the $1 million award of punitive damages was unconstitutional.

Issue: Whether the $1,000,000 punitive damages award against First American Title Insurance Company violates the Wisconsin Constitution or the common law of the state of Wisconsin.

Facts: The case involves a jury verdict awarding the plaintiff-property owners $1 million in punitive damages against First American Title Insurance Company for bad faith in denying the insureds’ requested defense of title and claim.

The plaintiffs purchased property in Door County that was land-locked on three sides and surrounded by water on the other side. The plaintiffs-buyers believed they had an easement over adjoining property allowing access to the nearest road. However, it was determined after the purchase of the property that the plaintiffs did not have an easement and therefore filed suit against First American Title Insurance Company when it denied that the policy coverage had been triggered.

The case went to trial and the court awarded the plaintiffs $29,738 in compensatory damages against First American. The jury also awarded the plaintiffs $1 million in punitive damages against First American for its bad faith in denying the claim. The court of appeals upheld the punitive damages.

The sole issue before the Wisconsin Supreme Court is whether the $1 million is unconstitutional. (The new caps under 2011 Wisconsin Act 2 are not implicated because this case was commenced prior to enactment of Act 2.)

Wisconsin Supreme Court’s Decision: The court held that the award of $1 million did “not bear a ‘reasonable relationship’ to either the compensatory damages award or the potential harm faced by the plaintiff.” According to the court, the punitive damages award was excessive and deprived the First American its right to due process under the constitution. Therefore, the court reversed the lower court and held that appropriate amount of punitive damages was $210,000, plus compensatory damages.

Gov. Walker earlier today signed AB 19, asbestos trust fund transparency, into law as Act 154. The new law allows greater transparency by:

• Requiring asbestos plaintiffs to disclose any and all claims that they have filed or will file with asbestos trust funds, along with all of the documents and information that support the trust claims.
• Requiring judges to admit trust claims and supporting materials into evidence at trial; prohibiting plaintiffs from spuriously alleging that trust claims and their supporting documents are privileged.
• Providing defendants with a powerful tool to ensure that plaintiffs file and disclose all possible claims with asbestos trusts. AB 19 authorizes defendants to identify trust claims that the plaintiff could and should file. If a judge agrees, the case is stayed until that claim is filed and disclosed.

Wisconsin now joins Ohio and Oklahoma by having a law in place that protects businesses from unscrupulous plaintiff attorneys double-dipping against trust funds and suing those solvent businesses that have little, if any, fault.