Supreme Court accepts four new cases
Madison, Wisconsin - October 13, 2011
The Wisconsin Supreme Court has voted to accept four new cases. The Court also acted to deny review in a number of cases. The case numbers, issues, and counties of origin are listed below. Court of Appeals opinions available online for the newly accepted cases are hyperlinked.
2010AP342 Brenner v. City of New Richmond
This case examines the proper legal standard for determining whether a constitutional taking has occurred in an inverse condemnation case involving a runway extension at a municipal airport.
Some background: An inverse condemnation is an action brought by a property owner for compensation from a governmental entity that has taken the owners' property without bringing formal condemnation proceedings.
The city of New Richmond owns and operates the New Richmond Regional Airport, which is located on the outskirts of the city. In 2007, the city extended the main runway at the airport by 1,500 feet to accommodate certain types of business jets.
In connection with the runway project, the city condemned 62 acres of land owned by plaintiffs Steven and Cristy Wickenhauser and also condemned an avigation (aerial navigation) easement over 3.8 acres of the Wickenhausers' remaining 80 acres. The Wickenhausers' home is located in the area covered by the avigation easement. The easement prohibits any buildings or trees exceeding 26 to 38 feet tall, depending on their location.
The Wickenhauser's and other nearby landowners, Robert Brenner and Allan and Susan Seidling filed a petition for inverse condemnation proceedings under Wis. Stat. § 32.10.
The case was tried to the court. At trial the plaintiffs testified to various complaints about the runway expansion's effects, including odors, dust, vibrations, sound, runway strobe lights and low overhead flights. Following the trial, the circuit court issued a written decision and order dismissing the plaintiffs' suit because none of the plaintiffs had proven that the airplane overflight deprived them of all, or substantially all, economic benefits of their property. As to the Wickenhausers' claim, the trial court held that the Wickenhausers had already been paid in the context of the city's direct condemnation of an avigation easement, which included the area on which the Wickenhausers' home was situated, for any loss in value to their remaining property due to increased airplane overflights arising out of the airport improvement project.
The Court of Appeals reversed and remanded, concluding that the trial court used an improper legal standard in dismissing the case. The Court of Appeals concluded the trial court improperly used the standard for regulatory takings rather than the standard for physical occupation cases. The Court of Appeals held that the plaintiffs were entitled to compensation if they could prove that the airplane overflights resulting from the airport improvement project had a direct, immediate and substantial effect on the plaintiffs' use and enjoyment of their land.
The city argues that the Court of Appeals created a new conceptual category relating to airplane overflight inverse condemnation cases, holding that if the overflights have a direct, immediate and substantial effect on the use and enjoyment of the land a constitutional taking occurs. The city says that historically there have been only three conceptual categories that are applied when an owner of real estate seeks compensation from the government because the government's action has claimed to have resulted in a constitutional taking. Those three categories are physical occupation, regulatory action, and consequential damages. The city also argues that when determining if a taking has occurred, the owner's property must be considered as a whole, rather than being segmented into subparts for the purpose of analyzing if a subpart of the property has been taken. From St. Croix County.
2010AP878 WPS v. Arby Construction
This case involves a dispute over insurance coverage following a propane gas pipeline explosion that killed two people and injured others. The Supreme Court examines the scope and application of the claim preclusion doctrine, which forecloses the opportunity for claims actions under certain circumstances. Here, the court examines whether the "functional equivalent" of a counterclaim is sufficient to warrant claim preclusion.
Some background: Arby Construction provided excavation and boring services under a contract with Wisconsin Public Service Corp. (WPS). Under the terms of that contract, Arby was required to defend and indemnify WPS and its insurers for certain losses. While performing services under the contract with WPS, Arby struck and damaged a portion of an underground propane gas line, causing explosions that resulted in the deaths of two people and injury to several others.
A personal injury action ensued on behalf of those victims, (collectively, Brooks) naming WPS, Arby, Associated Electric & Gas Insurance Services Limited (AEGIS), and a number of other entities as defendants in Brooks v. Old Republic Ins. Co., Case No. 06-C-996 (E.D. Wis.). AEGIS was named because, as Brooks' amended complaint alleged and AEGIS admitted, it had issued an excess indemnity policy that provided coverage to WPS for the alleged negligence of WPS.
AEGIS claims that it is entitled to indemnification under an indemnification contract between Arby and AEGIS's insured, WPS.
The circuit court, however, concluded that AEGIS was barred from seeking indemnification against Arby based on claim preclusion, because there was a stipulated judgment in a prior case in which AEGIS, Arby, and WPS were defendants.
The Court of Appeals affirmed, concluding that AEGIS's affirmative defense in the prior action asserting Arby's contractual obligation to indemnify AEGIS as WPS's insurer was the "functional equivalent" of a cross-claim for purposes of claim preclusion.
AEGIS's petition followed, contending that the requirements for claim preclusion were not met on the theory that AEGIS did not file a cross-claim against Arby for indemnification under the contract between WPS and Arby in the Brooks action. According to AEGIS, without this cross-claim (which, AEGIS points out, was not compelled), the requirements for claim preclusion were not met.
Arby contends that the dispute is whether the affirmative defense in the prior action – asserting Arby's obligation under the contract to indemnify AEGIS as WPS's insurer – had the same effect as a cross-claim for purposes of applying the doctrine of claim preclusion in the current action.
The Court of Appeals concluded that considering the substance of AEGIS's affirmative defense, it is, effectively, a claim against Arby and its insurers for indemnification for any damages for which WPS and its insurers are liable to Brooks. It stated:
Thus, the substance of AEGIS's affirmative defense in the prior action asserts the same claim against Arby that AEGIS now asserts in this action.
AEGIS specifically asks the Supreme Court to review several questions:
- Can a functional claim based on the substance of an affirmative defense be considered a prior claim for the purposes of claim preclusion?
- Can a "Functional Claim" create adversity between parties for purposes of applying the doctrine of claim preclusion?
- Where "all claims set forth in the pleadings" are the subject of an order of dismissal, can claims not set forth in the pleadings be the subject of claim preclusion?
- Do inter-jurisdictional claim preclusion concerns require that Wisconsin apply Federal Rules of Civil Procedure in this case
- Should the Court of Appeals apply inferences regarding the parties' intentions when only pleadings were before the court?
2010AP1391-CRNM State v. Sutton
This criminal case examines the proper procedural mechanism for raising a claim of ineffective assistance of post-conviction or appellate counsel when the defendant has finished serving his or her sentence and the direct appeal is concluded or expired.
Some background: On Aug. 21, 2008, the state filed a criminal complaint charging Jeffery Sutton with retail theft of a packet of powdered lemonade, a can of cinnamon rolls, cookies and candy from a Save A Lot store. Initially, Sutton requested a jury trial. About a month later, he filed a Waiver of Trial by Jury which prompted the circuit court to conduct a colloquy to determine whether the waiver was knowing, intelligent and voluntary.
The court approved the waiver, and the case proceeded to a court trial. Sutton was found guilty of retail theft, contrary to § 943.50(1m)(b) and the court sentenced him to one day, time served. He promptly filed a notice of intent to pursue post-conviction relief.
Sutton's post-conviction/appellate counsel, Atty. Maayan Silver, filed an appeal, which ended in a voluntary dismissal and a remand to the circuit court. At the circuit court, she filed a Wis. Stat. § 809.30(2) post-conviction motion challenging Sutton's waiver of his right to a jury trial on the ground that the court had failed to inform Sutton that: (1) at a jury trial, a 12-person jury would have to agree on all elements of the crime charged; and (2) at a court trial, a single judge would make this determination.
The circuit court denied relief because the motion neglected to allege that Sutton was, in fact, unaware of his right to a unanimous verdict at the time he waived his right to a jury trial. See State v. Grant, 230 Wis. 2d 90, 102, 601 N.W.2d 8 (Ct. App. 1999). Silver filed numerous pleadings in the circuit court and the Court of Appeals in an effort to preserve Sutton's right to direct appeal on the jury issue, trying to return the case to the circuit court in order to litigate the ineffective assistance of counsel claim.
On May 24, 2010, Attorney Silver moved the Court of Appeals for an extension of the § 809.30 deadline so that she could file a motion for reconsideration in the circuit court explaining why her post-conviction motion had neglected to allege that Sutton was unaware of his right to a unanimous verdict at the time he waived his right to a jury trial. The Court of Appeals denied the extension request.
Sutton now asks the Supreme Court to review whether Wis. Stat. § 809.32(1)(g) requires the Court of Appeals to remand a case to the circuit court for an evidentiary hearing where, during the course of a no-merit proceeding, an arguably meritorious claim for ineffective assistance of post-conviction counsel becomes apparent. From Milwaukee County.
2009AP1212/2010AP491 Estate of Kriefall v. Sizzler USA Franchise
This appeal stems from a group of consolidated lawsuits arising out of the consumption of food contaminated with the E. coli bacterium at two Milwaukee-area Sizzler restaurants. The case now before the Supreme Court does not directly relate to the claims of those injured by ingesting contaminated food. Rather, it deals solely with cross claims among the defendants, including the restaurant franchisor, franchisee, meat supplier and their respective insurers. The Court is asked to examine a series of somewhat intricate legal issues related to damage/lost profit limitations for breaches of express and implied warranties, indemnification and attorney fees.
Some background: There are two sets of plaintiffs. The estate of Brianna Kriefall (a three-year-old child who died), Chad Kriefall (Brianna's brother who became ill but survived), and members of their family are one set of plaintiffs (collectively, the Kriefalls). There also are a sizeable number of claimants who are not related to the Kriefall plaintiffs but became ill from eating E. coli contaminated food (collectively, the non-Kriefall plaintiffs).
There are a number of defendants and third-party defendants. E&B Management Co., Waukesha (E&B) was the franchisee that ran the two restaurants at issue. E&B's insurer was Secura Insurance. The franchisor for the restaurants was Sizzler USA Franchise, Inc. (Sizzler USA). The original supplier of the contaminated meat was Excel Corporation (Excel), which was insured by American Home Assurance Co.
Excel had previously supplied meats to Sizzler USA's parent company, Sizzler International, Inc. (Sizzler Int'l), which is not a party to this suit. In 1997, after a five-year hiatus, Excel once again sought to sell meat to Sizzler and its franchisees.
In order to resume the relationship, Sizzler Int'l required Excel to provide a guaranty that its meat products would not be adulterated. Sizzler Int'l and Excel entered into a "Continuing Guaranty," which stated, among other things, that "[t]his guaranty shall not render [Excel] liable for any incidental or consequential damages . . . ."
According to the Court of Appeals' decision, the jury made the following findings that are relevant to the parties' petitions for review:
- Excel breached "an implied warranty of merchantability or implied warranty for the sale of food";
- Excel's breach was "a cause of damage" to Sizzler USA;
- As a result of the breach, Sizzler USA was awarded $6.5 million for lost profits from the corporate restaurants, $350,000 for lost franchise fees, and $311,000 for out-of-pocket expenses (the jury refused to award Sizzler USA the $1.5 million it had paid to the Kriefalls as an out-of-pocket expense);
- Excel was negligent in selling meat adulterated with the E. coli bacterium;
- Excel's negligence was a cause of injury to the customers of E&B's two Sizzler restaurants;
- E&B was negligent at the time of the E. coli outbreak;
- E&B's negligence was a cause of injury to the customers of its Sizzler restaurants;
- Sizzler USA was not negligent as a franchisor;
- Causal negligence was apportioned as follows: Excel: 80% and E&B: 20%.
Excel asks the Supreme Court to review Court of Appeals' rulings that (1) affirmed the circuit court's judgment awarding lost profit damages to Sizzler USA; (2) reversed a circuit court's ruling and awarded an additional $1.5 million in damages to Sizzler USA to reimburse it for a payment that Sizzler USA made to the Kriefalls; and (3) affirmed a circuit court judgment that required Excel and American Home to reimburse E&B for settlement payments E&B and Secura had made to the non-Kriefall plaintiffs in exchange for Pierringer releases. Pierringer v. Hoger, 21 Wis. 2d 183, 124 N.W.2d 106 (1963). According to the Court of Appeals, "[A] Pierringer release operates to impute to the settling plaintiff whatever liability in contribution the settling defendant may have to non-settling defendants and to bar subsequent contribution actions the non-settling defendants might assert against the settling defendants." Van Cleve v. City of Marinette, 2003 WI 2, ¶39, 258 Wis. 2d 80, 655 N.W.2d 113.
More specifically, Excel has asked the Supreme Court to review three issues:
1. When an express guarantee that was a negotiated and agreed upon term of the parties' sales contract states: "This guaranty shall not render seller liable for any incidental or consequential damages of whatsoever nature . . . ," is Sizzler [USA] barred from recovering lost profits and incidental costs as damages for a breach of the express warranty, but entitled to recover the same damages under a theory of implied warranty?
2. Is Sizzler USA entitled to recover from Excel the $1.5 million Sizzler USA paid the Kriefall plaintiffs on a theory of equitable indemnity under the series of circumstances presented in this case?
3. Is E&B entitled to recover contractual indemnity for the non-Kriefall Pierringer release settlements under the circumstances in this case?
There are two petitions for cross-review. Sizzler USA's cross-petition asks the Supreme Court to review the lower courts' decisions rejecting Sizzler USA's claim for recovery of the $1.7 million in attorney fees and costs that it incurred in defending against the plaintiffs' personal injury claims. Its cross-petition frames the issue to be reviewed as follows:
Should the Weinhagen v. Hayes, 179 Wis. 2d 62, 66, 190 N.W.2d 1002 (1922)(third-party litigation) exception to the American Rule apply to reimburse Sizzler the attorney fees it incurred defending against third-party, personal-injury litigation spawned by Excel's tortious conduct and breach of contract where the third parties (the Kriefall plaintiffs) were connected with the event that gave rise to liability?
E&B has also filed a petition for cross-review. Its petition frames its issue as follows:
Is a contractual indemnitor, whose wrongful conduct caused claims against its indemnitee and who refused to participate in the settlement of claims against its indemnitee, permitted to offset its contractual obligation to indemnify where its indemnitee's insurer contributed to settlements?
From Milwaukee County.
Review denied: The Supreme Court denied review in the following cases. As the state's law-developing court, the Supreme Court exercises its discretion to select for review only those cases that fit certain statutory criteria (see Wis. Stat. § 809.62). Except where indicated, these cases came to the Court via petition for review by the party who lost in the lower court:
2009AP3077 DeBauche v. DeBauche
2011AP434/71-CRNM State v. Morton
2010AP2688 Brown v. Koenig
2011AP801 Mund v. Lui
2010AP100-01-CRNM State v. Polensky
2010AP1741-CR State v. Kelly
Fond du Lac
2009AP674-W Vang v. Pollard
2009AP972 Sager v. Board of Review - Justice Patience Drake Roggensack and Justice Annette Kingsland Ziegler dissent.
2011AP941-W Austin v. Cir. Ct. for Fond du Lac Co.
2011AP1398-W Croft v. Cir. Ct. Grant Co.
2010AP2116-CR State v. Mitchell
2010AP44-45-CRNM State v. Miller
2010AP794-CR State v. Myren
2010AP2903-CRNM State v. Peacy
2009AP887 State v. Winston
2009AP2045 State v. Welch
2009AP3080-CR State v. Patterson
2010AP157 State v. Johnson
2010AP563/1334-CR State v. Peralta
2010AP853 State v. Love
2010AP987-CR State v. Johnson
2010AP1363-CR State v. Pirtle
2010AP1814-CR State v. Hooker
2010AP1896-CR State v. Marker
2010AP1950-51 Cnty. of Milwaukee v. Matel - Justice Patience Drake Roggensack did not participate.
2010AP2308 Schapiro v. Pokos
2010AP2907-W Crouthers v. Pugh
2011AP604-W Gray v. Cir. Ct. Milw. Co.
2011AP851-W Baxter v. Milw. Secure Det.
2011AP877-W Tatum v. Clarke
2010AP242-W Doxtator v. Schwochert
2010AP1305 DeCoster v. Bastian
2010AP56-CR State v. Barber
2010AP1404-CR State v. Servantez
2009AP304 Mellom v. Schindler Elv. - Justice David T. Prosser, Jr. dissents.
2010AP458 Kurt v. State - Justice David T. Prosser, Jr. dissents.
2010AP2365-FT Serier v. Central St. Croix Rod & Gun Club
2010AP1256-57-CR State v. Walli/City of Sheboygan v. Walli
2010AP471-72 Nicolai v. City of Whitehall
2010AP782 State v. Hoppe
2011AP1511-LV Rewanwar v. Sammanwar
2011AP1568-W Rewanwar v. Cir. Ct. for Waukesha Co.
2010AP897 Hildebrand v. Town of Menasha
2010AP1529 Pierson v. Smith
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