The cases listed below will be heard in
the Wisconsin Supreme Court Hearing Room, 231 East, State Capitol.
This calendar
includes cases that originated in the following counties:
Brown
Milwaukee
Outagamie
Walworth
TUESDAY,
JANUARY 10, 2012
9:45 a.m.
09AP2848 - Lindy Orlowski v. State Farm Mut. Automobile
Ins. Co.
10:45 a.m. 09AP2752 - Michelle B. Wadzinski v. Auto-Owners Ins. Co.
1:30 p.m.
{#10AP594 - State v. Carl Cornelius Gilbert, Jr.
{#10AP1155 - State v. Price T. Hunt
THURSDAY,
JANUARY 12, 2012
9:45 a.m.
10AP784 - State v. Tyler T.
10:45 a.m. 10AP878 - Wisconsin Public Service Corp. v. Arby
Construction
1:30 p.m.
10AP1391-CRNM - State
v. Jeffery G. Sutton
FRIDAY, JANUARY 13, 2012
9:45 a.m.
- 09AP2099 - Admiral Insurance Company v. Paper Converting
Machine Co.
10:45 a.m. 10AP1523-D - Office
of Lawyer Regulation v. Joseph W. Weigel
1:30 p.m. - {09AP1212 - Estate of Brianna Kriefall v. Sizzler USA
Franchise, Inc.
{10AP491
In addition to the
cases listed above, the following case will be decided by the court based upon
the submission of briefs without oral argument:
10AP2566-D - Office
of Lawyer Reg. v. Bridget E. Boyle (Boyle has a practice in Milwaukee)
The Supreme Court calendar may change between
the time you receive this synopsis and when the cases are heard. It is suggested that you confirm the time and
date of any case you are interested in by calling the Clerk of the Supreme
Court at 608-266-1880. That office will also have the names of the attorneys
who will be arguing the cases.
Radio and TV, and print media wanting to take
photographs, must make media requests 72 hours in advance by calling Supreme
Court Media Coordinator Rick Blum at 608-271-4321. Summaries provided are not
complete analyses of the issues presented.
WISCONSIN
SUPREME COURT
TUESDAY,
JANUARY 10, 2012
9:45
a.m.
This is
a certification from the Wisconsin Court of Appeals, District I, headquartered
in Milwaukee. The Court of Appeals may certify cases that it believes
cannot be resolved by applying current Wisconsin law. The Wisconsin Supreme
Court, as the state’s preeminent law-developing court, often accepts such
certifications from the Court of Appeals. This case originated in
Milwaukee County Circuit Court, Judge Dennis P. Moroney, presiding.
2009AP2848 Orlowski
v. State Farm
This certification, originally
arising from a traffic accident, asks the Supreme Court to resolve an apparent
conflict between a Court of Appeals’ decision and a previous Supreme Court
decision involving under-insured motorist coverage and “the collateral source
rule.”
Specifically, the Court of
Appeals asks the Supreme Court whether the Court of Appeals’ holding in Heritage
Mutual Ins. Co. v. Graser, 2002 WI App 125, 254 Wis. 2d 841, 647 N.W.2d 385
– that the collateral source rule is inapplicable to any claim under an
underinsured motorist (UIM) policy – is in conflict with the Supreme Court’s
collateral source rulings. See, e.g., Koffman v. Leichtfuss, 2001 WI 111, 246
Wis. 2d 31, 630 N.W.2d 210; Leitinger v. DBart, Inc., 2007 WI 84, 302
Wis. 2d 110, 736 N.W.2d 1.
Some
background: Lindy Orlowski sustained injuries in a motor vehicle accident
arising out of the negligence of an underinsured motorist. After recovering the
policy limit from the underinsured motorist’s liability carrier, she brought a
claim under her UIM policy against State Farm Mutual Automobile Insurance
Company. Orlowski and State Farm submitted the claim to arbitration under the
terms of the UIM policy.
In its
initial decision, the arbitration panel found that there was “no negligence on
the part of Orlowski and that the
collateral source rule does not apply as per the case of Heritage Mutual.
Therefore, the panel awarded $2,325 for unreimbursed wage loss; $9,498.55 for
the claimed medical lien for the medical bills paid, and also awarded the
plaintiff $2,000 for the out-of-pocket medical expenses paid by the claimant.
The panel also awarded the plaintiff $42,500 for past and future pain,
suffering and disability.
The
“claimed medical lien” of $9,498.55 was the subrogation claim by Orlowski’s
health insurance carrier, United Healthcare. Orlowski asked for a supplemental
finding of the full reasonable value of her medical expenses. The arbitrators
issued a supplemental decision, noting that there was no challenge to the
reasonableness and necessity of the medical services.
The
parties stipulated that the difference between the amounts billed and the
amount paid by Orlowski and her health insurance was due to health insurance
company write-offs or reductions, and that Orlowski was no longer responsible
for payment of these bills. However, the parties did not stipulate that these
damages were not “sustained” as that term is used in the State Farm policy.
Orlowski
filed a petition in Milwaukee County Circuit Court asking for modification of
the arbitration award pursuant to Wis. Stat. § 788.11 to conform the award to
the UIM policy by including the full reasonable value of the necessary medical
services she received.
The circuit court found that under the UIM
policy, Orlowski was legally entitled to collect the full reasonable value of
medical expenses from the tortfeasor, thus the arbitrator’s refusal to award
that amount of the medical expenses was a refusal to apply the plain language
of the UIM policy and constituted a manifest disregard of the law. The circuit
court modified the award. State Farm appealed.
The primary issue is whether a
plaintiff may recover from her own insurer under a UIM policy the reasonable
value of the medical treatments she received or the lesser amount that was
actually paid by the plaintiff, her health insurer, the underinsured motorist
or his insurance company.
The
Court of Appeals frames the issue this way: In order to determine what the
language of an underinsured motorist (UIM) policy requires, and thus whether an
arbitration panel exceeded its authority and issued an award that must be
modified under WIS. STAT. § 788.11, we must consider how Wisconsin Supreme
Court law in collateral source cases such as Koffman v. Leichtfuss, 2001 WI 111,
246 Wis. 2d 31, 630 N.W.2d 201, and Leitinger v. DBart, Inc.,
2007 WI 84, 302 Wis. 2d 110, 736 N.W.2d 1, effects our holding in Heritage Mut. Ins.
Co. v. Graser, 2002 WI App 125, 254 Wis. 2d 851, 647 N.W.2d 385,
where we held that collateral source law is inapplicable to any UIM policy. If Graser is incompatible
with controlling supreme court law, we have no power to withdraw or modify
language in Graser
to resolve the conflict. See Cook v. Cook, 208 Wis. 2d 166,
189-90, 560 N.W.2d 246 (1997).
The
Court of Appeals says only the Supreme Court has the power to overrule, modify
or withdraw language from a published opinion of the Court of Appeals.
WISCONSIN
SUPREME COURT
TUESDAY,
JANUARY 10, 2012
10:45
a.m.
This is
a review of a decision of the Wisconsin Court of Appeals, District III
(headquartered in Wausau), which reversed a Brown County Circuit Court
decision, Judge William M. Atkinson, presiding.
2009AP2752 Wadzinski
v. Auto-Owners Ins. Co.
This
case reviews whether language contained in an executive umbrella policy
provides uninsured motorist coverage for a man killed in an accident while
riding his motorcycle in Door County in 2006.
The
Supreme Court examines principles of construction of the policy: whether an
ambiguity in one provision may be sufficient to overcome the clear purpose and
objective of the policy as a whole.
Some
background: Steven Wadzinski was a
covered insured under three separate Auto-Owners’ policies, including the only
policy that is subject of this appeal: an executive umbrella policy with $2
million limits issued to Wadzinski.
The
circuit court concluded the policy language does not mention uninsured motorist
(UM) coverage and can be reasonably interpreted in only one way. The circuit
court said it is well established that an exception to an exclusion cannot
create coverage when the coverage grant does not extend coverage.
Michelle
B. Wadzinski, individually and as personal representative of the Estate of
Steven M. Wadzinski (Wadzinski) appealed. The Court of Appeals found ambiguity
and concluded that reading the endorsement as a whole suggests a grant of
coverage, not an exclusion.
Auto-Owners
claims the Court of Appeals’ decision is the first and only decision in
Wisconsin to hold a third party umbrella policy, that contains no mention of
the UM coverage anywhere in the policy, must be construed to provide such
coverage. It argues the decision transforms the nature of the risk insured
under such third-party umbrella policies, subjecting excess insurers to a new
class of claims.
Auto-Owners
contends the Court of Appeals’ decision conflicts with case law indicating
umbrella policies providing excess third-party liability coverage cannot be
construed to require payment of supplemental UM benefits by implication, unless
the policy expressly mentions UM coverage.
See § 809.62(1r)(d).
The
disputed language reads:
EXCLUSION
OF PERSONAL INJURY TO INSUREDS FOLLOWING FORM
We
do not cover personal injury to you or a relative. We will cover such injury to the extent that
insurance is provided by an underlying policy listed in Schedule A.
The
Court of Appeals said the first sentence unambiguously informs the insured the
executive umbrella does not provide first-party coverage. Nonetheless, it concluded the second sentence
appears to limit the effect of the first by stating that, under certain
circumstances, the insurer will provide first-party coverage.
Wadzinski argues Auto-Owners sold
the commercial umbrella and executive umbrella policies in combination and they
carry a single policy number. Thus, she
argues, sold as a single policy and issued together, these umbrella coverages
would naturally be read together. She
says policyholders reasonably view umbrella coverage as an extension of
underlying coverage and the title of the policy reinforces that natural
impression. See Oelhafen v.
Tower Ins. Co., 171 Wis. 2d 532, 538-39, 492 N.W.2d 321 (Ct. App.
1992). She says nothing in the
declarations page advised that even though the underlying policy carried UM
coverage, the executive umbrella policy did not.
WISCONSIN
SUPREME COURT
TUESDAY,
JANUARY 10, 2012
1:30
p.m.
This is
a review of a decision of the Wisconsin Court of Appeals, District III
(headquartered in Wausau), which reversed a Brown County Circuit Court
decision, Judge William M. Atkinson, presiding.
2010AP594
State
v. Gilbert/
2010AP1155
State
v. Hunt
In these consolidated cases, the
Supreme Court examines whether the state may bring a Wis. Stat. ch. 980
commitment petition to judgment when the subject of the petition is in the
custody of the Department of Corrections (DOC).
Some background: The Court of
Appeals affirmed circuit court orders committing Carl Cornelius Gilbert, Jr.,
and Price T. Hunt as sexually violent persons under § 980.06, Stats.
Gilbert was in prison because of
sequential convictions, one of which was a predicate offense under ch. 980. On
Dec. 4, 2006, before Gilbert’s mandatory release date, the state filed a petition
seeking his commitment.
Following a hearing on March 22,
2007, the circuit court found probable cause to believe that Gilbert was
sexually violent and ordered him transferred to the Wisconsin Resource Center
“or such other authorized institution as may be determined by the DHS (Department
of Health Services).”
While detained for evaluation,
Gilbert violated his parole. He was revoked and returned to the custody of the
DOC. He was later released on parole again.
He violated this parole as well, and was again revoked and returned to
the custody of the DOC. Gilbert was
placed at the Milwaukee Secure Detention Facility on Nov. 29, 2007 for the
remainder of the ch. 980 commitment proceeding. On Feb. 7, 2008, a jury found
that Gilbert was a sexually violent person.
The circuit court ordered him committed to the DHS “for control, care
and treatment until such time as [he] is no longer a sexually violent
person.” The court also ordered
commitment “to institutional care in a secure mental health facility.”
Gilbert filed a post-conviction
motion arguing that the commitment proceeding became moot when his parole was
revoked because the relief sought by the state, commitment to the custody of
DHS pursuant to §§ 980.06 and 980.065, was impossible since he was in the
custody of the DOC. The circuit court
denied the motion.
Similarly, Hunt asks the Supreme
Court whether a ch. 980 petition should be dismissed when, while the petition
is pending, the subject of the petition is returned to the custody of the DOC.
Hunt was convicted of two
offenses in 2003, one of which was a ch. 980 predicate offense. He was sentenced to five years of initial
confinement and five years of extended supervision on the predicate offense and
to a concurrent nine-month term on the other offense. Prior to Hunt’s Sept. 4, 2007 release on
prison on extended supervision, the state filed a ch. 980 petition for his
commitment. The circuit court found probable cause to believe that Hunt was
eligible for a ch. 980 commitment and ordered him transferred to a detention
facility approved by the DHS and ordered a probable cause hearing.
While in the custody of the DHS,
and while the ch. 980 petition was pending, Hunt was disruptive, violent and
abusive toward a staff member of the Wisconsin Resource Center. On May 29,
2008, an administrative law judge revoked Hunt’s extended supervision. On Aug.
21, 2008, the circuit court ordered Hunt re-confined to prison for two
years. Hunt’s presumptive release date
was on or about Aug. 21, 2010. Hunt was
transferred to the Racine Correctional Institution.
Hunt moved to dismiss the ch. 980
commitment petition or, in the alternative, to be transferred to “an approved
DHS facility.” The circuit court denied
both requests. Hunt remained at Racine
Correctional during the remaining steps of the commitment proceedings. Following a trial to the court which occurred
during his reconfinement period, Hunt was found to be a sexually violent person
and was ordered committed. The circuit
court explained that under the commitment order, Hunt was to be transferred to
a DHS facility after he completed the re-confinement period.
Gilbert and Hunt argue that
because they were both in the custody of the DOC at the time their commitment
orders were issued, the orders were incapable of being executed and the
proceedings should have been dismissed as moot.
The Court of Appeals disagreed.
The state says incarceration
while a person is subject to a ch. 980 commitment order is not unconstitutional. The state says it is the language of the
statute, not its application, which determines whether a statute is punitive
for constitutional purposes. See Hudson
v. United States, 522 U.S. 93, 99 (1997).
The state says Gilbert was still serving a sentence at the time he
committed the act that resulted in his re-incarceration, and both State v.
Szulczewski, 216 Wis. 2d 495, 574 N.W.2d 660 (1998) and State v. White,
2000 WI App 147, ¶9, 237 Wis. 2d 699, 615 N.W.2d 667 at least implicitly
concluded that in the absence of a stay, a criminal sentence takes precedence
over a civil commitment.
WISCONSIN
SUPREME COURT
THURSDAY,
JANUARY 12, 2012
9:45
a.m.
This is
a review of a decision of the Wisconsin Court of Appeals, District II
(headquartered in Waukesha), which affirmed a Walworth County Circuit Court
decision, Judge James L. Carlson, presiding.
2010AP784 State
v. Tyler T.
This case examines the fairly
narrow issue of whether it is improper for an assistant district attorney to
appear at a waiver recommendation meeting when neither the juvenile nor his attorney
was asked to attend.
Some background: At age 15, a delinquency petition charged
Tyler T. as a party to an armed robbery of a gas station, contrary to Wis.
Stat. §§ 939.05 and 943.32(2). The state
requested the juvenile court waive Tyler into adult court because armed robbery
is a felony involving aggression and premeditation. Members of the Walworth County Department of
Health and Human Services (WDHHS) held a staff meeting to decide whether to
recommend that Tyler be tried as an adult.
See Wis. Stat. § 938.18(2m).
The assistant district attorney was invited to the meeting but Tyler and
his defense counsel were not.
Although the assistant district
attorney recommended at the meeting that Tyler be tried as an adult, the WDHHS
made no recommendation in its report because the staff members could not reach
a consensus. The circuit court ordered
Tyler waived into adult court. However,
the circuit court noted that it judged this on its “own feelings” and not based
on any recommendation.
The Court of Appeals affirmed,
rejecting Tyler’s assertion that a waiver investigation report should be
treated the same as a pre-sentence investigation (PSI) report. The Court of Appeals
explained:
A waiver investigation report is
distinct from a PSI report. A petition
to waive a juvenile into adult court can be filed by the prosecution, the
juvenile, or the court. See Wis.
Stat. § 938.18(2). A PSI is ordered
exclusively by the court. See §
972.15(1). In this case, the assistant
district attorney filed the waiver petition.
While § 938.18 does not address whether a prosecutor may be present at a
waiver recommendation report meeting, there is nothing in the Wisconsin
statutes or case law that precludes a prosecutor from appearing. Indeed, it is entirely appropriate for the
prosecution to appear at this meeting given that the assistant district
attorney was the one who requested that Tyler be tried as an adult.
The
state says Tyler has not addressed any constitutional issue and there is no
rule forbidding the waiver investigation report writer from communicating with
either the district attorney or the juvenile’s attorney. It says communication
with the district attorney regarding waiver is compatible with the fluid roles
both agencies share in the juvenile justice system.
Tyler
argues that a waiver investigation report is comparable to a presentence
investigation report (PSI), as both are to be prepared by a neutral author to
provide information to the court. See
Wis. Stat. § 938.18(2m); § 972.15. Tyler
points out that case law emphasizes the critical importance of neutrality in
preparing the PSI. See State
v. Knapp, 111 Wis. 2d 380, 386, 330 N.W.2d 242 (Ct. App. 1983); see also
State v. Howland, 2003 WI App 104, ¶¶32, 33, 264 Wis. 2d 279, 663 N.W.2d
340.
Tyler
says the factual distinctions between previous cases and his situation does not
address the problem whether the prosecutor’s advocacy at the departmental
meeting could consciously or subconsciously influence the author of the waiver
investigation report. He claims in his
case, the report’s neutrality was compromised.
WISCONSIN
SUPREME COURT
THURSDAY,
JANUARY 12, 2012
10:45
a.m.
This is
a review of a decision of the Wisconsin Court of Appeals, District III
(headquartered in Wausau), which affirmed a Brown County Circuit Court
decision, Judge Donald R. Zuidmulder, presiding.
2010AP878 Wis.
Public Service Corp. 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?
WISCONSIN
SUPREME COURT
THURSDAY,
JANUARY 12, 2012
1:30
p.m.
This is
a review of a decision of the Wisconsin Court of Appeals, District I
(headquartered in Milwaukee), which affirmed a Milwaukee County Circuit Court
decision, Judge Dominic S. Amato, presiding.
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.
WISCONSIN
SUPREME COURT
FRIDAY,
JANUARY 13, 2012
9:45
a.m.
This is
a review of a decision of the Wisconsin Court of Appeals, District III
(headquartered in Wausau), which affirmed an Outagamie County Circuit Court
decision, Judge Mitchell J. Metropulos, presiding.
2009AP2099 Admiral
Ins. v. Paper Converting Machine Co.
This case arises from a dispute
over insurance coverage for a woman who was injured at an International Paper
manufacturing plant on Feb. 22, 2005, while working on a machine made by Paper
Converting Machine Co. The Supreme Court examines jurisdictional issues and
lower court decisions that resulted in dismissal of the appeal of two insurance
companies as untimely.
Some background: Admiral
Insurance Co. and Chubb Custom Insurance Co. sought a declaration that no
insurance coverage is available for the claim of Elizabeth Young against Paper
Converting. The insurers sought reimbursement
of a $3.3 million settlement payment.
According to the trial court’s decision, Paper Converting was
self-insured for products liability at the time Young was injured. Following
Young’s accident, Paper Converting, which was bought out by another company,
sought insurance.
In September 2005 Paper
Converting purchased a retroactive claims-made policy covering claims made
after the policy effective date, including injuries that occurred in the prior
ten years, from Admiral. It also purchased
an excess liability policy from Chubb.
Paper Converting was required to
disclose all pending occurrences that could reasonably result in litigation
that had taken place before coverage by Admiral and disclosed a number of
occurrences, including Young’s accident, to Admiral’s policy department. Young had not yet made a claim.
On May 8, 2006, Young sued Paper
Converting for her injuries. Paper Converting notified the claims department at
Admiral. An agreement was reached settling the lawsuit for $3.5 million, signed
only by Young and Paper Converting.
However, after the agreement was
reached but before payment, Admiral discovered the incident occurred. Admiral
paid the policy maximum $2 million, reserving its right to seek reimbursement
from Paper Converting in a subsequent lawsuit.
Chubb paid $1.3 million and joined Admiral’s request for reimbursement.
The parties agreed that payment would not constitute a waiver of the insurers’
claim for reimbursement.
On March 26, 2009, the circuit
court issued a “Decision and Order” that made findings of facts, conclusions of
law, denied the insurers’ summary judgment motions, and granted Paper
Converting’s summary judgment of dismissal. The court said that Paper
Converting had disclosed the accident to the policy department and reasonably
assumed the claims department knew the accident had occurred prior to the
implementation of the insurance policy.
The decision stated the case was
dismissed. However, it is undisputed
this decision and order did not comply with Wambolt/Tyler directive. See
Wambolt v. West Bend Mutual Insurance Co., 2007 WI 35, 299 Wis. 2d 723,
728 N.W.2d 670; Tyler v. RiverBank, 2007 WI 33, par. 25, 299 Wis. 2d
751, 728 N.W.2d 686 (final orders entered after September 1, 2007, must include
a statement that the order or judgment is final for purposes of appeal).
On Dec. 7, 2010, the Court of
Appeals affirmed the summary judgment but on Dec. 21, 2010, on its own motion,
the Court of Appeals ordered its Dec. 7 decision withdrawn and dismissed the
appeal as untimely.
Admiral and Chubb ask the Supreme
Court to review whether the March 26, 2009 judgment was final for purposes of
appeal when it lacked the Wambolt language, and the prevailing party,
which had asserted counterclaim for attorney fees, asked the court not to enter
a final judgment until the attorney fee issue was resolved. They also ask the
Court to review the issue of reimbursement under the circumstances here.
WISCONSIN SUPREME COURT
THURSDAY, JANUARY 13, 2012
10:45 a.m.
The
Wisconsin Supreme Court is responsible for supervising the practice of law in
the state and
protecting
the public from misconduct by lawyers. Lawyers must follow a code of ethics
developed
by the Court. When there is an allegation that a lawyer has acted unethically,
the
Supreme
Court's Office of Lawyer Regulation (OLR) investigates, and, if warranted,
prosecutes
the
attorney. A referee - a court-appointed attorney or reserve judge - hears the
discipline cases
and
makes recommendations to the Supreme Court. The lawyer involved in this case
has a
practice
in Milwaukee.
2010AP1523 Office of Lawyer Regulation
(OLR) v. Joseph W. Weigel
This is one of two lawyer
regulation cases arising from the contentious dissolution of a Milwaukee law
firm. (See OLR v. Eisenberg, 2009AP284-D).
On June 21, 2010, the OLR filed a
complaint alleging that Atty. Joseph W. Weigel committed three counts of professional
misconduct. More specifically, the complaint alleged: (1) that Weigel violated
SCR 20:5.6(a) by causing the firm of Eisenberg, Weigel, Carlson, Blau &
Clemens, S.C. (“Firm”), to enter into an employment agreement with Atty. Alvin
H. Eisenberg (“Eisenberg”) that included an impermissible non-compete covenant;
(2) that Weigel violated SCR 20:7.1(a)(1), SCR 20:7.5(a) and SCR 20:8.4(c)
(2005) [1] by causing the Firm to continue to use the name “Eisenberg” in the
Firm name after Eisenberg resigned from employment with the Firm and objected
to the continued use of his name; and (3) that Weigel violated SCR 20:5.4(a) by
paying bonuses to a non-lawyer legal assistant under a system using clients’
gross recoveries in contingent fee cases as a factor in the computation.
Weigel defended against these
allegations and an evidentiary hearing was conducted. On March 17, 2011, Referee Christine Harris
Taylor filed a report and recommendation concluding that Weigel committed the
professional misconduct alleged in the complaint and recommending a 60-day
suspension and imposition of the costs of the disciplinary proceeding. Weigel filed a timely notice of appeal.
On April 14, 2011, Weigel filed a
motion to reopen the matter “for receipt of additional evidence or, in the
alternative, for an order directing the referee to consider the merits of
Weigel’s motion to reopen based on newly discovered material facts.” The court
briefly stayed the disciplinary proceeding and remanded the matter to the
referee “to evaluate the merits of the respondent-appellant’s motion and to
determine whether additional proceedings before this referee are
warranted.”
The referee concluded that the
newly discovered evidence did not meet the standards necessary to warrant
reopening the matter and recommended the motion be denied. The court concluded that in the interests of
judicial efficiency, the appeal from the March 17, 2011 report and
recommendation and review of the May 24, 2011 report and recommendation would
be briefed and considered together.
OLR contends that the referee
correctly concluded that Weigel violated Supreme Court Rules regarding the
non-compete clause, the use of Eisenberg’s name, and the method by which the
non-lawyer legal assistant was to be paid.
Weigel disputes the OLR’s
allegations. He contends that the
evidence demonstrates that Eisenberg and Weigel intended to enter into an of
counsel/retirement relationship and that it was Eisenberg, not Weigel, who
demanded that Eisenberg be contractually proscribed from competing with the
firm. He asserts that OLR has failed to establish, among other things, that the
Supreme Court Rules prohibit Weigel’s firm from using Eisenberg’s name. He asserts that the bonus system at issue was
originally established by Eisenberg and that OLR failed to present any evidence
relating to the paralegal’s bonus that would implicate the rule prohibiting fee
sharing. He asserts that the referee’s recommended discipline is not supported
by the evidence and requests dismissal of the complaint or imposition of a
public reprimand.
The Supreme Court is expected to
decide if Weigel engaged in misconduct, and if so, the appropriate sanction.
WISCONSIN
SUPREME COURT
FRIDAY,
JANUARY 13, 2012
1:30
p.m.
This is
a review of a decision of the Wisconsin Court of Appeals, District I
(headquartered in Milaukee), which affirmed in part and reversed in part a
Milwaukee County Circuit Court decision, Judge Charles F. Kahn, presiding.
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),[1] 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:
1.
Excel breached “an implied warranty of
merchantability or implied warranty for the sale of food;”
2.
Excel’s breach was “a cause of damage”
to Sizzler USA;
3.
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);
4.
Excel was negligent in selling meat
adulterated with the E. coli bacterium;
5.
Excel’s negligence was a cause of injury
to the customers of E&B’s two Sizzler restaurants;
6.
E&B was negligent at the time of the
E. coli outbreak;
7.
E&B’s negligence was a cause of
injury to the customers of its Sizzler restaurants;
8.
Sizzler USA was not negligent as a
franchisor;
9.
Causal negligence was apportioned as
follows: Excel: 80 percent and E&B:
20 percent.
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?
[1] According to Excel’s response to Sizzler USA’s petition for cross review, Brianna and Chad became sick after eating watermelon that had become cross-contaminated with the E. coli bacterium. The jury apparently concluded, however, that the bacterium had been introduced originally into the restaurant as part of Excel’s meat shipments.