Vol. 73, No. 5, May
2000
Supreme Court Digest
By Prof. Daniel D. Blinka & Prof. Thomas J.
Hammer
Editor's Note: Each case summarized in the Supreme
Court Digest includes its new public domain citation.
| Civil Procedure | Family Law
| Insurance | Torts |
Civil Procedure
Remands - Substitutions - Supervisory Writs - Chief Judge's
Review
State ex rel. J. H. Findorff &
Son Inc., 2000 WI 30 (filed 6 April 2000)
In an earlier action the court of appeals reversed and remanded a
circuit court decision against the petitioner relating to a breach of
contract. On remand, the petitioner requested a judicial substitution,
the trial judge granted the request, but the chief judge later denied
the request on review. The petitioner then asked the court of appeals to
issue a supervisory writ of mandamus, which it refused to do because the
"original directives on remand required 'specific action,' and
therefore, the right of substitution did not attach."
The supreme court, in a decision written by Justice Crooks, reversed.
The original directives on remand called for "'further proceedings' that
required the circuit court to exercise its discretion," not merely
discharge a ministerial duty. The supreme court also held "that the
chief judge was without authority to review and reverse the circuit
court judge's decision" granting the substitution request. Wisconsin
statutes and court rules provide that a chief judge may only review
orders denying substitution, not those granting the
request.
Chief Justice Abrahamson, joined by Justice Bradley, concurred but
wrote separately to strongly suggest that the supreme court and the
court of appeals expressly address the right to substitution in any
decision mandating a remand.
Justices Wilcox and Bradley (also joined by the Chief Justice) each
filed separate concurring opinions. Justice Wilcox expressed concern
about the scope of the phrase "specific action" and whether the court's
decision will result in "more liberal substitution of judges in civil
actions on remand" (¶ 39). Justice Bradley concluded that "the
majority misconstrues and misapplies prior cases, and precludes the
circuit court from exercising even a scintilla of discretion" (¶
49).
Family Law
PR - Statutory Notice - Testimony Required
Waukesha County v. Steven
H., 2000 WI 28 (filed 24 March 2000)
A circuit court terminated the parental rights of Steven H. to his
daughter Brittany. The court of appeals reversed because some of the
orders removing Brittany from her home failed to include the written
notice required by section
48.356(2) of the Wisconsin Statutes (1997-98).
The supreme court, in a decision written by Chief Justice Abrahamson,
reversed. Two issues were before the court. First, did sections
48.356(2) and 48.415(2) "require each and every order placing a
child outside his or her home contain the written notice prescribed by
sec.
48.356(2) in order for the termination of parental rights to
proceed?" The court held that the statutes do not require that "each and
every order removing a child from his or her home contain the written
notice prescribed by sec.
48.356(2)." Rather, the statutes "require that the last order
specified in sec.
48.356(2) placing a child outside the home, which must be issued at
least six months before the filing of the petition to terminate parental
rights, must contain the written notice required by sec.
48.356(2)." This construction ensures timely notice and "does not
vitiate a termination of parental rights proceeding when one or more
previous orders fails to contain the statutorily prescribed written
notice." The court cautioned, however, that "the better practice" is to
include the statutorily required written notice in all orders to which
the statute applies.
Second, the circuit court violated section
48.356(2) when it failed to hear testimony in support of the
petition's allegations. Nevertheless, the supreme court reviewed the
entire record and concluded that under the totality of the circumstances
Steven H. was not prejudiced by the error. Among the factors considered
was that Steven H. voluntarily and knowingly waived his right to contest
the fact-finding hearing and the testimony by one of his attorneys that
Steven H. understood the facts alleged in the petition. The statutes
nevertheless require the court to hear testimony in support of the
petition's allegations.
Insurance
"Property Damages" - "CGL" Policies - Business Losses
Wisconsin Label Corp. v. Northbrook
Property & Casualty Ins. Co., 2000 WI 26 (filed 21 March
2000)
A company mislabeled various products causing them to be sold at less
than half their intended value. The products' distributor paid the
retailers for their loss and then sought reimbursement from the label
company. The label company notified its insurer, which denied the claim
because no covered "property damage" had occurred. In this lawsuit, the
label company sued the insurer and sought coverage. The circuit court
ruled that the insurer had no duty to defend or indemnify for the losses
stemming from the mislabeling. The court of appeals affirmed.
The supreme court, in a decision written by Justice Wilcox, also
affirmed. The insurer had issued a standard commercial general liability
or "CGL" policy. It protected the insured against liability for damages
caused by its own negligence. The policy defined "property damage" as
"'[p]hysical injury to tangible property, including all resulting loss
of use of that property,' or '[l]oss of use of tangible property that is
not physically injured.'" In sum, the policy covered damages resulting
from "(1) physical injury to tangible property, including all resulting
loss of use of that property, or (2) loss of use of tangible property
that is not physically injured."
The court rebuffed the insured's multiple arguments seeking coverage.
Clearly, the simple act of mislabeling did not physically "damage" the
products, and this foreclosed the argument that the products had
"diminished in value" as covered by the policy. Wisconsin joins those
courts holding "that diminution in value caused by incorporation of a
defective product does not constitute 'property damage' under post-1973
[CGL] policies unless it is the result of 'physical injury' or 'loss of
use.'" Nor had the insured demonstrated that a "loss of use" had
occurred as a result of its mislabeling. Charges stemming from the lost
profits due to undercharging and the cost of inspecting and relabeling
did not constitute "loss of use." Finally, this CGL policy did not cover
all species of "economic loss." Rather, coverage applied "only when
damages are because of 'physical injury to tangible property' or 'loss
of use of tangible property.' The economic losses in this case did not
result from either of these types of damages."
Torts
Emergency Doctrine - Safety Statutes -
Management and Control - Subrogation - Appeals
Totsky v. Riteway Bus Service
Inc., 2000 WI 29 (filed 28 March 2000)
A bus skidded through an intersection on ice and hit another car. The
plaintiff, Totsky, sued the bus company and others. A jury found that
neither the bus driver nor Totsky was negligent. In motions after
verdict, the trial judge ruled that Totsky was entitled to a directed
verdict on negligence on several grounds. First, the bus driver had
violated a safety statute when she skidded through the stop sign.
Second, the emergency doctrine did not excuse her negligence because the
case did not present an issue of management and control. Moreover, her
own excessive peed produced the emergency, rendering the emergency
doctrine inapplicable. In the alternative, the trial judge granted the
plaintiff a new trial because the verdict was against the weight of the
evidence.
The court of appeals reversed both rulings. It held that the
emergency doctrine applied to violations of safety statutes and that
credible evidence supported the doctrine's application in this case. The
court of appeals also held that the trial court had improperly found
that the bus driver was negligent based on excessive speed.
The supreme court, in a decision written by Justice Crooks, affirmed.
First, the court addressed whether the emergency doctrine applied to a
violation of a safety statute (requiring vehicles to stop at stop
signs). Such violations constitute negligence per se, but the emergency
doctrine can excuse the conduct. The court's construction was rooted in
the case law, the restatement, and "other leading authorities."
Moreover, the statutory language at issue - section
346.46 - also supported this view. Applying the law to the facts of
record, the emergency doctrine was properly before the jury because
"management and control is involved in at least two of the duties
pertaining to obeying a stop sign" (¶ 39). For similar reasons, the
circuit court also erred in awarding a new trial. Finally, the circuit
court erred by granting a new trial based on the bus driver's speed on
icy roads. A reasonable jury could have concluded that her speed was
reasonable.
Second, the court addressed whether the subrogees have a duty to
separately petition the supreme court for review to preserve their
subrogation claims. In its summary holding, the court stated that two of
the subrogated parties were not required to file separate petitions
"because they stipulated to waive their rights to participate at trial
and agreed to be bound by the judgment." But a third subrogee who
refused to so stipulate was required to file a petition to preserve its
claim.
Justice Bablitch filed a separate concurring opinion. Justice Bradley
dissented, joined by Chief Justice Abrahamson and Justice Prosser.
Prof. Daniel D. Blinka and Prof.
Thomas J. Hammer invite comments and questions about the digests. They
can be reached at the Marquette University Law School, 1103 W. Wisconsin
Ave., Milwaukee, WI 53233, (414) 288-7090.
Wisconsin Lawyer