Court of Appeals Digest

By Prof. Daniel D. Blinka & Prof. Thomas J. Hammer

| Arbitration | Attorneys | Attorney Fees | Civil Procedure |
| Contracts | Criminal Law | Criminal Procedure |
| Family Law | Insurance | Motor Vehicle Law |
| Torts |

Costs - Pre-verdict Interest

Finkenbinder v. State Farm Mut. Auto Ins. Co., No. 97-0357 (filed 12 Nov. 1997) (ordered published 17 Dec. 1997)

The plaintiff arbitrated her claim against her underinsurance carrier. Following the arbitrator's award of $131,000, she moved the trial court to award costs, pre-verdict interest on her medical expenses, and post-award interest on all damages. The trial judge denied the motions and she appealed.

The court of appeals, in an opinion written by Judge Snyder, affirmed. First, the court held that section 814.10 of the Wisconsin Statutes does not contemplate an award of costs in arbitration proceedings; rather, the statute envisions a "prevailing party" in a "litigated trial court proceeding." Second, the plaintiff waived any claim for pre-verdict interest on the stipulated medical expenses by not raising it before the arbitrator. Finally, her claim for "pre-verdict interest on all tort damages, liquidated or unliquidated," ran squarely against binding precedent that only the supreme court could overturn.

Legal Malpractice - Causation

Seltrecht v. Bremer, Grischke & Bremer S.C., No. 96-2065 (filed 7 Oct. 1997) (ordered published 20 Nov. 1997)

The court of appeals, in an opinion written by Judge Fine, framed the issue in this case as follows: "When a client is represented sequentially by two lawyers, both of whom were arguably negligent with respect to the same matter, can the first lawyer's alleged negligence be a cause of the client's damages if the client would not have sustained any damage if the second lawyer could have prevented the harm but did not?" The court held that the answer is "no."

The case is an "imbricated medical/legal malpractice case" involving a deformed child born in 1969. Consulted in 1987, the first attorney allegedly advised the plaintiffs that the statute of limitations on the medical malpractice case had expired. On Oct. 18, 1991, a second attorney examined the case and filed a medical malpractice suit against various defendants that was later dismissed for failure to prosecute because the defendants were not served. This case's complicated chronology is nicely summarized in six pages by the court. The complications result because of changes in case law and statutes governing the statute of limitations between 1969 and October 1991. The court held that in October 1991 the applicable law required the commencement of the medical malpractice action by Oct. 19, 1991 (the date of the boy's 22nd birthday).

The court further concluded that the plaintiff's right to sue the doctor was not lost until the second lawyer's complaint was dismissed for lack of prosecution. Accordingly, the first lawyer's alleged negligence was not, as a matter of law, a cause of the plaintiff's loss of their cause of action against the doctor. The court also affirmed the trial judge's decision ordering the plaintiffs to pay the defendants costs of certified copies of two depositions and a set of medical records.

Sanctions - Depositions -
Instructions Not to Answer - Experts

Burnett v. Alt, Nos. 96-3356 and 96-3588 (filed 25 Nov. 1997) (ordered published 17 Dec. 1997)

A doctor and his lawyer appealed orders that compelled discovery of the doctor and imposed sanctions on the lawyer. Specifically, the doctor was directed to answer questions at a deposition as a nonparty expert witness. The lawyer was sanctioned under sections 804.12(1) and (2) of the Wisconsin Statutes. The sanctions stemmed from the attorney's instruction to the doctor not to answer certain questions at a deposition. The court of appeals, in an opinion written by Judge Cane, affirmed.

First, the trial court did not abuse its discretion in imposing sanctions against the lawyer. The lawyer argued that he was "duty bound" to protect his client (the doctor) against providing uncompensated expert testimony to plaintiffs as opposed to transactional testimony. Conceding that the lawyer's position had merit and acknowledging his efforts to resolve the matter with plaintiff's counsel before the deposition, the court observed that the lawyer should have moved for a protective order under Wis. Stat. section 804.01(3) or sought a telephonic ruling pursuant to section 804.05(4)(b). The lawyer followed neither avenue.

Second, the trial court did not abuse its discretion in ordering the doctor to respond to various questions at the next deposition. To the extent that the order was ambiguous or invited attempts by plaintiff to obtain "uncompensated expert testimony," the doctor's lawyer was urged to use the alternatives of telephone rulings or protective orders.

Guardians - Wis. Stat. Section 880.22 - "Just Debts of the Ward"

Community Care Org. of Milwaukee County Inc. v. Evelyn O., Nos. 96-2108 & 96-3254 (filed 28 Oct. 1997) (ordered published 20 Nov. 1997)

The Community Care Organization Inc. was a private company that contracted with the county to provide elder-abuse monitoring and prevention services under section 46.90 of the Wisconsin Statutes. Under the contract, Community Care filed petitions for guardianships and protective placement against two elderly women. Eventually both women were placed in protective settings. Over objections by the women's guardian ad litem, the trial judge ordered the guardianship estates to pay attorney fees to Community Care under Wis. Stat. section 880.22, which requires that guardians "pay the just debts of the ward."

The court of appeals, in an opinion written by Judge Fine, reversed. Community Care argued that it had provided legal services to both women by "successfully putting them under the protective wings of others." The argument overlooked the fact that neither woman contracted with Community Care or approved of its actions. Moreover, Wis. Stat. section 46.90(5m)(c) gives the elderly the right to refuse to accept services. And under section 880.22 the attorney fees were not the "debts" of the wards. Under the American rule each party is responsible for its own attorney fees. Wisconsin recognizes a narrow exception to the American rule where an insured incurs attorney fees in establishing coverage under an insurance policy. Judge Fine saw nothing about this case that warranted a similar finding and suggested that this was a matter best left to the Legislature.

Temporary Guardians - Breach of Trust -
Conflict of Interest - Frivolous Appeals

Yamat v. Verma L.B., No. 96-2313 (filed 14 Oct. 1997) (ordered published 20 Nov. 1997)

An attorney appealed the denial of his request for attorney fees in his role as a temporary guardian. The court of appeals, in an opinion written by Judge Curley, affirmed the denial but justified the result on different grounds. The trial judge had authority to award zero compensation if it found that the attorney had breached his trust with the ward. The record revealed an apparent conflict of interest involving a personal relationship between the attorney's "employer" and another lawyer who represented the ward's son, who had filed the petition declaring the ward incompetent. Even more egregious, the guardian/attorney later went to work for the attorney who represented the ward's son! At no time did the guardian/attorney "acknowledge and rectify the inherent nonwaivable conflict of interest created by his employment relationship." Other evidence established that he was also "derelict in his duties" and engaged in "self-dealing." The court of appeals closed by remanding the matter to the trial court for the imposition of costs against the same attorney for filing a frivolous appeal. Wis. Stat. § 809.25.

Public Officers - School Principals -
Wis. Stat. Section 895.46

School Board of Pardeeville v. Bomber, No. 97-1469 (filed 23 Oct. 1997) (ordered published 20 Nov. 1997)

A school principal submitted her resignation to the school board and received a release from her contract to take another job. The former principal also received her last paycheck. The contract required her to pay a $500 penalty for an early release, but she paid only $315, deducting "unused sick leave." Eventually, the school board sued her for the $185 balance along with two weeks of vacation time the board now claimed she should not have been paid for. The circuit court granted summary judgment in favor of the former principal and awarded her legal fees and costs under section 895.46 of the Wisconsin Statutes, which provides that the governmental unit must pay reasonable attorney fees and costs in such actions unless the judge rules that the public officer or employee was not acting within the scope of her employment when the "acts" occurred. The school board appealed the award of attorney fees and costs.

The court of appeals, in an opinion written by Judge Deininger, reversed. First, this case involved a dispute over money; the principal was defending her personal right to keep the monies she claimed belonged to her. No official "acts" by the board or the principal were involved. In short, the court was unpersuaded that this case involved the principal's acts committed while carrying out her duties as an officer. Nor did this case fall under statutory language covering cases where the governmental unit is absolutely liable for judgment rendered against an officer. To so hold would mean concluding that the board would have been absolutely liable for a judgment rendered against the principal. In sum, the principal was not entitled to costs and attorney fees under section 895.46(1).

Judge Dykman dissented on the ground that the pay dispute could be traced to "acts" done by the principal while employed by the school district.

Settlements - Distribution Orders - Challenges

Herlache v. Blackhawk Collision Repair Inc., No. 97-0760 (filed 11 Nov. 1997) (ordered published 17 Dec. 1997)

An insurance company appealed an order approving a settlement and distributing the proceeds. The insurer also appealed an order denying its motion to vacate the distribution order and authorize the creation of a trust for the minor children. The court of appeals, in an opinion written by Judge Hoover, affirmed because the insurer failed to appear at the hearing upon which the distribution was based and did not demonstrate excusable neglect for the omission (it offered an "office mix-up" excuse). "While [the insurer] does not lose its right to share in the recovery by its failure to participate, it does forfeit its right to object to the application of the settlement proceeds to specific claims."

Motor Vehicle Repair Code - Vehicle Restoration - Damages

Jagodzinski v. Jessup, No. 97-0787 (filed 25 Nov. 1997) (ordered published 17 Dec. 1997)

The plaintiff had been hired by the defendants to restore their 1957 Chevy. He was supposed to restore part of the car and then turn it over to a restoring specialist. The plaintiff's bill came to nearly $12,000 which the defendants refused to pay, citing shoddy workmanship that had led to a higher bill from the restoration specialist. When the plaintiff sued them for payment, the defendants counterclaimed for damages and also asserted that the plaintiff had violated the motor vehicle repair code, entitling them to double damages plus costs and attorney fees. The judge ruled that the motor vehicle repair code was inapplicable to restoration projects and awarded judgment to the plaintiff.

The court of appeals, in an opinion written by Judge Myse, reversed. The court held that restoration work falls within the definition of "repairs" under the code. "Customers" was broadly defined to encompass the owners of all motor vehicles, including "well-informed car collectors." The court also reversed the determination of damages based upon a factual error made by the judge.

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