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Court of Appeals Digest

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

| Civil Procedure | Criminal Procedure | Evidence |
| Family Law | Insurance | Juvenile Law | Torts |
| Worker's Compensation |

Cancellations ­ Ambiguous Notice ­
Duty to Clarify ­ Insurance Brokers

Production Credit Assoc. v. Gorton Farms, No. 96-3100 (filed 23 Dec. 1997) (ordered published 28 Jan. 1998)

This case of "first impression" concerns whether Wisconsin law imposes a "duty upon the insured to provide a clear and unambiguous notice of cancellation." The dispute involved crop insurance for corn. The farmer argued that he thought he had canceled the crop insurance for the particular year but the insurer demanded payment on the ground that there had been no cancellation. The farmer paid the bill under protest and brought this action seeking the return of the payment. The trial judge ruled in favor of the farmer.

The court of appeals, in an opinion written by Judge Brown, reversed. The farmer's insurance needs were handled by a man named Kilpatrick. The farmer spoke with Kilpatrick over the phone and later sent him a note. Preliminarily, the court of appeals found that the farmer's written note to Kilpatrick was ambiguous. Although the note clearly canceled the coverage for wheat, it was unclear whether the farmer intended to cancel the corn coverage at that moment with the option of later resuming coverage, or whether the farmer was merely stating that he may also cancel corn coverage at a later time. The note was written in October; corn would not be planted until spring.

Who had the duty to clarify the ambiguity? The court found it critical that Kilpatrick was acting as an insurance "broker" and not as an "agent." A broker serves as a "middleman" between the insured and the insurer. The broker functions as an agent of the insured (here, the farmer). An "insurance agent" represents the insurer, not the insured. Since Kilpatrick served as the farmer's agent, the court was not concerned about disparities of economic power in battles pitting hapless consumers against corporate monoliths. The two stood on "equal footing." The farmer had the duty to provide clear and unambiguous instructions to his agent, the broker (Kilpatrick). Although "a different broker in Kilpatrick's position" might have called to clarify the principal's intent, Kilpatrick was not under any legal duty to do so. Thus, the loss fell "on the person who wrote the ambiguous notice."

Delinquency Adjudications ­ Expungement

State v. Jason J.C., No. 97-1259 (filed 23 Dec. 1997) (ordered published 28 Jan. 1998)

In 1994 a court adjudicated Jason, then 14 years old, as delinquent for two separate sexual assaults. In 1997 Jason, then 17, petitioned to expunge the 1994 adjudications under section 938.355(4m) of the Wisconsin Statutes. Initially the court granted the request but reversed itself when the state argued, in a motion for reconsideration, that chapter 938 applies only to violations after July 1, 1996.

The court of appeals, in an opinion written by Judge Brown, affirmed. It concluded that "because the statute confers a substantive right for a juvenile and does not confirm an existing right, section 938.355(4m) is substantive and not remedial legislation." (Italics original.) In reaching this conclusion the court rejected Jason's various attempts to construe the statute to the contrary, but acknowledged that it did "not like the result" and made "no sense" from a "public policy standpoint."

Medical Malpractice ­ Chapter 655 ­ Nurses' Liability

Patients Compensation Fund v. Lutheran Hosp.-La Crosse Inc., No. 96-1344 (filed 30 Dec. 1997) (ordered published 28 Jan. 1998)

The court of appeals, in an opinion authored by Judge Roggensack, held that chapter 655 of the Wisconsin Statutes "established that only health care providers can be liable for medical malpractice." The statutory definition of "health care provider" "excludes nurses who, while acting within the scope of their employment, assist a hospital in the care of its patients." (The court noted that "nurse anesthetists are affected differently by ch. 655.") Thus, the Patients Compensation Fund was not entitled to subrogation against the nurse or the nurse's professional liability insurance

Strict Products Liability ­ Manufacturer and Sellers ­
Negligence ­ Enhanced Injuries ­ Summary Judgment

Hansen v. New Holland North America Inc., No. 97-0900 (filed 16 Dec. 1997) (ordered published 28 Jan. 1998)

Plaintiff was severely injured when his hand became entangled in a hay baler. He sued the manufacturer and seller of the baler but the trial judge granted summary judgment dismissing their "initial injury" and "enhanced injury" claims. Plaintiffs appealed and the defendants filed various cross-appeals as well.

The court of appeals, in an opinion written by Judge Hoover, affirmed in part and reversed in part. First, the trial court erred when it granted summary judgment dismissing the strict products liability claims against both the manufacturer and seller because it constituted an "apparent danger." The record presented a material issue of fact as to whether the "average user" would have "fully appreciated the attendant risk"; the plaintiff testified that he did not think the slow moving rollers presented a danger. The court rejected the "argument that manufacturers are automatically absolved of liability for design defects where a product's danger is open and obvious." By focusing exclusively on the user's conduct one "creates an incentive for manufacturers to ensure that hazards are in fact open and obvious" and for minimizing safeguards.

Second, the judge also erred by determining that the plaintiff's negligence exceeded the defendants' negligence as a matter of law. Neither the record nor the case law supported this determination, which should be made only in "extremely rare" cases. Material issues of fact were present on whether the baler presented an open and obvious danger, the reasonable foreseeability of the baler's "abuse," the negligence of the seller's demonstration, and the apportionment of any negligence.

The cross appeal addressed the enhanced injury claims, holding that such claims were proper against both manufacturer and seller. The deposition of a plaintiff's expert presented an issue of fact for the jury as to the manufacturer. As to the seller, the court refused to restrict enhanced injury claims to the manufacturer alone under a crabbed reading of Farrell v. John Deere Co., 151 Wis. 2d 45 (Ct. App. 1989).

Claims of Excessive Force by Police ­
Statute of Limitations

Kofler v. Florence, No. 97-1922-FT (filed 23 Dec. 1997) (ordered published 28 Jan. 1998)

The plaintiff appealed a summary judgment dismissing his excessive force claim against a police officer. He argued that the trial court erred by applying the statute of limitations to bar his claims. At the heart of the litigation was the issue of whether the use of excessive force to make an arrest is an intentional tort carrying with it a two-year statute of limitations.

In a decision authored by Judge Myse, the court concluded that the cause of action for the use of excessive force in making an arrest is an intentional tort. The Restatement (2nd) of Torts classifies any use of force to be a civil battery, unless it is privileged. Therefore, where a plaintiff alleges that a police officer used excessive force in an arrest, the real claim is that the officer committed a battery because he or she went beyond the scope of the privilege. This, said the court, is an intentional tort. While it is true that the privilege may be lost even where a police officer unintentionally inflicts an unreasonable amount of force, this does not change the characterization of the tort to negligence.

In sum, the court concluded that the use of excessive force in making an arrest is an intentional tort and, as such, has a two-year statute of limitations. See Wis. Stat. § 893.57.

Claims Against the Government ­
Malpractice ­ Notice of Claim

Snopek v. Lakeland Medical Center, No. 96-3645 (filed 3 Dec. 1997) (ordered published 28 Jan. 1998)

Wisconsin law provides that whenever a claim is being made against governmental bodies or its officers, agents or employees, no civil action may be commenced unless the claimant first gives notice of the claim to the government and satisfies the statutory conditions contained in Wis. Stat. section 893.80. This includes a medical malpractice claim brought against a governmental agency, which is governed by section 893.80(1m). A prior statute required that a malpractice claim had to be made within 120 days after the "happening of the event giving rise to the claim." See Wis. Stat. § 895.43(1)(a) (1977). The present statute, enacted in 1986, mandates that the claim be made within 180 days "after discovery of the injury or, in the exercise of reasonable diligence, the injury should have been discovered."

Lakeland Medical Center, which was a governmental agency owned and operated by Walworth County and which is the defendant in this action, complained that due to this legislative change it has to defend against an allegation, the circumstances of which occurred during emergency room treatment for injuries sustained by the plaintiff in 1979. Its primary claim is that the new discovery-laden notice statute is not retroactive to malpractice occurring before the effective date of the new statute. Instead, the law at the time of the alleged injury should control. Lakeland argued that because the plaintiff in this case failed to comply with the notice of claim statute in existence at the time of the injury, she is now barred from bringing this action.

The court of appeals, in a decision authored by Judge Brown, concluded that the notice statute is a procedural rule, not a substantive one, and therefore should be given retroactive application. Section 893.80(1m) is a procedural condition precedent to the maintenance of a cause of action and not a substantive statute of limitations. The reason it is not a substantive statute of limitations is because it does not limit the time in which the action must be commenced, but instead only establishes the time in which the necessary act of giving notice must be performed in order to preserve the right to proceed.

Nonwork-related Injury Following
Work-related Injury ­ Compensability

Lange v. Labor and Industry Review Commission, No. 97-0865 (filed 9 Dec. 1997) (ordered published 28 Jan. 1998)

Lange sustained a compensable work-related injury to his back while employed for Ideal Door. A magnetic resonance imaging (MRI) revealed that he had degenerative disc disease at L4-L5 with a small focal disc herniation and nerve impingement.

More than one year later Lange slipped and fell on some ice at a friend's house, causing the previously herniated disc to protrude and fragment. He was hospitalized after this slip and fall.

Lange continued working for Ideal Door after the slip and fall, was laid off, and then offered a new position at the end of a worker's compensation hearing. The Labor and Industry Review Commission (LIRC) denied worker's compensation benefits to Lange and rejected his claim for loss of earnings capacity benefits. The circuit court affirmed and the court of appeals, in a majority decision authored by Judge Myse, reversed.

In its decision LIRC noted that a reinjury is compensable if it is caused by the weakened condition of the worker, or if the work-related injury made the worker more vulnerable to reinjury. LIRC also specifically concluded that Lange's second injury "alone was responsible for the dramatic change," thereby implying that if the first injury was related to the results caused by the second injury, the injury would be compensable.

The court of appeals agreed with this implicit conclusion. A work-related injury that plays any part in a second, nonwork-related injury is properly considered a substantial factor in the reinjury. It will not be a substantial factor, however, where the second injury alone would have caused the damages. For LIRC to conclude that a work-related injury is not a substantial factor in a second, related injury, it must find that the claimant would have suffered the same injury, to the same extent, despite the existence of the work-related injury. In all other cases where the two injuries are related, however, the reinjury will be compensable.

The court of appeals concluded that LIRC's factual finding that the slip and fall alone was responsible for the worsening of Lange's back condition was not supported by substantial and credible evidence. By definition an "aggravation" of a preexisting condition links the two injuries. Lange's work-related injury was a disc herniation at L4-L5, and all evidence demonstrated that this back condition was made worse by his second fall so as to create a further herniation. No doctor expressed the opinion that this second injury would have occurred without regard to the work-related injury.

Judge Cane's dissenting opinion suggested that the fact that Lange's symptoms became significantly worse after the slip and fall was sufficient to permit LIRC to infer that the reinjury was unrelated to the initial injury. The majority disagreed. New symptoms arising from a reinjury, standing alone, do not suggest whether a relationship exists between the two injuries. If an earlier accident renders a worker's back more vulnerable to reinjury, a second injury in the same location almost certainly will cause new symptoms. The majority therefore rejected that new symptoms alone can permit such an inference, and concluded that there was no evidence to support LIRC's finding that Lange's second injury was independent and unrelated to his work-related injury.

Accordingly, the majority held that LIRC erred by denying Lange benefits because its determination that his work-related injury was not a substantial factor in his reinjury was not supported by substantial and credible evidence, and because its determination that his conduct prior to the reinjury constituted an intervening cause was not supported by any evidence and therefore lacked a reasonable basis.

This column summarizes all decisions of the Wisconsin Court of Appeals. 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.