Court of Appeals Digest

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

| Civil Procedure | Corporations | Criminal Law | Criminal Procedure |
| Employment Law | Insurance | Public Records Law | Torts |

Auto Insurance - Reckless Driving - Principle of Fortuity

Becker v. State Farm Mutual Automobile Ins. Co., No. 97-1845 (filed 28 May 1998) (ordered published 24 June 1998)

A woman was sleeping at approximately 10 p.m. when her 10th grade sons, Nicholas and Nathan, took her car from the driveway without her permission. They picked up Becker at his home and then picked up Holzhueter and two other boys at Holzhueter's home. None of the six juveniles had a driver's license.

After driving around for awhile, the boys decided to break into a gas station to steal some alcohol. Holzhueter stayed in the driver's seat, and the other five boys took beer and liquor from the gas station and put it in the trunk. They got back in the car and Holzhueter drove away.

The boys decided to take the alcohol to Holzhueter's house. On the way to his house, Holzhueter decided to drive through a stop sign at a high rate of speed and jump through an intersection. The car became airborne and went out of control upon landing. Several of the boys, including Becker, were injured and Holzhueter was killed.

Becker brought suit against 1st Auto and Casualty Co. with whom Holzhueter's parents had an insurance policy. 1st Auto moved for summary judgment, arguing that public policy considerations precluded coverage. Specifically, 1st Auto argued that coverage is precluded by the principle of fortuity, which is also known as the principle of fortuitousness. Under this principle insurance covers fortuitous losses, and losses are not fortuitous if the damage is intentionally caused by the insured. Even when the insurance policy contains no language expressly stating this principle, courts have read it into the policy to further specific policy objectives, including deterring crime. 1st Auto argued that the principle of fortuity precludes coverage in this case because both the plaintiff and the insured were involved in criminal activity when the injuries occurred.

In a decision authored by Judge Dykman, the court of appeals concluded that coverage in this case was not precluded by public policy. The court believed that insurance coverage for injuries caused by reckless driving is within the reasonable expectations of the contracting parties to an insurance contract. In fact, Wis. Stat. section 632.32(6)(b)4 prohibits insurers from excluding coverage on the grounds that a vehicle is being used in a reckless manner.

1st Auto argued that the boys were involved in criminal activity other than reckless driving at the time of the accident, such as operating a motor vehicle without a license, using a vehicle without the owner's permission, and transporting stolen beer and liquor. But there was no evidence that any of these other illegal activities caused the injuries for which Becker seeks compensation. When the Wisconsin Supreme Court adopted the principle of fortuity, it did not conclude that public policy prohibits coverage at any time that the insured is involved in the commission of a criminal act. Instead, the court specifically included the element of causation in its definition of the principle. Insurance does not cover losses that are intentionally caused by the insured.

In this case the fact that Holzhueter did not have a driver's license did not constitute a cause of the accident. The police were not chasing the boys as a result of their theft of liquor from the gas station. And the boys were not racing home to return the vehicle before it was found to be missing. Because Becker's injuries were caused by Holzhueter's reckless driving, not by Becker's or Holzhueter's other criminal acts, the trial court properly concluded that the principle of fortuity did not preclude coverage in this case.

Notice to Persons Whose Records Are to Be Released -
De Novo Circuit Court Review

Milwaukee Teachers' Education Association v. Milwaukee Board of School Directors, No. 97-0308 (filed 12 May 1998) (ordered published 24 June 1998)

The Milwaukee Public School System (MPS) advised several former employees by letter that MPS had received public records requests from a local newspaper for information regarding these employees' personnel files relative to a district-wide criminal background check that MPS had performed. The letter explained that each individual's name, seniority dates, assignments, and places of assignments would be released to the newspaper in 10 days unless the employee brought an action in circuit court for de novo review of the decision to release the information. These disclosures also would reveal that each employee had been fired or quit as a result of the background investigation.

The Milwaukee Teachers' Education Association and the former employees filed a lawsuit seeking de novo review of the decision to release the information sought. The circuit court conducted an evidentiary hearing but did not engage in a de novo review of the decision to release the records. Instead, the circuit court dismissed the complaint on the ground that the court lacked subject matter jurisdiction to address the merits. The basis for its decision was its interpretation of Woznicki v. Erickson, 202 Wis. 2d 178, 549 N.W.2d 699 (1996). In Woznicki the Wisconsin Supreme Court reasoned that although the open records law does not explicitly provide for a de novo circuit court review of a custodian's decision to release records, this right is implicit. However, in this case, the circuit court declined to apply Woznicki, holding that Woznicki was limited to the factual scenario presented therein which dealt with a district attorney as the custodian of public records.

The court of appeals, in a decision authored by Judge Wedemeyer, reversed the circuit court. It concluded that the circuit court's ruling that Woznicki is limited to situations where a district attorney acts as a records custodian was incorrect. The reasoning throughout Woznicki is directed to custodians of all records. See Klein v. Wisconsin Resource Center, No. 97-0679 (Wis. Ct. App. April 1, 1998) (recommended for publication) ("We read Woznicki as standing for the general proposition that when access is sought under the open records law to any records which pertain to an individual, the 'targeted' individual has a right to notification if the record custodian agrees to release the information and the right to seek circuit court review of that decision.")

The appellate court applied the holding in Woznicki in this case and granted the right to judicial review to the former MPS employees. It remanded the matter to the circuit court with directions to conduct a de novo review, balancing the competing interests of whether permitting inspections would result in harm to the public interest versus the compelling public interest in allowing inspection.

Guests of Tenants - Trespassers -
Wrongful Death - Safety Statute

Johnson v. Blackburn, No. 97-1414 (filed 27 May 1998) (ordered published 24 June 1998)

The Mullinses leased an apartment. The lease represented that four people would reside on the premises: the Mullinses and two named children. Unknown to the landlord, another one of the tenant's daughters, along with her three children, moved in with the Mullinses. This lawsuit arose out of a fire in which one of these children died and another was badly injured. The circuit court dismissed the claims because these two children and their mother were trespassers and thus the landlords owed them no duty of reasonable care.

The court of appeals, in an opinion written by Judge Nettesheim, reversed. It held that the children were "guests of the tenants" and hence were not trespassers "even though their occupancy of the premises was contrary to the lease and without the knowledge of the [landlords]." Both children and their mother were on the premises with the express consent of the tenants, the Mullinses. Thus, the sole issue was whether the tenants had lawful authority to consent to their presence. The court rejected the landlords' arguments that the Mullinses had no such authority because they had violated the lease or because the Mullinses were not "possessors" of the basement where the fire took the children. The lease terms and the statutes required that the landlords provide written notice of alleged breaches or commence termination, which they had not done. Nor did it matter that the landlords were unaware of the breaches. Finally, it was undisputed that the Mullinses had "authority to access the basement" and hence they had authority to permit the children to reside there.

The court also held that section 101.645 of the Wisconsin Statutes, which mandates the installation of smoke detectors, is a safety statute. Moreover, the children "were not removed from the protections provided by sec. 101.645, Stats., simply because they were using the basement as sleeping quarters at the time of the fire. If we were to agree that the purpose of requiring a smoke detector in the basement is limited to protecting those in the upstairs living quarters, we would be excluding those persons injured by fire while in the basement doing laundry, arranging stored items or simply passing time." Both the statute's language and other circumstances supported the conclusion that section 101.645 creates civil liability. The court did, however, reverse the judge's ruling that the landlords had violated the statute as a matter of law; the case was remanded for trial.

Recreational Immunity - Recreational Activities

Lasky v. City of Stevens Point, No. 97-2728 (filed 16 April 1998) (ordered published 24 June 1998)

The court of appeals, in an opinion written by Judge Vergeront, affirmed a ruling that the city was immune from suit for injuries suffered when the plaintiff fell on a bridge maintained by the city. The injury occurred when a board cracked on a park bridge. The bridge was used by pedestrians, skaters, and bikers. The plaintiff contended that he was not engaged in a recreational activity because he was walking to the bakery and a barber shop. The court agreed that "walking in a park, in itself" does not amount to recreational activity, but the plaintiff admitted that he "wanted to get some exercise while running his errands." His "walking on the trail in the park is an activity that is substantially similar to the other [statutorily] listed activities and is therefore recreational activity." Nor was the city subject to liability under section 81.15 of the Wisconsin Statutes; the bridge had been "withdrawn from transportation uses and devoted to recreational activities."

Motor Vehicles - Minor Sponsorship Statute -
"Drive-by Shootings" - Future Medical Expenses -
Punitive Damages

Reyes v. Greatway Ins. Co., No. 97-1587 (filed 27 May 1998) (ordered published 24 June 1998)

Reyes was shot during a drive-by shooting by a 17-year-old rival gang member. He sued the shooter and the shooter's automobile liability insurer. More precisely, Reyes claimed that the shooter's mother was an "insured" person under the policy. And because she had signed the application for the shooter's driver license, she was legally liable under the sponsorship statute, section 343.15(2)(b) of the Wisconsin Statutes. A jury awarded Reyes $350,000 in damages and $100,000 in punitive damages. The insurer was to pay $25,000 plus costs for the mother's liability.

The court of appeals, in an opinion written by Judge Brown, affirmed in part and reversed in part. As to the insurer's appeal, the court held that the sponsorship statute did not apply; hence, the mother was not liable in the shooting. The statute predicates liability based upon the parents' knowledge of the child's ability to drive. In this case, the child's conduct - that is, shooting Reyes - had nothing to do with his skill in operating the vehicle on the highway. In short, firing a shotgun from a car into the crowd was distinct from the shooter's act of driving.

The court reduced the award of future medical expenses from $50,000 to about $10,000 because of insufficient evidence. The court did, however, uphold the punitive damages award. Although the shooter was punished criminally and had no means to pay the award, the jury's assessment of punitive damages did not violate due process protections.

Informed Consent - Contributory Negligence

Brown v. Dibbell, No. 97-2181 (filed 19 May 1998) (ordered published 24 June 1998)

The plaintiff underwent a bilateral mastectomy based upon the advice of the defendant doctor. She later sued him for medical malpractice and for failing to obtain her informed consent. The jury found that the doctor was not negligent but that he had violated his informed consent duties. The jury also apportioned causal negligence between the doctor and the plaintiff at 50 percent each. Both appealed.

The court of appeals, in an opinion written by Judge Hoover, reversed. First, the court agreed with the plaintiff that contributory negligence did not apply to informed consent claims. Section 448.30 of the Wisconsin Statutes normally places the duty solely on the doctor to obtain the patient's informed consent. (The court explicitly "hesitated" to impose an "absolute rule that a patient can never be negligent when following what a physician represents as a viable treatment option.") The court agreed "that a patient would not be contributorily negligent by failing to ask a sufficient number of the proper questions or, in all but the most extraordinary instance, by consenting to a treatment option that a doctor presents as a viable option." As to the second issue, the court granted the doctor's cross-appeal that the jury had not been properly instructed on the informed consent issue. The evidence raised exceptions within the informed consent statute that arguably excused certain nondisclosures.