Vol. 73, No. 3, March 2000

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Court of Appeals Digest

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

| Administrative Law | Civil Procedure | Criminal Procedure |
| Domestic Abuse | Employment Law | Family Law |
| Insurance | Lemon Law | Medical Assistance |
| Taxation | Torts | Trials |

Constructive Discharge - "For Cause" - Frivolous Appeals

Tennyson v. School District of the Menomonee Area, 2000 WI App 21 (filed 14 Dec. 1999) (ordered published 19 Jan. 2000)

The plaintiff resigned her position as a payroll clerk for a school district but then sued alleging that she had been constructively discharged. In a prior appeal the court held that constructive discharge did apply in the context of an ordinary employment contract with a "for cause" provision, and that "an employer may constructively discharge a person where working conditions are so intolerable that a reasonable person is compelled to resign to avoid recurrence." On remand a jury found that she had been constructively discharged and awarded damages. This appeal and cross-appeal followed.

The court of appeals, in an opinion written by Judge Cane, affirmed. First, the court "elaborated" upon its earlier holding, reaffirming that constructive discharge does apply "in the context of an ordinary employment contract with a 'for cause' provision." A constructive discharge occurs where "an employee's working conditions [are] so intolerable that a reasonable person in the employee's position would have been compelled to resign." Besides conditions that are "objectively intolerable," the plaintiff must establish that they caused the resignation. Finally, the employer must have either deliberately created the conditions or knowingly permitted them to continue. The court's opinion elaborates upon the various elements. The record supported the jury's findings.

The court also took up several frivolous claims arguments. The plaintiff claimed that the defendant's summary judgment motion was frivolous and both parties exchanged frivolous appeals broadsides. The court of appeals affirmed the trial judge's decision that the motion was not frivolous and it curtly rejected the frivolous appeals arguments advanced by each side. Prior cases established that certain claims or arguments might themselves be frivolous but the court of appeals will not award fees "unless the entire appeal is frivolous" (emphasis original).

WFEA - Marital Status - Discrimination

Bammert v. LIRC, 2000 WI App 28 (filed 21 Dec. 1999) (ordered published 19 Jan. 2000)

Bammert was fired from her job at a food store. She filed a complaint alleging that she was unlawfully terminated because her husband, a policeman, had arrested her employer's wife. Bammert asserted that she was discriminated against based on her marital status contrary to the Wisconsin Fair Employment Act (WFEA). An administrative law judge dismissed the complaint and LIRC affirmed on the ground that marital status discrimination does not extend to the personal identity or characteristics of one's spouse. The circuit court affirmed LIRC's determination.

The court of appeals, in an opinion written by Judge Cane, also affirmed. The court was satisfied that LIRC's determination that marital status discrimination does not embrace "spousal identity" was a long-standing construction of the WFEA that was entitled to "great weight and deference" upon judicial review. It rejected Bammert's contention that this construction rendered parts of the WFEA "superfluous" (especially its anti-nepotism policies).

Divorce - Enforceability of Fixed Maintenance Stipulations - Estoppel Doctrine

Whitford v. Whitford, 2000 WI App 18 (filed 7 Dec. 1999) (ordered published 19 Jan. 2000)

The parties were married in 1976 and divorced in 1994. At the time of the divorce, they entered into a partial marital settlement agreement that made arrangements for child custody and placement, and property and debt division. A circuit court hearing was held thereafter on certain disputed issues. After the judge decided those contested matters, the parties entered into a second stipulation resolving the issues of maintenance and family support. That stipulation provided that maintenance was denied to the husband and that maintenance to the wife was "a factor as to the family support payment set forth [in the stipulation]." It further provided that "maintenance as to [the wife] shall terminate and be forever banned on August 31, 1998. There shall be no extensions on maintenance beyond August 31, 1998 under any circumstances."

The court assured itself that the parties understood the effect of this stipulation and then accepted it and incorporated it into the divorce judgment. Several months before the maintenance expiration date, the wife brought a motion seeking a maintenance extension. After a hearing, the trial court declined to apply the estoppel doctrine to prevent her from asking for an extension and instead issued an order requiring payment of maintenance until 2001.

In a decision authored by Judge Curley, the court of appeals reversed. In Rintelman v. Rintelman, 118 Wis. 2d 587, 348 N.W.2d 498 (1984), the supreme court explained that the estoppel doctrine requires that "both parties entered into the stipulation freely and knowingly, that the overall settlement is fair and equitable and not illegal or against public policy, and that one party subsequently seeks to be released from the terms of the court order on the grounds that the court could not have entered the order it did without the parties' agreement."

In a later case, the supreme court broadened the application of the estoppel doctrine to prohibit a party from asking for a modification of the amount of maintenance when the parties' stipulation prohibited the modification. See Nichols v. Nichols, 162 Wis. 2d 96, 469 N.W.2d 619 (1991).

The court of appeals concluded that all of the conditions found in Rintelman and Nichols were met in this case. Accordingly, the wife should have been estopped from requesting an extension of the maintenance period.

Divorce - Property Division - Inclusion of Termination Benefits Package in Division of Assets

Garceau v. Garceau, 2000 WI App 7 (filed 1 Dec. 1999) (ordered published 19 Jan. 2000)

The issue before the court of appeals was whether an insurance company's termination benefits package for its employees, a type of deferred compensation plan, should be divided at the time of divorce as part of the marital estate. Unlike a pension, the plan does not set money aside in a pool designated for the benefit of the particular employee. Rather, the amount of termination benefit is based on the insurance agent's performance during the 12 months prior to termination and the number of years the agent has been with the company at the time of termination.

The circuit court concluded that "there is no way that an amount can be arrived at with any degree of accuracy." Thus it excluded the termination benefits package from the property division.

In a decision authored by Judge Brown, the court of appeals concluded that the termination benefits should have been included in the marital estate. While the extended earnings are not a pension plan, they are the insurance company's way of providing for its agents when their careers are over. As future benefits, they are similar enough to a pension plan to be treated like one when dividing the marital estate. Accordingly, the court of appeals remanded the case to the circuit court to use its discretion to reach an equitable division of this asset.

UIM - Exhaustion of Limits

Danbeck v. American Family Mutual Ins. Co., 2000 WI App 26 (23 Dec. 1999) (ordered published 19 Jan. 2000)

While riding his bike Danbeck was severely injured by another driver, who had $50,000 in liability coverage through his insurer. Danbeck settled with the other driver and his insurer for $48,000. He then sought compensation for excess damages from American Family under his underinsured motorist (UIM) coverage. American Family denied the claim because Danbeck had failed to exhaust the other driver's liability coverage. The circuit court concluded that the exhaustion clause was ambiguous and ruled in Danbeck's favor.

The court of appeals, in an opinion written by Judge Vergeront, reversed. The policy was not ambiguous. "The phrase 'limits of liability ... exhausted by payment of judgments or settlements' unambiguously requires that the UIM policyholder receive payment from the liability insurer equal to the limits of applicable liability policies" ¶7.

"Payment" meant "compensation paid by the liability insurer and received by the insured." The court's construction did not contravene public policy or the case law construing UIM coverage.

Coverage - "Public or Livery Conveyance" - "Hire" to the General Public

Morris v. Buttney, 2000 WI App 23 (filed 28 Dec. 1999) (ordered published 19 Jan. 2000)

Buttney is the sole owner of a general delivery service that picks up and delivers "essentially anything except hazardous waste and groceries." While delivering a Federal Express (Fed Ex) package, he was involved in an accident. Buttney's vehicle was covered by a policy that excluded liability arising out of the operation of a vehicle "while it is being used as a public or livery conveyance." The circuit court agreed with the insurer that the clause precluded coverage.

The court of appeals, in an opinion written by Judge Cane, affirmed. Buttney argued that the plain meaning of "public or livery conveyance" limits its reach to the "hired transport of people only." Looking at case law and dictionaries, the court ruled that the term's common meaning included the transport for hire of things as well as people. Buttney's alternative argument was that his service was not available to the "general public" at the time of the accident because he was delivering solely for Fed Ex. The record, however, failed to support this claim. On the date of the accident Buttney was delivering exclusively for Fed Ex, but less than 5 percent of his business was done with Fed Ex. On most days he served any one who needed his services.

"Pay and Walk" Clause - Frivolous Claims - Notice

Hoffman v. Economy Preferred Ins. Co., 2000 WI App 22 (filed 7 Dec. 1999) (ordered published 19 Jan. 2000)

Hoffman was injured in an automobile accident with Metz, a minor driver who was sponsored by her father. Metz was driving a truck owned by the Emmerichs and insured by Badger Mutual Ins. Co. Badger conceded that Metz was an additional insured under the policy. Badger acknowledged primary liability and paid its policy limits of $100,000 to Hoffman, who then released Badger and the Emmerichs (the owners) but not the Metzes. In this action the circuit court granted Badger's request to be dismissed as a party, ruling that Badger had no duty to defend or indemnify the Metzes and also ruling that the Metzes' insurer, Economy Preferred Ins. Co., had made frivolous arguments.

The court of appeals, in an opinion written by Judge Peterson, affirmed in part and reversed in part. First, the Badger policy's "pay and walk" provision was valid as to Metz. The case law requires that such provisions be "conspicuously displayed" in the policy so that the insured is given proper notice of the insurer's right to pay limits and "walk away." These requirements did not, however, apply to an additional insured such as Metz, who never would have seen much less read the policy anyway. Second, the court rejected the argument that "an insurer must obtain a written instrument or court order granting credit based on its settlement." Simply put, no legal authority supported this claim.

Third, the court reversed the frivolous claims finding. Although the circuit court has the authority to raise a frivolous argument issue on its own motion, the party accused of misconduct must be given adequate notice and an opportunity to respond. None of the other parties sought sanctions for frivolousness against Badger. Isolated comments in the record accused Badger of proffering arguments that "bordered" on the frivolous, but this fell short of adequate notice.

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