Wisconsin Lawyer: Wisconsin Lawyer June 2000: Court of Appeals Digest 2:

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June 01, 2000

Wisconsin Lawyer June 2000: Court of Appeals Digest 2

LIRC - Compensable Injuries - Rejecting Experts' Opinions

Kowalchuk v. LIRC, 2000 WI App 85 (filed 1 March 2000) (ordered published 26 April 2000)

The court of appeals, in an opinion written by Judge Snyder, affirmed a circuit court's decision that in turn upheld a Labor and Industry Review Commission (LIRC) determination that the plaintiff had not sustained a compensable injury. The plaintiff injured his back at work in 1993 and received some disability compensation. He returned to work in 1994. In July 1996 the company turned down his request to take off on a Saturday and go on vacation the following week. When the plaintiff failed to report to work that Saturday, the company terminated him that following Monday. The very next day the plaintiff visited his doctor, who determined that the plaintiff was "temporarily totally disabled." The plaintiff eventually filed for worker's compensation. After an evidentiary hearing the ALJ determined that the plaintiff had sustained no compensable injury and thus his employer was not responsible for medical expenses and temporary disability after July 1996. He was found to be 25 percent permanently partially disabled as a result of the original 1993 accident.

On appeal the crux of the plaintiff's argument was that LIRC had improperly substituted its own opinion for the "uncontested" diagnosis of his treating physicians. The case law, however, allows LIRC to "reject an employee's expert evidence where the employee has been questioned about the information he or she provided his or her doctor." Here the information the plaintiff gave to his doctor about his firing flatly conflicted with the company's version. LIRC was entitled to believe the company's witnesses and ignore the plaintiff's story as less credible.

Family Law

Children - Parental Contact - Best Interest

Wolfe v. Wolfe, 2000 WI App 93 (filed 28 March 2000) (ordered published 26 April 2000)

A child's mother appealed the circuit court's determination that her ex-husband could have contact with their son by mail. The order provided that the husband's letters should be mailed to his parents who would read them to the son. At the time of the divorce the ex-husband was serving a prison sentence for soliciting his ex-wife's murder.

The court of appeals, in an opinion written by Judge Hoover, affirmed. The mother argued that section 767.24(4) (1997-98) of the Wisconsin Statutes requires that the father prove that contact is in the child's best interest. Rejecting this construction, the court held that section 767.24(4) "requires the court to allocate periods of placement between the parents." If one parent "seeks not to allocate, but rather to deny all contact, that parent has the burden to prove the contact endangers the child's physical, mental or emotional health." In short, the mother's argument erroneously sought to reverse the burden of proof, which remained on her to establish that the ex-husband should have no contact.

Insurance

Extraterritorial Clauses - Bodily Injury Liability Coverage

West Bend Mutual Ins. Co. v. Stegner, 2000 WI App. 91 (filed 16 March 2000) (ordered published 26 April 2000)

Mary Rasmussen died of injuries incurred when her car collided with one operated by Stacy Stegner. Rasmussen's insurer, West Bend, paid benefits to her estate and sought to recover monies from Stegner and her insurer. Stegner was living in Florida when she purchased a policy from Progressive Casualty. The trial court ruled in Progressive's favor, finding it had no coverage in this case.

The court of appeals, in an opinion written by Judge Deininger, affirmed. Had the accident occurred in Florida, the policy clearly would have provided no coverage for Rasmussen. Both the policy and Florida law provide only "personal injury protection" that covers the operator, occupants, and pedestrians. West Bend argued, however, that the policy's "extraterritorial clause" triggered coverage because Wisconsin law allegedly requires at least $25,000 in coverage for bodily injury liability, a sum obviously greater than the "zero" limit on the policy's face. The court of appeals disagreed with this construction of Wisconsin law and the policy. The financial responsibility provision in the extraterritorial clause operates only where there is bodily injury liability coverage in the first place. In other words, since Stegner had no such coverage to begin with, the extraterritorial clause did not create it.

Medical Assistance

Eligibility - Divestment of Assets

Artac v. Wisconsin Department of Health and Family Services, 2000 WI App 88 (filed 30 March 2000) (ordered published 26 April 2000)

In 1992 Artac deeded her home and property to an irrevocable trust and named one Frieda Adams as trustee. Artac's daughter was the beneficiary of the trust. Among the provisions of the trust was one in which the grantor expressly reserved and retained the right to live on and use the real property during the grantor's lifetime. It also had a provision that if two physicians submitted a written statement that the grantor was permanently incompetent, the trustee may in her discretion terminate the trust and distribute its assets pursuant to the terms of the trust.
In 1997 two doctors found Artac to be incompetent and the next month the trustee deeded the property to the beneficiary. Four days later the beneficiary (the grantor's daughter) applied to the Clark County Department of Social Services for medical assistance (MA) benefits for her mother. The county denied the application because it concluded that the mother had divested assets when the trustee transferred the trust property to the beneficiary daughter.

The mother requested a fair hearing before the Division of Hearings and Appeals regarding the denial of her application. The hearing examiner concluded that the mother was ineligible for medical assistance, explaining that an applicant cannot divest assets in order to become eligible for MA benefits. The examiner acknowledged that the trust itself was not subject to the divestment rules because it was created before the "look-back period." The circuit court affirmed the hearing examiner's decision but the court of appeals, in a decision authored by Judge Dykman, reversed.

Wis. Stat. section 49.453 prohibits a person from divesting assets so as to become eligible for medical assistance benefits. The court of appeals concluded that the hearing examiner erred in determining that the mother had divested an asset within the applicable look-back period. The mother's placement of her home and property in the trust was not a divestment prohibited by the statute, because it occurred more than 52 months before she applied for MA benefits. The only question remaining was whether the mother divested an asset by losing her reserved right to live on the property when the trustee transferred the trust property to her daughter in 1998. The court concluded that she did not. A trustee acts on behalf of the beneficiary - not the grantor. Therefore, in this case, the trustee acted on the daughter's behalf when she distributed the trust property; that action was not a divestment of an asset by the grantor as defined in the medical assistance statutes.

Prisoner Litigation

Prisoner Litigation Reform Act - Inmates Confined in Out-of-state Facilities - Filing Fees

State ex rel. Speener v. Gudmanson, 2000 WI App 78 (filed 30 March 2000) (ordered published 26 April 2000)

This case concerns the issue of whether a Wisconsin prisoner who is serving a prison sentence in an out-of-state facility rented by Wisconsin is subject to the filing fees established in the Prisoner Litigation Reform Act.

Wis. Stat. section 814.29(1m), which was created by the Prisoner Litigation Reform Act (1997 Wis. Act 133), requires a "prisoner" to pay a filing fee from his or her trust fund account before initiating certain kinds of appeals. For this purpose the statutes define a "prisoner" as one who is "incarcerated, imprisoned or otherwise detained in a correctional institution."

In a decision authored by Judge Dykman, the court of appeals concluded that the petitioner, who is a Wisconsin inmate confined at a county jail in Texas, is not incarcerated in a "correctional institution" as that term is used in the Prisoner Litigation Reform Act. Accordingly, he is not subject to the filing fee requirement of that act. Instead, he is subject to Wis. Stat. section 814.29(1) under which the court of appeals may order that he be allowed to commence an appeal without paying the filing fee if the appellate court finds that he is unable to pay the fee because of poverty.

Torts

Sleeping Dogs - Liability Insurance - "Dog Owner" Statute

Alwin v. State Farm Fire and Casualty Co., 2000 WI App 92 (filed 28 March 2000) (ordered published 26 April 2000)

The Alwins attended a dinner party at their daughter's home. JoAnn Alwin was injured when she tripped over the daughter's sleeping dog. The Alwins claimed against their daughter's homeowner's insurer, State Farm, which denied the claim. The circuit court granted State Farm's motion to dismiss a complaint brought against it. It ruled that "the dog bite statute," section 174.02(1)(a), is inapplicable "where the dog did not actively engage in any conduct but, rather, lay sleeping."

The court of appeals, in an opinion written by Judge Cane, affirmed. First, the court observed that the statute is more aptly named the "dog owner" rather than the "dog bite" statute. It imposes strict liability on dog owners for even "innocent behavior" by the dog that causes injury. Case law firmly establishes, however, that three considerations might blunt strict liability: public policy, comparative negligence, and the rules of causation. On the record in this case the court held that public policy precluded liability. Here the dog was a "passive instrumentality." Imposing liability in such a case would enter a field without a sensible or just stopping point. Moreover, "to impose liability under the dog owner statute for injuries arising solely from a sleeping dog would effectively result in a pure penalty for dog ownership."

Dog Bites - Children - Contribution - Dog Owner Statute - Child Labor Laws

Fire Ins. Exchange v. Cincinnati Ins. Co., 2000 WI App 82 (filed 16 March 2000) (ordered published 26 April 2000)

A 12-year-old boy was injured by a dog while working as a volunteer at a county humane society. The dog's owner's insurer, Fire Insurance Exchange, paid the boy's family about $40,000 in exchange for a release and an assignment of the boy's claims. Fire Insurance brought this action against the county humane society and its insurer seeking contribution on three theories: 1) negligence; 2) strict liability under the dog owner's statute, section 174.02; and 3), the humane society's liability under the child labor laws, section 103.65 of the Wisconsin Statutes. The defendants denied the claims and raised a release signed by the boy's mother as an affirmative defense. The circuit court granted summary judgment to the defendants and dismissed the complaint.

The court of appeals, in an opinion written by Judge Roggensack, reversed. Initially, the court addressed the basics of contribution, which requires that 1) both parties must be tortfeasors, 2) both parties must have common liability to the same person, and 3) one party must have born an unequal portion of the common burden. Although contribution normally arises in negligence cases, it also applies in claims of strict liability. Finally, a settling party is entitled to bring a contribution claim provided it can show: 1) both parties were obligated to the payee; 2) the amount paid was reasonable; and 3) the proportionate fault with negligent tortfeasors or other apportionment method when negligence is not the basis for mutual liability.

On this record the defendants completely failed to demonstrate that they were entitled to summary judgment on the negligence claim. The claim was therefore reinstated for trial on remand. The court also reversed on the liability claim arising under the dog owner statute. The humane society argued that under recent case law the boy himself was a "statutory keeper" who could not sue other statutory owners, including the dog's "legal" owner. On this record the court could not, however, determine whether the boy was a statutory keeper for two reasons. First, there was simply insufficient evidence in the record on this point. Second, it was alleged that the humane society had violated child labor laws that might preclude such a finding in any event, but the evidence on this point was equally meager.

Lastly as to the dog owner statue, the court also concluded that under prevailing case law "an owner may sue a keeper for contribution when an innocent third party has been injured." As to the claim under the child labor laws, the record also precluded any dispositive ruling. In particular, it must be shown that the boy's work was "dangerous or prejudicial" within the meaning of section 103.65(1).

The final issue addressed by the court concerned the mother's exculpatory release on her son's behalf. Again the court reviewed the case law but could not resolve the issue because of the record's inadequacy regarding the circumstances under which she signed it.

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.