Court of Appeals Digest
by Prof. Daniel D. Blinka & Prof. Thomas J.
Hammer
Editor's Note: Each case summarized in the Court of
Appeals Digest includes its new public domain citation.
| Arbitration | Damages | Family Law | Insurance | Worker's Compensation |
Arbitration
Confirmation - Costs - "Double Costs" - Offers to Settle -
Stays
Briggs v. Farmers Ins.
Exchange, 2000 WI App 40 (filed 25 Jan. 2000) (ordered
published 23 Feb. 2000)
The plaintiff was injured in an accident and claimed uninsured
motorist coverage from her insurer. She filed suit but later agreed to a
stay and arbitration. After arbitration Briggs received judicial
confirmation of her award pursuant to section
788.09 of the Wisconsin Statutes. The circuit court also awarded her
costs under chapter
814.
The court of appeals, in an opinion written by Judge Hoover,
reversed. Prior cases established that chapter
814 "envisions a 'prevailing party' as one who is successful in a
litigated trial court proceeding, not one who succeeds in obtaining an
award before an arbitrator." In this case Briggs asked the court to
decide only if one or two policies were applicable. Examining the
record, the court of appeals held that litigation did not amount to a
"contested trial court proceeding." The trial court also erred by
awarding Briggs double costs pursuant to section
807.01. After she agreed to arbitrate the claim, Briggs served the
insurer with an offer to settle under section
807.01. The insurer never responded. The court held that the insurer
was not obligated to respond to the offer because the trial court had
stayed proceedings pending arbitration.
Damages
Contracts - Intentional Interference - Mental Health Treatment -
Compensatory Damages
Musa v. Jefferson County
Bank, 2000 WI App 33 (filed 27 Jan. 2000) (ordered published 23
Feb. 2000)
Musa owned a hotel on which the bank held a mortgage. Musa tried
unsuccessfully to sell the hotel but the bank foreclosed and the hotel
was scheduled for a sheriff's sale. Musa sued the bank and Buelow, a
bank officer, asserting a variety of claims. One set of claims alleged
that Buelow had intentionally interfered with a possible sale to Aliu.
The jury found for Musa and determined that Buelow should pay $4,000 in
consequential damages and $50,000 in punitive damages. The bank was
found liable for $4,000 in consequential losses resulting from its
intentional interference and assessed nearly $400,000 for losses
stemming from its breach of the duty of good faith. On post-verdict
motions, the judge ruled that Musa could not recover the $4,000 in
consequential damages from Buelow because there had been no pecuniary
damages, and, without any compensatory damages, Musa could not recover
the punitive damages award from Buelow.
The court of appeals, in an opinion written by Judge Vergeront,
affirmed on different grounds. The dispositive issue was whether "a
plaintiff may recover damages for the costs of mental health treatment
on a claim for intentional interference with a prospective contract,
when no other compensatory damages are awarded on that claim." The case
law permits damages for emotional distress resulting from intentional
torts where there are "substantial other damages in addition to damages
for emotional distress" (¶ 10). The court held that case law
"requirement of substantial other damages must logically be applied both
to general damages for emotional distress and to damages for costs of
mental health treatment" (¶15). Alternatively, Musa argued that the
$400,000 damage award against the bank satisfied the "substantial other
damages" element. The court also rejected this argument because the
special verdict expressly negated it: The jury was instructed to
consider separately each defendant, each claim, and each category of
damages.
Family Law
Divorce - Maintenance - Consideration of Premarital Cohabitation in
Determining Maintenance - Unjust Enrichment
Meyer v. Meyer,
2000 WI App 12 (filed 9 Dec. 1999) (ordered published 19 Jan. 2000)
The parties in this divorce action cohabited from 1987 until 1993 at
which point they married. The wife filed for divorce in 1997. The
circuit court awarded her maintenance and, in making the maintenance
decision, considered the parties' lengthy nonmarital relationship. The
court of appeals, in a majority decision authored by Judge Dykman,
reversed the circuit court.
Though the determination and amount and duration of maintenance rest
within the discretion of the trial court, the appellate court concluded
that the circuit judge erroneously exercised discretion by considering
the premarital relationship when it made its maintenance determination.
The court relied primarily upon Greenwald v. Greenwald, 154
Wis. 2d 767, 454 N.W.2d 34 (Ct. App. 1990), wherein it held as a matter
of law that a trial court may not consider premarital
contribucontributions in its maintenance and property division
determinations.
The appellate court also addressed the wife's claim of unjust
enrichment based upon her support of her husband while he obtained his
undergraduate and medical degrees, most of which occurred prior to their
marriage. Her husband graduated from medical school one year after the
parties were married and he thereafter began his residency program.
In Wisconsin "unmarried cohabitants may raise claims based upon
unjust enrichment following the termination of their relationship where
one of the parties attempts to retain an unreasonable amount of the
property acquired through the efforts of both." Watts v. Watts,
137 Wis. 2d 506, 532-33, 405 N.W.2d 303 (1987). In a nonmarital
cohabitation situation, for the complaining party to recover under an
unjust enrichment claim, he or she must demonstrate: 1) an accumulation
of assets, 2) acquired through the efforts of the claimant and the other
party, and 3) retained by the other party in an unreasonable amount.
The husband in this case argued that his wife's unjust enrichment
claim could not succeed because she has not shown an accumulation of
assets, pointing out that the claim was based on her support while he
obtained a medical degree. The appellate court agreed with him that a
degree is not an asset for purposes of an unjust enrichment claim.
Judge Deininger filed a dissenting opinion.
Insurance
Comprehensive Liability Policies - Duty to Defend/Indemnify
Successor Entity
Red Arrow Products Company
Inc. v. Employers Insurance of Wausau, 2000 WI App 36 (filed 19
Jan. 2000) (ordered published 23 Feb. 2000)
In May 1984 Red Arrow Products Company ("Old Red Arrow") transferred
and assigned certain of its assets and liabilities to a new corporation
referred to hereafter as New Red Arrow. In this case New Red Arrow
appealed from an order dismissing its action requesting a declaration of
the duty of Employers Insurance of Wausau to defend and/or indemnify New
Red Arrow under liability policies issued by Wausau to Old Red Arrow.
(Old Red Arrow existed in a variety of corporate and partnership forms
prior to the 1984 transfer and assignment of assets and liabilities to
New Red Arrow). New Red Arrow argued that, by operation of law, the
benefits of Wausau's policies which were in effect prior to New Red
Arrow's existence were transferred to it.
In a decision authored by Judge Snyder, the court of appeals
concluded that New Red Arrow was not a named insured and was never
assigned the policies. The 1984 sale agreement gave New Red Arrow
various specified assets, but these did not include the Wausau policies.
The court further rejected New Red Arrow's contention that the benefits
of the Wausau policies were transferred to it by operation of law.
UIM Coverage - Stacking
Meyer v. Michigan Mutual
Ins. Co., 2000 WI App 37 (filed 26 Jan. 2000) (ordered
published 23 Feb. 2000)
Meyer was seriously injured at work when a semi-trailer backed into
him. The truck was insured by Michigan Mutual, its policy carrying
limits of $1 million. Meyer also sought underinsured motorist (UIM)
coverage from Millers Classified Ins. Co. (Millers), which insured two
vehicles owned by his parents, each carrying limits of $250,000. Meyer's
parents also had an umbrella (excess) policy for $1 million issued by
Millers. The trial judge ruled that Meyer was entitled to the UIM
coverage and awarded him $1.5 million from Millers.
The court of appeals, in an opinion written by Judge Anderson,
affirmed. The umbrella policy contained no definition of UIM coverage,
thus forcing the court to consider the parties' intentions. The umbrella
policy required the Meyerses to maintain the UIM coverage; thus, the
Meyerses intended to add the $1 million coverage to the underlying UIM
coverage. The court also held that the case law and the policy language
dictated "that the primary and umbrella policies should be considered
together for determining coverage." Adding the $1 million in excess
coverage to the underlying $250,000 in UIM coverage gave the Meyerses at
least a $1.25 million liability limit. Since this exceeded the $1
million that covered the semi-trailer truck, the Meyerses qualified for
the "underinsured" coverage. Finally, Meyer was permitted to "stack" the
twin $250,000 UIM coverage because separate premiums were paid on each
vehicle.
Exclusions - Permission to Drive - Implied Permission
Heaton v. Mountin,
2000 WI App 45 (filed 19 Jan. 2000) (ordered published 23 Feb. 2000)
Robert and his wife Diane owned a car insured by American Family.
Robert permitted his son, Travis, age 17, to drive the car. Travis later
permitted Mountin to drive the car. Mountin struck Heaton's automobile
raising the issue of whether Mountin was covered under the American
Family policy, which denied coverage. The trial judge refused to grant
summary judgment dismissing American Family.
The court of appeals, in an opinion written by Judge Hoover,
reversed. The policy contained two applicable exclusions: (# 1) "Any
person other than a relative, using your insured car without your
permission, or that of an adult member of your household;" (# 3) "Any
person using a vehicle without the permission of the person having
lawful possession." The court held that the exclusions must be applied
separately. Nothing in the policy prevented exclusion # 3 from applying
to a person using the insured car. Since Travis was in lawful possession
of the car and permitted Mountin to use it, Mountin was not excluded
under this provision. But exclusion # 1 did bar coverage. Neither Robert
nor Diane permitted Mountin to drive the car. Mountin also raised the
issue of their "implied permission" to drive the car, but the summary
judgment record raised disputed issues of fact and the court remanded
the case for further proceedings.
Worker's Compensation
Independent Contractors - Statutory Standards for Determining
Independent Contractor Status
Jarrett v. Labor and
Industry Review Commission, 2000 WI App 46 (filed 25 Jan. 2000)
(ordered published 23 Feb. 2000)
This case concerns the test for determining whether a person is an
independent contractor within the meaning of the Worker's Compensation
Act. Wis. Stat. section
102.07(8)(b) articulates nine conditions that must be met before a
worker is considered an independent contractor. The Labor and Industry
Review Commission (LIRC) contended that this statute is the exclusive
test for determining independent contractor status for worker's
compensation purposes. The plaintiff argued that the LIRC must first
consider common law criteria for determining whether a worker is an
independent contractor or an employee and, only if it first concludes
under the common law that the worker is an independent contractor,
should it apply the statutory criteria.
The court of appeals, in a decision authored by Judge Hoover, agreed
with the LIRC. It held that the nine criteria specified in the statute
cited above supplant the common law and provide the sole test to
determine independent contractor status under the Worker's Compensation
Act.
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.
Wisconsin Lawyer