Sizzler e. coli Case Argued to the Wisconsin Supreme Court

January 27th, 2012 admin No comments

On Friday, January 13th, 2012, the Supreme Court heard oral argument from the three remaining parties to the litigation arising from a 2000 e. coli outbreak at a Milwaukee-area Sizzler restaurant.  This case, begun in 2000, is the longest-running I’ve ever been involved with. 

The issues presented to the court have implications for warranty and UCC interpretation, equitable indemnity, the Weinhagen exception to the American attorney fee rule, and contractual indemnity and offset for insurer payments.  If you’re interested in reviewing the briefs filed with the Supreme Court, you can find them on the appellate version of CCAP, called WSCCA (Wisconsin Supreme Court and Court of Appeals Access).  For easy access and searching, the appellate case number is 09AP1212 (a number I will likely not be able to forget).  The court of appeals briefs are available on the same page.

This decision is sure to hold interest for pretty much all Wisconsin attorneys who practice in civil litigation.  The court of appeals decision, authored by Judge Fine and filed on June 7, 2011, is available here.

Wisconsin Further Regulates Attorney Fee Recovery

December 21st, 2011 admin No comments

I wrote last week about the new Wisconsin law signed by the governor on December 7, 2011, that presumptively limits attorney fee recovery to an arbitrary three times the amount of damages awarded.  And I noted that this law would have unintended consequences for Wisconsin attorneys, clients, and businesses.  It looks like the State Bar agrees.

New Wisconsin Statute Limits “Reasonable” Recoverable Attorneys Fees

December 15th, 2011 admin No comments

The Wisconsin Legislature recently passed a new statute defining “reasonable” attorney fees.  Effective on December 21, 2011, 2011 Wisconsin Act 92 lists categories to be taken into consideration in determining the reasonableness of attorney fees:

(a) The time and labor required by the attorney.

(b) The novelty and difficulty of the questions involved in the action.

(c) The skill requisite to perform the legal service properly.

(d) The likelihood that the acceptance of the particular case precluded other employment by the attorney.

(e) The fee customarily charged in the locality for similar legal services.

(f) The amount of damages involved in the action.

(g) The results obtained in the action.

(h) The time limitations imposed by the client or by the circumstances of the action.

(i) The nature and length of the attorney’s professional relationship with his or her client.

(j) The experience, reputation, and ability of the attorney.

(k) Whether the fee is fixed or contingent.

(L) The complexity of the case.

(m) Awards of costs and fees in similar cases.

(n) The legitimacy or strength of any defenses or affirmative defenses asserted in the action.

 In addition, the statute places a presumptive (and arbitrary) limit of three times the amount of compensatory damages awarded.  Because this is a new statute, there are now issues that will be litigated.  For instance, does the presumptive limit apply to reasonable attorney fees contractually recoverable in the completely successful defense of an action? 

The statute, I think, is a continuation of an effort to make Wisconsin more business-friendly.  While I favor the goal, I think that some of the measures taken to try to reach that goal (at least as far as litigation-related topics go) have been under-considered and appear to arise from common, and sometimes incorrect, conceptions about the legal system from those who don’t work in the legal system.  I don’t think this statute is going to make much difference at all, other than to give Wisconsin attorneys a statute to cite instead of case law.  Time will tell, though.

Interest Accrued on Wisconsin Judgments Drops Dramatically

December 7th, 2011 admin No comments

Under 2011 Wisconsin Act 69, which I wrote about in a previous post, judgment interest in Wisconsin will drop dramatically.  Effective as of December 2, 2011, the interest rate on civil judgments is no longer 12%, but rather 1% over the prime rate, adjusted periodically.  As if there weren’t enough traps for Wisconsin lawyers out there, now there’s a new math requirement. 

It appears that the new requirements affect judgments entered on or after December 2, 2011, rather than applying only to suits filed after the effective date.  I don’t know about you, but I’m going to have to get a new calculator.

To add to the downside, there will be a much reduced incentive to pay judgments quickly.  I’m guessing the intent was to help businesses out, but what about the businesses that own judgments that aren’t being paid for years at a time?  As you Wisconsin attorneys know, a judgment is just a piece of paper, and collection is the real issue.  With this incentive gone, I’m expecting collections to be much more difficult in the future.

Photo courtesy purpleslog via this license.

Sizzler E. Coli Poisoning Case is Scheduled for Oral Argument

November 30th, 2011 admin No comments

The Supreme Court scheduled oral argument for the Sizzler e. coli poisoning case for the afternoon of Friday, January 13, 2012.  No, that’s not a misprint.  Representatives of the three remaining parties in the appeal (Sizzler, E&B Management, and Excel) will argue their respective positions before the court on Friday the 13th.  This is the penultimate step leading to the final decision that might end the run of a case that’s been around since 2000.  We’ll see — this is one of those cases that seems to have endless legs.

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Wisconsin Court of Appeals Addresses the “Mistake” Standard for Relating Back a Pleading

November 29th, 2011 admin No comments

In Wiley v. MMN Laufer Family Ltd. Partnership, the Wisconsin Court of Appeals considered the relation-back doctrine in the context of a personal injury action:

Verdia Wiley appeals the judgment dismissing her personal injury claims against M.M.N. Laufer Family Limited Partnership (“M.M.N.”)–which owned the roller rink building where she was injured.  Wiley argues that because, pursuant to Wis. Stat. § 802.09(3) (2009-10), the claims against M.M.N. raised in her amended complaint relate back to her original complaint–which asserted claims against Skateland, the business that operated the roller rink–the trial court erred in granting M.M.N. summary judgment.  We disagree.  Wiley’s original complaint asserted claims against the roller rink business but did not assert any claims against the building owner.  The building owner, M.M.N., should not have expected to be added as a defendant pursuant to § 802.09(3) because it had no role in owning, operating, or managing the business of Skateland.  For this same reason, we cannot conclude that Wiley made a “mistake” with respect to the newly-added defendant, see id., as she knew that Skateland, the business operator, was a separate entity from the building owner for nearly a year before the statute of limitations expired.

(I figured I couldn’t summarize it any better than the court did).  The court applied the relation back statute to the plaintiff’s attempt to include MMN: 

Pursuant to § 802.09(3), a party seeking to amend its pleading to add a new party after the statute of limitations has expired must meet the following conditions: (1) the claim the party seeks to assert in the amended complaint must arise out of the transaction, occurrence, or event set forth or attempted to be set forth in the original complaint; (2) the added party must receive notice of the institution of the action such that he or she will not be prejudiced in maintaining a defense on the merits within the period provided by law for commencing a claim; and (3) within the period provided by law for commencing a claim, the added party must know, or should know that, but for a mistake concerning the identity of the proper party, the action would have been brought against the added party.

The parties agreed that the only issue was “mistake.”  The court harmonized the very recent Tews decision (I wrote about Tews on January 13, 2011), reasoning that

In Tews, the Wisconsin Supreme Court reversed a grant of summary judgment on the plaintiff’s amended complaint, which asserted a claim against Wisconsin Electric Power Company (“WEPCo”), because the amended complaint related back to the original. Id., 330 Wis. 2d 389, ¶¶1, 5-6. One of the primary issues in Tews was, as it is in Wiley’s case, whether the third prong of the relation-back test had been satisfied–in other words, whether there were “facts permitting the inference that WEPCo knew or should have known that, but for a mistake concerning its identity as a proper party, the action would have been brought against WEPCo.” See id., ¶76. The supreme court held that this prong was met because the original complaint, which was filed against “We Energies” instead of WEPCo, alleged a claim against “‘the servicer of the electrical sub-station at issue.’” Id. Although We Energies was not the servicer of the sub-station at issue, WEPCo was. See id., ¶16. Because these facts permitted an inference that WEPCo “should have known that, but for a mistake concerning the identity of that servicer of the electrical sub-station, WEPCo was the intended defendant,” summary judgment on the amended complaint against WEPCo was not appropriate. See id., ¶¶77-79.

Tews is inapposite to Wiley’s case because in Tews both the original complaint and the amended complaint at issue asserted a claim against the sub-station server, whereas in Wiley’s case the original complaint asserts a claim against the roller rink business, while the amended complaint asserts a claim against the building owner, which in this case is a separate entity from the business owner. While Wiley did in fact allege that “M.M.N. owned and/or operated and/or managed Skateland,” the facts established in M.M.N.’s affidavit make clear that M.M.N. is solely the building owner, not the business operator. Furthermore, although Wiley directs our attention to several factual similarities her case shares with Tews, including that Laufer family members own both the roller rink business and the building and operate out of the same location, see, e.g., id., ¶75, those similarities support the conclusion that M.M.N. had notice of the action such that it would not be prejudiced in defending a claim–the second prong of the Wis. Stat. § 802.09(3) inquiry–which is not at issue in Wiley’s case but which was at issue in Tews. See id., ¶¶72, 74-75.

The biggest lesson for Wisconsin attorneys is to get things done as soon as possible.  Here, the plaintiff learned of the identity of the owner before the expiration of the statute of limitations, but only filed the amended complaint after the statute had run. 

Petersham Roller Skating Rink photo courtesy Newtown grafitti via this license.

Wisconsin Court Nixes End Runs Around Motion for Leave to Add a Party

November 22nd, 2011 admin No comments

In Barricade Flasher v. Wind Lake Auto Parts, the Wisconsin Court of Appeals considered Barricade Flasher’s efforts to bring suit against Wind Lake in Racine County after failing to name Wind Lake as a defendant in an ongoing Milwaukee County case, also brought by Barricade.  

The procedural history isn’t complicated:

On February 12, 2008, Barricade filed suit in Milwaukee County against Jeffrey E. Bodendorfer Jr. and Sr., alleging theft, fraud, conversion, conspiracy, and breach of fiduciary duty.  The Bodendorfers subsequently sought contribution and indemnification from Wind Lake, and thus added them as third party defendants on November 2, 2009.  On February 15, 2010, the circuit court set a March 15, 2010 deadline for the parties to amend their pleadings.  Two weeks after the deadline, Barricade amended its summons and complaint to add Wind Lake as a defendant.  Barricade then filed a motion to extend the deadline to allow it to add Wind Lake. The circuit court denied the motion.

Barricade then filed suit against Wind Lake in Racine County for fraud.  Wind Lake filed a motion to dismiss pursuant to Wis. Stat. § 802.06(2)(a)10., which provides that a court may dismiss a lawsuit when there is “[a]nother action pending between the same parties for the same cause.”  Barricade argued that as it did not sue Wind Lake in Milwaukee County, its lawsuit in Racine County was not the same action.  The circuit court rejected this argument, stating that “both the Milwaukee County and the Racine County cases are going to deal with the same factual circumstances and the same parties (whether named or not).”  The court also noted that:

Barricade had every opportunity to commence an action against Wind Lake in Milwaukee County and was unable to do so in a timely manner. The Racine County action would cause the parties to essentially litigate the same case in two separate counties. While the relief sought is different, the underlying theory of recovery is not.

Barricade appealed, but the appellate court was also not a fan of the end run:

Barricade argues that its Racine County lawsuit should not have been dismissed because the parties differ from those involved in the Milwaukee County lawsuit.  The defendants in the two Aon lawsuits, however, differed as well, yet we held that the circuit court properly dismissed the second lawsuit because Aon did not demonstrate how the claims it raised in the second lawsuit could not have been brought in the first lawsuit, or why the defendant in the second lawsuit could not have been named in the first lawsuit.  Id.  Bringing a new action against a different party is not enough to get around Wis. Stat. § 802.06(2)(a)10.  As the circuit court noted, the Racine County lawsuit against Wind Lake is based on facts and circumstances that would be brought out in the Milwaukee County lawsuit.  There is no basis for Wind Lake to defend itself against two lawsuits stemming from the same claim.  Barricade had its chance to add Wind Lake as a party and did not do so.  Barricade’s only remedy is to appeal the Milwaukee County circuit court’s decision to deny Barricade’s motion to extend the deadline to amend its complaint.  See Aon, 289 Wis. 2d 127, ¶44.

The lesson for Wisconsin attorneys is to do your best to get all defendants lined up when you find out about them, and follow, to the extent possible, the scheduling order put in place by the court.  My experience is that judges are typically sympathetic to good reasons, and to those who want the ability to present their positions, as long as other parties are not improperly disadvantaged.  But it’s always preferable not to find that out the hard way.

Wisconsin Judgments May Garner Less Interest

November 16th, 2011 admin No comments

As reported by the Wisconsin State Bar’s Joe Forward, both houses of the Wisconsin Legislature have passed a bill lowering the interest rate on civil money judgments.  Currently at 12% annual interest, the legislation would drop the rate to 1% over the prime rate in effect on January 1 and June 30 of each year.  As if figuring out the interest due on judgments wasn’t complicated enough for lawyers, many of whom got into this profession to avoid math altogether.  The bill is headed to Governor Scott Walker for his consideration.

The bill was a Republican measure, and passed along party lines.  Read Forward’s article for more information on the opposing points of view.

Judgment, Not Verdict, is the Basis of Costs Award

October 28th, 2011 admin No comments

In Radley v. Ives (Oct. 20, 2011), the Wisconsin Court of Appeals wrestled with the costs statute, Wis. Stat. 814.01.  In this medical malpractice case, William Radley was hospitalized following a heart attack.  While his discharging physician recommended daily anticoagulant tests, a ThedaCare physican at the Veterans Home where Radley moved determined daily anticoagulant testing was unnecessary.  Radley died of excessive blood loss two days after the first anticoagulant test was performed. 

ThedaCare stipulated that its negligence in monitoring Radely’s anticoagulants were a substantial factor in causing his death, and that, because it was responsible for about $10,000 in funeral expenses, the court could answer the funeral expenses question on the jury verdict.  A trial was held regarding pre-death pain and suffering caused by ThedaCare, in which the jury awarded no damages. 

Following the trial, the plaintiff submitted a bill of costs pursuant to Wis. Stat. 814.01(1).  Over ThedaCare’s objections, the trial court awarded costs to the plaintiff.  The appellate court agreed with the trial court, reasoning:

 Based upon the plain language of Wis. Stat. § 814.01(1) and Hartwig’s interpretation of “recovery” in an early version of the statute, we conclude that a plaintiff obtains a “recovery” and is entitled to statutory expenses under § 814.01(1) when litigation results in a court judgment awarding a recovery. A prevailing plaintiff for purposes of § 814.01(1) is a plaintiff who is awarded a recovery in a judgment, not, as ThedaCare incorrectly suggests, a plaintiff who obtains a recovery as a result of a recovery dispute resolved by a trial.

The lesson here is that when settling and permitting a judgment to be taken, be aware that the rule in Wisconsin is that costs will be awarded unless the parties agree differently. 

Dr. Tom photo courtesy aue04117’s photostream via this license.

The Milwaukee Sizzler E. coli Case is Going to the Supreme Court

October 19th, 2011 admin No comments

The Wisconsin Supreme Court has accepted the Milwaukee Sizzler e. coli case for review.  As explained by the Wisconsin Bar,

A three-year-old child died and others became ill after ingesting E. coli contaminated meat at two Milwaukee-area Sizzler area restaurants in 2000. Now, Sizzler USA is fighting to obtain damages and attorney fees from the supplier of beef containing the strain.

The Wisconsin Supreme Court accepted review in Estate of Kriefall v. Sizzler USA Franchise, 2009AP1212/2010AP491, a case in which franchisor Sizzler USA obtained a $6.5 million lost profits award from the meat supplier, Excel Corp., for breaching an implied warranty of merchantability.  Sizzler USA is also seeking $1.7 million in attorney fees and costs incurred in defending the personal injury suit.

The court is asked to examine legal issues related to damage/lost profit limitations for breaches of express and implied warranties, indemnification, and attorney fees.

Although not specifically mentioned in the article above, the court of appeals also awarded to Sizzler $1.5 million that it paid to settle the underlying plaintiff’s claim against Sizzler, which is also part of the Supreme Court review.  The case is a tangle of appeals and cross-appeals, and should make for interesting reading when the Court releases its decision.

I’ve been working on this case since 2005 with  my partner Russ Klingaman.  Since the case was originally filed in 2000 or so, it’s good to see that we’re getting close to a resolution.