Wisconsin Business and Commercial Litigation

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.

In Mahoney v. Menard (Aug. 17, 2011), the Wisconsin Court of Appeals reviewed a motion to dismiss arising from the plaintiff’s service of an authenticated but unsigned complaint.  Even though a signed copy was filed with the court, Menard argued that the lack of a signature on the served complaint was a fundamental defect, and the court therefore lacked personal jurisdiction.

The Court of Appeals disagreed, finding that the defect was technical in nature, and upholding Kenosha County Judge Schroeder’s denial of the motion to dismiss:

Obviously, the copy of the summons and complaint received by Menards was not identical to the one filed in that it was missing signatures, so the clerk erred by authenticating the unsigned copy, and the attorney erred by failing to sign it. However, Menards has not alleged that its copy differed in any substantive way from the original. So, it is obvious to us that the copy of the summons and complaint Menards received gave it notice that the allegations contained within it were on file with the court. As we already explained, the purpose of the signature requirement was fulfilled in the signed complaint on file with the court. We cannot see how the purpose of the authentication requirement in Wis. Stat. § 801.02 was unfulfilled based on the missing signature alone. So, yes, there was a defect. But it was a technical defect, not a fundamental one.

Despite this court’s willingness in this case to overlook such a defect, the decision certainly could have gone the other direction.  In any event, it caused a lot of additional cost to both parties to chase this one down.  It’s best to avoid all defects if you can — although none of us is perfect — but when one arises, this case may assist you in demonstrating technicality.

In Tews v. NHI, LLC, 2010 WI 137 (Dec. 21, 2010), the Wisconsin Supreme Court addressed the relation back of pleadings by a plaintiff to avoid the statute of limitations.  Tews was injured when he stumbled into a transformer station operated by WEPCo.  Unfortunately, and for a number of reasons, he named WEEnergies, among others, in his complaint, and didn’t add WEPCo until after the statute had run.  When WEPCo moved to dismiss the complaint, Tews argued that his complaint should relate back because WEPCo had notice of the claim and but for a mistake, would have been properly named.

The procedural facts are too complicated to list here.  Suffice it to say that the Court read the relation back principle expansively to give Tews another kick at the cat:

The purpose of the relation-back statute, Wis. Stat. § 802.09(3),⁽²⁾ is to ameliorate the effect of the statute of limitations in a situation where the opposing party has received fair notice of the claim. When a defendant is added as a party after the applicable limitations period and all the requirements of the relation-back statute are satisfied, fair notice has been provided, and the added defendant has been given the full benefit of the protections that the statute of limitations was intended to provide.

The relation-back statute as applied here requires first that the claim asserted in the second amended complaint arose out of the same transaction, occurrence, or event set forth in the original complaint. There is no dispute that this requirement is satisfied. Second, the relation-back statute requires that within the time period provided by law for commencing an action, WEPCo received such notice of the institution of the action that it will not be prejudiced in maintaining a defense on the merits. Third, the relation-back statute requires that within the time period provided by law for commencing an action, WEPCo knew or should have known that but for a mistake concerning the identity of the proper party, the action would have been brought against WEPCo.

One other interesting part of the opinion addresses just how to categorize motions to dismiss versus motions for summary judgment, and more importantly, whether a response to a summary judgment motion is required to present facts by affidavit or not.  Both the majority and the dissent (Ziegler, Crooks, and Gableman) agree that a motion for summary judgment need not come forward with affidavits.  However, the dissent implies that respondents must present their facts by affidavit, while the majority requires only that the facts be of record (admissions in responsive pleadings, for instance):

It bears emphasis that, even though the statute does not always require affidavits to be filed in a proceeding for summary judgment, the best and safest practice is to do so. Attorneys who fail to support or oppose a motion for summary judgment with an affidavit do so at their own peril.

The discussion, both of the relation back principle and the evidentiary requirements to oppose a motion for summary judgment are well worth the read.

Transformer photo courtesy MontyPython’s flickr gallery via this creative commons license.

Olson v. Darlington Mut. Ins. Co., has made yet another interlocutory trip to the appellate court.  This time, the issue was a proposed jury instruction that would have informed the jury that the total damages suffered by the plaintiff did not exceed $75,000.  The trial court determined that the instruction was justified because of the allegation in the complaint:

THAT THE AMOUNT OF DAMAGES SOUGHT AND IN CONTROVERSY IS LESS THAN THE AMOUNT REQUIRED FOR REMOVAL TO THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF WISCONSIN UNDER DIVERSITY OF CITIZENSHIP PURSUANT TO 28 USC 1332(A).

The appellate court disagreed:

The complaint clearly states Olson is seeking less than $75,000 in damages, not that she has, in fact, suffered less than $75,000 in damages.

The Court analogized the plaintiff’s position to that of a small claims plaintiff who proceeds in small claims court to obtain procedural benefits, even though the amount of damages might exceed the amount a small claims court may award. 

Cases like this emphasize the care that must be taken in word and phrase selection in pleadings and briefs.  Choosing phrases that don’t say exactly what you want to convey, no more and no less, can come back to haunt you.  Of course, even painstaking drafting cannot possibly take into account the endless possible issues that may later arise.  If you didn’t believe that writing is one of the most important crafts a lawyer can perfect, this case should convince you.