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.
November 30th, 2009
admin
The Wisconsin Supreme Court has selected seven cases for review. Rather than rehash them all in my own words, I invite you to check out the pithy descriptions of the Wisconsin Law Journal’s Dave Ziemer (at least, I think it’s Ziemer). As the cases get decided, I’ll keep you up to date.
In Behrendt v. Silvan Industries, Inc. , opinion filed July 9, 2009, the Wisconsin Supreme Court addressed a question that plagues many manufacturing and service provider employers: What is the employer’s liability for side jobs performed by its employees using company equipment? The answer (not as clear as you might like):
In order for an employer to be vicariously liable for an employee’s act, the act must have been within the scope of employment. We agree with the court of appeals that summary judgment is appropriate on the claim of vicarious liability because the only evidence presented was that the tank was a side project that was completed for the employee’s own purpose and thus was outside the scope of employment.
The plaintiff’s argument that permitting side jobs raised employee morale did not persuade the court.
In the lengthiest portion of the decision, the court emphasized that the employer bore the duty that all Wisconsin residents bear to exercise care to prevent creating an unreasonable risk of injury to another. However, it also concluded that the injury here, caused when a tank, originally built as a side job by a Silvan employee and later modified, exploded, was not a reasonably foreseeable risk. The court’s language is worth a look by any employer whose employees occasionally take on side jobs.
However, we then look at whether Silvan breached that duty by failing to exercise the care a reasonable person would use in similar circumstances. In most cases, whether a defendant breached a duty is a question of fact that is submitted to the jury and thus is not appropriate for summary judgment. In this case, however, it is the lack of foreseeable risk that convinces us, as a matter of law, that Silvan cannot be said to have failed to exercise ordinary care with regard to its policy on side jobs. Further, there is no material fact in dispute as to Silvan’s policies about side jobs and its prohibition on employees making pressurized vessels as side jobs for personal use. There is in addition uncontroverted evidence in the record that Silvan took steps such as having holes cut into any tanks that were considered as scrap—-as well as testimony of the tank’s owner that this tank itself originally had holes in it—-and that the point of cutting holes into the tanks was to keep them from being used with air pressure. Summary judgment is appropriate on the negligence claim because under these circumstances Silvan did not breach its duty to act with ordinary care.
On April 29, 2009, a very divided Wisconsin Supreme Court addressed, in a thorough if fractured manner, issues of direct claims for breach of fiduciary duty to a minority shareholder and judicial dissolution. The decision in Notz v. Everett Smith Group, et. al, 2006AP3156, arises from a motion to dismiss, so it is particularly instructive for those of us drafting or responding to initial pleadings. However, don’t make the mistake of thinking this case will be a quick read.
The unanimous Court permitted Notz’s fiduciary breach claims based on a so-called “constructive dividend” to proceed, along with his claim for judicial dissolution. This decision was exhaustively explained, with Roggensack writing a separate concurrence (joined by Gableman) and Bradley also writing a separate concurrence (joined by Abrahamson). Ziegler did not participate.
Where Bradley and Abrahamson parted ways with the rest was on the majority’s dismissal of Notz’s claims for breach of fiduciary duty based on loss of corporate opportunity. Bradley’s arguments that the majority’s reasoning is inconsistent are definitely worth having a look at.
