Emergency Doctrine Does Not Apply to Dog Owner Who Intervened When Family Pet Was Attacked

Well, as summer vacation comes to a close, it’s time to set down my piña colada, fold up my hammock, and get back to work.  Thank goodness the legal industry takes a hiatus during these warmer months so we can all enjoy days on end in the sun with friends and family.

Or not. But at least I’m not the only one trapped in an office on these gorgeous, fleeting days. The Wisconsin Court of Appeals has been busy at work, too.  A recent decision focused on the importance of the temporal element when determining whether the emergency doctrine applies as a defense to a given fact situation. In Kelly v. Berg, 2014AP001346 (recommended for publication), the court of appeals remanded the case for a new trial after the jury was instructed on the emergency doctrine and returned a verdict in favor of the plaintiff who had suffered a dog bite.

While the defendants argued that the emergency doctrine should not apply to the actions of a person who is attempting to prevent damage to property (in this case, the plaintiff’s dog), the court did not reach this issue. Instead, the appellate court focused on the time in which action is required. For the doctrine to apply, “the person’s reaction to the danger must be “practically instinctive or intuitive.” The court compared two previous cases in which the time to react was two seconds (the doctrine applied) and seven seconds (the doctrine did not apply).

In this case, the appellate court did not refer to or rely upon any specific computation of time that elapsed before the plaintiff reacted. Nevertheless, the record demonstrated that the plaintiff had sufficient time to make a deliberate and intelligent choice whether to intervene in a fight between her dog and the defendants’ dog. The court also held that “when considered as a whole,” the instructions together did not convey the correct legal standard and therefore the erroneous instruction was prejudicial.

The facts are as follows:

Joan Kelly was drawn outside on the evening of June 16, 2011 when she heard her chocolate lab, Moosie, screeching and yelping. [Author’s note: awesome dog name.] Joan found Moosie under attack by her neighbor’s pitbull, Princess. Joan screamed for Princess’s owners, Amanda Berg and Adam Finkler, to come help but they did not respond. When it became apparent to Kelly that Princess would likely kill Moosie if she did not intervene, Kelly grabbed Princess’s jaws and pried them open, releasing Moosie’s neck and allowing Moosie to escape toward the back door of Kelly’s home.

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Seventh Circuit Emphasizes Defenses To Claims Of Bad Faith While Holding That Cosmetic Damage Is A Covered “Direct Physical Loss”

A recent decision by the Seventh Circuit Court of Appeals emphasizes an insurer’s obligation to draft a clear and unambiguous insurance policy if it wishes to exclude certain property damages or losses that it deems to be merely cosmetic. In Advance Cable Company, LLC v. Cincinnati Insurance Company, 14-2620, the Seventh Circuit affirmed a Western District of Wisconsin decision granting summary judgment in favor of the insured, Advance Cable Company, on coverage but granting summary judgment in favor of Advance’s insurer, Cincinnati Insurance Company, on Advance’s claim of bad faith.

The decision recognizes that insurers must be allowed to investigate claims and retain legal counsel without fear that their every action might later be scrutinized as evidence of bad faith. And the decision certainly enforces a high standard to prevail on a claim for bad faith by implying that a successful claim would be one that could be described as “beyond the pale.”

The underlying facts are as follows: Advance had a policy of insurance through Cincinnati covering two properties in Middleton, Wisconsin. After a hailstorm in 2011, Advance submitted a claim to Cincinnati reporting damage to its property. That same month, Cincinnati’s adjuster inspected the roof and “spotted some dents, but he saw little other evidence of damage.” The estimate sent to Advance by Cincinnati noted “some dents to soft metal roof vents and AC fins” but stated that the adjuster “did not observe any damage to roofing.” After Advance’s $1,000 deductible, Cincinnati issued Advance a check for damage to both its buildings totaling $1,512.70.

Six months later, a potential buyer of one of Advance’s buildings had the roof inspected. The buyer’s inspector came to a different conclusion about the extent of the damage. He observed that there was “definitely hail damage” to the roof. Based on this report, Advance asked Cincinnati to reopen the claim. So Cincinnati inspected the roof again, and again it concluded that while some denting existed on the metal roof panels, the denting would “not affect the performance of the panels (roofs)” or reduce the roof’s life expectancy.

Advance believed that Cincinnati was required to replace the damaged roof, but Cincinnati believed that the damage was cosmetic and therefore not a covered “direct physical loss.” Ultimately, whether the damage was cosmetic was irrelevant, because the policy of insurance did not exclude cosmetic damage from its coverage.

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Court of Appeals Analyzes When Interest Accrues on Untimely Paid Insurance Claims

The recent case of Dilger v. Metropolitan Property and Casualty Insurance Company, 2014AP001851 (recommended for publication) analyzed the requirements necessary to obtain statutory interest on an insurance claim that is not promptly paid. The court’s holding appears to set a rather liberal standard regarding the requirement that “there can be no question of liability on the part of the insured,” because the court concluded that even a guilty plea in a related criminal proceeding will not extinguish doubts about liability. Instead, the uncertainty was only eliminated when the insured was sentenced, because only then was the insured’s ability to withdraw her guilty plea eliminated.

In reaching its holding, the Court of Appeals reaffirmed the work product and attorney-client privilege protections applicable to an insurance company’s claims files. However, it also held that under the circumstances of the case before it, the trial court’s error in ordering the production of the claims file was harmless.

The 2006 case of Kontowicz v. American Standard Insurance Co., 2006 WI 48, 290 Wis. 2d 302, 714 N.W.2d 105 established that Wis. Stat. § 628.46 applies to third-party insurance claims with three caveats:

(1) “there can be no question of liability on the part of the insured,”

(2) “the amount of the damages must be in a sum certain amount,” and

(3) “the claimant must provide written notice of both liability and the sum certain amount owed” to the insurer.

Kontowicz, 290 Wis. 2d 302, ¶2. The Kontowicz case also held that claims for interest due under § 628.46 may be bifurcated in order to expedite resolution and to avoid prejudice. Id., ¶ 49.

The Court of Appeals called the Dilger case the “follow-up” to Kontowicz. In Dilger, both parties were appealing the application of the Kontowicz caveats. The insurer argued that its insured’s liability was debatable and that the claimant’s damages were not in a sum certain. During the underlying litigation, the trial court had ordered the production of the insurer’s claims file and the plaintiff had pointed to certain portions of the file in support of its arguments for the interest accrual date.

The case arose as a result of a drunk driver hitting an on-duty police officer walking along a street in response to a call. The officer was severely injured and the driver did not turn herself in for three days. The driver maintained that she thought she hit a deer. The officer filed an action against the driver and the driver’s insurer. The insurer, Metropolitan, eventually settled for its policy limits of $1.5 million. The insured drunk driver also contributed $40,000. All claims were then dismissed with the exception of the officer’s claim for interest under Wis. Stat. § 628.46. The trial court awarded the officer $178,191.78, which was appealed by both parties—the insurer appealed the decision to award interest at all, and the officer appealed the amount of interest awarded.

The arguments concerning the Kontowicz caveats hinged on several important dates, and a timeline may be helpful to understand the decision:

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Wisconsin Supreme Court accepts seven new cases

The Wisconsin Supreme Court has decided to accept review of seven new cases, as summarized on the court system’s website.

Among those cases is WI Pharmacal Co. v. Nebraska Cultures of CA, an insurance coverage case that may clarify the law regarding the “occurrence” and “property damage” requirements in a CGL policy in relation to economic damages.  As pointed out on the court system website, the Court is expected to review the following issues:

  • “Is the supply of an ingredient that causes a recall of a product incorporating the contractually nonconforming ingredient a claim for “property damage”?
  • Does an action that alleges purely contract-based claims seeking purely economic damages as a result of a contractually nonconforming goods constitute an “occurrence”?
  • Does the Business Risk exclusion apply to negate coverage?”

Another insurance case, Johnson v. Cintas Corp. No. 2, reviews the Court of Appeals’ decision to allow a party entitled to interest under Wis. Stat. § 807.01(4) to collect interest at the time the offer of settlement was made, rather than the time that the judgment was entered.  After the offer of settlement pursuant to § 807.01(4) was made by the plaintiff, but before the jury awarded an amount of damages greater than in plaintiff’s offer, the legislature adopted 2011 Wis. Act 69 which reduced the interest amount from 12% to 1% plus prime (or 4.25% in this case).

Stay tuned to On The Docket for more updates as these cases are heard by the Supreme Court.

Wisconsin Court Analyzes Temporal Limit on Bystander Claims

In Seamonson v. Nazareth Health & Rehab. Center, plaintiffs sought review of a circuit court order granting summary judgment against them as to their claim for negligent infliction of emotional dismiss – a/k/a their “bystander” claim.  The Seamonsons’ action stemmed from their discovery of the death of their two-year-old son, Blake.  The Seamonsons had visited a relative at the Nazareth facility on Nov. 1, 2011.  Two days later, on Nov. 3, Blake was put to bed around 9:30 pm.  The next morning, sometime after 9:30, the Seamonsons were unable to wake Blake.  911 was called, CPR was administered and he was rushed to the hospital, but pronounced dead at 11:02 pm.  Blake’s autopsy showed that he had been poisoned after ingesting a Fentanyl medication patch, which the Seamonsons claim was improperly disposed of at Nazareth.

Among others, the Seamonsons brought a bystander claim for negligent infliction of emotional distress against Nazareth.  Bystander claims require that: “(1) the injury suffered by the victim must be fatal or severe; (2) the victim and plaintiff must have a close familial relationship; and (3) the plaintiff must have observed an extraordinary event, namely the incident and injury or the scene soon after the incident with the injured victim still at the scene.”  ¶ 5.  The temporal limit in the third element was at issue here.

The Court of Appeals explained that “Wisconsin courts have not defined a specific temporal limit for bystander claims,” and “[n]o bright line rule defines exactly how soon a claimant must have come upon the scene of the victim’s injury or death in order to state a claim for negligent infliction of emotional distress.”  ¶ 9.  The court explained that this element must be analyzed on a case by case basis and interpreted narrowly.  ¶¶ 9-10, ¶ 12.  Ultimately, after analyzing the temporal situations in other cases, the court affirmed, concluding that the third element had not been met where the Seamonsons discovered their son “after an undetermined amount of time, possibly hours, after his death.”  ¶ 13.

Seventh Circuit Analogizes The Disclosure Of Personal Information Under The DPPA To Purchasing An Umbrella

Has the Senne case finally come to an end? We previously blogged about the Driver’s Privacy Protection Act (“DPPA”) and explained that it is “a federal enactment by Congress as part of the Violent Crime Control and Law Enforcement Act of 1994” that “protects the privacy of personal information assembled by State Department of Motor Vehicles” and only permits the use of such information for certain enumerated purposes. See Remzy Bitar’s August 16, 2013 post for a complete summary of the law and the lengthy history of the Senne litigation. In this most recent Senne decision, the Seventh Circuit Court of Appeals held that it does not matter whether the personal information at issue is actually used for a permissible purpose, so long as it was collected “for use” in connection with a permissible purpose.

After a re-hearing en banc by the Seventh Circuit, the Court of Appeals held that a Village of Palatine, Illinois police officer’s act of placing a parking ticket onto the windshield of Jason Senne constituted a “disclosure” of protected personal information within the meaning of the DPPA. See 695 F.3d 597 (7th Cir. 2012). It then remanded the case back to the district court for a determination of “whether all of the disclosed information actually was used in effectuating” one of the DPPA’s permissible purposes.  695 F.3d at 608 (emphasis in the original). The Seventh Circuit clarified that the court was to determine whether the use was “either a use by the Palatine police in performing its duties or a use in connection with the service of process to initiate the administrative proceeding relating to the parking fine.”

On that question, the district court granted summary judgment in favor of the Village “on the ground that the information disclosed on the parking tickets had furthered both of these purposes.” Senne again appealed, which resulted in the recent decision affirming the district court’s summary judgment dismissal.

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Court of Appeals Upholds Verdict Question Asking Whether Blue Car Was “Comparable” to Red Car in Lemon Law Case

The limits of what constitutes a “comparable” replacement vehicle under Wisconsin’s Lemon Law have been put to the test, and the Court of Appeals recently rejected a plaintiff’s attempt to strike a jury’s finding that a 2012 Blue Ford Escape was a “comparable” replacement for a 2010 Red Ford Escape. See Porter v. Ford Motor Company, 2014AP975. Somewhat ironically, the appeals court relied heavily on Marquez v. Mercedes-Benz, USA, 2012 WI 57—a case in which the prevailing party was represented by the same attorneys who apparently sought to avoid its holding in representing the unsuccessful plaintiff-appellants in Porter v. Ford Motor Company.

In Porter, the Court of Appeals was asked to review the circuit court’s denial of motions after verdict regarding Ford’s allegedly “inconsistent defenses” and the jury’s decision about the color of the replacement vehicle. By way of background, the Porters purchased a 2010 Ford Escape with a red exterior and beige interior. Apparently, the Porters claimed that they would not have purchased a vehicle that was not red with a beige interior and explained that they “chose the red exterior because Mrs. Porter’s first car as a teenager was red” and “they chose the light-colored interior because dark interiors made Mr. Porter feel ‘very enclosed.’” ¶3.

After bringing the vehicle in for repairs several times between 2010 and 2012, the Porters sent Ford a Lemon Law notice under Wis. Stat. § 218.0171 seeking a comparable vehicle. Ford offered the Porters a 2012 Ford Escape but the Porters refused to accept the vehicle because it was blue with a dark interior. Instead of taking the brand new replacement vehicle, they sued Ford.

The case made it before a jury, which determined that although the 2010 Escape was a “lemon,” Ford complied with its duties under the Lemon Law when it provided the Porters with a comparable replacement. The jury’s verdict did not sit well with the Porters, who brought motions after verdict in which they argued that “a blue vehicle with a dark charcoal interior cannot be comparable to a red vehicle with a beige interior as a matter of law.”  ¶9 (emphasis added). The Porters also argued that Ford should not have been allowed to argue both that the vehicle was not a lemon and that even if it was, Ford satisfied its obligations under the law. The circuit court denied these motions, and the Porters appealed. Not surprisingly, it appears that one of the motives for the appeal was to obtain a ruling that would permit them to recover their attorney’s fees under the statute. See ¶23.

The Court of Appeals explained that based on the language of the statutes, § 218.0171(1)-(2), “a successful Lemon Law claim must prove, first, that the vehicle at issue was a ‘lemon,’ and, second, that the manufacturer failed to comply with the law’s provisions.” Thus, Ford’s arguments were hardly inconsistent—it raised defenses to both elements of claim. ¶19.

Just because a consumer is required to choose between a replacement or a refund does not mean that a manufacturer must in turn choose between arguing that a car is not a lemon or that, even if it is a lemon, that it did provide a comparable replacement for it.

¶21.

The Porters also argued that, in essence, the jury’s role should have ended once it determined that the 2010 vehicle was a lemon. The Porters asserted that once that finding was made, the Porters were the prevailing party and the rest of the statutory language should just be ignored. According to the Porters, the verdict question regarding whether the 2012 vehicle was comparable “was a surplus question that was irrelevant under the law.” ¶23. The Court of Appeals did not mince words: “The Porters are wrong.” ¶24. Quoting at length from the Marquez decision, the court pointed out that “the Lemon Law was not created to punish manufacturers, but to get consumers back on the road in quality cars.” ¶25, citing Marquez, 2012 WI 57 at ¶29.

Claims-Made-And-Reported Insurance Policies Not Subject to Statutory Notice Requirements

In a decision I previously reported on, Anderson v. Aul, the Court of Appeals was asked to examine the reporting requirements of a claims-made-and-reported policy of insurance, which is a common type of policy in the context of errors and omissions and professional liability coverage. Claims-made-and-reported policies differ from “occurrence” policies, because occurrence policies generally provide coverage for injuries that “occur” during the policy period even if the claim for the resulting injury is not filed until after the policy expires. In contract, claims-made-and-reported policies contain two requirements to trigger coverage: 1) the claim must be made during the policy period; and 2) the insured must give written of the claim within the policy period.

The appellate court examined a claims-made professional liability policy written by Wisconsin Lawyers Mutual Insurance Company with a policy period of April 1, 2009 to April 1, 2010. However, WLMIC did not receive notice of the claim of malpractice against the insured attorney until March 9, 2011. Despite this delay and despite the language of the policy requiring notice to be made during the policy period, the appeals court held that a “finding of untimeliness is not solely dispositive” of the coverage question and that the circuit court must also determine whether the untimely notice prejudiced the insurer. In its published opinion, the Court of Appeals looked to the reasonableness standard set forth in Wisconsin statutes and held that unreasonably late notice is not per se prejudicial to an insurer. The appellate court’s decision was a blow to insurers who relied on the claims-made-and-reported type of policy to limit their exposure and to keep premiums low.

On review of the Court of Appeals’ decision, the Wisconsin Supreme Court reversed. The court noted that Wisconsin’s notice-prejudice statutes, Wis. Stat. §§ 631.81(1) and 632.26(2) provide that an insured’s failure to furnish timely notice of a claim as required by the terms of a liability policy will not bar coverage unless timely notice was “reasonably possible” and the insurance company was “prejudiced” by the delay. ¶ 4. However, the court held that these statutes do not supersede the policy’s notice requirements. ¶ 7.

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Personal Knowledge Necessary to Establish Impermissible Purpose in Age Discrimination Claims

The Seventh Circuit recently reiterated the rule that admissible testimony must be based on personal knowledge in a case alleging age discrimination. See Widmore v. Sun Chemical Corporation, No. 13-2313 (7th Cir., Nov. 19, 2014). Being blamed for problems that were not your fault is not sufficient to establish that your employer was motivated by an impermissible purpose, and speculation as to the employer’s state of mind does not create a material factual dispute about whether the reason for termination was pretextual.

George Widmar worked for Sun Chemical Corporation as a Plant Manager for sixteen years. Sun Chemical terminated Widmar’s employment in 2009, claiming that the company was unsatisfied with Widmar’s performance. “The gist of his case is that Sun Chemical falsely blamed Widmar [for many of the problems involving its products] to cover up for the fact that it was firing him because of his age.”

However, the court was quick to note that, at first blush, this case did not seem as if it was appropriate for summary judgment disposition: “Generally, when the fact sections of the opposing briefs read like two unrelated stories, that is a clue for a court to look for material facts that require a trial to resolve. …That certainly seemed to be the case here.”

Although the two sides’ stories were dissimilar, the court could not simply end its analysis on a cursory review of the facts. The district court and the court of appeals examined the briefs and record carefully and found that much of the disagreement was created by deficiencies in Widmar’s recitation.

Widmar’s declaration and deposition were “not only self-serving, but also irrelevant in establishing that age was a motivating factor in his termination.” (R. 201, p. 6). Self-serving affidavits can indeed be a legitimate method of introducing facts on summary judgment.

Additionally, Widmar failed to comply with Federal Rule of Civil Procedure 56(e) and Federal Rule of Evidence 602, “both of which require that testimony be based on personal knowledge. Personal knowledge can include reasonable inferences, but it does not include speculating as to an employer’s state of mind, or other intuitions, hunches, or rumors.”

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Whether Property is “Wholly Destroyed” is Determined Solely by Statutory Formula

The Court of Appeals recently confirmed that when determining whether a building cannot be repaired and is therefore wholly destroyed, application of the statutory formula in Wis. Stat. 66.0413 is conclusive. See  Haynes v. American Family Mutual Insurance Company, 2014AP000395. Tracy Haynes home burned down on May 29, 2012. The City of Milwaukee issued a Raze Order on July 10, 2012 stating that the home was “now unfit for human habitation, further occupancy or use, and is unreasonable to repair.”

American Family insured the home for $244,800. As a result of the fire, the home was assessed at $23,300 per the Raze Order. The Order stated that it was unreasonable to repair the home pursuant to Wis. Stat. 66.0413(1)(c). When a property is “wholly destroyed,” the insurance company must pay the “full value” of the policy. See Wis. Stat. 632.05(2). Accordingly, Haynes argued that her home was wholly destroyed because the Raze Order said it could not be repaired and was unfit for human habitation. But American Family disagreed.

American Family obtained a repair estimate for $146,906 and sent Haynes a Total Actual Cash Value Settlement offer listing the Replacement Cost Value as $130,947.62. Days later, American Family increased the amount slightly and then paid Haynes $131,578 on October 9, 2012. American Family had the contractor from whom it obtained an estimate to pull a repair permit, but Haynes objected and the City revoked the permit. Haynes’ home was ultimately razed.

Haynes sued, arguing that American Family owed her the full value of the home. American Family argued that a City inspector told both Haynes and American Family that she had the option of repairing or razing the property and that if she chose to repair it, the Raze Order would be withdrawn. The inspector also allegedly told American Family that the cost of repairs “was in the range of at least $75,000 to $1000,000.” But the Raze Order never mentioned the option of repair, and neither Haynes nor anyone else ever appealed the Raze Order. Further, the informal estimate offered by the inspector still exceeded the statutory formula in section 66.0413 used to determine whether repair is reasonable.

The court of appeals reversed the trial court and held that Haynes was entitled to the full value of her home: $244,800.

Of course, [Wis. Stat. 66.0413’s] command trumps any contrary analysis or post-hoc assessment by [the inspector] that he sets out in his affidavit. Simply put, the focus is on whether repairs are reasonable under the statutory formula, not whether elements of the structure survived the fire. The unappealed Raze Order, which, as we have seen, applied the mandated statutory formula, is conclusive.

¶16.

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