July 21, 2009 – The Wisconsin Supreme Court clarified on July 9 that the unforeseeable harm of a defendant’s act is best characterized as “no breach” of the duty each person owes to exercise reasonable care under the circumstances – not that the defendant owed no duty to the injured plaintiff.

In a concurring opinion, Justice Patience Roggensack used this holding in Behrendt v. Gulf Underwriters Ins. Co., 2009 WI 71, as an opportunity to discuss the scope of an actor’s duty depending upon whether the harm stems from an affirmative act performed negligently or a negligent failure to act.

But Chief Justice Shirley Abrahamson disputed Roggensack’s assertion of a two-tier analysis of duty, arguing that Wisconsin imposes just the one duty to use ordinary and reasonable care under the circumstances.

A defective tank

A pressurized tank exploded in use at an oil change business in 2004, injuring Kenneth Behrendt. An unpressurized version of the tank had been built as a “side project” by an employee at Silvan Industries in 1994 for his son-in-law who owned the oil change shop.

Silvan had a policy permitting employees to use scrap metal and company tools to make items for personal use, such as Christmas tree stands, barbecue grates, and plant stands. Employees were forbidden from constructing pressurized tanks, and Silvan reinforced this policy by cutting holes into the scrap materials, disabling them for pressurization.

A non-Silvan employee made modifications to the tank, and it was then used to force collected oil into other holding tanks with air pressure.

Behrendt charged Silvan was vicariously liable for its employee’s negligent construction of the tank and that Silvan was negligent in its own right for even having a “side jobs” policy. The circuit court dismissed the claims against Silvan, ruling that even if Silvan were negligent public policy factors barred liability. Specifically, the circuit court said that any purported negligence was too remote from the injury and allowing recovery would open the door to fraudulent claims without a sensible stopping point.

The court of appeals affirmed, holding that Silvan’s employee was not working within the scope of his employment when he built the tank. The court of appeals also stated that Silvan had no duty to Behrendt because the harm caused 10 years after the tank’s construction by its employee was unforeseeable.

A duty, but no breach

The supreme court upheld the determination that Silvan’s employee is clearly outside the scope of his employment when he works on a side project, affirming the court of appeals decision that Silvan is not vicariously liable.

But the justices sought to clarify the reasoning used to find Silvan not liable on Behrendt’s negligence claim.

At the outset of its review, the supreme court explained that actionable negligence requires a showing of the defendant’s duty to the plaintiff, a breach of that duty, causation, and actual damages suffered.

The justices criticized the court of appeals for finding no duty when the harm was unforeseeable because Wisconsin follows the minority position in Palsgraf v. Long Island R. Co., 162 N.E. 99 (N.Y. 1928). Whereas the Palsgraf majority held that a defendant owes no duty to an unforeseeably injured plaintiff, the minority asserted that every person owes a duty to exercise due care to protect society from unnecessary danger – not to protect any one individual alone.

Under the facts of this case, the court said that Silvan fulfilled its obligation to use ordinary care in its policies on side jobs. The court further stated that the explosion was unforeseeable, as a matter of law, because the events leading up to the explosion were too attenuated from Silvan’s policy.

The court said the proper resolution of this case is found in Comment J to Section 7 of the Third Restatement of Torts, which instructs that a lack of foreseeable risk “may be a basis for a no-breach determination, but such a ruling is not a no-duty determination.”

Scope of duty

A defendant’s conduct in a negligence case “is not examined in terms of whether or not there is a duty to do a specific act,” the court observed, quoting Nichols v. Progressive Northern Ins. Co., 2008 WI 20.

Instead, “[w]hat is within the duty of ordinary care depends on the circumstances under which the claimed duty arises,” the court said, quoting Hoida v. M&I Midstate Bank, 2006 WI 69.

The scope of duty may depend upon the relationship between the parties, the court explained. For example, in Hoida, a defrauded subcontractor argued that a bank – as part of its duty of ordinary care – should have identified the project subcontractors, verified that sufficient work had been completed to justify disbursement of funds, and collected lien waivers from the subcontractors before disbursing funds from the tortfeasor’s loan. The court disagreed, pointing out that the circumstances included a contract limiting the bank’s obligations.

Roggensack’s concurrence

Expressing concern that the concept of duty may be oversimplified and lost under the Palsgraf minority approach, Roggensack set out to explain the subject.

Roggensack noted that Palsgraf concerned a railroad worker pushing a man from behind to boost him onto a train. The jostled man dropped a package containing an explosive, setting off a shock wave that knocked over railway station scales that struck Helen Palsgraf.

“The Palsgraf decision arose from an affirmative act negligently undertaken and the question presented was whether Palsgraf’s damages were ‘so connected with the negligence that the latter may be said to be the proximate cause of the former,’” Roggensack wrote.

“Hoida, by contrast with Palsgraf, turned on whether the lender’s failure to take certain actions was negligent by omission,” Roggensack continued.

From Palsgraf and Hoida, Roggensack set out a two-tier analysis that looks at whether the negligence arises from an affirmative act or from a failure to act. “When a negligent act has occurred, the actor generally is liable to all who are injured by it,” she said. “In evaluating that liability we do not consider whether the actor had an individualized duty to each injured person.”

By contrast, Roggensack said that if the claim is based on a failure to act, the court must first inquire whether the defendant’s duty of ordinary care under the circumstances required performance of that omitted action. If it did not, that is the end of the analysis, Roggensack wrote.

In this case, Roggensack said that the court decided to view Behrendt’s claim as one based on a negligent, affirmative act. She agreed with the court that Silvan had taken all appropriate steps under its duty of reasonable care.

Abrahamson’s concurrence

Calling Roggensack’s classification scheme “misleading,” Abrahamson emphasized that Wisconsin follows only one standard for duty, whether the conduct is characterized as an act or omission.

As a practical matter, Abrahamson said that courts have been unable to devise a rule to distinguish between negligent acts and negligent omissions. She commented that Roggensack herself had acknowledged a defendant’s negligence may be deemed either, “depending on the lens that the author of the opinion applies.”

Wisconsin’s single standard avoids this problem, Abrahamson continued. “A person is not using ordinary care and is negligent, if the person, without intending to do harm, does something (or fails to do something) that a reasonable person would recognize as creating an unreasonable risk of injury or damage to a person or property,” she wrote.

Reviewing Wisconsin case law, Abrahamson said the court has repeatedly affirmed its adherence to this single standard. She remarked that only in Hoida, a decision authored by Roggensack, was there suggestion that the court had shifted its position.

“Yet Nichols explicitly rejects the idea that Justice Roggensack’s Hoida decision changed the law of negligence as it is explained in the [Rockweit v. Senecal, 197 Wis. 2d 409 (1995),] and [Gritzner v. Michael R., 2000 WI 68,] decisions,” Abrahamson wrote.

“Furthermore, Nichols concludes, in direct contradiction to Justice Roggensack’s concurrence [in this case], that in a negligence case, a defendant’s conduct should not be analyzed in terms of whether the defendant had a duty to perform a specific act.”

  “The Nichols case was decided just last year,” Abrahamson continued. “Justice Crooks’ majority opinion was joined by Justice Roggensack, as well as by Justice Bradley, Prosser, and Ziegler. One wonders what could have happened in the course of one year to make Justice Roggensack suddenly doubt the wisdom of Justice Crooks’ careful decision.”