Vol. 74, No. 6, June 2001

Supreme Court Digest

by Prof. Daniel D. Blinka &
Prof. Thomas J. Hammer

• Civil Procedure
• Insurance
• Motor Vehicle Law
• Municipal Law
• Torts
• Worker's Compensation

Civil Procedure

Default Judgments - Relief From Judgments

Shirk v. Bowling Inc., 2001 WI 36 (filed 11 April 2001)

Shirk sued Bowling Inc. in a "post-employment dispute" and claimed she was owed severance pay, additional wages, and other monies. She served a copy of the summons, complaint, and notice of service on the Department of Financial Institutions (DFI) on March 6, 1998. See Wis. Stat. § 181.66(2). Bowling received the copy of the summons, complaint, and notice on March 17, 1998. On March 30 Shirk moved for default because Bowling had not filed an answer within 20 days of her service on DFI (March 6). Bowling filed its answer on April 1. The circuit court denied Shirk's motion for default, reasoning that it would be required to reopen the judgment anyway based upon the excusable neglect standard of Wis. Stat. section 806.07(1). The court of appeals reversed, based on the trial court's error in its "preemptive use" of section 806.07(1).

The supreme court, in a decision written by Justice Crooks, reversed the court of appeals. The court held that trial judges may make "preemptive use of Wis. Stat. § 806.07(1)" (¶ 2). The decision to grant default judgments rests within the trial court's discretion and is guided by such policies as the law's preference that litigants have their "day in court" and the law's disfavor of defaults. Moreover, "a circuit court does not erroneously exercise its discretion when it denies a motion for default judgment because it concludes that it would thereafter be compelled to entertain a motion to set aside that judgment" (¶ 17). Bowling demonstrated "excusable neglect" based upon an apparent inconsistency between the summons and the notice regarding the time limits within which the answer was to be filed. A reasonably prudent person would have been "confused" about whether the 20-day period began on March 6, the date of filing with DFI, or March 17, the date Bowling received the summons. Finally, Bowling also established that it had a meritorious defense, as required by statute.

Insurance

Coverage - Notice of Nonrenewal

Magyar v. Wisconsin Health Care Liability Ins. Plan, 2001 WI 41 (filed 3 May 2001)

The plaintiff sued various defendants as a result of her husband's death in 1990 while he was undergoing medical treatment. She later amended her complaint and named "NSM" (a health-care provider) as an additional defendant. NSM in turn filed a third-party complaint against "PICW," which had provided insurance coverage before 1990. PICW denied that it had any obligation to defend or indemnify NSM. The circuit court dismissed PICW from the lawsuit and the court of appeals affirmed.

The supreme court, in a decision written by Justice Bablitch, also affirmed. (Justice Sykes did not participate.) Without dispute, PICW failed to provide a separate notice of nonrenewal to NSM as required by Wis. Stat. section 631.36(4)(a). Yet, in this case, the statutory violation did not mean that PICW provided coverage. By providing proper notice, the insurer effectively eliminates the policyholder's right to renewal. In the event no such notice is provided, as here, the statute's remedy is to provide "an additional period of time equivalent to the expiring term." In this case, the additional period would have extended from Jan. 1, 1989 to Oct. 1, 1989. The alleged malpractice occurred, however, after this period. In short, "PICW's failure to give notice pursuant to § 631.36(4)(a) did not result in any remedy that provided coverage to NSM in this case" (¶ 13).

A second issue involved the remedy, if any, for PICW's failure to notify the commissioner of insurance of NSM's policy termination. The court rejected NSM's contention that the remedy should be that coverage remain in effect until PICW provided such notice. First, this argument conflicted with the statute. Second, the Legislature had already defined the punishment, namely, the procedures and penalties available to the commissioner under Wis. Stat. section 601.64.

Motor Vehicle Law

Implied Consent - Informing the Accused - Hearing Impaired Drivers

State v. Piddington, 2001 WI 24 (filed 22 March 2001)

This case involved a driver who was arrested for OWI and who is profoundly deaf. The litigation focused on whether the police complied with the implied consent law in their efforts to communicate implied consent obligations to the arrested driver. The events of this case occurred in 1998, at which time the law required the police officer to "orally inform" arrested drivers of their implied consent obligations.

At its core, this case implicates how persons are given the implied consent warnings, that is, the methods used to convey those warnings. In a majority decision authored by Justice Crooks, the court began its analysis by observing that the implied consent warnings are designed to inform drivers of the rights and penalties applicable to them. The court concluded that whether law enforcement officers have complied with the statute turns on "whether they have used reasonable methods which would reasonably convey [implied consent] warnings and rights" to the arrestee (¶ 22). This approach focuses on the objective conduct of the officer, rather than upon the comprehension of the accused driver (¶ 21). It factors into the mix the circumstances facing the arresting officer (¶ 23). It ensures that the driver cannot subsequently raise a defense of "subjective confusion," that is, "whether the implied consent warnings were sufficiently administered must not depend upon the perception of the accused driver" (¶ 21).

That a law enforcement officer must use reasonable methods to convey the implied consent warnings does not mean the officer must take extraordinary or impracticable measures to convey the necessary information. Reasonableness under the circumstances also requires consideration of the fact that alcohol dissipates from the blood over time, particularly after the subject has stopped drinking.

In footnote, the court provided examples of methods that might reasonably inform arrestees about the implied consent law when those arrestees are hearing impaired or do not speak English. Such reasonable methods could include videos that show the warnings in sign language. Similarly, translations (either by card or video) could be prepared in languages other than English that law enforcement officers encounter, such as Spanish and Hmong.

Chief Justice Abrahamson and Justice Sykes filed separate concurrences.

Municipal Law

Zoning - Notice of Proposed Zoning Amendments and Hearings Thereon

Oliveira v. City of Milwaukee, 2001 WI 27 (filed 3 April 2001)

At issue in this case was the Milwaukee Common Council's enactment of two zoning amendments that had been initially referred to the council's zoning committee for a hearing. That hearing was properly noticed under Wis. Stat. section 62.23(7)(d)2. This statute requires what is known as a "class 2 notice under Wis. Stat. ch. 985." This type of notice requires two insertions of a legal notice to be published in a newspaper likely to give notice in the area or to the person affected.

Because the zoning committee did not act on the proposed zoning amendments, the common council president introduced duplicate zoning amendments and referred them to a different committee. The city did not give "class 2" notice before the latter committee held a hearing (though it did mail notices to a large number of persons in the vicinity of the property in question).

The question before the supreme court was whether the notices of hearing on the proposed zoning amendments before the zoning committee were sufficient under the statute and due process guarantees to enable the common council to enact duplicate zoning amendments that had been referred to a different committee for a hearing without additional "class 2" notices.

In a majority decision authored by Chief Justice Abrahamson, the supreme court concluded that the common council did not violate the statute cited above or constitutional guarantees when it failed to give the additional "class 2" notices relating to the duplicate zoning amendments. The statute and due process were satisfied by publishing notices for a committee hearing on the original zoning amendments.

Justice Prosser filed a dissenting opinion.

Torts

Statute of Limitations - Misdiagnosis - Date of Injury

Paul v. Skemp, 2001 WI 42 (filed 3 May 2001)

Jennifer Paul, age 19, died when a blood vessel ruptured in her brain. Her parents and her estate sued various defendants, including the doctors who allegedly misdiagnosed Jennifer's complaints about headaches as a sinus problem. The circuit court dismissed the complaint on the ground that it had been filed after the statute of limitations had run. The court of appeals affirmed, and agreed that the statute started running at the time of the last alleged misdiagnosis.

The supreme court, in a decision written by Justice Crooks, reversed and held that the "Pauls' claim for medical malpractice did not, and could not, accrue until Jennifer suffered an injury" (¶ 2). And using the date of Jennifer's actual injury (the burst blood vessel) as the starting point, the action was timely filed. The crux of the appeal concerned whether the date of the negligent omission (the misdiagnosis) or the date of the injury triggered the running of Wis. Stat. section 893.55(1). The Legislature plainly rejected a "negligence-based rule of accrual" (¶ 19). In this case, the alleged negligence and the resulting injury did not occur concurrently. The misdiagnoses did not cause Jennifer's headaches or the later rupture of the blood vessel in her brain. Persuaded by a leading Virginia case, the court quoted the following rule: "In every misdiagnosis case, the patient has some type of medical problem at the time the physician is consulted. But the injury upon which the cause of action is based is not the original detrimental condition; it is the injury which later occurs because of the misdiagnosis and failure to treat" (¶ 21).

The Wisconsin Supreme Court also reviewed, explained, and limited several Wisconsin decisions that apparently conflict with the date of injury rule. Erroneous parts of several cases were "withdrawn." The court also spelled out the policy reasons that supported the injury rule, particularly the desire to avoid forcing patients to obtain second and third opinions or risk losing a claim for negligent misdiagnosis.

Finally, the supreme court noted "that in medical malpractice matters, a tension between the injury rule and the discovery rule of accrual arises in those cases where there is a lengthy delay between the negligent act or omission and the resulting injury" (¶ 48). The discovery rule of accrual in section 893.55(1)(b) carries a five-year limitation that runs from the date of the act or omission. The injury rule, set forth in section 893.55(1)(a), does not. "The plain language of Wis. Stat. § 893.55(1) does not indicate whether the five-year statute of repose in § 893.55(1)(b) applies to actions governed by the injury rule of accrual in § 893.55(1)(a)." Although this action was filed within five years of the alleged negligent omissions, the court urged the Legislature to address the potential conflict in the statute's language (¶ 49).

Worker's Compensation

Traveling Employees - Reduction of Award Because Injury Resulted From Intoxication

Heritage Mutual Insurance Co. v. Larsen, 2001 WI 30 (filed 4 April 2001)

Larsen worked in various capacities for Larsen Laboratories Inc., a metals testing and analysis business owned by him and his wife. One of his functions within the business was sales. On a cold winter day in 1996, Larsen traveled from the company's home office in Milwaukee County to his northern Wisconsin mobile home in Tigerton, which doubled as a sales office, intending to make a sales call the following day. Once in the Tigerton area, he stopped at a tavern and consumed several drinks after he had taken two diet pills. He later passed out trying to enter the mobile home, spent the night exposed to frigid temperatures, and suffered frostbite. The frostbite resulted in the amputation of the fingers and thumb of both hands.

In this worker's compensation action, the Labor and Industry Review Commission (LIRC) concluded that Larsen's purpose in going to his mobile home was business-related and that he was a traveling employee pursuant to Wis. Stat. section 102.03(1)(f). It further determined that he was injured while performing acts reasonably necessary for living or incidental thereto, and that he was not engaged in a deviation for a private or a personal purpose at the time of the injury. LIRC found that Larsen was simply attempting to enter his domicile for the night, an act reasonably necessary for living, at the time he was injured.

In reaching this conclusion, LIRC applied the "positional risk doctrine." This doctrine is a body of law that is used to determine whether an accident causing injury arose out of employment under the statute cited above. Under this doctrine an injury is compensable if the injury would not have happened except that the employment put the claimant in the position where he was injured, that is, the employment put the employee in a zone of special danger. In this case the zone of special danger was the extremely cold weather and it was by reason of employment activity (sheltering himself for the night while a traveling employee) that Larsen was exposed to this special danger.

LIRC inferred from the evidence that Larsen was intoxicated and that his intoxication was a substantial factor in causing the frostbite "because it was probable that he remained asleep for such an extended period of time due in part to his intoxication." Therefore, the LIRC reduced the worker's compensation award by the statutory amount of 15 percent. See Wis. Stat. § 102.58.

The circuit court affirmed the LIRC's decision to award worker's compensation benefits but reversed the decision regarding the 15 percent reduction of compensation. The court of appeals affirmed the circuit court.

In a majority decision authored by Chief Justice Abrahamson, the supreme court affirmed in part and reversed in part. Using a great weight deference standard of review, the court upheld LIRC's determination that Larsen was entitled to coverage under the traveling employee statute as being within the range of reasonableness, although it recognized that this was a close case. The court further concluded that there was credible and substantial evidence in the record to support LIRC's determination that the injury resulted from intoxication and that the 15 percent statutory award reduction applied in this case.

Justice Crooks filed an opinion concurring in part and dissenting in part that was joined by Justices Wilcox and Sykes.