Commercial Litigation Articles

We live in Wisconsin or Minnesota, where we share a joke: we have six months of winter and six months of construction. Both can present opportunities for falls that are best prevented.

Avoiding lawsuits, whether it is your home or business, means taking care of your property. "It’s very important for business," said Brian Weber, a Johns, Flaherty & Collins attorney.

"Keep your sidewalks, driveways and parking areas clear of ice and snow. Stay on top of building maintenance issues to make sure water is not draining on sidewalks or another area where the water can freeze," he said.

If you hire someone to clear these areas, Weber said it is important to have a written contract indicating the worker is an independent contractor and not an employee. The document should also hold the company harmless if sued because of a weather-related fall.

Clauses also should indicate when and where snow removal should be done—such as before the time your business would open and the minimum depth of snow when the plowing should begin.

Other needs for businesses include making sure your insurance covers risks your company may have should a slip and fall occur.

Beyond winter conditions, it is important to maintain a safe place for your employees and customers. That means repairing uneven steps or flooring. Posting a sign—giving notice—warning about these conditions may minimize liability, but not prevent it.

"Posting a sign puts people on notice to take extra caution," Weber said. "A business would be less likely to have responsibility for injuries if the sign is put up, but slip and fall lawsuits can be expensive to defend even if you don’t ultimately have financial liability."

While businesses are held to a higher standard than homeowners, someone falling on a sidewalk in front of your house could also result in a lawsuit. Homeowners would be wise to follow the same guidelines as businesses.

Tips to avoid slip and falls

While it may be unclear who caused a dangerous condition, it is important to be alert to the danger and to have it promptly repaired or removed to ensure a safe environment—because whatever, whoever the cause, the property owner could be held liable.

A business further needs to have company-wide awareness about the importance of maintaining the property—not just those whose job it is to clean or keep it in good repair.

What should you do?

• Clean up intermittent spills as soon as they occur and encourage others to be on the lookout for them.
• Remove snow and ice from doorways, sidewalks and parking areas.
• Eliminate clutter, particularly if it obstructs views.
• Tape or tack down mats, rugs and carpets, and make sure there are no carpet wrinkles or electrical cords or other items that could cause someone to trip.
• Always close cabinets or storage drawers.
• Keep work areas and walkways well lit.

For more information on slip and fall accidents, contact Brian Weber at 608-784-5678.

by Brent P. Smith, Attorney, Johns, Flaherty & Collins
(Wisconsin Business Law — Arbitration and Mediation)

When businesses enter contractual agreements, it’s usually because there’s an initial meeting of the minds, suggesting the relationship will be mutually beneficial. But the fact that thousands of business-related lawsuits are filed each year is evidence that such relationships can and do derail — tying up valuable time and resources in litigation.

Today’s court system is encumbered by high costs, long delays, aggravation and loss of privacy. Courts have recognized these impediments and many, including western Wisconsin’s, have concluded that alternative dispute resolution (ADR) is a more attractive option to be exhausted before working through the courts. Considered cost-effective, fast, flexible and fair, ADR is the most popular method for resolving disputes in this region.

A popular form of ADR for businesses is arbitration. Frequently, businesses will choose to include arbitration clauses in contracts, ensuring disputes will be resolved quickly and cost effectively. The clause requires that in the event of a dispute the parties would select an arbitrator to hear both sides of the issue and determine a binding resolution. Courts can and do enforce arbitration decisions.

Mediation is another form of ADR that also may save time and money. Much like arbitration, a mediator is chosen to hear both sides of the issue. Unlike arbitration, a mediator will try to facilitate or negotiate between the parties to help them reach their own resolution. The mediator has no power to make decisions.

Wisconsin law mandates courts to consider or order ADR in every case filed in the state. Since mediation is less cumbersome and less expensive, judges will order it most of the time. Mediation is frequently effective because in the majority of cases, parties have engaged in little discussion of settlement prior to the case being filed. In fact, mediation is successful the majority of the time on the first day. In other cases, it has set the stage for people to begin thinking about resolution and will often lead to resolution within a month of the initial session.

Because mediation is less expensive, courts rarely order arbitration. Mediation is just a matter of the parties getting together in an office. Arbitration typically requires more time because it’s similar to a mini-trial, with witnesses, research and written arguments. Nevertheless, it may be a better option for businesses looking for protection contractually because it prevents lawsuits from being filed, assures an unbiased party will hear both sides before issuing a binding decision, and provides a fast and inexpensive resolution when compared with the courts.

Handling costs of the arbitration is usually agreed upon in advance. Costs of mediation are usually split, with each party handling his or her own attorney’s fees.

Parties in an arbitration case will benefit from having their own legal representation. In addition to preparing arguments and interviewing witnesses, lawyers can be key in selecting an arbitrator — or a mediator in the case of mediation. They will be familiar with the people who do arbitration and mediation in the region and can help identify someone experienced in the area of law relevant to your dispute, whether it be employment, environmental, personal injury, family law or another area.

Alternative dispute resolution is a valuable tool to bring about another meeting of the minds should your business relationships take an unexpected turn. With government regulations, taxes, employment and other issues demanding attention, businesses today face many distractions from their core business. ADR offers a quick, cost-effective method to keep such distractions — at least those arising from lawsuits — to a minimum.

Reprinted with permission from the River Valley Business Report, Winter 2002.

by Michael L. Stoker, Attorney, Johns, Flaherty & Collins

Most consumers at one time or another have opened their mail to learn they are a member of a class-action lawsuit. Oftentimes the packets are bulky with several pages of legal language outlining the case and their rights. Intimidated by all the paper, many people simply throw the packets away. However by doing so, they may be discarding the opportunity for both justice and compensation.

Understanding how class-action lawsuits work can make the process less intimidating and the case for participating in them more powerful.

A class action is a lawsuit in which one or more plaintiffs pursue claims on behalf of a much larger group against one or more defendants for some type of common injury or offense. Many that make headlines are consumer cases, but they can also involve anti-trust claims, securities, fraud, employment discrimination or environmental claims.

Class-action lawsuits serve justice in two primary ways. First, they allow ordinary citizens to pursue small claims they otherwise might not be able to afford against very large and wealthy organizations. Second, they provide a system for punishing wrongdoers, thereby deterring that harmful conduct by both the defendant and others in the future.

Your first step when you receive notice that you may be a member of a class-action, is to determine whether you’ve been properly identified as being part of the class. For example, if you receive a notice involving Verizon and you have never used Verizon, it’s a mistake.

Second, check to see what your obligations are to continue as a member of the class.

Your notice will indicate whether it’s an opt-out or opt-in situation; most will be opt-out. Generally, you should opt out only if you have a large individual claim that you believe would be beneficial to pursue on your own. For example, if you suffered major, permanent injuries from using Vioxx, the value of your claim may far exceed what you would be entitled to as a member of a class. On the other hand, if you have a $200 claim against Microsoft in an antitrust lawsuit, it makes more sense to remain part of the class because your legal costs to pursue action on your own would exceed $200. Moreover, you would still have the burden of proving the company is guilty of antitrust activity.

Third, satisfy any required "proof obligations" described in the notice. This is often the point where class members abandon the process, but it is a necessary step to assure fairness both to the defendant and to all the plaintiffs.

Finally, return the proof of claim to the address indicated before the deadline specified in the notice.

If you participate in a class-action lawsuit, you do not need to hire your own attorney. Attorneys who represent the lead plaintiffs have an obligation to each and every member of the class. These attorneys typically are paid out of the damages recovered in the case, with fee awards subject to court review and approval.

It’s important to note that if you do remain a member of the class, you are bound by the settlement or judgment in the action. This means that if the "class" agrees to settle for a certain amount of money, or a judge awards a certain amount of money, you have no right to appeal it in court. You must accept what has been accepted on your behalf by the class.

When determining whether to participate in a class-action lawsuit, it helps to consider public along with personal interest. You may find that participating results personally in only a few dollars for you, but when you consider that you may be helping society and the public by participating in a legal process that rights wrongs, the overall benefits can be much greater.

Reprinted with permission from Holmen Courier and Onalaska Community Life, August 17, 2007.

If I see an accident, I want to stop and help. My husband says not to because we might get sued. Isn't there such a thing as a Good Samaritan Law that protects me?

Your instincts to be a Good Samaritan are correct, according to Johns, Flaherty & Collins attorney Joe Veenstra. "Wisconsin has a law that says anyone who gives emergency care at the scene of an accident in good faith is immune from lawsuit."

Wisconsin first passed a Good Samaritan law in 1963 that applied to health care workers. It was extended to the lay public in 1977 and has been unchanged since then.

However, the Wisconsin Supreme Court ruled in May 2006 that this protection applies only until the care of the individual can be turned over to medical professionals.

The case on which justices based that decision involved an ATV accident resulting in injuries to a young woman passenger and her boyfriend/ATV driver. Instead of providing care just until she could be evaluated by a professional, the boyfriend's mother monitored the woman in her home for six or seven hours. It was only at the end of that time, when the mother realized the woman was confused and disoriented, that she summoned professional help.

The woman, who suffered permanent injuries, sued the caregiver who had monitored her for those seven hours. The defendant claimed immunity under the Good Samaritan law, but the court said non-emergency care, which is not protected, began after the initial evaluation and assistance.

"The purpose of the Good Samaritan Law is to overcome the public's reluctance to get involved in a situation and provide help when prompt care is needed," Veenstra said. "If you see an accident or see someone injured in a basketball game, you can stop and help without worrying about being sued."

For more information about the Good Samaritan law, contact Joe Veenstra at 608-784-5678.

by Brian G. Weber, Attorney, Johns, Flaherty & Collins, SC
(Wisconsin Business Law — Business Lawsuits)

Few business owners begin operations expecting to be sued, but statistics from the United States Department of Justice suggest it’s a reality many will face at some point. In Wisconsin alone, more than 300,000 civil lawsuits were filed in 2002, and nearly half of those named a business as defendant. That means on average a suit is filed against a business in Wisconsin every five minutes.

Business disputes are more complicated than many other types of legal actions. The issues involved can vary greatly — from personnel matters and contractual disagreements to product liability and environmental disputes. And, regardless of how you may feel upon being served a complaint, business lawsuits can come from parties that carry prospects for ongoing or future business. It’s difficult but important to detach yourself from becoming personally involved in the argument. Not only will that help you better maintain important relationships, but it can also help you maintain focus on your core business.

Obviously, the best way to accomplish this is to hire a trusted, capable attorney. If you don’t already have an attorney, look for someone experienced in business litigation and specifically in handling the sort of dispute in which you’re involved. Fellow business owners and other business advisors, such as accountants and financial consultants, can be great referral sources.

Upon receiving notice you’re being sued, gather all your documentation related to the dispute and make a list of people who would have information relevant to it. Then call your attorney to discuss your next steps and ensure a timely response to the complaint. If you carry insurance related to the claim, your attorney can also help you present the claim to your insurance company. This is an important step because how you present the claim can affect whether it’s covered.

You may be tempted to call the other party to discuss the matter. Don’t do it. If you’ve reached the point where they have filed a suit against you, it’s a good sign they’ve moved beyond trying to resolve it directly with you. More importantly, you could worsen matters by saying something that could be used against you later.

In reviewing your options, your attorney will likely discuss alternative dispute resolution (ADR), including arbitration and mediation. And frequently, judges will order it before hearing your case. ADR is worth your attention because it can dramatically reduce costs associated with defending the suit and the time required to resolve it. On average, jury cases take about 22 months to resolve and bench cases, where decisions are rendered by judges, take about 16 months. ADR is much quicker because it operates independently of the court’s calendar, with many cases resolving in about six months.

Mediation is the more common method and effectively resolves a high percentage of cases filed, many with just one meeting. With either method, a mediator or arbitrator (usually another attorney) is assigned to the case to hear both sides. A mediator will negotiate between the parties to help them reach their own resolution, whereas an arbitrator will hear both parties and determine a resolution. Arbitration can be binding and enforced by the courts.

If your case is heard in court and you’re dissatisfied with the outcome, your first impulse may be to appeal the case. Approach this decision carefully to avoid unnecessarily spending more time and money. In general, disagreeing with the judge’s decision about what the facts are is not a good reason to appeal. But if you believe the law has been misapplied, an appeal may be in order. If you wish to proceed with an appeal, consider the amount you’re obligated to pay as a result of your loss versus the expense involved with appealing. You may find it more satisfactory simply to pay the judgment.

Most business attorneys will tell you the majority of lawsuits they handle result from small problems that go untended. The best advice is to work aggressively to resolve business problems when they first come to your attention. It’s a lot cheaper, a lot faster and a lot easier than dealing with a lawsuit. And it’s a lot better for your long-term business relationships.

Reprinted with permission from the River Valley Business Report, Fall 2004.

by Joseph G. Veenstra, Attorney, Johns, Flaherty & Collins

Whether for a minor fender-bender, a bad check or dissatisfaction with a transaction, people seeking legal redress for issues involving $5,000 or less can find it in small claims court. But don’t expect Judge Judy. Small claims courts are far less dramatic and much more focused on the facts.

The small claims court process begins with the filing of a small claims summons and complaint with the clerk of courts. The filing fee is $85, and, depending on the county you are in, the clerk can often serve the defendant by mail for $2. You can also hire the sheriff’s office to serve the lawsuit upon the defendant for a variable fee.

If you win your case, the defendant may have to pay some of your costs, but it’s wise to consider the fees before filing a complaint. If you have a claim for $100, for example, it’s likely not worth the filing fee.

When you file a summons and complaint, the clerk will issue a "return date." That’s the date of your first appearance in the court. In most counties, if you do not appear that day, your matter will be dismissed. If the defendant resides in La Crosse County, is not on active military duty and does not appear, you will receive a default judgment. Defendants outside La Crosse County may file an answer with the court by that date as an alternative to appearing in person.

If both parties appear on the return date and no lawyers are involved or if you have a landlord-tenant dispute, you will be scheduled for mediation with a La Crosse County law clerk, which usually occurs right after the return date.

You should prepare for mediation by bringing any relevant documents with you. Photos, invoices and other documents can help persuade the mediator in your favor, as can a succinct explanation of all the facts and the law that supports your position. Many cases — between 80 and 90 percent — are resolved successfully in mediation.

If your matter is not resolved in mediation, you will be given a trial date. In that instance, the defendant must file an answer by a date specified by the court. Failure to do so will result in a default judgment.

Small claims trials are relatively informal hearings. You’ll have about 20 to 30 minutes to present your case. If you think you’ll need more, alert the court beforehand. During the hearing, the judge will hear sworn testimony and review evidence. If your witnesses will not come voluntarily, you will need to subpoena them in advance and pay each $16 plus mileage and any sheriff’s fees involved.

The judge often will rule orally once the evidence is concluded. If you win a judgment, the other party must complete a financial disclosure; their failure to do so could result in contempt of court and potential jail time until the disclosure is completed. Note that winning a judgment does not necessarily mean you’ll be paid. Some people just don’t have the money to pay, and some people file bankruptcy.

The usual route for collection is to garnish wages, but a stipulation for income withholding is often a better alternative. With such an agreement, the debtor’s employer will send you a set amount of money on payday until the judgment is paid in full. This accomplishes the same as garnishment but without the fees which can be high.

If you decide to use small claims court, there are instances where attorneys may be helpful. The first is before you file a complaint. A demand letter from an attorney can let the other party know you’re serious about resolution and motivate them to work things out before the matter escalates to court.

Additionally, attorneys can be helpful in explaining the laws that support your case and can recommend ways to present your argument. They can also argue on your behalf in the court room. Generally speaking, the use of an attorney in small claims court is not cost effective if your case involves less than $1,000.

The good news is that mediators and judges in small claims courts are not looking for sophisticated legal arguments. They are accustomed to working with people from a variety of backgrounds and just need the facts of your case to try to reach a fair judgment.

For more information about small claims court in Wisconsin, see the consumer guide at http://www.wicourts.gov/about/pubs/circuit/docs/smallclaims.pdf .
Reprinted with permission from Holmen Courier and Onalaska Community Life, November 2, 2007.

by Terence R. Collins, Attorney, Johns, Flaherty & Collins, SC
(Wisconsin Tort Lawyer — Pros and Cons of Tort Reform)

As President Bush begins his second term, he’s making much ado about tort reform, leading many local business leaders and medical practitioners to wonder if changes in litigation are on the way.

Various studies conclude that the tort system is a tremendous drain on the economy and is clogging up our courts. Various other studies indicate there is no ‘tort crisis’. President Bush adopts the view that there is a tort crisis and has suggested proposals to address the problem as he sees it.

His proposal includes two broad categories for reform, including award limits in medical malpractice lawsuits and federalization of class-action lawsuits. The former represents an effort to curb healthcare costs and the latter to bring uniformity and restrictions to class-action lawsuits. In addition to decreasing the costs of doing business, the president believes the mere threat of lawsuits inhibits entrepreneurial activity.

While both measures are perceived as good news for business owners worried about liability costs, limitations on medical malpractice lawsuits will change little in Wisconsin because the state in recent years has already enacted its own laws imposing limits. The president’s proposals would create federal laws that track with some that we already have here.

Tort limitations in Wisconsin include

• $350,000 in non-medical lawsuits for loss of society and companionship in the event someone dies;
• $413,000 in medical lawsuits for noneconomic damages, such as pain and suffering or loss of enjoyment of life;
• Broad immunity for government employees, and in the rare case where immunity does not apply, damages are limited to $50,000 for actions against government employees that do not involve motor vehicles and $250,000 for those that do.
• Broad immunity for landowners for claims by people who are injured on their property while engaged in recreational activities.

Other professions are not protected by damage caps, as are healthcare providers.

Typically, claims against other professionals do not have a large non-economic component and therefore limits have not been deemed necessary.

The law also holds no limits for general kinds of accidents, such as slipping and falling, occurring on business’ property. But many attorneys refuse to take these cases because it’s very difficult to get an award for such accidents.

Federalizing class-action lawsuits, on the other hand, may hold changes for Wisconsin businesses. Most class-action suits are handled as class actions because no one individual plaintiff has a claim big enough to take on a large company; the aggregation of many smaller claims makes it more feasible.

While details of the proposed law are unknown at this time, most expect it will vest exclusive jurisdiction in the federal courts and prevent state court filings. It would not be surprising if the law also includes restrictions on when class-action suits may be filed.

Although such legislation would make it more difficult for businesses to be sued on a class-action basis, it could also prevent local businesses from participating as a plaintiff in a class-action lawsuit.

Both medical malpractice and class-action tort reform are on the agenda for the 109th Congress, and both face significant opposition from lawmakers and consumer watchdogs. Opponents want to be sure the interests of business are balanced with the interests of individuals.

Reprinted with permission from the River Valley Business Report, Spring 2005.