Wisconsin Business and Commercial Litigation

Those of you who believe golfing is the idle pasttime of the decadent rich, gather ’round.  In Gennrich v. Grand Geneva LLC , a golfer leaned back against a wooden fence that bordered a tee box at the Grand Geneva golf course in Walworth County.  You can see it coming, can’t you?  The fence gave way, and he fell, injuring himself, and later suing Grand Geneva (and its insurer) claiming that it violated the safe place statute and was negligent.

On summary judgment, Grand Geneva argued that because the safe place limitation should fail, the negligence claim must also be dismissed:

The circuit court granted Grand Geneva’s motion for summary judgment on the common law negligence claim by relying on the following statements in our opinion in Megal, 267 Wis. 2d 800, ¶25: “A negligence claim cannot be maintained when a safe place violation cannot be established. Since we have upheld the dismissal of the safe place violation claim, we also uphold the dismissal of the negligence claim.” (Citation omitted.) It further reasoned that Grand Geneva had to have had actual or constructive knowledge under both the safe place statute and common law negligence, and since it concluded Gennrich had not proven notice under the safe place statute, his common law negligence claim must fail.

Because the safe place statute imposes a higher standard than common law, the court of appeals disagreed:

there is no reason why, if an employee or frequenter has not proved that the employer or owner violated the higher standard of care in WIS. STAT. § 101.11(1) that it necessarily follows that the employee or frequenter cannot prove that the employer or owner violated the lower standard of common-law negligence by committing a negligent act.

Moreover, it held that the safe place statute claim could also proceed.  My question is, who leans that hard on one of those split rail fences anyway?

golf sign photo courtesy Brian O’Donovan’s flickr gallery via this creative commons license.

My favorite chamber of commerce, the Muskego Area Chamber of Commerce, located in my hometown of Muskego, has invited me to speak to the members about how to work with a lawyer.  There will be two sessions, the first on Monday, September 13, at 5:30 p.m., and the second on Tuesday, September 14, at 8 a.m.

I’m going to talk about three tips that will help a client (that is, you) work with a lawyer more efficiently and more effectively.  The discussion will last about an hour, but the three keys will help save money and contribute to a more successful relationship with your lawyer.

If you’re interested in attending, you can register here.  Hope to see you there.

Congratulations to my partner Randy Arnold and, less modestly, to me.  We just got the court of appeal’s decision in Smith v. Weigelt, et. al, from the District 1 Court of Appeals.  We were retained to defend a surgeon accused of malpractice when a sponge was left in a patient after emergency surgery.  Randy and I tried this Milwaukee County case one and a half times. 

The first trial ended (early) in mistrial and the court ordered our client to pay costs and fees to the plaintiff’s counsel.  The court found that a question and answer during the direct examination of the defendant violated a pre-trial order in limine preventing any testimony that the doctors had saved the plaintiff’s life.  The court ordered the case re-tried.  After the second trial, in which the jury found that our surgeon client had not been negligent (yeah, you read that right), we appealed the mistrial and costs order.  The court of appeals agreed with us, and overturned the trial court’s mistrial order and order to pay costs.

Today’s decision is fact-specific, doesn’t break any new legal ground, and likely won’t be published.  The court analyzes the specific question asked on direct examination in light of the pre-trial order in limine.  But it sure is nice to have some vindication of a defense strategy and related trial action.  If you read it, I hope you enjoy it – I know I did.

Employers, take heart.  There’s a new case that give guidance on how to escape the glaring scrutiny cast on your non-competition/solicit agreements by Wis. Stat. s. 103.465.  In The Selmer Co. v. Rinn, the Wisconsin Court of Appeals upheld a Brown County trial court decision that concluded the non-compete at issue did not fall within the reach of the statute., but rather was to be examined under the “rule of reason.”  How was this possible?

The court began by citing Reiman Associates, Inc. v. R/A Advertising, Inc., 102 Wis. 2d 305, 306 N.W.2d 292 (Ct. App. 1981), for the proposition that not all non-compete agreements are governed by the statute.  Specifically, it drew parallels with the facts of the Rinn case:

Rinn was, of course, an employee at the time he contracted for the right to purchase corporate stock, and Selmer’s motivation for the offer–made explicit on the first page of the agreement–was to “promote [Selmer's] growth and development by providing increased incentives for key employees .” However, unlike typical restrictive covenants, upon which a prospective employee’s position may depend, there were no consequences attached to Rinn’s refusal to accept the agreement. The circuit court found Rinn was not pressured to sign the stock option agreement, nor was his employment conditioned upon his doing so. Indeed, the circuit court found Rinn’s refusal would not have affected his employment in any way.

Accordingly, Selmer held no bargaining advantage over Rinn. Rinn was free to walk away from the transaction; instead, he seized the opportunity to purchase an ownership interest in Selmer’s parent company. In exchange for Selmer’s promise to make discount stock available, Rinn forfeited his ability to tap Selmer customers for one year following his employment.⁽⁸⁾ Although Rinn has received the benefit of that bargain–he exercised the stock option and more than quadrupled his initial investment–he now seeks to evade the consequences of that choice by invoking WIS. STAT. § 103.465’s protections. This case falls closer to the bargained-for exchange in Reiman than it does to the employment cases cited above.

The court appeared most convinced by the idea that while there was an incentive provided to Rinn to sign the non-compete (discount stock prices), there were no consequences if he did not sign the agreement.  The court followed up with a common-law reasonableness analysis:

Having determined WIS. STAT. § 103.465 does not apply, we must determine whether the covenant not to compete satisfies the common law’s rule of reason. In determining reasonableness, we examine whether the covenant is:  “(1) reasonably necessary for the protection of the beneficiary;” (2) reasonable between the parties, “particularly as to the party restrained, considering time, space, purpose, and scope; and (3) not specially injurious to the public.” Reiman, 102 Wis. 2d at 309. Whether a covenant is reasonable is a matter of law to be determined from the writing. My Laundry Co. v. Schmeling, 129 Wis. 597, 613, 109 N.W. 540 (1906).

The elements are materially identical to the Wis. Stat. 103.465 analysis, but the scrutiny is much lower.  Consider this when the next non-compete discussion arises.

chains photo courtesy [sic]’s flickr gallery via this license