wisconsin civil trial journal - mallery & zimmerman€¦ · summer 2017 • volume 15 •...
TRANSCRIPT
Summer 2017 • Volume 15 • Number 2
Wisconsin Civil Trial Journal
WisconsinDefense Counsel
Defending Individuals And Businesses In Civil Litigation
Also In This IssuePresident’s Message: Join the Ocean Club! Laura M. Lyons
Trial Practice Series Opening Statements: A Preview of Coming Attractions Emile H. Banks, Jr. & William R. Wick
The Stimac Decision: Cutting Corners on the Four-Corners Rule Jeff Leavell
Summer in Wisconsin: A Recreational Immunity Update Samuel M. Mitchell
Digital Forensics and Civil Litigation John C. Mitby & Peyton Engel
Making a Difference—One Suit at a Time Amy F. Scholl
Beware the Landmines: Ethical Considerations in Defending Employment Cases
Aaron J. Graf & Jonathan E. Sacks
Emile H. Banks, Jr. Emile Banks & Associates, LLC
Peyton Engel Hurley, Burish & Stanton, S.C.
Aaron J. Graf Mallery & Zimmerman, S.C.
Jeff Leavell Jeffrey Leavell, S.C.
Laura M. Lyons Wisconsin Defense Counsel
John C. Mitby Hurley, Burish & Stanton, S.C.
Samuel M. Mitchell Coyne, Schultz, Becker & Bauer, S.C.
Jonathan E. Sacks Mallery & Zimmerman, S.C.
Amy F. Scholl Coyne, Schultz, Becker & Bauer, S.C.
William R. Wick Nash, Spindler, Grimstad &
McCracken LLP
Editor
Andrew Hebl Boardman & Clark LLP
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OFFICERS
PRESIDENTLaura Lyons
Bell, Moore & Richter, [email protected]
PRESIDENT ELECTFred Strampe
Borgelt, Powell, Peterson & Frauen, [email protected]
SECRETARY/TREASURERAriella Schreiber
Rural Mutual [email protected]
IMMEDIATE PAST PRESIDENTJeff Leavell
Jeffrey Leavell, [email protected]
PROGRAM CHAIRChristine Rice
Simpson & Deardorff, [email protected]
DIRECTORS
Nicole BacherCross, Jenks, Mercer & [email protected]
Christopher Bandt Nash, Spindler, Grimstad & McCracken, [email protected]
Frank DohertyHale, Skemp, Hanson, Skemp & [email protected]
Randall [email protected]
Patrick HeaneyThrasher, Pelish, Franti & Heaney, [email protected]
Andrew Hebl Boardman & Clark [email protected]
Sandra HupferSECURA Insurance [email protected]
Josh JohanningmeierGodfrey & Kahn, S.C. [email protected]
Gina MeierbachtolCorneille Law Group, [email protected]
Travis RhoadesCrivello Carlson, [email protected]
Amy SchollCoyne, Schultz, Becker & Bauer, [email protected]
Monte Weiss Weiss Law Offices, [email protected]
Amicus Curiae Committee Chair Monte Weiss
Weiss Law Offices, S.C. [email protected]
Cyber Law and Technology Committee Chair: Travis Rhoades Crivello Carlson, S.C.
Vice Chair: Randall Guse Acuity
Employment Law Committee Chair Chair: Nicole Marklein Bacher Cross, Jenks, Mercer & Maffei
Vice Chair: Rebeca Lopez Godfrey & Kahn, S.C.
Insurance Law Committee Chair: Monte Weiss
Weiss Law Offices, S.C. [email protected]
Vice Chair: Christine Rice Simpson & Deardorff, S.C. [email protected]
Legislative Committee Chair Jeff Leavell
Jeffrey Leavell, S.C. [email protected]
Website Committee Chair Christopher Bandt
Nash, Spindler, Grimstad & McCracken, LLP
Wisconsin Civil Jury Instructions Committee Chair Christopher Bandt
Nash, Spindler, Grimstad & McCracken, LLP
Women in the Law Committee Chair: Laura Lyons
Bell, Moore & Richter, S.C. [email protected]
Vice Chair: Heather Nelson Everson, Whitney, Everson &
Brehm, S.C. [email protected]
Young Lawyer Committee Chair Danielle Rousset
Jeffrey Leavell, S.C. [email protected]
DRI Representative Michael Happe
Weld, Riley, Prenn & Ricci, S.C. [email protected]
Executive Director Jane Svinicki, CAE
Account Coordinator Kelli Dyszelski
Legislative Advisors Bob Fassbender
Hamilton Consulting Group [email protected]
Rebecca Hogan Hamilton Consulting Group
Columnists
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In This Issue…
Journal PolicyWDC Members and other readers are encouraged to submit articles for possible publication in the Civil Trial Journal, particularly articles of use to defense trial attorneys. No compensation is made for articles published and all articles may be subjected to editing.
Statements or expression of opinions in this publication are those of the authors and not necessarily those of the WDC or Editor. Letters to the Editor are encouraged and should be sent to the WDC office at 6737 W. Washington St., Suite 4210, Milwaukee, WI 53214. The Editor reserves the right to publish and edit all such letters received and to reply to them.
WisconsinDefense Counsel
Defending Individuals And Businesses In Civil Litigation
President’s Message: Join the Ocean Club! by: Laura M. Lyons, President, Wisconsin Defense Counsel ...........................................4
Beware the Landmines: Ethical Considerations in Defending Employment Cases by: Aaron J. Graf & Jonathan E. Sacks, Mallery & Zimmerman, S.C. ...........................9
Trial Practice Series Opening Statements: A Preview of Coming Attractions by: Emile H. Banks, Jr., Emile Banks & Associates, LLC & William R. Wick, Nash, Spindler, Grimstad & McCracken LLP ....................................21
The Stimac Decision: Cutting Corners on the Four-Corners Rule by: Jeff Leavell, Jeffrey Leavell, S.C ..............................................................................31
Summer in Wisconsin: A Recreational Immunity Update by: Samuel M. Mitchell, Coyne, Schultz, Becker & Bauer, S.C......................................43
Digital Forensics and Civil Litigation by: John C. Mitby & Peyton Engel, Hurley, Burish & Stanton, S.C. .............................51
Making a Difference—One Suit at a Time by: Amy F. Scholl, Coyne, Schultz, Becker & Bauer, S.C. ..............................................56
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President’s Message: Join the Ocean Club!by: Laura M. Lyons, President, Wisconsin Defense Counsel
Ten years ago, if you had indicated to me that I would have joined the Board of the Wisconsin Defense Counsel and become its President, I would have laughed. I also would have told you that I was underqualified and too young. Perhaps I was right, but we are all still here! All of it reminds me of a little group called the Ocean Club.
During several summers in college, I worked as a youth development coordinator at a chapter of the Boys and Girls Club. I worked with lots of kids of varying ages and backgrounds. One child in particular sticks out: I will call him Tommy.1
Though he was endearing and engaging, Tommy was too young to be in our program. We initially denied him membership, but soon it became clear that he needed a safe place to go in the summer and a place to harness his drive (by way of example, he one day walked to the club wearing only one shoe for about 8 blocks). Given the above, and as the age written on his membership form met our guidelines, he was allowed to join.
We were definitely the better for it. Tommy was an impish, positive character who was always up to something. One day Tommy started the Ocean Club: He and a few friends would gather in a corner of the facility and draw sea life pictures and celebrate all things ocean-related. Tommy invited everyone to join, including all of the staff.
The Ocean Club fell off my radar until mid-summer. One day, the early arrivals trickled in, mostly wearing swimsuits and carrying towels. Suddenly we had a critical mass of kids wearing swim gear.
None of the Boys and Girls Club staff knew what was afoot until one of the parents asked for an Ocean Club field trip form. Over 30+ Ocean Club members were dressed and ready for an adventure.
Ultimately, the Ocean Club was appeased by the promise of an authorized waterpark field trip later in the summer. They found an alternate activity that day in lieu of the unauthorized field trip. What struck me the most was that Tommy, the newest and youngest and member of our group, had managed to accomplish so much.
At times my term on this Board has felt like my very own attempt at an Ocean Club. I was the new kid, I found a niche, and together we have been on some metaphorical (and authorized!) field trips.
I distinctly remember the first WDC seminar I attended. A colleague talked me into attending the spring seminar at the American Club in March 2008. To say that I was intimidated is an understatement. It did not help that I knew only about five people in the whole room. I was not sure that I would attend another seminar. I did not feel like I fit in and did not feel like there was a place for me.
Less than 10 years later, a lot has changed. My involvement in this group started with small steps and it led to something bigger. At the urging of a colleague, I wrote an article for the Journal. Then I joined the Board, was selected to serve as the Program Chair and entered the leadership track. I have represented our group at national meetings and at the state legislature. I also now know many of you (definitely more than 5 of you!).
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This is the beauty of the WDC: there truly is a spot for everyone and their talents. To that end, I hope that all of you will continue to contribute to this group and take advantage of all that the WDC has to offer. In order to help you do that, I need to explain what our Board and Executive Board have been doing and where we intend to head.
You are likely aware of the many benefits of being a WDC member: the Wisconsin Civil Trial Journal, the expert list serve, the advance e-sheet, panel counsel meeting opportunities, legislative updates, CLEs, networking opportunities, and so on.
You may also have noted some changes in WDC over the past year or two. As a result of our long-range planning, our Board has reinstituted our committee structures, set aside a reserve fund to help ensure the financial viability of this group, revamped our website, and worked on broadening our appeal beyond insurance defense.
In addition, we are working on creating new activities and opportunities that will benefit you and your practice. To that end, we recently held our first ever Women in the Law Clothing Drive (see Amy Scholl’s feature in this issue for more information!), we are working on a joint activity with the Wisconsin Association for Justice, the Young Lawyers group has held several lunchtime CLEs focused on topics pertinent to new lawyers (such as how to please corporate clients), and we are exploring the idea of incorporating webcast CLEs.
One of our Board’s goals for 2017 is to expand our social networking outreach, primarily through Facebook and Twitter. At the latest Regional meeting in May 2017, we networked with other states on this issue and have begun brainstorming what will work for our state. We hope to implement some of our ideas later this year.
Our Executive Board has additional responsibilities of which you may not be aware. First, the Executive Board receives updates from Hamilton Consulting on lobbying efforts every two weeks during active legislative sessions. These meetings are helpful
in terms of us keeping the pulse of the legislature and identifying areas where we may want to play offense or defense.
As you know from my last column and the interim updates, the current legislative session included two budget proposals that would affect the area of worker’s compensation: 1) the elimination of court reporters; and 2) the elimination of the LIRC. At the time that I am writing this, these issues have progressed favorably, but the budget is still not yet final.2
In addition, our Executive Board is directly connected with national and regional defense organizations, as well as the Defense Research Institute (DRI). WDC sponsors two Executive Board members to attend the DRI Annual Meeting each year, as well as the Northcentral Regional Meeting. In addition, DRI sponsors at least one Executive Board member and our Executive Director to attend the State and Local Defense Organization (SLDO) leadership meeting every year in January.
These three annual opportunities allow WDC’s leadership the opportunity to network and brainstorm with leaders from other states. Our leaders who attend these events will now be providing brief written reports to our Board to outline what they have gleaned from those meetings. A useful example of the value of those meetings is from the Annual Meeting in 2016: As a result of what we learned there, our Executive Board re-worked our sponsorship and exhibitor opportunities, which ultimately has helped in correcting WDC’s budget deficit.
The information above is a sampling of what our Board has implemented and the endeavors of our Executive Board. We have a solid foundation for the future. A strong Executive Board is in place, all of whom are familiar with and support WDC’s long-range planning goals.
My personal goals for my term as WDC President were to expand WDC’s services to its members and increase member involvement. We have made
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some progress on both of these goals, but there is much work to be done. This is where your increased engagement is essential.
In order to thrive, the WDC Board needs your help. We need you to get involved by writing for the Journal, speaking at a seminar, or joining our committees.
To properly serve your interests, we need more input from you. We know you have opinions and preferences: please share them. We circulate surveys after our seminars and we generally receive only 5-10 surveys responses: a return rate of around 1%-2%. Certainly, we need more feedback than that! I implore you to respond to us when we send the surveys out.
We would also like you to reach out to the new attorneys in your firm, or perhaps the more experienced attorneys who are not yet members, and encourage them to join our ranks. In addition, please consider asking your firm to sponsor an event, and perhaps even host a young lawyers event to help our young lawyers grow and learn.
Somewhere out there is a new member who will be someday be on the leadership path for this group. We should be providing that new member with the best chance for success to help us grow together into the future. We generally have openings on the Board every year. If you wish to submit a name for consideration for a board position, please email me.
As always, if you have comments or questions about WDC, please do not hesitate to contact me or our President-Elect, Fred Strampe, who will begin his term as President of the WDC in August 2017.
As I transition to “WDC retirement” in August, I will have one year left on the Board as its Past President. In addition to continuing to lead the Women in the Law Committee, I will be working on launching the WDC Membership Committee and the Worker’s Compensation Committee. If you have any interest in joining or leading either of those committees, I would welcome your help.
I cannot overstate the effect that this group has had in terms of my professional development, my personal development, and my friendships in our legal community. That said, I have never lost the feeling of being the new person at one of our seminars. In fact, it is that feeling that has driven me throughout my term on the Board and my presidency. Every eligible member should be welcomed into this group because of the varied talents and experiences that they have to offer. Each of our WDC members, regardless of how many months or years they have been practicing, adds meaning and depth to this organization. I am hopeful that as our group grows and develops we will continue to build stronger connections together.
It has been my honor and pleasure to serve on the Board of this group. I look forward to the new adventures that the future holds for us as an organization. And let’s keep an eye out for youngsters like Tommy….
Laura Lyons is the President of the Wisconsin Defense Counsel. She is a shareholder at Bell, Moore & Richter, S.C., located in Madison, Wisconsin. Laura has a statewide practice, representing and advising clients in a variety of areas, including civil litigation defense and worker’s compensation. She has also handled appellate matters, including appeals to the Labor and Industry Review Commission and the Wisconsin Court of Appeals. She is admitted to practice in Wisconsin and before both the Eastern and Western U.S. District Courts of Wisconsin.
Laura is a member of the Dane County Bar Association, the Wisconsin Association of Worker’s Compensation Attorneys (WAWCA), the Defense Research Institute (DRI), and the State Bar of Wisconsin. She is also a barrister in the James E. Doyle Inns of Court.
Laura and her husband live in Madison. She has been a Big Sister in Dane County’s Big Brothers Big Sisters program since March 2006. Laura also volunteers as a coach for the Millennium Soccer Club, which brings affordable and accessible
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organized youth soccer to Madison’s low-income, ethnically diverse neighborhoods. In her free time, she enjoys spending time with her family and friends, running, reading and playing soccer.
References1 Not his real name.2 In May 2017, the Joint Finance Committee voted to keep
four court reporting positions and to maintain the LIRC as it currently exists. A study is to be done on the viability of audio and video recordings and a survey will be done on LIRC decisions citing the statutes they interpreted and whether the decisions are appealed to circuit court.
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Beware the Landmines: Ethical Considerations in Defending Employment Casesby: Aaron J. Graf and Jonathan E. Sacks, Mallery &
Zimmerman, S.C.
I. Introduction
Counsel representing companies in defense of employment litigation claims can face unique challenges during the course of representation that require careful consideration to
avoid running afoul of ethical obligations. These considerations include who exactly the client is, whom counsel takes direction from, what communications are privileged, what happens when multiple related defendants are sued, and various other related issues—all of which can act as landmines for the unwary. In addition, if defense is undertaken on behalf of an insurer and insured under an Employment Practices Liability Insurance (EPLI) policy, this can add another layer of complexity to these issues.
This Article will examine five of the more common ethical issues that arise in employment litigation defense contexts and provide useful guidance for counsel who find themselves facing such dilemmas. Keeping the below issues at the forefront of all decisions can help counsel prevent more problematic ethical issues from arising.
II. Determining Who Is the Client
A. The Employer Entity Is the Client.
While it may seem like a self-evident question, in representing an employer, an attorney must still
ask the question: Who is the client? At all times, the corporate entity which has retained counsel to represent it is the sole client of defense counsel—not any individual and not any closely related entities. However, as a practical matter, the client consists of the representatives and employees of the company with whom the attorney will discuss the litigation on a daily basis. In fact, it is not uncommon for defense counsel to work with the same representative at a company over the course of many years and even develop a professional friendship with the individual. Nevertheless, the attorney must never lose sight of where his or her ethical duties lie.
Pursuant to the Wisconsin Rules of Professional Conduct for Attorneys, employment lawyers must remember that a lawyer “retained by an organization represents the organization acting through its duly authorized constituents.”1 An organizational client is a legal entity, but it cannot act except through its officers, directors, employees, shareholders, and other managers of the entity. Therefore, while confidentiality and other aspects of a traditional attorney-client relationship may extend beyond the corporate entity itself, the attorney cannot lose sight of the fact that the entity itself is the client.2 This means that the lawyer must act in the best interests of the company, even if it is not in the best interests of the individual representatives involved in the litigation. Correspondingly, the duties of competence,3 diligence,4 communication,5 and the like are owed to the company itself.
Because the attorney is dealing with the company’s representatives regularly in the representation,
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counsel needs to be aware that in dealing with these individuals, he or she needs to explain that the organization is the client whenever it becomes apparent that the organization’s interests may become adverse to the representative with whom the lawyer is dealing.6 If this situation should arise, the lawyer should advise the representative to obtain his or her own legal counsel.7 “Care must be taken to assure that the individual understands that, when there is such adversity of interest, the lawyer for the organization cannot provide legal representation for that constituent individual, and that discussions between the lawyer for the organization and the individual may not be privileged.”8
The potential for this divergence of interests is more likely to arise in employment litigation than in some other contexts, because many times the cause of action asserted against the employer involves actions taken by the employer’s representatives, and can even lead to personal liability for a supervisor as well. For example, several employment laws, such as the Fair Labor Standards Act (FLSA) and the Family Medical Leave Act (FMLA), provide for the possibility of both employer and supervisor liability.9 During the course of litigation, it may become apparent that the supervisor may have acted in such a way that would exonerate the employer itself from liability, but at the expense of the supervisor’s own personal liability. This would absolutely necessitate advising the supervisor that they should retain their own counsel, since the employer-organization is the actual client.
It is also important to remember that, during the course of a lengthy, drawn-out employment case, the representatives with whom counsel interacts regularly may change, perhaps more than once. In addition, the representatives from whom counsel takes take day-to-day direction at the beginning of the case may not only change, but the representative could become openly hostile or an adverse witness if their own employment with the entity is terminated. Thus, keeping at the forefront of every decision that the entity is always the client will help counsel to avoid getting caught in ethical traps.
B. Both the EPLI Insurer and the Company Are Clients.
The presence of EPLI insurance adds an additional layer of complexity to the question of who is the client. The majority of states, including Wisconsin, follow the “two-client theory,” which means that both the insured and the insurer are equally clients of counsel.10 A duty of care is owed to both the insured and the insurer.11 Within this tripartite relationship, issues concerning control of the litigation, confidentiality of communications, and other issues can arise, all of which are discussed more fully below.
III. Litigation Control and Direction
A. The Decision-Maker at the Company
Entities come in all shapes and sizes—corporations, LLCs, partnerships, and sole proprietorships—and each has its own management structure. While it may be a simple task to coordinate with the members or partners of a small organization, with regards to large corporations, it may be impossible to run to the board of directors or a similar control group any time a decision needs to be made about litigation. Therefore, some form of delegation or agency is necessary for the company to make day-to-day decisions in the defense of a case. Generally speaking, the control group directs the corporation’s affairs and business path, while day-to-day operations are left to corporate officers such as the president, CEO, or COO. Thus, it is important for the attorney to obtain clarification from the client at the outset of representation as to who internally will make litigation decisions, both minor and major.
Normally, a designated corporate officer will have the authority to make decisions, but what should defense counsel do if that individual is unavailable and decisions in the litigation have to be made? While defense counsel must abide by the client’s decisions concerning the objectives of the representation, he or she “may take such action on behalf of the client as is impliedly authorized to carry out the representation.”12 This means
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that—with the exception of a major decision, such as whether to settle the case—the lawyer can make minor decisions about the litigation without having to consult with a representative of the client, so long as that decision does not contradict or undermine the overall objectives or direction of the client. It is likely ideal to have multiple contacts with the decision-making authority to avoid such a situation, but, in the end, the lawyer should be able to ethically rely on his or her knowledge of the client’s objectives and direction to make minor decisions, where necessary, without first consulting the client.
B. EPLI Control and Direction
Another important issue is who controls the defense: the EPLI insurer or the insured employer? Typically, in tripartite insurance relationships, “the insurer has a duty to retain and pay for an attorney to represent the policyholder/insured when the insured is sued by a third party. As such, the insurer maintains the right to control the defense, the settlement of a claim, and the payment of a claim within policy limits.”13 While the specific policy at issue may alter the general rule, typically the insurer retains the right to control the defense, and counsel should default to this position unless the policy provides otherwise.
One issue that can arise and create ethical concerns for counsel is the existence of litigation management guidelines. EPLI insurers’ retention agreements with counsel usually allow the insurer to control costs through the use of these guidelines, which are rules and procedures for defense counsel to follow in managing the litigation.14 The guidelines will usually cover a wide array of tasks that an attorney may perform in providing a defense.15 EPLI carriers also routinely use internal or external auditors to review legal bills to ensure compliance with the litigation management guidelines, and this oversight can affect the attorney’s judgment as to how the litigation should be conducted.16 This can potentially be problematic if an attorney is dissuaded from pursuing a particular course of action, even if it is in his or her client’s best interests, because he
or she knows the insurer will not pay for it.17 This is especially true if many routine tasks require insurer pre-approval.18
In Wisconsin, litigation management guidelines can run afoul of ethical considerations. The Wisconsin Ethics Counsel has opined that, if litigation management guidelines restrict defense counsel’s budget in a way that is detrimental to the defense, then the attorney may be forced to withdraw from the representation.19 Wisconsin has specifically addressed this issue in Ethics Opinion E-99-1, which states that, while insurers may manage the defense of claims, not every limitation or restriction imposed by an insurer on the defense will be consistent with a lawyer’s duties under the Rules of Professional Conduct.20 Lawyers cannot accept restrictions or limitations on the defense of a claim that are so fundamentally or otherwise onerous that they would prevent lawyers from satisfying their ethical obligations21 to their clients or would interfere with their independent professional judgment on behalf of the insured client.22 A lawyer may not enter into or continue in a contract with the insurer that would be so restrictive.23 Each lawyer, however, must make an independent professional judgment about whether restrictions or limitations imposed by litigation management guidelines raise ethical concerns.24
Wisconsin’s position is consistent with ABA guidelines and the Restatement (Third) of the Law Governing Lawyers, and confirms the general consensus that a lawyer may abide by litigation management guidelines as long as those restrictions are reasonable and do not prevent the lawyer from providing competent and diligent representation to the insured.25 If the lawyer does not reasonably believe that he or she can competently represent the insured, the lawyer must inform the insured and insurer and seek to have the restrictions altered or removed, or otherwise withdraw.26
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IV. Privileged Communications
A. Communications with Employees and Former Employees
Under Wisconsin law, a corporation, association, or other organization or entity that is rendered professional legal services by a lawyer is entitled to the protections of the attorney-client privilege.27 Wisconsin follows the “entity rule,” and accordingly, the attorney-client privilege belongs to the corporate entity.28 A corporate client, however, can only act through its officers, directors, employees, shareholders, and other constituents.29 Thus, confidential communications made by corporate employees for the purpose of facilitating the rendition of professional legal services to the corporation are privileged.30 In Upjohn v. United States, the United States Supreme Court specifically held that, when a corporation’s managers require its employees to give information to its attorneys in the course of providing legal advice, those communications are privileged.31 The court justified this protection on the grounds that lawyers need to be able to communicate freely with corporate employees in order to carry out the obligations of their representation.32 The privilege generally extends to any employee regardless of position as long as the communication is made to the attorney at the direction of corporate superiors, the information concerns matters within the scope of the employee’s corporate duties, and the employee is aware that the communication serves the purpose of enabling the attorney to provide the corporation with legal advice.33
Communications with former employees may also be protected, though only if the communications relate to the employee’s conduct and knowledge obtained during employment and are limited to facts of current litigation.34 At the same time, the consensus view is that the attorney-client privilege continues to protect privileged communications which occur during the period of employment even after the employment relationship ends.35
Defense counsel should also keep in mind the ethical rules governing opposing counsel’s contact
with represented parties. Specifically, SCR 20:4.2 prohibits a lawyer representing a client adverse to the organization from contacting employees who direct, supervise, or regularly consult with the entity’s lawyer concerning the litigation, who have the authority to obligate the organization with respect the litigation, or whose act or omission in connection with the litigation may be imputed to the organization.36 However, all other employees (generally low level employees without any management role) can be contacted by opposing counsel without the consent of the organization or its attorney.37 More importantly, consent is not required for opposing counsel to contact former employees of the organization, regardless of their former position with the company.38
Finally, as a practical consideration, many companies incorrectly believe that labelling emails, letters, and other documents as “Attorney-Client Communication” or “Subject to Attorney Work Product” protects such documents from disclosure. Labels, however, have no legal meaning and documents must still satisfy all of the elements necessary to establish privilege.39 Likewise, simply copying an attorney on emails, letters, or other documents does not automatically make those communications privileged.40 Generally speaking, unless the attorney is either receiving information in order to provide legal advice or is actually providing legal advice, the communication may not be considered privileged. It is important for the attorney to remind those individuals directing the litigation about the scope and limits of the attorney-client privilege to avoid situations where individuals write things they would not otherwise write mistakenly believing that they are privileged communications.
B. Communications with the EPLI Insurer
Whether a tripartite communication is protected from disclosure to a third party generally turns on whether the insurer had the right and is exercising control over the defense of the underlying litigation.41 In Wisconsin, given the above-stated general rule that the insurer controls the litigation, the insurer and the insured are both considered clients of the
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lawyer, and tripartite communications are generally protected by the attorney-client privilege.42 Of course, just like in other circumstances, counsel must still be careful to ensure that such communications remain privileged and that neither client acts to waive such privilege. This can potentially be difficult in the employment context as it is not unusual for a corporate entity to want to share information internally amongst numerous individuals. Thus, for example, if the president of the company attends a meeting with the insurer and counsel, those communications are undoubtedly privileged. However, when the president discloses the content of that communication to the director of human resources, who then in turn discloses the communication to a third-party vendor who oversees the company’s payroll, there is a risk of losing the privilege attached to the communication. Accordingly, regular reminders to client contacts at both the insurer and the organization about privilege and its boundaries are important.
Additionally, issues can arise regarding the confidentiality of information exchanged between the insurer and the insured. In the tripartite relationship, communication between the attorney, the insured, and the insurer should generally be free flowing as counsel is obligated ethically, and likely contractually, to keep both clients informed as to all material developments.43 However, an attorney in this situation may face a dilemma if he or she learns information from either the insured or the insurer which may be of material benefit to the other.44 For example, if the attorney becomes aware through contacts with the organization that its employees engaged in intentional discrimination, an “intentional acts” exclusion under the EPLI policy could be implicated.45 In such a situation, the attorney may be limited, if not outright prevented, from revealing this confidential information to the insurer,46 even though the attorney also has an ethical obligation to keep the insurer reasonably informed47 about the status of the case.48 The ABA has warned attorneys facing this dilemma that they may be forced to withdraw from one or both of the representations.49
V. Multiple Defendants
Another issue that often rears its head in the employment context is that of multiple defendants. It is not uncommon for more than one entity or individual to be named as a defendant, either because of potential liability on the part of both the company and a supervisor or because of a parent-subsidiary relationship, a temporary employee-joint employer scenario, or the like. Such situations can cause additional ethical concerns for defense counsel.
As discussed above, several laws, including the FLSA and FMLA, provide for the potential of personal liability for a supervisor. In the event both the entity and an individual supervisor are sued, defense counsel should be careful to fully analyze the issues, consider the current and future potential for conflicts between the interests of the entity and the supervisor, determine whether the company must—or is willing to—indemnify the supervisor, and evaluate whether the attorney can ethically represent both in the litigation. The primary rule governing such a situation is SCR 20:1.7, which provides that a lawyer shall not represent a client if it would involve a concurrent conflict of interest such as being “directly adverse to another client,” or “there is a significant risk that the representation of one or more clients will be materially limited by” the representation of another client.
If necessary, separate counsel should be retained by the supervisor individually, even if the employer takes the laboring oar of the defense. Of course, if defense counsel cannot also represent the supervisor, problems can arise regarding privileged communications and the defense of the case. Defense counsel should always be mindful of the fact that the supervisor is a separate party to the litigation, is not the client, and any potential communications are likely not privileged. In the event of multiple defendant litigation, whether in the company-supervisor context or the parent-subsidiary context, counsel may wish to consider entering into a joint defense agreement with the other defendant. This can be useful in aiding the exchange of information
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without necessarily compromising privilege or running afoul of other ethical issues.
When there is a complex web of closely related defendants, it can sometimes be easy for counsel to become too comfortable and complacent and not carefully analyze which communications are privileged or who is, and who is not, the client. In these multiple defendant situations, it is more important than ever to constantly be thinking about who the client is, what types of communications are privileged, and other similar issues, in order to avoid the landmines inherent in such situations.
VI. Settlement Considerations
Employment claims are unique in that it seems there is a higher percentage of frivolous claims, as there is often little disincentive for employees to file administrative claims after termination to try and “make a quick buck.” In Wisconsin, at least presently, there are no cost-shifting provisions or other measures to act as disincentives to plaintiffs.50 Further complicating matters is that, once a questionable claim has been filed, it can often take dozens, if not hundreds, of hours for the employer and counsel to obtain dismissal of the claim through the dual state and federal administrative systems that have been set up. Thus, whether or when to settle can become an important consideration that also implicates various ethical issues.
Under counsel’s duty of communication and candor with the client—the corporate entity—it is important to lay out from the beginning of the case the potential course of the case, the likely time until a decision, the estimated defense costs, and the exposure and liability for the client if unsuccessful in the defense. Only after undertaking such a conversation and ensuring that the client is fully informed of the issues can the client, or its designee, make a reasoned, informed decision about what course of action is best for the company itself.
Counsel should be cognizant of the fact that sometimes the interests of the company representatives that they deal with regularly and the
interests of the company itself do not align in this regard. For example, simply because the individual whom counsel regularly deals with wants to settle to get rid of the annoyance of the lawsuit does not mean the settlement best serves the company’s overall interests. Thus, while not necessarily mandated by the ethical rules, it is a best practice to ensure that any settlement offer received from the opposition ends up before the actual control group of the entity. Whether, when, and for how much to settle are issues that are simply too important in most cases to handle any other way. For obvious reasons, counsel never wants the control group to be finding out for the first time at the end of a case that cost $250,000 to defend and resulted in damages and attorneys’ fees of $750,000 that it could have been settled for $25,000 before litigation began. It is therefore best to keep the control group informed early and often regarding settlement developments in order to avoid any unpleasant surprises.
In addition, EPLI coverage can further complicate matters. Typically, an EPLI policy will provide that the insurer controls the decision as to whether and when to settle a claim. On occasion, however, the insured retains the right to essentially veto a settlement decision under a “consent to settle” provision. However, these types of provisions are the exception, not the norm. In any event, defense counsel may be caught in the middle of a tension-filled debate. Sometimes, the insured desires to settle quickly to avoid the annoyance of the litigation or embarrassing allegations, while the insurer desires to litigate the case because there are defenses available. On the other hand, sometimes the insurer desires to settle quickly and efficiently to avoid defense costs and exposure on a claim, while the insured desires to fight the claim to avoid setting a precedent for other employees, or because they are emotionally invested in the situation. It is not uncommon for one side or the other to try and recruit defense counsel to their side to try and convince all individuals involved that a particular course of action is the “right” one.
Given the tripartite relationship and the fact that both the insurer and the insured are the client, an
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irreconcilable conflict between the insurer and insured regarding settlement could force counsel to withdraw from representation. As a matter of practice, if counsel provides the insurer and insured with all of the information needed to fairly and accurately evaluate the case and the risks and benefits of settlement, almost always an agreement can be reached.
VII. Conclusion
Defense counsel in employment cases often face rather difficult ethical issues due to a variety of circumstances. Whether it is the complexity of the company counsel is defending, the competing interests of the company’s representatives and the company itself, or the existence of an EPLI carrier, it is important for counsel to constantly be critically analyzing the situation with the above considerations in mind in order to avoid the numerous landmines which might be encountered. Doing so will aid counsel in complying with ethical obligations and will stop counsel from triggering events which could lead to even more substantial ethical crises.
Aaron Graf is a litigator in the Milwaukee, Wisconsin office of Mallery & Zimmerman, S.C. He focuses his practice on labor and employment law and municipal law. He routinely defends employers and municipalities in litigation throughout Wisconsin and also proactively advises them on ways to avoid liability. Aaron was selected for inclusion as a Wisconsin Rising Star in 2014-2016 by Super Lawyers. He received his J.D. from Marquette University Law School in 2008 and his B.S. from Concordia University Wisconsin in 2004.
Jonathan Sacks is an attorney in the Milwaukee office of Mallery & Zimmerman, S.C., where he focuses his practice on civil litigation related to commercial disputes, municipal law, employment and labor matters, and school law issues. Jonathan helps advise his clients by drawing from his diverse experiences, including time practicing in the greater Philadelphia area and clerking for a civil trial judge in New Jersey. His current practice involves representing businesses, municipalities, and school districts in all litigation matters and counseling them
on ways to avoid litigation. Jonathan received his J.D. from Rutgers School of Law-Camden in 2013 and his B.A. from Lawrence University in 2010.
References1 SCR 20:1.13(a).2 See American Bar Association, Model Rules of Prof’l
Conduct, R. 1.13 cmt. [2] (“When one of the constituents of an organizational client communicates with the organization’s lawyer in that person’s organizational capacity, the communication is protected by Rule 1.6.”); Jesse by Reinecke v. Danforth, 169 Wis. 2d 229, 240, 485 N.W.2d 63 (1992) (holding that a lawyer does not automatically represent the constituents of the organization when he or she represents the corporate entity).
3 SCR 20:1.1.4 SCR 20:1.3.5 SCR 20:1.4.6 See SCR 20:1.13(f).7 Model Rules of Prof’l Conduct, R. 1.13 cmt. [10].8 Id.; see also Model Rules of Prof’l Conduct, R. 1.13 cmt.
[11] (“Whether such a warning should be given by the lawyer for the organization to any constituent individual may turn on the facts of each case.”).
9 See Riordan v. Kempers, 831 F.2d 690, 694 (7th Cir. 1987); 29 C.F.R. § 825.104(d).
10 See Amber Czarnecki, Ethical Considerations Within the Tripartite Relationship of Insurance Law—Who Is the Real Client?, 74 Def. Couns. J. 172, 174 (2007) (“The Two-Client Theory is currently the majority view of the tripartite relationship among American courts.”); Roeske v. Deifenbach, 67 Wis. 2d 313, 226 N.W.2d 666 (1975) (recognizing that the attorney represented both the insured and the insurer).
11 Czarnecki, Ethical Considerations, supra note 10, at 174.12 SCR 20:1.2(a).13 Bosco v. Labor & Indus. Review Comm’n, 2004 WI 77, ¶
14 n.8, 272 Wis. 2d 586, 681 N.W.2d 157.14 Kimberly W. Geisler and Josh S. Thompson, Employment
Litigation in the Age of EPLI: The Defense Perspective (American Bar Association 2009), available at http://apps.americanbar.org/labor/errcomm/mw/Papers/2009/data/papers/017.pdf.
15 Czarnecki, Ethical Considerations, supra note 10, at 182.16 Amy S. Moats, A Bermuda Triangle in the Tripartite
Relationship: Ethical Dilemmas Raised by Insurers’ Billing and Litigation Management Guidelines, 105 W. Va. L. Rev. 525, 533 (2003).
17 Id.18 See, e.g., Czarnecki, Ethical Considerations, supra note 10, at
182 (“Among those tasks requiring the insurer’s pre-approval are: (1) hiring an expert; (2) hiring an investigator; (3) taking depositions; (4) videotaping depositions; (5) filing motions; (6) undertaking discovery; (7) expenditures for travel; (8) computerized legal research; and (9) determining how many attorneys may attend depositions, hearings, and trials.”).
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19 Timothy J. Peirce, Wisconsin Defense Counsel Seminar Outline, Some Questions About the Ethics of Insurance Defense in Wisconsin, available at http://www.wdc-online.org/application/files/5714/8027/4513/Pierce_Anderson_Part 1.pdf (last visited May 20, 2017).
20 Id. (citing Wisconsin Ethics Opinion E-99-1).21 See SCR 20:1.1; SCR 20:1.3; SCR 20:1.4; SCR 20:1.7.22 See SCR 20:2.1.23 See SCR 20:1.8(f)(2); SCR 20:5.4; SCR 20:1.16(a)(1).24 Pierce, Some Questions, supra note 19.25 Id.26 Id. 27 Wis. Stat. § 905.03(1)(a).28 Lane v. Sharp Packaging Sys., Inc., 2002 WI 28, ¶ 33, 251
Wis. 2d 68, 640 N.W.2d 788.29 Id.30 See Herget v. Nw. Mut. Life Ins. Co., 169 Wis. 2d 466, 487
N.W.2d 660 (Ct. App. 1992); Upjohn Co. v. U.S., 449 U.S. 383, 394, 397 (1981).
31 Patrick J. Fiedler and Tyler K. Wilkinson, Protecting the Attorney-Client Privilege for Corporate Clients, Wis. Civil Trial J., Vol.11, No. 2, at 6 (Wisconsin Defense Counsel Summer 2013), available at http://www.wdc-online.org/index.php/wdc-journal/wdc-journal-archive/summer-2013/protecting-the-attorney-client-privilege-for-corporate-clients#_edn27 (citing Upjohn Co., 449 U.S. at 396).
32 Id.33 Jackie K. Unger, Maintaining the Privilege: A Refresher
on Important Aspects of the Attorney-Client Privilege (American Bar Association 2013), available at http://www.americanbar.org/publications/blt/2013/10/01_unger.html.
34 Id.35 Id.36 Wisconsin Ethics Opinion E-07-01: Contact with Current
and Former Constituents of a Represented Organization, available at http://www.wisbar.org/newspublications/wisconsinlawyer/pages/ar t ic le .aspx?Volume=8-0&Issue=6&ArticleID=1238.
37 Id.38 Id.39 John T. Bergin and Kelley J. Halliburton, Demystifying
the Attorney-Client Privilege (Law 360 March 23, 2016), available at https://www.law360.com/medical-malpractice/articles/775320/demystifying-the-attorney-client-privilege.
40 Id.41 See Richard C. Giller, Confidentiality and Privilege in
the Insurer-Policyholder-Defense Counsel Relationship (American Bar Association 2012), available at http://apps.americanbar.org/litigation/committees/insurance/art-icles/marapr2012-confidentiality-privilege.html.
42 Id.43 Geisler & Thompson, Employment Litigation, supra note
14; SCR 20:1.4.44 Id.45 Id.46 SCR 20:1.6.47 SCR 20:1.4(a)(3).48 Geisler & Thompson, Employment Litigation, supra note
14.49 Id. (citing ABA Comm. on Ethics and Prof’l Responsibility,
Formal Op. 08-450, at 5) (“In the event the lawyer is prohibited from revealing the information, and withholding the information from the other client would cause the lawyer to violate Rule 1.4(b), the lawyer must withdraw from representing the other client under Rule 1.16(a)(1).”).
50 However, in the 2017 proposed state budget, Governor Scott Walker has included legislation which would adopt some of the cost-shifting provisions applicable in state civil cases in the employment law context. It is unclear at this time whether such legislation will survive the budget process.
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Note on the “Trial Practice Series”: This is the second in a series of articles dealing with trial practice, the brainchild of Bill Wick at the Nash Law Firm, a co-author of this article, and continues the effort to have an
article on some aspect of trial and litigation practice in each issue. The intention is to provide a practical view of common aspects of the litigation and trial process. WDC members are invited to contact Bill or Andrew Hebl, the Journal Editor ([email protected]), to suggest future topics that may be of interest.
I. Introduction
The authors of this Article have participated in more than 300 jury trials, and the purpose of this Article is to share their views and techniques that may be useful in presenting opening statements in civil cases. One might consider an opening statement to be similar to a preview of coming attractions one sees at a movie. An opening statement is a preview of the evidence that will be presented during a trial. It is designed to tell jurors what the case is about and to capture their attention. This may be done in many ways. Lawyers have varying styles for delivery and differing views on the effect of opening statements.
An opening statement provides counsel with the first opportunity to tell the jury what the case is
about, what evidence will be presented, and who the witnesses will be. Counsel may also present the theme or theory of the case to the jury in an opening statement. Many trial lawyers believe the case may turn on what is said in an opening statement because people place the greatest emphasis on the initial information they receive about a person or event. Studies have shown a majority of jurors make up their mind about the case during the opening statements and do not change their opinion during trial.1 Despite these studies, the experience of the authors has led them to conclude that most jurors still listen to the evidence and make their final decision based on all of the facts and the court’s instructions. Nevertheless, an opening statement is a crucial tool that can be utilized by counsel to provide the jurors with guidance about what will be important in making their ultimate decision.
II. Purpose
An opening statement has a narrow purpose and scope. The purpose of an opening statement is to provide an outline of what counsel expects to prove to enable the jury to better understand the evidence that is presented.2 The jury should be told what evidence will be presented in order to make it easier to understand and process the ensuing evidence and how it relates to the issues in the case. The opening statement should advise the jury of the questions of fact they must decide and what evidence will be significant in making their decision.
The purposes of an opening statement include presenting the jury with a clear picture of the case, creating interest in the facts, and building
Trial Practice Series Opening Statements: A Preview of Coming Attractionsby: Emile H. Banks, Jr., Emile Banks & Associates, LLC and William R. Wick, Nash, Spindler, Grimstad & McCracken LLP
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rapport. The opening statement gives counsel an opportunity to advise the jurors that there are two sides to the issue, and to request that they withhold their decision making until all the evidence has been presented and the court’s instructions have been given.
III. Regulation
There are no statutory provisions addressing the procedure to be followed when giving opening statements, other than that they must be transcribed by the court reporter pursuant to Wis. Stat. § 757.55 and SCR 71.01. Case law discussing issues that may arise related to opening statements is sparse. This is likely due to the fact that opening statements are not at the heart of the controversy. Thus, any error related to an opening statement is likely to be overshadowed by the evidence presented and the jury’s verdict, rather than what occurred at the beginning of the trial.
Opening statements are given in every trial and the procedure is weaved into the fabric of trial practice. While some legal commentators have discussed a party’s right to waive an opening statement, the authors have never seen this done and do not envision a reason for this to occur.
With the opportunity for full pretrial discovery and the demise of trial by ambush, most opening statements will be given by counsel at the beginning of the case. However, there is also some commentary about deferring opening statements, which represents a strategic choice that may be effectively employed in the appropriate case. The most effective use of this strategy is during a multi-week jury trial with multiple defendants. One or more defendants present their opening statements at the conventional time—at the beginning of the case immediately after the plaintiff—providing the jury with the defense’s theory of the case, while one or more of the other defendants present opening statements after the plaintiff rests. After having the benefit of hearing the plaintiff’s evidence, the deferring defense attorney or attorneys now have the tremendous benefit of re-engaging the jury to the defense’s theory of the case.
It is generally accepted that the trial court has discretion to limit the time allotted for opening statements as part of the court’s general authority to determine the mode of trial. With the proliferation of legal television shows, in which a case is often tried to verdict well within an hour, a concise, well organized presentation of expected evidence is golden and usually well-received by the jury and the court. If counsel are given time limitations by the court, it can be helpful to request that the court provide a five minute expiration warning in order to allow for an appropriate wrap-up.
There is no specific provision dealing with sequestration of witnesses during opening statements. However, the court is required to exclude witnesses, except parties and persons shown by a party to be essential to the presentation of the party’s case, from the courtroom when requested by counsel.3 The purpose of the statute is to exclude witnesses so they cannot hear testimony, but it is silent about witnesses hearing opening statements. That said, it seems to be within the trial court’s discretion to exclude nonparty witnesses during opening statements if a motion to do so is made.
IV. Content
An opening statement should inform the jury what counsel believes actually happened based on the investigation and the evidence that will be presented. The opening statement needs to tell the story in a simple manner that focuses on the key facts, rather than on extraneous details. An opening statement should mention points of contention to help the jury focus on the issues. Presenting the case to the jury in plain and simple language and identifying the general nature of the dispute should be the primary focus of an opening statement.
In presenting the opening statement, counsel may characterize it as the first opportunity to “speak with” the jury about what evidence will be introduced. Counsel should attempt to personalize their client and, if appropriate, point out that the case is about the actions of a person and not those of an insurance company or corporation.
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Since one of the purposes of an opening statement is to tell the jury what the evidence will show, many lawyers think that frequently making statements such as “we believe the evidence will show” and “we will prove” emphasizes this purpose of the opening statement. Counsel may believe that by using these phrases, it is less likely there will be a claim that counsel is arguing. However, statements such as, “Mr. Smith will tell you” or “when Dr. Jones examined the plaintiff and found” have the same effect while sounding less legalistic.
An effective technique in an opening statement is to present a theme for the case. Examples of themes may be scientific fact rather than anecdote, observation, or conjecture; verifiable proof as opposed to subjective views and speculation; and written records rather than memory. Jurors may be told that the case is based on what is reported shortly after the event rather than weeks or months later, or that the view of what happened changed over time. An example of a theme for a slip and fall accident on ice could be “winter in Wisconsin,” while the theme for a low velocity impact auto accident may be “science v. myth” or “causation v. association.”
It is undisputed that opening statements are not evidence.4 It is believed by some that emphasizing that the opening statement is not evidence may detract from the significance of the presentation. An alternative approach may be to state that the opening statement is not evidence, but that the evidence is the testimony and documents received into evidence by the court, which in turn will reflect the facts described. An accurate forecast of the evidence that will be presented is the best persuasive process.
Defense counsel should also look for ways to distinguish their proof from that of the plaintiff. The disparity in qualifications between experts and the facts showing which party had the best opportunity to make accurate observations should be emphasized. Showing inconsistent statements in comparison to the accurate accounts of what transpired can also be used to support the theme of the case.
The presentation may be divided as follows:
• Introductory remarks; • Introducing the parties and witnesses; • Identifying the major issues; • Telling the story/summarizing the facts; • The conclusion; and• Requesting a favorable finding.
At the start, most attorneys introduce themselves and their clients and explain the order of trial. Counsel may explain the procedural order of trial—e.g., that the plaintiff goes first and it is only after the plaintiff is done with his or her case-in-chief that the defense is allowed to call witnesses. Some counsel explain the basis for knowing what will be proved by advising the jury that there are discovery procedures requiring the pretrial exchange of information. The analogy that a trial is similar to putting together a jigsaw puzzle may be used. The cover of a jigsaw puzzle box shows what the finished puzzle should look like. A puzzle piece is comparable to a piece of evidence. When the trial ends, the pieces of evidence should come together and enable the jury to reach a verdict, just as the pieces of the puzzle are connected in order to complete and mirror the picture on the box.
It should be noted that, at the end of the trial, the jurors may—and opposing counsel often will—compare the evidence presented to what was promised in the opening statements. One needs to be aware that opposing counsel is likely to point out in final argument how the evidence differed from what counsel represented during opening argument. Because jurors may compare the representations made in the opening statement to the evidence actually presented, counsel should resist overstating the case. This is critical; making inaccurate predictions during opening statements about the evidence that will be presented at trial—i.e., making “promises” that the evidence will demonstrate one thing where it ultimately does not, and counsel therefore fails to “deliver” on the “promise”—is a big mistake. For this reason, counsel must try to be accurate about how the evidence will come in during
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opening statements in order to maintain credibility with the jury during the trial. Stated otherwise, if counsel does not “deliver” on the “promises” made during opening statements about what the evidence will show, the jury is less likely to believe anything else that counsel has said during trial, including counsel’s closing argument.
Every case, particularly from the defense perspective, has inherent weaknesses. The majority of trial lawyers and psychologists who have examined the approach to litigation strongly suggest that weaknesses in a case should be disclosed in the opening statement. The purpose is to present the law in the case in as positive a manner as possible and to reduce the negative impact of the opponent’s emphasis. It is also to show the jury that counsel is being honest and forthright about the merits.5 In dealing with weaknesses in the case, counsel may need to admit that their client was impaired by drugs or alcohol, but must point out that the impairment did not cause or contribute to the outcome. In the alternative, counsel may acknowledge that the plaintiff sustained an injury, but point out the nature and extent of that injury and the fact that the permanent residuals are disputed, and then explain how the evidence will support this view.
Some attorneys might think avoiding mention of weaknesses is worthwhile because opposing counsel may overlook the weaknesses or not point them out to the fullest extent. This violates the rule that one should never underestimate opposing counsel. Others may believe that mentioning the weaknesses may draw unnecessary attention to them. However, the fact is that jurors are likely to figure out the weaknesses in the case anyway and, if they were not mentioned during counsel’s opening statement, question why they were not addressed. If the jurors question why counsel failed to mention the negative evidence, counsel’s credibility might be affected adversely.
Another concern is how far counsel can go in explaining the law. Opening statements usually provide some explanation of the applicable burden of proof, the standard of care by which the issues are judged, and the duty owed by one party to the
other. If one seeks to go beyond these basic tenets of the law, it is suggested that the judge and opposing counsel be advised of it beforehand so that, if there is going to be an objection, it is not dealt with in front of the jury.
The use of demonstrative evidence in opening statements may be an issue. Demonstrative evidence includes simulations, photographs, charts, graphs, models, flip charts, and overhead projections. In this day of the Internet, social media, and smart phones, increasing emphasis is placed on video presentations. Frequently, PowerPoint presentations are used during an opening statement to outline the proof that will be offered. Whether demonstrative evidence such as pictures, summaries, or PowerPoint presentations may be used during opening statements is within the sound discretion of the court. There is little guidance in the case law with regard to the use of demonstrative evidence and visual aids during opening statements. In James v. Heintz,6 the court stated that the use of diagrams, charts, and graphs in opening statements is a matter of discretion for the trial court. It was error, however, when the only reason given by the court for refusing to permit pictures of an accident during the opening statement was because the pictures were not marked as exhibits.7
The recommended approach when demonstrative evidence is sought to be used in an opening statement is to obtain permission from the court or a stipulation from the opposing party. If a simulation or diagrams require a significant evidentiary foundation before admissibility can be determined, objection should be made to their use until the foundation for admissibility is established. Having said that, the adage may simply be to take the position that “the eye can see what the ear can hear”—i.e., if the content of the demonstrative evidence is such that it would be permissible for counsel to use words to describe that content during the opening statement, the demonstrative item itself also ought to be permissible to show to the jury.
In complex cases where terms will be used that are not in the daily vernacular of most jurors, a glossary of terms may be prepared and used in opening. This
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may be helpful in understanding technical jargon that later will be part of the testimony.
In preparing the opening statement, counsel should give consideration to the concepts of primary, repetition, and multiple-sense involvement. The most important things should be presented first. There should be repetition throughout the presentation. Repeating things helps to emphasize their significance. The information heard last is what may be remembered the most by jurors. In addition, involving multiple senses should be considered and may prove to be invaluable. The phrase “a picture is worth a thousand words” should not be overlooked.
V. Statement Not Argument
It is universally accepted that an opening statement may not consist of argument. Counsel should not ask the jury to resolve conflicts in the evidence, tell them how to apply the law to the facts, or state a personal opinion. However, an opening statement should still be persuasive. In essence, the opening statement is the “GPS” that counsel wants the jury to use to find its way through the evidence.
The point at which statements about proof become argument is likely to be a question of semantics. When a statement of fact turns to argument is often a matter of how it is phrased. If the assertion is about something that will be proved, it is not argument. If counsel makes a statement that is not susceptible to proof, it is argument. If the representation is about something a witness can state from the witness stand, it is not argument.
Examples may help to illustrate the difference. If the proof will be that a driver was traveling 80 miles an hour, it would be argumentative to characterize it as an “excessive and unreasonable speed.” Stating that the driver was texting just before the accident is fact, while describing the driver’s action as “not paying attention and unacceptably dangerous” may be argument. If counsel asks the jury to decide a fact in a certain way, draws an inference from the fact or voices an interpretation of the facts, this is
argument. If counsel suggests that a witness is good, truthful, or worthy of belief, it is likely to be deemed argument. Negative statements about the opposing party or the witnesses are considered argument. Statements making characterizations, such as “the hired gun for the insurance company” or the “lazy inattentive driver,” are likely to be considered argumentative. Contending that counsel’s purpose is simply to get the defendant “off the hook” or to “save the insurance company money” is also clearly improper.
VI. Objections
If a party believes in advance that potentially inadmissible evidence may be used in an opening statement, a motion in limine is of course the best way to raise the issue. This may not always be possible, and objections during opposing counsel’s opening statement may be necessary. The most common objection to an opening statement is that counsel is arguing. Whether an objection should be raised during opposing counsel’s opening statement is a matter of trial strategy and involves discretion. Counsel may be reluctant to object during an opening statement, and in many cases should be. As discussed in the previous section, the definition of “argument” in the context of an opening statement is not always clear. When counsel steps over the line is not always predictable or certain. Lawyers do not wish to be seen, especially early in the case, as obstreperous or obnoxious objectors in the eyes of the jury. Ultimately, counsel may decide that an objection will simply call attention to the subject matter or unduly emphasize it, and choose to deal with it in some other way instead. However, if opposing counsel’s statements are clearly inappropriate argument and the judge is likely to sustain an objection, then an objection should be made. Not only that, but if the argument or comment is particularly egregious, a motion for mistrial may be necessary in order to preserve the error for appeal.
In addition to objecting to argument, objections should be raised during opening statements when the subject matter is clearly inadmissible, such
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as characterizing the defendant as “dishonest” or “lying,” as opposed to comparing the observations of one witness to another and to the facts that will be proved. Vouching for the credibility of a witness by counsel is also inappropriate. It is usually considered improper for counsel to give a personal assurance of credibility, or to suggest counsel has information not available to the jury supporting the credibility of a witness. It is not objectionable, however, for counsel to state that an attorney represents a party and the party’s insurance company.
Prohibited remarks during opening statements may include the following:
• Irrelevant prejudicial remarks; • Unsupported accusations; • An improper implication of misconduct; • Financial circumstances of a party; • Disparaging remarks about counsel, par-
ties, or witnesses; • References to previous trials or verdicts; • Prior compensation for the injury; • That the outcome of the case may affect
the juror, such as by increased premiums or higher taxes;
• The golden rule approach–i.e., asking the jurors to place themselves in one of the party’s shoes and asking them to treat the party as the jurors would wish to be treat-ed;
• Addressing jurors personally during open-ing statement;
• Asking for sympathy for your client; and• Dealing with matters of race, nationality,
or religion.
To preserve an objection during an opening statement, counsel must object and cite the specific grounds for the objection in order to have it preserved for appeal.8 The strategy and exercise of discretion involved in deciding whether and when to raise an objection during opening statements
can, at times, be as important as the giving of the opening statement itself.
VII. Conclusion
An opening statement should be an accurate preview of the coming attractions that will be offered by that party during the trial. The opening statement should have a theme, tell a story, deal with the adverse facts, and advise the jury who will testify and what they will say. The important facts should be emphasized. The opening statement should be concise, delivered in a manner comfortable to the presenter, and delivered in a conversational tone that is not argumentative. The goal of the opening statement is to set the table for a closing argument that will be an embellishment of the opening statement. After presenting a carefully crafted opening statement, counsel’s end goal should be the ability to say to the jury during the closing argument, “I told you so.”
Emile H. Banks, Jr., born Chicago, Illinois, February 2,1959; admitted to bar, 1984, Wisconsin and U.S. District Court, Eastern and Western Districts of Wisconsin.
Education: Ohio Northern University, (J.D., 1984). Phi Alpha Delta. Associate Research Editor Ohio Northern Law Review, 1982-1983. Super Lawyer for Wisconsin, 2005-2016 (voted Top 50 Lawyers in Wisconsin 2008-10 and 2014-16) (voted Top 25 Lawyers in Milwaukee 2016). Former Member, Supreme Court of Wisconsin Board of Attorney Professional Responsibility Investigative Committee; Board Member, State Bar of Wisconsin Litigation Section.
Member: State Bar of Wisconsin, (Member, Chief Judge Subcommittee on Juror Treatment and Selection); American Bar Association; Wisconsin Association of Minority Attorneys; Wisconsin Defense Counsel; Defense Research Institute; International Association of Defense Counsel; National Association of Bond Lawyers; National Association of Minority & Women Owned Law Firms; Council on Litigation Management;
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Federation of Defense and Corporate Counsel (FDCC); American Board of Trial Advocates (ABOTA); International Society of Barristers; Fellow: American College of Trial Lawyers; Fellow: Litigation Counsel of America.
William R. Wick, is a defense lawyer who concentrates his practice in the areas of medical malpractice and general personal injury litigation. He received his B.S. in 1970 from Carroll College, his M.P.A. in 1972 from the University of Southern California, and his J.D. in 1974 from Marquette University Law School. Mr. Wick was certified by the American Board of Trial Advocacy as a Civil Trial Specialist. He is a member of the State Bar of Wisconsin and a past chair of the Litigation Section. He has also been President of the Civil Trial Counsel of Wisconsin now known as the Wisconsin Defense Counsel. Mr. Wick is a
fellow of the American College of Trial Lawyers and a member. He has also been President of the Wisconsin Chapter of the American Board of Trial Advocates (ABOTA). He has also been selected to be included in Best Lawyers in America for the last ten years. Mr. Wick is a frequent lecturer on topics involving civil litigation.
References1 William L. Burke, Ronald L. Poulson, and Michael J.
Brondino, Fact or Fiction: The Effect of the Opening Statement, 18 J. Contemp. L. 195 (1992).
2 Wis. JI-Civil 50.3 Wis. Stat. § 906.15.4 Wis. JI-Civil 110.5 Daniel Linz and Steven Penrod, Increasing Attorney
Persuasiveness in the Courtroom, 8 Law & Psychology Rev. 1, 13-14 (1984).
6 165 Wis. 2d 572,478 N.W.2d 31 (Ct. App. 1991).7 Id. at 580-81. 8 Wis. Stat. § 805.11(2).
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Introduction
The application of the well-established four-corners rule precludes courts from considering extrinsic evidence outside the complaint and the applicable insurance policy to decide whether the insurer owes a duty to defend. The rule is long-rooted in Wisconsin law. Courts, lawyers, and litigants have learned to apply it, and to measure an insurer’s obligation to defend based on the facts alleged in the plaintiff’s complaint. The four-corners rule has benefits for both insureds and insurers. The rule complements and furthers important policy goals that the Wisconsin Supreme Court has identified over the years. The supreme court has rightly resisted efforts to dilute the rule, and should continue to safeguard it.
Over the years, insurers have frequently chosen to defend an insured under a reservation of rights, and then promptly sought to bifurcate the case, stay proceedings on the merits, and secure a declaration from the court on whether the insurer owes the insured a duty to defend and indemnify under the applicable policy. Where the insurer does this, the duty to indemnify on the allegations as pleaded can also be reached, because the duty to defend is much broader than the duty to indemnify.
This procedure protects the insured against the plaintiff, while also ensuring that the insurer that believes it has no duty to defend or indemnify based on the allegations in the complaint does not breach any duties owed to the insured under the policy should the court disagree. The court and parties then have the complaint and the policy, and can apply
the four-corners rule, without subjecting the insured to proceedings on the merits of the plaintiff’s claim.
Despite these important policies supporting application of the four-corners rule to the analysis of the insurer’s duty to defend, the Wisconsin Court of Appeals, in a recent decision, Stimac Family Trust v. Power & Light,1 confined the four-corners rule to such narrow circumstances that it will be weakened, and in the process, could encourage insurers to more frequently flatly deny a defense in order to be able to utilize the efficiency and simplicity of the four-corners rule.
The Four-Corners Rule
The four-corners rule is “well-established” in Wisconsin.2 The rule states that the insurer’s duty to defend its insured is determined by comparing the allegations contained within the four corners of the complaint to the policy language, and this rule has been consistently stated by the courts over the years:
Longstanding case law requires a court considering an insurer’s duty to defend its insured to compare the four corners of the underlying complaint to the terms of the entire insurance policy.
... [A]n insurer’s duty to defend its insured depends on the allegations contained in the four corners of the complaint.3
The Stimac Decision: Cutting Corners on the Four-Corners Ruleby: Jeff Leavell, Jeffrey Leavell, S.C.
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Two recent Wisconsin Supreme Court decisions have emphasized the vitality of the rule. In Marks v. Houston Casualty Co., the court stated: “[O]nly two documents are germane in any four-corners analysis: the insurance policy and the complaint against the insured. No examination of extrinsic facts or evidence takes place.”4 The insured in Marks tried to argue that the policy exclusions could not be considered. The court rejected that limitation.5
In Water Well Solutions Service Group Inc. v. Consolidated Ins. Co., the court rejected the argument that the complaint could be incomplete or ambiguous such that extrinsic evidence like affidavits could be used to supplement the facts considered in determining the duty to defend.6 In doing so, the supreme court rejected the idea that there are any exceptions to the four-corners rule, stating: “[T]here is no exception to the four-corners rule in duty to defend cases in Wisconsin.”7
Marks and Water Well are just the latest in a long line of decisions, dating back fifty years, in which the supreme court has repeatedly made use of the four-corners rule while at the same time rejecting the use of extrinsic evidence to determine the insurer’s duty to defend.8
Applying the four-corners rule favors the insured. At the early stage of the litigation, the rule requires that the allegations within the four corners of the complaint be construed liberally in favor of finding insurance coverage in order to protect the insured. This approach also recognizes that the duty to defend is broader than the duty to indemnify.9 The complaint sets the outer bounds for any judgment that may result.10
Sneaking Outside of the Four Corners
Despite the four-corners rule’s long standing, decisions of the Wisconsin Court of Appeals have occasionally strayed from a strict application of the rule. The usual source of this straying is a snippet or excerpt from some earlier decision which, without consideration of context, can yield a result
at odds with the four-corners rule. One example is Berg v. Fall.11 In Berg, the court of appeals addressed the insurer’s duty to defend a complaint arising out of a fight where the insured struck the plaintiff, but the insured claimed self-defense. The complaint obviously did not allege self-defense. The insurer moved for summary judgment, seeking a declaration that it had no defense or indemnity obligations, while the insured opposed the motion, arguing that he had been defending himself and did not intend to injure the plaintiff. In doing so, the insured relied on deposition testimony.12 Instead of a strict application of the four-corners rule, the court of appeals in Berg agreed to rely on the extrinsic evidence—the deposition testimony—to conclude that the plaintiff’s injury was outside of the insurance policy’s intentional injury exclusion, and that the insurer therefore had a duty to defend the insured.13
The Berg court cited the Wisconsin Supreme Court’s 1967 decision in Grieb v. Citizens Casualty Company as support for its decision to carve out a “self-defense exception” to the four-corners rule.14 Grieb had noted in dicta, citing to the American Law Reports (ALR), that there were four exceptions to the four-corners rule.15 The ALR exceptions included “a conflict of allegations and known facts, where the allegations are ambiguous or incomplete.”16 While the Berg decision did not expressly refer to the ALR exceptions, it effectively applied them in finding that there was a duty to defend.
In Water Well, the Wisconsin Supreme Court expressly overruled Berg, emphasizing that courts are not to consider any extrinsic evidence in determining the insurer’s duty to defend:
We now unequivocally hold that there is no exception to the four-corners rule in duty to defend cases in Wisconsin. This position is consistent with long-standing precedent, including Grieb. Our passing reference in Grieb to “at least four exceptions to the general
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rule,” 33 Wis. 2d at 558, should not be read as an adoption of any exception to the four-corners rule. Rather, by citation to the American Law Reports, this passage in Grieb merely recognized that exceptions exist in other jurisdictions. That Grieb did not adopt any exceptions to the four-corners rule is further supported by the fact that Grieb never specifically enumerated or described any exception to the four-corners rule. Furthermore, our analysis in Grieb plainly reveals that we did not consider extrinsic evidence; rather, we applied the four-corners rule to conclude that the allegations against Grieb in the taxpayer’s suit did not fall within the coverage provided by the insurance policy at issue. Id. at 559. We overrule any language in Berg suggesting that evidence may be considered beyond the four corners of the complaint in determining an insurer’s duty to defend its insured.17
Despite this language in Water Well, the court of appeals in the recent Stimac decision has again found a way to employ extrinsic evidence despite the four-corners rule.
Stimac: A Recent Departure from the Four Corners
The court of appeals’ recent decision in Stimac creates a significant exception to the four-corners rule in a way detrimental to both insurers and insureds and contrary to the Wisconsin Supreme Court’s recent decisions. The decision holds that any time an insurer defends under a reservation of rights and moves to bifurcate and stay until the circuit court rules on the duty to defend, the four-corners rule does not apply and extrinsic evidence must be considered: “When an insurer provides a defense to its insured, any extrinsic evidence offered by either party must be considered by the court on the question of coverage.”18
In Stimac, the plaintiff alleged sewage and mold contamination to a home. The plaintiff alleged Wisconsin Power and Light Company (WPL) negligently broke a sewer line while excavating, causing sewage back up. WPL hired Aquire Contracting and Restoration, Inc. (Aquire), which was alleged to have negligently failed to properly restore the property, causing further mold growth and exacerbation of “sewerage and mold odors.” The insurer was named as a defendant, answered, and initially provided Aquire with a defense under a reservation of rights. However, the insurer immediately moved to bifurcate and stay, and then moved for summary judgment on the duty to defend and indemnify. It relied on the long-standing four-corners rule, presenting no extrinsic evidence. The insurer argued that damages alleged in the complaint were specifically excluded by the policy’s fungi and bacteria exclusion, pollution exclusion, and business risk exclusions.
In response, both the plaintiff and Aquire submitted affidavits and expert reports covering a broad range of issues, including the work done by Aquire and its subcontractors, mold contamination, and sewage odors and habitability. The insurer objected to the use of extrinsic evidence, relying on the four-corners rule.
The circuit court held that it must apply the four-corners rule, and concluded that the fungi and bacteria, pollution, and business risk exclusions all precluded coverage, and that the insurer therefore had no duty to defend Aquire.
The court of appeals reversed. The court recognized that the insurer had moved to bifurcate and stay, relied solely on the four-corners rule, and submitted no extrinsic evidence. Nonetheless, because the insurer chose to defend its insured under a reservation of rights, the court of appeals rejected application of the four-corners rule and held that the circuit court should have considered extrinsic evidence in that circumstance. The court of appeals remanded the case back to the circuit court for consideration of extrinsic evidence, and even invited additional discovery.
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The insurer’s approach in Stimac was consistent with Water Well. The insurer asked the court to analyze the duty to defend and indemnify based solely upon consideration of the four corners of the complaint and the insurance policy. The insurer did not unilaterally deny. Instead, it promptly sought a court declaration. The insurer did not hang its insured out to dry, instead defending under an express written reservation of rights, which is the procedure that has been recommended by the supreme court when coverage is disputed.19
By contrast, the plaintiff and Aquire both acted consistent with the overruled Berg decision. They submitted affidavits, expert reports, and work documents in an effort to alter and supplement the allegations of the complaint. The submission of this extrinsic evidence was no different than the submission of the extrinsic evidence in Berg, which had been expressly overruled by Water Well.
The rationale given for rejecting the four-corners rule was that the insurer had provided a defense under a reservation of rights. The court of appeals’ decision made a point of stating that, “[i]n this appeal, we address the procedure utilized when an insurer denies coverage.”20 It stated, as a generally applicable rule, that any time an insurer defends under a reservation of rights and moves to bifurcate and stay until the circuit court rules on the duty to defend, the four-corners rule does not apply: “When an insurer provides a defense to its insured, any extrinsic evidence offered by either party must be considered by the court on the question of coverage.”21
The Stimac decision effectively limits the four-corners rule to situations where the insurer denies a defense outright.22 This will effectively confine the four-corners rule to a handful of cases, rather than have it serve as the principal measure of the insurer’s duty to defend, as stated in Water Well. If insurers continue the cautious approach, defending under a reservation of rights, the Stimac decision will also make every duty to defend determination subject to an avalanche of dueling affidavits and a multitude of extrinsic evidence. In addition, the duty
to defend will be much less likely to be able to be determined promptly at the beginning of the lawsuit, a benefit to both insurers and insureds, because the extrinsic evidence that will now be necessary for a coverage determination is rarely developed enough at the outset of the lawsuit. As a result, extensive discovery will likely now be required in most duty to defend cases, effectively nullifying the entire purpose of seeking a bifurcation and stay. The court of appeals in Stimac relied on two Wisconsin Supreme Court decisions, Estate of Sustache v. Am. Family Mut. Ins. Co. and Olson v. Farrar, which considered extrinsic evidence in determining coverage. However, both of those decisions involved very different circumstances, where the case had proceeded through discovery, the insurer and insured submitted extrinsic evidence, and all of the parties were headed for a trial on coverage.23 Neither decision held that the four-corners rule was inapplicable just because the insurer had agreed to defend the insured under a reservation of rights.
In Sustache, the insurer submitted extrinsic evidence, affidavits, and two depositions, and “asked for a coverage hearing.”24 Plainly, discovery had occurred and the matter was headed to a coverage determination on the facts revealed in discovery and presented to the court.
Olson, too, stated that extrinsic evidence may be considered, but suggested that it was because the case was headed towards a coverage trial.25 In Olson, the insurer and the insured submitted affidavits with extrinsic evidence.26 Olson was focused on the potential for “a coverage trial [where] extrinsic evidence may be introduced ‘where appropriate to the resolution of the coverage question.’”27
Stimac presented very different circumstances. The insurer quickly sought a stay, very little discovery had happened, and the insurer moved for summary judgment solely on the four-corners rule. Olson and Sustache suggest a distinction between early-stage duty to defend and indemnify determinations that are properly made without considering extrinsic
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evidence under long-standing Wisconsin law, and coverage determinations made at or near the point of trial that may rely upon extrinsic evidence. However, neither Sustache nor Olson goes so far as to hold that extrinsic evidence may be considered every time an insurer provides a defense to its insured. Yet, that is the very holding in Stimac.28
The decisions in Sustache and Olson suggest a circumstance at the opposite end of the spectrum from Stimac, where the case has progressed for a substantial period of time, a significant amount of discovery has occurred on the coverage issue, and the parties collectively direct the court’s attention to discovery and not just to the complaint. In this circumstance, discovery may have shown that the broad allegations of the complaint are no longer representative of the plaintiff’s claim and the judgment that the plaintiff might recover.
Practical Effect and Consequences of Stimac
The insurer who defends under a reservation of rights, moves to bifurcate and stay, and promptly moves for summary judgment based on the complaint allegations is doing precisely what the supreme court has said it prefers. The insurer should not be penalized for doing so by losing the certainty of the four-corners rule.29 The natural result of the Stimac decision will be fewer defenses provided to insureds, as insurers will not want to lose the clarity and efficiency of the four-corners rule. This result is contrary to what the Wisconsin Supreme Court has said is good public policy. The supreme court believes that “[u]nilateral determinations to refuse to defend an insured” are disfavored, and insurers do so at their own peril.30 Under Water Well, when an insurer takes the preferred approach and seeks a stay and determination of the duty to defend from the circuit court, the insurer is protected from the negative consequences of a potential breach, and the court is to apply the four-corners rule without exception in analyzing whether a duty to defend exists. The court of appeals in Marks noted the interplay of incentives and penalties:
By using the normal duty to defend test to assess whether the insurer has breached its duty to defend, Professional Office Bldgs. provides a strong incentive to insurers to provide a defense to insureds, even when the insurer contests its obligation to provide coverage. The substantial benefit to insurers of providing an initial defense and promptly litigating the duty to defend is that, if the insurer is wrong in its assessment that it has no duty to defend, the insurer does not forfeit its right to contest coverage based on the facts, as further developed in discovery or as found by a fact finder. Under the Professional Office Bldgs. estoppel rule, if the insurer unilaterally denies a defense, it runs the risk that it will be required to provide coverage, even if later it can be shown that its policy does not provide coverage under the developed facts. The risk of being wrong is ample incentive for insurers to err on the side of caution, without the additional burden imposed by Grube.31
Prompt litigation of the duty to defend typically addresses the duty to indemnify as well, because the comparative breadth of the duty to defend necessarily encompasses the duty to indemnify. The court of appeals recently noted this, stating: “The duty to defend is broader than the duty to indemnify, ... and, accordingly, if there is no duty to defend there is also no duty to indemnify.”32 This reflects age-old law that “[a]s a general rule judgments must conform to the pleadings and the relief granted is limited by that demanded in the complaint, both as to character and amount.”33 Thus, a final declaratory judgment on both the duty to defend and the duty to indemnify based on the four corners is consistent with Wisconsin law at the outset of a lawsuit.
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Conclusion
The Stimac decision has a petition for review pending. The supreme court may clarify the vitality of the four-corners rule, and the impact of providing a defense to an insured under a reservation of rights to dispute coverage. The policy goals identified over the decades of the four-corners rule suggest that the mere fact of providing a defense should not render the four-corners rule inapplicable. Insurers and insureds would be disserved. So, too, would courts faced with a surge in coverage disputes requiring a fact-intensive analysis of affidavits, depositions, and other extrinsic evidence that will be filed, when previously the complaint allegations and the policy terms were dispositive.
Jeff Leavell was admitted to the Bar in 1983. He graduated from the University of Chicago, with honors, in 1980, and the University of Wisconsin Law School, J.D., cum laude, in 1983. He was judicial law clerk for the Wisconsin Court of Appeals District IV from 1983-1985.
Mr. Leavell is a frequent lecturer and author, and has spoken to numerous Civil Trial Counsel of Wisconsin Conferences and Wisconsin Defense Counsel Conferences over the last two decades. He regularly represents insurers and other parties in duty to defend disputes, in Wisconsin and other states and federal venues. Some recent duty to defend decisions include Stimac Family Trust v. Power & Light, 2017 WI App 33; Smith v. Anderson, 2016 WI App 16; Weis v. Kapinos, 2015 WI App 37; Schinner v. Gundrum, 2013 WI 71; Sawyer v. West Bend Mut. Ins. Co., 2012 WI App 92. He is the principal and founder of Jeffrey Leavell, S.C., established in 1994.
Mr. Leavell is a Board Certified Civil Trial Specialist by the National Board of Trial Advocacy. He has been elected by his peers as “Superlawyer” every year since 2006 as published in Milwaukee Magazine. Jeffrey Leavell, S.C. has been recognized annually since 1995 by Martindale-Hubbell in its Bar Register of Preeminent Lawyers as a most distinguished law practice, achieving the highest
level of legal and ethical standards. He served on the Board of Governors of the Racine County Bar Association, and is past President of the Racine County Bar Association. He is past President of the Wisconsin Defense Counsel.
References1 Stimac Family Trust v. Power & Light, 2017 WI App 33,
___ Wis. 2d ___, ___ N.W.2d ___ (Ct. App. April 19, 2017) (opinion ordered published; petition for review pending).
2 See Water Well Sols. Serv. Grp. Inc. v. Consol. Ins. Co., 2016 WI 54, ¶ 21, 369 Wis. 2d 607, 881 N.W.2d 285.
3 Id., ¶¶ 15, 20. 4 Marks v. Hous. Cas. Co., 2016 WI 53, ¶ 39, 369 Wis. 2d
547, 881 N.W.2d 309.5 Id., ¶ 75. 6 Water Well, 369 Wis. 2d 607, ¶ 18. 7 Id., ¶ 24. 8 See, e.g., Fireman’s Fund Ins. Co. v. Bradley Corp., 2003
WI 33, ¶ 19, 261 Wis. 2d 4, 660 N.W.2d 666; Smith v. Katz, 226 Wis. 2d 798, 815-16, 595 N.W.2d 345 (1999); Doyle v. Engelke, 219 Wis. 2d 277, 284 n.3, 580 N.W.2d 245 (1998); City of Edgerton v. General Cas. Co., 184 Wis. 2d 750, 765, 517 N.W.2d 463 (1994); Elliott v. Donahue, 169 Wis. 2d 310, 320-21, 485 N.W.2d 403 (1992); Sola Basic Industries, Inc. v. United States Fidelity & Guaranty Co., 90 Wis. 2d 641, 646, 280 N.W.2d 211 (1979); Grieb v. Citizens Cas. Co., 33 Wis. 2d 552, 557-58, 148 N.W.2d 103 (1967).
9 Fireman’s Fund, 261 Wis. 2d 4, ¶ 20 (“The duty to defend is necessarily broader than the duty to indemnify because the duty to defend is triggered by arguable, as opposed to actual, coverage.”)
10 Kehl v. Kehl, 215 Wis. 353, 357, 254 N.W. 639 (1934) (“As a general rule judgments must conform to the pleadings and the relief granted is limited by that demanded in the complaint, both as to character and amount.”)
11 Berg v. Fall, 138 Wis. 2d 115, 405 N.W.2d 701 (Ct. App. 1987).
12 Id. at 118-19.13 Id.14 Berg, 138 Wis. 2d at 122 (citing Grieb, 33 Wis. 2d 552).15 Grieb, 33 Wis. 2d at 558. 16 Estate of Sustache v. Am. Family Mut. Ins. Co., 2007 WI
App 144, ¶ 11, 303 Wis. 2d 714, 735 N.W.2d 186, aff’d by 2008 WI 87, 311 Wis. 2d 548, 751 Wis. 2d 845.
17 Water Well, 369 Wis. 2d 607, ¶ 24. 18 Stimac, 2017 WI App 33, ¶ 12. 19 Maxwell v. Hartford Union High Sch. Dist., 2012 WI 58, ¶¶
61-62, 341 Wis. 2d 238, 814 N.W.2d 484. 20 Stimac, 2017 WI App 33, ¶ 1. 21 Id., ¶ 12.22 Id., ¶ 11 n.1.
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23 See Olson v. Farrar, 2012 WI 3, ¶¶ 17-18, 35, 338 Wis. 2d 215, 809 N.W.2d 1; Estate of Sustache v. Am. Family Mut. Ins. Co., 2008 WI 87, ¶¶ 28-29, 311 Wis. 2d 548, 751 N.W.2d 845.
24 Sustache, 311 Wis. 2d 548, ¶ 28.25 Olson, 338 Wis. 2d 215, ¶¶ 35-37. 26 Id., ¶¶ 17-18. 27 Id., ¶ 35 (quoting Lucterhand v. Granite Microsystems, 564
F.3d 809, 812 n.2 (7th Cir. 2009)).28 Stimac, 2017 WI App 33, ¶ 12.
29 See Water Well, 369 Wis. 2d 607, ¶ 27 (providing that “proceed[ing] under a reservation of rights” rather than making a unilateral determination refusing to defend is “one of the judicially-preferred approaches” to resolving duty to defend issues).
30 Id., ¶ 27-28. 31 Marks v. Bedford Underwriters, Ltd., 2015 WI App 44, ¶
16, 363 Wis. 2d 505, 866 N.W.2d 393.32 Great Lakes Bevs., LLC v. Wochinski, 2017 WI App 13, ¶
15, 373 Wis. 2d 649, 892 N.W.2d 333.33 Kehl, 215 Wis. at 357.
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I. Introduction
Summer is here in Wisconsin, and with it brings rising temperatures, sunshine, and all manner of outdoor activities. Although Wisconsin enjoys four distinct seasons, summer presents Wisconsinites and guests of our state with their best chance to get outside and engage in their favorite recreational pursuits. These pursuits, however, are not enjoyed without risk. People sustain unfortunate injuries during recreational activities, and, as a result, owners of recreational property often confront unwelcome personal injury lawsuits. So, as summer arrives in Wisconsin, it brings with it not only a great chance for people to get outside and enjoy their favorite recreational activities, it also presents members of the defense bar with an excellent opportunity to review the recreational immunity statute and two recent Wisconsin court cases applying it.
The first, Wilmet v. Liberty Mutual Ins. Co.,1 represents a victory for the defense bar, as the court of appeals ruled that supervising someone engaged in a recreational activity is itself a recreational activity. The second, John Y. Westmas v. Selective Insurance Company of South Carolina,2 a fully-briefed appeal currently pending before the Wisconsin Supreme Court, will determine whether an independent contractor is entitled to recreational immunity under one of the statutory definitions of “owner.” The purpose of this Article is to explain the components of a recreational immunity defense and assess the potential impact of the Wilmet and Westmas cases.
II. The Recreational Immunity Statute and Its Application
Wisconsin’s recreational immunity statute, Wis. Stat. § 895.52, immunizes landowners from liability for negligence in the maintenance and repair of their property when a person is injured while engaged in a recreational activity on the owner’s land. Specifically, § 895.52 provides:
(a) ... [N]o owner and no officer, employee, or agent of an owner owes to any person who enters the owner’s property to engage in recreational activity:
1. A duty to keep the property safe for recreational activities;
2. A duty to inspect the property;
3. A duty to give warning of an unsafe condition, use or activity on the property.
(b) … [N]o owner and no officer, employee or agent of an owner is liable for the death of, any injury to, or any death or injury caused by, a person engaging in a recreational activity on the owner’s property.3
The impetus behind the law is simple. As the world becomes increasingly crowded, the public’s access to recreational land shrinks.4 The law seeks to encourage landowners to open their property
Summer in Wisconsin: A Recreational Immunity Updateby: Samuel M. Mitchell, Coyne, Schultz, Becker & Bauer, S.C.
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to recreational use by removing potential causes of action by property users against property owners.5 Thus, the recreational immunity statute accomplishes two important policy goals—it promotes public access to recreational grounds, and it also provides a powerful defense against liability for landowners who accommodate the public’s use of their land.
Application of the recreational immunity defense is a multi-step process. The first step is to determine whether the plaintiff was engaged in a recreational activity at the time of his or her injury. The next step is to determine whether the defendant qualifies as an “owner” of the land where the injury occurred, and whether the defendant’s alleged negligent acts had some connection to the recreational activity for which the land was being used.
Despite its scope, the recreational immunity statute’s protections are not absolute. The statute includes several exclusions to coverage. For example, parties who act maliciously in causing injury to people engaged in recreational activities or landowners engaged in “profit-making” ventures are not immune under the statute. Moreover, the statute itself has been the subject of intense litigation to define the boundaries of what constitutes a “recreational activity,” the types of “owners” covered under the statute, and the types of negligent conduct immunized by the statute. Wisconsin courts have struggled and continue to struggle with applying the statute’s protections to varied factual scenarios as they attempt to balance the legislature’s intent in keeping the statute’s protections broad while imposing reasonable limitations on its application.
This balancing act has been on display in both Wilmet and Westmas, which are discussed below.
A. What Is a Recreational Activity?
The statutory definition of “recreational activity” is multifaceted. The term is generally defined as “any outdoor activity undertaken for the purpose of exercise, relaxation or pleasure, including practice or instruction in any such activity.”6 The statute
then enumerates 29 specific activities considered to be recreational.7 In keeping with the legislature’s broad intent for the statute, there is also a “catch-all” provision adding “any other outdoor sport, game or educational activity” to the definition.8 The legislature offered the following explanation when it passed the statute:
While it is not possible to specify in a statute every activity which might constitute a recreational activity, this act provides examples of the kinds of activities that are meant to be included, and the legislature intends that, where substantially similar circumstances or activities exist, this legislation should be liberally construed in favor of property owners to protect them from liability….9
The legislature’s attempt to create a broad definition of “recreational activity” is clear. However, the line between recreational and non-recreational activities under Wis. Stat. § 895.52 has vexed litigants and resulted in more litigation than any other portion of the statute. To assist in this determination, the Wisconsin Supreme Court, in Linville v. City of Janesville,10 adopted what essentially amounts to a totality of the circumstances test:
The test requires examination of all aspects of the activity. The intrinsic nature, purpose and consequence of the activity are relevant. While the injured person’s subjective assessment of the activity is relevant, it is not controlling. Thus, whether the injured person intended to recreate is not dispositive, but why he was on the property is pertinent.11
In other words, each recreational immunity case “poses an intensely fact-driven inquiry.”12 The recent Wilmet case demonstrates this. In Wilmet, Mrs. Wilmet brought her grandchildren to a city-owned pool in De Pere. After dropping them off,
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she remained outside the premises, supervising her grandchildren from behind the fenced perimeter of the pool as they swam. Mrs. Wilmet’s grandson shouted to her that he was going to jump off the high dive. Mrs. Wilmet observed that there were no lifeguards on duty, so she told her grandson to wait, entered the pool premises without paying the entry fee, and went immediately from the entrance through the locker room and toward the high dive. It was not Mrs. Wilmet’s intention to swim at the pool or to linger on the premises following her grandson’s dive. Unfortunately for Mrs. Wilmet, she tripped on a cement doorstop and injured herself as she walked toward the diving board.
The Wilmets filed suit against the city alleging violation of the safe place statute (Wis. Stat. § 101.11), negligence, and negligence per se. The city invoked the recreational immunity statute and filed for summary judgment on each claim, arguing that Mrs. Wilmet’s activity of supervising her grandson was sufficient to qualify her activity as “recreational” under the statute. The Wilmets opposed the city’s motion on the basis that Mrs. Wilmet was simply walking to get from one place to another and not, for example, to exercise or enjoy the scenery.13
The circuit court agreed with the city and granted its motion for summary judgment. On appeal, the court of appeals affirmed, holding that “‘supervising’ other persons, who are themselves engaged in recreational activities, is a ‘recreational activity’ within the meaning of Wis. Stat. § 895.52(1)(g).”14 In particular, the court concluded that supervising others who are engaged in recreational activities involves an active oversight function, including directing one or more individuals engaging in the activity.15 Thus, the court reasoned that “supervision” was “substantially similar” to “practice” and “instruction” in a recreational activity, which the legislature specifically included within the ambit of the statutory definition.16 In so ruling, the court noted that extending the definition of recreational activity to include individuals who are supervising those engaged in a recreational activity comports with the well-documented broad legislative purpose of the statute.17
The implication of Wilmet is that Wisconsin courts continue to favor a liberal construction of the definition of “recreational activity” under the statute. Wilmet is clear in its adherence to the legislature’s intent to construe the definition of recreational immunity liberally in favor of protecting property owners from liability. Of course, such decisions remain intensely fact-driven and subject to the totality of the circumstances test articulated in Linville and its progeny. Fortunately for property owners and government entities, Wisconsin courts tend to interpret the definition of recreational activity broadly and find in favor of immunity for property owners.
B. Who Is an “Owner” Under the Statute?
The next step in the analysis is to determine whether the defendant qualifies as an “owner” under the statute. The statute provides, in relevant part, that “no owner and no officer, employee or agent of an owner is liable for the death of, any injury to, or any death or injury caused by, a person engaging in a recreational activity on the owner’s property.”18 “Owner” is defined to include “[a] person … that owns, leases or occupies property.”19 Although seemingly straightforward, this prong of the analysis, like the definition of “recreational activity,” has engendered a torrent of litigation to address varied factual scenarios.
1. The Scope of Land Ownership
One of the focuses of litigation has been where one’s land ownership ends. For example, in Waters v. Pertzborn,20 the Wisconsin Supreme Court held that a “continuous act” that begins on a landowner’s property but propels the person engaged in recreation beyond the property warrants the extension of the statute to treat the nearby land as owned by the landowner.21
In Waters, a child suffered severe injuries from a sledding accident after the force and power of his sled propelled him off private property owned by his friend’s parents and into the middle of a street where he was struck by a passing car.22 The defendants did not own the land where the injury
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occurred. The injured boy’s parents sued the landowners for negligence. The landowners raised the recreational immunity defense. The plaintiffs countered the recreational immunity defense by arguing that the social guest exception applied, which requires that the plaintiffs establish the defendants’ ownership interest of the land where the accident occurred.23 The Wisconsin Supreme Court ruled that the force and speed of the continuous act of sledding necessitated the extension of the defendants’ ownership interest to cover the street as though it was owned by the defendants for the purposes of the statute.24 The court stated that a contrary interpretation would lead to absurd and unreasonable results.25 Consequently, the court ruled that the plaintiffs could proceed under the social guest exception.26 Thus, ownership can extend to land for which the defendant does not hold title.
2. “Occupiers” and “Agents” as “Owners”
Recreational immunity not only extends to landowners, but also to their agents and to a “person … that ... occupies property.”27 Predictably, the terms “agent” and “occupies” are frequently litigated subjects, as neither is expressly defined (and, as the defined term “recreational activity” demonstrates, even defined terms are not safe from litigation regarding their interpretation).
In fact, the meaning of the words “agent” and “occupies” is currently on appeal before the Wisconsin Supreme Court in the Westmas case.28 In Westmas, Jane Westmas was struck and killed by a tree branch cut by Creekside Tree Service, Inc. (Creekside), as she and her son walked along a public shoreline path through the property of Conference Point, a faith-based conference and retreat center. The path was free-of-charge and open to the public for recreational purposes. Conference Point had contracted with Creekside to trim and remove overgrown trees from the path. Creekside had only been on the property for a couple of days, moving from location to location to trim the trees identified in its contract with Conference Point, but in that time had cut the tree limb that ultimately
struck and killed Westmas. The Westmas estate sued Creekside and its insurer. The Walworth County Circuit Court granted summary judgment to the defendants on recreational immunity grounds.
The estate appealed. On appeal, it was undisputed that Westmas was killed while engaged in a recreational activity on the public shoreline path. The only point of dispute was whether Creekside was entitled to recreational immunity under the statute.
The estate argued on appeal that the circuit court had erred in concluding that Creekside was entitled to recreational immunity on the grounds that Creekside (1) was an “agent” of Conference Point and (2) was an “occupie[r]” of the Conference Point property, and thus statutorily an “owner” of the property. The court of appeals agreed with the estate and reversed, concluding that recreational immunity did not immunize Creekside from liability for its negligence.
Noting that the neither the statute nor Wisconsin case law defined the term “agent,” the court of appeals in Westmas looked to its recent holding in a governmental immunity case, Showers Appraisals, LLC v. Musson Bros.,29 for guidance. Showers held that a contractor is an agent of a government entity and therefore entitled to immunity under Wis. Stat. § 893.80 when it is shown that the government entity had “the right to control the tasks performed by the contractor with ‘reasonably precise specifications,’” and the contractor “followed those specifications.”30 Under the Showers court’s view of agency, a contractor is not an agent, however, if it retains significant control over the “alleged injury-causing action.”31
Applying Showers, the Westmas court concluded that Conference Point did not significantly control Creekside’s work with the “reasonably precise specifications” required to be an agent. Specifically, although Conference Point told Creekside what it wanted and envisioned, the faith center did not retain any control over or otherwise supervise how Creekside went about the work or implemented
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safety measures. Accordingly, the court of appeals ruled that Creekside was not Conference Point’s agent for purposes of Wis. Stat. § 895.52.
The Westmas court then turned to whether Creekside could be considered an “owner” under the statute on the grounds that it “occupied” the premises. As with “agent,” the term “occupies” is also not defined in the recreational immunity statute, so the court looked to the Wisconsin Supreme Court’s recent decision in Roberts v. T.H.E. Ins. Co.32 for guidance.
In Roberts, the owner/operator of a hot air balloon donated rides at a charity event. The plaintiff sued the hot air balloon company, who was neither the sponsor of the event nor the landowner, after a tethering line broke free and struck her while she waited in line. The circuit court granted the hot air balloon company summary judgment on recreational immunity grounds and the court of appeals affirmed.
On appeal to the Wisconsin Supreme Court, the appellant renewed her argument that the hot air balloon company was not an “occupier” of the land for purposes of the statute. The supreme court gave the term “occupies” its common dictionary meaning: “to take hold and possession.”33 The court explained that, while the term “occupies” should be interpreted to encompass a resident of the land who is more transient than either a lessee or an owner, the court read “a degree of permanence, as opposed to mere use” into the term.34 In defining the term, the supreme court in Roberts reversed and ruled against the hot air balloon company, stating that to grant immunity to third parties who are not responsible for opening up the land to the public would be inconsistent with the legislative intent behind the statute.
Applying Roberts, the Westmas court held that Creekside’s presence did not rise to the requisite degree of permanence to warrant occupier status. The court reasoned that an occupier would be expected to have “more than a temporary presence on the property,” as well as “some level of control
over those who may enter upon it and for what purpose.” Accordingly, the court of appeals in Westmas ruled that Creekside could not be said to have “taken and held possession,” and thus could not qualify as an occupier and as a statutory owner of the property for purposes of Wis. Stat. § 895.52.35
As stated, Westmas is currently before the Wisconsin Supreme Court. The issues are the same as before the court of appeals and are fully briefed. It will be interesting to see how the court rules.
III. Conclusion
Wisconsin’s recreational immunity law immunizes individuals and entities against liability for injuries sustained while engaging in recreational activities on the landowner’s property. The legislature is unequivocal in its support for a broad interpretation of this statute. Recent case law indicates that courts continue to construe the statute liberally, but as the recent Westmas decision demonstrates, the courts likewise feel that some reasonable limits on the statute’s coverage are appropriate. Nevertheless, although far from absolute in its coverage, Wisconsin’s recreational immunity statute is a useful defense to liability for landowners, and developments with respect to the statute are something that every defense attorney working in the field of personal injury should follow closely.
Sam Mitchell is an associate at Coyne, Schultz, Becker & Bauer, S.C. in Madison. He can be contacted at [email protected].
References1 2017 WI App 16, 374 Wis. 2d 413, 893 N.W.2d 251.2 2016 WI App 92, 392 Wis. 2d 683, 889 N.W.2d 178. The
Westmas case, Appeal No. 2015AP001039, is now pending before the Wisconsin Supreme Court and has been fully briefed.
3 Wis. Stat. § 895.52(2)(a)-(b).4 Hall v. Turtle Lake Lions Club, 146 Wis. 2d 486, 489, 431
N.W.2d 696 (Ct. App. 1988).5 Held v. Ackerville Snowmobile Club, Inc., 2007 WI App
43, ¶ 8, 300 Wis. 2d 498, 730 N.W.2d 428.6 Wis. Stat. § 895.52(1)(g).7 Id. 8 Id. 9 1983 Wis. Act 418, § 1 (emphasis added).
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10 184 Wis. 2d 705, 516 N.W.2d 427 (1994).11 Id. at 716.12 Auman v. Sch. Dist., 2001 WI 125, ¶ 12, 248 Wis. 2d 548,
635 N.W.2d 672.13 The Wilmets relied on Rintelman v. Boys & Girls Clubs of
Greater Milwaukee, Inc., 2005 WI App 246, 288 Wis. 2d 394, 707 N.W.2d 897, for the proposition that such walking was not a recreational activity under the statute.
14 Wilmet, 374 Wis. 2d 413, ¶ 25.15 Id., ¶¶ 17-19. 16 Id. 17 Id., ¶ 21.18 Wis. Stat. § 895.52(2)(b) (emphasis added).19 Wis. Stat. § 895.52(1)(d)1.20 2001 WI 62, 243 Wis. 2d 703, 627 N.W.2d 497.21 Id., ¶¶ 49-50.
22 Id., ¶¶ 4-7.23 The social guest exception is found in Wis. Stat. § 895.52(6)(d).24 Id.25 Id.26 Id., ¶ 50.27 Wis. Stat. § 895.51(1)(d)1, (2)(b) (emphasis added).28 The Westmas case before the Wisconsin Supreme Court is
Appeal No. 2015AP001039.29 2013 WI 79, ¶ 31, 350 Wis. 2d 509, 835 N.W.2d 226.30 Id., ¶ 37.31 Id., ¶ 51.32 2016 WI 20, ¶ 27, 367 Wis. 2d 386, 879 N.W.2d 492.33 Id., ¶¶ 34-35.34 Id., ¶ 34.35 392 Wis. 2d 683, ¶¶ 28-29.
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Discussions of electronic evidence in civil suits often revolve around large bulk production of electronically stored i n f o r m a t i o n — e . g . , how do we determine which files or e-mails are responsive to a
discovery request, how do we redact privileged material intermingled with other communications, and how do we find the small but critical text message? But smaller-scale investigation of digital evidence on single systems is equally important, and arguably the more common need. Information about our clients and their matters is increasingly found on smartphones, tablets, and other devices, or out in “the cloud” in the custody of an application provider.
Comment 8 to Wisconsin Supreme Court Rule 20:1.1 (“Competence”) admonishes attorneys to “keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.” In other words, not only do attorneys have the incentive to understand enough about digital evidence to be effective advocates for their clients, they have an ethical duty to do so. For most attorneys, it is not feasible to learn enough about operating systems, application development, and networking to shoulder that responsibility on their own, and therefore expert assistance may be needed.
The Lifecycle of Digital Evidence
Digital evidence has some unique characteristics. Unlike an organic sample or a witness’s memory, it generally does not decay. In other words, it only accumulates—once discovered, it will be around for the life of the case. It can be copied quickly, easily, and with perfect accuracy—there is generally no difference whatsoever between the “original” of a file and a copy. At the same time, it can often be modified just as easily and potentially undetectably. Moreover, some aspects of digital evidence are delicate, and improperly examining certain things can change them or obliterate information that might otherwise have been useful. With these points in mind, it is worthwhile to consider the four main phases in the life of digital evidence.
1. Acquisition
Obtaining digital evidence is the first step, but also the one most fraught with risk. The goal at this phase is to acquire the evidence without altering it. How this is accomplished varies based on where the information resides. In the case of a computer hard drive, the process generally involves connecting the drive to a device that allows the contents of the storage media to be read and duplicated without alteration. With tablets, smartphones, and other devices, additional specialized equipment and techniques may be needed, because, whereas general-purpose computers have relatively standard and accessible components, mobile devices have purpose-specific hardware and software. The main thing to remember is that it is not good practice simply to examine digital evidence in situ. Doing
Digital Forensics and Civil Litigationby: John C. Mitby and Peyton Engel, Hurley, Burish &
Stanton, S.C.
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so is likely to destroy traces of how and when files were accessed that might be essential to the case.
Sound forensic techniques are important, but so is knowledge of where information may be found. For example, if messages delivered via Snapchat or the now-defunct Yik Yak are important in a case, critical data may reside not on the smartphones from which the messages were sent or received, but rather in the records of the application provider. Information about the source of a transmission of information may reside with an Internet Service Provider. Information about unauthorized use of corporate computing resources might be found in log files of network infrastructure devices. Thorough acquisition of digital evidence may therefore involve subpoenas, and demand a working knowledge of what information is stored where, how to craft an intelligible request for it, and how to correlate data from disparate sources.
2. Preservation
Once information has been acquired, the next step is to preserve it. Generally, this means storing it in such a way that there can be no accusations of spoliation. With respect to physical items—i.e., the devices themselves—this amounts to creating a chain-of-custody log and keeping the items in a physically secure area. With respect to data extracted from devices, this often means creating a forensic image—i.e., a special type of file that contains an exact copy of the original, but also cryptographic safeguards to render it tamper-evident.
3. Analysis
Once digital evidence has been properly acquired and preserved, the next step is to figure out what it means. This often requires not only knowledge of specialized forensic tools—i.e., tools to recover deleted files or to search for patterns in large volumes of information—but also a thorough understanding of the sources of the digital evidence. What can the presence of a file in a web browser’s cache tell us about what the user was up to? Are there differences between what we can learn from Google’s Chrome
web browser as opposed to Microsoft’s Internet Explorer? Does it matter whether the computer where the web browser was installed ran on Windows XP as opposed to Windows 7? In a nutshell, analysis of digital evidence can be subtle, and at times the key to understanding a piece of digital evidence is not to think about it in a vacuum, but rather to consider it in a larger context.
4. Presentation
Like any other evidence, the purpose of relevant digital evidence in a civil lawsuit is to persuade the trier of fact. It might be relatively easy to confront an adverse witness with a copy of a damning e-mail, but it is another to present a fraud case based on back-dated transaction records in an online accounting system. In other words, it’s not enough that an attorney understand the evidence in depth—a successful presentation requires witnesses who can explain how and why the digital evidence supports the theory of the case. A trier of fact needs to understand the facts, and attorneys must often rely on experts to develop the necessary degree of understanding.
Working with Experts
The phases discussed in the previous section tell us something about the experts we may need and when we will need them. First, concerns about digital evidence may crop up very early in a case—perhaps even when an attorney is evaluating a matter before deciding whether to undertake representation—so it is prudent to cultivate a relationship with someone who can at the very least assist with data acquisition. Knowing who to call when the need arises might make the difference between being able to find and preserve evidence and letting it vanish.
Next, it’s not necessarily the case that a single expert will suffice. Someone who does a great job at acquiring a piece of evidence may not know how to interpret it if the information at stake is the product of specialized software. For example, a medical instrument might store information on standard storage media, the acquisition of which could be
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done by any properly equipped forensic analyst. However, it is unlikely that the same person would have knowledge about how the instrument works, or how to interpret the data it stores. Having contacts in the technical community may make finding the right expert easier.
In addition, there may be more than one way to get at the information. If extraction of data from a smartphone is impossible because of encryption, it might be possible to seek sufficient information elsewhere. Someone with broad expertise might be able to help brainstorm tactics to get at information that is otherwise inaccessible.
Finally, attorneys should be mindful of the fact that the field of digital forensics continues to expand with the development of new devices. Data from pacemakers, Fitbit fitness trackers, smart televisions, and home assistant devices such as Amazon’s Echo are making their way into lawsuits, and are all proper subjects for forensic analysis. As these technologies mature, so will techniques for acquiring and analyzing the information they store and process.
Case Study
A small local healthcare provider recently suffered a security breach, and the contents of some of its systems were held hostage by ransomware. In addition to the critical practical need to get systems up and running again, the situation presented three major legal issues. First, what were the organization’s responsibilities under HIPAA and Wisconsin’s data breach notification law with respect to reporting the incident? Second, which patients should be notified, and what should the notice contain? And third, did the organization have any legal recourse?
A forensic consultant was able to determine which patients’ information was affected, and the type of information involved. Based on that determination, the organization was able to conclude that it had no obligation under Wisconsin’s data breach notification statute, Wis. Stat. § 134.98. However,
it did have notification obligations under 45 C.F.R. § 164.404(a). Finally, the forensic consultant was able to determine that the ransomware made it into the organization not via a malicious e-mail attachment, but rather through a chink in the organization’s perimeter defenses, left there by the organization’s IT consultant whose work across the board was below acceptable standards.
Nothing related to this incident has found its way into a lawsuit as of yet, but the forensic consultant’s work was essential to enable the organization’s attorney to provide appropriate guidance.
Anti-Forensics
Unless the user of a computer (or phone or tablet) takes specific steps to purge information, it is prudent to assume that everything the system has stored or done could potentially be recovered by a forensic analyst. For this reason, attorneys advising clients should also be aware of anti-forensic technologies. The most prominent among these are tools for encrypting data. Most mobile device and computer operating systems have at least some encryption capabilities built in, but these may not be suitable for all client needs. Also of interest are tools for securely deleting unwanted data—e.g., making sure that deleted files are no longer present on the system and eliminating traces of activities that should be kept confidential. Policies governing the destruction of unneeded data can greatly simplify discovery should litigation ensue down the road.
In the same vein, ABA Formal Opinion 477, released in May of 2017, updates guidance for attorneys about encryption of data, including e-mail, which is transmitted via the Internet. The opinion stops short of providing a bright-line rule specifying that encryption is required in certain contexts, and instead offers a list of factors to weigh in determining whether encryption would be appropriate in a given situation. Widespread encryption of e-mail remains cumbersome, and therefore unappealing to many clients, but in the wake of Formal Opinion 477, it is reasonable to expect that there will be at least some increase in the deployment of encryption
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for attorney communications. Generally speaking, however, the Formal Opinion only addresses encryption of data in transit, and not at rest on the sender’s or recipient’s systems, or on e-mail servers in between.
The Big Picture
Digital forensics is a vast and fast-moving field. More importantly, it is a field whose importance to civil litigation will continue to grow as clients continue to become more reliant on digital devices for communication and storage of information. This means attorneys can expect increased reliance on forensic experts as the collection of information essential to litigation, from financial records, to video messages, to GPS coordinates, becomes more and more reliant on digital sources.
John Mitby serves as counsel for numerous businesses, engineering and construction firms, insurance companies, non-profit organizations, and elder care facilities. John’s commercial practice includes resolving a variety of matters relating to contracts, transactional work, real estate, employment, financing, municipal, business, insurance, and litigation. John works with clients on acquisitions including those involving professional and technical businesses, and provides general corporate oversight for profit and non-profit organizations. He has provided counsel on many complex business transactions, such as the reorganization of a cooperative, the purchase and sale of numerous businesses, including the House on the Rock, one of Wisconsin’s most prominent landmarks, and the development of the Princeton Clubs. John’s litigation practice includes defense of contract matters, class actions, insurance claims, electronic discovery issues, cyber liability, investigative matters, and other highly complex business legislation matters.
Peyton B. Engel is an attorney with Hurley, Burish & Stanton, S.C., where he helps individuals and businesses with civil litigation, represents licensed professionals including attorneys in disciplinary matters, and provides consulting and expert witness services in matters where digital evidence is at issue.
Mr. Engel’s particular area of interest is in information technology, security, and privacy. He has extensive practical experience with information technology and compliance (primarily with respect to HIPAA and the PCI Data Security Standard), and has assisted attorneys with technology aspects of both civil and criminal matters.
Before joining the firm, Mr. Engel worked for more than 18 years in information technology, with sixteen years of that time spent specialized in network and information security. He holds the CISSP certification, and the Wisconsin Law Journal recently recognized him as one of the three best forensic experts in the state. He is a member of the State Bar of Wisconsin and the Dane County Bar Association.
Mr. Engel earned his B.A. degree from Grinnell College; his M.A. degree from the University of Wisconsin - Madison; and his J.D. degree, magna cum laude, Order of the Coif, from the University of Wisconsin Law School.
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Professional business attire promotes confidence and self-esteem. How we dress impacts how others perceive and respond to us. Professional dress for a lawyer is part of the practice. It is the fabric of our profession and many of us have more clothing than we can wear. However, not everyone is as fortunate, and this spring, the WDC Women in the Law Committee decided to take action.
As part of the 2017 Spring Conference, the Women in the Law Committee held its first Spring Clothing Drive. A call went out to attorneys to bring gently-used professional clothing to help support and empower women in the workplace. The response was overwhelming. Gently used professional clothing arrived by the carload. Both WDC and non-WDC members donated.
Women’s Clothes Closet staff member
The Women in the Law Committee had volunteers in five regions throughout the state gathering clothing. Attorney Kara Burgos of Moen Sheehan Meyer, Ltd., from La Crosse collected many items. The La Crosse region donations were made to The Women’s Clothes Closet—Our Savior’s Lutheran Church. The mission of The Women’s Clothes
Closet is “to provide gently used clothing to low-income women, especially those who are entering or are in the workplace.” They operate Mondays, Tuesdays, and Saturdays. According to the website, the customers can choose three complete outfits and returning customers can select one outfit up to two times per month. The organization does not ask questions about income or employment status. For more information about this organization, please see www.oursaviorslutheranchurch.net.
Attorney Heather Nelson with Everson, Whitney, Everson & Brehm, S.C., headed the Green Bay area collection. Attorney Nelson collected 11 boxes and bags of clothing for the YMCA of Greater Green Bay’s Women’s Career Closet. The Green Bay region was the top contributor.
From left to right, Heather Nelson, Joan Johnson, and YMCA volunteer.
The Green Bay Women’s Career Closet was established in 1993 and “provides work-appropriate clothing for low-income women who are seeking
Making a Difference—One Suit at a Timeby: Amy F. Scholl, Coyne, Schultz, Becker & Bauer, S.C.
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employment, starting a new job, or going to school.” See www.ywcagreenbay.org. The goal of the organization is to prepare women for employment and boost their self-esteem by helping them “dress for success.”
In the Southeast region, Attorney Jane Howard of Crivello Carlson, S.C., made donations to the Milwaukee YWCA’s Women’s Professional Image Program, and Attorney Danielle Rousset of Jeffrey Leavell, S.C., delivered clothing to Dress for Success in Racine.
Attorneys in Dane County made generous donations to the Community Action Coalition for South Central Wisconsin (CAC). Two SUVs were loaded and items were delivered to CAC on April 28, 2017. Attorney Gesina Seiler of Axley Brynelson LLP donated a significant portion of clothing given to the CAC donation.
From left to right, Jim Schroeder, Executive Director of CAC, and WDC President Laura Lyons.
CAC was founded in 1966 and builds “on the strengths, assets and capabilities of low-income people and communities to develop solutions to poverty.” See www.cacscw.org. The Dane County Clothing Center serves over 9,000 low-income individuals and families. It provides clothing for school, work, and interviews.
Attorney Gesina Seiler of Axley Brynelson LLP.
Given the success of the 2017 event, the Women in the Law Committee plans to make the clothing drive an annual event. The Committee is made up of 25 spirited female litigators who are dedicated to addressing the issues that are specific to women. The Committee formed just over a year ago and welcomes anyone who may be interested in joining. Please contact Committee Chair and WDC President Laura Lyons of Bell, Moore & Richter, S.C. at [email protected] for more information.
The members of our organization strive daily to make a difference, not just for our clients, but also in the community. We rarely take time to recognize those who dedicate time and energy to making Wisconsin a better place to live. If you know a member making a difference, please be sure to thank them.
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NOTES
August 3-4, 2017 Summer Conference
Kalahari Resort & Convention Center
December 8, 2017 Winter Conference
Milwaukee Marriott West
Calendar of Events
Circuit Court Decisions
6737 W. Washington Street Suite 4210
Milwaukee, WI 53214
Please submit important circuit court decisions impacting WDC members to the WDC office ([email protected]), which now maintains a circuit court
decision repository for the benefit of the membership. This repository is available at: wdc-online.org/resources/circuit-court-decisions