Business Litigation

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Obtaining a court judgment against a debtor corporation is only the first step in the collection process. Finding assets to satisfy that judgment is generally the more time consuming and difficult step. Often, the first step in the search is having a representative of the debtor corporation testify under oath at a supplemental hearing to…

A recent Wisconsin Supreme Court decision has significant implications regarding liability of corporate officers for negligence, and direct actions against insurance company.

Casper v. American International South Ins. Co, 2011 WI 81 involves an automobile accident caused by an employee of trucking companies who was under the influence of prescription drugs at the time of the accident.  The CEO of one of the companies was named as a defendant  He was not involved in the hiring or supervision of the driver, but had approved the trucking route used by the driver, which allegedly violated federal trucking safety regulations.  The argument was made he could not be held personally liable for negligence committed with the scope of his employment.

The unanimous court refused to accept this argument, in effect acknowledging that there could be circumstances when a corporate officer can be held personally liable for such negligence.  The court noted that the even the business judgment rule, which provides protection for corporate officers acting in the course of their duties, protects officers and directors only for negligent acts harming shareholders, not third parties.Continue Reading New Decision on Corporate Officer Liability and Direct Action Against Insurer

In a recent decision, Rassmussen v. General Motors Corp., 2011 WI 52 (July 11, 2011), the Wisconsin Supreme Court held that personal jurisdiction of a defendant under Wisconsin’s "long-arm statute" cannot be based merely on its agency relationship with an entity having sufficient contacts with the state.

The Court was addressing a class action suit brought against various automobile manufacturers for price fixing.  Among those manufactures was Nissan Japan.  The plaintiff maintained that its subsidiary, Nissan North America, which unquestionably engages in substantial activity within the state, functions as Nissan Japan’s alter-ego and that therefore Wisconsin courts have personal jurisdiction of Nissan Japan.Continue Reading Personal Jurisdiction Cannot be Based on Agency Alone

Wisconsin tort law has been substantially modified through the passage of 2011 Wisconsin Act 2, which became effective on February 1, 2011.  The changes made by this Act benefit businesses in several respects, particularly in the area of product liability.

Sellers and distributors of products are now exposed to liability for product defects only if they assumed responsibility for some portion of the product or its labeling, or if the manufacturer of the product is judgment proof.  A plaintiff is required to show some reasonable alternative design was available to a manufacturer in order to make a recovery.  The Act imposes a 15 year statute of repose, i.e. claims may not be brought with respect to products manufactured more than 15 years before the claim is made.Continue Reading Significant Changes Made by Wisconsin Tort Reform Law

Wisconsin’s Supreme Court 3-3 split in Polsky v. Virnich keeps Wisconsin’s unique view on fiduciary duties owed creditors by closely held corporations in place. In summary, officers and directors do not owe a fiduciary duty to creditors unless the company is BOTH: (a) insolvent; and (b) not a "going concern." Most jurisdictions do not have…

Judgment creditors in Wisconsin have the right to a supplemental examination of their judgment debtors to obtain information regarding their collectable assets.  This examination may require the debtors to produce records for inspection by the creditor.

In Crown Castle USA, Inc. v. Orion Logistics, LLC, 2009AP3029 (December 7, 2010), an opinion recommended for publication, the Court of Appeals determined that circuits had the authority to require companies related to a judgment debtor to produce records through the supplemental examination process set forth in Chapter 816 of the Wisconsin Statutes.  The claim was made that the judgment debtor in that case may have made fraudulent transfers to a company having common ownership to avoid collection of the judgment.Continue Reading Records of Companies Related to Judgment Debtor may be Reviewed by Creditor