EState Kriefall v. Sizzler U.S. Franchise Inc.

• Decision Date: 07 June 2011
• Docket Number: 2010AP491.,Nos. 2009AP1212,s. 2009AP1212
• Citation: 2011 WI App 101,74 UCC Rep.Serv.2d 819,801 N.W.2d 781,335 Wis.2d 151
• Court: Wisconsin Court of Appeals
• Parties: ESTATE OF Brianna KRIEFALL, deceased, by her Special Administrator, Douglas A. Kriefall, Connie J. Kriefall and Chad Kriefall, a minor, by his Guardian ad Litem, Plaintiffs,v.SIZZLER USA FRANCHISE, INC., Defendant–Respondent–Cross–Appellant, †E & B Management Co., Waukesha, d/b/a Sizzler, Sizzler USA and Secura Insurance, Defendants, †Excel Corporation and American Home Assurance Co., Defendants–Appellants–Cross–Respondents. †Estate of Brianna Kriefall, deceased, by her Special Administrator, Douglas A. Kriefall, Connie J. Kriefall and Chad Kriefall, a minor, by his Guardian ad Litem, Plaintiffs,v.Sizzler USA, Defendant,Sizzler USA Franchise, Inc., Defendant–Respondent, †E & B Management Co., Waukesha, d/b/a Sizzler and Secura Insurance, Defendants–Respondents–Cross–Appellants, †Excel Corporation and American Home Assurance Co., Defendants–Appellants–Cross–Respondents. †

335 Wis.2d 151

801 N.W.2d 781

74 UCC Rep.Serv.2d 819

2011 WI App 101

ESTATE OF Brianna KRIEFALL, deceased, by her Special Administrator, Douglas A. Kriefall, Connie J. Kriefall and Chad Kriefall, a minor, by his Guardian ad Litem, Plaintiffs,

v.SIZZLER USA FRANCHISE, INC., Defendant–Respondent–Cross–Appellant, †E & B Management Co., Waukesha, d/b/a Sizzler, Sizzler USA and Secura Insurance, Defendants, †Excel Corporation and American Home Assurance Co., Defendants–Appellants–Cross–Respondents. †Estate of Brianna Kriefall, deceased, by her Special Administrator, Douglas A. Kriefall, Connie J. Kriefall and Chad Kriefall, a minor, by his Guardian ad Litem, Plaintiffs,

v.Sizzler USA, Defendant,Sizzler USA Franchise, Inc., Defendant–Respondent, †E & B Management Co., Waukesha, d/b/a Sizzler and Secura Insurance, Defendants–Respondents–Cross–Appellants, †Excel Corporation and American Home Assurance Co., Defendants–Appellants–Cross–Respondents. †

Nos. 2009AP1212

2010AP491.

Court of Appeals of Wisconsin.

Argued May 24, 2011.Decided June 7, 2011.

On behalf of the defendants-appellants-cross-respondents Excel Corporation and American Home Insurance Company, the cause was submitted on the briefs of Nora Gierke and Rebecca Frihart Kennedy of Reinhart Boerner Van Deuren S.C., Milwaukee, Barbara I. Michaelides (pro hac vice), Paula M. Carstensen (pro hac vice) and Agelo L. Reppas (pro hac vice) of Bates Carey Nicolaides LLP, Chicago, Illinois, William C. Buhay, Earl W. Gunn and David I. Matthews (pro hac vice) of Weinberg, Wheeler, Hudgins, Gunn & Dial, LLC, Atlanta, Georgia. There was oral argument by Paula M. Carstensen.On behalf of the defendant-respondent-cross-appellant Sizzler USA Franchise, Inc., the cause was submitted on the brief of Russell A. Klingaman and Noah D. Fiedler of Hinshaw & Culbertson LLP, Milwaukee. There was oral argument by Frederic Gordon (pro hac vice) of Gordon & Holmes, San Diego, California.On behalf of the defendants-respondents-cross-appellants E & B Management Co., Waukesha, Inc. and Secura Insurance, a Mutual Company, the cause was submitted on the brief of Ronald G. Pezze, Jr. and Ahndrea R. Van Den Elzen of Peterson, Johnson & Murray, S.C., Milwaukee. There was oral argument by Terry Johnson.Before FINE, BRENNAN and REILLY, JJ.FINE, J.

¶ 1 This matter was here before. Estate of Kriefall ex rel. Kriefall v. Sizzler USA Franchise, Inc., 2003 WI App 119, ¶ 1, 265 Wis.2d 476, 483, 665 N.W.2d 417, 421, held that claims by the estate of a child alleged to have died as the result of, and persons alleged to be injured by, contaminated meat sold by Excel Corporation were not barred by federal preemption. The claims of the Kriefalls and the others alleged to be injured by the meat were settled. This appeal concerns disputes between the Sizzler parties and Excel.

¶ 2 The parties to this appeal are:

• Excel and its insurer, American Home Assurance Company;

• E & B Management Company, Waukesha, d/b/a Sizzler, the owner of the two Sizzler restaurants where the customers ate food contaminated by E. coli O157:H7 bacterium alleged to have been on Excel meat delivered to the E & B Sizzler restaurants, and E & B's insurer, Secura Insurance; and

• Sizzler USA Franchise, Inc., the company that franchised the E & B Sizzler restaurants. Sizzler USA Franchise is mostly referred to by the parties as simply “Sizzler.” For clarity, however, we refer to it as Sizzler USA Franchise to distinguish it from its parent company, Sizzler International, Inc., which is not a party to this appeal.

¶ 3 The jury found the following:

1. Excel breached “an implied warranty of merchantability or implied warranty for the sale of food”;

2. Excel's breach was “a cause of damage” to Sizzler USA Franchise;

3. As a result of the breach, Sizzler USA Franchise was entitled to $6,500,000 for “[l]ost profits attributable to company-owned stores,” $350,000 for “[l]ost franchise royalties,” and $311,000 for “[o]ut of pocket expenses”;

4. Excel was “negligent in selling meat adulterated with E. coli 0157:H7”;

5. Excel's negligence in selling adulterated meat was “a cause of injuries to the patrons of” the two E & B Sizzler restaurants;

6. E & B was negligent “[a]t the time of the E. coli 0157:H7 outbreak”;

7. E & B's negligence was “a cause of injuries to the patrons of” the two E & B Sizzler restaurants;

8. Sizzler USA Franchise was not negligent “as a franchisor”;

9. Apportioning causal negligence, Excel was 80% causally negligent, and E & B was 20% causally negligent; 10. “Fair[ ] and reasonabl[e] compensa[tion]” for the following was: “Pain and suffering of Brianna Kriefall after she became ill but before her death”—$1,000,000; “Pain and suffering of Chad Kriefall due to E. coli 0157:H7 illness”—$10,000; and “Loss of the Kriefall family's society and companionship with Brianna Kriefall after she became ill but before her death”—$50,000. (Underlining in original.)

¶ 4 Excel and American Home Assurance appeal the trial court's judgments and some orders. E & B and Secura cross-appeal a judgment and some orders. Sizzler USA Franchise cross-appeals two orders. We affirm the judgments and orders except: (1) We reverse the trial court's order permitting E & B and Secura to recover from Excel the money Federal Insurance Company, Sizzler USA Franchise's insurer, paid to Secura; and (2) We reverse the trial court's order rejecting Sizzler USA Franchise's equitable-indemnity claim against Excel. Part I discusses Excel's appeal; Part II discusses E & B's cross-appeal; and Part III discusses Sizzler USA Franchise's cross-appeal.

¶ 5 The appeal and cross-appeals require that we interpret and apply statutes and contracts. In doing so, our review of what the trial court did is de novo. See Edwards v. Petrone, 160 Wis.2d 255, 258, 465 N.W.2d 847, 848 (Ct.App.1990) (contract); Village of Shorewood v. Steinberg, 174 Wis.2d 191, 201, 496 N.W.2d 57, 61 (1993) (statute). Further, we apply a statute as it is written unless it is constitutionally infirm or its text does not reveal the legislature's intent. See State ex rel. Kalal v. Circuit Court for Dane County, 2004 WI 58, ¶¶ 43–44, 271 Wis.2d 633, 661–662, 681 N.W.2d 110, 123–124. Moreover, ambiguous provisions must be both interpreted and applied so they are consistent with the statute read as a whole. Id., 2004 WI 58, ¶ 46, 271 Wis.2d at 663, 681 N.W.2d at 124. The appeal and cross-appeals also require that we assess the trial court's rulings on evidence and its decisions on scheduling. Our review of those matters is limited to whether the trial court erroneously exercised its discretion. State v. Sullivan, 216 Wis.2d 768, 780, 576 N.W.2d 30, 36 (1998) (Receipt of evidence is vested in the trial court's reasoned discretion.); Hefty v. Strickhouser, 2008 WI 96, ¶ 31, 312 Wis.2d 530, 546–547, 752 N.W.2d 820, 828 (Trial courts have both inherent and statutory discretion to control their dockets.); Teff v. Unity Health Plans Ins. Corp., 2003 WI App 115, ¶ 29, 265 Wis.2d 703, 724, 666 N.W.2d 38, 49 (“trial court has broad discretion in deciding how to respond to untimely motions to amend scheduling orders”). We will sustain a discretionary determination if “the circuit court examined the relevant facts; applied a proper standard of law; and using a demonstrative rational process, reached a conclusion that a reasonable judge could reach.” Sullivan, 216 Wis.2d at 780–781, 576 N.W.2d at 36. Additionally, when more than one analysis supports our decision on the many issues presented by the appeal and cross-appeals, we discuss the dispositive analysis and not others. See Gross v. Hoffman, 227 Wis. 296, 300, 277 N.W. 663, 665 (1938) (only dispositive issue need be addressed).

I.(Appeal by Excel and American Home)

A. Excel's Liability for Consequential Damages.

¶ 6 Excel contends that the trial court erred in not dismissing Sizzler USA Franchise's implied-warranty consequential-damages claims.

¶ 7 Sizzler USA Franchise cross-claimed against Excel seeking, among other things, damages it contended resulted from Excel's breach of Excel's express warranty that Excel's meat would be wholesome and safe. Sizzler USA Franchise also alleged that Excel breached its implied warranties that Excel's meat was merchantable, was fit to be used in the Sizzler restaurants, and was “safe and fit for human consumption.” Sizzler USA Franchise's cross-claim against Excel sought, among other things, “direct, consequential, and incidental damages” suffered by Sizzler USA Franchise as a result of Excel's alleged breach of the warranties.

¶ 8 The express-warranty claim was based on a 1997 document titled “Continuing Guaranty” (uppercasing omitted). The guaranty was between Excel as “Seller” and Sizzler International, Inc., which, as already noted, is the parent company of Sizzler USA Franchise. The guaranty, dated September 22, 1997, provided, as material:

The undersigned, Excel Corporation (Seller), hereby states that each and every article contained in and comprising each shipment or other delivery hereafter made by Seller, to or on the order of Sizzler International, Inc. (Buyer), is hereby guaranteed, as of the date of each such shipment or delivery, to be: 1. Not adulterated or misbranded within the meaning of the Federal Food, Drug and Cosmetic Act, as amended (if applicable).... This Guaranty shall not render Seller liable for any incidental or consequential damages of whatsoever nature nor shall it extend to the benefit of persons or corporations other than Sizzler International, Inc. or its affiliates.

(Bolding omitted, paragraphing altered.) The trial court held on summary judgment that Excel's liability for consequential damages was specifically excluded from this Continuing Guaranty by the last sentence, and dismissed Sizzler USA Franchise's express-warranty claim. It also held, however, that this clause did not affect either Excel's duties under the implied-warranty provisions of Wisconsin's Uniform...