Mueller v. Bull's Eye Sport Shop, LLC, Appeal No. 2020AP978

CourtCourt of Appeals of Wisconsin
PartiesTYLER A. MUELLER AND LINDSEY MUELLER, PLAINTIFFS-INTERVENING RESPONDENTS, v. BULL'S EYE SPORT SHOP, LLC AND THE CINCINNATI INSURANCE COMPANY, DEFENDANTS-THIRD-PARTY PLAINTIFFS-APPELLANTS, v. JORDAN M. MUELLER AND AMERICAN MODERN PROPERTY AND CASUALTY INSURANCE COMPANY, THIRD-PARTY DEFENDANTS-RESPONDENTS.
Docket NumberAppeal No. 2020AP978
Decision Date29 April 2021

TYLER A. MUELLER AND LINDSEY MUELLER, PLAINTIFFS-INTERVENING RESPONDENTS,
v.
BULL'S EYE SPORT SHOP, LLC AND
THE CINCINNATI INSURANCE COMPANY, DEFENDANTS-THIRD-PARTY PLAINTIFFS-APPELLANTS,
v.
JORDAN M. MUELLER AND AMERICAN MODERN PROPERTY AND
CASUALTY INSURANCE COMPANY, THIRD-PARTY DEFENDANTS-RESPONDENTS.

Appeal No. 2020AP978

STATE OF WISCONSIN IN COURT OF APPEALS DISTRICT IV

April 29, 2021


NOTICE

This opinion is subject to further editing. If published, the official version will appear in the bound volume of the Official Reports.

A party may file with the Supreme Court a petition to review an adverse decision by the Court of Appeals. See WIS. STAT. § 808.10 and RULE 809.62.

Cir. Ct. No. 2018CV81

APPEAL from an order of the circuit court for Clark County: LYNDSEY BRUNETTE, Judge. Affirmed.

Before Fitzpatrick, P.J., Blanchard, and Graham, JJ.

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¶1 FITZPATRICK, P.J. Tyler Mueller was injured while hunting when a gun he was holding discharged. The gun was owned by Tyler's brother, Jordan Mueller.1

¶2 Tyler brought this lawsuit against Bull's Eye Sports Shop, the business that assembled the gun and sold it to Jordan, based on Bull's Eye's alleged negligence. Bull's Eye brought a third-party claim against Jordan, and Tyler later brought a claim against Jordan, both alleging that Jordan's negligence caused Tyler's injuries.

¶3 Jordan was immediately aware of the incident in which Tyler was injured and later became aware of potential litigation regarding the gun and Tyler's injuries. Nevertheless, after becoming aware of potential litigation, Jordan had the gun materially altered, and a part of the gun is still missing. Both Tyler and Bull's Eye brought motions in the circuit court asking that Jordan be sanctioned for his spoliation of the gun evidence.2 Prior to the circuit court ruling on those motions, Tyler and Jordan entered into a Pierringer release, and Jordan was dismissed from this action based on the terms of that release.3 The circuit court found that Jordan intentionally spoliated evidence regarding the gun. As a sanction for those intentional acts of Jordan, the circuit court ordered that, at the

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trial in this case, the jury will receive an instruction from the court stating that the jury may draw an adverse inference against Jordan regarding that spoliated evidence.

¶4 Bull's Eye appeals and makes two primary arguments. First, Bull's Eye contends that the circuit court erred in deciding which sanction to impose against Jordan for his spoliation of the gun evidence. Bull's Eye argues that the circuit court should have dismissed Tyler's claims against it as a sanction for Jordan's spoliation of evidence. We reject Bull's Eye's argument and conclude that the circuit court did not erroneously exercise its discretion in selecting the spoliation inference instruction as the sanction. Second, Bull's Eye argues that Tyler's claim against Bull's Eye must be dismissed based on the following chain of propositions advanced by Bull's Eye. Indemnity principles require that, based on Jordan's intentional spoliation of evidence, Jordan must indemnify Bull's Eye for any negligent conduct of Bull's Eye that caused Tyler's injuries. By operation of the Pierringer release between Tyler and Jordan, Jordan's intentional conduct in spoliating evidence is imputed to Tyler, which in turn requires that Tyler indemnify Bull's Eye for any negligent conduct of Bull's Eye that caused Tyler's injuries. As a result, according to Bull's Eye, Tyler's claim against Bull's Eye must be dismissed. We reject Bull's Eye's argument because, under these circumstances, Jordan does not owe an indemnity obligation to Bull's Eye based on his intentional spoliation of evidence.

BACKGROUND

¶5 The following material facts are not in dispute.

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¶6 Tyler was injured in November 2017 when the AR-15 he was carrying while hunting accidently discharged multiple times.4 Tyler was struck in the foot and sustained substantial injuries.

¶7 Jordan purchased the AR-15 from Bull's Eye. In addition to selling the rifle, Bull's Eye also assembled the rifle prior to purchase.

¶8 Immediately following the shooting accident, the AR-15 was taken into possession by law enforcement. The gun was returned to Jordan in January 2018. In February 2018, Jordan took the gun to Bull's Eye. Prior to that time, and as discussed later in this opinion, Jordan received communications from Tyler indicating that litigation regarding the gun and Tyler's injuries was likely. A Bull's Eye employee who inspected the AR-15 made material changes to the gun with Jordan's permission.5 A retention plate installed in the gun by Bull's Eye has since gone missing.

¶9 In May 2018, Tyler6 brought this lawsuit against Bull's Eye and its liability insurer, Cincinnati Insurance Company,7 alleging that Bull's Eye's negligence was a cause of the injuries Tyler suffered as a result of the shooting

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accident. Bull's Eye brought a third-party complaint against Jordan alleging that Jordan's negligence "caused or contributed to the injuries and damages alleged by ... Tyler." In an amended complaint, Tyler realleged the allegations set forth in his original complaint against Bull's Eye, and also stated a claim against Jordan and Jordan's liability insurer, American Modern Property and Casualty Insurance Company, asserting that Jordan's negligence was a cause of Tyler's injuries.8

¶10 Tyler and Bull's Eye filed separate motions in the circuit court requesting sanctions against Jordan for spoliating the gun evidence. Each alleged that, even though Jordan knew that the condition of the AR-15 at the time of the shooting accident would be a central issue in litigation, Jordan manipulated the AR-15 after the shooting accident, had Bull's Eye make material changes to the gun, and is responsible for critical evidence now missing. Bull's Eye requested in that motion that, as a potential sanction for Jordan's spoliation of evidence, the circuit court should read to the jury at trial the standard instruction on spoliation of evidence which instructs the jury that it may, but is not required to, infer that a party spoliated evidence because such evidence is unfavorable to that party.9

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¶11 About one month after Tyler and Bull's Eye filed those motions, the circuit court and Bull's Eye were notified that Tyler and Jordan had entered into a Pierringer release in exchange for Jordan's insurer paying Tyler its policy limits of $300,000. As noted, a Pierringer release "operates to impute to the settling plaintiff [(here, Tyler)] whatever liability in contribution the settling defendant [(here, Jordan)] may have to non[-]settling defendants [(here, Bull's Eye)], and to bar subsequent contribution actions the non[-]settling defendants might assert against the settling defendants." Fleming v. Threshermen's Mut. Ins. Co., 131 Wis. 2d 123, 131, 388 N.W.2d 908 (1986) (citing Pierringer v. Hoger, 21 Wis. 2d 182, 193, 124 N.W.2d 106 (1963)). In addition, in a Pierringer release, the settling plaintiff is generally limited in his or her recovery from a non-settling defendant to the unsatisfied portion of the damages; that is, the part of the damages attributable to the non-settling defendant. Swanigan v. State Farm Ins. Co., 99 Wis. 2d 179, 197-98, 299 N.W.2d 234 (1980).

¶12 Approximately one month after Tyler and Jordan entered into the Pierringer release, Bull's Eye filed a supplemental motion for sanctions against Jordan. Bull's Eye alleged in that motion that, in addition to the spoliation of the AR-15 described in its previous motion, Jordan also spoliated cell phone data and records. In that supplemental motion, Bull's Eye requested that the circuit court grant the sanctions it requested in its previous motion, including the spoliation

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inference instruction. Further, Bull's Eye requested relief based on the operation of the Pierringer release. More particularly, Bull's Eye requested that the circuit court grant "judgment against [Jordan] and in favor of [Bull's Eye] on [Bull's Eye's] Third-Party Complaint," which, according to Bull's Eye, then "entitl[ed] [Bull's Eye] to dismissal of all of [Tyler's] claims against [Bull's Eye] pursuant to the Pierringer Release entered into by [Tyler]."

¶13 Later, the circuit court:

• Dismissed all claims against Jordan, including Bull's Eye's third-party complaint against Jordan, based on the Pierringer release, and did not grant Bull's Eye's request to dismiss Tyler's claims against it based on operation of the Pierringer release.

• Found that Jordan engaged in the intentional spoliation of the gun evidence; as a sanction for that spoliation, the circuit court granted Bull's Eye's request that, at trial, the jury be read the spoliation inference instruction, and denied all other requests for sanctions.10

¶14 Bull's Eye appealed the orders of the circuit court, which are final as to Jordan, and named Jordan as the sole respondent in this appeal. We granted Tyler's request to participate in this appeal. See WIS. STAT. RULE 809.13 (2019-

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20)11 (providing the court of appeals may permit intervention in an appeal based on the criteria for intervention in the circuit court); Helgeland v. Wisconsin Muns., 2008 WI 9, ¶120, 307 Wis. 2d 1, 745 N.W.2d 1 (stating permissive intervention is appropriate "when the movant's claim or defense and the main action have a question of law or fact in common").

¶15 We mention other material facts in the following discussion.

DISCUSSION

¶16 Bull's Eye argues that the circuit court erred because it did not dismiss Tyler's claims against Bull's Eye as a sanction for Jordan's intentional spoliation of the gun evidence. Bull's Eye also argues that, based on the operation of the Pierringer release entered into by Tyler and Jordan, the intentional spoliation conduct of Jordan is imputed to Tyler and, as a result, Tyler's claim against Bull's Eye must be dismissed based on principles of indemnification. We address each argument in turn.

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