Rampant Sexual Misconduct in Indiana Prison Shows Pitfalls for Employers

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“Connie J. Orton-Bell was employed as a substance abuse counselor at a maximum security prison in Indiana. An investigator, who had been looking for security breaches, discovered that night-shift employees were having sex on Orton-Bell’s desk and informed her. That investigator told her that he was not concerned about night-shift staff having sex but suggested she should probably wash off her desk every morning.”

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Believe it or not, this is not a scene from the new season of Orange is the New Black. It’s actually the opening lines from Orton-Bell v. Indiana, No. 13-1235 (7th Cir. July 21, 2014), an opinion authored by Judge Manion, and one of the more entertaining Seventh Circuit opinions in recent memory.

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Wisconsin Supreme Court’s Decision in Associated Bank N.A. v. Collier Changes the Rules for Collecting Judgments

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In Wisconsin, supplemental proceedings under Wis. Stat. ch. 816 are the principal tool by which a judgment creditor can discover assets of the judgment debtor in aid of collection. But for the last 15 years, they have also been the mechanism by which sophisticated judgment creditors have obtained a lien in all the personal property of the judgment debtor, simply by serving the debtor with an order to appear before a court commissioner for examination. This was the holding of In re Badger Lines, Inc., 224 Wis. 2d 646, 590 N.W.2d 270 (1999)—that a judgment creditor need not take any additional steps to perfect a so-called receiver’s lien beyond serving the debtor. Badger Lines seemed to some observers at the time to represent a faulty policy choice by the court, in favor of the creation of overbroad secret liens. That had been the conclusion of Bankruptcy Judge James Shapiro in a scholarly analysis reported at 199 B.R. 934 (Bankr. E.D. Wis. 1996) that the Supreme Court rejected in answering a certified question from the Seventh Circuit. But the 1999 decision recorded no dissent.

All that has changed with the Supreme Court’s latest foray into the subject last week, in Associated Bank N.A. v. Collier, 2014 WI 62.

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The Doctrine of Equitable Assignment is Alive and Well in Wisconsin

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That was the holding of the Wisconsin Supreme Court in an opinion issued on Thursday in Dow Family, LLC v. PHH Mortgage Corporation, 2014 WI 56. The facts of the case are similar to thousands of foreclosure cases prosecuted in Wisconsin every year, but with a couple of interesting twists, which we summarized in a prior post. Essentially, in 2009 the owner of the property, Dow Family, LLC, had relied on the sellers’ inaccurate representations that a mortgage had been satisfied. When PHH Mortgage sought to foreclose that mortgage, Dow looked for ways to contest the foreclosure.

Only one of Dow’s arguments caught the Supreme Court’s attention. When PHH commenced the foreclosure, the mortgagee of record was MERS, as nominee for U.S. Bank, the original lender. Dow contended that PHH could not foreclose because the mortgage had not been formally assigned to it. PHH relied on the doctrine of equitable assignment.

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Wis. Supreme Court Accepts New Case: When Are Covenants Not to Compete Illusory for At-Will Employees?

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Last month, the Wisconsin Supreme Court accepted the Court of Appeals’ certification in Runzheimer Int’l, Ltd. v. Friedlen, No. 13AP1392 (Apr. 15, 2014). The intermediate appellate court had certified the following question: “Is consideration in addition to continued employment required to support a covenant not to compete entered into by an existing at-will employee?”

This case arises out of a dispute over a covenant not to compete entered into between an employer and an at-will employee 20 years after the employment relationship began. Two years after the covenant was entered, the employer fired the employee.  The employee then began working for the former employer’s competitor.

Continued at-will employment was the only consideration that the employer provided the employee in exchange for the covenant.

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A Jurisdictional Twist: 7th Cir. Holds That District Court Had Supplemental Jurisdiction Over Federal Claim and Original Jurisdiction Over State Claim

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There’s nothing inherently unique about the substantive issues in Burzlaff v. Thoroughbred Motorsports, Inc., No. 13-2520 (July 10, 2014), a decision released yesterday by the Seventh Circuit. The plaintiff, Ronald Burzlaff, purchased what he alleged was a defective “Stallion” motorized tricycle from Thoroughbred Motorsports and then brought claims against Thoroughbred under the federal Magnuson-Moss Warranty Act, 15 U.S.C. § 2301 et seq., and Wisconsin’s Lemon Law, Wis. Stat. § 218.0171. A jury found for him on both claims.

But the case contains a unique jurisdictional twist—one that the Seventh Circuit (in an opinion written by Judge Hamilton) described as “turn[ing] the usual pattern of supplemental jurisdiction on its head.” Slip Op. 5. Oddly enough, given the facts of the case, the district court did not have original jurisdiction for the federal claim under the Magnuson-Moss Warranty Act, but did have original jurisdiction over the state-law claim under Wisconsin’s Lemon Law. It then exercised its supplemental jurisdiction—appropriately, the Seventh Circuit held—over the federal claim.

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