Wisconsin's Court of Appeals Rejects Municipality's "Fee in Lieu of Room Tax"

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Nothing in life might be certain but death and taxes, but a recent decision from Wisconsin’s court of appeals turned out to be an exception to that rule. In Bentivenga v. City of Delavan, No. 2014AP137 (Ct. App. Oct. 15, 2014), District II held that the City of Delavan could not require certain condominium owners to pay what the city called a “fee in lieu of room tax” on units that they owned but chose not to rent out to the public.

Taxing authorities often are loath to give up potential revenue, particularly since so many have seen their tax rolls decline in recent years. So when the developer built the Lodges at Lake Lawn Resort Condominium, the city required the developer to enter into an agreement that any owner of a condominium who chose not to rent the unit to the public would pay a fee to the city “in lieu of the room tax which the City would have otherwise received from the rental of such Unit to the public.” The base fee was $250 per month, with future increases tied to measures of inflation. The purchasers of condos were told of the agreement and that the condo association would collect the fee and forward it to the city. Nevertheless, the owners who chose not to rent their units to the public and paid the fee then sued the city and the condominium association, asking for a refund and arguing that the fee was illegal. The circuit court ruled for the city.

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Seventh Circuit Reminds Attorneys to Conduct “Reasonable Amount of Legal Research” Before Filing Claims

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Under the federal civil rights statutes, plaintiffs who prevail ordinarily receive an award of attorneys’ fees that must be paid by the defendant. But, in order not to deter plaintiffs from filing such claims, the reverse is not true. Indeed, only in rare cases do courts award prevailing defendants their fees: an award is appropriate only where a plaintiff’s claim is frivolous, unreasonable, or without foundation. The Seventh Circuit, in an opinion by Judge Rovner, recently came across just such a case.

In Bluestein v. Central Wisconsin Anesthesiology, Nos. 13-1374, 14-1256 & 14-1257 (7th Cir. Oct. 15, 2014), the plaintiff was a practicing anesthesiologist who, along with 15 other physicians, was a shareholder of Central Wisconsin Anesthesiology. She alleged that she was fired from her position because of a disability and filed suit under the Americans with Disabilities Act. But the ADA, like other Civil Rights Statutes, protects employees, not employers. Because Bluestein had a vote on all major decisions (including the vote to terminate her from the practice), she was not an employee of Central Wisconsin, but rather an owner-employer.

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Violation of OSHA Standards Now More Costly in Wisconsin

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Last week, the Wisconsin Supreme Court resolved its first case of the year. It affirmed, by an equally divided court, the published opinion of the court of appeals in Sohn v. LIRC, 350 Wis. 2d 469. The Wisconsin Court of Appeals had earlier held that an employer was required to make the “penalty” payment under Wis. Stat. § 102.57 to an employee who was injured at work. That statute requires employers to make a payment to injured employees, calculated as 15% of the employee’s worker’s compensation award, and capped at $15,000, when an employer violates safety regulations.

Sohn began when an employee severely injured her hand while cleaning manufacturing equipment, which her employer required her to do while the machines were still running. An investigation revealed that the employer’s practices did not comply with OSHA standards governing safe shut-down procedures for servicing machines. The practices also violated Wisconsin’s Safe Place Statute. An administrative law judge awarded the 15% penalty to the employee, and that decision was affirmed by the LIRC, the circuit court, and the court of appeals.

The two issues for the court of appeals were whether federal law preempted the penalty under § 102.57 and whether Wisconsin’s Safe Place Statute could support the penalty payment. Continue reading this entry

Seventh Circuit Warns Intervenors Not to Sleep on Their Rights

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Vigilantibus non dormientibus, æquitas subvenit.

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It’s an ancient principle of equity, drawn from Roman law: Equity relieves the vigilant, not those who sleep upon their rights. And it sums up quite well the Seventh Circuit’s recent decision in SEC v. First Choice Management Services, Nos. 14-1270 & 14-2284 (Sept. 11, 2014)First Choice did not involve equity (or even cite the maxim); it concerned an untimely motion to intervene. But the principle was the same, and it’s a good lesson for potential intervenors.

The court, in an opinion written by Judge Posner, affirmed the district court’s denial of a motion to intervene as untimely in a receivership proceeding. The proposed intervenor knew that the receiver proposed to sell the property to which the intervenor had an adverse claim six months before the intervenor sought to intervene. Judge Posner and the Seventh Circuit were unwilling to brook that sort of “dawdling,” which created only more work for the receiver, purchaser, and district court.

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Seventh Circuit Uses Fed. R. Civ. P. 60(b)(5) to Reopen 23-Year Old Judgment

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Federal Rule of Civil Procedure 60(b)(5) allows a party to move for relief from a final judgment on the ground that “it prospectively is no longer equitable.” Motions under Rule 60(b)(5) must be made “within a reasonable time” under Rule 60(c)(1), but subsection (c)(1) otherwise sets no firm deadline.

So what is “a reasonable time”? According to the Seventh Circuit’s decision today in Lac Courte Oreilles Band of Lake Superior Chippewa Indians v. State of Wisconsin, it could be as much as 23 years. No. 14-1051 (7th Cir. Oct. 9, 2014).

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