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2010AP878 Wisconsin Public Service Corp. v. Arby Construction, Inc.

By: WISCONSIN LAW JOURNAL STAFF//April 21, 2011//

2010AP878 Wisconsin Public Service Corp. v. Arby Construction, Inc.

By: WISCONSIN LAW JOURNAL STAFF//April 21, 2011//

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Civil Procedure
Claim preclusion

Where an affirmative defense in a prior action is the functional equivalent of a cross-claim, claim preclusion can be applied in a subsequent action between parties who were both defendants in the prior action.

“AEGIS’s argument that none of the three elements of claim preclusion are met is based on the form of the pleading as an affirmative defense against Brooks in the prior action. According to AEGIS, there is no identity of parties because the affirmative defense was pled against Brooks, not Arby; the cause of action is not identical because an affirmative defense is not a cause of action; and the order for dismissal in the Brooks action was not a final judgment on the merits of AEGIS’s claim for contract indemnification from Arby because AEGIS never asserted that as a cross-claim against Arby.”

“However, if we look at the substance of AEGIS’s affirmative defense in the prior action, it is not an affirmative defense against Brooks. Although AEGIS does not expressly concede this, it does not present any argument to the contrary. An affirmative defense is ‘“a defendant’s assertion raising new facts and arguments that, if true, will defeat the plaintiff’s or prosecution’s claim even if all allegations in the complaint are true.”’ State v. Watkins, 2002 WI 101, ¶39, 255 Wis. 2d 265, 647 N.W.2d 244 (emphasis omitted) (quoting Black’s Law Dictionary 430 (7th ed. 1999)). Assuming it is true that Arby is obligated to indemnify WPS and its insurers under the terms of the agreement, that obligation does not defeat Brooks’ negligence claims against WPS and AEGIS as WPS’s insurer. Indeed, Arby’s obligation to indemnify does not affect at all the liability of WPS and AEGIS to Brooks. Rather, if we look at the substance of AEGIS’s affirmative defense, it is a claim against Arby and its insurers for indemnification for any damages for which WPS and its insurers are liable to Brooks. Thus, the substance of AEGIS’s affirmative defense in the prior action asserts the same claim against Arby that AEGIS now asserts in this action.”

Affirmed.

Recommended for publication in the official reports.

2010AP878 Wisconsin Public Service Corp. v. Arby Construction, Inc.

Dist. III, Brown County, Zuidmulder, J., Vergeront, J.

Attorneys: For Appellant: Terwilliger, W. Thomas, Wausau; Westgate, Cassandra B., Wausau; For Respondent: Graupner, Charles P., Milwaukee; Priebus, Reince R., Milwaukee; Kastens, Aaron H., Milwaukee

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