Specific Performance – Equities
Beidel v. Sideline Software Inc., 2013 WI 56 (filed 2 July 2013)
Holding: In granting specific performance, a court must balance the equities between the parties, including considerations of good faith and fair dealing.
Beidel and Hall started Sideline, a software company that served fantasy football followers. Beidel and Hall entered into a stock repurchase agreement, to be used in case of a falling out. The agreement set a stipulated stock price, to be in effect for two years; and also provided for a “put option” at the same price. The stipulated stock price was substantially greater than (six times) the fair market value of Sideline stock.
Beidel contended that Sideline planned to fire him as soon as the period for the stipulated price expired (see ¶ 4). Sideline “asserts that it was free to time the termination as it saw fit” (¶ 5). The circuit court granted partial summary judgment in Sideline’s favor, viewing the case as one of constructive termination and specific performance. The court of appeals reversed, ruling that the circuit court must balance the equities regarding specific performance, which had not fully occurred. See 2012 WI App 36.
edu daniel.blinka marquette Prof. Daniel D. Blinka, U.W. 1978, is a professor of law at Marquette University Law School, Milwaukee.
edu thomas.hammer marquette Prof. Thomas J. Hammer, Marquette 1975, is a law professor and Director of Clinical Education at Marquette University Law School, Milwaukee.
The supreme court affirmed in an opinion written by Justice Crooks. As a threshold question, the court held that specific performance was available because the parties’ agreement provided for that remedy (see ¶ 24). When considering specific performance, the court must first find whether there is a “substantial enough breach to warrant” the remedy (¶ 26). Considerations include “the covenant of good faith and fair dealing” (¶ 27). The “heart of the matter” is, however, “the ‘balancing of the equities’ in which it takes into consideration all the facts and circumstances and determines whether the plaintiff is entitled to the equitable relief he seeks” (¶ 30).
In this case, Sideline had not shown that it was entitled to summary judgment on this claim. None of Sideline’s “assertions are inconsistent with Beidel’s theory that Sideline unfairly refused to purchase his shares at the stipulated price after delaying his termination for that express purpose. Because the summary judgment motion does not show a defense that would defeat the equitable claim, it does not make a prima facie case. The analysis ends there, and the motion fails” (¶ 37). The court also addressed how the doctrines of constructive termination and the covenant of good faith and fair dealing are likely to affect that claim on remand. The court’s holding is succinctly summarized at paragraph 50.
Justice Ziegler concurred, joined by Justice Roggensack. The concurrence focuses on the meaning of the term “termination” in the agreement.
Justice Gableman dissented on grounds that the majority’s opinion “overturns thirty years of precedent, and inverts the employer-employee relationship” (¶ 65).
Justice Prosser did not participate in this case.
Guarantees – Derivative Claims
Park Bank v. Westburg, 2013 WI 57 (filed 3 July 2013)
Holding: Parties who personally guaranteed payment of a bank loan could not raise various counterclaims that were derivative of claims by the corporate debtors.
The Westburgs opened a business by creating two corporate entities, one to run the business operations and the other to hold title to property (real estate). Park Bank funded their purchase of a failing woodcraft business but required that the Westburgs execute two guarantees of payment, one for each corporation. The venture fell on hard times, resulting in a foreclosure action against the holding company. Park Bank brought this action against the Westburgs seeking payment of nearly $1.4 million under the guarantees. The Westburgs responded with counterclaims and defenses, which are the core of this case. The circuit court granted summary judgment in favor of Park Bank. The court of appeals affirmed in an unpublished decision.
The supreme court affirmed in an opinion authored by Justice Bradley. First, the Westburgs, as guarantors, had no standing to allege counterclaims that are derivative of the corporation (see ¶ 51). The court discussed case law about the status of guarantors, who “are treated no differently from creditors in determining whether the guarantor may bring a derivative action” (¶ 50).
Turning to the record, the court held that all but one of the Westburgs’ counterclaims were derivative because they alleged injuries that were “secondary” to those of the two corporate entities. One counterclaim, however, alleged that Park Bank had unlawfully denied the Westburgs access to their personal account when the bank froze it while trying to work out matters.
“However, even if Park Bank unlawfully had denied access to the personal account, Park Bank is still entitled to summary judgment on that counterclaim because the Westburgs claim damages based upon their investment losses to Zaddo and not based upon Park Bank’s denial of access to their personal account. Each and every category of damages claimed by the Westburgs arises from their losses as guarantors, investors, and officers of Zaddo” (¶ 54).
The supreme court then took up a raft of affirmative defenses. Important here was the distinction between a guaranty of payment (the Westburgs’) and a guaranty of collection. “In pleading their affirmative defenses, the Westburgs do not assert that payment is not due or that Zaddo was not the subject of a bankruptcy or insolvency proceeding. Rather, they assert defenses that address whether Zaddo and Zaddo Holdings are in default on their debts. Park Bank need not re-litigate the previous proceedings in order to demand payment under the guaranties. Instead, it must show only that payment is due or that a debtor was the subject of a bankruptcy or insolvency proceeding” (¶ 64). Park Bank made the required showing based on the summary judgment record (see ¶ 65).
Justice Roggensack concurred in the judgment, joined by Justice Ziegler and Justice Gableman. The concurrence parted ways with the majority on some points related to respective rights and obligations of shareholders and guarantors.
Misrepresentations – Puffery – Economic Loss
United Concrete & Constr. v. Red-D-Mix Concrete, 2013 WI 72 (filed 12 July 2013)
Holdings: Alleged misrepresentations raised an issue for trial under Wis. Stat. section 100.18 and were not “puffery,” but the economic loss doctrine precluded claims asserted through homeowners’ assignments by the contractor against the concrete supplier.
A complaint alleged that a concrete supplier, Red-D-Mix, supplied defective concrete to a contractor, United, which resulted in damage to multiple homeowners. United obtained assignments of rights from the homeowners and sued Red-D-Mix for, among other things, misrepresenting that it had resolved earlier problems with its concrete. The circuit court granted summary judgment to Red-D-Mix under the economic loss doctrine. In an unpublished decision, the court of appeals reversed.
In an opinion written by Justice Gableman, the supreme court found “no error” in the court of appeals’ decision that United was entitled to a trial but found “several errors in its analysis” (¶ 11). Accordingly, the court affirmed in part, reversed in part, and remanded the case.
First, the court refused to consider Red-D-Mix’s claim that United was not a “member of the public” for purposes of a misrepresentation claim under Wis. Stat. section 100.18. Red-D-Mix neglected to raise this issue in its petition for review (see ¶ 16). Second, Red-D-Mix’s alleged misrepresentation that it had remedied earlier problems with its concrete did not constitute nonactionable “puffery” (see ¶ 26). The court also clarified that whether puffery is an issue of fact or law will turn on the context (see ¶¶ 34, 37).
Third, United’s claims through the homeowners’ assignments are impermissible under case law on economic loss doctrine (see ¶¶ 48, 52). Fourth, as to claims in United’s own name, the damages issue was properly one for trial, although the supreme court reversed the court of appeals’ “premature” assessment of the legal significance of the assignments, which was also left for trial (see ¶ 57).
Concurring, Chief Justice Abrahamson, joined by Justice Bradley and Justice Crooks, agreed with the court of appeals’ opinion. The concurrence also read United’s complaint as not asserting any claims through the homeowners’ assignments.
Garnishments – Legal Entities
Paul Davis Restoration of S.E. Wis. Inc. v. Paul Davis Restoration of Ne. Wis., 2013 WI 49 (filed 4 June 2013)
Holding: An otherwise valid judgment can be enforced against a legal entity when the judgment is entered against the name under which the legal entity does business.
Two franchises (hereinafter Southeast and Northeast) clashed over disputed territory. In binding arbitration, the panel awarded Southeast approximately $100,000 damages against Northeast. Without objection, a circuit court entered judgment against Northeast. Northeast was the name under which EA Green Bay LLC did business. Nonetheless, EA Green Bay opposed a subsequent garnishment action “on grounds that the judgment, entered against only Northeast, the name under which it did business, was unenforceable” (¶ 2). The circuit court ruled that the judgment against Northeast was enforceable against EA Green Bay. The court of appeals reversed in an unpublished opinion.
The supreme court reversed the court of appeals in an opinion authored by Justice Crooks. Wisconsin case law had yet to address the following precise question: “whether an otherwise valid judgment can be enforced against a legal entity when the judgment is entered against the name under which the legal entity does business” (¶ 4).The court closely examined three earlier Wisconsin cases that collectively stand for the principle “that the name under which a person or corporation does business is indistinct from the underlying legal entity” (¶ 20)
A “majority of courts from other jurisdictions confronted with similar cases in which a judgment debtor challenges the enforceability of a judgment against an entity using a name under which an entity does business have reached the same conclusion we reach in this case” (¶ 22). In sum, the garnishment was properly brought against a bank account belonging to EA Green Bay, because it did business as Northeast (see ¶ 25).
Justice Roggensack, joined by Justice Ziegler, concurred on grounds that Northeast’s “prior inconsistent representations” to the circuit court judicially estopped it from asserting that because Northeast is not a legal entity, the judgment is not enforceable.
Theft by Fraud – Theft of Electricity
State v. Steffes, 2013 WI 53 (filed 20 June 2013)
Holding: The defendant committed theft by fraud when he and others obtained telephone services without paying for them after furnishing AT&T with fraudulent information.
While in prison, defendant Steffes and other individuals obtained more than $28,000 of phone services from AT&T through a scheme that involved furnishing the company with fraudulent information. Steffes and his cellmate – with the help of friends and family members outside of prison – submitted fictitious business names and stolen personal identifying information to AT&T to set up phone numbers. Steffes would then make collect calls to these numbers with the knowledge the calls would never be paid for. Typically, once it was clear that a phone bill was not going to be paid, AT&T would shut down the number. Steffes and the other individuals would then set up a new telephone number. Over an 18-month period, Steffes made 322 phone calls, free of charge.
Steffes was convicted of two counts of conspiracy to commit theft by fraud of property in excess of $10,000. In a published decision, the court of appeals affirmed the convictions. See 2012 WI App 47. In a majority decision authored by Justice Gableman, the supreme court affirmed the court of appeals.
The first issue before the supreme court was whether submitting fictitious business names and stolen personal identifying information is a “false representation” under the theft-by-fraud statute. See Wis. Stat. § 943.20(1)(d). Steffes alleged that such conduct is not a false representation because the statute requires that the actor make an express promise to pay.
The supreme court disagreed. “[W]e hold that Steffes made ‘false representations’ to AT&T. The theft-by-fraud statute says that ‘“[f]alse representation” includes a promise made with intent not to perform if it is part of a false and fraudulent scheme.’ Wis. Stat. § 943.20(1)(d) (emphasis added). Because the word ‘includes’ is not restrictive, the statute clearly anticipates that other conduct aside from an express promise falls under the umbrella of a ‘false representation.’ The scope and history of the theft-by-fraud statute make plain that providing fictitious business names and stolen personal identifying information to a phone company as a way of avoiding payment falls within the meaning of ‘false representation’” (¶ 32).
The second issue before the court was whether the applied electricity that AT&T uses to power its network is included within the definition of property in Wis. Stat. section 943.20(2)(b). Steffes argued that his conviction cannot be sustained because the evidence at trial showed that he stole telephone services, not property. In the theft-by-fraud statute, property is defined as “all forms of tangible property, whether real or personal, without limitation including electricity, gas and documents which represent or embody a chose in action or other intangible rights.” Wis. Stat. § 943.20(2)(b) (emphasis added).
Relying on the plain language of the statute in conjunction with commonly used dictionaries, the majority concluded that “Steffes stole electricity from AT&T. AT&T purchases and stores electricity to power its network. When consumers make phone calls, AT&T must buy more electricity. The conspiracy perpetrated against AT&T therefore deprived the company of its property” (¶ 33).
Chief Justice Abrahamson filed a dissenting opinion that was joined by Justice Bradley.
Search and Seizure – Consent Search – Third-Party Authority
State v. Sobczak, 2013 WI 52 (filed 20 June 2013)
Holding: Entry of a home and search of a computer found within the home were properly authorized by a person who had third-party authority to consent to the entry and search.
Three months after Sobczak and P. began dating, Sobczak invited P. to spend the weekend at his parents’ home (where Sobczak also lived) while the parents were away on vacation. P. arrived on Friday. On Saturday afternoon, Sobczak went to work, leaving P. alone in the house. P. asked Sobczak for permission to use his personal laptop to occupy herself in his absence. He assented. While using the laptop, P. encountered a video file that appeared to show girls engaging in sexual behavior. She further observed four or five other videos with file names that suggested to her that they might contain child pornography, but she did not open any of them. P. then called her grandmother and asked her to call the police, which the grandmother promptly did.
A police officer, Dorn, came to the home and asked P. if he could enter the residence, and she answered in the affirmative. He then accompanied her into the living room. Once inside, Dorn informed P. that he would have to look at the video. P. agreed to help him do so. She found the video on the computer, which had been sitting on the living room couch. P. pressed a button to begin playing the video, and Dorn watched it. Dorn also briefly looked at a few of the other videos that had aroused P.’s suspicions and then called his supervisor for guidance. The supervisor instructed Dorn to bring the laptop to the station, and he complied.
Sobczak was arrested and charged with possession of child pornography. He filed a motion to suppress the seized evidence on the ground that it was taken in violation of his Fourth Amendment rights. The circuit court denied the motion to suppress, concluding that P. validly consented to Dorn’s entry and search. In a published opinion, the court of appeals affirmed. See 2012 WI App 6. In a majority decision authored by Justice Gableman, the supreme court affirmed the court of appeals.
First, the supreme court concluded that P. had actual authority to admit the officer into the home and its living room (see ¶ 22). Facts supporting this conclusion include the following: 1) P. had been Sobczak’s girlfriend for three months and this relationship with him imbued her with more authority than she would otherwise have vis-à-vis her partner and his home (see id.); 2) Sobczak encouraged P. to spend an evening alone in the home and placed no restrictions on her use of the home (see ¶ 23); and 3) the length of P.’s weekend invitation distinguished her stay from the far briefer stays that have occasioned judicial rejection of claims of authority to grant consents to search (see ¶ 24).
“Ultimately, we believe society would expect a girlfriend of three months, left alone in a home and given unrestricted access to the common areas of the home, to enjoy the authority to invite guests in to those common areas, even with potentially deleterious consequences to her boyfriend” (¶ 25).
The court further concluded that the officer’s search of the laptop was also performed after valid consent. “The question of whether [P.] had sufficient access or control of the laptop for most purposes such that she was constitutionally entitled to allow Officer Dorn to search it is a far easier one than the question regarding his entry into the home. Undisputedly, [P.] was explicitly granted permission by Sobczak to use the laptop, and the record contains no intimations of Sobczak placing any parameters on that use. Moreover, [P.] used the computer in a common area of the house – the living room – which is where Officer Dorn conducted the search. It is also relevant that Officer Dorn opened only those files to which [P.] had called his attention; a more searching examination of the machine occurred only after a search warrant was obtained. No one involved in the case has ever averred that the files inspected upon [P.’s] consent were password protected, and it is consequently safe to assume that they were accessible to anyone using the laptop. We therefore have no difficulty in saying that [P.] was authorized to consent to Officer Dorn’s search of the laptop” (¶ 31).
Justice Ziegler joined the majority opinion but also submitted a concurring opinion. Chief Justice Abrahamson filed a dissenting opinion that was joined by Justice Bradley. Justice Prosser did not participate in this case.
Probation – Self-Incrimination
State v. Sahs, 2013 WI 51 (filed 18 June 2013)
Holding: An individual questioned by his probation agent should have exercised his right to silence because the right was not “self-executing” under the circumstances.
While on probation for possessing child pornography, Sahs made incriminating statements about an additional incident of such possession. The statements were made to his probation agent and during a polygraph test. Sahs claimed that the statements were involuntary and that their use against him violated his right against self-incrimination. The circuit court rejected his argument, and the court of appeals affirmed in an unpublished decision.
The supreme court affirmed in an opinion written by Chief Justice Abrahamson. The defendant’s statements were “clearly testimonial and incriminating” (¶ 5). The “critical issue” was whether “the probationer must claim the privilege or whether the situation gives rise to a self-executing privilege” (¶ 41). Case law has recognized that one such self-executing situation “occurs when a probationer must answer questions that require him to choose between making incriminating statements and jeopardizing his conditional liberty by remaining silent” (¶ 43).
The record failed to demonstrate that the defendant was in such a position. The defense did not prove the existence of any probation form or rule that essentially compelled him to disclose the child pornography to his probation officer or face sanctions for his silence. “The case law establishes that the mere requirement on a probationer to appear and speak ‘truthfully to his or her probation (or parole) officer is insufficient to establish compulsion’” (¶ 55).
“In the present case, there is no evidence that the State, either expressly or by implication, told the defendant that his refusal to speak to his probation agent or his invocation of his privilege against self-incrimination would lead to the revocation of his probation” (¶ 58). Nor did the evidence show that he was compelled to take a polygraph test (see ¶ 64).
Justice Roggensack concurred but wrote separately “to confirm” that the majority’s holding rests on the federal constitution, not the Wisconsin Constitution. She also offered her own analysis relating to probationers and the Fifth Amendment right.
Shiffra Doctrine – Record Production – Testimony
State v. Johnson, 2013 WI 59 (filed 3 July 2013)
Holding: The circuit court could not require production of privately held, privileged mental-health records of an alleged victim who is a minor; on remand, the alleged victim may be called to testify.
Johnson is charged with sexually assaulting a child, his stepdaughter. This interlocutory appeal involves a Shiffra issue. See State v. Shiffra, 175 Wis. 2d 600, 499 N.W.2d 719 (Ct. App. 1993) (adopting procedure for defendant to obtain in camera inspection of alleged victim’s mental-health-treatment records). The court of appeals affirmed in part and reversed in part the circuit court’s order.
The supreme court issued a short per curiam opinion that contains terse holdings but no extended discussions. First, a majority held that Shiffra should not be overruled. Second, a majority also concluded that Johnson met his initial burden of showing materiality, entitling him to an in camera review of the victim’s privately held treatment records.
The third issue concerned whether the victim should be precluded from testifying if she refuses to produce those records. The court reached a conclusion on this issue but did not agree on a rationale. “Under varying rationales, Chief Justice Abrahamson, Justice Bradley, Justice Roggensack, and Justice Ziegler agree that in this case, the privilege-holder may testify and need not produce the records” (¶ 4).
In light of its resolution of the third issue, the supreme court determined as follows: “First, under varying rationales, a majority of the court concludes that in this case, the circuit court may not require production of the privately-held, privileged mental health records for in camera review. Second, under varying rationales, a majority of the court concludes that the privilege-holder may testify in this case. Although there is a majority regarding each issue presented, we limit our writing because of the varied rationales” (¶¶ 6-8).
“Upon remand, the circuit court may not require production of the privately-held, privileged mental health records for in camera review. However, upon remand, the privilege-holder may be called to testify in this case” (¶ 9).
Presentence Investigation Reports – Authority of Courts to Order Destruction of PSI
State v. Melton, 2013 WI 65 (filed 11 July 2013)
Holding: Circuit courts do not have inherent authority to order the destruction of presentence investigation (PSI) reports.
Defendant Melton pleaded guilty to two felonies and the circuit judge requested that the Wisconsin Department of Corrections prepare a “PSI report” to assist the court in Melton’s sentencing. When the circuit court and the parties received the PSI report, Melton disputed some of the information it contained. The judge ordered that a second PSI report be prepared omitting the disputed information. He also ordered that the first PSI report be sealed and then destroyed following the expiration of any appellate time limits.
A successor judge on the case modified the destruction order after Melton was sentenced and ordered that the first PSI report be sealed but not destroyed because he questioned the court’s authority to remove a court document from the file and destroy it. Melton appealed and the court of appeals reversed, holding in a published decision that the circuit court had the inherent authority to order the destruction of the first PSI report. See 2012 WI App 95.
In a majority opinion authored by Justice Prosser, the supreme court reversed the court of appeals. The issue before the supreme court was whether a circuit court has inherent authority to order the physical destruction of a PSI report.
The supreme court concluded that “courts do not have either express or implied statutory authority to order the destruction of PSIs. The PSI statute, the administrative code, and Supreme Court Rules on record retention implicate principles of preservation and confidentiality, not destruction. We also conclude that courts lack the inherent authority to order the destruction of PSIs on the facts before us or on any of the arguments Melton has made because such power is not necessary to a court’s efficient and effective administration of justice. A court has adequate means of dealing with errors, omissions, or prejudicial material in a PSI without physically destroying the disputed report. A court can strike or redact objected-to portions of a PSI and make a record that the court will not use the objected-to information. In unusual cases, a court can order that a corrected PSI be prepared, and it can seal and clearly label the superseded report” (¶ 80).
[Editors’ Note: To forestall further confusion on the issue and mitigate the possibility of error, the court outlined procedures that should be followed when the bench and bar are confronted with disputed PSIs. See ¶¶ 64-79.]
Justice Ziegler filed a concurring opinion that was joined by Chief Justice Abrahamson and Justice Bradley.
Withdrawal of Guilty Plea – Pleading Requirements to Obtain Hearing – Ineffective Assistance of Counsel – Sufficiency of Guilty Plea Colloquy
State v. Burton, 2013 WI 61 (filed 10 July 2013)
Holding: The circuit court did not err in denying the defendant a hearing on his motions to withdraw his guilty pleas based on alleged ineffective assistance of counsel and alleged deficiencies in the guilty plea colloquy.
Defendant Burton pleaded guilty to two counts of attempted first-degree intentional homicide. He entered pleas of not guilty and not guilty by reason of mental disease or defect (NGI), but later he withdrew his not-guilty pleas as part of a plea agreement. After he was sentenced to lengthy consecutive periods of initial confinement, Burton moved to withdraw his guilty pleas, stating (as relevant to this appeal) two grounds for plea withdrawal.
First, Burton alleged that his two trial counsel were ineffective for permitting him to withdraw his NGI pleas because there was no evidence in the record that counsel had informed him of the possibility of a bifurcated plea with the right to a jury trial focused solely on the issue of his mental responsibility.
Second, Burton alleged that the circuit court erred in not advising him of the bifurcated plea and trial option during the plea colloquy, so that Burton’s resulting pleas were not knowing, intelligent, and voluntary. The circuit court denied the motions without a hearing. In an unpublished decision, the court of appeals affirmed. In a unanimous decision authored by Justice Prosser, the supreme court affirmed the court of appeals.
The court approached the first of the defendant’s motions (the claim of ineffective assistance of counsel) using procedures developed in the Nelson/Bentley line of cases for motions seeking plea withdrawal on bases unrelated to the plea colloquy itself. See Nelson v. State, 54 Wis. 2d 489, 195 N.W.2d 629 (1972); State v. Bentley, 201 Wis. 2d 303, 548 N.W.2d 50 (1996).
The court concluded that “Burton’s Nelson/Bentley motion was insufficient. The motion asserted that Burton’s two trial counsel were ineffective in not pursuing an NGI or ‘insanity’ defense. The motion claimed that Burton’s explicit withdrawal of that defense as part of a plea agreement must have been based upon a failure by trial counsel to inform Burton that he had the option of pleading guilty to the crimes but also not guilty by reason of mental disease or defect. Significantly, Burton’s motion never alleged that his trial counsel failed to inform Burton of this option. Instead, it merely pointed to the absence of evidence in the record that indicated that counsel had explained this option to Burton. The absence of record evidence in this situation is not enough. A defendant must affirmatively plead facts that, if true, would constitute deficient performance of counsel. Moreover, even if deficient performance had been properly pled, Burton’s motion did not affirmatively assert that if trial counsel had informed him of the option of a trial focused solely upon mental responsibility, he would have chosen that option and why he would have chosen it” (¶ 88).
The court approached the second of the defendant’s grounds for plea withdrawal (the claim of a defective plea colloquy) using the Bangert line of cases. See State v. Bangert, 131 Wis. 2d 246, 389 N.W.2d 12 (1986). It concluded Burton’s claim of a Bangert violation also was insufficient to warrant a hearing.
“Burton failed to state that, due to a defect in the plea colloquy, he did not enter his pleas knowingly, intelligently, and voluntarily. Because Burton did not allege his lack of personal understanding about some aspect of the plea process, no evidentiary hearing was necessary. In any event, we do not find any defect in the plea colloquy. The circuit court properly inquired as to whether Burton was entering his guilty pleas knowingly, intelligently, and voluntarily. The circuit court’s inquiry not only followed standard procedure, but also asked whether Burton was knowingly, intelligently, and voluntarily withdrawing his NGI plea and giving up the right to present an insanity defense” (¶ 8).
The court rejected Burton’s claim of a Bangert violation “because defendants do not have a fundamental right to an insanity plea, and it is not essential to conduct an extensive colloquy about NGI procedure before a defendant withdraws his plea of not guilty by reason of mental disease or defect. Looking forward, we do think it is better practice for circuit courts to conduct a personal colloquy on the bifurcated NGI plea and trial option to confirm the defendant’s understanding of the law and to head off later claims of a Bangert violation or ineffective assistance of counsel” (¶ 9).
Confrontation – Expert Opinions
State v. Deadwiller, 2013 WI 75 (filed 16 July 2013)
Holding: Expert opinion about the defendant’s DNA did not violate the defendant’s confrontation right even though it was based in part on inadmissible hearsay.
DNA recovered from two sexual assault victims linked Deadwiller to the crimes. Physical evidence collected from both victims was analyzed by a lab, Orchid Cellmark, which identified a male profile through DNA testing. Based on the profile, the State Crime Laboratory (SCL) matched the suspect’s profiles with the defendant’s known DNA. Later testing confirmed the result.
At trial, an SCL expert testified to his opinion that the defendant’s known DNA matched samples recovered from the victims. Moreover, the defendant conceded that he had had sexual intercourse with both women but he contended it was consensual. In a published decision, the court of appeals affirmed his conviction. See 2012 WI App 89.
The supreme court affirmed the court of appeals in an opinion, authored by Justice Ziegler, that essentially tracks Williams v. Illinois, 132 S. Ct. 2221 (2012) (see ¶¶ 32, 36). Williams was a plurality opinion, so the court divined the holding as the narrowest common point among the justices concurring in the judgment, essentially the opinions of Justice Alito and Justice Thomas (see ¶ 30). The prosecutor here, as in Williams, authenticated the crime victims’ samples through a “traditional chain of custody,” not through the Orchid Cellmark report (¶ 33). Nor did Orchid’s profile “target” the defendant. Thus, Justice Alito’s criteria were fulfilled.
The Orchid profile also comported with Justice Thomas’s view that limits the confrontation right to hearsay having the “solemnity of an affidavit or deposition” (¶ 35). Finally, this outcome was also consistent with earlier Wisconsin case law which precludes experts from functioning as hearsay “conduits” (¶¶ 37, 40).
In the alternative, the court found any error harmless. The defendant admitted having had sexual intercourse with the victims, although he asserted they consented. Second, at several points during the trial he seemed to waive any challenge to the DNA evidence (see ¶ 43).
Chief Justice Abrahamson concurred. She concluded that the court was not obligated to follow Williams in any event (there was no single rationale to follow). The concurrence also “lament[ed]” the court’s missed opportunity to transcend the decidedly unhelpful Williams case. Justice Bradley also concurred. Justice Gableman did not participate in this case.
Regulating Water Levels in Certain Navigable Waters – Authority of the DNR
Rock-Koshkonong Lake Dist. v. Wisconsin Dep’t of Natural Resources, 2013 WI 74 (filed 16 July 2013)
Holdings: There are numerous holdings in this case and they are identified in the numbered paragraphs of the case summary presented below.
Wisconsin Statutes section 31.02(1) authorizes the Wisconsin Department of Natural Resources (DNR) to regulate the level and flow of water in Wisconsin’s navigable waters. The DNR may order benchmarks designating “the maximum level of water that may be impounded and the lowest level of water that may be maintained by any dam.” The statute provides that the DNR may regulate water levels “in the interest of public rights in navigable waters or to promote safety and protect life, health and property.”
In 2003, the Rock-Koshkonong Lake District and other parties filed a petition to raise the DNR-designated water levels of Lake Koshkonong, which is the sixth largest inland lake in the state. The DNR rejected the petition, and its denial was affirmed by an administrative law judge, the circuit court, and the court of appeals (see 2011 WI App 115). In a majority decision authored by Justice Prosser, the supreme court reversed.
There were four issues before the supreme court in this case. Those issues and the court’s holdings in response are as follows:
1) What level of deference, if any, should be accorded to the DNR’s conclusions of law under the circumstances of this case?
The court held that the DNR’s conclusions are subject to de novo review “because the DNR’s water level order under Wis. Stat. § 31.02(1) is heavily influenced by the DNR’s interpretation of the scope of its own powers, its interpretation of the Wisconsin Constitution, its disputed interpretation of the statute it utilized, and its reliance upon statutes and rules outside of Wis. Stat. ch. 31” (¶ 10).
2) Did the DNR exceed its authority in making a water-level determination under Wis. Stat. section 31.02(1) “in the interest of public rights in navigable waters” by considering the effect of water levels on private wetlands that are adjacent to Lake Koshkonong and located above the ordinary high-water mark?
The court concluded that the DNR “properly considered the impact of the Petition’s proposed water levels on public and private wetlands in and adjacent to Lake Koshkonong. However, the DNR inappropriately relied on the public trust doctrine for its authority to protect non-navigable land and non-navigable water above the ordinary high water mark. The DNR has broad statutory authority grounded in the state’s police power to protect non-navigable wetlands and other non-navigable water resources. Thus, the DNR may consider the water level impact on all adjacent property under Wis. Stat. § 31.02(1)” (¶ 11).
3) Did the DNR exceed its authority in making a water-level determination under section 31.02(1) “in the interest of public rights in navigable waters” by considering wetland water-quality standards in section NR 103 of the Wisconsin Administrative Code?
The court held that the DNR “may consider § NR 103 water quality standards when making a water level determination under Wis. Stat. § 31.02(1) that affects wetlands and may apply these standards when appropriate after weighing the factors in the statute. However, Wis. Stat. § 281.92 suggests that the DNR is not required to apply ch. 281 standards in making a determination under Wis. Stat. § 31.02 because ch. 31 is excepted from the provisions of ch. 281” (¶ 12).
4) Did the DNR err in making a water-level determination under section 31.02(1) by excluding evidence and refusing to consider the effects of water levels on residential property values, business income, and public revenue?
The court held that the DNR “erroneously excluded most testimony on the economic impact of lower water levels in Lake Koshkonong on the residents, businesses, and tax bases adjacent to and near Lake Koshkonong. This evidence was relevant to the DNR’s decision-making under Wis. Stat. § 31.02(1). Although the DNR is granted substantial discretion in its decision-making under the statute, it must consider all probative evidence when its decision is likely to favor some interests but adversely affect others. In this case, the DNR’s exclusion of most economic evidence was inconsistent with its acceptance of competing economic evidence that helped sustain its water level decision” (¶ 13).
Justice Crooks filed a dissenting opinion that was joined by Chief Justice Abrahamson and Justice Bradley.
Involuntary Medication – Burden of Proof
Outagamie Cnty. v. Melanie L., 2013 WI 67 (filed 11 July 2013)
Holding: In petitioning for an order authorizing involuntary medication, the county failed to meet its burden of proving that the respondent was “substantially incapable” of understanding the advantages and disadvantages of her mental illness in making an informed choice whether to accept or reject medication.
Melanie suffered from a mental illness. Initially, the court committed Melanie for outpatient care and custody for six months and also ordered that medication and treatment be administered to her. Melanie did not challenge those orders. The county sought an extension of those orders for an additional 12 months, which the court granted. Melanie appealed only the extension of the involuntary medication order. In an unpublished opinion, the court of appeals affirmed.
The supreme court reversed the court of appeals in an opinion authored by Justice Prosser. The opinion canvasses the development of involuntary-medication doctrine in Wisconsin and nationally as well as the statutory iterations regulating the practice. The current statute sets forth two ways of determining incompetence to refuse medication (see ¶ 54). The issue before the court, however, “relates to the control that the County has over Melanie with respect to psychotropic medication during her outpatient commitment” (¶ 60). This in turn compelled the court to consider closely the overlapping language of two statutes, Wis. Stat. sections 51.20(1)(a)2.e. and 51.61(1)(g)4.b., which are compared in a table at paragraph 63. The court then proceeded “phrase by phrase” to explain the elements of section 51.61, the detail of which is left to the reader (see ¶¶ 65-78).
In applying the law to the record, the court observed that the case was moot (the order had expired) but concluded that public policy warranted clarification of the law (see ¶ 82). The record showed that the county had not met its burden of proof by clear and convincing evidence.
“Attention to detail is important. A county cannot expect that a judge concerned about a person with mental illness will automatically approve an involuntary medication order, even though the person before the court has chosen a course of action that the county disapproves. The county, under Wis. Stat. § 51.61(1)(g)4.b., must prove that the person is substantially incapable of applying an understanding of the advantages and disadvantages of particular medication to her own mental illness. In our view, the County did not satisfy its burden by clear and convincing evidence here” (¶ 94).
Justice Ziegler dissented, joined by Justice Roggensack and Justice Gableman. The dissent found the record sufficient, noting that although the doctor did not use the precise statutory language, the circuit court had sufficient evidence for its order (see ¶ 111).
Hearings – 10 Days – Medical-Judgment Transfers
Manitowoc Cnty. v. Samuel J.H., 2013 WI 68 (filed 11 July 2013)
Holding: A transfer from an outpatient facility to an inpatient facility based on medical judgment does not require a hearing within 10 days after the transfer.
Samuel was committed to the care and custody of the county, initially on an outpatient basis. Based on his increasingly delusional behavior, he was transferred to an inpatient facility some months later. Samuel contended, however, that the county failed to hold a review hearing within 10 days after his transfer to inpatient care. The circuit court ruled that Samuel was not entitled to such a hearing because his transfer was based on reasonable medical and clinical judgment, not a violation of treatment conditions (see ¶ 15). The court of appeals certified the case to the supreme court.
The supreme court affirmed the circuit court in an opinion written by Justice Ziegler. It held “that Wis. Stat. § 51.35(1)(e) does not require a hearing to be conducted within ten days of a transfer when the transfer is based on reasonable medical and clinical judgment under § 51.35(1)(e)1.… We further hold that a hearing must be conducted within ten days of a transfer when (1) the transfer ‘results in a greater restriction of personal freedom for the patient for a period of more than 5 days’ or is ‘from outpatient to inpatient status for a period of more than 5 days’ and (2) the transfer is based on ‘an alleged violation of a condition of a transfer to less restrictive treatment’ under § 51.35(1)(e)2.-3.” (¶ 19).
The holding is based on the plain language of the statues (see ¶ 24). Addressing contrary language in a prior case, the court withdrew “any language in [Fond du Lac Cnty. v.] Elizabeth M.P. [2003 WI App 232, 267 Wis.2d 739, 672 N.W.2d 88] that is contrary to our conclusion that § 51.35(1)(e) does not require a hearing to be conducted within ten days of a transfer when the transfer is based on reasonable medical and clinical judgment under § 51.35(1)(e)1.” (¶ 32).
Chief Justice Abrahamson concurred but wrote separately to set forth her disagreement with the majority opinion’s statutory interpretation. She also commended Manitowoc County for the path it has taken to ensure the rights of patients and statutory compliance and urged other counties to follow Manitowoc County’s lead (see ¶ 50).
Motor Vehicle Law
Implied Consent Law – 10-Day Period for Requesting Refusal Hearing Is Mandatory
Village of Elm Grove v. Brefka, 2013 WI 54 (filed 26 June 2013)
Holding: A court loses competency to extend the time for requesting an implied-consent refusal hearing if the defendant fails to request a hearing within the statutorily mandated 10-day period following service of the notice of intent to revoke operating privileges.
Brefka was arrested for operating a vehicle while under the influence of an intoxicant. He allegedly refused a chemical test to ascertain his blood-alcohol content. He subsequently filed a request for an implied-consent refusal hearing, but he did not file the request within 10 days after being served with a notice of intent to revoke his operating privileges, as required by Wis. Stat. section 343.305(9)(a)4. and (10)(a). He sought, on grounds of excusable neglect, to extend the time in which he was allowed to file a request for a refusal hearing.
The circuit court concluded that because Brefka did not file a request for a refusal hearing within the 10-day time limit, it lacked competency to hear his request to extend that limit. It therefore denied Brefka’s motion to extend the limit and dismissed his request for a refusal hearing, remanding the case to the village of Elm Grove municipal court for disposition. In an unpublished opinion, the court of appeals affirmed.
In a unanimous decision authored by Justice Bradley, the supreme court affirmed the court of appeals. It concluded that “the circuit court [was] without competency to hear Brefka’s request to extend the ten-day time limit set forth in Wis. Stat. § 343.305(9)(a)4. and (10)(a). The ten-day time limit is a mandatory requirement that may not be extended due to excusable neglect. Because the mandatory ten-day time limit is central to the statutory scheme, the circuit court lacked competency to hear Brefka’s request to extend it.” (¶ 44)
Eminent Domain – Uneconomic Remnant
Waller v. American Transmission Co., LLC, 2013 WI 77 (filed 16 July 2013)
Holding: The taking of an easement left the owner with an uneconomic remnant.
American Transmission Co. (ATC) condemned several easements for transmission lines on the Wallers’ residential property. The Wallers contended that the most recent easements left them with an “uneconomic remnant.” The circuit court ruled in favor of the Wallers, ordering ATC to take the entire property and awarding the Wallers litigation costs and relocation expenses as “displaced persons.” The case was before the supreme court on bypass from the court of appeals. The opinion describes the extensive earlier litigation between the Wallers and ATC.
The supreme court affirmed in an opinion written by Justice Prosser. The holdings, which are technical and fact-intensive, are described at paragraphs 6-9 and paragraphs 118-21. The first holding addresses the procedures for raising a claim regarding an uneconomic remnant under Wis. Stat. chapter 32 (see ¶ 6).
Second, the court concluded that ATC’s easements left the Wallers with an uneconomic remnant because of the size, shape, and condition of the property. Its “desirability, practicality, and value” were substantially diminished for both residential and industrial use (¶ 7).
Third, because the Wallers prevailed, they were entitled to litigation expenses under Wis. Stat. section 32.28. Fourth, the Wallers met the criteria for “displaced persons” under Wis. Stat. section 32.19(2)(e)1.a.
Justice Bradley dissented, joined by Chief Justice Abrahamson. The dissent contends that the majority rewrote and broadened the statutory definition of an uneconomic remnant, which will mean increased costs associated with condemnation proceedings (see ¶ 125). Justice Gableman did not participate in this case.
Competency – “Adverse Party”
Xcel Energy Servs. v. LIRC, 2013 WI 64 (filed 11 July 2013)
Holding: An employer’s failure to name its insurer as an “adverse party” did not deprive the circuit court of competence to review a decision by the Labor and Industry Review Commission (LIRC) in a worker’s compensation case.
An iron worker suffered a disabling back injury while employed by Xcel. LIRC awarded him permanent total disability benefits. The circuit court affirmed. In a published opinion, the court of appeals reversed. See 2012 WI App 19.
The supreme court reversed the court of appeals in an opinion authored by Justice Roggensack. The main issue was whether the circuit court should have dismissed Xcel’s complaint for lack of competency based on Xcel’s failure to name its insurer, ACE, as an adverse party as required by Wis. Stat. section 102.23(1)(a). A “failure to name an adverse party as a defendant under § 102.23(1)(a) deprives the circuit court of competency and requires dismissal of the complaint” (¶ 29). The court then discussed in depth the meaning of the term “adverse party.”
“Under our established definition, Xcel’s insurer, ACE, was not an adverse party required to be named under Wis. Stat. § 102.23(1)(a). First, there is no suggestion that LIRC’s award was ‘in favor’ of ACE, as we have interpreted that term.… Second, Xcel’s action in circuit court did not seek to reverse or modify LIRC’s decision in any way that would have conflicted with ACE’s interests. Rather, the modification Xcel sought was intended to reduce its exposure to liability for Smoczyk’s permanent total disability benefits, and although the terms of the insurance contract between Xcel and ACE are not before this court, logic suggests that the downward modifications Xcel sought would correspond to the interests of ACE. Moreover, … there is no suggestion that there is any coverage dispute with another insurer that would have provided coverage during a different coverage period, and even if there were, LIRC’s award was not in favor of such other insurer such that the insurer would have an interest in upholding LIRC’s decision” (¶ 45).
This holding rests on the court’s conclusion that the definition of adverse party proffered in Miller Brewing Co. v. LIRC (Miller I), 166 Wis. 2d 830, 480 N.W.2d 532 (Ct. App. 1992) was erroneous and hereby withdrawn. The court reaffirmed its adherence to the “established definition” set forth in Miller Brewing Co. v. LIRC (Miller II), 173 Wis. 2d 700, 495 N.W.2d 660 (1993) (see ¶ 44).
The court also held that LIRC’s order was supported by credible and substantial evidence in the record (see ¶ 48), and that LIRC did not exceed its authority despite ignoring an administrative law judge’s suggestion that the worker undergo further tests (see ¶ 58).
Chief Justice Abrahamson concurred in the decision but not the opinion. She cited two concerns, one regarding the majority’s discussion of the state constitution (see ¶ 62) and a second regarding the “uncertainty” engendered by the majority’s language about “adverse parties” (see ¶ 66). Justice Bradley joined the first part of the concurrence.