Commercial Paper

Deficiency Judgment – Summary Judgment

Gemini Capital Grp. LLC v. Jones, 2017 WI App 77 (filed 17 Oct. 2017) (ordered published 29 Nov. 2017)

HOLDING: In an action to recover a deficiency judgment on an old car loan, the plaintiff’s summary-judgment filings left issues of disputed fact about its ownership of the debt and whether the underlying property had been sold in a commercially reasonable manner.

SUMMARY: In July 2007, Jones financed the purchase of a motor vehicle with a consumer loan. He later defaulted on the loan. A lawsuit resulted in the repossession of the vehicle and a default judgment against Jones. In 2015, Gemini Capital Group filed a claim against Jones to recover on a deficiency judgment. Gemini asserted it had purchased the 2007 loan. The circuit court granted summary judgment in Gemini’s favor.

The court of appeals reversed in an opinion authored by Judge Stark. First, Gemini failed to make a prima facie showing that it owned Jones’ debt (see ¶ 15). Like most commercial debt, Jones’ loan was sold over time to a variety of holders, most recently Gemini. Yet the affidavit by Gemini’s records custodian failed to aver that Jones’ debt was among the portfolio of debts purchased by Gemini. Rather, the affidavit spoke broadly of accounts and debts but provided no specifics.

“We believe it self-evident that, in order to make a prima facie showing that it is the owner of Jones’ debt, Gemini must present evidence indicating that it owns that specific debt” (¶ 19). The affiant asserted that he had “personal knowledge” of Gemini’s ownership of Jones’ debt, but his knowledge rested squarely on the underlying documents that were themselves insufficient (¶ 23).

Second, Gemini’s summary-judgment material failed to show that Jones’ vehicle was sold in a commercially reasonable manner, as required by Wis. Stat. section 425.209(1). Jones adequately raised this issue when arguing during a motion hearing before the circuit court (see ¶ 27). Gemini had the burden to show that the goods were disposed of in a commercially reasonable manner; it presented only evidence that the vehicle had been sold, nothing more (see ¶ 29).

Finally, the court held that there was a disputed issue of material fact regarding the statute of limitation. It appeared that a 2009 payment, possibly by an insurer, might have tolled the statute of limitation on contract actions (see ¶ 36).

Criminal Procedure

Automobiles – “Special Needs” Doctrine

State v. Scott, 2017 WI App 74 (filed 10 Oct. 2017) (ordered published 29 Nov. 2017)

HOLDING: The stop of the vehicle in which the defendant was riding was justified under the “special needs” doctrine.

SUMMARY: The defendant was convicted of strong-arm robbery. The circuit court denied his motion to suppress evidence found in the car in which he was riding when stopped by police officers. The trial judge ruled that reasonable suspicion justified the car’s stop.

The court of appeals affirmed in an opinion authored by Judge Brash. The state conceded that police officers lacked reasonable suspicion to justify a Terry stop of the car (see ¶ 16). Nonetheless, the court upheld the stop and search under the “special needs” doctrine, relying heavily on supreme court case law governing road blocks and checkpoints. Special needs searches are based on a variety of factors, including the “gravity of the public concern,” the “degree to which the seizure advanced the public interest,” and the severity of the interference with individual liberty (¶¶ 26-27).

When police officers learned about the robbery, they established a checkpoint that stopped only three cars, including the defendant’s. Police officers immediately linked the defendant to the crime; the other cars were detained only briefly. The stop and search of the defendant’s car fell within the special needs doctrine.

Family Law

Divorce – Putative Marriage – Property Division and Award of Maintenance

Xiong v. Vang, 2017 WI App 73 (filed 24 Oct. 2017) (ordered published 29 Nov. 2017)

HOLDINGS: 1) The parties’ relationship qualified as a putative marriage. 2) The circuit court did not erroneously exercise its discretion with respect to property division and the award of maintenance.

SUMMARY: Respondent Vang appealed a divorce judgment terminating his marriage to petitioner Xiong, contending that he and Xiong were never validly married. He also challenged the circuit court’s orders with respect to property division and the award of maintenance.

The parties to this action are Hmong. Their “marriage” occurred in 1980 while they were domiciliaries of Laos but were living in a refugee camp in Thailand. After hearing the conflicting evidence presented by the parties, the circuit court concluded that the testimony was “ambiguous, at best” as to whether they were validly married under Thai law.

However, the court concluded that they were parties to a “putative marriage,” which is “a marriage which has been solemnized in proper form and celebrated in good faith by one or both parties, but which, by reason of some legal infirmity, is either void or voidable.” See Xiong v. Xiong, 2002 WI App 110, 255 Wis. 2d 693, 648 N.W.2d 900.

In a decision authored by Judge Stark, the court of appeals affirmed. It first concluded that under Wisconsin law the validity of a marriage is determined by the law of the place where the marriage was contracted. In this case that was the country of Thailand. Vang submitted evidence that under Thai law the parties could not legally marry because they were considered illegal immigrants.

Xiong conceded this point but argued that Thai law is irrelevant because the parties were domiciliaries of Laos. The appellate court rejected this argument because inter alia Xiong cited no legal authority in support of the proposition that the law of the parties’ country of domicile should determine the validity of their marriage (see ¶ 26).

Nonetheless, the appellate court concluded that the circuit court properly determined that the parties had a legally recognizable putative marriage (see ¶ 2). The first requirement of a putative marriage is that it was “solemnized in proper form” (¶ 31). The circuit court found that Vang and Xiong took part in a marriage ceremony, which was conducted in accordance with traditional Hmong marriage rituals. These findings were not clearly erroneous (see ¶ 31).

The second requirement for a putative marriage is that the marriage was “celebrated in good faith by one or both parties.” In other words, the court must find that “either or both parties believed in good faith that the marriage was valid” (¶ 36).

The circuit court found that the “most credible testimony” in this case indicated that “both of these parties believed they were married and they were venturing forth together on this life of matrimony” (id.). This finding was supported by the documents in Xiong’s U.S. immigration file in which Vang represented that he was Xiong’s husband. The court also noted Vang and Xiong had signed a real estate deed as “husband and wife” in 2012 and had submitted joint income tax returns as a married couple (see id.).

The court concluded its discussion of putative marriages by cautioning that “our decision in this case should not be read to indicate that all marriages performed according to Hmong cultural traditions, or the traditions of other cultures, are per se valid in Wisconsin. Rather, each purported marriage must be analyzed on its own facts to determine whether it qualifies as a putative marriage, based on the factors set forth in Xiong” (¶ 44).

Vang also challenged the circuit court’s orders on property division. Among other things he claimed that the court erred in treating as divisible property a home he purchased in 2008 after purportedly marrying another woman. He argued that the court should have concluded that he and Xiong were “putatively divorced” in 2005. The appellate court rejected this argument because inter alia Vang did not cite any authority from any jurisdiction recognizing the existence of “putative divorce” as a legal concept (see ¶ 51).

Last, the appellate court concluded that the circuit court did not erroneously exercise its discretion in awarding Xiong maintenance of $2,708 per month for an indefinite duration. The circuit court properly considered several factors outlined in Wis. Stat. section 757.56(1c), including the length of the marriage, Xiong’s limited education and language skills, Xiong’s limited earning capacity, Xiong’s contributions to Vang’s education and career, and Xiong’s annual earning capacity of $15,080. In contrast Vang had a bachelor’s degree and annual income of $88,757.

Juvenile Law

Delinquency Proceedings – Reevaluation of Competency

State v. A.L., 2017 WI App 72 (filed 31 Oct. 2017) (ordered published 29 Nov. 2017)

HOLDING: The juvenile court retains jurisdiction over delinquency proceedings if a juvenile has been determined to be incompetent and unlikely to regain competency within statutory time limits such that the court may revisit the issue of competency when circumstances warrant reevaluation.

SUMMARY: A delinquency petition was filed in 2012 against A.L., charging him with second-degree reckless homicide. In that proceeding, A.L.’s lawyer challenged A.L.’s competency to proceed. The juvenile court determined that A.L. was not competent and was not likely to regain competency within the statutory time frame established by Wis. Stat. section 938.30(5)(e) (“within 12 months or within the time period of the maximum sentence that may be imposed on an adult for the most serious delinquent act with which the juvenile is charged, whichever is less”). The juvenile court suspended the delinquency proceedings against A.L. and entered a juvenile in need of protection or services order, which ultimately expired in 2015.

Later in 2015 the state filed a motion to recall the juvenile delinquency petition for purposes of reevaluating A.L.’s competency to proceed in his suspended delinquency case. The juvenile court determined that Wis. Stat. section 938.30(5)(d) does not permit such reevaluation; instead, it concluded that a juvenile delinquency petition remains suspended in cases such as this one in which the juvenile was found incompetent and unlikely to regain competency within the statutory time frame. This would essentially leave A.L.’s case suspended indefinitely.

In a decision authored by Judge Brash, the court of appeals reversed. Said the court: “[T]he interpretation of Wis. Stat. § 938.30(5)(d) advocated by A.L. – that the trial court loses competency over the proceedings when the juvenile remains incompetent and thus the delinquency petition must be dismissed with prejudice – does not comport with the legislative history of the statute, nor does it promote the purposes of competency law. We therefore reject that interpretation, and instead find that the legislature intended for the trial court to retain jurisdiction over delinquency proceedings where the juvenile remains incompetent such that the court may revisit the issue of competency when circumstances warrant re-evaluation” (¶ 36).

Municipal Law

Partition Fences on Farming and Grazing Land – Wis. Stat. chapter 90 – Applicability to Cities and Villages

White v. City of Watertown, 2017 WI App 78 (filed 12 Oct. 2017) (ordered published 29 Nov. 2017)

HOLDING: Wisconsin Statutes chapter 90, which regulates partition fences on farming and grazing land, applies to cities and villages as well as to towns.

SUMMARY: The plaintiffs own land in the city of Watertown that they use as a farm and on which they maintain livestock. In their complaint for declaratory judgment they argued that Wis. Stat. chapter 90 requires them to maintain a partition fence between their land and neighboring residential properties and that chapter 90 requires the city to resolve a dispute between them and their neighbors regarding the cost and maintenance of the fence.

The city refused to resolve the dispute, arguing that chapter 90 applies to towns but not to cities. The circuit court disagreed, holding that chapter 90 is ambiguous but is most reasonably read as applying to cities as well as to towns. In a decision authored by Judge Lundsten, the court of appeals affirmed.

Wisconsin Statutes chapter 90, which dates back to the 1800s, provides fencing specifications, requires adjoining landowners to share costs, and provides dispute-resolution procedures for these landowners. Chapter 90 makes clear that, when qualifying land is in a town, the town is responsible for administering and enforcing chapter 90 in respect to the fencing. However, chapter 90 is unclear as to whether cities and villages are responsible for administering and enforcing the chapter when adjoining lands are within their boundaries.

The court of appeals agreed with the circuit court that Wis. Stat. chapter 90 is ambiguous. “We thus turn to the legislative history and, based on that history, agree with the circuit court and the [plaintiffs] that, when qualifying land is in a city or village, that city or village must administer and enforce Chapter 90 the same as a town would if the land were in that town. Accordingly, we affirm the circuit court’s order declaring that the City must assume Chapter 90 duties with respect to the [plaintiffs’] land” (¶ 4).

The court also clarified that Wis. Stat. chapter 90 applies even if only one of the adjoining properties has the requisite agricultural use (see ¶ 49).

Property

Banks – POD Account – Changed Beneficiaries

Mueller v. Edwards, 2017 WI App 79 (filed 25 Oct. 2017) (ordered published 29 Nov. 2017)

HOLDING: For a bank payable on death (POD) account, a separate writing cannot change the account’s beneficiaries; the bank’s records control.

SUMMARY: In 2015, R.Z. created a POD account at US Bank, naming two beneficiaries on a signature card held by the bank. When R.Z. died in 2015, Mueller, a “neighbor and friend,” came forward with a writing that showed that R.Z. had named Mueller the sole beneficiary on this and other accounts. Mueller’s name was not on the bank’s records as a beneficiary. After a trial, the court found that the two original beneficiaries owned the proceeds from the POD account.

The court of appeals affirmed in an opinion authored by Judge Reilly. Wisconsin Statutes section 705.01 requires that a POD beneficiary be named in the account records of the financial institution. “A separate writing not filed by a depositor with a financial institution is ineffective to alter a P.O.D. beneficiary designation under Wis. Stat. ch. 705” (¶ 8). The court held that Wis. Stat. section 705.10(1), which appears in subchapter two of Wis. Stat. chapter 705 and speaks of “separate writings,” is inapplicable here. To the contrary, POD accounts are exclusively governed by subchapter one of Wis. Stat. chapter 705 (see ¶ 10). “Section 705.10 does not reference P.O.D. accounts” (¶ 11).

Real Property

Condemnation – Jurisdictional Offer – Appraisals – Writ of Assistance

Otterstatter v. City of Watertown, 2017 WI App 76 (filed 26 Oct. 2017) (ordered published 29 Nov. 2017)

HOLDING: The city properly followed airport condemnation procedures in extending its jurisdictional offer, and the circuit court properly granted a writ of assistance to remove the owner from the property.

SUMMARY: The city of Watertown sought the plaintiff’s property for expansion of its airport. An appraisal in February 2015 valued the property at $240,000 but in December 2015 the city increased its offer to $270,000. The plaintiff rejected the offer and negotiations stalled. The circuit court granted summary judgment in the city’s favor condemning the property while also denying the plaintiff’s cross-motions; the court also granted the city a writ of assistance to remove the plaintiff.

The court of appeals affirmed in an opinion, authored by Judge Kloppenburg, that focuses on the condemnation process set forth in Wis. Stat. section 32.05. First, the city’s jurisdictional offer of $270,000 was “based” on the February 2015 appraisal, as required by statute. The plaintiff failed to show that the $30,000 increase “deviated so substantially” from the appraisal that the appraisal was no longer a “fundamental ingredient” of the jurisdictional offer (¶ 25).

The court specifically addressed the plaintiff’s arguments that the offer must equal the appraisal, the city failed to negotiate in arriving at the offer, and a new appraisal had to justify the offer. His “real claim is not that the City violated any requirement in Wis. Stat. § 32.05, but that the ultimate award is too low” (¶ 36).

Next, the court upheld the issuance of the writ of assistance that removed the plaintiff from the condemned property. The condemnor (the city) had acquired title and provided the requisite notice under the plain language of the statute. Specifically, the city had provided notice before it acquired the property, as permitted by statute (see ¶ 44). The court rebuffed “absurd situations” advanced by the plaintiff to the contrary (¶ 50).