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    Court of Appeals Digest

    Daniel Blinka; Thomas Hammer

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    Wisconsin Lawyer
    Vol. 76, No. 6, June 2003

    Court of Appeals Digest


    This column summarizes selected published opinions of the Wisconsin Court of Appeals. Prof. Daniel D. Blinka and Prof. Thomas J. Hammer invite comments and questions about the digests. They can be reached at the Marquette University Law School, 1103 W. Wisconsin Ave., Milwaukee, WI 53233, (414) 288-7090.

    by Prof. Daniel D. Blinka &
    Prof. Thomas J. Hammer

    * *

    Appellate Procedure/Prisoner Litigation

    Time Limits for Commencing Appeals to the Court of Appeals - Pro Se Prisoners - "Tolling Rule"

    State ex rel. Kelley v. State, 2003 WI App 81 (filed 4 March 2003) (ordered published 30 April 2003)

    In State ex rel. Nichols v. Litscher, 2001 WI 119, the Wisconsin Supreme Court held that the time period for filing a petition in the supreme court for review of a court of appeals decision is tolled on the date that a pro se prisoner delivers a correctly-addressed petition to the proper prison authorities for mailing. The question before the court of appeals in this case was whether the Nichols tolling rule should also be applied to the time limitation for filing a notice of appeal in the court of appeals from a decision of the circuit court.

    In a per curiam decision, the court of appeals answered in the affirmative, holding that logic suggests that the prison mailbox tolling rule should apply to the filing of a notice of appeal. Like a petition for review to the supreme court, the notice of appeal is a document that must be timely filed in order to grant the court of appeals jurisdiction over the case. A prisoner seeking to file a notice of appeal faces the same restrictions on method of filing as does a prisoner filing a petition for review. Application of the prison mail box tolling rule is conditioned on the prisoner meeting certain conditions, including addressing the petition properly and otherwise complying with filing requirements.

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    Criminal Procedure

    County Jail Time as a Condition of Probation - Power of Sheriff to Release Inmates to Home Monitoring

    State v. Schell, 2003 WI App 78 (filed 11 March 2003) (ordered published 30 April 2003)

    The defendant was convicted of three counts of encouraging a probation violation and one count of negligently allowing escape. The court placed her on probation with a condition that she spend 100 days in the county jail. After the defendant began her time in jail, the sheriff determined that she was appropriate for home monitoring and released her. When the circuit court learned of the release, it conducted a hearing and amended the judgment to preclude placement on home monitoring.

    The sole issue on appeal was whether a circuit court possesses the power to prohibit a sheriff from ordering home monitoring for a defendant ordered to serve jail time as a probation condition. In a decision authored by Chief Judge Cane, the court of appeals concluded that the circuit court lacked authority to preclude the defendant's placement on home monitoring. It held that the plain language of Wis. Stat section 302.425 allows a sheriff to place persons on home monitoring when they are given jail time as a probation condition. The court also considered whether the amended judgment violated the separation of powers doctrine and concluded that, "by precluding the sheriff from releasing the defendant on home monitoring, the trial court substantially interfered with the sheriff's power" (¶ 16).

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    Newly Discovered Evidence - Shiffra Hearings

    State v. Robertson, 2003 WI App 84 (filed 26 March 2003) (ordered published 30 April 2003)

    A jury convicted the defendant of sexually assaulting an acquaintance he met at a party. The defendant claimed that the alleged victim consented to all sexual acts; the victim testified that she refused and resisted later sexual acts. Both sides argued that credibility was the key issue at trial. Following trial, the state submitted documents relating to restitution, which included a letter by the victim's treating psychiatrist that described the victim's treatment for "clinical depression with psychotic features" about the time the "rape" occurred. The trial court denied the defendant's motion for postconviction discovery of the victim's psychiatric records.

    The court of appeals reversed. The opinion, written by Judge Brown, sets forth the procedures governing the postconviction production of a victim's mental health records. "A defendant requesting confidential records during postconviction discovery should be required to meet the preliminary Shiffra-Green burden [i.e., the defendant must demonstrate a reasonable likelihood that the records contain relevant information that is necessary to a determination of guilt or innocence]. As with pretrial requests for confidential records, applying the Shiffra-Green test to the posttrial setting strikes the appropriate balance between the interests of the defendant and the State. It affords the defendant the opportunity to have a judge, an independent overseer, review the records while still protecting the privacy of the alleged victim. Then, if the defendant has shown an entitlement to an in camera review based upon the first four factors of the newly discovered evidence test, the trial court should apply the [State v. O'Brien, 223 Wis.2d 303, 588 N.W.3d 8 (1999)] 'consequential evidence' test to determine whether the material it reviews during its in camera inspection should be disclosed to the defendant" (¶22).

    The court concluded that all elements of the commingled newly discovered evidence test, the Shiffra-Green test, and the O'Brien test had been met.

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    Evidence

    Impeachment - Prior Convictions - Waiver

    State v. Gary M.B., 2003 WI App 72 (filed 6 March 2003) (ordered published 30 April 2003)

    A jury convicted the defendant of sexually assaulting a child. The trial judge ruled that all five of the defendant's prior criminal convictions were admissible to impeach him under Wis. Stat. section 906.09. The convictions occurred between 1973 and 1991, for offenses including cashing bad checks, assault, and domestic violence.

    The court of appeals, in an opinion written by Judge Deininger, held that the trial judge erred by admitting all five convictions but that the error was harmless. First, the court held that the defendant had not waived the issue by "preemptively testifying to them on direct examination" (¶10). In reaching this determination, the court discussed Wisconsin case law that departs from federal precedent, which reached the opposite conclusion. In short, Wisconsin defendants may continue the practice of preemptive disclosure of prior convictions on direct examination, which forecloses the prosecutor from revisiting such evidence, without fear of waiving objections to admissibility of the convictions.

    Second, the trial court abused its discretion by failing to weigh the probative value of three of the convictions against the danger of unfair prejudice (the defendant stipulated that two convictions were admissible). The trial judge relied on an erroneous "presumption" that prior convictions are admissible. To the contrary, section 906.09 requires that the probative value of evidence be weighed against unfair prejudice and other factors. Finally, the court closely scrutinized the record and determined that the error was harmless beyond a reasonable doubt.

    Judge Dykman dissented from the conclusion that the error was harmless, particularly the majority's implication "that improper admission of the numbers of prior convictions is ipso facto harmless" (¶45).

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    Family Law

    Termination of Parental Rights - Incestuous Relationship - Parental Unfitness

    Monroe County Dep't of Human Servs. v. Kelli B., 2003 WI App 88 (filed 27 March 2003) (ordered published 30 April 2003)

    Kelli is the mother of three children, and it is undisputed that Kelli's father is the father of her three children. The Monroe County Department of Human Services petitioned to terminate the parental rights of both the mother and her father to their children. The father agreed to voluntarily terminate his parental rights.

    The case to terminate the mother's parental rights was tried to a jury on a single statutory ground, incestuous parenthood. See Wis. Stat. § 48.415(7). After the jury found that the mother and the children's father were related by blood in a degree of kinship closer than second cousins, the case proceeded to a disposition hearing, at which the circuit court determined that it was in the best interests of all three children to terminate the mother's parental rights.

    On appeal the mother argued that the ground of incestuous parenthood for terminating parental rights was unconstitutional as applied to her, because she was the victim of an incestuous relationship begun while she was still a minor. In a decision authored by Judge Vergeront, the court of appeals concluded that the use of section 48.415(7) in this situation violated the mother's right to substantive due process.

    The court concluded that the mother has a fundamental liberty interest in parenting her children. The court could find no case that would support the proposition that a parent in her situation - that is, a parent who was a minor at the time her own parent began an incestuous relationship with her and who has a substantial relationship with her children - does not have a fundamental interest in parenting the children born of that relationship.

    The court further concluded that the fact of the incestuous parenthood of the children in itself does not demonstrate that the mother is an unfit parent. Said the court, "the minor child in the incestuous relationship is a victim of his or her parent's wrongful and criminal behavior. Being victimized by one's parent does not warrant the conclusion that the child is an unfit parent of the offspring of the incestuous relationship" (¶17). Nor would the court conclude that the mother's failure to end the relationship once she turned 18 made her an unfit parent.

    Lastly, the court held that, even though a trial judge has discretion not to terminate parental rights if that course of action is in the child's best interest, the existence of this discretion is not a substitute for the constitutional requirement that the state must first prove the parent unfit.

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    Fraud

    Common Law Fraudulent Concealment - Wisconsin Deceptive Trade Practices Act - Element of Damages

    Tietsworth v. Harley-Davidson Inc., 2003 WI App 75 (filed 4 March 2003) (ordered published 30 April 2003)

    At the heart of this appeal are claims made by the plaintiff against the defendant for common law fraudulent concealment and violations of the Wisconsin Deceptive Trade Practices Act (DTPA). The plaintiff alleged that the defendant manufactured certain motorcycles equipped with engines that were defectively designed and potentially dangerous, due to what the plaintiff claimed was a known propensity for premature cam failure, which causes sudden and total engine failure. The critical issue was whether the plaintiff had to wait for actual motorcycle failure to occur before bringing these claims.

    In a decision authored by Judge Wedemeyer, the court of appeals concluded that Wisconsin law does not require the plaintiff to wait for his engine to fail before he can state a fraudulent concealment claim. One of the elements of a common law fraudulent concealment claim is that the plaintiff suffer benefit of the bargain damages. It is a fundamental principle of Wisconsin law that actual damage is harm that has already occurred or is reasonably certain to occur in the future.

    Under the benefit of the bargain rule, the measure of the purchaser's damages is typically stated as the difference between the value of the property as represented and its actual value as purchased. Alternatively, an appropriate measure is the reasonable cost of placing the property received in the condition in which it was represented to be. In this case, the court found that the plaintiff properly alleged damages under both measures, and the court held that the circuit court determination that the plaintiff must await product failure before he can state a claim of fraud conflicts with precedent.

    The court also agreed with the plaintiff that he need not wait until the motorcycle fails in order to state a claim under the DTPA. "No Wisconsin court has ever held that DTPA plaintiffs must suffer any type of damage other than the benefit of the bargain losses [the plaintiff] seeks here" (¶ 23). Because the plaintiff pleaded all elements of a DTPA claim in his complaint and because engine failure was not needed to assert a DTPA claim, the court concluded that the complaint stated an appropriate claim for a violation of the DTPA.

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    Insurance

    Stacking - UIM Coverage

    Kendziora v. Church Mut. Ins. Co., 2003 WI App 83 (filed 18 March 2003) (ordered published 30 April 2003)

    Amanda Kendziora was gravely injured when she was struck by a car in a crosswalk while walking with her mother. Amanda's damages exceeded the liability policy limits of the driver who struck her. Her parents thus looked to the underinsured motorist (UIM) coverage contained in two policies on two vehicles they owned. The insurer moved for a declaratory judgment and summary judgment finding that its UIM coverage did not apply. The trial court ruled in favor of the insurer, finding that the parents' vehicles did not fit the policies' definition of "underinsured motor vehicle."

    The court of appeals, in an opinion written by Judge Wedemeyer, affirmed. This case presented a "factual variation from other UIM ambiguity cases considered by this court. Under the facts here, we decide for the first time whether the underinsured motorist provision in the insured's policies are ambiguous when the insured is a pedestrian, and neither of the insured's vehicles is involved in the accident" (¶18).

    Closely scrutinizing the policies' language, the court found that "it leaves no room for stacking UIM limits simply because [the parents] had more than one policy or because the UIM premiums were totaled into a single amount" (¶25). The court also rejected the assertion that since "stacking" was not expressly prohibited, it was allowed (¶26). Nor was the court persuaded that the declarations page and various schedules created ambiguity. Finally, the policies' "two or more auto policies" provision was "not qualified in any manner and quite clearly applie[d] to the entire policy" (¶37) and did not, as a result, render coverage "illusory" (¶39).

    Reducing Clauses - UIM - Ambiguity

    Gohde v. MSI Ins. Co., 2003 WI App 69 (filed 4 March 2003) (ordered published 30 April 2003)

    The court of appeals here considered whether a reducing clause applicable to underinsured motorist (UIM) coverage rendered a policy ambiguous. The matter was before the court of appeals on remand from the supreme court, which summarily reversed the court of appeals' earlier decision and ordered rebriefing in light of Badger Mutual Insurance Co. v. Schmitz, 2002 WI 98.

    The court of appeals, in an opinion written by Judge Cane, held that the reducing clause in the policy was ambiguous under Schmitz and therefore unenforceable (¶2). Neither the policy's declaration page nor the index mentioned that the UIM coverage was subject to a reducing clause (¶14). Schmitz (and other case law) make it clear that this "lack of reference" was a "factor" to consider (¶17).

    "While we agree with [the insurer] it would be impractical to refer to every limit of liability in the declarations, a reducing clause is not a typical limit of liability. In the UIM context, reducing clauses practically guarantee the stated limits will never be fully paid. As a result, Wisconsin courts generally voided reducing clauses as providing illusory coverage and being against public policy before the enactment of Wis. Stat. § 632.32(5)(i). After the legislature authorized reducing clauses, the supreme court still required they be 'crystal clear' within the context of the entire policy. Based on Schmitz and Dowhower II, we determine it is relevant whether the declarations mention the reducing clause" (¶17, citation omitted). Although this policy lacked the "complexity" featured in other cases, its "declarations and the limits of liabilities sections lead the insured to believe the limits are obtainable when, in reality, the reducing clause guarantees they will rarely, if ever, be paid" (¶21).

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    Lemon Law

    Liability of Manufacturer for Component Parts Not Covered by Manufacturer's Express Warranty

    Schonscheck v. Paccar Inc., 2003 WI App 79 (filed 4 March 2003) (ordered published 30 April 2003)

    The plaintiff, a self-employed truck driver, purchased a new Kenworth truck. He received a limited motor vehicle warranty from Kenworth. The truck's engine was protected by a separate warranty issued by Cummins Engine Co. Problems arose immediately with the vehicle, and ultimately the plaintiff sued Kenworth, alleging several theories of liability, including a claim under Wisconsin's lemon law. All claims were subsequently dismissed except for the lemon law claim, upon which the plaintiff prevailed before a jury.

    Among the issues on appeal was whether the lemon law makes manufacturers liable only for conditions that do not conform to an express warranty. Kenworth argued that the unrefuted evidence proved that the nonconformity in the plaintiff's truck resulted from the engine. It was also undisputed that the engine was not covered in Kenworth's express warranty. Therefore, Kenworth argued, the lemon law did not make it liable to the plaintiff.

    In a decision authored by Judge Peterson, the court of appeals concluded that the lemon law unambiguously places liability for vehicle nonconfor-mities on the manufacturer, even for component parts. See Wis. Stat. § 218.0171(1)(f). The court also rejected Kenworth's argument that the lemon law limits responsibility to conditions that do not conform to an express warranty. It concluded that if the legislature had intended to limit the scope of the statute to manufacturer's express warranties, it could have done so, but it did not.

    The court further observed that the lemon law prevents waiver of consumer rights and protections. It was enacted to provide customers with remedies beyond what have been characterized as the "inadequate, uncertain and expensive remedies" of the Uniform Commercial Code and the Magnuson-Moss Warranty Act. "When a manufacturer excludes components from its warranty, it is effectively compelling the consumer to waive the consumer's rights under the lemon law for nonconformities to these parts. A manufacturer cannot simply exclude all major parts from its warranty to avoid lemon law liability. . . . We therefore conclude that the language of the lemon law unambiguously makes Kenworth liable for nonconformities to the Cummins engine even though the engine is not covered in Kenworth's express warranty" (¶ 17).

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    Probate

    Lawful Heirs - Paternity - Presumptions - Statute of Limitation - Removal of Personal Representative

    DiBenedetto v. Jaskolski, 2003 WI App 70 (filed 4 March 2003) (ordered published 30 April 2003)

    Frank B. Thompson (FBT) died intestate in 1999, leaving assets worth nearly $1 million but no known heirs. Putative relatives of FBT brought this action, alleging that FBT was the son of their ancestor Frank J. Thompson (FJT), and thus that they were the lawful heirs of FBT. The probate court held a two-day evidentiary hearing and reached the following conclusions: "(1) the evidence rebutted the birth-certificate-based presumption that FBT was a marital child of FJT [citation omitted]; (2) paternity proceedings to establish whether FBT was a nonmarital child of FJT were barred by the statute of limitations; and (3) the actions of the personal representative of the estate were reasonable and, therefore, did not require her removal" (¶1).

    The court of appeals, in an opinion written by Judge Schudson, affirmed in part and reversed in part. The circuit court's finding that the evidence rebutted the "birth-certificate-based presumption" was not clearly erroneous. Wis. Stat. section 891.09 provides that a birth certificate is "prima facie" evidence of any fact. Under Wis. Stat. section 903.01, the personal representative had the burden of disproving the presumed fact that FBT was the marital child of FJT as indicated on the birth certificate. The circuit court drew reasonable inferences, none clearly erroneous, from conflicting evidence when trying to assess what had occurred in 1908, the year of FBT's birth (¶20). The circuit court erred, however, in ruling that the statute of limitation precluded further probate proceedings regarding FBT's paternity (¶23). More precisely, Wis. Stat. section 893.88 limits only "actions" for the establishment of paternity, not motions for "the purpose of determining paternity in a probate proceeding" (¶26).

    The circuit court properly refused to remove the personal representative who had fought this "costly battle" against the putative relatives. Nothing demonstrated that her decisions "derived from fraud, bad faith, or conflict of interest" or that she was incompetent or incapable of discharging her duties (¶36). Although the personal representative had "misinterpreted law in several significant ways," the court confidently predicted that with the "legal guidance gained through this appeal" she would "fulfill her duties" (¶37).

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    Real Property

    Condominium Bylaws - Foreclosures - Title Transfer

    Bankers Trust Co. v. Bregant, 2003 WI App 86 (filed 11 March 2003) (ordered published 30 April 2003)

    In 1997 Bregant bought a condominium at Woodlands and executed a mortgage in favor of Bankers Trust for the property. In 2001 Woodlands amended its bylaws to require that its condominiums be occupied by their owners. One month later Bankers Trust filed a mortgage foreclosure action against Bregant; Woodlands was later joined as a defendant because of its lien and interest in the unit. At a sheriff's sale in 2002, Bankers Trust was outbid for the unit by $100. Woodlands objected to the winning bid, however, because the bidder would not reside in the unit and therefore would violate the bylaws. The trial court nevertheless confirmed the sale.

    Addressing this issue of first impression, the court of appeals, in an opinion written by Judge Wedemeyer, affirmed, "[b]ecause Wis. Stat. § 703.10(6) (1999-2000) prohibits condominium bylaws from affecting the transfer of title to a condominium unit" (¶1). Woodlands, said the court, was attempting to use its bylaw to block the transfer of title, thereby rendering title to the unit unmarketable and "otherwise affected" as proscribed by the statute. "On the one hand, Woodlands argues that the transfer of title by sheriff's sale to Green [the winning bidder] cannot occur because it violates a bylaw prohibition and therefore is contrary to law. Yet, on the other hand, it argues that the bylaw restriction does not render the title to the unit unmarketable" (¶18). The court found Woodlands' position in "direct contravention" to the statute: "To defeat a transfer to title by sheriff's sale is tantamount to rendering the title unmarketable or, at the very least, to adversely affecting its marketability" (¶19).

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    Trusts

    Conflicts of Law - Undue Influence - Improper Execution - Sanctions

    Glaeske v. Shaw, 2003 WI App 71 (filed 6 Feb. 2003) (ordered published 30 April 2003)

    The trustee of the Arthur Shaw Irrevocable Trust filed this declaratory judgment action seeking a determination of the trust's validity. Shaw had one son, with whom he had a strained relationship. The trust named Arthur's nephew as the primary beneficiary. The circuit court rejected the son's claims that the nephew exercised improper influence and that the trust was invalid because it was improperly executed.

    The court of appeals, in an opinion written by Judge Deininger, affirmed. First, the court determined that Wisconsin law governed this action even though Shaw resided in Florida when the trust was executed. The trust document itself specified the application of Wisconsin law, named Wisconsin residents as the trustee and primary beneficiary, and identified Wisconsin as the place of its drafting and execution (¶24). Since Wisconsin law does not require that two witnesses sign in the presence of each other and the settlor at the time of execution, the trust was properly executed, even though Florida law required otherwise.

    Second, the summary judgment record did not raise a disputed issue of fact relating to Shaw's susceptibility to influence. Said differently, the son's failure to raise a disputed issue of fact as to the elements of an undue influence claim justified the court's decision to grant summary judgment in favor of the trust (¶31). Nor did the son meet his burden with respect to an alternative standard that applies when there is a "confidential or fiduciary relationship" between the beneficiary and the settlor and "suspicious circumstances" surrounded the trust's creation (¶27).

    The court also addressed several issues relating to sanctions. The court of appeals held that the circuit court properly struck the son's expert witnesses because of the son's failure ("by any measure") to comply with a scheduling order (¶39). The court of appeals remanded the case for a determination of whether any of the son's claims are frivolous. Although the circuit judge stated that "it appears to me that there is going to be some imposition of sanctions," none were formally entered. The court rejected the trustee's contention that the appeal itself was frivolous.

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