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    Supreme Court Digest

    This column summarizes all decisions of the Wisconsin Supreme Court except those involving lawyer or judicial discipline.

    Daniel BlinkaThomas Hammer

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    Wisconsin LawyerWisconsin Lawyer
    Vol. 76, No. 7, July 2003

    Supreme Court Digest

    This column summarizes all decisions of the Wisconsin Supreme Court (except those involving lawyer or judicial discipline, which are digested elsewhere in the magazine). Profs. Daniel D. Blinka and Thomas J. Hammer invite comments and questions about the digests. They can be reached at Marquette University Law School, 1103 W. Wisconsin Ave., Milwaukee, WI 53233, (414) 288-7090.

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

    * *

    Criminal Law

    Amendment to Statute of Limitation for Sexual Assault of a Child - Ex Post Facto Challenge

    State v. Haines, 2003 WI 39 (filed 13 May 2003)

    In 2000 the state charged the defendant with second-degree sexual assault of a child under age 16, in violation of Wis. Stat. section 948.02(2). The complaint alleged that the offense occurred in 1992. At the time of the offense, the applicable statute of limitation provided that the prosecution had to commence before the victim reached age 21. In 1994, about five years before the victim would turn 21, the statute of limitation was amended to provide that a prosecution had to commence before the victim reached age 26. When the charge in this case was brought in 2000, the victim was 22 years old.

    The defendant moved for dismissal, claiming that the prosecution was barred by the age 21 limitation in effect at the time of the alleged assault. He also claimed that prosecution under the amended (age 26) limitation that was in effect when the complaint was filed violated the ex post facto clause of the Wisconsin Constitution. The circuit court dismissed the complaint, concluding that prosecution under the amended statute of limitation violated the ex post facto clause.

    The court of appeals reversed. See 2002 WI App 139. The court held that the 1994 amended version of the statute of limitation applies to the defendant. The 1994 law specifically provides that its longer time limitation first applies to offenses that were not barred from prosecution on the effective date of the change, April 22, 1994.

    The court of appeals further concluded that application of the 1994 amended statute allowing prosecution to commence before the victim reached age 26 did not violate the ex post facto clause. Among other things, the ex post facto clause protects against removal of a defense that was available at the time the act was committed. The 1994 amendment did not remove a defense that was available to the defendant in 1992. At the time of the alleged assault, the defendant had no statute of limitation defense. In fact, such a "defense" would not have been available until 1999, when the former statute of limitation would have run. The court of appeals found persuasive the decisions of federal and state courts that have concluded that retroactive application of a new statute of limitation, enacted at a time when the old limitation period had not yet run, does not violate the ex post facto clause.

    The supreme court, in a decision authored by Justice Bablitch, unanimously concluded that it could not improve upon the court of appeals' analysis and reasoning as summarized above and, accordingly, it affirmed that decision.

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    Homicide - Year-and-a-Day Rule Abrogated

    State v. Picotte, 2003 WI 42 (filed 16 May 2003)

    The defendant injured John Jackson in an altercation that left Jackson in a coma. The defendant pleaded guilty to aggravated battery and was sentenced to prison. More than two years later Jackson died. The defendant was then prosecuted for first-degree reckless homicide and was convicted and sent to prison. On postconviction motions the defendant claimed that his homicide conviction was barred because it violated the common-law year-and-a-day rule, which establishes an irrebuttable presumption that a death that occurs more than one year and one day after an accused's injury-inflicting act was not caused by the accused. The circuit court denied the motions, and the court of appeals certified the case to the Wisconsin Supreme Court.

    In a majority opinion authored by Chief Justice Abrahamson, the supreme court reversed the decision of the circuit court and held that the homicide conviction in this case is barred by the common-law year-and-a-day rule. The court concluded that: 1) the year-and-a-day rule has been the law of Wisconsin since statehood, preserved through Article XIV, Section 13 of the Wisconsin Constitution; 2) the supreme court has the authority to develop the common law and therefore may abrogate the year-and-a-day rule; 3) the year-and-a-day rule is an archaic rule that no longer makes sense and should be abrogated; and 4) the abrogation of the year-and-a-day rule should be applied prospectively only. The court articulated many reasons for abandoning this 13th-century rule, including advances in modern medicine that permit causes of death to be determined with great certainty.

    Justice Sykes, joined by Justices Wilcox and Crooks, dissented from that part of the majority decision that applies the abrogation of the year-and-a-day rule prospectively only.

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    Criminal Procedure

    Interrogation - Voluntariness

    State v. Hoppe, 2003 WI 43 (filed 22 May 2003)

    Hoppe was charged with the homicide of a female acquaintance. In a suppression hearing, the trial judge suppressed as involuntary various statements made by Hoppe to police officers during the course of the investigation. Although the judge found that the officers had not engaged in any "egregious actions," their conduct had nonetheless coerced Hoppe, whose chronic alcoholism and other problems left him in a "vulnerable" mental state. The court of appeals affirmed.

    The supreme court, in a decision authored by Justice Bradley, also affirmed. In setting forth the well-established "totality of the circumstances" test, the court observed "that some coercive or improper police conduct must exist in order to sustain a finding of involuntariness." Yet case law does not require that the police conduct be "egregious or outrageous" (¶46). Hoppe suffered "from cognitive impairment associated with his chronic alcoholism" (¶48). Conceding that the facts before it were "unique," the supreme court upheld the trial judge's factual findings, which were based on an audiotape of the interrogation and expert evaluations of Hoppe's fragile mental state while he was being interrogated. Of particular importance were the absence of any Miranda warnings and the increasingly "direct and accusatory" tone of successive interrogations.

    Justice Sykes, joined by Justice Prosser, dissented, because there was "no evidence of coercive or improper conduct here" (¶69).

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    Informants - Privilege

    State v. Vanmanivong, 2003 WI 41 (filed 14 May 2003)

    A jury convicted the defendant of eight counts of delivering cocaine. The court of appeals reversed five of the convictions and remanded the case for a hearing as to whether the identities of two confidential informants should have been disclosed.

    The supreme court, in an opinion written by Justice Wilcox, reversed the court of appeals. Acknowledging the case's factual and legal "complex[ity]," the court focused on two issues (¶15). The first issue was whether the court of appeals applied the correct standards in reversing the five counts. The supreme court "reaffirm[ed]" its earlier holding in State v. Dowe, 120 Wis.2d 192 (1984) that the "concurrence" in State v. Outlaw, 108 Wis.2d 112 (1982) "states the test to be applied in determining whether an informant's identity must be disclosed. Based on the language of the concurrence, a defendant must show that an informer's testimony is necessary to the defense before a court may require disclosure" (¶24). The "necessity" standard requires the defendant to demonstrate that the evidence sought "could create reasonable doubt."

    The court then set forth the procedures to use when determining whether informants' identities should be disclosed. "Once a defendant has made an initial showing that there is a reasonable probability that an informant may be able to give testimony necessary to the fair determination of the issue of guilt or innocence, the state has the opportunity to show, in camera, facts relevant to determining whether or not the informant can, in fact, provide such testimony. If, and only if, the court determines that an informer's testimony is necessary to the defense in that it could create a reasonable doubt of the defendant's guilt in jurors' minds, must the privilege give way" (¶ 32).

    The second issue concerned the procedures employed by the circuit court in this case. The supreme court held that the judge erred by "independently requesting additional information from law enforcement" and later reviewing a detective's unsworn memo (¶34). Nonetheless, the error was harmless because "[t]he jury had before it the same information it would have had if the procedural errors had not occurred" (¶49).

    Chief Justice Abrahamson, joined by Justice Bradley, dissented, on the grounds that the court of appeals correctly concluded that a remand was essential so that Wis. Stat. section 905.10 can be properly applied, and that the majority's opinion "leaves the correction interpretation of § 905.10(3)(b) in doubt" (¶72).

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    Double Jeopardy - Manifest Necessity

    State v. Seefeldt, 2003 WI 47 (filed 28 May 2003)

    The defendant was charged with assorted criminal counts involving drug possession and carrying a concealed weapon. During defense counsel's opening statement, the prosecutor objected that a reference to 15 open arrest warrants for "Bart," a key witness for the state, violated "a pretrial order prohibiting the introduction of other acts evidence." The court held a hearing at which it decided that defense counsel's reference had indeed violated an earlier ruling and that a mistrial was warranted. The judge also disqualified the defendant's trial counsel.

    Later, a second trial was commenced and the defendant was convicted. The court of appeals reversed the conviction because the state had failed to demonstrate that a "manifest necessity" justified the mistrial; hence, the second trial violated the defendant's right of double jeopardy.

    The supreme court, in an opinion written by Justice Bradley, affirmed the court of appeals. On this record the trial judge failed to exercise the "sound discretion" required by case law. "First, the existence of Bart's 15 warrants would likely have been admissible during trial and the record does not reflect that the judge considered whether the evidence would ultimately be admissible. Second, the trial judge did not provide sufficient opportunity for the parties to present, and for the judge to consider, arguments regarding whether a mistrial should be ordered and the possible alternatives to a mistrial" (¶38). In sum, a defense counsel's violation of a pretrial order "is not a basis for a mistrial unless the violation creates that high degree of necessity required by the double jeopardy clause" (¶40).

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    Family Law

    Child Support - Arrearages

    State v. Hamilton, 2003 WI 50 (filed 30 May 2003)

    The father and mother were divorced in 1970, and the father was ordered to pay child support. The child support order was amended in 1977. In 2000, the state filed this action to collect child support arrearages from the father. The issue presented by this case was whether the state, as the assignee of the father's deceased wife, timely filed this action. Specifically, "(1) Does Wis. Stat. § 893.40 (2001-2002) apply to independent actions to collect child support not paid after July 1, 1980, and (2) if § 893.40 applies, when does the 20-year limitations period in the statute begin to run?" (¶3)

    The supreme court, in an opinion authored by Justice Prosser, held that "Wis. Stat. § 893.40, which became effective on July 1, 1980, governs the time within which a party may bring an independent action to collect child support arrearages that accumulated after the statute's effective date. In addition, [the court] conclude[d] that, under the statute, an action brought to enforce a child support judgment must be commenced within 20 years of the date when the judgment is entered. The period of limitation begins to run upon entry of judgment, irrespective of whether any payment under that judgment has been missed" (¶4).

    Since the last child support judgment was entered in November 1977, the state had until November 1997 to begin this action to collect arrearages that incurred after 1980. Thus, the 2000 action was untimely. The state had "ample time" to bring this action (¶43), because subsequent changes in law have mitigated the "seemingly harsh result from applying § 893.40 in the context of child support judgments" (¶46). For example, "[a] party to whom child support is owed need not wait until the youngest child reaches majority before going to court to enforce collection" (¶46) and "contempt proceedings remain a viable option" (¶47).

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    Insurance

    Bad Faith - Punitive Damages

    Trinity Evangelical Lutheran Church v. Tower Ins. Co., 2003 WI 46 (filed 23 May 2003)

    Trinity Evangelical Church and School sought to renew its "hired and non-owned automobile insurance coverage" because its teachers occasionally transported students. Its insurance agent, however, "inadvertently failed" to check the appropriate box on the application, and thus the policy omitted the requested coverage. The mistake was uncovered in 1995, when a teacher transporting students caused a serious accident. The insurance agent contacted Tower, the insurer, documented the mistake, and requested that Tower backdate coverage for Trinity. Tower refused to do so despite several requests.

    The circuit court ruled that Trinity was entitled to reformation of the insurance contract as a matter of law. The court also granted summary judgment, because the court found that Tower had engaged in bad faith. A jury awarded Trinity $3.5 million in punitive damages. The court of appeals affirmed the punitive damages award but concluded that issues of fact relating to the bad faith claim had to be resolved in a new trial.

    The supreme court, in an opinion written by Justice Crooks, affirmed in part and reversed in part. First, the circuit court had properly granted summary judgment on the issue of bad faith. "It is clear that Tower, knowing of the mutual mistake, failed to take 'honest, intelligent action or consideration based upon knowledge of the facts and circumstances' presented to it when it denied coverage to Trinity. Tower also failed to take such action or consideration when it failed to inform the court of [the agent's] error and his request for backdating. As a result, Tower failed to act in conformity with its duties" (¶42) (citation omitted).

    The court also affirmed the multimillion dollar punitive damages award and set forth the appropriate standard for de novo review, based on Wisconsin and federal case law. "[I]n determining whether an award of punitive damages is excessive, the United States Supreme Court has applied a three-part test. The test asks the reviewing court to weigh: (1) the degree of egregiousness or reprehensibility of the conduct; (2) the disparity between the harm or the potential harm suffered and the punitive damages award; and (3) the difference between the punitive damages and the possible civil or criminal penalties imposed for the conduct" (¶52) (citations omitted). Applying this standard to the facts of this case, the court observed, for instance, that the punitive damages award represented a 7:1 ratio of punitive damages to compensatory damages based on Trinity's evidence (¶65).

    Justice Prosser dissented separately on the matter of the propriety of summary judgment on this record. Justice Sykes, joined by Justices Prosser and Wilcox, also dissented, on the ground that the court of appeals had correctly remanded the case for a trial on the bad faith issue. The dissenters also would have overturned the punitive damages award itself.

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    Jury Trials

    Juror Qualification - English Comprehension

    State v. Carlson, 2003 WI 40 (filed 13 May 2003)

    A jury convicted Carlson of second-degree sexual assault. He brought a postconviction motion for a new trial on the ground that one juror lacked an adequate understanding of the English language. The trial court denied the motion, and the court of appeals affirmed.

    In a decision authored by Justice Crooks, the supreme court reversed the court of appeals and held that the juror's inadequate grasp of English violated statutes and necessitated a new trial. The postconviction hearing had established that the juror failed to meet the statutory qualifications for jury service set forth in Wis. Stat. section 756.02. The juror's own qualification questionnaire "unequivocally" indicated that he could not understand English, a deficiency further demonstrated by the juror's postconviction testimony (¶22).

    Moreover, the trial court "erred as a matter of law in finding that [the juror's] English comprehension was statutorily sufficient" (¶26). In particular, the trial court erroneously emphasized the juror's "citizenship status" and his "survival level" of English comprehension (¶30). Finally, the error was not harmless. "An ability to understand the English language is necessary in order to satisfy the statutory requirements of Wis. Stat. § 756.02 and § 756.04. If a juror cannot meet the statutory requirements, then the entire trial process may be nothing more than an 'exercise in futility'" (¶47).

    Chief Justice Abrahamson, joined by Justice Bradley, concurred but wrote separately to emphasize that this case involved a "straightforward example of error for failure to comply with a clear, mandatory statute"; thus, it was unnecessary to set a "statutory threshold for English language comprehension" (¶ 50). Also, the concurring justices said that the majority applied the wrong harmless error standard.

    Justice Sykes dissented. "Because the statutory error did not result in an unqualified juror being empanelled on the defendant's case, it appears beyond a reasonable doubt that the error did not contribute to the verdict within the meaning of [prior case law]" (¶90).

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    Municipal Law

    Police and Fire Commission Disciplinary Hearings - Use of Hearing Examiners Permitted

    Conway v. Board of Police & Fire Commissioners, 2003 WI 53 (filed 3 June 2003)

    Wis. Stat. section 62.13(1) and (2)(a) requires cities with a population over 4,000 to establish a board of police and fire commissioners. Section 62.13(5) specifies the procedures that must be followed in disciplinary actions against subordinates employed in the police and fire departments of those municipalities. The statute concludes with an explicit authorization for police and fire commissions to adopt additional rules for the administration of disciplinary proceedings. See Wis. Stat. § 62.13(5)(g).

    The Board of Police and Fire Commissioners of the city of Madison adopted a rule that permits hearing examiners, who are not necessarily board members, to conduct both initial and evidentiary hearings in police and fire department disciplinary cases. After taking evidence in the case, the hearing examiner must prepare a comprehensive report for the police and fire commission, including an evaluation of witness credibility and demeanor and recommendations for disposition of the matter. The hearing must be videotaped, and a certified transcript of the hearing must be prepared. After these materials are submitted, the board may require further proceedings in front of either the hearing examiner or the board itself. Ultimately, the board - not the hearing examiner - makes the final decision and determines the disposition of the disciplinary case.

    A Madison Fire Department employee challenged the rule allowing for the use of a hearing examiner, claiming that the rule exceeds the fire and police commission's authority under section 62.13(5). The circuit court agreed. However, the court of appeals reversed. See 2002 WI App 135. The court of appeals concluded that the board had the authority under section 62.13(5)(g) to adopt a rule permitting a hearing examiner to carry out the tasks described above, including conducting initial and evidentiary hearings and making a report to the board on the examiner's recommendations. The court of appeals said that the rule "provides practices and rational techniques employed to aid the board [of police and fire commissioners] in fulfilling the objective of providing public [disciplinary] hearings as required by § 62.13(5)" (¶ 13).

    In a majority decision authored by Justice Crooks, the supreme court affirmed the court of appeals. It held that the disputed rule plainly comes within the board's express authority to promulgate rules for the administration of Wis. Stat. section 62.13(5) and is consistent with the overall purpose of the statutes. The board's authority to enact a rule allowing hearing examiners to conduct evidentiary hearings is grounded in the express authorization found in section 62.13(5)(g). Said the court, "none of the elements of due process in quasi-judicial administrative hearings are compromised by the appointment of a hearing examiner for the purposes [described above] because the Board, not the hearing examiner, makes the final decision and disposition" (¶ 41).

    The majority concluded that its decision is consistent with the supreme court's prior decisions leaving the means of carrying out administrative duties in the hands of the agency involved whenever possible. It is also consistent with the legislature's intent that sections 62.01 to 62.26 be liberally construed in favor of the rights, powers, and privileges of cities, as long as the construction is compatible with the constitution and general law. See Wis. Stat. § 62.04.

    Chief Justice Abrahamson filed a dissenting opinion that was joined by Justices Bablitch and Bradley.

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    Power of Police Departments to Promote Officers to a Higher Rank on a Probationary Basis - Reduction in Rank When Promoted Employee Fails to Successfully Complete a Probationary Period for Performance-Based Reasons - No Right to Just Cause Hearing before Police and Fire Commission

    Kraus v. Waukesha Police & Fire Comm'n, 2003 WI 51 (filed 30 May 2003)

    A Waukesha police officer was promoted to the position of sergeant "subject to successfully completing the one-year probationary period." Near the end of that probation, the police chief advised the police and fire commission and the officer that the officer had not successfully completed the probation for the position of police sergeant and that he was reappointing the employee to the rank of patrol officer. The failure was performance-based. The employee requested a "just cause" due process hearing in front of the police and fire commission pursuant to Wis. Stat. section 62.13(5)(em), which provides that "no subordinate may be suspended, reduced in rank, suspended and reduced in rank, or removed by the board [of police and fire commissioners] ... unless the board determines whether there is just cause... to sustain the charges."

    The Waukesha Police and Fire Commission denied the employee a hearing and the employee appealed. The circuit court affirmed the commission's decision and the court of appeals certified the officer's appeal to the supreme court, which granted certification. In a majority decision authored by Justice Prosser, the supreme court affirmed the circuit court's decision.

    The supreme court began its analysis by addressing the question certified to it by the court of appeals as to whether police chiefs and police and fire commissions have the authority to promote officers on a probationary basis. The court held that such authority does exist, provided that the probation is reasonable in duration. In this case, the court concluded that a one-year probationary period is reasonable.

    The supreme court further held that if, during the probation following a promotion, a chief concludes that an officer's performance is inadequate or that some other lawful, non-disciplinary reason militates against the officer serving in the higher rank, the chief and the commission may return that officer to the officer's prior rank without a hearing before the commission under section 62.13(5)(em). In this regard, the court contrasted the case of Antisdel v. Oak Creek Police and Fire Commission, 2000 WI 35, wherein it held that when a police officer is promoted subject to probation and then demoted during the probationary period based on disciplinary charges, the officer is entitled to a just cause hearing before the police and fire commission under section 62.13(5)(em).

    Finally, the court concluded that an officer who is promoted on a probationary basis but returned during the probation to his or her prior rank for non-disciplinary reasons does not possess a constitutionally protected property interest in the higher rank that would require an alternative type of due process hearing.

    Chief Justice Abrahamson filed a dissenting opinion.

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    Firefighter Promoted on a Probationary Basis - Return to Former Rank for Failure to Successfully Complete Probation for a Non-Disciplinary Reason - Arbitration Not Available

    City of Madison v. Wisconsin Employment Relations Comm'n, 2003 WI 52 (filed 30 May 2003)

    A Madison Fire Department employee had worked as a firefighter for approximately 18 years when he was promoted to the position of fire apparatus engineer, subject to successful completion of a one-year probationary period. After the employee had been on probation for 11 months, the fire chief informed him that his probation had been revoked and that he was reduced to his former rank of firefighter.

    The firefighter filed a grievance seeking reinstatement to the rank of fire apparatus engineer and back pay and benefits associated with the higher rank. The city of Madison declined to arbitrate the grievance, on the grounds that the Wisconsin Statutes and the collective bargaining agreement prohibited arbitration of this issue. The union then filed a prohibited practices complaint with the Wisconsin Employment Relations Commission (WERC). WERC held that the city was obligated to arbitrate the grievance and ordered it to do so. The city sought review in the circuit court, which affirmed WERC's order.

    The city appealed to the court of appeals, which certified the case to the supreme court on two issues: 1) whether a firefighter who is promoted on a probationary basis but is returned to his or her former rank for failing to successfully complete probation for a non-disciplinary reason is entitled to a just cause hearing under Wis. Stat. section 62.13(5)(em); and 2) whether the fire chief's decision that a firefighter has not successfully completed probation and therefore is ineligible for a promotion is subject to arbitration.

    In a majority decision authored by Justice Sykes, the supreme court reversed the circuit court. With regard to the first certified question, the court concluded, as it did in Kraus v. City of Waukesha Police and Fire Commission, 2003 WI 51 (summarized above) that a police or fire chief may promote employees on a probationary basis and that the "just cause" hearing provisions of section 62.13(5)(em) are not available when an officer promoted on a probationary basis is returned to his or her prior rank for failing to successfully complete probation for non-disciplinary reasons.

    With regard to the second certified question, the supreme court concluded that, given the authority vested in the fire chief under section 62.13, as specifically recognized in the parties' collective bargaining agreement, an arbitrator may not substitute his or her judgment for the chief's determination that a firefighter under the chief's command has not successfully completed probation and is therefore not qualified to advance from probationary promotion status to the permanent rank.

    Fire and police chiefs and commissions are exclusively empowered to make, and are responsible for, appointment and promotion decisions under section 62.13 in order to "secure the best service" in their respective departments. The supreme court concluded that this statutory scheme does not contemplate that an arbitrator may overrule decisions that are specifically entrusted to the chief and to the commission, and that nothing in the Municipal Employment Relations Act (Wis. Stat. § 111.70) requires such an interpretation of section 62.13.

    Moreover, said the court, "the collective bargaining agreement in this case specifically excludes disputes regarding management rights under § 62.13 from arbitration, and any interpretation of the agreement that would effectively transfer to an arbitrator the statutory authority of the chief and the [police and fire commission] to make appointment and promotion decisions would clearly conflict with § 62.13" (¶ 33).

    Chief Justice Abrahamson filed a dissenting opinion that was joined by Justices Bablitch and Bradley.

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    Real Property

    Environmental Contamination - Liability of Asset Sellers and Buyers

    Columbia Propane L.P. v. Wisconsin Gas Co., 2003 WI 38 (filed 13 May 2003)

    In this action Columbia Propane sought to hold Wisconsin Gas Co. liable for environmental contamination on real estate now owned by Columbia Propane. The contamination was allegedly caused by People's Gas Co., a prior owner of the real estate, which sold the property to Wisconsin Gas in 1960 under an asset purchase agreement. Columbia Propane later purchased the property from Wisconsin Gas.

    The state brought an action against Columbia Propane for the contamination caused by People's Gas. Columbia Propane then brought an action against Wisconsin Gas, alleging that Wisconsin Gas was liable for the environmental contamination because Wisconsin Gas had assumed all People's Gas liabilities when it purchased the People's Gas assets.

    The circuit court entered summary judgment in favor of Wisconsin Gas. However, the court of appeals reversed, concluding that the language in the asset purchase agreement between People's Gas and Wisconsin Gas was ambiguous regarding whether Wisconsin Gas agreed to assume unknown tort liabilities. See 2002 WI App 9.

    In a unanimous decision authored by Justice Bablitch, the supreme court reversed the court of appeals.

    The supreme court framed the issue as whether a company that acquires the assets of another company via an asset purchase agreement is liable for the liabilities of the selling company that are unknown to either party at the time they enter into the agreement. In this case the court concluded that Wisconsin Gas did not assume People's Gas liabilities that were unknown to either party at the time they entered into the asset purchase agreement. The court based this conclusion on 1) the general rule of non-liability for purchasing corporations in the context of asset purchase agreements, 2) the express language in the asset purchase agreement between Wisconsin Gas and People's Gas, and 3) the common interpretation and use of asset purchase agreements in the business community.

    With respect to asset purchase agreements, the court specifically stated that "it is important that we not blur, but rather maintain, the well-established and fundamental distinction between an asset purchase and a stock purchase. As described by one commentator, 'asset purchases feature the advantage of specifying the assets to be acquired and the liabilities to be assumed'" (¶ 22, citing 10 U. Miami Bus. L. Rev. 145 (2002)). The court went on to quote the following from the same source:

    "An important reason for structuring an acquisition as an asset transaction is the desire on the part of a buyer to limit its responsibility for liabilities, particularly unknown or contingent liabilities.

    "Unlike a stock purchase or statutory combination, where the acquired corporation retains all of its liabilities and obligations, known and unknown, the buyer in an asset purchase has an opportunity to determine which liabilities of the seller it will contractually assume" (Id.).

    Justice Wilcox did not participate in this decision.

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