Vol. 77, No. 2, February
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
Late Payment of Wages - Civil Penalties
Hubbard v. Messer,
2003 WI 145 (filed 20 Nov. 2003)
Wis. Stat. section 109.03(1) provides as follows: "Every employer
shall as often as monthly pay to every employee engaged in the
employer's business, except those employees engaged in logging
operations and farm labor, all wages earned by the employee to a day not
more than 31 days prior to the date of payment." In this case the
circuit court granted summary judgment to the plaintiff employee,
concluding that because certain wages were due and unpaid on the
deadline set by the statute quoted above, the employer owed the employee
a civil penalty pursuant to section 109.11(2), which governs wage claim
The court of appeals reversed, concluding that section 109.11(2)(b)
imposes civil penalties only if wages are due and unpaid after the
employer is delinquent for more than 31 days and remain unpaid at the
time a circuit court action commences. In the view of the court of
appeals, if an employer belatedly pays wages in full before commencement
of a circuit court action, the employee does not have an action for
In a majority decision authored by Chief Justice Abrahamson, the
supreme court affirmed the court of appeals. It held that section
109.11(2)(b) does not impose civil penalties when wages due an employee
have been fully paid at the time a circuit court action is commenced.
This interpretation of the statute, said the court, "best balances the
legislature's goals of encouraging employers to pay wages promptly,
facilitating the rapid administrative disposition of disputes, and
bringing finality to settlements brokered by the parties on their own or
in the administrative process" (¶ 42).
Justice Roggensack filed a concurring opinion that was joined by
Justices Wilcox and Crooks.
Evictions - Notice of Appeal - Timeliness
Highland Manor Assoc. v.
Bast, 2003 WI 152 (filed 30 Dec. 2003)
After the circuit court denied Bast's motion to reconsider an
eviction judgment, Bast filed a notice of appeal from that order. The
court of appeals dismissed the appeal because the notice was
The supreme court, in an opinion authored by Chief Justice
Abrahamson, affirmed. The first issue was "whether a tenant defendant in
a small claims eviction proceeding may move for reconsideration of a
judgment of eviction against the tenant[.]" Examining the interplay
between Wis. Stat. sections 799.445 and 805.17(3), the court held "that
the considerations favoring motions for reconsideration outweigh any
considerations not favoring such motions, and that a tenant's motion for
reconsideration of an eviction judgment is compatible with small claims
procedure and practice in eviction actions. Thus, a tenant against whom
an eviction judgment has been rendered in a small claims eviction action
may bring a motion to reconsider the judgment under Wis. Stat. §
805.17(3)" (¶ 19) (note omitted).
The second issue was "whether a motion for reconsideration extends
the tenant's time to appeal from a judgment of eviction prescribed by
Wis. Stat. § 799.445." The court held that it did not extend the
time for filing. "The conflict between Wis. Stat. §§ 799.445
and 805.17(3) regarding the time of appeal of a judgment of eviction is,
we conclude, resolved by § 799.04. As we explained previously,
§ 799.04 provides that, except as otherwise provided in chapter
799, the general rules of practice and procedure in chapters 750 to 758
and 801 to 847 apply to actions and proceedings under chapter 799. As we
have shown, § 799.445 does explicitly provide the allowable time
for appeal from a judgment of eviction, and it therefore trumps the time
for appeal set forth in § 805.17(3). We need go no further. Under
Wis. Stat. § 799.445, a tenant must appeal from a judgment of
eviction within 15 days of judgment, and Wis. Stat. § 805.17(3)
does not extend the time for initiating an appeal from an eviction
judgment" (¶ 25).
Disability - Bad Faith - Appellate Review
Brown v. LIRC, 2003
WI 142 (filed 18 Nov. 2003)
A meat cutter working at a grocery store suffered a compensable back
injury in 1993 and reinjured his back in 1995. The insurer paid
temporary total disability benefits until early 1996, when it suspended
payments based on allegations that the employee was working elsewhere
and not reporting the income. Litigation ensued, and the employee won
his case for continuation of benefits. The issue in this litigation is
whether the employee is entitled to additional penalty payments based on
"bad faith." The circuit court affirmed LIRC's conclusion that there was
no bad faith, but the court of appeals reversed.
The supreme court, in an opinion authored by Chief Justice
Abrahamson, reversed the court of appeals. The issue before the court
was whether "LIRC's conclusion of law - that the employee's claim for
benefits was fairly debatable and that the insurer's suspension of
benefits did not constitute bad faith under Wis. Stat. § 102.18(1)
(bp) and Wis. Admin. Code § DWD 80.70(2) - should be affirmed"
(¶3). The appropriate standard of review was "great weight
deference," because LIRC "has developed extensive experience
interpreting penalty provisions contained in the Worker's Compensation
Act" (¶ 18). Accordingly, "a court will refrain from substituting
its view of the law for that of an agency charged with administration of
the law and will sustain the agency's conclusions of law if they are
The court then set forth the standard for defeating a bad faith claim
under worker's compensation law: in essence, whether the insurer
exercised ordinary care in investigating the facts and law "and
reasonably conclude[d] that the claim is fairly debatable" (¶29).
Here the record supported - but just barely - LIRC's determination that
the insurer's conduct, although by no means exemplary, did not
constitute "bad faith." The insurer conducted a "brief, inconclusive
investigation" before it suspended the employee's benefits. Although the
supreme court upheld the LIRC finding in this case, the court warned
that the insurer's actions pushed "very near the limit of what the great
weight deference level of review will bear" (¶52).
Easements of Necessity - Exercise of Judicial Discretion
Schubring, 2003 WI 149 (filed 26 Nov. 2003)
This case, which concerns easements of necessity, was before the
supreme court on certification from the court of appeals.
The first certified question was whether an easement of necessity
arises by operation of law once the elements required for the easement
have been established, or whether its creation is subject to the
discretion of the circuit court. In a decision authored by Justice
Roggensack, the supreme court concluded that an easement of necessity
generally does not arise as a matter of law, but rather, through the
exercise of a circuit court's discretion.
In Wisconsin, an easement of necessity may arise in favor of a
property owner who can prove the following elements: 1) common ownership
of the proposed servient and dominant estates at the time of the
severance that created the landlocked condition, and 2) the landlocked
parcel had no access to a public roadway after it was severed and such
lack of access continues. Although these elements must be established
before an easement of necessity may arise, they may not be sufficient to
support an easement of necessity in every case. Judicial creation of an
easement is inherently equitable in nature, and equitable decisions are
Accordingly, said the court, "our decisions in regard to easements of
necessity should not be read to imply that an easement of necessity
always arises as a matter of law whenever the two required elements are
proved because the equities that drive the creation and the scope of an
easement may vary, requiring the circuit court to weigh the burdens and
benefits the easement would create" (¶ 15). [The court then
proceeded to provide a number of examples that could affect the way in
which a circuit court weighs the burdens and benefits.]
The second certified question before the supreme court was whether an
easement of necessity may be afforded to a grantor of real estate who
formerly had access to a public way and who retains a landlocked parcel
after the severance of a portion of the property. The court concluded
that "one who stands in the shoes of a grantor who formerly had access
to a public highway but after the severance of a portion of his land
retained a landlocked parcel, may obtain an easement of necessity"
(¶ 2). The court believed this conclusion to be in accord with
legal treatises that have concluded that both grantees and grantors may
seek an easement of necessity.
Applying these principles to the facts of the case before it, the
court concluded that the circuit court judge did not erroneously
exercise his discretion in granting an easement of necessity.
Justice Wilcox did not participate in this decision.
Wis. Stat. Section 70.11(4) Property Tax Exemption - Lessee Identity
Columbus Park Housing Corp.
v. City of Kenosha, 2003 WI 143 (filed 19 Nov. 2003)
Columbus Park Housing Corp. is a nonstock, nonprofit Wisconsin
corporation that acquires and rehabilitates blighted property in Kenosha
and leases it to qualified low-income families. It is a benevolent
association within the meaning of Wis. Stat. sec. 70.11(4); its mission
is to improve the living conditions of the poor and underprivileged in
Kenosha by providing safe, affordable housing.
Columbus Park's rental units are occupied by individuals with
annualized incomes below the federal poverty level. Columbus Park uses
the rental income from its leased properties, in part, for maintenance
and construction debt reduction of its leased properties. Columbus Park
participates in the federal rent subsidy program. It charges its tenants
30 percent of their income and receives subsidies from the federal
government through the Kenosha Housing Authority, which brings the rents
to reasonable market rates.
This case concerns property taxes that were levied by the city on
properties that had been rehabilitated and were rented to low-income
individuals or awaiting occupancy. The circuit court found that Columbus
Park was exempt from property taxes under section 70.11(4), a decision
that was affirmed by the court of appeals. In a majority decision
authored by Justice Wilcox, the supreme court reversed the court of
Wis. Stat. section 70.11(4) exempts from taxation "property owned and
used exclusively by . . . benevolent associations . . . but not
exceeding 10 acres of land necessary for location and convenience of
buildings while such property is not used for profit." The introductory
section of section 70.11 provides as follows: "Leasing a part of the
property described in this section does not render it taxable if the
lessor uses all of the leasehold income for maintenance of the leased
property, construction debt retirement of the leased property or both
and if the lessee would be exempt from taxation under this chapter
if it owned the property" (emphasis supplied). The emphasized
language codifies what is known as the "lessee identity condition."
The supreme court concluded that Columbus Park is not entitled to a
tax exemption under section 70.11(4) because it cannot satisfy the
lessee identity requirement. The lessees - the low-income individuals to
whom Columbus Park rents - would not qualify under section 70.11 as tax
exempt if they owned the property, because section 70.11 only exempts
property owned by certain organizations and institutions that meet the
statutorily specified criteria.
The court also addressed and rejected a number of additional
arguments raised by Columbus Park. It declined to construe the lessee
identity condition of the statute as applying only when a benevolent
association leases property to a for-profit business entity. It also
rejected an invitation to carve out an exception to the lessee identity
condition under which this condition would not apply if the lessees are
the objects of the organization's benevolence. The court said that
whether an organization should benefit from a tax exemption is a policy
decision that is within the province of the legislature.
Chief Justice Abrahamson filed a dissenting opinion.
Personal Property Tax - Equipment - Exemptions
Village of Lannon v.
Wood-Land Contractors Inc., 2003 WI 150 (filed 4 Dec. 2003)
A village brought this action to collect personal property taxes owed
by a contractor, which claimed that its equipment was tax-exempt under
Wis. Stat. section 70.111(20) (1999-00). The circuit court granted
summary judgment in favor of the village. The court of appeals affirmed.
The primary issue concerned whether the taxpayer was entitled to claim
an exemption for equipment.
In an opinion authored by Justice Bradley, the supreme court reversed
and remanded the action. The supreme court held that the lower courts
erred when they applied a test that focused on the "primary purpose" of
the business (¶ 40). Rather, the applicable test is one that looks
to the "use of the equipment" (¶ 42). Here the contractor was
engaged in cutting and clearing trees on customers' property. On remand
the circuit court is to consider what equipment is used: "(1) to cut
trees for the commercial use of forest products, (2) to transport trees
in logging areas for the commercial use of forest products, or (3) to
clear land of trees for the commercial use of forest products. [The
taxpayer] will bear the burden of proving entitlement to the exemption"
Chief Justice Abrahamson concurred but stated that she thought the
court of appeals correctly stated the test, that summary judgment was
improper, and that the matter should have been remanded for trial.
Justice Prosser also concurred but wrote separately to address the
directive that property tax exemptions are to be "strictly
Justice Roggensack, joined by Justices Crooks and Wilcox, also
concurred and wrote separately because the majority's statutory analysis
"departs" from prior precedent.
Furnishing Alcohol - Immunity - Minors
Anderson v. American Family
Mut. Ins. Co., 2003 WI 148 (filed 25 Nov. 2003)
A mother gave her teenage son a 1.75 liter bottle of vodka. The boy
took the vodka to the family's cottage, where he and several friends
drank it. One friend, Craig, died of acute alcohol intoxication, and
this litigation ensued. The circuit court dismissed the complaint based
on statutory immunity. The court of appeals reversed.
The supreme court, in a decision authored by Justice Sykes, affirmed
the court of appeals. The sole issue was "whether an underage drinker
who is injured as a result of the consumption of alcohol that was
provided to a companion underage drinker is an injured 'third party'
under the exception to immunity" (¶2). First, the mother was a
"provider" for purposes of the exception to immunity found in Wis. Stat.
section 125.035(4) "because she gave her underage son . . . a bottle of
vodka while he was unaccompanied by a parent, in violation of Wis. Stat.
§ 125.07(1)(a)" (¶12). (The court rejected the mother's
contention that Craig himself was a "provider" because he had
voluntarily consumed the vodka.)
"By its terms . . . the exception to immunity under Wis. Stat. §
125.035(4)(b) applies when: 1) the injured person is a third party to
the provider's act of furnishing alcohol to an underage person when the
provider knew or should have known the person was underage; and 2) the
alcohol was a substantial factor in causing the third party's injury"
(¶18). Nothing in the record suggested that Craig "had any role
whatsoever" in the mother's decision to give the alcohol to her son;
thus, Craig was a "third party" to that "transaction" (¶19). (Nor
was there any dispute that the alcohol was a "substantial factor" in
The court also addressed its construction of the exception to
immunity in light of prior cases. The statute "does not limit the
exception to certain types of injuries. The fact that Craig died as a
result of alcohol consumption does not itself take this case outside of
the exception"(¶24). Nor is the third-party exception limited by
"status of age, condition of sobriety, or separation of circumstances
from alcohol consumption" (¶25). (Craig's voluntary consumption
will bear, of course, on his contributory negligence.)