Vol. 77, No. 5, May
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
Practice of Law - Hospitals - Peer Review Hearing
Seitzinger v. Community
Health Network, 2004 WI 28 (filed 25 March 2004)
Dr. Seitzinger, a board certified ob-gyn, had his clinical privileges
indefinitely suspended by CHN, a corporation that owned the hospital.
Under CHN bylaws, Seitzinger was entitled to a peer review hearing where
he could defend himself against the allegations that resulted in his
suspension. To assist in his defense, Seitzinger "hired" Dr. Kadar, a
board certified ob-gyn and a member of the New Jersey bar. CHN objected
to Kadar because he was neither a member in good standing of CHN's
medical staff nor licensed to practice law in Wisconsin, as contemplated
by the bylaws. Seitzinger then filed this action for declaratory relief,
which sought to authorize Kadar's participation in his defense. The
circuit court ruled in favor of CHN.
The court of appeals certified two issues to the supreme court. The
first was whether the legal representation of a physician at a peer
review hearing constitutes the practice of law. The second was whether
there should be an exception to the unauthorized practice of law
statute, Wis. Stat. section 757.30, to allow for such
The supreme court, in an opinion written by Justice Crooks, affirmed.
Although the court expressly declined to answer the first certified
issue "as to all peer review hearings," it nonetheless held that, "as a
matter of contract, the words 'legal counsel' as used in the contract in
question are reasonably interpreted to apply only to an attorney
licensed to practice law in Wisconsin. We hold that [CHN's]
interpretation of the words 'legal counsel' in the [hospital bylaws] as
referring to an attorney licensed to practice law in Wisconsin was a
reasonable one. The general rule is that hospital bylaws can constitute
a contract between a hospital and its staff members such as Seitzinger.
Since the reasonable interpretation of the contract would require that a
person representing Seitzinger be an attorney licensed in Wisconsin, and
since the activities that it is reasonable to anticipate Kadar would be
engaging in on behalf of Seitzinger would, at the very least, focus on
legal issues, we conclude that the circuit court properly denied
Seitzinger's motion for declaratory judgment and the petition for
Kadar's admission pro hac vice" (¶ 2). The court further declined
to create an exception to Wis. Stat. section 757.30 that would permit an
attorney unlicensed in Wisconsin to represent a client at a peer review
hearing (¶ 4).
Chief Justice Abrahamson, joined by Justices Bradley and Prosser,
dissented on the ground that the contract did permit Kadar's
participation. In particular, the bylaws did "not envision that the
hearings will require persons knowledgeable in Wisconsin law or
procedure" (¶ 81) and that "laypersons routinely perform the
activities set forth in the bylaws for the peer review hearings in other
contexts, such as governmental administrative hearings" (¶ 82).
Evidence - Experts - Privilege - Alt Rule
Glenn v. Plante,
2004 WI 24 (filed 24 March 2004)
In this medical malpractice action, the trial court restricted
plaintiffs to one medical expert, Dr. Koh, because of a failure to
comply with a scheduling order. Dr. Koh, however, refused to provide
expert opinion testimony, based on the so-called expert privilege set
forth in Burnett v. Alt, 223 Wis. 2d 72 (1999). The trial court
nonetheless found the presence of a "compelling circumstance" (namely,
the plaintiffs would be nonsuited without Koh's expert testimony) and
ordered Koh to testify. A divided court of appeals affirmed.
The supreme court, in a decision authored by Justice Crooks, reversed
and remanded the matter in an opinion that thoroughly evaluates and
clarifies the reach of the Alt rule. First, sweeping assertions
of the privilege or blanket pronouncements that a person will provide no
expert testimony are improper. A proper record requires that the
proponent must articulate particular questions and the opponent clearly
assert the privilege in response. The court held "that Koh should not
have been ordered to give expert opinion testimony in this case, since
the record does not clearly reflect the question or questions to be
asked of Koh, nor was Koh given the opportunity formally to invoke a
privilege not to testify" (¶ 34). Put differently, "[i]t is
necessary to have an exact question or questions requiring expert
opinion testimony, and a clear assertion of a privilege not to provide
such expert opinion testimony, before the circuit court can decide
whether compelling circumstances exist" (¶ 32).
Second, "Alt does not apply to observations made by a
person's treating physician relating to the care or treatment that he or
she provided to the patient, but rather applies to expert opinion
testimony from such a physician as to the standard of care and treatment
provided by another physician" (¶ 34).
Third, "a person who has asserted his or her privilege not to testify
and offer expert opinion testimony can be required to give such expert
testimony only if all of the following factors are present: (1) there
are compelling circumstances present; (2) the party seeking the
testimony has presented a plan for reasonable compensation of the
expert; and (3) the expert will not be required to do additional
preparation for the testimony" (¶ 34). The court declined, however,
to equate "compelling circumstances" with an "outcome determinative"
test, such as whether the action would be dismissed absent the expert's
testimony. Rather, "there must be a link between a finding of compelling
circumstances and the uniquely necessary or irreplaceable opinion
testimony that the expert could provide" (¶ 30). On this record,
there was nothing unique about Koh's testimony regarding the standard of
Finally, "the determination as to whether compelling circumstances
exist involves a discretionary decision by the circuit court judge"
Officers - Creditors - Fiduciary Obligations
Beloit Liquidating Trust v.
Grade, 2004 WI 39 (filed 6 April 2004)
The prime issue in this case concerns the liability of a
corporation's officers and directors to corporate creditors. The circuit
court dismissed a complaint that alleged that the corporation's officers
and directors had breached a fiduciary duty. The court of appeals,
however, reversed, and held that they had a fiduciary duty to corporate
creditors before the entity went out of business.
The Wisconsin Supreme Court, in an opinion written by Justice Crooks,
reversed the court of appeals. First, the court held that Wisconsin law
applied to this action. At issue was the "internal affairs doctrine," a
conflict-of-laws rule that "states that in disputes involving a
corporation and its relationships with its shareholders, directors,
officers, or agents, the law to be applied is the law of the state of
incorporation" (¶ 14 n. 8). "Section 180.1704 puts all corporations
on notice that, when transacting business in Wisconsin, they are subject
to Chapter 180. Given this clear statutory language, and Wisconsin's
failure to adopt the internal affairs doctrine, either by statute or
through case law, we conclude that the language of §180.1704
supports the holding that Wisconsin law should be applied in determining
whether the directors or offices breached their fiduciary duty to Beloit
Corporation's creditors" (¶ 23). The holding garnered further
support "by the choice of law principles articulated in Wisconsin's case
law" (¶ 24).
In addition, Wisconsin law also governs the "fiduciary duties to
creditors" at issue here (¶ 33). "[A] corporation must be both
insolvent and no longer a going concern before a duty is owed to the
corporation's creditors" (¶ 34). The record in this case showed
that the corporation was a "going concern during the relevant time
period." The court also applied the two-year statute of limitation set
forth in Wis. Stat. section 893.57 "because a breach of fiduciary duty
claim involves an intentional tort." (As applied to the facts, no injury
occurred during the pertinent time period.)
Truth-in-Sentencing I - Calculation of Maximum Confinement Term for
State v. Jackson,
2004 WI 29 (filed 26 March 2004)
This case arose under the first phase of Wisconsin's
truth-in-sentencing legislation (TIS-I). TIS-I applied to offenses
committed on and after Dec. 31, 1999. [Note: The second phase
of the state's truth-in-sentencing legislation (TIS-II) took effect on
Feb. 1, 2003, and for most purposes applies to offenses committed on and
after that date.]
The defendant was convicted of the unclassified felony of fleeing an
officer, which at the time carried a maximum term of imprisonment of
three years. Because he was a habitual offender, the defendant faced a
penalty enhancement of up to six years of additional imprisonment.
See Wis. Stat. § 939.62(1)(b). In this opinion the supreme
court addressed how penalty enhancers are applied at sentencing in
determining the maximum term of confinement in prison (that is, the
first portion of a bifurcated sentence) for unclassified felonies under
Under Wisconsin's approach to truth-in-sentencing, a sentence to
prison must be bifurcated into two segments: an initial term of
confinement in prison, followed by a term of extended supervision in the
community. The combined confinement and extended supervision terms equal
the term of imprisonment.
In a majority opinion authored by Justice Bradley, the court began
its analysis by agreeing with an earlier decision of the court of
appeals that penalty enhancers do not increase the maximum extended
supervision term the defendant faces; rather, penalty enhancers increase
the maximum term of confinement and by the same amount the overall term
of imprisonment. See State v. Volk, 2002 WI App 274, 258 Wis.
2d 584, 654 N.W.2d 24.
Next, the supreme court turned to the issue before it regarding the
impact of penalty enhancers on the maximum term of confinement for
unclassified felonies. Wis. Stat. section 973.01(2)(b)6 provides that
for unclassified felonies the term of confinement in prison may not
exceed 75 percent of the total length of the bifurcated sentence. To
apply this statute in the context of this case, the court determined
that the first step is to calculate the total length of the bifurcated
sentence that the defendant faced. In this instance the maximum term of
imprisonment for the unclassified fleeing offense was 36 months. To this
the six-year (72-month) increase for habitual criminality must be added
for a maximum possible bifurcated sentence of 108 months. The 75 percent
rule from the statute quoted above is then applied to the 108 months to
reach the conclusion that the maximum term of confinement for fleeing
enhanced by habitual criminality is 81 months (108 months x 75
In a footnote, the court observed that under TIS-II only a few
unclassified felonies remain (all others being classified in the new
Class A through Class I system adopted as part of the TIS-II
legislation). Therefore, said the court, the 75 percent rule discussed
in the preceding paragraph has limited application for future cases.
See ¶ 37 n. 8.
Within this opinion the court also addressed the defendant's argument
that another charge of which he was convicted, a Class E felony, became
an unclassified offense when a penalty enhancer was tacked onto it. The
court rejected this argument as being "without authority" (¶
Justice Wilcox filed a concurring opinion.
Evidence - Experts - Character
State v. Walters,
2004 WI 18 (filed 9 March 2004)
The defendant was charged with three counts of sexually assaulting a
child. As part of his defense, he proffered so-called Richard
A.P. evidence, which compares the defendant's personality
characteristics with those of known sex offenders for the purpose of
showing he does not fit the "type." The court of appeals reversed and
arguably held that that the admission of Richard A.P. evidence
was compelled by State v. Davis, 2002 WI 75.
The supreme court, in a decision authored by Justice Bradley,
reversed the court of appeals and clarified that Davis does not
compel the introduction of Richard A.P. evidence, which is
entrusted to the trial court's discretion. "Richard A.P.
evidence, like other expert evidence, is subject to the requirements of
the rules governing the admissibility of evidence. These include not
only the rules governing character evidence and expert testimony, but
also Wis. Stat. § 904.03, the rule governing the exclusion of
otherwise relevant evidence" (¶ 25).
Moreover, the record in this case demonstrated that the trial court
had exercised proper discretion. The supreme court concluded that in
light of the nature of the proffered expert testimony, the scope of the
testing, and the length and complexity that such testimony would add to
the case (defense counsel estimated that it would add three days to a
one-day trial), the evidence had "low probative value" and it was
"reasonable for the circuit court to conclude that these dangers
substantially outweighed the probative value of the expert testimony
here" (¶ 41).
Chief Justice Abrahamson dissented. Although she agreed with the
majority's construction of Davis and the discretion entrusted
to trial courts in admitting Richard A.P. evidence, the Chief
Justice concluded that such discretion had been abused in this case and
she would have affirmed the court of appeals.
Impeachment - Prior Criminal Convictions - Waiver
State v. Gary M.B., 2004 WI 33 (filed 26 March
A jury convicted Gary B. of three counts of first-degree sexual
assault. The court of appeals affirmed. The supreme court, in an opinion
written by Justice Wilcox, also affirmed. The main issues involved the
admissibility of three of Gary B.'s five prior convictions for purposes
First, the court addressed the issue of "strategic waiver,"
specifically, whether Gary B. waived his right to challenge the
admissibility of the prior conviction by introducing the evidence
himself after the court overruled his objection to the same proof.
Addressing a conflict in the case law, the court held that "under
Wisconsin law, a defendant does not commit strategic waiver when he
unsuccessfully objects to the introduction of evidence and preemptively
introduces the evidence in an attempt to mitigate its prejudicial
effect" (¶ 18).
Second, the court upheld the admission of the prior convictions for
impeachment purposes as a proper exercise of discretion even though the
ruling comprised just four sentences in the record. Wisconsin law has
long held that "all prior convictions are relevant to a witness's
character for truthfulness," regardless of their nature (¶ 23).
Moreover, the frequency and timing of the convictions (1973, 1975, 1977,
and two in 1991) supported an inference that the defendant's character
had not changed since 1973.
Justice Crooks concurred but concluded that the trial court should
have been affirmed on harmless error grounds.
Chief Justice Abrahamson, joined by Justice Bradley, dissented on
grounds that "the majority opinion eviscerates the notion that a circuit
court's exercise of discretion requires a meaningful process of
reasoning demonstrated on the record and drastically expands the scope
of the independent appellate review doctrine beyond what had been
previously recognized in this state" (¶ 46).
Justice Sykes also dissented on the ground that "[t]here is no record
of any exercise of discretion at all, only the summary invocation of the
statutory presumption of admissibility" (¶ 86).
Modification of Maintenance - Support and Fairness Objectives
Baumgart, 2004 WI 27 (filed 25 March 2004)
The parties to this divorce action were married in 1973. During their
marriage they had four children. The wife worked inside the home and was
primarily responsible for the care of the children, while her husband
was employed outside the home. They were granted a judgment of divorce
in 1992. While many of the issues in the divorce were resolved by
stipulation, the issue of maintenance for the wife was contested.
At the time of the divorce proceedings, the wife was taking classes
at a local college and grossing approximately $8,800 per year as a group
counselor. She expected to receive her degree in two years. Her goal was
to teach special needs children, and she anticipated that she could earn
between $22,000 and $28,000 per year. She expected that the maximum
amount of income she could earn would be $40,000 per year, approximately
15 years after entering the work force. When considering the appropriate
amount of maintenance to award, the judge also considered the fact that
the wife suffered from a variety of physical ailments: depression, poor
health, chronic back pain, a prediabetic condition, arthritis in her
hands, tendonitis in her feet, and basic fatigue. At the time of the
divorce, the husband had an M.B.A., which he had obtained during the
early part of the parties' marriage, and was earning $93,000 per year.
The circuit court concluded that the circumstances were appropriate for
an award of indefinite term maintenance in the amount of $950 per
In 2001 the husband brought a motion to terminate maintenance. The
circuit court concluded that a substantial change in circumstances was
present such that terminating maintenance after two more years was
appropriate. The court found inter alia that the wife had completed her
educational objectives, was earning more than her anticipated maximum
salary (her gross income from employment was about $57,000), and was now
able to closely approximate the marital standard of living without
maintenance, provided that she was willing to tighten up her
expenditures with respect to her adult children. In 2001 the husband was
earning approximately $106,000 per year.
The wife appealed, arguing that the circuit court erred in
terminating maintenance. Among her specific complaints was that the
judge erroneously concluded that she could live at the marital standard
of living without maintenance, failed to factor in the financial support
she was providing to her adult child for education expenses, and failed
to properly apply the fairness objective of maintenance. The court of
appeals affirmed the circuit court.
In a majority decision authored by Justice Crooks, the supreme court
affirmed. It concluded that "there was sufficient evidence from which
the circuit court could reasonably find a substantial change in the
parties' circumstances, and from which the court could conclude that
such circumstances justified the termination of maintenance after two
more years. The test for whether there is a substantial change in
circumstances is the same, regardless of whether or not the issue of
maintenance was stipulated to or contested during the divorce
proceedings. The objectives of support and fairness must
both be considered on the issue of modification of a
maintenance award as well, whether there was a stipulation or a contest
in the original proceedings" (¶ 2) (emphasis supplied).
While a change in circumstances regarding the support objective of
maintenance frequently gives rise to motions for modification, "it is
important to note that a court reviewing a previous award of maintenance
must not solely limit its inquiry to the support objective. The
objective of fairness also must be considered, even in postdivorce
proceedings. Fairness must be considered with respect to the situations
of both parties in determining whether maintenance should be continued
indefinitely, continued for a limited amount of time, reduced, or
terminated" (¶ 31).
A judge who reviews a request to modify a maintenance award should
adhere to the findings of fact made by the circuit court that handled
the parties' divorce case. "Where there is a substantial change in
circumstances, the circuit judge reviewing the request for modification
must adhere to this ... principle and recognize the facts as they were
at the time of the divorce. More specifically, the circuit court
deciding the modification motion may not modify a maintenance award
based solely on the fact that, had the parties been before it for their
divorce action, that court would have decided the matter differently.
The findings of fact made by the original divorce court properly may be
reviewed by the modification judge in the light of substantial changes
in the parties' circumstances, and we anticipate that the modification
judge will need to consider additional facts that were not before the
original divorce court because of the substantial changes that have
occurred" (¶ 34).
The court also concluded that educational expenses a party incurs on
behalf of an adult child may, but do not have to be, considered when
examining the party's budget. "This is a decision left to the sound
discretion of the circuit court. While we do not anticipate frequent
consideration of such educational expenses, we recognize that unusual or
extraordinary circumstances could justify such consideration" (¶
Chief Justice Abrahamson filed a dissenting opinion that was joined
by Justice Bradley. Justice Roggensack did not participate in this
Mourning Doves - Authority of DNR to Set Open Season for Mourning
Wisconsin Citizens Concerned
for Cranes & Doves v. Department of Natural Resources, 2004
WI 40 (filed 6 April 2004)
In 2001 the Department of Natural Resources (DNR) adopted Wis. Admin.
Code section NR 10.01(1)(h), which establishes an open season for
mourning doves in Wisconsin from Sept. 1 through Oct. 30 and sets daily
bag and possession limits. The issue before the supreme court in this
case was whether the legislature has granted the DNR authority to set an
open season for mourning doves. The court also asked the parties to
address what impact, if any, the recently adopted "Right to Hunt"
amendment to the Wisconsin Constitution (Wis. Const. art. I, sec. 26)
has on the outcome of this case.
In a unanimous decision authored by Justice Wilcox, the court
concluded that "the DNR has express authority under [Wis. Stat.] §
29.014(1) to adopt § NR 10.01(1)(h) because the legislature has
granted broad authority to the DNR to set open and closed seasons for
'game' under § 29.014(1) and mourning doves fall within the
unambiguous definition of 'game' contained therein" (¶ 48).
With regard to the constitutional question noted above, the court
began its analysis by turning to the language of Wis. Const. art. I,
section 26, which provides that "[t]he people have the right to fish,
hunt, trap, and take game subject only to reasonable restrictions as
prescribed by law." "The 2003 amendment does not impose any limitation
upon the power of the state or DNR to regulate hunting, other than that
any restrictions on hunting must be reasonable. However, the [plaintiffs
have] not alleged that § NR 10.01(1)(h) is unreasonable. Therefore,
the 2003 constitutional amendment does not affect our analysis of the
DNR's authority in this case" (¶ 46).
Area Zoning - Variances Granted for Unnecessary Hardship
State ex rel. Ziervogel v.
Washington County Bd. of Adjustment, 2004 WI 23 (filed 19 March
This case involved the legal standard by which zoning boards of
adjustment measure "unnecessary hardship" when determining whether to
grant variances to area zoning. Area zoning regulates lot area, density,
height, frontage, setbacks, and so on, in order to promote uniformity of
development, and lot and building size. It may be contrasted with use
zoning, which regulates how property may be used, in order to promote
uniformity of land use within neighborhoods or regions.
Prior to State v. Kenosha County Bd. of Adjustment, 218 Wis.
2d 396, 577 N.W.2d 813 (1998), cases construing the controlling statute
on variances for "unnecessary hardship" (Wis. Stat. section 59.694(7))
used distinct legal standards for determining hardship in area and use
variance cases. However, in Kenosha County, the supreme court
merged the distinct standards into a single "no reasonable use of the
property" standard for unnecessary hardship in all variance
In a unanimous opinion authored by Justice Sykes, the supreme court
concluded that "the distinctions in purpose and effect of use and area
zoning make the perpetuation of a single, highly-restrictive 'no
reasonable use of the property' standard for all variances unworkable
and unfair" (¶ 4). "Restricting the availability of variances to
those property owners who would have 'no reasonable use' of their
property without a variance may be justifiable in use variance cases,
given the purpose of use zoning and the substantial effect of use
variances on neighborhood character. But applying the same strict 'no
reasonable use' standard to area variance applications is unjustifiable.
The 'no reasonable use' standard is largely disconnected from the
purpose of area zoning, fails to consider the lesser effect of area
variances on neighborhood character, and operates to virtually eliminate
the statutory discretion of local boards of adjustment to do justice in
individual cases" (¶ 5). Accordingly, the court held that,
henceforth, area variance applicants need not meet the "no reasonable
use of the property" standard that is applicable to use variance
The court returned to and reaffirmed the pre-Kenosha County
standard for unnecessary hardship in area variance cases that had been
articulated in Snyder v. Waukesha County Zoning Bd. of
Adjustment, 74 Wis. 2d 468, 247 N.W.2d 98 (1976): "[w]hen
considering an area variance, the question of whether unnecessary
hardship ... exists is best explained as '[w]hether compliance with the
strict letter of the restrictions governing area, set backs, frontage,
height, bulk or density would unreasonably prevent the owner from using
the property for a permitted purpose or would render conformity with
such restrictions unnecessarily burdensome.' Whether this standard is
met in individual cases depends upon a consideration of the purpose of
the zoning restriction in question, its effect on the property, and the
effect of a variance on the neighborhood and the larger public interest.
The long-standing requirements that the hardship be unique to the
property and not self-created are maintained. The burden of proving
unnecessary hardship remains on the property owner" (¶ 7)
Chief Justice Abrahamson and Justice Bradley did not participate in
Fraud - Deceptive Trade Practices
Tietsworth v. Harley-Davidson
Inc., 2004 WI 32 (filed
26 March 2004)
Plaintiffs alleged that their motorcycles' engines contained a
defect, although they did not allege any personal injury or property
damages caused by such defect. Nor did they allege that the motorcycles
had failed or malfunctioned. The circuit court dismissed their original
claims for negligence, strict products liability, fraud, and deceptive
trade practices under Wisconsin statutes. The plaintiffs appealed only
the dismissal of their common-law fraud and statutory deceptive trade
practices claims. The court of appeals reinstated both claims.
The supreme court, in an opinion written by Justice Sykes, reversed
the court of appeals. First, "[a]n allegation that a product is
diminished in value because the product line has demonstrated a
propensity for premature failure such that the product might or will at
some point in the future fail prematurely is too uncertain and
speculative to constitute a legally cognizable tort injury and is
therefore insufficient to state damages in a tort claim for fraud"
(¶ 3). The court's conclusion was consistent with "many federal and
state court decisions" (¶ 21).
Although one allegation in the complaint was "arguably sufficient to
state a more particularized injury" (¶ 22), it was nonetheless
barred by the economic loss doctrine. The majority opinion carefully
analyzed prior case law but found no "authoritative recognition of an
element-specific fraud-in-the-inducement tort cause of action as an
exception to the economic loss doctrine" (¶ 34). The plaintiffs
thus were left to their contract remedies (¶ 37).
Second, "[t]he plaintiffs have also failed to state a claim for
deceptive trade practices in violation of Wis. Stat. § 100.18. The
statute provides a private cause of action for pecuniary loss resulting
from an advertisement to the public that contains an 'assertion,
representation or statement of fact which is untrue, deceptive or
misleading.' Wis. Stat. § 100.18(1), (11)(b). The plaintiffs' claim
is based primarily on the allegation that Harley-Davidson ('Harley')
failed to disclose the engine defect prior to the plaintiffs' motorcycle
purchases. A nondisclosure does not constitute an 'assertion,
representation or statement of fact' under Wis. Stat. § 100.18(1).
The plaintiffs also allege that Harley's advertising material described
the motorcycle engine as 'premium' quality, 'a masterpiece,' and
'[e]ighty-eight cubic inches filled to the brim with torque and ready to
take you thundering down the road.' This is classic advertising puffery,
nonactionable at common law and under the statute" (¶ 4).
Justice Bradley did not participate.
Chief Justice Abrahamson dissented because "the majority opinion has
gone too far in expanding the scope of the economic loss rule and the
puffery doctrine" (¶ 47).