Vol. 78, No. 12, December
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
Receivership - Intervention
M&I Marshall &
Ilsley Bank v. Urquhart Cos., 2005 WI App 225 (filed 15 Sept.
2005) (ordered published 28 Oct. 2005)
Reinhart Foodservice Inc. supplied food to three nursing homes that
were in receivership. This appeal followed the circuit court's denial of
Reinhart's request to intervene in the receivership proceeding. Although
Reinhart had supplied more than $14,000 worth of food for which it had
not been paid, the circuit court ruled that Reinhart was an "unsecured
creditor" to which the receiver owed no duty.
The court of appeals, in a decision authored by Judge Deininger,
reversed. First, the court said, "Reinhart, as a supplier of goods to
the receiver, has an interest in ensuring that the receiver carries out
his court-ordered and statutory obligations to pay `the current expenses
of carrying on' the nursing home business. See Wis. Stat.
§ 813.17. Because Reinhart claims to have furnished goods necessary
to the receiver's operation of the nursing homes during the
receivership, Reinhart must be allowed to present its claim for payment
in the receivership proceeding, provided it satisfies the remaining
requirements for intervention as a matter of right" (¶ 14).
Second, Reinhart also demonstrated that its ability to protect its
interest will be impaired by the disposition of the original action
(see ¶ 15). "If Reinhart is not permitted to intervene and
the receiver is discharged in this action, a subsequent attempt by
Reinhart to sue either the receiver or M&I might well be met with
claims that the receiver can no longer be sued, or that Reinhart should
be precluded from `re-litigating' M&I's entitlement to all moneys
remitted to it by the receiver, an issue that was arguably litigated and
determined by the foreclosure judgment, the order approving sale and any
subsequently entered order for discharge of the receiver. These
potential obstacles to Reinhart's ability to protect its interest in
being paid for goods it supplied to the receiver are simply not present
if Reinhart is permitted to intervene in this action" (¶ 17). The
court also "easily conclude[d]" that the existing parties did not
adequately represent Reinhart's interest (see ¶ 18).
Finally, the court held that Reinhart timely moved to intervene.
Reinhart acted "promptly" (¶ 22), and any prejudice to M&I's
interests as a secured creditor was "slight" compared to the prejudice
that Reinhart would suffer if it could not present its claim in the
receivership proceeding (see ¶ 23). (The court also
determined that Reinhart's related request to sue the receiver was
properly denied in light of Reinhart's opportunity to now pursue its
claims in the receivership proceeding.)
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Employment - Tortious Interference -
Noncompetition Clause - Wage Claims
Cardiovascular & Thoracic Surgeons of Cent. Wis. S.C., 2005
WI App 217 (filed 7 Sept. 2005) (ordered published 28 Oct. 2005)
This appeal arose out of claims and counterclaims in a dispute
between Dr. Wolnak and the Cardiovascular & Thoracic Surgeons
physician group, headed by Dr. Riveron (collectively CATS). The
plaintiff alleged that CATS had breached his contract and defamed him,
while the defendants countered that the plaintiff had tortiously
interfered with another doctor's contract, breached his own contract,
and made misrepresentations. A jury found that CATS had breached the
plaintiff's contract and awarded the plaintiff about $225,000, but it
also determined that the plaintiff had misrepresented his background
(although CATS had not relied on any such falsehoods) and tortiously
interfered with the other doctor's contract. The jury awarded CATS
damages of $125,000. Both sides appealed.
The court of appeals, in an opinion authored by Judge Hoover,
affirmed. (The physician group's individual cross-appeal raised
sufficiency of the evidence issues that were resolved against it
(see ¶¶ 61-66). These fact-intensive issues will not
be further discussed.) The court began by analyzing and rejecting the
plaintiff's claims of error as to the tortious interference
counterclaim. The court said that the plaintiff was not entitled to
summary judgment on this issue and that the jury's determination was
supported by the evidence. The fact that the other doctor in question
did not resign and at one point indicated that he did not think that the
plaintiff "had anything to do with his promotion" did not eliminate the
causal element (see ¶ 16). Also, Wisconsin law protects
against interference that causes honoring of a contract to be more
expensive or "onerous" for the wronged party, as occurred here when CATS
had to "accelerate" a promotion to retain the affected doctor (¶
The record also adequately supported a finding of the plaintiff's
intent to interfere with the other contract. The court of appeals
distinguished another case in which a party had simply asserted his
legal claim to real estate. "Inviting Johnkoski to abandon his contract
with CATS to start a new practice because Wolnak disagreed with or
disliked Riveron is not the same thing as asserting a claim to real
estate" (¶ 25). Finally, the court rebuffed the plaintiff's
assertion that his acts were "privileged": "[A]ssuming without deciding
that competition is, in fact, privileged, the privilege does not extend
to encouraging the breach of an existing contract" (¶ 29).
The plaintiff raised several additional issues. First, the court held
that harmless error occurred when the trial court dismissed the
plaintiff's defamation claim based on its misinterpretation of the
noncompetition clause. The evidence showed that regardless of CATS's
conduct, the plaintiff had himself disclosed the noncompetition clause
to a potential employer and had later voluntarily abandoned pursuit of
that job (see ¶ 44). Second, the plaintiff did not raise a
wage penalty claim pursuant to Wis. Stat. section 103.455 by simply
alleging that he had not been "paid according to his contract" (¶
49). The statute identifies specific prohibited types of acts, which
must be alleged (see ¶ 51). Nor does the statute permit
punitive damages (see ¶ 52).
Third, the trial court properly exercised its discretion in denying
the plaintiff's request for penalty wages and costs pursuant to Wis.
Stat. chapter 109. "[J]ust as we concluded a Wis. Stat. § 103.455
claim must be pled with specificity, so too must a Wis. Stat. ch. 109
claim. Such a conclusion is even more strongly supported in this
instance, because the chapter refers multiple times to a wage claim.
Wolnak did not bring a wage claim, he brought a contract action. While
the contact dealt with a dispute over compensation, Wis. Stat. §
109.03(5) establishes a distinct cause of action and enforcement
procedure for a wage claim, wholly apart from any contract claims Wolnak
might pursue. Additionally, we again have a situation where Wolnak seeks
to have penalties assessed on a contract action. Thus, we conclude that
merely pleading a contract action based on nonpayment of wages is
insufficient to trigger a Wis. Stat. ch. 109 wage claim under notice
pleading" (¶ 57).
"More to the point, we are not convinced that CATS's withholding
wages was dilatory or otherwise unjust. There appears to have been a
legitimate dispute over the terms of Wolnak's compensation following an
oral agreement to modify his contract" (¶ 58).
Possession of Cocaine with Intent to Deliver - Holding Drugs
with Intent to Return Them to Person from Whom Originally
Pinkard, 2005 WI App 226 (filed 7 Sept. 2005) (ordered
published 28 Oct. 2005)
The defendant was convicted of possession of cocaine with intent to
deliver, contrary to Wis. Stat. section 961.41(1m)(cm)1r. The issue on
appeal was whether a person who is holding drugs for someone else and
plans to return the drugs to that other person has the "intent to
deliver" required for conviction of the crime. In a decision authored by
Judge Kessler, the court of appeals answered in the affirmative.
The term "deliver," as used in this statute, is defined by Wis. Stat.
section 961.01(6) as follows: "`[d]eliver' or `delivery', unless the
context otherwise requires, means the actual, constructive or attempted
transfer from one person to another of a controlled substance or
controlled substance analog, whether or not there is any agency
relationship." The court concluded that the defendant's intent to
transfer the drugs to the person from whom he received them satisfies
this definition (see ¶ 10).
Said the court, "[the defendant] cannot escape liability for
participating in the drug trade by holding drugs with the purpose of
returning them to the person from whom they were originally acquired.
Whether [the defendant] had delivered the drugs to the original owner
for distribution to buyers, or to a third party for distribution to
buyers, the ultimate conduct would have been the same: delivering drugs
for use by others, a crime the legislature intended to punish under Wis.
Stat. § 961.41(1m)" (¶ 12).
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Hearsay - Confrontation
State v. King,
2005 WI App 224 (filed 27 Sept. 2005) (ordered published 28 Oct.
A jury convicted the defendant, King, of the substantial battery of
S.J. as well as substantial battery and armed robbery of C.T. He was
acquitted of other related felonies. C.T. testified at trial. S.J. did
not testify at trial but the state introduced her preliminary
examination testimony and statements she made to officers. In a
postconviction proceeding, the trial court ruled that the defendant's
right of confrontation, as the right has recently been construed in
Crawford v. Washington, 541 U.S. 36 (2004) and State v.
Manuel, 2005 WI 75, had been violated. The court vacated the
conviction for the crime involving S.J. but left intact the conviction
for the crimes involving C.T.
The court of appeals, in an opinion written by Judge Fine, affirmed.
The defendant had argued on appeal that the hearsay evidence of S.J.
also violated his right of confrontation with respect to the convictions
for the crimes involving C.T. Under Crawford, so-called
"testimonial" hearsay may not be introduced against a defendant unless
the declarant is unavailable and the defendant had a prior opportunity
to cross-examine the declarant.
The court first held that the state had failed to show that S.J. was
"unavailable" to testify. "[W]hether a hearsay declarant is
constitutionally unavailable `is too important' to be satisfied by
going-through-the-motions efforts; rather, the efforts must be adapted
to the circumstances and must be unstinting. . . . Not serving [S.J.]
with a subpoena when that was possible and when that step was a
foreseeable potential condition to her presence at trial was not
reasonable, and does not reflect the constitutionally required
good-faith effort to secure [the defendant's] right to confront his
accuser. Accordingly, the State has not demonstrated that [S.J.] was
constitutionally unavailable, and the trial court erred in permitting
the jury to hear her preliminary-examination testimony" (¶ 17). The
court held that S.J.'s statements to detectives at the hospital were
also "testimonial," because they were the product of "structured police
questioning" (¶ 18). The court also analyzed the hearsay status of
S.J.'s statements to another police officer, a nurse, and a detective at
a lineup (see ¶¶ 19-21).
Although the court of appeals concluded that error occurred in the
admission of S.J.'s hearsay statement, the court held that the error was
harmless beyond a reasonable doubt with respect to the offenses against
C.T., especially because the two attacks were separate in time and
place, a jury acquitted the defendant of 8 of 11 offenses anyway, and
other compelling evidence (physical evidence and his own admissions)
linked the defendant to the attack on C.T. (see ¶ 23).
Substitution Requests - Offers to Plead Guilty - Other
Norwood, 2005 WI App 218 (filed 21 Sept. 2005) (ordered
published 28 Oct. 2005)
The defendant was convicted at trial of sexually assaulting a child.
The court of appeals affirmed in an opinion authored by Judge Brown. The
court addressed three claims of error and held as follows.
First, the defendant's request for substitution of the trial judge
was properly denied. The issue arose on the day of trial, when the
originally assigned judge became ill and a different judge took over the
calendar. After hearing the parties on several points and permitting the
defendant to withdraw his not guilty by reason of mental disease or
defect plea, the sitting judge then asked the defendant if he objected
to her presiding over the case. Although the defendant did object, the
prosecutor pointed out that the objection came only after the sitting
judge had taken action. The sitting judge agreed and denied the
defendant's request for substitution. The court of appeals affirmed on
this issue, holding that the "preliminary contested matter" rule does
not apply to substitutions of judge pursuant to Wis. Stat. section
971.20(5), which concerns "subsequently assigned" judges and requires
only that "proceedings' have commenced" (¶ 12).
Second, the trial court erred by admitting into evidence a letter
written by the defendant to the court expressing his desire to plead
guilty and not go through a trial. The court of appeals held that the
letter clearly fell within Wis. Stat. section 904.10, which bars
admission in evidence of offers to plead guilty and similar offers and
pleas. (Although the trial lawyers unfortunately muddied the record, the
court refused to deem the issue "waived" (see ¶¶
17-19).) "We construe the letter as a whole as an offer to plead and
conclude that any incriminating statements in the letter were integrally
intertwined with this offer. We cannot feasibly separate a defendant's
expressed willingness to enter a plea agreement from his or her reasons
for wanting to do so" (¶ 20). The court concluded, however, that
the error was harmless, because other evidence that was properly
introduced, including the defendant's "confession" on the witness stand,
would alone "have sealed [the defendant's] fate" (¶ 23).
Third, the trial court properly admitted other acts evidence,
although the evidence was presented before the jury heard any evidence
about the charged assault. "Norwood cites no authority for the
proposition that otherwise admissible evidence is rendered unfairly
prejudicial by the timing of its presentation, and we know of none.
Further, the order of presentation did not obfuscate the identity of the
victim" (¶ 25).
Identifications - Suggestiveness - No Police
State v. Hibl,
2005 WI App 228 (filed 28 Sept. 2005) (ordered published 28 Oct.
The defendant, Hibl, was charged with causing great bodily harm to
another by reckless driving. A witness saw some of the events that
occurred before and after the collision but could only describe the
driver of the van in question as a "white male." The witness was never
shown photos or asked to view a lineup. On the day of trial, however, he
positively identified Hibl in the hallway outside the courtroom and
later, in court, identified Hibl as the van's driver. When the defense
moved for a mistrial, the state did not object and the judge granted the
motion. The defense later moved to suppress the witness's
identifications, and the trial court granted the motion.
The state appealed the suppression order. The court of appeals, in an
opinion written by Judge Snyder, affirmed. The court of appeals applied
State v. Dubose, 2005 WI 126, in which the supreme court
"provided a substantial history of the evolution of the relevant law and
articulated the new legal standard to be applied in matters of pretrial
witness identification" (¶ 10). The Dubose court,
"departing" from precedent, held "that evidence obtained from an
out-of-court showup is inherently suggestive and will not be admissible
unless, based on the totality of the circumstances, the procedure was
necessary. A showup will not be necessary, however, unless the police
lacked probable cause to make an arrest or, as a result of other exigent
circumstances, could not have conducted a lineup or photo array"
(id., quoting Dubose, 2005 WI 126, ¶ 33). The
court of appeals found that the hallway confrontation was "accidental";
hence, a Dubose "necessity" analysis was not required
(see ¶ 12).
The court said that even in the absence of a "police-arranged"
confrontation, however, concerns remained about the likelihood of
misidentification under Dubose (see ¶ 16). The
trial judge properly considered the "impermissibly suggestive" encounter
between the witness and the defendant in the courtroom hallway in light
of the witness's limited opportunity on the day of the offense to
observe the face of the van driver, who was in a vehicle some 50 feet
away that was traveling at 35 to 40 miles per hour toward the witness.
Moreover, the witness had been unable on the day of the offense to
provide any descriptive details about the appearance of the van driver
(see id.). In sum, the trial court properly exercised
its discretion in excluding the witness's identification (see
Motion to Reconsider Trial Court's Ruling Granting Leave to
Withdraw No Contest Plea - Timeliness of Motion
Williams, 2005 WI App 221 (filed 27 Sept. 2005) (ordered
published 28 Oct. 2005)
On Aug. 11, 2003 the defendant entered a plea of no contest to a
felony offense, and he was sentenced on Oct. 30, 2003. The defendant
later filed a motion seeking to withdraw his plea, and the court granted
the motion on April 6, 2004. On May 25, 2004 the state filed a motion in
the circuit court asking the court to reconsider its April 6 order. The
circuit court granted the motion for reconsideration, and this appeal to
the court of appeals followed.
The defendant argued that the circuit court should not have granted
the state's motion for reconsideration. The defendant said that because
the state filed the motion five days after the 45-day deadline for
filing a notice of appeal, the state waived its right to challenge the
circuit court's order granting the defendant's motion to withdraw his
plea. In a decision authored by Judge Wedemeyer, the court of appeals
concluded that the circuit court did not err in granting the state's
motion seeking reconsideration.
The court of appeals said that "[t]he resolution of this appeal rests
with whether the April 6th order was a final order. If the plea
withdrawal order was final, the State had an obligation to file a notice
of appeal within the forty-five-day time period. Failure to do so would
result in waiver of its right to challenge the trial court's ruling. If
the plea withdrawal order was not a final order, the State was not
obligated to file an appeal and its motion to reconsider was timely"
Ordinarily, an order is "final" when it disposes of the entire matter
in litigation. See Wis. Stat. § 808.03(1). Using this
definition, the court concluded that the April 6 order was not a final
order. "An order granting a plea withdrawal is not final
because it plainly anticipates further proceedings in the criminal case
either a trial or a guilty or no-contest plea. The April 6th order did
not dispose of the entire matter in litigation. The order itself noticed
a status conference for [a future date]. Clearly, such order cannot be
construed as a final order" (¶ 15).
Accordingly, the state was not obligated to file an appeal within the
45-day time period and its failure to do so did not constitute waiver.
Because a circuit court has the inherent authority to reconsider any of
its non-final rulings before entry of the final order or judgment in the
case, the circuit court in this case did not err in entertaining the
state's motion for reconsideration (see ¶ 17).
Sentencing - Restitution - Lost Profits
Johnson, 2005 WI App 201 (filed 24 Aug. 2005) (ordered
published 20 Sept. 2005)
The defendant was convicted of burglarizing the offices of Puestow
& Associates and of stealing computers and related equipment and
accessories. The circuit court ordered him to pay a substantial
restitution amount to Puestow for lost profits associated with its
prospective sale of computer software and consulting services to Apio.
The circuit court noted that the defendant's criminal activity precluded
Puestow from conducting an important product demonstration, and that the
evidence revealed with reasonable certainty that the sale of software
and services to Apio would have occurred but for the defendant's
On appeal the defendant challenged the restitution award. In a
decision authored by Judge Anderson, the court of appeals upheld the
award. The court of appeals concluded that lost profits, if shown with
reasonable certainty, are an appropriate item of restitution under Wis.
Stat. section 973.20(5)(a), which permits restitution for "all special
damages" that could be recovered in any type of "civil action." "As a
general rule in tort actions, there may be recovery for loss of profits
if the plaintiff can show with reasonable certainty the anticipation of
profit" (¶ 17). In this case the parties recognized that the
defendant's criminal conduct could give rise to a civil action based on
the torts of conversion and interference with prospective contractual
relationships (see ¶ 16).
The court next considered whether the defendant's criminal activity
was a substantial factor in causing Puestow to suffer lost profits
related to the prospective sale to Apio. "[W]hen the claim for
restitution for loss of profits is based on a prospective contractual
relationship, the victim must prove with reasonable certainty
that the prospective contractual relationship would have accrued absent
the defendant's wrongful conduct" (¶ 20) (citations omitted). The
court concluded that the evidence in this case established with
reasonable certainty that Puestow's sale of software and consulting
services to Apio would have occurred but for the defendant's burglary
Lastly, with regard to the amount of restitution, the court noted
that the restitution statute places the burden on the victim to show by
a preponderance of the evidence the amount of loss sustained. "The issue
of lost profits damages ... should be addressed on a case-by-case
basis and they are recoverable where a claimant can present credible
comparable evidence or business history and business experience
sufficient to allow a fact finder to reasonably ascertain the amount of
future lost profits. Here, [Puestow] presented sufficient credible
comparable evidence, business history and business experience to permit
the trial court's finding of $34,800 in lost profits" (¶ 26)
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Divorce - Parenting Plans - Procedures
Guelig, 2005 WI App 212 (filed 31 Aug. 2005) (ordered published
20 Sept. 2005)
As stated by Judge Brown in the opening sentence of the opinion,
"[t]his case presents us with the opportunity to review the proper
procedures surrounding the parties' submission of parenting plans where
the parents contest placement" (¶ 1). Several principles regarding
the submission and consideration of parenting plans can be distilled
from this lengthy decision. The statute regulating parenting plans
provides in pertinent part as follows: "In an action for ... divorce
... in which legal custody or physical placement is contested, a
party seeking sole or joint legal custody or periods of physical
placement shall file a parenting plan with the court before any pretrial
conference. Except for cause shown, a party required to file a parenting
plan under this subsection who does not timely file a parenting plan
waives the right to object to the other party's parenting plan." Wis.
Stat. § 767.24(1m).
The family court adopted the mother's parenting plan at the
scheduling conference, which the father did not attend. The father had
not received a copy of the mother's plan, nor did he get any notice that
the court would consider the merits of the placement and custody issues
at the scheduling conference. The court of appeals concluded that "the
[family] court should not have considered placement and custody issues
when the father had not yet received a copy of the mother's proposal.
Our statutes, as well as due process, contemplate such an exchange"
(¶ 1). Further, the father had a right to an adequate opportunity
to be heard on the matters of custody and placement before the court
made its decision (see ¶¶ 32-33).
The court of appeals further held that the father did not waive his
right to object to his wife's proposal by failing to file his own
parenting plan before the scheduling conference. The statute quoted
above requires submission before any "pretrial conference," and the
court of appeals concluded that a scheduling conference is not a
pretrial conference. There never was a pretrial conference in this case,
and thus the father could not have violated the statute (see
The court of appeals reversed and remanded the case to the family
court with directions that the family court hold a hearing on the
placement and custody issues and consider both parties' proposed
parenting plans (the father's plan was submitted after the scheduling
conference but otherwise in a timely manner) and all relevant statutory
factors. The court of appeals noted that although the family court
considered the mother's parenting plan, the record did not show that it
did so in light of the proper legal standard - the best interests of the
child (see ¶ 47). In deciding to adopt the mother's plan,
the family court emphasized the father's uncooperative behavior in the
case (see ¶ 48). The court of appeals indicated that
"[a]lthough the court may consider one party's uncooperative behavior a
salient factor, it must clearly articulate how the parent's
recalcitrance bears on the child's best interests" (¶ 1).
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Holdover Tenant - Surrender - Prevailing Party
Vander Wielen v. Van
Asten, 2005 WI App 220 (filed 22 Sept. 2005) (ordered published
28 Oct. 2005)
This case concerns a commercial lease. The circuit court dismissed
the landlord's claim for unpaid rent and awarded the former tenant
nearly $8,000 in attorney fees and costs. The court of appeals, in an
opinion written by Judge Deininger, affirmed.
First, the circuit court properly determined that the tenant became a
year-to-year holdover tenant after the parties' lease terminated on May
31, 2000 and the landlord accepted the tenant's June rent payment. "The
parties' lease was of non-residential property for a term of more than
one year, and nothing in the lease or extension agreements disavows the
applicability of § 704.25" (¶ 12). The court agreed "with the
landlord that, absent contrary provisions in the parties' lease, §
704.25 requires a commercial landlord to choose among three courses of
action when a tenant remains in possession of the leased premises after
the expiration of a lease: (1) the landlord may commence an action to
remove the tenant; (2) the landlord may reach an agreement with the
tenant regarding the terms of the tenant's post-expiration occupancy; or
(3) if neither of the first two have occurred, the landlord may accept
rent from the tenant for the tenant's post-expiration occupancy, thereby
creating a holdover tenancy whose duration is determined by the statute,
in this case, year-to-year" (¶ 15). Thus, acceptance of the June
rent payment created a tenancy terminating one year later on the same
terms and conditions as the expired lease.
Second, the circuit court also properly found that the landlord
accepted the tenant's surrender of the property in August 2000. The
court held that "Wis. Stat. § 704.29(4) does not preclude a court
from determining that a landlord, by his or her conduct, clearly
evidenced an intent to accept surrendered premises, even if the
landlord's conduct includes the re-renting of the premises. We further
conclude that the statute also does not prevent a court from determining
that a landlord, by his or her actions, clearly evidenced the intent to
accept a surrender, even where the landlord has not `expressly agreed to
accept a surrender of the premises.' See § 704.29(1).
Rather, the statute, as applied here, imposes two requirements. First,
whenever a landlord does not, by word or deed, accept the surrender of
leased premises following a tenant's removal, the landlord must mitigate
damages by attempting to re-rent the premises. Second, if a landlord
elects to hold the tenant to the tenancy, the statute provides that the
landlord's re-renting the premises to another cannot, standing alone,
`constitute an acceptance of surrender of the premises.' See
§ 704.29(4)" (¶ 25). On this record, "the landlord's actions
in dealing exclusively with the successor, proposing a new long-term
lease to the successor, accepting higher rent from the successor as
called for in the proposed lease, and failing to communicate in any way
to the tenant that she deemed him responsible for the tenancy through
May 31, 2001, `clearly evidence[d] an intent' to accept the tenant's
surrender of the premises" (¶ 27).
Third, under terms of the lease, the tenant was the prevailing party
and entitled to attorney fees and costs. The court rejected the
landlord's argument that this provision also became null when the lease
effectively terminated in August 2000. "Paragraph 20 of the parties'
lease, however, is not a one-sided fee-recovery provision in favor of
the landlord. It is a reciprocal provision that authorizes attorney fees
to be shifted from `the successful party' to the losing party `[i]n any
legal proceeding instituted by either party for the enforcement of the
terms and provisions of this lease.' That is precisely the nature of the
present action. It is a `legal proceeding instituted by' the landlord to
enforce `the terms and provisions' of the parties' lease, in which the
tenant has become the `successful party.' It makes no difference to the
operation of paragraph 20 that the tenant, in order to successfully
defend, established that the lease provisions were no longer effective
after August of 2000. Under the attorney fee provision in the parties'
lease, it is the nature of the plaintiff's claims, not the theory of
defense, that determines whether the prevailing party is entitled to
recover his or her attorney fees" (¶ 33).
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OSHA Report - Compensatory Damages -
Staskal v. Symons
Corp., 2005 WI App 216 (filed 1 Sept. 2005) (ordered published
28 Oct. 2005)
A worker who was seriously injured in a construction site accident
sued Symons, the manufacturer of the defective concrete forming system,
for compensatory and punitive damages. A jury awarded the plaintiff and
his family more than $23 million. It found that Symons was 80 percent
causally negligent and also found Symons liable on the plaintiff's
products liability claim.
The court of appeals, in a decision authored by Judge Vergeront,
affirmed. First, the trial court properly excluded from evidence the
Occupational Safety and Health Administration (OSHA) report, which
Symons offered to cast responsibility on the general contractor, which
employed the plaintiff. The OSHA report was proffered as a public record
pursuant to Wis. Stat. section 908.03(8). Among other factors, the trial
court properly considered certain factual errors made by the
investigator along with the lack of any opportunity to cross-examine
him. In short, the report was insufficiently trustworthy (see
¶¶ 18-19). Nor was the OSHA report "admissible" under Wis.
Stat. section 907.03, contrary to Symons' arguments. Case law clearly
holds that section 907.03 is not a hearsay exception; rather, it merely
permits experts to base their opinions on certain inadmissible types of
evidence (see ¶ 22). The record did not support disclosure
of the OSHA report on direct or cross-examination.
Second, the evidence sufficiently supported the jury's award of
compensatory damages. According to the record, the trial court stated
that "while these amounts may have been greater than the court itself
would have awarded, they did not shock the conscience. The court noted
the unusual circumstances of Staskal being pinned while conscious under
the rubble and the significant pain, fear, and expectancy of death that
he experienced, as well as the resulting post-traumatic stress. The
court also noted the substantial and permanent physical injuries, the
permanent pain, the inability to return to his chosen employment, the
testimony that he could no longer do most of the things he had enjoyed
doing, and the testimony of an increase in his pain and disability in
the future, noting that all of this testimony was uncontested. In the
court's view, the jury had sorted through the evidence and deliberated
over it, as indicated by the fact that it did not give the higher awards
the plaintiffs asked for" (¶ 36). Applying a deferential standard
of review, the court of appeals affirmed the compensatory damages. The
court said that the damages were not "perverse" (¶ 42) and were
supported by the evidence.
Third, punitive damages also were properly awarded. The trial court's
instruction comported with prevailing case law on punitive damages.
After presenting a lengthy, fact-intensive analysis, the court of
appeals concluded that the evidence provided a clear and convincing
basis for a reasonable jury to find punitive damages. "A reasonable jury
could reach this result by believing that Symons was aware that the
two-piece legs it specified were dangerous if used without bracing at
the extension lengths and with the loads planned for this project, and
by believing that Symons nonetheless deliberately did not inform Kraemer
[the general contractor] that bracing on the legs was needed even though
the plans did not specify that" (¶ 68).
Symons asked the court of appeals to also address the
interrelationship of a defendant's wealth and the existence of liability
insurance that covers punitive damages. Case law permits juries to hear
evidence of a defendant's wealth (see ¶ 69). The trial
court had ruled that it would exclude evidence of the insurance coverage
but would reconsider the ruling if Symons argued that a punitive damages
award would be financially devastating. The court of appeals noted that
the case law is decidedly mixed, but it nevertheless held that Symons
waived the claim by not pressing the issue further before the trial
court (see ¶ 74).
Finally, the $15 million punitive damages award was not excessive,
because Symons' conduct was egregious. "Symons intentionally did not
supply Kraemer with information that would inform Kraemer of the need
for bracing of the legs and this was done because of a corporate
decision that it was easier to sell the system in this way. There is no
reasonable dispute on this record that Symons knew that if the two-piece
legs failed, serious physical injury could result to Kraemer's
employees. The financial vulnerability of the target is not relevant in
this case, because the relevant harm and injury is not economic. The
conduct was not isolated ...." (¶ 81). Moreover, the punitive
damages award did not bear an unreasonable relationship to the
compensatory damages and properly accounted for the defendant's wealth
(see ¶¶ 83, 85).
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