Vol. 78, No. 7, July
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
Attorney Fees - Collection Costs
Anderson v. MSI
Preferred Ins. Co., 2005 WI 62 (filed 2 June 2005)
Anderson was injured in a car accident and sued the other driver, his
insurer, and others. Anderson's worker's compensation insurance carrier
paid about $8,700 in benefits and medical expenses and later sought to
protect its subrogated interest. Eventually, Anderson settled with the
third-party tortfeasor for $25,000 and filed a motion to have the court
approve the settlement and distribute the settlement proceeds. The
circuit court awarded Anderson's attorney one-third of the proceeds
pursuant to a contingent fee agreement and also approved attorney fees
of about $7,400 on behalf of the worker's compensation insurance
carrier. Anderson appealed the court's order that awarded attorney fees
to the insurer, and the court of appeals affirmed.
The supreme court, in an opinion authored by Justice Butler,
reversed. The supreme court first rejected Anderson's assertions that a
carrier must "demonstrate that its attorney's activities substantially
contributed to making the third party pay" (¶ 21). "Wisconsin Stat.
§ 102.29(1) `was enacted to direct the courts in the distribution
of proceeds of third-party tort actions.' ... [T]he reasonable costs
of collection are first deducted from any recovery. These costs include
both the employee's and the worker's compensation carrier's attorneys'
fees and costs if both attorneys `join in the pressing' of the claim"
(¶ 20). The supreme court expressly adopted the holding and
reasoning of published court of appeals' decisions, particularly
Zentgraff v. Hanover Insurance Co., 2002 WI App 13.
The court also held, however, that "costs of collection" must be
reasonable. Although an award of attorney fees is discretionary, the
record here was wholly inadequate to support either the contingency fee
award or the $7,400 claimed by the lawyers for the worker's compensation
insurance carrier. Moreover, different considerations govern review of a
contingency fee and of a claim for attorney fees predicated on hourly
billing. The court first laid out the factors relating to contingency
fees, carefully noting that "... we do not question the propriety of
a contingency fee in a third-party tort claim. We recognize that
contingency fees play a vital role in ensuring that certain claimants
get access to the courts by providing attorneys with a sufficient
incentive that outweighs the risks of litigating uncertain claims. We
further recognize that contingent fees also counterbalance prior gambles
the attorney took that returned little or nothing in terms of
compensation. Nevertheless, assessing the reasonableness of Anderson's
contingency fee is necessary here as it is the first step in determining
the reasonable costs of collection under Wis. Stat. § 102.29(1)"
As for the insurer's attorney fees, prior case law "adopted the
lodestar approach for determining reasonable attorney fees in
fee-shifting statutes. Under this analysis, the circuit court must first
multiply the reasonable hours expended by a reasonable rate" and then
adjust according to factors set out in SCR 20:1.5(a) (¶ 39).
Finally, "Wisconsin Stat. § 102.29(1) requires deducting the
reasonable cost of collection from third-party claim proceeds. The sum
of the attorneys' reasonable fees and costs may, but need not, equal a
reasonable cost of collection. [On remand t]he circuit court must
evaluate the total cost of collection and determine whether that sum is
reasonable, in light of, among other things, the recovery. SCR
20:1.5(a)(4)" (¶ 40).
Finally, the court held that the worker's compensation insurance
carrier's costs of collection did not include time and money expended
during the arbitration of a UIM claim (see ¶ 43). The
supreme court underscored that a UIM claim is a first-party contract
claim, not a third-party claim permitted by section 102.29(1).
Justice Bradley concurred but wrote separately to provide additional
insight into the role and value of contingent fee agreements in the
civil litigation system.
Top of page
Limited Liability Companies - Voting - Members with Material
Conflicts of Interest
Monnier, 2005 WI 69 (filed 8 June 2005)
This case presented what the supreme court described as its "first
opportunity to examine limited liability companies in Wisconsin" (¶
13). Wisconsin enacted its limited liability company (LLC) law in 1993
with the passage of the Wisconsin Limited Liability Company Law (WLLCL).
See Wis. Stat. ch. 183. "The overriding goal of the WLLCL was
`to create a business entity providing limited liability, flow-through
taxation, and simplicity.' The drafters believed it critical that a
Wisconsin LLC readily be treated as a partnership for tax purposes.
Additionally, they emphasized the importance of flexibility and freedom
of contract, which is reflected throughout the provisions of the WLLCL.
Finally, they hoped that the LLC would provide an inexpensive vehicle
that did not require legal counsel at every step" (¶ 19) (citations
This case concerned a three-member LLC. Among the issues in this case
was the claim that two of the members (the petitioners), who possessed a
majority of the voting rights in the company, were prohibited from
voting to transfer certain real estate owned by the LLC because of a
material conflict of interest. In a majority decision authored by
Justice Bradley, the supreme court concluded that they were not.
Wis. Stat. section 183.0404 governs voting in LLCs and contemplates
situations that would prevent members from exercising their voting
power. Subsection (3) of the statute explicitly states that members can
be "precluded from voting." However, that subsection does not address
how or when that preclusion would occur. Reading section 183.0404
together with section 183.0402 (the statute which defines the duties of
LLC managers and members), the court concluded that "the WLLCL does not
preclude members with a material conflict of interest from voting their
ownership interest with respect to a given matter. Rather, it prohibits
members with a material conflict of interest from acting in a manner
that constitutes a willful failure to deal fairly with the LLC or its
other members. We interpret this requirement to mean that members with a
material conflict of interest may not willfully act or fail to act in a
manner that will have the effect of injuring the LLC or its other
members. This inquiry contemplates both the conduct along with the end
result, which we view as intertwined. The inquiry also contemplates a
determination of the purpose of the LLC and the justified expectations
of the parties" (¶ 31).
In this case, because there was no express determination by the
circuit court as to whether the petitioners willfully failed to deal
fairly with the LLC or its third member, the supreme court reversed the
decision of the court of appeals (see 2004 WI App 25) and
remanded the cause for further proceedings.
Justice Roggensack filed a concurring opinion that was joined by
Justice Wilcox. Justice Butler filed a dissenting opinion.
Top of page
Issue and Claim Preclusion - Guilty Plea - Legal
Mrozek v. Intra Fin.
Corp., 2005 WI 73
(filed 9 June 2005)
Plover Motel Inc. (PMI) was liquidated in bankruptcy and one of its
principals, Mrozek, pleaded guilty to securities-related offenses.
Mrozek and PMI sued the law firm that had represented them in the
formation of a corporation that was to construct and operate a motel.
The suit alleged negligent representation and breach of fiduciary
duties. On summary judgment motion, the circuit court dismissed the
legal malpractice claims on the grounds that Mrozek's guilty plea
precluded her own claim and that PMI's claim was barred by claim
preclusion in light of the bankruptcy court proceedings. The court of
The supreme court, in an opinion written by Justice Roggensack,
affirmed in part and reversed in part. The court first addressed
Mrozek's claims and the effect of her guilty plea to a fraud charge.
"Issue preclusion addresses the effect of a prior judgment on the
ability to re-litigate an identical issue of law or fact in a subsequent
action. In order for issue preclusion to be a potential limit on
subsequent litigation, the question of fact or law that is sought to be
precluded actually must have been litigated in a previous action and be
necessary to the judgment. If the issue actually has been litigated and
is necessary to the judgment, the circuit court must then conduct a
fairness analysis to determine whether it is fundamentally fair to
employ issue preclusion given the circumstances of the particular case
at hand" (¶ 17).
The "fairness analysis" generally considers five factors, some of
which are discretionary and others of which are questions of law.
Although jurisdictions are split over the issue-preclusive effect of a
guilty plea, the supreme court held that Wisconsin law will follow the
approach that gives no such effect to guilty pleas because they fail to
meet the "actual litigation" requirement for issue preclusion
(see ¶ 21). The court also declined to apply doctrines of
judicial estoppel or public policy to preclude Mrozek's malpractice
The court next turned to PMI's legal malpractice claims, which the
law firm contended were barred by claim preclusion. "Claim preclusion
prevents relitigation of the same claim when: (1) there is an identity
of parties or their privies in the prior lawsuit; (2) there is an
identity of claims for relief that were brought, or should have been
brought; and (3) a final judgment on the merits in a court of competent
jurisdiction resolved the first lawsuit. Claim preclusion is `designed
to draw a line between the meritorious claim on the one hand and the
vexatious, repetitious and needless claim on the other hand'" (¶
28). After closely examining bankruptcy case law and the bankruptcy
judge's rulings in this case, the court held that "the order closing the
bankruptcy proceeding did not operate as a final judgment on PMI's
claim" (¶ 37). Thus, claim preclusion was inapplicable.
Finally, the court took up the joint claims for lost profits and
affirmed the finding that Mrozek and PMI failed to present evidence
"sufficient for a fact finder to reasonably ascertain lost profits"
(¶ 38). This holding is fact intensive and relates to the
plaintiffs' failure of proof; no novel questions of law were raised.
Justice Roggensack filed a concurring opinion in which she concluded
that "issue preclusion cannot be applied in the first instance by an
appellate court because it cannot be applied as a matter of law, but
only as a discretionary determination made after a fairness analysis"
Top of page
Contract - Shippers - Consignee Liability
Marine Bank v. Taz's
Trucking Inc., 2005 WI 65 (filed 2 June 2005)
Modern Building Materials Inc. (MBM) and Taz's Trucking entered into
a business relationship in which Taz's agreed to ship MBM's precast
concrete building products to MBM's customers. The parties made a
written agreement concerning shipping rates, but that agreement did not
cover whether the consignor (MBM) or the consignees (MBM's customers)
would be liable for the charges (see ¶3). Taz's at first
billed MBM weekly and then sold the accounts receivable to a factor (a
finance company that bought the accounts receivable at a discount). MBM
later became insolvent and was forced into receivership. Taz's demanded
that the consignees pay the shipping fees, but Marine Bank, one of MBM's
major creditors, sought to block Taz's. The circuit court granted the
bank's summary judgment motion and enjoined Taz's from collecting from
the consignees. "The court acknowledged the presumption of consignee
liability upon receipt of the goods, but held that the presumption was
overcome here with evidence that MBM and Taz's had impliedly agreed that
MBM would be liable for all freight charges" (¶ 8). The court of
The supreme court, in an opinion authored by Justice Crooks,
reversed. First, the record revealed disputed material facts and
reasonable inferences that precluded summary judgment. "The primary
issue in this case is whether there was an agreement between MBM and
Taz's regarding the assignment of liability for freight charges, so that
Taz's could not seek payment from a consignee. Although there is no
evidence of an express written agreement on this question, the circuit
court and court of appeals held that the parties' course of conduct
established an agreement that MBM would be exclusively liable for the
freight charges. It must be noted that while the course of dealing
between MBM and Taz's supports the conclusion that Taz's or its factor
generally received payment from MBM, there is nothing in the record that
leads us to the conclusion directly, or by implication, that there was
an agreement that MBM would be liable, exclusively, for such charges,
and that Taz's could not seek payment from a consignee-customer of MBM.
Under these circumstances, summary judgment should not have been
granted" (¶ 13).
Second, the court addressed the legal principles regarding the issue
of when shippers may collect from consignees. "While we agree with the
court of appeals that the holdings in [prior cases] provide a helpful
framework for the analysis of this case, we conclude that the genuine
issues of material fact here, as well as the conflicting and
inconsistent presumptions, do not, without a more complete record, lead
to a clear answer concerning whether there is exclusive liability for
either the consignor or the consignee. Liability for payment of freight
charges is ultimately a matter of contract, and, therefore, the
presumptions concerning consignor and consignee liability for freight
charges may be rebutted by evidence that the parties agreed to something
(¶ 27). The supreme court then provided direction on the
application of presumptions and remanded the matter for further
Top of page
Warranty - Leases - Magnuson-Moss Warranty Act
Peterson v. Volkswagen
of Am. Inc., 2005
WI 61 (filed 27 May 2005)
Peterson leased a new Volkswagen (VW) Beetle from a bank that had
purchased the car "for purposes other than resale" from a VW dealer. As
part of the transaction, VW issued to the bank a written two-year
warranty, which the bank transferred to Peterson. The car had numerous
mechanical problems, and Peterson "justifiably lost confidence in the
vehicle" (¶ 8). Peterson filed this action seeking relief under the
federal Magnuson-Moss Warranty Act (MMWA), but the circuit court granted
VW's motion to dismiss. The court of appeals reversed.
In a decision authored by Justice Wilcox, the supreme court affirmed
the court of appeals. "The federal MMWA `allows a consumer to bring suit
against a warrantor in any state for failure to comply with its
obligations under a written warranty or implied warranty'" (¶ 17).
To bring the suit under the MMWA, Peterson had to fall within one or
more of the act's definitions of "consumer." Although there is a "split
of authority" as to whether an automobile lessee qualifies as an
MMWA-protected consumer, the supreme court resolved this issue of first
impression in favor of Peterson (see ¶ 20). The court held
that Peterson qualified as a "category two" consumer, namely, "any
person to whom such product is transferred during the duration of an
implied or written warranty (or service contract) applicable to the
product" (¶ 23). "[T]he `sale' referred to in the definition of
`written warranty' need not be between the manufacturer and ultimate
consumer" (¶ 31).
Moreover, Peterson "specifically alleged that Volkswagen's issuance
of a warranty to the Bank was part of the consideration for the purchase
of the vehicle and that the Bank would not have purchased the vehicle
but for the issuance of the warranty. Thus, Peterson has alleged
sufficient facts to satisfy the part of the definition of `written
warranty' that requires that the `written affirmation, promise, or
undertaking becomes part of the basis of the bargain between a supplier
and a buyer[.]'" (¶ 32). The court conceded that leasing companies
invariably sell the vehicle after the lease expires, but nevertheless
the court said that "the purpose of the transaction between
[the leasing company] and defendant was not for resale, but for the
lease of the vehicle to plaintiff" (¶ 35).
The court then turned to the remaining criteria to be met for a
person to be considered a protected "consumer." Peterson qualified as a
category two consumer because she is alleged to be a "person to whom
such product is transferred during the duration of a ... written
warranty" (¶ 40). Moreover, she also qualified as a category three
consumer, because her factual allegations establish that she is a
"person who is entitled by the terms of such warranty ... to enforce
against the warrantor ... the obligations of the warranty[.]" 15
U.S.C. § 2301(3).
"Peterson alleged that the Bank assigned her its rights in
Volkswagen's warranty. She also alleged that she furnished the vehicle
to authorized Volkswagen dealers for repairs on numerous occasions for
several different problems and that Volkswagen `allowed [her] to enforce
its written warranty' and said repairs were `covered by [the] written
warranty.' Thus, even though we do not have the warranty before us,
Volkswagen cannot seriously argue (at this stage in the proceedings)
that Peterson was not entitled to enforce its warranty" (¶ 41).
Top of page
Truth-in-Sentencing - Sentence Adjustment - Veto Power of
Prosecutor Held Unconstitutional
Stenklyft, 2005 WI 71 (filed 9 June 2005)
This case concerns the sentence adjustment statute, Wis. Stat.
section 973.195. Under the law, a person serving a bifurcated sentence
under Wisconsin's truth-in-sentencing laws can in certain instances and
after serving a statutorily-prescribed percentage of his or her sentence
petition the sentencing court for a sentence adjustment. The
"adjustment" is early release from the confinement portion of the
sentence with the amount of time remaining on that portion added to the
extended supervision component of the sentence. Section 973.195 was
enacted as part of the second phase of truth-in-sentencing legislation
(TIS-II), but the supreme court has held that the statute applies as
well to inmates sentenced under the original truth-in-sentencing
legislation (TIS-I). See State v. Tucker, 2005 WI
Section 973.195(1r)(c) establishes a procedure for the handling of
inmate sentence adjustment petitions: "Upon receipt of a petition filed
under par. (a), the sentencing court may deny the petition or hold the
petition for further consideration. If the court holds the petition for
further consideration, the court shall notify the district attorney of
the inmate's petition. If the district attorney objects to
adjustment of the inmate's sentence within 45 days of receiving
notification under this paragraph, the court shall deny the inmate's
petition" (emphasis added). If the district attorney does not
object to the proposed adjustment, the sentencing court may "adjust" the
sentence as described above if it determines that adjustment is "in the
public interest." See Wis. Stat. § 973.195(1r)(f).
The critical questions before the supreme court in this case were
whether the prosecutorial veto of sentence adjustment is constitutional
and, if not, whether the statute can be saved through interpretation.
The answers to these questions are in the concurrence/dissent of Chief
Justice Abrahamson and in the concurrence/dissent of Justice Crooks,
both of which commanded votes of a majority of the court's members.
Justices Bradley, Crooks, and Butler joined the Chief Justice to
conclude that section 973.195(1r)(c) is unconstitutional if it is read
to grant a district attorney veto power over a petition for sentence
adjustment. (This was the interpretation proffered in the court's lead
opinion, authored by Justice Wilcox, that was joined in by only two
justices.) Said the Chief Justice, "[a] district attorney's veto power
invades the exclusive core constitutional power of the judiciary to
impose a criminal penalty. It empowers an executive branch officer to
direct a court decision on the merits of a case, thereby violating the
doctrine of separation of powers under the state constitution" (¶
To save the statute's constitutionality, the majority declared that
"Wis. Stat. § 973.195 should be interpreted ... so that a
circuit court has discretion to consider (but is not bound by) a
district attorney's objection to a petition for sentence adjustment"
(¶ 82). "The net effect of the two concurring/dissenting opinions
is that read together, [the word] `shall' [as used in the phrase "the
court shall deny the inmate's petition"] is interpreted as directory,
thereby giving a circuit court discretion to accept or reject an
objection from a district attorney on a petition for sentence adjustment
under Wis. Stat. § 973.195" (¶ 83).
Justice Crooks' opinion, which was joined by the Chief Justice and
Justices Bradley and Butler to form a majority, describes the kind of
record that a circuit judge should make when deciding a sentence
adjustment motion. "[T]he record of the proceedings must clearly
demonstrate that the circuit court exercised its discretion and weighed
the appropriate factors when the court reached its decision on sentence
adjustment. An example of such balancing would be a record that showed
that the circuit court considered the nature of the crime, character of
the defendant, protection of the public, positions of the State and of
the victim, and other relevant factors such as `[t]he inmate's conduct,
efforts at and progress in rehabilitation, or participation and progress
in education, treatment, or other correctional programs....' Wis.
Stat. § 973.195(1r)(b)(1)" (¶ 126).
John Doe Investigations - Attorney Not Required to Take
Secrecy Oath When Secrecy Order Already in Effect
State ex rel. Individual
Subpoenaed to Appear at Waukesha County John Doe Case No. 2003 JD 001 v.
Honorable J. Mac Davis, 2005 WI 70 (filed 9 June 2005)
In this John Doe investigation commenced pursuant to Wis. Stat.
section 968.26, the judge issued a secrecy order. When a particular
witness was called to testify at the proceeding, the judge admonished
the witness about the secrecy order and required the witness to swear to
and sign an oath of secrecy. The judge likewise admonished the witness's
attorneys about the secrecy order and both counsel agreed that they were
bound by and would abide by the order. The judge then requested them to
take the same secrecy oath previously administered to their client; both
attorneys refused to do so. Because the attorneys refused to take the
secrecy oath, the judge disqualified them from representing the
The witness then sought a supervisory writ of prohibition from the
court of appeals to prohibit the John Doe judge from requiring the
attorneys to take the secrecy oath. The court of appeals certified the
matter to the supreme court, which granted certification.
The question before the supreme court was whether the John Doe judge
had either statutory or inherent authority to require counsel for a John
Doe witness to take a secrecy oath when the John Doe proceedings were
already subject to a secrecy order, and whether an attorney's refusal to
take such an oath can be the basis for disqualifying the attorney from
representing a witness at the John Doe proceeding.
In a unanimous decision authored by Chief Justice Abrahamson, the
supreme court held that a John Doe judge does not have either statutory
or inherent authority to require a witness's counsel to take an oath of
secrecy when the John Doe proceedings are already subject to a secrecy
order. "Accordingly, we hold that the John Doe judge's decision in the
instant case to disqualify counsel for declining to take a redundant
secrecy oath was unwarranted. We grant the writ of prohibition and
remand the cause for further proceedings" (¶ 2).
Jury Trials - Procedures for Handling Juror Dissent Revealed
During Polling of Jury
State v. Raye,
2005 WI 68 (filed 7 June 2005)
This criminal case involved the procedures to be used when a juror
dissents to the verdict during a jury poll. In State v. Wiese,
162 Wis. 2d 507, 469 N.W.2d 908 (Ct. App. 1991), the court of appeals
articulated two options for a circuit court to pursue if a juror
dissents during jury polling or indicates that the assent is merely an
accommodation and is against the juror's conscience. First, the court
can send the jury back for continued deliberations. Second, the court
may determine that further deliberations would be fruitless and grant a
mistrial. In State v. Cartegena, 140 Wis. 2d 59, 409 N.W.2d 386
(Ct. App. 1987), the court of appeals recognized that there also is a
third option for situations in which a juror gives an ambiguous or
ambivalent assent: question the juror. The Cartegena court held
that "circuit courts should interrogate jurors who, during the poll,
create some doubt as to their vote. Doubt may result from the juror's
demeanor, tone of voice, or language used. However, the circuit court
should first make a determination that the answer was ambiguous or
ambivalent before it questions the juror further" (¶ 35).
In this case the jury returned from deliberations with a purported
guilty verdict. During the ensuing poll each of the first six jurors
individually assented to the verdict. When asked by the circuit judge,
"Is this your verdict?" the seventh juror, Clark, replied, "Can I ask a
question?" The judge directed Clark to first answer the poll question.
Clark then responded "no." The judge continued polling the five
remaining jurors. With the exception of Clark, every juror assented to
the verdict. The judge then excused the remaining 11 jurors and
individually questioned Clark, who expressed concerns about the
evidence. When asked by the judge whether there was something the court
could do to assist him and whether the transcript was an important
issue, Clark responded in the affirmative. The judge instructed Clark to
return to the jury room to draft a written request for the transcript.
Ultimately, the jury requested and was given a transcript of the
testimony of one of the state's expert witnesses. Thereafter, it
returned a guilty verdict, this time without dissent.
The court of appeals affirmed the conviction. In a unanimous decision
authored by Justice Bradley, the supreme court reversed. Analyzing the
events as described above, the supreme court noted that "when initially
asked by the circuit court, `Is this your verdict?' Clark replied, `Can
I ask a question?' This response was clearly ambiguous. However, when
pressed by the circuit court to first answer the poll, Clark replied
with an unambiguous `No.' The record does not reflect any equivocation
in this answer. There was no caveat, and there was no indication that
Clark did not understand the question. With Clark's unambiguous `No,'
the circuit court had two options from which to proceed: grant a
mistrial or return the jury back for further deliberations. Ultimately,
it chose neither. Instead, it continued polling the jury and
interrogated Clark individually. Because these actions were not
available options upon a juror's dissent, the circuit court's decision
to pursue them constituted an erroneous exercise of discretion"
The supreme court was "troubled" by the nature and breadth of the
circuit judge's questions after Clark's initial dissent. "In continuing
the questioning and polling after Clark dissented to the verdict, the
circuit court unduly tainted the jury's deliberations" (¶ 42).
Among other things the judge should not have asked whether there was
something he could do to "assist" Clark. "It is not a question ...
that a circuit court should be asking of a lone juror who dissents from
the verdict. The potential for undue influence, even by a
well-intentioned court, is simply too great" (¶ 44). "We are also
troubled by the circuit court's decision to continue the poll after
Clark's dissent. Not only is this action not contemplated by the three
available options, but also it unnecessarily revealed the numerical
division of jurors, a practice disavowed by courts as immaterial and
potentially coercive" (¶ 45).
Double Jeopardy - Mistrials
State v. Moeck,
2005 WI 57 (filed 6 May 2005)
A jury convicted the defendant of various charges of sexual
misconduct, in what was the fourth trial for the same conduct. The court
of appeals reversed the conviction, because the trial court had granted
the state's motion for a mistrial during the third trial although the
record failed to reflect a "manifest necessity" for granting the
The supreme court, in an opinion written by Chief Justice Abrahamson,
affirmed the reversal of the conviction. The case presented two issues.
"First, did the court of appeals err as a matter of law in rejecting the
State's argument that the `law of the case' doctrine applied because on
two prior occasions the court of appeals rejected the defendant's
challenge to the circuit court's order for a mistrial in the third
trial?" (¶ 3) According to the supreme court, "[t]he law of the
case doctrine is a `longstanding rule that a decision on a legal issue
by an appellate court establishes the law of the case, which must be
followed in all subsequent proceedings in the trial court or on later
appeal'" (¶ 18). It is not, however, an "absolute rule that must be
inexorably followed in every case" (¶ 25). Although on two prior
occasions the court of appeals had determined that the trial court had
properly exercised its discretion in granting the mistrial, the third
occasion was different: "The difference warranting the court of appeals'
reversing itself is that in the instant case the court of appeals
examined all the facts, not just an incomplete version of the facts as
it had before" (¶ 26).
The second issue was whether double jeopardy precluded the fourth
trial following the mistrial in the third trial. The court held that a
mistrial could be granted on the state's motion only if granting of the
motion was "manifestly necessary" (¶37). The state's motion here
was predicated on defense counsel's opening statement in the third
trial, in which counsel declared that the defendant's own testimony
would contradict key testimony by prosecution witnesses. Although the
defendant had testified in the first two trials, he apparently changed
his mind, and he did not testify in the third trial. Because of defense
counsel's opening statement, as well as the likelihood that a curative
instruction might be unavailing and the fact that the defendant
exercised his privilege not to testify (free of any adverse comment),
the prosecutor moved for the mistrial, which the trial court
The supreme court expressed concern about "gamesmanship" in opening
statements. "We agree with the State that defense counsel `should not
allude to any evidence unless there is good faith and reasonable basis
for believing such evidence will be tendered and admitted in evidence.'
The Rules of Professional Conduct for Attorneys also address this issue,
providing that a lawyer shall not `in trial, allude to any matter that
... will not be supported by admissible evidence.' We also agree
with the State that it is unfair to an opposing party to allow an
attorney to present to the jury statements not susceptible to proof but
that are intended to influence the jury in reaching a verdict" (¶
The record here, however, revealed no calculated gaming or bad faith
by defense counsel. Nor did the record reveal the requisite manifest
necessity. For example, "[t]he circuit court erred as a matter of law in
its assessment of the State's inability in closing argument to rebut the
defense counsel's opening statement. The circuit court overstated the
difficulty the prosecuting attorney would have in both commenting on the
weakness of the opening statement and avoiding error by referring to the
defendant's failure to testify" (¶ 73).
Justice Roggensack did not participate. Justice Wilcox dissented on
the ground that the record did show a manifest necessity for terminating
the trial and stated that "[r]egardless of whether defense counsel's
opening statement was made in good faith, the fact remains that the
defendant was able to present his entire theory of the case without
actually introducing any evidence" (¶ 84). Justice Prosser filed a
separate dissent that took issue with both the double jeopardy and the
law of the case analyses.
Secret Videotaping - Impeachment
Maloney, 2005 WI 74 (filed 10 June 2005)
Maloney was convicted of murdering his wife. On review, the supreme
court, in an opinion written by Justice Bradley, retained jurisdiction
and ordered further briefs on two issues: the supreme court's authority
to remand to the circuit court for a motion for postconviction relief
based on the interest of justice; and, assuming the court has such
authority, whether the court should remand for such a hearing. The court
resolved three other issues that related to effective assistance of
Two of the issues concerned trial counsel's failure to challenge the
admissibility of videotape evidence. The defendant argued that the
admissibility could have been challenged on the ground that the special
prosecutor violated a rule of professional conduct or on the ground that
the videotaping violated state law. First, the court held that trial
counsel was not constitutionally ineffective by failing to challenge the
admissibility of videotape evidence based on an alleged violation of SCR
20:4.2. This allegation concerned a special prosecutor's decision to
surreptitiously videotape an "encounter" between the defendant and a
government informant, who consented to the taping. The alleged violation
of SCR 20:4.2 involved the special prosecutor's authorization of the
surveillance despite knowing that the defendant had retained counsel
(although he had not yet been charged). Observing that jurisdictions are
split on this issue (regarding precharge investigations) and expressly
declining to elect which path Wisconsin will follow, the court
nonetheless held that trial counsel was not ineffective for not raising
this challenge (see ¶¶ 24, 30).
Second, the court held that trial counsel was not ineffective for
failing to challenge the videotape evidence under the state's electronic
surveillance law. The court held that the informant's consent to the
surveillance rendered the tapes admissible under the statutes
(see ¶¶ 31-37).
On the third issue, the court held that trial counsel acted
reasonably when he cross-examined the state's lead investigator about
his possible bias against the defendant. The tenor of the questioning
required the investigator to make negative comments about the
defendant's own credibility (see ¶ 40). The court found
that this line of attack was a "commonly used tactic" (¶ 42) and
did not contravene the laws of evidence. "Here, the purpose and effect
of the cross-examination was not to impermissibly comment on the
credibility of Maloney. Rather, it was to impeach Agent Skorlinski by
portraying him as a good but closed-minded investigator who failed to
consider other suspects. As such, the questioning was not violative of
the Haseltine rule," which precludes one witness from
commenting on the credibility of another witness (¶ 44).
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Divorce - Child Support - "Shirking"
Chen v. Warner,
2005 WI 55 (filed 6 May 2005)
The mother and father, both physicians, divorced in 1999. At the time
of the divorce, both parents were working full time at the Marshfield
Clinic and earned very substantial incomes. The divorce judgment
provided for joint custody and equal physical placement of the minor
children and also provided that neither party would pay child support to
After the divorce, the mother sought to reduce her employment to be
more available for the children, who were of or nearing school age. Both
parents apparently agreed that it is in the children's best interest to
have child care provided by a parent. The mother voluntarily left her
full-time position at the Marshfield Clinic in May 2000 when she was
unable to reduce her schedule there to part time. She did not seek child
support at the time because she expected that income from her
investments would exceed her expenses. However, the stock market decline
in 2001 took a significant toll on the mother's investment income. She
began to look for employment but was not able to find any suitable
part-time opportunities within commuting distance from her home.
In 2002 the mother filed a motion to amend the divorce judgment to
require the father to pay child support. She asserted a substantial
change in circumstances to justify a child support award. Her income had
diminished substantially, and the father's income had increased
substantially. The circuit court ordered the father to pay child support
of $4,000 per month. The court of appeals affirmed. See Chen v.
Warner, 2004 WI App 112. In a majority decision authored by Chief
Justice Abrahamson, the supreme court affirmed the court of appeals.
The father argued that the mother's termination of employment in 2000
and her refusal to seek part-time work outside the Marshfield area were
unreasonable and amounted to shirking her obligation to support their
children. "To conclude that a parent is shirking, a circuit court is not
required to find that a former spouse deliberately reduced earnings to
avoid support obligations or to gain some advantage over the other
party. A circuit court need find only that a party's employment decision
to reduce or forgo income is voluntary and unreasonable under the
(¶ 20). In this case there was no dispute about the
voluntariness of the mother's decision to reduce her income from
employment outside the home. Rather, the focus of the parties' dispute
was whether the mother's decision to forgo employment outside the home
to become an at-home full-time child care provider was reasonable under
In addressing the question of reasonableness, the supreme court
stated that "the rule derived from the cases is that `[a] parent remains
obligated to make reasonable choices that will not deprive his or her
children of the support to which they are entitled.' The cases uniformly
state, in one way or another, that in considering a spouse's conduct in
voluntarily reducing his or her income, a court applies a test of
reasonableness under the circumstances. The case law recognizes that the
words `subject to reasonableness commensurate with a spouse's
obligations to the children' mean that a court balances the needs of the
parents and the needs of the child (both financial and otherwise, like
child care) and the ability of both parents to pay child support"
(¶ 25). The supreme court held that when an appellate court reviews
a circuit court's determination of reasonableness, "[the] appellate
court should independently determine the issue of reasonableness, giving
appropriate deference to the circuit court" (¶ 3).
The supreme court concluded that in this case, "the circuit court
correctly concluded that the mother's decision to remain unemployed to
be an at-home full-time child care provider was reasonable under the
circumstances, given the parents' agreement that, if feasible, it was
better for the children to have a parent at home full time than to have
both parents working full time or part time outside the home; the
benefit to the children in the instant case of having an at-home
full-time child care provider; the mother's inability to find part-time
employment within commuting distance of the home; and the father's
ability to make the additional expenditures for the children without an
impact on his standard of living or his short-term or long-term
financial health. We do not set forth a general rule that it is always
reasonable for a parent to terminate employment to become an at-home
full-time child care provider when the other parent has the ability to
support the children. We merely conclude that, under the facts of this
case, as a matter of law, and giving deference to the circuit court's
ruling, the mother's decision to forgo employment outside the home to
become an at-home full-time child care provider was reasonable and that
the circuit court correctly concluded that the mother was not shirking
her obligation to support the children" (¶¶ 77-78).
Justices Wilcox and Butler filed separate dissents.
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UM Coverage - "Hit-and-Run"
Progressive N. Ins. Co.
v. Romanshek, 2005 WI 67 (filed 7 June 2005)
Romanshek had a motorcycle liability policy that provided uninsured
motorist (UM) coverage. Romanshek was injured when an unidentified
vehicle turned left in front of his motorcycle, causing Romanshek to
lose control and fall. There was no physical contact between Romanshek's
motorcycle and the vehicle. The insurer denied Romanshek's UM claim
because there had been no "hit-and-run" involving the other vehicle. The
circuit court granted declaratory/summary judgment in favor of the
On bypass from the court of appeals, the supreme court, in an opinion
written by Justice Wilcox, affirmed. "The sole question presented on
this appeal is whether ... the phrase `hit-and-run' within the
definition of `uninsured motor vehicle' in § 632.32(4)(a)2.b.
requires an insurer to provide UM coverage when its insured is the
victim of a `miss-and-run' accident" (¶ 8). Romanshek argued that
Wisconsin case law had steadily "eroded" the physical contact
requirement set forth in precedent, and that the requirement also
contravenes public policy. After carefully reviewing case law, the court
rejected Romanshek's assertion that the physical contact rule had been
"eroded" by cases dealing with chain reaction collisions or cases in
which a "detached piece" of a car struck an insured's vehicle
(see ¶ 35).
"Thus, for over 20 years this court has consistently adhered to the
plain, unambiguous meaning of § 632.32(4)(a)2.b., as set forth in
[Hayne v. Progressive Northern Insurance Co., 115 Wis. 2d 68
(1983)]. We have consistently ruled that UM coverage was not mandated
under § 632.32(4)(a)2.b. in miss-and-run accidents. The cases in
which we found that UM coverage was mandated by § 632.32(4)(a)2.b.
all involved circumstances where an unidentified vehicle, or part
thereof, made contact with the insured's vehicle or where an
unidentified vehicle was `involved' in an accident in which there was
physical contact. In short, `[o]ur court and the court of appeals have
`drawn a line' on uninsured motorist claims[,]' by requiring physical
contact in order to fall within the mandated UM coverage in §
632.32(4)(a) 2.b. We simply have not deviated from that line when it
comes to miss-and-run cases" (¶ 39).
Nor was the court persuaded that it, as opposed to the legislature,
should revisit the public policy issue or that case law in other states
compelled a dramatic departure from stare decisis, especially a
departure that would affect contractual relationships. "While this court
may mold and develop common-law doctrines to best effectuate the purpose
for which they were designed, when applying statutes we do not carve out
exceptions to a clear, unambiguous provision anytime a party argues that
a particular result does not comport with what they assert to be the
subjective intentions of the legislators in enacting the overall
statutory scheme" (¶ 63).
Chief Justice Abrahamson dissented. She stated that the grounds for
her dissent were the reasons set forth in her dissent in Hayne,
case law developments in other states, and the "erosion" of the physical
contact rule in Wisconsin case law.
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Land Contracts - Title - Redemption
Steiner v. Wisconsin Am.
Mut. Ins. Co., 2005 WI 72 (filed 9 June 2005)
Patricia Steiner was injured when she fell into a dry well on a
resort's property on Oct. 15, 1999. Patricia and other family members
had owned the property since 1954 and had sold it on a land contract to
the Steiner Corp. in 1995. By 1998 the Steiner Corp. had stopped making
payments and various third parties held liens on the resort. The land
contract vendors began a foreclosure action. On Oct. 19, 1999, the
circuit court entered a "strict foreclosure judgment," which also set
forth a redemption period that began on Sept. 7 and ended on Oct. 7. The
court entered a final judgment on Dec. 1, 1999. In 2001 the plaintiffs,
including Patricia, sued the Steiner Corp. and its insurer for her
injuries. The circuit court granted summary judgment in favor of the
insurer and the Steiner Corp., finding that the latter was no longer an
owner as of Oct. 7, 1999, and thus was not an owner when Patricia was
injured. The court of appeals affirmed.
The supreme court, in an opinion authored by Chief Justice
Abrahamson, reversed and remanded the case. "The issue presented in this
case is when, under Wis. Stat. § 846.30, does equitable title to
the property in a land contract revert from a land contract vendee to
the land contract vendor. That is, does equitable title remain with a
land contract vendee until a circuit court, following expiration of the
redemption period for strict foreclosure, enters an order confirming the
land contract vendee's default? Or does equitable title to the property
automatically revert to the land contract vendor at the expiration of
the redemption period for strict foreclosure without a circuit court
entering an order?" (¶ 3)
The court held that "[o]n the basis of the text of Wis. Stat. §
846.30, the case law, Wisconsin practice, and legislative history, we
are persuaded that § 846.30 requires that in strict foreclosure a
circuit court must issue a final order to confirm a land contract
vendee's failure to redeem prior to the expiration of the redemption
period, and that only upon entry of the final order does a land contract
equitable title revert to the land contract vendor" (¶ 55).
"[I]n the present case equitable title did not pass from the Steiner
Corporation (the land contract vendee) to the land contract vendors
until December 1, 1999, when an order confirming the nonredemption was
entered. Accordingly, the Corporation had equitable title to the
property under the land contract on October 15, 1999, the date of the
plaintiffs' personal injuries, and the Corporation and WAMIC, its
insurer, may be subject to liability for plaintiffs' injuries" (¶
Justice Wilcox, joined by Justice Roggensack, dissented, on the
ground "that under § 846.30, equitable title on a land contract
passes as a matter of law following the vendee's nonpayment at the end
of the redemption period, as established by the land contract or a
previously issued court order for strict foreclosure" (¶ 78).
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Savings Statutes - Time-barred Claims
Walberg v. St. Francis
Home Inc., 2005 WI 64 (filed 2 June 2005)
Yox suffered from dementia and was a resident of the St. Francis
nursing home from March 1994 until December 1996. She died in August
2000. Two years after Yox's death, Yox's estate sued the nursing home
for negligence and breach of contract. The parties agreed that the
claims accrued in December 1996. The circuit court dismissed the claims
as time barred by Wis. Stat. section 893.22. The court of appeals
reversed, ruling that "Wis. Stat. § 893.22 applied only to cases
where a person dies with an existing claim that has less than one year
remaining on the period of limitation" (¶ 5). Thus, under the court
of appeals' decision, Yox's claim could be brought within two years of
her death, as provided by Wis. Stat. section 893.16.
The supreme court, in an opinion written by Justice Bradley,
affirmed. Relying on an 1887 decision, the court held that "Wis. Stat.
§ 893.22 applies only when a person dies with an existing claim
that has less than one year remaining on the period of limitation. We
therefore determine that Wis. Stat. § 893.22 acts as a saving
statute, not a statute of limitations. It provides an opportunity for
the representatives of any deceased person to evaluate the potential
claims and complete the procedures necessary to commence an action
within a period of one year following the death of the potential
claimant" (¶ 18). The court held that the statute does not apply to
situations in which more than one year remains on a statute of
limitation when a potential claimant dies.
The court next addressed Wis. Stat. section 893.16, the language of
which "makes evident that the statute operates differently based upon
whether the person's mental disability does or does not cease. If a
person's mental disability ceases, the action must be commenced within
two years. Wis. Stat. § 893.16(1). However, if a person's mental
disability does not cease, the period is extended for up to five years.
In either event, the underlying period of limitation is not shortened"
(¶ 20). It "belie[d] common sense" to argue that Yox's disability
somehow survived her death for purposes of section 893.16. Since death
terminated Yox's mental disability, Yox's estate had two years from that
date to commence this action pursuant to section 893.16(1), although a
statute of limitation cannot be extended by more than five years. "The
parties agree that both causes of action accrued on December 3, 1996.
Under Wis. Stat. § 893.54, she had three years to bring her
negligence action. Pursuant to Wis. Stat. [§] 893.43, she had six
years to bring her contract action. Had Yox not died, her underlying
periods of limitation would have extended for up to five years pursuant
to Wis. Stat. § 893.16(1). She therefore would have had until
December 3, 2004, to bring the negligence action and until December 3,
2007, to bring the contract action. Under either calculation Wis. Stat.
§ 893.22 cannot apply, for the claims were not in the final year of
their limitation period as of August 15, 2000, the date of Yox's death"
(¶ 24). Therefore, the court held, both claims were timely
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