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    Wisconsin LawyerWisconsin Lawyer
    Vol. 79, No. 10, October 2006

    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

    * *

    Attorneys

    Client Referrals - Fee Sharing

    Abbott v. Marker, 2006 WI App 174 (filed 18 July 2006) (ordered published 30 Aug. 2006)

    Attorney Marker represented Abbott in a medical malpractice action, which was successfully settled. Abbott later alleged that he and Marker agreed that Abbott would receive 25 percent of any attorney fees Marker collected in cases referred by Abbott. When Abbott allegedly referred a medical malpractice case that resulted in a $1.6 million fee, Marker told Abbott that it would be "unethical" to pay him. Marker sued for his "fees" but the circuit court dismissed his claims.

    The court of appeals, in an opinion written by Chief Judge Cane, affirmed. "The sole issue is whether the agreement between Marker and Abbott is enforceable, either as a contract or quasi-contract. In Wisconsin, an agreement to compensate a non-lawyer for a client referral to a lawyer is barred by statute. See Wis. Stat. §§ 757.295 and 757.45" (¶ 6). Section 757.295 makes it "illegal for a party to solicit retainers or agreements from another party for an attorney" (¶ 7). Section 757.45 forbids "an attorney to split legal fees with non-attorneys" (¶ 8). Under these statutes, "the agreement between Marker and Abbott was illegal" (¶ 9). "Although the fact that the agreement between Marker and Abbott is directly contrary to statute is reason enough for us to decline to enforce the contract as a matter of law, it is also unenforceable on public policy grounds. It is implicitly declared in Wisconsin, through Wis. Stat. §§ 757.295 and 757.45, that referral agreements between an attorney and a non-attorney are contrary to public policy" (¶ 13).

    The court also rejected Abbott's argument that as a lay person he was not in pari delicto with Marker and thus should be entitled to collect a share of the fees. The court said that Marker was not acting as Abbott's attorney in these transactions. Nor, said the court, was this matter so technically complex that Abbott should be forgiven for any misunderstanding; he was presumed to know the law (see ¶ 18).

    "Although Marker disputes having made this referral arrangement with Abbott, if true, Marker has taken an unfair advantage of Abbott and violated his obligations under the statutes and professional ethics. However, to enforce the illegal agreement, we would in effect be nullifying Wisconsin's public policy and statutes prohibiting the sharing of attorney fees with non-attorneys in referral practices" (¶ 19).

    Finally, Abbott's unjust enrichment claim also failed. "Unjust enrichment is grounded upon the moral principle that a party who has received a benefit has a duty to make restitution where retaining such a benefit would be unjust" (¶ 20). "First, we choose not to enforce an agreement through unjust enrichment when the party cannot enforce the agreement through contract because it is illegal. Second, Marker has not received a benefit from Abbott which requires him to make restitution. Abbott provided Marker with a client referral. Wisconsin Stat. §§ 757.295 and 757.45 make it illegal for an attorney to receive a referral through paying a third party. Thus, Marker has not received a benefit that has a marketable value" (¶ 21).

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    Commercial Law

    "Creditor" - Consumer Act - Pleadings

    Rsidue LLC v. Michaud, 2006 WI App 164 (filed 13 July 2006) (ordered published 30 Aug. 2006)

    Rsidue purchased Michaud's overdue credit card account and then sued him to collect the debt. Michaud argued unsuccessfully that the pleadings did not comply with provisions of the Wisconsin Consumer Act, Wis. Stat. section 425.109(1). The circuit court granted judgment in favor of Rsidue.

    The court of appeals, in a decision authored by Judge Deininger, affirmed. "The principal question in this appeal is whether Rsidue's complaint must comply with the requirements of Wis. Stat. § 425.109(1). Because the pleading requirements under § 425.109(1) apply to a `complaint by a creditor,' ... our answer to the question turns in large measure on whether Rsidue is a `creditor' within the meaning of ... § 425.109" (¶ 5). The answer turned on whether Rsidue "regularly engages in any of the three activities that would render it a creditor within the meaning of Wis. Stat. §§ 421.301(16) and 425.109(a)" (¶ 9).

    First, because it was undisputed that Rsidue "neither sells goods or services to consumers on credit nor otherwise lends money to consumers, [therefore] it does not `engage,' regularly or otherwise, `in consumer credit transactions'" (¶ 11). Second, it was undisputed that "Rsidue also does not regularly engage `in arranging for the extension of consumer credit by' third persons" (id.). Third, Rsidue did not regularly engage "in procuring consumer credit from third persons" (id.).

    "We conclude that what Rsidue regularly procures from creditors is not consumer credit but the obligations of consumers to repay debts arising from credit previously granted to them by others. We therefore agree with Rsidue that it does not regularly engage in `procuring consumer credit' from third persons. Accordingly, we also conclude that, because Rsidue does not regularly engage in any of the activities that would render it a `creditor' within the meaning of Wis. Stat. §§ 421.301(16) and 425.109(1), the pleading requirements set forth in the latter statute for a `complaint by a creditor' do not apply to the complaint in this action" (¶ 14).

    The court also rejected the contention that "Rsidue should be held to the pleading requirements of Wis. Stat. § 425.109(1) because it is an assignee that succeeded to all of the rights - and liabilities - of a `creditor' in a consumer credit transaction" (¶ 18). "Quite simply, Wis. Stat. § 425.109(1) does not create any `claims' or `defenses' for consumers; the statute imposes pleading requirements on creditors. Thus, the statute deals with matters of procedure, not substantive legal principles (¶ 19).

    In sum, "Wis. Stat. § 422.407(1) has no bearing on the present dispute. The legislature certainly could have extended the pleading requirements of Wis. Stat. § 425.109(1) to complaints filed by assignees of creditors. It might easily have done so by simply inserting `or its assignee' at the end of the prepositional phrase `by a creditor.' However, because the legislature chose to include the `by a creditor' limitation without further extension or modification, we cannot conclude the statute imposes special pleading requirements on Rsidue because of its status as a creditor's assignee" (¶ 20).

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    Contracts

    Condominiums - Termination of Contracts by Owners' Association

    Hunt Club Condominiums Inc. v. Mac-Gray Servs. Inc., 2006 WI App 167 (filed 27 July 2006) (ordered published 30 Aug. 2006)

    Hunt Club Equities LLC, the owner of an apartment complex, entered into a 10-year lease with Mac-Gray Services Inc., under which Mac-Gray placed coin-operated laundry machines in the apartment complex for use by tenants. About two years after entering into the laundry room lease with Mac-Gray, the owner of the apartments converted them to condominiums. The Hunt Club Condominium Association thereafter assumed control over the condominium common areas and sought to evict Mac-Gray from the space it had leased for its laundry machines from the prior owner of the apartments.

    The circuit court granted the association a judgment evicting Mac-Gray from the premises. It concluded that the association was empowered by Wis. Stat. section 703.35 to terminate the Mac-Gray lease because it was a "contract or lease to which a [condominium] declarant ... is a party" (see ¶ 2). In a decision authored by Judge Deininger, the court of appeals reversed. It agreed with Mac-Gray that the lease in question does not fall within that category of terminable contracts.

    Under Wis. Stat. section 703.35 a condominium association under certain circumstances may terminate an existing lease, on 90 days' notice to the tenant. First, the lease must have been "entered into before the officers [of the condominium association] elected by the unit owners ... take office." Second, the lease or contract must fall within one of three categories specified in the statute: (1) a "management contract, employment contract, lease of recreational or parking areas or facilities"; (2) "any contract or lease to which a declarant or any person affiliated with the declarant is a party"; or (3) "any contract or lease which is not bona fide or which was not commercially reasonable to unit owners when entered into under the circumstances then prevailing" (emphasis added). The meaning of the second of these three categories was at issue in this case.

    The appellate court held that "the statute plainly requires that the `declarant or any person affiliated with the declarant' must, at the time an association seeks to terminate a lease or contract, then be a party to the lease or contract to whom the association is contractually obligated" (¶ 11). "We thus conclude the plain language of Wis. Stat. § 703.35 requires that, to be terminable under the provision at issue, a contract must presently bind the Association contractually to the person or entity that declared the condominium (or to some person or entity `affiliated with' the declarant). The Mac-Gray lease does not meet this description. Unless it is terminable by or ineffective against the Association for some other reason, the lease in question contractually obligates the Association, as landlord, to provide certain space to a tenant, Mac-Gray, in which the latter may install, operate and maintain its laundry equipment. The condominium declarant, Hunt Club Equities, LLC, although once a party to the lease as the original landlord, is no longer a party to the lease because it no longer owns or occupies the leased premises. The declarant's only relationship to the Mac-Gray lease is as the Association's predecessor, not as a party presently having any contractual rights or obligations vis-à-vis the Association" (¶ 13).

    The court noted that, on remand, the circuit judge may conclude that the association is empowered, for another reason, to terminate the lease under section 703.35. If the circuit court decides that the association may not terminate the lease under this statute, it may then consider, on the facts it finds or to which the parties agree, whether the association is bound by the lease. "Facts or factors that may then become relevant, among others, include the following: whether unit owners were informed of the Mac-Gray lease when they purchased their units or were otherwise aware of its existence; whether or when the Mac-Gray lease was recorded; whether Hunt Club Equities, LLC, executed and delivered any formal assignment of the lease to the Association; and whether (or how) Wis. Stat. § 704.09(3) applies to the present facts" (¶ 25).

    Criminal Law

    Sexual Assault by Correctional Staff Member - Application of Statute to Courthouse Bailiff

    State v. Terrell, 2006 WI App 166 (filed 18 July 2006) (ordered published 30 Aug. 2006)

    The defendant was employed as a Milwaukee County deputy sheriff and was assigned to work as a bailiff at the courthouse. As part of his duties the defendant was required to enter the Milwaukee County Criminal Justice Facility (the county jail) to retrieve prisoners for transport to the courts. It was alleged that he escorted the victim from the jail to the courthouse, placed her in a jury room, and then performed a sexual act with her in that room. The district attorney charged the defendant with a violation of the part of the second-degree sexual assault statute that prohibits sexual contact or intercourse by a correctional staff member. See Wis. Stat. § 940.225(2)(h).

    The defendant moved to dismiss the charge, arguing that he is not a "correctional staff member," defined as "an individual who works at a correctional institution, including a volunteer." Wis. Stat. § 940.225(5)(ad). The circuit court denied the motion and the defendant was permitted to take an interlocutory appeal. In a decision authored by Judge Wedemeyer, the court of appeals reversed.

    The court concluded that "the statute does not extend to a Milwaukee County sheriff's deputy, who was assigned to work as a bailiff in the courthouse. It is stipulated by the parties that [the defendant] was an employee of the sheriff's department and that he was assigned to work as a bailiff in the courthouse. The courthouse is not a `correctional institution.' Thus, based on the plain language of this statute, [the defendant] is not a `correctional staff member'" (¶ 8). "Although [the defendant's] work as a bailiff causes him to enter the criminal justice facility [which is a correctional institution] to move inmates from that building to the courthouse, such incidental conduct does not fall under the plain meaning of `work[ing] at a correctional institution.' Rather, the plain meaning of the statutory language applies to all those whose `work' is central to the function of a correctional institution, and which takes place within the walls of the correctional institution. Thus, if [the defendant] had been assigned to work at the criminal justice facility, he clearly would be a `correctional staff member.' His assignment, however, was not the jail, but the courthouse" (¶ 10).

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    Criminal Procedure

    Truth-in-Sentencing - Determining Penalty when Crime Started During TIS-I and Ended After TIS-II Took Effect

    State v. Thums, 2006 WI App 173 (filed 19 July 2006) (ordered published 30 Aug. 2006)

    In this case the court of appeals considered the question of which penalty scheme to apply when a course of conduct constituting a crime begins before the date of a penalty change but ends after that date. The defendant was sentenced for stalking with a dangerous weapon in accordance with the penalty scheme for that offense that was in place under Wisconsin's original truth-in-sentencing law (TIS-I). He argued that the court should have utilized the less onerous penalty scheme for that crime that was established under the second wave of truth-in-sentencing legislation (TIS-II) because the one instance in which he used a weapon (an element of the crime) occurred after the conversion date from TIS-I to TIS-II (Feb. 1, 2003). In a decision authored by Judge Brown, the court of appeals agreed with the defendant.

    Said the court, "a defendant has not committed an offense unless all the elements of that crime have been met. Thus, he or she incurs no penalties until that time" (¶ 10) (citation omitted). "[The defendant] had not committed the crime of stalking with a dangerous weapon during TIS-I. He therefore did not become subject to the TIS-I penalties during TIS-I" (¶ 11). Accordingly, the appellate court remanded the case to the circuit court for resentencing in accordance with the proper penalty scheme.

    Sentencing - Right to be Sentenced on Accurate Information

    State v. Moore, 2006 WI App 162 (filed 5 July 2006) (ordered published 30 Aug. 2006)

    The defendant pleaded guilty to one count of second-degree sexual assault of a child. The presentence investigation (PSI) report contained information about two prior juvenile contacts in which the defendant was arrested for sexual assault but never prosecuted. At sentencing the circuit court indicated that it would make a "strong distinction" between the two prior incidents and the current conviction because the previous incidents were contacts and not convictions. Nonetheless, the court considered the prior contacts as a negative aspect of the defendant's character (see ¶ 12).

    The defendant filed a postconviction motion seeking sentence modification and requested permission to support his postconviction motion with his confidential juvenile court documents submitted under seal. He alleged that the juvenile court records provided a "more exculpatory picture" of the two prior contacts than what was reported in the PSI and that, as a result, the circuit court relied on inaccurate information when it imposed sentence. The circuit court denied the motion without reviewing the sealed records and without holding a hearing, concluding that sentence modification was not warranted.

    In a decision authored by Judge Wedemeyer, the court of appeals concluded that "the trial court should have conducted an in camera review to determine whether the contents of those records rendered the resulting sentence one that was based on inaccurate information. Because the trial court declined to review the confidential records, we reverse the postconviction order and remand the matter to the trial court with directions to conduct an in camera review. After the review has occurred, the trial court shall determine whether the records rendered the information relied on at sentencing inaccurate. If the trial court determines the confidential records did not render the sentencing information inaccurate, then the order denying [the defendant's] postconviction motion shall be reinstated. If the trial court determines that the confidential records did result in reliance on inaccurate information at sentencing, then [the defendant's] postconviction motion should be granted and resentencing should be ordered" (¶ 8).

    Confrontation - Cross-Examination

    State v. Rodriquez, 2006 WI App 163 (filed 28 July 2006) (ordered published 30 Aug. 2006)

    The defendant was convicted of battery and other offenses. The court of appeals, in an opinion authored by Judge Fine, affirmed. The opinion deals with a variety of alleged errors.

    First, the court of appeals held that testimony about an excited utterance by victims to police did not violate the defendant's confrontation right under Crawford v. Washington, 541 U.S. 36 (2004) and Davis v. Washington, 126 S. Ct. 2266 (2006). A key issue was whether the hearsay was "testimonial" within the meaning of Crawford and Davis. "Victims' excited utterances to law-enforcement officers responding to either an on-going or recently completed crime, serve, as with the 911-call, a dual role - the dichotomy between finding out what is happening as opposed to recording what had happened, which, as we have seen, was recognized in Davis. Insofar as a victim's excited utterances to a responding law-enforcement officer encompass injuries for which treatment may be necessary, or reveal who inflicted those injuries, which may facilitate apprehension of the offender, they serve societal goals other than adducing evidence for later use at trial" (¶ 23). "[T]he out-of-court declaration must be evaluated to determine whether it is, on one hand, overtly or covertly intended by the speaker to implicate an accused at a later judicial proceeding, or, on the other hand, is a burst of stress-generated words whose main function is to get help and succor, or to secure safety, and are thus devoid of the `possibility of fabrication, coaching, or confabulation'" (¶ 26).

    On this record the victims' statements were not testimonial. "Simply put, Officers Sterling and Kurtz did not go to the [victims'] house looking for evidence with which to prosecute Rodriguez, and, after they arrived their focus was not on building a case against him but, rather, trying to ensure the safety of [the victims], and other members of the community. Thus, those out-of-court declarations were not testimonial. Similarly, when Officer Kurtz went to the ... house the next morning to return the dog and other property, his inquiries were limited to an assessment of whether [the victims] were still in danger, and [the daughter's] tug on the officer's trouser leg and spontaneous exclamation begging her mother not to lie and revealing that Rodriguez was still there and still a severe threat to their safety was also, under our de novo analysis, not `testimonial.' Once prodded by her daughter, [the mother] broke down and admitted the truth in an otherwise unprompted collapse of her fragile pretense that all was well. Those statements, also, were not `testimonial'" (¶ 27). Finally, the hearsay passed muster under the Ohio v. Roberts' formulation of the confrontation right, which governs nontestimonial hearsay.

    Several other asserted errors involved impeachment. The defendant's brother was properly cross-examined about his "affiliation" with a street gang. The brother was called to impeach a hearsay declarant (the victim) by testifying that she later recanted. His gang membership was relevant to her motive to recant (namely, fear). The defendant himself was properly cross-examined about numerous open warrants against him on the evening of the incident; he opened the door by using half truths to explain why he avoided police (see ¶¶ 29-36).

    Finally, defendant's trial counsel was not constitutionally ineffective for not objecting to the prosecutor's open-ended questions (narratives) and for asking one officer why he believed the victim's version of events that evening (see ¶¶ 37-41).

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    Family Law

    Child Support - Credit Against Support Payments Already Made for Social Security Benefits Paid on Behalf of Minor Child

    Paulhe v. Riley, 2006 WI App 171 (filed 5 July 2006) (ordered published 30 Aug. 2006)

    The Social Security Administration determined that Marcus Paulhe was disabled and therefore paid Social Security disability benefits to his former wife, Monica Riley, on behalf of the parties' minor child. Based on these disability payments, Paulhe sought credit against child support payments he had previously made. The family court granted Paulhe's request and entered a postjudgment order directing Riley to reimburse Paulhe for a portion of the child support payments.

    Riley appealed, arguing that the order constituted a retroactive revision of support contrary to Wis. Stat. section 767.32(1m). She also contended that the exception set out in section 767.32(1r)(d), which permits retroactive revision of child support based on Social Security disability benefits in instances of unpaid support, does not apply because Paulhe had made all of his support payments in a timely fashion. Riley argued that the statute codifies the only instance in which credit is allowed (see ¶ 2).

    In a decision authored by Judge Nettesheim, the court of appeals affirmed. It agreed with the family court's ruling that the order granting credit to Paulhe did not constitute a revision of the standing child support order. "Although Marcus titled his motion as one to `revise' support, his actual claim for relief was for `credit' against the support he had already paid. In granting that relief, the court did not disturb the standing order for child support. Instead, the court merely recognized that the child support for the period in question had been `double paid' - once via Marcus' direct payments and again via the social security disability benefits paid to Monica on [the child's] behalf based on social security payments Marcus previously had made though his earnings. Going into the hearing, Marcus' child support obligation stood at $513.45 per month; coming out of the hearing, the obligation, although suspended, remained the same" (¶ 13).

    The court also concluded, "both on grounds of public policy and fairness, that Wis. Stat. § 767.32(1r)(d) should not be construed to bar credit in a situation where a child support payor has made all requisite support payments. Our holding avoids an interpretation of § 767.32(1r)(d) which likely would create an equal protection violation. As the result of our decision, Wisconsin joins the majority of other jurisdictions that have addressed the issue before us" (¶ 4). "If we were to agree with Monica that Marcus is not entitled to credit, Marcus would be paying his child support obligation twice: first, by his initial support payments paid directly to Monica, and second, by the subsequent social security disability benefits paid to Monica on [the child's] behalf, funded by Marcus' earnings when he was employed" (¶ 21).

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    Property

    Condemnation Awards - Funds Deposited with Clerk of Courts

    HSBC Realty Credit Corp. v. City of Glendale, 2006 WI App 160 (filed 5 July 2006) (ordered published 30 Aug. 2006)

    As part of a substantial redevelopment project of a large shopping mall, the City of Glendale Community Development Authority (CDA) condemned a parcel of commercial real estate that contained several existing businesses. The CDA deposited with the clerk of circuit court the condemnation award totaling $14 million and gave requisite notice to interested persons. The clerk exercised his authority under Wis. Stat. section 59.40(3)(b) to deposit the award in Milwaukee County's general fund, which was earning interest at the rate of two percent annually. Consistent with section 59.40(3)(b), the county is allowed to earn and retain that interest.

    One of the interested entities was Bayshore Town Center (Bayshore). Bayshore moved the circuit court for an order directing the clerk to transfer the award into a private money market account for the benefit of those who will ultimately share the award. The circuit court granted the motion. In a majority decision authored by Judge Kessler, the court of appeals reversed. It concluded that "the trial court lacked authority to order that the Award be transferred from the Clerk's control and placed in a money market account with interest accruing to the benefit of the interested persons having a claim on the Award" (¶ 2).

    One of Bayshore's arguments was that the circuit court had the power to issue the order under review because it has inherent and equitable authority to administer the award. The appellate court disagreed. "We conclude that the trial court lacked inherent or equitable authority to order the Award transferred from the Clerk's office to a private money market account. `[A] court's exercise of equitable authority is only appropriate when a legally protected right has been invaded. Additionally, a court may not exercise its equitable authority if such exercise would ignore a statutory mandate.' We agree with the Clerk that the Award recipients have not established any right to earn interest on the Award. Wisconsin Stat. § 59.40(3)(b) specifically directs that interest earned on a deposited award shall accrue to the benefit of the county's general fund. Recognizing inherent authority to redirect an award elsewhere would `ignore [the] statutory mandate' of § 59.40(3)(b)" (¶ 13) (citations omitted). The appellate court further noted that an inherent power is one without which a court cannot properly function. "Investment of a condemnation award for the benefit of the condemnee is not a power without which a court cannot properly function" (¶ 14).

    The court of appeals further held that the circuit court lacked statutory authority to make the order under review. As indicated above, section 59.40(3)(b) gives clerks the authority to invest awards and directs that the accrued income shall be paid into the county's general fund. However, section 59.40(3)(c) provides that "[a] judge may direct that par. (b) does not apply to certain funds paid into the office." Concluding that the latter statute is ambiguous, the court found convincing evidence in legislative history that the intent of the legislature in enacting this statute "was only to allow the trial court to limit or veto the clerk's investment authority. Nothing in the legislative history supports a legislative intent to create a new procedure in this statute whereby the trial court could remove the award from the clerk's control and direct that those whose land was condemned receive future interest on the award" (¶ 27).

    (In a footnote the court noted that it was not deciding "whether Wis. Stat. § 59.40(3)(c) allows a trial court to prevent the clerk of courts from investing deposited funds at all, or whether that section simply allows the trial court to limit the clerk's choice of investment vehicles, or both, as this decision is not necessary to resolve this case, and was not fully briefed by the parties" (¶ 30 n.10).)

    Judge Fine filed a dissenting opinion.

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    Tenants - Attorney Fees - Invalid Lease

    Dawson v. Goldammer, 2006 WI App 158 (filed 26 July 2006) (ordered published 30 Aug. 2006)

    In Dawson v. Goldammer, 2003 WI App 3 (Dawson I), the court of appeals held that a tenant may seek enforcement of a rental agreement that includes an attorney fee provision that violates Wisconsin Administrative Code section ATCP 134.08(3). In the case at bar, the court held that when a tenant seeks enforcement of such a lease, the tenant can sever the attorney fee provision and enforce the remainder of the lease. The court therefore reversed the part of the circuit court's judgment that awarded attorney fees to the landlords, but it affirmed the circuit court's rulings on all other disputed grounds (see ¶ 1).

    "The primary disputed question in this case is whether a tenant who opts to enforce a lease containing an illegal attorney's fees provision can sever the provision and enforce the remainder of the lease or whether the tenant must abide by the lease in its entirety" (¶ 8). In short, the case presented a question of "severability, which requires an examination of the controlling administrative regulation and the intent underlying the provision" (¶ 9).

    "We now expressly hold that a tenant who opts to enforce a lease containing a prohibited attorney's fees provision pursuant to our holding in Dawson I may sever the provision and enforce the remaining legally valid lease terms" (¶ 15). "The rule of severability provides that a contract may survive if an illegal clause can be severed from the remainder of the contract without defeating the primary purpose of the bargain" (¶ 16). "As we discussed in Dawson I, Wis. Admin. Code § 134.08(3) is clearly designed to protect tenants from a provision landlords often insert solely for the purpose of intimidating tenants into forgoing their legal rights. Permitting tenants to sever an illegal attorney's fees clause advances this regulatory intent of protecting tenants. It allows tenants to pursue their legal rights unencumbered by the fear that they will be forced to bear their landlords' litigation expenses and strips landlords of any benefit of the illegal clause's inclusion. Thus, only the tenants ... may elect to sever the illegal attorney's fees provision and enforce the remainder of the legally valid lease terms" (¶ 18).

    The court also addressed three other issues. First, it upheld the circuit court's decision to dismiss the landlords' counterclaims because of "egregious misconduct" during discovery. Second, the court said that summary judgment was properly granted in favor of the tenants. Third, the court said that the circuit court appropriately appointed a receiver to manage the property in fulfillment of the judgment (see ¶¶ 21-36).

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    Torts

    Negligent Infliction of Emotional Distress - Bystanders - Direct Infliction

    Camp v. Anderson, 2006 WI App 170 (filed 25 July 2006) (ordered published 30 Aug. 2006)

    While "playing," 13-year-old Anthony brutally killed a dog belonging to 4-year-old Steven in Steven's presence. Anthony is also alleged to have chased Steven with a "feces-covered cattail." Juvenile charges against Anthony were dismissed when a psychologist diagnosed him as having Asperger's disorder, a form of autism. Steven's parents (the Camps) sued Anthony's parents for negligent supervision. The circuit court denied the Camps' motion to amend the complaint to allege negligent infliction of emotional distress against Anthony, because "direct claims for negligent infliction, as opposed to bystander claims, were not allowed under Wisconsin law" (¶ 6).

    The court of appeals, in an opinion written by Judge Peterson, reversed in an opinion that closely considers Bowen v. Lumbermens Mutual Casualty Co., 183 Wis. 2d 627, 517 N.W.2d 432 (1994). The court of appeals held that "Bowen acknowledged a direct claim for negligent infliction of emotional distress, but rejected that particular claim on public policy grounds" (¶ 17). This reading of Bowen was further buttressed by Wis JI - Civil 1511 (2006). Nor was this claim undone by Rabideau v. City of Racine, 2001 WI 57. "To the extent the Andersons argue that Rabideau bars recovery for the emotional distress Steven suffered as a result of witnessing the fatal injuring of his dog, we agree. Rabideau instructs that public policy bars recovery for the emotional distress of a bystander to an animal's death. However, Rabideau is not dispositive of the claim asserted by the Camps. The Camps claim Steven suffered emotional distress not as a bystander, but due to Anthony's directly threatening Steven with the feces-covered cattail. As discussed above, Bowen recognizes direct claims for negligent infliction of emotional distress, as long as a plaintiff's claim satisfies the elements of negligent conduct, causation and injury (severe emotional distress) and is not otherwise barred by public policy" (¶ 21).

    The court of appeals remanded the case for a determination of whether the emotional distress claim was adequately pleaded and whether public policy bars the claim.

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