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    Court of Appeals Digest

    This column summarizes selected published opinions of the Wisconsin Court of Appeals.
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    Wisconsin LawyerWisconsin Lawyer
    Vol. 79, No. 4, April 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

    * *

    Criminal Law

    Sexual Assault - Statutory Definition of "Sexual Intercourse"

    State v. Harvey, 2006 WI App 26 (filed 4 Jan. 2006) (ordered published 22 Feb. 2006)

    The defendant sought to withdraw his guilty plea to a charge of third-degree sexual assault. He claimed that the state failed at the guilty plea hearing to establish a factual basis for the sexual intercourse element of the offense. The circuit court denied the motion. In a decision authored by Judge Nettesheim, the court of appeals affirmed.

    In Wisconsin, third-degree sexual assault includes the offense of sexual intercourse without consent. Wis. Stat. § 940.225(3). The statute defines "sexual intercourse" to include several forms of conduct, including cunnilingus. See Wis. Stat. § 940.225(5)(c). This was the type of assault alleged in this case. At the guilty plea hearing the state used the criminal complaint and preliminary hearing testimony to establish a factual basis for the plea. The complaint and the testimony alleged oral contact by the defendant with the victim's genital area. The defendant claimed that this evidence was insufficient because it did not show "stimulation" of the victim's clitoris or vulva, which is designated an element of the crime by such authorities as the standard jury instructions. See Wis JI-Criminal 1200B.

    The court of appeals held that evidence of such stimulation is not required by the statute (see ¶ 14). "We conclude that a definition of cunnilingus that suggests the victim must be stimulated misrepresents the legislative intent to recognize sexual assault as a crime of violence and to protect victims of those crimes. Given the legal significance of the term `cunnilingus' in our sexual assault statute, we think a better resource [for a definition of the term] is Black's Law Dictionary 380 (6th ed. 1990) which more neutrally defines cunnilingus as `[a]n act of sex committed with the mouth and the female sexual organ.'" (¶ 17). Accordingly, the court of appeals held that the circuit court was correct when it found that the allegations in the criminal complaint and the testimony at the preliminary hearing furnished an adequate factual basis for the defendant's guilty plea to the crime of third-degree sexual assault.

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    Insurance

    UIM - Exclusions - Secondary

    Dempich v. Pekin Ins. Co., 2006 WI App 24 (filed 26 Jan. 2006) (ordered published 22 Feb. 2006)

    Dempich was injured in a two-vehicle accident while he was driving a vehicle owned by his employer. Dempich's employer carried worker's compensation (WC) insurance with Pekin Insurance Co., which also provided underinsured motorist (UIM) coverage of $100,000 per person and $300,000 per accident. The Pekin policy included a reducing clause and an "other insurance" provision. Dempich himself carried UIM insurance through State Farm. Dempich's policy contained the same limits, reducing clause, and "other insurance" provision as the Pekin policy. Dempich received about $77,000 in WC benefits and $50,000 (the liability limits) from the other driver's insurer. After adjusting for sums reimbursed to Pekin by Dempich, the circuit court calculated that Dempich's net recovery was $109,000. Dempich filed separate UIM claims with Pekin and State Farm for $100,000. Pekin denied the claim based on its reducing clause, and State Farm denied the claim on the ground that its coverage was secondary to any amounts paid by the primary insurer, Pekin.

    Dempich brought a declaratory judgment action and asked the court to declare that "Pekin and State Farm were each liable to [Dempich] for the $100,000 UIM limits of their respective policies" (¶ 6). The circuit court ruled that Pekin's reducing clause was valid. As to State Farm, the circuit court ruled that the reducing, excess, and anti-stacking clauses, when read together, created ambiguity. The court held that Dempich was entitled to $90,475 under the UIM coverage part of State Farm's policy.

    The court of appeals, in an opinion authored by Judge Dykman, affirmed in part and reversed in part. Addressing Dempich's cross-appeal, the court affirmed the circuit court's grant of summary judgment to Pekin. The court of appeals held that the reducing clause was "unambiguous within the context of the policy" and, as applied here, it reduced Dempich's available UIM coverage to $0 (¶ 2). With respect to the policy's declarations page, the court's "role is not to set `aspirational goals' or `demand perfection' in draftsmanship, but to determine if a policy as written is susceptible to more than one reasonable interpretation" (¶ 15).

    The court then turned to the claim against State Farm. The State Farm policy provided excess coverage. The court of appeals "conclude[d] that the anti-stacking and excess clauses of State Farm's insurance policy are contextually unambiguous and enforceable. Consequently, application of the anti-stacking and excess clauses leaves [Dempich] with no available UIM coverage under [the] State Farm policy" (¶ 1). Dempich contended "the anti-stacking clause is ambiguous because it does not clearly state whether it prevents State Farm's limits from being added to a second UIM policy's limits even when, as here, the second insurer has not paid its limits or any portion thereof. We conclude that whether the second insurer has paid is irrelevant under the language of the policy" (¶ 19).

    The court of appeals also "conclude[d] that a reasonable insured would not consider the policy apart from the anti-stacking and excess clauses, and would consequently apply their unambiguous terms to conclude that no UIM coverage was available under State Farm's secondary policy. Under the circumstances of this case, the anti-stacking and excess clauses, not the reducing clause, define the extent of available UIM coverage under State Farm's policy. Moreover, State Farm is not required to clearly state the possibility of $0 secondary coverage to avoid ambiguity" (¶ 30).

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    Municipal Law

    Police Disciplinary Hearings - Officer's Right of Confrontation and Access to Potential Witnesses

    Sliwinski v. Milwaukee Bd. of Fire & Police Comm'rs, 2006 WI App 27 (filed 24 Jan. 2006) (ordered published 22 Feb. 2006)

    The plaintiff and other Milwaukee Police Department (MPD) officers were implicated in an alleged conspiracy to steal drug money. They were caught as a result of an FBI sting operation that had been launched on information that another detective (Bonilla) had been stealing drug money. On certiorari review the circuit court upheld a decision of the Board of Fire and Police Commissioners of the City of Milwaukee (the board) discharging the plaintiff from his job as an MPD detective. The plaintiff appealed to the court of appeals, contending that during his disciplinary hearing the board denied him his rights to confront and have access to potential witnesses who might corroborate his assertions of innocence. In a decision authored by Judge Fine, the court of appeals agreed with the plaintiff. It reversed the circuit court and remanded the matter for a new hearing.

    The court of appeals said that the plaintiff was entitled at his hearing to the full panoply of due process protections, which include at a minimum the opportunity to confront and cross-examine adverse witnesses. As part of the due-process right to confrontation, which applies to hearings held to determine whether discipline imposed on police or fire officers is justified, persons subject to discipline by their departments have rights of access to witnesses with potentially exculpatory evidence (see ¶ 13).

    At the hearing in this case the plaintiff's attorney attempted to question the FBI agent in charge of the sting operation about the identity of the people who were at the scene of the sting. The board's hearing examiner excluded this evidence on relevancy grounds following objection by the police department's lawyer. The appellate court concluded that this was error. Said the court, "the `identity' of those who might have been present at the sting scene and therefore able to affirm or negate the Department's circumstantial evidence supporting Bonilla's testimony that [the plaintiff] conspired with Bonilla and [another officer] to take some of the bait money is not only highly `relevant' because it goes to the heart of the underpinnings of the Department's dismissal of [the plaintiff] from his job ... but, as we have seen, it is also within the core of [the plaintiff's] right to due-process fundamental fairness. Thus, the hearing examiner did not apply the correct legal standard when he ruled that the evidence was not relevant" (¶ 15).

    Property Taxes - Statutory Exemption for YMCA Property

    Lake Country Racquet & Athletic Club Inc. v. Morgan, 2006 WI App 25 (filed 26 Jan. 2006) (ordered published 22 Feb. 2006)

    Several for-profit health clubs (the plaintiffs) appealed from a partial summary judgment and a summary judgment dismissing their constitutional challenges to the portion of Wis. Stat. section 70.11(12)(a) that exempts from taxation property owned by Young Men's Christian Associations (YMCAs). The plaintiffs contended that these provisions violate the ban on private legislation in article IV, section 18 of the Wisconsin Constitution and also violate the equal protection guarantees of the Wisconsin and United States Constitutions. In a decision authored by Judge Dykman, the court of appeals rejected these challenges and affirmed the circuit court's judgments.

    Before adoption of the 2001 budget bill by the Wisconsin Legislature, the property tax status of YMCAs was determined by local tax assessors' evaluation of their benevolent status under Wis. Stat. section 70.11(4) (1999-2000). Historically, individual assessors had exempted local YMCAs from property taxes under this statute. In early 2001, companion bills were introduced in the state Senate and Assembly adding YMCAs to the list of national benevolent organizations exempted from property taxation under Wis. Stat. section 70.11(12)(a). The YMCA exemption was adopted by the legislature as a part of the budget bill.

    The plaintiffs argued that section 70.11(12)(a) violates the state constitution's prohibition on private legislation. Article IV, section 18 of the Wisconsin Constitution provides that "[n]o private or local bill which may be passed by the legislature shall embrace more than one subject, and that shall be expressed in the title." Employing a two-part analysis that is required when this type of challenge is presented, the appellate court first concluded that the process used by the legislature was adequate to entitle the bill to the presumption of constitutionality usually afforded legislative enactments (see ¶ 20).

    The court then held that the plaintiffs did not show beyond a reasonable doubt that the statute does not relate to a state responsibility of statewide dimension, or that its passage would not have a direct and immediate impact on a statewide concern or interest (see ¶ 28). "We conclude the YMCA exemption relates to a statewide responsibility of statewide dimension. Whether to exempt property of certain benevolent organizations is a responsibility of the state. Because YMCAs and YWCAs are located in communities throughout Wisconsin and their programs serve thousands of individuals, whether these particular entities are exempt from taxation is an issue of statewide dimension. We also conclude that the statute has an immediate and direct [e]ffect on a specific statewide concern or interest. Whether YMCAs are exempt from property taxation directly and immediately affects the resources available to YMCAs to provide benevolent programming to local communities" (¶¶ 29-30).

    The court of appeals also rejected the plaintiffs' claim that the YMCA exemption contravenes the equal protection guarantees of the Fourteenth Amendment and article I, section 1 of the Wisconsin Constitution. A classification made by the legislature that does not concern a suspect class or implicate a fundamental right must bear a rational relationship to a legitimate government interest. Before considering whether the classification is rationally related to a legitimate government interest, however, a court must answer two threshold questions: "first, did this legislation create a distinct classification of citizens; and, second, if so, did this legislation treat the class significantly differently from all others similarly situated?" (¶ 33) The appellate court found that the plaintiffs' equal protection claim failed at this preliminary stage.

    Said the court, "[t]he statute creates a distinct classification by exempting the YMCAs from taxation, thereby meeting the first test. However, [the plaintiffs have] not shown that for-profit health clubs and the YMCAs are `similarly situated.' YMCAs are benevolent organizations; the plaintiffs are for-profit businesses. Each has a very different mission. As the YMCAs note, their eleemosynary mission sets them apart from for-profit health clubs. The for-profit health clubs and YMCAs are not sufficiently alike for [the plaintiffs'] equal protection claim to pass this threshold inquiry" (¶ 34).

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    Real Property

    Eminent Domain - Comparable Replacement

    City of Janesville v. CC Midwest Inc., 2006 WI App 21 (filed 26 Jan. 2006) (ordered published 22 Feb. 2006)

    The city of Janesville started this action to remove a company, CC Midwest, from property the city had acquired through eminent domain. The city also sought a declaration that it had fulfilled its obligation under Wis. Stat. chapter 32, particularly its duty to provide a comparable replacement property before requiring CC Midwest to vacate. The circuit court granted a declaratory judgment in the city's favor and also issued a writ of assistance directing the sheriff to remove CC Midwest from the property.

    The court of appeals, in an opinion written by Judge Vergeront, reversed. "The issue on appeal is whether the circuit court correctly concluded that the City had met its obligation under Wis. Stat. § 32.05(8)(b) and (c) to make available to CC Midwest a comparable replacement property before requiring CC Midwest to vacate" (¶ 1). The court "conclude[d] there is nothing in the language of Wis. Stat. § 32.19(3) or (4m), or any other subsection of Wis. Stat.§§ 32.05 or 32.19, that supports the City's position that it need not make available a comparable replacement property meeting the definitions of § 32.19(2)(b)-(d), but instead need only identify property that could be made comparable and offer the payments required by § 32.19(3) and (4m)" (¶ 17).

    Nor did the case law support the city's position. "A requirement that a condemnor identify a comparable replacement property meeting the applicable definition in Wis. Stat. § 32.19(2)(b)-(d) before making an occupant vacate does not impose an `open-ended' financial obligation on the condemnor and does not render the provisions for payments in § 32.19 meaningless. It is not inconsistent for the legislature to provide that an occupant may not be required to vacate unless the condemnor has identified a comparable replacement property meeting the statutory definition, even though the condemnor's financial obligations to assist the occupant are limited by the provisions for payments in § 32.19" (¶ 28).

    In closing, the court acknowledged that requiring a condemnor to identify a comparable replacement property meeting the standards of section 32.19(2)(b)-(d) "may impose significant impediments to public projects in cases where no such property exists[,]" but it is the legislature's responsibility to balance competing policies and the result here is not an "absurd" construction of the statute (¶ 30).

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    Sexually Violent Persons Law

    Petition Decision - District Attorney "Input"

    State v. Bell, 2006 WI App 30 (filed 18 Jan. 2006) (ordered published 22 Feb. 2006)

    The court of appeals, in a decision authored by Judge Anderson, affirmed Bell's commitment as a sexually violent person under Wis. Stat. chapter 980. Bell's chief complaint was that a district attorney's office urged the Department of Corrections (DOC) to refer his case for a chapter 980 petition. "Bell argues that allowing local district attorneys to have input in an agency's decision on whether to file a ch. 980 petition subverts the legislative intent to insulate the decision to file a petition from political pressures and permits the careful screening process established by the legislature to be rendered meaningless" (¶ 9).

    The court found that neither Bell's statutory rights under chapter 980 nor his due process rights had been violated. "The threshold decision of whether a petition should be filed remains in the experienced and able hands of the agency with jurisdiction and outside of the political process. A district attorney may contact the agency to seek clarification of the Wis. Stat. ch. 980 evaluator's determination, to correct factual mistakes, to provide new or additional information, or to ask for a second opinion with a different evaluator. However . . . the agency can independently exercise its judgment and choose to ignore the district attorney's efforts or to decline the district attorney's request for a second evaluation if the agency determines that these efforts and requests are improperly politically motivated. Further, even if the agency accepts an invitation to obtain a second evaluation, the agency can thereafter refer the case to the DOJ [Department of Justice] for commitment proceedings or it can adhere to its original decision not to request that the DOJ file a petition" (¶ 15). The record revealed no evidence that the district attorney's office had "forcefully usurped the authority of the DOC and effectively made the commitment decision on its own" (¶ 18). Thus, Bell's due process rights were not violated.

    Torts

    Economic Loss Doctrine - Contribution - Expert Testimony

    Trinity Lutheran Church v. Dorschner Excavating Inc., 2006 WI App 22 (filed 12 Jan. 2006) (ordered published 22 Feb. 2006)

    Trinity Lutheran Church (Trinity) hired several contractors to build an addition to the church. A broken water lateral flooded the church and caused extensive damage. Trinity and its property insurer sued for recovery. Trinity had hired Oudenhoven Construction Inc. (OCI) to coordinate work among the subcontractors but not to supervise them. OCI hired a plumbing company, which in turn hired Baumgart Excavating to install the water and sewer laterals. Trinity itself, without OCI's involvement, hired Dorschner Excavating to lay the new building's footings. Expert testimony established that the lateral had been broken by a backhoe, a machine used only by Baumgart and Dorschner. Trinity sued Dorschner, which in turn filed a third-party complaint against Baumgart and OCI. A jury found causal negligence as follows: Dorschner, 20 percent; OCI, 60 percent; and Baumgart, 20 percent. Following complex postverdict motions, the trial court permitted Trinity to amend its pleadings to include negligence claims against OCI and Baumgart.

    The court of appeals, in an opinion written by Judge Deininger, affirmed. (The sufficiency of the evidence was also attacked but this issue will not be discussed further.) First, the court of appeals held that Dorschner's negligence claim against OCI was not barred by the economic loss doctrine. It was undisputed that OCI and Dorschner had no contractual relationship and thus were "`strangers' to each other who happened to be working side-by-side on a common project, not parties who had had an opportunity to `allocate economic risk by contract' between them" (¶ 18). Swimming in the seas of case law metaphors, the court concluded that "[i]t may well be that, where parties are linked to each other by contract, the economic loss doctrine may be invoked to avoid drowning contract law in `a sea of tort.' However, when there is no contractual relationship of any kind between two parties, it is equally important to prevent an allegedly injured party from `fall[ing] between the stools of tort and contract.' Thus, we conclude that the economic loss doctrine does not bar Dorschner from obtaining a judgment for contribution from OCI on account of the latter's negligence that contributed to the loss at issue" (¶ 20).

    Second, the court of appeals held that neither did the economic loss doctrine preclude Trinity's (belated) claim against OCI, as it was one primarily for services, not goods. "Trinity points out that the contract between it and OCI was not introduced at trial and the testimony regarding the purpose of their contract was limited. The circuit court concluded that the contract between Trinity and OCI was predominantly one for services, those being the overall coordination of the construction project. Because the economic loss doctrine is in the nature of an affirmative defense against a claim based in tort, we conclude that it was OCI's burden to introduce its contract with Trinity and to demonstrate that its predominant purpose was to supply Trinity with a product, not with services. OCI has not met this burden on the present record, and thus, we cannot conclude that the Trinity-OCI contract was predominantly one for other than construction coordination services, as the trial court concluded. Moreover, with respect to OCI's conduct that is specifically alleged to have occasioned Trinity's loss (i.e., negligence in coordinating the excavation services supplied by Dorschner), OCI was plainly providing a service, not a product, to Trinity" (¶ 25).

    Third, the court of appeals held that expert testimony or, more precisely, additional expert testimony, was not needed to establish OCI's negligence. "Although some aspects of building construction might well require expert testimony before a jury could properly comprehend and assess claims of negligence and causation, the claims against OCI in this case are not of that type. As [established by prior case law], `[o]ne does not need to be an expert to be able to determine whether' the location of a water pipe should have been marked or its integrity tested following excavation work above it" (¶ 28).

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