Vol. 80, No. 8, August 2007
LLCs - Email - Inspections
Kasten v. Doral Dental USA LLC, 2007 WI 76 (filed 22 June 2007)
Doral Dental, a limited liability company (LLC), administered dental programs for health maintenance organizations and state governments. When Marie and Craig divorced, each received about a 23 percent interest in Doral. Another person owned more than 51 percent of the company. In 2003 Marie asserted her rights under the operating agreement and Wis. Stat. section 183.0405(2) to inspect and copy company records and documents. Her concern was that insiders were diluting her interests. In later proceedings, she sought access to internal email messages. On a motion to compel, the circuit court ruled that the emails were not "company documents" under the operating agreements and, further, that Doral no longer possessed them. After additional litigation, the circuit court granted Doral's motion for summary judgment, "concluding that Doral Dental had `complied with [all requests for record inspection] that they were supposed to comply with'" (¶ 17). The court of appeals certified this matter so that the supreme court might "address the scope of an LLC member's right of inspection, and whether this right encompasses the right to inspect e-mails and document drafts" (¶ 18).
The supreme court, in an opinion written by Justice Butler, reversed and remanded the case. The court held that "Doral Dental's operating agreement provides greater member rights of inspection than Wis. Stat. § 183.0405(2) because `Company documents' is a broader category of stored information than `records.' We therefore do not address whether `informal' stored information and e-mails are `records' for purposes of Wis. Stat. § 183.0405(2). Construing Doral Dental's operating agreement, we conclude that `Company documents' embraces document drafts and some company e-mails. We therefore conclude the circuit court's ruling to the contrary was in error" (¶ 5).
Observing that LLCs are a hybrid entity, the court contrasted the LLC statutory inspection provisions with those governing corporations and partnerships, from which LLCs are derived. "[T]he scope of a member's right of inspection under the default inspection provisions of § 183.0405(2) is exceptionally broad, and hinges on what constitutes an LLC `record,' and the degree and kind of restrictions on access that `upon reasonable request' may impose" (¶ 38). After assessing various approaches, the court concluded that "the operating agreement provides member access to business-related company e-mails and document drafts" (¶ 50). Moreover, "[t]o the extent that records and documents requested by Marie under Wis. Stat. § 183.0405(2) contain information affecting her financial interest in the company, subsection (3) requires that the information contained in the records or documents be furnished to Marie" (¶ 52).
Finally, the court addressed what constituted a "reasonable request" for inspection. It concluded that "one purpose of the language `upon reasonable request' is to protect the company from member inspection requests that impose undue financial burdens on the company. Whether an inspection request is so burdensome as to be unreasonable requires balancing the statute's bias in favor of member access to records against the costs of the inspection to the company. When applying this balancing test, a number of factors may be relevant, including, but not limited to: (1) whether the request is restricted by date or subject matter; (2) the reason given (if any) for the request, and whether the request is related to that reason; (3) the importance of the information to the member's interest in the company; and (4) whether the information may be obtained from another source"(¶ 68).
Justice Crooks did not participate in this decision.
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Election of Remedies - Counterclaims - Claim Preclusion - Economic Loss Doctrine
Wickenhauser v. Lehtinen, 2007 WI 82 (filed 29 July 2007)
This lawsuit is the second in a tangle of litigation relating to real estate. Lehtinen (L) loaned the Wickenhausers (the Ws) large sums of money; in return, the Ws executed various options and security agreements. In the first action, the circuit court found that the Ws had not agreed to give L ownership of a large land parcel. The court also rescinded L's option to purchase because of lack of consideration, misrepresentations, and other reasons. In this second action, L and the Ws alleged issue preclusion and claim preclusion against each other. A jury found that L had engaged in fraud and awarded damages, including punitive damages, to the Ws. The court of appeals reversed because it concluded that rescission (the remedy from the first suit) was inconsistent with damages (the remedy from the second suit).
The supreme court, in an opinion authored by Justice Roggensack, reversed the court of appeals. The court first addressed election of remedies, "an equitable principle barring one from maintaining inconsistent theories or forms of relief" (¶ 16). "[T]he Wickenhausers' present action does not `upset the determination' reached in the first action; rather, it affirms the first action. In the first action, the Wickenhausers asserted an affirmative defense based on fraud in the inducement of the option, and the court, finding in favor of the Wickenhausers, rescinded the option. In this second action, the Wickenhausers are not seeking to enforce a contract provision against Lehtinen. Rather, this second action is based on fraud and the damages to them that resulted from Lehtinen's fraud. Therefore, it is consistent with the circuit court's factual findings and legal conclusions in the first action, i.e., that Lehtinen obtained the Wickenhausers' signature on the option by fraudulent misrepresentations. Since this second action was brought by a party who was a defendant in the first action and is consistent with the factual findings and legal conclusions of the first action, the doctrine of election of remedies does not bar it. We note that by permitting both rescission and restorative damages, the Wickenhausers will not receive a double recovery for the same injury. This is so because rescission of the option contract protects the Wickenhausers' future interest in their land and money damages compensates them for past injuries that were caused by Lehtinen's fraud" (¶ 20).
The court then turned to L's argument that claim preclusion blocked the Ws' assertion of claims that the Ws did not bring as counterclaims in the first suit. Although Wisconsin law regards counterclaims as generally permissive, under common law, in some circumstances counterclaims will be lost if they are not brought. First, the court found that all elements of claim preclusion were present (a final judgment, identity of parties, and identity of claims). But the Ws' counterclaims were not foreclosed by the common law rule because "this second action does not nullify the first judgment or impair any rights established in that action. In the first action, the Wickenhausers were successful in their affirmative defense based on fraud. This action for damages is based on the same fraud that was proven in the first action. The Wickenhausers are not attacking factual findings or legal conclusions previously determined. Accordingly, the Wickenhausers were not required to have counterclaimed in the first action under the common-law compulsory counterclaim rule; and therefore, they are not precluded from seeking damages in this second action" (¶ 38).
Finally the majority concluded that the Ws' tort claims were not precluded by the economic loss doctrine, because L's fraud was extraneous to, not interwoven with, the contract (¶ 42).
Chief Justice Abrahamson, joined by Justices Bradley and Butler, concurred in the holding regarding election of remedies but not in the discussion of the economic loss doctrine. First, "[t]he majority opinion's discussion of the economic loss doctrine ignores the parties' arguments and decides the application of the economic loss doctrine to the present case - an issue that the parties did not raise or brief" (¶ 45). Second, "[w]ithout briefs or argument by the parties and without analysis, the majority opinion extends the economic loss doctrine to the present case, beyond any case this court has decided" (id.).
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Legislature - Sheriff - Internal Management
Kocken v. Wisconsin Council 40, AFSCME, 2007 WI 72 (filed 14 June 2007)
A sheriff decided to stop using county employees to prepare meals for the county jail and instead to privately contract with a food service provider. The circuit court enjoined the public employees' unions from taking action against the sheriff. The court of appeals certified to the supreme court this issue: "[W]hether Sheriff Kocken's decision to enter into a contract for the preparation of meals for jail inmates falls within the sheriff's constitutional powers, rights, and duties, and is thus not subject to legislative limitations, including a collective bargaining agreement between Brown County and county employees" (¶ 3).
The supreme court, in an opinion written by Chief Justice Abrahamson, reversed the circuit court. The court held that "the Sheriff's hiring and firing of personnel to provide food service to the county jail is not a time immemorial, principal, and important duty that characterizes and distinguishes the office of sheriff, and as such, is not within the Sheriff's constitutional powers. Rather, the hiring and firing of personnel to provide food service to the county jail falls within the `mundane and commonplace' `internal management and administrative duties' not protected by the constitution. Hiring and firing personnel to provide food to inmates is subject to legislative regulation, including collective bargaining under Wis. Stat. § 111.70. The circuit court erred as a matter of law when it concluded that the contract with Aramark at issue is within the sheriff's constitutional prerogative. This error of law rendered the circuit court's judgment an erroneous exercise of discretion" (¶ 4).
The supreme court said that the circuit court's decision ignored case law and posed a "risk [of] over-constitutionalization [of] the powers of the office of the sheriff," contrary to the state constitution (¶ 43). "[E]ven when a task is related to a sheriff's constitutional powers, rights, and duties, like maintaining law and order, the sheriff may be subject to legislative regulation in regard to performance of that duty. The court's reasoning has been that many tasks for which a sheriff is responsible that relate to the office's constitutional powers, rights, and duties are nondistinctive, `mundane and commonplace' ` internal management and administrative' duties of a sheriff. Such duties do not themselves take on constitutional dimensions and can be regulated by the legislature" (¶ 60). "Just as the legislature can prescribe limitations on the sheriff's power to hire or terminate deputies who maintain law and order and preserve the peace, so too can the legislature regulate the employment decisions for food service workers at the county jail" (¶ 69). Finally, the court observed that its decision applied not only to sheriffs "but also to district attorneys and other officers" (¶ 71).
Justice Roggensack dissented and was joined by Justices Wilcox and Prosser. They concluded that the majority's opinion "takes away from the office of sheriff part of its constitutional power and gives that power to those who are not elected by the people"(¶ 78).
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Sentencing - Truth-in-Sentencing Cases - Consideration of Sentencing Guidelines
State v. Grady, 2007 WI 81 (filed 29 June 2007)
The defendant pleaded guilty to two counts of armed robbery for an offense that was committed on Nov. 12, 2003 (after the second wave of truth-in-sentencing legislation took effect). Although a sentencing guideline exists for this offense, neither the judge nor the parties mentioned the guideline at the sentencing hearing. When the defendant raised this as a postconviction issue, the judge stated on the record that she had considered the guideline during the initial sentencing hearing though she did not explicitly mention it. The court denied the postconviction motion, and the court of appeals affirmed. In a unanimous decision authored by Justice Wilcox, the supreme court affirmed.
The first question before the court was whether Wis. Stat. section 973.017(10) precludes appellate review of a circuit court's consideration of a sentencing guideline pursuant to section 973.017(2)(a). The latter subsection requires the sentencing court to consider any applicable sentencing guideline when making a sentencing decision. Section 973.017(10) specifies that this obligation "does not require a court to make a sentencing decision that is within any range or consistent with a recommendation specified in the guidelines, and there is no right to appeal a court's sentencing decision based on the court's decision to depart in any way from any guideline." The supreme court held that "[n]othing in the language of § 973.017(10) suggests that a circuit court's failure to consider an applicable sentencing guideline pursuant to § 973.017(2)(a) is not a valid grounds for appeal. Therefore, we conclude that like the other provisions of Wis. Stat. ch. 973 that establish obligations for circuit courts during sentencing, an appellate court may review whether or not a circuit court satisfied its § 973.017(2)(a) obligation" (¶ 18).
The supreme court then addressed the question of how a circuit court satisfies its section 973.017(2)(a) obligation to consider an applicable sentencing guideline. "We hold that a circuit court satisfies its § 973.017(2)(a) obligation when the record of the sentencing hearing demonstrates that the court actually considered the sentencing guidelines and so stated on the record. In this case, the record of the postconviction motion hearing reveals that the sentencing judge considered the applicable guideline during the sentencing hearing. Hereafter, supplementing the record with evidence beyond the sentencing hearing will be insufficient. For sentencing hearings occurring after September 1, 2007, a circuit court satisfies its § 973.017(2)(a) obligation when the record of the sentencing hearing demonstrates that the court actually considered the sentencing guidelines and so stated on the record" (¶¶ 2-3).
Providing further guidance to the circuit courts, the supreme court indicated that "[f]or a sentencing court to satisfy its § 973.017(2)(a) obligation there are not magic words that must appear in the record. The legislature has made clear that the § 973.017(2)(a) obligation `does not require a court to make a sentencing decision that is within any range or consistent with a recommendation specified in the guidelines.' Wis. Stat. § 973.017(10). By requiring circuit courts to consider any applicable guideline, the legislature has indicated that courts must at least take any applicable guideline into account. The consideration of an applicable guideline must occur for each sentence imposed for a sentencing court to satisfy its § 973.017(2)(a) obligation" (¶¶ 34-35).
The court rejected the defendant's argument that sentencing judges must complete any applicable sentencing guideline worksheet. Said the court, "[t]his is not required by the statute" (¶ 38). Addressing additional defense arguments, the court found that section 973.017(2)(a) "does not include language that suggests that considering a sentencing guideline means the sentencing court must explain both how the sentencing guideline fits the objectives of sentencing and how the sentencing guideline influences the sentence imposed. From the language of § 973.017(2)(a), a sentencing court must consider an applicable guideline, not explain it" (¶ 42).
Guilty Plea - Factual Basis - Plea Withdrawal _Bangert
State v. Lackershire, 2007 WI 74 (filed 21 June 2007)
The defendant is a mentally and physically challenged person who suffers from learning and cognitive disorders, has a 10th-grade education, and has a history of psychological problems. She is legally blind and lives on Social Security Disability and Supplemental Security Income payments (see ¶ 7). The defendant was charged with second-degree sexual assault of a child (sexual contact or intercourse with a person who has not attained the age of 16 years) contrary to Wis. Stat. section 948.02(2). She entered a guilty plea to this charge and subsequently sought to withdraw the plea. The circuit court denied the motion. In a published decision the court of appeals affirmed. See 2005 WI App 265. In a majority decision authored by Justice Bradley, the supreme court reversed the court of appeals.
The critical issue on this appeal was whether at the plea hearing the circuit court satisfied the "factual basis" requirement of Wis. Stat. section 971.08(1)(b), which provides that, before accepting a plea of guilty or no contest, the court shall "make such inquiry as satisfies it that the defendant in fact committed the crime charged." This requires a showing that the conduct that the defendant admits constitutes the offense charged (see ¶ 33). Establishing a factual basis "helps ensure that the defendant's plea is knowing and intelligent" (¶ 35).
In this case the state alleged that the defendant had an act of sexual intercourse with a 14-year-old boy (S) at the house where they both resided. At the guilty plea hearing the court used the criminal complaint and testimony from the preliminary hearing as the factual basis for the plea. However, these resources "raised a substantial question as to whether [the defendant] had committed sexual assault of a child or had herself been the victim of rape" (¶ 4). "[A]t no point did the court question [the defendant] about her contention [which was included in the criminal complaint] that [S] had raped her on the occasion of the offense charged. Neither did the court establish that [the defendant] understood that if [S] had raped her, she could not be guilty of sexual assault" (¶ 15). The circuit court should have made additional inquiry "to ensure that [the defendant] in fact committed the crime charged" (¶ 41). "Because a substantial question exists whether this is a sexual assault of or by [the defendant], and because the colloquy did not establish that [the defendant] realized that if the underlying conduct was an assault upon her, she could not be guilty of the offense charged, the circuit court failed to satisfy the factual basis requirement" of section 971.08(1)(b) (¶ 46).
The majority looked to State v. Bangert, 131 Wis. 2d 246, 389 N.W.2d 12 (1986), as providing the appropriate remedy for the circuit court's failure to follow the guilty plea procedures established in section 971.08(1) (including the factual basis requirement). "Under Bangert, where a defendant seeks to withdraw her plea and alleges a deficiency in the plea colloquy, she must first make a prima facie showing of a violation of § 971.08(1) or other mandatory procedure and allege that she did not know or understand information that should have been provided at the colloquy. If the defendant fulfills these requirements, the court must hold an evidentiary hearing at which the state has the opportunity to show by clear and convincing evidence that the defendant's plea was knowing, voluntary, and intelligent" (¶ 47) (citations omitted).
Applying Bangert, the majority concluded that the defendant made a prima facie showing that her plea colloquy was defective (because of the factual basis inadequacy as described above) and further that she alleged that she did not know or understand information that the court should have provided at the plea hearing. Because she met these requirements, the supreme court concluded that the case must be returned to the circuit court for a hearing at which the state will be "given an opportunity to show by clear and convincing evidence that the defendant's plea was knowing, intelligent, and voluntary, despite the identified inadequacy of the plea colloquy ... Because [the defendant's] plea colloquy was defective due to the circuit court's failure to make further inquiry to establish an adequate factual basis, the focus of the inquiry [on remand] will be on whether [the defendant's] plea was knowing and intelligent. Specifically, it will focus on whether [the defendant] realized that if she was raped, her conduct would not actually fall within the charge"(¶ 56).
Justice Butler filed a concurring opinion in which he joined the majority opinion but wrote separately to indicate that he would have a reached an additional issue relating to the elements of sexual assault that the majority declined to address (see ¶ 71).
Justice Wilcox filed a dissent that was joined by Justices Prosser and Roggensack.
Guilty Plea - Plea Withdrawal - Defendant's Right to a Hearing
State v. Howell, 2007 WI 75 (filed 21 June 2007)
The defendant sought to withdraw his guilty plea on a charge of being a party to first-degree reckless injury (Wis. Stat. § 940.23(1)(a)). He claimed that his plea was not entered knowingly, intelligently, and voluntarily because he failed to understand the concept of party-to-a-crime liability for first degree reckless injury (see ¶ 17). The circuit court denied the motion without an evidentiary hearing, and the court of appeals affirmed. See 2006 WI App 182. In a majority decision authored by Chief Justice Abrahamson, the supreme court reversed the court of appeals. The sole issue before the supreme court was whether the circuit judge erred in failing to hold an evidentiary hearing on the defendant's motion to withdraw his plea.
The defendant originally was charged with the reckless injury offense based on allegations that the defendant was the person who shot the victim. On the date originally set for trial, another person (Sharp) who was present at the crime scene allegedly admitted to the defendant's trial counsel that he, not the defendant, shot the victim. The defendant's counsel requested an adjournment in light of this information. At the next hearing, the state moved to amend the information to add party-to-a-crime liability on the theory that evidence at the trial might show that Sharp, not the defendant, was the shooter and that the defendant "assisted people in putting the victim" in a place where he could be shot by someone else (¶ 14). The defendant then entered a guilty plea to being a party to the crime of first-degree reckless injury. This appeal concerns his efforts to withdraw that plea.
The supreme court majority concluded that, for the purpose of determining whether the defendant should be granted an evidentiary hearing on his plea withdrawal motion, the requirements of the Bangert line of cases have been met and a hearing should be granted. See State v. Bangert, 131 Wis. 2d 246, 389 N.W.2d 12 (1986). The defendant's motion "makes a prima facie showing that the circuit court's plea colloquy did not conform with Wis. Stat. § 971.08 and judicially mandated procedures and includes the allegation that [the defendant] did not know or understand information that should have been provided at the plea colloquy" (¶ 7).
One of the disputes between the parties on appeal was whether the plea colloquy adequately and accurately informed the defendant about his party-to-a-crime liability as an aider and abettor. The court did advise the defendant that the state "would have to prove either that you were the person who did all those things [shot the victim in circumstances showing utter disregard for human life] or that you intentionally assisted someone else who was doing those things, knowing what they were doing" (¶ 41). The court also received an affirmative answer from the defendant in response to the following question: "So, Mr. Howell, you're not necessarily agreeing that you shot Mr. Pearson; that you are agreeing that you and your cousin went there and that you approached Mr. Pearson and by doing so you assisted your cousin in shooting him?" (¶ 42).
The supreme court concluded that this was an inadequate explanation of party-to-a-crime liability. "Simply stating that the State would have to prove that [the defendant] `assisted' or `intentionally assisted' the shooter was not sufficient to explain to [the defendant] aider and abettor party-to-a-crime liability, either generally or in the context of first degree reckless injury. The circuit court did not explain how [the defendant] had been a party to a crime if he `would have approached the victim' or if he had `assisted people in putting the victim in a place where he could be shot.' In short, the circuit court's descriptions of the aiding and abetting aspect of party-to-a-crime liability do not amount to a clear explanation of the charge" (¶ 48). (The supreme court suggested how a circuit court may ascertain a defendant's understanding of the charge at a guilty plea hearing (see ¶ 51).)
The court further concluded that there was an inadequate factual basis for accepting the plea. Though defense counsel stipulated to the criminal complaint as a factual basis, the allegations in the complaint had never been amended to reflect aider-and-abettor liability. At the guilty plea hearing the circuit court "did not inquire into how [the defendant] `assisted' Sharp, how `approaching' the victim constituted assistance, or how either alleged action was sufficient to establish that [the defendant] aided and abetted Sharp in the shooting. That [the defendant] observed Sharp with a firearm does not alone subject [the defendant] to party-to-a-crime liability. The circuit court did not inquire into [the defendant's] knowledge about Sharp's intentions or when [the defendant] first observed the firearm. The circuit court also did not inquire into who procured the firearm or brought it to the scene. Nor did the circuit court determine whether [the defendant] had the requisite intent for party-to-a-crime liability"(¶ 64).
Because the defendant satisfied Bangert's requirements for obtaining a hearing, the supreme court remanded the matter to the circuit court for the conduct of an evidentiary hearing, "at which the state is given an opportunity to show by clear and convincing evidence that the defendant's plea was knowing, intelligent, and voluntary despite the identified inadequacy of the plea colloquy. The [state will have the opportunity at the evidentiary hearing to demonstrate that [the defendant] understood his party-to-a-crime liability" (¶ 70) (internal quotes omitted).
The court did not examine whether the allegations in the postconviction motion would be sufficient under the Nelson/Bentley line of cases to entitle the defendant to an evidentiary hearing. See Nelson v. State, 54 Wis. 2d 489, 195 N.W.2d 629 (1972), and State v. Bentley, 201 Wis. 2d 303, 548 N.W.2d 50 (1996). This is because "[t]he evidentiary matter presented in the Nelson/Bentley portion of the motion, namely that [the defendant] misunderstood party-to-a-crime liability based on conversations with his attorney, will likely be addressed at the Bangert hearing" (¶ 87). ("The Bangert and Nelson/Bentley motions ... are applicable to different factual circumstances. A defendant invokes Bangert when the plea colloquy is defective; a defendant invokes Nelson/Bentley when the defendant alleges that some factor extrinsic to the plea colloquy, like ineffective assistance of counsel or coercion, renders a plea infirm ... [A] defendant may include both Bangert and Nelson/Bentley claims in a single motion to withdraw a plea of guilty or no contest" (¶ 74).)
Justice Wilcox filed a dissenting opinion that was joined by Justices Prosser and Roggensack, and Justice Prosser filed a dissenting opinion that was joined by Justices Wilcox and Roggensack.
Sentencing - Consecutive Sentences in Cases Involving Pre-TIS and TIS Sentences
State ex rel. Thomas v. Schwarz, 2007 WI 57 (filed 22 May 2007)
The defendant was convicted of two counts of forgery and, because these crimes occurred before the advent of truth-in-sentencing (TIS), he was given indeterminate sentences. Those sentences were stayed, and he was placed on probation. He was subsequently convicted of a burglary that occurred after the conversion to TIS and was given a bifurcated determinate sentence (confinement and extended supervision) to be served consecutively to the forgery sentences. (The defendant's probation on the forgery convictions was revoked because of the conduct giving rise to the burglary charge.)
Ultimately the defendant was released from prison: He was paroled on his indeterminate sentence and had completed the confinement term of his TIS sentence because he successfully completed the Challenge Incarceration (boot camp) program. He thereafter committed numerous violations of community supervision, and the Department of Corrections sought to simultaneously revoke his parole on the forgery conviction and his extended supervision on the burglary conviction. The defendant moved to dismiss the proceeding for revocation of extended supervision. He argued that parole and extended supervision involve two separate sentences, not one continuous period of supervision, that he had not yet started serving the extended supervision in the burglary case, and that, therefore, his extended supervision could not be revoked. The administrative law judge (ALJ) who presided over the revocation proceeding concluded that changes to the sentencing statutes because of TIS were not intended to change the existing law that all consecutive sentences are served as one continuous sentence. The ALJ found that the defendant had committed all of the alleged violations, and the ALJ revoked both his parole and his extended supervision. The ALJ did not order any reincarceration time for the parole revocation in the forgery case but recommended that the circuit court impose two years and 15 days of reconfinement in the burglary case.
The defendant appealed the ALJ's decision to the Division of Hearings and Appeals (DHA), challenging only the revocation of his extended supervision. The DHA administrator sustained the ALJ's decision, reasoning that Wis. Stat. section 302.113(4) (2003-04) plainly indicates the legislature's intent to continue the long-standing practice of treating consecutive sentences as one single, continuous sentence for TIS cases. The circuit court affirmed the DHA's decision. In a split decision the court of appeals reversed. It held that the defendant, who was serving his TIS sentence consecutive to his indeterminate sentence, was serving parole first, and had not yet begun to serve extended supervision at the time he committed parole violations.
In a majority decision authored by Justice Crooks, the supreme court reversed the court of appeals. The court observed that "the sentencing statutes do not answer directly the issue presented as to whether a person who is serving consecutive determinate and indeterminate sentences may have his or her parole and extended supervision revoked simultaneously" (¶ 39). "Although § 302.11(3) does not specify how consecutive determinate and indeterminate sentences are to be treated, it is reasonable to conclude ... that parole and extended supervision should not be viewed as two distinct time periods, with parole expiring before extended supervision can begin"(¶ 47). "We hold that extended supervision and parole are to be treated as one continuous period, and both may be revoked upon violation of the conditions imposed" (id.).
In sum the majority concluded that the DHA "acted properly, and within its jurisdiction, in revoking [the defendant's] parole and extended supervision simultaneously, since here the consecutive indeterminate and determinate sentences were properly treated as one continuous sentence with the confinement periods served first, followed by continuous nonconfinement periods of parole and extended supervision" (¶ 52).
Justice Bradley filed a dissenting opinion that was joined in by Chief Justice Abrahamson. Said Justice Bradley, "I would determine that [the defendant], who was serving consecutive sentences, was serving parole and had not yet been released to extended supervision. He therefore could not have had his extended supervision revoked under Wis. Stat. § 302.113(9)(am)" (¶ 78).
Effective Assistance of Counsel - Independent Investigation
State v. Mayo, 2007 WI 78 (filed 26 June 2007)
A jury convicted Mayo of robbery and related offenses. Mayo claimed that the alleged victim was lying about the robbery. Mayo said that he took the money because the victim had shorted him on a prior drug sale. The court of appeals affirmed the conviction.
The supreme court affirmed the court of appeals in an opinion by Justice Crooks. First, the court held that the prosecutor's arguments were improper in part, but those improper remarks did not justify a new trial based on plain error or the interest of justice (see ¶ 42). The court's opinion catalogues the improprieties, discusses them in light of ethical and constitutional standards, and then scrutinizes them for reversible error under several standards. For example, the prosecutor committed harmless error when she referred to the defendant's pre-Miranda silence during her opening statement. (Mayo had committed himself to testifying during jury selection.)
Second, the court concluded that the trial judge properly admitted the victim's prior statements as excited utterances, thus satisfying the hearsay rule. (see ¶ ¶ 53-55)
Third, the court found that "defense counsel's failure to conduct any independent investigation amounted to deficient performance under the circumstances, but Mayo failed to show that there was a reasonable probability that the result of the proceeding would have been different" (¶ 59). (Counsel's failure to object on any number of grounds to questions and argument was not deemed ineffective (see ¶ 63).) "On balance, we are satisfied, viewing the deficiencies of defense counsel and the incidents of prosecutorial misconduct individually and for the cumulative effect, that Mayo has not established that there was a reasonable probability that the result would have been different" (¶ 64).
Justice Butler concurred. He noted the court's unanimity in finding defense counsel deficient for failing to conduct an independent investigation but agreed the result would not have been otherwise different.
Chief Justice Abrahamson dissented. She pointed out that this was a "classic instance of `he-said-he-said'" (¶ 82) "in a trial awash with errors and improper conduct by the defense counsel and the prosecuting attorney" (¶ 85).
Wiretaps - Scope - Suppression
State v. House, 2007 WI 79 (filed 27 June 2007)
House was charged with a variety of drug-related crimes based on wiretap evidence that was gathered pursuant to a wiretap order issued by the court. After losing his motion to suppress evidence, he pleaded guilty. The court of appeals affirmed.
The supreme court, in an opinion written by Justice Bradley, affirmed the court of appeals. The majority carefully reviewed the principle features of the state's wiretap law, which is based on Title III of the federal Omnibus Crime Control and Safe Streets Act of 1968. The court agreed with House that the wiretap order was invalid because it authorized interceptions of nonenumerated offenses, specifically, money laundering, racketeering, and continuing criminal enterprise. None of these offenses are listed as crimes for which a wiretap may be authorized (see ¶ 13). The court also rejected the state's contention that these nonenumerated offenses fell under the wider aegis of "dealing in controlled substances," an enumerated offense. Under Title III, Congress delimited the states' authority to permit wiretaps and pointedly refused to permit legislation broader than the types of offenses set forth in 18 U.S.C. § 2516(2). In turn, the Wisconsin "legislature carefully demarcated the crimes for which wiretaps may be authorized under § 968.28. It followed the provisions in Title III, but deliberately did not include every crime contemplated in 18 U.S.C. § 2516(2). Further, where § 968.28 allows that a wiretap can be authorized for a crime not explicitly set forth in the federal statute, it carefully complies with the requirements of § 2516(2) providing for such additions" (¶ 27). Thus, the state could not bring in nonenumerated offenses through the back door by contending that they related to drug dealing or some other enumerated offense (see ¶ 33).
Although the wiretap order was invalid, suppression was not warranted "because the non-enumerated crimes in the order are surplusage. The wiretap order includes both enumerated and non-enumerated offenses. It is undisputed that there was probable cause for the enumerated offenses. There is no indication that communications regarding non-enumerated offenses were intercepted, and no non-enumerated offenses were charged. Thus, the statutory objectives of protecting privacy and restricting wiretaps to situations clearly calling for their use have been fulfilled despite the violation of § 968.28" (¶ 35). The majority carefully reviewed the national authority on this point, which it found "scant and equivocal" (¶ 48).
Justice Crooks filed a concurring opinion that was joined by Justices Wilcox and Roggensack. They agreed with the majority on the suppression issue but would have found the wiretap order valid on the ground that the enumerated offense of "dealing in controlled substances" swept broadly enough to encompass the allegations brought here.
Chief Justice Abrahamson dissented. She agreed that the order was invalid but concluded that the evidence should have been suppressed, contrary to the majority's determination. This remedy, the Chief Justice concluded, was necessary to enforce the statute's restrictions on law enforcement.
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Termination of Parental Rights - Parent's Failure to Assume Parental Responsibility
State v. Bobby G., 2007 WI 77 (filed 22 June 2007)
Bobby G.'s parental rights to his son were terminated because of his alleged failure to assume parental responsibility. This ground for termination is specified in Wis. Stat. section 48.415(6). Under the statute's 2003-04 version, which applies to this case, failure to assume parental responsibility is established by proof that the parent has never had a substantial parental relationship with the child. The statute defines "substantial parental relationship" as the "acceptance and exercise of significant responsibility for the daily supervision, education, protection and care of the child." The statute offers the following nonexclusive examples of what a court may consider in evaluating whether the person has had a substantial parental relationship with the child: whether the person has ever expressed concern for or interest in the support, care, or well-being of the child; whether the person has neglected or refused to provide care or support for the child; and whether a person who is or may be the father of the child has ever expressed concern for or interest in the support, care, or well-being of the mother during her pregnancy. (Editors' Note: The legislature has recently amended this statute and made changes to some of the language that was used by the court in its analysis of section 48.415(6). See 2005 Wis. Act 293, § 21.)
Bobby G. first learned that he had fathered the child in question when he received a summons in this termination of parental rights (TPR) proceeding. Admissions from him garnered through interrogatories and requests for admissions revealed that Bobby G. took no steps to assume parental responsibility before he learned of the existence of his son at the time this TPR case was instituted; however, several of his responses to interrogatories demonstrated that, after he learned of his son's existence, he made repeated efforts to communicate with his son and was interested in developing a parental relationship (see ¶ 16).
In the first phase of the TPR case (the fact-finding phase relating to grounds for termination), the circuit court granted partial summary judgment to the state and found Bobby G. to be an unfit parent; in so holding, the court declined to consider the father's efforts to assume parental responsibility for his son after the TPR petition was filed (though it did hear this evidence in the second phase of the proceeding, the dispositional phase). At the conclusion of the second phase, the court found it to be in the child's best interests to terminate Bobby G.'s parental rights. The court of appeals affirmed.
In a majority decision authored by Chief Justice Abrahamson, the supreme court reversed. It held that "in determining whether a party seeking termination of parental rights has proven by clear and convincing evidence that a biological father has failed to assume parental responsibility under Wis. Stat. § 48.415(6), a circuit court must consider the biological father's efforts undertaken after he discovers that he is the father but before the circuit court adjudicates the grounds of the termination proceeding. Thus the circuit court in the instant case proceeded under an erroneous interpretation of the statute. Accordingly, the facts were not fully developed; to the extent facts were developed, these facts and their import are in dispute. The parties disputed whether Bobby G. assumed parental responsibility after he learned of his paternity but before adjudication of the grounds for termination. Accordingly, with facts in dispute, the circuit court erred as a matter of law in granting partial summary judgment. Moreover, Bobby G. requested a jury trial, which the circuit court denied because it erroneously found no material facts or inferences therefrom in dispute. Neither the circuit court nor this court can deprive Bobby G. of a jury trial by deciding the factual dispute" (¶ 5).
Accordingly, the supreme court reversed the decision of the court of appeals affirming the summary judgment. The supreme court remanded the cause to the circuit court for a fact-finding hearing in accordance with Wis. Stat. section 48.424 to determine whether grounds exist for termination of Bobby G.'s parental rights to his son and, if necessary, for a dispositional hearing in accordance with section 48.427 on whether Bobby G.'s parental rights should be terminated in the best interests of his son.
Justice Wilcox filed a dissenting opinion that was joined by Justices Prosser and Roggensack.
Child Abuse Injunction - Sufficiency of Evidence - "Severe" Bruising
Kristi L.M. v. Dennis E.M., 2007 WI 85 (filed 3 July 2007)
This case involves a child abuse injunction that restricts the respondent father's contact with one of his children. Wis. Stat. section 813.122(5)(a) authorizes the court to issue such an injunction if, after the filing and service of a petition, the court holds a hearing and finds "reasonable grounds to believe that the respondent has engaged in, or based upon prior conduct of the child victim and the respondent may engage in, abuse of the child victim." "Abuse" includes "physical injury inflicted on a child by other than accidental means." Wis. Stat. § 48.02(1)(a). "Physical injury" includes but is not limited to "lacerations, fractured bones, burns, internal injuries, severe or frequent bruising or great bodily harm, as defined in s. 939.22(14)." Wis. Stat. § 48.02(14g).
The circuit court granted the injunction after the respondent's wife filed a petition alleging that she found bruises on the head of the couple's 11-month-old son after the child's visitation with his father. The mother also alleged that the respondent had made numerous statements, the content of which suggested that he posed a threat to the safety of his wife, the children, and himself. The court of appeals affirmed. In a unanimous decision authored by Justice Butler, the supreme court affirmed the court of appeals.
The supreme court concluded that "the record demonstrates that reasonable grounds existed to justify the circuit court's exercise of discretion in granting the injunction … on its reasonable belief that [the respondent] either engaged in abuse or may engage in abuse of [the child] based on [the respondent's] prior conduct," including but not limited to the severity of bruising the mother observed on the child's head after a visitation with his father (¶ 27). The statute speaks of "severe" bruising but does not define the term. The court concluded that "an interpretation of `severe bruising' that includes consideration of the circumstances surrounding the physical injury is reasonable and is consistent with the legislature's directive to `liberally construe' Chapter 48 to effectuate its legislative purposes, which include `recogniz[ing] that children have [a] … basic need to be free from physical … injury.' Wis. Stat. § 48.01(1)(ag)"(¶ 33).
In this case the bruises were described by the mother as being three distinct marks on the side of the victim's head that were "round like a fingerprint" (¶ 10). A physician testified that the bruises were consistent with markings caused by fingers or knuckles pressing on the child's skull (see ¶ 12). The supreme court concluded that these bruises were "severe" within the meaning of the statute, based on the combination of the following factors: "(1) the sensitive location of the bruising, on the child's skull; (2) the vulnerability of a child of [the victim's] age; and (3) the means by which the court determined the bruises were created, by an adult hand pressing on the child's skull" (¶ 34).
In addition to the evidence of bruising, the circuit judge explained that he was also "concerned about the cumulative aspect of the evidence." The supreme court agreed that the "cumulative aspect" of a variety of evidence regarding the respondent's past conduct provides reasonable grounds to conclude that he may engage in abuse of his son. This evidence included a telephone call the respondent made to his wife to inquire if she was aware of a situation in another city in which a man killed himself and his son. There also was testimony from the respondent's psychologist about the respondent's past struggles with suicidal thoughts and the increased risk of harm the respondent would pose to himself and others if he were to go off his medication. The respondent himself testified that he took his medication only "sporadically" and "couldn't answer" whether he might take himself off his medication again in the future (¶¶ 35-36).
In sum, the supreme court concluded that "the circuit court acted within its discretion in issuing the injunction ... because [the respondent's] prior conduct, including the bruising of [his son], gave the circuit court reasonable grounds to believe that [the respondent] engaged in abuse and may engage in abuse of [the child]" (¶ 40).
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Agent - Increased Coverage
Avery v. Diedrich, 2007 WI 80 (filed 27 June 2007)
The Averys carried $150,000 in insurance coverage on a vacation house (the Orchard property). In July 2002 they contacted their insurance agent, Diedrich, and requested that coverage be increased to $250,000, a figure Diedrich believed to be too high based on his estimate of replacement costs. The Averys indicated that they would seek an independent property valuation, and Diedrich confirmed this plan in a letter. Although the Averys allegedly obtained a contractor's oral valuation of the Orchard property at $250,000, this opinion was never communicated to Diedrich. In September 2002 a fire destroyed the Orchard property. The Averys sued Diedrich on the ground that he had breached his duty by not securing increased coverage; the Averys alleged that the replacement cost exceeded $250,000. The circuit court denied Diedrich's motion for summary judgment, "concluding that Diedrich, as an insurance agent, had a duty to carry out the Averys' instructions"(¶ 14). Relying on the same case law, the court of appeals reversed.
In a decision authored by Justice Wilcox, the supreme court affirmed the court of appeals. The Averys' tort claim rested in negligence. The parties agreed to the facts. The sole issue was as follows: "If an insured requests an increase in insurance coverage and the insurance agent has not agreed to procure it, does the agent have a duty to procure it?" (¶ 21). The court held that absent "special circumstances," Diedrich had no such duty. "Adhering to the underlying principles of the other cases related to the duty of insurance agents, we conclude that an insurance agent does not have a duty to procure requested insurance coverage until there is an agreement that the agent will do so" (¶ 29).
Concurring, Chief Justice Abrahamson, joined by Justices Bradley and Butler, agreed that the majority properly answered the narrow question as framed but believed the parties presented a "more nuanced question": "If an insured and insurance agent have a pre-existing relationship and a course of past dealing, and if the insured asks the agent to procure increased insurance coverage on an existing insurance policy and the agent explicitly refuses to procure the requested increased insurance coverage but their relationship continues, is the insurance agent liable to the insured when a loss occurs in excess of the policy coverage? The majority opinion does not answer this question" (¶ 38).
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Medical Malpractice Claim Against University of Wisconsin Hospital and Clinics Authority - Notice of Claim Statute Applicable
Rouse v. Theda Clark Med. Ctr. Inc., 2007 WI 87 (filed 6 July 2007)
The circuit court dismissed with prejudice the plaintiff's medical malpractice claim against the University of Wisconsin Hospital and Clinics Authority and several of its employees and Physicians Insurance Company of Wisconsin Inc. (collectively UWHCA), because the plaintiff failed to comply with Wis. Stat. section 893.80, Wisconsin's notice-of-claims statute. The court of appeals affirmed. In a majority decision authored by Justice Wilcox, the supreme court affirmed the court of appeals.
This case presented the single question of whether the UWHCA, as a statutorily-created, public body corporate and politic, is a "political corporation" for the purposes of section 893.80. This statute provides that no action may be brought against identified governmental agencies, including "political corporations," and their personnel unless a written notice of claim is served on the putative defendant within statutorily specified time limits. In medical malpractice cases notice must be served within 180 days after discovery of the injury or the date which, in the exercise of reasonable diligence, the injury should have been discovered. See Wis. Stat. § 893.80(1m).
The supreme court concluded that the UWHCA is a "political corporation" within the meaning of section 893.80 "because of the power and structure provided by the legislature in Wis. Stat. ch. 233" (¶ 2). Said the court, "[g]iven the power and structure of the UWHCA, we conclude that it is a `political corporation.' The legislature created the UWHCA. It has a statutory purpose, which includes providing high-quality care to the medically indigent, maintaining an environment for instructing future health care providers, leading efforts to reduce human suffering and promoting of health, and assisting with the delivery of health care around the state. The voting members of its board of directors are either public officials or appointed by public officials. It has a duty to engage in collective bargaining. It must enter into agreements and leases with the state. It must update the state on a consistent basis. The state is ensured access to the UWHCA's financial statements. In the event there is a failure to extend or renew an agreement or lease, facilities transfer to the board of regents. The power granted by the legislature, and the structure it has imposed on the UWHCA, indicate that the legislature intended the UWHCA to be a political corporation. Therefore, it falls within the notice requirement of § 893.80" (¶ 31).
The plaintiff argued that section 893.80 should not have applied to his case because of the exclusivity of Wis. Stat. chapter 655 when a person brings a medical malpractice claim. The court agreed that chapter 655 does provide the exclusive procedure for a person to pursue a malpractice claim against a health care provider (see ¶ 35). It does not, however, provide a comprehensive set of procedural rules for maintaining a medical malpractice claim (see ¶ 36). "Wis. Stat. ch. 655 does not exist in a procedural vacuum. Other procedures governing civil litigation apply to medical malpractice claims, unless they conflict with chapter 655" (id.) "Wisconsin Stat. § 893.80(1m) applies to medical malpractice claims against governmental bodies that fall within the scope of § 893.80, such as the UWHCA. Chapter 655 does not contain any statute of limitations provision that conflicts with § 893.80. The generally exclusive nature of Chapter 655 does not prevent the application of § 893.80 in this case" (¶ 39).
Chief Justice Abrahamson filed a dissenting opinion.
Justices Bradley and Roggensack did not participate in this decision.
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Lots and Lakeshore Frontage - Impact of Navigable Stream Meandering Through Parcel of Land
FAS LLC v. Town of Bass Lake, 2007 WI 73 (filed 19 June 2007)
At issue in this case is a parcel of land with approximately 103 feet of lakeshore frontage, which includes approximately seven feet of the mouth of a navigable stream that flows through the parcel and terminates at the shoreline of the lake. The town where the property is located notified the county zoning administrator that it believed the stream divided the parcel into two lots and that neither of these lots satisfied the county zoning ordinance's requirement that buildable lots have a minimum of 100 feet of lakeshore frontage. The county zoning committee determined that the parcel in question was not divided into two lots by the stream, but its decision was overturned by the board of appeals.
The circuit court reversed the board of appeals. It concluded that a landowner holds title to the center of a navigable streambed, and therefore, when a landowner owns both shores of the stream, the stream does not divide the parcel into two parcels or lots (see ¶ 6). The court of appeals affirmed.
In a majority decision authored by Justice Roggensack, the supreme court affirmed the court of appeals. It concluded that "[a] riparian owner holds qualified title to the center of a navigable stream. Therefore, when the same riparian owner holds qualified title to the property on both shores of the stream, his ownership is continuous throughout the streambed. Accordingly, a navigable stream meandering over a parcel does not divide the parcel into two parcels when the same riparian owner holds qualified title to the property on both shores of the stream. We also conclude that under the Sawyer County Zoning Ordinances then in effect, the entire parcel, including the streambed, is used to calculate the width of the lakeshore frontage. Therefore, because the board of appeals proceeded on an incorrect theory of law in regard to whether the navigable stream divided the parcel, it inaccurately calculated the width of the parcel at issue under the then effective zoning ordinance" (¶ 2).
Chief Justice Abrahamson filed a dissenting opinion that was joined by Justice Bradley.
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