Vol. 83, No. 8, August 2010
Arbitration Clause – Unconscionability – Sanctions
Cottonwood Fin. Ltd. v. Estes, 2010 WI App 75 (filed 25 May 2010) (ordered published 30 June 2010)
Estes engaged in “serial borrowing” from a payday lender, at a robust 521 percent rate of interest. The lender sued Estes in small claims court to collect the outstanding balance. When Estes counterclaimed alleging violations of Wisconsin’s consumer laws, the lender invoked the contract’s arbitration clause. The circuit court granted the lender’s motion for a stay and rejected Estes’s constitutional attack against the arbitration clause. It later confirmed an arbitrator’s award against Estes.
The court of appeals reversed in an opinion authored by Judge Hoover. The court held that the arbitration provision was substantively unconscionable because it barred Estes from participating in a class action, and the court remanded the case for a factual determination of whether the same provision was also procedurally unconscionable. (Unconscionability requires a finding of both substantive and procedural flaws) (see ¶ 24). The court rejected Estes’s assertions that the provision was unconscionable on several other grounds.
The court of appeals sanctioned Estes’s appellate counsel for serial violations of the rules of appellate procedure “by failing to provide proper citation to the appellate record or to the relevant case law.” The attorney also included the entire record in an “excessively long” appendix, which “defeat[ed] the very purpose of an appendix” (¶ 25). The court also chastised Estes’s lawyer for not filing a reply brief, an omission that may have lost the case for Estes had not the lender’s brief also been deficient (see ¶ 26).
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Sex-offender Registration – Wis. Stat. section 301.45(1m) – Calculating Age Difference Between Parties
State v. Parmley, 2010 WI App 79 (filed 26 May 2010) (ordered published 30 June 2010)
This case concerned the exception to the sex-offender-registration requirement applicable to underage sexual activity. The exception applies if, among other requirements, “the person had not attained the age of 19 years and was not more than 4 years older or not more than 4 years younger than the child” at the time of the violation. Wis. Stat. § 301.45 (1m)2.
The circuit court exempted the defendant from registering as a sex offender; it compared his age (18) with the victim’s age (14) at the time of the sexual activity and concluded that the defendant was not more than four years older than the victim. The state appealed. In a decision authored by Judge Anderson, the court of appeals reversed.
The appellate court said “to calculate the disparity of ages required in Wis. Stat. § 301.45(1m)(a)2., to determine if an actor is exempt from registering as a sex offender, the time between the birth dates of the two parties is to be determined. Using this method we first consider Parmley’s birthday of January 18, 1986, and then the victim’s birthday of June 9, 1990. We conclude that there is a difference of four years, four months and twenty-three days. Therefore, Parmley is more than four years older than the victim” (¶ 21).
Said the court, “To enhance and promote the state’s policy of protecting our children from sexual predators, the application of the exemption from registration as a sex offender when the actor is ‘not more than 4 years older,’ is determined by calculating the time between the birthday of the actor and the birthday of the victim. We reverse because it was error for the circuit court to only compare calendar year ages” (¶ 28). (Note: The court also rejected the defendant’s claim that the statute under scrutiny in this case is unconstitutionally vague as applied to him (see ¶¶ 25-27).)
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Search and Seizure – Third-party Consent to Seizure of Property
State v. Ramage, 2010 WI App 77 (filed 18 May 2010) (ordered published 30 June 2010)
The defendant and SF lived together in an apartment. The defendant owned two computers and occasionally allowed SF to use them; a password was not needed to access them. While the defendant was out of town, SF told a police detective that she was allowed to use the computers and that there might be child pornography on them. She signed a consent form authorizing the officer to search the premises and all property found therein, including personal computers, and to examine “any data stored” (see ¶ 4). The detective seized the computers and took them to the police department, where law enforcement personnel examined them and discovered the child pornography that formed the basis of the criminal charges subsequently lodged against the defendant.
The circuit court denied the defendant’s motion to suppress the child pornography images discovered when the police examined his computers. It ruled that since the computers were not protected by a password and SF had free access to them, she was able to consent to their search and seizure. Although the defendant conceded on appeal, as phrased by his main brief, that “[SF] gave voluntary consent, and that she could legally consent to a search of the apartment and personal property therein,” he contended that she could not consent to the detective taking the computers to the police department; he further argued that the subsequent search of those computers for child pornography was unlawful because the police did not have a search warrant authorizing that search (see ¶ 6). In a decision authored by Judge Fine, the court of appeals disagreed.
The appellate court rejected the defendant’s argument that he owned the computers and the police therefore violated his “possessory interest” in them when the detective took them and had them examined at the police department rather than examining them at the apartment from which they were seized. Said the court, “[SF’s] agreement that the detective could take the computers out of the apartment so they could be subject to what the pre-printed form referred to as a ‘complete search,’ and what the detective testified was ‘further analysis’ gave the detective the right under the Fourth Amendment to do what he did” (¶ 13).
As to the examination of the computers without a search warrant, the court concluded that “the scope of [SF’s] admittedly valid consent to examine and access the computers carried over to where the computers were accessed once the detective took them to the police department.… [T]he police here did not need any authorization beyond [SF’s] consent to access the computers” (¶ 15).
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Reversal of Maintenance and Child Support Determinations – Stipulation that Remand Court May Base Decision on Existing Record – Power of Remand Court to Exercise Its Discretion Wholly Independent of Original Court
Ladwig v. Ladwig, 2010 WI App 78 (filed 19 May 2010) (ordered published 30 June 2010)
This appeal after remand stems from the 2006 divorce of Daniel Ladwig and Judith Ladwig. Following an appeal from the original divorce judgment and postjudgment order, the court of appeals reversed the circuit court’s maintenance and child support determinations and remanded for further proceedings. Based on a stipulation by the parties, the remand court did not conduct a trial on the remanded issues but rather exercised its discretion based on the existing record. Daniel then appealed from the circuit court order on remand, which increased his maintenance and child support obligations (see ¶ 1). Among other things, he claimed that the remand court erred in making credibility determinations independent of the original circuit court.
In a decision authored by Judge Neubauer, the court of appeals disagreed with Daniel’s position. It concluded that “the remand court properly decided the remanded issues based on its independent review of the existing record and rendered findings of fact, including credibility determinations and the weight to be afforded to each witness’s testimony, in resolving factual disputes” (¶ 13). “[T]he directions on remand necessitated a reevaluation of the evidence and findings of fact. Based on the [original] trial court’s errors which encompassed both findings of fact and the proper standard of law, it stands to reason that the original court’s factual findings and conclusions of law relating to maintenance and child support could potentially come into play on remand” (¶ 12).
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Exclusions – Family – Wrongful Death
Day v. Allstate Indemnity Co., 2010 WI App 72 (filed 13 April 2010) (ordered published 30 June 2010)
A child, Emma, suffered a severe epileptic seizure and drowned in a bathtub while in the home of her father and stepmother, Holly. Emma’s mother brought wrongful-death and survivorship claims against Holly and Holly’s homeowner’s insurer, alleging that Holly negligently supervised Emma. The circuit court ruled that the insurer’s family-exclusion clause did not preclude coverage.
The court of appeals reversed in an opinion written by Judge Brunner. “The issue in this case is whether the family exclusion encompasses wrongful death and survivorship claims brought by someone other than an insured person” (¶ 8). The court held that the family-exclusion clause “unambiguously precludes coverage” for both claims because “Emma’s parents are her heirs.” Her father, who was an “insured person” under the policy, would otherwise “benefit from coverage by virtue of his legal right to collect a portion of the wrongful death award” (¶ 11). The family exclusion also barred Emma’s mother’s survivorship claims, which would pass to her parents through Emma’s estate under the laws governing intestate succession (see ¶ 13).
The result would not differ if Emma’s father waived his interest in the wrongful death or survivorship awards. “The family exclusion clause would be rendered a nullity if an insured person were allowed to waive his or her interest to effectuate another’s recovery. We will not interpret a policy to cover risks the insurer did not contemplate or underwrite and for which it has not received a premium” (¶ 14).
The court also rejected the mother’s assertion that the insurer had to prove collusion between family members in invoking this exclusion. “At no time has our supreme court conditioned the enforceability of the family exclusion upon a showing of actual collusion. Instead, the court has ‘assumed collusion in all cases, thereby finding that family exclusion clauses are not contrary to public policy’” (¶ 15). Finally, it was inconsequential that Emma’s mother was undisputedly not an insured person under the policy (see ¶ 16).
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Motor Vehicle Law
Operating with a Prohibited Alcohol Concentration – Determining Applicable Blood-alcohol Limit When Prior Convictions Involved
State v. Sowatzke, 2010 WI App 81 (filed 26 May 2010) (ordered published 30 June 2010)
A person violates the law when he or she drives or operates a vehicle on a highway or in certain other locations with a “prohibited alcohol concentration” (PAC). As applicable to this case, Wis. Stat. section 340.01(46m) (2007-08) defines the PAC as 0.08 if the defendant has two or fewer prior relevant impaired-driving convictions (as counted under section 343.307(1)) and further defines the PAC as 0.02 if the defendant has three or more prior convictions.
In this case the defendant was arrested for driving while under the influence (OWI); his blood-alcohol concentration was 0.048, and he had two prior impaired-driving convictions. However, before this case was concluded, the defendant was convicted of another OWI. The prosecutor then added a PAC count to the present prosecution because the defendant had acquired a third impaired-driving conviction and, according to the prosecutor, the 0.02 PAC law was now applicable to him. The defendant argued that the 0.02 law did not apply to him because, on the date of his arrest in the present case, he only had two prior convictions and thus was subject to the 0.08 law.
In a decision authored by Judge Anderson, the court of appeals agreed with the defendant. It concluded that the defendant’s blood-alcohol limit was 0.08 at the time he was arrested in the present case and the state could not enforce the 0.02 law against him by virtue of a conviction on a third OWI offense when that conviction occurred after his arrest in the present case (see ¶ 13).
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Adverse Possession – Acquiescence
Steuck Living Trust v. Easley, 2010 WI App 74 (filed 13 May 2010) (ordered published 30 June 2010)
The plaintiffs filed an adverse- possession claim to ownership of about 17 acres of undeveloped land, based mainly on hunting-related activity by them and their predecessors. Following a bench trial, the court awarded ownership to the plaintiffs.
The court of appeals reversed in an opinion written by Judge Vergeront. First, the trial judge gave insufficient consideration to the presumption in favor of the titleholder (see ¶ 18). The law did not require that the titleholder, Easley, “prove efforts to keep trespassers out, to post his land, and to patrol it” (¶ 17). Under the doctrine of adverse possession, the court held that “the regular use of the disputed area for hunting, the deer stands, and the dirt road and trail do not constitute open, notorious, visible, exclusive, and hostile use” (¶ 19). Gun shots, for example, did not provide notice of adverse possession to a reasonably diligent titleholder because they were consistent with trespassers, as was true of the deer stands (see ¶ 20). The doctrine’s “substantial enclosure requirement” was not met either. Neither a natural swampy area nor a 200-foot drainage ditch provided reasonable notice of a “border dispute” (see ¶¶ 26, 30).
The court also considered the doctrine of acquiescence while noting its imprecise relationship to adverse possession (see ¶ 34). Assuming that acquiescence is a “distinct means of proving adverse possession,” the plaintiffs failed to carry the burden of proving “open and visible” activity here: “The boundary must be physically defined in some equivalent way that makes it reasonable to infer the titleholder understood it as the boundary. The swampy area and man-made ditch do not meet this standard” (¶ 40). Nor did other evidence of the plaintiffs’ isolated activities fill the gap.
Judge Dykman dissented on the ground that “the majority has made it impossible to adversely possess hunting land, which is characterized by an absence of fences and structures” (¶ 44). He criticized the majority for “second-guessing” the trial judge by “re-weighing” the evidence (see ¶ 45).
Acquiescence – Obliteration
Boerst v. Henn, 2010 WI App 80 (filed 11 May 2010) (ordered published 30 June 2010)
A boundary dispute erupted among neighbors when a surveyor came across a long-lost monument apparently put in place in 1912. The circuit court ruled that the parties had “acquiesced to a different boundary” and that the corner marking the section line between properties had been “obliterated” (¶ 1).
The court of appeals affirmed in part and reversed in part in an opinion written by Judge Peterson. The circuit court properly applied the doctrine of acquiescence, which, unlike adverse possession, applies when parties are “innocently mistaken about property boundaries” but not openly adverse (¶ 9). “The circuit court concluded the doctrine applied here because all of the parties owning land bordering Henn Road mistakenly believed it to be the property boundary for several decades and used the land accordingly. The court found that ‘for almost all of the twentieth century and up until the year 2005, Henn Road was considered to be located mostly on the section lines between sections 4, 5, 8 and 9. Furthermore, almost a century has passed without any further legal disputes arising regarding the location of the section lines pertaining to this location’” (¶ 10). The court further held that the doctrine of acquiescence is not limited to boundary disputes arising from ambiguous deeds (see ¶ 11).
The circuit court erred, however, in finding that the section corner was obliterated when it conflated “the location of section lines with property lines” (¶ 15). “Acquiescence pertains to property lines vis-à-vis neighboring property owners. Acquiescence to a property boundary, however, cannot alter the location of a section corner on a government survey” (¶ 14). Thus, the court reversed the part of the judgment that suggested that Henn Road is the section boundary and remanded for the lower court to enter judgment declaring the road is the property boundary.
Medical Malpractice – Statute of Repose
Pagoudis v. Korkos, 2010 WI App 83 (filed 26 May 2010) (ordered published 30 June 2010)
Pagoudis sued his physician, Korkos, for failing to inform him that a pathology report on a large tumor removed from his neck showed signs of cancer. The surgery occurred in February 2000, and the final pathology report was dated March 8, 2000. The plaintiff filed this suit in November 2008. The circuit court granted the defendants’ motion to dismiss on the ground that the suit was filed beyond the statute of repose.
The court of appeals affirmed in an opinion written by Judge Neubauer. “Under Wis. Stat. § 893.55(1m)(b), a medical malpractice action is barred if it is not commenced within five years of the alleged act or omission. As a statute of repose, this limitation can be quite arbitrary as it ‘bears no relation to the accrual of a cause of action and may take effect before an injury is discovered or even before an injury has occurred’” (¶ 6). The court assumed Korkos was negligent. The issue was whether there was any disputed issue of fact showing that Korkos had concealed his negligence, thereby triggering the concealment exception to the statute of repose. The court held the record revealed no such concealment despite a note in the plaintiff’s file that may have been fabricated by Korkos. “Whether the note was fabricated after Pagoudis’s request for medical records in July 2007 or whether the note existed in the file at some earlier time, there is no evidence that the note prevented Pagoudis from discovering the negligence prior to extinguishment of Pagoudis’s right of recovery at the end of the period of repose in 2005” (¶ 9).
Privacy – Expert Evidence Required
Poston v. Burns, 2010 WI App 73 (filed 4 May 2010) (ordered published 30 June 2010)
A bitter feud between neighbors escalated into allegations that one set of neighbors was intentionally harassing the other by playing loud music and shouting insults into their home. To prove the obnoxious noise, those neighbors allegedly placed an electronic recording device in their own home, recorded sounds, and turned over the recordings (18 hours’ worth) to police. The alleged “noisy” neighbors contended that the electronic surveillance was actually far more sophisticated and intrusive than claimed, and that it had violated their privacy. A jury, after finding that the privacy rights of the noisy neighbors had been violated under Wis. Stat. section 995.50(2)(a), awarded no actual damages but said that the “eavesdropping” neighbors should pay about $40,000 in litigation expenses.
The court of appeals reversed in an opinion written by Judge Kessler. No competent evidence supported the jury’s determination that the eavesdropping neighbors had violated the privacy rights of the noisy neighbors. In particular, the circuit court erred by permitting lay testimony by the noisy neighbors that they “believed” a “sophisticated recording device” had been used to penetrate the privacy of their home. Such an opinion required expert testimony, which was not provided (see ¶ 21). In the absence of necessary expert opinion testimony, a directed verdict should have been granted in favor of the eavesdropping neighbors.
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