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    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.

    Prof. Daniel D. Blinka & Prof. Thomas J. Hammer

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    Vol. 83, No. 9, September 2010

    Civil Procedure

    Admissions – Withdrawal

    Rivera v. Perez, 2010 WI App 91 (filed 17 June 2010) (ordered published 28 July 2010)

    This is a personal injury action arising out of a multivehicle accident. The circuit court granted summary judgment against Perez after denying her request to withdraw admissions and to instead deny liability.

    The court of appeals reversed in an opinion written by Judge Dykman. “We conclude that the record establishes that the trial court erroneously exercised its discretion by denying Perez’s motion to withdraw her admissions or granting summary judgment against Perez as a sanction” (¶ 7). The opinion applies Luckett v. Bodner, 2009 WI 68, and Wis. Stat. section 804.11(2), which controls such motions. Admissions may be withdrawn if doing so “subserves” a presentation on the merits and is not prejudicial to opponents. “We conclude that, as in Luckett, the fact that the parties regard the admissions as central to the case supports a finding that the first requirement under Wis. Stat. § 804.11(2) is met. Perez’s admissions concede negligence liability, the central issue in this case, and which Perez clearly intended to contest at trial. Also in accord with Luckett, we do not look to whether there is conclusive evidence in the record contradicting the admissions. Because the issue of negligence liability is the key issue in this case, the record is scarce as to actual liability, and Perez has now answered the requests for admissions by denying liability, we conclude the only reasonable finding under Wis. Stat. § 804.11(2) is that allowing Perez to withdraw her admissions will subserve the presentation of the merits” (¶ 15).

    Nor did the record show prejudice in permitting Perez to answer the admissions. “Here, in contrast, the requests for admissions and interrogatories were approximately two months overdue when Perez moved to withdraw her admissions and provided answers to the requests; Perez agreed to participate in a deposition scheduled for the time period while the requests for admissions were outstanding, and further agreed to reschedule the deposition at the request of counsel; only approximately one month passed between the time of the deemed admissions and Perez’s request to withdraw her admissions; and Perez moved to withdraw her admissions when trial was still several months away. These facts ... do not support a reasonable finding that allowing Perez to withdraw her admissions would result in prejudice to Haushalter based on egregious discovery violations” (¶ 25). Nor did anything in the record show that the opponent would suffer prejudice beyond having to prove the facts deemed admitted (see ¶ 26).

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    Employment Law

    At-will Employees – Public Policy

    Farady-Sultze v. Aurora Med. Ctr., 2010 WI App 99 (filed 2 June 2010) (ordered published 28 July 2010)

    The plaintiff was fired by her employer, Aurora, after she was inadvertently overpaid but never brought the mistake to her employer’s attention. Although an employee at will, she claimed that her firing violated public policy, and she also alleged defamation and intentional infliction of emotional distress. The circuit court dismissed her claims.

    The court of appeals affirmed in an opinion authored by Chief Judge Brown. The court tersely rejected the plaintiff’s claim that Aurora violated Wis. Stat. section 103.455, and thus public policy, by firing her for retaining the overpayment. “She never earned that sixteen hours of wages in Wautoma every pay period after she was reassigned. So, the goal of the statute, to protect earned wages, never came into play. Moreover, the purpose of the statute is to prevent unauthorized deduction from earned wages. There was no deduction of earned wages here. Therefore, despite her claim that she simply did not know that she was getting more wages than she was supposed to, the fact remains that her claim is not protected by public policy” (¶ 10). The court also upheld the dismissal of her claims for intentional infliction of emotional distress (as preempted by the Worker’s Compensation Act) and defamation (as unsupported by the facts).

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    Family Law

    Third-party Guardianships – Same-sex Couples – Equitable Estoppel

    Wendy M. v. Helen K., 2010 WI App 90 (filed 24 June 2010) (ordered published 28 July 2010)

    Wendy and Liz had been in a committed relationship for some years before they adopted two children. Liz was the adoptive parent because of her job and benefits while Wendy stayed at home with the children. After five years Wendy and Liz ended their relationship. Liz objected to Wendy’s petition for guardianship but the two engaged in an “informal ‘co-parenting’ arrangement” (¶ 2). The circuit court dismissed Wendy’s guardianship petitions because she failed to make the showing required by Barstad v. Frazier, 118 Wis. 2d 549 (1984), which applies when a legal parent (Liz) objects to a third-party guardianship (Wendy).

    The court of appeals affirmed in an opinion written by Judge Higginbotham. First, Wendy is not a parent within the meaning of Wis. Stat. section 54.15(5). The court eschewed dictionary definitions of parent because that term is defined in Wis. Stat. section 48.02(13) as “‘either a biological parent or a parent by adoption,’ a definition that plainly excludes Wendy” (¶ 11). Moreover, Barstad states that “a person who is not a biological or adoptive parent of a child is a third party who cannot become the child’s guardian over the biological or adoptive parent’s objection absent compelling reasons, such as the unfitness of the biological or adoptive parent” (¶ 12).

    Second, Liz is not equitably estopped from asserting that Wendy is not a parent. There was no allegation that Wendy has interfered with the extant co-parenting arrangement. “Rather, Wendy asks us to hold Liz to an alleged promise not to exercise her (Liz’s) rights under the law as the sole, legal adoptive parent of the children to preclude any other person (such as Wendy) from infringing upon her parental rights. To apply equitable estoppel on these facts would confer parental rights to not only Wendy, but likely to an entire class of persons as well, without regard to the clear statements of Chapters 48 and 54 of the statutes limiting the scope of the definition of parent and Barstad” (¶ 15).

    Further, Wendy did not prove “compelling reasons” as permitted by Barstad, which “is not concerned with detrimental effects to the child caused by the end of the relationship with a person, like Wendy, who is a third party to the child[.] The Barstad standard applies only to circumstances caused by the biological or adoptive parent drastically affecting the child’s welfare that might justify the award of custody (or guardianship) to a third party.... These circumstances, under Barstad, include abandonment, neglect, disruption of parental custody or other extraordinary circumstances caused by the biological or adoptive parent. Wendy makes no allegation that Liz meets any of these criteria” (¶ 19).

    Finally, the court rejected Wendy’s claims that her equal protection and due process rights had been violated.

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    Environmental Law

    Navigable Waters – Wells – DNR – Attorneys

    Lake Beulah Management Dist. v. DNR, 2010 WI App 85 (filed 16 June 2010) (ordered published 28 July 2010)

    “This decision explores the interplay between the public trust doctrine and the regulation of high capacity wells, especially when citizens or conservancy organizations such as lake management districts perceive that a proposed well may adversely affect nearby navigable waters” (¶ 1). The Wisconsin Department of Natural Resources (DNR) granted a permit to a village for a high-capacity well. Several “conservancies” (¶ 6) intervened through a contested-case procedure, challenging the well’s effect on a nearby lake. The DNR eventually agreed that it had authority to consider the public trust doctrine in deciding this issue but contended that no evidence showed any adverse effect. Litigation resulted over the original 2003 permit and several later permits. The circuit court ultimately denied the petition for review brought by the conservancies, triggering this appeal.

    The court of appeals affirmed in part and reversed in part in an opinion authored by Chief Judge Brown. First, in considering the permits, the DNR had authority to act in accordance with the public trust doctrine (see ¶ 27). Second, the appellate court rejected “the conservancies’ completely opposite contention that the DNR was required to conduct a full and thorough environmental review. As our foregoing discussion makes plain, the fact that the DNR had the authority to consider environmental factors with regard to Well #7 does not mean that it was required to do so. We disagree with the conservancies’ contention that the DNR always has a sua sponte affirmative obligation to consider a well’s effect on the waters of the state regardless of whether the DNR is presented with any information suggesting that the well might have a negative effect. We agree with the DNR that this would present it with an impossible and costly burden were we to adopt the conservancies’ reasoning. We further agree with the DNR that its public trust duty arises only when it has evidence suggesting that waters of the state may be affected by a well” (¶ 29).

    Third, the court left it to the DNR “to determine the type and quantum [of evidence] that it deems enough to investigate. But, certainly, ‘scientific evidence’ suggesting an adverse affect to waters of the state should be enough to warrant further, independent investigation” (¶ 31). Fourth, the court discussed in general the administrative framework within which citizens can present evidence to the DNR regarding public-trust-doctrine issues (see ¶ 32). Fifth, such information had in fact been given to the DNR’s attorneys, which thereby invoked the “general rule” that what the attorney knows is imputed to the client (see ¶ 36). The court confessed it was “a bit perplexed as to why the DNR attorney did not show the affidavit to the decision makers when she presumably consulted with them after the conservancies filed their motion for reconsideration.... One of the benefits of having people with different expertise in an agency is that they can communicate and pool information and thus be more efficient and responsive to the general public for whom they ultimately work” (¶ 38).

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    Insurance

    Concurrent Cause – Exclusions

    Siebert v. Wisconsin Am. Mut. Ins. Co., 2010 WI App 94 (filed 4 May 2010) (ordered published 28 July 2010)

    A young woman (the daughter) loaned her father’s car to a friend to “run an errand.” The friend instead picked up Siebert. When the two were on their way to a party, the car was involved in a collision and Siebert was injured. In an earlier lawsuit, a jury found that the friend had exceeded the scope of his permission to drive the car; thus he was not an “insured person” under the auto policy that covered the vehicle. The plaintiff then amended her complaint to assert that the daughter had negligently entrusted the car to the friend. The circuit court granted summary judgment to the auto insurer based on the “independent concurrent cause rule” (see ¶ 4).

    The court of appeals reversed in an opinion written by Judge Peterson. The circuit court erred by conflating lack of coverage with excluded risk. “An excluded risk is a risk for which the insurance company did not receive a premium” (¶ 8). The independent-concurrent-cause rule “is concerned not with who is covered for their actions, but with whether the risk is one the policy insures” (¶ 10). The rule did not apply here because the daughter’s act of lending the car to the friend was a covered risk. Finally, the court held that claim preclusion did not bar this lawsuit; the earlier jury’s conclusion that the friend was outside the scope of the daughter’s permission does not preclude the plaintiff from showing that the daughter had negligently entrusted him with the car (see ¶ 13).

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    Mental Health Law

    Mental Health Treatment Records – Confidentiality – Standing

    Milwaukee Deputy Sheriff’s Ass’n v. City of Wauwatosa, 2010 WI App 95 (filed 15 June 2010) (ordered published 28 July 2010)

    A Milwaukee County sheriff’s deputy attended a private therapy session seeking treatment for work-related stress and anxiety. During the conversation with the therapist the deputy stated that he had had thoughts about killing himself and two of his supervisors at the sheriff’s department. The therapist then called the Wauwatosa Police Department, and officers took the deputy into custody and initiated Wis. Stat. chapter 51 emergency-detention procedures. The Wauwatosa police chief called the sheriff’s department to relay this information; Wauwatosa police officers then furnished the sheriff’s department with documents relating to the case, including the statement of emergency detention prepared for the chapter 51 detention and the police department’s incident report (both of which included essentially the same information). The deputy never gave consent for the release of these documents to the sheriff’s department.

    The Deputy Sheriff’s Association and the deputy filed a declaratory judgment action against the city of Wauwatosa. The complaint alleged that the city violated section 51.30 when it “improperly released confidential records of [the deputy’s] [chapter] 51 proceedings to the Milwaukee County Sheriff’s Department.” The city filed a motion for summary judgment, asserting that the documents the Wauwatosa police furnished to the sheriff’s department were not protected under chapter 51 and that the sheriff’s association lacked standing to sue. The circuit court granted the city’s motion and dismissed the complaint. In a decision authored by Judge Brennan, the court of appeals affirmed in part and reversed in part.

    The appellate court concluded that the circuit court erred when it determined that the city did not violate section 51.30(4) when its police department faxed the deputy’s statement of emergency detention to his employer (see ¶ 2). Section 51.30(4) provides for the confidentiality of mental health treatment records. In Watton v. Hegerty, 2008 WI 74, 311 Wis. 2d 52, 751 N.W.2d 369, the supreme court held that the originals and copies of statements of emergency detention are treatment records under section 51.30(4), even when in the possession of the police department, and are thereby privileged from disclosure without a patient’s written consent (see ¶ 20). As for disclosure of the police incident report, the court of appeals found that “[a]pplying the reasoning in Watton, it would be absurd to construe the plain language of Wis. Stat. § 51.30(4) to permit release of the police incident report when it contains the same information as the expressly confidential statement of emergency detention, and further, release of the incident report would circumvent the carefully drafted legislative confidentiality provisions set forth in § 51.30(4)” (¶ 25).

    The court indicated that it was not insensitive to safety concerns for individuals targeted by what appear to be credible threats. “However, here, the police department had the ability to convey a warning to the sheriff’s department employees without violating the treatment-records privilege. For instance, either the therapist or the police department could have simply made a phone call to advise the sheriff’s department that a threat had been made” (¶ 26). The court also noted that section 51.30(4)(b)4. permits a person to seek a court order allowing disclosure (see id. n.7).

    Lastly, the court concluded that the Deputy Sheriff’s Association lacked standing to participate in this suit. The zone of interest protected by section 51.30 is personal to the patient whose records are released. “The Sheriff’s Association did not receive treatment and does not have standing to sue under the statute” (¶ 33).

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    Public Benefits

    Rent Assistance – Notice of and Reasons for Denial – Specificity

    Bratcher v. Housing Auth., 2010 WI App 97 (filed 8 June 2010) (ordered published 28 July 2010)

    Bratcher applied for admission to the federally funded Rent Assistance Program administered by the Housing Authority of the City of Milwaukee. The housing authority advised Bratcher in a form letter that it was denying her application “based on the findings of your background check” and listing the following two reasons: “1. You were arrested for Battery on 9/14/04 by the Milwaukee Police Department. 2. You were found guilty of Disorderly Conduct on 10/7/03 in Milwaukee Municipal Court, Case No. 03132433” (¶ 22). The plaintiff requested what federal regulations call an “informal review” of this decision and, following a hearing at which evidence was received, the hearing officer issued a written decision that briefly summarized the testimony concerning the disorderly conduct citation and then concluded: “This is the type of behavior that the Rent Assistance Program tries to screen out” (id.).

    The plaintiff sought certiorari review in the circuit court. The circuit court granted the writ, concluding that the housing authority had failed to follow the applicable federal regulations because it did not provide Bratcher with adequate notice before the informal-review hearing and because the explanation for upholding the denial of rent assistance offered in the hearing officer’s written decision was deficient. The circuit court remanded the matter to the housing authority for another hearing.

    In a majority decision authored by Judge Kessler, the court of appeals affirmed. It concluded that the housing authority failed to act according to law because both the written notice and the written decision failed to give Bratcher an adequate explanation of the reasons her rent assistance was being denied (see ¶ 11). “The written notice failed to provide any details about the arrest and forfeiture, and did not even attempt to explain the legal significance of those events to an application for rent assistance. The written decision included more facts, but, like the written notice, it failed to explain how those facts constitute a basis for denial of rent assistance”
    (¶ 23).

    Judge Fine filed a dissenting opinion.

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    Municipal Law

    Land Development – Impact Fees – Appeals – Exhaustion of Administrative Remedies

    St. Croix Valley Home Builders Ass’n Inc. v. Township of Oak Grove, 2010 WI App 96 (filed 22 June 2010) (ordered published 28 July 2010)

    The town of Oak Grove enacted an ordinance, pursuant to Wis. Stat. section 66.0617 (the enabling statute), imposing an impact fee on “any person seeking to construct or create a land development within the Town.” The purpose of the fee was to apportion, on land developers, a share of the costs the town would incur to expand or create public facilities as a result of development. As required by the enabling statute, the ordinance contained an appeal process. That process permitted anyone who paid the fee to contest the amount and method of collecting the fee or the purpose for which the town expended the fee funds. The ordinance specified that any appeal had to be initiated within 30 days of the fee’s due date.

    Plaintiff St. Croix Valley Home Builders Association is a trade association comprised of real estate developers, some of whom paid impact fees under the town’s ordinance. None of the members appealed fees under the ordinance’s appeal process. However, the association served the town with a notice of claim. The notice stated the association intended to seek a declaratory judgment invalidating the ordinance because it was void and unconstitutional. The town denied the association’s claim. The association then sued the town, seeking a declaration that the impact-fee ordinance was invalid and an order requiring the town to refund fees collected under the ordinance. The town moved to dismiss the association’s claims, arguing it was precluded from seeking judicial relief because it failed to use the appeal process provided by the ordinance. The circuit court agreed the association was required to exhaust administrative remedies before bringing its claims in court and dismissed the suit.

    In a decision authored by Judge Peterson, the court of appeals affirmed. Said the court, “[t]he general rule is ‘that judicial relief will be denied until the parties have exhausted their administrative remedies; the parties must complete the administrative proceedings before they come to court.’ While courts need not apply this doctrine when a good reason exists for making an exception, these circumstances are generally limited to those instances in which the administrative review process cannot adequately provide the relief requested. Here, the Association alleged the Town enacted an impact fee ordinance that disproportionately imposed the Town’s costs on development. The ordinance itself contained a mechanism for appealing these issues, but the Association did not use it. The circuit court, therefore, did not erroneously exercise its discretion when it concluded the Association should have used the ordinance’s appeal process before bringing its claims to court” (¶ 24). Among other things, the court noted that “the Association’s claims rely on a great deal of evidence, the development of which is crucial to the resolution of its claims. An administrative appeal would have provided the opportunity for those most intimately involved in the matter to develop this evidence and clarify the issues for any judicial appeal” (¶ 19).

    Lastly, the court rejected the association’s argument that it satisfied any obligation to exhaust administrative remedies by filing a notice of claim with the town. “The notice of claim statute requires a plaintiff to notify a governmental unit of the circumstances of its claim and relief sought, which the governmental unit may then either deny or allow. The ordinance’s administrative appeal process, however, provides a specific framework for resolving disagreements about fees imposed under the ordinance” (¶ 23). In short, the notice of claim requirement and the administrative appeal process do not serve the same function (see id.).

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    Torts

    Malicious Prosecution – Statute of Limitation

    Turner v. Sanoski, 2010 WI App 92 (filed 22 June 2010) (ordered published 28 July 2010)

    This is a civil action alleging malicious prosecution. In 2002, Sanoski told police that Turner had struck Sanoski in the mouth. A jury acquitted Turner of criminal charges for substantial battery in 2002. In 2008, Turner sued Sanoski and another person for malicious prosecution. The circuit court dismissed the complaint, ruling that malicious prosecution claims are subject to a two-year statute of limitation.

    The court of appeals affirmed in an opinion authored by Judge Peterson. Malicious prosecution is an intentional tort to the person and is subject to the two-year limitation period set forth in Wis. Stat. section 893.57. “Turner does not dispute malicious prosecution is an intentional tort. Instead, he argues that it is not ‘to the person.’ We reject this argument. A tort to the person – or personal tort – is ‘[a] tort involving or consisting in an injury to one’s person, reputation, or feelings, as distinguished from an injury or damage to real or personal property.’ Malicious prosecution concerns a person’s ‘right to be free of unjustifiable litigation.’ The injury in a malicious prosecution claim, then, is to the person” (¶ 12) (citations omitted).

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