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    Court of Appeals Digest

    This column summarizes selected published opinions of the Wisconsin Court of Appeals. Full-text decisions are available online at http://www.wisbar.org/wislawmag. Profs. Daniel D. Blinka and Thomas J. Hammer invite comments and questions about the digests. They can be reached at Marquette University Law School, 1215 W. Michigan Ave., Milwaukee, WI 53233, (414) 288-7090.

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

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    Wisconsin LawyerWisconsin Lawyer
    Vol. 84, No. 11, November 2011

    Civil Procedure

    Authenticated Complaint – Technical Defect – Missing Signature

    Mahoney v. Menard Inc., 2011 WI App 128 (filed 17 Aug. 2011) (ordered published 28 Sept. 2011)

    The Mahoneys filed suit against Menard Inc., which was served with a complaint that was duly authenticated by the clerk but lacked the required signature. The complaint filed with the circuit court, however, did have the required signature. Menard moved to dismiss because of the defect, but the circuit court denied the motion.

    The court of appeals affirmed in an opinion authored by Chief Judge Brown. “It is undisputed that (1) the copy of the summons and complaint served on [Menard] was authenticated, (2) the original summons and complaint on file with the court was signed, and (3) the copy of the summons and complaint served on [Menard] was not signed” (¶ 3). “This case then hinges on whether the service of an unsigned but authenticated copy of a summons and complaint is a technical or fundamental defect when the original on file with the court is signed” (¶ 4).

    “Obviously, the copy of the summons and complaint received by [Menard] was not identical to the one filed in that it was missing signatures, so the clerk erred by authenticating the unsigned copy, and the attorney erred by failing to sign it. However, [Menard] has not alleged that its copy differed in any substantive way from the original. So, it is obvious to us that the copy of the summons and complaint [Menard] received gave it notice that the allegations contained within it were on file with the court. As we already explained, the purpose of the signature requirement was fulfilled in the signed complaint on file with the court. We cannot see how the purpose of the authentication requirement in Wis. Stat. § 801.02 was unfulfilled based on the missing signature alone. So, yes, there was a defect. But it was a technical defect, not a fundamental one. Mahoney asserts that the defect was not prejudicial, and [Menard] does not dispute that assertion, so we need go no further” (¶ 12).

    Criminal Procedure

    Confessions – “Sew Ups” – Right to Silence

    State v. Bean, 2011 WI App 129 (filed 30 Aug. 2011) (ordered published 28 Sept. 2011)

    Bean was arrested in connection with a carjacking. Approximately 60 hours after his arrest, and following three earlier rounds of interrogation, he confessed to his involvement in the crime. The circuit court denied his motion to suppress the confession on a variety of grounds, and he was convicted of robbery.

    The court of appeals affirmed in an opinion written by Judge Brennan. First, Bean’s confession was not an unlawful “sew up” confession. The question here was whether any delay was “inordinate” and Bean’s detention “illegal” (¶ 19). The record showed that police officers were “continually moving forward” in their investigation of Bean’s involvement in the crime (see ¶ 20).

    “During the sixty hours between the time of Bean’s arrest and his confession, the police were constantly moving forward with their investigation, interviewing suspects and attempting to resolve discrepancies in the suspects’ stories. Given the circumstances, and the suspects’ conflicting stories, sixty hours was not an impermissibly long time” (¶ 23). Also, before he confessed, Bean had received a probable cause hearing that complied with County of Riverside v. McLaughlin, 500 U.S. 44 (1991).

    Second, police officers “scrupulously honored” Bean’s assertion of the right to silence. “During the sixty hours that elapsed between his arrest and confession, Bean was interrogated three times for a mere two hours total. On each occasion he was aware of the Miranda warnings. On those occasions he wished to speak to police, Bean properly waived those warnings. On the third occasion, when he invoked his right to remain silent, Detective Borman immediately concluded the interrogation, asking no more questions. Police then waited nineteen and one-half hours, permitting Bean a full night’s sleep, before attempting to speak with him again, at which time a different detective resumed questioning. Moreover, the tone of the fourth interrogation was ‘polite’ and Detective Spano ‘was anything but threatening.’ In short, Bean’s right to remain silent was scrupulously honored; there is simply no evidence in the record that the police made any attempt to induce Bean not to invoke his right to silence or attempted to coerce him to talk”
    (¶ 32).

    Finally, the court rejected Bean’s contention that his confession was involuntary and coerced. “The circuit court concluded, and we agree, that there is nothing about Bean that makes him particularly susceptible to police pressure. He is an adult, has been arrested before, and is familiar with the criminal justice system. At the time of his confession, he had been in custody for sixty hours, but during that time he had eaten and had been provided an opportunity for a full night’s sleep before the interrogation during which he confessed. Police had only questioned Bean for a total of two hours before his confession, and that two hours had been divided up among three different interrogations. Before each interrogation Bean was aware of his Miranda rights, and when he invoked his right to remain silent at the beginning of the third interrogation, that invocation was scrupulously honored. The circuit court described the tone of the fourth interrogation as ‘low-key’ and found that ‘Detective Spano was anything but threatening’” (¶ 36).

    Searches – Third-Party Evidence – Substitute Juror

    State v. Avery, 2011 WI App 124 (filed 24 Aug. 2011) (ordered published 28 Sept. 2011)

    Avery was convicted of murdering a woman and disposing of her body. He challenged his conviction on multiple grounds. The court of appeals affirmed in an opinion authored by Judge Neubauer.

    The first issue before the appellate court concerned the lawfulness of a search that uncovered important incriminating evidence. The murder investigation compelled authorities to search many areas of a sprawling junkyard, including the trailer where Avery lived. The key evidence was found during the sixth entry into Avery’s trailer. The court held that this search was a reasonable continuation of earlier searches.

    “[T]he number and type of items identified in the search warrant necessitated an extensive and exhaustive search. … The lateness of the hour, the weather conditions, and the extensive and intensive nature of the search make it apparent that the search of Avery’s trailer could not have been completed on November 5. Further, the continuous presence of law enforcement at the Avery salvage yard and their continuous control over Avery’s trailer from the time of the first search to the time of the sixth search belies any argument that the search of Avery’s trailer was fully executed at an earlier time” (¶ 25). Moreover, the entry was not only reasonable, it was “necessary, particularly given the evolving information and the accumulation of evidence during the ongoing search” (¶ 26). In the alternative, the inevitable-discovery doctrine provided another ground for admissibility of the evidence at trial (see ¶ 28).

    Second, the circuit court properly excluded evidence of third-party liability under the “legitimate tendency” test set forth in the case law. Under this “bright-line” test, the defense must show that the third party 1) had a motive, 2) had an opportunity to commit the crime, and 3) was somehow “directly connected” to the crime (¶ 38). Avery failed to show that any of the other persons near the junkyard had a motive to kill the victim; thus, this evidence was inadmissible (see ¶ 45). This section of the opinion features an extended discussion of the prevailing case law and its application to the trial record here.

    Third, the circuit court properly substituted an alternate juror for a deliberating juror, who asked to be released for personal (family) reasons while the jury deliberated. Under case law, “the discharge of a juror during deliberations left the parties with three options: (1) stipulate to proceed with fewer than twelve jurors, (2) stipulate to the substitution of an alternate juror, or (3) have the court declare a mistrial” (¶ 52). Both parties agreed to the substitution; specifically, Avery agreed during an on-the-record colloquy.

    Avery contended that the circuit court failed to follow the procedures dictated by case law. Although the trial judge had ex parte communication with the excused juror, any error was harmless because it could not have affected the other jurors (see ¶ 58). The court of appeals also found that the trial judge made a reasonable inquiry into the excused juror’s state of mind. The juror’s excusal did not violate Wis. Stat. section 972.10(7), which “does not address the dispositive issue in this case, whether a court may substitute an alternate juror for a deliberating juror with the consent of the parties under the procedure set forth in [State v. Lehman, 108 Wis. 2d 291, 321 N.W.2d 212 (1982)]. As the trial court noted, there is a distinction between discharging a juror under § 972.10(7) and calling a juror back as a substitute at some point in the future with the parties’ consent” (¶ 63).

    The critical factor here, the court of appeals held, was Avery’s consent to the substitution (see ¶ 65).
    “Despite the substitution of an alternate juror during deliberations, Avery was afforded a jury of twelve culled from a jury pool narrowed by voir dire in which he participated. Due to error, the alternate juror had not yet been discharged and therefore had no opportunity to be improperly influenced prior to entering deliberations. The jury was instructed, and each juror agreed, to commence deliberations anew. The newly empaneled jury deliberated for three days before returning a verdict. And Avery consented to this process in an on-the-record colloquy” (¶ 66).

    Finally, Avery received effective assistance of counsel. Of particular interest here is the discussion of whether Avery was properly advised about the mistrial option with respect to the excused juror (see ¶ 72).

    Jury Trials – Jury Instruction That Erroneously Adds an “Element” – Harmless-Error Rule Applied

    State v. Beamon, 2011 WI App 131 (filed 31 Aug. 2011) (ordered published 28 Sept. 2011)

    Beamon was tried on a charge of fleeing an officer contrary to Wis. Stat. section 346.04(3). The trial judge erroneously instructed the jury by requiring it to make an additional finding of fact not essential to the offense. The jury found Beamon guilty.

    Beamon contended that there was insufficient evidence to prove beyond a reasonable doubt that he was guilty of fleeing an officer, as defined by the judge in the instructions provided to the jury. The issue on appeal was whether the legally inaccurate jury instruction became the law of the case for purposes of evaluating the sufficiency of the evidence. In an opinion authored by Judge Neubauer, the court of appeals concluded that it did not.

    Said the court, “[w]e conclude that the evidence is measured against the actual elements of the charged offense, and not the incorrect jury instruction which required an unnecessary factual finding. Because there was overwhelming evidence to support the jury’s verdict of guilt as to eluding or fleeing an officer, it is clear beyond a reasonable doubt that a rational jury would have found Beamon guilty absent the erroneous jury instruction. The error, therefore, could not have contributed to the verdict. Because the error was harmless, we affirm the judgment of conviction” (¶ 12).

    Sentencing – Consecutive Sentences to House of Correction and State Prison – “Good-Time” Credit

    State v. Harris, 2011 WI App 130 (filed 23 Aug. 2011) (ordered published 28 Sept. 2011)

    Harris was sentenced to 10 months’ confinement in the Milwaukee County House of Correction on a battery charge; he was also sentenced to a consecutive term of seven years in state prison on a charge of intimidating a victim. On appeal, he argued that he is entitled to “good-time” credit against his house of correction sentence under Wis. Stat. section 302.43, which awards county jail inmates credit for one-fourth of their sentences for good behavior. In a decision authored by Judge Curley, the court of appeals disagreed.

    Wisconsin Statutes section 302.113(4) requires all consecutive sentences imposed for crimes committed after Dec. 31, 1999, to be computed as one continuous sentence. Wisconsin Statutes section 973.03(2) provides that a defendant sentenced to the Wisconsin state prisons and to a county jail or house of correction for separate crimes shall serve all sentences, whether concurrent or consecutive in the state prisons. “In light of § 973.03(2), Harris was not, nor would he ever become, an inmate of a county jail or house of correction. He did, on the other hand, become an inmate of the state prison system. Therefore, Harris could not be awarded any good time credit under county jail rules” (¶ 9). The court further concluded that Harris could not earn “positive adjustment” credit against his prison sentence because the crimes of which he was convicted are violent crimes (see
    ¶ 8). See Wis. Stat. § 302.113(1), (2)(b)7. (2009-10).

    Search and Seizure – GPS Tracking Device Attached to Vehicle

    State v. Brereton, 2011 WI App 127 (filed 10 Aug. 2011) (ordered published 28 Sept. 2011)

    This case involved the attachment of a global positioning system (GPS) tracking device to Brereton’s vehicle pursuant to a warrant. Brereton appealed the denial of his motion to suppress evidence obtained through use of the device. Among other things, he argued that the device was more technologically advanced (and thus more intrusive) than that allowed by the warrant. The warrant was issued based on an affidavit that requested a GPS device that “periodically records at specific times, the latitude, longitude, date and time of readings and stores these readings until they are downloaded to a computer” (¶ 13). The GPS device that was attached to the car, however, allowed continuous live tracking of the car’s movements; the police then received text message updates when the vehicle began to move and when it stopped.

    In a decision authored by Chief Judge Brown, the court of appeals affirmed. It agreed with the defendant that the GPS device used in this case was more technologically advanced and thus more intrusive than the one described in the affidavit in support of the warrant. “However, we also note that it is generally left to the discretion of the executing officers to determine the details of how best to proceed with the performance of a search authorized by the warrant – subject of course to the general Fourth Amendment protection against unreasonable searches and seizures” (¶ 14) (citation and internal quotes omitted).

    The court held that “the police were operating reasonably and within their discretion when they attached a GPS device to Brereton’s car. They took the time to obtain a warrant. The warrant authorized them to put a GPS device on the car to monitor the car’s whereabouts…. [T]he GPS device in this case was only in use for four days (until the police obtained information they could use). And the fact that there was a warrant and that the device was in play for only four days is what distinguishes the facts of this case from United States v. Maynard, 615 F.3d 544 (D.C. Cir. 2010), cert granted, United States v. Jones, No. 10-1259, 2011 WL 1456728 (June 27, 2011), a case heavily relied on by Brereton. In that case, the court emphasized the level of intrusion involved when the police, without a warrant, attached a GPS device to the defendant’s car and monitored his whereabouts ‘24 hours a day for four weeks.’ Id. at 562-64. Under the facts of this case, however, we see no reason to find that the police overstepped their bounds simply because they were able to monitor the movements in real time rather than needing to continually return to the car, remove the device, and download its information to a computer. Though we can envision scenarios where prolonged use of this device might be unreasonable under the Fourth Amendment, we do not believe this case crosses the line” (¶ 15).

    Family Law

    Grandparent Visitation – Wis. Stat. section 767.43(3) – No Requirement of Significant Triggering Event

    Wohlers v. Broughton, 2011 WI App 122 (filed 4 Aug. 2011) (ordered published 28 Sept. 2011)

    This grandparent visitation case involves a minor child, E.B.; the child’s father; and the child’s maternal grandparents. Among the issues on appeal was whether the circuit court erred in declining to require the grandparents to prove the existence of a “significant triggering event” under Holtzman v. Knott, 193 Wis. 2d 649, 533 N.W.2d 419 (1995), justifying state intervention in the father’s relationship with E.B. (see ¶ 1).

    In Holtzman, the supreme court concluded that a circuit court could exercise its equitable powers to hear a matter and grant visitation to a nonparent in circumstances to which the chapter 767 nonparent-visitation statute in effect at that time, Wis. Stat. § 767.245 (1991-92), did not apply. The Holtzman court formulated a test for courts to use before exercising their equitable powers.

    “First, a circuit court must determine that the petitioner has a ‘parent-like relationship’ with the child, and second, the circuit court must determine that a ‘significant triggering event’ exists justifying state intervention in the child’s relationship with a biological or adoptive parent. If the petitioner establishes these two elements, then the court may consider whether visitation is in the child’s best interest. To establish the requisite triggering event, the petitioner ‘must prove [that the biological or adoptive parent] has interfered substantially with the petitioner’s parent-like relationship with the child, and that the petitioner sought court ordered visitation within a reasonable time after the parent’s interference’” (¶ 18) (citations omitted).

    In a decision authored by Judge Higginbotham, the court of appeals concluded that Holtzman does not apply to cases brought under the special grandparent-visitation statute, which is codified at Wis. Stat. section 767.43(3) and which the parties agreed was applicable to this case. “The special grandparent visitation statute, and not the general grandparents and other ‘certain persons’ provision contained in § 767.43(1), applies when: (a) ‘[t]he child is a nonmarital child whose parents have not subsequently married each other,’ (b) ‘the paternity of the child has been determined if the grandparent filing the petition is a parent of the child’s father,’ and (c) ‘[t]he child has not been adopted’” (¶ 13).

    Under Wis. Stat. section 767.43(3), a “court may grant reasonable visitation rights” to a grandparent if the parents have notice of the hearing and the court determines that 1) the grandparent has maintained a relationship with the child or has attempted to maintain a relationship with the child but has been prevented from doing so by a parent who has legal custody of the child; 2) the grandparent is not likely to act in a manner contrary to decisions that are made by a parent who has legal custody of the child and that are related to the child’s physical, emotional, educational, or spiritual welfare; and 3) the visitation is in the child’s best interest (see ¶ 14).

    The appellate court saw “no logical reason to engraft onto this plain and complete procedure for grandparent visitation in particular circumstances an additional requirement [proof of a significant triggering event] that was established [in Holtzman] for the purpose of exercising the court’s equitable powers when no visitation statute applied. Neither the reasoning in Holtzman nor the plain language of § 767.43(3) supports such a conclusion” (¶ 19) (citations omitted).

    Municipal Law

    Tavern Licenses – Proceedings Before Common Council and Its Licenses Committee – Use of Police Department Synopsis of Police Contacts at Licensed Premises

    Questions Inc. v. City of Milwaukee, 2011 WI App 126 (filed 19 July 2011) (ordered published 28 Sept. 2011)

    Questions Inc., a night club in the city of Milwaukee, appealed a circuit court order affirming the Milwaukee Common Council’s decision to renew its tavern license but to impose a 25-day suspension of that license. In a decision authored by Judge Brennan, the court of appeals affirmed.

    On appeal, Questions argued inter alia that there was no substantial evidence to support the suspension because the Common Council’s Licenses Committee relied on a Milwaukee Police Department synopsis of police contacts at the night club. Questions contended that this synopsis consisted of uncorroborated hearsay that was controverted by in-person testimony.

    The appellate court began its analysis by assuming, without deciding, that the police report synopsis is hearsay. It then noted that the Wisconsin Statutes only prohibit the admission of hearsay evidence in “proceedings in the courts of the state of Wisconsin.” See Wis. Stat. §§ 901.01, 908.02, 911.01. The Milwaukee Common Council and its Licenses Committee are not courts and, therefore, are not bound by the statutory rules of evidence. As such, the synopsis was properly admitted (see ¶ 21).

    In support of its assertion that the police report synopsis was not sufficient substantial evidence to support the Common Council’s decision, Questions relied on Gehin v. Wisconsin Group Insurance Board, 2005 WI 16, 278 Wis. 2d 111, 692 N.W.2d 572. The appellate court concluded that “Questions’ reliance on Gehin is misplaced. Gehin stands for the proposition that an administrative agency cannot rely on uncorroborated written hearsay alone when that hearsay is otherwise controverted by in-person testimony. Here, the Licenses Committee properly relied on the synopsis because it was corroborated by circumstantial evidence in the record, the Licenses Committee relied on other evidence [including in-person testimony] in addition to the synopsis, and the forty-two incidents summarized in the synopsis that were ultimately adopted by the Committee were not each controverted by other evidence in the record” (¶ 23) (internal citation omitted).

    Real Property

    Riparian Rights – Property Lines

    Manlick v. Loppnow, 2011 WI App 132 (2 Aug. 2011) (ordered published 28 Sept. 2011)

    This action between “two battling lakefront neighbors” (¶ 1) concerned the proper method for determining the boundary lines between their properties. The dispute centered over the placement of piers and shore stations on the parties’ respective narrow slices (30 feet) of irregularly shaped lakefront property. During the jury trial, the judge imposed the “coterminous method” of drawing the boundary, ruling that it was a question of law or equity but not one for the jury. The jury awarded no damages to either party.

    The court of appeals affirmed in an opinion authored by Judge Brennan. Wisconsin case law recognizes three methods for drawing riparian boundaries (see ¶ 14), but it does not mandate the use of any one method (see ¶ 16). The judge, not the jury, properly decided which method to use (see ¶ 17). Moreover, the coterminous method selected by the judge was the “most equitable” way of drawing the line.

    Under the coterminous method, “the trial court considered ‘the historical use of the various lots, the layout of the land, the layout of the riparian areas that historically have been in place,’ the experts’ testimony, and a DNR handout on pier placement. After reviewing that evidence, the trial court concluded that considering ‘the curves that are involved, [that is,] the shape of the shore line, the best approach to maintain fairness among all property owners, including the two that are involved in this case, is the coterminous method.’ The trial court’s decision was thoughtful and well reasoned and is not clearly erroneous” (¶ 24). Several other fact-intensive issues also were addressed but are not summarized here.

    Foreclosures – Liens – Priorities

    U.S. Bank N.A. v. Landa, 2011 WI App 135 (filed 17 Aug. 2011) (ordered published 28 Sept. 2011)

    In 2005, Landa bought a condominium financed by two loans from Mortgage Lenders Network USA Inc., for $168,000 and $42,000. Although the loan for $168,000 was denominated the “first mortgage,” it was recorded several weeks after the $42,000 mortgage was recorded. In 2008, the Meadowland Villa Condominium Owners Association filed several liens against Landa for unpaid fees and assessments. And in 2009, U.S. Bank, which now owned the $168,000 mortgage, began a foreclosure action against Landa, who had defaulted. Meadowland alleged that its condominium lien had priority over the $168,000 mortgage based on Wis. Stat. section 703.165(5)(b), which makes condominium liens prior to all other liens except sums unpaid on a “first mortgage” (¶ 3). According to Meadowland, because the $168,000 mortgage had been recorded after the $42,000 mortgage, the $168,000 mortgage was not a “first mortgage.” The circuit court agreed.

    The court of appeals reversed in an opinion written by Judge Reilly. “Meadowland asks us to read Wis. Stat. § 703.165(5)(b) to mean that the first mortgage recorded is the only mortgage lien superior to a condominium lien, even if the terms of the first recorded mortgage clearly state that it is subordinate to another mortgage. Meadowland’s theory fails as both the $168,000 mortgage and the $42,000 mortgage were recorded prior to Meadowland’s condominium liens. Section 703.165(5)(b) states that ‘a first mortgage’ recorded prior to a condominium assessment is the only mortgage lien superior to a condominium lien. (Emphasis added.) The statute does not say ‘the first mortgage’ recorded prior to a condominium assessment is the only mortgage lien that is superior to a condominium lien. We may not ignore the plain meaning of a statute.... The mortgages on their face reflect that the $168,000 U.S. Bank mortgage is superior to the $42,000 mortgage. The fact that the $42,000 mortgage was recorded prior to the $168,000 mortgage – with both mortgages being recorded before Meadowland’s condominium liens were filed – does not alter the $168,000 mortgage’s contractual status as the first mortgage” (¶ 8).

    Sexually Violent Persons

    Mental Disorders – Jury Instructions

    State v. Sanders, 2011 WI App 125 (filed 23 Aug. 2011) (ordered published 28 Sept. 2011)

    Sanders was committed as a sexually violent person pursuant to Wis. Stat. chapter 980. On appeal, he contended that because of defective jury instructions, the “real controversy” has not been tried.

    The court of appeals affirmed Sanders’s commitment in an opinion written by Judge Fine. “The focus of Sanders’s appeal is on the degree and nature of a mental illness that requires commitment as a sexually violent person under Wis. Stat. ch. 980” (¶ 10). The jury instruction on “mental disorder” included two “contradictory” sentences. The first sentence, which tracked Wis. Stat. section 980.01(2), defined mental disorder as “a condition affecting the emotional or volitional capacity that predisposes a person to engage in acts of sexual violence” (¶ 14).

    “The second sentence, although contradictory, gives a needed escape hatch because it recognizes that not all mentally ill persons are fixated on sexually violent behavior and have serious difficulty in not acting on that fixation. Thus, the second sentence helped Sanders. It made clear that although the statute defined ‘mental illness’ as something that ‘predisposes a person to engage in acts of sexual violence,’ Sanders’s mental illness alone was not sufficient for the jury to find that he was a sexually violent person. Sanders thus has not shown how the inconsistency prevented the ‘real controversy’ (whether as a result of his paraphilia and antisocial personality disorder, he was a sexually violent person) from being ‘fully tried.’ Simply put, the instruction did not prevent him from arguing that his present mental illness did not make him more likely than not to commit further crimes of sexual violence if he were not committed, especially because the circuit court told the jury that Sanders’s mental illness had to cause him ‘serious difficulty’ in controlling his behavior. Indeed, his two expert witnesses so testified” (id.).

    Judge Curley dissented on grounds that the two contradictory sentences “misdirected” the jury (¶ 20). “[T]he distinction between ‘mental disorder’ as a legal term of art and ‘mental disorder’ as a general mental illness is far from purely semantic. Using the given instruction, the jury could have easily confused the legal term of art with the contradictory, general definition of ‘mental disorder’” (¶ 25).

    Torts

    Economic-Loss Doctrine – Corporate Veil

    Ferris v. Location 3 Corp., 2011 WI App 134 (filed 10 Aug. 2011) (ordered published 28 Sept. 2011)

    The plaintiffs bought a parcel of property only to discover later that it was adjacent to a Superfund site. They sued the sellers, naming both the corporation and individuals, for failing to disclose this fact on the real estate condition report. The circuit court rejected the defendants’ contention that the misrepresentation claim was barred by the economic-loss doctrine but dismissed the individual defendants because they had acted within their corporate responsibilities.

    The court of appeals reversed in an opinion authored by Chief Judge Brown that addressed multiple issues. First, the complaint adequately stated a claim for misrepresentation under Wis. Stat. sections 895.446 and 943.20(1)(d). It was unnecessary for the plaintiffs to plead a separate claim for civil conspiracy as to the individual defendants who did not sign the real estate condition report, because the complaint alleged they acted “in concert” (¶ 9).

    Second, the economic-loss doctrine, as construed by recent case law, did not preclude the false misrepresentation claims (see ¶ 13). Third, case law established that the individual defendants could be held personally responsible for their “tortious conduct, regardless of whether they acted on behalf of [the corporation] when they did so” (¶ 16). “When the supreme court intentionally takes up and announces the law three times, we think it clear that the initial statement was not dicta. But even if we had come to the opposite conclusion, the supreme court has made it clear that we may not dismiss statements from its opinions as dicta”
    (¶ 15).




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