Vol. 84, No. 7, July 2011
Conflicts – Standing – Disqualification
Foley-Ciccantelli v. Bishops Grove Condo. Ass’n, 2011 WI 36 (filed 24 May 2011)
The plaintiff was injured after she slipped on ice at a condominium complex. She retained counsel and sued Bishop’s Grove, the condominium association. The Bishop’s Grove property was run by a property manager, the Foster Group; neither the Foster Group nor its principal, Wayne Foster, were named as defendants but both had been clients of the Cramer law firm (Cramer), which represented the plaintiffs in this case. Bishop’s Grove moved to disqualify Cramer based on its representation of the Foster Group. The circuit court disqualified Cramer based largely on an “appearance of impropriety.” The court of appeals certified the disqualification issue to the supreme court.
The supreme court reversed in a lead opinion written by Chief Justice Abrahamson. The first issue involved the standing of a nonclient (Bishop’s Grove) to move for disqualification of plaintiffs’ counsel because that law firm had represented a nonparty (the Foster Group), the employees of which would be witnesses whose conduct was likely central to the case. Section II of the lead opinion exhaustively canvasses the case law governing standing and reaches three conclusions.
First, standing should be liberally construed in Wisconsin (see ¶ 38). Second, the cases encompass a variety of sometimes inconsistent approaches; there is no “single longstanding or uniform test for standing” (¶ 39). Third, “the essence of the determination of standing, regardless of the nature of the case and the particular terminology used in the test for standing, is that standing depends on (1) whether the party whose standing is challenged has a personal interest in the controversy (sometimes referred to in the case law as a ‘personal stake’ in the controversy); (2) whether the interest of the party whose standing is challenged will be injured, that is, adversely affected; and (3) whether judicial policy calls for protecting the interest of the party whose standing is challenged” (¶ 40).
In this case there were no statutory or constitutional provisions at issue. Moreover, there is disagreement among jurisdictions over whether a nonclient party has standing to assert duties owed to a nonparty former client (see ¶ 62). The lead opinion opted for a middle course that “avoids the pitfalls of a rule that a non-client party has no standing to move to disqualify opposing counsel and a rule that every non-client party has standing. The middle course recognizes that a rule of professional conduct ‘does not imply that an antagonist in a collateral proceeding or transaction has standing to seek enforcement of the rule;’ that rules of professional conduct ‘can be subverted when they are invoked by opposing parties as procedural weapons;’ and that a non-client party does not generally have standing to enforce a violation of the Rules of Professional Conduct for Attorneys” (¶ 69).
The lead opinion concluded “that as a general rule only a former or current client has standing to move to disqualify an attorney from representing someone else in a civil action. Nevertheless, in cases involving a challenge to a party’s standing to bring a motion for disqualification of opposing counsel on the ground that opposing counsel is breaching duties to a non-party former client, to determine the personal interest, the adverse effect, and the judicial policy aspects of standing in Wisconsin we conclude that a non-client party has standing to move for disqualification of opposing counsel, when the prior representation is so connected with the current litigation that the prior representation is likely to affect the just and lawful determination of the non-client party’s position” (¶ 71). Based on the record before it, which revealed facts about Cramer’s prior representation of the Foster Group, the court held that Bishop’s Grove had standing to move for disqualification of Cramer.
Having resolved the standing issue, the lead opinion turned to whether disqualification was appropriate. The court said that an appearance of impropriety is not an appropriate ground for disqualification. Rather, the correct test is the “former-client” standard found in SCR 20:1.9, which provides that lawyers may not appear against a former client in the same or a “substantially related” matter (¶ 88). The dispute in this case concerned whether Cramer’s representation of the Foster Group on other matters was substantially related to the slip and fall at issue here. The lead opinion comprehensively discusses the authority on point, including the centrality of whether client confidences are placed at risk (see ¶108). The supreme court determined that the circuit court applied the wrong standard, and so the supreme court reversed the circuit court’s ruling and remanded the case so that a record could be made regarding the substantially related standard.
Justice Prosser concurred in the lead opinion, which gives it the support of four justices, with several “caveats” (¶ 136) that reflected some “angst” over the lead opinion’s “restatement of the law” governing standing (¶ 117). “In sum, it should be clear that the third prong listed by the lead opinion is not a ‘catch-all’ provision that would allow courts to act as they see fit. If it is analyzed as a separate element, it is merely a continuation of the prudential considerations this court has upheld in the past” (¶ 135).
Justice Roggensack, joined by Justice Ziegler and Justice Gableman, also concurred but did not join the lead opinion (see ¶ 138). They contended that the lead opinion is amiss because it creates a “new test for standing,” employs SCR chapter 20 (the professional responsibility rules) as a basis for disqualifying counsel, and resolves the standing issue on an inadequate record (see id.).
First-Degree Reckless Injury – “Utter Disregard for Human Life” – Relevance of Defendant’s After-the-Fact Conduct
State v. Burris, 2011 WI 32 (filed 17 May 2011)
The defendant was convicted of first-degree reckless injury contrary to Wis. Stat. section 940.23(1)(a). This statute provides that “[w]hoever recklessly causes great bodily harm to another human being under circumstances which show utter disregard for human life is guilty of a Class D felony.”
This appeal was focused on the “circumstances which show utter disregard for human life” element of the crime and the relevance of the defendant’s after-the-fact conduct with respect to that element. The state argued that, although the conduct may be considered as part of the totality of the circumstances, a defendant’s after-the-fact mitigating conduct does not have the same evidentiary weight as a defendant’s actions before and during the crime (see ¶ 25). The defendant contended that whether a defendant showed utter disregard for human life is a totality-of-the-circumstances analysis in which the fact-finder may consider conduct before, during, and after the incident (see ¶ 27).
In a majority decision authored by Justice Crooks, the supreme court rejected the state’s assertion and emphasized that, in an utter-disregard analysis, there is no rule assigning more or less weight to a particular category of a defendant’s conduct based on when that conduct occurred (see id.). The court held that “when evaluating whether a defendant’s conduct reflects utter disregard for human life, the fact-finder should examine the totality of the circumstances surrounding the crime. In this analysis, the fact-finder should consider all relevant conduct before, during and after a crime, giving each the weight it deems appropriate under the circumstances” (¶ 41). “A defendant’s conduct is relevant if it occurs within a reasonable period of time after the crime. The length of time will depend on the circumstances in each case and is limited by the requirement that evidence is admissible only if it is relevant to some element of the crime, in this case, whether the defendant acted with utter disregard for human life” (¶ 39).
Justice Prosser filed a concurring opinion. Chief Justice Abrahamson dissented. The dissent focused on a supplemental jury instruction given at trial that the Chief Justice concluded was misleading (see ¶ 87).
Sentence Modification – “New Factors”
State v. Harbor, 2011 WI 28 (filed 10 May 2011)
This case concerned sentence modification and the “new factor” basis for modifying sentences. With certain limitations, circuit courts in Wisconsin have inherent authority to modify criminal sentences. Although a court cannot base sentence modification on reflection and second thoughts alone, it may base a modification on the defendant’s showing of a new factor (see ¶ 35). Deciding a motion for sentence modification based on a new factor is a two-step process. The defendant has the burden to demonstrate by clear and convincing evidence the existence of a new factor (see ¶ 36). If the defendant meets that burden, the circuit court must determine whether that new factor justifies modification of the sentence (see ¶ 37).
There have been inconsistencies in Wisconsin case law with respect to the definition of a new factor and the supreme court, in a unanimous decision authored by Justice Bradley, used the occasion of this appeal to clarify the definition. In Rosado v. State, 70 Wis. 2d 280, 288, 234 N.W.2d 69 (1975), the supreme court defined a new factor as follows: “a fact or set of facts highly relevant to the imposition of sentence, but not known to the trial judge at the time of original sentencing, either because it was not then in existence or because, even though it was then in existence, it was unknowingly overlooked by all of the parties.” This definition from Rosado is one of long-standing. “Nevertheless, in State v. Michels, 150 Wis. 2d 94, 441 N.W.2d 278 (Ct. App. 1989), the court of appeals appeared to modify the Rosado new factor test by adding an additional requirement…. [T]he Michels court concluded that ‘the case law since Rosado has limited the “new factor” standard to situations where the new factor frustrates the purpose of the original sentencing’” (¶ 41).
In the present case the supreme court clarified the definition of a new factor for sentence-modification purposes. It concluded that “frustration of the purpose of the original sentence is not an independent requirement when determining whether a fact or set of facts alleged by a defendant constitutes a new factor” (¶ 48). Said the court, “we conclude that the definition set forth in Rosado is the correct definition of a ‘new factor’ for purposes of sentence modification. We withdraw any language from Michels and the cases following Michels that suggests an additional requirement that an alleged new factor must also frustrate the purpose of the original sentence” (¶ 52). However, the court did note that “[a]ny fact that frustrates the purpose of the original sentence would generally be a new fact that is ‘highly relevant to the imposition of sentence’” (¶ 49).
Sentencing – Life Imprisonment Without the Possibility of Release – Juvenile Offenders
State v. Ninham, 2011 WI 33 (filed 20 May 2011)
In Roper v. Simmons, 543 U.S. 551 (2005), the U.S. Supreme Court concluded that the Eighth and Fourteenth Amendments forbid imposition of the death penalty on offenders who were under age 18 when their crimes were committed (see ¶ 34). Five years later, in Graham v. Florida, 130 S. Ct. 2011 (2010), the Court held that the Eighth Amendment prohibits the imposition of a life-without-parole sentence on a juvenile offender who did not commit homicide (see ¶ 40). In this case, the Wisconsin Supreme Court was faced with the constitutionality of imprisoning a juvenile offender for life without parole when he did commit a homicide.
As aptly described by Justice Ziegler in her opinion for a majority of the court, the facts in this case involve a “horrific and senseless crime” (¶ 8). While bicycling home from a grocery store in Green Bay, 13-year-old Zong Vang was accosted by a group of five juveniles (including the defendant (Ninham) and Richard Crapeau). Vang was able to escape from the group (whose members were unknown to him), and he fled into the parking ramp of a nearby hospital. The group chased him, eventually catching up to him on the top (fifth) floor of the ramp. There the physical assault continued. At one point, with the defendant holding Vang by the wrists and Crapeau holding him by the ankles, they began swinging Vang back and forth out over the parking ramp’s concrete wall – a drop that measured nearly 45 feet to the ground. Vang was crying and screaming, begging Ninham and Crapeau not to drop him. While swinging Vang out over the wall, Crapeau let go of Vang’s feet and told Ninham to “[d]rop him.” Ninham let go of Vang’s wrists, and in Crapeau’s words, Vang “just sailed out over the wall” (¶ 14). Vang landed below on the parking ramp’s exit lane and died of injuries sustained in the fall.
The defendant was 14 years and 10 months old at the time of this incident. A jury convicted him in adult court of first-degree intentional homicide and physical abuse of a child. The circuit court sentenced him on the homicide charge to life imprisonment without the possibility of parole. On this appeal, the defendant mounted “a categorical constitutional challenge, arguing that sentencing a 14-year-old to life imprisonment without parole is cruel and unusual in violation of the Eighth Amendment of the United States Constitution and Article I, Section 6 of the Wisconsin Constitution” (¶ 3). Among additional challenges, he argued that his sentence is unduly harsh and excessive.
The supreme court concluded that “sentencing a 14-year-old to life imprisonment without the possibility of parole for committing intentional homicide is not categorically unconstitutional. We arrive at our holding by applying the two-step approach employed by the United States Supreme Court, most recently in Graham v. Florida, 130 S. Ct. 2011 (2010). First, we conclude that [defendant] Ninham has failed to demonstrate that there is a national consensus against sentencing a 14-year-old to life imprisonment without parole when the crime is intentional homicide. Second, we conclude in the exercise of our own independent judgment that the punishment is not categorically unconstitutional” (¶ 4).
The court further held that “[defendant Ninham’s] sentence of life imprisonment without the possibility of parole is not unduly harsh and excessive. Under the circumstances of this case, Ninham’s punishment is severe, but it is not disproportionately so” (¶ 98). As to other issues raised by the defendant, the court concluded that the defendant did not demonstrate by clear and convincing evidence that scientific research on adolescent brain development constitutes a new factor warranting sentence modification. “While the studies [referred to by Ninham] themselves may not have been in existence at the time of Ninham’s sentencing, the conclusions they reached were widely reported” (¶ 99). Finally, the court concluded that the trial judge did not rely on improper factors in rendering judgment in this case.
Chief Justice Abrahamson filed a dissenting opinion that was joined in by Justice Bradley. The dissent concluded that “the United States Supreme Court’s analysis in Roper and Graham supports the holding that a juvenile cannot be sentenced to life without parole for a homicide committed when 14 years old or younger” (¶ 104).
TPR Actions – “Parental Relationship” – Constitutionality
Tammy W-G. v. Jacob T., 2011 WI 30 (filed 17 May 2011)
Tammy filed a termination of parental rights (TPR) petition to terminate Jacob’s parental rights to their daughter. A jury found that Jacob had failed to assume parental responsibility for his daughter, and the judge later terminated his parental rights. The court of appeals certified the appeal to the supreme court.
The supreme court affirmed in an opinion written by Justice Roggensack. The appeal compelled the court to interpret Wis. Stat. section 48.415(6), which provides that one ground for terminating parental rights occurs when a parent has not had a “substantial parental relationship with the child.” The court held that “[t]he language of Wis. Stat. § 48.415(6) … indicates that … a fact-finder must look to the totality-of-the-circumstances to determine if a parent has assumed parental responsibility. With regard to the relevant time period, the fact-finder should consider the circumstances that have occurred over the entirety of the child’s life. The fact-finder may also consider whether a parent exposed her child to a hazardous living environment” (¶ 22). The opinion elaborates on both the relevant-time-period and the hazardous-living-environment elements. Sufficient evidence supported the TPR order in this case.
The supreme court also upheld the constitutionality of the statute as it applied to Jacob (see ¶ 47). The court explained in some depth the “as-applied” analysis, emphasizing that such challenges contain “no presumption in regard to whether the statute was applied in a constitutionally sufficient manner” (¶ 49). Moreover, “the analysis differs from case to case, depending on the constitutional right at issue” (id.). Based on both state and federal precedent, the court held that the statute did not violate Jacob’s substantive-due-process rights. (The court also briefly addressed issues relating to directed-verdict motions and jury instructions.)
Chief Justice Abrahamson and Justice Bradley filed separate dissents, and each joined in the other’s dissent. The Chief Justice concluded that the issue of whether a substantial parental relationship existed is not, as the majority assumed, a question of fact for the jury, but rather presents a question of law for the judge to determine, because it is a “threshold constitutional issue” (¶ 74). Justice Bradley concluded that “[o]nce a parent has assumed a substantial parental relationship with the child, failure to maintain that parental relationship is not grounds for termination under sub. (6). Due process requires that other grounds for termination (see, e.g., abandonment, Wis. Stat. § 48.415(1)), be proven before parental rights can be involuntarily terminated” (¶ 95).
Negligent Entrustment – Independent Concurrent Cause
Siebert v. Wisconsin Am. Mut. Ins. Co., 2011 WI 35 (filed 24 May 2011)
Koehler gave permission to her boyfriend, Raddatz, to drive her father’s car to a store. Raddatz instead used the car to pick up others and head to a party. Along the way, Raddatz lost control of the car, and all the car’s occupants, including Siebert, were injured or killed. Siebert sued the car’s insurer, Wisconsin American, alleging Raddatz’s negligence caused her injuries. At a coverage trial, the jury found that Raddatz exceeded the scope of Koehler’s permission to use the car, which meant that he was not an “insured person” under the policy. Siebert then amended her complaint to allege Koehler negligently entrusted the car to Raddatz, who had no driver’s license. The circuit court granted summary judgment to the insurer on the negligent-entrustment claim based on Bankert v. Threshermen’s Mutual Insurance Co., 110 Wis. 2d 469, 329 N.W.2d 150 (1983). In a published decision (2010 WI App 94), the court of appeals reversed, holding “that the independent concurrent cause rule does not apply in this case because Koehler’s alleged negligent entrustment does not implicate an excluded risk” (¶ 23).
The supreme court reversed the court of appeals in a majority opinion authored by Justice Ziegler. “Specifically, we conclude that Koehler’s alleged negligent entrustment does not constitute an independent concurrent cause of Jessica Siebert’s injuries sufficient to trigger coverage, when no coverage exists for Raddatz’s alleged negligent operation of the vehicle. We arrive at our conclusion by first considering the relevant policy language and then applying the independent concurrent cause rule to the facts of this case” (¶ 30). The policy excluded coverage for “‘any person using a vehicle with the permission of the person having lawful possession, but who exceeds the scope of that permission’” (¶ 36). Raddatz clearly fell outside coverage as an insured person.
The court then turned to whether Koehler, who allowed Raddatz to drive the car, was “legally liable” for Siebert’s injuries. The independent-concurrent-cause rule provides that “if the covered risk is not actionable without the occurrence of an excluded risk, then the covered risk is not sufficiently independent to trigger coverage under the policy” (¶ 40). Applying Bankert, the court held that the policy did not cover Koehler’s actions because “there is no coverage for Koehler’s alleged negligent entrustment of the vehicle to Raddatz because that act is not an independent concurrent cause of Jessica Siebert’s injuries. More specifically, Koehler’s alleged negligent entrustment could not render her liable for Jessica Siebert’s injuries without the occurrence of an excluded risk – Raddatz’s alleged negligent operation of the vehicle” (¶ 55). (The court did not take up whether the doctrine of issue preclusion also barred Siebert’s negligent-entrustment claim.)
Justice Crooks dissented, joined by Chief Justice Abrahamson and Justice Bradley. The dissenting justices saw the case as a “straightforward” application of the insurance policy’s language, which it concluded covered Koehler’s negligent entrustment. They said that the majority mistakenly assumed that “all policy exclusions are created equal. To the contrary, a policy that does not provide coverage for a claim because the allegedly negligent actor is not an ‘insured person’ has a very different effect than a policy that excludes particular acts from all coverage under any claim” (¶ 71).
Budget Repair Bill (2011 Wisconsin Act 10) – Open Meetings Law – Power of Courts to Enjoin Publication of Bills Enacted by Legislature
State ex rel. Ozanne v. Fitzgerald, 2011 WI 43 (filed 14 June 2011)
This case involves some of the legal controversy surrounding the enactment of 2011 Wisconsin Act 10 (the Act), which is commonly known as the budget repair bill. The Dane County district attorney filed a lawsuit alleging violations of the Open Meeting Law (see Wis. Stat. §§ 19.81-.98) in connection with the enactment of the Act. The Dane County Circuit Court enjoined the publication and further implementation of the Act.
In this decision, the supreme court ordered that all orders and judgments issued by the Dane County Circuit Court “are vacated and declared to be void ab initio” (¶ 6). It also granted the state’s petition for “supervisory/original jurisdiction” (¶ 2) “because one of the courts that we are charged with supervising has usurped the legislative power which the Wisconsin Constitution grants exclusively to the legislature” (¶ 7).
In Goodland v. Zimmerman, 243 Wis. 459, 10 N.W.2d 180 (1943), the supreme court, focusing on fundamental separation-of-powers principles, addressed whether a court has the power to enjoin publication of a bill duly enacted by the legislature and concluded that no court has jurisdiction to enjoin the legislative process at any point (see ¶ 8). In this decision the court confirmed the continuing validity of Goodland (see ¶ 9). It then held that “because the circuit court did not follow the court’s directive in Goodland, it exceeded its jurisdiction, invaded the legislature’s constitutional powers under Article IV, Section 1 and Section 17 of the Wisconsin Constitution, and erred in enjoining the publication and further implementation of the Act” (id.).
The court further concluded that “in enacting the Act, the legislature did not employ a process that violated Article IV, Section 10 of the Wisconsin Constitution, which provides in relevant part: ‘The doors of each house shall be kept open except when the public welfare shall require secrecy.’ The doors of the senate and assembly were kept open to the press and members of the public during the enactment of the Act. The doors of the senate parlor, where the joint committee on conference met, were open to the press and members of the public. WisconsinEye broadcast the proceedings live. Access was not denied. There is no constitutional requirement that the legislature provide access to as many members of the public as wish to attend meetings of the legislature or meetings of legislative committees” (¶ 11) (footnote omitted).
The court found without merit the argument that the legislature amended article IV, section 10 of the Wisconsin Constitution by its enactment of the Open Meetings Law (see ¶ 12). “It also is argued that the Act is invalid because the legislature did not follow certain notice provisions of the Open Meetings Law for the March 9, 2011 meeting of the joint committee on conference. It is argued that Wis. Stat. § 19.84(3) required 24 hours notice of that meeting and such notice was not given. It is undisputed that the legislature posted notices of the March 9, 2011 meeting of the joint committee on conference on three bulletin boards, approximately 1 hour and 50 minutes before the start of the meeting. In the posting of notice that was done, the legislature relied on its interpretation of its own rules of proceeding. The court declines to review the validity of the procedure used to give notice of the joint committee on conference” (¶ 13).
In sum, the court viewed its responsibility in the action for original jurisdiction as being limited to determining whether the legislature employed a constitutionally violative process in the enactment of the budget repair bill. “We conclude that the legislature did not violate the Wisconsin Constitution by the process it used” (¶ 15).
As of the date of the court’s order (June 14, 2011), the secretary of state “[had] not yet fulfilled his statutory duty to publish a notice of publication of the Act in the official state newspaper, pursuant to Wis. Stat. § 14.38(10)(c). Due to the vacation of the circuit court’s orders, there remain no impediments to the Secretary of State fulfilling his obligations under § 14.38(10)(c)” (¶ 10).
Justice Prosser joined the court’s order but wrote separately “to provide additional background and analysis”
(¶ 17). Chief Justice Abrahamson, Justice Bradley, and Justice Crooks concurred in part with and dissented in part from the court’s order.
Special Assessments – Appeals
Emjay Inv. Co. v. Village of Germantown, 2011 WI 31 (filed 17 May 2011)
A village levied a special assessment against Emjay Investments (Emjay), which filed an appeal approximately five years later. The circuit court dismissed the appeal as untimely, ruling that the appeal should have been filed within 90 days of the assessment. The court of appeals affirmed.
The supreme court affirmed in an opinion authored by Justice Ziegler. “A ‘special assessment’ ... is defined as
‘[t]he assessment of a tax on property that benefits in some important way from a public improvement’” (¶ 25). The procedures governing how municipalities must exercise their special assessment levies are set forth in Wis. Stat. section 66.0703(4)-(8). Section 66.0703(12) “provides the exclusive procedure by which an aggrieved property owner may appeal from the municipality’s adoption of a final resolution to levy special assessments under § 66.0703(8)(c).” Specifically it provides that “a 90-day period of appeal commences once the municipality publishes its final resolution levying the special assessments or once the municipality mails notice of the final resolution to interested persons, whichever is later” (¶ 29).
“An aggrieved property owner must strictly comply with the 90-day period of appeal in Wis. Stat. § 66.0703(12)(a); the failure to do so is a forfeiture of the right to appeal” (¶ 30). “The legislature has explicitly directed that an appeal under Wis. Stat. § 66.0703(12) is the ‘sole remedy’ of a property owner aggrieved by a special assessment levied under § 66.0703” (id.) The supreme court rejected Emjay’s arguments that the 90-day period did not apply (see ¶ 33). “Had Emjay filed its notice of appeal and complaint within the 90-day period of appeal, the circuit court would have been able to address the merits of Emjay’s arguments – including whether the special assessments were defective or whether Germantown had the power to levy the special assessments in the first instance” (¶ 35).
Finally, although appeals based on fraud are expressly excluded from the 90-day period, Emjay’s claims did not fall within this exclusion. “[N]either Emjay’s notice of appeal nor [its] complaint alleges fraud or otherwise conveys an intent to mislead on the part of Germantown. When pressed at oral argument, Emjay advised the court that the special assessments are fraudulent because of Germantown’s ‘procedural failure’ and its neglect ‘to actually endeavor what [§ 66.0703] charges it to do.’ However, absent an intent to mislead, such procedural deficiencies, assuming they exist, do not constitute fraud. Rather, procedural deficiencies are precisely the type of allegations that ‘shall’ be raised in an appeal under § 66.0703(12)” (¶ 41).
Condemnation Proceedings – “Agreed Price” Proceedings under Wis. Stat. section 32.06(2a) – Litigation Expenses
Klemm v. American Transmission Co., 2011 WI 37 (filed 26 May 2011)
American Transmission Co. initiated condemnation proceedings against the condemnees under Wis. Stat. section 32.06 for an easement to construct an electrical transmission line across the condemnees’ property. More specifically, the parties proceeded under section 32.06(2a), titled “Agreed Price.” Thus, section 32.06(2a) governed the condemnation proceedings in this case.
“Under Wis. Stat. § 32.06(2), the condemnor obtains at least one appraisal of the property to be taken. Under § 32.06(2a), the condemnor is required to ‘attempt to negotiate personally with the owner’ of the property to be taken ‘before making the jurisdictional offer.’ The statute requires the condemnor to record any conveyance from the owner to the condemnor ‘executed as a result of negotiations under this subsection.’ In addition, under Wis. Stat. § 32.06(2a), the condemnor must record a certificate of compensation detailing among other matters the compensation for the acquisition. The condemnor must also serve a copy of the certificate of compensation on the owner, including ‘a notice of the right to appeal [six months from the date of recording the certificate] the amount of compensation under this subsection’” (¶¶ 8-9). If an appeal is taken to the circuit court, the judge must assign the matter to the chair of the county condemnation commissioners for a hearing (see ¶ 10).
The question before the supreme court in this case was whether or not litigation expenses shall be awarded when an appeal is taken from a negotiated price. The circuit court ruled that litigation expenses should be awarded. In a published decision, the court of appeals reversed. See 2010 WI App 131. In a unanimous decision authored by Chief Justice Abrahamson, the supreme court reversed the court of appeals. It concluded that “litigation expenses shall be awarded to an owner pursuant to Wis. Stat. § 32.28(3)(d) if the owner conveys the property and receives a certificate of compensation pursuant to § 32.06(2a), with no jurisdictional offer issued under § 32.06(3); timely appeals to the circuit court, which refers the matter to the chairperson of the county condemnation commissioners; and is awarded at least $700 and at least 15% more than the negotiated price under § 32.06(2a); and neither party appeals the commission’s award” (¶ 5).
Subrogation – Made-Whole Doctrine – Collateral Sources
Fischer v. Steffen, 2011 WI 34 (filed 24 May 2011)
The plaintiffs were injured in a collision between their car and one driven by the defendant. The plaintiffs’ insurer, American Family, paid them $10,000, the policy limits for no-fault medical expenses. American Family lost its arbitration claim against the defendant’s insurer when a panel ruled that the defendant was not causally negligent in the crash (she suffered an epileptic stroke). The plaintiffs had no notice of, and did not participate in, the arbitration. At the civil jury trial on the plaintiffs’ claims, a jury found the defendant was 100 percent liable and awarded damages of $21,000. The parties stipulated that the reasonable value of past medical expenses was more than $12,000. The trial judge reduced the medical expenses by $10,000 to reflect American Family’s earlier payment to the plaintiffs. In a published decision, the court of appeals affirmed. See 2010 WI App 68.
The supreme court affirmed in a majority opinion written by Chief Justice Abrahamson. “The dispute before this court focuses on whether the circuit court erred in denying the plaintiffs a judgment of $10,000 against the defendant when the defendant did not pay the plaintiffs’ insurer $10,000, a sum that represents the insurer’s subrogation claim” (¶ 5). The decision was controlled by Paulson v. Allstate Insurance Co., 2003 WI 99, 263 Wis. 2d 520, 665 N.W.2d 744. The court concluded that “the collateral source rule does not, under the facts of the present case, entitle the plaintiffs to recover $10,000, the value of their insurer’s subrogation claim” (¶ 18).
The court reviewed the definitions and interworking of the collateral source rule, the rules of subrogation, and the made-whole doctrine (see ¶¶ 29-32). “In sum, the three rules ordinarily work in tandem. The collateral source rule prevents tortfeasors from being relieved of their obligations by payments to an injured party from an outside source. The rules of subrogation likewise ensure that the loss ultimately falls on the tortfeasor and also prevent an injured party from receiving a double recovery. Finally, the made whole doctrine ensures that in a situation when there are not sufficient funds to make the injured party whole, the injured party has priority over the subrogee (the insurer) in recovering from the limited pool of funds” (¶ 33).
The court rejected the plaintiffs’ multiple attempts to distinguish Paulson, on grounds such as the “indivisibility” of a subrogation claim from the plaintiff’s personal injury claim (see
¶ 49), distinctions between negotiated and arbitrated “settlements” (¶ 52), and distinctions between an insurer that receives a percentage of the subrogated claim and one that receives nothing (see ¶ 56).
The court noted that nowhere did the plaintiffs show that they were not made whole by the circuit court’s decision (see ¶ 51). It also found inapposite cases in which an insurer lost its subrogation right by playing no role in a lawsuit, in contrast to American Family’s “assiduous pursu[it]” of its claim in this case (see ¶ 60). Nor was the court convinced that the plaintiffs’ failure to receive notice of the arbitration distinguished this case from Paulson or Voge v. Anderson, 181 Wis. 2d 726, 512 N.W.2d 749 (1994) (see ¶¶ 64, 73).
Justice Bradley dissented, concluding that only the collateral-source rule, not the made-whole doctrine or subrogation, applied on the facts of this case (see
Justice Prosser also dissented. He concluded that Paulson does not control the outcome here and “[b]y holding that it [does], the court is damaging the right of many plaintiffs to secure a fair recovery for their personal injuries”