Supreme Court Digest
This column summarizes all decisions of the Wisconsin Supreme Court (except those involving lawyer or judicial discipline, which are digested elsewhere in the magazine). 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
Vol. 84, No. 9, September 2011
Notice-of-Claims Statute – Applicability in Wis. Stat. Section 133.18 Actions
E-Z Roll Off LLC v. County of Oneida, 2011 WI 71 (filed 13 July 2011)
From 1996 to 2003, E-Z Roll Off was one of several companies that hauled solid waste to the Oneida County Solid Waste Facility (the facility). During this time, Oneida County charged all haulers a $54 tipping fee for each ton of municipal solid waste that was delivered to the facility. On June 25, 2003, Oneida County executed an agreement with Waste Management Inc. Pursuant to this agreement, Oneida County charged Waste Management a $5.25 tipping fee for each ton of municipal solid waste that it delivered to the facility. All other haulers (including E-Z) continued to pay a $54 tipping fee. The agreement also required Waste Management to remove all loaded transfer trailers from the facility and transport them to an approved landfill. Under the agreement, Oneida County paid Waste Management $24.50 for each ton of municipal solid waste that was loaded onto Waste Management trucks for transportation to such a landfill.
On Sept. 28, 2005, E-Z filed a “Notice of Injury” and “Statement of Claim” with the Oneida County Clerk of Courts. It asserted that it was injured when Oneida County entered into a conspiracy to restrain trade in violation of Wis. Stat. section 133.03 by executing the agreement with Waste Management; it claimed losses of past and future earnings. Oneida County denied the claim. On April 20, 2006, E-Z filed suit against Oneida County seeking 1) a declaratory judgment that Oneida County’s agreement with Waste Management constituted an illegal restraint of trade in violation of Wis. Stat. section 133.03(1); and 2) treble damages, attorney fees, and costs pursuant to Wis. Stat. section 133.18. Oneida County filed a motion for summary judgment, arguing that E-Z failed to comply with the notice-of-claim requirements found in Wis. Stat. section 893.80(1). Specifically, Oneida County argued that E-Z served its notice of claim well after the 120-day time limit provided in section 893.80(1)(a). The circuit court agreed with Oneida County and rejected E-Z’s argument that antitrust actions brought pursuant to section 133.18 are exempt from the notice-of-claim requirements in section 893.80(1). In a published decision, the court of appeals reversed; it concluded that antitrust actions are exempt from the notice-of-claim requirements. See 2010 WI App 76.
In a majority decision authored by Justice Gableman, the supreme court reversed the court of appeals. It concluded that “[section] 133.18 antitrust actions are not exempt from the notice of claim requirements set forth in Wis. Stat. § 893.80” (¶ 39).
The court further held that “E-Z did not meet the requirements of § 893.80(1)(a) when it failed to give Oneida County notice of its claim within the 120-day limitations period.” Oneida County argued that the “event” giving rise to E-Z’s claim was the signing of the agreement with Waste Management on June 25, 2003. E-Z contended that its cause of action did not accrue until discovery of the agreement, and that such discovery did not occur until February 2004. The court did not need to decide on which date E-Z’s cause of action began to accrue because, in either case, E-Z’s notice of claim was untimely. E-Z filed its notice of claim with the Oneida County clerk of court on Sept. 28, 2005, much more than 120 days after both the date on which the agreement was executed (June 25, 2003) and the date E-Z contended it learned of the agreement (February 2004) (see ¶ 43).
E-Z also argued that each time it paid a higher tipping fee than Waste Management, a new cause of action accrued to E-Z. Consistent with this assertion, E-Z contended that the notice of claim that it filed on Sept. 28, 2005, was timely because the notice was filed within 120 days of E-Z having paid a higher tipping fee than Waste Management. The supreme court responded that “E-Z … fails to cite any authority applying the continuing violations doctrine to the notice of claim statute under Wisconsin law. More importantly, E-Z also ignores a purpose of the notice of claim statute, which is to afford governmental entities the opportunity to compromise and budget for potential settlement or litigation. If the continuing violations doctrine were to apply, it would be much more difficult for governmental entities to budget for potential litigation…. The legislature did not intend for governmental entities to be exposed to indefinite periods of liability for potential violations of Wis. Stat. § 133.18. Such a result would be unreasonable given the purposes of the notice of claim requirements found in § 893.80” (¶ 46).
Lastly, the court considered an exception to the general 120-day rule for filing notices of claims. The exception exists when a claimant demonstrates that two conditions are met: 1) the governmental entity had actual notice of the claim, and 2) the governmental entity has not been prejudiced by the delay or failure to give notice. Wis. Stat. § 893.80(1)(a)
(see ¶ 48). Because the supreme court determined that E-Z failed to show that Oneida County suffered no prejudice, it concluded that the circuit court properly granted summary judgment in favor of Oneida County (see ¶ 53).
Justice Roggensack filed a dissenting opinion that was joined by Chief Justice Abrahamson.
Postverdict Motions—Timeliness – Shareholder “Oppression” – Benefit-Estoppel Doctrine
Northern Air Servs. Inc. v. Link, 2011 WI 75 (filed 14 July 2011)
This “complex civil litigation” arises out of a “bitter interfamilial dispute” among the purveyors of “meat and cheese snacks” (¶ 1). Jack Link and his sons, Jay and Troy, were shareholders in the family-owned business. Buy-sell agreements gave the company the option to redeem the Links’ shares if their employment with Link Snacks was terminated, regardless of reason. In 2005, disagreements between Jack and Jay precipitated Jay’s termination. This litigation followed their inability to reach a buy-out agreement. A six-week jury trial, divided into three phases, resulted in a verdict awarding Jay $736,000 in compensatory damages and $5 million in punitive damages from Jack. The jury also found that Jay breached fiduciary duties to related companies, assessing him the same $5 million in punitive damages. Both parties were given 20 days to file postverdict motions. Both filed late: Jay by two minutes and Jack by one day. Nonetheless, the circuit court heard both sets of motions and reduced the punitive damages owed by Jay to $1 and those owed by Jack to $736,000 (the same amount as the compensatory damages). In an unpublished opinion the court of appeals affirmed the reduction of the punitive damages owed by Jay but found that the circuit court had no authority to consider Jack’s untimely postverdict motion, thus reinstating the $5 million award owed by Jack to Jay. Other issues are touched on below.
The supreme court affirmed in part and reversed in part in an opinion, written by Justice Gableman, that addressed three main issues. “We first consider whether the court of appeals erred in restoring the $5,000,000 punitive damages award that Jack was ordered to pay Jay when it concluded that his postverdict motions were untimely filed under Wis. Stat. § 805.16” (¶ 37). Although Jay had filed two minutes late, his postverdict motion was deemed timely but Jack’s motions, filed the next day, were found to be untimely by the court of appeals. Essentially, Jack argued that if his motions were untimely so were Jay’s. The supreme court affirmed, however, distinguishing cases involving chapter 980 commitments (State v. Treadway, 2002 WI App 195, 257 Wis. 2d 467, 651 N.W.2d 334) and its own bright-line rule that papers must be filed with the clerk of the supreme court before the close of the business day on the last day of an applicable statutory deadline (St. John’s Home of Milwaukee v. Continental Cas. Co., 150 Wis. 2d 37, 441 N.W.2d 219 (1989)). As an elected constitutional officer, a circuit court clerk must have discretion, although it is not “limitless” (¶ 71). “[I]t is within the clerk of circuit court’s discretion as an elected constitutional officer to accept and file pleadings received after the end of usual business hours, so long as that discretion is exercised reasonably and is within the guidelines provided by the legislature” (¶ 73).
“Second, we address whether Jay waived his right to appeal his judicial dissolution claim under Wis. Stat. § 180.1430(2)(b)” (¶ 37). Here too, the supreme court affirmed the court of appeals’ holding, although on a different ground. “Jay’s shareholder status was not lost because majority shareholders completed a cash-out merger. Wisconsin Stat. § 180.1106(1)(d), which preserves a plaintiff’s standing in such a situation, is therefore inapplicable. The applicable statute in the instant case is Wis. Stat. § 180.1430(2)(b), which expressly requires that a party be a ‘shareholder’ in order to bring a claim against a business entity for judicial dissolution. Nothing in the statutory language of § 180.1430(2)(b) indicates a legislative intent to allow a nonshareholder to bring a claim for judicial dissolution. Interpreting Wis. Stat. § 180.1430 to require a plaintiff to be a shareholder in order to bring a judicial dissolution claim is not only a straightforward reading of the statute’s plain language; it is also the logical interpretation given the statute’s purpose. A shareholder oppression claim is, by definition, a claim brought by an individual shareholder in his or her capacity as shareholder for injury done to his individual interests that arise out of his or her share ownership” (¶¶ 88-89). “Jay’s intention to maintain standing to appeal the circuit court’s judgment denying his oppression claim is irrelevant” (¶ 92).
Third, the court of appeals erred “in dismissing Jay’s appeal of the circuit court’s decision to limit the evidence Jay could present regarding his fiduciary duty damages theory relating to his breach of fiduciary duty claims against Jack and Troy on the basis of the benefit-estoppel doctrine” (¶ 97). “Put simply, Jay’s appeal of the circuit court’s decision to limit the evidence Jay could present regarding his theory of damages relating to his breach of fiduciary duty claims against Jack and Troy and the specific performance of the Buy-Sell Agreement – the enforcement of which Jay is not appealing – are different claims involving different parties. Therefore, if Jay was successful in his appeal of the circuit court’s decision to limit the evidence Jay could present regarding his fiduciary duty damages theory relating to his breach of fiduciary duty claims against Jack and Troy, the benefits he has accepted under the Buy-Sell Agreement would, without question, remain untouched. Consequently, the benefit-estoppel doctrine is inapplicable to Jay’s appeal of the circuit court’s decision to limit the evidence Jay could present regarding his theory of damages relating to his breach of fiduciary duty claims against Jack and Troy” (¶ 102).
Justice Bradley, joined by Chief Justice Abrahamson, concurred with the majority that the circuit court improperly considered Jack’s untimely motion after verdict, Jay could not maintain his claim for judicial dissolution, and the benefit-estoppel doctrine did not preclude Jay’s appeal regarding the limitations placed on his evidence regarding his breach of fiduciary duty claim. They also joined Justice Ziegler’s concurrence to the effect that the St. John’s Home bright-line “close-of-business-day” rule should be extended to circuit court clerks.
Justice Ziegler, joined by Justice Crooks, concurred but argued that cases giving to circuit court clerks discretion to receive tardy filings should be overturned. “A clerk of circuit court has the discretionary authority to accept papers after-hours but cannot exercise the judicial power to determine whether such papers were timely filed. Rather, even if papers are somehow delivered to the clerk after-hours, the clerk should treat the papers as having been filed on the following business day” (¶ 110).
Assignments for the Benefit of Creditors – Wis. Stat. Chapter 128 – Sale of Collateral Requires Consent of Secured Creditors
BNP Paribas v. Olsen’s Mill Inc., 2011 WI 61 (filed 8 July 2011)
Chapter 128 of the Wisconsin Statutes governs assignments for the benefit of creditors. As a state law alternative to federal bankruptcy, it sets forth a statutory scheme under which a debtor’s assets may be liquidated and the proceeds distributed to creditors in an orderly and controlled manner (see ¶ 39). Although chapter 128 was created in 1937, there are relatively few appellate cases devoted to its interpretation (see ¶ 38).
In this chapter 128 proceeding, the circuit court ordered the sale of certain assets of the debtor free and clear of all liens. A secured creditor, Paribas, argued that the circuit court erred when it ordered the sale of its collateral free and clear of its security interest without its consent. In an unpublished decision, the court of appeals affirmed.
In a decision authored by Justice Bradley, the supreme court reversed the court of appeals. Among the issues before the supreme court was the lawfulness of the circuit court order described above. The supreme court concluded that “the circuit court erred by ordering the sale of Paribas’s collateral free and clear of Paribas’s security interest without its consent” (¶ 3). Said the court, “Wisconsin statutes, case law, and commentary are in accord. A secured creditor may withhold its consent to the sale of its collateral in a chapter 128 proceeding. If it does, the court cannot order the sale of the collateral free and clear of the secured creditor’s lien” (¶ 50).
“However, because the value of Paribas’s security interest in the assets sold is unclear on this record, we are unable to discern if Paribas was harmed as a result of this error. We further determine that the court contravened the statute by approving an offer that circumvented the order of distribution mandated by Wis. Stat. § 128.17(1). Accordingly, we reverse the court of appeals and remand to the circuit court for a determination of what remedy is available under the circumstances”
Justice Roggensack filed a concurring opinion that was joined by Justice Ziegler and Justice Gableman. Justice Prosser did not participate in this case.
Ineffective Assistance of Postconviction Counsel – Pleading Requirements to Obtain an Evidentiary Hearing
State v. Balliette, 2011 WI 79 (filed 19 July 2011)
The defendant was convicted of homicide by intoxicated use of a motor vehicle. He later pursued postconviction relief under Wis. Stat. section 974.02 and claimed ineffective assistance of trial counsel. The circuit court denied the motion, and the court of appeals affirmed.
In the present litigation, the defendant filed a motion pro se under section 974.06 alleging ineffective assistance of his postconviction counsel based on the attorney’s alleged failure to raise certain additional claims of ineffective assistance by trial counsel. The circuit court denied the motion without a hearing. In an unpublished decision, the court of appeals reversed the circuit court and remanded for an evidentiary hearing. The state appealed from this decision.
In a majority decision authored by Justice Prosser, the supreme court reversed the court of appeals. It concluded that “the defendant is not entitled to an evidentiary hearing because the allegations in his § 974.06 motion do not provide sufficient material facts that, if proven, demonstrate an entitlement to the relief sought. His motion focused attention on the wrong counsel; it was conclusory because it failed to carefully address the two elements of ineffective assistance for postconviction counsel set out in Strickland [Strickland v. Washington, 466 U.S. 668 (1984)]; and it generally ignored the ‘five “w’s” and one “h”‘ methodology [who, what, where, when, why and how] outlined in John Allen [State v. John Allen, 2004 WI 106, 274 Wis. 2d 568, 682 N.W.2d 433] which guide the court in meaningfully evaluating the claim. The motions failed to say who would be called as a witness at an evidentiary hearing and what this testimony was likely to prove. In attempting to construct a better defense for a retrial, [the defendant] did not do enough to show that a new trial was required” (¶ 79).
With regard to the Strickland methodology, the defendant was required to allege that postconviction counsel’s performance was deficient and that the deficient performance prejudiced his defense. To show that the performance was deficient, the defendant was required to set forth allegations that postconviction counsel made errors so serious that the attorney was not functioning as the “counsel” guaranteed the defendant by the Sixth Amendment. “For example, [the defendant] could have alleged such deficiency by showing that counsel’s performance was ‘objectively unreasonable … in failing to find arguable issues to appeal…’” (¶ 64).
The defendant’s motion identifies various acts and omissions of trial counsel that he believes constituted ineffectiveness “but he was required to assert why it was deficient performance for postconviction counsel not to raise these issues”
(¶ 65). The defendant “also needed to show how he intended to establish deficient performance if he was given the chance at an evidentiary hearing. The evidentiary hearing is not a fishing expedition to discover ineffective assistance; it is a forum to prove ineffective assistance. Both the court and the State are entitled to know what is expected to happen at the hearing, and what the defendant intends to prove” (¶ 68).
The defendant’s motion also failed to assert how postconviction counsel’s purported deficient performance resulted in prejudice to the defense. “Had [postconviction counsel] raised the issues laid out in [the defendant’s] motion, he would very likely have been given an expanded Machner hearing, but it does not necessarily follow that he would have been given a new trial. [The defendant’s] duty at this point was to allege facts, which, if true, would entitle him to a new trial” (¶ 70).
For these and other reasons articulated in the decision, the majority concluded that the defendant was not entitled to an evidentiary hearing on his section 974.06 motion.
Justice Bradley filed a dissenting opinion because she concluded that the defendant alleged sufficient facts to entitle him to an evidentiary hearing on his claims of trial-counsel and postconviction-counsel ineffectiveness (see ¶ 85). Chief Justice Abrahamson joined this dissent.
Criminal Trials – Waiver of Right Not to Testify – On-the-Record Colloquy Recommended But Not Required
State v. Denson, 2011 WI 70 (filed 13 July 2011)
When a defendant chooses not to testify on his or her own behalf, the circuit court has an affirmative duty to conduct an on-the-record colloquy to ensure that the defendant is knowingly, voluntarily, and intelligently waiving his or her right to testify. See State v. Weed, 2003 WI 85, 263 Wis. 2d 434, 666 N.W.2d 485. This case raised the question of whether a similar colloquy is required when a defendant waives his or her right not to testify because he or she wants to testify on his or her own behalf.
In a majority decision authored by Justice Ziegler, the supreme court held that a defendant’s right not to testify is a fundamental right that must be waived knowingly, voluntarily, and intelligently (see ¶ 8). However, it concluded that “circuit courts are not required to conduct an on-the-record colloquy to determine whether a defendant is knowingly, voluntarily, and intelligently waiving his or her right not to testify. While we recommend such a colloquy as the better practice, we decline to extend the mandate pronounced in Weed” (¶ 80). The court recognized that “the risk that a circuit court’s inquiry into a criminal defendant’s decision to testify will influence the defendant to waive his or her right to testify or will improperly interfere with defense strategy outweighs the benefit of mandating an on-the-record colloquy to ensure that the defendant is knowingly, voluntarily, and intelligently waiving his or her right not to testify. At the same time, as a practical matter, we recognize that conducting an on-the-record colloquy ‘is the clearest and most efficient means’ of ensuring that the defendant has validly waived his or her right not to testify ‘and of preserving and documenting that valid waiver for purposes of appeal and postconviction motions.’ … Accordingly, we recommend an on-the-record colloquy as the better practice” (¶¶ 66-67) (citations omitted).
The court also addressed the nature of postconviction procedures when a defendant claims an invalid waiver of the right not to testify. It concluded that “once a defendant properly raises in a postconviction motion the issue of an invalid waiver of the right not to testify, the circuit court must conduct an evidentiary hearing to determine whether the defendant knowingly, voluntarily, and intelligently waived his or her right not to testify. The initial burden rests with the defendant to make a prima facie showing that he or she did not know or understand that he or she had the right not to testify. The burden then shifts to the State to demonstrate by clear and convincing evidence that the defendant knowingly, voluntarily, and intelligently waived his or her right not to testify. In essence, the State will be required to demonstrate that the defendant knew he or she had the right not to testify, understood the consequences of waiving the right not to testify, and understood that the decision whether to testify was for him or her to make. To so demonstrate, the State may utilize the entire record and may examine both the defendant and the defendant’s trial counsel at the evidentiary hearing. If the State is able to satisfy its burden, then the conviction will stand. On the other hand, if the State is unable to demonstrate by clear and convincing evidence that the defendant knowingly, voluntarily, and intelligently waived his or her right not to testify, then the defendant is entitled to a new trial”
(¶ 70) (citations omitted).
Chief Justice Abrahamson filed a concurring opinion in which Justice Bradley joined. The concurring justices would mandate an on-the-record colloquy regarding a defendant’s waiver of the right not to testify (see ¶ 93).
Expelled Students – Judicial Power to Order Provision of Educational Services
Madison Metro. Sch. Dist. v. Circuit Court for Dane County, 2011 WI 72 (filed 14 July 2011)
This case presented important issues related to the authority of circuit courts to order educational services for students who are subject to delinquency petitions and also have been expelled from school. A 15-year-old student was expelled from Madison East High School for bringing nine bags of marijuana to school; the expulsion order denied him any educational services from the school district for at least one semester. The student was also the subject of a delinquency petition as a result of his conduct. In the delinquency proceeding, the circuit court ordered the school district to provide the juvenile with educational services. In an unpublished opinion, the court of appeals granted a writ of prohibition and vacated the circuit court’s order requiring the school district to develop and implement an educational plan for this juvenile.
The crucial issue before the supreme court was whether a circuit court has authority to order a school district to provide alternative educational services to a juvenile who has been expelled from school by a lawful and unchallenged expulsion order. In a majority decision authored by Justice Prosser, the supreme court affirmed the decision of the court of appeals. Addressing the various statutes that are relevant to the central issue on appeal, the court concluded as follows:
“(1) Wisconsin Stat. § 120.13(1)(c)1. gives a school district express authority to expel a student from school. (2) A circuit court does not have statutory authority to order a school district to provide alternative educational services to a juvenile who has been expelled from school by a lawful and unchallenged expulsion order but is still residing in the community. (a) Wisconsin Stat. § 120.12(18) requires a school board to cooperate with the juvenile court and the agency designated by the court to prepare an educational plan under Wis. Stat. § 938.33(1)(e) for a pupil or former pupil who is subject to a dispositional order under Wis. Stat. § 938.34 or Wis. Stat. § 938.355. (b) Wisconsin Stat. § 120.12(18) requires a school district to ‘[c]oordinate and provide for continuity of educational programming’ for pupils receiving educational services as the result of a court order under Wis. Stat. § 938.34(7d). (c) Wisconsin Stat. § 120.12(18) does not require a school board or a school district to provide alternative educational resources to a juvenile who has been expelled from school under Wis. Stat. § 120.13(1)(c)1. (d) Wisconsin Stat. § 938.34(7d) authorizes a circuit court to order a juvenile to attend a variety of educational programs, but it does not authorize a circuit court to order a school district to create an educational program or contract for an educational program” (¶ 5).
The supreme court also disagreed with the circuit court’s view that it could obtain authority over the school district under section 938.45 to order the district to provide educational services for the juvenile. In support of its order, the circuit court stated that the district’s refusal to attempt or consider a reasonable educational challenge and opportunity for the juvenile contributes to the delinquency of the juvenile under Wis. Stat. section 938.45 (see ¶ 22). However, this statute refers to orders that a circuit court may make with respect to “person[s].” Said the supreme court, “[w]e conclude that a plain reading of the statutory language in Wis. Stat. § 938.45, coupled with our obligation to construe statutes in a manner that avoids unreasonable results, clearly indicates that the term ‘person’ encompasses natural persons, not entities such as the District. If the District cannot be considered a ‘person,’ it cannot have contributed to [the juvenile’s] delinquency; consequently, the circuit court could not obtain authority over the District under Wis. Stat. § 938.45” (¶ 72).
Lastly, the supreme court concluded that because the circuit court exceeded its authority by ordering the school district to provide educational services to the juvenile, the writ of prohibition issued by the court of appeals was proper (see ¶ 91).
In dissent, Justice Crooks wrote that he “would hold that a circuit court has authority, when exercising its juvenile court jurisdiction in a delinquency proceeding, to order a school district to submit a plan to provide educational services to a student expelled by the district” (¶ 127). Chief Justice Abrahamson and Justice Bradley joined this dissent.
Experts – Hearsay
State v. Kandutsch, 2011 WI 78 (filed 19 July 2011)
The defendant was convicted of operating a motor vehicle while intoxicated. Police officers found him highly intoxicated in the home of his estranged wife, his car parked nearby. He claimed that he had been sober when he drove to the home but became intoxicated at a nearby bar after he parked his car. To prove he had driven while intoxicated, the state relied on circumstantial evidence: the defendant was wearing an electronic monitoring device (EMD) that established that he had left his home only 20 minutes before his arrest, not more than an hour earlier as he claimed. In an unpublished decision, the court of appeals affirmed, finding sufficient evidence of the EMD’s reliability.
The supreme court affirmed in a majority opinion written by Justice Prosser that addressed two evidentiary issues. First, did the EMD evidence require expert testimony? The court held it did not because “the technology underlying the EMD and the daily summary report [which recorded the subject’s comings and goings] is well within the comprehension of the average juror” (¶ 37). It agreed with the court of appeals that the technology was essentially that of the “cordless telephone.” Several Department of Corrections’ (DOC) agents testified concerning their experience working with EMDs generally and the EMD unit in this case, reporting that they had not seen any problems (see ¶ 39). The court found this sufficient.
“The intersection of radio signals and telephone connections does not convert the EMD into an issue so ‘unusually complex or esoteric’ that the jury required the aid of expert testimony to interpret the information. Accordingly, we decline to take the extraordinary step of requiring expert testimony to introduce evidence of the EMD at issue here” (¶ 41). EMD technology has been used in Wisconsin for several decades (see ¶ 49).
“We conclude that the EMD report does not present an issue that is particularly complex or unusually esoteric, and additionally, that the EMD involves scientific principles that are indisputable and fully within the lay comprehension of the average juror. Expert testimony was not required to properly establish a foundation for the report’s admissibility. Furthermore, the testimony provided by Agents Klarkowski and Williams fully satisfied the requirements of Wis. Stat. § 909.01” (¶ 50).
The second issue was whether the electronic monitoring report generated by the EMD system was hearsay under Wis. Stat. section 908.01. This report provided the critical time frame for the defendant’s having left his house to drive to his ex-wife’s home, from which the jury inferred he had to have been drunk while driving. Hearsay statements are made by declarants, a term defined as including only human beings. Because this report was generated by a machine program, not a human, it was not hearsay; thus, it did not have to be introduced under some exception to the hearsay rule but had only to be properly authenticated, as in this case. The court carefully distinguished “computer-generated records,” like the EMD report, from “computer-stored records,” which may constitute hearsay “because they merely store or maintain the statements and assertions of a human being” (¶ 57).
Chief Justice Abrahamson, joined by Justice Bradley, dissented. The state, they contended, failed to make an adequate record showing that the EMD system was sufficiently reliable (see ¶ 92). No statute or case established its reliability. And the record did not support judicial notice (see ¶ 86). Thus, the state was obligated to provide expert testimony establishing the system’s reliability:
“Neither the circuit court nor the jury was presented with testimony regarding the scientific principles underlying how the technology worked. No testimony was presented that described the computer processes involved in storing the data and producing the report. No testimony was presented regarding the reliability of the software that created the report (except for the anecdotal evidence of the DOC agents), the processes involved in creating the report, or the verification methodology for the output of the system” (¶ 82). Finally, the state also failed to provide sufficient evidence that the defendant’s EMD unit was reliably working that evening (see ¶ 93).
Cross-Examination – Confrontation
State v. Rhodes, 2011 WI 73 (filed 14 July 2011)
A jury convicted the defendant of the execution-style killing of his sister’s ex-boyfriend. The motive for the killing, according to the state, was that the victim had instigated a beating of the defendant’s sister, Nari, the day before. The defendant denied any involvement in the murder and disclaimed any motive to retaliate. To that end, he sought to show a past pattern of domestic abuse of Nari by the victim, for which there had been no retaliation. At trial, Nari testified concerning the beating the day before the murder, minimized the defendant’s involvement, and alluded to prior domestic violence at the victim’s hand. On cross-examination by the defense, Nari talked about earlier abuse at the victim’s hands, including a broken orbital bone, but the circuit court sustained the state’s objection to any further testimony about prior acts of violence. In an unpublished decision, the court of appeals reversed the defendant’s convictions on the ground that the circuit court had unfairly limited his right of cross-examination.
The supreme court reversed the court of appeals in a majority opinion authored by Justice Prosser. The supreme court held that the circuit court did not abuse its discretion by restricting any further cross-examination about the history of domestic violence between Nari and the victim. It had appropriately balanced the risk of confusion against the defendant’s right to challenge the state’s evidence. A defendant has the right to expose a witness’s motivation (bias) in testifying. “Here, however, Rhodes is attempting to use a State witness [Nari] to rebut the State’s theory of the defendant’s motivation, even though Nari had provided little support for the State’s theory in her testimony. If Rhodes had attempted to challenge the motivation or credibility of Nari through cross-examination, we have a different case” (¶ 51). The circuit court “permissively exercised its discretion in curtailing a full inquiry into prior incidents between [the victim] and Nari” (¶ 59). Indeed, “Nari’s testimony seemed to refute the State’s theory of motive” because it portrayed the victim as somewhat protective of, and friendly toward, Nari (¶ 64). “[F]aced with a difficult dilemma,” the trial judge appropriately balanced the defendant’s constitutional rights with the dangers of confusing the issues and misleading the jury (see ¶ 67).
Chief Justice Abrahamson, joined by Justice Bradley, dissented. “A defendant’s fundamental constitutional right of confrontation surely affords the defendant more protection and leeway in cross-examining a witness than the standard analysis used in discretionary evidentiary decisions when a fundamental constitutional right is implicated” (¶ 80).
Divorce – Division of Property – Professional Goodwill – Maintenance – Double-Counting Rule
McReath v. McReath, 2011 WI 66 (filed 12 July 2011)
Tim and Tracy McReath divorced following a 20-year marriage. Tim is a dentist with an orthodontic practice (Orthodontic Specialists S.C.) that he purchased from Grady early on in the marriage. Most of Tim’s dental education was pursued during the marriage, and his student loans were repaid with marital funds. Tracy does not have a professional degree and throughout much of the marriage worked as a homemaker and primary caregiver of the couple’s three children. The divorce court ordered Tim to pay Tracy $796,720 to equalize the property division upon the couple’s divorce, as well as maintenance of $16,000 per month for 20 years. In a published decision, the court of appeals affirmed. See 2010 WI App 101. In a unanimous decision authored by Justice Roggensack, the supreme court affirmed the court of appeals.
The first question before the court was whether the entire value of the salable professional goodwill of Tim’s interest in Orthodontic Specialists can be counted as divisible property in the marital estate. Professional goodwill “is the goodwill that is attendant to a professional business” (¶ 1 n.3). The court concluded that “when valuing a business interest that is part of the marital estate for purposes of divorce, a circuit court shall include the value of the salable professional goodwill attendant to the business interest”
“[W]hile Wis. Stat. § 767.61(2) excludes specific property from the marital estate, professional goodwill is not listed therein. Moreover, under § 767.61(3), we presume that the marital estate should be divided equally. As aforementioned, the presumption of equal division recognizes the contributions of each spouse to the marriage, including a homemaker spouse’s lost earning capacity from being out of the job market. Where the salable professional goodwill is developed during the marriage, it defies the presumption of equality to exclude it from the divisible marital estate” (¶ 36).
Tim urged the supreme court to divide professional goodwill into subcategories of enterprise goodwill (goodwill in a professional practice attributable to the business enterprise itself by virtue of its existing arrangements with suppliers, customers, or others, and its anticipated future customer base resulting from factors attributable to the business) and personal goodwill (goodwill that is attributable to the individual owner’s personal skill, training, or reputation, that is, the goodwill that depends on the continued presence of a particular individual) (see ¶ 39). Tim further argued that “personal goodwill” should be excluded from the marital estate.
After reviewing cases from other jurisdictions that distinguish between personal and enterprise goodwill, the court “[chose] not to require circuit courts to draw a distinction between personal and enterprise goodwill when dividing a marital estate that includes professional goodwill. This is so because the premise on which the distinction is grounded – that enterprise goodwill is salable and personal goodwill is not – is mistaken. As evidenced by the facts of the case at hand, Tim testified that when he bought Orthodontic Specialists for $930,000, nearly 90 percent of the sale price was for the professional goodwill. Tim described this goodwill as including elements of ‘personal’ goodwill: ‘Dr. Grady’s name, the noncompete clause, and the employment agreement that Dr. Grady would stay on to introduce me to his existing patients.’ Therefore, as this case demonstrates, in some situations, personal goodwill is salable” (¶ 41).
The court went on to conclude that, given the presumption of an equal division of the marital estate and the contributions of both parties to the creation of that estate (including Tracy’s contributions to the development and success of the dental practice), the circuit court did not erroneously exercise its discretion when it included the goodwill associated with Orthodontic Specialists in the marital estate and divided it on a 50/50 basis (see ¶ 58).
The second major issue before the supreme court was whether the circuit court double counted the value of Tim’s professional goodwill by basing Tracy’s maintenance award on Tim’s expected future earnings from Orthodontic Specialists. Under Tim’s line of reasoning, the circuit court counted the goodwill once when it treated the goodwill as a divisible marital asset. Tim contended that the court then counted professional goodwill a second time when it awarded maintenance based on his past earnings from Orthodontic Specialists, given that professional goodwill increased those past earnings. The supreme court disagreed.
“[T]he double counting rule does not prohibit the inclusion of investment income from assets awarded to a spouse as part of property division when calculating maintenance. This is so because the value of the investment asset is separate from the income it produces…. Applying these principles to the case at hand, we conclude that the salable professional goodwill in Orthodontic Specialists is similar to an asset that produces income” (¶ 60) (citations omitted). Tim’s future earnings (calculated at $465,000 annually) constitute income that is “separate from the value of the dental practice as it existed at the time of the property division. Consequently, the circuit court did not double count Orthodontic Specialists’ professional goodwill and, therefore, did not erroneously exercise its discretion when it awarded Tracy $16,000 per month, for 20 years, in maintenance” (¶ 61).
Disqualification – Power of Supreme Court to Disqualify a Justice on a Case-by-Case Basis
State v. Henley, 2011 WI 67 (filed 12 July 2011)
At the center of this appeal was the issue of whether four justices of the supreme court have the power, on a case-by-case basis, to prevent a judicial peer from participating in a pending matter (see ¶ 6). “The question decided herein is an institutional question, i.e., whether recusal may be forced upon a fellow justice on a case-by-case basis by his or her judicial peers. This question implicates constitutional functions: that of the court as an institution and those of individual justices as constitutional officers” (¶ 8).
In a per curiam opinion joined by four justices (including the justice whose disqualification was sought), the court concluded that determining whether to recuse is the sole responsibility of the individual justice for whom disqualification from participation is sought; a majority of the supreme court does not have the power to disqualify a judicial peer from performing the constitutional functions of a Wisconsin Supreme Court justice on a case-by-case basis; and the party who moved for recusal of a justice in this case has received due process
(see ¶ 39).
Said the majority, “[i]n regard to limiting an individual Wisconsin Supreme Court justice’s constitutional authority to act, Article VII of the Wisconsin Constitution … establishes the circumstances under which a justice can be prevented from exercising his or her judicial functions. It provides that a justice may be removed from office only through impeachment (Wis. Const. art. VII, § 1); pursuant to a disciplinary proceeding brought before the supreme court for cause or disability (Wis. Const. art. VII, § 11); and by address of both houses of the legislature (Wis. Const. art. VII, § 13). The voters may also recall a justice (Wis. Const. art. XIII, § 12)” (¶ 24).
The majority also noted that it is through the Code of Judicial Conduct that the supreme court may exercise its power over an individual supreme court justice (see ¶ 21); however, “[t]he Judicial Code provides no authority to the supreme court to disqualify a justice from participating in a particular case when that justice has considered and decided a motion to disqualify him or her” (¶ 23). The supreme court’s internal operating procedures specify that “[t]he decision of a justice to recuse or disqualify himself or herself is that of the justice alone” (¶ 26).
The majority observed that “four justices forcing a fellow justice off a pending case will not increase the public’s perception that the court is an impartial decision maker. Rather, the specter of four justices preventing another justice from participating will just as likely be seen by the public as a biased act of four justices who view a pending issue differently from the justice whom they disqualified” (¶ 36). It concluded its analysis by indicating that “removal of a justice from participating in an individual case negatively impacts judicial independence. This is so because motions for disqualification are not made in regard to a justice that the movant believes will decide the pending case in the movant’s favor. Rather, they are made to exert pressure on a justice the movant believes will not decide the case as the movant wants it to be decided, or in motions after decision in order to cancel a justice’s participation from a decision under which the movant did not prevail” (¶ 37).
Chief Justice Abrahamson filed a dissenting opinion that was joined by Justice Bradley and Justice Crooks. Among other things, the dissenters were critical of the fact that the justice whose disqualification was sought participated in this decision and was a member of the majority that issued the per curiam opinion (see ¶¶ 42-56).
[Editors’ Note: In a per curiam opinion issued on the same date as the Henley decision, the supreme court denied a motion to disqualify one of its justices in another case by applying the holding in Henley. See Polsky v. Virnich, 2011 WI 69 (filed 12 July 2011). Chief Justice Abrahamson dissented in Polsky and was joined by Justice Bradley and Justice Crooks. Justice Ziegler did not participate in Polsky.]
Damages – Prevailing Party – Remedies
Kilian v. Mercedes-Benz USA, 2011 WI 65 (filed 12 June 2011)
Kilian leased an automobile manufactured by Mercedes-Benz USA and financed by Mercedes-Benz Financial. Mechanical problems with the car led Kilian to return it to Mercedes-Benz USA, which accepted the vehicle and gave him more than $20,000 under the Lemon Law. Mercedes-Benz Financial, however, began collection actions against Kilian, who had stopped making payments after he returned the car. The collection actions continued even after Kilian’s lawyer advised Mercedes-Benz Financial that the car had been returned, and even after it had promised to stop collection efforts – which finally ceased only when this action was filed. Because Kilian had suffered no pecuniary loss, the circuit court granted summary judgment in favor of Mercedes-Benz Financial because no further Lemon Law violation had occurred. In an unpublished opinion, the court of appeals affirmed.
The supreme court reversed in a majority opinion written by Justice Gableman. First, Kilian had been “damaged” under the Lemon Law regardless of any pecuniary loss. Thus, Kilian’s claim for equitable relief was proper under the Lemon Law (see ¶ 31). Second, Mercedes-Benz Financial had violated the Lemon Law. “We agree with Kilian that a lender who continues to enforce a lease after the consumer returns the vehicle and receives a refund from the manufacturer may be held to violate the plain language of the statute prohibiting ‘[any] person’ from doing so” (¶ 34). Assertions of an “innocent mistake” were inadequate (¶ 37). “[I]n light of (1) Mercedes-Benz Financial’s repeated efforts to enforce the lease for two months after Kilian received his refund, (2) the notice of the refund that Mercedes-Benz Financial received from both Kilian and his attorney, and (3) Bieler’s assurances that Mercedes-Benz Financial’s collection efforts would cease, we hold that Mercedes-Benz Financial violated Lemon Law § 218.0171(2)(cm)3.” (¶ 38). Third, Kilian’s pursuit of equitable relief (rescission) did not limit his remedies under the Lemon Law. Moreover, under the law governing consumer protection actions, Kilian “prevailed” in his lawsuit for purposes of the Lemon Law (see ¶ 46).
The court next addressed Kilian’s remedies under the Lemon Law. Because Kilian had received the refund to which he was entitled, he was not entitled to an amount equal to twice any pecuniary loss. Such a “windfall” was not contemplated by the Lemon Law. “The legislature did not intend that consumers who have already received a proper refund should also recover twice the amount they paid under the lease as pecuniary loss” (¶ 51). Kilian was entitled to his costs and disbursement, which were to be calculated on remand. And because the Lemon Law is a fee-shifting statute, Kilian was also owed his reasonable attorney fees, which were to be determined upon remand (see ¶ 57).
Concurring, Justice Roggensack urged the legislature to require manufacturers to notify a financing institute when a car has been returned under the Lemon Law.
Property Taxes – Hospital Exemption – Doctor’s Offices
Covenant Health Care Sys. Inc. v. City of Wauwatosa, 2011 WI 80 (filed 19 July 2011)
St. Joseph Regional Medical Center Inc. (St. Joseph) operates a large full-service hospital on Chambers Street in the city of Milwaukee. It also operates the St. Joseph Outpatient Clinic five miles away in the city of Wauwatosa. The outpatient clinic provides a broad range of outpatient medical services, including 24-hour urgent care and 24-hour laboratory services; its most frequently provided services include cardiopulmonary, continence and pelvic floor, laboratory, pain management, sleep disorder, women’s health, and wound care services and outpatient surgery, pediatric rehabilitation, physical therapy, and radiology. The clinic provides all levels of emergency room care, although patients with more serious conditions are stabilized and transferred to a different medical facility; the clinic does not provide inpatient care. The St. Joseph hospital and the St. Joseph clinic share an online registration system, and all hospital and patient records are accessible at both locations.
Following a lengthy trial, the circuit court found that St. Joseph embarked on the outpatient clinic project to address a variety of limitations confronting the main hospital, including the need to divert less serious emergencies from the hospital to the clinic. “The circuit court found that the Outpatient Clinic fulfilled the primary purpose of the St. Joseph Chambers Street Hospital in a variety of other ways: freeing up space for outpatient services, delivering services more conveniently and efficiently, creating a single unit to address the special health needs of women throughout their lives, and providing the most modern facilities and equipment for patients, visitors, and staff” (¶ 27).
The issue at the heart of this litigation was whether the outpatient clinic is exempt from paying property taxes to the city of Wauwatosa because the clinic property is used exclusively for the purpose of a hospital. See Wis. Stat. § 70.11(4m)(a). The city denied the exemption, arguing that the clinic is a doctor’s office, not a hospital. The circuit court concluded that the clinic is exempt from taxation because the property is used exclusively for the purposes of a hospital. In a published decision, the court of appeals reversed. See 2010 WI App 125. In a majority decision authored by Justice Gableman, the supreme court reversed the court of appeals.
The majority held that the outpatient clinic is used for the primary purposes of a hospital and therefore is entitled to the property tax exemption. Said the supreme court, “[t]he circuit court concluded that the Outpatient Clinic, as designed, constructed, and operated, addressed limitations and goals that could not be addressed or satisfied within the physical confines of the St. Joseph Chambers Street Hospital. We agree with the circuit court that the Outpatient Clinic effectively serves as a department of the larger St. Joseph Chambers Street Hospital. In light of this, we conclude that the Outpatient Clinic is used exclusively for the purposes of a hospital – the St. Joseph Chambers Street Hospital – and therefore qualifies for the property tax exemption under Wis. Stat. § 70.11(4m)(a)”
The supreme court further held that the plaintiff met its burden of demonstrating that the outpatient clinic is not a doctor’s office. If it were, the facility would not qualify for the tax exemption. “[W]e conclude that [the plaintiff] has met its burden of demonstrating that the Outpatient Clinic is not a doctor’s office. First, physicians practicing at the Outpatient Clinic do not receive variable compensation related to the extent of their services. Second, the Outpatient Clinic physicians do not receive extra compensation for overseeing non-physician staff. Third, the Outpatient Clinic’s bills are generated on the same software system as the bills generated by St. Joseph. Fourth, physicians at the Outpatient Clinic do not have their own offices. Instead, Outpatient Clinic Physicians have shared access to unassigned cubicles. Fifth, the physicians practicing at the Outpatient Clinic do not own or lease the building or equipment – all equipment is the exclusive property of St. Joseph” (¶ 37).
The court also noted that the clinic accepts emergency ambulances and has the capacity to provide all levels of emergency care; typical doctors’ offices have no such advanced emergency care operations (see ¶ 40). Lastly, the court concluded that proximity to the main hospital is irrelevant when considering whether the clinic qualifies as a doctor’s office (see ¶ 43).
Finally, the court concluded that the clinic was not used for a commercial purpose (its primary aim did not involve making a profit but instead was focused on such purposes as diagnosing and treating illnesses, promoting a greater faith-based health care presence, and so on) and that no part of its net earnings inured to the benefit of any shareholder, member, director, or officer within the meaning of section 70.11(4m)(a) (the court held that the term member does not include nonprofit entities like the plaintiff). Findings contrary to those described in this paragraph would have defeated the clinic’s tax exemption.
Chief Justice Abrahamson filed a dissenting opinion in which she agreed with the court of appeals that the plaintiff has not met its burden to prove that the clinic is not “used as a doctor’s office” (¶ 61).
Property Taxes – Assessments
Stupar River LLC v. Town of Linwood, 2011 WI 82 (filed 22 July 2011)
A country club, Stupar River, appealed its 2005 property tax assessment. It purchased the property for about $830,000 in 2001, but the property was assessed at $1.8 million in 2002, which triggered unrelated litigation. In 2005, the property was again valued at $1.8 million. Stupar River objected, and so the town of Linwood Board of Review (the board) conducted an evidentiary hearing and ultimately upheld the 2005 value. Later assessments in 2006 and 2007, however, “adjusted” the value to about $1.4 million. Stupar River claimed the 2006 and 2007 assessments proved that the property was overassessed in 2005. Nonetheless, the circuit court and the court of appeals upheld the board.
The supreme court affirmed the court of appeals in an opinion written by Justice Gableman. The court’s review was limited to whether the board acted according to law when it upheld the 2005 assessment (see ¶ 19). Stupar River pointed to the undulating annual assessments and the language of Wis. Stat. section 70.32(1), which it interpreted as commanding that assessed values must equal a property’s fair market value (see ¶ 20). The board responded that the later downward adjustments were necessitated by “an overall class adjustment” to all commercial properties (see ¶ 21).
“Without question, assessors must base assessments of real property on the property’s fair market value. See Wis. Stat. § 70.32(1). However, as the plain language of the Property Assessment Manual (Manual) makes clear, a property’s fair market value is not synonymous with its assessed value” (¶ 23). Relying on Department of Revenue protocols, the court explained that “a property’s assessed value is based on fair market value but a property’s assessed value is not necessarily equal to its fair market value. It is axiomatic that assessors may assign to taxable property an assessed value of less than 100 percent of the property’s fair market value when applied uniformly. We therefore reject Stupar River’s argument that the 2005 assessment was an overassessment in violation of the plain language of Wis. Stat. § 70.32(1), and conclude that the 2005 assessment was made according to law” (¶ 24). Moreover, the evidence provided reasonable support for the board’s determination.
Excusable Neglect – Direct Action – Corporate Officer – Personal Liability
Casper v. American Int’l S. Ins., 2011 WI 81 (filed 19 July 2011)
In 2003, a commercial truck plowed into the back of a stopped minivan, seriously injuring the minivan’s occupants. The plaintiffs sued the trucking company and others. The circuit court extended the time for one insurer to file its answer, finding “excusable neglect” in the insurer’s claim that the complaint had been “lost in the mail.” It also ruled that the plaintiffs could not bring a direct action against the same insurer because the policy in question had not been delivered or issued for delivery in Wisconsin. Finally, the judge also ruled that a corporate officer for the trucking company could be held personally liable for his negligence related to the accident. In a published decision, the court of appeals affirmed. See 2010 WI App 2. Both sides petitioned the supreme court for review.
The supreme court affirmed in part and reversed in part in a majority opinion authored by Justice Prosser. First, the circuit court did not abuse its discretion in enlarging the time for the dilatory insurer to file its answer. Although cautioning that “courts should be skeptical of glib claims that attribute fault to the United States Postal Service,” the record showed that the insurer’s agents “acted in normal fashion and that their established routine worked previously to provide timely answers to the plaintiffs in this case” (¶ 47). Case law sets “an extremely high bar to reverse excusable neglect determinations,” a threshold that was not met in this case (¶ 48).
Second, the supreme court reversed the court of appeals on the direct-action issue, a decision that compelled it to overrule Kenison v. Wellington Insurance Co., 218 Wis. 2d 700, 582 N.W.2d 69 (Ct. App. 1998). The opinion comprehensively surveys the history of the direct-action statutes from their inception to the present. In overruling Kenison, the court held “only that Wis. Stat. § 632.24 applies to any policy of insurance covering liability, irrespective of whether that policy was delivered or issued for delivery in Wisconsin, so long as the accident or injury occurs in this state” (¶ 80). The court expressly recognized the potential effects on other statutory provisions posed by the parties’ arguments, but it was “not prepared to evaluate all the ramifications of such a determination” (¶ 79).
Third, the supreme court addressed whether a corporate officer could be personally liable for his or her negligent acts. The defendant argued that personal liability was limited to a corporate officer’s intentional conduct. The corporate officer, Wenham, allegedly played a role in approving the arduous, arguably unlawful route driven by the drugged truck driver who injured the plaintiffs. The supreme court held that “while a corporate officer may be liable in some situations for non-intentional torts committed in the scope of his employment, in this instance Wenham’s actions are too remote to provide a basis for personal liability” (¶ 105). The court also clarified that “the business judgment rule does not necessarily immunize a corporate executive from liability for negligence. Nonetheless, the very existence of a business judgment rule reflects public policy that corporate officers are allowed some latitude to make wrong decisions without subjecting themselves to personal liability” (¶ 102).
Justice Bradley, joined by Chief Justice Abrahamson, concurred in the majority’s decision on the first two issues but parted ways on the third. In her view, the policy-based “remoteness” analysis was premature because “the facts are not sufficiently developed at this stage” of the proceedings (¶ 107). “The majority foregoes factual development and short-circuits a jury determination” (¶ 116) regarding the role played by Wenham’s alleged negligence in the accident (see ¶ 123).
Laying Out, Altering, or Discontinuing Public Highways Crossing Municipal Lines – Decisions Made by Town Boards “Acting Together” Pursuant to Wis. Stat. Section 82.21(2)
Dawson v. Town of Jackson, 2011 WI 77 (filed 19 July 2011)
The Dawsons applied to the town boards of Cedarburg and Jackson to vacate part of a jointly owned public highway, Wausaukee Road, which is surrounded by land the Dawsons own. The two town boards held a joint meeting to consider the Dawsons’ application. The meeting was attended by three of five Cedarburg board members and all five Jackson board members. At the meeting, the five Jackson board members voted in favor of the application to discontinue the road, but the three Cedarburg members in attendance voted against it. Following the meeting, Jackson recorded a highway order to vacate the road but Cedarburg declined to issue a similar order. The Dawsons sought a declaratory judgment under Wis. Stat. section 806.04 that the joint action of the town boards resulted in discontinuance of the road. The circuit court granted summary judgment to the Dawsons. In a published decision, the court of appeals affirmed. See 2010 WI App 24. In a majority decision authored by Justice Prosser, the supreme court reversed.
Section 82.21 of the Wisconsin Statutes establishes procedures for laying out, altering, or discontinuing a highway located along the boundary line between a town and another municipality or a highway that traverses such boundaries. On proper application, the governing bodies of the municipalities, “acting together,” shall proceed to determine the matter. At the heart of this appeal was the meaning of acting together. The circuit court and the court of appeals concluded that under section 82.21(2), acting together required that all votes at the joint meeting be counted in the aggregate, resulting in discontinuance of the highway because five of the eight participants in the joint meeting voted in favor of the discontinuance.
The supreme court disagreed and concluded as follows: “The phrase ‘acting together’ does not require that the separate votes taken by two governing bodies in deciding an application to lay out, alter, or discontinue a public highway on or across municipal lines be counted in the aggregate as if the two bodies voted as one.… § 82.21(2) expects governing bodies such as town boards to come together and cooperate to resolve a joint application, but it does not mandate the creation of a combined board. The approval of both governing bodies is necessary to approve a joint application like the one from the Dawsons” (¶ 5) (emphasis added).
The majority further held that “§ 82.15 contemplates certiorari review under Wis. Stat. § 68.13 as the prescribed method for review of ‘a highway order, or a refusal to issue such an order.’ Section 68.13 establishes both the procedure and a time limit for seeking review of a highway order under most circumstances. Inasmuch as the Dawsons were seeking a determination that Cedarburg’s refusal to issue a highway order was not in accordance with law, they should have proceeded under Wis. Stat. § 68.13” (¶ 77) – not under section 806.04 (declaratory judgment).
Justice Roggensack filed a concurring opinion. Chief Justice Abrahamson filed a dissent in which she concluded, among other things, that the votes of the town boards at the joint meeting should have been aggregated (see ¶ 81).
Sexually Violent Persons
Release – Burden of Proof
State v. West, 2011 WI 83 (filed 26 July 2011); State v. Nordberg, 2011 WI 84 (filed 26 July 2011)
Both West and Nordberg were committed as sexually violent persons pursuant to Wis. Stat. chapter 980. Both petitioned unsuccessfully for supervised release. On appeal, both men unsuccessfully contended that chapter 980 and the Wisconsin and U.S. Constitutions place the burden of proof on the state to show that they are not entitled to supervised release. The supreme court affirmed in a majority opinion written by Justice Prosser. [Editors’ Note: Because the opinion in West also disposed of Nordberg’s appeal, only the West case will be summarized here.]
In 2005, the legislature amended chapter 980’s procedures for supervised release. Under the prior statute, the state bore the burden of proving that supervised release was inappropriate. “The issue presented is whether the amendment to Wis. Stat. § 980.08(4) has changed the burden of proof in a supervised release petition, and if so, to whom has it been shifted and how?” (¶ 51). “Prior § 980.08(4)(b) made it clear that it was the State that had to overcome the presumption that a petition would be granted. By contrast, amended § 980.08(4)(cg) sets forth a presumption that supervised release may not be authorized unless, considering all the evidence, ‘the court finds that all of the following criteria are met.’ (Emphasis added.) While this statement does not explicitly address who must meet these criteria, or produce evidence for the court, the list of criteria required for a grant of supervised release makes the assignment of the burden of proof’ unmistakable” (¶¶ 57-58).
The court held that the burden now falls on the person seeking supervised release. “All five criteria are stated in the affirmative. All five criteria are statutory prerequisites to supervised release, and must be supported by evidence before the court. Most important, all five criteria weigh in favor of release, and are therefore in the committed petitioner’s best interests to prove. A plain reading of the statute’s presumption, coupled with these five criteria, unambiguously assigns the burden of proof (that is, the burden of producing the requisite evidence) to the committed individual seeking supervised release” (¶ 59). The opinion discusses each of the five factors.
The court then took up West’s constitutional challenges. It held that by placing the burden on the person seeking supervised release, the statute did not violate either the due process or the equal protection clause of the U.S. or Wisconsin Constitution.
Justice Bradley, joined by Chief Justice Abrahamson, dissented on the ground that the majority’s opinion unnecessarily “pushes chapter 980 one step closer to a punitive scheme” that prior case law had rejected (¶ 104). “Rather than adhering to the statutory text, the majority interprets legislative silence as unambiguous intent to place the burden of persuasion on the committed person. It then exacerbates any constitutional infirmities such an interpretation may create by contending that, based on public policy, the burden on the committed person is clear and convincing evidence” (¶ 103).
Juror Bias – Appellate Review
State v. Funk, 2011 WI 62 (filed 8 July 2011)
A jury convicted Funk of sexually assaulting a child. During postverdict proceedings, the trial judge learned that one juror, Tanya G., had herself been a sexual assault victim on two different occasions. The trial judge vacated the verdict, ruling that the juror was biased, subjectively and objectively (see ¶ 21). The court of appeals affirmed in an unpublished decision.
The supreme court reversed the court of appeals in a majority opinion authored by Justice Roggensack. Although the main issue was the juror’s bias, the court confronted three “sub-issues”: “(1) whether Tanya G. failed to respond to a material question during voir dire, (2) whether the circuit court’s finding that Tanya G. was subjectively biased against Funk was clearly erroneous, and (3) whether, as a matter of law, a reasonable judge could have concluded that a reasonable person in Tanya G.’s position could not be impartial, and therefore, Tanya G. was objectively biased against Funk” (¶ 1).
First, Tanya G. had not responded to a material question during voir dire when asked if anyone on the jury panel had ever testified in a criminal case (see ¶ 42). The opinion delineates what constitutes a “material” voir dire question, a category that includes “follow-up questions that would likely have been asked had the juror answered the asked question correctly” (¶ 35). The analysis resurrects an approach used in State v. Wyss, 124 Wis. 2d 681, 370 N.W.2d 745 (1985), which predated the court’s more recent assessment of juror bias in light of the inadequacies of earlier case law. (The majority and the dissent sparred over whether Wyss was overruled by the later cases. See ¶ 39 n.18.)
Despite Tanya G.’s failure to respond to a material question, the record did not support a finding that she was subjectively or objectively biased. The trial judge’s determination that she was subjectively biased turned on a question she was never asked, namely, whether anyone on the jury panel had been sexually assaulted (see ¶ 48). For similar reasons, Tanya G. could not be found to be objectively biased. “In sum, jurors are presumed impartial, and Funk had the burden of rebutting this presumption and proving Tanya G.’s bias in this case.… [T]he questions asked of Tanya G. were ‘so inartfully posed that Tanya G.’s non-answers cannot reasonably be used to support a finding of objective bias.’ … As such, Funk has not met his burden because there is no proof that a reasonable juror in Tanya G.’s position could not be impartial. Without such proof, the only basis on which we could conclude that she was objectively biased is to conclude she was per se biased against Funk. Delgado [State v. Delgado, 223 Wis. 2d 270, 558 N.W.2d 1 (1999)] forbids such a per se bias rule based solely on having been the victim of sexual assault…. Consequently, we hold that Funk has not met his burden to prove that Tanya G. was objectively biased.… Therefore, the circuit court erred as a matter of law in concluding that a reasonable person in Tanya G.’s position could not be impartial” (¶ 63).
Dissenting, Chief Justice Abrahamson, who also joined Justice Bradley’s dissent, wrote separately to emphasize that a trial judge’s finding of subjective juror bias is entitled to greater deference on appeal than a finding of objective bias.
Justice Bradley’s dissent emphasized that the approach to juror bias represented by Wyss had been discarded by later case law because of its inadequacies (see ¶ 86). The majority’s approach “resurrects old standards” (¶ 97), blurs the distinction between subjective and objective bias (see ¶ 100), and gives inadequate deference to the circuit court (see ¶ 119).
Injured Employees – Rehiring
deBoer Transp. Inc. v. Swenson, 2011 WI 64 (filed 12 July 2011)
A truck driver, Swenson, suffered a work-related injury for which he was compensated. When he was cleared to return to work, Swenson satisfied all the trucking company’s conditions except for a “check-ride,” a safety measure that required he ride with another driver-trainer for an extended period. Swenson claimed he could not meet this condition because he cared for his elderly father and hiring a nurse in his absence would be too costly. The company would not pay for the nurse or give way on the check-ride requirement, and it then fired Swenson. The Labor and Industry Review Commission (LIRC) ruled in Swenson’s favor, finding that the company unreasonably refused to rehire him and that the check-ride condition was a pretext. The circuit court affirmed LIRC, but the court of appeals reversed on the ground that LIRC had incorrectly interpreted the statute governing reasonable cause. See 2010 WI App 54.
The supreme court affirmed the court of appeals in a majority opinion written by Justice Roggensack. LIRC’s decision, said the court, did not “withstand any level of deference” because it misconstrued the law (¶ 36). The pertinent statute, Wis. Stat. section 102.35(3), requires employers to rehire injured employees absent “reasonable cause.” Case law sets forth the relative burdens between employee and employer, although the supreme court noted a “potential inconsistency in the case law with regard to the third element of the prima facie case” (¶ 40), specifically whether it must be shown that the injury was the reason for the denial of rehiring (see ¶ 41). The court, however, left this issue “for another day” (¶ 42) because Swenson’s employer had reasonable cause. Section 102.35(3) “does not contain a requirement that employers change their legitimate and universally applied business policies to meet the personal obligations of their employees” (¶ 45). Put differently, the employer was not obligated to “accommodate” Swenson in the way that it must accommodate a disabled employee (see ¶ 52).
The court also found unsupported by the evidence LIRC’s finding that the check-ride requirement was only a pretext. “[A] primary reason LIRC found pretext was that deBoer failed to present evidence that it would have been an unreasonable burden to adjust to Swenson’s personal obligations. As discussed above, LIRC’s focus on deBoer’s failure to change its check-ride policy to assist Swenson in meeting his personal obligations was based on an erroneous interpretation of Wis. Stat. § 102.35(3). Consequently, deBoer’s failure to present evidence that it would have been an unreasonable burden to change its check-ride policy for the sake of Swenson’s personal care obligations cannot be used as a rationale for LIRC’s pretext finding” (¶ 56).
Justice Bradley dissented, joined by Chief Justice Abrahamson, on grounds that the majority’s “elaborate gymnastics” (¶ 67) failed to accord LIRC’s findings adequate deference and that sufficient evidence supported LIRC’s conclusions.