Vol. 85, No. 4, April 2012
Judicial Estoppel – Summary Judgment – Forfeiture Actions
State v. Ryan, 2012 WI 16 (filed 28 Feb. 2012)
The state brought this forfeiture action against Ryan, alleging that he was responsible for a sunken barge in a river. The circuit court ruled that Ryan was judicially estopped from asserting that he did not own the barge, based on earlier representations he had made. It also granted summary judgment against Ryan. In a published decision, the court of appeals affirmed. See 2011 WI App 21.
The supreme court reversed in an opinion authored by Justice Bradley. First, judicial estoppel was improperly applied in this case. "For judicial estoppel to be available, three elements must be satisfied: (1) the later position must be clearly inconsistent with the earlier position; (2) the facts at issue should be the same in both cases; and (3) the party to be estopped must have convinced the first court to adopt its position" (¶ 33). Based on its close reading of three documents (see ¶ 35), the court held that the first and third elements were not satisfied. Ryan had not previously taken a position that was "clearly inconsistent" with his denial of ownership in this case (for example, one document had no bearing in an earlier proceeding, another was ambiguous, and there was no evidence that Ryan had taken any position on ownership in that earlier proceeding). Nor was there evidence that Ryan had "convinced the first court" that he or his corporations owned the barge (¶44).
Second, the court held, despite precedent to the contrary, that summary judgment is inappropriate in a forfeiture action (see ¶ 46). The plain language of Wis. Stat. section 23.69 does not expressly permit summary judgment proceedings. Moreover, the goals of "consistency and predictability" (¶ 68) are incompatible with the use of summary judgment in forfeiture actions. "It may be true that, due to the vagaries of how this case actually proceeded in the circuit court, the State's summons and complaint, combined with Ryan's written answer and the submitted affidavits, would be sufficient for the circuit court to conduct the established summary judgment methodology. In many cases, however, summary judgment methodology could not be employed, either because the action was commenced with a citation, or because the defendant appeared in court and entered a plea without filing a written answer" (¶ 67).
Justice Ziegler, joined by Justice Gableman, concurred. The concurrence agreed that judicial estoppel had been erroneously applied but contended that "summary judgment is permitted in chapter 30 forfeiture actions such as this one, in which the action is commenced by a complaint and summons and the defendant appears by filing an answer to the complaint" (¶ 74). Justice Prosser did not participate in this decision.
Violation of Telecommunication Services Statute – Wis. Stat. section 100.207 – "Cramming" – Common Law Voluntary Payment Doctrine No Defense
MBS-Certified Public Accountants LLC v. Wisconsin Bell Inc., 2012 WI 15 (filed 24 Feb. 2012)
The allegations at issue in this case relate to an illegal telecommunications practice called cramming. According to the plaintiffs, cramming is a deceptive billing scheme in which telecommunications companies insert relatively small, unauthorized charges into customers' telephone bills with the expectation the customers will unwittingly pay the unauthorized charges (see ¶ 6). The statute at the core of the court's decision is Wis. Stat. section 100.207, which prohibits making false, misleading, or deceptive statements with respect to the provision of telecommunications service and further prohibits billing a customer for any telecommunications service that the customer did not affirmatively order.
The issue before the supreme court was whether the common law voluntary-payment doctrine is a defense to claims under section 100.207. Under that doctrine, a party cannot bring an action to recover payments that were paid voluntarily, with full knowledge of the material facts, and absent fraud or wrongful conduct inducing payment (see ¶ 12). Determining the viability of a voluntary-payment-doctrine defense is ultimately a matter of statutory interpretation. "It must be decided whether the legislature intended the common law defense to be applied to bar monetary relief under the [statute]" (¶ 26).
In a majority decision authored by Justice Bradley, the supreme court first concluded that "no Wisconsin court has addressed whether the legislature intended the voluntary payment doctrine to be a viable defense against any cause of action created by a statute" (¶ 3). It further held that "[a]pplication of the common law voluntary payment doctrine would undermine the manifest purposes of Wis. Stat. § 100.207" (¶ 4), those purposes being to provide remedies for people who are adversely affected by cramming and to deter that practice (see ¶ 53). "Under these circumstances, the conflict between the statute's manifest purpose and the common law defense leaves no doubt that the legislature intended that the common law defense should not be applied to bar claims under the statute" (¶ 4).
Justice Prosser filed an opinion concurring in part and dissenting in part that was joined by Justice Gableman. Chief Justice Abrahamson did not participate in this decision.
Sentencing – Probation – Power of Court to Reduce Probation Term
State v. Dowdy, 2012 WI 12 (filed 14 Feb. 2012)
Section 973.09(3)(a) of the Wisconsin Statutes (2009-10) provides that "prior to the expiration of any probation period, the court, for cause and by order, may extend probation for a stated period or modify the terms and conditions thereof." The issue in this case was whether this statute grants a circuit court authority to reduce the length of the probationary period. In a published decision, the court of appeals concluded that a circuit court has neither statutory nor inherent authority to order the reduction of a probationary term. See 2010 WI App 158. In a majority decision authored by Justice Ziegler, the supreme court affirmed the court of appeals.
The majority concluded that "Wis. Stat. § 973.09(3)(a) does not grant a circuit court authority to reduce the length of probation. Rather, the plain language of § 973.09(3)(a) grants a circuit court authority only to 'extend probation for a stated period' or to 'modify the terms and conditions' of probation. When subsection (3)(a) is read in context, it is clear that the authority to 'modify the terms and conditions' of probation does not include the authority to reduce the length of probation" (¶ 42).
Accordingly, the circuit court erred as a matter of law when it relied on section 973.09(3)(a) to reduce the length of the defendant's probation. On that basis, the supreme court affirmed the court of appeals' decision. The supreme court declined to decide whether a circuit court has inherent authority to reduce the length of probation, and if so, what standard applies (see ¶ 5).
[Editors' Note: In a footnote, the supreme court observed that "on July 19, 2011, after we received the parties' briefs in the instant case, the legislature recreated Wis. Stat. § 973.09(3)(d) and this time successfully added language expressly granting a circuit court authority to discharge a probationer before the expiration of his or her probation period. See 2011 Wis. Act 38, §§ 93b, 93c. The new statute went into effect on August 3, 2011 and lists six requirements that must be met in order for a circuit court to discharge a probationer" (¶ 42 n. 8) (citations omitted).]
Chief Justice Abrahamson filed a dissenting opinion. Justice Prosser did not participate in this case.
UIM – Collateral Source – Arbitration Awards
Orlowski v. State Farm Mut. Auto., 2012 WI 21 (filed 7 March 2012)
Orlowski was injured in an automobile collision with an underinsured motorist. After exhausting the other driver's coverage, she filed a claim with her underinsured motorist (UIM) insurer, State Farm. The claim was arbitrated, and the panel awarded Orlowski approximately $11,500. Based on its reading of Heritage Mutual Insurance Co. v. Graser, 2002 WI App 125, 254 Wis. 2d 851, 647 N.W.2d 385, the panel refused to award Orlowski an additional $61,000 in medical expenses that had been written off by her medical provider. The panel interpreted Graser as barring the application of the collateral source rule to UIM coverage. The circuit court, however, ruled that the panel had misconstrued Graser and modified the arbitration award by giving Orlowski the additional $61,000. On appeal, the court of appeals certified the case to the supreme court, which granted certification.
The supreme court unanimously affirmed in an opinion authored by Justice Crooks. The supreme court overruled Graser "to the extent that it created a blanket rule that the collateral source rule does not apply to an injured party's UIM action" (¶ 28). The opinion canvasses the collateral-source doctrine but also addresses subrogation issues, which arose in Graser. The supreme court held "that the policy distinction between negligence and UIM cases upon which the court of appeals relied does not justify diverging from our case law and limiting the collateral source rule. The holding in Graser that was addressed to the specific factual scenario in that case is not implicated here, where the dispute centers on written-off medical expenses and not a waived subrogation right. The potentially troublesome language in Graser is the court of appeals' sweeping statement that 'the collateral source rule, which finds its genesis in tort law, is inapplicable to claims made by an insured under his or her UIM policy.' This holding is at odds with Wisconsin law on damages, the collateral source rule, and the purpose and function of UIM coverage" (¶ 23) (footnote omitted).
The supreme court also upheld the circuit court's revision of the arbitration award to provide Orlowski her "full reasonable value of medical expenses" (¶ 29). The panel erroneously rested its determination on Graser despite "extensive precedent" about the collateral-source rule and medical expenses (see ¶ 36).
"In this case, the arbitrators exceeded their authority and manifestly disregarded the law without a reasonable foundation by not fully reviewing and applying this court's decisions on the collateral source rule. The panel's seemingly exclusive reliance on Graser, resulting in a failure to award written-off medical expenses, cannot be reconciled with its obligation to answer the questions submitted to the arbitration panel that required it to examine tort law on the collateral source rule and medical damages. Given our case law and the questions submitted to the panel, there is no reasonable foundation upon which the arbitrators could have failed to include written-off medical expenses in the award. Therefore, the award of the arbitration panel must be modified because the panel exceeded its authority and manifestly disregarded the law when it failed to award the reasonable value of medical services without a reasonable legal basis" (¶ 39).
Police Power – Zoning Ordinances
Zwiefelhofer v. Town of Cooks Valley, 2012 WI 7 (filed 8 Feb. 2012)
The plaintiffs brought a declaratory judgment action against a town, seeking to declare the town's nonmetallic-mining ordinance invalid on grounds that it had not been approved by the county. The question came down to whether the ordinance was a zoning regulation, which required county approval, or whether it fell within the town's police powers, in which case it did not. The circuit court granted summary judgment in favor of the plaintiffs. The town appealed, and the court of appeals certified the case to the supreme court, which granted certification.
The supreme court unanimously reversed the circuit court in an opinion authored by Chief Justice Abrahamson. "The appeal presents a single issue: Is the Town's Nonmetallic Mining Ordinance a zoning ordinance?" (¶ 4).
The town had adopted village powers in 2001, seven years before enacting this ordinance. "[B]y virtue of the statutes and the Wisconsin Constitution, the Town possesses the full panoply of powers enjoyed by villages, including police power and the more specific zoning power. There is an important limitation on the Town's zoning authority. If a town is located in a county that has enacted countywide zoning pursuant to Wis. Stat. § 59.69, the town may not adopt a zoning ordinance of its own unless it is approved by the county board" (¶¶ 28-29). Because the county board had not approved the ordinance, it was invalid if it was a zoning ordinance, which is a "subset of the police power" (¶ 31).
Case law and secondary authority reveal that "identifying an ordinance as a zoning ordinance is not necessarily a simple task" (¶ 33). The court canvassed a nonexhaustive list of characteristics "traditionally present in a zoning ordinance" (¶¶ 35-43). The ordinance in question carried some characteristics of zoning ordinances but had others that were not. In the end, however, the "fundamental differences" overwhelmed whatever similarities the ordinance shared with zoning ordinances (¶ 80). In so concluding, the supreme court expressly adopted a "functional approach," eschewing any "bright-line rule" that identifies zoning ordinances (¶ 8). It cautioned that "no single characteristic is dispositive" (¶ 9).
Justice Prosser did not participate in this decision.