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    Court of Appeals Digest

    In this column, Profs. Daniel D. Blinka and Thomas J. Hammer summarize select published opinions of the Wisconsin Court of Appeals. Full-text decisions are linked below.

    Daniel D. Blinka & Thomas J. Hammer

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    Attorney Fees

    Wisconsin Equal Access to Justice Act – Wis. Stat. Section 814.245

    State v. Detert-Moriarty, 2017 WI App 2 (filed 22 Dec. 2016) (ordered published 26 Jan. 2017)

    HOLDING: The Wisconsin Equal Access to Justice Act (WEAJA) did not apply in this case because the prosecution of the defendant was in the name of the state of Wisconsin.

    SUMMARY: Defendant Detert-Moriarty was participating in the Solidarity Sing-Along in the State Capitol rotunda when the Capitol Police, a division of the Wisconsin Department of Administration (DOA), cited her for violating an emergency rule promulgated by the DOA. This administrative rule prohibited participation in unpermitted events in the State Capitol. The citation identified the “State of Wisconsin” as the plaintiff and Detert-Moriarty as the defendant.

    The defendant contested the citation, and the case was tried to the circuit court. The DOA, pursuant to Wis. Stat. section 16.846(2), sent the Wisconsin Department of Justice (DOJ) a request to prosecute the citation in the name of the DOA. The DOJ accepted the DOA’s request. The DOJ thereafter appeared in circuit court on behalf of the state and prosecuted the forfeiture action against the defendant. The circuit court dismissed the action on the ground that the administrative rule was unconstitutional.

    Daniel D. Blinkaedu daniel.blinka marquette Prof. Daniel D. Blinka, U.W. 1978, is a professor of law at Marquette University Law School, Milwaukee.

    Thomas J. Hammeredu thomas.hammer marquette Prof. Thomas J. Hammer, Marquette 1975, is a law professor and Director of Clinical Education at Marquette University Law School, Milwaukee.

    The defendant later brought a motion pursuant to Wis. Stat. section 814.245 (the WEAJA) for the DOA to pay her attorney fees and costs on the basis that she was the prevailing party in the forfeiture action. The circuit court denied the motion. In a decision authored by Judge Higginbotham, the court of appeals affirmed.

    Section 814.245(3) of the Wisconsin Statutes provides that the court shall award costs – attorney fees and expenses – to a “prevailing party in any action by a state agency.” The sole issue on appeal was whether this forfeiture action was an action “by a state agency,” within the meaning of Wis. Stat. section 814.245(3), for purposes of determining whether the defendant was entitled to attorney fees under the WEAJA.

    The appellate court concluded that Wis. Stat. section 814.245 did not apply to this forfeiture action because the WEAJA limits the award of attorney fees and costs to a prevailing party in an action brought by “a state agency.” This action was not brought by a state agency, but rather by the state of Wisconsin, as required by Wis. Stat. section 778.02, which provides in pertinent part that “every such forfeiture action shall be in the name of the state of Wisconsin” (¶ 2).

    Criminal Procedure

    Sentencing – Expungement – Exercise of Judicial Discretion

    State v. Helmbrecht, 2017 WI App 5 (filed 20 Dec. 2016) (ordered published 26 Jan. 2017)

    HOLDING: In assessing whether to grant expungement, the sentencing court should set forth in the record the facts it considered and the rationale underlying its decision for determining whether to grant or deny expungement.

    SUMMARY: Wisconsin Statutes section 973.015(1m)(a)1. authorizes the court to expunge certain criminal convictions of an offender under certain conditions if “the court determines the person will benefit and society will not be harmed by this disposition.” In a decision authored by Judge Kessler, the court of appeals detailed the kind of record a circuit judge should make when deciding whether to authorize expungement.

    The expungement statute “clearly contemplates the exercise of discretion by the sentencing court and puts forth two factors for the sentencing court to utilize in exercising that discretion after it determines whether a defendant is indeed eligible for expunction: (1) whether the person will benefit from expungement and (2) whether society will be harmed by the expungement” (¶ 11).

    The appellate court held that “in assessing whether to grant expungement, the sentencing court should set forth in the record the facts it considered and the rationale underlying its decision for deciding whether to grant or deny expungement. Such is the exercise of discretion contemplated both by the statute and our supreme court’s pronouncement in [State v.] Gallion, 270 Wis. 2d 535, ¶ 19 (The exercise of discretion contemplates a process of reasoning: ‘This process must depend on facts that are of record or that are reasonably derived by inference from the record and a conclusion based on a logical rationale founded upon proper legal standards.’)” (¶ 12).

    “Thus, in exercising discretion, the sentencing court must do something more than simply state whether a defendant will benefit from expungement and that society will or will not be harmed. We have repeatedly held that the utterance of ‘magic words’ is not the equivalent of providing a logical rationale. Rather, the sentencing record should reflect the process of reasoning articulated in Gallion” (id.) (citation omitted in original).

    Defendant’s Presence at Trial – Wis. Stat. Section 971.04 – Waiver

    State v. Washington, 2017 WI App 6 (filed 21 Dec. 2016) (ordered published 26 Jan. 2017)

    HOLDING: The defendant waived his statutory right to be present at trial by behaving in a disruptive manner.

    SUMMARY: The defendant was charged with burglary and obstructing an officer. When his third court-appointed attorney asked to withdraw because of “difficulty communicating,” the judge refused based on the defendant’s “manipulation.” During trial, the defendant’s disruptive behavior led to his removal from the courtroom. He later refused several invitations from the judge to return. The jury convicted him.

    The court of appeals affirmed the convictions in an opinion authored by Judge Reilly. The court held that defendants may intentionally and voluntarily relinquish both their constitutional right and their statutory right under Wis. Stat. section 971.04 to be present at trial (see ¶ 8). The defendant conceded that the constitutional right could be waived (see ¶ 12) but contended that the statutory right could not be waived.

    “In this case, Washington knowingly and voluntarily abandoned his right under Wis. Stat. § 971.04 to be present during the trial proceedings. Washington did so after being present on the first day of trial – initially present at the beginning of the trial proceedings and on the day the jury selection began” (¶ 15). He was “periodically advised” about the trial and given opportunities to return (id.). “We commend the trial court for the steps it took to ensure that the jurors were not unduly prejudiced by Washington’s absence from the courtroom” (¶ 19).

    Insurance

    Housing Discrimination – Summary Judgment – “Occurrence”

    Jones v. Baecker, 2017 WI App 3 (filed 28 Dec. 2016) (ordered published 26 Jan. 2017)

    HOLDING: The trial court properly granted summary judgment in favor of the defendant, dismissing claims sounding in race and family-status discrimination; the trial court erred, however, when it found that the discrimination claims triggered the insurer’s duty to defend.

    SUMMARY: The plaintiffs, a black man and a white woman who are married to each other, sued the defendant after he declined to rent an apartment to them. The defendant landlord claimed that his concern was the size of the family (the couple plus children). Granting summary judgment to the landlord, the court found no law prohibiting a landlord from considering the family’s size, although the judge also noted the landlord’s “rude, crude, boorish and perhaps even racist” comments (¶ 21). The trial court also found that the landlord’s insurer had a duty to defend under a general business-liability policy.

    The court of appeals affirmed in part and reversed in part in an opinion authored by Judge Hruz. Wisconsin law prohibits discrimination in housing based on race and family status. Although the landlord identified one plaintiff as an African American, this did not raise an issue of fact on race discrimination grounds (see ¶ 36).

    The landlord’s “comments, considered in their totality and in the light most favorable to the Joneses, are simply too ambiguous to establish a triable issue regarding racial discrimination, regardless of their timing” (¶ 37). The court of appeals also declined to remand the case for further discovery on the race issue.

    Nor was there sufficient evidence of family-status discrimination. “By virtue of this being a direct-evidence disparate treatment case, the Joneses were required to present evidence that Baecker intentionally discriminated against them based on the mere presence of children in the household. The Joneses have never explained how Baecker’s imposition of a four-person occupancy limit evidences intentional discrimination against persons with children – a policy that would permit leasing the unit to, for example, a family consisting of two parents and two children” (¶ 54).

    Turning to the duty to defend issue, the court of appeals reversed the trial court’s declaration that the insurer’s duty was triggered by the discrimination claims. “We conclude the complaint here does not allege an ‘occurrence’ triggering West Bend’s defense obligations. Baecker’s alleged acts in this case – his refusal to rent to the Joneses on the bases of race and family status – were made volitionally. Further, assuming the truth of the complaint’s allegations, Baecker intended to deny the Joneses housing on these unlawful bases. As a result, there was no ‘occurrence’ under the relevant case law” (¶ 67).

    Taxation

    Wisconsin Sales and Use Tax – Wis. Stat. Section 77.52(2)(a)11.

    Tetra Tech EC Inc. v. Wisconsin Dep’t of Revenue, 2017 WI App 4 (filed 28 Dec. 2016) (ordered published 26 Jan. 2017)

    HOLDINGS: 1) The petitioners’ activities constituted the processing of tangible personal property and were thus a service subject to Wisconsin’s sales and use tax. 2) Wisconsin Statutes section 77.59(3) did not preclude the Department of Revenue (DOR) from raising an alternative legal basis for taxation before the Tax Appeals Commission that was not first asserted in the DOR’s written notices of tax determination to the petitioners.

    SUMMARY: In 2007, the Environmental Protection Agency ordered several Wisconsin paper companies to remediate the environmental impact caused by polychlorinated biphenyls (PCBs) the companies had previously released into the Fox River. In response, the paper companies created Fox River Remediation. Fox River Remediation hired Tetra Tech as general contractor to perform the remediation. Tetra Tech, in turn, retained SDI as one of its subcontractors. SDI was hired to separate into constituent components the material dredged from the Fox River so that those components could be delivered to, and disposed of by, Tetra Tech.

    In 2010, the DOR conducted a field audit of Fox River Remediation and Tetra Tech. After completing its field audit, the DOR issued written notices to both entities. The DOR concluded that Tetra Tech owed sales tax on the portion of its sale of remediation services to Fox River Remediation that represented SDI’s activities. The DOR also concluded that Fox River Remediation owed use tax on the portion of its purchase of remediation services from Tetra Tech that represented SDI’s activities. In its written notices to both entities, the DOR concluded that SDI’s activities were taxable under Wis. Stat. section 77.52(2)(a)10.

    Fox River Remediation and Tetra Tech petitioned the Tax Appeals Commission to review the DOR’s determinations. The DOR argued that SDI’s activities were taxable under Wis. Stat. section 77.52(2)(a)10. or, alternatively, as “processing” of tangible personal property under Wis. Stat. section 77.52(2)(a)11. The commission agreed with the alternative argument. The commission also rejected Fox River Remediation and Tetra Tech’s argument that Wis. Stat. section 77.59(3)5. precluded the DOR from raising Wis. Stat. section 77.52(2)(a)11. as an alternative legal basis for taxation before the commission even though it was not first asserted in the DOR’s written notices of tax determination. The circuit court affirmed the commission’s order.

    In a decision authored by Judge Seidl, the court of appeals affirmed. Concluding that the commission’s legal conclusions are entitled to great-weight deference (see ¶ 12), the court of appeals held that the commission reasonably concluded that SDI’s activities constituted “processing” of tangible personal property under Wis. Stat. section 77.52(2)(a)11. and were therefore subject to Wisconsin’s retail sales and use tax (see ¶¶ 17-24). The appellate court also found that the commission reasonably concluded that Wis. Stat. section 77.59(3) did not preclude the DOR from raising Wis. Stat. section 77.52(2)(a)11. before the commission as an alternative legal basis for taxation simply because it was not first asserted in the DOR’s written notices of tax determination to Fox River Remediation and Tetra Tech (see ¶¶ 25-26).