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  • Wisconsin Lawyer
    March 31, 2008

    Supreme Court Digest

    Wisconsin Lawyer
    Vol. 76, No. 8, August 2003

    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, 1103 W. Wisconsin Ave., Milwaukee, WI 53233, (414) 288-7090.

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

    Appellate Procedure

    Motions to Reconsider "New Issue"

    State v. Edwards, 2003 WI 68 (filed 27 June 2003)

    The circuit court dismissed criminal charges against the defendant because the state had not brought its prosecution within the statutory time limit. The state filed a motion to reconsider, which asked the court to specify whether the dismissal was with or without prejudice. The trial court denied the motion, ruling that its original judgment was with prejudice. The state then appealed, but the court of appeals dismissed the appeal on the ground that the state's motion to reconsider had not raised a "new issue" that was distinct from the original judgment.

    The supreme court, in an opinion written by Justice Bablitch, reversed. The sole issue was whether the state's motion to reconsider raised a "new issue" that had not been disposed of by the original judgment or order (¶8). Wisconsin courts have "liberally applied" the new issue test. "The State's motion for reconsideration requested that the circuit court specify whether the dismissal was with or without prejudice. It was not clear from the September 5th hearing whether the dismissal was with prejudice; consequently, the issue was not 'disposed of' in the original judgment. Only after the October 23, 2001 hearing on the State's motion for reconsideration was it clear that the dismissal was with prejudice. Therefore, since the motion for reconsideration raised a new issue, the State may appeal the denial of its motion for reconsideration to the court of appeals" (¶13).

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    Civil Procedure

    Personal Jurisdiction - Service of Process on Bodies Politic Under Wis. Stat. Section 801.11(4)(a) and (b)

    Hagen v. City of Milwaukee Employees' Retirement Sys. Annuity & Pension Bd., 2003 WI 56 (filed 18 June 2003)

    The plaintiff filed a summons and complaint against the city of Milwaukee Employees' Retirement System Annuity and Pension Board (MERS) seeking review of MERS's decision to terminate his disability benefits. A private process server went to the offices of MERS at the Milwaukee City Hall to serve MERS with legal process. A person in the office informed the process server that the summons and complaint had to be served at the city clerk's office. The process server then went to the city clerk's office, where he served the papers. A staff assistant in the office accepted service.

    MERS is a separate political body from the city of Milwaukee. The city clerk's office accepts service of process for the city of Milwaukee only, not for any other municipal entity. Thus, MERS was never served with the summons and complaint.

    MERS moved for summary judgment on the ground that the court lacked personal jurisdiction due to the improper service. The circuit court granted the motion, and the court of appeals affirmed the circuit court.

    In a unanimous decision authored by Justice Sykes, the supreme court affirmed the court of appeals. It held that a circuit court cannot acquire personal jurisdiction over a defendant when the plaintiff does not serve the summons and complaint on the defendant but instead mistakenly serves a nonparty in the same building, allegedly after having been directed to do so by a person in the defendant's office.

    Service on a body politic like MERS requires service on an officer, director, or managing agent. In lieu thereof, service may be accomplished by leaving a copy of the process with the person who is apparently in charge of the office of such officer, director, or managing agent. See Wis. Stat. § 801.11(4)(a), (b). The statute does not allow for substitute service on a separate and distinct nonparty political corporation, even when such service occurs as the result of a mistake and the mistake could be considered reasonable. Because MERS was never served in this case, the circuit court properly granted summary judgment dismissing the action.

    Substitution of Judge - Parties "United in Interest"

    State ex rel. Cincinnati Ins. Co. v. Circuit Court for Milwaukee County, 2003 WI 57 (filed 18 June 2003)

    Hidden Oaks Homeowners Association and 47 individual owners of Hidden Oaks condominiums sued the developers and sellers of Hidden Oaks. The complaint did not allege the dates on which injuries occurred or damages arose. The defendants then filed third-party complaints against the Cincinnati Insurance Co. (Cincinnati) and Continental Insurance Co. (Continental). The defendants are named insureds on policies issued by Continental beginning Dec. 31, 1996 and lasting through Dec. 31, 1999. They are also named insureds on policies issued by Cincinnati beginning Dec. 31, 1999 and lasting through Dec. 31, 2003.

    The case was originally assigned to Milwaukee County Circuit Judge Thomas Cooper, but Continental filed a timely substitution request, which Judge Cooper granted. The case was then reassigned to Milwaukee County Circuit Judge Dominic Amato. Cincinnati then sought substitution of Judge Amato, but Judge Amato denied the request, reasoning that Cincinnati and Continental were parties "united in interest." Because Continental had already sought and obtained one substitution, Judge Amato concluded that Cincinnati was not entitled to another substitution
    of judge.

    Cincinnati sought review of Judge Amato's decision by the chief judge of Milwaukee County, who concluded that the decision was correct. The court of appeals subsequently denied Cincinnati's petition for a supervisory writ. Cincinnati then sought a supervisory writ before the supreme court. In a decision authored by Chief Justice Abrahamson, the supreme court granted the petition directing the chief judge of Milwaukee County to honor Cincinnati's substitution request.

    The question of law before the supreme court was whether Cincinnati is "united in interest" with Continental for purposes of Wis. Stat. section 801.58(3) such that they are entitled to only one substitution request between them. The court held that because the two companies' policies were in effect on different dates and provide different types of coverages, the companies have directly adverse interests in the present case and are not "united in interest" for purposes of the substitution statute.

    Justice Wilcox filed a concurring opinion.

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    Commercial Law

    Contracts - Economic Loss Doctrine - Fraud - Damages

    Digicorp Inc. v. Ameritech Corp., 2003 WI 54 (filed 3 June 2003)

    This case presented three issues. The first is whether "Wisconsin law recognize[s] the so-called 'fraud in the inducement exception' to the economic loss doctrine and, if so," what the elements of the exception are. The second issue is whether "a subcontractor of the party to whom the alleged misrepresentations were made [could] avoid the operation of the economic loss doctrine because it was not in contractual privity with the party that made the alleged misrepresentation." The third issue is whether "the allegedly defrauded party [may] recover the benefit of the bargain premised upon the continuing vitality of the contract" (assuming the economic loss doctrine does not bar a claim for fraud in the inducement) (¶20).

    Digicorp, an authorized Ameritech distributor, had Ameritech's approval to sell various calling services and plans through a third party, Bacher Communications, which was not an authorized Ameritech distributor. Problems arose when an Ameritech employee failed to inform Digicorp that a Bacher salesman had engaged in fraudulent acts while selling Ameritech services for another distributor. It later surfaced that the salesman engaged in similar, far-reaching frauds while working for Bacher. Ameritech then terminated Digicorp as an authorized distributor, which effectively cut off Bacher as well.

    The ensuing litigation involved a wide range of claims and counterclaims among Digicorp, Ameritech, and Bacher. A jury awarded Digicorp damages against Ameritech for breach of contract, intentional misrepresentation, and punitive damages. Bacher also received damages for Ameritech's misrepresentation. Ameritech, in turn, received some damages from Digicorp for breach of contract. The court of appeals reversed the damage award to Ameritech for Digicorp's breach but affirmed the judgment in other respects.

    Writing for a five-person court, Justice Crooks reversed the court of appeals and remanded the case. (Chief Justice Abrahamson and Justice Wilcox did not participate.) Addressing the three issues before it, the court first held that "Wisconsin recognizes a narrow fraud in the inducement exception, such as the one adopted in Huron Tool and Engineering Co. v. Precision Consulting Services, Inc., 532 N.W.2d 541 (Mich. App. 1995)." The economic loss doctrine "acts as a bar where the fraud is interwoven with the contract, and not extraneous to it." (¶21). The supreme court overruled Douglas-Hanson Co. v. BF Goodrich, 229 Wis. 2d 132, 598 N.W.2d 262 (1999), "to the extent that it is contrary to that narrow exception" (¶51). "It seems clear that, generally, in order for the fraud in the inducement exception to apply, the misrepresentation would have occurred before the formation of the contract. In addition, to constitute deceit or intentional misrepresentation, a plaintiff would have to prove the five elements set forth in the case law and in Wisconsin Civil Jury Instruction 2401" (¶52).

    The court answered the second question in the negative: "The economic loss doctrine precludes recovery in tort for solely economic losses, regardless of whether privity of contract exists between the parties" (¶22). And it answered the third question in the negative as well: "Where the fraud in the inducement exception applies, recovery for the benefit of the bargain is not permitted" (¶23). The court said that a contrary holding would contravene not only the logic of the fraud exception "but [also] the core principles of the doctrine of election of remedies" (¶67).

    Justice Sykes concurred in part and dissented in part. Justice Bradley, joined by Justice Bablitch, dissented.

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    Criminal Procedure

    Allegation of Habitual Criminality - Erroneous Allegation of Date of Prior Convictions

    State v. Stynes, 2003 WI 65 (filed 26 June 2003)

    The defendant was charged in a criminal complaint with numerous offenses. The state also added an allegation of habitual criminality, claiming that on March 18, 1998, the defendant had been convicted of specified crimes. After the defendant was convicted by a jury on the new charges, a presentence investigation (PSI) was ordered. The PSI included the defendant's criminal history and reported that the prior convictions supporting the charge of habitual criminality occurred on March 17, 1998 - not March 18, 1998, as alleged in the complaint. The circuit court sentenced the defendant using the extra imprisonment time that was available under the habitual criminality statute.

    The defendant filed a post-conviction motion seeking commutation of the penalties imposed, because the state failed to comply with notice requirements related to the habitual criminality allegations. He argued that although there was evidence of convictions dated March 17, 1998 in the PSI report, there was no evidence in the record for any prior convictions on March 18, 1998, as alleged in the criminal complaint. The circuit court denied the post-conviction motion. The court of appeals reversed and ordered the defendant's sentence commuted to the maximum term authorized by statute without any habitual criminality enhancement.

    In a majority decision authored by Justice Bradley, the supreme court reversed the court of appeals. It concluded that the criminal complaint provided the defendant with the required notice of the predicate convictions. "Because the complaint, in referring to those convictions, described the offenses, stated the correct county where the convictions occurred, cited the case number, and misstated the date of the convictions by only one calendar day, we determine that the misstatement did not meaningfully change the basis on which [the defendant] entered his plea" (¶ 2).

    Chief Justice Abrahamson filed a concurring opinion.

    Confessions - Miranda-Goodchild Hearings

    State v. Jiles, 2003 WI 66 (filed 27 June 2003)

    This case raises issues regarding the conduct of Miranda-Goodchild hearings, which are used to determine the admissibility of confessions. In this case, the state was not prepared for the hearing and showed surprise that the defendant had filed a motion to suppress his confession. Nonetheless, the "hearing" proceeded, with the judge taking over, reviewing on the record the unsworn police report detailing the confession, and then finding that the state had met its production burden of showing both compliance with Miranda and voluntariness of the statement. The court then gave defense counsel an opportunity to present evidence. The defendant took the stand and testified that he did not know what the Miranda warnings were and that he was under the influence of marijuana when he was questioned. The court then concluded that Miranda had been complied with and that the confession was voluntary. Accordingly, it denied the motion to suppress and the defendant subsequently pleaded guilty. The court of appeals affirmed.

    In a unanimous decision authored by Justice Prosser, the supreme court reversed the court of appeals. The court concluded that the defendant did not receive a full and fair evidentiary hearing on the motion to suppress his statement. Said the court, "the Miranda-Goodchild hearing is an evidentiary hearing for the parties. It is not a soliloquy for the court. The court must not permit itself to become a witness or an advocate for one party. A defendant does not receive a full and fair evidentiary hearing when the role of the prosecutor is played by the judge and the assistant district attorney is reduced to a bystander. We hold that the procedure employed by the court in this hearing did not conform with the minimum requirements of [Wis. Stat.] § 971.31(3) for an 'evidentiary hearing' and 'did not afford a reliable determination of the voluntariness of the confession [to be] offered in evidence at trial'" (¶ 39, quoting Jackson v. Denno, 378 U.S. 368, 377 (1964)).

    The court observed that it will rarely be the case that the state is able to meet its burden of proof at a Miranda-Goodchild hearing by relying exclusively on an unsworn police report. In this case it did not and, accordingly, the court reversed the conviction.

    Sex Offender Registration when Defendant Convicted of Bail Jumping with a Sex Offense Dismissed and Read In

    State v. Martel, 2003 WI 70 (filed 27 June 2003)

    The defendant was charged with several offenses, including bail jumping and six counts of second-degree sexual assault of a child. Pursuant to a plea agreement, he pleaded no contest to the bail jumping charge. The sexual assault charges were dismissed and read in, which means that the court could consider them in determining the appropriate sentence on the bail jumping charge.

    The court placed the defendant on probation and ordered him to register as a sex offender as a probation condition. When the defendant subsequently filed a motion to remove sex offender registration as a condition of probation, the circuit court denied the motion. The defendant appealed, and the court of appeals certified the case to the supreme court. The certified question was whether a circuit court may order sex offender registration as a probation condition for a defendant who has not been convicted and sentenced for one of the crimes enumerated in the sex offender registration statute or its counterpart in the sentencing code. See Wis. Stat. §§ 301.45, 973.048.

    In a unanimous decision authored by Justice Sykes, the supreme court reversed. It concluded that section 973.048, which details when a court may or must impose sex offender registration, limits the circuit court's discretion to order registration to those instances in which persons are sentenced or placed on probation for an offense enumerated in the statute. Bail jumping is not among the crimes listed in section 973.048 or in section 301.45, which establishes the sex offender registry and imposes registration requirements upon persons meeting statutory criteria. Because the defendant in this case was not sentenced or placed on probation for an offense enumerated in section 973.048 or 301.45, the circuit court's order of sex offender registration as a probation condition was error. The supreme court further concluded that the sexual assault read-ins did not bring the defendant's case within the purview of section 973.048.

    The state argued that even if the statutes that more specifically govern sex offender registration do not apply, the circuit court's order was nonetheless valid under the sentencing court's broad discretionary authority to set probation conditions under the general probation statute. See Wis. Stat. § 973.09. The supreme court disagreed. Said the court, "the broad statutory grant of discretion over conditions of probation cannot be interpreted as vesting the circuit court with the authority to invoke and apply statutes that are otherwise plainly inapplicable" (¶ 30).

    Truth-in-Sentencing - Presumptive Minimum Sentences

    State v. Cole, 2003 WI 59 (filed 19 June 2003)

    Under Wisconsin's truth-in-sentencing laws, a sentence to prison must be bifurcated into two components: an initial term of confinement in prison and a term of extended supervision. This case arose under the first set of truth-in-sentencing laws that took effect on Dec. 31, 1999. See 1997 Wis. Act 283.

    The defendant was convicted of delivering more than 15 but less than 40 grams of cocaine. At the time, this unclassified drug felony had a presumptive minimum imprisonment term of three years. [Editors' Note: Most minimum imprisonment terms have since been repealed. See 2001 Wis. Act 109 (the second stage of truth-in sentencing legislation).] The question raised in this case is whether the three-year minimum term, which the circuit judge clearly intended to impose, requires a minimum initial term of confinement of three years or, alternatively, whether the minimum three-year term may be satisfied by a combination of confinement and extended supervision that equals three years.

    In a unanimous decision authored by Chief Justice Abrahamson, the supreme court concluded that the three-year presumptive minimum sentence is a total sentence of three years, consisting of a term of 27 months of confinement and nine months of extended supervision.

    In a footnote, the court observed that its holding in this case has limited application and is of limited precedential value. "As best we can tell, the resolution of the Truth in Sentencing issue posed by the present case will affect only those sentencing decisions having all three of the following characteristics: (1) the crime for which an accused is being sentenced was committed on or after December 31, 1999, but before February 1, 2003; (2) the crime for which the accused is being sentenced is an unclassified felony for which a minimum sentence was specified in the statute, namely that the offender 'shall be imprisoned for not less than [x] years' where x is one or more years; and (3) the sentencing court expressly states its intent to impose the minimum sentence specified in the statute" (¶ 10 n.11).

    Sentencing - Imposition of Longer Sentence upon Remand Following Successful Appeal - Due Process - Vindictiveness

    State v. Church, 2003 WI 74 (filed 1 July 2003)

    The defendant was convicted of several offenses, including second-degree sexual assault, child sexual exploitation, delivery of a controlled substance, and two counts of child enticement. The circuit court sentenced him to 13 years in prison for the sexual assault and placed him on probation for the other crimes, with the probation to be served consecutively to the prison term.

    The defendant appealed the two convictions for child enticement on double jeopardy grounds. The court of appeals concluded that the two convictions were multiplicitous and, accordingly, reversed one of those two convictions. The court of appeals remanded the case to the circuit court for resentencing on all counts. At resentencing, the circuit court imposed a 17-year sentence for the sexual assault and imposed the same probation periods for the other three convictions that it had earlier ordered. The defendant appealed again, and this time the court of appeals affirmed.

    In a unanimous decision authored by Justice Sykes, the supreme court reversed the court of appeals. Two issues were presented to the supreme court: 1) whether the court of appeals was required to remand this case for resentencing on all remaining counts after it reversed one of the multiplicitous child enticement counts; and 2) whether the circuit court's increased sentence on the sex assault count was presumptively vindictive and thus in violation of the defendant's right to due process, and, if so, whether the presumption of vindictiveness was overcome by adequate, objective new factors in the record justifying the harsher sentence.

    The supreme court concluded that "resentencing on convictions that remain intact after an appellate court reverses and vacates one or more counts in a multi-count case is not always required. Where, as here, the vacated count did not affect the overall dispositional scheme of the initial sentence, resentencing on the remaining counts is unnecessary and therefore not required. Here, however, [the defendant] himself requested resentencing as a remedy for the multiplicity of the child enticement counts. Upon resentencing, he received more than a reimposition of the original dispositional scheme. We conclude that the increased sentence was presumptively vindictive, in violation of [the defendant's] right to due process, and that the presumption was not overcome by adequate, objective new factors in the record justifying the increase" (¶ 4).

    The longer sentence in this case was premised on the passage of time. Four years of incarceration had gone by since the original sentencing, and the defendant was still mostly in denial and had not sought or received treatment. The supreme court said that this does not constitute "objective information" of "identifiable conduct on the part of the defendant" subsequent to the original sentencing that would justify a harsher sentence at resentencing. "It constitutes a subjective evaluation of the status of [the defendant's] rehabilitation at the time of resentencing, based not on any new facts but on the mere continued existence of the original facts" (¶ 56). "[The defendant] was in denial and untreated at the time of the original sentencing. That he remained so four years later is not a new factor justifying a longer sentence after a successful appeal; it is merely a continuation of the status quo ante" (¶ 57). Further, there was no evidence that the defendant refused any treatment opportunity while in prison. Accordingly, the supreme court held that the circuit court's justification for the longer sentence was insufficient to overcome the presumption that imposition of a harsher sentence following reversal was vindictive and thus violative of due process. See North Carolina v. Pearce, 395 U.S. 711 (1969).

    Hearsay - Unanimous Verdict

    State v. Norman, 2003 WI 72 (filed 1 July 2003)

    A jury convicted the defendant of multiple counts of falsifying corporate documents. In essence, he stole money and equipment from his employer by fabricating business records such as invoices and receipts. The court of appeals affirmed.

    The supreme court, in an opinion written by Chief Justice Abrahamson, also affirmed, in an opinion that addressed an array of issues, including the sufficiency of evidence. First, the trial court correctly admitted into evidence the preliminary hearing testimony of a customer whose transaction had been manipulated by the defendant. The court conformed with the requirements of the former testimony exception and the confrontation right when it found the witness unavailable because of her medical condition. Moreover, the former testimony exception itself is a "firmly rooted" one that yields sufficiently reliable proof for constitutional purposes. The court rejected the argument that the conduct of the preliminary hearing, including the brevity of the cross-examination and the rules precluding inquiry into credibility of witnesses, rendered the hearsay inadmissible.

    Second, although the trial court erred by excluding extrinsic evidence of a prior inconsistent statement by a key prosecution witness, such error was harmless. Indeed, the "same evidence was communicated to the jury by other means" (¶50).

    Third, the trial judge properly instructed the jury about the elements of the offense. "An accused's right to a unanimous verdict is not violated every time a judge instructs a jury on a statute that presents multiple modes of commission and does not select one among the many modes of a commission" (¶64). Here the defendant failed to develop the argument that the instruction failed to comport with legislative intent.

    Law of the Case - Hearsay - Prior Testimony

    State v. Stuart, 2003 WI 73 (filed 1 July 2003)

    The defendant was convicted of murdering an acquaintance. At his 1999 murder trial, a key state witness, the defendant's brother, took the stand but asserted his right against self-incrimination. Despite the state's offer of immunity and threats of contempt, the brother persisted in refusing to testify. The state then offered the brother's testimony from a preliminary examination, but the trial judge ruled it inadmissible. The state filed an "emergency" appeal. Although the court of appeals summarily affirmed the ruling on admissibility of the testimony, the supreme court briefly stayed the trial, heard oral argument, and issued a decision that reversed the court of appeals (and ruled the hearsay admissible). The murder trial resumed and the defendant was convicted. A motion for postconviction relief was denied, and the court of appeals certified this case to the supreme court.

    The supreme court, in an opinion authored by Justice Wilcox, again addressed the admissibility of the brother's preliminary examination testimony. First, the court held that its prior decision had established the law of the case. Taking the opportunity to discuss "law-of-the-case doctrine" in Wisconsin, the court explained that the "longstanding rule" provides that "a decision on a legal issue by an appellate court establishes the law of the case, which must be followed in all subsequent proceedings in the trial court or on later appeal" (¶23). The rule, however, is not absolute and a court may "disregard the doctrine and reconsider prior rulings in a case" when "cogent, substantial, and proper reasons exist" (¶24). The earlier "emergency" appeal in this case, said the court, constituted the law of the case, especially since it reversed a lower court's determination. Nor did any reason exist to depart from the law of the case doctrine.

    The court next addressed the merits of the defendant's objection to the preliminary examination testimony and again affirmed its admissibility. In particular, the use of this hearsay fully comported with the confrontation right and the hearsay rule, despite the defendant's claim that factors including the restrictions placed on cross-examination at preliminary hearings cast doubt on its reliability.

    Chief Justice Abrahamson, joined by Justice Bradley, concurred in part and dissented in part. First, they disagreed with the majority's decision to remand a host of other issues to the court of appeals. Second, they contended that the court erred in its earlier "emergency" decision by failing to give reasons for its decision admitting the preliminary hearing testimony.

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    Family Law

    Divorce - Property Division - Unequal Division of Property

    LeMere v. LeMere, 2003 WI 67 (filed 27 June 2003)

    The parties were married in 1981 and divorced approximately 20 years later. During the marriage, the husband established and oversaw what became a very successful family business. His wife held both a full-time and a part-time job before having children and then dedicated herself to full-time childrearing and care of the family home.

    After a hearing, the trial court divided the marital property, set child support, and awarded maintenance. In addition to these determinations, the divorce judgment incorporated various stipulations the parties had entered into.

    Among the issues on appeal was whether the circuit court misused its discretion when it divided the marital property. The parties' assets, except for the value of the family business, were divided equally. The circuit court awarded 65% of the business's value to the husband and 35% to the wife. The court indicated that it was recognizing the husband's industriousness and efforts in creating the business enterprise and was determining that his efforts in starting, maintaining, and expanding the business resulted in a substantial economic contribution to
    the marriage that justified an unequal property division. The court of appeals affirmed, concluding that the unequal property division was not an erroneous exercise of discretion by the circuit court.

    In a unanimous decision, authored by Justice Sykes, the supreme court reversed the court of appeals. In reaching this decision, the court turned to Wis. Stat. section 767.255(3), which establishes a presumption of equal division of marital property. The statute authorizes the court to deviate from this presumption of equality, if the court first considers a lengthy and detailed list of statutory factors. In this case, the court ordered an unequal division of the largest marital asset after it considered only one statutory factor (the parties' respective contributions to the marriage) and it entirely neglected the other statutory factors. "Moreover, the circuit court's analysis of even this sole statutory factor contradicts the explicit legislative purpose to 'recognize the valuable contributions of both spouses during the marriage,' as well as our case law establishing marriage as an equal partnership, in which the contributions of the spouse who is primarily engaged in child-rearing and homemaking are presumptively valued equally with those of the income-earning spouse" (¶ 28).

    "This is not to say that the circuit court is precluded from giving one statutory factor greater weight than another, or from concluding that some factors may not be applicable at all. Property division in divorce remains a discretionary decision of the circuit court, but the record must at least reflect the court's consideration of all applicable statutory factors before a reviewing court can conclude that the proper legal standard has been applied to overcome the presumptive equal property division under Wis. Stat. § 767.255(3). Circuit courts must subject requests for unequal division of property to the proper statutory rigor. The failure to do so is an erroneous exercise of discretion" (¶ 25).

    Lastly, the court observed that a circuit judge's failure to address factually inapplicable statutory factors will not be an erroneous exercise of discretion. For example, the judge might summarily conclude that certain of the statutory factors are irrelevant. "Neither do we hold that every incomplete consideration of the statutory factors must be reversed as an erroneous exercise of discretion. A circuit court's failure to consider all the statutory factors might well be harmless, particularly where the overlooked factors are only marginally relevant or not relevant at all" (¶ 27).

    Child Support - Modification of Child Support Because Payer Is Incarcerated

    Rottscheit v. Dumler, 2003 WI 62 (filed 25 June 2003)

    In this case the supreme court considered the role incarceration plays when a party ordered to pay child support moves for a modification of the support order. In a majority decision authored by Justice Wilcox, the court concluded as follows: "Although we find it appropriate for a court to consider incarceration when reviewing a request for modification, we find that the fact of incarceration by itself neither mandates nor prevents modification. Incarceration is one factor that should be considered, but the determination should be made on a case-by-case basis, looking at the totality of the relevant circumstances" (¶ 1).

    The court agreed with the decisions of other jurisdictions holding that parents with child support obligations should not automatically be rewarded with a payment reduction as a result of incarceration. While the court acknowledged the financial effects of incarceration, it also noted that there are strong reasons why parents should not necessarily be excused from their child support obligations.

    Providing guidance to family courts, the supreme court articulated a number of factors that should be examined when dealing with an incarcerated party who has moved for a modification of child support. These factors include "the length of incarceration, the nature of the offense and the relevant course of conduct leading to incarceration, the payer's assets, the payer's employability and the likelihood of future income upon release, the possibility of work release during incarceration, the amount of arrearages that will accumulate during the incarceration, and the needs of the children. Wisconsin Stat. § 767.32(1)(c) expressly states that a court may consider changes in earning capacity in determining the appropriateness of modification. As such, a court's determination that earning capacity has not changed is also a relevant consideration. This list, of course, is not exhaustive. Courts should evaluate all relevant circumstances" (¶ 41).

    The court concluded that consideration of the criminal conduct underlying the incarceration is appropriate, not for purposes of analogy to the "shirking" situation but rather "for an overall evaluation of the parent's behavior as it relates to his ability and attitude toward paying child support" (¶ 42).

    Chief Justice Abrahamson filed a dissenting opinion that was joined by Justice Bradley.

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    "Per Person" Liability Limit - Emotional Distress

    Mullen v. Walczak, 2003 WI 75 (filed 1 July 2003)

    Mullen was seriously injured in a car accident caused by an uninsured motorist. While at the scene, Mullen witnessed his wife's death. He later sued his insurance carrier, American Family, on a claim for emotional distress. The parties stipulated that Mullen's emotional distress stemmed solely from observing his wife's death. The court of appeals held that Mullen's claim must be compensated out of his wife's "per person" liability limit.

    In a decision authored by Justice Bablitch, the supreme court affirmed. Mullen and American Family had settled the wrongful death claim for $100,000, which exhausted the policy limits. Mullen argued that his claim for emotional distress should be covered by his own "each person" limit, "because all of his injuries, both physical and emotional, from whatever sources, should be covered by his per person limit" (¶14). (Mullen's physical injuries did not exhaust the policy's limits.)

    Although Mullen was not a "bystander" for purposes of the emotional distress claim, the policy's language provided that his wife's "'each person' limit includes all damages sustained by all persons as the result of [the wife's] bodily injury in the accident" (¶20). In short, "even though Mullen was himself physically injured, his claim for emotional distress resulted from his wife's injury. Under terms of the policy, any damages sustained by all persons as the result of [his wife' s] death are covered by her 'per person' limit" (¶22).

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    Juvenile Law

    Court-ordered Deferred Prosecution - Limitations on Prosecutorial Termination of Court-ordered Deferred Prosecution

    State v. Lindsey A.F., 2003 WI 63 (filed 20 June 2003)

    This case arises under the Wisconsin Juvenile Justice Code and its provisions for deferred prosecution. Wis. Stat. section 938.21(7) provides as follows: "Deferred prosecution. If the judge or juvenile court commissioner determines that the best interests of the juvenile and the public are served, he or she may enter a consent decree under s. 938.32 or order the petition dismissed and refer the matter to the intake worker for deferred prosecution in accordance with s. 938.245."

    In this case the supreme court addressed two issues relating to deferred prosecutions. First, may a circuit court dismiss a delinquency petition and refer the matter to the intake worker for deferred prosecution if the juvenile is not in custody? Second, if the juvenile court has such authority, does the district attorney have the power under section 938.245(6) to terminate the resulting deferred prosecution agreement by filing a second delinquency petition that contains the same charge and factual allegations as the first petition?

    In a unanimous decision authored by Justice Bradley, the supreme court held that under section 938.21(7), a circuit court has the authority to dismiss a juvenile delinquency petition and refer the matter for deferred prosecution whether or not the juvenile is in custody. The court further concluded that the district attorney cannot terminate the resulting deferred prosecution agreement by filing a second delinquency petition containing the same charge and factual basis.

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    Limitations on Actions

    Statutes of Limitation - Statutes of Repose

    Wenke v. Gehl Co., 2003 WI 96 (filed 8 July 2003)

    [Editors' Background Notes: This case concerns statutes of limitation and statutes of repose. In Leverence v. United States Fidelity & Guaranty, 158 Wis. 2d 64, 462 N.W.2d 218 (Ct. App. 1990), the court of appeals distinguished between statutes of limitation and statutes of repose. "A period of limitation bars an action if the plaintiff does not file suit within a set period of time from the date on which the cause of action accrued. In contrast, a period of repose bars a suit a fixed number of years after an action by the defendant (such as manufacturing a product), even if this period ends before the plaintiff suffers any injury." Leverence, 158 Wis. 2d at 92.

    [The Leverence court was concerned with Wisconsin's borrowing statute (Wis. Stat. § 893.07) and in that context drew a distinction between statutes of limitation and statutes of repose. However, in a recent decision arising out of a different procedural context, the Wisconsin Supreme Court concluded that the term "statute of repose" is largely a judicial label for a particular type of limitation on actions and equated the terms "statute of limitations" and "statute of repose." See Landis v. Physicians Ins. Co., 2001 WI 86.]

    In the present case the court of appeals noted that Landis arguably overrules Leverence and creates uncertainty in the case law regarding statutes of limitation and statutes of repose. Accordingly, the appellate court certified this case to the Wisconsin Supreme Court, which granted certification. The certified question was whether the holding of Leverence v. United States Fidelity & Guaranty, 158 Wis. 2d 64, 462 N.W.2d 218 (Ct. App. 1990), distinguishing between statutes of limitation and statutes of repose, was functionally overruled in Landis v. Physicians Insurance Co., 2001 WI 86, 245 Wis. 2d 1, 628 N.W.2d 893.

    In a per curiam opinion the supreme court vacated its order granting certification and remanded the case to the court of appeals. The result occurred because the court was equally divided on whether to affirm or reverse the circuit court's judgment. Justice Wilcox did not participate.

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    Municipal Law

    Police and Fire Commission Disciplinary Hearing - Wisconsin Fair Employment Act - Review by Department of Workforce Development of Firefighter's Claim that Employment Discharge Was Discriminatory

    City of Madison v. Department of Workforce Dev., 2003 WI 76 (filed 1 July 2003)

    The city of Madison fire chief filed disciplinary charges against a Madison firefighter alleging numerous counts of misconduct in violation of the rules of the Madison Fire Department. The chief recommended that the firefighter be terminated from employment.

    The Madison Police and Fire Commission (PFC) held an evidentiary hearing on the charges, which were premised on criminal conduct for which the firefighter had already been convicted. Following this "just cause" proceeding, conducted pursuant to Wis. Stat. section 62.13(5), the PFC ordered the firefighter discharged from employment. The firefighter appealed, and his appeal was dismissed by the circuit court. The court of appeals affirmed the circuit court's decision.

    The firefighter then filed a complaint with the Wisconsin Department of Workforce Development (DWD). He alleged that when the city terminated his employment, it discriminated against him on the basis of his conviction record in violation of the Wisconsin Fair Employment Act (WFEA). See Wis. Stat. §§ 111.321, .335. The DWD is the agency of state government authorized to administer the WFEA.

    The city responded by filing a petition for a writ of prohibition against the DWD. The circuit court granted the petition, concluding that the DWD lacked jurisdiction over the firefighter's complaint because of the exclusive nature of PFC proceedings under section 62.13(5). On appeal the court of appeals reversed the circuit court.

    In a unanimous decision authored by Justice Sykes, the supreme court reversed the court of appeals. As described by the court, the issue before it was whether a firefighter who is terminated from city service after a "just cause" hearing conducted by a PFC pursuant to section 62.13(5)(em) may, under the WFEA, pursue a discrimination complaint regarding the termination before the DWD.

    The court began its analysis by observing that disciplinary terminations of city firefighters are imposed and reviewed pursuant to the procedures established in section 62.13(5). The statutory procedure requires the PFC to determine whether a proposed disciplinary termination is supported by just cause, which includes a determination of whether the rule or order allegedly violated by the firefighter is reasonable and is being applied without discrimination. See Wis. Stat. § 62.13(5)(em)2., 6. A termination sustained by a PFC under section 62.13(5)(em) and (f) is subject only to judicial review in circuit court under section 62.13(5)(i) or, in certain circumstances, by common law certiorari.

    Accordingly, the court concluded that "any claim that a disciplinary termination is discriminatory under the WFEA must be raised before the PFC, the agency with exclusive statutory authority under Wis. Stat. § 62.13(5) to review disciplinary actions against firefighters. The DWD may not take jurisdiction over a WFEA complaint arising out of a decision of a PFC to terminate a firefighter" (¶ 2).

    Petition for Direct Legislation - Initiative

    Mount Horeb Community Alert v. Village Bd. of Mount Horeb, 2003 WI 100 (filed 8 July 2003)

    Several residents of the village of Mount Horeb, on behalf of the citizens' organization Mount Horeb Community Alert, filed a petition pursuant to Wisconsin's direct legislation statute (Wis. Stat. § 9.20) for an ordinance that would require all Mount Horeb capital improvement projects that exceed $1 million in costs to be put before the voters in a binding referendum before construction begins. The Mount Horeb Village Board neither adopted the proposed ordinance nor placed it on the ballot for consideration by the electorate. This mandamus action followed.

    The circuit court denied the writ, concluding that the proposed ordinance would impermissibly modify the statutorily prescribed procedures for borrowing funds for municipal expenditures. The court of appeals reversed. It held that the proposed ordinance was a proper subject of direct legislation. See 2001 WI App 80. In a majority opinion authored by Justice Sykes, the supreme court affirmed the court of appeals.

    The direct legislation statute permits local electors to submit a petition requesting that an attached proposed ordinance either be adopted by the municipality's governing body without alteration or be referred to a vote in the next election. See Wis. Stat. § 9.20(1), (4). "Direct legislation in cities and villages pursuant to Wis. Stat. § 9.20 is qualified only by four narrow limitations which this court has declared are implicit in the statute. Direct legislation under Wis. Stat. § 9.20 must be legislative in nature, cannot repeal an existing ordinance, cannot exceed the powers of the municipal governing body itself, and cannot modify statutorily prescribed procedures" (¶ 4). "These limitations preserve municipal control over executive and administrative functions and protect the integrity of the statutory framework governing municipalities, while at the same time permit the proper invocation by electors of the direct legislation procedure provided by the statute" (¶ 18).

    In this case, the court concluded that because the proposed ordinance is legislative rather than administrative in nature, does not repeal any existing ordinance, falls within the powers of the village board, and does not modify or conflict with state statutes that would bind the village board if it tried to legislate in the same area, the ordinance is fully consistent with the direct legislation statute. The court held that the village board was therefore required to act on the petition under the provisions of section 9.20(4). Accordingly, the supreme court affirmed the court of appeals and remanded for issuance of the writ of mandamus.

    Justice Crooks filed a dissenting opinion that was joined by Justices Bablitch and Wilcox.

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    Prisoner Litigation

    Dismissals of Petitions Without Affording Prisoner Opportunity to be Heard on Merits - Due Process

    State ex rel. Schatz v. McCaughtry, 2003 WI 80 (filed 2 July 2003)

    The petitioner, a prison inmate, brought a petition for a writ of certiorari to review three disciplinary decisions finding that he violated prison rules. Utilizing screening procedures mandated by the Prisoner Litigation Reform Act, the circuit court reviewed the pleadings as to all the claims that were presented, including the extensive record materials submitted with them. The court concluded that the petition did not state a claim for relief and dismissed it under authority of Wis. Stat. section 802.05(3). The petitioner was not given an opportunity to be heard on the merits of his petition.

    The petitioner appealed to the court of appeals. The appellate court concluded that his constitutional right to due process was violated when the circuit court dismissed the petition sua sponte without giving him prior notice of its intent to do so and an additional opportunity to be heard.

    In a unanimous decision authored by Justice Bradley, the supreme court reversed the court of appeals. It agreed with the state that the circuit court's dismissal of the petition did not violate the petitioner's right to due process because section 802.05(3) provides constructive notice of the potential for a sua sponte dismissal for failure to state a claim and there are procedural safeguards that protect against erroneous sua sponte dismissals.

    Constructive notice can be sufficient to satisfy due process and the court concluded that it existed in this case. "The language of § 802.05(3) states that, with respect to an action commenced by a prisoner, the court 'shall review the initial pleading as soon as practicable' and 'may dismiss the action or special proceeding ... without requiring the defendant to answer the pleading if the court determines that the action or special proceeding ... [f]ails to state a claim upon which relief may be granted.' This expressly puts prisoners on notice that a circuit court will examine the initial pleading and may, without further briefing or hearing on the matter, dismiss the complaint if the court determines that the initial pleading fails to state a claim. Accordingly, the prisoner had constructive notice that his petition could be dismissed if it did not state a claim" (¶ 31).

    The supreme court next determined that there are procedural safeguards in place that protect against erroneous sua sponte dismissals. "An initial safeguard is the standard that a court is required to apply when considering whether to dismiss for failure to state a claim. The standard for deciding whether a certiorari petition is sufficient to order a return is the same standard used to decide whether a complaint states a claim. It requires that the circuit court construe the petition liberally and consider dismissal only if it is quite clear that no relief can be had under
    any legal theory" (¶ 33) (citations omitted).

    Additional safeguards include the following: 1) the circuit court may consider whether the petition can be salvaged by amendment; 2) the dismissal order provides notice to the prisoner of the reason for the dismissal and the prisoner can request that the circuit court reexamine its decision to dismiss the petition; 3) in cases in which the dismissal is without prejudice and the time for filing the petition has not expired, a prisoner could refile the petition; and 4) the prisoner has the right to appeal the dismissal order under the provisions of section 808.03.

    Lastly, the court considered and rejected the petitioner's claim that the sua sponte dismissal of his petition violated his constitutional right to equal protection of the law under the U.S. and Wisconsin Constitutions.

    Disciplinary Actions - Certiorari Review - Exhaustion of Administrative Remedies

    State ex rel. L'Minggio v. Gamble, 2003 WI 82 (filed 2 July 2003)

    Prison officials at the Kettle Moraine Correctional Institution issued a conduct report against the petitioner for allegedly participating in gang activity and planning to assault prison staff. The prison adjustment committee found him guilty and imposed eight days of adjustment segregation and three years of program segregation. The petitioner then appealed the adjustment committee's decision to the program review committee, which rejected his arguments and found him guilty of the charges. The petitioner was ordered transferred to the Wisconsin Secure Program Facility in Grant County for three years.

    The petitioner appealed the disciplinary determination to the warden, who affirmed it. After attempting to appeal the warden's decision to the Secretary of the Department of Corrections, the petitioner filed an inmate complaint relating to the disciplinary proceeding. The inmate complaint examiner (ICE) rejected the complaint as untimely. The petitioner subsequently filed a document in circuit court labeled as a petition for habeas corpus. However, the circuit court construed it as a petition for certiorari and then dismissed it as untimely.

    The court of appeals affirmed the circuit court, although on different grounds. It concluded that the petitioner was barred from seeking judicial review because he failed to exhaust his administrative remedies. Although he appealed the adjustment committee's decision to the warden and thereafter filed an inmate complaint as described above, he failed to pursue additional administrative review of the ICE's decision. [Such additional review was available to the petitioner under the administrative code, although the ICE's decision letter in the petitioner's case failed to advise him about the possibility of further administrative review.]

    In a decision authored by Justice Bablitch, the supreme court reversed the court of appeals. It concluded that the petitioner's petition was properly construed as an action for certiorari rather than habeas corpus, since a writ of certiorari provides an adequate remedy in the law and has historically been used to challenge prison disciplinary decisions. "We also conclude that [the petitioner] exhausted his administrative remedies by satisfying the requirements under Wis. Admin. Code § DOC 310.04. Since the Department of Corrections failed to provide notice to [him] of any further appeal rights when his inmate complaint was rejected, we conclude that the Department is estopped from claiming that [the petitioner] failed to exhaust his administrative remedies in this case" (¶ 2).

    Accordingly, the supreme court reversed and remanded the matter to the circuit court, where the timeliness of the petitioner's "certiorari" petition can be litigated.

    Chief Justice Abrahamson filed a concurring opinion. Justice Wilcox's opinion concurring in part and dissenting in part was joined by Justices Crooks and Sykes.

    Prison Disciplinary Actions - Certiorari Review - Failure to Direct the Writ to the Secretary of the Department of Corrections

    State ex rel. Grzelak v. Bertrand, 2003 WI 102 (filed 9 July 2003)

    The petitioner sought a writ of certiorari to review procedural errors allegedly committed against him during a prison disciplinary process. The petitioner named the warden at the prison where he was incarcerated as the respondent in this action. The state argued that the writ was misdirected because it should have named the Secretary of the Department of Corrections as the respondent.

    The circuit court concluded that the writ should have been directed to the secretary and that the failure to do so deprived the court of jurisdiction to hear the matter. The court of appeals summarily affirmed the circuit court's decision.

    In a majority decision authored by Justice Wilcox, the supreme court reversed the court of appeals for two reasons. First, when the petitioner filed his petition in June 2000, the statutes and case law regarding the proper party to serve were ambiguous. Second, naming the warden was reasonable under the facts and circumstances of this case.

    Previous cases establish the principle that when the applicable law relating to proper certiorari procedure is ambiguous, service on the agent of the decision making body is sufficient to give a court jurisdiction, if such service was reasonable under the circumstances. In this case the court articulated the following ambiguities: "(1) the lack of a clear statement in any previous decision, statute, or administrative regulation providing that when raising procedural issues, in order to properly file a petition for writ of certiorari an inmate must name the Secretary of the Department of Corrections as the respondent; (2) the labyrinth of administrative regulations and case law regarding who is the proper party to serve; and (3) the fact that [the petitioner] was initially pursuing both procedural and substantive claims" (¶ 29). The court went on to conclude that, on the specific facts of this case, it was reasonable for the petitioner to direct the writ to the prison warden.

    Justice Crooks filed a dissenting opinion that was joined by Justice Sykes.

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    Sexually Violent Persons

    Mandatory Time Limit for First Reexamination - Remedy for Failure to Conduct Timely Reexamination

    State ex rel. Marberry v. Macht, 2003 WI 79 (filed 2 J

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