Supreme Court Digest
By Prof. Daniel D. Blinka & Prof. Thomas J. Hammer
This column summarizes all decisions of the Wisconsin Supreme Court
(except those involving lawyer or judicial discipline, which are
digested elsewhere in the magazine). Prof. Daniel D. Blinka and Prof.
Thomas J. Hammer invite comments and questions about the digests. They
can be reached at the Marquette University Law School, 1103 W. Wisconsin
Ave., Milwaukee, WI 53233, (414) 288-7090.
Employee Benefits
Worker's Compensation - Scheduled Injuries - Great Deference
Standard
Hagen v. LIRC, No. 94-0374
(filed 6 June 1997)
Hagen was employed as a nurse's aid when she injured herself while
lifting a patient. Based on her worker's compensation claim, an
administrative law judge (ALJ) found that Hagen's shoulder and arm
problems were "scheduled injuries" but that her back injury was too
"minor" to merit a loss of earning capacity claim. LIRC adopted the
ALJ's findings and the circuit court affirmed. The court of appeals,
however, reversed, concluding that Hagen's shoulder injury was not
covered by the permanent partial disability schedule of section
102.52(1) of the Wisconsin Statutes.
The supreme court, in an opinion written by Justice Bradley, reversed
the court of appeals. First, the court held that LIRC's interpretation
of section 102.52(1) was entitled to "great weight deference." LIRC and
the Department of Workforce Development have consistently interpreted
the phrase "the loss of an arm at the shoulder" to include injuries to
the shoulder. The interpretation was based on the agencies' specialized
knowledge and provides uniformity in applying the law to shoulder
injuries. Moreover, the interpretation was reasonable. It viewed "a
shoulder injury" largely in terms of its effect on the extent of an
arm's usefulness. Nor was it contrary to the Legislature's goal in
enacting Chapter 102. Second, the evidence supported LIRC's factual
findings that Hagen suffered only a scheduled permanent partial
disability.
Worker's Compensation
Protective Occupation Employees - Duty Disability Payments
Coutts v. Wisconsin Retirement
Board, No. 95-1905
Des Jarlais v. Wisconsin Retirement
Board, No. 95-2228 (filed 22 May 1997)
These consolidated cases, which involved a firefighter and a deputy
sheriff who were injured in the line of duty, presented the issue of
whether, pursuant to Wisconsin Statute section 40.65(5)(b)3, the
Wisconsin Retirement Board (Board) may reduce duty disability benefits
by worker's compensation benefits which were paid to a Wisconsin
Retirement System participant before the duty disability payments
commenced. The statute provides that the Board shall reduce a protective
occupation participant's monthly duty disability benefit payment by "any
worker's compensation benefit payable to the participant."
In a unanimous decision authored by Justice Bradley, the court
concluded that the statute is unambiguous and does not authorize the
Board to reduce section 40.65 duty disability benefits with worker's
compensation benefits that were paid prior to the commencement of duty
disability benefits. The court's determination of the legislature's
intent with regard to this issue was based upon the plain meaning of the
statute and was further supported by the context in which the statutory
language quoted above appears.
Municipal Law
Annexation - Reservation of Land For Public Use - Regulatory
Takings
Hoepker v. City of Madison Plan
Commission, No. 95-2013 (filed 16 May 1997)
The Hoepkers own approximately 49 acres of land in the Town of Burke
which they seek to develop as a residential subdivision. The property is
located within the City of Madison's extraterritorial plat approval
jurisdiction. The Hoepkers' preliminary plat consists of 62
single-family residential lots. The proposed subdivision development is
permitted by current zoning.
The City of Madison approved the Hoepkers' preliminary plat subject
to several conditions. One of those conditions was the annexation of the
property in question to the city. Another was that the property be
reconfigured to provide an open space corridor for a future recreational
trail.
The Hoepkers sought certiorari review challenging these conditions.
The circuit court denied relief. The court of appeals held that the city
could not condition approval of the plat on annexation, but could
condition it on the open space corridor. In a unanimous decision
authored by Justice Crooks, the supreme court affirmed the court of
appeals' decision in part and reversed in part.
The first issue before the supreme court was whether the city has
authority under section 236.45 of the Wisconsin Statutes to condition
approval of the preliminary plat on a requirement that the Hoepkers
agree to annexation. It concluded that the city does not have this
authority because to hold otherwise would be contrary to the annexation
standards specified in Chapter 66 of the Wisconsin Statutes. The
Legislature has set forth the standards for annexation in Chapter 66 and
a municipality must follow these procedures because it has no power to
extend its boundaries otherwise than as provided for by legislative
enactment or constitutional provision. In particular, Chapter 66
provides safeguards so that no populated fringe area may become part of
a city until the majority of electors and/or property owners in a
particular area desire to annex. Municipalities cannot coerce or
unfairly induce an elector or property owner into agreeing to
annexation.
The court concluded that, in this case, the City of Madison is unduly
influencing a property owner to sign an annexation petition contrary to
the safeguards provided in Chapter 66. Although the city claimed that it
is not coercing the Hoepkers because they can refuse to sign an
annexation petition and therefore not receive approval to develop their
land, the court did not find this argument persuasive. If the Hoepkers
signed an annexation petition because the alternative would be to leave
their land undeveloped, their consent would be the product of direct
economic pressure from the city. Thus, the city's action is improper
because it denies the Hoepkers their political right to participate in
an annexation proceeding by voluntarily deciding whether to support or
oppose annexation.
The court stressed that the city is not being forced to approve the
Hoepkers' preliminary plat. If, on remand, the city determines that the
land is unsuitable for the proposed development, it may reject the
preliminary or final plat. However, if the city rejects the plat on
suitability grounds, it must inform the Hoepkers of the particular facts
on which it bases its conclusion and provide them with an opportunity to
present evidence regarding suitability at a public hearing.
The court also considered whether the requirement that the Hoepkers
reconfigure their plat to provide an open space corridor constitutes a
temporary regulatory taking for which just compensation is due under the
Fifth Amendment of the U.S. Constitution, applicable to the states
through the Fourteenth Amendment. The court concluded that the Hoepkers'
takings claim is not presently ripe for adjudication for two reasons.
First, the U.S. Supreme Court has determined that a claim that the
application of government regulations effects a taking of a property
interest is not ripe until the government entity charged with
implementing the regulations has reached a final decision regarding the
application of the regulations to the property at issue. Second, the
Supreme Court has determined that if a state provides an adequate
procedure for seeking compensation, the property owner cannot claim a
violation of the Just Compensation Clause until it has used the
procedure and been denied just compensation.
In the present case, the city has not made a final determination as
to the approval of the Hoepkers' plat. More important, the dimensions
and exact location of the open space corridor are presently unknown.
Since it is impossible to ascertain the nature and extent of permitted
development on the Hoepkers' land, the court could not determine whether
the city's actions are excessive and therefore constitute a "taking."
Further, the Legislature has established a procedure for inverse
condemnation through which an individual may seek compensation for a
regulatory taking. The Hoepkers have not used this procedure.
Accordingly, their regulatory takings claim is not ripe for
adjudication.
Public Utilities
Telecommunications - "Remainder Assessment"
MCI Telecommunications Corp. v. State, No. 91-0915 (filed 13
May 1997)
MCI Telecommunications Corporation (MCI) is a public utility that
provides telecommunications services. It provides interexchange (long
distance) services that originate in Wisconsin and terminate both within
and outside the state.
The Public Service Commission (PSC) is the state agency charged with
regulating all utilities, including telecommunications utilities, in
Wisconsin. Section 196.85(2) of the Wisconsin Statutes authorizes the
PSC to annually assess public utilities to recover expenses reasonably
related to the performance of its regulatory duties. This statute
applies equally to utilities providing water, energy and
telecommunications services. To recover expenses not attributable to a
specific utility, the PSC assesses each utility's share of PSC expenses
on the basis of the utility's "gross operating revenues ... derived
from intrastate operations" (emphasis supplied). See Wis. Stat.
§ 196.85(2). This statute is referred to as Wisconsin's "remainder
assessment" statute.
The PSC interprets the term "intra-state operations" in the statute
quoted above to include revenues from all telecommunications made from a
telephone located within the State of Wisconsin, regardless of whether
the call terminates within or outside the state. MCI brought this
lawsuit to challenge the PSC's interpretation of the statute and
assessments made thereunder arguing that the statute is plain on its
face and that the phrase, "revenues ... derived from intrastate
operations," does not include revenues from telecommunications that
originate in Wisconsin but terminate outside the state. The circuit
court granted MCI's motion for summary judgment, a decision that later
was reversed by the court of appeals. In a unanimous decision authored
by Justice Steinmetz, the supreme court affirmed the court of appeals.
It held that the PSC's interpretation of the phrase "revenues ...
derived from intrastate operations" includes revenues from interstate
communications originating in Wisconsin is a correct interpretation of
the statute.
Torts
Statute of Limitations - Discovery Rule - Medical Malpractice -
Legal Malpractice
Claypool v. Levin, No.
94-2457 (filed 9 May 1997)
While being treated in March 1989, Mrs. Claypool became permanently
blind. A short time later she retained attorney #1 to investigate a
possible malpractice case. Sometime prior to 1992 attorney #1 told the
Claypools that a medical expert had concluded that there was no cause of
action. In the summer of 1993 the Claypools retained attorney #2, who
advised them they did have a viable claim against the treating doctor.
In October 1993 the Claypools brought an action against the doctor and a
separate claim against attorney #1 in the event that the statute of
limitations had expired as to the doctor. The doctor sought summary
judgment on the ground that the statute of limitations had expired.
(Wis. Stat. § 893.55(1)) Attorney #1 opposed the motion, arguing
"that any failure on his part to exercise due diligence should not be
imputed to the Claypools." The circuit court dismissed the claim against
the doctor. The court of appeals, however, reversed.
The supreme court, in an opinion written by Justice Wilcox, reversed
the court of appeals. Under Wisconsin law, "discovery occurs when a
potential plaintiff has information that would give a reasonable person
notice of her injury and its cause. This does not mean that if there is
more than one reasonable cause of the injury that discovery cannot
occur. This standard also does not require that the potential plaintiff
know with certainty the cause of her injury." Moreover, case law
"indicates that a valid legal opinion is not necessary for discovery to
occur[.]" Put another way, "discovery occurs when the potential
plaintiff has information that would give a reasonable person notice of
her injury and its cause regardless of whether she has been given a
misleading legal opinion." On the facts before it, the court held that
the Claypools discovered or in the exercise of reasonable diligence
should have discovered the injury in March or early April 1989. Thus,
her claim against the doctor should have been filed within one year of
that date, as provided in section 893.55(1).
Chief Justice Abrahamson, joined by Justice Geske, dissented. They
contend that there was an insufficient basis on which to grant summary
judgment and would have remanded the case for a jury determination on
whether the Claypools exercised due diligence in not learning of the
injury until the summer of 1993.
Negligent Supervision - Sexual Exploitation of Patients - First
Amendment
L.L.N. v. Clauder, No.
95-2084 (filed 23 May 1997)
The plaintiff alleged that a priest assigned as a hospital chaplain
abused his position by sexually exploiting her. The sole issue before
the court was whether the Roman Catholic Diocese of Madison Inc., was
entitled to summary judgment on plaintiff's claim that it negligently
supervised the priest. The supreme court, in an opinion written by
Justice Crooks, reversed the court of appeals, holding that the Diocese
was entitled to summary judgment.
First, the court held that the First Amendment to the U.S.
Constitution precluded the negligent supervision claim. For purposes of
this case only, the court assumed that a claim for negligent supervision
exists under Wisconsin law. The plaintiff attempted to distinguish
Pritzlaff v. Archdiocese of Milwaukee, 194 Wis. 2d 302 (1995),
on the ground that she was sexually exploited by a hospital chaplain
whom she viewed as a pastoral counselor. In short, this was not a case
involving a priest and a parishioner.
The plaintiff also alleged that the Diocese was put on notice by an
earlier incident involving the same priest and another woman. The court
held, however, that "in order to decide [plaintiff's] claim, a court
would be required to examine the vow of celibacy." Moreover, in order to
assess whether the earlier incident put the Diocese on notice, the court
would have to examine whether the priest who witnessed it was acting
within his authority to bind the Diocese or had a duty to give the
Diocese information about the defendant priest. Such inquiries would
necessitate a consideration of church law, policies or practices. Thus a
court would be unable to apply neutral principles of law.
Second, regardless of the First Amendment claim, the court concluded
that there was insufficient evidence on which the plaintiff could base a
claim for negligent supervision. Other states that recognize such claims
hold employers liable "only if it knew or should have known that its
employee would subject a third party to an unreasonable risk of harm."
In this case it was "undisputed that the diocese had no actual knowledge
of the [defendant priest's] alleged tendency to abuse his position as
chaplain until after the sexual relationship" between him and the
plaintiff ended. The earlier incident involved a "nonpatient"; thus, it
did not provide constructive notice that the priest "was likely to abuse
his position as chaplain to engage vulnerable patients in sexual
intercourse."
Justice Bablitch concurred but declined to reach the First Amendment
issue. Justice Bradley, joined by Chief Justice Abrahamson, dissented on
the ground that the plaintiff's evidence did raise a disputed issue of
fact and because the majority unnecessarily reached and erroneously
resolved the First Amendment issue.
Punitive Damages - Nominal Damages - Retroactive Effect - Excessive
Damages
Jacque v. Steenberg Homes
Inc., No. 95-1028 (filed 16 May 1997)
The plaintiffs, the Jacques, denied Steenberg Homes Inc. permission
to move a mobile home across their property onto an adjacent lot. Upon
learning of the Jacque's rebuff, an assistant manger for Steenberg said
that he did not "give a ____" what they said. His employees then used a
BobcatTM hydraulic excavator to cut a path across the
Jacque's snow-covered field and hauled the home across it. Steenberg
Homes received a $30 citation from the local sheriff. The Jacques sued
and received $1 in nominal damages and $100,000 in punitive damages. The
court of appeals upheld the circuit court's determination that Wisconsin
law precluded the punitive damages based solely on nominal, as opposed
to compensatory, damages.
The supreme court, in an opinion written by Justice Bablitch,
reversed. First, the court held that an award of nominal damages for
intentional trespass to land can support a punitive damages award. The
court's holding qualifies the rule set forth in Barnard v.
Cohen, 165 Wis. 417 (1917). "[T]he Barnard rule sends the
wrong message to Steenberg Homes and any others who contemplate
trespassing on the land of another. It implicitly tells them that they
are free to go where they please, regardless of the landowner's wishes.
As long as they cause no compensable harm, the only deterrent
intentional trespassers face is the nominal damage award of $1. ... We
conclude that both the private landowner and society have much more than
a nominal interest in excluding others from private land."
Second, even though the court was overruling precedent, it held that
the Jacques were entitled to the application of this rule. Steenberg
Homes argued that it deserved "sunburst" effect, thereby limiting the
rule to prospective application only. Neither Steenberg Homes' conduct
nor the Jacque's interest, however, warranted a sunburst
application.
Third, the $100,000 award was not excessive. The court applied the
three factors recently outlined in BMW v. Gore, 116 S. Ct. 1589
(1996): 1) the degree of reprehensibility of the conduct; 2) the
disparity between the harm or potential harm suffered by the plaintiff
and the punitive damage award; and 3) the difference between this remedy
and the civil or criminal penalties authorized or imposed in comparable
cases. In applying the facts to the federal standard, the court also
discussed prior Wisconsin case law which eschews any "simple
mathematical formula." While actual harm and criminal penalties have
"some relevance to the amount of punitive damages," they were not
controlling. In this case Steenberg Homes' egregious and "brazen"
conduct justified the $100,000 deterrent.
Wisconsin Lawyer