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.
Civil Procedure
Notice of Appeal - Signature of Attorney Required - Unauthorized
Practice of Law
Jadair Inc. v. United States Fire Ins.
Co., No. 95-1946 (filed 29 April 1997)
The court of appeals dismissed an appeal filed by Blueprint Engines
Inc. (Blueprint) for lack of jurisdiction. The notice of appeal had been
signed by Mr. Rachinski, the company's "nonlawyer" president.
The supreme court, in an opinion written by Justice Geske, affirmed.
Blueprint correctly argued that the rules of appellate procedure do not
expressly state who may sign a notice of appeal on behalf of a
corporation. But the plain language of the statutes governing the
unauthorized practice of law specifies that "only lawyers can appear on
behalf of, or perform legal service for, corporations in legal
proceedings before Wisconsin courts." Moreover, this requirement did not
violate the corporation's constitutional rights to represent "itself,"
to obtain justice freely, to equal protection, or to due process.
Finally, the nature of the defect warranted the loss of jurisdiction.
"[W]hen a nonlawyer signs and files a notice of appeal on behalf of a
corporation, the assurance required by Wis. Stats. sec. (Rule) 802.05,
that the appeal is well-grounded in fact and is warranted by existing
law or a good faith argument for the extension, modification or reversal
of existing law, is not present."
Criminal Procedure
Post-conviction Relief - Recantations - Newly Discovered Evidence -
New Trial Standard - Corroboration
State v. McCallum, No.
95-1518 (filed 18 April 1997)
Based upon an Alford plea, the defendant was convicted of sexually
assaulting a young girl. The prosecution relied solely upon the victim's
uncorroborated testimony. Later, the victim recanted. The trial judge
denied a motion for a new trial but the court of appeals reversed
because the judge had applied the wrong standard. The supreme court, in
an opinion written by Justice Bablitch, affirmed.
The court addressed two issues. First, the court set forth the
appropriate legal standard for determining whether there is a
"reasonable probability of a different outcome" following a new trial.
The "criteria is whether there is a reasonable probability that a jury,
looking at both the accusation and the recantation, would have a
reasonable doubt as to the defendant's guilt." Second, the court
reaffirmed Wisconsin's rule that newly discovered recantation evidence
must be corroborated. In recantation cases the corroboration requirement
is met if: "1) there is a feasible motive for the initial false
statement; and 2) there are circumstantial guarantees of the
trustworthiness of the recantation." Both criteria were met in this
case, but the court refused to order a new trial. The case was remanded
to the circuit court to make that determination based upon the standards
announced in this case.
Chief Justice Abrahamson concurred, writing separately to discuss the
standard of review in recantation cases and the "reasonable probability
of a different outcome" criteria.
Restitution Proceedings - Statute Of Limitations
State v. Sweat, No.
95-1975-CR (filed 18 April 1997)
The defendant was convicted on a negotiated no contest plea of a
single count of racketeering (securities fraud). By his plea, he
admitted that, as president of Sweat Insurance Inc., he intentionally
and feloniously, in connection with the offer, sale or purchase of
securities, participated in the corporate enterprise through a pattern
of racketeering by committing acts of securities fraud on at least three
occasions.
The issue before the supreme court was whether in restitution
proceedings, section 973.20(14)(b) of the Criminal Procedure Code allows
a defendant to assert a civil rather than criminal statute of
limitations and its related civil tolling and discovery rules, to bar
individual crime victims' claims for restitution. In pertinent part the
statute provides that "the defendant [ordered to pay restitution] may
assert any defense that he or she could raise in a civil action for the
loss sought to be compensated."
In a majority decision authored by Justice Steinmetz, the court
concluded that the same statute of limitations that applies in the
underlying criminal proceedings (Wis. Stat. 939.74), including its
tolling provisions, also applies in the related restitution
proceedings.
Said the court, in restitution proceedings, a defendant should be
able to raise substantive defenses, such as mitigation, set-off or
accord and satisfaction, which go to the measure or amount of total
restitution. However, other civil defenses available in a civil action,
such as contributory negligence, lack of jurisdiction or lack of
capacity to sue or to be sued, simply do not make sense in a restitution
hearing. Neither does the application of a civil statute of limitations
after a defendant has been convicted of a criminal offense.
The trial court is, with limited exceptions, authorized to "waive the
rules of practice, procedure, pleading or evidence" in service of the
goal of "conducting the proceeding so as to do substantial justice." See
Wis. Stat. 973.20(14)(d). Technical or procedural defenses that might be
proper in a civil proceeding may be asserted only to the extent that
they are not inconsistent with the informal nature of a restitution
proceeding and with the general policy goal of achieving "substantial
justice."
Justice Bradley filed a dissenting opinion in which Chief Justice
Abrahamson joined.
Employment
Worker's Compensation Act -Exclusive Remedy -
Fair Employment Act
Byers v. LIRC, No. 95-2490
(filed 18 April 1997)
The sole issue before the supreme court was whether "the exclusive
remedy provision of the Worker's Compensation Act (WCA), bars a claim
brought under the Wisconsin Fair Employment Act (WFEA), prohibiting
discrimination in employment, when the facts that are the basis for the
discrimination claim might also support a worker's compensation claim."
The court, in an opinion written by Chief Justice Abrahamson, held that
the legislature intended to allow petitioners to pursue discrimination
claims under the WFEA regardless of the exclusive remedy provision of
the WCA.
The WCA and the WFEA serve very different purposes. "The WCA focuses
on the employee and his or her work-related injury while the WFEA
focuses on employer conduct that undermines equal opportunity in the
workplace." The WCA does "not identify, fully remedy or adequately deter
an employer's discriminatory conduct. ... Sole reliance on the WCA would
neither address employment discrimination nor serve as a deterrent
against employment discrimination." The supreme court discussed several
factors that justified its construction of the statutes. In particular,
the court wished to avoid a construction that limited claims under the
WFEA to those not covered by the WCA, which would eliminate claims by
those most harmed by discriminatory conduct under the WFEA. The supreme
court expressly overruled or limited several decisions by the court of
appeals that conflicted with the reasoning in this case.
Family Law
Divorce - Child Support Arrearages - Imposition of Trust
Cameron v. Cameron (Wise),
No. 95-0311 (filed 22 April 1997)
Cameron and his wife Wise were granted a divorce in the spring of
1987. The divorce judgment included an order for joint custody and gave
Wise primary physical placement of the couple's three minor children.
Under the divorce judgment terms, Cameron was ordered to pay child
support. The parties did not ask that any child support money be placed
in a trust for the benefit of the children.
Cameron made some payments toward his child support obligation but
fell behind in those payments. In 1993 Wise moved the circuit court for
an order requiring Cameron to immediately pay all past-due child
support. The circuit court determined that Cameron owed $118,000,
including interest, in past-due child support through the end of 1993.
With respect to the arrearages owed, the court ordered a trust created
for the children's benefit, which was to be funded by the arrearages,
including interest. The circuit court made this order without Wise's
consent or without any evidence to support a finding that Wise was
unable or unwilling to appropriately manage the support money. The
circuit court provided that Wise and Cameron would own the trust, but
the court would control the disbursements.
The issue before the supreme court was whether the circuit court
erred by imposing a trust on past-due child support owed by Cameron when
it made no finding that Wise was unable or unwilling to wisely manage
the child support money owed. In a unanimous decision authored by
Justice Geske, the court held that the circuit court erred when it
imposed a trust without the consent of Wise, the primary custodian, or
without any evidence to support a finding that she was unable or
unwilling to wisely manage the support money. The court limited its
holding to the facts of this case which concern support arrearages
stemming from a support order entered before Aug. 1, 1987. The court did
not address the propriety of imposing a trust upon arrearages stemming
from a child support order entered after that date.
With reference to the imposition of such trusts, the court was
persuaded that the standard articulated in Resong v. Vier, 157
Wis. 2d 382, 459 N.W.2d 591 (Ct. App. 1990), with the modification
specified below, is the appropriate standard for assessing the limited
circumstances under which a trust may be imposed on child support
arrearages stemming from a support order entered before Aug. 1, 1987.
The Resong standard involves determining whether the trust is necessary
to the child's best interests, parallel to the statutory scheme for
child custody matters. In the present case the court modified that
standard to require a determination only that the trust is in the
child's best interests. When a noncustodial parent seeks imposition of a
trust on arrearages owed, that parent must demonstrate by substantial
evidence that the trust, which substantially alters the custodial
parent's decision-making authority, is in the children's best interests.
The Resong standard also requires, when the primary custodian does not
consent to the trust, a factual finding as to whether the primary
custodian was incapable or unwilling to wisely manage the child support
money. Without such a finding, a court may not strip the primary
custodian of his or her decision-making authority.
The court also concluded that the circuit judge misapplied the law in
this case by using a trust mechanism, funded by arrearages, to meet
potential future support needs. Said the court, a trust funded with
money earmarked for past needs is not the proper mechanism by which to
address future support needs.
Insurance
Environmental Response Costs - Duty to Defend - "Damages"
General Casualty Co. v.
Hills, No. 95-2261 (filed 22 April 1997)
The circuit court granted summary judgment in favor of an insurer
finding that it had no duty to defend its insured in a third-party
action seeking recovery for environmental response costs. The court of
appeals reversed.
The supreme court, in an opinion written by Justice Crooks, affirmed
the court of appeals. The sole issue before the court was whether the
action sought "damages" within the meaning of the insurance policies.
The court extensively discussed its construction of "as damages"
insurance language in Shorewood v. Wausau Ins. Co., 170 Wis.2d
347 (1992), and City of Edgerton v. General Cas. Co., 184
Wis.2d 750 (1994). "Shorewood and Edgerton demonstrate
that in order to determine whether an action seeks 'damages,' we must
consider the nature of the relief being sought - whether it is remedial,
substitutionary relief that is intended to compensate for past wrongs,
or preventive and focusing on future conduct."
Both cases were distinguishable on three grounds that comported with
the "expectation of a reasonable insured" in the insured's position.
"First, unlike Edgerton, neither the EPA nor DNR have requested
or directed [the insured] to develop a remediation plan or incur
remediation and response costs under CERCLA or an equivalent state
statute. Second, unlike Edgerton, the contaminated property in
this case does not fit within the owned-property exclusion contained in
the insurance policies. Third, unlike Shorewood, [the insured]
is not being sued to comply with an injunction."
Chief Justice Abrahamson concurred, writing separately to state that
"[r]ather than leaving Shorewood and Edgerton to be
overturned in small measures by debatable judicial distinctions, I would
embrace the inevitable by expressly overruling Shorewood and
thereby recognizing the limited application of the Edgerton
decision on damages." (Editor's note: Please see related article elsewhere in this issue.)
Environmental Response Costs - Duty to Defend -
"Damages" - Pollution Exclusion
Wisconsin Public Service Corp. v.
Heritage Mutual Ins. Co., No. 95-2109 (filed 22 April 1997)
The supreme court affirmed the court of appeals in this case based
upon its reasoning in the companion case of General Cas. Co. v.
Hills (see above). Thus, the action sought "damages" within the
meaning of the policy and the insurer had the duty to defend and
indemnify its insured.
This case raised one additional issue, however. A policy contained a
pollution exclusion that stated: "This insurance does not apply to ...
[a]ny loss, cost or expense arising out of any governmental direction or
request that you test for, monitor, clean up, remove, contain, treat,
detoxify or neutralize pollutants." The supreme court agreed with the
court of appeals that this exclusion did not apply because the insured
never received a request from the EPA or the DNR to remediate the
property. (Editor's note: Please see related
article elsewhere in this issue.)
Juvenile Law
CHIPS Proceedings - Applicability to Viable Fetuses
State ex rel. Angela M.W. v.
Kruzicki, No. 95-2480-W (filed 22 April 1997)
The petitioner was an adult carrying a viable fetus. Numerous drug
tests revealed that she was using cocaine or other drugs. The
petitioner's obstetrician reported his concerns to county authorities
who initiated proceedings "to take an unborn child into custody"
pursuant to section 48.l9(1)(c) of the Wisconsin Statutes (1993-94). The
county's motion set out the obstetrician's observations and medical
opinion that "without intervention forcing the petitioner to cease her
drug use," her fetus would suffer serious physical harm. The juvenile
court directed that the petitioner's unborn child be detained under
section 48.207(1)(g) and be transported to a local hospital for
inpatient treatment and protection. The court recognized that such
detention would by necessity result in detention of the mother as
well.
The petitioner responded by presenting herself voluntarily at an
inpatient drug treatment facility. The juvenile court then amended its
order to provide that the detention would be at the inpatient facility
and that, if the petitioner attempted to leave or did not participate in
the facility's drug treatment program, then both she and the fetus were
to be detained and transported to a local hospital.
The county also filed a CHIPS petition in the juvenile court,
alleging that the petitioner's viable fetus was in need of protection or
services.
The petitioner commenced an original action in the court of appeals
seeking a writ of habeas corpus or, in the alternative, a supervisory
writ staying all proceedings in the juvenile court and dismissing the
CHIPS petition. In support of her request, she asserted that chapter 48
does not vest the juvenile court with jurisdiction over her or her
viable fetus. A divided court of appeals determined that the juvenile
court did not exceed its jurisdiction in this case.
The supreme court, in a majority decision authored by Justice
Bradley, reversed the court of appeals. The court's opinion is clear
that this case presented but a single issue: whether a viable fetus is
included within the definition of "child" codified in section 48.02(2)
of the Wisconsin Statutes. This statute defines a "child" as "a person
who is less than 18 years of age." The majority concluded that the
Legislature did not intend to include a fetus within the Children's Code
definition of "child." Rather, it found a compelling basis for holding
that the Legislature intended the term "child" to mean "a human being
born alive." Despite ample opportunity, said the court, the Legislature
has not expressly provided that a fetus is a "child" under the
Children's Code. The court declined the guardian ad litem's invitation
to "take on this burden" to fill the legislative void and it indicated
that the sensitive social policy issues raised in this case weigh
strongly in favor of refraining from exercising CHIPS jurisdiction over
a fetus until the Legislature has spoken definitively on the matter.
Judge Crooks, joined by Justices Steinmetz and Wilcox, dissented.
Municipalities
Zoning - Mining Operations - Conditional Use Permits
-Procedures
Weber v. Town of
Saukville,No. 94-2336 (filed 29 April 1997)
Payne & Dolan, a construction firm that builds roads and bridges,
secured a conditional use permit from a town that permitted it to
extract crushed stone from its quarries. The court of appeals affirmed a
circuit court order that negated the conditional use permit.
The supreme court, in an opinion written by Justice Bradley, affirmed
the court of appeals. The case presented four issues of potential
statewide significance: "1) whether the town's zoning ordinance empowers
the Town Board to issue a conditional use permit which authorizes
blasting and crushing as part of a mineral extraction operation; 2)
whether operation of the quarry is forbidden under the zoning ordinance
proscription against mineral extraction operations where 30 or more
families reside within one-half mile of the proposed site; 3) whether
the town complied with the notice requirements prescribed by the zoning
ordinance; and 4) whether the conditional use application submitted by
Payne & Dolan met the requirements of the zoning ordinance."
First, the court held that blasting and crushing were part of the
mineral extraction process; thus, the ordinance did not prohibit the
quarrying of stone in this manner. Second, the conditional use permit
was not proscribed by the "30 families" rule which barred mineral
extraction operations if 30 or more families resided within a half mile
of the proposed site. Only 27 families actually resided within the
targeted area; the court refused to count "property owners" within the
total. The conditional use permit failed, however, to pass muster under
the third and fourth issues. Specifically, the Town's notice was
defective on a variety of grounds. Although some of the problems were
entirely technical and nonprejudicial, the court held that the failure
to mail or personally notify nine of 36 property owners was fatal. Payne
& Dolan failed to carry its burden of demonstrating that this
omission was not prejudicial. Finally, the conditional use application
was itself incomplete when notice was given of the last public hearing.
For example, the application failed to describe the quantity of water to
be used in the quarry operation or provide a topographic map describing
the quarry's proposed depth.
Taxation
Cruise Vessels on Mississippi River - "Interstate Commerce" Sales
Tax Exemption
La Crosse Queen Inc. v. Wisconsin
Department of Revenue, No. 95-2754 (filed 18 April 1997)
From 1989 until 1991 La Crosse Queen Inc. was the owner and lessor of
a boat known as the La Crosse Queen, an excursion paddle wheeler
exceeding 50 tons. The boat was leased to a related corporation
(Riverboats America Inc.) to provide sightseeing and dinner cruises
exclusively on the Mississippi River. During these excursions the vessel
crossed between Wisconsin and Minnesota waters on the Mississippi.
However, because there are no facilities along its routes where the boat
can dock, all passengers embark and disembark at the same dock in La
Crosse, Wis.
Section 77.54(13) of the Wisconsin Statutes exempts from taxes "the
gross receipts from the sales of and the storage, use or other
consumption in this state of commercial vessels and barges of 50-ton
burden or over primarily engaged in interstate or foreign commerce or
commercial fishing, and the accessories, attachments, parts and fuel
therefor."
The issue before the supreme court was whether the boat leased by La
Crosse Queen Inc. to Riverboats America Inc. was used primarily in
interstate commerce so as to exempt the gross receipts from the lease
from sales tax pursuant to the statute quoted above.
In a majority decision authored by Justice Steinmetz, the supreme
court concluded that the La Crosse Queen was not engaged in interstate
commerce during the years in question and therefore La Crosse Queen Inc.
was not entitled to the tax exemption described above. When the boat
picks up passengers at the wharf in La Crosse for the purpose of an
excursion cruise on the Mississippi River and then returns them to the
same wharf, it is not conducting interstate commerce or interstate
business. Although the vessel crosses over into Minnesota waters, there
is no commerce or business carried on between Wisconsin and Minnesota as
a result of the excursion. The people who use the taxpayer's boat are
not using it for the purpose of being transported from Wisconsin to
Minnesota, but rather for the purpose of recreation and entertainment.
The passengers are in no way involved "with commerce among the states"
simply because they might sail over Minnesota waters during their
excursion.
Chief Justice Abrahamson filed a dissenting opinion in which Justice
Bradley joined.
Wisconsin Lawyer