Vol. 70, No. 7, July
1997
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. |