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Vol. 73, No. 2, February
2000 |
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Court of Appeals Digest
By Prof. Daniel D. Blinka
& Prof. Thomas J. Hammer
| Administrative Law
| Business Law | Contracts
| Courts |
| Criminal Law | Criminal
Procedure | Death Certificate
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| Education | Evidence
| Family Law | Insurance
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| Municipal Law | Public
Benefits | Real Estate
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| Sexual Predators | Torts
| Zoning |
Family Law
Divorce - Property Division - Use of Coverture Fraction to
Divide Retirement Account
Hokin v. Hokin,
No. 98-3680 (filed 21 Oct. 1999) (ordered published 22 Nov. 1999)
The parties married in 1978 and divorced in 1998. A critical
issue in the divorce case was the division of the husband's retirement
account, which by far was the most significant asset. The trial
court used a coverture fraction to divide the asset. In this
fraction the numerator is the length of the marriage (20 years)
and the denominator is the total number of years the husband
participated in the retirement plan (41 years). The court awarded
20/41 of the value of the retirement account on the date of trial
to the husband and then divided 20/41 equally between the husband
and wife.
The wife contended on appeal that in using a coverture fraction
to divide the largest asset in the marital estate, the court
improperly relied on the Wisconsin Marital Property Act (Wis.
Stat. chapter
766). Under the Marital Property Act a coverture fraction
is applied to determine what portion of a pension is individual
rather than marital property. However, the division of property
upon divorce is not governed by the Marital Property Act but
instead by chapter
767. With regard to the division of property on divorce,
the only property that remains individual property and not subject
to division is property acquired before or during the marriage
by gift or inheritance, or funds acquired from either. All other
property is part of the marital estate, and the court is to presume
that it is to be divided equally, although the court may alter
the distribution after considering various factors. Under the
divorce statute a spouse's entire interest in a pension - whether
existing before the marriage or acquired during a marriage -
is part of the marital estate subject to division in divorce.
The increase in value of property brought to the marriage, including
interest in a pension, also is part of the marital estate subject
to division in divorce.
The appellate court agreed with the wife that no Wisconsin
case has held that the use of a coverture fraction is or may
be permissible to divide a pension. It did not, however, agree
with her conclusion that a trial court may never do so. Property
brought to a marriage is an appropriate factor to consider in
deviating from the presumed equal division of the marital estate
and the coverture fraction may, depending on the facts in a particular
case, be an appropriate way to divide a spouse's pension as part
of the overall division of property. The inquiry in each case
is whether the use of a coverture fraction is a proper exercise
of the court's discretion in dividing the marital estate of the
parties, given the particular facts of the case and the applicable
statutory and case law.
Divorce - Limited-term Maintenance - Substantial Change in
Circumstances
Murray v. Murray,
No. 99-1369-FT (filed 13 Oct. 1999)(ordered published 22 Nov.
1999)
The parties divorced after 25 years of marriage. The family
court approved their marital settlement agreement that resolved
all of the issues between them and the judgment incorporated
the agreement by reference. Among its terms the agreement provided
the wife with limited-term maintenance for 10 years on a downward
sliding scale.
With just two payments remaining under the limited-term maintenance
provision, the wife filed a motion for a modification of the
judgment, seeking a "reasonable sum" of maintenance
beyond the 10-year termination date. The circuit court granted
the motion and the court of appeals, in a decision authored by
Judge Nettesheim, reversed.
Limited-term maintenance has various purposes. In most cases,
it provides the recipient spouse with funds for training that
might lead to employment, thereby creating an incentive for that
spouse to seek employment or better employment. When used for
this purpose, limited-term maintenance seeks to place the recipient
spouse in a self-supporting economic situation by the end of
the maintenance period. The ability of the family court to modify
a limited-term maintenance award serves as a "safety net"
in a situation where the recipient spouse has not been able to
become self-supporting, has not malingered, and has accepted
as much employment as he or she can obtain.
In this case the court of appeals held that the record did
not support the wife's claim that the limited-term maintenance
was designed to provide funds for employment training or to serve
as an incentive to seek more lucrative employment. Among other
things the wife testified that she was satisfied with her employment
at the time of divorce, that she had not sought any other employment
during the ensuing years, and that her current employment situation
is what she had contemplated 10 years earlier at the time of
the divorce. Thus, the wife did not view the limited-term maintenance
award as designed to provide her with funds for training that
might lead to other, more lucrative, employment or to provide
her an incentive to seek employment. Under these circumstances
the "safety net" provided by a modification of the
limited-term maintenance is neither necessary nor appropriate.
The marital settlement agreement resolved all issues between
the parties. It thus served another of the purposes of limited-term
maintenance: limiting the responsibility of the payor-spouse
to a time certain and avoiding future litigation. In such a setting,
absent a substantial change in circumstances, the parties may
rightfully expect that their disputes are in repose and that
they may move on in their lives with relative certainty.
The court held that the law of change of circumstances should
not require the payor-spouse to finance the unwise or imprudent
financial decisions of the recipient spouse. The court stressed
that it was not speaking of unanticipated financial reversals
produced by the recipient spouse's financial decisions. Rather,
it was speaking of financial decisions that a person should reasonably
know would produce economic difficulty or distress. In this case
the wife conducted her financial affairs as if the limited-term
maintenance payments would endure permanently. But, said the
court, it is not the purpose of maintenance - much less limited-term
maintenance - to provide a permanent annuity. Given the wife's
conduct and the other circumstances of this case, the court concluded
that it would be unjust and inequitable to the husband to break
the terms of the parties' agreement and allow for an award of
permanent maintenance.
Marital Property - Pensions - Disposition of Assets When
Employee Murdered the Nonemployee Spouse
Hackl v. Hackl,
No. 99-0499 (filed 7 Oct. 1999) (ordered published 22 Nov. 1999)
Bradley and Diane Hackl were married in 1988. In 1996, as
the two were divorcing, Bradley murdered Diane. He was convicted
of the crime and sentenced to life in prison. Bradley had worked
as a union mason for almost 40 years and had contributed to a
pension fund since 1957. From prison, Bradley applied for and
began to receive monthly pension benefits.
In probate proceedings regarding Diane's estate, her personal
representative asserted that the pension was marital property
and claimed an undivided one/half interest in the pension as
an estate asset. Bradley objected, arguing that Diane's marital
property interest in his pension terminated upon her death, and
that the pension must thus be classified as wholly his individual
property. The circuit court concluded that Diane's interest in
Bradley's pension survived her death and ordered that a constructive
trust be imposed on an undivided one-half of it. In a decision
authored by Judge Deininger, the court of appeals affirmed.
Bradley claimed on appeal that the circuit court erred by
failing to follow sections
766.31(3) and 766.62(5) of the Wisconsin Statutes. Generally,
these statutes provide that a nonemployee spouse's interest in
his or her spouse's "deferred employment benefit plan"
terminates upon the nonemployee spouse's death. There was no
dispute that Bradley's pension fell within the statutory definition
of a "deferred employment benefit plan." However, the
court of appeals concluded that the trial court's order imposing
the constructive trust is consistent with the equitable principle,
which has long applied in Wisconsin, that a murderer should not
be allowed to benefit from his or her crime.
The appellate court further concluded that the circuit court
fashioned the proper remedy by imposing a constructive trust
on what it deemed to be Diane's marital property interest in
Bradley's pension. Bradley's pension constituted marital property,
and Diane retained an interest in a portion of the pension until
the instant of her death. Bradley obtained her interest as a
consequence of his killing her. The Restatement of Restitution
provides that "where two persons have an interest in property
and the interest of one of them is enlarged by his murder of
the other, to the extent to which it is enlarged he holds it
upon a constructive trust for the estate of the other."
The court of appeals concluded that this was precisely the circumstance
presented by this case.
In footnote the court noted that the provisions of Wisconsin
Statutes section
854.14 (1997-98) were not effective at the time of Diane's
death in 1996. Under this statute the "unlawful and intentional
killing of the decedent ... revokes every statutory right or
benefit to which the killer may have been entitled by reason
of the decedent's death." Because the new statute did not
apply to Diane's death, and because the court of appeals decided
the present case on common law principles, it did not consider
whether the statute addresses the termination of a marital property
interest under sections
766.31(3) and 766.62(5) that results from an interspousal
murder.
Insurance
Nursing Homes - Terminated Employees - "Personal Injury
Offenses"
St. Paul Fire and
Marine Ins. Co. v. Hausman, No. 99-1125-FT (filed 5 Oct.
1999) (ordered published 22 Nov. 1999)
Hausman, a licensed social worker, was employed by a nursing
home in 1993. After her internal complaints about substandard
care for residents were ignored, she complained to governmental
agencies. Later that same year she was suspended and then terminated
by the nursing home, which cited her poor performance. Hausman
later brought an action for wrongful termination and related
claims against her former employer, the nursing home. The nursing
home's general liability insurer, St. Paul, brought this declaratory
judgment action seeking a finding that the policy did not provide
coverage on these claims. The circuit court ruled that St. Paul
did not have coverage for the claims.
The court of appeals, in an opinion written by Judge Peterson,
reversed. Section
50.70(1)(e) of the Wisconsin Statutes prohibits employers
from intentionally retaliating against nursing home residents
or employees who report abuses to state officials. Its "overriding
purpose" is to protect both residents and employees. This
purpose was "sufficiently similar and necessary to ensuring
patients' rights" and therefore qualified "under the
insurance policy language as a law similar to a patient's bill
or rights." Finally, it was irrelevant that Hausman's legal
theory of liability was "wrongful discharge"; the nursing
home interfered with her rights and caused damage.
UM Coverage - Unidentified Vehicle
Dehnel v. State Farm
Mut. Auto Ins. Co., No. 98-3187 (filed 30 Sept. 1999)
(ordered published 22 Nov. 1999)
In 1996 Dehnel was driving westbound on a highway when he
passed a semitrailer driving eastbound. As the vehicles passed
one another, ice dislodged from the semitrailer, struck Dehnel's
windshield, and injured him. Dehnel never discovered the identity
of the other driver or the truck's owner. He filed a claim with
State Farm under his uninsured motorist (UM) coverage, which
was denied.
The court of appeals, in an opinion written by Judge Roggensack,
affirmed. Dehnel relied entirely upon section
632.32(4)(a) of the Wisconsin Statutes; he conceded that
the policy language did not provide coverage and that his claim
sounded solely in the statute. Case law required "that the
unidentified vehicle meet the criteria of a statutory hit-and-run
in order to cause it to be an uninsured vehicle for which coverage
was required." The case law further established that "hit-and-run"
status requires "a hit or touching between the two vehicles."
No such contact occurred in this case. Dehnel argued, however,
that his predicament fell within the statute because the truck
carried an object (the ice) that later struck his vehicle. The
court conceded that Wisconsin case law had not addressed this
issue and other states were divided. In the end, however, the
court of appeals was reluctant to enlarge the statutory interpretation
established by the supreme court in earlier decisions.
Municipal Law
Annexation - Referendums
City of Chippewa
Falls v. Town of Hallie, No. 99-0832 (filed 19 Oct. 1999)
(ordered published 22 Nov. 1999)
Owners of real estate located in the Town of Hallie (the town)
petitioned for direct annexation by the City of Chippewa Falls
(the city) pursuant to section
66.021 of the Wisconsin Statutes. The city in effect accepted
the petition. When the town received notice, opponents circulated
a petition for a referendum on the annexation. The requisite
number of qualified voters living in the area proposed for annexation
signed the petition. The city brought this action for a declaratory
judgment to have the petition for referendum declared invalid
because it failed to comply with sections 66.021(5)
and 8.40(2).
Specifically, the petition for referendum had to be circulated
by persons who lived in the area subject to annexation. The circuit
court granted judgment in favor of the city.
The court of appeals, in a decision authored by Chief Judge
Cane, affirmed. Section
8.40(2) of the Wisconsin Statutes requires that an affidavit
of a "qualified elector" appear at the bottom of each
petition circulated. Under section
66.021(5) a petition for referendum can be signed only by
those residing within the proposed area of annexation. Reconciling
the statutes, the court held that "when sec.
8.40(2) requires that the affiant/circulator reside within
the 'jurisdiction or district' in which the petition is circulated,
it can only mean that the affiant/circulator must reside within
the proposed area of annexation."
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