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    Court of Appeals Digest

    Daniel BlinkaThomas Hammer

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    Wisconsin Lawyer
    Vol. 75, No. 5, May 2002

    Court of Appeals Digest

    This column summarizes selected published opinions of the Wisconsin Court of Appeals. 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.

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

    * *

    Civil Procedure

    Discovery Abuse - Admissions - Evidence - Punitive Damages

    Mucek v. Nationwide Comm. Inc., 2002 WI App 60 (filed 21 Feb. 2002) (ordered published 27 March 2002)

    A hotel owner sued NCI, a long-distance carrier, on a variety of claims, including breach of contract, malicious prosecution, and abuse of process. The suit sought compensatory and punitive damages. Despite numerous motions seeking discovery, NCI failed to respond. One year, two lawyers, and numerous missed deadlines later, the court found NCI 100 percent liable, leaving damages as the only remaining issues. Months later another lawyer appeared for NCI and sought to "withdraw" various admissions that the court also had entered against NCI. The trial court refused to do so, citing NCI's history of abuse. In the damages trial, the court permitted evidence of other acts of misconduct by NCI as bearing on punitive damages.

    The court of appeals, in an opinion written by Judge Lundsten, affirmed. First, the trial court properly exercised its discretion when it denied NCI's motion to withdraw the admissions. Under Wis. Stat. section 804.11(1)(b), a court may permit amendment or withdrawal of admissions only if "the merits of the action will be subserved" and if the party who benefits by the admissions will not be prejudiced. Here the hotel owner had established "prejudice," particularly in light of NCI's "ongoing failure to cooperate with discovery" (¶27). Indeed, one of NCI's prior attorneys had himself withdrawn because of such abuses. The court held a judge "may consider a party's history of discovery abuse when deciding whether to permit withdrawal or amendment of admissions, both when determining prejudice under § 804.11(2) and when otherwise exercising the court's authority to control the orderly and prompt processing of a case" (¶28).

    Second, the other acts evidence was properly introduced at the damages phase of the trial. NCI's liability was determined when the court struck its answer and the parties stipulated to compensatory damages. As to the punitive damages claim, prior case law permitted the use of other acts to gauge the seriousness of NCI's conduct. The other acts embraced complaints brought by dissatisfied customers in other states and newspaper articles.

    Finally, the trial court did not err by refusing to lower the punitive damages award. On this record, the $225,000 award was not unreasonably excessive.

    Judge Dykman dissented, arguing that this was the rare case in which "the conduct or character of a litigant so overshadows the merits of a case that the former becomes the reason the litigant cannot be successful at trial" (¶49).

    Criminal Procedure

    Double Jeopardy - Multiple Charges - Same Type of Acts - Volitional Departure

    State v. McKinnie, 2002 WI App 82 (filed 13 Feb. 2002) (ordered published 27 March 2002)

    Waukesha County charged the defendant with carjacking for intentionally taking a vehicle without consent by threat of force and while armed with a dangerous weapon. Approximately 12 hours later, the defendant drove the same vehicle without the owner's consent in the City of Milwaukee. Milwaukee County charged the defendant with operating an automobile without the owner's consent (OAWOC) and he pled guilty to that charge. He then sought dismissal of the Waukesha County carjacking charge because he already had been convicted of the lesser-included offense of OAWOC in Milwaukee County. The Waukesha County Circuit Court denied the motion to dismiss.

    In a decision authored by Judge Anderson, the court of appeals affirmed. It concluded that the defendant engaged in separate, distinct criminal acts and that neither constitutional nor statutory double jeopardy bars apply to his case. Determining whether the defendant's acts are sufficiently different in fact to warrant multiple charges involves a determination of whether the charged acts are separated in time or are of a significantly different nature. The "different nature" inquiry is not limited to an assessment of whether the acts are different types of acts. Rather, even the same types of acts are "different in nature" if each requires a new volitional departure in the defendant's course of conduct. See State v. Koller, 2001 WI App 253.

    In this case the defendant was alleged to have carjacked a vehicle in Waukesha County and then, approximately 12 hours later, again committed himself to driving a stolen car. Each act required a new volitional departure in the defendant's course of conduct and therefore, as alleged, his offenses are separate and distinct and may be separately charged.


    ERISA - Subrogation - "Made Whole" Doctrine

    Bruzas v. Quezada-Garcia, 2002 WI App 57 (filed 6 Feb. 2002) (ordered published 27 March 2002)

    The primary parties in this case, two insurance companies, fashioned a "test case" designed to answer the question whether a right of subrogation under an ERISA plan preempts the "make whole" doctrine (¶12). Bruzas, his wife, and his child were seriously injured in a car accident. Bruzas' ERISA carrier paid more than $16,000 of his medical expenses. The tortfeasor's insurer, American Family, paid its coverage limits of about $40,000, which was far less than the Bruzas' actual damages. The parties agreed that Bruzas was not made whole within the meaning of Rimes v. State Farm Mut. Auto. Ins. Co. (1982). Since American Family also provided Bruzas with underinsurance coverage, it paid him an additional $57,000. The ERISA carrier claimed that it was subrogated to Bruzas for the amount of its medical payments. The trial court agreed and awarded the ERISA carrier about $16,000 (pursuant to the parties' agreement, American Family held Bruzas harmless for this recovery).

    The court of appeals, in an opinion written by Judge Nettesheim, affirmed. The threshold issue before the court concerned the appropriate standard of review to be applied to an ERISA plan administrator's determination. Ultimately, the court did not have to reach the parties' arguments pertaining to the plan's language itself. Rather, the court grappled with the ambiguity created by two court of appeals decisions, Newport News Shipbuilding Co. v. T.H.E. Ins. Co., 187 Wis. 2d 364 (Ct. App. 1994), and Schultz v. Nepco Employees Mut. Benefit Ass'n Inc., 190 Wis. 2d 742 (Ct. App. 1994). It found that Newport News was the "better reasoned" of the two cases and elected to follow its analysis.

    In this case, the ERISA plan did not expressly use the term "discretion," but it nonetheless granted broad authority to the Plan Administrator (PA). Thus, the court was satisfied that the PA "has the requisite discretion contemplated by Newport News, even though the plan language does not use that express term" (¶21). Newport News further provides that the PA is afforded "substantial deference" in determining whether it is entitled to reimbursement based on the policy's subrogation clause. The record in this case betrayed no abuse of discretion.

    Reducing Clauses - UM Coverage

    Janssen v. State Farm Mut. Auto. Ins. Co., 2002 WI App 72 (filed 12 Feb. 2002) (ordered published 27 March 2002)

    Janssen was a passenger who was injured in a two-car accident. Neither of the drivers had insurance. Janssen's own insurer paid the $25,000 limits of her uninsured motorist (UM) coverage. She then sought additional UM coverage under State Farm policies held by her parents. When State Farm applied its reducing clause, which zeroed the coverage, Janssen brought this lawsuit. The trial court agreed that State Farm could apply its reducing clause to the monies paid by Janssen's own UM carrier.

    The court of appeals, in an opinion written by Judge Cane, reversed. The policy language, which was consistent with Wis. Stat. section 632.32(5)(i)1., "refers to payments made by and on behalf of tortfeasors, and not to payments made pursuant to the insured's own uninsured motorist coverage" (¶11). The analysis centered on the phrase, "legally responsible for the bodily injury or death for which the payment is made." The court concluded that Janssen's UM carrier was a "contractually liable party" that did not fall within the "legally responsible" language. This construction also gave effect "to the remaining subsections of § 632.32(5)(i), which provide for a reduction of amounts paid or payable under `any worker's compensation law' or any `disability benefits law.'" Indeed, were worker's compensation or disability payments factored into the formulae, the result would negate the point of UM and underinsured coverage guaranteed by section 632.32(5).

    Juvenile Law

    CHIPS - TPRs - Character Evidence

    La Crosse County DHS v. Tara P., 2002 WI App 84 (filed 14 Feb. 2002) (ordered published 27 March 2002)

    The court of appeals, in an opinion written by Judge Lundsten, affirmed a circuit court's order that terminated Tara P.'s parental rights to two of her children. On appeal Tara alleged that error occurred when the trial court admitted evidence of events occurring prior to the CHIPS dispositional order. The court clarified that despite dicta in a prior case, "the facts occurring prior to a CHIPS dispositional order are frequently relevant to the issues at a termination proceeding" (¶10). To the extent that such dicta pointed to the opposite conclusion, it was "plainly wrong" (¶12).

    In this case the county presented evidence that prior to the dispositional orders and while she had custody of her children, Tara "repeatedly failed to comply with requirements necessary to maintain public assistance benefits (benefits which would have provided money for housing and utilities) and repeatedly failed to keep appointments with Job Service, an employment training program" (¶14). Her "long history" of similar conduct made it highly unlikely that she could meet the stable housing and employment standards within the 12-month period contemplated by Wis. Stat. section 48.415 (2)(a)2.b. and 3. Finally, the court held that a parent's character traits and propensity is a substantive issue in such proceedings.

    Delinquency - Original Disposition - SJOP Placement

    State v. Terry T., 2002 WI App 81 (filed 6 Feb. 2002) (ordered published 27 March 2002)

    In August 1999 the court placed Terry T., then age 12, into a Type 2 facility that offered a sex offender program for persons with cognitive disabilities. The underlying offense involved a sexual assault on a younger child. In 2000 the court granted an extension of the original order, without objection, until August 2001. In February 2001 the state moved to revise the dispositional order and change placement to a Serious Juvenile Offender Program (SJOP) and extend the placement for five years. Despite Terry's objection, the trial court granted the request.

    The court of appeals, in an opinion written by Judge Brown, reversed. Terry's original placement was not to the SJOP or a secured institution. Under the statutes, Terry was not originally eligible for SJOP in August 1999 because of his age, even had the court been so inclined - which it was not. The court of appeals found it "untenable" to place Terry in the program at a later proceeding: "Such a result would allow the State to bootstrap the original sexual assault violation as a basis for placement in the SJOP now that Terry is of age, even though the court had previously concluded secured placement was not the most appropriate setting" (¶16). In summary, the court held "that the five-year SJOP is a placement that must occur at an original disposition; it is not a tool to extend, revise or change a placement already in effect" (¶17).

    Mental Health Laws

    Emergency Detention - Probable Cause Hearing - 72-hour Time Limit

    Dodge County v. Ryan E.M., 2002 WI App 71 (filed 21 Feb. 2002) (ordered published 27 March 2002)

    A police officer took the respondent to the Mendota Mental Health Institute for an emergency detention after the respondent allegedly had threatened to hurt himself and stated that he was depressed.

    A probable cause hearing was held approximately 74 hours after the respondent was detained. At the hearing the respondent moved to dismiss, asserting that the hearing was not held within 72 hours as required by Wis. Stat. section 51.20(7)(a). This statute requires a probable cause hearing "within 72 hours after the individual arrives at the facility, excluding Saturdays, Sundays and legal holidays." There is also a provision for postponement at the detainee's request. The circuit court denied the motion to dismiss and found probable cause to detain the respondent.

    In a decision authored by Judge Dykman, the court of appeals reversed. The 72-hour rule described above is a "strict procedural guideline" that is mandatory and a court loses competency to proceed when there is a failure to comply with it. In reaching this conclusion, the appellate court rejected the county's argument that time should be computed in a case like this by counting days rather than hours and that the first day of detention should not be counted at all.

    Motor Vehicle Law

    Implied Consent - Taking Blood Sample After Implied Consent Refusal

    State v. Marshall, 2002 WI App 73 (filed 5 Feb. 2002) (ordered published 27 March 2002)

    In this case the court of appeals was confronted once again with the issue of whether the implied consent law provides the exclusive remedy upon a refusal to submit to evidentiary testing following an impaired driving arrest such that law enforcement cannot obtain evidence by other legal means. Relying on State v. Gibson, 2001 WI App 71, the court concluded that the implied consent statute does not restrict the police from using other constitutional means to collect evidence of a driver's intoxication.

    While the implied consent statute provides an incentive for voluntary chemical testing, that is, not facing civil refusal procedures and automatic revocation, voluntary testing is not the exclusive means by which blood, urine, or breath samples may be constitutionally obtained. See ¶ 13. While language in some earlier cases describes a driver's "right" not to take the chemical tests, the court concluded that such right of refusal is limited to the right to refuse to submit to a voluntary chemical test. Such refusal, however, does not preclude the police from proceeding with an involuntary test to obtain evidence in support of an impaired driving charge.

    Judge Fine and Judge Schudson submitted separate concurrences.

    Municipal Law

    Claims Against Police Officers - Attorney Fees

    Murray v. City of Milwaukee, 2002 WI App 62 (filed 28 Feb. 2002) (ordered published 27 March 2002)

    The plaintiff sought payment from the City of Milwaukee for legal services he provided to Milwaukee police officers in connection with citizen complaints filed against them. He has served as legal counsel for Milwaukee police officers for many years. His complaint alleged that it is the practice and policy of the City of Milwaukee to cover attorney fees incurred by officers in their defense against citizen complaints.

    The circuit court dismissed the action, granting summary judgment in favor of the city. In a decision authored by Judge Vergeront, the court of appeals affirmed. It concluded that the complaint did not state a claim for relief under Wis. Stat. section 895.35, because the statute does not provide a cause of action for the payment of attorney fees.

    Section 895.35 allows a municipality or county to pay an officer's reasonable expenses incurred in defense of work-related claims if it elects to do so (subject to the other conditions specified in the statute). If the municipality refuses payment, the officer has no cause of action against it under the statute. See Bablitch & Bablitch v. Lincoln County, 82 Wis. 2d 574, 263 N.W.2d 218 (1978). Since neither the attorney nor the officers he represented have a cause of action against the City of Milwaukee under section 895.35, "it logically follows that they do not have a cause of action under [the statute] even if the City unreasonably denies payment. Therefore, even if we take the allegations in the complaint as true - that the City had a practice and policy of reimbursing attorney fees and costs incurred by officers in connection with a defense against citizen complaints - neither [the attorney] nor the officers have a viable claim for payment under [the statute]" (¶ 11).

    The plaintiff urged that because the statute uses the word "may" to describe the municipality's option to pay the officer's reasonable expenses, its decision to pay or not pay is subject to judicial review based on a standard of reasonableness and equity. However, said the court, "nothing in the statute suggests that this is the case" (¶ 13).

    The court also rejected the plaintiff's claims based on unjust enrichment and quantum meruit.


    Register in Probate - Duty to File And Keep All Papers Properly Deposited

    State ex rel. Reise v. Morlen, 2002 WI App 83 (filed 6 Feb. 2002) (ordered published 27 March 2002)

    The general guardian of an heir attempted to file a petition to vacate or modify an order appointing a special administrator in an estate proceeding. The register in probate declined to accept the petition after determining that the guardian was not an interested party to the action involving the estate. The guardian then filed what the court of appeals characterized as a petition seeking mandamus to compel the register to accept the guardian's petition for filing.

    Responding to the petition, the register argued that the petition was insufficient because the party filing it was not an interested party and did not request the appointment of a guardian for the heir. The register argued that evaluating pleadings in this manner is part of her duty to file and keep properly deposited papers. The general guardian argued that the register did not have authority to reject the petition and had a plain legal duty to file the petition so that it might be heard by the court.

    In a per curiam opinion, the court of appeals agreed with the general guardian. The register functions in both a clerical and quasi-judicial capacity. He or she has a duty "to file and keep all papers properly deposited with him or her." See Wis. Stat. § 851.72(1). The register may refuse to accept any paper for filing until the fee is paid. The statute does not, however, provide any other grounds for rejecting a pleading, and the appellate court was not persuaded by the register's argument that she has the authority to reject the general guardian's petition for filing on the grounds she offered. Said the court, "the Register's acceptance of pleadings for filing falls within the Register's clerical functions, and the Register had a plain legal duty to accept the [general guardian's] petition for filing" (¶ 5).

    Unemployment Compensation

    Denial of Benefits - "Misconduct"

    Lopez v. Labor and Industry Review Comm'n, 2002 WI App 63 (filed 21 Feb. 2002) (ordered published 27 March 2002)

    The Labor and Industry Review Commission determined that the plaintiff's physical assault of a coworker constituted "misconduct" and denied him unemployment insurance benefits following his termination from employment because of the assault. The plaintiff argued that the physical assault was not misconduct because he was provoked by a derogatory comment yelled at him by the coworker. This followed months of harassing comments by the coworker about the plaintiff's national origin and the employer's failure to stop the harassing behavior despite the plaintiff's complaints.

    A deputy commissioner for the Unemployment Insurance Division of the Department of Workforce Development found that that the plaintiff's discharge was for misconduct and that he was ineligible for unemployment benefits. The plaintiff then sought a hearing before an administrative law judge. The ALJ concluded that the plaintiff chose to escalate the confrontation from name-calling to a physical assault, that he showed no remorse for his actions, and that he indicated he might take similar action in the future. The ALJ found that the plaintiff's actions amounted to misconduct connected with his work. LIRC affirmed the ALJ's findings and conclusion. The circuit court affirmed LIRC's decision.

    In an opinion authored by Judge Vergeront, the court of appeals affirmed. The court concluded that LIRC could reasonably decide that the plaintiff's physical assault of another employee in reaction to discriminatory harassing comments of a nonphysical nature was misconduct, even though the employer may have failed to properly respond to the plaintiff's past complaints. "While we agree with [the plaintiff] that discriminatory working conditions are a serious matter, we reject his conclusion that his reaction may not reasonably be considered misconduct" (¶ 18).

    Worker's Compensation

    Compensable Injuries - "Second Injury" - Due Deference Standard

    American Manufacturers Mut. Ins. Co. v. Hernandez, 2002 WI App 76 (filed 13 Feb. 2002) (ordered published 27 March 2002)

    Hernandez suffered a "conceded work injury" while employed at Walgreens. Although the injury healed well and Hernandez did not think she needed to return to her treating physician, Walgreen's worker's compensation insurer insisted that the doctor perform a final evaluation of her injury. On the day of the scheduled appointment, Hernandez left work at Walgreens to return home and change clothes. On her way to the doctor's office, she was seriously injured in a car accident. She then filed for temporary total disability; the insurer alleged that Hernandez was not covered by the worker's compensation law.

    Following a hearing, an ALJ ruled that her later injuries were a "direct and natural result" of her prior compensable injury; thus, she was covered. LIRC ultimately upheld the decision that Hernandez's later car-related injuries were compensable, and the circuit court affirmed.

    The court of appeals, in an opinion written by Judge Nettesheim, also affirmed. First addressing the applicable standard of review, the court held that "due deference" to LIRC's "second injury" determination was appropriate because the case presented a "novel" legal issue and LIRC had not developed expertise on this question. The court found "eminently reasonable" LIRC's determination that "Hernandez would not have been in her vehicle on July 14 were it not for the request of ... Walgreen's worker's compensation insurer that Dr. Doermann schedule a final assessment with her" (¶24).

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