Criminal Procedure

Terry Stop – Reasonable Suspicion

State v. Meddaugh, 2022 WI App 12 (filed 17 Feb. 2022) (ordered published 30 March 2022)

HOLDING: A law enforcement officer did not have reasonable suspicion to conduct an investigatory stop of the defendant.

SUMMARY: A deputy sheriff patrolling in Wisconsin Rapids observed an individual clad in black clothing riding a bicycle on a school playground at 12:39 a.m. At the time the state was under a “Safer at Home” order because of COVID-19. The deputy caught up to the bicyclist, pointed the squad car’s spotlight at the bicyclist, and yelled for the bicyclist to stop. The bicyclist looked in the direction of the deputy, waved a hand, and kept going, traveling at a normal pace. The deputy followed the bicyclist into an adjacent neighborhood, caught up to the bicyclist, and again directed the squad’s spotlight at the bicyclist. The bicyclist stopped, and the deputy announced that he was a law enforcement officer.

All parties and the court of appeals agreed that at this juncture, the bicyclist (the defendant) was seized for purposes of the Fourth Amendment – an investigatory stop having been made. See Terry v. Ohio, 392 U.S. 1 (1968). The investigation following the stop included a search of the defendant, which revealed items suspected of being contraband. Once charged with various crimes, the defendant moved to suppress all evidence recovered after the investigatory stop, arguing that the officer lacked reasonable suspicion to conduct the stop. The circuit court denied the motion, and the defendant thereafter entered a no-contest plea to a drug felony.

In an opinion authored by Judge Blanchard, the court of appeals reversed. It concluded that the deputy lacked reasonable suspicion to conduct the investigatory stop (see ¶ 11). The court of appeals held that “none of the facts or circumstances [as described above] meaningfully contributed to reasonable suspicion, so that the facts as a totality could not constitute reasonable suspicion” (¶ 16).

Among other things, the court noted that the defendant was not illegally on the school grounds when he was first observed, and he was not violating the Safer at Home order by bicycling alone in the middle of the night. The time of these events in the circumstances as described did not contribute to reasonable suspicion nor did the clothing of the defendant (which did not involve a potential attempt at self-concealment).

The court also considered the fact that the defendant did not stop when the deputy yelled for him to do so. Said the court: “This also does not provide an articulable fact reinforcing reasonable suspicion because reasonable suspicion did not exist prior to this moment”
(¶ 23). Case law establishes that when a police officer, without reasonable suspicion or probable cause, approaches an individual, the individual has a right to ignore the police and go about their business. See State v. Young, 2006 WI 98, 294 Wis. 2d 1, 717 N.W.2d 729. Moreover, the defendant kept riding at a normal pedaling pace and took no evasive action and gave no otherwise suspicious reaction to the deputy’s presence and actions (see id.).

Evidence

Character Proof – Untruthful Instances

State v. Stroik, 2022 WI App 11 (filed 24 Feb. 2022) (ordered published 30 March 2022)

HOLDINGS: 1) Evidence of the defendant’s “sex drive” was inadmissible at trial but defense counsel was not ineffective in responding to it. 2) Counsel was ineffective in failing to investigate and introduce evidence of a prior untruthful accusation of sexual assault.

SUMMARY: The defendant was convicted by a jury of sexually assaulting a young child. At trial, defense counsel did not object to testimony about the defendant’s “sex drive,” including the defendant’s relationship with the victim’s mother, and during postconviction proceedings, postconviction counsel stated that trial counsel had failed to investigate a prior instance in which the child had falsely accused another person (a boy) of sexual assault. The circuit court rejected the defendant’s motions to set aside the convictions.

The court of appeals reversed in an opinion authored by Judge Graham. The “high-sex-drive” evidence was patently inadmissible under Wis. Stat. section 904.04(a) as proof of the defendant’s character and propensity to act in conformity with the character trait (see ¶ 39). Nor was the evidence admissible as “other-acts” proof (¶ 47). At trial, the victim’s mother testified in detail about the defendant’s “sex drive,” including his use of pornography. In closing argument, the prosecutor argued that this evidence revealed the defendant’s sexual motivation in touching the victim. Defense counsel failed to object to any of the “sex-drive” evidence at trial. Nonetheless, defense counsel’s “persuasive” closing argument effectively rebutted the inadmissible evidence and demonstrated that counsel’s assistance was effective for purposes of the Sixth Amendment.

The court nevertheless reversed the conviction, based on trial counsel’s failure to investigate and introduce evidence that the victim had falsely accused another person, a young boy, of sexually assaulting her, as revealed by postconviction counsel. Although the allegation was disputed, a reasonable jury could have found that it is more likely than not that the victim had made a prior untruthful allegation of sexual assault (see ¶ 58). Moreover, such evidence would have “significantly enhanced counsel’s chosen [defense] strategy” (¶ 62). The lapse amounted to ineffective assistance of counsel because it was “strikingly similar” to the victim’s accusation in this case and undermined the “uniform accounts” of the victim’s truthfulness (¶ 67).

Insurance

Duty to Defend – Insured’s Failure to Provide Responses to Insurer’s Discovery Requests in Coverage Proceedings – Invocation of Fifth Amendment Privilege

Link v. Link, 2022 WI App 9 (filed 1 Feb. 2022) (ordered published 30 March 2022)

HOLDING: The circuit courts correctly determined that the defendant’s homeowner’s insurance provider had no duty to defend or indemnify the defendant because he breached the terms of his homeowner’s insurance policy by failing to comply with the company’s discovery requests in the coverage proceedings.

SUMMARY: Various plaintiffs sued Link for conduct such as posting sexually suggestive photographs or sexually suggestive and false commentary about them on a “members-only fetish website.” Link tendered his defense to Midwest Family Mutual Insurance Co., seeking coverage under the personal-injury endorsement to his homeowner’s policy. During its coverage investigation, Midwest served various discovery requests on Link. He did not respond to these requests, instead invoking his Fifth Amendment privilege to avoid self-incrimination.

Based on Link’s discovery noncompliance, Midwest filed summary-judgment motions arguing that, under the terms of the policy, Link was required to cooperate with the coverage investigation and not conceal or misrepresent any material facts. Midwest contended that the discovery noncompliance represented a breach of Link’s contractual duties, thereby eliminating any possible duty of Midwest to provide coverage for the underlying claims. The circuit courts agreed and granted summary judgment in favor of Midwest. In an opinion authored by Judge Nashold, the court of appeals affirmed.

The endorsement to Link’s homeowner’s policy has both a concealment clause and a cooperation clause. The former provides that Midwest does not provide coverage to an insured who, whether before or after a loss, concealed or misrepresented any fact upon which Midwest relies, if the concealment or misrepresentation is material and is made with intent to deceive. The cooperation clause requires the insured to cooperate with Midwest in the investigation, settlement, or defense of any claim or suit; it further states that Midwest has no duty to provide coverage if the insured’s failure to do so is prejudicial to Midwest (see ¶ 8).

The court of appeals concluded that the undisputed facts in this case show that Link violated both the concealment and the cooperation clauses of the policy and that these contractual breaches represent independent bases for denying coverage (see ¶ 10).

As for the concealment clause, the court found that Midwest’s discovery requests sought information that was directly and patently germane to Midwest’s investigation of the case; it further held that Midwest was not required to show that Link’s discovery noncompliance was prejudicial (see ¶¶ 23-24).

With respect to the cooperation clause, Link was required to cooperate with coverage counsel and truthfully represent all material facts in the coverage dispute; without Link’s discovery responses, Midwest was prejudiced in its ability to evaluate coverage (see ¶ 34).

The court rejected Link’s central argument that an insured’s invocation of a Fifth Amendment privilege in a coverage dispute cannot be grounds for coverage denial. However, in State Farm Fire & Casualty Insurance Co. v. Walker, 157 Wis. 2d 459, 459 N.W.2d 605 (Ct. App. 1990), the court of appeals considered and rejected this general argument in the context of applying a policy’s concealment clause.

In the present case, the court of appeals held that Walker controls and that its analysis applies to both the concealment and the cooperation clauses of Link’s policy (see ¶ 11). Said the court: “We conclude that Walker controls and that the threat or possibility of parallel criminal charges did not relieve Link of his contractual duties under the policy” (¶ 20).

Real Estate

Statute of Repose – Statute of Limitation

Wascher v. ABC Ins. Co., 2022 WI App 10 (filed Feb. 2022) (ordered published 30 March 2022)

HOLDINGS: 1) The circuit court properly dismissed claims sounding in negligence and breach of contract that related to the home’s original construction. 2) The circuit court also properly denied summary judgment based on one party’s later repair work to the home.

SUMMARY: A newly built home sustained damage from the alleged improper installation of stone cladding during its original construction. The owners also alleged that later repair work caused additional damage without fixing the problem. As to claims tied to the home’s original construction, the circuit court ruled that the negligence claims were barred by the economic loss doctrine and that the breach-of-contract claims were barred by the statute of repose and the statute of limitation. With respect to later failed attempts to repair the problem by one defendant (Carved Stone), the court denied summary judgment on both the negligence and the breach-of-contract claims. Both sides appealed.

The court of appeals affirmed in an opinion authored by Judge Stark. In rejecting the homeowners’ wide-ranging appeal, the court succinctly summarized its rulings as follows:

“(1) [T]he statute of repose bars the Waschers’ negligence claims stemming from the original construction of their home; (2) the statute of limitations bars the Waschers’ breach of contract claims stemming from the original construction; (3) neither equitable estoppel, the repair doctrine, nor the continuous treatment rule extends the statute of limitations or statute of repose; (4) the statutory notice provided by the Waschers pursuant to Wis. Stat. § 895.07(2) did not extend the statute of limitations or statute of repose; (5) the statutes of limitations and repose bar the Waschers’ claim for injunctive relief; and (6) the fifteen-year statute of repose for product liability claims in Wis. Stat. § 895.047(5) does not apply to the Waschers’ claims against Natural Surfaces” (¶ 17).

These holdings obviated consideration of the economic loss doctrine’s application.

As to the failed-repair-work claims, the court rejected the appeal by defendant Carved Stone. Neither the economic loss doctrine nor the statute of limitation barred claims sounding in negligence and contract (see ¶ 59).