Vol. 77, No. 11, November 2004

Court of Appeals Digest

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

Administrative Law Criminal Law Criminal Procedure Family Law

Insurance Real Estate Real Property Torts

Administrative Law

Termination - Tenure - Contested Cases - Due Process

Marder v. Board of Regents, 2004 WI App 177 (filed 10 Aug. 2004) (ordered published 28 Sept. 2004)

Marder, a tenured professor, was terminated by the University of Wisconsin Board of Regents (board) based on charges of unprofessional conduct. The circuit court remanded the matter to the board for further action, and both Marder and the board appealed.

The court of appeals, in an opinion written by Judge Peterson, reversed and remanded. Marder's first contention alleged that several improper ex parte communications between the board and other persons had occurred. The court rejected this claim. The court held that there was nothing improper about the board's contacts with the Office of the General Counsel. The board received advice on procedural matters and there was "no indication that the Office of the General Counsel so influenced the Board that the Board's disposition was `psychologically wedded' to the Chancellor's position" (¶ 17).

Marder also alleged that one regent, Marcovich, had improper contacts with the chancellor during a plane ride in Marcovich's private plane. "Marder has merely speculated that because the Chancellor and Regent traveled together, they must have discussed the matter. However, the presumption is that the Chancellor and Regent took their responsibilities seriously, understood that discussing the matter would be improper and therefore avoided any mention of it. Marder has not made a strong showing that would rebut the presumption that the Chancellor and Marcovich acted in any other way than with honesty and integrity" (¶ 19).

The court of appeals agreed with the board that tenure termination hearings are not "contested" cases within the meaning of Wis. Stat. chapter 227. Although dismissal decisions are reviewable under chapter 227, the conduct of the hearing itself is governed by specific administrative regulations authorized by statute, not the contested case provisions of chapter 227 (see ¶¶ 21-25).

The board, however, violated the regulations when it met with the chancellor outside of Marder's presence. The applicable regulation did not "expressly state that a faculty member must be present at the consultation between the Board and the Chancellor" (¶ 28). Yet, when the regulation was read in light of other provisions, the court found it clear that "Marder had the right to hear and refute any allegations the Chancellor raised during the consultation" (¶ 29). The court also determined that Marder's due process right was violated if new and material information was discussed during this meeting (¶ 36).

The final issue addressed the appropriate remedy. The court rejected Marder's contention that the board was so tainted that the only remedy was to reverse its decision terminating Marder. The court of appeals said that the circuit court was in the best position to gauge whether any new and material information was discussed and, if so, the proper remedy.

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Criminal Law

Felony Murder - Offense is Stand-alone Crime - Not a Penalty Enhancer

State v. Mason, 2004 WI App 176 (filed 19 Aug. 2004) (ordered published 28 Sept. 2004)

This case arose under Wisconsin's original truth-in-sentencing laws, but the court's conclusions also are applicable to the current second-stage truth-in-sentencing regime. The question before the court was whether the felony murder statute (Wis. Stat. § 940.03) creates a penalty enhancer that is added to the underlying crimes listed in that statute or instead describes a stand-alone unclassified crime.

The issue is significant because it affects the calculation of the maximum term of initial confinement to which a defendant convicted of felony murder is exposed. In a decision authored by Judge Lundsten, the court of appeals concluded that felony murder is a stand-alone unclassified crime. The maximum initial term of confinement for an unclassified crime is determined by applying a multiplier of 75 percent to the maximum term of imprisonment. The maximum term of imprisonment for felony murder is calculated by adding 15 years to the maximum term of imprisonment for the underlying felony.

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Criminal Procedure

Withdrawal of Guilty Plea - Misinformation Provided to Defendant Regarding Collateral Consequences of Plea

State v. Brown, 2004 WI 179 (filed 31 Aug. 2004) (ordered published 28 Sept. 2004)

The defendant pleaded no contest to six criminal charges, including child enticement, causing a child to view sexual activity, exposing genitals to a child, and intimidating a victim. The parties specifically intended the plea agreement to include only charges that 1) would not require the defendant to register as a sex offender and 2) were not sexual predator offenses that could subject the defendant to post- incarceration commitment under Wis. Stat. chapter 980.

After the defendant was sentenced, he learned that the plea agreement did not accomplish what the parties had intended. In fact, two of the charges required him to register as a sex offender, and a third was a sexual predator offense. He therefore moved to withdraw his no contest pleas, arguing that because he was actively misinformed of the consequences of his pleas and the misinformation went to the heart of the plea agreement, the pleas were not knowingly and voluntarily entered. The circuit court denied the motion.

In a decision authored by Judge Peterson, the court of appeals reversed. Reviewing applicable precedent, the appellate court observed that if the trial court does not disclose a direct consequence of a plea, a defendant may withdraw the plea as a matter of right. However, if the court does not disclose a collateral consequence of a plea (that is, a consequence that does not automatically flow from the conviction and may depend on the defendant's subsequent conduct), a defendant may not withdraw the plea on the basis of that lack of information. In this case the defendant sought to withdraw his pleas not because he lacked information about their consequences (which he acknowledged were collateral), but rather because he was misinformed about those consequences by both his attorney and the prosecutor with the acquiescence of the judge.

The appellate court concluded that the defendant's misunderstanding of the consequences of his pleas undermined the knowing and voluntary nature of the pleas. The plea agreement was purposefully crafted to only include pleas to charges that would not require the defendant to register as a sex offender or be subject to post-incarceration chapter 980 commitment. He entered his pleas believing that he would not be subject to those collateral consequences. His belief, however, was not the product of his own inaccurate interpretation but was based on affirmative, incorrect statements made on the record by his attorney and the prosecutor. The trial court did not correct the statements. Under these circumstances, the pleas were not, as a matter of law, knowingly and voluntarily entered, and the defendant must therefore be permitted to withdraw them. On remand, the case shall resume with a new arraignment on all of the original charges in the information.

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Sentencing - Agreement to Reopen and Amend Judgment if Defendant Successfully Completes Probation

State v. Dawson, 2004 WI App 173 (filed 19 Aug. 2004) (ordered published 28 Sept. 2004)

In this case the parties entered into a plea agreement that provided that the prosecutor would recommend five years of probation and that, if the defendant successfully completed probation, the state would move to reopen the case and amend the charge to a lesser offense. Pursuant to the agreement, the defendant entered a no contest plea and was placed on probation. At the time of sentencing the court did not order the reopen-and-amend provision to be incorporated in the judgment of conviction, but neither did it say anything to indicate that it had rejected that part of the plea agreement. On the contrary, the court's comments at sentencing conveyed that it was receptive to a motion to reopen and amend (see ¶ 15 n.2).

The defendant subsequently moved to withdraw his no contest plea, arguing that the reopen-and-amend provision of the plea agreement is legally unenforceable and that his plea was thus rendered unknowing and involuntary. The circuit court denied the motion.

In a decision authored by Judge Deininger, the court of appeals reversed. In reaching this conclusion, the court relied on State v. Hayes, 167 Wis. 2d 423, 481 N.W.2d 699 (Ct. App. 1992). "We concluded in Hayes that there was simply no statutory authority for a court to reopen a judgment convicting a defendant of a felony and amend it to a lesser charge" (¶ 21). "Our point in Hayes was that, once a charge becomes a conviction, a prosecutor may not amend it, because amending the charge would also necessarily require amending the judgment of conviction to reflect the reduced charge, which no statute authorizes either a prosecutor or trial court to do" (¶ 18). The court concluded that this is true regardless of whether a motion seeking to reopen and amend is filed before or after a probation term has ended.

In this case the defendant established that his plea was not knowingly and voluntarily made because it was induced by the promise of a future benefit that could never be conferred. Thus, the appellate court concluded that, in order to avoid a manifest injustice, the defendant must be permitted to withdraw his plea.

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Elderly Defendant - Age as a Factor in Sentencing

State v. Stenzel, 2004 WI App 181 (filed 11 Aug. 2004) (ordered published 28 Sept. 2004)

The defendant was convicted on two counts of homicide by intoxicated use of a vehicle and one count of injury by intoxicated use of a vehicle and received a 14-year sentence. He challenged the sentence on the ground that the circuit court erroneously exercised its sentencing discretion by placing too much weight on the gravity of the offense and ignoring the many positive attributes of the defendant's 78 years as a productive member of society. The circuit court denied his motion seeking modification of sentence.

In a decision authored by Judge Anderson, the court of appeals concluded that the circuit court properly exercised its discretion when sentencing the defendant. The court of appeals began its analysis by looking to the recent case of State v. Gallion, 2004 WI 42, wherein the Wisconsin Supreme Court reaffirmed a core sentencing concept: to properly exercise its discretion, a circuit court must provide a rational and explainable basis for its sentences.

"[The trial court] must specify the objectives of the sentence on the record, which include, but are not limited to, the protection of the community, punishment of the defendant, rehabilitation of the defendant, and deterrence of others. It must identify the general objectives of greatest importance, which may vary from case to case. The circuit court must also describe the facts relevant to the sentencing objectives and explain, in light of these facts, why the particular component parts of the sentence imposed advance the specified objectives. Similarly, it must identify the factors that were considered in arriving at the sentence and indicate how those factors fit the objectives and influence the sentencing decision" (¶ 8) (citations omitted).

The court of appeals indicated that, while Gallion revitalizes sentencing jurisprudence, "it did not make any momentous changes" (¶ 9). The weight to be given each factor, in particular, is still a determination within the wide discretion of the sentencing judge.

In this case the defendant criticized the circuit judge for placing too much weight on the gravity of the offense and ignoring significant positive factors weighing in the defendant's favor. He argued that the court erroneously exercised its discretion in not giving sufficient weight to his age as a mitigating factor and in not finding his life expectancy to be relevant.

The appellate court agreed that age is a factor that the circuit court may consider as an aggravating or mitigating factor when imposing sentence and that in this case the circuit court did consider the defendant's age. However, the circuit court did not place any weight on the defendant's age because it concluded that the gravity of the offense was enormous. The court explained at the post-conviction hearing that at sentencing it was required to balance the defendant's exemplary life against the gravity of the offense. The court also stated that because efforts at curbing drunk driving had not succeeded, it was necessary to send a message to the public that deaths caused by intoxicated drivers would be severely punished.

The appellate court concluded that the trial judge appropriately exercised discretion when he did not give the defendant's age the overriding and mitigating significance that the defendant would have preferred. The circuit court has the discretion to discuss only those factors it believes are relevant, and the weight that is attached to a relevant factor in sentencing is within the wide discretion of the sentencing court. In this case the judge explicitly linked the sentence imposed to the gravity of the offense and the need to send a message to the public. It was permissible for the court to impose a stiff sentence to emphasize society's concern with the gravity of the offense. The circuit court also appropriately considered the deterrence effect of the sentence.

With regard to the defendant's life expectancy, the appellate court "agree[d] with other jurisdictions that [this factor], coupled with a lengthy sentence, while perhaps guaranteeing that the defendant will spend the balance of his or her life in prison, does not have to be taken into consideration by the circuit court. If the circuit court chooses to consider a defendant's life expectancy, then it must explain, on the record, how [this factor] fits into the sentencing objectives" (¶ 20).

Lastly, the appellate court concluded that the sentence imposed was not so excessive as to be unduly harsh and unconscionable.

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Family Law

Divorce Settlement - Impasse-breaking Authority Granted to Third Party Regarding Choice of Child's School

Lawrence v. Lawrence, 2004 WI App 170 (filed 19 Aug. 2004) (ordered published 28 Sept. 2004)

The issue in this case concerned the parents' agreement, incorporated into the divorce judgment, on the impasse-breaking authority for the choice of their child's school. The provision stated that "the guardian ad litem and the family court counselor shall have the right to break any impasse between the parties as to where [the child] should attend school" (¶ 1). After the guardian ad litem (GAL) and the family court counselor were called upon to make a choice regarding the child's school and did make such a selection, the mother appealed to the circuit court because she disagreed with that selection. She sought a court order regarding choice of school. The circuit court denied the motion, observing that there was no provision for court review of the impasse-breaking decision of the GAL and the family court counselor.

In a decision authored by Judge Vergeront, the court of appeals affirmed. It concluded that the impasse-breaking agreement approved by the court and incorporated into the divorce judgment is not against public policy and is consistent with public policy favoring settlement in divorce cases. "It does not limit the statutory authority of the court to review the impasse-breaking decision: like a decision made by the parent given sole power or impasse-breaking authority, there is no review by the court of the particular decision made, but the other parent may move to modify the grant of power under Wis. Stat. sec. 767.325 upon the requisite showing" (¶ 22). Said the court, "[w]e agree with the circuit court that the provision does not contemplate court review of the impasse-breaking decision and we conclude it does not violate applicable statutes or public policy" (¶ 1).

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Insurance

Reducing Clauses - Anti-stacking

Remiszewski v. American Family Ins. Co., 2004 WI App 175 (filed 4 Aug. 2004) (ordered published 28 Sept. 2004)

This appeal involves an insurance dispute arising out of an automobile accident that caused personal injury. The plaintiff was an insured for purposes of underinsured motorist (UIM) coverage in three policies issued to her father. On summary judgment, the circuit court ruled that the reducing clauses in all three policies were unenforceable, thereby prompting an appeal by the insurer. The court also ruled, however, that the policies' anti-stacking provisions were valid, thereby provoking the plaintiff to appeal.

The court of appeals, in a decision authored by Judge Nettesheim, affirmed in part and reversed in part. The court reversed the circuit court's ruling that the reducing clauses were unenforceable. The reducing clauses stated that "`[t]he limits of liability of this coverage will be reduced by: ... [a] payment made or amount payable by or on behalf of any person or organization which may be legally liable, or under any collectible auto liability insurance, for loss caused by an accident with an underinsured motor vehicle'" (¶ 14). The plaintiff contended that the phrase "amount payable" amounted to illusory coverage for purposes of Wis. Stat. section 632.32(5)(i), but the insurer argued that it invoked the "payment made" provision in rejecting the plaintiff's demand for full coverage. The court agreed with the insurer. "The fact that an insurance policy may include arguably ambiguous language upon which the insurer has not relied is of no consequence and will not defeat the right of an insurer to reduce its limits of liability under a valid provision" (¶ 17). In sum, the applicable reducing clause contained in the UIM endorsement was clear and unambiguous. "[N]either the structure and organization of American Family's policy, nor any provisions therein, renders the reducing clause contextually ambiguous" (¶ 24).

The court of appeals upheld the circuit court's ruling that the anti-stacking provisions were valid. Although the anti-stacking clause did not contain the complete text of section 632.32(5)(f), it nonetheless "clearly conveys that regardless of the number of policies held by a claimant, American Family's coverage will not exceed the UIM maximums" (¶ 27).

The court also rejected the argument that the anti-stacking provision conflicted with an allegedly "pro-stacking" clause in the UIM endorsement and that the anti-stacking provision should have been included in the "Other Insurance" section of the policy. "Given the structure of the American Family policies and the language of the two provisions, which state distinct purposes, we conclude that a reasonable person reading the anti-stacking language and the other insurance clause would understand that the anti-stacking provision is a limit of liability while the `Other Insurance' clause pertains to the manner in which American Family will address the existence of other primary coverage. A reasonable insured would not be misled or receive a false signal by the location or language of the anti-stacking provision" (¶ 31).

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Real Estate Law

Lis Pendens - Discharge - Appeal

Zweber v. Melar Ltd., 2004 WI App 185 (filed 3 Aug. 2004) (ordered published 28 Sept. 2004)

Zweber sued Melar Ltd., seeking specific performance of a real estate contract among other claims. Melar counterclaimed for slander of title. The circuit court dismissed Zweber's complaint on summary judgment but refused to dismiss Melar's counterclaim. Later, however, the circuit court granted an order discharging the lis pendens even though the counterclaim remained unresolved. Zweber appealed.

The court of appeals, in an opinion written by Judge Hoover, reversed because a "lis pendens under Wis. Stat. § 840.10(1) must be maintained as long as there are pending proceedings in an action, including appellate proceedings" (¶ 15). A lis pendens serves "as notice of pending litigation that may affect real estate" (¶ 6). It furthers two objectives. First, a lis pendens preserves the status quo of the property pending the end of litigation. Second, it provides notice to third parties.

The court held that "based on the language of Wis. Stat. § 840.10 and the objectives of both common law and statutory lis pendens, a lis pendens may not be discharged until all opportunities for appeal expire or are exhausted, except as provided otherwise by statute" (¶ 10). "Wisconsin Stat. § 840.10(1) provides that subsequent purchasers `shall be bound by the proceedings in the action' to the same extent as the actual parties. In any given action, the parties would naturally be bound by the results of appellate proceedings. Since purchasers are to be bound as if they were parties, they too must be bound by appellate proceedings. Thus, discharging the lis pendens before the expiration or exhaustion of the appellate process defeats both the notice and preservation objectives" (¶ 11).

Moreover, "the discharge of the lis pendens under Wis. Stat. § 840.10(3) is contemplated as the final, closing step in litigation the same way that the discharge of an attachment or a satisfaction of judgment concludes a case. After all the appeals are exhausted, either the plaintiff will have prevailed and the defendant will have to comply with the court's order regarding disposal of property or the defendant will prevail and the plaintiff's claim against the property will be extinguished. In either case, once the property is handled according to the judicial order, circuit court personnel will be able to remove the lis pendens. Even if the statute did not provide any manner for discharge, the lis pendens itself would naturally cease to operate once the appellate process has expired or been exhausted because there will no longer be pending litigation" (¶ 14).

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Real Property

"Takings" - Fair Value - Other Sales

Pinczkowski v. Milwaukee County, 2004 WI App 171 (filed 31 Aug. 2004) (ordered published 28 Sept. 2004)

Pursuant to its "master plan" for expansion, Milwaukee County began condemnation actions against properties adjacent to Milwaukee's airport. The plaintiffs owned a large lot and a residence in an area that was zoned for commercial uses; thus, their use was "non-conforming." After the plaintiffs rejected the county's offers to purchase, the county acquired the property through eminent domain proceedings and paid the plaintiffs about $350,000. Dissatisfied with the award, the plaintiffs appealed.

The court of appeals, in an opinion authored by Judge Curley, affirmed. First, the trial court properly excluded evidence of the selling prices of adjacent properties, because case law "prohibits the introduction of evidence of the amounts paid for land purchased in settlement or contemplation of condemnation" (¶ 15). The majority rejected the plaintiffs' contentions that "foreign law" supported the admissibility of this proof and that the record reflected "voluntary sales." "Given the longstanding and well-established precedent, we see no need to look to foreign law as the facts here fall squarely within the rule and do not permit a different result. The sales of the adjacent properties were accomplished as part of the airport expansion and the sellers were well aware of the County's intentions to eventually acquire their land for this purpose" (¶ 20).

Second, the trial court also properly excluded a letter that the plaintiffs attempted to offer to show that a third party had some interest in purchasing their property and thus that there was a "private market for the property" (¶ 23). "The general rule in Wisconsin is that unaccepted offers are impermissible as proof of fair market value in condemnation cases. However, in certain situations, fair market value may be proved using offers to purchase, but only when they are `made with actual intent and pursuant to actual effort to purchase'" (¶ 27) (citation omitted). The record here demonstrated that the "letter was conditional and had expired, it does not appear to have been an offer, and its use as an indication of fair market value would, indeed, have been purely speculative" (¶ 29).

Finally, the plaintiffs were not entitled to a "housing replacement payment" under applicable regulations. [This part of the opinion is fact-intensive and space limitations preclude further discussion.]

Judge Wedemeyer dissented; he would have permitted the introduction of evidence concerning the other sales on the ground that these sales were voluntary, arms-length transactions.

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Torts

Economic Loss - "Product" - Integrated System Rule - Invited Error

Linden v. Cascade Stone Co., 2004 WI App 184 (filed 17 Aug. 2004) (ordered published 28 Sept. 2004)

The Lindens built a new house, which they moved into in November 1999. In June 2000 they sued various subcontractors (and others) for moisture damage sustained by their home. The complaint alleged tort and contract violations. The circuit court granted summary judgment in favor of the subcontractors. The court held that the economic loss doctrine precluded the tort claims against all parties and that an insurance policy provided no coverage for a key contract claim. The Lindens appealed.

The court of appeals, in an opinion written by Judge Peterson, affirmed. First, the court held that the economic loss doctrine barred the tort claims. Although the plaintiffs argued that their claim related to "services," the court agreed with the defendants that the transaction's predominant purpose concerned "the sale of a product - a house" (¶ 10). "Although the Lindens' complaint is framed in negligence, their claim is that they did not get what they bargained for: a fully functional home without water infiltration problems. All damages are economic losses as the result of a failed product" (¶ 17).

In response to the Lindens' argument that construction of their home involved more services than products, the court explained that the "predominant purpose test is not a fixed calculation weighing dollars or percentages"; instead, courts consider contracts' "`thrust, their purpose'" (¶ 19). Analyzing the contract and the billings, the court was satisfied that the Lindens had entered into a "product contract" (¶ 22). In response to the Lindens' contention that the moisture problem had damaged "other property," the court held that the economic loss doctrine nonetheless applied because of the integrated system rule. "The stucco siding and roof serve no independent purpose other than as part of the house. Accordingly, they are component parts of the integrated system - the house. Any damage to other portions of the house does not constitute damage to `other property'"(¶ 26).

The court also rejected the Lindens' argument that an insurance policy covered the contract claim against one subcontractor, because, the court said, the Lindens "invited any error by the trial court" (¶ 27). Specifically, the Lindens conceded the issue of coverage based on their "understanding of the coverage of commercial general liability policies" (¶ 29).

Finally, the circuit court properly exercised its discretion when it denied the Lindens' request to amend their pleadings to add a contract claim against another party.

Clergy Abuse - Statute of Limitation

Schauer v. Diocese of Green Bay, 2004 WI App 180 (filed 3 Aug. 2004) (ordered published 28 Sept. 2004)

Buzanowski allegedly molested the plaintiff in 1988 when the plaintiff was 10 years old. At the time, Buzanowski was a priest. Although the plaintiff reported the sexual abuse to the police in 1990, no charges were issued, and the police warned the plaintiff not to say anything about the allegations. Allegedly the diocese threatened to bring a defamation action against the plaintiff if the accusations were made public. Buzanowski later admitted to molesting 14 other boys between 1969 and 1988. The plaintiff brought this action against the diocese and the school that employed Buzanowski. The circuit court granted summary judgment to the defendants on the ground that the plaintiff's claims were time barred.

The court of appeals, in an opinion authored by Judge Peterson, affirmed in part and reversed in part. The plaintiff first argued that the action was timely because Wis. Stat. section 895.70(2) extends the statute of limitation for up to 15 years when the abuse occurs during "therapy." Nonetheless, case law holds that section 895.70 does not extend liability to the therapist's employer. Thus, the statute provides no claim against the diocese or the school, only against Buzanowski.

The court of appeals reversed and remanded the plaintiff's equitable estoppel claim because the trial judge failed to consider this argument. Factual investigation was needed to determine whether the diocese knew of the priest's earlier assaults, whether the diocese and the school had threatened the plaintiff, "what caused the inducement to delay to cease, and whether the delay was reasonable" (¶ 18).

Finally, the court of appeals held that controlling case law defeated the plaintiff's argument under the discovery rule. "[The plaintiff] knew Buzanowski through church and school and knew that Buzanowski engaged in sexual contact with him. [The plaintiff] discovered or, in the reasonable exercise of diligence, should have discovered that he was injured at the time of the assault. Thus, [the plaintiff's] claim of negligent retention and supervision against the diocese and the school accrued at the same time as his claims against Buzanowski. Consequently, as a matter of law, the discovery rule does not apply to his claim against the diocese and the school" (¶ 26).

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