Court of Appeals Digest
By Prof. Daniel D. Blinka & Prof. Thomas J.
Hammer
| Civil Procedure | Criminal
Procedure | Evidence | Family Law
| Insurance | Juvenile Law | Torts | Worker's Compensation |
Civil Procedure
Pleadings - Failure to Respond - Default Judgment
Holman v. Family Health
Plan, No. 97-1490-FT (filed 30 Dec. 1997) (ordered published 28
Jan. 1998)
Plaintiff was injured in a car accident. She named Family Health Plan
(FHP), her group health insurer, as a defendant because of its potential
claim for subrogation and reimbursement. The complaint sought to
foreclose FHP's subrogation claim if FHP did not make a timely
appearance in the action. FHP conceded that it was properly served and
did not answer or interpose any other responsive pleading within the
20-day limit provided by section 802.06(1) of the Wisconsin Statutes.
The plaintiff obtained a default judgment against FHP. The trial judge
later denied FHP's motion to reopen the default judgment; FHP argued
unsuccessfully that it had been inaccurately named as a defendant,
rather than an involuntary plaintiff, and hence was under no obligation
to respond.
The court of appeals, in an opinion written by Judge Nettesheim,
affirmed. Section 803.03(2)(a) of the Wisconsin Statutes requires
joinder of parties with subrogated or derived claims but fails to
specify whether such parties are joined as plaintiffs or defendants.
Assuming "arguendo" that the plaintiff improperly designated FHP as a
defendant instead of a plaintiff, the issue remained whether FHP was
obligated to raise this issue by a timely responsive pleading. The court
held that "[e]ven though misjoinder is not a basis for dismissal of an
action under sec. 803(6)(1), Stats., ... it constitutes a 'defense in
law' which must be raised pursuant to sec. 802.06(2)(a), Stats." Motions
to amend the caption are "routinely filed" within the 20-day period "and
the improperly joined defendant may then be excused from answering." But
here FHP filed its motion beyond the 20-day limit and without excusable
neglect as required by section 806.07. Common sense also supported this
construction because "otherwise, a misjoined party could simply ignore
an otherwise proper pleading which has been properly served and which
provides full notice of the claim." Since a default judgment can be
taken against a party "who may not actually be liable to the claimant,
it logically follows" that the law permits a default against a tardy
party whose misjoinder defense "raises no such prospect."
Substitution - Chapter 980 Commitments
State v. Brown, Nos. 96-1211 and 96-1393 (filed 23 Dec. 1997)
(ordered published 28 Jan. 1998)
The state filed petitions against the respondents seeking to commit
them as sexually violent persons under chapter 980 (the "sexual
predator" law). They appealed from trial court orders stating that they
had no right to judicial substitution in the chapter 980 proceedings.
The court of appeals, in an opinion authored by Judge Curley, reversed.
The court held "that Chapter 980 ... is subject to the provisions of
Chapters 801 to 847. The only exception to the general rule embodied in
sec. 801.01(2) that 'Chapters 801 to 847 govern procedure and practice
... in all civil actions and special proceedings' is 'where [a]
different procedure is prescribed by statute or rule.' There is no
language in Chapter 980 prescribing a different procedure. Thus, the
right to judicial substitution embodied in section 801.58 applies to
Chapter 980 proceedings."
Criminal Procedure
Sentencing - Imposition of Costs at Restitution Hearing
State v. Perry,
No. 97-0847-CR (filed 18 Dec. 1997) (ordered published 28 Jan. 1998)
The defendant was convicted of four counts of uttering a forged
writing and was sentenced to a term of imprisonment. At sentencing the
judge also ordered that the defendant pay restitution to the victims of
his forgeries and directed the state to submit a proposed restitution
order.
At a restitution hearing held two months after sentencing, the court
ordered the defendant to pay the cost that the state had incurred to
extradite him from Texas to answer these charges. Among the issues on
appeal was whether the court had the power at a proceeding conducted
subsequent to sentencing to order payment of extradition costs.
The court of appeals, in a decision authored by Judge Deininger,
reversed the circuit court. Extradition expenses are statutory costs
under Wis. Stat. section 973.06; they are not included within the
concept of "restitution." The court of appeals agreed with the defendant
that the judge lacked authority to impose these additional costs at a
point in time subsequent to sentencing. The restitution hearing had been
convened solely for the purpose of determining an appropriate amount of
restitution it was not for the purpose of a continued sentencing
hearing. Said the court, a judge may not, subsequent to sentencing,
impose costs under section 973.06 that were not ordered during the
sentencing proceedings.
Interstate Agreement on Detainers Time Limitations
State v. Grzelak,
No. 97-1454-CR (filed 9 Dec. 1997) (ordered published 28 Jan. 1998)
Article III of the Interstate Agreement on Detainers (Wis. Stat.
§ 976.05(3)) requires that a prisoner who demands final disposition
of "any untried indictment, information or complaint" must be brought
"to trial within 180 days." In this case the court of appeals had to
confront the issue of whether this time limitation applies to detainer
requests where the prisoner has already been convicted but not
sentenced.
The defendant was charged with multiple counts of burglary and
entered pleas of no contest to them. The trial court accepted his pleas,
found him guilty, and scheduled sentencing. The defendant failed to
appear at sentencing and a bench warrant was issued for his arrest.
At some point after his failure to appear, the defendant was
imprisoned in Iowa. Pursuant to the detainer statute, he filed a demand
to be returned to Brown County, Wis., to conclude the pending burglary
charges. He was in fact returned to Brown County circuit court, but his
sentencing on the burglaries took place more than 180 days after the
prosecutor received the demand described above. His motion to dismiss
all charges with prejudice was denied by the circuit court, and the
court of appeals, in a decision authored by Judge Hoover, affirmed.
The appellate court concluded that the Interstate Agreement on
Detainers requires that the detainee be brought to trial within 180 days
not that the trial be concluded within that time limit. The time
limitation is satisfied upon the trial commencing within 180 days of the
prosecutor's receipt of the detainee's demand. The time limit does not
apply when the defendant has already been convicted but not yet
sentenced. Accordingly, the circuit court properly denied the
defendant's motion to dismiss.
Evidence
Civil Actions - Discovery of Nonparty's Medical Records
Winnebago County Department
of Social Services v. Harold W., No. 96-2733 (filed 3 Dec.
1997) (ordered published 28 Jan. 1998)
Harold W. appealed a trial court order removing him as coguardian of
his daughter, who suffers from severe disabilities and is thus
incompetent and unable to care for herself. The petition for the
appointment of a successor guardian, which was filed by the county
department of social services, was based upon allegations that Harold
had engaged in sexual improprieties with his daughter.
Among the issues on appeal was Harold's contention that the trial
court erroneously refused him access to the medical records of a
critical nonparty witness. That witness was a woman with a lengthy
psychiatric history, including a diagnosis of schizophrenia. Harold
maintained that when the trial court denied his request to access her
psychiatric records, he was deprived of crucial information that may
have been used to demonstrate that the witness's "perception, memory,
judgment and concentration were all adversely affected by such
conditions."
In a decision authored by Judge Nettesheim, the court of appeals
affirmed. Harold conceded before the appellate court there was no case
law that supports his request that the trial court order discovery of a
nonparty witness's medical records in a civil action. Instead, he urged
the court of appeals to extend its holdings in certain criminal cases to
civil actions.
In those criminal cases the court of appeals addressed the
circumstances under which a defendant could have access to the victim's
a nonparty witness's medical records. It held that a
defendant who seeks access to a witness's medical records must make a
preliminary showing that the evidence is relevant and necessary to a
fair determination of guilt or innocence.
In this case Harold contended that there should be no distinction
drawn between the alleged victim in a criminal case and a nonparty
opposing witness in a civil case. The court of appeals disagreed. It
concluded that a party to a civil proceeding is not entitled to the full
panoply of rights accorded persons subject to criminal process. The
standard of discovery set forth in criminal cases concerns an accused's
right to present a defense; it does not extend to the civil forum.
The proper basis upon which a party may obtain access to the medical
records of a party to a civil matter under the discovery rule (Wis.
Stat. § 804.01(2)(a)) was considered by the court of appeals in
Ranft v. Lyons, 163 Wis. 2d 282, 471 N.W.2d 254 (Ct. App. 1991). In that
case the court determined that a party's medical records that fall under
the physician/patient privilege could only be accessed if the party has
put his or her physical or mental condition in issue as a component of
the party's claim or defense. However, the Ranft holding does not extend
to a nonparty witness in a civil proceeding.
Family Law
Divorce - Division of Property - Inherited Corporation
- Retained Earnings
Metz v. Keener,
No. 97-1443-FT (filed 14 Dec. 1997) (ordered published 28 Jan. 1998)
Metz appealed from a property division provision in a divorce
judgment involving her former husband, Keener. Before her marriage to
Keener, Metz had inherited the shares of a corporation. The trial court
did not include Metz's inherited shares of stock in the marital estate,
but it did include a retained earnings fund of the inherited
corporation. On appeal Metz challenged this ruling.
The court of appeals, in a decision authored by Judge Nettesheim,
affirmed. The court began its analysis by observing that much of the
wife's appeal was premised upon her view that the corporation's retained
earnings represent appreciation in the value of the corporation itself
rather than income generated by the corporation. While the court of
appeals understood the distinction she was drawing and fully accepted
that a corporation's retained earnings may serve to increase the value
of the stockholder's shares, the property division law of Wisconsin
clearly views income generated by an exempt asset as separate and
distinct from the asset itself. On this threshold basis, the appellate
court rejected much of the wife's arguments.
The appellate court concluded that the trial judge properly
determined that the retained earnings generated by the wife's inherited
corporation represented income separate and distinct from the
corporation itself and, as such, the retained earnings fund was properly
included in the marital estate for purposes of property division.
In its opinion the court noted that case law has held that retained
earnings are treated differently for purposes of property division and
maintenance: As to property division, retained earnings (or the
appreciation in value occasioned by the expenditure of such earnings)
are a marital asset subject to property division; however, as to
maintenance, retained earnings are not an income stream to the
shareholder if the earnings are retained for a legitimate business
reason.
Child Support - Percentage Guidelines - Calculation of
Gross Income - Value of Employer-awarded Vacations
In re the Marriage of Wall
v. Wall, No. 97-0826 (filed 10 Dec. 1997) (ordered published 28
Jan. 1998)
Michael and Debra Wall were divorced in 1992. Debra was awarded
primary physical placement of the two minor children and Michael was
ordered to pay 25 percent of his gross income as child support, which
his employer deducted from his paycheck.
In 1993 and again in 1994, Michael's employer rewarded him for his
job performance with trips to Mexico. The employer included the cash
value of both trips in Michael's wages; however, the company did not
withhold any money for child support from these additional wages.
In 1996 the state, through the local child support agency, brought an
arrearage hearing before the circuit court. It sought to collect as
child support arrearages 25 percent of the value of the trips awarded to
Michael. At the hearing the court found that the two trips fell within
the definition of gross income under Wis. Admin. Code section HHS
80.02(13)(a). However, the court held that it would be unfair to include
the trips in Michael's gross income because they could not readily be
converted to cash, traded or sold. Therefore, the court exercised its
discretion and excluded the value of the trips from the child support
percentage standards. The state appealed and, in a decision authored by
Judge Brown, the court of appeals affirmed.
Both parties agreed that the trips to Mexico fell within the
definition of gross income under the Wisconsin Administrative Code.
Thus, the sole issue before the appellate court was whether the circuit
judge erroneously exercised his discretion when he deviated from the
percentage standards under section 767.25(1m). The state claimed that
once a court determines that a form of income falls within the
guidelines' definition of gross income, it has no choice but to include
it in the payor's gross income under the percentage standards.
The court of appeals disagreed. Courts may deviate from the
percentage standards only upon a finding by the greater weight of the
credible evidence that applying the percentage standards would be unfair
to the child or to either party. Here, the appellate court agreed that
it would be unfair to include in Michael's gross income the value of the
two trips to Mexico because they did not generate any cash or assets
that would enhance his net worth and his financial means to make
additional child support payments. Unlike other types of assets, such as
a television or a car, the trips could not be assigned or sold to a
third party; they had no marketable value. Further, Michael did not have
the option of receiving the cash value of the trips; his only options
were to take the trips or lose them all together.
Insurance
Cancellations - Ambiguous Notice - Duty to Clarify
- Insurance Brokers
Production Credit Assoc. v.
Gorton Farms, No. 96-3100 (filed 23 Dec. 1997) (ordered
published 28 Jan. 1998)
This case of "first impression" concerns whether Wisconsin law
imposes a "duty upon the insured to provide a clear and unambiguous
notice of cancellation." The dispute involved crop insurance for corn.
The farmer argued that he thought he had canceled the crop insurance for
the particular year but the insurer demanded payment on the ground that
there had been no cancellation. The farmer paid the bill under protest
and brought this action seeking the return of the payment. The trial
judge ruled in favor of the farmer.
The court of appeals, in an opinion written by Judge Brown, reversed.
The farmer's insurance needs were handled by a man named Kilpatrick. The
farmer spoke with Kilpatrick over the phone and later sent him a note.
Preliminarily, the court of appeals found that the farmer's written note
to Kilpatrick was ambiguous. Although the note clearly canceled the
coverage for wheat, it was unclear whether the farmer intended to cancel
the corn coverage at that moment with the option of later resuming
coverage, or whether the farmer was merely stating that he may also
cancel corn coverage at a later time. The note was written in October;
corn would not be planted until spring.
Who had the duty to clarify the ambiguity? The court found it
critical that Kilpatrick was acting as an insurance "broker" and not as
an "agent." A broker serves as a "middleman" between the insured and the
insurer. The broker functions as an agent of the insured (here, the
farmer). An "insurance agent" represents the insurer, not the insured.
Since Kilpatrick served as the farmer's agent, the court was not
concerned about disparities of economic power in battles pitting hapless
consumers against corporate monoliths. The two stood on "equal footing."
The farmer had the duty to provide clear and unambiguous instructions to
his agent, the broker (Kilpatrick). Although "a different broker in
Kilpatrick's position" might have called to clarify the principal's
intent, Kilpatrick was not under any legal duty to do so. Thus, the loss
fell "on the person who wrote the ambiguous notice."
Juvenile Law
Delinquency Adjudications Expungement
State v. Jason
J.C., No. 97-1259 (filed 23 Dec. 1997) (ordered published 28
Jan. 1998)
In 1994 a court adjudicated Jason, then 14 years old, as delinquent
for two separate sexual assaults. In 1997 Jason, then 17, petitioned to
expunge the 1994 adjudications under section 938.355(4m) of the
Wisconsin Statutes. Initially the court granted the request but reversed
itself when the state argued, in a motion for reconsideration, that
chapter 938 applies only to violations after July 1, 1996.
The court of appeals, in an opinion written by Judge Brown, affirmed.
It concluded that "because the statute confers a substantive
right for a juvenile and does not confirm an existing right,
section 938.355(4m) is substantive and not remedial legislation."
(Italics original.) In reaching this conclusion the court rejected
Jason's various attempts to construe the statute to the contrary, but
acknowledged that it did "not like the result" and made "no sense" from
a "public policy standpoint."
Torts
Medical Malpractice Chapter 655 Nurses' Liability
Patients Compensation Fund
v. Lutheran Hosp.-La Crosse Inc., No. 96-1344 (filed 30 Dec.
1997) (ordered published 28 Jan. 1998)
The court of appeals, in an opinion authored by Judge Roggensack,
held that chapter 655 of the Wisconsin Statutes "established that only
health care providers can be liable for medical malpractice." The
statutory definition of "health care provider" "excludes nurses who,
while acting within the scope of their employment, assist a hospital in
the care of its patients." (The court noted that "nurse anesthetists are
affected differently by ch. 655.") Thus, the Patients Compensation Fund
was not entitled to subrogation against the nurse or the nurse's
professional liability insurance
Strict Products Liability - Manufacturer and Sellers
Negligence Enhanced Injuries Summary Judgment
Hansen v. New Holland North
America Inc., No. 97-0900 (filed 16 Dec. 1997) (ordered
published 28 Jan. 1998)
Plaintiff was severely injured when his hand became entangled in a
hay baler. He sued the manufacturer and seller of the baler but the
trial judge granted summary judgment dismissing their "initial injury"
and "enhanced injury" claims. Plaintiffs appealed and the defendants
filed various cross-appeals as well.
The court of appeals, in an opinion written by Judge Hoover, affirmed
in part and reversed in part. First, the trial court erred when it
granted summary judgment dismissing the strict products liability claims
against both the manufacturer and seller because it constituted an
"apparent danger." The record presented a material issue of fact as to
whether the "average user" would have "fully appreciated the attendant
risk"; the plaintiff testified that he did not think the slow moving
rollers presented a danger. The court rejected the "argument that
manufacturers are automatically absolved of liability for design defects
where a product's danger is open and obvious." By focusing exclusively
on the user's conduct one "creates an incentive for manufacturers to
ensure that hazards are in fact open and obvious" and for minimizing
safeguards.
Second, the judge also erred by determining that the plaintiff's
negligence exceeded the defendants' negligence as a matter of law.
Neither the record nor the case law supported this determination, which
should be made only in "extremely rare" cases. Material issues of fact
were present on whether the baler presented an open and obvious danger,
the reasonable foreseeability of the baler's "abuse," the negligence of
the seller's demonstration, and the apportionment of any negligence.
The cross appeal addressed the enhanced injury claims, holding that
such claims were proper against both manufacturer and seller. The
deposition of a plaintiff's expert presented an issue of fact for the
jury as to the manufacturer. As to the seller, the court refused to
restrict enhanced injury claims to the manufacturer alone under a
crabbed reading of Farrell v. John Deere Co., 151 Wis. 2d 45 (Ct. App.
1989).
Claims of Excessive Force by Police Statute of
Limitations
Kofler v.
Florence, No. 97-1922-FT (filed 23 Dec. 1997) (ordered
published 28 Jan. 1998)
The plaintiff appealed a summary judgment dismissing his excessive
force claim against a police officer. He argued that the trial court
erred by applying the statute of limitations to bar his claims. At the
heart of the litigation was the issue of whether the use of excessive
force to make an arrest is an intentional tort carrying with it a
two-year statute of limitations.
In a decision authored by Judge Myse, the court concluded that the
cause of action for the use of excessive force in making an arrest is an
intentional tort. The Restatement (2nd) of Torts classifies any use of
force to be a civil battery, unless it is privileged. Therefore, where a
plaintiff alleges that a police officer used excessive force in an
arrest, the real claim is that the officer committed a battery because
he or she went beyond the scope of the privilege. This, said the court,
is an intentional tort. While it is true that the privilege may be lost
even where a police officer unintentionally inflicts an unreasonable
amount of force, this does not change the characterization of the tort
to negligence.
In sum, the court concluded that the use of excessive force in making
an arrest is an intentional tort and, as such, has a two-year statute of
limitations. See Wis. Stat. § 893.57.
Claims Against the Government Malpractice Notice of
Claim
Snopek v. Lakeland Medical
Center, No. 96-3645 (filed 3 Dec. 1997) (ordered published 28
Jan. 1998)
Wisconsin law provides that whenever a claim is being made against
governmental bodies or its officers, agents or employees, no civil
action may be commenced unless the claimant first gives notice of the
claim to the government and satisfies the statutory conditions contained
in Wis. Stat. section 893.80. This includes a medical malpractice claim
brought against a governmental agency, which is governed by section
893.80(1m). A prior statute required that a malpractice claim had to be
made within 120 days after the "happening of the event giving rise to
the claim." See Wis. Stat. § 895.43(1)(a) (1977). The
present statute, enacted in 1986, mandates that the claim be made within
180 days "after discovery of the injury or, in the exercise of
reasonable diligence, the injury should have been discovered."
Lakeland Medical Center, which was a governmental agency owned and
operated by Walworth County and which is the defendant in this action,
complained that due to this legislative change it has to defend against
an allegation, the circumstances of which occurred during emergency room
treatment for injuries sustained by the plaintiff in 1979. Its primary
claim is that the new discovery-laden notice statute is not retroactive
to malpractice occurring before the effective date of the new statute.
Instead, the law at the time of the alleged injury should control.
Lakeland argued that because the plaintiff in this case failed to comply
with the notice of claim statute in existence at the time of the injury,
she is now barred from bringing this action.
The court of appeals, in a decision authored by Judge Brown,
concluded that the notice statute is a procedural rule, not a
substantive one, and therefore should be given retroactive application.
Section 893.80(1m) is a procedural condition precedent to the
maintenance of a cause of action and not a substantive statute of
limitations. The reason it is not a substantive statute of limitations
is because it does not limit the time in which the action must be
commenced, but instead only establishes the time in which the necessary
act of giving notice must be performed in order to preserve the right to
proceed.
Worker's Compensation
Nonwork-related Injury Following Work-related Injury
Compensability
Lange v. Labor and Industry
Review Commission, No. 97-0865 (filed 9 Dec. 1997) (ordered
published 28 Jan. 1998)
Lange sustained a compensable work-related injury to his back while
employed for Ideal Door. A magnetic resonance imaging (MRI) revealed
that he had degenerative disc disease at L4-L5 with a small focal disc
herniation and nerve impingement.
More than one year later Lange slipped and fell on some ice at a
friend's house, causing the previously herniated disc to protrude and
fragment. He was hospitalized after this slip and fall.
Lange continued working for Ideal Door after the slip and fall, was
laid off, and then offered a new position at the end of a worker's
compensation hearing. The Labor and Industry Review Commission (LIRC)
denied worker's compensation benefits to Lange and rejected his claim
for loss of earnings capacity benefits. The circuit court affirmed and
the court of appeals, in a majority decision authored by Judge Myse,
reversed.
In its decision LIRC noted that a reinjury is compensable if it is
caused by the weakened condition of the worker, or if the work-related
injury made the worker more vulnerable to reinjury. LIRC also
specifically concluded that Lange's second injury "alone was responsible
for the dramatic change," thereby implying that if the first injury was
related to the results caused by the second injury, the injury would be
compensable.
The court of appeals agreed with this implicit conclusion. A
work-related injury that plays any part in a second, nonwork-related
injury is properly considered a substantial factor in the reinjury. It
will not be a substantial factor, however, where the second injury alone
would have caused the damages. For LIRC to conclude that a work-related
injury is not a substantial factor in a second, related injury, it must
find that the claimant would have suffered the same injury, to the same
extent, despite the existence of the work-related injury. In all other
cases where the two injuries are related, however, the reinjury will be
compensable.
The court of appeals concluded that LIRC's factual finding that the
slip and fall alone was responsible for the worsening of Lange's back
condition was not supported by substantial and credible evidence. By
definition an "aggravation" of a preexisting condition links the two
injuries. Lange's work-related injury was a disc herniation at L4-L5,
and all evidence demonstrated that this back condition was made worse by
his second fall so as to create a further herniation. No doctor
expressed the opinion that this second injury would have occurred
without regard to the work-related injury.
Judge Cane's dissenting opinion suggested that the fact that Lange's
symptoms became significantly worse after the slip and fall was
sufficient to permit LIRC to infer that the reinjury was unrelated to
the initial injury. The majority disagreed. New symptoms arising from a
reinjury, standing alone, do not suggest whether a relationship exists
between the two injuries. If an earlier accident renders a worker's back
more vulnerable to reinjury, a second injury in the same location almost
certainly will cause new symptoms. The majority therefore rejected that
new symptoms alone can permit such an inference, and concluded that
there was no evidence to support LIRC's finding that Lange's second
injury was independent and unrelated to his work-related injury.
Accordingly, the majority held that LIRC erred by denying Lange
benefits because its determination that his work-related injury was not
a substantial factor in his reinjury was not supported by substantial
and credible evidence, and because its determination that his conduct
prior to the reinjury constituted an intervening cause was not supported
by any evidence and therefore lacked a reasonable basis.
This column summarizes all decisions
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.
Wisconsin Lawyer
