Supreme Court Digest

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

| Criminal Law | Juvenile Law | Property | Taxation |
| Torts |

Inchoate Conspiracy ­ Wis. Stat. section 939.31 ­
"Unilateral" vs. "Bilateral" Approach

State v. Sample, No. 96-2184-CR (filed 10 Feb. 1998)

Wis. Stat. section 939.31, which is Wisconsin's inchoate conspiracy statute, provides in pertinent part that "whoever, with an intent that a crime be committed, agrees or combines with another for the purpose of committing that crime may, if one or more of the parties to the conspiracy does an act to effect its object, be fined or imprisoned or both not to exceed the maximum provided for the completed crime."

This case was before the supreme court on certification from the court of appeals. The certified question was whether the statute quoted above codifies a "unilateral" or a "bilateral" approach to the inchoate crime of conspiracy.

In a majority decision authored by Justice Geske, the supreme court concluded that a plain reading of the statute embraces both unilateral and bilateral conspiracies. This means that criminal conspiracy will lie even where one of two alleged "coconspirators" is, unbeknownst to the other, an undercover police agent or a police informant who merely feigns participation in the conspiracy. In the context of an agreement between a defendant charged under section 939.31 and another person, as long as the parties agree or combine by their words or actions, it is not necessary that the other person intend agreement. His or her "agreement" may be feigned and the defendant may still be liable for the crime of inchoate conspiracy.

Said the court, to read the statute as limited to bilateral conspiracies would preclude the state from prosecuting anyone who entered into an agreement to commit a crime, where that second person is cooperating with law enforcement authorities, or otherwise lacks criminal intent. Instead, the court read the plain language of section 939.31 to focus on the criminal intent of a single defendant. It concluded that the plain language of the statute embraces both unilateral conspiracies as well as bilateral conspiracies.

Chief Justice Abrahamson filed a concurring opinion which was joined in by Justice Bablitch.

Delinquency Proceedings ­ Venue

State v. Cory J.G., No. 96-3148-FT (filed 23 Jan. 1998)

This case concerns venue in juvenile delinquency proceedings and whether the state failed to establish proper venue in the fact-finding hearing. The opinion was authored by Justice Crooks for a unanimous supreme court.

As it pertained to this case, Wis. Stat. section 48.185 (1993-94) set forth the appropriate county or counties in which a juvenile delinquency proceeding may be held. It provided that venue could be in any of the following: the county where the child resides, the county where the child is present, or, in the case of a violation of state law, the county where the violation occurred. [Note: The venue provisions for juvenile delinquency proceedings are now codified at Wis. Stat. section 938.195.]

In this case the fact-finding hearing was held in Fond du Lac County. The evidence showed that the violations of state law committed by the juvenile occurred in Clark County ­ not Fond du Lac County. Further, the evidence failed to provide any proof that the juvenile was present in Fond du Lac County when the petition was filed. In this case the supreme court concluded that fixing venue on the basis of a juvenile's "presence" in the county is dependent upon proof that the juvenile was present there at the time the delinquency petition was filed. Finally, the evidence failed to demonstrate that the juvenile "resided" in Fond du Lac County when the petition was filed. With regard to this basis for fixing venue, the supreme court concluded that the term "resides" means "domiciled," that is, "living in the locality with the intent to make that locality a fixed and permanent home." No evidence was offered to show that the juvenile or his parents were domiciled in Fond du Lac County.

Accordingly, the state did not prove any of the bases for establishing venue in Fond du Lac County for the delinquency proceedings against the defendant juvenile. This was fatal because the state must prove venue beyond a reasonable doubt in juvenile delinquency proceedings just as it must do in criminal proceedings. Though not an element of the crime, venue becomes an issue before the trier of fact when it is contested by the defendant, which is what occurred in this case.

Foreclosure Sales ­ Redemption Period

GMAC Mortgage Corp. v. Gisvold, No. 96-1663 (filed 28 Jan. 1998)

The supreme court aptly described the facts of this case as lengthy, somewhat confusing, and not in dispute. In 1992 the Gisvolds defaulted on their home mortgage. The mortgage holder, GMAC, secured a foreclosure judgment in April 1993. Attempts to conduct foreclosure sales were mired in the Gisvolds' bankruptcy proceedings. Petitioners successfully bid on the property at a foreclosure sale held in June 1995. After several delays, the sale was finally confirmed at a hearing in late December 1995. The Gisvolds were given until Jan. 17, 1996, to redeem their property, after which the petitioners would have 10 days to pay the balance of the purchase price and complete the sale. Just three hours before the redemption period expired on Jan. 17, one of the Gisvolds filed "yet another bankruptcy petition." Although that petition was voluntarily dismissed on March 12, the petitioners did not receive notice of the dismissal. On March 19 the Gisvolds paid the balance due on the mortgage in an effort to "redeem" their property. Only then did the petitioners learn that the bankruptcy petition had been dismissed.

The circuit court excused the petitioners' failure to pay the balance of the purchase price within 10 days of confirmation of the sale, as required by section 846.17 of the Wisconsin Statutes (1993-94), and gave them the chance to pay the balance. The judge also ruled that the redemption period had expired before the Gisvolds paid the balance on March 19. The court of appeals reversed. It held that the circuit court had no equitable power to waive the petitioners' statutorily imposed payment requirements. The 10-day period set forth in section 846.17 was mandatory; hence, their failure to pay the balance resulted in the forfeiture of their 10 percent deposit. The court of appeals also upheld the Gisvolds' redemption.

The supreme court, in a decision authored by Justice Crooks, reversed the court of appeals. First, it invalidated the Gisvolds' redemption attempt on March 19. In this part of the opinion the court discussed the intersection of the federal bankruptcy laws, particularly the automatic stay provisions, on redemption rights and foreclosure actions in state court. The Gisvolds had actual notice and "ample opportunity" to redeem their property within the time frame prescribed by the trial court. They failed to do so. (In a footnote the supreme court observed that sanctions for "apparent abuse of the Bankruptcy Code" must be left to the bankruptcy courts.)

The court also concluded that "the language of Wis. Stat. section 846.17 is mandatory insofar as it requires forfeiture of a purchaser's deposit and resale of the property in the event the purchaser does not comply with the ten-day limitation." In short, circuit courts have no equitable authority to excuse noncompliance and must forfeit the deposit. But the court also held that section 846.165 "contemplates notice to the purchaser at a foreclosure sale of when the sale is confirmed, when the mortgagor's redemption period ends, and when the purchaser's ten-day period for payment of the purchase price balance expires." On this record, the court was satisfied that the petitioners had paid the balance of the purchase price within 10 days of the effective date of the confirmation sale in June 1996.

Property Tax Assessment
Valuations ­ Appellate Procedure

Hermann v. Town of Delavan, No. 96-0171 (filed 23 Jan. 1998)

Nearly 90 property owners complained that their town had improperly valued their lakefront and inland properties contrary to the Uniformity Clause of Article VII, section 1 of the Wisconsin Constitution. The taxpayers filed a complaint in the circuit court but nowhere alleged that they had objected before the town's board of review (the board) or were appealing the board's determination. The trial judge dismissed the complaint for failing to state a claim for which relief could be granted. The court of appeals affirmed, concluding that the taxpayers had failed to exhaust the exclusive statutory remedies for addressing overassessment claims.

The supreme court, in an opinion written by Justice Steinmetz, affirmed. The sole issue before the court was: "Must a complaint alleging a violation of the Uniformity Clause of the Wisconsin Constitution be dismissed for failure to state a claim upon which relief can be granted, where the complaint challenges the tax assessment violation of certain real property, but fails to allege plaintiffs' prior compliance with the property tax appeal procedures provided in Wis. Stats. 70.47 (1995-96)?" First, any claim of overassessment, "regardless of the basis upon which it is grounded, necessarily questions the valuation of real property assessed for taxation." Chapter 70 of the Wisconsin Statutes sets forth a "comprehensive procedure" that governs such challenges. Although Chapter 70 permits three forms of appeal, all three avenues require the filing of an objection before the board of review. The supreme court held "the detailed and comprehensive objection and appeals procedures provided in chapters 70 and 74 were intended to be the exclusive means by which taxpayers may challenge the valuation of real property assessed for taxation." It also rejected a variety of arguments grounded in case law and public policy. Deviations from the statutory procedures would imperil the administration of municipal tax laws.

Franchise Taxes ­ Federalization of Corporate
Income Taxes ­ Transition Rules

Lincoln Savings Bank v. Wisconsin Department of Revenue, No. 96-0135 (filed 27 Jan. 1998)

Prior to 1962 Lincoln Savings was subject to federal but not Wisconsin income tax.Between 1962 and 1987 both Wisconsin and federal tax law permitted savings and loans to set aside reserves to cover bad debts and to take deductions for bad debts. Each tax system used different calculations for the deductions, and the Wisconsin tax law was less favorable to taxpayers than the federal tax law in calculating the deductions.

In 1987 Wisconsin "federalized" the Wisconsin income and franchise tax law so that a corporate taxpayer's federal net taxable income would become its Wisconsin net taxable income for years beginning in 1987. See 1987 Wis. Act 27. The state Legislature recognized that under federalization some taxpayers might lose deductions while others would escape taxation on income. Thus the Legislature enacted l987 Wis. Act. 27, section 3047(1)(a), which was a transition rule to provide for adjustments over a five-year period.

In this case the Tax Appeals Commission interpreted section 3047(1)(a) to permit adjustment of bad debt reserves maintained by Lincoln Savings from 1962 (the year in which it became subject to state taxation) until 1986, but not earlier, as a means of transitioning to the federalization of Wisconsin's income tax law. The commission's interpretation upheld an assessment by the Wisconsin Department of Revenue of additional franchise taxes and interest against Lincoln for the years 1987 to 1990, because Lincoln had adjusted for bad debt reserves maintained before 1962.

In a majority decision authored by Justice Geske, the supreme court concluded that the commission's interpretation of section 3047(1)(a) contravenes the intent of the Legislature as evidenced by the plain language of the transitional rule. That intent was to create a mechanism whereby all corporations subject to income tax in Wisconsin at the time of enactment, could equalize their items of income, loss or deduction as maintained for federal tax purposes, with those items as maintained for Wisconsin income tax purposes. For some corporate taxpayers, the Legislature recognized that equalization would involve substantial sums, so section 3047(1)(a) permitted those corporations a transition period in order to acclimate to the changes wrought by federalization. For those corporations, equalization could be accomplished over five years. The commission's interpretation of the transitional mechanism, which effectively read in a limitation on which deductions could be equalized, contravened the intent of the Legislature and, accordingly, the court could not sustain the commission's interpretation.

Chief Justice Abrahamson filed a concurring opinion that was joined by Justices Bablitch, Bradley and Crooks.

Statements at Legislative Hearings ­
Absolute vs. Conditional Privilege

Vultaggio v. Yasko, No. 96-0651 (filed 16 Jan. 1998)

The Whitewater City Council held a public meeting to consider the city's need for additional office space. Defendant Yasko attended this meeting and testified in favor of a proposal that would have used a former middle school to remedy the space problem. She felt that renovating the school would reverse the "destabilization" of her neighborhood. During her statement to the council, she highlighted her neighborhood's transition from family housing to college student housing and openly criticized the upkeep of several buildings owned by the plaintiff in that area. There was no evidence in the record that the defendant was subpoenaed or invited to appear at the meeting, that she was sworn under oath before testifying, or that she was directed in her testimony by questions from the council. The meeting was broadcast in its entirety on a local television station.

Three months later the plaintiff sued the defendant for defamation based on the statements she made during the city council meeting.The circuit court denied the defendant's motion for summary judgment and her subsequent appeal was considered by the supreme court on certification from the court of appeals.

The certified question was whether Wisconsin law should afford an absolute privilege, or only a conditional privilege, for witnesses testifying in legislative proceedings. In a majority decision authored by Justice Wilcox, the court held that under the circumstances presented in this case, such witnesses are not entitled to an absolute privilege. In footnote the majority observed that by concluding that the absolute privilege did not apply to legislative proceedings of the sort held in this case, it did not decide whether the absolute privilege would apply to witness testimony that is compelled by a subpoena, given under oath, or directed and supervised by questions from the legislative body.

Though rejecting absolute immunity for the defendant, the court concluded that testimony at a legislative proceeding of the sort conducted in this case is deserving of a conditional privilege. That privilege may be forfeited, however, if any of the following occur: 1) the witness knows the defamatory matter to be false, or acts in reckless disregard as to its truth or falsity; 2) the defamatory matter is published for some purpose other than that for which the particular privilege is given; 3) the publication is made to some person not reasonably believed to be necessary for the accomplishment of the purpose of the particular privilege; 4) the publication includes defamatory matter not reasonably believed to be necessary to accomplish the purpose for which the occasion is privileged; or 5) the publication includes unprivileged matter as well as privileged matter.

Justice Bablitch filed a concurring opinion. Justice Bradley, joined by the Chief Justice and Justice Steinmetz, dissented.

This column summarizes all decisions of the Wisconsin Supreme Court. 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.