Court of Appeals Digest
By Prof. Daniel D. Blinka & Prof. Thomas J.
Hammer
| Administrative Law | Civil
Procedure | Commercial Law | Contracts | Criminal Law | Criminal Procedure | Employee Benefits |
Insurance | Municipal Law | Torts |
Administrative Law
DNR - Navigable Streams - Chapter 227 Administrative Challenges
Turkow v. Wisconsin Dept.
of Natural Resources, No. 97-1149 (filed 13 Jan. 1998) (ordered
published 25 Feb. 1998)
In 1994 the Department of Natural Resources (DNR) advised the
plaintiff that two walkways and a fence obstructed a navigable stream on
his property and ordered him to remove all three structures within 45
days or face a citation. The plaintiff did not pursue any administrative
remedy available under chapter 227 of the Wisconsin Statutes and one of
the issues on appeal was whether the circuit court should have granted
DNR's motion to dismiss a declaratory judgment action brought by the
plaintiff. In that declaratory judgment action the plaintiff was seeking
a declaration that DNR lacked jurisdiction to make orders regarding the
stream.
In a decision authored by Judge Cane, the court of appeals concluded
that, based on state sovereign immunity principles and chapter 227 of
the Wisconsin Statutes, the proper method for challenging the DNR's
navigability determination of the stream on the plaintiff's property was
to pursue relief afforded under chapter 227.
The principle of state sovereign immunity is clearly established and
this immunity has been extended to state agencies. Plaintiff must point
to a legislative enactment authorizing suit against the state in order
to maintain his or her action. The consent to sue a state agency is set
forth in chapter 227 and constitutes the exclusive method for judicial
review of administrative agency determinations. The record in this case
established that the plaintiff did not pursue any remedy available under
chapter 227 and, accordingly, the DNR's motion to dismiss his
declaratory judgment action should have been granted by the circuit
court on that basis.
Civil Procedure
Issue Preclusion - Nonmutual Offensive Use - Invocation Against
Government Agency Defendant
Gould v. Wisconsin Dept. of
Health and Social Services, No. 97-2602 (filed 29 Jan. 1998)
(ordered published 25 Feb. 1998)
Gould received a lump sum payment for retroactive Social Security
Disability Income (SSDI) benefits while she was receiving Aid to
Families with Dependent Children (AFDC) benefits for herself and her
son. A Department of Health and Social Services (DHSS) hearing officer
decided that Gould was overpaid AFDC benefits as a result of that lump
sum payment and was properly terminated from AFDC; and that her
subsequent application for AFDC benefits for her son was properly
denied. Gould appealed the circuit court's order affirming that
decision. Among the issues before the court of appeals was whether the
doctrine of issue preclusion should have prevented DHSS from litigating
the question of the plaintiff's AFDC eligibility under the facts
described above when two prior circuit court decisions involving
different plaintiffs decided the same issue adversely to DHSS.
In an opinion authored by Judge Vergeront, the court of appeals
concluded that issue preclusion did not apply in this case. In
Northern States Power Co. v. Bugher, 189 Wis. 2d 541, 525
N.W.2d 723 (1995), the Wisconsin Supreme Court adopted the terms "claim
preclusion" and "issue preclusion" to replace the terms "res judicata"
and "collateral estoppel." Issue preclusion refers to the effect of a
judgment in foreclosing relitigation in a subsequent action of an issue
of law or fact that actually has been litigated and decided in a prior
action.
Here, Gould recognized that she was not a party in the prior cases as
to which she wished to assert issue preclusion, but contended that issue
preclusion was nevertheless appropriate under Michelle T. v.
Crozier, 173 Wis. 2d 681, 495 N.W.2d 327 (1993). Crozier
held that trial courts may apply issue preclusion when invoked by a
plaintiff (offensive use) who was not a party in the prior litigation
(nonmutual use) against a defendant who was, if application of the
doctrine is fundamentally fair to the defendant. The court listed
several factors to be considered in the fundamental fairness
analysis.
Gould argued to the court of appeals that under the Crozier
factors, it was fundamentally fair to apply issue preclusion against
DHSS in this case. DHSS responded that the defendant in Crozier
was a private party, not a governmental agency; that there is no
authority in Wisconsin for using offensive nonmutual issue preclusion
against governmental agencies; and that there is persuasive authority
from other jurisdictions against this.
The court of appeals concluded that a state agency's position as a
litigant is sufficiently different from that of a private litigant such
that the economy of interests underlying a broad application of issue
preclusion do not, as a general rule, justify the nonmutual offensive
application of the doctrine against the agency. The court indicated that
it did not need to decide whether there are any circumstances that might
justify applying the doctrine against a state agency and, if so, what
they might be. It was satisfied that the case before it did not present
circumstances that would justify the creation of such an exception.
Summary Judgment - "Four-corners" Rule - Insurance - Business
Exception
Monfils v.
Charles, No. 97-1158 (filed 21 Jan. 1998) (25 Feb. 1998)
Thomas Monfils was killed by coworkers at a Green Bay paper mill. His
widow and children brought a civil action against Marlyn Charles and his
homeowner's insurer. Charles was the paper mill's union representative
who allegedly counseled the disgruntled coworkers to "confront" Monfils
over his behavior. The complaint alleged that Charles was negligent in
the handling of the matter. The circuit court granted the homeowner
insurer's motion for summary judgment and dismissed it from the
case.
The court of appeals, in an opinion by Judge Myse, reversed. First,
the trial judge erred by "looking outside the four corners of the
complaint" to determine whether the insurer had a duty to defend its
insured. Specifically, the trial judge examined an affidavit because the
pleadings were ambiguous. A 40-year-old A.L.R. article, cited in the
case law, at "first blush" supported the argument that "a court can
review extraneous materials in considering coverage issues when the
complaint is ambiguous or incomplete," but a "closer look at the article
reveals that, in fact, the opposite is true." Thus, where a complaint is
ambiguous as to coverage, the court cannot look to materials outside the
complaint to determine coverage.
Second, the evidence was insufficient to warrant summary judgment on
the ground that the business exception vitiated coverage. The record
clearly demonstrated that "Charles's primary occupation was as a paper
worker, not a union president." Although observing that the facts must
be more fully developed at trial, the court noted that Charles's union
presidency was an elected post that involved "intermittent duties,"
"nominal compensation and the lack of a profit motive."
Commercial Law
Lien Priority - Wage Claim Lien
Pfister v. Milwaukee
Economic Development Corp., No. 96-0314 (filed 13 Jan. 1998)
(ordered published 25 Feb. 1998)
In June 1994 Pfister filed a wage lien claim against his former
employer, PAL, alleging that PAL owed him more than $200,000 in unpaid
commissions and penalties. Years before, First Bank and the Milwaukee
Economic Development Commission (MEDC) perfected security interests
against PAL for about $750,000 in debts. The bankruptcy court
established that PAL's assets amounted to no more than $350,000. A trial
judge determined that under the 1993 amendments to sections 109.03(5)
and 109.09(2) of the Wisconsin Statutes, "an employee's wage claim lien
is a 'superpriority lien' taking precedence over all other security
interests (except those excluded by the statute), including all security
interests perfected prior to the date an employee's wage claim lien is
established." The judge also concluded, however, that the statutes could
not be applied retroactively.
The court of appeals, in an opinion written by Judge Schudson,
affirmed in part and reversed in part. First, it agreed that "secs.
109.03(5) and 109.09(2), Stats., as amended, do establish that an
employee's wage claim lien has priority over all other liens (except
those explicitly excluded by statute), including preexisting ones." The
1993 amendments effected no substantive changes; rather, they "simply
added an enforcement mechanism to a previously established right, thus
producing a procedural change." Thus, the amended statutes apply
retroactively. The court rejected First Bank's and MEDC's argument that
the amended statutes unconstitutionally impaired preexisting contracts.
Their "contracts with PAL still carry the unaltered right to enforce
their security interests. Their contracts, however, could never include
any implied right to somehow elevate their liens over wage claims liens
given priority under sec. 109.09(2), Stats., both before and after the
amendments."
Second, the court addressed First Bank's challenge to the trial
court's finding that "the amended statutes do establish that wage claim
liens have priority over pre-existing liens." The court of appeals
concluded that under section 109.09(2) "'all' means 'all.'" Thus, the
statute gives employee wage claim liens priority "over all others."
Judge Fine concurred, pointing out several issues that the majority
decision did not, in his opinion, decide.
Contracts
Settlements - Failing to Read Contract - Mistake
Nauga Inc. v. Westel
Milwaukee Co. Inc., No. 95-3263 (filed 20 Jan. 1998) (ordered
published 25 Feb. 1998)
This dispute involved an agency contract between Nauga and Westel
Milwaukee Company to market cellular telephone services. In the midst of
rather protracted and complicated litigation, Westel submitted a new
agency agreement to Nauga that contained a provision that released
Westel from liability in several pending law suits. Realizing the
consequences of the release, Nauga's lawyer added a paragraph that
accepted the terms upon payment of $250,000. Nauga and Westel executed
the agreement, but Westel later claimed that it had not seen the payment
provision when it signed the contract. The circuit court refused to
enforce the "new agreement" because there had been no "meeting of the
minds."
The court of appeals, in a decision authored by Judge Schudson,
reversed. The contract terms were unambiguous. The agreement was reached
without fraud or mutual mistake. Rather, Westel simply "failed to
properly and thoroughly review the contract before executing it."
Although enforcement of the $250,000 settlement "may seem harsh where
one party, in fact, did not intend to assent," the outcome was supported
by "sound principles embodied in contract law." Only one party made the
mistake; thus, no "mutual" mistake occurred.
Judge Wedemeyer dissented, agreeing with the trial judge that
recission was appropriate.
Criminal Law
Burglary - Intent to Commit a Felony in the Burglarized Premises -
Jury Instructions Regarding Intent of the Actor
State v. Hammer,
No. 96-3084-CR (filed 23 Dec. 1997) (ordered published 25 Feb. 1998)
Three women and a man were at a party at a residence in Milwaukee.
Three men broke into this residence, beat the man, and sexually
assaulted the women. Defendant Hammer was charged with several felonies
arising out of this incident, including armed burglary with the intent
to commit a felony in the premises entered. (This charge is
distinguishable from the ordinary form of burglary, which is committed
with the intent to steal from the premises entered.)
When the trial judge instructed the jury about the crime of armed
burglary, she advised the jurors about the specific intent element of
the offense as follows: "The fourth element requires that the defendant
enter the building with the intent to commit a felony. That is, that the
defendant intended to commit a felony at the time he entered the
building. A first-degree sexual assault is a felony, an armed robbery is
a felony, a substantial battery causing substantial bodily harm to
another without consent and with intent to cause bodily harm or
substantial bodily harm is a felony. ... If you are satisfied beyond a
reasonable doubt that the defendant intentionally entered a building,
that the entry of the building by the defendant was without the consent
of the person in lawful possession, that the defendant knew that he did
not have such consent and that the defendant entered the building with
the intent to commit a felony, you should find the defendant
guilty."
The trial court declined the defendant's request to instruct the jury
that the verdict had to be unanimous with respect to the exact felony
that he intended to commit when he entered the dwelling. The court of
appeals, in a decision authored by Judge Wedemeyer, affirmed. It
concluded that the defendant was not entitled to a unanimity instruction
regarding the felonies that formed the basis of his intent to enter the
dwelling. The jury merely needed to conclude that the defendant
unlawfully entered the dwelling with intent to commit a felony.
Criminal Procedure
Revocation of Parole - Successive Certiorari Proceedings
State ex rel. Macemon v.
Christie, No. 97-0660 (filed 28 Jan. 1998) (ordered published
25 Feb. 1998)
In State v. Escalona-Naranjo, 185 Wis. 2d 168, 517 N.W.2d
157 (1994), the Wisconsin Supreme Court considered the issue of whether
a defendant is prohibited from raising a constitutional claim in a
post-conviction motion under Wis. Stat. section 974.06, if such a claim
could have been raised in a previously filed section 974.02 motion
and/or on direct appeal. The court concluded that a prisoner was
compelled by section 974.06 to raise all grounds for post-conviction
relief in an original motion and that "successive motions and appeals,
which all could have been brought at the same time, run counter to the
design and purpose of the legislation."
The question presented in this case was whether the bar of
Escalona-Naranjo against successive appeals should be extended
to appeals by writ of certiorari from parole and probation revocation
hearings. As proclaimed by the U.S. Supreme Court in Morrissey v.
Brewer, 408 U.S. 471 (1972), a revoked parolee is guaranteed one
full and fair hearing which "must lead to a final evaluation of any
contested relevant facts and consideration of whether the facts as
determined warrant revocation." Additionally, a right to appeal to the
court of appeals is guaranteed by the State of Wisconsin Constitution. A
thread runs through our entire jurisprudence that not only is an appeal
guaranteed, but it should be meaningful.
However, said the court in an opinion authored by Judge Snyder, there
is no requirement in our system of jurisprudence that a defendant be
permitted to file successive appeals from the same action. Because
Escalona-Naranjo determined that due process for a convicted
defendant permits him or her a single appeal of that conviction and a
single opportunity to raise claims of error, it logically follows that a
system that permits a revoked parolee or probationer the same
opportunity to contest a revocation comports with due process. An
aggrieved probationer or parolee should raise all of the issues of which
he or she is aware in the original writ of certiorari proceeding; those
claims then can be reviewed by the circuit court and, if desired, by the
appellate court.
The court of appeals also adopted the exceptions allowed by
Escalona-Naranjo in this case. Thus, if a defendant can offer a
sufficient reason for failing to raise an issue of constitutional
dimension or for a claim that such an issue was argued inadequately at
the time of the original certiorari proceeding, the action may
proceed.
Hearsay - Exposing Children to Harmful Materials
State v. Kevin
L.C., No. 97-1087-CR (filed 4 Dec. 1997) (ordered published 25
Feb. 1998)
The defendant was convicted of first-degree sexual assault and
exposing a child to harmful materials. The court of appeals, in a
decision authored by Judge Deininger, affirmed.
First, the trial court did not violate the defendant's right of
confrontation by admitting a child's out-of-court statements made to a
social worker. The statements were admitted under the so-called residual
exception to the hearsay rule, but the Sixth Amendment right of
confrontation requires that the prosecutor take reasonable steps to
actually produce the hearsay declarant and demonstrate that the hearsay
is reliable. The child-declarant, age six, was ruled "unavailable" after
she appeared in court but was unable to testify about the events. The
court of appeals observed that the defendant was permitted the
"opportunity" to cross-examine the child before the jury. In the
alternative, the court also ruled that the state had "produced" the
declarant for confrontation purposes. The hearsay statements also passed
muster under the second prong of the confrontation analysis. Although
the residual exception is not "firmly rooted" and hence does not carry
presumptive reliability, the statements carried sufficient "indicia of
reliability." In making this assessment the court considered the
statements' contents and the circumstances surrounding the utterances to
the social worker.
Second, the court held that section 948.11 of the Wisconsin Statutes
was constitutional. The statute comported with First Amendment
protections by reasonably imposing "upon an individual the obligation to
ascertain the age of persons to whom he or she wishes to exhibit
materials deemed harmful to children." In particular, the court
distinguished United States v. X-Citement Video Inc., 513 U.S.
64 (1994), which struck down a federal statute for omitting any scienter
requirement regarding age. The federal statute covered actions in which
it was unlikely that the defendant would personally confront a child,
thus depriving the defendant of any opportunity to assess the victim's
age.
Employee Benefits
Wisconsin Retirement System - Disability Benefits - Employer
Certification that Termination Was Because of Disability
State ex rel. Bliss v.
Wisconsin Retirement Board, No. 97-1639 (filed 8 Jan. 1998)
(ordered published 25 Feb. 1998)
Wis. Stat. section 40.63(1) provides that a participating employee is
entitled to a disability annuity from the Wisconsin Retirement System
if, prior to attaining his or her normal retirement date, certain
conditions are met, including the following:
"The employee is not entitled to any earnings from the employer and
the employer has certified that it has paid to the employee all earnings
to which the employee is entitled, that the employee is on a leave of
absence and is not expected to resume active service, or that the
employee's participating employment has been terminated, because of a
disability as described in [section 40.63(1)(b)] and as a consequence
the employee is not entitled to any earnings from the employer."
In this case the petitioner was terminated from employment with a
municipal police department for violating department rules. Prior to the
discharge, he applied for disability benefits under the Wisconsin
Retirement System. The Department of Employee Trust Funds and the
Wisconsin Retirement Board (board) denied the application for a
disability annuity because the petitioner's employer did not certify
that termination was due to disability. In fact, the employer certified
that termination was for a reason other than disability.
The petitioner commenced this action to obtain certiorari review of
the board's action. The circuit court affirmed the board and the court
of appeals, in a decision authored by Judge Deininger, affirmed the
circuit court.
The court of appeals concluded that the board's interpretation of the
statutory eligibility requirements for a disability benefit under the
Wisconsin Retirement System was entitled to great weight deference.
Applying that standard of review, it concluded that the board's
interpretation of the statute quoted above to condition disability
benefit eligibility on the employer's certification that the petitioner
was terminated (or on indefinite leave) because of a disability, did not
directly contravene the words of the statute. Nor did the petitioner
show that the board's interpretation was contrary to legislative intent
or without a rational basis. Accordingly, the employer's failure to
certify that the petitioner's termination was because of a disability
was fatal to his application for a disability annuity. The court
indicated that it would reach the same conclusion if the petitioner had
been on an indefinite leave of absence that the employer failed to
certify as being caused by a disability.
Insurance
UIM Coverage - Stacking - Business Policies
Reed v. General Casualty
Co., No. 96-2371 (filed 23 Dec. 1998) (ordered published 25
Feb. 1998)
Douglas Reed was killed by a negligent driver who carried only
$25,000 in liability coverage. Reed's car carried $500,000 in UIM
coverage under a business auto policy issued to Software Resources, a
company for which he worked and in which he held 10 percent of the
stock. The coverage also extended to four other vehicles. The plaintiffs
(Mrs. Reed and her two young children) sought to "stack" the UIM
coverage on the other vehicles. The trial judge ruled that Reed was not
a named insured but rather an "occupancy" insured and refused to permit
stacking.
The court of appeals, in an opinion written by Judge Wedemeyer,
affirmed. The court framed the issue as follows: "whether a corporate
officer/director/shareholder in a small corporation should be included
under the definition of 'you' or 'family member' as those terms are used
in a business auto insurance policy that identifies only the corporation
as the 'named insured' so that the officer/director/ shareholder would
qualify as a 'named insured' rather than an 'occupancy insured.'" The
court distinguished Carrington v. St. Paul Fire & Marine Ins.
Co., 169 Wis. 2d 211 (1992), based on its unique facts (a
corporation acting in loco parentis to children in its care) and
differences in policy language, which clarified that "coverage will
extend to a family member only if you [that is, the insured] are an
individual."
Named Insureds - Coverage - Business Auto and Umbrella Coverage
Greene v. General Casualty
Co., No. 96-2578 (filed 19 Nov. 1997) (ordered published 25
Feb. 1998)
Michael Riekkoff seriously injured three girls when his Ford Bronco
jumped a curb. Michael was working for a family business, Riekkoff
Installation Services Inc., at the time of the accident. Riekkoff
Installation carried a business auto policy and a comprehensive
liability policy (umbrella) with General Casualty under which it was the
sole named insured. The circuit court ruled that coverage existed for
Michael under both policies.
The court of appeals, in a decision authored by Judge Anderson,
affirmed. First, the court concluded "that the business auto policy has
been modified to provide insurance to two named additional interests for
any auto that they may drive. The additional interest endorsement amends
the policy to include Michael within the class of insured persons.
Michael was added to the 'Who Is an Insured' provision which is another
class of insured persons in addition to the 'you' class, which is the
named insured, Riekkoff Installation." Moreover, "[w]hen the named
insured is a corporation, but the insurer knows that the covered
vehicles are owned by individuals and used by family members, section
632.32 [the omnibus statute] does not distinguish between the owner of
the vehicle and the named insured for purposes of determining coverage."
The coverage also extended to "any" vehicle driven by Michael. This
construction furthered the state's public policy that protects injured
third parties, especially where General Casualty accepted premiums
knowing that the policy covered "vehicles owned by the corporation's
employees which were also used for non-business purposes." Finally,
since Michael qualified as an insured under the business auto policy, he
also was covered under the umbrella policy.
Municipal Law
Municipal Board of Review - Receipt of Advice from Municipal
Attorney - Due Process
Rite-Hite Corporation v.
Brown Deer Board of Review, No. 96-3178 (filed 9 Dec. 1997)
(ordered published 25 Feb. 1998)
Rite-Hite Corporation appealed a judgment entered by the trial court
upholding, on certiorari review, a determination by the Village of Brown
Deer Board of Review sustaining a $4.1 million assessment of property
owned by plaintiff White and leased to Rite-Hite Corp. Among the issues
on appeal was whether Rite-Hite was denied due process because Brown
Deer's village attorney represented both the village and its Board of
Review at the board hearing.
In support of its position, Rite-Hite cited authorities for the
proposition that it is a violation of due process for a "decisionmaker"
to have "previously acted as counsel to any party in the same action or
proceeding." But these authorities, said Judge Fine for the court of
appeals, were not applicable in this case. First, the village attorney
was not a "decisionmaker" - the Board of Review was, and the village
attorney was not a member of the board. Second, the plaintiffs pointed
to no instance in the transcript where the village attorney's advice to
the board was anything other than impartial.
Members of Boards of Review generally are lay persons, without legal
or technical backgrounds. Giving the board access to legal advice on
technical and procedural matters advances rather than retards the goal
of setting a fair tax assessment. Thus, the Manual for Boards of Review
published by the Department of Revenue recognizes that the municipal
attorney "should act as counsel for the Board of Review," by, among
other things, "advising the board on legal matters." Accordingly, the
plaintiffs were not denied any statutory or due process rights by the
village attorney acting as a legal advisor to the board.
Torts
Recreational Immunity - Ice Fishing - "Property" - "Occupier"
Doane v. Helenville Mutual
Ins. Co., No. 97-1420 (filed 29 Jan. 1998) (ordered published
25 Feb. 1998)
Ehle invited Doane to go ice fishing in his portable shanty. Ehle's
propane heater (lantern?) exploded and injured Doane. Doane sued Ehle
and his insurer, who claimed immunity under section 895.52 of the
Wisconsin Statutes, the recreational immunity statute. The circuit court
granted summary judgment to the defendants.
The court of appeals, in an opinion written by Judge Roggensack,
reversed. No one disputed that Doane was engaged in recreational
activity at the time of the injury. Rather, the dispute centered on
whether the portable shanty on the frozen lake qualified as recreational
property or Ehle was an "occupant" of the lake. Although the shanty was
a "structure," the court concluded "that structures located completely
on water and which are not affixed to the lake bed or to the shore, are
not located on real property, and are therefore not themselves
'property' within the meaning of the recreational immunity statute." Nor
was Ehle an "occupier" because "the shanty could be more fully
analogized to a fishing boat which is anchored for a time on a lake."
One does not "occupy" a lake by dropping anchor; rather, Ehle was a
"user of the lake."
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
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