Court of Appeals Digest

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

| Contracts | Criminal Law | Criminal Procedure | Family Law |
| Insurance | Jury Trials | Municipal Law | Open Meetings Law |
| Open Records | Taxation | Torts |

Illegal Contracts - Attorney Fees

Greenlee v. Rainbow Auction/Realty Co. Inc., No. 97-1483 (filed 23 April 1998) (ordered published 27 May 1998)

Schuster, a real estate broker working for a realty company, entered into an illegal fee splitting arrangement with a nonbroker, Greenlee. The deal involved a truck stop on which a bank had foreclosed. Schuster's realty company had the exclusive right to list the property. Greenlee located a potential buyer but disclosed the buyer's identity only after Schuster agreed to the split fee. The bank sold the property to the buyer but refused to pay Greenlee.

Greenlee then sued the bank and the realty company. Although the bank tendered its defense to the realty company and Schuster, they refused to accept it. The bank filed claims against the realty company and Schuster for its attorney fees and costs in defending against Greenlee's action, regardless of its outcome. In prior litigation, the courts ruled that Greenlee was attempting to enforce an illegal contract (as a nonbroker he could not collect a commission). Based on this determination, the circuit court granted summary judgment to the bank, awarding it attorney fees and costs as against Schuster and the realty company.

The court of appeals, in an opinion written by Judge Roggensack, affirmed. The illegal fee splitting agreement violated a statute and constituted negligence per se. Thus Schuster violated the standard of care and was responsible for any damages that he caused - namely, costs and attorney fees. In response, Schuster asserted affirmative defenses of ratification and equitable relief; that is, the bank had ratified the illegal contract or had "dirty hands" itself. Ratification did not apply because the contract was void at its inception. Nor did the record support the allegation that the bank was aware of the consequences of Greenlee's lack of a real estate license.

Theft from Person - Removing Purse
from Handle of Occupied Wheelchair

State v. Hughes, No. 97-0638-CR (filed 7 April 1998) (ordered published 27 May 1998)

The victim in this case was leaving a grocery store in her wheelchair when her purse was removed from the wheelchair handle where it was hanging. For this theft the defendant was convicted of the crime of theft from the person. The issue on appeal was whether this offense encompasses removing property from the handle of a wheelchair when it is occupied by the victim.

Wis. Stat. sections 943.20(1)(a) and (3)(d)2 provide that "whoever ... intentionally takes and carries away ... moveable property ... from the person of another" is guilty of theft from person. In a decision authored by Judge Schudson, the court of appeals concluded that theft "from the person" encompasses taking property from the wheelchair of one sitting in the wheelchair at the time of the taking. Wheelchairs have become essential extensions of the "persons" of their occupants, and wheelchair handles and storage compartments are essential to wheelchair use.

In footnote the court acknowledged two important implications that logically flow from its holding: 1) the term "wheelchair," as it is used in this decision, encompasses functional equivalents, including canes, crutches, walkers, motorized carts, and other apparatuses serving the same purpose; and 2) "sitting in the wheelchair," as that phrase was used in the decision, encompasses the times and locations involved in getting into or out of, or taking hold of or releasing, a "wheelchair" or its functional equivalent.

Finally, in reaching the conclusion that it did about the defendant's liability for the crime of theft from the person, the court indicated in footnote that it did not foreclose the possibility that such conduct, depending on all the circumstances, could also constitute other crimes, including robbery and theft from a vulnerable adult.

Arrest - Odor of Marijuana in Auto Occupied
by Single Individual - Probable Cause to Arrest Lacking

State v. Secrist, No. 97-2476-CR (filed 1 April 1998) (ordered published 27 May 1998)

An officer was directing traffic at a local parade. The defendant, alone in his car, drove up to the officer to ask for directions. The officer detected the odor of marijuana coming from the vehicle, an odor he recognized from his training and experience. The officer told the defendant to pull over, ordered him from his car, and placed him under arrest for possession of marijuana. A search of the car turned up a marijuana cigarette and roach clip.

The critical issue on appeal was whether the odor of marijuana emanating from a vehicle is enough to establish probable cause to arrest the sole occupant of the vehicle. The circuit court had found that the odor was sufficient to establish probable cause.

In a decision authored by Judge Brown, the court of appeals reversed. It concluded that the odor of marijuana from a vehicle does not by itself give an officer reasonable grounds to conclude that the sole occupant of the vehicle is the person who smoked the marijuana. While the odor gave the officer reason to believe that a crime had been committed, he did not have reason to believe that the crime had just been committed or that the defendant had committed it. There was no indication as to when the marijuana had been smoked or by whom. The smell of marijuana lingers and thus it could have been smoked five minutes earlier or even several hours earlier. Thus, the court concluded that the officer had but mere suspicion that the defendant had been smoking marijuana, but suspicion is not sufficient for probable cause to arrest.

In reaching this decision, the court distinguished State v. Mitchell, 167 Wis. 2d 672, 482 N.W.2d 364 (1992), wherein a marijuana arrest was upheld where there was both the smell of marijuana emanating from the vehicle and visible smoke in the vehicle. The latter evidence was lacking in the present case.

Ineffective Assistance of Counsel - Requirement of Machner Hearing
- Authentication of Voice Recordings - One-party Consent Recordings

State v. Curtis, No. 96-2884-CR (filed 8 April 1998) (ordered published 29 May 1998)

The defendant was an inmate at a state prison when the events in this case occurred. Officials at the prison used another inmate in the capacity of an informant. The informant wore a wire and recorded his conversations with the defendant while buying drugs from him. The tapes of the conversations were played for the jury at the defendant's trial and the defendant was found guilty on four counts of delivering drugs.

The defendant's first claim on appeal was that his trial counsel was ineffective in failing to cite case law in his motion to suppress the tapes and in failing to request an in camera review of the tapes prior to their admission as evidence. He acknowledged that the Wisconsin Supreme Court has held that a post-conviction hearing pursuant to State v. Machner, 92 Wis. 2d 797, 285 N.W.2d 905 (Ct. App. 1979), is a prerequisite to a claim of ineffective assistance of counsel. He argued, however, that a Machner hearing is not necessary in every case and that because trial counsel's alleged errors were so obvious and could not possibly have been the result of tactical decisions, no Machner hearing was required.

The court of appeals, in a decision authored by Judge Brown, disagreed with the defendant's position. The Machner court held that "it is a prerequisite to a claim of ineffective representation on appeal to preserve the testimony of trial counsel." The hearing is important not only to give counsel a chance to explain his or her actions but to allow the trial court, which is in the best position to judge counsel's performance, to rule on the motion. This dual purpose renders the hearing essential in every case where a claim of ineffective assistance of counsel is raised.

In footnote the court observed that its holding should not be construed to say that a defendant is automatically entitled to an evidentiary hearing no matter how cursory or meritless the ineffective assistance of counsel claim might be. A trial court may deny a post-conviction motion without a hearing if the motion fails to allege sufficient facts to raise a question of fact, presents only conclusory allegations, or if the record conclusively demonstrates that the defendant is not entitled to relief.

The court of appeals also rejected the defendant's claims that the tapes admitted into evidence at trial were not properly authenticated. At the trial the informant, who was a party to the conversations on the tapes, testified that the voices on the tapes were his and the defendant's. The court concluded that this type of voice identification is a valid avenue of authentication and that tapes are properly identified and authenticated when a party to the recorded conversation identifies the defendant's voice and testifies that the tapes accurately depict the conversations.

Finally, the defendant attacked the use of the tapes on the theory that one-party consent tapes are legal only for investigative purposes and are not admissible as evidence. While this used to be the law in Wisconsin, the law had been changed by the time the 1993 recordings were entered into evidence at the defendant's trial. See 1989 Wis. Act 121 (allowing one-party consent tapes into evidence in felony drug prosecutions.) [Note: Subsequent amendments have further broadened this authorization to all felonies. See 1993 Wis. Act 98; 1995 Wis. Act 30.]

Post-conviction Practice - Standing of Defendant
on Straight Probation to Bring Section 974.06 Motion

State v. Mentzel, No. 97-1814 (filed 22 April 1998) (ordered published 27 May 1998)

The defendant was convicted of allowing the continued use of certain premises as a place of prostitution contrary to Wis. Stat. section 944.34. At the sentencing hearing, the trial court withheld sentence and placed the defendant on probation for three years. The defendant appealed and the court of appeals affirmed his conviction.

Thereafter the defendant sought relief pursuant to Wis. Stat. section 974.06, which permits a person "in custody under sentence of a court" to challenge the validity of his or her conviction. The circuit court dismissed the motion, concluding that the defendant was not "under sentence of a court" because he had been placed on straight probation and therefore could not avail himself of relief under section 974.06.

The court of appeals, in a decision authored by Judge Nettesheim, reversed. It concluded that, subject to any other bars, all defendants on probation have standing to pursue post-conviction relief under section 974.06.

Terry Stops - Miranda Rights

State v. Gruen, No. 96-2588-CR (filed 14 April 1998) (ordered published 27 May 1998)

The court of appeals, in an opinion written by Judge Curley, affirmed the defendant's conviction for OWI. The primary issue involved the admissibility of the defendant's statements to police officers. The defendant was originally "stopped" by a City of Milwaukee police officer in a Milwaukee suburb - his car was stuck in a snow bank on a cold, windy night - who then summoned suburban police. The defendant argued that when suburban officers arrived he was in "custody" for Miranda purposes and should have been read his Miranda rights before questioning. Applying a totality of the circumstances test, the court held that the defendant was not in Miranda-type custody when interrogated; for example, he was questioned at the scene, no firearms were pointed at him, and police never ordered him to the ground.

This case's significance rests on its discussion of the interaction of Terry stops and the Miranda rule. Based on prior case law, the court held that "custody" for Miranda purposes might occur even during a valid Terry stop. Put another way, the court declined to equate Miranda-type custody with a Fourth Amendment "arrest." Thus, an investigative "stop" based on reasonable suspicion can, under certain circumstances, be sufficiently intrusive to warrant the giving of Miranda warnings.

Child Abuse - Transfer of Custody
During Child Abuse Injunction Proceedings

Scott M.H. v. Kathleen M.H., Nos. 97-0814 and 97-0815 (filed 15 April 1998) (ordered published 27 May 1998)

Kathleen and Scott were divorced in 1993. The parties were awarded joint legal custody of their only child, and the mother was awarded primary physical custody. In 1995 Scott filed a motion in the divorce action seeking sole custody and placement of the child. This matter was not scheduled for hearing until more than a year later. However, prior to the scheduled hearing, Scott filed a petition for a temporary child abuse restraining order and injunction against Kathleen pursuant to Wis. Stat. section 813.122 in which he alleged that Kathleen had engaged in physical and sexual abuse of their child.

The circuit court found that there were reasonable grounds to believe that Kathleen had engaged in abuse of the child. Despite this finding, the court dismissed the injunction action, instead taking jurisdiction over the matter in the parties' divorce action. Wearing its "divorce hat," the court changed the child's custody and placement to his father pursuant to Wis. Stat. section 767.325.

The critical issue on appeal was whether the trial court acted with statutory authority when it modified child custody and placement. Rejecting the mother's argument that the injunction statute (Wis. Stat. section 813.122) does not permit such action, the court of appeals affirmed the circuit court.

In a decision authored by Judge Nettesheim, the appellate court concluded that section 813.122 implicitly envisions a change of placement and custody if the trial court issues a child abuse injunction against a parent who has custody or placement of a child under a divorce judgment or order.

As noted above, the circuit court dismissed the injunction action and changed custody and placement by taking jurisdiction over the parties' divorce action. The appellate court noted that even if the trial court procedurally erred by invoking its divorce jurisdiction, that error was harmless. This is because the injunction statute envisions a change of custody or placement when the respondent is the custodial parent. In this matter, the trial court factually determined that the grounds for an injunction had been established. Thus, the court could have entered the same order changing the child's custody and placement in the injunction proceeding. It turned to the divorce action only because it concluded that an injunction was too harsh and restrictive a sanction against the mother.

Subrogation - Indemnification - Time Limits

Jones v. General Casualty Co., No. 97-3228 (filed 28 April 1998) (ordered published 27 May 1998)

American Family issued underinsured motorist coverage (UIM) to Marjorie Jones, who was injured by a tortfeasor. American Family eventually sued the tortfeasor's employer for indemnification on the UIM coverage paid to Jones. The circuit court dismissed the complaint as untimely. On appeal American Family argued that the judge erroneously applied the statute of limitations governing subrogation to its indemnification claim.

The court of appeals, in an opinion written by Judge Myse, affirmed. Although no Wisconsin cases addressed this issue, the court sided with "the clear majority of cases" holding that "equitable indemnity does not permit an insurer to collect from a wrongdoer. Rather, the insurer's right to indemnity from a wrongdoer is fixed solely by its subrogation rights." The general principles of indemnification discussed in those cases were recognized in Wisconsin. The court held "that Wisconsin law prevents an underinsurer from collecting from a wrongdoer on an indemnification claim."

Direct Actions - Foreign Insurers

Kenison v. Wellington Ins. Co., No. 97-1758 (filed 21 April 1998) (ordered published 27 May 1998)

The plaintiff was injured in a car accident that occurred in Wisconsin. The driver of the other car was employed by a Canadian company that was insured by Wellington Insurance Co., also a Canadian company that did no business in Wisconsin or any part of the United States. The plaintiffs filed a summons and complaint against Wellington (a direct action) but failed to effect timely service on the tortfeasor or her employer. The trial judge dismissed the direct action against Wellington because that insurer did not deliver or issue for delivery a policy of insurance in Wisconsin.

The court of appeals, in an opinion written by Judge Cane, affirmed. The "unambiguous language of sec. 631.01, Stats., limits the application of sec. 632.24, Stats., to insurance policies delivered or issued for delivery in this state." The undisputed record showed that Wellington did not fall within the direct action statute. It was up to the Legislature to "cure any unfairness" in such procedures.

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