'97 Significant Court Decisions

Highlights of the 1997
Wisconsin Supreme Court and Court of Appeals Decisions

By Daniel W. Hildebrand

| Torts | Insurance | Children |
| Guardianship | Corporations | Criminal Law |
| Other Significant Decisions |

Torts

Probably the most difficult decision was Estate of Makos v. Masons Health Care Fund¹ concerning the constitutionality of the statute of repose for actions against health-care providers. The statute of repose bars medical malpractice actions commenced more than five years from the date of the alleged act or omission without regard to the date of discovery.² The claim arose more than five years after the plaintiff knew or had reason to know that she was injured as a result of medical malpractice. The court, in a 4-2 vote, reversed the trial court's decision dismissing the claim.

Justice Steinmetz held the statute unconstitutional beyond a reasonable doubt because it violates procedural due process rights under the Fourteenth Amendment and the right to a remedy guaranteed by Article I, Section 9 of the Wisconsin Constitution. Justice Crooks, after summarizing precedent, concurred that the statute violated Article I, Section 9, concluding that it deprived the plaintiffs of any possibility of recovery even though a legal wrong may have been committed. Justices Bablitch and Wilcox, concurring, held that it was not necessary to reach constitutional issues because alleged malpractice concerning a "diagnosis" does not come within the terms of the statute. Justice Bradley and Chief Justice Abrahamson, although believing that the statute produces a regrettably harsh result, concluded that the plaintiff failed to demonstrate its unconstitutionality beyond a reasonable doubt. They also disagreed with the concurring opinion that the statute did not apply to negligent diagnosis claims.

In Jacque v. Steenberg Homes Inc.³ the court upheld a $100,000 verdict for punitive damages in an intentional trespass case where the jury awarded the plaintiffs only nominal damages of $1. The intentional trespass occurred when the defendant moved a mobile home across the plaintiffs' land knowing that the plaintiffs objected.

Wisconsin case law generally holds that there must be compensatory damages in order to allow for the recovery of punitive damages. However, the court has never directly addressed the issue as to whether nominal damages can support a punitive damage award in the case involving intentional trespass to land. An individual landowner's interest in protecting his or her land from trespass is paramount. The law recognizes that actual harm occurs in every trespass. Society has an interest in punishing and deterring intentional trespassers beyond that of protecting the interests of the individual landowners. When landowners have confidence in the legal system, they are less likely to resort to "self-help" remedies.

The $100,000 punitive damage award was not excessive. The defendant's intentional trespass reveals an indifference and a reckless disregard for the law and for the rights of others. Despite numerous unambiguous refusals by the plaintiffs to allow the defendant access to their land, the defendant moved the mobile home across plaintiffs' land to save delivery costs. Deterrence is an important factor in order to remove profit from intentional trespass.

Insurance

McEvoy v. Group Health Cooperative⁴ held that the tort of bad faith can be applied to health maintenance organizations. The court reasoned that HMOs should be treated as insurers for bad faith purposes. Like traditional insurance companies, HMOs are required to establish contracts with subscribers with set terms of coverage. HMOs are authorized to engage in the insurance business and are subject to many of the same regulations as are applicable to insurance companies. Public policy also supports equating HMOs and insurers. Through contractual arrangements with physicians and patients, HMOs are able to exert control over the costs of treatment and elimination of waste. However, there is a concern that while HMOs focus on reducing costs, there may be failures to recognize and to protect adequately the medical needs of individual subscribers.

In some cases, there may exist a particular HMO action or omission that may constitute both bad faith and malpractice. However, the tort of bad faith is not designed to apply to malpractice cases arising from mistakes made by a health-care provider in diagnosis or treatment. In this case, the plaintiffs did not allege a malpractice action but rather alleged that the defendant breached its contract and in bad faith denied and threatened to deny coverage for out-of-network treatment.

Children

State ex rel. Angela M.W. v. Kruzicki⁵ was a highly publicized case involving a so-called "cocaine mom." It arose out of a motion brought by Waukesha County to acquire custody of a viable fetus that would suffer serious harm because the mother was ingesting cocaine and a CHIPS petition alleging that the viable fetus was in need of protection or services because its mother was unable to provide necessary care resulting in physical harm. The trial court ordered the pregnant woman detained at an in-patient drug treatment facility. The issue presented was whether a viable fetus is included in the definition of a "child"⁶ in the Children's Code.

By a 4-3 vote, the court determined that a viable fetus was not a "child" within the meaning of the statute. Extending the statute to viable fetuses would make other portions of the Children's Code absurd. The Code allows a child to be taken into custody if the welfare of the child demands that the child be immediately removed from his or her present custody. Another provision requires a person taking a child into custody to make every effort to immediately release the child to its parent. By reading the definition of "child" in context with other relevant sections of the Code, the majority believed that the Legislature intended a "child" to mean a human being born alive.

The dissenting justices argued that the majority did not construe the statute in accord with its legislative purpose. "Child" is defined as a person who is less than 18 years of age. In light of medical knowledge concerning fetal development, a child in a viable stage can and does live separately in the womb of its mother and can live and exist as an independent person if born in that stage. Also, this court recognized an unborn child as a person for purposes of recovery under the wrongful death statute. This court also has allowed consideration of a parent's prenatal conduct in making a decision as to whether or not to terminate parental rights. The preamble to the Children's Code expressly directs that it be liberally construed to effect the objectives set forth by the Legislature. Interpreting the word "child" to include a viable fetus fulfills express legislative objectives by allowing the state to intervene to protect and care for the physical development of an unborn child.

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