Supreme Court Digest

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

| Civil Procedure | Criminal Procedure |
| Insurance | Torts |

Default Judgments - Amended Complaints - Timely Service

Holman v. Family Health Plan, No. 97-1490-FT (filed 7 July 1999)

A plaintiff injured in a car accident filed a complaint against the other driver and her subrogated health insurer, Family Health Plan (FHP), on Jan. 7, 1997. Ten days later, on Jan. 17, the plaintiffs served the complaint on FHP and the other defendants. On Jan. 23 the plaintiffs filed an amended complaint "that was complete in itself" (that is, it did not refer to the prior, superseded complaint). When FHP failed to answer the original complaint within the statutory 20-day period, the plaintiffs moved for a default judgment, which the court entered against FHP on Feb. 11, 1997. The court of appeals affirmed the default judgment.

The supreme court, in an opinion written by Chief Justice Abrahamson, reversed. The court first observed a problem that went unnoted below: The default was entered on the original complaint, which was superseded by the amended complaint that was never served on FHP. The court concluded that "the amended complaint superseded the original complaint when the amended complaint was filed in the circuit court." Thus it followed that "the default judgment in this case is a nullity because it was entered on the superseded original complaint." The holding conformed to the practice followed in federal courts and in other states.

Other Acts Evidence - Third-party Acts - Exculpatory Evidence

State v. Scheidell, No. 97-1426-CR (filed 30 June 1999)

The defendant was charged with first-degree sexual assault while masked. Asserting an "identity" defense, he proffered evidence of another, purportedly similar, offense by an unknown third party. The trial judge excluded the evidence. The court of appeals reversed in an opinion that addressed the defendant's use of evidence that a third party committed "other acts" where identity is at issue. State v. Scheidell, 220 Wis. 2d 753 (Ct. App. 1998).

The supreme court, in an opinion written by Justice Wilcox, reversed the published decision of the court of appeals. The court held the admissibility of the defense's other act evidence is governed by the framework recently established in State v. Sullivan, 216 Wis. 2d 768 (1998). It rejected the court of appeal's "newly established test" in the opinion below as well as the approach taken years earlier in State v. Denny, 120 Wis. 2d 614 (Ct. App. 1984). While the defense need not demonstrate a "signature-like" affinity between the charged offense and the other act, some similarity must be demonstrated, especially where the other act is perpetrated by an unknown actor. Applying the three-step approach outlined in Sullivan, the court held that the trial judge had properly excluded the evidence.

Chief Justice Abrahamson, joined by Justices Bradley and Bablitch, dissented. The other act evidence bore sufficient similarity and presented little in the way of unfair prejudice justifying its exclusion under section 904.03 of the Wisconsin Statutes.

Pollution Exclusion - Lead-based Paint

Peace v. Northwestern National Ins. Co., No. 96-0328 (filed 9 July 1999)

This action began when a guardian ad litem alleged that the owners of a building 1) failed to comply with a city ordinance prohibiting "any lead-based nuisance," 2) negligently failed to inspect and maintain the premises, and 3) negligently failed to properly remove lead-based paint. The issue concerned whether the owners had coverage under a commercial general liability policy that contained a pollution exclusion. The circuit court ruled that the pollution exclusion clause applied and forestalled coverage. The court of appeals reversed, "concluding that lead derived from paint chips, paint flakes and dust is not a pollutant or contaminant under the exclusion."

The supreme court, in an opinion written by Justice Prosser, reversed. Based on the policy language and case law, the court held "that the pollution exclusion clause in [an owner's] policy excludes bodily injury from the ingestion of lead in paint that chips, flakes, or breaks down into dust or fumes. When the 'pollutant' lead - once contained - begins to disperse, discharge, or escape from the containment of the painted surface, it falls within the plain language of the pollution exclusion." The supreme court rejected arguments to the effect that the policy language was ambiguous, that a reasonable insured would have anticipated coverage, and that it was unreasonable "to apply the pollution exclusion clause to routine incidents such as paint peeling off a wall."

Justice Bradley filed a concurring opinion that responded to the dissent filed by Justice Crooks and joined by Justice Bablitch. Chief Justice Abrahamson also dissented.

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