Supreme Court Digest
By Prof. Daniel D. Blinka & Prof. Thomas J.
Hammer
| Appellate Procedure | Civil
Procedure | Employment Law | Habeas
Corpus | Real Property | Torts
|
Appellate Procedure
Time Extensions - Sanctions - Dismissal
State v. Smythe, No.
97-3191 (filed 14 May 1999)
The defendant filed an appeal from a finding that his refusal to
submit to a breath test was unreasonable and an order revoking his
operating privileges. His attorney filed a request for an eight-day
extension (five working days) in which to file a brief. The request
related to a scheduled vacation by an associate in the attorney's
office. The court of appeals denied the request and dismissed the appeal
as a sanction for failure to file the brief. Wis. Stat. §
(Rule) 809.83(2) (1995-96). The court of appeals looked, in part, at
the attorney's "long history" of requesting time extensions and the past
record of "stern warnings."
The supreme court, in an opinion written by Justice Prosser, reversed
the court of appeals. This case did not involve the loss of jurisdiction
because of an attorney's tardiness in filing a notice of appeal. Rather,
it concerned a discretionary decision to grant a time extension within
which to file a brief. An appeal can be dismissed based on an attorney's
"bad faith or egregious conduct." In its succinct holding, the supreme
court stated that "a court of appeals decision to dismiss an appeal may
be reversed when there is compelling evidence that that court based its
decision, in part, on the past practices of counsel in
unrelated matters." (Emphasis added.) Because the court had
considered such unrelated matters in this case, the supreme court
remanded the case for reconsideration.
Nothing in the record revealed the client's "complicity in or
knowledge of the delay in filing the brief nor his involvement in any of
[the attorney's] previous motions for extension." The opinion also
addresses the possible range of sanctions for "attorneys whose slipshod
practices abuse the system, create unnecessary work, and delay speedy
justice for others."
Justice Bradley concurred, joined by Chief Justice Abrahamson. The
concurrence disagreed with the majority's conclusion that a
reconsideration on remand was necessary. The record did not reveal bad
faith or egregious conduct.
Civil Procedure
Issue Preclusion - Prior Criminal Proceeding - Privity
Paige K.B. v. Steven
G.B., No. 97-0873 (filed 28 May 1999)
Steven was the father of two children. In 1992 he was convicted of
sexually assaulting his children in June and August of 1991. The
children and their mother sued Steven, his parents, and their insurer
alleging a variety of claims. The claims against Steven's parents
alleged negligence and negligent infliction of emotional distress "for
failing to properly supervise Steven's contact with the children while
the children were staying" in the parents' home. Based on issue
preclusion, the trial court limited the parents' discovery as to the
children and the sexual assault allegations. Put another way, the trial
judge concluded that the fact of the sexual assaults had been
conclusively determined by Steven's criminal conviction and his parents
could not litigate that issue. The court of appeals certified the case
to the supreme court.
The supreme court, in a decision authored by Justice Bablitch,
reversed. First, the court clarified the standard of review governing
issue preclusion. Parsing prior case law, the court held "that whether
issue preclusion applies against a litigant who was not a party to a
prior proceeding requires a two-step analysis. ... If, as a matter of
law, the litigant against whom issue preclusion is being asserted is not
in privity or does not have sufficient identity of interest with a party
to the prior proceeding, applying issue preclusion to the litigant would
violate his or her due process rights and the analysis ends. If,
however, as a matter of law, the litigant is in privity or has a
sufficient identity of interest with a party to the prior proceeding,
the court should turn to the second step." This second step "is whether
actually applying issue preclusion to the litigant comports with
principles of fundamental fairness."
The supreme court held that neither Steven's parents nor their
insurer were in privity with Steven in the criminal case. "They were not
parties to the criminal action; they had no opportunity to examine or
cross-examine witnesses. They were, in essence, bystanders." Their
agreement to supervise the children within their home did not create
privity or an identity of interest. The case was remanded to the circuit
court for a determination of the continuing propriety of the order
limiting discovery.
Certiorari Petitions - Fee Waiver Statute
Luedtke v. Bertrand, No.
97-3238-W (filed 28 May 1999)
The supreme court was equally divided over whether to reverse or
affirm the lower court's decision in this case (Justice Wilcox did not
participate). For that reason the court of appeals' decision was
affirmed. The case involved a certiorari petition filed by a state
prisoner based on his loss of recreational time and its eligibility
under the fee waiver statute. See 220 Wis. 2d 574, 583 N.W.2d
858 (Ct. App. 1998).
Employment Law
Qualified Immunity - Property Interest Under State Law -
Pre-discipline Due Process Under Federal Law
Arneson v. Jezwinski, No.
95-1592 (filed 5 May 1999)
The plaintiff filed suit under 42 U.S.C. section 1983 alleging that
when the defendants demoted him and suspended him without pay for 30
days following a sexual harassment complaint filed against him by a
subordinate employee, they violated his clearly established
constitutionally protected property interests in his wages and
continuous employment. These events occurred in April 1990. Before the
supreme court the case required resolution of the following issues:
- Did state law clearly establish in April 1990 that the plaintiff had
a property interest in his wages and in his continuous employment with
the University of Wisconsin?
- If so, did federal law clearly establish in April 1990 the
amount of due process the plaintiff was entitled to receive prior to
being deprived of his property interests?
These questions were critical because if the answer to either of them
is in the negative, then the various U.W. defendants are entitled to
qualified immunity.
In a unanimous decision authored by Justice Steinmetz, the supreme
court concluded that in April 1990 Wisconsin law clearly established
that the plaintiff had a property interest in his wages and continuous
employment. The plaintiff did enjoy permanent status in his management
information specialist position, could only be dismissed for "just
cause" and, therefore, had a property interest in continued employment
under clearly established state law. See Wis. Stat. §
230.34(1)(a).
Nevertheless, the supreme court concluded that federal law did not
clearly establish in April 1990 the amount of due process the plaintiff
was entitled to receive prior to being deprived of his property
interests. The amount of process due is a matter of federal
constitutional law and, to present a cognizable claim, the plaintiff had
to show that the amount of due process which the defendants were
required to accord him was clearly established in 1990. In Cleveland
Bd. of Education v. Loudermill, 470 U.S. 532 (1985), the U.S.
Supreme Court held that prior to termination, "the tenured public
employee is entitled to oral and written notice of the charges against
him, an explanation of the employer's evidence, and an opportunity to
present his side of the story."
In this case the state supreme court agreed with the defendants that
Loudermill did not clearly establish the process due an
employee whose discipline falls short of termination. There is evidence
in Seventh Circuit cases decided after the plaintiff was disciplined
that the due process requirements attendant upon deprivations of
property interests less significant than continued employment may be
less than that required by Loudermill for terminated
employees.
Thus, the Wisconsin Supreme Court concluded that in 1990 the breadth
of Loudermill was unclear as to the necessary process due an
employee prior to discipline short of termination. The court could not
say that the unlawfulness of failing to provide the plaintiff with a
pre-demotion or pre-suspension hearing would have been apparent to a
reasonable official at the time the plaintiff was disciplined.
Accordingly, the court concluded that the U.W. defendants are
entitled to qualified immunity in this lawsuit.
Chief Justice Abrahamson did not participate in this decision.
Habeas Corpus
Clerical Error - Appellate Review - Remedy
State ex rel. Fuentes v. Wisconsin
Court of Appeals, No. 98-1534-W (filed 14 May 1999)
Through an inadvertent clerical error, a court of appeals decision
affirming Fuentes' conviction was sent to the law firm where his prior
attorney had practiced. His present attorney never received notice of
the decision until after the court of appeals remitted the record to the
circuit court. When the present attorney did receive notice that
remittitur had occurred, the 30-day period to petition for review in the
supreme court also had expired. The court of appeals "expressed regret"
over the mistake but concluded that it "was without power to vacate and
reissue the decision after remittitur had occurred."
The supreme court, in an opinion written by Justice Bradley, granted
Fuentes' writ of habeas corpus and permitted him time to file a petition
for review. First, Fuentes was imprisoned under sentence of the court;
therefore, he was deprived of his liberty. Second, he was deprived of a
cognizable constitutional right - "the right to effective assistance of
counsel in the preparation of a petition for review when appellate
counsel is statutorily required." Finally, the writ was his only remedy.
The court of appeals lost its jurisdiction following the remittitur. The
supreme court was constitutionally empowered to fashion "an appropriate
remedy by way of its habeas corpus authority."
Real Property
Condemnation of Property by Department of Transportation - Appeals -
Service on the Attorney General
Wisconsin Department of
Transportation v. Peterson, No. 97-2718 (filed 8 June 1999)
In 1994 the Department of Transportation (DOT) condemned property
belonging to Henry and Edith Cohen and to Harbor Mall Properties (the
Cohens) and recorded the award of damages with the county register of
deeds. Nearly two years later the Cohens sought to challenge the amount
of the damage award by initiating an appeal under Wis. Stat. section
32.05(9). Rather than serving the DOT directly, the Cohens served
the attorney general who is the designated service agent for the State
of Wisconsin under section
801.11(3). Though the application for appeal was addressed to and
served upon the attorney general, the Cohens named the DOT as the
condemnor in the application for appeal.
The circuit court acted on the application and assigned the appeal to
the chairperson of the county condemnation commission. DOT filed a
petition for supervisory writ of prohibition in the circuit court
enjoining the condemnation commission from hearing the Cohens' appeal.
DOT contended that the Cohens had not properly appealed their award of
damages because they failed to serve the condemnor, the DOT, as required
by section 32.05(9). The circuit court denied DOT's petition, DOT
appealed, and the court of appeals affirmed.
In a unanimous opinion authored by Justice Bradley, the supreme court
affirmed the court of appeals. It concluded that section 32.05(9) can
reasonably be interpreted as permitting the property owner to serve the
State of Wisconsin rather than the DOT. Therefore the circuit court had
authority to assign the Cohens' appeal to the county condemnation
commission.
Torts
Economic Loss Doctrine - Public Safety Exception
Wausau Tile Inc. v. County
Concrete Corp., No. 97-2284 (filed 28 May 1999)
Wausau Tile Inc. manufactures, sells, and distributes pavers to
entities around the country. Pavers are concrete paving blocks made of
cement and other materials for use mainly in exterior walkways. Wausau
contracted with Medusa Corporation to supply the cement for the pavers.
Wausau Tile's contract with Medusa contained warranties providing that
Medusa would remedy or replace cement that did not meet particular
specifications.
In 1996 Wausau Tile filed suit against Medusa (and others) alleging
breach of warranty, breach of contract, negligence, indemnification,
contribution, and strict liability claims. Wausau claimed that several
of the installed pavers had suffered excessive expansion, deflecting,
curling, cracking, and/or buckling and that these problems were in part
due to high levels of alkalinity in Medusa's cement. Wausau claimed that
the expansion and the cracking of the pavers had led to problems and
property damages which have given rise to various claims, demands, and
suits against Wausau. It alleged that it had sustained monetary damages
in remedying the property damage claims, is facing claims for personal
injuries, and has suffered and will continue to suffer lost business and
profits.
The circuit court concluded that the economic loss doctrine precluded
Wausau Tile from maintaining its tort claims against Medusa. The court
of appeals certified the case to the supreme court which accepted
review. In a decision authored by Justice Crooks, the supreme court
affirmed the circuit court.
The economic loss doctrine precludes a purchaser of a product from
employing negligence or strict liability theories to recover from the
product's manufacturer a loss that is solely economic. Economic loss is
the loss in a product's value that occurs because the product is
inferior in quality and does not work for the general purposes for which
it was manufactured and sold. The doctrine does not preclude a product
purchaser's claims of personal injury or damage to property other than
the product itself.
In this case damages sought by Wausau Tile can be grouped into three
categories: 1) the costs of repairing and replacing cracked, buckled, or
expanded pavers; 2) the costs of satisfying third parties' claims that
the defective pavers either caused personal injury or damaged property
adjoining the pavers, such as curbs and walls; and 3) lost profits and
business. The supreme court considered each of these types of damages to
determine the applicability of the economic loss doctrine.
With respect to the costs of repairing and replacing the pavers,
Wausau Tile argued that these costs do not constitute economic loss
because the pavers themselves are property other than the defective
product (Medusa's cement). The supreme court disagreed. Damage by a
defective component of an integrated system to either the system as a
whole or other system components is not the kind of damage to "other
property" that would preclude application of the economic loss doctrine.
The pavers were integrated systems comprised of several component
materials, including Medusa's cement. The supreme court rejected Wausau
Tile's contention that the pavers constituted property other than the
defective cement.
Next, the court rejected Wausau Tile's claims for damages in the
amounts it expended or anticipates that it will expend to remediate
third parties' claims of damage to property adjoining the pavers and
pedestrians' claims of personal injury. These claims do not allege any
personal injury or property damage on Wausau Tile's part. Rather, these
claims are an attempt by Wausau Tile to recoup the commercial costs of
settling the claims of third parties that resulted from the product
defect. As such, the claims allege consequential economic loss.
Moreover, even if Wausau Tile's claims were sufficient to allege
personal injury and/or property damage, it would not be permitted to
litigate those claims because Wausau Tile would not be a real party in
interest and because joinder of the real parties in interest would not
be feasible. With regard to the latter, joinder of the third-party real
parties in interest would be difficult if not impossible because,
according to the complaint, the pavers were sold and installed in large
quantities nationwide. Third parties having claims of property damage or
personal injury are likely to be scattered throughout the country and
there is no way of knowing how many potential plaintiffs have yet to be
harmed or will come forward with their claims.
Finally, the court rejected Wausau Tile's claims for lost business
and profits. These are indirect losses attributable to the inferior
quality of the pavers and constitute economic loss, which is not
recoverable in tort.
The supreme court also considered whether the rule of Northridge
Co. v. W.R. Grace & Co., 162 Wis. 2d 918, 471 N.W.2d 179
(1991), permits Wausau Tile to maintain its tort claims in spite of the
economic loss doctrine. In doing so the supreme court addressed a
question certified to it by the court of appeals as to "the nature,
extent, and scope of the public safety exception to the economic loss
doctrine enunciated in Northridge."
Wausau Tile argued that the damaged pavers present a risk of injury
to pedestrians on the walkways in which they have been installed and
that this risk of injury amounts to a public safety hazard that entitles
it to bring its tort claims under an exception to the economic loss
doctrine contained in Northridge. The supreme court disagreed.
Northridge involved a defective product that contained asbestos
and, because of the health hazards posed by asbestos, most courts have
permitted tort recovery for claims of property damage to buildings
caused by asbestos contamination in spite of the economic loss doctrine.
In Northridge the Wisconsin Supreme Court chose to align
Wisconsin with those jurisdictions that permit tort recovery for
asbestos damage to buildings. Northridge, however, did not
create a broad "public safety exception" to the economic loss doctrine.
The facts of this case do not involve asbestos or any other material
that is inherently dangerous to the health and safety of humans. The
Northridge exception thus does not apply to claims of the type
made by Wausau Tile.
Justice Bradley did not participate in this decision.
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 Lawyer
