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Vol. 72, No. 7, July 1999

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1998 Significant Court Decisions

GAL Immunity

Paige K.B. v. Molepske⁴ held that there was an absolute privilege for a guardian ad litem (GAL) in child custody cases. The GAL was appointed to represent the best interests of three children during divorce and custody proceedings. During those proceedings, it was alleged that the father had sexually abused the children. Three psychologists were appointed to examine the children. The GAL petitioned the court for psychological testing based upon allegations by both parents of alcoholism, drug abuse, and abuse of the children. The GAL recommended that the court give custody of the children to their mother. Notwithstanding that recommendation, the court awarded the parents joint custody, granting the father primary physical placement. In doing so, the court found the testimony of one psychologist, who found no evidence of sexual abuse, more credible than the testimony of another psychologist, who thought there probably had been abuse.

After the divorce, the children were placed in a foster home under a CHIPS petition alleging that the father had sexually abused them. He was formally charged and convicted of sexually assaulting the children. The court then transferred physical custody to the mother. The children claimed that the GAL was negligent.
Wisconsin courts have recognized an absolute quasi-judicial immunity for those persons who perform functions that are intimately related to the judicial process. This immunity has been applied previously to witnesses, appointed pathologists, and a court-appointed psychologist. Wisconsin courts apply a functional analysis to determine whether such absolute immunity attaches to a particular defendant. Immunity is justified and defined by the functions it protects and serves, not by the person to whom it attaches. A GAL appointed by a circuit court to represent a child's best interests is a nonjudicial officer who performs acts intimately related to the judicial process. The GAL essentially functions as an agent or arm of the court, charged with the same standard that must ultimately govern the court's decision - that is, the best interests of the child.

Plaintiffs argued that unless GALs are held civilly liable, there will be no effective remedy available to the parties injured by negligent acts and omissions of GALs. In rejecting this argument, the court reasoned that GALs must be allowed to independently consider the facts of the case and advocate the child's best interests free from the threat of harassment or retaliatory litigation. Should immunity not be provided, there likely would be a decline in the number of attorneys willing to serve as GALs in child custody proceedings. In addition, fear of liability could warp the judgment of those GALs who are appointed toward appeasement of disappointed parents or children and away from protecting the child's best interests.

Economic Loss Doctrine

In Daanen & Janssen Inc. v. Cedarapids Inc.⁵ the court extended the economic loss doctrine to protect a manufacturer who was not in privity with the end user of a product. Cedarapids manufactured a component part to rock crushers called a "pit man." It manufactured and sold new crushing equipment and spare parts to distributors that then resell the products to quarry owners.

Daanen, a quarry owner, purchased from one of the distributors a pit man that failed. In the Distributor Agreement, Cedarapids provided a standard express warranty providing that it applied to the distributor's customers. Daanen was unaware of this warranty, and the distributor did not pass the warranty to Daanen. In addition, Daanen did not request or receive from the distributor a warranty on the replacement pit man. The invoice from the distributor stated that the distributor disclaimed all warranty and liability. After Daanen installed the replacement part in two of its crushers, the machines began to break down. These breakdowns eventually were attributed to manufacture and design problems in the pit man. Daanen claimed that Cedarapids was negligent and sold a defective product that caused more than $400,000 in damages. There was no allegation that the defective pit man caused personal injury or damage to property other than to the pit man itself.

The economic loss doctrine is a judicially created doctrine providing that a commercial purchaser of a product cannot recover from a manufacturer under tort theories of negligence or strict products liability where the damages are solely "economic" in nature. Application of economic loss doctrine to tort actions between commercial parties is based on three policies, none of which is affected by the presence or absence of privity between the parties:

1. to maintain the fundamental distinction between tort and contract law;
2. to protect commercial parties' freedom to allocate economic risk by contract; and
3. to encourage the party best suited to assess the risk of economic loss, the commercial purchaser, to assume, allocate, or insure against that risk.

If, as here, only economic losses are caused to a commercial party, the policy arguments for imposing tort liability are considerably diminished. A manufacturer in a commercial relationship has no duty under either negligence or strict liability theories to prevent a product from injuring itself. Contract law is better suited for enforcing duties in the commercial arena because it permits the parties to specify the terms of their bargain and to protect themselves from commercial risk. The absence of privity of contract does not alter this conclusion.

The economic loss doctrine serves to protect commercial parties' freedom to contract. In situations where commercial parties have allocated their respective risks through contract, the economic loss doctrine teaches it is more appropriate to enforce that bargain than to allow an end run around the bargain through tort law. If manufacturers are held liable to remote commercial purchasers under tort theories for frustrated economic expectations, all manufacturers would effectively be prevented from negotiating their liability through the bargaining process. Commercial parties, presumably of equal bargaining power, are generally free to set the terms of their own agreement, including warranties, disclaimers, and limitations of remedies. Subject to requirements of good faith and unconscionability, a manufacturer can negotiate with its distributors and purchasers to disclaim or limit liability for economic losses.

When Daanen purchased the pit man from the distributor, it could have requested an express warranty that could have been enforced in a suit for breach of warranty. Daanen chose not to or failed to do so. The court assumed that the lack of a seller's or manufacturer's warranty was reflected in the purchase price. If Daanen were permitted to bypass its agreement and recover the economic losses in tort, the net effect would be to render the contract between Daanen and its distributor and the contract between Cedarapids and its distributor nullities, emasculating the law of contracts in the process.

Daniel W. Hildebrand is a member of DeWitt, Ross & Stevens S.C., Madison. He is a former president of the Dane County Bar Association and of the State Bar of Wisconsin.

Resisting Unlawful Arrest

In State v. Hobson⁶ the court abolished prospectively the common law right to forcibly resist an unlawful arrest. The circuit court had previously determined that Beloit police officers lacked probable cause to arrest the mother of a 5-year-old boy after she refused to allow the officers to speak to her son about a stolen bicycle. When the officers decided to arrest the mother for obstruction, the mother resisted and struck one of the officers. This resulted in her arrest for an additional charge of battery to a police officer. On appeal, the state sought to abrogate the privilege to resist an unlawful arrest and to reverse the order dismissing the battery charge.

As early as the 17th Century, English common law recognized the right to forcibly resist an unlawful arrest. This right was based on recognition that action by an official exceeding lawful authority constituted a trespass and a provocation and could be resisted by physical force. Wisconsin courts, while mentioning the right to forcibly resist an unlawful arrest, have not had the opportunity to apply it to circumstances presented in this case.

The court concluded that public policy is best served by abrogating the common law privilege to use physical force to resist an unlawful arrest rather than continuing to recognize it. Case law in other states demonstrates a trend toward abrogation of this right. Legal and societal circumstances have changed dramatically since the inception of that right. In its early development, physical resistance was the only effective response to the problem of unlawful arrest. In those years, private citizens made most arrests, bail for felonies usually was unattainable, and years might pass before royal judges arrived for a jail delivery. Jail conditions were such that a prisoner had an excellent chance of dying of disease before trial. The common law right to forcibly resist unlawful arrest developed out of necessity in response to those circumstances.

Not only is forcible resistance now a substantially less effective response to an unlawful arrest, there are many safeguards and opportunities for redress. Individuals no longer languish for years in disease-ridden jails. Bail is available. Individuals are not detained indefinitely on dubious charges. Prompt arraignment and determination of probable cause are mandated. Violent self-help is anti-social and unacceptably dangerous. In the absence of unreasonable force, there should be no right to forcibly resist an unlawful arrest. When persons resist arrest, they endanger themselves, the arresting officers, and bystanders.

Chief Justice Abrahamson, concurring, argued that the privilege should be retained. Two justices would admit a very narrow exception to abrogation, allowing resistance if the individual reasonably believed that serious and substantial mental or physical health concerns of the individual or a member of his or her family are threatened in a way not susceptible of later cure in the courtroom.

Endnotes

¹ Jackson v. Benson, 218 Wis. 2d 835, 578 N.W.2d 602 (1998).

² Flynn v. Dep't of Admin., 216 Wis. 2d 521, 576 N.W.2d 245 (1998).

³ Gorton v. Hostak, Henzl & Bichler S.C., 217 Wis. 2d 493, 577 N.W.2d 617 (1998).

⁴ Paige K.B. v. Molepske, 219 Wis. 2d 418, 580 N.W.2d 289 (1998).

⁵ Daanen & Janssen Inv. v. Cedarapids Inc., 216 Wis. 2d 395, 573 N.W.2d 842 (1998).

⁶ State v. Hobson, 218 Wis. 2d 350, 577 N.W.2d 825 (1998).