Supreme Court Digest

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

| Appellate Procedure | Civil Procedure | Constitutional Law | Consumer Law |
| Criminal Procedure | Motor Vehicle Law | Open Records Law | Sexual Predator Law |
| Torts | Trials | Worker's Compensation |

Stipulations - Vacatur - Published Decisions

Mason Shoe Mfg. Co. v. Firstar Bank, No. 97-2053 (filed 29 June 1999)

Based on the parties' joint stipulation for dismissal and vacatur on all issues involved in this litigation, the supreme court ordered the case dismissed with prejudice and summarily vacated the decisions of the court of appeals and the circuit court. See Mason Shoe Mfg. Co. v. Firstar Bank Eau Claire, 217 Wis. 2d 715 (Ct. App. 1998).

Justice Wilcox did not participate. Justice Bradley, joined by Chief Justice Abrahamson, dissented from that part of the order vacating a published decision by the court of appeals. The dissenters argued that this action is without precedent and violates public policy.

Amended Complaint - Service on Defaulting Party

Ness v. Digital Dial Communications Inc., No. 96-3436 (filed 7 July 1999)

This garnishment case presented the issue of whether a defendant who defaults before an amended complaint is filed loses the right to cure its default by answering the amended complaint. In a unanimous decision authored by Justice Crooks, the supreme court concluded that a defaulting party cannot answer an amended complaint, thereby attempting to cure its default, when the party is already in default when the amended complaint is filed.

A party in default for failing to answer forfeits its due process right to notice of further pleadings. Since a defaulting party has through inaction lost its right to notice of further pleadings, a plaintiff is not required to serve the defaulting party with an amended complaint. See Wis. Stat. § 801.14(1). Similarly, a defaulting party loses the right to answer the amended complaint and revive its defense. Essentially, in those circumstances, the defaulting party halts the action at the time of the original complaint. The amended complaint supersedes the original as to any other party except the defaulting party. Because the amended complaint does not supersede the original complaint with regard to the defaulting party, the latter does not receive a new window in which to file an answer to the amended complaint.

The court noted that section 801.14(1) requires a plaintiff to serve even a defaulting defendant with an amended complaint when the amended complaint contains "new or additional claims for relief." However, that provision did not apply in this case because the amended complaint did not present new or additional claims. It merely involved a technical change.

Justice Steinmetz did not participate in this decision.

Frivolous Actions - Toxic Torts - Causal Nexus

Jandrt v. Jerome Foods Inc., No. 98-0885 (filed 7 July 1999)

The plaintiffs, children with birth defects, sued the food processing plant (JFI) where their mothers worked, alleging negligence and violations of the Safe Place Statute. The children asserted that their mothers were exposed to toxic chemicals (for example, ammonia) while working at the plant. In the complaint the plaintiffs alleged that, "upon information and belief, said physical defects were caused in utero by the exposure of their mothers to poisonous chemicals emitted from one of the aforesaid food processing machines." A medical expert had recommended that the plaintiffs conduct limited formal discovery of JFI to learn more about the mothers' chemical exposure. JFI produced 200,000 documents that were "reviewed" over two days. Nine months after commencing the suit, the plaintiffs' law firm (the "Previant firm") voluntarily dismissed the action when it appeared that causation could be established only through an expensive, time consuming epidemiological study.

After the circuit court granted the motion to dismiss, JFI moved for sanctions against the Previant firm alleging that it had commenced and continued a "frivolous action." The circuit court found that the Previant firm had filed and continued the lawsuit even though the causation claim lacked any reasonable basis in law or fact. On certification from the court of appeals, the supreme court, in a decision written by Justice Steinmetz, affirmed in part and reversed in part.

As to the first issue, the supreme court held that the action was not frivolous when filed. The filing of an alleged frivolous claim is controlled by section 802.05 of the Wisconsin Statutes, which requires the pleader to make "three warranties":

• The pleading was not "interposed" for any improper purpose.

• The pleading is "well grounded in fact," based on the signer's "best" knowledge, information, and belief.

• The signer conducted a "reasonable inquiry" and so on.

The action was not frivolous when filed in light of the Previant firm's knowledge at the time of filing and the tight time deadline it was under to commence the action before the law changed on joint and several liability.

But as to the second issue, the court held that the Previant firm had continued a frivolous claim as of the date of its second request for documents, "following which it made no further investigation into causation, and in response to which JFI began to accumulate substantial fees and costs defending itself against the action." See Wis. Stat. § 814.025. "[T]he cornerstone of this conclusion rests in this: 1) causation - the causal connection between any amount of a chemical used at JFI and the plaintiffs' birth defects - was the critical element of the plaintiffs' claims; 2) following the filing of the complaint, for nine months the Previant firm did nothing [sic] to try to establish this causation."

Justice Bradley, joined by Chief Justice Abrahamson, dissented.

Governmental Takings of Property -
Temporary Regulatory Takings

Eberle v. Dane County Board of Adjustment, No. 97-2869 (filed 7 July 1999)

The plaintiffs are real estate developers who own a tract of land in Dane County. After securing the approval of the county, they recorded a certified survey map dividing the land into two parcels. Effective with the recording of the certified survey map, the zoning of the parcels was changed to classifications that would permit residential uses.

Prior to this rezoning, the lots could be accessed from either of two public roads, Coray Lane and Timber Lane. However, as a condition of the rezoning, the county (at the request of the Town of Verona where the land was located) imposed a requirement that access to one of the lots occur from Timber Lane. This requirement eliminated the possibility of accessing that lot (and, due to the layout of the parcel, the other lot as well) from Coray Lane. By recording the certified survey map, the plaintiffs effectively agreed to this access restriction.

The plaintiffs thereafter petitioned the Dane County Board of Adjustment for a special exception permit allegedly required by a Dane County ordinance to build a driveway connecting the lots to Timber Lane. The board denied the permit after finding that the proposed driveway would cross a wetland and was not permitted by Dane County ordinances applicable to wetland zoning districts. Without this permit there could be no legal construction of any driveway to the lots. On certiorari review the circuit court reversed the board's decision and ordered it to issue the special exception permit, a decision that the court of appeals affirmed and which was not appealed to the supreme court.

The issue before the supreme court was whether the circuit court properly dismissed the plaintiffs' other claims in which they contended that the board's denial of the permit deprived them of a legal means of access to their property and thus constituted an unconstitutional temporary regulatory taking under the federal constitution and article I, section 13 of the Wisconsin Constitution.

In a majority decision authored by Justice Crooks, the supreme court held that the plaintiffs have stated a valid temporary regulatory taking claim under the Wisconsin Constitution. The constitution provides that the property of no person shall be taken for public use without just compensation. A taking can occur absent physical invasion only where there is a legally imposed restriction upon the use of property. Takings that do not involve physical invasions of land are called "regulatory takings." Such takings are now well established in Wisconsin law. The rule applied by Wisconsin and the federal courts is that a regulation or government action must deny the landowner all or substantially all practical uses of property in order to be considered a taking for which compensation is required. Both the Wisconsin Supreme Court and the U.S. Supreme Court have recognized that just compensation is constitutionally required for temporary regulatory takings that continue for only a temporary period of time.

The supreme court was satisfied that the plaintiffs have stated a valid claim for a temporary regulatory taking under the Wisconsin Constitution. The plaintiffs' claim that the board's improper denial of the special exception permit temporarily deprived them of the ability to access their property by way of Timber Lane, the only legal means of access. Certainly, under the circumstances of this case, a complete lack of legal access to a piece of land constitutes a deprivation of all or substantially all practical uses of that land. In footnote the court observed that any regulatory taking claim asserted by the plaintiffs would have to be for the temporary deprivation of use that occurred during the period in which the permit denial was in effect.

In the course of this opinion the supreme court overruled those portions of Reel Enterprises v. City of La Crosse, 146 Wis. 2d 662, 431 N.W.2d 743 (Ct. App. 1988), which suggest that a decision by a governmental entity that is reversed by a court is not a legally imposed restriction that could be cognizable as a taking.

Finally, given its decision that the plaintiffs may pursue their claim under the Wisconsin Constitution, the supreme court held that their federal claims under 42 U.S.C. section 1983 are not ripe for review. The Fifth Amendment to the U.S. Constitution proscribes takings without just compensation and no constitutional violation occurs until just compensation has been denied. If a state provides an adequate procedure for seeking just compensation, the property owner cannot claim a violation of the Just Compensation Clause until it has used the procedure and been denied just compensation. As a matter of fact, the plaintiffs conceded in their brief before the supreme court that their claims of temporary regulatory takings under the federal constitution would not be ripe if they are allowed to pursue their claim under the Wisconsin Constitution.

Chief Justice Abrahamson filed a dissenting opinion.

Consumer Credit Transactions - Wisconsin Consumer Act -
Attorney Fees - Prevailing Parties

Community Credit Plan Inc. v. Johnson, Nos. 97-0574-77, 97-0735 and 97-1101-02 (filed 9 July 1999)

Several customers purchased vehicles in consumer credit transactions financed by Community Credit Plan Inc., whose office is in Waukesha County. The transactions did not occur in Milwaukee County, nor did any of the customers live or store any vehicle involved in a transaction in Milwaukee County. When each of these loans went into default, Community commenced small claims replevin actions in Milwaukee County against each customer to recover the vehicles that had secured the consumer credit transactions. None of the customers appeared in court, and default judgments in replevin authorizing repossession were entered against each customer by the Milwaukee County small claims court. After the repossession and sale of the vehicles had occurred, the customers brought a motion to vacate their respective judgments and to dismiss the replevin actions for lack of jurisdiction on the grounds of improper venue. See Wis. Stat. § 421.401(2)(b). The circuit court granted the motions to vacate and then granted Community's oral motions to dismiss the actions without prejudice. The circuit court further determined that the customers were not entitled to attorney fees pursuant to Wis. Stat. section 425.308.

The customers appealed the denial of attorney fees under the Wisconsin Consumer Act. The court of appeals reversed, concluding that the customers prevailed in the circuit court and therefore were entitled to attorney fees under the WCA. The appellate court used a two-prong test to reach this conclusion: whether there was a significant benefit in the litigation to the plaintiffs and whether there was a violation of the WCA by the defendant. Because the customers received a "significant benefit" from the dismissal of the default judgments, and because the creditor had in fact violated the WCA by prosecuting the actions in Milwaukee County in violation of the venue provisions of the WCA, the court of appeals held that the customers prevailed and were therefore entitled to attorney fees.

In a majority decision authored by Justice Steinmetz, the supreme court affirmed the court of appeals. It reached this conclusion by adopting the reasoning and decision of the court of appeals summarized above.

Justice Wilcox filed a dissenting opinion.

Consumer Credit Transactions - Wisconsin Consumer Act -
Improper Venue - Nonjudicial Enforcement of Judgments -
Attorney Fees

Kett v. Community Credit Plan Inc., Nos. 97-3620, 97-3626 and 98-0092 (filed 9 July 1999)

This case involved three actions against Community Credit Plan Inc. for damages for alleged violations of the Wisconsin Consumer Act. It arose from earlier replevin actions that Community Credit brought in Milwaukee County Circuit Court against these customers to recover their vehicles that were collateral for loans. Community Credit obtained default replevin judgments in these actions, but the Milwaukee County Circuit Court later vacated the judgments because the actions were commenced in Milwaukee County Circuit Court in violation of the venue provisions of the WCA; the actions were dismissed. After the Milwaukee County Circuit Court entered the default replevin judgments but before it vacated those judgments, Community Credit took possession of the customers' vehicles by nonjudicial recovery. In these actions the customers are seeking damages from Community Credit for wrongfully taking possession of the vehicles and for other practices prohibited by the WCA.

The first issue considered by the supreme court was whether Community Credit's taking possession of the vehicles by nonjudicial recovery pursuant to the default replevin judgments entered by the Milwaukee County Circuit Court in violation of the venue provisions of the Wisconsin Consumer Act violated Wis. Stat. section 425.206. In a majority decision authored by Chief Justice Abrahamson, the supreme court concluded that the default replevin judgments on which Community Credit relied for possession of the collateral by nonjudicial recovery were invalid at the time of entry for purposes of section 425.206(1)(b) because Community Credit had not commenced the replevin actions in a county of proper venue. [Section 425.206(1)(b) provides that a merchant may not take possession of collateral or goods subject to a consumer lease in this state by means other than legal process except when judgment for the merchant has been entered in a proceeding for recovery of collateral or leased goods under section 425.205.] By taking possession of collateral by nonjudicial recovery without a valid judgment (the judgment being invalid because of improper venue), Community Credit was, as a matter of law, subject to the penalty provision of section 425.305.

The second issue considered by the supreme court was whether Community Credit engaged in prohibited practices in violation of section 427.104(1)(h) and (j). Put another way, did Community Credit engage in conduct that could reasonably be expected to threaten or harass the customers or persons related to the customers or claim, or attempt or threaten to enforce a right with knowledge or reason to know that the right did not exist. When this matter was before the court of appeals, it concluded that Community Credit had engaged in prohibited debt collection practices as a matter of law by attempting to enforce a right it had reason to know did not exist. Before the supreme court Community Credit set forth no reason that persuaded the supreme court that the court of appeals erred in this regard.

Finally, the supreme court considered whether the customers are entitled to reasonable attorney fees under section 425.308, which provides that if the consumer prevails in an action arising from a consumer transaction, the customer shall recover a reasonable amount for attorney fees. The supreme court agreed with the court of appeals that these cases should be remanded to the circuit court for determination of reasonable attorney fees under section 425.308.

Justice Wilcox filed a dissenting opinion that was joined by justices Crooks and Prosser.

Sentencing - Admission of Victim's Criminal Record

State v. Spears, No. 97-0536-CR (filed 7 July 1999)

Victim Young robbed the defendant, taking her purse. A bystander chased Young, beat him, and successfully retrieved the purse. After the purse was returned to the defendant, the defendant took a car and chased Young, who was on foot. The defendant hit Young propelling him into the street. The defendant then drove off, but moments later returned to the scene and ran directly over Young where he lay in the street. Young died shortly thereafter from the injuries he sustained from twice being hit by the car the defendant was driving.

Pursuant to a plea agreement the defendant was convicted of second-degree intentional homicide. At sentencing members of Young's family cast doubts upon the defendant's version of the events, questioning whether Young physically assaulted the defendant during the robbery. Family members portrayed the deceased as a good-hearted person whose death at the hands of the defendant required that she be given a harsh sentence.

In anticipation of the sentencing hearing, defense counsel prepared a sentencing memorandum to which he attached a copy of the victim's criminal record. That record revealed that the victim had been arrested on 18 separate occasions between 1984 and 1993 and that he was convicted of burglary on at least three occasions and was once convicted of robbery. [This record was characterized by the supreme court as revealing a history of violent crimes.]

The prosecutor objected to the use of the victim's criminal record at sentencing, contending that it was not relevant. The circuit court declined to formally strike the record, but agreed with the prosecutor that "the specific prior record of the victim was not relevant at all to these proceedings."

The single issue before the supreme court was whether the circuit court in sentencing the defendant erroneously exercised its discretion when it ruled that the victim's criminal record was irrelevant to its sentencing determination. In a majority decision authored by Justice Steinmetz, the court held that the evidence of the victim's criminal record was relevant to the defendant's sentence because it supported the defendant's view of the crime for which she was convicted. The criminal record should have been considered in assessing whether the deceased's assault on the defendant was likely to have been physical or nonphysical because that would reflect upon the deceased's conduct and character on the night of the defendant's crime and, perhaps, may have had some effect on the sentence the defendant received.

In sum, the court concluded that where a victim's criminal record supports a defendant's version of a crime, the gravity of which crime is a sentencing factor, it should be admitted as evidence at the defendant's sentencing hearing. Of course, once such evidence is admitted, the weight to be given it at sentencing is within the circuit court's discretion.

Justice Bablitch filed a concurring opinion.

Chief Justice Abrahamson filed a dissenting opinion that was joined by justices Bradley and Prosser. Justice Prosser filed his own separate dissent.

OWI - Implied Consent - Constructive Refusal -
No Duty to Advise Defendant That Right to Counsel
Is Inapplicable in the Implied Consent Context

State v. Reitter, No. 98-0915 (filed 29 June 1999)

After the defendant was arrested for OWI, he was transported to the patrol station for administration of an IntoxilyzerTM test. The officer read to him the standard "Informing the Accused" form, which outlines the implied consent obligation to take a chemical test and specifies the penalty if the driver refuses to submit to testing. The defendant reacted to the reading of the form by stating repeatedly that he wished to call his attorney. The officer did not respond directly to this request but instead explained that under the implied consent law, the defendant had agreed to submit to the test and that a refusal would result in the revocation of his driving privilege. In five exchanges the defendant repeatedly insisted upon the right to counsel and the officer repeatedly warned him about the nature of the implied consent law and the consequences of refusal. Although the record does not indicate whether the defendant communicated a verbal refusal to submit to the test, he became uncooperative and grew belligerent. Ultimately the officer determined that the repeated requests for counsel would be deemed a refusal and initiated an implied consent case against the defendant. The circuit court ruled that because the right to counsel does not apply in the implied consent setting, the defendant unlawfully refused to submit to a chemical test.

The issue before the supreme court was whether a police officer is required to advise a custodial defendant, charged with operating a motor vehicle while intoxicated, that the right to counsel does not apply to the administration of a chemical test under the Wisconsin implied consent statute. A related question, whether the due process clause of the Wisconsin Constitution imposes an affirmative duty upon police officers to advise defendants that the right to counsel does not attach to the implied consent statute, was also raised by the defendant.

In a unanimous decision authored by Justice Prosser, the supreme court held that officers are under no affirmative duty to advise defendants that the right to counsel does not apply in the implied consent setting. The court further held that because the implied consent statute operates independently from the general statute reflecting the Sixth Amendment right to counsel (see Wis. Stat. § 946.75), no tension between the two statutes caused a violation of the defendant's due process rights.

In its opinion the court declined to impose duties beyond those created by the Legislature with regard to advising those under arrest for OWI about the implied consent law. However, the court indicated a preference that "every officer respond to defendants in a manner that is both direct and polite. Good practice should lead professional, courteous officers to advise insistent defendants that the right to counsel does not apply to chemical tests. Where a driver repeatedly asks to speak with an attorney, it would be courteous and simple for the officer to correct the accused's mistaken assumptions. ... We see no harm in allowing the officer to state briefly that the right to counsel does not attach to the implied consent setting."

In footnote the court observed that the record was unclear as to whether the defendant had been advised of his Miranda rights prior to the repeated requests for counsel described above. The court indicated that it was not deciding whether this case would have come out differently had the defendant been given those warnings. This footnote was attached to text in which the court discussed the fact that a minority of jurisdictions apply a "confusion doctrine" to situations in which the defendant might be misled by the interplay between Miranda rights (which include the right to counsel) and the lack of right to counsel under the implied consent law. In this case the defendant did not rely on a confusion theory and, said the court, even if it were to extend the "confusion doctrine" to Wisconsin, this would not be the case in which to do so.

Public Employee Personnel Records -
De Novo Judicial Review of Decision to Release Records

Milwaukee Teachers' Ass'n v. Milwaukee Board of Sch. Directors, No. 97-0308 (filed 8 July 1999)

In Woznicki v. Erickson, 202 Wis. 2d 178, 549 N.W.2d 699 (1996), the supreme court held that the personnel records of public employees are subject to the open records law. The case involved records in the custody of the district attorney. The court also held that the district attorney cannot release the records of one whose interests in privacy and reputation would be impacted by that release without first notifying that individual and allowing him or her a reasonable amount of time to appeal the decision to the circuit court.

The central issue in this case was whether the de novo judicial review recognized in Woznicki as being implicit in the open records law is available when the public records custodian is not the district attorney. This case involved an open records request for personnel records of school district employees that were in the custody of the school district. In a majority decision authored by Justice Crooks, the supreme court held that the de novo judicial review recognized in Woznicki applies in all cases in which a record custodian decides to disclose information implicating the privacy and/or reputational interests of an individual public employee, regardless of the identity of the record custodian.

Justice Bablitch agreed with the majority and wrote a concurring opinion for the sole purpose of addressing the dissent, which concurrence was joined by justices Steinmetz, Wilcox, and Crooks.

Chief Justice Abrahamson filed a dissenting opinion that was joined by Justice Bradley. Justice Prosser also dissented.

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