Vol. 73, No. 8, August 2000

Supreme Court Digest

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

Note: Each case summarized in the Supreme Court Digest includes its new public domain citation.

| Civil Procedure | Corporations | Criminal Law | Criminal Procedure | Debtor-creditor Law | Employment Law | Family Law | Insurance | Labor Law | Municipal Law | Torts | Zoning |

Civil Procedure

Docketing Judgments - Actions Against County Clerk for Failure to Docket at Proper Time - Statute of Limitations

South Milwaukee Savings Bank v. Barrett, 2000 WI 48 (filed 9 June 2000)

Wis. Stat. section 806.10(3) provides that a clerk of circuit court who neglects to docket a judgment "at the proper time" shall be liable in damages to an injured party. A judgment is "docketed" when the clerk places the information about the judgment in the judgment docket. This is to be distinguished from "entry" of a judgment that occurs when the judgment is filed in the office of the clerk of court.

In this case, the supreme court considered the statute of limitations for a claim brought under section 806.10(3). In a unanimous decision authored by Chief Justice Abrahamson, the court concluded that the six-year statute of limitations under section 893.93(1)(a) applies in these types of actions.

The court also considered what the statute means when it refers to a clerk of circuit court neglecting to docket a judgment "at the proper time." The court concluded that to neglect to docket a judgment "at the proper time" means to neglect to docket the judgment immediately upon entry of the judgment. This is particularly significant in a race-notice jurisdiction like Wisconsin, where prompt docketing of judgments is needed to establish the proper priority of claims.

In this case, the clerk neglected to docket a judgment at the proper time when the judgment was entered at approximately 3:30 p.m. on one day but was not docketed until 9 a.m. on the following day.

Corporations

Mergers - Valuation of Dissenters' Shares - Minority Discounts - Unfair Dealing

HMO-W Inc. v. SSM Health Care System, 2000 WI 46 (filed 7 June 2000)

Wisconsin law allows a minority shareholder to dissent from a fundamental corporate action, such as a merger, and to receive the fair value of those minority shares. See Wis. Stat. §180.1302(1). If the shareholder expresses dissatisfaction with the payment of shares offered by the corporate entity and complies with appropriate procedures, a corporation may institute a special proceeding and petition the court to make a binding determination as to the fair value of the shares.

The first issue considered by the supreme court in this decision was whether a minority discount may apply in determining the fair value of a dissenter's shares. A "minority discount" addresses the lack of control over a business entity on the theory that noncontrolling shares of stock are not worth their proportionate share of the firm's value because they lack voting power to control corporate actions. In a unanimous decision authored by Justice Bradley, the supreme court concluded that minority discounts may not be applied to determine the fair value of dissenters' shares in an appraisal proceeding. Application of a minority discount in determining the fair value of dissenters' shares frustrates the equitable purpose of protecting minority shareholders.

The court also considered whether a fair value determination of a dissenter's shares may include consideration of unfair dealing in the valuation of those shares. In this appraisal action this issue was raised as an affirmative defense; the minority shareholders did not plead breach of fiduciary duty nor did they seek damages based on such a breach. The supreme court concluded that a court determining the fair value of shares subject to appraisal must consider "all relevant factors." These factors may include evidence of unfair dealing affecting the value of a dissenter's shares.

Justice Bablitch did not participate in this decision.

Special Litigation Committees - Independence

Einhorn v. Culea, 2000 WI 65 (filed 22 June 2000)

The circuit court dismissed the derivative shareholder action brought by Einhorn, a minority shareholder and member of the board of directors of Northern Labs. The circuit court ruled that the threshold for determining whether a member of the special litigation committee is independent within the meaning of Wis. Stat. section180.0744 (1997-98) is "extremely low" and found that the special litigation committee was independent. The court of appeals affirmed the circuit court's judgment, "concluding that the circuit court's assessment of whether each member of the special litigation committee was independent was based on facts supported by the record and was not clearly erroneous."

The supreme court, in a decision written by Chief Justice Abrahamson, reversed. The issue raised in the case "was the proper interpretation and application of the standard set forth in Wis. Stat. §180.0744 of whether a member of a special litigation committee is independent." Thus, the issue on appeal was not the likelihood that the derivative action would succeed, but whether the derivative action should be dismissed on the basis of the decision of the special litigation committee. The supreme court held that both lower courts erred "in declaring that the threshold established by the legislature in §180.0744 in determining whether a member of a special litigation committee is independent is 'extremely low.'"

Addressing an issue of first impression, the court also held that "in deciding whether members of the special litigation committee are independent, the circuit court should determine whether, considering the totality of the circumstances, a reasonable person in the position of the member of the special litigation committee can base his or her decision on the merits of the issue rather than on extraneous considerations or influences. In other words, the test is whether a member of the committee has a relationship with an individual defendant or the corporation that would reasonably be expected to affect the member's judgment with respect to the litigation at issue." The case was remanded for further proceedings not inconsistent with the court's opinion.

Criminal Law

Exposing Minors to Harmful Materials Over the Internet - Constitutionality of Wis. Stat. section 948.11(2)

State v. Weidner, 2000 WI 52 (filed 16 June 2000)

Wis. Stat. section 948.11(2)(a) provides that "whoever, with knowledge of the nature of the material, sells, rents, exhibits, transfers or loans to a child any harmful material [including representations of sexually explicit conduct], with or without monetary consideration, is guilty of a Class E felony." The statute does not require the state to prove that the defendant knew the age of the person receiving the harmful material. Rather, it codifies an affirmative defense that places upon the defendant the burden of proving that the defendant had reasonable cause to believe that the child had attained the age of 18 years and the child exhibited to the defendant a draft card, driver's license, birth certificate, or other official or apparently official document purporting to establish that the child had attained the age of 18 years.

In this case, the defendant used Internet technology to send sexually explicit pictures to a minor. Though only 16 at the time, the child who received these transmissions via a chatroom informed the defendant that she was 17. All interaction between the two occurred over the Internet and did not involve any face-to-face contact.

The defendant was charged with several counts of violating section 948.11(2). The circuit court dismissed the prosecution, reasoning that because the statute shifts to the defendant the burden of proving knowledge of the victim's age and the Internet does not provide the requisite face-to-face contact to ascertain whether the victim is a minor, the statute is unconstitutional.

In a unanimous decision authored by Justice Bradley, the supreme court concluded that because the state does not bear the burden of proving that the defendant knew the age of the minor, section 948.11(2) is unconstitutional in the context of the Internet and other situations that do not involve face-to-face contact. The statute essentially sets forth a strict liability offense that deprives an individual of the opportunity to prove lack of knowledge. Persons employing the Internet lack the means to reasonably ascertain the age of the persons with whom they are corresponding. There is an absence of both face-to-face contact and a satisfactory degree of reliability. Thus, the statute renders it virtually impossible for defendants as Internet users to meet the burden of proving the affirmative defense described above. Although the court's analysis centered exclusively on the Internet, it indicated that its holding would apply equally to mail, fax, and other situations devoid of face-to-face contact. The court further concluded that the statute could not be salvaged by judicial construction.

Videotaping Nudity - Constitutionality

State v. Stevenson, 2000 WI 71 (filed 28 June 2000)

Stevenson was convicted of two counts of making videotapes of a nude person without her consent, contrary to Wis. Stat. section 944.205(2)(a). The person depicted was Stevenson's ex-girlfriend. He made the tapes by "peeping" through her windows from various perches.

The supreme court reversed because the videotape statute was unconstitutionally overbroad. Writing for the court, Justice Bradley observed that "Stevenson's conduct of surreptitiously videotaping his former girlfriend in the nude is abhorrent and that such conduct is given no protection under the First Amendment." Yet overbreadth analysis focuses on the statute, not the defendant's conduct. The state conceded that the statute was overbroad on its face because it "improperly prohibits all visual expression of nudity without explicit consent, including political satire and newsworthy images" (¶ 21). It even includes reproductions of famous artworks. The court was unable to construe the statute in such a way as to save its constitutionality. To save it meant adding two elements that would significantly alter the Legislature's original creation - a "rewrite."

Justice Wilcox, joined by Justice Crooks, dissented on the ground that a limiting construction was feasible.

Criminal Procedure

Six-Person Juries in Misdemeanor Cases - Unconstitutional Statute - Waiver of Objection

State v. Huebner, 2000 WI 59 (filed 20 June 2000)

Wis. Stat. section 756.096(3)(am) (1995-96) provided that a jury in misdemeanor cases shall consist of six persons. In State v. Hansford, 219 Wis. 2d 226, 580 N.W.2d 171 (1998), the supreme court held this statute unconstitutional as violating the jury trial guarantee of article I, section 7 of the Wisconsin Constitution. [Note: This statute has been repealed and reenacted in substantially the same language at Wis. Stat. section 756.06(2)(am) (1997-98).]

At the time of the defendant's trial, the Hansford appeal was pending before the supreme court. Nevertheless, the defendant did not object to the use of a six-person jury in his misdemeanor trial, and he was subsequently convicted.

The issue before the supreme court in this case was whether a defendant who did not object to the use of a six-person jury at his misdemeanor trial, as authorized by the statute cited above, may obtain a new trial in reliance on the decision in Hansford holding section 756.096(3)(am) unconstitutional. Writing for three justices of the court, Justice Wilcox concluded that the defendant is not entitled to a new trial. It is a fundamental principle of appellate review that issues must be preserved at the circuit court. Issues not preserved at that level, even alleged constitutional errors, generally will not be considered on appeal. The defendant forfeited his right to a 12-person jury when he failed to object to the use of a six-person jury at his misdemeanor trial.

The court also declined to exercise its discretionary power to reverse the defendant's conviction. The defendant did not establish that a miscarriage of justice occurred in his case or that the real controversy was not tried. [Note: An earlier claim by the defendant that he had received ineffective assistance of counsel was abandoned and, on appeal, he asserted that trial counsel's assistance was neither incompetent nor deficient.]

Justice Prosser filed a concurring opinion in which he joined in the judgment to affirm the defendant's conviction but wrote separately to argue that the statute authorizing six-person juries in misdemeanor cases is constitutional and that the Hansford decision should be overruled.

Chief Justice Abrahamson filed a dissenting opinion that was joined by Justices Bradley and Sykes.

Search and Seizure - Warrantless Entry of Home - Hot Pursuit - Exigent Circumstances - Attenuation Analysis

State v. Richter, 2000 WI 58 (filed 20 June 2000)

A sheriff's deputy responded to an early-morning dispatch of a burglary in progress at a trailer park. The victim flagged down the deputy as he arrived on the scene and told him that someone had broken into her mobile home, and that she had seen the intruder flee her trailer and enter another trailer across the street. At that second trailer the deputy observed signs of forced entry - a window screen was knocked out and lying on the ground. The deputy shined his flashlight into the open window and attracted the attention of two people who were sleeping on the floor. They opened the door and identified a third person, who was sleeping on the couch, as the owner of the trailer. The deputy entered the trailer, woke the owner, told him what had happened, and asked his permission to search the trailer for the burglary suspect. Permission was granted and, during the search, the deputy observed marijuana in plain view, which the owner admitted was his.

The owner of the second trailer was charged with several drug offenses and he moved to suppress the physical evidence and his statements, claiming they were the product of an illegal entry of his trailer. The circuit court granted the motion and the court of appeals affirmed.

In a majority opinion authored by Justice Sykes, the supreme court reversed. It concluded that the entry was justified by exigent circumstances - specifically, the deputy's "hot pursuit" of the burglary suspect and his need to protect the safety of those inside the trailer.

The exigent circumstance of "hot pursuit" is established where there is an immediate and continuous pursuit of a suspect from the scene of a crime. The warrantless entry of the defendant's trailer was justified by this exigent circumstance. The supreme court rejected the implication in the court of appeals' decision in this case that hot pursuit as a justification for a warrantless home entry requires that the officer himself personally observe the crime or the fleeing suspect. The supreme court did not believe there is such a prerequisite. The exigency of an officer's pursuit of a suspect may be just as great when the officer is told of the crime and the whereabouts of a suspect by an eyewitness just after its commission as when he observes it himself. To allow a warrantless entry when an officer personally observes a crime and pursues the suspect, but disallow it when he immediately responds to an eyewitness report and pursues the suspect would, said the court, be arbitrary.

The court also concluded that the warrantless entry was justified by the exigency of a threat to the safety of the suspect or others. The deputy reasonably believed that the intruder he was pursuing posed a threat to the safety of the occupants of the second trailer. It was the middle of the night. A stranger had just broken into the first trailer, but was discovered and therefore abandoned whatever crime he intended to commit in the first trailer, fleeing into the trailer across the street. There were obvious signs of forced entry there and it was reasonable to infer that the suspect did not belong in the second trailer. There were people sleeping inside that trailer at the time the intruder entered, creating a situation fraught with potential for physical harm if something was not done immediately to apprehend the suspect. [In hindsight, there apparently was no threat to those inside the second trailer, because the "intruder," in fact, was a resident there. But hindsight does not apply to the exigency analysis; a court only considers the circumstances known to the officer at the time entry was made.]

Accordingly, the court concluded that the warrantless entry of the defendant's trailer was justified based on the exigent circumstances of hot pursuit and threat to safety and was therefore reasonable under the Fourth Amendment.

The court also concluded that, even if the entry had been contrary to the Fourth Amendment, the defendant's consent to enter was sufficiently attenuated from the entry to purge any taint of illegality.

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

Debtor-creditor Law

Judgment Liens - Homestead Exemption

Rumage v. Gullberg, 2000 WI 53 (filed 16 June 2000)

Under Wisconsin law, a debtor can shelter up to $40,000 of homestead equity from the lien of a judgment creditor. When the debtor's homestead equity is at or below the statutory maximum, it is "fully exempt." The issue before the supreme court in this case was whether a properly docketed judgment constitutes a valid lien against fully exempt homestead property at the time the property is sold.

The judgment-creditor argued that a docketed judgment is a lien on homestead property owned by a judgment debtor; it is only the value of the homestead up to the statutory maximum of $40,000 that is exempt from a creditor's claim. He maintained that a judgment lien can be removed from the homestead's chain of title only through some judicial process such as a levy of execution or a declaratory judgment. A private sale cannot extinguish a judgment lien and the docketed judgment remains a lien on the property.

The defendants contended that if the debtor's equity in the homestead property at the time of sale is at or below the $40,000 exempted by statute, then the homestead is fully exempt and the judgment lien does not attach. As a result, a fully exempt homestead can be transferred in a private sale unencumbered by the judgment lien.

In a unanimous decision authored by Justice Bablitch, the supreme court concluded that a judgment lien is not a valid lien against fully exempt homestead property. If the debtor has less than $40,000 in equity, then the homestead is fully exempt. The debtor possesses no equity interest upon which the judgment can be a lien. As a result, there is no lien, and accordingly, a debtor-seller can give clear title to the purchaser of fully exempt homestead property.

If the debtor's equity in the homestead exceeds the amount sheltered by statute, there is surplus equity and the homestead is "partially exempt." The supreme court concluded that when a homestead is partially exempt, a docketed judgment is a lien upon the debtor's equity in excess of the amount sheltered by the statute. When the partially exempt property is sold, this defect must be corrected in order for the seller to give clear title.

Employment Law

Family Leave - Paid Sick Time - ERISA - Preemption

Aurora Medical Group v. Dept. of Workforce Development, 2000 WI 70 (filed 27 June 2000)

A nurse requested family leave to adopt a child. Her employer granted the leave but denied her additional request to substitute paid sick time for unpaid family leave on the ground that she was not ill. She was permitted to apply vacation and holiday/personal time toward the leave. The nurse filed a complaint with the Department of Workforce Development (DWD). An administrative law judge (ALJ) ordered the employer to credit the nurse with about 30 hours in vacation time that she used instead of her paid sick time. The circuit court affirmed the ALJ. The court of appeals also affirmed.

The supreme court, in a decision written by Justice Crooks, affirmed the court of appeals. The court held that the employer failed to show that section 514(a) of ERISA preempts Wisconsin's Family and Medical Leave Act's (FMLA) "substitution provision." More precisely, the employer "failed to carry its burden of overcoming the presumption against preemption." First, the employer "failed to establish that the substitution provision 'relates to' employment benefit plans under section 514(a) of ERISA." Second, it also failed to "show a clear and manifest purpose by the Congress to pre-empt the Wisconsin FMLA substitution provision." To the contrary, it appears that Congress intended to protect more generous state-granted family leave rights. Third, the employer failed "to show how ERISA preemption of state-provided family leave rights would not result in impairment of the federal FMLA in contravention of section 514(d) of ERISA." (¶ 37)

Family Law

Divorce - Property Division - Power of Courts to Construe Their Judgments

Washington v. Washington, 2000 WI 47 (filed 7 June 2000)

The husband in this divorce action is a federal employee who anticipated retirement approximately 21 years from the date of the divorce judgment. His federal pension plan was valued at $50,000 at the time of divorce. Desiring to maintain an equal property division of all property, the circuit court awarded the wife $24,000 of the pension and awarded the husband $26,000. The judgment made no mention of interest or appreciation on either party's lump-sum share of the pension or when or how payment of the federal pension was to be made. The wife will not get her share under the divorce judgment until payments are made to her ex-husband when he retires.

The parties disagree as to the correct construction of the circuit court's division of the federal pension. The husband maintains that at the time of his retirement his ex-wife would receive her specified lump-sum share of the pension and that he alone would receive any and all appreciation and interest that accumulated on both spouses' shares. The wife argues that she should receive appreciation and interest on her lump-sum share of the pension and that her ex-husband should receive appreciation and interest on his lump-sum share of the pension.

The wife filed a motion asking the circuit court to amend the divorce judgment to award her appreciation and interest on her lump-sum share of the pension. The circuit court denied the motion, believing that Wis. Stat. section 767.32(1)(a) prohibits modifying or revising the provisions of a judgment of divorce with respect to the final division of property. The court of appeals affirmed. In a unanimous decision authored by Chief Justice Abrahamson, the supreme court reversed the court of appeals.

The issue before the supreme court was whether a circuit court may construe its judgment and allocate appreciation and interest on a lump-sum share of a pension awarded to a spouse (but not payable immediately) when the final division of property in the divorce judgment is silent about any such allocation. The supreme court concluded that a circuit judge may construe the final division of property in a divorce judgment and allocate appreciation and interest on a pension when the divorce judgment is silent about the allocation of appreciation and interest on a lump-sum share awarded to a spouse but not payable immediately. The silence about appreciation and interest makes the judgment ambiguous. A circuit court's construction of the ambiguous final division of the pension under these circumstances does not violate the statute cited above. Although a circuit court may not revise or modify the final division of property, it has the power to effectuate its orders and do justice. A divorce judgment that is clear on its face is not open to construction. However, if it is ambiguous, construction is allowed.

The judgment described above was held to be ambiguous about the allocation of appreciation and interest on the pension between the date of the divorce and the distribution of the pension. Accordingly, the supreme court concluded that the circuit judge should determine the allocation on remand.

Insurance

Exclusions - Loading Operations

Mullenberg v. Kilgust Mechanical Inc., 2000 WI 66 (filed 23 June 2000)

Mullenberg drove truck for a common carrier that carried liability insurance issued by Great West. Mullenberg stopped at Kilgust Mechanical to deliver a load of pipe in 1996 and was injured when a Kilgust employee caused the pipes to roll off the truck onto Mullenberg. Mullenberg sued Kilgust and its insurer in federal court, which in turn impleaded Great West as the primary insurer. Great West argued that a policy exclusion foreclosed coverage.

The Seventh Circuit certified this case to the supreme court to resolve the following issue of state law:

"Whether Wis. Stat. section 194.41 because of its use of the term 'negligent operation' requires insurers to cover the loading activities of third-parties and, if not, whether Wis. Stat. section 194.41 incorporates the Omnibus Statute, Wis. Stat. section 632.32, so that an insurer who issues and delivers a policy outside of Wisconsin must comply with the requirements of the Omnibus Statute."

The supreme court, in a decision written by Justice Bablitch, concluded that "the word 'operation' in Wis. Stat. section 194.41(1) includes loading and unloading and an individual permissively unloading the vehicle is covered by the motor carrier's policy." For this reason, the insurer's exclusion of such coverage was invalid.

Labor Law

Wage Claims for On-duty Meal Periods - Suits Brought Under State Wage Claim Law

German v. Wisconsin Department of Transportation, 2000 WI 62 (filed 21 June 2000)

Officers of the Wisconsin State Patrol filed suit against the Department of Transportation (DOT), asserting that they were neither relieved from duty during their 30-minute lunch breaks, nor compensated for this on-duty time as required by Wis. Admin. Code section DWD 274.02(3). As a result, the officers alleged that they were entitled to compensation for these hours worked. Their suit to compel payment of wages due was filed pursuant to Wisconsin's wage claim law. See Wis. Stat. §§ 109.01 and 109.03.

The DOT moved to dismiss the suit. The circuit court denied the motion and the court of appeals affirmed the order of the circuit court. In a majority opinion, which was authored by Justice Bablitch, the supreme court affirmed the court of appeals.

The first issue before the court was whether the officers could bring a claim under section 109.03(5) seeking wages for on-duty meal periods, or whether the officers' exclusive remedy is to be found in the administrative procedures codified in section 103.005. [Wis. Stat. chapter 103 is the Hours of Work Law]. The supreme court held that section 103.005 is not the exclusive means to enforce a wage claim grounded upon the administrative code section cited above and that the right of action created by section 109.03(5) allows for claims based upon the hours and overtime regulations to be brought in circuit court without first obtaining administrative review by the Department of Workforce Development.

Secondly, the court held that the Legislature has waived the state's immunity in chapter 109 for the type of claim brought by the officers in this case.

Chief Justice Abrahamson filed a concurring opinion that was joined by Justice Sykes.

Municipal Law

Wis. Stat. Chapter 68 Certiorari Proceedings - 42 U.S.C. section 1983 Actions for Money Damages

Hanlon v. Town of Milton, 2000 WI 61 (filed 21 June 2000)

The plaintiff sought a conditional use permit from the Town of Milton to operate a gravel quarry on his agricultural property. The application was denied and the plaintiff sought certiorari review pursuant to Wis. Stat. chapter 68. The circuit court reversed, but that decision was subsequently overturned by the state court of appeals.

Thereafter, the plaintiff brought an action in federal district court under 42 U.S.C. section 1983, alleging that the defendants deprived him of his constitutional rights to due process and equal protection of the law by denying his conditional use permit application. The suit sought money damages. The town moved for summary judgment, which was granted. The plaintiff appealed to the U.S. Court of Appeals for the Seventh Circuit.

The federal appellate court certified a question of law to the Wisconsin Supreme Court. In sum, the supreme court was asked to address a narrow question of law: When a municipal administrative determination gives rise to an equal protection claim for money damages actionable under section 1983, must this equal protection claim be brought and heard in a Wis. Stat. section 68.13 certiorari proceeding brought by the litigant?

In a unanimous decision authored by Justice Bablitch, the supreme court concluded that a litigant cannot bring a claim for money damages grounded upon 42 U.S.C. section 1983 in a certiorari proceeding brought under Wis. Stat. chapter 68. The court further concluded that although the plaintiff could have joined his section 1983 claim with his chapter 68 certiorari review, he was not required to do so. Failure to join these actions does not preclude him from now bringing his section 1983 claim.

County Sheriffs - Disciplinary Procedures - Arbitration Clause in Collective Bargaining Agreements

Eau Claire County v. General Teamsters Union Local No. 662, 2000 WI 57 (filed 20 June 2000)

The circuit court enjoined the Wisconsin Employment Relations Commission from acting on a prohibited practice complaint filed by the union. The union's complaint alleged that Eau Claire County refused to arbitrate the dismissal of a deputy sheriff pursuant to the collective bargaining agreement between the county and the union. The circuit court dismissed the complaint, holding that Wis. Stat. section 59.52(8)(c) establishes the circuit court as the exclusive forum in which an aggrieved county law enforcement employee may challenge an order of a civil service commission to dismiss, demote, suspend, or suspend and demote the employee. The court of appeals reversed the circuit court and the supreme court, in a majority decision authored by Chief Justice Abrahamson, affirmed the court of appeals.

The issue before the supreme court was whether a county law enforcement employee's appeal to circuit court pursuant to the statute cited above is the employee's exclusive appeal procedure in the disciplinary context. Or may the county law enforcement employee use the grievance procedures, including arbitration, provided in the applicable collective bargaining agreement in lieu of an appeal to the circuit court?

The majority concluded that the circuit court is not the exclusive forum in which a county law enforcement employee may challenge an order of the civil service commission to dismiss, demote, suspend, or suspend and demote the employee. The court held that after a civil service commission issues such an order, the employee may either appeal to the circuit court pursuant to the statute cited above or pursue grievance procedures, including arbitration, as provided for in any applicable collective bargaining agreement. The employee may not, however, pursue both remedies.

At numerous points in the decision, the court distinguished City of Janesville v. WERC, 193 Wis. 2d. 492, 535 N.W.2d 34 (Ct. App. 1995), wherein the court of appeals held that when an irreconcilable difference exists between a statutory procedure and the arbitration provisions of a collective bargaining agreement, the statute controls. City of Janesville dealt with municipal public safety employees, whereas this case involves county law enforcement personnel.

Justice Sykes filed a dissenting opinion that was joined by Justice Prosser.

Torts

Child Sexual Abuse - Negligence - Failure to Warn

Gritzner v. Michael R., 2000 WI 68 (filed 23 June 2000)

A 10-year-old boy, Michael, sexually assaulted a 4-year-old girl, Tara. The assault occurred at Michael's home, where he lived with his mother and his mother's boyfriend, Bubner. Tara's parents sued Bubner (and others), alleging that Bubner had: 1) negligently failed to warn them of Michael's propensity to engage in inappropriate sexual behavior; and 2) negligently failed to control Michael's conduct. The circuit court dismissed both claims. The court of appeals reinstated the claim for negligent failure to control but reluctantly affirmed the dismissal of the failure to warn claim. Both parties appealed.

The supreme court affirmed in part and reversed in part. Justice Wilcox wrote the lead opinion. All members of the court agreed that the case should be remanded. Those joining the lead opinion would affirm the court of appeals on both claims. More particularly, the lead opinion concludes that public policy considerations preclude the claim for negligent failure to warn. The justices joining the lead opinion were particularly concerned that "in this case there are no just and sensible guidelines for defining liability for negligent failure to warn" (¶ 36). The lead opinion did, however, recognize the claim for negligent failure to control "only because liability for failure to control can be imposed on distinct, narrow grounds that do not raise the same public policy considerations that preclude liability for failure to warn." Such claims may be predicated on the doctrine of in loco parentis or on the theory that the adult (Bubner) voluntarily undertook Tara's protection.

Chief Justice Abrahamson concurred in an opinion that agreed with the lead opinion's "failure to control" analysis. The concurrence asserted, however, that the public policy factors should be applied first by the circuit court based on a complete evidentiary record. The concurrence was joined by Justices Bablitch, Bradley, Crooks, and Sykes. This means that the lead opinion is the court's opinion on the negligent failure to control, but that the concurrence is the opinion of the court on the negligent failure to warn.

Collateral Source Rule - Medical Assistance Payments

Ellsworth v. Schelbrock, 2000 WI 63 (filed 22 June 2000)

The defendant struck a car driven by the plaintiff, who was severely injured. The trial court found that the plaintiff had received past medical services valued at nearly $600,000. The state-sponsored Medical Assistance program (Title 19), which provides health insurance to certain needy individuals, had paid about $355,000 for past medical expenses. (By law, the health-care providers had to accept the payment schedules set by Title 19.) The trial court rejected the defendant's argument that she was limited to the actual amount of the payments. The court of appeals affirmed.

The supreme court, in a decision written by Justice Bablitch, affirmed as well. The collateral source rule provides that "the amount of damages awarded to a person injured because of another individual's tortious conduct is not reduced when the injured party receives compensation from another source, such as insurance or sick leave." The court held that the rule applies to Medical Assistance payments. The collateral source rule imposes "upon the tortfeasor full responsibility for the loss he has caused." The defendant was not entitled "to reap the benefit of [the plaintiff's] eligibility for public assistance or from the government's economic clout in the health care market place" (¶ 17). The court also rebuffed several other arguments rooted in the county's right to subrogation and several public welfare statutes.

Justice Sykes dissented, joined by Justices Wilcox and Crooks.

Settlements - Covenants not to Sue - Admissibility

Morden v. Continental AG, 2000 WI 51 (filed 16 June 2000)

The plaintiffs sustained serious injuries when their car rolled over following a tire blowout. They sued the car's manufacturer (VW), the dealer, and the tire manufacturer, Continental AG. Prior to trial, the plaintiffs settled with VW. A jury returned verdicts for the plaintiff on claims alleging both negligence and strict product liability. The trial judge approved the verdict as to the negligence finding, but the jury's defective answers to the strict liability questions precluded entry of judgment on that claim. The court of appeals reversed on the ground that there was insufficient evidence of Continental AG's negligence.

The supreme court, in a decision written by Justice Prosser, reversed the court of appeals. The case presented four issues on appeal, but the supreme court needed to address only two. First, the court held that the evidence was sufficient to sustain the judgment against Continental AG. Since this discussion is extremely fact-intensive and involves application of long-settled legal principles, it will not be addressed further.

The second issue alleged that error occurred when the trial judge excluded evidence about a settlement between the plaintiffs and VW, the car's manufacturer, about two weeks before trial. In exchange for $500,000, the plaintiffs executed a covenant not to sue VW, which the trial judge excluded. Section 904.08 generally excludes evidence of compromise or settlement except where it is relevant to show bias, particularly where it appears that a witness may have changed his or her testimony. In this case, the trial judge did not abuse his discretion by excluding the covenant not to sue. The judge found that an expert witness had not "changed" his testimony; rather, he had not been asked about certain facets of the crash. And the omissions did not amount to a "change" in testimony. In sum, Continental AG was not entitled to a new trial based on the exclusion of this evidence.

Contributory Negligence - Mental Illness

Jankee v. Clark County, 2000 WI 64 (filed 22 June 2000)

While hospitalized at a county mental health complex, Jankee severely injured himself while attempting to escape out of a window. Jankee sued the county and various contractors. The circuit court granted summary judgment to the contractors based on the government contractor immunity doctrine. The judge dismissed the claims against the county on the ground that Jankee's contributory negligence exceeded that of the county (if any). The court of appeals affirmed as to the contractors but reversed as to the county. The court held that Jankee's conduct should be assessed under a subjective standard of care because of his mental illness and the circumstances of his commitment.

The supreme court, in a decision written by Justice Prosser, reversed as to the claim against the county. (The court did not reach the plaintiff's argument that the defendant contractors could not claim immunity as government contractors.) The supreme court held that Jankee's own negligence exceeded any attributed to the defendants, including the county, as a matter of law. The majority opinion extensively discusses the standard of care applicable to mentally ill plaintiffs. It ruled that Jankee's conduct must be assessed under a reasonable person standard of care, not a subjective test, except in two relatively narrow instances addressed by prior cases and not implicated in this case. See ¶ 78.

The court stressed two points. First, Jankee's hospitalization arose because he failed to comply with his medication program, something a reasonable person would not have done. Second, Jankee's injury occurred during an escape attempt which, under the circumstances, also failed the reasonable person standard ("Jankee was a major cause of his own injuries." ¶ 89). In short, Jankee's conduct failed the reasonable person standard and did not fit within the two narrow exceptions set forth by the cases.

Chief Justice Abrahamson, joined by Justice Bradley, dissented on a variety of grounds, including the ripeness of the case for summary judgment and the policy determination that the institutionalized mentally ill should be held to a reasonable person standard.

Zoning

Equal Protection - Substantive Due Process - Procedural Due Process

Thorp v. Town of Lebanon, 2000 WI 60 (filed 21 June 2000)

The plaintiffs own approximately 255 acres in the Town of Lebanon, which is located in Dodge County. The property is a mix of open land, woods, and wetlands. Before 1994, the land was zoned with a classification of rural development. In that year, the Town of Lebanon Board of Supervisors approved a rezoning map that extensively revised the zoning classification of most of the town from a rural development classification to a general agricultural classification. The Dodge County Board of Supervisors thereafter amended its official zoning map to incorporate the town's zoning reclassifications.

The plaintiffs subsequently petitioned the town to rezone their property to its original classification. The town acquiesced, but the Dodge County Board of Supervisors declined to further amend the county zoning map, and thus the plaintiffs' entire property remained zoned in an agricultural classification.

The plaintiffs filed suit against the town and the county seeking declaratory, injunctive, and monetary relief. They claimed that the town and county zoning ordinances were invalid and violated their due process and equal protection rights.

In a majority decision authored by Justice Crooks, the supreme court first considered whether the plaintiffs complied with the notice of claims statute. The court concluded that, as to their federal constitutional claims, the plaintiffs did not have to comply with the Wisconsin notice statute. See Felder v. Casey, 487 U.S. 131 (1988). Further, upon review of the record, the court concluded that the plaintiffs did in fact comply with the notice statute.

Next, the court concluded that the plaintiffs' complaint stated a valid claim for relief under the Equal Protection Clause. The complaint had to allege facts showing that the rezoning ordinance was not rationally related to its purpose. This was satisfied by allegations that the highest and best-suited use of the plaintiffs' property is not agricultural but rather rural development, and that the new zoning map left numerous "islands" throughout the town that have not been rezoned and have been left with a rural development classification without any logical explanation. The county argued that the plaintiffs are barred from making an equal protection claim because they did not avail themselves of an adequate state law remedy, namely certiorari review under Wis. Stat. section 68.13. The court rejected this argument because the plaintiffs could not have received adequate relief by certiorari review of their equal protection violation claim. Monetary damages are not available to a plaintiff seeking relief under section 68.13. While a plaintiff may join a claim for monetary damages with a chapter 68 certiorari review, he or she is not required to do so.

The court next considered the plaintiffs' due process claims. It held that they did not state a claim for a violation of substantive due process. The Substantive Due Process Clause protects individuals against governmental actions that are arbitrary and wrong, regardless of the fairness of the procedures used to implement them. It forbids a government from exercising power without any reasonable justification in the service of a legitimate governmental objective. The court concluded that the plaintiffs' complaint did not make any allegations that the zoning ordinance was clearly arbitrary and unreasonable.

With regard to the procedural due process claim, the court concluded that the state provides the plaintiffs with an adequate post-deprivation remedy in the form of certiorari. The adequate state remedy available to the plaintiffs was to petition for certiorari review under section 68.13. Because the plaintiffs did not use the available state law remedy, they may not now claim that they were denied procedural due process.

Lastly, the court considered whether the Town of Lebanon was properly dismissed from the lawsuit below. The court of appeals found that the town could not be dismissed as to the equal protection claim because that claim related to the invalidity of the zoning ordinance itself. The supreme court agreed with the court of appeals.

Chief Justice Abrahamson filed a concurring opinion in which she joined the majority opinion except for the discussion about substantive due process. Justices Bradley and Sykes joined the concurrence.

Regulation of Game Bird Farms - DNR Authority - Municipal Immunity - Equitable Estoppel

Willow Creek Ranch v. Town of Shelby, 2000 WI 56 (filed 20 June 2000)

Willow Creek owns 115 acres of land in the Town of Shelby. The property is zoned as "exclusive agricultural." In 1993, Willow Creek contacted the town to inquire whether a zoning change would be required in order to operate a game bird farm on its property. The town chairperson allegedly informed Willow Creek that no county rezoning was needed to make the change. Shortly before opening the farm in late 1994, and after already having expended substantial sums of money, Willow Creek obtained a Department of Natural Resources (DNR) license to operate a game bird farm.

The county thereafter notified Willow Creek that because it was conducting a commercial hunting enterprise on property zoned exclusively for agricultural purposes, it needed to petition for rezoning. Although the county ultimately granted the rezoning petition, it was vetoed by the Town of Shelby. Willow Creek filed multiple lawsuits in the wake of the town's actions, seeking declaratory judgment, injunctive relief, and money damages. These lawsuits were dismissed by the circuit court on summary judgment. The court of appeals affirmed.

In a majority decision authored by Justice Bradley, the supreme court affirmed the court of appeals. The first issue considered by the court was whether DNR's exclusive right to license the operation of game bird farms precludes the town and county from regulating the zoning of such farms. The court concluded that DNR's statutory authority does not preclude the authority of the town and county to regulate the zoning of the game bird farm.

The court also concluded that the actions of the town and county were immune from suit under Wis. Stat. section 893.80(4). Willow Creek argued that the denial of rezoning was a ministerial duty for which there is no municipal immunity. The supreme court disagreed. It concluded that decisions to enforce a zoning ordinance and to veto zoning changes represent legislative acts and are therefore discretionary decisions subject to immunity protection. The immunity bars Willow Creek's suit for money damages as well as its suit for injunctive relief. There is no immunity under the statute cited above for declaratory actions; however, because the actions of the town and the county were neither illegal nor unconstitutional, declaratory relief is unavailable.

Finally, the court considered whether the town and county should be equitably estopped from asserting immunity as a defense due to the allegedly negligent misrepresentations of the town chairperson. The court concluded that although municipalities are not wholly immune from the doctrine of equitable estoppel, it is well established that erroneous acts or misrepresentations of municipal officers do not afford a basis to estop a municipality from enforcing zoning ordinances enacted pursuant to the police power.

Justice Prosser filed a dissenting opinion that was joined by Justices Bablitch and Crooks.

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