Vol. 74, No. 12, December 2001

Court of Appeals Digest

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

Civil Procedure Contracts Criminal Law Criminal Procedure

Insurance Sexually Violent Persons Torts Worker's Compensation

Civil Procedure

Sanctions - Failure to Settle

Gray v. Eggert, 2001 WI App 246 (filed 5 Sept. 2001) (ordered published 31 Oct. 2001)

Gray sued the defendant bus company for injuries she sustained when she was hit by a bus. Lost wages and medical expenses were estimated at less than $2,000, yet the bus company refused to pay them because it alleged that Gray was negligent. The trial court ordered both parties to mediate the dispute. At mediation, the bus company made a "zero" offer, which it later increased to $100 at a pretrial conference. Exasperated, the circuit court judge found that the bus company had not acted in "good faith," contrary to the scheduling order, and entered judgment in favor of the plaintiff for $5,000 as a sanction.

The court of appeals, in an opinion written by Judge Schudson, reversed. Clearly the trial court has the discretionary authority to sanction violations of its orders. Wis. Stat. § 805.03. Moreover, Wis. Stat. section 802.12 authorizes the court, as part of its scheduling order, to compel attempts to mediate and settle. Nonetheless, not all cases will settle and parties cannot be compelled to abandon tenable defenses or claims. No factual basis existed for determining whether either party mediated in "good faith" and the record disclosed that the judge misunderstood the nature of mediation. In short, the trial judge violated the "restraint" recognized in case law that permits judges to "suggest" settlement parameters but forbids them from becoming "too persistent" or forcing a resolution (¶16). Finally, a sanction that takes the form of striking pleadings and entering judgment for the opposing party is justified only by "egregious" misconduct.

Contracts

Employment Contracts - Damages for Breach - Consequential Damages

Kramer v. Board of Educ. of the School Dist. of the Menomonie Area, 2001 WI App 244 (filed 25 Sept. 2001) (ordered published 31 Oct. 2001)

The plaintiff had an employment contract with the School District of the Menomonie Area for a two-year term beginning July 1, 1997, and ending June 30, 1999. Before the end of the contract period, his position was eliminated and he was terminated. His last day of work was Oct. 17, 1997.

The plaintiff was unemployed from Oct. 17, 1997, until Jan. 5, 1998, when he secured new employment with the Rhinelander School District. He remained in Rhinelander until June 30, 1998, and since July 1, 1998, has worked for the Eau Claire School District. During the two-year period covered by the plaintiff's contract with the Menomonie district, he received more than $137,000 in wages, benefits, and unemployment compensation, which was $46,000 more than he would have received if he had remained in Menomonie.

The plaintiff sued the Menomonie district, alleging breach of his employment contract. He sought damages including lost wages for his period of unemployment between Oct. 17, 1997, and Jan. 5, 1998, as well as various consequential damages. Trial was held only on the issue of damages. Before the trial, the court concluded that because the plaintiff's actual wages during the two-year contract period exceeded those he would have earned had he remained with the Menomonie district, he was barred from recovering lost wages when he was between jobs in late 1997 and early 1998. A jury did award $16,000 in consequential damages (including lost Army Reserve wages and other incidental losses and expenses). However, because the jury's $16,000 damage award, when combined with the income the plaintiff would have received had he continued with the Menomonie district, did not exceed his actual income during the two-year contract period, on post-trial motions the court concluded that the plaintiff was not entitled to any damages.

In a decision authored by Chief Judge Cane, the court of appeals affirmed. With regard to the plaintiff's claim for wages and benefits during his brief period of unemployment, the court concluded that the plaintiff was entitled to the salary he would have received during the unexpired term of the contract plus the expenses of securing other employment, reduced by the income that he earned during the unexpired term. As indicated above, the latter exceeded his claim for lost wages and benefits. Therefore, the trial court correctly concluded that the plaintiff was not entitled to damages for lost wages and benefits.

The other issue before the court of appeals involved the consequential damages. The question was whether the consequential and incidental damages should be reduced by the plaintiff's other income, benefits, and unemployment compensation during the contract period. The court concluded that those damages must be reduced to the extent the plaintiff mitigated his damages by earning other income during the contract period. Because it was undisputed that the $16,000 damage award, combined with the income the plaintiff would have received had he continued with the Menomonie district, did not exceed his actual income during the two-year contract period, the plaintiff was not entitled to any damages.

Criminal Law

Escape from Custody - Escape from Probation and Parole Agent

State v. Zimmerman, 2001 WI App 238 (filed 26 Sept. 2001) (ordered published 31 Oct. 2001)

Probation and parole agents of the Wisconsin Department of Corrections were transporting the defendant to jail after having taken her into custody for a violation of the terms of her probation or parole. [It was unclear in this case whether the defendant was on probation or parole when she was taken into custody. However, for purposes of this appeal, the appellate court concluded that it is irrelevant whether she was a parolee or probationer when she escaped because such persons are treated the same under the escape statute and applicable administrative code provisions.] During the transport, the defendant informed the agents that she felt ill and, when they stopped the vehicle to let her out, she fled. The officers eventually located her at her residence and took her into custody.

The defendant was charged with felony escape contrary to Wis. Stat. section 946.42. To be guilty of escape, the defendant must have been in custody. The relevant language of the escape statute defines custody to include, without limitation, "actual custody of an institution ... or of a peace officer or institution guard and constructive custody of prisoners ... temporarily outside the institution." Wis. Stat. § 946.42(1)(a). The statute also contains an exception: "It [custody] does not include the custody of a probationer [or] parolee ... unless the person is in actual custody."

Applying these definitions, the court of appeals concluded that the escape statute unambiguously excludes from the definition of "actual custody" the physical custody of probation and parole officers. Because the defendant was in the hands of probation and parole agents when she fled, she was not chargeable with felony escape.

The language of the escape statute clearly articulates the categories of custodians whose control over parolees and probationers constitutes actual custody: an institution, peace officer, or guard. None of these categories includes probation and parole agents.

Criminal Procedure

Jury Trial - Convictions on Both Greater and Lesser-included Offenses

State v. Hughes, 2001 WI App 239 (filed 11 Sept. 2001) (ordered published 31 Oct. 2001)

The defendant was charged with possession of cocaine with intent to deliver within 1,000 feet of a school. At his jury trial, three verdicts were submitted to the jury: a guilty verdict on the charged offense, a guilty verdict on the lesser-included offense of simple possession of cocaine, and a not guilty verdict. The jury was instructed that it was not to find the defendant guilty of more than one offense.

The jury returned verdicts finding the defendant guilty of both the charged offense and the lesser-included offense. The trial court polled the jury and each juror affirmed that the verdicts were the verdicts to which he or she agreed. The trial court then entered judgment convicting the defendant of the greater charged offense.

The court of appeals, in a decision authored by Judge Fine, affirmed. According to the appellate court, whether the defendant is entitled to either a new trial or entry of a judgment on the verdict finding him guilty of the lesser-included offense of simple possession of cocaine is an issue of first impression in Wisconsin. The court noted that this issue has arisen in other jurisdictions and no court has held that a trial court violates a defendant's rights by entering a judgment of conviction on a verdict finding the defendant guilty on the greater charge when the jury also finds the defendant guilty of the lesser-included offense.

The court found that the jury's unanimous findings that the defendant possessed cocaine with the intent to deliver it and that he also possessed that cocaine were not inconsistent. The "guilty" verdict on the lesser-included offense, which affirmed that the defendant possessed cocaine, was mere surplusage in that the jury also found that the defendant possessed that cocaine with the intent to deliver it.

The court also observed that it might have been a better practice for the trial court in this case to have asked the jury to continue its deliberations and then return only one of the three verdicts that had been submitted to it. Nevertheless, the trial court did not deprive the defendant of any of his rights in proceeding as described above.

Warrantless Search of Dwellings - Exigent Circumstances to Prevent Destruction of Evidence

State v. Garrett, 2001 WI App 240 (filed 5 Sept. 2001) (ordered published 31 Oct. 2001)

Two individuals were arrested for selling narcotics to an undercover police officer in the defendant's apartment building. Minutes later a detective observed the defendant open the front door of his apartment while holding a baggie of what appeared to be cocaine (the same kind of narcotic involved in the two arrests described above). The detective approached the defendant's doorway, but the defendant quickly slammed the door shut. Moments later, one of the arresting officers reported to the detective that one of the arrested subjects said that they bought the cocaine from a person fitting the defendant's description at the defendant's apartment.

A warrantless entry of the defendant's apartment was then made and the defendant was apprehended. Inside, various weapons were recovered. The defendant was charged with being a felon in possession of a firearm.

Among the issues on appeal was the lawfulness of the warrantless entry into the defendant's apartment. In a decision authored by Judge Curley, the court concluded that the entry was indeed lawful. An exception to the warrant requirement arises when the state can demonstrate both probable cause and exigent circumstances that overcome an individual's right to be free from government interference. In this case, there was no dispute that probable cause to search existed.

With regard to exigent circumstances, one such circumstance justifying warrantless entry is a risk that evidence will be destroyed. Based on the information the officers had received regarding the drug transaction in the defendant's apartment minutes before, combined with the defendant's own activities of casually opening his apartment door holding a bag of cocaine, slamming the door shut after seeing the detective, and then failing to answer the door, the court concluded that it was reasonable to believe that the defendant identified the detective as a police officer, which created a strong incentive for him to destroy evidence. Accordingly, the court was satisfied that the warrantless entry of the defendant's apartment was justified by exigent circumstances.

Sentence Modification - "New Factor" - Erroneous Information Relied Upon by Sentencing Judge

State v. Norton, 2001 WI App 245 (filed 11 Sept. 2001) (ordered published 31 Oct. 2001)

The defendant was convicted of felony theft from a person in connection with a purse snatching. At the time of this offense, he was serving two years' probation for a misdemeanor theft conviction. The probation included a nine-month period of incarceration, which had been stayed.

In the pre-sentence investigation report in the current purse snatching case, the defendant's probation agent advised the court that the defendant's probation in the misdemeanor theft case would not be revoked. The trial court then sentenced the defendant to 42 months in prison, "consecutive to any other sentence."

Six weeks after sentencing in the felony case, the probation officer contacted the defendant and suggested that he voluntarily agree to submit to the revocation of his probation in the misdemeanor case, telling him that the nine-month stayed sentence could be served concurrently with the 42-month sentence on the felony. Based on these representations, the defendant agreed to a voluntary revocation of his probation. However, because of the trial court's "consecutive to any other sentence" language in the felony case, the nine-month stayed sentence on the misdemeanor could not be served concurrently, and the defendant thus faced 51 months in prison.

The defendant filed a post-conviction motion in the felony case, alleging that the revocation of his misdemeanor probation and the extension of his sentence constituted a new factor warranting sentence modification. The trial court denied the motion.

In a decision authored by Judge Wedemeyer, the court of appeals reversed. Erroneous or inaccurate information used at sentencing may constitute a "new factor" warranting resentencing if it was highly relevant to the imposed sentence and was relied upon by the trial court. Although the court of appeals agreed with the state that, in general, revocation of probation in another case does not ordinarily present a new factor, the specific facts involved in this case require an exception to the general rule. "It is clear from the sentencing transcript that everyone understood that [the defendant's] probation [in the misdemeanor case] would not be revoked at the time of sentencing, or subsequent to sentencing, as a result of the felony theft" ( ¶10).

The appellate court concluded that the circumstances of this case as described above do constitute a new factor and that resentencing is required because the inaccurate information relied on by the trial court frustrated the purpose of the felony sentence. The court imposed the sentence that it did with the understanding that the stayed misdemeanor sentence would not have any impact on the sentence imposed in the felony case. The trial court did not know at the time of sentencing in the felony case that the defendant's probation would be revoked. Rather, the court was advised by the probation agent that probation was not going to be revoked. Thus, the trial court imposed a sentence in the felony case that was based on inaccurate information.

The defendant has a right to be sentenced on accurate information. Accordingly, the court reversed and remanded the felony conviction for resentencing to permit the trial court an opportunity to review the sentence with the benefit of the new information, that is, that the defendant must serve the nine-month sentence on the misdemeanor theft.

Discovery - Confidential Records

State v. Navarro, 2001 WI App 225 (filed 27 Sept. 2001) (ordered published 31 Oct. 2001)

The defendant, a prison inmate, was charged with battery by a prisoner for assaulting a corrections officer. The defendant moved the court for an in camera inspection of the officer's confidential employment records for evidence that he had abused other inmates. The trial court denied the motion.

The court of appeals, in an opinion written by Judge Deininger, reversed on the ground that the judge had "prematurely" denied the request without giving the defendant an opportunity to establish the records' materiality. First, nothing in the "Shiffra" line of cases limits the doctrine to mental health records. Second, such requests cannot be denied simply because the records are not in the prosecutor's possession (¶9). Third, the "Shiffra materiality inquiry" is not limited by Wis. Stat. section 971.23(1).

In this case, the defense alleged it needed the information to establish a claim of self-defense, a defense that rests in part upon the defendant's state of mind at the time of the act. Thus, his "fear" of the victim based on the officer's reputation for past violent acts is relevant. On this record, the defendant made a showing "sufficient to permit him to make the requisite showing of materiality at an evidentiary hearing," an issue distinct from whether the showing was sufficient to compel an in camera inspection (¶15). The court of appeals further instructed the defendant to provide more detail about the specific information and records he seeks.

Jurors - Discovery Violations - Other Act Evidence - Demonstrative Evidence - Sentencing

State v. Gribble, 2001 WI App 227 (filed 27 Sept. 2001) (ordered published 31 Oct. 2001)

The court of appeals, in an opinion written by Judge Vergeront, affirmed in part and reversed in part the defendant's conviction for first-degree reckless homicide. The victim was the defendant's 2-year-old child, who died of severe head injuries that resulted from "shaken-baby" or "shaken-impact" syndrome. At trial the defendant denied any complicity and blamed the injuries on the child's mother. On appeal he raised a series of different issues, including several relating to sentencing that are fact intensive and therefore will not be discussed in any detail.

First, the defendant alleged that the trial judge erred by questioning prospective jurors outside his presence, and his attorney's, with respect to hardships and infirmities relating to their service. The court held that the defendant did not have a federal or state constitutional right to be present with counsel when the judge questioned prospective jurors regarding their service under Wis. Stat. section 756.03. It distinguished questions about hardships and infirmities from those relating to fundamental issues, such as fairness and impartiality. Addressing the alleged statutory violation, the court held that the court's questioning under section 756.03 is not part of the "voir dire" for which the defendant must be present, as provided by Wis. Stat. section 971.04(1)(c). Put differently, the judge or clerk acts in an administrative capacity under section 756.03. Questions about possible bias occur only after potential jurors are sworn: "We conclude that the procedure described in § 805.08(1) is the 'voir dire of the trial jury' referred to in sec. 971.04(c)" (¶18).

Second, the trial court acted properly when it excluded testimony by a defense witness because the defendant failed to provide the witness's statement as required by Wis. Stat. section 971.23(2m). Specifically, the defendant named a witness on his witness list but did not disclose his recorded statement. Section 971.23(2m) "requires that if a witness is named on a list under para. (a), any relevant written or recorded statements of that witness must be disclosed" (¶27). Defendants may choose not to disclose witnesses who may be called in rebuttal or for impeachment, but once the witness is named on the list provided by para. (a), the recorded statement must be turned over. Excluding the witness was a proper exercise of discretion because the defendant's sole reason for not making the disclosure was his disagreement with the trial court's interpretation of the statute.

Third, the trial court acted within its discretion when it admitted other act evidence in accordance with the three-step test set forth in Sullivan. There were four other acts: one was a burn to the victim's armpit and three involved separate instances of abuse to another child entrusted to the defendant's care. As for the burn incident, although the defendant denied any responsibility, there was sufficient evidence in the record from which a reasonable jury could have found to the contrary. The other three incidents also were properly admitted, in particular to demonstrate the defendant's "awareness of the type of conduct that could cause great bodily harm to an infant" (¶49).

Fourth, the trial court properly permitted a medical doctor to demonstrate with a doll the force used to cause the victim's injuries. The demonstration was consistent with the doctor's opinion that death resulted from a severe impact to the head. Although other experts opined that death resulted from "shaken-baby syndrome," this consideration affected only the weight of the in-court demonstration.

Fifth, the defendant challenged the inclusion of the cost of counseling for the "victim's" mother and his aunt in the $20,000 restitution order. Concluding that the statutory term "victim" was ambiguous in the context of this case, the court held that the meaning of "victim" in Wis. Stat. section 973.20(1r) is most reasonably interpreted using the definition in Wis. Stat. section 950.02(4)(a). Clearly the child's mother was a "family member" and thus a "victim" under this provision. The aunt did not, however, fall within the term "victim." Thus, the cost of her counseling should not have been included.

Insurance

Coverage - Jury Instructions - Resident of a Home

Muskevitsch-Otto v. Otto, 2001 WI App 242 (filed 1 Aug. 2001) (ordered published 31 Oct. 2001)

At age 2, Kyle was injured while a passenger in a car driven by his mother, who was solely negligent in the mishap. Kyle settled with his mother's insurer and then made a claim against Allstate, which insured his paternal grandmother, Linda, who was like a "second mother" to him. After Allstate denied coverage, a jury found that Kyle was not a "resident" of Linda's home and therefore, Allstate provided no coverage.

The court of appeals, in an opinion written by Judge Anderson, affirmed in an opinion that addressed the accuracy of the jury instruction that defined "Resident of a Household." In the absence of a standard civil jury instruction on this question, the trial judge gave one that was suggested in the April 2000 Wisconsin Lawyer. The jury instruction properly "focused" on Kyle's intent while instructing the jury to consider the frequency and duration of his stays at his grandmother's home. The instruction explicitly reminded the jury that Kyle was but 2 years old. Moreover, the jury could "infer" that it had to look to the "adult actors in this case who spoke for Kyle" (¶9).

Sexually Violent Persons

Issue Preclusion - Offensive Use

State v. Sorenson, 2001 WI App 251 (filed 20 Sept. 2001) (ordered published 31 Oct. 2001)

In 1985 a jury convicted Sorenson of sexually assaulting his 7-year-old daughter, L.S. During that trial, L.S. claimed that she had been assaulted by both the defendant and his brother, Donald. In 1991 Sorenson filed a motion for a new trial based on newly discovered evidence, namely, L.S.'s recantation of her trial testimony. He later withdrew the motion, however, as a part of a plea bargain that resulted in a reduced sentence and parole. Sorenson's parole was later revoked, in part because of new allegations of indecent behavior, and in 1995, he was committed under Wis. Stat. chapter 980 as a sexually violent person. The trial court refused to permit him to present evidence of L.S.'s recantation and he was committed under chapter 980.

The court of appeals, in an opinion written by Judge Lundsten, reversed and remanded so that a hearing could be held on the propriety of issue preclusion. Sorenson claimed that issue preclusion could not be used offensively in a chapter 980 trial to prohibit him from presenting evidence that he did not commit a sexually violent offense. After helpfully explaining the difference between "offensive" (preventing a defendant from relitigating an issue) and "defensive" (preventing a plaintiff from relitigating an issue) uses of issue preclusion, the court turned to chapter 980 trials, while leaving for another day whether offensive issue preclusion is ever permissible in criminal cases generally.

In effect, Sorenson argued that respondents (like him) should be permitted to relitigate their underlying sexual assault convictions. Parsing the statutes, the court concluded that the legislature never "intended to subject victims and their families to the ordeal of a second trial when the respondent has already been found guilty" (¶24).

In short, the court held that "the doctrine of issue preclusion is available for use offensively in chapter 980 trials. When a respondent was previously convicted of a sexually violent offense in a trial, issue preclusion may be used to prevent the respondent from offering evidence to show that he or she did not commit the prior offense" (28). The court of appeals remanded the case so that the circuit court could apply the standards of issue preclusion, which involve fact-intensive discretionary considerations. If the offensive use of issue preclusion was improper, Sorenson must be granted a new chapter 980 trial. If it was appropriate, however, the judgment shall be reinstated.

Judge Dykman concurred in part and dissented in part. He agreed that the judgment should be reversed but contended that the jury should weigh the victim's recantation, Sorenson's testimony (if any), and the other evidence in determining whether it was substantially probable he would reoffend in the future. Judge Dykman agreed that the state was permitted to use issue preclusion offensively in chapter 980 trials but disagreed with the majority that Sorenson's statutory construction would mark a "dramatic shift" in chapter 980 trials.

Torts

Negligence Per Se - Perverse Damage Award

Burg v. Cincinnati Casualty Ins. Co., 2001 WI App 241 (filed 11 Sept. 2001) (ordered published 31 Oct. 2001)

Burg was seriously injured when his snowmobile struck another snowmobile that was "parked" in a snowmobile lane at night with its lights out. The defendant and his friend had stopped their snowmobiles in order to discuss their route. When stopped, they switched off the snowmobiles' engines, which in turn automatically shut off their head and tail lamps. A jury found that the defendant was not negligent with respect to the snowmobile's use.

The court of appeals, in an opinion written by Judge Schudson, reversed. First, the court held that on this record the defendant was negligent per se. Although the trial judge had decried the "stupid" definition of "operating" that, he thought, precluded a finding of negligence per se, the court of appeals held that the defendant's conduct did constitute "operating" within the meaning of Wis. Stat. section 350.01(9r). The statute defines "operate" to include "the exercise of physical control over the speed or direction of a snowmobile" (¶10). The court held that this language necessarily embraces "stopping" and "restraining" its operation as well. To support this conclusion, the court looked to cases construing "operate" under OWI law. Second, the court also concluded that the jury's damage award was so perverse that a new trial on damages was warranted. The defense offered no medical evidence that challenged the permanency of the plaintiff's injuries.

Judge Curley dissented. "Operate" refers to control over the speed or direction of the vehicle, or when one physically manipulates or activates controls. The record in this case reflected that the defendant's engine had been off for five minutes. The dissent saw no logical stopping point to the majority's construction of "operate."

Lawyers - Third-party Liability - Fraud - Conspiracy

Lane v. Sharp Packaging Sys. Inc., 2001 WI App 250 (filed 26 Sept. 2001) (ordered published 31 Oct. 2001)

Lane sued his former employer, Sharp Packaging, its owners, and their personal attorney, J.N., as well as his law firm. In 1992 Lane was hired and made the chief operating officer of Sharp Packaging. In 1995 he entered into a new employment agreement that gave him a 25 percent interest in the value of the company. Lane also was on Sharp's board of directors and in 1995 he caused the company to replace J.N. as corporate counsel. J.N. had represented Sharp for 10 years. According to Lane's complaint, thereafter J.N. "secretly" provided services to Sharp and in 1998-99 engineered a "shareholder distribution" plan by which the owners, who remained J.N.'s personal clients, received nearly $4 million. Lane was terminated in early 1999, at which time he discovered that the shareholder distribution had drastically diminished the value of the company's stock and hence his 25 percent interest. In his lawsuit Lane raised the following issues: 1) fraudulent transfer, 2) breach of the employment contract, 3) breach of the stock option agreement, 4) civil conspiracy, 5) request for an accounting, and 6) declaratory and injunctive relief.

The circuit court granted J.N.'s motion to dismiss Lane's claims against him and his law firm on the ground that a party may not state a claim against another party's attorney. The court of appeals, in a decision written by Judge Nettesheim, reversed in an opinion that addresses three issues relating to an attorney's liability to third parties.

First, the court addressed "whether a lawyer can be liable to a third party nonclient for acts committed within the attorney-client relationship where the attorney does not have direct contact with the third party." As a general rule, attorneys are immunized from liability to nonclients, but case law recognizes an exception for fraudulent conduct. J.N. argued that his alleged conduct did not fall within the exception because he had no "direct contact" with Lane. The court of appeals rejected this contention, however, because no authority makes "direct contact" a condition of the fraud or collusion exception.

Second, J.N. argued that it was "legally impossible" for an attorney and client to conspire, based on the principle recognized in other cases that a corporation and its subsidiary are incapable of conspiring. The court rejected J.N.'s "single unit" theory. J.N. and his law firm were a "legal entity distinct and separate" from Sharp and the owners; thus, they had the capacity to conspire. Other allegations supported sufficient wrongdoing by the owners and J.N. to withstand the motion to dismiss.

Finally, the circuit court erred by dismissing the complaint against J.N. based on policy considerations in Badger Cab Co. v. Soule, 171 Wis. 2d 754 (Ct. App. 1992), which involved a defendant whose counterclaim joined plaintiff's counsel and alleged that counsel's prosecution of the action was an abuse of process and a civil conspiracy to the same end. Badger Cab rejected such counterclaims because they generated a conflict of interest that required a substitution of counsel and would likely have a negative effect on the attorney-client relationship and work product protection. In particular, such counterclaims invited jury confusion about the merits of the claim and the merit of bringing an action. In this case, however, such potential confusion was not an issue because the claims alleged J.N.'s "alleged fraudulent or conspiratorial conduct prior to this litigation - not from his conduct relating to the litigation itself or his representations of the Sharp defendants during that process" (¶29).

Worker's Compensation

Death Benefits - Statute of Limitations

International Paper Co. v. Labor and Industry Review Comm'n, 2001 WI App 248 (filed 25 Sept. 2001) (ordered published 31 Oct. 2001)

Lorraine Wieseler's husband died 16 years after he suffered injury from exposure to asbestos at work. The date of injury was in 1983 and the death was in 1999. In 1999 Wieseler filed a claim for death benefits under section 102.46 of the Worker's Compensation Act.

It was undisputed that Wieseler can collect death benefits. The issue is whether the employer or the Work Injury Supplemental Benefit Fund (the fund) is liable to pay the benefits. An administrative law judge concluded that because Wieseler had not filed a claim for death benefits within 12 years of her husband's injury, the fund was responsible for the payments.

The Labor and Industry Review Commission (LIRC) reversed. It concluded that the 12-year statute of limitations for death benefit claims began to run when Wieseler's husband died, rather than when he was injured. Because Wieseler filed her claim for benefits within 12 years of her husband's death, the employer was liable to make the payments.

The circuit court affirmed and the court of appeals, in a decision authored by Chief Judge Cane, affirmed as well. It concluded that LIRC's conclusions were reasonable and consistent with the general rule that statutes of limitation begin to run at the time the cause of action accrues.

In a footnote, the court observed that Wieseler will receive death benefits regardless of whether the fund or the employer pays them but that she seeks to have the fund pay, because she asserts that any benefits paid by the fund would not be reduced by settlements her husband reached with several asbestos manufacturers.