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    Vol. 79, No. 7, July 2006

    Court of Appeals Digest

    This column summarizes selected published opinions of the Wisconsin Court of Appeals. 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.

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

    * *

    Administrative Law

    Judicial Review of Agency Decisions - Dismissal of Petitions for Judicial Review

    Jackson v. Labor & Indus. Review Comm'n, 2006 WI App 97 (filed 27 April 2006) (ordered published 31 May 2006)

    The circuit court dismissed, sua sponte, Jackson's petition for review of a decision of the Labor and Industry Review Commission. The circuit court concluded that the petition did not state the nature of Jackson's interest, facts showing that he was aggrieved, and the grounds on which the agency decision should be reversed or modified. In a decision authored by Judge Vergeront, the court of appeals reversed.

    In reaching its decision to reverse, the appellate court concluded as follows: "(1) Dismissal of a petition for failure to state facts showing the petitioner is aggrieved is governed by Wis. Stat. § 227.56(3), and that provision does not permit the circuit court to sua sponte dismiss a petition without a motion from the respondent and without the petitioner having at least one opportunity to amend the petition on the terms described. (2) Dismissal for failure to state the nature of the petitioner's interest and the grounds on which the agency decision should be reversed or modified is not expressly addressed by statute but the more reasonable construction of the relevant statutes is that the circuit court does not have the authority to dismiss a petition on these grounds in the absence of a motion from the respondent and without the petitioner having a reasonable opportunity to request leave to amend the petition. (3) [The petitioner's] petition, liberally construed, adequately states the nature of his interest, facts showing he was aggrieved, and the grounds on which the agency decision should be reversed or modified, as required by § 227.53(1)(b). We therefore reverse and remand for further proceedings consistent with this opinion" (¶ 2). Top of page

    Criminal Law

    Causing Great Bodily Harm by Driving with a Detectable Amount of Controlled Substances in the Blood - Constitutionality of Wis. Stat. section 940.25(1)(am)

    State v. Gardner, 2006 WI App 92 (filed 11 April 2006) (ordered published 31 May 2006)

    The defendant was convicted of violating Wis. Stat. section 940.25(1)(am), which provides that a person commits a Class F felony if he or she "causes great bodily harm to another human being by the operation of a vehicle while the person has a detectable amount of a restricted controlled substance in his or her blood." The statute also provides that the defendant has an affirmative defense if he or she can prove by a preponderance of the evidence that the injury would have occurred even if the defendant had been exercising due care and did not have a detectable amount of a restricted controlled substance in his or her blood. The defendant raised several constitutional challenges to the statute. In a decision authored by Judge Wedemeyer, the court of appeals upheld the statute and affirmed the conviction.

    The defendant's main contention was that the statutory scheme creates "rebuttable and irrebuttable presumptions of guilt" and that the statute thereby violates his constitutional right to due process. The state responded that the statute does not create any presumptions; rather, the statute simply defines a criminal offense and an affirmative defense to that offense. The appellate court agreed with the state. In a prosecution under section 940.25(1)(am), the state must prove beyond a reasonable doubt that: 1) the defendant operated a vehicle with a detectable amount of a restricted controlled substance in his or her blood; and 2) the defendant's operation of the vehicle caused great bodily harm to the victim. Said the court, "[t]he elements of the crime do not provide the State with any presumptions so as to relieve the State of its burden to establish the two elements beyond a reasonable doubt. Likewise, the language of the statute does not direct the fact finder to presume the existence of either of the two elements that Wis. Stat. § 940.25(1)(am) creates from proof of any basic, or evidentiary fact. Rather, the statute simply defines the elements of the offense. Thus, if the State proves both elements beyond a reasonable doubt, a defendant is not presumed guilty - he or she is guilty of those elements" (¶ 12).

    The defendant also argued that the statute under which he was prosecuted is an impermissible "status offense" and thus violates the Eighth Amendment protection against cruel and unusual punishment. Rejecting this argument, the court concluded that "[t]he statutes involved here penalize conduct, not status. The statutes prohibit operation of a vehicle with a detectable amount of a restricted controlled substance in one's blood and the causing of great bodily harm as a result of that operation of a vehicle. Thus, a defendant is not being penalized simply for being a drug addict. A defendant cannot be prosecuted under Wis. Stat. § 940.25(1)(am) unless he or she actually engages in conduct - operation of a vehicle such that great bodily harm is caused to another human being" (¶ 14).

    The court also rejected the argument that it was improper for the legislature to enact the statute without requiring the state to prove a causal connection between the controlled substance in the blood and the injury. Said the court, "[w]e hold that the legislature's failure to require the State to prove a direct causal link between the presence of a restricted controlled substance and the resulting injury is not fatal to the legality of the statute" (¶ 20). "[T]he people of this state, through their legislature, have determined that the operation of a vehicle by one who has a detectable amount of a restricted controlled substance in his or her blood is a risk that will not be tolerated. Section 940.25(1)(am) represents the legislature's decision to set a zero tolerance level for driving after using illegal drugs and, as a result, imposes a penalty when someone disregards the rules of the road when his or her driving causes great bodily harm to another human being" (¶ 19).

    Lastly, the court rejected the claim that the affirmative defense described above improperly shifts the burden of proof from the state to the defendant. "[T]he affirmative defense here does not shift to [the defendant] the burden to prove that he is innocent. Rather, it requires him to prove that despite the fact that the State has satisfied the elements of the offense, [he] cannot be held legally responsible under the statute" (¶ 24).

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    Criminal Procedure

    Restitution - Government Agencies

    State v. Haase, 2006 WI App 86 (filed 27 April 2006) (ordered published 31 May 2006)

    The defendant fled in his car from sheriff's deputies who were attempting to arrest him on several outstanding warrants. During the pursuit the defendant drove into a farm field. One of the deputies followed him for approxi- mately one-half mile into the field until the terrain became very rough. The deputy then abandoned his squad car and continued his pursuit on foot. Moments later, the squad car burst into flames. The defendant later was convicted of numerous offenses arising out of this incident, and the court ordered him to pay restitution to the county in the amount of $49,336 for the loss of the squad car. The defendant appealed the restitution order. In a decision authored by Judge Dykman, the court of appeals reversed.

    Wis. Stat. section 973.20(1r) provides that "when imposing sentence or ordering probation for any crime ... the court ... shall order the defendant to make full or partial restitution ... to any victim of a crime considered at sentencing ... unless the court finds substantial reason not to do so ...." A government agency may be a "victim" for purposes of this statute under certain circumstances. State v. Howard-Hastings, 218 Wis. 2d 152, 153-54, 579 N.W.2d 290 (Ct. App. 1998).

    The appellate court identified two principles articulated in prior cases concerning the award of restitution to government agencies: "First, a government agency is entitled to restitution when it is the `direct' victim of criminal conduct. Second, a government agency is not entitled to restitution for `collateral expenses incurred in the normal course of law enforcement'" (¶ 10) (citations omitted). "Thus, an agency must be a direct victim of the criminal conduct to be reimbursed for a loss, but even when it is a direct victim, it may not recover collateral losses of normal law enforcement activities" (¶ 13).

    In this case the court of appeals concluded that the sheriff's department was not a direct victim of the defendant's criminal conduct. His criminal conduct in this case - eluding an officer - did not directly cause the loss of the department's squad car. "[T]he officers, not the department and its budget, were the direct victims of his conduct" (¶ 14). Because the court concluded that the department was not a direct victim of the defendant's criminal conduct, it did not need to decide whether the loss of the squad car was a collateral expense incurred in the normal course of law enforcement.

    Deferred Prosecution Agreements - Plea Withdrawal

    State v. Daley, 2006 WI App 81 (filed 11 April 2006) (ordered published 31 May 2006)

    The defendant was charged with recklessly endangering safety and disorderly conduct. Negotiations with the state led to a deferred prosecution agreement, according to which the defendant would plead no contest to the two charges, the case would be suspended, and entry of the judgment of conviction would be stayed. If the defendant complied with the agreement, the state would move to dismiss the charges. The circuit court approved the agreement, the defendant entered a plea, and the circuit court suspended proceedings without entering a judgment of conviction.

    The state petitioned for termination of the deferred prosecution agreement after the defendant allegedly engaged in further criminal activity contrary to the agreement's terms. The court held a hearing and determined that the defendant violated the agreement. The court revoked the agreement and then found the defendant guilty of the two original charges. Sentencing was scheduled for a later date.

    Before sentencing the defendant moved to withdraw his no contest plea. The circuit court denied the motion and proceeded to sentencing. It withheld sentence and imposed a three-year term of probation for each count, with the probation terms running concurrently. The defendant appealed, and the court of appeals affirmed. See 2005 WI App 260. The supreme court granted the defendant's petition for review, vacated the court of appeals' decision, and remanded the matter to the court of appeals for further proceedings in light of State v. Barney, 213 Wis. 2d 344, 570 N.W.2d 731 (Ct. App. 1997). See 2006 WI 25. The court of appeals, in a decision authored by Judge Hoover, once again affirmed the circuit court.

    The court first considered the defendant's challenge to the deferred prosecution agreement. The defendant implied that requiring a guilty or no contest plea as part of the agreement is not permitted by the deferred prosecution statute, Wis. Stat. section 971.37. However, said the court, "the legislature plainly contemplated that parties would negotiate appropriate conditions in a deferred prosecution agreement commensurate with the individual facts of each case. While § 971.37(1m)(b) specifies certain components that shall be in a deferred prosecution agreement, there is no indication these are to be the sole components" (¶ 9). "Contrary to [the defendant's] argument that it is bad policy to allow the State to require a plea as part of a deferred prosecution agreement, such policy is actually quite efficient. Requiring a plea allows the State to avoid trial but still allows the defendant to avoid the conviction if he or she complies with the agreement. In that sense, it provides an even greater benefit to a defendant than a traditional plea agreement, provided the defendant fulfills the agreement's terms" (¶ 13).

    The court also addressed the standard to be used to evaluate a plea withdrawal motion in a case involving a deferred prosecution agreement. The standard for evaluating a plea withdrawal motion depends on whether the motion comes before or after the defendant has been sentenced. A motion made before sentencing should be freely allowed if the defendant presents a "fair and just reason" to justify the withdrawal. If the motion is made after sentencing, the defendant "carries the heavy burden of establishing, by clear and convincing evidence, that withdrawal of the plea is necessary to correct a manifest injustice" (see ¶ 14).

    Applying the rationale of Barney, the court in this case concluded that the manifest injustice standard should be used to review the defendant's motion for plea withdrawal. Although the motion technically was made before the circuit court held the sentencing hearing and placed the defendant on probation, "prior case law compels the conclusion that `sentencing,' when a deferred prosecution agreement is involved, encompasses the initial disposition of the case after the parties enter the agreement and the agreement is ratified by the trial court" (¶ 16). (The appellate court went on to conclude that, under the facts of this case, the defendant's reasons for plea withdrawal did not meet the manifest injustice standard.)

    Evidence - Other Acts

    State v. McGowan, 2006 WI App 80 (filed 7 March 2006) (ordered published 31 May 2006)

    The defendant was convicted of multiple counts of first-degree sexual assault of a child. The charged offense involved multiple sex acts with S., his cousin, which began when S. was about age 8. The prosecution offered evidence of another act, a single incident with another cousin, J., when she was about age 5 and the defendant was about age 10. J. was age 24 when she testified at the trial. The court of appeals, in an opinion written by Judge Kessler, reversed.

    The court of appeals held that the trial court erroneously admitted the other-act evidence because the evidence failed to meet the three-part Sullivan standard. See State v. Sullivan, 216 Wis. 2d 768, 576 N.W.2d 30 (1998). The court of appeals held that although the evidence was proffered for a proper purpose, namely, intent or "background" (Sullivan's step one), the acts were so dissimilar to the charged offenses that they failed the test of relevancy (step two) and were not sufficiently probative to outweigh the substantial risk of unfair prejudice (step three). "We cannot conclude that the allegations are sufficiently factually similar to justify admission of [J.'s] testimony as other acts evidence. Assuming the truthfulness of both [S.] and [J.] for purposes of this analysis, we conclude that a single assault, by one young child [the defendant] on another young child [J.], eight years before repeated assaults by an adult on a different child [S.] who was three years older than the first victim, together with significant differences in the nature and quality of the assaults, does not tend to make the latter frequent and more complex assaults of [S.] more probable. Nor does such testimony make [S.'s] testimony about the later events more credible because of the significant differences in the details involving the earlier event and the later events. Nor does the conduct of a ten-year-old child give `context' to, or provide evidence of the motive or intent of, an adult some eight or more years later" (¶ 20).

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    Elder Law

    Medicaid - Divestment

    Estate of Hagenstein v. Wisconsin Dep't of Health & Family Servs., 2006 WI App 90 (filed 12 April 2006) (ordered published 31 May 2006)

    The circuit court upheld a decision by the Wisconsin Department of Health and Family Services (DHFS), which terminated Elisabeth Hagenstein's Medicaid benefits. The DHFS found "that Elisabeth's purchase of a life estate in part of her son's residence using the proceeds of an annuity was a sham divestment of her assets" (¶ 1). Elisabeth, then age 90, entered a nursing home in 1998. Her son Rudy, who held her power of attorney, used proceeds from the sale of her home to set up a "private balloon payment annuity." The balloon payment was due on June 1, 2003. When Elisabeth received the $40,000 payment on that date, "she purchased a life estate in 66% interest of Rudy's residence" (¶ 5). The county later terminated Elisabeth's Medicaid benefits. An administrative law judge (ALJ) agreed that the divestment was "improper" and upheld the county's decision. The circuit court affirmed.

    The court of appeals, in an opinion written by Judge Nettesheim, affirmed. First, the court rejected the estate's claim that Elisabeth was denied procedural due process when a notice dated May 21 advised that her benefits would be terminated but a later notice in June asserted that she was still eligible. The linchpin was that Elisabeth never challenged the May 21 notice. "Elisabeth did not request a fair hearing or otherwise appeal the May 21 notice of the benefit termination. Accordingly, her benefits terminated effective June 1 as the notice had advised her they would. The June 16 notice may have caused confusion but was irrelevant to Elisabeth's due process claim of lack of notice, since the May 21 notice of benefit termination was timely given and apprised her of her opportunity to be heard. Furthermore, once Elisabeth did request a hearing, she was afforded a full hearing on the substantive issue of her eligibility. We see no due process violation" (¶ 18).

    The court also affirmed the finding that the life estate constituted an improper divestment. The "essential inquiry" came down to whether "Elisabeth disposed of her annuity proceeds in exchange for fair market value" (¶ 25). "The informal findings in the text of the ALJ's decision and the record support the ALJ's conclusion that the life estate transaction was a sham transaction by which Elisabeth divested herself of her annuity balloon payment. Elisabeth had entered the nursing home facility as `permanent to the nursing home.' At the time of the life estate transaction Elisabeth had been in a nursing home for five years with no realistic expectation of release. As such, Elisabeth could not use the life estate at the time of her purchase, and she had no reasonable future expectation of being able to do so. If Rudy should sell the property, Elisabeth's life estate would be extinguished. Thus, the ALJ reasonably concluded that the life estate represented nothing of significant monetary value to Elisabeth. The ALJ also noted the oddity of a 66% interest in a life estate, questioning `how in practice it works to obtain an interest in just 66% of a property.' The ALJ also noted that the balloon annuity payment and the 66% life estate were virtually identical. These findings are supported by substantial evidence, and we share the concerns they raise. A tenant for life is entitled to the full use and enjoyment of the property in which he or she has a life estate. Yet Elisabeth purchased the life estate years after being institutionalized and without any realistic hope of ever exercising any use or enjoyment of it. As a practical matter, she could not sell her 66% interest in the home Rudy and his wife occupied, and her interest in it would cease upon their sale of it. Thus, the characterization of the conveyance as an arm's-length transaction is dubious" (¶¶ 29-30).

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    Family Law

    Termination of Parental Rights Proceedings - Self-representation - Competency

    Dane County Dep't of Human Servs. v. Susan P.S., 2006 WI App 100 (filed 26 April 2006) (ordered published 31 May 2006)

    A circuit court terminated the parental rights of a mother to her four children. In an opinion authored by Judge Lundsten, the court of appeals affirmed.

    Susan contended that the court violated her right to self-representation when, on the second day of the termination of parental rights (TPR) jury trial, the judge "rescinded" Susan's self-representation and ordered standby counsel to represent her. The court of appeals held "that the applicable self-representation competency standards are those developed in a line of criminal cases beginning with Pickens v. State, 96 Wis. 2d 549, 568-70, 292 N.W.2d 601 (1980), overruled in part, but affirmed as to the standard of competency, State v. Klessig, 211 Wis. 2d 194, 206, 564 N.W.2d 716 (1997)" (¶ 2). The interests at stake for the "affected parties are strikingly similar in both criminal and TPR actions" (¶ 14). Moreover, the Wisconsin Supreme Court "has already extended the Pickens standard for waiver of counsel and self-representation competency to at least one non-criminal action" (namely, a chapter 51 involuntary commitment proceeding) (¶ 15).

    In assessing whether a person can provide himself or herself with "meaningful" representation a court should consider a range of nonexclusive factors, including "education, ... fluency in English, the ability to communicate effectively, the complexity of the case, the ability to put the other side to its burden of proof, ... physical disabilities, psychological disabilities, ... and the opinion of medical and psychological experts regarding self-representation competency if the opinions identify relevant and specific problems" (¶ 19).

    In a detailed review of the record, the court of appeals found no abuse of discretion in the trial court's decision to rescind Susan's self-representation. The court also rejected Susan's arguments that the trial judge had abused her discretion in certain specific respects (for example, by considering Susan's demeanor and tone of voice and her lack of legal skills).

    Susan also unsuccessfully contended that her right to self-representation, while still in effect, was denied at a motion hearing, which was commenced before she arrived. The court of appeals closely considered the record of the hearing, noting that Susan arrived late and alleged no harm or prejudice. Nor did the trial judge make any decision in her absence (see ¶¶ 55-62). Finally, the court of appeals held that the record demonstrated no loss of the court's "competency" when the trial judge granted a continuance past the statutory time limit, as provided by Wis. Stat. section 48.315(2) (see ¶¶ 63-75).

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    Illusory Coverage - "Do Your Best"

    Continental W. Ins. Co. v. Paul Reid LLP, 2006 WI App 89 (filed 11 April 2006) (ordered published 31 May 2006)

    A home owned by Paul Reid LLP (Reid) was damaged when a propane fuel tank ran empty, the pipes froze, and water damaged the structure. The insurance policy stated that unless "you do your best" to maintain heat in the structure or drain the pipes, coverage for water damage would be excluded. The insurer began this declaratory judgment action, and a jury found that Reid had not done its best under the circumstances to maintain heat.

    The court of appeals, in an opinion written by Judge Peterson, affirmed. First, the "do your best" language did not render the coverage illusory. "Paul Reid's argument does not demonstrate the language can be reasonably interpreted to mean different things; its argument merely demonstrates that the language will lead to different conclusions when applied to different factual scenarios. The do-your-best language contained in the Continental policy is no more ambiguous than other terms used in insurance policies, such as `negligence' or `diligent.' Actions taken by an insured may constitute negligence in one instance, but the same actions may not be negligent when made under different circumstances. Such differing applications do not render the term `negligence' ambiguous, nor does a range of possible results render the do-your-best standard ambiguous" (¶ 12). That the insurer could have used different wording did not render the language fatally ambiguous (see ¶13).

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    Medical Malpractice - Contributory Negligence - Caps - Future Medical Expenses

    Zak v. Zifferblatt, 2006 WI App 79 (filed 11 April 2006) (ordered published 31 May 2006)

    Zak burned his arm and sought medical attention at a hospital. Doctors examined Zak and later discharged him. At about 9:30 p.m., the hospital called Zak and told him that his blood test results were abnormal and he should return to the hospital. Zak was admitted about midnight. He was treated for a life-threatening infection that destroyed his bladder and necessitated surgery. Zak sued, alleging that he had been negligently discharged. A jury found in his favor.

    The court of appeals, in a decision authored by Chief Judge Cane, affirmed in part and reversed in part. First, the court of appeals held that the trial judge properly refused to give a contributory negligence instruction predicated on Zak's alleged failure to return sooner to the hospital. "We reject the healthcare providers' argument because no expert evidence was presented that any delay in Zak's return to the hospital contributed to his injury. The healthcare providers note that there was expert testimony that `hours are very crucial' when treating severe sepsis. However, the healthcare providers fail to acknowledge that this statement was in the context of the initial discharge. No expert evidence was presented that, had medical treatment been administered after his initial discharge, Zak's injuries would have been affected. Contributory negligence requires that Zak's conduct must be a `legally contributing cause' of his harm. Here, the healthcare providers failed to present expert evidence that there was a causal nexus between Zak's actions and his injuries" (¶ 11). Second, the model jury instruction on causation, Wis. J.I. - Civil 1023 (2004), was a correct statement of law (see ¶ 15).

    Turning to the cross-appeal, the court agreed with the plaintiff that under Ferdon ex rel. Petrucelli v. Wisconsin Patients Compensation Fund, 2005 WI 125, 284 Wis. 2d 573, 701 N.W.2d 440, the damage cap was unlawful and that he was entitled to reinstatement of the full damage award (see ¶ 17). Zak also attacked the legality of provisions in Wis. Stat. section 655.015 that require that payment for future medical expenses be deposited in a fund-controlled account. Relying again on Ferdon, in which the plaintiff had failed to follow proper procedures for raising such claims, the court remanded "the question to the circuit court for the parties to comply with § 227.40 and to address the validity of the administrative rule and the constitutionality of the statute and the rule" (¶ 21).

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