Wisconsin Lawyer
Vol. 79, No. 7, July 2006

Supreme Court Digest

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

Attorneys Civil Procedure Commercial Law Consumer Law

Criminal Law Criminal Procedure Insurance Torts

Attorneys

Yorgan v. Durkin, 2006 WI 60 (filed 2 June 2006)

Attorney Durkin's client was treated by a chiropractor, Yorgan. The client signed an agreement with Yorgan directing Durkin to pay Yorgan for the client's care and purportedly granting to Yorgan a lien against any proceeds the client might receive from a personal injury action. Durkin later settled the client's personal injury claim and distributed the proceeds without paying Yorgan. After Yorgan unsuccessfully attempted to collect his fees from the client, he sued Durkin for the money. The circuit court ruled that Durkin was responsible for the debt. The court of appeals reversed.

The supreme court, in a decision authored by Justice Bradley, affirmed. "In our view, it is significant whether the attorney has signed the agreement or otherwise accepted its terms. Here, applying basic contract principles, we determine that Attorney Durkin was not a party to the agreement and not bound by it. Dr. Yorgan had no reasonable expectation that Durkin would be bound by the agreement if he did not sign it. Likewise, Yorgan had no reasonable reliance interest in Durkin's acceptance or rejection of the agreement" (¶ 15). "In some circumstances, an attorney may agree to be contractually bound by proffering a `letter of protection.' Such letters are `a common practice by which lawyers representing personal injury plaintiffs ensure clients will receive necessary medical treatment, even if unable to pay until the case is concluded.' Use of the letter has been explained as `a document by which a lawyer notifies a medical vendor that payment will be made when the case is settled or judgment is obtained.' Here, Attorney Durkin was not bound either as a party to the agreement or by any other instrument such as a letter of protection" (¶ 21). Absent fraud or collusion by the attorney, the "general rule" is one of "attorney non-liability to third parties" (¶ 28).

The court also considered public policy. "Allowing third-party creditors such as Dr. Yorgan to hold liable an attorney with notice of client debt, absent more, may deter attorneys from accepting personal injury cases and negatively impact injured parties' access to courts. This would be particularly true, as here, when it appears that a claim is relatively small and that the claimant's financial resources are limited. Taking a broader view than Dr. Yorgan does, we must bear in mind that it is the willingness of attorneys to take these types of cases that helps ensure compensation not only for patients who are tort victims but also for health care providers who are their creditors. We see no readily discernable stopping point on attorney liability if liability is imposed for the reasons Yorgan advances. A variety of client creditors would need only send the client's attorney a copy of their agreements with the client in order to enlist the attorney as a de facto collection agent who would be required to correctly prioritize and pay client debts or risk liability. Putting attorneys in this position may compromise their duties to their clients" (¶¶ 31-32).

Finally, the court rejected the argument that Yorgan acquired an equitable lien against Durkin, on three grounds: 1) it was the client, not the lawyer, who was "unjustly enriched"; 2) permitting an equitable lien would circumvent the general rule of attorney non-liability; and 3) imposition of an equitable lien would work against the legislature's policy choice to limit statutory liens.

Justice Wilcox concurred but stated that "an exception should be made when the attorney has actual notice of a professed assignment of settlement funds between a client and a health care provider" (¶ 43).

Justice Roggensack, joined by Justice Butler, dissented. They found that the client had validly assigned Yorgan an interest in any settlement proceeds and thereby, on these facts, created an equitable lien.

Civil Procedure

Richards v. First Union Secs. Inc., 2006 WI 55 (filed 31 May 2006)

Richards sued First Union to recover investment losses allegedly caused by violations of the state's securities laws and obtained a default judgment. More than a year later, and in response to Richards' demand for payment, First Union moved to reopen the default judgment based on insufficient service of process. The circuit court denied the motion but the court of appeals reversed.

The supreme court, in an opinion written by Justice Crooks, reversed the court of appeals. First, the court addressed which party bears the burden of proof on the issue of whether personal jurisdiction was obtained through proper service. After reviewing the case law, the court held that "the burden of proof is on the person seeking to reopen and set aside or vacate the default judgment. Furthermore, we hold that the evidence necessary to set aside such a judgment is evidence sufficient to allow a court to determine that the circuit court's findings of fact were `contrary to the great weight and clear preponderance of the credible evidence'" (¶ 27).

Second, the court addressed "what it means to be a managing agent pursuant to Wis. Stat. § 801.11(5)(a), which is one way to satisfy the statutory service of process requirements" (¶ 28). The court found "helpful" a Minnesota case that described a managing agent as "some person `invested by the corporation with general powers involving the exercise of judgment and discretion' [and] `one who could reasonably be expected to apprise the corporation of the service and the pendency of the action'" (¶ 34). The record here, however, was insufficient for the supreme court to determine whether this standard had been met and so it remanded the matter to the circuit court. On remand the circuit court is also to consider whether First Union waived its right to challenge the court's personal jurisdiction.

Commercial Law

Royster-Clark Inc. v. Olsen's Mill Inc., 2006 WI 46 (filed 18 May 2006)

This case concerned a dispute over Olsen's Mill's purchase of fertilizer from Royster-Clark (Royster). In a bench trial, the circuit court concluded that the written contract had been orally modified by the parties and thus that Olsen's Mill was entitled to an offset. The court of appeals reversed because it found that these findings were an abuse of discretion.

The supreme court, in a majority decision authored by Justice Crooks, reversed the court of appeals. "Royster maintains that the [Uniform Commercial Code] UCC governs the contract, and that both the UCC statute of frauds and the contract itself require that modifications must be in writing. The nitrogen contract between Royster and Olsen's Mill expressly provides for such, stating `this contract shall be governed by and interpreted pursuant to the provisions of the Uniform Commercial Code....' The contract additionally provides that `[n]o additional or different terms shall be binding on seller unless specifically accepted by seller in writing.' See, e.g., Wis. Stat. § 402.209(2)" (¶ 15).

Conceding the UCC's application, Olsen's Mill argued that the alleged oral modification was valid under two exceptions to the statute of frauds' writing requirement: waiver and partial performance of the contract. First, the majority found that waiver had occurred. "Generally speaking, if the record supports the inference that the parties intended to modify the contract, then a waiver pursuant to § 402.209 (4) has occurred" (¶ 23). "[A]t least five factors" in the record supported the circuit court's findings, including the parties' long-standing relationship (see ¶¶ 27-36).

Second, the partial performance exception also supported the contract's oral modification. Case law establishes that "the statute of frauds does not automatically negate an oral modification and that such a modification may be enforceable in equity" (¶ 40). "Even though the parties had not fully performed the modified contract, part performance had occurred. Part performance under Wis. Stat. § 402.201(3)(c) occurs when a buyer accepts the product and the seller participates in, or expresses assent to, the change in possession and control of the product" (¶ 41). "The facts of this case fall within this part performance exception. Olsen's Mill sought a buyout of the undelivered portion of its original nitrogen contract. After discussions with Ralston [a Royster employee], Olsen's Mill retracted the request and accepted not only the balance of the product pursuant to the contract, but an additional 34.6 tons of nitrogen fertilizer. Assent by Royster is found in that it allowed Olsen's Mill to come to Royster's plant and load its trucks with the additional 34.6 tons" (¶ 44).

Chief Justice Abrahamson, joined by Justice Bradley, dissented. In their view, the court of appeals correctly determined that the circuit court's findings were clearly erroneous and that neither the waiver nor the partial performance exceptions applied. Justice Prosser also filed a dissenting opinion, in which he noted the existence of evidence that Royster had breached its contract with a "good and faithful customer" but also that the record did not support a finding of an oral modification.

Orion Flight Servs. Inc. v. Basler Flight Serv., 2006 WI 51 (filed 19 May 2006)

The narrow point at issue in this case was whether aviation fuel is a "motor vehicle fuel" under the Wisconsin Unfair Sales Act and thereby is subject to the Act's minimum markup provisions. The circuit court granted a preliminary injunction that enforced the Act. The court of appeals reversed.

The supreme court, in an opinion written by Justice Butler, affirmed the court of appeals. "[W]e conclude that `motor vehicle fuel' does not include aviation fuel, that the minimum markup provisions in Chapter 100 of the Wisconsin Statutes do not apply to aviation fuel, and that Orion cannot rely on Wis. Stat. § 100.30 for a private cause of action against Basler. We also conclude that [Wisconsin Administrative Code section ATCP 105.001(4)] does not incorporate aviation fuel in its definition of `motor vehicle fuel,' and is thus consistent with the statute" (¶ 3). The opinion contains an extensive analysis of the statute's language, history, and relationship to kindred statutes.

Consumer Law

Wisconsin Auto Title Loans Inc. v. Jones, 2006 WI 53 (filed 25 May 2006)

Wisconsin Auto Title Loans (WATL) is a corporation that provides short-term loans to consumers. On Dec. 6, 2001, Jones obtained an $800 loan from WATL. The loan agreement executed by the parties was a pre-printed standard form short-term loan agreement provided by WATL. To receive the loan, Jones had to deliver a security interest in his motor vehicle in the form of a title to WATL; purchase a $150, one-year membership in WATL's "Continental Car Club"; and pay a $4 filing fee on the motor vehicle title. The loan agreement called for a single payment of $1,197.08, due on Jan. 3, 2002, which included the original $800 loan amount, $243.08 of finance charges, and the $154 the car owner borrowed from WATL to pay the lender's fees. WATL represented in its loan agreement that the annual percentage rate for the finance charge was 300 percent.

The loan agreement also included an arbitration provision, which states that all disputes, controversies, or claims between the parties relating to the loan agreement shall be decided by binding arbitration and which carves out for the lender the right to enforce the borrower's payment obligations in the event of default by judicial or other process, including self-help repossession.

WATL commenced a replevin action to recover possession of Jones' car and Jones responded with various individual and class counterclaims. WATL did not answer the counterclaims but moved to compel Jones to arbitrate the counterclaims. The circuit court denied the motion; it held that the arbitration provision of the loan agreement was unconscionable. The court of appeals affirmed. In a majority decision authored by Chief Justice Abrahamson, the supreme court affirmed the court of appeals.

The dispositive issue before the court was whether the arbitration provision in the loan agreement between the parties is unconscionable and, therefore, unenforceable. "For a contract or a contract provision to be declared invalid as unconscionable, the contract or contract provision must be determined to be both procedurally and substantively unconscionable" (¶ 29). In this case the court held that the arbitration provision is unconscionable.

"The following factors render the arbitration provision procedurally unconscionable: Wisconsin Auto Title Loans was in the business of providing loans with automobile titles as collateral and was experienced in drafting such loan agreements; Wisconsin Auto Title Loans was in a position of substantially greater bargaining power than the borrower; the borrower was indigent and in need of cash; and the loan agreement was an adhesion contract presented to the borrower on a take-it-or-leave-it basis" (¶ 7). "The formation of the contract was a product of the parties' unequal bargaining power and did not reflect a real and voluntary meeting of the minds of the contracting parties" (¶ 57).

The court also concluded that the "broad, one-sided, unfair" provision of the loan agreement allowing WATL full access to the courts, free of arbitration, while limiting the borrower to arbitration renders the arbitration provision substantively unconscionable (see ¶ 8). "The exception to the arbitration provision is far too broad and one-sided, granting Wisconsin Auto Title Loans a choice of forum - arbitration or the circuit court - for its claims, while permitting the borrower to raise claims only before an arbitrator. The doctrine of substantive unconscionability limits the extent to which a stronger party to a contract may impose arbitration on the weaker party without accepting the arbitration forum for itself" (¶ 66). "While we appreciate that a one-sided arbitration provision may not be unconscionable under the facts of all cases, we conclude that the overly one-sidedness of the arbitration provision at issue in the instant case renders the arbitration provision substantively unconscionable" (¶ 68). The court also noted that other factors in this case compounded the substantive unconscionability (see ¶¶ 70-76).

Justice Butler joined the opinion and mandate of the majority in a separate concurring opinion that was joined by Justice Crooks. Justice Roggensack filed a dissenting opinion that was joined by Justice Wilcox.

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Criminal Law

State v. Fisher, 2006 WI 44 (filed 17 May 2006)

This case presented the question of whether the defendant can be prosecuted for carrying a concealed weapon (CCW) contrary to Wis. Stat. section 941.23 in light of the right to keep and bear arms under article I, section 25 of the Wisconsin Constitution. The defendant is a tavern owner in Black River Falls who kept a loaded gun in the center console of his vehicle. At the time of his arrest (approximately 4 p.m.), he was running personal errands. He moved to dismiss the criminal complaint, asserting that he kept the gun for security purposes because he routinely transported large amounts of cash generated by his business. The circuit court granted the motion and dismissed the case. The state appealed and the court of appeals certified the case to the supreme court, which granted certification.

In a majority decision authored by Justice Bradley, the supreme court reversed. It concluded that the CCW statute is constitutional as applied to the defendant because his interest in exercising his right to keep and bear arms for purposes of security by carrying a concealed weapon in his vehicle does not substantially outweigh the state's interest in enforcing section 941.23. (Note: This case presented an as applied challenge to the statute. In State v. Cole, 2003 WI 112, 264 Wis. 2d 520, 665 N.W.2d 328, the supreme court held that the CCW statute is a reasonable regulation on the time, place, and manner in which the right to bear arms may be exercised and is therefore constitutional on its face.)

The court concluded that Cole (which also involved an as applied challenge to the CCW statute) and State v. Hamdan, 2003 WI 113, 264 Wis. 2d 433, 665 N.W.2d 785 (a case decided at the same time as Cole and likewise dealing with an as applied challenge to the statute) must be read together to resolve the defendant's as applied challenge. These cases establish the following five principles that informed the court's analysis.

First, a test articulated in Hamdan applies whenever a defendant asserts that the CCW statute is unconstitutional as applied. Under Hamdan, defendants are required to secure affirmative answers to two questions before they can raise a constitutional defense: 1) Under the circumstances, did the defendant's interest in concealing the weapon to facilitate exercise of his or her right to keep and bear arms substantially outweigh the state's interest in enforcing the concealed weapons statute? The state generally has a significant interest in prohibiting the carrying of concealed weapons. Thus, to satisfy this element, the defendant must have been exercising the right to keep and bear arms under circumstances in which the need to do so was substantial. 2) Did the defendant conceal his or her weapon because concealment was the only reasonable means under the circumstances to exercise his or her right to bear arms? Put differently, did the defendant, under the circumstances, lack a reasonable alternative to concealment to exercise his or her constitutional right to bear arms? (see ¶ 18). (Note: If a defendant secures affirmative answers to these two questions, a third question remains: whether the state can show at trial that the defendant had an unlawful purpose at the time he or she carried the concealed weapon (see ¶ 18 n.2)).

"Second, the court in Hamdan recognized that there are two places in which a citizen's desire to exercise the right to keep and bear arms for purposes of security is at its apex: in the citizen's home or in his or her privately-owned business. Thus, it logically and necessarily follows that the individual's interest in the right to bear arms for purposes of security will not, as a general matter, be particularly strong outside those two locations" (¶ 27).

"Third, in a similar vein, under both Hamdan and Cole an individual generally has no heightened interest in his or her right to bear arms for security while in a vehicle" (¶ 28).

"Fourth, while the state's interest in prohibiting the carrying of concealed weapons may generally be at its weakest in an individual's home or privately-owned business, the state's interest will generally be strong when a concealed weapon is being carried in a vehicle" (¶ 29) (citations omitted).

"Fifth, because the individual's interest in carrying a concealed weapon in a vehicle is generally comparatively weak and the state's interest in prohibiting such weapons in vehicles is relatively strong, it is only in extraordinary circumstances that an individual asserting a constitutional defense under Hamdan will be able to secure an affirmative answer to the first question in the Hamdan test .... If a defendant reasonably believes that he or she is actually confronted with a threat of bodily harm or death and that carrying a concealed weapon is necessary for protection from the threat, extraordinary circumstances would be present. Absent such circumstances, an individual carrying a concealed weapon in a vehicle will generally be unable to demonstrate that his or her interest in the right to keep and bear arms for security substantially outweighs the state's interest in prohibiting that individual from carrying a concealed weapon in a motor vehicle" (¶ 32).

Applying these principles to the case at hand, the court concluded that the defendant failed to meet his burden to secure an affirmative answer to the question of whether his interest in concealing a weapon to facilitate the exercise of his right to keep and bear arms substantially outweighed the state's interest in enforcing section 941.23. "The facts here amount to far less than a showing that [the defendant] had any significant interest in exercising his right to keep and bear arms for security purposes by carrying a concealed weapon in his vehicle. At the time of his arrest, it was 4:00 in the afternoon in Black River Falls, and he was engaged in personal errands and on his way to McDonald's. Not only was he carrying a concealed weapon in a location that is not one of the `apex' locations identified in Hamdan, but also the other specific circumstances of his case are not particularly compelling. Although the facts presented might be taken to suggest that [the defendant] had more than an average citizen's interest in exercising his right to keep and bear arms for purposes of security, on balance his circumstances do not come close to substantially outweighing the state's strong interest in prohibiting the carrying of a concealed weapon in a motor vehicle. He could not have reasonably believed that he was actually confronted with a threat of bodily harm or death. Therefore, he also could not have reasonably believed that carrying a concealed weapon was necessary for protection from such a threat. [The defendant's] case does not present the type of extraordinary circumstances that could justify the carrying of a concealed weapon in a motor vehicle" (¶¶ 48-49).

Justice Crooks filed a dissenting opinion in which he argued that the CCW statute is unconstitutional both on its face and as applied. Justices Wilcox and Roggensack joined that part of the dissenting opinion that concluded that the CCW statute is unconstitutional as applied to the defendant.

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Criminal Procedure

State v. Hibl, 2006 WI 52 (filed 26 May 2006)

Hibl was charged with reckless driving that caused severe injuries to another driver. At issue was whether Hibl was the driver of the truck that triggered the accident. No witness identified Hibl as the driver before the trial. While the trial was underway, however, a witness saw Hibl by chance in the courthouse hallway and told police that he recognized Hibl as the driver of the truck that triggered the accident. At a hearing on this development, the circuit court suppressed the identification. The court of appeals affirmed the suppression in an opinion applying State v. Dubose, 2005 WI 126, 285 Wis. 2d 143, 699 N.W.2d 582.

The supreme court, in an opinion written by Justice Bradley, reversed. Dubose held that "identification evidence resulting from an `unnecessary' showup is suppressed as inherently too suggestive, without any separate fact-based inquiry into suggestiveness or reliability" (¶ 27). Nonetheless, Dubose does not control cases such as this, which concern "`accidental' confrontations resulting in `spontaneous' identifications" (¶ 31). Rather, identifications produced by accidental confrontations are to be evaluated by the trial judge under Wis. Stat. section 904.03. Although most often such issues will be left to the jury as credibility assessments, the trial judge's role as limited gatekeeper obligates the judge to scrutinize the reliability of such evidence (see id.).

"In exercising its gate-keeping function, the court should consider whether cross-examination or a jury instruction will fairly protect the defendant from the unreliability of the identification. The court may take a number of other factors into consideration, including those we have articulated in ¶¶38-40, if appropriate, but litigants and trial courts should not be bound to an inflexible list of factors. We urge circuit courts, with assistance from the litigants before them, to take into consideration the evolving body of law on eyewitness identification. Any tests for reliability and suggestiveness in the eyewitness identification context should accommodate this still-evolving jurisprudence, along with the developing scientific research that forms some of its underpinnings" (¶ 54).

Justice Butler concurred but wrote separately to stress his understanding that the court was not modifying State v. Marshall, 92 Wis. 2d 101, 284 N.W.2d 592 (1979) at this time. (Marshall raised the idea that even nonpolice-orchestrated identifications might violate due process (see ¶¶ 46-47)).

State v. Tiepelman, 2006 WI 66 (filed 9 June 2006)

In sentencing the defendant the circuit court relied on inaccurate information about the defendant's conviction record. The defendant filed a postconviction motion seeking resentencing, arguing that the circuit court violated his right to due process because of its use of the inaccurate information. The circuit court denied the motion. In a published decision the court of appeals affirmed. It concluded that, although the defendant had met his burden of showing the inaccuracy of the information, he failed to prove that the circuit court prejudicially relied on the inaccurate information. See 2005 WI App 179.

The issue before the supreme court was whether, on a motion for resentencing based on the circuit court's alleged reliance on inaccurate information, a defendant must prove that the circuit court actually relied on the inaccurate information, or that the court prejudicially relied on the inaccurate information. "Whether the test is actual reliance or prejudicial reliance is significant. Obviously, establishing prejudicial reliance presents a far more difficult barrier for a defendant to overcome than establishing that the circuit court actually relied on inaccurate information at sentencing" (¶ 2 n.2).

In a majority opinion authored by Justice Crooks, the supreme court reversed the court of appeals. "We hold that in a motion for resentencing based on a circuit court's alleged reliance on inaccurate information, a defendant must establish that there was information before the sentencing court that was inaccurate, and that the circuit court actually relied on the inaccurate information. Here, the court of appeals applied the wrong test - prejudicial reliance - when it affirmed the circuit court. We must, therefore, reverse that affirmance, and withdraw any language in [numerous prior decisions] to the contrary. Only after the defendant meets this burden to show that the sentencing court actually relied on inaccurate information, does the burden then shift to the state to establish that the error was harmless. Here the parties agree, as does this court, that there was inaccurate information actually relied on by the circuit court at sentencing. It seems clear that the parties also agree that the issue of harmless error was not developed to the degree necessary to assist this court in resolving that issue, and since they also agree that this matter should be remanded for resentencing, it is appropriate under such circumstances that we accept their stipulation. We, therefore, reverse the decision of the court of appeals and remand this case to the circuit court for resentencing" (¶ 31).

Justice Roggensack filed a dissenting opinion.

State v. Payano-Roman, 2006 WI 47 (filed 18 May 2006)

The defendant was the subject of a drug surveillance operation. When a deputy sheriff approached the defendant's vehicle, he observed the defendant put a clear plastic baggie containing a white powdery or chunky substance into his mouth. Based on the packaging of the substance, the deputy believed it was heroin. The defendant began swallowing large amounts of air as if to swallow the baggie. The officers told him to spit out the baggie, and they attempted to recover it but were unsuccessful. They arrested the defendant for possession of a controlled substance and had him conveyed to a hospital. Once there the investigating deputy was told by the staff that it was hospital policy to admit the defendant for his safety because it could be fatal if the bag broke. Another officer was told that the defendant was being admitted to the hospital for possible ingestion of a controlled substance that could lead to an overdose.

The defendant was eventually placed in a private hospital room, where he remained handcuffed. At least one officer stayed with him at all times. The defendant was given six doses of a liquid laxative by one of the officers after medical personnel made the determination that a laxative should be administered. Ultimately, the baggie was recovered by the officers from the defendant's stool. Its contents were tested and determined to be heroin.

The state charged the defendant with possession of heroin. The defendant subsequently filed a motion seeking to suppress the evidence, arguing that the administration of the laxative constituted an unreasonable search under the Fourth Amendment. The state argued that the Fourth Amendment did not apply because it was the private action of hospital personnel that allowed the officers to find and recover the heroin. The circuit court denied the motion. In a published decision, the court of appeals reversed. See 2005 WI App 118. In a majority decision authored by Justice Bradley, the supreme court reversed the court of appeals.

The appeal presented two issues: "(1) whether the administration of the laxative that resulted in the recovery of the baggie of heroin from [the defendant's] stool was a government search or a private search, and (2) whether, if the search was a government search, it was reasonable under the Fourth Amendment" (¶ 15).

On the matter of Fourth Amendment applicability, the court began its analysis by noting that private searches are not subject to the Fourth Amendment's protections because the Fourth Amendment applies only to government action. Three requirements must be met for a search to be a private search: "(1) the police may not initiate, encourage or participate in the private entity's search; (2) the private entity must engage in the activity to further its own ends or purpose; and (3) the private entity must not conduct the search for the purpose of assisting governmental efforts" (¶ 17 (citing State v. Rogers, 148 Wis. 2d 243, 435 N.W.2d 275 (Ct. App. 1988))). A search may be deemed a government search when it is a " joint endeavor" between private and government actors. However, the mere presence of a government official will not necessarily transform a private search into government action. "The question of whether a search is a private search or a government search is one that must be answered taking into consideration the totality of the circumstances" (¶ 21).

Applying these standards the court concluded that "[the defendant] established by a preponderance of the evidence that the search meets the test for a government search. The totality of the facts shows that the officers and medical personnel were engaged in a joint endeavor to speed the passage of the baggie of drugs through [the defendant's] system. The administration of the laxative had a dual purpose, medical treatment and the recovery of evidence of a crime. Moreover, [one of the officers] directly participated in the administration of the laxative to [the defendant]. This is not a case involving the `mere presence' of a police officer. There can be no question on this record that one purpose of the laxative procedure was medical treatment. However, when we consider all the circumstances of this case, we conclude that the medical purpose of the procedure cannot insulate the simultaneous evidence-gathering purpose from Fourth Amendment scrutiny" (¶¶ 28-29).

The court next turned to the question of whether the search violated the Fourth Amendment. After identifying a "search incident to arrest" as an applicable exception to the warrant requirement, the court proceeded to determine whether the scope and nature of the warrantless search met the reasonableness requirements of the Fourth Amendment. "[E]ven when one or more of the warrant exceptions is present, an intrusion into the body demands something more: The scope and nature of the intrusion must be reasonable" (¶ 42). In making this assessment, the court turned to Winston v. Lee, 470 U.S. 753 (1985), in which "the United States Supreme Court applied a three-factor balancing test to determine the reasonableness of a search involving a medical procedure that intruded on a criminal suspect's bodily integrity. Under that test, courts examine (1) the extent to which the procedure may threaten the safety or health of the individual and (2) the extent of the intrusion upon the individual's dignitary interests in personal privacy and bodily integrity. They then weigh these two factors against (3) the community's interest in fairly and accurately determining guilt or innocence" (¶ 37).

Applying these factors the court concluded that the balance in this case tipped in favor of the state. "Although the laxative procedure resulting in the recovery of the baggie of heroin from [the defendant's] stool was a significant intrusion on his dignitary interests, that intrusion was justified under the circumstances here. Not only does the record suggest that the procedure was medically appropriate, but also it shows that the officers had a clear indication that [the defendant's] stool would contain evidence of a crime. They were justified in seeking to preserve the evidence to facilitate the community's interest in determining guilt, which would have been more difficult in [the defendant's] case had the police not recovered the baggie of heroin. In short, balancing the Winston factors as applied to the circumstances here leads us to the conclusion that the search was reasonable. Although we conclude that the search in this case was reasonable, this is not to say that the administration of a laxative in all future cases will be reasonable. It bears repeating that we arrive at our conclusion based on the totality of circumstances presented" (¶¶ 61-62).

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

State ex rel. Coleman v. McCaughtry, 2006 WI 49 (filed 18 May 2006)

This case involved a writ of habeas corpus filed in 2004 alleging ineffective assistance of appellate counsel in 1987. In the underlying case the petitioner was convicted of numerous felonies and was sentenced to 80 years in prison. His postconviction counsel at the time allegedly told the petitioner that there was no chance of obtaining relief on appeal, and no direct appeal was ever taken. Except for some correspondence between the petitioner and postconviction counsel in 1987 in which the petitioner indicated an awareness of a potential suppression issue and a dissatisfaction with his attorney's decision not to proceed, the petitioner did nothing to pursue postconviction relief for more than 16 years.

In the present litigation the state asserted that the petitioner's claim is barred by laches. The court of appeals agreed and dismissed the petition for the writ. The court of appeals found that the petitioner unreasonably delayed bringing his claim, and the court of appeals assumed that the delay prejudiced the state. In a majority decision authored by Justice Roggensack, the supreme court reversed.

In connection with the state's assertion of a laches defense, the supreme court employed a three-element test, in which "the first element is unreasonable delay in bringing the claim and the other two elements apply to the party asserting laches: lack of knowledge (that the claim would be brought) and effect (prejudice)" (¶ 28). In this case the supreme court agreed with the court of appeals that the state had proved that the petitioner's delay was unreasonable as a matter of law (see ¶ 34). However, the supreme court found that "the court of appeals erred when it assumed the State was prejudiced by [the petitioner's] unreasonable delay, instead of requiring the State to prove a factual basis for prejudice. Therefore, we reverse the court of appeals decision that laches precludes [the petitioner's] petition for writ of habeas corpus, and we remand the matter to the court of appeals to decide how to develop a sufficient factual record" (¶ 37).

Justice Butler filed a concurring opinion that was joined by Chief Justice Abrahamson and Justice Bradley.

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Insurance

Kontowicz v. American Standard Ins. Co., 2006 WI 48 (filed 18 May 2006)

This appeal consolidated two cases in which plaintiffs sought interest payments from a tortfeasor's insurer pursuant to Wis. Stat. section 628.46. The circuit court awarded the interest payments, but the court of appeals reversed in each case. The issue before the supreme court was "whether § 628.46, which imposes a 12 percent simple interest rate for overdue payment of an insurance claim, applies to the insurance company of a negligent tortfeasor and, thus, allows the recovery of interest by a third-party claimant, such as the plaintiffs/petitioners here, injured by such tortfeasor" (¶ 1).

The supreme court, in an opinion written by Justice Crooks, reversed the court of appeals. The majority succinctly summarized its holding as follows: "We conclude that when there is clear liability, a sum certain owed, and written notice of both, the plain language of Wis. Stat. § 628.46, incorporating by reference Wis. Stat. § 646.31(2), imposes 12 percent simple interest on overdue payments to third-party claimants in such personal injury claims and actions. However, we limit our holding to only those situations in which three conditions to trigger the interest are met. First, there can be no question of liability on the part of the insured. Second, the amount of damages must be in a sum certain amount. Third, the claimant must provide written notice of both liability and the sum certain amount owed. We further hold that claims concerning the issue of interest due under § 628.46 may be bifurcated under Wis. Stat. § 805.05(2), and that in the case of [one of the plaintiffs], the award of interest should be in accord with Wis. Stat.§ 807.01(4), rather than § 628.46" (¶ 2).

The majority addressed the statute's plain language and also looked to "extrinsic sources," the effect of 1999 amendments, and public policy. The court rejected the insurers' contention that only a judgment or settlement could provide the statutorily required "knowledge of liability" and the amount of damages. "Once the insurer has had written notice of the `fact of a covered loss' and the `amount of the loss,' it must pay within 30 days, unless it has `reasonable proof' that it is not, in fact, responsible for the payment" (¶ 50).

In the case of plaintiff Kontowicz, liability and the other conditions were clear and the plaintiff was entitled to the interest on varying amounts, as determined by the dates of the written notices (see ¶ 53). As to the other plaintiff, Buyatt, a preexisting injury meant that the insurer's responsibility was in reasonable dispute, but nonetheless he was entitled to interest pursuant to Wis. Stat. section 807.01 as of the date of a settlement offer (see ¶ 54).

Justice Prosser dissented on the ground that the legislature never intended to authorize third-party liability based on the statute's history and language.

Drinkwater v. American Family Ins. Co., 2006 WI 56

Drinkwater was injured in a motor vehicle accident in Wisconsin. His medical insurance carrier, an Iowa corporation (the Plan), paid his medical expenses through his employer's health insurance plan. On certification from the court of appeals, the supreme court analyzed "whether Iowa law or Wisconsin law applies to the Plan's subrogation claim against Drinkwater." Applying choice-of-law principles, the court held that Wisconsin law governed the action and "that the Plan is not entitled to subrogation against Drinkwater's recovery because he was not made whole under Wisconsin law" (¶ 2).

Writing for the court, Justice Bradley began by reviewing "the development and status of the made-whole doctrine in Wisconsin," a doctrine so well-rooted that it "can trump express language in an insurance contract" (¶¶ 15, 23). Although the contract here expressly provided that Iowa law controlled, Wisconsin's long-standing adherence to the made-whole doctrine compelled the court to apply choice-of-law principles rather than simply adhere to the contract's language. The court conceded that the case law on conflicts of law needed to be tidied up but concluded that it must "apply the five choice-influencing factors" set forth in case law. This was necessary because it was "not `clear' whether Iowa's contacts are of `greater significance' [than Wisconsin's], yet Iowa's contacts are not `so obviously limited and minimal' that application of Iowa law would constitute officious intermeddling" (¶ 43).

On this record the court was satisfied that the five choice-influencing factors - predictability, interstate order, simplicity, attainment of the forum's interests, and application of the "better rule" - warranted application of Wisconsin's made-whole doctrine.

Justice Prosser dissented. He praised Wisconsin's made-whole doctrine but was not persuaded by the majority's reasoning. "The rule of this case is that Wisconsin law will trump Illinois or Iowa subrogation law on a Wisconsin injury to a Wisconsin resident when the case is tried in a Wisconsin court. What is not clear is what the result would be if there were a Wisconsin injury to an Illinois or Iowa resident and the case were tried in a Wisconsin court against the insured's home state insurer (like Medical Associates Health Plan) claiming subrogation rights. Because Wisconsin is visited by hundreds of thousands of out-of-state tourists, this sort of scenario must be anticipated" (¶¶ 76-77).

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Torts

Mueller v. McMillian Warner Ins. Co., 2006 WI 54 (filed 25 May 2006)

The plaintiff, a teenage girl, was injured while riding an all-terrain vehicle (ATV) driven by Switlick. Switlick's parents observed that the girl was injured, provided some care, and put her to bed. The next morning the Switlicks called for an ambulance when they noticed that the plaintiff was confused and disoriented. The plaintiff sued the Switlicks on several grounds, including their negligence in failing to summon emergency medical assistance sooner. The circuit court granted summary judgment in favor of the Switlicks on the ground that they were immune from liability under Wis. Stat. section 895.48(1). The court of appeals reversed.

The supreme court, in an opinion written by Chief Justice Abrahamson, affirmed the court of appeals. The dispositive issue was whether the Good Samaritan Statute, Wis. Stat. section 895.48(1), shielded the Switlicks from liability for their alleged negligence. For the first time the court construed the statute's requirement that the emergency care be rendered at the "scene of any emergency or accident." Here the ATV accident occurred in the "woods" but the negligent care occurred at the Switlick's home. "Taking into account the text, the statutory history, and the purpose of the Good Samaritan statute, we conclude that, whatever the precise scope of `scene of any emergency or accident,' the phrase `scene of any emergency' is sufficiently broad to include the Switlicks' home where the injured, bleeding plaintiff arrived after the ATV incident. `Scene of any emergency' is sufficiently broad to include in the present case not only the place where the incident or injury occurred but also the place to which the plaintiff was moved. As the circuit court stated, the `scene of any emergency' may follow the injured person" (¶ 32).

The court also construed the statute's second element, "emergency care." Although the phrase cannot be defined with a "bright-line rule," the court nonetheless provided a "flexible, broad working definition of emergency care" (¶ 36). "We start by defining `emergency,' which means a sudden, unexpected happening or unforeseen occurrence or condition. `Emergency medicine' means the evaluation and initial, rapid treatment of medical conditions caused by trauma or sudden illness. A working definition of `emergency care' in Wis. Stat. § 895.48(1) (as it applies to a layperson) therefore would be care rendered by a layperson in a sudden, unexpected happening, occurrence or situation that demands immediate action until professional medical attention is available. `Care' includes the evaluation, intervention, assistance, and treatment of, or intervention on behalf of the injured person, or response to medical conditions caused by an accident, trauma, or sudden illness" (¶ 37).

"Put differently, `emergency care' under the statute refers only to the initial evaluation and immediate assistance, treatment, and intervention at the scene of an emergency during the period before care can be transferred to professional medical personnel" (¶ 46). As applied to the record, the Switlicks may have provided emergency care when they were first evaluating plaintiff's condition and her need for immediate medical care but their "care" for the plaintiff in the hours that followed was not immunized by the statute.

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