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    Wisconsin Lawyer
    June 06, 2008

    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.

    Wisconsin LawyerWisconsin Lawyer
    Vol. 81, No. 6, June 2008

    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

    Licenses - Religious Beliefs - Costs

    Noesen v. Department of Regulation & Licensing, 2008 WI App 52 (filed 25 March 2008) (ordered published 30 April 2008)

    Noesen, a licensed pharmacist, refused to assist a customer who sought to refill a birth-control prescription. Noesen's refusal was based on conscientious objections on religious grounds. The customer filed a complaint, and the Pharmacy Examining Board reprimanded Noesen and placed restrictions on his license.

    The court of appeals, in an opinion written by Judge Hoover, affirmed in part and reversed in part a circuit court order that upheld the board. The court affirmed the board's determination that Noesen had violated regulations governing his license by not behaving in a "professionally competent manner." "In short, Noesen abandoned even the steps necessary to perform in a `minimally competent' manner under any standard of care. He prevented all efforts Renz [the customer] made to obtain her medication elsewhere when he refused to complete the transfer and gave her no options for obtaining her legally prescribed medication elsewhere. The Board could therefore properly conclude he violated a standard of care applicable to pharmacists: it does not matter which standard, because Noesen's behavior `substantially departs' from all of them" (¶ 20). The court held that the board also properly determined that Noesen's conduct could have harmed the customer; no actual showing of harm was required.

    The court also held that the board's action, particularly through the limitations it imposed on his license, did not violate Noesen's right of conscience. A person asserting his or her right of conscience must show that 1) he or she has a sincerely held religious belief and 2) the belief is burdened by application of the state law at issue (see ¶ 25). There was no dispute about the first part. As to the second, the board's order did not unduly burden Noesen's beliefs. "[T]he discipline imposed here only requires Noesen `to make the extent of his religious belief and objections known to his employer before the commencement of his practice at the pharmacy. This will facilitate, rather than burden, [Noesen's] ability to exercise his conscientious objection in the future'" (¶ 26). The board also properly imposed a reprimand in this case. It was not required to first issue a warning; it had the discretion to take either measure.

    The court of appeals reversed the order, however, as to the imposition of costs. It held that the board failed to exercise discretion when it imposed all costs on Noesen without considering other factors. "By concluding only that the profession should not bear the costs, the Board has created a bright line rule that fails to account for any other factors - aggravating or mitigating. Indeed, imposing costs simply to prevent them from being passed on to others is a concern that would apply to any disciplinary proceeding. While the `program revenue' nature of the Department is one factor that may fairly be considered in the cost determination, the exercise of discretion contemplates more than application of a rigid rule or invocation of an omnipresent policy" (¶ 32).

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    Criminal Procedure

    Search and Seizure - "Community Caretaker" Doctrine

    State v. Kramer, 2008 WI App 62 (filed 27 March 2008) (ordered published 30 April 2008)

    Kramer, while driving his pickup truck, pulled over to the side of a highway and activated the truck's hazard lights. A police officer noticed the truck and decided to check on it, although it was legally parked and not impeding traffic. At the time, it was 8:45 p.m. and was dark outside. The officer activated the squad car's red and blue emergency lights and pulled in behind the truck to inquire whether Kramer needed assistance. (The officer's first question was "Can I help you?".) This inquiry led to the discovery that Kramer was intoxicated and to a subsequent OWI prosecution.

    Kramer argued that he was unlawfully seized by the time the officer approached his side window and observed signs of intoxication. In a decision authored by Judge Lundsten, the court of appeals disagreed. "Assuming that a seizure occurred, we conclude that it was lawful because the officer was acting in a community caretaker capacity" (¶ 1). (The court assumed without deciding that the officer lacked reasonable suspicion or probable cause to arrest Kramer at the time the officer encountered him (see ¶ 9).)

    In State v. Anderson, 142 Wis. 2d 162, 417 N.W.2d 411 (Ct. App. 1987), the court of appeals adopted a test for determining when a seizure is justified by the community caretaker function. Under this test, the community caretaker function justifies a seizure if two requirements are met. First, the police activity must be a "bona fide community caretaker activity." Second, the public need and interest must outweigh the intrusion on the privacy of the individual. The court explained that the balancing aspect of this test requires "an objective analysis of the circumstances confronting the police officer" and "an objective assessment of the intrusion upon the privacy of the citizen" (¶ 10).

    The Anderson requirement that police must be engaged in a bona fide community caretaker activity is met only if the police activity is "totally divorced from the detection, investigation, or acquisition of evidence relating to the violation of a criminal statute." State v. Dull, 211 Wis. 2d 652, 658, 565 N.W.2d 575 (Ct. App. 1997) (quoting Anderson and Cady v. Dombrowski, 413 U.S. 433, 441 (1973)). Kramer argued that the officer was not engaged in a bona fide community caretaker activity because the officer's conduct was not "totally divorced" from the officer's law enforcement function.

    The court of appeals "question[ed] whether an officer's subjective motivation should be relevant to this Fourth Amendment seizure question. Here, however, we assume that the officer's subjective motivation is relevant. Nonetheless, we conclude that the officer's subjective concern that the innocent-seeming situation he faced might turn out to be dangerous or involve criminality does not prevent the officer's activity from being a bona fide community caretaker activity. Whatever the precise meaning of `totally divorced,' it cannot mean what Kramer is suggesting. In other words, it cannot mean that an officer must have subjectively ruled out all possibility of criminal activity in order to act in a community caretaker capacity. Police commonly act as community caretakers in situations where it remains reasonably possible that they will discover some criminal activity. If the meaning of `totally divorced' were as Kramer suggests, the situations in which an officer could lawfully perform valuable community caretaker services would be few and far between. This court has previously cautioned against a `too-narrow view' of the community caretaker function, lest police officers be dissuaded from discharging that function" (¶¶ 14-16).

    Accordingly, because the court rejected Kramer's "totally divorced" argument and because, apart from this argument, it was undisputed that the officer was engaged in a bona fide community caretaker activity, the court held that the officer was acting as a bona fide community caretaker within the meaning of Anderson at the time of the seizure. The court did note in extended analysis that "[i]t appears that the Anderson `totally divorced' rule used in Wisconsin to determine whether an officer is acting in a community caretaker capacity is inconsistent with well-settled law holding that police actions in search and seizure cases under the Fourth Amendment are judged by an objective standard. Because we are bound by our own community caretaker precedent, we only comment here. Our comment does not affect our decision. If there is to be a change in Wisconsin's community caretaker law, it must come from our supreme court" (¶ 30).

    The court next considered the Anderson balancing test. The Anderson requirement that "the public need and interest outweigh the intrusion upon the privacy of the individual" requires consideration of the following factors: 1) the degree of the public interest and the exigency of the situation; 2) the circumstances surrounding the seizure, including time, location, and the degree of overt authority and force displayed; 3) whether an automobile is involved; and 4) the availability, feasibility and effectiveness of alternatives to the type of intrusion actually accomplished (see ¶ 18).

    In this case the appellate court concluded that the public has a substantial interest in "encouraging police officers to be on the look-out for and offer aid to motorists who may be stranded or otherwise in need of assistance" (¶ 19), that the officer's display of authority by activating his emergency lights was a reasonable caretaker measure to minimize the danger created by passing motorists (see ¶ 22), and that Kramer's suggested alternatives for an officer's response to situations like this (which are described in the decision) were not as reasonable as the one chosen by the officer (see ¶¶ 25-28). "Having considered Kramer's arguments in light of the relevant factors, we conclude that the officer was lawfully acting in a community caretaker role. The public has a substantial need for and interest in encouraging police to offer help when faced with situations like the officer faced here. In many such situations, citizens would want an officer to stop and offer assistance. The public need and interest here outweigh the limited intrusion into Kramer's privacy" (¶ 29).

    Sentencing - Failure of Circuit Court to Consider Applicable Sentencing Guidelines - Harmless Error

    State v. Sherman, 2008 WI App 57 (filed 18 March 2008) (ordered published 30 April 2008)

    The defendant was convicted of the following crimes and received the sentences indicated: repeated sexual assault of a child (15 years of initial confinement and 15 years of extended supervision), two counts of sexual assault of a student by school staff (five years of initial confinement and five years of extended supervision on each count), and two counts of second-degree sexual assault of a child (10 years of initial confinement and 10 years of extended supervision on each count). The court ordered that all the sentences be served concurrently.

    On postconviction motion the defendant sought resentencing on several grounds, including the sentencing judge's failure to consider applicable sentencing guidelines on the two counts of second-degree sexual assault of a child. The circuit court denied the motion. In a decision authored by Judge Brunner, the court of appeals affirmed.

    In State v. Grady, 2007 WI 81, 302 Wis. 2d 80, 734 N.W.2d 364, the supreme court held that appellate courts have jurisdiction to review whether a circuit court considered applicable guidelines, and that circuit courts must demonstrate on the sentencing record consideration of the guidelines for all sentencing hearings occurring after Sept. 1, 2007. For sentencing hearings (such as the defendant's) occurring before that date, it is sufficient that the circuit court states in a postconviction hearing that it actually considered the guidelines at sentencing (see ¶ 6). It was undisputed in the present case that the circuit court gave no indication at the sentencing or postconviction hearings that it considered the applicable sentencing guidelines. However, the state argued that the circuit court's failure to do so was harmless error. The court of appeals agreed.

    Wisconsin's harmless error rule, which is codified in Wis. Stat. section 805.18 and is made applicable to criminal proceedings by Wis. Stat. section 972.11(1), applies to errors at sentencing. The standard for evaluating harmless error is the same whether the error is constitutional, statutory, or otherwise. An error is harmless if it does not affect the defendant's substantial rights. The defendant has the initial burden of proving an error occurred, after which the state must prove the error was harmless (see ¶ 8).

    The court of appeals concluded that "the circuit court's failure to consider the sentencing guidelines for the two [second-degree sexual assault of a child] counts was harmless error. The sentences on all counts were concurrent, and the sentences for the two guidelines counts were less than the controlling sentence of fifteen years' initial confinement and fifteen years' extended supervision rendered for repeated sexual assault of a child. Because we uphold the controlling sentence by rejecting [other claims advanced by the defendant], [the defendant's] substantial rights were not affected by the court's failure to consider the sentencing guidelines" (see ¶ 9).

    The defendant argued that resentencing should be required for all counts because all the sentences imposed on him were interdependent parts of a comprehensive sentencing plan. The appellate court disagreed. "[I]n cases involving reversed concurrent sentences, where the overall sentence structure remained intact after eliminating the reversed count, resentencing has been held to be unnecessary. Here, all of the sentences were concurrent, and the overall sentence structure was controlled by the longest sentence. Because the controlling sentence remains undisturbed, the overall sentence structure remains intact. Therefore, resentencing is unnecessary, and the circuit court did not err by declining to resentence [the defendant]" (¶ 12) (citations omitted).

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    Employment Law

    Wisconsin Fair Employment Act - Claim Preclusion

    Aldrich v. Labor & Indus. Review Comm'n, 2008 WI App 63 (filed 18 March 2008) (ordered published 30 April 2008)

    In March 2003 Aldrich was demoted at Best Buy, and she later resigned from the company. An Equal Employment Opportunity Commission claim and a federal lawsuit were decided in favor of Best Buy. Aldrich then resurrected her claim before the Wisconsin Equal Rights Division, which concluded there was probable cause for a finding of employment discrimination. Before a hearing could be held, an administrative law judge (ALJ) granted Best Buy's motion to dismiss on the ground of claim preclusion. The Labor and Industry Review Commission (LIRC) affirmed. On certiorari, the circuit court reversed.

    The court of appeals, in a decision authored by Judge Brunner, affirmed the circuit court. "Under the doctrine of claim preclusion, a final judgment is conclusive in all subsequent actions between the same parties or their privies regarding all matters that were litigated, or that might have been litigated, in the initial action. Claim preclusion has three elements: `(1) an identity between the parties or their privies in the prior and present suits; (2) an identity between the causes of action in the two suits; and, (3) a final judgment on the merits in a court of competent jurisdiction'" (¶ 6). Aldrich's state claims, which arose under the Wisconsin Fair Employment Act, were not litigated in the federal cases because the federal court lacked jurisdiction (see ¶ 10). The court of appeals distinguished several cases and rebuffed LIRC's fears that a contrary ruling would somehow open the "floodgates" for relitigation of failed federal claims. Issue (not claim) preclusion prevents relitigation of identical issues decided in federal court. In effect, LIRC sought to "use the scope of claim preclusion to avoid the limitations of issue preclusion" (¶ 14).

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    Family Law

    Paternity - Married Couples

    State v. Robin M.W., 2008 WI App 60 (filed 18 March 2008) (ordered published 30 April 2008)

    Robin gave birth to a child in 1993. No father's name appeared on the birth certificate, although Robin maintained a relationship with John, whom she married in 1996. John and Robin later separated but neither ever commenced a divorce action. In 2006 Robin received public assistance monies but refused to fill out an "Acknowledgment of Paternity" form, which would have required John's signature. The state filed this paternity action against John. Both John and Robin waived their rights to genetic testing, and John acknowledged in court that he was the child's father. A commissioner entered a judgment of paternity against John along with rulings on health insurance, support costs, and other matters. John moved for review on the ground that a paternity action was improper because he and Robin were still married and marriage of a man to a child's mother triggers a presumption of paternity under the statutes.

    The court of appeals, in an opinion written by Judge Wedemeyer, affirmed the circuit court. The issue was whether a paternity action could be brought under these circumstances, particularly that the birth certificate named no father, the mother declined to "pursue" the formal acknowledgment form, and the couple was still married. John argued that the marital presumption statute, Wis. Stat. section 891.41(1), barred the paternity action. The state contended, however, that Robin and John's refusal to sign the acknowledgment form triggered the application of Wis. Stat. section 767.80(1)(h) and (6m). The court of appeals agreed. "No father's name was listed on [the child's] birth certificate. Thus, according to the clear language of this statute, the State was obligated to commence a paternity action. The State attempted to have paternity acknowledged by taking the less formal action of requesting that the Acknowledgment of a Marital Child form be completed and filed. Its attempts failed. Accordingly, it was obligated, by statute, to file the paternity action" (¶ 9).

    Addressing other issues, the court ruled that the paternity adjudication was not "infirm" on the ground that it failed to address custody or placement, because no divorce action was pending. Finally, the paternity action was not contrary to the child's best interests.

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    Medical Malpractice - Contribution

    Rogers v. Saunders, 2008 WI App 53 (filed 5 March 2008) (ordered published 30 April 2008)

    The plaintiffs brought a medical malpractice action against various health care providers, including Aurora. Aurora's liability insurer, MedPro, settled with the plaintiffs. MedPro then sought payment from American Casualty, which provided insurance coverage to another entity, Cross-Country, which supplied nurses to Aurora. MedPro cited a contract provision that requires Cross-Country and American Casualty to pay for the liability caused by a nurse's actions. The circuit court granted summary judgment dismissing the claims against American Casualty.

    The court of appeals, in an opinion written by Chief Judge Brown, affirmed. Under Wis. Stat. chapter 655 Aurora is a health care provider but the nurse ("not being a nurse anesthetist") is not. The parties had also stipulated that for purposes of this case, the nurse was an Aurora employee. Thus, the court succinctly stated the key issue to be "[w]hether, in a medical malpractice case, the insurer of a health care provider can seek contribution from a non-health-care-provider employee for his or her negligence" (¶ 11). The court relied on Patients Compensation Fund v. Lutheran Hospital, 223 Wis. 2d 439, 588 N.W.2d 35 (1999). "[A]lthough the ultimate holding of Lutheran Hospital dealt with the subrogation rights of the Fund, the court's reasoning in the case also controls the outcome of this litigation between non-Fund insurers. In fact, the Lutheran Hospital holding was the end result of a chain of logic that includes the proposition that governs this case. The court essentially reasoned that under [chapter] 655, a health care provider and its nonprovider employees are treated as a unit for liability purposes. Therefore, any liability for an employee's negligence is covered by the provider's insurance so long as the employee is conducting the provider's business. It is this second logical step that governs this case and bars any tort contribution claim by MedPro. The Lutheran Hospital court relied on this second step to reach a third: because the nurse's liability was included in the provider's insurance limit, the Fund was statutorily responsible for any amounts in excess of the limit" (¶ 19).

    Medicare - Gap Coverage

    Froedtert Hosp. v. National States Ins. Co., 2008 WI App 58 (filed 18 March 2008) (ordered published 30 April 2008)

    Ledger was covered by Medicare but also had purchased "Medicare Supplemental Insurance" from National States in 1998. While hospitalized at Froedtert for a kidney transplant in 2000, Ledger incurred a bill for about $267,000 in hospital care. Ledger had exhausted her Medicare Part A coverage before her 2001 hospitalization but Medicare Part B paid about $60,000 and Ledger herself made a copayment of another $3,000. National States paid about $73,000, which it asserted would have been the amount that Medicare would have otherwise paid if Medicare Part A had not been exhausted. Froedtert sued National States for the balance of $130,000. On two occasions the Wisconsin Office of the Commissioner of Insurance advised National States that it was obligated to pay the entire remaining balance. Wisconsin is one of three states that received waivers from federal legislation that otherwise compels hospitals to accept the Medicare reimbursement rate from gap insurers. The circuit court granted summary judgment in favor of Froedtert, ruling that National States was contractually bound to pay the entire amount billed, not the amount Medicare Part A would have paid.

    The court of appeals affirmed in an opinion written by Judge Kessler. First, the court held that Froedtert had standing to sue National States by virtue of an assignment, executed by Ledger when she was admitted to the hospital, that placed no limitations on Froedtert's "ability to enforce the assignment by any lawful method" (¶ 17).

    Second, National States was contractually obligated to pay the balance of the hospital expenses, not just what Medicare Part A would have paid. The court reviewed relevant federal and state law as it existed in 2001. "At the time Ledger incurred the charges at Froedtert in 2001, the Wisconsin Insurance Regulations were unchanged. See WIS. ADMIN. CODE § INS 3.39(5)(c)12. (July 2001, Wis. Reg. No. 547, and July 2000, Wis. Reg. No. 535). These policies had to pay `all Medicare Part A eligible expenses for hospitalization not covered by Medicare' after the hospital inpatient coverage, including lifetime reserve days, had been exhausted. Section INS 3.39(5)(c)12. As we have seen, `Medicare eligible expenses' are those expenses `covered by Medicare,' but which `may or may not be fully reimbursed by Medicare.' Sec. INS 3.39(3)(d). The required coverage does not depend on how much Medicare would have paid for the service in question. To legally market the policy in Wisconsin, National States had to promise to pay all of the hospital expenses, regardless of whether, if the benefits had not been exhausted, these expenses would have been `fully reimbursed' by Medicare. The regulation demonstrates that the reasonableness and necessity of the particular treatment was determined by Medicare when it determined that the specific treatment would normally be covered by Medicare" (¶ 24).

    The court next addressed the ambiguity it found in the policy concerning the amount of expenses incurred. "The regulations also permitted exclusions and exceptions not inconsistent with the Wisconsin requirements or federal Medicare law. In its policy at issue here, National States did not specifically limit its payment obligation for these hospital charges, although it did limit its obligation to the Medicare reimbursement rate for psychiatric hospitalization and for doctors' charges. In addition, National States imposed the standard of `usual and customary' charges on its payment obligations with regard to chiropractic services, home care services and diabetes treatment and equipment, but described no such limitation as to general inpatient hospitalization charges. National States demonstrated the ability to clearly describe permissible limits on payments it would make. It did not describe in its policy at issue here the limits to its payment for general inpatient hospitalization which it now seeks to assert. We conclude, therefore, that when National States obtained the necessary approval to market Medicare supplement insurance in Wisconsin, and sold this policy to Kathleen, it intended to, and Kathleen reasonably understood that it would, pay all inpatient hospital charges incurred after Medicare Part A was exhausted" (¶ 31).

    Finally, the court also held that the "usual and customary charges" were delimited by the regulations, not some other standards, and the circuit court properly imposed interest of 12 percent pursuant to Wis. Stat. section 628.46(1) (1999-2000) (see ¶36).

    Judge Fine dissented. He concluded that National States was obligated only to pay whatever amount would have been payable under Medicare Part A.

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    Causation - Summary Judgment

    Horak v. Building Services Indust. Sales Co., 2008 WI App 56 (filed 20 Feb. 2008) (ordered published 30 April 2008)

    Horak sued Building Services for supplying asbestos to an insulation contractor, Jaeger, that had employed her father from 1961 to 1965. Horak claimed that the asbestos caused her father's death from lung cancer. The circuit court granted summary judgment to Building Services because Horak could not prove that her father actually worked with asbestos supplied by this defendant.

    The court of appeals, in an opinion written by Judge Fine, reversed. "Building Services sold a significant amount of asbestos products to Jaeger or its predecessor during that time, and it is not disputed that Benzinger installed asbestos insulation on various Jaeger job-sites. Is this enough to pass summary-judgment muster? We believe that it is" (¶ 9). First, it was reasonable to infer that the deceased worked with the "raw material" provided by the supplier. Second, Jaeger was a small company that employed only several workers during this time. Moreover, tort law requires only that the plaintiff establish "a" cause, not "the" cause, of her father's cancer.

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    Worker's Compensation

    Vocational Rehabilitation - Social Security Offset

    Michels Pipeline Constr. v. Labor & Indus. Review Comm'n, 2008 WI App 55 (filed 12 March 2008) (ordered published 30 April 2008)

    An employee was injured in 1983 while working for Michels Pipeline Construction. Over the next 11 years, the worker's compensation insurance carrier paid more than $99,760 in temporary disability payments on the claim. A separate calculation by the Department of Workforce Development indicated that the employee should have received nearly $113,000 on his claim. The discrepancy exists because Michels and Bituminous Casualty Corporation (the plaintiffs-appellants) applied the reduction described in Wis. Stat. section 102.44(5), the so-called Social Security offset, to the temporary disability payments made under section 102.43(5) while the employee was enrolled in a vocational rehabilitation program.

    An administrative law judge (ALJ) determined that the plaintiffs owed the employee $13,000 for improperly applying the Social Security offset. The Labor and Industry Review Commission (LIRC) affirmed the ALJ. The plaintiffs sought judicial review, and the circuit court affirmed LIRC, observing that "[i]t has been the policy of the LIRC and the DWD since 1987 not to apply social security offsets to vocational rehabilitation" (¶ 5).

    In a decision authored by Judge Snyder, the court of appeals reversed the circuit court. Applying "due weight deference" to the decision of LIRC and concluding that LIRC's interpretation ignored the plain language of the governing statutes (see ¶ 12), it held that "[the plaintiffs] properly applied the social security offset to the temporary disability benefits paid to [the employee] while he was enrolled in a program of vocational rehabilitation" (¶ 17).

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