Vol. 84, No. 8, August 2011
Standard of Review – Appellate Review of Trial Court’s Factual Findings When Testimony and Video Evidence Conflict
State v. Walli, 2011 WI App 86 (filed 11 May 2011) (ordered published 29 June 2011)
At a suppression hearing in which the defendant contested whether a police officer had reasonable grounds to stop his vehicle, the issue was whether the defendant’s vehicle crossed the center line of the roadway. The officer testified that an oncoming vehicle crossed the center line and nearly sideswiped his squad car; this resulted in the officer activating his emergency equipment and stopping the car’s driver, Walli. A video camera mounted in the squad car captured images of the defendant’s car. The video was played for the circuit court at the suppression hearing. The parties disagreed as to what the video showed. At the conclusion of the hearing, the court denied the defendant’s motion to suppress; it found that the officer had reasonable suspicion to conduct the stop (see ¶ 4).
A crucial issue on appeal involved the applicable standard of review to be used by an appellate court when reviewing factual findings of the circuit court that are based on a combination of live testimony and evidence preserved on a video recording (see ¶ 1). In a decision authored by Judge Anderson, the court decided that “when evidence in the record consists of disputed testimony and a video recording, we will apply the clearly erroneous standard of review when we are reviewing the trial court’s findings of fact based on that recording” (¶ 17). The appellate court went on to indicate that it viewed the video recording from the officer’s squad car in conference and concluded that the circuit court’s finding that the defendant crossed the center line was not clearly erroneous (see ¶ 18). In a footnote, the court indicated that it would leave for another day a decision on the appellate standard of review to be employed in a situation in which the video recording is the only evidence of the defendant’s conduct (see ¶ 15 n.5).
Sanctions – Procedures – Appeals
Schapiro v. Pokos, 2011 WI App 97 (filed 24 May 2011) (ordered published 29 June 2011)
In 2009, the court of appeals ordered Schapiro to pay costs after he unsuccessfully appealed a circuit court decision assessing a sanction of $250 against him, pursuant to Wis. Stat. section 802.05(3). Schapiro steadfastly refused to pay the costs, and so the circuit court held a hearing, which resulted in a judgment for those costs against Schapiro. A later motion for reconsideration by Schapiro was not “entertain[ed]” (¶ 7). Schapiro
The court of appeals affirmed in an opinion authored by Judge Curley. First, the circuit court had jurisdiction to enter the judgment enforcing the payment of costs ordered by the court of appeals. The court of appeals held that a party need not file a separate petition with the court of appeals asking it to direct the circuit court to order judgment based on the appellate order (see ¶ 11). Second, the circuit court properly exercised its discretion. “For example, during the hearing where the parties argued whether the trial court had jurisdiction to enter Pokos’ and Progressive’s proposed order, the trial court found that: (1) the Court of Appeals awarded costs against Schapiro; (2) the ‘least offensive’ way to enforce the Court of Appeals’ order was to order judgment; and (3) the trial court was obliged to respect the higher court’s order for costs” (¶ 15). Third, the circuit court properly exercised discretion when it refused to entertain Schapiro’s motion for reconsideration. Schapiro pointed to no newly discovered evidence or any manifest error of law or fact (see ¶ 18).
Finally, the court of appeals found that this “entire appeal” was frivolous, for reasons discussed in the opinion (see ¶ 22). Pursuant to Wis. Stat. section 809.25(3), the court of appeals awarded sanctions, which included a bar against Schapiro from further “involving” the parties until the sanctions are paid. “Barring Schapiro from involving Pokos and Progressive in litigation until the sanctions are paid will promote ‘the efficient functioning of the courts.’... Moreover, sanctions in this case are ‘narrowly tailored to punish [Schapiro] for pursuing frivolous litigation and to deter him from doing so in the future’” (¶ 24).
Banks – Fraudulent Transfer – Federal Preemption
M&I Marshall & Ilsley Bank v. Guaranty Fin., 2011 WI App 82 (filed 5 May 2011) (ordered published 29 June 2011)
Under terms of a 1998 loan agreement, M&I Marshall & Ilsley Bank (M&I) loaned $50 million to Guaranty Financial MHC (MHC). As collateral, MHC pledged 50,000 shares of preferred stock of the GB REIT Corporation, a subsidiary controlled by MHC. The REIT preferred shares were subject to an “automatic exchange” provision by which “the REIT shares would be automatically exchanged for Guaranty Bank [another subsidiary] preferred shares under specified circumstances” (¶ 10).
In 2009, the Office of Thrift Supervision (OTS) took action prompted by the precarious financial position of Guaranty Financial and its subsidiaries. OTS “issued two similarly worded directives, one to Guaranty Bank and the other to REIT.... In general, they directed the defendants to make the automatic exchange of the REIT preferred shares for Guaranty Bank preferred shares, because OTS ‘anticipates the Bank becoming undercapitalized under Prompt Corrective Action regulations, 12 C.F.R. Part 565, in the near term.’ ... The defendants made the exchange on April 28, 2009, and Guaranty Bank notified M&I that, pursuant to direction from OTS, Guaranty Bank was dissolving and liquidating both the REIT and GBRC Holding Company, so that all assets of the REIT and GBRC were distributed to Guaranty Bank” (¶¶ 14-15).
In this lawsuit, M&I alleged that the exchange left it with stock that “was of little or no value” (¶ 16), effectively stripping it of $50 million. M&I further alleged that the automatic exchange was a fraudulent transfer under various statutes and a conversion. The circuit court granted the defendant’s motion to dismiss on grounds of preemption, namely, that the relief sought by M&I (voiding the exchange) conflicted with the OTS directives.
The court of appeals affirmed in an opinion written by Judge Blanchard. This case presented an issue of “implied conflict preemption” (¶ 25). First, the court rejected M&I’s contention that the automatic exchange was not authorized under the REIT certification of incorporation (see ¶ 41). Second, even in light of the “presumption against preemption,” the OTS directives were valid and created a “clear and direct conflict between the authorized operation of federal law and this state court action” (¶ 43). The opinion reviewed the OTS’s authority under federal law and the enforceability of its directives. The court held “that, even assuming that the directives are categorized as ‘informal’ actions, they constituted highly time sensitive, unambiguous demands of federal regulators enforcing federal law, and therefore had preemptive effect”
Residential Listing Contracts – “Protected Buyer”
First Weber Group N. Wis. LLC v. Guyant, 2011 WI App 84 (filed 26 May 2011) (ordered published 29 June 2011)
The Guyants signed a WB-1 residential listing contract with First Weber to assist in the sale of their house. About three weeks before the contract was scheduled to expire, Bushman expressed interest in the house but stated she did not want to work through a realtor. The Guyants conveyed Bushman’s identity and interest to First Weber. The listing contract expired on Jan. 31, 2009. On Feb. 2, 2009, the Guyants called Bushman, who eventually bought the house. The sale closed in April 2009. First Weber sued the Guyants for its 6.5 percent commission, on grounds that Bushman was a protected buyer. Following a trial, the circuit court ruled that Bushman was not a protected buyer.
The court of appeals reversed in an opinion, written by Judge Vergeront, that canvasses the law governing protected-buyer status under such contracts. The key question was whether the Guyants “negotiated” with Bushman under the contract’s terms. The court clarified that information on a website and a yard sign is not dispositive evidence of negotiations (see ¶ 21). A “different result” stemmed from “the discussion between Bushman and the Guyants regarding Bushman’s desire not to have to deal with the Guyants’ broker in order to purchase their home” (¶ 22). “Clearly a discussion in the sense of a ‘two-way communication,’ ... took place between the Guyants and Bushman on the question whether Bushman would pursue her interest in the house with the Guyants only or with a broker acting as the Guyants’ agent” (¶ 23).
The court was not persuaded by the Guyants’ arguments that 1) price was not discussed, 2) Bushman refused to deal with the broker, and 3) the contract’s language must be strictly construed against the broker. “In summary, we conclude that Bushman did discuss with the Guyants ‘potential terms upon which [she] might acquire an interest in [their] Property’ when they discussed Bushman’s desire not to have a broker involved on behalf of the Guyants and ended the discussion with Lisa’s agreement that she would call Bushman after the expiration of the listing contract. Therefore, Bushman meets the definition of ‘Protected Buyer’ and the listing contract was extended one year as to her. Because Bushman purchased the Guyants’ home within that one-year period, First Weber is entitled to a commission of 6.5% of the $68,000 Bushman paid for their home” (¶ 33).
Inchoate Conspiracy – Overt Act
State v. Peralta, 2011 WI App 81 (filed 3 May 2011) (ordered published 29 June 2011)
Peralta appealed a judgment convicting him of conspiracy to deliver cocaine and the order denying his postconviction motions. He argued that the circuit court erred in entering the conviction and denying his postconviction motions because the criminal complaint – which formed the factual basis for Peralta’s guilty plea and conviction – did not allege facts sufficient to constitute a conspiracy. Specifically, he contended that the complaint failed to allege an “overt act” committed in furtherance of the conspiracy.
The elements of inchoate conspiracy are 1) intent by the defendant that the crime be committed; 2) agreement between the defendant and at least one other person to commit the crime; and 3) an act performed by one of the conspirators in furtherance of the conspiracy. See Wis. Stat. § 939.31. The crime that is the subject of the conspiracy need not be committed for a violation of section 939.31 to occur; rather, the focus is on the intent of the individual defendant. For this reason, a person can be convicted of inchoate conspiracy even if the other party to the conspiracy is an undercover agent who did not intend to commit the crime (see ¶ 18).
This case involved the third of the aforementioned three elements of inchoate conspiracy: the overt act requirement. “An overt act must be done ‘toward the commission of the intended crime,’ and must go ‘beyond mere planning and agreement.’ However, the act need not, by itself, be an unlawful act or an attempt to commit the crime. If there was an act which was a step toward accomplishing the criminal objective, that is sufficient” (¶ 19) (citations omitted).
In this case, the criminal complaint alleged a series of discussions between Peralta and an undercover detective that took place in January 2008. On Jan. 3, 2008, the undercover detective met with Peralta; they discussed the sale of three kilograms of cocaine. Peralta was to facilitate the sale from an unknown source. The detective and Peralta exchanged phone numbers and agreed to make contact in the future. Peralta indicated that his supplier was having more cocaine brought to Milwaukee and that he was going to contact the undercover detective when the three kilograms were received. On Jan. 4, 2008, the undercover detective and Peralta made contact again. Peralta told the detective that his supplier only wanted to give him one kilogram of cocaine, as this was going to be the first time Peralta was dealing with him. On Jan. 9, 2008, the detective and Peralta spoke again. The detective said that he wanted to know the price and quality of the cocaine. Peralta indicated that he could get the cocaine and bring it to the detective. Peralta and the detective also discussed a purchase price of $23,000.
On Jan. 10, 2008, Peralta told the detective that his supplier was ready if he wanted the cocaine immediately. The detective said that he was not ready, but that he would be ready on the following Tuesday (Jan. 15, 2008). Peralta told the detective that the cocaine was good quality, and consequently, he wanted $24,000 for it now. On Jan. 15, 2008, the detective and Peralta spoke again. This time they discussed final arrangements for the transaction. On Jan. 16, 2008, Peralta agreed to meet the detective at a specific restaurant. At the meeting, the detective and Peralta discussed the purchase of the cocaine and the change in the cocaine’s price and made general small talk about the cocaine supplier. Peralta was then arrested and taken into custody.
In a decision authored by Judge Curley, the court of appeals concluded that the complaint alleged an overt act – namely, Peralta’s communication to an undercover police detective that a large quantity of cocaine was ready for immediate delivery (see ¶ 1). Said the court, “we hold that Peralta’s act of communicating to the detective that the cocaine was available for immediate delivery on January 10 was an act ‘beyond mere planning and agreement,’ which ‘was a step toward accomplishing the criminal objective’ of delivering a large quantity of cocaine. See Wis JI – Criminal 570. Contrary to what Peralta argues, his telling the detective that the cocaine was ‘ready’ is, in our view, not part of the formation of the agreement itself; it is a step beyond the planning stage which shows an illegal project at work. Moreover, contrary to what Peralta argues, Peralta’s communication that the cocaine was ready for immediate delivery gives rise to an inference that Peralta had already contacted a supplier regarding the drug deal, which would have been an overt act in and of itself” (¶¶ 23-24) (citation omitted). The court further noted that, even if Peralta were lying when he told the officer that the cocaine was available, “his act of communicating that the cocaine was ready was undoubtedly calculated to maintain the officer’s interest in the deal” (¶ 24).
Sex Offenders – Registration
State v. Freland, 2011 WI App 80 (filed 26 May 2011) (ordered published 29 June 2011)
The defendant was convicted for failing to provide sex-offender information. In 2000, he had been convicted of fifth-degree sexual misconduct, a “gross misdemeanor,” in Minnesota. He later moved to Wisconsin but never registered as a sex offender. In 2007, the defendant pleaded guilty and was placed on probation for a felony count of failing to provide this sex-offender information. His probation was later revoked. This appeal arose from the defendant’s failed attempt to withdraw his guilty plea on grounds that he was guilty of only a misdemeanor, not a felony.
The court of appeals reversed in an opinion written by Judge Sherman. The court held that the sex-offender reporting statute, Wis. Stat. section 301.45(6)(a)2., includes “out-of-state misdemeanors that are ‘comparable to a sex offense’” (¶ 13). It next determined that the defendant’s Minnesota conviction was a “comparable” sex offense (to fourth-degree sexual assault in Wisconsin) based on an analysis of the statutory elements (see ¶ 25). Finally, the defendant should have been permitted to withdraw his guilty plea because he was not informed “that he was eligible to be charged with a misdemeanor rather than a felony” for this failure to report (¶ 26). Put differently, he was wrongly convicted of a felony and served more time than the maximum term for the misdemeanor. The court directed that on remand the circuit court must act with “great dispatch” (¶ 31).
Restitution – “Victim”
State v. Hoseman, 2011 WI App 88 (filed 11 May 2011) (ordered published 29 June 2011)
Hoseman was convicted of conspiracy to manufacture hydroponic marijuana in a home he rented under false pretenses and converted into an indoor marijuana farm, causing extensive damage, including mold. The court ordered Hoseman to pay $25,000 in restitution toward the total damage of more than $100,000. Hoseman objected on grounds that there were no “victims” to his drug crimes and, therefore, the court could not order restitution.
The court of appeals affirmed in an opinion written by Judge Anderson. “Case law arising under the restitution statute informs us that there are two components to the question of whether restitution can be ordered. First, the claimant of restitution must be a ‘direct victim’ of the crime. Second, there must be a causal connection between the defendant’s conduct and harm suffered by the claimant” (¶ 16). The home’s owners were “direct victims” under the statute. The court distinguished “victimless crimes” cases cited by Hoseman on the basis that “they stand for the proposition that governmental entities are not entitled to restitution for collateral expenses incurred in the normal course of law enforcement” (¶ 23). Here, “Hoseman made unauthorized alterations to the residence in order to construct and operate a hydroponic growing operation” (¶ 24). Moreover, the record clearly supported the trial judge’s findings that Hoseman’s alterations caused extensive damage to the home (see ¶ 27).
Terry Stops – Reasonable Suspicion
State v. Matthews, 2011 WI App 92 (filed 17 May 2011) (ordered published 29 June 2011)
At about 11:15 p.m., three Milwaukee police officers were patrolling what one of them described as a high-crime area because of the area’s street robberies, gang-related violence, gun violence, and drug dealing. It was late November and the temperature was about 20 degrees. The officers saw Matthews standing on a corner wearing a ski mask over his face; he was also wearing a hoodie. They also observed a woman walking away from him who appeared to be frightened.
The patrol car’s driver stopped next to Matthews but did not activate the squad’s siren or flashing lights. One of the officers got out of the patrol car, walked over to Matthews, and asked him if he intended to rob someone. Matthews replied with a “no” and then pulled down his mask. By this time, the other two officers had gotten out of the patrol car and walked over to Matthews. None of the officers had their guns drawn. A consensual search was then conducted, during which cocaine, marijuana, and pills were found. The officers arrested Matthews. In the drug prosecution that followed, the circuit court suppressed the evidence recovered during the search, finding that, although the consent to search was freely given, the officers violated Matthews’s rights by stopping him to ask whether he was intending to rob someone.
In a majority decision authored by Judge Fine, the court of appeals reversed the circuit court. Assuming but not deciding that the officers “stopped” Matthews within the meaning of Terry v. Ohio, 392 U.S. 1 (1968), the court of appeals held the stop “was clearly consistent with the Fourth Amendment” (¶ 9). When determining the lawfulness of a stop under Terry, courts must assess whether there are articulable facts evident in the record that, taken together with rational inferences from those facts, when viewed objectively, permit a law-enforcement officer to reasonably conclude in light of his or her experience that criminal activity may be afoot (see ¶ 11). This is true even if each of those acts may be innocent in itself, but when taken together, they warrant further investigation.
Said the court: “That is what we have here: (1) a man in a high-crime area; (2) late at night; (3) wearing a ski mask that covers his face below his eyes; (4) wearing a hoodie; (5) who had an ambiguous but ‘unusual’-appearing encounter with a woman walking by herself. Although it was not a mid-summer night, and Matthews may have worn the ski mask and hoodie to stay warm so that his choice of clothing was innocent, the police reasonably and based on their experience could objectively see that ‘further investigation’ was ‘warranted’ to ensure that ‘criminal activity’ was not ‘afoot.’ Accordingly, we hold on our de novo review, that … the … officers had, objectively, the requisite reasonable suspicion to ask Matthews what he was doing. Indeed, Terry teaches that this is what a concerned competent officer should do: a police officer may in appropriate circumstances and in an appropriate manner approach a person for purposes of investigating possibly criminal behavior even though there is no probable cause to make an arrest” (¶ 11) (citation omitted).
Judge Kessler filed a dissenting opinion.
Appeal – Brokers – DFI Forms – “Aggrieved” Persons
Avudria v. McGlone Mortgage Co., 2011 WI App 95 (filed 17 May 2011) (ordered published 29 June 2011)
The plaintiff used McGlone, a state-licensed mortgage broker, to help him obtain a mortgage loan for a residential property. The loan closed in 2007. In providing its services, McGlone used forms taken from a software program it had used for years, but in 2008 it switched to forms mandated by the Wisconsin Department of Financial Institutions (DFI), which had required the use of DFI-approved forms since 2005. Although the plaintiff testified he was “pleased” with McGlone’s services and admitted he had never objected to its fees, the plaintiff sued McGlone in 2009 for failing to provide him the DFI-approved forms in 2007 (see ¶ 6). The circuit court granted summary judgment in favor of McGlone on grounds that the plaintiff was not an aggrieved person for purposes of Wis. Stat. chapter 224. The parties then entered into a stipulated satisfaction of judgment.
The court of appeals affirmed in an opinion, written by Judge Brennan, that addressed the court’s jurisdiction and the merits of the appeal. First, the stipulated satisfaction of judgment did not strip jurisdiction from the court of appeals. The plain language of the stipulation did not expressly waive the plaintiff’s right to appellate review. Moreover, the statutes “contemplate that a successful party can collect judgment without a losing party waiving its right to appeal” (¶ 14). Second, the plaintiff was not an aggrieved person under Wis. Stat. section 224.80(2); thus he could not pursue a private cause of action. “Based upon the plain language of Wis. Stat. § 224.80(2), we determine that a ‘person who is aggrieved’ is one who suffered at least some actual injury or damage” (¶ 24). Here, the injury must be linked to the forms that plaintiff never received. “To read the statute as Avudria suggests, as a strict liability statute permitting a private cause of action for a mere technical violation of Wis. Stat. ch. 224, requires that the word ‘aggrieved’ be read out of the statute” (¶ 26). Here the plaintiff asserted no injury or damage (see ¶ 31).
Motor Vehicle Law
OWI – Counting Prior Out-of-state “Convictions”
State v. Devries, 2011 WI App 78 (filed 17 May 2011) (ordered published 29 June 2011)
Devries appealed a judgment convicting her of OWI as a fifth offense. In a decision authored by Judge Fine, the court of appeals affirmed. The only issue on appeal was whether the circuit court erred in counting Arizona and California drunk-driving matters as prior “convictions” under the Wisconsin “counting statute.” See Wis. Stat. § 343.307. As relevant to this case, conviction means “a determination that a person has violated or failed to comply with the law in a court of original jurisdiction or an authorized administrative tribunal, an unvacated forfeiture of property deposited to secure the person’s appearance in court or [a] violation of a condition of release without the deposit of property, regardless of whether or not the penalty is rebated, suspended, or probated, in this state or any other jurisdiction.” Wis. Stat.
In the Arizona case, certified records demonstrated that “(1) Devries was arrested on August 31, 2005 for drunk driving; (2) Devries was directed to appear in court on the specified date; (3) Devries promised to appear in court on the specified date; (4) Devries had a lawyer for the Arizona matter; and (5) Devries defaulted on her obligation and promise to appear in court. Indeed, one of Devries’s trial lawyers conceded that Devries had ‘violated a condition of her bond’ in Arizona. Thus, the documents support the circuit court’s conclusion that Devries had a ‘conviction’ as that word is defined by Wis. Stat. § 340.01(9r) because she did not appear in court when required. See § 340.01(9r) (defining ‘conviction’ as including: a ‘fail[ure] to comply with the law in a court of original jurisdiction’; and a ‘violation of a condition of release without the deposit of property.’)”
In the California case, certified records demonstrated that “(1) Devries was arrested on December 26, 2003, for drunk driving; (2) Devries was ‘ordered’ to appear in court on the date specified in the Notice to Appear; (3) Devries promised to appear in court on the date specified in the Notice to Appear; (4) Devries did not appear on the date specified in the Notice to Appear; (5) Devries had a lawyer for the California matter; (6) Devries pled ‘not guilty’ and (7) Devries did not appear for trial. Thus, the documents support the circuit court’s conclusion that Devries had a ‘conviction’ as that word is defined by Wis. Stat. § 340.01(9r) because she did not appear in court after she was arrested and released even though she was ‘ordered’ to do so, and she did not appear on the date scheduled for trial. See § 340.01(9r) (defining ‘conviction’ as including: a ‘fail[ure] to comply with the law in a court of original jurisdiction’; and a ‘violation of a condition of release without the deposit of property.’)”
Public Contracts – Violations of Competitive-bidding Statutes – Recovery of Costs of Preparing Failed Bid
North Twin Builders LLC v. Town of Phelps, 2011 WI App 77 (filed 3 May 2011) (ordered published 29 June 2011)
The town of Phelps published notices seeking bids for repairs to its town hall. There was no dispute that the timing of the notices violated the competitive-bidding statute. See Wis. Stat. § 60.47 (2)(b). North Twin Builders submitted a bid that was deemed incomplete, and the contract was awarded to another bidder. North Twin Builders filed suit seeking injunctive relief to prevent further work on the town hall; it also sought damages equal to the cost of preparing its failed bid. North Twin Builders also filed a motion for a temporary injunction. However, during a conference call with the court before a hearing on the motion, North Twin Builders informally withdrew its request for a restraining order, acknowledging that the project was already significantly underway and nearing completion.
The town filed a motion to dismiss and, later, a motion for summary judgment. In both motions, the town asserted that under controlling case law, a disappointed bidder must obtain injunctive relief to halt a public project before it can recover the cost of preparing its unsuccessful bid. The circuit court denied both motions. It concluded that Wisconsin courts have not yet determined whether an unsuccessful bidder could recover bid-preparation expenses without first obtaining injunctive relief. The court then concluded that, for violations of the competitive-bidding statute, the public interest is served by allowing an unsuccessful bidder to recover the costs of preparing its bid.
In a decision authored by Judge Brunner, the court of appeals affirmed. It concluded that a disappointed bidder may recover bid-preparation expenses for a violation of the competitive-bidding statute regardless of whether it has sought injunctive relief (see ¶ 1). Said the court, “the circuit court correctly determined that the public interest is served by allowing disappointed bidders to recover expenses for preparing their failed bids even in the absence of injunctive relief. Allowing recovery of such costs is not synonymous with requiring the public bidding authority to ‘pay twice for the performance of one contract.’ Instead, it is a limited remedy that encourages bidders to fulfill their role as advocates for the public interest. Allowing such damages also encourages public bidding authorities to fully comply with statutory bidding requirements” (¶ 21) (citation omitted).
Eminent Domain – Procedures for “Uneconomic Remnant” Cases
Waller v. American Transmission Co., 2011 WI App 91 (filed 25 May 2011) (ordered published 29 June 2011)
The plaintiffs had part of their property taken by American Transmission Co. (ATC) to allow ATC to construct a high-voltage-transmission line. They filed an action under Wis. Stat. section 32.06(5) contesting the partial taking, alleging that their property after the taking was an “uneconomic remnant.” An uneconomic remnant is defined as “the property remaining after a partial taking of property, if the property remaining is of such size, shape or condition as to be of little value or of substantially impaired economic viability.” Wis. Stat. § 32.06(3m). If a partial taking leaves the property owner with an uneconomic remnant, “the condemnor shall offer to acquire the remnant concurrently and may acquire it by purchase or by condemnation if the owner consents.” Id.
In this case, the court of appeals addressed the procedure to be used by circuit courts in eminent domain proceedings when a partial taking is sought by the condemnor and a property owner has raised the question of whether he or she will be left with an uneconomic remnant should the partial taking occur. In a decision authored by Judge Reilly, the court held that “when a property owner properly raises the issue of whether he or she will be left with an uneconomic remnant pursuant to Wis. Stat. § 32.06(3m), a circuit court must first hold an evidentiary hearing under § 32.06(5) to determine whether the remaining parcel is an uneconomic remnant. A fact finder may not determine just compensation until the circuit court has resolved the full scope of the taking” (¶ 2).
Safe-place Statute – Defects and Conditions – Remodels
Wagner v. Cincinnati Casualty Co., 2011 WI App 85 (filed 19 May 2011) (ordered published 29 June 2011)
Wagner was injured at work when part of a double-hung window came loose and blew into her office, striking her. The window had been recently installed by a contractor that replaced the buildings’ windows. Wagner alleged negligence by the contractor and a violation of the safe-place statute, Wis. Stat. § 101.11(1), by the building’s owner. Over objection by the contractor, who sought contribution, the trial judge granted summary judgment and dismissed the safe-place claim against the owner. The judge found that the hazardous window was an “unsafe condition” regarding which the owner had no notice, actual or constructive.
The court of appeals reversed in an opinion, written by Judge Blanchard, that concluded that the hazardous window constituted a construction defect, not an unsafe condition, for which “notice” is not an element.
“[T]he question presented here is this: Is an exterior replacement window alleged to be hazardous due to faulty installation a ‘structural defect,’ or instead ‘an unsafe condition associated with the structure,’ under the safe-place statute? The parties have not identified, and we have not located, precedent that directly answers this question” (¶ 18). Nonetheless, the court held that “a ‘structural defect’ arises from design or construction flaws when a building element is put in place, whether as an original part of a structure or as a replacement. In contrast, ‘unsafe conditions associated with the structure’ are those that arise from repair or maintenance or a failure to repair or maintain an element of a building that was previously safe” (¶ 21).
Conceding that “general formulations in this context are not easily crafted,” the court discussed case law that spoke of “additions to an existing feature of the building.” “It will often be difficult to distinguish between an addition that is part of a repair and an addition that adds an entirely new building element. This is because work on a building typically involves ‘additions’ (as well as subtractions) of items and materials. In any case, however, in this instance it could not reasonably be said that the window replacement was a repair-like addition to the structure, as opposed to a construction-like alteration of it” (¶ 34).
Finally, the court rejected the owner’s contention that it was not liable because it had “turned over” the “control and custody” of the building to the contractor. The owner’s duty under the safe-place statute is nondelegable (see ¶ 37).
Third-party Tortfeasors – Compelled Settlement
Dalka v. American Family Mut. Ins. Co., 2011 WI App 90 (filed 24 May 2011) (ordered published 29 June 2011)
Dalka was injured in a car accident while on the job. He received worker’s compensation benefits from an insurer, Zurich American. Dalka sued the other driver for damages. Zurich, which was also a plaintiff, settled the claim with the other driver for $8,500 and brought a motion to compel Dalka to accept that figure after Dalka refused to do so. The trial judge granted the motion, reasoning that the settlement number was likely more than Dalka could get at trial. Dalka contended that the court’s order deprived him of his right to a jury trial.
The court of appeals affirmed in an opinion written by Judge Hoover. First, Dalka waived his right to appellate review by failing to properly object to the order to compel and by not moving the trial court to reconsider (see ¶ 5). Nonetheless, the court of appeals elected to decide the issue. Case law established that Dalka waived his right to trial “when he applied for and received worker’s compensation benefits. As noted above, the statute provides that an employee’s claim is shared by a ‘compensation insurer who shall have paid or is obligated to pay a lawful claim.’ Wis. Stat. § 102.29(1)” (¶ 10). That statute and case law “‘[give] the trial court the right to settle a dispute between the two plaintiffs, as to whether or not a compromise settlement offered by the defendant should be accepted.’ Bergren [v. Staples], 263 Wis. at 485. This language does not differentiate between the plaintiffs, that is, the employee and the worker’s compensation insurer. Reading Bergren as a whole, we conclude its holding must be applied equally as against the employee or the worker’s compensation insurer. We are bound by that holding” (¶ 12).
Prospective Treatment Expenses – Retroactivity
Rock Tenn Co. v. LIRC, 2011 WI App 93 (filed 25 May 2011) (ordered published 29 June 2011)
Wasmund was injured while on the job and received worker’s compensation benefits. An administrative law judge later found that she was also entitled to prospective surgery expenses under Wis. Stat. section 102.18(1)(b).
The Labor and Industry Review Commission (LIRC) affirmed. It rejected the contention of her employer, Rock Tenn Co., that this statute, which became effective weeks after her injury, could not be retroactively applied. The circuit court affirmed LIRC’s decision.
The court of appeals affirmed in an opinion authored by Judge Anderson. LIRC’s interpretation of the statute was reasonable regardless of which level of deference was applied (see ¶ 8). LIRC reasonably concluded that section 102.18(1)(b) was a remedial or procedural statute (¶ 13). “Under Wis. Stat. § 102.42(1), Wasmund was and remains eligible for compensation for medical treatment. This is a substantive right that existed on December 11, 2001, when she suffered a work-related injury and, under Wis. Stat. § 102.03(4), Wasmund’s ‘right to compensation and the amount of the compensation’ is determined by § 102.42(1) (1999-2000), the version in effect on the date she was injured. Contrary to Rock Tenn’s argument, § 102.03(4) is not applicable. The method prescribed for enforcing her right to compensation is found in Wis. Stat. § 102.18(1)(b), which permits an employee entitled to treatment to seek to have the cost of treatment paid prospectively. Section 102.18(1)(b) presumes the ‘right to compensation’ and does nothing more than improve or facilitate her right to compensation by moving the time of payment of treatment expense from posttreatment to pretreatment” (¶ 15).
Nor did the retroactive application of the statute violate Rock Tenn’s constitutional rights. The statute “did not increase Rock Tenn’s liability by one cent, it only changed the timing of the payment of Wasmund’s treatment expenses” (¶ 18).