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    Wisconsin Lawyer
    December 01, 2013

    Court of Appeals Digest

    In this column, Profs. Daniel D. Blinka and Thomas J. Hammer summarize select published opinions of the Wisconsin Court of Appeals. Full-text decisions are linked below.

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


    Mutual Mistake – Frivolous Claim/Appeal

    Ivancevic v. Reagan, 2013 WI App 121 (filed 17 Sept. 2013) (ordered published 30 Oct. 2013)

    HOLDINGS: The home buyers’ claim for mutual mistake failed because the sellers never represented that the house was defect free; although this claim was “thin,” neither it nor an appeal narrowly limited to the mutual-mistake ruling was frivolous.

    SUMMARY: The plaintiffs leased a home with an option to purchase. They paid for various inspections, which raised no problems before they closed on the sale. Six months later, they discovered water problems allegedly caused by a defective ventilation system. The buyers sued the sellers claiming mutual mistake and breach of contract. The circuit court granted summary judgment in favor of the sellers.

    The court of appeals affirmed in an opinion authored by Judge Brennan. There was no basis for a mutual-mistake claim because the option to purchase never guaranteed that the residence would be defect free (see ¶ 17). And while the buyers lost on this claim, it had not been “continued frivolously,” as revealed by the trial judge’s extensive discussion of the claims (see ¶ 32). Nor was this appeal frivolous; the buyers narrowly crafted the issues for the court and while their argument was “not strong, it is not meritless” (¶ 33).

    Criminal Procedure

    Public Trial – Lay Opinions – Hearsay

    State v. Small, 2013 WI App 117 (filed 4 Sept. 2013) (ordered published 30 Oct. 2013)

    HOLDINGS: The defendant was not denied his right to a public trial or effective assistance of counsel when the judge excluded from the courtroom a man who threatened a prosecution witness and the defendant’s own lawyer declined the judge’s offer to hold an evidentiary hearing. Also, a police officer properly testified to his lay opinion about what was said on a poor-quality surveillance video, and defense counsel’s failure to object on hearsay grounds to testimony about a phone number did not prejudice the defendant.

    SUMMARY: A jury convicted Small for his role in an armed robbery that occurred after he pretended to be a customer at the victim’s store. Later investigation disclosed that the armed robber was Small’s cousin.

    Daniel D. BlinkaProf. Daniel D. Blinka, U.W. 1978, is a professor of law at Marquette University Law School, Milwaukee.

    Thomas J. HammerProf. Thomas J. Hammer, Marquette 1975, is a law professor and Director of Clinical Education at Marquette University Law School, Milwaukee.

    The court of appeals affirmed the conviction in an opinion written by Judge Fine. The issues on appeal implicated Small’s right to effective assistance of counsel. First, the circuit court did not deny Small his right to a public trial by excluding a man who threatened a prosecution witness in the hallway before she testified. The circuit court handled the issue “with aplomb and appropriate caution” (¶ 11). Only the person who uttered the threat was excluded; the judge offered to hold an evidentiary hearing but defense counsel declined, which in no way prejudiced Small (see ¶ 12).

    Second, a police officer properly offered lay opinion about what Small said during the robbery as recorded on a poor-quality surveillance video. Moreover, the jury also heard testimony by the store’s co-owner and listened to the recording (see ¶ 15). Regarding an ineffective-assistance-of-counsel claim, Small showed no “conceivable” prejudice.

    Third, trial counsel’s failure to object on hearsay grounds to a phone number related by a declarant before the robbery (which circumstantially linked Small to the robbery) in no way prejudiced Small because the number’s provenance could have been shown “in other ways” (¶ 17).

    Evidence – Plea Bargaining – Impeachment

    State v. Myrick, 2013 WI App 123 (filed 4 Sept. 2013) (ordered published 30 Oct. 2013)

    HOLDING: The defendant’s testimony at an accomplice’s preliminary hearing could not be used to impeach the defendant’s own testimony at his trial because the testimony was inadmissible under Wis. Stat. section 904.10.

    SUMMARY: A jury convicted the defendant of first-degree intentional homicide. When the defendant testified at trial, the prosecutor impeached him with preliminary-hearing testimony the defendant gave against an accomplice. At the time of the preliminary hearing, the defendant and the state were involved in plea bargain discussions, which later fell apart.

    The court of appeals reversed the defendant’s conviction in an opinion authored by Judge Fine. The opinion closely canvasses the case law and policy underlying Wis. Stat. section 904.10, which, among other things, excludes statements uttered in court in connection with an offer to the prosecution to plead guilty (see ¶ 6). The court held that the defendant made an offer to the prosecuting attorney, as contemplated by section 904.10, to plead guilty in exchange for concessions (see ¶ 7). Statements made on the record and in a letter revealed the plea bargaining.

    Moreover, the defendant’s testimony at the preliminary hearing fell within the meaning of statements made in court in connection with such an offer. The key was that “the plea-bargaining process was still ongoing” at the time he gave the testimony (¶ 10). “Indeed, … the parties could still have dickered over the sentencing recommendations and even the proposed charged concession because all that would have depended on Myrick’s value to the State’s pursuit of [the accomplice]” (¶ 10).

    Plea Hearings – Advising Defendant Regarding Deportation Consequences

    State v. Mursal, 2013 WI App 125 (filed 24 Sept. 2013) (ordered published 30 Oct. 2013)

    HOLDING: The deportation warning given by the circuit court substantially complied with the mandate of Wis. Stat. section 971.08(1)(c), and thus the defendant was not entitled to withdraw his guilty plea on the basis of a defective warning.

    SUMMARY: Wisconsin Statutes section 971.08(1)(c) provides that, before the court accepts a plea of guilty or no contest, it shall do the following: “Address the defendant personally and advise the defendant as follows: ‘If you are not a citizen of the United States of America, you are advised that a plea of guilty or no contest for the offense with which you are charged may result in deportation, the exclusion from admission to this country or the denial of naturalization, under federal law.’”

    In this case the court provided the following deportation warning to defendant Mursal, a Somali refugee: “The Court: You … need to know if you’re not a citizen of the United States, your plea can result in deportation, exclusion from admission to this country or denial of naturalization under federal law. Do you understand all that, sir?”

    The defendant sought to withdraw his guilty pleas to multiple felonies because the deportation warning given by the court did not track the language of Wis. Stat. section 971.08(1)(c) verbatim. The circuit court denied the motion. In a decision authored by Judge Curley, the court of appeals affirmed.

    Said the court, “[i]n the case before us, the statute’s purpose – to notify a non-citizen defendant of the immigration consequences of a criminal conviction – was undoubtedly effectuated, and the linguistic differences were so slight that they did not alter the meaning of the warning in any way; therefore, we conclude that the trial court did in fact properly warn Mursal of the consequences of his plea pursuant to Wis. Stat. § 971.08(1)(c). Because the trial court substantially complied with the mandate of § 971.08, Mursal is not entitled to withdraw his plea” (¶ 20).  

    Employment Law

    Contracts – Bonus

    Chapman v. B.C. Ziegler & Co., 2013 WI App 127 (filed 17 Sept. 2013) (ordered published 30 Oct. 2013)

    HOLDING: On summary judgment, an employee failed to raise an issue of fact that he was entitled to additional compensation under an “earned-incentive-compensation” provision for deals put together by other employees.

    SUMMARY: Chapman sued his employer, B.C. Ziegler, claiming he was entitled to a large bonus under an earned-incentive-compensation provision. The circuit court granted summary judgment to Ziegler.

    The court of appeals affirmed in an opinion written by Judge Fine. Essentially, Chapman contended that he was entitled to credit for various deals involving energy companies. The court held first that Chapman failedto show that these deals were “put together or even completed” primarily through his efforts (¶ 10). Contracts must be interpreted to avoid unreasonable and absurd results. To pay someone for doing “nothing” is absurd (see ¶ 11).

    Second, the court held that the contract required Chapman to show responsibility for the revenues he claimed under the earned-incentive-compensation provision. The record did not raise an issue of fact on this point (see ¶ 12). Indeed, the largest deal was itself a “done deal” before Chapmen was hired (see ¶ 13).

    Environmental Law

    Wetlands – Injunctions

    State v. CGIP Lake Partners LLP, 2013 WI App 122 (filed 10 Sept. 2013) (ordered published 30 Oct. 2013)

    HOLDING: In a situation in which an owner unlawfully built a road through wetlands, a circuit court should have granted an injunction requiring its removal unless compelling equitable reasons were demonstrated, which the owner failed to show.

    SUMMARY: A lakeshore property owner built a road to her home through wetlands. In earlier litigation, the court held that the property owner had misled the Wisconsin Department of Natural Resources (DNR) about the road’s necessity. The DNR ordered her to remove the road, which she did not do. The state filed this action seeking forfeitures and an injunction requiring removal of the road and restoration of the wetlands. The judge ordered the owner to pay more than $30,000 in forfeitures but did not order the road’s removal.

    The court of appeals reversed in an opinion written by Judge Stark. The standard for injunctions in cases like this arises from Forest County v. Goode, 219 Wis. 2d 654, 579 N.W.2d 715 (1998), a shorelands case that later cases have extended. Essentially, Goode holds that in cases involving the protection of navigable waters (here wetlands), an injunction remediating the violation should be granted unless compelling equitable reasons to the contrary are shown (see ¶ 23).

    Under this standard, the circuit court abused its discretion. Goode sets forth a rebuttable presumption in favor of the injunction, but the lower court imposed a burden on the state to prove environmental harm (see ¶¶ 25, 26). Moreover, some of its findings regarding compelling equitable reasons were unsupported by the evidence. For example, “the court repeatedly substituted its own lay opinions for undisputed expert testimony” (¶ 27). Finally, the court of appeals held that on remand the circuit court must grant the state’s injunction (see ¶ 40).  

    Municipal Law

    Counties and Towns – Zoning Authority Over Shorelands

    Hegwood v. Town of Eagle Zoning Bd. of Appeals, 2013 WI App 118 (filed 25 Sept. 2013) (ordered published 30 Oct. 2013)

    HOLDING: Towns do not have authority to regulate shorelands except where such regulation falls within an exception to this rule that is codified in Wis. Stat. section 59.692(2)(b).

    SUMMARY: This case concerns the statutory scheme for the regulation of shorelands. The issue was whether a town has concurrent zoning authority with the county over shorelands. The plaintiff argued that Wis. Stat. section 59.692 vests counties with the exclusive authority to zone shorelands in all unincorporated areas and that the town of Eagle zoning board of appeals therefore lacked the authority to enforce the town’s setback-zoning ordinance on the plaintiff’s shoreland property.

    The board countered that there is no specific statutory language prohibiting towns from adopting and enforcing zoning ordinances affecting shorelands and that the town of Eagle is permitted to do so pursuant to its village powers. On certiorari review of a decision by the board, the circuit court concluded that the board had no authority to enforce the town’s setback ordinance on the plaintiff’s shoreland property.

    In a decision authored by Judge Gundrum, the court of appeals affirmed the decision of the circuit court. It concluded that “[t]he plain language of the statutory scheme evinces that by enactment of Wis. Stat. §§ 281.31 and 59.692, the legislature intended that towns would not have authority to regulate shorelands except where such regulation fell within the language of § 59.692(2)(b), which is not the case here. That statutory scheme does not distinguish between towns with village powers and those without” (¶ 16).

    As for the exception in Wis. Stat. section 59.692(2)(b) noted above, the appellate court explained that “the legislature specifically established the circumstance in which town regulations affecting shorelands would have effect after enactment of a county shoreland zoning ordinance pursuant to § 59.692 – they would have effect if they were in existence before enactment of the county ordinance and were more restrictive than the county provisions affecting the same shorelands. The Board does not dispute that the town ordinance at issue in this case was adopted after, not before, the county’s shoreland zoning ordinance; therefore, the town ordinance does not fall within the class of regulations which are effective by operation of subsec. (2)(b)” (¶ 13). 

    Real Property

    Condominiums – Declarations – Voting Rights

    Northernaire Resort & Spa LLC v. Northernaire Condo. Ass’n Inc., 2013 WI App 116 (filed 17 Sept. 2013) (ordered published 30 Oct. 2013)

    HOLDING: Applying the provisions of the condominium declaration, the owner of unbuilt units was not entitled to vote those units in the affairs of the condominium association.

    SUMMARY: Northernaire of Deer Lake LLC recorded a condominium declaration on Aug. 30, 2006. The declaration subjected land in Oneida County to a 108-unit condominium. Only 45 units have been constructed. The condominium encountered financial trouble and, in 2009, the unsold interests in the condominium property were transferred in lieu of foreclosure to M&I Regional Properties. An assignment and acceptance of declarant’s rights accompanied the transfer. Under the assignment, M&I obtained all the declarant’s right, title, and interest. Northernaire purchased the property from M&I in 2010 and almost immediately the relationship between Northernaire and the condominium association became contentious. At the heart of this legal dispute is the issue of whether Northernaire is entitled to one vote for each of its 63 unbuilt units at meetings of the association. Inasmuch as the condominium is comprised of 108 units, this would give Northernaire control of the association.

    The condominium declaration provides that, with a limited exception, only owners of a physical unit are entitled to take part in voting concerning the affairs of the condominium association. The declaration defines a “unit” as a portion of a structure designed and intended for residential use. Northernaire contends that this definition conflicts with a broader definition of “unit” in the Condominium Ownership Act. See Wis. Stat. § 703.02(15).

    In a decision authored by Judge Mangerson, the court of appeals concluded that Northernaire is not entitled to vote concerning the affairs of the condominium association on behalf of units that do not meet the declaration’s definition of a “unit.”

    Said the court, “[t]he Condominium Ownership Act largely defers to the declaration to determine voting rights in an association…. Because the statute permits the declaration to allocate voting interests, there really is no conflict between the two authorities. The circuit court should have concluded that the declaration controls, under which only owners of a structural unit are entitled to vote” (¶¶ 17-18).


    Conversion – Elements

    Midwestern Helicopter LLC v. Coolbaugh, 2013 WI App 126 (filed 25 Sept. 2013) (ordered published 30 Oct. 2013)

    HOLDING: The defendant, a managerial employee of the plaintiff, committed conversion of a helicopter when he authorized a pilot to use the helicopter without the plaintiff-owner’s permission and the pilot then crashed and seriously damaged the helicopter.

    SUMMARY: Coolbaugh, a managerial employee of Midwestern Helicopters (Midwestern), allowed a pilot to take a helicopter on a skydiving job after Midwestern’s owner had established a policy that commercial events required his written permission. The pilot struck a power line and crashed the helicopter. Midwestern sued both Coolbaugh and the pilot for conversion and negligence. The theory of the case was that Coolbaugh and the pilot took the helicopter without permission from Midwestern, and property damage resulted.

    The pilot did not answer the complaint, and a default judgment was entered against him. The case against Coolbaugh was tried to the court, which ruled that Coolbaugh’s unauthorized permission to the pilot to take the helicopter out for the skydiving event, along with the resulting damage, constituted conversion. Coolbaugh appealed. In a decision authored by Judge Neubauer, the court of appeals affirmed.

    “Conversion is the intentional, unauthorized control of another’s chattel so as to interfere with the owner’s possessory rights. A person is liable for conversion when he or she (1) intentionally controls or takes property belonging to another, (2) without the owner’s consent, (3) resulting in serious interference with the owner’s rights to possess the property” (¶ 9). The appellate court concluded that the evidence supported the circuit court’s findings that all three elements of conversion were present.

    With regard to the third element the appellate court drew from the Restatement (Second) of Torts, § 228 (1965), to note that whether an unauthorized exercise of dominion constitutes conversion depends on the severity of interference with the owner’s right to control. “Here, Coolbaugh knew that [pilot] Orlos was taking the helicopter to an event that was prohibited by Parrish’s policy barring commercial events. Yet Coolbaugh gave Orlos permission to take the helicopter. When Orlos went to the prohibited event and crashed the helicopter, it was a conversion, whether or not Coolbaugh or Orlos was negligent with regard to the accident” (¶ 14).

    Coolbaugh argued that the circuit court “erred when it found that the conversion caused the crash” (¶ 15). The court of appeals disagreed. “First, there is no causation element in conversion; the conversion must result in interference with the owner’s rights to possess the property. Second, the trial court did not find that the conversion caused the crash. The trial court found that ‘there was a result of serious interference with the rights of the owner to possess the property’” (¶ 15) (citations omitted).

    Respondeat Superior – “Going and Coming” Rule

    Milwaukee Trans. Servs. Inc. v. Family Dollar Stores of Wis. Inc., 2013 WI App 124 (filed 17 Sept. 2013) (ordered published 30 Oct. 2013)

    HOLDING: A store employee who was asked to do a “bank run” on her day off was not acting within the scope of her employment when her car collided with another vehicle while she was on her way to the store.

    SUMMARY: Reyna, an assistant store manager, was called at home and asked to make a “bank run” by her manager. The store expected Reyna and other assistant managers to do this monthly. She was not paid for her time or mileage nor did the store dictate her route. While Reyna was driving to the store, her car collided with a bus. The bus company sued the store. The circuit court granted summary judgment dismissing the store, on grounds that Reyna was not within the scope of her employment when the accident occurred.

    The court of appeals affirmed in an opinion written by Judge Kessler. Relying on DeRuyter v. Wisconsin Electric Power Co., 200 Wis. 2d 349, 546 N.W.2d 534 (Ct. App. 1996), aff’d, 211 Wis. 2d 169, 565 N.W.2d 118 (1997), the court held “that an employer could only be found to be vicariously liable for an employee’s negligent acts while commuting to work ‘when the employer exercises control over the method or route of the employee’s travel to or from work’” (¶ 10).

    Reyna was responsible for her own transportation and her own travel route, and travel was not an “integral part of Reyna’s responsibilities, although the occasional [bank] run may have been” (¶ 12). The court declined to adopt exceptions based on an employee’s “special errand or mission.” It underscored that Reyna was not “on call” and could use any means of transportation (for example, a taxi) and any route she chose (¶ 16).

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