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    Wisconsin Lawyer
    April 01, 2013

    Court of Appeals Digest

    In this column, Prof. Daniel Blinka and Prof. Thomas Hammer summarize select published opinions of the Wisconsin Court of Appeals.

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

    Civil Procedure

    Arbitration – Pending Actions

    Payday Loan Store v. Krueger, 2013 WI App 25 (filed 23 Jan. 2013) (ordered published 26 Feb. 2013)

    Holding: When a lawsuit is pending, parties seeking to compel arbitration must do so in the existing suit, rather than by filing a separate action.

    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.

    Summary: This case involves separate but related lawsuits. In 2011, plaintiffs brought a class action against The Payday Loan Store (PLS). During the litigation, PLS withdrew its arbitration defense “with prejudice.” Later, an amended complaint added as named plaintiffs K and W, who refused to arbitrate their claims despite PLS’s demand that they do so. PLS then brought separate petitions against K and W seeking to compel arbitration. The circuit court dismissed both petitions because of the pending action. PLS appealed the dismissal of its petitions.

    The court of appeals affirmed in an opinion written by Reserve Judge Cane. The arbitration petitions raised the same issues as the underlying action, namely, “whether the claims against PLS should proceed in court or should instead be submitted to arbitration” (¶ 7). The circuit courts properly exercised their discretion. Nor did Wis. Stat. section 788.03, which provides that “the party aggrieved by the alleged failure, neglect or refusal of another to perform under a written agreement for arbitration may petition any court of record having jurisdiction of the parties or of the property for an order directing that such arbitration proceed as provided for in such agreement,” support PLS’s arguments, because the statute “is only available when an underlying lawsuit has not yet been filed” (¶ 9). Judicial economy demanded “that the party seeking to compel arbitration do so in the existing suit, rather than by filing a separate action” (¶ 11). PLS’s petitions made “little sense” (¶ 12).  


    Leases – Extensions – Assignees

    Gagliano & Co. v. OpenFirst LLC, 2013 WI App 19 (filed 8 Jan. 2013) (ordered published 26 Feb. 2013)

    Holding: A commercial lease, which included the landlord’s right to extend the term, was binding on various successor entities and assignees.

    Summary: Gagliano & Co. leased business space to various entities. The original lease, entered into in 2000, gave Gagliano the right to extend the lease for four more years, subject to conditions. Over the years, the leases were assigned to other parties, including successors, and extended by Gagliano. This litigation involves Gagliano’s efforts to enforce the lease against four parties. The circuit court dismissed Gagliano’s claims.

    The court of appeals reversed in an opinion authored by Judge Fine. The opinion opens with an extensive review of the key commercial documents. Despite this “veneer of complexity,” the court’s “lengthy factual review has been but an essential prelude to, thankfully, a shorter legal analysis” (¶ 26). Gagliano’s claims survived based on a close reading of the documents.

    The opinion, which necessarily is fact intensive, turns on well-accepted principles of contract law, including the parties’ duty to read and the court’s duty to construe a contract’s terms as it stands even though the parties assert a different understanding (see ¶ 27). “Thus, a party’s written acceptance of a lease ‘binds the assignee to perform all the provisions of the lease – that is his contract – for the period he occupies the premises,’ even though the ‘acceptance appears in a document other than the lease or that lessors have consented to the assignment by conduct rather than in writing,’ and even though ‘the lease does not contain a provision making the lease binding on assignees.’ We assess against this background the documents in this case. They are dispositive” (¶ 28).

    A 2005 notice of lease extension bound various successor entities. And Quad/Graphics, a sophisticated business entity, was also bound under terms of a “purported sublease.” The opinion contains a detailed discussion of the applicable documents. 

    Criminal Law

    Firearms – Attempted Possession of Firearm by a Felon

    State v. Henning, 2013 WI App 15 (filed 31 Jan. 2013) (ordered published 26 Feb. 2013)

    Holding: The offense of attempted possession of a firearm by a felon is a crime known to law.

    Summary: The defendant was convicted by a jury of “attempted possession of a firearm by a felon” (a combination of Wis. Stat. sections 941.29(2) and 939.32). The principal issue on appeal was whether this is a crime known to law. Put another way, does Wisconsin recognize the crime of a convicted felon attempting to possess a firearm?

    In a decision authored by Judge Higginbotham, the court of appeals held that attempted possession of a firearm by a felon is a crime recognized under Wisconsin law (see ¶ 16). Under Wis. Stat. section 939.32(1) (the attempt statute), all felonies may be charged as attempted crimes, except for felonies excluded by statute or by case law (see ¶ 13). As examples of the latter, the court cited the crimes of felony murder and reckless homicide, which courts have concluded do not allow for “attempt” liability because of their inherent nature (see ¶ 10). “Possession crimes do not fall into that category of crimes where it is illogical to charge the crime as an attempt” (¶ 10). The crime of possession of a firearm by a felon has two elements: 1) the defendant has been convicted of a felony, and 2) the defendant possessed the firearm. “‘Possession’ means that the defendant knowingly had the firearm under his or her actual control” (¶ 14). “Unlike felony murder or reckless homicide, or other crimes with no state of mind element, the felon in possession of a firearm offense requires proof of knowledge. This makes the offense amenable … to be charged as an attempted crime” (id.).

    The court further noted that “it would be absurd to conclude that the legislature did not intend to prohibit felons from attempting to possess firearms. The legislature’s purpose in prohibiting felons from possessing firearms was to protect public safety and to control the conduct of felons because felons are more likely to misuse firearms. Obviously, prohibiting felons from attempting to obtain firearms furthers this public safety purpose” (¶ 15) (internal quotations and citation omitted).

    Criminal Procedure

    Bail and Conditions of Release – Drug or Alcohol Abuse Treatment as Condition of Release for Repeat OWI Offenders

    State v. Wilcenski, 2013 WI App 21 (filed 16 Jan. 2013) (ordered published 26 Feb. 2013)

    Holding: A court’s individualized determination that a repeat OWI offender participate in a pretrial drug or alcohol abuse treatment program as a condition of bail does not violate the defendant’s right to privacy or the right to be free from unreasonable searches.

    Summary: Every person who is charged in Waukesha County with operating a motor vehicle while under the influence of an intoxicant or with a prohibited alcohol concentration (collectively, OWI) as a second or subsequent offense and who lives within a specific 10-county area is required to undergo drug or alcohol abuse treatment as a condition of bail. Treatment and monitoring are imposed regardless of the defendant’s individual circumstances. Participation in the pretrial program involves reporting to a caseworker twice a week, submitting to random tests for drugs and alcohol, and participating in educational classes or treatment related to the use of drugs or alcohol. The pretrial program may disclose information to the court and other parties regarding the defendant’s treatment provider, level of treatment, number of positive or negative drug or alcohol tests, and attendance at self-help and treatment meetings (see ¶ 5).

    Wilcenski challenged this condition of his release, contending that it violates his constitutional rights to privacy and to be free from unreasonable searches. In a decision authored by Judge Reilly, the court of appeals concluded that “a court may require participation in the pretrial program as a condition of release without violating a defendant’s constitutional rights” (¶ 10).

    With respect to the privacy challenge and the defendant’s argument that participation in the pretrial program requires that he give up his right to the confidentiality of his health-care and treatment records, the court concluded that “[t]he only medical-related information gathered by the pretrial program that may be disclosed publicly (i.e., to the court) are the number of positive or negative drug and alcohol tests registered by the defendant during the course of treatment, the name of the defendant’s treatment provider, and level of treatment received. We see no violations of a defendant’s right to privacy posed by such disclosures. A court has the authority to receive information on whether the defendant has adhered to an appropriately applied condition, such as a prohibition on the consumption of drugs or alcohol and drug or alcohol treatment” (¶ 13). The appellate court also concluded that requiring drug testing as a condition of release imposed on an individual basis does not violate the Fourth Amendment (see ¶¶ 14-15).

    Finally, the court considered the validity of requiring participation in the pretrial program by all repeat OWI offenders. It concluded that “a circuit court that follows a blanket policy that mandates participation in a pretrial program as a condition of release for all persons based on only one factor (the nature of the offense), without making an individualized determination that that condition is appropriate, erroneously exercises its discretion in setting conditions of bail” (¶ 18). In this case the circuit court did not erroneously exercise its discretion in imposing conditions of bail on the defendant because it made an individualized determination that treatment and monitoring were appropriate conditions of release for the defendant (see id.).

    Vehicle Stops – Amount of Evidence Required to Justify Stop

    State v. Brown, 2013 WI App 17 (filed 15 Jan. 2013) (ordered published 26 Feb. 2013)

    Holding: The police lacked probable cause to stop a vehicle when the basis for the stop was a mistaken belief that the vehicle’s tail lamps were defective.

    Summary: The defendant was a passenger in a vehicle that was stopped by police officers for what the officers believed was a defective tail lamp. A subsequent search of the vehicle revealed the presence of a revolver, and the defendant was charged with being a felon in possession of a firearm. He moved to suppress the evidence recovered from the vehicle, claiming that it was discovered as the result of an unlawful stop of the vehicle. The circuit court denied the motion, and the defendant pleaded guilty. In a decision authored by Judge Brennan, the court of appeals reversed.

    “A traffic stop is generally reasonable if officers have reasonable suspicion that a violation has been or will be committed or if they have probable cause to believe a traffic violation has occurred. Reasonable suspicion is based upon specific and articulable facts that together with reasonable inferences therefrom reasonably warrant a suspicion that an offense has occurred or will occur. It is insufficient to support an arrest or search, but permits further investigation. Probable cause is a common sense test that looks to the totality of the circumstances facing the officer at the time of the arrest to determine whether the officer could have reasonably believed the defendant had committed, or was committing, an offense” (¶ 14) (citations omitted).

    In this case, the officers saw what they thought was an equipment violation on the vehicle in which the defendant was a passenger. They did not act on a suspicion that warranted further investigation but on their observation of a violation being committed in their presence (see ¶ 15). As such, the issue before the appellate court was whether the officers had probable cause that a law had been broken supporting the stop, not whether there was reasonable suspicion to support the stop (id.).

    The court concluded that the officers lacked probable cause at the time of the stop; they were operating under a mistaken impression of what the law requires with respect to vehicle tail lamps, because the lamps on the vehicle in question conformed to the requirements of the Motor Vehicle Code (see ¶ 21). Said the court, “a lawful stop cannot be predicated on a mistake of law” (id.) (citation omitted).

    Search and Seizure – Probable Cause Searches of Vehicles

    State v. Lefler, 2013 WI App 22 (filed 23 Jan. 2013) (ordered published 26 Feb. 2013)

    Holding: The automobile exception to the warrant requirement justified the search of the defendant’s trunk following his arrest.

    Summary: Police officers searched the trunk of the vehicle Lefler had been driving after they arrested him for operating while under the influence of an intoxicant (OWI). At the time of the arrest, Lefler was a known suspect in recent burglaries and was in possession of several tools suitable for breaking into buildings (screwdriver, pliers, wrenches, and another prying-type device). The search of Lefler’s trunk uncovered property that police believed had been stolen. Lefler subsequently confessed to several burglaries and was charged with burglary, attempted burglary, possession of burglarious tools, and OWI.

    Lefler moved to suppress the evidence obtained as a result of the search of his trunk, arguing that the police officers did not have justification to search the trunk incident to the OWI arrest. The circuit court denied the motion, and Lefler pleaded guilty. In a decision authored by Judge Reilly, the court of appeals affirmed.

    Although the arguments of the parties largely focused on whether the trunk search was a lawful search incident to arrest, the appellate court declined to analyze the search under that theory. Rather, it found justification for the search under the automobile exception to the warrant requirement, because the officer had probable cause to believe that he might find evidence supporting a charge of possession of burglarious tools or other burglary-related crimes in Lefler’s vehicle. And, if probable cause justifies the search of a lawfully stopped vehicle, it justifies the search of every part of the vehicle and its contents that may conceal the object of the search (see ¶ 11).

    In this case, “Lefler was a known suspect in recent burglaries. The officer had prior dealings with Lefler and believed that Lefler had monetary issues that would motivate him to commit the burglaries. The officer also knew that Lefler was not employed in an occupation that would require him to possess such tools, and he had reason to doubt the story that Lefler gave him for why he was carrying such tools late at night. Considering the totality of the circumstances, a reasonable person could have an honest belief that evidence of burglary-related crimes might be found in Lefler’s vehicle. Therefore, the officer had probable cause to search Lefler’s trunk, and the circuit court was correct in declining to suppress evidence recovered as a result of the lawful search” (¶ 13).

    Family Law

    Termination of Parental Rights – Jury Trial Waiver – Grounds

    Racine Cnty. v. Latanya K., 2013 WI App 28 (filed 11 Jan. 2013) (ordered published 26 Feb. 2013)

    Holding: A jury waiver in a termination of parental rights case was valid even absent a personal colloquy by the trial judge; adequate grounds supported the termination of the mother’s parental rights.

    Summary: Latanya K. waived her right to a jury trial in a termination of parental rights (TPR) action. She also admitted to “child abuse” for having sexually assaulted a 13-year-old boy and admitted that her children were in need of protection and services (CHIPS). The circuit court terminated her parental rights. Latanya then moved to withdraw her admissions.

    The court of appeals affirmed in an opinion authored by Chief Judge Brown. First, the jury-trial waiver was valid even though the trial judge did not engage Latanya in a personal colloquy. She had consulted with counsel and waived a jury trial for “intelligent, strategic reasons” (¶ 20). “[N]o provision of the federal or state constitutions nor Wis. Stat. § 48.22 mandates that a parent’s waiver of the right to a jury trial on the grounds must be on the record during a personal colloquy with the judge” (¶ 21).

    Clear and convincing evidence supported the grounds for the TPR order. The court held that Latanya committed child abuse by having sexual contact with a 13 year old, a crime that by definition “injured” the boy (see ¶ 22). A factual basis also supported the finding on the CHIPS ground. Latanya stipulated to these facts and a parole officer testified that she remained “angry and uncooperative” (¶ 26). Finally, the interests of justice did not warrant a new trial before a jury because it was “inconceivable” a jury would have reached a different result (¶ 27).


    Coverage – Advertising Injuries

    Air Eng’g Inc. v. Industrial Air Power LLC, 2013 WI App 18 (filed 3 Jan. 2013) (ordered published 26 Feb. 2013)

    Holding: Under the four corners of a complaint, an insurer had a duty to defend against allegations of advertising injuries involving the Internet.

    Summary: Air Engineering sells air-compressor replacement parts. Two former employees formed Industrial Air Power LLC (Industrial), which soon drew long-time customers from Air Engineering. The latter sued Industrial, alleging trade secret misappropriation, breach of contract, and other claims rooted in allegations that the two former employees had misappropriated information contained in Air Engineering’s Proprietary Systems and Website Source Code (see ¶ 7). Industrial’s insurer, Acuity, intervened. The circuit court ruled, however, that Acuity had no duty to defend or indemnify based on the claims.

    The court of appeals reversed in an opinion written by Judge Neubauer. Acuity had a duty to defend based on the four corners of the complaint. First, the complaint alleged a covered offense under the policy’s advertising injury section, which covered “an advertising injury” caused by the use of “another’s advertising idea” (¶ 13). Here, the advertising related to the Internet. “Reading the complaint liberally, Air Engineering’s system ‘is an idea for calling public attention to a product or business, especially by proclaiming desirable qualities,’ in this case, suitability to the customer’s needs, ‘so as to increase sales or patronage.’ Industrial’s use of the Internet Advertising System … is ‘use of another’s advertising idea’” (¶ 17).

    Second, the complaint alleged that Industrial engaged in advertising activity when it used the “Internet Advertising System” that belonged to Air Engineering (see ¶ 19). Third, the complaint alleged a causal connection between Industrial’s advertising activity and the injury to Air Engineering. “Assuming Industrial used Air Engineering’s advertising system to target potential customers, it is reasonable to infer that such usurped techniques did draw customers away from Air Engineering” (¶ 21).

    Finally, the court rejected Acuity’s contention that the “knowing-violation” exclusion precluded coverage. “The inclusion in the complaint of an allegation of willful and malicious conduct does not relieve Acuity of its duty to defend” (¶ 25).

    Tortfeasor – Permissive User

    Blasing v. Zurich Am. Ins. Co., 2013 WI App 27 (filed 3 Jan. 2013) (ordered published 26 Feb. 2013)

    Holding: A tortfeasor may be a permissive user of the insured’s vehicle, and thus be a person whom the insurer has a duty to defend.

    Summary: Blasing bought lumber at a Menards store. She was injured as a result of the negligent actions of a Menards’ employee who loaded the lumber into Blasing’s personal vehicle. Although Menards is covered by a commercial general liability policy through Zurich, it tendered its defense to American Family, Blasing’s insurer, on the theory that the negligent employee was nonetheless a permissive user of the insured vehicle. The circuit court granted Summary judgment to American Family, finding it had no duty to defend Menards. 

    The court of appeals reversed in an opinion authored by Judge Lundsten. Although the court’s analysis centered on the omnibus statute, Wis. Stat. § 632.32, the result was the same under the insurance policy’s language (see ¶¶ 11, 31). The omnibus statute mandates that additional vehicle users receive the same protection afforded the named insured, effectively imposing a permissive-user requirement (see ¶ 16). Moreover, it broadly reaches “any other use of the vehicle.” Because the insured would have been “using” her truck if she had loaded the lumber herself, the negligent Menards’ employee was a permissive user because the employee had the insured’s consent to load the truck (see ¶ 19).

    The court rejected arguments to the effect that this led to an “absurd” result. “The proposition that policyholders pay for insurance that is sometimes used to, in effect, assist a permissive user tortfeasor is nothing unusual” (¶ 21). “What is left of American Family’s absurdity argument is simply the abstract idea that it is unfair or unexpected that an injured policyholder bringing suit against a tortfeasor would face an attorney supplied by her own insurance company, and that an eventual payout might come from her insurer. This result may seem odd to some, but it does not rise to the level of being unreasonable or absurd” (¶ 30). The legislature is free, of course, to amend the statute.

    UM Coverage – Stacking – “Antistacking” Statutes

    Belding v. Demoulin, 2013 WI App 26 (filed 16 Jan. 2013) (ordered published 26 Feb. 2013)

    Holding: A statute in effect in Wisconsin from 2009 to 2011 permitted stacking of uninsured-motorist insurance coverage.

    Summary: Belding was seriously injured in a car accident caused by an intoxicated individual driving an uninsured vehicle. Belding’s vehicle carried uninsured-motorist (UM) coverage of $100,000 per person issued by State Farm. In light of Belding’s serious injuries, Belding sought to stack another $100,000 in UM coverage from a policy on a different vehicle, which State Farm refused to do. The circuit court ruled in State Farm’s favor based on the policy’s “drive other car exclusion.”

    The court of appeals reversed in an opinion written by Judge Neubauer. When the accident occurred, in 2009, a short-lived statute barred antistacking exclusions, including drive-other-car exclusions, relating to UM coverage. Although repealed by the legislature in 2011, the bygone statute nonetheless permitted the Beldings to stack their two UM policies. The opinion lays out the legislature’s odyssey among prostacking and antistacking statutes from 2009 to 2011, including a gubernatorial veto of an attempted rollback (see ¶¶ 11-12, 16).

    “In conclusion, the law in place from November 1, 2009, until November 1, 2011, is that ‘drive other car’ exclusions during that period could not prevent insureds from stacking together their UM coverage limits for up to three vehicles owned and insured by the same insured” (¶ 21).  

    Coverage – Non-trucking Use

    Casey v. Smith, 2013 WI App 24 (filed 15 Jan. 2013) (ordered published 26 Feb. 2013)

    Holding: A non-trucking-use insurance policy applied to a situation in which an accident occurred when the truck was being driven to a repair shop for nonessential maintenance.

    Summary: Zeverino leased his truck and services to Taylor Trucking (Taylor). Their agreement set forth their mutual duties, including insurance and maintenance. Great West insured the truck under a commercial automobile policy issued to Taylor. Zeverino carried a non-trucking-use policy issued by Acceptance. While driving the truck to a repair shop on a day that he was not working, Zeverino was involved in an accident. A dispute arose between Great West and Acceptance over whether Zeverino was operating the truck “in the business of” Taylor when the crash occurred. The trial judge ruled in favor of Great West.

    The court of appeals affirmed in an opinion authored by Reserve Judge Cane. The court rejected Acceptance’s contention that two exclusions eliminated coverage under its policy. First, because the truck repairs were not necessary for Zeverino to continue operating the truck for Taylor’s business, “the repairs did not further Taylor’s commercial interests, and Zeverino was not acting ‘in the business of’ Taylor at the time of the accident” (¶ 23). The court also rejected arguments to the effect that Zeverino was contractually obligated to maintain the truck or required to do so by federal regulations (see ¶¶ 27-28).

    A second exclusion was inapplicable because the truck was not being used to “carry property” when the accident happened and the maintenance was not necessary for it to carry property (see ¶ 33). Finally, the Great West policy did not apply because Zeverino was not acting “in the business of” Taylor at the time the accident occurred.

    Jury Trials

    Seating of an Unsummoned Juror – Conviction of Defendant Upheld

    State v. Turner, 2013 WI App 23 (filed 23 Jan. 2013) (ordered published 26 Feb. 2013)

    Holding: The defendant’s conviction was not undermined by the seating of a juror who had the same name and address as a summoned juror but who himself had not actually been summoned for jury duty.

    Summary: John P. Smith (the father) and his adult son John P. Smith (the son) lived in the same residence in Walworth County. The county sent a summons to “John P. Smith” for jury duty. Because the father had recently served jury duty, he and his son assumed that the summons was for the son. The son reported to court and he served on a jury that convicted the defendant, Turner. The jury summons was actually for the father. (The court of appeals used these names as illustrations; they are not the real names of the individuals involved in this case.)

    Turner argued on appeal that he is entitled to a new trial on grounds that his constitutional rights to an impartial jury and due process were violated by the seating of a juror who had not been summoned for service and who did not disclose that fact to the court. In a decision authored by Judge Reilly, the court of appeals affirmed the conviction.

    Said the court, “[t]he fact is that ‘John P. Smith’ who lived at the address listed in the summons appeared for jury duty and never misrepresented who he was. The fact that the clerk’s office meant to summon a different ‘John P. Smith’ at the same address does not make the son [who otherwise was qualified for jury service] an improper juror” (¶ 7). “Like the circuit court, we do not see what difference the innocent error of the son serving instead of his father would have made on the outcome of this case. Turner may not rely on ‘merely speculative or hypothetical’ theories of how he might have been harmed by the error…” (¶ 9). At a hearing on Turner’s postconviction motion, he did not have the father or the son testify to show how or why Turner would have struck the son from the panel had he known the father was the true summoned juror.

    The appellate court also rejected Turner’s argument that the son, in not volunteering his doubts about whether he had been summoned, demonstrated a “lack of candor.” A party seeking to overturn a verdict and receive a new trial based on lack of candor by a juror at voir dire must show that the juror was biased against that party (see ¶ 10). In this case, the court was “not persuaded that Turner’s tenuous argument for ‘lack of candor’ supports a new trial when Turner alleges no bias, untruthfulness, or even innocent misstatement by the son” (id.).

    Motor Vehicle Law

    OWI – Repeat Offenders – Proof of First OWI Offense Not Required at Trial of Subsequent OWI Offense

    State v. Verhagen, 2013 WI App 16 (filed 23 Jan. 2013) (ordered published 26 Feb. 2013)

    Holding: The state is not required to prove the elements of an underlying first-offense operating while intoxicated (OWI) conviction at the trial of a defendant charged as a repeat OWI offender.

    Summary: In Wisconsin, violations of the OWI statute are punishable according to the number of prior such offenses. A first offense is a noncriminal forfeiture violation; subsequent offenses are crimes. In these consolidated cases, the defendants were charged as repeat OWI offenders. On appeal, they contended that the circuit court erroneously denied their pretrial motions seeking orders requiring the state to prove before the jury and beyond a reasonable doubt all elements of their first-offense OWI convictions, which were being used to enhance the penalties for their subsequent OWI crimes.

    In a decision authored by Judge Mangerson, the court of appeals concluded that in a prosecution for a subsequent OWI-related offense, the state is not required to prove the elements of an underlying first-offense OWI to a jury beyond a reasonable doubt when the first offense is the basis for penalty enhancement of subsequent OWI offenses (see ¶ 1). In so Holding, the court rejected the appellants’ argument that Wis. Stat. section 343.307(1), which describes the convictions that must be counted when determining the penalty for drunk driving, is unconstitutional as applied to them because it required the courts to count civil convictions obtained without the guarantees of a jury trial or criminal burden of proof (see ¶ 32).

    Real Property

    Eminent Domain – Valuation – Evidence – Experts

    Savage v. American Transmission Co., 2013 WI App 20 (filed 16 Jan. 2013) (ordered published 26 Feb. 2013)

    Holding: In an eminent domain proceeding, “aerial rights” extended to the ground; the owners’ experts should have been permitted to testify to “injuries” to the land as well as fair market value; and the expert-witness privilege precluded plaintiffs from calling an expert witness retained by the condemnor who refused to testify.

    Summary: In 2007, American Transmission Co. (ATC) sought a supplemental easement of 20 feet intended for an expanded transmission line. Unable to negotiate a price, ATC took the easement through its eminent domain power. The owner, however, demanded a jury trial on the issue of the easement’s value. The trial judge granted Summary judgment to ATC, ruling that testimony by the owner’s appraisal experts was irrelevant and blocking the owner’s attempt to call an ATC expert.

    The court of appeals reversed in an opinion written by Judge Reilly. First, the circuit court misconstrued the easement as extending only to “aerial rights.” The express written easement “says otherwise” (¶ 12). It provides that ATC’s “aerial rights” can be enforced against the owner “all the way down to – and below – ground level. We fail to see a distinction for a taking of ‘only aerial rights’ when those ‘aerial rights’ encompass the magma of the earth to the heavens” (¶ 13). The trial judge should have permitted a jury to consider the easement’s language, not ATC’s intentions.

    The trial judge also erred by excluding the owner’s expert testimony as irrelevant. “Any factor related to an easement condemnation that affects fair market value of property and that could influence the decision of a prospective buyer should be considered in valuation” (¶ 16). The owner is entitled to recover not only loss of fair market value, but also “injury” to the remaining property. “The jury must consider the most injurious use [by ATC] of the property reasonably possible” (id.).

    Finally, the circuit court properly refused to allow the owner to call ATC’s reluctant valuation expert, who refused to testify on behalf of the owner. The court of appeals held that Wisconsin’s expert privilege rule, the so-called Alt rule, is not restricted to medical testimony or medical malpractice cases. Nor did the voluntary exchange of expert reports “open the door to an adverse examination of an expert witness in the absence of a showing of necessity” (¶ 20).

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