Family Law

Termination of Parental Rights – Termination of Grounds Phase Without Giving Respondent Opportunity to Present Case – Structural Error

State v. C.L.K., 2019 WI 14 (filed 19 Feb. 2019)

HOLDING: The circuit court committed structural error when it granted a directed verdict in the grounds phase of a termination of parental rights bench trial without giving the respondent parent an opportunity to present his own case in chief.

SUMMARY: The state petitioned the circuit court to terminate the parental rights of C.L.K. (hereinafter Mr. K.). Mr. K. contested the state’s allegations. Mr. K. waived a jury trial, and the case proceeded as a bench trial. During the grounds phase of the proceedings, the state called Mr. K adversely as its only witness. Mr. K.’s lawyer cross-examined Mr. K. during the state’s case in chief. After the state rested, Mr. K.’s lawyer asked that he be allowed to “put my client on the stand and finish our side of the case.”

Before he could do so, the guardian ad litem moved the court for a directed verdict, arguing that the state had proved adequate grounds for terminating Mr. K.’s parental rights. The circuit court granted the motion and found Mr. K. to be an unfit parent on the basis of abandonment of his children. The court then proceeded to the disposition phase of the case and permanently terminated Mr. K.’s parental rights to his children.

Mr. K. appealed. He claimed that the circuit court’s decision in the grounds phase of the trial that he was an unfit parent before he could present his case to the court violated his due-process rights. The state admitted that it was error for the circuit court to direct a verdict without giving Mr. K. a chance to present his case.

In an unpublished decision, the court of appeals affirmed. It concluded that the circuit court’s error was harmless because the evidentiary record (to which Mr. K. was unable to contribute except through the state’s adverse examination and his own counsel’s cross-examination) overwhelmingly established grounds for termination of Mr. K.’s parental rights.

In a majority decision authored by Justice Kelly, the supreme court reversed the court of appeals. It concluded that “a proceeding in which a court decides a disputed matter in favor of the State, before allowing the respondent the option of presenting his case-in-chief, adversely affected the very framework within which the trial is supposed to take place. Consequently, the error so permeates the proceeding that it is incapable of producing a constitutionally-sound result. The error is, therefore, structural” (¶ 16).

The consequence of structural error is “an automatic new trial” (¶ 1). This type of error is not susceptible to “harmless-error” review (id.). The court declined the state’s request that the trial court be permitted to resume the trial at the point it left off in the event the supreme court reversed the court of appeals. “[T]here must be a new trial ab initio” (¶ 36 n.16).

Chief Justice Roggensack, joined by Justice Ziegler, dissented. While agreeing that it was error for the circuit court to grant the directed verdict, they believed that the error was not structural and that it was thus subject to a harmless-error analysis (see ¶ 39).

Insurance

Duty to Defend – Commercial General Liability Policies – Exclusions

West Bend Mut. Ins. Co. v. Ixthus Med. Supply Inc., 2019 WI 19 (filed 28 Feb. 2019)

HOLDING:An insurer had a duty to defend its insured under a commercial general liability (CGL) policy.

SUMMARY: A medical supply company, Ixthus, was covered under a CGL policy issued by West Bend Mutual Insurance Co. Abbott Labs sued Ixthus and more than 100 other companies on multiple claims involving their advertising and distribution of blood-glucose test strips. Ixthus tendered its defense to West Bend, which denied coverage. The insurer then filed this declaratory judgment action to resolve whether it had a duty to defend or to indemnify Ixthus. The circuit court granted summary judgment in favor of West Bend. In an unpublished opinion, the court of appeals reversed, finding that the “knowing violation” exclusion did not apply to several claims.

The supreme court affirmed the court of appeals in a unanimous opinion authored by Justice R.G. Bradley. The “sole issue” concerned whether West Bend had a duty to defend under state law. A duty to defend is “necessarily broader” than the duty to indemnify (¶ 10). Advertising-injury cases present special circumstances governed by three questions: “(1) Does the complaint allege a covered offense under the advertising injury provision? (2) Does the complaint allege that the insured engaged in advertising activity? and (3) Does the complaint allege a causal connection between the plaintiff's alleged injury and the insured's advertising activity?” (¶ 12).

If all three conditions are met, the court next considers policy exclusions. If coverage is apparent for even one of the claims, the insurer has a duty to defend on all claims (see ¶ 14). Because the answers to questions 1 and 2 were clearly “yes” in this case, the court focused on the third question concerning a causal nexus. Applying the facts, the court also held that causation had been adequately alleged (see ¶ 21).

The court then considered and rejected several proffered exclusions. First, the knowing violation exclusion, which had “eluded review” by the supreme court, did not apply to Lanham Act claims based on strict liability. “Unless an exclusion knocks out every pleaded claim, leaving no potentially covered advertising-injury claim for which the insured could be liable, the duty to defend remains” (¶ 30). The court discussed such claims and the facts in some detail.

Second, the “criminal acts” exclusion also did not preclude all coverage because the complaint “alleges claims that are not dependent on a showing of criminal conduct” (¶ 39).

Justice Ziegler did not participate in this decision.

Jurisdiction

Supervisory Writs – Stays – Arbitration

State ex rel. CityDeck Landing LLC v. Circuit Court for Brown Cty., 2019 WI 15 (filed 21 Feb. 2019)

HOLDING: The circuit court lacked authority to issue an order staying arbitration until it had decided an insurance coverage issue.

SUMMARY: The Brown County Circuit Court ordered the private arbitration of a construction dispute stayed until it could decide an insurance coverage dispute between one of the contractors connected to the arbitration and the contractor’s insurer. A petition was then submitted to the court of appeals seeking a supervisory writ to vacate the circuit court’s stay order. The court of appeals construed the petition as an appeal from a nonfinal order and denied it. A petition for a supervisory writ was then filed with the supreme court, which accepted jurisdiction over the petition.

In an opinion authored by Justice R.G. Bradley, the supreme court held that the circuit court lacked authority to issue the order staying arbitration until it resolved the coverage issue. “For the sake of clarity,” the court extensively reviewed the history of “supervisory writs” in Wisconsin, which, however, provided “no clear answers” regarding the scope of the term “supervisory writ” (¶¶ 5, 18). Later cases revealed still other “unexplained discrepanc[ies]” that “eroded any distinction between jurisdictional and non-jurisdictional categories of error” (¶¶ 27-28).

The court held that the power invested in the supreme court by the Wisconsin Constitution may be used only in “extraordinary circumstances” (¶ 29). Parties seeking the issuance of a supervisory writ must satisfy a four-factor test: “(1) a circuit court had a plain duty and either acted or intends to act in violation of that duty; (2) an appeal is an inadequate remedy; (3) grave hardship or irreparable harm will result; and (4) the party requested relief promptly and speedily” (¶ 30) (internal quotations and citations omitted).

Applying this test to the facts, the court held that all four factors had been met (see ¶ 43). It concluded that the stay order must be vacated (see ¶ 1).

Justice A.W. Bradley dissented, joined by Justice Abrahamson. “Ignoring” the admonishment that supervisory writs are an “extraordinary and drastic remedy,” “the majority greatly expands the application of our supervisory writ jurisprudence. Throwing caution to the wind, it elevates jurisdictional errors above all others as deserving of special treatment under Wisconsin’s supervisory writ procedures” (¶ 46).

Justice Dallet withdrew from participation in this decision.

Juvenile Law

Delinquency Proceedings – Juvenile Court’s Power to Reexamine Competency When Juvenile Has Been Found Incompetent and Not Likely to Become Competent Within Statutory Time Frame

State v. A.L., 2019 WI 20 (filed 7 March 2019)

HOLDINGS: 1) A circuit court can resume suspended juvenile delinquency proceedings to reexamine the competency of a juvenile who was initially found not competent and not likely to become competent within statutory time limits. 2) The expiration of a juvenile in need of protection or services (JIPS) order had no bearing on the circuit court’s competency to proceed with the respondent’s delinquency proceedings.

SUMMARY: The state filed a juvenile delinquency proceeding against A.L. in 2012 when A.L. was 15 years old. Defense counsel challenged A.L.’s competency to proceed. Two psychologists found that A.L. was not competent and not likely to become competent within the statutory time frame.

The circuit court agreed. Pursuant to Wis. Stat. section 938.30(5)(d), it suspended the delinquency proceedings, entered a JIPS order, and placed A.L. in a residential treatment center. The JIPS order was extended, and it expired in March 2015.

Later in 2015, A.L. was found competent to proceed in other cases. The state then moved for reconsideration of A.L.’s competency in the 2012 delinquency case. The circuit court denied the motion, holding that under the circumstances of this case, in which A.L. initially was found not competent to proceed and unlikely to become competent, the statute cited above did not provide a procedure for reinstating the suspended delinquency proceedings. In a published decision, the court of appeals reversed the circuit court. See 2017 WI App 72.

In a majority opinion authored by Justice Dallet, the supreme court affirmed the court of appeals. It concluded that “the language of Wis. Stat. § 938.50(5), read in conjunction with the language of ch. 938, allows a circuit court to resume delinquency proceedings that were suspended because a juvenile was initially found not competent to proceed under § 938.50(5)(d) and not likely to become competent within the statutory time limits” (¶ 23). The court further held that “the expiration of A.L.’s accompanying JIPS order in March 2015 has no bearing on the circuit court’s competency to proceed with A.L.’s delinquency proceedings” (¶ 27).

A.L. is now an adult. In a footnote, the court indicated that “[i]f A.L. is ultimately found competent, the circuit court could then resume the proceedings in the … 2012 juvenile delinquency case. The circuit court would then have two options: dismissal of the action with prejudice or waiver of jurisdiction [to the adult criminal court] pursuant to Wis. Stat. § 938.18” (¶ 12 n.5).

Justice Kelly filed a concurring opinion.