Wisconsin Lawyer
Vol. 79, No. 9, September 2006

Court of Appeals Digest

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

Civil Procedure Criminal Law Criminal Procedure Home Improvement Practices

Insurance Open Meetings Law Property Torts

Civil Procedure

Rabideau v. Stiller, 2006 WI App 155 (filed 27 June 2006) (ordered published 26 July 2006)

Rabideau sued Stiller in a lawsuit arising out of a traffic accident. The complaint was not signed but was attached to a properly signed summons. Stiller filed a motion to dismiss the action based on the unsigned complaint. On the same day, Rabideau filed an amended summons and complaint, which were almost identical to the initial documents, except that both were now properly signed and the complaint contained two additional paragraphs. The circuit court denied the motion to dismiss because the error was technical (see ¶¶ 2, 5).

The court of appeals, in an opinion written by Judge Hoover, affirmed. The initial complaint was defective because it lacked a signature. The court declined "to determine whether the failure to sign the complaint here is properly considered a technical or a fundamental defect" (¶ 14). Wis. Stat. section 802.05(1)(a) "explicitly provides a remedy for pleadings that have been improperly subscribed": an improperly subscribed pleading shall be stricken "unless it is signed promptly after the omission is called to the attention of the pleader or movant" (id.). In short, an omitted signature is a curable defect whether it is labeled technical or fundamental. The record in this case established that the defect was promptly cured. Not until Stiller filed his motion to dismiss did Rabideau have notice of the problem, which her lawyer cured the same day.

The court also rejected Stiller's contention that, because the statute of limitation had expired, the amended summons and complaint cannot relate back under Wis. Stat. section 802.09(3). "Applying the relation-back statute to pleadings used to cure a subscription requirement omission is consistent with the remedial language of Wis. Stat. § 802.05(1)(a). Nothing in Wis. Stat. §§ 802.05 or 802.09 suggests otherwise" (¶ 21).

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Criminal Law

Homicide by Negligent Operation of a Vehicle - Meaning of Criminal Negligence

State v. Schutte, 2006 WI App 135 (filed 22 June 2006) (ordered published 28 July 2006)

The defendant was convicted by a jury of three counts of homicide by negligent operation of a vehicle, in violation of Wis. Stat. section 940.10(1). The charges arose out of an incident in which the defendant driver's three passengers were killed. The defendant's vehicle, which was traveling on an icy highway on a snowy February night, crossed the centerline and collided with a truck heading in the opposite direction. In a decision authored by Judge Deininger, the court of appeals affirmed the convictions.

Among the issues on appeal was whether the defendant's conduct rose to the level of criminal negligence. The court noted that "Wisconsin judges and legislators have long grappled with the difficult question of when a person whose negligent conduct results in unintended harm should be subjected to criminal prosecution and penalties" (¶ 17).

The legislature has defined "criminal negligence" as "ordinary negligence to a high degree, consisting of conduct that the actor should realize creates a substantial and unreasonable risk of death or great bodily harm to another." Wis. Stat. § 939.25(1). "The decisions [in prior cases] make clear that, in order to convict someone of violating § 940.10, the State must satisfy jurors beyond a reasonable doubt that the defendant engaged in conduct, which, under all of the circumstances present, the defendant should have realized created a substantial and unreasonable risk of death or great bodily harm to another person. See Wis. Stat. § 939.25(1). A defendant may avoid criminal liability if jurors determine that the State failed to establish beyond a reasonable doubt that the defendant's conduct while operating a vehicle rose to that level of culpability because, under the circumstances under which the defendant was driving, either the risk of life-threatening consequences was not a substantial one, or if it was, the circumstances, such as the presence of an emergency, rendered the risk not unreasonable" (¶ 29).

On the facts of this case, the court concluded that "the State presented sufficient evidence for jurors to reasonably conclude, beyond a reasonable doubt, that [the defendant's] conduct prior to the collision was criminally negligent within the meaning of Wis. Stat. §§ 939.25 and 940.10. The State's evidence established not only that [the defendant's] car crossed the highway centerline, but from the evidence the State presented, jurors could also reasonably conclude that [the defendant] was driving too fast for prevailing weather and road conditions, and, while on a curve in the highway, she attempted to engage in other tasks [either changing a compact disc or leaning down to pick up a French fry] and took her eyes off the road and one hand off the steering wheel. We conclude the evidence at trial, viewed most favorably to the conviction, was such that jurors, acting reasonably, could have determined, beyond a reasonable doubt, that [the defendant] engaged in conduct that she should have realized `create[d] a substantial and unreasonable risk of death or great bodily harm to another.' See § 939.25(1)" (¶ 34).

The court observed that "[h]ad the State's only evidence of [the defendant's] pre-collision conduct been that, on a snowy evening with icy road conditions, her vehicle crossed the highway centerline and collided with an oncoming vehicle, we might agree that [the defendant's] convictions under Wis. Stat. § 940.10 could not be sustained. That is so because the violation of a traffic statute, standing alone, does not necessarily prove that a defendant engaged in criminally negligent conduct. The trial court properly instructed jurors that the violation of a traffic statute, such as Wis. Stat. § 346.05(1) (requiring motorists to `drive on the right half of the roadway'), `does not necessarily constitute criminal negligence. You may consider this along with all the other evidence in determining whether the defendant's conduct constituted criminal negligence.' See Wis JI - Criminal 1170" (¶ 24).

The appellate court also concluded that "the trial court did not erroneously exercise its discretion in admitting evidence of [the defendant's] marijuana use prior to the collision. The evidence was relevant to the jury's determination of whether [the defendant] was criminally negligent at the time of the collision, and its probative value was not substantially outweighed by the danger of unfair prejudice" (¶ 4).

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Criminal Procedure

Miranda - Anticipatory Invocation of Miranda Rights - Electronic Recording of Confessions

State v. Kramer, 2006 WI App 133 (filed 8 June 2006) (ordered published 26 July 2006)

Kramer was convicted of first-degree intentional homicide, attempted first-degree intentional homicide, and theft from a person or corpse. On appeal, he argued that his convictions should be reversed and remanded for a new trial because, among other reasons, certain pretrial statements he made should have been suppressed because: 1) he invoked his Fifth Amendment right to counsel during a standoff with police; and 2) the state allegedly deliberately failed to electronically record the interrogations during which the statements were made. In a decision authored by Judge Higginbotham, the court of appeals affirmed.

During a standoff with police, which occurred after the defendant had fired shots at officers, the defendant told the police to get him an attorney. He was not provided with counsel either during the standoff or later that day when he was arrested and taken into custody. Once in custody, he was interrogated twice. Before both interrogations the defendant was read his Miranda rights and given a written Miranda form to review. Both times he waived his rights, including his right to counsel, and agreed to speak with officers.

The defendant contended that the statements he made while in police custody after the standoff must be suppressed under Miranda v. Arizona, 384 U.S. 436 (1966) andEdwards v. Arizona, 451 U.S. 477 (1981) because he requested an attorney during the standoff and police officers subsequently questioned him in the absence of counsel. The defendant did not address whether he was "in custody" within the meaning of Miranda when he requested counsel. Rather, he asserted that the officers were required to honor his request because it preceded police questioning. The court of appeals disagreed.

The court of appeals said that Miranda safeguards apply only to custodial interrogations (see ¶ 9). The court concluded that "[the defendant's] pre-custody invocation of his right to counsel was not an invocation of his right to counsel under Miranda and therefore his ensuing post-Mirandized inculpatory statements made while undergoing custodial interrogation need not be suppressed" (¶ 14). "Our holding here, however, is not meant to suggest that there are no exceptions to the general rule that a defendant may not anticipatorily invoke Miranda. For example, there might be situations where a request for counsel at the conclusion of a standoff situation is so intertwined with imminent interrogation that the invocation should be honored. That did not occur here" (¶ 15).

The defendant next argued that his statements made in the two interrogations should have been suppressed because law enforcement personnel failed to make electronic recordings of the interrogations, even though the interrogation room was equipped with working video equipment. He urged the court of appeals to adopt a general exclusionary rule mandating the exclusion of statements made by adults during police interrogation if the interrogation is not electronically recorded. In essence he asked the court to extend to adults the rule established by the Wisconsin Supreme Court in State v. Jerrell C.J., 2005 WI 105, 283 Wis. 2d 145, 699 N.W.2d 110, which makes inadmissible at trial some unrecorded statements made by juveniles during custodial interrogations. "The supreme court in Jerrell established this rule pursuant to its broad superintending and supervisory authority over the court system granted to it under Article VII, Section 3 of the Wisconsin Constitution" (¶ 17). The court of appeals was not persuaded that, as an intermediate appellate court, it has the authority to adopt the sort of sweeping new exclusionary rule proposed by the defendant (see id.).

In a footnote the court noted that "[t]he legislature recently enacted 2005 Wis. Act 60, §§ 31-40, establishing the policy `to make an audio or audio and visual recording of a custodial interrogation of a person suspected of committing a felony unless a condition under s. 972.115(2)(a)1. to 6. applies or good cause is shown for not making an audio or audio and visual recording of the interrogation.' 2005 Wis. Act 60, § 31. The legislature enacted these provisions long after [the defendant's] interrogations in this case. Therefore, the relief provided in this act is not available to him" (¶ 17 n.4).

Home Improvement Practices

Violation of Administrative Code Coupled with Other Wrongdoing - Double Damages for Entire Damage Award

Stuart v. Weisflog's Showroom Gallery Inc., 2006 WI App 109 (filed 3 May 2006) (ordered published 28 June 2006)

A jury found that the defendant, Weisflog's Showroom Gallery Inc., induced the plaintiffs to enter into an architectural contract and a subsequent home remodeling contract by use of false, deceptive, or misleading trade practices, contrary to Wisconsin Administrative Code section ATCP 110.02. (Wisconsin Administrative Code chapter ATCP 110, entitled "Home Improvement Practices," was adopted under authority of Wis. Stat. section 100.20, the fair trade practices statute. A person who suffers a monetary loss because of a violation of chapter ATCP 110 may sue the violator directly under section 100.20(5) and may recover twice the amount of the loss, together with costs and reasonable attorney fees.) The jury further found that the defendant had negligently performed the construction called for in the remodeling contract. The jury awarded the plaintiffs $95,000 and apportioned 25% of the damages award to the administrative code violation and 75% to the negligence claim. On postverdict motions, the trial court doubled only the misrepresentation damages. In a decision authored by Judge Nettesheim, the court of appeals affirmed in part and reversed in part.

Addressing what it characterized as a "novel question," the court held that "§ 100.20(5) (2003-04) authorizes doubling of an entire damage award when a violation of the Home Improvement Practices Act, Wis. Admin. Code ch. ATCP 110 (Oct. 2004) (ATCP 110), is coupled with additional wrongdoing, separate and apart from the § 100.20/ATCP 110 violation, which contributes to the loss" (¶ 1). The court concluded that the verdict question asking the jury to apportion the damages as described above was erroneous (see ¶ 50). "We see no place in this framework for apportioning damages where, as here, the damages flowed from the initial misrepresentation. Had the Gallery not made its misrepresentations inducing the contracts, the [plaintiffs] may well have not entered into the contracts in the first instance and thereby avoided the harm. In short, the misrepresentations were the catalyst for the harm" (¶ 49). Accordingly, the full award of damages should have been doubled (see ¶ 50).

The appellate court also concluded that 1) the economic loss doctrine did not apply in this case because the core agreement between the parties was one for services (see ¶ 4); 2) the plaintiffs' claims were not barred by the statute of limitation because the discovery rule covering tort claims applied in this case and the plaintiffs filed suit two years after discovering the construction defects, which was well within the six years prescribed by Wis. Stat. section 893.52 (see ¶¶ 26-27); and 3) the circuit court erred in determining the amount of attorney fees (see ¶¶ 51-57).

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Insurance

UIM - "Reside with"

Bauer v. USAA Casualty Ins. Co., 2006 WI App 152 (filed 29 June 2006) (ordered published 26 July 2006)

Bauer appealed from an order dismissing her underinsured motorist (UIM) claim against her insurer, State Farm. The issue was whether the UIM coverage applied to her son, who was killed while riding in a car driven by a friend.

The court of appeals, in an opinion written by Judge Dykman, affirmed the circuit court's determination that the son did not "reside primarily with" Bauer for purposes of the UIM coverage. Wisconsin case law has not construed this particular phrase, and the court rejected Bauer's arguments that other cases construing the word "resident" were applicable.

"The word `primarily' focuses [the court's] analysis on where a person's primary residence is located" (¶ 5). "The cases Bauer relies on do not interpret an insurance policy which includes the word `primarily' or `primary.' The modifier `primarily' makes the phrase `resides primarily with you' unambiguous, at least as applied to the facts of this case. Merriam Webster's Collegiate Dictionary 925 (10th ed. 1993) defines `primarily' as `for the most part,' or `chiefly.' One meaning it gives `primary' is `of first rank, importance or value,' or `principal.' To have a `primary' residence under this commonly accepted definition means there can only be one primary residence. Because one cannot `primarily reside' in more than one place the use of the modifier `primarily' avoids the uncertainties that were a cause of the disputes in [the four cases under discussion]" (¶ 11). The record supported the finding that Bauer's son did not "reside primarily with" her at the time of his death.

UIM - Exclusions

Anderson v. Pellett, 2006 WI App 151 (filed 21 June 2006) (ordered published 26 July 2006)

Anderson was driving his motorcycle on a state highway. He lost control of the motorcycle and laid the bike down on the road. While checking on the health of his passenger a few minutes later, Anderson was struck and killed by a passing vehicle. His estate sued the other driver but also brought a claim under Anderson's own underinsured motorist (UIM) coverage. The circuit court granted summary judgment in favor of the UIM insurer on the ground that the coverage was excluded under Anderson's policy.

The court of appeals, in an opinion written by Judge Snyder, reversed. The policy language in question excluded coverage for injuries sustained "while `occupying' any motorized vehicle having fewer than four wheels" (¶ 7). Case law construing occupancy uses a vehicle-orientation test, a multifactor test that looks to whether "the party was vehicle-oriented or highway oriented at the time of the injury" (¶ 8). "Applying the vehicle-orientation test to the facts and construing the definition narrowly, we conclude that Anderson was not vehicle-oriented at the time he was hit. Anderson had left the motorcycle behind and was approximately fifty feet away from it when the accident occurred. He was talking to Callaway, who had been thrown from the vehicle and was standing off to the side of the road. His `overriding concern' was Callaway's condition rather than the motorcycle. Anderson was neither walking toward the motorcycle nor turning toward the cycle when he was hit. Callaway estimated that approximately five minutes passed from the time she was thrown off the motorcycle to the time Anderson was hit by Pellett's car. By the time he was hit, Anderson had severed his relationship with the motorcycle and turned his focus to Callaway and her health and safety" (¶ 13).

Agent - Negligence - Increased Coverage

Avery v. Diedrich, 2006 WI App 144 (filed 7 June 2006) (ordered published 26 July 2006)

The Averys sued their insurance agent, Diedrich, for his alleged negligence in failing to increase their coverage as they had repeatedly requested. The circuit court granted summary judgment on this issue in favor of the Averys.

The court of appeals, in an opinion written by Judge Brown, reversed. "Wisconsin case law makes clear that when an insurance agent agrees to procure coverage that the client requests, the failure to acquire it exposes the agent to a suit claiming negligence. This case tests whether an agent is exposed to liability even if the client requests the coverage and the agent has not agreed to procure it. We hold that the insurance agent is not so exposed and reverse the circuit court's determination to the contrary" (¶ 1).

The court thus rejected the Averys' contention that under case law their preexisting relationship meant that Diedrich had a duty to secure the increased coverage. "Diedrich did not enter into an agreement with the Averys to procure additional coverage. We acknowledge that Diedrich had a pre-existing relationship with them. However, all we can discern from the record is that the parties contracted for Diedrich to obtain a $150,000 policy. It is undisputed that he did so. Any increase in coverage would not have been `pursuant to' that agreement. Thus, we cannot conclude that the Averys' initial agreement gave rise to a duty to procure the requested increase in coverage" (¶ 10). The conclusion also was supported by case law from other states and by commentators.

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Open Meetings Law

Prerequisites to Law's Applicability - Law Inapplicable to Committees of One

Plourde v. Habhegger, 2006 WI App 147 (filed 6 June 2006) (ordered published 26 July 2006)

Habhegger was the building inspector, zoning administrator, and assessor for the city of New Richmond. In Habhegger's position as the building inspector, he evidently was the sole member of the Department of Building Inspection. He also was a member of the city's supervisory and safety committee, which had 14 members.

The plaintiff initiated the process for obtaining a building permit to open a car wash on a parcel of property he owned in the city. Habhegger informed him that a permit would not be issued unless the plaintiff installed a street to connect the parcel to an existing street. The plaintiff believed Habhegger reached this decision after a "meeting" between Habhegger and five other members of the supervisory and safety committee. The plaintiff claimed that these six members of the committee violated the open meetings law by meeting to discuss his permit application without providing notice of the meeting and by failing to conduct the meeting in open session.

The circuit court dismissed the action as to the other members of the committee but allowed the open meetings complaint against Habhegger to proceed to a jury trial. Judgment was entered against Habhegger on the jury's verdict. In a decision authored by Judge Hoover, the court of appeals reversed.

There are two prerequisites for application of the open meetings law. First, there must be a purpose to engage in governmental business as specified in Wis. Stat. section 19.82(2), which defines "meeting" as "the convening of members of a governmental body for the purpose of exercising the responsibilities, authority, power or duties delegated to or vested in the body." Second, the number of members present must be sufficient to determine the parent body's course of action regarding the proposal discussed (see ¶ 8).

"It is undisputed that the Supervisory and Safety Committee was created to protect the health and safety of employees and the general public through oversight of working conditions and work places. However, it has no vested authority over or responsibility for the issuance of building permits. Rather, Habhegger is the only individual authorized to grant or deny building permits. Therefore, the first requirement for a `meeting' was not present. That is sufficient to avoid the open meetings law requirements" (¶ 9).

The appellate court also concluded that "the [open meetings] law does not apply to committees of one member" (¶ 1). "Wisconsin Stat. § 19.82(2) speaks of a meeting of the members, plural, implying there must be at least two members of a governmental body. Moreover, the notion of applying the open meetings law to a body of one creates certain practical problems" (¶ 13). Said the court, "we require the public to be granted access to discussions among governmental body members so that the public can be informed of the debate and decision-making process that occurs between the body's membership. But it would be absurd, if not impossible, to require an open meeting notice whenever a body of one would set out to contemplate a pending issue. We do not believe the legislature intended to require public soliloquies by single-member governmental bodies" (¶ 14).

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Property

Mortgages - Consideration - Seal

McDonald v. McDonald, 2006 WI App 150 (filed 13 June 2006) (ordered published 26 July 2006)

Two circuit courts granted foreclosure judgments on properties owned in two different counties. The properties secured loans made by Sheila McDonald to her mother-in-law, Ardyth McDonald, who had unsuccessfully argued that the underlying notes lacked consideration.

The court of appeals, in an opinion authored by Judge Peterson, affirmed. "We conclude the mortgages, signed under seal, are conclusive proof of consideration for both the mortgages and the underlying note they secure" (¶ 1). The court based its holding on Mitchell Bank v. Schanke, 2004 WI 13, in which the supreme court stated that "`[u]nder Wisconsin law, when an executed contract is signed under seal, the seal is conclusive proof of consideration, and consideration may not be impeached absent a factual showing of fraud.' The Mitchell Bank court explained, `[A] seal imports consideration for the mortgage. This imports consideration for the note also. In absence of allegations of fact showing fraud the mortgage cannot be impeached for want of consideration'" (¶ 8). The court of appeals refused to limit Mitchell Bank to situations involving the simultaneous execution of the mortgage and note. (The note at issue was signed five months before the mortgages were signed.)

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Torts

Health Care Expenses - Collateral Source Rule

Leitinger v. Van Buren Management, 2006 WI App 146 (filed 27 June 2006) (ordered published 26 July 2006)

The plaintiff was injured in a construction site accident. The bills for his medical expenses totaled more than $150,000 but negotiated discounts resulted in actual payments by his insurer of about $111,000. During trial in the plaintiff's lawsuit against DBart and other defendants (DBart) for his injuries, DBart introduced evidence that the plaintiff's health insurer paid substantially less than the total amount billed, for the purpose of showing that the total bill was unreasonably high. The plaintiff stipulated to the amount paid as the reasonable amount of the medical bills but reserved the right to appeal this issue (see ¶ 8).

The court of appeals, in a decision authored by Judge Kessler, reversed. "[T]his case presents a single legal issue: whether defendants in a personal injury case are permitted to introduce evidence of the amount of medical expenses actually paid, as opposed to the amount of expenses billed, in order to show that the billed expenses were not reasonable. We conclude that the amount paid for the plaintiff's medical treatment by a collateral source - plaintiff's health insurance carrier - was inadmissible, based on the application of well-established Wisconsin law"(¶ 1).

"We recognize that DBart introduced this evidence because it believed that the amounts billed were not reasonable. However, both Koffman [v. Leichtfuss, 2001 WI 111] and Ellsworth [v. Schelbrock, 2001 WI 63]recognize that while a health insurance provider may negotiate discounted rates with a health care provider, that negotiated rate is not evidence of the reasonable value of those medical services for purposes of determining damages in a tort claim. Consequently, a defendant must produce some competent evidence other than what the insurance company paid upon which to base its argument that the amount billed was not the reasonable value of the services. Thus, DBart was not precluded from introducing relevant evidence that the billed amounts were unreasonable. For instance, DBart could have offered expert testimony as to reasonable value of the medical services provided in support of its argument that the amount billed for the medical services was not the reasonable value of the services. Instead, it chose to rely solely on its assertion that the actual amount paid by an insurance company is admissible evidence of reasonable value. For the reasons already explained, we reject that assertion" (¶ 18).

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