Attorneys

Mortgage Foreclosure – Nonlawyer Personal Representative of Estate

Ditech Fin. LLC v. Estate of Stacey, 2018 WI App 18 (filed 15 Feb. 2018) (ordered published 28 March 2018)

HOLDING: A nonlawyer personal representative of an estate cannot represent the estate in a mortgage foreclosure action.

SUMMARY: This appeal was taken from a circuit court’s order affirming a sheriff’s sale of real property owned by an estate. The estate was represented by the decedent’s son, who was the personal representative of the estate but who was not licensed to practice law.

Reaching an issue not raised by the parties, the court of appeals held “that a nonlawyer personal representative of an estate may not represent the interests of the estate in a mortgage foreclosure proceeding or an appeal therefrom before a Wisconsin court” (¶ 1). The appeal was accordingly dismissed for lack of jurisdiction because the notice of appeal was ineffective. The court left open the question of what “role a personal representative may or may not perform in a probate proceeding” (¶ 11).

Criminal Procedure

Challenge to Withdrawal of Funds From Prisoner’s Account to Pay Restitution – Recourse to Inmate Complaint Review System Required

State v. Williams, 2018 WI App 20 (filed 14 Feb. 2018) (ordered published 28 March 2018)

HOLDING: The sentencing court lacked competency to review a prison inmate’s objection to the Department of Corrections deducting funds from his prison account to pay restitution.

SUMMARY: Defendant Williams pleaded guilty in 2014 to first-degree reckless homicide, was sentenced to prison for seven years, and was ordered to pay $25,142.80 in restitution. He did not challenge the imposition of restitution nor its amount. However, he did object to the Department of Corrections (DOC) deducting funds from his prison account to pay his restitution obligation. Williams moved his sentencing court to order the DOC to stop taking funds from his prison account for this purpose. The circuit court denied the request.

In a decision authored by Judge Reilly, the court of appeals affirmed. It concluded that “the circuit court, sitting in its role as the sentencing court, did not have competency to address Williams’ motion. As an inmate, Williams’ recourse is to the inmate complaint review system (ICRS), Wis. Admin. Code ch. DOC 310 (Dec. 2014), which, if denied at the administrative level, allows Williams to bring a writ of certiorari to the circuit court. As Williams did not utilize nor exhaust his administrative remedies under the ICRS, the circuit court, sitting as the sentencing court, did not have competency to entertain Williams’ motion” (¶ 1).

Williams also challenged the collection of funds from his prison account as being a violation of his judgment of conviction. The appellate court disagreed. The judgment of conviction provides that “[i]f … a prison term [is] ordered, outstanding financial obligations shall be collected … including deductions from inmate prison monies” (¶ 7). Said the appellate court: “[T]he DOC can collect restitution from an inmate’s account, and nothing in the judgment of conviction provides otherwise. Once the court orders restitution, it is within the DOC’s authority to collect it from an inmate” (id.).

Insurance

Duty to Defend – “Concurrent Capacity” – Timely Notice – Issue Preclusion

Grigg v. Aarrowcast Inc., 2018 WI App 17 (filed 27 Feb. 2018) (ordered published 28 March 2018)

HOLDING: An insurer breached its duty to defend its insured in a case in which the insured was both a shareholder, who was not covered, and a business executive, who was covered.

SUMMARY: This case arose out of a “complex business transaction” that triggered litigation when buyers of a business claimed they were misled by Grigg, who was both a shareholder and an executive of the seller entity. Grigg claimed that Hudson Insurance had a duty to defend him. The circuit court ruled that Hudson had no such duty and dismissed it from this action.

The court of appeals reversed in an opinion authored by Judge Hruz. Hudson failed to show that it was entitled to summary judgment as a matter of law. The court applied the “four-corners rule” that governs duty to defend cases (see ¶ 27). The facts in the complaint alleged that the buyers were arguably holding Grigg liable for conduct he undertook while serving as the seller’s officer and director. “For duty-to-defend purposes, the sufficiency of the facts pled – not a plaintiff’s attribution of those facts to a particular legal theory – controls the determination of whether a claim for relief has been properly pled” (¶ 43).

Here the “majority” of the buyers’ allegations about fraud applied equally to Grigg as both a shareholder (not covered) and as an executive of the seller (covered) (see ¶ 48). The court ruled that “when an individual’s complained-of-conduct – and the facts a third party alleges in a complaint related thereto – is undertaken pursuant to two or more concurrent capacities, one of which is covered by an insurance policy, the insurer must provide a defense when it is initially tendered” (¶ 51). On the facts pleaded here, Hudson had a duty to defend Griggs (see ¶ 57).

The court took up a number of other fact-intensive issues: 1) Hudson was a proper party to the action; 2) Hudson had not shown prejudice even if Grigg’s notice of claim was untimely; and 3) issue preclusion did not bar Grigg’s claim (case law “does not support the notion that issue preclusion is properly applied merely because a litigant settles with some parties aligned in interest on an appealed issue while the appeal is pending”) (¶ 75).

Open Meetings Law

“Walking Quorum” – Email Communications

State ex rel. Zecchino v. Dane Cty., 2018 WI App 19 (filed 27 Feb. 2018) (ordered published 28 March 2018)

HOLDING: Based upon their content and frequency, email communications from one county board supervisor to less than one-fourth of his fellow supervisors did not violate the open meetings law.

SUMMARY: At a meeting held on April 7, 2016, the Dane County Board of Supervisors rejected the renewal of the plaintiffs’ billboard lease on a vote of 18-16. The plaintiffs thereafter filed an action alleging violations of the open meetings law. Specifically, they complained that some board members engaged in closed discussions with the purpose of negatively affecting the vote on the lease. The focus was on several email communications from one particular county supervisor (Rusk), which the plaintiffs alleged was an illegal “walking quorum.” (A walking quorum is defined as “a series of meetings of groups less than a quorum” (¶ 4 n.1).)

The defendants responded that these communications were no more than the type of ordinary communications necessary to conduct governmental business. The circuit court granted the defendants’ motion to dismiss. It found that the plaintiffs’ complaint failed to state a claim upon which relief could be granted because they failed to show that the named defendants engaged in an illegal walking quorum based on both the number of supervisors identified in the emails at issue and the actual content of the emails.

In an opinion authored by Judge Kessler, the court of appeals agreed with the circuit court and affirmed its decision. Said the court: “[I]n order for [plaintiffs] to establish a walking quorum, [their] pleadings must plausibly suggest both that the defendants purposefully engaged in discussions regarding the lease renewal vote and that the discussions were held between a sufficient number of board members so as to affect the vote. The complaint does neither” (¶ 11).

First, the entire factual basis for plaintiffs’ complaint was a series of emails sent by Supervisor Rusk either to other board supervisors or to constituents. “Most of Rusk’s emails were one-way messages, garnering few, if any, responses from other supervisors. None of the emails reflect a ‘tacit agreement’ between the defendants to vote against the lease. The emails all either dealt with scheduling matters, were communications with constituents, asked other supervisors for their opinions, or expressed Rusk’s personal position” (¶ 12). Some were sent four months before the vote took place.

Second, the complaint failed to establish that a sufficient number of supervisors engaged in discussions capable of affecting the vote. “Of the thirty-four board members who voted, the complaint alleges that Rusk only had contact with eight of them – less than one-fourth. That number is insufficient for a negative quorum. Simply put, the numbers do not add up and [the plaintiffs’] assertion that the defendants engaged in illegal activity to affect the vote is purely speculative” (¶ 14).