Wisconsin Lawyer
Vol. 79, No. 7, July
2006
Supreme Court Digest
This column summarizes all decisions of the Wisconsin Supreme Court
(except those involving lawyer or judicial discipline, which are
digested elsewhere in the magazine). Profs. Daniel D. Blinka and Thomas
J. Hammer invite comments and questions about the digests. They can be
reached at Marquette University Law School, 1103 W. Wisconsin Ave.,
Milwaukee, WI 53233, (414) 288-7090.
by Prof. Daniel D. Blinka &
Prof. Thomas J. Hammer
Attorneys
Clients - Expenses - Attorney Liability
Yorgan v.
Durkin, 2006 WI 60 (filed 2 June 2006)
Attorney Durkin's client was treated by a chiropractor, Yorgan. The
client signed an agreement with Yorgan directing Durkin to pay Yorgan
for the client's care and purportedly granting to Yorgan a lien against
any proceeds the client might receive from a personal injury action.
Durkin later settled the client's personal injury claim and distributed
the proceeds without paying Yorgan. After Yorgan unsuccessfully
attempted to collect his fees from the client, he sued Durkin for the
money. The circuit court ruled that Durkin was responsible for the debt.
The court of appeals reversed.
The supreme court, in a decision authored by Justice Bradley,
affirmed. "In our view, it is significant whether the attorney has
signed the agreement or otherwise accepted its terms. Here, applying
basic contract principles, we determine that Attorney Durkin was not a
party to the agreement and not bound by it. Dr. Yorgan had no reasonable
expectation that Durkin would be bound by the agreement if he did not
sign it. Likewise, Yorgan had no reasonable reliance interest in
Durkin's acceptance or rejection of the agreement" (¶ 15). "In some
circumstances, an attorney may agree to be contractually bound by
proffering a `letter of protection.' Such letters are `a common practice
by which lawyers representing personal injury plaintiffs ensure clients
will receive necessary medical treatment, even if unable to pay until
the case is concluded.' Use of the letter has been explained as `a
document by which a lawyer notifies a medical vendor that payment will
be made when the case is settled or judgment is obtained.' Here,
Attorney Durkin was not bound either as a party to the agreement or by
any other instrument such as a letter of protection" (¶ 21). Absent
fraud or collusion by the attorney, the "general rule" is one of
"attorney non-liability to third parties" (¶ 28).
The court also considered public policy. "Allowing third-party
creditors such as Dr. Yorgan to hold liable an attorney with notice of
client debt, absent more, may deter attorneys from accepting personal
injury cases and negatively impact injured parties' access to courts.
This would be particularly true, as here, when it appears that a claim
is relatively small and that the claimant's financial resources are
limited. Taking a broader view than Dr. Yorgan does, we must bear in
mind that it is the willingness of attorneys to take these types of
cases that helps ensure compensation not only for patients who are tort
victims but also for health care providers who are their creditors. We
see no readily discernable stopping point on attorney liability if
liability is imposed for the reasons Yorgan advances. A variety of
client creditors would need only send the client's attorney a copy of
their agreements with the client in order to enlist the attorney as a de
facto collection agent who would be required to correctly prioritize and
pay client debts or risk liability. Putting attorneys in this position
may compromise their duties to their clients" (¶¶ 31-32).
Finally, the court rejected the argument that Yorgan acquired an
equitable lien against Durkin, on three grounds: 1) it was the client,
not the lawyer, who was "unjustly enriched"; 2) permitting an equitable
lien would circumvent the general rule of attorney non-liability; and 3)
imposition of an equitable lien would work against the legislature's
policy choice to limit statutory liens.
Justice Wilcox concurred but stated that "an exception should be made
when the attorney has actual notice of a professed assignment of
settlement funds between a client and a health care provider" (¶
43).
Justice Roggensack, joined by Justice Butler, dissented. They found
that the client had validly assigned Yorgan an interest in any
settlement proceeds and thereby, on these facts, created an equitable
lien.
Civil Procedure
Default Judgment - Improper Service
Richards v. First Union
Secs. Inc., 2006 WI 55 (filed 31 May 2006)
Richards sued First Union to recover investment losses allegedly
caused by violations of the state's securities laws and obtained a
default judgment. More than a year later, and in response to Richards'
demand for payment, First Union moved to reopen the default judgment
based on insufficient service of process. The circuit court denied the
motion but the court of appeals reversed.
The supreme court, in an opinion written by Justice Crooks, reversed
the court of appeals. First, the court addressed which party bears the
burden of proof on the issue of whether personal jurisdiction was
obtained through proper service. After reviewing the case law, the court
held that "the burden of proof is on the person seeking to reopen and
set aside or vacate the default judgment. Furthermore, we hold that the
evidence necessary to set aside such a judgment is evidence sufficient
to allow a court to determine that the circuit court's findings of fact
were `contrary to the great weight and clear preponderance of the
credible evidence'" (¶ 27).
Second, the court addressed "what it means to be a managing agent
pursuant to Wis. Stat. § 801.11(5)(a), which is one way to satisfy
the statutory service of process requirements" (¶ 28). The court
found "helpful" a Minnesota case that described a managing agent as
"some person `invested by the corporation with general powers involving
the exercise of judgment and discretion' [and] `one who could reasonably
be expected to apprise the corporation of the service and the pendency
of the action'" (¶ 34). The record here, however, was insufficient
for the supreme court to determine whether this standard had been met
and so it remanded the matter to the circuit court. On remand the
circuit court is also to consider whether First Union waived its right
to challenge the court's personal jurisdiction.
Commercial Law
Contracts - Oral Modifications - Statute of Frauds - Exceptions
Royster-Clark Inc. v.
Olsen's Mill Inc., 2006 WI 46 (filed 18 May 2006)
This case concerned a dispute over Olsen's Mill's purchase of
fertilizer from Royster-Clark (Royster). In a bench trial, the circuit
court concluded that the written contract had been orally modified by
the parties and thus that Olsen's Mill was entitled to an offset. The
court of appeals reversed because it found that these findings were an
abuse of discretion.
The supreme court, in a majority decision authored by Justice Crooks,
reversed the court of appeals. "Royster maintains that the [Uniform
Commercial Code] UCC governs the contract, and that both the UCC statute
of frauds and the contract itself require that modifications must be in
writing. The nitrogen contract between Royster and Olsen's Mill
expressly provides for such, stating `this contract shall be governed by
and interpreted pursuant to the provisions of the Uniform Commercial
Code....' The contract additionally provides that `[n]o additional
or different terms shall be binding on seller unless specifically
accepted by seller in writing.' See, e.g., Wis. Stat. § 402.209(2)"
(¶ 15).
Conceding the UCC's application, Olsen's Mill argued that the alleged
oral modification was valid under two exceptions to the statute of
frauds' writing requirement: waiver and partial performance of the
contract. First, the majority found that waiver had occurred. "Generally
speaking, if the record supports the inference that the parties intended
to modify the contract, then a waiver pursuant to § 402.209 (4) has
occurred" (¶ 23). "[A]t least five factors" in the record supported
the circuit court's findings, including the parties' long-standing
relationship (see ¶¶ 27-36).
Second, the partial performance exception also supported the
contract's oral modification. Case law establishes that "the statute of
frauds does not automatically negate an oral modification and that such
a modification may be enforceable in equity" (¶ 40). "Even though
the parties had not fully performed the modified contract, part
performance had occurred. Part performance under Wis. Stat. §
402.201(3)(c) occurs when a buyer accepts the product and the seller
participates in, or expresses assent to, the change in possession and
control of the product" (¶ 41). "The facts of this case fall within
this part performance exception. Olsen's Mill sought a buyout of the
undelivered portion of its original nitrogen contract. After discussions
with Ralston [a Royster employee], Olsen's Mill retracted the request
and accepted not only the balance of the product pursuant to the
contract, but an additional 34.6 tons of nitrogen fertilizer. Assent by
Royster is found in that it allowed Olsen's Mill to come to Royster's
plant and load its trucks with the additional 34.6 tons" (¶
44).
Chief Justice Abrahamson, joined by Justice Bradley, dissented. In
their view, the court of appeals correctly determined that the circuit
court's findings were clearly erroneous and that neither the waiver nor
the partial performance exceptions applied. Justice Prosser also filed a
dissenting opinion, in which he noted the existence of evidence that
Royster had breached its contract with a "good and faithful customer"
but also that the record did not support a finding of an oral
modification.
Unfair Sales Act - Aviation Fuel
Orion Flight Servs. Inc.
v. Basler Flight Serv., 2006 WI 51 (filed 19 May 2006)
The narrow point at issue in this case was whether aviation fuel is a
"motor vehicle fuel" under the Wisconsin Unfair Sales Act and thereby is
subject to the Act's minimum markup provisions. The circuit court
granted a preliminary injunction that enforced the Act. The court of
appeals reversed.
The supreme court, in an opinion written by Justice Butler, affirmed
the court of appeals. "[W]e conclude that `motor vehicle fuel' does not
include aviation fuel, that the minimum markup provisions in Chapter 100
of the Wisconsin Statutes do not apply to aviation fuel, and that Orion
cannot rely on Wis. Stat. § 100.30 for a private cause of action
against Basler. We also conclude that [Wisconsin Administrative Code
section ATCP 105.001(4)] does not incorporate aviation fuel in its
definition of `motor vehicle fuel,' and is thus consistent with the
statute" (¶ 3). The opinion contains an extensive analysis of the
statute's language, history, and relationship to kindred statutes.
Consumer Law
Consumer Loan Agreements - Arbitration Provision -
Unconscionability
Wisconsin Auto Title
Loans Inc. v. Jones, 2006 WI 53 (filed 25 May 2006)
Wisconsin Auto Title Loans (WATL) is a corporation that provides
short-term loans to consumers. On Dec. 6, 2001, Jones obtained an $800
loan from WATL. The loan agreement executed by the parties was a
pre-printed standard form short-term loan agreement provided by WATL. To
receive the loan, Jones had to deliver a security interest in his motor
vehicle in the form of a title to WATL; purchase a $150, one-year
membership in WATL's "Continental Car Club"; and pay a $4 filing fee on
the motor vehicle title. The loan agreement called for a single payment
of $1,197.08, due on Jan. 3, 2002, which included the original $800 loan
amount, $243.08 of finance charges, and the $154 the car owner borrowed
from WATL to pay the lender's fees. WATL represented in its loan
agreement that the annual percentage rate for the finance charge was 300
percent.
The loan agreement also included an arbitration provision, which
states that all disputes, controversies, or claims between the parties
relating to the loan agreement shall be decided by binding arbitration
and which carves out for the lender the right to enforce the borrower's
payment obligations in the event of default by judicial or other
process, including self-help repossession.
WATL commenced a replevin action to recover possession of Jones' car
and Jones responded with various individual and class counterclaims.
WATL did not answer the counterclaims but moved to compel Jones to
arbitrate the counterclaims. The circuit court denied the motion; it
held that the arbitration provision of the loan agreement was
unconscionable. The court of appeals affirmed. In a majority decision
authored by Chief Justice Abrahamson, the supreme court affirmed the
court of appeals.
The dispositive issue before the court was whether the arbitration
provision in the loan agreement between the parties is unconscionable
and, therefore, unenforceable. "For a contract or a contract provision
to be declared invalid as unconscionable, the contract or contract
provision must be determined to be both procedurally and substantively
unconscionable" (¶ 29). In this case the court held that the
arbitration provision is unconscionable.
"The following factors render the arbitration provision procedurally
unconscionable: Wisconsin Auto Title Loans was in the business of
providing loans with automobile titles as collateral and was experienced
in drafting such loan agreements; Wisconsin Auto Title Loans was in a
position of substantially greater bargaining power than the borrower;
the borrower was indigent and in need of cash; and the loan agreement
was an adhesion contract presented to the borrower on a
take-it-or-leave-it basis" (¶ 7). "The formation of the contract
was a product of the parties' unequal bargaining power and did not
reflect a real and voluntary meeting of the minds of the contracting
parties" (¶ 57).
The court also concluded that the "broad, one-sided, unfair"
provision of the loan agreement allowing WATL full access to the courts,
free of arbitration, while limiting the borrower to arbitration renders
the arbitration provision substantively unconscionable (see
¶ 8). "The exception to the arbitration provision is far too broad
and one-sided, granting Wisconsin Auto Title Loans a choice of forum -
arbitration or the circuit court - for its claims, while permitting the
borrower to raise claims only before an arbitrator. The doctrine of
substantive unconscionability limits the extent to which a stronger
party to a contract may impose arbitration on the weaker party without
accepting the arbitration forum for itself" (¶ 66). "While we
appreciate that a one-sided arbitration provision may not be
unconscionable under the facts of all cases, we conclude that the overly
one-sidedness of the arbitration provision at issue in the instant case
renders the arbitration provision substantively unconscionable" (¶
68). The court also noted that other factors in this case compounded the
substantive unconscionability (see ¶¶ 70-76).
Justice Butler joined the opinion and mandate of the majority in a
separate concurring opinion that was joined by Justice Crooks. Justice
Roggensack filed a dissenting opinion that was joined by Justice
Wilcox.
Top of page
Criminal Law
Carrying Concealed Weapon - Right to Bear Arms - Carrying a Concealed
Weapon in a Vehicle
State v.
Fisher, 2006 WI 44 (filed 17 May 2006)
This case presented the question of whether the defendant can be
prosecuted for carrying a concealed weapon (CCW) contrary to Wis. Stat.
section 941.23 in light of the right to keep and bear arms under article
I, section 25 of the Wisconsin Constitution. The defendant is a tavern
owner in Black River Falls who kept a loaded gun in the center console
of his vehicle. At the time of his arrest (approximately 4 p.m.), he was
running personal errands. He moved to dismiss the criminal complaint,
asserting that he kept the gun for security purposes because he
routinely transported large amounts of cash generated by his business.
The circuit court granted the motion and dismissed the case. The state
appealed and the court of appeals certified the case to the supreme
court, which granted certification.
In a majority decision authored by Justice Bradley, the supreme court
reversed. It concluded that the CCW statute is constitutional as
applied to the defendant because his interest in exercising his
right to keep and bear arms for purposes of security by carrying a
concealed weapon in his vehicle does not substantially outweigh the
state's interest in enforcing section 941.23. (Note: This case presented
an as applied challenge to the statute. In State v.
Cole, 2003 WI 112, 264 Wis. 2d 520, 665 N.W.2d 328, the supreme
court held that the CCW statute is a reasonable regulation on the time,
place, and manner in which the right to bear arms may be exercised and
is therefore constitutional on its face.)
The court concluded that Cole (which also involved an as
applied challenge to the CCW statute) and State v. Hamdan, 2003
WI 113, 264 Wis. 2d 433, 665 N.W.2d 785 (a case decided at the same time
as Cole and likewise dealing with an as applied challenge to
the statute) must be read together to resolve the defendant's as applied
challenge. These cases establish the following five principles that
informed the court's analysis.
First, a test articulated in Hamdan applies whenever a
defendant asserts that the CCW statute is unconstitutional as applied.
Under Hamdan, defendants are required to secure affirmative
answers to two questions before they can raise a constitutional defense:
1) Under the circumstances, did the defendant's interest in concealing
the weapon to facilitate exercise of his or her right to keep and bear
arms substantially outweigh the state's interest in enforcing the
concealed weapons statute? The state generally has a significant
interest in prohibiting the carrying of concealed weapons. Thus, to
satisfy this element, the defendant must have been exercising the right
to keep and bear arms under circumstances in which the need to do so was
substantial. 2) Did the defendant conceal his or her weapon because
concealment was the only reasonable means under the circumstances to
exercise his or her right to bear arms? Put differently, did the
defendant, under the circumstances, lack a reasonable alternative to
concealment to exercise his or her constitutional right to bear arms?
(see ¶ 18). (Note: If a defendant secures affirmative
answers to these two questions, a third question remains: whether the
state can show at trial that the defendant had an unlawful purpose at
the time he or she carried the concealed weapon (see ¶ 18
n.2)).
"Second, the court in Hamdan recognized that there are two
places in which a citizen's desire to exercise the right to keep and
bear arms for purposes of security is at its apex: in the citizen's home
or in his or her privately-owned business. Thus, it logically and
necessarily follows that the individual's interest in the right to bear
arms for purposes of security will not, as a general matter, be
particularly strong outside those two locations" (¶ 27).
"Third, in a similar vein, under both Hamdan and
Cole an individual generally has no heightened interest in his
or her right to bear arms for security while in a vehicle" (¶
28).
"Fourth, while the state's interest in prohibiting the carrying of
concealed weapons may generally be at its weakest in an individual's
home or privately-owned business, the state's interest will generally be
strong when a concealed weapon is being carried in a vehicle" (¶
29) (citations omitted).
"Fifth, because the individual's interest in carrying a concealed
weapon in a vehicle is generally comparatively weak and the state's
interest in prohibiting such weapons in vehicles is relatively strong,
it is only in extraordinary circumstances that an individual asserting a
constitutional defense under Hamdan will be able to secure an
affirmative answer to the first question in the Hamdan test
.... If a defendant reasonably believes that he or she is actually
confronted with a threat of bodily harm or death and that carrying a
concealed weapon is necessary for protection from the threat,
extraordinary circumstances would be present. Absent such circumstances,
an individual carrying a concealed weapon in a vehicle will generally be
unable to demonstrate that his or her interest in the right to keep and
bear arms for security substantially outweighs the state's interest in
prohibiting that individual from carrying a concealed weapon in a motor
vehicle" (¶ 32).
Applying these principles to the case at hand, the court concluded
that the defendant failed to meet his burden to secure an affirmative
answer to the question of whether his interest in concealing a weapon to
facilitate the exercise of his right to keep and bear arms substantially
outweighed the state's interest in enforcing section 941.23. "The facts
here amount to far less than a showing that [the defendant] had any
significant interest in exercising his right to keep and bear arms for
security purposes by carrying a concealed weapon in his vehicle. At the
time of his arrest, it was 4:00 in the afternoon in Black River Falls,
and he was engaged in personal errands and on his way to McDonald's. Not
only was he carrying a concealed weapon in a location that is not one of
the `apex' locations identified in Hamdan, but also the other
specific circumstances of his case are not particularly compelling.
Although the facts presented might be taken to suggest that [the
defendant] had more than an average citizen's interest in exercising his
right to keep and bear arms for purposes of security, on balance his
circumstances do not come close to substantially outweighing the state's
strong interest in prohibiting the carrying of a concealed weapon in a
motor vehicle. He could not have reasonably believed that he was
actually confronted with a threat of bodily harm or death. Therefore, he
also could not have reasonably believed that carrying a concealed weapon
was necessary for protection from such a threat. [The defendant's] case
does not present the type of extraordinary circumstances that could
justify the carrying of a concealed weapon in a motor vehicle"
(¶¶ 48-49).
Justice Crooks filed a dissenting opinion in which he argued that the
CCW statute is unconstitutional both on its face and as
applied. Justices Wilcox and Roggensack joined that part of the
dissenting opinion that concluded that the CCW statute is
unconstitutional as applied to the defendant.
Top of page
Criminal Procedure
Identifications - Inadvertent IDs
State v. Hibl,
2006 WI 52 (filed 26 May 2006)
Hibl was charged with reckless driving that caused severe injuries to
another driver. At issue was whether Hibl was the driver of the truck
that triggered the accident. No witness identified Hibl as the driver
before the trial. While the trial was underway, however, a witness saw
Hibl by chance in the courthouse hallway and told police that he
recognized Hibl as the driver of the truck that triggered the accident.
At a hearing on this development, the circuit court suppressed the
identification. The court of appeals affirmed the suppression in an
opinion applying State v. Dubose, 2005 WI 126, 285 Wis. 2d 143,
699 N.W.2d 582.
The supreme court, in an opinion written by Justice Bradley,
reversed. Dubose held that "identification evidence resulting
from an `unnecessary' showup is suppressed as inherently too suggestive,
without any separate fact-based inquiry into suggestiveness or
reliability" (¶ 27). Nonetheless, Dubose does not control
cases such as this, which concern "`accidental' confrontations resulting
in `spontaneous' identifications" (¶ 31). Rather, identifications
produced by accidental confrontations are to be evaluated by the trial
judge under Wis. Stat. section 904.03. Although most often such issues
will be left to the jury as credibility assessments, the trial judge's
role as limited gatekeeper obligates the judge to scrutinize the
reliability of such evidence (see id.).
"In exercising its gate-keeping function, the court should consider
whether cross-examination or a jury instruction will fairly protect the
defendant from the unreliability of the identification. The court may
take a number of other factors into consideration, including those we
have articulated in ¶¶38-40, if appropriate, but litigants and
trial courts should not be bound to an inflexible list of factors. We
urge circuit courts, with assistance from the litigants before them, to
take into consideration the evolving body of law on eyewitness
identification. Any tests for reliability and suggestiveness in the
eyewitness identification context should accommodate this still-evolving
jurisprudence, along with the developing scientific research that forms
some of its underpinnings" (¶ 54).
Justice Butler concurred but wrote separately to stress his
understanding that the court was not modifying State v.
Marshall, 92 Wis. 2d 101, 284 N.W.2d 592 (1979) at this time.
(Marshall raised the idea that even nonpolice-orchestrated
identifications might violate due process (see ¶¶
46-47)).
Sentencing - Judicial Reliance on Inaccurate Information
State v.
Tiepelman, 2006 WI 66 (filed 9 June 2006)
In sentencing the defendant the circuit court relied on inaccurate
information about the defendant's conviction record. The defendant filed
a postconviction motion seeking resentencing, arguing that the circuit
court violated his right to due process because of its use of the
inaccurate information. The circuit court denied the motion. In a
published decision the court of appeals affirmed. It concluded that,
although the defendant had met his burden of showing the inaccuracy of
the information, he failed to prove that the circuit court
prejudicially relied on the inaccurate information.
See 2005 WI App 179.
The issue before the supreme court was whether, on a motion for
resentencing based on the circuit court's alleged reliance on inaccurate
information, a defendant must prove that the circuit court
actually relied on the inaccurate information, or that the
court prejudicially relied on the inaccurate information.
"Whether the test is actual reliance or prejudicial reliance is
significant. Obviously, establishing prejudicial reliance presents a far
more difficult barrier for a defendant to overcome than establishing
that the circuit court actually relied on inaccurate information at
sentencing" (¶ 2 n.2).
In a majority opinion authored by Justice Crooks, the supreme court
reversed the court of appeals. "We hold that in a motion for
resentencing based on a circuit court's alleged reliance on inaccurate
information, a defendant must establish that there was information
before the sentencing court that was inaccurate, and that the circuit
court actually relied on the inaccurate information. Here, the court of
appeals applied the wrong test - prejudicial reliance - when it affirmed
the circuit court. We must, therefore, reverse that affirmance, and
withdraw any language in [numerous prior decisions] to the contrary.
Only after the defendant meets this burden to show that the sentencing
court actually relied on inaccurate information, does the burden then
shift to the state to establish that the error was harmless. Here the
parties agree, as does this court, that there was inaccurate information
actually relied on by the circuit court at sentencing. It seems clear
that the parties also agree that the issue of harmless error was not
developed to the degree necessary to assist this court in resolving that
issue, and since they also agree that this matter should be remanded for
resentencing, it is appropriate under such circumstances that we accept
their stipulation. We, therefore, reverse the decision of the court of
appeals and remand this case to the circuit court for resentencing"
(¶ 31).
Justice Roggensack filed a dissenting opinion.
Search and Seizure - Search Incident to Arrest - Administration of
Laxatives
State v.
Payano-Roman, 2006 WI 47 (filed 18 May 2006)
The defendant was the subject of a drug surveillance operation. When
a deputy sheriff approached the defendant's vehicle, he observed the
defendant put a clear plastic baggie containing a white powdery or
chunky substance into his mouth. Based on the packaging of the
substance, the deputy believed it was heroin. The defendant began
swallowing large amounts of air as if to swallow the baggie. The
officers told him to spit out the baggie, and they attempted to recover
it but were unsuccessful. They arrested the defendant for possession of
a controlled substance and had him conveyed to a hospital. Once there
the investigating deputy was told by the staff that it was hospital
policy to admit the defendant for his safety because it could be fatal
if the bag broke. Another officer was told that the defendant was being
admitted to the hospital for possible ingestion of a controlled
substance that could lead to an overdose.
The defendant was eventually placed in a private hospital room, where
he remained handcuffed. At least one officer stayed with him at all
times. The defendant was given six doses of a liquid laxative by one of
the officers after medical personnel made the determination that a
laxative should be administered. Ultimately, the baggie was recovered by
the officers from the defendant's stool. Its contents were tested and
determined to be heroin.
The state charged the defendant with possession of heroin. The
defendant subsequently filed a motion seeking to suppress the evidence,
arguing that the administration of the laxative constituted an
unreasonable search under the Fourth Amendment. The state argued that
the Fourth Amendment did not apply because it was the private action of
hospital personnel that allowed the officers to find and recover the
heroin. The circuit court denied the motion. In a published decision,
the court of appeals reversed. See 2005 WI App 118. In a
majority decision authored by Justice Bradley, the supreme court
reversed the court of appeals.
The appeal presented two issues: "(1) whether the administration of
the laxative that resulted in the recovery of the baggie of heroin from
[the defendant's] stool was a government search or a private search, and
(2) whether, if the search was a government search, it was reasonable
under the Fourth Amendment" (¶ 15).
On the matter of Fourth Amendment applicability, the court began its
analysis by noting that private searches are not subject to the Fourth
Amendment's protections because the Fourth Amendment applies only to
government action. Three requirements must be met for a search to be a
private search: "(1) the police may not initiate, encourage or
participate in the private entity's search; (2) the private entity must
engage in the activity to further its own ends or purpose; and (3) the
private entity must not conduct the search for the purpose of assisting
governmental efforts" (¶ 17 (citing State v. Rogers, 148
Wis. 2d 243, 435 N.W.2d 275 (Ct. App. 1988))). A search may be deemed a
government search when it is a " joint endeavor" between private and
government actors. However, the mere presence of a government official
will not necessarily transform a private search into government action.
"The question of whether a search is a private search or a government
search is one that must be answered taking into consideration the
totality of the circumstances" (¶ 21).
Applying these standards the court concluded that "[the defendant]
established by a preponderance of the evidence that the search meets the
test for a government search. The totality of the facts shows that the
officers and medical personnel were engaged in a joint endeavor to speed
the passage of the baggie of drugs through [the defendant's] system. The
administration of the laxative had a dual purpose, medical treatment and
the recovery of evidence of a crime. Moreover, [one of the officers]
directly participated in the administration of the laxative to [the
defendant]. This is not a case involving the `mere presence' of a police
officer. There can be no question on this record that one purpose of the
laxative procedure was medical treatment. However, when we consider all
the circumstances of this case, we conclude that the medical purpose of
the procedure cannot insulate the simultaneous evidence-gathering
purpose from Fourth Amendment scrutiny" (¶¶ 28-29).
The court next turned to the question of whether the search violated
the Fourth Amendment. After identifying a "search incident to arrest" as
an applicable exception to the warrant requirement, the court proceeded
to determine whether the scope and nature of the warrantless search met
the reasonableness requirements of the Fourth Amendment. "[E]ven when
one or more of the warrant exceptions is present, an intrusion into the
body demands something more: The scope and nature of the intrusion must
be reasonable" (¶ 42). In making this assessment, the court turned
to Winston v. Lee, 470 U.S. 753 (1985), in which "the United
States Supreme Court applied a three-factor balancing test to determine
the reasonableness of a search involving a medical procedure that
intruded on a criminal suspect's bodily integrity. Under that test,
courts examine (1) the extent to which the procedure may threaten the
safety or health of the individual and (2) the extent of the intrusion
upon the individual's dignitary interests in personal privacy and bodily
integrity. They then weigh these two factors against (3) the community's
interest in fairly and accurately determining guilt or innocence"
(¶ 37).
Applying these factors the court concluded that the balance in this
case tipped in favor of the state. "Although the laxative procedure
resulting in the recovery of the baggie of heroin from [the defendant's]
stool was a significant intrusion on his dignitary interests, that
intrusion was justified under the circumstances here. Not only does the
record suggest that the procedure was medically appropriate, but also it
shows that the officers had a clear indication that [the defendant's]
stool would contain evidence of a crime. They were justified in seeking
to preserve the evidence to facilitate the community's interest in
determining guilt, which would have been more difficult in [the
defendant's] case had the police not recovered the baggie of heroin. In
short, balancing the Winston factors as applied to the
circumstances here leads us to the conclusion that the search was
reasonable. Although we conclude that the search in this case was
reasonable, this is not to say that the administration of a laxative in
all future cases will be reasonable. It bears repeating that we arrive
at our conclusion based on the totality of circumstances presented"
(¶¶ 61-62).
Chief Justice Abrahamson filed a dissenting opinion that was joined
by Justice Butler.
Habeas Corpus - Ineffective Assistance of Appellate Counsel -
Laches
State ex rel. Coleman v.
McCaughtry, 2006 WI 49 (filed 18 May 2006)
This case involved a writ of habeas corpus filed in 2004 alleging
ineffective assistance of appellate counsel in 1987. In the underlying
case the petitioner was convicted of numerous felonies and was sentenced
to 80 years in prison. His postconviction counsel at the time allegedly
told the petitioner that there was no chance of obtaining relief on
appeal, and no direct appeal was ever taken. Except for some
correspondence between the petitioner and postconviction counsel in 1987
in which the petitioner indicated an awareness of a potential
suppression issue and a dissatisfaction with his attorney's decision not
to proceed, the petitioner did nothing to pursue postconviction relief
for more than 16 years.
In the present litigation the state asserted that the petitioner's
claim is barred by laches. The court of appeals agreed and dismissed the
petition for the writ. The court of appeals found that the petitioner
unreasonably delayed bringing his claim, and the court of appeals
assumed that the delay prejudiced the state. In a majority decision
authored by Justice Roggensack, the supreme court reversed.
In connection with the state's assertion of a laches defense, the
supreme court employed a three-element test, in which "the first element
is unreasonable delay in bringing the claim and the other two elements
apply to the party asserting laches: lack of knowledge (that the claim
would be brought) and effect (prejudice)" (¶ 28). In this case the
supreme court agreed with the court of appeals that the state had proved
that the petitioner's delay was unreasonable as a matter of law
(see ¶ 34). However, the supreme court found that "the
court of appeals erred when it assumed the State was prejudiced by [the
petitioner's] unreasonable delay, instead of requiring the State to
prove a factual basis for prejudice. Therefore, we reverse the court of
appeals decision that laches precludes [the petitioner's] petition for
writ of habeas corpus, and we remand the matter to the court of appeals
to decide how to develop a sufficient factual record" (¶ 37).
Justice Butler filed a concurring opinion that was joined by Chief
Justice Abrahamson and Justice Bradley.
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Insurance
Claims - Overdue Payment - Interest - Third-party Demand
Kontowicz v. American
Standard Ins. Co.,
2006 WI 48 (filed 18 May 2006)
This appeal consolidated two cases in which plaintiffs sought
interest payments from a tortfeasor's insurer pursuant to Wis. Stat.
section 628.46. The circuit court awarded the interest payments, but the
court of appeals reversed in each case. The issue before the supreme
court was "whether § 628.46, which imposes a 12 percent simple
interest rate for overdue payment of an insurance claim, applies to the
insurance company of a negligent tortfeasor and, thus, allows the
recovery of interest by a third-party claimant, such as the
plaintiffs/petitioners here, injured by such tortfeasor" (¶ 1).
The supreme court, in an opinion written by Justice Crooks, reversed
the court of appeals. The majority succinctly summarized its holding as
follows: "We conclude that when there is clear liability, a sum certain
owed, and written notice of both, the plain language of Wis. Stat.
§ 628.46, incorporating by reference Wis. Stat. § 646.31(2),
imposes 12 percent simple interest on overdue payments to third-party
claimants in such personal injury claims and actions. However, we limit
our holding to only those situations in which three conditions to
trigger the interest are met. First, there can be no question of
liability on the part of the insured. Second, the amount of damages must
be in a sum certain amount. Third, the claimant must provide written
notice of both liability and the sum certain amount owed. We further
hold that claims concerning the issue of interest due under §
628.46 may be bifurcated under Wis. Stat. § 805.05(2), and that in
the case of [one of the plaintiffs], the award of interest should be in
accord with Wis. Stat.§ 807.01(4), rather than § 628.46"
(¶ 2).
The majority addressed the statute's plain language and also looked
to "extrinsic sources," the effect of 1999 amendments, and public
policy. The court rejected the insurers' contention that only a judgment
or settlement could provide the statutorily required "knowledge of
liability" and the amount of damages. "Once the insurer has had written
notice of the `fact of a covered loss' and the `amount of the loss,' it
must pay within 30 days, unless it has `reasonable proof' that it is
not, in fact, responsible for the payment" (¶ 50).
In the case of plaintiff Kontowicz, liability and the other
conditions were clear and the plaintiff was entitled to the interest on
varying amounts, as determined by the dates of the written notices
(see ¶ 53). As to the other plaintiff, Buyatt, a
preexisting injury meant that the insurer's responsibility was in
reasonable dispute, but nonetheless he was entitled to interest pursuant
to Wis. Stat. section 807.01 as of the date of a settlement offer
(see ¶ 54).
Justice Prosser dissented on the ground that the legislature never
intended to authorize third-party liability based on the statute's
history and language.
Subrogation - Conflicts of Law - "Made-whole" Doctrine
Drinkwater v. American
Family Ins. Co.,
2006 WI 56
Drinkwater was injured in a motor vehicle accident in Wisconsin. His
medical insurance carrier, an Iowa corporation (the Plan), paid his
medical expenses through his employer's health insurance plan. On
certification from the court of appeals, the supreme court analyzed
"whether Iowa law or Wisconsin law applies to the Plan's subrogation
claim against Drinkwater." Applying choice-of-law principles, the court
held that Wisconsin law governed the action and "that the Plan is not
entitled to subrogation against Drinkwater's recovery because he was not
made whole under Wisconsin law" (¶ 2).
Writing for the court, Justice Bradley began by reviewing "the
development and status of the made-whole doctrine in Wisconsin," a
doctrine so well-rooted that it "can trump express language in an
insurance contract" (¶¶ 15, 23). Although the contract here
expressly provided that Iowa law controlled, Wisconsin's long-standing
adherence to the made-whole doctrine compelled the court to apply
choice-of-law principles rather than simply adhere to the contract's
language. The court conceded that the case law on conflicts of law
needed to be tidied up but concluded that it must "apply the five
choice-influencing factors" set forth in case law. This was necessary
because it was "not `clear' whether Iowa's contacts are of `greater
significance' [than Wisconsin's], yet Iowa's contacts are not `so
obviously limited and minimal' that application of Iowa law would
constitute officious intermeddling" (¶ 43).
On this record the court was satisfied that the five
choice-influencing factors - predictability, interstate order,
simplicity, attainment of the forum's interests, and application of the
"better rule" - warranted application of Wisconsin's made-whole
doctrine.
Justice Prosser dissented. He praised Wisconsin's made-whole doctrine
but was not persuaded by the majority's reasoning. "The rule of this
case is that Wisconsin law will trump Illinois or Iowa subrogation law
on a Wisconsin injury to a Wisconsin resident when the case is tried in
a Wisconsin court. What is not clear is what the result would be if
there were a Wisconsin injury to an Illinois or Iowa resident and the
case were tried in a Wisconsin court against the insured's home state
insurer (like Medical Associates Health Plan) claiming subrogation
rights. Because Wisconsin is visited by hundreds of thousands of
out-of-state tourists, this sort of scenario must be anticipated"
(¶¶ 76-77).
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Torts
Emergency Aid - Good Samaritan
Mueller v. McMillian
Warner Ins. Co., 2006 WI 54 (filed 25 May 2006)
The plaintiff, a teenage girl, was injured while riding an
all-terrain vehicle (ATV) driven by Switlick. Switlick's parents
observed that the girl was injured, provided some care, and put her to
bed. The next morning the Switlicks called for an ambulance when they
noticed that the plaintiff was confused and disoriented. The plaintiff
sued the Switlicks on several grounds, including their negligence in
failing to summon emergency medical assistance sooner. The circuit court
granted summary judgment in favor of the Switlicks on the ground that
they were immune from liability under Wis. Stat. section 895.48(1). The
court of appeals reversed.
The supreme court, in an opinion written by Chief Justice Abrahamson,
affirmed the court of appeals. The dispositive issue was whether the
Good Samaritan Statute, Wis. Stat. section 895.48(1), shielded the
Switlicks from liability for their alleged negligence. For the first
time the court construed the statute's requirement that the emergency
care be rendered at the "scene of any emergency or accident." Here the
ATV accident occurred in the "woods" but the negligent care occurred at
the Switlick's home. "Taking into account the text, the statutory
history, and the purpose of the Good Samaritan statute, we conclude
that, whatever the precise scope of `scene of any emergency or
accident,' the phrase `scene of any emergency' is sufficiently broad to
include the Switlicks' home where the injured, bleeding plaintiff
arrived after the ATV incident. `Scene of any emergency' is sufficiently
broad to include in the present case not only the place where the
incident or injury occurred but also the place to which the plaintiff
was moved. As the circuit court stated, the `scene of any emergency' may
follow the injured person" (¶ 32).
The court also construed the statute's second element, "emergency
care." Although the phrase cannot be defined with a "bright-line rule,"
the court nonetheless provided a "flexible, broad working definition of
emergency care" (¶ 36). "We start by defining `emergency,' which
means a sudden, unexpected happening or unforeseen occurrence or
condition. `Emergency medicine' means the evaluation and initial, rapid
treatment of medical conditions caused by trauma or sudden illness. A
working definition of `emergency care' in Wis. Stat. § 895.48(1)
(as it applies to a layperson) therefore would be care rendered by a
layperson in a sudden, unexpected happening, occurrence or situation
that demands immediate action until professional medical attention is
available. `Care' includes the evaluation, intervention, assistance, and
treatment of, or intervention on behalf of the injured person, or
response to medical conditions caused by an accident, trauma, or sudden
illness" (¶ 37).
"Put differently, `emergency care' under the statute refers only to
the initial evaluation and immediate assistance, treatment, and
intervention at the scene of an emergency during the period before care
can be transferred to professional medical personnel" (¶ 46). As
applied to the record, the Switlicks may have provided emergency care
when they were first evaluating plaintiff's condition and her need for
immediate medical care but their "care" for the plaintiff in the hours
that followed was not immunized by the statute.
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Wisconsin
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