Wisconsin
Lawyer
Vol. 81, No. 8, August
2008
Court of Appeals Digest
This column summarizes selected
published opinions of the Wisconsin Court of Appeals. Prof. Daniel D.
Blinka
and Prof. Thomas J. Hammer invite comments and questions about the
digests.
They can be reached at the Marquette University Law School, 1103 W.
Wisconsin
Ave., Milwaukee, WI 53233, (414) 288-7090.
by Prof. Daniel D. Blinka & Prof. Thomas J. Hammer
Appellate Procedure
Standing - "Aggrieved" Party - Class Action
Kiser v.
Jungbacker, 2008 WI App 88 (filed 7 May 2008) (ordered
published
25 June 2008)
A class action lawsuit resulted in a settlement liquidating a
commercial real estate
investment limited partnership. The general partner (Century Capital)
appealed an order that
awarded attorney fees of $500,000 and costs of $50,000 from the $3
million settlement fund.
The court of appeals, in an opinion authored by Judge Neubauer,
held that the
appellants lacked standing because they are not "aggrieved."
"The issue presented is whether Century
Capital has standing to appeal the award to class counsel of attorney
fees and costs from an
established settlement fund. The rule is that a person may not appeal
from a judgment or order
unless aggrieved by it. A person is aggrieved if the judgment or order
bears `directly and
injuriously' upon his or her interests and affects the person `in some
appreciable manner'" (¶ 11).
"Century Capital concedes that it has no financial stake in
the amount of fees awarded
to class counsel out of the settlement fund. Its liability is limited to
the approximately
$3 million settlement paid to the class, as the attorney fees are to be
taken from the
settlement payments. Thus, Century Capital's only alleged basis for
standing is its claimed
fiduciary obligation to the class to ensure that the most money possible
could end up in the
limited partners' pockets. This does not support standing to appeal
under Wisconsin law" (¶ 12).
"Century Capital and class counsel worked together to prepare the
class notice for distribution
to class members. When the parties submitted the class notice to the
court, Century Capital
expressly stated that it was `agreeable to' and had `no objection to the
notice that was
submitted for the Court's review.' The notice plainly explained the
settlement terms, class
counsels' fees and how class members could object and get more
information. Not one class member
objected to the settlement or to class counsel's proposed fees or
expenses" (¶ 16).
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Criminal Law
Identity Theft - Defaming a Public Official
State v.
Baron,
2008 WI App 90 (filed 29 May 2008) (ordered published 25 June 2008)
This case involves the application of Wisconsin's identity theft
statute to a person
who misappropriated the identity of a public official. The criminal
complaint charged that
the defendant, an emergency medical technician, hacked into the work
computer of his supervisor,
F, and forwarded emails found therein to various city and county workers
and to F's wife.
These emails suggested that F was having an extramarital affair. The
emails were forwarded so as
to appear to have come from F, not the defendant. The day after the
defendant circulated
the emails, F committed suicide.
The circuit court ruled that the identity theft statute (Wis.
Stat. § 943.201(2)(c)),
which in part prohibits the unauthorized use of a person's identity for
the purpose of harming
an individual's reputation, is unconstitutional as applied in the
present case. It reasoned
that because the person whose identity the defendant misappropriated was
a public official,
application of the identity theft statute violated his First Amendment
right to defame a public
official with true information (see ¶ 1). In a decision
authored by Judge Bridge, the court
of appeals reversed the circuit court.
To convict the defendant of identity theft, the state had to
prove that the defendant
1) intentionally used F's personal identifying information 2) for the
purpose of harming F's
reputation 3) by intentionally representing that he was F 4) without F's
consent. It was
undisputed that the defendant's purpose in misappropriating F's identity
was to harm F's reputation.
The defendant argued that, because the "purpose" element of
harming an individual's reputation
is an element of identity theft that the state must prove, the statute
directly punished him
for his intent to defame and indirectly punished him for his disclosure
of defamatory
information, in violation of his First Amendment rights
(see ¶ 9).
The court of appeals disagreed with the defendant. Said the
court, "The flaw in the
defendant's logic is that it focuses on the `purpose' element viewed in
isolation. Instead, what
is criminalized by the identity theft statute is the
whole act of using someone's identity
without their permission plus using the identity for one of the
enumerated purposes, including
harming another's reputation. The statute does not criminalize each of
its component parts
standing alone"
(¶ 10). "In sum, the identity theft statute neither
prohibited [the defendant] from
disseminating information about [F] nor prevented the public from
receiving that information.
Instead, the statute prohibited [the defendant] from purporting to be
[F] when he sent the emails.
We conclude that the identity theft statute as applied to [the
defendant] does not criminalize
his constitutionally protected right to defame a public official.
Accordingly, we conclude that
the State has met its burden of proving beyond a reasonable doubt that
the statute is
constitutional" (¶¶ 14-15).
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Criminal Procedure
Guilty Pleas - Plea Colloquy - Use of Guilty Plea Questionnaire
State v.
Hoppe,
2008 WI App 89 (filed 28 May 2008) (ordered published 25 June 2008)
The defendant, Hoppe, sought to withdraw his guilty pleas to
multiple counts of
possession of child pornography. He claimed that the guilty plea
procedure as conducted by the
circuit court was defective. He contended that the court did not comply
with Wis. Stat.
section 971.08 (the guilty plea statute) and other
court-mandated procedures because it accepted his guilty plea without
determining whether any
promises had been made to him, informing him of the maximum penalty he
faced, or ascertaining that
he understood the information in the plea questionnaire and the rights
he was waiving. The
circuit court denied the motion after a hearing. In a decision authored
by Judge Neubauer, the court
of appeals affirmed.
At the guilty plea hearing, the defendant was represented by
counsel. Before the
hearing, the defendant signed a guilty plea questionnaire. The plea
questionnaire and
waiver-of-rights form recited each constitutional right subject to being
waived and required that the box
next to each item be checked to signify an understanding that a plea
would result in that
right being relinquished. When filled out, the form stated that Hoppe
understood that by entering
a guilty plea, he gave up, of his own free will, his constitutional
rights to a trial, to
remain silent, to testify and present evidence, to subpoena witnesses on
his behalf, to a
unanimous verdict of 12 jurors, to confront his accusers, and to be
proved guilty beyond a
reasonable doubt. By signing the plea questionnaire, Hoppe indicated
that he "reviewed and
underst[oo]d the entire document and any attachments[,] reviewed it with
[his] attorney[s] [and]
answered all questions truthfully" (¶ 16).
At the plea hearing the judge introduced the plea questionnaire
(see ¶ 4). "[The judge] addressed Hoppe personally,
as
Wis. Stat. § 971.08 directs, and specifically invoked the
plea questionnaire Hoppe had completed. The court ascertained that Hoppe
had gone over the
questionnaire with both attorneys; that he understood `everything in the
questionnaire and waiver
of rights and the elements of the charges you're going to be pleading
to,' and that a copy of
the elements was attached; that Hoppe was satisfied he made a free,
voluntary and intelligent
plea with all of his rights in mind; that both attorneys were satisfied
that
Hoppe's plea was free, knowing and voluntary; and that there was a
factual basis for the plea. This colloquy,
which establishes that Hoppe voluntarily and knowingly waived his
constitutional rights, exceeds
that in [State v. Hansen, 168 Wis. 2d 749, 485 N.W.2d 74 (Ct.
App. 1992)], where we deemed
inadequate a plea colloquy limited to little more than asking the
defendant if he had `gone
over' the plea questionnaire with his attorney" (¶ 17).
The court noted that "[a] plea questionnaire's proper use
can lessen the extent and
degree of the colloquy otherwise required ... We do not interpret
[precedent as requiring] that,
plea questionnaire in hand, the court must revisit the particulars of
each item with a
defendant, such as Hoppe, who has expressed his full understanding and
gives the court no reason to
believe that such is not the case. We thus say here what
[State v. Moederndorfer, 141 Wis. 2d 823, 416 N.W.2d 627 (Ct.
App. 1987)] only implies: a plea questionnaire is not outside the
plea hearing; it is part and parcel of it" (¶ 18).
Accordingly, the court of appeals concluded that, "although the
plea colloquy was
brief, since Hoppe assured the trial court that he had discussed the
plea and its consequences
with both of his attorneys and that he `fully' understood the elements
of the charges and
everything in the plea questionnaire with all of his rights in mind,
Hoppe did not make a prima
facie showing that the plea colloquy was defective. Even assuming for
argument's sake that it
was flawed, Hoppe had an evidentiary hearing. The total record
establishes that the State proved
by clear and convincing evidence that his plea was knowingly and
voluntarily made" (¶ 2).
Preliminary Hearings - Adding Transactionally-related Counts in
the Information
State v.
White,
2008 WI App 96 (filed 29 May 2008) (ordered published 25 June 2008)
The state charged the defendant with delivery of a controlled
substance (a felony). At
the preliminary hearing defense counsel asked the police officer whether
he knew the identity
of the owner of the residence where the delivery occurred and whether
the defendant was a
tenant there. The prosecutor objected on relevancy grounds, and the
presiding court commissioner
sustained the objections. At the end of the hearing, the commissioner
found probable cause
to believe that the defendant had committed a felony and bound her over
for trial.
The prosecutor then filed an information that charged the
delivery count and added a
count of maintaining a drug house. The defendant moved to dismiss the
drug-house charge on the
ground that the evidence presented at the preliminary hearing did not
support probable cause for
this charge because it requires proof of dominion and control over the
house. The circuit court granted the motion, concluding that
it was unfair to allow the addition of the
drug-house charge after the defendant's attorney had been prevented from
cross-examining the officer
at the preliminary hearing on topics that were relevant to the
drug-house charge.
In a decision authored by Judge Vergeront, the court of appeals
reversed the circuit
court. It concluded that the delivery and drug-house charges are
transactionally related and
that, under existing precedent, the prosecutor could add the drug-house
charge in the
information after the defendant was bound over on the delivery charge
(see ¶ 12). "The prosecutor's successful objections
at
the preliminary hearing do not provide a basis for a different
result, and the doctrine of judicial estoppel does not apply"
(¶ 2).
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Insurance
UIM Coverage - Umbrella Policies - Notice - Ambiguity
Nault v. West Bend Mut.
Ins. Co., 2008 WI
App 91 (filed 20 May 2008) (ordered published 25
June 2008)
The Naults' son, Jason, was killed in a motorcycle/car
collision. The other driver, who
was at fault, carried a small liability policy. Jason's motorcycle had
underinsured motorist
(UIM) coverage of $100,000. The Naults also had an umbrella policy with
a limit of $1 million
issued by West Bend Mutual. The Naults claimed the umbrella policy
covered the $250,000 in
uncompensated damages. The circuit court ruled that the West Bend
umbrella policy provided no UIM
coverage.
The court of appeals, in an opinion written by Judge Hoover,
affirmed in part and
reversed in part. It affirmed the finding that the policy was not
contextually ambiguous. There
was nothing ambiguous in the policy's organization, labeling, or index.
Nor were certain
terms fatally ambiguous (see ¶¶ 12-13). "The
Naults also argue the phrase `unless this coverage
form is endorsed to provide such coverage' is ambiguous because no such
endorsement was
available, at least to them. However, the unavailability of an
endorsement would not lead a
reasonable insured to believe there was coverage. The exclusion
unambiguously states there is no UIM
coverage absent an endorsement. A reasonable insured would conclude that
if no endorsement
was available there was no coverage, not the opposite. In addition,
contextual ambiguity
exists when a particular policy provision is ambiguous in the context of
other parts of the
policy, not in the context of facts that may or may not have been known
to an insured" (¶ 14).
West Bend failed, however, to provide the statutorily mandated
notice that its
umbrella policies that are excess over auto liability policies could
include UIM coverage as well.
See Wis. Stat. § 632.32(4m). West Bend contended that it
was
excused from providing such
notice because it did not offer excess UIM coverage under umbrella
policies it issued after
January 2004. "West Bend does not attempt to reconcile its position
with this statutory language;
instead, it simply asserts that `it makes no sense to even discuss
giving notice of
availability of something that did not exist.' However, we see no way to
read the statute except as
requiring West Bend to offer excess UIM coverage and to provide notice
that the coverage is
available. West Bend's decision to not offer excess UIM coverage was
contrary to the statute,
and cannot excuse its failure to give the required notice" (¶
23).
Moreover, Stone v. Acuity, 2008 WI 30, "holds that if
an
insurer issues a qualifying
umbrella policy but does not give the notice required under Wis. Stat.
§ 632.32(4m), the remedy is
to read in the minimum amount of coverage specified in
§ 632.32(4m)(d). Stone, [2008 WI 30], ¶ 61. On
remand, the court shall enter judgment holding West Bend's umbrella
policy includes
excess UIM coverage with limits of $50,000 per person and $100,000 per
accident. See Wis. Stat. § 632.32(4m)(d)"
(¶
28). The court of appeals, plainly troubled by the application of
those rules to these facts, closed by "suggesting" that
various
"anomalies" (for example, the clear disjunct between the
minimum UIM coverage and corresponding umbrella policies) be
"revisited" (¶ 34).
Illusory Coverage - Preclusion
Ellifson v. West Bend
Mut. Ins. Co., 2008 WI App 86 (filed 14 May 2008) (ordered
published
25 June 2008)
A sheriff's deputy, Ellifson, was injured in a car accident
while working in his capacity
as a deputy. He settled with the other drivers and then sued his own
underinsured motorist
(UIM) carrier, West Bend Mutual, which in turn brought a third-party
action against the
county's insurer, Wisconsin Municipal, seeking a declaration that the
latter was Ellifson's primary
UIM insurer. The circuit court granted summary judgment in favor of
Wisconsin Municipal.
The court of appeals affirmed in a decision written by Judge
Anderson. First, it held
that Wisconsin Municipal was not bound by a circuit court ruling in a
parallel, but otherwise
unrelated, case that also involved Ellifson and Wisconsin Municipal.
There was no final judgment
on the merits but instead only a nonfinal order that denied summary
judgment and found
insurance coverage. "Moving to the merits" of this case, the
court held that "Wisconsin Municipal's
UIM coverage is not illusory and
is not contextually
ambiguous.... UIM coverage is illusory
only if there are no circumstances under which benefits will ever be
paid under the policy" (¶
18). West Bend argued that the policy's exclusion of
"employees" and "volunteers" from the ranks
of the "insured" rendered the policy illusory. Rejecting this
contention, the court of
appeals listed a number of scenarios in which the UIM coverage applied
(for example, situations
involving adult prisoners, arrestees, or juvenile detainees).
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Marital Property
Marital Property - Probate
Joyce v.
Joyce,
2008 WI App 92 (filed 21 May 2008) (ordered published 25 June 2008)
As succinctly framed by Chief Judge Brown, "[t]his case is
about whether a widow, who
was left out of an [individual retirement account] IRA and missed the
one-year deadline to make
a claim alleging an improper gift under the Marital Property Act, can
nevertheless breathe
life into her claim by asserting it as part of the probate of her late
husband's will. She
raises numerous arguments that she can do it this way, but we shoot them
all down for the simple
reason that she is comparing the proverbial apples and oranges. A claim
of a marital
property interest in an asset subject to nonprobate transfer is a
completely different species from
a challenge to a will's validity. We affirm the trial court's dismissal
of her claim" (¶ 1).
Wis. Stat. section 766.70(6) "allows a person to bring an
action to recover improper
gifts of marital property made by his or her spouse. Where, as here, an
improper gift of
marital property during marriage becomes effective upon the death of the
spouse, the action is
against the gift's recipient and must be commenced within one year of
the spouse's death"(¶ 6).
The widow offered several arguments. "First, Mary Jo claims
that her original
intervention in the probate matter in March of 2006 also served as the
commencement of an action to
enforce her marital property right to the IRA under Wis. Stat.
§ 766.70(6)(b)1. She notes that,
in addition to objecting to informal probate, she filed a demand for
formal proceedings" (¶
8). This argument foundered because the IRA provided for a nonprobate
transfer to the
beneficiary and was thus a nontestamentary asset. Put differently, this
alleged "`action' had nothing to
do with [Mary Jo] asserting her marital property interest" (¶
9).
For the same reason the court rejected Mary
Jo's second argument, that the pendency of the probate matter tolled the
time limit on the marital property claim
(see ¶ 11).
Finally, the court rejected Mary Jo's contention that "her
`Petition to Determine
Interest in Certain Property,' though filed more than a year after
Michael's death, is
nevertheless timely because it relates back to her initial intervention
in the probate matter, her
demand for formal administration" (¶ 12). "[T]he fact
remains that the execution of the form and
the execution of the new will were separate acts related to separate
assets with separate
legal consequences. Further, the circumstances of the execution of the
IRA form are not the source
of her marital property claim: unlike any right she may have in the
probate estate, the
marital property claim does not depend on whether the children exercised
undue influence or
committed fraud, or whether Michael had the requisite testamentary
capacity. The only questions
are whether Michael made a gift greater than $1000 without Mary Jo's
participation, and whether
the former spouses' economic position rendered this gift reasonable....
Michael's testamentary capacity and the children's actions form the
factual basis of the probate dispute, but
they have nothing to do with Mary Jo's marital property interest in the
IRA. As such, Mary
Jo's marital property claim does not arise out of the same `transaction,
occurrence, or event'
as the probate matter, and cannot relate back to its commencement"
(¶ 14).
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Mental Commitments
Competency - Chapter 980
State v.
Luttrell, 2008 WI App 93 (filed 20 May 2008) (ordered published
25 June 2008)
This case involves an appeal from a nonfinal order in a chapter
980 action to
commit Luttrell as a sexually violent person. The issue was whether
"a person against whom a
Wis. Stat. ch. 980 petition has been filed is entitled to a competency
evaluation under Wis. Stat.
§ 971.14" (¶ 5). The circuit court said no.
The court of appeals, in an opinion written by Judge Fine,
affirmed. Earlier statutes
had applied section 971.14 to chapter 980 commitments, but these
statutes had been repealed
(see ¶ 8). In sum, neither present statutes nor
constitutional due process protections compel a
competency determination in such actions. The court explained why later
statutory changes
responded to "cracks" in the civil commitment laws
(see ¶ 11).
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Municipal Law
Annexation - Direct Annexation by Unanimous Approval
Town of Merrimac v.
Village of Merrimac, 2008 WI App 98 (filed 22 May 2008)
(ordered
published 25 June 2008)
Property owners in the town of Merrimac petitioned the village
of Merrimac for a
direct annexation by unanimous approval pursuant to Wis. Stat.
section 66.0217(2). The village,
in turn, passed an ordinance annexing the property. The town filed suit,
alleging that the
annexation was void because the annexed property was not contiguous to
the village and because
the village failed to comply with a requirement in
section 66.0217(14)(a) that the village pay
the town a property tax set-off. The village moved to dismiss, and the
circuit court granted
the motion. In a decision authored by Judge Lundsten, the court of
appeals affirmed the
circuit court.
The issue before the appellate court was whether
section 66.0217(11)(c) bars a town
from contesting in court a particular type of annexation, namely, a
"direct annexation by
unanimous approval" under section 66.0217(2). Section
66.0217(11)(c) provides that "[n]o action on
any grounds, whether procedural or jurisdictional, to contest the
validity of an annexation
under sub. (2) [a direct annexation by unanimous approval], may be
brought by any town.
The court of appeals concluded that
"§ 66.0217(11)(c) bars a town from contesting in court
a particular type of annexation, namely, a `direct annexation by
unanimous approval'
under § 66.0217(2). Consequently, we need not address the
merits of the Town's attack on the
validity of the annexation, specifically, whether the annexation is void
because the annexed property
is not contiguous with Village property and because the Town failed to
comply with the
property tax set-off requirement" (¶ 19). The appellate court
also held that the town may not obtain review of the annexation
by the common law writ of certiorari (see ¶ 17).
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Real Property
Real Estate Sales Contracts -Attorney-approval Clauses
Devine v.
Notter, 2008 WI App 87 (filed 7 May 2008) (ordered published 25
June 2008)
The buyer made an offer to purchase residential property that
was accepted by the
sellers. Among the documents executed by the parties was one titled
"Buyers and Sellers Attorney's
Approval." This document gave both parties the opportunity to
obtain legal assistance and
seek modification of the deal, but only within five days of the signing
of the offer. Ten days
before closing (and one month after the offer to purchase was accepted),
the sellers notified
the buyer that they would not complete the sale. In subsequent
litigation the circuit court
granted judgment of specific performance in favor of the plaintiff
buyer. In a decision authored
by Chief Judge Brown, the court of appeals affirmed.
The defendant sellers argued that the attorney-approval document
signed by the parties
rendered the entire contract between them illusory and unenforceable.
The court of appeals
disagreed. It held that the contract at issue was not illusory. Said the
court,
"The attorney review period was strictly limited in time and, since
the time elapsed without objection,
we see no reason both parties should not be bound to the
contract" (¶ 1).
Attorney-approval clauses, which are widely used in other
jurisdictions
(see ¶ 6), "serve generally to allow the parties to a
real-estate contract to get a deal signed in a timely
fashion, while reserving the right to consult with an attorney about
what is, for many people,
the most important transaction (and legal commitment) that they will
ever make.... And we are
convinced that, at least where the review period is strictly limited,
such clauses do not render
a real-estate deal illusory" (¶¶ 7-8). Because in this
case no objection was made within
the five-day window, the contract remains in force and the buyer is
entitled to specific
performance (see ¶ 10).
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Torts
Economic Loss Doctrine - Livestock - Contracts
Wilson v.
Tuxen,
2008 WI App 94 (filed 20 May 2008) (ordered published 25 June 2008)
The Wilsons purchased a herd of dairy cattle from Tuxen. The
cattle turned out to be
diseased, and the Wilsons sued Tuxen on the ground that the cattle had
ruined their farm
business. The circuit court granted summary judgment to Tuxen and
dismissed the Wilsons' claims.
The court of appeals, in an opinion written by Judge Peterson,
affirmed in part and
reversed in part. The court first addressed the impact of the economic
loss doctrine on the
Wilsons' tort claims. "The cows purchased from Tuxen are the
defective product in this case. They
are not `property other than the product itself.'" Their loss in
value because of the disease was
a "disappointed performance expectation" (¶ 15). Tuxen
conceded, though, that a single "diseased
calf" was "other property." Since
there was enough evidence to create a factual dispute over whether
Tuxen's diseased cows infected
the calf, summary judgment was inappropriate on these claims
(see ¶ 23).
The court next addressed a series of issues pertaining to claims
under Wis. Stat.
section 95.19, which relates to diseased livestock. First, section 95.19
claims are not subject to
the economic loss doctrine. Second, three of the claims could be based
on Johne's disease,
which had infected Tuxen's cows. (Johne's disease is one of 19
statutorily enumerated diseases
to which section 95.19 applies.) Third, the Wilsons should have been
permitted to amend
their complaint to reflect these three claims
(see ¶24).
Finally, with respect to the breach of contract claim, the
Wilsons' failure to notify
Tuxen of the problem for nearly a year meant that they had failed to
give "timely notice" of
the breach as required by the Uniform Commercial Code (Wis. Stat. §
402.607(3)(a)).
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