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    Wisconsin Lawyer
    November 01, 1999

    Wisconsin Lawyer November 1999: Court of Appeals Digest

    Court of Appeals Digest


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

    | Appeals | Civil Procedure | Contracts |
    | Criminal Evidence | Criminal Procedure |
    | Employment Law | Insurance | Mobile Homes |
    | Motor Vehicle Law | Municipal Law |
    | Sexual Predators | Torts |


    Appeals

    Judicial Substitutions - Entry of Order and Judgments - Proper County

    State v. Williams, No. 98-3338-CR (filed 11 Aug. 1999) (ordered published 28 Sept. 1999)

    A criminal prosecution was commenced against the defendant in Racine County but it was assigned to a Kenosha County judge when a substitution was filed. The state filed a notice of appeal on Nov. 13 from an order on Sept. 28 granting a new trial. The court of appeals raised a question about when the Sept. 28 decision was entered.

    In a per curiam opinion, the court held that "when a judge from a different county is assigned to a case in response to a substitution request, orders and judgments of the assigned judge must be entered in the office of the clerk of circuit court in which the action was originally filed in order to commence the applicable appeal period under sec. 808.04, Stats." Put another way, "[p]ossession by the assigned judge's in-county clerk does not constitute filing and entry for appeal purposes."

    In this case the state had the burden of proving that its notice of appeal was timely. By failing to show when the Racine County clerk came into possession of the Sept. 28 decision, the state left the appellate court in an "evidentiary vacuum" warranting dismissal of the appeal.


    Civil Procedure

    Intervention - Requirements of Wis. Stat. section 803.09(1)

    Wolff v. Town of Jamestown, No. 98-2974 (filed 22 July 1999) (ordered published 28 Sept. 1999)

    The Wolffs sought to develop for residential use a rugged tract of land overlooking the Mississippi River in the town of Jamestown in Grant County. The land has no direct highway access from Wisconsin, but can be reached only via a circuitous route south into Illinois. The land is currently zoned A-2, which permits primarily agricultural uses. To develop the land as they wished, the Wolffs had to obtain a conditional use permit from the county, which has zoning authority over the property by virtue of the town's approval of the county zoning ordinance. The town nevertheless retained substantial responsibility for the well-being of its residents and the property within its boundaries.

    The town consistently opposed the Wolffs' development proposal on the grounds that it would be difficult to reach the property in order to provide necessary services, such as fire protection, ambulance service, and bus transportation for school children. The Wolffs' application for a conditional use permit was initially approved by the county planning and zoning committee. The town appealed that approval to the Grant County Board of Adjustment and the board ultimately denied the Wolffs' application. The Wolffs then filed suit in circuit court, seeking certiorari review of the board's decision and a writ of mandamus compelling the board to approve the application.

    The town moved to intervene in the Wolffs' suit. The circuit court denied the motion on the grounds that the town's interests were adequately represented by the county, which was already a party to the suit. The town appealed.

    The sole issue before the court of appeals was whether the town was entitled by right to participate as a party in the litigation. In a decision authored by Judge Deininger, the court of appeals answered in the affirmative.

    The Wisconsin Rules of Civil Procedure permit an outsider with an interest in a lawsuit to intervene and participate as a party to the suit. Section 803.09(1) of the Wisconsin Statutes provides that an outsider has a right to intervene when four conditions are met: 1) the potential intervenor makes a timely motion to intervene; 2) the potential intervenor claims an interest in the property or transaction that is the subject of the suit; 3) the disposition of the suit may, as a practical matter, impair or impede the potential intervenor's ability to protect that interest; and 4) the potential intervenor's interest is not adequately represented by one or more parties to the suit.

    In this case the appellate court concluded: 1) the town's motion to intervene was timely; 2) the town has a legally protected interest in that it has a statutory right to challenge the board of adjustment decision via an action in certiorari and, further, the town has a substantial interest in the well-being of the residents and property located within its boundaries; 3) the town has already prevailed before the board of adjustment and its victory is now being attacked in this action, thereby giving the town an interest in a lawsuit the disposition of which could impair or impede the town's ability to protect its interest; and 4) though the town and county are not wholly adverse parties, the town may have more at stake than the county should the Wolffs secure a reversal of the board of adjustment decision. Accordingly, the town met all of the requirements of the statute cited above and was entitled by right to intervene in the Wolffs' suit against the county.


    Contracts

    Alterations - Duty to Read - Contract Reformation - Attorney as Witness

    Hennig v. Ahearn, No. 98-2319 (filed 26 Aug.1999) (ordered published 28 Sept. 1999)

    Hennig brought claims against his former employer, Heartland Development Corporation, alleging misrepresentation and seeking contract reformation. While negotiating Hennig's executive compensation contract, Heartland's president, Ahearn, allegedly altered a critical provision at the last minute but failed to point out the change. The trial court ruled that Ahearn had no duty to disclose the change and that Hennig's negligence barred the claims as a matter of law.

    The court of appeals, in an opinion written by Judge Deininger, reversed. The opinion carefully analyzes the law and closely scrutinizes the record in some detail. Only a summary of the court's conclusions are presented. As to the misrepresentation claim, the court first determined that Ahearn had a duty to disclose the last minute change. There was sufficient evidence in the record from which "a jury could find that Ahearn made the last-minute change in the compensation arrangement hoping that Hennig would not notice it, and that Hennig would thereby sign an agreement that Hennig would not have knowingly accepted." Second, as to the issue of justifiable reliance, the evidence raised a question of fact for the jury, which could conclude that the change was "not obvious," consisting of "nine words inserted in the middle of a paragraph-long, multi-part definition."

    Second, the trial court erred in concluding that contract reformation was not appropriate. Hennig "established a basis for his reformation claim by presenting evidence of his unilateral mistake and Ahearn's possibly fraudulent or inequitable conduct." The court of appeals set forth the elements of a contract reformation claim, the evidentiary burden, and its assessment of the record.

    The court also addressed several evidentiary issues. Most importantly, error occurred when the trial judge barred Hennig's attorney from testifying about the status of the negotiations and his reasons for reviewing only selected portions of the final contract draft. The court analyzed the attorney's testimony as a "lay opinion" under section 907.01. The opinion also addressed the permissible scope of expert testimony offered by another attorney regarding customary business practices.


    Criminal Evidence

    Other Acts - Rule of Completeness - Defendant's Statements

    State v. Anderson, No. 98-3639 (filed 19 Aug. 1999) (ordered published 28 Sept. 1999)

    The court of appeals, in an opinion written by Judge Vergeront, affirmed the defendant's conviction for first-degree intentional homicide. The defendant murdered a woman following a quarrel over cocaine. On appeal, the defendant raised two evidentiary issues.

    First, the court of appeals, in an opinion written by Judge Brown, found no abuse of discretion in the admission of other acts evidence under section 904.04(2). Applying the framework set forth in State v. Sullivan (1998), the court addressed the use of other acts evidence (a prior sexual assault) for the purpose of providing "context." The context related to the defendant's statement, "a dead bitch can't say anything." Assessed in light of the defendant's prior sexual assault conviction, the statement established "his motive to stay out of prison and his intent to kill Boshears so she could not testify against him."

    The second issue concerned the application of the doctrine of completeness. The state introduced parts of the defendant's statements to a detective as admissions by a party opponent. The trial court, however, refused to permit the defendant to introduce other parts of his statement during cross-examination of the detective. The state argued that such an examination would permit the defendant to testify "by the back door" without ever taking the witness stand.

    The court of appeals ruled that this constituted an abuse of discretion and evidentiary error. Certain statements in the detective's report were necessary under the doctrine of completeness whether or not the defendant testified. After extensively discussing the case law, the court held that "when a defendant in a criminal case objects to testimony of his out-of-court statement as incomplete, or attempts to cross-examine the witness on additional portions of the defendant's out-of-court statement and the state objects, the court should make the two-part discretionary determination required by [State v. Eugenio] without regard to whether the defendant intends to testify. Once the court has determined that any additional portion of the statement is necessary under the Eugenio standard, it must permit the presentation of that additional portion, although the timing of that presentation is discretionary: it may occur during the state's case or when the defense recalls the witness during its case." On this record, the detective's testimony presented a misleading view of what the defendant said about his role in the murder. The court cautioned, however, that the defendant is not entitled to introduce all relevant statements about his role; rather, only those statements necessary to correct the misleading view are admissible. (In the final part of the opinion, the court found the error to be harmless.)


    Criminal Procedure

    Involuntary Intoxication - Prescription Medication - Experts - Armed Burglary

    State v. Gardner, No. 98-2655-CR (filed 11 Aug. 1999) (ordered published 28 Sept. 1999)

    The court of appeals, in an opinion written by Judge Brown, affirmed the defendant's convictions for armed burglary, sexual assault, and false imprisonment. The victim was his estranged wife. The defendant raised two lines of argument.

    First, he contended that the trial court erroneously excluded expert testimony offered to establish an involuntary intoxication defense. Addressing an issue heretofore unresolved in Wisconsin, the court held that the involuntary intoxication defense is available where the defendant was taking prescription medication. (Under Wisconsin law, involuntary intoxication must render the defendant incapable of judging right from wrong.) The court adopted the standard employed by Texas courts, which limits the involuntary intoxication defense to "(1) the defendant's unawareness of what the intoxicating substance is; (2) force or duress; or (3) medically prescribed drugs taken according to prescription." (Emphasis original.) The defense is thus inapplicable "where a patient knowingly takes more than the prescribed dosage, or mixes a prescription medication with alcohol or other controlled substance," or "voluntarily undertakes an activity incompatible with the drug's side effects." The court then examined the record, concluding that the defendant's offer of proof failed to meet the standard. The expert's "rambling theories" and speculations failed to "even suggest that the amount of Paxil (a drug) Gardner was taking could have rendered him incapable of distinguishing right from wrong." For similar reasons, the defendant failed to raise a jury issue that entitled him to an instruction on the involuntary intoxication defense.

    Second, the defendant argued that the state had to show some nexus between the burglary (entering his wife's home without consent) and the weapon he was carrying (the knife). Relying on a 1997 case, the court rebuffed the invitation. "For armed burglary, the possession of the weapon while burglarizing a home always has something to do with the crime."

    Jury Selection - Defendant's Presence - Reversible Error

    State v. Harris, No. 98-1091-CR (filed 10 Aug. 1999) (ordered published 28 Sept. 1999)

    The court of appeals, in an opinion written by Judge Fine, reversed the defendant's conviction for first-degree intentional homicide. Error occurred when the trial judge began questioning potential jurors before the defendant or his attorney were present. Although "well-intentioned," the procedure essentially handed the defendant a "pig in the poke." Since the state failed to show that the judge's conduct did not adversely affect the defendant's rights under section 971.04(1)(c) of the Wisconsin Statutes, there was a failure to show that the error was harmless beyond a reasonable doubt.

    Search and Seizure - Curtilage - Odor of Burning Marijuana - Probable Cause

    State v. Wilson, No. 98-3131-CR (filed 2 June 1999) (ordered published 17 Aug. 1999)

    A police officer went to the defendant's home looking for a female juvenile for whom he had an arrest warrant. He believed the juvenile might be at the defendant's home because of a past association between the two. As the officer approached the home, he observed children playing in the backyard. Though the defendant and his girlfriend claimed that they had instructed this officer to use the front door when visiting their home, the officer nevertheless walked into the backyard. There he asked a young girl whether she had seen the juvenile for whom he had the warrant and, when the girl denied having seen the juvenile that day, the officer asked the girl if her parents were home.

    The officer followed the child to the back door of the residence and claimed to be able to smell the odor of burning marijuana from just outside the house. The officer thereafter entered the inside landing of the premises and from that location could smell the odor of burning marijuana emanating from the basement. Almost immediately thereafter the defendant approached the officer from the basement and, after inquiring about the juvenile's whereabouts, the officer asked the defendant about the marijuana odor. The defendant responded by stating that he had to use the bathroom, whereupon the officer advised him that he could not go until he was searched. This exchange between the two was repeated and, in an ensuing search of the defendant's pocket, the officer found marijuana.

    The defendant was then placed under arrest for possession of a controlled substance. After conviction on this charge he appealed a circuit court order denying his motion to suppress evidence. He claimed that the officer's unlawful invasion of his home's curtilage and the subsequent unlawful search of his person tainted both the physical evidence seized and the statements he made following arrest.

    In a decision authored by Judge Myse, the court of appeals concluded that the officer unlawfully penetrated the curtilage of the defendant's home. The curtilage is the area immediately adjacent to the home to which a person extends the intimate activities associated with the privacies of life. The appellate court reached its conclusion not only because the officer was standing on the pavement immediately adjoining the back entrance to the home, but also because the nature and use of the defendant's property demonstrate that the area where the officer was standing was one of intimate activity and that there was a reasonable expectation of privacy there. The state conceded that a backyard area where children are playing is associated with the privacies of life. In addition, the back door of a home is intimately related to the home itself and to home activities because it provides access and egress to the backyard and garage area. While there were no apparent enclosures surrounding the home, the back door of the home could not be seen from the front of the house or from the street or sidewalk. While the rear door could perhaps be seen from other areas outside the property, this itself does not mean that there was no expectation of privacy.

    Curtilage, said the court, is not to be defeated merely because the subject area may be observed by some. In so stating the court recognized that in a smaller urban community (in this case, Antigo), it is not unusual for others to be able to see into the rear yard of a home. Accordingly, the court concluded that the officer's intrusion into this area at the rear of the home was without legal authority and consequently his discovery of the marijuana odor was without legal justification.

    The court also concluded that the search of the defendant's pocket resulting in the discovery of a baggie containing marijuana was unlawful. It held that the defendant was effectively arrested when the officer twice refused to allow him to leave to use the bathroom. At that point in time, although the officer had identified the odor of marijuana coming from the basement, he acknowledged that several people could be heard in the basement and there was no greater basis to believe that the defendant was the source of the odor than any of the other individuals present in the basement. Accordingly, the officer lacked probable cause to arrest the defendant. The evidence obtained from the unlawful search must accordingly be suppressed.

    Restitution - General Damages - Special Damages

    State v. Holmgren, No. 98-3405-CR (filed 13 July 1999) (ordered published 17 Aug. 1999)

    The defendant was convicted of felony theft and ordered to pay restitution. All of the issues on appeal related to the restitution order. Section 973.20(5)(a) of the Wisconsin Statutes provides that a restitution order may require the defendant to "pay all special damages, but not general damages, substantiated by evidence in the record, which could be recovered in a civil action against the defendant for his or her conduct in the commission of a crime considered at sentencing." In this opinion the court of appeals addressed the distinction between general damages and special damages.

    General damages are those that necessarily result from the injury regardless of its special character, the conditions under which the injury occurred, or the plaintiff's circumstances. Under the criminal restitution statute general damages are those that compensate the victim for damages such as pain and suffering, anguish, or humiliation. However, under the statute cited above, a court is prohibited from ordering restitution for the victim's general damages.

    A court may nevertheless require a defendant to pay special damages the victim sustains which are substantiated by evidence in the record. As used in the criminal restitution context, special damages encompass harm of a more material or pecuniary nature and represent the victim's actual pecuniary losses. Any readily ascertainable pecuniary expenditures paid out because of the crime are appropriately classified as special damages.

    Guilty Plea - Failure to Advise Defendant of Jury Unanimity Requirement - Remedy

    State v. Grant, No. 98-2206-CR (filed 18 Aug. 1999) (ordered published 28 Sept. 1999)

    The defendant waived his right to a jury trial and was found guilty on several counts following a trial to the court. On appeal he argued that he is entitled to a new trial because at the time he waived his right to a jury trial, the trial court failed during its colloquy with the defendant to advise him that a verdict in a criminal jury trial must be unanimous.

    In a decision authored by Judge Mueller (a circuit judge sitting by special assignment pursuant to the Judicial Exchange Program), the court of appeals concluded that, although the trial court failed to properly advise the defendant of the jury unanimity requirement, he is not thereby automatically entitled to a new trial. Rather, the appropriate remedy is a post-conviction motion pursuant to the procedures set forth in State v. Bangert, 131 Wis. 2d 246, 389 N.W.2d 12 (1986), to determine the defendant's knowledge and understanding of the rights being waived.

    Adapting Bangert to the situation posed in this case, the defendant must first make a prima facie showing that the jury waiver was defective and that he did not understand the jury unanimity requirement. If he makes that showing, the burden then shifts to the state to show by clear and convincing evidence that the defendant in fact voluntarily and intelligently waived his right to a jury trial. If the state fails to meet its burden of proof, the conviction must be reversed because there is nothing in the record to indicate that the defendant was in fact properly apprised of his right to a unanimous jury verdict or that he voluntarily and intelligently waived that right. If the state does meet its burden, the facially defective record is overcome by evidence showing that the defendant's constitutional right to a jury trial was not violated because he understood his right to jury unanimity and voluntarily waived that right.

    As indicated above, the Bangert decision requires a threshold allegation by the defendant that he did not know or understand the rights at issue before he may be entitled to a hearing on his claim. The defendant failed to make this allegation. Accordingly, his post-conviction motion was deficient and was properly denied by the trial court.

    Trials - Defense Stipulation to Element of Offense

    State v. Benoit, No. 98-1531-CR (filed 28 July 1999) (ordered published 17 Aug. 1999)

    The defendant was charged with burglary. Prior to trial, he and his attorney stipulated on the record to the owner's nonconsent, which is an element of the crime. At the conclusion of the trial, the court instructed the jury on the elements of burglary, including non-consent. The court further informed the jury that the parties had stipulated to owner nonconsent and that the jury must accept that fact as conclusively proven.

    On appeal the defendant argued that the trial court erred in concluding that he had received a jury trial on the element of nonconsent. He argued that he should have been provided a thorough colloquy ensuring a "voluntary, knowing, and intelligent waiver" of his right to a jury trial on the nonconsent element. In a decision authored by Judge Snyder, the court of appeals disagreed with the defendant's position and affirmed the conviction.

    In deciding this case, the appellate court distinguished three cases upon which the defendant relied. One was Kemp v. State, 61 Wis. 2d 125, 211 N.W.2d 793 (1973), wherein the defendant waived jury and requested the court to decide the case from stipulated facts. The Kemp court noted that the trial judge had very carefully and thoroughly explained to the defendant all of his rights, including the right and importance of a jury trial and the effect of a jury waiver. In this case the appellate court did not think that Kemp was controlling because, unlike the defendant in Kemp, this defendant did not stipulate to all of the facts in the case; rather, he merely waived his right to challenge one issue - nonconsent. In its jury instructions, the court advised the jury that the defendant had stipulated to the nonconsent element and that the jury must view the facts as conclusively proven. The court then instructed the jury on the elements of burglary, including nonconsent. The jury then made a complete and final determination of guilt based on the evidence presented; the court played no role as factfinder.

    The court also distinguished State v. Villarreal, 153 Wis. 2d 323, 450 N.W.2d 519 (Ct. App. 1989). In that case, while in the midst of the jury trial, Villarreal's attorney conceded that there was no dispute concerning the dangerous weapon penalty enhancer with which the defendant had been charged and therefore stipulated that the dangerous weapon element should be removed from jury consideration and be determined by the trial court. In that situation the court of appeals concluded that only an express personal jury waiver would permit the court to decide an element of the charged offense. Unlike Villarreal, the nonconsent element in the defendant's trial was not passed on to the court; instead, it was merely conceded by the defendant. Because the jury was instructed on all elements of the crime, the defendant received a jury trial on each and every element. His stipulation did not constitute a waiver of his right to a jury trial and thus he did not need to make an express personal waiver to render the stipulation valid.

    Finally, the court considered the applicability of State v. Wallerman, 203 Wis. 2d 158, 552 N.W.2d 128 (Ct. App. 1996). Wallerman established a procedure for addressing a defendant's stipulation to a criminal element for which the state wishes to introduce "other acts" evidence. Because that situation was not presented in the present case, the appellate court concluded that the Wallerman methodology did not apply.


    Employment Law


    Wisconsin OSHA - Hazards OSHA Meant to Address

    West v. Department of Commerce, No. 98-1693 (filed 18 Aug. 1999) (ordered published 28 Sept. 1999)

    West is a police officer at the University of Wisconsin-Oshkosh (UWO). Her duties include the full range of patrol activities, including the apprehension of lawbreakers. Pursuant to the UWO chancellor's policy, campus police may not carry a firearm unless they are transporting money or escorting others doing the same. After unsuccessful attempts to convince the chancellor to change his policy, West filed a complaint with the Wisconsin Department of Commerce (DeCom) alleging occupational health and safety violations. DeCom determined that Wisconsin's public employee safety and health statute (WisOSHA) (Wis. Stat. § 101.055(1)) is limited to physical conditions in the workplace and thus denied West a hearing on her complaint. The circuit court reversed and the court of appeals, in a decision authored by Judge Brown, reversed the circuit court.

    WisOSHA affords government employees the same protection extended to private sector employees under the federal OSHA law. There are two grounds under WisOSHA for which DeCom must issue an enforcement order: 1) a violation of a standard or variance; and 2) a situation that poses a recognized hazard likely to cause death or serious physical harm. Only the second is involved in this case.

    The issue before the court of appeals was whether the potential harm in this case - the possibility of being injured by the public while performing the work duties of an unarmed police officer - is the type of hazard meant to be addressed by WisOSHA. The court concluded that the statute was meant to address tangible, measurable hazards in the workplace. The abstract threat West faces in her job is simply not the type of workplace issue the Legislature had in mind. West's complaint is in no way connected to a tangible hazard. Because there exists no set of facts West could have proven at a hearing that would have brought her claim within the ambit of WisOSHA, DeCom correctly denied her a hearing.


    Insurance


    UM Coverage - Adult Children - Bodily Injury

    Ledman v. State Farm Mut. Auto. Ins. Co., No. 9-0267 (filed 17 Aug. 1999) (ordered published 28 Sept. 1999)

    The plaintiffs' 30-year-old daughter was killed in a car crash with an uninsured driver. She had not lived with the plaintiffs for more than a year and was driving her fiancé's car at the time. The plaintiffs filed a claim against their auto insurer, State Farm, alleging that their damages were covered by the uninsured motorist provision (UM). The insurer denied the claim but a circuit court granted declaratory relief in the plaintiffs' favor.

    The court of appeals, in an opinion written by Judge Wedemeyer, reversed because the trial court's construction of the policy would lead to an "absurd result." Here, the plaintiffs had undeniably suffered emotional harm, but no physical injury. In essence, the plaintiffs argued that the policy language limiting UM coverage to "bodily injury to an insured" applied only to the "hit-and-run" scenario. Read as a whole, however, the policy clearly contemplated bodily injury to an insured. For similar reasons, the court reversed the award of attorney fees.

    Judge Schudson concurred.


    Mobile Homes


    Mobile Home Parks - Protection for "Residents" under Wis. Stat. section 710.15 and for "Tenants" under Wis. Admin. Code section ATCP 125.06

    Benkoski v. Flood, No. 98-1972 (filed 14 July 1999) (ordered published 17 Aug. 1999)

    Benkoski rents four mobile home sites in the Floods' Mobile Home Park at which he keeps his mobile homes. He rents the homes to tenants. The Floods informed Benkoski that his homes would have to be removed from the park when they were sold and rejected applications for tenancy submitted by potential buyers of Benkoski's mobile homes. Benkoski then filed suit against the Floods.

    In this suit Benkoski claimed the Floods violated Wis. Stat. section 710.15(3)(b) and (4), which prohibit a mobile home park operator from requiring removal of a mobile home due to the age of the home or a change in ownership or occupancy. Further, he alleged that the removal requirement constituted a violation of Wis. Admin. Code section ATCP 125.06(1)(a), which forbids an operator from placing unreasonable restrictions on the sale of a mobile home in the park.

    The central issue on appeal was whether Benkoski, the owner of the mobile home units, is a resident of the park for purposes of the statute and administrative code provision cited above, even though he does not live in the park. Resolution of this issue is critical in determining whether Benkoski is protected under the statute and code.

    In a decision authored by Judge Brown, the court of appeals concluded that Benkoski was indeed protected under the statute and code. To be protected under the statute, Benkoski must be a "resident" of the park, which is defined in the law as "a person who rents a mobile home site in a park from an operator." Benkoski rents four sites from the Floods. Therefore, he is a resident.

    Benkoski also is entitled to protection under the Administrative Code. To be protected he must be a "tenant." The code defines a tenant as "any person renting a site from an operator." Again, he rents four sites from the Floods and thus is a tenant for purposes of the Administrative Code.

    In sum, the Floods' policy that Benkoski would have to remove his mobile homes when they were sold violates Wis. Stat. section 710.15(4) and Wis. Admin. Code section ATCP 125.06 and .09, both of which protect him. He is thus entitled to damages pursuant to section 100.20(5).


    Motor Vehicle Law


    OWI - Forfeiture of Vehicle - Security Interest by Third Party - Good Faith

    State v. Frankwick, No. 98-2484 (filed 14 July 1999) (ordered published 17 Aug. 1999)

    In May and June of 1997, the defendant committed his fourth and fifth OWI offenses within a 10-year period. On May 30, 1997, Waukesha County filed a Stop Title Transfer Notice with the Department of Transportation (DOT) advising the DOT that, pursuant to Wis. Stat. section 342.12(4), any vehicles owned by the defendant should not be transferred until notified by the court. On Dec. 2, 1997, the defendant pled guilty to the May and June OWI offenses. He was sentenced to jail time and fined. Further, the court ordered seizure and forfeiture of his truck, pursuant to section 346.65(6).

    Lynn Kurer was named as a defendant in the forfeiture action because she held a lien on the truck. Kurer had perfected her security interest in the truck by filing an application for title with DOT one day before the defendant entered his guilty pleas. Based on the proximity of the title application to the guilty plea, along with other factors, the circuit court concluded that Kurer's lien was filed in bad faith and for the purpose of circumventing the forfeiture penalty. Thus, the trial court ordered the DOT to cancel the title processed on Dec. 1 and the vehicle be forfeited.

    Kurer appealed. In a decision authored by Judge Brown, the court of appeals reversed. The court agreed with Kurer that section 346.65(6)(k) does not come into play when a party applies for a new title to perfect a security interest. The statute provides that "no person may transfer ownership" or "make application for a new certificate of title under sec. 342.18" unless the court makes a finding of good faith. While the grant of a perfected security interest is a transfer of an interest in property, the court concluded that it is not a transfer of ownership within the meaning of section 346.65(6)(k). Nor is the grant of a security interest a transaction for which one applies for a new title under section 342.18. Accordingly, because the grant of a security interest is not a transfer of ownership and requires application for title under a different statute (section 342.19), section 346.65(6)(k) does not apply when a party perfects a security interest in a vehicle.

    Even though there is no requirement that the court make a finding of good faith under section 346.65(6)(k) for perfection of a security interest, the creation of such an interest still must be done in good faith. Although perfection of the interest in a vehicle is governed by section 342.19, the creation of the security interest is governed by the Uniform Commercial Code. Pursuant to the requirements of section 401.203, the security interest in this case must have been created in good faith. The court of appeals found that the basis for the trial court's finding of bad faith in this case was not clear and it therefore reversed and remanded to the circuit court for further fact-finding.


    Municipal Law


    Municipal Courts - Appeals - Trial on the Merits

    Village of Menomonee Falls v. Meyer, No. 98-3195 (filed 4 Aug. 1999) (ordered published 28 Sept. 1999)

    The defendant was charged with everal offenses under municipal statutes. At trial the municipal judge refused to permit the village prosecutor to use critical evidence because of a discovery violation. The judge then dismissed the charges because of the missing proof. The village requested a new trial in the circuit court under section 800.14(4) of the Wisconsin Statutes. The circuit court convicted the defendant and ordered him to pay forfeitures of more than $800.

    The court of appeals, in an opinion written by Judge Anderson, reversed. The statute's history revealed that the Legislature intended section 800.14(4) to "reduce the number of municipal court appeals to the circuit court from municipal ordinance violations." The village was not entitled to a new trial in the circuit court because there had never been a trial on the merits in the municipal court, as required by subsection (4). (The village could have sought a review of the original ruling under section 800.14(5)).


    Sexual Predators


    Probable Cause Hearings - 72 Hours - "Custody"

    State v. Brissette, No. 98-2152 (filed 18 Aug. 1999) (ordered published 28 Sept. 1999)

    The respondent was committed as a sexually violent person under chapter 980 of the Wisconsin Statutes. On appeal he contended that the court lost competence over the case because it failed to hold a probable cause hearing within 72 hours of the filing of the chapter 980 petition. Affirming, the court of appeals held that the phrase "in custody" in section 980.04(2) "means in custody pursuant to ch. 980, Stats." Thus, the time respondent spent "in custody" while serving a prison sentence did not trigger the chapter 980 hearing time. The point of the probable cause hearing is to "ensure that people are not held for unreasonably long periods of time where the possibility exists that the state cannot muster even minimal proof in support of allegations set out in the petition or complaint." The same urgency is lacking where the person is serving a prison sentence.


    Torts


    Respondeat Superior - Scope of Employment - Travel

    Estate of Murray v. The Travelers Ins. Co., No. 98-0497 (filed 10 Aug. 1999) (ordered published 28 Sept. 1999)

    Baritt, a physical therapist, was employed by the Olsten Health Care Company. She used her own car to travel to Olsten's patients' homes to administer physical therapy. In 1994 Baritt was in a car accident with the Murrays. During litigation over liability, Olsten was named as a party based on the contention that Baritt was acting within the scope of her employment at the time of the accident. The judge later dismissed Olsten.

    The court of appeals, in an opinion written by Judge Curley, reversed. The court held that "because Baritt's employment arrangement with Olsten did not provide her with a fixed place of employment, the holding" in DeRuyter v. Wisconsin Electric Power Co., 200 Wis. 2d 349 (Ct. App. 1996) (aff'd by an equally divided court, 211 Wis. 2d 169 (1997)), is inapplicable. Under DeRuyter, "an employer could be held vicariously liable for the negligent acts of an employee when commuting only if the employer exercised control over the method or route of the employee's travel." Here Olsten was in the business of providing home health care to its clients/patients; thus, Baritt's role was more analogous to a "traveling salesman." Applying "the general respondeat superior rules," the court concluded that "Baritt was acting within the scope of her employment when she was involved in the automobile accident because travel was an essential element of her employment duties with Olsten and, consequently, at the time of the accident, her travel was actuated by a purpose to serve her employer." See also Wis JI - Civil 4045.

    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.

    Wisconsin Lawyer


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