Court of Appeals Digest

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

Contracts

Warranties - Latent Defects

Woodward Communications Inc. v. Shockley Communications Corp., 2001 WI App 30 (filed 7 Dec. 2000) (ordered published 17 Jan. 2001)

On May 3, 1996, Shockley agreed to sell Woodward the assets of a radio station, which included a 640-foot communications tower. The closing occurred on July 29, 1996 and the tower collapsed during a storm in late December 1996. A clause in the agreement warranted the following: "Seller, at its expense, shall keep in good repair and operating efficiency, all tangible personal property to be transferred to the Buyer." Investigation disclosed that the tower collapsed because of a "hidden, internal defect" in a bolt used to erect the tower in 1948. The circuit court ruled in Woodward's favor that the clause constituted an express warranty against latent defects.

The court of appeals, in an opinion written by Judge Vergeront, reversed. A warranty is a promise to indemnify the promisee for any loss if the facts warranted are untrue. The phrase "represents and warrants" did not transform the clause "into a warranty of a specific type - that is, a warranty that there are no latent defects" ( 14). Rather, the language obligated the seller to maintain the assets between the date of the agreement and closing. Had the parties intended to warrant regarding latent defects, "it would have been a simple matter for them to so state" ( 17). The court of appeals ruled that Shockley was entitled to summary judgment because it did not breach its contract with the buyer or breach any express warranty.

Consumer Law

Credit History - Disputed Debts - Disclosure

Turner v. Dencker Buick-Pontiac Inc., 2001 WI App 28 (filed 16 Nov. 2000) (ordered published 17 Jan. 2001)

The Turners bought a car from a dealer and financed it with a note that was assigned to the bank. When problems arose with the car, the Turners suspended payment. The Turners sued the bank because it disclosed to a credit bureau information concerning a debt that was known to be reasonably disputed without also disclosing the fact of the dispute, contrary to Wis. Stat. section 427.104(1)(f) (1997-98). The judge ruled in the bank's favor by finding that a bank officer had communicated the dispute to the credit bureau during a telephone conversation, even though the written monthly report to the credit bureau carried no indication that the debt was disputed.

The court of appeals, in an opinion written by Judge Vergeront, reversed. The bank failed to "maintain procedures reasonably adapted to avoid transmitting information about a reasonably disputed debt to the credit bureau without disclosing that the debt was disputed" ( 24). Under the statutory scheme, the court declined to consider the bank's good faith efforts to comply with the statute despite the technological limitations on its reporting procedures. "If the debt collector chooses a system that cannot report the disputed status of a debt, it is reasonable to place on the debt collector the responsibility to see that the disputed status is nevertheless disclosed with each report on the debt, along with the attendant liability for failure to do so, subject to Wis. Stat. § 425.301(3) and other defenses, if any" ( 26).

Criminal Procedure

Witnesses - Involuntary Statements - Exclusion

State v. Samuel, 2001 WI App 25 (filed 27 Dec. 2000) (ordered published 17 Jan. 2001)

The defendant was convicted of a long list of felonies, including child abduction and second degree sexual assault. The events related to defendant's relationship with a 15-year-old girl, who was some 30 years his junior. The issue in this case is whether a "hostile prosecution witness" has standing to object to the admission of a prior statement on grounds that it was "coerced" by law enforcement officials. The putative victim, young Tisha, claimed that police, in effect, threatened that unless she incriminated the defendant by disclosing underage sex, she would not get her child back (the defendant was the child's father). At defendant's trial, Tisha testified that she did not have underage sexual relations with defendant while they were in Wisconsin and that her earlier inconsistent statement to police, which alleged the opposite, was false.

The court of appeals, in an opinion written by Judge Brown, affirmed in part and reversed in part. Addressing an issue of first impression in Wisconsin, the court held that a nondefendant witness's statement that incriminates the defendant is subject to suppression if it was coerced. "[T]he standard for determining whether a nondefendant witness's statement was voluntary is the same test that [the court] use[s] when determining whether a defendant's statement is voluntary" ( 21). The court of appeals reversed the lower court's ruling that Tisha lacked standing to contest the voluntariness of her statement. This necessitated the reversal of the second degree sexual assault conviction and a remand for purposes of determining if Tisha's statement was voluntary. Finally, since the prior statement affected Tisha's credibility generally, the court also reversed the convictions for abduction and interference with custody, depending on the outcome of the hearing on remand.

Plea Negotiation Regarding Sentence Recommendation - Prosecutor's Remarks at Sentencing Hearing Constituted Breach of Bargain

State v. Williams, 2001 WI App 7 (filed 27 Dec. 2000) (ordered published 17 Jan. 2001)

The defendant pled guilty to one count of failure to pay child support. As part of the plea agreement, the state agreed to recommend that Williams receive three years of probation, with the condition that he pay current support plus all arrearages, and serve 60 days in jail. At the sentencing hearing the prosecutor stood by her original recommendation. However, she also told the court that she now had a negative impression of the defendant based on information acquired subsequent to the plea agreement, indicated that she had adopted the same negative impressions expressed by the pre-sentence investigation writer, and then gratuitously informed the court that the PSI writer recommended prison. The court sentenced the defendant to 18 months in prison.

In a decision authored by Judge Brown, the court of appeals reversed. It concluded that the plea agreement was breached, that the sentence must be vacated, and that the matter must be remanded to the circuit court for a new sentencing hearing.

While the district attorney may inform the court about negative information acquired about the defendant after the plea agreement, if relevant to sentencing, the prosecutor may not imply that she has subsequently changed her mind about the plea. The appellate court recognized that there is a fine line between presenting information to the trial court for its education and presenting information in a way that implies that the prosecutor has second thoughts about the agreement. Many courts have discussed the difficulty in discerning when the line is crossed such that the recommendation is no longer neutral. These jurisdictions have construed comparable plea agreements liberally to favor the defendant. In this case, the court of appeals agreed with those jurisdictions and adopted the view that, in close cases, the agreements should be construed in favor of the defendant.

When a prosecutor has gathered negative information about the defendant, the court should look at how the prosecutor used this information. In other words, the court should look closely at whether the prosecutor used this information to imply a personal recommendation.

In this case, the court concluded that the line was crossed. It was convinced that the prosecutor's remarks showed that she now had second thoughts about the plea agreement based on what she now knew about the defendant's character. While a prosecutor is not required to advocate for a bargained sentence enthusiastically and may inform the court about the character of the defendant, even if the information is negative, what the prosecutor may not do is personalize the information, adopt the same negative impressions as the PSI writer, and then remind the court that the PSI writer has recommended a harsher sentence than recommended. That is what happened in this case.

Judge Snyder filed a concurring opinion. Judge Nettesheim dissented.

Bail - Forfeiture - Exercise of Judicial Discretion

Melone v. State, 2001 WI App 13 (filed 6 Dec. 2000) (ordered published 17 Jan. 2001)

The defendant was charged with second-degree recklessly endangering safety and endangering safety by use of a dangerous weapon. Bail was set at $5,000. His mother posted the bail, but it was forfeited when her son missed a court date. Bail was then set again, this time at $20,000, which the mother also posted. Bail was conditioned upon the defendant not consuming alcohol or drugs without a prescription. According to the mother, she posted the $20,000 bail to help her son and his attorney prepare a defense and to enroll her son in a drug and alcohol rehabilitation program, at her expense. She initially enrolled him in an outpatient treatment program; when that failed, she enrolled him in an inpatient program. Some time after the $20,000 was posted, the defendant failed a urinalysis test and the court ordered the bail forfeited.

At a hearing on the mother's request to set aside the forfeiture, she asked the court to exercise its discretion and return the $20,000 to her. The court refused to do so. According to the judge, he always refuses to return bail, no matter what the circumstances are, because giving the money back provides a disincentive to those on bail to follow their bail conditions.

In a decision authored by Judge Brown, the court of appeals reversed. The bail forfeiture statute allows the court to set aside an order forfeiting bail "if it appears that justice does not require the enforcement of the forfeiture." See Wis. Stat. § 969.13(2). The trial court's decision under this statute is one of discretion. The term "discretion" "contemplates a reasoning process that depends on the facts in the record and yields a conclusion based on logic and founded on a proper legal standard" ( 6). Coming to the same conclusion for the same blanket reason in every case despite the facts of each case does not satisfy this definition.

In an earlier case, the court of appeals indicated that determining what justice requires under section 969.13(2) involves weighing a number of relevant factors. See State v. Ascencio, 92 Wis. 2d 822, 285 N.W.2d 910 (Ct. App. 1979). The trial court in this instance erroneously exercised its discretion by relying on one factor rather than weighing all relevant factors.

The appellate court disagreed with the trial court that giving money back to the person who posted bail provides a disincentive, in every instance, to those on bail to follow their bail conditions. Sometimes a defendant's drug or alcohol addiction may be so strong that it overrides the defendant's intent not to bring financial harm to the person who posted the bond. Said the court, it is proper to ask: "How much control over the situation does the defendant have? And how much control does the person who posted the bond have over the defendant?" ( 7).

The court indicated that the judge may want to consider whether the mother's attempt to help her son follow the bail condition and her attempt to fix the situation after the bail condition was violated warrants relief for her. Financial hardship visited upon the mother and her family is also a factor that the trial court may want to consider. The fact that the defendant violated bail conditions twice also may be considered in deciding whether to remit the bail.

The appeals court remanded to the trial court with directions that it weigh all the relevant factors when deciding whether to set aside the bail forfeiture.

Ineffective Assistance of Counsel - Failure to Object to Jury Instruction With Missing Element

State v. Krueger, 2001 WI App 14 (filed 19 Dec. 2000) (ordered published 17 Jan. 2001)

The defendant was convicted for attempting to have sexual contact with a person under age 13, contrary to Wis. Stat. sections 939.32 and 948.02(1). During trial, the judge provided the jury with an instruction that failed to include an element of the crime. The instruction informed the jury that "sexual contact" requires an "intentional touching" of the victim's breast or vaginal area, but it did not state that the touching must have "the purpose of sexually degrading or sexually humiliating the complainant or sexually arousing or gratifying the defendant." The defense attorney did not object to the incomplete instruction.

The defendant filed a post-conviction motion claiming ineffective assistance of counsel. The trial court denied the motion. The court of appeals, in a decision authored by Judge Peterson, reversed.

The state conceded that defense counsel's performance was deficient. However, it argued that the defendant was not prejudiced because he did not show a reasonable probability that the verdict would have been any different if the jury had been fully instructed. The court of appeals disagreed. Under the instructions given by the trial court, the state was relieved of proving an essential element. The appellate court held that a jury instruction lacking an essential element is fundamentally unfair and establishes the kind of prejudice entitling the defendant to a new trial.

Family Law

CHIPS Proceedings - 40-day Time Limit to Request CHIPS Petition

Sheboygan County Department of Health and Human Services v. Jodell G., 2001 WI App 18 (filed 13 Dec. 2000) (ordered published 17 Jan. 2001)

The respondent sought leave to appeal from an order of the court denying her motion to dismiss the CHIPS petitions involving her three children as untimely pursuant to Wis. Stat. section 48.24(5). She contended that because the county intake worker did not request that the CHIPS petitions be filed within 40 days of receipt of the referral information, the CHIPS petitions should be dismissed with prejudice. In a decision authored by Judge Snyder, the court of appeals agreed.

Wis. Stat. section 48.24 addresses receipt of jurisdictional information in CHIPS cases and outlines the sequential procedures to be followed by a CHIPS intake worker during an intake inquiry. The statute specifically provides that "the intake worker shall request that a [CHIPS] petition be filed, enter into an informal disposition or close the case within 40 days or sooner of receipt of referral information. ... The judge shall dismiss with prejudice any petition which is not referred or filed within the time limits specified." (Emphasis supplied.) Resolution of the key issue in this case depended upon the interpretation of the phrase "receipt of referral information," which triggers the 40-day time limit specified in the statute. Because this concept is not defined in the statute, the court resorted to ordinary dictionary definitions to conclude that a "referral" is the "act of directing attention to something" ( 14).

In this case the Sheboygan County Department of Health and Human Services received a phone call on June 29, 1999, to report possible child abuse committed by the respondent's husband against his stepchild. On that same date, an intake worker was assigned to the matter and the child informed the intake worker of her stepfather's abuse. This constituted the receipt of referral information and commenced the 40-day time limitation of the statute cited above. A referral of the matter to the district attorney's office requesting a CHIPS petition more than 40 days thereafter was thus untimely and required dismissal of the subsequently filed CHIPS petition.

Divorce - Property Division - Loan From One Party to the Other Discharged in Bankruptcy

Jeffords v. Scott (Jeffords), 2001 WI App 6 (filed 13 Dec. 2000) (ordered published 17 Jan. 2001)

James and Pamela Jeffords were divorced in 1997. As part of the divorce, they entered into a marital settlement agreement (MSA) to resolve all issues relating to property division. The MSA provided that: 1) James was to keep his company's 401k plan subject to an amount awarded to Pamela; 2) Pamela was to receive $100,000 from the plan via a Qualified Domestic Relations Order (QDRO); and 3) the transfer of the QDRO from James to Pamela was conditioned upon Pamela's repayment of a $50,000 loan to James.

In August 1998 Pamela filed for voluntary bankruptcy and listed James as an unsecured creditor. Her discharge in bankruptcy included the $50,000 loan referenced in the MSA. Thereafter, James sought clarification of the divorce judgment in the circuit court. That court concluded that under a literal reading of the MSA, James' obligation to provide a QDRO to Pamela was preconditioned upon her repayment of the $50,000 loan, but because she failed to repay the loan, James could be excused from providing a QDRO. However, the court determined that it would do equity for the reason that the MSA manifested an intention of the parties that there was to be an equitable property division. The court reasoned that the MSA provided a quid pro quo approach to the QDRO and repayment of the loan, and thus it ordered James to provide a $50,000 QDRO.

Pamela filed a motion for reconsideration, arguing that the circuit court erred because its decision did not follow U.S. bankruptcy law and did not follow Wisconsin case law dealing with the U.S. Bankruptcy Code. The family court denied her motion. In a decision authored by Judge Anderson, the court of appeals affirmed.

The court of appeals agreed with the family court that it could not recreate the loan discharged in bankruptcy. It also concluded that a strict application of the MSA would relieve James of his obligation to provide a QDRO. Finally, it held that the family court appropriately exercised its equitable powers to fashion a remedy to implement the intent of the parties when it ordered James to provide a $50,000 QDRO.

Insurance

Automobile Liability - Single Occurrence

Danielson v. Gasper, 2001 WI App 12 (filed 19 Dec. 2000) (ordered published 17 Jan. 2001)

Danielson was badly injured when she was struck by a car driven by Gasper. The car driven by Gasper was owned by Clark, who carried insurance that provided $100,000/$300,000 for each occurrence. Since the policy covered Gasper's negligence, the insurer paid Danielson $100,000, its full policy coverage for each person per occurrence. Danielson alleged, however, that Clark had negligently entrusted the car to Gasper and demanded an additional $100,000. The circuit court granted summary judgment in the insurer's favor.

The court of appeals, in an opinion written by Judge Cane, affirmed. The court had confronted a similar situation in Iaquinta v. Allstate Ins. Co., 180 Wis. 2d 661 (Ct. App. 1993), and concluded that Wisconsin's omnibus statute required full policy coverage be afforded to two tortfeasors, one of whom drove negligently and the other who negligently entrusted the car to the other. Although the insurer argued that Iaquinta was legislatively overruled in 1995 by Wis. Stat. section 632.32(5)(f), the court declined to reach this issue, ruling instead that section 632.32 applies only to policies issued and delivered in Wisconsin. In this case, the policy was issued and delivered in an adjacent state and the policy did not incorporate Wisconsin's omnibus statute. Thus, in construing the policy's definition of the word "accident," the court concluded that the "acts, incidents, or omissions that led to the accident" were not to be considered when determining the maximum amount of coverage. Danielson was entitled only to the $100,000 payment.

Open Records Law

Photocopying Records - Power of Custodian to Refuse Requester's Request to Copy Records Himself

Grebner v. Schiebel, 2001 WI App 17 (filed 27 Dec. 2000) (ordered published 17 Jan. 2001)

The plaintiff is engaged in a business that provides voter histories to candidates, political parties, and others involved in the electoral process. He dispatched employees throughout Wisconsin to obtain polling data from various county clerks. These employees were provided with portable photocopying machines and supplies so that they could make immediate photocopies of pertinent records themselves.

The employee who went to the Polk County clerk requested and was granted access to the poll lists for all elections held during the past four years. He informed the clerk that he intended to identify the necessary documents and then photocopy them himself using the portable photocopying machine that he had brought with him. He never asked the clerk to make copies of the documents for him.

The clerk informed the requester that he would not be allowed to make copies with his photocopying machine. Instead, she offered to assign a person from her office to photocopy the documents for a charge. Thereafter, the plaintiff filed suit under the open records law demanding that he be allowed to copy the polling documents with his own photocopying equipment.

The circuit court granted judgment to the county, concluding that Wis. Stat. section 19.35(1)(b) gives the clerk the option of allowing the requester to copy the records with the requester's own equipment or providing the requester with a copy of the records.

In a decision authored by Judge Cane, the court of appeals affirmed. The sole issue before the court was whether the requester can use his or her own equipment to copy the public records without the clerk's permission. Under the statute, the answer is in the negative. The custodian is given the option to either make a copy of the records herself or allow the requester to make a copy of the records. The statute gives the custodian, not the requester, the option to choose how a record will be copied.

Probate

Service of Objections by Personal Representative - Time Limitations

Flejter v. Estate of Flejter, 2001 WI App 26 (filed 5 Dec. 2000) (ordered published 17 Jan. 2001)

This case involved a claim against an estate to which the personal representative of the deceased objected. Wis. Stat. section 859.33(1) provides that the personal representative may contest a claim by mailing a copy of the objection to the claimant or personally serving the objection upon the claimant and filing the same with the court. "The objection ... may be served at any time prior to entry of judgment on the claim, but if a copy of the claim has been mailed to or served upon the personal representative or the attorney for the estate, the objection ... shall be served upon or mailed to the claimant and filed with the court within 60 days after the copy of the claim was mailed to or served upon the personal representative or the attorney for the estate." Wis. Stat. § 859.33(1).

Wis. Stat. section 801.15(5)(a) provides that whenever a party has the right or is required to do some act or take some proceedings within a prescribed period after the service of a notice or other paper on the party, three days shall be added to the prescribed period if the notice or paper was served by mail.

The issue in this case was whether the three-day mailing extension codified in section 801.15(5)(a) applies to the 60-day deadline for objections set forth in section 859.33(1). In a decision authored by Judge Wedemeyer, the court of appeals concluded that the circuit court did not err when it applied the three-day mailing provision to the 60-day deadline for objecting to claims. The rules of civil procedure, which include section 801.15, apply in all civil actions and special proceedings, except where a different procedure is prescribed by statute or rule. Probate proceedings are special proceedings to which the rules of civil procedure apply. There is no language in section 859.33(1) prohibiting the application of the three-day mailing extension.

Judge Fine filed a dissenting opinion.

Sex Offenders

Registration - Juveniles

State v. Joseph E.G., 2001 WI App 29 (filed 7 Dec. 2000) ) (ordered published 17 Jan. 2001)

Joseph, age 15, was convicted of falsely imprisoning a 13-year-old girl. Since the incident had sexual overtones, he was required to register as a sex offender pursuant to Wis. Stat. section 938.34(15m)(bm). The circuit court denied his request to be excused from registration pursuant to Wis. Stat. section 301.45(1m) because false imprisonment was not enumerated as an excusable offense.

The court of appeals, in an opinion written by Judge Roggensack, affirmed the ruling and rejected Joseph's contention that the Legislature's omission of false imprisonment violated his constitutional rights to equal protection and substantive due process. Section 301.45(1m) is a narrow exception crafted "for sex offenders in cases of factually consensual sexual contact between two minors who, but for the age of the younger child, would have broken no law" ( 11). False imprisonment, by contrast, "is never consensual and never a crime solely because of the age of the victim" ( 12).

Torts

Legal Malpractice - Drafting Wills - Standing

Beauchamp v. Kemmeter, 2001 WI App 5 (filed 21 Dec. 2000) (ordered published 17 Jan. 2001)

Plaintiffs brought this claim against a lawyer who allegedly failed to prepare a new will in accordance with the testator's intentions. The four plaintiffs were the persons who were allegedly to be named as heirs in the testator's new will. The testator died before any new will was prepared. The circuit court dismissed the claim.

The court of appeals, in an opinion written by Judge Dykman, affirmed. The "precise issue" before the court was "whether parties who are unnamed in a will, but claim to be intended beneficiaries based on evidence extrinsic to a will, may maintain a negligence action against the attorney who drafted the will" ( 6). In general, only an attorney's clients may sue the lawyer for malpractice, subject to a narrow exception where the attorney "acts negligently in drafting or supervising the execution of a will resulting in a loss to a beneficiary named therein" ( 7). Based on the case law and policy, the court held that "third parties may not maintain a cause of action for malpractice against the drafting attorney unless they are named in an executed or unexecuted will or similar estate planning document" ( 9). "When the only evidence a plaintiff relies on is extrinsic to the estate planning documents, the testator's intentions are at least as likely thwarted as not" ( 18). Additional policy concerns and case law are discussed in the opinion.

Medical Malpractice - Noneconomic Damages - Caps

Guzman v. St. Francis Hospital, 2001 WI App 21 (filed 19 Dec. 2000) (ordered published 17 Jan. 2001)

Plaintiffs brought a medical malpractice action against several doctors, their insurers, and "the Fund." The trial court ruled unconstitutional the $350,000 cap on noneconomic damages in medical malpractice cases because it violated plaintiffs' rights to a jury trial and traduced the separation of powers.

The court of appeals, in an opinion written by Judge Fine, reversed. The court considered and rejected challenges rooted in the right to trial by jury, separation of powers, the "remedy for wrongs" provision in the state constitution, equal protection, and substantive due process. Judge Curley concurred, but "reluctantly," and with the observation that the statute "barely passes constitutional muster."

Judge Schudson dissented on the ground that the cap limits violated the right to trial by jury.