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Vol. 72, No. 6, June 1999 |
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Supreme Court Digest
By Prof. Daniel D. Blinka & Prof. Thomas
J. Hammer
| Civil Procedure |
Criminal Law | Criminal
Procedure |
| Evidence | Taxation | Torts |
Evidence
Other Acts - Sentencing - Probation Modification
State v. Gray, No.
96-3363-CR (filed 16 April 1999)
The defendant was originally convicted of obtaining controlled
substances by misrepresentation (forged prescriptions). The primary
issue on appeal concerned the state's introduction of "other
acts" evidence.
Affirming the conviction, the supreme court applied the three-step
analysis that it formulated last term in State
v. Sullivan (1998). The other acts consisted of a 1990
conviction for obtaining drugs by misrepresentation and several
uncharged instances involving the use of forged prescriptions.
Under the first step, the court examined whether the trial court
properly admitted the other acts evidence for an "acceptable
purpose" under section
904.04(2). Discussing each proffered purpose separately,
the court held that the evidence was properly admitted to prove
identity, plan, proof of motive, and absence of mistake. It also
found that the evidence was relevant to establish each purpose.
Other acts need not take the form of prior convictions. In response
to the defendant's contention that the state had not offered
sufficient proof that he had committed the other acts, the supreme
court applied the test of conditional relevancy applied in federal
court and several Wisconsin court of appeals cases: Could a jury
acting reasonably find that it is more likely than not that the
defendant committed the other act? On this record the state had
satisfied this standard. Finally, the court held that the evidence
was not so "unfairly" prejudicial under section 904.03
that it warranted exclusion. It noted that the trial judge read
the standard cautionary instruction, Wis JI - Criminal 275.
The second issue concerned the trial judge's power to
modify the defendant's probation sentence before the probation
period actually began. Originally the defendant was convicted
and sentenced on three counts. On postconviction motions the
trial court overturned two of the judgments and then modified
the disposition on the remaining count. The supreme court held
that section
973.09(3), of the Wisconsin Statutes "allows circuit
courts to modify conditions of probation at any time before the
period of probation expires, even before the period of probation
begins."
Taxation
Property Taxes - Exemption for Benevolent Associations
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Wis. Stat. section 70.11
Deutsches Land Inc. v. City
of Glendale, No. 96-2489 (filed 16 April 1999)
Deutsches Land Inc. is a nonstock, nonprofit corporation organized
under Chapter 181 of the Wisconsin Statutes. It primarily serves
as a holding corporation for the real estate and fixed assets
of five incorporated nonstock, nonprofit benevolent associations
that exist for the purpose of preserving Germanic heritage and
culture.
For the benefit of the benevolent associations, Deutsches
Land holds title to roughly 14 acres of property located in the
City of Glendale. Though the property officially comprises a
single parcel, Deutsches Land treats the property as if it were
four lots. Two of the lots have buildings upon them and the remaining
two lots, totaling approximately 5.5 acres, are soccer fields.
One of the two lots containing buildings is called "Old
Heidelberg Park," which covers about 4.5 acres. It is the
sight at which the benevolent associations conduct two major
public festivals. While Deutsches Land does not officially lease
the park to any entity, it allows Bavarian Waldhaus Inc. to use
it on approximately 20 occasions annually. Waldhaus is a for-profit
corporation created by the benevolent associations. Waldhaus
uses the park to host corporate picnics at which it supplies
food and beverages.
The last parcel, which is four acres in size, contains a parking
area for the entire 14-acre parcel and a significant structure
that houses the Bavarian Inn Restaurant, which is a full-service,
for-profit bar and banquet facility open to the public. Deutsches
contracts with Waldhaus to operate the Bavarian Inn Restaurant.
Deutsches Land sought a full exemption from property taxes
for the soccer fields and Old Heidelberg Park and a 25 percent
exemption for the Bavarian Inn building for the years 1993-95.
Glendale denied the applications and Deutsches Land filed suit.
The circuit court ruled that Deutsches Land was entitled to a
full exemption on the soccer fields and Old Heidelberg Park,
and a 25 percent exemption for the Bavarian Inn building. The
court of appeals reversed the circuit court.
In a majority opinion authored by Justice Bradley, the supreme
court affirmed the court of appeals. It concluded that Deutsches
Land did not sufficiently show that it was entitled to an exemption
from real property taxes for the years in question. Deutsches
Land is a benevolent association under Wis. Stat. section
70.11(4). This was never in dispute. However, Deutsches Land
did not produce sufficient evidence showing that the corporate
use of Old Heidelberg Park was incidental in comparison to the
benevolent use of the park. Similarly, it did not sustain its
burden of proving entitlement to a real property tax exemption
for the Bavarian Inn inasmuch as it failed to produce sufficient
evidence to measure a comparison between for-profit and exempt
use of space, time, and income. The court further concluded that
because of its evidentiary failure to support an exemption for
any building, Deutsches Land was not entitled to an exemption
on the soccer fields either. It failed to show that the fields
are "necessary for the location and convenience" of
any building that is exempt under section 70.11.
Justice Prosser filed an opinion concurring in part and dissenting
in part. Justice Wilcox joined Justice Prosser's opinion.
Torts
Child Labor Laws - Street Trades - Employer's
Knowledge - Protected Class
Beard v. Lee Enterprises
Inc., No. 96-3393 (filed 9 April 1999)
Jane Beard's husband was killed in a collision with AK,
a minor. Beard alleged that AK was employed by a newspaper at
the time and was working in a "street trade" during
prohibited hours, contrary to section 103.21(1) (1991-92). AK's
father had a "bundle delivery agreement" with the newspaper
to distribute the papers. The fatal collision occurred at about
4:15 a.m. on a Friday. AK had just finished delivering papers
for his brother, who was a paper carrier, and had bundles of
Sunday supplements in the van for his father. The circuit court
dismissed the complaint and the court of appeals affirmed. It
held that the plaintiffs had to show that the employer (the newspaper)
exercised some control over the method or route of AK's
travel home before it could be found to have violated the child
labor laws.
The supreme court, in an opinion written by Justice Wilcox,
reversed. First, the court held that "knowledge, actual
or constructive, is implicit in the employer/employee relationship
involving a publisher, or an intervening agency, and a minor
involved in a street trade under sec. 103.21(1), on the part
of the employer as to whom it is employing." In this case
the evidence conflicted as to what the employer knew, if anything,
about AK's distribution of newspapers and bundles. For this
reason, summary judgment was inappropriate.
Second, the court also held that "whether there was a
child labor law violation and whether that violation occurred
while [AK] was acting within the scope of his employment are
factual questions which should also be determined by a jury and
not decided on summary judgment."
Finally, the court addressed whether the deceased victim fell
within the class of persons protected by the child labor laws.
It held that "if it is determined that: (1) [The employer]
had actual or constructive knowledge of [AK's] employment;
(2) [the employer] violated a child labor law; (3) such violation
occurred at or about the time of the injury; then we conclude
that the public highway could be [AK's] place of employment
and [the deceased], who was driving on the public highway, could
be a frequenter intended to be protected by the child labor laws
to the extent that [AK] was present and may have been engaged
in the distribution of newspapers - a street trade."
If all these predicates are established, the employer is liable
for the victim's death.
Justice Bradley, joined by Chief Justice Abrahamson, concurred
but disagreed with the majority's conclusion that "absolute
liability automatically results from a violation of the child
labor laws regardless of who is injured."
Damages - Economic Loss Doctrine - Consumer Actions
State Farm v. Ford Motor
Co., No. 97-2594 (filed 4 May 1999)
In 1994 Renberg bought a used 1990 model Ford truck along
with an extended service contract. In 1996 the truck burst into
flames as it sat parked at Renberg's workplace. Renberg's
insurer, State Farm, paid him the value of the vehicle. Later
that same year Renberg received a recall notice from Ford warning
about a faulty ignition switch that could cause a fire. State
Farm brought this subrogation action to recover the money it
had paid to Renberg. Its claims sounded in negligence and strict
liability; contract-based claims were dismissed because the truck
was purchased "as is" and the extended warranty had
expired. The circuit court dismissed the action because the economic
loss doctrine barred recovery.
The supreme court, in an opinion written by Justice Bablitch,
affirmed. The court held "that the same policies that justify
applying the economic loss doctrine to commercial transactions
apply with equal force to consumer transactions"; thus the
economic loss doctrine barred "State Farm's tort claims
for purely economic loss." "Economic loss" is
defined as "the diminution in the value of the product because
it is inferior in quality and does not work for the general purpose
for which it was manufactured and sold." Since 1989 Wisconsin
has applied the economic loss doctrine to bar tort claims in
commercial transactions; put another way, persons suffering damages
are left to their remedies under contract law. The majority opinion
offers a lengthy policy discussion that justifies the application
of the economic loss doctrine to consumer transactions as well
as commercial transactions. The primary theme is the need to
distinguish tort from contract claims. There is, however, a critical
caveat. The majority specifically did not "reach the issue
of the preclusion of a strict-liability claim when the parties
are of unequal bargaining power, the product is a necessity,
no alternative source for the product is readily available, and
the purchaser cannot reasonably insure against consequential
damages."
Chief Justice Abrahamson dissented, joined by Justice Bradley.
The dissent noted that this case involved an insurer asserting
it subrogation rights and that the breadth of the majority's
holding is limited by the caveat quoted above.
Damages - Economic Loss Doctrine - Consumer Actions
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No "Sudden and Calamitous Event" Exception
General Casualty Co. v.
Ford Motor Co., No. 97-3607 (filed 4 May 1999)
This case is a companion to State Farm v. Ford Motor Co.
(see digest above). The Willards' Lincoln Town Car burst
into flames while it was parked in front of their house. Their
insurer, General Casualty, reimbursed them for the value of the
car. The insurer then brought this subrogated action joined by
the Willards, who sought recovery of their deductible. The circuit
court dismissed the action because of the economic loss doctrine.
The supreme court, in an opinion written by Justice Bablitch,
affirmed based on its decision in State Farm v. Ford Motor
Co. In this opinion the court refused to adopt an exception
to the economic loss doctrine for damages suffered in a "sudden
and calamitous event." Other courts that have recognized
the economic loss doctrine have rejected such an exception.
Chief Justice Abrahamson, joined by Justice Bradley, dissented
for the reasons set forth in their dissent to State Farm v.
Ford Motor Co.
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.
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