Criminal Procedure

Disclosure of Exculpatory Evidence – Brady v. Maryland – Ineffective Assistance of Counsel

State v. Wayerski, 2019 WI 11 (filed 7 Feb. 2019)

HOLDINGS: 1) The state did not violate Brady v. Maryland when it failed to disclose certain evidence that could have been used to impeach one of its witnesses. 2) The defendant failed to establish that he was denied the effective assistance of counsel at his trial.

SUMMARY: A jury convicted Wayerski of 16 felonies involving sex offenses committed against two juveniles over the course of several months. The appeal that followed focused on issues regarding the state’s rebuttal witness Clark. Clark was a fellow inmate of the defendant in the county jail, and he testified that the defendant admitted to him much of the conduct for which the defendant was facing trial. On the stand, Clark admitted that he had been convicted of 20 crimes, including some felonies.

One of the issues the Wisconsin Supreme Court addressed, in a majority opinion authored by Justice Dallet, was whether the state violated Brady v. Maryland, 373 U.S. 83 (1963), which held that a state’s suppression of material evidence favorable to the accused violates due process. Material evidence includes evidence that may be used to impeach a prosecution witness.

A few days before the trial in this case, the prosecutor checked Clark’s record using the Consolidated Court Automation Program (CCAP) website and discovered that he had three pending charges involving crimes against children; he followed up on this discovery by obtaining a copy of the criminal complaint charging Clark with those offenses. However, he never disclosed any of this information to defense counsel.

Whether a due-process violation occurred here involves an analysis of Brady’s three components: “(1) the evidence at issue must be favorable to the accused, either because it is exculpatory or impeaching; (2) the evidence must have been suppressed by the State, either willfully or inadvertently; and (3) the evidence must be material” (¶ 35). The state conceded the first component; “evidence of Clark’s pending charges was favorable to the defendant to impeach Clark” (¶ 45).

As for the second component, the majority concluded that the state suppressed the impeaching evidence regarding Clark. “[S]uppression is nondisclosure or the withholding of evidence from the defense. The prosecutor’s mindset or ‘passivity’ is irrelevant” (¶ 58). In reaching this conclusion, the majority “renounce[d] and reject[ed] judicially created limitations on the second Brady component that find evidence is suppressed only where: (1) the evidence was in the State’s ‘exclusive possession and control’; (2) trial counsel could not have obtained the evidence through the exercise of ‘reasonable diligence’; or (3) it was an intolerable burden’ for trial counsel to obtain the evidence” (¶ 44). The majority overruled prior case law that had established these limitations on Brady’ssecond component (see ¶ 65).

Brady’sthird component involves the materiality of the suppressed evidence. "The evidence is material only if there is a reasonable probability that, had the evidence been disclosed to the defense, the result of the proceeding would have been different” (¶ 61). The court concluded in this case that the suppressed evidence did not meet this standard of materiality given the compelling evidence of the defendant’s guilt (see ¶ 62). In so holding, the court noted that Clark had been impeached with his 20 prior convictions.

The defendant also claimed that his trial counsel was ineffective for failing to question him about his alleged confession to Clark when he was called to the stand after Clark’s rebuttal testimony. The court assumed without deciding that this was deficient performance on the part of counsel.

However, to prevail on an ineffectiveness claim, a defendant must also establish that he or she was prejudiced by the lawyer’s deficient performance. This means that the defendant must establish a reasonable probability that, but for counsel’s unprofessional errors, the result of the proceeding would have been different (see ¶ 39). The court concluded that the defendant failed to establish prejudice, relying inter alia on the overwhelming strength of the state’s case against the defendant (see ¶ 42).

Justice Ziegler, joined by Chief Justice Roggensack, filed an opinion concurring in part and dissenting in part. These justices agreed with the result that the majority reached in this case but wrote separately “because the majority opinion chooses to upend longstanding legal principles that have served to properly cabin the judicially-created Brady doctrine … and proceeds to topple over five decades of Brady law” (¶ 66).

Justice Kelly also authored an opinion concurring in part and dissenting in part. He rejected the notion that “the State ‘suppresses’ publicly-available evidence if it does not proactively provide the information to the defendant. The State’s passivity, however, cannot ‘suppress’ information in the public domain, so there can be no Brady violation” (¶ 93).

Fiduciaries

Banks – Bad Faith

Koss Corp. v. Park Bank, 2019 WI 7 (filed 29 Jan. 2019)

HOLDING: Absent proof that a bank had engaged in bad faith when processing transactions by a customer’s embezzling employee, the bank was not liable for the money the embezzler stole.

SUMMARY: An employee of Koss Corp. embezzled more than $30 million from her employer, some of it from accounts at Park Bank. The employee was one of only three Koss employees authorized to conduct transactions at Park Bank. The thefts were done in various ways. After the thefts were discovered, Koss sued Park Bank for “bad faith” under the Uniform Fiduciary Act (UFA).

The circuit court granted summary judgment in favor of Park Bank, ruling that the UFA requires proof that the bank had intentionally ignored evidence that the employee had breached her fiduciary duties. In a published opinion, the court of appeals affirmed. See 2018 WI App 1.

The supreme court affirmed in a lead opinion authored by Chief Justice Roggensack. Although the UFA does not define “bad faith,” its definition of “good faith” under Wis. Stat. section 112.01(1)(c) “implies that bad faith under § 112.01(9) must involve something more than negligent bank conduct and must involve conduct during which the bank did not act honestly” (¶ 31).

Surveying case law construing the UFA, the court discerned bad faith’s “framework.” “First, bad faith is reviewed on a transaction by transaction basis, such that the facts known to each individual bank employee are not aggregated to form collective knowledge of the bank.… Second, whether a bank acted in bad faith is determined at the time of the breach of fiduciary duty, not by looking back at transactions that occurred many months earlier” (¶ 52). “Third, bad faith is an intentional tort; negligence by a bank is insufficient to show bad faith.… Fourth, considerations of bad faith require analyses of a bank’s actions to determine its subjective intent” (¶ 53).

The Chief Justice then applied this framework to the various transactions involving cashier’s checks, petty-cash requests, and wire transfers and concluded that Koss failed to raise an issue of material fact warranting a trial on Park Bank’s liability.

Justice A.W. Bradley, joined by Justice Abrahamson and Justice Dallet, concurred in the mandate but relied on different reasoning that would better promote national uniformity (see ¶ 77) and provide a standard that was “less exacting” on the bank’s customers. “[T]he facts of this case do not present the ‘compelling and obvious’ suggestion of fiduciary misconduct so as to foist liability onto Park Bank” (¶ 92).

Justice Kelly filed a dissenting opinion that Justice R.G. Bradley joined. The dissenters concluded that Park Bank raised a disputed issue of material fact regarding the handling of cashier’s checks by nonauthorized employees (see ¶ 108). They also contended that Justice A.W. Bradley’s concurrence adopts a standard that “conflates” a fiduciary-breach exception with the bad-faith exception (¶ 106).

Insurance

Coverage – Primary-Excess – Duty to Defend – Attorney Fees

Steadfast Ins. Co. v. Greenwich Ins. Co., 2019 WI 6 (filed 25 Jan. 2019)

HOLDING: An insurer was contractually obligated to cover losses for claims timely filed; it also had a duty to defend, and it was responsible for prorated attorney fees.

SUMMARY: This lawsuit related to claims brought when the shortcomings of Milwaukee’s sewer system led to raw sewage flooding more than 8,000 homes during the heavy rains of 2008. The Milwaukee Metropolitan Sewerage District (MMSD) tendered its defense to its insurers, Steadfast Insurance Co. and Greenwich Insurance Co. Steadfast accepted the tender, but Greenwich asserted it was an excess insurer based on its “other insurance” clause. The circuit court granted summary judgment in favor of Steadfast and its claims against Greenwich. In a published decision, the court of appeals affirmed. See 2018 WI App 4.

The supreme court, in an opinion authored by Chief Justice Roggensack, affirmed in part and reversed in part. First, under the contracts, Steadfast and Greenwich “were both primary and successive insurers in regard to MMSD, their common additional insured” (¶¶ 3, 27). Second, Greenwich breached its contractual duty to defend through its erroneous, unilateral determination that it provided only excess coverage (see ¶ 31). Third, Steadfast properly and timely brought a subrogation claim against Greenwich for its payment of $1.5 million in defense-related costs (see ¶ 38).

Fourth, the court apportioned defense costs between the two insurers based on their relative policy limits (2/5 and 3/5) (see ¶ 45). Fifth, Steadfast’s subrogation rights included its recovery of attorney fees. Although no Wisconsin cases had reached this attorney fee issue, the court looked to California and Florida case law (see ¶ 48). Such attorney fees extend to “fees incurred in litigating the appeal and our review herein” (¶ 52).

Justice A.W. Bradley, joined by Justice Dallet, concurred in part and dissented in part. In their view, the majority opinion allows an insurer such as Greenwich to “breach its duty to defend with impunity” and “awards attorney fees … in derogation of the longstanding American Rule” (¶ 58).

Justice R.G. Bradley also concurred in part and dissented in part. She concluded that Greenwich only provided excess coverage and thus the judgment against it should be reversed.

Municipal Law

Partition Fences – Cities’ Duty to Resolve Fence-Related Disputes

White v. City of Watertown, 2019 WI 9 (filed 31 Jan. 2019)

HOLDING: The provisions of Wis. Stat chapter 90 for resolving partition fence disputes unambiguously apply to cities.

SUMMARY: Wisconsin Statutes section 90.03 provides that “the respective owners of adjoining lands when the lands of one of such owners is used and occupied for farming or grazing purposes, shall keep and maintain partition fences between their own and the adjoining premises.…” The statute assigns responsibility for the fence to all adjoining property owners, each of whom must bear maintenance expenses “in equal shares.” Wisconsin Statutes chapter 90 also contains a procedure (hereinafter the enforcement procedure) for resolving disputes regarding partition fences.

In this case the land in question lies within the city of Watertown. When a dispute arose over the respective financial obligations of the plaintiffs and their neighbors for maintaining a partition fence separating their properties, the plaintiffs asked the city to engage the Wis. Stat. chapter 90 enforcement procedure to determine and allocate the cost of maintaining the fence. The city contended that the provisions of Wis. Stat. chapter 90 for resolving such fence disputes apply only to towns – not to cities.

The circuit court disagreed and held that the provisions apply to cities. In a published decision, the court of appeals affirmed. See 2017 WI App 78.

In a unanimous decision authored by Justice Kelly, the supreme court affirmed the court of appeals. It concluded that the Wis. Stat. chapter 90 provisions for resolving fence disputes unambiguously apply to cities (see ¶ 28). Though the relevant Wis. Stat. chapter 90 provisions refer only to “towns,” the court reached its ultimate conclusion in this case by turning to a general definitional provision applicable throughout the Wisconsin Statutes. Specifically, it relied on Wis. Stat. section 990.01(42), which provides that the term “‘town’ may be construed to include cities, villages, wards or districts.”

Property

Permits – Amendments – Piers

Myers v. Wisconsin DNR, 2019 WI 5 (filed 18 Jan. 2019)

HOLDING: The Wisconsin Department of Natural Resources (DNR) lacked authority to unilaterally amend a permit for a lake pier.

SUMMARY: Neighbors complained about a pier built by the Myers in 2001 with a permit issued by the DNR. The pier had allegedly exacerbated lakefront erosion in the area. When the Myers refused to modify their pier, the DNR issued a formal permit amendment compelling them to do so. They refused. The circuit court found that the DNR had the power to amend the permit but remanded the case for more factfinding.

In an unpublished decision, the court of appeals affirmed. It agreed that the DNR was authorized to amend the permit, also concluding that no further factfinding was needed, because certain exemptions were inapplicable.

The supreme court reversed in a majority opinion authored by Justice Dallet. The DNR had argued that it could unilaterally amend the permit on two grounds. First, the DNR argued, it had reserved this power in a condition placed in the original 2001 permit. Rejecting this contention, the supreme court emphasized that no statutory provision, particularly Wis. Stat. section 30.13(3m)(d)2., authorized the DNR to reserve such power in a permit (see ¶ 24).

The second contention raised the issue “whether the permit was akin to a building permit or is a permit governing possession, and, accordingly when, if at all, the Myers’ permit expired” (¶ 26). The court held that “based upon a plain reading of the language of Wis. Stat. ch. 30, a permit issued under Wis. Stat. § 30.12 is akin to a building permit” (¶ 27). The “placement” of the pier referred “to setting a pier in the navigable waters, not the ongoing use of a pier” (¶ 33). When the Wisconsin Legislature intended to include “responsibility for ongoing maintenance,” it explicitly so provided in the statutes (¶ 34).

Justice A.W. Bradley dissented. “[T]he pier-permitting statutes necessarily imply a grant of power to the DNR to amend permits” (¶ 41).

Torts

Claims Against Governmental Agencies – Notice of Injury – Multiple Nuisance Claims

Yacht Club at Sister Bay Condo. Ass’n Inc. v. Village of Sister Bay, 2019 WI 4 (filed 18 Jan. 2019)

HOLDING: The plaintiff failed to serve the defendant village with a timely notice of injury with respect to its nuisance claims against the village.

SUMMARY: The Yacht Club at Sister Bay Condominium Association (the Yacht Club) filed a nuisance action against the village of Sister Bay alleging that summer concerts held at a public park constituted a public and private nuisance. Among other reasons, the circuit court dismissed the action because the plaintiff did not timely serve the village with a notice of injury “within 120 days after the event giving rise to the claim.” See Wis. Stat. § 893.80(1d)(a).

On this issue the court of appeals affirmed. In its unpublished opinion, it concluded that “the Yacht Club failed to provide the Village with a timely written notice of injury and that each concert held by the Village does not constitute a new ‘event’ giving rise to a new opportunity to file a notice of injury” (¶ 1).

In a unanimous decision authored by Justice A.W. Bradley, the supreme court held that “each concert that is alleged to be a nuisance constitutes a separate event for purposes of filing a written notice of injury. However, because the Yacht Club failed to serve its written notice of injury within 120 days after the date of the last concert alleged to be a nuisance, its written notice of injury was not timely filed” (¶ 3).

Nonetheless, the supreme court remanded the matter to the circuit court to consider whether the village had actual notice of the Yacht Club’s claim and was not prejudiced by the late filing of the notice of injury (see ¶ 43). See also Wis. Stat. § 893.80(1d)(a) (providing that failure to provide the governmental entity with a timely notice of injury shall not bar action on the claim if the governmental entity had actual notice of the claim and the claimant shows to the satisfaction of the court that the failure was not prejudicial to the governmental entity).