Wisconsin Lawyer
Vol. 85, No. 11, November 2012
Consumer Law
Wisconsin Consumer Act – Self-Help Repossession – Notice
Credit Acceptance Corp. v. Kong, 2012 WI App 98 (filed 14 Aug. 2012) (ordered published 27 Sept. 2012)
This case involves the application of the Wisconsin Consumer Act (WCA) to a deficiency judgment on a contract entered into in Minnesota. Kong bought a car in Minnesota, putting down $1,200 and borrowing the rest. The contract's choice-of-law provision designated Minnesota law. Kong made his July payment in early August and paid nothing more. Credit Acceptance Corp., which owned the debt, sent a notice of right to cure default to Kong on Sept. 24. Kong did nothing, and Credit Acceptance repossessed the vehicle in November. When Credit Acceptance sued for a deficiency judgment, Kong counterclaimed under the WCA. The circuit court ruled that Credit Acceptance had acted prematurely in sending the notice and that the repossession therefore violated the WCA. The court awarded damages, which included the amount of the down payment, the value of the vehicle, and past payments made by Kong.
In an opinion written by Judge Mangerson, the court of appeals affirmed but modified the judgment. The WCA governs transactions even when they are not made in Wisconsin (see ¶ 11). Specifically, creditors must comply with the WCA if they wish to bring suit in Wisconsin courts. In effect, by bringing suit in a Wisconsin court, the creditor consents to be governed by the WCA. This is significant because the retail installment contract at issue was "at odds with the applicable provisions of the WCA" (¶ 12). Credit Acceptance's notice was premature under the WCA because Kong was "not in default under the WCA at the time the notice was sent" (¶ 13). The opinion calculates the applicable timeline, including the waiting period. The invalidity of the notice meant that Credit Acceptance was not entitled to engage in self-help repossession (see id.).
The court also affirmed the circuit court's damages awards, including attorney fees, except for $1,000 in statutory damages. The court's order did not "specify in what prohibited debt collection practice Credit Acceptance engaged" (¶ 18).
Criminal Law
Homicide by Intoxicated Use of a Vehicle – Death of Unborn Child – Equal Protection Challenge to Statute Rejected
State v. Benson, 2012 WI App 101 (filed 1 Aug. 2012) (ordered published 27 Sept. 2012)
This case arose out of an incident in which the defendant, Benson, while driving under the influence of an intoxicant, crashed the vehicle he was driving into another vehicle. As a result, the other car's driver and her unborn child and daughter were killed and two other passengers were injured. The defendant pleaded guilty to multiple charges, including a count of homicide by intoxicated use of a vehicle (Wis. Stat. § 940.09) that related to the unborn child's death.
On appeal, Benson argued that his conviction cannot stand because Wisconsin law creates an unconstitutional exemption from criminal liability for "[a]n act by a woman who is pregnant with an unborn child that results in the death of or great bodily harm, substantial bodily harm or bodily harm to that unborn child." Wis. Stat. § 939.75(2)(b)3.
"Specifically, Benson complains that under Wis. Stat. § 939.75(2)(b)3. a pregnant woman can cause the death of the unborn child within her 'by drinking, drug overdose, stabbing herself in the abdomen or any other means, including intoxicated use of a vehicle' without criminal liability, while others, like Benson, are not similarly exempt for such acts causing the death of the same unborn child. Benson argues that because the statute exempts 'certain intoxicated drivers' from criminal liability for causing the death of an unborn child, 'equal protection prohibits his prosecution for the same conduct in this case.' Benson contends that a pregnant woman who causes the death of the unborn child within her by intoxicated use of a vehicle is similarly situated to all others, including Benson, who might cause death to the unborn child by intoxicated use of a vehicle because both 'groups' are 'intoxicated drivers who kill an unborn child'" (¶ 10).
In a decision authored by Judge Gundrum, the court of appeals rejected the defendant's constitutional challenge. The court noted that the Equal Protection Clause is not implicated, much less violated, unless the groups that are treated differently are similarly situated in the first instance. "A pregnant woman who causes the death of or harm to an unborn child within her is not similarly situated to others, like Benson, who might cause the death of or harm to the same child" (¶ 12).
The court explained that "[a] pregnant woman who engages in conduct which causes the death of or harm to the unborn child within her, necessarily jeopardizes her own life or health by engaging in such conduct. If the pregnant woman drinks excessively, overdoses on drugs, or stabs herself in the abdomen, to use Benson's examples, causing risk of death or harm to the unborn child, she necessarily risks death or harm to herself as well. No one else, including Benson, inherently risks death or harm to himself or herself by engaging in conduct which causes the death of or harm to an unborn child living within another individual. Further, of the two 'groups' who might cause the death of or harm to an unborn child by intoxicated use of a motor vehicle, only the pregnant woman has the ability to subsequently procure medical care for the unborn child or terminate her pregnancy" (¶ 14).
The appellate court also concluded that the defendant was not denied the effective assistance of counsel at sentencing when his attorney failed to correct allegedly incorrect information in an expert's report that was prepared for purposes of sentencing.
Criminal Procedure
Interrogations – Right to Counsel – Reinterrogation – Inaudible Recordings
State v. Conner, 2012 WI App 105 (filed 14 Aug. 2012) (ordered published 27 Sept. 2012)
The defendant, who had pleaded guilty to a charge of attempted armed robbery, appealed the denial of his motion to suppress statements he made during custodial interrogation. The court of appeals reversed the circuit court in an opinion authored by Judge Curley.
The appellate court held that at various points during the interrogation, the defendant had expressly asserted his right to counsel, which should have promptly terminated the interrogation. The court of appeals also held that at no time did the defendant reinitiate contact with police in a way that would have permitted reinterrogation. The opinion carefully parses the transcribed interrogations, which were electronically recorded. In reversing the trial judge, the court of appeals relied on its own construction of the transcribed interrogation.
In a footnote, the court addressed the problem of inaudible recordings. "We also remind all trial judges who rely upon audio recordings to make their decisions that they must clearly list those portions of the recording on which they relied. Additionally, if portions of the recording transcript indicate that the recording is inaudible – as was the case here – courts must indicate whether they relied upon information gleaned from their own review of the recording that the court reporter who transcribed the recording may not have heard" (¶ 34 n.6).
Search and Seizure – Consent – Ineffective Assistance – Improper Character Evidence
State v. Jacobs, 2012 WI App 104 (filed 1 Aug. 2012) (ordered published 27 Sept. 2012)
A jury convicted the defendant, Jacobs, of homicide by use of a vehicle with a prohibited alcohol concentration and with a detectable amount of a restricted controlled substance, based on an incident in which the defendant's vehicle ran a stop sign and struck the victim's car.
The court of appeals affirmed in an opinion written by Chief Judge Brown. First, the court held that the defendant voluntarily consented to undergoing a blood test at the hospital. The defendant had refused the test several times and had spoken with a lawyer, who also advised him to say nothing and to not take any tests. Nonetheless, the court of appeals held proper the circuit court's finding that the defendant had consented to the blood test, a finding based on testimony by the police officers that the defendant had changed his mind.
The testimony was not "'inherently or patently incredible.' … The trial court pointed to one plausible scenario – that Jacobs ultimately changed his mind and agreed to a blood test against his attorney's advice because he wanted to be cooperative and help with the investigation. Because the trial court's answer to Jacobs' argument is not contrary to fully established or conceded facts or in conflict with nature, we reject Jacobs' involuntary consent claim" (¶ 20). The court also rejected Jacobs' Fourth Amendment claims that he had been "seized" while police transported him to the hospital and that he had been placed in "custody" while at the hospital (see ¶¶ 21-22). On several occasions, officers reminded him that he was not under arrest.
Turning to the defendant's ineffective-assistance-of-counsel claim, the court of appeals was plainly "troubled" by trial counsel's failure to object to testimony and arguments that portrayed the victim's good character. Specifically, the victim's mother provided "extensive background testimony" about the victim's life and the impact his death had on the family. Such testimony was irrelevant and thus inadmissible.
The court did not, however, have to take up whether trial counsel's failure to object was reasonable trial strategy. "In this case, the relevant, admissible evidence against Jacobs was overwhelming, more than enough to convince us that no jury would have been swayed by the mother's irrelevant testimony about her son's good character. Uncontroverted testimony showed that Jacobs ran a stop sign without stopping or slowing down and with alcohol and a cocaine metabolite in his bloodstream. Jacobs' argument that counsel's deficient performance was prejudicial boils down to this: because he presented a plausible affirmative defense that was rejected by the jury, the mother's testimony may have prejudicially swayed the jurors against him" (¶ 31).
The affirmative defense, however, was not plausible. "Jacobs' argument that he was not impaired and did exercise due care misses the mark. He simply did not exercise due care. He blew the stop sign.… Jacobs tries to turn the statutory affirmative defense on its head by evidence that the victim was speeding and, but for the speeding, the accident would not have happened. But regardless of this evidence, he cannot get around the fact that his running of the stop sign was a substantial factor in causing the collision, even if the victim's speeding was also a factor. There is no reasonable probability that, even if trial counsel had objected and even if the mother did not testify to her son's character, it would have made any difference" (¶ 33).
Other Acts Evidence – Ineffective Assistance – Discovery – Brady Duty
State v. Lock, 2012 WI App 99 (filed 7 Aug. 2012) (ordered published 27 Sept. 2012)
A jury convicted Lock of two counts of murder, armed kidnapping, and possession with intent to deliver cocaine. He appealed the denial of his postconviction motions.
The court of appeals affirmed in an opinion written by Judge Brennan. First, the court rejected Lock's contention that other acts evidence had been erroneously introduced. The opinion canvasses the testimony of 10 different witnesses who talked about a plethora of conduct spanning many years. The court applied the three-step Sullivan test to each instance and concluded that the other acts evidence had either been properly admitted or, if not properly admitted, that its admission constituted harmless error in light of the overwhelming other evidence against Lock. See State v. Sullivan, 216 Wis. 2d 768, 576 N.W.2d 30 (1998). The analysis is necessarily fact intensive and will not be discussed further.
Second, the prosecution did not violate its duty to disclose exculpatory evidence under the Brady doctrine. Here, too, the opinion canvasses an array of evidence. Much of this argument turned on the contents of several "proffer letters," which the circuit court properly found had been provided to the defense along with thousands of other documents (see ¶¶ 98, 105, 116). Other evidence relating to whether Lock himself was a "snitch" was not material to his defense (see ¶ 109).
Third, there was no violation of Lock's right to reciprocal discovery under Wis. Stat. section 971.23, pertaining to statements he made to witnesses. "We conclude that even assuming that the State was required to disclose Lock's statements to McCray before trial, and even if the State failed to establish good cause for its omission, its failure to do so was harmless.… The jury heard that McCray was a disgruntled ex-girlfriend who was receiving substantial consideration from the federal government for her cooperation in the case against Lock. Furthermore, the entirety of her testimony was that Lock told her he knew the bodies were in the backyard but that 'he didn't do it.' Lock did not explain his role in the deaths or otherwise elaborate on how Melendez-Rivas or Chaney died. As we have already established, there were several other vastly more reliable witnesses at the trial who testified as eyewitnesses to Lock's role in the crimes" (¶ 123).
Finally, on grounds that replicated those described above, the court refused to grant the defendant's motion for a new trial in the interest of justice.
Municipal Law
Liquor Licenses – Nonrenewal – De Novo Judicial Review
Nowell v. City of Wausau, 2012 WI App 100 (filed 21 Aug. 2012) (ordered published 27 Sept. 2012)
Following notice and a hearing before the Wausau Public Health and Safety Committee, the city of Wausau declined to renew the plaintiffs' combined beer and liquor license for a bar they owned. As justification for the decision, the city cited 51 occasions on which police officers went to the bar during a seven-month period. The plaintiffs sought judicial review of the city's decision under Wis. Stat. section 125.12(2)(d) and demanded that the circuit court independently determine whether the bar was entitled to renewal of its license.
The circuit court declined to undertake a de novo review of the matter but instead concluded that its scope of review was limited to matters reviewable by certiorari. Applying the certiorari standard, the circuit court determined that the city kept within its jurisdiction, acted according to law, did not act arbitrarily, and based its decision on the evidence before it. The plaintiffs then appealed to the court of appeals.
In a decision authored by Judge Mangerson, the court of appeals reversed. The court looked to the language of section 125.12(2)(d), which, as it pertains to a nonrenewal decision, provides that the "procedure on review shall be the same as in civil actions instituted in the circuit court."
The statute directs that the party desiring review must file pleadings, which must be served in accordance with Wis. Stat. chapter 801. The opposing party has 20 days to file an answer, after which "the matter shall be deemed at issue and [a] hearing may be had within [five] days." Section 125.12(2)(d) directs that the hearing is to be held before the court without a jury and gives the court authority to issue subpoenas for witnesses and compel their attendance. The court must file a decision within 10 days of the hearing and transmit a copy to each of the parties (see ¶ 6).
The appellate court concluded that "§125.12(2)(d) plainly establishes a review process that is incompatible with either common law or statutory certiorari review" (¶ 8). "The process for obtaining a writ of certiorari bears no resemblance to the usual processes of courts, by which controversies between parties are settled by judicial tribunals, and [among other differences] there is no answer or other opposing pleading" (¶ 7) (internal quotations omitted). Accordingly, the appellate court held that "[section 125.12](2)(d) requires a circuit court to independently determine whether a licensee is entitled to renewal" (id.).
In this case the circuit court erroneously interpreted section 125.12(2)(d) to require review by certiorari. This limited the plaintiffs' opportunity to raise matters and present evidence outside the scope of certiorari review and incorrectly accorded the city's nonrenewal decision a presumption of correctness. The court of appeals directed the circuit court, on remand, to conduct any additional hearings necessary to exercise its sound discretion on the issue of renewal of the plaintiffs' license (see ¶ 13).
Taxation
Property Taxation – Exemption for Wis. Stat. Chapter 50 Facilities Owned by Nonprofit Entities
Beaver Dam Cmty. Hosp. Inc. v. City of Beaver Dam, 2012 WI App 102 (filed 23 Aug. 2012) (ordered published 27 Sept. 2012)
This case concerns a state property-tax-code exemption that the legislature amended in 2009. The revised statute contains an exemption for "[p]roperty owned and used exclusively by churches or religious, educational or benevolent associations, or by a nonprofit entity that is operated as a facility that is licensed, certified, or registered under ch. 50, including benevolent nursing homes … but not exceeding 10 acres of land necessary for location and convenience of buildings while such property is not used for profit." Wis. Stat. § 70.11(4)(a) (emphasis added).
Beaver Dam Community Hospitals Inc. is a federal-tax-exempt nonstock, nonprofit corporation that owns and operates the Eagle's Wings facility. Eagle's Wings qualifies as a community- based residential facility, as defined in Wis. Stat. chapter 50. The city of Beaver Dam assessed taxes on the real and personal property used for Eagle's Wings.
The hospital system contested the assessment in the circuit court. It argued that the property is exempt under section 70.11(4)(a) because it is a chapter 50 facility owned by a nonprofit entity. In response, the city argued that the exemption applies only to facilities that have a benevolent use, and that the hospital system failed to show benevolent use by its facility. The circuit court agreed with the hospital system that the exemption does not require a showing of benevolent use and granted summary judgment to the hospital system.
In a decision authored by Judge Blanchard, the court of appeals affirmed. It concluded that the statute quoted above unambiguously allows an exemption for any chapter 50 facility owned by a nonprofit entity (see ¶ 9). Said the court, "we agree with the hospital system that the City's interpretation is not supported by the language of the statute and conclude that the only reasonable interpretation, consistent with the text of the statute, is that 'a nonprofit entity that is operated as a facility that is licensed, certified, or registered under ch. 50' is eligible for the exemption, whether or not the facility is benevolent"(¶ 12).
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