Wisconsin Lawyer Vol. 83, No. 11, November 2010

• Civil Procedure
• Criminal Procedure
• Employment Law
• Insurance
• Juvenile Law
• Real Property
• Taxation

Civil Procedure

D & D Carpentry Inc. v. U.S. Bancorp, 2010 WI App 122 (filed 18 Aug. 2010) (ordered published 29 Sept. 2010)

The court of appeals described the controlling issue in this case as “whether an arbitration order, entered by the trial court after the attorneys consented to arbitration in open court, is valid when one of those attorneys allegedly entered into the agreement without his client’s consent.” In a decision authored by Chief Judge Brown, the court concluded that the order was not valid.

The court began its analysis by noting that, in a civil case (like the breach-of-contract litigation that was involved in this appeal), it is not required that a party personally waive his or her right to a trial on the record; it is sufficient if the attorney waives it on the client’s behalf. But that presupposes that the attorney has the authority to so act (see ¶ 7). As far as settlements are concerned, “the general rule is that an attorney has no authority to enter into a binding settlement agreement without his or her client’s consent” (¶ 8). An agreement to arbitrate rather than use court resources is a settlement tool, and many cases identify an agreement to arbitrate as a form of settlement.

“Therefore, we are comfortable with saying that, just like settlement, no attorney has the authority to forego a jury trial in favor of arbitration without the client’s consent. In both cases, the attorney-client relationship is one of agent to principal, and as an agent, the attorney must act in conformity with his or her authority and instructions and is responsible to the principal if he or she violates this duty” (id.). When a client believes that his or her attorney has consented to arbitration without the client’s consent, it is the client’s burden to show that the attorney’s actions were unauthorized (see ¶ 1).

The court of appeals concluded that to the extent that the circuit court, believing that arbitration was the best and fairest option to reach a resolution, ordered arbitration without deciding whether the client consented to arbitration (the latter issue arising after the client obtained replacement counsel and challenged the court’s arbitration order), the circuit court was without authority to do so (see ¶ 16). “It is not the province of the trial court to order arbitration based on what it opines is the best way to resolve a case. Rather, ‘arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit’” (id.) (citation omitted).

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Criminal Procedure

State v. Schultz, 2010 WI App 124 (filed 17 Aug. 2010) (ordered published 29 Sept. 2010)

Among the issues litigated in this appeal was one relating to proper venue in cases involving the crime of obstructing an officer (Wis. Stat. § 946.41(1)). When Schultz was interviewed at his place of employment in Barron County by a police officer from the Chippewa County community of Cornell, he allegedly gave a false statement relating to a theft that occurred in Chippewa County. The obstructing charge was filed and tried in Chippewa County, and the defendant was convicted. In a decision authored by Judge Brunner, the court of appeals reversed.

Although proper venue is not an element of a crime, it nonetheless must be proved by the state beyond a reasonable doubt (see ¶ 12). Generally, a criminal action must be tried in the county in which the crime was committed. See Wis. Stat. § 971.19(1). The state argued for application of Wis. Stat. section 971.19(2), which provides that when two or more acts are requisite to the commission of any offense, the trial may be in any county in which the acts occurred. In the state’s view, Chippewa County was an appropriate venue because the defendant’s statements in Barron County led to additional investigative steps in Chippewa County.

The court of appeals disagreed. “We cannot accept the State’s argument because the obstruction statute … clearly contains a temporal element that focuses on the officer’s status at the time of the defendant’s conduct. Obstruction requires proof that the defendant knowingly obstructed an officer while the officer was acting in his or her official capacity and with lawful authority. Henes v. Morrissey, 194 Wis. 2d 338, 353, 533 N.W.2d 802 (1995). Although the obstruction statute evaluates the conduct of two actors – the defendant and the officer – it does so simultaneously, at the time of the defendant’s act. Consequently, the obstruction statute does not contemplate venue in any county where the officer may take further investigative steps” (¶ 16). Accordingly, the court concluded that section 971.19(2) is inapplicable to the crime of obstructing an officer (see id.).

As for the procedure for challenging venue, the court indicated that “[a] defendant need not challenge venue, or request a venue instruction, before trial; instead, he or she may put the State to its proof and determine whether an instruction is warranted after hearing the evidence. The jury instruction conference is a permissible time at which to request a venue instruction” (¶ 12). A specific instruction on venue needs to be given only when venue is contested (see ¶ 10).

State v. Linton, 2010 WI App 129 (filed 31 Aug. 2010) (ordered published 29 Sept. 2010)

A jury convicted Linton of first-degree reckless homicide and felony murder with respect to two murders that occurred within a week’s time of each other. The court of appeals affirmed the convictions in an opinion authored by Judge Curley.

First, the circuit court properly rejected Linton’s motion to suppress his custodial statements. In an initial interview Linton said he did not want to speak with police (“no”). Six hours later, when a second team of detectives interviewed him, Linton made an ambiguous reference to an attorney, which detectives lawfully clarified before interrogating him. The court of appeals held the second interrogation complied with Miranda precedent (see ¶¶ 7–11).

Second, the circuit court properly joined the two homicides for trial. Overlapping testimony connected the two homicides; thus, had they been tried separately, the same evidence would have been introduced (see ¶ 17).

Third, the circuit court acted within its discretion in admitting autopsy photographs of one of the victims. “As explained by the trial court, if the jury determined that Linton was guilty of felony murder as a party to the crime, the verdict form directed it to determine, as a penalty enhancer, whether Linton committed the underlying crime of burglary while armed with a dangerous weapon. The statutory definition of a ‘dangerous weapon’ includes any ‘instrumentality which, in the manner it is used or intended to be used, is calculated or likely to produce death or great bodily harm.’ Wis. Stat. § 939.22(10). Bolt cutters are not generally considered a dangerous weapon but can be as used here. After reviewing the photographs, we conclude that the trial court properly exercised its discretion in admitting them into evidence. The trial court was sensitive to the nature of the photos, mindful of the potential prejudice and concluded that this was outweighed by their probative value. Under our deferential standard of review, we cannot say that the trial court erroneously exercised its discretion when it allowed the photographs to be presented during Linton’s trial” (¶ 28).

State v. Harrell, 2010 WI App 132 (filed 24 Aug. 2010) (ordered published 29 Sept. 2010)

A jury convicted Harrell of first-degree reckless homicide while armed and of being a felon in possession of a firearm. The court of appeals affirmed the conviction in an opinion written by Judge Fine.

First, the circuit court properly refused to suppress testimony about officers finding the gun under a chair cushion. The judge found that Harrell was “house sitting” and lawfully consented to officers entering the home to continue their noncustodial interrogation of him. Because the officers reasonably suspected Harrell of having committed a violent crime, they acted prudently in checking for weapons underneath a cushion, where they discovered cocaine. The presence of the cocaine provided probable cause to arrest Harrell, and the search-incident-to-a-lawful-arrest doctrine permitted them to search under another nearby seat cushion, about five feet away, where they found the firearm.

Second, the court of appeals considered and rejected various claims of ineffective assistance of trial counsel involving impeachment of witnesses, failure to pursue an alibi, and the state’s use of hearsay. It also declined to order a new trial in the interest of justice.

State v. Jones, 2010 WI App 133 (filed 24 Aug. 2010) (ordered published 29 Sept. 2010)

A jury convicted Jones of first-degree reckless homicide. The court of appeals affirmed in an opinion written by Judge Fine.

The first and most central issue on appeal involved the admissibility of the state’s evidence in which a firearms technician testified that a gun matched a cartridge found at the scene and a bullet removed from the victim’s body. The witness testified that his opinion carried no rate of error! On appeal, Jones sought a “blanket rule” that would severely limit and regulate such “match” testimony. The court of appeals rejected the request, observing that even in the federal system, where judges are empowered as gatekeepers to ensure that only reliable expert testimony is put before the jury, such determinations are made on a case-by-case basis, not pursuant to blanket rules. Moreover, Jones’s lawyer did not object at trial and even opened the door somewhat through his cross-examination. Even assuming trial counsel was deficient, insufficient prejudice was shown.

In a related argument, the court refused to reach the issue of whether Jones had a right to hire an expert at “taxpayer expense” to develop his postconviction challenge to the ballistics evidence. “This is not an appropriate case to either analyze or decide that issue because, as we have seen, the jury here was presented with overwhelming evidence of Jones’s guilt, and, as we have already seen, the tempering or even the complete negation of the technician’s testimony tying the gun to the cartridge case and to the bullet would not have affected a reasonable jury’s assessment of whether Jones shot Sprewer while attempting to rob him” (¶ 42).

The court also considered and rejected several assertions of prosecutorial misconduct, including alleged discovery violations and the introduction of the ballistics testimony, which Jones claimed was false. The court of appeals disagreed that Jones received ineffective assistance of trial counsel, especially in light of the overwhelming evidence against him (see ¶ 39). Finally, the court rebuffed Jones’s contention that newly discovered evidence justified a new trial (see ¶ 40).

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Employment Law

Service Employees Int’l Union Local No. 150 v. WERC, 2010 WI App 126 (filed 24 Aug. 2010) (ordered published 29 Sept. 2010)

A school district employee, Bishop, filed grievances against both the school district that fired her and her union, Service Employees International Union Local No. 150 (SEIU), which she claimed improperly handled her case. WERC ruled that the SEIU acted in an “arbitrary manner,” a finding that was affirmed by the circuit court.

The court of appeals reversed in an opinion authored by Judge Kessler. Although the decision is fact-intensive, the court held that WERC erred when it found that the SEIU had acted arbitrarily when its conduct was viewed as a whole, even though none of its specific acts were arbitrary.

“WERC has never before held that various substantially different actions, none of which are arbitrary individually, can nonetheless become arbitrary in the aggregate and thereby support a determination that the union breached its duty of fair representation. WERC’s decision does not explain the reason for its departure from existing policy. We conclude that WERC’s analysis is contrary to existing case law outlining the actions that constitute arbitrary conduct. Moreover, WERC’s analysis is problematic, because it makes it impossible for unions attempting to govern their conduct to know what conduct WERC will consider arbitrary. WERC tells unions that certain acts are not arbitrary, but if a union engages in enough such acts, the union then breaches its duty of fair representation. This is hardly clear guidance, and it is contrary to the principles underlying the judicially created duty of fair representation” (¶ 55).

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Insurance

Kender v. Auto Owners Ins. Co., 2010 WI App 121 (filed 10 Aug. 2010) (ordered published 29 Sept. 2010)

Early one morning, after leaving a “gentlemen’s club,” Lucey was involved in a car accident while driving a car rented by his employer. Lucey was in Wisconsin on business for the employer, a Minnesota company that insured the vehicle through Auto-Owners. The circuit court applied Minnesota’s “initial permission” rule in holding that the Auto-Owner’s policy covered Lucey’s accident.

The court of appeals affirmed in an opinion written by Judge Curley. “When it comes to permissive use, Wisconsin applies the mere deviation rule, which allows insurance coverage only where the deviation from the scope of permission was minor, when determining the scope of permission under an automobile liability policy.... In contrast, Minnesota adheres to the initial permission rule, ‘which provides that when a named insured initially gives another permission to use a vehicle, subsequent use, short of conversion or theft of the vehicle, remains permissive even though the use is outside the initial grant of permission.’ ... Thus, the determination of whether Minnesota or Wisconsin law applies to the permissive use issue is pivotal to the outcome of this case. As Auto-Owners points out, if Minnesota’s initial permission rule applies, then Lucey is a permissive user under Strom’s policy with Auto-Owners; however, if Wisconsin law applies, whether Lucey was driving with Strom’s permission at the time of the accident is a question to be resolved by the jury” (¶ 7) (citations omitted).

The court of appeals held that neither case law nor statute restricted the initial permission rule to accidents occurring within Minnesota (see ¶ 13). Second, under the “grouping of contacts” rule, Minnesota “has the more significant relationship with the Auto-Owner’s policy” under conflicts of laws principles. For example, the policy incorporated Minnesota-specific provisions (see ¶ 22).

Maxwell v. Hartford Union High Sch. Dist., 2010 WI App 128 (filed 25 Aug. 2010) (ordered published 29 Sept. 2010)

A teacher, Maxwell, sued the school district for breach of contract after she was terminated for budgetary reasons. The district’s insurer, CIC, provided a defense but did not reserve any rights under the policy. The circuit court awarded damages to Maxwell. CIC then asserted a clause in the policy that excluded coverage for amounts due under a performance contract and for lost wages and benefits. CIC’s position was that a coverage clause cannot be waived or estopped. The circuit court ruled in CIC’s favor.

The court of appeals reversed in an opinion written by Judge Anderson. Certain cases establish that “coverage cannot be created by waiver or estoppels” (¶ 17), but those cases were very much unlike this one, in which “the insurer agree[d] to defend the insured without a reservation of rights, retain[ed] counsel, and actively defend[ed] the insured through to final judgment detrimental to the insured, only then to decline to provide coverage” (¶ 18).

“Treatises, case law from other jurisdictions, and case law from Wisconsin create an exception to the general rule that coverage cannot be created by the doctrines of estoppel or waiver under precisely the facts presented here – where the insurer exercised dominion and control over the litigation, without a reservation of rights or nonwaiver agreement.... This case falls squarely into this exception. CIC admits that at the time it undertook the defense of the District, it knew that Maxwell was pursuing a cause of action for breach of contract and the policy it issued excluded coverage for ‘[a]ny amount actually or allegedly due under the terms of any payment or performance contract or agreement.’ Further, as we note above … CIC proceeded without issuing a reservation of rights letter” (¶ 24). The court also discussed two Wisconsin cases that were “directly on point” (see ¶ 28).

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Juvenile Law

State v. Dionicia M., 2010 WI App 134 (filed 24 Aug. 2010) (ordered published 29 Sept. 2010)

A truancy officer from the local police department received a request to locate Dionicia M. and return her to her high school. The officer found her about a half block from school. He asked her to get into the back seat of his squad car so that he could take her back to school, and she complied. Because the back doors of the squad car were locked, Dionicia was not able to open the doors and get out.

The officer had previously heard from another law enforcement official that Dionicia was a possible suspect in a battery case. While driving Dionicia back to school, the officer asked Dionicia whether she had been involved in the battery. She replied that she had been involved. The officer then asked her whether she would be willing to give a statement about her involvement in the battery, and she agreed to do so. The conversation in the squad car was not recorded.

The officer brought Dionicia into an office at the high school. He estimated about 5 to 10 minutes elapsed between the time he initially stopped her and the time they arrived at the office. In the office the officer turned on a recording device, read Dionicia her Miranda rights, and continued questioning her about her involvement in the battery. The officer then prepared a written statement, which Dionicia signed.

The district attorney subsequently filed a petition against Dionicia alleging substantial battery. Dionicia moved to suppress the oral and written statements she made, claiming, among other things, that they were obtained in violation of the recording requirement specified in State v. Jerrell C.J., 2005 WI 105, 283 Wis. 2d 145, 699 N.W.2d 110. The circuit court denied the motion.

Dionicia entered a no-contest plea to an amended petition charging misdemeanor battery as a party to a crime. She was adjudicated delinquent and ordered to spend 30 days in secure detention. During the pendency of the case, Dionicia had been placed in shelter care. She failed to return to shelter care one evening and as a result was placed in secure detention for five days before the disposition of her case. She requested that credit for those five days be applied to the 30-days’ secure detention ordered as part of the disposition of her case. The juvenile court denied her request.

In a decision authored by Judge Peterson, the court of appeals reversed. With regard to the statements given by Dionicia, the court noted that Jerrell C.J. announced a bright-line rule requiring all custodial interrogations of juveniles to be electronically recorded when feasible (see ¶ 8). It agreed with the trial judge that Dionicia was in custody while in the back seat of the squad car.

“[The officer] sought out Dionicia at the school’s request because she was truant. He told her he intended to take her back to school, and he directed her to the locked back seat of his patrol car. Once she was in the locked car, he questioned her about her involvement in a crime. A reasonable person, particularly a fifteen-year-old, would not feel free to leave the back of a patrol car under these circumstances. From the time Dionicia entered the officer’s patrol car, she was in custody” (¶ 10). The fact that Dionicia was not frisked and that the officer did not use handcuffs or display a weapon did not undercut the court’s custody determination.

The court of appeals further concluded that it was “feasible” for the officer to record his initial interrogation of Dionicia. “[The officer] was only half a block from the school when he located Dionicia. Only five to ten minutes elapsed between the time he took her into custody and the time they arrived at the school office, which contained recording equipment. [The officer] could easily have refrained from questioning Dionicia about her involvement in the battery until after they arrived at school. Had [the officer] waited the five to ten minutes before questioning Dionicia, recording the entire interrogation would have been ‘capable of being done or carried out’ [the dictionary definition of ‘feasible’]” (¶ 13). The fact that the officer did not have a recording device in the squad did not make it unfeasible to record the conversation. “Although [the officer] may not have been capable of recording the initial conversation while in the squad car, nothing prevented him from waiting to question Dionicia until after the short time it took to return to school” (¶ 14).

The state argued that even if Dionicia’s statement in the squad car should be suppressed, her later statement at the school should not be suppressed because it was recorded. The appellate court disagreed. “[W]e conclude Jerrell C.J. does not allow the admission of partially recorded interrogations of juveniles…. The custodial interrogation of Dionicia, which began in the squad car and continued in the school office, was not recorded in full. Therefore, the juvenile court should have suppressed the interrogation in its entirety” (¶ 16).

Lastly, the court addressed whether Dionicia is entitled to credit against her 30-days’ detention for time she spent in secure detention while the case was pending. The court agreed that she is entitled to this credit. Wisconsin Statutes section 938.34(3)(f)1. provides that a juvenile is entitled to credit for time previously spent in secure detention if the time was “in connection with the course of conduct for which the detention ... was imposed.” The court concluded that the five days in secure detention was connected to the original course of conduct, since that conduct provided the legal authority to detain her. “Were it not for Dionicia’s original course of conduct – the battery – she would not have been placed in shelter care, and there would have been no authority to confine her in secure detention for failing to return to shelter care” (¶ 21).

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Real Property

Klemm v. American Transmission Co., 2010 WI App 131 (filed 10 Aug. 2010) (ordered published 29 Sept. 2010)

American Transmission Co. (ATC) sought an easement from the Klemms to place high-voltage electric transmission lines across their property. The Klemms agreed to $7,750 in compensation based on ATC’s appraisal and conveyed the easement. They then exercised their right to appeal; the condemnation commission awarded them $10,000. The Klemms sought litigation expenses pursuant to Wis. Stat. section 32.28, which the circuit court granted. ATC appealed the grant of litigation expenses.

The court of appeals reversed in an opinion authored by Judge Hoover. “Because Wis. Stat. § 32.28(3)(d) applies only when there has been a jurisdictional offer, there is no need to harmonize it with the negotiation provision in Wis. Stat. § 32.06(2a). Under § 32.28(3)(d), the condemnee is entitled to litigation expenses only if the commission award ‘exceeds the jurisdictional offer or the highest written offer prior to the jurisdictional offer.’ (Emphasis added.) The use of the article ‘the’ anticipates that there is, in fact, a jurisdictional offer. For example, the statute does not say prior to ‘any jurisdictional offer’ or ‘the jurisdictional offer, if any,’ nor does it expressly reference the ‘agreed price’ under subsec. (2a)” (¶ 10).

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Taxation

Covenant Healthcare Sys. Inc. v. City of Wauwatosa, 2010 WI App 125 (filed 10 Aug. 2010) (ordered published 29 Sept. 2010)

The issue in this case was whether St. Joseph Outpatient Center (the clinic) is tax-exempt property under Wis. Stat. section 70.11(4m)(a), which provides a property tax exemption for real property owned and used exclusively for the purposes of any hospital but prohibits giving an exemption to property used as a “doctor’s office.” The circuit court concluded that the clinic was tax-exempt property. The court of appeals, in a majority decision authored by Judge Brennan, disagreed; it concluded that the clinic is a doctor’s office.

In St. Clare Hospital Inc. v. City of Monroe, 209 Wis. 2d 364, 368, 563 N.W.2d 170 (Ct. App. 1997), the court of appeals determined that “whether a building is ‘used as a doctor’s office’ depends on the nature of services provided and the manner in which these services are delivered to the patient” (¶ 11). A doctor’s office is “a place where doctors see patients, mostly by appointment, during scheduled business hours, and have their offices. A hospital, on the other hand, is a place that offers ‘inpatient, overnight care’” (¶ 17) (citing St. Clare). Determining whether a place is a doctor’s office ultimately turns on the facts of the individual case.

“[W]hen determining the status of the Clinic, by remaining focused on the nature of the services provided and the manner in which they are delivered – including the Clinic’s set hours, its exclusive focus on outpatient care, its standard operating policy to not accept ambulances transporting victims with emergency conditions, and its decision not to treat patients whose recovery time is over four hours – we are able to conclude that the Clinic is used as a doctor’s office, albeit a modern one with updated facilities and capabilities” (¶ 27).

The majority was not persuaded by the clinic’s argument that it qualifies as a hospital because it offers 24-hour urgent care. The area allocated to urgent care occupied less than 10 percent of the clinic’s space and the most common conditions treated in the urgent care area (broken bones, injuries that required sutures, sprains and strains, accidents and falls, asthma, allergy attacks, eye injuries, rashes, minor burns, colds, and flu) are conditions characterized by the appellate court as commonly treated in a doctor’s office (see ¶ 18). The court viewed the urgent care center “as permitting the Clinic to perform its services as a doctor’s office on a twenty-four-hour basis” (id.).

Judge Fine filed a dissenting opinion.

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