Supreme Court Digest

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

| Criminal Procedure | Employment Law | Motor Vehicle Law | Municipal Law | Torts |

Criminal Procedure

Sex Predator Placement Pursuant to Negotiated Settlement - Remedy When Placement Unavailable

State v. Castillo, No. 95-1628 (filed 7 Nov. 1997)

The defendant was adjudicated delinquent based upon two counts of sexual assault. Prior to his release from the juvenile correction facility, the state filed a petition requesting an order detaining him as sexually violent. Pursuant to a negotiated settlement, the state agreed to recommend supervised community placement in exchange for the defendant's admission that he was a sexually violent person. However, the placement could not be accomplished due to community opposition and the unavailability of a facility.

The state subsequently moved to reopen the matter and recommended institutional placement. The circuit revised its original order and committed the defendant to the Wisconsin Resource Center. The court of appeals reversed, concluding that the state violated the defendant's due process rights when it breached the agreement described above. The appellate court remanded the case to allow the defendant to withdraw his admission that he was sexually violent.

The Wisconsin Supreme Court granted the defendant's petition to review in this case. However, after briefing and oral argument, the court dismissed the petition for review concluding that it had been improvidently granted, because the court of appeals decision was not "adverse" to the defendant.

John Doe Investigations - Requirements of Petition for a John Doe

State ex rel. Reimann v. Circuit Court for Dane County, No. 96-2361-W (filed 16 Dec. 1997)

One issue was presented for review in this case: When a person complains to a circuit judge that such person believes a crime has been committed within the judge's jurisdiction, does the John Doe statute (Wis. Stat. section 968.26) require the judge to examine under oath the complainant and any witnesses produced by him or her? In a unanimous decision authored by Justice Steinmetz, the supreme court concluded that the statute requires a circuit judge to conduct such an examination only when the complainant has sufficiently established that he or she has "reason to believe" that a crime has been committed within the judge's jurisdiction.

To trigger the judge's duty to examine the complainant and any witnesses produced by him or her, the complainant must first establish that he or she has "reason to believe" that a crime has been committed. The statute requires a John Doe complainant to do more than merely allege in conclusory terms that a crime has been committed. The allegation must be supported by objective, factual assertions before a circuit judge is required to conduct an examination. Accordingly, if a John Doe complainant, in his or her petition, presents only conclusory allegations, or fails to allege facts sufficient to raise a reasonable belief that a punishable crime has been committed, the circuit court judge may, in the exercise of discretion, deny the petition without an examination. This approach, said the court, permits complainants to initiate reasonable, fact-based John Doe proceedings to determine whether a crime has been committed and if so, by whom. At the same time it also allows the judge to screen for and weed out groundless and frivolous petitions without requiring further proceedings that may be injurious to the accused.

The court did not equate the "reason to believe" standard described above with the probable cause required to support a criminal complaint. "There is no requirement that a finding of probable cause be made before a John Doe proceeding is commenced. To the contrary, the statute prescribes that a determination of probable cause is to be made after subpoena and examination of witnesses."

In determining whether a complainant's petition is worthy of further treatment, a circuit court judge must act as a neutral and detached magistrate. In making this decision, the judge should not weigh the credibility of the complainant or choose between conflicting facts and inferences. Though circuit court judges must perform some gatekeeping functions under the John Doe statute before an examination may be held, the court indicated that it did not intend to close the doors of the courtroom to those persons who may have reason to believe a crime has been committed. In addition, the judge must recognize that many John Doe petitions are filed pro se by complainants not trained in the complexities of criminal law and procedure. Where a mere technical error on the face of the petition, or an inadequacy in the facts alleged therein, can be cured by a simple request for additional information, justice may be best served under the John Doe statute by the judge simply making such a request or examining the complainant.

If a circuit judge denies a petition for further proceedings without examining the complainant, that decision is subject to review under the provisions of Wis. Stat. section 809.51, by which a writ of mandamus may be sought to compel the judge to conduct under oath an examination of the complainant and any witnesses he or she might produce.

Employment Law

Employment-at-will - Public Policy Exception - "Whistle-blowers"

Hausman v. St. Croix Care Center, No. 96-0866 (filed 19 Dec. 1997)

The plaintiffs were formerly employed at a nursing home. Concerned about the quality of care received by residents, they took a series of actions culminating in a complaint to state authorities. The nursing home eventually terminated both employees, citing budgetary concerns as to one and ascribing misconduct to the other. Both were employees-at-will. The plaintiffs filed this action alleging a private right of action under section 50.07 of the Wisconsin Statutes, wrongful termination through breach of public policy, and other claims. The circuit court dismissed the complaint for failure to state a claim for which relief could be granted. The court of appeals affirmed.

The supreme court reversed in an opinion written by Justice Bradley. The court reviewed the case law construing the public policy exception to the employee-at-will doctrine. Various statutes clearly established "a fundamental and well-defined public policy of protecting nursing home residents from abuse and neglect." The complaint did not, however, support the claim that the employer had "implicitly commanded" the plaintiffs not to report the suspected abuse. Rather, the court addressed whether Wisconsin should embrace a "whistle-blower exception." As a matter of policy, the supreme court refused to recognize a "broad whistle-blower exception" protecting employees who report threats to the public's health, safety, and welfare." But the court did fashion a narrower whistle-blower exception shielding employees who report abuse or neglect of nursing home residents. Nor was a civil damages action precluded because the Legislature also has provided criminal penalties for the same conduct (retaliatory firing for reporting abuse).

Motor Vehicle Law

OWI - 0.08 Prosecutions - Proof of Prior Convictions Before the Jury When Defendant Offers to Stipulate to His or Her Status as a Repeat Offender

State v. Alexander, No. 96-1973-CR (filed 18 Dec. 1997)

The defendant was charged with operating a motor vehicle while having a prohibited alcohol concentration of 0.08 percent or more. His prohibited alcohol concentration was 0.08 percent, rather than 0.10 percent, because he had two or more prior convictions, suspensions or revocations for alcohol-related driving offenses. Accordingly, one of the elements of the state's case against him was his status of having been previously convicted of two or more such offenses.

Before the final pre-trial conference in the case, the defendant's attorney filed a motion in which the defendant offered to stipulate that his driving record correctly set forth that he had two prior OWI convictions. With this offer to stipulate the defendant also filed a motion in limine requesting that the court order the state to refrain from introducing any evidence regarding the defendant's prior OWI convictions. The defendant also moved to modify the substantive jury instructions, the impact of which would have been to eliminate the element regarding his prior convictions as a matter for the jury to determine at trial. The state agreed to stipulate to the existence of the prior OWI convictions, but it refused to waive that portion of the jury trial that would be relevant to making a finding on that element.

The circuit court denied the defendant's motion and concluded that the state can be required to stipulate to the fact that the defendant had two prior relevant convictions but that the state could not be forced to waive any portion of the jury trial. Therefore, the circuit court concluded that evidence regarding the element of the defendant's prior convictions could be presented to the jury, although the extent of information would be limited.

Consistent with this ruling, the circuit court informed the jury of the party's stipulation that the defendant had two or more convictions, suspensions or revocations as counted under Wis. Stat. section 343.307(1) (the counting statute); the specifics of the defendant's driving record apparently were not disclosed to the jury. The court also gave a cautionary instruction to the jury about the limited purpose for which this evidence was received and that it was not proof of guilt of the present offense.

The issue before the supreme court was whether the circuit court erroneously exercised its discretion when it allowed the introduction of evidence of two or more prior convictions, suspensions or revocations as counted under section 343.307(1), and further submitted that element to the jury when the defendant fully admitted to the element, and the purpose of the evidence was solely to prove that element. Because the court concluded that the purpose of the evidence was solely to prove the defendant's status as a person having two or more prior convictions, suspensions or revocations, it held that the probative value of the evidence was far outweighed by the danger of unfair prejudice to the defendant. In a unanimous decision authored by Justice Bablitch, it concluded that admitting this evidence and submitting the status element to the jury was an erroneous exercise of discretion.

When a circuit court is faced with circumstances like those presented in this case, the supreme court held that it should simply instruct the jury that, in order to convict the accused, they must find beyond a reasonable doubt that: 1) the defendant was driving or operating a motor vehicle on a highway; and 2) the defendant had a prohibited alcohol concentration when he or she drove or operated the vehicle. The "prohibited alcohol concentration" means 0.08 grams or more of alcohol in 210 liters of the person's breath or 0.08 percent or more by weight of alcohol in the person's blood.

Finally, the court concluded that because the evidence of the defendant's guilt in this case was overwhelming, admitting the evidence described above regarding the defendant's repeat offender status and submitting the status element to the jury was harmless error.

Municipal Law

Dispute Resolution - Disciplinary Proceedings Against Deputy Sheriffs - Arbitration

Milas v. Ciszewski, No. 96-1197 (filed 2 Dec. 1997)

The Ozaukee County sheriff suspended a deputy for misconduct and recommended to the Law Enforcement Committee that the deputy be dismissed. The committee reviewed the charges and determined that dismissal was appropriate.The deputy objected to the decision and requested arbitration pursuant to a provision of the collective bargaining agreement. The county and the deputy participated in the arbitration proceedings. The arbitrator concluded that dismissal was not an appropriate sanction and that the deputy should be returned to duty.The county subsequently moved to vacate the arbitration award, claiming that under Wis. Stat. section 59.21(8)(b)6 (1991-1992) judicial review by the circuit court was the exclusive means to challenge the Law Enforcement Committee's decision. The deputy moved to confirm the arbitration award. The circuit court granted the county's motion for summary judgment and vacated the award. The deputy appealed to the court of appeals, which certified the case to the Wisconsin Supreme Court.

The court of appeals certified two issues. The first was whether the deputy's sole and exclusive remedy following an adverse decision of the Law Enforcement Committee was review by the circuit court pursuant to the statute cited above. The second issue was whether the county was estopped from challenging the validity of the arbitration award. In a decision authored by Chief Justice Abrahamson, the supreme court held that the county was estopped from challenging the validity of the arbitration award. Accordingly, it did not reach the first issue certified by the court of appeals.

The estoppel doctrine, also called equitable estoppel, focuses on the parties' conduct. The elements of equitable estoppel are: 1) action or nonaction, 2) on the part of one against whom estoppel is asserted, 3) which induces reasonable reliance thereon by the other, either in action or nonaction, and 4) which is to his or her detriment.

The supreme court concluded that all elements of equitable estoppel were present in this case. Prior to the deputy's discharge, the county had entered into a collective bargaining agreement that provided arbitration for disciplinary disputes. The county's full participation in the arbitration process in this case implied a good faith effort to resolve the dispute through arbitration. At no time did the county object to the arbitrator's jurisdiction. Relying upon the county's failure to object to arbitration and upon the county's full participation in arbitration proceedings, the deputy pursued his grievance through arbitration. The county's actions caused the deputy to invest time and resources in the arbitration proceeding. Had the deputy known that the county would object to the arbitrator's jurisdiction, the deputy might have sought review of the Law Enforcement Committee's decision in circuit court.

Because the elements of the equitable estoppel defense were met in this case, the court needed to consider whether the defense should be applied against the county. It recognized that the doctrine is not applied as freely against governmental agencies as it is against private persons. Nevertheless, the court has recognized that estoppel may be available as a defense against the government if the latter's conduct would work a serious injustice and if the public interest would not be unduly harmed by applying estoppel. The court concluded that principles of justice demand in this case that the county be prevented from forcing the deputy to begin the grievance proceeding again. It would be unjust, said the court, to allow the county to agree to arbitrate a disciplinary dispute and then, when the decision is adverse, to allow the county to question the arbitrator's jurisdiction over the dispute. Applying the estoppel doctrine would prevent a serious injustice to the deputy and produce no undue harm to the public interest.

Torts

Bad Faith - HMOs

McEvoy v. GHC, No. 96-0908 (filed 12 Nov. 1997)

In this case the supreme court held that the common law tort of bad faith applies to "out-of-network benefit decisions" made by all health maintenance organizations (HMOs). Nor are such claims precluded by chapter 655 of the Wisconsin Statutes concerning medical malpractice actions.

The plaintiff, 13-year-old Angela, was diagnosed with anorexia nervosa. Her HMO initially referred her for treatment to an out-of-network provider but after six weeks the HMO decided to discontinue coverage for that provider's services. Angela's treating physician and a psychologist employed by the out-of-network provider opposed the decision. At the time of termination, about four weeks of inpatient psychological care benefits remained under Angela's contract with the HMO. Despite treatment by a network provider, Angela suffered a relapse and later sued the HMO for bad faith denial of coverage.

The supreme court, in an opinion authored by Justice Bradley, characterized the issue as one of first impression. The contractual relationship between the HMO and subscriber presented a "power imbalance similar to that between a classical insurer and policyholder." Even a "staff model HMO," such as the one in this case, although not organized for the "sole purpose of providing insurance," engaged in some aspects of the insurance business. Based upon the "practical and legal similarities of HMOs and traditional insurance companies, ... the common law tort of bad faith applies to HMOs making out-of-network decisions."

The court then discussed the factors that distinguish bad faith and medical malpractice claims against HMOs. For example, mistakes in diagnosis or treatment by a health-care provider involve malpractice, not bad faith. Conversely, where an HMO staff member reviews a coverage request but does not participate in treatment, the bad faith analysis applies because denial is a "nonmedical, coverage-related decision." The court cautioned, however, that "an HMO insurer that denies payment for care because contractual coverage of such care is reasonably debatable cannot be held liable for bad faith tort."

The key is the reasonableness of the decision denying coverage. "[A] bad faith cause of action may arise when an HMO refuses to consider a patient or physician request for care or coverage, if the HMO makes no reasonable investigation of a request for care or referral put to it, if the HMO conducts its evaluation of a care or coverage request in such a way as to prevent it from learning the true facts upon which the plaintiff's claims are based, or if, as the plaintiffs allege in this case, the HMO conducts its evaluation of a request and bases its decision primarily on internal cost-containment mechanisms, despite a demonstrated medical need and a contractual obligation."

This column summarizes all decisions of the Wisconsin Supreme Court. 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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