Vol. 73, No. 6, June 2000

Court of Appeals Digest

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

Note: Each case summarized in the Court of Appeals Digest includes its new public domain citation.

| Attorneys | Attorney Fees | Civil Procedure | Criminal Law | Employment Law | Family Law | Insurance | Medical Assistance | Prisoner Litigation | Torts |

Attorneys

Pro Hac Vice Admissions - Revocation - Mistrials - Sanctions

Filppula-McArthur v. Halloin, 2000 WI App 79 (filed 7 March 2000) (ordered published 26 April 2000)

Attorney Ball was admitted pro hac vice and represented the plaintiff in a medical malpractice case. The trial judge granted the defense motion for a mistrial based on Ball's conduct during the jury trial. The judge later revoked Ball's pro hac vice admission and assessed various sanctions against him.

The court of appeals, in an opinion written by Judge Cane, affirmed. First, the court held that both the decision to grant and the decision to revoke pro hac vice admissions are within the discretion of the trial court. Second, the record revealed that the trial judge had appropriately exercised that discretion. Ball's "unwillingness to abide by the rules" of the court and "blatant failures" to follow the court's orders more than justified the revocation. Ball's indiscretions and breaches are catalogued in the opinion. Third, Ball's conduct also justified the imposition of costs. The case law supports the trial judge's authority to impose sanctions against an attorney whose misconduct necessitates a mistrial.

Attorney Fees

Insurance - Coverage Disputes - American Rule

Riccobono v. Seven Star Inc., 2000 WI App 74 (filed 21 March 2000) (ordered published 26 April 2000)

A restaurant sued its commercial landlord for breach of the lease and assorted other claims. Capitol Indemnity Corp. (Capital) had issued a commercial general liability policy to the restaurant while Society Insurance (Society) insured the commercial landlord. As the time, costs, and counterclaims piled up, Society and Capitol disagreed over who had the primary duty to defend or indemnify the commercial landlord. The trial court ruled that both insurers covered the landlord but that Capitol provided the primary coverage and Society was the excess carrier. Later Society sought reimbursement for all of its costs and attorney fees from Capitol, but the trial judge ruled that Society was entitled to reimbursement for only those costs and fees expended after Society had tendered its defense to Capitol.

The court of appeals, in an opinion written by Judge Curley, affirmed in part and reversed in part. First, the court upheld the determination that Capitol was the primary insurer. Since this determination turned on the particular facts and the policy language, further elaboration is not necessary. As to the second issue, however, the court held that Society was not entitled to reimbursement of its costs and attorney fees. Specifically, Elliott v. Donahue, 169 Wis. 2d 310 (1992), "does not encompass the payment of attorney fees and costs from one insurer to another." The case law supported a "narrow reading" of Elliott. Moreover, disputes between insurance companies do not present the same economic imbalances that concerned the court in Elliott since both sides "can easily absorb the costs of litigation." The court of appeals also rejected Society's arguments predicated upon subrogation rights (pointing to an "other insurance" clause) and the doctrine of equitable indemnification.

Civil Procedure

Small Claims Actions - Damage Limitation - Attorney's Fees in Unfair Trade Practice Cases

Reusch v. Roob, 2000 WI App 76 (filed 14 March 2000) (ordered published 26 April 2000)

Among the issues in this small claims case was whether the circuit court properly awarded costs and attorney fees when doing so drove the total judgment to an amount in excess of the $5,000 small claims limitation. The award was made in connection with a finding that the defendant had committed an unfair trade practice contrary to Wis. Stat. section 100.20.

The circuit court awarded a money judgment of $4,910 plus costs and reasonable attorney fees of $13,474. The defendant argued that the combination of these two awards, which exceeds the $5,000 jurisdictional limit for small claims under Wis. Stat. section 799.01, rendered the trial court without competency to handle this matter.

In a decision authored by Judge Wedemeyer, the court of appeals concluded that statutorily authorized attorney fees are not to be considered part of the pecuniary loss/damage award as to which there is a $5,000 limitation in small claims actions. In small claims cases, an award of attorney fees is limited to the amount recoverable under Wis. Stat. section 814.04(1) and (6) "except if the amount of attorney fees is otherwise specified by statute." In this case the attorney fees were ordered under section 100.20(5). Because this statute authorizes an award of attorney fees and because this portion of the damage award is separate and distinct from the pecuniary loss inasmuch as its intent is to compensate the attorney rather than the plaintiffs, the award of fees did not violate the $5,000 small claims court limitation.

Criminal Law

Habitual Criminality - Computing Five-year Period for Counting Prior Convictions - Time Spent in Jail as a Condition of Probation

State v. Crider, 2000 WI App 84 (filed 1 March 2000) (ordered published 26 April 2000)

The Wisconsin habitual criminality statute permits an enhanced sentence if the defendant was convicted of a felony or three misdemeanors during the five-year period immediately preceding the commission of the crime for which he or she is presently being sentenced. See Wis. Stat. § 939.62. In computing the five-year period, time that the actor spent in "actual confinement serving a criminal sentence" is excluded.

The issue in this case was whether jail time that the defendant served as a condition of probation qualifies as "actual confinement serving a criminal sentence," thereby extending the five-year period for determining habitual criminality. In a decision authored by Judge Anderson, the court of appeals answered in the affirmative. While offenders are in jail as a condition of probation, they are confined and their ability to reform and abide by the criminal law is not being tested. Accordingly, time spent in jail as a condition of probation is excluded in the calculation of the five-year statutory time period for determining habitual criminality.

Search and Seizure - No-knock Entries - Suppression of Evidence as Remedy for Knock and Announce Violations

State v. Eason, 2000 WI App 73 (filed 23 March 2000) (ordered published 26 April 2000)

The state appealed from an order suppressing evidence seized by police while executing a no-knock search warrant at an apartment occupied by the defendant and others. The circuit court suppressed the evidence on grounds that the search warrant affidavit failed to justify a no-knock search. On appeal the state argued that the affidavit was sufficient and, even if it were not, the suppression order should be reversed because 1) there was no causal relationship between the no-knock entry and the discovery of seized evidence or, alternatively, 2) the evidence should be admissible under a "good faith" exception to the exclusionary rule.
In a decision authored by Judge Eich, the court of appeals affirmed. The court agreed that the affidavit did not assert facts giving rise to a reasonable suspicion that an announced entry into the apartment to execute the warrant would have placed the officers in danger. The court also reaffirmed the position it had taken in State v. Stevens, 213 Wis. 2d 324, 570 N.W.2d 593 (Ct. App. 1997), that suppression of evidence is the appropriate remedy for a violation of the knock and announce rule. Finally, the court declined to apply a "good faith" exception to the exclusionary rule to admit the evidence seized during execution of the warrant, concluding that if the exclusionary rule pronounced by the Wisconsin Supreme Court in Hoyer v. State, 180 Wis. 407, 193 N.W. 89 (1923), is to be overruled, that is a function for the supreme court.

Guilty Pleas - Withdrawals - Deportation Risks - Harmless Error

State v. Garcia, 2000 WI App 81 (filed 16 Feb. 2000) (ordered published 26 April 2000)

The trial court denied the defendant's motion to withdraw his guilty plea. The court of appeals, in an opinion written by Judge Nettesheim, ruled that the judge had violated the defendant's rights in taking the guilty plea but that the error was harmless, thereby affirming the trial court.
The trial court erred by failing to expressly follow section 971.08(1)(c) of the Wisconsin Statutes when advising the defendant about the risk of deportation. Despite the error, the defendant was not entitled to withdraw his plea as a matter of right because the record nevertheless established that he was, in fact, aware of the consequences for deportation. The court concluded with "dicta" intended as "important" guidance for future cases: "The statute not only commands what the court must personally say to the defendant, but the language is bracketed by quotation marks, an unusual and significant legislative signal that the statute should be followed to the letter." Harmless error is not always a guaranteed "safety net."

Employment Law

LIRC - Compensable Injuries - Rejecting Experts' Opinions

Kowalchuk v. LIRC, 2000 WI App 85 (filed 1 March 2000) (ordered published 26 April 2000)

The court of appeals, in an opinion written by Judge Snyder, affirmed a circuit court's decision that in turn upheld a Labor and Industry Review Commission (LIRC) determination that the plaintiff had not sustained a compensable injury. The plaintiff injured his back at work in 1993 and received some disability compensation. He returned to work in 1994. In July 1996 the company turned down his request to take off on a Saturday and go on vacation the following week. When the plaintiff failed to report to work that Saturday, the company terminated him that following Monday. The very next day the plaintiff visited his doctor, who determined that the plaintiff was "temporarily totally disabled." The plaintiff eventually filed for worker's compensation. After an evidentiary hearing the ALJ determined that the plaintiff had sustained no compensable injury and thus his employer was not responsible for medical expenses and temporary disability after July 1996. He was found to be 25 percent permanently partially disabled as a result of the original 1993 accident.

On appeal the crux of the plaintiff's argument was that LIRC had improperly substituted its own opinion for the "uncontested" diagnosis of his treating physicians. The case law, however, allows LIRC to "reject an employee's expert evidence where the employee has been questioned about the information he or she provided his or her doctor." Here the information the plaintiff gave to his doctor about his firing flatly conflicted with the company's version. LIRC was entitled to believe the company's witnesses and ignore the plaintiff's story as less credible.

Family Law

Children - Parental Contact - Best Interest

Wolfe v. Wolfe, 2000 WI App 93 (filed 28 March 2000) (ordered published 26 April 2000)

A child's mother appealed the circuit court's determination that her ex-husband could have contact with their son by mail. The order provided that the husband's letters should be mailed to his parents who would read them to the son. At the time of the divorce the ex-husband was serving a prison sentence for soliciting his ex-wife's murder.

The court of appeals, in an opinion written by Judge Hoover, affirmed. The mother argued that section 767.24(4) (1997-98) of the Wisconsin Statutes requires that the father prove that contact is in the child's best interest. Rejecting this construction, the court held that section 767.24(4) "requires the court to allocate periods of placement between the parents." If one parent "seeks not to allocate, but rather to deny all contact, that parent has the burden to prove the contact endangers the child's physical, mental or emotional health." In short, the mother's argument erroneously sought to reverse the burden of proof, which remained on her to establish that the ex-husband should have no contact.

Insurance

Extraterritorial Clauses - Bodily Injury Liability Coverage

West Bend Mutual Ins. Co. v. Stegner, 2000 WI App. 91 (filed 16 March 2000) (ordered published 26 April 2000)

Mary Rasmussen died of injuries incurred when her car collided with one operated by Stacy Stegner. Rasmussen's insurer, West Bend, paid benefits to her estate and sought to recover monies from Stegner and her insurer. Stegner was living in Florida when she purchased a policy from Progressive Casualty. The trial court ruled in Progressive's favor, finding it had no coverage in this case.

The court of appeals, in an opinion written by Judge Deininger, affirmed. Had the accident occurred in Florida, the policy clearly would have provided no coverage for Rasmussen. Both the policy and Florida law provide only "personal injury protection" that covers the operator, occupants, and pedestrians. West Bend argued, however, that the policy's "extraterritorial clause" triggered coverage because Wisconsin law allegedly requires at least $25,000 in coverage for bodily injury liability, a sum obviously greater than the "zero" limit on the policy's face. The court of appeals disagreed with this construction of Wisconsin law and the policy. The financial responsibility provision in the extraterritorial clause operates only where there is bodily injury liability coverage in the first place. In other words, since Stegner had no such coverage to begin with, the extraterritorial clause did not create it.

Medical Assistance

Eligibility - Divestment of Assets

Artac v. Wisconsin Department of Health and Family Services, 2000 WI App 88 (filed 30 March 2000) (ordered published 26 April 2000)

In 1992 Artac deeded her home and property to an irrevocable trust and named one Frieda Adams as trustee. Artac's daughter was the beneficiary of the trust. Among the provisions of the trust was one in which the grantor expressly reserved and retained the right to live on and use the real property during the grantor's lifetime. It also had a provision that if two physicians submitted a written statement that the grantor was permanently incompetent, the trustee may in her discretion terminate the trust and distribute its assets pursuant to the terms of the trust.
In 1997 two doctors found Artac to be incompetent and the next month the trustee deeded the property to the beneficiary. Four days later the beneficiary (the grantor's daughter) applied to the Clark County Department of Social Services for medical assistance (MA) benefits for her mother. The county denied the application because it concluded that the mother had divested assets when the trustee transferred the trust property to the beneficiary daughter.

The mother requested a fair hearing before the Division of Hearings and Appeals regarding the denial of her application. The hearing examiner concluded that the mother was ineligible for medical assistance, explaining that an applicant cannot divest assets in order to become eligible for MA benefits. The examiner acknowledged that the trust itself was not subject to the divestment rules because it was created before the "look-back period." The circuit court affirmed the hearing examiner's decision but the court of appeals, in a decision authored by Judge Dykman, reversed.

Wis. Stat. section 49.453 prohibits a person from divesting assets so as to become eligible for medical assistance benefits. The court of appeals concluded that the hearing examiner erred in determining that the mother had divested an asset within the applicable look-back period. The mother's placement of her home and property in the trust was not a divestment prohibited by the statute, because it occurred more than 52 months before she applied for MA benefits. The only question remaining was whether the mother divested an asset by losing her reserved right to live on the property when the trustee transferred the trust property to her daughter in 1998. The court concluded that she did not. A trustee acts on behalf of the beneficiary - not the grantor. Therefore, in this case, the trustee acted on the daughter's behalf when she distributed the trust property; that action was not a divestment of an asset by the grantor as defined in the medical assistance statutes.

Prisoner Litigation

Prisoner Litigation Reform Act - Inmates Confined in Out-of-state Facilities - Filing Fees

State ex rel. Speener v. Gudmanson, 2000 WI App 78 (filed 30 March 2000) (ordered published 26 April 2000)

This case concerns the issue of whether a Wisconsin prisoner who is serving a prison sentence in an out-of-state facility rented by Wisconsin is subject to the filing fees established in the Prisoner Litigation Reform Act.

Wis. Stat. section 814.29(1m), which was created by the Prisoner Litigation Reform Act (1997 Wis. Act 133), requires a "prisoner" to pay a filing fee from his or her trust fund account before initiating certain kinds of appeals. For this purpose the statutes define a "prisoner" as one who is "incarcerated, imprisoned or otherwise detained in a correctional institution."

In a decision authored by Judge Dykman, the court of appeals concluded that the petitioner, who is a Wisconsin inmate confined at a county jail in Texas, is not incarcerated in a "correctional institution" as that term is used in the Prisoner Litigation Reform Act. Accordingly, he is not subject to the filing fee requirement of that act. Instead, he is subject to Wis. Stat. section 814.29(1) under which the court of appeals may order that he be allowed to commence an appeal without paying the filing fee if the appellate court finds that he is unable to pay the fee because of poverty.

Torts

Sleeping Dogs - Liability Insurance - "Dog Owner" Statute

Alwin v. State Farm Fire and Casualty Co., 2000 WI App 92 (filed 28 March 2000) (ordered published 26 April 2000)

The Alwins attended a dinner party at their daughter's home. JoAnn Alwin was injured when she tripped over the daughter's sleeping dog. The Alwins claimed against their daughter's homeowner's insurer, State Farm, which denied the claim. The circuit court granted State Farm's motion to dismiss a complaint brought against it. It ruled that "the dog bite statute," section 174.02(1)(a), is inapplicable "where the dog did not actively engage in any conduct but, rather, lay sleeping."

The court of appeals, in an opinion written by Judge Cane, affirmed. First, the court observed that the statute is more aptly named the "dog owner" rather than the "dog bite" statute. It imposes strict liability on dog owners for even "innocent behavior" by the dog that causes injury. Case law firmly establishes, however, that three considerations might blunt strict liability: public policy, comparative negligence, and the rules of causation. On the record in this case the court held that public policy precluded liability. Here the dog was a "passive instrumentality." Imposing liability in such a case would enter a field without a sensible or just stopping point. Moreover, "to impose liability under the dog owner statute for injuries arising solely from a sleeping dog would effectively result in a pure penalty for dog ownership."

Dog Bites - Children - Contribution - Dog Owner Statute - Child Labor Laws

Fire Ins. Exchange v. Cincinnati Ins. Co., 2000 WI App 82 (filed 16 March 2000) (ordered published 26 April 2000)

A 12-year-old boy was injured by a dog while working as a volunteer at a county humane society. The dog's owner's insurer, Fire Insurance Exchange, paid the boy's family about $40,000 in exchange for a release and an assignment of the boy's claims. Fire Insurance brought this action against the county humane society and its insurer seeking contribution on three theories: 1) negligence; 2) strict liability under the dog owner's statute, section 174.02; and 3), the humane society's liability under the child labor laws, section 103.65 of the Wisconsin Statutes. The defendants denied the claims and raised a release signed by the boy's mother as an affirmative defense. The circuit court granted summary judgment to the defendants and dismissed the complaint.

The court of appeals, in an opinion written by Judge Roggensack, reversed. Initially, the court addressed the basics of contribution, which requires that 1) both parties must be tortfeasors, 2) both parties must have common liability to the same person, and 3) one party must have born an unequal portion of the common burden. Although contribution normally arises in negligence cases, it also applies in claims of strict liability. Finally, a settling party is entitled to bring a contribution claim provided it can show: 1) both parties were obligated to the payee; 2) the amount paid was reasonable; and 3) the proportionate fault with negligent tortfeasors or other apportionment method when negligence is not the basis for mutual liability.

On this record the defendants completely failed to demonstrate that they were entitled to summary judgment on the negligence claim. The claim was therefore reinstated for trial on remand. The court also reversed on the liability claim arising under the dog owner statute. The humane society argued that under recent case law the boy himself was a "statutory keeper" who could not sue other statutory owners, including the dog's "legal" owner. On this record the court could not, however, determine whether the boy was a statutory keeper for two reasons. First, there was simply insufficient evidence in the record on this point. Second, it was alleged that the humane society had violated child labor laws that might preclude such a finding in any event, but the evidence on this point was equally meager.

Lastly as to the dog owner statue, the court also concluded that under prevailing case law "an owner may sue a keeper for contribution when an innocent third party has been injured." As to the claim under the child labor laws, the record also precluded any dispositive ruling. In particular, it must be shown that the boy's work was "dangerous or prejudicial" within the meaning of section 103.65(1).

The final issue addressed by the court concerned the mother's exculpatory release on her son's behalf. Again the court reviewed the case law but could not resolve the issue because of the record's inadequacy regarding the circumstances under which she signed it.

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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