Court of Appeals Digest

This column summarizes selected published opinions of the Wisconsin Court of Appeals. 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.

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

Civil Procedure

Class Actions - Certification - "True Parties" - Representatives - Manageable Class

Cruz v. All Saints Healthcare System Inc., 2001 WI App 67 (filed 28 Feb. 2001) (ordered published 28 March 2001)

The court of appeals, in a decision written by Judge Brown, affirmed the circuit court's decision that certified "a class in a suit to recover unreasonable fees charged for copies of healthcare records." The four class representatives alleged that defendants' uniform fee for copying medical records was unreasonable and exceeded statutory rates.

First, the court addressed the threshold issue of whether a class action was statutorily barred in this case. Although Wis. Stat. section 146.83(1)(b) limits recovery to the "actual damages" that result from an excessive copying fee, the legislature's intent is by no means "contravened by class action." The court also opined that "given the economic realities of this case, class action may be the only effective means to implement the legislature's intent to provide redress from unreasonable charges" (¶9). The "aggregation of small claims, when joined as a class, becomes worthwhile to litigate."

Second, the trial court properly exercised its discretion in certifying the class. The court of appeals rejected defendants' "illogical" contention that the "real parties" were Wisconsin trial lawyers, not the aggrieved plaintiffs, because lawyers typically advance the expense of copying records. "It would be illogical indeed to argue that when attorneys follow a legally and ethically proper procedure for advancing costs in litigation, they somehow acquire an impermissible proprietary interest in the litigation" (¶14).

Next, the court also found no abuse of discretion in the determination that the four plaintiffs adequately represented the class. They understood the claims' basic elements and that they "speak for others whose complaints are similar to their own" (¶19). Finally, the class was "manageable" because the case presented "no issues of subclasses, multiple and complicated defenses, or the application of different state laws" (¶23).

Commercial Law

Multiple Mortgages - Foreclosure - Merger - Issue Preclusion

Bank of Sun Prairie v. Marshall Development Co., 2001 WI App 64 (filed 22 Feb. 2001) (ordered published 28 March 2001)

A development company borrowed about $200,000 from a bank. The loan was secured by a personal guarantee and two mortgages on different properties. When the borrower defaulted, the bank obtained a foreclosure judgment on mortgage #1 and a deficiency judgment. Later the bank brought this action requesting foreclosure on mortgage #2 and named all interested parties as defendants. One defendant moved for summary judgment on the ground that the note and all mortgages had merged into the deficiency judgment and thus precluded the bank from foreclosing on mortgage #2. The circuit court agreed and dismissed the complaint.

The court of appeals reversed in a decision by Judge Vergeront. First, the court extensively addressed the law governing merger. Case law firmly established that "with the entry of the deficiency judgment in the bank's first action, the bank's claim on the note merged with that judgment, thereby precluding the bank from bringing another action to recover on the note" (¶8). However, these same cases provided no "basis for concluding the deficiency judgment in the bank's first action precludes a later lawsuit to foreclose on a mortgage securing the same debt, when that mortgage was not the subject of foreclosure in the first action." Wisconsin case law also was consistent with the Restatement (Second) of Judgments.

Second, the court also held that nothing in Wis. Stat. sections 846.10 and 846.101, or the case law construing those statutes, barred creditors' reliance upon remaining mortgages once a deficiency judgment is obtained in an action to foreclose on another mortgage securing the same debt. Finally, the doctrine of claim preclusion did not bar the second foreclosure action. Since the parties in this second foreclosure were not parties to the first action, claim preclusion could not be properly considered. Moreover, each mortgage represented a distinct cause of action: "the fact that they secure the same debt does not create an identity of the cause of action" (¶33).

Consumer Law

"Lemon Law" - Conditional Refunds

Herzberg v. Ford Motor Co., 2000 WI App 65 (filed 14 Feb. 2001) (ordered published 28 March 2001)

In this "Lemon Law" case, the parties agreed that the vehicle was a "lemon." The manufacturer (Ford) demanded that the buyers provide information about the vehicle's condition before refunding the purchase price. The trial judge ruled that the Lemon Law did not permit such a conditional refund.

The court of appeals, in an opinion written by Judge Nettesheim, affirmed. Ford's primary argument was that the Lemon Law had to be "harmonized" with the UCC and the common law of contracts. Caselaw, however, "signals that the Lemon Law is a 'stand alone' statute which is not dependent upon, or qualified by, the UCC." In particular, the court refused to "build back into the Lemon Law the shortcomings and roadblocks of the UCC" (¶15). Nor was it necessary to invoke the common law of contracts in order to recognize a requirement of "good faith," because the Lemon Law itself contemplates that all parties "should act in good faith" (¶18). The undisputed facts of record demonstrated that the buyers complied with this obligation.

Criminal Procedure

Prompt Disposition of Intrastate Detainers - Dismissal With or Without Prejudice

State v. Davis, 2000 WI App 63 (filed 22 Feb. 2001) (ordered published 28 March 2001)

Wisconsin's Intrastate Detainers Act (Wis. Stat. section 971.11) permits an inmate of a state prison to request that a pending felony case against the inmate be brought to trial within 120 days after the district attorney receives the inmate's request for prompt disposition of the case. The Act mandates dismissal if the case is not brought on for trial within that time period.

The issue before the court of appeals was whether such dismissal is with or without prejudice. In a decision authored by Judge Zappen (sitting by special assignment pursuant to the Judicial Exchange Program), the court concluded that, when faced with a motion to dismiss for failure to comply with the time requirements of the statute, the judge has the discretion to direct that the dismissal be with or without prejudice as the court deems proper under the circumstances.

In this case the circuit court concluded that an inmate has a special interest in the speedy disposition of pending criminal charges and that, if a dismissal for failing to comply with the statutory time requirements were without prejudice, the state could simply refile the charges. The judge concluded that a dismissal without prejudice under these circumstances left the inmate without a remedy under the Intrastate Detainers Act. The court of appeals concluded that the circuit court's order dismissing the case against the defendant with prejudice reflected a proper application of the law and a proper exercise of discretion.

Consecutive Sentences - Sentence Credit

State v. Wolfe, 2001 WI App 66 (filed 28 Feb. 2001) (ordered published 28 March 2001)

The defendant was found guilty of burglary and possession of burglarious tools. Because he was unable to make bail, he was in custody until sentencing for a total of 331 days. The trial court sentenced the defendant to 10 years on the first count and to a consecutive term on the second count. The court then stayed the second sentence and placed the defendant on probation for four years on that second charge. Instead of applying the 331 days of credit to the 10-year sentence of imprisonment, the court applied it to the offense for which the execution of the sentence was stayed and the defendant placed on probation.

The defendant filed a motion to modify his sentence, arguing that the trial court should have applied the sentence credit against the 10-year sentence for burglary. The trial court denied the motion.

In a decision authored by Judge Brown, the court of appeals reversed. A series of cases applying the sentence credit statute (Wis. Stat. section 973.155) has clearly established that in awarding dual credit for consecutive sentences based on the same course of conduct, credit should be allocated to the sentence first imposed. The court noted that if the defendant successfully completes his probation on the second count after serving his term of imprisonment on the first, the benefit of the sentence credit will never be enjoyed.

Accordingly, the court of appeals reversed the lower court's order denying the motion for sentence modification and directed the trial court to amend the judgment to provide for 331 days of sentence credit against the burglary conviction.

Parole Revocation - Period of Reincarceration - Administrative Law Judge Not Bound by Department of Corrections' Probation and Parole Operations Manual

George v. Schwarz, 2001 WI App 72 (filed 28 Feb. 2001) (ordered published 28 March 2001)

The defendant's parole was revoked following a parole revocation hearing before an administrative law judge (ALJ) from the Division of Hearings and Appeals (DHA). One of the issues on appeal was whether the ALJ was required to follow guidelines developed by the Department of Corrections (DOC) in its Probation and Parole Operations Manual for establishing the period of reincarceration after parole revocation.

In a decision authored by Judge Anderson, the court of appeals concluded that the ALJ was not bound to follow DOC's operations manual. The manual is an internal working document for employees of the DOC. Assuming for the sake of argument that the manual is an administrative rule, the appellate court identified multiple reasons why it is not binding upon ALJs from the Division of Hearings and Appeals.

First, one administrative agency cannot regulate the activities of another agency or promulgate administrative rules to bind another agency unless it has express statutory authority to make and enforce such a rule. DHA is not a part of the DOC; it is part of the Department of Administration. DHA has sole responsibility for the decision to revoke parole in all contested revocation cases and in the determination of the period of reincarceration. Further, to bind ALJs from the DHA to rules in DOC's operations manual would seriously undermine the discretion accorded the DHA in contested parole revocation matters. Finally, due process requires that a person subject to parole revocation appear before a neutral and detached hearing officer. Judges from DHA would be neither neutral nor detached if they were required to accept reincarceration recommendations of DOC.

Judicial Notice - Adjudicative Facts - Penalty Enhancer

State v. Harvey, 2001 WI App 59 (filed 1 Feb. 2001) (ordered published 28 March 2001)

The defendant was convicted for possession of cocaine with intent to deliver within 1,000 feet of a city park. He appealed only the validity of the penalty enhancer based on the trial judge's decision to reopen evidence and take judicial notice of the fact that "Penn Park" is a "city park."

The court of appeals, in an opinion written by Judge Deininger, affirmed. First, the court was satisfied that the "fact" that Penn Park is a city park constituted an adjudicative fact within the meaning of Wis. Stat. section 902.01(2). (The fact could be substantiated by examining the city's own Web site.) Second, the defendant also contended that the trial court violated his right to due process by requiring the jury to find the fact. Although the corresponding federal rule, unlike the Wisconsin rule, provides that the jury may, but is not required to, accept as established the judicially noticed fact, the variance reflects only a policy "choice." The federal approach is not constitutionally mandated.

Guilty Pleas - Plea Bargains - Court's Acceptance - Breach

State v. Terrill, 2001 WI App 70 (filed 27 Feb. 2001) (ordered published 28 March 2001)

As a result of a beer party run-amuck, the state charged the defendant with felony criminal damage to property for breaking into a cabin and vandalizing property. The defendant entered into a convoluted plea bargain in which he agreed to plead guilty to three misdemeanors for which the state would recommend 36 months of informal supervision. He also would plead guilty to the felony charge; however, the state would ask the court to defer acceptance of the felony plea. Assuming the defendant successfully completed the informal supervision, the state would move to dismiss the felony count.

At the plea hearing, the judge accepted the misdemeanor pleas and found him guilty. The judge also formally deferred acceptance of the defendant's guilty plea to the felony. In short, the judge "accepted" the parties' agreed-upon disposition. The "deal" unraveled, however, after the judge watched a videotape of the damage. On its own motion, the court "accepted" the defendant's felony plea and found him guilty. The court also denied the state's motion to reopen and dismiss the misdemeanors.

The court of appeals, in a decision written by Judge Peterson, reversed. Although the trial court is obligated to consider the public's interest in assessing a negotiated plea, once the guilty plea is accepted, the court is bound by it. Nor was case law distinguishable on the ground that the circuit court acted before the judgment had been entered. The "timing" of the action was irrelevant because the court had accepted the plea arrangement before viewing the videotape.

Evidence

Civil Trials - Experts - Polygraph Tests - Falsus in Uno - Spoliation - Emotional Distress

Neumann v. Neumann, 2001 WI 61 (filed 6 Feb. 2001) (ordered published 28 March 2001)

Jane Neumann died as a result of a gunshot wound to the mouth. Authorities originally ruled her death as suicide, but Jane's estate and her son's guardian ad litem brought a wrongful death action against her husband that alleged homicide. The defendant insisted Jane's death was a suicide. A jury found him liable for wrongful death (homicide) and set damages at about $500,000. The court later entered a judgment for intentional infliction of emotional distress and awarded additional compensatory as well as punitive damages.

The court of appeals, in a decision written by Judge Cane, affirmed in part and reversed in part. The first part of the opinion catalogues a variety of evidence issues. First, a medical expert properly opined that Jane's death was a homicide. The defendant failed to object in a timely manner to the expert's qualifications or the proffered opinions themselves. Nor was the expert's opinion "incredible as a matter of law": in no way did it "conflict with the uniform course of nature or with fully established or conceded facts" (¶27). A second issue involved the trial judge's decision to exclude evidence that the defendant had "successfully" answered a number of questions during a polygraph examination. The court of appeals squarely held that "the results of polygraph examinations are inadmissible in civil cases in Wisconsin" (¶62), just as they are in criminal cases. Thus, the court rejected defendant's contention that the supreme court had "not closed the door" to polygraph evidence in civil litigation.

The court next addressed alleged errors regarding jury instructions. First, the trial court acted within its discretion in giving the falsus in uno instruction. The judge observed that he rarely gave the instruction but pointed to numerous "inconsistencies" in the defendant's statements and a general pattern of deceit. Second, the judge properly read a spoliation instruction that addressed the defendant's willful destruction of physical evidence (for example, he admitted throwing the gun into a river, burning a "suicide note"). The court held that spoliation is not restricted to pending litigation; rather, it also extends to the intentional destruction of evidence where litigation is reasonably foreseeable. Finally, no error occurred when the jury was instructed to the effect that it could disregard the defendant's testimony about an alleged suicide note, since he also admitted having destroyed the alleged note.

In the final part of the opinion, the court found that the evidence was sufficient to justify the jury's finding that the defendant murdered Jane. (Since this analysis is record-intensive, it will not be addressed further.) The court of appeals did, however, reverse the judgments for intentional infliction of emotional distress and punitive damages. Jane's estate raised these claims two years after the liability trial in a motion to amend the pleadings. The court of appeals agreed that the record did not demonstrate that the emotional distress claim had been litigated by the parties (expressly or implicitly) at the first trial. Moreover, the only evidence of record pointed to Jane's instantaneous death; put differently, there was no evidence that she suffered or knew death was imminent.

Motor Vehicle Law

OWI - Implied Consent - Blood Sample Obtained Outside Implied Consent Law

State v. Gibson, 2001 WI App 71 (filed 6 Feb. 2001) (ordered published 28 March 2001)

After the defendant was arrested for OWI, he was taken to a hospital for a blood sample. There, the officer read the "Informing the Accused" form to him. The defendant initially refused to take the requested blood test and asked whether he could instead take a different test. The officer told him "no" and that the penalties would be increased if he refused the test. The officer also indicated that there was no way the defendant was going to be able to get out of the situation other than by taking the blood test. Thereafter, the defendant submitted to the test, which indicated an alcohol concentration of .248. The defendant subsequently was convicted of his eighth OWI conviction.

One of the arguments the defendant advanced on appeal was that the trial court erred by denying his motion to suppress the blood test results because the blood was taken after he had initially refused the test. He contended that the implied consent statute provides the exclusive remedy for an OWI suspect's refusal to submit to a chemical test.

In a decision authored by Chief Judge Cane, the court of appeals disagreed. Applying a long line of cases, the court was satisfied that the implied consent statute does not restrict the police from using other constitutional means to collect evidence of the driver's intoxication. In this case the defendant did not challenge the blood test as an unreasonable search and the trial court properly denied the motion to suppress.

Medical Assistance

Nursing Home Residents - Powered Wheelchairs

Trott v. Wisconsin Department of Health and Family Services, 2001 WI App 68 (filed 27 Feb. 2001) (ordered published 28 March 2001)

The petitioner is a 58-year-old man who lives in a nursing home and suffers from multiple sclerosis. Due to his disease, he is "nonambulatory" and "unable to mobilize any kind of manual wheelchair." Although using an old powered wheelchair that was still functional, he requested authorization for a new chair. Among his reasons for the request was that the old chair does not fit him due to weight gain and spinal deformity and that it cannot be adapted with devices for arm function and repositioning himself.

The Department of Health and Family Services denied the request for a new powered wheelchair, determining that the petitioner failed to demonstrate that the new wheelchair was required for "occupational or vocational" activities under the department's interpretation of Wis. Admin. Code § HFS 107.24(4)(c)2 and 3. The Division of Hearings and Appeals affirmed, as did the circuit court. In a decision authored by Judge Hoover, the court of appeals reversed.

The medical assistance program (MA) finances necessary health care services for qualified persons whose financial resources are inadequate. MA provisions within the Wisconsin Administrative Code provide for covered nursing home services. These services are defined as "medically necessary services provided by a certified nursing home to an inpatient and prescribed by a physician in a written plan of care." The costs of all routine day-to-day health care services and materials provided to recipients by a nursing home are reimbursed within the daily rate determined for MA in accordance with Wisconsin Statutes. Generally, all standard wheelchairs are reimbursed through the nursing home daily rate.

Department regulations provide, however, for medical assistance to purchase an electric wheelchair for an individual nursing home medical assistance recipient if a request for prior authorization is made and certain requirements are met. The department was of the view that one of the requisites for a powered wheelchair is that this kind of chair is required for "occupational or vocational activities" and that the petitioner failed to demonstrate that necessity. While it is true that the administrative code authorizes powered wheelchairs in the "occupational or vocational" context, another provision provides for reimbursement for a physician-prescribed wheelchair that contributes to a long-term or permanently disabled recipient, if it would contribute to rehabilitation through maximizing his or her potential for independence, and constitutes necessary health care consistent with a health care plan, or if the resident is about to transfer to a more independent setting. The appellate court concluded that there was no contention that the petitioner failed to meet the latter qualifications for a powered wheelchair and, accordingly, the department's decision should be modified to approve his request for one.

Wisconsin Lawyer