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
Sanctions - Failure to Settle
Gray v. Eggert,
2001 WI App 246 (filed 5 Sept. 2001) (ordered published 31 Oct.
2001)
Gray sued the defendant bus company for injuries she sustained when
she was hit by a bus. Lost wages and medical expenses were estimated at
less than $2,000, yet the bus company refused to pay them because it
alleged that Gray was negligent. The trial court ordered both parties to
mediate the dispute. At mediation, the bus company made a "zero" offer,
which it later increased to $100 at a pretrial conference. Exasperated,
the circuit court judge found that the bus company had not acted in
"good faith," contrary to the scheduling order, and entered judgment in
favor of the plaintiff for $5,000 as a sanction.
The court of appeals, in an opinion written by Judge Schudson,
reversed. Clearly the trial court has the discretionary authority to
sanction violations of its orders. Wis. Stat. § 805.03. Moreover,
Wis. Stat. section 802.12 authorizes the court, as part of its
scheduling order, to compel attempts to mediate and settle. Nonetheless,
not all cases will settle and parties cannot be compelled to abandon
tenable defenses or claims. No factual basis existed for determining
whether either party mediated in "good faith" and the record disclosed
that the judge misunderstood the nature of mediation. In short, the
trial judge violated the "restraint" recognized in case law that permits
judges to "suggest" settlement parameters but forbids them from becoming
"too persistent" or forcing a resolution (¶16). Finally, a sanction
that takes the form of striking pleadings and entering judgment for the
opposing party is justified only by "egregious" misconduct.
Contracts
Employment Contracts - Damages for Breach - Consequential
Damages
Kramer v. Board of Educ. of
the School Dist. of the Menomonie Area, 2001 WI App 244 (filed
25 Sept. 2001) (ordered published 31 Oct. 2001)
The plaintiff had an employment contract with the School District of
the Menomonie Area for a two-year term beginning July 1, 1997, and
ending June 30, 1999. Before the end of the contract period, his
position was eliminated and he was terminated. His last day of work was
Oct. 17, 1997.
The plaintiff was unemployed from Oct. 17, 1997, until Jan. 5, 1998,
when he secured new employment with the Rhinelander School District. He
remained in Rhinelander until June 30, 1998, and since July 1, 1998, has
worked for the Eau Claire School District. During the two-year period
covered by the plaintiff's contract with the Menomonie district, he
received more than $137,000 in wages, benefits, and unemployment
compensation, which was $46,000 more than he would have received if he
had remained in Menomonie.
The plaintiff sued the Menomonie district, alleging breach of his
employment contract. He sought damages including lost wages for his
period of unemployment between Oct. 17, 1997, and Jan. 5, 1998, as well
as various consequential damages. Trial was held only on the issue of
damages. Before the trial, the court concluded that because the
plaintiff's actual wages during the two-year contract period exceeded
those he would have earned had he remained with the Menomonie district,
he was barred from recovering lost wages when he was between jobs in
late 1997 and early 1998. A jury did award $16,000 in consequential
damages (including lost Army Reserve wages and other incidental losses
and expenses). However, because the jury's $16,000 damage award, when
combined with the income the plaintiff would have received had he
continued with the Menomonie district, did not exceed his actual income
during the two-year contract period, on post-trial motions the court
concluded that the plaintiff was not entitled to any damages.
In a decision authored by Chief Judge Cane, the court of appeals
affirmed. With regard to the plaintiff's claim for wages and benefits
during his brief period of unemployment, the court concluded that the
plaintiff was entitled to the salary he would have received during the
unexpired term of the contract plus the expenses of securing other
employment, reduced by the income that he earned during the unexpired
term. As indicated above, the latter exceeded his claim for lost wages
and benefits. Therefore, the trial court correctly concluded that the
plaintiff was not entitled to damages for lost wages and benefits.
The other issue before the court of appeals involved the
consequential damages. The question was whether the consequential and
incidental damages should be reduced by the plaintiff's other income,
benefits, and unemployment compensation during the contract period. The
court concluded that those damages must be reduced to the extent the
plaintiff mitigated his damages by earning other income during the
contract period. Because it was undisputed that the $16,000 damage
award, combined with the income the plaintiff would have received had he
continued with the Menomonie district, did not exceed his actual income
during the two-year contract period, the plaintiff was not entitled to
any damages.
Criminal Law
Escape from Custody - Escape from Probation and Parole
Agent
State v.
Zimmerman, 2001 WI App 238 (filed 26 Sept. 2001) (ordered
published 31 Oct. 2001)
Probation and parole agents of the Wisconsin Department of
Corrections were transporting the defendant to jail after having taken
her into custody for a violation of the terms of her probation or
parole. [It was unclear in this case whether the defendant was on
probation or parole when she was taken into custody. However, for
purposes of this appeal, the appellate court concluded that it is
irrelevant whether she was a parolee or probationer when she escaped
because such persons are treated the same under the escape statute and
applicable administrative code provisions.] During the transport, the
defendant informed the agents that she felt ill and, when they stopped
the vehicle to let her out, she fled. The officers eventually located
her at her residence and took her into custody.
The defendant was charged with felony escape contrary to Wis. Stat.
section 946.42. To be guilty of escape, the defendant must have been in
custody. The relevant language of the escape statute defines custody to
include, without limitation, "actual custody of an institution ... or of
a peace officer or institution guard and constructive custody of
prisoners ... temporarily outside the institution." Wis. Stat. §
946.42(1)(a). The statute also contains an exception: "It [custody] does
not include the custody of a probationer [or] parolee ... unless the
person is in actual custody."
Applying these definitions, the court of appeals concluded that the
escape statute unambiguously excludes from the definition of "actual
custody" the physical custody of probation and parole officers. Because
the defendant was in the hands of probation and parole agents when she
fled, she was not chargeable with felony escape.
The language of the escape statute clearly articulates the categories
of custodians whose control over parolees and probationers constitutes
actual custody: an institution, peace officer, or guard. None of these
categories includes probation and parole agents.
Criminal Procedure
Jury Trial - Convictions on Both Greater and Lesser-included
Offenses
State v. Hughes,
2001 WI App 239 (filed 11 Sept. 2001) (ordered published 31 Oct.
2001)
The defendant was charged with possession of cocaine with intent to
deliver within 1,000 feet of a school. At his jury trial, three verdicts
were submitted to the jury: a guilty verdict on the charged offense, a
guilty verdict on the lesser-included offense of simple possession of
cocaine, and a not guilty verdict. The jury was instructed that it was
not to find the defendant guilty of more than one offense.
The jury returned verdicts finding the defendant guilty of
both the charged offense and the lesser-included offense. The
trial court polled the jury and each juror affirmed that the verdicts
were the verdicts to which he or she agreed. The trial court then
entered judgment convicting the defendant of the greater charged
offense.
The court of appeals, in a decision authored by Judge Fine, affirmed.
According to the appellate court, whether the defendant is entitled to
either a new trial or entry of a judgment on the verdict finding him
guilty of the lesser-included offense of simple possession of cocaine is
an issue of first impression in Wisconsin. The court noted that this
issue has arisen in other jurisdictions and no court has held that a
trial court violates a defendant's rights by entering a judgment of
conviction on a verdict finding the defendant guilty on the greater
charge when the jury also finds the defendant guilty of the
lesser-included offense.
The court found that the jury's unanimous findings that the defendant
possessed cocaine with the intent to deliver it and that he also
possessed that cocaine were not inconsistent. The "guilty" verdict on
the lesser-included offense, which affirmed that the defendant possessed
cocaine, was mere surplusage in that the jury also found that the
defendant possessed that cocaine with the intent to deliver it.
The court also observed that it might have been a better practice for
the trial court in this case to have asked the jury to continue its
deliberations and then return only one of the three verdicts that had
been submitted to it. Nevertheless, the trial court did not deprive the
defendant of any of his rights in proceeding as described above.
Warrantless Search of Dwellings - Exigent Circumstances to
Prevent Destruction of Evidence
State v. Garrett,
2001 WI App 240 (filed 5 Sept. 2001) (ordered published 31 Oct.
2001)
Two individuals were arrested for selling narcotics to an undercover
police officer in the defendant's apartment building. Minutes later a
detective observed the defendant open the front door of his apartment
while holding a baggie of what appeared to be cocaine (the same kind of
narcotic involved in the two arrests described above). The detective
approached the defendant's doorway, but the defendant quickly slammed
the door shut. Moments later, one of the arresting officers reported to
the detective that one of the arrested subjects said that they bought
the cocaine from a person fitting the defendant's description at the
defendant's apartment.
A warrantless entry of the defendant's apartment was then made and
the defendant was apprehended. Inside, various weapons were recovered.
The defendant was charged with being a felon in possession of a
firearm.
Among the issues on appeal was the lawfulness of the warrantless
entry into the defendant's apartment. In a decision authored by Judge
Curley, the court concluded that the entry was indeed lawful. An
exception to the warrant requirement arises when the state can
demonstrate both probable cause and exigent circumstances that overcome
an individual's right to be free from government interference. In this
case, there was no dispute that probable cause to search existed.
With regard to exigent circumstances, one such circumstance
justifying warrantless entry is a risk that evidence will be destroyed.
Based on the information the officers had received regarding the drug
transaction in the defendant's apartment minutes before, combined with
the defendant's own activities of casually opening his apartment door
holding a bag of cocaine, slamming the door shut after seeing the
detective, and then failing to answer the door, the court concluded that
it was reasonable to believe that the defendant identified the detective
as a police officer, which created a strong incentive for him to destroy
evidence. Accordingly, the court was satisfied that the warrantless
entry of the defendant's apartment was justified by exigent
circumstances.
Sentence Modification - "New Factor" - Erroneous Information
Relied Upon by Sentencing Judge
State v. Norton,
2001 WI App 245 (filed 11 Sept. 2001) (ordered published 31 Oct.
2001)
The defendant was convicted of felony theft from a person in
connection with a purse snatching. At the time of this offense, he was
serving two years' probation for a misdemeanor theft conviction. The
probation included a nine-month period of incarceration, which had been
stayed.
In the pre-sentence investigation report in the current purse
snatching case, the defendant's probation agent advised the court that
the defendant's probation in the misdemeanor theft case would not be
revoked. The trial court then sentenced the defendant to 42 months in
prison, "consecutive to any other sentence."
Six weeks after sentencing in the felony case, the probation officer
contacted the defendant and suggested that he voluntarily agree to
submit to the revocation of his probation in the misdemeanor case,
telling him that the nine-month stayed sentence could be served
concurrently with the 42-month sentence on the felony. Based on these
representations, the defendant agreed to a voluntary revocation of his
probation. However, because of the trial court's "consecutive to any
other sentence" language in the felony case, the nine-month stayed
sentence on the misdemeanor could not be served concurrently, and the
defendant thus faced 51 months in prison.
The defendant filed a post-conviction motion in the felony case,
alleging that the revocation of his misdemeanor probation and the
extension of his sentence constituted a new factor warranting sentence
modification. The trial court denied the motion.
In a decision authored by Judge Wedemeyer, the court of appeals
reversed. Erroneous or inaccurate information used at sentencing may
constitute a "new factor" warranting resentencing if it was highly
relevant to the imposed sentence and was relied upon by the trial court.
Although the court of appeals agreed with the state that, in general,
revocation of probation in another case does not ordinarily present a
new factor, the specific facts involved in this case require an
exception to the general rule. "It is clear from the sentencing
transcript that everyone understood that [the defendant's] probation [in
the misdemeanor case] would not be revoked at the time of sentencing, or
subsequent to sentencing, as a result of the felony theft" (
¶10).
The appellate court concluded that the circumstances of this case as
described above do constitute a new factor and that resentencing is
required because the inaccurate information relied on by the trial court
frustrated the purpose of the felony sentence. The court imposed the
sentence that it did with the understanding that the stayed misdemeanor
sentence would not have any impact on the sentence imposed in the felony
case. The trial court did not know at the time of sentencing in the
felony case that the defendant's probation would be revoked. Rather, the
court was advised by the probation agent that probation was not going to
be revoked. Thus, the trial court imposed a sentence in the felony case
that was based on inaccurate information.
The defendant has a right to be sentenced on accurate information.
Accordingly, the court reversed and remanded the felony conviction for
resentencing to permit the trial court an opportunity to review the
sentence with the benefit of the new information, that is, that the
defendant must serve the nine-month sentence on the misdemeanor
theft.
Discovery - Confidential Records
State v. Navarro,
2001 WI App 225 (filed 27 Sept. 2001) (ordered published 31 Oct.
2001)
The defendant, a prison inmate, was charged with battery by a
prisoner for assaulting a corrections officer. The defendant moved the
court for an in camera inspection of the officer's confidential
employment records for evidence that he had abused other inmates. The
trial court denied the motion.
The court of appeals, in an opinion written by Judge Deininger,
reversed on the ground that the judge had "prematurely" denied the
request without giving the defendant an opportunity to establish the
records' materiality. First, nothing in the "Shiffra" line of
cases limits the doctrine to mental health records. Second, such
requests cannot be denied simply because the records are not in the
prosecutor's possession (¶9). Third, the "Shiffra materiality
inquiry" is not limited by Wis. Stat. section 971.23(1).
In this case, the defense alleged it needed the information to
establish a claim of self-defense, a defense that rests in part upon the
defendant's state of mind at the time of the act. Thus, his "fear" of
the victim based on the officer's reputation for past violent acts is
relevant. On this record, the defendant made a showing "sufficient to
permit him to make the requisite showing of materiality at an
evidentiary hearing," an issue distinct from whether the showing was
sufficient to compel an in camera inspection (¶15). The court of
appeals further instructed the defendant to provide more detail about
the specific information and records he seeks.
Jurors - Discovery Violations - Other Act Evidence -
Demonstrative Evidence - Sentencing
State v. Gribble,
2001 WI App 227 (filed 27 Sept. 2001) (ordered published 31 Oct.
2001)
The court of appeals, in an opinion written by Judge Vergeront,
affirmed in part and reversed in part the defendant's conviction for
first-degree reckless homicide. The victim was the defendant's
2-year-old child, who died of severe head injuries that resulted from
"shaken-baby" or "shaken-impact" syndrome. At trial the defendant denied
any complicity and blamed the injuries on the child's mother. On appeal
he raised a series of different issues, including several relating to
sentencing that are fact intensive and therefore will not be discussed
in any detail.
First, the defendant alleged that the trial judge erred by
questioning prospective jurors outside his presence, and his attorney's,
with respect to hardships and infirmities relating to their service. The
court held that the defendant did not have a federal or state
constitutional right to be present with counsel when the judge
questioned prospective jurors regarding their service under Wis. Stat.
section 756.03. It distinguished questions about hardships and
infirmities from those relating to fundamental issues, such as fairness
and impartiality. Addressing the alleged statutory violation, the court
held that the court's questioning under section 756.03 is not part of
the "voir dire" for which the defendant must be present, as provided by
Wis. Stat. section 971.04(1)(c). Put differently, the judge or clerk
acts in an administrative capacity under section 756.03. Questions about
possible bias occur only after potential jurors are sworn: "We conclude
that the procedure described in § 805.08(1) is the 'voir dire of
the trial jury' referred to in sec. 971.04(c)" (¶18).
Second, the trial court acted properly when it excluded testimony by
a defense witness because the defendant failed to provide the witness's
statement as required by Wis. Stat. section 971.23(2m). Specifically,
the defendant named a witness on his witness list but did not disclose
his recorded statement. Section 971.23(2m) "requires that if a witness
is named on a list under para. (a), any relevant written or recorded
statements of that witness must be disclosed" (¶27). Defendants may
choose not to disclose witnesses who may be called in rebuttal or for
impeachment, but once the witness is named on the list provided by para.
(a), the recorded statement must be turned over. Excluding the witness
was a proper exercise of discretion because the defendant's sole reason
for not making the disclosure was his disagreement with the trial
court's interpretation of the statute.
Third, the trial court acted within its discretion when it admitted
other act evidence in accordance with the three-step test set forth in
Sullivan. There were four other acts: one was a burn to the victim's
armpit and three involved separate instances of abuse to another child
entrusted to the defendant's care. As for the burn incident, although
the defendant denied any responsibility, there was sufficient evidence
in the record from which a reasonable jury could have found to the
contrary. The other three incidents also were properly admitted, in
particular to demonstrate the defendant's "awareness of the type of
conduct that could cause great bodily harm to an infant" (¶49).
Fourth, the trial court properly permitted a medical doctor to
demonstrate with a doll the force used to cause the victim's injuries.
The demonstration was consistent with the doctor's opinion that death
resulted from a severe impact to the head. Although other experts opined
that death resulted from "shaken-baby syndrome," this consideration
affected only the weight of the in-court demonstration.
Fifth, the defendant challenged the inclusion of the cost of
counseling for the "victim's" mother and his aunt in the $20,000
restitution order. Concluding that the statutory term "victim" was
ambiguous in the context of this case, the court held that the meaning
of "victim" in Wis. Stat. section 973.20(1r) is most reasonably
interpreted using the definition in Wis. Stat. section 950.02(4)(a).
Clearly the child's mother was a "family member" and thus a "victim"
under this provision. The aunt did not, however, fall within the term
"victim." Thus, the cost of her counseling should not have been
included.
Insurance
Coverage - Jury Instructions - Resident of a
Home
Muskevitsch-Otto v.
Otto, 2001 WI App 242 (filed 1 Aug. 2001) (ordered published 31
Oct. 2001)
At age 2, Kyle was injured while a passenger in a car driven by his
mother, who was solely negligent in the mishap. Kyle settled with his
mother's insurer and then made a claim against Allstate, which insured
his paternal grandmother, Linda, who was like a "second mother" to him.
After Allstate denied coverage, a jury found that Kyle was not a
"resident" of Linda's home and therefore, Allstate provided no
coverage.
The court of appeals, in an opinion written by Judge Anderson,
affirmed in an opinion that addressed the accuracy of the jury
instruction that defined "Resident of a Household." In the absence of a
standard civil jury instruction on this question, the trial judge gave
one that was suggested in the April 2000 Wisconsin Lawyer. The jury
instruction properly "focused" on Kyle's intent while instructing the
jury to consider the frequency and duration of his stays at his
grandmother's home. The instruction explicitly reminded the jury that
Kyle was but 2 years old. Moreover, the jury could "infer" that it had
to look to the "adult actors in this case who spoke for Kyle"
(¶9).
Sexually Violent
Persons
Issue Preclusion - Offensive Use
State v. Sorenson,
2001 WI App 251 (filed 20 Sept. 2001) (ordered published 31 Oct.
2001)
In 1985 a jury convicted Sorenson of sexually assaulting his
7-year-old daughter, L.S. During that trial, L.S. claimed that she had
been assaulted by both the defendant and his brother, Donald. In 1991
Sorenson filed a motion for a new trial based on newly discovered
evidence, namely, L.S.'s recantation of her trial testimony. He later
withdrew the motion, however, as a part of a plea bargain that resulted
in a reduced sentence and parole. Sorenson's parole was later revoked,
in part because of new allegations of indecent behavior, and in 1995, he
was committed under Wis. Stat. chapter 980 as a sexually violent person.
The trial court refused to permit him to present evidence of L.S.'s
recantation and he was committed under chapter 980.
The court of appeals, in an opinion written by Judge Lundsten,
reversed and remanded so that a hearing could be held on the propriety
of issue preclusion. Sorenson claimed that issue preclusion could not be
used offensively in a chapter 980 trial to prohibit him from presenting
evidence that he did not commit a sexually violent offense. After
helpfully explaining the difference between "offensive" (preventing a
defendant from relitigating an issue) and "defensive"
(preventing a plaintiff from relitigating an issue) uses of
issue preclusion, the court turned to chapter 980 trials, while leaving
for another day whether offensive issue preclusion is ever permissible
in criminal cases generally.
In effect, Sorenson argued that respondents (like him) should be
permitted to relitigate their underlying sexual assault convictions.
Parsing the statutes, the court concluded that the legislature never
"intended to subject victims and their families to the ordeal of a
second trial when the respondent has already been found guilty"
(¶24).
In short, the court held that "the doctrine of issue preclusion is
available for use offensively in chapter 980 trials. When a respondent
was previously convicted of a sexually violent offense in a trial, issue
preclusion may be used to prevent the respondent from offering evidence
to show that he or she did not commit the prior offense" (28). The court
of appeals remanded the case so that the circuit court could apply the
standards of issue preclusion, which involve fact-intensive
discretionary considerations. If the offensive use of issue preclusion
was improper, Sorenson must be granted a new chapter 980 trial. If it
was appropriate, however, the judgment shall be reinstated.
Judge Dykman concurred in part and dissented in part. He agreed that
the judgment should be reversed but contended that the jury should weigh
the victim's recantation, Sorenson's testimony (if any), and the other
evidence in determining whether it was substantially probable he would
reoffend in the future. Judge Dykman agreed that the state was permitted
to use issue preclusion offensively in chapter 980 trials but disagreed
with the majority that Sorenson's statutory construction would mark a
"dramatic shift" in chapter 980 trials.
Torts
Negligence Per Se - Perverse Damage Award
Burg v. Cincinnati Casualty
Ins. Co., 2001 WI App 241 (filed 11 Sept. 2001) (ordered
published 31 Oct. 2001)
Burg was seriously injured when his snowmobile struck another
snowmobile that was "parked" in a snowmobile lane at night with its
lights out. The defendant and his friend had stopped their snowmobiles
in order to discuss their route. When stopped, they switched off the
snowmobiles' engines, which in turn automatically shut off their head
and tail lamps. A jury found that the defendant was not negligent with
respect to the snowmobile's use.
The court of appeals, in an opinion written by Judge Schudson,
reversed. First, the court held that on this record the defendant was
negligent per se. Although the trial judge had decried the "stupid"
definition of "operating" that, he thought, precluded a finding of
negligence per se, the court of appeals held that the defendant's
conduct did constitute "operating" within the meaning of Wis. Stat.
section 350.01(9r). The statute defines "operate" to include "the
exercise of physical control over the speed or direction of a
snowmobile" (¶10). The court held that this language necessarily
embraces "stopping" and "restraining" its operation as well. To support
this conclusion, the court looked to cases construing "operate" under
OWI law. Second, the court also concluded that the jury's damage award
was so perverse that a new trial on damages was warranted. The defense
offered no medical evidence that challenged the permanency of the
plaintiff's injuries.
Judge Curley dissented. "Operate" refers to control over the speed or
direction of the vehicle, or when one physically manipulates or
activates controls. The record in this case reflected that the
defendant's engine had been off for five minutes. The dissent saw no
logical stopping point to the majority's construction of "operate."
Lawyers - Third-party Liability - Fraud -
Conspiracy
Lane v. Sharp Packaging
Sys. Inc., 2001 WI App 250 (filed 26 Sept. 2001) (ordered
published 31 Oct. 2001)
Lane sued his former employer, Sharp Packaging, its owners, and their
personal attorney, J.N., as well as his law firm. In 1992 Lane was hired
and made the chief operating officer of Sharp Packaging. In 1995 he
entered into a new employment agreement that gave him a 25 percent
interest in the value of the company. Lane also was on Sharp's board of
directors and in 1995 he caused the company to replace J.N. as corporate
counsel. J.N. had represented Sharp for 10 years. According to Lane's
complaint, thereafter J.N. "secretly" provided services to Sharp and in
1998-99 engineered a "shareholder distribution" plan by which the
owners, who remained J.N.'s personal clients, received nearly $4
million. Lane was terminated in early 1999, at which time he discovered
that the shareholder distribution had drastically diminished the value
of the company's stock and hence his 25 percent interest. In his lawsuit
Lane raised the following issues: 1) fraudulent transfer, 2) breach of
the employment contract, 3) breach of the stock option agreement, 4)
civil conspiracy, 5) request for an accounting, and 6) declaratory and
injunctive relief.
The circuit court granted J.N.'s motion to dismiss Lane's claims
against him and his law firm on the ground that a party may not state a
claim against another party's attorney. The court of appeals, in a
decision written by Judge Nettesheim, reversed in an opinion that
addresses three issues relating to an attorney's liability to third
parties.
First, the court addressed "whether a lawyer can be liable to a third
party nonclient for acts committed within the attorney-client
relationship where the attorney does not have direct contact with the
third party." As a general rule, attorneys are immunized from liability
to nonclients, but case law recognizes an exception for fraudulent
conduct. J.N. argued that his alleged conduct did not fall within the
exception because he had no "direct contact" with Lane. The court of
appeals rejected this contention, however, because no authority makes
"direct contact" a condition of the fraud or collusion exception.
Second, J.N. argued that it was "legally impossible" for an attorney
and client to conspire, based on the principle recognized in other cases
that a corporation and its subsidiary are incapable of conspiring. The
court rejected J.N.'s "single unit" theory. J.N. and his law firm were a
"legal entity distinct and separate" from Sharp and the owners; thus,
they had the capacity to conspire. Other allegations supported
sufficient wrongdoing by the owners and J.N. to withstand the motion to
dismiss.
Finally, the circuit court erred by dismissing the complaint against
J.N. based on policy considerations in Badger Cab Co. v. Soule,
171 Wis. 2d 754 (Ct. App. 1992), which involved a defendant whose
counterclaim joined plaintiff's counsel and alleged that counsel's
prosecution of the action was an abuse of process and a civil conspiracy
to the same end. Badger Cab rejected such counterclaims because they
generated a conflict of interest that required a substitution of counsel
and would likely have a negative effect on the attorney-client
relationship and work product protection. In particular, such
counterclaims invited jury confusion about the merits of the claim and
the merit of bringing an action. In this case, however, such potential
confusion was not an issue because the claims alleged J.N.'s "alleged
fraudulent or conspiratorial conduct prior to this litigation - not from
his conduct relating to the litigation itself or his representations of
the Sharp defendants during that process" (¶29).
Worker's Compensation
Death Benefits - Statute of Limitations
International Paper Co. v.
Labor and Industry Review Comm'n, 2001 WI App 248 (filed 25
Sept. 2001) (ordered published 31 Oct. 2001)
Lorraine Wieseler's husband died 16 years after he suffered injury
from exposure to asbestos at work. The date of injury was in 1983 and
the death was in 1999. In 1999 Wieseler filed a claim for death benefits
under section 102.46 of the Worker's Compensation Act.
It was undisputed that Wieseler can collect death benefits. The issue
is whether the employer or the Work Injury Supplemental Benefit Fund
(the fund) is liable to pay the benefits. An administrative law judge
concluded that because Wieseler had not filed a claim for death benefits
within 12 years of her husband's injury, the fund was
responsible for the payments.
The Labor and Industry Review Commission (LIRC) reversed. It
concluded that the 12-year statute of limitations for death benefit
claims began to run when Wieseler's husband died, rather than when he
was injured. Because Wieseler filed her claim for benefits within 12
years of her husband's death, the employer was liable to make the
payments.
The circuit court affirmed and the court of appeals, in a decision
authored by Chief Judge Cane, affirmed as well. It concluded that LIRC's
conclusions were reasonable and consistent with the general rule that
statutes of limitation begin to run at the time the cause of action
accrues.
In a footnote, the court observed that Wieseler will receive death
benefits regardless of whether the fund or the employer pays them but
that she seeks to have the fund pay, because she asserts that any
benefits paid by the fund would not be reduced by settlements her
husband reached with several asbestos manufacturers.
Wisconsin Lawyer
