Vol. 74, No. 9, September 2001

Court of Appeals Digest

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

• Attorneys
• Civil Procedure
• Criminal Law
• Criminal Procedure
• Municipal Law
• Property
• Torts

Attorneys

Signatures - Rubber-stamped Imprint - Summons and Complaint

Novak v. Phillips, 2001 WI App 156 (filed 15 May 2001) (ordered published 23 July 2001)

The sole issue in this case concerned the validity of an attorney's rubber-stamped imprint of his handwritten signature on a summons and complaint. The court held that a "stamped reproduction of a signature does not satisfy Wis. Stat. §§ 801.09(3) or 802.05(1)(a) and that correcting the signature a year after receiving notice is not timely under § 802.05(1)(a)" (¶ 2). The court distinguished case law and rules that require attorneys to "subscribe" to papers, which can be done with a rubber-stamped signature. Section 802.05(1)(a) specifically requires a handwritten signature.

The court next determined that the defect was technical, not fundamental, which permitted the complainant to demonstrate that the defendant was not prejudiced. Neither defendant argued that the complaint was not well founded or properly investigated or that the summons failed to notify them of the action (¶ 26). The court found, however, that the technical defect was prejudicial because the plaintiff did not "promptly" correct it. Finally, the court remanded the case for a determination of whether the complainant should be permitted to amend the summons and complaint. (The trial court had erroneously concluded that it lacked subject matter jurisdiction and thus could not consider the motion.)

Civil Procedure

Default Judgments - Extensions - Oral Agreements - Evidence

Johnson Bank v. Brandon Apparel Group Inc., 2001 WI App 159 (filed 14 June 2001) (ordered published 23 July 2001)

The trial court granted a default judgment against the defendants based upon their failure to file a responsive pleading within the time required. The defendants unsuccessfully claimed that they had an "oral agreement" that extended the time.

The court of appeals, in an opinion written by Judge Dykman, reversed. Recent case law establishes that "[i]n the context of an untimely answer, reasonable grounds for noncompliance with a statutory time requirement constitutes excusable neglect" ¶ 11, citing Connor v. Connor, 2001 WI 49, ¶ 16. Courtesy agreements can be oral or written. In this case, the parties submitted conflicting affidavits as to whether an oral agreement existed. The trial court erroneously exercised its discretion by entering a default judgment without hearing testimony: "Unless the facts are undisputed or the right to a hearing is waived, a party or attorney is entitled to more than a trial by affidavit" (¶ 17).

Criminal Law

Possession of Child Pornography - Multiplicity

State v. Multaler, 2001 WI App 149 (filed 12 June 2001) (ordered published 23 July 2001)

While executing a search warrant for unrelated offenses, the police found numerous videotapes, computer equipment, and two computer diskettes. The diskettes were labeled with the words "child pornography." After obtaining a second search warrant to copy and search the contents of the diskettes, the execution of that warrant revealed 79 photographic images of children engaging in sexually explicit conduct.

The state charged the defendant with 79 counts of possession of child pornography contrary to Wis. Stat. section 948.12. This statute prohibits possession of "any ... photograph ... or other pictorial reproduction ... of a child engaged in sexually explicit conduct." The defendant claimed that the 79 counts were multiplicitous. The circuit court never decided the multiplicity motion, however, because the defendant entered into an agreement by which he pled no contest to 28 counts [there being no more than one count per printed page of child pornography].

In a majority decision authored by Judge Schudson, the court of appeals concluded that the 28 counts to which the defendant entered his plea were not multiplicitous. Although each count was brought under the same statute, the offenses were sufficiently different "in fact" to support separate counts. Had this case been tried, the state would have had to prove that the defendant not only knew that he possessed each page, but that he knew each page depicted sexually explicit conduct and that he knew or reasonably should have known that each page displayed a child under the age of 18 engaging in the sexually explicit conduct.

Even though the 28 counts were sufficiently different in fact to survive a double jeopardy attack, they still could be multiplicitous if the Legislature intended that multiple offenses be brought as a single count or as a single "unit of prosecution." If the offenses are different in fact, as they were here, a presumption arises that the Legislature intended to permit cumulative punishments for the multiple offenses. This presumption can be rebutted only by clear legislative intent to the contrary. In this case the court concluded that the defendant failed to rebut the presumption that the Legislature intended to permit multiple punishments for multiple offenses of possession of child pornography.

[NOTE: This case also presented significant "staleness" issues relating to the information that supported the first search warrant.]

Judge Fine filed a concurring opinion and Judge Curley dissented. Both of their opinions dealt only with the search warrant issues.

Criminal Procedure

Truth-in-Sentencing - "Boot Camp" Eligibility

State v. Steele, 2001 WI App 160 (filed 6 June 2001) (ordered published 23 July 2001)

In connection with a manufacturing/delivering cocaine offense that occurred since Wisconsin's new truth-in-sentencing statutes took effect, the circuit court sentenced the defendant to a six-year term of confinement followed by five years of extended supervision. At the sentencing hearing, the court determined that the defendant was not eligible for the challenge incarceration "boot camp" program (see Wis. Stat. § 302.045) because of the seriousness of his offense. The defendant challenged this determination on appeal.

In a unanimous decision authored by Judge Snyder, the court of appeals affirmed. When imposing a bifurcated sentence under truth-in-sentencing, the court must, "as part of the exercise of its sentencing discretion," decide whether the defendant is eligible or ineligible for challenge incarceration during the confinement portion of his sentence. See Wis. Stat. § 973.01(3m). According to the court of appeals, at sentencing the judge "must first determine whether the offender meets the preliminary [boot camp] criteria of sec. 302.045(2) regarding voluntariness, age, nature of offense, substance abuse issues, and absence of psychological, physical, or medical limitations. [These criteria are specified in the "boot camp" statute.] Then the court must determine, exercising its own discretion, whether an offender who already meets the sec. 302.045 specified criteria is eligible for boot camp" (¶ 8).

In this case, while the trial court considered boot camp, it decided that boot camp was inappropriate for the defendant because of the seriousness of his offenses. [In addition to the manufacturing/delivering cocaine crime that was committed after truth-in-sentencing took effect, the defendant also was convicted of a like offense that occurred prior to truth-in-sentencing.] The judge's decision to deny the defendant placement in boot camp was based upon an appropriate sentencing factor, that is, the gravity of the offenses. Accordingly, the appellate court concluded that the judge did not misuse sentencing discretion when finding the defendant ineligible for challenge incarceration.

Indeterminate Sentences - Serious Felonies - Presumptive Mandatory Release

State ex rel. Gendrich v. Litscher, 2001 WI App 163 (filed 13 June 2001) (ordered published 23 July 2001)

The defendant was sentenced to prison under Wisconsin's old indeterminate sentencing system after he was convicted of first-degree sexual assault of a child. This is one of the "serious felonies" for which the mandatory release on parole date is only presumptive. When the defendant reached his presumptive parole date, the Parole Commission decided to hold him in custody longer.

The defendant filed a petition for a writ of certiorari claiming a liberty interest in being released on his mandatory release date and challenging the commission's decision to extend that date. The circuit court denied the writ. In a decision authored by Judge Anderson, the court of appeals affirmed.

The critical issues before the appellate court were whether the defendant had a legitimate liberty interest in being released on his mandatory parole eligibility date and whether that interest was entitled to due process protections. The court was satisfied that the statute establishing presumptive mandatory release for certain serious felonies does not create a legitimate liberty interest in being paroled. It permits the Parole Commission to deny mandatory release to otherwise eligible prisoners when, in its discretion, the prisoner either poses a risk to the public or refuses to participate in necessary counseling and treatment. Because the defendant was not entitled to release on his presumptive mandatory release date, he was not entitled to any due process protections. See ¶ 10.

The court went on to indicate that, even if it were to conclude that the presumptive mandatory release scheme created a legitimate liberty interest entitled to due process protections, it would hold that the defendant received all of the due process to which he was entitled. He was given a hearing before a member of the Parole Commission and, at that hearing, had the opportunity to state his case for parole and to challenge the information in his prison record. After the conclusion of the hearing, the commission gave the defendant a written explanation of why he was denied release.

Municipal Law

Zoning - Variances - Special Exceptions

Fabyan v. Waukesha County Board of Adjustment, 2001 WI App 162 (filed 20 June 2001) (ordered published 23 July 2001)

A county shoreland zoning ordinance distinguishes between "special exceptions" and "variances." In this case, the owners of property obtained a special exception to the floor area ratio requirements of a county ordinance from the county board of adjustment. An opponent of this action argued that the board acted upon an incorrect theory of the law in that the grant of the special exception was actually a disguised grant of a variance pursuant to Wis. Stat. section 59.694(7)(c). Treating the grant as a variance, the opponent argued that the owners failed to demonstrate the unnecessary hardship requirement of variance law as set forth in the statute cited above and in State v. Kenosha County Board of Adjustment, 218 Wis. 2d 396, 577 N.W.2d 813 (1998).

In a decision authored by Judge Nettesheim, the court of appeals upheld the decision of the board of adjustment. In so finding, the court needed to distinguish between a variance and a special exception, something that has not been done previously in a reported Wisconsin case. Drawing upon several commentators, the court noted that the concept of a special exception grew out of the rigid and difficult barriers presented by the unnecessary hardship test associated with the law of variances. In essence, a special exception involves a use that is permitted rather than proscribed by zoning regulations. It is allowed only upon approval of a board of adjustment or other administrative body charged with various duties and invested with certain powers in connection with the administration of zoning regulations. See ¶ 15. A variance, on the other hand, authorizes a landowner to establish or maintain a use that is prohibited by zoning regulations. See ¶ 16.

Property

Homesteads - Execution - Converted Funds

Paulman v. Pemberton, 2001 WI App 164 (filed 28 June 2001) (ordered published 23 July 2001)

Carole, Jeanine, and Charles are the three surviving children of Dorothy Paulman. Dorothy's trust, which held all her assets, named Jeanine and Charles as primary beneficiaries, with only minor provisions for Carole. Dorothy also executed durable powers of attorney that gave Jeanine and Charles control over her property and affairs. Dorothy was later placed in a group home and her own house sold for $186,000, after which Jeanine and Charles took $88,000 and $78,000 respectively and used the funds to purchase homes.

After Dorothy's death, Carole filed complaints against Charles and Jeanine for conversion and breach of fiduciary duty. Eventually, Jeanine and Charles stipulated that they would make about $35,000 in staggered payments to the estate. When the two siblings reneged on the stipulation, Carole requested that their homes be taken to satisfy the judgment obtained by the estate pursuant to the stipulation. The trial court ruled, however, that under Wis. Stat. section 815.20 their homes were exempt and could not be used to satisfy the judgment.

The court of appeals, in an opinion written by Judge Dykman, reversed. (The appeal focused on Charles because Jeanine filed for bankruptcy protection.) "Old" but "good" case law established that there are instances in which the homestead exemption is inapplicable and thus a judgment lien may be permitted against a home. And "liens" are no different than "executions" for purposes of Wis. Stat. section 815.20. The case law permits execution against homestead property in which converted funds were invested. In this case, Charles conceded in the stipulation that he and Jeanine had converted Dorothy's funds. In conclusion, Wis. Stat. section 815.20 did not bar the execution sale of Charles' home, "because he purchased it with converted funds in which Carole had an interest" (¶17).

Torts

Subrogation - "Made Whole" Doctrine - ERISA - Preemption

Kavelaris v. MSI Ins. Co., 2001 WI App 161 (filed 27 June 2001) (ordered published 23 July 2001)

The plaintiff was injured and his wife killed in a car accident. The tortfeasor's insurer agreed to pay policy limits of $200,000 in exchange for a complete release and dismissal of claims against their insured. The plaintiff agreed, provided that his employer's medical insurer, CGLI, which had a subrogated claim of more than $130,000, agreed to waive its subrogated interest because the $200,000 did not cover his damages. CGLI refused on the grounds that Wisconsin's "made whole" rule was preempted by ERISA. The trial court ruled that the "made whole" doctrine is not preempted by ERISA and CGLI appealed.

The court of appeals, in an opinion written by Judge Snyder, affirmed. Case law establishes that "insured plans" are not governed by ERISA and are therefore subject to the "made whole" doctrine, which provides that subrogated carriers cannot collect until the injured party has been completely compensated. In resolving CGLI's preemption claim, the court examined three ERISA clauses: 1) the preemption clause; 2) the savings clause; and 3) the "deemer" clause (¶7). The "savings clause" places "insured plans" outside ERISA's orbit. The court held that the "made whole" doctrine is an insurance regulation and, thus, the "ERISA savings clause applies to the insurance benefit provided by CGLI" (¶12). ERISA's "deemer" clause did not destroy the savings clause "because CGLI is an insurance company that has insured [plaintiff's employer's] ERISA plan under a policy regulated by the insurance laws of Wisconsin" (¶16). In short, the "made whole" doctrine eliminated CGLI's subrogation claim.