Vol. 73, No. 2, February 2000

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Court of Appeals Digest

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

| Administrative Law | Business Law | Contracts | Courts |
| Criminal Law | Criminal Procedure | Death Certificate |
| Education | Evidence | Family Law | Insurance |
| Municipal Law | Public Benefits | Real Estate |
| Sexual Predators | Torts | Zoning |

State SSI Supplements - Recoupment of Overpayments

Mack v. Wisconsin Department of Health and Family Services, No. 99-0627 (filed 24 Nov. 1999) (ordered published 16 Dec. 1999)

Wisconsin has opted to complement an eligible individual's federal SSI (Supplemental Security Income) benefits by paying him or her an additional sum or a state SSI benefit. Through no fault of her own the petitioner, a 76-year-old disabled individual, was overpaid $837 in state SSI benefits. Once the Wisconsin Department of Health and Family Services realized the error, it notified the petitioner and determined that, following its written policy, it would recoup these funds by deducting 10 percent of her future SSI benefits payments until the overpayment was recovered.

The petitioner objected that DHFS was not authorized to administratively recoup the overpayments from her SSI benefits. In a decision authored by Judge Anderson, the court of appeals agreed.

The court found that there is no statutory authority for DHFS to administratively recover its overpayment from the petitioner's future benefits payments. It also found that, although an administrative agency generally possesses a common law right of recoupment to recover erroneous payments of public funds, DHFS would have to sue her to exercise its common law right of recoupment. Or, alternatively, it could administratively reclaim the funds pursuant to a statute or rule but, because there is no governing statute or rule, DHFS's administrative benefits repayment deduction was unauthorized.

Transfer Fees - Conveyance from Limited Family Partnership to Limited Family Liability Company

Wolter v. Wisconsin Department of Revenue, No. 99-0671 (filed 24 Nov. 1999) (ordered published 16 Dec. 1999)

Wolter and his children were all partners in Wolter Investment Company - Limited Partnership. The father was the general partner and his children were limited partners. The partnership held title to three parcels of land that it leased to various tenants.

In 1994 the partnership was reorganized as Wolter Investment Company LLC, a Wisconsin limited liability company under Wis. Stat. chapter 183. In order to give notice of the reorganization, the family members prepared and recorded in the local register of deeds office a "Memorandum of Organizational and Operating Agreement." The reorganization of the partnership into the LLC did not involve payment of any cash consideration to any person or entity.

Wolter and his children sought to avoid paying a real estate transfer fee on the conveyance of commercial property from the family partnership to the newly formed family limited liability company. They challenged the decision of the Wisconsin Tax Appeals Commission that a direct transfer of real property from the partnership to the limited liability company was a conveyance of title for value and that no exemptions applied to this transaction. In a decision authored by Judge Anderson, the court of appeals agreed with the commission.

A real estate transfer fee is assessed only if there is a conveyance or transfer of ownership interests in real property for value and there are no statutory exemptions or exclusions. The court concluded that the memorandum described above meets the definition of "conveyance" in section 77.21(1) of the Wisconsin Statutes. It also found that the conveyance was for value and therefore subject to the assessment of a transfer fee. Value is present in two ways. First, the family members received capital accounts in the LLC in exchange for the conveyance. Secondly, in reorganizing as an LLC and conveying the real property to the LLC, the members received beneficial ownership rights.

Finally, the court concluded that the conveyance was subject to the real estate transfer fee because there are no statutory provisions granting an exemption from that fee in a case
like this.

Mandatory Reexaminations - Six-month Period -
"Likely to Reoffend"

State v. Marberry, No. 98-2883 (filed 24 Nov. 1999) (ordered published 16 Dec. 1999)

The court of appeals, in an opinion written by Judge Deininger, affirmed an order committing the respondent as a sexually violent person under chapter 980 of the Wisconsin Statutes. The court addressed several issues. First, it concluded that "the six-month period for reexamination under section 980.07(1) does not begin to run until the court has conducted a dispositional hearing and issued an 'initial commitment order' under sec. 980.06(2), Stats." Although the respondent argued that the time began to run in November 1996, the court disagreed. The November order was not entered pursuant to a "dispositional hearing" and it did not specify whether the respondent "was to receive institutional care or be under supervised release." Neither condition was met until the circuit court's June 1998 order, and there was no contention that the mandatory reexamination failed to occur within six months of that order. Finally, the court of appeals was satisfied that the record contained sufficient evidence to support the commitment.

Jury Trial - Waiver

State v. Bernstein, No. 98-2259 (filed 4 Nov. 1999) (ordered published 16 Dec. 1999)

The state initially requested a jury trial on the issue of whether the respondent should be committed as a sexually violent person under chapter 980. It later withdrew the request and the respondent was committed following a bench trial. His prime argument on appeal is that the judge failed to obtain his personal consent to the state's withdrawal of its jury request.

The court of appeals, in an opinion written by Judge Vergeront, affirmed. First, a respondent's right to a jury trial under chapter 980 is governed by section 980.05(2), not "the case law construing the constitutional right of a criminal defendant to a jury trial and sec. 972.02(1), Stats." Section 980.05(2) requires that both the respondent and his or her attorney must consent. Attorneys, however, usually act on behalf of their clients in court. The court held that the respondent's "consent to the withdrawal of the State's request for a jury trial need not be in the form of a statement made personally by him to the court." The record established that the respondent's lawyer clearly consented to the withdrawal at a pretrial conference. On the morning of trial the judge placed the issue on the record and personally addressed respondent about the withdrawal of the jury request. The respondent acknowledged that he had spoken with his lawyer, that no one had threatened him or promised him anything, and that he was not under the influence of drugs or alcohol. The record adequately reflected the respondent's consent, although the appellate court carefully distinguished a situation in which the respondent had, in the first instance, requested the jury trial.

Survival Claims - Statute of Limitations

Merrill v. Jerrick, No. 99-0787 (filed 23 Nov. 1999) (ordered published 16 Dec. 1999)

On Nov. 23, 1994, Shawn was severely injured in a one-car accident in which he was a passenger. Shawn died three days later on Nov. 26 at age 16. Acting without legal counsel, Shawn's parents settled their wrongful death claim in 1995. On Nov. 26, 1997, exactly three years after Shawn's death, they brought a survival claim against the driver and his insurer. The trial judge dismissed the complaint, ruling that the statute of limitations, section 893.54, had expired and that the discovery rule did not apply.

The court of appeals, in an opinion written by Chief Judge Cane, reversed. Analyzing the discovery rule, the court held that there was "an issue of material fact concerning when a reasonable person with the same degree of mental and physical handicap and under the same or similar circumstances as [Shawn's estate] should have discovered his injury, its cause, its nature and the defendant's identities." The court was unpersuaded that the action accrued on the date of the accident or that the case law treated minors differently (that is, parents are under no legal duty to file suit within three years). Finally, the court declined to address the hypothetical issue of whether any statute of limitations applies to one who is in a coma under these circumstances.

Shoreland Zoning Variance - Wisconsin Fair Housing Act

Sawyer County Zoning Board v. Wisconsin Department of Workforce Development, No. 99-0707 (filed 23 Nov. 1999) (ordered published 16 Dec. 1999)

The issue in this case was whether the Department of Workforce Development, in enforcing the Wisconsin Fair Housing Act (WFHA), may order a zoning board to issue a shoreland zoning variance based upon characteristics unique to the landowner.

The landowner owns a cabin abutting a creek that flows into a lake. He and his family use the cabin on summer weekends. Due to various physical ailments, the landowner requires special oxygen equipment and is disabled for purposes of the WFHA.

The landowner hired a contractor to build an addition to the cabin. The addition permits him a greater view of the creek and lake and the sand bar area where his children play. Its linear design permits him to keep his lengthy oxygen hose out of the traffic pattern and move about without the hose getting tangled. After the construction of the addition was completed, the local zoning administrator issued two citations to the landowner, one for building without a permit and the other for violating the minimum setback. The landowner applied to the county zoning board for an after-the-fact variance. The board rejected the variance request on the ground that it would be for the convenience of the owner and would not be due to special conditions unique to the property. The board ordered the removal of part of the addition so that it would comply with the setback requirement.

The landowner filed a disability discrimination complaint against the board under the WFHA, claiming that the board refused to permit him to make reasonable modifications to the cottage or make a reasonable accommodation under the zoning ordinance for his cottage. The administrative law judge ordered the board to grant the variance, which decision was reversed by the circuit court.

In an opinion authored by Judge Hoover, the court of appeals affirmed the circuit court. The Department of Workforce Development in essence requested the appellate court to modify the unnecessary hardship standard required to obtain a shoreland zoning variance and examine the personal characteristics of the property owner when the owner suffers from a disability. Such a modification of the law would require the court of appeals to overrule supreme court decisions, which it may not do. The proper standard for granting a shoreland setback zoning variance is whether the property owner has no feasible use of the property without the variance, taking into account only the peculiar characteristics of the land. In this case the property owner failed to prove that there was no feasible use absent the variance.

The court held that the board's failure to grant the variance did not constitute discrimination, but rather was the only legal action it could take given the proof before it. Because the board did not engage in a discriminatory act, the Department of Workforce Development was without authority to order the board to grant the variance.

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.