Vol. 75, No. 12, December 2002

Court of Appeals Digest

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

Civil Procedure Contracts Criminal Law Criminal Procedure

Employment Law Family Law Insurance Property

Civil Procedure

Indispensable Parties - Indian Tribes

Dairyland Greyhound Park Inc. v. McCallum, 2002 WI App 259 (filed 19 Sept. 2002) (ordered published 30 Oct. 2002)

Dairyland Greyhound Park sought to enjoin Gov. Scott McCallum from renewing gaming compacts with Indian tribes in Wisconsin. The circuit court dismissed the action on the ground that the tribes are "necessary parties" under Wis. Stat. section 803.03(1), and because they cannot be joined as parties, the injunctive action cannot proceed.

The court of appeals, in an opinion written by Judge Deininger, reversed. At the outset the court emphasized that the merits of an injunction were not before it. The sole question was whether the claim for relief may be heard in a Wisconsin court despite Dairyland's inability to join the tribes as parties.

The court looked to case law "discussing the nature of the interest required for intervention as a matter of right for guidance" in resolving this issue, an interest that is "defined broadly" and extends "well beyond the concept of 'legally protected' interest" (¶14). It was "not necessary for the tribes to have an enforceable right to continue conducting casino gambling in order for them to have a sufficient interest in this litigation to be deemed necessary parties." Rather, their mere "opportunity to convince the Governor" to extend the compacts beyond their current expiration dates sufficed. (¶16)

Turning next to whether the tribes' absence impaired or impeded their ability to protect that interest, the court observed that neither the governor's participation as a party nor the tribes' status as "amicus" resolved the matter.

Since the tribes cannot be made parties, the "final question" was whether "in equity and good conscience the action should proceed among the parties now before the court, or alternatively, whether the action should be dismissed, as the circuit court concluded" (¶20). The court elected to apply a de novo standard of review, and looked at four questions: 1) Will the tribes be prejudiced by the rendering of a judgment in this action in their absence? 2) Can any such prejudice be lessened or avoided by protective provisions in the judgment or other measures? 3) Will a judgment in the absence of the tribes be "adequate" with respect to the governor and Dairyland? 4) Will Dairyland have an adequate remedy if this action is dismissed for non-joinder?

The court of appeals held that the circuit court erred by giving undue, "if not controlling, weight" to the tribes' status as sovereign nations and by placing too much emphasis on the "prejudice" element of section 803.03(3)(a), "without giving proper consideration to whether the remaining factors might outweigh the prejudice inherent to the tribes if Dairyland were to prevail" (¶26). In weighing these other factors, especially the "adequacy" of a judgment and a remedy absent the tribes' participation, the court found "persuasive the reasoning of two state courts [New York and California] which each concluded Indian tribes were not indispensable parties in light of facts and circumstances closely analogous to those now before us" (¶32). On balance, the court held, the action should proceed in the absence of the tribes, "notwithstanding the potential prejudice to their interests" (¶35).

Contracts

UCC - Added Terms - Interest Rates

Mid-State Contracting Inc. v. Superior Floor Co., 2002 WI App 257 (filed 17 Sept. 2002) (ordered published 30 Oct. 2002)

Superior Floor Company contracted with Mid-State Contracting Inc. to install a dust collection system and truck loading system at Superior's plant. The payment terms were 20 percent down, 70 percent over the course of the project, and 10 percent due 30 days after completion; there was no contractual provision regarding interest rates. Superior paid for the systems.

Later Superior contacted Mid-State regarding additional items that needed to be repaired or installed. A notation on the invoices specified a 1.5 percent monthly service charge (an 18 percent annual rate) for all accounts due. After Superior refused to pay for the items, Mid-State sued to recover the amounts due plus interest, and Superior counterclaimed for breach of implied and express warranties. A jury returned a verdict in Mid-State's favor and the trial court entered judgment for about $25,000 on the verdict plus $34,600 interest.

The court of appeals, in a decision authored by Judge Hoover, affirmed. Wisconsin statutes set the legal interest rate at five percent but permit parties to contract at different rates. Wis. Stat. § 138.04. Superior argued that it never agreed to an 18 percent interest rate, while Mid-State claimed that its notation at the bottom of the invoices constituted an "additional term" as provided by Wis. Stat. section 402.207. A Seventh Circuit case had held that the statute applies "where there is a previous agreement between the parties and one or both sends written confirmation of terms discussed adding terms not discussed" (¶9, emphasis added).

The court of appeals explained that "[w]hile interest may not have been discussed originally, adding it to the bottom of the invoice constitutes the addition of a term not previously discussed between the parties. Thus, § 402.207 applies to make the interest an additional part of the agreement between merchants unless one of the exceptions in § 402.207(2) applies" (¶10). Only the third exception, which bars the unilateral addition of a term to a contract if notification of and objection to the term is made, was arguably applicable. Since Superior never objected to the additional terms, this exception did not preclude the 18 percent interest rate. (The jury had found Superior liable for the bills and declined to find that Mid-State had failed to perform.)

Criminal Law

Self-defense - Instructions

State v. Peters, 2002 WI App 243 (filed 18 Sept. 2002) (ordered published 30 Oct. 2002)

Shirley Peters was convicted of first-degree intentional homicide for shooting her husband to death. The court of appeals, in an opinion written by Judge Brown, reversed. The court relied on the supreme court's recent decision in State v. Head, 2002 WI 99, which held that a defendant need not satisfy an objective threshold showing for imperfect self-defense. In Peters' case, the court found that the real controversy of imperfect self-defense had not been fully tried and that discretionary reversal was appropriate under Wis. Stat. section 752.35. "[I]n order for Peters to be entitled to a jury instruction on imperfect self-defense, she would need to present only 'some' evidence that she actually believed that she was in imminent danger of death or great bodily harm and actually believed that the force she used was necessary to defend herself" (¶19) (emphasis in original).

Reversible error also occurred because the trial court refused to instruct the jury on perfect self-defense, thereby contravening the supreme court's "clarification" in Head of the "some evidence" standard. The credibility of the defendant's version of events was for the jury to decide (¶28).

Bail Jumping - Sufficiency of Evidence - Confession Corroboration Rule

State v. Hauk, 2002 WI App 226 (filed 1 Aug. 2002) (ordered published 25 Sept. 2002)

The defendant was charged with interference with custody and was released on bond. One of the conditions of release was that she not "commit any crimes or engage in any criminal activity." While free on bond she allegedly solicited a third party to murder her ex-boyfriend and his current wife. However, the defendant subsequently called off the "hit" after telling a friend about it and being counseled by the friend to abandon the plan. The state charged the defendant with bail jumping on a theory that she intentionally failed to comply with the bond condition described above when she solicited the murders. No charges were filed in connection with the solicitation, but the defendant was convicted of bail jumping.

On appeal, the defendant argued that the evidence presented to the jury was insufficient because she was never convicted of any underlying crimes related to her solicitation of murder. In a decision authored by Judge Dykman, the court of appeals disagreed. It concluded that as long as there was sufficient evidence to allow a reasonable jury to conclude beyond a reasonable doubt that the defendant intentionally violated her bond by soliciting murder, that evidence was not required to be in the form of a conviction for the solicitation.

This case also raised issues regarding the confession corroboration rule. In Wisconsin there is a common law rule that a criminal conviction may not be grounded solely on the admission or confession of the accused. Instead, to sustain a conviction, corroboration of a "significant fact" is required. The defendant argued that all the evidence the state relied on to convict her consisted of extrajudicial statements that she made either to a detective or to her friend, and therefore there was insufficient evidence to convict her. The state responded that the corroboration rule for confessions applies only to statements made to the police.

The appellate court noted that no Wisconsin case has explicitly decided whether the corroboration rule applies to all extrajudicial statements made by the accused or only to those made to the police. It observed that the main concern underlying the corroboration rule is that an accused will feel coerced or induced when he or she is under the pressure of a police investigation and may make a false confession as a result. Concerns about police pressure are not implicated, however, when a confession is made to a friend before a police investigation has been initiated, as occurred in this case. The court therefore concluded that the corroboration rule did not apply to those statements.

Attempted Child Enticement - Attempted Second-degree Sexual Assault - Liability When Intended Victim is an Adult Posing as a Child

State v. Grimm, 2002 WI App 242 (filed 19 Sept. 2002) (ordered published 30 Oct. 2002)

The defendant was charged with attempted child enticement (Wis. Stat. section 948.07(1)) and attempted second-degree sexual assault of a child (sections 939.32 and 948.02(2)). These crimes allegedly occurred during online communications between the defendant and a Division of Criminal Investigation special agent who posed as a 14-year-old boy. The defendant was arrested when he arrived at the location where he was to pick up the "child" for their planned journey to a hotel.

The defendant moved to dismiss the charges, asserting that commission of the crimes was legally impossible because the alleged victim was actually an adult. The circuit court granted the motion.

In a decision authored by Judge Vergeront, the court of appeals reversed. It held that under State v. Robins, 2002 WI 65, 253 Wis. 2d 298, 646 N.W.2d 287, and State v. Koenck, 2001 WI App 93, 242 Wis. 2d 693, 626 N.W.2d 359, the state may properly charge attempted child enticement and attempted second-degree sexual assault of a child when the intended victim is actually an adult whom the complainant believes to be a child.

Criminal Procedure

Search and Seizure - Warrantless Entry of Home - Exigent Circumstances - Domestic Violence Investigation

State v. Mielke, 2002 WI App 251 (filed 4 Sept. 2002) (ordered published 30 Oct. 2002)

Deputy sheriffs responded to a domestic violence report that the defendant had struck his female companion at their home and that she was spitting blood. Deputies had been to the defendant's house several times in the past for domestic abuse calls.

When the officers arrived, the woman came out onto the front porch and told them that there was nothing wrong. She did not appear to have any injuries. Although the scene was calm at the time, the officers observed that the woman was crying, shaking, and cowering in a corner. She then turned to go back into the house, telling the police not to follow her. One of the deputies prevented the woman from closing the door behind her. Believing the woman to be in danger, the deputy continued to talk with her for a brief period. The deputy then looked through the open door and saw the defendant, who granted the police permission to enter the premises.

The defendant was charged with recklessly endangering another person's safety, being armed while under the influence of alcohol, battery, and felony bail jumping. Upon a motion by the defendant, the circuit court suppressed evidence found inside the house. The court stated that although there was probable cause to enter, there were not sufficient exigent circumstances to justify entering the home without a warrant.

The court of appeals, in a decision authored by Judge Peterson, reversed. The court held that the police entry of the home was permitted by exigent circumstances. This exception to the warrant requirement arises when the state can demonstrate both probable cause and exigent circumstances that overcome the individual's right to be free from governmental interference. Whether the officers acted reasonably in entering the house without a warrant is measured against the totality of the circumstances. The test applied is an objective one: what would a reasonable police officer reasonably believe under the circumstances?

Here the police believed the woman's safety was threatened. Under all the circumstances as described above, the court concluded that this belief was reasonable and that the police were entitled to infer that exigent circumstances existed.

The state also argued that the entry was permissible under the emergency doctrine and on the basis of the owner's consent. However, because the appellate court held that there were sufficient exigent circumstances justifying the entry, it did not address those additional arguments.

Habitual Criminality - Proof of Prior Conviction - Timing of Prior Conviction

State v. Watson, 2002 WI App 247 (filed 15 Aug. 2002) (ordered published 30 Oct. 2002)

The defendant pleaded guilty to possession of a firearm as a felon, which plea was accepted by the circuit court on May 9, 1997. The written judgment of conviction for this offense was dated July 23, 1997. On May 20, 1997, the defendant committed a substantial battery and was charged with being a repeater because of the prior firearms conviction. The defendant argued that he was not a repeater within the meaning of the habitual criminality statute because the judgment of conviction for the firearms charge was entered after he committed the battery.

In a decision authored by Judge Dykman, the court of appeals held that once the circuit court has accepted a guilty plea or verdict, the conviction becomes sufficiently final to trigger the operation of the repeater statute. It thus concluded that for purposes of applying the habitual criminality statute in the battery case, the defendant had been "convicted" of the firearms charge when he was found guilty of the firearms offense, even though the judgment of conviction for that crime had not yet been entered.

This case also raised questions concerning the sufficiency of the state's evidence as to the defendant's repeater status. Although the appellate court concluded that the defendant admitted the prior conviction for purposes of repeater enhancement, the court had to look to the totality of the record to draw that conclusion. Once again, it encouraged prosecutors seeking repeater enhancement to either: "(1) seek an oral admission from the defendant at the plea or sentencing hearing that he or she was convicted of a particular crime on a particular date; or (2) present at the hearing a certified judgment of conviction. As we have noted before, these are the best (and simplest) ways to ensure that the sentence enhancement will be sustained on appeal" (¶ 8).

Finally, in a footnote, the court addressed the question of whether factual allegations supporting a habitual criminality charge must be included in both the criminal complaint and the information. Wis. Stat. section 973.12(1) permits the repeater allegation to be included in either the complaint or the information. The court concluded that as long as the two documents are not factually inconsistent with each other, the defendant is put on sufficient notice if either the complaint or the information alleges the necessary factual background.

Hearsay - Statements Against Penal Interest - Third-party Confessions

State v. Joyner, 2002 WI App 250 (filed 24 Sept. 2002) (ordered published 30 Oct. 2002)

The court of appeals, in an opinion written by Judge Fine, affirmed the defendant's conviction for robbery with use of force. Judge Schudson dissented. One of the issues raised concerned the admissibility of an alleged "confession" to the same offense by the defendant's sister. The sister, who made the statement to the defendant's attorney, in effect said that the defendant was not in the vicinity at the time of the purse snatching, which was carried out by another individual while the sister waited in a nearby car. The attorney withdrew from representation so that he could testify at the defendant's trial.

The court of appeals found no grounds for reversible error in the trial court's decision to exclude the sister's statement. When examined assertion by assertion, as required by the case law, the statements were not against the sister's penal interest. In one part of the statement the sister said only that the defendant "wasn't there." In another part, the sister pointed the finger at two other people and did not inculpate herself. (¶¶19-20) [In postconviction proceedings, the defense presented additional information about the alleged "confession," which the court analyzed and rejected under the newly discovered evidence standard.]

Employment Law

Whistleblower Law - Disclosure of Information Involving Alleged Mismanagement

Hutson v. Wisconsin Personnel Comm'n, 2002 WI App 249 (filed 10 Sept. 2002) (ordered published 30 Oct. 2002)

Wisconsin's Whistleblower Law is codified as part of the Wisconsin State Employment Relations Act, Wis. Stat. chapter 230. The act's statement of policy provides that it is the policy of Wisconsin to encourage disclosure of certain information by governmental employees and to ensure that employees are protected from retaliatory action for disclosing that information.

In this case a probation and parole agent wrote a memo to her supervisor and sent copies to her supervisor's superior and to union officials. In the memo, the agent claimed she had to handle an excessive caseload and referred to a "lack of clarity under a supervisory style that is extremely arbitrary and capricious."

The agent subsequently filed a complaint with the Wisconsin Personnel Commission (the commission) against the Department of Corrections, alleging, among other things, unlawful retaliation against her for having submitted the memo. The commission concluded that the memo was not a protected disclosure under the Whistleblower Law because it did not disclose a "series" of incompetent management actions.

The Whistleblower Law protects the disclosure of information gained by an employee that he or she reasonably believes demonstrates mismanagement. "Mismanagement" is statutorily defined as "a pattern of incompetent management actions which are wrongful, negligent or arbitrary and capricious and which adversely affect the efficient accomplishment of an agency function...." See Wis. Stat. § 230.80(7).

The commission conceded that this statutory language reflects a clear legislative intent to provide the protections of the Whistleblower Law only to those employees who identify a "series" of incompetent management actions, that is, more than an isolated instance of alleged mismanagement.

In a decision authored by Judge Schudson, the court of appeals disagreed. The court looked to ordinary dictionary definitions for a meaning of the term "pattern," which is used in the statute. It found that "pattern" is defined as "a fully realized form, original, or model accepted or proposed for imitation: something regarded as a normative example to be copied." It believed that a "pattern" could be triggered or established by a single act and thus held that the commission erred in determining that the agent's memo was not a protected disclosure of "information" under the Whistleblower Law.

Family Law

Divorce - Property Division - Division of 401(k) Plan - Fluctuations in Value of Plan Assets Prior to Redemption

Taylor v. Taylor, 2002 WI App 253 (filed 26 Sept. 2002) (ordered published 30 Oct. 2002)

The parties were divorced in September 2000. At that time, they entered into a marital settlement agreement, which was approved by the court and incorporated into the divorce judgment. As part of the property division set forth in the agreement, the husband's 401(k) plan, consisting primarily of stocks, was divided between the parties. The husband received 65 percent and the wife received 35 percent, to be divided through a qualified domestic relations order (QDRO).

Six months after the date of the divorce, the wife's attorney forwarded a draft QDRO to the husband, the trial court, and the 401(k) plan administrator. The draft called for a transfer to the wife of 35 percent of the plan's value as of September 2000, with no adjustment made for changes in the value of plan assets occurring between September 2000 and the date on which the transfer was to occur. The husband objected, noting that the stock market had declined since the date of the divorce, causing his 401(k) plan to lose value. He argued that if his ex-wife were to receive a transferred amount that did not reflect a proportionate share of the post-divorce losses, absorbing the losses on both his and his wife's portions of the plan would penalize him. The wife argued that she was entitled to receive a sum in dollars equal to 35 percent of the value of the plan as of the divorce date, with no adjustment for subsequent losses. The circuit court agreed with the husband.

In a decision authored by Judge Deininger, the court of appeals affirmed. The court concluded that the language in the marital settlement was not ambiguous and that the only reasonable interpretation of that language is that it granted the husband a 65 percent share and the wife a 35 percent share of the 401(k) plan as of the date of the agreement and divorce. The wife's share, like the husband's, was subject to market gains and losses from that date until such time as she withdraws her share from the plan.

Responding to one of the wife's additional arguments, the court concluded that judicial economy would be ill served by permitting any party who suffers a loss upon liquidation of an asset awarded to him or her in a divorce to seek a judicial reallocation of the loss. "If a party desires the comfort and security of a fixed dollar sum from a divorce property division, that is what he or she should bargain for - or ask the court to order" (¶ 14).

Insurance

UM Coverage - Emotional Injuries

Mullen v. Walczak, 2002 WI App 254 (filed 10 Sept. 2002) (ordered published 30 Oct. 2002)

Joseph Mullen and his wife were in an accident caused by Douglas Walczak, who was uninsured. Mullen suffered severe injuries and his wife died. He brought a wrongful death claim on behalf of the estate. American Family, the Mullens' insurer, paid $100,000 under the wife's "each person" uninsured motorist (UM) coverage limit. Mullen and American Family stipulated that his own injuries, physical and emotional, totaled $50,000. American Family refused to cover Mullen's emotional injuries stemming from his wife's death, on the ground that they arose from his wife's injuries, the coverage for which had been exhausted. The circuit court granted summary judgment to American Family.

The court of appeals, in a decision authored by Chief Judge Cane, affirmed. "[B]ut for the death of his wife, Mullen would not have an emotional distress claim based on witnessing her death. That he suffered his own injuries is irrelevant to the issue of how the policy covers claims that result from bodily injury to another person" (¶9). Case law supported Mullen's contention that he was entitled to recover for his emotional distress in witnessing his wife's death. Yet the precise issue was how such damages were treated under the UM policy. "Here, the emotional distress Mullen suffered by witnessing his wife's death arose from her bodily injury. Undoubtedly, this distress was severe. Nonetheless, American Family has already exhausted [his wife's] 'each person' limit and is not required to provide coverage for any other damages that arose from her death" (¶14).

UM Coverage - Murder - Vehicular "Use"

Van Dyn Hoven v. Pekin Ins. Co., 2002 WI App 256 (filed 17 Sept. 2002) (ordered published 30 Oct. 2002)

In June 2002 Shanna Van Dyn Hoven was jogging when Kenneth Hudson approached her in his truck, "pushed" her into the vehicle, stabbed her to death, and fled in the truck. Her body was left at the scene. Van Dyn Hoven's parents and her estate filed this action against the parents' insurer, alleging that their uninsured motorist (UM) coverage extended to their damages. The circuit court entered judgment in favor of the insurer. First, there was insufficient evidence that Hudson was uninsured. Second, there was no causal nexus between Van Dyn Hoven's injuries and Hudson's "use" of his truck, as the term "use" is understood in the policy.

The court of appeals, in an opinion written by Judge Peterson, affirmed. Case law construes the term "use" to mean "'the use of a vehicle as such and does not include a use which is completely foreign to a vehicle's inherent purpose'" (¶8). Since Hudson's "actions were not consistent with the inherent use of a vehicle" (¶12), there was no UM coverage. In a footnote, the court distinguished case law involving injuries caused by the "force from the vehicle's movement" (n.2).

Property

Unmarried Cohabitants - Unjust Enrichment - Real Estate

Ulrich v. Zemke, 2002 WI App 246 (filed 19 Sept. 2002) (ordered published 30 Oct. 2002)

Glenn Zemke and Susan Ulrich lived together from 1989 to 1997, during which time they had two children together. They had comparable incomes and separate checking accounts, they shared living expenses, and they acquired three parcels of land, designated "Homestead," "Buttercup," and "Badger." Ulrich requested that the circuit court partition the parties' real and personal property based on unjust enrichment. The court awarded Ulrich Homestead and Buttercup but ordered her to make an equalization payment of $36,000. It rejected her unjust enrichment claim as to Badger.

The court of appeals, in an opinion authored by Judge Roggensack, affirmed in part and reversed in part. Under Wisconsin law, "[o]nce a party demonstrates the existence of a joint enterprise, equity principles demand that the parties be treated fairly and all assets accumulated as part of the joint enterprise be divided accordingly. A division of property otherwise would allow one party to benefit by retaining an unreasonable amount of property acquired through the efforts of both" (¶11). The court of appeals held that the circuit court thus erred when it analyzed Ulrich's unjust enrichment claim "asset by asset" (¶12).

Functioning as a "family unit," the two "maintained a house, raised four children, shared living expenses, and continually acquired real and personal property" (¶14). Indeed, Ulrich's "contribution to the relationship enabled Zemke to purchase Badger" (¶15). The court remanded the case for the purpose of dividing Badger. It also remanded for a recalculation of the equalization payment that will take into account the value of Badger (¶19).

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