Wisconsin Lawyer
Vol. 85, No. 6, June 2012

• Appellate Procedure
• Arbitration
• Consumer Law
• Criminal Procedure
• Insurance
• Public Records Law
• Sexually Violent Persons
• Torts
• Worker's Compensation

Appellate Procedure

Traffic Forfeiture Cases Appealed to Court of Appeals – Docket Entries as Final, Appealable Dispositions

Village of McFarland v. Zetzman, 2012 WI App 49 (filed 15 March 2012) (ordered published 25 April 2012)

Zetzman was convicted in municipal court of operating a motor vehicle while intoxicated and with a prohibited blood-alcohol concentration. She sought de novo review in the circuit court. The circuit court affirmed the convictions. The circuit court did not reduce the decision to a signed written judgment or order but orally rendered the decision and then recorded it in the circuit court docket entries. Zetzman appealed based on the circuit court docket entries. The question before the court of appeals was whether Zetzman could appeal her traffic forfeiture disposition to the court of appeals based on a circuit court docket entry rather than on a written final order.

The general rule is that a judgment or order must be "filed" in the circuit court before it may be appealed as a matter of right; this implies that the judgment or order must have been reduced to writing before it is considered final. See Wis. Stat. § 808.03(1)(a). The remaining subsections of this statute provide exceptions to the general rule, treating as final recorded docket entries without written decisions in three categories of cases: small claims actions, forfeiture traffic cases "prosecuted in circuit court," and municipal ordinance violation cases "prosecuted in circuit court" (¶ 5). See also Wis. Stat. § 808.03(1)(b)-(d).

In a per curiam opinion, the court of appeals held that "a traffic forfeiture or municipal ordinance case has been 'prosecuted in the circuit court' either if it originated there, or if it was appealed there following municipal court proceedings. Therefore, docket entries resolving traffic forfeiture and municipal ordinance cases serve as final, appealable dispositions within the meaning of Wis. Stat. § 808.03(1). This also means that docket entries will trigger the time to appeal in these cases, without regard to whether any written order is also entered" (¶ 11).

In the present case the appellant sought review of a circuit court decision in a traffic forfeiture appeal from municipal court proceedings. Accordingly, no written order was required for the court of appeals to obtain jurisdiction (see id.).

Arbitration

Intermediate Court Review – Procedures

Marlowe v. IDS Prop. Casualty Ins. Co., 2012 WI App 51 (filed 13 March 2012) (ordered published 25 April 2012)

The parties agreed to arbitrate a dispute concerning uninsured motorist coverage in a policy issued to the Marlowes. They disagreed, however, on the scope of discovery permitted by the arbitration agreement. The arbitrators ruled that the parties were entitled to the full sweep of discovery permitted in Wisconsin civil litigation. The Marlowes refused to comply and filed a declaratory action with the circuit court, which granted their request to limit discovery.

The court of appeals reversed in an opinion written by Judge Peterson. "Whether intermediate rulings may be challenged in court before a final award is made appears to be an issue of first impression in Wisconsin" (¶ 8). Relying on persuasive federal precedent (see ¶ 9), the court held "that an arbitration panel's intermediate decisions are generally not immediately reviewable. If every individual decision of an arbitration panel were separately and independently reviewable by a circuit court, the advantages of arbitration would become meaningless, as both litigation costs and delay would increase significantly."

Parties "must wait and challenge that decision by seeking to vacate the panel's final award, pursuant to Wis. Stat. § 788.10" (¶ 18). The court declined to rule on whether exceptions existed in cases of "exigent circumstances" (id. n.7).

A second ground also warranted reversal. "United States Supreme Court precedent confirms that procedural questions are for the arbitrator to decide. The Court has explained that arbitrators, not courts, have authority to decide procedural questions that grow out of the parties' dispute and bear on its final disposition" (¶ 23). The court of appeals distinguished other cases based on the arbitration agreement at issue. Here the agreement provided that "local rules" govern the scope of discovery; the case law provides that "the panel was entitled to interpret the phrase and determine the scope of discovery it allowed" (¶ 27).

Consumer Law

Wisconsin Consumer Act – Fee-Shifting Provision – Prevailing Parties

Credit Acceptance Corp. v. Woodard, 2012 WI App 43 (filed 6 March 2012) (ordered published 25 April 2012)

In a deficiency action, Credit Acceptance Corp. (Credit Acceptance) sought recovery under a retail installment contract between itself and Woodard. After making one payment on her account, Woodard fell into default and made no more payments. Credit Acceptance subsequently repossessed Woodard's vehicle, which was the collateral underlying the contract. A default judgment was entered against Woodard in the deficiency action.

Woodard filed a motion to vacate the judgment, arguing that the repossession of her vehicle was improper under Wis. Stat. section 425.105(1) (part of the Wisconsin Consumer Act (WCA)) because proper notice of right to cure default was not given and the judgment against her was void. The court held a hearing on the motion but did not decide the merits of the motion. Rather, after a discussion in chambers, the parties stipulated on the record to reopening the case without admissions of liability. The circuit court vacated the default judgment and reopened the case. The circuit court allowed Credit Acceptance to withdraw its complaint, over Woodard's opposition, and dismissed the case without costs and without prejudice.

Woodard then filed a motion seeking attorney fees and costs pursuant to Wis. Stat. section 425.308, the fee-shifting provision of the WCA. At the hearing on the motion, the circuit court denied Woodard's motion, stating that she was not a "prevailing party" entitled to attorney fees and costs under the WCA because there was no finding that Credit Acceptance violated the WCA. In a decision authored by Judge Kessler, the court of appeals affirmed.

Section 425.308 codifies a fee-shifting provision allowing a customer who has prevailed in an action arising from a consumer transaction to recover a reasonable amount for attorney fees. In this case Woodard contended that she is a prevailing party in accordance with the fee-shifting provision of the WCA because she received a benefit when the default judgment against her was reopened and dismissed. Credit Acceptance argued that, because the circuit court did not find a violation of the WCA, Woodard is not a prevailing party for purposes of determining attorney fees and costs.

The court of appeals concluded that because the circuit court did not find a violation of the WCA by Credit Acceptance, the circuit court did not erroneously deny Woodard's motion for attorney fees (see ¶ 5). See Community Credit Plan Inc. v. Johnson, 228 Wis. 2d 30, 596 N.W.2d 799 (1999). Of significance to the appellate court was the fact that the judgment was reopened pursuant to a stipulation of the parties in which they specifically agreed that neither would admit liability of any sort. Therefore, the significant benefit received by Woodard in the circuit court did not result from a violation of the WCA by Credit Acceptance (see ¶ 13).

Criminal Procedure

Structural Errors – Mandatory Reversal – Harmless Error Rule Inapplicable

State v. Travis, 2012 WI App 46 (filed 14 March 2012) (ordered published 25 April 2012)

In this case, all parties (the court, the prosecutor, the defense attorney, and defendant Travis) were under the erroneous impression that the statute under which the defendant was prosecuted carried a five-year mandatory minimum sentence. The defendant entered a guilty plea, and the court imposed a sentence of eight years' confinement followed by 10 years' extended supervision. Postconviction counsel discovered the error and brought a motion seeking resentencing; counsel argued that the defendant's due process rights were violated because the crime for which he was prosecuted and convicted did not actually carry a mandatory minimum sentence as everyone had thought. The circuit court acknowledged the error, applied a harmless-error analysis, and denied the request for resentencing.

In a decision authored by Judge Reilly, the court of appeals reversed. The court began its analysis by distinguishing two types of constitutional errors at trial: trial errors and structural errors. "Trial errors are subject to harmless error analysis while structural errors require automatic reversal. A structural error is a 'defect affecting the framework within which the trial proceeds, rather than simply an error in the trial process itself.' Such errors infect the entire trial process and render it fundamentally unfair. Structural errors 'seriously affect the fairness, integrity or public reputation of judicial proceedings and are so fundamental that they are considered per se prejudicial'" (¶ 13) (citations omitted).

In this case, the court of appeals concluded that the error was structural, and it remanded the case to the circuit court for resentencing. "The error was not an isolated mistake that affected just a discretionary decision of the circuit court. The error infected the charging of Travis; the error infected the plea negotiations; the error infected Travis's discussions with his trial counsel; the error infected the plea hearing; and the error infected the sentencing of Travis, where all participants acted with the misunderstanding that the starting point for Travis was five years in prison" (¶ 23). In short, the error affected the entire framework within which Travis was prosecuted (see id.).

Moreover, the error affected the fairness, integrity, and public reputation of the judicial proceedings. Said the court, "[a]ll participants operated under the assumption that Travis was going to prison for at least five years, when in reality there was no mandatory minimum sentence required. It is impossible to measure the breadth of the error. The error affected the State's charging decision, Travis's plea decision, communications and negotiations between the State and Travis, and the circuit court's basic assumptions as to Travis's sentence. Travis's due process right to be sentenced upon accurate information was violated. As the pervasive error seriously affected the fairness and integrity of Travis's sentence, we hold that it was a structural error requiring a reversal of the circuit court's denial of resentencing" (¶ 24).

Insurance

Leased Vehicles – Uninsured Motorist Coverage

Brown v. Tokio Marine & Nichido Fire Ins. Co., 2012 WI App 45 (filed 21 March 2012) (ordered published 25 April 2012)

The plaintiffs were seriously injured when their car was involved in a head-on collision with another vehicle. The other car's driver had leased his car from Nissan but violated the lease's terms when he failed to maintain a liability policy. Because the tortfeasor was uninsured, the plaintiffs sued Tokio Marine, which insured Nissan. The circuit court granted summary judgment in favor of Tokio Marine, finding that the policy excluded coverage for lessees but also concluding that Nissan was liable for certain statutory minimum coverage amounts.

The court of appeals affirmed in an opinion written by Judge Reilly. The policy clearly excluded coverage for lessees (see ¶ 11). Moreover, the so-called "Wisconsin Changes endorsement" did not constitute an exception to the exclusion (see ¶ 13). The plaintiffs also contended that Wisconsin's omnibus-coverage statute, Wis. Stat. section 632.32(3), mandates coverage regardless of the policy. The court held that the Wisconsin Changes endorsement incorporated the omnibus-coverage statute into the Tokio Marine policy, but that this also included the exclusions (¶ 15). "Section 632.32(6) does not prohibit an automobile insurance policy from excluding coverage for leases" (¶ 16).

Finally, Nissan conceded that it violated Wis. Stat. section 344.51(1m) by failing to file a certificate of insurance when it leased the car to the tortfeasor (see ¶17). The statute mandates coverage in the amounts of $25,000 per person and $50,000 per accident, for which Nissan was liable (see ¶ 18).

Public Records Law

Confidentiality – Wis. Stat. Chapter 51 Treatment Records

La Crosse Tribune v. La Crosse Cnty. Circuit Ct., 2012 WI App 42 (filed 15 March 2012) (ordered published 25 April 2012)

In 1985, Stanley was found not guilty by reason of mental disease or defect on three homicide charges and committed to institutional care. In 2009, the court ordered that Stanley be conditionally released to the community. Accordingly, the Wisconsin Department of Health Services (DHS) prepared a conditional release plan, addressing treatment and services, which was filed with the circuit court under seal, as required by Wis. Stat. chapter 51 (the Mental Health Act). A local paper, the La Crosse Tribune, requested public release of any sealed records. The circuit court denied this and several related requests.

The court of appeals affirmed in an opinion authored by Judge Blanchard. First, the court held that the Tribune's request related to only three of the four sealed documents. Essentially these documents were the original conditional release plan and the order for placement approving that plan (see ¶ 21). "[W]e conclude, based on the plain language of Wis. Stat. § 51.30(1), (4), and (7), as well as of relevant provisions of Wis. Stat. ch. 971, that the court properly sealed the conditional release plan as a 'treatment record' and properly denied the Tribune's subsequent request to unseal it" (¶ 35). The so-called "litigation exception" found in Wis. Stat. section 905.04(4)(c) did not strip Stanley's records of their confidentiality.

The circuit court's order of placement, however, was not a treatment record under section 51.30(1)(b), "except for the inclusion of the proposed new residential address for Stanley and a phone number for that address on the order.... The circuit court was not in any sense tasked with providing Stanley with a service that could be deemed treatment. If Stanley means to argue that the order of placement was created in the course of providing services, he would be mistaken" (¶ 57). Nonetheless, Stanley's address and phone number were confidential because this information was taken from the treatment plan and related to his "residential services" (see ¶ 59). The information may be redacted from the order.

Finally, the court of appeals refused to grant the Tribune's motion for costs and fees based on the circuit court's refusal to release these public records. "[W]e conclude that the remedies in § 19.37 are available only to a party who has filed, or requested a district attorney or the attorney general to file, an original mandamus action. See § 19.37(1)(a) and (b). Without addressing any other aspect of any arguments submitted to us on this issue, we conclude that the remedies in § 19.37 are not available to the Tribune because it never filed, or requested the filing of, an original mandamus action" (¶ 60).

Sexually Violent Persons

Supervised Release – Conditions

State v. Thiel, 2012 WI App 48 (filed 14 March 2012) (ordered published 25 April 2012)

Thiel spent more than a decade residing in a state facility, to which he was committed under Wis. Stat. chapter 980 as a sexually violent person. In 2009, the court ordered that he be subject to supervised release and that the Department of Health Services (DHS) prepare a plan. The circuit court approved that plan subject to several objections by Thiel, who appealed.

The court of appeals affirmed in an opinion written by Judge Reilly. First, the issues were ripe for appeal even though Thiel was not alleged to have violated the rules. "Thiel is not challenging how Rules 13 and 16 would be applied to him – he is instead arguing that the State has no statutory authority to impose these rules" (¶ 7). Moreover, a "party need not wait for actual harm to occur for a claim to be ripe" (¶ 8).

The court then turned to the two rules challenged by Thiel. "Rule 13 of the supervised release plan states that Thiel 'shall abide by all rules of any detention, treatment or correctional facility in which [Thiel] may be confined.' Thiel argues that this rule unlawfully gives DHS the power to hold him in a county jail or a prison. Thiel's argument fails, as Rule 13 does not address where DHS may detain Thiel or under what circumstances; it simply requires Thiel to abide by all rules of whatever detention, treatment, or correctional facility he may find himself in" (¶ 9).

Rule 16 subjected Thiel to polygraph examinations as provided by Wis. Stat. section 51.375(2). Thiel's objection was that the polygraph would be performed at the Sand Ridge treatment facility, which was more than two hours from his home. The circuit court properly rebuffed Thiel's objections. "The use of lie detectors to treat sex offenders does not violate due process" (¶ 12). Notice must be provided pursuant to regulations. "The reason DHS requested that the lie detector test be given at Sand Ridge instead of a location closer to Thiel's home is because the State's polygraph expert is located at Sand Ridge" (id.).

Torts

Airplane Defects – Statute of Repose

Estate of Grochowske v. Romey, 2012 WI App 41 (filed 14 March 2012) (ordered published 25 April 2012)

Three men were killed in an airplane crash. Their estates brought this wrongful-death action against Precision Airmotive Corp. and others after the determination was made that the crash was caused by the failure of a part manufactured by Precision in 1973. The circuit court granted summary judgment in favor of Precision, concluding that the action was barred by the statute of repose for actions against aircraft manufacturers under the General Aviation Revitalization Act of 1994 (GARA).

The court of appeals affirmed in an opinion written by Judge Neubauer. "Under GARA, no civil action may be brought against a manufacturer for death, injury or property damage caused by an accident involving a general aviation aircraft and its components or parts if the accident occurred more than eighteen years after the initial delivery of the aircraft or the installation or addition of the component or other part" (¶ 11).

GARA also contains a "fraud exception" (see id.). Although the estate carefully directed its claims at Precision's component maintenance manual, the court held that GARA applied to the manuals "produced" by a component's manufacturer as well as to the components themselves (see ¶ 20).

Similarly, the court rejected the argument that the manuals are somehow a separate product that falls outside GARA. "By enacting GARA, Congress intended to prevent claims against manufacturers for actions they took more than eighteen years ago. See H.R. Rep. 103-525(I). The fuel servo at issue in this case was manufactured more than thirty years prior to the accident, and the decision to use Loctite was made more than twenty years prior to the accident. We agree with the above decisions holding that the statute of repose applies to an attempt to sue a manufacturer for a design flaw in a component – ostensibly not for the design flaw in the component, but for the failure of the manufacturer's manual to warn of, or adequately correct the flaw. The manual is not a separate product giving rise to a separate cause of action; it is evidence used to support failure to warn and instruct theories involving the manufacturer's allegedly defective fuel servo. Allowing the plaintiffs to use artful pleadings to bypass GARA's protections and sue Precision for actions it took in its capacity as a manufacturer outside of the repose period would undermine the legislative intent behind the statute of repose" (¶ 29).

Finally, the record failed to reveal a disputed issue of material fact on the fraud exception. Summary judgment was appropriately granted.

Immunity – Social Workers – Emergency Detentions

Estate of Hammersley v. Wisconsin County Mut. Ins. Co., 2012 WI App 44 (filed 6 March 2012) (ordered published 25 April 2012)

Hammersley, who was mentally ill, killed his mother and his nephew. A day earlier a police officer consulted with a social worker, Pabich, about Hammersley's "erratic behavior." Based on Pabich's advice, the officer did not initiate an emergency detention of Hammersley. The victims' estates sued Pabich and others. The circuit court granted summary judgment in favor of Pabich because of the immunity provision set forth in Wis. Stat. section 51.15(11).

The court of appeals affirmed in an opinion authored by Judge Mark Mangerson. "We are asked to decide whether licensed clinical social workers assisting law enforcement officers with emergency detention decisions under Wis. Stat. § 51.15 are immune from civil liability for actions taken in good faith" (¶ 2).

The court rejected a narrow interpretation that would have led to absurd and unreasonable results. "The ultimate determination whether to detain an individual rests with law enforcement officials, but they are not prohibited from consulting others when making this important decision. According to Pabich, law enforcement officers in the Oconto County Sheriff's Department generally do not possess the education, experience, and specialized training of licensed clinical social workers. We suspect this is true throughout the state. It would be absurd to immunize the officials responsible for formally taking a person into custody, but not the people upon whose advice they regularly rely. Further, trained mental health professionals should not be discouraged, because of civil liability, from providing predetention advice to officers. To do so increases the risk of inaccurate assessments" (¶ 20).

The opinion distinguishes other cases and addresses myriad arguments proffered by plaintiffs, including whether Pabich acted in good faith, as is presumed absent "clear and convincing evidence" to the contrary (¶ 27). The court discussed the meaning of good faith in relation to Wis. Stat. chapter 51 reviews by social workers, who in such cases are asked to "predict the future"(¶ 34). There was no claim that Pabich acted dishonestly or that she was fraudulent or deceitful (see ¶ 31). The court was unpersuaded by an expert report that severely criticized Pabich's review.

In short, the undisputed facts supported the grant of summary judgment in Pabich's favor. "In light of these undisputed facts, we conclude that no reasonable fact-finder could infer a lack of good faith. This was not an instance in which Pabich merely went through the motions; she asked relevant questions, some repeatedly, and used the information given to draw a conclusion about whether Hammersley was dangerous. Pabich acknowledged that her conclusion would have been different had she known the details of Hammersley's domestic abuse arrest. However, her good faith cannot be impugned, or the adequacy of her investigation called into doubt, by the failure of others to disclose that information in response to her questioning" (¶ 38).

Worker's Compensation

Injuries Sustained in "Physical Well-Being" Activities – Voluntary Activities

City of Appleton Police Dep't v. LIRC, 2012 WI App 50 (filed 22 March 2012) (ordered published 25 April 2012)

An Appleton police officer injured his shoulder while performing push-ups in his basement; at the time, he was off duty but was preparing for a mandatory physical fitness test that required him to perform push-ups. If he received a score of good or excellent on the fitness test, he would receive a lump-sum cash premium and would become eligible for a retirement bonus incentive; if he failed to maintain a score of adequate or better, or failed to participate in the test, he could be subject to disciplinary action. The fitness testing, which is conducted twice per year, is provided for in a collective bargaining agreement.

The Labor and Industry Review Commission (LIRC) awarded the officer worker's compensation benefits after concluding that his injury occurred in the course of his employment. See Wis. Stat. § 102.03(1)(c). The circuit court upheld LIRC's decision. Applying great-weight-deference review to LIRC's interpretation of the statute, the court of appeals affirmed.

Section 102.03(1)(c)3. provides that employees are not performing services in the course of employment when engaged in activities "designed to improve the physical well-being of the employee" when those activities are voluntary and uncompensated. LIRC interpreted this statute to conclude that the officer's push-ups were not voluntary. In a decision authored by Judge Blanchard, the court of appeals held that LIRC's interpretation was reasonable.

Among other things, the appellate court noted that the officer was injured "while engaging in precisely the type of activity he was required to be tested and scored on – successive push-ups – for the purpose of preparing for the test. Indeed, it is difficult to imagine how an employee would reasonably prepare for the upper body strength component of the required physical fitness test without practicing or performing successive push-ups at times before each required test. It is true that the City did not direct the officer to perform any push-ups at the moment of his injury, and therefore it might be said that he 'voluntarily' chose the particular time and place to perform the push-ups. However, failing to prepare in precisely this manner would have subjected him to the risk of discipline, and in this sense it was reasonable for the Commission to conclude that his activity at the time of injury was not voluntary within the meaning of the statute" (¶ 25).

Furthermore, the officer was required under the terms of the collective bargaining agreement to participate in a physical fitness program for the six-month period preceding each physical fitness test. Said the court, "it is reasonable to conclude that he was complying with this requirement at the moment he was injured. Although we need not decide whether the Commission's decision would be reasonable if the officer was required to participate only in the physical fitness program, and not the physical fitness test, the fitness program requirement supports the reasonableness of the Commission's decision" (¶ 27).

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