Constitutional Law

Anti-Combination Laws – Cemeteries-Funeral Homes – Rational Basis Review

Porter v. State, 2017 WI App 65 (filed 29 Aug. 2017) (ordered published 27 Sept. 2017)

HOLDING: Statutes prohibiting joint ownership of cemeteries and funeral homes were not facially unconstitutional on equal-protection and due-process grounds.

SUMMARY: The plaintiffs challenged the constitutionality of statutes prohibiting the joint ownership of funeral homes and cemeteries. See Wis. Stat. §§ 157.067(2), 445.12(6). The circuit court upheld the statutes, granting summary judgment to the state.

The court of appeals affirmed in an opinion authored by Judge Stark. It was undisputed that the anti-combination laws do not affect any fundamental right or disadvantage a suspect class. The parties and the court “devoted significant time and attention” to what level of “rational basis scrutiny” was appropriate. The court declined to decide the issue because under either “traditional rational basis review or rational basis with bite” the plaintiffs failed to prove the statutes were unconstitutional beyond a reasonable doubt (¶ 28).

Criminal Procedure

Stop and Frisk – Reasonable Suspicion for Weapons Frisk

State v. Nesbit, 2017 WI App 58 (filed 9 Aug. 2017) (ordered published 27 Sept. 2017)

HOLDING: An officer had reasonable suspicion to conduct a weapons frisk.

SUMMARY: While Nesbit and a friend were driving on an interstate highway, their car ran out of gas. With a red gas can in hand, they were walking along the shoulder of the expressway when a state trooper activated his vehicle’s lights and pulled up behind them. The trooper later explained that he pulled up out of concern for their safety and because walking along the highway is illegal.

After what both parties conceded was “perfectly normal” conversation, the trooper told the men he would give them a ride to the gas station and back – an option that was more of a command than a choice given that he informed them walking on the expressway is illegal. Before the men entered the squad car, the trooper asked each if they had any weapons. According to the trooper, Nesbit’s friend indicated he had no weapons, and his demeanor remained unchanged following the question; “Nesbit, however, – who had earlier been talking, pointing, and otherwise unremarkable – ‘all of a sudden’ became ‘very deflated’ and shook his head slightly in the negative” (¶ 2).

The trooper stated that it is department policy to frisk anyone who gets into a squad car. Thus, he planned to search both individuals no matter how they answered the questions. However, in light of Nesbit’s noticeable change of attitude, the trooper chose to search him first. He ordered Nesbit to stand between him and the friend to mitigate any potential danger. The frisk revealed that Nesbit had a loaded gun on his left hip.

In a prosecution for being a felon in possession of a firearm, Nesbit moved to suppress the weapon, claiming that the trooper did not have reasonable suspicion to believe he was armed and dangerous and thus subject to a weapons frisk. The circuit court denied the motion, and the defendant thereafter entered a guilty plea.

In a decision authored by Judge Hagedorn, the court of appeals affirmed. The court began its analysis by noting that it was not bound by the trooper’s subjective reasons for the search, and that the frisk was going to happen anyway pursuant to department policy was not controlling. “Rather, the question is whether the search itself was constitutionally permissible as an objective matter, not whether the officer was subjectively proceeding under a constitutionally permissible theory” (¶ 9).

Acknowledging that this was a “close case,” the court believed that “this case comes down to one key fact and the rational inferences to be drawn therefrom in light of additional facts” (¶ 10). The key fact was Nesbit’s response to the question of whether he had any weapons on his person.

Said the court, “[o]ne who reacts to a question by quieting down, becoming deflated, and responding demurely does so for a reason. A reasonably prudent officer seeing this response to a question about weapons would be suspicious and wonder if the answer was truthful. It is well established that an abnormal nervousness or unusual response to interaction with law enforcement is a relevant factor in whether a person is armed and dangerous. Moreover, possible deception or untruthfulness is also one of many factors that may legitimately contribute to a reasonable suspicion” (¶ 12) (citations omitted).

It was clear from the trooper’s testimony that he found Nesbit’s response to be suspicious and he took precautionary measures in choosing to search Nesbit first. Moreover, the trooper was alone and was going to escort two individuals. “With no protection from a second law enforcement officer and no bulletproof glass separating [the trooper] from his passengers, a reasonably prudent officer would be concerned for his or her safety” (¶ 14). For all these reasons, the court concluded that the trooper’s search was justified by specific, articulable facts supporting an objectively reasonable suspicion that Nesbit was armed and dangerous.

In a footnote, the court noted that “we are not announcing a bright-line rule that it is per se reasonable to conduct a frisk for weapons every time an officer escorts a person in his or her squad car. Our decision must be based on the unique facts and circumstances of this case” (¶ 15 n.2).

Operating While Intoxicated – Investigative Detention – Arrest

State v. Wortman, 2017 WI App 61 (filed 23 Aug. 2017) (ordered published 29 Sept. 2017)

HOLDING: The detention of the defendant during an operating while intoxicated (OWI) investigation was a lawful investigative detention based on reasonable suspicion that criminal activity was afoot.

SUMMARY: A Fond du Lac County deputy sheriff (the deputy) responded to a call about a truck in a ditch. After arriving at the scene, the deputy observed a truck that had crossed the center line, went through a driveway, and crashed into a ditch. The deputy observed defendant Wortman walking away from the scene, and so he activated his patrol lights and pulled his squad car in front of Wortman, blocking Wortman’s path. The deputy asked Wortman if he was the driver of the truck, how the accident occurred, and if Wortman were injured. Wortman replied that he was the driver, that he had fallen asleep while driving, and that he was not injured. Wortman’s eyes were glassy, and the deputy smelled alcohol. Wortman said he had consumed a “king” can of beer.

The deputy told Wortman to get in the squad car so they could return to the scene of the accident approximately 100 yards away. Wortman did not object and rode in the backseat of the squad car. A check of Wortman’s driving record revealed that his license was revoked and that he had eight prior OWI convictions. The deputy administered field-sobriety tests, which Wortman failed, and the deputy formally placed Wortman under arrest. Until this time Wortman had not been handcuffed or frisked.

Wortman argued that the activation of the squad lights, the blocking of his path by the squad car, the invitation that he get into the back of the squad car, and the taking of his driver’s license all equated to being in custody and therefore unlawfully arrested. In a decision authored by Judge Reilly, the court of appeals disagreed, holding that all of the officer’s actions up to the point of formal arrest were performed as part of an investigatory stop (see ¶ 5).

Given the circumstances as described above, a reasonable person in Wortman’s situation would not have believed he was under arrest during the investigatory stop (see ¶ 10). This is true even though he was transported in a squad car the very short distance back to the accident scene (see ¶ 9). See Wis. Stat. § 968.24; see also State v. Quartana, 213 Wis. 2d 440, 570 N.W.2d 618 (Ct. App. 1997). The deputy had reasonable suspicion that criminal activity (OWI) was afoot when he detained Workman during the investigatory stop (see ¶ 11). Accordingly, the circuit court properly denied Wortman’s motion to suppress evidence acquired during the stop.

Wortman also claimed that the $1,524 fine the circuit court imposed was not authorized by the OWI penalty statutes. The appellate court disagreed. At the time of the crime, the ninth violation of the OWI statutes was classified as a Class G felony and the fine imposed was within the penalties authorized by statute for Class G felonies (see ¶ 15).

Warrantless Entry of Premises – Exigent Circumstances – Preventing Destruction of Evidence

State v. Torres, 2017 WI App 60 (filed 30 Aug. 2017) (ordered published 27 Sept. 2017)

HOLDING: The warrantless entry of the defendant’s residence was lawful under the exigent-circumstances exception to the warrant requirement.

SUMMARY: Officers were dispatched to a duplex for a call of “narcotics in progress.” At the duplex, they spoke on the porch with the complainant, K.L., who lived in the lower unit. K.L. told the officers an odor of marijuana was “coming into” her unit from the upper unit and that an “underage party” was going on up there while defendant Torres’s mother and her boyfriend were out of town. Inside K.L.’s unit, the officers smelled the odor of burned marijuana. K.L. told the officers that several individuals had already “run out of” the upper unit, and she believed it was because they had either heard her call her landlord about the situation or heard her tell her husband she was calling the police.

Hearing footsteps coming down the steps from the upper unit, the officers confronted A.S. fleeing the upper unit out of the porch door. A.S. told the officers that Torres lived in the upper unit, offered to get Torres for them, and then turned around and proceeded back up the stairs to the upper unit. The officers followed and saw A.S. dart into the dining room of the upper unit. Before entering the upper-unit stairwell and while ascending the stairs, the officers smelled marijuana.

Ultimately, they entered the upper unit, where they discovered evidence of various crimes, leading to charges being filed in this case. The circuit court denied Torres’s motion to suppress this evidence, and he was ultimately convicted. In a majority decision authored by Judge Gundrum, the court of appeals affirmed.

As stated by the court, “[t]he issue for us to decide is whether the law enforcement officers lawfully entered the stairwell leading to the upper unit of the duplex. Torres contends the warrantless entry was unlawful because when the officers entered they did not have probable cause to believe the residence contained evidence of a crime and exigent circumstances did not exist. We disagree” (¶ 7).

The court concluded that the unmistakable odor of marijuana coming from the upper unit provided a fair probability that contraband or evidence of a crime would be found there (see ¶ 9). Further, on the facts as described above, there were exigent circumstances (preventing the destruction of evidence) that justified the officers’ warrantless entry. The smell of burned marijuana “itself indicated evidence was being destroyed through the process of burning” (¶ 14). There was also a significant risk that if the officers had permitted A.S. to proceed up the stairs unaccompanied, he would have engaged in the destruction of evidence, perhaps assisted by others (see ¶ 15).

In State v. Hughes, 2000 WI 24, 233 Wis. 2d 280, 607 N.W.2d 621, the supreme court held that exigent circumstances exist when there is a strong odor of marijuana emanating from a residence and occupants simply become aware of police outside the door. “With A.S. turning around and beginning to head back up the stairs, both of those factors are present in this case. Here, however, we also have the added factor that A.S. was in the process of attempting to flee from the unit from which the marijuana odor was emanating, even further supporting the very real concern that if permitted to go upstairs unaccompanied, he may very well destroy evidence” (see ¶ 16).

Chief Judge Neubauer filed a concurring opinion.

Search Warrants – Information Provided by Electronic Service Provider

State v. Silverstein, 2017 WI App 64 (filed 1 Aug. 2017) (ordered published 27 Sept. 2017)

HOLDING: The warrant-issuing magistrate had probable cause to issue a search warrant for the defendant’s residence, which warrant was based in substantial part on information provided by an electronic service provider.

SUMMARY: The defendant pleaded guilty to three counts of possession of child pornography. He contended on appeal that the circuit court erred in denying his motion to suppress evidence recovered from his computer after the search of his home pursuant to a warrant. Specifically, he argued that the affidavit in support of the warrant failed to state probable cause because, in his words, it was based on “the uncorroborated tip of an anonymous informant” (¶ 1).

The informant was Tumblr.com, an electronic service provider that was required by federal law to report suspected child pornography to the National Center for Missing and Exploited Children (NCMEC), which in turn provided the information to the police. The name of an individual was included as the “submitter” of Tumblr’s initial report to the NCMEC.

In a decision authored by Judge Brennan, the court of appeals affirmed. It applied the traditional criteria for evaluating the reliability of hearsay used to support a warrant (the veracity and basis of knowledge of persons supplying the hearsay information).

“We conclude, based on Wisconsin case law regarding citizen informants found in State v. Paszek, 50 Wis. 2d 619, 630, 184 N.W.2d 836 (1971), and State v. Kerr, 181 Wis. 2d 372, 381, 511 N.W.2d 586 (1994), that a tip from an ESP is properly viewed as one from an identified citizen informant, not an anonymous informant, which therefore establishes the personal reliability requirement in our case law. Additionally, the affidavit here also shows sufficient indicia of observational reliability of the ESP” (¶ 2).

“[T]he observational reliability is well established here. Not only is Tumblr required to report criminal images from blogs it hosts, its employees are in the position to see the blogs and know identifying features of the blog poster. Here its own records identified the name of Silverstein’s blog, his email address …, and his IP address” (¶ 23).

Moreover, the police corroborated the information received from Tumblr. An officer reviewed the Tumblr images and “confirmed they depicted criminal activity and verified that the email name and address were consistent with the identity of the individual who lived at the residence to be searched” (¶ 25). Accordingly, the warrant-issuing magistrate had a substantial basis for concluding that probable cause existed.

The defendant also raised a constitutional challenge to his sentence. He argued that Wis. Stat. section 939.617 violates due-process requirements of fair notice because it fails to provide clear guidance for those who enforce and apply the law and creates uncertainty about whether he would be subject to a mandatory minimum three-year sentence or could instead receive a lesser sentence.

“In State v. Holcomb, 2016 WI App 70, 371 Wis. 2d 647, 886 N.W.2d 100, this court interpreted § 939.617 and concluded that the statute’s language was ‘plain and unambiguous’ and required a mandatory minimum sentence for all defendants more than four years older than the child victims” (¶ 3). The appellate court found Holcomb’s holding to be dispositive of the due-process fair notice issue raised by the defendant.

Insurance

Renewed Polices – Mid-term Cancellations

LIR Invs. LLC v. Stokelbusch, 2017 WI App 63 (filed 15 Aug. 2017) (ordered published 27 Sept. 2017)

HOLDING: The circuit court properly found that a cancelled insurance policy was a reissued policy that could not be cancelled mid-term – not a new policy that could be cancelled within 60 days after issuance.

SUMMARY: Starting in June 2010, Wisconsin Mutual Insurance Co. issued a business owners policy to cover residential properties owned by LIR Investments (LIR). Over the years, LIR missed several scheduled payments, which resulted in “cancellations” and the eventual “reissue” of the policy when LIR paid up. The court described the pattern as a “long series of policy cancellations and reinstatements” (¶ 4).

The policy at issue in this case was “reissued” on Oct. 23, 2013. Less than 60 days later, on Dec. 18, 2013, Wisconsin Mutual notified LIR that it was cancelling the policy because of LIR’s history of nonpayment. LIR received a premium refund as a result. In April 2014, an LIR-owned rental property burned.

The circuit court ruled that Wisconsin Mutual violated Wis. Stat. section 631.36 by cancelling the policy “midterm,” as prohibited by the statute absent certain conditions not present here. Wisconsin Mutual had claimed that the October 2013 policy was new and thus could be cancelled within 60 days after issuance.

The court of appeals affirmed in an opinion authored by Judge Kessler. The court agreed that the policy in question was a “renewed” policy, not a new policy. The trial judge had not found “renew” and “reissue” to be synonymous (see ¶ 15). The insurer offered no authority to support its contention that a reissued policy is the formation of a new contract after a break in coverage while a renewed policy is a continuation of one already in existence (see ¶ 16).

“If Wisconsin Mutual wished to create a ‘new’ contract,’ it easily could have made that clear on each new document.… Nothing in the record supports the claim that Wisconsin Mutual’s failure to provide clear notification explaining to its insured the difference between a ‘new’ and a ‘reissued’ or ‘renewed’ policy will cause the collapse of the insurance industry” (¶ 17).

The court also rejected the contention that legislative intent behind Wis. Stat. section 631.36 supported a distinction between reissuance and renewal (see ¶ 18). “Clearly the legislature intended to prohibit midterm cancellations absent an unforeseeable change in risk” (¶ 20).

Real Property

Mortgages – Homestead – Foreclosure

U.S. Bank Nat’l Ass’n v. Stehno, 2017 WI App 57 (filed 30 Aug. 2017) (ordered published 27 Sept. 2017)

HOLDING: Homestead-property mortgages signed by the husband alone during the marriage were invalid by statute; the case was remanded for determination of equitable subrogation as to one mortgage.

SUMMARY: Wells and her then-husband, Stehno, owned homestead property as “husband and wife.” They granted a mortgage to a Chicago bank. In 2002, Wells and Stehno conveyed the property by quit-claim deed to Stehno only. Stehno took out several other mortgages on the property in his name only, including one with U.S. Bank, wrongly identifying himself as “unmarried.” Stehno and Wells divorced in 2012, Stehno failed to make monthly payments on the U.S. Bank mortgage, and the bank filed this foreclosure action in late 2013. Wells intervened, but the circuit court granted the foreclosure in a summary judgment proceeding.

The court of appeals affirmed in part and reversed in part in an opinion authored by Judge Gundrum. The U.S. Bank mortgage, and others, were void and invalid from the start under the plain language of the statute; Wells and Stehno were married, yet he alone signed the 2003 mortgage (¶ 7). See Wis. Stat. § 706.02(1). The conveyance had to be signed by or on behalf of each spouse (see ¶ 10). The court distinguished case law, including cases involving waivers of homestead protection in a prenuptial agreement.

Nonetheless, U.S. Bank had a right to equitable subrogation with respect to one of the invalid mortgages because it had paid off more than $300,000 to Associated Bank on a different mortgage. Both Stehno and Wells had signed the Associated Bank mortgage (see ¶ 26). The court remanded the case to the circuit court to determine what credit Wells should receive on about 10 years of payments made on the mortgage while the two were married (see ¶ 32).

Raze Order – Insurer – Reasonableness

Auto-Owners Ins. Co. v. City of Appleton, 2017 WI App 62 (filed 29 Aug. 2017) (ordered published 27 Sept. 2017)

HOLDING: In an action between an insurer and the city, the court rejected the insurer’s argument that a raze order violated the raze statute.

SUMMARY: A home was damaged by fire. The owners promptly notified the insurer. The city later issued a raze order, to which the insurer objected. The circuit court found that the insurer had failed to prove that the raze order was unreasonable. The insurer appealed. The court of appeals affirmed in an opinion authored by Judge Hruz.

The parties to this appeal were the insurer and the city of Appleton, and the issue was whether the city justifiably issued the raze order (see ¶ 10). See Wis. Stat. § 66.0413. The raze order stated that the home was “out of repair” and repairs could not be reasonably made (see ¶ 12). The court of appeals was unpersuaded by the insurer’s various arguments that “out of repair” did not apply to fire-damaged properties (see ¶ 17). The insurer’s construction of the statute led to “absurdity” (¶ 21).

Next, the court rejected the insurer’s argument that the city had acted arbitrarily, which the court took to mean unreasonably (see ¶ 23). The nub appeared to be the homeowners’ solicitation of the raze order (see ¶ 25). The court declined the insurer’s “invitation to hold that a raze order issued at the request of a policyholder is per se unreasonable” (¶ 30).

The court also rejected the insurer’s argument the raze order was unreasonable because it was issued less than two months after the fire. Said the court: “[T]he two key prerequisites to the issuance of a raze order – the property’s assessed value and the extent of the damage – were fixed and thus ascertainable immediately following the fire” (¶ 31).

Finally, the court rejected the insurer’s argument that the “cost of repairs” estimate, which triggers a statutory presumption, should not include costs to remediate smoke or water damage (see ¶ 33). The court’s sundry holdings are summarized at paragraph 36 of the opinion.