Criminal Procedure

Guilty Plea Hearings – No Duty to Inform Defendants About Mandatory DNA Surcharge

State v. Freiboth, 2018 WI App 46 (filed 19 July 2018) (ordered published 29 Aug. 2018)

HOLDING: Plea hearing courts have no duty to inform defendants about the mandatory DNA surcharge.

SUMMARY: At the guilty plea hearing in the defendant’s case, the circuit court failed to inform the defendant that he would be required to pay a DNA surcharge. At the time of sentencing the court imposed the surcharge. The defendant later sought to withdraw his plea. He argued that the circuit court had a duty to inform him about the surcharge at the guilty plea hearing because the surcharge is punishment and therefore a direct consequence of the plea. The circuit court denied the motion.

In a unanimous opinion authored by Judge Blanchard, the court of appeals affirmed. Recent supreme court decisions have held that 1) the “intent-effects test” is used to determine whether a sanction is punishment to which the defendant must be alerted before entering a plea (State v. Muldrow, 2018 WI 52, 381 Wis. 2d 492, 912 N.W.2d 74); and 2) the mandatory DNA surcharge is not punishment under this test (State v. Williams, 2018 WI 59, 381 Wis. 2d 661, 912 N.W.2d 373) (see ¶ 12).

As a result of these decisions, the law is now plain: “[P]lea hearing courts do not have a duty to inform defendants about the mandatory DNA surcharge, because the surcharge is not punishment and therefore not a direct consequence of the plea” (id.).

Self-Representation – Waiver of Right to Assistance of Counsel

State v. Egerson, 2018 WI App 49 (filed 17 July 2018) (ordered published 29 Aug. 2018)

HOLDING: The defendant did not clearly and unequivocally invoke the right to self-representation.

SUMMARY: Egerson was charged with stalking and several counts of violating domestic abuse injunctions as a repeat offender. He was represented by counsel. At a pretrial hearing this lawyer was permitted to withdraw from the case after he informed the court that the attorney-client relationship with the defendant was “irreparably destroyed.” The court told the defendant that he would be permitted to have another lawyer.

At that same pretrial hearing the defendant complained that the state had not turned over certain discovery materials. The court responded by informing the defendant that he was “not the lawyer of record in this case.” The court also declined the defendant’s request to “let me represent myself and have co-counsel then.” The defendant then said: “Let me represent myself and have no counsel.” The judge responded: “Better think about that one” (¶ 6).

The hearing ended shortly thereafter. New counsel for the defendant was later assigned. There was no further mention of the defendant proceeding pro se. The defendant was represented by counsel at trial and was found guilty of multiple offenses.

The defendant filed a postconviction motion seeking a new trial on the ground that the circuit court had denied him his constitutional right to self-representation. The state opposed the motion, arguing that the defendant never made a clear and unequivocal request to represent himself. The circuit court agreed with the state and denied the motion. In a unanimous decision authored by Judge Brash, the court of appeals affirmed.

Defendants who wish to invoke the constitutional right to self-representation must clearly and unequivocally inform the trial court of this decision. See Faretta v. California, 422 U.S. 806 (1975). If defendants do so, the trial court must then ensure that they have knowingly, intelligently, and voluntarily waived the right to counsel and that they are competent to proceed pro se. See State v. Klessig, 211 Wis. 2d 194, 564 N.W.2d 716 (1997).

In this case the issue was whether the defendant invoked the right to self-representation in the first place. The court of appeals concluded that he did not.

“At the time Egerson mentioned self-representation, the trial court did not engage Egerson in any questioning that tracked the Klessigcolloquy. In fact, the trial court did not appear to consider Egerson’s statements to be a request for self-representation at all; rather, its response to Egerson is indicative of an attempt to move the proceedings forward without additional interruptions. Furthermore, Egerson never broached the topic of self-representation again – at that hearing or during the rest of the proceedings related to his case” (¶ 29).

“From those facts, we cannot conclude that Egerson’s statements were a clear and unequivocal invocation of his right to self-representation. Instead, we find these facts to be more in line with those of [State v.] Darby [2009 WI App 50, 317 Wis. 2d 478, 766 N.W.2d 770]: a defendant who is disgruntled with his attorney and thus expresses an opinion that he could do a better job representing himself. These ‘occasional musings on the benefits of self-representation’ do not rise to the level of invoking the right of self-representation. As a result, there was no violation of Egerson’s right to self-representation” (¶ 30) (citations omitted).

Judicial Substitutions – “Email Volunteer System”

State v. Evans, 2018 WI App 53 (filed 5 July 2018) (ordered published 29 Aug. 2018)

HOLDING: The use of an “email volunteer system” to identify a substitute judge is lawful.

SUMMARY: An injunction hearing in a domestic violence case was scheduled before Judge A. On the day of the hearing, the respondent filed a request for substitution. Judge A said that Judge B was available “to hear this right now.” In transferring the case to Judge B, the circuit court used an “email volunteer system”: when substitutions in domestic violence cases are filed, the court administrator emails other judges and assigns the case to the first responding judge (see ¶ 3). Judge B granted the respondent’s request for a continuance, ultimately granting the injunction after the hearing was held 10 days later.

The court of appeals, in an opinion authored by Judge Kloppenburg, rejected the respondent’s argument that the email volunteer system was unlawful. Examining the pertinent statutes, the court held that they permit a chief judge to assign any circuit judge within the district. They are silent as to “method, process, or mechanism.” A chief judge therefore can “develop and adopt methods for assigning substitute judges that do not involve personal involvement of the chief judge in each assignment” (¶ 11).

The court also rejected the respondent’s contention that the email volunteer system ran afoul of SCR 70:23, which relates to a chief judge’s administrative duties. Such “nonjudicial” authority is not reviewable by the court (¶ 16).

Guilty Pleas – Factual Basis – Identity Theft

State v. Stewart, 2018 WI App 41 (filed 19 June 2018) (ordered published 25 July 2018)

HOLDING: A factual basis supported the defendant’s guilty plea to identity theft charges.

SUMMARY: The defendant pleaded guilty to two counts of identity theft. The charges arose out of his use of forged documents – two university diplomas and a Veterans Administration (VA) document attesting that his dishonorable discharge had been upgraded to a general discharge – at his earlier sentencing on child support charges. He unsuccessfully sought postconviction relief on grounds that the forged documents did not form a sufficient basis for his guilty plea to two counts of identity theft. The circuit court denied the motion.

The court of appeals affirmed in an opinion authored by Judge Brennan that found no manifest injustice in the guilty plea. The court carefully considered the reach of Wis. Stat. section 943.203, which criminalizes the unauthorized use of an entity’s identifying information (see ¶ 20). The defendant clearly lied to the presentence investigation (PSI) writer and to the court; it was his intent to present the diplomas and the VA letter as authentic (see ¶ 21).

The statute does not require “an express verbal representation from the offeror that the document is authorized” (¶ 22). The PSI writer drew the only reasonable inference when concluding that the defendant had authorization to present the documents from the universities and the VA (see ¶ 23). Moreover, the defendant sought a “value or benefit” within the meaning of section 943.203 by seeking a favorable sentence (¶ 27).

Medicaid

Records – Recoupment of Payments

Newcap Inc. v. Department of Health Servs., 2018 WI App 40 (filed 12 June 2018) (ordered published 25 July 2018)

HOLDING: The Wisconsin Department of Health Services (DHS) has statutory authority to recoup payments made to a Medicaid provider who fails to maintain records as required, but in this case the provider was not required to retain the invoices in question.

SUMMARY: Newcap operated a Medicaid-certified clinic. In 2013, the DHS conducted an audit of Newcap’s Medicaid-covered services. As a result of the audit, the DHS issued a notice of intent to recover nearly $200,000 in payments based on Newcap’s failure to retain required invoices.

Following an administrative hearing, an administrative law judge upheld the DHS’s action, a decision the DHS adopted. The circuit court reversed, reasoning that Newcap had shown that it had provided the services and was entitled to the payments, and that any errors and omissions did not justify recoupment under the statute.

The court of appeals affirmed in an opinion authored by Judge Stark. The court construed Wis. Stat. section 49.45(3)(f)1. and 2. as requiring that “(1) a provider must retain records as required by DHS; (2) DHS may audit the records it has required a provider to maintain in order to verify the actual provision of services and the appropriateness and accuracy of claims; and (3) DHS may deny a claim or recover a payment already made to a provider when it cannot verify the actual provision of services or the appropriateness and accuracy of claims based on the records DHS required the provider to maintain” (¶ 19).

In affirming the decision of the circuit court, the court of appeals applied this standard to the record facts, observing, for example, that Newcap was not required to retain certain prescription drug invoices that the DHS asserted were necessary (see ¶¶ 24, 35). Similarly, the DHS could not recoup Medicaid payments based on invalid or missing National Drug Codes (see ¶¶ 39-43).

Municipal Law

Towns – Uniform Addressing Systems

Town of Rib Mountain v. Marathon Cty., 2018 WI App 42 (filed 5 June 2018) (ordered published 25 July 2018)

HOLDING: Marathon County exceeded its authority by mandating the implementation of a uniform addressing system in all unincorporated areas of the county, without regard to whether those areas also qualified as “rural.”

SUMMARY: Marathon County enacted an ordinance mandating the creation of a uniform addressing system in the county. The intent was to assign each location a unique address that would aid emergency personnel in providing first-responder services. The ordinance stated that it would apply in the unincorporated areas of the county. Under Wisconsin law, towns are “unincorporated.” The county asserted authority to mandate the uniform addressing system under Wis. Stat. section 59.54(4) and (4m), which authorize the county board of supervisors to establish a rural naming or numbering system in towns.

The county notified the town of Rib Mountain that it would be required to rename 61 of its 202 roads. The town responded with a lawsuit against the county, seeking declaratory and injunctive relief. The town argued that the county’s authority to implement a naming or numbering system under the above-cited statutes extends only to “rural” areas in towns, rather than to all unincorporated areas of the county. The circuit court denied the town’s claims for relief, holding that the term “rural” in the statutes means “unincorporated” and was not “intended as a way of excluding urban areas” (¶ 5).

In a decision authored by Judge Stark, the court of appeals reversed the circuit court. It concluded that “the word ‘rural’ in Wis. Stat. § 59.54(4) and (4m) restricts a county’s authority to implement a naming or numbering system to ‘rural’ areas within towns. We further conclude the statutory term ‘rural’ is not synonymous with ‘unincorporated,’ but should instead be interpreted according to its ordinary and accepted meaning. Based on dictionary definitions, we conclude the ordinary and accepted meaning of the term ‘rural’ refers to areas that are characterized by comparatively lower densities of people or buildings, or areas that are characteristic of, or related to, the country – in other words, areas that are not urban” (¶ 27).

“The County thus exceeded its authority by mandating the implementation of a uniform addressing system in all unincorporated areas of the County, without regard to whether those areas also qualified as ‘rural’” (¶ 28).

On remand, the county must demonstrate which portions of the town, if any, qualify as “rural,” according to the plain meaning of that term as described above.

Said the court: “[W]e do not endeavor to establish specific factors for determining what property qualifies as rural, for purposes of Wis. Stat. § 59.54(4) and (4m). A county’s determination in that regard must be made on a case-by-case basis, in light of the unique factual circumstances presented, and keeping in mind the purposes of the relevant statutory subsection – i.e., aiding in fire protection, emergency services, and civil defense. See § 59.54(4)” (¶ 31).

“Ultimately, however, each county that chooses to establish a naming and numbering system under § 59.54(4) must establish clear, reasonable criteria for identifying ‘rural’ areas within its territory, and, pursuant to § 59.54(4m), a county may act ‘in cooperation with any town or towns’ within its jurisdiction in order to make this determination. Courts must review any challenges to a county’s criteria or their implementation by considering both the unique factual circumstances presented and the purposes of the relevant statutory subsections, so as to determine the reasonableness of the county’s conclusions” (id.).

Prisoners

Withdrawal of Prisoners’ Funds to Satisfy Unpaid Restitution – Circuit Court Authority in Certiorari Actions to Order Refunding Money Improperly Taken From Prisoner Accounts

State ex rel. Markovic v. Litscher, 2018 WI App 44 (filed 21 June 2018) (ordered published 25 July 2018)

HOLDINGS: 1) It was unlawful for the Wisconsin Department of Corrections (DOC) to withdraw earnings from a prisoner’s account to satisfy unpaid restitution in a case for which the sentence had been completed before the withdrawals. 2) The DOC possessed statutory authority to take money delivered to an inmate’s account from outside the prison to satisfy unpaid restitution in a case for which the sentence had already been completed, because doing so was for the defendant’s benefit. 3) Courts in certiorari actions have no authority to order agencies to perform specific acts, such as awarding damages or monetary relief.

SUMMARY: Markovic was convicted in 1995 of theft by fraud. In that pre-truth-in-sentencing case, the judge sentenced him to seven years in prison and ordered payment of $4,200 in restitution. Markovic completed that sentence in 2002 without ever serving parole; he remained in prison on another sentence in a different case. He was still in prison in 2016 when the DOC began taking money out of his prison account to satisfy the unpaid restitution in the 1995 case. His prison account included his prison earnings as well as money delivered to the DOC from outside the prison for his benefit.

Markovic filed an inmate complaint alleging that the DOC acted without authority when it took money out of his prison account beginning in 2016 to satisfy the restitution ordered in the 1995 case. The DOC secretary dismissed the complaint. On certiorari review, the circuit court concluded that the DOC lost its authority to take money out of the prison account to satisfy unpaid restitution after Markovic had completed his sentence in the 1995 case; as a remedy, it ordered the DOC to return the money to Markovic’s prison account. In a decision authored by Judge Kloppenburg, the court of appeals affirmed in part and reversed in part.

Wisconsin Statutes section 303.01(8)(b) provides that the DOC “may distribute [an inmate’s] earnings for … obligations … which have been reduced to judgment that may be satisfied according to law.” (Emphasis added.)

The appellate court concluded that “[the] DOC was not authorized under § 303.01(8)(b) to take Markovic’s earnings to satisfy unpaid restitution ordered in a judgment that imposed a sentence that he had completed because: the restitution ordered was a condition of parole; conditions of parole do not survive the completion of a sentence; and, therefore, the restitution ordered was not an ‘obligation’ that ‘may be satisfied according to law’ within the meaning of the statute after Markovic completed the sentence” (¶ 3).

Wisconsin Statutes section 301.32(1) provides that money “delivered to an employee of any state correctional institution for the benefit of a prisoner … may be used … under the direction and with the approval of the superintendent or warden and for … the benefit of the prisoner.” (Emphasis added.)

The court concluded that under this statute the DOC “was authorized … to take money delivered to Markovic’s prison account to satisfy unpaid restitution ordered in the judgment that imposed the sentence that he had completed, because using that money to pay restitution to the victim of his crime is ‘for [his] benefit’ within the meaning of the statute, regardless of whether the restitution ordered in the judgment is directly enforceable against him” (id.).

Case law on restitution holds that defendants “benefit” from being required to contribute toward making their victims whole, and this holding applies even in the absence of a legal obligation to pay restitution (¶ 32).

Finally, the appellate court considered whether the circuit court in this certiorari action had authority to order the DOC to return any money it improperly took from Markovic’s earnings. It concluded that the circuit court did not have such authority. “Courts in certiorari actions have no authority to order agencies to perform specific acts, such as awarding damages or monetary relief” (¶ 41).

In a footnote the appellate court indicated that it did not address in this opinion recent legislative amendments addressing the DOC’s authority to take earnings and money from prison accounts pursuant to orders for restitution going forward.

Specifically, 2015 Wis. Act 355, enacted on April 11, 2016, created Wis. Stat. section 973.20(11)(c), which provides: “If a defendant who is in a state prison or who is sentenced to a state prison is ordered to pay restitution, the court order shall require the defendant to authorize [the DOC] to collect, from the defendant’s wages and from other moneys held in the defendant’s prisoner account, an amount or percentage [the DOC] determines is reasonable for payment to victims.”

“Section 973.20(11)(c) was not in effect when Markovic was ordered to pay restitution in 1995, and therefore the circuit court was not then obligated to require Markovic to authorize DOC to take his earnings and other money for restitution” (¶ 38 n.4).

Property

Statute of Repose – “Wrongful Detention”

Mueller v. TL90108 LLC, 2018 WI App 52 (filed 24 July 2018) (ordered published 29 Aug. 2018)

HOLDING: A cause of action regarding a stolen automobile accrued at the time of the car’s wrongful detention, not the date of its wrongful taking or conversion.

SUMMARY: The plaintiffs filed this action to recover a 1938 “vintage car” worth $7 million. The car was stolen in 2001 but resurfaced in 2016 when a purchaser, working through international brokers, tried to title the car in Illinois. The defendant refused to return the car, and this action ensued. The circuit court dismissed the complaint, ruling that the cause of action accrued in 2001 under a six-year statute of repose.

The court of appeals reversed in an opinion authored by Judge Brennan that construes the phrase “wrongful detention” in the pertinent statutes of repose, Wis. Stat. sections 893.35 and 893.51. The only issue was when the cause of action accrued (see ¶ 18).

The complaint alleged that the plaintiffs demanded that defendant TL return the car, TL did not, and TL wrongfully detained the car, which TL had purchased in 2015 (see ¶ 19). The case law construing the statutes of repose does not “preclude the application of ‘wrongful detention’ to a factual situation where wrongful detention is alleged to have begun after a conversion by another party” (¶ 27).

“Based on the plain language of the statute, we conclude that the statute creates a cause of action for wrongful detention separate from the cause of action for conversion, that the time the cause of action accrues is based on the alleged wrongful act by the defendant, and that the same property can be converted by one party and wrongfully detained by another” (¶ 29). This action for wrongful detention was timely commenced within the six-year statute (see ¶ 30).

Public Records Law

Public Employees – Disclosure of Records Relating to Closed Investigation of Complaints Against Employees

Hagen v. Board of Regents, 2018 WI App 43 (filed 20 June 2018) (ordered published 25 July 2018)

HOLDING: The circuit court correctly denied a request by a U.W.-Oshkosh professor that it enjoin the university from disclosing records relating to a closed investigation of a complaint against the professor.

SUMMARY: A journalist, Nemec, made a public records request for records relating to a closed investigation of a complaint against Hagen, a professor at U.W.-Oshkosh. After locating the records and redacting from them the names of witnesses and the complainant, medical information, and unsubstantiated rumors about Hagen, the records custodian concluded that no statutory exception shielded the partially redacted records (the internal investigation was completed) and that the public’s interest in access to the records outweighed any public interest in nondisclosure (see ¶ 2).

Hagen then commenced this action under Wis. Stat. section 19.356(4) to enjoin the university from disclosing the records. Nemec intervened as a matter of right under section 19.356(4). After an in-camera inspection of the records and the parties’ submissions, the circuit court concluded that Hagen had identified no statutory or common-law exception to disclosure. The court next engaged in the balancing test and concluded that the strong public interest in disclosure applicable in a case involving investigation of a complaint about a professor at a public institution outweighed any concerns Hagen provided regarding damage to his reputation (see ¶ 4).

In a decision authored by Chief Judge Neubauer, the court of appeals affirmed. Said the court: “The records at issue here include notices of a complaint and related investigation; a summary of a meeting about that investigation; the resulting report on the complaint, investigation, and findings; the complaint itself; responses by Hagen to the complaint and findings; and recommendations and sanctions stemming from the investigation. There are also emails regarding the complaint and investigation. The circuit court correctly determined that no statutory exception exists for records of closed misconduct investigations” (¶ 6).

The appellate court rejected Hagen’s argument that the records should be exempted under Wis. Stat. section 19.36(10)(d) because they relate to what the statute refers to as “staff management planning.” In a prior decision the court held that, once the investigation into possible misconduct by a public employee is completed, paragraph (10)(d) does not exempt records of the investigation from disclosure. See Kroeplin v. DNR, 2006 WI App 227, 297 Wis. 2d 254, 725 N.W.2d 286.

Turning to the balancing test, the appellate court concluded that the circuit court’s ruling permitting disclosure of the records is consistent with Wisconsin’s law and public policy (see ¶ 9).

“Wisconsin courts have recognized the great importance of disclosing disciplinary records of public employees and officials where the conduct involves violations of the law or significant work rules … and the public’s particularly strong interest in being informed about public officials who have been derelict in [their] duty, even at the cost of possible reputational harm” (¶ 8) (internal quotations and citation omitted). “Moreover, the public has a strong interest in monitoring the disciplinary operations of a public institution” (¶ 9).

Finally, the court rejected Hagen’s challenge to the circuit court’s protective order permitting an eyes-only review of the records by Nemec’s counsel, which was done in court and without copying any documents, for purposes of briefing. Hagen relied on Wis. Stat. section 19.356(5), which states that “the authority [in this case the University] shall not provide access to the requested records during the pendency of the action.” The appellate court concluded that this statute “does not preclude the court from providing limited access to the requested records on an attorney’s eyes-only basis” (¶ 11).

Real Property

Eminent Domain – Good-faith Bargaining

Zastrow v. American Transmission Co., 2018 WI App 51 (filed 3 July 2018) (ordered published 29 Aug. 2018)

HOLDING: In a condemnation case, the condemnor, American Transmission Co. (ATC), was not required to negotiate in good faith regarding any issue other than compensation.

SUMMARY: ATC sought an easement over property owned by the Zastrows for purposes of constructing two high-voltage transmission lines. The Public Service Commission (PSC) issued ATC certificates of public convenience and necessity for the projects, after which ATC made a jurisdictional offer. The Zastrows responded with this lawsuit, contending that ATC was required to bargain in good faith over a “vegetation management plan.” The circuit court granted summary judgment in ATC’s favor.

The court of appeals affirmed in an opinion authored by Judge Stark. The pertinent statute, Wis. Stat. section 32.06(2a), “unambiguously shows that ATC was not required to negotiate in good faith with Zastrow regarding any topic other than compensation” (¶ 17). The court carefully parsed the statutes, rebuffing myriad contentions by the Zastrows. It underscored that the statute did not prohibit ATC from negotiating noncompensation issues, which may be an effective way to settle such claims. “We merely hold that the plain language of § 32.06(2a) does not require a condemnor to negotiate in good faith regarding noncompensation issues” (¶ 25).

Turning to related, ancillary issues, the court also rejected the Zastrows’ arguments that the PSC’s certificate required ATC to negotiate the vegetation issue and that ATC made false statements regarding its obligation to negotiate. Finally, it was clear to the court that the Zastrows were improperly using this lawsuit as an indirect way of challenging the PSC’s determination that it was unnecessary to include specific vegetation-management conditions (see ¶ 39).

Division – Referee’s Report – Objections to Report

Associated Bank N.A. v. Brogli, 2018 WI App 47 (filed 25 July 2018) (ordered published 29 Aug. 2018)

HOLDING: In ruling on a division of property, the circuit court abused its discretion by adopting a referee’s amended report without reviewing the referee’s evidence or considering a party’s objection to the report.

SUMMARY: This litigation arose out of a 2012 foreclosure action against Arline and her former daughter-in-law, Kathryn. When the parties proved unable to settle the matter, the court appointed a referee, pursuant to Wis. Stat. section 805.06. The referee filed a report but failed to include a transcript of the proceedings or the evidence, as required by section 805.06(5)(a). Kathryn objected to the report by email but did not copy Arline. The referee gave Arline two days to respond; on the third day, receiving no response, he filed an amended report. Arline later objected.

Numerous hearings followed, which included the revelation that the parties had disbursed proceeds placed in trust without the proper authorization (see ¶ 19). Eventually, the circuit court decided to “adopt” the referee’s amended report as an equitable outcome.

The court of appeals, in an opinion authored by Chief Judge Neubauer, reversed. The procedural issues were first raised in the court of appeals, with one exception (see ¶ 26). The circuit court erred when “it spontaneously accepted the referee’s amended report without addressing Arline’s objection, or even considering the referee’s findings of fact or reviewing the factual evidence supporting those findings” (¶ 32).

Absent a review of the evidence considered by the referee, it was “of course impossible for a circuit court to determine whether any factual findings are clearly erroneous, pointing up why the statute [Wis. Stat. § 805.06(5)(a)] requires the report to be accompanied by the ‘transcript of proceedings and of evidence and the original exhibits’” (¶ 37).

Dissenting, Judge Hagedorn asserted that the majority gave Arline a “mulligan” (¶ 42). He concluded that Arline’s “lone objection” was adequately resolved by the circuit court (¶ 43) and that Arline’s procedural objections “are too little too late” (¶ 54).

Taxation

State Sales Tax – Laundry Services – Wis. Stat. section 77.52(2)(a)6.

Healthcare Servs. Grp. Inc. v. Wisconsin Dep’t of Rev., 2018 WI App 48 (filed 17 July 2018) (ordered published 29 Aug. 2018)

HOLDING: The Tax Appeals Commission properly determined that services Healthcare Services Group (HSG) provides to its customers qualify as “laundry services” under Wis. Stat. section 77.52(2)(a)6. and therefore are subject to a 5 percent sales tax.

SUMMARY: HSG provides contract cleaning services to more than 3,000 clients, 66 of which are Wisconsin nursing homes, retirement centers, and rehabilitation facilities. HSG enters into a “service agreement” with each of its clients. In a letter submitted to the Wisconsin Department of Revenue (the Department), HSG explained that, under its standard service agreement, HSG “provides management, supervision, labor and materials necessary for performing housekeeping and laundry services” for its clients. In the same letter, when describing its “[l]aundry functions,” HSG stated the “tasks performed are the laundering and processing of the personal clothing of residents and patients, as well as the collecting and laundering of sheets, pillow cases, blankets and other linen items used in a healthcare facility” (¶ 2).

After HSG signs a service agreement for a particular client location, it typically hires the client’s existing laundry department workers, who generally perform their duties in the same manner as they did when employed by the facility. For the tax years in question in this case, HSG did not charge, collect, or remit sales taxes on payments it received for laundry services from its Wisconsin clients.

The Department later audited HSG for those tax years and determined that HSG owed $605,459.07 in sales tax for those services, plus $270,084.84 in interest. The Department relied on Wis. Stat. section 77.52(2)(a)6., which imposes a 5 percent sales tax on businesses that “sell[], licens[e], perform[] or furnish[] … [l]aundry, dry cleaning, pressing, and dyeing services” (¶ 7). The Tax Appeals Commission and the circuit court upheld this decision.

In a unanimous decision authored by Judge Stark, the court of appeals affirmed. The issue on appeal was whether the commission properly determined that services HSG provides to its customers qualify as “laundry services” under Wis. Stat. section 77.52(2)(a)6. and therefore are subject to a 5 percent sales tax. The statute imposes the sales tax on businesses that sell, license, perform, or furnish laundry services (subject to limited exceptions not applicable in this case). Though the statute does not expressly define “laundry” or “services,” the court gave those terms their common, ordinary, and accepted meanings: “‘laundry services’ is work done for another to wash soiled clothes and linens” (¶ 14).

The court concluded that “HSG clearly provides ‘laundry services’ to its clients within the meaning of Wis. Stat. § 77.52(2)(a)6.” (¶ 15). “HSG cannot evade the tax on laundry services simply by calling its services ‘departmental’ or ‘managerial,’ when the essence of those services is to clean its clients’ laundry” (¶ 17). Nor could HSG avoid taxation by arguing that it was providing only “temporary help services” within the meaning of Manpower Inc. v. DOR, Wis. Tax Rep. (CCH) ¶ 401-223 at 36,413 (WTAC 2009) (see ¶ 29).

Zoning

Conditional Use Permits – Certiorari Review

Zelman v. Town of Erin, 2018 WI App 50 (filed 11 July 2018) (ordered published 29 Aug. 2018)

HOLDINGS: 1) The town of Erin was not a proper party in this certiorari action. 2) The circuit court erroneously concluded that the plaintiff’s amended complaint was untimely.

SUMMARY: The town of Erin’s plan commission approved a conditional use permit (CUP) for plaintiff Zelman’s neighbor to open a wine business. Zelman appealed that decision to the town board, before which a motion to deny the CUP failed on a 2-2 vote. Zelman was present at the meeting when the vote took place.

Zelman sought judicial review in this certiorari action naming the town of Erin as the only defendant. She later amended her complaint to add the plan commission and the town board as defendants. The circuit court granted summary judgment in favor of the town, the town board, and the plan commission. It found that the town was not a proper party and that Zelman’s amended certiorari complaint was not timely filed under Wis. Stat. section 68.13(1) because it had been filed more than 30 days after the town board vote on the motion to deny the CUP.

In a majority decision authored by Judge Gundrum, the court of appeals affirmed in part and reversed in part.

The appellate court agreed with the circuit court that the town was not a proper party in the certiorari action. “The Plan Commission and Town Board – not the ‘Town’ – made the actual decisions from which Zelman seeks judicial review by certiorari” (¶ 10). Certiorari is an extraordinary remedy by which courts exercise supervisory control over inferior tribunals, quasi-judicial bodies, and officers. See Acevedo v. City of Kenosha, 2011 WI App 10, 331 Wis. 2d 218, 793 N.W.2d 500. In this case the town was not a tribunal, a quasi-judicial body, an administrative body, or an officer, and the circuit court correctly determined that it was not a proper party (see id.).

The appellate court reversed the circuit court’s decision that the plaintiff’s amended complaint was untimely filed. Under Wis. Stat. section 68.13(1), the 30-day limitation period for certiorari review begins to run when a party to a proceeding that results in a “final determination” is in “receipt of the final determination” (¶ 13).

The appellate court concluded that “the oral vote of the Town Board [on the motion to deny the CUP] … did not constitute a ‘final determination’ under Wis. Stat. § 68.13(1), triggering the thirty-day limitation period …” (¶ 15), and Zelman’s presence at the town board vote did not constitute “receipt of the final determination” for purposes of triggering the 30-day limitation period (¶ 19). The 30-day period begins when the relevant person receives a mailed or delivered written communication or copy of the decision on review (see ¶ 22).

In this case the court concluded that “the earliest date at which Zelman possibly could be considered to have been in receipt of a final determination related to the CUP was when she procured the CUP from the register of deeds office on October 11, 2016 [the day after the CUP was recorded]” (¶ 25). The amended complaint was filed within 30 days after Oct. 11, 2016 and thus was timely (see id.).

Judge Hagedorn filed a concurring opinion.