Civil Procedure

Class Action – Class Certifications

Shannon v. Mayo Clinic Health Sys. – Nw. Wis. Region Inc., 2021 WI App 49 (filed 2 June 2021) (ordered published 28 July 2021)

HOLDING: The circuit court erred as a matter of law in failing to amend the class definition to state that the class consisted of individuals improperly charged for medical records by Red Cedar.

SUMMARY: Plaintiff Shannon alleges in this class action that she was overcharged for the costs of obtaining medical records in 2013 by a nonprofit corporation, Mayo Clinic Health System – Red Cedar (Red Cedar), which merged into a separate nonprofit corporation, Mayo Clinic Health System – Northwest Wisconsin Region Inc. (Northwest), in 2018. Shannon moved to certify a class against Northwest, and Northwest objected. The circuit court refused to name Red Cedar in the class notification.

The court of appeals reversed in an opinion authored by Judge Seidl. It held that Red Cedar should be substituted for Northwest in the class definition (see ¶ 3). “There are no questions that Shannon’s counsel paid Red Cedar for obtaining her medical records; that Red Cedar subsequently merged into Northwest and no longer exists; that Red Cedar’s liabilities were assumed by Northwest, including any alleged overcharging for the medical records; and that Shannon did not obtain her medical records from Northwest or pay Northwest for those records” (¶ 14).

“[S]uccessor liability under Wis. Stat. § 181.1106(3) does not change the identity of a past actor; it merely carries liability for the past actor’s actions forward to that actor’s successor – here, Northwest. Likewise, dissolution by merger under § 181.1106(1) does not mean that the merged entity never existed, just that it ceases to exist upon merger” (¶ 16).

Thus, Northwest may be liable to pay for damage done by Red Cedar (see ¶ 19). The court also held that Northwest was not judicially estopped from making its claim (see ¶ 23).

Creditor-Debtor Law

Judgment Debtors – Homestead Exemption

Anderson v. Anderson Tooling Inc., 2021 WI App 39 (filed 6 May 2021) (ordered published 30 June 2021)

HOLDING: Married judgment debtors were entitled to a summary-judgment ruling that the homestead exemption protected their residential property.

SUMMARY: Anderson Tooling Inc. (ATI) obtained a money judgment in an Iowa court against the Andersons, who were former employees. The Iowa appellate courts upheld the judgment in 2015, but the Andersons had meanwhile moved to Wisconsin, where they purchased a residential property in 2014. ATI entered its Iowa judgment in the judgment and lien docket of a Wisconsin circuit court in late 2015.

The Andersons filed this declaratory-judgment action in 2019, seeking to establish that their Wisconsin property is protected by the homestead exemption and that they are entitled to a recordable release from ATI’s judgment lien, as provided by Wis. Stat. section 815.20(2) (see ¶ 14). (Apparently, the Andersons planned to sell the Wisconsin property and move back to Iowa.) The circuit court ruled in the Andersons’ favor, rejecting ATI’s contention that the Andersons had “impaired” their homestead exemption by their later conduct.

The court of appeals affirmed in an opinion authored by Judge Blanchard. No genuine issues of material fact existed as to the validity of the Andersons’ homestead.

Although both Andersons “temporarily removed themselves” from Wisconsin to live in Iowa, where they worked, “they consistently reoccupied the Wisconsin property as their homestead following these temporary periods” away from the Wisconsin property. “[A]t no point did they establish a new homestead in Iowa” (¶ 21). The opinion discusses the homestead exemption in general, which is liberally construed in favor of protecting homestead property from judgment creditors. Although a lack of occupancy might impair the exemption, the statutes recognize “two distinct circumstances” in which the homestead is protected despite a lack of occupancy: one involves a “temporary removal exception” and the other “the owner’s sale of the homestead with intent to use the proceeds to obtain a new homestead” (¶ 25).

Once the debtors claim the exemption, the burden is on the judgment creditor to prove that the exemption does not apply. The debtors, however, have the burden of showing that a lack of occupancy falls within the two exceptions to an impairment (see ¶ 30). The court of appeals’ de novo review concluded that the undisputed facts showed that the Andersons’ absences fell within both exceptions to the rules regarding impairment of the homestead exemption.

Criminal Procedure

Human Trafficking – Homicide – Right to Present a Defense

State v. Kizer, 2021 WI App 46 (filed 2 June 2021) (ordered published 28 July 2021)

HOLDING: The defendant is entitled to raise an affirmative defense to a homicide charge rooted in human trafficking abuses.

SUMMARY: Kizer, then age 17, is accused of murdering a man who had sexually abused her. At a pretrial conference, the trial judge ruled that Wis. Stat. section 940.302(2) precluded Kizer from presenting an affirmative defense to the homicide charge based on her allegation that the victim had engaged in human trafficking.

In an interlocutory appeal, the court of appeals reversed in an opinion authored by Judge Gundrum. The pertinent statute, Wis. Stat. section 939.46(1m), provides: “A victim of a violation of [Wis. Stat. §§] 940.302(2) or 948.051 has an affirmative defense for any offense committed as a direct result of the violation of [§§] 940.302(2) or 948.051 without regard to whether anyone was prosecuted or convicted for the violation of [§§] 940.302(2) or 948.051” (¶ 4).

The circuit court erred by restricting the defense to those crimes listed in Wis. Stat. section 940.302(2). Moreover, the defense is a “complete defense” to homicide; it does not simply mitigate first-degree intentional homicide to second-degree intentional homicide (¶ 5).

In the opinion, the court grappled with the statutory terms “direct” and “direct result.” It concluded that “a court should consider whether there is ‘some evidence’ to support such a finding based on whether the [trafficking] victim’s offense arises relatively immediately from the trafficking violation of which the [trafficking] victim is a victim, is motivated primarily by the trafficking violation, is a logical and reasonably foreseeable consequence of that violation, and is not in significant part caused by events, circumstances or considerations other than that violation.… This is not intended as an exhaustive list of factors for a court to consider in making such a determination; rather, it is merely intended to provide some guidance” (¶ 15).

Confessions – Interrogation – Misrepresentation of Rights

State v. Rejholec, 2021 WI App 45 (filed 9 June 2021) (ordered published 28 July 2021)

HOLDING: During interrogation, a police officer violated the defendant’s right to counsel and right to remain silent.

SUMMARY: The defendant was arrested and charged with sexually assaulting a minor. The circuit court denied his motion to suppress incriminating statements he made during interrogation by a police officer. A jury convicted him.

The court of appeals reversed in an opinion authored by Judge Reilly. Although the police interrogation lasted a scant 96 minutes, the police officer repeatedly lied to the defendant about the evidence, including DNA tests, and misrepresented his rights.

The court rejected the defendant’s challenge that his statements were involuntary for Fifth Amendment purposes despite the police officer’s “use of false evidence, lies, and victim blaming” (¶ 20). But the same conduct by the police officer vitiated the validity of the defendant’s waiver of his Miranda rights. The officer falsely told him that he would not be able to testify at trial unless he gave a statement to the police. “These statements impermissibly suggested to Rejholec that if he exercised his right to silence and obtained a lawyer that Rejholec would not get the chance to tell his story to the jury. This was clearly untrue” (¶ 30).

The officer repeated the misrepresentations “multiple times” (¶ 31). The court put the matter succinctly in this context: “Words matter” (¶ 35).

Joinder and Severance – Newly Discovered Evidence

State v. Watkins, 2021 WI App 37 (filed 27 May 2021) (ordered published 30 June 2021)

HOLDINGS: 1) The crimes charged against the defendant were properly joined for trial. 2) The defendant failed to show that he was prejudiced by the joinder of crimes. 3) The defendant was not entitled to a new trial on the basis of newly discovered evidence.

SUMMARY: The defendant was convicted of what the court of appeals called “assault-related crimes” that arose from a domestic violence incident in 2015 between defendant Watkins and a friend and from Watkins’ ensuing altercation with two police officers who responded to the domestic violence call. He was also convicted of what the appellate court called “conspiracy-related crimes” that arose from events in 2016 in which the defendant, while incarcerated in the county jail, solicited false testimony regarding the assault-related crimes and conspired to kill one of the police officers who responded to that incident so that she could not testify about those crimes. In a decision authored by Judge Kloppenburg, the court of appeals affirmed.

On appeal the defendant argued that he was entitled to a new trial because the circuit court improperly joined the two sets of crimes for trial. The court of appeals disagreed. The joinder statute allows for joining crimes that are based on two or more acts or transactions that are “connected together.” See Wis. Stat. § 971.12 (1). The Wisconsin Supreme Court has repeatedly held that separate crimes are connected together when the defendant arguably engaged in one crime to prevent disclosure of or punishment for another (see ¶ 25).

That was the situation here: The conspiracy-related crimes were committed to prevent punishment for all of the assault-related crimes. Moreover, two of the eight assault-related crimes (escape and resisting an officer causing substantial bodily harm) and all three conspiracy-related crimes involved the same victim (the injured police officer), and all 11 charges involved the same perpetrator (defendant Watkins) (see ¶ 27).

The court of appeals also rejected the defendant’s argument that, even if joinder of the crimes were proper, the court should have severed the two sets of crimes because the joinder was prejudicial. He contended that the state’s relatively weak case for the conspiracy-related crimes was bolstered by the state’s relatively strong case for the assault-related crimes and that the sheer number of the combined crimes prejudiced the jury against him.

The court concluded that the defendant failed to show the prejudice necessary to warrant severance. “[W]hen one crime is commissioned in order to prevent punishment for a prior crime, evidence of the prior crime is admissible as ‘other acts’ evidence to prove motive in a trial for the later crime, and evidence of the later crime is admissible as ‘other acts’ evidence to prove consciousness of guilt in a trial for the prior crime” (¶ 38) (citation omitted). In this case, “evidence of the assault-related crimes would be admissible to show motive in a trial on the conspiracy-related crimes and evidence of the conspiracy-related crimes would be admissible to show consciousness of guilt in a trial on the assault-related crimes” (¶ 39).

Lastly, the court considered and rejected the defendant’s claim that he is entitled to a new trial on the basis of newly discovered evidence. The evidence on which this assertion was based related to post-trial arrests and convictions for impersonating a police officer that were committed by one of the state’s key witnesses (J) who testified at the defendant’s trial regarding the conspiracy-related crimes. Said the court: “We … conclude that Watkins’s newly discovered evidence argument fails because evidence of [J’s] post-trial arrests does not satisfy the requirements for newly discovered evidence in that the facts of [J’s] post-trial arrests did not exist at the time of Watkins’s trial. Therefore, evidence of those facts could not possibly have been heard by the jury at trial so as to have created reasonable doubt as to Watkins’s guilt” (¶ 3).

Family Law

Child Support – Retroactive Modification

Zimmer v. Zimmer, 2021 WI App 40 (filed 12 May 2021) (ordered published 30 June 2021)

HOLDING: The circuit court erroneously ordered that modification of child support be applied retroactively.

SUMMARY: Lisa and Michael Zimmer married in 1993 and divorced in 2016. The divorce judgment ordered Michael to pay a sum certain each month in child support for their three children who were minors. The eldest child turned 18 in June 2017. By law, this event provided Michael with grounds to reduce his support obligation, but he did not then move to do so.

Two years later Michael did move to modify child support, requesting that the “overages” he had paid since June 2017 be credited toward accumulated arrears. A family court commissioner denied the motion. However, on de novo review, the circuit court reversed, relying on Wisconsin law holding that a court cannot order a parent to pay child support for an adult child (see ¶ 5).

In an opinion authored by Judge Davis, the court of appeals reversed. It concluded that “our legislature has already decided whether a child support order can be applied retroactively, and has answered this question in the negative. Under Wis. Stat. § 767.59(1m), a payment modification order is prospective only. This means that a court cannot, on the basis of one child’s having reached the age of majority, refund or credit child support payments made prior to notice being given in an action to modify an ongoing support obligation” (¶ 3).

The statute provides an exception to this rule “to correct previous errors in calculations.” However, this applies only to the correction of mathematical mistakes. In this case the circuit court’s modification of Michael’s child support order was not akin to correcting a mathematical error (see ¶ 7).

Juvenile Law

Delinquency Cases – Motion to Resume Case Suspended Because of Juvenile’s Incompetency – Redetermination of Competency Mandatory

State v. M.D.M., 2021 WI App 42 (filed 8 June 2021) (ordered published 28 July 2021)

HOLDING: The circuit court was required to redetermine whether the respondent juvenile was competent to proceed in his suspended juvenile delinquency cases.

SUMMARY: In 2014 the state filed petitions charging M.D.M. with four counts of delinquency. Following competency evaluations and hearings, the circuit court found M.D.M. incompetent to proceed but likely to become competent in each case. Having evidence that M.D.M. had become competent in 2016, the state filed “Motions to Resume [the 2014] Suspended Cases” and requested the circuit court to redetermine M.D.M.’s competency in those cases. The circuit court concluded that it had the discretion to deny the state’s motion without redetermining the juvenile’s competency and it did in fact deny the motion. The effect of that decision was that the 2014 cases remained in a state of suspension.

The court of appeals granted the state leave to appeal this decision and, in an opinion authored by Judge Dugan, reversed the circuit court. The court of appeals agreed with the state that once the state filed its motions to resume the suspended cases, the motions triggered a procedural mechanism that was mandatory and required the circuit court to hold a hearing on the issue of whether M.D.M. was competent to proceed (see ¶ 3).

If M.D.M. is ultimately found competent, the next step is for the circuit court to resume the proceedings. At that point the court must exercise discretion as to how the cases should proceed. The options available to the court in this situation were described by the supreme court in State v. A.L., 2019 WI 20, 385 Wis. 2d 612, 923 N.W.2d 827: dismissal of the action with prejudice or waiver of jurisdiction pursuant to Wis. Stat. section 938.18 (see ¶ 16 n.11.)

M.D.M. also argued that the court of appeals should dismiss these cases with prejudice because these cases can neither remain in juvenile court because of his age (M.D.M. is now 19 years old) nor be waived into adult court because of the nature of the charges. Said the appellate court in response: “[T]hose issues are not before this court on appeal. The circuit court and the parties can address how these cases should proceed after the competency redetermination” (¶ 17 n.13).

Real Property

Raze or Repair Orders – Judicial Review – Timeliness

1033 N. 7th St. v. City of Fond du Lac, 2021 WI App 38 (filed 5 May 2021) (ordered published 30 June 2021)

HOLDING: Claims involving “subsequent repairs” made under a raze-or-repair order were timely filed; they were not governed by the 30-day statute of limitation, which applies only to the reasonableness of a raze order.

SUMMARY: A corporation owned a building, formerly used as a convent, that is a designated historical site. After the building was vandalized and set on fire, the city’s building inspector issued a raze-or-repair order, which gave the owner 90 days to make specified repairs or the building would be razed. Repairs were made to the roof, electrical service, and plumbing. Other tasks still needed to be done, but the corporation allegedly assumed that it had complied with the raze order. The city later issued another order demanding additional items for repair. The corporation filed this claim for declaratory relief when the city moved ahead on its raze order. The circuit court granted the city’s motion to dismiss, finding that the claim was untimely under the 30-day statute of limitation set forth in Wis. Stat. section 66.0413(1)(h).

The court of appeals reversed in an opinion authored by Chief Judge Neubauer. The corporation was not challenging the reasonableness of the raze-or-repair order, which is governed by the 30-day limitation in Wis. Stat. section 66.0413(1)(h) (see ¶ 24).
“In short, when the property owner is provided ninety days to effect identified repairs, and the City is authorized to seek a court order to address noncompliance, it would be unreasonable to apply subsection (1)(h)’s limited challenged to the order’s reasonableness to the acts occurring during subsequent repairs at issue” (¶ 26). The complaint sufficiently alleged that the corporation had been assured by the city that the property was safe from being razed and the owner was under no deadline to complete repairs (see ¶ 27).

Title – Notice of Interest – Recording Statutes

Lakes of Ville Du Parc Condo. Ass’n. v. City of Mequon, 2021 WI App 48 (filed 30 June 2021) (ordered published 28 July 2021)

HOLDING: A subsequent purchaser could not take condominium property that had been previously sold.

SUMMARY: “This case involves open land, currently in a natural state, that was sold by the same seller twice. The seller is no longer in the picture, so the two buyers (or, more precisely, their successors and/or representatives) are left to wage this battle over the question of ownership”
(¶ 1). A condominium association claimed title to the land on its members’ behalf based on the condominium declaration and survey map that were prepared and filed and that designated the land an “outlot” and part of the Association’s “common elements” (id.). The circuit court ruled in favor of the association.

The court of appeals affirmed, albeit for a different reason, in an opinion authored by Judge Davis. The court began with “the obvious point that it is impossible for an owner of property to validly convey that property twice. In such a circumstance, only one of the conveyances can be given effect” (¶ 19). The court closely analyzed Wis. Stat. section 706.09(1)(a)-(k), which is a “race-notice recording” statute that changed the common law, thereby giving “a buyer who purchases property for value without notice of a prior purchaser’s unrecorded interest, and who records that conveyance first, [] priority over any later recordings” (¶ 20).

The condominium declaration “easily” met most of the statute’s requirements (for example, an instrument providing notice, filed within 30 years, and before the time of the competing interest) (¶ 23). The declaration also qualified under the statute’s “chain of title” definition (¶ 25). “Review of the Declaration (as amended) would have enlightened any would-be purchaser of the orange, yellow, and pink parcels as to the fact that the Association still had an undivided ownership interest in at least the orange and yellow parcels” (¶ 26).

The opinion discusses why a 1993 quitclaim deed “was sufficient to put any subsequent purchaser on notice that the conveyance was from condominium unit owners, and therefore improper in the absence of a removal instrument. That means such a purchaser is not ‘without notice’ of a conflicting interest under Wis. Stat. § 706.09(2)(b)” (¶ 29).

Taxation

Property Tax Exemption – Challenge to Department of Revenue’s Interpretation of Tax Statute – Primary Jurisdiction Doctrine

Wisconsin Prop. Tax Consultants Inc. v. Wisconsin Dep’t of Revenue, 2021 WI App 47 (filed 2 June 2021) (ordered published 28 July 2021)

HOLDING: The circuit court did not erroneously exercise its discretion in applying the primary jurisdiction doctrine and dismissing the plaintiffs’ declaratory-judgment action.

SUMMARY: In 2017, the Wisconsin Legislature enacted a new personal property tax exemption for “[m]achinery, tools, and patterns.” See Wis. Stat. § 70.111(27) (2017-18). Wisconsin Manufacturers and Commerce Inc. (WMC), a business trade association, asked the Wisconsin Department of Revenue (DOR) to offer its interpretation of Wis. Stat. section 70.111(27) based on hypothetical facts, arguing that the DOR’s application of Wis. Stat. section 70.111(27) violated statutory rulemaking procedures.

The WMC, unhappy with the DOR’s interpretation, filed a declaratory-judgment action seeking a declaration that the DOR’s interpretation of Wis. Stat. section 70.111(27) is invalid. The circuit court dismissed the action; it chose under the primary jurisdiction doctrine to not assume jurisdiction, concluding that initial review should be with the Tax Appeals Commission (TAC). In a decision authored by Judge Reilly, the court of appeals affirmed.

“The primary jurisdiction doctrine, also known as the prior resort rule, applies ‘when an administrative agency and the circuit court both have jurisdiction over an issue; [in such circumstances,] the circuit court has the discretion to defer to the agency to resolve the issue.’ It applies where there has been an absence of a formal proceeding before the agency”
(¶ 4) (citations omitted).

In this case, the TAC is the administrative body with concurrent jurisdiction. The TAC has been declared by the legislature to be the final authority for the hearing and determination of all questions of law and fact arising under the tax code, subject to judicial review (see ¶ 5).

In sum, the appellate court concluded that “[t]he TAC clearly has concurrent jurisdiction over WMC’s constitutional and rulemaking claims. Relief should first be sought from the administrative agency before bringing it to the courts. WMC presents no valid reason for us to intervene at this stage. The role of the TAC is to consider tax cases presenting questions just such as this, and we do not agree that the intent of the legislature was to create a backdoor by which parties may avoid the TAC by pleading rulemaking and constitutional claims in a case whose clear focus is the scope of tax law statutes such as Wis. Stat. § 70.111(27). Accordingly, the circuit court did not erroneously exercise its discretion in applying the primary jurisdiction doctrine and dismissing this case” (¶ 17).

Property Tax – Failure to Pay – Timeliness

WGLB Scholarship v. City of Milwaukee, 2021 WI App 43 (filed 22 June 2021) (ordered published 28 July 2021)

HOLDING: The taxpayer’s failure to timely pay an installment on its property tax assessment disqualified it from pursuing its claim under Wis. Stat. section 74.35.

SUMMARY: A scholarship fund, WGLB, filed this action to recover an alleged unlawful property tax levy against it by the city of Milwaukee for the 2018 tax year. Essentially, WGLB asserted it was a tax-exempt organization. The city moved to dismiss on grounds the court lacked competency based on WGLB’s alleged failure to make timely payments, especially its March installment. The circuit court denied the motion.

The court of appeals reversed in an opinion authored by Judge Dugan. Persons “aggrieved” by unlawful tax assessments may file a claim to recover the unlawful local tax, as provided by Wis. Stat. section 74.35(2)(a) (¶ 7). The statutes specifically address what constitutes a timely installment payment in Wis. Stat. section 74.87(7).

Here the record showed that WGLB did not make its “March installment payment” until April 16; moreover, the circumstances fit “none of the three situations enumerated” in Wis. Stat. section 74.87(7), governing “timely” payments (¶ 9). Reconciling several disparate statutes, the court held “that a payment is timely within the meaning of § 74.35(5)(c) if it meets the criteria contained in § 74.87(7) and a payment is not considered timely simply because it is not considered delinquent under § 74.87(6)” (¶ 11).

The separate installment payments did not give rise to their own separate, multiple claims. A taxpayer has but one claim: “§ 74.35(2)(a) says that an aggrieved person may file ‘a claim’ to recover the unlawful tax, and § 74.35(3)(c) references ‘the claim’” (¶ 12). Thus, the tax assessment is one assessment, and the statutory claim is for one tax assessment (see ¶ 14).

Worker’s Compensation

Refusal to Rehire – Reasonable Cause – Different Position

Anderson v. LIRC, 2021 WI App 44 (filed 2 June 2021) (ordered published 28 July 2021)

HOLDING: An employer’s refusal to rehire a worker for a different position following the worker’s recovery from an injury did not expose the employer to a statutory penalty.

SUMMARY: Anderson injured his back while working as a parts advisor for an auto dealership. While Anderson recovered, the dealer hired another person to permanently replace Anderson as parts advisor. Physicians imposed lifting restrictions that effectively ruled out Anderson for the parts advisor position. Anderson never returned to the dealership to discuss a possible sales position, nor did he inform the dealership of his permanent restrictions (see ¶ 6).

Eventually, Anderson filed a worker’s compensation claim seeking the “refusal to rehire” penalty provided by Wis. Stat. section 102.35(3). An administrative law judge ruled that the dealer’s refusal to rehire Anderson as a parts advisor was supported by reasonable cause. The Labor and Industry Review Commission (LIRC) affirmed, and Anderson petitioned for judicial review. The circuit court ruled that substantial evidence supported LIRC’s decision.

The court of appeals affirmed in an opinion authored by Judge Hruz. “The analysis under Wis. Stat. § 102.35(3) employs a burden-shifting framework. After an employee shows that he or she has been injured in the course of employment and subsequently denied rehire, it becomes the employer’s burden to show reasonable cause for not rehiring the applicant.… An employee’s physical unfitness to perform job duties can constitute reasonable cause, provided there is medical evidence substantiating that unfitness. The employer also bears the burden of showing that there is no other suitable employment available within the employee’s physical and mental limitations.” (¶ 12). Typically, too, the employee shows that he or she applied to be rehired (see ¶ 13).

The record revealed “ample evidence” pointing to the dealership’s “business necessity in filling the position prior to Anderson’s recovery” (¶ 16). Anderson, however, apparently contended that the dealership should be penalized for not hiring him in a sales position.

The court held, however, that a different rule applies “when an employee seeks the remedy available under § 102.35(3) for an employer’s allegedly unreasonable refusal to rehire the employee to a different position than the one the employee previously occupied. In those instances, the employee must demonstrate, as part of his or her prima facie case, that he or she indicated to the employer a willingness to accept other work” (¶ 23).

The court reaffirmed the validity of Hill v. LIRC, 184 Wis. 2d 101, 516 N.W.2d 441 (Ct. App. 1994), although it noted that more recent cases impose a de novo, rather than a deferential, standard of review (see ¶ 21).