Vol. 76, No. 6, June 2003

Supreme Court Digest

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

Appellate Procedure Criminal Procedure Government Law

Employee Benefits Insurance Municipal Law

Appellate Procedure

Sanctions for Violating Rules of Appellate Procedure - Summary Reversal

Raz v. Brown, 2003 WI 29 (filed 1 May 2003)

The issue before the supreme court in this case was whether the court of appeals erred when it summarily reversed part of a circuit court order as a sanction against a party (the wife in a family law proceeding) for failing to file a response brief to her former husband's cross-appeal. In a unanimous decision authored by Chief Justice Abrahamson, the supreme court held that summary reversal is a drastic sanction that the court of appeals may not impose unless the court finds egregious conduct, bad faith, or a litigant's abandonment of the appeal.

The supreme court concluded that the conduct of the wife and her counsel in this case did not meet these criteria. Instead of filing a response brief to the husband's cross-appeal, the wife sent a letter to the court of appeals within the time limit prescribed for filing her brief, explaining that she would not be filing either a reply brief or a "responsive brief in the cross-appeal." The court of appeals responded to this letter by issuing an "order" that neither required the wife to file a response brief nor threatened summary reversal for her failure to do so. The order simply explained that the wife's failure to file a response brief may result in the court of appeals construing any issues raised in the cross-appeal as conceded. The order further gave the wife a choice to be made within 10 days: either file a responsive brief in the cross-appeal or file a letter indicating her decision not to file a responsive brief. The wife's response fully complied with this order: two days after the order was issued, the wife filed a letter through her attorney indicating that she was aware of the consequences of not filing a response brief and that she elected not to file one because the arguments in the cross-appeal lacked merit.

The supreme court determined that the wife's decision to file a letter instead of a response brief was not egregious conduct nor was it undertaken in bad faith. The court held that the wife fully and timely complied with the court's order and that her letter made the court of appeals aware of her position that her ex-husband's claims lacked merit and should be rejected. Moreover, the court held, the wife could not be said to have abandoned her appeal.

The supreme court indicated its appreciation that the court of appeals has a heavy caseload and is entitled to wide latitude when enforcing procedural rules designed to make the appellate process more efficient. However, said the court, "where the court of appeals elects to impose the drastic sanction of summary reversal for failure to file a response brief, it may do so only after unequivocally ordering the filing of a brief and clearly stating the consequences for failure to comply" (¶ 36).

Criminal Procedure

John Doe Proceedings - Power of John Doe Judge to Disqualify Counsel - Jurisdiction of Court of Appeals to Issue Supervisory Writ to John Doe Judges

State ex rel. Unnamed Person No. 1 v. State, 2003 WI 30 (filed 1 May 2003)

This case was before the supreme court on certification from the court of appeals. It arose out of a secret John Doe proceeding in Dane County investigating possible illegal campaign activity by the partisan legislative caucuses of the Wisconsin Senate and Wisconsin Assembly as well as various state employees and legislators.

The first certified question was whether the court of appeals has jurisdiction to issue a supervisory writ to a judge presiding over a John Doe investigation. In a per curiam opinion, a majority of the supreme court concluded that the court of appeals has such authority.

The supreme court also considered the issue of whether on review of a petition for a supervisory writ stemming from a secret John Doe proceeding, the court of appeals may seal parts of the record in order to comply with the existing secrecy orders issued by the John Doe judge. The supreme court concluded that "when documents are submitted under seal in connection with a petition for supervisory writ that stems from a secret John Doe proceeding, the court of appeals shall conduct an in camera review of those documents to ascertain whether they are encompassed by a permissible secrecy order. This in camera review must occur prior to the issuance of an order that continues the sealing of such documents" (¶ 75).

Finally, the court considered whether a John Doe judge has the authority to disqualify counsel in a John Doe proceeding. Witnesses called to testify in a John Doe proceeding have a right to have counsel present during questioning. Nevertheless, the supreme court concluded that a John Doe judge must have the authority to disqualify counsel. Matters such as attorney conflicts of interest may interfere with procedural fairness during the John Doe investigation, particularly in a situation in which a conflict may not be subject to waiver because of a secrecy order. Denying a John Doe judge the ability to disqualify counsel would seriously reduce the ability of the judge to carry out his or her responsibilities with respect to the proper conduct of John Doe proceedings.

The supreme court did, however, remind John Doe judges to create a record for possible review when rendering judicial decisions in a John Doe proceeding. "We appreciate that the John Doe judge could conclude that the terms of the secrecy order may preclude a disclosure of the factual basis for the disqualification orders to the petitioners and their counsel. However, our system of justice demands that there be some basis set forth to facilitate review. If necessary to preserve the integrity of a secret John Doe proceeding, the details concerning the grant or denial of such a motion need not be recited in open court .... The facts comprising the basis for the disqualification order may be sealed and, in the event of further review, submitted directly to the reviewing court for in camera review" (¶ 57).

Chief Justice Abrahamson filed a concurring opinion. Justice Sykes filed a dissent.

Employee Benefits

Milwaukee County - Deferred Vested Pensions - Military Credit - Meaning of "Retired from the County"

Bruno v. Milwaukee County, 2003 WI 28 (filed 1 May 2003)

In 1996 the Milwaukee County Board enacted an ordinance granting a military service pension credit to certain members of the Milwaukee County Employees' Retirement System who had served in the military. The ordinance took effect, prospectively only, on Jan. 1, 1997 and applies to "all retirees who retired from the county before July 1, 1985" (emphasis added).

The plaintiffs are former Milwaukee County employees and current retirement system members. They left county employment before July 1, 1985 with "deferred vested pensions" and later, but still before July 1, 1985, began drawing on those pensions. They applied for but were denied the military service pension credit. The circuit court and the court of appeals rejected the plaintiffs' request for a declaration of entitlement to the military service pension credit, concluding that retirement system members who left county service with deferred vested pensions but who were not old enough to immediately draw a pension had not "retired from the county."

In a majority decision authored by Justice Sykes, the supreme court reversed the court of appeals. It found that, although none of the plaintiffs began collecting a pension immediately upon leaving county employment, each one qualified for a deferred vested pension at the time of termination, which met the definition of "retirement" under the pension ordinance. Said the majority, "retirement system members who leave county employment with deferred vested pensions have 'retired from the county' for purposes of the military service credit" (¶5).

Justice Wilcox did not participate in this decision.

Justice Bradley filed a concurring opinion that was joined by Chief Justice Abrahamson.

Government Law

Public Officer Immunity - Ministerial Duty

Bicknese v. Sutula, 2003 WI 31 (filed 2 May 2003)

Sutula, a department chair at the U.W. Medical School, offered Bicknese a position as untenured assistant professor. Under the terms of the alleged offer, Bicknese had five years to qualify for tenure. Based on the U.W. offer, Bicknese turned down other job opportunities. Sutula, however, had not fully informed Bicknese that U.W. rules mandate a three-year tenure "clock" and that extensions must be approved by a university committee.

Ultimately, the committee rejected the requested five-year term and the medical school decided not to extend a formal offer to Bicknese, because her record rendered it unlikely that she could gain tenure within three years. Bicknese sued Sutula, who claimed immunity from liability as a public officer. A jury found in Bicknese's favor on her claim for promissory estoppel, but the trial court granted Sutula's motion for judgment notwithstanding the verdict based on the public officer immunity defense. The court of appeals affirmed.

The supreme court, in an opinion written by Justice Bablitch, reversed. (Chief Justice Abrahamson did not participate.) The majority held that "Sutula had a ministerial duty to accurately state the terms under which the offer was extended to Bicknese in accordance with the U.W. Faculty Policies and Procedures. Sutula breached this ministerial duty when he failed to adhere to the specific directives of the U.W. Faculty Policies and Procedures in calculating Bicknese's tenure clock. Therefore, Sutula has no public officer immunity" (¶4). Under those university policies, "Sutula had no discretion in setting Bicknese's tenure clock" (¶28). And those same policies required that persons offered an appointment must be sent a letter by an authorized official that details the terms and conditions of the appointment (¶29). (At trial, Sutula admitted that he "misstated the process" to Bicknese by indicating that he had "control" over the tenure period (¶31).)

Justice Bradley dissented on the grounds that the majority had (1) "erroneously transpose[d] a promise of an offer of employment into an offer of employment" (¶ 35) and (2) inadequately analyzed whether public officer immunity ought to be applied in contract actions (see ¶¶ 34-57). Justice Sykes also dissented because "[t]his case suffers from significant analytical confusion" (¶58). Inadequate briefing and mistaken assumptions by lower courts failed to assess fully whether public officer immunity even applies to the claims made here (see ¶¶ 58-75).

Insurance

Duty to Defend - CGL Coverage

Fireman's Fund Ins. Co. v. Bradley Corp., 2003 WI 33 (filed 6 May 2003)

Lawler Manufacturing Corp. sued its competitor Bradley Corp. in federal court for various claims relating to trade secret misappropriation, patent infringement, and the like. Nearly 15 months later, Bradley notified Fireman's Fund Insurance Co. (the "insurer") of the lawsuit and asserted that the insurer was liable for coverage under various comprehensive general liability (CGL) policies and therefore had a duty to defend. The insurer denied that it had coverage. The insurer filed this declaratory judgment action to establish that it had no duty to defend or to indemnify Bradley, but the circuit court disagreed and granted summary judgment in favor of Bradley. The court of appeals reversed.

The supreme court, in a decision authored by Chief Justice Abrahamson, reversed the court of appeals. The precise issue was whether the insurer "had a duty to defend Bradley under the advertising injury provisions of its CGL policy" (¶5). The court found that a claim under the Lanham Act for "trade dress infringement" fell within the advertising injury provision (¶6). Moreover, allegations of "consumer confusion" also fell within the realm of possible coverage, which triggered the duty to defend. "The duty to defend is necessarily broader than the duty to indemnify because the duty to defend is triggered by arguable, as opposed to actual, coverage" (¶20).

The court analyzed three questions: "(a) Does the Lawler complaint state an offense covered under the advertising injury provisions of the insurance policies? (b) Does the Lawler complaint allege that Bradley engaged in advertising activity? (c) Does the Lawler complaint allege a causal connection between the injury alleged and Bradley's advertising activity?" (¶26).

The court answered "yes" to all three questions and elaborated upon a host of related issues. For example, the court, in answering the first question, comprehensively discussed the concept of trade dress infringement. Addressing the second question, the court confronted the diverse authority that defines "advertising." The facts here did not require the court to "parse the word 'advertising' . . . and adopt either the narrow or broad interpretation" set forth in the case law (¶44). Nonetheless, "[c]reating brochures and displaying products at a trade show clearly involve the widespread announcement or distribution of promotional materials and calling the attention of the public to the emergency shower systems by proclaiming their qualities in order to increase sales or arouse a desire to buy" (¶45). In short, trade show displays directed at customers fell within the arguable coverage of the CGL.

Finally, the causal nexus was also present because the complaint alleged that "Bradley created materials promoting the misappropriated designs and displayed those designs at a trade show," which constituted advertising conduct that contributed to the injuries (¶53).

The court also considered whether Bradley's 15-month delay in notifying the insurer abrogated the duty to defend. Although the dilatory notice left the insurer with just two weeks to prepare for the critical motion for a preliminary injunction, the delay made no real difference because the insurer adamantly insisted that no coverage existed. "The timing of Bradley's notice would not have changed the [insurer's] decision to deny its duty to defend" (¶63). Finally, the court remanded for a determination of the attorney fees owed to Bradley based on the insurer's breach of its duty to defend.

Municipal Law

Extraterritorial Preliminary Plat Approval Jurisdiction - Consideration of Plat's Proposed Use

Wood v. City of Madison, 2003 WI 24 (filed 11 April 2003)

This case was before the supreme court on certification from the court of appeals. In a majority decision authored by Justice Bradley, the supreme court concluded that Wis. Stat. chapter 236 authorizes a municipality to reject a preliminary plat under its extraterritorial jurisdictional authority based upon a subdivision ordinance that considers the plat's proposed use. "Extraterritorial plat jurisdiction" refers to the unincorporated area within three miles of the corporate limits of a first, second or third class city, or within one and one-half miles of a fourth class city or a village. See Wis. Stat. § 236.02(5).

In reaching this conclusion, the court believed the plain language of the declaration of intent found in section 236.45(1) leaves no doubt that subdivision regulations and ordinances may consider the use of the land. The statute requires that such ordinances "shall be made with reasonable consideration. . . of the character of the municipality, town or county with a view. . . for encouraging the most appropriate use of land throughout the municipality, town or county."

This opinion overrules Gordie Boucher Lincoln-Mercury v. Madison Plan Commission, 178 Wis. 2d 74, 503 N.W.2d 265 (Ct. App. 1993), in which the court of appeals addressed the same issue as that presented in this case but reached a contrary conclusion.

Justice Prosser filed a concurring opinion that was joined by Justices Wilcox and Sykes.

Wisconsin Lawyer