Vol. 77, No. 3, March 2004

Supreme Court Digest

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

Elections Criminal Procedure

Insurance Sexually Violent Persons

Criminal Procedure

Guilty Plea - Failure to Advise Defendant of Deportation Consequences - Rule of Douangmala Not Retroactive on Collateral Review of Conviction

State v. Lagundoye, 2004 WI 4 (filed 30 Jan. 2004)

Section 971.08 of the Wisconsin Statutes provides that, before a court accepts a plea of guilty or no contest, it must advise the defendant about the possibility of deportation consequences of the conviction. The statute further provides that if the court fails to so advise the defendant and the defendant later shows that the plea is likely to result in his or her deportation, exclusion from admission to this country, or denial of naturalization, the court on the defendant's motion shall vacate any applicable judgment against the defendant and permit the withdrawal of the plea.

The defendant entered guilty pleas to various felonies in 1997 and 1998. In none of those cases did the court comply with the mandates of section 971.08. When the defendant entered his pleas, the law governing the application of section 971.08 was controlled by State v. Chavez, 175 Wis. 2d 366, 498 N.W.2d 887 (Ct. App. 1993). The Chavez court concluded that an appellate court should employ a harmless error analysis when a defendant sought to withdraw his or her plea based on a circuit court's failure to comply with section 971.08. The defendant in this case (Lagundoye) did not seek plea withdrawal under section 971.08 for any of his convictions.

In State v. Douangmala, 2002 WI 62, the supreme court overruled the harmless error approach of Chavez and provided for an automatic plea withdrawal if the conditions set forth in section 971.08(2) are met. Thereafter, Lagundoye moved to reopen and vacate his conviction judgments, seeking to benefit from the newly announced rule in Douangmala. The circuit court denied his motions seeking a vacatur of the judgments rendered against him. The court of appeals affirmed the circuit court.

In a majority decision authored by Justice Wilcox, the supreme court affirmed the court of appeals. The issue before the supreme court was whether the rule it announced in Douangmala can be applied retroactively to a defendant who exhausted his direct appeal rights before Douangmala was decided. The majority concluded that the rule announced in Douangmala was a new rule of criminal procedure that can be retroactively applied only to cases that were not yet final when Douangmala was decided. The court further held that the rule in Douangmala does not fall within either of two narrow exceptions to the general rule of nonretroactivity and therefore cannot be retroactively applied to collateral appeals such as the defendant's. Accordingly, the court applied the harmless error approach that existed when the defendant entered his pleas and concluded that the error of the circuit court in failing to advise the defendant of possible deportation consequences was harmless. Under Chavez the failure to advise about deportation consequences constitutes harmless error if the defendant was aware of the potential for deportation when he entered his plea. The supreme court concluded that it was clear from the record that the defendant did in fact know the possible deportation consequences of his pleas when he entered them.

Justice Sykes did not participate in this decision.

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

Elections

Disqualified Ballots - Law of the Case

Roth v. LaFarge School Dist. Bd. Canvassers, 2004 WI 6 (filed 4 Feb. 2004)

This case grew out of a 2000 referendum on proposed school improvements. When the votes were counted, the vote was evenly divided at 392 in favor and the same number against. By statute, Wis. Stat. § 5.01(4)(d), the tie vote resulted in the referendum's defeat. When Roth, an elector, requested a recount, the result was also a tie, but the Board Canvassers disallowed three votes on each side of the issue. One "yes" ballot was disqualified because it bore the initials of only one poll worker instead of the two required by statute. Roth appealed the election result to the circuit court pursuant to Wis. Stat. section 9.01(6). The judge ruled that the "yes" vote should have been counted and also determined that another elector had failed to intervene in a timely fashion to contest the disqualification of one "no" vote. The court of appeals, however, reversed on the ground that the trial court should have considered the "no" vote because the intervention had been timely. Although it upheld the counting of the "yes" vote, the court remanded for a determination of whether the "no" vote should also be counted.

The supreme court, in a decision authored by Justice Crooks, affirmed. The court began by categorically rejecting Roth's argument that the supreme court was bound by the "law of the case" doctrine based on earlier decisions. It held that "'the law of the case doctrine is not a rule to which this court is bound by any legislative enactment, nor is it a rule to be inexorably followed in every case.' [Rather, the supreme court retains the] discretion under these standards to review any substantial and compelling issue which the case presents, regardless of whether a prior decision established the law of the case" (¶ 12).

The court next addressed whether Wis. Stat. section 7.50(2)(c) was correctly applied. Reviewing a series of ballot cases, the court concluded that "Wisconsin's position on recognizing voter intent is clear. It is evident that this court has consistently placed a premium on giving effect to the will of the voter. Thus, we conclude that the Board legally erred when it misapplied Wis. Stat. § 7.50(2)(c), resulting in the disqualification of the 'no' vote. The Board may use its discretion and make findings only when the standards of a statute do not apply. By enacting § 7.50(2)(c), the legislature attempted to minimize a board's discretion. Here, § 7.50(2)(c) applies, as there is a qualifying mark in a qualifying place on the ballot at issue. We conclude that with proper application of Wis. Stat. § 7.50(2)(c) the intent of the voter becomes readily ascertainable in this case. Section 7.50(2)(c) provides that a vote will be counted if a cross, slash, or other mark similar to the eight examples listed in the statute is present in a qualifying place on the ballot. An examination of the ballot in question reveals that, at the very least, there is a slash through the box to the right of the word 'no.' Pursuant to § 7.50(2)(c), the mark was made in a qualifying place on the ballot, as it was placed in the box to the right of the word 'no.' Because there is a qualifying mark in a qualifying place on the ballot, the vote should be counted, so as to give effect to the will of the voter" (¶¶ 26-27).

Justice Bradley concurred but wrote separately to stress a standard of review that had been "ignored."

Insurance

CGL - "Property Damage" - "Occurrence" - "Economic Loss Doctrine" - Exclusions

American Family Mut. Ins. Co. v. American Girl Inc., 2004 WI 2 (filed 9 Jan. 2004)

This case concerns a "construction project gone awry" in which a new building eventually was declared unsafe and demolished (¶ 3). The main issues in the litigation involved insurance coverage for the damages under a "post-1986" comprehensive general liability (CGL) policy and an excess policy. Given the complexity of the issues, this summary will focus on the supreme court's holdings; action by the lower court will be described only as necessary to provide context.

The supreme court, in an opinion written by Justice Sykes, reversed the court of appeals and remanded the matter. The "threshold question" was whether "the claim at issue here is for 'property damage' caused by an 'occurrence' within the meaning of the CGL policies' general grant of coverage." The court held that coverage existed because the "CGL policies define 'property damage' as 'physical injury to tangible property.' The sinking, buckling, and cracking of the warehouse was plainly 'physical injury to tangible property.' An 'occurrence' is defined as 'an accident, including continuous or repeated exposure to substantially the same general harmful condition.' The damage to the warehouse was caused by substantial soil settlement underneath the completed building, which occurred because of the faulty site-preparation advice of the soil engineering subcontractor. It was accidental, not intentional or anticipated, and it involved the 'continuous or repeated exposure' to the 'same general harmful condition.' Accordingly, there was 'property damage' caused by an 'occurrence' within the meaning of the CGL policies" (¶ 5).

Second, the supreme court held that "the economic loss doctrine does not preclude coverage. ... That the property damage at issue here is actionable in contract but not in tort does not make it 'non-accidental' or otherwise remove it from the CGL's definition of 'occurrence'" (¶ 6). Indeed, the supreme court has never "held that the CGL insuring agreement only covers torts" (¶ 44). (The court discusses pertinent authority and "caution[ed]" that several cases should not be read "for the conclusion that a loss actionable in contract rather than tort can never constitute a covered 'occurrence' under a CGL policy" (¶ 43).

The court next addressed the policies' exclusions. "[B]ecause the property damage at issue here was neither expected nor intended, the 'expected or intended' exclusion does not apply" (¶ 7). "The 'contractually-assumed liability' exclusion (upon which the court of appeals rested its no-coverage conclusion) eliminates coverage for damages the insured is obligated to pay 'by reason of the assumption of liability in a contract or agreement.' We conclude that this language does not exclude coverage for all breach of contract liability. Rather, it excludes coverage for liability that arises because the insured has contractually assumed the liability of another, as in an indemnification or hold harmless agreement. There is no indemnification or hold harmless agreement at issue here, so this exclusion does not apply" (¶ 8).

The court also held "that while the 'business risk' or 'your work' exclusions ordinarily would operate to exclude coverage under the circumstances of this case, the 'subcontractor' exception applies here. The subcontractor exception to the business risk exclusion restores coverage if 'the work out of which the damage arises' was performed by a subcontractor" (¶ 9). Furthermore, it held that "the 'professional services liability' exclusion in the excess policies applies under the circumstances of this case. And finally, coverage under the policies issued after the property damage loss was substantially known to the parties [was] barred by the 'known loss' doctrine" (¶ 10).

Chief Justice Abrahamson and Justice Wilcox did not participate. Justice Crooks, joined by Justice Roggensack, dissented; his dissent primarily addresses the economic loss doctrine. Justice Roggensack also filed a separate dissent (joined by Justice Crooks), which concluded that there was no covered "occurrence" under this policy.

Sexually Violent Persons

Supervised Release - District Attorneys

State v. Morford, 2004 WI 5 (filed 3 Feb. 2004)

This case involves whether "Wis. Stat. § 806.07(1)(h) or 980.08(6m) is the vehicle for changing the supervised release status for an individual who, like [Respondent] Morford, has been determined to be appropriate for supervised release but who remains institutionalized awaiting placement" (¶ 4). For the fourth time since 1996 the court was called upon to address "in a published case the appropriate procedure for reconsidering a chapter 980 committee's supervised release" (¶ 10). Although the record presented a "mootness" issue (Morford was since placed on supervised release), the court concluded that the issue was likely to arise again and should be reviewed.

Writing for the court, Chief Justice Abrahamson declared the following rights. "First, ... the text of Wis. Stat. § 980.08(6m) can be read to support the notion that if a [person committed under] chapter 980 is awaiting placement on supervised release and continues to be held in a secure facility, the department may petition for revocation of a determination of supervised release. Second, Wis. Stat. § 980.08(6m) provides a comprehensive scheme for releasing chapter 980 committees on supervised release and for revoking supervised release. By effectively occupying the field on the subject, the legislature implicitly sought to preclude procedural short-cuts like the one provided by § 806.07(1)(h). ... Third, using Wis. Stat. § 806.07(1)(h) to grant the state relief from supervised release presents far more tortuous interpretive issues than reading § 980.08(6m) as governing the present case. Individuals committed under chapter 980 are entitled to due process protections such as reasonable notice, the right to counsel, the right to remain silent, the right to present and cross-examine witnesses, and the use of the heightened burden of proof of clear and convincing evidence. Section 806.07(1)(h) does not provide these protections" (¶¶ 43-45). Fourth, the court was also concerned that "engrafting" chapter 980 onto Wis. Stat. section 806.07(1) promised only troublesome "future litigation" (¶ 48). "Fifth, allowing a circuit court or district attorney to initiate proceedings on their own motion using Wis. Stat. § 806.07(1)(h) to grant the state relief from supervised release is inappropriate because it circumvents the important gate-keeping function of the Department of Health and Family Services" (¶ 52).

In conclusion, the court held that "Wis. Stat. § 980.08(6m), rather than § 806.07(1)(h), governs granting relief to the state from a chapter 980 committee's supervised release when the committee is confined in an institution awaiting placement on supervised release. Any language or inference in State v. Castillo, State v. Williams, or State v. Sprosty, limiting the application of § 980.08(6m) to situations in which a chapter 980 committee has actually been released into the community under supervised release, is withdrawn" (¶ 56) (citations omitted).

Justice Crooks, joined by Justices Wilcox and Roggensack, concurred but wrote separately because "Wis. Stat. § 806.07(1)(h) was used appropriately here to consider a person's supervised release status when that person has not as yet been released" (¶ 57).

Wisconsin Lawyer