Wisconsin Supreme Court accepts four new cases
Madison, Wisconsin - April 10, 2017
The Wisconsin Supreme Court has voted to accept four new cases and acted to deny review in a number of other cases. The case numbers, issues, and counties of origin of granted cases are listed below. Hyperlinks to Court of Appeals' decisions are provided where available. The synopses provided are not complete analyses of the issues. More information about any particular case before the Supreme Court or Court of Appeals can be found on the Supreme Court and Court of Appeals Access website.
2015AP175 Deutsche Bank National Trust Company v. Wuensch
Supreme Court case type: Petition for Review
Court of Appeals: District IV
Circuit Court: La Crosse County, Judge Todd W. Bjerke, reversed
Long caption: Deutsche Bank National Trust Company, plaintiff-respondent-petitioner, v. Thomas P. Wuensch, defendant-appellant, Heidi Wuensch, appellant
- Whether a trial court may accept as proven fact that plaintiff in a residential foreclosure action possesses the original promissory note at issue when counsel presented the originally executed (i.e., "wet-ink") note to the court and Wis. Stat. § 909.02(9) provides that commercial paper, such as promissory notes, are self-authenticating?
- Whether the Court of Appeals, after summarily reversing a judgment of foreclosure under Wis. Stat. § (Rule) 809.21(1), should have remanded the case to the trial court to allow petitioner an opportunity to provide sworn testimony that it possesses the note, thereby preventing, in the words of the Court of Appeals, a "highly inefficient result" that "elevates form over substance?"
A decision by the Wisconsin Supreme Court could resolve apparently conflicting decisions about what a lender needs to do to prove that it is the current owner of a note and also clarify the general evidentiary effect of the self-authentication rule of § 909.02.
Some background: In December 2006, Thomas P. Wuensch signed an adjustable rate note promising to repay HLB Mortgage $301,500. The note was secured by a mortgage on property Wuensch owned. The note contains two endorsements, one from HLB Mortgage to American Home Mortgage and the other from American Home Mortgage in blank.
Wuensch defaulted on the note and mortgage in 2008. Deutsche Bank filed a complaint to foreclose in August 2009. The complaint alleged that the bank was the lawful holder of the note. A copy of the note was attached to the complaint. Wuensch filed a pro se answer and affirmative defenses alleging, in part, that the bank lacked standing to foreclose. Wuensch filed an amended answer and affirmative defenses in February 2011 alleging, among other things, fraud and unclean hands. In April of 2013, Wuensch, through counsel, filed a "third amended pleading" which incorporated the original answer and affirmative defenses.
A bench trial was held during two days in May and June 2014. At the start of the trial but before the first witness was called, the bank's counsel identified to the court, over Wuensch's attorney's objection, two documents. The bank's attorney described one document as being the original note and the other as being a copy of the original note, with the copy having been marked as an exhibit. The bank's counsel, not having been sworn as a witness, said, "Your Honor, I'm handing [Wuensch's attorney] a copy of the original note. I also have the original here today. I'm going to allow [Wuensch's attorney] to inspect the original document and compare it to the copy."
Wuensch's attorney objected "on foundational grounds" and "to the plaintiff's counsel testifying." The circuit court noted that it had not "heard any testimony yet." The court said the purported original and copy appeared to be identical, and the court admitted the purported copy into evidence over Wuensch's attorney's repeated objection that the bank had failed to produce a proper witness to testify about the purported original note.
Based on this record, the circuit court found that the bank possessed the original note at the time of trial and that the bank was the holder of the original note with the right to enforce it.
The only witness called by the bank was a loan analyst for the servicer of the note who testified about the payment history and amounts that Wuensch owed. Wuensch testified about his difficulties in communicating with American Home Servicing, Inc., and in obtaining accurate information about the status of the loan.
The circuit court granted judgment of foreclosure in favor of the bank in the amount of $455,641.85. Wuensch appealed, and the Court of Appeals reversed.
The appellate court said the pleadings placed possession of the original note in dispute, and it said there was no dispute that this was an issue the bank had to prove at trial. See § 401.201(2)(km)1., Stats.
The Court of Appeals agreed with Wuensch that where the bank's counsel did not take an oath and did not lay a foundation to establish personal knowledge about possession of the original note, the bank's counsel was not acting as a witness on whose statements or implied statements the circuit court could rely to prove possession of the note. The appellate court said given Wuensch's unambiguous objections at trial, sworn testimony from someone with personal knowledge was necessary.
The Court of Appeals said the plaintiff was obligated to prove, under the rules of evidence, that the document in the plaintiff's counsel's hands in fact came from his client and not from some other person or entity.
The bank points out that on March 31, 2016 the District IV Court of Appeals issued a decision in another case which appears to come to the opposite result. In Bank of New York Mellon v. Harrop, No. 2014AP2200, District IV held "the fact that . . . counsel is representing the [Bank] in this case, has the note physically in his possession, is enough to establish that the note is in possession of the [Bank]."
The bank goes on to argue that if the Court of Appeals' decision is allowed to stand, it would place an unnecessary and expensive requirement on lenders to produce witnesses at trial regarding the possession of a note when plaintiff's counsel, an agent of the foreclosing party, produces a self-authenticating original "wet-ink" at trial that establishes possession.
In the alternative here, the bank says justice would be served if the case were allowed to be remanded to the circuit court in order to afford the bank an opportunity to provide sworn testimony regarding its possession of the note.
2015AP1904 Halbman v. Barrock
Supreme Court case type: Petition for Review
Court of Appeals: District I [Dist. II judges]
Circuit Court: Milwaukee County, Judge Dennis P. Moroney, affirmed
Long caption: Mark Halbman, plaintiff-appellant-petitioner, v. Mitchell J. Barrock D/B/A Barrock & Barrock, defendant-respondent
Issues presented: This case examines the burden of proof a plaintiff must meet when establishing damages sustained as a result of an attorney's malpractice. The Supreme Court reviews:
- Whether the Court of Appeals erred in affirming the circuit court's grant of the defendant's motion to dismiss on the basis that the plaintiff had failed to establish a prima facie case as to damages?
- Whether the circuit court erred in ruling that the value of the plaintiff's underlying case was conclusively established at the second trial and therefore, precluding the plaintiff from introducing evidence of the first jury verdict of $182,250.00?
Some background: In August of 2000, Mark Halbman retained Atty. Mtichell J. Barrock to represent him in a lawsuit related to a motor vehicle accident. A jury trial held in 2004 resulted in a verdict in Halbman's favor in the amount of $182,250 plus court costs. Pursuant to a post-verdict motion, the circuit court declared a mistrial and ordered a new trial, due in part to improper comments Barrock had made during closing argument. Halbman appealed. The Court of Appeals affirmed.
A new trial was held in 2006. According to Halbman's testimony at the legal malpractice trial that underlies this action, the jury in the second trial returned a verdict in his favor in the amount of $36,000, which ultimately resulted in a check for $29,653.14 made out to Halbman and Barrock. The check was sent to Barrock from the insurer of the defendant in the motor vehicle case. Halbman testified in the legal malpractice suit that Barrock deposited the check without Halbman's approval and that Halbman did not receive any money from the verdict.
In 2011, Halbman filed a legal malpractice action against Barrock, based on the improper comments Barrock had made during closing arguments in the first jury trial. At the trial in the legal malpractice suit, Halbman presented evidence that included his retainer contract with Barrock, which provided, in part:
"… [t]he Attorneys' fee shall be a sum equal to . . . Thirty three and one third percent of the total valued amount recovered . . . [and] the Attorneys shall be entitled to recover their costs and expenses, and any judgment costs, regardless of the outcome of the legal action as a cost to be paid prior to the payment of any other costs or disbursement."
After Halbman rested, Barrock moved for dismissal of the suit on the basis that Halbman had failed to present a prima facie case as to damages. The circuit court granted the motion, saying, "I never saw any figures up here about" costs and expenses incurred, "I can't guess at that. It's your duty to prove that; that's your burden."
The Court of Appeals affirmed, finding that a circuit court is "clearly wrong" when it grants a motion to dismiss despite the existence of any credible evidence to support a claim. It also noted that a circuit court must consider the evidence in the light most favorable to the plaintiff. See Haase v. Badger Mining Corp., 2004 WI 97, ¶15, 274 Wis. 2d 143, 682 N.W.2d 389.
The Court of Appeals said Halbman failed to account for the "costs and expenses" that were required to be paid pursuant to the retainer agreement and he cited to no trial evidence as to the amount of costs and expenses the jury would have to deduct under the retainer agreement in order to render a lawful verdict.
2015AP1906 G&D Properties, LLC v. Milw. Met. Sewerage Dist.
Supreme Court case type: Petition for Review
Court of Appeals: District I
Circuit Court: Milwaukee County, Judge Jeffrey A. Conen, affirmed
Long caption: G&D Properties, LLC, Kardon, Inc., Systems Engineering Company, Inc., Cecile Edirisinghe, Velicon, Ltd., Kenneth Dragotta, David Garms and Systems Engineering & Automation Corp., plaintiffs-appellants-petitioners, v. Milwaukee Metropolitan Sewerage District, defendants-respondents
Issues presented: This case examines Wis. Stat. § 893.80, which governs "Claims against governmental bodies or officers, agents or employees; notice of injury; limitation of damages and suits." More specifically, the case explores whether G&D Properties, LLC complied with § 893.80(1d) in notifying the Milwaukee Metropolitan Sewerage District (MMSD) for its claim of damage caused by flooding of stormwater and sewage.
G&D presents the issues this way:
- Even though plaintiffs did not file a formal notice of claim to defendants within 120 days of the July 22, 2010 flood, did plaintiffs satisfy the notice of claim requirements of Wis. Stat. § 893.80(1d)(a) when they filed formal notice of claim within 120 days of receiving from MMSD a specifically requested flow study of the combined sewer overflow system that affected plaintiffs' property?
- Wisconsin Stat. § 893.80(1d)(a) provides that "[f]ailure to give the requisite notice shall not bar action on the claim if" the government entity being sued "had actual notice of the claim and the claimant shows . . . that the delay or failure to give the requisite notice has not been prejudicial to the defendant . . ." Did defendants have "actual notice" of plaintiffs' claim as a matter of law?
- Did plaintiffs satisfactorily demonstrate that their alleged failure to give the "requisite notice" was not "prejudicial" to defendants?
Some background: G&D owns a building that it leases to three different companies, two of which rely on expensive manufacturing machinery to conduct their business. During a heavy rainfall on July 22, 2010, G&D's property was flooded with water and sewage. Nearly all the machinery on the main level was contaminated by sewage. The flood also washed away significant amounts of the gravel bed underneath the building's foundation, causing a portion of the floor of the building to collapse. In all, G&D claims to have incurred over $2.3 million in damages.
Kenneth Dragotta, one of the members of G&D, and an engineer, met multiple times with MMSD representatives and repeatedly e-mailed the district seeking an explanation for the flooding before ultimately filing a claim. MMSD completed a "flow study" in early December 2011, at which time MMSD forwarded it to Dragotta. Dragotta read the study and, with his engineering background, determined that MMSD was responsible for the July 22, 2010 flood due to several design problems with the sewer equipment near his property. According to Dragotta, the study shows that the sewer pipes underneath the G&D property are considerably undersized.
Dragotta, along with the other members of G&D, retained a lawyer, who filed a notice of claim for $2,333,438.84 in damages on March 30, 2012; i.e., within 120 days of Dragotta's receipt of the flow study. The claim was deemed denied. See Wis. Stat. § 893.80(1g) (providing that after 120 days without a response, a claim is deemed disallowed).
G&D filed suit in Milwaukee County Circuit Court.
The trial court held, and the Court of Appeals agreed, that MMSD and the city did not have "actual notice of the claim" sufficient to satisfy Wis. Stat. § 893.80(1d). This was so because, while MMSD and the city were aware that G&D suffered flood damage, they were not aware that G&D intended to file a claim alleging that MMSD and the city were the parties responsible for the damage.
The trial court also held, and the Court of Appeals agreed, that MMSD and the city were prejudiced by G&D's "delay in filing its notice" because MMSD did not have the opportunity to budget for G&D's very significant claim.
G&D asks the Supreme Court to consider whether the 120-day notice-of-injury-clock in § 893.80(1d)(a) starts running upon the realization of an injury or upon the realization of the cause of the injury.
G&D also asks how MMSD and the city could have lacked actual notice of the claim, given the communications and discussion that occurred with the district. G&D argues that, given what the city knew, it had ample opportunity to compromise and settle G&D's claim without litigation if it so desired, as intended under § 893.80.
MMSD argues that there is no support for G&D's proposition that a discovery rule should apply to Wis. Stat. § 893.80. MMSD adds that the 120-day limit would be rendered meaningless if it only began to run when definitive proof of liability is established to the satisfaction of the claimant, as G&D suggests.
The city argues that although "[t]here is evidence of inquiry as to the 'why' of the flooding event and the desire to prevent a recurrence," there is "no evidence that G&D told the city that it believed the city to be responsible for the flooding and that they were holding it responsible, or, in other words, that they were making a 'claim' against it."
The Supreme Court is expected to decide whether G&D satisfied the notice requirements under § 893.80(1d).
Justice Rebecca Grassl Bradley and Justice Daniel Kelly did not participate.
2015AP2224 Wis. Assoc. of State Prosecutors v. Wis. Employment Relations Comm.
Supreme Court case type: Petition for Review
Court of Appeals: District I
Circuit Court: Milwaukee County, Judge John J. DiMotto, affirmed
Long caption: Wisconsin Association of State Prosecutors and Service Employees International Union, Local 150, plaintiffs-respondents, v. Wisconsin Employment Relations Commission, James R. Scott, and Rodney G. Pasch, defendants-appellants-petitioners
Issues presented: This case examines the recertification requirements for collective bargaining units under provisions of Wisconsin 2011 Act 10. The Supreme Court reviews whether rules promulgated by the Wisconsin Employment Relations Commission (commission) relating to filing deadlines for petitions to seek recertification exceeded the commission's authority as established by the Legislature.
Some background: Wis. Admin. Code § ERC 80 and § ERC 70 require that labor unions representing state employees or municipal school employees annually file a recertification petition by the end of business hours on Sept. 15, if they wish to appear on the next annual election's ballot.
The Wisconsin Association of State Prosecutors (WIASP) is a labor organization, as defined by Wis. Stat. § 111.81(12), representing a bargaining unit consisting of all assistant district attorneys in Wisconsin as set forth in Wis. Stat. § 111.825(2)(d). Local 150 is the exclusive collective bargaining agent for building helpers and food service workers employed by Milwaukee Public Schools and custodians employed by the Saint Francis School District.
Here is a brief timeline of some of the significant events in this case:
- On Sept. 15, 2014, both WIASP and Local 150 filed petitions for certification with the Commission, but about an hour or so after the 4:30 p.m. close of business hours. WIASP and Local 150 submitted their filing fees the following day, on Sept. 16, 2014.
- On Sept. 16, 2014, the Commission notified both WIASP and Local 150 that their petitions were untimely because: (1) they were not filed prior to 4:30 p.m. on Sept. 15, 2014; and (2) the filing fees had not been received by that date.
- On Oct. 14, 2014, the Commission advised WIASP and Local 150 that the petitions were not timely filed, that the election petitions would not be processed, and that no recertification elections would be held.
- On Nov. 11, 2014, WIASP filed an action for a declaratory judgment and writ of prohibition seeking to invalidate the provision in Wis. Admin. Code § ERC 80 requiring an existing exclusive representative to file an election petition and seeking relief in the form of a recertification election. On Nov. 13, 2014, Local 150 filed a similar lawsuit concerning Wis. Admin. Code § ERC 70.
- On Nov. 14, 2014, the Commission issued formal decisions with respect to the petitions of WIASP and Local 150, concluding in part, that a timely petition must be filed as "prerequisite to our conducting a certification election."
- Following the Commission's decision to dismiss the petitions, WIASP and Local 150 requested a rehearing pursuant to Wis. Stat. § 227.49; these requests were denied.
- On Jan. 15, 2015, WIASP and Local 150 filed petitions for judicial review.
- On March 18, 2015, WIASP and Local 150 filed a motion for summary judgment seeking its requested declaratory judgment, writ of prohibition, and orders setting aside the Commission's decision dismissing the plaintiffs' petitions for recertification elections.
- On July 31, 2015, the trial court issued a written order declaring those provisions of Wis. Admin. Code §§ ERC 70 and 80 requiring an existing exclusive representative to file a petition in order to qualify for a recertification election invalid. The trial court's order also reversed the Commission's decision denying the plaintiffs' recertification elections under Wis. Stat. §§ 111.83(3)(b) and 111.70(4)(d)3.b., and directed the Commission to hold such elections.
Following the circuit court's July 31, 2015 order, annual recertification elections were conducted in the fall of 2015 for both the WIASP and Local 150.
The Commission appealed the circuit court's order, unsuccessfully. It argued that the provisions of Wis. Admin. Code §§ ERC 70 and 80 at issue are presumptively valid and reasonable, and that they do not exceed the Commission's statutory authority. The Court of Appeals noted that when a statute and an administrative rule conflict, the statute prevails. See DeBeck v. DNR, 172 Wis. 2d 382, 388, 493 N.W.2d 234 (Ct. App. 1992). The Court of Appeals ruled that, because the Legislature instructed that the Commission "shall" conduct an election to certify the representative of a collective bargaining unit that contains a general employee, the Commission failed to do something that was obligatory.
The Commission argued that without requiring the filing of an election petition, the Commission would have no way of knowing whether the incumbent labor organization maintains an "interest" in representing the general employees. The Commission further argued that holding elections without requiring the filing of a petition would lead to the absurd result of holding an election without any names on the ballot.
The Court of Appeals ruled that under plain language of the statute, an incumbent labor organization remains the representative of the bargaining unit until it is decertified by the Commission after the votes are tallied.
The Commission contends that its enactment of Wis. Admin. Code §§ ERC 70 and 80 fell within its legislatively delegated authority to promulgate reasonable rules. The Commission also argues that the "shall conduct an election" language in §§ 111.83(3)(b) and 111.70(4)(d)3.b. does not impose a bar on requiring the filing of an election petition.
WIASP and Local 150 argue that if the statutes were intended to require an election petition as a prerequisite for holding a recertification election, the Legislature would not have used the mandatory term "shall" in directing the Commission to hold a recertification election. But the Legislature chose to use the word "shall," and the statute trumps the Commission's rules.
Review denied: The Supreme Court denied review in the following cases. As the state's law-developing court, the Supreme Court exercises its discretion to select for review only those cases that fit certain statutory criteria (see Wis. Stat. § 809.62). Except where indicated, these cases came to the Court via petition for review by the party who lost in the lower court:
2015AP813 State v. Flowers
2015AP2141-CR State v. Jackson
2015AP2183-CR State v. Hebert
2015AP1627-CR State v. Schultz — Justice Shirley S. Abrahamson dissents.
2015AP1865-CR State v. Moseley
2015AP2116 Fischer v. City of Prairie du Chien
2015AP2453 Larry v. Hayes
2015AP2540 State v. Powell
2016AP1472-73 Dane Co. DHS v. C.N.
2017AP156-W Hagberg v. Smith
2015AP2440-CR State v. Christianson
2015AP1384 Florence Co. v. WERC
Fond du Lac
2016AP825 Co. of Fond du Lac v. Ramthun — Justice Annette Kingsland Ziegler did not participate.
2015AP2555-CR State v. Schaefer — Justices Shirley S. Abrahamson and Ann Walsh Bradley dissent.
2015AP1748-49-CR State v. Walker
2015AP2044-CR State v. Williams — Chief Justice Patience Drake Roggensack dissents.
2015AP2320-CR State v. Queever
2016AP110-CR State v. Michel
2014AP953 Fisher v. Compassionate Doctors, Inc.
2014AP2395-CR State v. Townsend — Justice Rebecca Grassl Bradley did not participate. Justice Shirley S. Abrahamson dissents.
2015AP194-CR State v. Masarik
2015AP525-W Brown v. Tegels
2015AP1089-CR State v. Williams
2015AP1236-CR State v. Hill
2015AP1541-CR State v. Moore
2015AP1645-CR State v. Smith — Chief Justice Patience Drake Roggensack did not participate.
2015AP1685-86-CR State v. Wakefield
2015AP1775 State v. Jackson
2015AP1815-CR State v. Sato
2015AP1886 State v. Shepard
2015AP2121-W Townsend v. Richardson
2015AP2123-CR State v. McNeal
2015AP2222-CR State v. Caldwell
2015AP2315-CR State v. Evans — Justice Shirley S. Abrahamson dissents.
2015AP2340-CR State v. Kadlec
2015AP2487 Acuity v. Michalak
2015AP2563-CR State v. Lee
2015AP2565-CRNM State v. Spivery
2015AP2659 State v. Bridges
2016AP553-W Bransford v. Douma
2016AP1977-W James v. Eckstein
2016AP2069 (2015AP2608-CR)-W Kerk v. Smydon — Justice Shirley S. Abrahamson dissents.
2015AP2119 State v. A.S.W.
2015AP2120 State v. I.P.W.
2015AP1409-CR State v. Dunn
2016AP405-CRNM State v. Smith
2015AP1582-CR State v. Corbine
2015AP2598-CR State v. Evans
2015AP929-CR State v. Lisner
2015AP2465/2016AP422 Minter v. Noback
2015AP1243-CR State v. Garba
2015AP364-CR/2015AP1662 State v. Kuenzi
2015AP2251-CR State v. Dull
2015AP1589-CR State v. Whitcomb
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