WISCONSIN SUPREME COURT CALENDAR AND CASE SYNOPSES September 2007 This calendar contains cases that originated in the following counties: Clark Marathon Milwaukee Outagamie Washington Waukesha To be heard in the Wisconsin Supreme Court Hearing Room, 231 East Capitol: WEDNESDAY, SEPTEMBER 5, 2007 9:45 a.m. 05AP886 Robert Stuart, et al. v. Weisflog's Showroom Gallery, Inc., et al. 10:45 a.m. 05AP1287 Robert Stuart, et al. v. Weisflog's Showroom Gallery, Inc., et al. 1:30 p.m. 06AP1826-CRAC State v. Ronald Schaefer TUESDAY, SEPTEMBER 11, 2007 9:45 a.m. 05AP1424 James Gumz, et al. v. Northern States Power Co. 10:45 a.m. 05AP1677 Ralph Schmidt, et al. v. Northern States Power Co., et al. 1:30 p.m. 05AP3087-CR State v. Scott M. Hambly WEDNESDAY, SEPTEMBER 12, 2007 9:45 a.m. 05AP2643 Kevin Summers v. Touchpoint Health Plan, Inc. 10:45 a.m. 06AP1114-CR State v. Michelle R. Popenhagen 1:30 p.m. 05AP1638 Hjalmer Heikkinen, et al. v. United Srvcs. Autom. Assn., et al. The Supreme Court calendar may change between the time you receive this synopsis and when the cases are heard. It is suggested that you confirm the time and date of any case you are interested in by calling the Clerk of the Supreme Court at 608-266-1880. That office will also have the names of the attorneys who will be arguing the cases. Radio and TV, and print media wanting to take photographs, must make media requests 72 hours in advance by calling Supreme Court Media Coordinator Rick Blum at 608-271-4321. Summaries provided are not complete analyses of the issues presented. WISCONSIN SUPREME COURT WEDNESDAY, SEPTEMBER 5 9:45 a.m. 05AP886 Robert Stuart, et al. v. Weisflog's Showroom Gallerv, LLC. et al This is a review of a decision of the Wisconsin Court of Appeals, District II (based in Waukesha), which affirmed in part and reversed in part, a decision by Wauukesha County Circuit Court, Judge Patrick C. Haughney, presiding. This case involves a dispute over responsibility for damages and attorney fees resulting from a faulty remodeling project. After discovering some problems with a home addition supplied by Weisflog's Showroom, Robert Stuart and Lin Farquhar-Stuart sued the company, Ronald Weisflog individually and their insurer, American Family. A claim of breach of contract was dismissed, but the case proceeded to trial on claims of negligence and a violation of the Home Improvement Act, Wis. Admin. Code ch. ATCP 110, for alleged misrepresentations by Weisflog's Showroom. A jury found in favor of the Stuarts and against Weisflog's Showroom, awarding $95,000 in damages. Damages were allocated 75 percent to the negligence claim and 25 percent to the claim of a violation of the Home Improvement Act. The circuit court doubled the 25% of damages attributable to the violation of the Home Improvement Act, pursuant to Wis. Stat. § 100.20. The circuit court also denied American Family's motion for summary judgment to bar coverage and any duty to defend. The Court of Appeals affirmed the circuit court's rulings and judgment on the merits, with the exception that it remanded the case to the circuit court for a retrial of Ronald Weisflog's individual liability. The Court of Appeals also remanded to the circuit court for the doubling of the entire damage award (not just 25% of it) and a re- determination of attorney fees. Both Weisflog and American Family sought Supreme Court review of this case in separate petitions. (See synopsis for companion case 2005AP1287, which more specifically addresses insurance coverage issues arising from the underlying dispute). This case, 2005AP886, examines a variety of legal issues. But the primary focus of both petitions is whether the entire damage award should have been doubled under the Home Improvement Act, even if certain damages were allocated by the jury to a legal theory (negligence) under which damages are not usually doubled. The defendants also argue that the Stuarts' claims were really contract-type claims, which were subject to the statute of limitations for breach of contract actions as well as the economic loss doctrine. A decision by the Supreme Court would have statewide significance and help clarify the law regarding the amount of damages allowed under the Home Improvement Act, as well as the applicability of the statute of limitations and the economic loss doctrine. WISCONSIN SUPREME COURT WEDNESDAY, SEPTEMBER 5 10:45 a.m. 05AP1287 Robert Stuart, et al. v. Weisflog's Showroom Gallery. Inc. et al This is a review of a published decision of the Wisconsin Court of Appeals, District II (headquartered in Waukesha), which affirmed a decision by Waukesha County Circuit Court, Judge Patrick C. Haughney, presiding. 'I'his case addresses insurance claims resulting from a dispute over a faulty remodeling project. (See synopsis for companion case 2005AP886). American Family Mutual Insurance Co. petitioned the Supreme Court for review of the Court of Appeals’ opinion affirming that American Family's comprehensive general liability (CGL) policy covers the damage award against Weisflog's Showroom and potentially Ronald Weisflog, if he is found to be personally liable on remand. Among other things, American Family argues that coverage should have been denied because its policy contained an exclusion from coverage for claims alleging misrepresentations by the insured. The court of appeals rejected this argument because it considered claims for false statements in violation of the Home Improvement Act to be distinct from claims for common law misrepresentation. American Family presents the following issues for review: 1. Does a CGL policy which already excludes coverage for “misrepresentations” have to separately list statutory or administrative code misrepresentations for those misrepresentations to be excluded from coverage? 2. Do misrepresentation claims under Admin. Code § ATCP 110.02 trigger coverage, even though intent is an element of these misrepresentations? 3. Is the coverage exclusion for property damage to “your product” inapplicable even though this remodeling/home construction project fits the court's definition of “your product” and requires a finding that there is no coverage for faulty construction? 4. Are double damages and attorney fees penalties under Wis. Stat. § 100.20 (5) covered by an insurance policy even though they arise out of intentional conduct? 5. Does the economic loss doctrine apply to preclude claims from negligence and associated damages? A decision by the Supreme Court could help settle several questions of law that could affect the insurance industry statewide, including how specific a policy exclusion must be to bar coverage for misrepresentations by the insured. WISCONSIN SUPREME COURT WEDNESDAY, SEPTEMBER 5, 2007 1:30 p.m. 2006AP1826-CRAC State v. Ronald Schaefer This is a certification from the Wisconsin Court of Appeals, District II (headquartered in Waukesha). The Court of Appeals may certify cases that it believes cannot be resolved by applying current Wisconsin law. The Wisconsin Supreme Court, as the state's preeminent law-developing court, often accepts such certifications from the Court of Appeals. This case began in Waukesha County Circuit Court, Judge Ralph M. Ramirez, presiding. This case presents the question of whether a defendant has a right to obtain by subpoena, and to copy, police investigation reports and non-privileged materials prior to the preliminary hearing. On May 25, 2006, Ronald Schaefer was charged with two counts of second- degree sexual assault of a child in Brookfield for acts that allegedly occurred in 1990. Ten days before the preliminary hearing, Schaefer subpoenaed the Brookfield Police Department, directing police to produce a complete copy of all reports, memoranda, witness interviews and any records related to the investigation and arrest. A court commissioner, and subsequently, the circuit court, quashed the subpoena. The court of appeals granted Shaefer’s motion for leave to appeal this decision. Schaefer contends that his attorney cannot provide effective assistance, including the ability to cross examine witnesses unless he has access to this information. He contends there is no statutory prohibition on his attempt to obtain non-privileged information from the police department in advance of the preliminary hearing, by subpoena. The state argues that Schaefer is attempting to evade a discovery statute [Wis. Stat. § 971.31 (5) (b)], which provides that pretrial discovery from the district attorney in felony cases does not occur until after arraignment. The Supreme Court is expected to clarify important legal issues involving the interaction of subpoena powers, criminal discovery statutes, and a defendant’s right to obtain information he or she deems necessary for effective representation. WISCONSIN SUPREME COURT TUESDAY, SEPTEMBER. 11, 2007 9:45 a.m. 2005AP1424 Gumz v. Northern States Power This is a review of a decision of the Wisconsin Court of Appeals, District III (headquartered in Wausau), which affirmed a Marathon County Circuit Court decision, Judge Gregory E. Grau, presiding. This stray-voltage case examines, among other things, application of the statute of limitations and if a jury should have been given special instructions to consider whether – and to what degree – an electric utility or dairy farmers may have been responsible for the poor health of a dairy herd. James and Michael Gumz, who had purchased their parent’s Marathon County dairy farm in 1981, first noticed problems with their herd, including poor milk production, various health issues and death, in 1991. On Dec. 21, 2001, Grace, James, Michael and Susan Gumz (the Gumzes) sued Northern States Power (doing business as XCEL Energy), alleging claims for negligence, nuisance, strict liability and trespass. Only the negligence claim proceeded to trial, where NSP introduced testimony of a veterinarian, who said Gumzes had been negligent in managing their herd. The circuit court allowed the testimony, but refused NSP’s request for a jury instruction and special verdict question on whether Gumzes had acted with reasonable diligence in discovering the cause of their claimed injuries. The utility company claims stray voltage levels, as measured between a cow and a contact point, did not exceed a level of concern standard set by the state Public Service Commission. The jury returned a verdict in favor of the Gumzes, awarding $332,336 for economic damages and $200,000 for annoyance, inconvenience and loss of use and enjoyment of their real property. The Court of Appeals affirmed the judgment based on the jury verdict. NSP argues the Court of Appeals decision effectively eliminates the six-year statute of limitations and contributory negligence bars in stray voltage cases. A decision by the Supreme Court could clarify law on issues that seem likely to recur in other stray voltage cases. WISCONSIN SUPREME COURT TUESDAY, SEPTEMBER 11, 2007 10:45 a.m. 2005AP1677 Schmidt, et al v. Northern States Power Comany This is a review of a decision of the Wisconsin Court of Appeals, District IV (headquartered in Madison), which reversed a Clark County Circuit Court decision, Judge Jon M. Counsell, presiding. This case examines how the statute of limitations and “the filed rate doctrine” apply to a stray voltage case. Dairy farmers Ralph and Karline Schmidt began noticing low milk production and various health problems, including breeding difficulties and an unusually high mortality rate in their cattle shortly after purchasing a Clark County farm in the late 1970s. In 1993, the Schmidts hired a master electrician, who concluded NSP’s system was causing a stray-voltage problem. NSP denied the utility was causing the problem, and tests conducted by NSP never showed stray voltage passing through animals that exceeded the Public Service Commission’s “level of concern” standard. Dairy herd health improved briefly after some electrical system upgrades, but the Schmidts sued NSP in November 2001, after problems allegedly resurfaced. The circuit court granted NSP’s motion for summary judgment, concluding that the statute of limitations had expired because the Schmidts allegedly knew NSP’s system was the cause of their injuries as early as 1993, which triggered the start of the six-year statute of limitations. The Court of Appeals overturned the circuit court decision, however, concluding that the moment of discovery could be interpreted differently. NSP maintained that the Schmidts should not be allowed to in effect “undiscover” their claims against NSP based on the 1993 tests performed by their own electrician because NSP's subsequent tests did not show an excessive amount of stray voltage. The Court of Appeals also rejected the circuit court’s conclusion that the Schmidt’s claims were barred by the filed rate doctrine, which guides utility rates. Because the company complied with stray voltage standards laid out in the PSC’s rate- filing rules, NSP should not be liable, the company contends. A decision by the Supreme Court could help clarify the law and if the filed-rate doctrine applies to non-rate related terms, such as regulations on stray voltage. WISCONSIN SUPREME COURT TUESDAY, SEPTEMBER 11, 2007 1:30 p.m. 2005AP3087-CR State v. Hambly This is a review of a decision of the Wisconsin Court of Appeals, District II (headquartered in Waukesha), which affirmed a Washington County Circuit Court decision, Judge Patrick J. Faragher, presiding. This petition asks the Supreme Court to review whether defendant Scott Hambly was subjected to the functional equivalent of an interrogation and if his request for an attorney was properly honored. Two Washington County detectives arrested Hambly as he was leaving his car in the parking lot of his apartment building on Sept. 22, 2003. Hambly declined a request to go to the police department to discuss drug transactions that allegedly involved Hambly. Hambly said he didn’t want to talk and asked detectives to come back another day. He was then arrested and handcuffed. While approacing the squad, Hambly said he wanted to talk to an attorney, which a detective said he could do later at the jail. While sitting in the squad, Hambly said he didn’t know what was going on, and that he wanted to talk to a detective to find out what his options were. Hambly did not ask for an attorney after being read his Miranda rights. During a one-hour interview, police told Hambly they believed he sold cocaine to a police informant, and Hambly allegedly acknowledged doing so. The circuit court concluded that the defendant initiated the discussion with the detective after invoking his right to counsel, and that he freely, knowingly and voluntarily waived his Miranda rights. A jury found Hambly guilty in a decision that was upheld by the court of appeals. Hambly argues the circuit court should have granted his motion to suppress incriminating statements, in part, because a detective engaged in the functional equivalent of an interrogation. He also maintains his right to an attorney was violated. A decision by the Supreme Court could help clarify statutes and past court decisions regarding the right to an attorney and whether “the functional equivalent of an interrogation” can be determined by objective test or a subjective one. WISCONSIN SUPREME COURT TUESDAY, SEPTEMBER 12, 2007 9:45 a.m. 2005AP2643 Kevin Summers v. Touchpoint Health Plan, Inc. This is a review of a decision of the Wisconsin Court of Appeals, District III (headquartered in Wausau), which reversed an Outagamie County Circuit Court decision, Judge Dee R. Dyer, presiding. This case examines whether a particular type of chemotherapy should have been covered under the provisions of a health-benefit plan and if a court remedy for the alleged improper denial of benefits was appropriate. The health-benefit plan was issued by Kimberly Clark Corp. and administered by Touchpoint, a health maintenance organization. Some background: Kimberly Clark employee Kevin Summers’ son, Parker, was diagnosed with a rare brain tumor in October 2002. Touchpoint approved the referral to UW Hospital and the surgery to remove the tumor. After the surgery, a pediatric oncologist at the hospital recommended treatment of high-dose chemotherapy with stem-cell rescue because it has a higher cure rate than conventional chemotherapy. The oncologist sought approval to enroll Parker in a clinical trial being conducted by a physician at New York University Medical School, but Touchpoint denied this coverage because the plan excluded experimental and investigational procedures. The denial was upheld by an independent review panel. The UW Hospital oncologist removed Parker from the study, but gave him the same treatment. Touchpoint again denied coverage for that treatment in a Dec. 12, 2002 letter, but did not include in its second denial letter information on the reasons for the denial and how Summers could get review, which is generally required by federal law. The Summers sued in circuit court, which granted summary judgment in favor of Touchpoint, concluding denial was reasonable, given the policy exclusion. The Court of Appeals reversed. Although the Court of Appeals reviewed Touchpoint's denial under a deferential standard (whether the decision was "arbitrary and capricious"), it concluded that Touchpoint's second denial was improper because its letter failed to include the required items. Although the Court of Appeals invalidated the denial for a procedural error by Touchpoint and not because the treatment was covered under the terms of the Kimberly Clark health plan, the Court of Cppeals remanded the case with instructions to the circuit court to order retroactive reinstatement of benefits. Touchpoint argues Supreme Court review is warranted in this case because the Court of Appeals has ordered a substantive remedy for a procedural violation contrary to the terms of federal law and court decisions. It also claims that the Court of Appeals improperly awarded retroactive benefits without the parties having notice that such a remedy was under consideration. A decision by the Supreme Court could help clarify Wisconsin law and how it interacts with federal law regarding health benefits. WISCONSIN SUPREME COURT WEDNESDAY, SEPTEMBER 12, 2007 10:45 a.m. 2006AP1114-CR State v. Michelle R. Popenhagen This is a review of a decision of the Wisconsin Court of Appeals, District III (headquartered in Wausau), which reversed an Oneida County Circuit Court decision, Judge Mark A. Mangerson, presiding. This case examines whether a person has a protected right to privacy of bank records under Wisconsin law and how state law interacts with federal law regarding the question. Police say they believe Michelle R. Popenhagen may have improperly obtained as much as $29,000 from Save More Foods, where she worked in Minocqua. The store owner claimed that Popenhagen had cashed at the store a number of checks with insufficient funds or from a closed account and had stolen the store's money when making deposits into an ATM located in the store. Minocqua Police obtained subpoenas for Popenhagen’s bank records from the district attorney’s office. But there was no record of how the district attorney’s office obtained a judge’s signature, and the record of the circuit court proceedings did not indicate findings of probable cause by a judicial officer as required under Wis. Stat. § 968.12. When police confronted Popenhagen with records showing that the amount of missing money matched deposits she had made, she made a number of self-incriminating statements. Popenhagen filed a motion, seeking suppression of both the bank records and statements, and the circuit court granted it. The court concluded Popenhagen had a constitutional right to privacy in her bank records and that suppression was an appropriate remedy. The court of appeals reversed the suppression order, citing the U.S. Supreme Court’s decision in United States v. Miller, 425 U.S. 435 (1976). In that case, the Supreme Court concluded that bank records are not private papers of the account holders, but business records of the bank. The state argues that the Court of Appeals relied on well-established precedent, and that Popenhagen has no legal basis for arguing that the state Constitution protects bank records. A decision by the Supreme Court could determine how state and federal law may differ as it relates to privacy of bank records. WISCONSIN SUPREME COURT WEDNESDAY, SEPTEMBER 12, 2007 1:30 p.m. 2005AP1638 Hjalmer C. Heikkinen, et al v. United Services Automobile Assn., et al This is a review of a decision of the Wisconsin Court of Appeals, District I (headquartered in Milwaukee), which affirmed a Milwaukee County Circuit Court decision, Judge Michael Guolee, presiding. This case is essentially an insurance coverage dispute growing out of an automobile accident on March 25, 2002. Margaret Morse drove through a red light and struck a vehicle driven by Hjalmer Heikkinen, who suffered injuries that resulted in the amputation of one of his legs and the loss of control over his bladder and bowel functions. When the accident occurred, Morse, a member of Christ King Parish in Brookfield, was on her way to deliver a statue of Mary to a family in a different parish. She was delivering the statue as part of a program conducted by the Christ King Legion of Mary, a local branch of a service organization composed of members of Christ King Parish. Heikkinen and his wife sued Morse and her automobile insurer, the United Services Automobile Agency (USAA). Morse, in turn, brought a third-party complaint against the Archdiocese of Milwaukee, in which Christ King is located, and against Catholic Mutual, which covered the archdiocese and the Christ King parish. While this case comes to the Supreme Court in the context of whether the circuit court’s jury instructions and special verdict were adequate, the key question involves whether Morse’s actions at the time of the accident were covered by Catholic Mutual's liability insurance certificate. Although the Legion of Mary was not listed as a covered organization, the certificate provided coverage for persons “acting within the scope of their duty or in their official capacity as such” for the Archdiocese or Christ King Parish. Catholic Mutual argues the Court of Appeals’ decision conflicts with current law and is the first court decision to give the impression that action “on behalf of” an entity legally means the same thing as “acting within the scope of one’s duties” for that organization. A decision by the Supreme Court could clarify the law and determine the scope of coverage based on such language.
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