author: CURLEY, J.

text:
    State of Wisconsin, Plaintiff-Respondent, v. Rudolph L. Jackson, Defendant-Appellant.

    Court of Appeals

      No. 03-1805-CR.

      Submitted on briefs March 2, 2004.

    Decided May 18, 2004.

    2004 WI App 132
    (Also reported in 685 N.W.2d 839.)

      On behalf of the defendant-appellant, the cause was submitted on the briefs of Andrea Taylor Cornwall, assistant state public defender.
    On behalf of the plaintiff-respondent, the cause was submitted on the brief of Peggy A. Lautenschlager, attorney general, and Jeffrey J. Kassel, assistant attorney general.
    Before Wedemeyer, PJ., Fine and Curley, JJ.

       Petition to review denied 8-2-04.

   CURLEY, J.

¶ 1. Rudolph L. Jackson appeals the judgment convicting him of one count of felony patient neglect, contrary to Wis. Stat. §§ 940.295(3)(a)l. and (b)lr (2001-02). He also appeals from the order denying his postconviction motion. Jackson argues that the assistant attorney general prosecuting the case breached the plea agreement in his sentencing remarks. We conclude that the prosecutor did not breach the terms of the plea agreement and affirm.

I. Background.

¶ 2. In January 2002, a Glendale police officer was dispatched to a local hospital after an emergency room nurse contacted the police department. The nurse told the officer that she examined an elderly Alzheimer's patient, K.K., with a broken arm and a fractured rib. She advised the officer that because no one at the nursing home facility where K.K. lived could explain how or when the injuries occurred, she called the police.

¶ 3. The officer then interviewed employees of the nursing home where K.K. lived. Several employees implicated Jackson. One employee, Angela Brown, recounted that the night before K.K. was hospitalized, she was in the kitchen talking to Jackson when K.K. wandered in. Jackson said, "He needs to go to bed now," and escorted K.K. to his room and closed the door. Brown told the police that she then heard K.K. yelling and the sounds of an apparent scuffle ensued. When Jackson exited the room, he told Brown that he had done nothing to K.K. and that K.K. had fallen and bumped his head.

¶ 4. After initially denying that anything had happened to K.K. in his presence, Jackson later recanted and stated that while he was administering K.K.'s medications on January 7, 2002, K.K. fell to the floor, striking his back and buttocks. Jackson also admitted that he failed to notify anyone about K.K.'s injuries and did not make any notation in the charts, contrary to the facility's policy.

¶ 5. As a result of the officer's investigation, Jackson was charged with one count of felony patient neglect. A plea negotiation was struck: Jackson agreed to plead guilty and the assistant attorney general agreed not to make a specific sentencing recommendation, but was free to argue what he believed were the mitigating and aggravating circumstances.

¶ 6. At sentencing, the assistant attorney general made a lengthy and compelling argument, but did not recommend a specific sentence. Following the prosecutor's statements, Jackson's attorney claimed that the prosecutor had breached the plea agreement. The trial court recessed the sentencing proceeding to research the issue. Upon reconvening, the trial court noted that the prosecutor had used "strong words," but determined that the plea agreement had not been breached, and proceeded to sentence Jackson. Jackson received a sentence of two years' imprisonment followed by two years' extended supervision. He now appeals.

II. Analysis.

¶ 7. Santobello v. New York, 404 U.S. 257 (1971), is the seminal case addressing the prosecutor's duties at sentencing after a plea agreement has been negotiated. If a guilty plea "rests in any significant degree on a promise or agreement of the prosecutor, so that it can be said to be part of the inducement or consideration, such promise must be fulfilled." Id. at 262. The rationale for this rule can be found in State v. Williams, 2002 WI 1, 249 Wis. 2d 492, 637 N.W.2d 733:

The principal rule of law applicable to the present case is that an accused has a constitutional right to the enforcement of a negotiated plea agreement. An agreement by the State to recommend a particular sentence may induce an accused to give up the constitutional right to a jury trial. Consequently, once an accused agrees to plead guilty in reliance upon a prosecutor's promise to perform a future act, the accused's due process rights demand fulfillment of the bargain.

Id., ¶ 37 (footnotes omitted).

¶ 8. Not only is a prosecutor obliged to fulfill the bargain, but the prosecutor may not render a less than neutral recitation of the plea agreement. See State v. Poole, 131 Wis. 2d 359, 364, 394 N.W.2d 909 (Ct. App. 1986). In order to meet this obligation, Santobello proscribes not only explicit repudiations of plea agreements, but also "end-runs around them." United States v. Voccola, 600 F. Supp. 1534, 1537 (D.R.I. 1985). Thus, the State is prohibited from accomplishing indirectly "what it promised not to do directly, and it may not covertly convey to the trial court that a more severe sentence is warranted than that recommended." See State v. Howland, 2003 WI App 104, ¶ 26, 264 Wis. 2d 279, 663 N.W.2d 340 (citation omitted).

¶ 9. Whether the State's conduct violated the terms of the plea agreement is a question of law that we review de novo. Williams, 249 Wis. 2d 492, ¶ 2. "An actionable breach must not be merely a technical breach; it must be a material and substantial breach." Id., ¶ 38 (footnote omitted). If a material and substantial breach occurred, the accused may be entitled to resentencing. Howland, 264 Wis. 2d 279, ¶ 26.

¶ 10. Jackson contends that the prosecutor breached the plea agreement. He argues that "[t]he [S]tate undercut its agreement to refrain from making a sentence recommendation and leave sentencing up to the court, by remarks designed to influence the severity of the sentence the court imposed in this case."

¶ 11. At the guilty plea proceeding, the prosecutor recited to the trial court that "at the time of sentencing [he would] refrain from making an affirmative sentencing recommendation, rather [he] would leave sentencing to the wisdom and discretion of the Court, arguing both the mitigating and aggravating circumstances surrounding this occurrence." The prosecutor's argument at sentencing covers over twenty pages of the transcript. In his remarks, he explained the underlying events that led to the charge. He informed the court that although K.K.'s subsequent death could not be attributed to the injuries that formed the basis of the charge against Jackson, as the autopsy revealed that they were not a cause of death, little was known of the injury-causing incident except for Jackson's explanation. He highlighted Jackson's bad character, but did note that in mitigation, Jackson had accepted responsibility and pled guilty. He also expressed his outrage at the willingness of other nursing home facilities to write recommendations on Jackson's behalf despite the criminal charge and, as a result, he urged the court to take deterrence into consideration when sentencing Jackson. Finally, he noted the serious nature of the offense. None of those statements violated the plea agreement.

¶ 12. Jackson relies principally on Williams for support, but Williams is not dispositive. Williams was charged with two counts of failure to pay child support. 249 Wis. 2d 492, ¶ 24. In exchange for the State dismissing one count and recommending a sentence of three years' probation with sixty days in the county jail, Williams pled guilty to the other count. Id. The trial court ordered a presentence investigation, and the presentence investigation report recommended " 'a medium term of imprisonment.'" Id., ¶ 25. In his sentencing remarks, the prosecutor summarized the damaging statements made by the presentence author and by Williams's ex-wife, and also advised the trial court that Williams's ex-wife wanted him to go to prison. Id., ¶ 26. In doing so, our supreme court determined that the prosecutor "stepped over the fine line between relaying information to the circuit court on the one hand and undercutting the plea agreement on the other hand." Id., ¶ 46. In summarizing the situation, the supreme court cautioned

that "what the prosecutor may not do is personalize the information, adopt the same negative impressions as [the author of the presentence report] and then remind the court that the [author] had recommended a harsher sentence than recommended. That is what happened here."

Id., ¶ 48 (citation and footnote omitted; alteration in original).

¶ 13. Here, the prosecutor only promised not to recommend a specific sentence. No specific sentence was ever expressed. Moreover, the prosecutor also reserved the right to bring all favorable and unfavorable information to the court's attention. Unlike in Williams, the prosecutor did not step over the line.

¶ 14. Jackson contends that the prosecutor breached the plea negotiation as his statements constituted an "end-run" around the prosecutor's agreement not to recommend a specific sentence. He claims that the prosecutor's comments were designed to influence the severity of the sentence. A similar complaint was made in State v. Ferguson, 166 Wis. 2d 317, 479 N.W.2d 241 (Ct. App. 1991). There, the prosecutor agreed to recommend imposed and stayed sentences, the length of which was to be determined by the trial court, followed by twenty years' probation. Id. at 319. The trial court declined to follow the State's recommendation and, instead, sentenced Ferguson to six years' imprisonment on one charge and stayed a ten-year prison sentence on the other, and placed Ferguson on probation for fifteen years. Id. at 320. Ferguson claimed that the prosecutor's comments "amounted to an 'explicit and outrageous character assault.'" Id. at 324. In concluding that the prosecutor's comments were appropriate, we observed: "At sentencing, pertinent factors relating to the defendant's character and behavioral pattern cannot be 'immunized by a plea agreement between the defendant and the [SJtate.'" Id. at 324 (citation omitted). "A plea agreement which does not allow the sentencing court to be apprised of relevant information is void as against public policy." Id.

¶ 15. That is exactly what occurred here. The prosecutor wanted the trial court to know all of the relevant information concerning Jackson and to consider the impact of the sentence before it sentenced Jackson. The plea agreement permitted the prosecutor to supply this information. The fact that the prosecutor's comments were compelling and delivered by "strong words" did not transform the commentary into a plea bargain violation.

¶ 16. A second case that is certainly on point is United States v. Diamond, 706 F.2d 105 (2d Cir. 1983) (per curiam). Diamond was prosecuted for participating in an interstate conspiracy to defraud commodities investors. Id. at 105. The plea agreement required the prosecution to refrain from "recommending] any specific sentence to the sentencing judge," but left the government at liberty to inform the judge of the "full nature and extent of [the defendant's] activities" and "all other information in its possession relevant to sentence[,]" among other things. Id. at 106. What occurred next is best recalled in Voceóla. The prosecutor "presented the judge with a disputatious 'sentencing memorandum' which portrayed the defendant in the blackest of terms. . . . The Second Circuit found that this invective worked no abrogation of the plea agreement, as the statements were 'relevant' to the sentencing decision and within the scope of the prosecutor's reservation." Voccola, 600 F. Supp. at 1539.

¶ 17. Here, the prosecutor was entitled to discuss not only Jackson's character, but also the health care community's response to Jackson's charge and the possibility that deterrence would cure the industry's apparent indifference. See Harris v. State, 75 Wis. 2d 513, 520, 250 N.W.2d 7 (1977) (deterrence is proper factor for consideration in sentencing). The prosecutor derived this impression of indifference because Jackson continued to get favorable letters of recommendation. Thus, the prosecutor believed that the health care industry had a casual attitude towards criminal charges being levied against nursing home employees. These comments were appropriate because they informed the trial court of the implications of its sentence for the entire community.

¶ 18. These statements are similar to the prosecutor's remarks in United States v. Mata-Grullon, 887 F.2d 23 (1st Cir. 1989). There, after entering into a plea negotiation in a drug case, the prosecutor commented at sentencing about the devastating effects the seized and "quite potent" heroin would have had on any unknowing users of the drug. Id. at 24. Mata-Grullon claimed the prosecutor breached the agreement by making those remarks. The sentencing court rejected the claim that the prosecutor breached the plea agreement, reasoning that the prosecutor was obligated to bring all relevant facts to the judge's attention. See id. at 24-25.

¶ 19. Thus, in the instant case, the prosecutor did not do indirectly what he was barred from doing directly. The argument that he proffered was entirely appropriate with respect to the prosecutor's assessment of Jackson's character, the frailty of the victim, and the fact that he died. The prosecutor also commented on what he believed to be the ignoble response of the health care community and expressed the hope that the impact of the sentence would deter others similarly situated. These comments highlighted the mitigating and aggravating circumstances to the court. His opinion was wholly consistent with the bargain struck by the parties. As noted in Diamond, "[t]he adverse information the prosecutor reserved the right to present inevitably carried with it an implied argument in favor of a significant sentence." 706 F.2d at 107. Given the charge here, the gravity of the offense, the character of the accused, and the impact of such conduct on the welfare of a helpless segment of society, Jackson should have expected as much.

¶ 20. For the reasons stated, the trial courts judgment and order are affirmed.

By the Court. — Judgment and order affirmed.

       All references to the Wisconsin Statutes are to the 2001-02 version unless otherwise noted.


source: Caselaw Access Project

author: BROWN, J.

license: Public Domain

text:
    In the Interest of Ellis H., a person Under the Age of 17: State of Wisconsin, Petitioner-Respondent, v. Ellis H., Respondent-Appellant.
    Court of Appeals

      No. 03-3178.

      Submitted on briefs March 24, 2004.

    Decided May 19, 2004.

    2004 WI App 123
    (Also reported in 684 N.W.2d 157.)

      On behalf of the respondent-appellant, the cause was submitted on the briefs of Brian C. Findley, state public defender.

      On behalf of the petitioner-respondent, the cause was submitted on the brief of Thomas L. Storm, district attorney of Fond du Lac.
    Before Anderson, EJ., Brown and Snyder, JJ.
   BROWN, J.

¶ 1. Ellis H. argues that when he ran away from his foster home, his resultant failure to report to a social worker and his failure to show up for bis scheduled community service were both incidental to his running away and must be considered one incident. Therefore, he posits, he can only be given one ten-day secured detention pursuant to Wis. Stat. § 938.355(6)(d), not three separate ten-day detentions. We agree with Ellis that para. (6) (d) requires a sanction to be meted out per incident rather than per condition violation, and that the three separate condition violations are considered as one incident. We reverse and remand with directions.

¶ 2. Beginning on May 23, 2003, Ellis ran away from his foster home placement. He returned on May 27, but took off again on May 30 and was gone until June 11. On June 14, he was placed in Shelter Care. Fifteen minutes after this placement, he ran away and was gone until June 22. He did not report for community service on June 9, despite being reminded by his social worker on June 3. He also missed an appointment with his social worker during the week of June 15.

¶ 3. As pertains to the issues in this case, Ellis' social worker filed six separate petitions alleging condition violations, as follows: (1) Ellis had unexcused absences from school on June 3 and 4 and requested a sanction of ten days secured detention for his truancy since it violated the conditions of supervision requiring that he go to school. (2) Ellis ran away from his foster home from May 23 through May 27 and again May 30 through June 11 and from Shelter Care from June 14 through June 22. He further alleged that the events violated the condition that he obey all rules of the foster parents. He requested one ten day secured detention for these two events. (3) He alleged that Ellis had tested positive for marijuana, thereby failing the condition that he not violate the criminal law. The social worker requested a ten-day secured detention for this event. (4) Ellis did not keep the weekly appointment with him during the week of June 15 "due to him being a runaway from 6/14/03 through 6/22/03." He requested a ten-day secured detention for this occurrence as a violation of a condition. (5) Ellis had not reported for community service on June 9 "despite being reminded by his social worker on 6/03/03." This was alleged to be a condition violation and the social worker requested a ten-day secured detention. (6) Ellis had failed to maintain part-time employment on June 17. He requested a ten-day secured detention for the occurrence. Thus, the total amount of requested days of secured detention was sixty days.

¶ 4. Ellis admitted to the truancy, the running away, the dirty urinalysis and the failure to maintain part-time employment allegations. Therefore, he admitted to sanctions for forty out of the sixty alleged days. This appeal relates to the other twenty days, one set of ten days for not meeting with his social worker and a second set of ten days for not showing up for community service.

¶ 5. Before the juvenile court, it was Ellis' position that the failure to keep his appointment with the social worker and his failure to report for community service both arose out of his foster home violation (the runaway) and all had to be considered one incident. The State countered that he "could have been on the run and attended community service and met with his social worker." The State further pointed out that the meeting with the social worker and his community service obligation fell on different days. The juvenile court agreed with the State and imposed an additional twenty days of sanctions on top of the forty days meted out for the four violations, the dispositions of which Ellis had conceded. It was the juvenile court's view that juveniles are not exonerated from "strict compliance" with "each and every rule." Ellis appeals.

¶ 6. The outcome of this appeal turns on our construction of Wis. Stat. § 938.355(6)(d). Statutory interpretation is considered de novo. State v. Aaron D., 214 Wis. 2d 56, 60, 571 N.W.2d 399 (Ct. App. 1997). That much is clear. But how appellate courts go about interpreting statutes is not so clear. It used to be that we looked first to the language of the statute. If the language was unambiguous on its face, we were not to resort to legislative history but rather we were to interpret the statute according to its unambiguous language. Courtney F. v. Ramiro M.C., 2004 WI App 36, ¶ 13, 269 Wis. 2d 709, 676 N.W.2d 545. Only if the statute was ambiguous were we to turn to the legislative history in an attempt to resolve the ambiguity. Id. Recently, however, a divided supreme court has appeared in at least a few cases to reason that because our responsibility is to discover and give effect to the intent of the legislature, we should consider the legislative history in concert with the language of the statute. See id., ¶ 14; see also Hubbard v. Messer, 2003 WI 145, ¶ 9, 267 Wis. 2d 92, 673 N.W.2d 676; Village of Lannon v. Wood-Land Contractors, Inc., 2003 WI 150, ¶ 13, 267 Wis. 2d 158, 672 N.W.2d 275. We are convinced, however, that whichever of the two methods is the law in Wisconsin, the result in this case is the same. We now explain that result.

¶ 7. Wisconsin Stat. § 938.355(6)(d) provides:

If the court finds by a preponderance of the evidence that the juvenile has violated a condition of his or her dispositional order, the court may order any of the following sanctions as a consequence for any incident in which the juvenile has violated one or more conditions of his or her dispositional order[.]

Looking at the plain meaning of the statute, we conclude that the language informs the reader that the court may order a sanction as a consequence for "any incident in which the juvenile has violated one or more conditions of his or her dispositional order." The statute therefore clearly recognizes that multiple conditions may be violated in any one incident but only allows one sanction per incident, not per condition violation. Stated another way, the statute plainly anticipates that any incident may consist of more than one condition violation, but nonetheless informs that only one of a number of available sanctions may be instituted for an incident. Therefore, to the extent that the juvenile court's bench decision can be read to say that the statute allows courts to apply a sanction for each condition violation, we respectfully disagree.

¶ 8. If we are to look at the legislative history in addition to the plain, unambiguous wording of the statute, the history supports our reading of the statute. As Ellis cogently informs us, the previous Children's Code, Wis. Stat. ch. 48, did not include a provision for sanctions until 1987, when it was enacted as part of 1987 Wis. Act 27. Apparently reacting to criticism that the code had no "teeth," the legislature created Wis. Stat. § 48.355(6) (1987-88), stating in relevant part:

(a) If a child who has been adjudged delinquent violates a condition specified in sub. (2)(b)7, the court may impose on the child one of the sanctions specified in par.
(d)....
(d) The court may order any one of the following sanctions: (Emphasis added.)

Clearly, this language allowed a sanction for each condition violated.

¶ 9. This language remained largely unchanged until the legislature's overhaul of juvenile delinquency statutes in 1995 resulting in the present statute, Wis. Stat. § 938.355(6)(d). Plainly, the legislature meant to retain the teeth it provided to the courts in its adoption of Wis. Stat. § 48.355(6) (1987-88), while at the same time giving credence to the public policy choice that a sanction should not be perceived as punishment, but as a tool to coerce a recalcitrant child to comply with the conditions stated in the dispositional order. See State v. B.S., 162 Wis. 2d 378, 393-94, 469 N.W.2d 860 (Ct. App. 1991).

¶ 10. Both on the basis of the plain language of the statute and on legislative history, we agree with Ellis that the legislature meant to establish a difference between an "incident" and a "violation of a condition" and to tie the sanction to the incident, no matter how many conditions were violated by that incident.

¶ 11. What remains to be determined is whether the running away from the foster home, the failure to report to the social worker and the failure to report for community service can be considered three separate incidents as opposed to one incident. Resolution of this issue requires us to define the term "incident" and to apply the definition to Ellis' circumstances.

¶ 12. Here is where the State hangs its hat. It posits that each was a separate incident because each involved a separate choice by Ellis made on a different date. In the State's view, the test should be whether it was impossible to violate one condition without violating the other. The State offers two hypothetical situations to support its argument. In one hypothetical, a juvenile violates both a specific no-contact order from the court and a generic condition that the juvenile follow foster home rules. The foster home has an identical no-contact order. In that circumstance, offers the State, it may not request separate sanctions for the two condition violations because it would have been impossible for the juvenile to commit one violation without violating the other. Similarly, if a juvenile has one condition where he or she may not drive without a valid license and another that he or she may not violate any criminal law and he or she drives an auto without the owner's consent, it is one incident according to the State for the same reason that it is impossible for the juvenile to have violated one condition without violating the other. In both instances, the State apparently argues, the juvenile has made only one volitional choice and therefore should suffer only one consequence. Here, the State contends, Ellis made three separate volitional choices — one to run away, two to fail to report to his social worker, and three to fail to show up for his community service. Thus, he should suffer the consequences of three separate sanctions.

¶ 13. Ellis responds that the problem with the State's argument is that nowhere in the statute does the legislature say that "impossibility" is the way to interpret the confines of an incident. Because the legislature has not defined the word "incident," Ellis looks to a dictionary definition of "incident." He refers to a definition of the word contained in Webster's Third New International Dictionary (1976), which he cites as "an occurrence of an action or situation felt as a separate unit of experience." Ellis then asserts that his failure to meet with his social worker and his failure to report for community service were incidental to or a consequence of his running away. The overall intent by Ellis was to run from the submission to authority, whether it was his foster parents, his social worker or the agent supervising his community service.

¶ 14. Ellis further submits that the running away . from authority is a different unit of experience than his dirty urinalysis and his decision to use drugs. He says the same about his truancy and his failure to meet with his boss so as to retain his part-time job. These violations did not necessarily flow from his act of running away. Rather, each was a separate volitional act having nothing to do with his choice to run away from authority.

¶ 16. We hold that Ellis correctly defines the term "incident." As he points out, a definition of "incident" is not found in the statutes. In the absence of a statutory definition, the general rule is to construe the plain language of the statute according to common and approved usage of the words chosen by the legislature. Wis. Stat. § 990.01(1); see also State v. Gilbert, 115 Wis. 2d 371, 377-78, 340 N.W.2d 511 (1983). Common meaning of words may be established by using a dictionary. Gilbert, 115 Wis. 2d at 378. The definition of "incident" Ellis offers is in accord with those found in other dictionaries. See Black's Law Dictionary 765 (7th ed. 1999) (defining "incident" as "[a] discrete occurrence or happening"); Webster's Third New International Dictionary 1142 (1993) (defining "incident" as "an occurrence of an action or situation felt as a separate unit of experience"); Random House Dictionary of the English Language 966 (2d ed. 1987) (defining "incident" as "an individual occurrence or event").

¶ 16. This definition, of course, provides little insight into whether Ellis' failure to complete the community service requirement during his second runaway period and to meet with his social worker during his third runaway period constitute a single "incident." For that we have very little guidance and therefore turn to how courts have viewed similar terms in other contexts.

¶ 17. The series of cases addressing multiplicity of sexual assault charges is instructive. See, e.g., Harrell v. State, 88 Wis. 2d 546, 554, 277 N.W.2d 462 (Ct. App. 1979); State v. Eisch, 96 Wis. 2d 25, 27-29, 291 N.W.2d 800 (1980). In those cases, the general question posed was whether the defendant's sexually assaultive course of conduct constituted a single offense or separate and distinct offenses. See, e.g., Harrell, 88 Wis. 2d at 570; Eisch, 96 Wis. 2d at 34-35.

¶ 18. We choose to discuss one such case as a point of reference for our decision. In Harrell, one of the leading cases on the subject, the defendant committed two forcible vaginal intercourses on the same person, at the same location and separated by twenty-five minutes of conversation. Harrell, 88 Wis. 2d at 553. We held that there was a sufficient break in conduct and time between the acts to constitute separate and distinct acts of rape and thus that the two-count charge was not multiplicitous. Id. at 564-66. In doing so, we embraced the oft quoted standard courts have used to guide their multiplicity determinations:

If at the scene of the crime the defendant can be said to have realized that he [or she] has come to a fork in the road, and nevertheless decides to invade a different interest, then his [or her] successive intentions make him [or her] subject to cumulative punishment, and he [or she] must be treated as accepting that risk, whether he [or she] in fact knows of it or not.

Id. at 558 (citation omitted; emphasis added). We explained:

One should not be allowed to take advantage of the fact that he [or she] has already committed one sexual assault on the victim and thereby be permitted to commit further assaults on the same person with no risk of further punishment for each assault committed. Each act is a further denigration of the victim's integrity and a further danger to the victim.

Id. at 565. We then identified seven factors to aid in the determination of whether the defendant had come to a "fork in the road": (1) nature of the act, (2) time, (3) place, (4) intent, (5) cumulative punishment, (6) muscular contraction, and (7) number of victims. See id. at 572.

¶ 19. Applying the standard to the case, we reasoned that after the first act of forcible sexual intercourse, the defendant had come to the proverbial fork in the road and then engaged in a new and distinct volitional act when he chose to commit the second forcible assault. See id. at 565-66, 574. Accordingly, we held that the separate acts of sexual assault were separately punishable. Id. at 564.

¶ 20. Although most often applied in sexual assault prosecutions, the above principles have been applied to several different types of prosecutions. See City of Madison v. Nickel, 66 Wis. 2d 71, 223 N.W.2d 865 (1974) (charging a defendant with four violations of a city ordinance prohibiting the selling of obscene magazines is not multiplicitous even though the magazines were sold by the defendant at the same time and place to the same person); see also State v. Anderson, 219 Wis. 2d 739, 580 N.W.2d 329 (1998) (conviction on two counts of bail jumping is not multiplicitous when each is based on a violation of a different term of defendant's bond for the underlying crime). The principles were recently reaffirmed in State v. Roller, 2001 WI App 253, ¶ 31, 248 Wis. 2d 259, 635 N.W.2d 838, modified by State v. Schaefer, 2003 WI App 164, ¶¶ 46, 47, 52, 266 Wis. 2d 719, 668 N.W.2d 760.

[Determining whether acts are sufficiently different in fact to warrant multiple charges] involves a determination of whether the charged acts are "separated in time or are of a significantly different nature." The "different nature" inquiry is not limited to an assessment of whether the acts are different types of acts. Rather, even the same types of acts are different in nature "if each requires 'a new volitional departure in the defendant's course of conduct.'" Furthermore, time is an important factor, but even a brief time separating acts may be sufficient.... The pertinent time question is whether the facts indicate the defendant had "sufficient time for reflection between the... acts to again commit himself [or herself]." (Citations omitted.)

See also State v. McKinnie, 2002 WI App 82, ¶¶ 6-7, 252 Wis. 2d 172, 642 N.W.2d 617, review denied, 2002 WI 111, 256 Wis. 2d 65, 650 N.W.2d 841 (WI July 26, 2002) (No. 01-2764-CR).

¶ 21. The reasoning in Harrell and the other eases easily translates to our discussion of what constitutes a sanctionable "incident" or, as we have defined it, "an occurrence of an action or situation felt as a separate unit of experience." As we noted earlier, the purpose of the statute permitting sanctions is not to punish a juvenile but to impress upon him or her the importance of making proper life decisions. Thus, each time the juvenile has an opportunity to reflect and make a life decision or, in other words, has "come to a fork in the road," the statute dictates that he or she should be held accountable for whatever course of conduct he or she elects to pursue. Accordingly, as Harrell and other cases have taught us — albeit in different contexts — the proper question to ask when determining whether a juvenile's conduct constitutes separate "incidents," or separate units of experience permitting multiple sanctions, or a continuous "incident," or a single unit of experience permitting only one sanction, is whether the juvenile came to a "fork in the road" and nevertheless "invade[d] a different interest." This means we must determine whether the juvenile's course of conduct is marked by different and distinct volitional acts in between which the juvenile had sufficient time to reflect and choose to commit himself or herself to a particular act.

¶ 22. If the juvenile comes to the "fork in the road" and his or her intent is to "invade a different interest," the juvenile has ended one incident and begun another and the juvenile may be additionally sanctioned for a subsequent condition violation. On the other hand, if the juvenile comes to the "fork in the road" and does not intend to "invade a different interest," the incident is still ongoing and all subsequent condition violations are incidental to or are part and parcel of that same incident and only one sanction is permitted.

¶ 23. As the State points out, this case is complicated by the fact that Ellis did not just run away once, he ran away three separate times and failed to appear for community service during one of those times and failed to meet with his social worker during another. As Harrell teaches us, "time" and "place" are important factors to consider when determining whether a juvenile has come to a "fork in the road." For this reason we could easily say that each time Ellis ran away, he came to a "fork in the road" and then "invade [d] a different interest" when he chose to run away for the second time and ignore his community service requirement and then again when he chose to run away for the third time and skip his meeting with his social worker.

¶ 24. However, the State filed one petition for all three instances of running away under a single umbrella — "foster home violations." In the petition, the State recommended a single sanction of ten days' secured detention for all foster home violations. Thus, the State clearly viewed all three occasions that he ran away as part and parcel of the same "incident." Had the State separated the foster home violation petition into three separate petitions — one for each time Ellis ran away — the outcome of this case might have been different. However, we must render our determination based on the facts of the case as they come before us. Therefore, because all three instances Ellis ran away are subsumed into one petition, we must consider Ellis as having come to only one "fork in the road" and therefore his three acts of running away as part and parcel of a single act of running away.

¶ 25. We are then faced with the question of whether Ellis' failure to report for community service and his failure to meet with his social worker are separate incidents from his single act of running away. We agree with Ellis that common sense dictates that his act of running away meant that he did not intend to submit to any authority, whether it be his foster parents, his social worker or the agency supervising his community service. While he did violate different conditions when he missed his appointment with his social worker and did not appear for community service, these two violations simply do not evidence a volitional departure in Ellis' course of conduct and an intent to "invade a different interest." Rather, they are a reflection of his flight from and refusal to submit to authority. Ellis' running away, his failure to meet with his social worker and to report for community service therefore are a single incident sanctionable by only ten days' secured detention.

¶ 26. For all of the above reasons, we reverse the order of the juvenile court imposing twenty days of sanctions for failing to meet with his social worker and failing to report for community service. We remand with directions that such sanctions be expunged from the order.

By the Court. — Order reversed and cause remanded with directions.

       This case was converted from a one-judge appeal to a three-judge appeal pursuant to Wis. Stat. § 809.41 (2001-02). All references to the Wisconsin Statutes are to the 2001-02 version unless otherwise noted.

       Although the parties do not present arguments concerning Ellis' truancy, his failure to meet with his part-time employer and his dirty urinalysis, and the record on these violations is scarce, we choose to briefly address them. Unlike Ellis' failure to meet with his social worker and his failure to comply with the community service requirement, these three condition violations are not incidental to his running away. Ellis could choose not to run away and still choose to be truant from school, to use drugs and to discontinue his part-time employment. These condition violations reflect a decision by Ellis to invade a different interest and therefore Ellis properly received separate sanctions for these condition violations.


author: DEININGER, PJ.

text:
    James A. Finch and Tricia K. Finch, Plaintiffs-Appellants, v. Southside Lincoln-Mercury, Inc., Defendant, Ford Motor Company, R. G. Singletary, S. D. Majercik and S. L. Griffin, Defendants-Respondents.
    Court of Appeals

      No. 02-2618.

      Submitted on briefs May 14, 2003.

    Decided May 20, 2004.

    2004 WI App 110
    (Also reported in 685 N.W.2d 154.)

      On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of Paul R. Norman and Sarah A. Zylstra of Boardman, Suhr, Curry & Field LLP, Madison.
    On behalf of the defendants-respondents, R.G. Singletary, S.D. Majercik and S.L. Griffin, the cause was submitted on the brief of Gregory P. Seibold of Murphy Desmond, S.C., Madison.
    On behalf of the defendant-respondent, Ford Motor Company, the cause was submitted on the brief of Thomas J. Keiffer of Hale, Skemp, Hanson, Skemp & Sleik, La Crosse, and Kurt D. Williams and Stephen M. Bledsoe of Berkowitz Stanton Brandt Williams & Shaw, LLP, Kansas City, Mo.
    Before Deininger, PJ., Dykman and Vergeront, JJ.
   DEININGER, PJ.

¶ 1. James and Tricia Finch appeal the dismissal of their claims against Ford Motor Company and three of its employees who served as directors of Southside Lineoln-Mercury, Inc. The trial court concluded that certain language in the lease between the Finches and Southside absolved Ford, Southside's controlling shareholder, and the three directors from any liability for the Finches' claims against them. The Finches contend that the court erred in dismissing their claims because the clause at issue did not bar their claims for breach of fiduciary duty, tor-tious interference with a contract, and violation of the Uniform Fraudulent Transfer Act, and that each of these claims was well pled in their amended complaint. We agree that the last two claims should not have been dismissed. Accordingly, we reverse the appealed order in part and remand for further proceedings on the tortious interference and UFTA claims.

BACKGROUND

¶ 2. The trial court terminated this litigation at the pleading stage by granting motions to dismiss the Finches' complaint, from whose allegations we derive the following background facts. James Finch owned Finch's Southside Lincoln-Mercury, Inc., which in turn operated two motor vehicle dealerships in La Crosse and West Salem from 1994 until 1999 under franchise agreements with Ford Motor Company. Finch and his wife, Tricia, own the land and buildings where the two dealerships operated. Representatives of Ford proposed in 1998 that Finch sell his corporation's Mercury and Lincoln dealership assets to Southside Lincoln-Mercury, Inc. (Southside), a Delaware "dealer development corporation" formed and controlled by Ford.

¶ 3. Finch's corporation entered into an asset-purchase agreement with Southside in 1999. Southside agreed to purchase substantially all of the dealership's assets, including its franchise rights, which were relinquished to Ford so that Ford could, in turn, grant them to Southside. In conjunction with the sale of corporate assets, James and Tricia Finch entered into written leases with Southside for the two dealership locations. The La Crosse dealership facility lease was for a term of 120 months and required Southside to pay the Finches $17,000 per month, as well as to pay all real estate taxes, insurance, utilities, and maintenance expenses. The West Salem dealership facility lease was for a term of sixty months and obligated Southside to pay $7,000 per month, again in addition to all real estate taxes, insurance, utilities, and maintenance expenses. Ford also appointed three Ford employees (named as defendants-respondents in the caption) to serve as directors of Southside.

¶ 4. Southside ceased doing business in early 2001 and, according to the Finches, the corporation "transferred" its franchise rights to Ford for no value. The Finches assert that the franchise rights had a fair market value in excess of one million dollars. As a result of the business cessation and franchise transfer, South-side did not have sufficient remaining assets to pay its outstanding obligations, including its obligations to the Finches under the two dealership leases. Southside informed the Finches that it was insolvent and intended to default on all future obligations under the leases.

¶ 5. The Finches sued Southside, Ford and the three directors, alleging claims of breach of fiduciary duty and intentional interference with a contract against both Ford and the directors, and a fraudulent transfer claim under Wis. Stat. § 242.05(1) (2001-02) against Ford. Ford, joined by the directors, moved to dismiss the Finches' claims on the basis of the following language contained in both dealership facility leases:

Recourse limited to Tenant corporation
20. No recourse shall be had for payment of the rent, or performance of any other obligations of [Southside], or for any claim based on, or otherwise in respect of, this Lease, against any incorporator, stockholder, officer, director or employee, as such, past, present, or future, of [Southside] or of any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability or claim of liability being, by execution of this Lease, and as part of the consideration for the execution hereof by [Southside] expressly waived and released.

¶ 6. The trial court accepted the defendants' arguments and dismissed all claims against Ford and the directors. The Finches appeal, contending that: (1) the quoted language cannot be enforced to absolve Ford and the directors from tort liability for intentional or reckless acts; (2) if not void as against public policy, paragraph 20 is inapplicable to the claims the Finches pled; and (3) in the alternative, paragraph 20 is ambiguous as to its scope, thereby rendering dismissal of the Finches' claims at this stage improper. The Finches also contend that each of the dismissed causes of action were properly pled and must thus survive the defendants' dismissal motions.

ANALYSIS

¶ 7. Ford and the directors moved to dismiss the Finches' complaint against them for failure to state a claim upon which relief can be granted. See Wis. Stat. § 802.06(2)(a)6. The trial court granted the motions and dismissed all claims against these defendants. On appeal, however, the directors contend that we should employ summary judgment methodology because the trial court considered a matter outside the pleadings (paragraph 20 in the Finch-Southside lease), thereby converting the motion to one for summary judgment. See § 802.06(2)(b) ("If on a motion asserting the defense ... [of] failure of the pleading to state a claim upon which relief can be granted . . . matters outside of the pleadings are presented to and not excluded by the court, the motion shall be treated as one for summary judgment. . . ."). The directors further contend that the Finches were thus obligated, but failed, to file countering affidavits so as to place in dispute the parties' intent regarding the scope of paragraph 20.

¶ 8. The Finches referred to the lease in their complaint but did not attach or incorporate it in their pleading. Ford first brought paragraph 20 to the court's attention by attaching a copy of it to its motion to dismiss. Ford contended in its trial court brief that federal case law permits a court to consider a document attached to a motion to dismiss if the document is referred to in the plaintiffs complaint and is central to the plaintiffs claim. See Venture Assocs. Corp. v. Zenith Data Sys. Corp., 987 F.2d 429, 431 (7th Cir. 1993). The Finches acceded to the court's consideration of the lease language, as did the directors. At no point, however, did the directors or any other party contend that the trial court must treat the motions to dismiss as summary judgment motions because it considered the lease language.

¶ 9. We note that when a court converts a motion to dismiss for failure to state a claim into a motion for summary judgment pursuant to Wis. Stat. § 802.06(2)(b), the court must notify the parties of its intent and provide them a reasonable opportunity to present material made pertinent by Wis. Stat. § 802.08. CTI of Northeast Wisconsin, LLC v. Herrell, 2003 WI App 19, ¶ 6, 259 Wis. 2d 756, 656 N.W.2d 794. This did not occur because, as we have noted, all parties were content to have the court consider the lease language in resolving the defendants' motions to dismiss for failure to state a claim. Because the directors joined Ford in relying on the lease language to support their motion to dismiss for failure to state a claim, we conclude they are estopped from making arguments on appeal premised on the Finches' failure to file countering affidavits.

¶ 10. Our review is thus of the granting of a motion to dismiss for failure to state a claim, a question of law that we decide de novo. See Beloit Liquidating Trust v. Grade (Beloit II), 2004 WI 39, ¶ 17, 270 Wis. 2d 356, 677 N.W.2d 298. In our review, we, like the parties and the trial court have done, will treat the complaint as incorporating the language of the Finch-Southside lease. In examining the complaint, we are to liberally construe the pleadings and accept as true all facts pleaded by the plaintiff and all inferences that can reasonably be derived from those facts. Id. Dismissal at the pleading stage is appropriate only if it appears certain that under no circumstances can the plaintiff recover. Id.

I — I

¶ 11. The Finches' argument against allowing paragraph 20 to bar their claims against Ford and the directors rests primarily on Restatement (Second) of Contracts § 195(1), which provides that "[a] term exempting a party from tort liability for harm caused intentionally or recklessly is unenforceable on grounds of public policy." Id. They contend that the Restatement principle means that paragraph 20 cannot be enforced, at least insofar as it attempts to immunize any parties from liability for "harm caused intentionally or recklessly." The directors and Ford argue, however, that Wisconsin law distinguishes between personal and economic injury and voids "exculpatory clauses" only in personal injury cases, and then only where the injured party would be deprived of any remedy if the clause was upheld. They maintain that, because the language at issue here bars recovery for only economic injury and is contained in a lease bargained between sophisticated commercial parties, we must give effect to the language and uphold the dismissal of all of the Finches' claims against them.

¶ 12. Before considering whether paragraph 20 is unenforceable against the Finches' claims on public policy grounds, we must first determine whether any of the Finches' three claims against these defendants fall within its reach. If the language of paragraph 20 unambiguously does not apply to the Finches' claims, as they contend is the case, then the enforceability of paragraph 20 becomes irrelevant. We conclude that two of the Finches' claims, those alleging a breach of fiduciary duty and violation of the UFTA, are not barred by paragraph 20 of the Finch-Southside lease.

¶ 13. Paragraph 20 precludes the Finches from having any "recourse . . . against any . . . stockholder . . . [or] director" of Southside "for payment of the rent, or performance of any other obligations of [Southside], or for any claim based on, or otherwise in respect of, this Lease . . . whether by virtue of any constitution, statute or rule of law." The term "recourse" carries a lay definition of "access or resort to a person or thing for help or protection." Random House Dictionary of the English Language 1613 (2d ed. 1987). In legal contexts (outside of the law of banking and negotiable instruments, where more specialized meanings apply), the term generally refers to "[enforcement of, or a method for enforcing, a right." Black's Law Dictionary 1280 (7th ed. 1999). The most obvious effect of paragraph 20, therefore, is to negate any potential claim that Ford, as the principal shareholder of Southside, or any director of Southside, had either explicitly or implicitly guaranteed Southside's obligations under the lease. That is, as to the payment of rent or other tenant obligations under the lease, the Finches' only "method for enforcing" their rights was to pursue Southside itself, and they could not "resort to" Ford or the directors for any "help or protection" regarding Southside's obligations as a tenant.

¶ 14. As we will discuss more fully below, the Finches' breach of fiduciary duty and fraudulent transfer claims are premised on actions allegedly taken by the directors and Ford to divest Southside of a valuable corporate asset, thereby rendering the dealership corporation unable to pay its debts. In pursuing these claims, the Finches are not seeking to enforce any rights they possess as Southside's landlord. They rely, instead, on their status as creditors of an insolvent corporation. The only link between the lease and these two causes of action is that present and future unpaid rent is what renders the Finches unpaid creditors of the allegedly insolvent corporation, Southside. Thus, Southside's obligations under the lease may become relevant in determining the amount of the Finches' damages, but they play no part in determining the liability of these defendants, that is, whether the defendants breached any fiduciary duties to the Finches or whether Ford was the recipient of a fraudulent transfer under Wis. Stat. ch. 242.

¶ 15. Ford and the directors, however, point to the language in paragraph 20 that applies its provisions to "any claim based on, or otherwise in respect of, this Lease." The defendants claim that this broad language was unambiguously intended to apply to claims such as those before us now. Ford, for example, argues:

The provision waives "all liability" from "any constitution, statute or rule of law." Such broad language was required because a stockholder cannot be held liable for a corporation's breach of its lease. Any claim against Ford as the stockholder for Southside's breach of its lease therefore would necessarily involve some theory other than breach of the lease. Waiving such claims was precisely what the parties contemplated with the non-recourse provision.

The directors similarly contend that the "non-recourse provisions would have been unnecessary and redundant if they were not intended to do more than simply reflect that Southside was the contracting entity."

¶ 16. We are not persuaded, however, that the language, "any claim based on, or otherwise in respect of, this Lease," is so all-encompassing that it immunizes Ford and the directors from liability for any and all acts, no matter how tenuously related to Southside's obligations under the lease. An interpretation construing the reach of paragraph 20 expansively would call into question the enforceability of the language on public policy grounds. See Dobratz v. Thompson, 161 Wis. 2d 502, 520, 468 N.W.2d 654 (1991) (noting that courts "will disfavor any exculpatory contract that is broad and general in its terms" and "will closely scrutinize an exculpatory contract and construe it strictly against the defendants.").

¶ 17. The Finches' claims of breach of fiduciary duties and fraudulent transfer against the directors and Ford are an attempt to recover money of which the Finches were allegedly wrongfully deprived because of allegedly tortious acts or other misconduct of the defen-dánts, actions that were independent of and unrelated to Southside's breach of its obligations under the lease. Although success on their claims for breach of fiduciary duties or a fraudulent transfer may result in the Finches being able to recover amounts owed them under the leases with Southside, the fiduciary duties and statutory obligations on which these claims are based derive from sources other than the leases. Accordingly, we conclude that the Finches' allegation that Ford and the directors breached fiduciary duties and transferred assets in violation of Wis. Stat. § 242.05(1) are not "claim [s] based on, or otherwise in respect of' the lease.

¶ 18. The Finches' tortious interference with contract claim also involves allegedly wrongful conduct independent of a breach of the leases, hut the claim is much more closely tied to Southside's obligations under the leases. Unlike the breach of fiduciary duties and fraudulent transfer claims, which the Finches bring as unsecured creditors of an insolvent corporation, the tortious interference claim rests squarely on the Finches' contractual relationship with Southside. To establish the defendant's liability for tortious interference, the Finches must prove the existence of the contract and show precisely how Ford or the directors wrongfully caused Southside not to perform its contractual obligations. We therefore conclude that this cause of action is a "claim based on, or otherwise in respect of' the Finch-Southside leases. The tortious interference claim is plainly an attempt by the Finches to collect from Southside's directors and controlling shareholder for their actions that resulted in Southside's breach of the leases, and it is thus barred by the language of paragraph 20 unless, as the Finches assert, the provision may not be applied to this claim for reasons of public policy, a question we next address.

¶ 19. "Exculpatory clauses" are not favored by the law because they tend to allow conduct that falls below acceptable standards of care. Richards v. Richards, 181 Wis. 2d 1007, 1015, 513 N.W.2d 118 (1994). An exculpatory clause is not, however, automatically void and unenforceable as contrary to public policy. Id. Rather, a court must closely examine whether such an agreement violates public policy, strictly construing it against the party seeking to rely on it. Id.

¶ 20. Ford and the directors are correct that the cases relied upon by the Finches, Keller v. Lloyd, 180 Wis. 2d 162, 509 N.W.2d 87 (Ct. App. 1993), Dobratz v. Thompson, 161 Wis. 2d 502, 468 N.W.2d 654 (1991), and Merten v. Nathan, 108 Wis. 2d 205, 321 N.W.2d 173 (1982), are all personal injury cases involving consumer contracts. Moreover, the Finches have not cited, and we have not located, any Wisconsin decision expressly voiding an exculpatory clause as against public policy solely on the basis that the clause attempted to exempt tort liability for harm caused intentionally or recklessly. Wisconsin courts have regularly recognized this principle, however, and we conclude it is applicable here, where the language of the exculpatory clause is asserted to bar any liability on the part of Ford and the directors for intentionally or recklessly wrongful conduct.

¶ 21. We find the reasoning in RepublicBank Dallas, N.A. v. First Wisconsin Nat'l Bank of Milwaukee, 636 F. Supp. 1470 (E.D. Wis. 1986), both persuasive and on point. In RepublicBank, the District Court refused to uphold a liability disclaimer in a commercial agreement between two large banks barring economic loss claims based on an alleged intentional misrepresentation. The court recognized both that Wisconsin had "endorsed the position of the Restatement (Second) of Contracts that exculpatory clauses are unenforceable on public policy grounds where the alleged harm is caused intentionally or recklessly," and that there is no Wisconsin authority limiting this rule to cases involving consumers or parties of unequal bargaining power. Id. at 1473. The court also distinguished between clauses purporting to exculpate parties from negligent conduct and those purporting to exculpate parties from reckless or intentional conduct. Id. The former are valid provided that the parties' intent is clear and public policy is not otherwise violated. Id. at 1474.

¶ 22. We see no reason why the Restatement principle should not be applied here, notwithstanding the fact that, as the defendants argue, our refusal to enforce paragraph 20 to preclude the Finches' tortious interference with contract claim impinges on the freedom of these "sophisticated commercial parties" to allocate risk by contract. The "tension between the principles of contract and tort law" are evident whenever a court considers the enforceability of an exculpatory provision in a contract. See Richards, 181 Wis. 2d at 1016. The fact that one party to an exculpatory contract lacks sophistication in business matters or possesses unequal bargaining power provides a separate basis for voiding an exculpatory clause. See, e.g., Discount Fabric House of Racine, Inc. v. Wisconsin Tel. Co., 117 Wis. 2d 587, 600, 345 N.W.2d 417 (1984). We conclude, however, that this does not mean that the absence of such disparities precludes a court from refusing to enforce an exculpatory provision on other grounds.

¶ 23. Rather, we conclude that, under the Restatement rule, as embraced by the Wisconsin Supreme Court in Merten, 108 Wis. 2d at 212-13, and subsequent cases (see footnote 9), an exculpatory clause, though otherwise valid as applied to some causes of action, cannot operate to relieve a party from the consequences of intentional or reckless conduct. The rule is grounded in sound public policy for, as noted in the Restatement, the law of torts imposes standards of conduct for the protection of others against unreasonable risk of harm, and a party should not be able to exempt itself by contract from liability for harm that it intentionally or recklessly causes. Restatement (Second) of Contracts § 195 cmt. a (1979).

¶ 24. As we have noted (see footnote 8), tortious interference with a contract is an intentional tort inasmuch as the interference complained of must be alleged and proven to be intentional. Accordingly, paragraph 20 is unenforceable against the Finches' claim for tortious interference with their leases with Southside. Because all three of the Finches' causes of action thus survive the language of paragraph 20, we next address other asserted infirmities requiring the dismissal of each claim.

II.

¶ 25. The trial court did not analyze whether the Finches' complaint properly alleged the three claims against Ford and the directors because the court concluded that the language of paragraph 20 was effective to bar them all. Because our review of the determination of a motion to dismiss for failure to state a claim is de novo, however, there is no impediment to our considering the defendants' remaining arguments in support of their motions to dismiss. We first address the Finches' claim that, by transferring Southside's franchise rights to Ford for no value, the directors and Ford, as Southside's controlling shareholder, breached fiduciary duties owed to the Finches as unsecured creditors of an insolvent corporation.

¶ 26. A threshold issue is presented — whether Delaware or Wisconsin law should determine the viability of the Finches breach of fiduciary duties claim. The Finches, perceiving Delaware law to be more favorable in establishing the viability of their fiduciary duty claims against both Ford and the directors, urge us to apply the law of Delaware, the state of Southside's incorporation. The defendants argue that Wisconsin law should apply to this dispute because Southside's business operations were exclusively located here, as were its dealings with the Finches and the leased real estate. These connections to Wisconsin, in the defendants' views, far outweigh the single tie to Delaware as the state of Southside's incorporation.

¶ 27. After the briefing of this appeal was completed, we decided an appeal that addressed this very choice of law issue. We concluded that, under the "internal affairs doctrine" and the "Heath factors," the law of the state of incorporation should govern a breach of fiduciary claim brought by a committee of creditors against officers and directors of a Delaware corporation having its principal place of business in Wisconsin. See Beloit Liquidating Trust v. Grade (Beloit I), 2003 WI App 176, ¶¶ 29-38, 266 Wis. 2d 388, 669 N.W.2d 2d 232, reversed, 2004 WI 39, 270 Wis. 2d 356, 677 N.W.2d 298. The parties submitted supplemental letter briefs on the application of our analysis in Beloit I to the present facts. The supreme court accepted review of that case, however, and it reversed our choice of law determination. See Beloit II, 2004 WI 39, ¶¶ 17-32. The parties once again provided supplemental letter briefs. Because we now have the benefit of the supreme court's very recent choice of law analysis in a closely analogous dispute, as well as the parties' input on how Beloit II should be applied here, we proceed directly to a determination of the choice of law issue under the Beloit II holding.

¶ 28. The supreme court explained in Beloit II that Wis. Stat. § 180.1704 is "helpful in discerning our legislature's intent with respect to corporations and choice of law principles." Id., 23. The court concluded that:

Section 180.1704 puts all corporations on notice that, when transacting business in Wisconsin, they are subject to Chapter 180. Given this clear statutory language, and Wisconsin's failure to adopt the internal affairs doctrine [see footnote 10], either by statute or through case law, we conclude that the language of § 180.1704 supports the holding that Wisconsin law should be applied in determining whether . . . directors or officers breached their fiduciary duty to ... creditors.

Id. The court also went on to consider "two applicable tests when deciding which forum's laws apply." Id., ¶ 24. The first is " 'whether the contacts of one state to the facts of the case are so obviously limited and minimal that application of that state's law constitutes officious intermeddling.'" Id. (citation omitted). The second is an examination of the five "Heath factors" (see footnote 11). Id., ¶ 25.

¶ 29. We conclude that Wis. Stat. § 180.1704 and the two tests cited in Beloit II dictate that we apply Wisconsin law in the present litigation. Southside's only contact with Delaware was that it was incorporated there. Southside did all of its business in Wisconsin, the lease agreements with the Finches were entered into here, and they deal with Wisconsin real estate. Although it is true that Southside's controlling shareholder and its directors are from outside Wisconsin, that fact does not strengthen Southside's ties to Delaware (Ford's principal place of business is in Michigan, and the directors reside in Michigan and Missouri). There appears to be no connection between Southside and Delaware other than the fact of incorporation, and "application of Delaware law in this case would constitute officious intermeddling with the laws of Wisconsin." See id., ¶ 24.

¶ 30. Finally, the "Heath factors" (see footnote 11) also weigh in favor of applying Wisconsin law. This dispute involves business conducted in Wisconsin, and Wis. Stat. § 180.1704 "is clear on its face and puts corporations on notice that, if they choose to transact business in this state, they will be subject to Wisconsin law," thereby enhancing the predictability of results. Id., ¶ 26. For the same reason that Wisconsin law is preferred under the test for "officious intermeddling," interstate order is maintained by applying the law of Wisconsin because our state has more significant contacts with Southside than does Delaware. See id., ¶ 27. Next, application of our own law, as opposed to the law of a foreign jurisdiction, will always simplify our judicial task, except where Wisconsin law is complex or uncertain as compared to that of the other jurisdiction, Heath v. Zellmer, 35 Wis. 2d 578, 597, 151 N.W.2d 664 (1967), and "Wisconsin law regarding whether officers and directors owe a fiduciary duty to a corporation's creditors is not complex or unmanageable," Beloit II, 2004 WI 39, ¶ 28. Wisconsin is the forum state and our governmental interests are advanced by applying Wisconsin law to disputes litigated here inasmuch as "it is the duty of a Wisconsin court to identify and effectuate Wisconsin policies." Heath, 35 Wis. 2d at 597. Finally, "Wisconsin laws regarding a corporation's duty to its creditors are not obsolete or senseless," Beloit II, 2004 WI 39, ¶ 31, and we may thus perceive it as the "better law." Heath, 35 Wis. 2d at 598.

¶ 31. Therefore, in our review of whether the Finches' complaint states viable claims against Ford and the directors for breaches of fiduciary duties, we will consult and apply Wisconsin law. After Beloit II, there can be little dispute that Wisconsin courts recognize a fiduciary duty owed by the officers and directors of a corporation to maximize the value of the corporation's remaining assets for the benefit of its unsecured creditors once the corporation is both (1) insolvent and (2) no longer "a going concern." See Beloit II, 2004 WI 39, ¶¶ 34-39; McGivern v. Amasa Lumber Co., 77 Wis. 2d 241, 254, 252 N.W.2d 371 (1977). We conclude that the Finches' complaint, whose allegations we must take as true, states a claim for breach of fiduciary duty against the directors: it asserts that Southside "was insolvent or on the brink of insolvency" and had "ceased doing business" when the directors authorized the transfer of the franchise rights for no value.

¶ 32. The Finches make the same allegations in their breach of fiduciary duty claim against Ford, Southside's controlling shareholder. As Ford points out, however, the Finches provide no support in Wisconsin law for the proposition that a corporation's controlling shareholder owes a fiduciary duty to unsecured creditors of the corporation under these, or any other, circumstances. While we might not go so far as Ford's assertion that permitting the Finches to go forward on their claim against it for breach of fiduciary duties would "turn corporate law on its head," we acknowledge that the notion gives us pause. See Consumer's Co-op of Walworth County v. Olsen, 142 Wis. 2d 465, 475, 419 N.W.2d 211 (1988) (noting Wisconsin's "unwavering adherence to the general principle of shareholder non-liability" for corporate debts). We conclude, however, that the Finches' breach of fiduciary duties claims suffer from a separate infirmity, one which infects its claims against the directors as well: the Finches lack standing as individual creditors to pursue these claims under Wisconsin law.

¶ 33. In Wisconsin,

[a]n action by a creditor . .. under the general equitable powers of the court is brought on behalf of the corporation for the benefit of all of its creditors, any amounts recovered to be restored to the corporation or to such assignee or other person who has a right thereto in lieu of the corporation. If the directors' breach of their duties has caused a loss to the corporation, the liability of the directors is deemed to be an asset of the corporation. It is only if the creditor suffers a single and exclusive injury resulting from a direct tort of the director or officer that the creditor, in his or her own right, may sue the director or officer.

McGivern, 77 Wis. 2d at 257-59 (footnotes and citations omitted). The supreme court explained in a footnote that an "action on behalf of all creditors avoids multiplicity of suits and provides an orderly procedure by which relief can be obtained for all aggrieved creditors rather than the lucky few who prosecute first." Id. at 258 n.10.

¶ 34. The Finches argue that we should not treat the quoted passage from McGivern as binding because it dealt with statutory provisions that have been repealed and is, moreover, "dicta." We disagree on both points. We first note that, in discussing the "standing" issue in McGivern, the court referred not only to actions brought under the repealed statutory provisions, but also to those brought "under the general equitable powers of the court." Id. at 258. We also do not view the court's discussion of standing as dicta but as an alternative rationale for the court's holding. See id. at 255-56 ("There is an additional difficulty with [the plaintiffl's position here. Even where it could be said that in some sense a fiduciary obligation existed to creditors generally, the issue remains as to who has the right to sue for losses due to the breach of duty."). The applicability of the court's conclusion on standing to the facts before it was clearly stated:

[The plaintiff] was suing on her own behalf — not on behalf of [the corporation] or the creditors.... [H]er attempt to hold [a director and an officer] liable to her as a fiduciary must fail. [The plaintiff] claims that a general fiduciary obligation is owed by the directors and officers of a solvent corporation to each creditor personally. No such personal duty exists.

McGivern, 77 Wis. 2d at 260. In short, we conclude that the court's answer to the question of who may sue to recover for an alleged breach of a director's fiduciary duty owed to creditors of the corporation is as central to the court's holding in McGivern as is its conclusion regarding the absence of a duty unless the corporation is insolvent and no longer a "going concern."

¶ 35. Furthermore, we note that in our Beloit I decision we relied on the standing discussion in McGiv-ern to resolve the question of "who could sue to recover for any breach" of the duty owed by officers and directors of an insolvent corporation to its creditors. We concluded that "the mechanism by which creditors, as a group for the benefit of the bankruptcy estate, could seek recompense for the actions of the defendants that allegedly caused harm to the creditors as a group" was properly employed in that case because the plaintiff was a committee appointed by the bankruptcy court to sue the directors and officers on behalf of the corporation. Beloit I, 266 Wis. 2d 388, ¶ 42. Although the supreme court reversed our decision in Beloit I, it was for other reasons, and the court did not comment on our discussion of the standing issue. More importantly, the supreme court placed considerable reliance on the Mc-Givern decision to "solidify" its conclusions regarding the necessary prerequisites for creditors' suits against a corporation's officers and directors for breaches of fiduciary duties. Beloit II, 2004 WI 39, ¶ 38. Although the supreme court did not expressly endorse the McGivern "standing" analysis in Beloit II, as we did in Beloit I, the court's recent reliance on McGivern persuades us that it remains a valid exposition of Wisconsin law applicable to the issue before us.

¶ 36. In summary, the trial court did not err in dismissing the Finches' breach of fiduciary duty claims against the directors and Ford. In their breach of fiduciary duties claims, the Finches allege no misconduct by the defendants directed toward them personally but rely solely on their status as unsecured creditors of the corporation. The complaint alleges neither an intent on the Finches' part to seek redress on behalf of all unsecured creditors generally, nor facts that would establish their authority to pursue the fiduciary duty claims in a representative capacity. The claims brought solely on behalf of the Finches as an individual creditor of Southside cannot go forward.

f — i HH HH

¶ 37. As we have noted (see footnote 8), the elements of tortious interference with a contract include a showing that the defendant was not justified or privileged to interfere with the contract in question. Both Ford and the directors assert that the Finches' tortious interference claim must fail because they failed to allege facts sufficient to establish that either Ford or the directors were not justified or privileged in causing Southside to breach its lease with the Finches. As the supreme court has explained:

If a director or managing officer acting bona fide procures, causes or participates in authorizing a breach of contract between his company and. a third person, he may well be regarded as protected only by a conditional privilege, which will be destroyed by a wrongful motive. This conditional privilege of corporate representatives should be recognized in the interest of freedom in exercising discretion to protect the best interests of the corporation which they represent.

Sprecher v. Weston's Bar, Inc., 78 Wis. 2d 26, 40, 253 N.W.2d 493 (1977) (quoting H. Ballantine, On Corporations, § 112, at 275-76 (rev. ed. 1946)). A similar privilege is accorded majority shareholders of a corporation. See Mendelson v. Blatz Brewing Co., 9 Wis. 2d 487, 491-93, 101 N.W.2d 805 (1960).

¶ 38. "The burden of proving lack of privilege, however, is generally not ascribed to the plaintiff. Rather, proof of intentional interference with the existing contractual relations of another is sufficient to establish liability, shifting the burden of proving the justification for such interference upon the defendant . . .." Chrysler Corp. v. Lakeshore Commercial Fin. Corp., 389 F. Supp. 1216, 1221 (E.D. Wis. 1975); see also Wis JI — Civil 2780 (2003) (burden of proof as to whether defendant was privileged or justified to interfere with contractual relationship is on the defendant). We therefore conclude that, to survive a motion to dismiss, it is not necessary for a plaintiff to allege facts sufficient to establish the absence of privilege or justification. Rather, it is enough to assert that the act or acts constituting intentional interference was, in fact, not privileged, which the Finches have done.

¶ 39. The Finches alleged in their complaint that Ford and the directors' "intentional interference" with the Southside-Finch lease "was improper and not privileged." Additionally, it may reasonably be inferred from the Finches' allegations that Ford and the directors, who were Ford employees, caused Southside to transfer to Ford franchise rights worth "in excess of $1,000,000," in order to confer financial benefits on Ford to the detriment of the Finches' rights as Southside's landlord, an arguably improper motive. Cf. Lorenz v. Dreske, 62 Wis. 2d 273, 287, 214 N.W.2d 753 (1974) (holding that a complaint is sufficient if it alleges "that the act of procuring a breach of contract was done with an improper motive").

¶ 40. Ford argues, however, that it derived no benefit from the cessation of Southside's business ("Ford had no interest in the destruction of the Finches' business ....") and that the surrender of Southside's franchise due to its cessation of business was authorized under the franchise agreement ("Ford could have terminated their franchise rights to protect their contractual rights as franchisor."). We conclude that Ford's assertions rely on facts that are not of record at this stage of the litigation. It may well be that Ford and the directors can establish, on a motion for summary judgment or at trial, that they indeed acted within the conditional privilege recognized by Wisconsin law which permits corporate directors and majority shareholders to act in ways that cause a corporation's contracts with third parties to be breached. We cannot conclude at the pleading stage, however, that there are no circumstances under which the Finches will be able to prevail. See Hartridge v. State Farm Mut. Auto. Ins. Co., 86 Wis. 2d 1, 4-5, 271 N.W.2d 598 (1978) (noting that dismissal, at the pleading stage, is appropriate only if it is clear that under no circumstances can the plaintiff recover).

¶ 41. We also conclude that the Finches' complaint properly alleges the remaining elements for a tortious interference with contract claim. The amended complaint alleges the existence of a contract between themselves and a third party, Southside. It alleges that both the directors and Ford intentionally interfered with that relationship by causing Southside to cease doing business and to transfer the dealership franchise rights to Ford for no value. Finally, the amended complaint alleges that the defendants' actions resulted in Southside's insolvency which, in turn, caused the Finches to suffer pecuniary loss in the form of unpaid rents due under the leases. In short, the Finches have adequately pled a cause of action against both the directors and Ford for intentional interference with a contract, and the trial court erred in dismissing this cause of action.

IV

¶ 42. The Finches' final claim is that the transfer of the franchise rights to Ford for no value violated Wisconsin's Uniform Fraudulent Transfer Act, Wis. Stat. § 242.05(1). Ford did not argue to the trial court, in support of its motion to dismiss, that the Finches had failed to state a claim under UFTA, relying instead on the argument that paragraph 20 of the lease barred this claim. A review of both Ford's and the Finches' trial court briefs reveals no discussion of the § 242.05(1) claim beyond whether it was barred by the language of paragraph 20. The general rule is that issues not presented to the trial court will not be considered for the first time on appeal, State v. Caban,, 210 Wis. 2d 597, 604, 563 N.W.2d 501 (1997), and the Finches ask us to deem the issue waived. The waiver rule, however, generally applies only to appellants, and we will usually permit a respondent to employ any theory or argument on appeal that will allow us to affirm the trial court's order, even if not raised previously. See State v. Holt, 128 Wis. 2d 110, 124-25, 382 N.W.2d 679 (Ct. App. 1985).

¶ 43. Ford's basic argument is that the rights it granted Southside under the franchise agreement do not constitute an "asset," and that Southside's relinquishment of those rights was not a "transfer," within the meaning of Wis. Stat. ch. 242. Specifically, Ford asserts that it "had the right to terminate Southside's franchise rights and Southside could not transfer those rights without Ford's approval." As with the defendant's arguments regarding their asserted privilege to cause Southside to breach its lease with the Finches, however, Ford's arguments cannot be evaluated at this stage of the litigation. The franchise agreement is not of record, and notwithstanding the general principles of franchise law on which Ford seeks to rely, a determination whether the agreement created a transferable asset within the meaning of the UFTA requires an examination of the rights and responsibilities of the parties under the franchise agreement.

¶ 44. We are thus not convinced, based solely on the Finches' pleading, that under no circumstances can they recover on this claim. Accordingly, we conclude the trial court erred in dismissing it.

CONCLUSION

¶ 45. For the reasons discussed above, we affirm the appealed order insofar as it dismissed the Finches' claims against the directors and Ford for breach of fiduciary duties. We reverse the dismissal of the tor-tious interference with contract claim against the defendants and the UFTA claim against Ford. We remand to the circuit court for further proceedings on these claims.

By the Court. — Order affirmed in part; reversed in part and cause remanded with directions.

       Finch also operated a Mazda dealership at the same locations under a dealer agreement with Mazda Great Lakes Distributors, Inc. No issues regarding Finch's Mazda dealership are implicated in this appeal.

       Ford described its "dealer development" program as being designed to make dealership opportunities available to individuals who might not otherwise be able to afford the start-up costs of a dealership. The dealership entity, in this case, Southside, is incorporated as an independent corporation. Ford initially becomes the majority shareholder and the prospective future owner, the minority shareholder. As the dealership becomes profitable, the minority shareholder is encouraged to purchase shares from Ford, and if all goes as intended, he or she eventually becomes the sole owner of the dealership.

       All references to the Wisconsin Statutes are to the 2001-02 version unless otherwise noted.

       The Finches' only claim against Southside was for breach of the leases. Further proceedings on the contract claim have been stayed pending the outcome of this appeal, to which Southside is not a party.

       The Finches generally refer to the language of paragraph 20 of the lease as "an exculpatory clause," while Ford and the directors refer to it as a "non-recourse provision." Our analysis does not depend on what label is applied to the language. We will refer to it in this opinion as simply "paragraph 20."

       We emphasize that we are not adopting the federal precedents relied upon by Ford in the trial court when submitting the lease language in support of its motion to dismiss. Whether a court may consider documents referred to, but not attached to or incorporated in, a complaint when deciding a motion to dismiss without converting the motion to one for summary judgment has not been argued before us. We conclude only that the directors are estopped from arguing that the trial court granted summary judgment after they joined Ford in relying on the lease language to support their motion to dismiss and prevailed in that position. See State v. Gove, 148 Wis. 2d 936, 944, 437 N.W.2d 218 (1989) (holding that the doctrine of judicial estoppel recognizes that "[i]t is contrary to fundamental principles of justice and orderly procedure to permit a party to assume a certain position in the course of litigation which may he advantageous, and then after the court maintains that position, argue on appeal that the action was error.").

       The Finches' amended complaint seeks damages against Southside, and only Southside, for "damages caused by Southside's existing and anticipatory breach of the La Crosse and West Salem leases." The damages sought against Ford on the fraudulent transfer claim are "an amount equal to the value of the Mercury/Lincoln Franchise Rights at the time they were transferred by Southside to Ford ... or the amount necessary to satisfy the Finches' claim against Southside under the La Crosse and West Salem leases, whichever is less." On their breach of fiduciary duties claims against Ford and the directors, the Finches seek damages "for the actual pecuniary loss caused to the Finches by Ford's and the Southside Directors' breach of their fiduciary duties to the Finches, as unsecured creditors of Southside."

       The elements of a claim for tortious interference with a contract are as follows: "(1) the plaintiff must have had' a contract or a prospective contractual relationship with a third party; (2) the defendant must have interfered with that relationship; (3) the interference by the defendant must have been intentional; (4) there must be a causal connection between the interference and damages; and (5) the defendant must not have been justified or privileged to interfere." Select Creations, Inc. v. Paliafito America, Inc., 911 F. Supp. 1130, 1156 (E.D. Wis. 1995).

        See Richards v. Richards, 181 Wis. 2d 1007, 1017-18, 513 N.W.2d 118 (1994) (refusing to enforce exculpatory clause on grounds that, among other reasons, its extremely broad language "purports to excuse intentional, reckless, and negligent conduct"); Kellar v. Lloyd, 180 Wis. 2d 162, 183, 509 N.W.2d 87 (1993) ("Wisconsin cases have acknowledged that an exculpatory contract exempting a party from tort liability for harm caused intentionally or recklessly is void as against public policy."); Dobratz v. Thompson, 161 Wis. 2d 502, 515-16, 468 N.W.2d 654 (1991) (citing Restatement (Second) of ContRacts § 195 (1979) with approval); Trainor v. Aztalan Cycle Club, Inc., 147 Wis. 2d 107, 115, 432 N.W.2d 626 (Ct. App. 1988) (recognizing that "the supreme court has, on several occasions, quoted passages from the Restatement which include the statement that [exculpatory] contracts are invalid to the extent they attempt to excuse intentional or reckless conduct"); Discount Fabric House of Racine, Inc. v. Wisconsin Tel. Co., 117 Wis. 2d 587, 595, 345 N.W.2d 417 (1984) (citing Restatement (Second) of ContRacts § 195 (1979) with approval); Arnold v. Shawano County Agric. Soc'y, 111 Wis. 2d 203, 210-11, 330 N.W.2d 773 (1983) (citing Restatement (Second) of ContRacts § 195 (1979) with approval), overruled on other grounds, Green Springs Farms v. Kersten, 136 Wis. 2d 304, 317, 401 N.W.2d 816 (1985); and Merten v. Nathan, 108 Wis. 2d 205, 212-13, 321 N.W.2d 173 (1982) (citing Restatement (Second) of ContRacts § 195 (1979) with approval). See also Rose v. National Tractor Pullers Ass'n, Inc., 33 F. Supp. 2d 757, 766 (W.D. Wis. 1998) (recognizing that the Wisconsin Supreme Court "has indicated that an exculpatory contract cannot absolve reckless conduct").

       "No recourse shall be had .. . for any claim based on, or otherwise in respect of, this Lease, against any. . . stockholder ... [or] director ... all such liability ... being. .. expressly waived and released." (Emphasis added.)

       The internal affairs doctrine is a conflict of laws rule that states that in disputes involving a corporation and its relationships with shareholders, directors, officers, or agents, the law to be applied is the law of the state of incorporation. Black's Law DictionaRY 820 (7th ed. 1999). Wisconsin has identified five factors that may be applied to resolve choice of law disputes: (1) predictability of results; (2) maintenance of interstate order; (3) simplification of the judicial task; (4) advancement of the forum's governmental interests; and (5) application of the better rule of law. Heath v. Zellmer, 35 Wis. 2d 578, 596, 151 N.W.2d 664 (1967).

       Wisconsin Stat. § 180.1704 provides, in relevant part, that "this chapter applies to all foreign corporations transacting business in this state on or after January 1, 1991."

       The supreme court concluded that we had erred in permitting the action to go forward because, although Beloit Corporation may have been insolvent at the time of the actions complained of, it remained "a going concern" during the relevant time period. Beloit Liquidating Trust v. Grade (Beloit II), 2004 WI 39, ¶ 42, 270 Wis. 2d 356, 677 N.W.2d 298.

       We note that the Lorenz decision predates the adoption of Wisconsin's "notice pleading" rule, Wis. Stat. § 802.02, which still requires a complaint to contain "a statement of the general factual circumstances in support of the claim presented," but "less particularity is required under this statute than under the previous rule. See Judicial Council Committee's Note, 1974, Wis. Stat. Ann. § 802.02 (West 1994).

       The Ford-Southside franchise agreement, for example, is not in the record.

       WISCONSIN Stat. § 242.05(1) provides, in relevant part, that "[a] transfer made ... by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made ... if the debtor made the transfer . .. without receiving a reasonably equivalent value in exchange for the transfer . .. and the debtor was insolvent at that time...."