author: SHIRLEY S. ABRAHAMSON, C.J.

text:
    Badger State Bank, Plaintiff-Appellant, v. Roger A. Taylor, Rodney J. Taylor and Economy Feed Mill, Defendants-Respondents-Petitioners.
    Supreme Court

      No. 03-0750.

      Oral argument October 5, 2004.

    Decided November 2, 2004.

    2004 WI 128
    (Also reported in 688 N.W.2d 439.)

      For the defendants-respondents-petitioners there were briefs by James P Czajkowski, Lara Czajkowski Higgins and Czajkowski & Rider, S.C., Prairie du Chien, and oral argument by James P. Czajkowski.

    For the plaintiff-appellant there was a brief by Mark Bromley, Platteville, and oral argument by F. Bromley.

   SHIRLEY S. ABRAHAMSON, C.J.

¶ 1. This is a review of a published decision of the court of appeals reversing a judgment and an order of the Circuit Court for Grant County, Robert E VanDeHey, Judge. The circuit court granted summary judgment to Roger Taylor, Rodney Taylor, and Economy Feed Mill (collectively the Taylors), dismissing Badger State Bank's complaint alleging that the Taylors were the recipients of fraudulent transfers within the meaning of the Wisconsin Uniform Fraudulent Transfer Act, specifically, Wis. Stat. § 242.05(1) (2001-02).

¶ 2. The issue presented is whether a transfer constitutes a fraudulent transfer under Wis. Stat. § 242.05(1) of the Wisconsin Uniform Fraudulent Transfer Act when the transferees (here the Taylors) were unaware that the creditor (here the Bank) held a security interest in the accounts receivable of the debtor (here Vogt's Ag-Tech West, Inc.).

¶ 3. The court of appeals reversed the circuit court's judgment in favor of the Taylors, concluding that the Bank had established all of the elements required by Wis. Stat. § 242.05(1). The court of appeals held that any transfer must be viewed exclusively from the perspective of the creditor Bank; the beliefs of the transferees regarding the nature of the transfer were not relevant to the analysis under § 242.05(1). The court of appeals remanded the cause to the circuit court, directing it to enter judgment in favor of the Bank after it determines the amount of the judgment and the nature of any other remedies to which the Bank may be entitled.

¶ 4. We hold, as did the court of appeals, that the Bank has met all the requirements of Wis. Stat. § 242.05(1) and is therefore entitled to summary judgment in its favor. Accordingly, we affirm the decision of the court of appeals reversing the judgment and order of the circuit court and remanding the cause to the circuit court with directions.

HH

¶ 5. For purposes of the cross motions for summary judgment, the relevant facts are not in dispute. Ronald (Al) Vogt was the president and principal shareholder of Vogt's Ag-Tech West, Inc., a Wisconsin corporation. Ag-Tech was in the business of selling agricultural pesticides, fertilizer, and spraying services.

¶ 6. Badger State Bank made business loans to Ag-Tech. To secure its loans, the Bank held a perfected security interest in Ag-Tech's assets, specifically Ag-Tech's accounts receivable. Ag-Tech was indebted to the Bank at all times material to this action in the approximate amount of $446,000.

¶ 7. Roger and Rodney Taylor did business as Economy Feed Mill, an operation that sold livestock feed.

¶ 8. Ag-Tech sold pesticides, fertilizer, and spraying services to the Taylors for their feed business. The Taylors sold feed to A&T Livestock, LLC, a Wisconsin limited liability company organized under chapter 183 of the Wisconsin Statutes. A&T Livestock raised and sold hogs. Al Vogt was a member of A&T Livestock.

¶ 9. At the time of the transfer at issue in this case, the Taylors owed Ag-Tech $12,489, and A&T Livestock owed the Taylors $17,890. In a memo dated August 9, 2001, Al Vogt and the Taylors agreed to cancel the accounts receivable, whereby Ag-Tech's account receivable from the Taylors would be forgiven in exchange for the Taylors forgiving their account receivable from A&T Livestock. Since the difference between the two accounts receivable was over $5,000, A1 Vogt also paid, by check from Ag-Tech's account, an additional $2,350 to the Taylors in partial payment toward A&T Livestock's remaining debt to the Taylors.

¶ 10. The Bank sued the Taylors to set aside the cancellation of Ag-Tech's account receivable and cash payment as fraudulent transfers under Wis. Stat. § 242.05(1). The Bank asserted that its debtor, Ag-Tech, not A1 Vogt individually, was the transferor, and that the transaction was fraudulent as to the Bank because Ag-Tech was indebted to the Bank, was insolvent, and did not receive "reasonably equivalent value" in exchange for the transfer. The Bank did not consider it relevant that the Taylors did not know of its security interest in the account receivable transferred to them.

¶ 11. On cross motions for summaiy judgment, the circuit court granted summary judgment to the Taylors. The circuit court determined that the Taylors were not dealing with corporate entities; they were dealing with A1 Vogt personally. Thus, A1 Vogt was not the Bank's debtor, the circuit court concluded, and the asset transferred (the Taylors' áccount receivable) was not an asset of Ag-Tech. Accordingly, the circuit court denied the Bank's motion for summary judgment, granted the Taylors' motion for summary judgment, and dismissed the Bank's complaint. The court of appeals reversed the judgment and order of the circuit court.

II

¶ 12. In reviewing a grant of summary judgment, an appellate court applies the standards set forth in Wis. Stat. § 802.08(2) governing summary judgment in the same manner as the circuit court. Summary judgment is properly granted when there are no issues of material fact, but only questions of law upon which the moving party is entitled to judgment.

¶ 13. The interpretation of a statute and the application of a statute to undisputed facts are ordinarily questions of law that this court determines independently of the circuit court and the court of appeals, benefiting from their analyses.

III

¶ 14. A creditor pursuing a claim under Wis. Stat. § 242.05(1) must satisfy three requirements: (1) the creditor's claim arose before the transfer was made; (2) the debtor made the transfer without receiving a reasonably equivalent value in exchange for the transfer; and (3) the debtor either was insolvent at the time of the transfer or became insolvent as a result of the transfer.

¶ 15. Wisconsin Stat. § 242.05(1) provides as follows:

A transfer made or obligation incurred by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made or the obligation was incurred if the debtor made the transfer or incurred the obligation without receiving a reasonably equivalent value in exchange for the transfer or obligation and the debtor was insolvent at the time or the debtor became insolvent as a result of the transfer or obligation.

¶ 16. It is undisputed that Ag-Teeh was a "debtor" of the "creditor" Bank. It is further undisputed that the Bank's claim arose before the transfer was made. Further, because Ag-Tech's "debt" exceeded its "assets," Ag-Tech was "insolvent" under the Act. The parties agree that A1 Vogt was not a debtor of the Bank.

¶ 17. Two requirements of Wis. Stat. § 242.05(1) are at issue in this case: (1) Was an asset of Ag-Tech transferred to the Taylors? And if it was, (2) Did Ag-Tech receive a reasonably equivalent value in exchange for the transferred asset?

¶ 18. First, the Taylors argue that the asset, the account receivable, was not an asset of Ag-Tech within the meaning of Wis. Stat. § 242.05(1) and was never "transferred" by Ag-Tech to them. The Taylors take this position because they believed they were dealing with Al Vogt personally and were unaware of the corporate and legal status of either Ag-Tech or A&T Livestock.

¶ 19. Second, from the Taylors' perspective, the transfer between Al Vogt and the Taylors was for reasonably equivalent value because Al Vogt cancelled the $12,489 they owed him, while they cancelled the $17,890 Al Vogt owed them.

¶ 20. The Taylors argue that they were doing business with A1 Vogt personally, as a sole proprietor, and at no time did business with the corporation, Ag-Tech. They maintain that they did not know A1 Vogt was acting as an agent or employee of any corporate entity. According to the Taylors, A1 Vogt never, either orally or through his correspondence, indicated that either Ag-Tech or A&T Livestock were separate legal entities from himself. None of the invoices and checks in the record from Ag-Tech included the word "Inc." in describing Ag-Tech so that a third party would know a corporate entity was involved.

¶ 21. They argue therefore that, as between the Taylors and Al Vogt, A1 Vogt personally owned the account receivable, not Ag-Tech, and A1 Vogt, not Ag-Tech, was the transferor. Under the Taylors' view of the facts, A1 Vogt was not the Bank's debtor under § 242.05(1) and when A1 Vogt cancelled the account receivable, A1 Vogt was not transferring an asset of Ag-Tech, the Bank's debtor.

¶ 22. The fallacy in this argument is that the Taylors are looking at the transactions as involving only two parties (the Taylors and A1 Vogt), rather than as involving three or four parties (the Taylors, A1 Vogt, Ag-Tech, and A&T Livestock). By treating the transactions as involving only two parties, the Taylors ignore principles of agency law and Wis. Stat. § 242.05(1). Wisconsin Stat. § 242.10 provides that the law relating to principal and agent supplements chapter 242. Nothing in § 242.05(1) indicates that it displaces the law relating to principal and agent.

¶ 23. Here, Al Vogt, as the president and sole shareholder of Ag-Tech, was the agent of Ag-Tech. Under agency law Ag-Tech was either a partially disclosed principal or an undisclosed principal.

¶ 24. Al Vogt was acting on behalf of Ag-Tech when he engaged in the transactions that eventually led to the Taylors owing Ag-Tech money. The goods Al Vogt sold to the Taylors belonged to Ag-Tech, as did the account receivable resulting from the sale. Ag-Tech apparently acquiesced in and performed the transactions Al Vogt arranged with the Taylors.

¶ 25. An undisclosed or partially disclosed principal, like Ag-Tech, becomes a party to a transaction between the agent (Al Vogt) and the third party (the Taylors) even if the third party (the Taylors) is unaware of the name or existence of the principal. Thus, had the Taylors defaulted in paying Al Vogt, Ag-Tech could have sued the Taylors for the funds they owed the corporation. Likewise, had Al Vogt (or Ag-Tech) failed to perform under the sales agreements, the Taylors could have sued either Al Vogt, or Ag-Tech, or both.

¶ 26. We must also examine the cancellation of the account receivable under agency law. Had the Taylors paid Al Vogt to cancel the account receivable, Ag-Tech (the principal) could not have recovered payment from the Taylors. A1 Vogt would have been Ag-Tech's agent in accepting the payment, and payment to the agent would be payment to the principal. Wisconsin Stat. § 242.05(1) changes this dynamic. Under agency law, A1 Vogt acted as agent on behalf of his principal (Ag-Tech) in cancelling the account receivable and giving the Taylors the check drawn on Ag-Tech's account. Because Ag-Tech made the transfers to the Taylors (through its agent, A1 Vogt), under Wis. Stat. § 242.05(1), Ag-Tech is the transferor of the account receivable and the check.

¶ 27. In sum, when the transactions between A1 Vogt and the Taylors are properly viewed as three- or four-party transactions under agency law and Wis. Stat. § 242.05(1), the account receivable belonged to Ag-Tech and Ag-Tech transferred the account receivable and the check to the Taylors.

¶ 28. The next question, then, is whether Ag-Tech received reasonably equivalent value for the transfer under Wis. Stat. § 242.05(1).

¶ 29. The Taylors argued that by collapsing the two distinct legal entities (Ag-Tech and A&T Livestock) into one (A1 Vogt), the approximately $15,000 they received from Ag-Tech was compensated for by the almost $18,000 they cancelled as owing them from A&T Livestock. The Taylors' argument makes sense if Ag-Tech, A&T Livestock, and A1 Vogt were all one legal entity. They were not. The record reflects three entities existed: Ag-Tech, A&T Livestock, and A1 Vogt.

¶ 30. From the perspective of the creditor Bank, when A1 Vogt cancelled Ag-Tech's account receivable, Ag-Tech was insolvent and received nothing in return for the cancellation. It was A&T Livestock that benefited from the transaction, not Ag-Tech. Therefore, canceling the two accounts receivable, while of value to the Taylors, did not inure to the benefit of Ag-Tech at all.

¶ 31. We conclude, as did the court of appeals, that Ag-Tech did not receive reasonably equivalent value for the loss of its cash and account receivable.

¶ 32. Having resolved the two disputed statutory requirements against the Taylors, namely, whether the account receivable was an asset of the debtor Ag-Tech that was transferred by Ag-Tech, and whether Ag-Tech received reasonably equivalent value, we conclude that the transfer satisfied the requirements of Wis. Stat. § 242.05(1). The Taylors argue, however, that the transfer should not be held to be a fraudulent transfer under Wis. Stat. § 242.05(1). They urge the court to interpret the statute to protect innocent parties so that a bona fide purchaser's title to property is beyond the reach of the transferor's creditors.

IV

¶ 33. The Taylors claim to be similar to bona fide purchasers for value; that is, they claim to be parties who entered into a transaction in good faith and for value. In sum, the Taylors ask the court to interpret Wis. Stat. § 242.05(1) from their perspective as innocent transferees.

¶ 34. The Taylors derive this transferee-oriented interpretation by examining the entire Wisconsin Uniform Fraudulent Transfer Act.

¶ 35. The Taylors point out that Wis. Stat. § 242.04(1)(a) proscribes transfers made with "actual intent to hinder, delay or defraud any creditor" and protects transfers to a person who had no knowledge of a transferor's intent and "who took in good faith and for a reasonably equivalent value." These provisions give transferees the means to know of the existence of a potential fraud, and the transferees can protect themselves by refusing to participate in the transfer. These provisions give transferees a defense against the creditor.

¶ 36. The Taylors would like to be able to use the defenses provided in Wis. Stat. § 242.08(1), but these defenses by the explicit language of § 242.08(1) apply only to claims made under § 242.04(1)(a). The defenses have no bearing on the Bank's claim made here under § 242.05(1).

¶ 37. We agree with the Bank and the court of appeals that we must examine the requirements of a claim under Wis. Stat. § 242.05(1), not the requirements of a claim and the defenses available under other provisions of chapter 242.

¶ 38. Section 242.05(1) is a "constructive fraud" provision. It provides a per se rule. Good faith is not relevant in § 242.05(1). Section § 242.05(1) does not require that the Taylors be guilty of any fraud. Indeed, no one ascribes wrong intent or evil purpose to the Taylors.

¶ 39. The usual motive for transfers without reasonably equivalent value in exchange is to hinder creditors, and in fact such transfers ordinarily do hinder creditors. But such intent is difficult to prove, and the drafters of the Uniform Fraudulent Transfer Act included provisions addressing transactions that might be considered wrongful toward creditors even if a debtor's intent to hinder, delay, or defraud is not proven. The focus in "constructive fraud" shifts from a subjective intent to an objective result. Proof of "constructive fraud" simply entails proof of the requirements of the statute.

¶ 40. The Taylors' argument that Wis. Stat. § 242.05(1) should be interpreted from their perspective runs counter to the objectives of the Uniform Fraudulent Transfer Act. The Wisconsin legislature enacted the Uniform Fraudulent Transfer Act as chapter 242 in 1987. The Uniform Fraudulent Transfer Act, which was adopted by the National Conference of Commissioners on Uniform State Laws in 1984, has been adopted by more than 40 states. The goal in the interpretation of uniform laws is uniformity among the states.

¶ 41. The Uniform Fraudulent Transfer Act reflects a strong desire to protect creditors and to allow for the smooth functioning of our credit-based society. It is a creditor-protection statute. Without such protection for creditors, "[creditors would generally be unwilling to assume the risk of the debtor's fraudulent transfers."

¶ 42. In accordance with the objectives of the drafters of the Uniform Fraudulent Transfer Act, the Legislative Reference Bureau's analysis of the bill creating chapter 242 describes the goal of proscribing constructive fraud as follows: The bill "creates a class of transfers of property by debtors that is fraudulent to creditors and provides defrauded creditors with remedies. This class of transfers could generally have the effect of depriving creditors of assets that would otherwise be available to satisfy debts when the debtor becomes insolvent or is about to become insolvent."

¶ 43. Both the language of chapter 242 and the policies motivating the Uniform Fraudulent Transfer Act are couched in terms of creditor protection. The purpose and scope of chapter 242 can therefore properly be understood only if viewed from the perspective of the creditor (the Bank), not the transferee (the Taylors). From the creditor's perspective, the present case falls squarely into Wis. Stat. § 242.05(1), the transferee has no defenses, and the creditor is protected. Viewed from the Bank's perspective, its debtor, Ag-Tech, was insolvent, cancelled a $12,000 claim against the Taylors, gave the Taylors a check in the sum of $2,350, and received nothing in return.

¶ 44. The circuit court erred as a matter of law by focusing on the transferee's point of view. The transferee's subjective state of mind does not play a role in resolving the present case under Wis. Stat. § 242.05(1).

¶ 45. For the reasons set forth, we hold, as did the court of appeals, that the Bank has met all the requirements of Wis. Stat. § 242.05(1) and is therefore entitled to judgment in its favor. Accordingly, we affirm the decision of the court of appeals reversing the judgment and order of the circuit court and remanding the cause to the circuit court with directions.

By the Court. — The decision of the court of appeals is affirmed.

        Badger State Bank v. Taylor, 2004 WI App 17, 268 Wis. 2d 774, 674 N.W.2d 872.

       All references to the Wisconsin statutes are to the 2001-02 version unless otherwise indicated.

        Badger State Bank, 268 Wis. 2d 774, ¶ 11.

      /d.

      .Hubbard v. Messer, 2003 WI 145 ¶ 7, 267 Wis. 2d 92, 673 N.W.2d 676.

      . Id

       State v. Cole, 2003 WI 59, ¶ 12, 262 Wis. 2d 167, 663 N.W.2d 700.

       " 'Debtor' means a person who is liable on a claim." Wis. Stat. § 242.01(6). "Claim" is "a right to payment, whether or not the right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured." Wis. Stat. § 242.01(3).

      " 'Creditor' means a person who has a claim." Wis. Stat. § 242.01(4).

       " 'Debt' means liability on a claim." Wis. Stat. § 242.01(5).

       " 'Asset' means property of a debtor ...." Wis. Stat. § 242.01(2). Statutory exclusions from the definition of an "asset" are not relevant to this case.

       "A debtor is insolvent if the sum of the debtor's debts is greater than all of the debtor's assets at a fair valuation." Wis. Stat. § 242.02(2).

       " 'Transfer' means every mode, direct or indirect, absolute or conditional, voluntary or involuntary, of disposing of or parting with an asset or an interest in an asset, and includes payment of money, release, lease and creation of a lien or other encumbrance." Wis. Stat. § 242.01(12).

       The Taylors proffered another way of calculating "reasonably equivalent value" for the first time in their Reply Brief and at oral argument. The Taylors assert that by wiping out each other's debt, Ag-Tech, A&T Livestock, and the Taylors were all able to stay in business. The "reasonably equivalent value," according to the Taylors, is this ability to remain in business. They cite Image Worldwide, Ltd. v. Parkway Bank & Trust Co., 139 F.3d 574 (7th Cir. 1998), for this proposition.
      Even if we ignore that the Taylors' new argument was waived because it was not presented anywhere in the circuit court, the court of appeals, or its main brief to this court, Image Worldwide does not compel the result the Taylors seek. Applying Illinois law based on the Uniform Fraudulent Transfer Act, Image Worldwide involved "reasonably equivalent value" within the context of "transfers" amongst corporate affiliates. The Seventh Circuit noted that indirect benefits could be considered as part of valuation, but only when the cross-stream guarantees (a transaction) strengthened the corporate group as a whole. Ultimately, however, the Seventh Circuit did label the transfer fraudulent and voided it because the transaction did not strengthen the corporate group. It was represented at oral argument that both Ag-Tech and A&T Livestock went out of business soon after these transactions.

       Wisconsin Stat. §242.10 reads: "Unless displaced by this chapter, the principles of law and equity, including the law merchant and the law relating to principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake, insolvency or other validating or invalidating cause, supplement this chapter" (emphasis added).

        See Diederich v. Wis. Wood Prods., Inc., 247 Wis. 212, 218, 19 N.W.2d 268 (1945) ("The general rule is that the president, treasurer, secretary and other officers of a corporation are merely its agents .... [A] president who is also general manager of a corporation has the implied power to do anything that the corporation could do within the general scope of its business.") (internal quotations and citations omitted).

       When a third party is aware that the agent is acting on behalf of a principal, but unaware of the identity of the principal, that principal is "partially disclosed." Restatement (Second) of Agency § 4(2) (1959). This section is quoted with approval in Benjamin Plumbing, Inc. v. Barnes, 162 Wis. 2d 837, 848-49, 470 N.W.2d 888 (1991).

       An undisclosed principal exists when the third party has no notice that the agent is acting on behalf of a principal. Restatement (Second) of Agency § 4(3) (1959).

        See Restatement (Second) of Agency § 307(l)(a) (1959) ("[Ujntil the existence of the principal is known, the agent has power to rescind, perform, and receive performance of the contract and to modify it with binding effect, if the contract or conveyance, as modified, is within his agency powers.").

        See Johnson v. Associated Seed Growers, Inc., 240 Wis. 278, 282-83, 3 N.W.2d 332 (1942) (no proof as to express authority of agent but sufficient proof that principal acquiesced in and performed contract and benefited by accepting the warehouse receipts; consequently, agent can be deemed to have possessed necessary authority to negotiate on behalf of principal and agent-principal status existed).

       Restatement (Second) of Agency § 7 cmt. d; § 186, cmt. (1959). See also Benjamin Plumbing, Inc. v. Barnes, 162 Wis. 2d 837, 855, 470 N.W.2d 888 (1991) ("Clearly, it has long been the rule in Wisconsin that a corporation can be contractually bound even where the corporate name was not used in the contract.").

        See also Indiana Gas Co. v. Home Ins. Co., 141 F.3d 314, 319 (7th Cir. 1998) ("The proposition that an agent for an undisclosed principal is liable does not imply that the undisclosed principal is not bound by the contract; the full statement of the 'venerable rule' is that both agent and principal are bound." (emphasis omitted) (citing Restatement (Second) of Agency §§ 186, 302)).

       The Bank is concerned only with the transfer from Ag-Tech to the Taylors. They are not concerned about the A&T Livestock account receivable. Nothing in this opinion prevents them from seeking their almost $18,000 from A&T Livestock.

       "Reasonably equivalent value" is not defined in the Uniform Fraudulent Transfer Act. "Value" is defined as follows: 'Value is given for a transfer or an obligation if, in exchange for the transfer or obligation, property is transferred or an antecedent debt is secured or satisfied...." Wis. Stat. § 242.03(1).

       A1 Vogt was an agent of A&T Livestock, as well as of Ag-Tech. Under Wis. Stat. § 183.0301(l)(a), "[e]ach member [of a limited liability company] is an agent of the bmited habihty company... for the purpose of its business.". The statute further provides that "[t]he act of any member... binds the limited liability company ... ." Wis. Stat. § 183.0301(l)(b). When the Taylors agreed with Al Vogt, as agent of his undisclosed principal A&T Livestock, to release the almost $18,000 owed to the Taylors, the benefit flowed to A&T Livestock, not Ag-Tech.

       Wisconsin Stat. 242.04(l)(a) reads as follows: "A transfer made or obligations [sic] incurred by a debtor is fraudulent as to a creditor, whether the creditor's claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation: (a) With actual intent to hinder, delay or defraud any creditor of the debtor
      Section 242.04(l)(a)(l) requires proof of the debtor's intent, whereas § 242.05(1) does not.

       Wis. Stat. § 242.08(1).

       Wisconsin Stat. § 242.08(1) provides: "A transfer or obligation is not voidable under s. 242.04(l)(a) against a person who took in good faith and for a reasonably equivalent value or against any subsequent transferee or obligee."
      Another statute providing a defense is Wis. Stat. § 242.05(2), which renders a transfer to an insider a fraudulent transfer when the insider had reasonable cause to believe that the debtor was insolvent. Neither party raised this issue of whether A1 Vogt qualified as an insider. In any event, the Bank brought its claim under § 242.05(1).

       Frederick Tung, Limited Liability and Creditors' Rights: The Limits of Risk Shifting to Creditors, 34 Ga. L. Rev. 547, 562-63 (2000).

       Although the court of appeals supported its decision by asserting that Wis. Stat. § 242.05(1) is clear on its face, the court of appeals nevertheless relied on Wirtz v. Jensen, 238 Wis. 334, 341, 298 N.W. 172 (1941), for the proposition that the statute does not require a showing that the transferee possesses fraudulent intent.

        The Taylors distinguish Wirtz on its facts and law. Regarding the facts, in Wirtz (unlike in the present case) the transferees were aware that the transferor was the debtor of another and that the transfer would hinder the transferor's creditors. In Wirtz, the legal issue was whether the transferees must participate in the fraudulent intent for the transfer to be fraudulent. Intent is not an issue in the present case.

       Peter A. Alces, Generic Fraud and the Uniform Fraudulent Transfer Act, 9 Cardozo L. Rev. 743, 743 (1987) ("But the bad man [in the Uniform Fraudulent Transfer Act] to which I allude is not necessarily bad, except perhaps from the perspective of an all-assets secured creditor.").

        The Nostalgia Network, Inc. v. Lockwood, 315 F.3d 717, 719 (7th Cir. 2002).

         See Unif. Fraudulent Transfer Act prefatory note, 7A U.L.A. 269 (1999); Tung, supra note 28, at 563; Douglas G. Baird & Thomas H. Jackson, Fraudulent Conveyance Law and Its Proper Domain, 38 Vand. L. Rev. 829, 830-32 (1985); Barry L. Zaretsky, Fraudulent Transfer Law as the Arbiter of Unreasonable Risk, 46 S.C. L. Rev. 1165, 1166-67 (1995).

       Tung, supra note 28, at 562-63; Louis J. Verner, Transfers in Fraud of Creditors Under the Uniform Acts and the Bankruptcy Code, 92 Com. L.J. 218, 233-37 (1987).

        See Unif. Fraudulent Transfer Act, 7A U.L.A. 266 (Supp. 2004).
      The Uniform Fraudulent Transfer Act replaced the Uniform Fraudulent Conveyances Act, which was adopted by the Conference in 1918 and enacted in Wisconsin in 1919. See Analysis of 1987 S.B. 115, available at the Legislative Reference Bureau, Madison, Wisconsin.
      The sources of the Uniform Act date back to English and European law. Fraudulent conveyance law in the United States has its roots in the 1570 Statute of 13 Elizabeth, which prohibited a wide array of fraudulent conveyances. Verner, supra note 33, at 219. However, the concept of voiding fraudulent conveyance has much earlier roots, both in England and on the European Continent. See Verner, supra note 33, at 218. Fraudulent conveyances were prohibited as early as 1215 through a provision of the Magna Carta. Id. at 218 & n.l (citing the Magna Carta c. 32: "No freeman henceforth shall give or sell more of his land, but so that of the residue of the lands, the lord of the fee may have the service due him, which belongs to the free."). In Europe the concept can be traced to the Justinian Code: "Again, if any one has transferred his property to another in fraud of his creditors, upon judgment to that effect by the chief provincial magistrate, the creditors of the transferor may seize his property, avoid the transfer and recover the things transferred...." Max Radin, Fraudulent Conveyances at Roman Law, 18 Va. L. Rev. 109, 109 (1931) (quoting the Institutes of Justinian (Justinian Code)). See also Unif Fraudulent Transfer Act prefatory note, 7A U.L.A. 268 (1999).

       Wis. Stat. § 242.11.

       Frank R. Kennedy, Involuntary Fraudulent Transfers, 9 Cardozo L. Rev. 531, 534 (1987) ("If an economic system employing credit is to function efficiently, creditors must be able to enforce obligations assumed by or imposed on their debtors. The law of fraudulent and preferential transfers consists of rules that have developed to enable creditors to enforce the duty of a debtor to be fair to all creditors."); see also Uniform Law Commissioners, Why State Should Adopt the Uniform Fraudulent Transfer Act, available online at http://www.nccusl.org/Update/uniformact_ why/uniformacts-why-ufta.asp ("Credit is essential to the economic life of this country.... Credit remains available so long as those who extend it are given assurances about their rights at default. The Uniform Fraudulent Transfer Act provides assurances to creditors that help make credit available to all of us.").

       Christian C. Day et al., Riding the Rapids: Financing the Leveraged Transaction Without Getting Wet, 41 Syracuse L. Rev. 661, 700 (1990) ("The Uniform Fraudulent Transfer Act is the latest stage in a long evolution which has sought to protect creditors from the fraudulent transfer of property by debtors."); H. Bruce Bernstein, Leveraged Buyouts and Fraudulent Conveyances: Yet Another Update, 7 J. Bankr. L. & Prac. 315, 316 (1998) ("This ancient creditor protection device [the avoidance of a fraudulent transfer] has found its way into the law of the United States in four basic ways ... (iii) the Uniform Fraudulent Transfer Act....").

       Tung, supra note 28, at 563-64.

       Legislative Reference Bureau Analysis of 1987 S.B. 115. The prefatory note (analysis) is distributed to all legislators. See Wis. Stat. § 13.92(l)(b)2.

        Kirkland v. Risso, 98 Cal. App. 3d 971, 977 (1979) (interpreting a substantially similar constructive fraud provision).


source: Caselaw Access Project

license: Public Domain

text:
    City of Pewaukee, Plaintiff-Appellant-Petitioner, v. Thomas L. Carter, Defendant-Respondent.
    Supreme Court

      No. 03-1114.

      Oral argument September 22, 2004.

    Decided November 4, 2004.

    2004 WI 136
    (Also reported in 688 N.W.2d 449.)

      For the plaintiff-appellant-petitioner there were briefs by H. Stanley Riffle, Rick D. Trindl, Julie A. Aquavia and Arenz, Molter, Macy & Riffle, S.C., Wauke-sha, and oral argument by Rick D. Trindl.

    For the defendant-respondent there were briefs by Rex R. Anderegg and Anderegg & Mutschler, LLP, Milwaukee, and oral argument by Rex Anderegg.

    An amicus curiae brief was filed by Daniel M. Olson, Madison, on behalf of the League of Wisconsin Municipalities.
   SHIRLEY S. ABRAHAMSON, C.J.

¶ 1. This is a review of the published decision of the court of appeals affirming an order of the circuit court for Waukesha County, Mark Gempeler, Judge. The circuit court denied the City of Pewaukee's request for a new trial and dismissed the case upon the motion of Thomas L. Carter, the defendant. The City requested a new trial pursuant to Wis. Stat. § 800.14(4) (2001-02), which provides that upon a request from either party to a municipal court action (or on its own motion), the circuit court shall order that a new trial be held in circuit court.

¶ 2. Relying on Wis. Stat. § 800.14(4) and Village of Menomonee Falls v. Meyer, the court of appeals affirmed the order of the circuit court. The court of appeals held that no trial occurred in municipal court under § 800.14(4) because the matter had not been "fully litigated." The matter had not been fully litigated, according to the court of appeals, because only the City had presented witnesses and evidence and the municipal court dismissed the City's case with prejudice after the defendant moved for dismissal at the close of the City's presentation of its evidence, but before the defendant put in his evidence.

¶ 3. The issue before this court is whether a "trial" occurred in the municipal court for the purpose of triggering the City's right to obtain a new trial in circuit court under Wis. Stat. § 800.14(4). More precisely, the question is: Did the municipal court proceeding constitute a "trial" under § 800.14(4) when the City presented sworn witnesses, those witnesses were cross-examined by the defendant, and the case was dismissed with prejudice upon the defendant's motion to dismiss at the close of the City's case-in-chief?

¶ 4. We conclude that the municipal court proceeding in the present case constituted a trial under Wis. Stat. § 800.14(4) because the City presented its case, the defendant had an opportunity to present his evidence (even though he chose not to do so), and the matter was judicially resolved on its merits. We therefore conclude that the municipal court proceeding in the instant case triggered the City's statutory right to a new trial under Wis. Stat. § 800.14(4). Accordingly, we reverse the decision of the court of appeals and the order of the circuit court and remand the cause to the circuit court to grant the City's request for a new trial.

I

¶ 5. The facts of this case are not in dispute. At approximately 7:30 a.m. on July 27, 2001, after his involvement in an automobile accident, Thomas L. Carter (the defendant) was cited by the City of Pewau-kee for operating a motor vehicle while intoxicated and with a prohibited alcohol concentration. After several delays, the trial was set for June 20, 2002, in municipal court for the Town of Brookfield.

¶ 6. The City presented three witnesses at the municipal court proceeding. The first was an analyst from the State Laboratory of Hygiene who testified regarding the defendant's blood sample and on how blood-alcohol concentration was determined. The second witness was the driver of the car with which the defendant's car collided. Finally, the City presented the police officer who was called to photograph the accident scene. The City elicited testimony from all three witnesses, and the defendant cross-examined each one. The City also presented documentary evidence.

¶ 7. After the City's witnesses testified and were subject to cross examination, the City informed the municipal court that it would not move to admit the defendant's blood test because the arresting officer (who had ordered the defendant's blood drawn but was not the officer who had testified) was unavailable to testify. Instead of requesting a continuance or adjournment, the City rested its case, relying on the evidence already presented.

¶ 8. Before presenting any evidence, the defendant moved to dismiss the action on the ground that the City had failed to meet its burden of proof. The municipal court granted the defendant's motion to dismiss the action with prejudice.

¶ 9. Pursuant to Wis. Stat. § 800.14(4), the City requested a new trial in circuit court. The defendant filed a motion in circuit court to dismiss the City's request on the ground that the municipal court proceeding was not a "fully litigated" trial and therefore the City did not have the right to request a "new trial" as provided in § 800.14(4). The circuit court, relying on the Meyer case, issued an order granting the defendant's motion. The circuit court reasoned that the matter was not fully litigated because each party was not able to litigate fully its respective position. The court of appeals affirmed the order of the circuit court, concurring with the circuit court's reasoning that a full trial requires that a defendant have the opportunity to present a defense or rest its case. The City now seeks review of the decision of the court of appeals.

I — I HH

¶ 10. This case involves the interpretation of Wis. Stat. § 800.14(4) and the application of the statute to the undisputed facts of the present case. These are issues of law that we determine independently of the circuit court and court of appeals, benefiting from their analyses.

A

¶ 11. We begin with the statutes governing the parties' rights to move a case from municipal court to circuit court. Either party may move a case from municipal court to circuit court by way of appeal pursuant to Wis. Stat. § 800.14(1) and by way of a new trial (before a judge or jury) pursuant to § 800.14(4). A defendant may also in certain cases plead not guilty, bypass the municipal court, and seek a jury trial in circuit court pursuant to § 800.04(l)(d).

¶ 12. An appeal differs from a new trial. An appeal is determined on the record in the municipal court. No one disputes that in the instant case the City could have appealed the circuit court's order of dismissal under Wis. Stat. § 800.14(5); the circuit court would have reviewed the record of the municipal court to determine the validity of the dismissal of the action.

¶ 13. In a new trial, each party presents its evidence anew. "[A]ny errors committed by the municipal court are completely vitiated. A party may also raise issues in the circuit court that he or she failed to raise in the prior proceeding."

¶ 14. Wisconsin Stat. § 800.14(4) provides that after notice of appeal is filed under § 800.14(1) and "[u]pon request of either party ... or on its own motion, the circuit court shall order that a new trial be held in circuit court."

¶ 15. The very words of Wis. Stat. § 800.14(4) that "a new trial be held in circuit court" presuppose that a trial has taken place in municipal court. This interpretation of § 800.14(4) is uncontroversial and leaves us with the seemingly simple question of determining whether a particular proceeding in municipal court constitutes a'trial under § 800.14(4).

B

¶ 16. Defining the word "trial" would not seem to present a particularly difficult task, and in the abstract, it is not difficult. Black's Law Dictionary defines "trial" as "[a] formal judicial examination of evidence and determination of legal claims in an adversary proceeding."

¶ 17. This dictionary definition is consistent with the definition of "trial" found in the 1856 Wisconsin statutes and in later versions of the statutes: "A trial is the judicial examination of the issues between the parties, whether they be issues of law or of fact."

¶ 18. The word "trial" is not currently defined in the Wisconsin statutes. The lack of a definition matters little though, because the definitions of the word "trial" set forth above are not particularly helpful in determining for the purposes of Wis. Stat. § 800.14(4) what events in a particular municipal court proceeding constitute a judicial examination of the issues between the parties, whether they be issues of law or fact. Resolving what events constitute a "trial" under the statutory right to a new trial in Wis. Stat. § 800.14(4) requires a more nuanced determination of the meaning of "trial" than provided by a general definition.

¶ 19. The word "trial" has different meanings in different contexts. Trials take many forms depending on such factors as the nature of the case, the forum and the purpose for which the word "trial" is being determined. Trials are also a continuum of events.

¶ 20. Courts and legislatures have taken different approaches to describing the events needed to constitute a trial. On the one hand, the events constituting a trial may be established by setting forth a bright-line rule for the commencement of a trial and then treating the commencement of a trial sufficient to constitute a trial.

¶ 21. For example, the California civil procedure code declares that a trial shall be deemed to actually commence at the beginning of the opening statement of any party, or if there is no opening statement, then on the administering of the oath or affirmation to the first witness or the introduction of evidence. Similarly, in determining when an accused's double jeopardy protections attach, the rule is that the protections attach once a jury is empanelled (in a jury trial) or once the first witness has been sworn (in a bench trial).

¶ 22. In the context of substitution of a judge, the Wisconsin Supreme Court described the commencement of a trial as follows:

Plaintiffs ... assert[] that the trial was commenced at the hearing on the temporary injunction because evidence was adduced which could be used in the final determination of the merits. We think not.
In People v. Rice Associates a New York court held that "trial" in its commonly accepted meaning is that part of a civil or criminal proceeding beginning with the opening of the case to the jury and ending with the verdict. And in Molen v. Denning & Clark Livestock Co. the Idaho court quoted with approval the definition of "trial" as set forth in Corpus Juris. "A trial may be said to have commenced when all of the preliminary questions have been determined and the jury, or the court in the absence of a jury, enters on the examination of the facts for the purpose of determining the controversy." And in Superior Oil Co. v. Superior Court it was contended that a trial had been commenced with the hearing of a motion for a preliminary injunction.. .. The court held that under the practice in California it is assumed that a trial on the merits follows the hearing and issuance of a preliminary injunction. Thus, we conclude that the "trial" was not actually commenced at the time of the hearing on the preliminary injunction within the meaning of that line of Wisconsin cases holding that a request for substitution comes too late if made after the commencement of the trial of the action.

¶ 23. On the other hand, the Supreme Court of Ohio set forth a number of indicia to assist courts in determining whether a trial had taken place for the purpose of allowing a new trial. The Ohio court started with a definition of the word "trial" similar to the definition in earlier Wisconsin statutes and went on to state the indicia of a trial as follows:

We further hold that the proper test for determination of whether a proceeding is a trial... is an inquiry that focuses on the substance of the proceeding rather than on its form. A proceeding is considered a trial... when the indicia of trial substantially predominate in the proceeding. In deciding whether a proceeding rises to the level of a trial. . . courts should consider the nature of an individual proceeding.
A list of relevant indicia may include (1) whether the proceeding was initiated by the pleadings, (2) whether it took place in court, (3) whether it was held in the presence of a judge or magistrate, (4) whether the parties or their counsel were present, (5) whether evidence was introduced, (6) whether arguments were presented in court by counsel, (7) whether issues of fact were decided by the judge or magistrate, (8) whether the issues decided were central or ancillary to the primary dispute between the parties, (9) whether a judgment was rendered on the evidence.

The Ohio court noted the indicia listed were not exhaustive and that the focus of the inquiry "is whether there is a substantial predominance of indicia of trial... ."

¶ 24. In contrast to the indicia described by the Ohio court, Judge Richard Brown's dissent in the court of appeals in the instant case used a test more along the lines of Justice Potter Stewart's famed "I know it when I see it" test. Judge Brown declared that a trial is what lawyers commonly view as a trial: "I would bet that there is not a litigator in this state who, following a directed verdict after evidence was taken and one party rested, would walk out of the courtroom believing that he or she was not in trial."

¶ 25. The court of appeals in the present case relied neither on the definition of the word "trial" nor on these indicia of a trial. Rather, the court of appeals relied on its earlier decision in Village of Menomonee Falls v. Meyer, 229 Wis. 2d 811, 601 N.W.2d 666 (Ct. App. 1999), to declare that a trial had not occurred in the municipal court in the instant case. We therefore turn to the Meyer case.

C

¶ 26. We first compare the facts in Meyer and in the instant case to determine whether they are analogous. We next explore the reasoning of the Meyer case to determine whether we agree with it.

¶ 27. Although the facts of Meyer and the instant case may seem similar, the two cases are in fact different.

¶ 28. Paul Meyer, like the defendant in the instant case, was arrested for operating a motor vehicle while intoxicated and with a prohibited alcohol concentration. Prior to any proceeding in municipal court, Meyer requested the police report of his arrest. The Village informed Meyer that no such report existed. The report later turned up. Meyer then moved in limine in municipal court to preclude the introduction of the police report; the municipal court granted the motion. Meyer then moved to dismiss the action on the merits. The Village conceded it would not be able to prosecute Meyer without the police report, and the municipal court granted Meyer's motion to dismiss the action on the merits.

¶ 29. The Village sought a new trial in circuit court pursuant to Wis. Stat. § 800.14(4). In response, Meyer contended that a circuit court could not grant a new trial because "the merits of the case had not been determined before the municipal court." The circuit court allowed the new trial, and Meyer was ordered to pay the forfeiture. Meyer appealed, and the court of appeals reversed the circuit court's order allowing a new trial.

¶ 30. Unlike in the present case, the motion to dismiss in Meyer was made prior to opening statements, prior to the introduction of any evidence, and prior to the swearing of any witnesses. Indeed, the court of appeals in Meyer employed the word "trial" four times only in sentences using the future tense. Apparently in Meyer the court of appeals was attempting to distinguish pretrial motion practice from the prerequisite trial under Wis. Stat. § 800.14(4).

¶ 31. In the instant case, unlike in Meyer, several indicia of a trial are present.

¶ 32. This case does not involve pretrial motion practice in municipal court; the municipal court proceeding went beyond pretrial motions. The motion in the instant case was made after the City presented its evidence and closed its case in chief.

¶ 33. The City presented three witnesses to address the substantive question at issue, namely whether the defendant had operated a motor vehicle while under the influence of intoxicants. The defendant cross-examined the City's witnesses. The defendant's motion after all the City's evidence was presented did not transform the municipal proceeding into a motion hearing or interlocutory matter.

¶ 34. The municipal court examined the facts (in the testimony of the City's witnesses and the documentary evidence) and the law in deciding the legal issue of whether to grant the defendant's motion to dismiss the matter on the merits. The municipal court judicially resolved the merits of the City's case.

¶ 35. In the instant case, the proceeding in the municipal court had several events ordinarily occurring in a trial, and indeed the case was fully litigated as far as the parties were concerned. The party with the burden of proof presented its evidence in full, and the defendant engaged in cross-examination. The defendant chose not to present his evidence. The municipal court then judicially decided the case upon the defendant's motion by resolving a question of law on the basis of the testimony and documentary evidence presented.

¶ 36. For these reasons, although we agree with the court of appeals that in Meyer no prior trial occurred in the municipal court, Meyer and this case are factually distinguishable, and the court of appeals' reliance on the Meyer case to decide the instant case was erroneous.

D

¶ 37. Viewing the municipal court proceeding in the instant case as a trial is consistent with the definitions of the word "trial" and the various indicia of a trial. The court of appeals did not, however, consider any definition of trial or the distinguishing facts of the instant case. Instead the court of appeals relied on the reasoning of the Meyer case to decide the instant case. We do not find the Meyer case persuasive.

¶ 38. In Meyer, although the case was resolved at the municipal court, the court of appeals adopted the proposition that "[b]efore a case can be tried 'for an additional time,' it must have been fully litigated at an earlier time." The court of appeals in the present case read Meyer as explicitly requiring that "a full trial of the parties' issues in the municipal court is a condition precedent to a 'new' trial in the circuit court." The City challenges the court of appeals' insistence that a matter be "fully litigated" or he "fully tried" in municipal court before a new trial can be granted in circuit court. The City correctly points out that the words "fully litigated" or "full trial" appear neither in Wis. Stat. § 800.14(4) nor in any case law prior to Meyer.

¶ 39. Differentiating between a case that has been "judicially resolved" on its merits and one that had been "fully litigated" on its merits, the court of appeals opined in the case at bar that even though several elements of a trial had taken place in municipal court, these elements were not enough to constitute a trial in municipal court for purposes of Wis. Stat. § 800.14(4)

¶ 40. The court of appeals concluded that the municipal court proceeding was not "fully litigated on the merits" in municipal court because both parties did not exercise their respective prerogative to present evidence or rest their case. Once the municipality presented evidence, the defendant did not present evidence or rest his case but moved for dismissal. According to the court of appeals, the municipal court's granting the defendant's dismissal motion "effectively truncated his opportunity to present a defense — an opportunity required for the merits of a case to be considered fully litigated."

¶ 41. We disagree with the court of appeals that the defendant did not have the opportunity to present a defense in the municipal court or that his opportunity to present a defense was truncated.

¶ 42. The court of appeals apparently overlooked the defendant's three options in municipal court: (1) move to dismiss the action at the end of the plaintiffs case; (2) rest his case without presenting any testimony or evidence, arguing the merits of the case based on the evidence the plaintiff presented; or (3) present witnesses and evidence. Under any of the three options, the defendant had the opportunity to introduce his evidence, although he was not required to do so.

¶ 43. The defendant chose to move to dismiss at the end of the City's case. The defendant alone made the decision not to introduce evidence, presumably because he concluded that he might succeed on the merits on the basis of the City's evidence. But for the defendant's own successful motion to dismiss, the defendant would have been allowed to present his evidence. Similarly, if the municipal court had denied the defendant's motion to dismiss, the defendant would have had the opportunity to present his evidence in full. The defendant did not default in the present case.

¶ 44. To allow a defendant to move to dismiss at the close of the City's evidence, and yet to refuse to classify the municipal court proceeding as a trial, leads to a peculiar distinction between a motion to dismiss made before a defendant puts in his evidence and a motion to dismiss made after a defendant presents his evidence. Judge Brown explained this problem in his dissent in the court of appeals as follows: "[A] motion made at the close of the plaintiffs case does not allow for a trial de novo in the circuit court but a motion made at the close of all the evidence, based on the same legal grounds . . . does allow for a trial de novo." We agree with Judge Brown on this point.

¶ 45. Section 800.14(4) also gives the circuit court the right to grant a new trial on its own motion. It is hard to believe that the legislature would allow a defendant to extinguish both an opposing party's ability to obtain a new trial and a circuit court's power to order a new trial merely by tendering his or her motion to dismiss at the end of a plaintiffs case instead of later in the proceeding.

¶ 46. It is apparent that the court of appeals' use of the words "fully litigated" and "full trial" has led and may lead to confusion. Accordingly we withdraw the language in Meyer requiring that a case be "fully litigated," or that there be a "full trial" in municipal court in order for a municipal proceeding to constitute a trial.

¶ 47. For the reasons set forth, we do not agree with the court of appeals that the word "trial" in Wis. Stat. § 800.14(4) required both parties in the present case to exercise their prerogative to present evidence or rest their case.

E

¶ 48. The court of appeals in Meyer and in the instant case rely on the legislative history of Wis. Stat. § 800.14(4) to support its interpretation of Wis. Stat. § 800.14(4) that if a municipal court grants a defendant's motion to dismiss at the end of the municipality's case in chief, no trial occurred in the municipal court. We conclude that the legislative history does not support this interpretation proffered by the court of appeals.

¶ 49. The court of appeals concluded in Meyer that Wis. Stat. § 800.14(4) is capable of more than one reasonable interpretation and is ambiguous. Thus the court of appeals examined the legislative history of § 800.14(4) in Meyer to determine the legislative objective in order to interpret and apply the statute in accordance with its objective.

¶ 50. In 1987, the legislature revamped Chapter 800. Before the 1987 amendments, parties in municipal court had several ways to reach the circuit court. Either party could seek an appeal on the municipal court record or could seek a new trial in circuit court without a jury. These routes to the circuit court from municipal court are still available.

¶ 51. Alternatively, a defendant could plead not guilty in municipal court and request a jury trial in circuit court. The 1987 revision severely restricted a defendant's ability to bypass municipal court and go directly to circuit court. After the 1987 revision, only defendants charged with violating Wis. Stat. § 346.63, which governs driving while under the influence of intoxicants, could plead not guilty in municipal court and go directly to circuit court for a jury trial. The legislature limited the burden on the circuit courts to conduct jury trials at the request of a defendant.

¶ 52. Most notably a new third alternative for reaching the circuit court was provided in the 1987 revision: On appeal from any municipal court proceeding, an appellant could request a new trial in circuit court before a jury. The 1987 revision gave both municipalities and defendants, as the appellant, the right to seek a new trial by jury in the circuit court.

¶ 53. The objective of the 1987 revision is revealed in the drafting record of the 1987 bill to amend chapter 800. The drafting request stated that the problem to be ameliorated was the excessive requests for jury trials in cases involving forfeitures and ordinance violations. Because at the time of the proposed revision a defendant had the right to a jury trial in circuit court only if no municipal court trial was held, the legislature's objective in the revision was to limit a defendant's ability to get a jury trial in circuit court without a trial in municipal court.

¶ 54. The solution proposed by the drafting request was "to require that all alleged violators go to municipal court first, exhaust their options there, and if they lose, they may exercise the right to 1. a new trial, 2. a jury trial, or 3. to request review by a judge."

¶ 55. Other documents included in the drafting record further reveal the objective of the revamped Wis. Stat. § 800.14(4). A handwritten note reads, "Make sure it's not possible to default in [municipal court and] then file for a jury trial." The note continued, "Must try issues in [municipal court]" (emphasis added). The Drafting Request further states: "Aim at practice of person bypassing [the municipal court] by always requesting JT [jury trial in circuit court]."

¶ 56. Additionally, the fiscal estimate prepared by the Director of State Courts opines that "[this] bill also eliminates the right to request a jury trial when the action is commenced in municipal court [by pleading not guilty]. The trial must be conducted in municipal court after which an appeal may be taken to circuit court and a jury trial requested" (emphasis added).

¶ 57. These documents together express a legislative concern that allowing defendants to get a jury trial in circuit court without a prior trial in municipal court unnecessarily increases the number of circuit court jury trials.

¶ 58. The court of appeals acknowledged this concern and declared in Village of Oregon v. Waldofsky, 177 Wis. 2d 412, 419, 501 N.W.2d 912 (Ct. App. 1993), that the objective of the 1987 revision was to "encourage municipal ordinance defendants to have their cases heard in municipal court and thus cut down on what were believed to be 'excessive requests' for circuit court jury trials in civil forfeiture and ordinance violation cases."

¶ 59. Although the 1987 revision limited a defendant's ability to get a jury trial without a prior trial in municipal court, it granted both a defendant and a municipality the ability to get a new jury trial in circuit court after a trial in municipal court. Therefore, in interpreting Wis. Stat. § 800.14(4), the court of appeals transformed the stated legislative objective to limit a defendant's right to jury trials in circuit court to a legislative objective to limit all new trials in circuit court at the request of either municipalities or defendants. This transformation of the legislative objective in the legislative history to limit both municipalities and defendants rests on the language of § 800.14(4). On its face § 800.14(4) treats municipalities and defendants the same for purposes of requiring a trial in the municipal court before either party may get a new trial in circuit court.

¶ 60. Thus in Meyer, the court of appeals concluded that the legislature sought to reduce the number of new trial requests to the circuit court from municipal ordinance violations, and in the instant case the court of appeals concluded "that without a trial on the merits in the municipal court, a party could not request a new trial in the circuit court."

¶ 61. Although the legislative history demonstrates that the legislature was concerned that a defendant not default in municipal court before seeking a new trial in circuit court, we do not find legislative history supporting the court of appeals' conclusion that allowing a new trial in circuit court when a municipality fails to meet its burden of proof in municipal court defeats the legislative objective of limiting new trials in circuit court. There is no evidence in the legislative history that a circuit court is to review the record of the municipal court trial to determine whether either the municipality or defendant acted in good faith in presenting their respective cases in municipal court. Nor do we find any legislative history supporting the court of appeals' conclusion that it is unfair to force defen-Hants to undergo a new trial when they have received a judicial determination in municipal court and believed their case to be completed. Nothing in § 800.14(4) or the legislative history supports the court of appeals' conclusion that it is an absurd result if municipalities are permitted "to correct errors fatal to their municipal court case by requesting a new trial before the circuit court."

¶ 62. We do not agree with the court of appeals that the legislative history supports the conclusion that if a court grants a defendant's motion to dismiss at the end of the municipality's case in chief, no trial occurred in the municipal court. We therefore do not adopt the court of appeals' interpretation and application of Wis. Stat. § 800.14(4) to the facts of the instant case.

* * * *

¶ 63. We conclude that the municipal court proceeding in the present case constituted a trial under Wis. Stat. § 800.14(4) because the City presented its case, the defendant had an opportunity to present his evidence (even though he chose not to do so), and the matter was judicially resolved on its merits. We therefore conclude that the municipal court proceeding in the instant case triggered the City's statutory right to a new trial under Wis. Stat. § 800.14(4). Accordingly, we reverse the decision of the court of appeals and the order of the circuit court, and remand the cause to the circuit court to grant the City's request for a new trial.

By the Court. — The decision of the court of appeals is reversed, and the case is remanded to the circuit court for a new trial.

        City of Pewaukee v. Carter, 2003 WI App 260, 268 Wis. 2d 507, 673 N.W.2d 380.

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

       Wisconsin Stat. § 800.14(4) reads: "Upon the request of either party within 20 days after notice of appeal under sub.(l), or on its own motion, the circuit court shall order that a new trial be held in circuit court. The new trial shall be conducted by the court without a jury unless the appellant requests a jury trial in the notice of appeal under sub.(l). The required fee for a jury is prescribed in s. 814.61(4)."

        Village of Menomonee Falls v. Meyer, 229 Wis. 2d 811, 601 N.W.2d 666 (Ct. App. 1999).

       The case was moved to the Town of Brookfield on the defendant's request for substitution of a judge.

        Garcia v. Mazda Motor of Am., Inc., 2004 WI 93, ¶ 7, 273 Wis. 2d 612, 682 N.W.2d 365.

       Section 800.14(1) allows an appeal from municipal courts to "be taken by either party to the circuit court of the county where the offense occurred. The appellant shall appeal by giving the municipal judge written notice of the appeal within 20 days after the judgment."

       Wis. Stat. § 800.14(5).

        City of Middleton v. Hennen, 206 Wis. 2d 347, 355, 557 N.W.2d 818 (Ct. App. 1996).

       Meyer, 229 Wis. 2d at 817.

       Black's Law Dictionary 1510 (7th ed. 1999).

       1856 Wis. Laws ch. 120 § 164. See also 1917 Wis. Laws § 2842 (same); Wis. Stat. § 270.06 (1967) (same).

        See Cal. Civ. Pro. Code § 581(6) (West 2004) ("Atrial shall be deemed to actually commence at the beginning of the opening statement or argument of any party or his or her counsel, or if there is no opening statement, then at the time of the administering of the oath or affirmation to the first witness, or the introduction of any evidence."). See also Gray v. Superior Court, 52 Cal. App. 4th 165, 171 (1997) (the statutory language is illustrative rather than exclusive of the circumstances under which a trial has begun).

        See Serfass v. U.S., 420 U.S. 377, 388 (1975); State v. Seefeldt, 2002 WI App 149, ¶ 12, 256 Wis. 2d 410, 647 N.W.2d 894.

        Pure Milk Prods. Coop. v. Nat'l Farmers Org., 64 Wis. 2d 241, 247-48, 219 N.W.2d 564 (1974) (citations omitted).

       "A trial is a judicial examination of the issues, whether of law or of fact, in an action or proceeding." Ohio Rev. Code Ann. § 2311.01 (West 2003-04).

        First Bank of Marietta v. Mascrete, Inc., 684 N.E.2d 38, 41 (Ohio 1997).

        Id.

        Jacobellis v. Ohio, 378 U.S. 184, 187 (1964) (Stewart, J., concurring).

        City of Pewaukee, 268 Wis. 2d 507, ¶ 25 (Brown, J., dissenting).

        Meyer, 229 Wis. 2d at 813.

         Id.

        Id.

        Id.

        Id.

        Id. at 813-14.

        Id. at 818.

       As the court of appeals explained, the municipal court held that the City failed to meet its burden of proof and whether a party meets its burden of proof is a question of law. Hallin v. Hallin, 228 Wis. 2d 250, 258, 596 N.W.2d 818 (Ct. App. 1999).

        Meyer, 229 Wis. 2d at 817 (emphasis added).

        City of Pewaukee, 268 Wis. 2d 507, ¶ 15 (quoting Meyer, 229 Wis. 2d at 816) (emphasis added in City of Pewaukee).

        City of Pewaukee, 268 Wis. 2d 507, ¶ 14.

        Id., ¶ 16.

        Id., 268 Wis. 2d 507, ¶ 18.

       Wis. Stat. § 800.08(1) ("The municipality shall first offer evidence .... The defendant may offer evidence ..." (emphasis added)).

        City of Pewaukee, 268 Wis. 2d 507, ¶ 27 (Brown, J., dissenting).

       The City asserts that the municipal court's granting the defendant's motion to dismiss was an adjudication on the merits under Wis. Stat. § 805.17(1). Section 805.17(1) provides, inter alia, that a dismissal on a defendant's motion to dismiss after a plaintiff has completed the presentation of evidence operates as an adjudication upon the merits.
      While a forfeiture action in municipal court is a civil action, it does not necessarily follow that the rules of civil practice and procedure in chapters 801-847 of the statutes apply to municipal court proceedings.

        The basis for the City's assertion that the rules of civil practice and procedure apply to municipal court proceedings, is Village of Bayside v. Bruner, 33 Wis. 2d 533, 535, 148 N.W.2d 5 (1967). However, the origin of this proposition is much older. See, e.g., City of Appleton v. Sauer, 271 Wis. 614, 616-17, 74 N.W.2d 167 (1956); South Milwaukee v. Schantzen, 258 Wis. 41, 43, 44 N.W.2d 628 (1950); Milwaukee v. Burns, 225 Wis. 296, 299, 274 N.W. 273 (1937); De Vries v. Dye, 222 Wis. 501, 503, 269 N.W. 270 (1936); Seely v. Milwaukee, 212 Wis. 124, 130, 248 N.W. 912 (1933); Neenah v. Krueger, 206 Wis. 473, 475-76, 240 N.W.2d 402 (1932) (cited in the annotation to Wis. Stat. § 260.05 (1935) for applying civil practice rules to municipal court cases).
      All these cases predate the 1976 revision of the Wisconsin rules of civil practice and procedure. Section 801.01(2) of the revised rules explicitly applies chapters 801-847 (the rules of civil practice and procedure) to civil actions in circuit court. No mention is made of the applicability of chapters 801-847 to municipal court proceedings.
      The Wisconsin Municipal Judge Benchbook includes a copy of chapter 800 of the statutes, but not chapter 805. Chapter 6 of the Benchbook, entitled "Conducting a Trial," makes no reference to chapter 805, Wis. Stat. Chapter 6 does state, however, that at the conclusion of the municipality's case the municipal court may dismiss the case either on its own motion or on motion of a defendant.
      We need not and do not decide the applicability of chapter 805 to municipal court proceedings.

       1987 Act 389.

        See Wis. Stat. § 800.04(d); Wis. Stat. §800.14(4) (1985-86).

       Wis. Stat. § 800.14 (1985-86); Wis. Stat. § 800.14.

       Wis. Stat. §800.14(4) (1985-86) ("Upon the request of either party within 20 days after the notice of appeal under sub. (1), or on its own motion, the circuit court shall order that a trial de novo without a jury be held in circuit court."). See also Wis. Stat. § 800.14.

       Wis. Stat. § 800.14.

       Wis. Stat. § 800.04(l)(d) (1985-86) ("If the defendant pleads not guilty and within 10 days after entry of the plea requests a jury trial.. . the municipal judge shall promptly transmit all the papers and fees in the cause to the clerk of the circuit court.. ..").

       Wis. Stat. § 800.04(l)(d).

       1987 . Act 389, §30. See also Wis. Stat. §800.14(4) (1987-88). The circuit court may grant a new trial on its own motion.

        Meyer, 229 Wis. 2d at 815. See also Village of Oregon v. Waldofsky, 177 Wis. 2d 412, 419, 501 N.W.2d 912 (Ct. App. 1993).

       Bill Draft Request Form completed by Cheryl Wittke on behalf of Senator Lynn Adelman on December 4, 1986.

       These documents are found in the drafting record for 1987 Act 389, available at the Wisconsin Legislative Reference Bureau, Madison, Wisconsin.

       The Legislative Reference Bureau's prefatory notes ("Analysis") to the 1987 bill describe the current law and the proposed changes but add no additional insight to what has already been discussed.

        Village of Oregon v. Waldofsky, 177 Wis. 2d 412, 419, 501 N.W.2d 912 (Ct. App. 1993).

        Meyer, 229 Wis. 2d at 816.

        City of Pewaukee, 268 Wis. 2d 507, ¶ 13 (citing Meyer, 229 Wis. 2d at 815).

        Meyer, 229 Wis. 2d at 816.

         Id.

      The defendant presents a similar public policy argument favoring the decision of the court of appeals. The defendant argues that if a municipality's failure to meet its burden of proof in the municipal court prohibits a municipality from seeking a new trial, the public policy of requiring diligent preparation by the municipality is promoted. If the City is not obliged to meet its burden of proof in the municipal court before the municipality proceeds to circuit court, even the most unmeritorious cases will not be filtered out by the municipal court, asserts the defendant.
      The City answers this public policy argument by asserting that it was prepared even though it failed to present the testimony of the officer who ordered the blood draw and that the public policy asserted by the defendant does not come into play in the present case or in most cases because a municipality cannot afford to waste its resources in this manner.


author: PER CURIAM

text:
    Kenosha Hospital & Medical Center, Plaintiff-Respondent, v. Jesus E. Garcia, Defendant, Richter Industries, Inc., Garnishee-Defendant-Appellant-Petitioner.
    Supreme Court

      No. 02-1727.

      Decided November 4, 2004.

    2004 WI 137
    (Also reported in 688 N.W.2d 462.)
   PER CURIAM

¶ 1. {on motion for clarification). Richter Industries, Inc. petitions this court for clarification of our decision in Kenosha Hospital & Medical Center v. Garcia, 2004 WI 105, 274 Wis. 2d 338, 683 N.W.2d 425, regarding directions upon remand. Specifically, Richter asks this court to clarify the directions upon remand as to whether Kenosha Hospital should be allowed to conduct further discovery to support its claim that the notice of motion for judgment against Richter was properly served. The court answers the question in the affirmative.

¶ 2. The motion for clarification is granted, without costs.

¶ 3.

LOUIS B. BUTLER, JR., J., did not participate.