author: CANE, C.J.

text:
    Scott A. Balz and Connie L. Balz, Plaintiffs-Respondents-Cross-Appellants, v. Heritage Mutual Insurance Company (n/k/a Acuity, a Mutual Insurance Company), Defendant-Appellant-Cross-Respondent, Wausau Area Hmong Mutual Association, Defendant-Respondent-Cross-Respondent, Continental Insurance Company and Estate of Tou Xiong Lor, Defendants, MSI Insurance Company, Defendant-Respondent, Greenheck WI Partnership Administered by Wausau Benefits, Inc., Defendant-Subrogee, Darlene Balz and Jordan Balz, Third-Party Defendants.
    Court of Appeals

      No. 2004AP1626.

      Submitted on briefs March 23, 2006.

      —Decided June 6, 2006.

    2006 WI App 131
    (Also reported in 720 N.W.2d 704.)

      On behalf of the defendant-appellant-cross-respondent, the cause was submitted on the brief of Terrance E. Davczyk of Davczyk & Varline, LLC of Wausau, and John R. Shull, Jr. of Terwilliger Law Firm of Wausau, and reply brief of Terrance E. Davczyk of Davczyk & Varline, LLC.

    On behalf of the plaintiffs-respondents-cross-appellants, the cause was submitted on the briefs of Matthew E. Yde of Strasser & Yde, S.C. of Wausau.
    On behalf of the defendant-respondent, the cause was submitted on the brief of James A. Higgins of Goyke, Tillisch & Higgins, LLP of Wausau.
    On behalf of the defendant-respondent-cross-respondent, the cause was submitted on the brief of John R. Schull, Jr. of Terwilliger Law Firm of Wausau.
    Before Cane, C.J., Hoover, PJ., and Peterson, J.
   CANE, C.J.

¶ 1. Heritage Mutual Insurance Company appeals a circuit court judgment, arguing the court erred when it: (1) failed to use the language of an insurance policy in a special verdict, preventing the jury from properly deciding insurance coverage; (2) excluded evidence of practice, routine or habit; and (3) denied a request for a new trial due to the cumulative effect of the alleged errors. Heritage also argues the jury's award for future loss of earning capacity was excessive. We affirm the judgment and hold respectively: (1) the language used in the special verdict was appropriate; (2) the court properly excluded improper character evidence; and (3) no errors were present that required a curative instruction or a new trial. We further hold that the jury’s award was supported by credible evidence and was not excessive.

¶ 2. Scott and Connie Balz cross-appeal a circuit court judgment arguing the court erred when it: (1) refused to award Scott Balz interest and costs based upon his statutory offer of settlement; and (2) erroneously exercised its discretion by reducing the jury award for future medical expenses. We affirm the judgment and hold respectively: (1) the court properly refused to award interest and costs because Scott's judgment was not more favorable than the offer of settlement; and (2) credible evidence supported the court's reduction in the jury award for future medical expenses.

I. Appeal

Background

¶ 3. On September 20, 2000, Xia Tou Lo a/k/a Tou Xiong Lor, collided his vehicle with a vehicle driven by Scott Balz after Lo failed to stop for a stop sign. Lo was killed in the accident, and Balz was seriously injured. Balz and his wife Connie filed suit against several parties including Lo, the Wausau Area Hmong Mutual Association (the Association), Heritage Mutual Insur-anee Corporation (the Association's liability carrier), Continental Insurance Company (Lo's liability carrier), and MSI Insurance Company (the Baizes' underinsured motorist carrier).

¶ 4. The Baizes alleged "that at the time of the accident, Lo was in the course and scope of his employment for the Wausau Area Hmong Mutual Association." Heritage denied any liability and moved for bifurcation of the coverage issue from the liability and damages issue, arguing that there was evidence Lo was conducting personal business at the time of the accident. Thus, Heritage asserted under the language of the policy it did not cover the claims of the Baizes.

¶ 5. At trial, the Baizes' proposed jury instructions included Wis JI — Civil 4035 — Servant: Scope of Employment (1997) and Wis JI — Civil 4045 Servant: Scope of Employment While Traveling (1994). The parties also proposed several special verdict questions. The trial court ultimately ruled that the Heritage policy language was equivalent to course and scope of employment and gave Wis JI — Civil 4035 and 4045 and provided a special verdict question with course and scope of employment language. The jury's verdict found that Lo was in the scope of his employment, and the court found that there was coverage under the Heritage policy. MSI was dismissed from the case.

¶ 6. Heritage filed a motion after verdict and a motion for a new trial, and the trial court denied both. After our decision in Aasen-Robles v. Lac Courtes Orielles Band of Superior Chippewa Indians, 2003 WI App 224, 267 Wis. 2d 333, 671 N.W.2d 709, Heritage renewed its motions for a new trial based on the Aasen-Robles holding, which the court again denied. A jury trial was held to determine liability and damages, and the jury returned a verdict in favor of the Baizes.

A. Language Used in the Special Verdict

¶ 7. Heritage argues that the trial court's failure to use language present in the insurance policy in the special verdict prevented "the jury from properly deciding the facts for the court to determine the insurance coverage." The special verdict stated:

Was Xia Tou Lo, at the time of the accident causing his death, using his automobile while in the course and scope of his employment with the Wausau Area Hmong Association?

The court provided jury instructions based on Wis JI— Civil 4035 — Servant: Scope of Employment and 4045— Servant: Scope of Employment While Traveling. The insurance policy language stated that Heritage must provide coverage for an employee's use of a non-owned automobile "while used in your business or your personal affairs." Because the special verdict used scope of employment language, Heritage insists "the jury was not asked to determine whether the employee was using the vehicle at the time of the accident in the business of his employer, but the much broader question of whether the driver was in the scope of employment."

¶ 8. "A trial court has wide discretion in framing the special verdict." Runjo v. St. Paul Fire & Marine Ins. Co., 197 Wis. 2d 594, 602, 541 N.W.2d 173 (Ct. App. 1995). The special verdict presented must fully and fairly inform the jury regarding the applicable principles of law. Id. We will not interfere with the form of a special verdict unless the question, taken with the applicable instruction, does not fairly present the material issues of fact to the jury for determination. In re AM., 163 Wis. 2d 270, 276, 471 N.W.2d 519 (Ct. App. 1991).

¶ 9. The court's special verdict language was proper. Generally, language present in an insurance policy must be interpreted to mean what a reasonable person in the position of the insured would understand that language to mean. General Cas. Co. v. Hills, 209 Wis. 2d 167, 175, 561 N.W.2d 718 (1977). Any ambiguity in a policy should be interpreted in favor of coverage and against the insurer because the insurance company that provided the policy chose the ambiguous provisions. Kopp v. Home Mut. Ins. Co., 6 Wis. 2d 53, 57, 94 N.W.2d 224 (1959).

¶ 10. Here, the insurance policy itself fails to fully define the term, "while used in your business or your personal affairs." Specifically, the policy does not address the meaning of "personal affairs." It is at least arguable that personal affairs could include virtually any action taken by an employee, even those actions not taken in the scope of business. Considering this ambiguity in the policy's language, it was not improper for the court to provide a special verdict regarding course and scope of employment and a jury instruction that further assisted the jury.

¶ 11. Heritage argues that the trial court incorrectly broadened the policy's coverage when the special verdict used scope of employment, a term often associated with worker's compensation law. Heritage relies on Aasen-Robles, where we were asked to determine whether the trial court erred when it used worker's compensation case law precedent to decide whether an employer's liability policy covered an employee. Aasen-Robles, 267 Wis. 2d 333, ¶ 22. We held that it was improper for a court to rely on worker's compensation law when construing provisions under a general liability policy, stating:

[W]orker's compensation laws are remedial in nature and are consequently "liberally construed in favor of including all services that can in any sense be said to reasonably come within it." Because of this liberal construction, to use worker's compensation cases as precedent for construing the exclusion in the general liability policy is at odds with insurance law principle that we are to interpret the language of an insurance policy according to what a reasonable person in the position of an insured would have understood the words to mean.

Id. (citation omitted).

¶ 12. Heritage has not demonstrated that the scope of employment language in the special verdict was prejudicial. Here, unlike Aasen-Robles, the special verdict and jury instructions were based on master/servant liability, not worker's compensation law. Because there was no accompanying jury instruction that defined scope of employment in a worker's compensation context, the policy language and special verdict language are functionally equivalent. Therefore, the special verdict was not improper.

B. Exclusion of Habit Evidence

¶ 13. Heritage contends the court erroneously excluded testimonial evidence that Lo previously engaged in the practice, habit or custom of creating records to falsely reflect that he was conducting business of his employer when he actually was conducting personal business. The court excluded the evidence pursuant to Wis. Stat. § 904.02, stating that the testimony did not relate to Lo's habit, but to his character. Thus, the court concluded, the evidence was not relevant. Heritage argues the evidence is probative as to whether Lo was engaged in the business of the Association at the time of his death, and the court should have allowed Heritage to present the evidence.

¶ 14. Our standard of review on the admission and exclusion of evidence is limited to whether the trial court erroneously exercised its discretion. State v. Alsteen, 108 Wis. 2d 723, 727, 324 N.W.2d 426 (1982). If a trial court applies the proper law to the established facts, we will not find an erroneous exercise of discretion if there is any reasonable basis for the trial court's ruling. Id.; Steinbach v. Gustafson, 177 Wis. 2d 178, 185-86, 502 N.W.2d 156 (Ct. App. 1993).

¶ 15. The trial court properly excluded the evidence because the specific instances of conduct Heritage proposed presenting as evidence did not constitute admissible habit evidence, but instead went to Lo's character. Evidence of a person's habit is relevant because it is more probable that a person acted consistently with that habit. French v. Sorano, 74 Wis. 2d 460, 466, 247 N.W.2d 182 (1976). Wisconsin Stat. § 904.06(2) provides: "Habit or routine practice may be proved by testimony in the form of an opinion or by specific instances of conduct sufficient in number to warrant a finding that the habit existed or that the practice was routine." Habit is a regular repeated response to a repeated, specific situation. Hart v. State, 75 Wis. 2d 371, 392 n.9, 249 N.W.2d 810 (1977). The frequency and consistency that behavior must be present to become habit is not subject to a specific formula, and its admissibility depends on the trial court's evaluation of the particular facts of the case. Steinberg v. Arcilla, 194 Wis. 2d 759, 768, 535 N.W.2d 444 (Ct. App. 1995).

¶ 16. Habit evidence is distinguishable from character evidence, which is generally not admissible. A party may be identified as having a habit for care, a habit of lying, or a habit of stealing. Evidence of such "habits" is more appropriately identified as character traits. Character is a generalized description of a party's nature, or of the disposition in respect to a general trait, such as honesty, temperance or peacefulness. 1 McCormick on Evidence § 195 at 825 (John W Strong 4th ed. 1992) (footnotes omitted).

¶ 17. Here, the evidence at issue did not rise to the status of habit. First, the evidence was not opinion, but alleged instances of conduct. However, the instances of conduct did not form any predictable pattern. Instead, at best, it demonstrated that Lo committed various, random falsification of his records to show that he was engaged in business matters. It is not discernable what frequency and regularity Lo engaged in this behavior. Thus, there were no "specific instances of conduct sufficient in number to warrant a finding that the habit existed or that the practice was routine." See Wis. Stat. § 904.02.

¶ 18. Further, and more to the point, even if this evidence was admissible, it would not show that Lo actually was engaging in personal business on the day of the accident. The record does not indicate that any testimony provided would address Lo's records for the day of the accident. Therefore, the evidence would essentially reveal Lo's alleged propensity for dishonesty. Because admitting this testimonial evidence effectively would have singularly addressed Lo's character and not any predictable habit, the trial court reasonably exercised its discretion when it excluded the evidence.

C. Errors at Trial

¶ 19. Heritage asserts that the cumulative effects of errors during the trial merited a curative instruction or a new trial. The trial court previously denied Heritage's motion for a new trial. We analyze whether there has been a clear showing that the trial court erroneously exercised its discretion when it denied the motion for a new trial. See State v. Bunch, 191 Wis. 2d 501, 506-07, 529 N.W.2d 923 (Ct. App. 1995).

¶ 20. Heritage argues that the Baizes' counsel tainted the jury when he commented, through questions to witness Barbie Muetzel, about the coverage issue the jury would later decide. Heritage asserts a motion in limine proscribed these comments. Further, Heritage asserts that the Baizes' counsel intimated to the jury that Heritage was attempting to improperly avoid coverage. Heritage also argues that the Baizes improperly called Muetzel.

¶ 21. We agree with the trial court that Heritage's counsel opened the door for such questioning in his cross-examination of Scott and other witnesses. For example, Scott was the first witness to testify in this case, and the following exchange occurred between him and Heritage's counsel:

Q: And you understand it's likely to your benefit to make it look like it's likely that this gentleman who was killed was going to see True Lor, right? I mean you recognize that?
A: Right.
Q: So when you answered these questions, you were answering these questions about time and routes of choice with the understanding how that benefits you and also with the background of somebody who's lived in this area all of their life?
A: Right.

Heritage went on to elicit testimony from other witnesses that further opened the door for the Baizes' counsel's questioning. Moreover, considering the opening statements, attorney questioning and final arguments, the jury was already well aware that they would be deciding an issue of coverage and the repercussions of their decision. Considering the preceding, the questioning and testimony of Muetzel, who was properly called to rebut the testimony of another witness, was also appropriate.

D. Jury's Award for Future Loss of Earning Capacity

¶ 22. Heritage contends the jury's award of $264,000 to Scott for future loss of earning capacity was excessive and unsupported by credible evidence. The supreme court articulated the following standard in Bergmann v. Ins. Co. of N. Am., 49 Wis. 2d 85, 87-88, 181 N.W.2d 348 (1970), for assessing a jury verdict:

If there is any credible evidence which under any reasonable view fairly admits of inferences which support the jury's verdict, the verdict must be sustained, and neither the trial court nor this court may tamper with it.... The evidence must be considered in the light most favorable to the jury verdict.... Furthermore, the trial judge and this court are only to consider the evidence which supports the jury's verdict.... The evidence supporting the verdict must be accepted by the court unless it appears that the evidence is patently incredible.

Moreover, "[i]f there is credible evidence to support the jury verdict, it does not matter that it is contradicted or that the contradictory evidence is stronger and more convincing." Upton v. Tatro, 68 Wis. 2d 562, 570 229 N.W.2d 691 (1975). Future loss of earning capacity is calculated by identifying the difference, due to the injury, between earning capacity before an injury and after an injury. See Dietz v. Goodman, 256 Wis. 370, 374, 41 N.W.2d 208 (1950).

¶ 23. Here, credible evidence exists to support the jury's verdict. A vocational rehabilitation expert testified that he analyzed Balz's pre-injury net and gross earnings and the average earnings of other occupations Balz was capable of performing prior to the injury. He then compared these figures to occupations that Balz could perform post-injury, given his education and skill level. Therefore, the expert's calculation represents credible evidence upon which the jury could have based its verdict.

¶ 24. Heritage implies that the vocational expert improperly calculated Balz's earning capacity because he failed to base this calculation on Balz's net income from the five previous years. However, earning capacity is not solely a snapshot of the wages earned at a particular point in a person's working life. Earning capacity involves "comparing what the injured party was capable of earning before and after the time of the injury." Klink v. Cappelli, 179 Wis. 2d 624, 630, 508 N.W.2d 435 (1993). Thus, we reject Heritage's implied argument that simply averaging prior net income provides the appropriate means to calculate earning capacity.

II. Cross-Appeal

Background

¶ 25. Following the trial on liability and damages, the jury apportioned causal negligence of 96% to Lo and 4% to Balz. The jury awarded $1,007,475 in damages to Balz and $100,000 in damages to his wife Connie. The amount awarded to Balz included $250,000 for future medical expenses. Following the motions after verdict, the total verdict for Balz was $793,475, and the net verdict including the 4% contributory negligence was $761,736. This amount was based on a reduction of the future medical expenses award from $250,000 to $36,000. The final verdict for Connie was $96,000.

¶ 26. Prior to the jury verdict, Balz served a statutory offer of settlement on Heritage and the Association, which stated the following:

Pursuant to Whs. Stat. § 807.01(3), plaintiff, Scott A. Balz, offers to settle all of his claims against Heritage Mutual Insurance Company and Wausau Area Hmong Mutual Association for $750,000, with costs. If Heritage Mutual Insurance Company and Wausau Area Hmong Association accept this offer of Settlement, plaintiff, Scott A. Balz, agrees to indemnify and hold Heritage Mutual Insurance Company and Wausau Area Hmong Association harmless for any subrogation claims arising out of the payment of medical and hospital bills on behalf of plaintiff, Scott A. Balz.

¶ 27. The Association's policy, provided by Heritage, contained bodily injury limits of $250,000 per person and $500,000 per accident. Heritage further issued an umbrella policy providing an aggregate liability limit of an additional $1,000,000. The policy states:

We will pay all sums and insured legally must pay as damages because of bodily injury or property damage to which this insurance applies, caused by an accident and resulting from the ownership, maintenance or use of a covered auto.
In addition to the limit of insurance, we will pay for the insured:
(5) all costs taxed against the insured in any suit against the insured we defend.

¶ 28. Lo had a liability policy through Continental with limits of $50,000 per person and $100,000 per accident. Lo was ultimately dismissed as a defendant without any objection because no estate had been created following his death. Balz subsequently filed a bill of costs requesting interest and double costs from Heritage and the Association based on the previous statutory offer of settlement for $750,000. Connie also filed a bill of costs against Continental for statutory-attorney fees plus 12% post-verdict interest on her $96,000 verdict.

A. Interest and Costs

¶ 29. Balz contends the trial court erred by refusing to award him interest and costs based upon his statutory settlement offer. This presents us with a question of law that we review independently. In re Omernik, 112 Wis. 2d 285, 290, 332 N.W.2d 307 (1983).

¶ 30. Wisconsin Stat. § 807.01 permits a plaintiff to serve a written offer of settlement with costs on a defendant. If the offer is not accepted and the plaintiff recovers a more favorable judgment, the plaintiff shall recover double the taxable costs. Wis. Stat. § 807.01(3). Further, the plaintiff is entitled to 12% annual interest on the recovered amount from the date of the offer of settlement until the judgment is paid. Wis. Stat. §807.01(4).

¶ 31. Providing double costs and interest on rejected settlement offers when a party recovers a more favorable judgment exists to encourage settlement and secure just, speedy and inexpensive determinations of disputes. Prosser v. Leuck, 225 Wis. 2d 126, 140, 592 N.W.2d 178 (1999). The imposition of costs and interest for rejection of statutory settlement offers are punitive. Blank v. USAA Prop. & Cas. Ins. Co., 200 Wis. 2d 270, 279, 546 N.W.2d 512 (Ct. App. 1996).

¶ 32. The Baizes contend the trial court improperly apportioned $50,000 of Lo's Continental policy to Scott and Connie, thus reducing Scott's total judgment against the Association and Heritage below $750,000. Reduction below $750,000 would not satisfy Scott's offer of settlement, and he would not be entitled to costs.

¶ 33. It is argued that the settlement offer itself was ambiguous, and therefore, unenforceable. A party making a settlement offer must communicate it in clear and unambiguous terms, and "[a]ny ambiguity in the offer of settlement is construed against the drafter." See Stan's Lumber, Inc. v. Fleming, 196 Wis. 2d 554, 576, 538 N.W.2d 849 (Ct. App. 1995). The validity of an offer of settlement is based on whether the offer allows the offeree "to fully and fairly evaluate the offer from his or her own independent perspective." Ritt v. Dental Care Assocs., 199 Wis. 2d 48, 75, 543 N.W.2d 852 (Ct. App. 1995).

¶ 34. Here, the statutory offer of settlement was not ambiguous because the terms were clearly presented. The offer was made to the Association based on a theory of respondeat superior liability. The offer was for $750,000, which was within the policy's limits. Further, the offer clearly stated that Balz would indemnify and hold harmless the Association and Heritage for any subrogation claims arising out of the payment of medical and hospital bills.

¶ 35. However, we agree with the trial court that the Baizes do not have the ability to determine how to apportion Continental's policy. Citing both Wondrowitz v. Swenson, 132 Wis. 2d 251, 392 N.W.2d 449 (Ct. App. 1986), and Stahl v. Sentry Ins., 180 Wis. 2d 299, 509 N.W.2d 320 (Ct. App. 1993), the court ruled that the Continental policy must be apportioned pro rata in proportion to each plaintiffs damages. Wisconsin Stat. § 807.03 is clear: "if the offer of settlement is not accepted and the plaintiff recovers a more favorable judgment, the plaintiff shall recover double the amount of taxable costs." A court must look at the amount of the judgment, not at the amount of the jury's verdict. Here, the trial court's May 20, 2004 judgment set Scott Balz's judgment amount at $717,336, which is less than the $750,000 of the offer of settlement. Thus, the court properly refused to award costs and interest.

¶ 36. Despite the Baizes' argument to the contrary, the trial court correctly distributed Continental's $50,000 policy pro-rata. Generally, the proceeds of an inadequate liability limit should be distributed on a pro-rata basis calculated by comparing the amount of damages recovered by Connie to the amount recovered by Scott. Wondrowitz, 132 Wis. 2d at 258-59; see also Stahl, 180 Wis. 2d at 305-06. In Wondrowitz, the defendant had policy limits of $30,000, and three plaintiffs were making a claim for the entire $30,000 limit. Wondrowitz, 132 Wis. 2d at 258. The $30,000 limits were insufficient to satisfy all three plaintiffs' damages. Id. The trial court awarded one of the plaintiffs greater than her pro-rata share of the $30,000. Id. We held the trial court erred, concluding:

Where several claims arising from one accident are joined in one suit against the insurer whose maximum liability under the policy is inadequate to pay in full the amounts to which the claimants become entitled, it has generally been held that the proceeds are to be distributed on a pro rata basis in accordance with the amount of damage suffered by each claimant.

Id. at 258-59. Based on Wondrowitz and Stahl, the plaintiffs are unable to allocate, all of Continental's $50,000 to Connie.

¶ 37. The Baizes argue that Wondrowitz and Stahl are inapplicable because no additional liability coverage was available in those cases. The Baizes fail to fully explain how this fact distinguishes this case such that apportionment of the Continental policy should be delayed until calculation of the amount owed by Heritage. Certainly, this case illustrates that the apportionment of a policy can make a significant difference to the parties, even if other coverage compensates the plaintiffs for their damages. We conclude that the tenor of analogous case law suggests that plaintiffs should not be permitted to unilaterally allocate compensation to their own ends.

¶ 38. The Baizes also argue Continental's policy limits should not have been apportioned to Scott and Connie Balz on a pro-rata basis because not all potential claimants were involved in the apportionment of the policy. They contend by apportioning the $50,000 to the Baizes, the court usurped the rights of Jordon, Gary and Darlene Balz. Jordon and Darlene were also injured in the collision. Gary, Darlene's husband, pursued a claim for loss of consortium. The Baizes claim "the trial court apportioned 50% of the Continental proceeds among only 40% of the claimants, leaving only $50,000 of the policy to satisfy the claims of Jordon, Gary, and Darlene Balz." However, at the apportionment, only Scott and Connie Balz actually had a judgment against Continental, so the pro-rata apportionment to only Scott and Connie was appropriate. It would be improper to require a trial court to predict the outcome of future litigation.

B. Reduction of Future Medical Expenses

¶ 39. The Baizes contend the trial court erred when it reduced the future medical expenses award. An appellate court will only overturn a trial court's remit-titur order "when it finds that the circuit court erroneously exercised its discretion." Carlson & Erickson Bldrs. v. Lampert Yards, 190 Wis. 2d 650, 668, 529 N.W.2d 905 (1995). This court will not reverse the trial court's discretionary determination if the record shows that the discretion was properly exercised and there exists a reasonable basis for the circuit court's determination after resolving direct conflicts in the testimony in favor of the prevailing party, even if this court could have reached a different conclusion. See Olson v. Siordia, 25 Wis. 2d 274, 284-85, 130 N.W.2d 827 (1964).

¶ 40. The jury awarded $250,000 for future medical and hospital expenses, which the trial court reduced to $36,000. The Baizes consented to this reduction by filing a remittitur. Examining the evidence admitted at trial, the trial court did not erroneously exercise its discretion when it reduced the jury's award for future medical and hospital expenses.

¶ 41. No credible evidence was presented that supported the $250,000 jury award. A medical expense award must be supported by competent medical evidence as to the reasonableness and necessity of the expense. See Meracle v. Children's Serv. Soc., 149 Wis. 2d 19, 27, 437 N.W.2d 532 (1989). Expert medical opinion must be to a reasonable degree of probability. See Branter v. Jenson, 121 Wis. 2d 658, 663-64, 360 N.W.2d 529 (1985).

¶ 42. Scott suffered several severe injuries. Although evidence supported that he would experience future pain stemming from the injuries, it did not demonstrate that he would require future surgery or treatment supporting the $250,000 future medical and hospital expenses award. The expert testimony that was presented supported the reduction to $36,000. Thus, the court did not erroneously exercise its discretion when it reduced the jury award.

By the Court. — Judgment affirmed.

       All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise noted. Wisconsin Stat. § 904.02 states: "All relevant evidence is admissible, except as otherwise provided by the constitutions of the United States and the state of Wisconsin by statute, by these rules, or by other rules adopted by the supreme court. Evidence which is not relevant is not admissible."

       Heritage's brief incorrectly indicates the jury awarded $375,000 for future loss of earning capacity, but this amount was actually for past and future pain, suffering and disability.


source: Caselaw Access Project

author: KESSLER, J.

license: Public Domain

text:
    State of Wisconsin, Plaintiff-Respondent, v. Cesar Farias-Mendoza, Defendant-Appellant.
    Court of Appeals

      No. 2005AP365-CR.

      Submitted on briefs March 7, 2006.

      —Decided June 6, 2006.

    2006 WI App 134
    (Also reported in 720 N.W.2d 489.)

      On behalf of the defendant-appellant, the cause was submitted on the briefs of Randall E. Paulson, assistant state public defender, Milwaukee.

      On behalf of the plaintiff-respondent, the cause was submitted on the brief of Sally L. Wellman, assistant attorney general and Peggy A. Lautenschlager, attorney general.
    Before Wedemeyer, EJ., Curley and Kessler, JJ.

       This case was originally assigned to the Hon. Richard Sankovitz, who presided over the suppression hearing and other matters until August 1, 2003, when the case was transferred to the Hon. Jean DiMotto because of judicial rotation. Judge DiMotto conducted the plea hearing and sentencing.

   KESSLER, J.

¶ 1. Cesar Farias-Mendoza appeals from a judgment of conviction for second-degree intentional homicide with the use of a dangerous weapon, entered on his guilty plea. He also appeals from an order denying his postconviction motion for resentencing. Farias-Mendoza argues: • (1) the trial court erroneously denied his suppression motion; and (2) the trial court erroneously exercised its discretion at sentencing. We conclude that the trial court erred in not granting Farias-Mendoza's motion to suppress the statements he made to police on the day he was arrested. We therefore reverse the judgment and order, remanding the cause to allow Farias-Mendoza to withdraw his plea. Because we reverse, we do not consider Farias-Mendoza's sentencing issue.

BACKGROUND

¶ 2. Farias-Mendoza's conviction was based on the stabbing death of his girlfriend, Theresa Kish. Law enforcement became aware of Kish's death when they responded to a telephone call at approximately 2:27 a.m. indicating that there was a "subject down" in the basement of Farias-Mendoza's apartment building. In the basement they found a woman who had been killed who they soon identified as Kish. Officers interviewed people in the apartment building about Kish. Officer Ronald Campos served as an interpreter for Farias-Mendoza, who is a Mexican citizen and speaks primarily Spanish. Ultimately, based on Farias-Mendoza's statement to Campos and Detective Edwin Johnson that Kish was his girlfriend and the detectives' observations of fresh scratches on Farias-Mendoza's hands, the detectives asked Farias-Mendoza to go to the police station to answer additional questions; Farias-Mendoza agreed.

¶ 3. At the suppression hearing, Campos, Johnson and two other detectives testified about what happened once Farias-Mendoza left the apartment building. Campos said he transported Farias-Mendoza to the Police Administration Building (hereafter, "station") in the back of a patrol car. Campos called the police dispatch to report the beginning of the transport at 6:48 a.m.; they arrived at the station within six minutes. Upon arrival at the station, Campos took Farias-Mendoza to the Criminal Investigation Bureau ("CIB"). Campos had no conversation with Farias-Mendoza during the ride downtown or during the move into the CIB, which is on the fourth floor of the station, in a non-public area. Campos put Farias-Mendoza in Room 414, which has a door that locks automatically when the door is closed. Thus, when the door is closed, a person inside has to seek assistance from the outside to exit.

¶ 4. Johnson questioned Farias-Mendoza in Room 414 from about 7:00 to 7:30 a.m., using Campos as a translator. There were no breaks during the questioning. Johnson asked how long Farias-Mendoza had been dating the victim, whether they had any fights, where he was born, where he was from, about the scratches, whether he had been drinking and when he last saw the victim. Johnson testified that he might have asked Farias-Mendoza whether he killed the victim. Johnson ended the interview after thirty minutes and left the room because he was hoping a Spanish-speaking detective could talk with Farias-Mendoza.

¶ 5. Both Johnson and Campos left the defendant alone in Room 414. Johnson testified that when he left Room 414, he did not tell Farias-Mendoza that he could leave, and Farias-Mendoza did not ask to do so. However, Johnson testified that if Farias-Mendoza had asked to leave, Johnson would not have allowed it because he thought Farias-Mendoza might be Kish's killer. Johnson further testified that he did not see Farias-Mendoza after leaving the room, and that he had no idea what was going on with Farias-Mendoza for the next five hours, although Johnson said he knew "later on that somebody was going to talk with him."

¶ 6. It is undisputed that the two officers left the interview room at approximately 7:30 a.m., leaving Farias-Mendoza locked inside. It appears that over the next five hours, no one visited Farias-Mendoza or allowed him to leave the room. None of the officers who testified said that they had any contact with Farias-Mendoza between 7:30 a.m. and 12:20 p.m., and did not see him leave the interview room, such as to use the bathroom.

¶ 7. At approximately noon, two additional detectives, Gregory Schuler and Alfonso Morales, became involved in the case. Just before 12:20 p.m., Schuler and Morales, who speaks Spanish fluently, entered Room 414. Morales had just started work for the day and had not previously had contact with Farias-Mendoza. Morales asked Farias-Mendoza if he would allow them to swab his mouth to get a DNA sample. Morales explained the DNA swabs to Farias-Mendoza, and informed him "he was not in custody." There was no testimony that Farias-Mendoza responded in any way or that Morales had any indication that Farias-Mendoza had heard, or understood, that he was free to leave. Morales testified that if Farias-Mendoza had refused to give the swabs and asked to leave, Morales would have had to let him go because they "had nothing to keep him." Farias-Mendoza agreed to give a DNA sample. The test took about five to ten minutes, and Schuler left with the swabs after they were taken.

¶ 8. After Schuler left, Detective Steven Caballero joined Morales to interview Farias-Mendoza. Morales testified that Farias-Mendoza then asked questions about what DNA was used for, and Morales explained that police can get DNA matches with offenders from victims' fingernail clippings because victims who struggle may have some offender DNA under their fingernails. Morales says Farias-Mendoza then volunteered that he had been in a physical altercation with the victim, that the victim scratched his hand and that he hit her. This statement was made shortly after 12:30 p.m.

¶ 9. Once Farias-Mendoza made that statement, Morales and Caballero left the room to confer. They decided to place Farias-Mendoza under arrest for domestic violence (based on Farias-Mendoza's admission that he struck Kish). They reentered the interview room and, at 12:45 p.m., Morales advised Farias-Mendoza he was under arrest and read him his Miranda rights. Morales asked Farias-Mendoza to initial each page of the prisoner questionnaire, which was written in Spanish, acknowledging he understood the Miranda warnings and why he was being taken into custody.

¶ 10. Morales then proceeded to question Farias-Mendoza. Within minutes, Farias-Mendoza admitted that he had stabbed Kish to death. He continued to offer statements over the next five-and-a-half hours.

¶ 11. Farias-Mendoza was charged with first-degree intentional homicide with the use of a dangerous weapon, contrary to Wis. Stat. §§ 940.01(l)(a) and 939.63 (2003-04). He moved to suppress "anything obtained from the stop, arrest and subsequent interrogation of Mr. Farias-Mendoza." His motion alleged that his illegal arrest tainted all of his statements to police that were given on the day of his arrest.

¶ 12. The trial court conducted a hearing over two days at which four officers testified. At the hearing, the State indicated that it was not seeking to introduce any statements made at the apartment building or at the police station prior to Farias-Mendoza receiving Miranda warnings. Ultimately, the trial court denied the suppression motion.

¶ 13. Farias-Mendoza and the State negotiated a plea bargain pursuant to which Farias-Mendoza pled guilty to second-degree intentional homicide while armed, contrary to Wis. Stat. §§ 940.05(l)(b) and 939.63. He was sentenced to forty-two years of initial confinement and twenty years of extended supervision. He filed a motion for postconviction relief seeking resentencing, which was denied. This appeal followed.

DISCUSSION

¶ 14. This case presents what is known as an "attenuation" issue. Farias-Mendoza contends that he was illegally seized within the meaning of the Fourth Amendment when he was held at the police station in a locked room for more than five hours without probable cause to arrest him. He argues that as a result of this Fourth Amendment violation, his post -Miranda statements to police should be suppressed because they were tainted by the initial constitutional violation and were not sufficiently attenuated from that violation.

¶ 15. "The question of whether evidence is the fruit of a prior constitutional violation or whether 'the evidence was sufficiently attenuated so as to be purged of the taint' is one of constitutional fact." State v. Anson, 2005 WI 96, ¶ 18, 282 Wis. 2d 629, 698 N.W.2d 776 (citation omitted). Likewise, the threshold question of whether a person has been " 'seized' for Fourth Amendment purposes" is a question of constitutional fact. See State v. Williams, 2002 WI 94, ¶ 17, 255 Wis. 2d 1, 646 N.W.2d 834. When appellate courts review questions of constitutional fact, we adopt the trial court's findings of historical fact unless they are clearly erroneous, but " 'we independently apply those facts to the constitutional standard.'" Anson, 282 Wis. 2d 629, ¶ 18 (citation omitted).

I. Whether Farias-Mendoza was illegally seized

¶ 16. Farias-Mendoza argues that he was under arrest when he was asked to go "downtown." In the alternative, he argues that even if his initial trip to the police station was voluntary, his placement in a locked interrogation room for over five hours became an illegal detention under the Fourth Amendment. The State disagrees, arguing that Farias-Mendoza's "arrival and presence at the police station did not constitute a seizure, arrest or detention for purposes of the Fourth Amendment."

¶ 17. Not all interactions between police and citizens constitute seizures under the Fourth Amendment. United States v. Mendenhall, 446 U.S. 544, 552 (1980). A seizure occurs only when an officer, by use of physical force or show of authority, restrains a person's liberty. Id. at 553. A person has been "seized" for Fourth Amendment purposes "only if, in view of all of the circumstances surrounding the incident, a reasonable person would have believed that he was not free to leave." Id. at 554.

¶ 18. It is not clear from the record whether the trial court concluded that Farias-Mendoza was illegally seized. The trial court found that Farias-Mendoza had been held in a locked interview room in the station for as long as five hours and twenty minutes. However, the trial court further found that no one displayed a weapon or threatened Farias-Mendoza. The trial court stated: "He may just have been five hours there without anyone paying attention to who he was whatsoever." The trial court then concluded:

I don't believe that he was free to leave on his own in the sense that he could open the door and walk out without telling anybody or without having the assistance of somebody to open the door and to go through the rest of the security checkpoints to leave that facility.

Shortly thereafter, the trial court stated that Farias-Mendoza sitting in the room for five hours was the only factor that weighed in favor of a conclusion that Farias-Mendoza was under arrest, given that no guns were displayed, no handcuffs were used and

[t]here was no confrontation of facts against him or any other kind of aggressive kind of tactic like that that the defendant might have misperceived as an effort by the State to restrain him. I think a reasonable person in the defendant's position.. . would have thought that the police were being impolite but not that he was under arrest.

Based on these final statements, it appeared that the trial court was finding that there had been no arrest.

¶ 19. However, the trial court shortly thereafter stated: "It was an illegal detention against the defendant's rights, his Fourth Amendment rights, to be held so long without talking to a police officer, but I don't believe that such an illegal detention tainted his confession in this case." This statement, and the fact the trial court then went on to conduct an attenuation analysis, suggest the trial court found there had been a Fourth Amendment violation.

¶ 20. Because the issue whether Farias-Mendoza was seized is a question of constitutional fact, we decline to resolve the question whether the trial court found there was an illegal seizure. Based on our analysis of the undisputed facts and accepting the facts found by the trial court, we conclude that Farias-Mendoza was seized when he was held for over five hours in a locked room in the station.

¶ 21. It is undisputed that Farias-Mendoza was in a locked interview room and that the investigating detectives left that room at approximately 7:30 a.m. There is no evidence that anyone visited Farias-Mendoza or that he left the room. Instead, the undisputed evidence is that the detectives next went to see Farias-Mendoza at 12:20 p.m., when they asked him to provide a DNA sample.

¶ 22. The State contends that this court should "conclude as a matter of constitutional fact that during his five-hour wait in the interrogation room, Farias-Mendoza was not illegally detained." The State argues:

There is no evidence that Farias-Mendoza realized the door was locked. There is no evidence that he was physically uncomfortable during that time or that he wanted to leave. Farias-Mendoza was not confronted with the threatening presence of several officers or a display of weapons, no officer touched him, no officer used a threatening tone of voice or language, there was no physical force used, and no show of authority was used. For all of these reasons, a reasonable innocent person under all of these circumstances would not have felt that he was not free to leave.

¶ 23. We disagree with the State's conclusion. While a defendant is not automatically seized anytime he is taken to a police station for questioning, see State v. Kramar, 149 Wis. 2d 767, 782-84, 440 N.W.2d 317 (1989), the United States Supreme Court has recognized that an initially consensual encounter can be transformed into a seizure or detention under the Fourth Amendment, Kaupp v. Texas, 538 U.S. 626, 632 (2003). Assuming Farias-Mendoza's initial trip to the station was consensual, we nonetheless conclude that when Farias-Mendoza was left in a locked room for five hours, he was "seized" within the meaning of the Fourth Amendment. Under these circumstances, a reasonable person would not have believed that he was "free to leave." See Mendenhall, 446 U.S. at 554.

¶ 24. The State contends that Farias-Mendoza could have knocked on the door, asked to he let out and escorted from the building. Not only do we doubt that a reasonable person would think to do that after having been transported to the police station, questioned for thirty minutes about a homicide, and left in a locked room, we question the State's suggestion that it was Farias-Mendoza's duty to try to get out of the locked room. The State cites no authority for such a proposition, and we are unconvinced that Farias-Mendoza was required to seek to leave. A reasonable person who is locked in an interview room for five hours would not believe that he was free to leave. Accordingly, we conclude that Farias-Mendoza was illegally seized.

II. Whether the seizure was "sufficiently attenuated" from the post- Miranda statements

¶ 25. We have concluded that Farias-Mendoza's constitutional rights under the Fourth Amendment were violated when he was illegally seized. He argues that because of this illegality, the post-Miranda statements are inadmissible because they were "tainted" by the illegal seizure. However, under the attenuation doctrine, "a court need not hold that all evidence is fruit of the poisonous tree simply because it would not have come to light but for the illegal actions of the police." State v. Tobias, 196 Wis. 2d 537, 544, 538 N.W.2d 843 (Ct. App. 1995).

¶ 26. Under the attenuation doctrine, the determinative issue is "whether, granting establishment of the. primary illegality," the evidence was derived from the "exploitation of that illegality or instead by means sufficiently distinguishable to be purged of the primary taint." State v. Simmons, 220 Wis. 2d 775, 780, 585 N.W.2d 165 (Ct. App. 1998) (internal quotation marks and citations omitted). In considering whether the causal chain is sufficiently attenuated, the court may consider: (1) the time elapsed between the illegality and the acquisition of the evidence; (2) the presence of "intervening circumstances"; and (3) the purpose and flagrancy of the official misconduct. Brown v. Illinois, 422 U.S. 590, 603-04 (1975). The burden of showing admissibility of any statements rests on the prosecution. Id. at 604.

¶ 27. The State, citing Brown, acknowledges that the giving of Miranda warnings alone "does not per se cause the statement to be sufficiently attenuated to be purged of the taint of the prior illegality." However, the State argues that analysis of the three Brown factors in this case suggests there was sufficient attenuation.

A. Temporal relationship

¶ 28. We are required to consider the amount of time that elapsed between the illegality and the acquisition of the challenged evidence. See Brown, 422 U.S. at 603-04. In doing so, we must also consider the conditions during the lapse of time. See State v. Phillips, 218 Wis. 2d 180, 206, 577 N.W.2d 794 (1998). "In the strictest of custodial conditions, the passing of only a short time might not be long enough to purge the initial taint." Id. at 207. For example, in State v. Kiekhefer, 212 Wis. 2d 460, 569 N.W.2d 316 (Ct. App. 1997), this court concluded that the Constitution required suppression of evidence obtained during a search that resulted from the exploitation of illegal entry to a room in a home. We held that where the police obtained unwarned statements and physical evidence within fifteen minutes of entering the room, "passage of time [was] not an attenuating factor." Id. at 482.

¶ 29. Here the temporal proximity of the confession to the illegal detention was likewise very close. Within twenty-five minutes of the end of Farias-Mendoza's isolation, he confessed to the homicide. While being illegally detained, after giving a DNA sample at 12:20 p.m., Farias-Mendoza made the first incriminating statement about hitting the victim. That statement prompted his arrest at 12:30 p.m. for domestic violence, and the reading of Miranda warnings in Spanish. By 12:45 p.m. Farias-Mendoza had confessed to the murder. Although, as the State notes, there is no evidence that Farias-Mendoza was threatened or intimidated, the fact remains that after giving a DNA sample and admitting to a fight with Kish, there were only a few minutes for him to consider his situation. The fifteen-minute separation between the arrest (presumably the end of the illegal detention) and the confession suggests the taint of the illegal detention had not been removed by the passage of time, especially where the five-hour incommunicado detention may well have had an "inherently coercive" effect. See New York v. Quarles, 467 U.S. 649, 654 (1984) (interrogation process is "inherently coercive").

B. Intervening circumstances

¶ 30. The second factor to consider is whether there were "intervening circumstances" between the illegality and the confession. See Brown, 422 U.S. at 603. The State argues:

The DNA swab and conversation about DNA constituted an intervening factor because the conversation triggered Farias-Mendoza's admission that he had a physical fight with Kish. Farias-Mendoza's conversation with Detective Morales about what DNA can show weighs in favor of attenuation. The conversation demonstrates that it was the information that his DNA might be found under the victim's fingernails, rather than the length of his prior wait in the interrogation room, that caused Farias-Mendoza to exercise his free will and make a statement admitting he committed the crime.

¶ 31. We disagree with the State's reasoning. Rather than suggesting the illegality was attenuated, the fact that officers entered Farias-Mendoza's room after five hours and immediately asked him to offer a DNA sample exacerbated the detention. Farias-Mendoza spoke to no one for five hours, and suddenly was asked to voluntarily provide a DNA sample and then questioned about his last moments with Kish. It is more accurate to suggest that these actions exploited the five-hour isolation, rather than dispelled the taint of the illegal seizure. It was police action — specifically conversation they initiated with Farias-Mendoza — that prompted the statements that led to his official arrest and subsequent questioning.

C. Purpose of the misconduct

¶ 32. The third factor to consider is "the purpose and flagrancy of the official misconduct." See Id. at 603-04. "[Ijnherent in the flagrancy or purposefulness evaluation is an inquiry into whether there is evidence of some degree of bad faith exploitation of the situation on the part of the officer." State v. Richter, 2000 WI 58, ¶ 53, 235 Wis. 2d 524, 612 N.W.2d 29. The trial court found that the officers did not "purposefully" hold Farias-Mendoza for five hours. We question this finding, given that Farias-Mendoza was left in a locked interview room. Although the police did not have sufficient evidence to arrest him, Detective Johnson testified that he would not have let Farias-Mendoza leave if Farias-Mendoza had asked to because of Johnson's suspicion that Farias-Mendoza was possibly the killer. Any inference that Farias-Mendoza was simply forgotten, or accidentally abandoned, is inconsistent with later police conduct.

¶ 33. Although both Johnson and Morales conceded that they did not have sufficient evidence for an arrest, neither told Farias-Mendoza he was free to go or, apparently, paid attention to the fact that Farias-Mendoza was left alone for five hours. Morales testified that he did tell Farias-Mendoza that he was "not in custody," but no evidence shows that Farias-Mendoza understood that statement to mean he was free to leave. Regardless of whether the officers involved intended to isolate Farias-Mendoza in a locked interrogation room for five hours, their inaction led to exactly that result.

¶ 34. Assuming that Farias-Mendoza was not intentionally held for five hours, that would present the strongest argument for attenuation. However, this factor alone does not overcome the temporal proximity and exacerbating circumstances clearly established to create the factual attenuation needed to dispel the taint of the illegal seizure.

CONCLUSION

¶ 35. We conclude that Farias-Mendoza was illegally seized in violation of the Fourth Amendment. We further conclude that Farias-Mendoza's post -Miranda confession, which was offered within twenty-five minutes of the officers' first questions to Farias-Mendoza after his five hours of isolation, was insufficiently attenuated from the illegal seizure. Therefore, Farias-Mendoza's post -Miranda statements should have been suppressed. We reverse the judgment and order, remanding the cause to allow Farias-Mendoza to withdraw his plea.

By the Court. — Judgment and order reversed and cause remanded.

       Farias-Mendoza's motion sought to suppress "anything obtained from the stop, arrest and subsequent interrogation of Mr. Farias-Mendoza." On appeal, the parties do not discuss evidence other than statements that might be subject to suppression. Therefore, our decision reversing the suppression order is limited to statements Farias-Mendoza made on the day of his arrest.

       A psychologist also testified about Farias-Mendoza^ limited mental capacity. Because we do not decide this case based on alleged mental inabilities, we do not discuss this testimony.

       The trial court indicated that it could not believe that the police "either those in uniforms or those in suits, are so careless that they would just let a person sit there five hours without talking to him nor do I believe that they're so incompetent that they would just let him be there." Nonetheless, the State produced no evidence that anyone entered the room where Farias-Mendoza was held, or that Farias-Mendoza left the room during those hours. Based on the lack of evidence to the contrary, the trial court's belief that someone must have entered the Room 414 is not supported by the record.

       All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise noted.

       The testifying officers were Campos, Johnson, Schuler and Morales. Detective Caballero did not testify. In addition to officer testimony, the trial court heard testimony from a psychologist who had examined Farias-Mendoza.

       In Brown v. Illinois, 422 U.S. 590 (1975), the Court noted that even if statements are voluntary under the Fifth Amendment, there is still a Fourth Amendment issue where a person is illegally seized. Id. at 601-02. Here, Farias-Mendoza does not contend that his statements were involuntary under the Fifth Amendment, so we will focus solely on the Fourth Amendment attenuation issue.

       The State does not argue in the alternative that the State had probable cause to arrest Farias-Mendoza.

       Because the State does not seek to introduce pre-Miranda statements, we need not determine whether Farias-Mendoza was seized prior to being brought to the station. The fact that he was seized at any time prior to the giving of the Miranda warnings is sufficient to warrant an attenuation analysis.

       As noted in footnote four, the trial court stated that it could not believe that the police officers would just leave Farias-Mendoza unattended for five hours. However, there is no evidence to the contrary. Thus, any finding that officers must have visited Farias-Mendoza or allowed him to leave the room is clearly erroneous.


author: HOOVER, PJ.

text:
    Lawrence J. Plourde, on behalf of the State of Wisconsin, Plaintiff-Respondent, v. Wallace Habhegger, Defendant-Appellant, Dennis Horner, Rick Powers, Mark Samelstad, Jim Vander Wyst and John Berends, Defendants.
    Court of Appeals

      No. 2005AP2106.

      Submitted on briefs April 24, 2006.

      —Decided June 6, 2006.

    2006 WI App 147
    (Also reported in 720 N.W.2d 130.)

      On behalf of the defendant-appellant, the cause was submitted on the brief of Ronald L. Siler of Van Dyk, O'Boyle & Siler; S.C., New Richmond.
    On behalf of the plaintiff-respondent, the cause was submitted on the brief of Phillips M. Steans of Phillip M. Seans, S.C., Menomonie.
    Before Cane, C.J., Hoover, PJ., and Peterson, J.
   HOOVER, PJ.

¶ 1. Wallace Habhegger appeals a judgment, entered on a jury's verdict, ordering him to pay a $150 forfeiture for a violation of the open meetings law, Wis. Stat. §§ 19.81-19.98. He also appeals an order denying his motion for judgment notwithstanding the verdict; an order denying his motion to dismiss, which the court treated as a summary judgment motion; and an order awarding costs and attorney fees to Lawrence Plourde. Habhegger asserts the open meetings law does not apply here. Because we conclude no meeting occurred, and because we conclude the law does not apply to committees of one member, the open meetings law was not triggered. Accordingly, we reverse the judgment and orders and remand this case with directions to enter summary judgment in Habhegger's favor.

Background

¶ 2. Habhegger was the building inspector, zoning administrator, and assessor for the City of New Richmond. As the building inspector, he evidently was the sole member of the Department of Building Inspection. He was also a member of the city's Supervisory and Safety Committee, along with John Berends, Dennis Horner, Rick Powers, Mark Samelstad, and Jim Vander-Wyst. That committee had a total of fourteen members.

¶ 3. Plourde, through his company Olympic Housing, Inc., owns a parcel of land in the city. Plourde wanted to open a car wash on the property and began the process of obtaining a building permit. Habhegger informed him that there would be no permit unless Plourde installed a street to connect the parcel to an existing street. Plourde believed Habhegger reached this decision after an October 8, 2002 "meeting" between Habhegger and the other five named defendants.

¶ 4. In August 2003, Plourde contacted the St. Croix County district attorney, asserting an open meetings law violation had occurred. The district attorney asked for more information before pursuing the matter. On January 20, 2004, Plourde filed this complaint. He alleged these six members of the Supervisory and Safety Committee violated the open meetings law by meeting to discuss his permit application without providing notice of the meeting and by failing to conduct the meeting in open session.

¶ 5. The six members filed a motion to dismiss, which the court treated as a motion for summary judgment. The court granted the motion as to all members but Habhegger, deciding it was necessary to have a trial on whether Habhegger, as the sole member of the Department of Building Inspection, violated the open meetings law. The case was tried to a jury, which found a violation. Habhegger moved for judgment notwithstanding the verdict, but the trial court denied the motion. The court ordered Habhegger to pay a $150 forfeiture and awarded costs and attorney fees to Plourde pursuant to Wis. Stat. § 19.97(4).

Discussion

¶ 6. Plourde asserts that we must review this case as we would any jury verdict, by determining whether there is any credible evidence supporting the verdict. But Habhegger raises a legal, not a factual, question. The interpretation of statutes and the applicability of a statute to a set of facts are questions of law. See State ex rel. Newspapers, Inc. v. Showers, 135 Wis. 2d 77, 85, 398 N.W.2d 154 (1987).

¶ 7. Wisconsin Stat. § 19.83(1) requires that "[e]very meeting of a governmental body shall be preceded by public notice ... and shall be held in open session." While Plourde asserts there was no notice or open session, Habhegger asserts there was no meeting. We agree with Habhegger.

¶ 8. There are two prerequisites before the open meetings law comes into play. "First, there must be a purpose to engage in governmental business" as specified in Wis. Stat. § 19.82(2). See Newspapers, Inc., 135 Wis. 2d at 102. That statute defines "meeting" as "the convening of members of a governmental body for the purpose of exercising the responsibilities, authority, power or duties delegated to or vested in the body." Wis. Stat. § 19.82(2). "Second, the number of members present must be sufficient to determine the parent body's course of action regarding the proposal discussed." Newspapers, Inc., 135 Wis. 2d at 102.

¶ 9. It is undisputed that the Supervisory and Safety Committee was created to protect the health and safety of employees and the general public through oversight of working conditions and work places. However, it has no vested authority over or responsibility for the issuance of building permits. See State v. Swanson, 92 Wis. 2d 310, 317, 284 N.W.2d 655 (1979) (citing Wis. Stat. § 19.82(2)). Rather, Habhegger is the only individual authorized to grant or deny building permits. Therefore, the first requirement for a "meeting" was not present. That is sufficient to avoid the open meetings law requirements.

¶ 10. However, the number of members present was also insufficient to trigger the open meetings law. The number of members is important, in part, because a gathering of one-half or more of the body's membership is rebuttably presumed to be a meeting for the purpose of exercising the body's authority. Wis. Stat. § 19.82(2). But sometimes, the meeting can be less than one-half of the membership and still trigger the open meetings law. This occurs when the meeting consists of a "negative quorum." See Newspapers, Inc., 135 Wis. 2d at 103-04. In Newspapers, Inc., a meeting of four of a committee's eleven members triggered the open meetings law relative to a budget discussion because the budget had to be passed by a two-thirds vote. As a result, the four members constituted a negative quorum with the potential to block any budget proposal. Id.

¶ 11. Here, the meeting was among six of fourteen members. This is neither a presumptive quorum nor, in this case, a negative quorum. Coupled with the fact that the Supervisory and Safety Committee is not vested with the authority to make determinations on building permits, neither trigger was present. The open meetings law did not apply to this gathering of Supervisory and Safety Committee members.

¶ 12. Although the Supervisory and Safety Committee did not meet, there is arguably a question whether the Department of Building Inspection, with only Habhegger as a member, had a meeting. However, we conclude the open meetings law is not meant to apply to single-member governmental bodies.

¶ 13. Wisconsin Stat. § 19.82(2) speaks of a meeting of the members, plural, implying there must be at least two members of a governmental body. Moreover, the notion of applying the open meetings law to a body of one creates certain practical problems. Part of the declared policy of the open meetings law is that, "[i]n recognition of the fact that a representative government of the American type is dependent upon an informed electorate ... the public is entitled to the fullest and most complete information regarding the affairs of government as is compatible with the conduct of governmental business." Wis. Stat. § 19.81(1).

¶ 14. In other words, we require the public to be granted access to discussions among governmental body members so that the public can be informed of the debate and decision-making process that occurs between the body's membership. But it would be absurd, if not impossible, to require an open meeting notice whenever a body of one would set out to contemplate a pending issue. We do not believe the legislature intended to require public soliloquies by single-member governmental bodies.

¶ 15. The judgment and orders are reversed. This case should not have been submitted to the jury because, as a matter of law, the open meetings law did not apply. Accordingly, Habhegger is not subject to a forfeiture. This reverses Plourde's status as a prevailing party and he is therefore not entitled to costs or attorney fees incurred in prosecuting this action. Summary judgment should have been entered on Habhegger's behalf. On remand, the court shall enter judgment accordingly.

By the Court. — Judgment and orders reversed and cause remanded with directions.

       All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise noted.

       Plourde asserts Habhegger did not appeal the court's denial of Habhegger's motion for summary judgment, the jury's verdict, or the award of costs and fees. He asserts the only issue on appeal is whether the court erred in denying Habhegger's motion for judgment notwithstanding the verdict. Plourde misapprehends appellate procedure.
      Habhegger could not appeal the order denying the motion for summary judgment, except with permission, because it was a nonfinal order. See Wis. Stat. § 808.03. Habhegger did not need to appeal the jury's actual verdict because he has appealed the judgment entered on the verdict. Finally, the order for costs and attorney fees was entered after the appeal was filed. However, an order for costs becomes part of the final judgment, which was properly appealed here. See DeWitt Ross & Stevens, S.C. v. Galaxy Gaming & Racing Ltd. P'ship, 2003 WI App 190, ¶¶ 24-25, 267 Wis. 2d 233, 670 N.W.2d 74, overruled on other grounds, 2004 WI 92, 273 Wis. 2d 577, 682 N.W2d 839. Moreover, an appeal from a final judgment or order "brings before the court all prior nonfinal judgments, orders and rulings adverse to the appellant and favorable to the respondent made in the action or proceeding not previously appealed and ruled upon." Wis. Stat. § 809.10(4).
      Plourde may be thinking of our rules of waiver, such as the rule that issues not briefed are deemed abandoned. See Reiman Assocs., Inc. v. R/A Adver., Inc., 102 Wis. 2d 305, 306 n.1, 306 N.W.2d 292 (Ct. App. 1981). Habhegger did not specifically brief arguments related to the summary judgment motion, the facts underlying the jury's verdict, or the order for costs. However, there is only one fundamental, dispositive question in this case: whether the open meetings law applied. Answering that question affects all orders, which are properly before us, and the final judgment.

       There is no dispute Plourde properly filed his complaint as a relator. See Wis. Stat. § 19.97(4).

       Plourde moved to vacate the earlier summary judgment granted to the other five members. That motion was granted but is not before us on appeal.


author: SNYDER, EJ.

text:
    H. A. Friend & Company, Plaintiff-Appellant-Cross-Respondent, v. Professional Stationery, Inc., f/k/a Friend's Professional Stationery, Inc. and John Van Der Puy, Defendants-Respondents-Cross-Appellants.
    Court of Appeals

      No. 2005AP1402.

      Submitted on briefs February 17, 2006.

      —Decided June 7, 2006.

    2006 WI App 141
    (Also reported in 720 N.W.2d 96.)

      On behalf of the plaintiff-appellant-cross-respondent, the cause was submitted on the briefs of John D. Finerty, Jr., and Ted. A. Wisnefski of Michael Best & Friedrich LLP of Milwaukee.

      On behalf of the defendants-respondents-cross-appellants, the cause was submitted on the brief of James O. Conway of Olsen, Kloet, Gunderson & Conway of Sheboygan.
    Before Snyder, EJ., Nettesheim and Anderson, JJ.
   SNYDER, EJ.

¶ 1. H.A. Friend & Company (Friend) appeals from that portion of a judgment dismissing its claims for statutory civil theft and common law conversion. Erofessional Stationery, Inc., f/k/a Friend's Erofessional Stationery, Inc. (collectively referred to as ESI) and John Van Der Fuy cross-appeal from that portion of the judgment denying their request for actual costs and attorney fees in connection with the dismissed claims. The parties do not appeal from the summary judgment granted in favor of Friend on its breach of contract claim against ESI.

¶ 2. Friend argues that the circuit court erred when it dismissed all claims that did not sound in contract. It contends that its claims for civil theft under Wis. Stat. § 895.80(1) (2001-04) and for common law conversion against Van Der Fuy were sufficiently pled in the complaint and should not be barred by the existence of a contract between the parties. ESI counters that Friend's noncontract claims are barred by the economic loss doctrine and are frivolous and that the circuit court erred in refusing to award PSI the actual costs and attorney fees it incurred in the defense of those claims. We agree with Friend that the circuit court erred, and we reverse that portion of the judgment dismissing Friend's claims for statutory civil theft and conversion against Van Der Puy. The litigation is ongoing and, consequently, we vacate that portion of the judgment addressing costs and fees. We remand for further proceedings in accordance with this opinion.

BACKGROUND

¶ 3. Friend is in the business of producing and selling office papers, legal stationery, and office supplies to the legal profession and others. Friend and PSI entered into a Franchise Agreement on August 8,1988, whereby Van Der Puy agreed to operate Friend's franchise under the name Friend's Professional Stationery. On February 7, 2003, the parties entered into a Franchise Termination Agreement, which is the subject of this appeal. Friend's Professional Stationery, Inc. changed its name to Professional Stationery Inc. in November 2003. Van Der Puy is the principal shareholder, president, and registered agent of PSI.

¶ 4. Pursuant to the terms of the termination agreement, Friend purchased the assets, properties, rights and interests that were owned or used or otherwise related to the operation of PSI, except for those specifically excluded by paragraph 4.2 of the termination agreement. In exchange, Friend agreed to extinguish liabilities totaling approximately $517,000, which PSI had accumulated during the course of the franchise relationship. The purchased assets expressly included "all cash on hand and in bank accounts at the time of the execution of this agreement and all cash equivalents and marketable securities, including savings and money market accounts." The parties do not dispute that at the time of execution of the termination agreement, PSI had approximately $12,678.85 in the company's money market account and $3,724.91 in its business checking account.

¶ 5. After execution of the termination agreement, Van Der Puy did not turn over the checking account or money market funds to Friend, nor did he sign an authorization for Friend to access the accounts. Van Der Puy did not have Friend's permission to write checks against the checking account or to withdraw or transfer funds from the money market account after February 7,2003. Nonetheless, between February 7 and April 28, 2003, Van Der Puy drew down the money market account balance to zero. Bank records indicate that the money market funds were transferred to the business checking account. By July 31, 2003, the checking account balance was also zero.

¶ 6. Records indicate that during this time Van Der Puy, and in one instance his wife, wrote more than ninety checks against the PSI account. The records suggest that Van Der Puy wrote checks against the PSI account for things such as health insurance, a car wash, purchases at Best Buy, gas, cash, and legal representation.

¶ 7. Friend brought suit claiming breach of contract, civil theft, and conversion. PSI and Van Der Puy moved for dismissal of all but the breach of contract claim for failure to state a claim upon which relief may be granted. Friend moved for partial summary judgment, asking for a determination of liability on all claims and an evidentiary hearing on damages. At the motion hearing, the circuit court granted summary judgment in favor of Friend on the breach of contract claim, awarding Friend $16,403. The court granted PSI and Van Der Puy's motion to dismiss the remaining claims. Each party was ordered to bear its own fees and costs. This appeal followed.

DISCUSSION

¶ 8. A motion to dismiss for failure to state a claim tests the legal sufficiency of the complaint. Wausau Tile, Inc. v. County Concrete Corp., 226 Wis. 2d 235, 245, 593 N.W.2d 445 (1999). "The facts set forth in the complaint must be taken as true and the complaint dismissed only if it appears certain that no relief can be granted under any set of facts that the plaintiffs might prove in support of their allegations." Northridge Co. v. W.R. Grace Co., 162 Wis. 2d 918, 923, 471 N.W.2d 179 (1991). A reviewing court must construe the facts set forth in the complaint and all reasonable inferences that may be drawn from those facts in favor of stating a claim. Id. at 923-24. Whether a complaint states a claim for relief is a question of law, which this court reviews de novo. Id. at 923. Here, we must determine whether Friend's complaint sufficiently alleges statutory civil theft and conversion against Van Der Puy, and if so, whether the economic loss doctrine or corporate veil nonetheless bars those claims.

¶ 9. We begin with Friend's contention that the circuit court improperly dismissed its claim against Van Der Puy for civil theft under Wis. Stat. § 895.80. The relevant statutory language is as follows:

Property damage or loss. (1) Any person who suffers damage or loss by reason of intentional conduct that occurs on or after November 1,1995, and that is prohibited under ... [Wis. Stat. §] 943.20 ... has a cause of action against the person who caused the damage or loss.
(2) The burden of proof in a civil action under sub. (1) is with the person who suffers damage or loss to prove a violation of. . . 943.20 ... by a preponderance of the credible evidence.

Sec. 895.80(1) and (2). To prove conduct in violation of Wis. Stat. § 943.20, the aggrieved party must show that the other party:

By virtue of his or her office, business or employment... having possession or custody of money... of another, intentionally use[d], transfer[ed]... or retain[ed] possession of such money... without the owner's consent, contrary to his or her authority, and with intent to convert to his or her own use or to the use of any other person except the owner. A refusal to deliver any money... which [wa]s in his or her possession or custody by virtue of his or her office, business or employment ... upon demand of the person entitled to receive it, or as required by law, is prima facie evidence of an intent to convert to his or her own use within the meaning of this paragraph.

Sec. 943.20(l)(b).

¶ 10. Friend's complaint alleges that Van Der Puy, as president and an employee of PSI, "intentionally ... used... and retained possession of the Purchased Assets of H.A. Friend ... without its consent and with the intent to deprive H.A. Friend permanently of possession of such property . It cites the depletion of the checking account and money market account as specific examples of the theft. Specifically, Friend alleged that after the termination agreement was executed, Van Der Puy issued numerous checks from the checking account, a "purchased asset," without consent "and contrary to the authority of H.A. Friend." This is sufficient to state a claim under Wis. Stat. § 895.80.

¶ 11. Likewise, we look to see whether the complaint states a claim for conversion. The elements of conversion are: (1) intentional control or taking of property belonging to another, (2) without the owner's consent, (3) resulting in serious interference with the rights of the owner to possess the property. See Bruner v. Heritage Cos., 225 Wis. 2d 728, 736, 593 N.W.2d 814 (Ct. App. 1999). In its conversion claim, Friend alleges that Van Der Puy wrongfully assumed control over certain purchased assets belonging to Friend, acted in reckless or intentional disregard of Friend's rights, and acted without Friend's consent or authorization, all of which seriously interfered with Friend's right to possess the property. The claim incorporated all of the specific factual allegations regarding Van Der Puy's drawing down of the checking account and money market funds after the termination agreement was executed on February 7, 2003. Again, the complaint makes sufficient allegations to state a claim.

¶ 12. Friend's complaint is not limited to vague, conclusory assertions but instead sets forth specific allegations and ultimate facts that support the claims. This is sufficient to defeat a motion to dismiss. Cf. Aon Risk Servs., Inc. v. Liebenstein, 2006 WI App 4, ¶ 6, 289 Wis.2d 127, 710 N.W.2d 175 (Ct. App. 2005) (in order for a complaint to withstand summary judgment, mere conclusory statements that echo legal or statutory standards are not sufficient; rather the complaint must allege the ultimate facts that will support the claim), abrogated on other grounds by Burbank Grease Servs., LLC v. Sokolowski, 2006 WI 103, ¶ 33, No. 2004AP468. Therefore, we hold that Friend has sufficiently presented claims for statutory civil theft and common law conversion in its complaint.

¶ 13. Our final task is to determine whether relief is nonetheless barred. Taking all of the allegations in the complaint as true, relief may still be unavailable to Friend.

¶ 14. Van Der Puy argues that pursuant to the economic loss doctrine, the only remedy available to Friend is through its breach-of-contract claim. The economic loss doctrine is a judicially created doctrine that seeks to preserve the distinction between contract law and tort. Insurance Co. of N. Am. v. Cease Elec. Inc., 2004 WI 139, ¶ 15, 276 Wis. 2d 361, 688 N.W.2d 462. From its inception, the doctrine has been founded on the premise that contract law, and particularly the law of warranty, is better suited than tort law for addressing purely economic loss in the commercial arena. Id. The economic loss doctrine states that the purchaser of a product cannot recover from its maker or seller in tort for damages that are solely economic. See Kailin v. Armstrong, 2002 WI App 70, ¶ 27, 252 Wis. 2d 676, 643 N.W.2d 132. Thus, Van Der Puy argues, the economic loss doctrine prevents Friend from recovering under any legal theory other than breach of contract.

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¶ 15. While we acknowledge the extensive reach of the economic loss doctrine, we conclude that the dispute presented here is not barred by the economic loss doctrine. First, we observe that there was no defective product or service involved. Our supreme court revisited the economic loss doctrine and reiterated that" '[ejconomic loss' for purposes of the doctrine is defined as 'the loss in a product's value which occurs because the product is inferior in quality and does not work for the general purposes for which it was manufactured and sold.'" Cease Electric, 276 Wis. 2d 361, 23 (citation omitted) (emphasis added). The checking account and the money market fund are distinguishable from the defective product type of economic loss targeted by the doctrine.

¶ 16. Second, the public policies underlying the economic loss doctrine are not applicable here. The doctrine is generally based on three policies: (1) to maintain the fundamental distinction between tort law and contract law; (2) to protect commercial parties' freedom to contract and allocate risk; and (3) to encourage the party best situated to assess the risk of economic loss, to assume, allocate, or insure against it. See Digicorp, Inc. v. Ameritech Corp., 2003 WI 54, ¶ 35, 262 Wis. 2d 32, 662 N.W.2d 652. Here, the dispute between Friend and Van Der Puy does not concern the protection of a commercial entity's freedom to allocate risk. Van Der Puy did not simply fail to turn over the purchased assets to Friend, which is a risk Friend could have reasonably anticipated and addressed in the contract, but depleted the accounts by spending funds that belonged to Friend.

¶ 17. Finally, our supreme court has clarified that there are occasions where the existence of a contract will not extinguish a tort claim:

Predicating duty upon contract. Ordinarily, a breach of contract is not a tort, but a contract may create the state of things which furnishes the occasion of a tort. 57 Am. Jur. 2d Negligence sec. 47 makes the above quoted statement and adds: "As a general rule, there is implied in every contract for work or services a duty to perform it skillfully, carefully, diligently, and in a workmanlike manner, and a negligent failure to observe any of these conditions is a tort, as well as a breach of contract.... [T]he contract is mere inducement creating the state of things which furnishes the occasion of the tort."

Landwehr v. Citizens Trust Co., 110 Wis. 2d 716, 722-23, 329 N.W.2d 411 (1983) (citations omitted). Here, the termination agreement provided the occasion for the tort because it established Friend's ownership of the funds in the checking account and the money market fund. Van Der Puy had a duty, regardless of the existence of the contract, not to retain or use money that belonged to Friend without Friend's consent or authorization. Thus, we conclude that both the facts and the nature of Friend's claims for statutory civil theft and conversion fall outside the reach of the economic loss doctrine.

¶ 18. Next, Van Der Puy argues that he cannot be sued individually for the acts he committed as a corporate officer. However, Wis. Stat. § 943.20(1)(b) specifically contemplates theft by a corporate officer, stating that "refusal to deliver any money which is in his or her possession or custody by virtue of his or her office, business or employment is prima facie evidence of an intent to convert to his or her own use." Officers are personally responsible for criminal acts committed in the name of the corporation. State v. Kuhn, 178 Wis. 2d 428, 432, 504 N.W.2d 405 (Ct. App. 1993). Because the civil theft statute incorporates by reference the criminal equivalent, we do not hesitate to apply the Kuhn reasoning to Van Der Puy's conduct here.

¶ 19. Finally, with regard to Friend's claim of conversion against Van Der Puy personally, it has never been the law of Wisconsin that an individual escapes liability merely because he or she was acting in the capacity of a corporate officer. See Hanmer v. DILHR, 92 Wis. 2d 90, 97, 284 N.W.2d 587 (1979). There are circumstances where the law will deal with the natural person as a separate entity from the corporation. These circumstances include situations where the corporate affairs are "organized, controlled and conducted so that the corporation has no separate existence of its own and is the mere instrumentality of the shareholder and the corporate form is used to evade an obligation, to gain an unjust advantage or to commit an injustice." Weibke v. Richardson Sons, Inc., 83 Wis. 2d 359, 363, 265 N.W.2d 571 (1978). These are matters to be resolved in the trial court.

CONCLUSION

¶ 20. Friend's allegations of statutory civil theft and common law conversion are sufficient to defeat a motion to dismiss for failure to state a claim upon which relief may be granted. Accordingly, Friend's claim for civil theft under Wis. Stat. § 895.80 along with Friend's claim of conversion, both against Van Der Puy individually, are reinstated. Because the result is ongoing litigation, that portion of the judgment denying PSI and Van Der Puy's claim for costs and fees is vacated.

By the Court. — Judgment reversed in part, vacated in part and cause remanded with directions.

       All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise noted.

       Friend's complaint includes a claim of conversion both against PSI and against Van Der Puy individually. On appeal, Friend abandons its statutory civil theft and conversion claims against PSI, which is out of business. Furthermore, PSI admitted on the record that it "failed to turn over the money," was "sorry that happened," and "has no defense to that." Accordingly, Friend's appeal is limited to whether the circuit court properly dismissed the statutory civil theft claim and the common law conversion claim against Van Der Puy.

       We do not employ the summary judgment methodology here. Partial summary judgment was granted to Friend on its breach of contract claim; however, neither PSI nor Van Der Puy appeals from that portion of the judgment. The Order for Judgment states in relevant part:
      1. Defendants' Motion to Dismiss the Second, Third and Fourth Claims for Relief is granted;
      2. The Plaintiffs Motion for Partial Summary Judgment is granted, in part, and denied, in part; the Plaintiff may take judgment against Professional Stationery, Inc. on the First Claim for Relief in the amount of $16,403[.]
      Our review addresses that portion of the judgment dismissing the noncontract claims against Van Der Puy.

       The economic loss doctrine is an ever-developing area of law, which has been the subject of several refinements over the past decade.
      Since the initial recognition of the economic loss doctrine, Wisconsin courts have significantly expanded the doctrine's scope and breadth. Wisconsin has eliminated any requirement of contractual privity, disregarded arguments that the doctrine leaves parties with no alternative remedy, applied the doctrine to services incidental to the purchase, rejected "bootstrapping" noneconomic losses of third parties, rejected creating an exception for "sudden and calamitous" occurrences, applied the doctrine to commercial real estate purchases, and applied the doctrine to encompass consumer transactions.
      John J. Laubmeier, Comment, Demystifying Wisconsin's Economic Loss Doctrine, 2005 Wis. L. Rev. 225, 229 (2005) (footnotes omitted).

       The termination agreement includes a provision requiring both PSI and Van Der Puy to "give [Friend] reasonable assistance ... on matters relating to [PSI's] business, and to give [Friend] reasonable access to records kept by [PSI] and Van Der Puy relating to such business."