author: CANE, C.J. HOOVER, RJ.

text:
    Susan L. Bellile, Plaintiff-Appellant, v. American Family Mutual Insurance Company, Defendant-Respondent.
    Court of Appeals

      No. 03-0416.

      Submitted on briefs September 29, 2003.

    Decided March 23, 2004.

    2004 WI App 72
    (Also reported in 679 N.W.2d 827.)

      HooveR, EJ., concurs.

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Todd R. McEldowney of O'Melia, Schiek & McEldowney, S.C. of Rhinelander.
    On behalf of the defendant-respondent, the cause was submitted on the brief of Richard W. Zalewski and Michael J. Roman of Zalewski, Klinner & Kramer, LLP of Wausau.
    Before Cane, C.J., Hoover, PJ., and Peterson, J.
   CANE, C.J.

¶ 1. This is another appeal in a recent line of cases that asks us to determine whether an underinsured motorist (UIM) reducing clause in an automobile insurance policy creates contextual ambiguity. Susan Bellile appeals a declaratory judgment limiting American Family Mutual Insurance Company's liability for UIM coverage to $100,000 after applying the policy's UIM reducing clause. She argues the organization of the policy along with the limit of liability provisions when read in conjunction with the reducing clause creates contextual ambiguity. In light of the supreme court's recent decision in Folkman v. Quamme, 2003 WI 116, 264 Wis. 2d 617, 665 N.W.2d 857, we disagree and affirm the judgment.

Background

¶ 2. On January 6, 2000, Bellile sustained bodily injuries when her vehicle was rear-ended by a vehicle driven by Dorothy Jossart. Jossart was insured by Safeco Insurance and had liability insurance with a per person limit of $50,000. Jossart was 100% causally negligent, and Safeco paid the policy limits.

¶ 3. American Family issued Bellile UIM coverage with a $150,000 "limit" as part of her "Wisconsin Family Car Policy." Bellile commenced an action against American Family for the UIM limit. American Family moved for a declaratory judgment arguing that, pursuant to a reducing clause, it was only required to pay $100,000 due to Bellile having already collected $50,000. Bellile also moved for a declaratory judgment entitling her to recover $150,000.

¶ 4. The trial court granted declaratory judgment to American Family. Shortly thereafter, the Wisconsin Supreme Court issued its decision in Badger Mutual Insurance Co. v. Schmitz, 2002 WI 98, 255 Wis. 2d 61, 647 N.W.2d 223. Schmitz set forth principles of insurance contract interpretation for UIM provisions and a contextual ambiguity framework. Bellile moved the court to reconsider and set aside the judgment, and the trial court granted the motion.

¶ 5. Bellile again moved for a declaratory judgment that she was entitled to $150,000, arguing the reducing clause in American Family's policy should be invalidated on contextual ambiguity grounds. The trial court once more granted declaratory judgment to American Family. It concluded the policy "clearly sets forth a clear and unambiguous limitation and reducing clause on the underinsured motorist coverage that is not ambiguous within the context of the entire policy." This appeal follows.

Discussion

¶ 6. The grant or denial of a declaratory judgment is addressed to the trial court's discretion. Jones v. Secura Ins. Co., 2002 WI 11, ¶ 19, 249 Wis. 2d 623, 638 N.W.2d 575. However, when the exercise of such discretion turns upon a question of law, we review the question de novo, benefiting from the trial court's analysis. Id. Here, the issue turns upon the construction of American Family's insurance contract, an exercise that presents a question of law we independently review. See Folkman, 264 Wis. 2d 617, ¶ 12. The goal in interpreting insurance contracts is to give effect to the parties' intent. Id., ¶ 16.

¶ 7. Before analyzing the policy, we first outline the policy's structure and content and trace the route the insured would have to take to get to the reducing clause. See Dowhower v. Marquez, 2004 WI App 3, ¶ 19, 268 Wis. 2d 823, 674 N.W.2d 906 (Dowhower III).

I. The Policy's Organization and Language

¶ 8. The "Wisconsin Family Car Policy" American Family issued to Bellile is relatively straightforward. By our count, it is thirteen pages long. The first and second pages comprise the declarations followed by a quick reference sheet on the third page. The fourth through eleventh pages constitute the original policy (numbered pages one through eight) and the underinsured motorist coverage is a two-page endorsement that appears at the end.

¶ 9. The first page of the declarations contains, among other things, lists for the policy's "COVERAGES AND LIMITS PROVIDED. The UIM coverage is the last listed coverage and appears as follows:

ENDORSEMENT — SEE BELOW UNDERINSURED MOTORISTS COVERAGE - BODILY INJURY ONLY
$150,000 EACH PERSON $300,000 EACH ACCIDENT

While nowhere in the declarations does it state that the UIM coverage is subject to a reducing clause, the top of the page states "PLEASE READ YOUR POLICY." Further, the bottom of the page contains three sentences, and part of one reads, "These declarations form a part of this policy." On the second page of the declarations appears the following:

• AGREEMENT
We agree with you, in return for your premium payment, to insure you subject to all the terms of this policy. We will insure you for the coverages and the limits of liability as shown in the declarations of this policy.

¶ 10. After the declarations page is the policy's quick reference sheet. Near the top of the reference sheet are the following statements:

This policy is a legal contract between you (the policyholder) and the company. The following Quick Reference is only a brief outline of some important features in your policy and is not the insurance contract. The policy details the rights and duties of you and your insurance company. Read your policy carefully.

The quick reference sheet then lists three sections — "If You Have An Auto Accident or Loss," "Agreement," and "Definitions" — and then lists the policy's six formal parts: (1) "Liability Coverage," (2) "Medical Expense Coverage," (3) "Uninsured Motorists Coverage," (4) "Car Damage Coverages," (5) "Emergency Road Service Coverage," and (6) "General Provisions." Because UIM coverage is dealt with in an endorsement, the UIM coverage is not listed in the quick reference sheet, nor is it dealt with in the eight pages of the policy's body.

¶ 11. Following the policy's body is the two-page UIM endorsement. The endorsement is designated in large bold-faced typecast as, "UNDERINSURED MOTORISTS (UIM) COVERAGE ENDORSEMENT - KEEP WITH POLICY." On the first page, before laying out additional definitions, the endorsement states:

This endorsement forms a part of the policy to which it is attached and replaces any Underinsured Motorists Coverage previously issued as a part of this policy. You have this coverage if Underinsured Motorists Coverage is shown in the declarations.
We will pay compensatory damages for bodily injury which an insured person is legally entitled to recover from the owner or operator of an underinsured motor vehicle. The bodily injury must be sustained by an insured person and must be caused by accident and arise out of the use of the underinsured motor vehicle.
We will pay under this coverage only after the limits of liability under any bodily injury liability bonds or policies have been exhausted by payment of judgements or settlements.

¶ 12. In the additional definitions section, "under-insured motor vehicle" is defined as "a motor vehicle which is insured by a liability bond or policy at the time of the accident which provides bodily injury liability limits less than the limits of liability of this Underin-sured Motorist coverage." However, neither "underin-sured motorist coverage" nor "reducing clause" is defined.

¶ 13. After the definitions come three exclusions, and then the "LIMITS OF LIABILITY" section. It states the UIM coverage limits of liability as shown in the declarations apply, subject to the following:

1. The limit for each person is the maximum for all person [sic] as the result of bodily injury to one person in any one accident.
2. Subject to the limit for each person, the limit for each accident is the maximum for bodily injury sustained by two or more persons in any one accident.

The section then states:

We will pay no more than these máximums no matter how many vehicles are described in the declarations, or insured persons, claims, claimants, policies, or vehicles are involved.
The limits of liability of this coverage may not be added to the limits of liability of any similar coverage under any other policy an insured persons or any member of an insured persons household may have.
We will pay only once for any damages or expenses payable under more than one coverage of this policy. Any damages or expenses paid under any other coverage of this policy are not eligible for payment under this coverage.

¶ 14. The reducing clause immediately follows this language and is located at the. top of the endorsement's second page. It reads:

The limits of liability of this coverage will be reduced by:
1. A payment made or amount payable by or on behalf of any person or organization which may be legally liable, or under any collectible auto liability insurance, for loss caused by an accident with an underinsured motor vehicle.
2. A payment under the Liability coverage of this policy.
3. A payment made or amount payable because of bodily injury under any workers' compensation or disability benefits law or any similar law.

With this organization and language in hand, we now turn to Bellile's arguments.

II. The UIM Provisions are Not Contextually Ambiguous

¶ 15. Bellile agrees that the reducing clause conforms with Wis. Stat. § 632.32(5) (i). Thus, the clause itself is not ambiguous or contrary to public policy. See Schmitz, 255 Wis. 2d 61, ¶ 61. We now consider whether the reducing clause is ambiguous in context of the entire insurance contract. See id., ¶ 75; Folkman, 264 Wis. 2d 617, ¶ 22.

¶ 16. Contextual ambiguity occurs where a provision's words or phrases, when read in context of the policy's other language, reasonably or fairly lead to more than one construction. Folkman, 264 Wis. 2d 617, ¶ 29. "The standard for determining a reasonable and fair construction is measured by the objective understanding of an ordinary insured." Id. We may not isolate a small part of the policy from the context of the whole policy to find ambiguity. Id., ¶ 21. We must also be cognizant of the fact that some ambiguity is unavoidable. Id., ¶ 18. Contextual ambiguity will only exist if the policy is so ambiguous, obscure, or deceptive that it "befuddles the understanding and expectations of a reasonable insured." Id., ¶ 20. This ambiguity "must be genuine and apparent on the face of the policy." Id., ¶ 29.

¶ 17. We first look to the declarations and the quick reference index. See Schmitz, 255 Wis. 2d 61, ¶¶ 62-63. Bellile notes the declarations lists UIM coverage of $150,000 and does not mention this coverage is subject to reduction by payments from other sources. See id., ¶ 62. Moreover, the quick reference sheet does not list UIM coverage.

¶ 18. We cannot disagree with Bellile's observations regarding the shortcomings of the declarations and quick reference index. Be that as it may, "a lack of immediate explanation of a policy's reducing clause is not dispositive." Dowhower III, 268 Wis. 2d 823, ¶ 20. This explanation is not required in the declarations because insurers cannot be expected to address every nuance of coverage in the declarations itself. Folkman, 264 Wis. 2d 617, ¶ 56.

¶ 19. Looking at the declarations as a whole, it does not present "inconsistent provisions, provisions that build up false expectations, [or] provisions that produce reasonable alternative meanings." Id., ¶ 31. We conclude the declarations provides adequate warning to the insured that the UIM coverage limits cannot be determined by looking solely at the declarations. At the top of the declarations' first page there appears in highlighted language, "PLEASE READ YOUR POLICY," and at the bottom of the page it states "[t]hese declarations form a part of this policy." Additionally, the declarations' second page states, "We agree with you, in return for your premium payment, to insure you subject to all the terms of this policy." (Emphasis added.) These provisions, which are not buried within the page, emphasize the declarations is but one component of the whole policy and that the rest of the policy must be referred to before a reasonable expectation of coverage can be formed.

¶ 20. Most importantly, just above where the UIM coverage is listed at $150,000 per person, $300,000 per accident, the policy states "ENDORSEMENT — SEE BELOW." Bellile argues a reasonable insured would understand the "ENDORSEMENT — SEE BELOW" language to refer to what was immediately below, namely that the UIM coverage was $150,000 per person and $300,000 per accident. See infra ¶ 9. However, in light of the other language in the declarations discussed above, we determine a reasonable insured would understand the "see below" language as directing him or her to see the endorsement itself, which is located below; in this case, at the end of the policy. Therefore, the declarations page is clear enough to alert a reasonable insured to refer to UIM endorsement for limitations on coverage. See Folkman, 264 Wis. 2d 617, ¶ 19.

¶ 21. We also conclude the quick reference index's failure to list UIM coverage, although inadvisable, does not force an insured to traverse an organizationally complex maze of a policy. See id., ¶ 55. Quite simply, finding the endorsement is not an arduous task. As indicated above, the policy's body is only eight pages long, and it is followed by the two-page UIM endorsement. The endorsement is clearly designated in highlighted type as "UNDERINSURED MOTORISTS (UIM) COVERAGE ENDORSEMENT - KEEP WITH POLICY" at the end of the policy. And once the insured finds this addition, he or she will notice that all the relevant provisions relating to UIM coverage, aside from the limit of liability (which is listed in the declarations), are contained within the two-page endorsement. What is more, the reducing clause is logically placed immediately after the "limits of liability" section. For these reasons, we conclude the policy's and UIM provisions' organization is not so ambiguous, obscure, or deceptive that it confounds the understanding and expectations of a reasonable insured. See id., ¶ 30.

¶ 22. We now turn to the endorsement's language. See id., ¶ 39. Bellile notes that the endorsement's limits of liability section states:

The limits of liability of this coverage as shown in the declarations apply, subject to the following:
1. The limit for each person is the maximum for all person [sic] as the result of bodily injury to one person in any one accident.
2. Subject to the limit for each person, the limit for each accident is the maximum for bodily injury sustained by two or more persons in any one accident.
We will pay no more than these máximums no matter how many vehicles are described in the declarations, or insured persons, claims, claimants, policies or vehicles are involved.

Bellile's objection to these provisions centers on American Family's use of the word "maximum." She explains that the lay dictionary definition of maximum is "the greatest quantity or value attainable in a given case," and "an upper limit allowed by law or other authority." Webster's Third New Int'l Dictionary 1396 (unabr. 1993). However, given the reducing clause, the maximum — or, the greatest quantity attainable — is never within reach. Because it is impossible to give both provisions their significance, Bellile argues contextual ambiguity results. See Maas v. Ziegler, 172 Wis. 2d 70, 80-81, 492 N.W.2d 621 (1992) (duty of court to construe contracts to avoid construction that renders one or more of its provisions meaningless).

¶ 23. The provisions do conflict, but they do not create ambiguity, let alone a sufficient degree of contextual ambiguity to engender objectively reasonable alternative meanings. See Folkman, 264 Wis. 2d 617, ¶ 30. As noted in Dowhower III, 268 Wis. 2d 823, ¶ 27, "Folkman dictates that when considering an alleged contextual ambiguity, we must look beyond a single clause or sentence and look at the contract as a whole." When the reducing clause and the limits of liability section are read together, a reasonable insured is told that his or her UIM coverage will be decreased pursuant to the reducing clause. In other words, the reducing clause unambiguously qualifies American Family's obligation to pay the maximum limits of liability contained in the immediately preceding paragraph and declarations. Therefore, the policy adequately sets forth that the insured is purchasing a fixed level of UIM coverage that will be arrived at by combining payments made from all sources. See Dowhower v. West Bend Mut. Ins. Co., 2000 WI 73, ¶ 33, 236 Wis. 2d 113, 613 N.W.2d 557 (Dowhower II); see also Commercial Union Midwest Ins. Co. v. Vorbeck, 2004 WI App 11, ¶¶ 41-42, 674 N.W.2d 665 (similar policy language found not contextually ambiguous).

By the Court. — Judgment affirmed.

HOOVER, RJ.

¶ 24. (concurring). I think the policy in our case, while not presenting an organizationally complex "maze," is "plainly contradictory" in exactly the same manner as the policy in Badger Mut. Ins. Co. v. Schmitz, 255 Wis. 2d 61, 647 N.W.2d 223. The question is, is this enough? Are the "false signals," Folkman v. Quamme, 2003 WI 116, ¶ 55, 264 Wis. 2d 617, 665 N.W.2d 857, the policy sends to Bellile sufficient to avoid the reducing clause, or in light of Folk-man, is more needed? Given the tenor of Folkman, I agree with the majority and our other post -Folkman cases that the inconsistencies partially driving the Schmitz decision, as explicated in Folkman, would now, in context, be seen by our supreme court as only benignly ambiguous. Thus, the supreme court would conclude, these inconsistencies would not engender objectively reasonable alternative meanings.

¶ 25. Folkman carefully compared the policy before it to that in Schmitz. Schmitz dealt with a lengthy and complex insurance policy. But, according to Folk-man, this was not the exclusive basis upon which the Schmitz court held that the policy's reducing clause was inoperative. Rather, Folkman further teaches that "a policy should avoid inconsistent provisions, provisions that build up false expectation, and provisions that produce reasonable alternative meanings." Folkman, 264 Wis. 2d 617, ¶ 31. However, "inconsistencies in the context of a policy must be material to the issue in dispute and be of such a nature that a reasonable insured would find an alternative meaning." Id., ¶ 32.

¶ 26. In comparing the Folkman circumstances to those in Schmitz, the supreme court noted in the latter case that "a reasonable insured would likely believe that the purchase of, say, $200,000 in underinsured motorist coverage would lead to a $200,000 payment from the insurer depending on the insured's level of damages" because this was the limit stated in the declarations. Folkman, 264 Wis. 2d 617, ¶ 51. But, as the Folkman court noted, "because the policy contained a reducing clause, the insurer would never pay $200,000 to the insured ...." Id. The Folkman court went on to observe that the effect of the reducing clause was only made clear in the reducing clause itself, with no explanation. Id., ¶ 53. This appears to be material because the Folkman court goes on to note that the UIM page contained a "typical limits of liability provision followed immediately after the schedule for underinsured motorist coverage. It stated, among other things, 'This is the most we will pay,' implying that it would pay the policy limits, although it never would." Id. Thus, the Folkman court observed, Schmitz concluded that the policy there at issue was "a maze that is organizationally complex and plainly contradictory." Id., ¶ 55.

¶ 27. As implied, I think at the core of Folkman is the supreme court's tacit retreat from some of the very considerations that led to the result in Schmitz, its painstaking references to that case notwithstanding. Thus, even though our case presents some features similar to the Schmitz case, I agree with the majority that the policy at issue is not ambiguous under Folk-man.

        See Commercial Union Midwest Ins. Co. v. Vorbeck, 2004 WI App 11, ¶ 41, 674 N.W.2d 665 (concluding no contextual ambiguity resulted); Dowhower v. Marquez, 2004 WI App 3, ¶ 29, 268 Wis. 2d 823, 674 N.W.2d 906 (Dowhower IIP (holding contextual ambiguity occurred); Van Erden v. Sobczak, 2004 WI App 40, ¶ 37 (concluding no contextual ambiguity was produced).

       In the meantime, the Wisconsin Supreme Court decided Folkman v. Quamme, 2003 WI 116, 264 Wis. 2d 617, 665 N.W.2d 857, which "clarified [Badger Mutual Insurance Co. v. Schmitz, 2002 WI 98, 255 Wis. 2d 61, 647 N.W.2d 223] and the analytical framework that courts are to apply in cases alleging contextual ambiguity in insurance policies." See Dowhower III, 268 Wis. 2d 823, ¶ 2. After Folkman's release, the parties filed letter briefs to adjust their arguments.
      This case had been placed on hold pending the release of similar cases from District I, Van Erden, 2004 WI App 40; and District II, Dowhower III, 2004 WI App 3, and Vorbeck, 2004 WI App 11; and is being released simultaneously with District III, Gohde v. MSI Insurance Co., 2004 WI App 69.

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


source: Caselaw Access Project

author: HOOVER, RJ.

license: Public Domain

text:
    Donald R. Binsfeld and Cynthia M. Binsfeld, Plaintiffs-Appellants, Regent Insurance Company, Involuntary-Plaintiff-Co-Appellant, v. Donald S. Conrad and ABC Insurance Company, Defendants-Respondents, John P. Mortensen, Anthony F. Mortensen, d/b/a Mortensen Properties, and JKL Insurance Company, Defendants.
    Court of Appeals

      No. 03-1077.

      Submitted on briefs December 1, 2003.

    Decided March 23, 2004.

    2004 WI App 77
    (Also reported in 679 N.W.2d 851.)

      On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of George Burnett and Lieb-mann, Conway, Olejniczak & Jerry, S.C., of Green Bay.
    On behalf of the defendant-respondent Donald Conrad, the cause was submitted on the brief of Sandra L. Hupfer, Christina L. Peterson, and Stellpflug, Janssen, Hammer, Kirschling & Bartels, S.C., of DePere.
    Before Cane, C.J., Hoover, RJ., and Peterson, J.

       Petition to review denied 6-8-04.

   HOOVER, RJ.

¶ 1. Donald Binsfeld appeals a summary judgment concluding that Donald Conrad was not liable under Wisconsin's safe place statute, Wis. Stat. § 101.11, for Binsfeld's work-related injuries. Binsfeld also appeals the circuit court's denial of a motion for default judgment, arguing that Conrad did not show excusable neglect sufficient to justify filing his answer four days after the deadline. We conclude that the circuit court appropriately exercised its discretion by denying the default judgment and that the safe place statute does not apply to Conrad. We therefore áffirm the judgment.

Background

¶ 2. Conrad owned land near Abrams, Wisconsin, abutting U.S. Hwy. 41. When Conrad purchased the land in 1991 from David Dennison, an outdoor advertising sign was already in place. John and Anthony Mortensen, d/b/a Mortensen Properties, owned the sign. They purchased the sign from Lawrence Verhey-den in 1989, approximately four months after Verhey-den signed a ten-year lease with Dennison. Verheyden conveyed the lease to Mortensen.

¶ 3. On July 24, 1998, while working on the sign for Jones Sign Company, Binsfeld was electrocuted by 14,000 volts, falling forty-five feet to the ground. He suffered 75-80% disability. In addition to his various physical problems, he also suffers memory loss and depression.

¶ 4. An engineering analysis conducted for Bins-feld revealed at least fifteen structural problems with the sign and at least nine OSHA violations. Binsfeld filed suit July 5, 2001, naming Conrad as a defendant and alleging negligence by maintaining a defective sign on his property. The Mortensens were added after discovery revealed they owned the sign.

¶ 5. Binsfeld agreed to an extension of the time for .filing Conrad's answer. When the answer was filed four days after the extension expired, Binsfeld filed a motion to strike the answer and seeking a default judgment. The circuit court denied the motion, concluding that Conrad's neglect was excusable and the interests of justice required the case to proceed to trial.

¶ 6. Conrad then filed a motion for summary judgment, claiming he had no duty to Binsfeld at common law. Binsfeld's brief opposing the summary judgment raised the applicability of the safe place statute. Conrad responded that he was not an owner of a place of employment.

¶ 7. The circuit court concluded that Binsfeld failed to state a claim upon which relief could be granted relative to Conrad. The court dismissed Conrad from the case. Binsfeld appeals, arguing that the safe place statute applies to Conrad.

Discussion

¶ 8. We review summary judgments de novo, using the same methodology as the circuit court. See Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315, 401 N.W.2d 816 (1987). This particular case presents a question of statutory interpretation, which we also review de novo. Hutson v. State Personnel Comm'n, 2003 WI 97, ¶ 31, 263 Wis. 2d 612, 665 N.W.2d 212.

Applicability of the Safe Place Statute

¶ 9. The first issue is whether Conrad is subject to the safe place statute, Wis. Stat. § 101.11(1), which creates an "Employer's duty to furnish safe employment and place."

Every employer .. . shall furnish a place of employment which shall be safe for employees therein and for frequenters thereof.... Every employer and every owner of a place of employment... shall so construct, repair or maintain such place of employment... as to render the same safe. (Emphasis added.)

¶ 10. Wisconsin Stat. § 101.01 provides relevant definitions.

(4) "Employer" means any person ... having control or custody of any . .. place of employment....
(10) "Owner" means any person ... having ownership, control or custody of any place of employment....
(11) "Place of Employment" includes every place ... and the premises appurtenant thereto where either temporarily or permanently any industry, trade or business is carried on, or where any process or operation, directly or indirectly related to any industry, trade or business is carried on, and where any person is, directly or indirectly, employed by another for direct or indirect gain or profit.... (Emphasis added.)

¶ 11. Binsfeld argues that his place of employment encompasses both Mortensen's sign and Conrad's appurtenant land and that Conrad is negligent because he maintained a defective structure on his property. We reject Binsfeld's contention that land that is merely appurtenant to a "place ... where ... business is carried on" is a "place of employment."

¶ 12. We agree with Binsfeld that the sign was his "place" of employment, but we consider it to be wholly separate from the land. This may be a slight matter of semantics, because the sign must be installed in the ground somewhere. However, the sign is Mortensen's personal property, is wholly removable from the land, and predates Conrad's purchase of the land.

¶ 13. We also accept, for purposes of this case, that Conrad's land is literally appurtenant to Mortensen's sign. However, we reject Binsfeld's premise that this geographic proximity is itself sufficient to render Conrad's land a "place of employment." The safe place statute contemplates that both the "place" and appurtenant premises will be subject to ownership, control, or custody of the same employer or owner.

¶ 14. An "owner" must have ownership, custody, or control of the place of employment — that is, every "place" and the premises appurtenant thereto. See Wis. Stat. § 101.01(10) and (11). Thus, an owner of appurtenant land who does not also have ownership, custody, or control of the "place" cannot be liable for injuries sustained at the "place." There is no dispute that Conrad exercised no ownership, custody, or control over Mortensen's sign.

¶ 15. Imposing safe place liability on the owner of appurtenant premises simply because of the physical proximity would effectively make that owner an insurer for the "place," a duty the safe place statute never intended to create. See Dykstra v. Arthur G. McKee & Co., 92 Wis. 2d 17, 26, 284 N.W.2d 692 (Ct. App. 1979). For the owner of appurtenant premises to be liable, the injury would have to occur on the premises themselves.

¶ 16. This reasoning is consistent with other safe place cases. In Hansen v. Schmidman Props., 16 Wis. 2d 639, 115 N.W.2d 495 (1962), where Hansen was injured on the appurtenant premises, the supreme court declined to impose liability because the employer at the "place" had neither control nor custody of the appurtenant area. Id. at 642. Conversely, the owner of appurtenant premises should not be held liable if he or she does not also have ownership, control, or custody of the "place" of employment because the owner is not in a position to prevent the hazards that render the "place" unsafe.

¶ 17. In Schwenn v. Loraine Hotel Co., 14 Wis. 2d 601, 111 N.W.2d 495 (1961), the employer did have control and custody of the appurtenant premises, so liability was assessed even though there was a different owner. Thus, there would be liability if the owner of the appurtenant premises also had ownership, control, or custody of the "place."

¶ 18. Because Conrad does not meet the statutory definition of an owner of a place of employment, the safe place statute does not apply. Indeed, Binsfeld himself notes that it "goes without saying that one who neither owns nor controls a place of employment has no responsibility under the Act for the simple reason that the language of the Act does not impose it." Summary judgment was proper in this case.

Motion for Default Judgment

¶ 19. The second issue is whether the circuit court erred by denying Binsfeld's motion for default judgment. Binsfeld complains that Conrad failed to timely file his answer and failed to demonstrate excusable neglect. Conrad responds that he should not be blamed for the late filing because the insurance company was confused, in part by Binsfeld's counsel.

¶ 20. A circuit court's decision whether to grant default judgment is reviewed under an erroneous exercise of discretion standard. Rutan v. Miller, 213 Wis. 2d 94, 101, 570 N.W.2d 54 (Ct. App. 1997). A discretionary decision will be affirmed if it is based on the facts of record and the appropriate law. Hartung v. Hartung, 102 Wis. 2d 58, 66, 306 N.W.2d 16 (1981). Thus, the record on appeal should reflect the circuit court's reasoned application of the appropriate legal standards to the relevant facts. Hedtcke v. Sentry Ins. Co., 109 Wis. 2d 461, 471, 326 N.W.2d 727 (1982). Findings of fact are not disturbed unless they are clearly erroneous. Wis. Stat. § 805.17(2). If the circuit court sets forth inadequate reasons for its decisions, we may review the record ourselves to determine whether the court exercised its discretion and whether the facts provide support for the determination. Hedtcke, 109 Wis. 2d at 471.

¶ 21. Binsfeld argues that the court erred when it failed to grant his motion for default judgment because Conrad failed to demonstrate excusable neglect. Bins-feld also argues that the record shows the court failed to address the appropriate legal standard and that the record fails to support the circuit court's determination that the interests of justice required denying the motion.

¶ 22. The summons and complaint were served July 16, 2001, giving Conrad until August 30 to file an answer. On August 28, Binsfeld agreed to a twenty- or thirty-day extension. Assuming thirty days were granted, the due date became October 1 because of an intervening weekend. Conrad's answer was filed October 5. There is no dispute regarding these basic facts.

¶ 23. A party filing its answer late must demonstrate excusable neglect for the delay. Wis. Stat. § 801.15(2)(a). Excusable neglect is conduct that "might have been the act of a reasonably prudent person under the same circumstances." Hedtcke, 109 Wis. 2d at 468 (citation omitted). The law, however, views default judgments with disfavor. Rutan, 213 Wis. 2d at 106. Thus, the circuit court may also look beyond the causes of neglect to the interests of justice in deciding whether to grant a default. See id. at 101.

¶ 24. The circuit court, after hearing argument, ruled:

[I]n the totality of the circumstances ... the interest of justice causes me to proceed in this case .... [Ejxcusable neglect, although it's defined, sometimes it's not as well settled or objective as can be. I'm satisfied when I look at all the circumstances of the case, that it warrants a denial of the motion for default judgment....

While this oral pronouncement is brief, we are satisfied that it reflects the court's consideration of the appropriate legal standard, excusable neglect by the dilatory party. Indeed, the court noted in its written order that it determined there was excusable neglect. The oral ruling also reflects that "the circuit court must go further than considering the causes for the neglect. The interests of justice require the circuit court to be aware of the effects of an order denying or granting relief." Hedtcke, 109 Wis. 2d at 469.

¶ 25. The court did not, however, apply the facts explicitly to these standards, so we review the record to see if, indeed, "the totality of the circumstances" supports the court's decision. See id. at 471.

¶ 26. It is undisputed that Binsfeld agreed to the extension that made the new filing deadline October 1. He argues several reasons why Conrad should not have had to request the extension and why that delay was unreasonable. However, because Binsfeld granted the deadline as a courtesy, we consider this invited error and will not review it. See Zindell v. Central Mut. Ins. Co., 222 Wis. 575, 582, 269 N.W. 327 (1936). Thus, we need only examine the delay between October 1 and October 5.

¶ 27. Conrad had insurance policies for various properties through different companies, and his insurance agent had difficulty locating the appropriate insurer for the property in question. The first insurance company notified of the claim was not the insurer. When the actual insurer, Germantown Mutual Insurance Company, was notified of the claim on September 25, its representative, Ed Kyle, attempted to verify the answer's due date, calling Binsfeld's attorney, George Burnett. Kyle claims Burnett promised to get back to him with the deadline but never did. In the meantime, Kyle retained counsel, who received a copy of the summons and complaint on October 2.

¶ 28. Counsel claims to have spoken on October 3 to Burnett's assistant, who said she would check on the due date, but did not think Burnett was concerned about it. On October 4, Burnett called counsel to inform her the extension had passed, although he did not know what he. was going to do about it. On October 5, Germantown filed an answer on its and Conrad's behalf.

¶ 29. Burnett claims that he told Kyle in their first conversation that an extension of approximately thirty days had been granted and that Binsfeld would not agree to more time. Further, while Conrad argues that thirty-four days is approximately thirty days, Bin-sfeld responds that "approximately thirty days" was the best characterization for the twenty- to thirty-day extension.

¶ 30. It is apparent to us that the "totality of the circumstances" to which the circuit court referred considers this confusion to be the primary cause of the delay. The court took both accounts at face value and concluded there was excusable neglect because of ineffective communication. Conrad filed his answer four days after the due date. Under his account, that filing date was the day after he learned the deadline had passed. This is reasonably prompt. See Rutan, 213 Wis. 2d at 102 (court should consider prompt remedial action when assessing the interests of justice). In addition, the slightly late filing does not appear to have impacted the dates of any subsequent proceedings including the trial, and Binsfeld claims no prejudice from the delay.

¶ 31. We may also affirm for reasons other than those relied upon by the circuit court. Liberty Trucking Co. v. DILHR, 57 Wis. 2d 331, 342, 204 N.W.2d 457 (1973). Although the circuit court did not address it specifically, an additional consideration for the interests of justice is whether there is a meritorious defense to the claim. See Shirk v. Bowling, Inc., 2001 WT 36, ¶ 19, 242 Wis. 2d 153, 624 N.W.2d 375. Because we have concluded as a matter of law that the safe place statute is inapplicable to Conrad, his defense that he is not an employer is meritorious and therefore justice would not be served by imposition of a default judgment.

By the Court. — Judgment affirmed.

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

       Because the term "place of employment" is defined as "every place .. . and the premises appurtenant thereto," when we wish to refer to the place of employment exclusive of the appurtenant premises, we will use "place" in quotation marks.

       Binsfeld does not contend that Conrad is an employer under the statute.

       We note there is no requirement that ownership, custody, or control need be exclusive to any singular owner or employer. Schwenn v. Loraine Hotel Co., 14 Wis. 2d 601, 607, 111 N.W.2d 495 (1961).

       Binsfeld also frames the issue on appeal as whether a landlord like Conrad may delegate responsibility under the safe place statute and avoid liability for structural defects on his property. However, non-delegability depends on there first being a duty. Because we conclude that the safe place statute does not apply to Conrad, he has no duty he can be prohibited from delegating.

       The only difference between an employer and an owner for safe place purposes is that an owner has "ownership, control or custody" of a place of employment whereas an employer need only exercise control or custody over the place of employment. Wis. Stat. §§ 101.01(4) and (10).

       Even then, the safe place statute might not apply if the premises do not qualify as a place of employment. Instead, the ordinary negligence standard would apply.

       This is not to say that landowners with hazardous conditions on their land will never be liable for injuries related to those conditions. In such situations, the common law standard of negligence probably applies. We note that in his brief supporting his motion for summary judgment, Conrad argued that ordinary negligence could not be found because the foreseeability of Binsfeld's injuries was too remote. Binsfeld never responded to this argument in his brief opposing summary judgment, nor are we presented with any argument on the common law standard on appeal.

       If, however, the circuit court does not find excusable neglect, it is precluded from considering the interests of justice. Williams Corner Investors, LLC v. Areawide Cellular LLC, 2004 WI App 27, ¶ 19, 676 N.W.2d 168.


author: CANE, C.J.

text:
    State of Wisconsin, Plaintiff-Respondent, v. Michael A. DeLain, Defendant-Appellant.

    Court of Appeals

      No. 03-1253-CR.

      Submitted on briefs February 3, 2004.—

      Decided March 23, 2004.

    2004 WI App 79
    (Also reported in 679 N.W.2d 562.)

      On behalf of the defendant-appellant, the cause was submitted on the briefs of Robert R. Henak of Henak Law Office, S.C. of Milwaukee.
    On behalf of the plaintiff-respondent, the cause was submitted on the brief of Peggy A. Lautenschlager, attorney general, and Christopher G. Wren, assistant attorney general.
    Before Cane, C.J., Hoover, EJ., and Peterson, J.

       Petition to review granted 6-8-04.

   CANE, C.J.

¶ 1. Michael DeLain appeals from a judgment of conviction after a jury trial for two counts of sexual exploitation of a patient by a therapist and one count of obstructing justice and from an order denying postconviction relief. He raises four arguments: (1) there is insufficient evidence to sustain one of the counts of sexual abuse by a therapist; (2) his trial counsel was ineffective; (3) the prosecutor's "golden rule" argument in closing arguments mandates a new trial; and (4) a new trial is warranted because the real controversy has not been fully tried or justice has miscarried. We affirm the judgment and the order.

Background

¶ 2. DeLain was a psychologist in Green Bay whose eleven-year practice focused on helping young people with emotional problems. Jennifer E, a sixteen-year-old child, sought counseling from DeLain to address relationship problems with her father and her adult boyfriend. DeLain met with Jennifer four times in April 2001. After the fourth session, on April 25, Jennifer told her boyfriend and her family that DeLain sexually assaulted her and she no longer wanted to see him. Jennifer and her parents went to the police, who suggested that Jennifer return to another counseling session while she secretly wore a wire. On May 2, she did so and that session was both video and audio recorded.

¶ 3. The State charged DeLain with four crimes: two counts of sexual abuse by a therapist on April 25 and May 2, contrary to Wis. Stat. § 940.22(2); one count of sexual intercourse with a child age sixteen or older on April 25, contrary to Wis. Stat. § 948.09; and one count of obstructing justice, contrary to Wis. Stat. § 946.41(1). At trial, Jennifer recounted the numerous sexual contacts DeLain had with her during the April 25 and May 2 sessions. DeLain's defense was that Jennifer fabricated the allegations because DeLain indicated he was required to report that she was having sexual relations with an adult to the authorities.

¶ 4. The jury largely believed Jennifer F. and convicted DeLain of both counts of sexual abuse by a therapist as well as the obstruction of justice charge, but acquitted him of the sexual intercourse with a child sixteen or older charge. After sentencing, DeLain filed a motion for postconviction relief seeking an order vacating his convictions. He appeals the denial of that motion.

Discussion

I. Sufficiency of the Evidence on Count I

¶ 5. DeLain first argues there was insufficient evidence to prove he had sexual contact with Jennifer F. on May 2, contrary to Wis. Stat. § 940.22(2). Section 940.22(2) states:

Any person who is or who holds himself or herself out to be a therapist and who intentionally has sexual contact with a patient or client during any ongoing therapist-patient or therapist-client relationship, regardless of whether it occurs during any treatment, consultation, interview or examination, is guilty of a Class C felony. Consent is not an issue in an action under this subsection. (Emphasis added.)

¶ 6. He claims that because Jennifer F. was at the May 2 counseling session at law enforcement's request, the statutorily required "ongoing therapist-patient... relationship" no longer existed. See id. He contrasts a genuine relationship from that of a "feigned relationship," noting the latter is what was present on May 2. DeLain argues it is not enough that he merely believed this relationship continued because "a 'relationship' is a two-way street." Thus, he reasons, because Jennifer F. was present not as a patient but as an agent of the police, the State cannot prove there was an ongoing therapist-patient relationship.

¶ 7. DeLain also supports his argument by referencing federal conspiracy law. DeLain observes a conspiracy requires an agreement between two or more people to commit an unlawful act. See, e.g., United States v. Mahkimetas, 991 F.2d 379, 383 (7th Cir. 1993). Thus, "there is no real agreement when one 'conspires' to break the law only with government agents or informants." Id. DeLain observes it is undisputed that Jennifer F. attended the May 2 counseling session as a police agent hoping to obtain incriminating evidence. Therefore, he argues the therapist-patient relationship no longer existed.

¶ 8. The State counters with three arguments. First, it maintains the statute should be construed to extend the relationship as a matter of law until one of the parties explicitly advises the other that the relationship has ended. The State claims that to conclude otherwise would impede the statute's purpose of punishing therapists who do not abstain from sexual contact with patients. Second, because the statute provides that "[c]onsent is not an issue in an action under this subsection," and because the statute does not require the sexual contact to occur during "treatment, consultation, interview or examination," the State argues the statute is effectively a strict-liability crime. Third, the State argues DeLain's reliance on federal conspiracy law is misplaced because Wisconsin allows for a "unilateral conspiracy," that is, a conspiracy where two people agree to commit an unlawful act but one of those persons, cooperating with law enforcement officers, feigns agreement. See State v. Sample, 215 Wis. 2d 487, 500, 573 N.W.2d 187 (1998).

¶ 9. Thus, the State claims a conspiracy analogy actually supports its position. In any event, the State argues the evidence is sufficient to sustain the conviction on any of these grounds. We agree with the State that there is sufficient evidence to sustain the conviction, but do so for a different reason.

¶ 10. Both parties have overlooked the fact that Wis. Stat. § 940.22(2) proscribes therapists from "intentionally" having sexual contact with a patient or client during any ongoing therapist-patient relationship. Intentionally is a term of art when used in criminal statutes, see Wis. Stat. § 939.23(1), and is defined as "mean[ing] that the actor either has a purpose to do the thing or cause the result specified, or is aware that his or her conduct is practically certain to cause that result." Wis. Stat. § 939.23(3). The definition further provides that "the actor must have knowledge of those facts which are necessary to make his or her conduct criminal and which are set forth after the word 'intentionally.' " Id. (emphasis added).

¶ 11. In Wis. Stat. § 940.22(2), the words "patient" and "ongoing therapist-patient... relationship" follow the word "intentionally." Thus, in order for DeLain to have committed the crime, he must have known two facts: (1) that Jennifer F. was a "patient" and (2) that he and Jennifer F. had an "ongoing therapist-patient relationship." But to "know" these facts for purposes of the criminal code "requires only that the actor believes that the specified fact exists." Wis. Stat. § 939.23(2) (emphasis added).

¶ 12. Therefore, we reject DeLain's argument that it was not enough for the State to prove he believed Jennifer F. was a patient and that he believed the last session was part of the continued therapist-patient relationship. At trial, DeLain stipulated that he was performing psychotherapy at all his sessions with Jennifer. It is also undisputed that at these sessions, DeLain believed Jennifer was a patient and believed these sessions were part of an ongoing therapist-patient relationship. Thus, even though Jennifer feigned her role as a patient at the last session, because the undisputed evidence is that DeLain believed the specific fact existed, namely that Jennifer was a patient and this was part of the ongoing therapist-patient relationship, any acts that occurred during this session were during an ongoing therapist-patient relationship as those terms are used in the statute. Consequently, we are satisfied the evidence is sufficient to sustain the conviction for sexual exploitation of a patient by a therapist that occurred on May 2.

II. Ineffective Assistance of Counsel

¶ 13. DeLain next claims he was denied effective assistance of counsel. "To prevail on an ineffective assistance of counsel claim, the defendant must show that counsel's actions or inaction constituted deficient performance and that the deficiency caused him prejudice." State v. Brunette, 220 Wis. 2d 431, 445, 583 N.W.2d 174 (Ct. App. 1998). "Counsel's conduct is constitutionally deficient if it falls below an objective standard of reasonableness." State v. Thiel, 2003 WI 111, ¶ 19, 264 Wis. 2d 571, 665 N.W.2d 305. To prove prejudice, the defendant must show that "there is a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different. A reasonable probability is a probability sufficient to undermine confidence in the outcome." Id., ¶ 20 (citation omitted.)

¶ 14. We are highly deferential to counsel's performance and "must avoid the 'distorting effects of hindsight.'" Id., ¶ 19 (citation omitted.) We are also guided by the principle that counsel's performance "need not be perfect, indeed not even very good, to be constitutionally adequate." Id.

¶ 15. A claim of ineffective assistance of counsel presents a mixed question of law and fact. Id., ¶ 21. We uphold the circuit court's findings of fact unless they are clearly erroneous. Id. Findings of fact include "the circumstances of the case and the counsel's conduct and strategy." Id. Whether counsel's performance is constitutionally ineffective is a question of law we review de novo. Id. DeLain has not contested any material findings of fact. Thus, we turn to whether his counsel was constitutionally ineffective.

¶ 16. DeLain claims his counsel was constitutionally deficient on two grounds: first, counsel failed to properly investigate and present evidence of exculpatory prior consistent statements DeLain made to coworkers; second, counsel failed to investigate and present expert evidence regarding the appropriateness of DeLain's therapy techniques.

¶ 17. As to the first ground, DeLain claims his counsel's failure to investigate witnesses who could corroborate his defense — that Jennifer F. fabricated the allegation because DeLain was going to report her to social services for having sex with an adult — was unreasonable. DeLain points out that his therapy notes for April 25, 2001, indicated he consulted with Dr. Valerie DeLain (DeLain's ex-wife who is a clinical psychologist) and Kristi Kovacs (a drug and alcohol counselor DeLain worked with previously). At the Machner hearing, Valerie testified this consultation involved DeLain telling her how Jennifer F. threatened to accuse him of molesting her if he reported her sexual relationship with her adult boyfriend to authorities. Kovacs also testified to a similar conversation she had with DeLain. DeLain's counsel, however, did not present this evidence at trial because he never interviewed either of these witnesses regarding the consultation. Without producing these prior consistent statements at trial, DeLain claims his counsel performed deficiently.

¶ 18. DeLain's counsel testified that DeLain never revealed to him what he told Valerie or Kovacs, let alone that they could confirm Jennifer F.'s threats. In fact, the only thing DeLain told his counsel was that he told his co-workers and Kovacs he had a weird, strange, or odd session with Jennifer. He never told counsel there were witnesses who could confirm, through his prior statements, Jennifer's threats. DeLain's counsel interviewed all of DeLain's co-workers, which included Valerie, for a total of nearly eight hours. At no point did DeLain's counsel receive any intimation that these people had any relevant information regarding the allegations. In hindsight, it could be argued DeLain's counsel may have explored this area more, but when all his client told him was that he had a strange or odd session, it is not unreasonable for counsel to assume there would be little else to explore. Under these circumstances, DeLain's trial counsel did not perform deficiently.

¶ 19. DeLain also claims his trial counsel was ineffective because he failed to present expert evidence regarding the appropriateness of DeLain's therapy approach. DeLain utilizes "provocative therapy" in counseling youths. DeLain observes his counsel knew the jury could view DeLain's provocative therapy techniques as inappropriate. To combat the jury's adverse emotional reaction, DeLain argues it was incumbent on his counsel to produce independent expert testimony to support the appropriateness of his therapy techniques. We disagree.

¶ 20. DeLain's counsel indicated his trial strategy was to avoid expert testimony as much as possible. Counsel indicated he was concerned how jurors would react to DeLain's therapy techniques and did not want them to pass judgment on his techniques or decide the case on whether DeLain was a good psychologist. In fact, to prevent the State from offering expert testimony in its case-in-chief, DeLain's counsel stipulated that DeLain was engaged in "psychotherapy" during the relevant time periods. This was a reasonable trial strategy. We will not "second-guess a trial attorney's 'considered selection of trial tactics or the exercise of a professional judgment in the face of alternatives that have been weighed by trial counsel.' A strategic trial decision rationally based on the facts and the law will not support a claim of ineffective assistance of counsel." State v. Elm, 201 Wis. 2d 452, 464-65, 549 N.W.2d 471 (Ct. App. 1996) (citations omitted).

¶ 21. But DeLain claims his counsel knew he was going to testify, and that part of his testimony would relate to the appropriateness of his techniques, thereby opening the door to the whole provocative therapy issue for the State to explore in rebuttal. Therefore, DeLain argues his counsel should have had an expert ready to refute the State's rebuttal expert.

¶ 22. Prior to trial, DeLain's counsel consulted with two forensic psychologists. Both were troubled by what they saw of DeLain's techniques on the videotape but were of the opinion that DeLain was nonetheless performing psychotherapy and was trying to help Jennifer F. One of these witnesses developed a scheduling conflict and was unavailable to testify at trial, but the other was ready and able to testify. DeLain's counsel indicated he did not use this witness because he felt he did an effective job of impeaching the State's rebuttal expert witness. On cross-examination, DeLain's counsel showed the State's expert had not taken any courses, received any training, or read any literature on provocative therapy. In light of this cross-examination, we conclude DeLain's counsel acted reasonably as part of his trial strategy by not calling an expert to refute the State's rebuttal expert. DeLain was not denied effective assistance of counsel.

III. "Golden Rule" Comment

¶ 23. DeLain next claims the prosecutor's use of a "golden rule" argument during his closing argument requires reversal. Generally, a golden rule argument involves asking the jurors to place themselves in the position of someone claiming injury or damage and asking the jurors to determine what they would want as compensation. See Featherly v. Continental Ins. Co., 73 Wis. 2d 273, 284, 243 N.W.2d 806 (1976). In a criminal case, a golden rule argument asks the jurors to place themselves in the victim's shoes. See Rodriguez v. Slattery, 54 Wis. 2d 165, 170, 194 N.W.2d 817 (1972). These statements are not allowed because they appeal to the jurors' sympathy for persons who have been injured or victimized by a crime.

¶ 24. In closing, the prosecutor criticized one of DeLain's defenses — that Jennifer F.'s allegations were more consistent with fabrications in light of her poor body image than with a true account of sexual assault — by stating:

Finally, I'll end on what I consider to be the most ridiculous argument that I've heard in this case and it's also - it's sort of insulting, too, and that's the breast argument. Are you gonna accept the notion that because [Jennifer E] doesn't relate in her testimony any breast touching she must be lying because she has a poor self-image about her breasts and, therefore, wouldn't say anything about breast touching. Does that make any sense to you at all. Is that anything more than just a - a - a desperate attempt to - to - to mislead you and to - to get you to think about anything but the evidence in this case. How do you make that - how do you think that makes [Jennifer FJ feel sitting in the courtroom listening to that. (Emphasis added.)

DeLain argues this was an improper golden rule argument that so infected the trial with unfairness such that the conviction results in a denial of due process. See State v. Lettice, 205 Wis. 2d 347, 352, 556 N.W.2d 376 (Ct. App. 1996). Thus, he claims the trial court erred by failing to grant his motion to dismiss. We disagree.

¶ 25. The decision of whether to grant á motion for a mistrial lies within the trial court's discretion. State v. Ross, 2003 WI App 27, ¶ 47, 260 Wis. 2d 291, 659 N.W.2d 122. "The trial court must determine, in light of the whole proceeding, whether the claimed error was sufficiently prejudicial to warrant a new trial." Id. (citation omitted). "The denial of a motion for mistrial will be reversed only on a clear showing of an erroneous use of discretion by the trial court." Id.

¶ 26. Following the State's brief remark, DeLain's counsel immediately objected and the prosecutor promptly withdrew the comment and apologized for making the statement. In fact, the State later urged the jury to weigh its decision solely on the evidence and to not be swayed by emotion. The circuit court instructed the jury to "not be swayed by sympathy, prejudice or passion. You will be very careful and deliberate in weighing the evidence. I charge you to keep your duty steadfastly in mind and as upright citizens to render a just and true verdict." Because of the isolated nature of the remark, the State's immediate response, and because juries are presumed to follow the instructions, State v. Smith, 170 Wis. 2d 701, 719, 490 N.W.2d 40 (Ct. App. 1992), we conclude the trial court did not erroneously exercise its discretion by denying the motion for a mistrial.

IV Discretionary Reversal

¶ 27. Lastly, DeLain argues we should exercise our discretionary power of reversal to grant him a new trial because the real controversy was not fully tried or because justice has miscarried. See Wis. Stat. § 752.35. We exercise our power of discretionary reversal in exceptional cases. Vollmer v. Luety, 156 Wis. 2d 1, 12-13, 456 N.W.2d 797 (1990). For this court to reverse on the theory that the matter has not been fully tried, we need not determine whether the trial's outcome would be different on retrial. Id. at 19. Instead, for there to be a miscarriage of justice, "an appellate court must first make a finding of substantial probability of a different result on retrial." Id.

¶ 28. Under the circumstances of this case, we are not persuaded that the real controversy has not been fully tried or that there is a substantial probability there would be a different result on retrial.

By the Court. — Judgment and order affirmed.

       All references to the Wisconsin Statutes are to the 1999-2000 version unless otherwise noted.

        State v. Machner, 92 Wis. 2d 797, 285 N.W.2d 905 (Ct. App. 1979).

       It was undisputed at the postconviction proceedings that in provocative therapy, the therapist uses humor both to sensitize and desensitize the client to problematic cognitive, affective, and behavioral patterns. This is the key to provocative therapy — humor, jocular, whimsical, caring, supportive humor.


text:
    David Kadlec and Gayle Kadlec, Petitioners-Respondents, v. Kevin Kadlec and Carol Kadlec, Respondents-Appellants.
    Court of Appeals

      No. 03-1596.

      Submitted on briefs February 10, 2004.

    Decided March 23, 2004.

    2004 WI App 84
    (Also reported in 679 N.W.2d 914.)

      On behalf of the respondents-appellants, the cause was submitted on the briefs of Bryan S. Seidl and Michael J. Stingl of Seidl & Stingl, S.C. of Rhinelander.
    On behalf of the petitioners-respondents, the cause was submitted on the brief of Matthew E. Yde and Douglas R. Ross of Strasser & Yde, S.C. of Wausau.
    Before Cane, C.J., Hoover, PJ., and Peterson, J.
   CANE, C.J.

¶ 1. Kevin and Carol Kadlec appeal the circuit court's confirmation of an arbitration order. The arbitrator ordered them to pay one-half of a $48,000 commission for the sale of property in Iowa they owned jointly with David and Gayle Kadlec. Kevin and Carol argue the order should be vacated because (1) it went beyond the terms of the arbitration agreement or (2) it either represents a manifest disregard of the law or violates strong public policy. Because we agree that the order constitutes a violation of strong public policy, we reverse the judgment and remand the matter for the circuit court to vacate that part of the arbitration order requiring Kevin and Carol Kadlec to pay one-half of the real estate commission.

Discussion

¶ 2. David is Kevin's father. They were partners in a number of business ventures, one of which involved constructing a community based residential facility in Iowa. David and Kevin later disagreed as to the facility's construction, and this was one of many reasons that eventually culminated in the partnership's dissolution. Both parties signed an agreement to arbitrate their disputes. A few months before signing the agreement, however, David signed an exclusive listing contract with a Wisconsin real estate broker, Art Senicka, to sell the Iowa property. The listing contract required a 4% commission to be paid.

¶ 3. At arbitration, David and Kevin's assets and liabilities were split. As part of the division, the arbitrator ordered the Iowa property to be sold to a buyer Senicka secured, who happened to be Senicka's niece, for $1.2 million. The arbitration award was then confirmed by the circuit court.

¶ 4. David and Kevin eventually complied with the order. David paid one-half of Senicka's commission, $24,000, but Kevin refused to pay the other half. Senicka then filed suit against both David and Kevin. David petitioned the arbitrator to issue a supplemental decision requiring Kevin to pay for the one-half commission that was owing, and the arbitrator ultimately issued an order to that effect. The circuit court confirmed that award, and Kevin appeals.

Discussion

¶ 5. Kevin and Carol first argue the arbitrator exceeded the scope of his authority when he rendered the second arbitration award, which ordered them to pay one-half of the real estate broker's commission. They argue the commission issue was not presented for arbitration by the parties' arbitration agreement. We disagree.

¶ 6. "An arbitrator obtains authority only from the contract of the parties and therefore is confined to the interpretation of that contract and cannot ignore that contract when making an award." Lukowski v. Dankert, 184 Wis. 2d 142, 152, 515 N.W.2d 883 (1994). We review an arbitration "to insure that the parties received the arbitration they bargained for." Lane v. Williams, 2000 WI App 263, ¶ 6, 240 Wis. 2d 255, 621 N.W.2d 922.

¶ 7. We conclude the arbitrator did not exceed his contractual authority. The arbitration agreement's scope was broad. The parties agreed to "resolve all disputes between David and Kevin Kadlec." The issue regarding the payment of the commission arose as a consequence of the resolution of a dispute in the initial arbitration, specifically the arbitrator's initial order requiring the Iowa property to be sold to the real estate broker's niece, Laura Selby. While both parties eventually complied with the order to sell the property, they later differed as to whose responsibility it was to pay the commission. Thus, we conclude the commission dispute was within the scope of the arbitration agreement and, therefore, the arbitrator had authority to resolve it.

¶ 8. Kevin and Carol next argue the circuit court should not have confirmed the arbitrator's order concerning payment of a commission to a Wisconsin real estate broker for selling Iowa property. Generally, parties to an arbitration agreement "bargain for the judgment of the arbitrator — correct or incorrect — whether that judgment is one of fact or law." Nicolet High School Dist. v. Nicolet Educ. Ass'n, 118 Wis. 2d 707, 713, 348 N.W.2d 175 (1984). However, "The rule that a court will not overturn an arbitration panel for 'mere errors of judgment as to law or fact' does not mean that all errors will be tolerated." Lukowski, 184 Wis. 2d at 151. An arbitrator's award will be vacated if any of the criteria in Wis. Stat. § 788.10(1) is established, or if the award is illegal, represents a manifest disregard of the law, or violates strong public policy. See id. at 151-52. Arbitration awards are presumptively valid and "will be disturbed only where invalidity is shown by clear and convincing evidence." Oshkosh v. Union Local 769-A, 99 Wis. 2d 95, 102-03, 299 N.W.2d 219 (1980). We conclude the arbitrator's award ordering Kevin and Carol to pay one-half of the commission violates strong public policy.

¶ 9. Both Wisconsin and Iowa have statutes that relate to collecting commissions for real estate services. Wis. Stat. § 452.20; Iowa Code § 43B.30. Both statutes require the real estate broker to prove the broker was licensed in the particular state where the services were rendered. Wisconsin Stat. § 452.20 provides:

No person engaged in the business or acting in the capacity of a broker, salesperson or time-share salesperson within this state may bring or maintain an action in the courts of this state for the collection of a commission or compensation for the performance of any act mentioned in this chapter without alleging and proving that he or she wa's a duly licensed broker, salesperson or registered time-share salesperson at the time the alleged cause of action arose. (Emphasis added.)

Iowa has a nearly identical statute. Iowa Code § 543B.30 states:

A person engaged in the business or acting in the capacity of a real estate broker or a real estate salesperson within this state shall not bring or maintain any action in the courts of this state for the collection of compensation for services performed as a real estate broker or salesperson without alleging and proving that the person was a duly licensed real estate broker or real estate salesperson at the time the alleged cause of action arose. (Emphasis added.)

¶ 10. Wisconsin and Iowa prohibit unlicensed persons from providing real estate brokerage services. Wisconsin Stat. § 452.03 provides:

No person may engage in or follow the business or occupation of, or advertise or hold himself or herself out as, or act temporarily or otherwise as a broker or salesperson without a license. Licenses shall be granted only to persons who are competent to transact such businesses in a manner which safeguards the interests of the public, and only after satisfactory proof of the person's competence has been presented to the department. (Emphasis added.)

In Badger III Limited Partnership v. Howard, Needles, Tammen & Bergendoff, 196 Wis. 2d 891, 903, 539 N.W.2d 904 (Ct. App. 1995), we held that §452.03 "prohibits any person not licensed as a real estate broker in Wisconsin from performing real estate brokerage services in this state." The corollary of this rule is that § 452.03 only allows a person licensed as a real estate broker in Wisconsin to perform real estate brokerage services in this state. In other words, a Wisconsin real estate broker's license is not authorization to render services in other states.

¶ 11. Similarly, Iowa has the same prohibition Wisconsin does regarding rendering real estate brokerage services without a license. Iowa Code § 543B.1 states:

A person shall not, directly or indirectly, with the intention or upon the promise of receiving any valuable consideration, offer, attempt, agree to perform, or perform any single act as a real estate broker whether as a part of a transaction or as an entire transaction, or represent oneself as a real estate broker, broker asso-date, or salesperson, without first obtaining a license and otherwise complying with the requirements of this chapter. (Emphasis added.)

Additionally, Iowa Admin Code § 193E — 5.1(3) states: "A person shall not perforin any activities in Iowa as provided by Iowa Code chapter 543B without qualifying for and being issued a real estate license."

¶ 12. The policy supporting the licensure requirement in Wisconsin is based on ensuring competency. Wisconsin Admin. Code § RL 24.03(2) reads in relevant part:

(a) Licensees shall not provide services which the licensee is not competent to provide unless the licensee engages the assistance of one who is competent. Any person engaged to provide such assistance shall be identified and that person's contribution shall be described.
(c) Licensees shall be knowledgeable regarding laws, public policies and current market conditions on real estate matters and assist, guide and advise the buying or selling public based upon these factors.

Similarly, Iowa's policy for requiring licensure in its state is grounded in similar considerations. See, e.g., Iowa Code § 543B.15 (qualifications for licensee); Iowa Admin. Code § 193E — 3.1 (general requirements for brokerage license); Iowa Admin. Code § 193E — 3.4 (continuing education requirements for brokers).

¶ 13. In light of Wisconsin's and Iowa's licensure requirements, we conclude there is a strong public policy that requires the arbitrator's award ordering Kevin and Carol to pay one-half of Senicka's commission to be reversed. Here, it is undisputed Senicka was not a licensed real estate broker in Iowa. Iowa unequivocally requires real estate brokers rendering services in the state to be licensed, and by that license Iowa makes certain the broker is knowledgeable and capable at handling real estate affairs in Iowa. This strong public policy must be respected and, therefore, requires this portion of the arbitrator's award to be vacated.

¶ 14. On a broader plane, individual state's power to regulate its real estate brokers through licensure requirements must be preserved. To conclude otherwise would allow a licensed real estate broker from one state to provide services in another state notwithstanding that other state's requirements. The consequence of that scenario is that all other states' regulations become meaningless. We cannot endorse an arbitrator's award that implicates such a possibility. Thus, we conclude this is a rare case where strong public policy requires the arbitrator's order to be vacated. Therefore, we reverse and remand to the circuit court for the entry of an order vacating the arbitration award requiring Kevin and Carol Kadlec to pay one-half of the real estate commission.

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

       WISCONSIN Stat. § 788.10(1) states:
      In either of the following cases the court in and for the county wherein the award was made must make an order vacating the award upon the application of any party to the arbitration:
      (a) Where the award was produced by corruption, fraud or undue means;
      (b) Where there was evident partiality or corruption on the part of the arbitrators, or either of them;
      (c) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced;
      (d) Where the arbitrators exceeded their powers, or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made.
      All references to the Wisconsin Statutes are to the 2001-02 version unless otherwise noted.

       Because this conclusion is dispositive of the appeal, we do not consider Kevin and Carol's other argument that the arbitrator did not have authority to impose prejudgment interest. See Gross v. Hoffman, 227 Wis. 296, 300, 277 N.W. 663 (1938).


author: HOOVER, EJ.

text:
    State of Wisconsin, Plaintiff-Respondent, v. Richard A. Devore, Defendant-Appellant.

    Court of Appeals

      No. 03-2323-CR.

      Submitted on briefs February 3, 2004.—

      Decided March 23, 2004.

    2004 WI App 87
    (Also reported in 679 N.W.2d 890.)

      On behalf of the defendant-appellant, the cause was submitted on the briefs of Catherine M. Canright of Superior.

      On behalf of the plaintiff-respondent, the cause was submitted on the brief of Peggy A. Lautenschlager, attorney general, and William C. Wolford, assistant attorney general.
    Before Cane, C.J., Hoover, EJ., and Peterson, J.

       Petition to review denied 6-8-04.

   HOOVER, EJ.

¶ 1. Richard Devore appeals an order denying his motion to be transferred to Minnesota under the Interstate Compact on Mental Health, Wis. Stat. § 51.75. He contends the circuit court erred when it concluded that, as a matter of law, § 51.75 did not apply to individuals found not guilty by reason of mental disease or defect (NGI) in accord with Wis. Stat. § 971.17. We conclude that the circuit court correctly determined § 51.75 was inapplicable to NGI defendants like Devore and affirm the order.

Background

¶ 2. On June 18, 2001, Devore was charged with burglary, two counts of theft, and bail jumping. The burglary was a Class C felony, and the remaining counts were Class A misdemeanors. On June 27, Devore pled not guilty by reason of mental disease or defect, and the court ordered mental evaluations.

¶ 3. Following the evaluations, the State and the defense stipulated that Devore was not guilty by reason of his mental state. In January 2003, the court found him not guilty by reason of mental disease or defect and ordered the state Department of Health and Family Services to prepare a conditional release plan. On February 27, 2003, the court approved the plan. On February 28, Devore filed his motion to be transferred to Minnesota where he had previously lived and received mental health treatment. The court denied the motion, concluding that the Compact on which Devore relied applied only to Wis. Stat. ch. 51 patients, not Wis. Stat. § 971.17 defendants. Devore appeals.

Discussion

¶ 4. The sole question on appeal is whether the Interstate Compact on Mental Health, Wis. Stat. § 51.75, applies to criminals committed under Wis. Stat. § 971.17. This presents a question of statutory interpretation, which we review de novo. Hutson v. Personnel Comm'n, 2003 WI 97, ¶ 31, 263 Wis. 2d 612, 665 N.W.2d 212. The goal of statutory interpretation is to discern and effectuate legislative intent. County of Jefferson v. Renz, 231 Wis. 2d 293, 301, 603 N.W.2d 541 (1999). We look first to the statute's plain language. Id. If the language is plain and unambiguous, we need not look beyond it to determine its meaning. City of Muskego v. Godec, 167 Wis. 2d 536, 545, 482 N.W.2d 79 (1992). If the statute is ambiguous or unclear, we may look to the legislative history and other extrinsic evidence to discern the legislative intent. Renz, 231 Wis. 2d at 302. A statute is ambiguous if reasonable persons could disagree as to its meaning. State v. Williquette, 129 Wis. 2d 239, 248, 385 N.W.2d 145 (1986).

¶ 5. Devore contends that Wis. Stat. § 51.75 is broadly worded so as to include all mentally ill persons, including himself. The State argues that Devore's interpretation is only one possible reading. It argues another reasonable interpretation is that because of its placement within ch. 51, the Mental Health Act, the Compact applies only to those individuals civilly committed under that chapter and not to NGI criminal defendants. We agree with the State that both interpretations are reasonable and, thus, we turn to extrinsic evidence to discern legislative intent. We conclude that the State's alternate interpretation, that § 51.75 applies only to civilly committed individuals, is correct.

¶ 6. Devore directs us to Wis. Stat. § 51.75(4)(a), which states: "Whenever ... it is determined that the patient should receive aftercare or supervision, such care or supervision may be provided in a receiving state." In § 51.75(2)(a), one definition of "Aftercare" is "conditional release," and § 51.75(14) states that the Compact should be liberally construed to effectuate its purpose. Devore points out that he is on conditional release and should therefore be allowed to transfer to Minnesota.

¶ 7. However, the Compact does not define "conditional release." Whatever it means, however, we conclude that it cannot mean conditional release of an NGI defendant because when the Compact was enacted, neither Wis. Stat. § 971.17 nor conditional release for NGI defendants existed.

¶ 8. When the ‘Compact was enacted, Wis. Stat. § 957.11(3) (1965) provided:

If found not guilty because insane ... or feeble-minded, the defendant shall be committed to the central state hospital or to an institution designated by the state department of public welfare, there to be detained until discharged in accordance with law. (Emphasis added.)

Thus, despite Devore's argument to the contrary,\ NGI individuals would meet one of only two classifications: committed to the state or fully released from its custody. There was no "conditional" release option.

¶ 9. The Compact's article IX, Wis. Stat. § 51.75(9)(a), provides that the Compact does not apply to a person "whose institutionalization is due to the commission of an offense for which, in the absence of mental illness or mental deficiency, said person would be subject to incarceration in a penal or correctional institution." As such, the Compact never applied to NGI individuals because they would have either been committed for "an offense for which... [they] would be subject to incarceration," or they would have been released from treatment and the Compact would naturally cease to apply. It is therefore reasonable to conclude that, absent language to the contrary, the legislature intended to maintain this status quo where § 51.75 does not apply to NGI defendants.

¶ 10. As far as the liberal construction requirement of Wis. Stat. § 51.75(14) is concerned, Wis. Stat. § 971.17's main objective is protecting the public, not providing treatment to alleviate a defendant's mental illness. See Rolo v. Goers, 174 Wis. 2d 709, 722, 497 N.W.2d 724 (1993); Wis. Admin. Code § HFS 98.01. By contrast, the purpose of § 51.75 is "proper and expeditious treatment of the mentally ill." Wis. Stat. §51.75(1). Thus, liberal construction of § 51.75 to include NGI defendants on conditional release does nothing to further the objectives of either statute.

¶ 11. Additionally, we note that the Department of Health and Family Services, to which Wis. Stat. § 971.17 defendants are committed, see Wis. Stat. § 971.17(3)(e) and Wis. Admin. Code § HFS 98.02(1), has an administrative rule prohibiting those defendants on conditional release from leaving the state. Wisconsin Admin. Code § HFS 98.04(3)(k) states that such a client:

May not live, work, travel or be trained or educated in another state, because persons committed to the department under s. 971.17 or 980.06, Stats., are not covered by the interstate Compact under s. 304.13, Stats., or by s. 304.135, Stats.

Wisconsin Stat. §§ 304.13 and 304.135 contains interstate Compacts on parolees and individuals on extended supervision. Devore argues that this rule is inapplicable because he is neither a parolee nor an individual on extended supervision.

¶ 12. However, we view the latter half of the rule as an explanatory phrase, not a mandate. It merely explains why individuals committed under Wis. Stat. §§ 971.17 and 980.06 are not permitted the same considerations as parolees or individuals on extended supervision. In addition, the travel prohibition is essentially a policy determination. Where legal questions are intertwined with policy decisions, we should defer to the agency responsible for determining policy. Sauk County v. WERC, 165 Wis. 2d 406, 413, 477 N.W.2d 267 (1991).

By the Court — Order affirmed.

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