author:
SNYDER, J.
      BROWN, J.

text:
    State of Wisconsin ex rel. William E. Marberry, Petitioner-Appellant, v. Phillip G. Macht, Superintendent, Wisconsin Resource Center and Joseph S. Leean, Secretary, Department of Health and Family Services, Respondents-Respondents.

    Court of Appeals

      No. 99-2446.

      Oral argument January 15, 2002.

    Decided April 10, 2002.

    2002 WI App 133
    (Also reported in 648 N.W.2d 522.)

      On behalf of the petitioner-appellant, there were briefs and oral argument by Donald T. Lang, assistant state public defender of Madison.
    On behalf of the respondents-respondents, there was a brief by Marguerite M. Moeller, assistant attorney general, and James E. Doyle, attorney general. There was oral argument by Marguerite M. Moeller, assistant attorney general.
    Before Nettesheim, EJ., Brown and Snyder, JJ.

       Petition to review granted 6-11-02.

   SNYDER, J.

¶ 1. In this case we are asked to determine whether the initial reexamination required by Wis. Stat. § 980.07 (1997-98) for Wis. Stat. ch. 980 committed patients is mandatory or directory and to determine the appropriate remedy if the six-month time limit is violated. William E. Marberry contends that both the hearing and stated time limit are mandatory and appeals from a circuit court order denying his habeas corpus petition. The State responds that the six-month time limit is directory or, in the alternative, that if the time limit is mandatory, the remedy is not release or discharge from the ch. 980 commitment. We hold that the § 980.07 six-month time limit for an initial reexamination is mandatory and that Marberry is entitled to release or discharge from his ch. 980 commitment. We therefore reverse the circuit court order and remand this matter for proceedings consistent with this opinion.

BACKGROUND

¶ 2. The essential facts are undisputed. Marberry was committed as a sexually violent person on July 15, 1998, pursuant to Wis. Stat. § 980.06(1). Wisconsin Stat. § 980.07 requires a reexamination of Marberry's mental condition after his initial commitment and reads in relevant part:

Periodic reexamination; report. (1) If a person has been committed under s. 980.06 and has not been discharged under s. 980.09, the department shall conduct an examination of his or her mental condition within 6 months after an initial commitment under s. 980.06 and again thereafter at least once each 12 months for the purpose of determining whether the person has made sufficient progress to be entitled to transfer to a less restrictive facility, to supervised release or to discharge. At the time of a reexamination under this section, the person who has been committed may retain or, if he or she is indigent and so requests, the court may appoint a qualified expert or a professional person to examine him or her.

¶ 3. The State concedes that the Department of Health and Family Services (DHFS) failed to conduct an initial reexamination of Marberry's mental condition within the six months prior to January 15, 1999. On June 15, 1999, eleven months after the Wis. Stat. ch. 980 commitment, Marberry filed a petition for a writ of habeas corpus requesting to be discharged from the ch. 980 commitment because he had still not received the required Wis. Stat. § 980.07(1) initial reexamination. The circuit court denied Marberry's petition and he appeals.

ISSUE

¶ 4. Marberry and the State dispute whether the six-month time limit for an initial reexamination under Wis. Stat. § 980.07(1) is mandatory or directory. The parties also dispute the appropriate remedy if the time limit is mandatory.

DISCUSSION

¶ 5. Whether the Wis. Stat. § 980.07(1) six-month time requirement for an initial reexamination of a committed person is discretionary or mandatory requires us to interpret § 980.07(1). Statutory interpretation is a question of law that we review de novo. State v. Curiel, 227 Wis. 2d 389, 404, 597 N.W.2d 697 (1999). The goal of statutory interpretation is to discern the intent of the legislature. Jungbluth v. Hometown, Inc., 201 Wis. 2d 320, 327, 548 N.W.2d 519 (1996).

¶ 6. Marberry contends that the six-month reexamination time limit of Wis. Stat. § 980.07(1) is mandatory, relying on our holding in State ex rel. Lockman v. Gerhardstein, 107 Wis. 2d 325, 320 N.W.2d 27 (Ct. App. 1982). In Lockman, a Wis. Stat. ch. 51 patient was not provided a final commitment hearing within fourteen days of her detention as required by Wis. Stat. § 51.20(7)(c). Lockman, 107 Wis. 2d at 326-27. We held that the § 51.20(7)(c) fourteen-day time limit is mandatory and that it could not be varied at the discretion of the trial court; consequently, we ordered Lockman released. See Lockman, 107 Wis. 2d at 330.

¶ 7. The State contends that the six-month time limit of Wis. Stat. § 980.07(1) is directory, citing to State v. R.R.E., 162 Wis. 2d 698, 470 N.W.2d 283 (1991), in support. R.R.E. was acquitted of second-degree murder and attempted murder by reason of mental disease or defect (NGI) and was committed under Wis. Stat. § 971.17; he later moved for a reexamination of his mental condition as provided in Wis. Stat. § 51.20(16)(c). R.R.E., 162 Wis. 2d at 703. Section 51.20(16)(c) requires a hearing within thirty days of receipt of a reexamination petition if a hearing was not held within 120 days of the filing of the petition. R.R.E. petitioned for release from commitment under § 971.17 because the State failed to comply with the thirty-day time requirement. R.R.E., 162 Wis. 2d at 703. Our supreme court held that the thirty-day time limit of § 51.20(16)(c) was directory in response to a § 971.17 reexamination petition, that R.R.E. was not entitled to release from the § 971.17 commitment and that the remedy was a remand to the circuit court "for a hearing to determine whether R.R.E. is entitled to release under the standards of sec. 971.17." R.R.E., 162 Wis. 2d at 715.

¶ 8. Lockman addressed a Wis. Stat. ch. 51 patient while R.R.E. focused on a Wis. Stat. § 971.17 patient. We conclude that because of the unique nature of a Wis. Stat. ch. 980 commitment, neither Lockman nor R.R.E. is directly applicable.

¶ 9. Wisconsin Stat. ch. 980 creates a civil commitment procedure primarily intended to protect the public and to provide concentrated treatment to convicted sexually violent persons, not to punish the sexual offender. State v. Carpenter, 197 Wis. 2d 252, 258, 541 N.W.2d 105 (1995). The principal purposes of ch. 980, the protection of the public and the treatment of convicted sex offenders who are at a high risk to reoffend in order to reduce the likelihood that they will engage in such future conduct, are significantly nonpu-nitive and remedial. Carpenter, 197 Wis. 2d at 271. Because of these dual purposes, ch. 980 commitments differ from both Wis. Stat. ch. 51 and Wis. Stat. § 971.17 commitments. State v. Williams, 2001 WI App 263, ¶¶ 12-20, 249 Wis. 2d 1, 637 N.W.2d 791.

¶ 10. Wisconsin Stat. ch. 51 commitments are permitted for many reasons that do not implicate a danger to others. Williams, 2001 WI App 263 at ¶ 13; Wis. Stat. § 51.20(1)(a)2.a, c-e. In contrast to ch. 51, significant danger to others is the only justification for a commitment under Wis. Stat. ch. 980. Williams, 2001 WI App 263 at ¶ 13. Thus, persons committed under ch. 980 are more dangerous as a class than those committed under ch. 51. Williams, 2001 WI App 263 at ¶ 13 (citing State v. Post, 197 Wis. 2d 279, 322, 541 N.W.2d 115 (1995)).

¶ 11. In addition, it is much more difficult to commit a person under Wis. Stat. ch. 980 than it is to commit someone under Wis. Stat. ch. 51. Williams, 2001 WI App 263 at ¶ 14. First, ch. 980 provides a right to a trial by a jury of twelve, all of whom must agree that the subject of the petition is a sexually violent person. Wis. Stat. §§ 980.03(3), 980.05(2); Williams, 2001 WI App 263 at ¶ 14. On the other hand, a ch. 51 commitment is by a jury of six, only five of whom must agree to commit. Wis. Stat. § 51.20(11)(a), (b); Williams, 2001 WI App 263 at ¶ 14. Second, the burden of proof is "clear and convincing evidence" in ch. 51 commitments, § 51.20(13)(e), but "beyond a reasonable doubt" in ch. 980 commitments, § 980.05(3). Williams, 2001 WI App 263 at ¶ 14.

¶ 12. Furthermore, a person may be committed under Wis. Stat. ch. 51 because he or she is a danger to others even though the factual predicates to the commitment may represent the first time he or she has done something that " [Evidences a substantial probability of physical harm to other individuals." Wis. Stat. § 51.20(l)(a)2.b; Williams, 2001 WI App 263 at ¶ 15. Conversely, a person committed under Wis. Stat. ch. 980 has, by definition, not only already violated the rights of at least one victim by an act or acts of sexual violence, but, significantly, has also demonstrated that "previous treatment has proved ineffective." Williams, 2001 WI App 263 at ¶ 15 (citing Post, 197 Wis. 2d at 309).

¶ 13. Although Wis. Stat. ch. 51 is perhaps more lenient with those who are subject to its provisions than is Wis. Stat. ch. 980, there are significant differences between the degree of danger posed by each of the two classes of persons, as well as significant differences in what must be proven in order to commit under the two chapters. Williams, 2001 WI App 263 at ¶ 16.

¶ 14. Neither is a Wis. Stat. ch. 980 commitment analogous to a Wis. Stat. § 971.17 commitment. In a § 971.17 commitment, the law only infers current mental illness and dangerousness when a person is found to have violated the criminal law but to be not responsible for that violation because he or she had a mental disease or defect at the time of the crime. Wis. Stat. § 971.15(1); Williams, 2001 WI App 263 at ¶ 17. In contrast to this inference of current mental state and dangerousness, a person may not be committed under ch. 980 unless the State proves beyond a reasonable doubt both that the person actually has a mental disorder at the time of the commitment trial and is then actually dangerous to others because the mental disorder creates a substantial probability that the person will engage in acts of sexual violence. Wis. Stat. §§ 980.02(2)(b), (c) and 980.05(3)(a); Williams, 2001 WI App 263 at ¶ 18. This is a critical distinction between persons committed under § 971.17 and persons committed under ch. 980. Williams, 2001 WI App 263 at ¶ 18.

¶ 15. Additionally, a Wis. Stat. ch. 980 committed person has alternative routes and protections not available to a Wis. Stat. § 971.17 committed person, not the least of which is the ability to petition for discharge at any time with the approved of the secretary of DHFS. Williams, 2001 WI App 263 at ¶ 19. Also under ch. 980, the trial court can consider supervised release in connection with any petition for discharge. Williams, 2001 WI App 263 at ¶ 19.

¶ 16. The differences in the procedures for initial commitment between Wis. Stat. ch. 980 and Wis. Stat. § 971.17 are based upon real distinctions between the statutory schemes and the interests served by each. We are not convinced that the purpose of ch. 980 is best served by applying the case law governing either Wis. Stat. ch. 51 or § 971.17 commitments.

¶ 17. We must now consider whether the initial reexamination of Wis. Stat. § 980.07(1) is mandatory or directory. In determining whether a statutory provision is mandatory or directory, "as of every other question of statutory construction, the prime object is to ascertain the legislative intention." Worachek v. Stephenson Town Sch. Dist., 270 Wis. 116, 120, 70 N.W.2d 657 (1955) (citation omitted). Although use of the word "shall" in a statute suggests that the provision is mandatory, this court has held that statutory time limits can be directory despite the use of the word "shall." Eby v. Kozarek, 153 Wis. 2d 75, 79-80, 450 N.W.2d 249 (1990). Consequently, the determination of whether "shall" is mandatory or directory is not governed by a per se rule. State ex rel. Jones v. Franklin, 151 Wis. 2d 419, 428, 444 N.W.2d 738 (Ct. App. 1989) (Sundby, J., dissenting).

¶ 18. In determining whether a statutory time limit is mandatory or directory, we consider several factors: the existence of penalties for failure to comply with the limitation, the statute's nature, the legislative objective for the statute and the potential consequences to the parties, such as injuries or wrongs. State v. Thomas, 2000 WI App 162, ¶ 9, 238 Wis. 2d 216, 617 N.W.2d 230, review denied, 2000 WI 121, 239 Wis. 2d 312, 619 N.W.2d 94 (Wis. Sept. 12, 2000) (No. 00-0150).

¶ 19. Here, Wis. Stat. § 980.07(1) does not provide a penalty for a violation of the six-month time period. A statute prescribing the time in which public officers are required to perform an official act, unless it denies the exercise of power after such time, is generally directory. Karow v. Milwaukee County Civil Serv. Comm'n, 82 Wis. 2d 565, 571, 263 N.W.2d 214 (1978). However, the omission of a prohibition or a penalty is not dispositive but only one factor to be considered in the analysis of whether the legislature intended the provision to be mandatory or directory. Id. at 572.

¶ 20. The nature of a Wis. Stat. ch. 980 commitment is civil, not criminal. Thomas, 2000 WI App 162 at ¶ 11. The chief objectives of ch. 980 are the protection of the community from the dangerously mentally disordered and to provide care and treatment to those with mental disorders that predispose them to sexual violence. Post, 197 Wis. 2d at 302. It is important, however, to highlight that the legislature's primary focus in creating ch. 980 was to provide treatment to convicted sexually violent persons for their mental conditions. Thomas, 2000 WI App 162 at ¶ 11. Failure to provide a reexamination within the statutorily required time period, without penalty, can hardly be said to assist in accomplishing this primary focus.

¶ 21. The potential consequences for both parties cannot be labeled insignificant; failure to conduct a reexamination could result in the release of a potentially dangerous mentally disordered person into the community or the continued confinement of a person who no longer presents a danger to society and the prolonged deprivation of his or her liberty. Where the failure to act within a statutory time limit does work an injury or wrong, this court has construed the time limit as mandatory. Karow, 82 Wis. 2d at 572. Certainly an individual such as Marberry, who is institutionalized and deprived of his liberty, is injured to a substantial degree.

¶ 22. The general rule in interpreting statutory language is that "the word 'shall' is presumed mandatory when it appears in a statute." State v. Sprosty, 227 Wis. 2d 316, 324, 595 N.W.2d 692 (1999) (citation omitted). "Further support is given to a mandatory interpretation of 'shall' when the legislature uses the words 'shall' and 'may' in a particular statutory section, indicating the legislature was aware of the distinct meanings of the words." Id. (citation omitted).

¶ 23. The legislature used both the words "shall" and "may" in Wis. Stat. § 980.07:

(1) If a person has been committed under s. 980.06 and has not been discharged under s. 980.09, the department shall conduct an examination of his or her mental condition within 6 months after an initial commitment under s. 980.06 and again thereafter at least once each 12 months for the purpose of determining whether the person has made sufficient progress to be entitled to transfer to a less restrictive facility, to supervised release or to discharge. At the time of a reexamination under this section, the person who has been committed may retain or, if he or she is indigent and so requests, the court may appoint a qualified expert or a professional person to examine him or her.
(2) Any examiner conducting an examination under this section shall prepare a written report of the examination no later than 30 days after the date of the examination. The examiner shall place a copy of the report in the person's medical records and shall provide a copy of the report to the court that committed the person under s. 980.06.
(3) Notwithstanding sub. (1), the court that committed a person under s. 980.06 may order a reexamination of the person at any time during the period in which the person is subject to the commitment order. (Emphasis added.)

Therefore, we "can infer that the legislature was aware of the different denotations and intended the words to have their precise meanings." Sprosty, 227 Wis. 2d at 325 (citation omitted).

¶ 24. By and large, if a provision of a statute states a time for performance of an official duty, without any language denying performance after a specified time, it is directory; however, if the time period is provided to safeguard someone's rights, it is mandatory and the agency cannot perform its official duty after the time requirement has passed. 3 Sutherland Statutory Construction § 57.19 (6th ed. 2001).

¶ 25. Where statutes provide for performance of acts by public officers protecting private rights or in the public interest, they are mandatory. Id. at § 57.14; Town of LaGrange v. Auchinleck, 216 Wis. 2d 84, 97, 573 N.W.2d 232 (Ct. App. 1997). This rule has been enunciated by the United States Supreme Court as follows: "The conclusion to be deduced from the authorities is, that where power is given to public officers ... — whenever ... individual rights call for its exercise — the language used ... is in fact peremptory." Id. at 97-98 (citing Bd. of Supervisors v. United States ex rel. State Bank, 71 U.S. 435, 446-17 (1867)).

There are, undoubtedly, many statutory requisitions intended for the guide of officers in the conduct of business devolved upon them, which do not limit their power or render its exercise in disregard of the requisitions ineffectual. Such, generally, are regulations designed to secure order, system and dispatch in proceedings, and by a disregard of which the rights of parties interested cannot be injuriously affected .... But when the requisitions prescribed are intended for the protection of the citizen, and to prevent a sacrifice of his property, and by a disregard of which his rights might be and generally would he injuriously affected, they are not directory but mandatory.

French v. Edwards, 80 U.S. 506, 511 (1871). "If the provision is essential, it is mandatory." Midwest Mut. Ins. Co. v. Nicolazzi, 138 Wis. 2d 192, 198, 405 N.W.2d 732 (Ct. App. 1987) (citation omitted).

¶ 26. In the case at hand, mental reexaminations are conducted "for the purpose of determining whether the person has made sufficient progress to be entitled to ... supervised release or to discharge." Post, 197 Wis. 2d at 300 (citing Wis. Stat. § 980.07(1)). The State maintains the burden of proof throughout all Wis. Stat. ch. 980 proceedings and must continually prove the need for detention; a ch. 980 committed person cannot be deprived of his or her liberty unless the State proves by clear and convincing evidence that the person is still dangerous to others because the person's mental disorder creates a substantial probability that he or she will engage in acts of sexual violence. Wis. Stat. §§ 980.08(4), 980.09(2)(b). The reexamination is a safeguard against arbitrary confinement and we have previously said that this reexamination is mandatory. State v. Ransdell, 2001 WI App 202, ¶ 9, 247 Wis. 2d 613, 634 N.W.2d 871. A § 980.07 reexamination is a necessary precondition for securing judicial review of the commitment under § 980.09(2) and triggers other important procedural guarantees, such as the right to an independent mental examination, § 980.07(1), and the right to counsel, § 980.09(2)(a).

¶ 27. A Wis. Stat. ch. 980 committed person's liberty hinges upon this initial reexamination. Because of the significance of this initial reexamination and because such a reexamination is fundamental to securing other essential rights granted by ch. 980, we. must conclude that the six-month time period for an initial reexamination is mandatory.

¶ 28. There is no doubt that Marberry was not provided his initial reexamination within this mandatory six-month period. In fact, it took DHFS nearly two years to provide him with this reexamination. The question remaining for us, then, is what is the appropriate remedy when DHFS fails to provide a Wis. Stat. ch. 980 committed person with an initial reexamination within the required six months?

¶ 29. Marberry argues that the "prolonged indifference" of DHFS necessitates his release from his Wis. Stat. ch. 980 commitment. The State argues that release is inappropriate because there are insufficient facts developed in the record to explain DHFS's inaction. Under the egregious circumstances presented in this case, release is the only appropriate remedy.

¶ 30. All of the remedies offered by the State are inadequate to address the wrong perpetrated here. As noted by Marberry, as a practical matter, it is unlikely that Wis. Stat. ch. 980 committed persons would be aware of or have the ability to pursue these other remedies. Pursuit of alternative remedies would require substantial time during which the committed person would continue to be deprived of his or her liberty. The State acknowledges that some of the proposed remedies are unworkable. For example, neither remedial nor punitive contempt is available to Mar-berry in this situation.

¶ 31. We disagree with the State's assertion that damages and attorney's fees under Wis. Stat. ch. 51 are an appropriate remedy, as they do not address the problem of being denied a timely reexamination and are insufficient to compensate a person deprived of his or her liberty. Monetary damages are unlikely to benefit a Wis. Stat. ch. 980 patient because the patient is billed for his or her confinement and treatment and DHFS could seize any money damages received to satisfy this debt. Wis. Stat. § 46.10(2).

¶ 32. Freedom from physical restraint is a fundamental right that "has always been at the core of the liberty protected ... from arbitrary governmental action." Post, 197 Wis. 2d at 302 (citation omitted). Our supreme court held that "[c]ivil commitment for any purpose constitutes a significant deprivation of liberty ...." Id. (citation omitted). The Post court recognized that a proper function of the legal process is to minimize the risk of erroneous decisions and cautioned that an "individual should not be asked to share equally with society the risk of error when the possible injury to the individual is significantly greater than any possible harm to the state." Id. at 326 (citation omitted). "Loss of liberty through involuntary commitment imposes just such a heavy duty upon the state." Id.

¶ 33. DHFS asserts that the Wisconsin Resource Center (WRC), where Marberry was confined, did not receive a copy of the commitment order until seven months after the initial commitment. In addition, DHFS indicates that WRC staff did not recognize, upon receipt of the order, that said order triggered the statutory obligation to conduct a periodic reexamination. Marberry suggests that DHFS's failure to timely conduct the reexamination was due, in part, to a shortage of staff.

¶ 34. However, when our supreme court held Wis. Stat. ch. 980 to be constitutional, the State promised it was prepared to provide specific treatment to those committed under ch. 980 and to not simply warehouse those committed. Carpenter, 197 Wis. 2d at 267. The State assured our supreme court that as the population increased, plans existed to increase the staff proportionately and that a committed person would be discharged as soon as his or her dangerousness or mental disorder abated. Id. at 267-68. As noted in Post, we presume good faith on the part of the legislature; the State is clearly obliged under Wis. Stat. § 980.06(1) to provide control, care and treatment to those determined to be sexually violent persons. Post, 197 Wis. 2d at 308-09. Treatment is a bona fide goal of ch. 980 and, presumably, the legislature would proceed in good faith and fund the treatment programs necessary for those committed under ch. 980. Post, 197 Wis. 2d at 308.

¶ 35. Wisconsin Stat. ch. 980 does contain restrictive procedural time limits and we acknowledge that these time limits may cause administrative difficulties. See State v. Brown, 215 Wis. 2d 716, 726, 573 N.W.2d 884 (Ct. App. 1997). However, in Carpenter and Post, our supreme court accepted the State's affirmation that it was "prepared to provide specific treatment to those committed under ch. 980 and not simply warehouse them" and that the legislature would "proceed in good faith and fund the treatment programs necessary for those committed under chapter 980." Sprosty, 227 Wis. 2d at 331 (citing Carpenter, 197 Wis. 2d at 267, and Post, 197 Wis. 2d at 308, respectively). The employment of qualified and knowledgeable personnel and the creation of facilities and services to provide periodic reexaminations are not contrary to these stated purposes. Id.

¶ 36. Wisconsin's sexual predator law survived constitutional challenge, in part, because the nature and duration of Wis. Stat. ch. 980 commitments are to be reasonably related to the purposes for those commitments. Sprosty, 227 Wis. 2d at 330. The control, care and treatment of the committed person is to be in "the least restrictive manner consistent with the requirements of the person and in accordance with the court's commitment order." Id. (quoting Wis. Stat. § 980.06(1), (2)(b)).

¶ 37. Here, DHFS took nearly two years to provide Marberry with a reexamination that should have been conducted within six months. Under the extreme state of affairs presented here and the prolonged deprivation of Marberry's liberty in violation of the strict safeguards of Wis. Stat. ch. 980, Marberry's release is the only appropriate remedy.

CONCLUSION

¶ 38. We conclude that the six-month time limit of Wis. Stat. § 980.07(1) for an initial reexamination is mandatory and because of the egregious circumstances of this case, Marberry's release is necessary. We therefore reverse the order of the circuit court.

By the Court. — Order reversed.

BROWN, J.

¶ 39. (concurring in part; dissenting in part). I agree with the majority's careful distinction between Wis. Stat. ch. 980, Wis. Stat. ch. 51 and Wis. Stat. § 971.17. The discussion is excellent and, in my view, the conclusions reached are unassailable. I also join in the majority's conclusion that the six-month time period for a reexamination is mandatory. I disagree, however, that the only remedy available for failure to meet the statutory time frame is release of the committed person to the streets. Release of a ch. 980 patient whose dangerousness or mental disorder has not abated serves neither to protect the public nor provide care and treatment for the patient. Therefore, I dissent on this issue and write separately to detail what I believe are the appropriate remedies when government officials fail to satisfy the six-month time period for reexamination.

¶ 40. The majority pins its remedy to its interpretation of State v. Post, 197 Wis. 2d 279, 541 N.W.2d 115 (1995), and State v. Carpenter, 197 Wis. 2d 252, 541 N.W.2d 105 (1995). The majority interprets these cases as recognizing a liberty right to a reexamination. See Majority at ¶ 26 ("[t]he reexamination is a safeguard against arbitrary confinement") and Majority at ¶ 27 ("[a] Wis. Stat. ch. 980 committed person's liberty hinges upon this initial reexamination"). According to this reasoning, if a committed person is not timely reexamined, his or her liberty interests mandate release as the only appropriate remedy.

¶ 41. I do not agree that Post and Carpenter view periodic reexaminations as procedural due process safeguards. In Carpenter, the defendant argued that the primary purpose of Wis. Stat. ch. 980 is punishment. Carpenter, 197 Wis. 2d at 268. The supreme court rejected this contention, holding that the purposes of the statute are to protect the public and provide treatment to convicted sex offenders who are at high risk to reoffend. Id. at 271. In Post, the court made the following comments about periodic testing:

Periodic mental examinations are conducted "for the purpose of determining whether the person has made sufficient progress to be entitled to transfer to a less restrictive facility, to supervised release or to discharge." Wis. Stat. § 980.07(1). Thus, the duration of an individual's commitment is intimately linked to treatment of his mental condition. Commitment ends when the committed person no longer suffers from a mental disorder or when that condition no longer predisposes him to commit acts of sexual violence. Protection of the community is also well-served by this statutory scheme because the danger to the public has necessarily dissipated when treatment has progressed sufficiently to warrant an individual's release.

Post, 197 Wis. 2d at 314. In other words, the periodic testing is evidence of the legislative purpose to control, care and treat committed persons with the goal of returning them to society with minimal risk to the public, rather than warehousing such persons indefinitely.

¶ 42. Failure to hold the reexamination within six months does not transmogrify the statute into a penal one. Nor does it result in curtailment of a patient's liberty interests beyond that which is already encompassed by the patient's initial commitment. See id. at 317 (Wis. Stat. ch. 980 balances individual liberties with the public's right to protection). The failure to accomplish the reexamination within six months, therefore, is not a due process failure, but a failure to monitor the patient's treatment and progress. Under this view, release is not only inappropriate, it is not justifiable under the dual purposes of the statute: protection of the public from sexually violent persons likely to reof-fend and care and treatment of the patient.

¶ 43. This is not to say that there should not be consequences that flow from the governmental misconduct in this case. But I simply do not believe that it is fair or just to visit the consequences upon the innocent public. In addition, Marberry is not truly served by release either, given that his mental illness has not yet abated to a point where he may be safely reintroduced to the community. According to the most recent reexamination of Marberry, his health status requires that he receive treatment, not release. See State v. Seibert, 220 Wis. 2d 308, 320, 582 N.W.2d 745 (Ct. App. 1998) (refusing to allow release for committee's claim that facility failed to develop appropriate treatment program, stating that release would be "absurd" and his remedy was to litigate the issue and if successful, obtain correct treatment).

¶ 44. I prefer to take an economic approach to identify the consequences of the government's misconduct and to impose a remedy.-An economic analysis is guided by cost efficiency; it identifies the costs of a transaction and then applies sanctions to arrive at the most economically efficient outcome. See generally Richard A. Posner, An Economic Theory of the Criminal Law, 85 Colum. L. Rev. 1193 (1985). According to Posner, concerns about economic efficiency have guided courts in devising remedies for governmental misconduct in criminal cases, even though such concerns may not always be articulated. Richard A. Posner, Excessive . Sanctions for Governmental Misconduct in Criminal Cases, 57 Wash. L. Rev. 635, 646 (1982). He maintains, for example, that the harmless error rule is a remedy that can be explained in terms of efficiency:

If a person is guilty beyond a reasonable doubt on the basis of evidence both reliable and just, then a retrial will impose either a deadweight loss in the form of litigation expenses that will not change the outcome of the first trial, or an equally or (probably) more serious social cost resulting from the acquittal of a guilty person and consequent reduction in the deterrent and incapacitative effects of criminal punishment. These costs are excessive relative to the governmental misconduct, which by definition is slight since the defendant would in all probability have been convicted anyway.
What the harmless-error rule does, then, is to identify a type of governmental misconduct whose social costs are much lower than the social costs of attempting to deter the misconduct by overturning the conviction and forcing a retrial.

Id. at 645.

¶ 45. Posner's cost efficiency approach resonates in this case as well. What are the costs if Marberry is granted his request for release? Marberry has previously been convicted of sexually assaulting an adult female by use of force and an adolescent female, also by use of force. He has been examined by WRC personnel and found to be a dangerous sexual predator. He has been reexamined and his illness has not subsided. Release of such a person, whom experts predict will reoffend, is a costly remedy triggering expenditures of police and community resources in the form of heightened security and other safety precautions in the community in which he plans to live. We cannot ignore these very real costs. Significantly, these costs will accrue if we grant Marberry's request for release regardless of whether he actually reoffends or not.

¶ 46. These costs must be compared to the cost of governmental misconduct involved in this case. Officials failed to hold a reexamination that was necessary to monitor Marberry's treatment and progress. From an economic perspective, the cost of this failure is only noticeable when patients who are eligible for release continue to reside at WRC, a drain on the state's resources. It is obviously more cost efficient to discharge persons no longer in need of treatment than to keep them in the system. There is also the cost associated with preventing a person from being a contributing and fully-functioning member of society when that person's mental health no longer requires confinement. In this case, however, Marberry is not a person who would have been eligible for release had the reexamination been timely conducted. Therefore, there is no societal cost associated with his absence from the community and the state did not unnecessarily expend resources on Marberry's treatment and care. Consequently, the costs associated with the DHFS's failure to timely hold the reexamination are negligible.

¶ 47. My conclusion, therefore, is that release is not the appropriate remedy because it inefficiently allocates costs. The social costs associated with the misconduct are much lower than the social costs of attempting to deter the misconduct by releasing a potentially sexually violent person onto the streets. Instead, I would impose the sanctions set forth below. These sanctions would constitute detriments imposed directly on the responsible government officials in order to induce conformity with the requirements of Wis. Stat. ch. 980.

¶ 48. The first appropriate remedy is the issuance of a writ of mandamus to compel the public officials to perform a duty required by law. See Pasko v. City of Milwaukee, 2002 WI 33, ¶ 24, 252 Wis. 2d 1, 643 N.W.2d 72. In order for a writ of mandamus to be issued, there must be a clear legal right, a positive and plain duty, substantial damages, and no other adequate remedy at law. Id.

¶ 49. Under Wis. Stat. ch. 980, a committed person has a clear right to the six-month reexamination of his or her mental condition and it is the State's obligation to timely initiate that process. The State doubts, however, that most ch. 980 patients would suffer substantial damages or injuries should they not be afforded a periodic reexamination of their mental commitment within the legislatively prescribed time periods because history shows that it is unlikely that the reexamination will result in supervised release or discharge. In other words, the State argues that patients will rarely be able to show substantial damage for WRC's failure to follow the law.

¶ 50. The State misses the point altogether by assuming that substantial damages are incurred only when a patient achieves mental health and his or her supervised release or discharge is delayed by official inaction. In essence, the State falls into the "liberty interest" argument put forth by Marberry and which I have rejected in its entirety. Wisconsin Stat. ch. 980 patients have the right to treatment for their mental disorders. Part and parcel of the right to treatment is periodic monitoring of the progress of treatment. Adherence to the reexamination schedule serves to both facilitate the patient's treatment and provide the impetus to the patient to achieve mental wellness. This is true whether or not the patient has actually made sufficient progress to justify supervised release or discharge. Simply stated, all patients have a substantial interest in the correct implementation of ch. 980 procedures because it facilitates their statutory right to treatment.

¶ 51. It follows that when the patient's progress is not adequately monitored, he or she sustains substantial damage to the right to treatment, and has the right to insist that the legislature's goal of reexamination be correctly implemented. Therefore, in cases where the State fails to meet the statutorily prescribed time periods, a writ of mandamus should be issued to direct the responsible officials to undertake all necessary action to ensure that the mental reexamination is initiated and promptly completed. See Jackson v. State of Florida, 802 So. 2d 1213, 1218 (Fla. Dist. Ct. App. 2002) (issuing writ of mandamus as remedy, rather than release, when state failed to conduct mandatory annual reexamination under Florida's sexually violent predators law).

¶ 52. Where a writ or court order has been issued and the mental reexamination still has not been performed, as is the case in this instance, the public officials may be held in contempt for their failure to comply with the order. See, e.g., Schroeder, Gedlen, Riester & Moerke v. Schoessow, 108 Wis. 2d 49, 50, 321 N.W.2d 131 (1982) (reviewing contempt proceedings resulting from aldermen's failure to comply with a peremptory writ of mandamus). The State argues that contempt would be a cumbersome remedy due to the difficulty in identifying the parties responsible for the failure to conduct a prompt periodic exam. I am not convinced that this is a significant hurdle at all. Indeed, this remedy would be an effective tool precisely because it focuses on the particular persons who have the authority to ensure that procedures are established to carry out the requirements of the statute.

¶ 53. Therefore, I would approach the issue in the following manner. Upon request, the trial court may order the State to disclose all information that will identify the person or persons responsible for not providing the reexamination. Upon disclosure, the court may order these persons held in contempt and fine them or jail them. I am not persuaded by the State's position that there is no evidence of willful misconduct at WRC and that officials there are doing the best they can with limited resources. Whether officials have been acting in good faith or in an egregious manner are facts that would bé adduced, to the benefit of the public and the legislature, during contempt proceedings.

¶ 54. If any individual's actions Eire shown to be in flagrant disregard of the court's order, a jail term would be more them appropriate. Jail is a real cost to an egregious offender of the mandamus. A fine is a very reed economic cost. If the purpose is to provide a sanction that will force state officials to follow the law, contempt is the better sanction than release of the offender. Release is an excessive sanction because the costs are way too high. Contempt is workable and gets the message out to the people who are really and finally responsible for violating the legislature's mandatory time periods for reexamination. The cost is visited upon these flagrant violators and not the public. If someone at WRC knew he or she could go to jail for ignoring a mandamus, he or she would take extra care to make sure the individual received his or her reexamination.

¶ 55. Finally, if the mental reexamination ultimately discloses that the committed person had made sufficient progress to justify supervised release or discharge, a damages remedy may be available in an action under 42 U.S.C. § 1983 (2002). The State does not believe that § 1983 is available to Marberry because he has not suffered the violation of any federal constitutional right as a result of its noncompliance with Wis. Stat. ch. 980. Section 1983 does not cover conduct that violates only state laws. See Baker v. McCollan, 443 U.S. 137, 140 (1979) (stating that the first inquiry in a § 1983 suit is whether the plaintiff has been deprived of a right secured by the Constitution). I agree with this assessment of the law vis-a-vis Marberry. However, it is not applicable to a person who achieves mental health but who nonetheless languishes at WRC because of the State's failure to hold the reexamination in a timely fashion. That person would have a cause of action under § 1983 because the length of his or her commitment would not bear a reasonable relationship to the underlying purpose of the commitment. See Seling v. Young, 531 U.S. 250, 265 (2001).

¶ 56. The above described sanctions are the most efficient mechanisms for inducing public officials to implement the statute as written. They allocate the costs of governmental misconduct in the most efficient manner, ensuring that the consequences of official inaction are borne by the officials rather than upon the innocent citizens of our state.

       All references to the Wisconsin Statutes are to the 1997-98 version unless otherwise noted.

       We certified the issues to the Wisconsin Supreme Court on August 2,2000. The certification was accepted and then vacated and remanded to this court on March 13, 2001. We heard oral arguments on the issues on January 15, 2002.

       Marberry's Wis. Stat. § 980.07 reexamination was not commenced until June 29, 2000, almost two years after his initial commitment.

       Wisconsin Stat. § 51.20(7)(c) states that if there is probable cause found to believe that allegations support a Wis. Stat. ch. 51 detention, the court "shall schedule the matter for a hearing within 14 days from the time of detention of the subject individual...."

       Marberry also cites to N.N. v. County of Dane, 140 Wis. 2d 64, 409 N.W.2d 388 (Ct. App. 1987), in support of his argument. N.N. is a Wis. Stat. ch. 55 commitment case where we held that the circuit court lost jurisdiction and ordered N.N.'s release because a hearing for permanent placement was not held within thirty days of a temporary placement order. N.N., 140 Wis. 2d at 69-70; see also Wis. Stat. § 55.06(11)(c). N.N. cites to State ex rel. Lockman v. Gerhardstein, 107 Wis. 2d 325, 320 N.W.2d 27 (Ct. App. 1982), as precedent for the proposition that time limits in Wis. Stat. ch. 51 are mandatory and supports the same conclusion for ch. 55 time limits.

       Our supreme court echoed these sentiments in State v. Ruiz, 118 Wis. 2d 177, 201-02, 347 N.W.2d 352 (1984), when it considered whether to overturn a conviction as a disciplinary measure directed at the district attorney who had displayed a continuing pattern of nondisclosure of exculpatory evidence. The court carefully evaluated the many interests at stake, including the defendant's interest in a fair trial, the public's interest in having the guilty punished, the public's interest in preserving precious judicial resources and the interests of the witnesses and family of the victim. Id. at 202. Ultimately, the court ruled against reversal, determining that exclusion of the evidence in controversy would not have affected the result and "[rjetrying this defendant would be expensive and further congest an already crowded court system. Furthermore, there are obvious practical difficulties in trying the defendant for a murder that occurred nearly four years ago. Finally . .. retrial of this case would be traumatic for those innocently affected by this heinous crime." Id. at 202-03. Notably, the court stated it was not condoning the district attorney's conduct, but that the balancing of interests weighed against reversal. Id. at 203. Clearly, the court did not want to impose significant social costs on the public as a means to induce the district attorney to comply with the law.

       Another way to state this principle is that "remedies should be tailored to the injury suffered" so as not to "unnecessarily infringe on competing interests." See United States v. Morrison, 449 U.S. 361, 364 (1981). In Morrison, federal agents contacted the defendant without her counsel's presence even though they knew she had an attorney. Id. at 362. She moved for dismissal of the indictment based on a violation of her Sixth Amendment right to counsel. Because she made no showing of prejudice, the Court concluded that the "drastic relief' of dismissal was unwarranted, but suggested that a remedy might he available in other proceedings. Id. at 366-67.

       In addition, periodic monitoring also enables WRC to determine whether the patient has progressed sufficiently so that the state no longer has to expend resources on his or her care and treatment.

       Marberry complains that mandamus is an impractical remedy because the committee usually has no attorney representing him or her at the time the periodic testing is supposed to take place. He submits that requiring a committee to bring a writ of mandamus before the circuit court asks too much of those untrained in the law. I am not convinced. An ad hoc review of the court's statistics in 2001 revealed the following: There were 364 criminal pro se appeals. This represented eleven percent of all appeals and twenty-three percent of the criminal appeals. In addition, six pro se appeals came from Wis. Stat. ch. 980 committees. I conclude that many of the people detained in our institutions are knowledgeable about the legal procedures pertaining to them. When they feel aggrieved, they have no qualms about prosecuting their claims without an attorney. I have no doubt that, if it were the law in this state that failure to hold a reexamination in the prescribed time is rejnedied by filing a writ of mandamus, ch. 980 committees would act pursuant to that law, with or without an attorney.


source: Caselaw Access Project

author: ANDERSON, J.

license: Public Domain

text:
    Barbara L. Batt and Donald M. Batt, Sr., Plaintiffs-Co-Appellants-Cross-Respondents, v. Guineth L. Sweeney and Allstate Insurance Company, Defendants-Respondents-Cross-Appellants, Mayline Company, Inc., Subrogated Defendant-Appellant, Blue Cross & Blue Shield United of Wisconsin, Subrogated Defendant.
    Court of Appeals

      No. 01-1717.

      Submitted on briefs March 7, 2002.

    Decided April 10, 2002.

    2002 WI App 119
    (Also reported in 647 N.W.2d 868.)

      On behalf of the subrogated defendant-appellant and plaintiffs-co-appellants — cross-respondents, the cause was submitted on the briefs of Timothy B. Gifford of Olsen, Kloet, Gunderson, & Conway, Sheboygan, and William W. Moirlll of Neumann, Humke, Moir, Mueller & Bohrofen, S. C., Sheboygan.

      On behalf of the defendants-respondents-eross-appellants, the cause was submitted on the briefs of Christine M. Benson of Hills Legal Group, Ltd., Wauke-sha.
    Before Nettesheim, EJ., Brown and Anderson, JJ.

       Petition to review denied 7-26-02.

   ANDERSON, J.

¶ 1. This case originated because of an automobile accident involving Barbara L. Batt and Guineth L. Sweeney. Batt, her husband, Donald M. Batt, Sr., and Mayline Company, Inc. (collectively, "the Batts") appeal a summary judgment of the circuit court that granted Sweeney and Allstate Insurance Company's (collectively, "Allstate") motion for summary judgment, but denied a counterclaim alleging that the Batts brought the suit frivolously. The circuit court found that the Batts released Allstate from any further liability as a result of the car accident because they had signed a $7700 check issued to them by Allstate, which stated: "FINAL SETTLEMENT OF ANY AND ALL CLAIMS ARISING FROM BODILY INJURY CAUSED BY ACCIDENT ON 06/18/99." We agree with the circuit court's denial of the claim that the Batts' suit was frivolous. We disagree with the circuit court's finding that there existed no material issues of fact in dispute that would entitle the Batts to a trial. We therefore affirm in part, reverse in part and remand for a trial.

¶ 2. On June 18, 1999, Barbara Batt was driving westbound on Georgia Avenue in the City of Sheboygan when her vehicle was struck by another vehicle driven by Guineth Sweeney. On June 20, 1999, Batt sought medical treatment for injuries she sustained during the accident. Thereafter, she continued to receive medical treatment for maladies related to the accident. On June 24, 1999, Batt was contacted by Sweeney's insurer, Allstate. Batt gave a tape-recorded interview to an Allstate claims representative, answering questions about medical care she had received because of the accident and also about damage sustained by her vehicle. In July 1999, Batt signed forms from Allstate authorizing the release of her medical records.

¶ 3. In November 1999, Batt began communicating with Michael Kahn, an Allstate claims adjuster, regarding payment from Allstate for health care costs and wage losses which were related to the accident. In her affidavit, Batt said she was concerned about her income loss, particularly lost overtime, which had been an important part of her total income. She said she told Kahn that her income had been substantially reduced since the accident due to work restrictions. She said Kahn told her that he would give her $6700 for her claim. When Batt asked Kahn specifically about the medical bills, she said he replied by saying, "The highest we can go is $7,700 plus the medical bills." Batt said she voiced concern about the coverage her health insurance would provide for future medical bills should her back problems continue. Batt said Kahn told her that her health insurance should cover those bills. Batt said she told Kahn that she was still being treated for her back and wanted to know what would happen if she ended up having major problems with her back. Batt maintains that Kahn specifically told her, "We'll cross that bridge when we come to it."

¶ 4. Subsequently, in January 2000, Batt agreed to accept a check from Allstate in the amount of $7700. However, in her summary judgment affidavit, Batt emphasized that she believed the $7700 "represented payment for my wage loss up to that point." Allstate sent the Batts a check in the amount of $7700. On the face of the check and typed in a space labeled "In Payment Of' was the statement that this was "FINAL SETTLEMENT OF ANY AND ALL CLAIMS ARISING FROM BODILY INJURY CAUSED BY ACCIDENT ON 06/18/99." When Batt received the check, she said the only thing she did was verify that the amount was $7700, but that she "did not read other information on the face of the check but simply signed the check below [her] husband's name." Allstate also sent a letter and a release form. Batt said Kahn did not tell her that he would be sending a release form along with the check and Batt did not sign or return the release to Allstate.

¶ 5. Batt said she had continued to believe that Allstate would cover her accident-related medical expenses until she was contacted by the Sheboygán Clinic several weeks later and informed that Allstate had refused to pay for them. Thereafter, the Batts filed a personal injury action on February 21, 2001. On May 18, 2001, Mayline Company, Barbara Batt's employer, brought a cross-claim against Allstate and a counterclaim against the Batts for subrogation to the extent of the benefits paid as a result of accident-related injuries.

¶ 6. On April 2, 2001, Allstate filed an answer to the Batts' claim asserting the affirmative defense of accord and satisfaction. On April 4, 2001, Allstate filed a motion for summary judgment claiming that when the Batts cashed the $7700 check, this amounted to an accord and satisfaction, settling all claims. Allstate also included a counterclaim asserting that the suit initiated by the Batts constituted a frivolous action pursuant to Wis. Stat. § 802.05 (1999-2000). The court granted Allstate's summary judgment motion, but denied its claim that the Batts brought the suit frivolously. The Batts appeal and Allstate cross-appeals.

¶ 7. It is well established that we apply the same summary judgment methodology as the circuit court. Smith v. Dodgeville Mut. Ins. Co., 212 Wis. 2d 226, 232, 568 N.W.2d 31 (Ct. App. 1997). We first examine the complaint to determine whether it states a claim, and then we review the answer to determine whether it joins a material issue of fact or law. Id. If we conclude that the complaint and answer are sufficient to join issue, we examine the moving party's affidavits to determine whether they establish a prima facie case for summary judgment. Id. at 232-33. If they do, we look to the opposing party's affidavits to determine whether there are any material facts in dispute that entitle the opposing party to a trial. Id.

¶ 8. The Batts raised in their pleadings and affidavits the defense that they were induced by Kahn's misrepresentation to sign and cash the check and that they would not have accepted the check absent this misrepresentation. Thus, the Batts' claim is that they were fraudulently induced to enter into the contract of settlement. Allstate raised the affirmative defense of "accord and satisfaction." An "accord and satisfaction" is an agreement to discharge an existing disputed claim; it constitutes a defense to an action to enforce the claim. Flambeau Prods. Corp. v. Honeywell Info. Sys., Inc., 116 Wis. 2d 95, 112, 341 N.W.2d 655 (1984). Like other contracts, an accord and satisfaction requires an offer, an acceptance, and consideration. Id.

¶ 9. Allstate argues that the Batts' claim of misrepresentation does not raise issues of material fact or law that preclude summary judgment. This is incorrect. Evidence of any fraud is sufficient to impeach a settlement. See Grob v. Nelson, 8 Wis. 2d 8, 13, 98 N.W.2d 457 (1959). The circuit court stopped short in its analysis when it did not take into consideration the Batts' extrinsic evidence before rendering its decision. After examining Allstate's affidavits and determining that they established a prima facie case for summary judgment, the court failed to take the next step; it did not take into account the Batts' affidavits in. order to determine whether there existed any material facts in dispute that entitled the Batts to a trial. See Smith, 212 Wis. 2d at 232-33. The court erred when it stopped short of reviewing the opposing party's affidavits and stated:

In determining whether there is accord and satisfaction, the intent of the parties can be gleaned from two things. One, it can be gleaned from the face of the document itself, and if the document is unambiguous, that is the only location that the intent of the parties can be gleaned.
If, in fact, there's ambiguity in the document, then the Court can turn to what the parties have provided to the Court. .. that is, extrinsic evidence about the intent of the parties, vis-a-vis these depositions of Mr. Khan and other folks who were apparently involved in the negotiation process.

¶ 10. The court then looked to the check containing Allstate's "final settlement" language to determine whether it was unambiguous. It found the language to be clear. It then took a wrong turn in its analysis:

There's nothing in the document [check] that suggests to me that there was any trickery or anything to mislead anybody as to what it was .... So to come along now and say, well, it was all a mistake, that's not what I intended, flies in the face of what was on the document itself; and the Court can disregard such statements because they're completely unnecessary to ascertain the intent being clear on the face of the document by the unambiguous statements contained there in. (Emphasis added.)

¶ 11. In short, the court assumed that fraud has to be shown on the face of the document itself. It then concluded: "[T]here is no need to turn to any extrinsic evidence to ascertain the intent of the parties. The intent of the parties is specified on the document." The court determined that the only question remaining was whether Batt had assented to the intent of the parties by endorsing the check and receiving the funds. The court found that she had assented, that she had received full settlement of the claim and that Allstate's defense of accord and satisfaction had been proved.

¶ 12. We do not agree with the court's analysis. As the Batts correctly point out, even the "parol evidence rule" — which prohibits the introduction of extrinsic evidence to contradict the express language of an unambiguous contract — does not prevent the introduction of a claim of misrepresentation. Caulfield v. Caulfield, 183 Wis. 2d 83, 92, 515 N.W.2d 278 (Ct. App. 1994). "A material misrepresentation of fact may render a contract void or voidable.” Bank of Sun Prairie v. Esser, 155 Wis. 2d 724, 731, 456 N.W.2d 585 (1990). "The parol evidence rule does not exclude evidence to show misrepresentation as a ground for avoidance of the contract." Id.

¶ 13. The elements of fraud are a false representation made with intent to defraud and reliance by the injured party on the misrepresentation. Ritchie v. Clappier, 109 Wis. 2d 399, 404, 326 N.W.2d 131 (Ct. App. 1982). We hold that Barbara Batt's affidavit alleged fraud. In her affidavit, Batt stated that she told Kahn her income had been substantially reduced since the accident because of her injuries and that she was particularly concerned about the loss of overtime, which represented an important part of her income. Batt stated she voiced concern to Kahn about the coverage her health insurance would provide for future medical bills should her back problems continue. Batt said Kahn told her that her health insurance should cover those bills. Batt said she told Kahn that she was still being treated for her back and wanted to know what would happen if she ended up having major problems. Batt maintains that Kahn specifically told her, "We'll cross that bridge when we come to it."

¶ 14. Finally, Batt's affidavit states that she understood her communications with Kahn to mean that when she agreed to accept the $7700 check (and in fact did sign and cash the check) that she had accepted payment for her wage loss up until January and for her personal responsibility for medical expenses related to the accident. Batt stated that when the Sheboygan Clinic contacted her for payment of her medical expenses, she told it that Allstate had agreed to be responsible for those expenses. She was later told that Allstate had refused to pay. In short, Batt's affidavit alleges these elements of fraud: that Kahn made a misrepresentation, one that he did not intend to back, and that she relied upon it when she accepted and cashed the check. Her affidavit sufficiently presents material issues of fact requiring a trial.

¶ 15. On remand, we encourage the circuit court and the parties to bear in mind that in cases where claims of misrepresentation are made, the facts of the case are particularly important to determine if reliance on the misrepresentation is justifiable. Bank of Sun Prairie, 155 Wis. 2d at 732-33. Further, when fraud is pled, the facts of each case that shall be considered must include the intelligence and. experience of the misled individual(s) and the relationship between the parties to determine whether the individual(s) acted reasonably when relying on the misrepresentation. Id. at 734.

¶ 16. Costs are denied to all parties.

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

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


author: NETTESHEIM, EJ.

text:
    Eric M. Schmitz, Plaintiff-Appellant, v. Firstar Bank Milwaukee, Defendant-Respondent, Putnam Mutual Funds Corporation, Putnam Investments, Northern Trust Company, Fortis Investors, Inc., and Putnam Fiduciary Trust Company, Defendants.
    Court of Appeals

      No. 01-2139.

      Submitted on briefs March 7, 2002.

    Decided April 10, 2002.

    2002 WI App 123
    (Also reported in 647 N.W.2d 379.)

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Joseph G. Doherty and Eric M. Schmitz of Doherty Law Offices, S.C. of West Bend.

      On behalf of the defendant-respondent, the cause was submitted on the brief of Gary E Lantzy of Kohner, Mann & Kailas, S.C. of Milwaukee.
    Before Nettesheim, RJ., Brown and Snyder, JJ.

       Petition to review granted 9-26-02.

   NETTESHEIM, EJ.

¶ 1. Eric M. Schmitz appeals from a summary judgment dismissing his action against Firstar Bank Milwaukee. Schmitz alleged claims of negligence and conversion against Firstar after Firstar accepted for deposit checks payable to him that he had not endorsed. The checks, paid from Schmitz's assets with Putnam, a codefendant in the underlying action, were fraudulently endorsed by Schmitz's financial advisor, James O'Hearn — both with the stamp of O'Hearn's corporation, Georgetown Financial, and one with Schmitz's forged signature. Both checks were deposited in a Georgetown account and Schmitz did not receive the proceeds of this transaction.

¶ 2. Schmitz argues that the circuit court erred (1) in its determination that the transaction between O'Hearn and Firstar was a valid negotiation of the check when Firstar accepted a check made payable only to Schmitz which did not contain his endorsement and deposited it in an account of a third party and (2) in its determination that the limited powers of attorney which Schmitz granted to Georgetown in. 1992 were binding as to O'Hearn's fraudulent acts in 1996 and 1998 and that those limited powers of attorney authorized Georgetown to negotiate the checks in question on Schmitz's behalf.

¶ 3. We conclude that the 1992 limited powers of attorney authorized O'Hearn to negotiate checks on Schmitz's behalf. Because this issue is dispositive, we do not reach Schmitz's additional argument as to the absence of his endorsement on the checks. Sweet v. Berge, 113 Wis. 2d 61, 67, 334 N.W.2d 559 (Ct. App. 1983). We affirm the circuit court's grant of summary judgment in favor of Firstar.

FACTS

¶ 4. O'Hearn was the primary owner and chief executive officer of Georgetown Financial. Georgetown was an investment, insurance and financial service business engaged in providing investment advising and consultation, purchases and sales of securities and annuities, and financial and estate planning.

¶ 5. In the early 1990's, Schmitz opened investment accounts with Georgetown with O'Hearn serving as his principal contact. In July and August 1992, Schmitz executed limited powers of attorney to Georgetown for the immediate purpose of liquidating certain life insurance policies. However, both documents contained language that went beyond the authority to liquidate life insurance policies. The final sentence of the July document stated, "Power of Attorney also applies to stocks, bonds and other securities." The August document went even further, stating, "Power of Attorney also applies to stocks, bonds, CD's, annuities, savings accounts, and other securities."

¶ 6. From 1992 until 1998, O'Hearn purchased and sold various Putnam mutual funds purportedly for Schmitz's benefit and ownership. On four separate occasions from 1996 to 1998, O'Hearn sold mutual funds from Schmitz's Putnam accounts without Schmitz's authority or direction. On each of these occasions, O'Hearn requested that Putnam issue a check in Schmitz's name to be mailed to Schmitz at Georgetown's office. The two checks at issue on appeal, in the amounts of $6173.21 and $58,599.19, were issued to "Eric M. Schmitz c/o Georgetown Financial." O'Hearn deposited each of the checks into Georgetown's account at Firstar. O'Hearn endorsed the $6173.21 check issued by Putnam by forging Schmitz's name and using the Georgetown stamp. O'Hearn endorsed the $58,599.19 check issued by Putnam by using only the Georgetown stamp.

¶ 7. On July 12, 1999, Schmitz brought this action against Firstar alleging negligence based on its failure to secure proper identification from the endorser of the checks, namely O'Hearn, and its failure to ascertain the genuineness of the endorsements by failing to secure all needed endorsements on the $58,599.19 check. Schmitz alleged that Firstar knew or should have known that the endorser did not have the authority to cash the Putnam checks and that the endorsements were forged. Schmitz additionally alleged conversion of funds wrongfully removed from his accounts.

¶ 8. On December 15, 2000, Schmitz filed a motion for partial summary judgment as to the $58,599.19 check, which did not contain any endorsement, forged or otherwise, by Schmitz. On December 19, 2000, Firstar filed a motion for summary judgment as to both checks arguing that the powers of attorney executed by Schmitz authorized Georgetown to endorse the Putnam checks and receive payment of the checks, on Schmitz's behalf. Firstar argued that there were no genuine issues of material fact as to whether Georgetown had actual authority to endorse the checks.

¶ 9. In a memorandum decision filed April 4, 2001, the circuit court granted Firstar's motion for summary judgment as to both checks based on the limited powers of attorney granted to Georgetown by Schmitz in 1992. The court determined that the language of the powers of attorney authorized Georgetown to act on behalf of Schmitz with respect to negotiating the Putnam checks. The court found that there was no material issue of fact as to Firstar's authority to deposit the Putnam checks in Georgetown's account. Schmitz filed a motion for reconsideration on April 11, 2001, which was denied. On June 13, 2001, the court entered an order for summary judgment in favor of Firstar. Schmitz appeals.

DISCUSSION

¶ 10. Summary judgment is appropriate when there is no genuine issue as to any material fact and the moving party is entitled to judgment as a matter of law. Wis. Stat. § 802.08(2) (1999-2000). A summary judgment motion presents a question of law that we review de novo. Wis. Conference Bd. of Trustees of the United Methodist Church v. Culver, 2000 WI App 132, ¶ 25, 237 Wis. 2d 343, 614 N.W.2d 523, aff'd, 2001 WI 55, 243 Wis. 2d 394, 627 N.W.2d 469. Despite our de novo standard of review, we value a trial court's ruling on the matter. Id.

¶ 11. With respect to the $58,599.19 check, Schmitz first argues that the absence of any endorsement by him or on his behalf prohibited Firstar from negotiating the check. The Putnam check was issued to "Eric M. Schmitz c/o Georgetown Financial." Firstar argues that regardless of the absence of Schmitz's endorsement,, the powers of attorney granted by Schmitz to Georgetown authorized Georgetown to endorse and deposit both of the Putnam checks. We agree.

¶ 12. Construction of a power of attorney presents a question of law that we review de novo. Borchardt v. Wilk, 156 Wis. 2d 420, 427, 456 N.W.2d 653 (Ct. App. 1990). We accept Schmitz's argument that he executed two limited powers of attorney to Georgetown in July and August of 1992 for the immediate purpose of authorizing Georgetown to liquidate certain insurance policies. However, the final sentence of the July 1992 limited power of attorney broadened the powers granted by stating, "Power of Attorney also applies to stocks, bonds and other securities." The final sentence of the August 1992 limited power of attorney uses even broader language in providing, "Power of Attorney also applies to stocks, bonds, CD's, annuities, savings accounts, and other securities."

¶ 13. Schmitz contends that the 1992 powers of attorney were expressly "limited" to specific 1992 transactions and did not authorize the 1996 and 1998 transactions at issue on appeal. However, while the powers of attorney authorized Georgetown to liquidate life insurance policies, they also gave Georgetown limited powers of attorney with respect to stocks, bonds, CD's, annuities, savings accounts, and other securities. The clear import of this language granted Georgetown the authority to act on behalf of Schmitz in the limited area of his financial affairs as pertaining to investments and accounts. O'Hearn's liquidation of Schmitz's Putman assets, albeit fraudulent, fell squarely within this grant of authority.

¶ 14. Schmitz relies on Rountree v. Denson, 59 Wis. 522, 527, 18 N.W. 518 (1884), in support of the application of the "universal rule" to the broad language contained in the powers of attorney. There, the court stated, "The rule is universal that where 'there is a power of attorney to do a particular act followed by general words, these general words are not to be extended beyond what is necessary for doing that particular act for which the power of attorney is given.'" Id. at 527-28 (quoted source omitted). Schmitz's reliance on Rountree is misplaced.

¶ 15. The purpose of the power of attorney in Rountree was to give the grantee authority to accept service of process in order to procure a partition of lands, or to deed and properly convey land and "generally to do any and all things necessary to be done and performed in or about the procuring any such partition." Id. at 527. The supreme court held that this general catchall language did not authorize the grantee's later attempt to convey the land for his own private benefit. ("Such being the manifest object and purpose of the power of attorney, its meaning and the authority under it, was in nowise enlarged by the general expressions and words of ratification and confirmation therein contained.") Id. Thus, the court concluded that the grantee had exceeded the scope of the authority granted in the power of attorney. Id. at 528.

¶ 16. Here, the limited powers of attorney granted Georgetown authority to liquidate certain insurance policies. As in Rountree, in that grant of authority, Schmitz authorized Georgetown generally to "as my attorney to act in my place, name and stead to do everything that is required, as fully as if done by me personally, to register and gain acknowledgment of the Assignment of Life Insurance Policy form(s), and accomplish the surrender of the life insurance polic(ies) identified below." That general grant, "to do everything that is required," was limited to negotiations pertaining to his life insurances policies. However, unlike the power of attorney in Rountree, the limited powers of attorney in this case went on to separately grant Georgetown power of attorney with respect to "stocks, bonds, CD's, annuities, savings accounts, and other securities." This additional grant of authority was not limited in scope. We reject Schmitz's contentions to the contrary.

¶ 17. Having rejected Schmitz's argument that O'Hearn did not have actual authority to redeem his Putnam assets, Schmitz alternatively contends O'Hearn's actual authority terminated in 1994 when O'Hearn's securities license was suspended and he began to engage in acts of disloyalty to Schmitz. Schmitz cites to Restatement (Second) of Agency (1958):

§ 111. Loss of Qualification of Principal or Agent.
The loss of or failure to acquire a qualification by the agent without which it is illegal to do an authorized act, or a similar loss or failure by the principal, of which the agent has notice, terminates the agent's authority to act if thereafter he [or she] should infer that the principal, if he [or she] knew the facts, would not consent to the further exercise of the authority.
§ 112. Disloyalty of Agent.
Unless otherwise agreed, the authority of an agent terminates if, without knowledge of the principal, he [or she] acquires adverse interests or if he is otherwise guilty of a serious breach of loyalty to the principal.

¶ 18. Based on the Restatement, Schmitz contends that O'Hearn's actual authority to act on his behalf terminated when O'Hearn had reason to believe that Schmitz would no longer wish for O'Hearn to act on his behalf. While this may be true, it does not bear upon the question of Firstar's liability. The comment to §112 addresses liability to third persons. It provides, "[i]f, after being so disloyal that his [or her] authority to act is terminated, the agent deals with a third person on account of the principal, the power of the agent to make the principal a party to the transaction is not affected . .. unless the third person has notice of the facts." Id. at § 112 cmt. c. Here, it is undisputed that Firstar had no knowledge of O'Hearn's illegal conduct. Nor did Firstar have any reasonable basis to suspect or know that O'Hearn was acting beyond, or without, Schmitz's authority. Therefore, regardless of whether O'Hearn's authority may have terminated, he had the ability to make Schmitz a party to the transaction with Firstar by virtue of the limited powers of attorney.

CONCLUSION

¶ 19. We conclude that the limited powers of attorney granted by Schmitz to Georgetown authorized O'Hearn to negotiate the checks in question with Firstar on Schmitz's behalf. Because Georgetown had such authority, we conclude that there is no genuine issue of material fact as to whether Firstar was negligent in depositing the checks in Georgetown's account. We affirm the circuit court's grant of summary judgment in favor of Firstar.

By the Court. — Judgment affirmed.

       When speaking of "Putnam," we are referring to the defendants Putnam Mutual Funds Corporation, Putnam Investments, and Putnam Fiduciary Trust Company.

       James O'Hearn, who is not a party to this action, was charged and convicted of criminal fraud and is currently serving a federal prison sentence.

       Unlike the checks at issue on appeal which were issued to Schmitz "c/o Georgetown Financial," the other two checks issued by Putnam were issued to both Eric M. Schmitz and Georgetown. The circuit court also granted summary judgment to Firstar with respect to these checks, but Schmitz does not challenge this ruling on appeal.

       Schmitz's action also joined Putnam and Northern Trust Company. Schmitz voluntarily dismissed his action against Northern Trust Company on October 11, 1999, and Putnam is not a party to this appeal. We note that Schmitz filed an amended summons and complaint on April 19, 2000, which omits Northern Trust Company and joins Fortis Investors, Inc. as a defendant.

       With the exception of the last sentence of the document, the July and August 1992 limited powers of attorney were identical, stating:
      I, Eric M. Schmitz, as owner of the life insurance policies identified below, do hereby designate Georgetown Financial Corporation as my attorney to act in my place, name and stead to do everything that is required, as fully as if done by me personally, to register and obtain acknowledgement of the Assignment of Life Insurance Policy form(s), and accomplish the surrender of the life insurance policies) identified below and negotiation of their cash values, and including any other requested information. Answers to questions may be provided by telephone or fax (#(414) 241-3376). Power of Attorney also applies to stocks ....
      The July 1992 limited power of attorney was signed by Schmitz and his wife, with handwritten notations as to the policy names and numbers of the insurance policies in question. The August 1992 limited power of attorney was signed by Schmitz and indicated the insurance policy in question.

       Firstar argues that this issue is waived because Schmitz did not raise it in the circuit court. Schmitz argues otherwise. We need not resolve this conflict because we choose to address the issue on the merits and we reject Schmitz's argument.

       Because we hold that O'Hearn was acting with Schmitz's actual authority, we need not address Schmitz's argument under the law of "apparent authority."