author: DAVID T. PROSSER, J. ANN WALSH BRADLEY, J. N. PATRICK CROOKS, J.

text:
    Terry D. Van Lare and Norman J. Wachtl, Plaintiffs-Appellants, v. Vogt, Inc., Defendant-Respondent.
    Supreme Court

      No. 01-3051.

      Oral argument March 10, 2004.

    Decided July 9, 2004.

    2004 WI 110
    (Also reported in 683 N.W.2d 46.)

      BRADLEY, J., concurs.
    CROOKS, J., concurs.
    Wilcox, J., joins.
    Sykes, J., took no part.

      For the plaintiffs-appellants there were briefs by James W. Hammes and Cramer, Multhauf & Hammes, LLP, Waukesha, and oral argument by James W. Hammes.

    For the defendant-respondent there was a brief by Terence P. Cahill and Brewer & Cahill, LLP, Oconomo-woc, and oral argument by Terence P. Cahill.

   DAVID T. PROSSER, J.

¶ 1. This case is before the court on certification by the court of appeals. The issue certified is whether the economic loss doctrine bars a claim for strict responsibility misrepresentation in a real estate transaction where the alleged misrepresentations are contained in a contract between the parties and the claimed damages are solely for pecuniary loss.

¶ 2. Consistent with our precedent and the policies underlying the economic loss doctrine, we narrow the certified question to cover commercial real estate transactions. We conclude that application of the economic loss doctrine bars Van Lare's claim of strict responsibility misrepresentation in a commercial real estate contract. Van Lare did not ask the jury to decide whether Vogt was guilty of intentional misrepresentation; he asked for a verdict on strict responsibility misrepresentation. Thus, Van Lare sought liability under a theory in which Vogt could have been one of two innocent parties to a transaction that went awry. The fact that the contract involved real estate instead of a manufacturer's "product" does not alter the outcome in this commercial case.

¶ 3. We decline Van Lare's request to order a new trial "in the interest of justice." Van Lare could have sought a remedy under alternative legal theories, but he failed to file a timely breach of contract claim and withdrew every misrepresentation claim except his claim for strict responsibility misrepresentation. Consequently, we affirm the decision of the circuit court.

FACTUAL BACKGROUND

¶ 4. On June 22, 1993, Terry D. Van Lare and Norman J. Wachtl (Van Lare) entered into a written contract with Vogt, Inc. (Vogt) to purchase a 55-acre parcel of real property in Waukesha County. The property in question was the site of a gravel pit owned and operated by Vogt. The Option to Purchase contained a clause in which Vogt warranted and represented to Van Lare that Vogt had no notice or knowledge of any:

Underground storage tanks or any structural, mechanical, or other defect(s) of material significance affecting the property, including but not limited to inadequacy for normal use of mechanical systems, waste disposal systems and well/unsafe well water according to State standards, or the presence of any dangerous or toxic materials or conditions affecting the property. Excepting one Ready-Mix drum (filled with concrete) which may be buried on north-west corner of property to be conveyed herein.

¶ 5. The Option to Purchase also contained an "as is" provision which stated: "Upon closing, Buyer accepts this property in 'as is' condition and represents to Seller that their purchase of the property is made on the basis of their own investigation and testing." Both parties to the contract were represented by counsel.

¶ 6. In September 1993 the parties amended the Option to Purchase when the parties became aware that "a certain parcel of said property. . . had previously been conveyed by Seller to another party." This discovery required a $20,000 reduction in the purchase price.

¶ 7. By November 1993 Van Lare purchased the property in accordance with the Option. The purchase price at closing was $213,000. Prior to purchasing the property, Van Lare was aware that illegal dumping of refuse had occurred on a regular basis near the entrance of the gravel pit. Despite this knowledge, the only tests Van Lare conducted prior to the closing were tests to determine if there was mineable bank-run material in the gravel pit.

¶ 8. From 1993 to 1999 Van Lare operated a landscaping business on the site and continued to excavate gravel from the pit in accordance with a conditional use permit issued by Waukesha County. In time, Van Lare submitted an application for residential development of the property. During public hearings to consider the proposed residential development, Van Lare learned that construction debris, including concrete, asphalt, fencing materials, PVC piping, pails, ropes, barrels, wood, and other types of materials had been buried on the site.

¶ 9. On April 19,1999, before the 6-year period of limitation had run on a potential breach of contract claim, Van Lare's attorney notified Vogt of the claimed contractual breach. See Wis. Stat. § 893.43. The letter stated in part:

It has now come to my clients' attention that numerous building materials and other items, including possibly oil and paints, were dumped at the site during the years of ownership by Vogt, Inc....
Photographs, which were taken on or about April 30, 1990 and which are contained in the files of the Waukesha County Park and Planning Commission office, reflect the nature and extent of the building materials and other items which were dumped on the property. In addition, interviews with former employees indicate conclusively that the company was aware of these activities even though they were not disclosed at the time the Offer to Purchase was executed.

¶ 10. The letter further stated that it was putting Vogt on notice that Vogt was liable for any costs and expenses that might be incurred in cleaning up the property and invited Vogt to undertake excavation or be present to observe excavation activities. Thereafter, on November 29, 1999, Van Lare commenced this action, seeking to recover costs involved in removing the buried building materials and debris from the site.

¶ 11. The Van Lare complaint asserted three causes of action: intentional misrepresentation, negligent misrepresentation, and strict liability misrepresentation. The strict liability (or strict responsibility) claim incorporated a statutory claim for fraudulent misrepresentation under Wis. Stat. § 100.18. Van Lare's complaint did not allege breach of contract, presumably because such a claim was now barred by Wis. Stat. § 893.43, a six-year period of limitation.

¶ 12. Prior to trial, Vogt filed a motion in limine requesting the court to allow Van Lare to submit evidence on only the intentional misrepresentation claim because, Vogt asserted, the economic loss doctrine barred recovery under the other claims. The court denied the motion but, in Van Lare's view, the court intimated that it would not submit both the intentional misrepresentation and strict liability claims to the jury.

¶ 13. At the conclusion of the trial testimony, Vogt again moved for dismissal of the strict liability claim, asserting that the economic loss doctrine barred recovery under that claim. The court denied the motion. Following that ruling, Van Lare withdrew the intentional misrepresentation claim, the negligent misrepresentation claim, and, to the extent it was a separate claim, the Wis. Stat. § 100.18 claim. Instead, Van Lare opted to submit only the strict liability claim. Acting on that theory, the jury returned a verdict in favor of Van Lare and awarded $375,000 in damages.

¶ 14. Following the verdict, Vogt moved for judgment notwithstanding the verdict on the ground that the economic loss doctrine barred Van Lare from recovering purely economic damages under a strict liability misrepresentation claim. Although the court concluded that the evidence presented was sufficient to sustain the jury's verdict, the court nonetheless granted Vogt's motion because it concluded, contrary to its earlier rulings, that Van Lare's strict liability misrepresentation claim was barred by the economic loss doctrine.

¶ 15. Van Lare appealed, and the court of appeals certified the case to this court pursuant to Wis. Stat. § (Rule) 809.61.

ANALYSIS

A. Applicability of the Economic Loss Doctrine to Commercial Real Estate Contracts

¶ 16. The threshold issue in this case is whether the economic loss doctrine applies to commercial real estate contracts such as the Option to Purchase and resulting purchase agreement in this case.

¶ 17. The economic loss doctrine, first adopted by this court in Sunnyslope Grading, Inc. v. Miller, Bradford & Risberg, Inc., 148 Wis. 2d 910, 437 N.W.2d 213 (1989), is a judicially created doctrine that seeks "(1) to maintain the fundamental distinction between tort law and contract law; (2) to protect commercial parties' freedom to allocate economic risk by contract; and (3) to encourage the party best situated to assess the risk [of] economic loss, the commercial purchaser, to assume, allocate, or insure against that risk." Daanen & Janssen, Inc. v. Cedarapids, Inc., 216 Wis. 2d 395, 403, 573 N.W.2d 842 (1998).

¶ 18. The doctrine holds that a commercial purchaser of a product cannot recover solely economic losses from the manufacturer under negligence or strict liability theories, particularly where the warranty given by the manufacturer specifically precludes the recovery of such damages. Sunnyslope, 148 Wis. 2d at 921. We have repeated this principle on numerous occasions. Digicorp, Inc. v. Ameritech Corp., 2003 WI 54, ¶ 33, 262 Wis. 2d 32, 662 N.W.2d 652; Wausau Tile, Inc. v. County Concrete Corp., 226 Wis. 2d 235, 245-46, 593 N.W.2d 445 (1999); State Farm Mut. Auto. Ins. Co. v. Ford Motor Co., 225 Wis. 2d 305, 315, 592 N.W.2d 201 (1999); Daanen, 216 Wis. 2d at 402.

¶ 19. Wisconsin courts have gradually enlarged the economic loss doctrine from its root in Sunnyslope. Although we defined the economic loss doctrine narrowly in Sunnyslope, the narrowness of the definition corresponded to the facts in that case — application of the economic loss doctrine to a product. Daanen, 216 Wis. 2d at 403. Earlier this term, we referred to the economic loss doctrine more broadly as "a judicially-created remedies principle that operates generally to preclude contracting parties from pursuing tort recovery for purely economic or commercial losses associated with the contract relationship." Tietsworth v. Harley-Davidson, Inc., 2004 WI 32, ¶ 23, 270 Wis. 2d 146, 677 N.W.2d 233.

¶ 20. Although this court has not previously addressed the specific issue of whether the economic loss doctrine applies to commercial real estate contracts, other courts addressing the issue under Wisconsin law have concluded that it does. For instance, in Kailin v. Armstrong, 2002 WI App 70, 252 Wis. 2d 676, 643 N.W.2d 132, the court of appeals concluded that "[although the economic loss doctrine was developed in the context of defective product claims, it applies when real estate is the subject of the contract." Id., ¶ 27; see also Mose v. Tedco Equities—Potter Rd. Ltd. P'ship, 228 Wis. 2d 848, 859, 598 N.W.2d 594 (Ct. App. 1999) (holding that there is no reason to forgo application of the economic loss doctrine because real estate is the "product" in question); Metal Processing Co. v. Amoco Oil Co., 926 F. Supp. 828, 832 (E.D. Wis. 1996) (finding case indistinguishable from others applying the economic loss doctrine "merely because the 'product' in this case is land as opposed to a piece of equipment or a building"); Raytheon Co. v. McGraw-Edison Co., 979 F. Supp. 858, 870 (E.D. Wis. 1997) (reasoning that economic loss doctrine applies because when "two sophisticated commercial entities enter into an arms-length transaction for the sale of industrial property, there is equal bargaining strength on both sides of the table and equal opportunity to inspect the property").

¶ 21. While we do not decide today whether the broader conceptualization of the economic loss doctrine in Tietsworth covers all real estate transactions, we conclude that the economic loss doctrine may not be discarded simply because a transaction involves real estate. In this case, we have a written, bargained-for contract for the sale of commercial-use land between two sophisticated parties represented by counsel during the negotiation process. This is the kind of situation that is tailor made for the application of traditional contract law.

¶ 22. Van Lare is forced to base his claim on a misrepresentation theory rather than a breach of contract theory because the period of limitation on the contract claim had run. Wis. Stat. § 893.43. He asserts that it should be of no consequence whether the theory of liability is based in tort or contract, provided that the misrepresentation is contained in the contractual commitment of the parties. Essentially, Van Lare argues that the economic loss doctrine bars claims arising from breach of tort duties but should not be extended to bar claims arising from breach of contractual duties. He also asserts that the economic loss doctrine's intent was to limit, damage claims to those damages contemplated by the parties when entering into a contract, not to prevent recovery of those damages altogether.

¶ 23. In truth, Van Lare asks us to forgo application of the economic loss doctrine to his strict liability misrepresentation claim because the normal application of the doctrine leaves him without a remedy. However, the economic loss doctrine did not necessarily preclude other claims, e.g., (1) breach of contract; (2) violation of Wis. Stat. § 100.18 (fraudulent representation); and (3) intentional misrepresentation in some form. Unfortunately, in the first two of these potential claims, the period of limitation for bringing an action expired. The intentional misrepresentation claim, which offers a narrow, still imprecise exception to the economic loss doctrine, was dropped. We cannot overrule our precedent to allow Van Lare's tort claim simply because his own action or inaction has barred other claims.

¶ 24. Contrary to Van Lare's position, applying the economic loss doctrine in this case furthers the policies that justify the doctrine's existence.

¶ 25. One general premise underlying the economic loss doctrine is that contract law is better suited to deal with purely economic loss in the commercial arena than tort law. Daanen, 216 Wis. 2d at 404 (citing E. River S.S. Corp. v. Transamerica Delaval, Inc., 476 U.S. 858, [872] (1986)). Contract law "is designed to effectuate exchanges and to protect the expectancy interests of parties to private bargained-for agreements" and "seeks to hold commercial parties to their promises." Id. In contrast, tort law focuses on "protecting society as a whole from physical harm to person or property." Id. at 405.

¶ 26. The economic loss doctrine exists to preserve the distinction between contract and tort law. Digicorp, 262 Wis. 2d 32, ¶ 34. To allow tort recovery for a misrepresentation claim grounded in a bargained-for contract would blur the distinction we seek to preserve. Tort recovery in a contract case can only be justified in circumstances such as intentional misrepresentation that undermine the foundation of the economic loss doctrine.

¶ 27. Van Lare had ample opportunity to force Vogt to allocate the risk in their contract. Van Lare not only had counsel during the negotiations of the Option to Purchase, but also had the time and opportunity to investigate and test the subject property prior to closing. The economic loss doctrine encourages parties to allocate economic risks in this manner. It forces purchasers in a position to assess the risks of economic loss to insure against those risks. Daanen, 216 Wis. 2d at 403. If we were to allow recovery for strict liability misrepresentation in this case, we would seriously undermine a purchaser's incentive to insure against risks by bargaining for remedies. At the same time, we would impair contracting parties' freedom to allocate the economic risks of the transaction by subjecting them to potential tort damages even when they agree to forgo such damages.

¶ 28. Accordingly, we discern no reason to except Van Lare's strict liability misrepresentation claim from application of the economic loss doctrine under the facts of this case. When the economic loss doctrine applies, as it does here, it bars misrepresentation claims in the absence of a recognized exception. As a result, the circuit court correctly concluded that Van Lare's strict liability misrepresentation claim is barred by the doctrine. Under existing law, there is no exception to the economic loss doctrine for strict liability misrepresentation in a purely commercial setting.

B. Exceptions to the Economic Loss Doctrine

¶ 29. Van Lare alternatively requests that we create an exception to the economic loss doctrine for strict liability misrepresentation claims when the sale of real estate is involved. In support of this request, he notes the "frapd in the inducement" exception in our case law. Van Lare adds that claims of intentional misrepresentation and strict liability misrepresentation carry a similar burden of proof, Kain v. Bluemound East Indus. Park, Inc., 2001 WI App 230, ¶ 42, 248 Wis. 2d 172, 635 N.W.2d 640, as well as the same measure of damages.

¶ 30. We recognized a "fraud in the inducement" exception to the economic loss doctrine in Digicorp, 262 Wis. 2d 32, ¶ 3, but we were not able to reach a majority decision on the scope of that exception. The Digicorp court addressed tort claims grounded in the theory of intentional misrepresentation, or "fraud in the inducement," saying " 'fraud in the inducement' presents a special situation where parties to a contract appear to negotiate freely — which normally would constitute grounds for invoking the economic loss doctrine —but where in fact the ability of one party to negotiate fair terms and make an informed decision is undermined by the other party's fraudulent behavior." Id., ¶ 48 (quoting Huron Tool & Eng'g Co. v. Precision Consulting Servs., Inc., 532 N.W.2d 541, 545 (Mich. Ct. App. 1995)). We noted that Wisconsin has a longstanding principle that parties need a background of truth and fair dealing in commercial relationships and that a party to a business transaction is under a duty to disclose facts basic to the transaction if he knows the other is about to enter into the transaction with a mistaken or incomplete understanding of those facts, and the other party could reasonably expect a disclosure of those facts. Id., ¶¶ 36-37.

¶ 31. We believe that there are substantial, qualitative differences between the doctrines of intentional misrepresentation and strict liability misrepresentation. These differences preclude us from granting a corresponding exception from the economic loss doctrine for strict liability misrepresentation.

¶ 32. The tort of strict liability misrepresentation arose from the judiciary's determination that in some situations, the accuracy of representations is so important that "intent to deceive and good-faith belief in the truth of the representation are immaterial." Ollerman v. O'Rourke Co., 94 Wis. 2d 17, 25, 288 N.W.2d 95 (1980) (quoting Whipp v. Iverson, 43 Wis. 2d 166, 169-70, 168 N.W.2d 201 (1969)). Strict liability misrepresentation places the loss flowing from certain types of unintentional misrepresentations on the "innocent" defendant rather than the "innocent" plaintiff. Merrill Lynch, Pierce, Fenner & Smith, Inc. v. Boeck, 127 Wis. 2d 127, 139, 377 N.W.2d 605 (1985) (quoting Gauerke v. Rozga, 112 Wis. 2d 271, 280, 332 N.W.2d 804 (1983)); Stevenson v. Barwineck, 8 Wis. 2d 557, 562, 99 N.W.2d 690 (1959) (citing cases). A plaintiff asserting a claim of strict liability misrepresentation is only required to show that the defendant: (1) made the representation on the defendant's personal knowledge or under circumstances in which he necessarily ought to have known the truth or untruth of the statement; and (2) had an economic interest in the transaction from which he expects to gain some economic benefit. Boeck, 127 Wis. 2d at 138-39. The certification memorandum observes that strict responsibility misrepresentation may well apply in situations where the parties are not in equal bargaining positions or the purchaser may not be in the best position to assess the risk of economic loss — two assumptions upon which the economic loss doctrine rests.

¶ 33. A plaintiff alleging intentional misrepresentation, on the other hand, faces a more substantial burden of proof. Such a plaintiff must prove that the defendant: (1) either knew the representation was untrue or made the representation recklessly without caring whether it was true or false; and (2) made the representation with intent to deceive and induce the plaintiff to act upon it to the plaintiffs pecuniary damage. Ollerman, 94 Wis. 2d at 25.

¶ 34. The misrepresentation in strict liability misrepresentation often does not rise to the level of the deceitful behavior exhibited in intentional misrepresentation cases. Perhaps for that reason, the United States Court of Appeals for the Seventh Circuit correctly predicted that we "would not allow a negligence or strict liability misrepresentation claim seeking to recover economic damages." Cooper Power Sys., Inc. v. Union Carbide Chems. & Plastics Co., 123 F.3d 675, 682 (7th Cir. 1997). If Van Lare believed that the facts of his case constituted "fraud in the inducement," he was free to pursue a claim alleging intentional misrepresentation. At trial, he withdrew that claim.

C. New Trial in the Interest of Justice

¶ 35. Van Lare argues that his choice to dismiss certain claims was based upon the circuit court's original conclusion that the economic loss doctrine did not bar his strict liability claim. Accordingly, he suggests that, in the interest of justice, he should be awarded a new trial to pursue an intentional misrepresentation claim or a claim under Wis. Stat. § 100.18, or both.

¶ 36. Wisconsin Stat. § 751.06 provides us with discretion to prevent miscarriages of justice. It provides in pertinent part:

[I]f it appears from the record that the real controversy has not been fully tried, or that it is probable that justice has for any reason miscarried, the court may reverse the judgment or order appealed from, regardless of whether the proper motion or objection appears in the record, and may direct the entry of the proper judgment or remit the case to the trial court for the entry of the proper judgment or for a new trial, and direct the making of such amendments in the pleadings and the adoption of such procedure in that court, not inconsistent with statutes or rules, as are necessary to accomplish the ends of justice.

This court's interpretation of the statute dictates that a new trial may be ordered in two situations: (1) if the real controversy has not been fully tried; or (2) if it is probable that justice has for any reason miscarried. Morden v. Cont'l AG, 2000 WI 51, ¶ 88, 235 Wis. 2d 325, 611 N.W.2d 659. We are normally quite reluctant to exercise our discretion to grant a new trial under § 751.06, and we will do so only when the circumstances are "exceptional." Id., ¶ 100.

¶ 37. In this case, the "real controversy" was Van Lare's contract claim. That claim was not tried because the period of limitation ran out. Van Lare then had a choice whether to move forward with an intentional misrepresentation claim or a strict liability claim, or perhaps both. He chose strict liability and that controversy was fully tried, with Van Lare receiving a successful jury verdict. The verdict was ultimately vacated by the circuit court. Had the circuit court not changed its position, the strict liability jury verdict would have been overturned on appeal. It is a bit late now for Van Lare to argue that "the real controversy" was intentional misrepresentation and that intentional'misrepresentation was not fully tried. After all, Vogt repeatedly argued that the only claim that should be presented to the jury was intentional misrepresentation. The circuit court, in the pre-trial motions hearing, stated: "Well, certainly the case will go forward with the intentional misrepresentation. That’s conceded by the defense." Yet, Van Lare sent strict liability to the jury instead. We do not think Van Lare can prevail on grounds that the real controversy was not tried.

¶ 38. Van Lare then turns to the second prong of the statute and asserts a miscarriage of justice. Initially, Van Lare could have brought a claim for breach of contract. The period of limitation did not bar such a claim until June 22, 1999, six years after the signing of the Option to Purchase. Van Lare knew about the potential contract breach prior to that date, as evidenced by his attorney's letter to Vogt. Van Lare instead chose to pursue tort remedies. Subsequently, Van Lare withdrew his intentional misrepresentation and Wis. Stat. § 100.18 claims.

¶ 39. It is true that on July 9, 2001, before trial, the circuit court stated:

As a practical matter, I would not submit to the jury both intentional and strict. We would do one or the other, so we're probably talking intentional. So, the only other one we would look at is negligent misrepresentation, if that becomes applicable in testimony. I'll let you renew your argument at the time of trial.

At the close of evidence at trial, Vogt's counsel again objected to strict liability but lost. Van Lare's counsel then chose strict liability without making a new argument about submitting both theories. He made an understandable strategic decision to go forward on the theory that offered the optimum chance for success with the jury but he did not simultaneously preserve an objection about going forward with two theories.

¶ 40. Looking at the evidence, including the "as is" clause in the option, the need to revise the June 22 option twice before the closing, and the unutilized opportunity for investigation of the site, we are not convinced that justice has miscarried. In our opinion, any injustice that may have beset Van Lare was largely avoidable and, therefore, does not overcome our usual reluctance to grant a new trial.

CONCLUSION

¶ 41. We conclude that the economic loss doctrine precludes strict liability misrepresentation claims involving a commercial real estate contract negotiated at arm's length between parties represented by counsel. By so holding, we conform to our precedent and uphold the policies underlying the economic loss doctrine, maintaining the fundamental distinction between the law of contract and the law of tort.

¶ 42. We find no justification for creating an exception to the economic loss doctrine for strict liability misrepresentation claims in a commercial real estate context; and, because we feel that any injustice suffered by Van Lare was largely avoidable, we find no basis on which to award Van Lare a new trial to pursue alternative theories of liability.

By the Court. — The judgment and order of the circuit court are affirmed.

¶ 43. DIANE S. SYKES, J., did not participate.

ANN WALSH BRADLEY, J.

{concurring).

¶ 44. I write separately to forestall revisionist interpretations of the holding in Digicorp, Inc. v. Ameritech Corp., 2003 WI 54, 262 Wis. 2d 32, 662 N.W.2d 652, by those of us who participated in the case. The holding of the case is explained in a footnote to the Digicorp opinion. 262 Wis. 2d 32, ¶ 5, n. 2. The footnote states:

A majority of this court, Justices Crooks, Prosser, and Sykes, rejects the broad exception that the court of appeals adopted in Douglas-Hanson. However, because Justice Sykes would not adopt any fraud exception, there is also a majority of this court, Justices Bradley, Bablitch and Sykes, that rejects the narrow exception that was adopted by the Huron Tool court. Two Justices, Bradley and Bablitch, dissent stating that the Douglas-Hanson exception should apply. A majority holds that a fraud in the inducement exception to the economic loss doctrine exists, but there is an even split as to what the fraud in the inducement exception entails. While four Justices agree that there should be an exception, only two Justices, Crooks and Prosser, agree that the Huron Tool exception should be adopted. Chief Justice Abrahamson and Justice Wilcox did not participate in this case.

¶ 45. After the opinion was released, the plaintiff, Digicorp, joined Bacher Communications, Inc., a third-party defendant, in a motion for reconsideration on the grounds that the court did not have a clear majority by which to reverse and remand the decision to the court of appeals. They asked us to clarify our reasoning and the import of the holding as set forth in footnote 2. The third-party defendant's motion for reconsideration stated:

Public policy dictates that the courts should strive to make good law or, at least, clarify the law. In the absence of the ability to do so, the courts should strive to uphold the law as it exists.... In essence, the Court here provided a decision without an opinion. Ultimately, the Court has determined that they will overrule the Court of Appeals, but can offer no reasons of precedential value as to why the Court of Appeals is wrong, or what rule of law is correct.

We denied the motion for reconsideration without comment or further clarification.

¶ 46. Those of us who participated in Digicorp may offer differing interpretations of the intent and consequences of footnote 2. However, when asked for clarification in the motion for reconsideration, we denied the motion without comment, leaving the interpretation for another day. That day will come when a full court can rule on the issue in a case that properly presents it. This is not such a case.

N. PATRICK CROOKS, J.

(concurring).

¶ 47. While I agree with the majority's holding in this case, I write, today, to emphasize the action taken in our decision in Digicorp, Inc. v. Ameritech Corporation, 2003 WI 54, 262 Wis. 2d 32, 662 N.W.2d 652, regarding the fraud in the inducement exception to the economic loss doctrine. Even though the majority only briefly discusses Digicorp, majority op., ¶ 30, I write separately to stress that the Digicorp majority clearly rejected a broad fraud in the inducement exception to the economic loss doctrine. Digicorp, 262 Wis. 2d 32, ¶ 3.

¶ 48. The Digicorp decision extensively discussed Huron Tool and Engineering Company v. Precision Consulting Services, Inc., 209 Mich. App. 365, 532 N.W.2d 541 (1995), and Douglas-Hanson Company, Inc. v. BF Goodrich Company, 229 Wis. 2d 132, 598 N.W.2d 262 (Ct. App. 1999), two cases dealing with fraud in the inducement exceptions to the economic loss doctrine.

¶ 49. The Huron Tool decision adopted a narrow fraud in the inducement exception, concluding that a "plaintiff may only pursue a claim for fraud in the inducement extraneous to the alleged breach of contract." Huron Tool, 209 Mich. App. at 374. This narrow exception to the economic loss doctrine does not apply when the fraud in the inducement is interwoven with the contract. Digicorp, 262 Wis. 2d 32, ¶ 3. Thus, in applying this narrow exception, a court must "determine whether the fraud involved matters for which risks and responsibilities were extraneous to, or interwoven into, the contract." Id., ¶ 53.

¶ 50. In contrast, the Douglas-Hanson decision proposed a broad fraud in the inducement exception to the economic loss doctrine, holding "that the economic loss doctrine does not bar claims for intentional misrepresentation when the misrepresentation fraudulently induces a party to enter into a contract." Douglas-Hanson, 229 Wis. 2d at 149-50. In other words, this exception would appear to permit a tort action whenever it is claimed that a contract was induced by fraud. Digicorp, 262 Wis. 2d 32, ¶ 39.

¶ 51. Even though a majority in Digicorp did not adopt Huron Tool's narrow fraud in the inducement exception, a majority of the justices participating in Digicorp clearly rejected Douglas-Hanson's broad fraud in the inducement exception to the economic loss doctrine. Id., ¶ 3. Five members of the court participated in the Digicorp decision. While four justices recognized a fraud in the inducement exception to the economic loss doctrine, only two of these four justices would have adopted a narrow exception similar to Huron Tool, and two other justices would have adopted the broader exception set forth in Douglas-Hanson. Digicorp, 262 Wis. 2d 32, ¶ 5 n.2. See also Tietsworth v. Harley-Davidson, Inc., 2004 WI 32, ¶¶ 32-34, 270 Wis. 2d 146, 677 N.W.2d 233. The fifth justice rejected the Douglas-Hanson exception, and would not recognize any fraud in the inducement exception. Thus, while we did not reach a decision in Digicorp as to the extent of the fraud in the inducement exception to the economic loss doctrine, a majority recognized that there is such an exception, and rejected the broad Douglas-Hanson exception. Digicorp, 262 Wis. 2d 32, ¶ 5 n.2.

¶ 52. For the foregoing reasons, I respectfully concur.

¶ 53. I am authorized to state that Justice JON E WILCOX joins this concurrence.

       For ease of reference, we will refer to "Van Lare" in the singular. We recognize that Norman Wachtl, Van Lare's co-appellant, joins in this appeal.

       All references to the Wisconsin Statutes are to the 2001-02 edition unless otherwise indicated.

       Wisconsin Statute § 893.43 provides as follows:
      An action upon any contract, obligation or liability, express or implied, including an action to recover fees for professional services, except those mentioned in s. 893.40, shall be commenced within 6 years after the cause of action accrues or be barred.
      The option to purchase was signed on June 22, 1993, meaning the period of limitation would have run on June 22, 1999. This action commenced on November 29, 1999.

       In tort, a duty is put upon an individual member of the community simply because he is such a member, but, in contract, the duty comes into existence only when the duty-bearer has voluntarily undertaken to assume it. Daanen & Janssen, Inc. v. Cedarapids, Inc., 216 Wis. 2d 395, 404 n.4, 573 N.W.2d 842 (1998).

       The motion was denied on September 30, 2003. Only four justices considered the motion, because Justice Bablitch retired from the court prior to its consideration.

       Our decision in Digicorp, Inc. v. Ameritech Corp., 2003 WI 54, ¶ 5 n.2, 262 Wis. 2d 32, 662 N.W.2d 652, explained the division of the court on the fraud in the inducement exception as follows:
      A majority of this court, Justices Crooks, Prosser and Sykes, rejects the broad exception that the court of appeals adopted in Douglas-Hanson. However, because Justice Sykes would not adopt any fraud exception, there is also a majority of this court, Justices Bradley, Bablitch and Sykes, that rejects the narrow exception that was adopted by the Huron Tool court. Two Justices, Bradley and Bablitch, dissent stating that the Douglas-Hanson exception should apply. A majority holds that a fraud in the inducement exception to the economic loss doctrine exists, but there is an even split as to what the fraud in the inducement exception entails. While four Justices agree that there should be an exception, only two Justices, Crooks and Prosser, agree that the Huron Tool exception should be adopted. Chief Justice Ábrahamson and Justice Wilcox did not participate in this case.


source: Caselaw Access Project

author: DAVID T. PROSSER, J.

license: Public Domain

text:
    State of Wisconsin, Plaintiff-Respondent-Petitioner, v. Johnnie Carprue, Defendant-Appellant.
    Supreme Court

      No. 02-2781-CR.

      Oral argument January 14, 2003.

    Decided July 9, 2004.

    2004 WI 111
    (Also reported in 683 N.W.2d 31.)

      For the plaintiff-respondent-petitioner the cause was argued by Alan Lee, assistant attorney general, with whom on the brief was Peggy A. Lautenschlager, attorney general.
    For the defendant-appellant there was a brief by Stephanie G. Rapkin, Mequon, and oral argument by Stephanie G. Rapkin.

   DAVID T. PROSSER, J.

¶ 1. The State seeks review of a published decision of the court of appeals that reversed Johnnie Carprue's (Carprue) conviction for second-degree sexual assault. The court of appeals concluded that the conviction had to be reversed because Carprue was denied due process by a circuit judge who appeared partial to the prosecution. State v. Carprue, 2003 WI App 148, 266 Wis. 2d 168, 667 N.W.2d 800. We conclude that when this case is analyzed in light of appropriate legal principles and standards, the result compelled by the court of appeals does not hold. While prudence would have counseled less assertive conduct from the circuit judge, the law does not demand a reversal of Carprue's conviction.

¶ 2. To decide this matter, we reflect on judicial authority to call and interrogate witnesses at trial, the limitations to that authority, and how abuse of that authority in a criminal tried may impact a defendant's due process rights. Carprue asserts that the circuit judge presiding over his trial abused her authority, and, as a result, denied Carprue his constitutional right to a fair trial. In addition, Carprue brings an ineffective assistance of counsel claim predicated on his trial attorney's failure to object to the circuit judge's actions.

¶ 3. The State argues, and we agree, that while the circuit judge's actions were inadvisable, the defendant has failed to demonstrate he is entitled to reversal of his conviction under any applicable legal theory. Accordingly, we reverse.

FACTS AND PROCEDURAL HISTORY

¶ 4. Johnnie Carprue was released from the Milwaukee House of Correction (HOC) on May 9, 2001. A day later, Carprue was taken into custody on a charge of second-degree sexual assault. The trial on this charge was held between August 29 and September 4, 2001, in the Milwaukee County Circuit Court, Jacqueline D. Schellinger, Judge.

¶ 5. The complaining witness, T.B., and Carprue provide sometimes similar, sometimes vastly different accounts of the events that transpired following Carprue's release. Both agree that T.B. became acquainted with Carprue through her sister's boyfriend, who was also serving time in the HOC. While Carprue was confined at HOC, his communication with T.B. was primarily by telephone, although T.B. visited Carprue on two or three occasions and also saw him at a court appearance.

¶ 6. As Carprue's release date drew near, he needed a place to stay. Because Carprue was to be a subject of "in-house" monitoring under the auspices of In-House Correctional Services, he was required to have a fixed address for monitoring purposes. Carprue attempted to make living arrangements with his aunt, but the arrangements fell through. T.B. offered Carprue a place to stay, even though she had only recently moved to Milwaukee and was living with her sister. Carprue accepted, and when he was released on the afternoon of May 9th, he was taken to T.B.'s sister's residence.

¶ 7. Carprue did not stay at that address long. The sister's boyfriend did not want him there. Carprue left, he called T.B. later that evening, and the two agreed to meet. Ultimately, they proceeded to Carprue's aunt's residence.

¶ 8. At this point, the accounts begin to diverge. T.B. testified that when they arrived at the aunt's residence, they watched a movie in the living room. She indicated she fell asleep during the movie and woke up a few hours later to braid Carprue's cousin's hair before he left for school. She testified that she and Carprue did not engage in physical contact of a sexual nature up to that point.

¶ 9. Carprue offers a different version of how the two spent the late evening and early morning hours of May 9th and 10th. Carprue testified that the two were in the living room for only a brief period. During that time, the two were "kissing and hugging," and T.B.'s pants were unbuttoned. When Carprue's aunt entered from outside, Carprue threw his coat over T.B. so that she could fasten her pants. At about 3:30 in the morning, Carprue and T.B. then entered a bedroom where Carprue's cousin and a friend were playing video games. Carprue testified that during the time in the bedroom with the others, he was fondling T.B.'s vagina without objection, and that her pants were again unbuttoned.

¶ 10. Despite the inconsistencies in their testimony, both Carprue and T.B. recount that around 5:00 a.m., T.B. braided Carprue's cousin's hair. Both agree that thereafter T.B. entered a back bedroom of the apartment.

¶ 11. T.B. testified that she was initially alone in the room and that she removed her pants to be more comfortable. She then lay down on a makeshift sleeping pallet atop one blanket and beneath another, and fell asleep. T.B. testified that she awoke when she sensed the presence of Carprue lying next to her. She said Carprue asked for a kiss and she obliged. He then asked if "he could have some." T.B. took this to mean sexual intercourse. She testified that she answered "no" and reminded him, as they had discussed in their telephone conversations, that her religious beliefs precluded her from having pre-marital sex. According to T.B., he responded "You not going to give me none?" and she again answered in the negative, to which he grinned and told her he was going to "take some" anyway. T.B. testified that at first she thought he was kidding, but soon knew he was serious when he pinned her down and raped her, overcoming her repeated verbal and physical attempts to stop him.

¶ 12. Carprue presented a starkly different picture of events. In his version, he briefly left T.B. alone in the back bedroom, and when he returned, he lay next to her on the makeshift bed. T.B. had not fallen asleep. He testified that they talked for a while. Carprue denied asking T.B. for a kiss, and testified that she initiated kissing. He then recited in explicit detail alleged consensual sexual activities. He indicated that at some point their sexual intercourse became "rough," but nonetheless remained consensual.

¶ 13. In Carprue's version of events, he exited the bedroom, which had no door separating it from the kitchen, and met his aunt who was entering the kitchen from the living room. He and his aunt had a brief conversation regarding breakfast; then Carprue went back into the bedroom. T.B. showed Carprue her coat, which had blood on it. The coat had apparently been underneath them during sexual intercourse. T.B. became angry and they had an argument. According to Carprue, T.B. was upset because the two were not supposed to have "gone that far" and that she had violated the tenets of her religious beliefs. Carprue testified that he explained to her that she did not have to confess her transgressions and that no one would find out. Carprue testified that she calmed down and said she still wanted to accompany him to his mother's house later that morning. The two fell asleep. Around noon, they awoke and T.B. left.

¶ 14. For her part, T.B. recalls that Carprue abruptly ended the nonconsensual intercourse when he heard his aunt enter the kitchen. She testified that, when he left, she went to the bathroom to clean up the blood on her clothing, but eventually gave up and returned to the bedroom to gather her jacket and purse. However, Carprue would not let her leave because she was so upset, and she eventually appeased him by lying down with him, only to sneak out when he fell asleep.

¶ 15. After she left, T.B. testified that she returned to her sister's apartment. She did not call the police. She talked with her sister about what happened, however, and her sister convinced her to seek medical treatment at the hospital. A nurse examined T.B. and later offered an expert opinion that the injuries she observed in T.B.'s vaginal area were consistent with forceful sexual contact and that the act of sexual intercourse was forced.

¶ 16. A nurse at the hospital called the police. Detective John Reesman of the Milwaukee Police Department testified that he arrived at Mt. Sinai Hospital where an initial investigation had begun. After being interviewed, T.B. led officers to Carprue's aunt's residence, where she pointed out Carprue, who happened to be sitting on the porch. By the time Detective Reesman parked his squad car and arrived at the front door, Carprue was no longer on the porch. The detective knocked on the door, and Carprue's aunt answered. The detective was permitted to enter the apartment and, once inside, saw Carprue in the kitchen at the rear of the apartment. When Carprue spotted Detective Rees-man, who was accompanied by a uniformed police officer, he fled. He ran down a back stairwell that led to the building's basement. Carprue was eventually discovered hiding under the front porch, which he accessed through a window in the basement. When asked at trial why he fled, Carprue responded:

Cause I was supposed to be at In-House at one house, I knew I was violating it back at my auntie's house.
I was supposed to be expedited [sic] to Gary [Indiana] for charges down there, that was dropped while I was in custody with the Milwaukee Police Department.
But I was informed also, that once I got out of custody, they may bring the warrant back up.
So it was like — I was both scared from violating being at another house while I was on In-House, and the real thing, my thinking they was trying to transfer me back to Gary.

¶ 17. Earlier in the proceeding, T.B. testified that Carprue told her that he would be released from the HOC to "house arrest." After a sidebar with counsel, Judge Schellinger paused to clarify what "house arrest" entailed. She explained to the jury that "house arrest" was electronic surveillance, in which the subject of the surveillance is required to wear a "bracelet" that connects to a phone device so that when a monitoring agent calls, the agent can be sure that the subject is present at the residence.

¶ 18. Later, with the jury absent, Carprue explained to the judge that he was not under electronic surveillance, as stated by the court. He was subject to an "in-house" monitoring system.

¶ 19. During Carprue's testimony the following day, when the "in-house" system again came up, Judge Schellinger called for a sidebar with counsel and then acknowledged to the jury that her earlier explanation was in error. She explained that "in-house" monitoring does not involve a "bracelet." Rather, it simply requires a subject to be at a specified location when a monitoring agent calls. Judge Schellinger described the pertinent characteristics of "in-house" monitoring and took judicial notice of these facts.

¶ 20. When Carprue finished testifying, the jury left the courtroom for lunch. After the jury was out, Judge Schellinger stated: "I want to make sure that the questions that were asked and answers that were given, conform to In-House [Correctional [SJervices reports." Judge Schellinger then called Kenneth Morrow, the director of In-House Correctional Services to the stand. Morrow was present because he was on Carprue's witness list in the capacity of "custodian of records" of Carprue's "in-house" file. The judge questioned him about "in-house" procedures.

¶ 21. First, Judge Schellinger inquired about documentation in Carprue's file relating to his two addresses. The file contained the aunt's address as well as T.B.'s sister's address, with the former having been "Xed out" in favor of the latter. Morrow testified that he did not know why the placement was changed. Morrow's testimony confirmed that law enforcement authorities had Carprue's aunt's address in Carprue's file, so that, had they been attempting to track Carprue down, they could have started with her address.

¶ 22. Second, Judge Schellinger inquired into the technological compatibility of the "in-house" monitoring program with certain optional phone company services such as call waiting. During his testimony, Carprue had alluded to the fact that he had difficulty setting up telephonic monitoring at his aunt's house because she had certain phone company services that were incompatible with the "in-house" program's telephone monitoring system. Carprue's explanation suggested that the "in-house" agents could not monitor him over the phone if certain phone services were present. Morrow testified that if there were any such incompatibility, someone from "In-House" would stop by in person to check on the subject. At the same time, Morrow confirmed that In-House Correctional Services preferred that a phone line not have "call management, where a computer answers the phone instead of a person."

¶ 23. Finally, Judge Schellinger asked Morrow about the procedure employed when "In-House" personnel are unable to contact a subject of "in-house" monitoring, as well as what information subjects of monitoring would know about the consequences of a failure to make contact. Morrow's answers suggested that Car-prue had been informed before being placed on "in-house" monitoring that, if he could not be contacted, the service would report his violation to the court that ordered the monitoring. The police would not be called. However, Morrow conceded that, in some cases, the police could be called if authorities had obtained a bench warrant.

¶ 24. All this took place while the jury was absent from the courtroom. After Morrow stepped down, Judge Schellinger explained:

The court really never gets involved in the examination of witnesses, particularly in front of a jury, but there have been things said by the defendant in this case which are inconsistent with the way In-House operates.
That's why I have asked Mr. Morrow to come up here.
I'm not commenting on whether or not the defendant has been untruthful or whatever, his understanding is different than that which is the case.

¶ 25. During the jury's absence, Judge Schellinger also questioned Carprue regarding a letter he had written to a judge in a different case. In the letter, Carprue requested leniency, and referred to his fiancée. There were some inconsistencies between the letter and Carprue's testimony. The letter was in a file that Judge Schellinger may have used to explain to the jury why Carprue had been in the Milwaukee County HOC, but this is not clear. Several times Judge Schellinger instructed the jury that it was not to accord any significance to the fact that Carprue had been in the HOC and on "in-house" monitoring. In order to defuse any lingering suspicion about his status, Judge Schellinger explained that "Carprue was the subject of a criminal complaint being filed in a traffic matter on February 23rd, 2001." The court in the other case released Carprue on a signature bond and, as a condition of the bond, Carprue was to be placed on "in-house" monitoring.

¶ 26. When the jury returned to the courtroom, the State called Kenneth Morrow as a rebuttal witness. The State asked Morrow what the "in-house" program tells its subjects about consequences of violating the terms of release. Morrow responded in much the same manner as when the jury was not present. Carprue's counsel then cross-examined Morrow, getting him to admit that the subject of in-house monitoring is never expressly informed that the police would not be informed if the subject of monitoring could not be contacted.

¶ 27. The jury returned a guilty verdict on second-degree sexual assault. Carprue appealed. Car-prue, 266 Wis. 2d 168. He alleged that the circuit court committed reversible error by calling and questioning Morrow and by questioning Carprue regarding the letter he wrote to another judge. He also challenged his conviction on ineffective assistance of counsel grounds, based on his attorney's failure to object to the court's actions. Id., ¶ 7. The court of appeals reversed Carprue's conviction, holding that Judge Schellinger's conduct demonstrated that the court was acting as a "hinting advocate" for the prosecution. Id., ¶ 16. It held that Judge Schellinger's conduct "threatened the fairness of the trial," id., ¶ 13, and exceeded the parameters of acceptability, resulting in "the appearance of advocacy and partisanship." Id., ¶ 18. The court of appeals concluded that Judge Schellinger "could no longer maintain impartiality and objectivity." Id.

¶ 28. In dissent, Judge Fine reasoned that, because Carprue's attorney did not object, his claim of error should be handled as an ineffective assistance of counsel claim. Id., ¶ 26. Under that analysis, Judge Fine concluded that Carprue could show no prejudice because the jury was not present when the conduct at issue took place. Id., ¶ 27.

DISCUSSION

¶ 29. From the outset, Carprue's appeal has focused on Judge Schellinger's calling and questioning of Kenneth Morrow and her questioning of Carprue about statements contained in his letter to another judge. The issues presented by the court's actions could be addressed under any of three legal theories:

(1) Judge Schellinger erred by exceeding the implicit limitations of her authority to call and interrogate witnesses under Wis. Stat. § 906.14;
(2) Carprue was denied the effective assistance of counsel because his counsel did not object to Judge Schellinger's actions, thereby waiving a claim of error under § 906.14; or
(3) Judge Schellinger violated Carprue's due process rights to a fair trial before an impartial judge.

¶ 30. Carprue conflates two of these distinct legal theories by arguing that, when a judge exceeds her authority under § 906.14, such actions automatically constitute a structural defect that violates due process. Thus, Carprue advances only two theories. First, considering the judge's actions, Carprue was denied due process. Second, because his counsel did not object to the judge's actions, Carprue was denied the effective assistance of counsel. The court of appeals rendered a decision along this line, blending the principles of a § 906.14 error claim with a due process claim. The court disregarded "Carprue's second issue," ineffective assistance of counsel, on grounds that, having decided the case on due process grounds, there was no need to discuss ineffective assistance of counsel. See id., ¶ 19 n.3. We will discuss all three modes of analysis, relating the relevant facts to the applicable law.

A. Judicial Authority to Call and Question Witnesses

¶ 31. Wisconsin Stat. § 906.14 is titled "Calling and interrogation of witnesses by judge." It reads:

(1) Calling By Judge. The judge may, on the judge's own motion or at the suggestion of a party, call witnesses, and all parties are entitled to cross-examine witnesses thus called.
(2) Interrogation by Judge. The judge may interrogate witnesses, whether called by the judge or by a party.
(3) Objections. Objections to the calling of witnesses by the judge or to interrogation by the judge may be made at the time or at the next available opportunity when the jury is not present.

¶ 32. In substance, this rule is identical to Rule 614 of the Federal Rules of Evidence. Fed. R. Evid. 614. It is also based upon Wisconsin case law. Wisconsin Rules of Evidence, 59 Wis. 2d R, R200 (1973).

¶ 33. Under subsection (1), a judge may call witnesses on her own motion. There are no explicit limitations to this power, but limitations are implied by Wisconsin court decisions. The Judicial Council Committee's Note to subsection (1) reads in part: "It is expected that this authority will be used only in the exceptional case." Id.

¶ 34. Subsection (3) of § 906.14 authorizes objections, and it "defers the requirement of a timely objection ... to the next available opportunity when the jury is not present." Id. R202. This subsection appears to focus more on situations where the judge questions witnesses in front of a jury than where a judge questions a witness in a bench trial or outside the presence of a jury.

¶ 35. Given the explicit authority to object to a judge's action, Carprue could have challenged Judge Schellinger's decision to call Kenneth Morrow to the stand. He did not. He could have objected to a particular line of inquiry. He did not. He could have offered a motion in limine to bar the State from calling Morrow as a rebuttal witness. He did not. Consequently, Car-prue waived his right to object to the judge's actions.

¶ 36. There are several reasons why we are disinclined to overlook the defendant's failure to timely object. First, the general rule in Wisconsin is that issues not raised in the circuit court are deemed waived. State v. Polashek, 2002 WI 74, ¶ 25, 253 Wis. 2d 527, 646 N.W.2d 330; Apex Elec. Corp. v. Gee, 217 Wis. 2d 378, 384, 577 N.W.2d 23 (1998). This case is very different from State v. Hayes, 2004 WI 80, 273 Wis. 2d 1, 681 N.W.2d 203, where the defendant was able to point to a somewhat ambiguous statute to support the proposition that he did not have to object at trial to challenge the sufficiency of the state's evidence. In this case, the relevant statute, § 906.14, specifically addresses a party's right to object. Hence, as the court of appeals said in State v. Wolter, "[ojbjections to alleged judicial misconduct must be timely made. A failure to make a timely objection constitutes a waiver of objection." Wolter, 85 Wis. 2d 353, 373, 270 N.W.2d 230 (Ct. App. 1978).

¶ 37. Second, the policies underlying the waiver rule are especially well illustrated in this case. "The waiver rule exists to cultivate timely objections." State v. Erickson, 227 Wis. 2d 758, 766, 596 N.W.2d 749 (1999). Timely objections promote efficient judicial administration by encouraging parties and courts to correct or avoid errors at trial. Id. (citing State v. Agnello, 226 Wis. 2d 164, 173, 593 N.W.2d 427 (1999)); see also Vollmer v. Luety, 156 Wis. 2d 1, 11, 456 N.W.2d 797 (1990). They may eliminate the need for an appeal. In addition, the waiver rule diminishes any strategic incentive to induce error in order to gain access to appellate review. Erickson, 227 Wis. 2d at 766; Vollmer, 156 Wis. 2d at 11. Even where a timely objection fails to correct error, it creates a record that facilitates appellate review.

¶ 38. Here, the judge acted outside the presence of the jury. The defendant would not have been embarrassed in front of the jury by launching an immediate objection to either of the judicial actions about which he now complains. Upon receiving objection, the court might have terminated questions and avoided any questionable conduct.

¶ 39. Finally, because appellate courts are sensitive to judicial intervention by a trial judge in the form of judicial witnesses and judicial questioning, circuit courts are likely to be very cautious when they are given fair notice that their conduct raises concerns.

¶ 40. This court has dealt with these concerns since at least 1881. Yanke v. State, 51 Wis. 464, 466-67, 8 N.W. 276 (1881). We have always recognized judicial authority to call and interrogate witnesses but simultaneously admonished caution against judicial abuse. The tension is seen in the 1906 case of Komp v. State, where the court stated:

The right of a trial judge, in the exercise of a sound discretion, to examine or cross-examine a witness cannot be doubted. It is a right that is sometimes most valuable in the administration of justice, but it should be most carefully exercised, and the questions put should not betray bias or prejudice, nor carry to the jury the impression that the judge has made up his mind as to the facts. The questions should be framed to make clear that which is not clear. Within these limits there can be no just fault found with the fact that the trial judge asks some questions of a witness.

129 Wis. 20, 24, 108 N.W. 46 (1906) (citations omitted).

¶ 41. The struggle for balance appears again in State v. Nutley, 24 Wis. 2d 527, 129 N.W.2d 155 (1964), overruled on other grounds by State v. Stevens, 26 Wis. 2d 451, 463, 132 N.W.2d 502 (1965). In Nutley, we addressed a claim that, when the trial judge cross-examined the defendants in front of the jury, he "created the image of guilt in the jurors' eyes." Id. at 561. We noted that the judge questioned each defendant in relation to internal inconsistencies between his version of events and the version offered by the codefendants. We concluded that the court's conduct was justified in order "to clarify a relevant and highly material line of inquiry." Id. at 562. In reaching this conclusion, we quoted Judge Learned Hand's insight that:

It is permissible, though it is seldom very desirable, for a judge to call and examine a witness whom the parties do not wish to call. A judge is more than a moderator; he is charged to see that the law is properly administered, and it is a duty which he cannot discharge by remaining inert.

Id. (quoting United States v. Marzano, 149 F.2d 923, 925 (2d Cir. 1945)). In the conflicted manner typical of decisions in this area, we reasoned: "While the court cannot function as a partisan, it may take necessary steps to aid in the discovery of truth." Id.

¶ 42. In State v. Asfoor, the tension between the competing interests was very apparent. 75 Wis. 2d 411, 435-37, 249 N.W.2d 529 (1977). In Asfoor, the defendant appealed on the ground that the judge presiding over his criminal trial was biased against him. Id. at 424. The defendant directed the court's attention to several instances on the record that suggested bias, including what this court characterized as the judge's "somewhat active role in questioning witnesses." Id. at 437. The court stated:

There is a fine line which divides a judge's proper interrogation of witnesses and interrogation which may appear to a jury as partisanship. A trial judge must be sensitive to this fine line. However, the trial judge is more than a mere referee. The judge does have a right to clarify questions and answers and make inquiries where obvious important evidentiary matters are ignored or inadequately covered on behalf of the defendant and the state. A judge does have some obligation to see to it that justice is done but must do so carefully and in an impartial manner. The questions asked here were appropriate and disclose no improper motive nor partiality.

Id. The court concluded that the jury was not improperly influenced by "any action" of the court, and therefore rejected the defendant's bias claim. Id.

¶ 43. Over the years, this court has demonstrated particular concern about the impression that judicial questions might convey to a jury. There has been reluctance "to hold that the trial court's involvement in the elicitation of testimony during a trial resulted in such prejudice as to require a new trial." Schultz v. State, 82 Wis. 2d 737, 742, 264 N.W.2d 245 (1978). But the court did order a new trial when the judge interrogated a witness about a conviction that was reversed on jurisdictional grounds, and, as a result, "[t]he jury may very well have gained the impression that the defendant was guilty nevertheless." Benedict v. State, 190 Wis. 266, 272, 208 N.W. 934 (1926). In its opinion, the court commented that the practice of judicial interrogation "is a dangerous one, and if the discretion of the [trial] court in the premises is abused a new trial will be granted." Id. at 273.

¶ 44. The opinions of our appellate courts are replete with precatory admonitions that trial judges must not function as partisans or advocates, State v. Garner, 54 Wis. 2d 100, 104, 194 N.W.2d 649 (1972), or betray bias or prejudice, State v. Driscoll, 263 Wis. 230, 238, 56 N.W.2d 788 (1953), or engage in excessive examination, Breunig v. American Family Insurance Co., 45 Wis. 2d 536, 548, 173 N.W.2d 619 (1970), particularly in front of juries. Last term, we reversed a conviction after a suppression hearing in which a circuit judge crossed the line of propriety. State v. Jiles, 2003 WI 66, ¶ 39, 262 Wis. 2d 457, 663 N.W.2d 798 ("The court must not permit itself to become a witness or an advocate for one party. A defendant does not receive a full and fair evidentiary hearing when the role of the prosecutor is played by the judge and the assistant district attorney is reduced to a bystander.").

¶ 45. In the present case, if Carprue had objected, Judge Schellinger would likely have altered her conduct or taken the opportunity to more fully explain her actions. In addition, the prosecution would have had an opportunity to explain whether it had planned to call Morrow as a rebuttal witness before Judge Schellinger intervened. Since Carprue did not object, any error by the court went unchecked, and the record is devoid of any contemporaneous explanation that would have been present if an objection had been lodged.

¶ 46. We presume that circuit judges try to be fair and impartial in their conduct of trials, and this presumption must be overcome by proof except in extreme cases of structural error. A defendant's failure to promptly raise concerns or object when he believes a judge is committing error constitutes waiver.

¶ 47. The absence of any objection warrants that we follow "the normal procedure in criminal cases," which "is to address waiver within the rubric of the ineffective assistance of counsel." Erickson, 227 Wis. 2d at 766 (citing Kimmelman v. Morrison, 477 U.S. 365, 374 (1986); Lockhart v. Fretwell, 506 U.S. 364, 380 n.6 (1993) (Stevens, J., dissenting); State v. Smith, 207 Wis. 2d 258, 273, 558 N.W.2d 379 (1997); State v. Vinson, 183 Wis. 2d 297, 306-07, 515 N.W.2d 314 (Ct. App. 1994)).

B. Ineffective Assistance of Counsel

¶ 48. Carprue asserts that, if his attorney waived objection to Judge Schellinger's conduct, he was denied the effective assistance of counsel and his conviction should be reversed. This court follows the two-part analysis for ineffective assistance of counsel claims established by the Supreme Court in Strickland v. Washington, 466 U.S. 668, 687 (1984). See State v. Pitsch, 124 Wis. 2d 628, 633, 369 N.W.2d 711 (1985). Under this framework, Carprue must demonstrate "(1) that his counsel's representation was deficient and (2) that this deficiency prejudiced him so that there is a 'probability sufficient to undermine our confidence in the outcome' of the case." Erickson, 227 Wis. 2d at 768 (quoting Strickland, 466 U.S. at 694).

¶ 49. When this court reviews an ineffective assistance of counsel claim, its purpose "is not to grade counsel's performance." Strickland, 466 U.S. at 697. As a consequence, it is appropriate to assume for the sake of argument that counsel's performance was deficient and determine whether the claim can be disposed of on prejudice grounds. State v. Johnson, 133 Wis. 2d 207, 222, 395 N.W.2d 176 (1986); see also State v. Lindell, 2001 WI 108, 245 Wis. 2d 689, 629 N.W.2d 223." 'If it is easier to dispose of an ineffectiveness claim on the ground of lack of sufficient prejudice ... that course should be followed.'" Lindell, 245 Wis. 2d 689, ¶ 128 (quoting Strickland, 466 U.S. at 697).

¶ 50. The jury empanelled for Carprue's trial was unaware of Judge Schellinger's conduct; all the potentially objectionable activity took place outside the presence of the jury. Further, with respect to the questions posed to Carprue himself, none of the information disclosed was ever presented to the jury and thus could not have prejudiced the trier of fact.

¶ 51. As to calling and questioning Kenneth Morrow, Carprue concedes that none of Morrow's testimony should have been excluded on grounds of some eviden-tiary defect. As we understand Carprue's position, Morrow's otherwise relevant testimony was tainted because the jury would not have heard it but for Judge Schellinger's intervention. Thus, in order for there to be a colorable basis to find prejudice, we must not only assume that trial counsel could have and should have objected at the time, hut that the prosecution did not intend to present rebuttal evidence regarding the procedures of "in-house" monitoring.

¶ 52. Carprue's argument substantially departs from the record in the case. During the State's cross-examination of Carprue, the State asked: "Since when did you ever hear of the Milwaukee Police Department enforcing [i]n-[h]ouse?" Defense counsel immediately objected, saying: "I'm going to object. That calls for facts not in evidence." (Emphasis added.) These passages indicate that the prosecutor was well aware of the significance of in-house procedures before Judge Schell-inger intervened.

¶ 53. Even if we assume that the prosecution would not have attempted to establish evidence about "In-House" monitoring's actual procedures, we still cannot conclude that Carprue experienced prejudice from his trial counsel's failure to object. The jury could have believed both Morrow and Carprue — Morrow's testimony did not directly contradict Carprue's testimony. It is entirely possible that Carprue truly believed that, if the "In-House" monitoring agents were unable to contact him, the police would be called. Carprue's attorney successfully elicited testimony that subjects of supervision were not told directly that the police would not be called.

¶ 54. Carprue does not contend that all evidence of his flight from the police should have been suppressed. The issue of flight was collateral to the primary issue in the case, namely, whether Carprue sexually assaulted T.B. If the jury had fully accepted Carprue's explanation of his flight, it would have understood that he knew he had violated the conditions of his release from the HOC and was also potentially subject to criminal charges in Gary, Indiana. His own version of events — before Judge Schellinger ever questioned Morrow — damaged Carprue's credibility even more than the three prior convictions to which he admitted on direct examination.

¶ 55. The prosecution presented ample evidence to substantiate T.B.'s claim of sexual assault, including bloodstained clothing and the testimony of an expert witness who concluded that T.B.'s vaginal injuries were consistent with forceful sexual contact. We have attempted to present a broad overview of Carprue's trial to provide perspective. Even if the prosecution would not have presented Morrow's rebuttal testimony, the addition of that testimony did not distort the evidence or undermine our confidence in the outcome of the trial.

¶ 56. Carprue asserts that prejudice should be presumed in this case. He argues that "when errors occur the nature of which implies that the proceedings appear to be fundamentally unfair, it is necessary to deem them per se prejudicial." While there are no doubt rare circumstances where prejudice is presumed, see Smith, 207 Wis. 2d at 278; Erickson, 227 Wis. 2d at 770, the failure to object to a judge's possible violation of the authority to call and interrogate witnesses does not necessarily result in the "actual or constructive denial of the assistance of counsel altogether," a situation in which Strickland instructs that prejudice is to be presumed. Strickland, 466 U.S. at 692.

¶ 57. Carprue's claim that the proceedings were fundamentally unfair stems from his allegation of a biased judge, not the effectiveness of his counsel. If there were structural error in the trial, as addressed in the next section, such error could not be waived and there was therefore no need for an ineffective assistance of counsel claim.

C. Judicial Bias

¶ 58. Carprue contends that he was denied his due process right to a fair trial because Judge Schell-inger was not impartial. His evidence consists of the judge's actions in calling and questioning Morrow and in questioning Carprue.

¶ 59. "A fair trial in a fair tribunal is a basic requirement of due process." In re Murchison, 349 U.S. 133, 136 (1955); see also State v. Kywanda F., 200 Wis. 2d 26, 35, 546 N.W.2d 440 (1996); State v. Walberg, 109 Wis. 2d 96, 105, 325 N.W.2d 687 (1982); Asfoor, 75 Wis. 2d at 436; State ex rel. Mitchell v. Bowman, 54 Wis. 2d 5, 7, 194 N.W.2d 297 (1972). Case law makes clear that when a judge presides in a case where the judge has a direct, personal, substantial pecuniary interest in the outcome of the proceeding, Turney v. Ohio, 273 U.S. 510, 523 (1927), this constitutes "structural error" and would be subject to automatic reversal. State v. Harvey, 2002 WI 93, ¶ 37, 254 Wis. 2d 442, 647 N.W.2d 189.

¶ 60. If Judge Schellinger were actually biased, the question would be whether she should have presided at all. In this case, Carprue can do no more than allege that Judge Schellinger harbored general bias in favor of the State in criminal prosecutions based upon her actions. He presents no basis to conclude that Judge Schellinger had any direct stake in the outcome of the proceeding. "[O]nly in the most extreme cases would disqualification based on general allegations of prejudice or bias be constitutionally required." Kywanda F., 200 Wis. 2d at 36 (emphasis added) (citing Aetna Life Ins. Co. v. Lavoie, 475 U.S. 813, 821 (1986)); see also State v. Harrell, 199 Wis. 2d 654, 673, 546 N.W.2d 115 (1996) (Bradley, J., concurring). Otherwise, "most matters relating to judicial disqualification [do] not rise to a constitutional level." FTC v. Cement Institute, 333 U.S. 683, 702 (1948), quoted in Lavoie, 475 U.S. at 820. Instead, "matters of kinship, personal bias, state policy, [and] remoteness of interest would seem generally matters of legislative discretion." Turney, 273 U.S. at 523; see also Kywanda F., 200 Wis. 2d at 36.

¶ 61. Our legislature, in keeping with this principle, has established seven statutory situations that require judicial disqualification. Wis. Stat. § 757.19(2). The only statutory ground requiring disqualification that might apply under these facts is one that requires disqualification if a judge determines that he or she cannot, or it appears he or she cannot, act impartially in a case. Wis. Stat. § 757.19(2)(g). We concluded in State v. American TV & Appliance, 151 Wis. 2d 175, 182-83, 443 N.W.2d 662 (1989), that a judge's disqualification decision under this paragraph is subjective, that is, it is up to the judge's own determination. This provision "leaves the responsibility of withdrawal to the integrity of the individual judge." Harrell, 199 Wis. 2d at 665. If Judge Schellinger determined that she could not act impartially, she was required to disqualify herself.

¶ 62. "The reviewing court must objectively decide if the judge went through the required exercise of making a subjective determination." Id. at 664. By instructing the jury that it was to disregard any impression that it might have regarding whether she believed the defendant was guilty or not guilty, we can infer that Judge Schellinger did consider the matter of bias. See supra note 5. In any event, because Carprue's claim rests upon an allegation of general bias, the record would not have contained a more thorough record of Judge Sehellinger's subjective thought process unless the defendant had objected. In the absence of any objection, we assume that, by presiding, Judge Schell-inger believed that she could act in an impartial manner.

¶ 63. Carprue bases his claim on the broader argument that Judge Schellinger was anti-defendant. As we noted above, for judicial disqualification based on general allegations of bias to be constitutionally required, Carprue must demonstrate that Judge Sehellinger's conduct represented the "extreme" case. The record does not warrant such a finding.

¶ 64. In support of his contention that Judge Schellinger was partial, Carprue directs our attention to the same two incidents discussed above and characterizes Judge Sehellinger's motivation for her actions as animated by partiality and bias. As to the questioning of Morrow, Carprue asserts that Judge Sehellinger's purpose was to assist the prosecution by providing a blueprint to discredit Carprue's testimony. Carprue also asserts that Judge Sehellinger's questions to him required Judge Schellinger to go out of her way to obtain Carprue's file, canvass the file in search of negative information, and then question him about it in open court. However, both of these incidents have more benign explanations.

¶ 65. As to calling and questioning Morrow, the record reflects several points of confusion with respect to "in-house" monitoring. The majority of Judge Schellinger's questions to Morrow were directed at clarifying this confusion. While we discourage judicial intervention in this manner if it can be avoided, the fact that Judge Schellinger had taken judicial notice of "In-House" Correctional Services' practices warranted that she assure herself that the information the jury was instructed to accept as fact was accurate. See Wis. Stat. § 902.01(7); Moreover, Judge Schellinger dispelled any uncertainty about her motivation by explaining that she did not intend to imply that Carprue was being untruthful. Instead, she made clear that she was attempting to ascertain what "In-House" Correctional Services' procedures were, wholly apart from what Carprue believed them to be.

¶ 66. With respect to the file Judge Schellinger obtained, the file was more likely in her possession because she wanted to mitigate any impression the jury might have by virtue of the evidence as to how Carprue and T.B. met, than because she was on a mission to impeach Carprue. As previously stated, Carprue was in the Milwaukee County HOC and then on "in-house" monitoring. Several times Judge Schellinger explained that the jury was not to read anything into those facts. She also explained that Carprue's confinement at the HOC was the result of a traffic offense, to allay suspicion of his involvement in more substantial criminal conduct. While we do not condone the extensive questioning of Carprue about the letter to another judge, we cannot conclude that this action is so "extreme" as to deprive Carprue of due process.

¶ 67. Were we to overreact to this situation in the absence of any discernible harm to Carprue, we would establish a precedent that would undermine the court's ability to take any action that a defendant might view as helpful to the state, see Grover v. State, 61 Wis. 2d 282, 283, 212 N.W.2d 117 (1973) (allowing the state to introduce additional testimony after it rested), or adverse to the defendant, State v. Grinder, 190 Wis. 2d 541, 527 N.W.2d 326 (1995) (shackling the defendant during trial). Such a decision would seriously compromise the court's historic right to call and question witnesses. We cannot embrace Carprue's position that "No court should be allowed to call and question a witness prior to completion of the presentation of evidence."

¶ 68. Although we reverse the decision of the court of appeals, we stand with the court of appeals in calling upon our circuit courts to foster an atmosphere of perfect impartiality and to strive for absolute objectivity in carrying out judicial functions. Carprue, 266 Wis. 2d 168, ¶ 12 (citing Glasser v. United States, 315 U.S. 60, 82 (1942), superseded on other grounds by Fed. R. Evid. 104(a)).

CONCLUSION

¶ 69. Because there was no objection to Judge Schellinger's calling and questioning of Kenneth Morrow or questioning of the defendant, Carprue waived any claim of error in this regard. As a result, the facts of this appeal should be addressed under the rubric of ineffective assistance of counsel. Because Carprue cannot demonstrate prejudice, his claim fails. In addition, Judge Schellinger's conduct, while unusual and not recommended, did not deprive Carprue of his right to a fair trial. Therefore, there was no structural error in the trial and the court of appeals was incorrect in reversing Carprue's conviction for second-degree sexual assault. We reverse the decision of the court of appeals and reinstate the defendant's conviction.

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

All work on this opinion was completed on or before June 30, 2004. Justice Diane S. Sykes resigned on July 4, 2004.

       Wis. Stat. § 940.225(2)(a) (2001-02). All references to the Wisconsin Statutes are to the 2001-02 version unless otherwise noted.

       The testimony is again inconsistent as to details. Carprue testified that he asked T.B. if she wanted to go to the hack bedroom to go to sleep, but T.B. stated that she asked Carprue's cousin whether she could lay down in his room. Carprue indicated that he went in with her, and only left briefly to talk with his aunt, while T.B. testified that she went in the bedroom alone and fell asleep and Carprue entered later.

       Carprue's attorney also questioned Morrow. On cross, Morrow corroborated in some measure Carprue's recollection that he could not have certain features on his phone.

       Morrow stated:
      [T]he standard instruction we give every client, is if there is no contact, we explain it, if we do not have contact with that person in a twenty-four hour period, if [] we can't determine what happened to that person, we're going to notify the court.
      The court issues a bench warrant and on occasion, knowing the bench warrant is issued, call the police myself to have person picked up, if I know where the person was.

       In instructing the jury prior to its deliberations, Judge Schellinger conveyed the following instruction: "If any person has an impression about my opinion, whether the defendant is guilty or not guilty, disregard that impression entirely and decide the issues of fact as you view the evidence."

       Wisconsin Stat. § 757.19(2) reads as follows:
      (2) Any judge shall disqualify himself or herself from any civil or criminal action or proceeding when one of the following situations occurs:
      (a) When a judge is related to any party or counsel thereto or their spouses within the 3rd degree of kinship.
      (b) When a judge is a party or a material witness, except that a judge need not disqualify himself or herself if the judge determines that any pleading purporting to make him or her a party is false, sham or frivolous.
      (c) When a judge previously acted as counsel to any party in the same action or proceeding.
      (d) When a judge prepared as counsel any legal instrument or paper whose validity or construction is at issue.
      (e) When a judge of an appellate court previously handled the action or proceeding while judge of an inferior court.
      (f) When a judge has a significant financial or personal interest in the outcome of the matter. Such interest does not occur solely by the judge being a member of a political or taxing body that is a party.
      (g) When a judge determines that, for any reason, he or she cannot, or it appears he or she cannot, act in an impartial manner.


author: PER CURIAM.

text:
    State of Wisconsin, Plaintiff-Respondent, v. James L. Wright, Defendant-Appellant.
    Supreme Court

      No. 02-3348-CR.

      Oral argument April 8, 2004.

    Decided July 9, 2004.

    2004 WI 109
    (Also reported in 682 N.W.2d 446.)

      For the defendant-appellant there were briefs and oral argument by Charles Bennett Vetzner, assistant state public defender.
    For the plaintiff-respondent the cause was argued by David J. Becker, assistant attorney general, with whom on the brief was Peggy A. Lautenschlager, attorney general.
   PER CURIAM.

¶ 1. This case is before the court on certification by the court of appeals, pursuant to Wis. Stat. § (Rule) 809.61 (2001-02). The court of appeals certified the following questions for our review:

(1) Does a defendant who enters a plea of no contest based upon a negotiated plea agreement waive the right to challenge the legality of the trial court's acceptance of the no contest plea?
(2) Can a judgment of conviction be amended postconviction to reflect a conviction of a lesser crime (possession of 2.9 grams of cocaine with intent to distribute contrary to Wis. Stat. § 961.41(lm)(cm)l (1997-98)) when a factual basis for a greater crime (possession of 5.5 grams with intent to distribute in violation of § 961.41(lm)(cm)2) was alleged in the unamended original information and used as a factual basis for accepting a no contest plea entered pursuant to a plea agreement?

¶ 2. After examination of the record and the briefs of the parties, and after hearing oral argument, we conclude that the certification was improvidently granted.

¶ 3. We accepted the court of appeals certified question primarily to address the waiver issue. The State, however, does not believe that issue is presented by this case. The State writes in its brief:

[T]he fundamental predicate to any waiver argument ... would be that Wright entered a plea of no contest to possession of more than five grams of cocaine with intent to deliver.
[T]he state does not believe that it can argue in good faith that Wright entered his plea of no contest to the offense of possession of more than five grams of cocaine with intent to deliver. The record... is simply too ambiguous with respect to the offense to which Wright entered his plea.

¶ 4. The issue that the court sought to resolve in this case is not contested. When this occurs, the contrast in views that is the hallmark of an adversarial process is dulled, making it difficult to render circumspect opinions. See Baker v. Carr, 369 U.S. 186, 204 (1962) (noting the "concrete adverseness which sharpens the presentation of issues upon which the court so largely depends for illumination of difficult constitutional questions"). We are reluctant to decide cases in the absence of contrast between the parties. Accordingly, we conclude that review in this case was improvidently granted, and we vacate the order granting certification.

By the Court. — The order granting certification is vacated and the cause is remanded to the court of appeals.

All work on this opinion was completed on or before June 30, 2004. Justice Diane S. Sykes resigned on July 4, 2004.

       All statutory references are to the 2001-02 edition of the Wisconsin Statutes.