author: VERGERONT, J.

text:
    In the Matter of the Arbitration Between: Madison Teachers Inc., Petitioner-Respondent, v. Madison Metropolitan School District, Respondent-Appellant.
    Court of Appeals

      No. 03-0443.

      Submitted on briefs November 7, 2003.

    Decided February 26, 2004.

    2004 WI App 54
    (Also reported in 678 N.W.2d 311.)

      On behalf of the respondent-appellant, the cause was submitted on the briefs of Kirk D. Strang and Alan G.B. Kim, Jr., Davis & Kuelthau, S.C., Madison.
    On behalf of the petitioner-respondent, the cause was submitted on the brief of Brett C. Petranech, Lawton & Cates, S.C., Madison.
    Before Deininger, PJ., Vergeront and Lundsten, JJ.
   VERGERONT, J.

¶ 1. The Madison Metropolitan School District appeals-the circuit court order vacating an arbitrator's decision that certain grievances had been settled between the District and Madison Teachers Inc. (MTI) and were therefore not subject to arbitration. The District contends the circuit court erred in not applying the correct deferential standard of review and that the application of that standard requires affirmance of the arbitrator's decision. We agree. We conclude the arbitrator did not act outside the scope of his authority as MTI asserts. We therefore reverse the circuit court's order and remand with instructions to deny MTI's motion to vacate the arbitrator's decision.

BACKGROUND

¶ 2. In October 1998, MTI filed a grievance on behalf of three named special education teachers at Toki Middle School alleging violations of the 1997-99 collective bargaining agreement provisions on overload and planning time (Toki grievance). The Toki grievance and others on the same subject were discussed by the District and MTI, which were then in the process of negotiating a successor to the 1997-99 collective bargaining agreement. Out of these discussions came an agreement to establish a joint committee to study middle and high school special education overload and planning time issues. The memorandum of understanding (MOU), signed on June 3,1999, provided as follows:

MEMORANDUM OF UNDERSTANDING
Re: Middle and High School Special Education Overload/Planning Time
MTI and the Madison Metropolitan School District (District) agree as follows:
1. The parties will each appoint four (4) participants to a joint committee to study overload and planning time issues for middle and high school special education teachers.
2. The parties will collect data from middle and high school principals and teachers relative to paragraph 1 above. Said data collection shall be completed by September 20, 1999.
3. The parties shall meet weekly, with the teacher appointees provided release time during their contractual work day, between September 20, 1999 and November 1, 1999.
4. The parties shall issue a joint report to the Board of Education and MTI Board of Directors by November 1, 1999.
5. Should the parties not reach agreement on recommended changes by December 1, 1999, said grievances shall be submitted to grievance arbitration.

¶ 3. The joint committee issued a report summarizing the issues the committee had discussed and making recommendations. The report stated that the committee met weekly between September 20, 1999 and November 1, 1999, completed its work on October 27,1999, and would be submitting its work to the board of education and MTI board of directors in early December. The printed date on the report was December 3, 1999. The cover sheet conveying the report to the board of education and to the MTI board was dated January 11, 2000; it was signed on January 12 by the District's labor relations director and by MTI's executive director.

¶ 4. In the District's view, the MOU was an agreement to resolve the Toki grievance, and once the report was issued and the recommendations were implemented, there was nothing to arbitrate. In MTI's view, the MOU was not intended to resolve the Toki grievance and, even if that had been the intent, a resolution did not occur because the deadlines in the MOU were not complied with.

¶ 5. The 1997-99 collective bargaining agreement establishes a grievance procedure, the fourth level of which provides that "[t]o the extent the grievance remains unresolved at the conclusion of Level 3, Madison Teachers may call for compulsory, final, and binding arbitration." The agreement provides a procedure for the parties' selection of an arbitrator and also provides that "[t]he decision of the arbitration panel shall be final and binding on all parties except as forbidden by law."

¶ 6. The parties selected an arbitrator and submitted these issues to arbitration: (1) Is this matter arbitrable? (2) If so, did the District violate the collective bargaining agreement when it did not compensate the grievants for working an overload? (3) If so, what is the appropriate remedy?

¶ 7. The arbitrator determined that the June 3, 1999 MOU covered the Toki grievance. He also determined that the terms of the MOU had been satisfied, the grievants and other MTI members had benefited from that, and to the extent the deadlines in the MOU had not been complied with, MTI had acquiesced in the departures from those deadlines. The arbitrator therefore concluded that the Toki grievance had been resolved through a settlement between the parties, and he was without jurisdiction to address the grievances further.

¶ 8. MTI sought an order in the circuit court vacating the arbitrator's opinion under Wis. Stat. § 788.10(l)(d) (2001-02). That provision requires a court upon a party's application to vacate an arbitration award when the arbitrator has "exceeded [his] powers or so imperfectly executed them that a mutual, final and definite award upon the subject matter submitted was not made." Section 788.10(l)(d). The circuit court determined that the parties did not reach an agreement on the recommended changes by December 1, 1999, as provided in the MOU and did not agree to waive that deadline. The arbitrator's determination to the contrary, the court stated, was based on a "perverse misconstruction of the facts," which resulted in an incorrect application of the law and an incorrect conclusion that the Toki grievance was not arbitrable. The court therefore entered an order vacating the arbitrator's opinion and ordering the grievance to be assigned to a new arbitrator, mutually agreed upon by the parties, for a determination on the merits.

DISCUSSION

Scope of Review

¶ 9. The standard for our review of the arbitrator's decision is the same as that for the circuit court, and we review the arbitrator's decision without deference to the decision of the circuit court. City of Madison v. Local 311, Int'l Ass'n of Firefighters, 133 Wis. 2d 186, 190, 394 N.W.2d 766 (Ct. App. 1986). The scope of the court's review is limited. City of Oshkosh v. Oshkosh Pub. Library Clerical and Maint. Employees Union Local 796-A, 99 Wis. 2d 95, 103, 299 N.W.2d 210 (1980). We presume the arbitrator's decision is valid, and we disturb it only where invalidity is shown by clear and convincing evidence. Id. at 102-03. Essentially the court's role is supervisory in nature — to insure that the parties receive what they bargained for when they agreed to resolve certain disputes through final and binding arbitration. Id. at 103. Courts may not overturn an arbitrator's decision for "mere errors of fact or law, but only when perverse misconstruction or positive misconduct [is] plainly established, or if there is a manifest disregard of the law, or if the award itself is illegal or violates strong public policy." City of Madison v. Madison Prof'l Police Officers Ass'n, 144 Wis. 2d 576, 586, 425 N.W.2d 8 (1988) (alteration in original) (citation omitted). The rationale for not vacating awards because of an error of fact or law is that, when parties have agreed to submit an issue to arbitration and have chosen the arbitrator, they have agreed to be bound by the arbitrator's judgment, whether correct or incorrect as a matter of fact or law. See City of Oshkosh, 99 Wis. 2d at 103-04.

¶ 10. When a party believes a grievance is not arbitrable under the terms of the collective bargaining agreement, it may submit the merits of the grievance to the arbitrator while reserving the right to challenge the arbitrability of the grievance in court; in that case the court decides the issue of arbitrability de novo. Joint Sch. Dist. No. 10 v. Jefferson Educ. Ass'n, 78 Wis. 2d 94, 106, 253 N.W.2d 536 (1977). On the other hand, if the parties submit the issue of arbitrability to the arbitrator for final and binding arbitration, the scope of court review is the same as review of the merits of the award. Id. We understand both parties to agree that the latter situation is the case here. Thus, we accord the arbitrator's decision that the Toki grievance was not arbitrable the same presumption of validity, and we apply the same limited scope of review, as that summarized in the preceding paragraph.

¶ 11. Whether the Toki grievance is arbitrable under the collective bargaining agreement depends upon whether it has already been resolved, since grievances are subject to final and binding arbitration only if they remain "unresolved" at the conclusion of Level 3. MTI and the District both acknowledge that parties may resolve a grievance by settlement, and they implicitly agree that if a grievance is settled, it is not arbi-trable. Accord Frank Elkouri & Edna-Asper Elkouri, How Arbitration Works 269-70 (Alan Miles Ruben ed., 6th ed. 2003) (it is to be expected that a mutual settlement of a grievance by the parties ordinarily will be held binding on them insofar as the particular instance is resolved). Therefore, whether the Toki grievance is arbitrable depends upon whether the parties settled the grievance.

¶ 12. Because we review the arbitrator's decision, not that of the circuit court, and because MTI is challenging the arbitrator's decision, our discussion focuses on the grounds for MTI's challenge, even though MTI is the respondent on this appeal. MTI's position is that the Toki grievance was not settled because the parties had not reached agreement on changes recommended by the joint committee by December 1, 1999, as required by the June 3, 1999 MOU and by an identical MOU signed by the District's director of labor relations on December 6,1999, and by MTI's executive director on February 14, 2000. In deciding otherwise, MTI asserts, the arbitrator exceeded his authority in these ways: (1) he amended the plain terms of the MOUs, substituting his view of equity; (2) there is no evidence supporting the arbitrator's findings; and (3) the arbitrator ignored the second MOU.

Construction of the June 1999 MOU

¶ 13. MTI contends the arbitrator impermissibly amended the plain terms of the June 1999 MOU, specifically, the provision provides that "[sjhould the parties not reach agreement on recommended changes by December 1, 1999, said grievances shall be submitted to grievance arbitration." According to MTI, there is no evidence that the parties reached an agreement by that date because it is undisputed that the report was not sent to the boards of MTI and the District until January 12, 2000. Therefore, in MTI's view, the arbitrator was amending the MOU to provide for something the parties did not agree to in the MOU and was substituting his view of what was equitable for what the parties had plainly bargained for.

¶ 14. The premise of MTI's argument is that the arbitrator did not have the authority to consider the parties' conduct in deciding whether they had resolved the Toki grievance in spite of the fact that the joint committee's report was not sent to the boards by December 1, 1999. MTI relies on case law holding that an arbitrator is without authority to disregard or modify plain or unambiguous provisions in the collective bargaining agreement. City of Milwaukee v. Milwaukee Police Ass'n, 97 Wis. 2d 15, 27, 292 N.W.2d 841 (1980). However, MTI's analysis does not take into account significant aspects of the issue of arbitrability submitted to this arbitrator in this case.

¶ 15. Generally, an arbitrator obtains his or her authority from the collective bargaining agreement, and the arbitrator is confined to construing that agreement. Milwaukee Prof l Firefighters Local 215 v. City of Milwaukee, 78 Wis. 2d 1, 21, 253 N.W.2d 481 (1977). The arbitrator " 'may of course look for guidance from many sources, yet [the] award is legitimate only so long as [the arbitrator] draws its essence from the collective bargaining agreement.'" Id. (quoting United Steelworkers of America v. Enterprise Wheel & Car Corp., 363 U.S. 593, 597 (1960)). While an arbitrator is without authority to disregard or modify plain or unambiguous provisions, Milwaukee Police Ass'n, 97 Wis. 2d at 27, the arbitrator has the authority to construe ambiguous terms in the agreement. Dane County v. Dane County Union Local 65, 210 Wis. 2d 267, 283, 565 N.W.2d 540 (Ct. App. 1997). An arbitrator's construction of ambiguous terms in a collective bargaining agreement is within the arbitrator's authority and is not a perverse misconstruction when it has a foundation in reason. See City of Oshkosh, 99 Wis. 2d at 106-07. In the context of construing terms of a collective bargaining agreement, arbitrators have utilized rules, standards, and principles borrowed from the jurisprudence developed by courts to resolve disputes over the meaning of terms in contracts. Elkouri & Elkouri, supra, at 431. They may consider various sources, including the express language of the agreement, statements of the parties in negotiations, bargaining history, custom, and past practice. Id., supra, at 434-35, 453, 460.

¶ 16. In this case, the parties agreed to present the issue of arbitrability to the arbitrator. The arbitrator needed to determine whether the Toki grievance was "unresolved" under the collective bargaining agreement. The parties' dispute was not over the proper construction of that agreement; rather, it was a factual dispute over whether they had settled the grievance. The issue of arbitrability as submitted to the arbitrator did not contain any limits on the arbitrator's authority beyond that already contained in the collective bargaining agreement. It is apparently MTI's position that, in deciding whether the grievance had been settled, the arbitrator could not consider the parties' conduct but could consider only the two (identical) MOUs, which laid out the procedure the parties agreed to follow in resolving the grievance. However, MTI cites no authority for this proposition. Moreover, the parties did not, in their submission of the issue to the arbitrator, limit his authority to construction of the MOUs. Indeed, both parties presented evidence to the arbitrator on the activities of the joint committee that was established pursuant to the June 1999 MOU and on their respective views of the relation of that activity to the Toki grievance.

¶ 17. MTI also argues that the arbitrator did not have the authority to apply his own idea of equity. We do not agree with this characterization of the arbitrator's decision. The arbitrator viewed the evidence as showing that the parties had agreed to resolve the grievance even though they did not meet the December 1, 1999 date in the June 1999 MOU for submitting the report to both boards. Although not using the term "waiver," the arbitrator in essence decided that MTI had by its conduct waived the right to insist on the condition of the December 1, 1999 deadline. The doctrine of waiver of conditions in an agreement, such as deadlines for performance, is a well-established principle in contract law. See 8 Catherine M.A. Me Cauliff, Corbin on Contracts §§ 40.1-40.3 (Joseph Perillo ed., rev. ed. 1999). Arbitrators have the authority to use principles of contract law in resolving disputes under collective bargaining agreements. Our supreme court has recognized that "in arbitration, as elsewhere, waiver and estoppel are established doctrines." Madison Prof'l Police Officers Ass'n, 144 Wis. 2d at 593-94 (by agreeing to a particular clause in its contract with the union, the city waived its right to rely on an ordinance provision to the exclusion of the contract); see also Scherrer Constr. Co v. Burlington Mem'l Hosp., 64 Wis. 2d 720, 729, 733-35, 221 N.W.2d 855 (1974) (court considered the contract law doctrine of impossibility of performance to be a legal theory that would support the arbitrator's award).

¶ 18. Thus, in the context of deciding whether the time limits in collective bargaining agreements for filing grievances have been complied with, arbitrators may consider the conduct of the parties in deciding whether to enforce those time limits. See Elkouri & Elkouri, supra, at 222. Indeed, in a case on which MTI relies, NF&M Corp v. United Steelworkers, 524 F.2d 756, 760 (3rd Cir. 1975), the court upheld an arbitrator's decision that a grievance was timely in spite of the failure to comply with express time limits, citing a number of alternative theories that would support such a decision. MTI has not presented any authority that would preclude an arbitrator from applying the doctrine of waiver or related doctrines of contract law if there is a foundation in the evidence.

¶ 19. We conclude there is nothing in the 1997-99 collective bargaining agreement, the issue of arbitrability as submitted to the arbitrator by the parties, the language of the two MOUs, or the law of arbitration generally that would limit this arbitrator's authority to the terms of the MOUs and preclude him from considering the parties' conduct in determining whether they had resolved the Toki grievance. We also conclude the arbitrator had the authority to apply the doctrine of waiver with regard to the December 1, 1999 deadline if there was a basis in the evidence. We therefore reject MTI's argument that the arbitrator impermissibly "amended" the MOU.

Evidentiary Basis

¶ 20. MTI's second challenge is to the evidentiary basis for the arbitrator's decision. MTI contends there was no evidence that the modifications after October 27, 1999, were not significant and no evidence that the parties adopted an agreement that resolved the Toki grievance on December 3, 1999. As we have already noted, courts may not reverse an arbitrator's decision because the arbitrator made factual errors. Madison Prof'l Police Officers Ass'n, 144 Wis. 2d at 586. Thus, a court does not review the evidence to decide if it constitutes a preponderance for or against the arbitrator's decision, nor does the court disturb the arbitrator's judgment on weight, credibility, and competency of evidence. See Scherrer Constr., 64 Wis. 2d at 726-27. MTI recognizes this but contends that an arbitrator exceeds the scope of his or her authority if there is no factual support whatsoever in the record for the arbitrator's determination, citing Detroit Coil Co. v. International Ass'n of Machinists, 594 F.2d 575, 580-81 (6th Cir. 1979), and NF&M Corp., 524 F.2d at 760. The rationale of the court in NF&M Corp. is that if there is no evidence in the record supporting an arbitrator's determination, the award cannot be said to have a rational basis in the parties' agreement. 524 F.2d at 760. This is consistent with Wisconsin law, in that a determination that is not supported by any evidence would not have a "foundation in reason." See City of Oshkosh, 99 Wis. 2d at 106-07; Scherrer Constr., 64 Wis. 2d at 729-34 (reviewing record to determine if any evidence supports arbitrator's award under either possible legal theory). Accordingly, we will review the record only to determine if there is any evidence to support the arbitrator's decision that the parties had resolved the Toki grievance.

¶ 21. At the outset, we note that MTI focuses on two specific findings of the arbitrator — that the modifications after October 27, 1999, were not significant and that the parties "adopted" an agreement that resolved the Toki grievance on December 3, 1999. Although we will address these findings in the course of our review of the evidence, we emphasize that the proper issue is not whether there is evidence to support a particular finding, but whether there is any evidence supporting the arbitrator's decision that the parties resolved the Toki grievance. See Scherrer Constr., 64 Wis. 2d at 729 (extensive review of evidence before arbitrator is not only unnecessary but harmful because it might convey impression that court is to carefully scrutinize record to determine whether weight of evidence supports award).

¶ 22. The arbitrator determined that the last meeting of the joint committee was held on October 27, 1999, and that both sides had reached agreement then. The union did seek changes thereafter, the arbitrator found, but "these were not significant modifications." The arbitrator also referred to: the "agreement adopted on December 3, 1999"; the language in that document that "[t]he work of the committee was completed on October 27,1999, and will be submitted to the Board of Education and MTI Board of Directors in early December"; and the evidence that that document was submitted thereafter to both boards over the signature of MTI's executive director. In addition, the arbitrator noted the absence of any evidence that MTI at that time objected that the MOU was not complied with and noted also the undisputed evidence that the District had implemented the recommendations. The arbitrator viewed all this evidence together as showing that the parties agreed the terms of the MOU had been satisfied and the Toki grievance had been resolved.

¶ 23. We conclude there is evidence in the record to support the arbitrator's determination that the parties had resolved the Toki grievance.

¶ 24. Malina Fischer, a member of the joint committee and assistant director of labor relations for the District, testified as follows. At the conclusion of the October 27, 1999 meeting, the committee had prepared a report with recommendations that all committee members had agreed to. She specifically stated at that time, with all members of the committee present, that the District's agreement to make these changes resolved the "special ed" grievances and "came under paragraph 5 of our charges." MTI did not sign the report immediately thereafter, as anticipated; instead Edward Sadlowski, MTI's assistant director and a member of the committee, asked on behalf of MTI for some changes to the report. Rather than meeting again, the District representatives on the committee communicated among themselves by e-mail and telephone, agreed to make those changes, and they were contained in the report dated December 3, 1999. According to Fischer, the reason the report was not presented earlier to the boards was because of those changes coupled with the schedule of the District board meeting over the winter break. No witness disputed Fischer's testimony on the changes to the report and the resulting delay. According to Fischer, it was not until several months after January 2000 that she learned from Sadlowski that MTI did not view the grievance of one of the Toki grievants resolved, at which she expressed her surprise.

¶ 25. Another District representative on the joint committee also testified that the report from the joint committee resolved the grievances that were the subject of the MOU.

¶ 26. Sadlowski's testimony conflicted with Fischer's and that of the other District committee member. He testified he did not hear Fischer's statement at the end of the October 27,1999 meeting, and if he had, he would have disagreed. In his view, the MOU was not intended as a method of resolving the Toki grievance, and regardless of the agreement of the committee on recommendations, the grievance remained to be arbitrated. However, as we have noted above, the arbitrator determined that the June 3, 1999 MOU was intended to establish a method to resolve the Toki grievance. To arrive at that determination, the arbitrator evidently accepted Fischer's testimony rather than Sadlowski's, and that credibility determination is for the arbitrator to make, not this court.

¶ 27. MTI asserts there are no documents or witness testimony to support the arbitrator's statement that the modifications after October 27,1999, were not significant. We disagree. It is not necessary, as MTI apparently believes, that there be direct evidence on the substance of the changes in order for the arbitrator to reasonably determine that the committee had reached an agreement on the recommendations on October 27, 1999. The changes requested by Sadlowski on behalf of MTI were made without the need for another meeting, and the report with the changes made described the committee's work as completed on October 27, 1999. There is no evidence that any representative of MTI disagreed with any part of the report, and MTI's executive director signed the cover letter to the report, conveying it to the MTI board. This evidence and the reasonable inferences from this evidence support the arbitrator's determination that the changes after October 27, 1999, were not significant and that the committee had completed its work by October 27.

¶ 28. Similarly, there is no merit to MTI's argument that there is no evidence an agreement was "adopted" on December 3, 1999. On that date, the final report with the changes sought by MTI’s representative was produced. The arbitrator could reasonably infer from the evidence recounted above that this report constituted an agreement of the parties. Whether the arbitrator was correct in using the word "adopt" is simply not within the scope of our review.

Significance of second MOU

¶ 29. MTI's third challenge is that the arbitrator ignored the evidence that an MOU identical to the one signed on June 3, 1999, was signed by the District's director of labor relations on December 6, 1999, and by MTI's executive director on February 14, 2000. Although this second MOU was admitted into evidence and shown to some witnesses, no witness explained how or why this second MOU came to be signed. The arbitrator did not mention the second MOU in his decision. According to MTI, the arbitrator acted outside the scope of his authority in doing so because this second MOU, along with the first, "governed the question of arbitrability."

¶ 30. We do not agree with MTI's premise that the two MOUs "governed the question of arbitrability." Certainly, based on the District's testimony, the June 3, 1999 MOU was relevant to the parties' intent with respect to resolving the Toki grievance — although, as noted above, MTI's witnesses disputed this. However, the relevance of the second MOU to the parties' intent is not at all clear, given the absence of testimony explaining why an identical document was signed when it was. MTI does not suggest how consideration of this second MOU would have or should have affected the arbitrator's decision. One possible inference from this document is that the parties were aware in mid-December 1999 that the report had not been approved by both boards by December 1, as contemplated in the first MOU, and they wanted to reaffirm that they were both still abiding by the terms of the MOU. True, this inference raises the question, not answered by any evidence: Why didn't they just say that? Another inference may be that the parties intended to reaffirm that the November 1,1999 and December 1,1999 dates were critical — this is perhaps MTI's position. But this inference, too, leaves questions unanswered by the evidence: Why did the parties need to repeat what they had already put in writing? If the intent was to show that the parties considered that the first MOU had not been complied with and the grievance should proceed to arbitration, why is there no other evidence of that and why did the executive director of MTI sign the cover letter of the report conveying it to the boards on January 12?

¶ 31. We conclude that the arbitrator could have reasonably decided that the second MOU, in the absence of any explanatory evidence, did not shed any light on whether the parties considered the grievance to be settled; or, alternatively, he could have reasonably decided that it supported the view that the parties considered the grievance as settled in spite of the delay in sending the report to the hoards. Whatever the arbitrator's view, we do not vacate his decision simply because he did not explain his view. See NF&M Corp., 524 F.2d at 759 (an arbitrator is not required to list the reasons for the award). Nor do we vacate the decision even if he inadvertently overlooked the second MOU, because that would be at most a factual error. See Madison Prof'l Police Officers Ass'n, 144 Wis. 2d at 586.

CONCLUSION

¶ 32. The arbitrator here did not act outside his authority in deciding that the Toki grievance was not arbitrable because it had already been resolved. Although the June 1999 MOU was evidence that the parties at that time contemplated they would either have their boards approve the committee's recommendations by December 1, 1999, or the grievance would proceed to arbitration, the arbitrator had the authority, under the collective bargaining agreement and under the parties' agreement submitting the issue of arbitra-bility to arbitration, to decide whether the parties resolved the grievance even though they did not adhere to that procedural requirement. The arbitrator's authority included the authority to apply the doctrine of waiver if there was a basis in the evidence. There was a basis in the record for the application of that doctrine and for the decision ultimately reached by the arbitrator. For these reasons, the arbitrator's decision had a reasonable basis in the collective bargaining agreement and in the parties' agreement to arbitrate arbitrability.

¶ 33. Accordingly, we reverse the circuit court's order and remand with instructions to dismiss MTI's petition to vacate the arbitrator's decision.

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

       The 1997-99 collective bargaining agreement provides in Section II-B(6) that "[t]he procedural steps for Madison Teachers shall commence at Level 3." Step 3 involves a written grievance filed by Madison Teachers and a written response by the superintendent or designee, both of which occurred for the Toki grievance.

       MTI argued before the arbitrator that the June 3, 1999 MOU did not cover the Toki grievance. MTI is not making that argument on appeal.

       We have organized the issues somewhat differently than did MTI: MTI raises as a separate and fourth issue that the two MOUs form the basis of the arbitrator's authority, but we have addressed that in the context of the first issue, and we address all evidentiary challenges together, although some appear interspersed among other issues.


source: Caselaw Access Project

author: DYKMAN, J.

license: Public Domain

text:
    Shannon Preston, Plaintiff-Appellant, Charles Johnson and Estate of Bridon M. Johnson, Plaintiffs, v. Meriter Hospital, Inc. and Wisconsin Patients Compensation Fund, Defendants-Respondents.
    Court of Appeals

      No. 03-1376.

      Submitted on briefs December 5, 2003.

    Decided February 26, 2004.

    2004 WI App 61
    (Also reported in 678 N.W.2d 347.)

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of James Bopp, Jr. and Thomas J. Marzen of National Legal Center for the Medically Dependent & Disabled, Inc., Terre Haute, Indiana; and Dennis E. Robertson of Rumf Law Office, Cambridge.

      On behalf of the defendant-respondent, the cause was submitted on the brief of Curtis S. Swanson and David J. Pliner of Corneille Law Group, L.L.C., Madison.
    Before Deininger, EJ., Dykman and Vergeront, JJ.

       Petition to review filed.

   DYKMAN, J.

¶ 1. Shannon Preston appeals from a judgment dismissing her claims against Meriter Hospital, Inc. and The Wisconsin Patient's Compensation Fund (Meriter). She raises four issues on appeal. First, she asserts that the Emergency Medical Treatment and Labor Act (EMTALA), 42 U.S.C. § 1395dd(b)(l)(A) (2001), required Meriter to stabilize her infant child, even though the hospital did not transfer the child to another hospital. Second, she contends that she stated a claim that Meriter violated the screening requirement in § 1395dd(a). Third, she claims that she did not need to provide expert testimony to establish her negligence claim. Fourth, she argues that Meriter owed her a duty of care that included obtaining her informed consent regarding treatment for her infant child. We affirm.

BACKGROUND

¶ 2. The parties do not dispute the material facts of the case. Preston arrived at Meriter Hospital on November 9, 1999, twenty-three weeks pregnant. In Meriter's birth center, she delivered a child with a gestational age of approximately twenty-three and 2/7th's weeks. The child weighed one-and-a-half pounds at birth and could not survive without resuscitation and long-term intensive care. Except for nursing care, Mer-iter did not resuscitate or treat the child, who survived for two-and-a-half hours.

¶ 3. Preston sued Meriter for: (1) medical negligence; (2) failing to obtain informed consent; (3) violating EMTALA, § 1395dd; and (4) neglect of a patient in violation ofWis. Stat. § 940.295(j)l (2001-02). Meriter moved for summary judgment on all the claims.

¶ 4. For the medical negligence claim, Meriter asserted that Preston failed to identify any expert medical witness to proffer an opinion either as to the standard of care or as to causation. The trial court determined Meriter had established a prima facie defense and found that Preston had not offered any evidence to refute Meriter's contention.

¶ 5. As to the informed consent claim, Meriter asserted that doctors, and not hospitals, are required to obtain informed consent. The trial court determined that Meriter had established a prima facie defense to Preston's informed consent claim. It found that Preston did not refute this argument and deemed it admitted.

¶ 6. With regard to EMTALA, the trial court found that Preston's "complaint focuses on the hospital's failure to treat/resuscitate" the child. It determined that this allegation "appears to implicate EMTALA's stabilization requirement and not the screening requirement." It then concluded that the stabilization requirement in § 1395dd(b)(l)(A) applies only to instances where a hospital transfers a patient. The court held that Meriter was not liable under EMTALA because neither Preston nor her child were transferred from the hospital. It was guided by the reasoning of Harry v. Marchant, 291 F.3d 767 (11th Cir. 2002).

¶ 7. The trial court also concluded EMTALA did not apply to the child because the child was an inpatient. It adopted the reasoning in Bryant v. Adventist Health System/West, 289 F.3d 1162, 1169 (9th Cir. 2002), where the court found that EMTALA does not apply to inpatients unless the patient establishes that the hospital admitted the patient as a subterfuge, without any intention of treating the patient, and then discharged the patient without satisfying the stabilization requirement. It concluded that Preston had not refuted Meriter's contention that the child was an inpatient at the hospital, nor had Preston alleged any subterfuge by Meriter.

¶ 8. Preston appeals from the trial court's granting of summary judgment on these three claims. She does not, however, appeal the dismissal of her Wis. Stat. § 940.295 claim.

STANDARD OF REVIEW

¶ 9. We review de novo a trial court's decision on a motion for summary judgment, applying the same standard as the trial court. Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315, 401 N.W.2d 816 (1987). Summary judgment is appropriate if there are no genuine issues of material fact and one party is entitled to judgment as a matter of law. Wis. Stat. § 802.08(2).

¶ 10. Our method for reviewing summary judgment is well developed:

If the pleadings state a claim and demonstrate the existence of factual issues, a court considers the moving party's proof to determine whether the moving party has made a prima facie case for summary judgment. If the defendant is the moving party the defendant must establish a defense that defeats the plaintiffs cause of action. If a moving party has made a prima facie defense, the opposing party must show, by affidavit or other proof, the existence of disputed material facts or undisputed material facts from which reasonable alternative inferences may be drawn that are sufficient to entitle the opposing party to a trial.
The inferences to be drawn from the underlying facts contained in the moving party's material should be viewed in the light most favorable to the party opposing the motion, and doubts as to the existence of a genuine issue of material fact are resolved against the moving party. The court takes evidentiary facts in the record as true if not contradicted by opposing proof.

Lambrecht v. Estate of Kaczmarczyk, 2001 WI 25, ¶¶ 22-23, 241 Wis. 2d 804, 623 N.W.2d 751 (citation omitted).

DISCUSSION

Medical Negligence

¶ 11. Preston asserts two theories explaining why she did not need an expert medical witness. First, she contends that Meriter's failure to treat the child is the kind of matter "within the realm of the ordinary experience of mankind." Weiss v. United Fire & Cas. Co., 197 Wis. 2d 365, 379, 541 N.W.2d 753 (1995) (citation omitted). She argues that the standard of care for treating an infant with her child's gestational age is "within the ready comprehension of lay jurors." Second, she asserts that Meriter's expert witness supports her claim that the child would have had some significant chance of survival.

¶ 12. The trial court dismissed Preston's medical negligence claim because she failed to identify any expert medical witness regarding standard of care or causation. In its written decision, the trial court quoted the portion of Preston's brief that addressed her medical negligence claim:

Plaintiffs agree that if it were left up to the medical profession alone, many of these very premature infants would be left to die, on grounds of futility of treatment and the use of scarce medical resources to treat such very young and vulnerable patients. It is for that reason that plaintiffs will likely drop their malpractice claim and rely solely on the legal requirements to establish grounds for liability.

¶ 13. We will not address the merits of Preston's arguments either. The record shows that she failed to raise these issues before the trial court. We discern "no reason or excuse for issues, later felt to be material and important, not being presented" to the trial court. DOR v. Wis. Tel. Co., 72 Wis. 2d 259, 267, 240 N.W.2d 411 (1976).

Informed Consent

¶ 14. The trial court dismissed Preston's informed consent claim because she did not refute Meriter's prima facie defense that it had no independent duty to obtain her informed consent. On appeal, Preston contends that she has a viable argument that Meriter is liable under the doctrine of apparent authority. Meriter asserts that Preston waived this argument by not presenting it-to the trial court in summary judgment motions. It concedes that Preston raised the issue of apparent authority at a motion to dismiss, but only in the context of medical negligence.

¶ 15. The record reveals that Preston failed to raise the issue of apparent authority with regard to informed consent in the trial court. We refrain from addressing issues raised for the first time on appeal. Id.

EMTALA Stabilization Requirement

¶ 16. Preston claims that EMTALA § 1395dd(b)(l)(A) required Meriter to stabilize her child's emergency medical condition, regardless of whether Meriter transferred the patient. Both parties contend that Preston's appeal presents an issue of first impression in Wisconsin.

¶ 17. This appeal requires us to interpret EMTALA's necessary care requirements in § 1395dd(b)(l) and apply it to undisputed facts. Statutory interpretation and application presents a question of law which we review de novo. State ex rel. Frederick v. McCaughtry, 173 Wis. 2d 222, 225, 496 N.W.2d 177 (Ct. App. 1992). In construing a statute, our purpose is to discern the legislatures intent and give it effect. Id. We first examine the statute's language. Id. at 226. If the statute is unambiguous, it is our duty to give the language its ordinary meaning. Id.

¶ 18. There are several provisions of EMTALA that are relevant to this appeal. We begin with the stabilization requirement in § 1395dd(b)(l), which provides:

In general. If any individual (whether or not eligible for benefits under this subchapter) comes to a hospital and the hospital determines that the individual has an emergency medical condition, the hospital must provide either—
(A) within the staff and facilities available at the hospital, for such further medical examination and such treatment as may be required to stabilize the medical condition, or
(B) for transfer of the individual to another medical facility in accordance with subsection (c).

Contrary to its ordinary meaning, the term "to stabilize" in § 13955dd(b)(l)(A) has a narrow definition that only applies in connection with the transfer of an emergency room patient. § 1395dd(e)(3)(A); see Bryant v. Adventist Health System/West, 289 F.3d 1162, 1167 (9th Cir. 2002). The statute defines the term as:

to provide such medical treatment of the condition as may be necessary to assure, within reasonable medical probability, that no material deterioration of the condition is likely to result or occur during the transfer of the individual from a facility, or, with respect to an emergency medical condition described in paragraph (1)(B), to deliver (including the placenta).

§ 1395dd(e)(3)(A). We read these provisions together.

¶ 19. Preston claims that § 1395dd(b)(l)(A) unambiguously requires stabilizing medical treatment in every case, regardless of whether a patient was transferred. She argues that the blended language of § 1395dd(b)(l)(A) and § 1395dd(e)(3)(A) defines the nature of the stabilization requirement, not its boundaries. She asserts that the definition of stabilize "describes the standard of care that applies in stabilizing the patient — not a limitation on the applicable scope of the stabilization requirement."

¶ 20. She finds support for her construction in In re Baby "K" 16 F.3d 590 (4th Cir. 1994). There, the hospital sought declaratory judgment that EMTALA did not require it to provide respiratory support to an anencephalic infant who repeatedly returned to the hospital for care. Id. at 593. Preston claims that the Fourth Circuit held that the diagnosis of an "emergency medical condition triggers the duty of the hospital to provide . . . stabilizing treatment or transfer." She argues that this construction requires stabilizing treatment even when a hospital does not transfer the patient.

¶ 21. Meriter claims that the Fourth Circuit has refuted Preston's interpretation of In re Baby "K" in Bryan v. Rectors & Visitors of the University of Virginia, 95 F.3d 349 (4th Cir. 1996). There, the court recognized EMTALA as an anti-dumping statute, not a federal malpractice statute. Id. at 351. It held that "[t]he stabilization requirement is thus defined entirely in connection with a possible transfer and without any reference to the patient's long-term care within the system." Id. at 352. With regard to its prior decision, the court clarified that "[t]he holding in Baby K thus turned entirely on the substantive nature of the stabilizing treatment that EMTALA required for a particular emergency medical condition." Id.

¶ 22. Preston contends that Bryan affirms her interpretation of In re Baby "K" because the Fourth Circuit noted that Bryan was "fully consistent" with In re Baby "K." Meriter, however, argues that other courts interpret In re Baby "K" as not addressing whether stabilization liability occurs only with patient transfer. See Causey v. St. Francis Medical Center, 719 So. 2d 1072, 1075 (La. Ct. App. 1998) (Bryan "backed off the sweeping statement made in the Baby K case that EMTALA imposed upon the hospital an obligation not only to admit a patient for treatment of an emergency condition.. . but thereafter to continuously stabilize her condition, no matter how long required."). The Eleventh Circuit addressed the precedential value of In re Baby "K":

We recognize the Fourth Circuit opinion in In re Baby "K' could be interpreted as addressing the contours of the stabilization requirement. Nonetheless, just two years later, in Bryan ... the Fourth Circuit clarified that Baby "K' only addressed the issue of whether EMTALA's stabilization requirement mandates treatment of the emergency medical condition presented to the hospital or the general medical condition of the patient. Thus, the Fourth Circuit has held Baby "K' did not reach the issue of whether the stabilization requirement only applies in the event of a transfer.

Harry v. Marchant, 291 F.3d at 775 n.13 (citation omitted).

¶ 23. We are not persuaded that In re Baby "K" remains viable precedent in the Fourth Circuit. Regardless, we consider the Eleventh Circuit's decision in Harry v. Marchant to be directly on point. In that case, the court concluded that EMTALA was an anti-dumping statute that unambiguously required a hospital to transfer a patient in order to trigger liability. Id. at 771. The court held that "[r]eading the statute in its specifically defined context, it is evident EMTALA mandates stabilization of an individual only in the event of a 'transfer' as defined in EMTALA." Id. The context the court referred to is the statutory definition of "to stabilize" in § 1395dd(e)(3)(A), which conditions stabilization of the patient on transfer. The court supported its conclusion by examining legislative history, although it admitted such an inquiry was unnecessary because EMTALA was unambiguous. Id. at 772. It reasoned that EMTALA "was not intended to be a federal malpractice statute, but instead was meant to supplement state law solely with regard to the provision of limited medical services to patients in emergency situations." Id. at 773.

¶ 24. Preston urges us not to follow Harry. She asserts that the doctrine of expressio unis est exclusio alterius should control our construction. She argues that "the expression of'transfer' in (b)(1)(B) ordinarily precludes a construction of (b)(1)(A) that conditions its application on 'transfer.'" She bases this argument on the fact that § 1395dd(b)(l)(A) does not contain the word "transfer." She seems to argue that § 1395dd(b)(l)(A) cannot depend on transfers because § 1395dd(b)(l)(B) explicitly refers to transfers. She argues that this distinction shows the legislature intended a different meaning for § 1395dd(b)(l)(A).

¶ 25. Preston's argument ignores the definition of "to stabilize" in § 1395dd(e)(3)(A). Although "transfer" does not appear in § 1395dd(b)(l)(A), the term "to stabilize" does. As we explained above, the statutory definition of "to stabilize" conditions stabilization on the transfer of a patient. Thus, § 1395dd(b)(l)(A) incorporates "transfer" by reference to "to stabilize." We conclude that the stabilization requirement in EMTALA is unambiguous, as Harry v. Marchant, 291 F.3d at 771, also concluded. We do not apply cannons of construction, such as the exclusio doctrine, when the language of the statute is unambiguous. State v. Engler, 80 Wis. 2d 402, 406, 259 N.W.2d 97 (1977) ("It is impermissible to apply rules of statutory construction to ascertain legislative intent when the legislation is clear on its face.") (citation omitted). By her own argument, Preston admitted the statute is unambiguous.

¶ 26. Finally, Preston contends that the Eleventh Circuit's construction renders § 1395dd(b)(l)(A) unnecessary and redundant because § 1395dd(b)(l)(B) requires stabilization for transferred patients. We agree that we interpret statutes so that no provision is rendered meaningless whenever possible. Wagner v. Milwaukee Co. Election Comm., 2003 WI 103, ¶ 33, 263 Wis. 2d 709, 666 N.W.2d 816. Meriter argues, however, that § 1395dd(b)(l)(A) constitutes the general rule and § 1395dd(b)(l)(B) recognizes an exception to the general rule, specifically defined in § 1395dd(c). Meriter's construction gives effect to all the provisions in § 1395dd and § 1395(e)(3)(A), which defines "to stabilize;" whereas Preston's construction ignores the statutory definition of "to stabilize." We reject Preston's argument.

¶ 27. We consider Harry, 291 F.3d at 771, persuasive. The Eleventh Circuit aptly construed the stabilization requirement in the context of the statutory definition of "to stabilize." Id. at 771-73. We adopt the reasoning in Harry and hold that EMTALA's stabilization requirement in § 1395dd only pertains to patients the hospital transfers.

¶ 28. Because Preston has not alleged that Mer-iter transferred her child, we conclude § 1395dd did not require Meriter to stabilize the patient.

EMTALA Screening Requirement

¶ 29. Preston asserts that the trial court erred when it construed her complaint as not stating a violation of the screening requirement in § 1395dd(a). The trial court reasoned that:

Preston's complaint focuses on the hospital's failure to treat/resuscitate [the child] immediately after his birth. This allegation appears to implicate the EMTALA's stabilization requirement and not the screening requirement.

Accordingly, the trial court did not determine whether Meriter had violated the screening requirement.

¶ 30. We review de novo whether a complaint properly pled a cause of action upon which relief may be granted. Vogel v. Liberty Mut. Ins. Co., 214 Wis. 2d 443, 447, 571 N.W.2d 704 (Ct. App. 1997). We consider the facts pled true and construe inferences from the pleadings in favor of the party against whom the motion is brought. Id. We will affirm the trial courts dismissal only if it appears a certainty that no relief can be granted under any set of facts that Preston could prove to support her allegations. See Kohlbeck v. Reliance Const. Co., 2002 WI App 142, 9, 256 Wis. 2d 235, 647 N.W.2d 277. If the facts as pled "reveal an apparent right to recover under any legal theory, they are sufficient to state a claim." Id.

¶ 31. Preston claims the following allegations in her complaint state a violation of the screening requirement:

Following the birth of the minor child. . . Mer-iter ... [was] aware of the birth of the child and aware of his emergent need of medical care, but failed, refused, and neglected to provide any care whatsoever to the newborn infant....
The conduct of. . . Meriter ... was in violation of 42 U.S.C. § 1395dd.

Because § 1395dd encompasses both the screening and stabilization requirement, Preston argues that her complaint satisfies the general notice required to state a claim.

¶ 32. We liberally construe pleadings, sustaining them if they give reasonable notice to the responding party as to the nature of the claim. Farrell v. John Deere Co., 151 Wis. 2d 45, 56, 443 N.W.2d 50 (Ct. App. 1989). We conclude that the factual part of Preston's complaint states a claim that Meriter violated the screening requirement.

¶ 33. Therefore, we apply § 1395dd(a) to the undisputed facts of this case, a question of law, which we review de novo. State ex rel. Frederick, 173 Wis. 2d at 225.

¶ 34. Section 1395dd(a) provides:

Medical screening requirement. In the case of a hospital that has a hospital emergency department, if any individual.... comes to the emergency department and a request is made on the individual's behalf for examination or treatment for a medical condition, the hospital must provide for an appropriate medical screening examination within the capability of the hospital's emergency department.... to determine whether or not an emergency medical condition... exists.

¶ 35. Preston argues that Meriter did not provide her child an appropriate medical screening examination to determine whether an emergency medical condition existed. She also claims Meriter did not screen the infant child or herself "to determine whether to transfer them to another hospital that would treat [her child] after birth, to determine whether there was time to transfer before delivery, or to determine whether transfer would 'pose a threat.'"

¶ 36. While Meriter conceded that an emergency medical condition existed, it asserts that the screening requirement only applies to patients in the emergency department. It claims that EMTALA does not apply to inpatients like Preston and the child. The trial court found that Preston failed to refute Meriter's claim that she and her child were inpatients.

¶ 37. We agree that EMTALA only obligates hospitals to screen individuals who present an emergency condition to the emergency department. We find persuasive the First Circuit's interpretation of § 1395dd(a) in Lopez-Soto v. Hawayek, M.D., 175 F.3d 170 (1st Cir. 1999). In that case, a woman gave birth to a child who had severe respiratory problems. Id. at 171. The child presented an emergency medical condition; however, the child entered the hospital through the operating room, not the emergency department. Id. The First Circuit held that the screening requirement only applies to patients who present emergency conditions to the emergency department. Id. at 173. It compared the language of § 1395dd(a) and § 1395dd(b). Id. Subsection (b) applies to an individual who "comes to the hospital"; whereas, subsection (a) applies to an individual who "come[s] to the emergency department." Id. It reasoned that if "comes to the emergency department" were synonymous with "comes to the hospital," then the distinction plainly intended by the difference in the language would not be given effect. Id. We avoid rendering statutory provisions meaningless. Wagner v. Milwaukee Co. Election Comm., 2003 WI 103, ¶ 33.

¶ 38. Preston contends that the Department of Health and Human Services recently clarified the "comes to the emergency room" requirement. She urges us to comport our construction of § 1395dd(a) with the department's new rule. She concedes, however, that the rule was "issued after the events of this case and.. . only applies prospectively." We will only hold Meriter responsible for the plain language of § 1395dd(a) and not subsequent revisions of that rule.

¶ 39. Because Preston's child entered Meriter via the birthing center and not the emergency room, § 1395dd(a) does not impose a screening requirement on Meriter.

CONCLUSION

¶ 40. Preston waived her medical negligence and informed consent claims by not raising the issues she presents to us in the trial court. We conclude that § 1395dd(b)(l)(a) did not require Meriter to stabilize Preston or her child because neither patient was transferred. We also conclude that as of the time of the events in this case, § 1395dd(a) only imposed a screening requirement when patients present an emergency medical condition in the emergency department.

By the Court. — Judgment affirmed.

       All citations to § 1395dd and its subsections refer to 42 U.S.C. § 1395dd (2001).

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

       We note, however, that the supreme court discussed how chapter 655 relates to EMTALA in Burks v. St. Joseph's Hospital, 227 Wis. 2d 811, 596 N.W.2d 391 (1999). The facts of that case were similar to Preston's facts: a mother sued under EMTALA because a hospital failed to resuscitate her infant child who was about twenty-two weeks old. Id. at 813. The majority addressed the issue of whether coverage existed under the Wisconsin Patient's Compensation Fund. Id. at 834. It reasoned that the fund only covers malpractice claims and affirmed the trial court's decision that the fund covers some violations of EMTALA. Id. at 824, 834. The majority explicitly did not reach the merits of the EMTALA claim. Id. at 834. Because Burks does not address the merits of the EMTALA claim, we agree with the parties that Preston's appeal is one of first impression in Wisconsin.

       Subdivision 1395dd(e)(4) defines, with certain exceptions, transfer as movement "of an individual outside a hospital's facilities at the direction of any person employed by... the hospital."

       On September 9, 2003, the Department of Health and Human Services expanded "what is generally thought of as a hospital's 'emergency room'. . . [to] include other departments of hospitals, such as labor and delivery departments ... or other departments that are held out to the public as an appropriate place to come for medical services on an urgent, nonappointment basis." 68 Fed. Reg. 53222, 53228 (Sept. 9, 2003).


author: FINE, J.

text:
    State of Wisconsin, Plaintiff-Respondent, v. Richard G. White, Defendant-Appellant.
    Court of Appeals

      No. 03-1132-CR.

      Submitted on briefs February 4, 2004.

      Decided March 2, 2004.

    2004 WI App 78
    (Also reported in 680 N.W.2d 362.)

      On behalf of the defendant-appellant, the cause was submitted on the briefs of James Rebholz of Rebholz & Auberry, Milwaukee.
    On behalf of the plaintiff-respondent, the cause was submitted on the brief of Peggy A. Lautenschlager, attorney general, and William C. Wolford, assistant attorney general.
    Before Wedemeyer, PJ., Fine and Curley, JJ.

       Petition to review denied 5-12-04.

   FINE, J.

¶ 1. Richard G. White appeals from a judgment entered on a jury verdict convicting him of armed robbery with threat of force, see Wis. Stat. § 943.32(2), and from the trial court's orders denying his motion for postconviction relief. He claims that the trial court erred in determining that: (1) his trial lawyer did not give him prejudicially deficient representation; and (2) the State's failure to timely turn over the criminal-conviction record of the main prosecution witness was harmless. We reverse.

I.

¶ 2. White was convicted of robbing Dustin John Ehlers on October 12, 2000, when the latter was working the late-night shift in a Milwaukee 7-Eleven convenience store. According to Ehlers, White arrived at the store when he and another clerk, Jennifer Dragan, were smoking in the parking lot. Ehlers entered the store and White followed. Ehlers testified that after they discussed cigars and doughnuts, White forced him to take twenty-two dollars from the cash register by showing Ehlers a small silver automatic gun that White had in his belt underneath his coat. Dragan was outside during all this time.

¶ 3. What Ehlers testified was the robbery part of his interchange with White was recorded by a video camera that was visible by persons in the store, and Ehlers told the jury that he had pointed out the camera to White when White, according to Ehlers, had earlier wanted Ehlers to split a sealed package of cigars. The videotape shows the two of them separated by a counter on which White had placed what appears to be a bag of doughnuts. They talked, and Ehlers took money from the cash register and gave it to White. White then left. No gun is visible on the videotape. Although White's defense was that Ehlers supplied him frequently with marijuana and gave him the money to make up for a "short" in a sale two days earlier, Ehlers denied either knowing White or having seen him before that night.

¶ 4. White testified that Ehlers sold him marijuana some nine or ten times, the last time on October 10, 2000, when he bought marijuana for his sister's birthday party from Ehlers at the 7-Eleven and paid $325 for one-half pound. According to White, he and the others at the party noticed that there was less than one-half pound, and, on October 12, he returned to the 7-Eleven to try to "settle" things with Ehlers. White testified that a friend of his, Terrell Sonny, who was also at the party, drove him to the 7-Eleven on October 12 but remained in the car. White denied having a gun or threatening Ehlers. Rather, he told the jury that Ehlers voluntarily opened the cash register and gave him the money:

A. I asked Dustin. I mean, so I tell him, "How are we going to settle this that you came up short on the marijuana?"
Q. And what does he say?
A. "No," he said, "Man, he says, you know what? All right, you know, this is how we are going to do this. Look here. This is all that is right here. You can take this. I'm through messing with you." You know. "Don't call me, don't page me no more." And that was that.

Both White's sister, Kenyetta White, and White's cousin, Kenyon Devol Johnson, who were also at the party, testified that White had purchased marijuana for the party and that it was "short."

¶ 5. As noted, the jury convicted White of armed robbery. The trial court sentenced him to a thirty-year term of imprisonment, with twenty years of initial confinement and ten years of extended supervision. In his motion for postconviction relief, White claimed that his lawyer should have called both Sonny and Dragan as witnesses, and that the State should have revealed before the trial that Ehlers was, when he testified against White, on probation under a deferred-judgment of conviction for possessing marijuana as party to a crime, see Wis. Stat. §§ 961.41(3g)(b), 939.05, 961.47, entered by the circuit court of Richland County.

¶ 6. In support of his motion, White submitted affidavits executed by both Sonny and Dragan. As material here, Sonny averred in his affidavit that "before October 12, 2000," he had purchased marijuana from Ehlers at the 7-Eleven store "approximately 3 to 4 times." Additionally, although it is not mentioned in Sonny's affidavit, Sonny would have, presumably, also corroborated White's contention that Sonny had introduced him to Ehlers before October 12 as a source for marijuana.

¶ 7. Dragan averred in her affidavit, as material here, that although when White entered the store on October 12 it was her "responsibility to attend to this customer, Dustin said he would take care of it"; "[l]ater, [White] walked out of the store, smiled and said 'hi' to me as he walked out [to] the parking lot"; and she was aware that Ehlers "was stealing from the store." White also claimed that his trial lawyer should have sought jury instructions on lesser-included crimes of armed robbery, and faulted his lawyer for not consulting him.

¶ 8. The trial court denied White's motion for postconviction relief in a written decision. It ruled that neither Dragan's assertion that Ehlers had stolen from the store nor Ehlers's probationary status during White's trial was relevant, and that although some of the other matters to which Sonny and Dragan would have testified were relevant, that evidence "could not have deflected the force of the rest of the evidence in the State's case, or shored up the obvious weaknesses in the theory of the defense." The trial court also concluded, after holding a hearing under State v. Machner, 92 Wis. 2d 797, 804, 285 N.W.2d 905, 908-909 (Ct. App. 1979), that the decision by White's lawyer not to seek instructions on lesser-included offenses was a matter of trial strategy.

¶ 9. We agree with White that he is entitled a new trial because his lawyer did not present Sonny and Dragan as witnesses, and because the State did not timely disclose that Ehlers was on probation at the time of White's trial. Accordingly, we do not address the issue of whether White's trial lawyer was ineffective in connection with the lesser-included offenses. See Gross v. Hoffman, 227 Wis. 296, 300, 277 N.W. 663, 665 (1938) (only dispositive issue need be addressed).

II.

¶ 10. Every criminal defendant has a Sixth Amendment right to the effective assistance of counsel, Strickland v. Washington, 466 U.S. 668, 686 (1984), and a coterminous right under article I, section 7 of the Wisconsin Constitution, State v. Sanchez, 201 Wis. 2d 219, 226-236, 548 N.W.2d 69, 72-76 (1996). In order to establish that he or she received ineffective assistance of counsel, a defendant must prove: (1) that the lawyer gave deficient representation; and, as a result, (2) the defendant was prejudiced. Strickland, 466 U.S. at 687; Sanchez, 201 Wis. 2d at 236, 548 N.W.2d at 76. To prove deficient representation, the defendant must show that the lawyer's "acts or omissions were outside the wide range of professionally competent assistance." Strickland, 466 U.S. at 690. There is a "strong presumption that counsel acted reasonably within professional norms." State v. Johnson, 153 Wis. 2d 121, 127, 449 N.W.2d 845, 848 (1990). To prove prejudice, a defendant must show that the lawyer's errors were so serious that the defendant was deprived of a fair trial and a reliable outcome. Strickland, 466 U.S. at 687. Stated another way, "[t]he defendant must show that there is a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different. A reasonable probability is a probability sufficient to undermine confidence in the outcome." Id., 466 U.S. at 694.

¶ 11. Our review of a trial court's resolution of an ineffective-assistance-of-counsel claim presents mixed questions of law and fact. Johnson, 153 Wis. 2d at 127, 449 N.W.2d at 848. The trial court's findings of fact will not be disturbed unless they are clearly erroneous. Ibid. Whether the lawyer's performance was deficient and prejudicial are questions of law that we review de novo. Id., 153 Wis. 2d at 128, 449 N.W.2d at 848. We give special scrutiny to a defendant's claim that he or she was prejudiced by what the lawyer did or did not do when the case is close. State v. Smith, 2003 WI App 234, ¶ 22, 268 Wis. 2d 138, 150, 671 N.W.2d 854, 859.

¶ 12. This case, contrary to the trial court's view, was close. There were only two witnesses to the critical transaction — White and Ehlers. Additionally, the videotape, which we have studied, was, again contrary to the trial court's view, hardly conclusive — the tape revealed actions that were consistent with both stories. Thus, we agree with White that the trial's reliability was undermined because the jury was not able to assess the following evidence. See Strickland, 466 U.S. at 694; see also Lockhart v. Fretwell, 506 U.S. 364, 372 (1993).

¶ 13. Although White asserts that his trial lawyer should have introduced into evidence a number of things, we focus only on those that would have been admissible.

A. Dragan's affidavit.

1. Dragan's averment that Ehlers "was stealing from the store."

¶ 14. There are three hurdles that evidence of a person's other acts must clear: (1) the evidence must be "relevant," Wis. Stat. Rules 904.01 & 904.02; (2) the evidence must not be excluded by Wis. Stat. Rule 904.04(2); and (3) the "probative value" of the evidence must not be "substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by the considerations of undue delay, waste of time, or needless presentation of cumulative evidence," Wis. Stat. Rule 904.03. See State v. Sullivan, 216 Wis. 2d 768, 772-773, 576 N.W.2d 30, 32-33 (1998). Evidence is "relevant" if it has "any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence." Rule 904.01. This is not a high hurdle; evidence is relevant if it " 'tends to cast any light'" on the controversy. Zdiarstek v. State, 53 Wis. 2d 420, 428, 192 N.W.2d 833, 837 (1972) (quoted source omitted). Additionally, although evidence of bad things that a person may have done "is not admissible to prove the character of a person in order to show that the person acted in conformity therewith," such evidence may be introduced for other reasons, including proof of "opportunity" and "intent." Rule 904.04(2). We analyze the evidence against this background.

¶ 15. The trial court determined that Dragan's assertion that Ehlers stole from his 7-Eleven employer would not have been admissible because, although it "might have lent some credence to the defense theory that Mr. Ehlers took money out of the till voluntarily to repay a drug debt," it was "too vague to be probative." Specifically, the trial court faulted Dragan's affidavit for not providing "sufficient specificity to the nature of his thefts — what he stole or how he stole it — to enable a jury to conclude from her observations that what is shown on the tape is theft [by Ehlers] as opposed to a robbery." We disagree.

¶ 16. First, Ehlers started to work at the 7-Eleven store in early January of 2000, and left at the end of February of 2001. Thus, his stealing from the 7-Eleven store would not have been too distant from the October 12 incident. See Sullivan, 216 Wis. 2d at 786, 576 N.W.2d at 38 (probative value of evidence depends in large measure on its temporal proximity to the event at issue).

¶ 17. Second, in conjunction with Wis. Stat. Rule 904.06, which recognizes that "the habit of a person ... whether corroborated or not and regardless of the presence of eyewitnesses, is relevant to prove that the conduct of the person ... on a particular occasion was in conformity with the habit," the evidence was not barred by Wis. Stat. Rule 904.04(2) because it went to Ehlers's ability and willingness ("opportunity" and "intent") to treat his employer's money as something he could convert to his own use. Stated another way, Dragan's proposed testimony would " 'tend[ ] to undermine[]'" Ehlers's " 'innocent explanation'" for his handing the money to White. See State v. Roberson, 157 Wis. 2d 447, 455, 459 N.W.2d 611, 613 (Ct. App. 1990) ("intent" under Rule 904.04(2)) (quoted source omitted). Third, given that the evidence went to the core of White's defense, it can hardly be said that its probative value was "substantially outweighed" by any of the considerations in Wis. Stat. Rule 904.03.

2. White's demeanor and Ehlers's following White into the store.

¶ 18. As the trial court recognized, Dragan's observation that Ehlers volunteered to serve White supported White's contention that he and Ehlers knew one another before that evening. Additionally, as the trial court also recognized, White's demeanor in saying "hi" to her as they passed each other in the parking lot following the alleged robbery "might have weighed against the conclusion that Mr. White was at the store for malicious purposes." We agree with the trial court, however, that this evidence, by itself, was not sufficiently probative to satisfy the "prejudice" component of an ineffective-assistance-of-counsel claim. Nevertheless, this evidence should be admitted at any retrial.

B. Terrell Sonny's prior dealings with Ehlers.

¶ 19. This aspect has two parts: (1) Sonny's assertion that he purchased marijuana from Ehlers at the 7-Eleven "approximately 3 to 4 times," and (2) White's testimony that Sonny was the one who had introduced him to Ehlers as a marijuana source. We discuss these matters in turn.

1. Ehlers's alleged sales to Sonny.

¶ 20. Evidence that Ehlers sold marijuana to Sonny has to clear the same three Sullivan hurdles as does Dragan's proposed testimony that Ehlers had stolen from his 7-Eleven employer. The trial court recognized that "[w]hether Mr. Ehlers sold marijuana from the 7-Eleven store would be relevant" to bolster White's contention that he had purchased the marijuana for which he paid $325 from Ehlers at the store. We agree. Additionally, the evidence of Ehlers's prior marijuana sales to Sonny would not be excluded by Wis. Stat. Rule 904.04(2) because it goes to Ehlers's "intent" and "opportunity" to use the store as a convenient place to accommodate his marijuana customers. Finally, this evidence, too, went to the core of White's defense: that on October 10, 2000, he bought marijuana from Ehlers and was "shorted." Thus, as with the allegation that Ehlers had stolen from his employer, the probative value of evidence that he used his employer's property as a store from which to sell marijuana was not "substantially outweighed" by any of the considerations in Wis. Stat. Rule 904.03.

2. Sonny's introduction of White to Ehlers.

¶ 21. This evidence also went to the heart of both White's contention that he knew Ehlers before the October 12 incident, and, also, to contradict Ehlers's testimony that he had never seen White before October 12. Although "cumulative" in a technical sense, it was highly corroborative of White's defense, and, accordingly, its probative value was not "substantially outweighed by . . . [the] needless presentation of cumulative evidence." See Wis. Stat. Rule 904.03.

C. Ehlers's probationary status during White's trial.

¶ 22. Prior to White's trial, his lawyer asked the State to disclose "the criminal record ... of any prosecution witness." Ehlers was placed on probation for two years under a deferred-judgment of conviction in March of 2001. One year later, he was removed from probation "supervision" by an amended judgment but remained on probation under the deferred judgment, which according to the terms of the amended judgment remained "affirmed. . . [i]n all other respects." The prosecution never disclosed to White Ehlers's deferred-judgment probationary status when he testified against White. Although White also frames the probationary-status matter in terms of whether his trial lawyer was ineffective for not discovering Ehlers's status on his own, we analyze the matter in the context of the prosecutor's responsibilities under Wis. Stat. § 971.23(1). See Gross, 227 Wis. at 300, 277 N.W. at 665 (only dispositive issue need be addressed).

¶ 23. Under Wis. Stat. § 971.23(l)(f), a prosecutor must, upon request, disclose to the defense "[t]he criminal record of a prosecution witness which is known to the district attorney." A prosecutor, however, has an affirmative duty to make reasonable inquiry and may not assert that he or she did not know of those things within the ambit of § 971.23 that could have been reasonably discovered. See Wold v. State, 57 Wis. 2d 344, 349, 204 N.W.2d 482, 486 (1973) (prosecutor's duty to disclose encompasses duty "to obtain all evidence in the possession of investigative agencies of the state") (emphasis in original); see also Brady v. Maryland, 373 U.S. 83, 87 (1963) (non-disclosure of evidence favorable to defendant, when defendant has requested that information, violates due process "irrespective of the good faith or bad faith of the prosecution"); cf. State v. DeLao, 2002 WI 49, ¶ 21, 252 Wis. 2d 289, 301, 643 N.W.2d 480, 486 ("under certain circumstances, the knowledge of law enforcement officers may be imputed to the prosecutor"). Moreover, in this case an assistant district attorney signed the trial court's pre-trial order and, by virtue of her signature on that order, "acknowledge [d] an obligation to diligently seek and provide discoverable materials in a timely manner." (Emphasis added.) White's lawyer was entitled to rely on this acknowledgment. See Wold, 57 Wis. 2d at 351, 204 N.W.2d at 487 ("If there is to be pretrial discovery, broad or limited, in criminal cases, defense counsel should be able to rely upon evidence as disclosed by the state; otherwise, the purpose of discovery is frustrated and more injustice is done than if no discovery were allowed.").

¶ 24. The trial court held that Ehlers's deferred-judgment probationary status was not relevant because White disclosed to the jury that Ehlers had been convicted of a crime. The trial court explained: "The mere fact that he was on probation would not give the jury a reason to doubt his credibility, certainly not any more so than they already might by virtue of learning that he had been convicted of a crime." In rejecting White's contention that Ehlers's probationary status enhanced Ehlers's motive to lie about what happened on October 12 because an admission of theft from his employer would have jeopardized not only his continued probation but also the deferred nature of the judgment, the trial court opined: "While it would not be impossible for a jury to draw this conclusion from this evidence, it is equally plausible that the jury would conclude that his being on probation gave him an incentive not to perjure himself or obstruct an officer, which also might lead to revocation." The test, however, is whether the jury should have been permitted to consider the evidence so that their verdict was fair. See Kyles v. Whitley, 514 U.S. 419, 434 (1995).

¶ 25. A witness's probationary status is relevant because it and the fear of possible revocation are pertinent to the material issue of whether the witness has "ulterior motives" to shape his or her testimony. Davis v. Alaska, 415 U.S. 308, 311, 316, 317-318 (1974). Indeed, unless a defendant can "make a record" so the jury can assess why the witness might be testifying falsely, attacks on credibility will often be perceived by the jury as "a speculative and baseless line of attack." Id., 415 U.S. at 318; see also State v. Williamson, 84 Wis. 2d 370, 383, 267 N.W.2d 337, 343 (1978) ("extrinsic evidence may be used to prove that a witness has a motive to testify falsely"). Significantly, the non-disclosed evidence need not necessarily be of such force to result in an acquittal: "The question is not whether the defendant would more likely than not have received a different verdict with the evidence, but whether in its absence he received a fair trial, understood as a trial resulting in a verdict worthy of confidence." Kyles, 514 U.S. at 434. It may very well be that the jury would have adopted the trial court's analysis, but, under our system, White had the right to lay a foundation to present his theory to the jury and have the jury decide — every defendant is entitled to " 'a meaningful opportunity to present a complete defense.'" State v. St. George, 2002 WI 50, ¶ 14 n.8, 252 Wis. 2d 499, 512-513 n.8, 643 N.W.2d 777, 781-782 n.8 (quoted source omitted). In sum, we cannot say that failure to apprise the jury that Ehlers had a motive to lie about the robbery was " 'harmless beyond a reasonable doubt.'" See State v. Norman, 2003 WI 72, ¶¶ 47-48, 262 Wis. 2d 506, 528-529, 664 N.W.2d 97, 108-109 (quoted source omitted).

III.

¶ 26. White is entitled to a new trial.

By the Court. — Judgment and orders reversed.

       Wisconsin Stat. Rule 904.04(2) provides:
      Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that the person acted in conformity therewith. This subsection does not exclude the evidence when offered for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident.

       It is not clear from the appellate record whether the State disclosed the fact of Ehlers's conviction, as opposed to Ehlers's status. Ehlers admitted on cross-examination that he had previously been convicted of one crime, and it is not apparent whether this refers to the Richland County matter or another. Under Wis. Stat. § 961.47, a person is not eligible for deferral if he or she has been previously convicted of a drug crime.


author: SNYDER, J.

text:
    James E. Turner and L. Jean Turner, Husband and Wife, d/b/a EPCO Limited Partnership of Wisconsin, Petitioners-Appellants, v. Wisconsin Department of Revenue, Respondent-Respondent.
    Court of Appeals

      No. 03-1517.

      Submitted on briefs January 8, 2004.

    Decided March 3, 2004.

    2004 WI App 82
    (Also reported in 679 N.W.2d 880.)

      On behalf of the petitioners-appellants, the cause was submitted on the briefs of Scott V. Lowry of Waukesha.
    On behalf of the respondent-respondent, the cause was submitted on the brief of Peggy A. Lautenschlager, attorney general, and Mary E. Burke, assistant attorney general.
    Before Brown, Nettesheim and Snyder, JJ.
   SNYDER, J.

¶ 1. James E. and L. Jean Turner, d/b/a EPCO Limited Partnership of Wisconsin, seek to avoid paying a real estate transfer fee, interest, and a penalty assessed by the Wisconsin Department of Revenue on a conveyance of property to their newly formed limited liability partnership. They appeal a circuit court order affirming the decision of the Wisconsin Tax Appeals Commission and requiring the Turners to pay the assessment. The Turners contend that the court erred in refusing to apply the fee exemption available for transfers between husband and wife. We disagree and affirm the order of the circuit court.

FACTS

¶ 2. The facts are undisputed. James and Jean Turner are husband and wife. They were doing business as the sole partners of EPCO until it ceased operation on December 31,1997. As of January 1,1998, the Turners began doing business as the sole partners of EPCO of WI, LLP (EPCO LLP). On January 2, James, as general partner of EPCO, transferred real property from EPCO to EPCO LLP by warranty deed. At the time of the transfer, the deed was stamped "Fee exempt #77.25(15m)." The transfer was for no consideration other than assumption of the debt by EPCO LLP and receipt of an interest in EPCO LLP by the Turners.

¶ 3. On May 22,2001, the Department of Revenue issued an assessment advising the Turners that the exemption under Wis. Stat. § 77.25(15m) (2001-02) had been improper. The Department assessed a transfer fee of $7500 plus interest through July 1, 2001, of $3116.71, and a penalty of $1875. The Turners rerecorded the warranty deed on May 25, 2001. The new deed named James and Jean as grantees rather than EPCO LLP On June 1, 2001, the Turners filed a petition for redetermination of the Department's assessment, which the Department denied.

¶ 4. The Turners submitted their dispute to the State of Wisconsin Tax Appeals Commission (WTAC). The WTAC determined:

1. The conveyance of real estate on January 2, 1998 from EPCO to EPCO LLP is subject to the Wisconsin real estate transfer fee and is not exempt from that fee under Wis. Stat. § 77.25(15m).
2. The re-recording on May 25,2001 of the original deed with a different grantee, stating that it was a correction of the original conveyance, did not affect the imposition of the transfer fee on the original conveyance.

¶ 5. The Turners appealed the WTAC's decision to the Waukesha County Circuit Court. The circuit court concluded that the EPCO to EPCO LLP transfer was not a transfer from spouse to spouse, and therefore did not qualify for the Wis. Stat. § 77.25(8m) "husband and wife" transfer fee exemption. The circuit court also concluded that the transfer did not qualify for the § 77.25(15m) exemption for transfers between partnerships and family member partners. The Turners appeal, arguing that § 77.25(8m), the exemption for transactions between spouses, should apply.

STANDARD OF REVIEW

¶ 6. The Turners define the only appellate issue as the applicability of the husband and wife exemption provided under Wis. Stat. § 77.25(8m) to the EPCO conveyance. On appeal, we review the decision of the agency and not the order of the circuit court. Schwartz v. Wisconsin Dep't of Revenue, 2002 WI App 255, ¶ 14, 258 Wis. 2d 112, 653 N.W.2d 150. Our review of the record, specifically the Turners' brief to the WTAC and the decision of the WTAC, reveals that the husband and wife exemption was not argued below. The Turners' argument to the WTAC contended that § 77.25(15m) exempted the transaction, but contains only three brief references to § 77.25(8m). Interestingly, the Turners appear to concede their appellate issue in their argument to the WTAC. The Turners' WTAC brief states that if EPCO were not a partnership, "it would he exempt under 77.25(8m), as the legislature intended to exempt husband/wife transactions." As a result, the WTAC does not consider § 77.25(8m) in its decision and order. We are, therefore, left with the Turners' appellate issue to be reviewed in a vacuum.

¶ 7. This court is not bound by the Turners' characterization of the appellate issue, however. Cf. State v. Waste Mgmt. of Wis., Inc., 81 Wis. 2d 555, 564, 261 N.W.2d 147 (1978) ("An appellate court is not a performing bear, required to dance to each and every tune played on an appeal."). The dispute thus far has turned on the application of the exemption for transfers between partnerships and partners when a familial relationship exists under Wis. Stat. § 77.25(15m). Furthermore, the Turners' appellate brief centers on the characterization of partnership property as individual property, recalling the same theory advanced to the WTAC under § 77.25(15m). We deem this to be the appropriate appellate issue.

¶ 8. Three standards of deference govern judicial review of agency conclusions of law and statutory interpretation: great weight, due weight and de novo. Great weight, the most deferential standard, applies when (1) the agency was charged by the legislature with the duty of administering the statute, (2) the agency's interpretation of the statute is long-standing, (3) the agency employed its expertise or specialized knowledge in forming the interpretation, and (4) the agency's interpretation provides uniformity and consistency in application of the statute. Wolter v. Wis. Dep't of Revenue, 231 Wis. 2d 651, 655-56, 605 N.W.2d 283 (Ct. App. 1999). All four great weight deference criteria for judicial review of WTAC decisions are met where the WTAC applied statutes controlling real estate transfer fee exemptions and entity-to-entity transfers:

First, the WTAC is charged with the duty of administering the tax laws. See [Wis. Stat.] § 73.01(4)(a), Stats. Second, the WTAC's interpretation of §§ 77.21, 77.22 and 77.25, Stats., dates back to 1988. Third, the WTAC used its experience and expertise in interpreting the statutes and applying its interpretations to the facts. Finally, the WTAC's interpretation will insure fairness in the tax laws because it provides for uniformity and consistency in the application of the statutes.

Wolter, 231 Wis. 2d at 659. Because the WTAC "has experience in interpreting [this] particular statutory scheme," we conclude that the WTAC's decision regarding the Turners' claim is entitled to great weight deference. See Honthaners Rests., Inc. v. Labor and Indus. Review Comm'n, 2000 WI App 273, ¶ 12, 240 Wis. 2d 234, 621 N.W.2d 660. Accordingly, the agency's legal conclusions will be upheld if they are reasonable. Brown v. Labor and Indus. Review Comm'n, 2003 WI 142, ¶ 19, 267 Wis. 2d 31, 671 N.W.2d 279.

DISCUSSION

¶ 9. A grantor, conveying real estate, must pay a transfer fee unless the conveyance is exempted or excluded. Wis. Stat. § 77.22(1). Transfer fee exemptions are identified in Wis. Stat. § 77.25, and include conveyances between a husband and wife; a partnership and a partner, if all partners share a familial relationship; and, a limited liability company and its members, if all members share a familial relationship. Sec. 77.25(8m), (15m) and (15s).

¶ 10. The conveyance under review here is between EPCO, grantor, and EPCO LLP grantee. The Turners argue that a correction deed naming the Turners as grantees was filed; therefore, the conveyance was between EPCO and James and Jean. We are not inclined, however, to nullify the original, valid transfer between EPCO and EPCO LLP We agree with the WTAC's characterization that:

The "correction" deed did not, in fact, correct the original warranty deed transfer. Once real estate was conveyed from EPCO to EPCO LLP, the transfer was complete under [Wis. Stat.] § 706.02(1). The real estate was now under EPCO LLP The "correction" deed attempted to transfer the real estate from EPCO to the Turners. This was an attempt to nullify, not correct, the original transfer.

¶ 11. Now that we have defined the appellate issue and the underlying conveyance, we can apply the statute to the facts at hand. No transfer fee exemption for partnership-to-partnership conveyances is available under Wis. Stat. § 77.25(15m); however, transfers between a partnership and a partner may be exempt if the conveyance is:

[b]etween a partnership and one or more of its partners if all of the partners are related to each other as spouses, as lineal ascendants, lineal descendants or siblings, whether by blood or by adoption, or as spouses of siblings and if the transfer is for no consideration other than the assumption of debt or an interest in the partnership.

Sec. 77.25(15m). Three requirements must be met for the conveyance to be exempt under this section. First, the conveyance must be between "a partnership and one or more of its partners." Id. Second, all of the partners must be related to each other as specified in the statute. Id. Finally, the transfer must be "for no consideration other than the assumption of debt or an interest in the partnership." Id. The EPCO conveyance fails on the very first prong. EPCO LLC was never an EPCO partner. The Turners contend that partnership property is individual property of the partners under Wis. Stat. § 178.21(2), and therefore "deeds between partners are deeds between individuals, not deeds between entities." They argue that the EPCO conveyance was the equivalent of a conveyance between the Turners as individual family member partners of EPCO. We cannot agree. This court has held that:

Claimed exemptions from the fee for entity-to-entity transfers — between partnerships, corporations, and LLCs, all of which are comprised solely of family members — have not succeeded, in the absence of specific exemption language.

Wolter, 231 Wis. 2d at 658.

¶ 12. Here, the WTAC concluded that "there is no family member exemption where the transfer is between partnerships rather than from a partnership to exempted family members." We agree with the WTAC. For the exemption to apply, the partner or partners who are involved in the conveyance must be human beings, not just legal entities. Cf. F.M. Mgmt. Co. Ltd. P'ship v. Wis. Dep't of Revenue, 2004 WI App 19, ¶ 10, 269 Wis. 2d 526, 674 N.W.2d 922, review denied, 2004 WI 50, 271 Wis. 2d 112, 679 N.W.2d 547. ("The Commission upheld the Department's view that [Wis. Stat. § 77.25(15s)] applied only if the member of the limited liability company is a human. This was a reasonable conclusion."). Although the law does not limit the term "person" to human beings, we cannot conclude that "anything in either law or human experience ... equates 'spouses,' 'linear ascendants,' 'lineal descendants,' or 'siblings,' with non-human entities or that declares that non-human entities can he related to one another by either 'blood' or 'adoption.'" Id. ¶ 12 n.2. Such an interpretation of the legislature's intent would be unreasonable. We will reject an interpretation that leads to an absurd or unreasonable result. State v. Jennings, 2003 WI 10, ¶ 11, 259 Wis. 2d 523, 657 N.W.2d 393.

¶ 13. Accordingly, we agree with the WTAC that the conveyance "was between nonexempt partnerships, not between individual members of the partnerships." This is a reasonable interpretation of Wis. Stat. § 77.25(15m), and the Department properly disallowed the transfer fee exemption.

CONCLUSION

¶ 14. The Turners' attempt to invoke the husband and wife exemption under Wis. Stat. § 77.25(8m) fails because it was not raised before the WTAC. The transfer fee exemption available for conveyances between partnerships and family member partners is inapplicable because the conveyance was partnership-to-partnership rather than partnership-to-partner.

By the Court. — Order affirmed.

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

       The Turners’ brief contains the following three references to the exemption: "If there is no business for profit involved, than (sic) the favored relationship is somewhat different, consisting of parent and child, stepparent and stepchild, parent and son-in-law, parent and daughter-in-law and husband and wife. [Wis. Stat. §] 77.25(8) & (8m)."; "If it were not a partnership it would be exempt under [§]77.25(8m), as the legislature intended to exempt husband/wife transactions."; and "Nothing herein should be treated as waiving any claim to exemption of the EPCO transaction as a transfer between husband and wife ([§]77.25(8m))."

       The Turners first argued the husband and wife exemption, Wis. Stat. § 77.25(8m), in their brief to the circuit court. Though the circuit court applied the same great weight deference to the WTAC decision that this court adopts, the circuit court addressed the merits of the husband and wife exemption. We must assume that this was gratuitous on the part of the circuit court, as no application of § 77.25(8m) exists in the WTAC decision and order.

       A partner is co-owner with the other partners of specific partnership property holding as a tenant in partnership. Wis. Stat. § 178.21(2).

       The WTAC has decided other entity-to-entity transfer cases, for example: Sunset Meadows v. DOR, 98-T-129, 1999 WL 149768 (Wis. Tax App. Comm'n Mar. 5, 1999) (transfer from a family partnership to an LLC consisting of the same family members); Nicolet Invs. v. DOR, 96-T-943, 1998 WL 557177 (Wis. Tax App. Comm'n Sept. 1, 1998) (transfer from one family partnership to a second family partnership consisting of the same family members); Heritage Place Ltd. Partnership v. DOR, 92-T-400, 1995 WL 590145 (Wis. Tax App. Comm'n Oct. 5, 1995) (transfer from limited partnership to general partnership consisting of the same family members). Wolter v. Wisconsin Dep't of Revenue, 231 Wis. 2d 651, 658, 605 N.W.2d 283 (Ct. App. 1999).