text:
    In the Interest of Andrew J. K., a person under the age of 17: State of Wisconsin, Petitioner-Respondent, v. Andrew J. K., Respondent-Appellant.
    Court of Appeals

      No. 2005AP2395.

      Submitted on briefs March 24, 2006.

      Decided May 3, 2006.

    2006 WI App 126
    (Also reported in 718 N.W.2d 229.)

      On behalf of the respondent-appellant, the cause was submitted on the briefs of George M. Tauscheck, Milwaukee.
    On behalf of the petitioner-respondent, the cause was submitted on the brief of Patricia J. Hanson, assistant district attorney, and Michael E. Nieskes, district attorney, Racine.
    Before Snyder, PJ., Brown and Anderson, JJ.
   ANDERSON, J.

¶ 1. Andrew J. K. appeals from the trial court's order lifting a stay of a juvenile dispo-sitional order placing him in a secured correctional facility. Andrew claims that the trial court erred in relying on his failure to complete the Alternatives to Corrections through Education (ACE) Program in Racine County as grounds to lift the stay. Andrew argues that the court did not have the authority under Wis. Stat. ch. 938, the Juvenile Justice Code, to require his participation in the ACE Program as a condition of his dispositional order.

¶ 2. A review of the record reveals that the court did not order Andrew to enter the ACE Program as a condition of the dispositional order. Rather, in an effort to avoid juvenile corrections, Andrew voluntarily stipulated to an adjournment of the hearing concerning the stay and to his entry in the ACE Program. Furthermore, the record sustains the court's determination that, aside from his failures in the ACE Program, Andrew committed multiple violations of the original dispositional order. Accordingly, we affirm the court's order lifting the stay to corrections.

FACTS

¶ 3. On August 12, 2004, Andrew was adjudicated delinquent on his admission to the charge of possession of a prescription drug with intent to deliver. The court ordered a two-year placement in a juvenile corrections facility, but stayed the placement subject to Andrew's compliance with several conditions. These conditions included attendance at school with no unexcused absences or tardinesses, adherence to a curfew, submission to random drug testing, participation in counseling, compliance with the conditions contained in the dispositional orders from two other cases and compliance with treatment at Rogers Memorial Hospital Child and Adolescent Services Day Treatment Program. The dispositional order from one of the previous cases required Andrew to take "all medications as prescribed by his treating doctor" and to attend school daily without behavioral problems.

¶ 4. Andrew began the Rogers Memorial program on August 23. On September 14, a therapist with the program wrote a letter to Andrew's caseworker at the Racine County Department of Human Services. The therapist wrote that although Andrew demonstrated an ability to follow the program's rules, he chose not to do so. According to the therapist, Andrew tested the limits by being disrespectful to peers and staff, provoking his peers, exhibiting unsafe behavior, engaging in a physical altercation and refusing to take responsibility for his actions and make good choices. The therapist expressed concern that Andrew spent his time trying to figure out "how to get out of Rogers" instead of focusing on how he could accomplish his treatment goals. The therapist also noted that the psychiatrist with the program recommended that Andrew take medication, but that his mother was adamantly opposed.

¶ 5. On September 27, the State filed a motion for sanctions against Andrew for violations of the court order. The motion indicated that Andrew had failed to comply with the counseling condition. Andrew stipulated to two violations of the dispositional order. The court ordered a twenty-day placement in secure detention, with a stay of eighteen days provided Andrew complied with the dispositional order.

¶ 6. On November 11, the State took Andrew into custody and placed him in short-term secure detention for allegedly violating the dispositional order by skipping classes. On December 10, the State again placed Andrew in short-term secure detention for violating the dispositional order. Andrew had been sent home from school on December 8 and his mother suspected that he had been smoking marijuana.

¶ 7. On December 13, the State filed a request to change Andrew's placement and revise the dispositional order. The State indicated that although Andrew completed the Rogers Memorial program, he was uncooperative in doing so. He had "major school behavioral problems including failing grades, suspensions and refusal to do work or listen to teachers." The State asked the court either to place Andrew in the ACE Program if he stipulated to such placement or to lift the stay on his two-year corrections commitment. According to the request, "The Department does not know what else to do with Andrew."

¶ 8. The ACE Program was developed as an alternative to state correctional placements and is based upon the belief that education is the most important tool in addressing delinquent behavior. The ACE Program involves placement in a secure residential setting for an average of 100 to 140 days. During that time, participants engage in a variety of educational and personal growth activities, including alcohol and other drug abuse (AODA) education, career exploration, classes for school credit, journaling, project-hased learning and behavior management. Noncompliance with the program results in an immediate referral back to the juvenile court and the possible imposition of a correctional placement order.

¶ 9. In a stipulation dated December 17 and signed by Andrew and his attorney, Andrew agreed to participate in the ACE Program. He also waived "any and all statutory and constitutional time limits" impacting the State's request for a change in placement and revision of the dispositional order. The court approved the stipulation, stating, "The Court hereby makes a good cause finding for delay to allow the juvenile to voluntarily enter into the Racine County Human Services Department ACE Program, and adjourn the revision/change of placement hearing in this matter until such time as the juvenile is no longer a participant in the program."

¶ 10. On January 26, 2005, Andrew was terminated from the ACE Program "due to repeated physical aggression toward other peers in the ACE Program." On February 11, the State filed a motion to lift the stay on the order to corrections. In support of its motion, the State cited several violations of the dispositional order, including Andrew's uncooperative behavior during his treatment at Rogers Memorial, refusal to take recommended mediations, truancy from school between September and December of 2004, refusal to do school work and resulting failing grades, fighting while in secure detention prior to his entry into the ACE Program and the numerous altercations with other ACE Program participants from December 2004 until his termination in January 2005.

¶ 11. In response, Andrew argued that the ACE program lacked a statutory basis because it required his placement in a secure residential setting not specified as a dispositional alternative in Wis. Stat. ch. 938. Following arguments on February 16, the court rejected Andrew's argument. The court explained that Andrew had stipulated to his participation in the ACE Program and his entry into the program had the effect of delaying the original motion to lift the stay.

¶ 12. The court held a hearing on the motion to lift the stay on February 22. Following the testimony of Andrew's parents and caseworker at the Racine County Human Services Department, the trial court lifted the stay and committed Andrew to the Ethan Allan School for Boys. The court explained that while the evidence that Andrew had smoked marijuana on December 8, 2004, was not "particularly compelling," Andrew had otherwise violated the dispositional order. The court found that he was "disruptive and disrespectful at the Rogers Day Program" and "a disruptive force in one or two or three separate different ways in the ACE Program." The court observed that Andrew failed to take the doctor-recommended medication. Andrew appeals.

STANDARD OF REVIEW

¶ 13. In this appeal, Andrew asks us to interpret and apply Wis. Stat. ch. 938. The interpretation and application of a statute are questions of law subject to de novo review. See State v. Kendell G., 2001 WI App 95, ¶ 9, 243 Wis. 2d 67, 625 N.W.2d 918. Andrew also seeks review of the trial court's discretionary decision to lift the stay on his commitment to corrections. We will sustain a discretionary decision if the trial court examined the relevant facts, applied a proper standard of law, and used a rational process to reach a reasonable conclusion. Johnson v. Allis Chalmers Corp., 162 Wis. 2d 261, 273, 470 N.W.2d 859 (1991). Our task as the reviewing court is to search the record for reasons to sustain the trial court's exercise of discretion. Hughes v. Hughes, 223 Wis. 2d 111, 120, 588 N.W.2d 346 (Ct. App. 1998). We will not disturb a trial court's findings of fact unless they are "clearly erroneous." Wis. Stat. § 805.17(2).

DISCUSSION

ACE Program

¶ 14. Andrew complains that the ACE Program amounts to the illegal imposition of secure detention, contrary to Wis. Stat. ch. 938. He argues that Wis. Stat. § 938.34, the dispositional section, clearly confines the range of dispositional alternatives available to the court to those specifically authorized in the statute. Andrew misses the point — the court did not order his participation in the ACE Program.

¶ 15. Wisconsin Stat. § 938.34 lists a multitude of different programs, activities or placements a court might order, and refers to them as "[t]he dispositions under this section." Section 938.34(4m) permits a juvenile court to order an adjudged delinquent to a "secured correctional facility." Pursuant to § 938.34(16), a trial court, after ordering a disposition, may enter an additional order staying the execution of the dispositional order contingent on the juvenile's satisfactory compliance with any conditions the court specifies in the dispositional order and explains to the juvenile.

¶ 16. The statute permits a court to stay the imposition of a dispositional order, including revisions, in order to give the juvenile a second chance to conform his or her behavior to any conditions imposed by the court. Kendell G., 243 Wis. 2d 67, ¶ 16. Failure to comply with the conditions can trigger the commencement of the stayed portion of the dispositional order. Id. Wisconsin Stat. § 938.34(16) provides in part, "If the juvenile violates a condition of his or her dispositional order, the agency supervising the juvenile shall notify the court and the court shall hold a hearing within 30 days after filing of the notice to determine whether the original dispositional order should be imposed ...."

¶ 17. Here, after adjudging Andrew delinquent, the trial court, as permitted by Wis. Stat. § 938.34(4m), ordered a two-year placement in a juvenile corrections facility. The court, pursuant to its authority under § 938.34(16), stayed the commitment subject to Andrew's compliance with several conditions set forth at the hearing and in the order. Four months later, the State filed a request to change Andrew's placement and revise the dispositional order. Rather than face a hearing on a motion to lift the stay and the potential placement in a secured correctional facility, Andrew voluntarily chose to sign a stipulation to adjourn the hearing on the motion and to enter the ACE Program. In fact, he signed a consent form, in which he, among other things, (1) acknowledged that his attorney had explained the potential benefits and negative consequences of enrollment in the ACE Program and had provided him with a draft of the expected framework for the ACE Program; (2) recognized that the ACE Program "may be illegal, in that it is not provided for in Wisconsin's statutes"; (3) stipulated to the placement; and (4) waived time limits provided for in the statutes.

¶ 18. Although the court approved the stipulation, the court never ordered Andrew to enter the ACE Program. The court did not grant the adjournment on the condition that Andrew enter the ACE Program. The court determined only that Andrew's placement in the ACE Program supplied the "good cause" necessary to support the adjournment. See Wis. Stat. § 938.315(2). We find nothing amiss with this practice.

¶ 19. The fact that the Juvenile Court of Racine County, Racine County Human Services Department and Racine Unified School District have joined together to offer a voluntary residential treatment program for adjudged juvenile delinquents that is an alternative to a "secured correctional facility" not found in Wis. Stat. § 938.34 does not make a juvenile's participation illegal. As noted in Kendell G, a court is encouraged to give the juvenile a second opportunity to conform his or her behavior to any conditions the court imposed. Kendell G., 243 Wis. 2d 67, ¶ 16.

¶ 20. Furthermore, the court's adjournment, at Andrew's request, to permit him to participate in the ACE Program is in keeping with the spirit of Wis. Stat. ch. 938. Wisconsin Stat. § 938.01 provides in relevant part:

(2) It is the intent of the legislature to promote a juvenile justice system capable of dealing with the problem of juvenile delinquency, a system which will protect the community, impose accountability for violations of law and equip juvenile offenders with competencies to live responsibly and productively. To effectuate this intent, the legislature declares the following to be equally important purposes of this chapter:
(f) To respond to a juvenile offender's needs for care and treatment, consistent with the prevention of delinquency, each juvenile's best interest and protection of the public, by allowing the judge to utilize the most effective dispositional option.

The ACE Program, by providing educational and behavior modification resources in an intensive residential setting, certainly advances this legislative intent. We therefore commend Racine county for the development of this creative alternative to placement in a secured correctional facility. We further praise the individuals involved with the ACE Program for having the foresight to obtain from the juvenile participant waivers of statutory time limits and consents to voluntary participation.

Lift of Stay

¶ 21. Andrew next suggests that the court erred in lifting the stay. He argues that the court based its determination primarily on violations of the ACE Program, which we have decided was not a part of the dispositional order. He further asserts that the other violations were not sufficient to warrant the imposition of the original dispositional order.

¶ 22. A court may not impose the original dispo-sitional order unless the court finds by a preponderance of the evidence that the juvenile has violated a condition of his or her dispositional order. Wis. Stat. § 938.34(16). Here, aside from the alleged violations of the ACE Program conditions, the record supports the trial court's finding that Andrew violated conditions of the original dispositional order.

¶ 23. First, the dispositional order incorporates the conditions from dispositional orders in other cases. One such condition was that Andrew "take all medications as prescribed by his treating doctor." Contrary to Andrew's assertions, it does not matter that the specific medication prescribed was not mentioned at the motion hearing or that Andrew's parent's "discouraged (his] interest in medications." As the trial court noted, Andrew simply did not take the recommended medication. In her letter, the therapist at Rogers Memorial indicated that the psychiatrist had recommended medication, specifically a stimulant. Andrew's caseworker testified to his beliefs that Andrew "wanted nothing to do with meds" and did not take medication while at the Rogers Memorial program. Andrew's grandmother's comments from a September 29, 2004 hearing demonstrate that Andrew had not been on medication for the approximately four months prior to the hearing; This evidence supports the court's finding of a violation of the condition.

¶ 24. Second, the dispositional order dictated his compliance with the Rogers Memorial program. Although he completed the program, the trial court aptly pointed out that he had not cooperated in doing so. The therapist from Rogers Memorial indicated in her letter that Andrew had failed to fully follow the rules of, or participate in, the treatment program — he provoked his peers, failed to follow directions and exhibited disrespect towards the staff and his peers.

¶ 25. Andrew argues that the twenty-day secure detention he received as a sanction in September 2004 adequately addressed these violations. However, by lifting the stay, the trial court obviously determined that the twenty-day secure detention did not adequately address those violations. We see no reason to disturb that discretionary determination.

¶ 26. In addition, the record reveals violations occurring after September but before Andrew entered the ACE Program that were not explicitly discussed in the trial court's oral ruling. See Hughes, 223 Wis. 2d at 120 (court searches record for reasons to sustain a trial court's discretionary decision). The dispositional order demanded his daily school attendance without unexcused absence, tardiness and bad behavior. The record contains a chart from his school showing multiple truancies between September and December of 2004. The record reveals that, for reasons not entirely clear, Andrew had a problem with one of his teachers on December 8 and was sent home. The record also contains a statement from his caseworker that Andrew had "major school behavioral problems including failing grades, suspensions and refusal to do work or listen to teachers."

¶ 27. The record supports the trial court's findings that Andrew violated conditions of his disposi-tional order. Therefore, we conclude that the court did not erroneously exercise its discretion in granting the State's motion to lift the stay.

By the Court. — Order affirmed.

       This case was converted from a one-judge appeal to a three-judge appeal pursuant to Wis. Stat. § 809.41(3) (2003-04). All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise noted.

       Andrew's mother testified that she could not exactly remember why Andrew was sent home on December 8. She suggested that it may have been his refusal to complete his homework. Andrew's father testified that Andrew had "some kind of problem with one of his teachers."

       Andrew intimates that certain comments the court made at the hearing concerning the stipulation suggest that the court was, in fact, ordering Andrew to participate in the ACE Program. The court apparently commented on the merits of having Andrew participate. However, the page of the transcript he cites to, page four of record number thirty-five, is missing from the record. Even if we consider the court's comments, when they are read in the context of the whole hearing transcript and in conjunction with the court's written order, it is clear that the court uttered these remarks in support of its good cause finding.

       We also reject Andrew's reliance on Grams v. Melrose-Mindoro Joint School District No. 1, 78 Wis. 2d 569, 254 N.W.2d 730 (1977). He quotes the following language from that case, "When the legislative will is expressed in peremptory terms of a statute it is paramount and absolute and cannot be varied or waived by the private conventions of the parties." Id. at 578. From this he concludes that the "ACE Program could not have been transformed into a legal disposition by Andrew's stipulation."

        Grams does not apply here. The contract at issue in Grams required a teacher to instruct courses that she was not certified to teach when the statutes expressly declared that "[a] teaching contract with any person not legally authorized to teach the named subject... shall be void." Id. at 577; Holtzman v. Knott, 193 Wis. 2d 649, 690, 533 N.W.2d 419 (1995) (distinguishing Grams). Thus, the contract was explicitly proscribed by statute. Holtzman, 193 Wis. 2d at 690. Wisconsin Stat. ch. 938 does not expressly prohibit stipulations relating to a juvenile's voluntary entry into an alternative program or prohibit a court from finding good cause for an adjournment on the basis of the juvenile's entry into such a program. Indeed, as we have explained, the legislative will as expressed in Wis. Stat. § 938.01 and contemplated in State v. Kendell G., 2001 WI App 95, 243 Wis. 2d 67, 625 N.W.2d 918, seems to support such actions.


source: Caselaw Access Project

author: DEININGER, J.

license: Public Domain

text:
    JK Harris Financial Recovery Systems, LLC, Petitioner-Appellant, v. Department of Financial Institutions and Division of Banking, Respondents-Respondents.
    Court of Appeals

      No. 2005AP631.

      Submitted on briefs October 11, 2005.

      Decided May 4, 2006.

    2006 WI App 107
    (Also reported in 718 N.W.2d 739.)

      On behalf of the petitioner-appellant, the cause was submitted on the briefs of Kenneth R. Nowakowski and Lisa M. Arent of Whyte Hirschboeck Dudek S. C., Milwaukee.
    On behalf of the respondents-respondents, the cause was submitted on the brief of Charlotte Gibson, assistant attorney general, and Peggy A. Lautenschlager, attorney general.
    Before Lundsten, PJ., Deininger and Higgin-botham, JJ.

       Petition to review denied 9-21-06.

   DEININGER, J.

¶ 1. JK Harris Financial Recovery Systems, LLC, appeals a circuit court order that affirmed an order of the Administrator of the Division of Banking. The order requires JK Harris to cease certain business activities in Wisconsin because it is not licensed as an "adjustment service company" under Wis. Stat. § 218.02(l)(a) (2003-04). JK Harris contends that it is not an adjustment service company because it does not receive money from debtors to distribute to creditors, and it thus maintains that it need not be licensed under the cited statute. We accord the Division's interpretation of the statute great weight deference and conclude its determination that JK Harris is an adjustment service company is reasonable. Accordingly, we affirm the appealed order.

BACKGROUND

¶ 2. Wisconsin Stat. § 218.02 directs the Division of Banking, which is part of the Wisconsin Department of Financial Institutions, to license and regulate "adjustment service companies," which are defined as follows:

"Adjustment service company," hereinafter called company, shall mean a corporation, limited liability company, association, partnership or individual engaged as principal in the business of prorating the income of a debtor to the debtor's creditor or creditors, or of assuming the obligations of any debtor by purchasing the accounts the debtor may have with the debtor's several creditors, in return for which the principal receives a service charge or other consideration.

Section 218.02(l)(a) (emphasis added). The present dispute is over whether JK Harris's business activities in Wisconsin come within this definition.

¶ 3. According to the factual findings in the order under review, the Division's interest in JK Harris's Wisconsin business activities began when it received numerous complaints in 2003 and 2004 regarding JK Harris's solicitations mailed to Wisconsin residents. The letters were prominently marked "URGENT MESSAGE" and "FINAL NOTICE" in large or bold type, and they warned the recipient that a lawsuit had been filed or a judgment entered against the individual. The letters stated that, "if this is a debt you owe, we can help you" to "[slettle/eliminate all other troubling debt matters."

¶ 4. The Division accepted JK Harris's description of its services to Wisconsin residents as consisting of the following:

a. It contacts creditors and negotiates a reduction or extended payment on behalf of the debtor for the debtor's outstanding debt with that creditor.
b. It works with the debtor directly to set up a self-established budget and financial plan to assist the debtor in managing his or her finances, including making payments to creditors who have reduced their indebtedness or extended the time for payments.
c. In consideration of these services JK [Harris] receives a flat fee from the debtor.

¶ 5. After investigating the complaints it had received, the Division notified JK Harris that it was operating as an unlicensed "adjustment service company" contrary to Wis. Stat. § 218.02 and informed the company that it must cease conducting such business in Wisconsin. JK Harris agreed to cease its direct mail solicitations to Wisconsin residents while it applied for a license. The Division reviewed JK Harris's application and notified the company of deficiencies in its application.

¶ 6. The Division then issued an order directing JK Harris to cease doing business in Wisconsin as an adjustment service company, and JK Harris requested an administrative review of the order. The Division Administrator conducted the review, agreed with the Division's determination that JK Harris was operating as an unlicensed adjustment service company and issued a final Order to Cease and Desist. In addition to ordering JK Harris to "not conduct or attempt to conduct adjustment service company business with Wisconsin residents," the order directs the company to "refund any and all fees collected from Wisconsin residents." JK Harris petitioned for judicial review of the Division's order and the circuit court affirmed it.

ANALYSIS

¶ 7. JK Harris maintains that it is not an adjustment service company because it does not "prorat[e] the income of a debtor to the debtor's creditor or creditors" as set forth in Wis. Stat. § 218.02(l)(a). It notes that the Division found that JK Harris receives no payments from debtors to divide and distribute to creditors, and that its only activities are negotiations with creditors to obtain debt reductions or extensions, and working with debtors to establish budgets and payment plans regarding the renegotiated debts. JK Harris contends that the term "prorating," as used in § 218.02(l)(a), necessarily requires that, to be an adjustment service company, an entity must receive payments from debtors that it then divides and distributes to creditors. Thus, this appeal turns on the Division's interpretation of § 218.02(l)(a), and more specifically, on the meaning of the term "prorating" as used in that paragraph.

¶ 8. The interpretation of a statute is a question of law that we typically decide de novo. See Truttschel v. Martin, 208 Wis. 2d 361, 364-65, 560 N.W.2d 315 (Ct. App. 1997). Although JK Harris devotes a considerable portion of its opening brief to challenging the circuit court's reasoning in affirming the Division's order, it acknowledges in its reply brief that our review is of the agency's decision and order, not the circuit court's. See Barnes v. DNR, 178 Wis. 2d 290, 302, 506 N.W.2d 155 (Ct. App. 1993). Because an agency's interpretation of a statute is before us, we must decide whether to accord a measure of deference to the Division's interpretation, and if so, how much. The levels of deference we may accord to an agency's statutory interpretation are great weight, due weight or none at all. Hutson v. State Pers. Comm'n, 2003 WI 97, ¶ 31, 263 Wis. 2d 612, 665 N.W.2d 212; Jicha v. DILHR, 169 Wis. 2d 284, 290, 485 N.W.2d 256 (1992). The level we choose will generally depend upon the extent to which the " 'administrative agency's experience, technical competence, and specialized knowledge aid the agency in its interpretation and application of the statute.'" Jicha, 169 Wis. 2d at 290-91 (citation omitted).

¶ 9. The Division argues we should accord its interpretation great weight deference. Great weight deference applies when the following four requirements are met:

(1) the agency was charged by the legislature with the duty of administering the statute; (2) that the interpretation of the agency is one of long-standing; (3) that the agency employed its expertise or specialized knowledge in forming the interpretation; and (4) that the agency's interpretation will provide uniformity and consistency in the application of the statute.

Harnischfeger Corp. v. LIRC, 196 Wis. 2d 650, 660, 539 N.W.2d 98 (1995). Great weight deference is also appropriate when a legal question is interwoven with fact, value, or policy determinations that the agency routinely makes. Sauk County v. WERC, 165 Wis. 2d 406, 413, 477 N.W.2d 267 (1991); West Bend Educ. Ass'n v. WERC, 121 Wis. 2d 1, 12-13, 357 N.W.2d 534 (1984). Under the great weight standard, if the agency's interpretation is reasonable (that is, it is not contrary to the clear meaning of the statute), it will he upheld, even if the court finds another interpretation more reasonable. UFE Inc. v. LIRC, 201 Wis. 2d 274, 287, 548 N.W.2d 57 (1996).

¶ 10. Not surprisingly, JK Harris contends we should grant no deference to the Division's interpretation of Wis. Stat. § 218.02(l)(a) and, instead, proceed to interpret the statute de novo. A reviewing court will proceed in that fashion "when the issue before the agency is clearly one of first impression, or when an agency's position on an issue has been so inconsistent so as to provide no real guidance." Id. at 285 (citations omitted). According to JK Harris, the facts of this case present an issue of first impression, the Division has no special expertise to resolve this purely legal question, and its interpretation of § 218.02(l)(a) in this case contradicts its own regulations addressing adjustment service companies. JK Harris also asserts that the resolution of the statutory question is in actuality a determination of the scope of the Division's authority or jurisdiction, a question that is typically decided de novo by a reviewing court. See Loomis v. Personnel Comm'n, 179 Wis. 2d 25, 30, 505 N.W.2d 462 (Ct. App. 1993).

¶ 11. We reject JK Harris's contention that we should grant no deference whatsoever to the Division's interpretation of Wis. Stat. § 218.02(l)(a). The Division has licensed and regulated adjustment service companies since Wis. Stat. § 218.02 was enacted in 1935. See 1935 Wis. Laws, ch. 515. This case thus involves the Division's interpretation of a statute that it has long administered, and it is not necessary for the Division to point to a specific ruling on the same or nearly identical facts in order for us to defer in some measure to its determination that JK Harris is an adjustment service company as defined in § 218.02(1)(a). See Barron Elec. Coop. v. PSC, 212 Wis. 2d 752, 764, 569 N.W.2d 726 (Ct. App. 1997) ("The test is not.. . whether the commission has ruled on the precise — or even substantially similar —facts in prior cases"; the "key" is "the agency's experience in administering the particular statutory scheme," which "must necessarily derive from consideration of a variety of factual situations and circumstances.").

¶ 12. We similarly reject JK Harris's attempt to cast the statutory interpretation question in this dispute as one of agency jurisdiction. The question before us is not whether the Division has the authority to regulate adjustment service companies — it plainly does. Rather, the question is whether JK Harris is an adjustment service company subject to licensing and regulation under Wis. Stat. § 218.02. The case is thus analogous to National Motorists Ass'n v. Office of the Comm'r of Ins., 2002 WI App 308, 259 Wis. 2d 240, 655 N.W.2d 179, where we addressed whether the Office of Commissioner of Insurance (OCI) had correctly concluded a particular program offered by an organization to its members constituted "insurance" under the statutes, and that the organization was "doing an insurance business." Id., ¶ 10. We accorded OCI's interpretation of the applicable statutes great weight deference, noting that the agency had been administering the statutes since at least 1933; it employed its expertise in making its determinations; and its interpretation provided uniformity and consistency in the application of those statutes. Id., ¶ 12. The Division and its interpretation of § 218.02(1)(a) possess these same attributes.

¶ 13. We also concluded in National Motorists that "what constitutes insurance and doing an insurance business is intertwined with value and policy judgments inherent in OCI's statutory decision-making function," and that these determinations were "[i]n-deed ... at the core of the authority that the legislature has given OCI." Id., ¶ 12. These same observations apply to the question of "what constitutes an adjustment service company" and to the legislature's delegation of regulatory authority over adjustment service company business practices to the Division.

¶ 14. Regulatory agencies, like OCI and the Division, routinely make decisions concerning what activities lie within and without the reach of the statutes they administer. Subjecting each such decision to de novo redetermination on judicial review would result in courts supplanting the agencies as the de facto regulatory bodies, which is contrary to the express intent of the legislature, and, hence, to the doctrine of separation of powers. The legislature has directed the Division to "investigate, ascertain and determine whether this chapter... [is] being violated." Wis. Stat. § 218.02(9)(c). The Division has done precisely that in this case — it has investigated JK Harris's business practices and determined that the company's activities come within the reach of § 218.02.

¶ 15. We conclude the Division's determination that JK Harris is an adjustment service company is entitled to great weight deference from this court. Accordingly, we will affirm the Division's interpretation of Wis. Stat. § 218.02(l)(a) if it is reasonable, even if we might conclude that some other reading of the statute is more reasonable. See National Motorists, 259 Wis. 2d 240, ¶ 13. Moreover, under the great weight deference standard of review, the burden falls on JK Harris to convince us that the Division's interpretation of Wis. Stat. § 218.02(l)(a) is unreasonable. Id.

¶ 16. As we have described, the dispute in this case centers on the meaning of the word "prorating," which is not defined in the statute. We concur with the parties that, because no statutory definition is supplied, it is appropriate to consult a "recognized" dictionary for a definition. See State v. Polashek, 2002 WI 74, ¶¶ 19-21, 253 Wis. 2d 527, 646 N.W.2d 330 (consulting Black's Law Dictionary, Webster's Third New International Dictionary and Oxford English Dictionary). In his order, the Division Administrator accepted a dictionary definition proffered by JK Harris that "prorate" means "to divide, distribute, or assess proportionately." The administrator then explained why he concluded JK Harris's activities came within that definition:

This definition can be reasonably read to mean that taken separately or in combination with each other, three activities are considered to be prorating. The activities are i) to divide proportionately, ii) to distribute proportionately or iii) to assess proportionately.
The division correctly argues that the element of receiving and disbursing funds, or taking the physical possession of funds does not have to be present for prorating to occur. When JKH[arris] negotiates a reduction or extended payment on behalf of the debtor for the debtor's outstanding debt with that creditor, it is in fact dividing the debtor's income proportionately and is engaged in the activity of prorating the debtor's income, and as such is an entity subject to the requirements of [Wis. Stat. § ]218.02.

¶ 17. Although, under the great weight deference standard of review, the Division is not obligated to "justify its interpretation," National Motorists, 259 Wis. 2d 240, ¶ 13, we find the administrator's explanation reasonable. The legislature chose to employ the term "prorating," which, as JK Harris's proffered dictionary definition establishes, is a broader term than "distributing." That is, under the definition, one who prorates amounts of money may do so by distributing money proportionately, but the act of prorating may be accomplished in other ways (i.e., by dividing or assessing proportionately). We thus turn to JK Harris's specific arguments as to why we must conclude that the Division's interpretation is unreasonable.

¶ 18. JK Harris contends that the word "prorating," as used in the statute, requires that an adjustment service company receive funds from the debtor which it then "distributes proportionately" to creditors. JK Harris eliminates the other definitional possibilities by creating the following template of the statutory language: "the business of [ ] the income of a debtor to the debtor's creditor or creditors." It then inserts each of the three definitional alternatives (dividing, distributing, assessing) into the bracketed blank to replace the statutory term "prorating," and asserts that only "distributing" makes grammatical sense of the balance of the phrase because of the legislature's choice of the preposition "to." In other words, in JK Harris's view, the legislature's intended meaning of "prorating" can only mean "distributing" because "dividing income to creditors" and "assessing income to creditors" are at best awkward grammatically, while "distributing income to creditors" is a correct grammatical formulation.

¶ 19. Because there is no dispute that it does not physically receive a debtor's income and distribute it to creditors, JK Harris contends that it is not an "adjustment service company," but a mere advisor or counselor. It posits that the Division's interpretation leads to the unreasonable result that others who simply "communicate with" debtors, and with creditors on the debtor's behalf, such as "attorneys, accountants, [and] mortgage brokers" would require licensure under Wis. Stat. § 218.02(1)(a). JK Harris insists that interpreting the term "prorating" to mean "communicating" is contrary to the term's plain meaning and to the legislature's clear intent that a license is required only for acts of proration, not for the mere giving of advice. Finally, JK Harris contends that the Division's own rules implementing § 218.02 show that the receipt and disbursement of debtor funds is necessary for an entity to be deemed an adjustment service company.

¶ 20. JK Harris has not persuaded us that the Division's interpretation is unreasonable. Its grammatical-context argument misses the mark. We, of course, accept JK Harris's premise that we must examine the meaning of statutory language, not in isolation, but within its statutory context. See State ex rel. Kalal v. Circuit Court for Dane County, 2004 WI 58, ¶ 46, 271 Wis. 2d 633, 681 N.W.2d 110. We will not, however, summarily reject common and accepted meanings of a statutory term simply because they do not mesh nicely with a preposition found later in a statutory phrase. The legislature could have chosen in Wis. Stat. § 218.02(1)(a) to say "distributing proportionately," the meaning JK Harris advocates, instead of "prorating," but it chose the latter term and thereby placed a broader range of activities within the requirement for licensure.

¶ 21. We conclude that a more helpful contextual clue as to the legislature's intent than its choice of prepositions is found in Wis. Stat. § 218.02(7). The legislature there directs that the Division shall have the "duty" and the "power" to "prevent evasions of this section" and to "protect debtors from oppressive or deceptive practices of licensees." A narrowed interpretation of the term "prorating" in § 218.02(l)(a) would be inconsistent with these legislatively expressed goals. In short, the Division's interpretation of § 218.02(l)(a) is not unreasonable when the statute is read "in light of its textually manifest scope, context, [and] purpose." See Kalal, ¶ 49 n.8.

¶ 22. We also reject JK Harris's argument that simply giving advice or recommendations as to the proration of a debtor's income to a creditor or creditors constitutes only "communicating," which cannot be deemed "prorating" under the statute. It is not unreasonable for the Division to conclude that the purpose and nature of a company's communications with debtors and creditors may cause those communications to be "prorating" within the meaning of Wis. Stat. § 218.02(l)(a). The Division found, and JK Harris acknowledges, that, in return for a flat fee from a debtor, it negotiates with creditors to obtain reductions or extended payments on behalf of the debtor, and it then "works with the debtor" to set up a "self-established" budget and financial plan that includes "making payments to creditors who have reduced their indebtedness or extended the time for payments." It seems clear that the subject, purpose and result of JK Harris's communications with debtors and creditors is the apportioning ("dividing proportionately") of the debtor's income to (or among) his or her creditors. Put another way, the division of the debtor's income proportionately to his or her creditor or creditors would not occur absent JK Harris's involvement.

¶ 23. As for JK Harris's assertion that the Division's interpretation will bring attorneys and other service providers within the reach of Wis. Stat. § 218.02, we note first that the other professions JK Harris specifically points to are already subject to licensing and regulatory oversight of dealings with clients or customers. Moreover, as the Division notes, JK Harris's proffered limitation of § 218.02 to those who actually handle and distribute client funds would not exclude attorneys, who often do precisely that. Should the Division some day travel down JK Harris's posited slippery slope by attempting to require other regulated professionals and service providers to be licensed under § 218.02, a court may then have to decide whether it may do so despite the legislature's (or supreme court's) creation of distinct regulatory schemes for those occupations. That day has not arrived with the facts before us, however.

¶ 24. Finally, we acknowledge that many of the regulations in Wis. Admin. Code ch. DFI-Bkg 73 pertain to adjustment service companies that do receive and disburse a debtor's funds. As the Division points out, however, under its regulations, an adjustment service company need not handle client funds in order to charge allowable fees for setting up a debtor's budget or to accept "voluntary fees or contributions" from creditors. See § DFI-Bkg 73.01(l)(b) and (2). Moreover, simply because the Division's existing rules regulate certain practices adjustment service companies may engage in, that does not mean an entity whose business practices vary from those to which the existing rules apply cannot be deemed to come within the reach of Wis. Stat. § 218.02. It simply means that the Division may at some point find it necessary or advisable to adopt additional regulations that address business practices that, although they differ from those the Division has previously addressed in its rules, nonetheless constitute those of an adjustment service company.

¶ 25. In sum, JK Harris has not met its burden to persuade us that the Division's interpretation of Wis. Stat. § 218.02(1)(a) is unreasonable.

CONCLUSION

¶ 26. Because the Division's order rests on its reasonable interpretation of Wis. Stat. § 218.02(l)(a), we affirm the order of the circuit court.

By the Court. — Order affirmed.

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

       Whether the Division's action, or lack thereof, on JK Harris's license application was proper is not before us in this appeal.

       There appears to be no dispute that JK Harris's business practices do not come within the second category of activities that would render it an adjustment service company under the statute, "assuming the obligations of any debtor by purchasing the accounts the debtor may have with the debtor's several creditors." See Wis. Stat. § 218.02(l)(a).

       JK Harris argues that this case involves an issue of first impression in part because there are no appellate precedents interpreting the statute. However, the level of deference we accord an agency's interpretation does not depend on whether we have had a prior opportunity to interpret and apply the statute but whether the agency has had that opportunity. See Kelley Co. v. Marquardt, 172 Wis. 2d 234, 245, 493 N.W.2d 68 (1992) (De novo review "is applied when the case is clearly one of first impression for the agency" (emphasis added).).

       In its appellate appendix, JK Harris provides an excerpt from Black's Law Dictionaey 1450 (3d ed. 1933), defining "prorate" as follows: "To divide, share, or distribute proportionally; to assess or apportion pro rata." The Black's definition has not changed appreciatively since that time. See Black's Law Dictionary1257 (8th ed. 2004) ("To divide, assess, or distribute proportionately <prorate taxes between the buyer and the seller>").

       See, e.g., Wis. Admin. Code §§ DFI-Bkg 73.01(1)(a) (June 2004) ("The maximum monthly fee charged the debtor shall not exceed 10% of the amount of money paid to the licensee to be distributed to a creditor or creditors ... ."); DFI-Bkg 73.03(3) (June 2004) ("A licensee shall not commingle payments received from debtors with the licensee's own property or funds ...."); DFI-Bkg 73.03(4)-(6) (requiring periodic reports to debtor of receipts, disbursements to creditors and fees).

        See, e.g., SCR chs. 11, 20, 21, 22, 30, 40 (attorneys); Wis. Stat. ch. 442 (accountants); Wis. Stat. §§ 224.71-224.82 (mortgage brokers).


author: WEDEMEYER, P.J.

text:
    Barbara A. Meyers, Lynn Stucker, Loyal Berg and Eugene Browning, individually and on behalf of all others similarly situated, Plaintiffs-Appellants, v. Bayer AG, Bayer Corporation, Barr Laboratories, Inc., Rugby Group, Inc., Watson Pharmaceuticals, Inc. and Hoeschst Marion Roussel, Inc., Defendants-Respondents.

    Court of Appeals

      No. 2003AP2840.

      Submitted on briefs April 4, 2006.

      Decided May 9, 2006.

    2006 WI App 102
    (Also reported in 718 N.W.2d 251.)

      On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of John C. Cabaniss of von Briesen & Roper, S.C., Milwaukee.
    On behalf of the defendants-respondents Bayer AG and Bayer Corporation, the cause was submitted on the joint brief of Gerardo H. Gonzalez and Jeffrey Krill of Gonzalez, Saggio & Harlan, LLP, Milwaukee; Phillip A. Proger, Kevin D. McDonald, William V. OReilly and Lawrence D. Rosenberg of Jones Day, Washington, D.C.; Fred H. Bartlit, Jr., Peter B. Bensinger, Jr., Michael J. Valaik and Paul J. Skiermont of Bartlit Beck Herman Palenchar & Scott LLP, Chicago, IL.
    On behalf of the defendant-respondent Barr Laboratories, Inc., the cause was submitted on the joint brief of William J. Mulligan and Kathy L. Nusslock of Davis & Kuelthau, S.C., Milwaukee and Thomas D. Yannucci, PC., Karen N. Walker arid Edwin John U oí Kirkland & Ellis LLP, Washington, D.C.
    On behalf of the defendants-respondents Aventis Pharmaceuticals Inc., The Rugby Group, Inc. and Watson Pharmaceuticals, Inc., the cause was submitted on the joint brief of Stephen P. Hurley and Kristine A. Long of Hurley, Burish & Milliken, S.C., Madison and David E. Everson, Heather S. Woodson and Victoria L. Smith of Stinson Morrison Hecker LLP, Kansas City, MO.
    Before Wedemeyer, PJ., Fine and Kessler, JJ.

       Petition to review granted 7-25-06.

   WEDEMEYER, P.J.

¶ 1. Barbara A. Meyers, Lynn Stucker, Loyal Berg and Eugene Browning, representing a putative class of Wisconsin residents, (hereinafter "appellants") appeal from an order dismissing their complaint against Bayer AG, Bayer Corporation, Barr Laboratories, Inc., Rugby Group, Inc., Watson Pharmaceuticals, Inc. and Hoeschst Marion Roussel, Inc. (hereinafter "Bayer"), which alleged that Bayer violated Wis. Stat. § 133.03 (2003-04) antitrust laws by conspiring to inflate the cost of Cipro, a widely prescribed antibiotic. The trial court dismissed the complaint on the basis that Chapter 133 of the Wisconsin Statutes applies only to intrastate commerce. After the trial court's decision, our supreme court changed existing law, concluding that "Wisconsin's antitrust statutes may reach interstate commerce if... the conduct complained of 'substantially affects' the people of Wisconsin and has impacts in this state ...." Olstad v. Microsoft Corp., 2005 WI 121, ¶ 1, 284 Wis. 2d 224, 700 N.W.2d 139. Based on Olstad's holdings, the trial court erred in dismissing the appellants' complaint at this stage in the case; we reverse and remand for further proceedings consistent with this opinion.

BACKGROUND

¶ 2. The genesis of this case arises from a 1997 settlement of a patent lawsuit between Bayer, which held the patent to the active ingredient of the antibiotic Cipro, and Barr Laboratories, which made and sought to market a generic version of Cipro before Bayer's patent expired. Appellants contend that the settlement agreement created an antitrust conspiracy between Bayer and Barr Laboratories, resulting in Wisconsin residents having to pay inflated prices for Cipro.

¶ 3. Bayer owns the Cipro patent, issued on June 2, 1987, and which expired on June 9, 2004. On December 6, 1991, Barr Laboratories gave notice, pursuant to the Hatch-Waxman Act, see 21 U.S.C. § 355, that it had filed an Abbreviated New Drug Application with the FDA seeking permission to market generic Cipro before Bayer's patent expired. Barr Laboratories contended that Bayer's patent was invalid and unenforceable. Under the Hatch-Waxman Act, Bayer then had forty-five days to sue Barr Laboratories for patent infringement. See id. § 355(j)(5)(B)(iii).

¶ 4. On January 16, 1992, Bayer sued Barr Laboratories in the southern district of New York, alleging that Barr's application infringed on its Cipro patent. The FDA stayed approval of Barr's application. See In re Ciprofloxacin Hydrochloride Antitrust Litig., 363 F. Supp. 2d 514, 518 (E.D.N.Y. 2005). Barr answered the complaint and asserted counterclaims based on invalidity and unenforceability of the patent. Id. Before the case went to trial, Bayer and Barr Laboratories entered into a settlement agreement. In the agreement, dated January 8, 1997, Barr Laboratories consented to judgment in Bayer's favor affirming the Cipro patent's validity. Barr Laboratories agreed not to market its generic Cipro until after Bayer's patent expired. In exchange, Bayer agreed to pay Barr Laboratories ongoing settlement payments, which ultimately totaled $398 million.

¶ 5. On November 6, 2000, the appellants in the instant case commenced this action on behalf of themselves and a putative class of Wisconsin consumers who purchased Cipro during the class period. Bayer removed the case to the eastern district of Wisconsin federal court and it was subsequently transferred to the federal eastern district court in New York. On October 1, 2001, the New York district court judge remanded this matter back to the state court where it had originally been filed. See In re Ciprofloxacin Hydrochloride Antitrust Litig., 166 F. Supp. 2d 740, 742-43 (E.D.N.Y. 2001).

¶ 6. Upon remand of the matter back to the Milwaukee Circuit Court, Bayer filed a motion seeking to dismiss the appellants' complaint for failure to state a claim upon which relief could be granted. The trial court conducted a hearing on the motion. Following the hearing, the trial court entered an order dated September 19, 2003, concluding: "Because this court agrees that Wisconsin case law indicates that Chapter 133 applies to intrastate and not interstate commerce, the Defendants' motion to dismiss for failure to state a claim is granted. This court does not reach the merits of the Defendants' other ground for dismissal." Appellants now appeal from this order.

DISCUSSION

¶ 7. The sole issue in this case is whether the trial court erred in dismissing the appellants' complaint. We conclude, through no fault of its own, the trial court erred in dismissing the complaint. In reviewing an order granting a motion to dismiss, we apply the same standards as the trial court. Hennig v. Ahearn, 230 Wis. 2d 149, 164, 601 N.W.2d 14 (Ct. App. 1999). The purpose of a motion to dismiss pursuant to Wis. Stat. § 802.06(2) for failure to state a claim upon which relief can be granted, is to test the legal sufficiency of the complaint. Wausau Tile, Inc. v. County Concrete Corp., 226 Wis. 2d 235, 245, 593 N.W.2d 445 (1999); see also Evans v. Cameron, 121 Wis. 2d 421, 426, 360 N.W.2d 25 (1985). When it is clear that the plaintiffs cannot recover under any conditions, a motion to dismiss should be granted. Ramsden v. Farm Credit Servs., 223 Wis. 2d 704, 711, 590 N.W.2d 1 (Ct. App. 1998). When ruling on a motion to dismiss for failure to state a claim, the general rule is that the court should accept the facts as pleaded and all reasonable inferences to be drawn from them as true. Id.

¶ 8. Here, as noted, the trial court's decision was based on a line of authority that construed Chapter 133 very narrowly, limiting its reach to only intrastate transactions. See Conley Publ'g Group, Ltd. v. Journal Commc'ns, Inc., 2003 WI 119, ¶ 16, 265 Wis. 2d 128, 665 N.W.2d 879 ("the scope of Chapter 133 is limited to intrastate transactions"). Because the facts in this case involved interstate transactions, the trial court ruled there was no possibility for the plaintiffs to recover. However, on July 13, 2005, in Olstad, our supreme court withdrew the language from Conley Publishing, which limited the scope of Chapter 133 to intrastate transactions. Olstad, 284 Wis. 2d 224, ¶ 74. The court held that Chapter 133 can apply to interstate conduct in certain circumstances. Id.

¶ 9. In light of Olstad, it is clear that the trial court's view of the scope of Wisconsin Antitrust Act, Chapter 133 was erroneous. The instant case should not have been dismissed due to the fact that it involved interstate commerce, rather than intrastate commerce. Bayer, acknowledging the modification of the law established by Olstad, nevertheless argues that the trial court's dismissal was correct because the appellants failed to allege specific effects on Wisconsin consumers or on the Wisconsin economy. Bayer argues that in order to establish that the interstate transactions "substantially affected" the people of Wisconsin and had an adverse impact in Wisconsin, the appellants were required to assert specific harm, such as the number of prescriptions involved or the price paid for those prescriptions. We reject Bayer's arguments.

¶ 10. In Olstad, our supreme court held that Wisconsin's antitrust law may apply to interstate commerce when either of the following circumstances is alleged:

(1) actionable conduct, such as the formation of a combination or conspiracy, occurred within this state, even if its effects are felt primarily outside Wisconsin; or (2) the conduct complained of "substantially affects" the people of Wisconsin and has impacts in this state, even if the illegal activity resulting in those impacts occurred predominantly or exclusively outside this state. Operating with lesser standards would jeopardize the action, undermine the validity of our antitrust statute, and create the spectacle of Lilliputian harassment in Wisconsin courts.

Id., ¶ 85 (citation omitted). This case involves reviewing the second circumstance. Although Olstad itself does not specifically define "substantially affects," one of the cases Olstad discusses—State v. Allied Chemical & Dye Corp., 9 Wis. 2d 290, 101 N.W.2d 133 (1960)—did define this term, holding that defendants were liable because increased prices resulting from anticompetitive conduct substantially affected Wisconsin consumers:

The public interest and welfare of the people of Wisconsin are substantially affected if prices of a product are fixed or supplies thereof are restricted as the result of an illegal combination or conspiracy. The people of Wisconsin are entitled to the advantages that flow from free competition in the purchase of calcium chloride and other products, and if the state is able to prove the allegations made in its complaint it is apparent that the acts of the defendants deny to them those advantages.

Id. at 295. In reviewing the appellants' thirty-five-page complaint in this case, we accept as true the facts alleged. In their second amended complaint, appellants allege: (1) that Bayer executed an unlawful agreement that violates Wisconsin's antitrust law, by eliminating any generic competition for Cipro which, in turn, resulted in inflated prices for consumers; (2) the class represents all Wisconsin consumers who purchased Cipro in Wisconsin during the class period; (3) members of the class paid higher prices for Cipro than they otherwise would have if the Bayer monopoly had not existed; (4) identified class members purchased Cipro during the class period; (5) there are thousands of Wisconsin consumers who purchased Cipro; (6) based on Bayer's illegal actions, the class members have been "overpaying for Cipro because of the absence of competing generic versions of Cipro and will continue to pay supra-competitive prices until generic versions of the drug are available"; (7) generic versions of drugs cost thirty to forty percent less than the brand name drug and can be as much as seventy to eighty percent lower in price than the brand name drug; and (8) as a result of Bayer's illegal practices, class members have suffered economic losses to be determined at trial.

¶ 11. As noted in Allied Chemical, the people of Wisconsin are substantially affected if the price of a product is "fixed" as a result of illegal practices. This is exactly what the appellants in the instant case have alleged in their complaint. The complaint sets forth in great detail the conduct between Bayer and Barr Laboratories as it relates to Barr Laboratories' challenge to Bayer's patent and application to market the generic version of Cipro. The complaint sets forth the terms of the settlement agreement between the two companies, wherein Bayer would make large settlement payments to Barr Laboratories to resolve Barr Laboratories' attempt to litigate Bayer's exclusive right to sell Cipro. The complaint alleges that as a result of this illegal conduct, Wisconsin residents who purchased Cipro were forced to pay increased prices and this caused an economic loss to the class members.

¶ 12. Accepting all of the allegations in the complaint as true, we conclude that the complaint should not have been dismissed by the trial court. The complaint clearly sets forth sufficient allegations which, if proven, support a claim for violating Wisconsin's antitrust law and support appellants' contention that Bayer's conduct substantially affected the people of this state, and adversely impacted Wisconsin. Wisconsin Stat. § 133.01 sets forth the legislative intent of this state with regard to trusts and monopolistic practices:

The intent... is to safeguard the public against the creation or perpetuation of monopolies and to foster and encourage competition by prohibiting unfair and discriminatory business practices which destroy or hamper competition. It is the intent of the legislature that this chapter be interpreted in a manner which gives the most liberal construction to achieve the aim of competition.

In addition to the liberal construction favored by the intent of this statute, we afford complaints a liberal construction in favor of stating a cause of action. See Keller v. Welles Dep't Store of Racine, 88 Wis. 2d 24, 28, 276 N.W.2d 319 (Ct. App. 1979). We are not to be concerned at this stage in the proceeding with whether the appellants can actually prove the allegations; that task is for the trier of fact. Id. at 28.

¶ 13. Accordingly, based on the recent modification by Olstad of anti-trust law to include both intrastate and interstate transactions under certain conditions, we conclude that the trial court erred in dismissing this case at the complaint stage. The complaint in this case adequately sets forth the required facts and allegations to withstand a motion to dismiss. Based on the foregoing, we reverse the order of the trial court and remand this case for further proceedings consistent with this opinion.

By the Court. — Order reversed and cause remanded.

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

       The patent would have expired on December 9, 2003, but the Food and Drug Administration granted a six-month pediatric exclusivity extension to Bayer.

       At the time the patent case was settled, Bayer was receiving revenue from Cipro of approximately $1 billion per year, and the patent term had nearly seven years before it expired. See In re Ciprofloxacin Hydrochloride Antitrust Litig., 363 F. Supp. 2d 514, 538 n.22 (E.D.N.Y. 2005).

       The appellants filed a notice to appeal the trial court's decision, but sought a stay of the appeal pending the Wisconsin Supreme Court's decision in Olstad v. Microsoft Corp., 2005 WI 121, 284 Wis. 2d 224, 700 N.W.2d 139.

       Bayer also contends that two cases—Emergency One, Inc. v. Waterous Co., Inc., 23 F. Supp. 2d 959 (E.D. Wis. 1998) and Freeman Industries, LLC v. Eastman Chemical Co., 172 S.W.3d 512 (Tenn. 2005) — support its argument. These two cases, however, are distinguishable from the facts in the instant case. The facts alleged in the instant case involve in-state transactions by in-state residents. That was not the case for either Emergency One or Freeman Industries.


author: KESSLER, J.

text:
    In re the Paternity of William Pero: State of Wisconsin, Petitioner, Wendy Pero, Co-Petitioner-Respondent, v. Donald Lucas, Jr., Respondent-Appellant.
    Court of Appeals

      No. 2005AP1180.

      Submitted on briefs March 7, 2006.

      Decided May 9, 2006.

    2006 WI App 112
    (Also reported in 718 N.W.2d 184.)

      On behalf of the respondent-appellant, the cause was submitted on the briefs of Thea M. Keane and Denise Greathouse of Host & Keane, S.C., of Brookfield.
    On behalf of the co-petitioner-respondent, the cause was submitted on the brief of Linda A. Ivanovic of Ivanovic Law Offices, of Milwaukee.
    On behalf of the guardian ad litem, a brief was submitted by Kathryn Weaver of Weaver Law Offices, of Milwaukee.
    Before Wedemeyer, PJ., Curley and Kessler, JJ.
   KESSLER, J.

¶ 1. Donald Lucas, Jr., appeals from an order modifying legal custody and periods of physical placement of his son William. He argues that the trial court erroneously exercised its discretion when it: (1) awarded sole custody to Wendy Pero when neither party had raised the issue of changing from joint custody to sole custody; (2) took away Lucas's joint custody without making adequate findings under Wxs. Stat. §§767.24 and 767.325(l)(b) (2003-04); and (3) determined, before testimony was taken, that equal placement would not work. We affirm the portion of the order modifying the schedule for physical placement. However, we conclude that because the requirements of Wis. Stat. § 767.325(1)(b) were not followed, the trial court lacked authority to sua sponte modify the custody order from joint custody to sole custody. Therefore, we reverse that portion of the order and remand with directions that the trial court enter an amended order consistent with this opinion.

BACKGROUND

¶ 2. William, who was born in 1998, is the child of Lucas and Pero. The record reflects that at the time of William's birth, the parties were not living together and did not subsequently do so. It is unknown whether Lucas and Pero ever lived together as a couple.

¶ 3. In 1999, a paternity action was filed. In May 2001, the parties entered into a stipulation and order, which the trial court accepted, that provided for joint custody, awarded primary physical placement to Pero, and gave Lucas substantial periods of physical placement (hereafter "2001 Order"). Specifically, Lucas had placement from 7 a.m. to 11 a.m. four mornings a week, alternating weekends from 7 p.m. Friday through 11 a.m. Monday, and on specific holidays.

¶ 4. The 2001 Order also stated that the parties had stipulated "[t]hat the minor child's enrollment in full-time school shall be a change in circumstances, and either party may bring a motion at that time to modify the placement terms of this Order."

¶ 5. In February 2004, Lucas filed a motion to enforce the physical placement order, alleging that Lucas had been denied his periods of physical placement. He also moved to modify the physical placement schedule and sought the reappointment of a guardian ad litem. He did not request a change from joint custody. Lucas alleged that since William had begun full-time kindergarten in the fall of 2003, the parties had informally worked out some changes to the placement schedule, but that in January 2004, Pero had curtailed Lucas's placement. Lucas sought a modification of the placement schedule that would give him equal placement, as well as "other and further relief as the Court deems appropriate under the circumstances."

¶ 6. Pero subsequently filed a motion to modify the placement schedule and to modify child support. She did not request a change from joint custody. She argued that William's enrollment in school was, per the parties' 2001 stipulation, a "substantial change in circumstances" and that a modification of physical placement terms was necessary. The motion asserted that Lucas's weekday morning placement should be eliminated, as this placement "is too disruptive for William."

¶ 7. For reasons apparently related to scheduling, a hearing on the motions to modify placement was continued numerous times until February 24, 2005, when it took place before the trial court. It appears that in October 2004, while the motions were pending, the parties began using a temporary placement schedule that placed William with Lucas from 3:30 p.m. to 7 p.m. on Tuesdays and Thursdays, and every other weekend from Friday through Monday.

¶ 8. At the February 24, 2005 hearing, the trial court began by offering general comments on the case. The trial court asked for clarification concerning the issues before the court. Pero indicated that placement and support were at issue; Lucas indicated that placement was at issue. The parties offered a brief overview of the case, with Lucas's attorney alerting the trial court to Lucas's assertion that Pero has been "inflexible in terms of placement." Pero's attorney told the trial court that the parties had "communication issues." She explained: "[T]hey tried to communicate, they tried co-parent counseling. It doesn’t work."

¶ 9. In response to the comments on communication, the trial court and Lucas's trial counsel had the following exchange:

THE COURT: How is 50/50 going to work if they can't cooperate and communicate?
[COUNSEL FOR LUCAS]: If we have a time scheduled, these parties, and we're not in the middle of court, these parties have been able to work things out.
Our problem is that when they do that, they come to court and everything is taken away.
THE COURT: Just [bear] with me, okay? I think you know me well enough, I'm not prejudging anything. I have a 1999 paternity action. Eight pages of docket entries.
The last page is filled three or four entries. The first page is filled half, everything else is filled in full.
You're both back here again, which tells me that there's no way shared placement is going to work, because you all keep coming to court.
Someone is going to be primary and someone else is going to be alternate placement.

Lucas's counsel then provided the trial court with additional background, noting that the 2001 Order "indicated that the parties are to return to court, or may return to court, to modify the schedule to increase placement."

¶ 10. In response, the trial court said that it was not trying to argue with counsel, but noted:

I don't know who is not cooperating or communicating, but this case, on [its] face, and based upon your opening statements to me, about needing firm definite dates, because of the inability to cooperate, it's not a shared placement case.
Someone is going to get primary placement, and sole custody, and someone is going to get alternate placement.
I don't know if he's going to get it or she's going to get it. But that's where the case is heading....
Unless you can tell me there is a reason to go to trial on this thing, I'm telling you, if you go to trial, someone is going to end up primarily placed with sole custody based upon the status of the record, unless someone can prove something differently during the course of the trial.

¶ 11. Lucas's trial counsel indicated that she wanted to proceed with testimony. The trial court then stated:

I'll let you continue. I'll let you try your case.
I'm indicating, based on [the] undisputed status of the record today, based upon what the lawyers have said, even though you feel it's still workable, based upon what has been presented, there's a high probability it's going to go the opposite way.
Sole custody and primary placement. I'll keep an open mind. Let's see. Call your first witness.

¶ 12. Both Lucas and Pero testified. Lucas described his relationship with William, his parenting style, his efforts to spend more time with William, and his difficulties with Pero. He also testified that he now lives approximately twenty-five minutes away from Pero. Pero described her interactions with William and her preferences for a physical placement schedule.

¶ 13. Lucas, Pero and the guardian ad litem all made closing arguments, offering their suggestions with respect to physical placement. No one argued that joint custody should be changed to sole custody for either party.

¶ 14. With respect to placement, Lucas's trial counsel asked the trial court to give the parties equal placement. Pero's trial counsel argued that the parties should continue operating under the placement schedule that began in October 2004, with Lucas having William two afternoons a week and every other weekend, noting: "That schedule is working. Both parties said it's working." Pero's trial counsel also suggested that Lucas be given additional time in the summer.

¶ 15. The guardian ad litem also recommended that the parties continue the regular placement schedule that the parties began using in October 2004, with additional time for Lucas in the summer. She argued:

Both parents acknowledge William is a generally happy, well adjusted child. They’re both really good parents. They both really love William.
And I think it is also clear through the testimony, mom has more structure in her household than does dad. [That's] not a good thing or a bad thing.
However, during the school year, more structure is probably better, and during the summer, having a father that is really actively involved with the child, in my opinion, is that the father should have substantial periods of placement during the summer, and that's why I recommended an equally shared placement schedule during the summer.

With respect to the school year, however, the guardian ad litem reiterated that equal placement "simply doesn't work." She also commented on the parties' inability to communicate: "These parties have almost no ability to communicate with each other."

¶ 16. The trial court then made findings and a decision on the record. The trial court stated:

To have a shared placement, you have to communicate and get along and live in close proximity, and you can't bus the kid all over the country.
You don't want the child spending significant amounts of time in the vehicle, going from one point to another....
So close proximity, lots of communication, lots of cooperation. Lots of sharing.
Non rigid access for both mother and father, look towards each other, in the best interest of the child or children, to work together, is something very wonderful.
But none of those things exist in this case.
There is a lot of disagreement. Lots of excuses as to why it's the other person's fault. Both of you are some what [sic] to blame ....
If you can't cooperate and communicate, not only is shared placement not an appropriate avenue to pursue, but joint custody is not [an] appropriate avenue to pursue. All you do is find yourself in the troughs of litigation in the court of law.

The trial court also discussed the child's perspective:

[T]his [] child sees mom and dad disagree, as dad s,aid the boy - and mother acknowledges the boy - gets traumatized through all of this.
This kid, like any other kid, needs peace. This kid, like any other kid, needs stability and tranquility .... Without battle, or the War of the Roses, or a paternity action constantly going in and out of court.
That is what this case has been in the last five years. In and out of court. This court sat as a trier of fact, hearing the evidence and credibility of the witnesses, and looks at the testimony, looks at the demeanor of the witnesses, looks at the way they responded to questions, ... considers their maturity, parenting skills, their ability to respond as opposed to react.
Neither parent is abad parent here .... [T]he kid's very lucky because you both have a lot of love for your child.
But the child is not a piece of property. It's [sic] not a prize. It [sic] can't be bounced around.
And the parent who's demonstrated the better parenting skills, a greater level of maturity, the parent who demonstrated a greater level of responsibility, is the mother in this case.
And though dad is a wonderful father, because they can't communicate, and they both acknowledge they can't communicate, I can't keep having the turmoil in this child's life.
Sole custody is awarded to the mother at this time.

The trial court explained that "[t]o do otherwise, will foster more acrimony, differences, and unnecessary litigation. And it's going to do ultimate harm and damage to this child."

¶ 17. With respect to physical placement, the trial court ordered that the placement schedule in effect since October 2004 would stay in effect, which is what Pero and the guardian ad litem both requested. The trial court explained its reasoning: "I only think two transfers a week are important. I don't want this child bounced around." The trial court added:

If dad is willing to make a decision to move back into the school district with the child, and there's more flexibility, and parties can enter into a written agreement, and submit it to the court for signature, that tells me they're at a different level, and starting to he able to communicate, I would be willing to do something.

¶ 18. The trial court also said that Lucas should have "significant amounts of placement while the child is not in school." Therefore, the trial court awarded equal placement during the summer, based on a week-on, week-off schedule. It also awarded specific holidays to each party.

¶ 19. The trial court's ruling granted Lucas additional placement during the summer months; however, Lucas did not receive increased placement during the school year. Ultimately, Lucas received slightly more placement with William than he had under the 2001 Order, but less than the equal placement he was seeking. The trial court stripped Lucas of joint custody and awarded Pero sole custody. This appeal followed.

DISCUSSION

¶ 20. Lucas challenges the order's provisions with respect to custody and physical placement. Specifically, he argues that the trial court erroneously exercised its discretion when it: (1) awarded sole custody to Pero when neither party had raised the issue of changing from joint custody to sole custody; (2) took away Lucas's joint custody without making adequate findings under Wis. Stat. §§ 767.24 and 767.325(l)(b); and (3) determined, before testimony was taken, that equal placement would not work.

I. Legal standards

¶ 21. Pursuant to Wis. Stat. § 767.325(l)(b), governing "substantial modifications" to custody and physical placement orders after the initial two-year period, the trial court considers modifications using a two-step process.

First, as a threshold matter, whenever a requested modification "would substantially alter the time a parent may spend with his or her child," the moving party must show that there has been "a substantial change of circumstances since the entry of the last order affecting legal custody or the last order substantially affecting physical placement."

Greene v. Hahn, 2004 WI App 214, ¶ 22, 277 Wis. 2d 473, 689 N.W.2d 657 (quoting § 767.325(1)(b)1.b.).

¶ 22. If the trial court finds that there has been a substantial change in circumstances, it then moves to the second step: considering whether any modification would be" 'in the best interest of the child.'" Id. (quoting Wis. Stat. § 767.325(1)(b)1.a.). When considering the child's best interest, the factors to be considered in modifying legal custody or physical placement are those listed in Wis. Stat. § 767.24(5)(am), subject to § 767.24(5)(bm). Sec. 767.325(5m). The trial court "must presume that continuing 'the current allocation of decision making under a legal custody order' and continuing 'the child's physical placement with the parent with whom the child resides for the greater period of time' are both in the best interest of the child." Greene, 277 Wis. 2d 473, ¶ 22 (quoting § 767.325(1)(b)2.).

¶ 23. On review, whether a party seeking to modify an existing legal custody order or physical placement order has established a substantial change in circumstances is a question of law that we decide de novo. Id., ¶ 23. "When doing so, however, we must 'give weight to a trial court's decision' because the determination is 'heavily dependent upon an interpretation and analysis of underlying facts.'" Id. (citation omitted). With respect to the best interest determination, we consider whether the trial court has properly considered and weighed the appropriate factors to determine what is in the child's best interest, using the erroneous exercise of discretion standard. Id., ¶ 27.

II. Legal custody

¶ 24. It is undisputed that neither parent sought sole custody in their respective motions, and that neither parent nor the guardian ad litem argued that there had been a substantial change in circumstances warranting a change from joint custody to sole custody, although all heard the trial court suggest at the opening of the hearing that it would consider awarding sole legal custody to one parent. On appeal, both Pero and the guardian ad litem urge this court to affirm the order in its entirety.

¶ 25. Lucas points out that "neither party suggested that [the] joint custody arrangement had broken down and was no longer viable." Thus, he argues that the trial court lacked authority to modify legal custody on its own motion. He notes that after two years have passed since an initial order, Wis. Stat. § 767.325(l)(b)l., governing the revision of legal custody and physical placement orders, "grants the court the authority to modify an order of legal custody [']upon petition, motion or order to show cause by a party. ['] Nowhere does the statute grant the court the authority to modify legal custody on its own motion." (quoting § 767.325(1)(b)1.).

¶ 26. In response, both Pero and the guardian ad litem argue that the trial court had the authority to modify legal custody in William's best interest. The guardian ad litem also argues, without citation to authority, that "Lucas opened the door for the trial court to modify custody" when he requested, among other things, "other and further relief as the Court deems appropriate under the circumstances."

¶ 27. "[Although the trial court has a broad discretion with respect to custody determinations, which will be given great weight on review, courts have no power in awarding custody of minor children other than that provided by statute." Jocius v. Jocius, 218 Wis. 2d 103, 111, 580 N.W.2d 708 (Ct. App. 1998). Thus, the trial court's power "in custody and visitation matters is generally subject to legislative will and, absent an authorizing statutory provision, the court is usually powerless to act." Id. at 116-17.

¶ 28. Therefore, to determine the trial court's authority to amend the existing child custody order, we must look to Wis. Stat. § 767.325, governing revisions of legal custody orders and physical placement orders. We interpret statutes de novo. Abbas v. Palmersheim, 2004 WI App 126, ¶ 17, 275 Wis. 2d 311, 685 N.W.2d 546. "[T]he purpose of statutory interpretation is to determine what the statute means so that it may be given its full, proper, and intended effect." State ex rel. Kalal v. Circuit Court for Dane County, 2004 WI 58, ¶ 44, 271 Wis. 2d 633, 681 N.W.2d 110. We begin with the statute's language, giving it "its common, ordinary, and accepted meaning, except that technical or specially-defined words or phrases are given their technical or special definitional meaning." Id., ¶ 45. We also consider context, interpreting the statutory language "in the context in which it is used; not in isolation but as part of a whole; in relation to the language of surrounding or closely-related statutes; and reasonably, to avoid absurd or unreasonable results." Id., ¶ 46." 'If this process of analysis yields a plain, clear statutory meaning, then there is no ambiguity, and the statute is applied according to this ascertainment of its meaning.' " Id. (citation omitted).

¶ 29. Our review of Wis. Stat. § 767.325 identifies two relevant subsections: §§ 767.325(1)(b)1. and 767.325(6). Section 767.325(1)(b)1. provides:

Except as provided under par. (a) and sub. (2), upon petition, motion or order to show cause by a party, a court may modify an order of legal custody or an order of physical placement where the modification would substantially alter the time a parent may spend with his or her child if the court finds all of the following....

(Emphasis supplied.) The plain, unambiguous language of this subsection requires a petition, motion or order to show cause by a party, not a sua sponte action by the trial court. We perceive no ambiguity; a party must file a petition, motion or order to show cause in order to empower the trial court to act. In contrast, the legislature has, in other statutes, explicitly authorized trial courts to act on their own initiative. See, e.g., Wis. Stat. § 48.355(3)(b)1m. Section 767.325(1)(b)1. provides no similar, explicit authority to trial courts to consider changes in legal custody or physical placement on their own initiative.

¶ 30. The notice provision of Wis. Stat. ch. 767, found in Wis. Stat. § 767.325(6), further supports the conclusion that trial courts are not empowered to act sua sponte to modify legal custody. Section 767.325(6) provides: "No court may enter an order for modification under this section until notice of the petition, motion or order to show cause requesting modification has been given to the child's parents, if they can be found, and to any relative or agency having custody of the child." This does not contemplate providing notice of informal moves to modify custody, such as the trial court's sua sponte consideration of the issue. Moreover, § 767.325(6) emphasizes the need to give advance notice to parties of the issues to be addressed so that they can be adequately prepared.

¶ 31. Applying Wis. Stat. §§ 767.325(l)(b)l. and 767.325(6) to this case, we conclude that the trial court erroneously exercised its discretion when it sua sponte amended the order from joint custody to sole custody because § 767.325(1)(b)1. did not authorize the trial court to act on its own initiative. Without that authority, the trial court's actions with respect to custody cannot be supported. See Jocius, 218 Wis. 2d at 116-17. The trial court's actions also violated § 767.325(6), because the parties were not given notice of a "petition, motion or order to show cause" since one did not exist. The trial court's comments at the beginning of the hearing saying it was inclined to consider giving one party sole custody, did not give the parties time to prepare to address that issue, which is both factually and legally different than physical placement.

¶ 32. Finally, we reject the guardian ad litem's argument that Lucas opened the door to a consideration of sole custody by including the catchall phrase "other and further relief as the Court deems appropriate under the circumstances" in his motion. The guardian ad litem cites no authority for this proposition, and we therefore need not consider it. See State v. Pettit, 171 Wis. 2d 627, 646-47, 492 N.W.2d 633 (Ct. App. 1992) (We need not consider arguments which are undeveloped or unsupported by references to relevant legal authority.). We do observe, however, that if the guardian ad litem were correct, it would be impossible to provide meaningful notice under Wis. Stat. § 767.325(6), because the person receiving the motion could not know specifically which issues would be under consideration.

¶ 33. We conclude that absent a motion, petition or order to show cause brought by a party, as required by Wis. Stat. § 767.325(l)(b)l., the trial court lacked authority to amend or modify the custody order from joint custody to sole legal custody. We reverse that portion of the order modifying legal custody and remand with instructions that the trial court issue an amended order restoring joint custody.

III. Physical placement

¶ 34. We now consider whether the trial court erroneously exercised its discretion when it modified the order for physical placement. We review both the trial court's conclusion that there had been a substantial change in circumstances, and its determination that modifying the physical placement order was a proper exercise of discretion. See Greene, 277 Wis. 2d 473, ¶¶ 23, 27.

A. Substantial change in circumstances

¶ 35. Lucas was the original movant in this case, seeking a significant change to physical placement that would create a fifty-fifty placement arrangement. Lucas alleged that the parties had agreed in the 2001 Order that enrollment in school full-time "would constitute a change in circumstances to allow either party to bring a motion at that time to modify the terms of placement." Pero likewise asserted, in her motion to change the placement schedule, that there had been a substantial change in circumstances, citing the same reasons as Lucas.

¶ 36. In the middle of the hearing, the trial court explicitly asked the parties whether there had been a substantial change in circumstances. Lucas reiterated his position that the 2001 Order indicated that when William enrolled in school full-time, the parties could return to court, and that William's enrollment in school was a substantial change in circumstances. Although the guardian ad litem declined to offer an opinion as to whether there had been a substantial change in circumstances, she stated: "It's clear, judge, we do have to modify the current placement schedule, because the 2001 order does not accommodate the placement and school schedule.... Clearly they stipulated when the child starts school, that would be a reason to come back to court to modify."

¶ 37. Although the trial court did not make specific findings, it did state: "It seems the intent of this order was once the child goes to school, dad can no longer exercise seven a.m. to eleven a.m. and the terms of that should be modified, to give dad different times, so he could accommodate those hours with the child." The trial court's subsequent questions and findings were all based on the second step of the analysis: what was in the child's best interest. Thus, the trial court implicitly agreed with Lucas that a substantial change in circumstances had been established. We agree.

¶ 38. We conclude that the trial court implicitly found that there had been a substantial change in circumstances warranting a change in placement, and we affirm that finding. See Greene, 277 Wis. 2d 473, ¶ 23 (affirming finding that there had been a substantial change in circumstances where the trial court's findings were implicit, and where the record supported that finding). We agree that the existing facts constituted a substantial change in circumstances. The schedule in the original order was no longer possible, given William's enrollment in school full-time. At the time of the hearing, the parties lived twenty-five minutes apart, requiring a greater commute time than when the 2001 Order was entered. When the first order was entered, Lucas had been interacting with his then-three-year-old son for only about a year, but at the time of the hearing, Lucas had a more established relationship with his then-six-year-old son. Based on these undisputed facts, we affirm the trial court's implicit finding that there was a substantial change in circumstances warranting modification of placement.

B. Best interest determination

¶ 39. The second step in the process is a determination whether modification is in the child's best interest. Lucas contends that the trial court failed to examine any relevant facts before rejecting an equal placement, and that this was an erroneous exercise of discretion. Lucas misunderstands his burden under Wis. Stat. § 767.325. As the moving party, he must overcome the presumption that the status quo is in the child's best interest. There is no presumption that equal placement is in a child's best interest. Keller, 256 Wis. 2d 401, ¶ 12.

¶ 40. A trial court "erroneously exercises its discretion if it does not examine the relevant facts, applies the wrong legal standard, or fails to use a demonstrated rational process to reach a reasonable conclusion." Brown County v. Shannon R., 2005 WI 160, ¶ 37, 286 Wis. 2d 278, 706 N.W.2d 269. Lucas's argument is based on the trial court's comments at the beginning of the hearing, which included the trial court's observation that there were eight pages of docket entries and its statement that "[s]omeone is going to be primary and someone else is going to be alternate placement."

¶ 41. Viewed in isolation, the trial court's statements could suggest that the trial court decided the issue without first hearing evidence. Viewed in the context of all of the trial court's comments, however, we are satisfied that the trial court did not appear to prejudge the case. The trial court was apparently providing the parties with feedback based on their opening statements, and made clear that it would "keep an open mind" and not prejudge the case. The trial court was letting the parties know its initial reaction to the case, and providing suggestions for issues it wanted addressed.

¶ 42. Lucas also argues that the trial court erroneously exercised its discretion when it limited testimony. "The admission of evidence is a decision that is left to the discretion of the [trial] court." State v. Dunlap, 2002 WI 19, ¶ 31, 250 Wis. 2d 466, 640 N.W.2d 112. "We will not find an erroneous exercise of that discretion when the [trial] court has properly applied the facts of record to the accepted legal standards." Id. In deciding whether to admit evidence or limit testimony, the trial court considers a variety of factors, including whether the evidence is relevant, see Wis. Stat. § 904.01, and whether even relevant evidence should he excluded on grounds of prejudice, confusion or waste of time, see Wis. Stat. § 904.03.

¶ 43. Lucas asserts that the trial court unfairly allowed testimony only for the time beginning when Lucas filed his motion to modify physical placement. This is simply inaccurate. The trial court did limit testimony, but only after Lucas had testified about events prior to 2004 when he filed his motion. This testimony consisted of approximately seventeen pages of transcript. We discern no erroneous exercise of discretion.

¶ 44. Lucas also complains that he was not allowed to call character witnesses, because the trial court "insisted that all attorneys stipulate to what the witnesses would say on the stand." Essentially, the trial court accepted offers of proof rather than live testimony from some witnesses. We have reviewed the record, and are convinced that seeking stipulations where appropriate, and limiting testimony to those issues the trial court believed were most relevant, was a proper exercise of discretion. This is not a case where the parties were given only minutes to present their cases. There are one hundred and fifty-nine pages of hearing transcript, which included testimony from Pero and Lucas, as well as arguments from the parties. We discern no improper or prejudicial limit on testimony and thus no erroneous exercise of discretion.

¶ 45. Lucas does not challenge the physical placement order on other grounds. Having reviewed the record, we are convinced that there is sufficient evidence in the record to sustain the trial court's order with respect to physical placement. Notably, there was evidence that the schedule the parties were using at the time of the hearing was working well, and allowed William to spend significant time with both parents. The current order also recognizes that giving Lucas equal placement in the summer will work well, and provides more time to Lucas under the current order than under the 2001 Order. For these reasons, we affirm the order with respect to physical placement.

By the Court. — Order affirmed in part, reversed in part and cause remanded with directions.

       The order also directed Lucas to pay all guardian ad litem fees associated with his motion, and addressed several other issues. Those parts of the order are not challenged on appeal and will not be addressed.

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

       The 2001 Order was signed by the Hon. Daniel A. Noonan. The proceedings since 2004 that gave rise to this appeal were held before the Hon. Dominic S. Amato.

       The parties do not discuss the results of Lucas's motion to enforce physical placement. Any orders with respect to that motion were not appealed and will not be addressed.

       The affidavit introduced in support of Pero's motion erroneously states that the 2001 Order indicated that the child's enrollment in school would he a substantial change in circumstances. The 2001 Order did not include the word substantial.

       There is no signed order in the record stating this, but testimony at the hearing explained how the parties were handling placement as of February 2005.

       Wisconsin Stat. § 767.325 provides in relevant part:
      (1) Substantial modifications.
      (b) After 2-year period. 1. Except as provided under par. (a) and sub. (2), upon petition, motion or order to show cause by a party, a court may modify an order of legal custody or an order of physical placement where the modification would substantially alter the time a parent may spend with his or her child if the court finds all of the following:
      a. The modification is in the best interest of the child.

        b. There has been a substantial change of circumstances since the entry of the last order affecting legal custody or the last order substantially affecting physical placement.
      2. With respect to subd. 1., there is a rebuttable presumption that:
      a. Continuing the current allocation of decision malting under a legal custody order is in the best interest of the child.
      b. Continuing the child's physical placement with the parent with whom the child resides for the greater period of time is in the best interest of the child.
      3. A change in the economic circumstances or marital status of either party is not sufficient to meet the standards for modification under subd. 1.

       Wisconsin Stat. § 48.355(3)(b)1m provides:
      Except as provided in subd. 2., if a parent who is granted visitation rights with a child under par. (a) is convicted under s. 940.01 of the first-degree intentional homicide, or under s. 940.05 of the 2nd-degree intentional homicide, of the child's other parent, and the conviction has not been reversed, set aside or vacated, the court shall issue an order prohibiting the parent from having visitation with the child on petition of the child, the guardian or legal custodian of the child, a person or agency bound by the dispositional order or the district attorney or corporation counsel of the county in which the dispositional order' was entered, or on the court's own motion, and on notice to the parent.
      (Emphasis added.)

       Although neither party cited Abel v. Johnson, 135 Wis. 2d 219, 400 N.W.2d 22 (Ct. App. 1986) (overruled on other grounds, Herrell v. Herrell, 144 Wis. 2d 479, 488 n.3, 424 N.W.2d 403 (1988)), our independent research identified that case as one that addressed the trial court's authority to sua sponte consider joint legal custody. Abel stated: "[T]he vitality of the joint custody arrangement must be measured by the parties' actions —not their words. When faced with such a development, the family court should not hesitate to sua sponte raise the issue as to whether the joint custody award should be continued." Id. at 231. Abel was decided prior to the significant changes to Wis. Stat. ch. 767 that were made in 1988, which included the creation of the detailed procedure for modifying legal custody and physical placement orders, found in Wis. Stat. § 767.325. We conclude that because of legislative action our language in Abel relating to sua sponte consideration of joint legal custody is inapplicable.

       Because we reverse the legal custody order on this basis, we do not consider Lucas's argument that the trial court's decision to award Pero sole custody was an erroneous exercise of discretion.

       We need not decide whether the parties' 2001 stipulation that William's enrollment in school full-time would he "a change in circumstances" is sufficient, standing alone, to authorize this modification.

       We urge trial courts to avoid making statements that could be misinterpreted by htigants, as these were. Suggesting that one party would leave with sole custody and primary placement— even if the statement was hypothetical based on what the trial court expected to hear — can imply to the parties that they are not going to receive a fair hearing and reduce the probability of voluntary compliance with the trial court's ultimate decision.