author: SCHUDSON, J.

text:
    Walter G. Bohrer, Jr. and Wisconsin Souvenir Milkcaps, Inc., Plaintiffs-Respondents, v. City of Milwaukee and City of Milwaukee Police Department, Defendants-Co-Appellants, State of Wisconsin and James Doyle, in his capacity as Wisconsin Attorney General, Defendants-Appellants.
    Court of Appeals

      No. 00-3088.

      Submitted on briefs July 6, 2001.

    Decided September 25, 2001.

    2001 WI App 237
    (Also reported in 635 N.W.2d 816.)

      On behalf of the defendants-appellants and defendants-co-appellants, the cause was submitted on the joint briefs of James E. Doyle, attorney general, and Alan R. Kesner, assistant attorney general.
    On behalf of the plaintiffs-respondents, the cause was submitted on the brief of Thomas L. Frenn and Mark E. Sostarich, of Petrie & Stocking, S.C., of Milwaukee.
    Before Wedemeyer, EJ., Schudson and Curley, JJ.
   SCHUDSON, J.

¶ 1. The City of Milwaukee and the City of Milwaukee Police Department, together with the State of Wiscon sin and James Doyle, in his capacity as Wisconsin Attorney General, (collectively, "the State") appeal from the circuit court judgment granting declaratory judgment to Walter G. Bohrer, Jr., and his company, Wisconsin Souvenir Milkcaps, Inc. (collectively, "Bohrer"). The circuit court concluded that Bohrer's promotional games, "Discover Wisconsin Super Sports" and others Bohrer distributed that follow the same rules and procedures, comply with the requirements of Wis. Stat. § 100.16 and consequently are not illegal lotteries. We conclude that the circuit court was correct and, therefore, we affirm.

I. BACKGROUND

¶ 2. The factual background is undisputed. At all times relevant to the issues on appeal, Bohrer was the principal shareholder and chief executive officer of Wisconsin Souvenir Milkcaps, Inc., a company that produced milkcaps, also referred to as "pogs," put them on game pieces that were part of "Discover Wisconsin Super Sports" and other promotional games of chance, and marketed the games to fundraising organizations, fraternal groups and similar organizations, and retail outlets. The circuit court, in its comments leading to its decision granting Bohrer declaratory relief, explained how the "Discover Wisconsin Super Sports" game worked:

Bohrer provides the fundraiser with a packet of materials including the devices in question. The device is a milkcap that allegedly is used in children's games and saved by collectors — similar to baseball cards or Pokemon cards. The milkcap, or pog, is a cutout contained on a pull-tab type game of chance. The purchaser [who buys a game piece for $1.00] pulls the tabs to find out whether he or she wins a prize. The purchaser has the option to cut out the pog and save it. If a person wishes to obtain a game[]piece without a purchase, he or she may obtain it from Bohrer. The free pog is lined out, to detract from its collectibility, and does not come from the same packet as if the customer purchased from a retailer, but comes from a similar packet kept by Bohrer with the exact same odds of winning a prize.

¶ 3. In his affidavit, Walter G. Bohrer, Jr., maintained that his company "developed its promotional games to follow the same game-type format utilized by large retailers" including Coca-Cola Bottling Company of Wisconsin and McDonald's Corporation, and had "engaged the services of two different legal counsel to research the procedures and requirements that need to be followed in order to make a promotional game legal under Wisconsin law." Thus, he concluded in his second affidavit, because they were structured to allow the public to participate, free of charge, at the same odds as those purchasing a game piece, and because they complied with all statutory requirements, the games were legal in-pack chance promotions under Wis. Stat. § 100.16(2).

¶ 4. On January 11, 1999, City of Milwaukee police executed a search warrant at Bohrer's offices and seized a large number of milkcaps and numerous other materials, including some that were related to the promotional games. Maintaining that the promotional games were legal, Bohrer brought an action that ultimately sought relief including the return of "all milk-caps, promotional materials, computer files and related items seized" and a declaratory judgment that its promotions such as "Discover Wisconsin Super Sports" complied with Wisconsin law.

¶ 5. On June 22, 2000, the circuit court granted Bohrer's request for the declaratory judgment. While commenting that it was "inclined to agree with the [State], that the sale of 'Discover Wisconsin Super Sports' pieces is a thinly veiled lottery," the court concluded that Bohrer had "taken great pains to craft this promotion so it would conform to [Wis. Stat. §] 100.16," and had succeeded in doing so. We agree.

II. ANALYSIS

¶ 6. The State does not challenge any of the circuit court's factual findings regarding the nature of the game pieces and pogs and the operation of "Discover Wisconsin Super Sports." The State therefore submits that, based on the appropriate application of certain statutes to the facts, this court should conclude as a matter of law that "Discover Wisconsin Super Sports" is an illegal lottery.

¶ 7. Interpretation and application of a statute to undisputed facts presents a question of law subject to our de novo review. Wis. Cent. Ltd. v. DOR, 2000 WI App 14, ¶ 9, 232 Wis. 2d 323, 606 N.W.2d 226, review granted, 234 Wis. 2d 175, 612 N.W.2d 732 (Wis. Mar. 20, 2000) (No. 99-0194). Applying a clear and unambiguous statute, we "do not look beyond the statutory language to ascertain its meaning." Id. Nevertheless, we may "construe a statute whose meaning is clear if a literal application would lead to an absurd or unreasonable result." Coca-Cola Bottling Co. of Wis. v. La Follette, 106 Wis. 2d 162, 170, 316 N.W.2d 129 (Ct. App. 1982).

¶ 8. The State argues that "Discover Wisconsin Super Sports" is an illegal lottery. Wisconsin Stat. § 945.01(5)(a) (1999-2000) defines "lottery" as "an enterprise wherein for a consideration the participants are given an opportunity to win a prize, the award of which is determined by chance, even though accompanied by some skill." It is undisputed that "Discover Wisconsin Super Sports" would satisfy this definition. Under Wis. Stat. § 945.01(5)(b)2.g, however, "[t]o use a chance promotion exempt under s. 100.16(2)" does not "constitute consideration" for purposes of identifying a lottery under Wis. Stat. § 945.01(5)(a).

¶ 9. Wisconsin Stat. § 100.16(1) prohibits "[s]ell-ing with pretense of prize." It provides:

No person shall sell or offer to sell anything by the representation or pretense that a sum of money or something of value, which is uncertain or concealed, is enclosed within or may be found with or named upon the thing sold, or that will be given to the purchaser in addition to the thing sold, or by any representation, pretense or device by which the purchaser is informed or induced to believe that money or something else of value may be won or drawn by chance by reason of the sale.

Wisconsin Stat. § 100.16(2) then carves out an exception for in-pack chance promotions that satisfy seven conditions:

(a) Participation is available, free and without purchase of the package, from the retailer or by mail or toll-free telephone request to the sponsor for entry or for a game piece.
(b) The label of the promotional package and any related advertising clearly states any method of participation and the scheduled termination date of the promotion.
(c) The sponsor on request provides a retailer with a supply of entry forms or game pieces adequate to permit free participation in the promotion by the retailer's customers.
(d) The sponsor does not misrepresent a participant's chances of winning any prize.
(e) The sponsor randomly distributes all game pieces and maintains records of random distribution for at least one year after the termination date of the promotion.
(f) All prizes are randomly awarded if game pieces are not used in the promotion.
(g) The sponsor provides on request of a state agency a record of the names and addresses of all winners of prizes valued at $100 or more, if the request is made within one year after the termination date of the promotion.

Thus, if "Discover Wisconsin Super Sports" satisfied all the criteria of Wis. Stat. § 100.16(2), it was entitled to the statutory exemption and, therefore, did not include the "consideration" that otherwise would have brought it within the definition of "lottery" under Wxs. Stat. § 945.01(5)(a).

¶ 10. The circuit court concluded that the criteria under Wis. Stat. § 100.16(2) were clear and unambiguous, and that "Discover Wisconsin Super Sports" met them all. Challenging that conclusion, the State offers a somewhat curious argument: that "the specific technical requirements outlined in §§ 100.16(2)(a) through (g) are mostly clear and well defined," but that "the applicability of this statute is ambiguous" when "the technical requirements are read in isolation." Relying on HMO-W Inc. v. SSM Health Care System, 2000 WI 46, ¶ 25, 234 Wis. 2d 707, 611 N.W.2d 250, the State contends that "[w]hen the words of a statute do not directly answer whether a statutory scheme is applicable to a given set of facts, the statute is ambiguous, and the court should turn to extrinsic aids for interpretive guidance."

¶ 11. The State then goes on to argue that the criteria under Wis. Stat. § 100.16(2) really are not applicable at all because they only relate to in-pack chance promotions, which are not defined in the statutes, and that "Discover Wisconsin Super Sports," rather than being an in-pack chance promotion, is a lottery, plain and simple. The State fails to explain, however, how it can rely on the statutory lack of definition of "in-pack chance promotion" in order to establish that "Discover Wisconsin Super Sports" is not an in-pack chance promotion. The State's argument, circular at best, makes no sense.

¶ 12. The State traces the legislative history of Wisconsin lottery law in an effort to establish that the legislature, in enacting Wis. Stat. § 100.16(2), intended the in-pack-chance-promotion exception to be a "narrow exception to the lottery laws to increase the sales of legitimate products at retail." According to the State, the intent of the exception is that "[t]he purchaser must pay for the product at its regular retail price, with the chance promotion being only an added bonus, at no extra cost to the consumer." The State maintains, therefore, that the exception was not intended to encompass promotions like Bohrer's. But the State still fails to suggest any logical basis on which we could conclude that the detailed and apparently defining criteria of section 100.16(2) do not establish the definition of an exempted "in-pack chance promotion." See Barakat v. DHSS, 191 Wis. 2d 769, 786, 530 N.W.2d 392 (Ct. App. 1995) (appellate court need not consider "amorphous and insufficiently developed" argument).

¶ 13. Thus, the real issue simply is whether "Discover Wisconsin Super Sports" satisfied the statutory criteria, under Wis. Stat. § 100.16(2), to qualify for the exemption, under Wis. Stat. § 945.01(5)(b)2.g, from the definition of "lottery" under Wis. Stat. § 945.01(5)(a). Notably, the State tacitly concedes Bohrer's "strict adherence to the technical details of § 100.16(2)(a)-(g)," and fails to identify any way in which "Discover Wisconsin Super Sports" did not satisfy the statutory criteria. Instead, while still arguing that the game "does not fit the in-pack chance promotion exception found in § 100.16(2)," the State merely maintains, once again, that Bohrer is not selling "genuine products sold at regular retail prices" and, therefore, that the games simply "are designed to allow purchasers to conduct an illegal lottery."

¶ 14. The State, however, offers nothing to explain why Bohrer's milkcaps are not "genuine products." After all, as Bohrer reasonably responds:

[WISCONSIN Stat.] § 100.16(2) simply does not have such a requirement. Even assuming[,] arguendo, that such a non-enforceable requirement existed under the statute, Wisconsin Souvenir's collectable milkcaps clearly meet any reasonable definition of an actual or genuine product. Wisconsin Souvenir's collectable milkcaps can be used in the children's game pog, and can be maintained in collections.

(Footnote added.) Thus, Bohrer contends, the State's argument depends on reading additional, unstated requirements into the statute. Bohrer is correct. Indeed, the State offers nothing to counter Bohrer's assertion that "Discover Wisconsin Super Sports" has "followed the identical guidelines and. . . complied with the statutory exception" under which several major companies have generated their promotional games. See Charolais Breeding Ranches, Ltd. v. FPC Sec. Corp., 90 Wis. 2d 97, 109, 279 N.W.2d 493 (Ct. App. 1979) (unrefuted argument deemed admitted).

¶ 15. As we recently reiterated:

It has long been held that the purposes of the [Uniform Declaratory Judgments] Act are furthered by authorizing the [circuit] court to take jurisdiction at a point in time that may be earlier than it would ordinarily do so. And in so doing, the Act provides relief, that is to some degree, anticipatory or preventive in nature.

Juneau County v. Courthouse Employees, 216 Wis. 2d 284, 293, 576 N.W.2d 565 (Ct. App.), aff'd, 221 Wis. 2d 630, 585 N.W.2d 587 (1998). Moreover, the Act "is declared to be remedial; its purpose is to settle and to afford relief from uncertainty and insecurity with respect to rights, status and other legal relations; and is to be liberally construed and administered." Wis. Stat. § 806.04(12). Where a company complies with Wisconsin's laws governing in-pack chance promotions, it is entitled to declaratory judgment and injunctive relief protecting it from governmental interference with the promotions. See Coca-Cola, 106 Wis. 2d at 172. Accordingly, we conclude that the circuit court was correct in granting Bohrer the requested relief.

By the Court. — Judgment affirmed.

       The judgment also ordered the State to return all the promotional game materials it seized from Bohrer, and enjoined the State "from further interfering with, or attempting to prevent [Bohrer] from distributing or promoting" the promotional games "which include or are in the nature of the 'Discover Wisconsin Super Sports Promotion.'"

       According to Walter G. Bohrer, Jr.'s affidavit, his company's milkcaps are collectable items similar to those used many years ago, which were packaged under milk bottle caps to promote milk sales. More recently, the term "pog" has been used to refer to the milkcap itself, or to the children's game in which the milkcaps sometimes are used.

       Also according to the affidavit, Bohrer provided each promoter with a packet that included: "game pieces; detailed instructions on how to operate the promotion; a written agreement for the [promoter] to sign indicating the [promoter] has read and understands the promotion's rules; request forms to be used to obtain free game pieces; winner reporting forms and advertising materials." Additionally, the affidavit states that each promotion's rules and regulations, each game piece, and all promotional materials clearly indicate that no purchase is required in order to play.

       Apparently, some of the games offered attractive odds. According to the affidavit of John A. Palmer, Director of the Gaming Enforcement Bureau in the Division of Criminal Investigation of the Wisconsin Department of Justice, Bohrer's promotional games provided winning odds that were "higher than the odds for the Wisconsin Lottery."

       The circuit court concluded that Wis. Stat. § 100.16 was clear and unambiguous, and that Bohrer had fully complied with the requirements of § 100.16(2). As we will explain, the State, while not contending that the statute itself is ambiguous, maintains that its "application" is ambiguous.
      Bohrer responds, in part, by asserting that the State, on appeal, is arguing ambiguity for the first time and, therefore, we should not address the argument. See Wirth v. Ehly, 93 Wis. 2d 433, 443-44, 287 N.W.2d 140 (1980) ("[I]ssues not raised or considered in the trial court will not be considered for the first time on appeal."). In reply, the State disagrees but concedes that "the record does not contain the transcript of oral argument" before the circuit court where, the State suggests, its ambiguity claim was first raised. As the appellant, the State was responsible for perfecting the appellate record. Fiumefreddo v. McLean, 174 Wis. 2d 10, 26-27, 496 N.W.2d 226 (Ct. App. 1993) (appellant is responsible for ensuring completion of appellate record, and "when an appellate record is incomplete in connection with an issue raised by the appellant, we must assume that the missing material supports the trial court's ruling"). Nevertheless, we will address the State's ambiguity argument, to the extent that it relates to the State's central arguments in this appeal. See Wirth, 93 Wis. 2d at 444 (when new issue raised on appeal is legal question that has been thoroughly briefed and there are no disputed factual issues, appellate court has discretionary authority to address the issue).

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

       In HMO-W Inc. v. SSM Health Care System, 2000 WI 46, 234 Wis. 2d 707, 611 N.W.2d 250, both the appellant and the respondent maintained that the language of the applicable statute was clear and unambiguous, but the respondent contended that the words of the statute reflected an intent that was the opposite of that contended by the appellant. Id. at ¶¶ 21-23. The supreme court concluded, therefore, that the statute was ambiguous, and it "turn[ed] to extrinsic aids for interpretive guidance." Id. at ¶ 25.
      The supreme court has explained: "A statute is ambiguous if it is capable of being understood by a reasonably well-informed person in either of two senses. Depending on the facts of a case, the same statute may be found ambiguous in one setting and unambiguous in another." Reyes v. Greatway Ins. Co., 221 Wis. 2d 357, 365, 597 N.W.2d 687 (1999) (citations omitted).

       The record includes substantial and, for the most part, undisputed documentary evidence that milkcaps are collectable and valuable.

       In its reply brief, the State for the first time also argues that if the statutory in-pack-chance-promotion exception applies, then Bohrer has not complied because "the specific requirements of [Wis. Stat.] §§ 100.16(2) (a)-(f) make it apparent that the 'free' contest entries must come from the same game as those given to paying entrants." The State then points out that Bohrer has not contended that the free game pieces come from exactly "the same game," but rather, that Bohrer has maintained that he complied with the statute because the free pieces come from "an identical set."

        Although we need not consider the State's argument, see A.O. Smith Corp. v. Allstate Ins. Cos., 222 Wis. 2d 475, 492, 588 N.W.2d 285 (Ct. App. 1998) (appellate court need not address argument raised for first time in reply brief), we briefly do so here because, we believe, the argument is clearly indicative of the unrealistic approach the State has taken in this appeal.
      Wisconsin Stat. § 100.16(2)(a) provides that, to come within the exception for in-pack chance promotions, "[p]articipation" must be "available, free and without purchase of the package, from the retailer or by mail or toll-free telephone request to the sponsor for entry or for a game piece." The declaratory judgment submissions established that Bohrer complied and, indeed, that some of those who requested free game pieces actually won.
      The fact that Bohrer maintained a separate set of game pieces with identical odds, specifically in order to fulfill requests for free game pieces and thereby comply with the statute, certainly does not carry Bohrer outside the statutory exception. See Coca-Cola Bottling Co. of Wis. v. La Follette, 106 Wis. 2d 162, 164, 316 N.W.2d 129 (Ct. App. 1982) (earlier version of Wis. Stat. § 100.16 not violated by use of specially marked bottlecaps in promotion in which consumers could win money in amounts listed under liners of caps, where caps "were placed in one pool which was then randomly divided into two pools, one for free distribution and the other for actual capping of bottles to be sold to consumers"). Although the State argues that it was "apparent" that the free contest entries must come from the same game, the State fails to explain how one could comply with the requirements of Wis. Stat. § 100.16(2)(a) without maintaining a separate supply of game pieces. See Coca-Cola, 106 Wis. 2d at 170 ("A court may construe a statute whose meaning is clear if a literal application would lead to an absurd or unreasonable result.").


source: Caselaw Access Project

author: CANE, C.J.

license: Public Domain

text:
    Charles A. Kramer, Plaintiff-Appellant, v. Board of Education of the School District of the Menomonie Area, Defendant-Respondent.
    Court of Appeals

      No. 00-3489.

      Submitted on briefs July 31, 2001.

    Decided September 25, 2001.

    2001 WI App 244
    (Also reported in 635 N.W.2d 857.)

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Kelly & Ryberg, S.C. of Eau Claire.
    On behalf of the defendant-respondent, the cause was submitted on the brief of Joel L. Aberg of Weld, Riley, Prenn & Ricci, S.C., of Eau Claira
    Before Cane, C.J., Hoover, PJ., and Peterson, J.

       Petition to review denied 11-27-01.

   CANE, C.J.

¶ 1. Charles Kramer appeals from a judgment dismissing his claim for damages for breach of an employment contract. Kramer argues that the trial court (1) erroneously concluded that Kramer could not recover lost wages because he earned more at his higher-paying, subsequent employment during the contract period than he would have earned pursuant to his employment contract; and (2) erroneously granted to Kramer's former employer judgment notwithstanding the jury's verdict that awarded him $16,000 in consequential damages. We conclude that Kramer's damages must be reduced by the amount of wages, benefits and unemployment compensation that he received during the contract period. Because his compensation exceeds his damages, he is not entitled to payment from his former employer. Accordingly, we affirm the trial court on both issues.

Background

¶ 2. The pertinent facts are undisputed. Kramer was employed by the School District of the Menomonie Area from February 1994 until October 1997 under a series of written employment agreements. Kramer's last written employment agreement was for a two-year term, beginning July 1,1997 and ending June 30,1999. Before the end of the contract period, Kramer's position was eliminated and he was terminated. His last day of work was October 17, 1997.

¶ 3. Kramer was unemployed until January 5, 1998, when he was hired by the Rhinelander School District, where he remained until June 30, 1998. Since July 1, 1998, Kramer has worked for the Eau Claire School District. During the two-year period covered by Kramer's final contract with the Menomonie District, he received a total of $137,113 in wages, benefits and unemployment compensation — $46,391 more than he would have received if he had remained with the Menomonie District.

¶ 4. Kramer sued the district, alleging breach of his employment contract. He sought damages including: (1) $6,931 in lost wages for his period of unemployment; (2) $51,780 in lost wages and retirement benefits from being forced to terminate his weekend employment with the army reserves; (3) $3,500 in moving expenses; and (4) $1,500 in miscellaneous expenses.

¶ 5. The trial court granted summary judgment in Kramer's favor on the issue of liability, but concluded a trial was necessary to determine damages. Prior to trial, the court concluded that because Kramer's actual wages during the two-year contract period exceeded those he would have earned had he remained with the Menomonie District, he was barred from recovering lost wages for October 1997 through January 1998. However, the court concluded that any consequential damages resulting from the contract breach would not be reduced by the additional income that Kramer received from his new employment.

¶ 6. The jury awarded Kramer $14,600 for lost army reserve wages and retirement benefits and $1,400 for other incidental losses and expenses. Both parties filed post-trial motions. The district sought (1) judgment notwithstanding the verdict; (2) to change the jury's answers; and (3) a directed verdict and/or dismissal in the district's favor. Kramer sought an increase in the amount of damages awarded, pursuant to Wis. Stat. § 805.15(6) (1999-2000), or, alternatively, judgment pursuant to the verdict, together with costs and disbursements.

¶ 7. The trial court denied all motions except the district's motion for judgment notwithstanding the verdict, which the court granted, explaining that it was • reversing its earlier ruling that consequential damages cannot be reduced by Kramer's wages during the contract period. Accordingly, because the jury's $16,000 damage award, combined with the income Kramer would have received had he continued with the Meno-monie District, did not exceed his actual income during the two-year contract period, Kramer was not entitled to any damages. The court granted judgment notwithstanding the verdict and dismissed Kramer's claims with prejudice. This appeal followed.

Standard of Review

¶ 8. Whether Kramer's damages for breach of the employment contract must be reduced by the wages, benefits and unemployment compensation that he received during the two-year contract period presents a question of law we review de novo. See Handicapped Children's Educ. Bd. v. Lukaszewski, 112 Wis. 2d 197, 206-07, 332 N.W.2d 774 (1983) (implicitly applying de novo standard of review to determine type of damages available for breach of employment contract). The trial court's decision to grant judgment notwithstanding the verdict is also subject to our independent review. See Logterman v. Dawson, 190 Wis. 2d 90, 101, 526 N.W.2d 768 (Ct. App. 1994).

Discussion

¶ 9. At issue is whether Kramer's damages must be reduced by the amount of financial benefit he received by securing new, more lucrative employment during the contract period. Kramer argues that the practical effect of this reduction, which ultimately resulted in the payment of zero damages, is to penalize him for "over mitigating" his damages and reward his employer for egregious conduct. We reject his argument and affirm.

A. Principles governing damages for breach of an employment contract

¶ 10. Contract damages compensate the wronged party for damages that arise naturally from the breach. Hale v. Stoughton Hosp. Ass'n, 126 Wis. 2d 267, 277, 376 N.W.2d 89 (Ct. App. 1985). The damages are limited by the concept of foreseeability. Id. Recovery is limited to damages reasonably supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of a breach. Id. at 278.

¶ 11. In addition, a party may seek incidental and consequential damages for breach of contract. See Wis JI — Civil 3710 (Person damaged by breach of a contract can recover "all losses that are the natural and probable results of the breach."); Wis JI — Civil 3720 (damages include reasonable expenses incident to the contract breach).

¶ 12. Damages awarded to employees for breaches of employment contracts generally are "the salary the employee would have received during the unexpired term of the contract plus the expenses of securing other employment reduced by the income which he or she has earned, will earn, or could with reasonable diligence earn, during the unexpired term." See Wassenaar v. Panos, 111 Wis. 2d 518, 534, 331 N.W.2d 357 (1983). However, Wassenaar recognized that consequential damages also may be awarded:

In addition to the damages reflected in the black-letter formulation, an employee may suffer consequential damages, including permanent injury to professional reputation, loss of career development opportunities, and emotional stress. When calculating damages for wrongful discharge courts strictly apply the rules of foreseeability, mitigation, and- certainty and rarely award consequential damages.

Id. at 535.

¶ 13. The party alleging breach of the contract has a duty to mitigate damages, that is, "to use reasonable means under the circumstances to avoid or minimize the damages." See Kuhlman, Inc. v. G. Heileman Brew. Co., 83 Wis. 2d 749, 752, 266 N.W.2d 382 (1978); Wis JI—Civil 1731. An injured party cannot recover any item of damage that could have been, or was, avoided. See Kuhlman, 83 Wis. 2d at 752; State Bar of Wisconsin, Wisconsin Employment Law, § 4.20 (1999) (employer is entitled to a credit to the extent that the former employee obtained work and earned wages, or reasonably might have done so). It is well established that a party is not entitled to be placed in a better position because of a breach than he or she would have if the contract had been performed. See Hanz Trucking, Inc. v. Harris Bros., 29 Wis. 2d 254, 268, 138 N.W.2d 238 (1965).

¶ 14. Accordingly, courts have reduced damage awards to employees by the amount of wages earned at subsequent employment during the contract period, as well as by unemployment compensation payments. See Dehnart v. Waukesha Brewing Co., 21 Wis. 2d 583, 594-95, 124 N.W.2d 664 (1963) (plaintiffs may not recover full back pay as damages without deduction of the unemployment compensation benefits they received for the same period because to do so would place them in a better position than if the contract had not been breached).

B. Claim for wages and. benefits during period of unemployment

¶ 15. Kramer disagrees that these contract principles apply. He explains that his claim for wages and benefits is limited solely to his period of unemployment, so subsequent employment during the two-year contract period is irrelevant. Kramer relies on Smith v. Beloit Corp., 40 Wis. 2d 550, 162 N.W.2d 585 (1968), in support of his argument.

¶ 16. Smith involved similar, although not identical, facts. Smith did not have a written employment contract, although he had letters confirming his terms of employment. Id. at 553, 555. Smith's employment was terminated within three months of hiring. Id. at 554. Although he subsequently obtained other employment at a higher salary, he sued for breach of the employment contract. See id. at 559-60. The court affirmed a trial court finding that there was sufficient evidence of a one-year employment contract, and that Smith's discharge constituted a breach of the employment contract. Id. at 557-58.

¶ 17. The court then considered the proper measure of damages:

It seems to us that the proper measuring stick for damages is the actual wage loss and actual expenses of relocation incurred by plaintiff and established by the record.
The period of wage loss, actual and full, runs to the date on which he accepted successor employment, incidentally at a rate of compensation somewhat higher than paid him in the position from which he was discharged. There appears to us no dispute that the period of time that the plaintiff was out of work was three and two-thirds months. During this period of time he lost very nearly $2,600 in salary. We fix that as the wage loss incurred, and add to it his moving expenses to the successor job in Milwaukee of $120 and his earlier job searching expenses of $200, both figures being the amount testified to by the plaintiff at the trial. Adding these amounts together, limiting the right to recover damages to the items listed, we reduce the verdict to $2,920 and modify the judgment to set forth this amount as the amount to which plaintiff is entitled as damages.

Id. at 559-60.

¶ 18. Kramer argues that like Smith, his period of wage loss ran until the date he accepted successor employment and, therefore, he should be also able to recover damages for his period of unemployment without reducing those damages by his subsequent wages during the contract period. While we agree that Smith supports Kramer's argument, we disagree that Smith is controlling.

¶ 19. In Wassenaar, our supreme court recognized that the damage award in Smith was at odds with the general rule that requires courts to consider damages and mitigation over the entire contract period. See Wassenaar, 111 Wis. 2d at 534-35 n.18. Wassenaar limited Smith to its unique facts:

The measure of damages in Smith ... appears inconsistent with the general rule, since the period of wage loss up to the beginning of successor employment was used by the court to fix damages. No deduction was made for earnings for the remainder of the one-year employment period, even though plaintiffs subsequent earnings were noted as slightly higher than wages paid in the position from which he was discharged. However, the court substantially reduced the original jury verdict from $35,000 to $2,920; and no written contract existed fixing a definite term. These distinguishing facts may explain the measure of damages used in the case.

See Wassenaar, 111 Wis. 2d at 534-35 n.18.

¶ 20. Even if Wassenaar did not explicitly overrule Smith, it criticized and limited Smith. It is a long-standing rule that where supreme court decisions appear to be inconsistent, or in conflict, we follow the court's most recent pronouncement. See Krawczyk v. Bank of Sun Prairie, 203 Wis. 2d 556, 567, 553 N.W.2d 299 (Ct. App. 1996). Applying this rule, we conclude that the method of calculating damages stated in Was-senaar, rather than Smith, should control.

¶ 21. Pursuant to Wassenaar, Kramer is entitled to the salary he would have received during the unexpired term of the contract, plus the expenses of securing other employment, reduced by the income which he earned during the unexpired term. See Wassenaar, 111 Wis. 2d at 534. Because it is undisputed that Kramer's income during the remainder of the unexpired term exceeded his claim for lost wages and benefits during the unemployment period, the trial court correctly concluded that Kramer was not entitled to damages for lost wages and benefits.

C. Claim for consequential and incidental damages

¶ 22. The jury found that Kramer was entitled to consequential and incidental damages totaling $16,000. The district does not challenge that finding on appeal. Accordingly, the sole remaining issue is whether those consequential and incidental damages should be reduced by Kramer's other income, benefits and unemployment compensation during the contract period.

¶ 23. Like the parties, we were unable to identify a Wisconsin case directly on point, perhaps because consequential damages are so rarely awarded in breach of employment contract cases. In any event, we turn to Wassenaar, which appears to most directly address the issue.

¶ 24. Kramer argues that Wassenaar supports his position that consequential and incidental damages should not be reduced by other income he earned during the contract period. He notes that Wassenaar discussed consequential damages only after it first recited the black-letter law that the employee recovers "the salary the employee would have received during the unexpired term of the contract plus the expenses of securing other employment reduced by the income which he or she has earned, will earn, or could with reasonable diligence earn, during the unexpired term." See Wassenaar, 111 Wis. 2d at 534.

¶ 25. Kramer contends that Wassenaar'& failure to include consequential damages in its recitation of the black-letter law "clearly demonstrates that consequential damages are not reflected in the black-letter formation. They are separate and independent damages and are not included in an offset." We disagree.

¶ 26. Wassenaar explicitly recognized that consequential damages are rarely awarded. Consistent with this observation, Wassenaar did not include references to consequential damages in its general statement about the damages awarded to employees for breaches of employment contracts. However, Wassenaar did recognize that when calculating damages for wrongful discharge, courts strictly apply the rules of foreseeability, mitigation, and certainty to all damage claims, including claims for consequential damages. See id.

¶ 27. If we apply the rule of mitigation to Kramer's incidental and consequential damage claims, we are led to the inescapable conclusion that Kramer's damages must be reduced to the extent he has mitigated his damages by earning other income during the contract period. We are unpersuaded by the proposition that mitigation of one type of damage should be used to reduce only that same type of damage (e.g., wages lost can be reduced only by wages earned). Indeed, Dehnart reduced the employee's lost wages by the amount of unemployment compensation received. See Dehnart, 21 Wis. 2d at 595.

¶ 28. We recognize that it is uncommon for an employee to so successfully mitigate damages that the employee is entitled to no damages for breach of the employment contract. This is one such case. To award Kramer consequential and incidental damages without reducing those damages by his income during the contract period would be to put him in a better position because of the breach than he would have if the contract had been performed, which is contrary to the basic principles of contract law. See Hanz Trucking, 29 Wis. 2d at 268.

¶ 29. Accordingly, we agree with the trial court that the consequential and incidental damage award should be reduced by Kramer's income during the contract period. Because it is undisputed that the jury's $16,000 damage award, combined with the income Kramer would have received had he continued with the Memoninee District, did not exceed his actual income during the two-year contract period, Kramer was not entitled to any damages. Therefore, the trial court did not err when it granted judgment to the district notwithstanding the verdict.

By the Court. — Judgment affirmed.

OFFICIAL WISCONSIN REPORTS International Paper Co. v. Labor & Indus. Rev. Com'n, 248 Wis. 2d 348

       Because we affirm the trial court on the merits, we do not address the district's argument that Kramer waived the first issue.

       On appeal, Kramer alleges he is actually entitled to $12,628 for his period of unemployment, which includes both wages and benefits.

       Kramer also sought to recover for damage to his reputation and psychological trauma. However, these claims were dismissed before trial and are not at issue on appeal.

       Judge Thomas Barland presided over the beginning of this case, including the summary judgment hearing. Judge Lisa Stark was assigned the case shortly before trial.

       Neither party has appealed the trial court's denial of the other post-trial motions, except that Kramer seeks judgment on the verdict, as well as lost wages and benefits totaling $12,628.

       The district argues that Wassenaar v. Panos, 111 Wis. 2d 518, 331 N.W.2d 357 (1983), is inapplicable because it "relates only to 'wrongful discharge' actions and not to breach of contract claims." We interpret this argument to be an assertion that the term "wrongful discharge" refers only to actions alleging a violation of public policy, and that Wassenaar's use of the term renders the case inapplicable here. Without addressing whether the term "wrongful discharge" is appropriate for breach of employment contract actions not involving alleged violations of public policy, we conclude that Wassenaar's discussion of damages is applicable. At issue in Wassenaar was the breach of a written employment contract and whether the contract's stipulated damages clause would be enforced. See id. at 520. There was no allegation that the employee was terminated for reasons contrary to public policy. See id. at 520-21. Similarly, Kramer's action involves the breach of a written employment contract and he has not alleged that he was terminated for reasons contrary to public policy. Therefore, Wassenaar's damages analysis is applicable. We do not address whether our holding today would be equally applicable to cases where discharged employees, with or without written employment contracts, allege that their terminations were contrary to public policy.

       Commentators have also observed that consequential damages in a breach of employment contract case "are generally considered too speculative to have been within the parties' reasonable contemplation when the employment contract was made." See State Bar of Wisconsin, Wisconsin Employment Law § 4.18 (1999). Nonetheless, the jury in this case awarded consequential and incidental damages, and the district has not appealed the jury's determination. One of the issues this court must therefore address is whether and to what extent these damages must be reduced by Kramer's other wages, benefits and unemployment compensation during the contract period.

       The trial court arrived at this conclusion before trial and did not allow Kramer to present evidence of his claim for wages and benefits at trial. In the alternative, the court could have permitted Kramer to introduce evidence of his total damages, allowed the jury to determine the total damages and then reduced Kramer's total damage award by the amount of his other income, benefits and unemployment compensation. .


text:
    International Paper Company, Helmsman Management Service and Robert Wieseler, deceased, by Lorraine Wieseler, widow, Plaintiffs-Appellants, v. Labor and Industry Review Commission and Work Injury Supplemental Benefit Fund, Defendants-Respondents.
    Court of Appeals

      No. 01-0126.

      Submitted on briefs July 23, 2001.

    Decided September 25, 2001.

    2001 WI App 248
    (Also reported in 635 N.W.2d 823.)

      On behalf of the plaintiffs-appellants, there were joint briefs for International Paper Company and Helmsman Management Service, by Peter S. Nelson of Nesemann Law Office, S.C. and for Robert Wieseler, deceased, by Lorraine Wieseler, by Anthony W. Welhouse of Welhouse Law Office, both of Appleton.
    On behalf of the defendant-respondent, Work Injury Supplemental Benefit Fund, the cause was submitted on the brief of James E. Doyle, attorney general, and Stephen M. Sobota, assistant attorney general.
    On behalf of the defendant-respondent, Labor and Industry Review Commission, the cause was submitted on the brief of William W Cassel of Madison.
    Before Cane, C.J., Peterson and Dykman, JJ.
   CANE, C.J.

¶ 1. Lorraine Wieseler, Helmsman Management Service and International Paper Corn-pany appeal a circuit cour t order affirming a decision of the Labor and Industry Review Commission (LIRC) concluding that International Paper Company, rather than the Work Injury Supplemental Benefit Fund (the fund), is liable to pay Lorraine death benefits pursuant to Wis. Stat. § 102.46. Lorraine, whose husband, Robert Wieseler, died sixteen years after he suffered injury from exposure to asbestos, argues that because she filed her claim for death benefits under the Worker's Compensation Act more than twelve years after her husband's injury, the fund, rather than her husband's former employer, is liable to pay her benefits. See Wis. Stat. § 102.17(4). Because we conclude that LIRC's legal conclusions are reasonable, we affirm the circuit court order.

Background

¶ 2. The parties stipulated to the facts. Robert sustained malignant mesothelioma as a result of occupational exposure at International Paper Company. His date of injury was his last day of work: December 16, 1983.

¶ 3. Robert died on May 17, 1999. On June 3, Lorraine filed a claim for death benefits under Wis. Stat. § 102.46. It is undisputed that Lorraine will receive death benefits from either International Paper Company or the fund; at issue is which of the two is liable to pay the benefits.

¶ 4. The administrative law judge concluded that because Lorraine had not filed a claim for death benefits within twelve years of Robert's injury, the fund was responsible for the payments. LIRC reversed, concluding that the twelve-year statute of limitations for death benefit claims began to run when Robert died, rather than when he was injured. Thus, LIRC concluded, because Lorraine filed her claim for benefits within twelve years of Robert's death, International Paper was liable to make the payments. The circuit court affirmed, and this appeal followed.

Standard of Review

¶ 5. We review the decision of the administrative agency, not the circuit court. Michels Pipeline Constr. v. LIRC, 197 Wis. 2d 927, 930, 541 N.W.2d 241 (Ct. App. 1995). Whether International Paper or the fund is liable for the payment of death benefits presents a mixed question of fact and law. See id. at 931 (When the question on appeal is whether a statutory concept embraces a particular set of factual circumstances, the court is presented with mixed questions of fact and law.). Robert's dates of injury and death, and the date of Lorraine's application for death benefits, are questions of fact..LIRC's conclusion that the statute of limitations for death benefit applications began to run upon Robert's death presents a question of law.

¶ 6. LIRC's findings of fact are conclusive on appeal as long as they are supported by credible and substantial evidence. Id. LIRC's legal conclusions are subject to independent judicial review. Id. "However, the application of a statutory concept to a set of facts frequently also calls for a value judgment; and when the administrative agency's expertise is significant to the value judgment, the agency's decision is accorded some weight." Id.

¶ 7. The parties disagree on the level of deference we should afford LIRC's legal conclusions. Wieseler argues that LIRC's legal conclusions, and especially LIRC's conclusion that two Wisconsin Supreme Court cases are no longer applicable, should be afforded no deference. The fund and LIRC maintain that because LIRC is the agency charged with determining disputed compensation and has developed expertise in the area, its legal conclusions are entitled to great weight deference. They also note that LIRC and its predecessors "have vast experience in determining statute of limitations issues" under the Worker's Compensation Act.

¶ 8. Great weight deference to an agency's interpretation of a statute is appropriate when: (1) the agency is charged by the legislature with administering the statute; (2) the interpretation of the agency is one of long standing; (3) the agency employed its expertise or specialized knowledge in forming the interpretation; and (4) the agency's interpretation will provide uniformity in the application of the statute. CBS, Inc. v. LIRC, 219 Wis. 2d 564, 572, 579 N.W.2d 668 (1998).

¶ 9. In this case, neither party specifically addresses whether and to what extent these four factors have been established. Our general review of the case suggests that factors one, three and four are satisfied. Furthermore, it appears that LIRC considered as early as 1977 whether the statute of limitations for death benefits begins when the worker dies. Although neither party has specifically identified when LIRC adopted its current position, it appears from references in the LIRC record that LIRC's position as of at least the late 1980s has been that the statute of limitations begins to run when the worker dies. We conclude that LIRC's interpretation is sufficiently long standing to satisfy the second factor and that we should afford LIRC's legal conclusions great weight deference.

¶ 10. Under the "great weight deference" standard, we will affirm LIRC's legal conclusions unless they are unreasonable. See CBS, 219 Wis. 2d at 573. We will not substitute our judgment for LIRC's application of the law to the facts if a rational basis exists in law for LIRC's interpretation, and it does not conflict with controlling precedent. Klusendorf Chevrolet-Buick, Inc. v. LIRC, 110 Wis. 2d 328, 331-32, 328 N.W.2d 890 (Ct. App. 1982).

Discussion

¶ 11. At issue are several sections of the Worker's Compensation Act as they existed on the date of Robert's injury, December 16, 1983. See Wis. Stat. § 102.03(4) (with few exceptions, the right to compensation and the amount of the compensation shall in all cases be determined in accordance with the provisions of law in effect as of the date of the injury). Wisconsin Stat. § 102.46 provides the basis for Lorraine's claim for death benefits:

Where death proximately results from the injury and the deceased leaves a person wholly dependent upon him or her for support, the death benefit shall equal 4 times his or her average annual earnings, but when added to the disability indemnity paid and due at the time of death, shall not exceed two-thirds of weekly wage for the number of weeks set out in s. 102.44 (3).

¶ 12. Wisconsin Stat. § 102.17(4) establishes the statute of limitation:

The right of an employee, the employee's legal representative or dependent to proceed under this section shall not extend beyond 12 years from the date of the injury or death or from the date that compensation, other than treatment or burial expenses, was last paid, or would have been last payable if no advancement were made, whichever date is latest. In the case of occupational disease there shall be no statute of limitations, except that benefits or treatment expense becoming due after 12 years from the date of injury or death or last payment of compensation shall be paid from the work injury supplemental benefit fund under s. 102.65 and in the manner provided in s. 102.66.

It is undisputed that pursuant to this section, Lorraine can collect death benefits. Whether International Paper or the fund must pay the benefits depends on whether Lorraine's claim for death benefits needed to be filed within twelve years of Robert's injury, or within twelve years of his death.

¶ 13. LIRC concluded that a dependent has a period of twelve years from the date of the fatally injured employee's death to file a death benefit claim. Lorraine and International Paper argue that this conclusion conflicts with two Wisconsin Supreme Court decisions that denied dependents benefits and, therefore, should be reversed. See Klusendorf Chevrolet-Buick, 110 Wis. 2d at 331-32.

¶ 14. In Kohler Co. v. Industrial Comm'n, 224 Wis. 369, 371-72, 271 N.W. 383 (1937), the court denied a widow's application for benefits based on Wis. Stat. § 102.09(3)(a) (1929), which was later amended and renumbered as Wis. Stat. § 102.46 (1931). The statute provided that the death benefit available to dependents "shall not exceed the maximum amount which might have accrued to him for permanent total disability if death had not ensued." Kohler concluded that because the worker's claim for permanent total disability benefits was time-barred by Wis. Stat. § 102.12 (1929), the maximum amount that might have accrued to him was zero. See Kohler, 224 Wis. at 371-72. Accordingly, because awarding any sum of death benefits would exceed that amount, the widow's claim for benefits was denied. See id.

¶ 15. In Weissgerber v. Industrial Comm'n, 242 Wis. 181, 183, 7 N.W.2d 415 (1943), the court again denied a widow's application for death benefits, relying in part on Kohler's interpretation of the statute that became Wis. Stat. § 102.46. LIRC, in its decision here, discussed the applicability of both Kohler and Weissger-ber-.

Both Kohler and Weissgerber were decided based on the wording of statutes which were precursors to the current Wis. Stat. § 102.46. [] The wording of the precursor statutes differed significantly from the current Wis. Stat. § 102.46, in that they provided that a survivor's death benefit "shall not exceed the maximum amount which might have accrued to him (the deceased employe) for permanent total disability if death had not ensued." The Kohler court reasoned that since the employe's claim had become time-barred before he died, no amount "might have accrued... if death had not ensued." In other words, the applicant had to have had a viable compensation claim at the time of his death in order for any death claim to be possible. The Weissger-ber court, working with the same statutory language, adopted this reasoning and took it a step further. In Weissgerber, the applicant died before the statutory claiming period had expired, but the widow's application for death benefits was not filed until after that same statutory claiming period had expired. The court held that since the applicant's compensation claim would have been time-barred as of the date the widow filed her death benefit claim, the death benefit claim was precluded.
Thus, the Weissgerber and Kohler holdings were based on statutes which were interpreted as requiring that a viable compensation claim against the employer still be in existence at the time the widow makes her claim for death benefits. However, the current Wis. Stat. § 102.46 does not contain the "might have accrued ... if death had not ensued" language, upon which the Weissgerber and Kohler decisions were based. ...
[T]he current statute provides a survivor's death benefit which does not depend on whether the injured employe exercised his/her right to claim compensation while he/she lived, nor does it depend on whether the injured employe's right to claim compensation was still viable at the time the survivor claimed the death benefit. Given the straightforward, unambiguous language of the current Wis. Stat. 102.46, the dependent death benefit provided in that statute may be claimed as of the date of death of the deceased employe whose death proximately resulted from the work injury. Pursuant to the current Wis. Stat. 102.17(4), the dependent has a period of 12 years from the date of the fatally-injured employe's death to make his/her death benefit claim. Lorraine Wieseler therefore had 12 years from the date of Robert Wieseler's death to file her claim for a death benefit under Wis. Stat. 102.46. She filed the claim within three weeks of his death, and the claim is valid against International Paper Company. [] (Footnote omitted.)

¶ 16. We agree with LIRC's analysis that Kohler and Weissgerber are no longer controlling cases because the statute upon which they were based has been significantly amended. Furthermore, LIRC's conclusion that the statute of limitations for death benefits does not begin to run until the worker's death is reasonable and is consistent with the general rule that statutes of limitation begin to run at the time that the cause of action accrues. See Wisconsin Nat. Gas Co. v. Ford, Bacon & Davis Constr. Corp., 96 Wis. 2d 314, 323, 291 N.W.2d 825 (1980). Because we conclude that LIRC's legal conclusions are reasonable, we affirm the circuit court order.

By the Court. — Order affirmed.

       All references to the Wisconsin Statutes are to the 1983-84 version unless indicated otherwise. We note for the reader's information that the key statutes at issue, Wis. Stat. § 102.46 and § 102.17(4), subsequently have not been amended.

       Although Lorraine will receive death benefits regardless of whether the fund or International Paper pays them, she seeks to have the fund pay the benefits because she asserts that any benefits paid by the fund would not be reduced by settlements Robert reached with several asbestos manufacturers. See Wis. Stat. § 102.29.

       One authoritative source of information about Wisconsin's Worker's Compensation Act explained that LIRC addressed the issue as early as 1977:
      In the situation where a dependent of a deceased employee seeks to make a claim, there is some question of when the statute of limitation in section 102.17(4) begins to run. In an unpublished decision by the court of appeals and in several Dane County circuit court decisions, the statement "from the date of injury or death .. . whichever date is latest" has been construed to mean that the statute of limitations does not begin to run until the date of death.
      John D. Neal & Joseph Danas, Jr, WORKER'S Compensation Handbook, § 8.47 (4th ed. 2000).

       Laws of 1931, ch. 403, § 50.

       Wisconsin Stat. § 102.12 (1929) required the worker to provide his employer with notice when the worker knows or ought to know the nature of the worker's disability and its relation to the worker's employment.

       At issue in this case are the statutes as they existed in 1983, at the time of Robert's injury. See Wis. Stat. § 102.03(4). However, neither Wis. Stat. § 102.46 nor § 102.17(4) have been amended since that time. LIRC's reference to the "current" statute refers to § 102.46 as it existed in 1983 and today, as opposed to its wording at the time of Weissgerber v. Industrial Comm'n, 242 Wis. 181, 7 N.W.2d 415 (1943), and Kohler Co. v. Industrial Comm'n, 224 Wis. 369, 271 N.W. 383 (1937).

       LIRC also noted that because Robert executed third-party settlements with several asbestos manufacturers prior to his death, the provisions of Wis. Stat. § 102.29 may be applicable. Due to a lack of evidence in the record, LIRC remanded the matter to the Department of Industry, Labor & Human Relations for calculation of the amount of death benefits due in light of the potential application of § 102.29. It appears that Wieseler appealed to the circuit court before the remand, so upon exhaustion of the current appeal, the case will return to the department for calculation.


author: PETERSON, J.

text:
    State of Wisconsin, Plaintiff-Appellant, v. Lawrence A. Williams, Defendant-Respondent. [Case No. 01-0463-CR.] State of Wisconsin, Plaintiff-Appellant, v. Antwon C. Mathews, Defendant-Respondent. [Case No. 01-0464-CR.]
    Court of Appeals

      Nos. 01-0463-CR, 01-0464-CR.

      Submitted on briefs August 27, 2001.

    Decided September 25, 2001.

    2001 WI App 249
    (Also reported in 635 N.W.2d 869.)

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of James. E. Doyle, attorney general, and Stephen W. Kleinmaier, assistant attorney general.
    On behalf of the defendant-respondent, Lawrence A. Williams, the cause was submitted on the brief of Carl T. Bahnson, Altoona.
    On behalf of the defendant-respondent, Antwon C. Mathews, the cause was submitted on the brief of Peter J. Thompson, Eau Claire.
    Before Cane, C.J., Hoover, PJ., and Peterson, J.

       Petition to review granted 12-17-01.

   PETERSON, J.

¶ 1. The State appeals orders suppressing evidence derived from an automobile search. State trooper Jame s Fetherston stopped Lawrence Williams for speeding and, after issuing a warning ticket, questioned Williams and asked for permission to search the car. Williams consented. The issue is whether Williams was seized under the Fourth Amendment when he was questioned and consented to the search. The trial court held that Williams had been seized and, as a result, his consent to search was invalid. We agree and affirm.

BACKGROUND

¶ 2. At approximately 2:30 a.m. on June 7, 2000, Fetherston stopped a car driven by Williams on Interstate 94. Antwon Mathews was a passenger in the car. With his squad car's emergency lights on, Fetherston approached the driver's window and informed Williams that he had been stopped for speeding. In response to Fetherston's questions, Williams stated that he and Mathews were on their way to Chicago from St. Paul. Williams produced a valid driver's license and a rental agreement for the car.. He did not know who had rented the car, but Mathews stated that his uncle was the renter.

¶ 3. Fetherston told Williams to "sit tight." Fetherston returned to his squad car and called for back up, stating that he had "a Badger going." He then turned off his flashing emergency lights. Several minutes later, deputy John Staber arrived in his squad car with his emergency lights on.

¶ 4. Fetherston again approached the driver's door. Staber approached the passenger door and stood facing the passenger window with his hands on his belt. Fetherston told Williams to exit the car, and both he and Williams moved to the rear of the car. Staber stayed by the passenger side. Fetherston issued Williams a warning for speeding.

¶ 5. Fetherston returned Williams' license and the rental agreement and then shook hands with Williams. As the two shook hands, Fetherston stated, "We'll let you get on your way then. Take care. We'll see ya."

¶ 6. Williams and Fetherston turned to walk back to their respective vehicles. Fetherston, barely taking one step, swiveled back toward Williams and, in a civil but commanding tone, asked, "Hey Lawrence, there's no guns in the car is there?" Williams turned, walked back toward Fetherston, and stated, "No, sir." Fether-ston then asked, "Any knives?" Williams stated, "No, sir." Fetherston continued, "How about any drugs? You guys got any drugs in there?" Williams again said no. Fetherston asked, "Any large amounts of money? You guys not bringing back any big quantities of money?" Williams said no. Finally, Fetherston asked, "May I search your car just to be sure any of those items I mentioned are not in there?" Williams said, "Yes, sir." The questioning took fewer than fifteen seconds.

¶ 7. During the search, Fetherston found a gun and heroin. Both Williams and Mathews were arrested and charged with possession of heroin with intent to deliver and carrying a concealed weapon, contrary to Wis. Stat. §§ 961.41(1m)(d)3 and 941.23.

¶ 8. Williams and Mathews moved to suppress the evidence derived from the search of the car. The circuit court concluded that the basis for the traffic stop ended when Williams was issued the warning ticket. It further concluded that a reasonable person in Williams' position would have felt compelled to remain and respond to Fetherston's questions. As a result, Fetherston needed reasonable suspicion in order to detain Williams for the questioning. The court held that because Fether-ston did not have reasonable suspicion, Williams was illegally detained when he gave permission to search the car. The court granted the suppression motion.

STANDARD OF REVIEW

¶ 9. In reviewing a circuit court order concerning the suppression of evidence, we will uphold findings of fact unless they are clearly erroneous. State v. Richardson, 156 Wis. 2d 128, 137, 456 N.W.2d 830 (1990). However, whether the circuit court's findings of fact pass statutory or constitutional muster is a question of law that we review independently. Id. at 137-38.

DISCUSSION

¶ 10. The issue on appeal is whether Williams was seized at the time Fetherston asked him if he had guns, knives, drugs or large quantities of cash in the car. It is undisputed that the initial seizure of Williams ended when Fetherston returned Williams' license. It is also undisputed that Fetherston did not have reasonable suspicion justifying a seizure of Williams after the traffic stop had ended. In fact, the State concedes that if Williams was seized after the completion of the traffic stop, then Williams' consent to search the car was invalid. See State v. Bermudez, 221 Wis. 2d 338, 353-54, 585 N.W.2d 628 (Ct. App. 1998) (citations omitted).

¶ 11. However, the State argues that Williams was not seized when Fetherston began questioning him. According to the State, Williams' consent to search the car occurred as a result of a consensual encounter. Because the encounter was consensual, the State concludes the consent and subsequent search of the car were valid under the Fourth Amendment.

¶ 12. A consensual encounter occurs when "the person to whom questions are put remains free to disregard the questions and walk away...." United States v. Mendenhall, 446 U.S. 544, 553-54 (1980). A seizure under the Fourth Amendment occurs "when an officer, by means of physical force or a show of authority, restrains a person's liberty." State v. Harris, 206 Wis. 2d 243, 253, 557 N.W.2d 245 (1996) (citing Terry v. Ohio, 392 U.S. 1, 19 n.16 (1968)).

¶ 13. The totality of the circumstances must be considered to determine whether the police conveyed a message to a citizen that compliance with police questioning was required. See Florida v. Bostick, 501 U.S. 429, 437 (1991). "[T]he crucial test is whether, taking into account all of the circumstances surrounding the encounter, the police conduct would 'have communicated to a reasonable person that he was not at liberty to ignore the police presence and go about his business.' " Id. (citation omitted). Examples of circumstances that might indicate a seizure would be the threatening presence of several officers, the display of a weapon by an officer, or the use of language or tone of voice indicating that compliance with the officer's request might be compelled. Mendenhall, 446 U.S. at 554.

¶ 14. We conclude that the trial court properly found that a reasonable person in Williams' position would have believed that he or she was not free to ignore Fetherston's questioning and to leave. Admittedly, Fetherston told Williams after issuing the warning, "We'll let you get on your way then." However, almost without missing a beat, this was followed by assertive questioning, nearly in the nature of an accusation: "Hey Lawrence, there's no guns in the car is there?" Under the circumstances, the question suggested that a reply was required.

¶ 15. In addition to the form of the question, Fetherston changed his tone of voice. His tone became abrupt and distinct from the friendlier tone that he used previously. He also spoke in a slightly higher volume. When Williams turned to deny the question, he was again face-to-face with Fetherston. In fewer than fifteen seconds, Fetherston asked Williams six questions, ending with, "May I search your car. '. . ."

¶ 16. Also, during the questioning, deputy Staber's emergency lights were flashing. Moreover, while Staber had backed away from the car when Fetherston returned Williams' license, Staber resumed his position just outside of and facing the passenger window when the questioning started. At all times Staber's hands were on his belt near his weapon.

¶ 17. The questioning occurred after 2:30 in the morning on the shoulder of a rural interstate highway. Williams was standing outside his vehicle, facing the flashing emergency lights. These are not the kind of circumstances in which a citizen would feel free to ignore a police officer's questions.

¶ 18. Finally, we note that the questioning started almost immediately after the warning ticket was issued. The State would have us conclude that a reasonable person should be able to tell that the legal detention was concluded and that he or she was now free to disregard the trooper's questions. We disagree. A reasonable person would not have detected the nearly seamless transition from the conclusion of the traffic stop to the questioning.

¶ 19. Our holding is not based on any one factor. We are persuaded by the totality of the circumstances: time of night; isolated and rural location; standing outside of the vehicle; flashing emergency lights; initial detention; questions starting almost immediately after the initial detention; tone, volume and nature of the questions; and presence and stance of the second law enforcement officer. All of these factors lead us to conclude that a reasonable person under the circumstances would not have felt free to disregard the questions and walk away.

¶ 20. The State concedes that if Williams was seized, his consent to search was invalid and the evidence should have been suppressed. Because we hold that Williams was seized, we therefore conclude that the circuit court properly granted the suppression motion.

By the Court. — Orders affirmed.

       We have viewed Exhibit 3, which is a videotape of the traffic stop recorded from a camera in Fetherston's squad car.

       Fetherston testified at the suppression hearing that "Badger stop" was a term no longer used by the state patrol, but which denotes an interdiction stop where the trooper attempts to obtain the driver's consent to search the car for possible criminal activity.


author: BROWN, J.

text:
    State of Wisconsin, Plaintiff-Appellant, v. Deborah J. Zimmerman, Defendant-Respondent.
    Court of Appeals

      No. 00-3173-CR.

      Submitted on briefs August 24, 2001.

      Decided September 26, 2001.

    2001 WI App 238
    (Also reported in 635 N.W.2d 864.)

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Lara M. Herman, assistant attorney general, and James E. Doyle, attorney general.

      On behalf of the defendant-respondent, the cause was submitted on the brief of Charles Bennett Vetzner, assistant state public defender.
    Before Nettesheim, EJ., Brown and Anderson, JJ.
   BROWN, J.

¶ 1. The State appeals from a judgment granting Deborah J. Zimmerman's motion to dismiss for failure to state probable cause in a complaint charging her with felony escape. Because we conclude that Zimmerman was not in actual custody for purposes of the escape statute set forth in Wis. Stat. § 946.42 (1999-2000), we affirm the judgment of the trial court.

¶ 2. The facts of this case are undisputed. On September 26, 2000, agents of the Wisconsin Department of Corrections were transporting Zimmerman to jail after having taken her into custody for a violation of the terms of her release. At one point, she informed the agents she felt ill. When they stopped the vehicle to let her out, she fled. Officers of the Racine County Sheriffs Department assisted the agents in the search for Zimmerman after her escape. The officers eventually located her at her residence and took her into custody, charging her with escape.

¶ 3. At a preliminary hearing, Zimmerman moved to dismiss, arguing that under Wis. Stat. § 946.42(1)(a), a probationer or parolee can be charged with escape only when he or she is in actual custody, defined as custody of an institution, peace officer, or an institution guard, but not including custody of a probation or parole agent. The State responded that Zimmerman was legally taken into custody pursuant to Wis. Admin. Code § DOC 328.22 and that she was therefore in actual custody of the agents at the time she fled. The trial court found that there are specific definitions of custody in the escape statute, and the statute does not specifically include being in the custody of a probation or parole agent as part of those definitions. The trial court then determined that Zimmerman was not in actual custody until she was taken into custody by law enforcement officers at her home. The court concluded that Zimmerman could not be charged with felony escape, and granted her motion to dismiss the complaint.

¶ 4. The State's appeal requires us to construe Wis. Stat. § 946.42(1)(a). We review questions of statutory interpretation de novo. Truttschel v. Martin, 208 Wis. 2d 361, 364-65, 560 N.W.2d 315 (Ct. App. 1997).

¶ 5. To be guilty of escape, Zimmerman must be found to he in custody. Wis JI—Criminal 1773. The relevant language of the escape statute defines custody to include "without limitation actual custody of an institution ... or of a peace officer or institution guard and constructive custody of prisoners . . . temporarily outside the institution. . . ." Wis. Stat. § 946.42(1)(a). The statute also contains an exception: "It does not include the custody of a probationer [or] parolee .. . unless the person is in actual custody or is subject to a confinement order under s. 973.09(4)." Sec. 946.42(1)(a).

¶ 6. The threshold question when construing a statute is whether the statutory language is ambiguous. State v. Williquette, 129 Wis. 2d 239, 248, 385 N.W.2d 145 (1986). Statutory language is deemed ambiguous if reasonable persons could disagree about its meaning. Id. If the language is unambiguous, the court simply applies the ordinary and accepted meaning of the language to the facts presented. State v. Kittilstad, 231 Wis. 2d 245, 256, 603 N.W.2d 732 (1999). Nontechnical words utilized in the statute must be given their ordinary and accepted meaning when not specifically defined. Williquette, 129 Wis. 2d at 248. The legislative history of a statute may be used as further support for the conclusion that the statute is unambiguous. State v. Timmerman, 198 Wis. 2d 309, 321 n.3, 542 N.W.2d 221 (Ct. App. 1995).

¶ 7. The State argues that "actual custody" unambiguously includes probationers and parolees who are in the physical custody of probation and parole agents. The plain language of the first sentence of Wis. Stat. § 946.42(1)(a), which specifically defines "actual custody," belies this contention: " 'Custody' includes without limitation actual custody of an institution . . . or of a peace officer or institution guard. . . ." As our supreme court has previously observed, the legislature has chosen to restrict "custody" by definition, rather than import the usage of its general meaning. State v. Schaller, 70 Wis. 2d 107, 110, 233 N.W.2d 416 (1975). We must give effect to legally defined terms. Id.

¶ 8. Thus, this language unambiguously articulates categories of custodians whose control over parolees and probationers constitutes actual custody, namely: an institution, peace officer or guard. None of the categories includes probation or parole agents. This has been the implicit understanding of the escape statute in prior case law. See State v. Cobb, 135 Wis. 2d 181, 185, 400 N.W.2d 9 (Ct. App. 1986) (custody depends upon physical detention by an institution, institution guard or peace officer); State v. Scott, 191 Wis. 2d 146, 152-53, 528 N.W.2d 46 (Ct. App. 1995) (convicted defendant who fled courtroom was held to be in custody of sheriff and chargeable with crime of escape). The State presents us with no case which has held that a person escaped actual custody from a person or entity other than an institution, peace officer or institution guard.

¶ 9. The focal point of the State's argument is the exception in Wis. Stat. § 946.42(1)(a), stating in relevant part that custody does not include the custody of probationers or parolees by the department of corrections or probation or parole officers "unless the person is in actual custody." We do not agree that this language supports the State's position. The sentence simply states that parolees and probationers cannot be charged with escape unless the person leaves actual custody. The language neither clarifies nor expands the categories of custodians whose control over parolees and probationers constitutes actual custody.

¶ 10. Nevertheless, the State posits that the legislative history of this exception evinces the legislature's intent to include all categories of actual custody of probationers and parolees at the time Zimmerman was charged with escape. See Timmerman, 198 Wis. 2d at 321 n.3 (legislative history may be used to show statute is unambiguous). Prior to 1987, the escape statute's definition of custody included the following language:

["Custody"] does not include the custody of a probationer or parolee by the department of health and social services or a probation or parole officer ... unless the person is in actual custody after revocation of probation, parole ... or to enforce discipline or to prevent the person from absconding.

Wis. Stat. § 946.42(5)(a) (1985-86). This language limited application of the escape statute to probationers or parolees who were in actual custody under three circumstances: actual custody after revocation, actual custody to enforce discipline, or actual custody to prevent him or her from absconding. This language was removed when the statute was amended by 1987 Wis. Act 238, § 7 so that the exception then provided:

["Custody"] does not include the custody of a probationer or parolee by the department of health and social services or a probation or parole officer ... unless the person is in actual custody.

Wis. Stat. § 946.42(1)(a) (1987-88). The Legislative Reference Bureau's analysis of the bill creating this amendment provides that !'[t]he bill also revises the current definition of 'custody' under the escape law to cover all probationers and parolees who are in actual custody, regardless of the reason they are being held in actual custody."

¶ 11. We do not agree with the State that the change in the law in 1987 manifests legislative intent to remove any limitation on the categories of custodians whose control over probationers and parolees may be deemed to be actual custody. It simply allows for escape to be charged against such a person in actual custody, regardless of the reason he or she is in custody. We concur with Zimmerman that under the former version of the statute, it is doubtful whether a parolee or probationer who was being held in a county jail pending a revocation hearing could be charged with escape for fleeing the jail. The revised statute would eliminate any uncertainty in that regard, clearly allowing a prosecution to be brought. Significantly, and more to the point, neither the former version of the law nor the present one specifies that actual custody includes being in the physical control of a parole or probation agent.

¶ 12. We conclude, therefore, the definition of actual custody under the escape statute unambiguously excludes the custody of a probation or parole agent. The State contends that this interpretation of the escape statute leads to an unreasonable result: a probationer or parolee who is taken into custody pursuant to Wis. Admin. Code § DOC 328.22 by probation or parole agents cannot be charged with escape, but a probationer or parolee who is taken into custody under the same code provision by law enforcement officers can face an escape charge for the exact same act. We do not find this discrepancy to be unreasonable. Peace officers are vested by law with a duty to maintain public order or to make arrests for crimes. Wis. Stat. § 939.22(22). Institution guards essentially have a similar role within the particular environment of prisons and other institutions. Parole and probation agents, on the other hand, establish rules of supervision and assist in providing services to their clients. See generally Wis. Admin. Code § DOC 328.04(2). Unlike peace officers and prison guards, they are charged with "[reporting all violations of the criminal law by clients to a supervisor or appropriate law enforcement authority." Id. at § DOC 328.04(2)(w). It is not unreasonable that the consequences of elopement from a peace officer would be more severe than in the case of elopement from a probation or parole agent.

¶ 13. Furthermore, the legislature has not seen fit to remedy this discrepancy in any of the recent amendments to the escape statute. In 1995, for example, the legislature added the following italicized language:

["Custody"] does not include the custody of a probationer or parolee by the department of corrections or a probation or parole officer... unless the person is in actual custody or is subject to a confinement order under s. 973.09(4).

1995 Wis. Act 154, § 1 (emphasis added.) An analysis of the bill creating the amendment by the Legislative Reference Bureau is quoted in State v. Rosenburg, 208 Wis. 2d 191, 199, 560 N.W.2d 266 (1997):

Current law provides penalties for persons who escape from custody. The prohibitions apply to a person on probation only when the person is in actual custody, such as in custody in a jail. This bill makes a probationer subject to the escape law at all times when he or she is subject to an order of confinement as a condition of probation.

Clearly, the legislature here had an opportunity to expand the concept of actual custody but did not. It retained our current understanding of actual custody to be custody of an institution, peace officer or guard, and added the provision for cases of probationers under confinement. We determine that had the legislature wanted to include probation or parole agents in the definition of "actual custody," it would have done so.

¶ 14. We conclude that the escape statute unambiguously excludes from the definition of "actual custody" the physical custody of probation and parole officers. Therefore, because Zimmerman was in the hands of probation or parole agents at the time she fled, she is not chargeable with felony escape.

By the Court. — Judgment affirmed.

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

       It is unclear from the record what type of release Zimmerman was on — parole or probation — at the time she was taken into custody. Throughout the transcript of the hearing on Zimmerman's motion to dismiss, "parole agent" and "probation agent" are used interchangeably when referring to the agents who picked her up to transport her to jail, making it somewhat confusing as to her status as a probationer or parolee. For purposes of this appeal, it is irrelevant whether she was a parolee or probationer at the time of the escape because such persons are treated the same under the escape statute and the applicable administrative code provisions.

       We are also cognizant that the inherent structure of the probation system is to allow for flexibility in dealing with clients. Agents are directed to treat each client on an individualized basis, applying appropriate rewards and sanctions based on the client's conduct. See note to Wis. Admin. Code § DOC 328.04. If a probationer or parolee fails to comply with the conditions of his or her supervision, the result may be modification of the rules of supervision, extension or revocation. Id. at § DOC 328.04(5). Our holding encourages the flexibility of the revocation process where the department may consider mitigating circumstances in an elopement and impose appropriate sanctions.