author: SHIRLEY S. ABRAHAMSON, C.J.

text:
    Mary E. Fazio, Plaintiff-Respondent-Petitioner, v. Department of Employee Trust Funds, Defendant-Appellant.
    Supreme Court

      No. 2004AP64.

      Oral argument November 16, 2005.

      Decided January 26, 2006.

    2006 WI 7
    (Also reported in 708 N.W.2d 326.)

      For the plaintiff-respondent-petitioner there were briefs and oral argument by Robert L. Elliott, Milwaukee.
    For the defendant-appellant the cause was argued by L. Jane Hamblen, assistant attorney general, with whom on the brief was Peggy A. Lautenschlager, attorney general.
   SHIRLEY S. ABRAHAMSON, C.J.

¶ 1. This is a review of a published decision of the court of appeals. The court of appeals reversed the order of the circuit court for Dane County, Patrick J. Fiedler, Judge, granting summary judgment in favor of Mary Fazio, individually and on behalf of other beneficiaries of deceased participants of the Wisconsin Retirement Fund, against the Department of Employee Trust Funds.

¶ 2. The circuit court concluded that the Department of Employee Trust Funds had taken property for public use without just compensation in violation of Article I, Section 13 of the Wisconsin Constitution by failing to include interest or earnings accrued from the date of the participant's death until payments were made to the beneficiary under Wis. Stat. § 40.73(l)(c) (2003-04).

¶ 3. The court of appeals reversed the order of the circuit court, holding that there was no taking because Fazio did not acquire a property interest in a single cash sum death benefit under Wis. Stat. § 40.73(1)(c) until she applied for a death benefit as required by § 40.71(3). We granted Fazio's petition for review.

¶ 4. The court of appeals set forth the relevant facts, and the parties do not dispute them. The essential facts are as follows: Fazio is the widow of Anthony Fazio. Anthony Fazio was a Wisconsin Retirement System (WRS) participant and was actively employed as a professor at the University of Wisconsin-Milwaukee upon his death on January 2, 1999. Fazio did not file for the death benefits until November 2000. On December 1, 2000, a $507,395.35 death benefit was paid to Fazio. This amount was calculated under Wis. Stat. § 40.73(l)(c) based on the amount in Anthony Fazio's account as of January 3, 1999, one day after his death, as provided for by § 40.73(l)(c). Between January 3, 1999 and December 1, 2000, the death benefit was held in the fixed retirement investment trust account and, although interest was earned on the funds in the account, the Department paid no interest on the death benefit when it was paid to Fazio on December 1, 2000.

¶ 5. Fazio then filed suit in the circuit court, demanding that the interest be paid. The circuit court dismissed the original complaint on the ground that Fazio had failed to exhaust her administrative remedies. She appealed and the court of appeals determined that Fazio was not required to seek relief with the Department and directed the circuit court to reinstate her complaint.

¶ 6. On January 27, 2003, the circuit court certified the matter as a class action. The class was defined as "all persons having an interest as a beneficiary in a single cash sum death benefit paid or payable out of the funds of the Employe Trust Funds pursuant to Section 40.73(l)(c) Stats., from and after January 11, 1995." Fazio was designated class representative and her counsel, class counsel. The order granting partial summary judgment issued on July 30, 2003 and the order for judgment granting damages issued on November 24, 2003.

¶ 7. Fazio argues that because the department earned interest on her death benefit until the time she applied for the benefit and then distributed the benefit but kept the interest for its own purposes, an unconstitutional taking occurred. The parties agree that the statutes neither explicitly allow nor explicitly disallow the payment of interest to a beneficiary under these circumstances.

¶ 8. We agree with the court of appeals that no unconstitutional taking occurred because a beneficiary does not acquire a property interest in a single cash sum death benefit under Wis. Stat. § 40.73(l)(c) until the beneficiary applies for a death benefit as required by Wis. Stat. § 40.71(3).

¶ 9. For the reasons set forth by the court of appeals we conclude that nothing in Wis. Stat. § 40.73 creates an entitlement in the beneficiary to the annuity-value single cash sum benefit as of the date of death even though the value of the single cash sum benefit is calculated as of the date of death. Until the Department received Fazio's written application, the Department could not determine the annuity-value single cash sum to which Fazio might be entitled because Fazio was entitled to the higher single cash sum payment calculated under either Wis. Stat. § 40.73(1) (am) or § 40.73(l)(c). The amount payable to Fazio under paragraph (am) (account-value death benefits) continued to increase each month after death by the addition of interest credited to the account through "the first day of the month in which the death benefit is approved." Wis. Stat. § 40.73(l)(am).

¶ 10. Fazio was thus entitled to the larger sum as determined by the account-value death benefits calculated with interest from death through the first day of the month in which the death benefit is approved and the annuity value as of the date of death. Accordingly, the total amount the beneficiary receives will always be at least as much as the account value at the participant's death plus the interest credited to the account through the first day of the month in which the death benefit is approved.

¶ 11. We are not persuaded by Fazio's arguments to reverse the decision of the court of appeals. First, Fazio argues that Wis. Stat. § 40.71 grants her an entitlement to a death benefit at the time of the participant's death. Wisconsin Stat. § 40.71 states, in relevant parts:

40.71 Death benefit eligibility. The following described persons are entitled to death benefits from the Wisconsin retirement system, in the form and at the times specified:
(1) The beneficiary of any participant or of any annuitant on the date of death of the participant or annuitant. ...
(2) Any death benefit may be paid as a beneficiary annuity, subject to s. 40.73 (3), or as a single cash sum as specified by the beneficiary in the application for the death benefit unless the participant prohibited payment of a single cash sum in a written notice received by the department prior to the participant's death. . ..
(3) Whenever any death benefit is payable in a single cash sum, it shall be paid only after receipt by the department of the following:
(a) A copy of the death certificate of the participant or annuitant;
(b) A written application of the beneficiary for the benefit; and
(c) Any additional evidence deemed necessary or desirable by the department.

¶ 12. Fazio reads Wis. Stat. § 40.71 to mean that a beneficiary is entitled to the death benefits from the Wisconsin retirement system on the date of the death of the participant. We conclude, as did the court of appeals, that a beneficiary is not entitled to — that is, a beneficiary does not have a property right in — a single cash sum payment of death benefits until he or she has filed the proper application as required by § 40.71(3). The introductory language of § 40.71 applies to all three subsections. Subsection (1) of § 40.71 identifies the persons who are entitled to death benefits, subsection (2) spells out the form in which a beneficiary receives the benefit, and subsection (3) identifies the time at which the beneficiary is entitled to those benefits.

¶ 13. Second, Fazio argues that the Department's interpretation of the statutes contravenes the stated legislative purpose of protecting public employees and their beneficiaries. However, our decision does not interfere with this purpose. Beneficiaries receive the full value of the deceased participant's retirement fund. Because § 40.73(l)(c) provides that the benefit under that section is paid only if it is greater than the benefit provided by § 40.73(l)(am), the total amount the beneficiary receives will always be at least as much as the account value at the participant's death plus the interest earned prior to application.

¶ 14. Third, Fazio contends that if the beneficiary does not have a property interest between the time of death and the time the beneficiary applies for the death benefit, a gap exists in the ownership interest of the death benefit and the Department may use the interest earned on Fazio's death benefit for its own purposes.

¶ 15. WRS participants have property rights in the fund as a whole, Wis. Stat. § 40.04(3)(b), and no vacuum in ownership exists. Furthermore, the Department is obligated to use the money only for the benefit of the fund consistent with the purposes set forth in § 40.01(2).

¶ 16. Fourth, Fazio contends that Wis. Stat. § 40.02(8), the statute that defines "beneficiary" for the purpose of ch. 40, supports the argument that she has an entitlement to the death benefit at the time of her husband's death. We agree with the court of appeals that this interpretation contradicts the language of the statute. By not allowing the benefit to pass through the beneficiary prior to filing the application, § 40.02(8) (b) supports the conclusion that a beneficiary is not entitled to the death benefit until the application is filed pursuant to § 40.71(3). As the Department argues, if the named beneficiary had a property interest prior to submitting the beneficiary designation or the application, it would pass to her heirs, not the participant's heirs, upon her death.

¶ 17. Fifth, Fazio argues that Wis. Stat. § 40.19 creates a contract between the Department and the participant requiring the Department to pay the designated beneficiary. As the court of appeals explained, the provisions of ch. 40 constitute the contractual agreement between a participant and the Department. Thus, concluding that § 40.19 creates a contract does not answer the question of when a beneficiary is entitled to a death benefit.

¶ 18. Sixth and finally, relying on Wisconsin Professional Police Ass'n, Inc. v. Lightbourn, 2001 WI 59, 243 Wis. 2d 512, 627 N.W.2d 807, and Wisconsin Retired Teachers Ass'n, Inc. v. Employe Trust Funds Board, 207 Wis. 2d 1, 558 N.W.2d 83 (1997), Fazio claims that beneficiaries of participants have a protected property right in the WRS funds. However, as the court of appeals explained, Lightbourn and Wisconsin Retired Teachers Ass'n address whether participants have a property right. Neither this court nor the court of appeals has held that beneficiaries have a property right in the fund itself.

¶ 19. We agree with the court of appeals' discussion of the legal principles applicable to the present case and do not repeat that discussion here. Rather, we adopt ¶¶ 3-18 of the opinion of the court of appeals, 2005 WI App 87, 280 Wis. 2d 837, 696 N.W.2d 563, as the opinion of this court. Accordingly we affirm the decision of the court of appeals.

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

        Fazio v. Dep't of Employee Trust Funds, 2005 WI App 87, 280 Wis. 2d 837, 696 N.W.2d 563.

       We refer to the class and Fazio collectively as "Fazio" and treat the facts of Fazio's case as illustrative of the facts of the other members of the class.

       Article I, Section 13 states: "The property of no person shall be taken for public use without just compensation therefor."

       All references to the Wisconsin Statutes are to the 2003-2004 version unless otherwise noted.

       While some facts in this matter may be disputed, the material facts related to the distribution of death benefits to Fazio are subject to a May 15, 2005 stipulation by the parties.

       The benefit was paid under § 40.73(l)(c) because that amount was greater than the standard benefit payment provided for by Wis. Stat. § 40.73(l)(am).

        Fazio v. Dep't of Employee Trust Funds, 2002 WI App 127, ¶ 1, 255 Wis. 2d 801, 645 N.W.2d 618.

        See Wis. Stat. § 40.01(1):
      (1) Creation. A "public employee trust fund" is created to aid public employees in protecting themselves and their beneficiaries against the financial hardships of old age, disability, death, illness and accident, thereby promoting economy and efficiency in public service by facilitating the attraction and retention of competent employees, by enhancing employee morale, by providing for the orderly and humane departure from service of employees no longer able to perform their duties effectively, by establishing equitable benefit standards throughout public employment, by achieving administrative expense savings and by facilitating transfer of personnel between public employers.

        See, e.g., State Teachers' Ret. Bd. v. Giessel, 12 Wis. 2d 5, 10, 106 N.W.2d 301 (1960) (under predecessor to ch. 40, "the legislature and the plaintiff board are not free to spend or appropriate the earnings of the fund except in a manner authorized by statute relating to the state teachers' retirement system.").

       Wisconsin Stat. § 40.02(8)(b) provides:
      "Beneficiary" does not include a person who dies before filing with the department either a beneficiary designation applicable to that death benefit or an application for any death benefit payable to the person.... If a person dies after filing a beneficiary application but before the date on which the benefit check... is issued... any benefit payable shall be paid in accord with the written designation of [the] beneficiary, if any, filed with the department in connection with the application or, if none, in accord with the last designation previously filed by the person, or otherwise to the person's estate.

       Wisconsin Stat. § 40.19 provides in relevant part:
      (1) Rights exercised and benefits accrued to an employee under this chapter for service rendered shall be due as a contractual right and shall not be abrogated by any subsequent legislative act.

        See Wis. Retired Teachers Ass'n, Inc. v. Employee Trust Funds Bd., 207 Wis. 2d 1, 19, 558 N.W.2d 83 (1997) (under ch. 40, "WRS annuitants have a contract right to have dividends distributed consistent with s. 40.27(2)"); Giessel, 12 Wis. 2d at 9-10 (under predecessor to ch. 40, "the teachers have a contractual relationship with the state and a vested right in the state teachers' retirement system").


source: Caselaw Access Project

author: PER CURIAM.

license: Public Domain

text:
    In the Matter of Disciplinary Proceedings Against Thomas E. Zablocki, Attorney at Law: Board of Attorneys Professional Responsibility n/k/a Office of Lawyer Regulation, Complainant, v. Thomas E. Zablocki, Respondent.
    Supreme Court

      No. 1996AP3700-D.

    Decided January 27, 2006.

    2006 WI 8
    (Also reported in 708 N.W.2d 330.)
   PER CURIAM.

¶ 1. We review the recommendation of the referee that Thomas E. Zablocki's license to practice law in Wisconsin be reinstated upon satisfaction of certain conditions. Having ascertained that the conditions recommended by the referee have been satisfied, we adopt the referee's findings of fact and conclusions of law and agree with his recommendation to reinstate Attorney Zablocki's license to practice law. In addition, we find it appropriate that Attorney Zablocki pay the costs of the reinstatement proceeding, which are $5137.85 as of August 4, 2005.

¶ 2. Attorney Zablocki was admitted to the practice of law in Wisconsin in 1968. In 1995 he consented to a private reprimand from the former Board of Attorneys Professional Responsibility (Board). On June 24, 1998, this court suspended Attorney Zablocki's license to practice law in Wisconsin for six months, effective August 10, 1998, for various disciplinary violations, including failure to maintain a client trust account, depositing client funds into personal checking accounts, diverting client funds for his own purposes, and failing to cooperate with the Board's investigation. See In re Disciplinary Proceedings Against Zablocki, 219 Wis. 2d 313, 579 N.W.2d 233 (1998). There were significant aggravating factors associated with this suspension.

¶ 3. Subsequently, while under suspension, Attorney Zablocki received a public reprimand for misconduct committed in the course of his representation of a couple involved in a divorce proceeding, where he violated various disciplinary rules by representing one of the parties in a bankruptcy case while simultaneously representing the other in the divorce proceeding. He also failed to notify either party, or the courts, of his then imminent suspension, failed to refund the portion of the advance fee payment for the bankruptcy that he had not fully earned, and failed to keep complete records of trust account funds. See In re Disciplinary Proceedings Against Zablocki, 2005 WI 115, 247 Wis. 2d 994, 635 N.W.2d 288.

¶ 4. Attorney Zablocki petitioned for reinstatement of his license to practice law on August 27, 2004. Following a hearing in February 2005 the referee submitted a report and recommendation, conditionally recommending reinstatement. The Office of Lawyer Regulation (OLR) opposed the petition, although no appeal was filed.

¶ 5. SCR 22.31(1) provides the standard to be met for reinstatement of a law license. Specifically, the referee noted, that the petitioner must meet his or her burden of demonstrating "by clear, satisfactory and convincing evidence" that he or she has the moral character to practice law, that his or her resumption of the practice of law will not be detrimental to the administration of justice or subversive of the public interest, and that he or she has complied with SCR 22.26 and the terms of the suspension. In addition to these requirements, SCR 22.29(4) sets forth related requirements that a petition for reinstatement must show. All of these additional requirements are effectively incorporated into SCR 22.31(1).

¶ 6. The referee concluded that Attorney Zablocki had met nearly all of the criteria for reinstatement and concluded that he had met his burden of demonstrating that his license to practice law in Wisconsin should be reinstated. At the time the report and recommendation was filed, Attorney Zablocki averred that he had satisfied the continuing legal educational (CLE) requirements necessary for reinstatement, but had not yet obtained a certification from the Board of Bar Examiners (BBE) demonstrating satisfaction of this requirement. In addition, Attorney Zablocki had not yet paid the costs relating to his previous public reprimand.

¶ 7. The referee thus recommended Attorney Zablocki's reinstatement be contingent upon receipt of a certification from the BBE indicating that Attorney Zablocki had completed his CLE requirements and evidence that he had entered into a payment plan with the OLR.

¶ 8. By order dated October 21, 2005, the court directed Attorney Zablocki to provide evidence that he had satisfied these conditions within 30 days, or face dismissal of his petition. Attorney Zablocki filed a timely response demonstrating that he has paid the outstanding OLR costs in the amount of $6935.65.

¶ 9. The court also received a letter from the BBE indicating that Attorney Zablocki has satisfied the requisite CLE requirements and recommending his reinstatement.

¶ 10. After a review of the record we conclude that Thomas E. Zablocki has established by clear, satisfactory and convincing evidence that he has now satisfied all the criteria necessary for reinstatement. Accordingly, we adopt the referee's findings of fact and conclusions of law and we agree with the referee's recommendation to reinstate Attorney Zablocki's license to practice law in Wisconsin.

¶ 11. IT IS ORDERED that the petition for reinstatement of the license of Thomas E. Zablocki to practice law in Wisconsin is granted, effective the date of this order.

¶ 12. IT IS FURTHER ORDERED that within 60 days of the date of this order Thomas E. Zablocki shall pay to the Office of Lawyer Regulation the costs of this proceeding. If the costs are not paid within the time specified and absent a showing to this court of his inability to pay the costs within that time, the license of Thomas E. Zablocki to practice law in Wisconsin shall be suspended until further order of the court.

      In December 1998 Attorney Zablocki commenced a reinstatement proceeding, but the matter was ultimately dismissed because Zablocki failed to pursue the matter.


author: DYKMAN, J.

text:
    The Landings LLC, Plaintiff-Appellant, v. The City of Waupaca, Defendant-Respondent. Franklin O. Ferg and Bette C. Ferg, Plaintiffs-Appellants, v. The City of Waupaca, Defendant-Respondent.† Vincent Nickel, Plaintiff-Appellant, v. The City of Waupaca, Defendant-Respondent.† Jay M. Kobiske, Plaintiff-Appellant, v. The City of Waupaca, Defendant-Respondent.† Stephen J. Mihna and Joyce L. Mihna, Plaintiffs-Appellants, v. The City of Waupaca, Defendant-Respondent.†
    Court of Appeals

      No. 2004AP1301.

      Submitted on briefs November 8, 2004.

      Decided July 28, 2005.

    2005 WI App 181
    (Also reported in 703 N.W.2d 689.)

      On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of Dan Biersdorf, E. Kelly Ready of Biersdorf & Associates, S.C., Milwaukee.
    On behalf of the defendants-respondents, the cause was submitted on the brief of Richard J. Weber, Wau-sau.
    Before Dykman, Vergeront and Higginbotham, JJ.

       Petition to review denied 11-11-05.

   DYKMAN, J.

¶ 1. The Landings, LLC, et al. (the landowners) appeal from an order dismissing their appeals under Wis. Stat. § 32.05(H) from condemnation proceedings brought by the City of Waupaca. The circuit court held that it lacked jurisdiction over the City because the notices of appeal served on the City were not authenticated, a requirement of Wis. Stat. § 801.02(1). The court's view that notices of appeal must be authenticated in § 32.05(11) appeals is a reasonable interpretation of the statutory scheme.

¶ 2. However, we also conclude that Wis. Stat. § 32.05(11) may reasonably be read to prescribe a different procedure to perfect service that does not require authentication of the notice of appeal. The statute is therefore ambiguous. State ex rel. Kalal v. Circuit Court, 2004 WI 58, ¶ 47, 271 Wis. 2d 633, 681 N.W.2d 110. Thus, following State Department of Transportation v. Peterson, 226 Wis. 2d 623, 594 N.W.2d 765 (1999), we adopt the view that favors the condemnees and conclude that a notice of appeal under § 32.05(11) need not be authenticated. Accordingly, we reverse and remand.

Background

¶ 3. The relevant facts of the case are undisputed. The City of Waupaca began condemnation proceedings to acquire certain land. After negotiations with the landowners failed to yield agreements, the City made condemnation awards in accordance with Wis. Stat. § 32.05, and took ownership of the condemned property. The landowners appealed the awards to the circuit court under § 32.05(11). They sent notices of appeal by registered mail to the city clerk and clerk of courts. The City filed notices of appearance and contested the court's jurisdiction. The City then moved for dismissal of all of the landowners' cases, arguing that a condemnation appeal under § 32.05(11) is subject to the circuit court procedural rules of Wis. Stat. § 801.02(1), and that notices of appeal must therefore be authenticated before service on the condemnor. The parties stipulated to the consolidation of these cases for the purpose of determining the authentication issue.

¶ 4. The circuit court concluded that because Wis. Stat. § 32.05(11) does not specify to the contrary, commencement of a condemnation appeal is governed by Wis. Stat. § 801.02(1), which provides that an action is not commenced as to any defendant until the defendant is served with an authenticated summons and complaint. As a result, the court determined that the landowners' failure to serve the condemnor with authenticated copies of the appeal denied the court jurisdiction over the City and therefore dismissed the appeals. The landowners appeal.

Discussion

¶ 5. This case turns on the meaning of several provisions of Chapters 32 and 801 of the Wisconsin Statutes. Statutory construction involves a question of law, which we review de novo. Hughes v. Chrysler Motors Corp., 197 Wis. 2d 973, 979, 542 N.W.2d 148 (1996). The purpose of statutory interpretation is to discern the intent of the legislature. State v. Setagord, 211 Wis. 2d 397, 406, 565 N.W.2d 506 (1997) (citation omitted). To do so, we first consider the language of the statute. Id. A statute is ambiguous if the statutory language is capable of being understood by reasonably well-informed persons in two or more senses. Kalal, 271 Wis. 2d 633, ¶ 47.

¶ 6. When construing a statute in the context of an appeal of a condemnation award, "[procedural statutes are to be liberally construed to permit a determination upon the merits of the controversy if such construction is possible." Kyncl v. Kenosha County, 37 Wis. 2d 547, 555-56, 155 N.W.2d 583 (1968). "[W]here a procedural statute does not provide specific direction for compliance, the ambiguity is to be resolved in favor of the person appealing the condemning entity's award of damages." Peterson, 226 Wis. 2d at 633. If a procedural statute can reasonably be construed in a manner that favors the appealing condemnee, we must apply that interpretation. Id.

¶ 7. Wisconsin Stat. § 32.05 establishes procedures and rules for condemning land for transportation uses, including two separate methods of appeal. The first method, under § 32.05(9), provides for the challenge of a condemnation by administrative appeal. In such a proceeding, the court assigns the appeal to a commission charged with resolving it. The condemnee may appeal the commission's decision to the circuit court. Section 32.05(10).

¶ 8. The second method, and the one used by the landowners in this case, allows a condemnee to by-pass the Wis. Stat. § 32.05(9) administrative proceeding and appeal directly to the circuit court. This method provides that an

owner of.. . the property condemned ... may elect to waive the appeal procedure specified in sub. (9) and instead... appeal to the circuit court of the county wherein the property is located. The notice of appeal shall be served as provided in sub. (9)(a).... The clerk shall thereupon enter the appeal as an action pending in said court with the condemnee as plaintiff and the condemnor as defendant. It shall proceed as an action in said court subject to all the provisions of law relating to actions originally brought therein ....

Section 32.05(11). The service procedure imported from § 32.05(9)(a) reads as follows: "notice [of appeal] shall be given by certified mail or personal service . . .."

¶ 9. The supreme court has held that a condemnation appeal is actually the commencement of an action. In re Gangler v. Wisconsin Elec. Power Co., 110 Wis. 2d 649, 657, 329 N.W.2d 186 (1983). Likewise, Wis. Stat. § 32.05(11) directs the clerk to "enter the appeal as an action," and provides that it "proceed as an action in said court subject to all the provisions of law relating to actions originally brought therein." Under Wis. Stat. § 801.02(1), a plaintiff must serve the defendant with an authenticated copy of the complaint. Failure to serve an authenticated copy of a complaint is a fundamental procedural error that requires dismissal because it denies the court jurisdiction over the defendant. See American Family Mut. Ins. Co. v. Royal Ins. Co. of America, 167 Wis. 2d 524, 533-34, 481 N.W.2d 629 (1992). The rules of Chapter 801 apply to the commencement of any circuit court action "except where different procedure is prescribed by statute or rule." Section 801.01(2).

¶ 10. The landowners contend that the phrase "notice of appeal shall be served as provided in sub. (9)(a)" in Wis. Stat. § 32.05(11) establishes a procedure for commencement different from that provided in Wis. Stat. § 801.02(1). An appeal under § 32.05(9), as noted above, is an administrative proceeding that does not require the filing of an authenticated notice of appeal. It only directs that "notice [of appeal] shall be given by certified mail or personal service ...." The landowners therefore conclude that the requirements of § 801.02, including service of an authenticated copy of the initiating document, do not apply to § 32.05(11) appeals.

¶ 11. The City agrees that Wis. Stat. § 32.05(11) provides for different procedures regarding notice of the appeal, but notes that the statute is silent as to whether the appeal must be authenticated. Accordingly, it asserts that the authentication requirement of Wis. Stat. § 801.02(1) must apply, citing City of La Crosse v. Shiftar Bros., Inc., 162 Wis. 2d 556, 469 N.W.2d 915 (Ct. App. 1991). As here, Shiftar concerned a procedural issue not explicitly addressed by the text of § 32.05(9)(a). There, the issue was whether the requirement in § 32.05(9)(a) that an appeal be filed within two years of the taking also required service of notice of the appeal within two years. The Shiftar court concluded that because § 32.05(9)(a) was silent on the issue, the general rule of § 801.02(1) that a plaintiff had sixty days (now ninety) in which to serve a defendant applied. Id. at 560.

¶ 12. We find the City's approach initially appealing. Wisconsin Stat. § 32.05(9)(a) is silent as to the issue in this case, just as it was silent in Shiftar. Likewise, certain provisions of Wis. Stat. § 801.02(1) would cure that silence. However, there are critical differences between Shiftar and the present case. In Shiftar, application of § 801.02(1) permitted the court to reach the merits of the appeal; the procedural requirements of § 801.02(1) were used as a shield to allow the condemnee's appeal to be heard. Here, the condemnor seeks to use § 801.02(1) as a sword to prevent consideration of the merits of the condemnee's appeal.

¶ 13. Additionally, Shiftar predates Peterson, and consequently does not follow Peterson's approach to statutory construction in condemnation appeals. Thus, Shiftar does not consider whether the statutory scheme is ambiguous in the context of that case. However, both Kyncl and Peterson, each in somewhat different contexts, concluded that Wis. Stat. § 32.05(9) was "not a paragon of clarity." Peterson, 226 Wis. 2d at 631 (citing Kyncl, 37 Wis. 2d at 555-56). We concur with this assessment of § 32.05(9), and conclude for the reasons discussed below that the statute is ambiguous in the context of this case.

¶ 14. Though the parties have not cast the dispute in these precise terms, we believe that this case turns on the meaning of the word "served" in the phrase "notice of the appeal shall be served as provided in sub. (9)(a)" in Wis. Stat. § 32.05(11). If by "served" the statute means only "delivered," then "the notice of appeal shall be [delivered] as in (9)(a)." Accordingly, § 32.05(11) incorporates the methods of delivery, personal service or certified mail, contained in Wis. Stat. § 32.05(9)(a), but does not address other aspects of service, such as authentication. Thus, the statute's silence as to authentication, and its direction to apply "all of the provisions of law relating to [circuit court] actions," would mean that the requirement of authentication in Wis. Stat. § 801.02 applies.

¶ 15. If, however, "served" here refers to more than delivery and includes all procedures necessary to perfect service, then Wis. Stat. § 32.05(9)(a) provides the entire procedure, and the authentication requirement of Wis. Stat. 801.01(2) does not apply. This broad reading of "served" trumps conflicting language in the statute that "all of the provisions relating to circuit court actions" apply in such appeals because it specifically addresses service and all procedures necessary to complete service. See State v. Gillespie, 2005 WI App 35, ¶ 7, 278 Wis. 2d 630, 693 N.W.2d 320 (where two statutes relate to the same subject matter, the specific statute controls the general statute) (citation omitted).

¶ 16. We believe that both meanings of "served" are reasonable in the context of Wis. Stat. § 32.05(11). Nothing in the text of the relevant statutes conclusively determines which reading of "served" is preferred. Therefore, we adopt the construction that favors the appealing condemnee. Peterson, 226 Wis. 2d at 633. Accordingly, we conclude that § 32.05(11) does not require service of an authenticated copy of a notice of appeal. "To cut off [the landowners'] right to a review . . . when they complied with the literal language of the service requirement in Wis. Stat. § 32.05[(11)] would be extraordinarily harsh. We decline to do so." Peterson, 226 Wis. 2d at 634 (citation omitted).

¶ 17. Our conclusion is supported by the legislative history of Wis. Stat. § 32.05(9). The original language of the bill relating to the service requirement in subsection (9) provided as follows:

(9) APPEAL FROM AWARD BY OWNER OR OTHER PARTY IN INTEREST. Any party having an interest in the property condemned may within 2 years after the date of taking, upon notice of appeal served as a circuit court summons is served, upon the condemnor and the clerk of the circuit court....

Legislative Reference Bureau Drafting File 1959 Senate Bill 285, first draft of bill, (emphasis added). This version required service of the notice "as a circuit court summons is served," i.e., according to the rules of civil procedure. However, the bill as enacted into law replaced this requirement with language that mirrors the current statute:

(9) APPEAL FROM AWARD BY OWNER OR OTHER PARTY IN INTEREST, (a)... Notice .. . shall be given to the clerk of the circuit court and to all other persons other than the applicant who were parties to the award. Such notice may be given by certified mail or personal service.

Laws of 1959, § 32.05(9)(a) (emphasis added). This change to the first draft of the provision is strong evidence of intent to provide a different, less formal service procedure for appeals under § 32.05(9)(a) and, by extension, for those under § 32.05(11).

¶ 18. The legislature may decide to amend the statute to clarify service procedures for appeals under Wxs. Stat. § 32.05(11). However, "statutes must clearly set forth the procedural requirements" necessary to seek a review of a governmental decision. Trojan v. Board of Regents, 104 Wis. 2d 277, 284, 311 N.W.2d 586 (1981). Because this statute does not, we adopt the interpretation that favors the condemnees and permits a determination of the dispute upon the merits.

By the Court. — Order reversed and cause remanded.

       All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise noted. Wisconsin Stat. § 32.05(11) provides in pertinent part:
      WAIVER OF HEARING BEFORE COMMISSION; APPEAL TO CIRCUIT COURT AND JURY. The owner of any interest in the property condemned named in the basic award may elect to waive the appeal procedure specified in sub. (9) and instead, within 2 years after the date of taking, appeal to the circuit court of the county wherein the property is located. The notice of appeal shall be served as provided in sub. (9)(a). Filing of the notice of appeal shall constitute such waiver. The clerk shall thereupon enter the appeal as an action pending in said court with the condemnee as plaintiff and the condemnor as defendant. It shall proceed as an action in said court subject to all the provisions of law relating to actions originally brought therein and shall have precedence over all other actions not then on trial.

       Wisconsin Stat. § 801.02(1) reads:
      A civil action in which a personal judgment is sought is commenced as to any defendant when a summons and a complaint naming the person as defendant are filed with the court, provided service of an authenticated copy of the summons and of the complaint is made upon the defendant under this chapter within 90 days after filing.
      Wisconsin Stat. § 32.05(11) provides that "notice of appeal shall be served as provided in sub. (9)(a)." Section 32.05(9)(a) provides that "notice [of appeal] shall be given by certified mail or personal service . . . ."

       The City also cites In re Gangler v. Wisconsin Elec. Power Co., 110 Wis. 2d 649, 329 N.W.2d 186 (1983), which upheld a dismissal of a condemnation appeal under Wis. Stat. § 32.05(10)(a) after notice of appeal was served on the condemnor's attorney, and not the condemnor as required by § 32.05(10). Gangler is inapposite. There, the appeal was dismissed because the appellant failed to follow an unambiguous requirement of § 32.05(10). Here, the appellants did not violate the requirements of the section under which they appealed, § 32.05(11), which is silent as to whether the notice of appeal must be authenticated. Further, Gangler provides no guidance as to how to interpret the relevant language of §§ 32.05(11) and 32.05(9)(a), and its relation to Wis. Stat. § 801.02.


author: CANE, C.J.

text:
    LeRoy M. Strenke and Juanita M. Strenke, Plaintiffs-Respondents, v. Levi Hogner and NAU Country Insurance Company, Defendants-Appellants, American Family Mutual Insurance Company, Defendant.
    Court of Appeals

      No. 2003AP2527.

      Submitted on briefs April 4, 2005.

      Decided August 2, 2005.

    2005 WI App 194
    (Also reported in 704 N.W.2d 309.)

      On behalf of the defendants-appellants, the cause was submitted on the briefs of Karen J. Kingsley of Kingsley Law Office, P.A. of St. Paul, Minnesota.
    On behalf of the plaintiffs-respondents, the cause was submitted on the brief of Owen R. Williams of Owen R. Williams Trial Lawyers of Amery, and of counsel: Lynn R. Laufenberg of Laufenberg & Hoefle, S.C. of Milwaukee.
    Before Cane, C.J., Hoover, PJ., and Peterson, J.

       Petition to review denied 11-11-05.

   CANE, C.J.

¶ 1. Levi Hogner and his insurer, NAU Country Insurance Company, appeal that portion of a judgment awarding punitive damages of $225,000 to LeRoy Strenke for a car accident that occurred when Hogner was driving while drunk. Hogner also appeals the trial court's denial of his motions for remittitur and a new trial. Hogner argues the award is so excessive it violates his due process rights under the United States and Wisconsin Constitutions because there was no rational relation between the amount of compensatory damages and the amount of punitive damages and no reasonable relation between the punitive award and the civil and criminal penalties that could have been imposed. Hogner argues alternatively that because the punitive damage award was based on passion or prejudice, the court should have ordered a new trial or reduced the award to make it reasonable. Because we conclude the award, though large, is not grossly excessive and therefore not unconstitutional, we reject all of Hogner's arguments and affirm the judgment.

Background

Factual History

¶ 2. According to Hogner's trial testimony, he began drinking beer at his home around 8 a.m. on October 16, 1998. At 2:30 p.m., after drinking at least twelve beers, he drove to a nearby tavern where he drank four to six more beers. He eventually testified that he believed he had consumed sixteen to eighteen twelve-ounce beers over the span of five hours. Sometime after 4 p.m., he decided to drive to another tavern. He got in his car and headed north on Highway 48 near Cumberland, Wisconsin. Strenke was driving south on the same road. As their cars approached the intersection of Highway 48 and Golf Course Road, Hogner turned left into the path of Strenke's car, causing a crash. Strenke injured his back in the collision.

¶ 3. Hogner's blood was drawn at the scene of the accident; his blood alcohol content later tested at .269%. Hogner pled no contest to operating a vehicle while intoxicated, fifth offense. He was sentenced to one year in jail, had his license revoked for thirty-six months, and paid fines of $3,041.

Procedural History

¶ 4. In May 2001, Strenke brought personal injury and punitive damage claims against Hogner and the case went to trial before a jury in May 2003. At the close of testimony, Hogner moved for a directed verdict, arguing that Strenke had not presented a prima facie case that he had acted maliciously or in intentional disregard of Strenke's rights. The trial court denied the motion, agreeing there was no evidence of malice, but concluding the jury could find that Hogner had acted with intentional disregard. The jury was then asked whether Hogner "acted maliciously towards Le-Roy Strenke or in intentional disregard" of Strenke's rights and what sum, if any, they would award in punitive damages. The jury answered the first question "yes." They answered the second question "$225,000"— ¿though Strenke had been awarded $2,000 in compensatory damages and his attorney had requested only $25,000 in punitive damages.

¶ 5. After the verdict, Hogner moved for remitti-tur or a new trial. The trial court orally denied both motions and entered judgment. Hogner then appealed.

¶ 6. In response to Hogner's appeal, we certified three questions to the supreme court:

(1) What proof is required for a plaintiff to recover punitive damages under the phrase "in an intentional disregard of the rights of the plaintiff' as provided in Wis. Stat. § 895.85(3) (2001-2002)?
i. If Wischer v. Mitsubishi Heavy Indus. Am., Inc., 2003 WI App 202, ¶ 40, 267 Wis. 2d 638, 673 N.W.2d 303, review granted (Wis. April 20, 2004) (Nos. 01-0724, 01-1031 & 01-2486) is correct, are there sufficient facts from which a jury could conclude Levi Hog-ner was aware his acts were "practically certain" to cause injury?
(2) Must a defendant's conduct giving rise to punitive damages have been directed at the specific plaintiff seeking punitive damages?
(3) If there was sufficient evidence to submit a punitive damages question to the jury, is the jury's punitive damage award excessive or in violation of Hogner's due process rights?

¶ 7. On March 18, 2005, the supreme court concluded that "a person acts in an intentional disregard of the rights of the plaintiff if the person acts with a purpose to disregard the plaintiffs rights, or is aware that his or her acts are substantially certain to result in the plaintiffs rights being disregarded." Strenke v. Hogner, 2005 WI 25, ¶ 3, 279 Wis. 2d 52, 694 N.W.2d 296. The court also held that, under Wis. Stat. § 895.85 (2001-02), the conduct giving rise to punitive damages need not be directed at the specific plaintiff seeking punitive damages. Id.

¶ 8. The court agreed there was sufficient evidence to send the punitive damages question to the jury. Id., ¶¶ 58, 63, 106. It was evenly divided, however, on the question of whether the damage award violated Hogner's due process rights. Id., ¶ 4. That question was remanded to us to be decided according to "the principles set forth in Trinity Evangelical Luth. Ch. v. Tower Ins. Co., 2003 WI 46, 261 Wis. 2d 333, 661 N.W.2d 789." Strenke, 279 Wis. 2d 52, ¶ 4.

Discussion

The United States Constitutional Standard

¶ 9. The common-law method for determining punitive damages has long been recognized as constitutional. Pacific Mut. Life Ins. Co. v. Haslip, 499 U.S. 1, 17-18 (1991). In the last decades, however, the United States Supreme Court has also recognized that particular punitive damage awards can offend constitutional principles and, more recently, has sought to clarify the framework through which trial courts and courts of appeal review those awards.

¶ 10. In 1996, the Court overturned an Alabama punitive damage award, holding that "the Due Process Clause of the Fourteenth Amendment prohibits a state from imposing a 'grossly excessive punishment1 on a tortfeasor." BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 562 (1996). In that case, the trial court awarded a BMW buyer $4,000 in compensatory damages, for buying a car that had been sold to him as new despite the fact it had been repainted before sale, and $4,000,000 in punitive damages. Id. at 565.

¶ 11. BMW set out the current federal framework, now adopted by many state courts, for analyzing the constitutionality of punitive damage awards. Where states have a legitimate interest in punishment and deterrence, they can authorize the award of punitive damages and give jurors some latitude to determine what amount of damages would vindicate the state's legitimate interest in those areas. Id. at 568. Any inquiry into the constitutionality of punitive damages must thus begin by identifying the state interests the award serves. Id. The BMW majority agreed that states had a legitimate interest in prohibiting deceptive trade practices, but noted that individual states provided that protection in different ways. Id. at 569-70. Based on that principle, no single state could impose economic sanctions on violators of their laws with the intent of changing the tortfeasor's conduct in other states. Id. at 572.

¶ 12. BMW linked grossly excessive awards with lack of notice, a critical nexus for due process violations. Whether an award was "grossly excessive" could be determined, BMW concluded, by examining three "guideposts:" the degree of reprehensibility of the conduct; the disparity between the harm or potential harm suffered by the plaintiff and the punitive damage award; and the difference between the remedy and other civil penalties imposed in comparable cases. Id. at 574-75.

¶ 13. The first factor was the most important— the degree of reprehensibility. Id. at 575. BMW held that recidivism increased reprehensibility, id. at 577, but observed that where the conduct in question skirted or evaded illegality, repetition did not have the same significance. Id. at 577-80. The second guidepost entailed comparing the award and the harm. The proper inquiry was "whether there is a reasonable relationship between the punitive damages award and the harm likely to result from the defendant's conduct as well as the harm that has actually occurred." Id. at 581. BMW refused to link constitutionality to any bright line rule or fixed ratio. It specifically noted that "low awards of compensatory damages may properly support a higher ratio ... if... a particularly egregious act has resulted in only a small amount of economic damages." Id. at 582. The third guidepost also required comparison. Weighing punitive damages against the civil penalties awarded in comparable cases reflected, the court reasoned, proper deference to the legislature's determination of appropriate sanctions. Id. at 583-84. In that context, BMW again stressed the problem of notice potentially created by multi-million dollar awards. Id. at 584.

¶ 14. In 2003, the Supreme Court revisited the punitive award question in another case involving an allegedly nation-wide scheme to refuse settlement in cases where excess verdicts were likely to be reached. The court found that the punitive damage award, $145,000,000, in that case violated due process. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 412 (2003).

¶ 15. State Farm reiterated the analytic framework set out in BMW, once more rejecting the idea that a state award can legitimately be based on the desire to deter a national pattern of behavior, particularly if that conduct is lawful in other states. State Farm, 538 U.S. at 420. Punitive damages also cannot be awarded, the court concluded, to punish conduct that has no relation to the harm suffered by the plaintiff in the case. Id. at 422-23.

¶ 16. But State Farm also clarified BMW in several respects, most notably by identifying a list of factors critical to determining the degree of reprehensibility of conduct: (1) whether the harm caused was physical or economic; (2) whether the tortious conduct evinced a reckless indifference to health or safety of others; (3) whether the target was financially vulnerable; (4) whether the conduct was single and isolated or involved repeated actions; and (5) whether the harm was the result of intentional malice, trickery, deceit, or mere accident. State Farm, 538 U.S. at 419. Evidence of recidivism can make conduct more reprehensible, but that evidence must be connected to the particular harm done to the plaintiffs. Id. at 423.

¶ 17. In its discussions of the second and third guideposts, State Farm reaffirmed the essential BMW principles. Although the majority expressed a suspicion of double-digit ratios, State Farm again concluded there was no strict mathematical ratio for constitutionality, and higher ratios might be acceptable where egregious acts led only to small compensatory damages. State Farm, 538 U.S. at 425. The majority also concluded that a punitive damage award could be compared to criminal as well as civil penalties. Criminal penalties, it reasoned, demonstrated legislative disapproval of a particular behavior; however, such sanctions were less useful in determining the appropriateness of the amount of an award than civil penalties. Id. at 428.

The Wisconsin Standard

¶ 18. In the wake of BMW and State Farm, the Wisconsin supreme court concluded that all appellate review of punitive damages awards for "gross excessiveness" is de novo and upheld a $3,500,000 punitive damage award for bad faith refusal to backdate insurance coverage. Trinity, 261 Wis. 2d 333, ¶¶ 48, 70.

¶ 19. As employed in Trinity, the Wisconsin test for the constitutionality of punitive damage awards is virtually identical to the one developed in BMW and State Farm. Trinity, 261 Wis. 2d 333, ¶¶ 23, 48, 53. Trinity first identified the state's legitimate interest in punishment and deterrence, focusing on the message a substantial punitive damage award can send to other insurers, and then examined the BMW guideposts. The court found Tower's conduct reprehensible because it was clearly prohibited by law and recidivist. Trinity, 261 Wis. 2d 333, ¶ 58, 59. It also concluded that, based on an estimate of potential damages, the award represented a "constitutionally acceptable" ratio of 7:1. Id., ¶ 65, 68. Finally, it recognized that Wisconsin had provided a criminal penalty, including a fine of up to $10,000, for violations of insurance statutes and rules. Id., ¶ 68. But, noting State Farm's position that a criminal penalty has "less utility" in determining whether a punitive award is excessive, Trinity did not find that disparity significant enough to alter the constitutional analysis.

¶ 20. The question before us now is whether, under the BMW-State Farm-Trinity standard, the $225,000 punitive damage award in this case is "grossly excessive." We conclude it is not.

¶ 21. Strenke is clearly distinguishable from BMW and State Farm. The state's interest in punishing and deterring drunk driving within its own jurisdiction is powerful and well-established. "Drunk driving is a terrible scourge." Lievrouw v. Roth, 157 Wis. 2d 332, 345, 459 N.W.2d 850 (Ct. App. 1990). In 1998 alone, for example, 10,167 people were injured and 388 killed in alcohol-related accidents in Wisconsin. Id. at 346. And there is no evidence here that the award was intended to deter the defendant from conduct in any other jurisdictions or to send a message to anyone except those who drive in Wisconsin. Like the award in Trinity, the punitive damage award in this case thus serves a legitimate state interest in punishment and deterrence in its own jurisdiction.

¶ 22. The degree of reprehensibly is the most important factor in any excessiveness inquiry and the conduct in this case qualifies as egregious. Hogner testified he had never hurt anyone previously while driving drunk, and never intended to. But those claims do nothing to mitigate his conduct. He admits to four previous arrests for drunk driving — the fifth came as a result of the accident. The drinking pattern established at trial, beginning at 8 a.m. at home and then moving on to taverns, would in addition provide grounds from which to infer that these five occasions of drunk driving represented only a fraction of the times Hogner drank and drove. Hogner's blood-alcohol level was more than three times the .08% level that establishes presumptive intoxication, arguably indicating profound indifference to the health and safety of others. He demonstrated even greater indifference each time he got in his car in search of more alcohol. Other jurisdictions have found, and we agree, that evidence of this sort establishes reprehensibility clearly, convincingly, and substantially. See, e.g., Stamp v. Jackson, 887 So. 2d 274, 276 (Ala. Civ. App. 2003).

¶ 23. As the record makes clear, Hogner's conduct caused physical harm, demonstrated reckless indifference to the health and safety of others, and was part of an admitted pattern of conduct. See State Farm, 538 U.S. at 419. While it did not intentionally target economically vulnerable individuals, given the current realities of insurance and medical coverage, it certainly had a strong likelihood of affecting such individuals. Id. Four of the five factors used to measure reprehensibility are thus present in this case. The only factor arguably not present, based on Hogner's probable speed when the accident occurred, is "deliberate malice."

¶ 24. In considering the second guidepost, we must ask whether, despite the state's interest in punishment and deterrence of drunk drivers and the reprehensibility of the conduct at issue, the difference between $2,000 and $225,000 is so excessive it creates the kind of notice problem identified in BMW and State Farm. If we consider only actual harm, it is hard to argue that Hogner would expect that an accident that caused $2,000 in damages would subject him to a punitive damage award of more than 100 times that amount. In addition, Wisconsin case law tends to disfavor awards whose ratio to compensatory damages is in the double digits. If we consider potential damages, however, the excessiveness calculus changes. Hogner's conduct could have injured Strenke seriously or even killed him. Absent what might arguably be called Hogner's "good luck," his conduct thus might easily have resulted in consequential damages that would have put the $225,000 award in the 1:1 or 2:1 range.

¶ 25. In addition, State Farm, BMW, and Trinity all recognize that ratios may be higher when an especially egregious act results in only limited economic damages. Though that logic has been applied primarily to cases in which economic damage is hard to quantify, such as civil rights cases, or where small injuries to many can justify larger punitive awards, the principle is applicable to drunk driving cases as well. See, e.g., Craig v. Holsey, 590 S.E.2d 742, 747-48 (Ga. App. 2003) (upholding a punitive damage award of $200,000, a 23:1 ratio, because the potential harm, death, was so much larger than the actual harm). When weighed against the potential damages in this case, an award of $225,000 is not grossly excessive.

¶ 26. Under the 1997-98 statutes, Hogner was subject to fines in the range of several thousand dollars as well as jail time for the precise conduct that injured this plaintiff. The statutory scheme governing drunk driving offenses, with its clear consideration of the problem of repeat offenders, represents the kind of legislative decision-making State Farm suggests should receive deference. Those penalties reflect the legislature's judgment about the level of deterrence and punishment necessary to prevent drunk driving. Such a scheme also creates expectations in defendants whose disruption can, in the right circumstances, result in constitutionally insufficient notice.

¶ 27. However, Hogner would also have been subject to far more severe penalties depending on the outcome of his conduct. Unlike a corporation pursuing policies that skirt the law, drivers cannot claim they decide to drive after drinking because they knew they risked only the penalties arising from another OWL When Hogner drove drunk on the night in question, he knew he risked arrest, incarceration, and a fine. But he also knew or should have known that, if disaster happened, he would have faced far more serious penalties. Like the jury in Trinity, the jury in this case could therefore have concluded that a large punitive damage award would work to support, rather than weaken, the civil and criminal sanctions imposed by the legislature, deterring Hogner and other Wisconsin citizens from gambling that they can drive and drink without seriously injuring themselves or anyone else.

Remittitur and New Trial

¶ 28. When the trial court finds that a punitive damage award is the result of passion or prejudice, it does not fix a reasonable amount of damages, it orders a new trial. Redepenning v. Dore, 56 Wis. 2d 129, 133-34, 201 N.W.2d 580 (1972). If the court determines a verdict is excessive or inadequate not because of prejudice or passion or as a result of error during the trial, other than an error in the amount of damages, the court has the statutory authority to determine the amount that, as a matter of law, is reasonable. See Wis. Stat. § 805.15(6) (2001-02). The party to whom the option is offered may elect to accept that judgment or to have a new trial on the issue of damages alone. See id.

¶ 29. Although the trial court's judgment did not explicitly address the decision not to grant a new trial, its oral statement that the award "doesn't shock my conscience" indicates it rejected passion and prejudice arguments. The court rejected the remittitur argument directly, albeit briefly, in a July 2004, motion on the issue. Noting that the jury heard evidence about the number of beers Hogner drank in a short period of time and about his intention to continue drinking, the court concluded it "was not going to change" the award.

¶ 30. Hogner argues nevertheless that the difference between the requested punitive damage award, $25,000, and the jury award, $225,000, is so excessive the jury must have based its verdict on passion or prejudice. Because the trial court is in the best position to determine whether "perversity pervaded" the verdict, we ordinarily will not upset its conclusions on this point absent an erroneous exercise of discretion. Redepenning, 56 Wis. 2d at 134. When the court does not set forth its reasons, however, we review the record independently to determine if the court made a reasonable inquiry and based its decision on facts in the record. See McCleary v. State, 49 Wis. 2d 263, 277-78, 182 N.W.2d 512 (1971). We see no evidence that the jury's verdict reflected "emotional, inflammatory, and immaterial considerations" and Hogner's only support for this argument is the assertion that the punitive damage award was too high in relation to the requested award. See Fahrenberg v. Tengel, 96 Wis. 2d 211, 224, 291 N.W.2d 516 (1980).

¶ 31. Hogner's argument that the trial court erred by not remitting the award only restates his constitutional argument. Because we have already rejected that argument, it cannot serve as a basis for claiming that the trial court erred when it did not find that the jury's verdict was excessively large as a matter of fact.

By the Court. — Judgment affirmed.

       Hogner, who weighed 400 pounds, also testified that he had never injured anyone previously while drinking and driving and did not intend to hurt anyone on the day of the accident.

       The proceeding was bifurcated; most of the evidence discussed here was not introduced until after the jury had decided Hogner's liability and the amount of compensatory damages.

        Strenke thus overrules Wischer, in which this court determined that "intentional disregard of the rights of the plaintiff required unambiguous proof the defendant had a general intent to perform an act and either a specific intent to cause injury by that act or knowledge the act was practically certain to result in injury. Wischer v. Mitsubishi Heavy Indus. Am., Inc., 2003 WI App 202, ¶ 40, 267 Wis. 2d 638, 673 N.W.2d 303, rev'd, 2005 WI 26, 279 Wis. 2d 4, 694 N.W.2d 320. Under Strenke, "intentional disregard" does not require an "intent to cause injury;" rather, it reconfirms the common law principle that punitive damages can be premised on conduct that is "a disregard of rights." Strenke v. Hogner, 2005 WI 25, ¶ 19, 279 Wis. 2d 52, 694 N.W.2d 296.

       Chief Justice Abrahamson and Justices Bradley and Roggensack would find the award constitutional; Justices Wilcox, Crooks, and Butler would not. Justice Prosser did not participate. Strenke, 279 Wis. 2d 52, ¶ 58.

       The Alabama Supreme Court reduced the punitive award to $2,000,000, disclaiming any reliance on acts that had occurred in other jurisdictions. While the United States Supreme Court agreed a state award could not be directed at deterring conduct outside the state's border, it found the reduced award still "grossly excessive." BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 574-75 (1996).

       The compensatory damages were $1,000,000.

       Many courts have signaled that they see the Supreme Court's second "bite" at the question as one intended primarily to clarify BMW. See, e.g., In re Exxon Valdez, 296 F. Supp. 2d 1071, 1076 (D. Alaska 2004) ([State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408 (2003)] "while bringing the BMW signposts into sharper focus, does not change the analysis.").

       Although the majority said "few awards exceeding a single-digit ratio between punitive and compensatory damages, to a significant degree, will satisfy due process," that remark is dicta and not, as the holding makes clear, a new single-digit rule. State Farm, 538 U.S. at 425.

       In both BMW and State Farm, the excessiveness of the awards reflects, at least in part, the court's determination that the awards violate a fundamental premise of state authority, that it can have a legitimate interest in punishment and deterrence only within its jurisdiction and that the conduct at issue, legal in many places, is simply insufficiently reprehensible.

       Unlike some jurisdictions, Wisconsin continues to support the message-sending function of punitive damage awards. See, e.g., Trinity Evangelical Luth. Ch. v. Tower Ins. Co., 2003 WI 46, ¶ 50, 261 Wis. 2d 333, 661 N.W.2d 789.

       If Trinty had considered only out-of-pocket costs, however, the ratio would have been considerably higher.

       We have recognized that State Farm, favors single-digit ratios. See Betterman v. Fleming Cos., 2004 WI App 44, ¶ 46, 271 Wis. 2d 193, 677 N.W.2d 673. But we have also recently upheld a punitive damage award that was over thirty times compensatory damages, citing State Farm, where a particularly egregious act resulted in only a small amount of economic damages. Schwigel v. Kohlmann, 2005 WI App 44, ¶¶ 21-22, 280 Wis. 2d 193, 694 N.W.2d 467. Wisconsin courts have thus remained true to the fundamental premise that "punitive damages must be decided on a case-by-case basis," which requires, as the United States Supreme Court has repeatedly affirmed, rejecting any mathematical ratio as the measure of constitutionality. Wangen v. Ford Motor Co., 97 Wis. 2d 260, 302, 294 N.W.2d 437 (1980).

       In the seminal "potential harm" case, decided prior to BMW and State Farm, the Supreme Court upheld a punitive damage award of $10,000,000 in a slander of title case although the actual damage judgment was only $19,000. TXO Prod. Corp. v. Alliance Res. Corp., 509 U.S. 443, 451 (1993). While the majority did not employ the current analytic framework, TXO is still good law.

       If actual damages had been $25,000, an amount easily reached in car accidents, the punitive damages award would be constitutional even under the must restrictive and mechanical reading of the dicta in State Farm.

       The Seventh Circuit has upheld awards where the ratio was the double-digit range for Title VII cases. See, e.g., Lampley v. Onyx Accept. Corp., 340 F.3d 478 (7th Cir. 2003).

        Mathias v. Accor Economy Lodging, Inc., 347 F.3d 672 (7th Cir. 2003), upheld an award of $186,000 in punitive damages, on only $5,000 compensatory damage, in a case where a hotel infested with bedbugs continued to sell the infested rooms and refused to spray the premises. The court found the 37.2:1 ratio acceptable because the very low compensatory damages awarded to any individual injured traveler would make it unprofitable to bring a lawsuit against a major corporation on the kind of facts before it. Id. at 676-77. More recently, a 96:1 ratio was upheld in a tobacco case. Williams v. Philip Morris, Inc., 92 P.3d 126 (Or. App. 2004) (concealing tobacco health risks was tantamount to fraud practiced over a long period of time, justifying the large ratio). Willow Inn, Inc. v. Public Serv. Mut. Ins. Co., 399 F.3d 224 (3rd Cir. 2005), upheld an award of $150,000 in punitive damages, even though the insured's actual loss, in a windstorm, was $2,000. The court added the total attorney fees and costs to that figure, however, to suggest the real ratio was closer to 1:1.

       Hogner argues, albeit in a conclusory fashion, that the award is excessive based on his financial condition. Wisconsin courts have said that one of the factors a jury can consider in awarding punitive damages is the defendant's ability to pay. See Wangen, 97 Wis. 2d at 302. However, the fact that Hogner's assets are limited does not by itself mean that the jury failed to consider his wealth or that the award is grossly excessive and we cannot say that a judgment that cannot be immediately satisfied is always, as a matter of law, constitutionally insupportable.

       When a punitive damage award reflects bias, passion or prejudice rather than a rational interest in deterrence and retribution, the Constitution is violated no matter what size the award. TXO, 509 U.S. at 467 (Kennedy, J., concurring). However, the size of the award is not "the sole, or even necessarily the most important, sign" of such improprieties. Id.