text:
    Steven C. Tietsworth, David Bratz, John W. Myers, Gary Streitenberger, and Gary Wegner, on behalf of themselves and all others similarly situated, Plaintiffs-Appellants, v. Harley-Davidson, Inc., and Harley-Davidson Motor Company, Defendants-Respondents.

    Court of Appeals

      No. 2004AP2655.

      Oral argument November 1, 2005.

      —Decided December 13, 2005.

    2006 WI App 5
    (Also reported in 709 N.W.2d 901.)

      On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of Ted W. Warshafsky and Frank T. Crivello, II of Warshafsky, Rotter, Tarnoff, Reinhardt & Bloch, S.C. of Milwaukee; Jonathan D. Selbin, pro hac vice, and Lisa J. Leebove, pro hac vice, of Lieff, Cabraser, Heimann & Bernstein, LLP of San Francisco, CA; David J. Bershad, pro hac vice, Michael M. Buchman, pro hac vice, and Michael R. Reese, pro hac vice, of Milberg Weiss Bershad & Schulman LLP of New York, NY; and Shpetim Ademi, Guri Ademi and Robert K. OReilly of Ademi & OReilly, LLP of Cudahy. There was oral argument by Lisa J. Leebove.

    On behalf of the defendants-respondents, the cause was submitted on the brief of W. Stuart Parsons, Patrick W. Schmidt and Kelly H. Twigger of Quarles & Brady

      LLP of Milwaukee, and Robert L. Binder of Foley & Lardner of Milwaukee. There was oral argument by W. Stuart Parsons.

    Before Wedemeyer, EJ., Fine and Curley, JJ.

       Petition to review granted 2-27-06.

   WEDEMEYER, EJ.

¶ 1. Steven C. Tietsworth, David Bratz, John W. Myers, Gary Streitenberger and Gary Wegner, on behalf of themselves and all others similarly situated (hereinafter "Tietsworth"), appeal from an order denying their motion to reopen the case for further proceedings under Wis. Stat. § 808.08(3) (2003-04) and for leave to amend the complaint under Wis. Stat. § 802.09 to pursue the contract and warranty remedies the Wisconsin Supreme Court recognized in Tietsworth v. Harley-Davidson, Inc., 2004 WI 32, 270 Wis. 2d 146, 677 N.W.2d 233. Tietsworth contends first, that the trial court erred in concluding that under § 808.08(3), it was powerless to allow Tietsworth to amend the complaint to assert legal claims which the supreme court explicitly recognized they have and, second, that the trial court erroneously exercised its discretion in denying Tietsworth's motion for leave to amend the complaint under § 802.09. Because the trial court erred in denying the motion to reopen and the motion to amend the complaint, we reverse and remand with directions.

BACKGROUND

¶ 2. On June 28, 2001, Tietsworth filed this proposed class action against Harley-Davidson, Inc. and Harley-Davidson Motor Company (hereinafter "Harley-Davidson") alleging problems with the design, manufacture, and sale of defective motorcycles and engines. Tietsworth's causes of action included: (1) a violation of Wis. Stat. § 100.18 (the "Deceptive Trade Practices Act" or "DTPA"); (2) negligence; (3) strict products liability; and (4) common-law fraudulent concealment. Plaintiffs also sought certification of a nationwide class of all persons who have owned, own, leased, lease, or acquired 1999 and early-2000 model year Harley-Davidson motorcycles equipped with Twin Cam 88 and Twin Cam 88B engines.

¶ 3. On November 1, 2001, Harley-Davidson moved to dismiss the complaint on the basis that Tietsworth's claims were premature as they incurred no actual injury, either personal or economic. Defendants also argued that plaintiffs' tort claims were barred by the economic loss doctrine, and that statutory fraud under Wis. Stat. § 100.18, and common law fraudulent concealment claims, should be dismissed for lack of particularity pursuant to Wis. Stat. § 802.03(2).

¶ 4. On February 27, 2002, the trial court issued an order dismissing the complaint in its entirety for failure to state a claim. On April 12, 2002, Tietsworth appealed to this court only the dismissal of its DTPA and the fraudulent concealment claims. We reversed the trial court's dismissal order and reinstated both causes of action. See Tietsworth v. Harley-Davidson, Inc., 2003 WI App 75, 261 Wis. 2d 755, 661 N.W.2d 450.

¶ 5. Harley-Davidson appealed our decision to the supreme court, alleging that a claimed "propensity to fail" was insufficient to establish injury under either theory, and that the economic loss doctrine barred plaintiffs' fraudulent concealment claim. On March 26, 2004, our supreme court issued an opinion reversing this court's decision. Tietsworth v. Harley-Davidson, Inc., 2004 WI 32, 270 Wis. 2d 146, 677 N.W.2d 233. The supreme court's opinion, however, explicitly recognized that the plaintiffs had contract and warranty remedies that had not been asserted in the complaint:

[T]he plaintiffs have warranty remedies for the alleged defects in their motorcycles. In addition, there are contract remedies at law and in equity to the extent that the plaintiffs were fraudulently induced to purchase their motorcycles. A contract fraudulently induced is void or voidable; a party fraudulently induced to enter a contract may affirm the contract and seek damages for breach or pursue the equitable remedy of rescission and seek restitutionary damages, including sums necessary to restore the party fraudulently induced to his position prior to the making of the contract. The economic loss doctrine does not bar these contract remedies for fraudulently induced contracts.
. .. The plaintiffs may have contract remedies — breach of contract/warranty or rescission and restitution — but may not pursue a tort claim for misrepresentation premised on having purchased allegedly defective motorcycles.

Id., ¶¶ 36, 37 (citations omitted; emphasis in original).

¶ 6. On April 27, 2004, the supreme court entered a remittitur, which stated that "the decision of the court of appeals is reversed" and gave no further instructions to the trial court. The case was remanded to the trial court.

¶ 7. On June 16, 2004, in accordance with the supreme court's decision, after issuance of the remitti-tur, Tietsworth moved the trial court to reopen this matter under Wis. Stat. § 808.08(3) and for leave to amend the complaint under Wis. Stat. § 802.09 to pursue the contract and warranty remedies the court identified. Plaintiffs alleged fraudulent inducement to contract, breach of express warranty and unjust enrichment. They asserted that the supreme court's comments regarding the availability of contract claims and the failure of the supreme court to specifically state that no further proceedings may take place, provided a basis for them to reopen Tietsworth to amend the complaint. Defendants argued that the remittitur affirmed the dismissal of the trial court and the case was over.

¶ 8. On August 23, 2004, the trial court heard plaintiffs' argument to reopen Tietsworth. It did not grant Tietsworth's motion, holding that a trial court "may not allow amendments of pleadings when the supreme court affirmed the judgment dismissing the case." The trial court believed it lacked authority to grant the relief requested by the plaintiffs. Plaintiffs' claims were dismissed on September 9, 2004. Tietsworth appeals from that order.

DISCUSSION

¶ 9. The issue in this case is whether the trial court erred in ruling that it lacked authority to reopen this case to allow further proceedings on remand from the supreme court in Tietsworth, 270 Wis. 2d 146, ¶ 45, and in denying Tietsworth's motion for leave to amend the complaint. We conclude that the trial court erred in denying the plaintiffs' motion to reopen and amend the complaint. Accordingly, we reverse the trial court's order and remand with specific directions to the trial court to enter an order granting the motion and allowing Tietsworth to file the second amended complaint and proceed with its contract and warranty claims.

¶ 10. We independently review the trial court's determination that it lacked authority to grant Tietsworth's motion to reopen the proceedings under Wis. Stat. § 808.08(3). Harvest Sav. Bank v. ROI Invs., 228 Wis. 2d 733, 737-38, 598 N.W.2d 571 (Ct. App. 1999); see Breier v. E.C., 130 Wis. 2d 376, 381, 387 N.W.2d 72 (1986).

¶ 11. The court of appeals reviews the trial court's denial of Tietsworth's motion for leave to amend under Wis. Stat. § 802.09 for an erroneous exercise of discretion. Finley v. Culligan, 201 Wis. 2d 611, 626, 548 N.W.2d 854 (Ct. App. 1996). A court's refusal to exercise its discretion constitutes a misuse of discretion. Oostburg State Bank v. United Sav. & Loan Ass'n, 130 Wis. 2d 4, 11-12, 386 N.W.2d 53 (1986); Finley, 201 Wis. 2d at 626.

A. Motion to Reopen.

¶ 12. Tietsworth argues that the trial court had the authority under Wis. Stat. § 808.08(3) to grant its motion. Harley-Davidson responds that the remand from the supreme court ended the matter. We conclude that the remand left open the possibility that the plaintiffs would move to amend their complaint to add the contract and warranty claims discussed in the supreme court's opinion.

¶ 13. This case, in part, depends on a statutory interpretation of Wis. Stat. § 808.08. Both parties agree that neither subsec. (1) directing the trial court to take specific action on remand, nor subsec. (2) directing the trial court to conduct a new trial on remand, apply to the facts of this case. Accordingly, the dispute centers on whether § 808.08(3) provides the trial court with the authority to reopen the case and allow the plaintiffs to amend. We conclude that subsec. (3) provides such authority.

¶ 14. The mandate by the supreme court in this case simply "reversed the decision of the court of appeals" and remanded the matter to the trial court. The supreme court's decision did not affirm a judgment of dismissal or direct that a judgment of dismissal be entered. The only trial court order, which this court reversed on appeal, was dismissal of the tort claims.

¶ 15. "[T]he traditional view [is] that a circuit court often has some discretion on remand to resolve matters not addressed by a mandate in a manner consistent with that mandate." State ex rel. J.H. Findorff & Son, Inc. v. Circuit Court for Milwaukee County, 2000 WI 30, ¶ 25, 233 Wis. 2d 428, 608 N.W.2d 679 (citing Fullerton Lumber Co. v. Torborg, 274 Wis. 478, 483, 80 N.W.2d 461 (1957)).

Where a mandate directs the entry of a particular judgment, it is the duty of the trial court to proceed as directed. The trial court may, however, determine any matters left open, and in the absence of specific directions, is generally vested with a legal discretion to take such action, not inconsistent with the order of the upper court, as seems wise and proper under the circumstances.

Id. (citing Fullerton Lumber Co. v. Torborg, 274 Wis. 478, 483, 80 N.W.2d 461 (1957)). Here, the trial court was asked to reopen the matter and allow the plaintiffs to amend their complaint to add contract and warranty claims. This action involved a matter not specifically resolved by the supreme court and was not inconsistent with the mandate. The mandate left open the opportunity for the plaintiffs to pursue contract and warranty claims. The opinion itself suggested that this option was available as a remedy to the plaintiffs.

¶ 16. It can be reasonably inferred from the language of the supreme court's opinion that it was suggesting this avenue to the plaintiffs if they chose to pursue it. See Tietsworth, 270 Wis. 2d 146, ¶¶ 36, 37. The supreme court was under no obligation to discuss contract or warranty claims as that was not a subject of the order on appeal. Nevertheless, the supreme court elected to specifically advise that these remedies were available. See id.

¶ 17. Harley-Davidson argues that if the supreme court wanted to permit Tietsworth an opportunity to amend its complaint to add contract and warranty claims on remand, it would have specifically directed such action or remanded for "further proceedings." We disagree. The supreme court cannot order a party to file an amended complaint asserting additional theories of liability. The supreme court cannot make that decision for a plaintiff. Thus, the supreme court was not in a position to include such language in its remand.

¶ 18. The language it did include, however, provided sufficient guidance to Tietsworth that if it so chose to pursue contract and warranty claims against Harley, it was permitted to do so. See id. Wisconsin Stat. § 808.08(3) permits a party to move for further proceedings consistent with the supreme court's ruling within one year from the date of the remittitur. Tietsworth moved to reopen this case and amend its complaint well within the one-year window.

¶ 19. Harley-Davidson, citing Sutter v. State, 69 Wis. 2d 709, 233 N.W.2d 391 (1975), argues that the remand should have resulted in the end of litigation in this matter: "It is desirable that litigation come to an end." Id. at 716. We acknowledge the importance of this principle. Nevertheless, the instant case is distinguishable from Sutter, wherein the "controversy [w]as .. . fully tried upon the merits and the rights of the parties conclusively determined." Id. The same cannot be said for this case, which has never proceeded past a complaint, dismissal, and seemingly unending appellate proceedings.

¶ 20. Based on the foregoing, we conclude the trial court retained authority to grant Tietsworth's motion and, in fact, should have granted the motion to reopen. The trial court, therefore, erred in denying the motion and its order is hereby reversed.

B. Motion to Amend.

¶ 21. Tietsworth also requests that we reverse the trial court with respect to the motion to amend the complaint. Harley-Davidson responds that justice does not require such amendment. We disagree.

¶ 22. Wisconsin Stat. § 802.09(1) provides that leave to amend a pleading "shall be freely given at any stage of the action when justice so requires." Here, we conclude that justice does require the amendment. At the time that Tietsworth filed the tort claims, the law was unclear as to whether those claims were viable under the dictates of the economic loss doctrine. The supreme court clarified the law in this area in its decision in that case. Tietsworth, 270 Wis. 2d 146, ¶¶ 36, 37. The supreme court specifically stated that the economic loss doctrine would not bar Tietsworth's contract and warranty claims against Harley-Davidson. Id.

¶ 23. Here, too, the amended complaint claims arise out of the same transaction or set of facts. See Wussow v. Commercial Mechanisms, Inc., 97 Wis. 2d 136, 293 N.W.2d 897 (1980). In Wussow, the supreme court allowed amendment of the complaint to add a punitive damages claim, after the parties had settled the question of compensatory damages. Id. at 145. "As long as the amendment arises out of the same transaction, a judge may permit the amendment if 'in furtherance of justice and upon such terms as may be just.'" Id. (citation omitted).

¶ 24. Here, we conclude that, based on the language of the supreme court's decision remanding this matter to the trial court, justice requires that the trial court allow Tietsworth to file the amended complaint asserting the contract/warranty claims and proceed to litigate the merits of those claims. There is no dispute that the amended complaint arises out of the same transaction or set of facts. There is no dispute that Harley-Davidson is well aware of the transactions at issue here and what Tietsworth's claims are. It has known since the date of the supreme court's decision in this case, March 26, 2004, that these claims exist and that the highest court in this state concluded that Tietsworth is entitled to pursue them. Thus, we conclude that the trial court should have permitted the amendment" 'so as to remove the technical obstacles to a litigation of the merits of the controversy.'" Gustavson v. O'Brien, 87 Wis. 2d 193, 205, 274 N.W.2d 627 (1979) (citation omitted).

¶ 25. In sum, we conclude that the trial court erred in denying Tietsworth's motion seeking to reopen the matter, and that the trial court erred in denying Tietsworth's motion to file an amended complaint. We reverse the trial court's order and remand with specific directions that the trial court enter an order allowing Tietsworth to file the second amended complaint asserting the claims recognized by the supreme court in its March 26, 2004 decision.

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

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

       The full text of Wis. Stat. § 808.08 provides:
      Further proceedings in trial court. When the record and remittitur are received in the trial court:
      (1) If the trial judge is ordered to take specific action, the judge shall do so as soon as possible.
      (2) If a new trial is ordered, the trial court, upon receipt of the remitted record, shall place the matter on the trial calendar.
      (3) If action or proceedings other than those mentioned in sub. (1) or (2) is ordered, any party may, within one year after receipt of the remitted record by the clerk of the trial court, make appropriate motion for further proceedings. If further proceedings are not so initiated, the action shall be dismissed except that an extension of the one-year period may be granted, on notice, by the trial court, if the order for extension is entered during the one-year period.


source: Caselaw Access Project

author: LAROCQUE,

license: Public Domain

text:
    Whistle B. Currier, Petitioner-Appellant, v. Wisconsin Department of Revenue, Respondent-Respondent.
    Court of Appeals

      No. 2005AP292.

      Submitted on briefs November 9, 2005.

      —Decided December 14, 2005.

    2006 WI App 12
    (Also reported in 709 N.W.2d 520.)

      On behalf of the petitioner-appellant, the cause was submitted on the briefs of Whistle B. Currier, pro se.
    On behalf of the respondent-respondent, the cause was submitted on the brief of F. Thomas Creeron III, assistant attorney general, and Peggy A. Lautenschlager, attorney general.
    Before Brown and Nettesheim, JJ., and Daniel L. LaRocque, Reserve Judge.
   LAROCQUE,

¶ 1. Reserve Judge. Whistle B. Currier appeals pro se from a circuit court order dismissing his petition for judicial review of a decision and order of the Wisconsin Tax Appeals Commission. At issue is Currier's compliance with the statutory time limits for filing his petition for rehearing and his subsequent petition for judicial review of the Commission's decision. Currier argues that he complied with the deadline for filing his petition for rehearing because his petition was postmarked before midnight of the last date for filing as required by Wis. Stat. § 73.01(5) (2003-04). He also maintains that his petition for rehearing served to extend the deadline for seeking judicial review of the Commission's decision and that he complied with the extended deadline.

¶ 2. We hold that Wis. Stat. § 73.01(5) does not apply to petitions for rehearing from adverse Commission decisions. Further, Currier's petition for rehearing from the Commission's decision was untimely under Wis. Stat. § 227.49(1), the controlling statute, because it was not physically delivered to and received by the Commission until twenty-one days after the Commission's decision. We further conclude that Currier's untimely petition for rehearing of the Commission's decision did not extend the time for seeking judicial review of the Commission's decision under Wis. Stat. § 227.53(l)(a)2. and, as a result, his petition for judicial review was tardy. Accordingly, the circuit court lacked competency to proceed and we affirm its order dismissing Currier's petition for judicial review.

Facts

¶ 3. The relevant facts are brief and relate to the procedural history of Currier's case. In May 2003, the Wisconsin Department of Revenue (DOR) levied an income tax assessment against Currier in the amount of $9588.57. Currier filed a petition for redetermination of the assessment, which the DOR subsequently denied. In December, Currier filed a petition for review with the Commission.

¶ 4. On June 16, 2004, the Commission served Currier with a decision and order upholding the DOR's assessment against Currier. Currier sent a petition for rehearing by mail on July 6. The petition was received by the Commission's clerk on July 7.

¶ 5. On July 13, the Commission issued an order denying the petition for rehearing. The Commission held that that Currier's petition was untimely under Wis. Stat. § 227.49(1). The Commission stated, "The 20-day period for filing a timely petition for rehearing expired on July 6, 2004. Petitioner filed his petition for rehearing on July 7, 2004, one day late. [See § 227.49(1)]."

¶ 6. On August 11, 2004, Currier filed a petition for review in the circuit court pursuant to Wis. Stat. § 227.53(1), the statutory provision authorizing judicial review of agency decisions. On September 1, the DOR moved to dismiss the petition for judicial review for lack of subject matter jurisdiction (competency to proceed) and lack of personal jurisdiction. The DOR reminded the circuit court that pursuant to § 227.53(1)(a)2. a party must file its petition for judicial review within thirty days of service of the Commission decision and Currier had filed his petition for judicial review on August 11, obviously more than thirty days after service of the Commission's June 16 decision. The DOR recognized that § 227.53(l)(a)2. expands the time for filing of a petition for judicial review if the party has requested a rehearing, but submitted that Currier's untimely petition for rehearing did not serve to extend the deadline.

¶ 7. In his response, Currier maintained that his petition for rehearing was timely because it was postmarked before midnight on July 6, the last date for filing of his petition for rehearing, and that was all Wis. Stat. § 73.01(5) required. Currier submitted that the thirty days he had to file his petition for judicial review pursuant to Wis. Stat. § 227.53(l)(a)2. began running after the Commission denied his petition for rehearing on July 13. His August 11 petition for judicial review was therefore timely.

¶ 8. Initially, the circuit court denied the DOR's motion to dismiss Currier's petition for judicial review. However, the DOR filed a motion for reconsideration and, upon reconsideration, the circuit court granted the DOR's motion to dismiss. The court rejected Currier's contention that his petition for rehearing was timely and adopted the DOR's reasoning that a tardy petition for rehearing does not extend the time for seeking judicial review of the agency's original decision on the merits.

Standard of Review

¶ 9. This appeal requires us to construe and apply Wis. Stat. §§ 73.01(5), 227.49(1) and 227.53(1). The interpretation of a statute and its application to undisputed facts are questions of law that we review independently. Garcia v. Mazda Motor of Am., Inc., 2004 WI 93, ¶ 7, 273 Wis. 2d 612, 682 N.W.2d 365. The purpose of statutory construction is to give effect to the legislature's intent. Town of Avon v. Oliver, 2002 WI App 97, ¶ 7, 253 Wis. 2d 647, 644 N.W.2d 260. In the absence of an applicable statutory definition, the legislature is presumed to intend the common usage of a term. Hoffman v. Rankin, 2002 WI App 189, ¶ 8, 256 Wis. 2d 678, 649 N.W.2d 350. The common and ordinary usage of words may be established by their definition in a recognized dictionary. Id. However, in all cases, we are obligated to construe statutes in a manner that avoids absurd and unreasonable results. Oliver, 253 Wis. 2d 647, ¶ 7.

Discussion

¶ 10. Currier argues, as he did before the circuit court, that both his petition for rehearing and his petition for judicial review were timely. We first address the timeliness of Currier's petition for rehearing.

¶ 11. Currier asserts that his petition for rehearing of the Commission decision was timely filed pursuant to Wis. Stat. § 73.01(5) because it was postmarked by midnight of the last day for filing. Section 73.01(5)(a), entitled "Appeals to commission" provides:

Any person who is aggrieved by a determination of the state board of assessors under s. 70.995 (8) or who has filed a petition for redetermination with the department of revenue and who is aggrieved by the redetermination of the department of revenue may, within 60 days of the determination of the state board of assessors or of the department of revenue or, in all other cases, within 60 days after the redetermination but not thereafter, file with the clerk of the commission a petition for review of the actibn of the department of revenue .... For the purposes of this subsection, a petition for review is considered timely filed if mailed by certified mail in a properly addressed envelope, with postage duly prepaid, which envelope is postmarked before midnight of the last day for filing. (Emphasis added.)

However, by its plain language, § 73.01(5) governs petitions for review from determinations by either the State Board of Assessors or the DOR to the Commission. This case involves an attempt to obtain a rehearing of a Commission determination.

¶ 12. Petitions for review of a State Board of Assessors or a DOR decision and petitions for rehearing of a Commission decision occur at different stages of the appeal process and are covered by different statutes. A party aggrieved by a State Board of Assessors or a DOR decision files a petition for review with the Commission before the Commission reviews the case and renders its decision. Pursuant to Wis. Stat. § 73.01(5), a party timely files such a petition for review if it is postmarked before midnight of the last day for filing. On the other hand, a party aggrieved by a decision of the Commission itself files a petition for rehearing after the Commission has already reviewed the case and rendered its decision. The timeliness of such a petition for rehearing is governed by Wis. Stat. § 227.49(1). See Wis. Stat. § 73.015(2) (any adverse determination of the Commission is subject to review in the manner provided in Wis. Stat. ch. 227). Because Currier's challenge pertains to a petition for rehearing of a Commission decision, we turn to § 227.49(1).

¶ 13. Wisconsin Stat. § 227.49(1), entitled "Petitions for rehearing in contested cases," states in part:

A petition for rehearing shall not be a prerequisite for appeal or review. Any person aggrieved by a final order may, within 20 days after service of the order, file a written petition for rehearing which shall specify in detail the grounds for the relief sought and supporting authorities. (Emphasis added.)

Section 227.49(1) expressly requires a person petitioning for rehearing from an agency decision to "file" the petition within twenty days of service of the agency's decision.

¶ 14. Currier appears to argue that mailing, in and of itself, constitutes filing. Wisconsin Stat. ch. 227 does not define the term "file" and we are not aware of any published Wisconsin case law specifically establishing what constitutes filing pursuant to Wis. Stat. § 227.49(1).

¶ 15. However, cases have repeatedly recognized that "[t]o construe or define 'mailing' as 'filing' is to ignore the plain meaning of the word. Mailing merely initiates the process by which an article in the due course of the post will be delivered." E.M. Boerke, Inc. v. Williams, 28 Wis. 2d 627, 635, 137 N.W.2d 489 (1965); Hoffman, 256 Wis. 2d 678, ¶ 14. Filing, as it is defined in the dictionary, contemplates delivery to the proper authority. See E.M. Boerke, 28 Wis. 2d at 635 (dictionary definition of to "file" entails delivery to the proper person); Hoffman, 256 Wis. 2d 678, ¶ 13 (stating that the recognized dictionary definition of to "file" is:

[T]o deliver (as a legal paper or instrument) after complying with any condition precedent (as the payment of a fee) to the proper officer for keeping on file or among the records of his office ... to place (as a paper or instrument) on file among the legal or official records of an office esp. by formally receiving, endorsing, and entering. (Citing WebsteR's Thied New International Dictionary (unabr. 1993).)

¶ 16. Wisconsin courts have applied this distinction between mailing and filing in a variety of contexts. For example, in the context of appellate procedure, our supreme court has concluded that absent specific statutory language to the contrary filing is accomplished when the petition is physically handed to and accepted by the clerk of courts. See Boston Old Colony Ins. Co. v. International Rectifier Corp., 91 Wis. 2d 813, 822, 284 N.W.2d 93 (1979) (holding that "filing, under [Wis. Stat.] sec. 809.10, means physical delivery of the notice of appeal to and receipt by the clerk of the trial court.... [T]he notice of appeal. .. shall be considered filed as of the date that the notice of appeal is actually received by the clerk."); First Wis. Nat'l Bank of Madison v. Nicholaou, 87 Wis. 2d 360, 364-65, 274 N.W.2d 704 (1979) (determining that filing of a petition for appeal to the Wisconsin Supreme Court under Wis. Stat. § 808.10 occurs when it is received by the clerk of courts' office). This court has held that the term "file" for purposes of the statute and relevant administrative code provisions requiring a party to file a sexual discrimination complaint within 300 days of the alleged discrimination entails delivery to the intended recipient. Hilmes v. DILHR, 147 Wis. 2d 48, 53-54, 433 N.W.2d 251 (Ct. App. 1988) (filing does not occur until the complaint is received, meaning the physical receipt of the complaint by the department). We have also held that filing for purposes of Wis. Stat. § 655.445, a statute permitting medical malpractice patients to request mediation within fifteen days of filing a court action, means delivery of the request to the proper officer for keeping on file or among records of his or her office. Hoffman, 256 Wis. 2d 678, ¶¶ 12, 15, 20.

¶ 17. We are satisfied that the term "file" as it is used in Wis. Stat. § 227.49(1) also should be accorded its ordinary meaning. See Hoffman, 256 Wis. 2d 678, ¶ 8 (in absence of an applicable statutory definition, the legislature is presumed to intend the common usage of a term, as defined in recognized dictionary). Thus, we hold that the filing of a petition for rehearing under § 227.49(1) is not accomplished upon its mailing. Rather, a petition is filed when it is physically delivered to and received by the relevant authority.

¶ 18. Here, the Commission served its decision on June 16, which would mean that the twenty-day time limit for filing a petition for rehearing expired on July 6. See Wis. Stat. § 227.49(1). While Currier's petition was postmarked July 6, the petition was not delivered to and received by the Commission until July 7. Because Currier's petition was not delivered to and received by the Commission until twenty-one days after service of the Commission's original decision, Currier's petition was not timely filed.

¶ 19. We next address Currier's assertion that his petition for judicial review was timely filed. He insists the thirty-day period for filing a petition for judicial review, see Wis. Stat. § 227.53(l)(a)2., began running on July 13 when the Commission denied his petition for rehearing, rather than on June 16 when the Commission served the original adverse decision. We cannot agree; section 227.53(l)(a)2. assumes a timely request for rehearing has been submitted.

¶ 20. Wisconsin Stat. § 227.53(l)(a)2. provides:

Unless a rehearing is requested under s. 227.49, petitions for review under this paragraph shall be served and filed within 30 days after the service of the decision of the agency upon all parties under s. 227.48. If a rehearing is requested under s. 227.49, any party desiring judicial review shall serve and file a petition for review within 30 days after service of the order finally disposing of the application for rehearing, or within 30 days after the final disposition by operation of law of any such application for rehearing. The 30-day period for serving and filing a petition under this paragraph commences on the day after personal service or mailing of the decision by the agency.

Thus, as a general matter, § 227.53(1)(a)2. affords a petitioner thirty days from the date of service of the original adverse agency decision to file a petition for judicial review. The extended deadline for filing a petition for judicial review applies only when rehearing is "requested under s. 227.49." See § 227.53(l)(a)2. Section 227.49(1) specifies that the petition for rehearing must be filed, meaning physically delivered to and received by the agency, within twenty days of the initial decision. Therefore, if a petition for rehearing is not filed within the twenty-day time limit, a rehearing is not properly "requested under s. 227.49" and the petitioner does not acquire the benefit of the extended deadline for petitioning for judicial review. See § 227.53(1)(a)2.

¶ 21. As the circuit court aptly noted, if we were to hold otherwise, we would create the dangerous precedent of permitting parties to resurrect untimely petitions for judicial review simply by filing a request for rehearing with the agency. Once the agency denied the tardy petition for rehearing, a party would have thirty days to seek judicial review of the agency's decision. This would be true regardless of whether the petition for rehearing was filed months or years after the agency served its original decision. We cannot countenance such an absurd and unreasonable result. See Oliver, 253 Wis. 2d 647, ¶ 7 (courts have an obligation to construe statutes in a manner that avoids absurd or unreasonable results).

¶ 22. Since Currier's petition for rehearing was not timely filed, rehearing was not properly "requested under s. 227.49." See Wis. Stat. § 227.53(1)(a)2. Currier was therefore required to file his petition for circuit court review within thirty days service of the Commission's original adverse decision. The Commission served its original decision on June 16 and Currier did not file his petition until August 11, clearly outside the confines of the thirty-day period.

¶ 23. We appreciate the consequences to Currier of our decision. "To dismiss an appeal because it comes one day late may seem harsh. However, if statutory time limits to obtain appellate jurisdiction are to be meaningful they must be unbending." Ryan v. DOR, 68 Wis. 2d 467, 472, 228 N.W.2d 357 (1975) (citation omitted). Strict compliance with the statutes is required. Brachtl v. DOR, 48 Wis. 2d 184, 187-88, 179 N.W.2d 921 (1970) (holding that timely service is indispensable to trigger judicial review of the Commission's decision); Ryan, 68 Wis. 2d at 472. Because Currier did not timely file his petition for rehearing with the Commission, his petition for review with the circuit court was also untimely. The circuit court, therefore, lacked competency to proceed and we affirm its order dismissing the petition. See Johnsonville Sausage, Inc. v. DOR, 113 Wis. 2d 7, 9, 11, 334 N.W.2d 269 (Ct. App. 1983) (failure to comply with mandatory time limits results in loss of circuit court's competency to proceed).

By the Court. — Order affirmed.

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

       Competency has been defined as the court's power to exercise subject matter jurisdiction. Kohler Co. v. Wixen, 204 Wis. 2d 327, 337, 555 N.W.2d 640 (Ct. App. 1996). The concept of competency is narrower than that of subject matter jurisdiction, because while the constitution confers subject matter jurisdiction on the courts, the state legislature may limit the ability of the courts to exercise that power by statute. Sheboygan County Dep't of Social Servs. v. Matthew S., 2005 WI 84, ¶ 16, 282 Wis. 2d 150, 698 N.W.2d 631. "Such a legislative enactment affects that court's competency to proceed rather than its subject matter jurisdiction." Cepukenas v. Cepukenas, 221 Wis. 2d 166, 170, 584 N.W.2d 227 (Ct. App. 1998). Thus, in this case, the failure to comply with mandatory time limits in Wis. Stat. ch. 227 would result in the loss of the circuit court's competency to proceed. See Cudahy v. DOR, 66 Wis. 2d 253, 261-62, 224 N.W.2d 570 (1974); Johnsonville Sausage, Inc. v. DOR, 113 Wis. 2d 7, 9, 11, 334 N.W.2d 269 (Ct. App. 1983).

       We note that the eighth edition of Black's Law Dictionary defines to "file" and to "mail" consistently with these definitions. See Black's Law Dictionary 660, 972 (8th ed. 2004) (defining to "file" as "[t]o deliver a legal document to the court clerk or record custodian for placement into the official record" and to "mail" as "[t]o deposit (a letter, package, etc.) with the U.S. Postal Service").


author: BROWN, J.

text:
    State of Wisconsin ex rel. Luis Santana, Petitioner-Appellant, v. Jeffrey P. Endicott, Warden, and Redgranite Correctional Institution, Respondents-Respondents.
    Court of Appeals

      No. 2005AP332.

      Submitted on briefs October 27, 2005.

      —Decided December 14, 2005.

    2006 WI App 13
    (Also reported in 709 N.W.2d 515.)

      On behalf of the petitioner-appellant, the cause was submitted on the brief of Luis Santana, pro se.
    On behalf of the respondents-respondents, the cause was submitted on the brief of Peggy A. Lauten-schlager, attorney general, and James M. Freimuth, assistant attorney general.
    Before Snyder, PJ., Brown and Nettesheim, JJ.
   BROWN, J.

¶ 1. In March 1996, Luis Santana was found guilty of two drug offenses. He neither perfected an appeal nor sought postconviction remedies subsequent to his convictions. Years later, his direct appeal rights having long since expired, Santana sought ha-beas corpus relief in the circuit court. He requested reinstatement of his right to proceed under Wis. Stat Rule 809.30 (2003-04) on the ground of ineffective assistance of appointed counsel. The circuit court dismissed the petition. We affirm. Although Santana may seek habeas relief on his ineffective assistance claim, he started in the wrong forum. His petition faults appointed counsel for failure to pursue an appeal. State ex rel. Smalley v. Morgan, 211 Wis. 2d 795, 797-99, 565 N.W.2d 805 (Ct. App. 1997), unequivocally requires defendants to raise this type of ineffective assistance claim in a Knight petition to this court. That said, we emphasize that the dismissal below is without prejudice and that Santana may still file a Knight petition.

¶ 2. Subsequent to Santana's convictions, he filed a notice of intent to seek postconviction relief, and the state public defender thereafter appointed counsel to represent him. Counsel twice sought orders of this court involving clarification or extension of time to file a notice of appeal or a postconviction motion. In granting the second motion, we noted that counsel had been contacted by an attorney in Massachusetts whom Santana's family had retained to explore the possibility of having Santana either deported to the Dominican Republic, his native country, or placed there through a prisoner exchange program. We observed that this attorney had informed appellate counsel that exchange and deportation might not be available to Santana if postconviction matters remained pending. Following this order, counsel wrote to the Department of Corrections. His correspondence stated that Santana requested deportation and would not be pursuing post-conviction relief or an appeal. Counsel subsequently closed Santana's file. Thus, his involvement in Santana's case ended sometime in or around August 1997.

¶ 3. Nearly seven and one-half years later, on December 21, 2004, Santana petitioned the circuit court for a writ of habeas corpus. Among his claims were the following. First, he asserted that counsel improperly withdrew from representation without prosecuting an appeal or filing a no-merit report. According to Santana, this inaction violated his right to assistance of appellate counsel because nobody — trial counsel, the trial court, or appellate counsel — had informed him of his appeal options, and therefore he had never waived these rights. Santana also alleged several trial errors. He challenged the sufficiency of evidence with respect to the charge for possessing cocaine with the intent to deliver and asserted that the court had not given the properjury instruction on that charge. Moreover, he claimed a violation of his due process rights resulted from the State's use of an informant who illegally used drugs. The circuit court dismissed Santana's petition on the ground that he had not exhausted other appeal and postconviction remedies.

¶ 4. On appeal, we hold that Smalley governs this case and that dismissal was proper. In Smalley, we recognized that a Knight petition in this court provided the proper vehicle for defendants to attack appointed counsel's failure to commence an appeal governed by Wis. Stat. Rule 809.30 or Wis. Stat. Rule 809.32, whether or not the appeal had to be preceded by a postconviction motion. Smalley, 211 Wis. 2d at 798-99; see also State v. Evans, 2004 WI 84, ¶¶ 34 n.12, 39 n.14, 273 Wis. 2d 192, 682 N.W.2d 784; State ex rel. Ford v. Holm, 2004 WI App 22, ¶ 9 n.4, 269 Wis. 2d 810, 676 N.W.2d 500 ("Although the allegation of ineffective assistance of counsel in this case involves the alleged actions or omissions of counsel prior to the filing of an appeal, it is nonetheless properly raised by way of a Knight petition in this court."), review denied, 2004 WI 50,271 Wis. 2d 109, 679 N.W.2d 544 (No. 2002AP1828-W). Santana complains that counsel failed to file a no-merit appeal or to move for postconviction relief. Rule 809.32 governs no-merit appeals. Had counsel moved for postconviction relief, he would have done so pursuant to Wis. Stat. § 974.02, which is governed by the procedural rules in Rule 809.30. See § 974.02(1); Evans, 273 Wis. 2d 192, ¶ 29 (such a motion may precede or substitute for a notice of appeal and may be a prerequisite to direct appeal depending on whether the issues argued were previously raised). Thus, Santana should have brought a Knight petition to this court.

¶ 5. The State, citing Smalley, 211 Wis. 2d at 798-99, and Ford, 269 Wis. 2d 810, ¶¶ 36-37, observes that although this court accepts habeas petitions where appellate counsel is ineffective, we often remand to the trial court for fact finding and opines that "[i]t reasonably follows... that a trial court should be able to address a loss-of-direct-appeal claim in the first instance." We disagree with the State's suggestion that Smalley prescribes an optional procedure. First, the fact that we may often remand for fact finding says nothing about whether the circuit court is the proper forum for determining the legal issues. Second, Evans strongly indicates that a convicted defendant does not have a choice of forum for his or her habeas petition:

In Knight, this court stated unequivocally that "to bring a claim of ineffective assistance of appellate counsel, a defendant must petition the appellate court that heard the appeal for a writ of habeas corpus." Further, we expressly disavowed language from the court of appeals' decision in State v. Flores, 158 Wis. 2d 636, 462 N.W.2d 899 (Ct. App. 1990), which allowed such a claim to be made via a § 974.06 motion: "Because we conclude that the defendant should pursue an ineffective assistance of appellate counsel claim by petitioning the appellate court for a writ of habeas corpus, we expressly overrule any language in Flores that might sanction a contrary procedure.

Evans, 273 Wis. 2d 192, ¶ 39 (alteration in original; citations and footnote omitted). We find this language particularly telling because the court had already characterized a Wis. Stat. § 974.06 postconviction motion as "essentially the statutory substitute for a petition for writ of habeas corpus." Evans, 273 Wis. 2d 192, ¶ 32. We do not see how it could be proper for a defendant to pursue habeas relief in the circuit court on an ineffective assistance of appellate counsel claim when Evans expressly precludes him or her from pursuing a procedure that the court characterized as its "statutory equivalent." See id,., ¶ 34.

¶ 6. Although we affirm the circuit court's order dismissing Santana's petition, we emphasize that he remains free to pursue the proper procedure by filing a Knight petition in this court. The circuit court did not say whether it intended to dismiss with or without prejudice. We will construe the order as a dismissal without prejudice. First, we infer that this is the result the court intended. The order dismissed Santana's motion because he had "not taken advantage of his appellate rights or postconviction remedies available to him." Thus, it seemed to assume that other remedies remained available. Second, Santana's failure to file his petition in the right forum is a procedural defect that he can easily cure by submitting a new petition to this court. Cf. State ex rel. Schatz v. McCaughtry, 2003 WI 80, ¶ 36, 263 Wis. 2d 83, 664 N.W.2d 596 ("Generally, when a dismissal for failure to state a claim does not specify whether it is with or without prejudice and the defects in the dismissed complaint can be cured by a subsequent complaint, the dismissal should not be treated as a bar to the filing of the subsequent complaint.").

¶ 7. Having acknowledged that Santana still has the option of a Knight petition, we note that he has also brought several other claims of error. Thus, we think it appropriate to say a few words about the proper procedural mechanisms for pursuing his various claims. We underscore the nature and significance of the Knight petition as a habeas petition addressing the actions of appellate counsel before this court. See State v. Knight, 168 Wis. 2d 509, 520-22, 484 N.W.2d 540 (1992). Nothing in Knight indicates that the court contemplated the use of this procedure to encompass claims of trial error that do not concern actions before this court. Thus, we cannot entertain his other claims in a Knight petition.

¶ 8. Santana does, however, have other procedural avenues available. First, if he succeeds on his Knight petition, we will reinstate his direct appeal rights, and he can pursue an appeal on those claims:

[I]f a defendant files a Knight petition and it is determined that his appellate counsel was deficient, his direct appeal rights may be reinstated. Thus, a defendant's right to appeal will not be extinguished; on the contrary, a Knight petition provides the appropriate vehicle to determine if counsel was deficient so that a defendant's direct appeal rights can be reinstated.

Evans, 273 Wis. 2d 192, ¶ 59 n.21. If Santana does not prevail on his Knight petition (or if he chooses not to file one), he may still bring a motion for postconviction relief pursuant to Wis. Stat. § 974.06. See § 974.06(1); Evans, 273 Wis. 2d 192, ¶ 32. This second option, however, is limited to constitutional and jurisdictional claims and cannot be used to raise challenges related to sufficiency of the evidence, jury instructions, eviden-tiary rulings, or procedural matters. Evans, 273 Wis. 2d 192, ¶ 33.

¶ 9. As for what does belong in the Knight petition, we observe that the procedures in Wis. Stat. Rule 809.51 apply. The petition should contain a statement of the issues and facts of controversy, the relief sought, and reasons why we should take jurisdiction. See Rule 809.51(l)(a)-(d); Smalley, 211 Wis. 2d 795 & n.7. The statement of facts should identify precisely what counsel did or failed to do. We note that the issue of waiver will also probably arise. The State has posited that Santana waived his right to bring a loss-of-direct-appeal claim by waiting seven and one-half years to seek relief. Habeas relief is an equitable remedy subject to the doctrine of laches. Smalley, 211 Wis. 2d at 800. Santana should be prepared to address the State's claim and to provide a factual basis for his delay. See id. at 802 (petition must allege facts demonstrating that the defendant sought prompt and speedy relief).

¶ 10. Additionally, the petition must comply with the requirements of Wis. Stat. § 782.04. This statute states, in pertinent part:

Such petition must be verified and must state in substance:
(1) That the person in whose behalf the writ is applied for is restrained of personal liberty, the person by whom imprisoned and the place where, naming both parties, if their names are known, or describing them if they are not.
(2) That such person is not imprisoned by virtue of any judgment, order or execution specified in s. 782.02.
(3) The cause or pretense of such imprisonment according to the best of petitioner's knowledge and belief.
(4) If the imprisonment is by virtue of any order or process a copy thereof must be annexed, or it must be averred that, by reason of such prisoner being removed or concealed a demand of such copy could not be made or that such demand was made and a fee of $1 therefor tendered to the person having such prisoner in custody, and that such copy was refused.
(5) In what the illegality of the imprisonment consists.

¶ 11. We wish in particular to emphasize the verification requirement, which many prisoners overlook. Verification entails signing the document in the presence of a notary public. See Kellner v. Christian, 197 Wis. 2d 183, 188-89, 539 N.W.2d 685 (1995). The verification requirement assures "that the statements contained therein are presented with some regard to considerations of truthfulness, accuracy and good faith," and petitions not properly verified do not meet the requirements for a valid application. Maier v. Byrnes, 121 Wis. 2d 258, 262-63, 358 N.W.2d 833 (Ct. App. 1984).

¶ 12. We affirm. Santana had the right idea when he sought a writ of habeas corpus, but he started in the wrong place. He should have brought a Knight petition to this court to get his direct appeal rights reinstated. Because the dismissal of his petition is without prejudice, he still has the option of doing so. If he is not successful or chooses to forego a Knight petition, he may still seek postconviction relief pursuant to Wis. Stat. § 974.06 on other constitutional claims.

By the Court. — Order affirmed.

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

       See State v. Knight, 168 Wis. 2d 509, 484 N.W.2d 540 (1992).

       We note that the supreme court has a pending case, State ex rel. Coleman v. McCaughtry, No. 2004AP548-W where the issue has been described as: "Did the court of appeals violate due process by applying the doctrine of laches to the petitioner's habeas corpus petition without an evidentiary hearing, where material issues of fact remain in dispute and the record is inconclusive regarding the unreasonableness of delay and the prejudice caused to the State?"


author: ANDERSON, J.

text:
    State of Wisconsin, Plaintiff-Respondent, v. Gary A. Johnson, Defendant-Appellant.
    Court of Appeals

      No. 2005AP573-CR.

      Submitted on briefs October 14, 2005.

      —Decided December 14, 2005.

    2006 WI App 15
    (Also reported in 709 N.W.2d 491.)

      On behalf of the defendant-appellant, the cause was submitted on the briefs of Eileen A. Hirsch, assistant state public defender, Madison.

      On behalf of the plaintiff-respondent, the cause was submitted on the brief of Mark A. Neuser, assistant attorney general, and Peggy A. Lautenschlager, attorney general.
    Before Snyder, EJ., Brown and Anderson, JJ.

       Petition to review granted 4-11-06.

   ANDERSON, J.

¶ 1. Following the denial of his motion to suppress, Gary A. Johnson pled no contest to possession of cocaine with intent to deliver in violation of Wis. Stat. § 961.41(lm)(cm)lr (2003-04). On appeal, Johnson argues that the protective search of his vehicle following a routine traffic stop was unlawful because the record does not establish a sufficient specific and articulable basis for an objectively reasonable belief that he was armed and dangerous. We agree and reverse the judgment of conviction and remand for proceedings consistent with this opinion.

Facts

¶ 2. During the late afternoon on November 5, 2003, two city of Racine police officers, Michael Dum-mer and Chad Stillman, spotted a vehicle that had an emissions suspension. Dummer noted the driver of the vehicle, Johnson, also failed to signal a turn. The officers followed the vehicle and within a minute stopped the vehicle.

¶ 3. It was dark when the stop occurred, but streetlights illuminated the inside of the vehicle. Dum-mer observed Johnson "lean forward" and "his head go lower and come back up." While he could not see Johnson's hands, Dummer stated that Johnson appeared to be reaching underneath his front seat. Dum-mer commented that he observed no other "suspicious movements." Stillman testified that he saw "the driver of the vehicle make a strong furtive movement bending down as if he was reaching for underneath the seat that he was sitting at." Both officers testified that, in their experience, Johnson's activity was consistent with efforts to try and conceal contraband or weapons in the course of a traffic stop. At some point, the officers also noticed that there was a passenger in the car.

¶ 4. Stillman approached the driver's side door and told Johnson that he had been stopped "for emissions suspension." Johnson apparently showed Stillman "adequate paperwork" indicating that the vehicle had passed emissions within the previous couple of days. Stillman then asked Johnson to step out of the vehicle "due to the furtive movement that [he] had seen upon stopping the vehicle." Dummer testified:

It was just for officer safety, not knowing what maybe he had been reaching for to either grab or to put down thinking it could possibly be a weapon that could injure us. We had him exit from the vehicle so we could see Mr. Johnson's movements, hands, anything on his possession at that time.

Neither of the officers had previous contact with Johnson.

¶ 5. Stillman directed Johnson to the back of the vehicle and Johnson complied. Johnson informed the officers that he had a "bad leg" or a "broken leg." Stillman advised Johnson that he would pat him down for weapons. Johnson did not object. When Stillman patted down his left leg, Johnson fell to the ground, complaining of leg pain. The officers helped him back up. When Stillman resumed the pat down of his left leg, Johnson again fell to the ground. The officers helped him over to the curb and had him sit down, hoping that would ease his leg pain. Dummer testified that during this time, Johnson was "a little upset," but cooperative and did not make any threats. With Johnson seated on the curb, the passenger was asked to step out of the vehicle. He, too, was frisked for weapons.

¶ 6. Stillman asked Johnson if there was anything illegal in the car. Johnson said no. Stillman advised Johnson that he was going to search the vehicle, and Johnson did not object. Stillman looked under the driver's seat and found a clear plastic baggie containing marijuana. The officers arrested Johnson and searched him. The officers found cocaine in Johnson's pocket.

¶ 7. The State charged Johnson with one count of possession of cocaine with intent to deliver and one count of possession of marijuana. Johnson filed a motion to suppress evidence seized from his vehicle. After a hearing on the matter at which the officers recited the facts articulated above, the court issued a written decision denying Johnson's motion. The court did not discuss whether the officers were justified in conducting a protective search of Johnson's vehicle, instead finding that the officers had "obtained Johnson's consent to search the vehicle."

¶ 8. Subsequently, Johnson pled no contest to a charge of possession of cocaine with intent to deliver and the marijuana charge was dismissed and read in. Johnson appeals from the judgment of conviction.

Discussion

¶ 9. Both parties agree for purposes of this appeal that the officers' initial stop of Johnson was proper pursuant to Wis. Stat. § 968.24 and Terry v. Ohio, 392 U.S. 1 (1968). The State concedes that Johnson did not consent to the protective search of his vehicle. Our inquiry focuses on whether the totality of the circumstances supports the conclusion that Stillman had reasonable suspicion to justify the protective search for weapons in Johnson's vehicle.

¶ 10. Whether there is reasonable suspicion that justifies a warrantless search implicates the constitutional protections against unreasonable searches and seizures contained in the Fourth Amendment of the United States Constitution and article I, section 11 of the Wisconsin Constitution. State v. Williams, 2001 WI 21, ¶ 18, 241 Wis. 2d 631, 623 N.W.2d 106. "Accordingly, the determination of reasonable suspicion for an investigatory stop and subsequent protective search is a question of constitutional fact." Id. "We apply a two-step standard of review to questions of constitutional fact. First, we review the circuit court's findings of historical fact, and uphold them unless they are clearly erroneous. Second, we review the determination of reasonable suspicion de novo." Id. (citation omitted).

¶ 11. The controlling principles of constitutional law applicable to the "reasonable suspicion" standard of a protective search for weapons are firmly established and neither party challenges these principles. Rather, the parties disagree over whether the facts satisfy the constitutional standard of "reasonable suspicion." We therefore begin with a recitation of the fundamental principles and then apply them to the facts at hand.

¶ 12. In Terry, the United States Supreme Court explained that:

[T]here must be a narrowly drawn authority to permit a reasonable search for weapons for the protection of the police officer, where he [or she] has reason to believe that he [or she] is dealing with an armed and dangerous individual, regardless of whether he [or she] has probable cause to arrest the individual for a crime. The officer need not be absolutely certain that the individual is armed; the issue is whether a reasonably prudent [person] in the circumstances would be warranted in the belief that his [or her] safety or that of others was in danger. And in determining whether the officer acted reasonably in such circumstances, due weight must be given, not to his [or her] inchoate and unparticularized suspicion or "hunch," but to the specific reasonable inferences which he [or she] is entitled to draw from the facts in light of his [or her] experience.

Terry, 392 U.S. at 27 (citations and footnote omitted). Thus, "[t]he reasonableness of a protective search for weapons is an objective standard, that is, 'whether a reasonably prudent [person] in the circumstances would be warranted in the belief that his [or her] safety and that of others was in danger' because the individual may be armed with a weapon and dangerous." See State v. Kyles, 2004 WI 15, ¶ 10, 269 Wis. 2d 1, 675 N.W.2d 449 (footnote omitted). Courts are to decide on a case-by-case basis, evaluating the totality of the circumstances, whether an officer had reasonable suspicion to effectuate a protective search for weapons in a particular case. See id., ¶ 49.

¶ 13. Both the United States Supreme Court and the Wisconsin Supreme Court have expanded the scope of a search for weapons during a Terry vehicle stop to include a search of the passenger compartment of the vehicle. In Michigan v. Long, 463 U.S. 1032, 1049 (1983), the United States Supreme Court held that:

[T]he search of the passenger compartment of an automobile, limited to those areas in which a weapon may be placed or hidden, is permissible if the police officer possesses a reasonable belief based on "specific and articulable facts which, taken together with the rational inferences from those facts, reasonably warrant" the officer[] in believing that the suspect is dangerous and the suspect may gain immediate control of weapons.

In extending the principle of Terry to the search of areas accessible to the person stopped, the Court recognized that "roadside encounters between police and suspects are especially hazardous, and that danger may arise from the possible presence of weapons in the area surrounding a suspect." Long, 463 U.S. at 1049. The Court noted that the justification for a protective search of a vehicle remains even if police have removed the suspect from the vehicle and have the suspect in their control. See id. at 1051-52. In such situations, a suspect could still be able to "break away from police control and retrieve a weapon from his [or her] automobile," or if the suspect is not ultimately arrested, he or she "will be permitted to reenter his [or her] automobile, and he [or she] will then have access to any weapons inside." Id.

¶ 14. In State v. Moretto, 144 Wis. 2d 171, 182, 423 N.W.2d 841 (1988), our supreme court held that the result reached in Long would be the same under state law. The court held that

the scope of a search for weapons under [Wis. Stat. § 968.25] is not limited to the search of the person but may, in accordance with Long, encompass the search of the passenger compartment of the person's vehicle where the officer "reasonably suspects that he [or she] or another is in danger of physical injury."

Moretto, 144 Wis. 2d at 177-78.

¶ 15. Here, the State emphasizes two key factors as supporting the conclusion that Stillman had reasonable suspicion to justify the protective search of Johnson's vehicle: Johnson's "furtive" movement of leaning forward in the car and his fading down while Stillman conducted a pat down of his person. As the State points out, the officers both testified that in their experience such movements may be connected with attempts to conceal contraband or weapons.

¶ 16. Suspicious gestures are certainly important factors to consider in determining whether a protective search of a vehicle was reasonable. We are also to give due weight to the "specific reasonable inferences which [an officer] is entitled to draw from the facts in light of his [or her] experience." Terry, 392 U.S. at 27. Further, in some cases, "furtive" movements or gestures by a motorist may ripen into an objectively reasonable suspicion that the person may be armed and dangerous. See, e.g., Williams, 241 Wis. 2d 631, ¶¶ 51-55, (protective search justified where the driver reached behind passenger front seat upon seeing the officers and the police detained occupants of the vehicle in response to anonymous tip of drug dealing); United States v. Evans, 994 F.2d 317, 322 (7th Cir. 1993) (protective search lawful given the defendant's manner of driving when initially observed, furtive gesture and act of voluntarily stopping in front of a reported drug house and the location of the encounter in a high crime neighborhood); United States v. Fryer, 974 F.2d 813, 817, 819 (7th Cir. 1992) (movements between the driver and passenger during a traffic stop "in the wee hours of the morning" in a "marginally safe" neighborhood where gangs were active justified search of car); United States v. Cochran, 939 F.2d 337, 338-39 (6th Cir. 1991) (when officers stopped the driver, a known felon believed to always carry a firearm, to execute a search warrant at the driver's residence, the rapid movement of the driver's right arm justified protective search); United States v. Nash, 876 F.2d 1359, 1361 (7th Cir. 1989) (the combined facts of the driver's furtive gesture and the presence of a jacket covering the area where driver made the gesture justified the protective search); see generally Jeffrey F. Ghent, Annotation, Search and Seizure: 'Furtive" Movement or Gesture As Justifying Police Search, 45 A.L.R.3d 581 (1972-2005) (compilation of cases examining protective searches based on "furtive" movements).

¶ 17. However, "furtive" or suspicious movements do not automatically give rise to an objectively reasonable suspicion that the occupant of the vehicle is armed and dangerous. See, e.g., Kyles, 269 Wis. 2d 1, ¶¶ 48-50 (refusing to adopt per se rules that if certain facts are present — such as "hands in pockets" — reasonable suspicion exists as a matter of law). We must consider such movements in light of the totality of the circumstances. See id., ¶ 49 (reasonable suspicion to be determined on a case-by-case basis, under the totality of the circumstances of the individual case).

¶ 18. We conclude that the two key factors the State emphasizes, Johnson's "furtive" movement in the car and his falling down during the pat down of his person, when considered under the totality of the circumstances, were not sufficient to create an objectively reasonable suspicion that Johnson harbored a weapon and presented a threat to the safety of the officers. The officers pulled Johnson over for traffic violations — an emissions suspension, perhaps, a turn without a signal — and not for a crime. In response, Johnson produced documentation that the vehicle had passed the emissions test. The officers had no prior contacts with Johnson that would suggest that he would be armed or otherwise dangerous. While it was dark out when the officers conducted the stop, it was only late afternoon and the streetlights provided adequate illumination of the vehicle. Also, the State does not argue that the location of the stop was a high crime area. While Johnson did fall down when Stillman frisked him, the record does not demonstrate that the officers considered this suspicious. Johnson claimed this was due to a "bad leg" and the officers accommodated him by having him sit on the curb. Further, although Johnson was "upset" during the stop, he made no other suspicious movements in the car and was otherwise cooperative and complied with the officers' directions.

¶ 19. Because we conclude, after objectively assessing the totality of the circumstances, that the record does not establish a sufficient specific and ar-ticulable basis for an objectively reasonable belief that Johnson was armed and dangerous, we also hold that the protective search of Johnson's vehicle was unlawful. Accordingly, we reverse Johnson's conviction and remand for proceedings consistent with this opinion.

By the Court. — Judgment reversed and cause remanded.

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

       The State also highlights Johnson's counsel's statement at the motion hearing that "I agree that the testimony of the officers gave them a reasonable suspicion to pat down Mr. Johnson for their own safety, basically a Terry pat down, but I don't believe, your Honor, that decision allows a search of the vehicle." The State then argues, "Johnson presents no meaningful explanation as to why the police's reasonable suspicion suddenly evaporated after they patted him down." However, Johnson's counsel's alleged concession that the protective search of Johnson's person was constitutional is a question of law we are not bound to accept on this appeal. See State v. Gomaz, 141 Wis. 2d 302, 307, 414 N.W.2d 626 (1987). The initial protective search of Johnson's person did not turn up any weapons or other contraband. It makes sense then for Johnson's counsel to ground the suppression argument on the protective search of Johnson's vehicle and not Johnson's person. We therefore will review the constitutionality of the protective search of Johnson's vehicle independent of Johnson's counsel's statement.


author: SNYDER, PJ.

text:
    Factory Mutual Insurance Company, Plaintiff-Appellant, v. Citizens Insurance Company of America, Defendant-Respondent.
    Court of Appeals

      No. 2005AP872.

      Submitted on briefs October 14, 2005.

      —Decided December 14, 2005.

    2006 WI App 16
    (Also reported in 709 N.W.2d 82.)

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Daniel A. MacDonald of Mohs, MacDonald, Widder & Paradise, Madison.
    On behalf of the defendant-respondent, the cause was submitted on the brief of Heather L. Nelson of Law Offices of Loretta M. Griffin, Chicago, Illinois.
    Before Snyder, PJ., Brown and Anderson, JJ.
   SNYDER, PJ.

¶ 1. Factory Mutual Insurance Company appeals from an order granting summary judgment in favor of Citizens Insurance Company of America. Factory Mutual contends that the circuit court erred in holding that the contractual waiver of subrogation agreed upon by the parties' policyholders is enforceable under the circumstances presented here; moreover, Factory Mutual contends that public policy dictates a different conclusion than that reached by the circuit court. We disagree and affirm the order of the circuit court.

FACTS AND PROCEDURAL BACKGROUND

¶ 2. The parties submitted stipulated facts and supplementary affidavits in support of their competing motions for summary judgment. The undisputed facts are as follows. In June 2001, International Truck and Engine Corporation and CSI Industrial Systems Corporation entered into a contract whereby CSI would participate in the renovation of an existing molding line system at International's manufacturing facility. The contract required both parties to carry comprehensive general liability insurance, along with all risk property damage and other coverage. The contract further directed that:

All insurance policies shall name the other party to this Contract and its successors and assigns as additional insured. Such insurance shall be primary to any insurance otherwise owned by either party or its successors and assigns.
Each party shall cause its insurance underwriters to waive their rights of subrogation against the other party and its respective contractors and subcontractors.

¶ 3. The contract also contained a severability clause, which stated:

Should any part of this Contract be declared invalid by a court of law or arbitration, such decision shall not affect the validity of any remaining portion, which shall remain in full force and effect as if the invalid portion were never a part of this Contract when it was executed. Should the severance of any such part of this Contract materially affect any other rights or obligations of the Parties hereunder, the Parties will negotiate in good faith to amend this Contract in a mutually satisfactory manner.

¶ 4. In January 2002, while CSI was still performing work at International, a fire broke out on the premises. Neither party disputes that the fire originated while two workers, working on behalf of CSI, were welding an air scrubber unit. The fire spread from the air scrubber to various other places in the International facility, damaging the molding line system as well as surrounding equipment and the building itself.

¶ 5. At the time of the fire, Citizens was CSI's general liability insurer and had also issued installation floater coverage to CSI. The Citizens policy did not list International on its schedule of locations, additional interest declaration pages, or as a loss payee. The installation floater provided coverage in the amount of $500,000 for "any one installation site" and contained an eighty percent coinsurance provision.

¶ 6. Following the fire, CSI filed a first-party claim with Citizens for the sum of $176,828.26. Using the coinsurance calculation dictated by the floater coverage, Citizens paid CSI approximately $9900, plus costs for debris removal. Citizens never made any payments directly to International.

¶ 7. As of January 10, 2002, the date of the fire, International had paid CSI all but approximately $716,000 on the $14,393,903 contract between the parties. CSI walked off the job permanently on or about June 7, 2002. As a result, International paid over $1,400,000 in mechanic's liens filed by CSI contractors, along with the costs of replacing or repairing equipment lost or damaged in the fire. International estimates that it paid in excess of an additional $4,300,000 than it would have paid CSI under the terms of the contract.

¶ 8. International's buildings and property were insured against loss or damage by Factory Mutual. As a result of the fire, International submitted a first-party claim to Factory Mutual for $401,408.91. Factory Mutual paid $301,408.91 and International assumed liability for its deductible of $100,000. The Factory Mutual policy contained a subrogation clause that read in relevant part:

The Insured is required to cooperate in any subrogation proceedings. The Company [Factory Mutual] may require from the Insured an assignment or other transfer of all rights of recovery against any party for loss to the extent of the Company's payment.
The Company will not acquire any rights of recovery that the Insured has expressly waived prior to a loss, nor will such waiver affect the Insured's rights under this Policy.

¶ 9. Factory Mutual and International brought suit against Citizens, CSI's insurer, alleging negligence on the part of CSI. International's claim was settled and dismissed on August 10, 2004. Subsequently, Citizens and Factory Mutual filed cross-motions for summary judgment. Following a motion hearing, the circuit court granted summary judgment in favor of Citizens. Factory Mutual appeals.

DISCUSSION

¶ 10. We review summary judgment de novo, applying the same method as the circuit court. Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315, 401 N.W.2d 816 (1987). Summary judgment is appropriate when there is no material factual dispute and the moving party is entitled to judgment as a matter of law. Germanotta v. National Indem. Co., 119 Wis. 2d 293, 296, 349 N.W.2d 733 (Ct. App. 1984). Summary judgment methodology is well established and need not be repeated here. See, e.g., Lambrecht v. Estate of Kacz-marczyk, 2001 WI 25, ¶¶ 20-24, 241 Wis. 2d 804, 623 N.W.2d 751. Furthermore, the interpretation of a contract is a question of law that this court reviews de novo. Deminsky v. Arlington Plastics Mach., 2003 WI 15, ¶ 15, 259 Wis. 2d 587, 657 N.W.2d 411. The issue of whether coverage exists is a question of law. Richland Valley Prods., Inc. v. St. Paul Fire & Cas. Co., 201 Wis. 2d 161, 164, 548 N.W.2d 127 (Ct. App. 1996).

¶ 11. Two preliminary considerations can be quickly addressed. First, there is no dispute that a party to a contract may waive subrogation explicitly in writing. See Jindra v. Diederich Flooring, 181 Wis. 2d 579, 596, 511 N.W.2d 855 (1994). Second, Factory Mutual's policy language does not preserve "any rights of recovery" which are "expressly waived" by an insured prior to a loss; therefore, International had the ability to waive subrogation in the contract with CSI. Cf. Kulekowskis v. Bankers Life & Cas. Co., 209 Wis. 2d 324, 333, 563 N.W.2d 533 (Ct. App. 1997) (citation omitted) (a policy that "functionally recites" the preservation of subrogation rights will prevail over subrogation exclusion language in a conflicting contract). As a result, Factory Mutual must demonstrate that it is otherwise entitled to assert its subrogation claim. A party seeking to apply subrogation has the burden of proving the right to subrogation. Jindra, 181 Wis. 2d at 595.

¶ 12. We turn then to Factory Mutual's argument that Citizens cannot enforce the subrogation waiver because CSI materially breached the contract when it (1) failed to obtain the required insurance coverages and (2) walked off the job prior to completion of the project. Factory Mutual directs us to Ranes v. American Family Mutual Insurance Co., 219 Wis. 2d 49, 57, 580 N.W.2d 197 (1998), for the proposition that "[u]nder Wisconsin common law, a party to a contract is obligated to perform in accordance with the contract terms unless the other party's breach is material." Factory Mutual's argument presupposes a material breach of contract by CSI. It directs us to Ranes for the proposition that a breach is material when it destroys "the essential object of the agreement." See id. Factory Mutual asserts, among other things, that risk allocation was a principal goal of the contract and "CSI's failure to have adequate all risk insurance was material because it violated the risk allocation plan between the parties."

¶ 13. Factory Mutual relies on Liberty Mutual Insurance Co. v. Perfect Knowledge, Inc., 752 N.Y.S.2d 677 (App. Div. 2002), for support. There, Perfect Knowledge hired a contractor to install a new air conditioning unit and, during the installation, a fire broke out due to a contractor's negligence. Id. at 678. Liberty Mutual insured the owner of the building where Perfect Knowledge was a tenant. Id. Under the terms of its lease, Perfect Knowledge was to carry $3,000,000 in liability coverage and any contractors it hired were to carry liability coverage. Id. at 678-79. The lease also included a subrogation waiver. Id. at 678. Perfect Knowledge violated the insurance coverage provisions of the lease. Id. at 678-79. With regard to enforceability of the subrogation waiver, the court there concluded:

Such an agreement is necessarily premised on the procurement of insurance by the parties. Here, however, Perfect Knowledge breached certain provisions of the lease with respect to the procurement of insurance .... Without the procurement of insurance, the shifting envisioned under the agreement could not take place, and the agreement was frustrated. Therefore, Perfect Knowledge is not entitled to enforcement of the waiver provisions of the lease.

Id. Factory Mutual asks us to adopt the Liberty Mutual court's reasoning.

¶ 14. Factory Mutual also cites to Continental Casualty Co. v. Homontowski, 181 Wis. 2d 129, 510 N.W.2d 743 (Ct. App. 1993), for support. Continental insured CFM Building Partnership and the policy included the following provision: "If any person ... to or for whom we make payment under this insurance has rights to recover damages from another, those rights are transferred to us. That person ... must do nothing after 'loss' to impair [our rights]." Id. at 131. CFM hired a salvage company to perform demolition work in the CFM building and entered into a contract that included a waiver of subrogation. Id. at 131-32. During the course of the demolition, the salvage company's negligence caused a fire that damaged CFM's property. Id. at 132. Continental sued the salvage company, arguing that the subrogation waiver was unenforceable because such a waiver without the knowledge and consent of the insurer is void as a matter of law. Id. at 134. We concluded that Continental's policy did not prevent CFM from waiving its subrogation rights prior to the loss, and therefore Continental had no right to pursue recovery from the salvage company. Id. at 135.

¶ 15. Factory Mutual relies on Continental for the proposition that an insurer can pursue a subrogation claim against a tortfeasor if its insured has the right to recover against the tortfeasor. See id. Here, Factory Mutual asserts, International has the right to recover against CSI because it is no longer bound by the terms of the materially breached contract; therefore, Factory Mutual has the right to pursue CSI or Citizens.

¶ 16. Citizens argues that Factory Mutual's reliance on both Liberty Mutual and Continental is misplaced. In Liberty Mutual, the fundamental distinction is a procedural one: Liberty Mutual asserted its cause of action in negligence and breach of contract against the tortfeasor. See Liberty Mutual, 299 A.D.2d at 525. We agree that this distinguishes Liberty Mutual from the current case and defeats Factory Mutual's attempted analogy. Here, no breach of contract action has ever been filed; no breach, material or otherwise, has been established. As the circuit court observed, there may be a "breach of contract action here regarding the allocation of risk, but it's not in this lawsuit." We agree.

¶ 17. Citizens also emphasizes that the Continental court enforced the insured's contractual waiver of subrogation. Citizens points to Factory Mutual's own policy language, which states that Factory Mutual "will not acquire any rights of recovery that the Insured has expressly waived prior to a loss ... ." (Emphasis added.) Here, that is precisely what happened. International waived subrogation prior to the loss caused by the January 10, 2002 fire. As we concluded in Continental, we have no right to relieve an insurer from the consequences of its own disadvantageous terms. See Continental, 181 Wis. 2d at 135.

¶ 18. In the alternative, Factory Mutual argues that public policy considerations support its right to bring a subrogation claim against Citizens. It summarizes: "If the Court bars subrogation, then Factory Mutual will absorb the loss [to International's property] under its all risk property coverage issued to International.... If the Court allows subrogation to proceed, then Citizens will absorb the loss under its Commercial General Liability Policy issued to CSI. . .." Factory Mutual continues, "So far as the two insurance companies are concerned, neither insurance company has a more or less equitable position than the other." Further, Factory Mutual concedes:

Factory Mutual was not harmed by CSI's failure to have adequate insurance to cover the fire loss because Factory Mutual did not pay for the loss of CSI's equipment. It did not pay this loss because International did not have an insurable interest in such equipment, or bear the risk of loss for such equipment. Factory Mutual also was not harmed by CSI ultimately abandoning the Contract, since that was not a covered event.

However, Factory Mutual contends that the equities between International and CSI must be examined because each insurer "stands in the shoes" of its insured. In an attempt to demonstrate the inequities, Factory Mutual emphasizes that "CSI's abandonment of the project cost International $4,300,000 more than it would have paid CSI, had CSI fully performed the Contract."

¶ 19. We reject Factory Mutual's assessment of the equities for three reasons. First, the correct statement of the law is that the subrogee stands in the shoes of its subrogor. Wilmot v. Racine County, 136 Wis. 2d 57, 63, 400 N.W.2d 917 (1987). This relationship is not synonymous with every insurer-insured relationship; moreover, International waived subrogation in the contract with CSI. Second, Factory Mutual's reference to the $4,300,000 cost to International is irrelevant to the subrogation recovery of approximately $301,400 it is pursuing against Citizens. We are not persuaded by the inflated characterization of damages in Factory Mutual's public policy rhetoric. Finally, Factory Mutual provides no legal authority for its distribution of the equities among the parties and nonparties to this lawsuit. An assertion that is made without citation to legal authority need not be addressed. Hoffman v. Economy Preferred Ins. Co., 2000 WI App 22, ¶ 9, 232 Wis. 2d 53, 606 N.W.2d 590 (Ct. App. 1999).

CONCLUSION

¶ 20. We conclude that the subrogation waiver between International and CSI is enforceable. The waiver precludes Factory Mutual from pursuing Citizens or CSI for subrogation of amounts paid to International for property damage caused by CSI's alleged negligence. We further conclude that Factory Mutual has not demonstrated any public policy requiring us to distribute the loss among the parties and nonparties to this action. Here, two sophisticated commercial entities, International and CSI, negotiated the allocation of risk. We take no position on whether CSI materially breached the contract and, if so, what impact that has on the subrogation waiver because no breach of contract claim has been pled in this case. Accordingly, we affirm the circuit court's order granting summary judgment to Citizens.

By the Court. — Order affirmed.

       Wisconsin's direct action statute provides that insurance companies may be sued directly in actions "for damages caused by negligence." Wis. Stat. § 803.04(2)(a) (2003-04).

       Factory Mutual also argues that the severability clause of the contract should not be invoked to preserve the subrogation waiver. Factory Mutual explains, "Since the Contract was materially breached by CSI, neither CSI nor a party who 'stands in the shoes' of CSI ought to be able to enforce any term or condition of the Contract, after the breach, which of course, includes the subrogation term." The severability question will only arise if any part of the contract is declared invalid. No such declaration has yet been pursued or obtained.