author: KESSLER, J.

text:
    City of Milwaukee, a municipal corporation, Plaintiff-Appellant, v. NL Industries, Inc., a foreign corporation, and Mautz Paint, a Wisconsin corporation, Defendants-Respondents.

    Court of Appeals

      No. 03-2786.

      Oral argument September 27, 2004.

    Decided November 9, 2004.

    2005 WI App 7
    (Also reported in 691 N.W.2d 888.)

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Ted M. Warshafsky of War-shafsky Rotter Tarnoff Reinhardt & Bloch, S.C. of Milwaukee and Richard S. Lewis and James J. Pizzi-

      russo of Cohen Milstein Hausfeld & Toll, PLLC of Washington, D.C. There was oral argument by Richard S. Lewis.

    On behalf of the defendants-respondents, the cause was submitted on the joint brief of James T Murray, Jr. and Michael J. Wirth oí, Peterson, Johnson & Murray, S.C. of Milwaukee, Timothy S. Hardy of Denver, Colorado, Elizabeth L. Thompson and Jennifer Heisinger of Bartlit Beck Herman Palenchar & Scott LLP of Chicago, Illinois for NL Industries, Inc. and Frank J. Daily and Jeffrey K. Spoerk of Quarles & Brady LLP of Milwaukee and Charles H. Moellenberg, Jr. and Jennifer B. Flannery of Jones Day of Pittsburgh, Pennsylvania for Mautz Paint. There was oral argument by James T. Murray, Jr. and Frank J. Daily.

    Before Fine, Curley and Kessler, JJ.

       Petition to review filed.

   KESSLER, J.

¶ 1. The City of Milwaukee appeals from a judgment and an order dismissing its complaint against NL Industries, Inc., and Mautz Paint (collectively, "defendants"). The trial court dismissed the City's claim for public nuisance, concluding that the City could not show that these particular defendants caused their lead-based paint to be applied to any of the specific buildings included in the alleged public nuisance. The court also dismissed the claims of restitution and conspiracy, concluding that these claims are tied to the public nuisance claim. We conclude that genuine issues of material fact preclude summary judgment in defendants' favor. Therefore, we reverse the judgment and the order and remand for trial.

BACKGROUND

¶ 2. According to the City's complaint, childhood lead paint poisoning is a severe public health problem in Milwaukee. The City alleged that one in five Milwaukee children tested in 1998 showed blood lead levels at or above the Centers for Disease Control threshold for lead poisoning. According to the City, "[t]his extraordinary incidence of childhood lead paint poisoning is linked to Milwaukee's old housing stock." Specifically, the City alleged that childhood lead paint poisoning is caused when children ingest lead-based paint dust and chips.

¶ 3. The alleged main source of this dust and chips is lead-based paint on old wood windows in homes in which children live. The complaint states: "Windows are exposed to weather that causes the paint on them to peel, crack, or chalk, and are subject to friction when they are opened and closed, all of which generates lead dust." In response to the problem of childhood lead poisoning, the City has undertaken a window abatement program in two target areas of the city. The complaint estimated that the potential cost of this abatement program could exceed one hundred million dollars.

¶ 4. The City asserts that defendants are responsible for these damages because their conduct in marketing and selling substantial quantities of lead pigments and/or lead-based paint in the City of Milwaukee during and after the construction of these dwellings, when they knew the hazards of lead poisoning related to their product, was a substantial factor creating the public nuisance at issue in this case.

¶ 5. The City asks that defendants pay the costs associated with the City's abatement program. Specifically, the suit seeks: (1) compensatory and equitable relief for abatement of the toxic lead hazards in Milwaukee homes, especially in the target areas; (2) restitution for amounts expended by the City to abate the toxic lead hazards in Milwaukee homes, especially in the target areas; and (3) punitive damages. The theories of liability are: public nuisance, conspiracy and restitution.

¶ 6. After the parties completed significant discovery, defendants moved for summary judgment. The trial court granted the motion. It dismissed the public nuisance claim because it concluded that the City could not prove causation, i.e., that these particular defendants were a cause of the alleged damage. The trial court dismissed the conspiracy claim because it concluded there was no underlying tort upon which a conspiracy could be based. Finally, the trial court dismissed the restitution claim because it held that the inability to prove that defendants were a cause of the nuisance meant they could not be responsible for paying for the abatement. This appeal followed.

DISCUSSION

¶ 7. This appeal involves issues decided pursuant to summary judgment. We review the grant of summary judgment de novo, applying the same standard as the circuit court. Firstar Trust Co. v. First Nat'l Bank of Kenosha, 197 Wis. 2d 484, 492, 541 N.W.2d 467 (1995). "[S]ummary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law." M & I First Nat'l Bank v. Episcopal Homes Mgmt., Inc., 195 Wis. 2d 485, 497, 536 N.W.2d 175 (Ct. App. 1995); see also Wis. Stat. § 802.08(2) (2001-02). We will reverse a decision granting summary judgment if the trial court incorrectly decided legal issues or if material facts are in dispute. Coopman v. State Farm Fire & Cas. Co., 179 Wis. 2d 548, 555, 508 N.W.2d 610 (Ct. App. 1993).

A. Public Nuisance Claim

¶ 8. The City asserts that childhood lead poisoning is a community-wide public nuisance in Milwaukee. "A public nuisance is a condition or activity which substantially or unduly interferes with the use of a public place or with the activities of an entire community." Physicians Plus Ins. Corp. v. Midwest Mut. Ins. Co., 2002 WI 80, ¶ 21, 254 Wis. 2d 77, 646 N.W.2d 777 (citations omitted).

The number of people affected does not strictly define a public nuisance .... Rather, the court considers many factors, including, among others, the nature of the activity, the reasonableness of the use of the property, location of the activity, and the degree or character of the injury inflicted or right impinged upon.

Id. (citing State v. Quality Egg Farm, Inc., 104 Wis. 2d 506, 520, 311 N.W.2d 650 (1981)) (footnote omitted).

¶ 9. The City argues that to prevail on its claim for public nuisance, it must establish that: (1) harm occurred to the public; (2) defendants were a substantial factor in causing the harm; and (3) abatement of the cause of the harm was reasonable. Although numerous Wisconsin cases discuss public nuisance, no single case explicitly lists the elements that must be proven when one is alleged to have created a public nuisance, rather than maintained a public nuisance. Based on our review of these cases, however, we believe that the City is essentially correct.

¶ 10. In Brown v. Milwaukee Terminal Ry. Co., 199 Wis. 575, 224 N.W. 748, on reargument, 199 Wis. 588, 227 N.W. 385 (1929), the court held that the basis for liability in a public nuisance case "is the damage done by or danger inherent in the creation or maintenance of that which constitutes a nuisance." Id. at 589 (emphasis supplied). The court added, "[i]n order to establish liability for a nuisance it must be found that the nuisance was the cause of plaintiffs injuries. The damage that may be recovered in actions based upon nuisance must always be the natural and proximate consequence of the danger created by the nuisance." Id. at 591.

¶ 11. Seventy-three years later, in Physicians Plus, our supreme court discussed what must be established to prove defendants maintained a public nuisance. See id., 254 Wis. 2d 77, ¶¶ 2, 19-32. Relying on Brown, the court held:

[L]iability for maintaining a public nuisance is based on the following elements, plus public policy. First, the existence of the public nuisance itself; second, actual or constructive notice of the public nuisance; and third, that the failure to abate the public nuisance is a cause of the plaintiffs injuries .... We also look to public policy considerations because we conclude that similar to liability for negligence, liability for maintaining a public nuisance can be limited on public policy grounds.

Physicians Plus, 254 Wis. 2d 77, ¶ 2. The court distinguished cases involving the maintenance of a public nuisance from those involving the creation of a public nuisance. Id., ¶ 24 n.19. It noted that cases involving the defendant's creation of the public nuisance do not require proof that the defendant had actual or constructive notice of the hazardous condition that later developed. Id.

¶ 12. Although Physicians Plus dealt with the maintenance of a public nuisance, we conclude that the same legal standards, modified to accommodate the difference between creating and maintaining a public nuisance, should apply. We hold that to establish a claim of creating a public nuisance, a plaintiff must prove that the defendant's conduct was a substantial cause of the existence of a public nuisance and that the nuisance was a substantial factor in causing injury to the public, which injury is the subject of the action. Finally, public policy considerations must also be considered because, similar to liability for negligence, liability for creating a public nuisance can be limited on public policy grounds. See Physicians Plus, 254 Wis. 2d 77, ¶ 2.

¶ 13. For purposes of summary judgment, defendants assume that a public nuisance exists and that the City suffered damages. Defendants assert, however, that "[t]he real question is whether the Circuit Court properly applied Wisconsin causation law to the evidence before it in dismissing the City's claims." They also argue that public policy concerns preclude liability.

1. Causation

¶ 14. With respect to causation, defendants argue that the City must show that defendants' conduct or products were "substantial factors" in causing the injury. To do so, defendants contend, "the City must prove, at a minimum, that NL Industries' pigment or lead paint or Mautz's lead paint is present on windows in Target Area properties and that their conduct somehow caused the paint to become a hazard to children." (Emphasis deleted.)

¶ 15. The City has admitted that, because technology does not make it possible to do so, the City cannot identify the specific lead pigment or paint contained in the houses being abated. The City contends such identification is unnecessary where, as here, it is a community-wide health threat which is the alleged public nuisance, and the City can prove community-wide marketing and sales by defendants in the City of Milwaukee at times relevant to the creation of the nuisance. The City asserts that it

needed to present evidence that could lead a reasonable fact-finder to conclude that Respondents were a substantial factor in contributing to the community-wide, lead-based public nuisance in Milwaukee .... The fact that the City undertook a house-by-house approach to abating the lead hazard is relevant to the reasonableness of abatement and to the amount of damages; it is not relevant to the City's ability to prove Respondents were a substantial factor in contributing to the lead public nuisance in the Milwaukee community.

(Emphasis deleted.) The City maintains that this position is consistent with the fact that public nuisance is focused primarily on harm to the community or the general public, as opposed to individuals who may have suffered specific personal injury or specific property damage. We agree. Were it otherwise, the concept of public nuisance would have no distinction from the theories underlying class action litigation, which serves to provide individual remedies for similar harms to large numbers of identifiable individuals. Here, the allegation at its essence is that defendants sold and promoted a dangerous product to a community and that product caused a serious public health problem in that community. The City, rather than only the sick children, has suffered and sustained an injury. This injury, unlike injury suffered by individuals, is community-wide and affects even those whose health is not compromised by lead-paint poisoning. The City is also the entity most reasonably able to remedy this community-wide injury to public health.

¶ 16. "Causation is a fact; the existence of causation frequently is an inference to be drawn from the circumstances by the trier of fact." Merco Distrib. Corp. v. Commercial Police Alarm Co., Inc., 84 Wis. 2d 455, 459, 267 N.W.2d 652 (1978) (citation omitted). As long as the City can establish genuine issues of material fact with respect to these alleged causes, summary judgment is precluded. See M & I First Nat'l Bank, 195 Wis. 2d at 497 ("[Sjummary judgment is appropriate when there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law.").

¶ 17. We agree with the City that there are genuine issues of material fact with respect to the cause of childhood lead poisoning in Milwaukee. The City's expert, Dr. Bruce E Lanphear, M.D., opined that the source of lead paint exposure for most children is in their home. Dr. Lanphear stated that even in homes where lead-based paint has been painted over with non-lead paint, the underlying lead can still become accessible to children. If the painted surfaces deteriorate, or are exposed to weathering or to friction, then lead flakes, dust or particulate can be ingested or inhaled. According to Dr. Lanphear, friction on windows predictably results in dispersal. The City contends that this evidence supports the conclusion that the very existence of lead paint in a home is a public nuisance, and this remains true regardless of how well a property is maintained.

¶ 18. The City believes its facts establish a basis upon which a jury could conclude that defendants caused this nuisance by selling lead paint in Milwaukee and promoting its use there. The City's evidence and expert testimony indicate that defendants sold lead for use in paint, or lead paint, in Milwaukee. Both Mautz and NL Industries acknowledge this. Mautz denies that it sold lead paint for interior use and attempts to distinguish its sales of lead paint for exterior residential use as negligible, asserting that such sales, as a matter of law, cannot he a substantial cause of the alleged public nuisance. However, there does not appear to be agreement on what would be a "negligible" amount of sales in the context of paint sales over many years. Nor does there appear to be agreement on how "negligible" is to be measured during the relevant time. The determination of such questions is for a jury rather than this court. Based on our review of the current record, we are persuaded that there are disputed material facts concerning the extent of both defendants' sales in Milwaukee and whether those sales were a substantial cause of the alleged nuisance. We conclude, therefore, that this is an issue for the jury.

¶ 19. We likewise conclude that the extent and effect of promotion of lead paint sales by both defendants is an issue of material fact for the jury. The record discloses that NL Industries promoted its lead paint, Dutch Boy, to the general public through substantial advertising. There is evidence that Mautz promoted the use of its lead paint, including through its sales force. For example, as the federal government's 1973 ban on the sale of lead-based paint neared, Mautz Executive Vice-President Bernhard Mautz issued a memo to the Mautz sales force stating:

I want you to begin the continual program with each of your dealers of making sure their stock is rotated with the older material being sold first.
This is a very important project due to the lead regulations. At the present time we are cleaning up our material of heavy metals and putting this into our stock items.
When the lead regulation is finally put into effect those dealers who have old material will not be able to sell it. The only alternative they will have is to dump it.
Let's do our dealers a favor now by rotating their new stock.

Evidence that Mautz and NL Industries each promoted the use of lead paint directly to the public and through sales staffs creates a genuine issue of material fact for the jury on the question of whether defendants participated in the creation of a public nuisance of childhood lead poisoning in the City of Milwaukee.

2. Public Policy

¶ 20. Defendants argue that public policy considerations preclude liability. We decline to address defendants' public policy concerns at this stage of the proceedings. Those concerns are more appropriately addressed after trial, based on a complete factual record.

¶ 21. In Alvarado v. Sersch, 2003 WI 55, 262 Wis. 2d 74, 662 N.W.2d 350, a negligence case, the supreme court addressed the issue of when it is appropriate to limit liability at the summary judgment stage, before all the facts have been presented to a jury for determination. Id., ¶¶ 11-12. Alvarado involved the claim of a housecleaner who lit what she thought was a candle but was actually a firework. The firework exploded in her hand, causing severe injuries. Id., ¶¶ 3-5. She sued the owner of the apartment building, its manager and a painting contractor (and their insurers), alleging negligence by each. Id., ¶ 6. The trial court granted summary judgment for two defendants on grounds that they had no duty of care to protect the housecleaner from the harm. Id., ¶ 7. The court of appeals affirmed, but on public policy grounds, concluding that public policy barred any imposition of liability. Id., ¶ 8. The supreme court reversed, concluding that neither the trial court nor the court of appeals should have granted summary judgment before a jury determination of the facts. Id., ¶ 20. Only then would a public policy analysis be appropriate. See id. The court explained, "[i]t is desirable to have a full trial to precede the court's determination because the issues in this case are complex and the factual connections attenuated." Id., ¶ 21.

¶ 22. Although the case before this court involves the creation of a public nuisance rather than negligence, we conclude that the supreme court's reasoning applies with equal force here. At trial, the jury will have the opportunity to determine whether a public nuisance exists, whether defendants' conduct in promoting the use of lead paint and their sales of lead pigment and paint in the Milwaukee area were substantial factors causing the nuisance, and whether the public nuisance, if one is found, was a cause of the damage sustained by the City. Findings as to the existence of a public nuisance, its cause, and the resulting damages will be material and helpful in evaluating the public policy considerations raised in this case. See id., ¶ 25.

B. Conspiracy Claim

¶ 23. The trial court dismissed the City's conspiracy claim on the ground that, having dismissed the public nuisance claim, there was no underlying tort upon which a conspiracy claim could be based. Assuming for purposes of this opinion that this analysis is accurate, it does not now serve as a basis to affirm the dismissal because we have concluded that the public nuisance claim should be tried.

¶ 24. Defendants offer several reasons to affirm the dismissal of the conspiracy claim. Specifically, they argue that the City's allegations of conspiratorial conduct are unsupported by any evidence of concerted action, that the City cannot show it was injured by the alleged conspiracy, and that defendants' alleged legislative activities are constitutionally protected, and thus cannot support the conspiracy claim. We reject these arguments because we conclude that testimony and discovery materials in the record establish that there are genuine issues of material fact as to the elements of a civil conspiracy, the object of which was to knowingly promote and sell a potentially hazardous product.

¶ 25. A civil conspiracy in Wisconsin is " 'a combination of two or more persons by some concerted action to accomplish some unlawful purpose or to accomplish by unlawful means some purpose not in itself unlawful.' " Onderdonk v. Lamb, 79 Wis. 2d 241, 246, 255 N.W.2d 507 (1977) (quoted source omitted). "To state a cause of action for civil conspiracy, the complaint must allege: (1) The formation and operation of the conspiracy; (2) the wrongful act or acts done pursuant thereto; and (3) the damage resulting from such act or acts." Id. at 247.

¶ 26. The City has produced evidence that both defendants were active in trade associations that promoted the use of lead in paint to be sold to the public. There is also evidence that defendants continued to promote the use of lead paint despite knowledge of the risk to health brought about by its usé in homes. For example, Mautz Executive Vice-President Bernhard Mautz, in a letter written in September 1972, tells "Friends" the following:

As many of you are aware, the lead laws are still very much up in the air. Nobody really knows exactly what is happening and what the future of these laws will be. Right now the National Paint and Coatings Association is trying to stop the present legislation, but frankly, this does not look as if it is going to come through.
At the present time the law stands that on December 31 no paint containing 0.5% lead is to be sold for home use. Supposedly, it can be sold for commercial use or anything besides toys, interior and exterior surfaces of homes, or anything around the home.

The letter goes on to identify batches of Mautz paint that can, and cannot, be sold in 1973 (the year lead paint regulations took effect), depending on the amount of lead in each type of paint. Finally, the letter notes that if anyone wants to buy the soon-to-be illegal lead paint, "we will be glad to make a special offer of 750 a gallon and 250 a quart off the regular price."

¶ 27. The existence of this letter, as well as documentation of NL Industries' involvement in lead paint promotion and opposition to regulatory legislation, lead us to conclude there are genuine issues of material fact concerning each defendant's involvement in an alleged conspiracy to promote and accomplish the sale of lead-based paint, knowing of its potentially hazardous properties. These disputed issues of material fact preclude summary judgment.

C. Restitution Claim

¶ 28. The City contends that it should be allowed to recover restitution from defendants pursuant to the Restatement Of Restitution § 115 (1937) and as recovery for unjust enrichment. Defendants argue the City has no evidence that the disputed sales conferred a benefit upon them. They also argue that the City's expenditure of funds has benefited the private property owners of the buildings being abated, not the public as a whole. Further, defendants claim that the City is not entitled to restitution for any abatement funded by federal and state funds. Details of the costs of the abatement program and the benefits conferred on the City have not been fully developed for this court's review. Also, the impact of the well-established collateral source rule on the facts here remains to be developed. See Koffman v. Leichtfuss, 2001 WI 111, ¶ 29, 246 Wis. 2d 31, 630 N.W.2d 201 ("Under the collateral source rule a plaintiffs recovery cannot be reduced by payments or benefits from other sources."). Because there are disputed facts that require resolution, summary judgment on this issue is precluded.

CONCLUSION

¶ 29. For the foregoing reasons, we reverse the trial court's judgment and order and remand for trial on the claims of public nuisance, conspiracy and restitution.

By the Court. — Judgment and order reversed and cause remanded.

       Three additional claims against defendant Mautz were dismissed earlier and are not at issue in this appeal.

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


source: Caselaw Access Project

author: HIGGINBOTHAM, J.

license: Public Domain

text:
    State of Wisconsin ex rel. James J. Kaufman, Petitioner-Appellant, v. Thomas E. Karlen, Respondent-Respondent.
    Court of Appeals

      No. 04-0394.

      Submitted on briefs June 4, 2004.

    Decided December 2, 2004.

    2005 WI App 14
    (Also reported in 691 N.W.2d 879.)

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of James J. Kaufman.

    On behalf of the respondent-respondent, the cause was submitted on the brief of Karla Z. Keckhaver, assistant attorney general, and Peggy A. Lauten-schlager, attorney generad.
    Before Deininger, PJ., Dykman and Higginbotham, JJ.
   HIGGINBOTHAM, J.

¶ 1. James J. Kaufman is an inmate confined at Jackson Correctional Institution. He was found guilty on three conduct reports. After exhausting his administrative remedies, Kaufman filed a petition for a writ of certiorari in circuit court. The circuit court dismissed his petition on the merits based solely on the petition and attached documents. Kaufman appeals that order. Because we conclude the circuit court erred in dismissing Kaufman's petition for a writ of certiorari on the merits without reviewing the administrative record and considering briefs, we reverse the order of the circuit court and remand for further proceedings consistent with this opinion.

FACTS

¶ 2. On November 12, 2003, Kaufman filed a petition for a writ of certiorari seeking review of prison disciplinary actions for conduct reports #1084165, #1390053 and #1353418. Kaufman attached to his petition documents relevant to each disciplinary action, including the conduct report, disciplinary decision and appeal to the warden. The circuit court did not issue a signed writ of certiorari for service on Karlen. Consequently, the prison records custodian never filed a certified return.

¶ 3. On January 12, 2004, the circuit court, sua sponte, dismissed Kaufman's petition, concluding that based upon its review of the petition and documents submitted, the disciplinary decisions for all three conduct reports were reasonable. Kaufman filed a motion for reconsideration, challenging the circuit court's authority to dismiss a certiorari action without signing and issuing a writ ordering a return of the record and disputing the circuit court's conclusion that the disciplinary decisions were reasonable. The circuit court denied the motion, reiterating the dismissal was based upon the court's review of the petition and attached exhibits. Kaufman appeals.

DISCUSSION

¶ 4. In this appeal Kaufman advances several arguments, most of which go to the merits of the disciplinary committee's decisions as reviewed by the circuit court. Kaufman also argues, however, that the circuit court erred by refusing or failing to issue a signed writ of certiorari that would have required the prison records custodian to file a certified return of the record developed through the course of the disciplinary committee proceedings and the administrative appeals. Because we conclude the circuit court erred by refusing to issue a writ of certiorari and by sua sponte dismissing Kaufman's petition on its merits without consideration of the full record and briefs from the parties, we will not address Kaufman's substantive arguments.

¶ 5. A circuit court may dismiss a prisoner's petition for a writ of certiorari without requiring a responsive pleading from the respondent on four grounds:

The court may dismiss the action or special proceeding ... without requiring the defendant to answer the pleading if the court determines that the action or special proceeding meets any of the following conditions:
1. Is frivolous, as determined under s. 814.025(3).
2. Is used for any improper purpose, such as to harass, to cause unnecessary delay or to needlessly increase the cost of litigation.
3. Seeks monetary damages from a defendant who is immune from such relief.
4. Fails to state a claim upon which relief may be granted.

Wis. Stat. § 802.05(3)(b) (2001-02).

¶ 6. The State argues the circuit court properly dismissed Kaufman's petition because the petition failed to state a claim upon which relief may be granted. The State is correct that a circuit court has the authority to dismiss a petition for a writ of certiorari on that basis. See Wis. Stat. § 802.05(3)(b)4. However, the circuit court did not dismiss Kaufman's petition on that basis; rather the court dismissed the petition on its merits after considering Kaufman's petition and the documents attached thereto. The court specifically stated it was deciding the case based on the record before it and that the record supported the disciplinary committee's decisions:

Therefore, based on a review of the record submitted to the court, and the decisions previously cited, it is the Order of this court that the writ of certiorari previously issued in this matter be quashed, and that this action be dismissed.

¶ 7. The right to be heard is a fundamental requisite of due process of law. State ex rel. Sahagian v. Young, 141 Wis. 2d 495, 500, 415 N.W.2d 568 (Ct. App. 1987). Kaufman complains he was denied his right to be heard by the circuit court's failure to sign the writ of certiorari for service on Karlen, which would have required the prison records custodian to file a certified copy of the return of the administrative proceedings. The essence of Kaufman's complaint is that the circuit court erred by deciding the case on its merits based solely on Kaufman's petition and the attached documents, not on the record. We agree.

¶ 8. The circuit court stated it "was able to review all of the conduct reports, and the decisions by the disciplinary committee for each disciplinary action taken against the petitioner." The circuit court also reasoned that

The petitioner was not prejudiced by the court reviewing these documents in any way because they were merely copies of the materials that the respondent would have filed as part of its return. The court does believe that [if] there is any additional evidence in the record that the respondent could send in its return that would be helpful to the petitioner's case.

¶ 9. Whether the court had before it all the documents that would have been contained in the return is unknowable. This uncertainty is eliminated when the return is filed. Once a court chooses to consider a prisoner's petition on the merits, due process requires the court to base its decision on a complete record of the proceedings below and on briefs submitted by the parties. Here, the court chose to decide the case on its merits based solely on Kaufman's petition and attachments. However, "[t]he petition for the writ is not... the full development of the petitioner's position." Id. at 501. "If an inmate petitioner is limited to his or her petition for certiorari, the inmate has not been given an opportunity to be heard at a meaningful time in a meaningful manner." Id. We conclude Kaufman's right to be heard in this case was limited by the court's decision to decide the case without the record and by the court's failure to afford Kaufman the opportunity to argue his objections to the disciplinary committee's decisions. Because the circuit court denied Kaufman's right to be heard in accord with the dictates of due process, we reverse and remand to the circuit court to afford Kaufman that opportunity.

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

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

       The circuit court stated that the writ of certiorari was issued in this matter. The record shows that Kaufman filed a petition for a writ of certiorari but the court did not issue a signed writ of certiorari for service on Karlen.

       We do not suggest that a circuit court may not dismiss a certiorari petition without ordering a return if the petition fails to state a claim, such as where the petition fails to allege or attach documents showing that the petitioner exhausted his or her administrative remedies or when a petition shows on its face that it is untimely or for the other reasons as stated in Wis. Stat. § 802.05(3)G>). See generally State ex rel. Schatz v. McCaughtry, 2003 WI 80, 263 Wis. 2d 83, 664 N.W.2d 596.


text:
    In re the Marriage of Ramakrishna Rao Settipalli, Petitioner-Respondent, v. Sandesha Rao Settipalli, Respondent-Appellant.
    Court of Appeals

      No. 03-3287.

      Submitted on briefs September 7, 2004.

    Decided December 7, 2004.

    2005 WI App 8
    (Also reported in 692 N.W.2d 279.)

      On behalf of the respondent-appellant, the cause was submitted on the briefs of James H. Finn III of Law Offices of James H. Finn, S.C., Brookfield.
    On behalf of the petitioner-respondent, the cause was submitted on the brief of Thomas W. St. John and Jennifer L. Bolger of Friebert, Finerty & St. John, S.C., Milwaukee.
    Before Fine, Curley and Kessler, JJ.
   KESSLER, J.

¶ 1. Sandesha Rao Settipalli appeals from a divorce judgment and from an order denying her motion for reconsideration. She argues that the trial court erroneously exercised its discretion when it: (1) refused to leave open decisions on maintenance and property division; (2) refused to consider "undisputed evidence of increased earning capacity"; and (3) failed to properly allocate as marital debts money received by the couple from Sandesha's parents. We affirm the judgment and order. We conclude that the trial court's determinations were the result of a rational mental process that produced a reasoned and reasonable determination, which is fully consistent with established law and statutory requirements.

¶ 2. In addition, we consider Ramakrishna Rao Settipalli's motion for sanctions based on Sandesha's alleged violation of appellate rules. We conclude that sanctions are appropriate due to misrepresentations in her briefs and in her response to the motion for sanctions, and due to her failure to provide adequate citations to the record and legal authority. We conclude that Ramakrishna is entitled to costs and reasonable attorney fees associated with this appeal. We remand to the trial court for a determination of the amount of these costs and fees.

BACKGROUND

¶ 3. Sandesha, who was raised in the United States, and Ramakrishna, who was raised in India, were married pursuant to an arranged marriage in February 1995. They have lived in Wisconsin since the marriage and have no children. During the marriage, they lived together sporadically. They permanently separated in the spring of 2001. Ramakrishna filed for divorce in March 2002. The matter was tried to the court over six days in 2003.

¶ 4. At trial, the primary issues were property division and maintenance. Ramakrishna testified that he graduated from medical school in India in 1989 and completed his internship in 1991. He started a residency program in India in January 1993. He stated that he left the residency program in the spring so that he could study for the United States licensing exams, which would enable him to pursue a medical career in the United States. Ramakrishna took medical exams in the United States beginning in 1996. Over the following years, he passed some and failed others. He testified that he was unsure whether he would become licensed to practice in the United States, having failed some tests more times than allowed and needing to retake some tests that he passed more than seven years earlier. As of the end of the trial, he was unemployed and was not licensed to practice medicine in the United States.

¶ 5. Sandesha testified that she has an undergraduate degree. She testified about her employment and education during the marriage, which included a brief stint as a medical school student. She presented evidence that mental health issues prevented her from working during parts of the marriage, including at the time of trial. Like Ramakrishna, her income at the time of trial was zero.

¶ 6. One of Sandesha's arguments at trial was that she should receive a greater share of the marital estate, and increased or continued maintenance, based on contributions to Ramakrishna's career from her and her family. She and her father testified about money paid to Ramakrishna's family as part of a dowry and money expended for living expenses, test preparation and other fees. She claimed that she contributed $201,065 to the marriage, through her own employment and by receipt of $81,057 from her family. She claimed that Ramakrishna contributed only $119,326 to the marriage.

¶ 7. Ultimately, the trial court awarded Sandesha the parties' primary assets: two investment accounts in India worth approximately $10,000. Sandesha also received a lump sum maintenance award of $15,000 to be paid within thirty months with interest at twelve percent per annum on the unpaid balance. The only other assets (household items, individual bank accounts, personal property, and IRAs in the name of each individual) were awarded by stipulation to the individual who had each item in his or her possession. In explaining its decision, the court specifically found that the funds provided by Sandesha's family were not loans which were to be repaid.

¶ 8. Sandesha filed a motion for reconsideration, arguing that the maintenance and property awards should be held open because it was likely that Ramakrishna will become licensed as a medical doctor in the United States, which would greatly affect his future income. The trial court denied the motion for reconsideration, reaffirming its earlier finding that any potential increase in Ramakrishna's future income was purely speculative. This appeal followed.

DISCUSSION

¶ 9. Sandesha challenges both the property division and the maintenance award, asserting that each was an erroneous exercise of discretion. She requests future compensation based on a percentage of Ramakrishna's anticipated future earnings for a period of time to be set at a later date, when Ramakrishna is earning income. Sandesha claims to be entitled to such compensation because of what she asserts was her sacrifice to help Ramakrishna become licensed as a doctor in the United States. She also contends that the monies the couple received from her parents in the form of dowry and other payments should have been returned to her parents.

¶ 10. We review the trial court's findings with respect to property division and maintenance to determine whether the court properly exercised its discretion. In the absence of an erroneous exercise of discretion, the award will be upheld. Jasper v. Jasper, 107 Wis. 2d 59, 63, 318 N.W.2d 792 (1982). Findings of fact will not be set aside unless they are clearly erroneous. Wis. Stat. § 805.17(2) (2001-02).

¶ 11. A trial court engages in an erroneous exercise of discretion when it "fails to consider relevant factors, bases its award on factual errors, makes an error of law, or grants an excessive or inadequate award." Olski v. Olski, 197 Wis. 2d 237, 243 n.2, 540 N.W.2d 412 (1995). Moreover, "a discretionary determination must be the product of a rational mental process by which the facts of record and law relied upon are stated and are considered together for the purpose of achieving a reasoned and reasonable determination." Hartung v. Hartung, 102 Wis. 2d 58, 66, 306 N.W.2d 16 (1981).

¶ 12. The trial court must begin the property division analysis with the presumption that the marital estate will be divided equally, but may deviate from that presumption after considering the relevant factors identified in Wis. Stat. § 767.255(3). The weight to be given to those factors is within the discretion of the trial court. Fuerst v. Fuerst, 93 Wis. 2d 121, 131, 286 N.W.2d 861 (Ct. App. 1979). Here, the trial court deviated from an equal division of the disputed property by awarding all of it to Sandesha. Her appeal of this result is curious.

¶ 13. The record reflects an earning history of the parties that was substantially equal over the term of this short marriage. At the time of the trial, both parties were unemployed. Both parties were well-educated. Sandesha, who had a college degree, was contemplating medical school or graduate school. Ramakrishna had a medical degree and had completed two of the required three parts of the medical licensure exam. At the time of the trial, Sandesha was being treated for mental health problems and Ramakrishna had been terminated from the residency program because he failed part of the medical licensure exam.

¶ 14. The trial court properly rejected both Sandesha's request for a percentage of unknown future income as the method for calculating a future maintenance award and her request to hold open the award pending Ramakrishna's future employment. The Wisconsin Supreme Court cautioned against use of the percentage of income approach to maintenance many years ago in Poindexter v. Poindexter, 142 Wis. 2d 517, 531, 419 N.W.2d 223 (1988), concluding, "the use of a percentage maintenance award should only be considered by a court when such an award is responsive to the factors enumerated in [Wis. Stat. § 767.26], and when very unusual circumstances of the case warrant a deviation from a fixed sum award." No such circumstances are present here.

¶ 15. The stipulated division of property gave each party their own checking account, personal jewelry and effects, and the IRA in each party's name. Sandesha received a 1998 automobile, which Ramakrishna agreed was not part of the marital estate as it was titled in Sandesha's father's name. The portion of the property division decided by the trial court awarded Sandesha the joint stock account in India and the account in India in Ramakrishna's sole name. These two stock accounts had a total value of approximately $10,000. The trial court awarded Sandesha all of the disputed marital property. Sandesha's share of the total marital estate is at least an equal division and may be tilted in her favor. The trial court properly exercised its discretion and explained the factors considered in coming to its decision.

¶ 16. Sandesha asserts that her sacrifices during the marriage in furtherance of Ramakrishna's educational pursuits entitle her to additional compensation under the rationale of Haugan v. Haugan, 117 Wis. 2d 200, 220, 343 N.W.2d 796 (1984), and Lundberg v. Lundberg, 107 Wis. 2d 1, 14, 318 N.W.2d 918 (1982). These cases permit a court to compensate one spouse who sacrifices educational or other opportunities so that the earning capacity of the partner is enhanced by acquisition of a university degree or a license. See id. The compensation may be either by an enhanced award of maintenance or as a part of property division. Sandesha's claim to additional benefits under the Lun-dberg and Haugan rationale is misplaced for a variety of reasons.

¶ 17. Sandesha made no sacrifices to permit Ramakrishna to obtain his medical degree. He earned his degree in India in 1989. He did not bring debts from those educational efforts into the marriage. His efforts to pass the United States medical licensure exam and to complete a residency program in the United States were unsuccessful. The trial court found that Ramakrishna's earning capacity was not enhanced during the marriage and his future earnings were entirely speculative. This finding is not clearly erroneous; it is supported by substantial evidence in the record. Regardless of whether Sandesha deferred educational goals of her own during the marriage, as she asserts, there was evidence to support the trial court finding of no enhancement of Ramakrishna's earning capacity during the marriage. Consequently, there is no appropriate application in this case of the doctrines of special compensation established in Lundberg and Haugan.

¶ 18. Having examined the record and the trial court's decision, we conclude that the court's determinations were the result of a rational mental process that produced a reasoned and reasonable determination. See Hartung, 102 Wis. 2d at 66. Accordingly, we affirm the judgment and order.

SANCTIONS

¶ 19. At the outset in this appeal, Ramakrishna moved to strike Sandesha's brief, to dismiss Sandesha's appeal, and for the imposition of sanctions based on Sandesha's misrepresentation of the record below and her violation of rules of this court. That motion was denied at the time, with leave to renew the request and argue for that result in the appeal. The request for sanctions is based on Sandesha's failure to provide citations to the record and authority, and her specific misrepresentations of two particularly significant facts. We examine the more serious of these alleged infractions first, and conclude that Sandesha, by her attorney, has intentionally misrepresented significant facts in the briefs filed with this court.

¶ 20. The first significant misrepresentation is the repeated incorrect assertion in Sandesha's brief that she "should be given at least the opportunity that [Ramakrishna] was given to obtain his medical license in the United States and complete his residency." As Ramakrishna points out, it is undisputed that during the marriage, Sandesha did in fact go to medical school, but dropped out due to medical reasons. Ramakrishna argues, "While not directly stating so, Ms. Settipalli implies in that statement that she gave up training or education because of or on behalf of Mr. Settipalli."

¶ 21. The second significant misrepresentation, related to the first, involves a lack of candor to this court. In support of Sandesha's assertion that she sacrificed her career for Ramakrishna, she asserts that a statement by the trial court that was made as part of a colloquy between Attorney Thomas St. John (Ramakrishna's attorney) and the trial court was actually a factual finding. The colloquy occurred in the context of an objection by St. John to certain evidence. Sandesha uses an excerpted portion of this colloquy as though it were a finding of fact by the trial court that Sandesha "always wanted to go to medical school and didn't as a sacrifice to the petitioner."

¶ 22. The misrepresented statements deal with the trial court's assumption about Sandesha's expected testimony. The context of the excerpted statement makes the misrepresentation clear.

MR. ST. JOHN: Your Honor, I have to object because A., I don't see what relevance there is to what it would take for her to go to school in India, and B., we were told this is a fact witness. This isn't fact. He is offering opinions on admissions to foreign medical schools. No basis has been established for this.
THE COURT: I assume, and again I shouldn't assume, but I assume he is following these questions to establish that number one, she anticipates to go to medical school as to what her future is going to be for the next few years, and or two, she had always wanted to go to medical school and didn't as a sacrifice to the petitioner. And I only say that because there has been reference to that in the trial. I'm not -
MR. ST. JOHN: - The references in the cross-examination questions of counsel, there has been no witness to testify to that and this witness isn't qualified to testify to that.

The statement by the trial court is not even arguably a finding of fact. Sandesha's attorney's representation to the contrary in the brief is false and misleading. It suggests a conscious attempt to mislead this court.

¶ 23. Sandesha's attorney compounded this misrepresentation when, in response to Ramakrishna's motion for sanctions, he refused to acknowledge that the statement was taken out of context and, instead, argued that there was testimony to support the trial court's "finding." The response contends that the trial court's statement "supports the Court's own acknowl-edgement and appreciation for [Sandesha's] plight." The trial court made no such findings and Sandesha's repeated insistence that it did so is highly inappropriate.

¶ 24. In addition to these mispresentations, Sandesha's brief lacks sufficient citations to both the record and authority. For instance, she makes the following assertion without citation to legal authority:

Clearly, this court can consider the substantial efforts of [Sandesha] and the substantial contributions brought into the marriage by her either by way of loans from her parents or gifts from her parents as substantial contributions to the marriage, which cannot be ignored by this court.

By failing to provide legal authority for the proposition that contributions from a party's parents should be considered in the divorce, she forces Ramakrishna to respond to what is a bald assertion.

¶ 25. Sandesha further asserts, without citation to the record, that "she made his life much more comfortable during his exam preparation by letting him focus on his studies while she worked and maintained the household" and that "the financial support that was loaned to [Ramakrishna] by [Sandesha's] parents to enhance [Ramakrishna's] career coupled with [Sandesha's] earnings from 1995 to 2002 were substantial factors in contributing to the successful admission to the Medical College of Wisconsin's residency program for [Ramakrishna]." She continues, "He was allowed to live in an apartment in Chicago for 16 weeks to prepare for his studies. Had he been required to drive back and forth to Milwaukee, it would have caused additional stress and time away from his studies, which was avoided through the efforts of [Sandesha] and her family." With respect to each of these assertions, Sand-esha fails to explain the source of these alleged facts, whether these facts were presented at trial, and whether these facts were found by the trial court. While she can certainly ask this court to overturn a trial court's findings of fact, she is required to candidly state that she is doing so.

¶ 26. Sandesha repeats this error when she asks this court to order Ramakrishna "to repay sums loaned to [Sandesha] for his direct benefit in the amount of $43,179 to be paid in equal monthly installments over the next seven years." Sandesha fails to mention that the trial court explicitly found that funds provided by Sandesha's parents were not loans.

¶ 27. In summary, we conclude that Sandesha's brief contains both omissions and affirmative misrepresentations. One of the options available to this court is to strike the brief and dismiss the appeal. See Mogged v. Mogged, 2000 WI App 39, ¶ 17, 233 Wis. 2d 90, 607 N.W.2d 662 (Ct. App. 1999). We choose not to dismiss the appeal as a sanction for these failings because that is a drastic remedy and because other available remedies will, we hope, discourage this type of appellate advocacy in the future. See Smythe v. Smythe, 225 Wis. 2d 456, 468-69, 592 N.W.2d 628 (1999).

¶ 28. Wisconsin Stat. § 809.83(2) permits the court to impose a penalty or costs on a party or counsel for violation of court rules. Vigorous advocacy for a client, and candor with the court, are not inconsistent requirements of our legal system. Both characteristics are expected and honored by the court and by the public. These expectations are of such long standing in, and of such importance to, our judicial system that departure from either one of those requirements is a serious matter. Recognizing that individual litigants do not generally have the knowledge or skill to write appellate briefs, and that candor with the court and compliance with court rules are primarily the responsibility of the attorney involved, we conclude that sanctions should be imposed against Sandesha's counsel. Specifically, we conclude that Ramakrishna is entitled to the costs and attorney fees he incurred or expended on this appeal. We remand to the trial court to determine the amount of costs and attorney fees to be awarded.

By the Court. — Judgment and order affirmed and cause remanded with directions.

       The trial court's order denying Sandesha's motion for reconsideration was issued orally from the bench at the motion hearing. See Wis. Stat. § 805.17(3).

       Although there was some debate over whether the parties were legally married in India as of 1993, the trial court found that the marriage began in 1995. That finding has not been challenged on appeal.

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

       The parties' financial disclosure statements indicate that excluding tangible property, the values awarded by agreement to Ramakrishna total approximately $13,000. The values awarded by agreement to Sandesha include an IRA and jewelry that was never valued by either party and a student loan for Sandesha's own education of approximately $2500, plus money she received from her father, which she characterizes as "loans."

       Because the value of the IRA awarded by stipulation to Sandesha does not appear in the record or in either party's financial disclosure statement, we are unable to calculate the actual percentage of the total marital estate that she was awarded.

       Wisconsin Stat. § 809.83(2) provides:
      Noncompliance with rules. Failure of a person to comply with a court order or with a requirement of these rules, other than the timely filing of a notice of appeal or cross-appeal, does not affect the jurisdiction of the court over the appeal but is grounds for dismissal of the appeal, summary reversal, striking of a paper, imposition of a penalty or costs on a party or counsel, or other action as the court considers appropriate.


author: KESSLER, J. FINE, J.

text:
    Earl J. Teschendorf and Linda Teschendorf, Plaintiffs, v. State Farm Insurance Companies, Reliance National Indemnity Co., and American Family Mutual Insurance Co., Defendants. Bernard J. Shira and Maria Shira, Plaintiffs-Appellants, v. Reliance National Indemnity Co., Defendant, American Family Insurance Co., Defendant-Respondent.

    Court of Appeals

      No. 03-3521.

      Submitted on briefs September 7, 2004.

    Decided December 7, 2004.

    2005 WI App 10
    (Also reported in 691 N.W.2d 882.)

      On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of Eric S. Darling of Schmidt, Darling & Erwin of Milwaukee.

      On behalf of the defendant-respondent, the cause was submitted on the brief of Terry J. Booth of Piper & Schmidt of Milwaukee.
    Before Fine, Curley and Kessler, JJ.

       Petition to review granted 3-8-2005.

   KESSLER, J.

¶ 1. Bernard J. Shira and Maria Shira appeal from an order for summary judgment dismissing their claim against American Family Mutual Insurance Company. The dismissal was based on the trial court's conclusion that American Family's reducing clause, which is based on Wis. Stat. § 632.32(5)(i)2. (2001-02), unambiguously allows the reduction of uninsured motorist policy limits by worker's compensation funds that were paid to the State Work Injury Supplemental Benefit Fund ("the State") because the insured had no dependents as that term is defined by worker's compensation statutes. We conclude that the unambiguous language of both the statute and the insurance policy allows a reduction only for those payments paid or payable to the insured or the insured's heirs or estate. Accordingly, we reverse and remand for further proceedings.

BACKGROUND

¶ 2. Scott Shira, age thirty-three, died in an automobile accident in Woodbury, Minnesota, while in the course of his employment for Layne Christensen Company. The accident was allegedly caused by an uninsured motorist. Scott's parents, the Shiras, filed a wrongful death action under Wis. Stat. § 895.04. They sought to collect uninsured motorist ("UM") benefits included in two American Family Insurance Company automobile policies purchased by Scott prior to his death.

¶ 3. At the time of his death, Scott was unmarried and had no children. Because Scott had no dependents as defined by the worker's compensation statutes, the majority of the worker's compensation benefits payable as a result of his death, $159,900, were required to be paid directly to the State of Wisconsin, specifically to the Work Injury Supplemental Benefit Fund. See Wis. Stat. § 102.49(5)(b). The provisions of § 102.49 essentially require worker's compensation insurance to pay the State the benefits it would otherwise "save" when a worker dies and, therefore, cannot personally receive the benefits. If a partially dependent person survives the decedent, the payments to the State are reduced by the amount paid to that dependent.

¶ 4. American Family successfully argued to the trial court that the Shiras are not entitled to receive anything under Scott's UM policies because the net limits of those policies, totaling $150,000, must be reduced by the amount of worker's compensation paid to the State by the worker's compensation carrier or the employer, which in this case exceeded $150,000. This appeal followed.

STANDARD OF REVIEW

¶ 5. We review the trial court's grant of summary judgment de novo, using the same methodology as the trial court. Mullen v. Walczak, 2003 WI 75, ¶ 11, 262 Wis. 2d 708, 664 N.W.2d 76. Summary judgment is appropriate if the pleadings and other information on file show there is no "genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Id.; see also Wis. Stat. § 802.08(2). Here, the facts are undisputed, leaving only issues of law for our consideration. Specifically, this case involves the interpretation of American Family's insurance policy and Wis. Stat. § 632.32(5)(i)2. issues that we review de novo. See Mullen, 262 Wis. 2d 708, ¶ 12 (interpretation of an insurance policy); Gonzalez v. Teskey, 160 Wis. 2d 1, 7-8, 465 N.W.2d 525 (Ct. App. 1990) (interpretation of statutes).

DISCUSSION

¶ 6. At issue is the application of a clause in American Family's insurance policy, generally known as a reducing clause, which states:

The limits of liability of this coverage will be reduced by:
3. A payment made or amount payable because of bodily injury under any workers' compensation or disability benefits law or any similar law.

(Emphasis added.) This clause is specifically authorized by Wis. Stat. § 632.32(5)(i)2., which provides:

(i) A policy may provide that the limits under the policy for uninsured or underinsured motorist coverage for bodily injury or death resulting from any one accident shall be reduced by any of the following that apply:
2. Amounts paid or payable under any worker's compensation law.

¶ 7. The Shiras do not dispute that the policy as written conforms with Wis. Stat. § 632.32(5)(i)2. However, they contend that interpreting the clause to reduce American Family's UM coverage limits by amounts paid to the State rather than to Scott or his heirs or estate is contrary both to the insured's common sense interpretation of the reducing clause and to public policy.

¶ 8. In response, American Family contends that because the clause does not explicitly limit its application to funds paid or payable to the insured, payments made to the State are also subject to the reducing clause. American Family also points out that reducing clauses that conform with Wis. Stat. § 632.32(5)(i)2. have been held unambiguous and enforceable, citing Badger Mutual Insurance Co. v. Schmitz, 2002 WI 98, 255 Wis. 2d 61, 647 N.W.2d 223; Taylor v. Greatway Insurance Co., 2001 WI 93, 245 Wis. 2d 134, 628 N.W.2d 916; Bellile v. American Family Mutual Insurance Co., 2004 WI App 72, 272 Wis. 2d 324, 679 N.W.2d 827; and Va n Erden v. Sobczak, 2004 WI App 40, 271 Wis. 2d 163, 677 N.W.2d 718.

¶ 9. We agree with American Family that both the Wisconsin Supreme Court and the Wisconsin Court of Appeals have concluded that reducing clauses that are consistent with Wis. Stat. § 632.32(5)(i)2. are unambiguous and enforceable. However, no prior cases (including the cases relied upon by American Family) have addressed the issue presented here: whether worker's compensation benefits paid to the State, rather than to the insured or the insured's heirs or estate, fall within § 632.32(5)(i)2. All of the cases cited by American Family involve payments to the insured or the insured's dependents. We conclude that § 632.32(5)(i)2. does not permit reduction of coverage by payments made by other persons or entities to the State and, interpreting the reducing clause consistent with the statute, neither does the reducing clause in American Family's policy.

¶ 10. Prior to 1995, courts in Wisconsin held unenforceable a variety of insurance policies containing reducing clauses. See Schmitz, 255 Wis. 2d 61, ¶¶ 25-30. In Schmitz, the court explained that the response of the Wisconsin legislature was to enact Wis. Stat. § 632.32(5)(i), which "expressly permitted] reducing clauses that decrease UM or [underinsured motorist ("UIM")] payments by the amounts recovered from other sources." Schmitz, 255 Wis. 2d 61, ¶ 31.

¶ 11. Since Wis. Stat. § 632.32(5)(i) was enacted, insurance policy clauses consistent with it have been upheld as enforceable in numerous cases, involving both UM and UIM coverage. In both Schmitz and Dowhower v. West Bend Mut. Ins. Co., 2000 WI 73, 236 Wis. 2d 113, 613 N.W.2d 557, the supreme court interpreted Wis. Stat. § 632.32(5)(i) as referring to payments made to the insured. In Dowhower, the court concluded that a reducing clause containing language authorized by § 632.32(5)(i)l. "is neither ambiguous nor contrary to public policy." Dowhower, 236 Wis. 2d 113, ¶ 20. Dowhower, considering a UIM clause, concluded:

[A]n insurer may reduce payments made pursuant to a UIM policy by amounts received from other legally responsible persons or organizations, provided that the policy clearly sets forth that the insured is purchasing a fixed level of UIM recovery that will be arrived at by combining payments made from all sources.

Id., ¶ 33 (emphasis added).

¶ 12. In Schmitz, the court elaborated on its holding in Dowhower:

Implicit in our determination that reducing clauses would be valid only if they "provided that the policy clearly sets forth that the insured is purchasing a fixed level of UIM recovery that will be arrived at by combining payments made from all sources" was a recognition that the reasonable insured might not understand, intuitively, the scope of his or her UIM coverage. We signaled in Dowhower that UIM insurers that reduce UIM payments by amounts paid from other sources, are required to make clear to purchasers of UIM coverage that they are purchasing coverage that will put them in the same position they would be in if the underinsured tortfeasor had liability limits equal to the amount of UIM coverage the insured purchased. Insureds will then understand that if they want to be assured of having, say, $200,000 in total available coverage, they will have to purchase UIM coverage with a $200,000 limit.

Schmitz, 255 Wis. 2d 61, ¶ 38.

¶ 13. Both Dowhower and Schmitz are based on the court's understanding that Wis. Stat. § 632.32(5)(i) refers to payments made to the insured. It was based on this understanding that the court upheld the validity of the statute and reducing clauses consistent with the statute. Although § 632.32(5)(i)2. does not explicitly state that the payments must be paid or payable to the insured under any worker's compensation law, these words are implied from the context of the overall statutory scheme in which they occur. We conclude that § 632.32(5)(i)2. unambiguously includes only those payments paid or payable to the insured or the insured's heirs or estate.

¶ 14. Finally, we briefly address American Family's argument that we should interpret the reducing clause consistent with Wisconsin's policy of limiting the right of non-dependents to recover worker's compensation death benefits. Nothing in our decision today alters worker's compensation law or the policy behind it. The Shiras cannot recover the worker's compensation benefits, and do not seek to do so. At issue here is only the insured's right to receive the benefits bargained for and paid for in an insurance contract, either for the benefit of himself or his heirs or estate.

¶ 15. Like the hypothetical insured discussed in Schmitz, Scott purchased coverage that would put him in the same position he would be in if the uninsured tortfeasor had liability limits equal to the amount of UM or UIM coverage purchased. See 255 Wis. 2d 61, ¶ 38. By purchasing $150,000 in UM coverage, Scott guaranteed that he, or his heirs or estate, would recover a total of $150,000, through payments by the tortfeasor, worker's compensation, disability payments and UM payments. See Wis. Stat. § 632.32(5)(i). To deny recovery in this case would deny Scott the benefit of the coverage he purchased and would provide a windfall for American Family. This would he contrary to both § 632.32(5)(i) and the expectations of the insured. See Danner v. Auto-Owners Ins., 2001 WI 90, ¶ 57, 245 Wis. 2d 49, 629 N.W.2d 159 ("We interpret insurance contracts to meet the reasonable expectation of the insured.").

CONCLUSION

¶ 16. For the foregoing reasons, we reverse the summary judgment and remand for further proceedings consistent with this opinion.

By the Court. — Order reversed and cause remanded for further proceedings.

FINE, J.

¶ 17. 0dissenting). I respectfully dissent.

¶ 18. First, this action seeks to recover on an automobile policy issued to and paid for by Scott W Shira, the adult son of the plaintiffs, Bernard J. and Maria Shira. Scott Shira's parents are not insureds under his insurance policy. According to the Majority, their entitlement to the uninsured-motorist funds generated by the policy stems from their having "filed a wrongful death action under Wis. Stat. § 895.04." Majority, ¶ 2 (footnote omitted). I do not, however, understand how this can be because the accident happened in Minnesota and Wis. Stat. § 895.03 only permits wrongful-death actions to be brought "for a death caused in this state." Although the actual death need not occur in Wisconsin, there must be some Wisconsin "act or omission" that "was a substantial factor in causing" the death for § 895.03 to apply. Tillett v. J.I. Case Co., 756 F.2d 591, 595 (7th Cir. 1985), disapproved of on other grounds, Boyle v. United Techs. Corp., 487 U.S. 500, 510 (1988). Although I recognize that concepts of "standing" in Wisconsin are somewhat fluid, see Wisconsin Bankers Ass'n v. Mutual Sav. & Loan, 96 Wis. 2d 438, 444-445 n.1, 291 N.W.2d 869, 873 n.1 (1980) (objections to standing may be waived), the wrongful-death remedy is "a matter of legislative grace," Stolper v. Owens-Corning Fiberglas Corp., 178 Wis. 2d 747, 752, 505 N.W.2d 157, 159 (Ct. App. 1993). I do not understand, and neither the parties nor the Majority explains, why this case is here.

¶ 19. Second, as the Majority recognizes, neither Scott Shira's insurance policy nor the operative statutes are ambiguous. Scott Shira's insurance policy reduces the insurance company's liability under its coverage for uninsured-motorist coverage by "[a] payment made ... because of bodily injury under any workers' compensation or disability benefits law." (Bolding omitted.) This clause is permitted by Wis. Stat. § 632.32(5)(i)2, quoted by the Majority in ¶ 6.

¶ 20. Here, there was a "payment" encompassed by the uninsured-motorist coverage clause in Scott Shira's policy. That the payment was made to the state fund rather than to either Scott Shira's estate or to his parents is immaterial. Indeed, the trial court's decision, which the Majority reverses, is consistent with Wisconsin's worker's compensation law, which, as the Majority recognizes, does not permit payment of worker's compensation benefits to the parents of adult children, unless those parents relied on the adult child for their support. See Wis. Stat. §§ 102.46-102.49, 102.51. There is no evidence in the summary-judgment record that Mr. and Mrs. Shira received any support from Scott Shira or anticipated doing so.

¶ 21. In my view, the Majority's quotations from fleeting short-hand references in some cases to an "insured" cannot override the unambiguous statutory language, especially when the issue for which the Majority cites those fleeting short-hand references was neither raised nor decided — or even considered — in those decisions. Accordingly, those fleeting short-hand references were hardly "judicial acts" reflecting the discussion and decision of "a question germane to, though not necessarily decisive of, the controversy" then before the courts issuing those decisions. See Chase v. American Cartage Co., 176 Wis. 235, 238, 186 N.W. 598, 599 (1922) (discussing exceptions from traditional notions of dictum)-, see also State v. Leitner, 2002 WI 77, ¶ 22 n.16, 253 Wis. 2d 449, 464 n.16, 646 N.W.2d 341, 348 n.16 (discussing exceptions from traditional notions of dictum).

¶ 22. Based on the foregoing, I would affirm.

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

       Scott's passenger, Earl Teschendorf, was injured in the accident. His claims are not at issue in this appeal.

       On appeal, no party disputes that the Shiras are proper parties to bring a wrongful death action based on Scott's death. Also, at the trial court, the parties debated whether Wisconsin or Minnesota law would apply to this wrongful death action. We have not been asked to consider this issue and therefore do not address it.

       It is undisputed that Scott's parents were paid $12,500 and medical providers were paid $1048. American Family's attorney explained at the motion hearing that the $12,500 payment was for funeral and other expenses. Our analysis is not affected by this $12,500 payment to the Shiras.

       Wisconsin Stat. § 102.49(5) provides in relevant part:
      (a) In each case of injury resulting in death, the employer or insurer shall pay into the state treasury the sum of $5,000.
      (b) In addition to the payment required under par. (a), in each case of injury resulting in death leaving no person dependent for support, the employer or insurer shall pay into the state treasury the amount of the death benefit otherwise payable ....
      (Emphasis supplied.)