text:
    State of Wisconsin, Plaintiff-Respondent, v. Kent Kleven, Defendant-Appellant.
    Court of Appeals

      No. 03-3362-CR.

      Submitted on briefs September 7, 2004.

      Decided March 3, 2005.

    2005 WI App 66
    (Also reported in 696 N.W.2d 226.)

      On behalf of the defendant-appellant, the cause was submitted on the briefs of Roberta A. Heckes, Adell.
    On behalf of the plaintiff-respondent, the cause was submitted on the brief of Aaron R. O'Neil, assistant attorney general, and Peggy A. Lautenschlager, attorney general.
    Before Deininger, EJ., Vergeront and Higgin-botham, JJ.
   DEININGER, P.J.

¶ 1. This appeal involves sentencing statutes that were in effect during the first phase of Truth-in-Sentencing (TIS-I). Kent Eleven appeals an amended judgment that resentenced him to prison for attempting to commit a third-degree sexual assault. He also appeals an order that denied him the specific relief he sought from the sentence the court originally imposed. Eleven claims that his original sentence was improper because the court expressly sentenced him to less than the statutory maximum for the attempted assault and then included additional prison time for the dangerous weapon and habitual criminality enhancers to which he was subject. The relief he seeks is the striking of eight years of confinement that the court originally attributed to the penalty enhancers, leaving in place only the three years' confinement that the court originally imposed for the base offense.

¶ 2. We conclude that any errors regarding the manner in which Eleven's sentence was originally imposed were cured when the circuit court resentenced him in response to his motion challenging the original sentence. We further conclude that Eleven is not entitled to be relieved of the enhanced penalties that the court imposed when it resentenced him. We conclude, however, that the circuit court resentenced Eleven under an incorrect understanding of the maximum term of confinement that applied to Eleven's base offense. We therefore reverse the appealed judgment and order, and we remand for resentencing consistent with the conclusions stated in this opinion.

BACKGROUND

¶ 3. Eleven pled no contest to one count of attempted third-degree sexual assault and to one count of misdemeanor bail jumping. At the time Eleven committed the felony offense (August 2, 2002), third-degree sexual assault was classified as a Class D felony and carried a maximum sentence of ten years' "imprisonment." See Wis. Stat. §§ 939.50(3)(d) and 940.225(3) (1999-2000). Further, at that time, the maximum "term of confinement" that could be imposed for a Class D felony was five years. See Wis. Stat. § 973.01(2)(b)4. Finally, Wis. Stat. § 939.32 then provided that, with certain exceptions not relevant here, "[wjhoever attempts to commit a felony ... may be ... imprisoned ... not to exceed one-half the maximum penalty for the completed crime."

¶ 4. The amended information that served as the basis for Kleven's plea also alleged that he was a "repeater" and that he attempted to commit the sexual assault "while threatening to use a dangerous weapon." These additional allegations subjected him to enhanced penalties. Because he admitted the allegation of a relevant prior felony conviction, his "maximum term of imprisonment" could be increased "by not more than 6 years." Wis. Stat. § 939.62(l)(b). And, because he admitted to having threátened the use of a dangerous weapon, his "maximum term of imprisonment" could be increased by up to an additional four years. Wis. Stat. § 939.63(l)(a)3.

¶ 5. The trial court initially sentenced Eleven for attempted third-degree sexual assault, as enhanced, as follows:

[T]he Court's going to sentence you on the charge itself 3 years, weapon enhancer 4 years, repeater 4 years for a total of 11 years, extended supervision 1.25, resulting in a total sentence of 12.25.
The total length of your sentence then, Mr. Eleven, is 12.25 years ... and your initial term will be 11 years, zero months; extended supervision, one year, three months.

¶ 6. Kleven moved for postconviction relief, requesting "an order vacating sentence enhancers" under the holding of State v. Harris, 119 Wis. 2d 612, 619-620, 350 N.W.2d 633 (1984), because the court had imposed an enhanced penalty after deciding to impose less than the maximum sentence for the underlying crime. In response to the motion, the circuit court vacated the original sentence and scheduled a resentencing hearing. At the resentencing, the court reviewed the pertinent factors "as it would in an original sentencing," and imposed the following sentence:

The sentence of the Court then will be as to the underlying charge, three years and nine months of initial confinement and one year and three months of extended supervision; and that is increased under the weapons enhancer and under the repeat offender enhancer. So the total sentence of the Court will be 11 years as an initial term of confinement. That is intended and issued as a single sentence. Under statutory authority, I'm indicating that three years and three months of that initial confinement are being imposed under and pursuant to the authority of the weapons enhancer statute and I'm further indicating that of that total sentence, four years and zero months are being imposed of initial confinement under authority of the repeat offender enhancer. That makes a total single sentence of 11 years of initial confinement and the extended supervision component under the base charge of attempted third degree sexual assault is one year and three months.

The court explained to Kleven later in its sentencing remarks that the "total length of your sentence ... is 12 years and three months. Your initial term of confinement in prison is 11 years and zero months, and the time that you will serve on extended supervision is one year and three months."

¶ 7. The court entered an amended judgment of conviction that reflected the newly imposed sentence and an order disposing of Eleven's "motion to vacate penalty enhancers," withholding any further relief except for additional incarceration credit to reflect the time Eleven had been imprisoned under his original sentence. Eleven appeals the amended judgment and the order.

ANALYSIS

¶ 8. Eleven does not challenge the circuit court's discretionary decision, based on relevant sentencing factors, to impose the sentence it did. That is, he does not argue that a total sentence of twelve years and three months, with an eleven-year term of confinement, was unreasonable or unconscionable for the offense he committed, with the admittedly applicable penalty enhancers. Rather, he contends that, once the original sentencing judge decided to impose less than the maximum penalty for the underlying attempted sexual assault, the court committed legal error by then extending his term of confinement pursuant to the penalty enhancers. Eleven claims that the only proper remedy is the vacation of the enhanced period of confinement in its entirety, leaving in place only the term of confinement (three years) originally imposed for the base offense. Eleven thus presents a question of law, which we decide de novo. See State v. Jackson, 2004 WI 29, ¶ 11, 270 Wis. 2d 113, 676 N.W.2d 872 (interpreting applicable statutes to determine "how penalty enhancers are applied at sentencing" is a question of law "subject to independent appellate review").

¶ 9. The circuit court stated in imposing the original sentence that, as to the base offense of attempted third-degree sexual assault, it was ordering three years' confinement plus one year and three months of extended supervision. That would constitute an overall term of "imprisonment" of four years and three months for the base offense. Eleven correctly points out that this is less than the applicable statutory maximum penalty of five years' imprisonment. See Wis. Stat. §§ 939.32(1) (providing that those who attempt to commit felonies may be "imprisoned" for up to "one-half the maximum penalty for the completed crime"); 939.50(3)(d) (providing that "imprisonment" for a Class D felony may not exceed ten years, thus producing a maximum five-year term of "imprisonment" for an attempted Class D felony); and 973.01(2)(a) (explaining that "the total length of the bifurcated sentence," consisting of confinement and extended supervision, "may not exceed the maximum period of imprisonment for the felony").

¶ 10. Eleven likens his original sentence to that imposed by the trial court in Harris, 119 Wis. 2d at 619-20. The defendant in Harris was convicted of attempted robbery, an offense that at the time carried a maximum, indeterminate sentence of five years in prison, and she was a repeater, which subjected her to an additional two years' imprisonment. See id. at 614-16. The trial court sentenced her to " 'an indeterminate term of not more than three years'" for the attempted robbery, but then went on to say this: " 'The repeater has been taken into consideration, and there would be six months on the [case number] which would amount to the three years. That is, 30 months and 6 monthsId. at 615. The supreme court concluded that the trial court had erroneously exercised its discretion in imposing an additional six months on account of the defendant's repeater status after deciding to sentence the defendant below the maximum for the base offense: "The repeater statute ... is not applicable to the sentence of a defendant unless the trial court seeks to impose a sentence in excess of that prescribed by law for the crime for which the defendant is convicted." Id. at 619.

¶ 11. This court had affirmed the thirty-six month sentence imposed in Harris, notwithstanding the "irregularity of attributing a specific portion of a sentence to a particular sentencing criterion." Id. at 621. The State argued on review that the supreme court should do likewise "because the trial court was authorized to impose the sentence it did even in the absence of the defendant's alleged repeater status." Id. The supreme court, concluded, however, that the sentencing court, having decided to not impose a maximum underlying sentence, relied on an erroneous view of the law when it "attempted to use the repeater statute to enhance the sentence. This constituted an abuse of the sentencing discretion." Id. at 625. Accordingly, the court vacated the six months the trial court had imposed as "an enhancement for a repeater status," leaving in place only the thirty months it had imposed for the base offense. Id. at 626.

¶ 12. Unlike in Harris, the circuit court in this case originally imposed a sentence well in excess of the statutory maximum that could have been imposed for the unenhanced attempted sexual assault. As we have discussed, the maximum term of imprisonment for the attempted third-degree sexual assault was five years' imprisonment and the court originally sentenced Eleven to eleven years' confinement and a year and three months of extended supervision, for a total sentence of twelve years, three months. Thus, the enhanced penalty statutes, Wis. Stat. §§ 939.62 and 939.63, were very much "applicable" to Eleven's sentence because the circuit court in this case sought "to impose a sentence greater than that prescribed by law" for the base offense. See Harris, 119 Wis. 2d at 626. In short, the circuit court did not commit the error identified in Harris.

¶ 13. We conclude, therefore, that the remedy ordered by the supreme court in Harris — vacation of the enhanced portion of the sentence — is neither necessary nor appropriate on the present facts. We note that, although the supreme court found Wis. Stat. § 973.12(2) inapplicable in Harris because the less-than-maximum sentence rendered the enhanced penalty statute for repeaters "inapplicable" to the facts before it, Harris, 119 Wis. 2d at 625-26, there is no reason that the rationale of § 973.12(2) should not govern here. It provides that, if a court "indicates in passing sentence how much thereof is imposed because the defendant is a repeater, it shall not constitute reversible error, but the combined terms shall be construed as a single sentence for the present conviction." Section 973.12(2).

¶ 14. We conclude that, provided the sentence imposed exceeds the maximum term of imprisonment established for the base offense, a court's remarks attributing a portion of the sentence to an applicable enhancer does not constitute grounds to vacate that portion of the sentence. As the supreme court explained in State v. Upchurch, 101 Wis. 2d 329, 336, 305 N.W.2d 57 (1981), a sentencing proceeding is "not a game," in which "a misstatement by the trial judge would result in a windfall to the defendant."

¶ 15. We further conclude that any error in the original sentence stemming from the court's comments that allocated to the base offense a term of imprisonment that was less than the statutory maximum for that offense was cured by the court's decision to vacate the original sentence and resentence him. At resentenc-ing, the court expressly allocated a full five years of imprisonment to the attempted sexual assault (three years, nine months' confinement plus one year, three months' extended supervision), and it emphasized its understanding that it was imposing a "single sentence," consisting of the "base" sentence and the additional terms of confinement authorized by the enhancement statutes. We discuss below whether the court erred in determining the proper bifurcation of the five years' imprisonment it imposed for Eleven's base offense. For present purposes, however, we are satisfied that the court at resentencing intended to, and did, impose a sentence that exceeded the maximum term of imprisonment for Eleven's base offense. In short, no Harris violation occurred at resentencing.

¶ 16. Eleven next argues that, because the sentence imposed at his original sentencing included two, separately assessed penalty enhancement terms added to the sentence imposed for the base offense, the court essentially imposed three sentences for a single offense, thereby violating federal and state constitutional protections against double jeopardy. See Upchurch, 101 Wis. 2d at 334. In this argument, Eleven continues to focus on his original sentence, instead of that imposed at his resentencing. If, however, the original sentence constituted a double jeopardy violation under Up-church, as Eleven contends, then the proper remedy was that ordered in Upchurch: resentencing. See id. at 336. Thus, Eleven has already received the relief from his original sentence to which he would be entitled if his original sentence violated double jeopardy protections. Accordingly, we address only whether the sentence the circuit court imposed at resentencing violated constitutional protections against double jeopardy. We conclude it did not.

¶ 17. The trial court in Upchurch sentenced the defendant, who was apparently already serving a prison term for a prior offense, as follows:

[T]he Court will sentence him to one year in prison .... At Waupun on the possession with intent to deliver concurrent to what he is now serving as a habitual criminal. The Court will sentence him to one year consecutive to the term I just gave him. I am doing that, sir, because you were on parole and you should not have gotten in trouble again; so you will serve some more time and based upon the fact you were a habitual criminal.

Id. at 331-32. The supreme court concluded that the defendant had "received two separate and consecutive one-year sentences for the commission of one criminal act" and that "these multiple sentences violated the principles of double jeopardy." Id. at 334. Accordingly, it reversed the judgment of conviction and remanded for resentencing. Id. at 336.

¶ 18. We conclude that Eleven's sentence does not suffer from the infirmity the supreme court recognized in Upchurch. Here, although the circuit court identified amounts of confinement that it attributed to each of the two applicable penalty enhancers, the court clearly stated that it was "increas[ing]" Kleven's sentence because of the enhancers, not imposing separate and additional sentences for them. The court emphasized that the eleven years of confinement it ordered was "intended and issued as a single sentence." Thus, unlike in Upchurch where the trial court imposed two, consecutive one-year sentences for a single crime, we conclude that the rationale of Wis. Stat. § 973.12(2), which we have quoted and discussed above, applies to "save[]" the sentence imposed by the circuit court at resentencing. See Upchurch, 101 Wis. 2d at 335. We again conclude that a sentencing court's allocation of a portion of a single sentence to a penalty enhancer does not, by itself, constitute reversible error..

¶ 19. We turn now to the correctness of the sentence before us under recent decisions of this court and the supreme court that addressed how to compute and bifurcate sentences for offenses committed during the period that the first phase of Truth-in-Sentencing (TIS-I) was in effect (see footnote 2). The issue is raised by the State, not Eleven. In its response brief, the State offers at least two possible answers to the question of how the proper maximum terms of imprisonment and confinement might he computed on the present facts, and it has submitted supplemental argument on how our recent decision in State v. Mason, 2004 WI App 176, 276 Wis. 2d 434, 687 N.W.2d 526, might affect the result. Rather than repeating the various arguments here, we proceed directly to our conclusions as to what the precedents require regarding the sentence calculations in this case.

¶ 20. We begin by observing that third-degree sexual assault was a classified felony under TIS-I, specifically, a Class D felony, for which the statutes specified (1) ten years' maximum imprisonment; (2) five years' maximum confinement; and (3) extended supervision of at least twenty-five percent of the confinement imposed. See Wis. Stat. §§ 939.50(3)(d); 973.01(2)(b)4; 973.01(2)(d). The first complication in the facts before us arises from the fact that Eleven was not convicted of a completed crime, but of an attempted felony, for which the applicable statute specified that a defendant may be "imprisoned" for "one-half the maximum penalty for the completed crime." Wis. Stat. § 939.32(1). The statutes did not, however, specify a maximum term of confinement for an attempted felony, nor did they otherwise "classify" an attempted felony.

¶ 21. We concluded in Mason, however, that the maximum term of confinement under TIS-I for an attempt to commit a classified felony is one-half of the maximum confinement specified for the completed crime. See Mason, 276 Wis. 2d 434, ¶ 6. Applied here, this means that Eleven faced a maximum term of confinement for his base offense of two and one-half years (one-half of the five-year maximum confinement specified by statute for a Class D felony). This also means that the circuit court erred at the resentencing when it allocated three years and nine months of confinement to the base offense, because that term of confinement exceeded the maximum confinement applicable to Eleven's base offense. We discuss below the impact of this error, after first addressing the application of the penalty enhancers to Eleven's sentence.

¶ 22. Because an attempt to commit a classified felony is not itself a classified felony under TIS-I, we conclude that the supreme court's holding in Jackson governs the application of the two penalty enhancers to Eleven's sentence. The court explained in Jackson that, for unclassified felonies under TIS-I, "the penalty enhancer is added initially to the term of confinement pursuant to Wis. Stat. § 973.01(2)(c) and ... the penalty enhancer cannot be bifurcated." Jackson, 270 Wis. 2d 113, ¶ 32. Eleven thus faced a potential maximum of twelve and one-half years' confinement: 2.5 years (maximum confinement for base offense) plus 4 years (dangerous weapon enhancer) plus 6 years (repeater enhancer) = 12.5 years' potential maximum confinement for the enhanced offense.

¶ 23. The supreme court went on in Jackson, however, to apply the rule of lenity in interpreting Wis. Stat. § 973.01, and in so doing, the court concluded that two additional steps are required in order to determine the upper limit of confinement that may be imposed under TIS-I for an enhanced, unclassified felony: (1) the maximum term of imprisonment must be determined, and (2) the maximum term of confinement cannot exceed 75% of the maximum imprisonment. See id., ¶¶ 40-42. Applying the supreme court's methodology to Eleven's doubly enhanced offense results in the following: 5 years (maximum imprisonment for base offense) plus 4 years (dangerous weapon enhancer) plus 6 years (repeater enhancer) = 15 years (maximum imprisonment for enhanced offense) x 75% (per § 973.01(2)(b)6) = 11.25 years (actual maximum term of confinement that may be imposed for enhanced offense). Thus, notwithstanding the circuit court's misstatement of the maximum term of confinement applicable to Eleven's base offense, the total term of confinement it imposed (11 years) did not exceed the maximum term of confinement for the enhanced offense.

¶ 24. One step remains: determining what constraints apply to the term of extended supervision that may be ordered for the enhanced offense. The State correctly notes that the supreme court did not expressly address this issue in Jackson. The court ended its analysis after determining that the 75% rule limited the term of maximum confinement that could be ordered. See id., ¶ 44. There are two possibilities regarding what constraints apply to the extended supervision that may be imposed for Eleven's enhanced offense, given that the circuit court ordered an eleven-year term of confinement.

¶ 25. The first possibility is that four years of imprisonment beyond the imposed term of confinement remain available for extended supervision (15 years' maximum imprisonment for enhanced offense less 11 years' confinement imposed = 4 years available for extended supervision). Thus, under this interpretation, because Wis. Stat. § 973.01(2)(d) required that "[t]he term of extended supervision that follows the term of confinement in prison may not be less than 25% of the length of the term of confinement" ordered, Eleven should have been ordered to serve at least 25% of the ordered term of confinement on extended supervision, but not more than four years of such supervision. Applied to the sentence before us, this would mean that the circuit court erred by imposing too short a term of extended supervision. The court imposed 11 years of confinement, meaning that it should have ordered a term of extended supervision of not less than 2.75 years (25% of 11 years), nor more than 4 years, instead of the 1.25 years that it ordered.

¶ 26. The second possibility is that, because "the penalty enhancer cannot be bifurcated," Jackson, 270 Wis. 2d 113, ¶ 32, Eleven may be ordered to serve, at most, the maximum term of extended supervision available for his base offense, which is two and one-half years. Under this interpretation, a sentencing court would not be able to satisfy the minimum 25%-of-confinement rule for extended supervision if it imposes a term of confinement in excess of ten years. In this case, as we have noted above, the 25% rule produces a minimum term of extended supervision of 2.75 years to follow the eleven years of confinement imposed, which would exceed the maximum 2.5 years' extended supervision available for Eleven's base offense. Also, under this interpretation, the "true" maximum imprisonment applicable to Eleven's enhanced offense is only 13.75 years (maximum confinement of 11.25 years for enhanced offense plus maximum 2.5 years of extended supervision for base offense).

¶ 27. We conclude that the second alternative is the more reasonable interpretation. First, it is consistent with the supreme court's discussion in Jackson, which emphasized that penalty enhancers are not to be bifurcated but serve only to extend the confinement portion of a bifurcated sentence under TIS-I. Jackson, 270 Wis. 2d 113, ¶¶ 17, 20-24, 30. Second, it is consistent with the rule of lenity as applied in Jackson to these "ambiguous penal statutes" because it favors the defendant by producing shorter maximum terms of extended supervision and total imprisonment. See id., ¶ 41. Finally, this interpretation is consistent with our conclusion in State v. Volk, 2002 WI App 274, 258 Wis. 2d 584, 654 N.W.2d 24, that, for classified felonies under TIS-I, "a penalty enhancer cannot be applied to the term of extended supervision." Id., ¶ 35.

¶ 28. We thus conclude that the maximum sentence Eleven faced for his enhanced offense was 13.75 years of imprisonment, with not more than 11.25 years' confinement and not more than 2.5 years of extended supervision. Eleven's present sentence does not exceed any of these maximum limitations. Eleven's present sentence, however, does suffer from the infirmity that the sentencing court improperly allocated three years, nine months of confinement to Eleven's base offense. Moreover, Eleven's present sentence includes too short a term of extended supervision, which, under TIS-I was required to be not less than 25% of the confinement ordered, capped, however, as discussed above, at 2.5 years. We must determine, therefore, what remedy to order because of the circuit court's error in bifurcating Eleven's base offense. There are again two possibilities.

¶ 29. The first is that we could simply reallocate one year and three months of Eleven's present sentence from confinement to extended supervision, resulting in the same overall imprisonment imposed by the circuit court (twelve years, three months), but consisting instead of nine years, nine months' confinement, followed by two years, six months of extended supervision. This would effectuate the sentencing court's stated intention to increase Eleven's confinement by a total of seven years and three months beyond the maximum confinement for the base offense, and it would achieve a term of supervision that satisfies the 25% rule without exceeding the maximum available extended supervision for the base offense. We are reluctant to order this modification, however, because it is also clear from the court's remarks at resentencing that it intended for Eleven to serve a total of eleven years' initial confinement, which could properly be ordered because it is less than the 11.25-year maximum term of confinement applicable to the enhanced offense.

¶ 30. Alternatively, we could vacate the present sentence and remand for resentencing consistent with the legal conclusions reached in this opinion. We conclude that this is the proper remedy. Unlike in Jackson, the corrected calculations that flow from our reading of the applicable statutes may well have a practical effect on Eleven's sentence. See Jackson, 270 Wis. 2d 113, ¶¶ 10, 44. A new, properly bifurcated sentence may, but need not necessarily, result in a shorter term of confinement. If the circuit court determines that nine years and nine months of confinement are sufficient to accomplish its original sentencing purposes in light of an additional one year and three months of extended supervision, it may impose the sentence we declined to order in the preceding paragraph. If, however, the court determines that eleven years of confinement are necessary to its sentencing purpose, that term of confinement may be retained, and two years, six months of extended supervision ordered so as to accomplish a proper bifurcated sentence for Eleven's enhanced offense.

¶ 31. In sum, as we did in Volk, we conclude that resentencing is required:

As we have explained, a sentence under the truth-in-sentencing law consists of a term of confinement and a term of extended supervision. These two components form a symbiotic relationship with the length of one necessarily influencing the length of the other and the overall length of the bifurcated sentence. Although the sentencing court imposes two discrete terms — one of confinement and one of extended supervision — it remains that the end product is but a single sentence. When a crucial component of such a sentence is overturned, it is proper and necessary for the sentencing court to revisit the entire question. If we held otherwise ... we would produce a sentence based on mathematics, rather than an individualized sentence based on 'the facts of the particular case and the characteristics of the individual defendant.'

Volk, 258 Wis. 2d 584, ¶ 48 (citation omitted).

CONCLUSION

¶ 32. For the reasons discussed above, we reverse the appealed judgment and order, and we remand for resentencing consistent with the conclusions in this opinion. In resentencing Eleven, the circuit court shall proceed on the basis of the following understandings: (1) the maximum term of imprisonment for an attempted third-degree sexual assault committed on August 2, 2002, is five years; (2) the maximum term of confinement applicable to the base offense is two and one-half years; (3) the penalty enhancers for threatening the use of a dangerous weapon and for habitual criminality may be applied to only the term of confinement; (4) for the penalty enhancers to be applicable in sentencing Eleven, the court must impose an overall sentence of imprisonment that exceeds the five-year maximum term of imprisonment for Eleven's base offense; (5) the maximum term of confinement that may be ordered is eleven years, three months; and (6) a term of extended supervision must be ordered that equals at least 25% of the term of confinement, except that no more than two years, six months of extended supervision may be ordered, regardless of the length of confinement ordered.

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

       The circuit court originally sentenced Eleven on the bail jumping charge, as a repeater, to "one year, six months to run concurrent" with the sentence for attempted third-degree sexual assault. Eleven does not challenge the concurrent sentence imposed for the penalty-enhanced misdemeanor. We do not address the misdemeanor sentence in this opinion.

       The 2001-02 Wisconsin Statutes include the sentencing provisions applicable to an offense committed in 2002, but that edition also first sets forth the statutory text as affected by various amendments that became effective on February 1,2003. For convenience, all references in this opinion to the Wisconsin Statutes are to the 1999-2000 version unless otherwise noted. As the supreme court has explained:
      Wisconsin adopted Truth-in-Sentencing legislation in two phases. The first phase, TIS-I, was enacted in June 1998 and applied to offenses committed on or after December 31, 1999. See 1997 Wis. Act 283. The second phase, TIS-II, was enacted in July 2002 and became effective February 1, 2003. See 2001 Wis. Act 109. Because [the defendant] was sentenced under the provisions of TIS-I, this case does not address the recent changes of TIS-II.

        State v. Jackson, 2004 WI 29, ¶ 2 n.2, 270 Wis. 2d 113, 676 N.W.2d 872.

       Then Circuit Court Judge Duane H. Polivka imposed Eleven's original sentence. The decision to vacate that sentence and to resentence Kleven was made by Judge Polivka's successor, Circuit Judge Charles A. Pollex, who also imposed Eleven's new sentence and denied further postconviction relief.

       The better practice for sentencing courts would appear to be as follows: First, the court should determine, on the record at sentencing, the length of the maximum total imprisonment that may be imposed for the base offense before any penalty enhancers are applied, as well as the maximum terms of confinement and extended supervision that apply to the base offense. Next, the court should determine and state the maximum term of confinement that applies to the enhanced offense. The court should then explain, based on applicable sentencing factors, why it is imposing the overall sentence that it is, without allocating any portions of the confinement imposed among the base offense and enhancers. Such allocation is not required by statute or case law, and in fact, appears to not only be contrary to the rationale of Wis. Stat. § 973.12(2), but may lead to unnecessary confusion or claims of error, as the facts of Harris, Upchurch and this case demonstrate.

       We note that the circuit court imposed Eleven's current sentence on November 4, 2003, which was before the supreme court's decision in State v. Jackson, 2004 WI 29, 270 Wis. 2d 113, 676 N.W.2d 872, and our decision in State v. Mason, 2004 WI App 176, 276 Wis. 2d 434, 687 N.W.2d 526.

       Recall, the maximum term of imprisonment for Eleven's base offense is five years, and the maximum confinement that can be ordered for the base offense is two and one-half years. Thus, because all two and one-half years of the confinement available for the base offense must be deemed to have been imposed in order for the enhanced term of confinement to apply, the maximum available extended supervision that may be ordered under this interpretation is two and one-half years (5 years' maximum imprisonment for base offense less 2.5 years' maximum confinement for base offense = 2.5 years' maximum extended supervision available for enhanced offense).
      We also note that, under the rationale of Eleven's argument that his original sentence violated the holding in Harris because the court failed to impose a sentence for his base offense that exceeded the maximum imprisonment for his base offense, one could argue that, if an enhanced sentence is imposed (i.e., one that orders more than 2.5 years' confinement), the court must order the full 2.5 years of extended supervision available for the base offense. We reject this analysis and result. In order to avoid the error identified in Harris, it is only necessary that the sentence imposed exceed the maximum term of imprisonment for the base offense, and this may be accomplished with any combination of enhanced confinement exceeding 2.5 years, which, together with extended supervision equaling at least 25% of the confinement ordered, achieves a total sentence of more than five years' imprisonment. For example, if the court were to sentence Eleven to six-years' confinement and 1.5 years' extended supervision, it will have imposed a term of imprisonment (7.5 years) that exceeds the maximum for the base offense (5 years), while meeting the applicable constraints on extended supervision (at least 25% of confinement, but not to exceed 2.5 years).

       We read the court's analysis in Jackson to mean that penalty enhancers are added to the maximum term of imprisonment for the base offense only for the purpose of applying the 75% rule to determine the maximum allowable confinement. See Jackson, 270 Wis. 2d 113, ¶¶ 30, 42.

       The State does not argue that we should affirm Eleven's present sentence on the grounds that it does not exceed any maximum limitations and any error in the circuit court's bifurcation was therefore harmless. The State affirmatively requests that we remand for resentencing. We agree with the State's concession that Eleven's sentence must be set aside. Defendants are entitled to be sentenced on correct information and on a correct understanding of the law. Had the circuit court understood that the maximum confinement for Eleven's base offense was two and one-half years, we cannot be certain on the present record that it would not have imposed less than eleven years of confinement.


source: Caselaw Access Project

author: CANE, C.J.

license: Public Domain

text:
    Ruth M. Dakin, Plaintiff-Respondent, v. Frances T. Marciniak, Eric C. Pease, Langlade Memorial Hospital, Liberty Mutual Insurance Company, The Cincinnati Insurance Company, Tommy Thompson as U.S. Secretary of Health & Human Services, ABC Insurance Co., Unknown Insurance Carrier(s) providing insurance coverage to each Defendant named herein, identified pursuant to Wis. Stats. 807.12, XYZ Company (s) and Unknown Defendants identified pursuant to Wis. Stats. 807.12, Defendants, Roundy's, Inc. and Copp's Food Center a/k/a Copp's Corporation, Defendants-Appellants.
    Court of Appeals

      No. 04-0754.

      Submitted on briefs January 24, 2005.

    Decided March 8, 2005.

    2005 WI App 67
    (Also reported in 695 N.W.2d 867.)

      On behalf of the defendants-appellants, the cause was submitted on the briefs of Randy S. Parlee of Peterson, Johnson & Murray, S.C. of Milwaukee.
    On behalf of the plaintiff-respondent, the cause was submitted on the brief of Nathaniel Cade, Jr. and Timothy M. Hansen of Michael Best & Friedrich, LLP of Milwaukee.
    Before Cane, C.J., Hoover, EJ., and Peterson, J.

       Petition to review denied 6-1-2005.

   CANE, C.J.

¶ 1. Roundy's, Inc., the successor in interest to Copp's Food Center, a/k/a Copp's Corporation, appeals a nonfinal order denying its motion for summary judgment in this personal injury case. Roundy's argues the court erred when it concluded that, under Wis. Stat. § 802.09(3), Ruth Dakin could amend her complaint to add Roundy's as a defendant after the three-year statute of limitations for her claims had expired. Roundy's contends there is no legal or public policy basis under (1) the relation back statute, § 802.09(3); (2) the tolling provisions of Wis. Stat. §§ 893.54 and 893.13; or (3) Wisconsin's judicially created discovery rule to allow Dakin to assert her untimely claims against it. We agree, reverse the order, and remand the cause to the circuit court with directions to grant a summary judgment in favor of Roundy's, thereby dismissing it from the lawsuit.

Background

¶ 2. The events that gave rise to the underlying personal injury action in this case are straightforward. On April 4, 2000, at around 4:18 p.m., Eric Pease backed his car out of a parking space in a Copp's Food store parking lot. A bus Francis Marciniak was driving through the same lot swerved to avoid colliding with Pease. Although the car and the bus never made contact, Dakin, a passenger in the bus, was thrown from her seat and injured. Dakin left the Copp's parking lot in an ambulance. Pease never reported this incident to his then employer, Copp's.

¶ 3. The procedural history of Dakin's claim is more complicated. On March 17, 2003, about three. weeks before the statute of limitations expired, Dakin filed a complaint against Pease, Marciniak, Langlade Memorial Hospital, several named insurance carriers, and an unknown carrier and an unknown defendant under the fictitious name statute. See Wis. Stat. § 807.12(1). On November 24, Dakin amended her complaint, adding Roundy's as a defendant. Because Pease was an on-the-clock employee of Copp's at the time of the accident, the amended complaint alleged that Roundy's was liable to Dakin under a theory of respondeat superior. On January 6, 2004, Roundy's moved for summary judgment on the ground that the statute of limitations for Dakin's personal injury claim had expired. After a February 23 hearing, the circuit court denied the motion. Roundy's petitioned this court for leave to appeal the nonfinal order. See Wis. Stat. § 809.50. We granted the petition on June 1, 2004.

Standard of Review

¶ 4. A motion to dismiss based on the statute of limitations is treated as a motion for summary judgment. Wis. Stat. § 802.06(2)(b). We review such motions independently, applying the same methodology as the trial court. See Green Spring Farms v. Kersten, 136 Wis. 2d 304, 314-15, 401 N.W.2d 816 (1987). If the plaintiff states a claim and the pleadings show the existence of factual issues, we determine whether the moving party has presented a defense that would defeat the claim. Wiegert v. Goldberg, 2004 WI App 28, ¶ 8, 269 Wis. 2d 695, 676 N.W.2d 522. Summary judgment is proper when no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Wis. Stat. § 802.08(2).

Discussion

¶ 5. The parties agree that claims such as Dakin's are governed by Wis. Stat. § 893.54, which establishes a three-year statute of limitations for actions brought to recover damages caused by the "wrongful act, neglect or default of another." The parties also agree that Dakin's amended complaint, naming Roundy's as a defendant, was filed more than three years after the April 2000 accident. The circuit court concluded the statute did not bar Dakin's claims against Roundy's, however, because Dakin's amended complaint related back, under Wis. Stat. § 802.09, to her initial timely complaint. The court's conclusion reflected its determination that Roundy's, as Pease's employer, had constructive notice of the accident when it occurred.

¶ 6. To relate back, an amended pleading must satisfy four conditions. See Wis. Stat. § 802.09. First, the new pleading must arise out of the conduct set forth in the original pleading. Second, the party to be added must have received notice so it will not be prejudiced in maintaining its defense. Third, the party to be added must know or should have known that, but for a mistake concerning identity, the action would have been brought against it. Finally, conditions two and three must be fulfilled within the prescribed limitations period.

¶ 7. Roundy's contends that constructive notice cannot satisfy the second Wis. Stat. § 802.09 requirement that the party to be brought in must have received notice so that it will not be prejudiced in maintaining its defense. In support of its position, Roundy's cites our decisions in Bartels v. Rural Mut. Ins. Co., 2004 WI App 166, ¶¶ 14-15, 275 Wis. 2d 730, 687 N.W.2d 84, and Grothe v. Valley Coatings, Co., 2000 WI App 240, ¶ 9, 239 Wis. 2d 406, 620 N.W.2d 463. Dakin's response to this contention is not fully developed. However, her argument appears to turn on the premise that because, for certain purposes, we ascribe knowledge to employers of their employees' actions, we should interpret § 802.09 as using notice in the same way. We are not persuaded.

¶ 8. Wisconsin courts have recognized that adequate notice in the complaint of the transaction, events or occurrence out of which the amended claims arise is essential if the statutory right to the protection of statutes of limitations are to be guaranteed. Korkow v. General Cas. Co., 117 Wis. 2d 187, 199, 344 N.W.2d 108 (1984). Statutes of limitations are enacted to ensure prompt litigation of claims and to protect defendants from fraudulent or stale claims. Id. at 198; see also Peterson v. Roloff, 57 Wis. 2d 1, 12, 203 N.W.2d 699 (1973), and State Farm Mut. Auto. Ins. Co. v. Schara, 56 Wis. 2d 262, 268, 201 N.W.2d 758 (1972). Those policy purposes are served by requiring that parties be given "formal and seasonable notice that a claim is being asserted against them." Korkow, 117 Wis. 2d at 199. The question is thus whether the constructive notice Dakin alleges functions as the kind of "adequate" or "formal and seasonable" notice required under the relation back statute.

¶ 9. We have held that an original complaint alleging injuries arising from a vehicle insured by a particular carrier placed that carrier on notice that its liability might extend to negligent acts of other negligent insureds covered under the same policy. Biggart v. Barstad, 182 Wis. 2d 421, 433-34, 513 N.W.2d 681 (Ct. App. 1994). We have also held that an amended pleading adding a separate claim by a different plaintiff related back to a timely filed original complaint. Korkow, 117 Wis. 2d at 189-90. In Korkow, there was a new claim by a new plaintiff, the son of the original plaintiff, but the claim involved the same tavern, the same fire, and the same insurance policy as the original claim. Id. at 197. Under those circumstances, the insurer's ability to prepare to meet the claim was not prejudiced. See id. In both Biggart and Korkow, defendant insurers had actual knowledge of the underlying transaction out of which their potential liability arose and that knowledge was held to be sufficient notice that potential liability might extend to other claims arising out of the known transaction.

¶ 10. The situation in this case is very different. As Dakin indicates, an employer with the requisite amount of control over the conduct of an employee may be held vicariously liable for that employee's negligent actions even when the employer had no actual knowledge of the negligent behavior. See, e.g., Kerl v. Dennis Rasmussen, Inc., 2004 WI 86, ¶ 27, 273 Wis. 2d 106, 682 N.W.2d 328. But the fact that constructive notice can sometimes create vicarious liability does not mean that such notice is adequate for the purposes of ameliorating the effects of statutes of limitations. In Wisconsin, "[t]he limitation of actions is a right as well as a remedy, extinguishing the right on one side and creating a right on the other . .. which enjoys constitutional protection." Haase v. Sawicki, 20 Wis. 2d 308, 311-12, 121 N.W.2d 876 (1963). Statutes of limitations thus implicate vital interests and are not designed to be easily avoided.

¶ 11. Statutes of limitations serve the critical public policy interests of limiting fraudulent claims and encouraging vigorous litigation of proper claims. Adequate and timely notice is critical to both policies. To the extent that constructive notice is either imputed knowledge or, as earlier courts have described it, a mere "trademark of fiction," such notice will rarely be sufficient to identify an underlying transaction for the purposes of investigation and defense. Schoedel v. State Bank of Newburg, 245 Wis. 74, 76, 13 N.W.2d 534 (1944) ("[CJonstructive notice is in point of literal fact neither notice nor knowledge."). We reject Dakin's theory that when she timely named Pease, who had not been a Copp's employee since 2000, and an unknown defendant in a complaint, she also gave Roundy's, who had never employed Pease, adequate notice that it would have to investigate and defend against her claims. Under these facts, Dakin's argument about constructive notice fails.

¶ 12. Even if we agreed that constructive notice could satisfy the relation back statute, that notice would still have to have occurred before the statute of limitations expired. For the purposes of a statute of limitations, an action must be commenced before a particular time, meaning a summons and complaint naming a defendant must be filed with the court before that time expires. See Wis. Stat. § 801.02. Once the court has subject matter jurisdiction over the claim, the plaintiff has sixty more days to obtain jurisdiction over the person of the defendant by proper service. See id. If, as here, the plaintiff files a complaint and summons within the statutory time limits using a fictitious name for one defendant, the plaintiff may amend the complaint after the limitations have expired as long as the action leaves the defendant in "no worse position... than it would have been had it been named accurately in the first summons and complaint..." Lak v. Richardson-Merrell, Inc., 100 Wis. 2d 641, 649, 302 N.W.2d 483 (1981). To satisfy the fourth condition of the relation back statute, the defendant must thus have notice by proper service no more than sixty days after the statute of limitations expires. Here, Dakin did not serve Roundy's until she filed her amended complaint in November, well after the sixty days had passed.

¶ 13. Roundy's also argues that the Wisconsin discovery rule is inapplicable because Dakin's claim clearly accrued on the day the accident occurred. Dakin counters that, for the purposes of statutes of limitations, a claim does not accrue until a plaintiff discovers both an injury and the defendant who may have caused that injury. See Borello v. United States Oil, 130 Wis. 2d 397, 410-11, 388 N.W.2d 140 (1986). Under that formulation, Dakin argues that her claim did not accrue until she knew the identity of all the parties who caused her injury, including Roundy's. We disagree.

¶ 14. The supreme court first adopted a discovery rule for determining when claims accrue — "on the date the injury is discovered or with reasonable diligence should be discovered" — in a products liability suit stemming from injuries caused by defendant's Dalkon Shield. Hansen v. A.H. Robins, Inc., 113 Wis. 2d 550, 560, 335 N.W.2d 578 (1983). Reversing a long line of cases holding that claims accrued on the date the injury-occurred, Hansen sought to balance the threat of stale or fraudulent actions against the injustice of barring meritorious claims before the claimant knows of the injury. Id. at 559. Hansen was amplified in Borello, which held that a claim did not accrue until "the nature of the injury and the cause — or at least a relationship between the event and injury — is or ought to have been known to the claimant." Borello, 130 Wis. 2d at 406-07. Expansion of the discovery rule has been balanced by the requirement that plaintiffs exercise reasonable diligence and not ignore means of information reasonably accessible to them. See, e.g., Spitler v. Dean, 148 Wis. 2d 630, 638, 436 N.W.2d 308 (1989). When the material facts are undisputed and only one inference can reasonably be drawn, whether a plaintiff exercises reasonable diligence in the discovery of an injury is a question of law. See Groom v. Professionals Ins. Co., 179 Wis. 2d 241, 249, 507 N.W.2d 121 (Ct. App. 1993).

¶ 15. Dakin's argument implies the discovery rule tolls the statute of limitations in personal injury cases until a plaintiff discovers every defendant who might be legally liable for the injury. But the fact that a claim does not accrue until the plaintiff has knowledge of a suable party does not necessarily mean that it does not accrue until all suable parties are known. The purpose of the discovery rule is to limit the manifest injustice that would arise when application of the statute of limitations would destroy the rights of injured parties who could not have brought their claims earlier. See Hansen, 113 Wis. 2d at 556. It is not a promise to suspend limitations until optimal litigation conditions are established, and we decline to expand the rule in that direction.

¶ 16. Dakin's claim that the discovery rule should bar the application of the statute of limitations in her particular case is unpersuasive. Dakin argues that she did not know, and could not with reasonable diligence have learned, that Roundy's was also potentially liable as Pease's employer. Dakin admits, however, she knew she was hurt in April 2000. There is also no dispute she knew that Pease, Marciniak, and Langlade were responsible for her injuries. Dakin thus had knowledge both of injury and cause in April 2000.

¶ 17. Dakin had the means of further information available to her, in the form of police reports identifying Pease and Marciniak, but apparently took no steps to investigate either the two men or the accident. Dakin suggests she could not have known about Pease's relationship with his employer because she did not allege a safe place claim, under Wis. Stat. § 101.11, which might have brought that relationship to light. However, Dakin's decision not to pursue a legal avenue that might have produced useful information is not evidence of reasonable diligence.

¶ 18. Dakin also argues that Pease's failure to report the accident to his employer prevented her from learning that Pease worked for Copp's and therefore absolves her from the exercise of diligence. But this argument only adds circularity to burden shifting. Pease's decision not to tell Copp's about his near collision in the parking lot could not prevent an investigation never undertaken. Dakin suggests Pease's silence made discovering his relationship with Copp's more difficult, but there is no reason to believe the identity of Pease's employer would not have emerged, as it eventually did, through timely discovery. Speculation after the fact about why an investigation might have failed does not alter the fact that Dakin never attempted any investigation, before the statute of limitations expired, of a defendant known to her in April 2000. Dakin simply did nothing that might have produced more information and we conclude that, in this case, doing nothing was not an exercise of reasonable diligence.

¶ 19. Because we conclude that any notice to Roundy's in Dakin's initial complaint was insufficient to satisfy Wis. Stat. § 802.09(3) and that the discovery rule does not bar the application of the statute of limitations to Dakin's complaint, we reverse the order and remand the matter to the circuit court with directions to grant a summary judgment in favor of Roundy's, thereby dismissing it from the lawsuit.

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

       Appellants will be referred to collectively as "Roundy's" in the rest of this opinion.

       We granted the petition for leave to appeal the nonfinal order on June 1, 2004.

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

       Because Dakin does not respond to Roundy's argument about the tolling provisions, we deem that argument conceded. See Charolais Breeding Ranches, Ltd. v. FPC Secs. Corp., 90 Wis. 2d 97, 109, 279 N.W.2d 493 (Ct. App. 1979).

       The bus was owned by Marciniak's employer, Langlade Memorial Hospital.

       Pease filed a motion to dismiss based on allegations of defective service of process. The circuit court found that because Pease had not been properly served, Dakin had also failed to commence her action against him properly. See Wis. Stat. § 801.11. The circuit court dismissed the complaint against Pease without prejudice on November 18, 2003; Dakin later refiled.

       For reasons the parties do not agree on, Pease was not deposed until November 5, 2003, after the statute of limitations had expired. At that time, Pease testified he was employed by Copp's as a roving security person, moving between several stores. On the day of the accident, Pease was scheduled to work from 10 a.m. to 4 p.m. Because the Antigo Copp's was not Pease's home store, however, he was also being paid for his drive home. Pease was therefore "on-the-clock" when the accident occurred.

       Our discussion does not address Grothe because it is not directly on point. Grothe v. Valley Coatings, Co., 2000 WI App 240, ¶ 10-11, 239 Wis. 2d 406, 620 N.W.2d 463 (dealing with notice through a third-party summons and complaint). Bartels v. Rural Mut. Ins. Co., 2004 WI App 166, ¶ 14-15, 275 Wis. 2d 730, 687 N.W.2d 84, does construe the fair notice condition of the statute; however it simply applies established principles of law. See e.g., Korkow v. General Cas. Co., 117 Wis. 2d 187, 198-99, 344 N.W.2d 108 (Ct. App. 1984).

       The circuit court denied Roundy's motion to dismiss on the relation back theory; however, Dakin's brief to this court argues for affirmation of the decision primarily on an alternate ground, the discovery rule.

       Pease testified that he never reported the incident in the parking lot to Copp's because there was no contact between the vehicles. Dakin offered no evidence to counter that testimony. Although Dakin "believes that the evidence will show that Appellants had actual notice," we are bound by the record as it comes to us. See Eberhardy v. Circuit Court for Wood County, 102 Wis. 2d 539, 571, 307 N.W.2d 881 (1981). The record does show that an Antigo police car and an ambulance were in the Copp's parking lot after the accident, which might give rise to the inference a manager or some other employee might have known about the event. However, Dakin offers no evidence to support this inference. She does not identify where in the lot the accident took place nor does she establish whether it could have been seen from the store. The bare possibility that someone might have seen something is not enough to establish that Copp's had actual notice of an accident involving its employee, Pease.

        Hansen v. A.H. Robins, Inc., 113 Wis. 2d 550, 554, 335 N.W.2d 578 (1983), augmented the much older rule that a cause of action accrues where "there exists a claim capable of present enforcement, a suable party against whom it may be enforced, and a party who has a present right to enforce it" (quoting Barry v. Minahan, 127 Wis. 570, 573, 107 N.W 488 (1906)).

       Some federal courts have suggested that ordinary personal injury claims such as Dakin's should be treated differently than medical malpractice claims for the purposes of the discovery rule. See, e.g., Steele v. United States, 599 F.2d 823, 828 (7th Cir. 1979). In Steele, for example, the Seventh Circuit concluded that plaintiffs claim against the FAA was untimely despite the argument that he did not know that the FAA controlled the remote power switch that shocked him. The fact that plaintiff knew immediately not only that he was injured, but what caused the injury, put him on notice of an invasion of his legal rights, the court concluded. Id. Under such circumstances, it is the duty of the victim of the tort to discover the negligent acts and file a claim with the required statutory period. Id. However, no Wisconsin court has addressed this issue.

       According to Borello v. United States Oil, 130 Wis. 2d 397, 406-07, 388 N.W.2d 140 (1986), the Wisconsin rule for malpractice accrual is knowledge of an injury and knowledge the injury was probably caused by the defendant's conduct or product. Under Wisconsin law, it is not clear that knowledge of causality entails knowledge of both what and all possible who's.

       A few courts have addressed the unknown defendant problem in non-medical contexts. In Liuzzo v. United States, 485 F. Supp. 1274, 1282 (E.D. MI 1980), plaintiffs sought to bring charges against the FBI for the bureau's involvement in the 1965 murder of their mother, Viola Liuzzo. Liuzzo was shot by four Klansmen in the course of her civil rights work. Id. at 1276. Arrests were swiftly made and the Klansmen were convicted. Id. Years later, the chief witness in the case was identified as an FBI informer and evidence suggested the FBI may have had some responsibility for the murder. Id. at 1282. The court concluded that plaintiffs' claims were not barred by the statute of limitations: where plaintiffs had no reason to investigate the cause of their mother's death and no reasonable suspicion the FBI was involved, their claims did not accrue until they had some knowledge of FBI involvement. Id. at 1284.
      In a wrongful death action involving the sulfite agent used in a restaurant, the Arizona Court of Appeals considered whether the statute of limitations barred claims against a distributor whose identity remained unknown until after the statute of limitations had expired. Lawhon v. L.B.J. Institutional Supply, Inc., 765 P.2d 1003 (Ariz. Ct. App. 1988). The court concluded that both the "who" and "what" elements of causation were required for a claim to accrue, and remanded the case to the trial court so that it could hear evidence on whether the plaintiff had exercised reasonable diligence in attempting to identify the distributor.

       Pease did not move to Montana until after his marriage at the end of the summer of 2000. It thus should have been possible to investigate him in the months after Dakin's injury.

       Pease was twenty-four at the time of the accident. It thus would have been logical to assume he was employed by someone, raising at least the possibility of a vicariously liable defendant.


author: FINE, J.

text:
    Michael Eddy and Lisa Eddy, Plaintiffs, v. B.S.T.V. Inc. d/b/a Realty Executives, General Insurance Company of America and Bruce Kirchoff, Defendants-Third-Party Plaintiffs-Appellants, Chase Manhattan Mortgage Corporation, Defendant, v. American Family Mutual Insurance Company and Indiana Insurance Company, Intervenors-Respondents, Heather Winser, Third-PartyDefendant.
    Court of Appeals

      No. 04-1664.

      Submitted on briefs February 8, 2005.

    Decided March 8, 2005.

    2005 WI App 78
    (Also reported in 696 N.W.2d 265.)

      On behalf of the defendants-third-party plaintiffs-appellants, the cause was submitted on the briefs of Michael R. Vescio of O'Hagan, Smith & Amundsen, LLC, of Greenfield.

      On behalf of American Family Mutual Insurance Company, intervenor-respondent, the cause was submitted on the brief of Terry J. Booth of Piper & Schmidt, of Milwaukee.
    On behalf of Indiana Insurance Company, intervenor-respondent, the cause was submitted on the brief of Patrick W. Brennan of Crivello, Carlson & Mentkowski, of Milwaukee.
    Before Fine, Curley and Kessler, JJ.

       Petition to review denied 6-1-2005.

   FINE, J.

¶ 1. B.S.T.V, Inc. d/b/a Realty Executives, General Insurance Company of America, and Bruce Kirchoff appeal the trial court's orders granting summary judgment to American Family Mutual Insurance Company and Indiana Insurance Company, declaring that neither American Family nor Indiana Insurance provided coverage to Realty Executives in connection with a lawsuit brought against Realty Executives and Kirchoff, its employee, by Michael and Lisa Eddy. General Insurance also insured Realty Executives, and its coverage is not an issue on this appeal. The issue presented is whether the professional-services-exclusion clauses in the American Family and Indiana Insurance policies issued to Realty Executives applied to the Eddys' claims that Realty Executives and Kirchoff did not discover and disclose to them that the house they purchased through Realty Executives was contaminated by mold. The trial court ruled that the exclusion clauses applied. We affirm.

¶ 2. Our review of a trial court's grant of summary judgment is de novo. Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315-317, 401 N.W.2d 816, 820-821 (1987). Additionally, unless there are factual disputes, application of insurance policies and their provisions is a legal issue that we also review de novo. Smith v. Katz, 226 Wis. 2d 798, 805, 595 N.W.2d 345, 349 (1999). When an insurance company disputes coverage and asserts that it has no duty to defend or indemnify the policy holder against certain claims, we are limited to the four corners of the complaint in determining whether there is coverage. Fireman's Fund Ins. Co. v. Bradley Corp., 2003 WI 33, ¶ 19, 261 Wis. 2d 4, 18, 660 N.W.2d 666, 673. When an insurance policy is clear on its face, we apply it, as we do all contracts, as it reads. See Dykstra v. Arthur G. McKee & Co., 92 Wis. 2d 17, 38, 284 N.W.2d 692, 702-703 (Ct. App. 1979) (unambiguous contracts are enforced as they are written); Smith, 226 Wis. 2d at 806, 595 N.W.2d at 350 (insurance polices are contracts that are " 'governed by the same rules of construction that apply to other contracts'") (quoted source omitted).

¶ 3. The Eddys' amended complaint alleges the following that is material to our analysis:

• The Eddys are married to one another.
• Kirchoff is a Wisconsin-licensed real estate broker, employed by Realty Executives.
• Chase Manhattan Mortgage Corporation owned a home in Lannon, Wisconsin, as the result of a mortgage foreclosure.
• "During early 2001 the home experienced a catastrophic pipe failure resulting in water collecting throughout the home including the crawl space below the home and the walls."
• The home was infested with mold contamination, and Chase Manhattan Mortgage knew it.
• "During early 2001 Defendant Chase Manhattan Mortgage Corporation and/or its agents hired tradesmen to conceal and fix the pipes while failing to remediate the hazardous condition created by the water including the hazard of the home to become contaminated by mold."
• Realty Executives had a listing agreement with Chase Manhattan Mortgage to sell the home.
• Dale Zimmer contracted to buy the home in the spring of 2001 but "discovered defects" in the home and "was relieved by Chase Manhattan Mortgage Corporation of his contract."
• "During the spring of 2001 real estate agent Michael Reed advised both defendant Bruce Kirchoff and his principal, defendant Chase Manhattan Mortgage Corporation in writing, that the home contained multiple defects and provided both defendants with the Notice attached as Exhibit 'A.'"
• The "Exhibit 'A'" is a "Notice Relating to Offer to Purchase" (uppercasing omitted) that indicated on its face that it was drafted by "Mike Reed Realty Executives," although the "Party Giving Notice" is "Dale Zimmer."
• The Notice designated as "Exhibit 'A'" is dated June 11, 2001, and recites: "Buyer is giving notice that said inspection has failed due to many serious defects such as rotting flooring, improper wiring, plumbing, venting, serious signs of moisture."
• "During the summer of 2001, the [Eddys] were shown the home by agents of Chase Manhattan Mortgage Corporation but were not told either orally or in writing that the home had 1.) suffered catastrophic water damage, or 2.) that the damage was not visible or 3.) that the home was contaminated by mold or 4.) that the home had multiple other defects or 5.) that the home had failed a home inspection and that both defendants were in possession of Exhibit 'A.'"
• The Eddys bought the home on July 20, 2001, and were not given either "a property condition report" or a copy of "Exhibit 'A.'"
• The home was contaminated by toxic mold, and the Eddys suffered serious health and financial consequences.

Additionally, paragraph 14 of the amended complaint alleged: "That agents of Realty Executives including Bruce Kirchoff have been provided with training in identifying mold and mold related hazards and of their obligation under Wisconsin law to disclose material defects to home buyers." Although not set out in haec verba, we assume that the "agents of Chase Manhattan Mortgage Corporation" referred to in the third-from-last bulleted paragraph encompasses Realty Executives and Kirchoff.

¶ 4. Both the American Family and the Indiana Insurance policies issued to Realty Executives have similar professional-services exclusions.

¶ 5. The Indiana Insurance policy in effect from March 28, 2001, through March 28, 2002, provides, as material here: "This insurance does not apply to: ... 'Bodily injury', 'property damage', 'personal injury' or 'advertising injury' due to rendering or failure to render any professional service. This includes but is not limited to: ... Services while you are acting in a fiduciary or representative capacity including but not limited to, Real Estate Agents."

¶ 6. American Family did not insure Realty Executives before March 28, 2002, and the parties dispute whether, as a result, there would nevertheless be coverage for the Eddys' claims if the exclusion clause did not apply. We do not have to resolve that dispute, however, or address the other grounds asserted by American Family and Indiana Insurance for affirming the trial court's orders, because, as we will see, the exclusion clauses in both companies' policies bar coverage for the injuries claimed by the Eddys. See Gross v. Hoffman, 227 Wis. 296, 300, 277 N.W. 663, 665 (1938) (only dispositive issue need be addressed).

¶ 7. There are three American Family policies that the appellants contend provide coverage to Realty Executives, and they each have the same clause, which, as material here, provides: "This insurance does not apply to: ... PROFESSIONAL LIABILITY. We will not pay for damages due to bodily injury or property damage arising out of the rendering or the failure to render professional services by any insured who is a(n)... insurance agent or real estate agent." (Bolding omitted.)

¶ 8. The core of the Eddys' complaint against Realty Executives and Kirchoff is that they sold the Eddys a home that they knew or should have known was infested with mold contamination. Both Realty Executives and Kirchoff are in the home-selling business. They are "real estate agents" as that phrase is used in all the policies. Thus, their sale to the Eddys of the contaminated home was in the course of their "rendering ... professional services" as real estate agents.

¶ 9. Realty Executives and Kirchoff contend, however, that paragraph 14 of the amended complaint asserts a claim against them that removes their potential liability from the policies' exclusions because, they argue, it posits a duty that extends beyond their rendering professional services as real estate agents. They rely on the federal district court decision in Chapman v. Mutual Service Casualty Insurance Co., 35 F. Supp. 2d 693 (E.D. Wis. 1999), which concerned a claim by a family injured by improperly remediated lead paint in a house sold to them by a real-estate company. After the house failed an initial lead-paint inspection, the real-estate company got a painter to repaint the outside of the house. Id., 35 F. Supp. 2d at 695. After the repainting, the house passed inspection. Ibid. The family moved in and soon their son suffered lead-paint poisoning. Ibid. The family claimed that the real-estate company was negligent in its "hiring, supervising and inspecting the work of the paint contractors ... and the inspector^ and its] failure to warn and/or notify the [family] of lead based paint and its hazards," and related alleged failings in connection with the lead-based paint. Ibid. The judge held that the real-estate company's business-liability policy covered the family's claims because, in the judge's view, those claims did not encompass "professional service" as that phrase was used in the policy's list of exclusions. Id., 35 F. Supp. 2d at 696-698.

¶ 10. As material here, the Chapman policy excluded from coverage: " 'Bodily injury,' 'property damage,' 'personal injury' or 'advertising injury' due to rendering or failure to render any professional service. This includes but is not limited to: ... Supervisory, inspection or engineering services." Id., 35 F. Supp. 2d at 696. Unlike the policies here, however, the policy in Chapman did not specifically reference professional services rendered as a "real estate" agent, and the district judge held that the Chapman policy's use of the phrase "professional service" did not apply to the " 'physical or manual'" work of painting, inspecting, supervising painting or inspecting, or warning about the dangers of lead paint. Id., 35 F. Supp. 2d at 698 (quoted source omitted). Rather, in the judge's view, for something to be "professional services" it had to " 'in-volv[e] specialized knowledge, labor or skill which is predominantly mental or intellectual.'" Ibid, (brackets added; quoted source omitted). Even allowing for this somewhat elitist view of labor-classification, which we reject, it is clear that in this case the Eddys have alleged a breach of. Realty Executives's and Kirchoff s professional-service responsibilities as real estate agents, and thus the exclusions apply.

¶ 11. Paragraph 14 of the Eddys' amended complaint has two elements, and alleges:

• "That agents of Realty Executives including Bruce Kirchoff have been provided with training in identifying mold and mold related hazards"; and
• "That agents of Realty Executives including Bruce Kirchoff have been provided with training ... [concerning] their obligation under Wisconsin law to disclose material defects to home buyers."

Neither of these imbricated allegations removes the claims asserted by the Eddys against Realty Executives or Kirchoff from the exclusion clauses.

¶ 12. As the trial court recognized, the first bul-leted allegation is prefatory — it would be a material allegation if either knowledge of mold or an ability to identify it was a predicate for an asserted liability. Here, of course, the asserted liability is something that it is claimed Realty Executives and Kirchoff did not do— warn the Eddys that the home they were selling was infested with mold. Thus, any "training" in mold identification, if material in this case, kicks in only because the defendants are accused of not doing something they should have done while "rendering" professional services as real-estate agents.

¶ 13. As the trial court also recognized, the second bulleted allegation is also prefatory — it kicks in only because of the claim that Realty Executives and Kir-choff violated a statute, presumably Wis. Stat. § 452.133, referred to by the parties, which establishes the professional-services duties of real-estate brokers to not only their clients but also, insofar as subsection (1) is concerned "to all parties to a transaction." (Small capitals omitted.) Specifically, § 452.133(l)(c) requires every real-estate broker to: "Disclose to each party all material adverse facts that the broker knows and that the party does not know or cannot discover through reasonably vigilant observation, unless the disclosure of a material adverse fact is prohibited by law." Here again, any "training" about their "obligation under Wisconsin law to disclose material defects to home buyers," if pertinent in this case, is so only because they are accused of violating § 452.133(l)(c), which applies only to real-estate professionals while "rendering" professional services as real-estate agents.

¶ 14. Steven G. v. Herget, 178 Wis. 2d 674, 505 N.W.2d 422 (Ct. App. 1993), upon which Realty Executives, Kirchoff, and General Insurance also rely, supports the trial court's orders. There, a dentist was sued by child-victims who were sexually abused by him while they were in his dentist's chair under anesthesia. Id., 178 Wis. 2d at 679-680, 505 N.W.2d at 424. The dentist's professional-liability carrier sought a declaration that its policy did not apply because the sexual assaults were not included in the insuring agreement, which "provided 'protection against professional liability claims which might be brought against you in your professional practice as a dentist,' covering 'damages resulting from ... providing or withholding of professional services.'" Id., 178 Wis. 2d at 680, 505 N.W.2d at 424. We agreed. Id., 178 Wis. 2d at 684-692, 505 N.W.2d at 426-429. We noted that" 'professional services' does not include all forms of a professional's conduct simply because a person is a professional." Id., 178 Wis. 2d at 688, 505 N.W.2d at 427. Rather, " 'there must be a causal relationship between the alleged harm and the complained-of professional act or service.'" Id., 178 Wis. 2d at 689, 505 N.W.2d at 427 (quoted source and brackets omitted). This case presents the obverse: Realty Executives and Kirchoff are being sued precisely because of what they did or did not do qua real-estate professionals. Accordingly, the policy exclusions apply.

By the Court. — Orders affirmed.


author: SNYDER, J.

text:
    In re the Marriage of: Deanne M. Weiler, Petitioner-Appellant, v. Brent R. Boerner, Respondent-Respondent.
    Court of Appeals

      No. 03-2606.

      Oral argument November 2, 2004.

    Decided March 9, 2005.

    2005 WI App 64
    (Also reported in 695 N.W.2d 833.)

      On behalf of the petitioner-appellant, the cause was submitted on the briefs of Richard E. Reilly and Jennifer A. Lino of Gimbel, Reilly, Guerin & Brown, Milwaukee. There was oral argument by Richard E. Reilly.

    On behalf of the respondent-respondent, the cause was submitted on the brief of Patricia L. Grove of Hailing & Cayo, S.C., Milwaukee. There was oral argument by Gregory J. Banchy.

    Before Anderson, PJ., Brown and Snyder, JJ.
   SNYDER, J.

¶ 1. Deanne M. Weiler appeals from a divorce judgment, contending that the trial court erroneously exercised its discretion by imputing enhanced education income to her in the child support, maintenance, property division, and marital debt provisions. We agree that the trial court erred in imputing such income to child support and reverse. However, we reject Deanne's contention that enhanced education income may not be considered in determining maintenance, property division, and marital debts and affirm as to those determinations.

BACKGROUND

¶ 2. Deanne and Brent R. Boerner were married on August 4, 1984, and twin children were born to the marriage on December 17, 1991. At the time of the divorce, Brent earned approximately $85,092 annually ($7,091.06 per month) and Deanne earned $35,568 annually ($2,964 per month).

¶ 3. Brent had a Bachelor of Business Administration (BBA) degree from the University of Wisconsin-Oshkosh at the time of the marriage and Deanne was one academic year short of obtaining an undergraduate degree from Marquette University. Deanne obtained a Bachelor of Arts (BA) degree in 1985, a master's degree from the University of Wisconsin-Milwaukee in rehabilitation counseling in 1988, and a doctorate degree (Ph.D.) in psychology in 2000. On June 6, 2003, the date of the divorce, Deanne had twice taken the Wisconsin test to be a licensed psychologist but had not been successful. Deanne was, therefore, employed as a clinical therapist at the time of the divorce.

¶ 4. The focus of the trial court proceedings and of this appeal is the enhanced education that Deanne received during the marriage. Brent argued that he should be compensated for the enhanced education by way of maintenance and/or property division. Brent obtained expert input from vocational counselor Timothy J. Riley and economist Dr. Stuart M. Glosser as to the value of Deanne's enhanced education and the income potential it would generate. Brent calculated Deanne's expected enhanced income by using Deanne's prior testimony and referring, in part, to the expert opinion evidence presented by Riley and Dr. Glosser. Deanne presented evidence of her current therapist income of $35,568 per year, her status as professionally unlicensed, and her desire and intent to pursue and obtain professional licensing.

¶ 5. Riley opined that Deanne would earn $55,000 to $65,000 per year as a full-time psychotherapist in private practice. He further testified that the $55,000 to $65,000 per year income projection assumed that Deanne had passed the Wisconsin test and had acquired her license. Riley later suggested that this income projection would apply regardless of whether Deanne obtained her psychology license.

¶ 6. Dr. Glosser testified that Brent asked him to calculate the enhanced earnings of receiving a Ph.D. in psychology. Dr. Glosser opined that to a reasonable degree of economic probability the enhanced earnings are approximately $656,000. Dr. Glosser assumed Deanne would work for twenty-six years and would retire at age sixty-five. He also testified that he expected Deanne to earn $53,000 per year through 2007; $59,000 in 2008; $66,000 in 2009; and $80,000 in 2010. Dr. Glosser factored in inflation, taxes, and life probability in his projection methodology.

¶ 7. Brent represented that Deanne could earn $123,520 to $148,480 per year if she obtained professional licensing. Unlike Riley's calculations, Brent's calculations failed to account for uncollected fees, and he conceded that if clients failed to pay for Deanne's professional services, his income projection was high.

¶ 8. The trial court acknowledged that Deanne had taken and failed the psychology license test twice, but opined that "there is every reason to hope and believe that the third time will be the charm for [Deanne] having nearly obtained that licensure the last time around." The trial court noted that "the birth of twins and the time and effort that it takes to care for and raise those children is a factor and the court does not intend to diminish that by any means here today." Further, the court concluded, "I don't think we have the circumstance where there was a traditional sacrifice on the part of [Brent] foregoing his education. He was able obviously to continue to pursue his career."

¶ 9. The trial court concluded that "a hundred thousand dollars is not immediately available and that [figure] doesn't necessarily reflect the uncollectibles but we have the other factor that I believe the license is obtainable within this calendar year and those would in effect balance each other out." The court valued the education degrees received by Deanne during the marriage at $50,000, assigned the education loan.balance of $14,053 to Deanne as her sole and separate debt, and imputed income to Deanne at the time of the divorce at $100,000 per year.

ISSUE

¶ 10. Deanne challenges the trial court's legal authority to use her enhanced education to determine child support, maintenance, property division, and marital debts. We will first address the application of marital enhanced education to the maintenance, property division, and debt assignment determinations.

MAINTENANCE, PROPERTY DIVISION AND MARITAL DEBT

¶ 11. Generally, maintenance and property division determinations are reviewed under the erroneous exercise of discretion standard. Van Offeren v. Van Offeren, 173 Wis. 2d 482, 492, 496 N.W.2d 660 (Ct. App. 1992); Jasper v. Jasper, 107 Wis. 2d 59, 63, 318 N.W.2d 792 (1982). We affirm the trial court's decision as long as it reached a rational decision based upon the application of the correct legal standards to the facts of the case. Smith v. Smith, 177 Wis. 2d 128, 133, 501 N.W.2d 850 (Ct. App. 1993). Failure to apply the correct legal standards is an erroneous exercise of discretion. LeMere v. LeMere, 2003 WI 67, ¶ 14, 262 Wis. 2d 426, 663 N.W.2d 789. We decide any questions of law which may arise during our review of an exercise of discretion independently of the trial court. Id.

¶ 12. The trial court imputed enhanced education value and income to Deanne in order to achieve an equalization of income of the parties for the purpose of maintenance and property division. As to maintenance, the court stated: "The ultimate [maintenance] decision ... is that the benefit to [Brent] because of the support of the enhanced earning capacity of [Deanne] is in the form of no maintenance being awarded to [Deanne] .. .." Further, the court stated: "[I]n terms of the enhanced value of the degree obtained and the pending licensure of [Deanne] ... I do not believe that any maintenance is due and owing to [Deanne] at any time. As far as [Brent] is concerned, I am going to hold open maintenance until the minor children's age of majority . ..

¶ 13. Maintenance payments are subject to, among other factors, consideration of statutory factors, including the "educational level of each party at the time of marriage and at the time the action is commenced," Wis. Stat. § 767.26(4) (2003-04), and the "contribution by one party to the education, training or increased earning power of the other," § 767.26(9). See Haugan v. Haugan, 117 Wis. 2d 200, 208, 343 N.W.2d 796 (1984).

¶ 14. Turning to the property division, we will not disturb the trial court's division of marital property unless there is an erroneous exercise of discretion. Jasper, 107 Wis. 2d at 63. Thus, we will uphold the trial court's discretionary determination of property division if it applied proper legal standards based upon facts appearing in the record. See id. at 64. Wisconsin Stat. § 767.255(3)(g) provides that the trial court may consider, among other factors, "[t]he earning capacity of each party, including educational background, training, [and] employment skills" in determining marital property division.

¶ 15. Haugan teaches: "The legislature recognized in the Divorce Reform Act of 1977 that the wife or husband who invested in a spouse's education should be compensated upon divorce." Haugan, 117 Wis. 2d at 207. "Such compensation may be accomplished under the statutes through maintenance payments, property division, or both." Id. at 208 (emphasis added).

¶ 16. Deanne contends that the trial court wrongly double counted the value of the enhanced education benefit for the purpose of determining property division and maintenance. We disagree. There is no absolute rule against double counting. Hokin v. Hokin, 231 Wis. 2d 184, 203, 605 N.W.2d 219 (Ct. App. 1999). Here, Haugan provides the trial court with the authority to consider such enhanced education for the determination of "maintenance payments, property division, or both." Haugan, 117 Wis. 2d at 208 (emphasis added).

¶ 17. The trial court held maintenance open to Brent solely for the purpose of ensuring payment of debts and obligations until the children attain the age of eighteen years. A trial court is not precluded from holding open a determination on maintenance as long as the proper statutory criteria are considered. Preiss v. Preiss, 2000 WI App 185, ¶ 22, 238 Wis. 2d 368, 617 N.W.2d 514. Because the trial court followed the applicable Wisconsin statutes and applied the Haugan legal standard to the facts of this case concerning marital enhanced education, there was no erroneous exercise of discretion, and we affirm the trial court's holdings as to maintenance and property division.

¶ 18. The trial court excluded the outstanding balance of Deanne's education enhancement debt, $14,053, from the marital estate and assigned it as Deanne's sole and separate debt. Deanne objects. It is well established that a marital estate "include [s] all of the property and obligations of either party which were acquired before or during the marriage unless specifically exempted by statute." McLaren v. McLaren, 2003 WI App 125, ¶ 8, 265 Wis. 2d 529, 665 N.W.2d 405. In McLaren, we held that the trial court did not erroneously exercise its discretion when it found the student loans to be marital debt. Id., ¶ 9. Here, based upon Deanne's enhanced education benefit, the trial court found that the debt was not marital. We conclude that the trial court properly examined the facts, considered the relevant law, used a rational process in assigning the education debt solely to Deanne and did not, therefore, erroneously exercise its discretion.

CHILD SUPPORT

¶ 19. The determination of child support rests within the sound discretion of the trial court and will not be overturned unless the trial court abuses its discretion. Dittberner v. Dittberner, 54 Wis. 2d 671, 676, 196 N.W.2d 643 (1972). Proper discretion is exercised where the record reflects that the trial court considered the needs of the custodial parent and children and the ability of the noncustodial parent to pay child support. See id.

¶ 20. The criteria generally employed in making a child support determination are well settled:

These needs are ordinarily established by a consideration of the wife's assets and income, her special needs, the age and health of both the wife and children and their customary station in life. The ability of the husband to pay is usually determined by his income, assets and debts as well as his age and health. These determinations are to be made upon the basis of the circumstances existing at the time of the divorce.

Anderson v. Anderson, 72 Wis. 2d 631, 643, 242 N.W.2d 165 (1976) (emphasis added).

¶ 21. Here, the trial court ordered that child support be held open. The court supported that determination based upon "the asset of [Deanne's] Ph.D. in psychology" and upon her imputed enhanced education income: "[T]here is an appropriate application of the value of that [education] degree in terms of the child support, maintenance and property division that will be reflected in the balance of my decision here today." (Emphasis added.)

¶ 22. The trial court provided the following rationale for holding child support open:

Child support is held open at this time and indefinitely. I am concerned as the parties had expressed about the potential for litigation in that regard in the future, but I am also mindful the court cannot predict everything and that there may be circumstances that would require one party or the other to pay child support to their other ex-spouse, and I think under the circumstances it is appropriate to leave that open. I also believe that under the circumstances that by providing some of the assets to the petitioner that the pursuit of that licensing should be immediate; that the court attempted to make funds available for that and upon obtainment of that I think there should he an approximation of equalization of the incomes here that would not make child support necessary. And so I am holding that open.

¶ 23. We first note that Brent never requested that Deanne's enhanced education be considered in determining child support. Second, contrary to the trial court's rationale for holding child support open, Haugan does not address child support in the context of enhanced education benefits during marriage. Third, the record does not include any discussion, determination or request that the trial court consider "shirking" on the part of Deanne. Fourth, while custody and placement of the children were part of the parties' Marital Settlement Agreement (MSA) approved by the trial court and incorporated into the judgment, any evidence of the impact of the MSA upon child support is lacking. The MSA and judgment address the children's variable expenses, life insurance, heath care insurance, and uncovered expenses. However, a joint legal custody order does not affect the amount of child support. See Wis. Stat. § 767.25(7).

¶ 24. Whether an enhanced education benefit may be applied to child support is a question of law which we review independently. See LeMere, 262 Wis. 2d 426, ¶ 14. During the hearing, Dr. Glosser responded to Brent's counsel as follows:

Q You have no way of knowing now what [Deanne] will actually earn over the rest of her professional lifetime, correct?
A No, I do not have a crystal ball.

¶ 25. As suggested in Dr. Glosser's opinion, child support does not lend itself to a crystal ball analysis. Child support determinations are to be made upon the basis of the circumstances existing at the time of the divorce. Anderson, 72 Wis. 2d at 643. We are satisfied that Haugan does not support the trial court's determination to hold child support open. An exercise of discretion based on a mistaken view of the law is an erroneous exercise of discretion. Schmid v. Olsen, 111 Wis. 2d 228, 237, 330 N.W.2d 547 (1983).

¶ 26. Whenever a divorce judgment is entered the trial court shall order "either or both parents to pay an amount reasonable or necessary to fulfill a duty to support a child." Wis. Stat. § 767.25(1)(a). A hold-open determination indicates that an order for child support is not necessary based upon current circumstances. Because we are unable to discern any rationale for the child support hold-open order (other than reconciliation for Deanne's enhanced education benefit) and because the decision lacks sufficient independent rationale based upon the needs of the children and the current financial circumstances of the parties, we conclude that the trial court erroneously exercised its discretion. We must therefore reverse and remand on the issue of child support.

¶ 27. In sum, we are satisfied that the trial court had the authority to consider the enhanced education benefit received by Deanne during the marriage in ordering maintenance and property division. We reverse and remand the child support hold-open order for further consideration by the trial court. While we reverse only as to the child support order, on remand the trial court may in its discretion reconsider maintenance and property division.

By the Court. —Judgment affirmed in part; reversed in part and cause remanded with directions.

       Dr. Glosser testified that he had a Ph.D. in economics and had coauthored an article entitled "Enhanced Earning Capacity: The Most Ignored and Undervalued Asset in the Marriage."

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

       The children receive nothing from maintenance or property division and, like a pension benefit, an enhanced education benefit would be counted "for the first time between the parent and the child" for child support purposes. Cook v. Cook, 208 Wis. 2d 166, 181, 560 N.W.2d 246 (1997).

       The question of whether the trial court relied on "shirking" in ordering child support held open was raised by Deanne in her appellate brief. Brent does not refute that "shirking" or "Deanne's voluntary decision to 'not work hard enough'" was part of the court's reasoning for holding child support open, and we need not address that concept further. See Charolais Breeding Ranches, Ltd. v. FPC Sec. Corp., 90 Wis. 2d 97, 109, 279 N.W.2d 493 (Ct. App. 1979).

       While property division, maintenance, and child support differ from each other, they overlap and are related in respect to the total financial circumstances of the parties. See Cook, 208 Wis. 2d at 180. Also, under the statutes the trial court is required to consider property division in setting child support. Id.