2005 brings more kudos than criticism for court of appeals

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Gregg Herman

It's time for our annual review of court decisions from the past year — one last opportunity for a kick at the cat where I disagreed with the court and, much less fun, compliments where I think they got it right. This year, there are a lot more compliments than criticisms for the Wisconsin Court of Appeals.

Highlights

I'll start on the positive side.

Derr v. Derr, 2005 WI App 63, 280 Wis. 2d 681, 696 N.W.2d 170, was, for the most part, one of the best researched and reasoned family law cases in years. In the case, the court of appeals held that the circuit court correctly categorized an apartment building as the husband's non-divisible property, but that the court should have deemed the mortgage debt a divisible debt. The court took the opportunity to examine the development of the law of inherited and gifted property and to provide a road map for courts to follow in dealing with this issue. This case should serve as a lodestar for family courts for years to come when dealing with inherited and gifted issues.

My only quibble with the case involves the holding that the circuit court properly determined that the husband wasted $45,000 by day trading. The concern is that trial courts might treat this holding narrowly based on the husband's failure to provide credible information regarding the day trading, rather than making bad investment decisions being dissipation in and of itself. Fortunately, a subsequent court of appeals case went a long way in clarifying this distinction, as will be discussed later.

Continuing the kudos, family lawyers in this state owe a debt of gratitude to the District IV Court of Appeals for their opinion in Kohl v. DeWitt, Ross & Stevens, S.C. 2005 WI App 196, __ Wis. 2d __, 704 N.W.2d 586. In addition, gratitude is owed to the Family Law Section of the State Bar of Wisconsin, which petitioned the court of appeals to publish this case, and to the court's publication committee, which granted the petition.

In the case, the appellate court affirmed the order of Dane County Circuit Court Judge Sarah B. O'Brien that awarded DeWitt an attorney fee judgment upon their withdrawal of representation of the wife in her divorce action. The case answered in the affirmative the frequent question of whether Wis. Stat. § 767.23(3)(a) limits attorney fee judgments to circumstances of substitution of counsel or whether it also extends to withdrawal of counsel. It will be interesting to see in the future whether this holding leads to a larger number of lawyers seeking withdrawal from cases, knowing that they can ask the court for a judgment for unpaid fees.

Moving on, in the arena of child issues, in Goberville v. Goberville, 2005 WI App 58, 280 Wis. 2d 405, 694 N.W.2d 503, the court of appeals reversed and remanded the placement schedule contained in the judgment of divorce rendered by Judge Eric J. Wahl, Eau Claire County Circuit Court. The court held that the trial court did not demonstrate on the record that it had considered the relevant factors under Wis. Stat. § 767.24(5) in rendering its placement ruling, rather than relying solely on the recommendation of the GAL. The case once again reminds judges that they cannot merely "rubber stamp" the recommendations of a GAL.

Along these lines, in Vlies v. Brookman, 2005 WI App 158, __ Wis. 2d __, 701 N.W.2d 642, the main thrust of the opinion reversed the judgment of Judge Paul V. Malloy, of the Ozaukee County Circuit Court, regarding family support and attorney fees. The court found that while the trial court discussed the statutory factors that need to be considered in a support case, the trial court did not explain how these factors led to its support order. Of more importance, however, the appellate court for the first time held that a trial court has authority to require that a support payor maintain life insurance for the benefit of minor children. While such an order is commonly stipulated by the parties, it is helpful to have a court case specifically authorizing such an order if there is a disagreement.

Similarly, the appellate court answered a dilemma in Guelig v. Guelig, 2005 WI App 212, __ Wis. 2d __, 704 N.W.2d 916. By its literal wording, Wis. Stat. § 767.24(1m)(a) allows a trial court to decide custody and physical placement by default if a party fails to timely file a parenting plan. While it certainly is important to obey court rules and timelines, these should not trump the best interests of the children. In Guelig, the appellate court held that even if waiver is present, an overall best interest determination is still required.

As noted above, a later case clarified the one troubling aspect of Derr v. Derr. In Noble v. Noble, 2005 WI App 227, __ Wis. 2d __, 706 N.W.2d 166, the court of appeals affirmed a judgment rendered by Faye M. Flancher, Racine County Circuit Court, which, in relevant part, denied the wife's marital waste claim premised on her husband's failure to undertake an investment opportunity. In Derr, we were concerned that a trial court could read the case as allowing a waste claim where a legitimate business opportunity went sour. In Noble, the court of appeals held that there is no requirement that a "party take advantage of an opportunity to acquire property that would increase the value of the marital estate" (emphasis in original). This holding helps clarify that the legal concept of waste does not make a court the financial guarantor of decisions made during the marriage.

A Troubling Decision?

However, all was not positive.

My vote for the most troubl
ing case of the year — and maybe for many years — is Hacker v. Hacker, 2005 WI App 211, __ Wis. 2d __, 704 N.W.2d 371, which reversed and remanded the judgment rendered by Judge Dennis C. Luebke, Outagamie County Circuit Court, which reduced the wife's maintenance. The practical effect of the case may very well be to overrule DeLaMatter v. DeLaMatter, 151 Wis. 2d 576, 586 87, 445 N.W.2d 676 (Ct. App. 1989), which allowed a trial court to avoid being an enabler to an alcoholic by making the refusal to pursue treatment a factor a circuit court may consider in making a maintenance determination.

In Hacker, the appellate court distinguished DeLaMatter on the grounds that the wife did not refuse to seek treatment but rather had a number of relapses. The court then made the comment that, "[N]or is alcoholism the only disease that is difficult to treat. Not all cancer treatments succeed and many Americans afflicted with diabetes struggle to control their symptoms." Equating a voluntary condition such as alcoholism with involuntary conditions such as cancer or diabetes is, at a minimum, troubling, and at a maximum, offensive to people with involuntary conditions. The effect is to allow people to make inappropriate choices but still avoid responsibility for those choices. Unfortunately, the Supreme Court denied the petition for review.

Speaking of the high court, look for my article on its 2005 accolades and criticisms next week.

Gregg Herman is a shareholder with Loeb & Herman S.C. in Milwaukee, which practices exclusively family law. FamLawUpdate, a free e-mail service of Loeb & Herman, is available by going to www.loebherman.com or sending an e-mail to [email protected].