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Weekly Case Digests — May 22-26, 2017

By: Rick Benedict//May 26, 2017//

Weekly Case Digests — May 22-26, 2017

By: Rick Benedict//May 26, 2017//

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7th Circuit Digests

7th Circuit Court of Appeals

Case Name: United States of America v. James G. Wheeler

Case No.: 16-3435

Officials: EASTERBROOK, SYKES, and HAMILTON, Circuit Judges.

Focus: Plea – Sentencing

James Wheeler pleaded guilty to an attempt to obstruct interstate commerce by robbery, in violation of the Hobbs Act, 18 U.S.C. §1951(a), and to using a gun (by shooting someone) during that crime, in violation of 18 U.S.C. §924(c)(1)(A)(iii). The guilty plea did not reserve any issue for appeal under Fed. R. Crim. P. 11(a)(2). To the contrary, Wheeler acknowledged in the written plea agreement that he “acknowledges and understands that he surrenders any claims he may have raised in any pretrial motion.” The district court sentenced him to 108 months for the Hobbs Act offense and a consecutive 120 months for the firearms offense

Affirmed

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7th Circuit Court of Appeals

Case Name: Cathleen Kennedy v. The Lilly Extended Disability Plan

Case No.: 16-2314

Officials: POSNER, MANION, and HAMILTON, Circuit Judges.

Focus: Disability Benefits

Cathleen Kennedy, the plaintiff, was hired by Lilly in 1982 and rose rapidly, eventually becoming an executive director in the company’s human resources division, with a monthly salary of $25,011. But at the beginning of 2008 she was forced to quit work because of disabling symptoms of fibromyalgia. As a participant in the company’s Extended Disability Benefits plan, she requested benefits upon ceasing to work, and effective May 1, 2009, was approved for monthly benefits of $18,972.44. Three and a half years later, however, her benefits were terminated, precipitating this suit by her against Lilly’s self-funded Extended Disability Plan based on the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et seq., which so far as pertains to this case sets minimum standards for voluntarily established health and pension plans in private industry. See Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105, 115 (2008). Lilly’s disability plan has discretion to deny claims that it deems not to meet its standard, but a reviewing court will overturn a denial of benefits if the plan’s decision is unreasonable. Edwards v. Briggs & Stratton Retirement Plan, 639 F.3d 355, 360 (7th Cir. 2011).

Cathleen Kennedy, the plaintiff, was hired by Lilly in 1982 and rose rapidly, eventually becoming an executive director in the company’s human resources division, with a monthly salary of $25,011. But at the beginning of 2008 she was forced to quit work because of disabling symptoms of fibromyalgia. As a participant in the company’s Extended Disability Benefits plan, she requested benefits upon ceasing to work, and effective May 1, 2009, was approved for monthly benefits of $18,972.44. Three and a half years later, however, her benefits were terminated, precipitating this suit by her against Lilly’s self-funded Extended Disability Plan based on the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001 et seq., which so far as pertains to this case sets minimum standards for voluntarily established health and pension plans in private industry. See Metropolitan Life Insurance Co. v. Glenn, 554 U.S. 105, 115 (2008). Lilly’s disability plan has discretion to deny claims that it deems not to meet its standard, but a reviewing court will overturn a denial of benefits if the plan’s decision is unreasonable. Edwards v. Briggs & Stratton Retirement Plan, 639 F.3d 355, 360 (7th Cir. 2011).

and experience.” Kennedy’s benefits were revoked by Lilly’s Employee Benefits Committee (the administrator of the plan), on the ground that her fibromyalgia was not disabling. The district judge granted summary judgment in favor of Ms. Kennedy and awarded her $537,843.81 in past benefits (benefits she should have received but did not) and prejudgment interest, and in addition the judge ordered Lilly to reinstate Kennedy’s disability benefits retroactive to December 2012 and resume the payment of her monthly benefits. Lilly based its unsuccessful case in the district court on evidence presented by a number of doctors (oddly not including Dr. Clauw), but the evidence turned out to be a hodgepodge. For example, Lilly sent Kennedy to be examined by a Dr. Schriber in Dayton, Ohio, more than 100 miles from Kennedy’s home in Indianapolis. The doctor conducted a physical exam of her that lasted all of five minutes. He testified that the “American College of Rheumatology does not consider fibromyalgia to be disabling on a long-term basis.” That, as we know from our earlier quotation from the ACR is false; and Lilly itself appears not to have relied on Dr. Schriber’s opinion in its decision to terminate Kennedy’s benefits.

Affirmed

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7th Circuit Court of Appeals

Case Name: United States of America v. Patrick Armand

Case No.: 16-2991

Officials: BAUER, POSNER, and HAMILTON, Circuit Judges.

Focus:

Patrick Armand pleaded guilty to distributing crack and powder cocaine, in violationof 21 U.S.C. § 841(a)(1), and was sentenced to 108 months’ imprisonment, and a five-year term of supervised release subject to certain special conditions. On appeal we reversed, finding that the district court imposed unconstitutionally vague conditions of supervised release and failed to justify the discretionary conditions and the length of supervision. We remanded the case for a full resentencing. See United States v. Armand, 638 F. App’x 504 (7th Cir. 2016). Armand was resentenced to 104 months’ imprisonment and a three-year term of supervised release. He again appeals, contending that the district court committed a host of procedural and substantive errors. Forthe reasons that follow, we affirm.

Affirmed

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7th Circuit Court of Appeals

Case Name: Luis Vega v. New Forest Home Cemetery, LLC

Case No.: 16-3119

Officials: EASTERBROOK, KANNE, and ROVNER, Circuit Judges.=

Focus:

Luis Vega filed this suit alleging that his former employer, New Forest Home Cemetery, LLC (“New Forest”), by failing to pay him for his final two weeks of work, violated his right under the Fair Labor Standards Act of 1938, 29 U.S.C. § 206(b), to compensation at the minimum wage. The district court entered summary judgment in favor of New Forest, reasoning that Vega had not exhausted the grievance procedure specified by the collective bargaining agreement between New Forest and the union representing its workforce before he filed suit. R. 25. Because the collective bargaining agreement did not clearly and unmistakably waive Vega’s right to pursue his FLSA claim in a judicial forum, we reverse.

Reversed and Remanded

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WI Court of Appeals Digests

WI Court of Appeals – District III

Case Name: MillerCoors, LLC v. Millis Transfer Inc., et al

Case No.: 2015AP1894

Officials: Stark, P.J., Hruz and Seidl, JJ.

Focus: Monetary Damages – Court Error – Indemnification

Millis Transfer, Inc. (Millis) and its insurer, Zurich American Insurance Company (Zurich), appeal a summary judgment awarding money damages in favor of MillerCoors LLC (MillerCoors). Millis and Zurich argue the circuit court erred in determining Millis breached its contractual duty to MillerCoors by failing to defend and indemnify MillerCoors in a negligence suit brought by one of Millis’s employees. MillerCoors cross-appeals seeking additional damages. We affirm.

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WI Court of Appeals – District I

Case Name: Bryan Casper, et al v. American International South Insurance Company

Case No.: 2015AP2412

Officials: Brennan, P.J., Brash and Dugan, JJ.

Focus: Statutory Interpretation

American International South Insurance Company (AISIC) appeals an order granting plaintiffs’ summary judgment motion and ordering AISIC to pay $684,499.14 in interest on its delayed payment on the underlying claim in this case. WISCONSIN STAT. § 628.46(1) (2015-16)1 requires an insurer given proper notice to pay such interest when it does not timely pay claims unless “the insurer has reasonable proof to establish that the insurer is not responsible for the payment[.]” The requirement applies to claims by insureds and claims by third parties who satisfy certain conditions as set forth in Kontowicz v. American Standard Insurance Co. of Wisconsin.  The trial court concluded that plaintiffs, who are third-party claimants, were entitled to such interest because in 2007 they satisfied the Kontowicz conditions as to the underlying claim and because AISIC was unable to provide “reasonable proof to establish” that it was not responsible for the payment. AISIC argues that both these conclusions are incorrect. AISIC also argues that WIS. STAT. § 628.46 does not apply where an insurer has contractual duties to multiple insureds, as AISIC does here, because those legal obligations make it impossible for AISIC to satisfy the statute. Plaintiffs cross-appeal, arguing that in 2005 they satisfied § 628.46’s requirements as interpreted in Kontowicz and accordingly they are entitled to more interest than the trial court awarded them. We reject those arguments and affirm the order.

Recommended to publication

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WI Court of Appeals – District III

Case Name: Central Bank v. Arlan Hanson et al

Case No.: 2016AP149l 2016AP150

Officials: Stark, P.J., Hruz and Seidl, JJ.

Focus: Court Authority – Sanctions

Central Bank appeals judgments awarding Viking Electric Supply, Inc. (Viking) and J.H. Larson Electrical Company (Larson) the reasonable costs and attorney fees they incurred as a result of Central Bank proffering false affidavits during this litigation. Central Bank contends the circuit court lacked authority to award Viking and Larson those costs and attorney fees. We conclude the circuit court possessed inherent authority to impose sanctions on Central Bank for proffering patently false affidavits. We also conclude the court did not erroneously exercise its discretion by imposing sanctions on Central Bank for its misconduct. Therefore, we affirm the judgments.

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WI Court of Appeals – District I

Case Name: State of Wisconsin v. Presley Hubanks

Case No.: 2016AP230

Officials: Kessler, Brash and Dugan, JJ.

Focus: Ineffective Asssistance of Counsel

Presley Hubanks appeals a judgment, entered upon a jury’s verdict, finding him a sexually violent person and committing him to the Department of Health Services for control, care, and treatment. See WIS. STAT § 980.06 (2015-16).1 He also appeals a postdisposition order denying him a new trial. Hubanks claims his trial counsel was ineffective for failing to object at trial when the State referred to “Supermax” to identify a Wisconsin prison where he was at one time confined. The circuit court concluded that Hubanks failed to demonstrate that he was prejudiced by trial counsel’s alleged errors. We agree and affirm.

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WI Court of Appeals – District III

Case Name: Steven P. Dresel v. William J. Giles, et al

Case No.: 2016AP469

Officials: Stark, P.J., Hruz and Seidl, JJ.

Focus: Jury Instruction

Steven Dresel appeals a judgment, entered upon a jury verdict, awarding $16,000 in damages to Dresel as a result of an automobile accident caused by William Giles. Dresel argues the circuit court erroneously exercised its discretion by admitting collateral source evidence consisting of testimony regarding a social security disability benefits application, and by denying his request for the court to give the standard causation jury instruction. We reject these arguments and affirm.

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WI Court of Appeals – District I

Case Name: State of Wisconsin v. Equan Taylor

Case No.: 2016AP477-CR

Officials: Brennan, P.J., Kessler and Dugan, JJ

Focus: Sentence Modification

Equan Taylor appeals a judgment of conviction entered after he pled guilty to one count of burglary to a dwelling as a party to the crime. See WIS. STAT. §§ 943.10(1m)(a), 939.05 (2013-14). He also appeals the order denying his postconviction motion. We affirm.

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WI Court of Appeals – District III

Case Name: 2016AP1027; 20161P1028; 2016AP1029

Case No.: State of Wisconsin v. Chance William Andrews

Officials: Stark, P.J., Hruz and Seidl, JJ.

Focus: Plea Agreement

Chance Andrews appeals judgments convicting him of felony murder, battery by a prisoner and threats to injure. He also appeals an order denying his motion for resentencing in which he alleged the State violated the plea agreement and Andrews’ trial counsel was ineffective for failing to object to the State’s breach. Andrews makes the same arguments on appeal. Because we conclude the State did not violate the plea agreement and there was no basis for defense counsel to object, we affirm the judgments and order.

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WI Court of Appeals – District III

Case Name: State of Wisconsin v. Jeffery Dwayne Sanders

Case No.: 2016AP1414-CR; 2016AP1415-CR

Officials: Stark, P.J., Hruz and Seidl, JJ.

Focus: Sentencing – Sentence Reduction

Jeffery Sanders appeals judgments sentencing him after revocation of his probation and an order denying his motion to reduce the sentences. The circuit court imposed the maximum consecutive sentences: one-and-one-half years’ initial confinement and two years’ extended supervision for delivery of less than 200 grams of THC as a party to a crime, and three years’ initial confinement and three years’ extended supervision for felony bail jumping. Sanders contends the sentences are unduly harsh and unconscionable because they are out of proportion to the seriousness of the offenses. Because we conclude Sanders has not established an improper exercise of the sentencing court’s discretion, we affirm the judgments and order.

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WI Court of Appeals – District III

Case Name: Nathan Pulju v. Wisconsin Department of Health Services

Case No.: 2016AP1511

Officials: Stark, P.J., Hruz and Seidl, JJ

Focus: Attorney Fees & Costs

Nathan Pulju appeals an order that affirmed a decision of the Wisconsin Department of Health Services (DHS) denying Pulju’s motion for attorney fees and costs under the Wisconsin Equal Access to Justice Act (WEAJA). See WIS. STAT. § 227.485(3) (2015-16). Pulju asserts he is entitled to attorney fees and costs because DHS’s previous decision to deny him benefits was not substantially justified. We conclude the circuit court did not erroneously exercise its discretion by determining DHS’s decision to deny Pulju benefits was substantially justified. We therefore affirm.

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WI Court of Appeals – District II

Case Name: State of Wisconsin v. Jason E. Anderson

Case No.: 2015AP2056-CR

Officials: Reilly, P.J., Gundrum and Hagedorn, JJ.

Focus: Ineffective Assistance of Counsel

Jason Anderson appeals from a judgment convicting him of first-degree intentional homicide in the shooting death of his wife and of being a felon in possession of a firearm. Anderson also appeals from an order denying, without an evidentiary hearing, his postconviction motion

alleging ineffective assistance of counsel. We conclude that the circuit court properly exercised its discretion when it denied the postconviction motion without an evidentiary hearing because the record conclusively demonstrates that trial counsel’s representation was neither deficient nor prejudicial. We affirm.

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WI Court of Appeals – District II

Case Name: State of Wisconsin v. Douglas M. Yanko

Case No.: 2015AP2296-CR

Officials: Reilly, P.J., Gundrum and Hagedorn, JJ.

Focus: Ineffective Assistance of Counsel

Douglas M. Yanko appeals a judgment of conviction entered after a jury found him guilty of repeated acts of sexual assault of the same child, and an order denying his motion for postconviction relief. He argues he is entitled to a new trial based on the ineffective assistance of trial counsel. Yanko also requests sentencing relief, asserting that trial counsel performed deficiently by not requesting that Yanko be exempted from the sex offender registry, and because the sentence imposed was excessive. Additionally, Yanko contends that the circuit court erroneously denied his motion to adjourn the postconviction hearing. We reject Yanko’s claims and affirm.

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WI Court of Appeals – District I

Case Name: Bank Mutual V. Carol L. Sherman, et al

Case No.: 2015AP2357

Officials: Neubauer, C.J., Reilly, P.J., and Gundrum, J.

Focus:

Daniel Bohringer and Sammy’s Taste of Chicago, Inc. (hereafter Bohringer) appeal from a circuit court order denying a request to reopen proceedings relating to Bohringer’s liability to Bank Mutual pursuant to continuing guarantees of bank loans to Carol Sherman. Bohringer also appeals from an order denying reconsideration. We affirm.

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WI Court of Appeals – District II

Case Name: State of Wisconsin v. Delante H. Higgenbottom

Case No.: 2016AP457-CR; 2016AP458-CR

Officials: Neubauer, C.J., Gundrum and Hagedorn, JJ.

Focus: Ineffective Assistance of Counsel – Mistrial

In these consolidated appeals, Delante D. Higgenbottom appeals from judgments convicting him of armed robbery as party to a crime (PTAC), felon in possession of a firearm, and carrying a concealed weapon. Higgenbottom argues the trial court erroneously exercised its discretion in denying (1) his motion for a mistrial after the jury heard certain DNA-related evidence and (2) his postconviction motion for a new trial based on the denial of the mistrial motion and on his claim of ineffective assistance of trial counsel. We reject his contentions and affirm.

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WI Court of Appeals – District II

Case Name: Lee Gaethke v. Marco Pozder, et al

Case No.: 2016AP541

Officials: Neubauer, C.J., Gundrum and Hagedorn, JJ.

Focus: Sufficiency of Evidence

Marco and Ljubica Pozder, d/b/a The Crossroads Motel and Acuity, a Mutual Insurance Company, appeal from a judgment following a jury trial. The Pozders contend the circuit court erred by denying their postverdict motion to change the jury’s verdict finding them negligent in relation to Lee Gaethke’s slip and fall at their motel. They specifically assert there was insufficient evidence presented at trial to support the negligence finding under either Wisconsin’s Safe Place statute, WIS. STAT. § 101.11(1) (2015-16),  or the common law. The Pozders further argue the court erred in admitting medical bills into evidence at the trial and in denying their postverdict motion for a new trial based upon “outrageous conduct” by Gaethke’s counsel during the trial. We reject each of the Pozders’ claims of error and affirm.

Recommended for publication

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WI Court of Appeals – District II

Case Name: State of Wisconsin v. Michael L. McGee et al

Case No.: 2016AP1082

Officials: Neubauer, C.J., Reilly, P.J., and Gundrum, J.

Focus: Supervised Release Plan – Supervised Release for Sexually Violent Persons

The placement of a sexually violent person back into the community is a difficult and thankless task. Wisconsin law requires that a sexually violent person that is suitable for supervised release is to be placed back into their county of residence unless “good cause” is shown to place him or her in another county. In this appeal we address the statutory requirements that a court must comply with before placing a sexually violent person outside of the committing court’s county. Michael L. McGee was committed as a sexually violent person in 2004 by the Racine County Circuit Court. McGee’s county of residence is Racine County. Kenosha County learned in May 2016 that Racine County planned to place McGee in Kenosha County. Kenosha County moved to rescind the approved plan to place McGee in Kenosha on the grounds that Kenosha County did not receive statutory notice nor was it allowed the statutory right to participate in McGee’s supervised release plan. We agree with Kenosha County and vacate the supervised release plan approved by the Racine County Circuit Court

Recommended for publication

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WI Court of Appeals – District II

Case Name: State of Wisconsin v. Richard J. Scott

Case No.: 2016AP1411-CR

Officials: Neubauer, C.J., Reilly, P.J., and Hagedorn, J.

Focus: Plea Withdrawal

Richard J. Scott appeals from a judgment entered upon his plea of guilty to engaging in repeated acts of sexual assault of the same child and possession of child pornography. Scott further appeals from an order denying his motion seeking plea withdrawal pursuant to WIS. STAT. RULE 809.30 (2015-16). Scott contends that he is entitled to withdraw his plea because he was charged with a version of engaging in repeated acts of sexual assault of the same child that no longer existed at law and there was no factual basis for his plea to possession of child pornography. We disagree but modify the judgment to reflect that Scott pleaded guilty to WIS. STAT. § 948.025(1)(e) (2007-08).

Recommended for Publication

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WI Court of Appeals – District II

Case Name: City of Pewaukee v. John Jay Kennedy

Case No.: 2016AP2383

Officials: Neubauer, CJ

Focus: Motion to Suppress

John Jay Kennedy appeals from an order denying his motion to suppress evidence. The deputy sheriff who stopped Kennedy did so after checking his squad car’s computer and discovering that there was an outstanding warrant for Kennedy’s arrest for failing to pay a fine. Kennedy contends that the deputy sheriff lacked reasonable suspicion to stop his vehicle until he confirmed the validity of the warrant, which he did not do until after the traffic stop. We disagree and affirm the order.

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WI Court of Appeals – District IV

Case Name: Daniel W. McBride

Case No.: 2016AP876

Officials: Kloppenburg, P.J., Sherman and Blanchard, JJ.

Focus: Negligence

Daniel McBride appeals summary judgment in favor of Kyle and Lisa Esmeier, the City of Watertown, and their respective insurers (collectively, the respondents). McBride brought a negligence action against the respondents seeking to recover for injuries he allegedly suffered after he stepped into a hole that was located on property that is maintained by the Esmeiers within the right of way of a city street, between the sidewalk and the street. For the reasons discussed below, we affirm summary judgment.

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WI Court of Appeals – District IV

Case Name: State of Wisconsin v. Thomas Deondre Fowler, Jr.

Case No.: 2016AP881-CR

Officials: Lundsten, Sherman and Blanchard, JJ.

Focus: Sentence Enhancement

The question here is whether Fowler admitted a prior conviction for purposes of sentence enhancement as a repeat offender. We conclude that Fowler did and, therefore, affirm the circuit court.

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WI Court of Appeals – District IV

Case Name: State of Wisconsin v. Thomas E. Koellen

Case No.: 2016AP910

Officials: Kloppenburg, P.J., Lundsten and Sherman, JJ.

Focus: Court Error – Voluntary Plea

In 2005, Thomas Koellen pled no contest to three counts of second degree sexual assault. In 2014, Koellen filed a postconviction motion to withdraw his pleas on the ground that the plea colloquy was deficient. The circuit court held an evidentiary hearing and denied Koellen’s motion.  Koellen argues that the circuit court erroneously determined that the State met its burden to prove that Koellen knowingly, intelligently, and voluntarily entered his pleas despite the allegedly deficient plea colloquy. As we explain, we conclude that Koellen’s motion failed to demonstrate a plea colloquy defect Accordingly, the circuit court could have denied Koellen’s plea withdrawal motion without a hearing and, thus, we affirm the denial of his plea withdrawal motion, on grounds different from those relied on by the circuit court.

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WI Court of Appeals – District IV

Case Name: R.B.O, et al v. Mark S. Knutson

Case No.: 2016AP952

Officials: Lundsten, Sherman, and Blanchard, JJ.

Focus: Guardian ad Litem Fees

The underlying action in this appeal was commenced with the filing of a petition for a determination of parentage in connection with the birth of a child by a surrogate mother, after the pertinent persons entered into a surrogacy agreement. The circuit court granted the uncontested petition. However, the only dispute on appeal is over the amount of compensation to which the guardian ad litem is entitled. Moreover, we resolve this appeal on limited grounds: reversal due to the failure of the circuit court to address a motion for reconsideration regarding reasonable GAL compensation. Neither side urges reversal on this ground, but we conclude that it is compelled by settled law and the distinctly different roles of the circuit courts and this court. Separately, in the interest of judicial efficiency, we resolve legal issues briefed by the parties that are likely to recur following remand.

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WI Court of Appeals – District IV

Case Name: State of Wisconsin v. William Johnathan Wilke

Case No.: 2016AP1171-CR

Officials: Kloppenburg, P.J., Lundsten, and Blanchard, JJ

Focus: Court Exercise of Discretion

William Jonathan Wilke appeals a judgment of conviction for burglary, robbery with threat of force, and possession of narcotic drugs, all as a repeater. Wilke contends that he was entitled to a mistrial based on the following violations of a pretrial order: (1) the circuit court read the repeater allegation in the information to all of the prospective jurors at the outset of voir dire; (2) a State’s witness testified to Wilke’s drug use; and (3) an exhibit displayed to the jury on a large screen revealed that Wilke had a prior felony case. For the reasons set forth below, we conclude that the circuit court properly exercised its discretion by denying Wilke’s motions for a mistrial. We affirm.

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WI Court of Appeals – District IV

Case Name: Crawford County v. E.K.

Case No.: 2016AP2063

Officials: Blanchard, J.

Focus: Civil Commitment – CH. 51 Commitment

This is an appeal from an involuntary civil commitment proceeding under WIS. STAT. ch. 51. E.K. appeals an order of the circuit court extending involuntary commitment and extending involuntary administration of medication. Specifically, E.K. argues that Crawford County failed to meet its burden under WIS. STAT. § 51.61(1)(g)4. for an extension of an involuntary medication order and that the County should not have been permitted to call E.K., the subject of the proceeding, as a witness to testify against himself. For the following reasons, I affirm.

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WI Court of Appeals – District IV

Case Name: State of Wisconsin v. Donald G. Verkuylen

Case No.: 2016AP2364

Officials: Lundsten, J.

Focus:

Donald G. Verkuylen appeals the circuit court’s order finding that Verkuylen’s refusal to submit to a blood test violated the implied consent law that applies to motor boating, WIS. STAT. §§ 30.683 and 30.684. A first offense violation of that law, as was charged here, entails only a civil forfeiture. See WIS. STAT. §§ 30.684(1)(b)2. and 30.80(6)(a)1. For reasons explained below, I conclude that each of Verkuylen’s arguments lacks merit or is forfeited. I affirm the order.

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US Supreme Court Digests

US Supreme Court

Case Name: Kindred Nursing Centers Limited Partnership v. Clark, et al

Case No.: 16-32

Focus: Federal Arbitration Act

The Kentucky Supreme Court’s clear-statement rule violates the Federal Arbitration Act by singling out arbitration agreements for disfavored treatment.

“The FAA, which makes arbitration agreements “valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract,” 9 U. S. C. §2, establishes an equal-treatment principle: A court may invalidate an arbitration agreement based on “generally applicable contract defenses,” but not on legal rules that “apply only to arbitration or that derive their meaning from the fact that an agreement to arbitrate is at issue,” AT&T Mobility LLC v. Concepcion, 563 U. S. 333, 339. The Act thus preempts any state rule that discriminates on its face against arbitration or that covertly accomplishes the same objective by disfavoring contracts that have the defining features of arbitration agreements. The Kentucky Supreme Court’s clear-statement rule fails to put arbitration agreements on an equal plane with other contracts. By requiring an explicit statement before an agent can relinquish her principal’s right to go to court and receive a jury trial, the court did exactly what this Court has barred: adopt a legal rule hinging on the primary characteristic of an arbitration agreement”

Reversed in part

Vacated in part

Remanded

Concur:

Dissent: Thomas

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US Supreme Court

Case Name: Midland Funding, LLC v. Johnson

Case No.: 16-348

Focus: FDCPA Violation

The filing of a proof of claim that is obviously time barred is not a false, deceptive, misleading, unfair, or unconscionable debt collection practice within the meaning of the Fair Debt Collection Practices Act.

“Midland’s proof of claim was not “false, deceptive, or misleading.” The Bankruptcy Code defines the term “claim” as a “right to payment,” 11 U. S. C. §101(5)(A), and state law usually determines whether a person has such a right, see Travelers Casualty & Surety Co. of America v. Pacific Gas & Elec. Co., 549 U. S. 443, 450–451. The relevant Alabama law provides that a creditor has the right to payment of a debt even after the limitations period has expired. Johnson argues that the word “claim” means “enforceable claim.” But the word “enforceable” does not appear in the Code’s definition, and Johnson’s interpretation is difficult to square with Congress’s intent “to adopt the broadest available definition of ‘claim,’ ” Johnson v. Home State Bank, 501 U. S. 78, 83. Other Code provisions are still §502(b)(1) says that if a “claim” is “unenforceable” it will be disallowed, not that it is not a “claim.” Other provisions make clear that the running of a limitations period constitutes an affirmative defense that a debtor is to assert after the creditor makes a “claim.” §§502, 558. The law has long treated unenforceability of a claim (due to the expiration of the limitations period) as an affirmative defense, and there is nothing misleading or deceptive in the filing of a proof of claim that follows the Code’s similar system. Indeed, to determine whether a statement is misleading normally “requires consideration of the legal sophistication of its audience,” Bates v. State Bar of Ariz., 433 U. S. 350, 383, n. 37, which in a Chapter 13 bankruptcy includes a trustee who is likely to understand that a proof of claim is a statement by the creditor that he or she has a right to payment that is subject to disallowance, including disallowance based on untimeliness.”

Reversed

Concur:

Dissent: Sotomayor, Ginsburg, Kagan

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US Supreme Court

Case Name: Howell v. Howell

Case No.: 15-1031

Focus:

A state court may not order a veteran to indemnify a divorced spouse for the loss in the divorced spouse’s portion of the veteran’s retirement pay caused by the veteran’s waiver of retirement pay to receive service-related disability benefits. This Court’s decision in Mansell v. Mansell, 490 U. S. 581, determines the outcome here. There, the Court held that federal law completely pre-empts the States from treating waived military retirement pay as divisible community property. Id., at 594–595. The Arizona Supreme Court attempted to distinguish Mansell by emphasizing the fact that the veteran’s waiver in that case took place before the divorce proceeding while the waiver here took place several years after the divorce. This temporal difference highlights only that John’s military pay at the time it came to Sandra was subject to a future contingency, meaning that the value of Sandra’s share of military retirement pay was possibly worth less at the time of the divorce. Nothing in this circumstance makes the Arizona courts’ reimbursement award to Sandra any the less an award of the portion of military pay that John waived in order to obtain disability benefits. That the Arizona courts referred to her interest in the waivable portion as having “vested” does not help: State courts cannot “vest” that which they lack the authority to give. Neither can the State avoid Mansell by describing the family court order as an order requiring John to “reimburse” or to “indemnify” Sandra, rather than an order dividing property, a semantic difference and nothing more. Regardless of their form, such orders displace the federal rule and stand as an obstacle to the accomplishment and execution of the purposes and objectives of Congress. Family courts remain free to take account of the contingency that some military retirement pay might be waived or take account of reductions in value when calculating or recalculating the need for spousal support. Here, however, the state courts made clear that the original divorce decree divided the whole of John’s military pay, and their decisions rested entirely upon the need to restore Sandra’s lost portion

Reversed and remanded

Concur:

Dissent:

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