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New Supreme Court cases

The Wisconsin Supreme Court has voted to accept six new cases.

2009AP639 McReath v. McReath

In this divorce case, the Supreme Court is asked to review whether a circuit court may double count the value of a divorcing professional’s “professional goodwill” by first valuing the professional’s business practice for property division purposes, and then awarding maintenance based upon the professional’s earning capacity.

Timothy McReath argued that professional goodwill is not a divisible asset, even if it is saleable because it is inextricably linked to earnings.  He argued it is unfair to divide the value of his professional goodwill as part of a property division and then also base maintenance payments, in part, on the earnings that flow from the same professional goodwill, something that is referred to as “double counting.”

The Court of Appeals said neither party provided a clear definition of either “corporate goodwill” or “professional goodwill.”  The court said this was in part because there is a lack of clarity in prior Wisconsin law.

In his petition for review, Timothy argues that review is appropriate because every time a practicing professional in this state gets divorced, he or she, along with his or her spouse, the parties’ counsel, and the presiding judge, all wade into a “quagmire.”  He says Wisconsin law expressly disfavors double counting marital assets, and published case law instructs circuit courts to take great care to avoid double counting.  He says unfortunately, current law provides circuit courts with no clear framework for achieving that objective in cases involving a professional practice.  He says practicing professionals, their spouses and divorce courts across the state will all benefit from the increased predictability, consistency, and fairness that clear guidelines governing property division and maintenance awards will promote. From Sauk County.

2009AP694-CR State v. Densen

This case examines whether the circuit court is required to conduct a colloquy with a defendant who chooses to waive his right not to testify.

Denson asks the Supreme Court to review the following issues:

1. Should the constitutional right of a criminal defendant not to testify on his behalf and remain silent at trial be recognized as a fundamental right that can only be waived personally by the defendant with an on the record colloquy?

2. Should the only appropriate remedy, for failure to engage in an on-the-record colloquy regarding the right not to testify at trial, be a new trial?

3. Should the failure to engage in an on-the-record colloquy regarding the right not to testify be subject to a harmless error analysis? From Rock County.

2009AP438 Bushard v. Reisman and PressEnter, LLP

In this case, the Supreme Court is asked to examine business partnership law as it relates to a dispute between two estranged business partners who were ordered to “wind-up” their partnership. The petitioners, Steven Reisman and PressEnter, LLP, seek review of a Court of Appeals’ order that directed Reisman and the plaintiff, David Bushard, to complete the wind-up of PressEnter. The order also required Reisman to reimburse PressEnter for funds he took as a salary, and dismissed Reisman’s counterclaims against Bushard for breach of fiduciary duty and unjust enrichment.

In part, Reisman presents the following issues for review:

1. Where the trial and appellate courts have considered equitable principles as required in Estate of Matteson [Estate of Matteson v. Matteson, 2008 WI 48, ¶25, 309 Wis. 2d 311, 749 N.W.2d 557], does this unpublished opinion conflict with that precedent from Estate of Matteson?

2. Whether the real controversy was assessed in this hybrid dissolution?

3. Whether unjust enrichment applies to the withdrawing partner where he benefited enormously from the skill and labor of the remaining partner, received all appropriate partner payments and by dint of the inability to sell the business and wind-up, the continuing partner is disadvantaged and not compensated for his efforts?

4. Truly applying equity, has the withdrawing partner Bushard been more than compensated under either a value based on a wind-up or continuation? From Pierce County.

2009AP1469/2009AP1470 Covenant Healthcare System, Inc. v. City of Wauwatosa

In this case, Covenant Healthcare Systems, Inc. (Covenant) asks the Supreme Court to review a Court of Appeals’ decision reversing a circuit court order and judgment finding St. Joseph Outpatient Center to be a tax exempt property under § 70.11(4m)(a)(2007-08).

The Court of Appeals, with Judge Fine dissenting, reversed and remanded, holding that the clinic is a doctor’s office and thus not qualified for a tax exemption under the statute.

The petition raises the following issues:

In construing Wis. Stat. § 70.11(4m)(a) and controlling precedent, did the Court of Appeals err when it concluded that the hospital outpatient facility known as the St. Joseph Outpatient Center (“SJOC”) was “used … as a doctor’s office” and, is, therefore, ineligible for a property tax exemption?

Was the SJOC reasonably necessary to the efficient functioning of Wheaton Franciscan Healthcare St. Joseph, Inc. n/k/a Wheaton Franciscan, Inc. (“St. Joseph Hospital”), thereby satisfying the requirement that the SJOC be used for the purposes of a hospital?

Was the SJOC ineligible for the exemption under Section 70.11(4m)(a) because the “net earnings” of St. Joseph Hospital “inure[d] to the benefit” of its sole member, Covenant Healthcare System, Inc. (“Covenant”)?

Was the SJOC ineligible for the exemption under Section 70.11(4m)(a) because it was used for “commercial purposes”?

A decision by the Supreme Court, which previously denied bypass in this case, could clarify law in this area and resolve a possible conflict in prior court decisions. From Milwaukee County.

2009AP1337/1338 Capital One Bank v. Summers

In this case, the Supreme Court is asked to interpret Wis. Stat. §§ 425.109(1) and 425.109(2), involving the creditor’s obligations in a consumer credit transaction. Eugene Summers asks the Court to consider whether these sections require a creditor to produce upon request by the debtor evidence of the credit agreement contract, as part of a prima facie case for summary judgment.

Summers seeks review of a summary order affirming a judgment awarding his credit card company, Capital One Bank, USA NA, $3,154.86 in a small claims action and $7,754.62 in large claims action.

The Court of Appeals said that the account statements incorporated in Capital One’s affidavits constituted writings evidencing the transactions on Summers’ accounts and these statements established Capital One’s compliance with § 425.109(2).  It rejected Summers’ arguments as an attempt to expand the definition of “writings” in § 425.109(2) to include all documents relating to the creation of the account, including its terms and conditions.

Summers presents two issues:

Did [trial] court err as matter of law in holding that the term “writings evidencing any transaction” requested by the consumer pursuant to 425.109(2) Stats., only requires the creditor to produce evidence of monthly charges which form basis of money judgment sought and not credit agreement contract, interest rate and State and Federal disclosures?

When a customer under an opened credit plan timely requests copies of “writings evidencing any [transaction]” under 425.109(2) Stats., can judgment be entered against a consumer where lender fails to provide complete copies of credit agreement plan? From Green Lake County.

2009AP2868 Wilkinson v. Arbuckle

This certification asks the Supreme Court to review whether Estate of Sustache v. American Family Mutual Insurance Co., 2008 WI 87, ¶24, 311 Wis. 2d 548, 751 N.W.2d 845, leaves open the possibility that the “four-corners rule” does not apply when the insured’s policy provides coverage for injuries sustained by acts of self defense.

Specifically, the certification poses the issue as follows: Does the four-corners rule govern an insurer’s duty to defend when, in response to a lawsuit, an insured alleges that he acted in self-defense and the insured’s policy expressly provides coverage for injuries sustained by acts of self-defense?

This appeal arises from a civil complaint filed by Jeffrey Wilkinson alleging James Arbuckle assaulted and battered Wilkinson causing injuries.  Arbuckle affirmatively defended on the ground that he was protecting his father from an attack by Wilkinson using only such force as necessary.  Arbuckle counterclaimed against Wilkinson for intentional battery.

The Court of Appeals said that although Arbuckle claims the alleged injury was caused when he was acting in self-defense, the four-corners rule serves to deny him the defense that he and Acuity agreed upon.  Therefore, the Court of Appeals contends the four-corners rule is in direct conflict with the clear and unambiguous language of the policy and the parties’ intentions.  From Sheboygan County.

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