Weekly Case Digests — Oct. 30-Nov. 3, 2017

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7^th Circuit Digests

7^th Circuit Court of Appeals

Case Name: United States of America v. Robert S. Luce

Case No.: 16-4093

Officials: WOOD, Chief Judge, and RIPPLE and ROVNER, Circuit Judges.

Focus: Issues of Material Fact – False Certifications

The United States brought this action against Robert Luce under the False Claims Act (“FCA”), 31 U.S.C. § 3729 et seq., and the Financial Institutions Reform, Recovery, and Enforcement Act (“FIRREA”), 12 U.S.C. § 1833a. It alleged that Mr. Luce had defrauded the Government by falsely asserting that he had no criminal history so that his company could participate in the FHA’s insurance program. The district court granted summary judgment in favor of the Government.

Mr. Luce now submits that his false certifications were not material and that lingering issues of material fact preclude summary judgment. Furthermore, Mr. Luce urges that the Supreme Court’s decision in Universal Health Services, Inc. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016) (“Escobar”), requires that we depart from our traditional “but-for” FCA causation standard. Although we conclude that Mr. Luce’s first two submissions are not persuasive, we believe that there is merit to Mr. Luce’s view on causation. Escobar did not overrule explicitly our circuit precedent, which requires “but-for” rather than proximate causation. Nonetheless, it does provide significant guidance and deserves our respectful and careful consideration, especially when all other circuits to address the issue have chosen a path different from our own.

Reversed in part and Remanded in part

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7^th Circuit Court of Appeals

Case Name: Arthur J. Bryant v. Richard Brown

Case No.: 15-3144

Officials: POSNER,* EASTERBROOK, and SYKES, Circuit Judges.

Focus: Brady Violation

On state postconviction review, Bryant raised a claim of ineffective assistance of counsel under Strickland v. Washington, 466 U.S. 668 (1984). He identified five errors, including his counsel’s failure to preserve the surreptitious recording issue and several other alleged missteps at trial. In a separate claim, he raised a Brady violation stemming from a falsehood in a police report. Finally, in a catch-all argument, he claimed a right to relief based on cumulative error.

The trial judge was not persuaded by these arguments. Neither was the Indiana Court of Appeals. Bryant then sought federal habeas relief under 28 U.S.C. § 2254, reiterating the same claims. The district court denied relief, and we affirm the judgment. The state appellate court reasonably applied Strickland and Brady.

Affirmed

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7^th Circuit Court of Appeals

Case Name: United States of America v. Hakeem El-Bey

Case No.: 15-3180

Officials: WOOD, Chief Judge, and MANION and WILLIAMS, Circuit Judges.

Focus: Court Error – Abuse of Discretion

Hakeem El-Bey filed six tax returns with the Internal Revenue Service seeking $1.8 million in tax refunds to which he was not entitled. He received $600,000 from the IRS as a result of two of the returns, which he used to purchase a house and numerous cars. El-Bey represented himself on charges of mail fraud and making false claims to the IRS. He advanced irrelevant arguments, interrupted the judge, and made it challenging to manage the trial. On appeal, El-Bey seeks a new trial. Although the district court was understandably frustrated by a difficult litigant, El-Bey had a right to a fair trial, and we cannot be assured that he received one. Statements by the court in the presence of the jury conveyed that El-Bey was guilty or dishonest and impaired El-Bey’s credibility in the eyes of the jury. We remand the case for a new trial.

Vacated and Remanded

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7^th Circuit Court of Appeals

Case Name: R. Alexander Acosta, Secretary of Labor, v. DT & C Global Management, LLC, et al.

Case No.: 16-4076

Officials: KANNE, ROVNER, and SYKES, Circuit Judges.

Focus: Court Error – Abuse of Discretion

DT & C Global Management operated a ground transportation company in Chicago. The company and two of its owners were sued by former employees and the government for violating state and federal wage‐payment laws. After the defendants ignored court orders, the district judges entered default judgments for the plaintiffs. Eleven months later, the defendants moved to vacate both judgments. See FED. R. CIV. P. 60(b). Deeming their excuses too little, too late, the judges denied the motions, precipitating this appeal. Because the defendants did not show good cause for the default, did not act quickly in filing motions to vacate, and failed to articulate any meritorious defenses, we conclude that the district judges did not abuse their discretion. We affirm the judgments.

Affirmed

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7^th Circuit Court of Appeals

Case Name: United States of America v. Vincente Quiroz

Case No.: 16-3510; 16-3518

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

Focus: Sufficiency of Evidence

Defendant-Appellant Vicente Quiroz brokered large drug transactions. For his role in a methamphetamine transaction, he was convicted after a bench trial in January 2015. (Case No. 16-3518.) Then, in a second trial in July of that year, he was convicted by a jury for his role in a marijuana transaction. (Case No. 16-3510.)

In this consolidated appeal from his convictions in both trials, Quiroz argues that the district court improperly admitted his own post-arrest statements and the out-of-court statements of the confidential informant and coconspirators. We disagree, so we affirm both of Quiroz’s convictions.

Affirmed

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7^th Circuit Court of Appeals

Case Name: United States of America v. Randy Johnson

Case No.: 15-1366

Officials: WOOD, Chief Judge, and FLAUM, EASTERBROOK, KANNE, ROVNER, WILLIAMS, SYKES, and HAMILTON, Circuit Judges.

Focus: Motion to Suppress Evidence Denied

Johnson, who believes that the police had an ulterior motive for approaching his car, contends that Whren does not apply to infractions by stopped cars, which he labels parking violations rather than moving violations. Johnson says that the judge should have suppressed the gun, because the statutory exception for receiving or discharging cargo or passengers means that the police did not have adequate reason to issue a ticket or even to approach the car until they had observed long enough to know that the car was not within the scope of the exception. The district court rejected that contention, as do we.

Johnson’s principal contention is that police had the car in view for only an instant before deciding to approach. We therefore do not consider whether, and if so when, using racial criteria to select among potential targets of investigation would require the suppression of evidence.

Affirmed

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WI Court of Appeals Digests

WI Court of Appeals – District I

Case Name: State of Wisconsin v. Daniel Buchanan

Case No.: 2016AP1022

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

Focus: Postconviction Motion Denied

Daniel Buchanan, pro se, appeals from an order of the circuit court that denied his WIS. STAT. § 974.06 (2015-16) motion without a hearing. Buchanan raised four claims of error, which the circuit court rejected. Buchanan renews those arguments on appeal. We also reject Buchanan’s arguments and affirm the order.

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WI Court of Appeals – District III

Case Name: Seng Xiong v. Lang C. Vang

Case No.: 2016AP1281

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

Focus: Abuse of Discretion – Divorce Proceedings

Lang Vang appeals from a divorce judgment terminating his marriage to Seng Xiong. Vang argues the circuit court erred by granting a judgment of divorce because he and Xiong were never validly married. Vang alternatively argues that, even if the parties’ marriage was valid, the circuit court erroneously exercised its discretion with respect to property division and maintenance.

We conclude that, under the facts of this case, the circuit court properly determined the parties had a legally recognizable putative marriage, pursuant to our prior decision in Xiong ex rel. Edmondson v. Xiong, 2002 WI App 110, 255 Wis. 2d 693, 648 N.W.2d 900. We further conclude the court properly exercised its discretion in dividing the parties’ property and awarding maintenance to Xiong for an indefinite duration. We therefore affirm.

Recommended for Publication

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WI Court of Appeals – District III

Case Name: State of Wisconsin v. Michael Potts

Case No.: 2016AP1367-CR

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

Focus: Judicial Bias and Ineffective Assistance of Counsel

Michael Potts appeals a judgment of conviction for first-degree reckless homicide, felon in possession of a firearm, and two counts of felony bail jumping. He also appeals an order denying him postconviction relief. Potts contends judicial bias required the circuit court judge’s recusal. He also argues he is entitled to plea withdrawal because his pleas were induced by misleading advice from his counsel regarding eligibility for early release. We reject Potts’ arguments and affirm.

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WI Court of Appeals – District III

Case Name: Mary M. Mahaffey v. Michael C. Mahaffey

Case No.: 2016AP1676

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

Focus: Court Error – Abuse of Discretion

Mary Mahaffey appeals an order denying her motion to reopen her divorce judgment pursuant to WIS. STAT. § 806.07 (2015- 16).  We conclude the circuit court properly exercised its discretion when it determined that Mary failed to demonstrate “extraordinary circumstances” warranting relief from the judgment. Accordingly, we affirm.

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WI Court of Appeals – District I

Case Name: Shirley Ann Rogahn Wenzel v. Jeffery Thomas Wenzel

Case No.: 2016AP1771

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

Focus: Divorce Proceedings – Motion for Relief and Motion for Sanctions Denied

Jeffery Thomas Wenzel appeals from that part of the circuit court’s order which denied his motion for relief from judgment based on financial documents turned over to him by his former wife, Shirley Ann Rogahn Wenzel. Shirley also cross-appeals from that part of the circuit court’s order which denied her motion for sanctions.

On appeal, Jeffery contends that, in denying the motion for relief from judgment, the postjudgment court erroneously exercised its discretion and erred as a matter of law by creating new requirements for relief. We disagree and, therefore, affirm that portion of the order.

On cross-appeal, Shirley contends that, in denying the motion for sanctions, the postjudgment court applied an incorrect legal standard by applying the test applicable to fees and costs in a divorce action, rather than applying the test for sanctions for frivolousness. We agree and, therefore, reverse the order denying Shirley’s sanctions motion and remand for further proceedings consistent with our directions.

Recommended for Publication

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WI Court of Appeals – District IV

Case Name: Local 643 Transit, et al. v. City of Beloit

Case No.: 2016AP2156

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

Focus: Arbitration Award and Motion for Reconsideration Denied

Local 643 Transit, AFSCME, AFL-CIO (the “Union”) appeals the circuit court orders denying in part its request for modification of an arbitration award and denying the Union’s subsequent motion for reconsideration.

On appeal, the Union contends that the arbitration award exceeded the scope of the arbitrator’s authority and, therefore, Ahrens was entitled to back pay, restoration of his seniority, and all of his benefits from the date of termination. Alternatively, it maintains that, at a minimum, the arbitrator should have awarded seniority and back pay with all benefits for the period from November 10, 2015 through December 29, 2015, when Ahrens was prevented from returning to work due to conditions imposed by the arbitrator.

To be clear, we are not making any rulings on the substance of any issue on appeal. We merely remand the matter to the arbitrator to clarify his decision so that the circuit court, upon any subsequent review, can determine whether the remedy has some reasonable foundation in the CBA.

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WI Court of Appeals – District III

Case Name: The Yacht Club at Sister Bay Condominium, Association, Inc. v. Village of Sister Bay

Case No.: 2017AP000140

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

Focus: Court Error – Motion to Dismiss

The Yacht Club at Sister Bay Condominium Association, Inc. (the Association) appeals an order granting the Village of Sister Bay’s motion to dismiss. The circuit court concluded the Village was entitled to dismissal of the Association’s claims because: (1) the Association failed to provide a written notice of injury within the 120-day period set forth in WIS. STAT. § 893.80(1d)(a) (2015-16);  and (2) the Association failed to present evidence indicating that the Village was not prejudiced by the Association’s failure to timely provide a written notice of injury.

We agree with the circuit court that the Association failed to provide the Village with a timely written notice of injury, as required by WIS. STAT. § 893.80(1d)(a). However, the court erred by determining, in the context of a motion to dismiss, that the Association was required to present evidence regarding lack of prejudice. We also reject the Village’s alternative argument that dismissal was proper because the Association failed to show that it filed an itemized statement of the relief it sought, as required by § 893.80(1d)(b). Accordingly, we affirm in part, reverse in part, and remand for further proceedings consistent with this opinion.

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WI Court of Appeals – District II

Case Name: Todd Mueller v. Thomas Edwards, et al.

Case No.: 2016AP2437

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

Focus: P.O.D. Account Beneficiary

This case addresses whether a beneficiary designation on a “P.O.D. account” under WIS. STAT. ch. 705 (2015-16) may be controlled by a writing separate from the contract of deposit between a depositor and his or her financial institution. Todd Mueller alleges that a handwritten note made by Robert Zernzach (depositor) sometime after Zernzach had entered into a P.O.D. account with US Bank (financial institution) resulted in Mueller being the sole beneficiary upon Zernzach’s death. We affirm the circuit court’s finding that the beneficiaries stated in the records of the bank were the lawful owners of the proceeds as Zernzach and US Bank never amended the P.O.D. account to change the beneficiary to Mueller.

Recommended for Publication

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WI Court of Appeals – District IV

Case Name: Melvin DeWitt, et al. v. Earl G. Ferries, et al.

Case No.: 2016AP1765

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

Focus: Abandonment of Cemeteries Statutory Requirements

This case concerns a one-acre parcel of land located within a 204-acre farm, which DeWitt alleged is a cemetery subject to the transfer mechanism in WIS. STAT. § 157.115(1)(c) (2015-2016). The circuit court ordered the transfer of the parcel to the Town of Forest in Vernon County to “manage” the parcel as a Town cemetery under § 157.115(1)(c). The Town of Forest, and Earl Ferries and Paulette Ferries, argue in pertinent part that the court erred in concluding that the requirements for transfer in § 157.115(1)(c) were met because DeWitt failed to prove, and the circuit court failed to make conclusions necessary to satisfy, the statutory requirement that “there exists no association or group with authority to transfer ownership and operation of the cemetery to the town.” We agree with this particular argument, which is dispositive. Accordingly, we reverse the order transferring the parcel to the Town.

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WI Court of Appeals – District IV

Case Name: Timothy P. Otterstatter v. City of Watertown

Case No.: 2016AP2000

Officials: Sherman, Blanchard and Kloppenburg, JJ.

Focus: Appraisal Valuation

Otterstatter appeals the circuit court’s summary judgment decisions, arguing that the City’s jurisdictional offer to purchase the property for $30,000 more than the value established by the City’s retained appraiser invalidated the acquisition because the jurisdictional offer was not “based” “upon” a proper appraisal, as required by WIS. STAT. § 32.05(2)(b).  Specifically, Otterstatter argues that the jurisdictional offer was invalid for any one of three reasons: (1) the amount of the jurisdictional offer did not equal the appraisal valuation; (2) the jurisdictional offer was not the result of negotiation; or (3) the jurisdictional offer was not the result of a new, more recent appraisal. We reject Otterstatter’s argument as contrary to the plain language of the statutes governing the jurisdictional offer process and to the undisputed facts of record.

Otterstatter also appeals the circuit court’s issuance of the writ of assistance, arguing that the City did not comply with all jurisdictional requirements as required by WIS. STAT. § 32.05(8). Specifically, Otterstatter argues that the City failed to comply with the jurisdictional requirement of providing a valid ninety-day notice to vacate. Otterstatter argues that the City was required, but failed, to first acquire title to the property before providing Otterstatter with written notice to vacate the property within ninety days, and, therefore, the notice to vacate was invalid. We reject Otterstatter’s argument as contrary to the plain language of the statutes governing the notice to vacate.

Because we reject Otterstatter’s challenges to the validity of the jurisdictional offer and the notice to vacate, we affirm.

Recommended for Publication

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WI Court of Appeals – District I

Case Name: State of Wisconsin v. Jacob A. Basterash

Case No.: 2016AP2137-CR

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

Focus: Motion to Suppress Evidence Denied

Jacob Basterash appeals an amended judgment of conviction for possession of marijuana with intent to deliver as a party to the crime. Basterash argues that the circuit court erred in denying his motion to suppress evidence seized during a warrantless search of his home. Because we conclude that the search was reasonable under the community caretaker exception to the Fourth Amendment, we reject Basterash’s arguments and affirm.

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WI Court of Appeals – District IV

Case Name: Garon A. Reinke v. Timothy W. Jacobson, et al.
Case No.: 2016AP002197

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

Focus: Tort Counterclaims – Economic Loss Doctrine

Timothy Jacobson and T.C. Products Co., Inc., appeal the circuit court’s order granting summary judgment in favor of Garon Reinke and effectively dismissing their tort counterclaims against Reinke. The claims relate to several 2012 agreements between the parties, including an agreement titled “Stock Purchase Agreement” under which Reinke sold his T.C. Products stock to Jacobson. For purposes here, there is no dispute that Jacobson and T.C. Products breached one or more of the agreements. At issue is whether their tort counterclaims against Reinke are barred by the economic loss doctrine.

As we understand it, Jacobson and T.C. Products make four arguments: (1) the economic loss doctrine does not apply because the predominant purpose of the parties’ agreements was the provision of services; (2) the economic loss doctrine should never be applied to stock purchases; (3) regardless of arguments (1) and (2), the economic loss doctrine does not bar Jacobson’s and T.C. Products’ breach of fiduciary duty claims; and (4) the fraud in the inducement exception to the economic loss doctrine applies. None of these arguments persuade us that the circuit court erred in applying the economic loss doctrine to effectively dismiss the tort counterclaims. Accordingly, we affirm.

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WI Court of Appeals – District IV

Case Name: Margaret Ahne Herlitzka v. John Allan Zernia

Case No.: 2016AP2408

Officials: Sherman, Blanchard and Fitzpatrick, JJ.

Focus: Sufficiency of Evidence

John Allan Zernia appeals a harassment injunction issued to Margaret Ahne Herlitzka. Zernia argues that the evidence did not support the injunction. For the reasons set forth below, we conclude that the circuit court properly exercised its discretion to grant the injunction. We affirm.

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WI Court of Appeals – District IV

Case Name: Sharon Towne Zernia v. John Allan Zernia

Case No.: 2016AP2409

Officials: Sherman, Blanchard and Fitzpatrick, JJ.

Focus: Sufficiency of Evidence

John Allan Zernia appeals a harassment injunction issued to Sharon Towne Zernia. John argues that the evidence did not support the injunction and the circuit court erred by allowing telephonic testimony at the injunction hearing. For the reasons set forth below, we conclude that the circuit court properly exercised its discretion to grant the injunction. We affirm.

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WI Court of Appeals – District IV

Case Name: State of Wisconsin v. Christopher C. Bouchette

Case No.: 2017AP820-CR

Officials: BLANCHARD, J.

Focus: Motion to Suppress Evidence Denied

Christopher Bouchette appeals a judgment of conviction for operating a motor vehicle with a prohibited alcohol concentration (2nd offense), denial of his motion to suppress evidence, and denial of his postconviction motion, which effectively requested reconsideration of the denial of his suppression motion. Bouchette argues that the circuit court erred in denying his motion to suppress evidence obtained by a police officer during an encounter with Bouchette that ended outside of the officer’s jurisdiction. This involves the fresh pursuit doctrine, which defines an exception to the general rule that police officers lack authority to take official action outside of the physical boundaries of the political subdivision within which they primarily exercise their official authority. See WIS. STAT. § 175.40(2). For reasons explained below, I reject Bouchette’s arguments and affirm.

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WI Court of Appeals – District IV

Case Name: Waushara County v. B.G.,

Case No.: 2017AP956

Officials: FITZPATRICK, J.

Focus: Protective Placement

B.G. appeals an order of the circuit court that granted a protective placement requested by Waushara County. B.G. contends that the County failed to comply with the statutory requirements of WIS. STAT. ch. 55 and, as a result, the circuit court lacked authority to order the protective placement. For the reasons discussed below, I agree with B.G. and reverse.

The County placed the conscientious circuit judge in an unenviable position by failing to comply with the procedures set forth in WIS. STAT. ch. 55. But, the statutory requirements that protect the due process rights of B.G. cannot be overlooked. “Although protecting people from harm is important, so is due process.” Dodge Cty. v. Ryan E.M., 2002 WI App 71, ¶11, 252 Wis. 2d 490, 642 N.W.2d 592.

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