Weekly Case Digests — April 16-20, 2018

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7^th Circuit Digests

7^th Circuit Court of Appeals

Case Name: Heung K. Baek, et al. v. Patricia A. Clausen, et al.

Case No.: 16-3838

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

Focus: RICO Claims

Clark & Leland Condominiums, LLC (“C & L”), and its shareholders, Heung Baek and Hyun Baek‐Lee (collectively “the Baeks”), brought this action against Northside Community Bank (“NCB”) and several of its employees, alleging violations of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1964(c). The predicate acts set forth in the complaint focus on the allegedly fraudulent and abusive acts committed by NCB in the course of a lending relationship with the plaintiffs.

This RICO action is the last in a series of legal actions between the parties: the first, a foreclosure action (“Foreclosure Action”), was brought by NCB in state court in 2010; the second, an action on the loan guaranty (“Guaranty Action”), followed in 2012; and, finally, a fraud and breach of contract action (“Parallel Action”), was brought by Mr. Baek and Ms. Baek‐Lee in 2014. The latter two actions were consolidated in the Circuit Court of Cook County. In response to the RICO complaint, NCB initially moved to dismiss, or in the alternative, to stay the proceeding under Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976). After the state court struck or dismissed all of the plaintiffs’ claims and granted summary judgment to NCB on its claims, NCB amended its motion to assert an alternative ground for dismissal: res judicata. The district court granted NCB’s amended motion.

On reconsideration, the district court vacated its earlier dismissal because it is not clear under Illinois law whether an adjudication is final for purposes of res judicata if an appeal is pending. The district court therefore stayed the action pending the disposition of the plaintiffs’ appeal in state court. After the state appellate court affirmed the judgment in favor of NCB, the district court reinstated its dismissal with prejudice.

We now affirm. The district court correctly determined that res judicata precludes the plaintiffs’ present action. There has been a final judgment on the merits, the same parties are litigating here as in state court, and the claims arise from a single group of operative facts. Moreover, given the nature and extent of litigation that had taken place in the state court, we perceive no abuse of discretion in the district court’s decision to stay the RICO action under Colorado River.

Affirmed

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7^th Circuit Court of Appeals

Case Name: Isaiah Hicks v. United States of America

Case No.: 16-2592

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

Focus: Plea & Sentencing – Ineffective Assistance of Counsel

A jury found Isaiah Hicks guilty of multiple drug offenses. He was sentenced to 360 months in prison. After we upheld his convictions and sentence on direct appeal, he filed a pro se motion under 28 U.S.C. § 2255 claiming that that he had received ineffective assistance of counsel. Hicks asserted that his attorney failed to explain to him the breadth of conspiracy law, understated the evidence against him, and failed to confer with him about pleading guilty. Going to trial cost him a potential reduction in his offense level at sentencing, Hicks claimed, which would have lowered his recommended guideline range and ultimate sentence. The district court denied the § 2255 motion without a hearing. We affirm. Hicks’s argument that his attorney’s performance prejudiced him is too speculative to require an evidentiary hearing.

Affirmed

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7^th Circuit Court of Appeals

Case Name: Jill Otis v. Kayla J. Demarasse, et al.

Case No.: 16-1875

Officials: RIPPLE, ROVNER, and HAMILTON, Circuit Judges.

Focus: Failure To State A Claim

Jill Otis brought this action pro se under 42 U.S.C. § 1983, alleging that Kayla Demarasse, a Waterford, Wisconsin police officer, ignored her obvious need for medical care after arresting her on suspicion of driving while intoxicated. The district court dismissed her complaint. Ms. Otis, now represented by counsel, appeals the dismissal. She contends that her complaint states a claim for relief and that the district court erred when it concluded that she had pleaded herself out of court.

Ms. Otis’s submissions in the district court fairly allege that Officer Demarasse knew about her need for medical attention and responded in an objectively unreasonable manner. The district court erred in concluding that Ms. Otis had pleaded herself out of court by attaching the police report, which contained a version of the facts different from those in the complaint itself. Accordingly, we vacate the judgment as to Officer Demarasse and remand for further proceedings against the officer.

Vacated and Remanded

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7^th Circuit Court of Appeals

Case Name: LeeAnn Brock-Miller v. United States of America

Case No.: 16-3050

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

Focus: Plea & Sentencing – Ineffective Assistance of Counsel

LeeAnn Brock-Miller pled guilty, pursuant to a plea agreement, to one count of conspiracy to possess with intent to distribute heroin. She received the agreed-upon sentence of ten years’ imprisonment and eight years of supervised release. She then brought a timely motion under 28 U.S.C. § 2255 to challenge her conviction, asserting ineffective assistance of counsel during plea negotiations. The district court declined to hold a hearing, concluded that counsel’s performance was not deficient and denied the motion. We reverse and remand for a hearing on BrockMiller’s section 2255 motion

Reversed and Remanded

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7^th Circuit Court of Appeals

Case Name: Rebecca Ann Akin v. Nancy A. Berryhill

Case No.: 17-1802

Officials: BAUER, KANNE, and BARRETT, Circuit Judges

Focus: ALJ Error – Disability

Rebecca Akin, a 47-year-old woman, challenges the denial of her application for Supplemental Security Income. She contends that she became disabled in 2011 principally from fibromyalgia, back and neck pain, and headaches. Akin argues that the administrative law judge made several errors: The ALJ (1) wrongly discounted her allegations of back pain; (2) improperly credited the opinions of agency physicians who had not reviewed all of the medical records, including relevant MRI scans; and (3) ignored her complaints of headaches. These arguments are persuasive, so we VACATE the judgment of the district court and REMAND the case to the agency for proceedings consistent with this opinion.

Vacated and Remanded

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WI Court of Appeals Digests

WI Court of Appeals – District I

Case Name: State of Wisconsin v. Luis F. Pizzaro

Case No.: 2016AP889-CR

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

Focus: Ineffective Assistance of Counsel

Luis Pizzaro appeals a judgment of conviction for three felonies and an order denying his postconviction motion. Pizzaro argues he was denied his due process right to a fair trial because the circuit court repeatedly reminded a witness who was testifying on the State’s behalf pursuant to a grant of immunity that she was required to testify truthfully and could be subject to a perjury charge for testifying falsely. Pizzaro also argues his trial counsel rendered ineffective assistance by failing to object to those admonitions.

We conclude Pizzaro has forfeited his due process argument based on his attorney’s failure to object. We also conclude Pizzaro has failed to demonstrate he was prejudiced by his counsel not objecting, as the circuit court’s admonitions were warranted by the witness’s behavior and were not objectively so strong as to render the witness’s subsequent testimony involuntary. Moreover, there is no evidence supporting a conclusion that the witness actually felt coerced or testified falsely in response to the court’s reasonable admonishments. Accordingly, we affirm.

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WI Court of Appeals – District III

Case Name: State of Wisconsin v. Arthur Foster

Case No.: 2017AP546

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

Focus: Postconviction Motion Denied

Arthur Foster, pro se, appeals an order denying his postconviction motion in which he requested a resentencing hearing after the circuit court amended the judgment of conviction to set a parole eligibility date. Foster contends the circuit court was required to conduct a new sentencing hearing, giving him the right to be present under WIS. STAT. § 971.04(1)(g) (2015- 16). We reject that argument and affirm the order.

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WI Court of Appeals – District III

Case Name: State of Wisconsin v. Bobbie J. Martz

Case No.: 2017AP1235-CR

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

Focus: Sufficiency of Evidence

Bobbie Martz appeals a judgment convicting her of perjury as a party to a crime, and an order denying her postconviction motion. She challenges the sufficiency of the evidence to support the verdict. We conclude the State failed to present sufficient credible evidence of perjury. Accordingly, we reverse the judgment and order, and we remand the cause with directions to dismiss the case with prejudice.

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WI Court of Appeals – District I

Case Name: State of Wisconsin v. Lindsey Dawayne Neal

Case No.: 2017AP1397-CR

Officials: Kessler, Brash and Dugan, JJ.

Focus: Motion to Suppress Evidence Denied

Lindsey Dawayne Neal appeals a judgment of conviction, following a guilty plea, of one count of possession with intent to deliver cocaine (between one and five grams) and one count of obstructing an officer. Neal argues that the circuit court erroneously denied his motions to suppress evidence obtained as a result of a stop and frisk. We affirm.

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WI Court of Appeals – District I

Case Name: State of Wisconsin v. Marque D. Cummings

Case No.: 2017AP1583-CR

Officials: BRASH, J.

Focus: 4^th Amendment Violation – Seizure

The State appeals the trial court’s grant of a motion to suppress evidence relating to charges brought against Marque D. Cummings for possession of tetrahydrocannabinols (THC). Cummings successfully argued to the trial court that the evidence was seized as the result of an unlawful search and was therefore in violation of the Fourth Amendment. In contrast, the State maintains that the initial stop of Cummings was not a seizure, and thus the constitutional protections of the Fourth Amendment are not applicable. The State further asserts that even if the stop of Cummings is deemed to be a seizure, the police officers had reasonable suspicion that Cummings had engaged in, or was about to engage in, criminal activity. We affirm.

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WI Court of Appeals – District I

Case Name: State of Wisconsin v. D.M.W., Sr.,

Case No.: 2018AP124; 2018AP125

Officials: KESSLER, J.

Focus: Termination of Parental Rights

D.M.W., Sr. appeals the orders terminating his parental rights to two of his children, D.M.W., Jr. and D.W. D.M.W., Sr. contends that the circuit court erroneously severed his fact finding and disposition hearings, sua sponte, from those of the children’s mother. We affirm.

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WI Court of Appeals – District II

Case Name: Barbara A. Simonson v. Jeanne E. Baivier, et al.

Case No.: 2017AP1462

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

Focus: Trusts & Estates – Distribution

Barbara A. Simonson appeals from a final order of the circuit court approving a final plan of distribution for the Estate of John J. Hohler (the Estate) and the John J. and Jane Hohler Trust (the Trust) and ordering surcharges against Simonson.

This is the second appeal from circuit court proceedings involving the Estate and Trust of John and Jane Hohler. Simonson v. Vaira, No. 2016AP113, unpublished slip op. (WI App Sept. 28, 2016). In the prior case, we affirmed the circuit court’s order removing Simonson as personal representative of the Estate and trustee of the Trust. Id. Jeanne E. Baivier was subsequently appointed as a successor trustee, and the circuit court entered an order on June 21, 2017, approving, among other things, the successor trustee’s report and the plan of distribution and ordering sanctions against Simonson. Simonson makes three arguments on appeal: (1) the circuit court erred in imposing surcharges upon her, (2) the court approved a plan of distribution in violation of the express terms of the Trust Agreement, and (3) the court improperly denied compensation relating to allegedly improper lis pendens. As we conclude that the court properly applied its equitable powers, we affirm.

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WI Court of Appeals – District II

Case Name: John Kohnke v. Kenneth Erdman, et al.

Case No.: 2017AP1566

Officials: NEUBAUER, C.J.

Focus: Eviction

Kenneth and Alecia Erdman appeal pro se from an order denying their motion to vacate a judgment of eviction, asserting that the circuit court prematurely resolved the merits of the eviction action and precluded the Erdmans from filing responsive pleadings and having a trial by jury. Because they have not shown any mistake or other basis for relief from the order, we affirm.

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WI Court of Appeals – District IV

Case Name: State of Wisconsin v. Daniel M. Owens

Case No.: 2017AP660-CR

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

Focus: Ineffective Assistance of Counsel

Daniel Owens appeals a judgment of conviction for first-degree reckless homicide and armed robbery with use of force, both as party to a crime, and for being a felon in possession of a firearm. Owens also appeals two circuit court orders denying his motion for postconviction relief. Owens argues that he received ineffective assistance of counsel because his trial counsel could have done more to impeach or neutralize two prosecution witnesses. Because we conclude that Owens’ counsel was not ineffective, we affirm.

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WI Court of Appeals – District IV

Case Name: State of Wisconsin v. Collin M. Gallagher

Case No.: 2017AP1403-CR

Officials: LUNDSTEN, P.J.

Focus: Suppression of Evidence – Blood Test

Collin Gallagher appeals the circuit court’s judgment convicting him of a third intoxicated driving offense. Gallagher argues that the circuit court should have suppressed blood test results evidencing Gallagher’s intoxication.

As I understand Gallagher’s supporting arguments, they depend on the premise that there are only two ways to interpret the warrant, and that either of these interpretations leads to suppression. The first way—which corresponds to Gallagher’s main argument—is that the warrant authorizes the taking of Gallagher’s blood but not subsequent testing of the blood. The second way— which corresponds to what appears to be an alternative argument—is that the warrant implicitly and improperly authorizes unlimited testing of Gallagher’s blood.  I affirm.

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WI Supreme Court Digests

WI Supreme Court

Case Name: CED Properties, LLC, v. City of Oshkosh

Case No.: 2018 WI 24

Focus: Statutory Interpretation

CED Properties, LLC (CED) challenges the special assessment imposed by the City of Oshkosh (City) following the reconfiguration of a traditional traffic light intersection into a roundabout.  We review the unpublished court of appeals decision, CED Properties, LLC v. City of Oshkosh, No. 2016AP474, unpublished slip op. (Wis. Ct. App. Jan. 18, 2017), affirming the circuit court’s grant of summary judgment in favor of the City.3 CED raises two issues: (1) whether the term “special benefits” in Wisconsin’s eminent domain statute has the same meaning in Wisconsin’s special assessments statute, and if so, whether the City’s denial of the existence of any special benefits during the earlier eminent domain proceeding precludes the City from asserting the conferral of special benefits in the later special assessment action; and (2) whether CED raised genuine issues of material fact precluding summary judgment.

We hold that “special benefits” has the same meaning under both statutes. Although the failure to raise the issue of special benefits in an eminent domain action does not necessarily preclude a municipality from later doing so in a special assessment action, a municipality’s admission that special benefits are non-existent in the context of an eminent domain proceeding constitutes relevant evidence in a later challenge to the special assessment.

We further hold the court of appeals erred in concluding CED failed to overcome the presumption of correctness afforded the City’s special assessment and to establish sufficient genuine issues of material fact. The affidavit of CED’s expert raises material factual issues in dispute, including whether the roundabout project conferred a local rather than a general benefit, whether the project conferred any special benefits on CED’s property or actually diminished its value, and whether the amount of the special assessment was fair and equitably apportioned among the commercial properties involved as well as proportionate to the benefits accruing to the property. Because we conclude CED overcame any presumption of correctness by presenting competent evidence to the contrary, we reverse the decision of the court of appeals and remand to the circuit court for a trial.

Reversed and Remanded

Concur:

Dissent: ABRAHAMSON, J. dissents, joined by A.W. BRADLEY, J. (opinion filed)

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WI Supreme Court

Case Name: State of Wisconsin ex rel. Department of Natural Resources v. Wisconsin Court of Appeals, District IV, et al.,

Case No.: 2018 WI 25

Focus: Jurisdiction

The Wisconsin Department of Natural Resources (“DNR”) says its appeal in Clean Wisconsin, Inc. v. DNR, 2016AP1688 (“Clean Wisconsin”) is pending in the wrong district, and asks us to exercise our supervisory authority to shepherd it to the correct venue. Because we agree with the DNR, we grant its petition for a supervisory writ and vacate the order of the Wisconsin Court of Appeals transferring venue for Clean Wisconsin from District II to District IV.

We accepted review because this case presents an important issue of first impression regarding the right of an appellant to select appellate venue under Wis. Stat. § 752.21(2) (2015-16).

Petition Grante

Concur:

Dissent: ABRAHAMSON, J. dissents joined by A.W. BRADLEY J. (opinion filed).

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WI Supreme Court

Case Name: Office of Lawyer Regulation v. James Toran

Case No.: 2018 WI 26

Focus: Attorney Disciplinary Proceedings

Attorney James Toran appeals a report filed by Referee John A. Fiorenza concluding that Attorney Toran committed three counts of professional misconduct and recommending that Attorney Toran should be ordered to pay restitution and that his license to practice law in Wisconsin be suspended for one year. Attorney Toran entered into a stipulation whereby he admitted to the alleged misconduct and agrees to pay restitution. He argues that a lesser sanction is warranted.

We adopt the referee’s findings of fact, conclusions of law, and recommendation regarding restitution, but we conclude that a 60-day suspension of Attorney Toran’s license to practice law is a sufficient sanction for his misconduct. As is our usual practice, we also agree that Attorney Toran should be required to pay the full costs of this proceeding, which are $2,188.05 as of February 6, 2018.

Affirmed

Concur:

Dissent:

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WI Supreme Court

Case Name: Robert H Shugarts, II, et al., v. Dennis M. Mohr

Case No.: 2018 WI 27

Focus: Notice Requirement – Insurance Policy – Underinsured Motorist

The petitioners, Robert and Judith Shugarts, seek review of a published court of appeals decision affirming the circuit court’s grant of summary judgment to the Shugarts’ underinsured motorist (UIM) carrier. They contend that the court of appeals erred in concluding that they failed to provide Allstate Property and Casualty Company (Allstate) with timely notice of their UIM claim and that they failed to rebut the presumption that Allstate was prejudiced by the untimely notice.

Specifically, the Shugarts assert that the court of appeals mistakenly interpreted the UIM policy’s “proof of claim” provision as a “notice of accident” provision. The Shugarts submit that instead it is the tender of the tortfeasor’s underlying policy limits, not the accident itself, that triggers the notice provision in the UIM policy. They further argue that if the proof of claim was not timely filed, then Allstate was not prejudiced by the untimely notice.

We conclude that the operative event triggering the notice requirement in the Shugarts’ UIM policy is the tender of the tortfeasor’s underlying policy limit. We further conclude that Wis. Stat. § 631.81(1) (2009-10) does not apply to the UIM policy provision at issue. Consequently, we determine that the Shugarts provided Allstate with timely proof of their UIM claim as required by the policy language. Because we determine that the Shugarts’ proof of claim was timely filed, we need not address whether Allstate was prejudiced. Accordingly, we reverse the court of appeals and remand to the circuit court for further proceedings.

Reversed and Remanded

Concur:

Dissent:

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Supreme Court Digests

United States Supreme Court

Case Name: Encino Motorcars, LLC v. Navarro, et al.

Case No.: 16-1362

Focus: Statutory Interpretation

The Fair Labor Standards Act (FLSA), 52 Stat. 1060, as amended, 29 U. S. C. §201 et seq., requires employers to pay overtime compensation to covered employees. The FLSA exempts from the overtime-pay requirement “any salesman, partsman, or mechanic primarily engaged in selling or servicing automobiles” at a covered dealership. §213(b)(10)(A). We granted certiorari to decide whether this exemption applies to service advisors—employees at car dealerships who consult with customers about their servicing needs and sell them servicing solutions. We conclude that service advisors are exempt.

Reversed and Remanded

Dissenting: GINSBURG, J., filed a dissenting opinion, in which BREYER, SOTOMAYOR, and KAGAN, JJ., joined.

Concurring: THOMAS, J., delivered the opinion of the Court, in which ROBERTS, C. J., and KENNEDY, ALITO, and GORSUCH, JJ., joined.

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United States Supreme Court

Case Name: Andrew Kisela v. Amy Hughes

Case No.: 17-467

Focus: Qualified Immunity

Officer Andrew Kisela shot Amy Hughes while she was speaking with her roommate, Sharon Chadwick, outside of their home. The record, properly construed at this stage, shows that at the time of the shooting: Hughes stood stationary about six feet away from Chadwick, appeared “composed and content,” Appellant’s Excerpts of Record 109 (Record), and held a kitchen knife down at her side with the blade facing away from Chadwick. Hughes was nowhere near the officers, had committed no illegal act, was suspected of no crime, and did not raise the knife in the direction of Chadwick or anyone else. Faced with these facts, the two other responding officers held their fire, and one testified that he “wanted to continue trying verbal command[s] and see if that would work.” Id., at 120. But not Kisela. He thought it necessary to use deadly force, and so, without giving a warning that he would open fire, he shot Hughes four times, leaving her seriously injured.

If this account of Kisela’s conduct sounds unreasonable, that is because it was. And yet, the Court today insulates that conduct from liability under the doctrine of qualified immunity, holding that Kisela violated no “clearly established” law. See ante, at 5–6. I disagree. Viewing the facts in the light most favorable to Hughes, as the Court must at summary judgment, a jury could find that Kisela violated Hughes’ clearly established Fourth Amendment rights by needlessly resorting to lethal force. In holding otherwise, the Court misapprehends the facts and misapplies the law, effectively treating qualified immunity as an absolute shield. I therefore respectfully dissent.

Petition Granted. Reversed and Remanded

Dissenting: JUSTICE SOTOMAYOR, with whom JUSTICE GINSBURG joins, dissenting.

Concurring:

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