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Weekly Case Digests – October 21, 2019 – October 25, 2019

By: WISCONSIN LAW JOURNAL STAFF//October 25, 2019//

Weekly Case Digests – October 21, 2019 – October 25, 2019

By: WISCONSIN LAW JOURNAL STAFF//October 25, 2019//

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7th Circuit Digests

7th Circuit Court of Appeals

Case Name: Adriel Osorio v. The Tile Shop, LLC,

Case No.: 18-2609

Officials: SYKES, BARRETT, and ST. EVE, Circuit Judges.

Focus: Illinois Wage Payment and Collection Act Violation

Anyone who has worked in a commissioned sales position knows that earnings are unpredictable. Commissions often fluctuate from one pay period to the next. The Tile Shop, LLC, a specialty retailer of ceramic and stone tile, uses a compensation system designed to smooth the earnings of its commissioned sales staff. The Tile Shop pays a semimonthly “draw” of $1,000 ($24,000 annually) even if a sales associate earns less than that amount in commissions during the pay period. The Tile Shop reconciles and recovers any shortfall between actual earned commissions and the $1,000 draw in subsequent pay periods, but only from commissions in excess of $1,000.

For ten months Adriel Osorio sold tile and related products for The Tile Shop, first in Illinois and then in New Mexico. His earnings reflected the ebb and flow of sales. When business was slow and his commissions totaled less than $1,000 in a pay period, The Tile Shop paid him the guaranteed $1,000 and reconciled the difference in later pay periods when his commissions exceeded $1,000. He quit in July 2014.

Months later Osorio filed this class action alleging that The Tile Shop’s “recoverable draw” system violates the Illinois Wage Payment and Collection Act (“IWPCA” or “the Act”) and its implementing regulations. As relevant here, the regulatory scheme prohibits employers from deducting more than 15% from an employee’s wages per paycheck as repayment for previous cash advances. Osorio’s suit claimed that The Tile Shop’s compensation system functions as a series of cash advances and his former employer deducted more than 15% of his wages at various points to recoup previous draw payments.

Ruling on cross-motions for summary judgment, the district judge held that The Tile Shop’s compensation system does not involve “cash advances,” so no violation of Illinois law occurred. We affirm, though on a different rationale. The Act prohibits “deductions by employers from wages or final compensation” unless specified conditions are met. 820 ILL. COMP. STAT. 115/9 (2018). The rules for repayment of cash advances are found in the regulations, but the threshold question is whether The Tile Shop’s draw reconciliations are “deductions” from wages or final compensation. They are not. The reconciliations determine the employee’s gross wages before tax withholding and other deductions are made.

Affirmed

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7th Circuit Court of Appeals

Case Name: Crum & Forster Specialty Insurance Company v. DVO, Inc., formerly known as GHD, Inc.,

Case No.: 18-2571

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

Focus: Insurance – Duty to Defend – Breach of Contract Exclusion

This appeal arises from a diversity action for declaratory relief brought by Crum & Forster Specialty Insurance Company (“Crum”) against GHD Inc., now known as DVO Inc. (“DVO”), seeking a determination that Crum does not have a duty to defend DVO in a state court action filed against DVO. Crum provided insurance to DVO, and the question is whether the Errors & Omissions (“E&O”) coverage of the primary and excess insurance policies it pro‐ vided to DVO, along with any exceptions in the policies, covers the state court claim for a contract violation such that it imposes a duty for Crum to defend DVO in that action.

The underlying contract claim was brought by WTE‐S&S AG Enterprise, LLC (“WTE”) against DVO. DVO designs and builds anaerobic digesters, which use microorganisms to break down biodegradable materials to create biogas. DVO and WTE entered into a Standard Form Agreement, created by the Engineers Joint Contract Documents Committee, un‐ der which DVO was to design and build an anaerobic digester for WTE. The digester was to be used to generate electricity from cow manure which would then be sold to the electric power utility. WTE sued DVO for breach of contract, alleging that DVO failed to fulfill its design duties, responsibilities, and obligations under the contract in that it did not properly design substantial portions of the structural, mechanical, and operational systems of the anaerobic digester, resulting in substantial damages to WTE. It sought over $2 million in damages and fees.

The breach of contract exclusion is set forth in an endorsement. The endorsement modifies the insurance provided under the following Parts:   Commercial General Liability Coverage Part Contractors Pollution Liability Coverage Part Errors and Omissions Liability Coverage Part Third Party Pollution Liability Coverage Part Onsite Cleanup Coverage Part. App. at A119. As such, it replaces the standard Contractual Liability provision. Because the breach of contract exclusion renders only the E&O coverage illusory, one possible reformation would be to delete the applicability of the endorsement only as to the E&O Part, and contractual liability under that Part would then revert back to the terms of the original Contractual Liability provision.

But we need not determine precisely what reformation is appropriate here. DVO did not file a cross‐motion for summary judgment. The district court on remand may consider DVO’s reasonable expectations in securing the coverage, and can reform the contract so as to give effect to that expectation. The focus, however, must be on that reasonable expectation, which was upended by the breach of contract exclusion that rendered it illusory. The availability of third‐party claims is irrelevant unless it is determined to be a part of DVO’s reasonable expectation of coverage. The decision of the district court is REVERSED and the case REMANDED for further proceedings consistent with this opinion.

Reversed and remanded

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7th Circuit Court of Appeals

Case Name: Leibundguth Storage & Van Service, Inc., v. Village of Downers Grove, Illinois,

Case No.: 16-3055

Officials: BAUER and EASTERBROOK, Circuit Judges, and DEGUILIO, District Judge.

Focus: Ordinance Interpretation – 1st Amendment Violation

An ordinance in Downers Grove, Illinois, limits the size and location of signs. Leibundguth Storage & Van Service contends that this ordinance violates the First Amendment to the Constitution (applied to the states by the Fourteenth) because it is riddled with exceptions and therefore is a form of content discrimination that the Village has not justified. See Reed v. Gilbert, 135 S. Ct. 2218 (2015). But because the principal topic of the ordinance is commercial speech, the district court concluded that Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980), rather than Reed supplies the rule of decision, and it found the ordinance valid. 150 F. Supp. 3d 910 (N.D. Ill. 2015). We conclude that, whether or not Reed applies, this does not do Leibundguth any good because it is not affected by the problematic exceptions.

Affirmed

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7th Circuit Court of Appeals

Case Name: Patricia Ann Koehn v. Delta Outsource Group, Inc., et al.,

Case No.: 19-1088

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

Focus: FDCPA Violation

Plaintiff Patricia Ann Koehn brought this suit against a collection agency, alleging that its collection letter was misleading and violated the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. The district court granted the collection agency’s motion to dismiss for failure to state a claim, concluding that no significant fraction of the population would be misled by the letter. We agree and affirm.

Affirmed

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7th Circuit Court of Appeals

Case Name: Jerome Senegal, et al. v. JP Morgan Chase Bank, N.A.

Case No.: 19-1141

Officials: EASTERBROOK, KANNE, and BRENNAN, Circuit Judges.

Focus: Class Action – Opt Out of Settlement

The district court certified a class of African-American financial advisers who worked at JPMorgan Chase Bank between 2013 and 2018. This class, which has about 250 members, alleged that the Bank treated them less favorably than equivalent advisers of other races or backgrounds. The parties filed a settlement together with the complaint. The agreement, a product of 16 months’ presuit negotiations, includes a payment of $19.5 million for the benefit of class members who do not opt out, plus changes in the Bank’s operations and a fund of about $4.5 million to cover the costs of those changes and establish a reserve for unexpected events. The order certifying the class relied on Fed. R. Civ. P. 23(b)(2) with respect to the operational changes and Rule 23(b)(3) with respect to the proposed payments to class members.

They present several arguments. They contend, for example, that the judge did not make the findings required by Rule 23 for a settlement class, see Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997), and that because they are still in the class—members just can’t opt out of (b)(2) classes—the judge should have listened to their protests despite what the notice said. They maintain that the notice did not provide enough information for them to make a reasoned decision whether to opt out of the financial portion of the relief. They also assert that the settlement provides too much ($4.5 million) to implement the new employment practices and not enough ($19.5 million) for distribution to class members. But they did not either object to the language of the notice or ask for reinstatement as full class members. And this leads the appellees (the Bank plus the class representatives) to contend that they lack “standing to appeal.”

Only persons aggrieved by a judgment may appeal from it. See, e.g., Deposit Guaranty National Bank v. Roper, 445 U.S. 326, 333 (1980). These objectors are not aggrieved by the decisions of which they complain, so the appeal is dismissed.

Dismissed

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7th Circuit Court of Appeals

Case Name: Carl Leeper v. Hamilton County Coal, LLC, et al.

Case No.: 19-1109

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

Focus: Class Action – WARN Act Violation

A group of workers at an Illinois coal mine received some unwelcome news on February 5, 2016. Their employer, Hamilton County Coal, LLC, announced a “temporary layoff” with an expected end date of August 1, 2016. Carl Leeper, a full-time maintenance worker at the mine, responded with this class action under the Worker Adjustment and Retraining Notification Act (the “WARN Act” or “the Act”), which requires employers to give affected employees 60 days’ notice before imposing a “mass layoff.” 29 U.S.C. § 2102(a)(1). The Act defines a mass layoff as an event in which at least 33% of a site’s full-time workforce suffers an “employment loss.” Id. § 2101(a)(3)(B). The district court entered summary judgment for Hamilton because the work site did not experience a “mass layoff” as defined in the Act.

We affirm. The record contains no evidence of a mass layoff. The term “employment loss” is defined as a permanent termination, a layoff exceeding six months, or an extended reduction of work hours. None of those events occurred here. Instead, Hamilton initiated a temporary layoff of under six months.

Affirmed

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7th Circuit Court of Appeals

Case Name: The Estate of Swannie Her, et al. v. Craig Hoeppner, Parks Director for the City of West Bend, et al.

Case No.: 18-3524

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

Focus: Due Process Violation

A June afternoon in Wisconsin took a tragic turn when six-year-old Swannie Her was found unresponsive on the bottom of a man-made swimming pond operated by the City of West Bend. She never regained consciousness and died a few days later.

Swannie’s estate, her mother, and her siblings filed suit alleging that she died as a result of federal constitutional and state-law violations by the West Bend Parks Director, the seven lifeguards who were on duty, and the City. The constitutional claim arises under 42 U.S.C. § 1983 and alleges a deprivation of life without due process in violation of rights secured by the Fourteenth Amendment. The theory of the claim rests on two contentions: (1) the City’s swimming pond is a state-created danger and (2) the defendants acted or failed to act in a way that increased the danger. A magistrate judge entered summary judgment for the defendants, ruling that the evidence is insufficient to permit a reasonable jury to find a due-process violation premised on a state-created danger. The judge relinquished jurisdiction over the state-law claims, setting up this appeal.

We affirm. Liability for injury from a state-created danger is an exception to the general rule that the Due Process Clause confers no affirmative right to governmental aid. DeShaney v. Winnebago Cty. Dep’t of Soc. Servs., 489 U.S. 189, 196 (1989). Our caselaw construes this exception narrowly, and the judge correctly concluded that this case falls outside its boundaries. No reasonable jury could find that the defendants created a danger just by operating a public swimming pond or that they did anything to increase the danger to Swannie before she drowned. Nor was their conduct so egregious and culpable that it “shocks the conscience,” a necessary predicate for a court to find that an injury from a state-created danger amounts to a due-process violation.

Affirmed

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WI Court of Appeals Digests

WI Court of Appeals – District III

Case Name: State of Wisconsin v. Garrett A. German

Case No.: 2018AP78-CR

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

Focus: Probable Cause – Warrantless Search

Garrett German appeals a judgment, entered upon his no-contest pleas, convicting him of two counts of possession of child pornography, contrary to WIS. STAT. § 948.12(1m) (2017-18). German contends that the warrant issued for the search of his home was not supported by probable cause because the affidavit upon which the warrant was based lacked the details necessary for the warrant-issuing judge to distinguish German’s possession of legal images of pornography from his possession of illegal child pornography. Further, he contends that because law enforcement’s reliance on the issued warrant was not in good faith, all evidence derived from the execution of the warrant must be suppressed.

We assume, without deciding, that there was a lack of probable cause to support the issuance of the search warrant. However, we conclude that the good faith exception to the exclusionary rule applies because law enforcement acted in objectively reasonable reliance on a warrant issued by a detached and neutral magistrate.

We reach this conclusion, primarily, because at the time the search warrant was issued no reasonably well-trained Wisconsin law enforcement officer would have known that he or she had to provide a description of the images at issue—beyond that of stating they appeared to constitute child pornography—in order to show probable cause that the images constituted child pornography, as defined by WIS. STAT. § 948.12. Indeed, no Wisconsin legal authority holds that such a description is necessary, and there is a split amongst the federal circuit courts of appeal that have addressed the issue. Consequently, we affirm.

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WI Court of Appeals – District III

Case Name: State of Wisconsin v. Jesse J. Jennerjohn

Case No.: 2018AP1762-CR

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

Focus: OWI – Suppression of Evidence

Jesse Jennerjohn appeals a judgment convicting him of possession with intent to deliver tetrahydrocannabinols (THC). He contends the circuit court erred by denying his motion to suppress evidence that police found during a warrantless search of his residence. The State argues the search was permissible under the community caretaker exception to the warrant requirement. We conclude, however, that the officers were not exercising a bona fide community caretaker function when they searched Jennerjohn’s residence, and, even if they were, the public interest in searching the residence did not outweigh the intrusion upon Jennerjohn’s privacy. As such, the community caretaker exception is inapplicable, and the warrantless search of Jennerjohn’s residence was unconstitutional.

The State argues, in the alternative, that even if the search was unconstitutional, “exclusion is not an appropriate remedy under the circumstances.” We disagree, for the reasons explained below. Accordingly, we reverse Jennerjohn’s judgment of conviction and remand with directions that the circuit court grant Jennerjohn’s suppression motion.

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WI Court of Appeals – District I

Case Name: State of Wisconsin v. Marvin Frank Robinson

Case No.: 2019AP105-CR; 2019AP106-CR

Officials: KESSLER, J.

Focus: Sentencing Guidelines

Marvin Frank Robinson appeals a judgment of conviction, following a guilty plea, of one count of battery and one count of knowingly violating a restraining order, all charged with the domestic abuse modifier, in Milwaukee County Circuit Court case No. 2017CM2528. He also appeals from the judgment of conviction, following a guilty plea, of one count of misdemeanor bail jumping, one count of criminal damage to property, and one count of disorderly conduct, all charged with the domestic abuse modifier, in Milwaukee County Circuit Court case No. 2017CF3763. Robinson also appeals from the postconviction order in these consolidated cases denying his motion for relief. On appeal, Robinson contends that the record was insufficient to establish a factual basis for the imposition of the domestic abuse modifier under WIS. STAT. § 968.075 and to require Robinson to pay to the domestic abuse surcharges under WIS. STAT. § 973.055. “Domestic abuse” is not a standalone crime but, rather, a modifier that can be attached to other offenses. Whether an offense qualifies as “domestic abuse” within the meaning of WIS. STAT. § 968.075(1)(a) is a mixed question of fact and law. See State v. Schmidt, 2004 WI App 235, ¶13, 277 Wis. 2d 561, 691 N.W.2d 379. This court applies a “clearly erroneous” standard of review to a circuit court’s factual findings We affirm.

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WI Court of Appeals – District I

Case Name: State of Wisconsin v. K.K.E.

Case No.: 2019AP115; 2019AP116; 2019AP117

Officials: DUGAN, J.

Focus: Termination of Parental Rights

K.K.E. appeals the orders terminating her parental rights to her three biological children. K.K.E. argues that the trial court erroneously exercised its discretion when it concluded that termination of her parental rights was in the best interests of each of her children.  We disagree and, therefore, affirm.

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WI Court of Appeals – District I

Case Name: Earnest E. Creech v. Anita Moore

Case No.: 2019AP233

Officials: BRASH, P.J.

Focus: Judgment of Replevin

Earnest E. Creech, pro se, appeals from a judgment entered by the trial court in resolution of his small claims case against Anita Moore. Creech had filed the underlying action seeking the return of several items of personal property. The trial court issued a judgment of replevin in favor of Creech for one of the items; Creech subsequently filed this appeal seeking the items that were not awarded to him.

Moore did not respond. This court ordered her to do so, stating that a respondent’s brief was necessary for the resolution of this appeal, and that her failure to file a respondent’s brief would constitute her abandonment of this appeal. We further informed Moore that her failure to file the brief could result in sanctions being imposed against her, including summary reversal of the trial court’s decision that was in her favor, pursuant to WIS. STAT. RULE 809.83(2). Still, Moore never filed a respondent’s brief.

We conclude that Moore has abandoned this appeal. Therefore, we exercise our discretionary power to impose the sanction of summary reversal of that portion of the trial court’s decision in Moore’s favor, pursuant to WIS. STAT. RULE 809.83(2). Accordingly, we reverse and remand this matter to the trial court to enter a judgment of replevin for the remaining items of personal property that Creech was seeking to obtain from Moore.

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WI Court of Appeals – District II

Case Name: Angela Jean Strunsee v. Jeffrey Alan La Bri

Case No.: 2018AP1855

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

Focus: Abuse of Discretion – Maintenance and Child Support

In this postdivorce judgment case, Angela Strunsee p/k/a Angela La Bri appeals from an order reducing maintenance and child support from her former husband, Jeffrey La Bri, as the circuit court held that a decrease in Jeffrey’s income constituted a substantial change in circumstances. We conclude that the court did not erroneously exercise its discretion, as its decision was one a reasonable judge could make. We affirm.

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WI Court of Appeals – District II

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

Case No.: 2019AP167-CR

Officials: NEUBAUER, C.J.

Focus: OWI – Suppression of Evidence

The State appeals from the circuit court’s order suppressing evidence obtained pursuant to the arrest of Scott J. Faruzzi, who had been charged with operating a motor vehicle while under the influence of an intoxicant (OWI). Although evidence supported the officer’s initial stop and further investigation involving field sobriety tests, we see no error in the circuit court’s conclusion that the totality of the evidence, including the police video, did not establish probable cause to arrest for OWI. We affirm.

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WI Court of Appeals – District II

Case Name: William Tadisch v. Steimle Birschbach

Case No.: 2019AP817

Officials: GUNDRUM, J.

Focus: Small Claims – Attorney Fees

William Tadisch appeals pro se from an order of the circuit court dismissing his small claims case with prejudice and awarding Steimle Birschbach $1950 in attorney fees associated with defending against this action. We affirm.

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WI Court of Appeals – District IV

Case Name: Vernon County Department of Human Services

Case No.: 2018AP863; 2018AP864; 2018AP865; 2018AP866

Officials: NASHOLD, J.

Focus: Guardian Ad Litem Costs

In these consolidated pro se appeals, K.F. and M.F. appeal the circuit court’s decision ordering them to reimburse Vernon County for guardian ad litem costs. K.F. and M.F. also appeal the order denying their motion to modify the order for reimbursement. The circuit court’s orders are affirmed.

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WI Court of Appeals – District IV

Case Name: State of Wisconsin v. Mark A. Kusters

Case No.: 2018AP1812-CR

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

Focus: Jury Instructions

A jury found Mark Kusters guilty of first-degree reckless homicide for the shooting death of Richard Flynn. Kusters seeks a new trial on the ground that the circuit court erred when it denied his request for a jury instruction on self-defense. We assume, without deciding, that the court erred in declining to instruct the jury on self-defense. However, we conclude that the assumed error was harmless. Therefore, we affirm.

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WI Court of Appeals – District IV

Case Name: Waupaca County v. K.E.K.

Case No.: 2018AP1887          

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

Focus: Prisoner – Involuntary Commitment

K.E.K. appeals two decisions of the circuit court: one to extend K.E.K.’s involuntary commitment and the other requiring involuntary medication and treatment. In challenging the order extending her commitment, K.E.K. argues that (1) the circuit court lacked competency to order involuntary recommitment because Waupaca County filed the petition after the time required by WIS. STAT. § 51.20(13)(g)2r. and (2) the recommitment paragraph, § 51.20(1)(am), is unconstitutional, both facially and as applied to K.E.K., on both vagueness and due process grounds. Regarding the ruling requiring involuntary medication and treatment, K.E.K. argues that the circuit court erred by failing to identify supporting statutory grounds and that the evidence is insufficient. We reject all of K.E.K.’s arguments and affirm.

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WI Court of Appeals – District IV

Case Name: Samuel M. Polhamus v. Michael J. Geier, et al. 

Case No.: 2019AP602

Officials: KLOPPENBURG, J.

Focus: Small Claims – Cost Reimbursement

Samuel Polhamus, acting pro se, appeals a circuit court order dismissing his small claims complaint seeking reimbursement of the cost of retrieving his vehicle after it was towed and impounded.  I affirm.

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WI Court of Appeals – District I

Case Name: State of Wisconsin v. Jeffrey Edward Olson

Case No.: 2018AP1987

Officials: BRASH, P.J.

Focus: Order Correcting Opinion

PLEASE TAKE NOTICE that corrections were made to paragraphs 2, 13, and 15, as well as footnote 4 in the above-captioned opinion which was released on September 17, 2019. A corrected electronic version in its entirety is available on the court’s website at www.wicourts.gov.

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WI Supreme Court Digests

WI Supreme Court

Case Name: Office of Lawyer Regulation v. Tracy R. Eichhorn-Hicks

Case No.: 2019 WI 91

Focus: Attorney Disciplinary Hearing

In this reciprocal discipline matter, Attorney Tracy R. Eichhorn-Hicks has entered into a stipulation with the Office of Lawyer Regulation (OLR). In the stipulation the parties agree that it would be appropriate for this court to impose the level of discipline sought by the OLR as being reciprocal to the discipline imposed by the Supreme Court of Minnesota, namely a 120-day suspension of Attorney Eichhorn-Hicks’ license to practice law in Wisconsin and an order directing Attorney Eichhorn-Hicks to comply with the conditions imposed upon him by the Supreme Court of Minnesota. Having carefully reviewed the matter, we accept the stipulation and impose the requested sanction. Given the fact that Attorney Eichhorn-Hicks entered into a comprehensive stipulation before the appointment of a referee, we do not require him to pay the costs of this proceeding.

Stipulation accepted

Concur:

Dissent:

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WI Supreme Court

Case Name: Office of Lawyer Regulation v. Christopher A. Mutschler

Case No.: 2019 WI 92

Focus: Attorney Disciplinary Hearing

The respondent-appellant, Christopher A. Mutschler, appeals Referee Jonathan V. Goodman’s report recommending that we deny Attorney Mutschler’s petition for reinstatement of his license to practice law in Wisconsin, following his 2011 consensual license revocation. After fully reviewing this matter, we agree that Attorney Mutschler has not satisfied the criteria required to resume the practice of law in this state, and we deny his petition for reinstatement. We also determine that Attorney Mutschler should be required to pay the costs of this reinstatement proceeding, which are $4,577.90 as of December 18, 2018.

Petition denied

Concur:

Dissent:

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