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Marital property rights, double recovery debated in front of state Supreme Court

Marital property rights and an issue of double recovery are at the center of a case in front of the Wisconsin Supreme Court.

State v. Ryan Muth came to the high court on cross petitions for review from both the state and Muth. The defendant pleaded guilty to homicide in a 2016 fatal drunken-driving crash. His insurer, Progressive Insurance Co., paid the victim’s three adult children $100,000 in exchange for their agreement to a document titled “Full Release of All Claims with Indemnity.” The document discharged Muth and Progressive from “any and all claims and actions” resulting from the fatal crash.

During later restitution proceedings, the victim’s children requested reimbursement for various expenses related to her death, include restitution for their husbands’ lost wages for time off. The defense argued the children had already collected the expenses claimed as restitution through the civil settlement, and the husbands were not entitled to restitution for their lost wages. The trial court rejected those arguments.

Muth appealed with partial success. The Court of Appeals disagreed that the restitution award should be reduced by the civil settlement, upholding the lower court’s ruling, but it agreed that the husbands were not entitled to restitution.

The state Supreme Court considered both issues during oral arguments on Thursday. Andrew Mishlove, Muth’s attorney, said he believes the marital property issue is moot because it’s been satisfied with the $100,000 settlement.

When asked about the state’s arguments for paying the husband’s restitution, Mishlove argued that the definition of a victim, under state statute, excludes the spouse of the victim.

“There’s no authority from any marital property state to indicate that an injured spouse has the right to collect the lost income of a non-injured spouse, either in a civil tort action or a restitution,” Mishlove said.

Attorney Hannah Jurss, assistant attorney general, said Muth’s interpretation causes conflict when applied to all the relevant laws.

“Both the restitution statute and the marital property chapter serve broad protective purposes and establish, in essence, yeses,” Jurss said. “But under Muth’s interpretation, these broad protective schemes when coming together should be interpreted narrowly to say no and not protect.”

Jurss said Muth didn’t dispute that he failed to show what portion of the $100,000 settlement covered general and special damages. She argued if the amounts are unknown, the court’s duty is to impose restitution.

“The punitive and rehabilitative purposes of criminal restitution are not advanced by the defendant’s car insurance company paying or offsetting or completely barring restitution obligations of the defendant,” Jurss said.

Mishlove said the issue is whether the victims are getting a double recovery. He said the state wants to conflate accord and satisfaction, and setoff, which he called a misunderstanding.

“What I think is really going on here is we’re fashioning a made-whole rule,” Mishlove said. “If we’re going to do that, we should do it explicitly and just say that if a crime victim is not made whole, then we’re going to have a hearing on it, instead of putting the burden on Mr. Muth to cross examine crime victims about what they meant when they signed a release.”

At the end of the arguments, Chief Justice Pat Roggensack praised both attorneys, calling them both wonderful orators. The justices also honored Justice Dan Kelly, as it was the court’s last scheduled oral argument.

About Michaela Paukner, [email protected]

Michaela Paukner is the legal reporter for the Wisconsin Law Journal. She can be reached at (414) 225-1825 or by email at [email protected]

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