Vol. 77, No. 6, June 2004

2003 Significant Court Decisions

by Daniel W. Hildebrand

Constitutional Law

This year the Wisconsin Supreme Court had its first opportunity to interpret Wisconsin's new constitutional right to "keep and bear arms." The amendment provides that "the people have the right to keep and bear arms for security, defense, hunting, recreation or any other lawful purpose."¹ In State v. Hamdan,² Hamdan owned and operated a grocery and liquor store located in a high-crime neighborhood. The store had been the target of four armed robberies, three of which were successful, and the site of two fatal shootings. As a result, Hamdan kept a handgun under the store's front counter next to the cash register during store hours. Police officers visited Hamdan one evening explaining they were conducting a license check. During the ensuing conversation, one of the officers asked Hamdan if he kept a gun in the store and, if so, where it was located. Hamdan answered affirmatively and pulled the wrapped gun from his trousers. Hamdan was later charged with carrying a concealed weapon in violation of Wis. Stat. section 941.23 and was convicted.

The court held that the concealed weapon statute was unconstitutional as applied to Hamdan. The constitutional amendment does not establish an unfettered right to bear arms. The state retains the power to impose reasonable regulations on weapons, including a general prohibition on the carrying of concealed weapons. However, the state may not apply these regulations in situations that functionally disallow the exercise of rights conferred under article I, section 25. The state must be especially vigilant in circumstances in which a person's need to exercise the right is most pronounced.

Application of the concealed weapon statute in instances in which the public interest in enforcing the statute is weak may unconstitutionally impair a person's right to keep and bear arms when that person's interest in exercising that right through the use of a concealed weapon is substantial. Here, Hamdan kept a concealed weapon for purposes of security, a substantial interest when undertaken to secure a home or a privately owned business. Conversely, the state's interest in prohibiting concealed weapons is least compelling in these circumstances because application of the statute has only a tenuous relation to the alleviation of the state's acknowledged interests in enforcing the statute. Hamdan exercised his rights under circumstances in which he had a substantial need to do so. He had a grocery store in a high-crime neighborhood. The store had previously been the site of robberies and homicides. Hamdan himself had been a crime victim. He had concerns not only for himself but for his family and customers. He had good reason to anticipate additional crime problems at the store and to provide his own security to deal with those problems. Furthermore, Hamdan had no reasonable means of keeping and handling the weapon in his store except to conceal it. It would have been dangerous and counterproductive to openly display the weapon during business hours and requiring him to do so would have seriously impaired his right to bear arms for security.

Chief Justice Abrahamson dissented, concluding that Wis. Stat. section 941.23, which prohibits people from going armed with a concealed weapon, is constitutional as written and as applied. The court should not rewrite the statute to include exceptions for owners of privately operated businesses and persons in their private residences. If the statute is too broad, needing exceptions to render it constitutional, the court should strike the statute down and allow the legislature to enact a more narrow prohibition. Justice Crooks also dissented, concluding that enactment of the amendment made the concealed weapon statute unconstitutional because it has become unnecessarily broad and provides no exceptions as it is written.

In State v. Cole,³ Cole was carrying a concealed weapon while he was a passenger in a vehicle. He also was carrying marijuana. In upholding the statute as applied to Cole, the supreme court rejected Cole's argument that strict scrutiny or intermediate scrutiny is required. There is no absolute right to bear arms. Such a right, although fundamental, is subject to reasonable restriction. The concealed weapon statute is not effectively repealed by the right to bear arms amendment. Ordinarily, prohibitions in the concealed weapon statute constitute a reasonable time, place, and manner restriction upon the right to bear arms, which is not rendered illusory by prohibiting an individual from keeping a loaded weapon hidden either in the glove compartment or under the front seat of a vehicle.

Attorneys

In State v. Meeks,⁴ the supreme court held that an attorney's opinions, perceptions, and impressions relating to a former client's mental competency fall within the definition of a confidential communication pursuant to Wis. Stat. section 905.03(2) and SCR 20:1.6. Meeks had been charged with felony murder as a habitual criminal. His counsel first raised the issue of Meeks' competency after his initial appearance. The trial court initially determined that Meeks was not competent and committed him to the Department of Health and Family Services for treatment. After Meeks received treatment, the trial court determined that he was then competent to proceed. The trial court relied on testimony from physicians, a parole agent, and a public defender who previously represented Meeks. The state had subpoenaed Meeks' former attorney to testify. She testified she had represented Meeks on several occasions and testified as her practices raised competency issues before the court. Among other things, she clearly offered her opinions, perceptions, and impressions concerning Meeks' competency.

The court held that Meeks was entitled to assert the attorney-client privilege pursuant to Wis. Stat. section 905.03. Only the client can waive privilege. There is nothing in the record to indicate that Meeks consented to the testimony or in any way waived the attorney-client privilege. Although there is a split of authority in other states, the court held that an attorney's opinions, perceptions, and impressions of a client's competency to proceed are protected. The testimony regarding Meeks' mental competency did not involve facts observable by just anyone but necessarily involved the entire confidential conference setting, as well as the revelation of information conveyed to that attorney through private confidential conversations with Meeks. Furthermore, under SCR 20:1.6, the confidentiality rule applies to all information relating to the representation, whatever its source. A lawyer may not properly disclose such information unless the client consents after consultation, other than as provided in exceptions to that rule not applicable here.

Justices Sykes and Prosser dissented. The prosecutor indicated that he did not intend to question Meeks' former attorney regarding any privileged attorney-client communications, but rather would be pursuing a more general line of questioning. Meeks' counsel objected to the testimony on relevance grounds. The testimony of the former attorney was very general; it concerned her background, training, and experience, including representation of approximately 3,000 defendants, among them persons with mental health problems. She was never asked nor did she offer any testimony about her opinions, perceptions, and impressions about Meeks' mental competence. Nor was she ever asked about nor did she reveal any confidential communications regarding her former client.

Torts - Economic Loss Doctrine

In Digicorp Inc. v. Ameritech Corp.,⁵ the supreme court held that Wisconsin recognizes a narrow fraud in the inducement exception to the economic loss doctrine. Douglas-Hanson Co. v. B.F. Goodrich Co.,⁶ a prior court of appeals decision that was affirmed by the supreme court on a tie vote, opined that fraud in the inducement was always an exception to the economic loss doctrine. However, in Digicorp the court held, consistent with Huron Tool & Engineering Co. v. Precision Consulting Services Inc.,⁷ that the economic loss doctrine acts as a bar when fraud in the inducement is interwoven with the contract involving matters for which risks and responsibilities were addressed. Such matters must not be extraneous to the contract. Justices Crooks and Prosser rejected the broad exception that the court of appeals adopted in Douglas-Hanson, opining that the Huron Tool test was correct. In this case, the subject of the alleged misrepresentation did not involve the service subject to the contract but dealt with the responsibility and risk of a certain employee. These risks and responsibilities were interwoven into the contract.

Justice Sykes, concurring, would not adopt any fraud in the inducement exception to the economic loss doctrine. She argued that the doctrine should preclude commercial, contracting parties from recovering tort damages for purely economic losses associated with a contractual relationship. Justices Bradley and Bablitch dissented. They would have followed the court of appeals decision in Douglas-Hanson, which holds that the economic loss doctrine does not preclude a plaintiff's claim for intentional misrepresentation that fraudulently induces a plaintiff to enter into the contract. Chief Justice Abrahamson and Justice Wilcox did not participate.

Insurance

In Johnson Controls Inc. v. Employers Insurance of Wausau,⁸ the supreme court held that an insured's costs of restoring and remediating damaged property, whether the costs are based on remediation efforts of a third party (including the government) or are incurred directly by the insured, are covered damages under applicable comprehensive general liability (CGL) policies, overruling City of Edgerton v. General Casualty Co. of Wisconsin.⁹ The court overruled Edgerton because problems with that decision have become so obvious and so acute that they cannot be ignored.

In this case, Johnson Controls sought coverage for cleanup costs it incurred in complying with a presuit demand from a federal agency, a state agency, or a nongovernment third party to remediate the sites in accordance with the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), popularly known as "Superfund." Johnson Controls alleged that in every instance it promptly notified its CGL insurer or insurers of the liability claims and requested the insurer to indemnify it for cleanup costs. The insurers refused. The insurance contracts required the insurer to pay on behalf of the insured all sums that the insured shall become legally obligated to pay as damages because of property damage to which the policy applies caused by an occurrence.

In overruling Edgerton, the court held that clean-up costs were "damages" under the policies, rejecting the insurers' argument that clean-up costs were relief in the form of restitution or an injunction through administrative orders. The court held that response costs are "damages" from the perspective of an ordinary insured because the law imposes costs on the insured to remediate property that the insured previously damaged. The Edgerton opinion was too quick to embrace the strict dichotomy between legal damages and equitable actions. Furthermore, it did not make any sense to make the determination of whether "damages" arose be dependent on whether the party bringing a legal action was a governmental agency or some other entity.

Justices Wilcox and Bradley dissented. They argued that the principle of stare decisis applies, and that courts and numerous private parties relied on the now-overruled Edgerton decision. Nothing has changed. The insurance policy language has not changed nor has CERCLA changed. Insurance is one of the most heavily regulated businesses in the state. The legislature could have but did not act to change the rule of Edgerton. The effect of overruling Edgerton is to subject a group of similarly situated litigants to two different rules of law based merely on when they litigated their disputes. This result runs contrary to the basic principles of justice in a free society.

Torts - Immunities

In Scott v. Savers Property & Casualty Insurance Co.,¹⁰ the supreme court applied Wisconsin's governmental immunity statute¹¹ to dismiss a negligence complaint against a high school guidance counselor. Scott and his parents alleged that the counselor provided them with inaccurate information about National Collegiate Athletic Association (NCAA) scholarship eligibility requirements. As a result, Scott lost a hockey scholarship to the University of Alaska. The court also held that there was no enforceable contract created when the guidance counselor agreed to assist Scott in selecting classes approved by the NCAA.

Wis. Stat. section 893.80(4) provides that no suit may be brought against a governmental subdivision for acts done in the exercise of legislative, quasi-legislative, judicial, or quasi-judicial functions. Such functions are those that involve the exercise of "discretion" as opposed to ministerial duties imposed by law. The court held that the guidance counselor's recommendations did not fall within the ministerial duty or professional discretion exceptions to immunity. The provision of guidance services is inherently discretionary because the statutes and regulations do not impose, proscribe, and define the time, mode, and occasion for the performance. Neither the statute nor the regulations create a duty that is absolute, certain, and imperative with respect to counseling or providing information about NCAA requirements. The professional discretion exception does not apply to a guidance counselor.

Justice Prosser dissented. He argued that the decision was inconsistent with Holytz v. City of Milwaukee,¹² a decision in which an unanimous court attacked and belittled the doctrine of governmental immunity. The legislature is not responsible for reenactment of governmental immunity. Rather, the court was responsible for several decades of back-sliding that produced the Scott opinion. The result is profoundly wrong and unjust and is contrary to legislative intent.

Endnotes

¹Wis. Const. art. I, § 25.

²2003 WI 113, 264 Wis. 2d 433, 665 N.W.2d 785.

³2003 WI 112, 264 Wis. 2d 520, 665 N.W.2d 328.

⁴2003 WI 104, 263 Wis. 2d 794, 666 N.W.2d 859.

⁵2003 WI 54, 262 Wis. 2d 32, 662 N.W.2d 652.

⁶ 229 Wis. 2d 132, 598 N.W.2d 262 (Ct. App. 1999), aff'd, 2002 WI 22, 233 Wis. 2d 276, 607 N.W.2d 621.

⁷209 Mich. App. 365, 532 N.W.2d 541 (1995).

⁸2003 WI 108, 264 Wis. 2d 60, 665 N.W.2d 257.

⁹184 Wis. 2d 750, 517 N.W.2d 463 (1994), cert. denied, 514 U.S. 1017 (1995).

¹⁰2003 WI 60, 262 Wis. 2d 127, 663 N.W.2d 715.

¹¹Wis. Stat. § 893.80(4).

¹²17 Wis. 2d 26, 115 N.W.2d 618 (1962).

Other Significant Cases

Constitutional Law

Wagner v. Milwaukee County Election Comm'n, 2003 WI 103, 263 Wis. 2d 709, 666 N.W.2d 816 (Wis. Const., art. VII, § 10(1) disqualifies judge from serving in nonjudicial offices during term for which he or she was elected).

State v. Jorgensen, 2003 WI 105, 264 Wis. 2d 157, 667 N.W.2d 318 (constitutionality of sentencing guidelines upheld).

Torts

Trinity Evangelical Lutheran Church & School-Freistadt v. Tower Ins. Co., 2003 WI 46, 261 Wis. 2d 333, 661 N.W.2d 789 (punitive damages awarded for bad faith denial of coverage).

Alvarado v. Sersch, 2003 WI 55, 262 Wis. 2d 74, 662 N.W.2d 350 (summary judgment based on public policy factors should not have been granted in a negligence case).

Pachowitz v. LeDoux, 2003 WI App 120, 265 Wis. 2d 631, 666 N.W.2d 88 ("publicity" element of right of privacy tort may be based on disclosure to one person).

Bicknese v. Sutula, 2003 WI 31, 260 Wis. 2d 713, 660 N.W.2d 289 (public officer immunity does not apply to promissory estoppel).

Attorneys

State v. Thiel, 2003 WI 111, 264 Wis. 2d 571, 665 N.W.2d 305 (ineffective assistance of counsel).

Family Law

Tammie J.C. v. Robert T.R., 2003 WI 61, 262 Wis. 2d 217, 663 N.W.2d 734 (termination of parental rights when terminated parent had no contact with Wisconsin).

Rottscheit v. Dumler, 2003 WI 62, 262 Wis. 2d 292, 664 N.W.2d 525 (child support reduction based on incarceration).

Sulzer v. Diedrich, 2003 WI 90, 263 Wis. 2d 496, 664 N.W.2d 641 (constructive trust arising out of mistake).

Harassment

Predick v. O'Connor, 2003 WI App 46, 260 Wis. 2d 323, 660 N.W.2d 1 (banishment order upheld for repeat violation of no-harassment injunction).

Probate

Klauser v. Schmitz, 2003 WI App 157, 265 Wis. 2d 860, 667 N.W.2d 862 (personal representative's conflict is not "good cause" to disqualify).

Municipal Law

Mount Horeb Cmty. Alert v. Village Bd., 2003 WI 100, 263 Wis. 2d 544, 665 N.W.2d 229 (requisites for direct legislation).

Sauk County v. Gumz, 2003 WI App 165, 266 Wis. 2d 758, 669 N.W.2d 509 (ordinance requiring permit for "Weedstock" unconstitutional).

Guardianship

Marjorie A.G. v. Dodge County Dep't of Human Servs., 2003 WI App 52, 261 Wis. 2d 679, 659 N.W.2d 438 (transfer of ward's property to Medicaid payback trust).

Taxation

Columbus Park Housing Corp. v. City of Kenosha, 2003 WI 143, 267 Wis. 2d 59, 671 N.W.2d 633 (property leased to low-income persons not exempt from real estate taxes).

Administrative Law

Hutson v. State Personnel Comm'n, 2003 WI 97, 263 Wis. 2d 612, 665 N.W.2d 212 (construction of whistle-blower statute).

Criminal Law

State v. Williams, 2003 WI App 116, 265 Wis. 2d 229, 666 N.W.2d 58 (judge may not participate in plea bargaining).

State v. Picotte, 2003 WI 42, 261 Wis. 2d 249, 661 N.W.2d 381 (year-and-a-day rule for murder cases rejected).

State v. Lo, 2003 WI 107, 264 Wis. 2d 1, 665 N.W.2d 756 (retroactive application of new rule on collateral review).

State ex rel. Marberry v. Macht, 2003 WI 79, 262 Wis. 2d 720, 665 N.W.2d 155 (habeas corpus requirements applied to sex offenders).

State v. Church, 2003 WI 74, 262 Wis. 2d 678, 665 N.W.2d 141 (increased sentence after appeal rejected).

State v. Radke, 2003 WI 7, 259 Wis. 2d 13, 657 N.W.2d 66 (constitutionality of "two strikes" law for sex offenders, Wis. Stat. § 939.62(2m)(a)1m., upheld).

State v. Navarro, 2003 WI App 50, 260 Wis. 2d 861, 659 N.W.2d 487 (right of detained foreign national to consult with consular officials).

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