Case Raises Questions about Mandatory Court Rulings

By Attorney Gregg Herman
September 5, 2019
WI Supreme Court

Photo Credit: State Bar of Wisconsin

The Wisconsin Supreme Court does not accept many family-law cases (the last one, other than one regarding grandparent visitation, was McReath v. McReath, 2011 WI 66, 335 Wis.2d.643, 789 N.W. 89 eight years ago).

So it was surprising when the justices granted review of Pulkkila v. Pulkkila, 2018AP000712, in which the court of appeals reached a perfectly reasonable result which should not require any additional analysis.

The generic issue in Pulkkila is whether a court order means anything. The specific issue is whether a court is restricted in its choice of remedy when an order is violated.

In Pulkkila, the court ordered the parties (in keeping with an agreement made by the parties) to maintain life insurance and have their children be the “sole and irrevocable primary beneficiaries until the youngest minor child reaches the age of majority.” The husband’s policy had a death benefit of $250,000. The settlement agreement, incorporated into the court’s order, also provided that “(i)f either party fails for any reason to maintain any of the insurance required under this article, there shall be a valid and provable lien against his or her estate.”

After the divorce, James, contrary to the court order, changed the beneficiary designation on a life-insurance policy to his new wife. James died when his children were still minors and should have been beneficiaries. Their mother, Joan, filed a motion seeking to use a construction trust to enforce the insurance provision of the judgment of divorce; James’ estate only totaled $5,600 at the time of the hearing, meaning any lien against the estate would have been meaningless. The circuit court denied Joan’s motion, reasoning that to “get to” the question of a constructive trust, it had to find that the language of the MSA was ambiguous. The court acknowledged that it was a “rotten deal” for the children, but the remedy was a lien against the estate. Joan appealed and the court of appeals, sensibly, reversed.

The appellate court held that “the equities of this case mandate the creation of a constructive trust in favor of the children so as to accomplish the intent of the MSA. All of the requirements of a constructive trust have been satisfied…(W)e also conclude that the remedy provided in the MSA (a lien against the estate) is equally unjust and not a viable remedy as James failed to fund his estate in an amount sufficient to provide the equivalent support for his children.”

Judge (now Justice) Brian Hagedorn dissented, stating that the specification of a remedy distinguishes this case from others and that the specified remedy in this instance was exclusive, even if meaningless. Judge Hagedorn didn’t seem bothered by the fact that a court order was blatantly violated, preferring to blame the victim for the drafting of the MSA.

The majority holding is consistent with previous Wisconsin cases, Duhame v. Duhame, 154 Wis. 2d 258, 453 N.W.2d 149 (Ct. App. 1989), Richards v. Richards, 58 Wis. 2d at 298-99; Singer v. Jones, 173 Wis. 2d 191, 496 N.W.2d 156 (Ct. App. 1992); Pluemer v. Pluemer, 2009 WI App 170, 322 Wis. 2d 138, 776 N.W.2d 261. [Socha v. Socha, 204 Wis. 2d 474, 555 N.W.2d 152 (Ct. App. 1992) reached a different result because the parties were still married at the time of the husband’s death. This should not have made a difference, but in a bizarre decision, it did.]

So, one has to wonder why the Supreme Court would take an interest in this case? Is it because the remedy under the MSA could be interpreted as an exclusive one, as found by Judge Hagedorn? If so, the court would be missing the forest for the trees.

The forest is that there was a court order. It was not a court “invitation” for which people can RSVP if they intend to comply. It was an order. Compliance should not be an option – it should be mandatory. And if someone chooses not to comply, there should be consequences.

To be sure, our courts have winked in the past at someone’s ignoring a clear court order, most recently in Krause v. Krause, 2017 AP1434 (July 17, 2018)(citable for persuasive value only). Perhaps the court wishes to differentiate between an order and an invitation. If so, this would be as good a case as any to make that distinction.

Editor’s Note: This column was previously published in the Wisconsin Law Journal.

Attorney Gregg Herman is a founding partner of Loeb & Herman S.C. in Milwaukee, WI. He practices family law exclusively, and can be reached via e-mail or by calling (414) 272-5632.