State v. Paula L. Schwerdtfeger

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
August 26, 2020
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.

Appeal Nos. 2018AP1322-CR Cir. Ct. Nos. 2013CF62
2013CF63
2018AP1323-CR

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT II

NO. 2018AP1322-CR

STATE OF WISCONSIN,

PLAINTIFF-RESPONDENT,

V.

CHADWICK P. SCHWERDTFEGER,

DEFENDANT-APPELLANT.

NO. 2018AP1323-CR

STATE OF WISCONSIN,

PLAINTIFF-RESPONDENT,

V.

PAULA L. SCHWERDTFEGER,
Nos. 2018AP1322-CR
2018AP1323-CR

DEFENDANT-APPELLANT.

APPEALS from judgments and orders of the circuit court for
Walworth County: DAVID M. REDDY and KRISTINE E. DRETTWAN, Judges.
Affirmed.

Before Neubauer, C.J., Gundrum and Davis, JJ.

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).

¶1 PER CURIAM. Chadwick P. Schwerdtfeger and
Paula Schwerdtfeger, husband and wife, each appeal from a judgment of
conviction and order awarding restitution payments to the victims of their crimes
and from an order denying their postconviction motion for stay of restitution. The
Schwerdtfegers raise numerous challenges to the sufficiency of the evidence,
evidentiary rulings, and restitution. We reject each and affirm.

BACKGROUND

The Land Contract, Eviction, and Damages

¶2 Most of the material facts are not in dispute. Additional facts will be
provided as needed.

¶3 After residing in a Town of Whitewater property under a lease for a
year, the Schwerdtfegers agreed to buy the property, in December 2007, pursuant

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to a land contract from the vendors, GP and AP, for $350,400.1 The
Schwerdtfegers began making monthly payments on January 1, 2008. The
outstanding balance was due May 1, 2023. The land contract said nothing about
the personal property that the vendors left at the premises, such as a plasma TV, a
hot tub, an above-ground swimming pool, a pool table, and kitchen appliances.

¶4 About two years passed without incident. But, by late 2010, the
Schwerdtfegers had begun falling behind on payments. Consequently, in March
2011, the vendors commenced a foreclosure action, which immediately resulted in
a March 10, 2011 order enjoining the Schwerdtfegers from causing any damage to
any part of the property.2 Per the order, no person could remove or damage
“personal property left on the above-described real property by [vendors],” and it
specifically identified a few items, such as the TV and hot tub. It required that a
copy of the order “be served upon [the Schwerdtfegers] along with an
authenticated copy of the Summons and Complaint.” Per that action, on
September 22, 2011, the court concluded that the defendants were in default,

1
In accordance with WIS. STAT. RULE 809.86 (2017-18), we protect the privacy of crime
victims by avoiding use of their full names. We refer to the husband-owner of the property as AP
and the wife-owner as GP. We also sometimes refer to them more generically as the owners,
vendors, or victims.

Also, all references to the Wisconsin Statutes are to the 2017-18 version unless otherwise
noted.
2
The title of the order was fairly clear and explicit as to its contents:

ORDER DIRECTING DEFENDANTS NOT TO DAMAGE OR DESTROY THE
PROPERTY OR FIXTURES AND IMPROVEMENTS THEREON AND/OR REMOVE,
DAMAGE OR DISPOSE OF PERSONAL PROPERTY LEFT ON THE PREMISES BY
PLAINTIFFS

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entered a judgment of strict foreclosure, and reiterated its prior order that no
damage or waste should be committed on or to the property.

¶5 In April 2011, the vendors inspected the Whitewater property and
took photographs. GP reported that the property appeared undamaged.

¶6 An eviction order required the Schwerdtfegers to vacate by
December 6, 2011. On December 5, 2011, Deputy Jacob Skibba of the Walworth
County Sheriff’s Department went to the Whitewater property and spoke with the
vendors regarding the eviction order and claimed property losses.

¶7 In mid-December, the vendors provided the police a twelve-page
“inventory of the property damage and items missing.”3 As alleged by the

3
The vendors alleged the following items were missing (the following quotes have been
consolidated for ease of reading):

Foyer closet doors, shelves, screws, and brackets • A gas
fireplace • TV monitors and remotes from a security system •
The entrance storm door • 2 sets of pool balls, 8 pool cues, pool
table triangle, stained glass light above the pool table • A
surround-sound system with a set of speakers, a remote for the
system, a DVD player with remote, and a VCR • Inner
components from a plasma screen TV were removed, leaving the
“shell” of the TV • Landscaping/ paving bricks.

They also alleged the following items were damaged:

The kitchen counters had cut marks • The security devices in
several rooms room were torn off the windows, damaged, and
left on the floor • The carpet and padding in several rooms had
cigarette burns, food stains, and pet waste stains, requiring
replacement • The walls in the dining room had holes in them •
The walls in all rooms had scrapes, dents, and punctures • The
refrigerator water lines were cut • The pool table was missing a
pocket, there was a large “X” cut into the felt on top of the pool
table, and the perimeter of the pool table was slashed • There
was trash and spoiled food left throughout the house.

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vendors, missing items included a gas fireplace, TV monitors, a surround-sound
speaker system, and landscaping bricks. Damaged items included the kitchen
counters with cut marks, several security devices torn from windows, walls in
many of the rooms had holes, scrapes, and dents, and trash and spoiled food were
left throughout the house.

¶8 Police spoke with Chadwick, who admitted that he took the gas
fireplace, but noted that “there were five items on the list of property that [were]
supposed to stay at the house, and the fireplace was not one of them,” i.e., the
vendors received the five things that they said they wanted. He said that other
claimed damage was incidental, a result of being “messy.”

The Criminal Charges and Defenses

¶9 The State charged Chadwick with (1) theft of movable property over
$10,000, as a party to a crime and (2) felony criminal damage to property, as a
party to a crime (Walworth County case no. 2013CF62). The State charged Paula
with (1) theft of movable property over $10,000, as a party to a crime, (2) felony
criminal damage to property, as a party to a crime, and (3) criminal damage to
property (Walworth County case no. 2013CF63).

¶10 Paula pled no contest to count three, criminal damage to property,
and was convicted on that count. The other charges were dismissed. Chadwick
chose to go to trial.

¶11 During the pretrial conference, the defense argued that GP should
not be allowed to testify about the value of missing or damaged property because
she was not an expert. The court took an offer of proof from GP, who explained
that she was a co-owner of the Whitewater property, was present for inventories of

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the property in April and December 2011, was aware of items that were damaged,
and was aware of the costs associated with repairing or replacing those items. The
circuit court decided that, as an owner of the property and being familiar with it,
GP had a sufficient basis to provide a lay opinion as to value.

¶12 Chadwick’s primary defense was that he did not know that the
vendors were still claiming ownership of the property items and that they had
abandoned them. Because “intent” to steal someone else’s property is a required
element of the first two charges, he claimed he was innocent. He exercised his
right not to testify at the trial.

The Criminal Trial

¶13 The State showed that the victims had commenced a foreclosure
action and that action included a March 2011 order explicitly directing the
defendants not to damage the property, fixtures, or improvements, or remove or
damage the personal property left by the victims. The State also presented
testimony about the court’s October 14, 2011 foreclosure order, which
extinguished any alleged ownership interest that the Schwerdtfegers claimed in the
personal property and conveyed the Whitewater property (including personal
property) to the victims. The Schwerdtfegers received notice of the order.

¶14 According to GP, Chadwick wanted to modify the parties’ land
contract agreement so that “he didn’t pay any interest for 13 years.” The victims’
refusal eventually led to the foreclosure action and the court’s injunction, as
Chadwick had threatened to take the victims’ house apart “screw by screw.” GP
explained that Chadwick was “angry because we would not agree to his terms.”
She testified that he threatened to squat “in the house for two years” and told GP

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“to watch [her] back.” GP stated Chadwick said she “had no idea what [the
Schwerdtfegers] were capable of doing.”

¶15 Skibba testified that Chadwick said that the victims “had received
everything back that they were supposed to, including a TV, entertainment center,
and the like.” Detective Troy Pagenkopf also testified, indicating that Chadwick
admitted that he took the gas fireplace because it was not listed on the court’s
order. Pagenkopf opined that Chadwick was “upset over the whole situation.”

¶16 As for damages, GP testified to the following: gouges to the kitchen
countertop were not present in April 2011. The countertop needed to be replaced,
rather than repaired, because “[t]he cuts in it were deep ... [y]ou had to replace it.”
The cost was $2845. The refrigerator was damaged, where the “whole insides
were out,” and the “water lines were cut.” It was irreparable and had to be
replaced. There was damage to various security devices on the windows, with
“hookups” missing for some and security cameras gone. It would cost $2304.39
to replace the security system.4 The “brains” of the plasma TV were missing,
which she was unable to replace, requiring a new TV for $4000. Cuts to the felt
on the pool table that were not present in April cost $489.99 to repair. There was
new damage to the carpeting: it was “full of urine” with “lots of stains” and dried
vomit. The carpet in one room had “beer cans, burn holes, [and] different kinds of
trash” all over it, and it was “impossible to get clean.” Replacing the carpeting
cost $8142.75.

4
The system could not be repaired, she explained because the “original person” who
installed it no longer did such work, and she “couldn’t find the original parts ... to get it back up
and running like it” had been.

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¶17 GP testified that she did not give Chadwick permission to take or
damage any of the above items from the Whitewater property.

¶18 The jury convicted Chadwick on both counts.5 The circuit court
withheld sentence on both counts, imposed one year of probation on count one and
three years of probation on count two, with ninety days’ conditional jail time on
count two. The court ordered restitution of $75,867.77, noting that Chadwick
could request a hearing on the matter. The Schwerdtfegers requested a hearing.6

The Criminal Restitution Hearing

¶19 The case proceeded to a consolidated restitution hearing, with Court
Commissioner Gerad Dougvillo assigned to hear the matter and make proposed
findings and conclusions. The victims initially sought $106,590.96, including
attorneys’ fees. Farmers Insurance, which issued a policy taken out by the
defendants on the property, paid $75,867.77 to the victims for the damages they
incurred. Consequently, Farmers Insurance also claimed restitution.

¶20 For two days, the court commissioner took testimony from both AP
and GP, as well as Dale Dobbratz, a Farmers Insurance employee. “The court
found the testimony from all of the stated parties to be credible and reliable.”

5
During the jury instructions conference, the defense sought to exclude “the value
questions in both the substantive instructions of theft and criminal damage to property.” The
circuit court determined that felony theft required evidence of the market value of the property at
the time of the theft. Because the State conceded that there was no such evidence, the court
removed the value question on theft, effectively dropping the charge to a misdemeanor.
6
Following her no contest plea, Paula agreed to a joint restitution hearing before her
sentencing.

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¶21 The commissioner made the following findings of fact. AP
“testified at length regarding his involvement with the property in question and the
losses incurred by himself and his wife.” He also “presented a packet in excess of
500 pages detailing the damage done to the property, the costs involved in
repairing and replacing various items, photographs of the property and costs
related [to] legal fees and travel expenses.” AP “went through the entire packet
and was questioned for hours on the materials contained therein.”

¶22 In addition, AP “testified regarding the federal bankruptcy
proceedings initiated by the defendants” and the victims’ attempt to protect their
damage claims from being discharged. They did so by filing a complaint in
bankruptcy court and seeking a damage award of $147,320.56, plus punitive
damages and attorneys’ fees. The bankruptcy court conducted an adversary
proceeding. “Ultimately, the bankruptcy court did make an award in favor of the
[victims],” but for only $63,000 with no punitive damages or attorneys’ fees. AP
said that the victims have not recovered anything from the bankruptcy judgment.

¶23 GP testified that the victims worked with attorneys from
Brennan Steil S.C. “in order to assist in [the] civil action, the bankruptcy action
and the criminal matter.” She further testified to the “attorney billing statements”
which were submitted to the court, along with affidavits from the attorneys. The
attorneys’ fees ultimately claimed were “solely related to the criminal case and not
the civil matter or the bankruptcy proceedings.”

¶24 Dobbratz confirmed that Farmers Insurance paid $75,867.77 to the
victims, which was substantially lower than what the victims had claimed. This
discrepancy, Dobbratz explained, was a result of noncovered wear and tear
deductions that decreased the value of numerous items. He stated that the victims

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were considered innocent parties who had an interest in the policy, and the loss
was the direct result of the Schwerdtfegers’ criminal conduct.

¶25 The Schwerdtfegers did not testify or call any witnesses on their
behalf.

¶26 The court commissioner ordered posthearing briefing. Based on the
evidence, the victims adjusted their claim to $65,982.70. This amount included a
claim for attorneys’ fees of $19,257.98, an amount that had been reduced from an
original fee claim of $53,035.65. The victims provided the list of their damages
for the amounts they requested which were not covered by the insurance payment.

¶27 The Schwerdtfegers argued, among other things, that (1) a felony-
based restitution award should not be imposed against Paula, (2) restitution should
not be awarded to Farmers Insurance, (3) the victims’ attorneys’ fees were not
recoverable under the restitution statute, and (4) the doctrine of issue preclusion
limited the victims’ claim for damages to the amount determined by the
bankruptcy court.

¶28 The court commissioner issued detailed and thorough findings of
fact and conclusions of law, rejecting the Schwerdtfegers’ arguments against
restitution. The commissioner ordered restitution as requested: $65,982.70 to the
victims and $75.867.77 to Farmers Insurance. It further determined that the
Schwerdtfegers had the ability to the pay the restitution, jointly and severally. By
written order, the circuit court adopted the court commissioner’s findings of fact
and conclusions of law.

¶29 The Schwerdtfegers filed a postconviction motion. As to those
issues they now raise on appeal, they challenged the sufficiency of the evidence to

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support Chadwick’s convictions, the admissibility of GP’s testimony about the
value of the damaged property, and they revived their restitution arguments. After
a hearing, the circuit court denied the motion. The Schwerdtfegers appeal.

DISCUSSION

Sufficient Evidence Existed to Support Chadwick’s Convictions

¶30 Chadwick argues the evidence was not sufficient to show that he
intentionally stole someone else’s property.

¶31 Misdemeanor theft requires that Chadwick “[i]ntentionally [took]
and carrie[d] away … moveable property of another.” WIS. STAT. § 943.20(1)(a)
(emphasis added). “Intentionally” generally means that the defendant either had a
purpose to do the thing or cause the result. WIS. STAT. § 939.23(3). The State
must also prove that the defendant did not have the owner’s consent to take the
property and intended to deprive the owner of the property permanently.
Sec. 943.20(1)(a).

¶32 Felony criminal damage to property similarly requires that
Chadwick “intentionally cause[d] damage to any physical property of another,” he
knew the property belonged to another, and he knew that he did not have the
owner’s consent to cause the damage. Bere v. State, 76 Wis. 2d 514, 525, 251
N.W.2d 814 (1977); WIS. STAT. § 943.01(1). The State must also prove that the
property was reduced in value by $2500. Sec. 943.01(2)(d).

¶33 Chadwick asserts that the evidence established that he believed the
victims had abandoned any ownership interest in the personal property, thereby
negating any intent that he was stealing someone else’s property.

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¶34 Whether evidence adequately supports a conviction is a question of
law that we review de novo. See State v. Smith, 2012 WI 91, ¶24, 342 Wis. 2d
710, 817 N.W.2d 410. But during our review, we pay high deference to a jury’s
verdict, and we will not overturn a jury verdict unless the evidence, viewed most
favorably to upholding the conviction, “is so insufficient in probative value and
force that it can be said as a matter of law that no trier of fact, acting reasonably,
could have found guilt beyond a reasonable doubt.” State v. Beamon, 2013 WI
47, ¶21, 347 Wis. 2d 559, 830 N.W.2d 681 (citation omitted). A defendant bears a
heavy burden to demonstrate the evidence could not reasonably have supported a
finding of guilt. Id. Our review is narrow, as we realize that “a jury is better able
to get a sense of the trial’s flow and the witness’s credibility than is an appellate
court” reading the trial transcript. Estate of Kriefall v. Sizzler USA Franchise,
Inc., 2011 WI App 101, ¶56, 335 Wis. 2d 151, 801 N.W.2d 781, aff’d, 2012 WI
70, 342 Wis. 2d 29, 816 N.W.2d 853. The special deference we accord a jury
verdict (a verdict approved by the circuit court) means that “the verdict may not be
overturned unless there is such a complete failure of proof that the verdict must be
based on speculation.” Estate of Kriefall, 335 Wis. 2d 151, ¶56 (citation omitted).

¶35 We reject Chadwick’s argument, as it simply boils down to his
disagreement with the jury’s view of the evidence, a view that we find supported
and reasonable. Actually, Chadwick frames the issue correctly, but he comes out
on the losing side. In this regard, he points out that the circuit court noted that
“there was evidence in the record that might support a claim of abandonment,” but
that the court also concluded that “there’s also sufficient evidence to the contrary.”
When a circuit court finds that sufficient evidence supports both sides, it makes
Chadwick’s already heavy burden nearly insurmountable. Stated another way, if
just one reasonable view of the evidence supports the conviction, it does not

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matter that another reasonable view of the evidence supports reversal. See State v.
Poellinger, 153 Wis. 2d 493, 506-07, 451 N.W.2d 752 (1990).

¶36 Sufficient evidence supports the convictions. The evidence shows
not only that the victims had retained an ownership interest in the Whitewater
property, including any personal property that existed, it also shows that Chadwick
knew they retained such an interest.

¶37 In March 2011, the court enjoined the Schwerdtfegers from
“committing waste upon or doing any damage to” the property or “removing,
damaging or disposing of personal property” that the victims left behind; in
September, the court issued a foreclosure order, which again referred to the
personal property left behind by the victims and referring to the order that the
property must remain undamaged and intact; in October, the court issued a
conveyance order stating that any alleged interest claimed by the Schwerdtfegers
in the personal property was extinguished and full ownership interest of the
personal property was conveyed to the victims. These court orders gave official
and direct notice to the Schwerdtfegers that the victims still claimed an interest, if
not a full interest, in the personal property. They readily support the verdict.7

¶38 Chadwick fails to acknowledge, much less rebut, the above or other
evidence showing the victims’ ownership of the personal property. Instead, he
asserts that the land contract is a “major piece of evidence” demonstrating that he

7
We will not recount all of the evidence indicating Chadwick knew that the victims
retained an ownership interest in the personal property, but we note that there was ample
additional evidence, e.g., Chadwick threatening that he would take the victims’ home apart
“screw by screw.”

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did not intend to steal the victims’ personal property. Because the contract does
not refer to the personal property and makes the real property the only subject of
the deal, then it “neither conferred nor retained an ownership interest” in the
personal property for the victims. Apparently, the jury was unpersuaded that the
land contract established abandonment, and it certainly is not grounds to reverse
its verdict.

¶39 In a land contract, silence about ownership in personal property is
not necessarily surprising (it is a “land” contract) and, more importantly here, it
does not support the proposition that the victims abandoned or somehow
relinquished their ownership in the personal property. The absence of a provision
about personal property in the land contract is, in this case, simply an absence of
evidence, arguably, either way. See Westmas v. Creekside Tree Serv., Inc., 2018
WI 12, ¶71, 379 Wis. 2d 471, 907 N.W.2d 68 (Bradley, R., J., dissenting) (“Under
the best of circumstances, it’s really difficult to tease meaning out of silence.”).8

¶40 Additionally, in support of his argument that he believed the
property was his and therefore he was not guilty of stealing it, Chadwick points to
the testimony of Pagenkopf as to what Chadwick had earlier reported to him,
including that he believed that he was the owner of the missing and damaged
property. Chadwick points to evidence indicating that damage and missing
property took place before the April 2011 court orders. As with all of the

8
A case cited by Chadwick in support of his abandonment theory, see Voss v.
Ruppenthal, No. 1992AP0838, unpublished slip op. (WI App Mar. 3, 1993), is unpublished and,
per WIS. STAT. RULE 809.23(3)(a) and (b), may not be cited as precedent or authority.

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testimony, it was for the jury, which heard the testimony and saw the witnesses, to
weigh and consider the evidence. Looking at all of the evidence as a reviewing
court, we certainly cannot say that no jury could rationally reach this verdict.

The Circuit Court Did Not Err in Admitting GP’s Lay Opinions About
Repair, Replacement, and Value of the Personal Property Damaged by
Chadwick

¶41 Chadwick argues that the circuit court erred when it allowed GP to
offer her lay opinions regarding whether personal property items needed repair or
replacement and regarding the values of the damaged property. He asserts the
State failed to show that she was qualified and had the necessary foundation to
testify on this issue.

¶42 Specifically, he notes that, after testifying on a number of damaged
or missing items, GP admitted that she only had receipts as to some items and
merely estimated as to others (such as the security system and pool table light).
GP also acknowledged that she had never performed property valuations, had not
occupied the property since 2005, had no knowledge of when items were
purchased prior to 2006, and had only purchased some, but not all, of the items for
which she had collected receipts.

¶43 “We will uphold a circuit court’s evidentiary ruling if it ‘examined
the relevant facts, applied a proper standard of law, used a demonstrated rational
process and reached a conclusion that a reasonable judge could reach.’” State v.
Marinez, 2011 WI 12, ¶17, 331 Wis. 2d 568, 797 N.W.2d 399 (citation omitted).
On appeal, the issue “is not whether this court, ruling initially on the admissibility
of the evidence, would have permitted it to come in, but whether the trial court
exercised its discretion in accordance with accepted legal standards and in

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accordance with the facts of record.” State v. Echols, 2013 WI App 58, ¶14, 348
Wis. 2d 81, 831 N.W.2d 768 (citation omitted). We will not find discretionary
error if there is a reasonable basis for the court’s determination. See State v.
Johnson, 149 Wis. 2d 418, 429, 439 N.W.2d 122 (1989), aff’d on reh’g, 153
Wis. 2d 121, 449 N.W.2d 845 (1990).

¶44 WISCONSIN STAT. § 907.01 governs “[o]pinion testimony by lay
witnesses.” It provides as follows:

If the witness is not testifying as an expert, the witness’s
testimony in the form of opinions or inferences is limited to
those opinions or inferences which are all of the following:

(1) Rationally based on the perception of the witness.

(2) Helpful to a clear understanding of the witness’s
testimony or the determination of a fact in issue.

(3) Not based on scientific, technical, or other
specialized knowledge within the scope of a witness under
[WIS. STAT. §] 907.02(1).

Sec. 907.01(1)-(3). Chadwick primarily argues that subsec. (1) was not met, i.e.,
GP’s lay opinions were not, he argues, rationally based on her perceptions. We
disagree.

¶45 “Lay opinion evidence is generally permitted when such opinion is
based on matters about which the witness is actually competent to testify ....”
Poston v. Burns, 2010 WI App 73, ¶22, 325 Wis. 2d 404, 784 N.W.2d 717. This
includes “personal observations by the lay witness” and her “personal experience.”
Id. In general, a nonexpert owner may testify as to the value of their property,
whether it is real estate or personal property. Mueller v. Harry Kaufmann
Motorcars, Inc., 2015 WI App 8, ¶35, 359 Wis. 2d 597, 859 N.W.2d 451. The
weight accorded such testimony is for the trier of fact. Id.

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¶46 Here, GP testified, among other things, that she was the owner of the
kitchen countertop, refrigerator, home security system, plasma TV, and carpeting
at the Whitewater residence. She also personally observed the damage to these
items. For the kitchen countertop, refrigerator, and carpeting, GP’s observations
of and personal familiarity with that property helped to form the basis for her
conclusion that the items were beyond repair. For the home security system and
the plasma TV, GP explained her experience in trying to repair the damage.

¶47 On this record, we cannot conclude that the circuit court erroneously
exercised its discretion in determining that GP was qualified to offer her lay
opinions as to whether an item should be repaired or replaced or estimating the
value of a particular piece of property. GP’s personal knowledge and perceptions
of the various items were based on her ownership of the items, on her having
personally purchased a number of them, on her having personally observed the
damage, on her research and attempts to repair certain items and their cost, and her
reliance on several invoices. This is personal knowledge of a consumer and owner
of the subject property. Chadwick fails to explain with any specificity why the
court erred given GP’s experience and knowledge.

¶48 A noted legal commentator points out that subsec. (1) “simply
reiterates the first-hand knowledge requirement of [WIS. STAT.] § 906.02.”
Daniel D. Blinka, WISCONSIN PRACTICE SERIES: WISCONSIN EVIDENCE, § 701.1
(4th ed. 2019). We acquire first-hand knowledge, and form lay opinions from it,
via our five senses, but also through our collective experiences. Id. Not only did
GP have particular knowledge with respect to many of these items and performed
some specific investigation, she has also been a common consumer for many
years, learning about purchases, pricing, repairs, and the like.

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¶49 To the extent GP’s knowledge or testimony contained gaps or
weaknesses, it then was for Chadwick to challenge it in court and for the jury to
consider and weigh it, rather than excluding the evidence altogether. “Juries are
unlikely to give much weight to a witness’s unsupported opinion or conclusion.
The proponent, then, is normally motivated to have the witness explain his or her
generalizations and testify about the firsthand observations that buttress them.”
Id. GP’s lay opinions could be, and were, challenged on cross-examination and
critiqued during closing remarks. This of course included challenges to her
opinions or inferences on the value of property or its related damage. But, as the
court correctly ruled, GP may testify in the first instance. It is then for the jury to
assess her credibility and determine the weight to accord her testimony. Here, the
jury found that the value of the damaged property exceeded $2500.9

9
Chadwick raises for the first time in his reply brief an argument that the receipts
submitted by GP establishing repair estimates were inadmissible hearsay. We will not, as a
general rule, consider arguments raised for the first time in a reply brief, and we see no reason to
depart from that rule in this case. See Schaeffer v. State Pers. Comm’n, 150 Wis. 2d 132, 144,
441 N.W.2d 292 (Ct. App. 1989). Chadwick fails to identify any objection on this basis in the
record before the circuit court. It is a fundamental principle of appellate review that issues must
be preserved in the circuit court. State v. Huebner, 2000 WI 59, ¶10, 235 Wis. 2d 486, 611
N.W.2d 727. Evidentiary issues that are not preserved in the circuit court generally will not be
considered on appeal. Id. The party who raises an issue on appeal bears the burden of showing
that the issue was raised before the circuit court. Id. This is not a mere rule of convenience: it is
essential to the orderly administration of justice, as it promotes efficiency and justice by giving
the parties and the trial court notice, allowing the court to correct or avoid the alleged error,
encouraging the attorneys to prepare diligently and it avoids sandbagging by failing to object and
later claiming error, all to the end of eliminating the need for appeal. Id., ¶¶11-12. Moreover,
Chadwick does not identify which receipts are at issue, or ultimately develop any argument that
the established damage amounted to less than $2500. As to the restitution hearing, Chadwick’s
argument suffers from the same deficits, in addition to failing to address this issue in the context
of the more relaxed evidentiary rules in that proceeding, as noted below. See infra ¶94.

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The Circuit Court Did Not Err by Ordering Restitution to Farmers
Insurance

¶50 The Schwerdtfegers argue that the circuit court erred by ordering
restitution to Farmers Insurance because WIS. STAT. § 973.20(5)(d) only
authorizes reimbursement to the insurer “if justice so requires,” and the
commissioner did not make such a finding, such that the court’s order adopting the
court commissioner’s findings was unauthorized. We disagree.

¶51 “A request for restitution, including the calculation as to the
appropriate amount of restitution, is addressed to the circuit court’s discretion and
its decision will only be disturbed when there has been an erroneous exercise of
that discretion.” State v. Gibson, 2012 WI App 103, ¶8, 344 Wis. 2d 220, 822
N.W.2d 500. Whether the court, however, has the statutory authority to order
restitution is a question of law, and our review is de novo. Id. Because the
purpose of the restitution statute is to provide compensation for damages caused
by criminal conduct, the statute should be interpreted broadly and liberally. Id.,
¶10.

¶52 Whereas the restitution statute requires the court to order restitution
(“shall order”) to compensate the victims of a crime, see WIS. STAT. § 973.20(1r),
it is in the court’s discretion (“may require”) as to whether to order reimbursement
to an insurer, see § 973.20(5)(d). Specifically, for insurers, the statute states: “In
any case, the restitution order may require that the defendant do one or more of the
following: … If justice so requires, reimburse any insurer, surety or other person
who has compensated a victim for a loss otherwise compensable under this
section.” Id. (emphasis added).

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Nos. 2018AP1322-CR
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¶53 The Schwerdtfegers complain that the court commissioner did not
state that “justice” required reimbursement for Farmers Insurance, contend that the
court lacked authority to order restitution, and assert it erroneously exercised its
discretion in doing so.

¶54 We reject the Schwerdtfegers’ contention that the reimbursement
order is flawed because the court commissioner did not explicitly state that justice
required the reimbursement. Simply because a court does not use particular
“magic words” within its decision or reasoning does not constitute reversible error.
See State ex rel. West v. Bartow, 2002 WI App 42, ¶¶9-10, 250 Wis. 2d 740, 642
N.W.2d 233; Michael A.P. v. Solsrud, 178 Wis. 2d 137, 151, 502 N.W.2d 918
(Ct. App. 1993).

¶55 Here, the commissioner found that Dobbratz’s testimony regarding
Farmers Insurance’s payment was credible and reliable. Indeed, the
Schwerdtfegers raise no dispute regarding the specific components of that
payment. It is implicit in the commissioner’s statement that Farmer’s loss “was a
direct result from the defendant’s [criminal] conduct.” It is no stretch for one to
reasonably infer that the commissioner concluded that “justice” required
reimbursement of Farmer Insurance’s loss due to the Schwerdtfegers’ criminal
conduct and their ability to pay. See State v. Gary M.B., 2004 WI 33, ¶26, 270
Wis. 2d 62, 676 N.W.2d 475 (recognizing that “magic words” are not required, a
circuit court’s decision can be affirmed as long as the record indicates that the
appropriate considerations are implicit in the court’s determination); see West, 250
Wis. 2d 740, ¶10 (although circuit court did not refer to relevant statute, its
reasoning showed that it considered the standard and properly exercised its
discretion). Remanding this case to allow the circuit court to make explicit this

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implicit finding “would be both superfluous and a waste of judicial resources.”
See State v. Denny, 2017 WI 17, ¶81 n.23, 373 Wis. 2d 390, 891 N.W.2d 144
(quoting Englewood Cmty. Apartments Ltd. P’ship v. Alexander Grant & Co.,
119 Wis. 2d 34, 39 n.3, 349 N.W.2d 716 (Ct. App. 1984)).

¶56 Other cases support our conclusion. See, e.g., State v. Fernandez,
2009 WI 29, ¶¶61-62, 316 Wis. 2d 598, 764 N.W.2d 509 (reimbursement award to
the insurers would not be reversed; the court has discretion to make the award,
evidence was submitted that the insurers suffered losses due to the defendant’s
conduct, and the defendant appeared to be able to pay); Gibson, 344 Wis. 2d 220,
¶15 (reimbursement award to insurer upheld despite circuit court’s failure to
expressly address the “justice” requirement; the court has wide discretion, the
evidence was sufficient to show the insurer’s loss, and the court’s determination
that justice required reimbursement was implicit in its determination).

¶57 The Schwerdtfegers attempt to distinguish the above cases on the
ground that they only deal with reimbursement of insurers of crime victims, not
insurers of criminal defendants. We fail to follow. The payments made by
Farmers Insurance went to the crime victims here, not to the criminal defendants,
the Schwerdtfegers. Further, they have not shown why it is relevant that they
requested and paid for the policy. A standard property policy pays the damage
amounts to the owners of the damaged property, whether or not that is the same
person or entity who took out the policy.

¶58 The Schwerdtfegers also point out that the restitution statute only
allows payment of “special damages” and not “general damages.” WIS. STAT.
§ 973.20(5)(a). They argue that the payments made by Farmers Insurance were
for general and not special damages, thereby prohibiting reimbursement of

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Farmers Insurance. We reject the argument as undeveloped. See State v. Culver,
2018 WI App 55, ¶27 n.15, 384 Wis. 2d 222, 918 N.W.2d 103 (we need not
address undeveloped arguments). The Schwerdtfegers do not identify any
objection presented to the court commissioner on this ground. State v. Huebner,
2000 WI 59, ¶10, 235 Wis. 2d 486, 611 N.W.2d 727 (issues that are not preserved
at the circuit court generally will not be considered on appeal). On appeal, they
fail to explain the differences between general and special damages or analyze
how the insurance payments were solely for general damages.

¶59 We nonetheless note that the Schwerdtfegers have failed to establish
that the insurance payments were for special and not general damages. “General
damages under the criminal restitution statute are those that ‘compensate the
victim for damages such as pain and suffering, anguish or humiliation,’ damages
crime victims often experience. In contrast, special damages as used in the
criminal restitution context encompass ‘harm of a more material or pecuniary
nature’ and represent the victim’s actual pecuniary losses.” State v. Holmgren,
229 Wis. 2d 358, 365, 599 N.W.2d 876 (Ct. App. 1999) (citations omitted). If an
expenditure is readily ascertainable and paid out because of the crime, it is
appropriate as special damages. Id. Because the Schwerdtfegers have not
identified any insurance payments that went for such damages as pain and
suffering and humiliation, this challenge is rejected.

We Have No Basis to Deny the Victims’ Attorneys’ Fees Recovered Under
WIS. STAT. § 973.20(5)(b) as the Schwerdtfegers Fail to Identify Any
Particular Fee That Was Inappropriate

¶60 Included within the $65,982.70 portion of the restitution award were
the victims’ attorneys’ fees. The Schwerdtfegers appear to acknowledge that fees
could in theory be recoverable, but the fees must be directly tied to a pending

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criminal matter. Because some of the claimed fees were incurred, the
Schwerdtfegers assert, before the criminal matter began, the entire fee award
should have been denied.

¶61 As noted, we examine an award of restitution for an erroneous
exercise of discretion, but whether the court had authority to make the particular
restitution award under certain facts is a question of law that we examine
independently. See Gibson, 344 Wis. 2d 220, ¶9.

¶62 WISCONSIN STAT. § 973.20(5)(b) states:

In any case, the restitution order may require that the
defendant do one or more of the following:

….

(b) Pay an amount equal to the income lost, and
reasonable out-of-pocket expenses incurred, by the person
against whom a crime considered at sentencing was
committed resulting from the filing of charges or
cooperating in the investigation and prosecution of the
crime.

¶63 The statute is clear: restitution is available for expenses resulting
“from the filing of charges or cooperating in the investigation and prosecution of
the crime.” WIS. STAT. §973.20(5)(b). Fees incurred by the victim in the
investigation of a possible crime takes place before charges are pending.10

¶64 The victims were aware that only fees incurred under WIS. STAT.
§ 973.20(5)(b) would be allowed, and explained so in their briefing, even
admitting that they had to reduce their initial claim of fees in order to be in

10
The Schwerdtfegers largely base their argument on an unpublished per curiam case,
which under WIS. STAT. RULE § 809.23(3)(b), and as indicated in footnote 8, may not be cited

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Nos. 2018AP1322-CR
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accordance with the statute (in their initial brief, they noted one section of
damages “must also be modified downward due to the appropriate amount of
attorney fees owed”). The commissioner took note of that reduction, after
explaining its understanding of fees recoverable under the statute, and then
provided its conclusion:

In regards to the testimony and evidence put forward
during the restitution hearing, both [GP and AP] testified in
regards to the hiring of counsel to aid in all of the matters
tied to the property and the defendants along with the costs
associated. Those costs were included in the voluminous
packet testified to by [AP] as well as the affidavits
submitted by private counsel. The Court notes the original
claim for attorneys fees included all of the work done for
[GP and AP] but was since limited to the work done as it
solely relates to the criminal cases. The Court will not fault
the victims here for properly amending their claim despite
the defendants’ wishes. The Court believes that sufficient
evidence was submitted in relation to these fees and given
the exceptionally complex nature of this criminal case, the
fees requested are reasonable under Wis. Stat.
§ 973.20(5)(b).

Thus, the commissioner, after reviewing the voluminous documents and hearing
the testimony, which he noted was credible and reliable, determined that the
submitted fees were “solely relate[d] to the criminal cases.”11 The circuit court
adopted these findings and conclusions.

¶65 The Schwerdtfegers have failed to identify any fees that were not
related to the investigation of the charges. Based on the foregoing, we conclude
that the commissioner and court were statutorily authorized to make this award of

11
The commissioner also noted that the fees were only related to the criminal matter in
its Findings of Fact: “As noted on the affidavits and by way of clarification from [one of the
victims’ attorneys], the amounts now being claimed are limited to those solely related to the
criminal case and not the civil matter or the bankruptcy proceedings.”

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Nos. 2018AP1322-CR
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attorneys’ fees and properly exercised their discretion by considering the facts of
record, applying the correct standard of law, and reaching a rational result.

The Circuit Court Did Not Err in Ordering that Paula Pay Restitution

¶66 Paula Schwerdtfeger argues that the restitution order is without basis
as to her because there is no evidence that showed she intentionally damaged
another’s property or was otherwise a precipitating cause of such damage. We
disagree.

¶67 We first repeat a few fundamental principles. Restitution’s primary
goal is to compensate the victim. Gibson, 344 Wis. 2d 220, ¶10. Unless the court
finds a substantial reason not to do so, ordering restitution is presumed, as it
“reflects a strong equitable public policy that victims should not have to bear the
burden of losses if the defendant is capable of making restitution.” Id. (citation
omitted); State v. Kennedy, 190 Wis. 2d 252, 258, 528 N.W.2d 9 (Ct. App. 1994).
We bear in mind that the statute should be interpreted liberally and broadly. See
Gibson, 344 Wis. 2d 220, ¶10.

¶68 Before ordering restitution, a court must find a “causal nexus”
between the “crime considered at sentencing” and the victim’s alleged damage.
State v. Queever, 2016 WI App 87, ¶11, 372 Wis. 2d 388, 887 N.W.2d 912
(citation omitted). The circuit court has discretion when deciding whether the
defendant’s criminal conduct was a substantial factor in causing any claimed
expenses. Id., ¶12. When determining restitution, all of the conduct related to the
commission of the crime may be considered. State v. Rodriguez, 205 Wis. 2d
620, 627-29, 556 N.W.2d 140 (Ct. App. 1996). As another court put it, “a causal
link for restitution purposes is established when ‘the defendant’s criminal act set

25
Nos. 2018AP1322-CR
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into motion events that resulted in the damage or injury.’” State v. Longmire,
2004 WI App 90, ¶13, 272 Wis. 2d 759, 681 N.W.2d 534 (citation omitted).
Restitution includes “all facts and reasonable inferences concerning the
defendant’s activity related to the ‘crime’ for which the defendant was convicted,
not just those facts necessary to support the elements of the specific charge.”
State v. Canady, 2000 WI App 87, ¶10, 234 Wis. 2d 261, 610 N.W.2d 147
(citation omitted).

¶69 At her plea hearing, Paula stated that she understood the elements of
the crime, which included that she caused damage to physical property of another
and that she intended to do so. Her attorney stipulated that the facts set forth in the
criminal complaint established a factual basis for her plea to criminal damage to
property. Those are the same facts set forth in the criminal complaint against
Chadwick. Those facts, and the reasonable inferences that can be made from
them, support the court’s conclusion that Paula’s criminal conduct was a
substantial factor in causing the victims’ losses.

¶70 Specifically, the complaint alleges that between the court’s
injunction order and the Schwerdtfegers moving out of the Whitewater property,
numerous items of personal property were missing and many others were
damaged. It alleges that Chadwick talked with the police about the dispute with
the victims, about various items of property that were allegedly missing or
damaged, and that his wife, Paula, “was familiar with all items [Chadwick]
discussed with [police] because Paula Schwerdtfeger lived at the home with
[Chadwick] for 6 years.” The commissioner made findings of fact of Paula’s no
contest plea to criminal damage to property and her stipulation that the
complaint’s alleged facts could be used as a basis for her plea.

26
Nos. 2018AP1322-CR
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¶71 Paula contends that “there is absolutely nothing in that complaint
that describes an ‘activity,’ or a ‘conduct,’ or an ‘act,’ or an ‘entire course of
conduct’ that was any kind of factor” that could cause any of the claimed
expenses. We disagree. The complaint describes enough information to allow the
circuit court to conclude that Paula’s course of conduct, along with Chadwick, was
a substantial factor in causing the claimed losses. A property dispute with the
owners arose and, upon the eviction, property items were missing, property items
were damaged, and Paula and Chadwick were the only residents at the premises
for the prior six years. Her claim that “nothing” in the complaint supports her
involvement in causing the damage is not well-founded.

¶72 Paula also makes a somewhat confused argument based on her no
contest plea being insufficient to support the restitution order. When a defendant
pleads no contest, the plea admits his or her past criminal conduct, relieving the
State’s burden to prove all of the elements of the crime and allows entry of a
criminal judgment conviction without a trial. See Rodriguez, 205 Wis. 2d at 628.
It is an admission that the totality of her criminal conduct caused property damage
to the victims. See id. To the extent we understand her argument, we believe the
above answers and rejects it.

Neither Claim Nor Issue Preclusion Bars or Otherwise Affects the Criminal
Restitution Order

¶73 The Schwerdtfegers assert that the entire restitution judgment of
$141,850.47 is barred by claim and/or issue preclusion, as the victims had already
prosecuted and secured their property damage claim in bankruptcy court, which
determined a total recovery of $63,000. They contend that AP’s and GP’s
recovery is limited to the $63,000 bankruptcy court judgment amount, and because

27
Nos. 2018AP1322-CR
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the Farmers Insurance payment was for a greater amount, their restitution
obligation will be satisfied. We reject the Schwerdtfegers’ claim and issue
preclusion arguments.

No Accord and Satisfaction Has Been Shown

¶74 First, we note that it appears that the Schwerdtfegers’ primary
concern is that they will be compelled to make a double payment—that the
damages awarded by the restitution order will provide GP and AP with a double
recovery. However, they fail to address the issue of a double recovery directly
under the restitution statute and applicable case law.

¶75 As our supreme court explained in Huml v. Vlazny, 2006 WI 87,
¶22, 293 Wis. 2d 169, 716 N.W.2d 807, “An overview of [WIS. STAT.] §§ 973.09
and 973.20 reveals that a fundamental policy of these statutes is to make victims
whole without allowing them to receive double recoveries.” To this end, the
statutes afford three opportunities to avoid double recovery. First, a defendant
may assert any defense to the amount, including accord and satisfaction or setoff,
in the sentencing hearing at which the circuit court determines whether to impose
restitution. Sec. 973.20(14)(b); State v. Muth, 2020 WI 65, ¶19, 392 Wis. 2d 578,
945 N.W.2d 645 (in order that a victim may be made whole but not receive double
recoveries, a defendant may assert a defense of accord and satisfaction in the
sentencing hearing); State v. Sweat, 208 Wis. 2d 409, 424, 561 N.W.2d 695
(1997).

¶76 Second, before a circuit court reduces any unpaid restitution to a
civil judgment upon termination of probation, the probationer may prove that the

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Nos. 2018AP1322-CR
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victim “has already recovered a judgment against the probationer for the damages
covered by the restitution order.” WIS. STAT. § 973.09(3)(b).12

¶77 Third, in a civil action a defendant may prove that restitution
payments set off part or all of a civil judgment in favor of the victim. WIS. STAT.
§ 973.20(8); Herr v. Lanaghan, 2006 WI App 29, ¶18, 289 Wis. 2d 440, 710
N.W.2d 496 (Ct. App. 2006) (a civil judgment may be reopened where restitution
in a criminal case is ordered subsequent to the civil judgment in order to determine
whether damages awarded and covered by the civil judgment were, wholly or
partially, the same special damages covered by the criminal restitution order).

¶78 Here, as the court commissioner noted, the State conceded that
payments received under a separate proceeding or order can offset the amount
ultimately collected through a restitution order, however, that was not applicable
because “no monies have been received to date.” See WIS. STAT. § 973.20(8)
(“Any restitution made by payment or community service shall be set off against
any judgment in favor of the victim in a civil action arising out of the facts or
events which were the basis for restitution.”). Having paid nothing, it is not
surprising that the Schwerdtfegers did not avail themselves of a claim of accord
and satisfaction.

¶79 Thus, instead of directly addressing the concern with a double
recovery, the Schwerdtfegers try to fit a round peg into a square hole with their
claim and issue preclusion arguments, arguing that the entire and much larger

12
See also Huml v. Vlazny, 2006 WI 87, ¶32, 293 Wis. 2d 169, 716 N.W.2d 807 (citing
Legislative Reference Bureau Drafting File for 1989 Wis. Act 188, Analysis by the Legislative
Reference Bureau of 1989 A.B. 316: “[R]estitution unpaid at the end of a probation or parole
period is docketed as a civil judgment if the victim has not already obtained a judgment for the
damages covered by the restitution order.”).

29
Nos. 2018AP1322-CR
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restitution award is barred. In doing so, they wholly ignore that the vendors and
the insurer suffered different losses. None persuade.

¶80 First, a plurality of our supreme court has made clear that restitution
is a “not a cause of action but a sanction for criminal conduct owned by the State;
as such, victims cannot unilaterally terminate the State’s interest in making them
whole, rehabilitating the offender and deterring criminal conduct.” Muth, 392
Wis. 2d 578, ¶2. As noted, while defenses addressing the amount owing are
available under WIS. STAT. § 973.20(14)(b), defenses that could be raised in civil
actions challenging liability are not. Muth, 392 Wis. 2d 578, ¶23-24 (“any
defense … means any defenses as to the amount of restitution, and not defenses to
liability for restitutionary payments”); State v. Walters, 224 Wis. 2d 897, 904-05,
591 N.W.2d 874 (Ct. App. 1999) (because restitution is a remedy that belongs to
the State, civil defenses which could be used as a complete bar to a subsequent
civil action do not preclude a restitution order in a criminal proceeding). Thus,
accord and satisfaction is available but not claim or issue preclusion—doctrines
that bar liability as to claims or certain issues. A cursory review of these doctrines
and the restitution statute provide additional bases as to why this is so.

Claim Preclusion Does Not Apply

¶81 Under claim preclusion, “a final judgment is conclusive in all
subsequent actions between the same parties [or their privies] as to all matters
which were litigated or which might have been litigated in the former
proceedings.” See Northern States Power Co. v. Bugher, 189 Wis. 2d 541, 550,
525 N.W.2d 723 (1995) (alteration in original; citation omitted). Whether claim
preclusion applies to a specific set of facts is a question of law that we review de

30
Nos. 2018AP1322-CR
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novo. See DePratt v. West Bend Mut. Ins. Co., 113 Wis. 2d 306, 310, 334
N.W.2d 883 (1983).

¶82 In order for the earlier proceedings to bar the claim of the present
suit, there must be: “(1) an identity between the parties or their privies in the prior
and present suits; (2) an identity between the causes of action in the two suits; and,
(3) a final judgment on the merits in a court of competent jurisdiction.” Northern
States, 189 Wis. 2d at 551.

¶83 We first note that the claim preclusion argument advanced by the
Schwerdtfegers is markedly lacking and ultimately undeveloped. See Culver, 384
Wis. 2d 222, ¶27 n.15. They mention the above requirements, but never actually
apply the facts of this case to any of the three.13

¶84 That said, among other things, the Schwerdtfegers have failed to
show identity of parties, given that neither the State nor Farmers Insurance
participated. They have not developed any argument to address Farmers
Insurance’s absence. As to the State, as noted above, “restitution in a criminal
case is a remedy that belongs to the state, not to the victim.” Muth, 392 Wis. 2d
578, ¶21 (citing Huml, 293 Wis. 2d 169, ¶44.) The Schwerdtfegers have not
shown that the victims effectively represented, and protected, the interests of
Farmers Insurance and the State in the bankruptcy proceeding. Pasko v. City of
Milwaukee, 2002 WI 33, ¶16, 252 Wis. 2d 1, 643 N.W.2d 72 (“Privity exists
when a person is so identified in interest with a party to former litigation that he or

13
We agree with the State that claim preclusion was insufficiently raised below, with
scant mention and no development to speak of.

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Nos. 2018AP1322-CR
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she represents precisely the same legal right in respect to the subject matter
involved.”).

¶85 Moreover, and as obvious, there is no identity between the causes of
action in the two proceedings or even a common nucleus of operative facts. See
Kruckenburg v. Harvey, 2005 WI 43, ¶25-26, 279 Wis. 2d 520, 694 N.W.2d 879.

¶86 When the bankruptcy proceeding took place, no criminal case was
pending. The State had no opportunity to litigate its interests. As to the victims,
additional information was gathered through discovery, which took place before
the restitution hearing. Farmers Insurance’s claim did not accrue until after the
bankruptcy proceeding, foreclosing the insurer’s opportunity to litigate the matter.
Clearly, GP and AP did not and could not present the entire controversy at issue in
the restitution hearing when they proceeded in the bankruptcy court. See Lindas
v. Cady, 183 Wis. 2d 547, 558-59, 515 N.W.2d 458 (1994) (claim preclusion
extends to all claims that could have been asserted in the previous litigation).

¶87 The claim preclusion argument is rejected on the merits.

Issue Preclusion Does Not Apply

¶88 Issue preclusion involves whether a particular issue of law or fact
has been squarely decided such that the issue cannot be relitigated in a subsequent
action. See Mrozek v. Intra Fin. Corp., 2005 WI 73, ¶17, 281 Wis. 2d 448, 699
N.W.2d 54. The question of law or fact sought to be precluded must have been
actually litigated in a previous action and must have been necessary to the
judgment. Id. Overall, it is “a [legal] doctrine designed to limit the relitigation of
issues that have been contested in a previous action between the same or different
parties.” Michelle T. v. Crozier, 173 Wis. 2d 681, 687, 495 N.W.2d 327 (1993).

32
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¶89 After deciding that an issue has been litigated and was necessary to
the judgment, the circuit court must then consider fairness, determining whether it
is fundamentally fair to prohibit more litigation over the issue given the
circumstances of the particular case. See Mrozek, 281 Wis. 2d 448, ¶17. No one
single fairness factor controls, and the weight to be accorded any factor is within
the discretion of the circuit court. See State v. Hirsch, 2014 WI App 39, ¶14, 353
Wis. 2d 453, 847 N.W.2d 192. We review a circuit court’s decision on issue
preclusion for an erroneous exercise of discretion. Id. The court may consider
any of the following factors:

(1) could the party against whom preclusion is sought, as a
matter of law, have obtained review of the judgment; (2) is
the question one of law that involves two distinct claims or
intervening contextual shifts in the law; (3) do significant
differences in the quality or extensiveness of proceedings
between the two courts warrant relitigation of the issue;
(4) have the burdens of persuasion shifted such that the
party seeking preclusion had a lower burden of persuasion
in the first trial than in the second; or (5) are matters of
public policy and individual circumstances involved that
would render the application of collateral estoppel to be
fundamentally unfair, including inadequate opportunity or
incentive to obtain a full and fair adjudication in the initial
action?

Michelle T., 173 Wis. 2d at 689.

¶90 The Schwerdtfegers argue that issue preclusion reduces the criminal
restitution amount of $141,850.47 to the $63,000 determined in the bankruptcy
proceeding. They presume that “the commonality of the issues in the bankruptcy
and restitution proceedings is obvious” but provide no explanation.

¶91 The purpose of the victims in filing the complaint within the
bankruptcy proceeding was ultimately to prevent the Schwerdtfegers from
discharging any debt they owed to the victims due to the property damage. To do

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Nos. 2018AP1322-CR
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this, the victims cited to 11 U.S.C. § 523(a)(6), which makes a debt
nondischargeable “for willful and malicious injury by the debtor to another entity
or to the property of another entity.” The victims had to “prove that: (1) the
Debtor intended to and caused an injury; (2) the Debtor’s actions were willful; and
(3) the Debtor’s actions were malicious.” James Cape & Son Co. v Bowles, 318
B.R. 129, 146 (Bankr. E.D. Wis. 2004). Under this statute, “willful” means intent
to cause injury, not merely the committing of the intentional act that lead to the
injury. See id. These are stringent standards, requiring that the “debtor actually
intended to harm, not merely that a debtor acted intentionally and thus caused
harm. [The debtor] must have intended the consequences of his act, and therefore
negligent or reckless injuries” are not sufficient. Id. (citation omitted).
“Malicious” means “in conscious disregard of one’s duties or without just cause or
excuse.” Id. (citation omitted).

¶92 By contrast, as explained in detail above (see supra ¶68), restitution
is a sanction, and it is based on an entire course of conduct tied to the criminal
conduct and the loss suffered by the victims. The recovery permitted is broader
than that afforded in the bankruptcy proceeding.

¶93 Furthermore, not all of the questions of fact or law that the
Schwerdtfegers seek to preclude were litigated in the bankruptcy proceeding.
Whether Farmers Insurance is entitled to restitution was not litigated. Neither
Farmers Insurance nor the State, the entity to which the criminal restitution
remedy belongs, had an opportunity to participate much less seek review.
Similarly, the categories of damages were not the same—such as Farmers
Insurance’s claim and the victims’ attorneys’ fees. While the Schwerdtfegers seek
to apply the Farmers Insurance payment to AP and GP’s losses, the victims

34
Nos. 2018AP1322-CR
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provided information at the restitution establishing their losses that were not
covered by the insurer’s payment, and their arguments wholly ignore that Farmers
Insurance too is entitled to restitution under Wisconsin’s restitution statute. In
short, the mechanisms provided under Wisconsin’s restitution statute address
whether the same facts regarding losses are at issue to avoid any double recovery,
not issue preclusion.

¶94 There is no doubt that the bankruptcy hearing offered a fair and
quality review of some of the issues, but, as noted above, it was at the
disadvantage of not including all of the interested parties (the State and Farmers
Insurance), nor all of the evidence and categories of damages (the damage claim of
Farmers Insurance and the attorneys fees questions). See Mrozek, 281 Wis. 2d
448, ¶17 (these significant differences between the proceedings weigh against the
fairness of issue preclusion). “[A] restitution hearing is not the equivalent of a
civil trial and does not require strict adherence to the rules of evidence and burden
of proof.” State v. Johnson, 2005 WI App 201, ¶14, 287 Wis. 2d 381, 704
N.W.2d 625; see WIS. STAT. § 973.20(14)(d) (in a restitution hearing, the court
conducts the proceedings “so as to do substantial justice” according to substantive
law, and it “may waive the rule of practice, procedure, pleading or evidence”). By
contrast, the bankruptcy proceeding here was a civil trial, where parties must
comply with the procedural bankruptcy rules and applicable Federal Rules of Civil
Procedure. See Dahlquist v. First Nat’l Bank, 33 B.R. 101, 103 (Bankr. D. S.D.
1983).

¶95 In short, as noted above, defenses seeking to bar liability, rather than
to reduce the amount, are simply not permitted. For this and all the other reasons
already articulated, public policy would render the application of issue preclusion

35
Nos. 2018AP1322-CR
2018AP1323-CR

in this case fundamentally unfair, as it would deprive the State and its victims of
the liberal policy toward ordering restitution in criminal cases, particularly where,
as here, it appears the driving concern is with a double recovery, an issue the
restitution statute directly addresses.14

By the Court.—Judgments and orders affirmed.

This opinion will not be published. See WIS. STAT. RULE
809.23(1)(b)5.

14
To the extent the circuit court did not fully explain its decision as to why issue
preclusion does not limit the restitution award in this matter, we must search the record for
reasons to affirm. See, e.g., State v. Hunt, 2003 WI 81, ¶45 n.14, 263 Wis. 2d 1, 666 N.W.2d
771; Conrad v. Conrad, 92 Wis. 2d 407, 415, 284 N.W.2d 674 (1979). We have done so, as
shown above. Moreover, we may affirm on different grounds than the circuit court. State v.
Holt, 128 Wis. 2d 110, 124-25, 382 N.W.2d 679 (Ct. App. 1985), superseded by statute on other
grounds, WIS. STAT. § 940.225(7) (1985-86).

36