Title: Allsop Venture Partners III v. Murphy Desmond SC
Citation: N/A
Docket Number: 2020AP000806
State: Wisconsin
Issuer: Wisconsin Supreme Court
Date: June 2, 2023

2023 WI 43 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2020AP806 
 
 
 
COMPLETE TITLE: 
Allsop Venture Partners III, Alta V. Limited 
Partnership, Alta Subordinated Debt Partners III 
LP and State of Wisconsin Investment Board, 
          Plaintiffs, 
Terry K. Shockley, Sandy K. Shockley and 
Shockley Holdings Limited Partnership, Inc., 
          Intervenors-Plaintiffs-Appellants-
Petitioners, 
Terence F. Kelly, 
          Intervenor, 
     v. 
Murphy Desmond SC, Robert A. Pasch and Westport 
Insurance Company, 
          Defendants-Respondents. 
 
 
 
 
 
REVIEW OF DECISION OF THE COURT OF APPEALS 
Reported at 399 Wis. 2d 841, 967 N.W.2d 309 
(2021 – unpublished) 
 
 
OPINION FILED: 
June 2, 2023   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
October 17, 2022   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit    
 
COUNTY: 
Dane   
 
JUDGE: 
Richard G. Niess   
 
 
 
JUSTICES: 
HAGEDORN, J., delivered the majority opinion of the Court, in 
which ANN WALSH BRADLEY, DALLET, and KAROFSKY, JJ., joined. 
ZIEGLER, C.J., filed a dissenting opinion in which ROGGENSACK 
and REBECCA GRASSL BRADLEY, JJ., joined. 
 
NOT PARTICIPATING: 
        
 
 
 
ATTORNEYS: 
 
 
For 
the 
intervenors-plaintiffs-appellants-petitioners, 
there were briefs filed by Robert J. Kasieta and Kasieta Legal 
 
 
2 
Group, LLC, Madison, and Scott F. Hessell, Bruce S. Sperling, 
Michael G. Dickler, and Sperling & Slater, P.C., Chicago. There 
was an oral argument by Scott F. Hessell.  
 
For the defendants-respondents, there was a brief filed by 
Terry E. Johnson, Maria del Pizzo Sanders, and von Briesen & 
Roper, S.C., Milwaukee. There was an oral argument by Terry E. 
Johnson.  
 
 
 
 
2023 WI 43 
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2020AP806 
(L.C. No. 
2009CV4165) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Allsop Venture Partners III, Alta V. Limited 
Partnership, Alta Subordinated Debt Partners 
III LP and State of Wisconsin Investment Board, 
 
          Plaintiffs, 
 
Terry K. Shockley, Sandy K. Shockley and 
Shockley Holdings Limited Partnership, Inc., 
 
          Intervenors-Plaintiffs-Appellants-                               
Petitioners, 
 
Terence F. Kelly, 
 
          Intervenor, 
 
     v. 
 
Murphy Desmond SC, Robert A. Pasch and Westport 
Insurance Company, 
 
          Defendants-Respondents. 
 
FILED 
 
JUN 2, 2023 
 
Sheila T. Reiff 
Clerk of Supreme Court 
 
 
 
 
HAGEDORN, J., delivered the majority opinion of the Court, in 
which ANN WALSH BRADLEY, DALLET, and KAROFSKY, JJ., joined. 
ZIEGLER, C.J., filed a dissenting opinion in which ROGGENSACK 
and REBECCA GRASSL BRADLEY, JJ., joined. 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed.   
 
No. 
2020AP806   
 
2 
 
¶1 
BRIAN HAGEDORN, J.  This is a review of certain 
evidentiary determinations and other related issues following a 
jury verdict in a legal malpractice trial.  This matter arose 
when a media company entered into a seemingly tax-friendly sale—
—dubbed a "midco transaction"——with the assistance of three 
entities:  a tax law firm, an accounting firm, and corporate law 
firm Murphy Desmond SC (Murphy Desmond).  The deal closed and 
the shareholders received their payout, but the favorable 
arrangement fell apart when the IRS came after the shareholders 
for taxes and penalties.  Three shareholders (collectively the 
Shockleys)1 intervened in litigation against all three assisting 
entities and brought their own claims of legal malpractice, 
negligence, and fraud.  The Shockleys later settled with the tax 
and accounting firms, signed a Pierringer release,2 and amended 
their complaint to remove the allegations against them.  All 
that remained were legal malpractice-related claims against 
Murphy Desmond.   
                                                 
1 The three shareholders are Sandy Shockley, Terry Shockley, 
and Shockley Holdings Limited Partnership, Inc. (Shockley 
Holdings). 
2 "A Pierringer release operates as a satisfaction of that 
portion of the plaintiff's cause of action for which the 
settling joint tortfeasor is responsible, while at the same time 
reserving the balance of the plaintiff's cause of action against 
a nonsettling joint tortfeasor."  Teske v. Wilson Mut. Ins. Co., 
2019 WI 62, ¶11 n.6, 387 Wis. 2d 213, 928 N.W.2d 555 (quoting 
Imark Indus. Inc. v. Arthur Young & Co., 148 Wis. 2d 605, 621, 
436 N.W.2d 311 (1989)); see Pierringer v. Hoger, 21 Wis. 2d 182, 
184-85, 124 N.W.2d 106 (1963). 
No. 
2020AP806   
 
3 
 
¶2 
At trial, Murphy Desmond was found negligent in part, 
but 
the 
circuit 
court 
concluded 
it 
was 
entitled 
to 
indemnification from the other two entities who had already 
settled, leaving the Shockleys with no additional recovery.  The 
Shockleys appealed, lost, and now present four issues for our 
review.   
¶3 
First, the Shockleys argue the circuit court erred 
when it admitted into evidence, for the limited purpose of bias 
or prejudice, the fact that the Shockleys settled with the two 
other entities.3  This claim concerns the circuit court's 
application of Wis. Stat. § 904.08 (2021-22),4 which generally 
prohibits the admission of settlement evidence, yet permits its 
admission in narrow circumstances.  We conclude the circuit 
court did not erroneously exercise its discretion because it 
applied 
the 
appropriate 
law 
and 
reached 
a 
reasonable 
determination that an exception applied under the unique facts 
of this case, which it reinforced with a limiting instruction to 
the jury.    
¶4 
Second, the Shockleys contend a comment in Murphy 
Desmond's closing argument impermissibly used the settlement 
evidence to argue liability, and claim the circuit court wrongly 
denied the Shockleys' post-trial motion for a new trial.  We 
                                                 
3 Evidence of settlement amounts——which we have said is not 
permitted——was introduced by the Shockleys, not Murphy Desmond, 
and is not challenged here.  
4 All subsequent references to the Wisconsin Statutes are to 
the 2021-22 version. 
No. 
2020AP806   
 
4 
 
agree that the circuit court erred in permitting the closing 
remark, but hold it did not erroneously exercise its discretion 
when it denied the Shockleys' motion for a new trial.   
¶5 
Third, the Shockleys maintain the circuit court 
mistakenly admitted their original, superseded complaint.  We 
conclude that regardless of whether this was error, its 
admission was harmless.   
¶6 
Finally, Sandy Shockley and Shockley Holdings assert 
that Murphy Desmond may still owe damages based on the jury's 
verdict because its negligence was not attributable to the 
intentional misrepresentations committed by the two other, now-
settled entities.  In Fleming v. Thresherman's Mutual Insurance 
Co., we held that intentional tortfeasors must indemnify 
negligent 
parties 
whose 
liability 
is 
joint, 
and 
that 
a 
Pierringer release imputes to the plaintiff the settling 
defendant's 
liability 
to 
nonsettling 
defendants. 
 
131 
Wis. 2d 123, 130-31, 388 N.W.2d 908 (1986).  We conclude the 
evidence at trial confirms that liability was joint.  Therefore, 
in accord with Fleming, Murphy Desmond owes no damages to Sandy 
Shockley and Shockley Holdings.   
¶7 
For these reasons, we affirm the decision of the court 
of appeals.  
I.  BACKGROUND 
¶8 
In 1985, Terry and Sandy Shockley bought a radio 
station in Madison and rebranded it to oldies, a move that 
proved wildly successful.  That success encouraged them to start 
No. 
2020AP806   
 
5 
 
a media company, Shockley Communications Corporation (SCC).  
Over the years, SCC amassed nine radio stations and six TV 
stations.  Terry and Sandy Shockley eventually became minority 
shareholders and sat on SCC's board of directors.  During that 
time, SCC began working with law firm Murphy Desmond.   
¶9 
By the early 2000s, SCC pondered selling the company 
because of the hot media market.  But there was a catch:  
potential buyers wanted to purchase SCC's assets, not its stock.  
That posed a problem because an asset sale would cause a tax 
both at the corporate level and at the individual (shareholder) 
level.  That's when accounting firm RSM McGladrey, Inc. (RSM) 
entered the picture.   
¶10 RSM proposed a solution:  a "midco transaction" where 
SCC would sell its stock to a middle company and the middle 
company would then sell the assets to various interested buyers.  
After initial discussions with RSM, the shareholders hired tax 
law firm Curtis, Mallet-Prevost, Colt & Mosle LLP (Curtis 
Mallet), which advised that the IRS would respect the deal.  So, 
with Murphy Desmond's assistance on the stock sale to the middle 
company, the board put pen to paper and completed the deal.   
¶11 At first, the midco transaction worked.  But the IRS 
wound up rejecting major portions of the transaction and, 
because SCC no longer existed, levied various taxes and 
penalties against the shareholders.  This led to a drawn-out 
legal battle the shareholders eventually lost, leaving them with 
millions of dollars in taxes and penalties owed to the IRS.   
No. 
2020AP806   
 
6 
 
¶12 Several shareholders5 then sued RSM, Curtis Mallet, 
Murphy Desmond, and several associated individuals.  The 
Shockleys intervened and filed a complaint against all three 
entities, alleging legal malpractice against Curtis Mallet and 
Murphy Desmond, negligence against RSM, and fraud against Curtis 
Mallet and RSM.6   
¶13 As the suit proceeded, the Shockleys settled with RSM 
and Curtis Mallet, signing a Pierringer release (more on this 
below).  With the claims against RSM and Curtis Mallet 
dismissed, the Shockleys amended their complaint.  They removed 
all allegations against RSM and Curtis Mallet and now asserted 
only a legal malpractice claim against Murphy Desmond and sought 
declaratory relief on the same grounds.7  It is this claim that 
the parties went to trial on and from which this appeal derives. 
                                                 
5 Allsop Venture Partners III Limited Partnership, Alta V 
Limited Partnership, Alta Subordinated Debt Partners III, L.P., 
and the State of Wisconsin Investment Board brought the initial 
suit. 
6 The Shockleys also sued individual employees of Murphy 
Desmond (Robert A. Pasch), RSM (Stephen A. Schmidt and David 
Klintworth), and Curtis Mallet (William L. Brinker).  The 
Shockleys asserted the same claims against the employees as 
their employers.  No one argues the legal claims operate 
differently for the employees and their employers.  Thus, we 
refer only to the three entities for ease of reference. 
7 The Shockleys also brought a direct action claim against 
Westport Insurance Corporation, which insured Murphy Desmond 
during the relevant timeframe.  This claim is not at issue here. 
No. 
2020AP806   
 
7 
 
¶14 Prior to trial, Murphy Desmond filed a motion in 
limine.  As relevant here, the motion asked the circuit court8 to 
permit Murphy Desmond to introduce two pieces of evidence:  (1) 
the fact that the Shockleys settled with RSM and Curtis Mallet 
and (2) the Shockleys' original complaint against all three 
defendants.  The Shockleys filed their own motion, seeking to 
exclude all evidence of prior settlement and the earlier 
complaint.  The circuit court granted Murphy Desmond's motion, 
and offered to give the jury a limiting instruction regarding 
the settlement.   
¶15 In light of this ruling, the Shockleys decided to 
elicit testimony about the settlement during Sandy Shockley’s 
testimony.  Before doing so, counsel for the Shockleys asked the 
circuit court to give the limiting instruction to the jury.  The 
court instructed the jury accordingly, directing them to use the 
evidence for credibility purposes only, and not for the truth of 
any claim against Murphy Desmond.   
¶16 Counsel for the Shockleys then asked Sandy about the 
fact of settlement with RSM and Curtis Mallet.  However, counsel 
then proceeded to ask Sandy about the settlement amounts——
evidence not addressed in the motions in limine or the circuit 
court's decision to admit the fact of settlement.  Reflecting on 
this after trial, the circuit court told the Shockleys’ counsel:  
"I almost fell out of my chair when you asked Ms. Shockley how 
                                                 
8 The Honorable Richard G. Niess of the Dane County Circuit 
Court presided. 
No. 
2020AP806   
 
8 
 
much they got in settlement.  I don't think any of my rulings 
put into evidence at issue the amount of the settlement on the 
Pierringer defendants."  Both Murphy Desmond and the Shockleys 
continued to reference settlement evidence during the trial 
without objection.   
¶17 After both sides rested, closings began.  Murphy 
Desmond's attorney made the following comment during its hour-
long closing argument: 
And [the Shockleys' lawyer] should be blushing, 
because he's the one who got up at the beginning of 
this trial and talked about this case as if they had 
never sued -- they had never accused [RSM] and Curtis 
Mallet of doing anything wrong. . . .  Didn't tell you 
that they'd settled with Curtis Mallet and [RSM].  
Didn't tell you they got enormous amounts of money 
because they're the true culprits here, of course.  
And didn't tell you that because they settled with 
them.  His clients had night and day changed their 
allegations to drop all the allegations against those 
people and now take the posture that he's taking now, 
that this is, essentially, all our fault.  Even though 
everything that his clients alleged against Curtis 
Mallet has been proven.  Even though the settlement, 
in my opinion, is an acknowledgment that they've been 
proven.   
The Shockleys objected to this line of argument on the ground 
that Murphy Desmond was trying to use the settlement evidence to 
disprove the Shockleys' claims.  The circuit court overruled 
that objection.   
¶18 Ultimately, the jury found that RSM, Curtis Mallet, 
and Murphy Desmond were negligent, as was plaintiff-shareholder 
Terry Shockley.  The jury also determined that RSM and Curtis 
Mallet committed intentional misrepresentations. 
No. 
2020AP806   
 
9 
 
¶19 After trial, the Shockleys moved for a new trial, 
arguing Murphy Desmond's closing argument went over the line.  
The circuit court denied the motion.   
¶20 Murphy Desmond also filed a motion for judgment on the 
verdict.  According to Murphy Desmond, the jury's finding that 
RSM and Curtis Mallet committed intentional misrepresentations 
entitled Murphy Desmond to indemnification from them.  And, 
because the Shockleys signed Pierringer releases with RSM and 
Curtis Mallet, that meant that the Shockelys stood in their 
shoes for purposes of indemnification, warranting dismissal.  
Sandy Shockley and Shockley Holdings responded that their 
damages attributable to the intentional misrepresentations were 
separate from the damages attributable to the midco transaction 
and thus, Murphy Desmond was not entitled to indemnification.  
The circuit court sided with Murphy Desmond, concluding Sandy 
Shockley and Shockley Holdings had neither alleged nor proven 
any non-joint liability.   
¶21 The Shockleys appealed, and the court of appeals 
affirmed.  Allsop Venture Partners III v. Murphy Desmond SC, No. 
2020AP806, unpublished slip op. (Wis. Ct. App. Oct. 21, 2021) 
(per curiam).9  We granted the Shockleys' petition for review. 
                                                 
9 In addition to the four issues identified here, the 
Shockleys also appealed the sufficiency of evidence supporting 
several jury verdict answers.  They did not raise those 
arguments before us. 
No. 
2020AP806   
 
10 
 
II.  DISCUSSION 
¶22 The Shockleys present four arguments concerning:  (1) 
admission of settlement evidence; (2) use of the settlement 
evidence 
during 
closing 
arguments; 
(3) 
admission 
of 
the 
Shockleys' superseded complaint; and (4) indemnity.  None 
entitle the Shockleys to the relief they seek. 
A.  Admission of Settlement Evidence 
¶23 First, the Shockleys argue that the circuit court 
erred in admitting the fact of settlement into evidence because 
it did not fall within any exceptions under Wis. Stat. 
§ 904.08.10  We review a circuit court's decision to admit 
evidence for an erroneous exercise of discretion.  State v. 
Nieves, 2017 WI 69, ¶16, 376 Wis. 2d 300, 897 N.W.2d 363.  As 
long as the circuit court "examined the relevant facts, applied 
a proper legal standard, and, using a demonstrated rational 
process, reached a reasonable conclusion," we will not disturb 
its ruling.11  Martindale v. Ripp, 2001 WI 113, ¶28, 246 
Wis. 2d 67, 629 N.W.2d 698. 
                                                 
10 The Shockleys also devote half a sentence to the argument 
that the probative value of the settlement evidence was 
substantially outweighed by a danger of unfair prejudice.  But 
as we have repeatedly said, we do not address undeveloped 
arguments.  Serv. Emps. Int'l Union, Local 1 v. Vos, 2020 WI 67, 
¶24, 393 Wis. 2d 38, 946 N.W.2d 35. 
11 The dissent's warnings that this statutory exception 
should not be expansively construed are well-taken, but its 
disregard of the proper standard of review in favor of a more 
"exacting scrutiny" is the wrong response.  Dissent, ¶66.  In 
effect, the dissent substitutes its judgment for that of the 
circuit court.   
No. 
2020AP806   
 
11 
 
¶24 Wisconsin Stat. § 904.08 establishes the general rule 
that settlement-related evidence "is not admissible to prove 
liability for or invalidity of the claim or its amount."  But 
this instruction is not ironclad.  A circuit court can admit 
such evidence if offered "for another purpose, such as proving 
bias or prejudice of a witness," among other reasons.  Id.12  In 
Morden v. Continental AG, we explained that § 904.08 is a 
modification of Federal Rule 408, and its exceptions "should not 
be expansively construed."  2000 WI 51, ¶85, 235 Wis. 2d 325, 
611 N.W.2d 659.  While the exceptions should not swallow the 
rule, neither should the rule always swallow the statutory 
exceptions.  The law explicitly provides that bias or prejudice 
of a witness can be a permissible basis to admit such evidence.  
See § 904.08.  We have stated that this can be satisfied "by 
showing that a witness changed his or her testimony or that the 
posture of a settling party was significantly different as a 
                                                 
12 In full, Wis. Stat. § 904.08 provides: 
Evidence of furnishing or offering or promising to 
furnish, or accepting or offering or promising to 
accept, a valuable consideration in compromising or 
attempting to compromise a claim which was disputed as 
to either validity or amount, is not admissible to 
prove liability for or invalidity of the claim or its 
amount.  Evidence of conduct or statements made in 
compromise negotiations is likewise not admissible.  
This section does not require exclusion when the 
evidence is offered for another purpose, such as 
proving bias or prejudice of a witness, negativing a 
contention 
of 
undue 
delay, 
proving 
accord 
and 
satisfaction, novation or release, or proving an 
effort 
to 
compromise 
or 
obstruct 
a 
criminal 
investigation or prosecution. 
No. 
2020AP806   
 
12 
 
result of the settlement."13  Morden, 235 Wis. 2d 325, ¶83.  The 
obvious concern animating this exception is that plaintiffs will 
"shade their testimony against the interest of the non-settling 
tortfeasor."  7 Daniel D. Blinka, Wisconsin Practice Series:  
Wisconsin Evidence § 408.1 (4th ed. 2022). 
¶25 The bias and prejudice exception, however, has limits.  
In Johnson v. Heintz, we explained that while Wis. Stat. 
§ 904.08 permits admission of certain types of settlement-
related evidence (such as the fact of settlement), it does not 
permit admission of settlement amounts.  73 Wis. 2d 286, 300, 
243 N.W.2d 815 (1976) ("To allow the admission of details 
including the amount of settlement as an exception to the rule 
would 
defeat 
the 
purpose 
of 
the 
rule 
and 
render 
it 
meaningless.").  The amount of settlement is so generally off-
limits that its admission has been described as "taboo."  Daniel 
J. LaFave, The Admissibility of Settlement Evidence in Multi-
Defendant Tort Cases, Wis. Law., June 1998, at 59; see also 
Morden, 235 Wis. 2d 325, ¶99 n.15 ("Introducing settlement 
evidence is a potentially incendiary device, one that could lead 
the jury to conclude that the plaintiffs have received ample 
                                                 
13 The dissent suggests Morden created a new "significant 
change in posture" exception to Wis. Stat. § 908.04.  Dissent, 
¶¶62, 68.  It did not.  Morden simply says that "the prejudice 
or bias of a witness"——language straight out of the statute——
might be demonstrated by showing that a witness's testimony 
could 
be 
"significantly 
different 
as 
a 
result 
of 
the 
settlement."  Morden v. Cont'l AG, 2000 WI 51, ¶83, 235 
Wis. 2d 325, 611 N.W.2d 659.     
No. 
2020AP806   
 
13 
 
compensation from the real malefactors and no further recovery 
is necessary." (quoting another source)).   
¶26 In this case, the central question is whether the 
circuit court erroneously exercised its discretion when it 
admitted the fact that the Shockleys settled with RSM and Curtis 
Mallet.  Although the settlement amounts were introduced, it was 
the Shockleys——not Murphy Desmond——that did so.  And the circuit 
court did not rule that the amount of settlement was admissible 
in its pre-trial decision.  Indeed, the circuit court judge was 
shocked when the Shockleys brought the amount of settlement into 
evidence, later saying he "almost fell out of [his] chair."  
Thus, we limit our review to the fact of settlement and conclude 
the circuit court reasonably determined that the posture of the 
Shockleys' arguments changed significantly after the settlement 
and that some of the plaintiff's witnesses might be biased.  
This 
case 
involved 
both 
negligent 
(Murphy 
Desmond) 
and 
intentional (RSM and Curtis Mallet) tortfeasors; the Shockleys 
settled only with the latter.  The circuit court appeared to 
recognize the somewhat unusual posture of this case where two of 
the three central players in the dispute settled out, leaving 
litigation against solely the third defendant who could now be 
portrayed as the main culprit.  The circuit court was well aware 
how the Shockleys' story changed and what their incentives at 
trial now were.14  Take, for example, the Shockleys' opening 
                                                 
14 On the morning of trial, the circuit court explained: 
There is no doubt in this case that the posture of the 
intervening plaintiffs has changed as a result of the 
No. 
2020AP806   
 
14 
 
statement where they specifically argued that neither RSM nor 
Curtis Mallet committed intentional wrongdoing.  The court 
reasonably determined that admission of the fact of settlement 
into evidence went straight to the credibility and potential 
bias of the Shockleys' witnesses, such as Sandy and Terry 
Shockley.   
¶27 This is not the first time we have affirmed a circuit 
court's decision to admit the fact of settlement into evidence 
due to witness bias.  In Hareng v. Blanke, the plaintiff 
initially sued four defendants.  90 Wis. 2d 158, 162, 279 
N.W.2d 437 (1979).  She settled with two of the four before 
trial.  Id.  At trial, counsel for one of the remaining 
defendants asked the plaintiff why one of the settled defendants 
was no longer a party.  Id. at 167.  The circuit court admitted 
the evidence despite an objection.  Id.  We affirmed this 
decision, reasoning that the evidence was admissible to show 
witness prejudice or bias because the plaintiff "had a financial 
interest in playing down the negligence of [the settled 
defendant] and emphasizing that of [the remaining defendants]."  
Id. at 168.  So too here.   
                                                                                                                                                             
Pierringer settlement.  Instead of having the burden 
of proof and actively looking to prove the case 
against the settling parties, they have settled those 
claims and are now playing a defense on those claims 
and will be, no doubt, arguing for a lesser percentage 
of causal negligence on the part of these settled 
parties.  That is clearly a change in posture.   
No. 
2020AP806   
 
15 
 
¶28 Moreover, the circuit court did not just permit the 
evidence without restriction.  Before it was presented to the 
jury, the court gave a special instruction to use the settlement 
evidence only for credibility purposes and not as proof of fault 
or damages.15  That limiting instruction added a protective layer 
to ensure the statutory exception requiring an acceptable 
purpose was complied with.  Our law presumes the jury followed 
this instruction.  See State v. Hurley, 2015 WI 35, ¶90, 361 
Wis. 2d 529, 861 N.W.2d 174.  
¶29 Even given our conclusion, we reiterate as we did in 
Morden that this statutory exception should not be expansively 
construed.  235 Wis. 2d 325, ¶85.  Circuit courts should 
exercise the utmost caution in determining whether to admit 
settlement evidence under Wis. Stat. § 904.08.  See Morden, 235 
Wis. 2d 325, ¶85 ([T]he "Judicial Council Committee's Note to 
Rule 904.08 cites cases that 'admonish trial courts to be 
cautious in determining admissibility.'"  (quoting another 
source)).  Our holding today should not be taken by circuit 
                                                 
15 The court instructed the jury that it, 
must not consider this evidence about the settlements 
as evidence of the truth of the claims against those 
defendants.  You may consider this evidence only to 
the extent that you believe it may bear on the 
credibility of the testimony of any witness including 
the plaintiffs and the settling parties.  Any award of 
damages to any plaintiff must be made without taking 
into account any amounts the plaintiff may have 
received as a result of that settlement and any 
determination of percentages of fault attributed to 
any party must be made without regard to that 
settlement. 
No. 
2020AP806   
 
16 
 
courts as a license to admit all, or even most, settlement 
evidence.  After all, the statute merely permits, but does not 
require, admission under certain circumstances.  Id., ¶82. 
¶30 In conclusion, the circuit court did not erroneously 
exercise its discretion when it determined that witness bias was 
a significant risk in light of the dramatically altered posture 
of this case following settlement with two central tortfeasors.  
It supported this limited admission of the fact of settlement 
with a cautionary and clarifying instruction to the jury.  Based 
on the unique facts of this case, we hold the circuit court did 
not erroneously exercise its discretion by admitting the fact of 
settlement into evidence.   
B.  Discussion of Settlement Evidence at Closing Arguments 
¶31 The Shockleys also fault the circuit court for 
permitting Murphy Desmond to argue during its closing argument 
over their objection that the settlement evidence effectively 
disproved the Shockleys' claims.  They contend this error 
warrants a new trial.  While we agree the argument crossed the 
line, we conclude the circuit court did not erroneously exercise 
its discretion in denying the Shockleys' motion for a new trial. 
1.  Murphy Desmond's Argument Was Improper 
¶32 As already explained, Wis. Stat. § 904.08 prohibits 
parties from using settlement evidence to "prove liability for 
or invalidity of [a] claim or its amount."  Consistent with the 
circuit court's instruction, Murphy Desmond's closing argument 
No. 
2020AP806   
 
17 
 
addressed the Shockley's credibility due to their settlement 
with other tortfeasors and consequent shift in position.  
However, we agree with the Shockleys that counsel for Murphy 
Desmond strayed at one point when he said:  "Even though 
everything that [the Shockleys] alleged against Curtis Mallet 
has been proven.  Even though the settlement, in my opinion, is 
an acknowledgment that they've been proven."  This statement 
appears aimed at liability rather than credibility.  In effect, 
counsel seemed to claim that the Shockleys' allegations against 
RSM and Curtis Mallet had already been proven by virtue of the 
settlement and, therefore, Murphy Desmond was not liable.16  
While we grant circuit courts considerable discretion in 
"determining the propriety of [a closing] argument,"17 this 
crossed the line.  The circuit court erroneously exercised its 
discretion when it permitted counsel's comment, which ran 
counter to its prior evidentiary ruling and instruction to the 
jury.  That said, we still must determine whether the error 
warranted a new trial. 
                                                 
16 Counsel's statement is similar to an argument made in a 
Delaware case, Atwell v. RHIS, Inc., where the non-settled 
defendant remarked in closing that the settled defendant "fell 
on the sword."  974 A.2d 148, 150 (Del. 2009).  The Delaware 
Supreme Court observed that the comment "had the 'purpose of 
persuading the jury that the persons to blame for the accident 
had already admitted liability, raising the question that the 
plaintiff's claim against [the nonsettling defendant] might be 
invalid . . . .'"  Id. at 154 (alteration in original) (quoting 
another source).  We infer likewise in this case.   
17 State v. Burns, 2011 WI 22, ¶48, 332 Wis. 2d 730, 798 
N.W.2d 166.   
No. 
2020AP806   
 
18 
 
2.  The Improper Argument Did Not Warrant a New Trial 
¶33 Following trial, the Shockleys pointed to the error in 
closing argument and requested a new trial.18  A new trial is 
appropriate when it "'affirmatively appear[s]' that the remarks 
prejudiced the complaining party."  Wausau Underwriters Ins. Co. 
v. Dane County, 142 Wis. 2d 315, 329, 417 N.W.2d 914 (Ct. App. 
1987) (quoting Roeske v. Schmitt, 266 Wis. 2d 557, 572, 64 
N.W.2d 394 (1954)).  A circuit court should grant such a motion 
when it determines that, but for the improper argument, "the 
verdict reflects a result which in all probability would have 
been more favorable to the complaining party."  Wagner v. Am. 
Fam. Mut. Ins. Co., 65 Wis. 2d 243, 250, 222 N.W.2d 652 (1974).  
A circuit court's decision to grant or deny a motion for a new 
trial is discretionary; we reverse only if the court erroneously 
exercised its discretion.  Id. at 249. 
¶34 The circuit court denied the Shockleys' request for a 
new trial because, in its view, the error was harmless 
considering the court's jury instruction and the multiple days 
of testimony supporting the jury's ultimate finding.  This was a 
decision a reasonable judge could reach supported by the record 
and the relevant law.  Murphy Desmond's improper comment 
                                                 
18 Murphy Desmond contends the Shockleys forfeited this 
argument because they failed to move for a mistrial at the time 
of the error and only did so in their post-trial motion.  The 
Shockleys respond that they did not need to move for a mistrial 
because their objection was overruled.  We need not reach this 
forfeiture argument because we agree with Murphy Desmond that 
the circuit court did not erroneously exercise its discretion 
when denying the post-trial motion for a mistrial. 
No. 
2020AP806   
 
19 
 
amounted to a single dark cloud on an otherwise sunny day.  The 
statement comprised two sentences in almost 80 pages of closing 
argument transcript.  Following the Shockleys' objection, 
counsel for Murphy Desmond backed away from any improper use of 
the evidence and emphasized that the settlement wasn't the "most 
important issue in this case."   
¶35 Moreover, the circuit court specifically instructed 
the jury that it could only use the settlement evidence for 
credibility purposes, and not as proof of fault or damages.  As 
we've stressed many times before:  "We assume that 'a properly 
given admonitory instruction is followed' and that the 'jury 
acted according to law.'"  State v. Pitsch, 124 Wis. 2d 628, 645 
n.8, 369 N.W.2d 711 (1985) (quoting other sources).  We see no 
reason to abandon that presumption here due to one improper 
statement in a closing argument that was otherwise consistent 
with the credibility-focused limiting instruction previously 
given.  
¶36 As a final point, this case is as good as any for 
emphasizing 
why 
we 
afford 
circuit 
courts 
discretion 
in 
determining whether to grant a new trial.  This litigation 
spanned 11 years start-to-finish, underscoring its procedural 
and factual complexity.  Trial itself lasted ten days.  While a 
circuit court's decision to deny a motion for a new trial is not 
bullet-proof, it is right and proper to entrust this judgment 
call to those most intimately familiar with the case.   
¶37 In view of all of this, we hold that the circuit court 
did not erroneously exercise its discretion when it denied the 
No. 
2020AP806   
 
20 
 
Shockleys' motion for a new trial based on the improper remark 
during closing.  
C.  Admission of the Superseded Complaint 
¶38 Next, 
the 
Shockleys 
argue 
the 
circuit 
court 
erroneously admitted its prior, superseded complaint.  They 
further contend that the error was not harmless because Murphy 
Desmond used the original allegations throughout trial to 
suggest RSM and Curtis Mallet were the true culprits.  Murphy 
Desmond responds that admission of the superseded complaint was 
not error, but even if it was, it was harmless because it was 
consistent with the Shockleys' position at trial.  Regardless of 
whether admission of the original complaint was in error, we 
conclude it was harmless.   
¶39 Evidentiary decisions are subject to review for an 
erroneous exercise of discretion, but "a circuit court's 
erroneous exercise of discretion does not warrant a new trial if 
the error was harmless."  Weborg v. Jenny, 2012 WI 67, ¶43, 341 
Wis. 2d 668, 816 N.W.2d 191.  In other words, a new trial should 
only be granted where the error affected a substantial right of 
the affected party.  Wis. Stat. § 805.18(2); Martindale, 246 
Wis. 2d 67, ¶31.  The test is the same in both civil and 
criminal cases:  whether "it appears 'beyond a reasonable doubt 
that the error complained of did not contribute to the verdict 
obtained.'" 
 
Hannemann 
v. 
Boyson, 
2005 
WI 94, 
¶57, 
282 
Wis. 2d 664, 698 N.W.2d 714 (quoting another source); 
see 
Chapman v. California, 386 U.S. 18, 24 (1967). 
No. 
2020AP806   
 
21 
 
¶40 The alleged prejudice that flowed from admission of 
the complaint centered on the jury discovering the Shockleys' 
original allegations against RSM and Curtis Mallet.  But the 
fact of settlement, admitted for a limited purpose as previously 
explained, accomplished a similar result.  The jury already knew 
the Shockleys originally sued RSM and Curtis Mallet, settled, 
and then focused their efforts on Murphy Desmond.  In other 
words, neither admission nor Murphy Desmond's use of the 
superseded pleadings poisoned the well——at least not enough for 
us to find beyond a reasonable doubt that juror knowledge of the 
precise allegations in the original complaint contributed to the 
outcome.  Hannemann, 282 Wis. 2d 664, ¶57.  Absent this, the 
Shockleys offer nothing else to suggest their substantial rights 
were 
affected. 
 
Therefore, 
admission 
of 
the 
superseded 
complaint, if erroneous, was harmless. 
D.  Indemnity 
¶41 Finally, Sandy Shockley and Shockley Holdings contend 
Murphy Desmond is not entitled to indemnity for its negligence.  
Indemnity is a question of law we review de novo.  Fleming, 131 
Wis. 2d at 127.  Understanding this issue requires unpacking 
indemnification, Pierringer releases, and how our decision in 
Fleming developed the relationship between the two.   
¶42 "Indemnification is a vehicle by which one party or 
defendant 
to 
a 
lawsuit 
attempts 
to 
shift 
the 
entire 
responsibility for a loss or injury to another party."  Artisan 
& Truckers Cas. Co. v. Thorson, 2012 WI App 17, ¶27, 339 
No. 
2020AP806   
 
22 
 
Wis. 2d 346, 810 N.W.2d 825 (quoting another source).  The point 
"is to ensure that the losses are borne by the party responsible 
for the damages."  Id.     
¶43 Pierringer releases are settlement agreements between 
a plaintiff and some, but not all, defendants in a case.  See 
Teske v. Wilson Mut. Ins. Co., 2019 WI 62, ¶11 n.6, 387 
Wis. 2d 213, 
928 
N.W.2d 555; 
Pierringer 
v. 
Hoger, 
21 
Wis. 2d 182, 184-85, 124 N.W.2d 106 (1963).  A Pierringer 
release satisfies "that portion of the plaintiff's cause of 
action for which the settling joint tortfeasor is responsible, 
while at the same time reserving the balance of the plaintiff's 
cause of action against a nonsettling joint tortfeasor."  Imark 
Indus., Inc. v. Arthur Young & Co., 148 Wis. 2d 605, 621, 436 
N.W.2d 311 (1989).  In Pierringer, we held that such releases 
impute onto the settling plaintiff any liability in contribution 
the settled defendants may owe to the non-settled defendants.  
21 Wis. 2d at 188-89.  That is, any obligation the settling 
party may have to pay its proportionate share of the liability 
is extinguished by virtue of the release and rests with the 
plaintiff.  Id. 
¶44 Now we turn to our decision in Fleming.  Prior to that 
case, we had held that those guilty of intentional misconduct 
are not entitled to contribution from parties engaging in 
negligent conduct.  See Jacobs v. Gen. Accident Fire & Life 
Assurance Corp., 14 Wis. 2d 1, 5, 109 N.W.2d 462 (1961); Zurn v. 
Whatley, 213 Wis. 365, 372, 251 N.W. 435 (1933).  In Fleming, we 
extended this line of reasoning and held that a negligent 
No. 
2020AP806   
 
23 
 
tortfeasor has a right to indemnification from an intentional 
joint tortfeasor.  131 Wis. 2d at 130.  We reasoned that the 
full responsibility for the loss should be placed on the 
intentional tortfeasor because doing so would deter conduct 
"society considers to be substantially more egregious than 
negligence."  Id.  Fleming further held that a Pierringer 
release imputes onto the plaintiff any indemnity the settled 
defendants owe the non-settled defendants.  Id. at 131.  In 
other words, the plaintiff who executes a Pierringer release 
effectively stands in the shoes of the settled defendants.  So 
if the non-settled defendants are entitled to indemnity from the 
settled defendants, the responsibility for the loss shifts from 
the settled defendants to the plaintiff.19     
¶45 Here's how all of this works in this case.  The jury 
found 
Murphy 
Desmond 
negligent, 
so 
it 
is 
entitled 
to 
indemnification 
from 
liability 
that 
is 
joint 
with 
any 
intentional tortfeasors.  The jury also found that RSM and 
Curtis Mallet committed intentional torts.  Therefore, under 
Fleming, RSM and Curtis Mallet bear the full responsibility of 
any joint liability arising out of their intentional conduct, 
including the negligent conduct by Murphy Desmond.  But both RSM 
and 
Curtis 
Mallet 
signed 
a 
Pierringer 
release 
with 
the 
Shockleys.  That means that, per Fleming, any indemnity RSM and 
                                                 
19 We adopted this rule in the interest of judicial economy—
—namely, it would be inefficient to order a judgment against a 
settled defendant only to have the plaintiff satisfy it himself.  
Fleming v. Thresherman's Mut. Ins. Co., 131 Wis. 2d 123, 131, 
388 N.W.2d 908 (1986). 
No. 
2020AP806   
 
24 
 
Curtis Mallet owe Murphy Desmond is imputed onto Sandy Shockley 
and Shockley Holdings.  In short, so long as the liability is 
joint, Murphy Desmond is entitled to indemnification from RSM 
and Curtis Mallet.  But Sandy Shockley and Shockley Holdings, by 
virtue of the Pierringer release, now stand in the shoes of RSM 
and Curtis Mallet.  So Murphy Desmond owes nothing further to 
them.   
¶46 Understanding 
this, 
Sandy 
Shockley 
and 
Shockley 
Holdings argue Fleming's framework does not apply here because 
Murphy Desmond's negligence was not attributable to RSM and 
Curtis Mallet's intentional misrepresentations.  In other words, 
they argue the malfeasance here was not wholly joint, pointing 
to our decision in Imark as analogous to the facts in this case.  
148 Wis. 2d 605.   
¶47 In Imark, a corporation sued an accounting firm for 
negligent misrepresentation based on several audits.  Id. at 
613.  That accounting firm then sued three corporate officers 
for intentional misrepresentations related to the audits.  
Id. at 614.  The jury allocated the negligence among the parties 
and also found that the corporate officers committed intentional 
misrepresentations.  Id. at 614-15.  We observed that the record 
contained specific evidence of negligence by the firm that was 
"unaffected" by any intentional misrepresentations by the 
corporate officers.  Id. at 624.  So we remanded the case for 
the jury to determine what portion of the firm's liability was 
attributable 
to 
its 
reliance 
on 
the 
intentional 
misrepresentations, and what was unattributable.  Id. at 628-29.  
No. 
2020AP806   
 
25 
 
Sandy Shockley and Shockley Holdings argue a remand is similarly 
required here because the jury did not determine what portion of 
Murphy Desmond's negligence was unattributable to RSM and Curtis 
Mallet's intentional misrepresentations. 
¶48 Unlike in Imark, the record before us reveals no such 
ambiguity.  The circuit court correctly observed that the 
Shockleys never alleged——nor proved at trial——that Murphy 
Desmond had liability separate from RSM and Curtis Mallet.  In 
fact, Sandy Shockley and Shockley Holdings have failed to point 
to any such evidence before the circuit court, the court of 
appeals, or before us.  We simply see nothing in the record that 
shows anything other than joint liability.   
¶49 Therefore, the general rule under Fleming applies.  
Intentional tortfeasors RSM and Curtis Mallet must indemnify 
Murphy Desmond due to their joint liability.  But the Pierringer 
release signed with RSM and Curtis Mallet imputes the indemnity 
owed by them to the plaintiffs——including Sandy Shockley and 
Shockley Holdings.20  Fleming, 131 Wis. 2d at 131.  Thus, even 
though the jury found Murphy Desmond negligent, it owes no 
damages to Sandy Shockley and Shockley Holdings; the circuit 
court correctly dismissed their claims against Murphy Desmond.    
                                                 
20 Sandy Shockley and Shockley Holdings argue in passing 
that this rule is "unworkable and unjust," pointing to several 
jurisdictions that have abandoned it.  But they "take no 
position" on whether the rule should in fact be abandoned.  
Absent an argument asking to revisit the rule, we decline to do 
so. 
No. 
2020AP806   
 
26 
 
III.  CONCLUSION 
¶50 In the end, we find the Shockleys' four arguments 
unavailing.  We hold the circuit court properly admitted the 
fact of settlement into evidence for a limited purpose and 
denied the Shockleys' motion for a new trial based on the 
improper remark during closing.  Regarding the superseded 
complaint, we hold that, even if its admission was erroneous, it 
was harmless.  Finally, we hold that the circuit court correctly 
concluded Murphy Desmond is entitled to indemnification and 
therefore owes no damages to Sandy Shockley and Shockley 
Holdings. 
By the Court.—The decision of the court of appeals is 
affirmed. 
 
No.  2020AP806.akz 
 
1 
 
¶51 ANNETTE 
KINGSLAND 
ZIEGLER, 
C.J.   (dissenting).  
Wisconsin has a strong public policy encouraging litigants to 
voluntarily resolve their disputes through settlement agreements 
rather than the judicial process.  This policy is furthered by 
Wis. Stat. § 904.08, which prohibits the admission of settlement 
evidence to prove a claim or its amount, with some narrow 
exceptions 
for 
other 
purposes. 
 
Because 
the 
majority's 
interpretation of these exceptions swallows the rule and creates 
a back door for litigants to introduce evidence of Pierringer1 
releases for the prohibited purposes, I respectfully dissent.   
¶52 The circuit court in this case erroneously permitted 
Murphy Desmond to introduce settlement evidence as proof that 
the settling defendants were the "true culprits" and as proof 
that the Shockleys had already been fully compensated for their 
losses.  Murphy Desmond claims it introduced this evidence for a 
different purpose——to show that the settlement caused the 
Shockleys to have a "significant change in posture."  But such 
an exception would apply to every Pierringer release, swallowing 
the rule that settlement agreements are generally inadmissible 
and opening a back door for litigants to introduce settlement 
evidence for an improper purpose, as occurred here.  This error 
compounded when the circuit court erroneously permitted defense 
counsel to explicitly argue the settlement evidence was proof 
that the settling defendants were at fault rather than Murphy 
Desmond.  At that point, the settlement evidence and improper 
                                                 
1 Pierringer v. Hoger, 21 Wis. 2d 182, 124 N.W.2d 106 
(1963).  
No.  2020AP806.akz 
 
2 
 
argument so infected the trial that no jury instruction could 
save it.  I would reverse the court of appeals and remand for a 
new trial.    
I.  FACTUAL BACKGROUND 
¶53 The majority vastly undersells the extent to which 
Murphy Desmond's counsel exploited the settlement evidence at 
trial.  Defense counsel first discussed that evidence at length 
near the beginning of his opening statement:  
The first question is what are the factual 
questions that need to be resolved in this case?  And 
the first and single most important factual question 
that needs to be resolved is this:  Who did the 
Shockleys 
and 
the 
other 
Shockley 
Communications 
Corporation shareholders really look to for advice on 
the tax risks and tax advantages of this transaction?  
Closely related to that, and I think important to 
that, is the question that what does it mean that I'm 
now going to tell you that at the outset of this case 
the Shockleys not only sued my clients but they sued 
RSM McGladrey and they sued Curtis Mallet. 
And that's the first time you heard that, because 
it's a fact that they want to run away from as far as 
they can, as fast as they can.  They not only sued RSM 
McGladrey, Curtis Mallet, and the individuals who were 
associated with them, they not only alleged that, as 
they have alleged against us, that they were negligent 
in providing professional services to them, but they 
specifically alleged that each of those persons and 
entities defrauded them.  That they lied to them and 
misrepresented things to them.  And that in specific 
reliance 
upon 
the 
lies, 
the 
frauds, 
the 
misrepresentations that those two defendants made, 
they entered into this transaction.   
And after they made those allegations, they've 
now withdrawn them. They filed a new Complaint, a new 
paper to start this lawsuit, to continue this lawsuit, 
which is what I would like to call the make-pretend 
document. It's the document that pretends that -- 
No.  2020AP806.akz 
 
3 
 
[Plaintiff's counsel objects as argumentative and is 
overruled.] 
[Plaintiff's counsel] didn't tell you that, but 
they sued these other people, the ones they say now 
they didn't rely on, the ones they say were just sort 
of on the sideline, they sued them.  They claimed they 
defrauded them.  Not that they were careless but they 
frauded them.  Then they settled with them. And now 
the lawsuit they obviously want to present to you in 
this search for the truth we have here today is a 
lawsuit in which they now claim it's my clients who 
did this. 
¶54 Defense counsel later cross-examined Sandy Shockley 
and mentioned the settlement 13 times.  He later asked Terry 
Shockley, 
Your wife testified when she was on the stand last 
week that as a result of the settlement that was made 
with the other defendants, you ended up after expenses 
and so on out of the $13 million, you got between $6 
and $8 million being available from that settlement. 
¶55 Defense counsel also asked Jenny Johnson Ware, the 
Shockleys' lawyer from the IRS litigation, "How much money do 
you understand the Shockleys have sitting in a bank account 
somewhere as a result of the settlement with the other 
defendants."  He further asked if it was true that "the 
Shockleys have only paid [the IRS] $2 million" "[e]ven though 
they, according to Mrs. Shockley's testimony, have several 
millions of dollars left over from the settlement they had from 
the other defendants."   
¶56 Finally, defense counsel returned to the settlement 
and further emphasized its significance during closing argument:  
And [plaintiff's counsel] should be blushing, because 
he's the one who got up at the beginning of this trial 
and talked about this case as if they had never  
sued -- they had never accused McGladrey and Curtis 
No.  2020AP806.akz 
 
4 
 
Mallet of doing anything wrong.  Talked about this 
trial as if there was no issue in this case whatsoever 
about whether McGladrey and Curtis Mallet had done 
anything wrong.  Didn't tell you that they'd settled 
with Curtis Mallet and McGladrey.  Didn't tell you 
they got enormous amounts of money because they're the 
true culprits here, of course.  And didn't tell you 
that because they settled with them.  His clients had 
night and day changed their allegations to drop all 
the allegations against those people and now take the 
posture 
that 
he's 
taking 
now, 
that 
this 
is, 
essentially, all our fault.  Even though everything 
that his clients alleged against Curtis Mallet has 
been proven.  Even though the settlement, in my 
opinion, is an acknowledgment that they've been 
proven.  
(emphases added). 
¶57 The fact of the matter is Murphy Desmond heavily 
relied on the settlement evidence throughout the trial.  It was 
one of Murphy Desmond's most "important" pieces of evidence for 
resolving the question, "Who did the Shockleys . . . really look 
to for advice . . . ?"  The majority simply fails to grasp the 
extent to which the settlement pervaded the trial. 
II.  STANDARD OF REVIEW 
¶58 Though 
reviewing 
an 
evidentiary 
decision, 
we 
nonetheless review the circuit court's application of a statute.  
"The interpretation and application of a statute presents a 
question of law that this court decides independently of the 
circuit court," and "[i]t follows that this court decides 
whether the circuit court applied the proper legal standard 
under 
Wis. 
Stat. 
§ [904.08] 
in 
the 
first 
instance 
independently."  Seifert v. Balink, 2017 WI 2, ¶89, 372 
Wis. 2d 525, 888 N.W.2d 816.  
No.  2020AP806.akz 
 
5 
 
¶59 "We [also] review a circuit court's decision to deny a 
motion for a new trial under an erroneous exercise of discretion 
standard."  Id., ¶139.    
III.   ANALYSIS 
A.  Admission of Settlement Evidence. 
¶60 Under Wis. Stat. § 904.08, settlement evidence "is not 
admissible to prove liability for or invalidity of the claim or 
its amount."  This rule reflects "concerns that such evidence 
has marginal probative value that is categorically outweighed by 
the public policy of encouraging the settlement of disputes 
short of trial."  7 Daniel Blinka, Wisconsin Practice Series:  
Wisconsin Evidence § 408.1 (4th ed. 2022).  It is for this 
reason 
we 
have 
described 
the 
introduction 
of 
settlement 
evidence——particularly in cases of multi-defendant litigation——
as "a potentially incendiary device, one that could lead the 
jury to conclude that the plaintiffs have received ample 
compensation from the real malefactors and no further recovery 
is necessary."  Morden v. Continental AG, 2000 WI 51, ¶99 n.15, 
235 Wis. 2d 325, 611 N.W.2d 659. 
¶61 Our statutes do provide an exception to this general 
prohibition on settlement evidence, permitting circuit courts to 
"not require exclusion when the evidence is offered for another 
purpose, such as proving bias or prejudice of a witness."  Wis. 
Stat. § 904.08.  However, this exception must be narrowly 
construed and applied cautiously.  For example, we concluded in 
Johnson v. Heinz, 73 Wis. 2d 286, 243 N.W.2d 815 (1976), that 
the exception does not "allow[] testimony concerning details of 
No.  2020AP806.akz 
 
6 
 
the compromise settlement . . . for the purpose of showing bias 
or prejudice . . . . To allow the admission of details including 
the amount of settlement as an exception to the rule would 
defeat the purpose of the rule and render it meaningless."  Id. 
at 300.  
¶62 The majority erroneously endorses the interpretation 
of Wis. Stat. § 904.08 expressed in Morden, which permits 
admission of settlement evidence where "the posture of a 
settling party was significantly different as a result of the 
settlement."  Morden, 235 Wis. 2d 325, ¶83.  Not only does this 
exception have no basis in the statutory text, but it swallows 
§ 904.08's general exclusion of settlement evidence in all cases 
involving a Pierringer release.  
¶63 A Pierringer release is a kind of settlement in cases 
involving multiple defendants.  It "operates as a satisfaction 
of that portion of the plaintiff's cause of action for which the 
settling joint tortfeasor is responsible, while at the same time 
reserving the balance of the plaintiff's cause of action against 
a nonsettling tortfeasor."  Teske v. Wilson Mut. Ins. Co., 2019 
WI 62, ¶11 n.6, 387 Wis. 2d 213, 928 N.W.2d 555 (quoting Imark 
Indus., Inc. v. Arthur Young & Co., 148 Wis. 2d 605, 621, 436 
N.W.2d 311 (1989)).  Such agreements permit settling defendants 
to terminate their involvement in litigation completely because 
Pierringer releases "provide[] that the plaintiff 'will assume 
or satisfy that portion of the liability that is determined to 
be the responsibility of the settling joint tortfeasor.'"  Id. 
(quoting Imark Indus., 148 Wis. 2d at 621).  This ensures 
No.  2020AP806.akz 
 
7 
 
settling 
defendants 
will 
not 
have 
to 
litigate 
against 
nonsettling defendants to determine contribution.  That is left 
to the plaintiff and the nonsettling defendants.  Pierringer 
releases 
are 
therefore 
attractive 
because 
they 
end 
all 
involvement in litigation for settling defendants.  
¶64 With regard to Pierringer releases, the "significant 
change 
in 
posture" 
exception 
swallows 
the 
rule. 
 
Every 
Pierringer 
release 
substantially 
changes 
the 
plaintiff's 
posture.  The plaintiff takes on the responsibility of arguing 
that the nonsettling defendants are not entitled to contribution 
in every single case involving a Pierringer release.  Even the 
circuit court in this case recognized what is essentially a per 
se rule of admissibility in settlement cases:  "That's the whole 
point of a Pierringer.  The burden shifts."  By expansively 
construing the exception to include a "significant change in 
posture," the majority makes evidence of Pierringer releases 
generally admissible and removes plaintiffs' incentives to 
settle.  The majority therefore "defeat[s] the purpose of the 
rule and render[s] it meaningless."  Johnson, 73 Wis. 2d at 300. 
¶65 Other courts too have recognized the dangers of 
broadly construing the exception to the exclusion of settlement 
evidence in this context.  Rule 408 of the Federal Rules of 
Evidence, similar to our own statute, prohibits admission of 
settlement evidence, except "[t]he court may admit this evidence 
for another purpose, such as proving a witness's bias or 
prejudice."  As one court observed, "Despite such a sweeping 
statement, care should be taken that an indiscriminate and 
No.  2020AP806.akz 
 
8 
 
mechanistic application of this 'exception' to Rule 408, does 
not 
result 
in 
undermining 
the 
rule's 
public 
policy 
objective . . . ."  Young v. Verson Allsteel Press Co., 539 
F. Supp. 193, 196 (E.D. Pa. 1982) (quoting 2 J. Weinstein & M. 
Berger, Weinstein's Evidence § 408(05) (1978)) (concluding an 
argument that "introducing evidence of settlement is not to 
prove 
the 
validity 
or 
invalidity 
of 
the 
claim 
or 
its 
amount, . . . even if true, would not signal an end to our 
inquiry").  It is true that "state courts have charted various 
courses in the area, ranging from, complete disclosure of the 
fact of settlement with a joint tortfeasor and the amount, to 
prohibition of any disclosure of such facts."  Id.  However, 
especially in light of comparative negligence doctrine, "the 
recent trend among the states in interpreting their respective 
interrelated 
comparative 
negligence 
and 
joint 
tortfeasor 
contribution statutes is to place any evidence of a plaintiff's 
settlement with a joint tortfeasor beyond the jury's grasp."  
Id. (collecting cases).  
¶66 Under more appropriately exacting scrutiny, it is 
clear that the evidence of the Shockleys' settlement agreement 
was improperly admitted.  The circuit court explained that it 
was "admitting [the settlement evidence] on the issues of the 
credibility of plaintiffs and their overall posture in the 
lawsuit."  Though questionable whether the court should have 
admitted the settlement evidence on the issue of credibility, 
admitting it to show the Shockleys' "overall posture" was 
erroneous.   
No.  2020AP806.akz 
 
9 
 
¶67 By discussing how the settlement evidence affected the 
"posture" of the plaintiffs, defense counsel used the settlement 
evidence both to "prove liability for . . . the claim [and] its 
amount."  Wis. Stat. § 904.08.  In opening argument, defense 
counsel referred to the settlement evidence as "important" to 
deciding "the first and single most important factual question," 
which was, "Who did the Skockleys . . . really look to for 
advice on the tax risks and tax advantages of this transaction?"  
Not only did defense counsel use this "significant change in 
posture" exception to prove that the Shockleys actually relied 
on the settling defendants, but he also used it to prove the 
amount of the claims by demonstrating that the Shockleys had 
already been fully compensated for their damages.2  He asked 
several witnesses about the amount of settlement, noting that 
the Shockleys "have several millions of dollars left over from 
the settlement."  All of this was accomplished under the guise 
of demonstrating the Shockleys' "significant change in posture," 
which the statute prohibits.  
¶68 This case illustrates that the judicially-created 
"significant change in posture" exception to Wis. Stat. § 904.08 
is a loophole permitting litigants to present settlement 
evidence for the very purposes the rule explicitly prohibits.  
Such an exception to the general rule that settlement evidence 
                                                 
2 The majority repeatedly states that it was the Shockleys 
who initially introduced the settlement amount.  Majority op., 
¶¶16, 26.  The majority appears to confuse that initial 
introduction with Murphy Desmond's later introducing it to prove 
the amount of the Shockleys' claim, which Wis. Stat. § 904.08 
explicitly prohibits.  
No.  2020AP806.akz 
 
10 
 
is inadmissible swallows the rule, making evidence of Pierringer 
releases admissible in every instance.  The circuit court 
erroneously exercised its discretion by admitting the settlement 
evidence under this exception.   
B.  Improper Argument 
¶69 Even if the circuit court did properly admit the 
settlement 
evidence——which 
it 
did 
not——the 
circuit 
court 
erroneously exercised its discretion by not granting a new 
trial. 
¶70 As an initial matter, defense counsel's remarks during 
closing 
argument 
were 
improper, 
and 
the 
circuit 
court 
erroneously exercised its discretion by overruling the objection 
to those remarks.  Defense counsel argued to the jury that 
plaintiffs' counsel "[d]idn't tell you that they'd settled with 
Curtis Mallet and McGladrey.  Didn't tell you they got enormous 
amounts of money because they're the true culprits here." 
(emphasis added).  He even said that the settlement "is an 
acknowledgment" that "everything [the Shockleys] alleged against 
Curtis Mallet has been proven."   
¶71 It is hard to imagine a more direct way defense 
counsel 
could 
have 
argued 
that 
the 
settlement 
"prove[d] 
liability or invalidity of the claim or its amount."  Wis. Stat. 
§ 904.08.  Yet, the circuit court found this line of argument 
proper because the circuit court "thought his argument wasn't 
that it was evidence of what their liability is.  It was 
evidence of what you thought their liability was.  And that's 
the whole point is the credibility of the plaintiffs' case."  
No.  2020AP806.akz 
 
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This 
explanation 
demonstrates 
that 
the 
circuit 
court 
fundamentally misunderstood both Murphy Desmond's case and the 
rules of Wis. Stat. § 904.08.  The circuit court erroneously 
exercised its discretion by permitting this line of argument.  
¶72 In any event, the majority concludes the circuit court 
properly denied the request for a new trial because the 
"improper comment amounted to a single dark cloud on an 
otherwise sunny day."  Majority op., ¶34.  Not so.  The improper 
comment was instead the last jolting lightning bolt at the end 
of a long storm.  The circuit court and the majority examined 
the improper comment from the perspective of a person who 
listened to the closing arguments and nothing else.  But the 
jury sat through a ten-day-long trial, during which defense 
counsel referenced the settlement agreement relentlessly.  He 
promised the jury during opening statements that the settlement 
evidence would be "important" for determining who was really at 
fault, and he brought it full circle in closing argument.  In 
context, the majority's characterization of the comment as a 
"single dark cloud" is purely fanciful.    
¶73 The circuit court's instructions to the jury do not 
change the fact that this improper line of argument prejudiced 
the Shockleys.  It is true that "[w]hen a circuit court gives a 
proper cautionary instruction, appellate courts presume that the 
jury followed that instruction and acted in accordance with the 
law."  State v. Gary M.B., 2004 WI 33, ¶33, 270 Wis. 2d 62, 676 
N.W.2d 475.  However, "in a case where there is a good reason to 
believe that injury has been done to the adverse party by the 
No.  2020AP806.akz 
 
12 
 
introduction 
of 
the 
improper 
testimony 
[or 
argument], 
notwithstanding the instruction of the court to disregard it, [] 
a new trial should be ordered."  State Bank of Wis. v. Dutton, 
11 Wis. 371, 373–74 (1860).   
[T]here may be cases in which the [improper evidence 
or argument] which has been introduced is of a nature 
so well adapted to make such an impression on the 
minds of the jury, that instructions to disregard it 
cannot well have their legitimate effect; and there 
may be cases where, after the admission of such 
[evidence or argument], the result of the trial 
indicates that it must have had an improper operation. 
Id. at 373.  This is one such case.  Defense counsel made the 
settlement agreement a central part of the case from the get-go, 
referencing it wherever possible and intimating to the jury that 
the settling defendants were at fault.  Given this steady 
drumbeat throughout trial, it is unsurprising that the jury 
found RSM and Curtis Mallet to have a combined amount of 
negligence six times greater than that of Murphy Desmond.  It 
therefore 
"'affirmatively 
appear[s]' 
that 
the 
remarks 
prejudiced" the Shockleys, and the circuit court erroneously 
exercised its discretion by not granting a new trial.  Seifert, 
372 Wis. 2d 525, ¶139 (quoting Wausau Underwriters Ins. Co. v. 
Dane County, 142 Wis. 2d 315, 329–50, 417 N.W.2d 914 (Ct. App. 
1987)).   
IV.  CONCLUSION 
¶74 Parties attempting to resolve their disputes without 
turning to the judicial process need assurance that those 
attempts will not later be used against them.  This is 
especially true for plaintiffs entering Pierringer releases in 
No.  2020AP806.akz 
 
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multi-defendant litigation, as they expect to go to trial with 
other 
nonsettling 
defendants. 
 
The 
majority 
reduces 
the 
assurance in Wis. Stat. § 904.08 to nothing more than a 
parchment barrier, permitting settlement evidence in this case 
to be admitted for the very purposes the statute prohibits under 
the guise of demonstrating a "significant change in posture."  
The majority compounds this error by minimizing the improper 
comments during closing argument and ignoring their context.   
¶75 For these reasons, I respectfully dissent.   
¶76 I am authorized to state that Justices PATIENCE DRAKE 
ROGGENSACK and REBECCA GRASSL BRADLEY join this dissent.  
 
No.  2020AP806.akz 
 
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