Opinion ID: 2215226
Heading Depth: 4
Heading Rank: 2

Heading: Waives

Text: ¶ 33 The term, waives or waiver, functions differently in different circumstances. [8] For example, under Wisconsin's rules of civil procedure, certain affirmative defenses are waived unless raised in the first responsive pleading or raised by motion made prior to answering. See Wis. Stat. § 802.06(2). [9] This is a statutorily defined waiver. Although we are interpreting a statute, Wis. Stat. § 421.401(2), the legislature has not defined what acts constitute waiver under § 421.401(2). ¶ 34 Waiver has been interpreted under common law in a number of circumstances that have required various showings depending on the context in which the claimed waivers arose. For example, the waiver of a fundamental constitutional right requires a knowing, intelligent and voluntary waiver. See State v. Klessig, 211 Wis.2d 194, 204, 564 N.W.2d 716 (1997) (requiring a knowing, intentional and voluntary waiver of the right to counsel). The Klessig standard is a high standard that involves an inquiry by the court before which the potential waiver is occurring to determine whether the parameters of waiver are met. State v. Weed, 2003 WI 85, ¶ 39, 263 Wis.2d 434, 666 N.W.2d 485. ¶ 35 We recently discussed common law waiver in State v. Ndina, 2009 WI 21, 315 Wis.2d 653, 761 N.W.2d 612. There we examined whether Ndina had waived his Sixth Amendment right to a public trial. Id., ¶ 2. In so doing, we explained the distinction between forfeiture and waiver. We noted that cases sometimes use the words `forfeiture' and `waiver' interchangeably [; however,] the two words embody very different legal concepts. Id., ¶ 29. `Whereas forfeiture is the failure to make the timely assertion of a right, waiver is the intentional relinquishment or abandonment of a known right.' Id. (quoting United States v. Olano, 507 U.S. 725, 733, 113 S.Ct. 1770, 123 L.Ed.2d 508 (1993) (internal quotations and citations omitted)); see also Rao v. WMA Sec., Inc., 2008 WI 73, ¶ 102, 310 Wis.2d 623, 752 N.W.2d 220 (Prosser, J., dissenting) (explaining that `waiver' is the intentional relinquishment or abandonment of a known right and forfeiture is a failure to timely assert a right); State v. Kelty, 2006 WI 101, ¶¶ 62-63, 294 Wis.2d 62, 716 N.W.2d 886 (Abrahamson, C.J., concurring) (acknowledging the distinction between forfeiture and waiver); State v. Huebner, 2000 WI 59, ¶ 11 n. 2, 235 Wis.2d 486, 611 N.W.2d 727 (same). [10] ¶ 36 Establishing that a party knew of the right at issue is essential to establishing waiver. [I]t must be shown by the party claiming a waiver that the person against whom the waiver is asserted had at the time knowledge . . . of the existence of his rights. . . . Ignorance of a material fact negatives a waiver. Waiver cannot be established by a consent given under a mistake of fact. Davies v. J.D. Wilson Co., 1 Wis.2d 443, 467, 85 N.W.2d 459 (1957) (quoting 56 Am. Jur. Waiver § 14). Stated differently, a valid waiver that intentionally relinquishes a right must be done with actual knowledge of the right being waived. ¶ 37 We conclude that waiver under Wis. Stat. § 421.401(2) requires the intentional relinquishment of a known right. [11] The right being waived here is a defendant's right to proper venue, coupled with the right of dismissal if the case is not properly venued. See Wis. Stat. § 421.401(1)(a)-(c); § 421.401(2)(b). Accordingly, to establish a valid waiver, it must be proved by the party claiming waiver that the defendant knew the place of proper venue and knew that he had the right to dismissal of the case when it was not properly venued. ¶ 38 In addition to knowledge of the place of proper venue and the right to dismissal of an improperly venued action, a plaintiff must also prove that the rights to proper venue and dismissal of an improperly venued action were intentionally relinquished. Intentional relinquishment may be demonstrated by an express statement or by conduct. Fraser v. Aetna Life Ins. Co., 114 Wis. 510, 523-24, 90 N.W. 476 (1902); see also Estate of Ross, 181 Wis. 125, 134, 194 N.W. 151 (1923). Intentional relinquishment by conduct occurs when a party's conduct is so inconsistent with a purpose to stand upon one's rights as to leave no room for a reasonable inference to the contrary. Fraser, 114 Wis. at 523-24, 90 N.W. 476. Stated differently, a party intentionally relinquishes a known right by affirmative acts unambiguously demonstrating that his conduct is intentionally undertaken and meant to give up the right to proper venue. ¶ 39 Applying these principles here, we conclude that a defendant may waive the improper venue by filing a written stipulation with the court or by oral stipulation made in open court and entered in the record, which demonstrates that the defendant is aware of his right to proper venue and that he intends to relinquish this right rather than having the action dismissed. This establishes waiver by express statement. We further conclude that a defendant may waive the right to proper venue by affirmative acts that unambiguously demonstrate that he knows the place of proper venue, as well as the right to dismissal of the improperly venued action against him, and that he nonetheless intends to relinquish such rights. This establishes waiver by conduct. ¶ 40 Our interpretation of waives is supported by the plain meaning of Wis. Stat. § 421.401(2), which sets no time limitation for objections to venue. That is, unlike Wis. Stat. § 801.51, which limits the time during which a defendant may challenge venue thereunder, the Wisconsin Consumer Act's venue provision does not contain a time limit. Moreover, § 421.401(2) states, [w]hen it appears from the return of service of the summons or otherwise  that the venue is improper in an action arising from a consumer credit transaction, the court must dismiss the action unless the defendant appears and waives the defect in venue. (Emphasis added.) This language establishes that the issue of improper venue is to be addressed whenever it is raised by a defendant, not only when it is raised at the outset of litigation. Accordingly, our interpretation correctly places the onus on plaintiffs, typically creditors, to properly venue an action or risk dismissal when the defendant brings the improper venue to the circuit court's attention. ¶ 41 Although the plain meaning of Wis. Stat. § 421.401(2) of the Wisconsin Consumer Act supports our interpretation, we observe that the legislative history of the venue provision governing consumer credit transactions also supports our conclusion that objections to venue need not be made at the initial stage of the litigation. See Kalal, 271 Wis.2d 633, ¶ 51, 681 N.W.2d 110. The legislative history confirms that we properly rejected Brunton's assertion that improper venue is waived if not challenged in a defendant's answer or first responsive pleading. In 1983, the legislature created the specialized venue provisions for actions arising from consumer credit transactions. 1983 Wis. Act 389; see Wis. Stat. § 425.501(2) (1983-84). The language of § 425.501(2) explicitly required such venue challenges to be brought at the outset of litigation. It stated: When, in any action under this chapter, it appears from the return of service of the summons or otherwise that the county in which the action is pending is not a proper place of trial of such action under this section, the court shall, on motion of a party or on its own motion, on the return day of the summons or prior to taking any other action on the case, determine the correctness of the venue. If venue is correct the case shall continue. If venue is not correct, the court shall dismiss the action unless the defendant appears and waives the improper venue. If the defendant does not appear and waive the improper venue, the court shall lack jurisdiction other than to dismiss the action. § 425.501(2) (1983-84) (emphasis added). ¶ 42 Then, in 1987, the legislature consolidated the venue provisions for actions arising from consumer credit transactions and consumer transactions in Wis. Stat. § 421.401(2). See 1987 Wis. Act 208. In 1987 Wis. Act 208, the legislature removed a portion of the venue provision; specifically, it removed the language requiring the court to determine whether venue was proper at the outset of the litigation. We note that there have not been any changes to the language of § 421.401(2) since 1987. We conclude that it is reasonable to infer that with removal of the directive to consider venue at the outset of the litigation, the legislature intended that the issue of improper venue in actions arising from consumer credit transactions be considered whenever it is raised. ¶ 43 Additionally, our conclusion that waiver under Wis. Stat. § 421.401(2) may be established by demonstrating a defendant's knowledge of the proper place of venue and the statutory right to dismissal of an action improperly venued and that he unambiguously intends to relinquish those rights furthers the purposes underlying the Wisconsin Consumer Act. See Wis. Stat. § 421.102(2)(b)-(c). For example, were we not to require the intentional relinquishment of a known right to proper venue, a merchant could file an action in a locale far distant from a customer's residence, thereby making defense of the action very difficult. The merchant could then ask the customer to agree to the venue by convincing the customer that it is customary to do so, or for some other reason that does not acknowledge the statutory right to dismissal of an improperly venued action. If a customer did not know the place of proper venue or that he or she could demand dismissal of the action, the customer may sign such an agreement waiving the improper venue to his or her detriment. ¶ 44 Our construction of the term waives, requiring the intentional relinquishment of the known right to proper venue, coupled with the right to dismissal of the case when venue is improper, will discourage sharp practices by merchants and protect customers, thereby comporting with the legislature's specific instructions. Wis. Stat. § 421.102(2)(b)-(c). ¶ 45 Our construction is also in accordance with the policies underlying a federal consumer credit protection act, policies with which we are instructed to coordinate our interpretations of the Wisconsin Consumer Act. Wis. Stat. § 421.102(2)(d). The Fair Debt Collection Practices Act (FDCPA) [12] is a federal consumer protection act contained in 15 U.S.C. § 1692 et seq. (2006). [13] Federal courts have interpreted claims of unfair debt collection practices through the lens of the `least sophisticated debtor' or `least sophisticated consumer' standard.' Gammon v. GC Servs. Ltd. P'ship, 27 F.3d 1254, 1257 (7th Cir.1994) (internal quotations omitted). The basic purpose of the least-sophisticated-consumer standard is to ensure that the FDCPA protects all consumers, the gullible as well as the shrewd. Clomon v. Jackson, 988 F.2d 1314, 1318 (2d Cir.1993). In regard to various levels of sophistication, the United States Supreme Court has opined: The fact that a false statement may be obviously false to those who are trained and experienced does not change its character, nor take away its power to deceive others less experienced. There is no duty resting upon a citizen to suspect the honesty of those with whom he transacts business. Laws are made to protect the trusting as well as the suspicious. Fed. Trade Comm'n v. Standard Educ. Soc'y, 302 U.S. 112, 116, 58 S.Ct. 113, 82 L.Ed. 141 (1937) (quoted in Clomon, 988 F.2d at 1318). ¶ 46 In Gammon, the United States Court of Appeals for the Seventh Circuit modified the least sophisticated consumer standard to the unsophisticated consumer to describe the hypothetical consumer whose reasonable perceptions will be used to determine if collection messages are deceptive or misleading. Gammon, 27 F.3d at 1257. It did so in order to continue to protect unsophisticated consumers while accounting for unrealistic or peculiar interpretations of collection letters. Id. In applying the unsophisticated consumer standard, the Seventh Circuit concluded, [t]he language in the collection letter [under review] appears to be cleverly drafted in order to insinuate what obviously cannot be stated directly. Id. at 1258. In so doing, it focused on the unfairness that was present and was to be eliminated under federal law. Id. Our interpretation of the waiver described in Wis. Stat. § 421.401(2) as requiring the intentional relinquishment of the known right to proper venue coupled with the statutory right to dismissal of the case when venue is improper, is consistent with federal policy. This is so because our interpretation will protect unsophisticated consumers by preventing them from inadvertently waiving the right to proper venue and dismissal of an action that is improperly venued.