Opinion ID: 2232898
Heading Depth: 3
Heading Rank: 2

Heading: Laches tests

Text: ¶ 19 Wisconsin courts have used various tests for laches without explaining their differences or why they have used the tests that were chosen. The most commonly used test has three elements, but the elements are not always consistently stated. For example, in Lohr they are stated as: (1) unreasonable delay, (2) lack of knowledge of and acquiescence in the course of events by the party asserting laches and (3) prejudice to the proponent of the defense. Lohr, 174 Wis.2d at 477, 497 N.W.2d 730. The first element in Lohr is attributed to the inaction of the claimant and the second and third elements are applied to the person asserting laches as a defense. Id. ¶ 20 In Schafer v. Wegner, 78 Wis.2d 127, 254 N.W.2d 193 (1977), we stated the same three elements as, (1) unreasonable delay, (2) lack of knowledge on the part of the party asserting the defense that the other party would assert the right on which he bases his suit, and (3) prejudice to the party asserting the defense in the event the action is maintained. Id. at 132, 254 N.W.2d 193 (citing Schneider Fuel & Supply Co. v. West Allis State Bank, 70 Wis.2d 1041, 1053, 236 N.W.2d 266 (1975)). More recently we applied this same three-element analysis in Sawyer v. Midelfort, 227 Wis.2d 124, 159, 595 N.W.2d 423 (1999). In each case, the first element is attributed to inaction of the claimant and the second and third elements to the party who raised a laches defense. ¶ 21 Wisconsin courts have also used a four-element test that requires: an unreasonable delay must occur, the plaintiff must know the facts and take no action, the defendant must not know the plaintiff would assert the right on which the suit is based, and prejudice to the defendant must occur. Riegleman v. Krieg, 2004 WI App 85, ¶ 22, 271 Wis.2d 798, 679 N.W.2d 857 (citing Policemen's Annuity & Benefit Fund of Milwaukee v. City of Milwaukee, 2001 WI App 144, ¶ 20, 246 Wis.2d 196, 630 N.W.2d 236). In Riegleman, the court applied the four-element test to determine whether a chiropractor's action to collect for services was precluded. The second element set out in Riegleman, whether the claimant knew the facts that gave rise to his claim and yet took no action, has been subsumed into the analysis of whether the delay in bringing the claim was unreasonable. Sawyer, 227 Wis.2d at 160, 595 N.W.2d 423 (concluding that a delay cannot be unreasonable until the claimant had, or should have had, knowledge that a defendant's acts were a cause of claimant's injuries). ¶ 22 Another frequently used laches test has only two elements: (1) unreasonable delay by the claimant and (2) prejudice to the party raising the laches defense. [4] Evans, 273 Wis.2d 192, ¶ 49, 682 N.W.2d 784. ¶ 23 In 1984, in Neylan v. Vorwald, 121 Wis.2d 481, 360 N.W.2d 537 (Ct.App.1984), the court of appeals introduced the concept of actual prejudice in regard to the second element of a two-element laches test. Neylan involved a motion to set aside the dismissal of Neylan's claim, which dismissal had been entered one year earlier without notice. Id. at 485, 360 N.W.2d 537. Laches was raised by Vorwald. In introducing the concept of actual prejudice, the court of appeals tied actual prejudice to short delays in bringing claims. Id. at 491, 360 N.W.2d 537. Prejudice to defendants resulting from unreasonable delay may be presumed ... but in cases where delay is more moderate or excusable, the need to show actual prejudice is proportionally greater.... Id. at 491 n. 5, 360 N.W.2d 537 (citing Lyell Theatre Corp. v. Loews Corp., 682 F.2d 37, 43 (2d Cir. 1982)). ¶ 24 The next time the concept of actual prejudice appears is in the two-element test used in McMillian v. Dickey, where laches was raised to a petition for habeas corpus. Citing Baxter v. Estelle, 614 F.2d 1030 (5th Cir.1980), the court of appeals said, [T]he state must demonstrate that it must suffer actual prejudice from the delay in its ability to respond to the grounds upon which habeas is sought. McMillian, 132 Wis.2d at 281 n. 14, 392 N.W.2d 453 (citing Baxter, 614 F.2d at 1032-33 & n. 2). However, Baxter involved federal habeas that differs from the circumstances in which state habeas will lie, [5] and Baxter does not use the term actual prejudice, although it does conclude that prejudice was shown. Baxter, 614 F.2d at 1032-33. ¶ 25 In Smalley, again in the context of a habeas petition, the court of appeals employed a two-element test that requires that actual prejudice be shown by the state when it raises laches to a habeas petition. Smalley, 211 Wis.2d at 800, 565 N.W.2d 805 (citing McMillian, 132 Wis.2d at 281 n. 14, 392 N.W.2d 453). While Smalley refers to laches and uses laches terminology, it appears to have conflated its analysis of the habeas petition's timeliness [6] with the unreasonable delay element of laches. Both laches and habeas petitions seek equitable relief, and they have some similar principles. For example, equitable remedies are not available to one whose own inaction results in the harm. See State Bank of Drummond v. Christophersen, 93 Wis.2d 148, 160, 286 N.W.2d 547 (1980) (reviewing an appeal of a foreclosure judgment modification). While the analysis of Smalley's delay was prefaced with an explanation of laches principles, [7] the Smalley decision actually rests on the application of habeas principles. [8] For example, Smalley concluded by explaining that Smalley's claim was precluded by the insufficiency of the habeas petition itself. [9] The foundation for the decision in Smalley becomes readily apparent when the decision places the burden of proof for timeliness of the petition on Smalley, which is in accord with reviewing timeliness in regard to a habeas petition. [10] Smalley, 211 Wis.2d at 802 n. 7, 565 N.W.2d 805. ¶ 26 In Evans, where laches was not raised as an affirmative defense, but where a Knight petition [11] remained a possibility, we discussed a two-element test for laches and appeared to adopt the court of appeals statement that the state must show actual prejudice when it raises laches as an affirmative defense to a habeas as petition. Evans, 273 Wis.2d 192, ¶ 49, 682 N.W.2d 784. ¶ 27 However, in Prihoda, which addressed Prihoda's motion to vacate a clerical correction in sentencing, Prihoda raised laches to the clerical correction. Prihoda, 239 Wis.2d 244, ¶ 35, 618 N.W.2d 857. There, we employed a three-element analysis that did not require Prihoda to show actual prejudice. Instead, we said that Prihoda must prove: (1) unreasonable delay by the state; (2) his lack of knowledge that the state would make a clerical correction in his sentence; and that (3) he suffered prejudice due to the delay. Id., ¶ 37. ¶ 28 Prihoda, Sawyer, Lohr and Schafer all employ a three-element test where the first element is unreasonable delay in bringing the claim and the other two elements apply to the party asserting laches: lack of knowledge (that the claim would be brought) and effect (prejudice). In Neylan, McMillian, Smalley and Evans, the first element is the same, unreasonable delay, but the second element of the two-element analysis is set out as actual prejudice. When the delay is not extensive, the movant's lack of knowledge that the claim would be brought is important in assessing prejudice. Neylan, 121 Wis.2d at 491 n. 5, 360 N.W.2d 537. Stated otherwise, actual prejudice includes the concept that the party raising laches did not have knowledge that the claim would be brought and that he suffered prejudice because of the delay in bringing the claim. ¶ 29 Because it may be difficult to quantify actual prejudice, we conclude that the three-element analysis of Sawyer and Prihoda provides the better analytic framework for assessing a laches defense than does the two-element analysis set out in McMillian, Smalley and Evans. Carefully applied to the facts, assessing whether a party raising laches did not have knowledge that the claim would be brought will permit the circuit court to more fully apprise the effect of a claim that has been unreasonably delayed. For example, if the State had knowledge that Coleman would bring his claim of ineffective appellate counsel, but destroyed all the records that it possessed that were relevant to that claim, the State might be prejudiced in defending against the claim, but it would nevertheless fail on its laches defense.