Court Opinion

ID: 9399174
Source: CourtListenerOpinion
Date Created: 2023-06-02 13:10:57.146231+00
Date Added: 2024-06-11T17:18:44.574193
License: Public Domain

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                                       (2021 – unpublished)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
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.

                               2
                                                                  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-
                                                               FILED
            Petitioners,
                                                           JUN 2, 2023
Terence F. Kelly,
                                                             Sheila T. Reiff
                                                          Clerk of Supreme Court
            Intervenor,

      v.

Murphy Desmond SC, Robert A. Pasch and Westport
Insurance Company,

            Defendants-Respondents.

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

       ¶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.

       The three shareholders are Sandy Shockley, Terry Shockley,
       1

and Shockley Holdings Limited Partnership, Inc. (Shockley
Holdings).

       "A Pierringer release operates as a satisfaction of that
       2

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).

                                               2
                                                                                  No.        2020AP806

      ¶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

      3Evidence of settlement amounts——which we have said is not
permitted——was introduced by the Shockleys, not Murphy Desmond,
and is not challenged here.
      4All subsequent references to the Wisconsin Statutes are to
the 2021-22 version.

                                                3
                                                                                  No.     2020AP806

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
                                                4
                                                                             No.       2020AP806

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.

                                               5
                                                                   No.    2020AP806

     ¶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.

                                       6
                                                                         No.     2020AP806

       ¶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

       The Honorable Richard G. Niess of the Dane County Circuit
       8

Court presided.

                                             7
                                                              No.     2020AP806

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.

                                     8
                                                                        No.     2020AP806

     ¶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.

                                           9
                                                                            No.    2020AP806

                                   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.

       The Shockleys also devote half a sentence to the argument
       10

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.

       The dissent's warnings that this statutory exception
       11

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.

                                            10
                                                                     No.    2020AP806

       ¶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.

                                           11
                                                                               No.   2020AP806

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

       The dissent suggests Morden created a new "significant
      13

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.

                                              12
                                                                      No.   2020AP806

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
                                          13
                                                                           No.     2020AP806

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.

                                            14
                                                                       No.     2020AP806

       ¶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.

                                             15
                                                                     No.   2020AP806

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
                                           16
                                                                                  No.    2020AP806

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.

       Counsel's statement is similar to an argument made in a
       16

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.

       State v. Burns, 2011 WI 22, ¶48, 332 Wis. 2d 730, 798
       17

N.W.2d 166.

                                                17
                                                                      No.    2020AP806

        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

       Murphy Desmond contends the Shockleys forfeited this
      18

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.

                                             18
                                                                       No.    2020AP806

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
                                            19
                                                                              No.     2020AP806

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).
                                              20
                                                                                  No.    2020AP806

       ¶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
                                                 21
                                                                          No.       2020AP806

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
                                           22
                                                                                  No.     2020AP806

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

       We adopted this rule in the interest of judicial economy—
       19

—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).

                                                23
                                                                       No.   2020AP806

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.
                                           24
                                                                     No.    2020AP806

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.

     20Sandy 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.

                                          25
                                                                                  No.    2020AP806

                                     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.

                                               26
                                                                      No.    2020AP806.akz

     ¶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).

                                             1
                                                          No.   2020AP806.akz

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 --

                                      2
                                                                  No.   2020AP806.akz

    [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
                                         3
                                                                          No.    2020AP806.akz

       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.

                                                4
                                                                      No.    2020AP806.akz

       ¶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

                                               5
                                                                   No.   2020AP806.akz

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

                                           6
                                                                            No.    2020AP806.akz

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

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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.

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     ¶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.

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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."

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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

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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

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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.

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