LRBs0323/1
MLJ/TJD/KRP:all
2017 - 2018 LEGISLATURE
ASSEMBLY SUBSTITUTE AMENDMENT 2,
TO ASSEMBLY BILL 773
February 19, 2018 - Offered by Representative Born.
AB773-ASA2,2,2 1An Act to renumber 802.06 (1), 804.01 (2) (e) 1., 893.93 (1) (a) and 893.93 (1) (b);
2to renumber and amend 804.09 (2) (a); to amend 218.0125 (7), 218.0126,
3628.46 (1), 801.01 (2), 804.01 (1), 804.01 (2) (a), 804.01 (2) (e) 2., 804.01 (2) (e)
43., 804.01 (3) (a) 2., 804.01 (4), 804.09 (2) (b) 1., 804.12 (1) (a), 893.53, 893.89 (1)
5and 893.89 (3) (b); to repeal and recreate 803.08 (11); and to create 177.30
6(6) and (7), 802.06 (1) (b), 804.01 (2) (am), 804.01 (2) (bg), 804.01 (2) (e) 1g.,
7804.01 (8), 804.045, 804.08 (1) (am), 804.09 (2) (a) 3., 893.93 (1) (cm) and 893.93
8(1m) (intro.) of the statutes; relating to: discovery of information in court
9proceedings; procedural requirements relating to class actions; the statute of
10limitations for certain civil actions; agreements by the secretary of revenue to

1allow third-party audits and estimates based on statistical sampling related
2to unclaimed property; and interest rates for overdue insurance claims.
Analysis by the Legislative Reference Bureau
Discovery procedures
This substitute amendment makes certain changes to discovery procedure in
court proceedings. Under the substitute amendment, the court must limit the
frequency or extent of discovery if it determines that the discovery sought is
cumulative or duplicative, or can be obtained from some other source that is more
convenient, less burdensome, or less expensive or that the burden or expense of the
proposed discovery outweighs its likely benefit or is not proportional to the claims
and defenses at issue. In addition, the substitute amendment limits the type of
electronic information that can be discovered such that a court may not require a
party to keep or provide the following types of electronic information: data that
cannot be retrieved without substantial additional programming or without
transforming it into another form before search and retrieval can be achieved;
backup data that are substantially duplicative of data that are more accessible
elsewhere; legacy data remaining from obsolete systems that are unintelligible on
successor systems; and any other data that are not available to the producing party
in the ordinary course of business and that the party identifies as not reasonably
accessible because of undue burden or cost.
The substitute amendment also creates a mandatory disclosure requirement
that requires a party, without awaiting a discovery request, to disclose any
agreement under which any person, other than an attorney who is permitted to
charge a contingent fee for representing a party, has a right to receive compensation
that is contingent on and sourced from any proceeds of the civil action.
class actions
In December 2017, the supreme court issued an order that creates detailed
procedures relating to class actions where previously Wisconsin had few procedural
requirements relating to class actions. The procedures implemented in the order
closely track the federal procedures for filing and maintaining a class action. This
substitute amendment amends certain aspects of appellate procedure for a class
action.
statute of limitations
Under current law, the statute of limitations for an action for injury to character
is six years. Under the substitute amendment, the statute of limitations is shortened
to three years.
Under current law, the statute of limitations for an action for injury resulting
from improvements to real property is ten years. Under the substitute amendment,
the statute of limitations is shortened to seven years.
Under current law, the statute of limitations for an action upon a liability
created by statute when a different limitation is not prescribed by law and for an

action for relief on the ground of fraud is six years. Under the substitute amendment,
the statute of limitations is shortened to three years.
third-party tax audits
This substitute amendment prohibits the secretary of revenue from entering
into an agreement to allow a person to engage in an audit on a contingent fee basis
of another person's documents or records in order to administer the unclaimed
property law or to purchase information arising from the audit, except for
information received from the federal government. However, if the person whose
documents or records are audited is not domiciled in this state, the secretary may
enter into such a contingent fee agreement if the amount of the contingent fee does
not exceed 12 percent of the total amount of unclaimed property that is disclosed by
the audit.
The substitute amendment also prohibits the secretary from entering into an
agreement as part of an effort to administer the unclaimed property law that allows
a person engaging in an audit of another person's documents or records to use
statistical sampling to estimate the liability of that person unless that person
consents to the use of an estimate.
Timely payment of claims
This substitute amendment changes the interest rate that an insurer must pay
for overdue insurance claims from 12 percent to 7.5 percent. Current law requires
an insurer to promptly pay every insurance claim and, generally, a claim is
considered overdue if the claim is not paid within 30 days after the insurer has
written notice of the fact and amount of a covered loss.
The people of the state of Wisconsin, represented in senate and assembly, do
enact as follows:
AB773-ASA2,1 1Section 1. 177.30 (6) and (7) of the statutes are created to read:
AB773-ASA2,3,62 177.30 (6) (a) Except as provided in pars. (b) and (c), the administrator may not
3enter into a contract or other agreement to allow any person to engage in an audit
4on a contingent fee basis of another person's documents or records as part of an effort
5to administer this chapter or to purchase information or documents arising from the
6audit.
AB773-ASA2,4,27 (b) If a person whose documents or records are audited is not domiciled in this
8state, the administrator may enter into a contract or agreement described under par.
9(a) related to the person if the amount of the contingent fee under the contract or

1agreement does not exceed 12 percent of the total amount of property reportable and
2deliverable under this chapter that is disclosed by the audit.
AB773-ASA2,4,43 (c) This subsection does not apply to information received from the federal
4government.
AB773-ASA2,4,8 5(7) The administrator may not enter into a contract or other agreement as part
6of an effort to administer this chapter that allows a person that is engaging in an
7audit of another person's documents or records to use statistical sampling to estimate
8the other person's liability unless the other person consents to the use of an estimate.
AB773-ASA2,2 9Section 2. 218.0125 (7) of the statutes is amended to read:
AB773-ASA2,4,2310 218.0125 (7) A claim made by a franchised motor vehicle dealer for
11compensation under this section shall be either approved or disapproved within 30
12days after the claim is submitted to the manufacturer, importer or distributor in the
13manner and on the forms the manufacturer, importer or distributor reasonably
14prescribes. An approved claim shall be paid within 30 days after its approval. If a
15claim is not specifically disapproved in writing or by electronic transmission within
1630 days after the date on which the manufacturer, importer or distributor receives
17it, the claim shall be considered to be approved and payment shall follow within 30
18days. A manufacturer, importer or distributor retains the right to audit claims for
19a period of one year after the date on which the claim is paid and to charge back any
20amounts paid on claims that are false or unsubstantiated. If there is evidence of
21fraud, this subsection does not limit the right of the manufacturer to audit for longer
22periods and charge back for any fraudulent claim, subject to the limitations period
23under s. 893.93 (1) (b) (cm).
AB773-ASA2,3 24Section 3. 218.0126 of the statutes is amended to read:
AB773-ASA2,5,15
1218.0126 Promotional allowances. A claim made by a franchised motor
2vehicle dealer for promotional allowances or other incentive payments shall be either
3approved or disapproved within 30 days after the claim is submitted to the
4manufacturer, importer or distributor in the manner and on the forms the
5manufacturer, importer or distributor reasonably prescribes. An approved claim
6shall be paid within 30 days after its approval. If a claim is not specifically
7disapproved in writing or by electronic transmission within 30 days after the date
8on which the manufacturer, importer or distributor receives it, the claim shall be
9considered to be approved and payment shall follow within 30 days after approval.
10A manufacturer, importer or distributor retains the right to audit a claim for a period
11of 2 years after the date on which the claim is paid and to charge back any amounts
12paid on claims that are false or unsubstantiated. If there is evidence of fraud, this
13section does not limit the right of the manufacturer to audit for longer periods and
14charge back for any fraudulent claim, subject to the limitations period under s.
15893.93 (1) (b) (cm).
AB773-ASA2,4 16Section 4. 628.46 (1) of the statutes is amended to read:
AB773-ASA2,6,617 628.46 (1) Unless otherwise provided by law, an insurer shall promptly pay
18every insurance claim. A claim shall be overdue if not paid within 30 days after the
19insurer is furnished written notice of the fact of a covered loss and of the amount of
20the loss. If such written notice is not furnished to the insurer as to the entire claim,
21any partial amount supported by written notice is overdue if not paid within 30 days
22after such written notice is furnished to the insurer. Any part or all of the remainder
23of the claim that is subsequently supported by written notice is overdue if not paid
24within 30 days after written notice is furnished to the insurer. Any payment shall
25not be deemed overdue when the insurer has reasonable proof to establish that the

1insurer is not responsible for the payment, notwithstanding that written notice has
2been furnished to the insurer. For the purpose of calculating the extent to which any
3claim is overdue, payment shall be treated as being made on the date a draft or other
4valid instrument which is equivalent to payment was placed in the U.S. mail in a
5properly addressed, postpaid envelope, or, if not so posted, on the date of delivery.
6All overdue payments shall bear simple interest at the rate of 12 7.5 percent per year.
AB773-ASA2,5 7Section 5. 801.01 (2) of the statutes is amended to read:
AB773-ASA2,6,138 801.01 (2) Scope. Chapters 801 to 847 govern procedure and practice in circuit
9courts of this state in all civil actions and special proceedings whether cognizable as
10cases at law, in equity or of statutory origin except where different procedure is
11prescribed by statute or rule. Chapters 801 to 847 shall be construed , administered,
12and employed by the court and the parties
to secure the just, speedy and inexpensive
13determination of every action and proceeding.
AB773-ASA2,6 14Section 6. 802.06 (1) of the statutes is renumbered 802.06 (1) (a).
AB773-ASA2,7 15Section 7. 802.06 (1) (b) of the statutes is created to read:
AB773-ASA2,6,2116 802.06 (1) (b) Upon the filing of a motion to dismiss under sub. (2) (a) 6., a
17motion for judgment on the pleadings under sub. (3), or a motion for more definite
18statement under sub. (5), all discovery and other proceedings shall be stayed for a
19period of 180 days after the filing of the motion or until the ruling of the court on the
20motion, whichever is sooner, unless the court finds good cause upon the motion of any
21party that particularized discovery is necessary.
AB773-ASA2,8 22Section 8. 803.08 (11) of the statutes, as affected by 2017 Supreme Court
23Order 17-03, is repealed and recreated to read:
AB773-ASA2,7,624 803.08 (11) Interlocutory appeal of class certification. (a) When
25practicable after the commencement of an action brought as a class action, the court

1shall determine by order whether it is to be so maintained. If the court finds that the
2action should be maintained as a class action, it shall certify the action accordingly
3on the basis of a written decision setting forth all reasons why the action may be
4maintained and describing all evidence in support of the determination. An order
5under this subsection may be altered, amended, or withdrawn at any time before the
6decision on the merits. The court may direct appropriate notice to the class.
AB773-ASA2,7,137 (b) An appellate court shall hear an appeal of an order granting or denying class
8action certification, or denying a motion to decertify a class action, if a notice of
9appeal is filed within 14 days after entry of the order. During the pendency of an
10appeal under this subsection, all discovery and other proceedings shall be stayed,
11except that the trial court shall retain sufficient jurisdiction over the case to consider
12and implement a settlement of the action if a settlement is reached between the
13parties.
AB773-ASA2,9 14Section 9. 804.01 (1) of the statutes is amended to read:
AB773-ASA2,7,2115 804.01 (1) Discovery methods. Parties may obtain discovery by one or more
16of the following methods: depositions upon oral examination or written questions;
17written interrogatories; production of documents or things or permission to enter
18upon land or other property, for inspection and other purposes; physical and mental
19examinations; and requests for admission. Unless the court orders otherwise under
20sub. (3), and except as provided in s. ss. 804.015, 804.045, 804.08 (1) (am), and 804.09,
21the frequency of use of these methods is not limited.
AB773-ASA2,10 22Section 10. 804.01 (2) (a) of the statutes is amended to read:
AB773-ASA2,8,1223 804.01 (2) (a) In general. Parties may obtain discovery regarding any
24nonprivileged matter, not privileged, which that is relevant to the subject matter
25involved in the pending action, whether it relates to the
any party's claim or defense

1of the party seeking discovery or to the claim or defense of any other party, including
2the existence, description, nature, custody, condition and location of any books,
3documents, or other tangible things and the identity and location of persons having
4knowledge of any discoverable matter. It is not ground for objection that the
5information sought will be inadmissible at the trial if the information sought appears
6reasonably calculated to lead to the discovery of admissible evidence
and
7proportional to the needs of the case, considering the importance of the issues at
8stake in the action, the amount in controversy, the parties' relative access to relevant
9information, the parties' resources, the importance of the discovery in resolving the
10issues, and whether the burden or expense of the proposed discovery outweighs its
11likely benefit. Information within this scope of discovery need not be admissible in
12evidence to be discoverable
.
AB773-ASA2,11 13Section 11. 804.01 (2) (am) of the statutes is created to read:
AB773-ASA2,8,1514 804.01 (2) (am) Limitations. Upon the motion of any party, the court shall limit
15the frequency or extent of discovery if it determines that one of the following applies:
AB773-ASA2,8,1716 1. The discovery sought is cumulative or duplicative, or can be obtained from
17some other source that is more convenient, less burdensome, or less expensive.
AB773-ASA2,8,2218 2. The burden or expense of the proposed discovery outweighs its likely benefit
19or is not proportional to the claims and defenses at issue considering the needs of the
20case, the amount in controversy, the parties' resources, the complexity and
21importance of the issues at stake in the action, and the importance of discovery in
22resolving the issues.
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