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Extended statute of limitation for theft runs from actual discovery, not from when theft should have been discovered

State v. Kim B. Simmelink, 2014 WI App 102; case activity

The court of appeals holds that § 939.74(2)(b)’s extended statute of limitation for certain theft charges runs from actual discovery of the theft, and not from when the theft should have been discovered with the exercise of reasonable diligence.

In 2006 authorities began investigating whether Simmelink was embezzling from her employer, the village of Oostburg. That investigation led to her conviction for various crimes in 2007. (¶3). In December 2011 the village discovered evidence of additional thefts they had not detected during the 2006 investigation. Based on that discovery, new charges were filed in April 2012 alleging thefts that occurred between April 2011 and October 2003. (¶4).

The state asserted the charges were not time barred because of § 939.74(2)(b), which provides that “[a] prosecution for theft against one who obtained possession of the property lawfully and subsequently misappropriated it may be commenced within one year after discovery of the loss by the aggrieved party, but in no case shall this provision extend the time limitation [of 6 years] by more than 5 years.” (¶6). Relying on the civil “discovery rule,” under which claims accrue “on the date the injury is discovered or with reasonable diligence should be discovered, whichever occurs first,” Hansen v. A.H. Robins, Inc., 113 Wis. 2d 550, 560, 335 N.W.2d 578 (1983), Simmelink argued the village should have discovered the basis for the new charges during the investigation undertaken in 2006, which means the extra 5 year time limitation expired in 2011. (¶¶7-9).

The court of appeals rejects application of the “discovery rule” here, as it is contrary to the plain language of the statute:

¶10      We first consider the legislature’s chosen term in Wis. Stat. § 939.74(2)(b)—“discovery.” Simmelink contends the term is ambiguous, asserting that it could mean either the actual discovery of something or when something reasonably should have been discovered. …[T]he language is plain[:] “after discovery of the loss” means after the loss was in fact discovered; it does not mean after the loss could have been discovered if reasonable diligence had been exercised. … Reading the phrase “after discovery of the loss” to also mean “after the loss reasonably should have been discovered,” would be effectively rewriting the statute, which is the job of the legislature, not the courts. See State v. Briggs, 214 Wis. 2d 281, 288, 571 N.W.2d 881 (Ct. App. 1997).

¶11      If the legislature intended the one-year extension period to be triggered not only if a loss is discovered but also if it “should have been discovered,” one would expect the legislature at some point would have written such language into the statute. See, e.g., Wis. Stat. § 893.55(1m) (requiring commencement of an action against a health care provider “within the later of: (a) Three years from the date of the injury, or (b) One year from the date the injury was discovered or, in the exercise of reasonable diligence should have been discovered,” but not later than five years following the act or omission (emphasis added)); see also Wis. Stat. §§ 402.725(2), 411.506(2), 893.51(2), 893.80(1p). The legislature, however, has not done so, and “[w]e should not read into the statute language that the legislature did not put in.” State v. Matasek, 2014 WI 27, ¶20, 353 Wis. 2d 601, 846 N.W.2d 811 …. Thus, we decline to rewrite Wis. Stat. § 939.74(2)(b) to add words or requirements which the legislature itself did not choose to include.

But the discovery rule has been applied to other statutory language that—just like § 939.74(2)(b)—doesn’t explicitly say the deadline is triggered once the loss or injury “should have been discovered.” See Doe v. Archdiocese of Milwaukee, 2007 WI 95, ¶64, 303 Wis. 2d 34, 734 N.W.2d 827 (applying discovery rule to § 893.93(1)(b)). So why not here? Because of the “significant difference between the statutory schemes….” (¶13).

¶14      Under Wis. Stat. § 893.93(1)(b), there is no clearly delineated end point for when an action may be initiated; rather, the cause of action does not accrue until the facts constituting the fraud have been discovered (or, based upon our supreme court’s interpretation, should have been discovered), whenever that may be, and only then must the action be brought within six years. Thus, a civil claim involving fraud could be filed decades after the wrongful acts or injury actually occurred. … See, e.g.Archdiocese of Milwaukee,  303 Wis. 2d 34, ¶¶9, 63. Because of the open-ended nature of this limitation period in the civil context, the supreme court could more understandably read into the statute a “should have discovered” requirement. … Such a requirement tempers the open-ended nature of the civil statute and thereby encourages the prompt and diligent investigation of potential wrongdoing, prevents the prosecution of stale claims and reliance upon stale evidence, and protects defendants who otherwise may have lost defenses to the claims due to failing memories or missing witnesses. …

¶15      The legislature, however, wrote Wis. Stat. § 939.74 differently, incorporating within the statute a clearly delineated end point for initiating a criminal action—eleven years. Thus, unlike the open-ended nature of the civil statute, under § 939.74, if a loss is not discovered until after eleven years from the commission of the offense, no action may be pursued. The legislature also specifically limited the extension for commencement of a criminal action beyond the initial six-year period to one year after discovery of the loss (whether or not all the facts constituting the misappropriation are known). In the civil fraud context, however, an action may be commenced up to six years after “discovery” of the facts constituting the fraud, regardless of when that discovery occurs.

16      Thus, the legislature chose a substantially different statutory scheme for the criminal misappropriation context than the civil fraud context, and, in doing so, itself tempered the criminal misappropriation limitation period. We will not attempt to “improve” on the legislature’s balancing of policy considerations by reading into the statute “should have discovered” language for which the legislature itself did not provide.

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