Stephen E. Lee v. Zurich American Insurance Co. of New York/Illinois

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
March 31, 2026
A party may file with the Supreme Court a
Samuel A. Christensen petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.

Appeal No. 2024AP352 Cir. Ct. No. 2022CV6065

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT I

STEPHEN E. LEE,

PLAINTIFF-APPELLANT,

V.

ZURICH AMERICAN INSURANCE CO. OF NEW YORK/ILLINOIS, JACOB
JURGELLA, JOSHUA KAPLAN, ROSALIND BREWER, ALEX GURLAY,
LINDSEY SCHARTZ, TELLY K. NEHER INDIVIDUALLY AND WALGREENS
BOOTS ALLIANCE, INC.,

DEFENDANTS-RESPONDENTS,

STEFANO PESSINA,

DEFENDANT.

APPEAL from a judgment of the circuit court for Milwaukee
County: THOMAS J. McADAMS, Judge. Affirmed.

Before White, C.J., Donald, and Geenen, JJ.
No. 2024AP352

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).

¶1 PER CURIAM. Stephen E. Lee, pro se, appeals from the judgment
dismissing his action, with prejudice and on the merits. Lee filed an action
alleging civil conspiracy, negligent supervision, false arrest, false imprisonment,
abuse of process, and malicious prosecution against Zurich American Insurance
Co. of New York/Illinois, Jacob Jurgella, Joshua Kaplan, Rosalind Brewer, Alex
Gurlay, Lindsey Schartz, Telly K. Neher, individually, and Walgreens Boots
Alliance, Inc. (collectively Walgreens) for events related to the prosecution of Lee
for retail theft at a Walgreens store in Elm Grove in May 2020 and a Walgreens
store in Pewaukee in 2019. Lee argues that genuine issues of material fact
preclude summary judgment; additionally, he argues that he is entitled to summary
judgment on certain claims. Upon review, we affirm.

BACKGROUND

¶2 We begin with the facts alleged in the criminal complaint in
Waukesha County Circuit Court Case No. 2020CM1436 (the 2020 case). An
assistant store manager at the Elm Grove Walgreens reviewed security footage
from inside the store that showed a man concealing various bottles of alcohol on at
least three dates in May 2020 and then walking out of the store without paying.
Walgreens notified the Elm Grove Police Department (EGPD), and in the course
of their investigations, the police developed Lee as a suspect. EGPD arrested Lee,
and in July 2020, the Waukesha County District Attorney’s Office charged Lee in
Case No. 2020CM1436 with three counts of misdemeanor retail theft–
intentionally taking merchandise worth less than $500, and two counts of
misdemeanor bail jumping, all as a repeater.

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¶3 In January 2022, Lee entered a plea to resolve the charges in both
the 2020 case and in another pending case, Waukesha County Circuit Court Case
No. 2019CM2153, which alleged one count of retail theft at a Pewaukee
Walgreens and one count of misdemeanor bail jumping (hereinafter the 2019
case). Lee pled no contest to two counts of retail theft in the 2020 case, agreed to
a fine and restitution, and the remaining counts in the 2020 case and both counts in
the 2019 case were dismissed, but read in for sentencing purposes. The circuit
court ordered fines and restitution of $192.80 to be paid to Walgreens.1

¶4 Although Lee did not appeal his criminal charges, he commenced a
civil action against Walgreens premised on two concerns: (1) that the security
cameras at Walgreens had been placed by EGPD without judicial authorization;
therefore, using the video footage as evidence violated the Fourth Amendment,
and (2) that Walgreens acted in deceit and fraudulently when it reported him to
EGPD, resulting in false arrest, false imprisonment, and abuse of process.2 As
litigation continued, Lee denied being present during the times the thefts allegedly
occurred at the Elm Grove Walgreens.

1
The Honorable Laura F. Lau presided over Lee’s criminal charges. The Honorable
Christopher R. Foley presided over the initial proceedings in this civil action. The Honorable
Thomas J. McAdams presided over the summary judgment proceedings in this civil action. For
ease of reference, we refer to each as the circuit court.
2
Lee initially filed a state court action, which was removed to federal court, where the
district court dismissed it after concluding that his 42 U.S.C § 1983 claim was barred by Heck v.
Humphrey, 512 U.S. 477, 487 (1994) (holding that a claim for damages is not cognizable under
§ 1983 if a favorable judgment would necessarily imply the invalidity of a conviction or
sentence). Lee then filed the civil action underlying this appeal in September 2022. Although we
do not interpret Lee as raising a § 1983 claim in this action, to the extent that such a claim is
raised, we conclude it is also barred by Heck.

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No. 2024AP352

¶5 After the parties each filed numerous motions, the case was resolved
when the circuit court granted Walgreens’ summary judgment motion. The court
determined that Lee presented no evidence of a wrongful act to support a claim for
civil conspiracy, no evidence of Walgreens condoning illegal business activities to
support a claim of negligent supervision, and no evidence to support claims of
false arrest, false imprisonment, or malicious prosecution because he was caught
on camera stealing from the store. Lee now appeals.

DISCUSSION

¶6 Lee argues that the circuit court erred when it concluded Walgreens
was entitled to judgment as a matter of law, arguing either that there are genuine
issues of material fact or that he is instead entitled to judgment as a matter of law.
We address the claims as Lee raised them: (1) civil conspiracy; (2) negligent
supervision; and (3) false arrest, false imprisonment, abuse of process, and
malicious prosecution.

¶7 A circuit court must grant summary judgment “if the pleadings,
depositions, answers to interrogatories, and admissions on file, together with the
affidavits,” show that there are no genuine issues of material fact, and “the moving
party is entitled to a judgment as a matter of law.” WIS. STAT. § 802.08(2) (2023-
24).3 We independently review whether the circuit court correctly granted
summary judgment. Munger v. Seehafer, 2016 WI App 89, ¶46, 372 Wis. 2d
749, 890 N.W.2d 22.

3
All references to the Wisconsin Statutes are to the 2023-24 version.

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No. 2024AP352

¶8 “We examine the record in the light most favorable to the non-
moving party.” North Highland Inc. v. Jefferson Mach. & Tool Inc., 2017 WI
75, ¶21, 377 Wis. 2d 496, 898 N.W.2d 741. “[W]e search the [r]ecord to see if the
evidentiary material that the parties set out in support or in opposition to summary
judgment supports reasonable inferences that require the grant or denial of
summary judgment[.]” Chapman v. B.C. Ziegler & Co., 2013 WI App 127, ¶2,
351 Wis. 2d 123, 839 N.W.2d 425.4

I. Civil conspiracy

¶9 Lee’s first claim is that Walgreens and EGPD were engaged in a
civil conspiracy against him. “In Wisconsin civil conspiracy has been defined as a
combination of two or more persons by some concerted action to accomplish some
unlawful purpose or to accomplish by unlawful means some purpose not in itself
unlawful.” Radue v. Dill, 74 Wis. 2d 239, 241, 246 N.W.2d 507 (1976). “A civil
conspiracy claim has three elements: (1) the formation and operation of a
conspiracy; (2) a wrongful act or acts done pursuant to the conspiracy; and

4
The record reflects that at certain points, the circuit court and Walgreens alluded to
Lee’s conviction as proof that he committed the retail theft or he was the person shown on the
security cameras, however, this reflects a misunderstanding of the law. “Evidence of … a plea of
no contest … is not admissible in any civil or criminal proceeding against the person who made
the plea[.]” WIS. STAT. § 904.10. When a court accepts a defendant’s no contest plea “it
constitutes an implied confession of guilt for the purposes of the case to support a judgment of
conviction and in that respect is equivalent to a plea of guilty.” Dr. Royal Lee v. Wisconsin State
Bd. of Dental Exam’rs, 29 Wis. 2d 330, 334, 139 N.W.2d 61 (1966). However, Lee’s no contest
pleas are not admissions that he committed all of the acts in the criminal complaint and cannot be
used collaterally for that purpose. See State v. Black, 2001 WI 31, ¶15, 242 Wis. 2d 126, 624
N.W.2d 363 (discussing that “when a defendant enters a no contest plea, he or she is not required
to admit his or her guilt to every charge, which is precisely the advantage of entering a no contest
plea instead of a guilty plea”). We do not rely on admissions of guilt arguments in assessing
whether Walgreens was entitled to summary judgment.

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No. 2024AP352

(3) damage resulting from the act or acts.” North Highland Inc., 377 Wis. 2d
496, ¶25.

¶10 Lee argues that Walgreens and EGPD “combined, confederated,
conspired and knowingly participated” in an unlawful plan to have Lee falsely
arrested, falsely imprisoned, and set a chain of events into motion to deprive him
of his liberty without due process of law. Lee argues that EGPD placed security
cameras at Walgreens without judicial authorization; therefore, any recordings
could not be a basis for his arrest or conviction.

¶11 While Lee acknowledges that a private business does not need
judicial authorization to place security cameras, he asserts that because the police
placed the cameras, a warrant or judicial authorization was needed to conform
with the Fourth Amendment. This is simply not true. “What a person knowingly
exposes to the public … is not a subject of Fourth Amendment protection.” Katz
v. United States, 389 U.S. 347, 351 (1967). A person shopping in a store that is
open to the public does not have a reasonable expectation of privacy in the aisles.5

5
Although video surveillance inside a retail store could implicate personal privacy
concerns, Lee’s claim that the security cameras placed by police require judicial authorization is
premised on Fourth Amendment protections and whether government surveillance invaded a
reasonable expectation of privacy. See State v. Gasper, 2026 WI 3, ¶¶5-6, 419 Wis. 2d 12, 30
N.W.3d 367. “[A] reasonable expectation of privacy depends on (1) whether the individual has
exhibited an actual, subjective expectation of privacy in the area inspected … and (2) whether
society is willing to recognize such an expectation of privacy as reasonable.” State v. Trecroci,
2001 WI App 126, ¶35, 246 Wis. 2d 261, 630 N.W.2d 555. Although it is difficult to imagine
what subjective right to privacy Lee could claim in the Walgreens store aisle, on the objective
prong, the expectation of privacy does not extend to what a person “knowingly exposes to the
public.” Katz v. United States, 389 U.S. 347, 351 (1967).

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No. 2024AP352

A private business does not need judicial authorization to cooperate with the
police on security cameras in public areas of the store.6

¶12 Lee also argues that Walgreens’ staff did not follow internal policies
that require an employee to witness theft and sign a complaint. Further, he
contends that the criminal proceedings in the 2020 case were not properly
commenced because he received the criminal complaint while in court on the 2019
case. However, Lee has not shown that either fact is relevant or constitutes a
“civil wrong which has been committed pursuant to the conspiracy and which
results in damage to the plaintiff.” Onderdonk v. Lamb, 79 Wis. 2d 241, 246, 255
N.W.2d 507 (1977). Lee has not presented any proof of concerted, improper
action among Walgreens, EGPD, and the Waukesha County DA’s office,
particularly as Walgreens would have no role in commencing a criminal legal
action.

¶13 Finally, Lee asserts, based on his summary judgment affidavit, that
he was not present at the Elm Grove Walgreens on the dates of retail thefts to
which he pled no contest in the criminal court, and therefore, whether he was on
the security camera footage is a genuine issue of material fact. We disagree.
Whether Lee was on the security camera footage does not change that Walgreens

The Seventh Circuit concluded that “the government’s use of a technology in public
6

use, while occupying a place it was lawfully entitled to be, to observe plainly visible happenings,
[does] not run afoul of the Fourth Amendment.” United States v. Tuggle, 4 F.4th 505, 511 (7th
Cir. 2021).

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No. 2024AP352

reported a theft to EGPD, the police investigated, and the DA prosecuted the case.
Walgreens did not commit a wrongful act when it made a police report.7

¶14 Therefore, we conclude that Lee has neither presented evidence of
an unlawful act in furtherance of a civil conspiracy nor shown a genuine issue of
material fact to preclude summary judgment. Accordingly, we conclude that
Walgreens is entitled as a matter of law to a judgment of dismissal on this claim.

II. Negligent supervision

¶15 Lee’s second claim is negligent supervision, which was premised on
Walgreens negligently supervising its employees when they report retail theft. To
establish a claim for negligent supervision, the plaintiff must prove four
elements: “that the employer has a duty of care, that the employer breached that
duty, that the act or omission of the employee was a cause-in-fact of the plaintiff’s
injury, and that the act or omission of the employer was a cause-in-fact of the
wrongful act of the employee.” Miller v. Wal-Mart Stores, Inc., 219 Wis. 2d 250,
267-68, 580 N.W.2d 233 (1998).

7
Additionally, Walgreens raises a concern that Lee’s attestations by affidavit that he was
not present during the thefts should be disregarded “because [they] contradict[ ] prior deposition
testimony[.]” Yahnke v. Carson, 2000 WI 74, ¶16, 236 Wis. 2d 257, 613 N.W.2d 102. The
record reflects that in Lee’s deposition testimony, he did not deny he was present on the days of
the theft, but instead objected and refused to answer almost every question asked, including
whether he was at the Elm Grove Walgreens on certain dates, appeared in security camera
footage, or removed products from the store. The sham affidavit rule provides that “contradictory
affidavits tend to create sham, rather than genuine, issues. Id. We conclude Lee’s summary
judgment affidavit cannot be the basis of a genuine issue of material fact because his attestations
contradict his refusal to answer questions at his deposition. As an alternative basis for our overall
conclusion, the sham affidavit rule applies here and we conclude Lee has not raised a genuine
issue of material fact that precludes summary judgment.

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No. 2024AP352

¶16 Lee’s claim relies on two ideas, neither of which are accurate
statements of the law. First, he contends that Walgreens approved and condoned
its employees doing illegal business activities, in the scope of their employment,
including allowing EGPD to install security cameras in the store without judicial
authorization. As we discussed above, a private business may work with police to
place security cameras to surveil public spaces within the business without
implicating the Fourth Amendment because the reasonable expectation of privacy
does not extend to what a person “knowingly exposes to the public.” Katz, 389
U.S. at 351. Therefore, Walgreens has not negligently supervised its employees
by allowing them to cooperate with EGPD on the security camera placement.

¶17 Second, Lee asserts that in order for a merchant to report retail theft,
an employee must directly observe the theft, that is, not observe it through security
cameras. He contends that Walgreens was negligent for allowing employees to
notify the police about a retail theft observed on security cameras. Lee argues that
Walgreens is violating WIS. STAT. § 943.50(3), which permits a merchant “who
has reasonable cause for believing that a person” has committed retail theft “in his
or her presence” to then temporarily detain the suspect. We note that § 943.50(3)
delineates how a suspected shoplifter may be detained in a merchant setting and
that Lee did not allege he was detained by Walgreens’s staff. Walgreens further
refutes this point with State v. Larry Lee, 157 Wis. 2d 126, 458 N.W.2d 562 (Ct.
App. 1990), in which this court concluded that § 943.50(3) “merely requires that
the merchant or employee have ‘probable cause for believing that a person has
violated this section in his or her presence’; the actual theft need not be committed
in the presence of either the merchant or the merchant’s employee.” Larry Lee,
157 Wis. 2d at 132 (citation omitted). Lee’s argument fails. We conclude Lee has

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No. 2024AP352

not raised a genuine issue of material fact and Walgreens is entitled to a judgment
of dismissal on the negligent supervision claim as a matter of law.

III. False arrest, false imprisonment, abuse of process, and malicious
prosecution

¶18 Lee’s overarching theory is that his arrest and prosecution for retail
theft was a result of abuse of process. While he asserts that false arrest, false
imprisonment, and general abuse of process claims arise from the 2020 case, he
contends that malicious prosecution applies only to the 2019 case. However, these
claims have a similar fatal flaw: Walgreens was not acting improperly when it
made a report to EGPD that a suspected retail theft was shown on security camera
footage. It was not improper for the cameras to be there. Furthermore, the actual
investigation and prosecution of the case was made by EGPD and the Waukesha
County DA’s office, not Walgreens.

¶19 False imprisonment is defined as “[t]he unlawful restraint by one
person of the physical liberty of another.” Lane v. Collins, 29 Wis. 2d 66, 69, 138
N.W.2d 264 (1965) (citation omitted). “One is subject to liability for false
imprisonment if that person acts to cause a false arrest, i.e., an arrest made without
legal authority.” Stern v. Thompson & Coates, Ltd., 185 Wis. 2d 220, 242-43,
517 N.W.2d 658 (1994).

¶20 The elements of abuse of process are “an ulterior purpose,” and “a
wilful act in the use of the process not proper in the regular conduct of the
proceeding.” Thompson v. Beecham, 72 Wis. 2d 356, 362, 241 N.W.2d 163
(1976) (citation omitted). “However, misusing or abusing process will not be
found for bad motive alone.” Stern, 185 Wis. 2d at 251. “To prevail on an abuse
of process claim, a party must present evidence that another party used the process

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No. 2024AP352

in a manner not intended and to gain a collateral advantage.” Schmit v.
Klumpyan, 2003 WI App 107, ¶1, 264 Wis. 2d 414, 663 N.W.2d 331.

¶21 Case law provides examples of “collateral advantage” in abuse of
process claims. See id. Allegations that an ex-husband prepared a bench warrant
that led to his ex-wife’s arrest in order to coerce her into granting visitation with
their children and provide a tactical advantage in an upcoming hearing constituted
a claim of abuse of process. Strid v. Converse, 111 Wis. 2d 418, 427, 331 N.W.2d
350 (1983). Similarly, a university obtaining a temporary order of detention under
the emergency provisions for mental illness to prevent a student from leaving
campus, where the circuit court found that the university was not concerned for the
student’s mental health but wanted to physically prevent her from leaving school
without her father’s permission, was found to constitute abuse of process.
Maniaci v. Marquette Univ., 50 Wis. 2d 287, 300-01, 184 N.W.2d 168 (1971).

¶22 In contrast, in Thompson, 72 Wis. 2d at 358, 364, a minister sought
an injunction that would prevent two congregants from interfering with church
services and activities, after one made veiled references to the congregation about
misconduct in the church and the other testified against the minister in the
minister’s divorce proceedings. Id. at 358-59. The congregants counterclaimed
and sought to remove the minister from his position. Id. at 359. Although the
parties eventually reached a compromise and settlement leaving the minister in his
job and the congregants as members of the church, the congregants later filed a
suit alleging that the minister’s earlier lawsuit was an abuse of process. Id. at 359-
60. Our supreme court concluded that “[t]he evidence merely showed the normal
prosecution of a civil suit” by the minister and “the possible existence of an
improper desire” on the minister’s part to punish the congregants. Id. at 364.

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There was no evidence that the minister “misused the suit as a club to achieve his
wrongful purpose.” Id.

¶23 In our examination of the record, we do not see evidence of abuse of
process. Although it is undisputed that Walgreens worked with the local police to
place security cameras, EGPD did not become involved in an investigation or
contact Lee until after Walgreens reviewed the footage, determined items had been
taken from the store without being paid for, and passed along the report to EGPD.
This is normal process. Lee has not shown that Walgreens has “used the process
in a manner not intended” or that it used the process “to gain a collateral
advantage.” Schmit, 264 Wis. 2d 414, ¶1. Lee has not alleged malice, ulterior
motives, or personal animus. Instead, Lee’s situation is more like that in
Thompson, where “[t]he evidence merely showed the normal prosecution” of an
action. Id., 72 Wis. 2d at 364.

¶24 Lee’s claims of false arrest and imprisonment fare no better. He
contends that the arrest itself in the 2020 case was improper and that there was no
record of his arrest or booking into jail for that arrest.8 However, even if we
agreed with Lee’s argument that Walgreens’ report of theft to EGPD led to his
improper arrest, Walgreens or its employees did not and cannot arrest anyone,
commence criminal proceedings, or prosecute a criminal action. Those roles
belong to law enforcement and a prosecutor. See WIS. STAT. § 968.07 (providing
when or how law enforcement officers may arrest); State v. Peterson, 195 Wis.
351, 369, 218 N.W. 367 (1928) (“In the prosecution of criminal actions, the

8
Lee alleged multiple reasons why EGPD’s arrest processes were statutorily improper;
however, none of them involve actions by or within the control of Walgreens.

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No. 2024AP352

district attorney prosecutes for public wrongs, not for private wrongs, and such
prosecution should be by a public officer, and not a private party.”).

¶25 Lee’s arrest was entirely within the control of law enforcement and
the procedural steps initiating that case were within the control of law enforcement
or the DA’s office. Walgreens’ report of theft to the police did not confine him
“without legal process,” or confine him by misusing legal process “for an
improper purpose.” Maniaci, 50 Wis. 2d at 295-96. Lee has simply not shown
how Walgreens misused process in a way that caused him to be unjustly arrested.
As such, it does not matter if the security camera footage shows (or does not
show) Lee shoplifting because it is not an abuse of process, false arrest, or false
imprisonment for Walgreens to report a suspected theft to EGPD.9 That is a
normal process carried out to its “authorized conclusion.” Thompson, 72 Wis. 2d
at 362-63. Lee’s argument fails and Walgreens is entitled to a judgment of
dismissal as a matter of law on these claims.

¶26 We turn to Lee’s final claim. To establish a claim for malicious
prosecution, a plaintiff must prove each of the following six elements:

1. There must have been a prior institution or continuation
of judicial proceedings against the plaintiff;

2. Such former proceedings must have been by, or at the
instance of the defendant;

3. The former proceedings must have terminated in favor of
the plaintiff;
9
The same concerns supporting disregarding Lee’s attestations by affidavit that he was
not in the store on the days of the suspected thefts apply because these statements contradict his
prior deposition testimony. Yahnke, 236 Wis. 2d 257, ¶16. Nonetheless, whether he was on the
video is not relevant to the false arrest claim. While his conviction may not be used as a
collateral attack in this civil litigation, this court does not engage in a collateral attack on his
conviction. See WIS. STAT. § 904.10; Black, 242 Wis. 2d 126, ¶15; Heck, 512 U.S. at 487.

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4. There must have been malice in instituting the former
proceedings;

5. There must have been want of probable cause for the
institution of the former proceedings; and

6. There must have been injury or damage resulting to the
plaintiff from the former proceedings.

Elmer v. Chicago & N.W. Ry. Co., 257 Wis. 228, 231, 43 N.W.2d 244 (1950).

¶27 The record reflects that both counts of the 2019 case were dismissed
and the charges read in as part of the plea agreement to resolve both the 2019 and
2020 cases. Lee argues that the dismissal produced an order of acquittal for those
charges and that he therefore satisfies all elements, going so far as to argue that
there are no genuine issues of material fact and the claim should be decided in his
favor. Although we consider it questionable to assert that the parties are the same
between the actions or that the criminal prosecution was instituted by Walgreens,
the third element—a favorable termination of the prior action—is dispositive and
Lee’s claim fails.

¶28 Despite Lee’s assertion that he was acquitted, the record reflects that
the charges were only dismissed as part of a plea agreement and they were read in
for the purpose of sentencing. In Wisconsin, “[a] voluntary compromise and
settlement of the prior suit is not a favorable termination” to satisfy a malicious
prosecution claim. Thompson, 72 Wis. 2d at 360. When a defendant is charged
with multiple counts, a dismissal of one count pursuant to a plea agreement, while
other counts result in convictions does not satisfy the requirement for a favorable
termination of the prior action. Heilgeist v. Chasser, 98 Wis. 2d 97, 99-100, 295
N.W.2d 26 (Ct. App. 1980). Accordingly, Lee’s argument fails and Walgreens is
entitled to a judgment of dismissal on the malicious prosecution claim as a matter
of law.

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CONCLUSION

¶29 We conclude that Lee has not presented any genuine issues of
material fact and that Walgreens was entitled to a judgment of dismissal as a
matter of law on each claim Lee brought. Therefore, summary judgment was
appropriately granted.

By the Court.—Judgment affirmed.

This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5.

15