State v. Kevin C. Wahlgren

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.
May 17, 2023
A party may file with the Supreme Court a
Sheila T. Reiff 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. 2021AP1772-CR Cir. Ct. No. 2017CF181

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT II

STATE OF WISCONSIN,

PLAINTIFF-RESPONDENT,

V.

KEVIN C. WAHLGREN,

DEFENDANT-APPELLANT.

APPEAL from a judgment and an order of the circuit court for
Waukesha County: MICHAEL P. MAXWELL and PAUL BUGENHAGEN, JR.,
Judges.1 Affirmed.

Before Neubauer, Grogan and Lazar, JJ.

1
The Honorable Michael P. Maxwell entered the judgment of conviction. The
Honorable Paul Bugenhagen, Jr., entered the order denying the defendant’s postconviction
motion.
No. 2021AP1772-CR

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. Kevin C. Wahlgren appeals from a judgment of
conviction, entered following guilty pleas, for three counts of theft by contractor.
He also appeals an order denying postconviction relief. Wahlgren argues the case
should be dismissed for lack of subject matter jurisdiction because the charging
documents failed to allege the specific criminal intent needed for criminal theft by
contractor. For this same reason, Wahlgren argues he should be permitted to
withdraw his guilty pleas because his pleas were not knowing, intelligent, or
voluntary. Alternatively, Wahlgren asserts the restitution award should be reduced
and we should remand for resentencing based on the reduced restitution award.
We reject Wahlgren’s arguments and affirm.

BACKGROUND

¶2 An amended information charged Wahlgren with nine counts of theft
by contractor, contrary to WIS. STAT. §§ 779.02(5) and 943.20(1)(b)
(2021-22).2 According to the amended complaint, Wahlgren is the president of
Wahlgren-Schwenn Inc., a business located in Menomonee Falls, Wisconsin.
Lake Country Bible Church contracted with Wahlgren-Schwenn to construct a
new church. A church elder stated that he primarily dealt with Wahlgren when

2
Wahlgren was charged in a six-count complaint with criminal theft by contractor. The
complaint was amended to add a seventh count, which was reflected in the information. The
State later amended the information to break counts one and three into separate counts, in order to
address possible concerns about duplicity. The amended information included nine counts.

All references to the Wisconsin Statutes are to the 2021-22 version unless otherwise
noted.

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No. 2021AP1772-CR

working on the project. The agreement stated Wahlgren-Schwenn would be the
prime contractor. According to the contract, while the church was being
constructed, Wahlgren-Schwenn would request draws from a title company to pay
subcontractors for work performed. Upon receiving the check from the title
company, Wahlgren-Schwenn was required to pay each subcontractor within
fifteen days. However, on several occasions, Wahlgren did not pay the
subcontractors. He also requested additional funds to be made available for
subsequent draws without paying the subcontractors.

¶3 In April 2015, Lake Country Bible Church learned that Wahlgren
was not paying a subcontractor. The subcontractor received a $39,600 check for
payment, but Wahlgren asked the subcontractor not to cash it. The subcontractor
asked on four subsequent occasions if the check could be cashed. Wahlgren
denied all requests, stating he did not have sufficient funds. The church then
contacted the title company and determined the title company would pay
subcontractors directly going forward. After the change, Wahlgren-Schwenn did
not pay any outstanding bills, although the church paid some subcontractors
through civil negotiations.

¶4 The amended complaint also alleged that Wahlgren entered into
contracts for three other projects separate from the project for Lake Country Bible
Church. Similar to his conduct with Lake Country Bible Church, the
subcontractors would complete their work, Wahlgren would request payment for
the subcontractors’ work, Wahlgren would receive a check for the subcontractors’
work, and then Wahlgren would not pay the subcontractors as required. The
amended complaint explained that some of the subcontractors contacted law
enforcement to report the nonpayments. All counts in the amended information

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No. 2021AP1772-CR

contained similar allegations. For example, count six in the amended information
stated:

The above-named defendant between April 14, 2015
and June 1, 2015, [in] Waukesha County, Wisconsin, did as
one under an agreement for the improvement of land,
received money from the owners Lake Country Bible
Church and without consent of the owners and contrary to
his authority; intentionally used any of the money for any
purpose other than the payment of claims due or to become
due from the defendant for labor and materials used in the
improvements before all claims were paid in full contrary
to sec. 943.20(1)(b) Wis. Stats. and, contrary to sec.
779.02(5) and 943.20(3)(c), 939.50(3)(g) Wis. Stats., a
Class G Felony, and upon conviction may be fined not
more than Twenty Five Thousand Dollars ($25,000), or
imprisoned not more than ten (10) years, or both.

The remaining counts were identically phrased, but with different victims, time
frames, and felony classes named.

¶5 Pursuant to a plea agreement, Wahlgren pled guilty to counts six,
eight, and nine of the amended information. The remainder of the counts were
dismissed but read in at sentencing.3 Wahlgren signed a plea questionnaire/waiver
of rights form. Wahlgren alleged that he understood the crimes to which he was
pleading and that his attorney explained the elements to him.

¶6 The elements of criminal theft by contractor, as provided in WIS JI—
CRIMINAL 1443A (May 2009),4 were attached to the plea questionnaire that he

An additional count of criminal theft by contractor “that was removed from the
3

amended information for the purposes of trial” was also read in, pursuant to a read-in list.
4
All references to WIS JI—CRIMINAL 1443A are to the May 2009 version unless
otherwise indicated. This is the version that was used during Wahlgren’s plea hearing. The
pattern instruction was revised in February 2022 to update a footnote. WIS JI—CRIMINAL 1443A
at 4 (Feb. 2022).

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No. 2021AP1772-CR

signed. During the plea hearing, the court had the following exchange with
Wahlgren:

THE COURT: [] Count six of that information states
that between August -- I’m sorry, April 14th, 2015, and
June 1st, 2015, in Waukesha County, you did, as one under
an agreement for the improvement of land, receive money
from the owners of Lake Country Bible Church, and
without consent of owners, and contrary to your authority,
intentionally used any of the money for any purpose other
than payment of claims due or to become due from the
defendant for labor and materials used in the improvements
before all claims were paid in full. This is contrary to
Wisconsin law, a class-G felony, which upon conviction
you may be fined not more than $25,000 or imprisoned not
more than ten years or both.

So what I just read to you is the charge for count six. It
includes the elements of the crime as well as the maximum
possible penalties. Do you understand the elements of this
crime?

THE DEFENDANT: Yes, Your Honor.

¶7 The court and Wahlgren had a similar exchange with respect to
counts eight and nine. Wahlgren informed the court that he reviewed a copy of
WIS JI—CRIMINAL 1443A with his attorney. Specifically, he reviewed the
elements section of that jury instruction and understood what the elements were.
He reviewed the entire plea questionnaire/waiver of rights form, as well as its
attachments, before he signed it.

¶8 The court then asked Wahlgren:

Is it true that between April 14, 2015, and June 1st,
2015, in Waukesha County, Wisconsin, that you did, as one
under an agreement for improvement of land, receive
money from the owners of Lake Country Bible Church, and
without consent of the owners and contrary to your
authority, you intentionally used any of the money for any
purpose other than the payment of claims due or to become
due from the defendant for labor and materials used in the
improvement before all claims were paid in full.

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No. 2021AP1772-CR

Wahlgren replied, “Yes. I believe so, yes.” A similar exchange took place with
respect to the allegations in counts eight and nine. Wahlgren also admitted to the
factual allegations in the charging documents. The court accepted Wahlgren’s
guilty pleas and found him guilty.

¶9 Before sentencing, the court held a contested restitution hearing
where it ultimately awarded $470,767.92 in restitution. Relevant to this appeal is
the amount awarded for the victims’ legal fees, which totaled $144,051.17.

¶10 At the restitution hearing, L.A. testified on behalf of Lake Country
Bible Church. For legal fees, the church sought restitution in the amount of
$32,631, which was the legal fees “that we had incurred in contacting our attorney
regarding the fact that work was not getting done.” L.A. explained that liens had
been filed against the church’s building and three or four foreclosure judgments
were pending. L.A. admitted that he did not have the law firm’s itemized invoices
but testified that all of the requested legal fees were “related to this criminal case.”
He explained the church initially hired the law firm to review the original contract
it had with Wahlgren and the church paid those fees. The requested legal fees
were the fees the church incurred since the church re-engaged its law firm to deal
with the problems. L.A. admitted the church also initially hired the law firm to get
the village’s approval for the project and agreed that, because the itemized bills
were not in the courtroom, L.A. could not say for sure whether that fee was
included in the $32,631 amount. He stated the approval amount would have been
nominal.

¶11 The chief financial officer of Lemberg Electric Company, Inc.
(Lemberg) testified in support of Lemberg’s request for restitution. Lemberg
sought $131,844 in restitution, which included $21,974 in legal fees. In support,

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No. 2021AP1772-CR

Lemberg attached a civil order and judgment from the Milwaukee County Circuit
Court, stating Lemberg was entitled to recover $131,844 from Wahlgren-
Schwenn. Lemberg did not separately provide any invoices.

¶12 The chief financial officer of Emjay Realty, LLC (Emjay) testified
on behalf of Emjay’s request for restitution. Emjay sought $33,974 in legal fees.
When asked if he had a specific invoice for the fees, the chief financial officer
explained that the total amount of legal fees “represent[ed] a series of invoices that
extend[ed] over a year which I can’t provide.” However, he testified that the legal
fees were incurred exclusively to address liens that were filed as a result of
Wahlgren’s failure to pay subcontractors.

¶13 The chief financial officer for Noble Investment Group (Noble)
testified in support of Noble’s request for restitution. When Noble learned that
subcontractors were not getting paid, it began working with attorneys “to try to
deal with the liens and get resolution.” Noble sought $55,472.17 in legal fees. In
an earlier affidavit, Noble included copies of almost all of the invoices from the
law firms, but redacted specific descriptions of the work.

¶14 During the hearing, Wahlgren’s attorney raised a standing objection
to the requests for legal fees because the requests were not adequately supported
by documentation.

¶15 In terms of restitution for legal fees, the court ruled that Lake
Country Bible Church was entitled to $32,631:

There is the information that’s provided on the summary
page for those bills as well as [a] line item in the
spreadsheets as far as the Court reviewed those to show
those.

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No. 2021AP1772-CR

There’s also the testimony indicating that the only thing
they retained them for at this point was settlement of the
issues surrounding Mr. Wahlgren’s firm, so I think that’s
acceptable.

¶16 With respect to Lemberg, the court determined the civil judgment
was sufficient and awarded $21,974 in legal fees. As for Emjay, the court found
that the legal fees were appropriate. The testimony established that Emjay’s legal
fees solely related to the theft by contractor and the lien settlement issues. The
court also awarded Noble its legal fees. The testimony showed Noble’s legal fees
“related to the legal action associated with the theft by contractor situation and the
lien issues that they needed to work through to resolve.”

¶17 The court proceeded to sentencing and sentenced Wahlgren to
prison.5

¶18 Wahlgren moved for postconviction relief. He argued the State
failed to allege specific criminal intent in the charging documents and omitting
this element deprived the court of subject matter jurisdiction. For this reason,
Wahlgren also argued his guilty pleas were not knowing, intelligent, or voluntary.
Alternatively, Wahlgren argued the circuit court should not have awarded
restitution for the victims’ legal fees because the fees were neither legally
recoverable nor adequately proven. Wahlgren then argued he should be
resentenced based on a reduced restitution award.

¶19 The court denied Wahlgren’s postconviction motion. He appeals.

5
The circuit court sentenced Wahlgren to two years’ initial confinement and five years’
extended supervision on two counts. On the third count, the court imposed a sentence of one-
and-one-half years’ initial confinement and one-and-one-half years’ extended supervision but
stayed it for five years’ probation. All sentences were consecutive.

8
No. 2021AP1772-CR

DISCUSSION

¶20 On appeal, Wahlgren renews his arguments from his postconviction
motion. He contends: (1) the charging documents were insufficient; (2) he is
entitled to withdraw his guilty pleas; (3) the restitution award should be reduced;
and (4) he is entitled to resentencing. We address each argument in turn.

I. Sufficiency of the charging documents

¶21 Wahlgren first argues the charging documents were insufficient to
support the criminal-theft-by-contractor charges because the documents failed to
allege an element of the crime—that Wahlgren acted with specific criminal intent.
As such, Wahlgren asserts the court lacked subject matter jurisdiction and the case
should be dismissed.

¶22 “The facts alleged in a complaint must be sufficient ‘in themselves
or together with reasonable inferences to which they give rise, to allow a
reasonable person to conclude that a crime was probably committed and that the
defendant is probably culpable.’” State v. Elverman, 2015 WI App 91, ¶17, 366
Wis. 2d 169, 189, 873 N.W.2d 528 (citation omitted). “When reviewing the
sufficiency of a complaint, the facts alleged ‘must be sufficient to establish
probable cause.’” Id. (citation omitted). “Such review, however, is not done in a
‘hypertechnical sense, but in a minimally adequate way through a common sense
evaluation’ of whether a crime has been committed.” Id. (citation omitted).

¶23 “[T]he basis of liability for criminal theft by contractor is a violation
of the trust fund provisions of WIS. STAT. § 779.02(5), plus the criminal intent
required by WIS. STAT. § 943.20(1)(b).” Tri-Tech Corp. of Am. v. Americomp
Servs., Inc., 2002 WI 88, ¶24, 254 Wis. 2d 418, 646 N.W.2d 822. WISCONSIN

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No. 2021AP1772-CR

STAT. § 779.02(5) is titled “Theft by contractors” and generally provides that
funds paid by a property owner to a contractor for improvements to the property
constitute a trust for the benefit of those having claims due and owing for labor or
materials on the contract. Subsection (5) further provides that:

The use of any such moneys by any prime contractor … for
any other purpose until all claims, except those which are
the subject of a bona fide dispute and then only to the
extent of the amount actually in dispute, have been paid in
full or proportionally in cases of a deficiency, is theft by the
prime contractor … of moneys so misappropriated and is
punishable under [WIS. STAT. §] 943.20.

WIS. STAT. § 779.02(5). The subsection also instructs that if the contractor is a
business that is its own legal entity “such misappropriation also shall be deemed
theft by any officers, directors, members, partners, or agents responsible for the
misappropriation.” Id.

¶24 In a civil action, a showing of wrongful intent is not required to
establish liability under § 779.02(5). See State v. Hess, 99 Wis. 2d 22, 28, 298
N.W.2d 111 (Ct. App. 1980) (“The only difference between a civil and a criminal
action for theft by contractor is that for a criminal conviction the state has an
additional burden of proving that defendant acted with wrongful intent beyond a
reasonable doubt.”). However, in a criminal action, the criminal intent necessary
to prove the crime of theft by contractor is established by WIS. STAT.
§ 943.20(1)(b).

¶25 WISCONSIN STAT. § 943.20(1)(b), in turn, makes it a crime for a
trustee to intentionally use, transfer, conceal, or retain trust funds without the
beneficiary’s consent, contrary to the trustee’s authority, and with intent to convert
such funds to the trustee’s own use or the use of another. The statute continues:
“A refusal to deliver any money …, which is in his or her possession or custody

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No. 2021AP1772-CR

by virtue of his or her office, business or employment, or as trustee or bailee, upon
demand of the person entitled to receive it, or as required by law, is prima facie
evidence of an intent to convert to his or her own use[.]” Id.

¶26 We conclude Wahlgren was properly charged with criminal theft by
contractor, including the criminal intent element. All counts in the amended
complaint and amended information alleged that, during certain time periods
(specified for each count), Wahlgren, pursuant to an agreement for the
improvement of land, received money from an owner (specified for each count)
and

without consent of the owners and contrary to his authority;
intentionally used any of the money for any purpose other
than the payment of claims due or to become due from the
defendant for labor and materials used in the improvements
before all claims were paid in full contrary to sec.
943.20(1)(b) Wis. Stat. and contrary to sec. 779.02(5).

We have previously determined that “intentionally used a part of the money for a
purpose other than the payment of claims due or to become due from him for labor
or materials used in the improvements before all claims were paid in full”
correctly states the intent element for the offense of theft by contractor. See State
v. Sobkowiak, 173 Wis. 2d 327, 337-38, 496 N.W.2d 620 (Ct. App. 1992).

¶27 Moreover, the probable cause portion of the amended complaint
contains allegations that would establish Wahlgren’s criminal intent. Wahlgren
requested funds be made available to pay subcontractors, the funds were given to
Wahlgren to pay various subcontractors, and Wahlgren repeatedly failed to do so,
even after requesting funds for subsequent draws. The amended complaint details
how the contracts in place also required Wahlgren to make the payments to the
subcontractors within fifteen days and he breached those agreements. The owners

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No. 2021AP1772-CR

had to enter into civil agreements with some subcontractors to resolve the non-
payments. The probable cause portion also offers specific examples—one
subcontractor received a check, but was asked not to cash it, and when the
subcontractor repeatedly asked if the check could be cashed, the subcontractor was
advised Wahlgren did not have sufficient funds. Another subcontractor indicated
Wahlgren only paid him half of what he was owed; however, when he tried to cash
the check, it did not clear because of insufficient funds. Yet another subcontractor
described calling several times looking for payment and when the company finally
received a check and went to cash it, the subcontractor learned a “stop payment”
order had been put on the check with no explanation. See WIS. STAT.
§ 943.20(1)(b) (“A refusal to deliver any money … upon demand of the person
entitled to receive it, or as required by law, is prima facie evidence of an intent to
convert to his or her own use[.]”).

¶28 Taken as a whole, the amended complaint and amended information
establish all necessary elements, including criminal intent, for violations of WIS.
STAT. §§ 779.02(5) and 943.20(1)(b). The facts and allegations are sufficient “in
themselves or together with reasonable inferences to which they give rise, to allow
a reasonable person to conclude that a crime was probably committed and that the
defendant is probably culpable.” Elverman, 366 Wis. 2d 169, ¶17 (citation
omitted).

¶29 Wahlgren, however, contends the charging documents are
insufficient because they

do not allege that Mr. Wahlgren intended to defraud or
acted with a wrongful, fraudulent, or criminal purpose.
They do not allege that Mr. Wahlgren intended to convert
earmarked funds for his personal use or the use of another.
Indeed, they allege nothing more than general intent.

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No. 2021AP1772-CR

In support, he relies on Tri-Tech, 254 Wis. 2d 418, and appears to argue that the
supreme court in Tri-Tech changed the elements that were required to prove theft
by contractor as well as the pattern jury instruction.

¶30 WISCONSIN JI—CRIMINAL 1443 (Feb. 2022)6 is the pattern jury
instruction criminal theft by contractor. WIS JI—CRIMINAL 1443 at 4. The
instruction includes five elements,7 but in the past it included a sixth element. The
sixth element required the State to prove that “the defendant used such money
with intent to convert it to his own use.” State v. Wolter, 85 Wis. 2d 353, 369

6
All references to WIS JI—CRIMINAL 1443 are to the February 2022 version unless
otherwise stated.
7
WISCONSIN JI—CRIMINAL 1443 outlines the elements of criminal theft by contractor
as:

1. The defendant entered into an oral or written agreement for
the improvement of land.

….

2. The defendant received money from the owner under the
agreement for the improvement of land.

….

3. The defendant intentionally used any of the money for a
purpose other than the payment of claims due or to become
due from the defendant for labor or materials used in the
improvements before all claims were paid [in full]
[proportionally in cases of deficiency].

4. The use of the money was without the consent of the owner
of the land and contrary to the defendant’s authority.

5. The defendant knew that the use of the money was without
the consent of the owner of the land and contrary to the
defendant’s authority.

Id.

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No. 2021AP1772-CR

n.11, 270 N.W.2d 230 (Ct. App. 1978). However, in December 1991, the
Criminal Jury Instructions Committee deleted this sixth element as redundant.
Sobkowiak, 173 Wis. 2d at 337. The third element required the State to prove “the
defendant intentionally used a part of the money for a purpose other than the
payment of claims due or to become due from him for labor or materials used in
the improvements before all claims were paid in full.” Id. at 338; see also WIS
JI—CRIMINAL 1443 at 2, 5 n.6. The committee explained that “using the trust
fund money for any purpose other than paying off the lienholders [was] ‘personal
use’ and thus the sixth element in the 1976 instruction was redundant.”
Sobkowiak, 173 Wis. 2d at 337; see also WIS JI—CRIMINAL 1443 at 6 n.8.

¶31 We considered this revised pattern jury instruction in Sobkowiak,
173 Wis. 2d at 337. There, the defendant argued that the circuit court erred when
it refused to instruct the jury on the sixth element. Id. at 336-37. We rejected the
defendant’s argument and agreed with the committee that the sixth element was
redundant and that the criminal intent was included in the third element. Id. at
337-38. We concluded “[t]he instruction thus correctly states the intent element
for the offense of theft by contractor.” Id. at 338. “The intent establishing the
violation is the intent to use moneys subject to a trust for purposes inconsistent
with the trust.” Id. at 339.

¶32 After Sobkowiak was decided, the supreme court decided Tri-Tech,
254 Wis. 2d 418. Tri-Tech considered whether the treble damages remedy was
available for civil theft by contractor and, if so, what proof was required. Id., ¶1.
The court determined that to receive treble damages in a civil case the plaintiff
was required to prove the elements of criminal theft by contractor by a
preponderance of the evidence. Id., ¶24. The court then quoted the elements for
criminal theft by contractor from a case that pre-dated Sobkowiak and therefore

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No. 2021AP1772-CR

included the additional sixth element that the Sobkowiak court held was
redundant. See Tri-Tech, 254 Wis. 2d 418, ¶26.

¶33 The Tri-Tech court, however, did not consider Sobkowiak or the
pattern jury instruction. It did not determine whether the criminal intent element
was fully included in the third element of the pattern instruction and therefore the
sixth element was redundant. Rather, the Tri-Tech court’s concern related, in part,
to the circuit court’s grant of summary judgment in favor of a plaintiff for treble
damages when the plaintiff failed to make a showing that the defendant acted with
criminal intent. Tri-Tech, 254 Wis. 2d 418, ¶¶27, 31-33.

¶34 The Tri-Tech court observed that criminal theft by contractor
“requires intent to defraud, but intent is almost always proven circumstantially,
and ‘may be inferred from a defendant’s conduct.’” Id., ¶28 (citation omitted).
To prove criminal intent, the plaintiff needed to show that “the defendant
knowingly retained, concealed, or used contractor trust funds without the owner’s
consent, contrary to his authority, and with intent to convert such funds to his own
use or the use of another.” Id., ¶30. The court observed WIS. STAT.
§ 943.20(1)(b) “sets forth one acceptable method of proof: a defendant’s refusal
to pay a claim upon demand to one entitled to be paid out of trust funds is prima
facie evidence of the defendant’s intent to convert the trust funds to his own use.”
Id., ¶28.

¶35 Ultimately, the Tri-Tech court determined the plaintiff failed to meet
its burden of proof for treble damages because it had not proven criminal intent.
Id., ¶¶31-33. The court observed the fact that the defendant’s “interrogatory
answers admitted depositing the payment from The Frantz Group into a bank
account encumbered by a security interest” was “insufficient by itself to establish a

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No. 2021AP1772-CR

prima facie case of specific criminal intent.” Id., ¶32 (emphasis added) The court
noted that the interrogatory answers “did not contain factual admissions sufficient
to establish a prima facie case on criminal intent, even by way of the evidentiary
method specifically approved in the statute, that is, proof of refusal to pay
contractor funds on demand of one entitled to receive them.” Id. Further, “[t]he
interrogatories were silent as to demand and refusal to pay, and [the plaintiff] did
not submit any affidavits or any other evidentiary material in support of its
summary judgment motion.” Id.

¶36 In the present case, Wahlgren’s argument appears to be that this
sixth element, as stated in Tri-Tech—that “the defendant used the money with the
intent to convert it to his own use” is once more required and must appear within
the charging documents. Because this language is absent from the charging
documents, Wahlgren asserts the circuit court lacks subject matter jurisdiction.

¶37 We disagree. As stated previously, the Tri-Tech court did not
consider Sobkowiak or the pattern jury instruction. Rather, the Tri-Tech court
determined criminal intent was required to receive treble damages in a civil case
and depositing money in an account was “insufficient by itself to establish a prima
facie case of specific criminal intent.” Tri-Tech, 254 Wis. 2d 418, ¶¶1, 32
(emphasis added).

¶38 In any event, the charging documents do establish that Wahlgren
“used the money with the intent to convert it to his own use.” As stated
previously, each count in the amended complaint and amended information alleges
that Wahlgren, “without consent of the owners and contrary to his authority;
intentionally used any of the money for any purpose other than the payment of
claims due or to become due from the defendant for labor and materials used in

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No. 2021AP1772-CR

the improvements before all claims were paid in full.” (Emphasis added). See
Sobkowiak, 173 Wis. 2d at 337-38 (agreeing that intentionally using trust fund
money for any purpose other than the payment of claims due is personal use).

¶39 Further, the probable cause section of the amended complaint makes
repeated reference to the fact that Wahlgren was required to pay the subcontractors
with money from the trust within fifteen days, failed to do so, and continued to
request more. See WIS. STAT. § 943.20(1)(b). The amended complaint offers
examples of specific contractors asking for payment from the trust and not being
paid. See id. Owners were forced to settle some outstanding claims with
subcontractors through civil negotiations. See id. We conclude these facts and
allegations are sufficient “in themselves or together with reasonable inferences to
which they give rise, to allow a reasonable person to conclude that a crime was
probably committed and that the defendant is probably culpable.” Elverman, 366
Wis. 2d 169, ¶17 (citation omitted). The charging documents satisfied the
specificity requirement, see id., ¶18, and the circuit court had subject matter
jurisdiction over the case.

¶40 Finally, Wahlgren argues that the charging documents also failed to
include the allegation that Wahlgren “knew that the use of the money was without
the consent of the owner of the land and contrary to the defendant’s authority,”
which is the fifth element of WIS JI—CRIMINAL 1443. See WIS JI—CRIMINAL
1443 at 2. This argument was not developed in Wahlgren’s brief-in-chief. In any
event, given the discussion above, the charging documents were sufficient to
satisfy the specificity requirement and put Wahlgren on notice that he was being
accused of knowing that his use of the victims’ money for purposes other than
payment of their claims was without the victims’ consent and contrary to his
authority. See Elverman, 366 Wis. 2d 169, ¶¶17-18.

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No. 2021AP1772-CR

II. Plea Withdrawal

¶41 To withdraw a guilty plea after sentencing a defendant must
establish by clear and convincing evidence “that withdrawal of the plea is
necessary to correct a manifest injustice.” State v. McCallum, 208 Wis. 2d 463,
473, 561 N.W.2d 707 (1997). “A plea which is not knowingly, voluntarily or
intelligently entered is a manifest injustice.” State v. Giebel, 198 Wis. 2d 207,
212, 541 N.W.2d 815 (Ct. App. 1995).

¶42 Wahlgren argued that his pleas were not knowing, voluntary, or
intelligent because he was unaware of the specific criminal intent element of theft
by contractor. Similar to his argument in the preceding section, he contends the
charging documents as well as the pattern jury instruction used during his plea
colloquy did not contain the specific allegation or the material element that “the
defendant used the money with the intent to convert it to his own use.” As such,
he contends the plea colloquy was deficient (a Bangert8 violation) and that his

8
State v. Bangert, 131 Wis. 2d 246, 389 N.W.2d 12 (1986). “Bangert and its progeny
govern the circuit court at plea colloquies.” State v. Howell, 2007 WI 75, ¶26, 301 Wis. 2d 350,
734 N.W.2d 48. “A defendant may invoke Bangert only by alleging that the circuit court failed
to fulfill its plea colloquy duties.” Id., ¶27. “A Bangert motion warrants an evidentiary hearing
if (1) the motion makes ‘a prima facie showing that [the] plea was accepted without the trial
court’s conformance with [WIS. STAT.] § 971.08 or other mandatory procedures,’ … and if (2)
the motion alleges that in fact the defendant did not know or understand the information that
should have been provided at the plea colloquy.” Id. (citation omitted).

18
No. 2021AP1772-CR

attorney’s advice was deficient (a Nelson/Bentley9 violation) and he should be
permitted to withdraw his pleas. See State v. Howell, 2007 WI 75, ¶¶26, 74, 301
Wis. 2d 350, 734 N.W.2d 48.

¶43 However, as explained above, the criminal intent element was
properly alleged in the charging documents and, at the plea hearing, Wahlgren
reviewed and then admitted to these specific allegations. For each offense that he
pled guilty, he advised the court, in part, that he intentionally used the trust fund
money for a purpose other than paying the subcontractors.

¶44 As for the pattern jury instructions that were used during Wahlgren’s
plea hearing, during the plea colloquy, the parties and the court used a variation of
the WIS JI—CRIMINAL 1443 Theft by Contractor pattern jury instruction.
Specifically, they used WIS JI—CRIMINAL 1443A (Theft by Contractor:
Defendant Is a Corporate Officer—§§ 779.02(5) and 943.20(1)(b)). This
instruction was created in 2008 and is used when a general contractor is a
company and a corporate officer is liable. See WIS JI—CRIMINAL 1443A at 3.
Similar to WIS JI—CRIMINAL 1443, this pattern jury instruction also contains the
required criminal intent element:

9
Nelson v. State, 54 Wis. 2d 489, 195 N.W.2d 629 (1972) and State v. Bentley, 201
Wis. 2d 303, 548 N.W.2d 50 (1996). “[A] defendant invokes Nelson/Bentley when the defendant
alleges that some factor extrinsic to the plea colloquy, like ineffective assistance of counsel or
coercion, renders a plea infirm.” Howell, 301 Wis. 2d 350, ¶74. To entitle a defendant to an
evidentiary hearing under Nelson/Bentley, “a defendant first must allege sufficient,
nonconclusory facts in his motion that, if true, would entitle him to relief.” Howell, 301 Wis. 2d
350, ¶76. “If the defendant meets the pleading requirements, the circuit court then must look to
the record.” Id. “If the record conclusively demonstrates that the defendant is not entitled to
relief, then the circuit court in its discretion may grant or deny an evidentiary hearing.” Id., ¶77.

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No. 2021AP1772-CR

….

4. The (name) corporation misappropriated money
received from the owner.

“Misappropriate” means intentionally use any of the
money for a purpose other than the payment of claims
due or to become due from the corporation for labor or
materials used in the improvements before all claims
were paid [in full] ….

5. The defendant was responsible for the
misappropriation.

6. The misappropriation was without the consent of the
owner of the land and contrary to the corporation’s
authority.

7. The defendant knew that the use of the money was
without the consent of the owner of the land and
contrary to the corporation’s authority.

See WIS JI—CRIMINAL 1443A at 2 (emphasis added). The emphasized language
is almost identical to the intent language approved in Sobkowiak. See Sobkowiak,
173 Wis. 2d at 337-39 (reviewing WIS JI—CRIMINAL 1443 and concluding the
element that “The defendant intentionally used any of the money for a purpose
other than the payment of claims due or to become due from the defendant for
labor or materials used in the improvements before all claims were paid [in full]”
properly stated the law on criminal intent).

¶45 Finally, and as stated previously, we do not interpret Tri-Tech to
overrule Sobkowiak and change the pattern jury instructions to include an element
that was previously held to be redundant. Tri-Tech stands for the proposition that
treble damages are available for civil theft by contractor if the plaintiff proves the
elements of criminal theft by contractor, including criminal intent. Tri-Tech, 254
Wis. 2d 418, ¶1. Criminal intent is shown by proof beyond a reasonable doubt
that “The defendant intentionally used any of the money for a purpose other than

20
No. 2021AP1772-CR

the payment of claims due or to become due from the defendant for labor or
materials used in the improvements before all claims were paid [in full].”
Sobkowiak, 173 Wis. 2d at 337-39 (emphasis added). This is because “using the
trust fund money for any purpose other than paying off the lienholders is ‘personal
use.’” Id. at 337 (citation omitted); see also id. at 339 (“The intent establishing
the violation is the intent to use moneys subject to a trust for purposes inconsistent
with the trust.”).

¶46 Because the specific criminal intent element of theft by contractor
was properly discussed and admitted to at the plea hearing, Wahlgren is not
entitled to withdraw his guilty pleas. His pleas were knowing, voluntary, and
intelligent.

III. Restitution award for legal fees

¶47 Next, Wahlgren argues the circuit court erred by awarding restitution
to the victims for their legal fees. He argues both that (1) the court was precluded
from awarding restitution for legal fees in this case; and (2) the victims failed to
adequately prove entitlement to the legal fees.

¶48 Legal fees are generally not recoverable and therefore normally not
included in a restitution award. See WIS. STAT. § 973.20(5)(a). However, there is
an exception when “the incurred attorney fees are the natural and proximate result
of a wrongful act by the defendant which subjects the plaintiff to litigation with a
party other than the defendant.” State v. Anderson, 215 Wis. 2d 673, 681, 573
N.W.2d 872 (Ct. App. 1997). “It follows naturally that when a defendant defrauds
people, reasonable attorney fees expended to recover their losses from parties who
are civilly or criminally liable may be awarded as restitution.” Id. at 682.

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No. 2021AP1772-CR

¶49 Wahlgren argues legal fees could not be awarded as restitution
“because there was no finding that Mr. Wahlgren fraudulently or wrongfully
caused the victims to incur legal expenses[.]” We disagree. Wahlgren pled guilty
to three counts of criminal theft by contractor and admitted to intentionally using
the victims’ money for a purpose other than the payment of claims due. See WIS.
STAT. § 943.20(1)(b). The legal fees that the victims incurred as a result of
litigation with third parties was because of Wahlgren’s criminal conduct and may
be included in the restitution award.

¶50 Wahlgren then argues the circuit court erred in awarding legal fees
because the victims failed to meet their burden of proof. At a restitution hearing,
the burden is on the victim to demonstrate the amount of loss, by a preponderance
of the evidence. WIS. STAT. § 973.20(14)(a). Proof by a preponderance of the
evidence means that the victim must show that it is “more likely than not” that the
victim incurred the amount of restitution requested. See State v. Rodriguez, 2007
WI App 252, ¶18, 306 Wis. 2d 129, 743 N.W.2d 460.

¶51 The restitution hearing is not treated as a formal trial: “strict
adherence to the rules of evidence and burden of proof” is not required. State v.
Johnson, 2005 WI App 201, ¶14, 287 Wis. 2d 381, 704 N.W.2d 625. We review
the restitution award for an erroneous exercise of discretion. Id., ¶10. Thus, we
will uphold an award where the circuit court “logically interpreted the facts,
applied the proper legal standard and used a demonstrated, rational process to
reach a conclusion that a reasonable judge could reach.” Id. In cases where the
circuit court inadequately sets forth its reasoning, or fails to fully explain its
ruling, we “independently review the record to determine whether it provides a
basis for the [circuit] court’s exercise of discretion.” State v. Pharr, 115 Wis. 2d
334, 343, 340 N.W.2d 498 (1983).

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No. 2021AP1772-CR

¶52 Here, the court awarded $144,051.17 in legal fees and costs.
Wahlgren complains the evidence presented at the restitution hearing was
insufficient because the victims failed to produce meaningful itemized invoices,
other documentation, or specific testimony supporting their claimed legal fees.

¶53 We disagree. In support of Lake Country Bible Church’s claim for
$32,631, L.A. testified that the church retained a law firm to address “the fact that
work was not getting done” and to address “liens being filed against the building”
and three or four “foreclosure judgments that were pending.” L.A. testified that,
although the itemized bills were not in the courtroom, all of the requested legal
fees were fees that had been incurred since the church had to re-engage the law
firm to deal with those problems.

¶54 We recognize that L.A. conceded the church also hired the law firm
to get the village’s approval for the project, and, because the itemized bills were
not in the courtroom, L.A. could not say for sure whether that fee was included in
the $32,631 amount. The circuit court awarded the full amount based in part on
L.A.’s testimony that the legal fees requested were from the time period following
the church’s re-engagement with the law firm to handle the problems caused by
Wahlgren’s misappropriation. It is reasonable to infer from the record that the
village approval for the project happened before construction commenced and
before the church had to re-engage its law firm to handle the misappropriation.
See Pharr, 115 Wis. 2d at 343. The court’s award of legal fees did not amount to
an erroneous exercise of discretion. See Johnson, 287 Wis. 2d 381, ¶10.

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No. 2021AP1772-CR

¶55 As for Lemberg, Lemberg sought $131,844 in restitution, which
included $21,974 in legal fees.10 In support, Lemberg attached a civil judgment,
which stated that Lemberg was entitled to recover $131,844 from Wahlgren-
Schwenn. A different circuit court had therefore already determined this amount
was due and owing. The court’s award of legal fees to Lemberg was supported by
the record and did not amount to an erroneous exercise of discretion. See id.

¶56 Emjay sought $33,974 in legal fees. The testimony established the
legal fees were incurred exclusively to address liens that were filed as a result of
Wahlgren’s failure to pay subcontractors. Similarly, Noble sought $55,472.17 in
legal fees for work performed when it learned that subcontractors were not getting
paid and began working with attorneys “to try to deal with the liens and get
resolution.” Noble also included invoices with redacted itemized descriptions for
almost all of the legal fees. The court’s award of legal fees to both Emjay and
Noble was supported by the record and did not amount to an erroneous exercise of
discretion. See id.

¶57 In short, the testimony and exhibits from the restitution hearing
established the legal fees were incurred because the victims had to engage in
litigation with third parties due to Wahlgren’s criminal conduct. The restitution
was properly awarded.

10
Lemberg also sought recompense for $20,000 for internal hourly costs for its
employee’s time to try to obtain payment from Wahlgren. The circuit court found that to be an
unreliable “looking-back estimate,” and disallowed the $20,000.

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No. 2021AP1772-CR

IV. Resentencing

¶58 Finally, Wahlgren argues he is entitled to resentencing. His
argument is premised on this court reducing the restitution award by the amount
awarded for legal fees. Wahlgren argues the amount of restitution owed was a
factor the court considered in fashioning its sentence and if this court reduces the
restitution award, his sentence should be modified. Because we did not reduce the
restitution award, we need not consider this argument. See State v. Blalock, 150
Wis. 2d 688, 703, 442 N.W.2d 514 (Ct. App. 1989) (cases should be decided on
narrowest possible ground).

By the Court.—Judgment and order affirmed.

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

25