Class Actions Against Governmental Entities – Notice-of-Claim Requirements
Townsend v. Neenah Jt. Sch. Dist., 2014 WI App 117 (filed 22 Oct. 2014) (ordered published 18 Nov. 2014)
HOLDING: The notice of claim filed in this class action against a governmental entity satisfied the requirements of Wisconsin’s notice-of-claim statute.
SUMMARY: The case involves the intersection of class actions against governmental entities with Wisconsin’s notice-of-claim statute. As helpfully explained by the court of appeals in its introduction to this decision, “[w]hen one thinks of a ‘class action,’ what comes to mind is an attorney filing a claim on behalf of many claimants, most of whom the attorney does not even know, much less represent. In Wisconsin, that type of class action, the type with unnamed claimants, is never possible against the government because claimants against the government must give notice of their identities and their claims before filing suit. By definition unnamed claimants cannot identify themselves and their claims before filing suit” (¶ 1).
Prof. Daniel D. Blinka, U.W. 1978, is a professor of law at Marquette University Law School, Milwaukee.
Prof. Thomas J. Hammer, Marquette 1975, is a law professor and Director of Clinical Education at Marquette University Law School, Milwaukee.
“Not all class actions, however, are the type with unnamed claimants. Some class actions are on behalf of a large number of individual, named claimants asserting similar claims. Nothing in Wisconsin law bars this other type of class action, sometimes called a ‘mass action,’ against the government, so long as the claimants gave notice of their claims before suing” (¶ 2).
This lawsuit was brought by teachers in the Neenah Joint School District (the District), who challenged the District’s decision to amend their retirement plan. Plaintiffs Townsend and Moriarty and four other teachers filed the complaint “on behalf of themselves and all other persons similarly situated.” They asserted that, before filing the lawsuit, they served the District with a notice of their claims as required by Wis. Stat. section 893.80(1d), and they attached a copy of their notice of claim to the complaint.
The body of the notice of claim named Townsend and Moriarty, but the notice included an attached spreadsheet listing the names of all the teachers in the class and their respective damages claims; of significance is that the notice was signed by an attorney “for Claimants and Class” (emphasis added). The notice also advised the District that the claim was being submitted as a class-action claim pursuant to Wis. Stat. section 803.08 (Wisconsin’s class-action statute). The circuit court dismissed the claims of all plaintiffs except Townsend and Moriarty, concluding that nothing in the notice of claim stated they had authority to bring a claim on behalf of the other members of the class.
In a decision authored by Chief Judge Brown, the court of appeals reversed the circuit court, concluding that the plaintiffs complied with the notice-of-claim statute. To substantially comply with Wis. Stat. section 893.80 (and substantial compliance is all that is required (see ¶ 22)), a notice must satisfy two related but distinct requirements.
“The first subsection of the statute [Wis. Stat. § 893.80(1d)(a)] imposes a ‘notice of injury’ requirement of ‘written notice of the circumstances of the claim signed by the party, agent or attorney … served on’ the governmental body in question within 120 days after the event causing the injury. The second subsection [Wis. Stat. § 893.80(1d)(b)] imposes a ‘notice of claim’ requirement that notice of the claimant’s identity and address, along with an itemized statement of relief sought, was presented to the proper person at the governmental body and was denied” (¶ 21) (citations omitted). Failure to comply with the first requirement does not bar an action if the governmental body had actual notice of the claim and was not prejudiced by the failure to give the required notice (see ¶ 24).
In this case, compliance with the first requirement of Wis. Stat. section 893.80 (the notice of injury) was not disputed. As for the second requirement of section 893.80 (the notice of claim), the appellate court concluded that the notice and its attachments satisfied the four mandates of section 893.80(1d)(b): the notice stated each claimant’s name and address, itemized the relief sought, was presented to the appropriate clerk, and was disallowed by the governmental body in question.
The circuit court was concerned that the notice of claim did not assert that Townsend and Moriarty had authority to bring the claims on behalf of other members of the class (those named in the list attached to the notice of claim).
Authority “is a function of the requirement under subsec. [893.80(1d)](a) that a claim be ‘signed by the party, agent or attorney’ or, in the alternative, that the District had actual notice. Here the notice was signed by an attorney ‘for Claimants and Class,’ and the ‘class”’ was defined as the persons whose names, addresses, and claims were itemized on the attached list. If the notice of claim were a pleading in court, the attorney’s signature would have sufficed to indicate his status as representative for the identified clients and ‘need not be verified or accompanied by affidavit.’ Wis. Stat. § 802.05(1). Nothing in § 893.80(1d)(a), nor any other statute or case of which we are aware, justifies a stricter requirement for verification of an attorney’s authority to represent claimants in a notice of claim” (¶ 30).
Self-Defense – “Castle” Doctrine
State v. Chew, 2014 WI App 116 (filed 1 Oct. 2014) (ordered published 18 Nov. 2014)
HOLDING: A defendant was not within a “dwelling” for purposes of the so-called castle doctrine in self-defense law.
SUMMARY: A jury convicted the defendant of recklessly endangering safety. The judge instructed the jury on self-defense generally but declined to read an instruction on the castle doctrines codified in Wis. Stat. section 939.48(1m). This statute “generally provides that use of force is presumably justified when a person is defending himself or herself against an unlawful and forcible intruder in that person’s home” (¶ 1).
Two men entered the defendant’s apartment and beat him following an argument between the defendant and his former girlfriend. During the beating, the defendant somehow armed himself with a gun and shot both men in the leg. As they fled the building, the defendant ran after them, firing again as they ran through the parking lot – these last shots were the basis of the reckless-endangerment charge.
The court of appeals affirmed in an opinion authored by Judge Neubauer. The castle doctrine is a statutory presumption that endorses the use of deadly force under narrow circumstances. The two attackers in this case were no longer in the defendant’s dwelling when he fired the shots as they ran in the parking lot (see ¶ 10).
“While the statute lists several parts of a residential lot that are part of ‘dwelling,’ it tellingly does not include a parking lot. … An apartment building parking lot … is shared by all the tenants” (¶ 12). It is not “property over which the actor has exclusive control” (id.). While the defendant “may have a right to park there, the parking lot was not part of his own dwelling” (id.).
“The castle doctrine does not justify continued use of deadly force against an intruder when that intruder is no longer in the actor’s dwelling” (¶ 14).
Juveniles – Interrogation – Recordings
State v. Joel I.-N., 2014 WI App 119 (filed 7 Oct. 2014) (ordered published 18 Nov. 2014)
HOLDING: An unrecorded statement by a 14-year-old boy regarding an armed robbery fell within the public-safety exception to the recording requirement; the record also showed that the boy properly waived his rights.
SUMMARY: Joel, age 14, was part of a group that robbed a woman at knife point. During a police search for the suspects, a police dog found Joel hiding under a tarp in a backyard. The dog bit Joel while apprehending him. Joel was taken by ambulance to a nearby hospital for treatment of his wounds; during the ride he waived his Miranda rights and provided police with information about the robbery. The statement, however, was not recorded as required by statute because the police officers had no recording equipment in the ambulance. The circuit court denied Joel’s motion to suppress his statements.
The court of appeals affirmed in an opinion authored by Judge Brennan. Statements by juveniles must be recorded. Wis. Stat. § 938.31(3)(b). An exception exists, however, when an exigent-public-safety circumstance prevents the recording of a statement. Observing that this is the first case construing the exception, the court held the exception applied because of “the urgent need to apprehend armed robbery suspects who were potentially still in the area and the undetermined length of time it would have taken” for police officers to obtain recording equipment (¶ 21).
The record also supported the trial judge’s findings that Joel’s statement was made knowingly, intelligently, and voluntarily despite his age (14 years), his “preference” for the Spanish language, and his dog-bite wound. Particularly pertinent was Joel’s later exercise of his right to silence back at the police station when police officers sought to question him again (see ¶ 31).
Deportation Consequences – Effective Assistance of Counsel
State v. Ortiz-Mondragon, 2014 WI App 114 (filed 7 Oct. 2014) (ordered published 18 Nov. 2014)
HOLDING: Defense counsel did not perform deficiently when he failed to advise the defendant that his guilty plea would result in deportation and permanent inadmissibility.
SUMMARY: The defendant pleaded guilty to several crimes, including substantial battery as an act of domestic violence. Later, he sought to withdraw his guilty plea, arguing that his attorney was ineffective for failing to inform him his plea would result in mandatory deportation and permanent inadmissibility to the United States; instead, the attorney merely informed him that these consequences were a possibility. He asserted his conviction for substantial battery as an act of domestic abuse made him ineligible to apply for cancellation of removal from the United States because the crime is considered a crime involving moral turpitude and is not eligible for any exception.
Ortiz-Mondragon argued that, pursuant to Padilla v. Kentucky, 559 U.S. 356 (2010), counsel had a duty to inform him of the mandatory immigration consequences of his plea. The circuit court denied the motion to withdraw the guilty plea, concluding that the generic immigration warning in the Plea Questionnaire and Waiver of Rights form the defendant executed and the court’s warning pursuant to Wis. Stat. section 971.08(1)(c) provided sufficient notice under Padilla.
In a decision authored by Judge Hoover, the court of appeals affirmed. It noted that the Padilla court concluded that, when the deportation consequence of a conviction is truly clear, the duty of defense counsel to give correct advice is equally clear. However, when the law is not succinct and straightforward, a criminal defense attorney need do no more than advise a noncitizen client that pending criminal charges may carry a risk of adverse immigration consequences (see ¶ 7).
The immigration statute neither defines nor gives examples of crimes of moral turpitude (see ¶ 9), and the defendant did not argue that any case has ever held that any of his crimes have been explicitly recognized as involving moral turpitude (see ¶ 11). Said the court, “this appears to be one of the ‘numerous situations in which the deportation consequences of a particular plea are unclear or uncertain.’ Accordingly, [the defendant’s] attorney did not perform deficiently by failing to unequivocally inform him that his plea would result in deportation and permanent inadmissibility” (¶ 13) (citation omitted).
Occurrence – Supplier
Wisconsin Pharmacal Co. v. Nebraska Cultures, 2014 WI App 111 (filed 29 Oct. 2014) (ordered published 18 Nov. 2014)
HOLDING: A supplier’s negligent provision of an ingredient that renders the final product unusable constitutes a covered occurrence under a commercial general liability (CGL) policy.
SUMMARY: Pharmacal contracted to provide a probiotic supplement in tablet form to a major retailer. Nebraska Cultures agreed to provide the particular probiotic to the tablet manufacturer. It was undisputed that Nebraska Cultures provided the wrong substance, which led to the recall of the tablets. Pharmacal sued various defendants, including several insurers that had issued CGL policies. Addressing coverage issues, the circuit court ruled that the CGL policies did not cover Pharmacal’s losses.
The court of appeals reversed in an opinion authored by Judge Neubauer. “At issue here is whether there is coverage for alleged damage that resulted when the wrong product was provided for incorporation into Pharmacal’s product” (¶ 13).
First, the court found physical damage to tangible property within the meaning of the policies. The tablets were discarded as “unusable” because they contained the “wrong ingredient” (¶ 17). The court distinguished case law on the economic loss doctrine, which is a remedies principle, because the issue here was insurance coverage (see ¶ 19). “A product is physically injured by the incorporation of a defective, faulty, or inadequate part that renders the other components or the whole unusable” (¶ 20).
The same mistake constituted an “occurrence” under the CGL policies. Again, the court distinguished economic loss doctrine cases (see ¶ 24). No entity intended to provide the wrong ingredient; this was not an intentional act that fell outside the scope of a covered occurrence (see ¶ 29).
Finally, the exclusion for an expected or intended injury did not preclude coverage (see ¶ 31). In this context, the court examined whether a “coverage grant excludes liability pled on a theory of breach of contract, much less its attendant economic loss remedies.” California law and “countless [other] courts” reject this contention (¶ 36). But “Wisconsin law is less clear” (¶ 37). In reviewing these cases, the court stressed that the “policy language controls – not the underlying theory of liability or its attendant remedies” (id.). Insurers should write their “business risk exclusions accordingly” (¶ 38).
Judge Reilly dissented based on Wisconsin case law holding “that a misrepresentation is not an ‘accident’ nor an ‘occurrence’” (¶ 44).
UIM Coverage – Government-Owned Vehicles – Damages Cap
State Farm Mut. Auto. Ins. Co. v. Hunt, 2014 WI App 115 (filed 2 Oct. 2014) (ordered published 18 Nov. 2014)
HOLDING: In a collision involving a county snow plow, the plaintiff’s underinsured motorist (UIM) coverage applied to damages exceeding the $250,000 statutory damages cap; government-owned vehicles were not excluded from UIM coverage under the policy.
SUMMARY: The plaintiff was severely injured when his car was struck by a county-owned snow plow. The county’s damages were capped at $250,000 by Wis. Stat. section 632.32(2)(d). State Farm refused to pay for damages exceeding the statutory cap (the plaintiff claimed $5.8 million) under its UIM coverage. The circuit court granted summary judgment in favor of State Farm.
The court of appeals reversed in an opinion authored by Judge Blanchard. State Farm was mandated to provide the UIM coverage by Wis. Stat. section 632.32(4)(a)2m. The court construed the key policy language – “legally entitled to recover damages” – “to mean recovery that exceeds what insured can actually recover from tortfeasors” (¶ 22). The policy’s “plain language” in turn reflected the statute. And any ambiguity was to be construed in favor of the insured in any event (see ¶ 23).
State Farm unsuccessfully raised counter arguments, including concern about shifting responsibility from tortfeasors to the UIM carrier. Finally, the court concluded that an insurer cannot exclude government-owned vehicles in a manner that restricts UIM coverage as mandated by Wis. Stat. section 632.32(4)(a)2m. (see ¶ 42).
Taxation – Fees in Lieu of Room Tax
Bentivenga v. City of Delavan, 2014 WI App 118 (filed 15 Oct. 2014) (ordered published 18 Nov. 2014)
HOLDING: A “fee in lieu of room tax” imposed on condominium owners who did not rent their units to the public was an illegal tax.
SUMMARY: The city of Delavan collects a fee in lieu of room tax from the owners of certain units in the Lodges at Lake Lawn Resort Condominium who choose not to rent their units to the public. The condominium developer agreed that a fee would be imposed on the owner of a rental unit in the affected area who did not want to rent his or her unit to the public and that the fee would be paid to the city “in lieu of the room tax which the City would have otherwise received from the rental of such Unit to the public.” The agreement established a “base fee” of $250 per month and linked future increases to the consumer price index or to the average room tax collected from the units rented to the public at the resort. The agreement provided that the condominium association would collect this fee from unit owners and remit it to the city.
The plaintiffs are condominium-unit owners who have paid this fee in recent years. They all had notice of the fee before purchasing their units. They argued in this suit against the city that the fee constitutes an illegal tax. The city replied that the fee is an authorized penalty imposed by contract. The circuit court granted summary judgment to the city. In a decision authored by Judge Reilly, the court of appeals reversed.
“A tax is an enforced proportional contribution from persons and property levied to support a government and its needs. The purpose, and not the name it is given, determines whether a government charge constitutes a tax. The primary purpose of a tax is to obtain revenue for the government as opposed to covering the expense of providing certain services or regulation. A ‘fee’ imposed purely for revenue purposes is invalid absent permission from the state to the municipality to exact such a fee” (¶ 6) (internal citations and quotations omitted).
In this case the appellate court concluded that the city’s fee in lieu of a room tax is a tax. Said the court, “[t]he ‘fee’ is enforced proportionally by the City against the Owners (via the Association) by unit based on their decisions to not rent those units to the public. The revenue collected from the Owners is not dedicated to the provision of any service or regulation but purely for general government revenue. Indeed, the revenue collected from the Owners has been designated to supplant taxes that the City contends it would otherwise be able to lawfully collect if the Owners rented out their units to the public. Increases in the fee are linked to increases in the consumer price index or average room tax collections at the resort, not the expense of any specific governmental services” (¶ 7).
“The fact that the ‘fee in lieu of room tax’ is imposed by contract does not change its character or provide the City with the authority to impose such a tax. In short, the ‘fee in lieu of room tax’ is a revenue generator for the City that is imposed on a certain class of residents without legislative permission and is therefore illegal” (¶ 11) (citation omitted).
Negligence – Damages
Dakter v. Cavallino, 2014 WI App 112 (filed 9 Oct. 2014) (ordered published 18 Nov. 2014)
HOLDING: The evidence and jury instructions supported findings of negligence and damages in a car-truck collision.
SUMMARY: A semi-truck collided with a car at an intersection. A 10-day trial centered on fault. A jury assigned causal negligence as follows: 65 percent to the truck driver and 35 percent to the car’s driver. It also awarded approximately $30,000 in damages for nursing services to the wife of the car’s driver.
The court of appeals affirmed in an opinion authored by Judge Blanchard. First, the court rejected the truck driver’s claim that the car’s driver was more negligent as a matter of law. To the contrary, case law rejects the idea “that any driver who fails to yield a right-of-way to any oncoming driver is more negligent than the oncoming driver, as a matter of law” (¶ 21).
The discussion is necessarily fact-intensive but was succinctly summed up by the plaintiff’s attorney: “[Y]ou can’t yield to something you can’t see” (¶ 29). In sum, the evidence supported the verdict.
The court also parsed several jury instructions. The “truck driver instruction” explained the standard of care with respect to a professional truck driver. The court assumed without deciding that it might have erroneously suggested that truck drivers are held to a higher standard of care than ordinary drivers, but concluded that any error was not prejudicial for a host of reasons (see ¶ 45). A second disputed instruction, dealing with passing on the right, was proper.
The circuit court also properly excluded testimony by a deputy sheriff about the cause of the collision. The deputy’s opinion would have unhelpfully incorporated other opinions by accident-reconstruction experts for both sides as well as testimony by eyewitnesses (see ¶ 71). Finally, the jury properly awarded the wife of the car’s driver more than $30,000 in damages for nursing services despite there being no evidence about the dollar value of such services. Whatever the merits of the argument, it was forfeited by failing to timely raise it at the circuit court (see ¶ 77).