author: DEININGER, J.

text:
    Rsidue, L.L.C., Plaintiff-Respondent, v. Michael R. Michaud, Defendant-Appellant.

    Court of Appeals

      No. 2005AP1299.

      Submitted on briefs January 19, 2006.

      Decided July 13, 2006.

    2006 WI App 164
    (Also reported in 721 N.W.2d 718.)

      On behalf of the defendant-appellant, the cause was submitted on the briefs of Thad M. Gegner of Freund Law Office, Eau Claire.
    On behalf of the plaintiff-respondent, the cause was submitted on the brief of Edward J. Reiser, Jr., Kenneth R. Nowakowski and Lisa Arent of Whyte Hirschboeck Dudek, S.C., Milwaukee.
    Before Vergeront, Deininger and Higginbotham, JJ.

       Petition to review denied 10/10/06.

   DEININGER, J.

¶ 1. Rsidue, L.L.C., purchased Michael Michaud's overdue credit card account and brought this action to collect the amount due on it. The circuit court ordered the entry of judgment against Michaud. He appeals, claiming the circuit court erred in denying his motion to dismiss Rsidue's complaint for failure to comply with the pleading requirements set forth in Wis. Stat. § 425.109(1) (2003-04). We conclude that Rsidue is not a "creditor" within the meaning of the Wisconsin Consumer Act and is thus not subject to the pleading requirements of § 425.109(1). Accordingly, we affirm.

BACKGROUND

¶ 2. Household Bank of North America issued Michaud a credit card in 1991. He used the card and made regular payments on the account for several years. In 2001, however, Michaud defaulted by failing to timely make required payments on the account balance. He tried unsuccessfully to work out a payment plan with Household. Household sold Michaud's account in January 2003 to Collins Financial Services, Inc., which, in turn, sold the account to Rsidue. Rsidue's attorney sent Michaud a letter in March of 2003 telling him that Rsidue had acquired the credit card account from Household Bank, that the account balance stood at $10,912.02, and that he could cure his default on the account by remitting $2,353.01.

¶ 3. Rsidue filed this collection action in October 2003. It identified itself in an amended complaint as "the current holder" of the credit card account and sought to recover the following amounts plus additional interest, court costs and attorney fees:

¶ 4. Michaud moved to dismiss Rsidue's amended complaint because it allegedly failed to comply with Wis. Stat. § 425.109(1)(d), which requires certain complaints to include "the figures necessary for computation of the . amount" due the plaintiff. Rsidue argued in opposition to Michaud's motion that it was not subject to the pleading requirements of § 425.109 because it was not a "creditor" within the meaning of the Wisconsin Consumer Act (WCA), Wis. Stat. chs. 421-427. Alternatively, Rsidue claimed that its amended complaint complied with § 425.109(1). The circuit court accepted Rsidue's second argument and denied Michaud's motion to dismiss, concluding that Rsidue had "fully complied" with the requirements under Wis. Stat. § 425.109(1) as discussed in Household Finance Corp. v. Kohl, 173 Wis. 2d 798, 496 N.W.2d 708 (Ct. App. 1993). After a trial on damages, the court entered an order directing that judgment be entered in favor of Rsidue for $8,344.00. Michaud appeals.

ANALYSIS

¶ 5. The principal question in this appeal is whether Rsidue's complaint must comply with the requirements of Wis. Stat. § 425.109(1). Because the pleading requirements under § 425.109(1) apply to a "complaint by a creditor," see id., our answer to the question turns in large measure on whether Rsidue is a "creditor" within the meaning of the § 425.109. Thus, the question before us is one of statutory interpretation, a question we decide de novo. See Gold v. City of Adams, 2002 WI App 45, ¶ 7, 251 Wis. 2d 312, 641 N.W.2d 446.

¶ 6. When interpreting a statute, we must assume that the legislature expressed its intent in the statutory-language it chose to enact. State ex rel. Kalal v. Circuit Court for Dane County, 2004 WI 58, ¶ 44, 271 Wis. 2d 633, 681 N.W.2d 110. A court must give statutory language its common, ordinary, and accepted meaning, except that technical or specially-defined words or phrases are given their technical or special definitional meaning. Id., ¶ 45. If our analysis of the statutory language yields " 'a plain, clear statutory meaning, then there is no ambiguity, and the statute is applied according to this ascertainment of its meaning.'" Id., ¶ 46 (citation omitted).

¶ 7. Wisconsin Stat. § 425.109(1) provides, among other things, that a "complaint by a creditor to enforce any cause of action arising from a consumer credit transaction shall include . . . [t]he actual or estimated amount... that the creditor alleges he or she is entitled to recover and the figures necessary for computation of the amount. . . ." Section 425.109(1)(d) (emphasis added). For purposes of the WCA, which includes Wis. Stat. ch. 425, a "creditor" is "a merchant who regularly engages in consumer credit transactions or in arranging for the extension of consumer credit by or procuring consumer credit from 3rd persons." Wis. Stat. § 421.301(16). Thus, under the controlling "special" definition of the term, an entity is a "creditor" if it is a "merchant" and "regularly engages" in at least one of three activities: (a) "consumer credit transactions"; (b) "arranging for the extension of consumer credit by" third persons; or (c) "procuring consumer credit from" third persons.

¶ 8. Rsidue does not dispute that the obligation upon which it pursued Michaud arose out of a "consumer credit transaction." It also does not dispute that the original owner or creator of the credit card account, Household Bank, "regularly engages in consumer credit transactions" and is thus a "creditor" within the meaning of Wxs. Stat. § 425.109(1). Finally, neither Michaud nor Rsidue challenges the circuit court's description of Rsidue as being "in the business of purchasing consumer debt and acquiring the right to pursue the debtors for the past due balances."

¶ 9. Rsidue contends that Wis. Stat. § 425.109(1) does not apply to its complaint. Notwithstanding the fact that it seeks in this action to enforce an obligation arising from a consumer credit transaction, Rsidue maintains it does not have to comply with § 425.109(1) because its business activities do not come within those that would render it a "creditor" under the WCA. Therefore, according to Rsidue, the pleading requirements at issue, which apply only to a "complaint by a creditor," do not apply to Rsidue's complaint. We thus consider whether the record establishes that Rsidue regularly engages in any of the three activities that would render it a creditor within the meaning of Wis. Stat. §§ 421.301(16) and 425.109(1).

¶ 10. We first address whether Rsidue can be said to "regularly engaged in consumer credit transactions." See § 421.301(16). A "consumer credit transaction" is a transaction whereby "real or personal property, services or money is acquired ["for personal, family or household purposes," see Wis. Stat. § 421.301(17)] on credit and the customer's obligation is payable in installments or for which credit a finance charge is or may be imposed." Section 421.301(10). A consumer credit transaction can include a "consumer credit sale," whereby goods or services are sold on credit payable in installments or subject to a finance charge. See § 421.301(9). It can also include a "consumer loan," which is a loan made by a lender that is either subject to a finance charge or is repayable in installments. See § 421.301(12).

¶ 11. Rsidue contends that, because it neither sells goods or services to consumers on credit nor otherwise lends money to consumers, it does not "engage," regularly or otherwise, "in consumer credit transactions." We agree. We conclude that Rsidue does not meet the first definitional criterion for being a "creditor," and we note that Michaud does not argue to the contrary. Similarly, there appears to be no dispute that Rsidue also does not regularly engage "in arranging for the extension of consumer credit by" third persons. See Wis. Stat. § 421.301(16). Thus, only the final activity specified in § 421.301(16) remains a possibility— regular engagement in procuring consumer credit from third persons.

¶ 12. Michaud contends that Rsidue meets the third definitional criterion of Wis. Stat. § 421.301(16) because, in acquiring defaulted consumer credit obligations from creditors, Rsidue "regularly engages in. .. procuring consumer credit from" third persons as set forth in Wis. Stat. § 421.301(16). From the outset, we note that we find Michaud's interpretation somewhat strained. We question whether buying and attempting to collect bad debts would commonly or ordinarily be referred to as "procuring consumer credit." The term, "procuring consumer credit," seems to be more applicable to the activities of a loan broker or other intermediary, who does not lend money him or herself but who brings together prospective borrowers and willing lenders.

¶ 13. The applicable statutory definition of "credit" confirms our view that Michaud's proffered interpretation is unreasonable. " 'Credit' means the right granted by a creditor to a customer to defer payment of debt, to incur debt and defer its payment or to purchase goods, services or interests in land on a time price basis." Wis. Stat. § 421.301(14). Based on the record before us, we cannot conclude that Rsidue either grants consumers the rights "to defer payment of debt, to incur debt" or to purchase property or services on "a time price basis," or that it procures these rights from others on behalf of consumers. Quite simply, the rights in question are granted by other entities, such as Household Bank, before Rsidue even enters the picture. Rsidue cannot be said to be "procuring consumer credit" granted by its predecessors in interest.

¶ 14. We conclude that what Rsidue regularly procures from creditors is not consumer credit but the obligations of consumers to repay debts arising from credit previously granted to them by others. We therefore agree with Rsidue that it does not regularly engage in "procuring consumer credit" from third persons. Accordingly, we also conclude that, because Rsidue does not regularly engage in any of the activities that would render it a "creditor" within the meaning of Wis. Stat. §§ 421.301(16) and 425.109(1), the pleading requirements set forth in the latter statute for a "complaint by a creditor" do not apply to the complaint in this action.

¶ 15. Our inquiry regarding the scope of Wis. Stat. § 425.109(1) is not at an end, however. Michaud argues that we implicitly held in Household Finance Corp. v. Kohl, 173 Wis. 2d 798, that the pleading requirements of § 425.109(1) apply to complaints filed by "debt purchasers" like Rsidue regardless of whether they are creditors. The consumers in Kohl purchased a computer on credit from American TV¡ which in turn assigned its rights under the credit agreement to Household Finance Corporation, the plaintiff in the action. Id. at 799. Without discussing whether the plaintiff was a "creditor" within the meaning of Wis. Stat. § 421.301(16), we applied the pleading requirements of § 425.109(1) to Household's complaint and found it lacking. See id. at 802-03.

¶ 16. Michaud would have us conclude from the lack of any mention in Kohl of the nature of the plaintiffs business activities that we necessarily decided that any entity that acquires a consumer credit obligation and commences a legal action against the consumer to collect it becomes subject to the pleading requirements of Wis. Stat. § 425.109(1). We cannot make the leap Michaud requests. We did not discuss in Kohl whether Household Finance was a "creditor" to whom the statutory pleading requirements apply because Household Finance apparently did not claim, as Rsidue does here, that it was not a creditor subject to the requirements of § 425.109(1).

¶ 17. There is a more important reason, however, that we cannot rely on our silence in Kohl regarding whether the plaintiff in that case was a "creditor" as a basis for now concluding that the requirements of Wis. Stat. § 425.109(1) apply to all complaints in actions to enforce obligations arising from consumer credit transactions. To do so would require us to ignore the words "by a creditor" in § 425.109(1), thereby reading the statute as if the legislature had directed the pleading requirements to apply to every "complaint [] to enforce any cause of action arising from a consumer credit transaction." That, however, is not the language the legislature chose to enact. It may well be, as Michaud also argues and we discuss below, that the pleading requirements set forth in § 425.109(1) should apply, as a matter of public policy, whenever any plaintiff sues a consumer to enforce an obligation arising out of a consumer credit transaction. Such a conclusion, however, finds no support in the language of § 425.109(1) as presently enacted and is thus beyond our reach.

¶ 18. Michaud next contends that Rsidue should be held to the pleading requirements of Wis. Stat. § 425.109(1) because it is an assignee that succeeded to all of the rights — and liabilities — of a "creditor" in a consumer credit transaction. Michaud seeks to rely on Wis. Stat. § 422.407(1), which provides that "an as-signee of the rights of a creditor is subject to all claims and defenses of the customer against the assignor arising out of the transaction." Section 422.407(1). In Michaud's view, this provision means that an assignee "steps into the [creditor's] shoes" for all purposes relating to the WCA, and thus, the assignee becomes subject to the pleading requirements imposed on a creditor under § 425.109(1), regardless of whether the assignee is itself a creditor.

¶ 19. We reject this argument as well. Quite simply, Wis. Stat. § 425.109(1) does not create any "claims" or "defenses" for consumers; the statute imposes pleading requirements on creditors. Thus, the statute deals with matters of procedure, not substantive legal principles. "Claims and defenses" are substantive legal theories, which, if the necessary facts are established, allow a consumer to avoid liability on a consumer credit obligation or to recover offsetting damages from the creditor. When a defendant prevails on a "claim" or "defense," the defendant becomes entitled to a judgment on the merits in the defendant's favor, or, at a minimum, to the entry of a smaller judgment in the creditor's favor than what was sought. By contrast, although a failure to comply with the pleading requirements under §425.109(1) might hinder a creditor's ability to obtain a judgment against a consumer, see § 425.109(3), the creditor could typically cure such a pleading deficiency by amending the complaint or re-filing the action.

¶ 20. We thus conclude that Wis. Stat. §422.407(1) has no bearing on the present dispute. The legislature certainly could have extended the pleading requirements of Wis. Stat. § 425.109(1) to complaints filed by assignees of creditors. It might easily have done so by simply inserting "or its assignee" at the end of the prepositional phrase "by a creditor." However, because the legislature chose to include the "by a creditor" limitation without further extension or modification, we cannot conclude the statute imposes special pleading requirements on Rsidue because of its status as a creditor's assignee.

¶ 21. Finally, in addition to making the statutory arguments discussed above, Michaud asks us to conclude for public policy reasons that Wis. Stat. § 425.109(1) applies to Rsidue's complaint. He notes that we said the following in Kohl:

It would be contrary to the philosophy of the WCA to conclude that [Household Finance CorpJ's complaint is sufficient because it meets the requirements of notice pleadings under the Wisconsin Rules of Civil Procedure. The philosophy of the WCA is to give as much notice to consumers as is consistent with 'a realistic credit economy.' Consumers are not to be forced to conduct expensive and time-consuming discovery to learn how the creditor computed the amount due.

Kohl, 173 Wis. 2d at 801.

¶ 22. According to Michaud, if we hold that Wis. Stat. § 425.109(1) is inapplicable to actions against consumers arising out of consumer credit transactions that are brought by creditors' assignees, this would create a loophole in the statute that permits entities like Rsidue to pursue consumers in a manner that we previously concluded in Kohl is contrary to the "philosophy" of the WCA. He asks us to not create such a loophole, or, perhaps more correctly stated, to close a loophole the legislature inadvertently created when it enacted § 425.109(1). It is not our role, however, to render an interpretation of the statute that we may believe better comports with the philosophy of the WCA when there is no textual support for the interpretation, either in the statute under consideration or any others that Michaud has brought to our attention.

¶ 23. The United States Supreme Court, when asked in Crooks v. Harrelson, 282 U.S. 55 (1930), to disregard the plain language of a federal statute in order to avoid an allegedly absurd result, explained a court's proper response when confronted with a statute whose language produces an arguably undesirable consequence:

Courts have sometimes exercised a high degree of ingenuity in the effort to find justification for wrenching from the words of a statute a meaning which literally they did not bear in order to escape consequences thought to be absurd or to entail great hardship. But an application of the principle so nearly approaches the boundary between the exercise of the judicial power and that of the legislative power as to call rather for great caution and circumspection in order to avoid usurpation of the latter. It is not enough merely that hard and objectionable or absurd consequences, which probably were not within the contemplation of the framers, are produced by an act of legislation. Laws enacted with good intention, when put to the test, frequently, and to the surprise of the lawmaker himself, turn out to be mischievous, absurd, or otherwise objectionable. But in such case the remedy lies with the lawmaking authority, and not with the courts.

Id. at 60 (citations omitted).

¶ 24. If Justices of the Supreme Court are not exempt from the need to exercise "great caution and circumspection in order to avoid usurpation" of legislative power, neither are the members of this court. Accordingly, even though we may sympathize with Michaud's belief that our conclusion regarding the limited scope of Wis. Stat. § 425.109(1) is not in keeping with the public policy underlying the WCA, we are not free to rewrite the statute in the way we believe the legislature should have written it, or might have written it, had the present circumstances been brought to the legislature's attention.

CONCLUSION

¶ 25. For the reasons discussed above, we conclude Rsidue is not a "creditor" within the meaning of Wis. Stat. §§ 421.301(16) and 425.109(1). The latter statute, therefore, imposes no special pleading requirements on Rsidue's complaint and the circuit court did not err in denying Michaud's motion to dismiss.

By the Court. — Order affirmed.

       All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise noted.

       "Merchant" is also a statutorily defined term. See Wis. Stat. § 421.301(25). Because we conclude that Rsidue does not regularly engage in one of the three activities that would make it a "creditor," we need not decide whether Rsidue is a "merchant."

       Michaud's credit card account appears to have been a "consumer loan."

       As we have explained, Rsidue does not dispute that it is the assignee of a "creditor."

       Rsidue advances another reason that Wis. Stat. § 422.407(1) does not render Wis. Stat. § 425.109(1) applicable to its complaint. It asserts that the underlying obligation in this case is a "consumer loan," more specifically, a consumer loan that is not an "interlocking consumer loan." See Wis. Stat. §§ 421.301(12) (defining "consumer loan") and 422.408(3) (defining "interlocking consumer loan"). Rsidue argues that, because § 422.407(1) expressly does not apply to a "consumer loan which is not an interlocking consumer loan," Rsidue is not, by virtue of the statute, subject to claims and defenses Michaud might have against Household Bank. Because we conclude that § 425.109(1) does not create a "claim or defense," we need not decide whether the obligation Rsidue sought to enforce comes within the exception to the applicability of § 422.407(1).

       Rsidue also argues that its amended complaint complied with Wis. Stat. § 425.109(l)(d), and, further, that § 425.109(3) prohibits only the entry of a default judgment on an insufficient complaint but does not affect a plaintiffs ability to obtain a judgment upon proper proof of the defendant's obligation and the amount due. Given our conclusion that § 425.109(1) does not apply to Rsidue's complaint, we do not address Rsidue's alternative rationales for sustaining the entry of a judgment against Michaud in this action.


source: Caselaw Access Project

author: CANE, C.J.

license: Public Domain

text:
    Grace Gumz, James Gumz, Michael Gumz and Susan Gumz, Plaintiffs-Respondents-Cross-Appellants, v. Northern States Power Company d/b/a Xcel Energy, Defendant-Appellant-Cross-Respondent.

    Court of Appeals

      No. 2005AP1424.

      Submitted on briefs May 22, 2006.

      Decided July 18, 2006.

    2006 WI App 165
    (Also reported in 721 N.W.2d 515.)

      On behalf of the defendant-appellant-cross-respondent, the cause was submitted on the briefs of Michael F. O'Brien oí Weld, Riley, Prenn & Ricci, S.C. of Eau Claire.
    On behalf of the plaintiffs-respondents-cross-appellants, the cause was submitted on the consolidated briefs of Scott Lawrence of Lawrence & Des Rockers, S.C. of St. Nazianz; Gregory J. Cook of Greg Cook Law Offices, S.C. of Milwaukee; and Kasdorf, Lewis & Swietlik, S.C. of Milwaukee.
    Before Cane, C.J., Hoover, PJ., and Peterson, J.

       Petition to review granted 2/12/07.

   CANE, C.J.

¶ 1. Northern States Power Company appeals judgments and orders, entered upon a jury's verdict, in favor of James, Grace, Michael and Susan Gumz, arguing: (1) the trial court erred when it declined to give an instruction and verdict question on the statute of limitations; (2) the trial court erroneously-exercised its discretion in formulating the comparative negligence verdict question; (3) the judgments for annoyance and inconvenience must be reversed; and (4) any damages awarded must be limited to a specific time period. We disagree and affirm.

¶ 2. The Gumzes cross-appeal summary judgment in Northern's favor, dismissing their treble damages claim. They assert the court bypassed an essential element of summary judgment methodology. Again, we disagree and affirm.

Background

¶ 3. James and Michael Gumz purchased their parents' dairy herd and farm in July 1981. In 1991, the Gumzes began to notice various physical and behavioral problems with the herd. Through May 1996, the herd suffered from various health issues, poor production, and deaths. During 1992 to 1994, the cattle became thin, walked with stiff legs, and seemed sluggish.

¶ 4. The Gumzes consulted a professional herd nutritionist and veterinarian regarding the cattle's condition. The nutritionist suggested that nutrition was not the problem. He thought the problems were due to an outside factor that might be stray voltage. However, the Gumzes had the wiring checked previously by an electrician who found no problem. The cattle's condition worsened, and a veterinarian suggested testing for stray voltage.

¶ 5. Northern, the local electric utility, conducted tests in May 1996, and determined that "cow contact voltage" was below any "level of concern." The Gumzes hired an independent electrician, and he found electric current on the farm grounding system originating from Northern. An isolation transformer was installed, and the herd improved substantially.

¶ 6. The herd had some of the same problems recur from 1998 to 1999. Again, Northern found no problem with stray voltage. The Gumzes again hired an independent electrical tester who determined that the stray voltage was originating from Northern's distribution system.

¶ 7. The Gumzes commenced this action on December 21, 2001. They asserted claims for negligence, nuisance, strict liability, and trespass. They also claimed treble damages pursuant to Wis. Stat. § 196.64. The complaint further alleged damage to the dairy herd, entitlement to nuisance damages for annoyance and inconvenience, and personal injury to James. The trial court dismissed the claims for strict liability, trespass, personal injury, and treble damages. The court later denied Northern's motion for summary judgment based upon the six-year statute of limitations under Wis. Stat. § 893.52.

¶ 8. The case proceeded to trial, and the jury found Northern causally negligent, that the Gumzes were not negligent, and that Northern maintained a nuisance. The jury awarded damages totaling $532,336. All post-trial motions were denied.

Discussion

I. Appeal

A. Jury instruction regarding reasonable diligence and the statute of limitations

¶ 9. Northern argues that the trial court erred by failing to submit a special verdict question and jury instruction on the issue of whether the Gumzes acted with reasonable diligence. Northern asserts that, as a matter of law, the Gumzes failed to exercise reasonable diligence and, thus, their claims are barred by the six-year statute of limitations. A trial court has wide discretion in framing the special verdict. We shall not reverse unless the question does not fairly represent the material issue of fact to the jury. Runjo v. St. Paul Fire & Marine Ins. Co., 197 Wis. 2d 594, 602-03, 541 N.W.2d 173 (Ct. App. 1995). The answer to a jury question cannot be altered unless no credible evidence exists to support it. Wis. Stat. § 805.14(1).

¶ 10. In Allen v. PSC, 2005 WI App 40, ¶ 8, 279 Wis. 2d 488, 694 N.W.2d 420, we summarized the applicable law regarding a trial court's refusal to submit a statute of limitations question to the jury in a stray voltage case:

Wisconsin Stat. § 893.52 provides a six-year limitations period for negligence and nuisance claims. The accrual of a stray voltage claim is governed by the discovery rule. Under that rule, a plaintiffs claim accrues when the plaintiff objectively knows, or with reasonable exercise of care should have known, the cause of the injury and the defendant's part in that cause. Furthermore, "[a] plaintiff can rely on the discovery rule only if he or she has exercised reasonable diligence." Reasonable diligence means "such diligence as the great majority of persons would use in the same or similar circumstances" to discover the cause of the injury. "The construction of a statute of limitations is a question of law which we review without deference to the circuit court's decision." (Citations and footnote omitted).

¶ 11. In Allen, a dairy farmer sued an electric utility, alleging the utility negligently allowed stray voltage to injure his cattle and that the utility's distribution system was a nuisance. Allen, 279 Wis. 2d 488, ¶ 1. We affirmed the conclusion of the trial court that the farmer took reasonable steps to determine the cause of the damages. Id. We also affirmed that the farmer did not have objective knowledge of the cause of the injury, until after an isolator device was installed, and the cattle's health improved. Id., ¶ 14.

¶ 12. Here, like in Allen, the trial court declined to provide a statute of limitations instruction. We noted the jury instruction and special verdict addressed the farmer's negligence, even if we had not concluded that the farmer exercised reasonable diligence as a matter of law. The jury was instructed:

The failure to exercise ordinary care to discover an unsafe electrical condition on the farm, even if it does not involve his own equipment, can also be negligence. However, if the defective electrical condition on the farmer's equipment or facilities is such that it was not known or would not have been [dis] covered by the exercise of ordinary care, the farmer is not negligent in permitting it to exist in such condition.

Id., ¶ 17. The special verdict question asked the following: "Was [the farmer], his agents or employees negligent in the use of electricity on his farm?" The jury answered "No." Id. We noted, "In order to reach that conclusion, the jury had to determine that [the farmer] exercised ordinary care 'to discover an unsafe electrical condition on the farm,' such as stray voltage. Thus, the question [the utility] wanted the jury to consider was, in effect, answered, and the record supports the answer." Id.

¶ 13. Similar to Allen, even if we assume a special verdict question regarding diligence was required here, we conclude that Question 3 of the special verdict, when considered with the jury instruction, effectively asked whether the Gumzes acted with reasonable diligence, so another question related to this issue was unnecessary. Question 3 of the special verdict and its answer were the following:

Question #3: Were Gumz[es] negligent in the use and/or discovery of electricity on their farm?
Answer: No

The jury instruction included a modified Wis JI — Civil 1052, which discussed the Gumzes' duty to exercise diligence. Because Question 3 addressed the diligence issue, the trial court did not err when it refused to submit the statute of limitations question to the jury.

B. Comparative negligence instruction

¶ 14. Northern next argues that the trial court erred by limiting the comparative negligence question to the Gumzes' use or discovery of electricity. Specifically, Northern requested the special verdict include the question, "Were the Gumzes negligent in the operation, maintenance or management of the dairy operation?" The trial court refused this request. Thus, according to Northern, "the special verdict improperly denied the jury the opportunity to determine what role multiple factors, including herd management, not just electricity, played in their dairy operation."

¶ 15. The form or choice of language in a special verdict question is for the discretion of the trial court. Bridgkort Racquet Club, Inc. v. University Bank, 85 Wis. 2d 706, 712, 271 N.W.2d 165 (Ct. App. 1978). A verdict will not be disturbed because the court refused or failed to form the question in a certain way, as long as the verdict exposes essential facts for a correct judgment. Olk v. Marquardt, 203 Wis. 479, 487, 234 N.W. 723 (1931). A trial court does not erroneously exercise its discretion if the special verdict questions cover all of the material factual issues. Meurer v. ITT Gen'l Controls, 90 Wis. 2d 438, 445-46, 280 N.W.2d 156 (1979).

¶ 16. We agree with the trial court that the special verdict gave Northern the opportunity to argue its theory that electricity did not cause the damage to the herd, and Northern could reinforce to the jury that the only thing that the Gumzes can recover are damages caused by the negligent service or facilities provided relative to electricity. Our holding is supported by Allen. In Allen, 279 Wis. 2d 488, ¶ 17, the comparative negligence question stated:

Was [the farmer], his agents or employees negligent in the use of electricity on his farm?
The jury answered "No."

Although Northern argues there are factual distinctions between this case and Allen, our analysis affirming the jury's answer to substantially the same comparative negligence question remains applicable.

¶ 17. In Schmidt v. Shabow, 265 Wis. 154, 60 N.W.2d 735 (1953), the supreme court explained the distinction between contributory negligence and mitigation of damages. Schmidt took her vehicle to a service station for an oil change. Id. at 155. Two days later her vehicle began producing an odd noise from under the hood while she was driving. Id. at 155-56. She attributed the noise to the vehicle's heater, which had produced a similar noise in the past. Id. at 156. She drove an additional four miles to a different service station where she was informed that the crank case contained very little oil, and, as a result, her motor was damaged beyond repair. Id. Schmidt's contributory negligence was submitted to the jury, and she was found 75% negligent for driving her car after she heard the noises. Id.

¶ 18. The supreme court stated Schmidt's conduct "was not one which called for the application of the doctrine of contributory negligence." The court concluded:

Nothing which she did at the service station can be construed as a factor contributing to the damage caused by defendant's failure. The loss to plaintiff would have resulted regardless of her conduct there. If the plaintiff is to be charged with any failure of duty it must be upon the theory that she failed after she heard the noise to so act as to mitigate the damages resulting from the defendant's omission. Her contribution to the result, if there is any contribution, was occasioned by her continuing to drive the car after she discovered the noise. Her conduct, thereafter, was such as to present an issue as to whether it added to the loss which resulted from the defendant's conduct. In other words, the issue of her negligence was not in the case. If she is to be charged with any breach of duty it must be determined to what extent, if any, she contributed to the loss, and whether she failed in her duty after she heard the noise to mitigate the damages. The most that can be said of plaintiff is that by her omission or failure she enhanced the damages.

Id. at 159.

¶ 19. Here, the Gumzes' actions with respect to their management of the herd or their dairy operations had no bearing on the damage caused by stray voltage. Any loss they sustained as a result of the stray voltage would have resulted regardless of the Gumzes1 management. Once the Gumzes demonstrated that Northern's stray voltage was a substantial cause of their injuries, Northern had the ability to argue the Gumzes' damages were not all caused by stray electricity. See Maskrey v. Volkswagenwerk Aktiengesellschaft, 125 Wis. 2d 145, 158-59, 370 N.W.2d 815 (Ct. App. 1985).

¶ 20. We conclude the trial court properly formulated the verdict to consider comparative negligence. Examining the record, the trial court appropriately crafted the verdict form to inquire regarding damages caused by electrical exposure while still providing Northern the ability to argue that other causes damaged the Gumzes or that the Gumzes failed to properly mitigate. The trial court further gave instructions on the causation of damages attributable to harmful levels of electricity and mitigation of damages.

C. Nuisance and annoyance claims

¶ 21. Northern next asserts the Gumzes' nuisance claim is barred by the three-year statute of limitations for personal injuries. Although the Gumzes argue the issue was waived, we choose to address the issue on the merits. See Wirth v. Ehly, 93 Wis. 2d 433, 444, 287 N.W.2d 140 (1980).

¶ 22. Northern contends that the nuisance claims for annoyance and inconvenience are personal injury claims. We disagree. In Krueger v. Mitchell, 112 Wis. 2d 88, 105-06, 332 N.W.2d 733 (1983), the supreme court held the following:

The final issue on review is whether a plaintiff should be permitted to recover damages for personal inconvenience, annoyance and discomfort caused by the existence of a nuisance even in the absence of any showing of monetary loss or bodily injury or illness. The Mitchells contend that because the plaintiff did not suffer actual bodily injury or property damages as a result of the aircraft noise, he has not suffered com-pensable damages. We disagree.
We believe that such damages are separately and independently recoverable in a nuisance action based on the very essence of the tort of nuisance. The tort of nuisance gives legal protection to a person's interest in the unimpaired use and enjoyment of land. This protection extends not only to the preservation of the property itself but also to its enjoyable use.

¶ 23. Further, annoyance and inconvenience do not encompass emotional distress, as Northern contends. Restatement (Second) of Torts § 821D, cmt. b (1977), instructs in part as follows:

"Interest in and use and enjoyment" also comprehends the pleasure, comfort and enjoyment that a person normally derives from the occupancy of land. Freedom from discomfort and annoyance while using land is often as important to a person as freedom from physical interruption with his use or freedom from detrimental change in the physical condition of the land itself. This interest in freedom from annoyance and discomfort in the use of land is to be distinguished from the interest in freedom from emotional distress.

¶ 24. Moreover, in Vogel v. Grant-Lafayette Elec. Coop., 201 Wis. 2d 416, 427, 548 N.W.2d 829 (1996), the supreme court, in setting forth that nuisance claims resulting in annoyance and inconvenience damages were available in stray voltage litigation, concluded "nuisance law is applicable to stray voltage claims because excessive levels of stray voltage may invade a person's private use and enjoyment of land." Again, turning to Allen, 279 Wis. 2d 488, ¶ 8, we note "Wisconsin Stat. § 893.52 provides a six-year limitations period for negligence and nuisance claims."

¶ 25. James Gumz did suffer from depression and alleged a personal injury claim as part of the original complaint in this case, but that claim was dismissed before trial, based on the three-year statute of limitations. The jury ultimately did not hear evidence regarding James's depression and resulting medical treatment. However, the jury did hear evidence regarding the time and effort he put into attending to his dairy heard over the years due to the stray voltage, which is part of the compensable annoyance and inconvenience. Therefore, the Gumzes' nuisance claim was not barred by the statute of limitations for personal injuries.

D. Limitation of time period for damages

¶ 26. Finally, Northern argues the Gumzes' damages should be limited to the period after May 1996, when Northern first received notice of the Gumzes' concerns regarding stray voltage. Northern relies on Snyder v. Oakdale Coop. Elec. Ass'n, 269 Wis. 531, 69 N.W.2d 563 (1955), a supreme court case that did not involve stray voltage. Again, the Gumzes argue this issue was waived, but we choose to address it. See Wirth, 93 Wis. 2d at 444.

¶ 27. We agree with the trial court that the damages should not be limited in the manner Northern asserts. Our holding is supported by our decision in Vogel, where the appellants argued that "upon equitable principles or as a matter of law" we should limit the period of damages in a stray voltage case. Vogel v. Grant-Lafayette Elec. Coop., 195 Wis. 2d 198, 213, 536 N.W.2d 140 (Ct. App. 1995), rev'd on other grounds, 201 Wis. 2d 416, 548 N.W.2d 829 (1996). We expressly-rejected the appellant's request that we adopt a rule limiting the time period in a stray voltage case. Id. at 214. Thus, Northern's assertion is not supported by Wisconsin law.

II. Cross-Appeal

¶ 28. The Gumzes argue that the trial court improperly granted Northern's summary judgment motion on the issue of treble damages, pursuant to Wis. Stat. § 196.64, because Northern's summary judgment motion failed to reference affidavits or other eviden-tiary matters submitted in support of Northern's motion relating to the treble damages issue.

¶ 29. We review summary judgment without deference, using the same methodology as the trial court. Green Springs Farm v. Kersten, 136 Wis. 2d 304, 315, 401 N.W.2d 816 (1987). Summary judgment is appropriate when no material facts are in dispute and the moving party is entitled to judgment as a matter of law. Wis. Stat. § 802.08. Our summary judgment methodology is well-known. First, we must determine whether the pleadings set forth a claim for relief. Baumeister v. Automated Prods., Inc., 2004 WI 148, ¶ 12, 277 Wis. 2d 21, 690 N.W.2d 1. After it has been determined a claim has been stated, we must examine the moving party's affidavits and other proof to determine whether a prima facie case for summary judgment has been established. Id. Next, if a moving party establishes a prima facie case, the opposing party must then establish that there are disputed material facts, or undisputed material facts from which reasonable alternative inferences could be drawn, which entitle the party to a trial. Id. Simply the existence of a factual dispute between the parties shall not defeat a proper summary judgment motion. Id., ¶ 11.

¶ 30. We have previously recognized that in certain circumstances "a party moving for summary judgment can only demonstrate that there are no facts of record that support an element on which the opposing party has the burden of proof, but cannot submit specific evidentiary material proving the negative." Transp ortation Ins. Co. v. Hunzinger Const. Co., 179 Wis. 2d 281, 291, 507 N.W.2d 136 (Ct. App. 1993). Also, "once sufficient time for discovery has passed, it is the burden of the party asserting a claim on which it bears the burden of proof at trial 'to make a showing sufficient to establish the existence of an element essential to that party's case.'" Id. at 291-92 (citation omitted). Further, Wis. Stat. § 802.08(3) provides:

When a motion for summary judgment is made and supported as provided in this section, an adverse party may not rest upon the mere allegations or denials of the pleadings but the adverse party's response, by affidavits or as otherwise provided in this section, must set forth specific facts showing that there is a genuine issue for trial. If the adverse party does not so respond, summary judgment, if appropriate, shall be entered against such party.

¶ 31. The Gumzes made their treble damages claim pursuant to Wis. Stat. § 196.64. Section 196.64 states the following:

(1) If a director, officer, employee or agent of a public utility, in the course of the discharge of his or her duties, willfully, wantonly or recklessly does, causes or permits to be done any matter, act or thing prohibited or declared to be unlawful under this chapter or ch. 197, or willfully, wantonly or recklessly fails to do any act, matter or thing required to be done under this chapter, the public utility shall be liable to the person injured thereby in treble the amount of damages sustained in consequence of the violation. No recovery as in this section provided shall affect a recovery by the state of the penalty prescribed for such violation.
(2) The burden of proof in an action under sub. (1) rests with the person injured to prove the case by clear and convincing evidence.

¶ 32. We conclude that the trial court properly granted summary judgment because the Gumzes failed to support their claim. Examining Northern's brief in support of their summary judgment motion, it properly supported its motion with "other proof." The brief set forth the requirements for a treble damages claim under Wis. Stat. § 196.64. Specifically, the utility must have violated a specific provision of Wis. Stat. chs. 196 and 197, and such violation must have been intentional, wanton or reckless. See Wis. Stat. § 196.64.

¶ 33. We agree with the trial court that the Gumzes have failed to provide any evidence of a willful, wanton or reckless act or omission that violates the applicable provisions of Wisconsin law. Also, the Gumzes failed to submit evidence in opposition to a Northern witness's affidavit which supports Northern's assertion that it was unaware that stray voltage ever had reached a harmful level. Although the Gumzes point out that simply a statement that a plaintiff lacks evidence may be insufficient to support a summary judgment motion, see Leske v. Leske, 197 Wis. 2d 92, 97, 539 N.W.2d 719 (Ct. App. 1995), considering the lack of any evidence supporting the Gumzes' assertion that Northern acted willfully or recklessly, summary judgment was appropriate.

By the Court. — Judgments and orders affirmed. No costs to either party.

       All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise noted.


author: WEDEMEYER, EJ.

text:
    State of Wisconsin, Plaintiff-Respondent, v. Delano L. Terrell, Defendant-Appellant.
    Court of Appeals

      No. 2005AP1499-CR.

    Oral argument June 5, 2006.

      Decided July 18, 2006.

    2006 WI App 166
    (Also reported in 721 N.W.2d 527.)

      On behalf of the defendant-appellant, the cause was submitted on the briefs of Martin E. Kohler and Brian Kinstler of Kohler & Hart, LLP, Milwaukee. There was oral argument by Brian Kinstler.

    On behalf of the plaintiff-respondent, the cause was submitted on the brief of Peggy A. Lautenschlager, attorney general, and William C. Wolford, assistant attorney general. There was oral argument by William C. Wolford.

      Before Wedemeyer, EJ., Curley and Kessler, JJ.
   WEDEMEYER, EJ.

¶ 1. Delano L. Terrell appeals from non-final orders denying his motions seeking to dismiss the charges against him. Terrell was charged with one count of misconduct in public office and one count of second-degree sexual assault; sexual contact or intercourse by a correctional staff member, contrary to Wis. Stat. § 940.225(2)(h) (2003-04). Terrell contends that the trial court erred when it denied his motions to dismiss because he is not a "correctional staff member" as that term is used within the charging statute. Because we conclude that, based on the plain meaning of the statute, Terrell is not a "correctional staff member" under the undisputed facts in this case, we reverse and remand with directions to the trial court to dismiss the charge.

BACKGROUND

¶ 2. On February 24, 2004, Terrell was employed by the Milwaukee County Sheriffs Department, working as a bailiff at the Milwaukee County Courthouse. Crystal C., an inmate at the Milwaukee House of Correction, alleged that on February 24th, she was bussed from the House of Correction to the Milwaukee County Criminal Justice Facility staging area. She testified at the preliminary hearing that Terrell took her and another female inmate from the criminal justice facility staging area to the courthouse holding cell. After some time, Terrell took Crystal from the holding cell area in the courthouse to a room with a sign that read: "Jury Room, no admittance." Terrell then led her through that door, across the room, and into a small bathroom. He closed and locked the bathroom door, and said to her, "I would fall in love with you but I'm too old." He removed Crystal's handcuffs and belly chains. According to Crystal, Terrell then lifted up her shirt and pushed her bra up, exposing her breasts. Terrell then licked and sucked her breasts, pulled down her pants and underwear and then licked her vaginal area. After that, Terrell unzipped his pants, removed his erect penis, and masturbated to ejaculation while rubbing her bare buttocks. Crystal then put her clothes back on. Shortly thereafter, Terrell put Crystal's handcuffs and belly chains back on and returned her to the holding cell area. He told her not to tell anyone about the incident. Terrell contests Crystal's account.

¶ 3. On May 13, 2004, Terrell was charged with one count of misconduct in public office and one count of second-degree sexual assault (sexual contact or intercourse by a correctional staff member). On January 14, 2005, Terrell filed a motion to dismiss on the ground that he was not a "correctional staff member" as defined by the clear language of the statute. A hearing was held on Terrell's motion on January 26, 2006. The trial court denied Terrell's motion to dismiss, ruling that the legislature intended the statute to cover deputies assigned as bailiffs.

¶ 4. On February 22, 2005, Terrell filed a second motion seeking dismissal, alleging that the term "correctional staff member" was unconstitutionally vague. Terrell included the legislative history of the statute and argued that the trial court's interpretation of the statute constituted an unforeseeable and retroactive judicial expansion of narrow and precise statutory language, rendering the statute unconstitionally vague when applied to him. The trial court again denied Terrell's motion on April 25, 2005. Written orders denying both motions were issued.

¶ 5. Terrell filed a petition with this court seeking to file an interlocutory appeal from the trial court orders and requesting a stay of the trial court proceedings. We granted Terrell's petition for leave to appeal and ordered a stay of the trial court proceedings.

DISCUSSION

¶ 6. The issue in this case is whether Terrell is a "correctional staff member" as that term is used within Wis. Stat. § 940.225(2)(h). Statutory interpretation involves a question of law, which we review independently. Reyes v. Greatway Ins. Co., 227 Wis. 2d 357, 364-65, 597 N.W.2d 687 (1999); Nelson v. McLaughlin, 211 Wis. 2d 487, 495, 565 N.W.2d 123 (1997). The purpose of statutory interpretation is to discern the intent of the legislature. McEvoy v. Group Health Coop., 213 Wis. 2d 507, 528, 570 N.W.2d 397 (1997). To determine this intent, we look first to the plain language of the statute. Id. If the language of the statute clearly and unambiguously sets forth the legislative intent, it is our duty to apply that intent to the case at hand and not look beyond the statutory language to ascertain its meaning. Reyes, 227 Wis. 2d at 365.

¶ 7. Here, the statute at issue, Wis. Stat. § 940.225(2)(h) provides that whoever "[h]as sexual contact or sexual intercourse with an individual who is confined in a correctional institution if the actor is a correctional staff member" is guilty of a Class C felony. The definitions section of this statute defines "correctional staff member" as "an individual who works at a correctional institution, including a volunteer." Wis. Stat. § 940.225(5)(ad).

¶ 8. In examining the plain language of the statute, in light of the stipulated facts of this case, we conclude that the statute does not extend to a Milwaukee County sheriffs deputy, who was assigned to work as a bailiff in the courthouse. It is stipulated by the parties that Terrell was an employee of the sheriffs department and that he was assigned to work as a bailiff in the courthouse. The courthouse is not a "correctional institution." Thus, based on the plain language of this statute, Terrell is not a "correctional staff member."

¶ 9. The State argues, however, that because Terrell, as part of his duties, enters the Milwaukee County Criminal Justice Facility to bring inmates from the staging area to the court holding cells, he does work at a correctional institution. It is undisputed that the Milwaukee County Criminal Justice Facility is a correctional institution. We cannot agree with the State's contention.

¶ 10. Terrell was assigned to work as a bailiff at the courthouse. It is undisputed that the courthouse is not a correctional institution. The plain meaning of the statutory phrase "works at a correctional institution" does not include Terrell. Although Terrell's work as a bailiff causes him to enter the criminal justice facility to move inmates from that building to the courthouse, such incidental conduct does not fall under the plain meaning of "work[ing] at a correctional institution." Rather, the plain meaning of the statutory language applies to all those whose "work" is central to the function of a correctional institution, and which takes place within the walls of the correctional institution. Thus, if Terrell had been assigned to work at the criminal justice facility, he clearly would be a "correctional staff member." His assignment, however, was not the jail, but the courthouse. To interpret the plain language otherwise would result in absurd conclusions. See State ex rel. Kalal v. Circuit Court for Dane County, 2004 WI 58, ¶ 46, 271 Wis. 2d 633, 681 N.W.2d 10 (we avoid interpretations which lead to absurd results).

¶ 11. Accordingly, we conclude that Terrell's "work" was at the courthouse. His courthouse work required him to enter the criminal justice facility to retrieve inmates. He then escorted those inmates to the court holding cell and to the courtroom for their appearances. Under these facts and circumstances, the trial court erred in concluding that Terrell was a "correctional staff member" as that term is used in the statute. The plain meaning of the statutes involved clearly applies to those who work within the criminal justice facility, not to a courthouse bailiff who enters the facility simply to move inmates to the courthouse. Terrell's counsel pointed out at oral argument in this court that if the legislature wanted to include bailiffs who have contact with inmates, it certainly could do so. The statute at issue here, however, does not extend to cover those deputies assigned to work as bailiffs in the courthouse. Defense counsel also noted that even though this particular statute does not apply, Terrell could be charged under the general sexual assault statute based on the allegations in the complaint.

¶ 12. Based on the foregoing, we reverse the orders of the trial court and direct the trial court to dismiss the complaint against Terrell based on violations of Wis. Stat. § 940.225(2)(h). We conclude that under the stipulated facts and circumstances presented in this case, Terrell does not satisfy the definition of "correctional staff member" as that term is used in the pertinent statutes.

By the Court. — Orders reversed and cause remanded with directions.

       We granted Terrell's petition for interlocutory appeal by order dated June 23, 2005.

       All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise noted.

       Based on our disposition of this case, we need not reach Terrell's second issue regarding the unconstitutionality of the statute. See Gross v. Hoffman, 227 Wis. 296, 300, 277 N.W. 663 (1938) (only dispositive issues need to be addressed).


author: PETERSON, J.

text:
    City of Prescott, Plaintiff-Appellant, v. Gary Holmgren and Kim D. Holmgren, Defendants-Respondents.

    Court of Appeals

      No. 2005AP2673.

      Submitted on briefs June 20, 2006.

      Decided July 18, 2006.

    2006 WI App 172
    (Also reported in 721 N.W.2d 153.)

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of R. Michael Waterman of Mudge Porter Lundeen & Seguin, S.C., Hudson.
    On behalf of the defendants-respondents, the cause was submitted on the brief of Warren Lee Brandt, Prescott.
    Before Cane, C.J., Hoover, PJ., and Peterson, J.

       Petition to review denied 10/10/06.

   PETERSON, J.

¶ 1. The City of Prescott appeals a summary judgment dismissing its claims against Gary and Kim Holmgren. The City argues the circuit court erred by concluding the City's claims were barred by Wis. Stat. § 893.33 because the statute does not apply to a municipality's interest in an unrecorded highway. We agree, reverse the judgment and remand for further proceedings.

BACKGROUND

¶ 2. This is a property dispute involving a segment of roadway referred to as the Lake Street turnaround. The disputed turn-around is a loop of roadway that allows vehicles to reverse direction where the public stretch of Lake Street ends and a private road begins. The City asserts the turn-around is part of Lake Street and constitutes a public highway. The Holmg-rens contend the turn-around is a private drive, situated primarily inside the surveyed boundaries of their land, which they and their predecessors in title sometimes allowed the public to use.

¶ 3. The City commenced this action in December 2004, seeking a declaration of its rights in the turnaround. The City's complaint alleged that for more than fifty years the public had used the turn-around and the City paved, maintained, improved and worked the turnaround as a public highway. The City asserted an interest in the turn-around based on three alternate theories: (1) ten years of public maintenance under Wis. Stat. § 82.31(2); (2) twenty years of prescriptive use by the public; or (3) common law dedication. The Holmgrens answered separately and denied the City's allegations.

¶ 4. The Holmgrens moved for summary judgment contending, among other things, that the thirty-year recording requirement contained in Wis. Stat. § 893.33 barred the City from asserting ownership of the turn-around. The circuit court concluded there were material issues of fact regarding all three of the City's theories. However, the court concluded that, even if the City could prove any theory, § 893.33 nonetheless barred the City's claim because its interest was never recorded. Therefore, the court granted summary judgment in the Holmgrens' favor.

STANDARDS OF REVIEW

¶ 5. We review a summary judgment independently, using the same methodology as the circuit court. Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315, 401 N.W.2d 816 (1987). Summary judgment is appropriate when there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law. Wis. Stat. § 802.08(2). We view the facts in the light most favorable to the nonmoving party. State Bank of La Crosse v. Elsen, 128 Wis. 2d 508, 511-12, 383 N.W.2d 916 (Ct. App. 1986).

¶ 6. The interpretation of a statute is a question of law, which we review independently. State v. Waushara County Bd. of Adj., 2004 WI 56, ¶ 14, 271 Wis. 2d 547, 679 N.W.2d 514. We begin with the language of the statute, and if it has a plain meaning, we apply that plain meaning without resorting to judicial construction or relying on extrinsic sources. State ex rel. Kalal v. Circuit Court for Dane County, 2004 WI 58, ¶¶ 45-46, 271 Wis. 2d 633, 681 N.W.2d 110. Where statutes appear to be inconsistent, we look for compatibility, not for conflict. "It is a cardinal rule of statutory construction that conflicts between different statues, by implication or otherwise, are not favored and will not be held to exist if they may otherwise be reasonably construed." Tamminen v. Aetna Cas. & Sur. Co., 109 Wis. 2d 536, 544, 327 N.W.2d 55 (1982) (citation omitted).

DISCUSSION

¶ 7. The issue presented is whether the Wis. Stat. § 893.33 thirty-year recording requirement can bar a municipality's interest in an unrecorded public highway. Wisconsin Stat. § 893.33(2) provides, in relevant part:

Except as provided in subs. (5) to (9), no action affecting the possession or title of any real estate may be commenced, and no defense or counterclaim may be asserted, by any person, the state or a political subdivision or municipal corporation of the state after January 1, 1943, which is founded ... upon any transaction or event occurring more than 30 years prior to the date of commencement of the action, unless ... within 30 years after the date of the transaction or event there is recorded in the office of the register of deeds of the county in which the real estate is located, some instrument expressly referring to the existence of the claim or defense, or a notice setting forth the name of the claimant, a description of the real estate affected and of the instrument or transaction or event on which the claim or defense is founded, with its date and the volume and page of its recording, if it is recorded, and a statement of the claims made.

One of the exceptions contained in Wis. Stat. § 893.33(5) provides, in relevant part, "This section also does not apply to real estate or an interest in real estate while the record title to the real estate or interest in real estate remains in the state or a political subdivision or municipal corporation of this state."

¶ 8. The City argues its interest in the turnaround is excepted from the recording requirement by the municipality-held property exception of Wis. Stat. § 893.33(5). The Holmgrens counter that the exception only applies to a municipality's recorded interests in real estate and, because it is undisputed that the City's interest was never recorded, the City cannot benefit from the exception. Alternatively, the City argues that other, more specific statutes, govern a municipality's interest in an unrecorded highway and therefore the thirty-year recording requirement does not apply here. Because we agree with the City's alternative argument, we need not determine whether the legislature only intended to include recorded interests within the scope of the § 893.33(5) exception.

¶ 9. The Wis. Stat. § 893.33 recording requirement is a general real estate statute. However, the legislature has spoken specifically regarding unrecorded public highways. See Clean Wisconsin, Inc. v. PSC, 2005 WI 93, ¶ 175, 282 Wis. 2d 250, 700 N.W.2d 768 (Where two statutes apply to the same subject, the more specific controls.). The term "unrecorded highway" is defined in Wis. Stat. § 82.01(10) as "a highway that is not a recorded highway." Wisconsin Stat. § 82.31 provides that, with some exceptions irrelevant here, "any unrecorded highway that has been worked as a public highway for 10 years or more is a public highway . . . ."

¶ 10. Wisconsin Stat. § 82.31 does not require recording, but instead creates a public highway by operation of statute. Once a public highway has been legally established, it can only be terminated in the manner prescribed by statute. Johnston v. Lonstorf, 128 Wis. 17, 23, 107 N.W. 459 (1906). Unrecorded public highways may be vacated through the procedures articulated in Wis. Stat. §§ 82.10 to 82.12. Wis. Stat. § 82.19(1). A public highway also may be abandoned in the manner articulated in Wis. Stat. § 66.1003. Both procedures require a petition by abutting landowners, public notice and a public hearing.

¶ 11. Reading Wis. Stat. § 893.33 as the Holmg-rens suggest to bar the City's asserted interest would eviscerate the unrecorded highway statutes and circumvent the statutorily-defined highway vacation process. See Wagner v. Milwaukee Cty. Election Comm'n, 2003 WI 103, ¶ 33, 263 Wis. 2d 709, 666 N.W.2d 816 (Statutes should be interpreted so that no provision is rendered meaningless.). Such a reading effectively permits a public highway to be vacated without public notice or hearing. The legislature could not have intended for the general thirty-year recording requirement to supercede the specific statutes providing procedural protections for the public's interest in unrecorded highways.

¶ 12. Nonetheless, the Holmgrens assert that the public highway vacation statutes are irrelevant here. They contend there is no public highway to vacate because the City has not established that a public highway exists. The Holmgrens cite selective, but disputed, facts in the record supporting their theory that there has only been permissive use of the turn-around. By selecting among disputed facts that support their position, the Holmgrens ignore the procedural posture of this case. The City brought this action seeking a declaration of its rights to the turn-around because it asserted a public highway was created by its history of use or by operation of statute. The circuit court's summary judgment acknowledged there were factual disputes regarding whether the City had established the requisite periods and extent of use to result in the turn-around becoming a public highway. However, it concluded that, even assuming the City had established that a public highway was created by public use and maintenance, the City's claimed interest in the turnaround was barred as a matter of law by Wis. Stat. § 893.33. Because we conclude § 893.33 does not bar the City's claimed interest, genuine issues of material fact remain regarding the length and extent of the public's use of the turn-around, and summary judgment is therefore inappropriate. Thus, the Holmgrens' factual arguments are more appropriately raised in the circuit court on remand.

¶ 13. The Holmgrens also argue in their response brief that the City's appeal is frivolous. The Holmgrens' argument is not properly before this court because it has not been raised in compliance with Howell v. Denomie, 2005 WI 81, ¶ 19, 282 Wis. 2d 130, 698 N.W.2d 621 (concluding that "parties wishing to raise frivolousness must do so by making a separate motion to the court, whereafter the court will give the parties and counsel a chance to be heard"). In any event, because we agree with the City's position on appeal, the Holmgrens' argument that the City's appeal is frivolous fails.

By the Court. — Judgment reversed and cause remanded for further proceedings.

       All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise noted.

       Because we agree with the City that Wis. Stat. § 893.33 does not apply to these facts, we need not address the City's alternative argument that genuine issues of material fact exist regarding the statute's application here. See Gross v. Hoffman, 227 Wis. 296, 300, 277 N.W. 663 (1938) (only dispositive issues need be addressed).

       Accordingly, we do not discuss the primary case relied upon by the Holmgrens, State Historical Soc'y v. Village of Maple Bluff, 112 Wis. 2d 246, 332 N.W.2d 792 (1983).


author: CANE, C. J.

text:
    Dean Abbott, Plaintiff-Appellant, v. Howard Marker, Defendant-Respondent.
    Court of Appeals

      No. 2005AP2853.

      Submitted on briefs June 26, 2006.

      Decided July 18, 2006.

    2006 WI App 174
    (Also reported in 722 N.W.2d 162.)

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Steven B. Goff and Tracy N. Tool of Bye, Goff & Rohde, Ltd. of River Falls.
    On behalf of the defendant-respondent, the cause was submitted on the brief oí Joel L. Aberg and Thomas J. Misfeldt of Weld, Riley, Prenn & Ricci, S.C. of Eau Claire.
    Before Cane, C.J., Hoover, PJ., and Peterson, J.

       Petition to review denied 10/10/06.

   CANE, C. J.

¶ 1. Dean Abbott appeals a judgment dismissing his claims against attorney Howard Marker. Abbott contends an agreement he had with Marker for client referrals was enforceable. We disagree and affirm.

Background

¶ 2. Initially, Marker represented Abbott in a medical malpractice claim with Marker successfully settling the suit for $570,000. Abbott and Marker allegedly entered into an arrangement where Abbott would refer potential clients to Marker. If Marker favorably concluded the cases, Abbott would allegedly receive 25% of any attorney fees Marker collected. Abbott proceeded to refer two cases to Marker, for which Marker paid Abbott pursuant to their agreement.

¶ 3. Subsequently, Abbott referred a case involving the Richardson family. The Richardson case resulted in a recovery of $4 million, including $1.6 million in attorney fees. This amount was much higher than any previous referrals from Abbott, and Marker refused to pay Abbott a percentage of the attorney fees. For the first time, Marker told Abbott it was unethical for him to pay for a referral.

¶ 4. Abbott filed suit against Marker. Abbott made claims of breach of contract and quasi-contract. Marker filed a motion to dismiss. The court dismissed Abbott's promissory estoppel claim. Abbott then amended his complaint to include a legal malpractice claim, and Marker then moved for summary judgment on the remaining claims. After the reconsideration of an earlier motion to dismiss, the circuit court dismissed Abbott's claims, stating that his claims were barred by Wis. Stat. §§ 757.295 and 757.45.

Standard of Review

¶ 5. We review a circuit court's grant of a motion to dismiss for failure to state a claim without deference. See Watts v. Watts, 137 Wis. 2d 506, 512, 405 N.W.2d 305 (1987). We evaluate whether the allegations in the complaint, taken as true, are legally sufficient to state a claim for relief. Id. The interpretation of a statute is a question of law that we also review without deference. Barry v. Employers Mut. Cas. Co., 2001 WI 101, ¶ 17, 245 Wis. 2d 560, 630 N.W.2d 517.

Discussion

¶ 6. The sole issue is whether the agreement between Marker and Abbott is enforceable, either as a contract or quasi-contract. In Wisconsin, an agreement to compensate a non-lawyer for a client referral to a lawyer is barred by statute. See Wis. Stat. §§ 757.295 and 757.45. Generally, contractual provisions agreed to by competent parties are valid and enforceable assuming they do not violate statute or public policy. See Kocinski v. Home Ins. Co., 147 Wis. 2d 728, 752, 433 N.W.2d 654 (Ct. App. 1988), aff'd as modified, 154 Wis. 2d 56, 452 N.W.2d 360 (1990). A contract is considered illegal when its formation or performance is forbidden by civil or criminal statute or where a penalty is imposed for the action agreed to. Hiltpold v. T-Shirts Plus, Inc., 98 Wis. 2d 711, 716-17, 298 N.W.2d 217 (Ct. App. 1980). A court generally will not aid an illegal agreement, whether executed or executory, but instead leave the parties where it found them. Venisek v. Draski, 35 Wis. 2d 38, 50, 150 N.W.2d 347 (1967). However, Wisconsin courts generally seek to enforce contracts rather than set them aside. See Dawson v. Goldammer, 2003 WI App 3, ¶ 6, 259 Wis. 2d 664, 657 N.W.2d 432.

¶ 7. Wisconsin Stat. § 757.295 states, in pertinent part:

(1) Soliciting legal business. Except as provided under SCR 20:7.1 to 20:7.5, no person may solicit legal matters or a retainer, written or oral, or any agreement authorizing an attorney to perform or render legal services.
(2) Solicitation of a RETAINER for an attokney. Except as provided under SCR 20:7.1 to 20:7.5, no person may communicate directly or indirectly with any attorney or person acting in the attorney's behalf for the purpose of aiding, assisting or abetting the attorney in the solicitation of legal matters or the procurement through solicitation of a retainer, written or oral, or any agreement authorizing the attorney to perform or render legal services.

Thus, under this statute, it is illegal for a party to solicit retainers or agreements from another party for an attorney.

¶ 8. Wisconsin Stat. § 757.45, entitled "Sharing of compensation by attorneys prohibited," states in pertinent part:

It is unlawful for any person to divide with or receive from, or to agree to divide with or receive from, any attorney or group of attorneys, whether practicing in this state or elsewhere, either before or after action brought, and portion of any fee or compensation, charged or received by such attorney or any valuable consideration or reward, as an inducement for placing or in consideration of having placed, in the hands of such attorney, or in the hands of another person, a claim or demand of any kind for the purpose of collecting such claim, or bringing an action thereon, or of representing claimant in the pursuit of any civil remedy for the recovery thereof....

Under this statute, then, it is illegal for an attorney to split legal fees with non-attorneys.

¶ 9. Applying these two statutes, the agreement between Marker and Abbott was illegal. Abbott was soliciting clients for Marker in violation of Wis. Stat. § 757.295. Payment of 25% of Marker's attorney fee would violate Wis. Stat. § 757.45. Therefore, requiring Marker to pay Abbott for the Richardson case would violate Wisconsin's prohibition of court enforcement of illegal contracts, and we decline Abbott's invitation to ignore this prohibition.

¶ 10. Though no Wisconsin cases interpret Wis. Stat. §§ 757.295 and 757.45, an Indiana case, with similar facts, discusses the public policy implications upon paid lawyer referrals. In Trotter v. Nelson, 684 N.E.2d 1150, 1151 (Ind. 1997), Trotter was a licensed attorney, and Nelson was a former employee of Trotter. Id. at 1151. Nelson, who was not an attorney, alleged that she and Trotter had an agreement where she received a percentage of any attorney fees for any personal injury or worker's compensation case she referred to Trotter. Id. at 1151-52. Nelson initiated a suit, claiming that Trotter had not fully compensated her per the terms of the agreement. Id. at 1152. Trotter contended that no agreement existed, and even if one did, it was unenforceable because it would be against public policy. Id.

¶ 11. The Indiana Supreme Court noted that there are three situations where Indiana's courts have refused to enforce private agreements on public policy grounds, including if the agreement: (1) contravenes a statute; (2) injures the public in some way; or (3) is otherwise contrary to the declared public policy. Id. at 1153. If a contract directly contravenes a statute, then the court must declare the contract void. Id. However, if an agreement might be otherwise contrary to declared public policy, the Indiana Supreme Court set forth five relevant factors to consider: (1) the nature of the subject matter of the agreement; (2) the strength of the public policy underlying the statute; (3) the likelihood the refusal to enforce the bargain will further the applicable public policy; (4) how "serious or deserved" is the forfeiture suffered by the party attempting to enforce the bargain; and (5) the parties' relative bargaining power and freedom to contract. Id.

¶ 12. The Indiana court concluded:

To the extent that Nelson's claims for remuneration rely upon the enforcement of the alleged agreement, we instruct the trial court to grant Trotter's motion for partial summary judgement. We do this despite the fact that, if Nelson is correct, Trotter has committed a gross violation of the [Attorney] Conduct Rules and would have essentially entered into a contract which he knew to be unenforceable and now seeks to escape. Nevertheless, when a court determines that a contract must be declared void as against public policy, it does so on the grounds that the good of the public as a whole must take precedence over the circumstances of the individual, no matter the hardship or inequities that may result.

Id. at 1155. The court held that the referral agreement alleged by Nelson was void and unenforceable because it was directly contrary to the Indiana Rules of Professional Conduct, akin to contravening a statute, and against public policy.

¶ 13. Although the fact that the agreement between Marker and Abbott is directly contrary to statute is reason enough for us to decline to enforce the contract as a matter of law, it is also unenforceable on public policy grounds. It is implicitly declared in Wisconsin, through Wis. Stat. §§ 757.295 and 757.45, that referral agreements between an attorney and a non-attorney are contrary to public policy. Thus, like the agreement in Trotter, the agreement between Marker and Abbott is unenforceable.

¶ 14. Abbott argues, however, that a party to an otherwise illegal contract may recover in contract or quasi-contract if the parties are not in pari delicto. Abbott contends that he and Marker cannot be in pari delicto because Marker was an attorney with superior training and legal knowledge. Thus, Abbott contends, the court must enforce the illegal referral agreement.

¶ 15. In pari delicto applies the legal principle that no court shall aid a party whose claim is based on an illegal or immoral act. Evans v. Cameron, 121 Wis. 2d 421, 427, 360 N.W.2d 25 (1985). However, in pari delicto is not without restriction:

And indeed in cases where both parties are in delicto concurring in an illegal act, it does not always follow that they stand in pari delicto, for there may be, and often are, very different degrees in their guilt. One party may act under circumstances of oppression, imposition, hardship, undue influence, or great inequality of condition or age; so that his guilt may be far less in degree than that of his associate in the offense. And besides, there may be on the part of the court itself a necessity of supporting the public interests or public policy in many cases, however, reprehensible the acts of the parties may be.

Id. (citation omitted).

¶ 16. To support his argument that because he is a non-lawyer he should be held less accountable than Marker, Abbott relies heavily on Evans. Evans sued her former attorney Cameron for improper legal advice. Id. at 424-25. Evans claimed Cameron advised her to lie under oath in a bankruptcy proceeding, and those lies caused her various damages. Id. Cameron filed a motion to dismiss, which was granted on the grounds of in pari delicto. The court of appeals reversed the circuit court. Id. at 425-26.

¶ 17. The Wisconsin Supreme Court reversed the court of appeals and dismissed Evans's claim. With an attorney-client relationship, the supreme court concluded:

There may be circumstances in which the advice given by an attorney is so complex that the client would be unaware of the wrongfulness involved in following that advice. In such circumstances, more weight may be given to the influence an attorney will have over the client and the amount of reliance which the client can justifiably place in the attorney. The wrongfulness of lying while under oath, however, is apparent. Absent some allegation of special circumstances constituting an exception to the rule of in pari delicto independent of the attorney-client relationship, the client's deliberate act of lying under oath places that client in pari delicto with the attorney who advised that client to lie.

Id. at 428. Thus, in certain circumstances, advice given by an attorney might be so complex that a client cannot be expected to be aware of the potential impact.

¶ 18. Abbott's reliance on Marker's superior legal knowledge is misplaced. First, unlike in Evans, we note that Marker was not acting as Abbott's attorney. It would be improper to impose the unique relationship of attorney-client upon the arrangement between Marker and Abbott. See State v. Meeks, 2003 WI 104, ¶ 59, 263 Wis. 2d 794, 666 N.W.2d 859 ("Policy considerations play a fundamental role in protecting the very important relationship between attorney and client. The attorney-client privilege provides sanctuary to protect a relationship based upon trust and confidence."). Further, this situation is not so complex that we should ignore the statutes barring the type of agreement here. Every person in Wisconsin is presumed to know the law, and ignorance of it does not excuse unlawful behavior. See Tri-State Mech., Inc. v. Northland College, 2004 WI App 100, ¶ 10, 273 Wis. 2d 471, 681 N.W.2d 302. Despite Abbott's arguments to the contrary, compliance with the clearly written provisions of Wis. Stat. §§ 757.295 and 757.45 is not something we can only expect of lawyers.

¶ 19. Although Marker disputes having made this referral arrangement with Abbott, if true, Marker has taken an unfair advantage of Abbott and violated his obligations under the statutes and professional ethics. However, to enforce the illegal agreement, we would in effect be nullifying Wisconsin's public policy and statutes prohibiting the sharing of attorney fees with non-attorneys in referral practices.

¶ 20. Next, Abbott contends that he should be awarded a portion of the attorney fees on unjust enrichment grounds. Unjust enrichment is an equitable doctrine. CleanSoils Wisconsin, Inc. v. DOT, 229 Wis. 2d 600, 612, 599 N.W.2d 903 (Ct. App. 1999). A circuit court's decision to grant relief due to unjust enrichment is discretionary. Ulrich v. Zemke, 2002 WI App 246, ¶ 8, 258 Wis. 2d 180, 654 N.W.2d 458. A plaintiff may recover through quasi-contract unjust enrichment when the plaintiff confers a benefit on the defendant, the defendant is aware of the benefit, and the retention of the benefit would be inequitable. Halverson v. River Falls Youth Hockey Ass'n, 226 Wis. 2d 105, 115, 593 N.W.2d 895 (Ct. App. 1999). Unjust enrichment is grounded upon the moral principle that a party who has received a benefit has a duty to make restitution where retaining such a benefit would be unjust. See Management Comp. Servs. v. Hawkins, Ash, Baptie & Co., 206 Wis. 2d 158, 188, 557 N.W.2d 67 (1996).

¶ 21. First, we choose not to enforce an agreement through unjust enrichment when the party cannot enforce the agreement through contract because it is illegal. Second, Marker has not received a benefit from Abbott which requires him to make restitution. Abbott provided Marker with a client referral. Wisconsin Stat. §§ 757.295 and 757.45 make it illegal for an attorney to receive a referral through paying a third party. Thus, Marker has not received a benefit that has a marketable value.

By the Court. — Judgment affirmed.

       Although the existence of an agreement is disputed, for this opinion we assume it did exist.

       All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise noted.

       "Equally at fault." Black's Law DictionaRY 806 (8th ed. 2004).


author: SNYDER, PJ.

text:
    Robert Kreckel and Valerie Kreckel, Plaintiffs, Transcontinental Insurance Company, Subrogated-Plaintiff, v. Walbridge Aldinger Company, Defendant-Third-Party Plaintiff-Appellant, Pieper Electric, Inc., d/b/a Mauer Electric, and First Horizon Group Limited Partnership, p/k/a Prime Retail Limited Partnership, Defendants, v. Olympic Wall Systems, Inc. and CNA/National Fire Insurance Company of Hartford, Third-Party Defendants-Respondents.
    Court of Appeals

      No. 2005AP1779.

      Submitted on briefs May 1, 2006.

      Decided July 19, 2006.

    2006 WI App 168
    (Also reported in 721 N.W.2d 508.)

      On behalf of the defendant-third-party plaintiff-appellant, the cause was submitted on the briefs of R. Scott Ritter of Nada K. Sizemore & Associates, Brook-field.
    On behalf ofthe third-party defendants-respondents, the cause was submitted on the brief of Michael R. Fitzpatrick and Matthew D. Kuehl of Brennan, Steil & Basting, S.C., Janesville.
    Before Snyder, PJ., Nettesheim and Anderson, JJ.
    *See Callaghan’s Wisconsin Digest, same topic and section number.
   SNYDER, PJ.

¶ 1. Walbridge Aldinger Company appeals from a decision and order granting declaratory relief to Olympic Wall Systems, Inc. and CNA/National Fire Insurance Company of Hartford, essentially dismissing Walbridge's third-party claims against Olympic and CNA. The circuit court concluded that "Olympic and CNA ... have no duty to defend, no duty to insure and no duty to indemnify Walbridge," and dismissed the third-party complaint. Walbridge contends that the circuit court erred when it determined that Walbridge provided an untimely notice of its tender of defense to CNA and untimely notice of its indemnification claims to Olympic. In the alternative, it contends that even if notice was untimely, neither Olympic nor CNA was prejudiced by the delay. We disagree and affirm the order of the circuit court.

FACTS AND PROCEDURAL BACKGROUND

¶ 2. This case originates in a negligence action against Walbridge for injuries suffered by Robert Kreckel, an Olympic employee. Walbridge was the general contractor on a construction site and had hired Olympic as a subcontractor. The agreement between Walbridge and Olympic required Olympic to obtain a general liability policy naming Walbridge as an additional insured and to indemnify Walbridge for any liability it may incur for claims arising out of work performed by Olympic. Olympic obtained coverage from CNA and included Walbridge as an additional insured.

¶ 3. On September 14, 2000, while on the job, Olympic employee Kreckel reached into an electrical transformer box and received a jolt of 15,000 volts of electricity. On February 5, 2002, Kreckel sued Wal-bridge for negligence. Walbridge tendered defense to its general liability insurance carrier, St. Paul Fire and Marine Insurance Company, which filed an answer on March 20, 2002.

¶ 4. In a letter dated August 15, 2002, CNA contacted St. Paul and opined that Walbridge was the proximate cause of Kreckel's injury and demanded subrogation for money it had paid out to Kreckel as Olympic's workers' compensation carrier. Throughout the rest of 2002 and 2003, various amended pleadings were filed, parties were added, and discovery continued. In February 2004, Walbridge requested that Olympic provide it with a copy of the subcontract and information regarding Olympic's general liability insurance carrier at the time of Kreckel's injury. Olympic complied.

¶ 5. By letter dated April 6, 2004, St. Paul formally tendered Walbridge's defense to CNA. CNA acknowledged the tender of defense, responded that it was investigating the matter, and requested a copy of the summons and complaint in the negligence action. On April 29, Walbridge filed a third-party complaint against Olympic and CNA, claiming indemnification from Olympic and coverage, including the duty to defend, from CNA.

¶ 6. Olympic and CNA sought declaratory relief. Both asserted that Walbridge's tender of defense was untimely and unfairly prejudicial. A motion hearing followed, and the circuit court concluded that neither Olympic nor CNA owed any duty to defend, insure or indemnify Walbridge. Walbridge appeals.

DISCUSSION

¶ 7. We begin by clarifying the procedural posture of this appeal. The circuit court's order references declaratory relief and dismisses Walbridge's third-party claims. The parties submitted, and the court considered, affidavits and accompanying documents. Furthermore, the court expressly employed summary judgment methodology in its ruling. Under these circumstances, the proceedings are reviewed as summary judgment. See Wis. Stat. § 802.06(2)(b) (2003-04).

¶ 8. We review summary judgment de novo, applying the same method as the trial court. Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315, 401 N.W.2d 816 (1987). Summary judgment is appropriate when there is no material factual dispute and the moving party is entitled to judgment as a matter of law. Germanotta v. National Indem. Co., 119 Wis. 2d 293, 296, 349 N.W.2d 733 (Ct. App. 1984). Summary judgment methodology is well established and need not be repeated here. See, e.g., Lambrecht v. Estate of Kaczmarczyk, 2001 WI 25, ¶¶ 20-24, 241 Wis. 2d 804, 623 N.W.2d 751.

¶ 9. Walbridge casts the issues on appeal in terms of the right to coverage, indemnification, and a defense. It is undisputed that Olympic agreed to indemnify Walbridge for such claims under the terms of the subcontract. It is also undisputed that CNA considers Walbridge an additional insured under the terms of its liability policy with Olympic. Thus, the only contested issues are whether Walbridge gave timely notice to Olympic and CNA, thereby invoking coverage and other duties under the subcontract and, if notice was untimely, whether the delay resulted in prejudice.

¶ 10. Whether notice is timely is a question of fact subject to the clearly erroneous standard of review. See Neff v. Pierzina, 2001 WI 95, ¶ 35, 245 Wis. 2d 285, 629 N.W.2d 177. However, decisions interpreting timely notice have held that when the insured fails to give notice within one year of the time required by the policy, "there is a rebuttable presumption of prejudice and the burden of proof shifts to the claimant to prove that the insurer was not prejudiced by the untimely notice." Id., ¶ 43 (citation omitted). "Generally, whether a liability insurer has been prejudiced by late notice is considered a question of fact, but may be determined as [a] matter of law where facts are not in dispute." Id., ¶ 48 (citation omitted). Here, the facts are not in dispute; rather, the parties argue as to the legal significance of those facts.

¶ 11. According to the parties, the key events in the timeline are: Kreckel's accident in September 2000; Kreckel's lawsuit against Walbridge filed in February 2002; Walbridge's tender of defense of the lawsuit to its own insurer, St. Paul, in March 2002; St. Paul's request for Kreckel's employment records from Olympic in August 2002; CNA's letter claiming a subrogation interest in August 2002; the deposition of John Hueb-ner, an Olympic employee, in October 2002; Walbridge's request for certificates of insurance from Olympic in February 2004; and St. Paul's tender of defense to CNA on April 6, 2004. Walbridge contends that CNA and Olympic had actual notice of Kreckel's lawsuit and their potential liability as insurer and indemnifier as early as August 2002. CNA and Olympic contend that notice was not provided until April 6, 2004, and that they were prejudiced by the delay.

¶ 12. Under the terms of CNA's insurance contract, Walbridge was required to give written notice of any claim or lawsuit to CNA "as soon as practicable." Furthermore, Walbridge was required to "[i] immediately send [CNA] copies of any demands, notices, summonses or legal papers received in connection with the claim..and otherwise cooperate with CNA in its investigation of the matter. Though failure to provide notice as required by the policy does not necessarily invalidate a claim, the insured must show "that it was not reasonably possible to give the notice within the prescribed time and that notice was given as soon as reasonably possible." Wis. Stat. § 632.26(l)(b).

¶ 13. We turn to Walbridge's primary argument that timely notice was indeed given to CNA. Walbridge emphasizes that CNA employee, Francesca Clayton, referenced Kreckel's injury in a letter dated August 15, 2002. That letter explained that CNA had paid workers' compensation benefits to Kreckel and wished to protect its subrogation rights. Walbridge concludes that CNA's letter proves it had notice of Kreckel's negligence claim even before August 15, because the letter states that CNA had already evaluated the loss.

¶ 14. CNA responds that Clayton is a recovery specialist in its workers' compensation subrogation department, not in the general liability department. CNA argues that when Olympic notified CNA of the workers' compensation benefits due Kreckel, it did not absolve Walbridge of its duty to notify CNA of the negligence claim that would expose CNA under the terms of the general liability insurance contract. We agree.

¶ 15. In Town of Mount Pleasant v. Hartford Accident and Indemnity Co., 2001 WI App 38, ¶ 12, 241 Wis. 2d 327, 625 N.W.2d 317, we rejected the proposition that "notice to an insurance company from one of its insureds in a multi-party lawsuit is notice from any other of its insureds in the same lawsuit." We explained that "[i]t would be an onerous burden if the insurer (who may have thousands if not millions of insureds) is required to keep track of all of its insureds and to investigate any time it has notice of a lawsuit as to whether any of its insureds are parties." Id., ¶ 13. Here, Walbridge was not the primary policyholder, but rather an "additional insured" under the policy. Moreover, CNA's knowledge of the workers' compensation claim is clear, but the record does not establish that CNA had any notice of a negligence claim until the tender of defense in April 2004. Under these circumstances, CNA was not obligated to ascertain what liability Walbridge faced or whether Walbridge wished to avail itself of the protections of CNA's general liability policy.

¶ 16. Because we conclude that Walbridge first provided notice of the negligence claim when it tendered defense to CNA and copied Olympic on the tender, we must determine whether this nonetheless constitutes timely notice. Absent a showing that it was not reasonably possible for Walbridge to provide notice sooner, see Wis. Stat. § 632.26(1)(b), we hold that it does not. Several cases provide guidance on what manner of delay constitutes untimely notice. See, e.g., Gerrard Realty Corp. v. American States Ins. Co., 89 Wis. 2d 130, 144, 277 N.W.2d 863 (1979) (twenty-two months between filing of lawsuit and notice to insurer is untimely); Britz v. American Ins. Co., 2 Wis. 2d 192, 204, 86 N.W.2d 18 (1957) (unexplained delay of three months constitutes untimely notice). Here, Kreckel filed the negligence suit against Walbridge in February 2002; St. Paul tendered Walbridge's defense to CNA in April 2004. An unexplained and, as conceded by Wal-bridge, unnecessary delay of approximately twenty-six months is well beyond what the law will abide.

¶ 17. Nonetheless, failure to give timely notice does not bar liability under the policy "if the insurer was not prejudiced by the failure, but the risk of nonpersuasion is upon the person claiming there was no prejudice." Wis. Stat. § 632.26(2). Walbridge asks, "[W]hat would CNA have done differently had it received notice in the spring of 2002 than it has done in this case?" It asserts that CNA has received copies of all relevant documents since they joined the litigation in 2004 and that Walbridge has "handed over its investigation, conducted through discovery . . . thereby saving CNA the time and effort of conducting any further independent investigation of its own."

¶ 18. Our supreme court rejected a similar argument in Neff. There, the court observed that insurers need timely notice in order to investigate the circumstances surrounding a claim while witnesses are still available and memories are fresh. Neff, 245 Wis. 2d 285, ¶ 59. Furthermore, the insurer should have "some latitude in securing the investigator and attorney of its choice." Id., ¶ 60. More recently, we echoed these concerns and observed that untimely notice may prejudice the insurer in that it cannot seek an immediate determination of coverage, it cannot participate in alternative dispute resolution efforts, and it cannot select defense counsel and control the defense. See Mount Pleasant, 241 Wis. 2d 327, ¶ 13 n.3. Walbridge has not overcome the presumption of prejudice; it has not produced any credible claim that CNA would have performed the same investigation, employed the same negotiation strategies, or pursued the same legal theories that St. Paul did in the first two years of pretrial litigation.

¶ 19. Finally, we turn to Walbridge's argument that even if no coverage is available through CNA, it is still entitled to indemnification from Olympic under the terms of the subcontract. Walbridge argues that there was no contractual requirement that it give notice to Olympic and that, nonetheless, it did give notice. Wal-bridge contends that Olympic had notice in several different forms, including an employment record authorization and cover letter sent in August 2002, and "even more significantly, a subpoena to John Huebner, a management level employee, which included the actual caption of the lawsuit." Further, Walbridge points out that at Huebner's deposition on October 28, 2002, he was told of Kreckel's lawsuit against Walbridge.

¶ 20. We reject Walbridge's argument for three reasons. First, as the circuit court noted, every contract carries with it a duty of good faith and fair dealing. See Wisconsin Natural Gas Co. v. Gate's Const. Co., 220 Wis. 2d 14, 21, 582 N.W.2d 118 (Ct. App. 1998). A party can be liable for breach of the implied covenant of good faith "even though all the terms of the written agreement may have been fulfilled." Id. at 21-22 (citation omitted). One federal court observed:

Relying upon basic principles of contract law ... courts have found an implied obligation on the part of the indemnitee to provide reasonable notice, even when the contract does not contain a specific notice requirement. Notice of some kind is an implied condition of the indemnification contract for the simple reason that the indemnitor cannot defend or indemnify in connection with a claim that it does not know about.

West Bend Co. v. Chiaphua Indus., Inc., 112 F. Supp. 2d 816, 826 (E.D. Wis. 2000) (citations omitted). The duty to provide prompt or reasonable notice is rooted in the duty of good faith and fair dealing, which in Wisconsin is part of every contract. See Wisconsin Natural Gas, 220 Wis. 2d at 21. Reminiscent of our discussion above, fairness here "requires prompt notice so that an indem-nitor may not only respond to a claim, but also protect its interests as the party ultimately paying the bill." West Bend, 112 F. Supp. 2d at 827. Failure to provide reasonable notice breaches the implied condition of the contract and forfeits the right to indemnification. Id.

¶ 21. Second, we are not persuaded that any of Walbridge's actions prior to February 2004 demonstrated actual or constructive notice to Olympic that it faced potential liability in Kreckel's negligence lawsuit against Walbridge. We agree with the circuit court's assessment that the August 1, 2002 request for employment records did not inform Olympic of any potential liability that Walbridge was expecting it to fulfill or alert Olympic to the fact that it may be expected to pay "thousands of dollars to indemnify Walbridge for their negligence." Likewise, Huebner's subpoena and subsequent deposition serve only to show that Huebner knew that Kreckel had initiated a lawsuit against Walbridge. Notably, the fact that Olympic did not provide Huebner with legal representation at his deposition suggests that Olympic was not on notice that a potential claim was looming.

¶ 22. Finally, the subcontract provided Walbridge the method by which notice was to be given. The subcontract states: "Any notice required to be given or which may be given to [Olympic] pursuant to this Subcontract shall be forwarded in writing, by personal delivery or by certified mail, return receipt requested, to [Olympic]." None of the incidental events relied upon by Walbridge complied with the notice methods agreed upon by the parties.

CONCLUSION

¶ 23. We conclude that Walbridge did not provide timely notice of the negligence claim to CNA and Olympic, which resulted in prejudice and relieved CNA and Olympic of their duties to defend, insure and indemnify Walbridge. Accordingly, we affirm the order of the circuit court.

By the Court. — Order affirmed.

       in an amended complaint, Kreckel later added Pieper Electric, Inc., d/b/a Mauer Electric and First Horizon Group Limited Partnership, p/k/a Prime Retail Limited Partnership as defendants. Only Walbridge, Olympic, and CNA are involved in this appeal.

       All references to the Wisconsin Statutes are to the 2003-04 version unless otherwise indicated.

       Walbridge concedes that it would have been reasonably possible to provide notice to CNA within one year after Kreckel's lawsuit was filed.

       Walbridge argues that Clayton's letter dated August 15, 2002, indicates that CNA did do an investigation well in advance of its tender of defense. We reiterate, however, that the August 15 letter addressed the worker's compensation claim. The investigation of a worker's compensation claim against Olympic is no substitution for the investigation of the negligence claim against Walbridge.

       Walbridge attempts to turn the burden of proof on its head by lamenting that CNA has "failed to point out a single factual example" demonstrating "actual prejudice." However, CNA is afforded a presumption of prejudice; Walbridge bears the burden of overcoming that presumption. See Neff v. Pierzina, 2001 WI 95, ¶ 43, 245 Wis. 2d 285, 629 N.W.2d 177.