text:
    Eleanor Last, Plaintiff-Appellant, v. American Family Mutual Insurance Company, Defendant-Respondent.
    Court of Appeals

      No. 98-3424.

      Submitted on briefs April 4, 2000.

    Decided July 5, 2000.

    2000 WI App 169
    (Also reported in 617 N.W.2d 215.)

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Timothy S. Knurr of Schoone, Fortune, Leuck, Kelley & Pitts, S.C., of Racine.
    On behalf of the defendant-respondent, the cause was submitted on the brief of Frederick J. Smith of Peterson, Johnson & Murray, S.C., of Milwaukee.
    Before Fine, Schudson and Curley, JJ.
   CURLEY, J.

¶ 1. Eleanor Last appeals the trial court's grant of summary judgment to American Family Mutual Insurance Company (American Family). Last argues that the trial court erred in ruling that, because of an exclusion in Last's homeowner's insurance policy, American Family had no obligation to defend her or indemnify her when Joann Zalar, hired to care for Last's disabled husband, filed a worker's compensation claim. Last contends that, since Zalar could arguably have been considered a domestic servant, an exempt employee under the worker's compensation law, American Family should have provided her with a defense. In applying the well-established test that an insurance company's duty to defend is triggered by the allegations contained within the four corners of the complaint, as set forth in Newhouse v. Citizens Security Mutual Insurance Co., 176 Wis. 2d 824, 835, 501 N.W.2d 1 (1993); see also Grieb v. Citizens Casualty Co., 33 Wis. 2d 552, 557-58, 148 N.W.2d 103 (1967), we conclude that all of Zalar's allegations fell within American Family's worker's compensation policy exemption and, consequently, American Family owed no duty to Last. Therefore, we affirm.

I. Background.

¶ 2. Last hired Zalar to assist in the care of her disabled husband who lived at home. Zalar worked for Last from July 1994 through approximately May 1996. In her application for worker's compensation benefits, Zalar alleged that while working on December 22, 1995, she was injured while moving Last's husband without the use of a mechanical lift because it had malfunctioned. Zalar contends that, as a result, she experienced low back pain and left leg problems that eventually resulted in her undergoing a lumbar laminectomy. Last did not have any worker's compensation insurance and she tendered the defense of Zalar's claim to American Family under her homeowner's insurance policy. After receiving Last's letter, American Family wrote Last a "Reservation of Rights" letter explaining that the company was forwarding her request to its legal department. American Family ultimately informed Last that an exclusion in her policy for worker's compensation obligations covered Zalar's allegations and, therefore, American Family would neither defend her nor indemnify her in this matter.

¶ 3. Last then hired an attorney to represent her in the worker's compensation suit. In the initial stages of the Zalar litigation, Last argued that Zalar was not an "employee" under the Worker's Compensation Act because Zalar was a domestic servant and domestic servants are ineligible for benefits as they are excluded from the definition of "employee" found in WlS. Stat. § 102.07(4) (1995-96). She also disputed whether Zalar's disability was the result of the December 22, 1995, incident. Eventually, however, Last and Zalar entered into a compromise agreement with Last paying Zalar $15,000. Last also paid her own attorney approximately $6,500 in legal fees.

¶ 4. Last then sued American Family claiming, inter alia, that American Family failed to properly determine Last's rights under the policy and breached its duty to defend her. Last sought reimbursement from American Family for: (1) the $15,000 settlement amount; (2) the attorney fees she incurred in settling the worker's compensation suit; and (3) her attorney fees in this suit. Both parties filed summary judgment motions. The trial court granted . American Family's motion, determining that American Family had not breached any duty to defend Last because, had Zalar proved her allegations, the policy exclusion would have applied.

II. Analysis.

¶ 5. Last argues that the trial court erred in ruling in favor of American Family. Last acknowledges that the policy had an exclusion for worker's compensation law suits, but she submits that American Family was obligated to do more than simply look at Zalar's complaint when making its decision on coverage. Last posits that because the worker's compensation law exempts domestic servants from the definition of employee, and because she believed that Zalar performed the duties of a domestic servant, it was "debatable" whether Zalar's work-related medical problems were covered by the Workers' Compensation Act and, if her assertions were correct, the policy exclusion would not apply. Coupling her contention with what she believed to be American Family's broad duty to defend, Last submits that American Family breached its duty to defend her.

¶ 6. Last contends that the circumstances present here are comparable to those in Monfils v. Charles, 216 Wis. 2d 323, 575 N.W.2d 728 (Ct. App. 1998), where the underlying third-party complaint created an ambiguity as to whether an exclusion applied and, as a consequence, the insurance company was required to defend the insured. For additional support, Last cites School District of Shorewood v. Wausau Insurance Cos., 170 Wis. 2d 347, 488 N.W.2d 82 (1992) (any doubt about the duty to defend is to be resolved in favor of the insured), and United States Fire Insurance Co. v. Good Humor Corp., 173 Wis. 2d 804, 496 N.W.2d 730 (Ct. App. 1993) (if the question of coverage is fairly debatable, the insurer has an obligation to defend). Last reasons that since case law directs that when the third-party complaint is either ambiguous or incomplete, the insurance company is obligated to provide a defense. Last contends, therefore, that American Family had a duty to defend her because of Zalar's questionable work status.

¶ 7. Finally, Last argues that because American Family wrongfully refused to defend her, under Good Humor, she is "entitled to recover all damages naturally flowing from the breach." Id. at 830. Thus, Last asks this court to overturn the trial court's decision and order the entry of summary judgment in her favor and the reimbursement of her attorney fees and settlement costs in the Zalar litigation and the reimbursement of her attorney fees in this suit. American Family argues that the trial court properly applied the appropriate legal test found in Newhouse and Grieb to Zalar's allegations when it determined that summary judgment was warranted. We agree with American Family.

¶ 8. In an appeal from the entry of summary judgment, this court reviews the record de novo, applying the same standard and following the same methodology required of the trial court under WlS. Stat. § 802.08. See Delta Group, Inc. v. DBI, Inc., 204 Wis. 2d 515, 520, 555 N.W.2d 162 (Ct. App. 1996).

¶ 9. "Determining if an insurance company has a duty to defend is a question of law that we review de novo and without deference to the trial court." Grube v. Daun, 173 Wis. 2d 30, 72, 496 N.W.2d 106 (Ct. App. 1992). An insurer's duty to defend is predicated on the "allegations contained within the four comers of the complaint." Newhouse, 176 Wis. 2d at 835; see also Elliott v. Donahue, 169 Wis. 2d 310, 320-21, 485 N.W.2d 403 (1992). The duty to defend depends on the nature of the claim, not the merits, and any doubts must be resolved in favor of the insured. See Elliott, 169 Wis. 2d at 321. Moreover, "[p]olicy exclusions are to be narrowly construed against the insurer and any ambiguity regarding coverage is to be resolved in favor of the insured." Radke v. Fireman's Fund Ins. Co., 217 Wis. 2d 39, 43-44, 577 N.W.2d 366 (Ct. App. 1998).

¶ 10. The American Family policy issued to Last contains the following language:

COVERAGE D - PERSONAL LIABILITY COVERAGE
We will pay, up to our limit, compensatory damages for which any insured is legally liable because of bodily injury or property damage caused by an occurrence covered by this policy.
Defense Provision.
If a suit is brought against any insured for damages because of bodily injury or property damage caused by an occurrence to which this policy applies, we will provide a defense at our expense by counsel of our choice. We will defend any suit or settle any claim for damages payable under this policy as we think proper.

The policy also contains an exclusion for worker's compensation claims:

20. Workers Compensation. We will not cover any obligation of the insured under a workers compensation, disability benefits, unemployment compensation law or any other similar law.

After looking at the "four comers" of Zalar's complaint, we conclude that Zalar's allegations fell within the policy exclusion. Zalar's complaint consists only of an application for a hearing filed with the Worker's Corn-pensation Division. It clearly indicates that Zalar is seeking compensation from Last under the worker's compensation law. In her application, Zalar alleged that she "was hired to provide total patient care as a nursing assistant to Mrs. Last's husband" and that "while attempting to turn and lift husband, claimant experienced back pain." If Zalar successfully proved her case, she would have been eligible for worker's compensation benefits from her employer because she was a nursing assistant — a covered employee — who suffered a medical injury during the course of her employment. Nothing in Zalar's application is either ambiguous or incomplete. Thus, the only possible scenario emerging from Zalar's complaint is that Zalar sought worker's compensation benefits which were excluded from Last's policy.

¶ 11. Last, however, seizes upon the wording in a letter American Family sent to her, that Zalar "may or may not meet the statutory definition of domestic employee as it pertains to the requirement for worker's compensation insurance as defined by the State of Wisconsin," as evidence that an ambiguity existed which required American Family to provide her with a defense. She also contends that certain "red flags" such as the fact that Zalar's application listed Last's place of business and residence as being the same, and that the nature of the business is listed as "residential home," should have alerted American Family that Zalar's claim might not be "a worker's compensation claim." Last argues that because of these possibilities, American Family owed her a defense.

¶ 12. Last is wrong. Unlike the facts in several of the cases Last has cited, where the parties sought redress under different causes of action, Zalar sought only worker's compensation benefits from Last and American Family's policy's exclusion exempted "any obligation of the insured under a worker's compensation law" from coverage. As American Family aptly stated,

[Last] refuses to perform the first step in any duty to defend analysis — comparing the coverage promised to the facts alleged to determine whether the facts, if proven, would give rise to liability which falls within the coverage promised. This simple, straightforward task is at the heart of any duty to defend analysis. Instead, [Last] urges this court to adopt wholly unworkable methodology which turns the four corners of the complaint test on its ear and requires insurers to speculate about whether they must defend claims which, if unproven, might lead to other potentially covered unknown claims. Hence, [Last] muses about the "possibility that the worker's compensation law did not apply to the claim of Ms. Zalar."

¶ 13. Stated otherwise, the policy language indicated that American Family would pay compensatory damages "for which any insured is legally liable because of bodily injury . . . caused by an occurrence covered by this policy." Last argues that if Zalar was not eligible for worker's compensation benefits, the policy would cover Zalar's injury. But the policy would never come into play if Zalar failed to prove her case. Had Zalar lost in her bid for worker's compensation benefits, no other alternative cause of action existed against Last. Zalar brought no other claims alleging Last was negligent or violated any other duty owed to Zalar. The only way Last would have had to pay damages to Zalar was if Zalar was entitled to worker's compensation benefits. American Family does not cover worker's compensation obligations; thus, American Family owed no duty to defend Last because the only damages sought were excluded from coverage.

¶ 14. As a consequence, American Family was entitled to summary judgment, and we affirm the trial court's ruling.

By the Court. — Judgment affirmed.

       Wisconsin Stat. § 102.07(4) provides:
      (4) (a) Every person in the service of another under any contract of hire, express or implied, all helpers and assistants of employes, whether paid by the employer or employe, if employed with the knowledge, actual or constructive, of the employer, including minors, who shall have the same power of contracting as adult employes, but not including the following:
      1. Domestic servants.
      2. Any person whose employment is not in the course of a trade, business, profession or occupation of the employer, unless as to any of said classes, the employer has elected to include them.
      (b) Par. (a) 2. shall not operate to exclude an employe whose employment is in the course of any trade, business, profession or occupation of the employer, however casual, unusual, desultory or isolated the employer's trade, business, profession or occupation may be.

       The Worker's Compensation Division was formerly known as the Department of Industry, Labor and Human Relations.


source: Caselaw Access Project

author: SCHUDSON, J.

license: Public Domain

text:
    Ronnie Prophet and Badon Prophet, Plaintiffs-Appellants, v. Enterprise Rent-A-Car Company, Inc., Defendant-Respondent, Wanda A. Reynolds, Defendant.
    Court of Appeals

      No. 99-0776.

      Submitted on briefs May 2, 2000.

    Decided July 5, 2000.

    2000 WI App 171
    (Also reported in 617 N.W.2d 225.)

      On behalf of the plaintiffs-appellants, the cause was submitted on the briefs oí Robert A. Levine, oí Law Offices of Robert A. Levine, of-Milwaukee.
    On behalf of the defendant-respondent, the cause was submitted on the brief of Thomas A. Piette, oí Piette Law Firm, S.C., of Milwaukee.
    Before Fine, Schudson and Curley, JJ.
   SCHUDSON, J.

¶1. Ronnie and Badon Prophet appeal from the circuit court judgment granting summary judgment to Enterprise Rent-A-Car Company, Inc. The Prophets argue that the circuit court erred in concluding that Enterprise, by selling insurance to the renter of an Enterprise car in which they were passengers when the car, driven by the renter, collided with a car driven by an uninsured motorist, had not entered into a contract of insurance for which uninsured motorist coverage would have been required under Wis. Stat. § 632.32(4). We affirm.

I. BACKGROUND

¶ 2. The facts relevant to resolution of this appeal are undisputed. On July 17, 1996, Ricardo D. Smith rented a car from Enterprise, a self-insured rental car company. Smith did not maintain his own automobile insurance. With his car rental, however, Smith purchased from Enterprise: partial damage waiver for $6.99 per day, personal accident insurance for $1.00 per day, and supplemental liability protection for $5.95 per day. The Enterprise rental agreement stated the terms and conditions. Specifically, it defined "supplemental liability protection" in a paragraph stating, in part:

BODILY INJURY AND PROPERTY DAMAGE RESPONSIBILITY: (a) Owner provides no bodily injury or property damage liability insurance or coverage to renter or any other operator or user of the rented vehicle for bodily injury or property damage sustained by any third party, user, or occupant of the rented vehicle. Renter's liability insurance applies, and renter warrants and represents that (s)he has and will maintain in force during the term of the rental agreement bodily injury and property damage liability insurance coverage for the operation, maintenance and use of the rented vehicle by renter, or any other operator, or user or passenger of the vehicle. Such insurance coverage shall be in amounts at least equal to the financial responsibility limits required by the applicable motor vehicle financial responsibility laws of the state where the vehicle is operated or used. . . . (b) SUPPLEMENTAL LIABILITY PROTECTION (SLP). If owner offers, and Renter purchases SLP at the time of rental, authorized drivers are provided third party liability protection for up to $1,000,000.00 combined single limit per accident.... SLP DOES NOT APPLY ... TO UNINSURED AND UNDERIN-SURED MOTORISTS....

The next paragraph of the rental agreement states: "WAIVER OF PERSONAL INJURY PROTECTION AND UNINSURED-UNDERINSURED MOTORIST PROTECTION: Personal injury protection, and uninsured or underinsured motorist protection is neither contemplated, nor provided as part of this agreement. Renter expressly agrees to waive any rights to claim personal injury protection, uninsured, or underinsured motorist protection from owner."

¶ 3. On July 23, 1996, during the period covered by the agreement, the Prophets were passengers in Smith's rented Enterprise car when it was involved in a collision with a car driven by Wanda A. Reynolds, an alleged uninsured motorist. The Prophets sued Reynolds, claiming that they suffered injuries and damages resulting from her negligence.

¶ 4. Although they alleged no negligence of Smith or Enterprise, the Prophets also sued Enterprise, contending that "pursuant to the laws of the State of Wisconsin, the rental vehicle being operated by Smith was to contain a policy of uninsured motorist coverage" — that is, that Smith "purchased a policy of liability insurance which, according to the laws of the State of Wisconsin, must contain an uninsured motorist provision." They asserted that "Smith's decision to purchase liability insurance from Enterprise, and Enterprise's failure to provide uninsured motorist coverage, results in the imposition of uninsured motorist coverage by operation of law pursuant to [WlS. STAT. § 632.32]." They maintained, therefore, that Smith was Enterprise's insured and that they, as his passengers, were entitled to coverage.

¶ 5. The circuit court disagreed. Granting Enterprise's motion for summary judgment, the court provided a thorough written decision concluding, in part, that under this court's decisions in Classified Insurance Co. v. Budget Rent-A-Car of Wisconsin, Inc., 186 Wis. 2d 478, 521 N.W.2d 177 (Ct. App. 1994), and Janikowski v. State Farm Mutual Automobile Insurance Co., 187 Wis. 2d 424, 523 N.W.2d 130 (Ct. App. 1994), the Prophets were not entitled to uninsured motorist coverage under the Smith/Enterprise rental agreement. Although the facts of the instant case differ from those of Classified and Janikowski, we conclude that their holdings logically extend to this appeal and require affirmance of the summary judgment for Enterprise.

II. DISCUSSION

¶ 6. We review a circuit court's grant of summary judgment de novo, applying the same standards and methodology as the circuit court under Wis. Stat. § 802.08. See Janikowski, 187 Wis. 2d at 427. A circuit court's summary judgment determination of whether a car rental agreement constitutes a "policy of insurance" under WlS. Stat. § 632.32 requires the application of statutes to undisputed facts and, therefore, also presents an issue subject to our de novo review. See id.

¶ 7. Wisconsin Stat. § 632.32, in relevant part, provides:

(1) SCOPE. Except as otherwise provided, this section applies to every policy of insurance issued or delivered in this state against the insured's liability for loss or damage resulting from accident caused by any motor vehicle, whether the loss or damage is to property or to a person.
(4) Required uninsured motorist and medical PAYMENTS COVERAGES. Every policy of insurance subject to this section . . . shall contain . . . provisions approved by the commissioner [of insurance]:
(a) Uninsured motorist. 1. For the protection of persons injured who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury ... in limits of at least $25,000 per person and $50,000 per accident.

It is undisputed that if the Smith/Enterprise rental agreement constitutes a "policy of insurance" subject to § 632.32, then the policy would require uninsured motorist coverage and the Prophets, as Smith's passengers, would be covered. It is also undisputed, however, that if the rental agreement does not constitute a "policy of insurance" subject to the requirements of § 632.32, then the agreement's explicit provisions waiving uninsured motorist coverage would preclude the Prophets' claim.

¶ 8. The Prophets argue that the Smith/Enterprise rental agreement created a "risk sharing, arrangement" establishing a "policy of insurance." See Wis. Stat. § 600.03(25)(a)l (" 'Insurance' includes ... [r]isk distributing arrangements providing for compensation of damages or loss through the provision of services or benefits in kind rather than indemnity in money."); see also Wis. Stat. § 600.03(35) (" 'Policy' means any document other than a group certificate used to prescribe in writing the terms of an insurance contract."). Understandably, therefore, they contend: "If the legislature intended to require all insurers to provide uninsured motorist coverage in every policy of automobile insurance so to[o] did it intend for rental car companies that actually provide insurance coverage to their customers to provide uninsured motorist coverage as well."

¶ 9. Enterprise responds, however, that Wis. Stat. § 632.32(4)(a) is inapplicable to self-insured vehicle rental companies. Instead, Enterprise maintains, Wis. Stat. ch. 344 governs and does not require that a self-insured vehicle rental company provide uninsured motorist coverage. Enterprise is correct.

¶ 10. It is undisputed that, prior to the accident, Enterprise had obtained a certificate of self-insurance from the Wisconsin Secretary of Transportation, pursuant to Wis. Stat. § 344.16, which, in relevant part, provides:

Requirements as to self-insurers. (1) Any person in whose name more than 25 motor vehicles are registered may qualify as a self-insurer by obtaining a certificate of self-insurance issued by the secretary [of transportation] as provided in sub. (2).
(2) The secretary may, upon the application of such a person, issue a certificate of self-insurance when satisfied that such person is possessed and will continue to be possessed of ability to pay judgments obtained against such person.

It is also undisputed that although Chapter 344 establishes certain requirements for self-insuring entities, providing uninsured motorist coverage is not among them.

¶ 11. A motor vehicle rental company operating in Wisconsin is subject to the requirements of Wis. Stat. § 344.51, a section of Wisconsin's financial responsibility law for rented vehicles. It provides, in part:

No person may for compensation rent . . . any motor vehicle to be operated by . . . the person renting . . . the vehicle unless there is filed with the department [of transportation] a good and sufficient bond or policy of insurance issued by an insurer authorized to do an automobile liability insurance or surety business in this state. The bond, policy or certificate shall provide that the insurer which issued it will be liable for damages caused by the negligent operation of the motor vehicle ....

WlS. Stat. § 344.51(1). As we clarified in Classified, this section of the statute "deals specifically with providing protection for third-parties injured through the negligent operation of the rented motor vehicle." See Classified, 186 Wis. 2d at 486 (emphasis added). By its clear and unambiguous terms, however, it does not provide protection for persons injured through the negligent operation of another vehicle, even if driven by an uninsured motorist.

¶ 12. Still, even accepting that Enterprise is governed by Wis. Stat. § 344.51, might its rental agreements, providing insurance, also be subject to the requirements of Wis. Stat. § 632¡32? Under Classified and Janikowski, the answer is no.

¶ 13. In Classified, Rodee, an employee of Budget Rent-A-Car, had not rented a car but was driving a Budget car when she was involved in a collision with an uninsured motorist. See Classified, 186 Wis. 2d at 480. Rodee's own vehicle was insured by Classified Insurance Company; Budget was self-insured under WlS. Stat. § 344.16. See id. Classified paid Rodee $30,000 to settle her uninsured motorist claim, and then sued Budget for indemnification/contribution. See id. The circuit court granted summary judgment to Budget, concluding that Budget, as a self-insured entity under Wis. Stat. ch. 344, was not required to provide uninsured motorist coverage for occupants of its cars. See id.

¶ 14. We affirmed, concluding that because Budget was a self-insured entity under Wis. Stat. § 344.16, it was not subject to Wis. Stat. § 632.32(4)(a) and, therefore, was not required to provide uninsured motorist coverage. See id. at 483-87. Declaring that § 632.32(4)(a) was "inapplicable," we explained:

We reach this conclusion based on our determination that § 632.32(4)(a) applies only to policies of insurance issued or delivered in Wisconsin. Budget is not an insurance company and has not issued a policy of insurance.... By merely obtaining a certificate of self-insurance pursuant to ch. 344, Budget did not transform itself into an insurance entity capable of issuing an insurance policy on behalf of the operators of its vehicles.
... A careful reading of [ch. 344] reveals that there is no requirement that an owner or operator of a vehicle that has been in an accident in Wisconsin meet any requirements to protect himself, such as with uninsured motorist coverage, in the event of an accident involving his vehicle.

Id. at 483-84.

¶ 15. Still, the instant case is distinguishable. After all, here, unlike the situation in Classified where the Budget employee had not rented the car she was driving, the Prophets were in a car that Smith had rented. Further, Smith not only paid Enterprise to rent the car, but also paid for insurance. Thus, the Prophets reasonably argue that Classified does not control. But they still must contend with Janikowski.

¶ 16. In Janikowski, Schmidt rented a car from National Car Rental in Illinois and gave Janikowski permission to drive it. See Janikowski, 187 Wis. 2d at 426. While driving the car in Milwaukee, with his mother as a passenger, Janikowski was involved in an accident with an uninsured vehicle; his mother was injured. See id. Janikowski's mother was insured by American Family Mutual Insurance Company, which paid her $25,000 under the uninsured motorist portion of her policy. See id. American Family then sued National for indemnification. See id. The circuit court granted summary judgment to National, concluding that the Illinois rental lease agreement did not constitute an insurance contract and, therefore, National was not required to provide Wisconsin uninsured motorist coverage. See id.

¶ 17. We affirmed; in doing so, however, we rejected the formulation of the issue as raised by American Family — "whether an out-of-state car rental lease agreement is an insurance policy requiring uninsured motorist coverage." See id. at 425. Instead, we held that "whether or not an out-of-state lease agreement is an insurance policy is irrelevant because, under [Wis. Stat.] §§ 344.52 and 632.32, ... a self-insuring out-of-state rental car agency is not required to provide uninsured motorist coverage." See id. at 425-26. Moreover, and of particular significance to the instant appeal, we commented:

We also note our recent decision [in Classified], which held that a self-insured vehicle rental company was not required to provide [uninsured motorist] coverage to one of its employees who was operating one of its vehicles that was involved in a collision with an uninsured motorist. Although Classified is distinguishable because it involved neither a rental lease agreement nor an out-of-state or foreign, self-insuring vehicle lessor, Classified still is persuasive authority for the proposition that, absent a specific statutory duty, self-insurers are not required to provide [uninsured motorist] or [under-insured motorist] coverage.

Id. at 429-30 (emphasis added).

¶ 18. Although neither Classified nor Janikow-ski addressed circumstances quite like those of the instant case, taken together, they all but mandate our rejection of the Prophets' argument. Classified establishes that Wis. Stat. § 632.32(4)(a) is "inapplicable to ... a self-insured entity." See Classified, 186 Wis. 2d at 483. Enterprise is a self-insured entity. Janikowski establishes that "absent a specific statutory duty, self-insurers are not required to provide [uninsured motorist] . . . coverage." Janikowski, 187 Wis. 2d at 430. No statute requires Enterprise, a self-insured entity, to provide uninsured motorist coverage as part of the optional insurance it offers its customers. Thus, notwithstanding the distinguishing factors of each case, we conclude that Classified and Janikowski, read together, defeat the Prophets' theory.

¶ 19. We can appreciate the Prophets' concerns, and we do understand that they and others who occupy rental vehicles, for which optional insurance coverage has been purchased, may be surprised to learn of the limits of the coverage. Still, in this case, the limitations were clearly stated in the rental agreement. Further, if the Prophets are correct in arguing that this conclusion is "inconsistent with the intent and purpose" of Wis. Stat. § 632.32(4), then we must say here, as we said in Janikowski, that reaching a different conclusion would involve "a policy decision more appropriately left to the supreme court or legislature." See Janikowski, 187 Wis. 2d at 430.

By the Court. — Judgment affirmed.

       All references to the Wisconsin Statutes are to the 1995-96 version.


author: CANE, C.J.

text:
    George A. Mudrovich, Plaintiff-Appellant, Ryan D. Lister, Appellant, v. Shar Soto and Holly Martin, Defendants-Respondents.
    Court of Appeals

      No. 99-1410.

      Submitted on briefs May 30, 2000.

    Decided July 5, 2000.

    2000 WI App 174
    (Also reported in 617 N.W.2d 242.)

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Ryan D. Lister of Wausau.
    On behalf of the defendants-respondents, the cause was submitted on the brief of Cari L. Westerhof of Ruder, Ware & Michler of Wausau.
    Before Cane, C.J., Peterson and Roggensack, JJ.
   CANE, C.J.

¶ 1. George A. Mudrovich and Ryan Lister (collectively Mudrovich) appeal from a summary judgment dismissing Mudrovich's claim against Shar Soto and Holly Martin and awarding Soto and Martin attorney fees and costs pursuant to WlS. Stat. § 814.025. Mudrovich argues that the circuit court erred by concluding his Wis. Stat. § 134.01 claim for injury to his reputation and profession is barred by the exclusive remedy provision of the Worker's Compensation Act. Mudrovich additionally argues that because he had a reasonable basis in law to maintain his action, the circuit court erred by concluding his claim was frivolous. Because the facts of this case satisfy the conditions of liability under the Act, we conclude that the circuit court did not err by dismissing Mudrovich's § 134.01 claim. We conclude, however, that given the distinction between a defamation claim and an action filed under § 134.01, Mudrovich should have been allowed some latitude to seek a clarification of the Act's applicability to the facts of his case. Accordingly, we affirm that part of the judgment dismissing Mudrovich's claim and reverse that part of the judgment awarding attorney fees and costs for a frivolous claim.

Background

¶ 2. The circuit court found the following facts. During the 1996-97 school year, Mudrovich was employed as a French teacher at D.C. Everest Junior High School, while Soto and Martin were employed as Spanish teachers. In May of 1997, Mudrovich sent several students to Carol Maki, a tutor who administered make-up tests. Because Mudrovich failed to send his students with a "study buddy," a hall pass used by the school, Maki returned the students with a note asking Mudrovich to "please send study buddies." In response, Mudrovich wrote "oh, cram it" on Maki's note and returned it to her mailbox.

¶ 3. Concurrent with the "note" incident was a dispute within the foreign language department regarding room assignments for the upcoming school year. Due to the number of foreign language classes and limited physical space available in the school, some teachers were going to have to share classrooms. Accordingly, the department met to discuss room assignments. Mudrovich's request for his own classroom was met with resistance from other teachers within the foreign language department, including Soto and Martin.

¶ 4. Unable to come to an agreement, Mudrovich and Martin developed competing proposals for room assignments and sought to introduce these proposals to the assistant principal, Michael Sheehan. During the course of Martin's meeting with Sheehan, she expressed frustration with what she perceived to be Mudrovich's unwillingness to compromise. Incidental to this discussion, Martin told Sheehan about the note incident, but inadvertently misquoted Mudrovich's response as being "That is crap." During a later discussion with Soto, Martin realized her error. Martin and Soto then returned to Sheehan's office to clarify that Mudrovich had actually written "oh, cram it." At some point during this follow-up meeting, the principal, Robert Knaack, overheard the conversation and became aware of the note incident.

¶ 5. Knaack subsequently summoned Mudrovich to his office. Mudrovich claimed that Knaack informed him that four teachers had complained about his verbal abuse of Maki. Although Mudrovich explained that the note was intended as a joke, Knaack stated that Mudrovich's response was inappropriate and further advised Mudrovich against any future similar behavior. No further disciplinary action was taken.

¶ 6. Mudrovich was terminated from his employment a year later. He subsequently filed an action against Martin and Soto in circuit court, alleging defamation and injury to his reputation and profession, contrary to WlS. Stat. § 134.01. Mudrovich claimed that following the note incident, he was treated poorly by fellow employees, thus frustrating his ability to teach. He further claimed that Martin and Soto created an environment that ultimately led to the termination of his employment. The circuit court granted summary judgment in favor of Martin and Soto and awarded attorney fees and costs pursuant to Wis. Stat. § 814.025. This appeal followed.

Analysis

¶ 7. Whether summary judgment was appropriate presents a question of law that we review independently of the circuit court. See Fortier v. Flambeau Plastics Co., 164 Wis. 2d 639, 651-52, 476 N.W.2d 593 (Ct. App. 1991). When reviewing summary judgments, we utilize the same analysis as the circuit court and must apply the standards set forth in WlS. Stat. § 802.08(2). See Schultz v. Industrial Coils, Inc., 125 Wis. 2d 520, 521, 373 N.W.2d 74 (Ct. App. 1985). In general, "summary judgment is proper where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law." Kenefick v. Hitchcock, 187 Wis. 2d 218, 224, 522 N.W.2d 261 (Ct. App. 1994).

A. Application of the Worker's Compensation Act

¶ 8. Mudrovich contends that the circuit court erred by concluding that his Wis. Stat. § 134.01 claim for injury to his reputation and profession is barred by the exclusive remedy provision of the Worker's Compensation Act. Soto and Martin respond that Mudrovich's § 134.01 claim is a hybrid form of defamation and thus falls within the purview of the Act's exclusive remedy provision. The issue of whether Mudrovich's claim is subject to the Act's exclusive remedy provision is a question of law that this court reviews de novo. See Lentz v. Young, 195 Wis. 2d 457, 468, 536 N.W.2d 451 (Ct. App. 1995).

¶ 9. Wisconsin Stat. § 102.03 provides that liability for worker's compensation exists under the Act only where the following conditions occur: (1) the employee sustains an injury; (2) at the time of the injury, both the employee and the employer are subject to the provisions of the Act; (3) at the time of the injury, the employee is performing service growing out of and incidental to his or her employment; (4) the employee's injury has not been self-inflicted; and (5) the accident or disease that causes the employee's injury arises out of his or her employment. Section 102.03(2) further provides: "Where such conditions [of liability] exist the right to the recovery of compensation under this chapter shall be the exclusive remedy against the employer, any other employe of the same employer and the worker's compensation insurance carrier." Mudrovich contends that the third and fifth conditions of liability are absent under these facts.

¶ 10. First, Mudrovich argues that Soto and Martin were required to establish "that they were performing services growing out of and incidental to their employment." He is mistaken as "only the injured employee, and not the injuring coemployee need have been acting within the scope of his or her employment at the time of the injury." Jenson v. Employers Mut. Cas. Co., 161 Wis. 2d 253, 270, 468 N.W.2d 1 (1991) (quoting Rivera v. Safford, 126 Wis. 2d 462, 467-68, 377 N.W.2d 187 (Ct. App. 1985)). The question thus becomes whether Mudrovich was performing services growing out of and incidental to his employment at the time of injury. We conclude that he was.

¶ 11. The basis of Mudrovich's Wis. STAT. § 134.01 claim is the allegation that Martin and Soto told a school administrator that Mudrovich had verbally abused Maki, a subordinate. Soto's and Martin's remarks, however, were made to school administrators on school property regarding the conduct of one co-employee toward another co-employee. Additionally, Mudrovich, emphasizing the conflict over classroom assignments within the foreign language department, intimates that the classroom issue was the motivation behind Soto and Martin's intent to injure his reputation and profession. In Jenson, our supreme court held that "[w]here the work environment is one of the causative factors ... it is immaterial whether the motive is or is not work connected." Jenson, 161 Wis. 2d at 271. Here, not only were Soto's and Martin's remarks made within the work environment, but their impetus was allegedly a school-related conflict over classroom assignments. Because the remarks resulting in Mudrovich's claimed injury arose out of his employment, we conclude that Mudrovich was performing services growing out of and incidental to his employment at the time of injury.

¶ 12. Second, Mudrovich contends that because Martin's and Soto's remarks were intentional, his injury was not caused by accident or disease, as is reqtdred under the Act. We disagree. In Jenson, a village clerk-treasurer brought a claim against the village president alleging intentional infliction of emotional distress arising out of alleged statements in which the president publicly accused the clerk-treasurer of dishonesty and incompetence in her capacity as a municipal employee. See id. at 257-58. In Jenson, as here, the clerk-treasurer argued that intentional acts may not be deemed accidents under the Act. Our supreme court concluded, however, as a matter of law, that "such conduct constitutes an accident as the term is used under the provisions of [the Act]." Id. at 266. Consistent with Jenson, we determine that Martin's and Soto's remarks may be deemed an "accident" under the Act.

¶ 13. Because the conditions of liability for application of the Act are satisfied by the facts of this case, we conclude that the circuit court did not err by dismissing Mudrovich's WlS. Stat. § 134.01 claim as barred by the Act's exclusive remedy provision.

B. Frivolous Claim

¶ 14. Mudrovich argues that the circuit court erred by finding his claim frivolous and awarding attorney fees and costs to Soto and Martin. Although this is a much closer question, we agree with Mudrovich. In order to impose sanctions against a party for frivolous claim under Wis. Stat. § 814.025, the court must find one of the following:

(a) The action, special proceeding, counterclaim, defense or cross complaint was commenced, used or continued in bad faith, solely for purposes of harassing or maliciously injuring another.
(b) The party or the party's attorney knew, or should have known, that the action, special proceeding, counterclaim, defense or cross complaint was without any reasonable basis in law or equity and could not be supported by a good faith argument for an extension, modification or reversal of existing law.

Wis. Stat. § 814.025(3). The inquiry into whether a claim is frivolous under the statute is a mixed question of law and fact. See Stern v. Thompson & Coates, Ltd., 185 Wis. 2d 220, 236, 517 N.W.2d 658 (1994). A circuit court's findings of fact will be affirmed unless they are clearly erroneous. See Sellers v. Sellers, 201 Wis. 2d 578, 585-86, 549 N.W.2d 481 (Ct. App. 1996); see also § 805.17(2), Stats. However, "the ultimate conclusion of whether the facts cited fulfill the legal standard of frivolousness is a question of law" that this court reviews de novo. Stern, 185 Wis. 2d at 236. Further, "[a]n appellate court must accept a reasonable inference drawn by the trial court from established facts if more than one reasonable inference may be drawn." Id. at 237. However, "[w]hether an inference is reasonable is itself a question of law." Id.

¶ 15. Here, the circuit court reasoned that Mudrovich or his attorney should have known that the Act guarantees payment if liability and damages are proven. The court consequently concluded that Mudrovich's insistence on pursuing a civil lawsuit was for the sole purpose of harassing Soto and Martin. The court further concluded that given the Act's exclusive remedy provision, Mudrovich's claim is without a reasonable basis in law or equity. Both of the court's conclusions, however, presume the Act's applicability to actions filed under Wis. Stat. § 134.01. The circuit court cited a line of cases holding that defamatory comments made in the course of employment by co-employees fall within the purview of the Act. A claim under § 134.01, however, is not synonymous with a defamation claim.

¶ 16. In Segall v. Hurwitz, 114 Wis. 2d 471, 486, 339 N.W.2d 333 (Ct. App. 1983), this court held that a WiS. Stat. § 134.01 claim was not equivalent to a defamation claim and was not controlled by the defamation statute of limitations. Although the facts of the present case fall under the Act, it is undisputed that the issue of whether the Act's exclusive remedy provision may bar a claim under § 134.01 has never been specifically addressed. Given the distinction between a defamation claim and an action filed under § 134.01, Mudrovich should have been allowed some latitude to seek a clarification of the Act's applicability to the facts of his case. We therefore reverse that part of the judgment finding Mudrovich's claim frivolous and awarding Martin and Soto attorney fees and costs.

By the Court. — Judgment affirmed in part; reversed in part and cause remanded. Costs denied.

       All statutory references are to the 1997-98 version unless otherwise noted.

       Wisconsin Stat. § 134.01 provides:
      Injury to business; restraint of will. Any 2 or more persons who shall combine, associate, agree, mutually undertake or concert together for the purpose of wilfully or maliciously injuring another in his or her reputation, trade, business or profession by any means whatever, or for the purpose of maliciously compelling another to do or perform any act against his or her will, or preventing or hindering another from doing or performing any lawful act shall be punished by imprisonment in the county jail not more than one year or by fine not exceeding $500.

       Mudrovich does not appeal from that part of the judgment dismissing his defamation claim.

       Martin and Soto urge this court to award reasonable appellate attorney fees and costs pursuant to Wis. Stat. § 802.05 and Riley v. Isaacson, 156 Wis. 2d 249, 262, 456 N.W.2d 619 (Ct. App. 1990), which held that if a claim is correctly adjudged to be frivolous in the trial court, "it is frivolous per se on appeal." Because we conclude that Mudrovich's Wis. Stat. § 134.01 claim was not frivolous, Martin and Soto's request for attorney fees and costs on appeal is denied.

       We refrain from addressing any alternative arguments because only dispositive issues need be addressed. See Sweet v. Berge, 113 Wis. 2d 61, 67, 334 N.W.2d 559 (Ct. App. 1983).


author: PETERSON, J.

text:
    State of Wisconsin, Plaintiff-Respondent, v. T.J. International, Inc., Defendant-Appellant, Norco Windows, Inc., Defendant, Jeld-Wen, Inc., Defendant-Co-Appellant.
    Court of Appeals

      No. 99-2803.

      Submitted on briefs June 19, 2000.

    Decided July 11, 2000.

    2000 WI App 181
    (Also reported in 617 N.W.2d 256.)

      On behalf of the defendant-appellant, the cause was submitted on the briefs of Fred G. Groiss of Quarles & Brady LLP, Milwaukee.
    On behalf of the defendant-co-appellant, the cause was submitted on the briefs of Lawrence T. Lynch of Foley & Lardner, Milwaukee.
    On behalf of the plaintiff-respondent, the cause was submitted on the brief of James E. Doyle, attorney general, and Jerry L. Hancock, assistant attorney general.
    Before Cane, C.J., Hoover, P.J., and Peterson, J.

      Petition to review granted.

   PETERSON, J.

¶ 1. This is a review of an original action brought by the State of Wisconsin under the Wisconsin Business Closing and Mass Layoff Law, WlS. Stat. § 109.07 (the Act). The Act requires an employer to give sixty days notice of a "business closing," which is defined in relevant part as a "permanent or temporary shutdown of an employment site" that affects a specified number of employees. WiS. Stat. § 109.07(l)(b). The circuit court entered judgment in favor of the State after it concluded that T.J. International closed its business based in part on the effect the business's sale had on its employees. We reverse because the sale did not result in even a temporary shutdown of the employment site.

Background

¶ 2. Windows have been made in Hawkins, Wisconsin, for more than seventy-five years and continue to be made there today. The Hawkins plant is now owned by Jeld-Wen, Inc. Jeld-Wen acquired the business assets on July 1, 1996, from Norco Windows, Inc., a division of T.J. International, Inc. For ease of discussion, we refer to both Norco Windows and T.J. International as Norco.

¶ 3. Norco sent its employees a couple of letters leading up to the business sale. The first was dated April 8,1996, and explained that Norco intended to sell the plant but that employment was expected to remain steady. On June 7, Norco sent a second letter to its employees to update them on the status of negotiations and how the sale would affect their employment. The letter informed the employees that after the July 1 sale, Norco would no longer be their employer but that they could apply with Jeld-Wen if interested. The letter stated, "Jeld-Wen will make all hiring decisions for its work force, and any failure by Jeld-Wen to hire an associate should be expected to be permanent."

¶ 4. In preparing to take over operations, Jeld-Wen began accepting applications from Norco employees. Jeld-Wen actually hired 343 of the 396 Norco employees who applied for work before the sale. These employees missed no work, and the State stipulated that "Jeld-Wen continued the operations of the . . . facility without interruption immediately after the asset sale." The State also stipulated that Jeld-Wen eventually hired 349 of Norco's 459 former employees.

¶ 5. In response to the sale preparations, the union president filed an administrative complaint against Norco with the Department of Workforce Development (the department). The complaint alleged a violation of the sixty-day notice requirement under the Act. The department issued an initial determination on July 18, 1997, concluding that the sale constituted a business closing under Wis. STAT. § 109.07(l)(b). The department substantially affirmed that decision in its amended final determination on November 25.

¶ 6. The department's decision found all the defendants liable for violating the Act's notice requirements. When the defendants failed to comply with the decision's mandate, the department referred the case to the Wisconsin Department of Justice (the State). On March 11, 1998, the State filed an action in circuit court against all three defendants. All parties moved for summary judgment, and the circuit court granted the State's motion.

Analysis

¶ 7. As previously indicated, the principal issue is whether the sale of business assets constituted a business closing when operations continued through the sale. To resolve this issue we must interpret the Act and decide whether the department and circuit court properly concluded that there was a business closing. While we defer to agency interpretations of statutes in certain situations, see UFE Inc. v. LIRC, 201 Wis. 2d 274, 284, 548 N.W.2d 57 (1996), the State agrees that we should review this case without deferring to the department's determination. We also review the circuit court's statutory interpretation de novo. See Stockbridge School Dist. v. DPI, 202 Wis. 2d 214, 219, 550 N.W.2d 96 (1996).

¶ 8. "The ultimate goal of statutory interpretation is to ascertain legislative intent." UFE, 201 Wis. 2d at 281. "The first step of this process is to look at the language of the statute." Id. If the plain meaning is clear, a court need not look to rules of statutory construction or other extrinsic aids. See id.

¶ 9. Wisconsin Stat. § 109.07(lm) requires "an employer who has decided upon a business closing or mass layoff in this state" to give notice of that action to, among others, "any affected employe." Section 109.07(l)(b) defines a "business closing" as "a permanent or temporary shutdown of an employment site ... that affects 25 or more employes ...." A "mass layoff," on the other hand, means "a reduction in an employer's work force that is not the result of a business closing that affects . . . [a]t least 25% of the employer's work force or 25 employes, whichever is greater." Section 109.07(l)(f).

¶ 10. Regardless of an event's affect on employees, however, for a business closing there must first be a "permanent or temporary shutdown of an employment site." Wis. Stat. § 109.07(l)(b). By reference to "an employment site," this definition focuses on what actually occurs at an employment location. The legislature chose language that limits this triggering event from including other events that, although involve no actual stoppage of work, may also significantly affect employees. While a broader definition may have included a sale, under this definition there was no business closing because the employment site did not shut down for any period of time.

¶11. The State nevertheless contends that the business closed because Norco effectively terminated all its employees when it sold the business assets. But we reiterate that the triggering event includes more than a test of how many employees are affected. That conclusion is also supported by the definition of an "affected employee," which is "an employe who loses, or may reasonably be expected to lose, his or her employment with an employer who is required to give notice . . . because of the business closing or mass layoff." WlS. Stat. § 109.07(l)(a) (emphasis added).

¶ 12. The State has expressly stipulated that "Jeld-Wen continued the operations of the . . . facility without interruption immediately after the asset sale." The employment site was never shut down, operations were never suspended and therefore there was no business closing.

¶ 13. We are also precluded from determining that the asset sale constituted a mass layoff for two reasons. First, the State has never claimed that Norco's sale constituted a mass layoff. Second, Jeld-Wen hired more than 75% of Norco's former employees within six months of the sale. See Wis. Stat. § 109.07(l)(f).

¶ 14. The State asks that we consider the primary purpose of the statute, which it contends is to mitigate the economic hardship created by business transactions that impact employees. The State notes that all the employees were affected because they theoretically lost their jobs and had to apply for new ones with Jeld-Wen. We understand that the Act was enacted for employees' protection, but we cannot rewrite it to require employers to give sixty days' notice for wage adjustments or other modification of employee benefits. The Act creates rights of notification for lost employment from an employment site shutdown or mass layoff. Neither happened here.

By the Court. — Judgment reversed.

       All statutory references are to the 1995-96 edition.

       Jeld-Wen also moved for dismissal on two jurisdictional issues and again raises those issues on appeal. It argues: (1) it is not a proper party because it was not named in the union's original complaint to the department; and (2) the department failed to refer the case to the State in a timely manner. We are not persuaded by either argument. At the time the union filed its original complaint, Jeld-Wen had not purchased Norco. After the sale Jeld-Wen fully participated in the department's investigations and decision-making process. It has therefore waived any argument that it was not an appropriate party to the department's determination. Its second argument is insufficiently developed in that it fails to explain how any of the time limit's it cites in Wis. Stat. § 109.07(4) relate to the jurisdictional time the department has to refer a claim to the State. The referenced time limits merely prescribe the minimum time the department must wait before referring the claim to the State for further prosecution, see § 109.07(4)(b), and the time limit the department of justice has to begin an action after referral, see § 109.07(4)(d).

       For our purposes the practical difference between a business closing and a mass layoff is the number of affected employees that satisfies each triggering event's definition. While 25 affected employees is sufficient for a business closing, at least 25% of the employer's workforce must be affected to constitute a mass layoff.

       Both Norco and Jeld-Wen cite federal case law as supporting their positions and our conclusion. The federal counterpart of Wisconsin's Act is the Worker Adjustment and Retraining Notification Act (WARN), 29 U.S.C. § 2101 et seq. While the department's regulations state that Wisconsin law should be interpreted consistent with federal law to the extent their provisions are the same, see Wis. Admin. Code § DWD 279.002, we do not rely on federal law for two related reasons. First, WARN contains a "sales exception" not present in Wisconsin's law. Federal courts have relied heavily on this exception in deciding that a business sale is not a WARN event. See, e.g., Headrick v. Rockwell Int'l Corp., 24 F.3d 1272, 1280-81 (10th Cir. 1994).
      Second, every cited federal case discusses a sale's effect on employees, not the statutory definition of a business closing. See, e.g., id. at 1281 (stating that the sales exception may have been an unnecessary safeguard because "the transfer of employees during a sale [may] not have qualified" under WARN as a "termination").

       Disputing this construction, the State cites International Oil v. Uno-Ven Co., 170 F.3d 779, 784 (7th Cir. 1999), for the proposition that Jeld-Wen's reduction of employee benefits means that all the employees were affected under the Act. Setting aside the initial defect of the State's argument that ignores the absence of an employment site shutdown, the Seventh Circuit's analysis does not support the State's contention. International Oil indicated that employment termination under WARN includes constructive termination. See id. The court's discussion only indicated that "shenanigans" like "offering to rehire the workers at a wage so much lower than their previous wage, or on conditions so much inferior, as to rebut an inference of continuity of employment" could constitute constructive termination and therefore require WARN notice. Id. That analysis is inapplicable here.

       Although we do not give the department's determination any deference, we note that it relied on Wis. Stat. § 109.07(6)(a). That section provides that an employer is not liable for failing to give notice if the business closing or mass layoff is the result of "[t]he sale of part or all of the employer's business, if the purchaser agrees ... to hire substantially all of the affected employes with not more than a 6-month break in employment." Id. Presumably, the department concluded that the sale of a business always affects employees. That is not how we read the statute. By its express terms, the exception to an employer's liability only applies when a business closing (or mass layoff) has otherwise occurred. Also, because our holding makes it unnecessary, we do not address the defendants' attempt to comply with this section. ■


text:
    R.W. Docks & Slips, Plaintiff-Appellant, v. State of Wisconsin and Wisconsin Department of Natural Resources, Defendants-Respondents.
    Court of Appeals

      No. 99-2904.

      Submitted on briefs June 12, 2000.

    Decided July 11, 2000.

    2000 WI App 183
    (Also reported in 617 N.W.2d 519.)

      On behalf of the plaintiff-appellant, the cause was submitted on the briefs of Jason W. Whitley ofNovitzke, Gust & Sempfoi Amery.
    On behalf of the defendants-respondents, the cause was submitted on the brief of James E. Doyle, attorney general, and Joanne F. Kloppenburg, assistant attorney general.
    Before Cane, C.J., Hoover, P.J., and Peterson, J.

      Petition to review granted.

   CANE, C.J.

¶ 1. R.W. Docks & Slips appeals from a summary judgment dismissing Docks' claim against the Wisconsin Department of Natural Resources. Docks argues that the circuit court erred by concluding that the DNR's denial of a dredging permit did not constitute a regulatory taking. Because Docks maintains the benefit of all or substantially all of its property and because it assumed the risk of loss inherent in commencing a project without all necessary permits, we affirm the circuit court's judgment dismissing Docks' claim.

Background

¶ 2. The relevant facts are undisputed. Docks, a general partnership in the business of developing recreational marinas, developed Port Superior in Bayfield. Port Superior was designed to consist of 272 boat slips. In 1986, the DNR refused to grant Docks the dredging permit necessary to construct the remaining seventy-one of its 272 planned boat slips. After exhausting the available administrative appeals, Docks filed suit against the DNR in circuit court, alleging a taking of property without just compensation in violation of both the state and federal constitutions. The circuit court subsequently granted the DNR's motion for summary judgment and this appeal followed.

Analysis

¶ 3. Whether summary judgment was appropriately granted presents a question of law that we review independently of the circuit court. See Fortier v. Flambeau Plastics Co., 164 Wis. 2d 639, 651-52, 476 N.W.2d 593 (Ct. App. 1991). When reviewing summary judgments, we utilize the same analysis as the circuit court and must apply the standards set forth in Wis. Stat. § 802.08(2). See Schultz v. Industrial Coils, 125 Wis. 2d 520, 521, 373 N.W.2d 74 (Ct. App. 1985). In general, "summary judgment is proper where there are no genuine issues of material fact and the moving party is entitled to judgment as a matter of law." Kenefick v. Hitchcock, 187 Wis. 2d 218, 224, 522 N.W.2d 261 (Ct. App. 1994).

¶4. The circuit court concluded that (1) Docks did not have a recognizable property interest in the seventy-one undeveloped boat slips; (2) even if Docks had. a recognizable property interest in the undeveloped boat slips, its interest was subject to the public trust doctrine; and (3) in any event, there was no unconstitutional taking because Docks has retained considerable practical use of the property. Docks contends that the circuit court mischaracterized its argument. It concedes that the DNR had the authority to deny the permits necessary to develop the remaining boat slips. Docks argues, however, that the DNR's denial of the dredging permit necessary to complete the remaining seventy-one boat slips constituted a regulatory taking of Docks' property without just compensation. Specifically, Docks contends that the DNR's denial of the dredging permit either deprived Docks of substantially all of the beneficial use of its property or deprived it of its reasonable investment expectations.

¶ 5. The issue of whether the DNR's denial of the dredging permit constituted a regulatory taking of Docks' property without just compensation is a question of law that this court reviews de novo. See Zealy v. City of Waukesha, 201 Wis. 2d 365, 372, 548 N.W.2d 528 (1996). Article I, § 13 of the Wisconsin Constitution provides: "The property of no person shall be taken for public use without just compensation therefor." Our supreme court has recognized, however, that a taking "need not arise from an actual physical occupation of land by the government." Eberle v. Dane Cty. Bd. of Adjust., 227 Wis. 2d 609, 621, 595 N.W.2d 730 (1999). Rather, "[t]here can be a 'taking' if a restriction, short of an actual occupation, deprives the owner of all, or substantially all, of the beneficial use of his property." Id. (quoting Howell Plaza, Inc. v. State Highway Comm'n, 66 Wis. 2d 720, 726, 226 N.W.2d 185 (1975)). Takings that do not involve physical invasions of land are called "regulatory takings." Id. at 622.

¶ 6. When a landowner alleges a regulatory taking, a court should examine the following factors: (1) the character of the governmental action; (2) the economic impact of the regulation on the claimant; and (3) the extent to which the regulation has interfered with distinct investment-backed expectations. See Zealy, 201 Wis. 2d at 374. Although a court should consider these factors, "the rule emerging from opinions of our state courts and the United States Supreme Court is that a regulation must deny the landowner all or substantially all practical uses of a property in order to be considered a taking for which compensation is required." Id.

¶ 7. Before determining whether a regulatory taking has occurred, however, a court must first determine what is the property at issue. See id. at 375. Our supreme court has recognized that a landowner's property should be considered as a whole:

"Taking" jurisprudence does not divide a single parcel into discrete segments and attempt to determine whether rights in a particular segment have been entirely abrogated. In deciding whether a particular governmental action has effected a taking, this Court focuses rather both on the character .of the action and on the nature and extent of the interference with rights in the parcel as a whole.

Id. at 376 (quoting Penn Cent. Transp. Co. v. New York City, 438 U.S. 104, 130-31 (1978)). To the extent that Docks may argue that it has been deprived of all or substantially all of the beneficial use of its property, it is mistaken. We do not look to the value of the undeveloped boat slips, but rather to the value of Docks' property as a whole. Further, any depreciation in the property's value must not be based upon changing the character of the land at the expense of harm to public rights. See id. at 380. Despite its inability to develop the seventy-one boat slips, Docks retains the reasonable use of the whole of its riparian property, including the existing 201 boat slips, marina and appurtenant structures.

¶ 8. Docks nevertheless argues that its investment-backed expectations have been thwarted. It contends:

[T]he taking has resulted from government approval of the development of marina facilities and infrastructure necessary to incorporate five main docks and then, after the facilities and infrastructure have been built, refusing the necessary permit to complete the marina in order to protect a weed-bed that would have never grown but for R.W. Docks' investments.

Conversely, the DNR responds that "a property owner who acquires and begins to develop property knowing that permits are required to do so, cannot presume the permits will be granted, and assumes the risk of loss in the event of a denial." We agree. Although Docks intimates thát the DNR granted the previous permits with knowledge of Docks' intent to ultimately build 272 boat slips, it nevertheless concedes that it did not have all permits necessary to complete the project and further concedes that the DNR had the authority to deny the necessary permits. As such, Docks should not have presumed that all necessary permits would be granted. It assumed the risk of loss in the event of the DNR's denial of the permits sought.

¶ 9. Because Docks maintains the benefit of all or substantially all of its property and because it assumed the risk of loss inherent in commencing a project without all necessary permits, we affirm the circuit court's judgment dismissing Docks' claim.

By the Court. — Judgment affirmed.

       Under the public trust doctrine, "the state holds the beds of navigable waters in trust for all of its citizens." State v. Bleck, 114 Wis. 2d 454, 465, 338 N.W.2d 492 (1983). Although originally designed to protect commercial navigation, the doctrine "has been expanded to safeguard the public's use of navigable waters for purely recreational and nonpecuniary purposes." Id.

       We refrain from addressing any alternative arguments because only dispositive issues need be addressed. See Sweet v. Berge, 113 Wis. 2d 61, 67, 334 N.W.2d 559 (Ct. App. 1983).


author: HOOVER, P.J.

text:
    Phyllis M. Landis, individually, and as personal representative for the estate of Edward E. Landis, Plaintiffs-Respondents, v. Physicians Insurance Company of Wisconsin, Inc., Midelfort Clinic, Ltd., Mayo Health System, Luther Hospital and Wisconsin Patients Compensation Fund, Defendants-Appellants, M. Terry McEnany, M.D., Defendant.
    Court of Appeals

      No. 00-0330.

      Submitted on briefs May 15, 2000.

    Decided July 11, 2000.

    2000 WI App 164
    (Also reported in 616 N.W.2d 910.)

      On behalf of the defendants-appellants, the cause was submitted on the briefs of Joy L. O'Grosky, Edith F. Merila and Timothy J. Cesar and Axley Brynelson, LLP of Madison.
    On behalf of the plaintiffs-respondents, the cause was submitted on the brief of J. Drew Ryberg and Michael J. Happe and Kelly & Ryberg, S.C. of Eau Claire.
    Before Cane, C.J., Hoover, P.J., and Schudson, J.

      Petition to review granted.

   HOOVER, P.J.

¶ 1. Luther Hospital appeals an order denying as untimely its motion to dismiss the medical malpractice claim brought by Phyllis Landis individually and as personal representative of the estate of Edward Landis. Edward died as a result of alleged medical malpractice. Phyllis, his surviving spouse, requested mediation pursuant to Wis. Stat. § 655.44 within five years of Edward's death, but commenced this action more than five years after his death. The ultimate issue is whether Phyllis's action was timely filed. We conclude that it was not. Medical malpractice actions are subject to a five-year statute of repose. A mediation request does not toll the statute of repose and does not constitute commencing an action. Because Phyllis's action was filed more than five years after the alleged negligent act or omission, it was not timely under Wis. Stat. § 893.55. Accordingly, the order is reversed.

¶ 2. The relevant facts are undisputed. Edward Landis died on April 1,1994, after undergoing multiple coronary bypass surgery on March 17, 1994. Phyllis asserted that she first learned of the alleged malpractice in February 1999. She requested mediation pursuant to Wis. Stat. § 655.44(4) on March 8,1999. On July 2, after the mediation process was complete, she filed suit. The complaint alleged that Luther Hospital failed to elicit informed consent and failed to provide reasonable care to Edward.

¶ 3. Luther Hospital moved to dismiss on the grounds that Phyllis's claim was time barred. The circuit court denied the motion, concluding that the Wis. Stat. § 893.55 five-year statute of repose was tolled by Wis. Stat. § 655.44(4) because Phyllis's request for mediation was made within five years of Edward's death. Luther Hospital appeals that order.

DISCUSSION

1. Standard of Review

¶ 4. Resolution of the issues presented involves statutory interpretation and the application of the statutes to undisputed facts, both questions of law that we review de novo. See Nelson v. McLaughlin, 211 Wis. 2d 487, 495, 565 N.W.2d 123 (1997). The objective of statutory interpretation is to discern and give effect to the legislature's intent. See Lake City Corp. v. City of Mequon, 207 Wis. 2d 155, 162, 558 N.W.2d 100 (1997). To do so, we look first to the statute's plain language. See id. When the statutory language clearly and unambiguously sets forth the legislative intent, we may not look beyond the language to .determine its meaning. See id. at 163. However, if the statutory language is ambiguous, we may examine the statute's history, scope, context, subject matter, and objective to ascertain the legislative intent. See id.

2. Wisconsin Stat. § 893.55

¶ 5. Wisconsin Stat. § 893.55 provides both a statute of limitations and a statute of repose for medical malpractice actions. It states:

(l)[A]n action to recover damages for injury arising from any treatment or operation performed by, or from any omission by, a person who is a health care provider, regardless of the theory on which the action is based, shall be commenced within the later of:
(a) Three years from the date of the injury, or
(b) One year from the date the injury was discovered or, in the exercise of reasonable diligence should have been discovered, except that an action may not be commenced under this paragraph more than 5 years from the date of the act or omission. (Emphasis added.)

¶ 6. The parties do not dispute that the italicized language creates a five-year statute of repose for medical malpractice claims. It provides that a cause of action must be commenced within a specified amount of time after the defendant's act or omission that allegedly led to injury regardless of whether the plaintiff has discovered the injury or wrongdoing. Indeed, we have held that the five-year provision in Wis. Stat. § 893.55(l)(b) is a statute of repose. See Halverson v. Tydrich, 156 Wis. 2d 202, 208, 456 N.W.2d 852 (Ct. App. 1990).

¶ 7. Because Phyllis's circuit court action was filed more than five years after the act or omission, it is untimely under the statute of repose in WlS. STAT. § 893.55. Nevertheless, Phyllis contends that the statute of repose was tolled by her mediation request. Phyllis alternatively claims that her request for mediation commenced this action.

3. Tolling

¶ 8. Phyllis chose to proceed under Wis.Stat. § 655.44 by requesting mediation before commencing her malpractice action. Section 655.44(4) contains a tolling provision:

Statute OF LIMITATIONS. Any applicable statute of limitations is tolled on the date the director of state courts receives the request for mediation if delivered in person or on the date of mailing if sent by registered mail. The statute remains tolled until 30 days after the last day of the mediation period under s. 655.465 (7). (Emphasis added.)

On its face, subsec. (4) tolls only a statute of limitation. It does not, by its terms, apply to a statute of repose. We perceive no ambiguity in the language the legislature used, and the parties describe none. We therefore conclude that § 655.44(4) tolls only statutes of limitation; it does not toll the Wis. Stat. § 893.55 statute of repose.

¶9. Despite the clear and unambiguous statutory language limiting the WlS. Stat. § 655.44(4) tolling provision to statutes of limitation, Phyllis asserts that it should apply to the WlS. Stat. § 893.55 statute of repose. She contends that the purpose behind the statute of repose is served by filing the request for mediation within the five-year period because the wrongdoer is timely notified of the claim. We disagree. The statute's plain language does not support her construction, and we may not look beyond the statute's unambiguous words. See Nelson, 211 Wis. 2d at 495-96 ("If the meaning of a statute is clear from its language, we are prohibited from looking beyond such language."). Furthermore, we presume the legislature chose its terms carefully and with precision to express its meaning. See Johnson v. City of Edgerton, 207 Wis. 2d 343, 351, 558 N.W.2d 653 (Ct. App. 1996). The language used does not reflect a legislative intent to toll the statute of repose.

¶ 10. Moreover, even if we were to consider the purpose underlying the WlS. Stat. § 893.55 statute of repose as Phyllis suggests, it does not support her position. A statute of repose carries with it a significant degree of certainty. At a specified period of time, a right of action can no longer arise. In Tomczak v. Bailey, 218 Wis. 2d 245, 254, 578 N.W.2d 166 (1998), the supreme court noted that when the legislature creates a statute of repose, it has made a policy determination as to when the claim accrues and when "to close the courthouse doors on litigants with stale claims

¶ 11. WISCONSIN STAT. § 893.55 reflects not only the purpose of the statute of repose by providing a date certain after which a lawsuit may not arise, but also the legislative intent to curb the flow of medical malpractice claims. In State ex rel. Strykowski v. Wilkie, 81 Wis. 2d 491, 261 N.W.2d 434 (1978), the supreme court, while rejecting an equal protection challenge to the medical malpractice statutory scheme, explained:

Medical malpractice actions are substantially distinct from other tort actions. The classification is plainly germane to the act's purposes. The law applies to all victims of health care providers as described therein. The legislature declares that the circumstances surrounding medical malpractice litigation and insurance required the enactment of the legislation.

Id. at 509. Further, the supreme court noted the reasoning contained in the legislation:

The legislature cited a sudden increase in the number of malpractice suits, in the size of awards, and in malpractice insurance premiums, and identified several impending dangers: increased health care costs, the prescription of elaborate "defensive" medical procedures, the unavailability of certain hazardous services and the possibility that physicians would curtail their practices.

Id. at 508. In Lund v. Kokemoor, 195 Wis. 2d 727, 735, 537 N.W.2d 21 (Ct. App. 1995), we noted:

In the wake of its findings, the legislature enacted a medical malpractice statutory scheme to combat the increasing liability insurance costs. A statutory cap was placed on noneconomic damages, § 893.55(4)(d), STATS., a special statute of limitations was introduced to prohibit the commencement of an action more than five years after the act or omission giving rise to the claim, § 893.55(l)(b) and a mediation system was established to provide an alternative means of resolving medical malpractice disputes. Section 655.42, STATS.

It was consistent with the legislature's purpose to enact a statute of repose to extinguish, with certainty and without exception, a medical malpractice right of action five years after the date of the act or omission.

¶ 12. Phyllis next claims that the interplay between Wis. Stat. §§ 893.23 and 655.44(5) operates to toll the five-year statute of repose. She asserts that, because she was statutorily prohibited from commencing a court action until after the mediation period expired, that period of time is not included in calculating the five-year repose period.

¶ 13. Wisconsin Stat. § 655.44(5) provides: "Except as provided in s. 655.445, no court action may be commenced unless a request for mediation has been filed under this section and until the expiration of the mediation period under s. 655.465 (7)."

¶ 14. Wisconsin Stat. § 893.23 provides: "When the commencement of an action is stayed by injunction or statutory prohibition the time of the continuance of the injunction or prohibition is not part of the time limited for the commencement of the action."

¶ 15. Phyllis's argument ignores the distinct nature of medical malpractice actions and the extensive statutory scheme the legislature enacted. The legislature specifically addressed the effect on commencement of actions of a mediation request in WlS. Stat. § 655.44(4). The legislature chose to toll applicable statutes of limitation. It did not toll the WlS. STAT. § 893.55 statute of repose.

¶ 16. Where a general statute conflicts with a specific statute, the specific statute prevails. See State v. Smith, 106 Wis. 2d 151, 159, 316 N.W.2d 124 (Ct. App. 1982). Because Wis. Stat. § 655.44 specifically addresses the effect of the stay, it controls over Wis. Stat. § 893.23. Moreover, were we to adopt Phyllis's construction, § 655.44(4) would be superfluous, a result that we are to avoid in construing statutes. See Kelley Co. v. Marquardt, 172 Wis. 2d 234, 250, 493 N.W.2d 68 (1992).

¶ 17. Other provisions in the medical malpractice statutory scheme reflect the legislative choice not to toll the Wis. Stat. § 893.55 statute of repose for mediation proceedings. The legislature apparently recognized the plight of claimants who must mediate but are faced with an approaching deadline for commencing an action. It enacted Wis. Stat. § 655.445 to permit a claimant to avoid filing an untimely action by commencing a circuit court action first and then requesting mediation. A medical malpractice claimant can thus avoid Phyllis's situation by filing suit first and then requesting mediation as authorized by § 655.445.

4. Commencement of a Medical Malpractice Action

¶ 18. A cause of action is commenced when the summons and complaint are filed with the clerk of circuit court. See Granado v. Sentry Ins., 228 Wis. 2d 794, 798-99, 599 N.W.2d 62 (Ct. App. 1999) ("§§ 893.02, 801.02, and 801.06(1), Stats., plainly indicate that an action is commenced when the summons and complaint are filed with the clerk.").

¶ 19. Notwithstanding Granado and the statutes cited therein, Phyllis contends that filing a request for mediation under WlS. Stat. § 655.44 effectively commenced her medical malpractice action. She claims that this court so held in Halverson, 156 Wis. 2d at 208. Halverson, however, does not support Phyllis's position. In Halverson, we noted that the last date that any defendant treated Halverson was September 18, 1981, more than five years before December 11, 1987, the date Halverson filed his mediation request. Id. We do not read Halverson as holding that the date of filing a mediation request is the date an action is filed. That question was never addressed. Our reference to filing the mediation request simply noted that by any measure, Halverson's action was untimely.

¶ 20. Moreover, Wis. Stat. § 655.44 does not support Phyllis's argument that service of a request for mediation constitutes commencing a cause of action. First, it is apparent from subsec. (5)'s plain language that commencing an action and filing a request for mediation are two separate activities: "no court action may be commenced unless a request for mediation has been filed under this section . . . Second, were filing the mediation request tantamount to filing a suit, there would be no need for subsec. (4)'s tolling of the statute of limitations because the mediation request would initiate the litigation. Phyllis's interpretation would render subsecs. (4) and (5) superfluous, a result to be avoided. See Lake City Corp., 207 Wis. 2d at 162.

¶ 21. We conclude that Phyllis's action was not timely filed. Medical malpractice actions are subject to the Wis. Stat. § 893.55(l)(b) five-year statute of repose. A mediation request under WlS. STAT. § 655.44 does not toll the statute of repose and does not constitute commencing an action. Because Phyllis's action was filed more than five years after the alleged negligent act or omission, it was not timely under § 893.55. Accordingly, the order is reversed.

By the Court. — Order reversed.

       The defendants Midelfort Clinic, Ltd., Mayo Health System, Physicians Insurance Company of Wisconsin, Inc., and Wisconsin Patients Compensation Fund also join Luther Hospital in this appeal. We refer to all the appellants as Luther Hospital.

       All references to the Wisconsin Statutes are to the 1997-98 version.

       A statute of repose differs from a statute of limitation. Black's Law Dictionary 1423 (7th ed. 1999) explains the distinction as follows:
      A statute of repose .. . limits the time within which an action may be brought and is not related to the accrual of any cause of action; the injury need not have occurred, much less have been discovered. Unlike an ordinary statute of limitations which begins running upon accrual of the claim, the period contained in a statute of repose begins when a specific event occurs, regardless of whether a • cause of action has accrued or whether any injury has resulted.
      "In Wisconsin law, statutes of limitation are not treated as statutes of repose . . . ." Pulchinski v. Strnctd, 88 Wis. 2d 423, 428, 276 N.W.2d 781 (1979).

       Phyllis also makes the unadorned assertion that Luther Hospital failed to prove the date that triggers the running of the statute of repose. We disagree. The statute of repose runs for five years from act or omission. The latest that the act or omission could have occurred here was the date of Edward's death, April 1,1994. There is no merit to Phyllis's unexplained suggestion that Luther Hospital may have negligently failed to obtain informed consent or provide Edward appropriate care after his death.

       The legislature established a mediation system applicable to all medical malpractice actions. See Wis. Stat. §§ 655.43, 655.44, 655.445, 655.007. All parties must submit to mediation. See WlS. Stat. § 655.43. The statutory scheme, however, gives claimants a choice of mediating either before or after commencing a court action. See WlS. Stat. § 655.44 (mediate prior to filing), and WlS. Stat. § 655.445 (after filing suit).

       Although the repose provision is contained in a chapter entitled "Limitations," and Wis. Stat. § 893.55 is entitled "Medical malpractice; limitation of actions," those titles do not convert the repose provision into a statute of limitation. In the face of plain and unambiguous language, we must disregard a statute's title. See State v. Black, 188 Wis. 2d 639, 645, 526 N.W.2d 132 (1994). "Consideration of a statutory title may be used only to resolve doubt as to the meaning of the statute." Id. The legislature's words in § 893.55(l)(b) create a five-year statute of repose for medical malpractice actions. See Halverson v. Tydrich, 156 Wis. 2d 202, 208, 456 N.W.2d 852 (Ct. App. 1990).

       Wisconsin Stat. § 655.445 provides in part:
      (1) Commencing action, Request and fee. [A]ny person... having a claim or a derivative claim under this chapter for bodily injury or death because of a tort or breach of contract based on professional services rendered or that should have been rendered by a health care provider shall, within 15 days after the date of filing an action in court, file a request for mediation. The request shall be prepared and delivered in person or sent by registered mail to the director of state courts, in the form and manner required under s. 655.44 (2) and (3), together with a notice that a court action has been commenced and the fee under s. 655.54 shall be paid.
      (2) SCHEDULING. All time periods under s. 802.10 (3) are tolled on the date of filing the court action. The time periods remain tolled until the expiration of the mediation period under s. 655.465 (7).