Bostco LLC v. Milwaukee Metro. Sewerage Dist.

• Decision Date: 18 July 2013
• Docket Number: 2007AP1440.,Nos. 2007AP221,s. 2007AP221
• Citation: 2013 WI 78,835 N.W.2d 160,350 Wis.2d 554
• Parties: BOSTCO LLC and Parisian, Inc., Plaintiffs–Appellants–Cross–Respondents–Petitioners, v. MILWAUKEE METROPOLITAN SEWERAGE DISTRICT, Defendant–Respondent–Cross–Appellant–Petitioner.
• Court: Wisconsin Supreme Court

350 Wis.2d 554
835 N.W.2d 160
2013 WI 78

BOSTCO LLC and Parisian, Inc., Plaintiffs–Appellants–Cross–Respondents–Petitioners,
v.
MILWAUKEE METROPOLITAN SEWERAGE DISTRICT, Defendant–Respondent–Cross–Appellant–Petitioner.

Nos. 2007AP221, 2007AP1440.

Supreme Court of Wisconsin.

Argued Sept. 6, 2012.
Decided July 18, 2013.

[835 N.W.2d 165]

For the plaintiffs-appellants-cross-respondents-petitioners, there were briefs by Mark A. Cameli, Rebecca Frihart Kennedy, Lisa Nester Kass, Amy MacArdy, and Reinhart, Boerner Van Deuren, S.C., Milwaukee, and oral argument by Mark A. Cameli and Rebecca Frihart Kennedy.

For the defendant-respondent-cross-appellant-petitioner, there were briefs by G. Michael Halfenger, William J. Katt, Jr., Eric G. Pearson, and Foley & Lardner, LLP, Milwaukee, and Susan B. Anthony, James H. Petersen and Milwaukee Metropolitan Sewerage District, Milwaukee, and oral argument by G. Michael Halfenger.

An amicus curiae brief was filed by Claire Silverman, Madison, on behalf of the League of Wisconsin Municipalities.

PATIENCE DRAKE ROGGENSACK, J.

[350 Wis.2d 564]¶ 1 This is a review of a published opinion of the court of appeals ¹ that affirmed in part and reversed in part the decision of the circuit court for Milwaukee County.² The questions now before us arise from claims by Bostco LLC and Parisian, Inc. (hereinafter Bostco), alleging that Milwaukee Metropolitan Sewerage District's (MMSD) negligent operation and maintenance of a sewerage tunnel (the Deep Tunnel) beneath Bostco's property resulted in excessive groundwater seepage into the Deep Tunnel, thereby causing significant damage to Bostco's buildings. Bostco sought money damages, as well as equitable relief.

¶ 2 The parties raise five issues, and we affirm the court of appeals on all but one of the issues. First, MMSD claims in its cross-appeal that it is entitled to immunity for its construction and maintenance of the [350 Wis.2d 565]Deep Tunnel, under Wis. Stat. § 893.80(4).³ Second, if immunity is not accorded, Bostco claims that the court of appeals erred when it reversed the circuit court's award of equitable relief for Bostco,

[835 N.W.2d 166]

ordering MMSD to abate the excessive seepage of groundwater into the Deep Tunnel. Third, Bostco claims that the damage cap in § 893.80(3), which caps the damages recoverable in an action against governmental entities at $50,000, violates equal protection, both facially and as applied to Bostco's specific claims. Additionally, Bostco contends that the damage cap does not apply to continuing nuisances. Fourth, Bostco claims that MMSD's operation and maintenance of the Deep Tunnel constituted an unconstitutional taking of the groundwater beneath Bostco's property. Fifth, MMSD argues that Bostco's claim is barred by the notice of claim provision of § 893.80(1) (2005–06).

¶ 3 First, we conclude that MMSD is not entitled to immunity. Once MMSD had notice that the private nuisance it negligently maintained was causing significant harm, immunity under Wis. Stat. § 893.80(4) was not available for MMSD. The proper immunity analysis in this case rests on our holding in Milwaukee Metropolitan Sewerage District v. City of Milwaukee (City of Milwaukee), 2005 WI 8, 277 Wis.2d 635, ¶ 59, 691 N.W.2d 658, that “[w]hether immunity exists for nuisance founded on negligence depends upon the character of the negligent acts.” Where the negligent act was undertaken pursuant to one of those functions set forth in § 893.80(4)—that is, legislative, quasi-legislative, judicial[350 Wis.2d 566]or quasi-judicial functions—immunity may apply. See id.; see also§ 893.80(4).

¶ 4 Here, Bostco's nuisance claim is grounded in MMSD's negligent maintenance of its Deep Tunnel, which maintenance constituted a continuing private nuisance. See Physicians Plus Ins. Corp. v. Midwest Mut. Ins. Co., 2002 WI 80, ¶¶ 2–3, 254 Wis.2d 77, 646 N.W.2d 777 (explaining that when all the elements of nuisance are proved and the municipal entity has notice that the nuisance was causing significant harm, the entity has a duty to abate). Because MMSD's maintenance of the continuing private nuisance is not a legislative, quasi-legislative, judicial or quasi-judicial function, MMSD is not entitled to immunity. See Hillcrest Golf & Country Club v. City of Altoona, 135 Wis.2d 431, 439–40, 400 N.W.2d 493 (Ct.App.1986) (explaining that the “creation and maintenance of private nuisances are simply not recognized as legislative acts subject to protection under sec. 893.80(4)”); see also Welch v. City of Appleton, 2003 WI App 133, ¶ 8, 265 Wis.2d 688, 666 N.W.2d 511 (explaining that “no statutory or common law immunity doctrine empowers a public body to maintain a private nuisance”); Menick v. City of Menasha, 200 Wis.2d 737, 745, 547 N.W.2d 778 (Ct.App.1996) (concluding “there is no discretion as to maintaining the [sewer] system so as not to cause injury”); Wis. Stat. §§ 844.01(1) and 844.20(2) (providing statutory procedure for seeking abatement of private nuisances).⁴ The court of appeals' determination that MMSD is not entitled to immunity is therefore affirmed.

[350 Wis.2d 567]¶ 5 Because MMSD does not have immunity for its negligent maintenance of the Deep Tunnel, we also conclude as follows: On the second issue, we conclude that Wis. Stat. § 893.80(3)-(5) do not abrogate MMSD's duty to abate the private nuisance that MMSD caused by its negligent maintenance of the Deep Tunnel, after MMSD had notice that the nuisance was a cause of significant harm. Therefore, we reverse the court of appeals' denial of the equitable relief of abatement.

[835 N.W.2d 167]

¶ 6 Third, we conclude that the monetary damage cap in Wis. Stat. § 893.80(3) does not violate equal protection, either facially or as applied to Bostco. Moreover, the nature of Bostco's claim as a continuing nuisance does not render § 893.80(3)'s monetary damage cap inapplicable. Accordingly, we affirm the court of appeals' conclusion that the circuit court properly reduced Bostco's monetary damages to $100,000.

¶ 7 Fourth, with regard to Bostco's inverse condemnation claim, we conclude that Bostco forfeited the argument that it makes before this court, and we therefore affirm the court of appeals on this issue.

¶ 8 Fifth, we conclude that Bostco substantially complied with the notice of claim provisions under Wis. Stat. § 893.80(1) (2005–06), and that MMSD therefore had sufficient notice under those provisions. Accordingly, we affirm the court of appeals on that issue as well.

¶ 9 Because neither Wis. Stat. § 893.80(4) nor (3) abrogates MMSD's duty to abate this private nuisance, we reverse the court of appeals' decision in part, affirm that decision in part, and remand to the circuit court for further proceedings consistent with this opinion. In particular, we reverse the court of appeals' reversal of the circuit court's order for abatement, in part. That is, while we affirm the court of appeals on all other issues, [350 Wis.2d 568]we reverse that court's decision that Bostco was not entitled to equitable relief in the form of an order for abatement. Therefore, we affirm the circuit court decision that abatement is required, and we remand this matter to the circuit court. Upon remand, a hearing may be held to establish whether an alternate method will abate the continuing private nuisance MMSD maintains or whether lining the Deep Tunnel with concrete is required for abatement.

I. BACKGROUND

¶ 10 This case arises out of MMSD's maintenance of the Milwaukee Deep Tunnel, which was constructed in the early 1990s to collect and store both storm water runoff and sewage until the Deep Tunnel's collections could be transported to Milwaukee's sewage treatment plant.

¶ 11 Boston Store is located in downtown Milwaukee, one block west of the Deep Tunnel's North Shore segment. First erected in the 19th century, Boston Store consists of five interconnected buildings that rest upon wood pile foundations that were driven into the ground to support the buildings' columns. At the time of construction, the pilings were below the water table and were fully saturated, thereby preventing their deterioration.

¶ 12 Over time, however, the water enclosing the pilings was drawn down, and the Boston Store buildings began to suffer substantial structural damage. On November 16, 2004, Bostco filed the amended complaint in this case, alleging that MMSD's operation and maintenance of the Deep Tunnel caused the drawdown of the water that led to the deterioration of the wood pilings underlying Bostco's buildings. Bostco's claims [350 Wis.2d 569]for relief were based on theories of common law negligence, continuing private nuisance, inverse condemnation and violations of Wis. Stat. § 101.111, setting forth safety standards for excavation projects. Bostco sought equitable relief to abate the nuisance, as well as damages and expenses.

¶ 13 The amended complaint gave rise to numerous motions that resulted in dismissals of some of Bostco's claims. Eventually two common law claims were tried to a jury: negligence and private nuisance.

¶ 14 The jury found that MMSD was negligent in its maintenance of the Deep

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Tunnel near Bostco's building,⁵ and that MMSD's negligence was a cause of Bostco's injury.⁶ The jury awarded Bostco $3,000,000 for past damages and $6,000,000 for future damages.⁷ The jury also found that Bostco was at fault for 30 percent of the damages, thereby reducing the $9,000,000 award to $6.3 million.⁸

¶ 15 In regard to Bostco's nuisance claim, the jury found that the negligent manner in which MMSD maintained the Deep Tunnel interfered with Bostco's use and enjoyment of its property.⁹ The jury found that MMSD could abate the interference by reasonable [350 Wis.2d 570]means and at a reasonable cost. ¹⁰ However, the jury also found that the interference did not result in “significant harm” to Bostco.¹¹

¶ 16 On post-verdict motions,¹² the circuit court denied Bostco's motion asking the court to find that over $2 million in...