Benson v. City of Madison

• Decision Date: 22 June 2017
• Docket Number: No. 2015AP2366,2015AP2366
• Citation: 897 N.W.2d 16,2017 WI 65,376 Wis.2d 35
• Parties: Thomas F. BENSON, Mark Rechlicz, Mark Rechlicz Enterprises, Inc., Robert J. Muranyi, RJM Pro Golf Incorporation and William J. Scheer, Plaintiffs-Appellants-Petitioners, v. CITY OF MADISON, Defendant-Respondent.
• Court: Wisconsin Supreme Court

376 Wis.2d 35

897 N.W.2d 16

2017 WI 65

Thomas F. BENSON, Mark Rechlicz, Mark Rechlicz Enterprises, Inc., Robert J. Muranyi, RJM Pro Golf Incorporation and William J. Scheer, Plaintiffs-Appellants-Petitioners,

v.CITY OF MADISON, Defendant-Respondent.

No. 2015AP2366

Supreme Court of Wisconsin.

Oral Argument: April 19, 2017

Opinion Filed: June 22, 2017

For the plaintiff-appellant-petitioners, there were briefs by Kevin J. Palmersheim, Cathleen A. Dettmann and Haley Palmersheim, SC Middleton and oral argument by Kevin J. Palmersheim.

For the defendant-respondent, there was a brief by Catherine M. Rottier and Boardman & Clark, LLP, Madison, with whom on the brief was Michael P. May and Doran E. Viste, City of Madison Attorney's Office. There was an oral argument by Catherine M. Rottier and Paul Norman.

ANNETTE KINGSLAND ZIEGLER, J.

¶1 This is a review of an unpublished decision of the court of appeals, Benson v. City of Madison , No. 2015AP2366, unpublished slip op., 371 Wis.2d 760, 2016 WL 4468411 (Wis. Ct. App. Aug. 25, 2016), which affirmed the Dane County circuit court's¹ judgment dismissing a lawsuit filed by the petitioners against the City of Madison ("the City") pursuant to the Wisconsin Fair Dealership Law ("the WFDL"), a statute that governs, among other things, the termination or nonrenewal of specified types of business relationships. See generally Wis. Stat. ch. 135 ("Dealership Practices") (2013-14).²

¶2 The City owns four public golf courses: Odana, Yahara, Monona, and Glenway. For years, the City entered into "operating agreements" ("Agreements") with the petitioners, four "golf professionals" ("Golf Pros"), to oversee the clubhouse operations at these courses.³ That is, while the City maintained the physical golf courses, the Golf Pros performed varied tasks such as collecting greens fees, hiring and managing attendants, supervising golfing, operating the clubhouse and pro shop, selling concessions, and giving lessons.⁴

¶3 In 2012 the City informed the Golf Pros that it would not be renewing the Agreements. The Golf Pros subsequently filed a lawsuit against the City, both alleging that the City had failed to comply with the WFDL in ending the City's relationships with them and seeking damages. The circuit court below ultimately dismissed the lawsuit on summary judgment, concluding that the relationships between the Golf Pros and the City did not constitute "dealerships" protected by the WFDL. See Wis. Stat. § 135.02(3). The Golf Pros appealed, and the court of appeals affirmed. Benson , unpublished slip op., ¶2.

¶4 On this appeal, we are asked to resolve two principal questions: first, whether the WFDL applies to the City at all; and second, whether the relationships between the Golf Pros and the City are "dealerships" under the WFDL. Additionally, assuming we answer both questions in the affirmative, the City contends that the Golf Pros' lawsuit is time-barred and should be dismissed on grounds of governmental immunity.

¶5 We conclude that the WFDL applies to the City; that the relationships between the Golf Pros and the City are "dealerships" under the WFDL; that the Golf Pros' lawsuit is not time-barred; and that the City is not immune from the lawsuit. Consequently, we reverse the decision of the court of appeals and remand for further proceedings consistent with this opinion.

I. FACTUAL BACKGROUND

¶6 Although the City's relationships with the Golf Pros span back a number of years, the most recent version of the Agreements governed a period running from January 1, 2008, to December 31, 2012.⁵ Because the nature of the relationships between the City and the Golf Pros is central to this case, we first summarize the duties of the City and of the Golf Pros, as well as overall financial arrangements, as set forth in these Agreements.

¶7 Each Golf Pro entered into a separate Agreement with the City, with each of the four Golf Pros managing clubhouse operations at one of the City's four courses. The Agreements begin by noting, inter alia , that the City "is engaged in the operation and maintenance of [the golf course] and desires to engage a competent and qualified golf professional to operate, manage, and provide certain services at [the golf course]"; that "the Golf Pro desires to procure from the City the right to operate and provide the services"; and that "the public interest and welfare will be served ... by the granting of an agreement to a reputable party who will provide certain services to the public patronizing the golf course." The Agreements then grant to each Golf Pro "the exclusive privilege and obligation to operate" one of the four golf courses.

¶8 Pursuant to the Agreements, each Golf Pro was hired to perform the following tasks, among others (some of which overlap):

• "[s]upervise and operate the [golf course] in a clean, efficient, and creditable manner," "manag[e] the speed of play," "efficiently start [ ] play on the first tee so as to maximize play and revenue to the City," and "provide a ranger/ambassador when heavy play so requires";

• "[e]mploy attendants to sell and collect green fees, resident and non-resident annual passports and other established player promotional devices, renewals, and take and process reservations," and "collect for the City all green fees, locker fees, player promotional pass fees, and tournament fees";

• "operate concession rights at the pro shop, clubhouse, and golf course," "sell food and beverages" during specified periods, "[o]btain the necessary licenses to operate and maintain on the premises a concession operation for the sale of beverages, confections, and food," and "sell golf clothing and golf equipment";

• "[p]rovide a sufficient number of motorized golf carts to meet the needs of the public" and "rent and operate golf carts and equipment"; and

• "teach and give golf lessons for compensation" as well as "conduct" a specified number of "free clinics each season."

¶9 Significantly, the Golf Pros were "responsible for the purchase of all supplies and equipment used in the pro shop, golf range, motorized cart concessions, and food and beverage concessions." Each Golf Pro was entitled to "hire assistants to assist in the operation" of the golf course, "concessions and collecting money due the City under" the Agreement. But the Golf Pros were "responsible for the hiring and supervision of all employees necessary for the efficient operation of the clubhouse and the pro shop and further, the hiring, training, scheduling and supervision of course rangers and starters." The Golf Pros were also "responsible for the salaries, benefits, and premiums for Worker's Compensation and Social Security, all income tax deduction and any other tax or payroll deductions required by law" for these employees. The Golf Pros were required to maintain a number of different types of insurance.

¶10 The Agreements did not oblige the Golf Pros to maintain the physical courses; this was performed by the City through its own employees. The City also owned the land and buildings and paid relevant utilities.⁶

¶11 The City paid each Golf Pro a "base contract payment" specified in the Agreements. The Golf Pros also received:

All income from concessions, sale of merchandise at the pro shop, golf instruction, pull cart ... and golf club rental, except for a return each week to the City of Madison fifteen (15%) percent of the gross receipts of pull carts ... and golf club rental, and eleven (11%) percent of the restaurant concession.⁷

¶12 According to the Agreements, the Golf Pros did not receive any money from the "green fees, locker fees, player promotional pass fees, and tournament fees"; the Golf Pros simply collected these fees and "remit[ted]" them to the City. According to the parties, "the City set the prices for greens fees, passes and locker fees" and furnished "the equipment necessary to process payments of greens fees, locker fees and charges for season passes." On the other hand, the Golf Pros set food, beverage, and merchandise prices.

¶13 The Agreements required the Golf Pros to provide either $1,000 or $3,500 (depending on the Agreement) each year "to a fund to be matched by the City to execute a formal marketing plan for [the City's] golf program." The Agreements state that the Golf Pros "agree[ ] to participate in the creation of this marketing plan."

¶14 Finally, the Agreements provide that "[t]he relationship between the City and the Golf Pro shall be one of an independent contractor and not one of employer and employee," adding:

[I]n the operation and conduct of this Agreement, the City does not grant Golf Pro the right to sell or distribute any goods or services provided by the City, nor does the City grant Golf Pro the right to use a City trade name, trademark, service mark, logotype, advertising or other commercial symbol.

¶15 On August 1, 2012—a few months before the expiration of the Agreements—the Golf Pros met with the City's Parks Superintendent ("Superintendent") and other City employees. The Superintendent informed the Golf Pros that "the golf operation was not sustainable" and asked for "proposals for clubhouse operations for the next term of the" Agreements. Proposals were submitted, but on October 8, 2012, the City's mayor decided to "recommend internalizing clubhouse operations" to the City's Common Council. On October 12, 2012, the Superintendent informed the Golf Pros that the Agreements were not going to be renewed.

II. PROCEDURAL BACKGROUND

¶16 On October 25, 2012, the Golf Pros served the City with a notice of claim. See Wis. Stat. § 893.80 ("Claims against governmental bodies or officers, agents or employees; notice of injury; limitation of damages and suits."). On January 17, 2014, the Golf Pros filed a complaint in Dane County circuit court against the City alleging that the City had failed to comply with the WFDL in terminating the City's relationships with them; the Golf Pros sought damages. Specifically, the complaint alleged that the City "failed to provide...