Boldt v. State

• Decision Date: 29 April 1981
• Docket Number: No. 79-1508,79-1508
• Citation: 305 N.W.2d 133,101 Wis.2d 566
• Parties: Oliver L. BOLDT, Plaintiff-Respondent and Cross-Appellant-Petitioner, v. STATE of Wisconsin, Defendant-Appellant and Cross-Respondent-Cross-Petitioner.
• Court: Wisconsin Supreme Court

Page 133

305 N.W.2d 133

101 Wis.2d 566

Oliver L. BOLDT, Plaintiff-Respondent and Cross-Appellant-Petitioner, v. STATE of Wisconsin, Defendant-Appellant and Cross-Respondent-Cross-Petitioner.

No. 79-1508.

Supreme Court of Wisconsin.

Argued March 30, 1981.

Decided April 29, 1981.

[101 Wis.2d 568] Richard J. Lipson, Madison, for petitioner.

Charles A. Bleck, Asst. Atty. Gen., argued, with whom on briefs was Bronson C. La Follette, Atty. Gen., for appellant.

Raymond M. Dall'Osto, Milwaukee, for amicus curiae Wisconsin Affiliate of the American Civil Liberties Union.

STEINMETZ, Justice.

This case comes before the court on a petition to review a decision of the court of appeals which modified the judgment of the trial court and, as modified, affirmed that judgment. We modify the decision of the court of appeals and as modified, affirm.

The plaintiff-petitioner, Oliver L. Boldt, was committed to a state mental health facility in 1962 on the grounds that he was mentally incompetent to stand trial on a criminal charge. See, sec. 971.14(5), Stats., formerly sec. 957.13(2). The criminal charges were dropped and Boldt was released on November 4, 1974. The basic dispute in this case is whether the state or the petitioner is entitled to the petitioner's Social Security benefits which were payable during the period of commitment.

Under the rules of the Social Security Administration, Social Security benefits owed to a person in the plaintiff's situation are paid to a "representative payee." The representative payee must apply the benefits received to the physical and medical maintenance of the beneficiary. If such needs are fully met, the payee must save the benefits for the beneficiary's future needs. ¹ In this case the petitioner's brother was the representative payee until January 21, 1971. After that date the State of Wisconsin was designated payee.

The state claimed entitlement to all the Social Security benefits paid to representative payees under sec. 46.10, Stats., which authorizes the state to seek recovery for the expense of certain commitments from the committed person or his estate. Under this statute the petitioner's brother paid $5,386 to the state which he had received as representative payee and the state received an additional $8,276 from Social Security during the time in which the state was payee.

The state thus received a total of $13,662 under the authority of sec. 46.10. The petitioner's maintenance during his commitment cost the state over $105,000.

Shortly before his release on November 4, 1974, the petitioner commenced legal proceedings for the recovery of the $13,662 which had been received by the state on his behalf. On May 16, 1974, petitioner filed a claim with the state claims board pursuant to secs. 16.007 and 16.53, Stats. ² The board rejected this claim in a decision dated November 8, 1976. On February 23, 1977, a bill was introduced into the legislature which would authorize payment of the plaintiff's claim. The legislature rejected the claim on March 31, 1978. An action was commenced in the circuit court on August 7, 1978, against the state.

In a decision dated August 10, 1979, the court granted Boldt's motion for summary judgment but limited that judgment to the sums received by the state after August 7, 1971, on the grounds that claims to funds received before that date were barred by the statute of limitations. The court also awarded interest on this amount at the statutory rate of interest and awarded attorney's fees of $1,500 pursuant to 42 U.S.C. secs. 1983 (1974) and 1988 (1980).

The court of appeals modified this judgment and, as modified, affirmed. ³ Six issues are raised on this review:

(1) Was the petitioner's cause of action a claim to which the state has given its consent to be sued under sec. 775.01, Stats. (formerly sec. 285.01)?

(2) Can the circuit court waive the bond requirement of sec. 775.01, Stats., pursuant to sec. 814.29(1)?

(3) Does the state have a valid claim to the money it received for the support of the plaintiff?

(4) Is any part of the petitioner's claim barred by the statute of limitations?

(5) Is the petitioner entitled to interest on his claim and, if so, at what rate?

(6) Is the petitioner entitled to receive actual attorney's fees incurred in bringing this action?

CONSENT TO SUIT

As this court stated in Lister v. Board of Regents, 72 Wis.2d 282, 291, 240 N.W.2d 610 (1976):

"The concept of sovereign immunity in this state derives from Art. IV, Sec. 27 of the Wisconsin Constitution, which provides:

" 'The legislature shall direct by law in what manner and in what courts suits may be brought against the state.'

"From this provision the rule developed that the state cannot be sued without its consent. This immunity is procedural in nature and, if properly raised, deprives the court of personal jurisdiction over the state." (Footnotes omitted.)

The state gives consent to some of the suits brought against it in sec. 775.01, Stats. (formerly sec. 285.01, Stats.) which reads:

"775.01 Actions against state; bond. Upon the refusal of the legislature to allow a claim against the state the claimant may commence an action against the state by service as provided in s. 801.11(3) and by filing with the clerk of court a bond, not exceeding $1,000, with 2 or more sureties, to be approved by the attorney general, to the effect that the claimant will indemnify the state against all costs that may accrue in such action and pay to the clerk of court all costs, in case the claimant fails to obtain judgment against the state."

This statute has been interpreted as giving the state's consent to suit in some causes of action but not in others. As this court said in Cords v. State, 62 Wis.2d 42, 50, 214 N.W.2d 405 (1974):

"As for statutory consent by the state to suit in tort, this court has found none. Sec. 285.01, Stats., has been interpreted as limited to claims which if valid would render the state a debtor to the claimant. 14 (n. 14 Chicago, Milwaukee & St. P. Ry. v. State, (53 Wis. 509, 10 N.W. 560) supra, footnote 13; Houston v. State (1898), 98 Wis. 481, 74 N.W. 111; Holzworth v. State (1941), 238 Wis. 63, 298 N.W. 163; Townsend v. Wisconsin Desert Horse Asso., (42 Wis.2d 414, 167 N.W.2d 425) supra, footnote 10; Chart v. Gutmann (1969), 44 Wis.2d 421, 171 N.W.2d 331.) Sec. 270.58 has also been interpreted not to be a consent by the state to be sued in tort. 15 (n. 15 Forseth v. Sweet, (38 Wis.2d 676, 158 N.W.2d 370) supra, footnote 9, at page 682 (158 N.W.2d 370).)

In Trempealeau County v. State, 260 Wis. 602, 51 N.W.2d 499 (1952) the court ruled that a suit for recovery of funds wrongfully paid to the state was an action at law for the recovery of money had and received which rendered the state a debtor and was therefore within the purview of sec. 285.01, Stats.

In Hicks v. Milwaukee County, 71 Wis.2d 401, 238 N.W.2d 509 (1976) the court came to the same conclusion. In Hicks the court described the nature of a claim for money had and received saying:

"In an action for money had and received on a theory of quasi-contract, recovery is allowed where the defendant has received a benefit from the plaintiff and the retention of such benefit by the defendant would be inequitable. The law implies a promise of repayment when no rule of public policy or good morals has been violated. The action is one at law, although governed by equitable principles. 9 (n. 9 Arjay Investment Co. v. Kohlmetz (1960), 9 Wis.2d 535, 101 N.W.2d 700.) ... The focus in unjust enrichment cases is on the benefit received from the plaintiff by the defendant which, in good conscience, should not be retained. That money has merely been retained in the county treasury, rather than expended, has nothing to do with the elements of the cause of action. In fact, there may be circumstances where the money has been expended in such a way that the county has not been unjustly enriched at the expense of the plaintiff." Hicks at 404-05, 238 N.W.2d 509.

It is our conclusion that the complaint in the present case is sufficient to state a cause of action which comes within the coverage of sec. 775.01, Stats. The complaint on its face states two theories of recovery: (1) The "constitutional tort" of the state depriving a person of property without due process of law and (2) an equitable remedy based on the theory that the

state held the funds at issue in a constructive trust. A complaint must simply contain "a short and plain statement of the claim, identifying the transaction, occurrence or event or series of transactions, occurrences, or events out of which the claim arises and showing that the pleader is entitled to relief." Sec. 802.02(1)(a). The trial court correctly concluded that the facts alleged in the complaint constitute a cause of action for money had and received which can be brought against the state under sec. 775.01. The court therefore has jurisdiction as long as the requirements of that section are met.

WAIVER OF BOND

Sec. 775.01, Stats., states that a claimant "may commence an action against the state by service as provided in sec. 801.11(3) and by filing with the clerk of court a bond, not exceeding $1,000 .... " In the present case the trial court judge, the Hon. Michael Torphy, initially ruled that the plaintiff was not required to post bond in spite of sec. 775.01. Subsequently, Judge William D. Byrne ruled that a bond of $100 must be posted before the entry of judgment. The state argues on this review that the posting of bond is jurisdictional and therefore the trial court had no authority to proceed until bond was posted.

This court has previously stated that posting a bond is jurisdictional in nature and is a condition precedent to commencing an action against the state. State ex rel. Martin v. Reis, 230 Wis. 683, 284 N.W. 580 (1939). This rule applies, however, only if a bond is required under the law. Sec. 814.29, Stats., allows a trial court to permit...