Burkes v. Klauser, Nos. 92-2308

CourtUnited States State Supreme Court of Wisconsin
Writing for the CourtSHIRLEY S. ABRAHAMSON; BABLITCH; WILCOX
Citation185 Wis.2d 308,517 N.W.2d 503
PartiesMarshall BURKES, Plaintiff-Respondent-Petitioner, v. James R. KLAUSER, Eugene G. Martin, Maureen J. Busby, Richard H. Lillie and Nicholas Hurtgen, Defendants-Petitioners-Respondents-Petitioners, Edward E. Hales, Defendant-Co-Petitioner-Respondent-Petitioner, d M. William Gerrard, Defendant-Third Party Plaintiff, Acceleration National Insurance Company and Rural Mutual Insurance Company, Third Party Defendants. Marshall BURKES, Plaintiff-Respondent, v. James R. KLAUSER, Eugene G. Martin, Edward E. Hales, Maureen J. Busby, Richard H. Lillie and Nicholas Hurtgen, Defendants-Appellants-Petitioners, M. William Gerrard, Defendant-Third Party Plaintiff-Respondent, Acceleration National Insurance Company and Rural Mutual Insurance Company, Third Party Defendants-Respondents.
Docket Number92-2578,Nos. 92-2308
Decision Date24 June 1994

Page 503

517 N.W.2d 503
185 Wis.2d 308
Marshall BURKES, Plaintiff-Respondent-Petitioner,
v.
James R. KLAUSER, Eugene G. Martin, Maureen J. Busby,
Richard H. Lillie and Nicholas Hurtgen,
Defendants-Petitioners-Respondents-Petitioners,
Edward E. Hales,
Defendant-Co-Petitioner-Respondent-Petitioner,
d
M. William Gerrard, Defendant-Third Party Plaintiff,
Acceleration National Insurance Company and Rural Mutual
Insurance Company, Third Party Defendants.
Marshall BURKES, Plaintiff-Respondent,
v.
James R. KLAUSER, Eugene G. Martin, Edward E. Hales,
Maureen J. Busby, Richard H. Lillie and
Nicholas Hurtgen, Defendants-Appellants-Petitioners,
M. William Gerrard, Defendant-Third Party Plaintiff-Respondent,
Acceleration National Insurance Company and Rural Mutual
Insurance Company, Third Party Defendants-Respondents.
Nos. 92-2308, 92-2578.
Supreme Court of Wisconsin.
Argued March 2, 1994.
Decided June 24, 1994.

Page 506

[185 Wis.2d 316] For the defendants-appellants-petitioners in 92-2578 and for the defendants-petitioners-respondents in 92-2308 there were briefs by Bruce A. Olsen, Asst. Atty. Gen., Robert A. Selk, Acting Atty. Gen., Waltraud A. Arts and Quarles & Brady, Madison, Terry E. Johnson and Peterson, Johnson & Murray, Milwaukee, and for the defendant-appellant-petitioner in 92-2578 and for the defendant-

Page 507

co-petitioner-respondent in 92-2308 there were briefs by T. Christopher Kelly, Madison and oral argument by Bruce A. Olsen.

[185 Wis.2d 317] For the plaintiff-respondent in 92-2578 and the plaintiff-respondent-petitioner in 92-2308 there was a brief by Steven J. Schooler and Lawton & Cates, S.C., and Robert J. Gingras and Gingras Law Offices, Madison and oral argument by Steven J. Schooler.

SHIRLEY S. ABRAHAMSON, Justice.

This is a review of an unpublished decision of the court of appeals, filed March 10, 1993. The court of appeals modified an order of the circuit court for Dane County, P. Charles Jones, circuit judge, and denied the defendants' motions for summary judgment and for dismissal of the claims against them.

Plaintiff Marshall Burkes, a former executive director of the State of Wisconsin Investment Board, commenced this 42 U.S.C. sec. 1983 1 action against defendants James R. Klauser, Eugene G. Martin, Edward E. Hales, Maureen J. Busby, Richard H. Lillie, and P. Nicholas Hurtgen, 2 members of the board of [185 Wis.2d 318] trustees of the Investment Board, in their individual and official capacities. The plaintiff claimed that the defendants discharged him because he held meetings with the State Auditor and Attorney General, and that this discharge was in violation of his First Amendment right to free speech. The circuit court denied the defendants' motion for summary judgment, holding that the defendants failed to make a prima facie showing of qualified immunity from suit.

The court of appeals concluded, as did the circuit court, that the question of qualified immunity is a threshold issue which should be resolved before trial. The court of appeals, however, remanded the cause to the circuit court "to hold an evidentiary hearing ... to resolve genuine issues of fact as to what the [defendants] knew of Burkes's 'speech' to the state auditor and the attorney general when they discharged him" and to decide the qualified immunity issue as to each defendant. The court of appeals also concluded that the official capacity claim could not be dismissed without reaching the merits of the qualified immunity defense. We granted the defendants' petition for review.

Two issues are raised on review. The first is whether the action should be dismissed because the defendants are entitled to qualified immunity. In this case, the defendants would not be entitled to qualified immunity from suit if in June 1989 the defendants knew or should have known that discharging of the plaintiff from his position as executive director of the Investment Board following his conversations with the State Auditor and the Attorney General would deprive him of clearly established constitutional rights. We [185 Wis.2d 319] conclude that, on the basis of the facts presented up to this point in the proceedings, the defendants are not entitled to qualified immunity. Accordingly we affirm that part of the court of appeals' decision denying the defendants' motion for summary judgment on the grounds of qualified immunity. Unlike the court of appeals, however, we do not remand the cause to the circuit court for factfinding with respect to the qualified immunity defense. We remand the matter to the circuit court for further proceedings relating to a trial on the merits.

Page 508

The second issue is whether the plaintiff may proceed with his claims against the defendants in their official capacities. We hold that he may not; he has failed to show that the defendants were acting pursuant to policy and custom in terminating his employment. Accordingly we reverse that part of the court of appeals' decision denying the defendants' motion for summary judgment on the claim against the defendants in their official capacities. On remand, the circuit court should dismiss these claims.

I.

This case has not been tried. It comes to us on a record of pleadings, depositions and affidavits documenting some of the events that occurred during the plaintiff's employment with the Investment Board. The record is replete with disputed assertions and myriad complex facts. We summarize here only those facts essential to an understanding of the issues; we will furnish additional facts in our discussion of the legal arguments.

The State of Wisconsin Investment Board manages state funds, including over $20 billion in public monies, mostly pension and retirement funds for public [185 Wis.2d 320] employees. The Investment Board is governed by eight trustees who oversee the investment of assets and establish policy as to personnel and investments. Sections 15.76(1), 25.15(1), 25.156(1), Stats. 1991-92. Marshall Burkes, the plaintiff, was hired as executive director of the Investment Board on August 20, 1987. The trustees of the Investment Board terminated his employment on June 23, 1989.

As executive director of the Investment Board, the plaintiff was responsible for the management and administration of the investments and for performance of executive and administrative functions according to the policies, principles and directives adopted by the trustees. Sections 25.156(2), 25.16(2), Stats. 1991-92.

During his tenure as executive director the plaintiff was never formally disciplined, reprimanded or warned in writing of any weaknesses or defects in his job performance. In 1988, at the end of his first year as executive director of the Investment Board, he received a $21,000 increase in his $90,000 salary, plus a $15,000 bonus for his performance in 1987-88. In October 1988, the plaintiff's performance was favorably reviewed in writing and characterized as "outstanding." The chairperson of the Investment Board wrote that the plaintiff had "shown outstanding ability and willingness to tackle tough issues, such as personnel deficiencies...."

The parties dispute whether the plaintiff was ever warned that his job was in jeopardy. Although the plaintiff asserts that he was not, the defendants claim that in late 1988 and early 1989 the plaintiff was informally warned that his job was at risk. The defendants also claim that various trustees spoke privately with the plaintiff, urging him to change the pattern of his behavior. The defendants further assert that, without [185 Wis.2d 321] the plaintiff's knowledge, several members of the staff of the Investment Board had complained to some of the trustees about the plaintiff and that, again without the plaintiff's knowledge, the trustees were compiling information critical of the plaintiff's job performance.

On several occasions in late 1988 and early 1989, the plaintiff proposed a series of agricultural loans to the Investment Board. The undisputed evidence is that the trustees received this "Agrivest" proposal with reservations and a lack of enthusiasm. The defendants assert that the poor professional judgment shown by this proposal caused the trustees' confidence in the plaintiff to erode.

In spring of 1989, the plaintiff expressed concern to the Investment Board about a significant loan to The Company Store 3 and a proposed investment in a real estate development in Santa Clarita, California. Both projects had been brought to the Investment

Page 509

Board by William Gerrard, a Wisconsin businessman with interests in real estate brokerage. The trustees initially rejected the Santa Clarita submission at the May 1989 meeting. After a request from William Gerrard, the trustees agreed to hear a second presentation about the development, and at the regular June 1989 meeting the trustees considered and rejected a reformulated version of the proposal.

[185 Wis.2d 322] The plaintiff claims that during this time he voiced concerns to some trustees about Gerrard's apparent influence with trustees. According to the plaintiff's calculations, Gerrard or businesses in which Gerrard held substantial interests would receive finder's fees in excess of $300,000 from loan recipients in return for his bringing their investment projects to the Investment Board. The defendants dispute the plaintiff's calculations.

In June 1989, the plaintiff proposed that the trustees adopt a policy requiring public disclosure of all finder's fees paid by recipients of board loans in the real estate division. This proposal was greeted with disfavor by the trustees; the motion for disclosure of fees died for lack of a second.

On June 19, 1989, the plaintiff, accompanied by acting legal counsel for the Investment Board, met with State Auditor Dale Cattanach and his deputy, and then with Attorney General Donald Hanaway and Deputy Attorney General Mark Musolf. The State Auditor directs the operations of the Legislative Audit Bureau...

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35 practice notes
  • Arneson v. Jezwinski, UW-M
    • United States
    • United States State Supreme Court of Wisconsin
    • 5 de maio de 1999
    ...have violated his clearly established constitutional right. See Penterman, 211 Wis.2d at 469, 565 N.W.2d 521 (citing Burkes v. Klauser, 185 Wis.2d 308, 327, 517 N.W.2d 503 ¶46 As a first step, we look to see whether plaintiff's complaint, even when accepted as true, states a cognizable viol......
  • State Farm Mut. Auto. Ins. Co. v. Langridge, No. 02-3353-FT.
    • United States
    • Wisconsin Supreme Court
    • 13 de julho de 2004
    ...WI 29, ¶ 15, 251 Wis. 2d 135, 641 N.W.2d 423)); Smith v. Katz, 226 Wis. 2d 798, 805, 595 N.W.2d 345 (1999) (citing Burkes v. Klauser, 185 Wis. 2d 308, 327, 517 N.W.2d 503 (1994)). We rely upon the standard that summary judgment is granted when there is no genuine 275 Wis.2d 46 issue of mate......
  • Jackson v. Benson, No. 97-0270
    • United States
    • United States State Supreme Court of Wisconsin
    • 10 de junho de 1998
    ...grant of summary judgment to the Plaintiffs-Respondents. We independently review a grant of summary judgment, see Burkes v. Klauser, 185 Wis.2d 308, 327, 517 N.W.2d 503 (1994), applying the same methodology as that used by the circuit court. See, e.g., Kafka v. Pope, 194 Wis.2d 234, 240, 53......
  • Smith v. Katz, No. 96-1998
    • United States
    • United States State Supreme Court of Wisconsin
    • 22 de junho de 1999
    ...of the circuit court granting West Bend's motion for summary judgment. We review summary judgment rulings de novo, Burkes v. Klauser, 185 Wis.2d 308, 327, 517 N.W.2d 503 (1994), applying the same methodology set out in Wis. Stat. § 802.08(2) as applied by the circuit court. Green Spring Far......
  • Request a trial to view additional results
35 cases
  • Arneson v. Jezwinski, UW-M
    • United States
    • United States State Supreme Court of Wisconsin
    • 5 de maio de 1999
    ...have violated his clearly established constitutional right. See Penterman, 211 Wis.2d at 469, 565 N.W.2d 521 (citing Burkes v. Klauser, 185 Wis.2d 308, 327, 517 N.W.2d 503 ¶46 As a first step, we look to see whether plaintiff's complaint, even when accepted as true, states a cognizable viol......
  • State Farm Mut. Auto. Ins. Co. v. Langridge, No. 02-3353-FT.
    • United States
    • Wisconsin Supreme Court
    • 13 de julho de 2004
    ...WI 29, ¶ 15, 251 Wis. 2d 135, 641 N.W.2d 423)); Smith v. Katz, 226 Wis. 2d 798, 805, 595 N.W.2d 345 (1999) (citing Burkes v. Klauser, 185 Wis. 2d 308, 327, 517 N.W.2d 503 (1994)). We rely upon the standard that summary judgment is granted when there is no genuine 275 Wis.2d 46 issue of mate......
  • Jackson v. Benson, No. 97-0270
    • United States
    • United States State Supreme Court of Wisconsin
    • 10 de junho de 1998
    ...grant of summary judgment to the Plaintiffs-Respondents. We independently review a grant of summary judgment, see Burkes v. Klauser, 185 Wis.2d 308, 327, 517 N.W.2d 503 (1994), applying the same methodology as that used by the circuit court. See, e.g., Kafka v. Pope, 194 Wis.2d 234, 240, 53......
  • Smith v. Katz, No. 96-1998
    • United States
    • United States State Supreme Court of Wisconsin
    • 22 de junho de 1999
    ...of the circuit court granting West Bend's motion for summary judgment. We review summary judgment rulings de novo, Burkes v. Klauser, 185 Wis.2d 308, 327, 517 N.W.2d 503 (1994), applying the same methodology set out in Wis. Stat. § 802.08(2) as applied by the circuit court. Green Spring Far......
  • Request a trial to view additional results

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