Burlington Area School Dist. v. Wausau Ins. Companies

• Decision Date: 22 April 1992
• Docket Number: 91-1283,Nos. 90-2541,s. 90-2541
• Citation: 486 N.W.2d 36,168 Wis.2d 774
• Parties: NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES. BURLINGTON AREA SCHOOL DISTRICT, Plaintiff-Respondent, v. WAUSAU INSURANCE COMPANIES, Defendant-Appellant.
• Court: Wisconsin Court of Appeals

Page 36

486 N.W.2d 36

168 Wis.2d 774

NOTICE: UNPUBLISHED OPINION. RULE 809.23(3), RULES OF CIVIL PROCEDURE, PROVIDE THAT UNPUBLISHED OPINIONS ARE OF NO PRECEDENTIAL VALUE AND MAY NOT BE CITED EXCEPT IN LIMITED INSTANCES.

BURLINGTON AREA SCHOOL DISTRICT, Plaintiff-Respondent, v. WAUSAU INSURANCE COMPANIES, Defendant-Appellant.

Nos. 90-2541, 91-1283.

Court of Appeals of Wisconsin.

April 22, 1992.

Appeal from judgments of the circuit court for Racine county, Emmanuel Vuvunas, Judge.

Circuit Court, Racine County

MODIFIED AND, AS MODIFIED, AFFIRMED.

Before NEAL NETTESHEIM, P.J., and BROWN and SNYDER, JJ.

PER CURIAM.

Wausau Insurance Companies has appealed from a judgment awarding the respondent, Burlington Area School District, damages in the amount of $17,652 plus $25,000 in attorney's fees. Wausau also has appealed from a subsequent judgment awarding costs in the amount of $1,816. The judgments were based upon a bond issued by Wausau in the amount of $75,000 on September 30, 1985, and a rider to the bond issued by Wausau on October 8, 1985, increasing the amount of the bond to $100,000. We affirm the initial judgment awarding damages and attorney's fees. We modify the second judgment to delete $630.10 included as costs and, as modified, affirm that judgment.

This proceeding arises from an action commenced by Richard Roehl against the school district on August 28, 1985 seeking a writ of mandamus requiring the school district to award a contract to the James Luterbach Construction Company for the construction of an addition to the Burlington high school. The school district had awarded the general contract to Corporate Construction, Ltd. on August 14, 1985. On the day he commenced his action, Roehl obtained a circuit court order enjoining the school district from causing any construction work to proceed unless the contract was awarded to Luterbach.

The school district immediately filed a motion to quash the alternative writ of mandamus issued by the trial court, and on September 16, 1985, the trial court granted that motion. On September 25, 1985, the trial court granted a stay of its judgment quashing the writ and lifting the injunction so that Roehl could pursue an appeal. That stay was conditioned upon the posting of a $75,000 bond by Roehl. Roehl commenced his appeal and, on September 30, 1985, filed a $75,000 bond issued by Wausau. On October 8, 1985, Wausau issued a rider increasing the amount of the bond to $100,000 pursuant to an order of this court conditioning a continued stay upon an increase in the bond. On October 16, 1985, the trial court's judgment quashing the alternative writ was summarily affirmed by this court and the stay was lifted.

On July 10, 1986, the school district filed a motion in the trial court to enforce Wausau's liability on the bond and to recover damages from it. After hearing evidence on the issue of damages in July 1990, the trial court found that its order enjoining construction activities and the orders staying construction pending appeal resulted in seventeen days of delay between August 30, 1985 and September 16, 1985, and twenty-one days of delay between September 25, 1985 and October 16, 1985. The trial court found Wausau liable for damages in the amount of $17,652 for the delay between September 25 and October 16, 1985. The judgments which form the basis for Wausau's appeals subsequently were entered. Further facts will be set forth as necessary below.

Wausau's first argument is that it was deprived of due process in the trial court proceedings. Specifically, it contends that its ability to conduct discovery and obtain notice of the claims against it was impaired by the school district's failure to furnish it with a bill of particulars until June 22, 1990, three weeks before trial, despite being ordered by the trial court to provide an itemized list of damages on July 20, 1987 and being ordered to provide a bill of particulars or other pleading setting forth its claim thereafter. ¹ It also contends that its ability to conduct discovery was impaired when the school district obtained an order restraining a deposition of a supplier of Corporate Construction after misrepresenting that the deadline for discovery had passed.

We find no deprivation of due process or other basis for relief based on these allegations. Initially, we note that the school district properly commenced this proceeding for damages on the bond by motion in the trial court rather than by the filing of a formal complaint. Section 808.07(4), Stats., provides that a surety on an undertaking is subject to the jurisdiction of the trial court and irrevocably appoints the clerk of that court as the surety's agent for service of any papers affecting his or her liability on the undertaking. Section 808.07(4) further provides that a person may seek to enforce the surety's liability by filing a motion in the action or proceeding in the trial court in which the undertaking was filed.

Based on this provision, the school district properly sought to enforce Wausau's liability on the bond by motion. Since the very purpose of that bond was to reimburse the school district for any damages or increased costs which it would incur as a result of the delay occasioned by Roehl's appeal, Wausau cannot prevail on any contention that it lacked adequate notice of the basis for the school district's claim and therefore was deprived of due process.

To the extent Wausau had any right to a more detailed itemization of the school district's alleged damages, the school district provided this itemization in the bill of particulars. Moreover, the record indicates that the damages itemized in the bill of particulars were the same as the damages which had been specified by the school district in correspondence to Wausau shortly before the motion to enforce liability on the bond was filed. In addition, Wausau was allowed to conduct extensive discovery concerning the basis for the school district's claims. Consequently, we cannot conclude that Wausau was deprived of adequate notice of the alleged damages by the school district's failure to file the bill of particulars at an earlier date.

In response to Wausau's argument concerning the school district's attempts to quash a deposition scheduled shortly before trial, we note that the trial court ultimately granted Wausau permission to conduct the deposition. Because the trial court permitted the deposition, and because nothing in Wausau's brief establishes that it was materially prejudiced as a result of its inability to conduct the deposition when originally scheduled, no basis for relief has been shown.

Wausau also argues that it could not be found liable for damages because the order restraining construction of the school addition was a temporary restraining order rather than a temporary injunction. It contends that, by statute and case law, trial courts may require that a party seeking a temporary injunction post a bond providing for payment of damages to the enjoined party, but that a party restrained under a temporary restraining order is not entitled to damages. It argues that absent the existence of a temporary or preliminary injunction, recovery by the school district cannot occur.

Wausau's argument fails because its liability is premised on the terms of the bond issued by it pursuant to contract as a condition of a continuation of the stay pending appeal, not on any other law which might limit liability for damages absent a surety's agreement to bind itself. Pursuant to its contract, Wausau issued a bond providing for payment of damages to the school district if the court ultimately decided that Roehl was not entitled to a stay of the trial court's judgment quashing the writ and allowing the construction to continue. This bond made no distinction between a temporary restraining order and a temporary injunction, referring simply to Wausau's obligation to pay damages resulting from the stay. As determined by the trial court, it is this agreement which controls Wausau's liability. ² In any event, even though the stay order initially issued by the trial court on August 28, 1985, constituted a temporary restraining order, a hearing was subsequently held, the order was quashed, and construction was again enjoined only after the trial court agreed to stay construction pending appeal. When an injunction is imposed after hearing, it constitutes an injunction rather than a temporary restraining order. See Becker v. Becker, 66 Wis.2d 731, 736, 225 N.W.2d 884, 886 (1975).

Wausau's next argument is that the trial court erred in determining that it was liable on its bond without holding a hearing on liability. It points out that, at a hearing held on July 6, 1990, the trial court stated that the issue of whether damages had resulted from the delay had already been decided, even though no evidentiary hearing had been held on that issue prior to that date.

This argument provides no basis for relief because, even if an evidentiary hearing was not held prior to July 6, 1990, the issue of whether the stay caused a delay in construction activities and damaged the school district was fully addressed at the subsequent hearing on the school district's damages claim and in the findings of fact made by the trial court after that hearing. The trial court heard the evidence and found as fact that there was a cessation of work and damage to the school district as a result of the stay. The trial court's failure to hold an earlier hearing therefore provides no basis for relief.

Wausau also argues that the trial court erred in finding liability without requiring the school district to establish the elements of malicious prosecution. However, the law in Wisconsin is that recovery of damages from a surety does not require a showing of maliciousness. See Muscoda Bridge Co. v. Worden-Allen Co., 207 Wis. 22, 29, 239 N.W. 649, 652, reh'g denied, 207 Wis. 36, 240 N.W. 802 (1932). Rather, damages are...