Cudahy v. Wisconsin Dept. of Revenue

• Decision Date: 20 December 1974
• Docket Number: Nos. 196 and 197,s. 196 and 197
• Citation: 224 N.W.2d 570,66 Wis.2d 253
• Parties: Richard D. CUDAHY et. al., Appellants, v. WISCONSIN DEPT. OF REVENUE, Respondent.
• Court: Wisconsin Supreme Court

Page 570

224 N.W.2d 570

66 Wis.2d 253

Richard D. CUDAHY et. al., Appellants, v. WISCONSIN DEPT. OF REVENUE, Respondent.

Nos. 196 and 197.

Supreme Court of Wisconsin.

Dec. 20, 1974.

Godfrey & Kahn, S.C., Milwaukee, for appellants; William Boardman Graves, Milwaukee, of counsel.

R. W. Warren, Atty. Gen., Allan P. Hubbard, Asst. Atty. Gen., Madison, for respondent.

HANLEY, Justice.

Three issues are presented on this appeal:

1. Did the circuit court have jurisdiction to act on either of the two petitioners for review?

2. Did the trial court have the power to enlarge the appellants' time to serve the first petition to review upon the Wisconsin Department of Revenue?

3. Should this court exercise its discretionary power under Sec. 251.09, Stats., to reverse the circuit court orders because of a miscarriage of justice?

Question of Jurisdiction

The proceeding in the circuit court was commenced by the taxpayer under Ch. 227, Stats. Sec. 227.16(1) of that act requires that within thirty (30) days after service of the agency decision from which review is sought, the petition for review shall be served upon the agency and filed with the clerk of the circuit court, and that a copy of the petition shall also be served personally or by registered mail, not later than thirty (30) days after the commencement of the proceeding, upon all parties who appeared before the agency in which the order sought to be reviewed was made.

In Brachtl v. Department of Revenue (1970), 48 Wis.2d 184, 179 N.W.2d 921, this court discussed this section and stated:

'The statute involved is complex and if read in a cursory fashion could be confusing. We are satisfied, however, that its provisions are clear and that the requirement that the Wisconsin Tax Appeals Commission be served is explicitly set forth in the statute. The section . . . clearly states that the review proceeding must be instituted by service upon the agency 'within 30 days after the service of the decision of the agency upon all parties.' It is undisputed that the Wisconsin Tax Appeals Commission was the tribunal which made the decision . . .' PP. 186, 187, 179 N.W.2d p. 922.

In Monahan v. Department of Taxation (1963), 22 Wis.2d 164, 125 N.W.2d 331, this court made clear that the department also had to be served:

'The department had appeared in the proceeding before the board in which the board has entered its decision and order of May 3, 1962, and with respect to which the taxpayer sought circuit court review. Therefore, unless the department was served with a copy of the petition for review within the required 30 day period, the circuit court would be without jurisdiction to conduct the review proceeding.' P. 167, 125 N.W.2d p. 332.

The TAC and the department are two separate and distinct agencies. Sec. 73.01, Stats., and Kaukauna v. Department of Taxation (1947), 250 Wis. 196, 26 N.W.2d 637. The TAC must be served with the petition for review as the agency which made the determination sought to be reviewed and the department must be served as a party who appeared before the agency. Any confusion which might exist in the statutory procedure as to these requirements for service of the petition for review was eliminated by this court's decisions in Monahan and Brachtl.

Appellants argue that even under these requirements, they complied with the statutory requirements by serving and filing the second petition after their attorney had served the TAC's decision and order upon the department. They contend that the record does not disclose service of the order on the department and, therefore, the time for bringing the petition for review never began to run until their attorney served the order.

However, the department, through its attorney, stated that it had been served. Also, the clerk of the TAC, in certifying the record for the second petition, included the admission of service of the department dated June 22, 1972. The clerk stated that this had been inadvertently omitted from the record certified on the first petition.

The plaintiff commenced its petition for review within the time limit set by Sec. 227.16, Stats. The reason the question arises is that counsel for the petitioners did not realize the department had to be served. But for this mistake, the statutory requirements would have been met. We think the trial court was justified in stating that the appellants are not entitled to take advantage of the omission of the admission of service from the record.

This court recognizes that the right to judicial review of the findings and orders of administrative agencies is dependent upon strict compliance with Sec. 227.16, Stats. Evans v. Department of Local Affairs & Development (1974), 62 Wis.2d 622, 215 N.W.2d 408; Brachtl v. Department of Revenue, supra, and State ex rel. Russell v. Board of Appeals (1947), 250 Wis. 394, 27 N.W.2d 378.

In Evans v. Department of Local Affairs & Development, supra, it was said that:

'The circuit court for Dane county, in dismissing the petition for want of jurisdiction, took the position that jurisdiction for judicial review of the findings and orders of administrative agencies is dependent upon strict compliance with sec. 227.16, Stats., and that the parties could not confer jurisdiction upon the court by waiver or consent. As a generalization, this statement is true and the cases cited by the trial court bear this out.' P. 626, of 62 Wis.2d, p. 410 of 215 N.W.2d.

This rule was distinguished in Evans and not applied because in that case failure to comply with the section involved only an improper caption. The faulty caption was viewed as a misnomer which 'in no way affected the subject matter jurisdiction of the court.' However, the language of the court indicates that strict compliance with the statutory requirements is essential for subject matter jurisdiction because personal jurisdiction can be conferred by waiver or consent whereas subject matter jurisdiction cannot. Secs. 262.07, 262.16 and 262.04, Stats.

Recently this court decided Hamilton v. Dept. of ILHR (1973), 56 Wis.2d 673, 203 N.W.2d 7. This case also involved an order of the Department of Industry, Labor and Human Relations, but the petition to review was brought under Sec. 227.16, Stats. Both the agency and the adverse party before the agency objected to the method of service. As to service on the department, this court said:

'While service upon the department within thirty days of the service of its order may be a prerequisite to the court's subject-matter jurisdiction, the primary function of service, namely, notice, was fulfilled within the thirty days. We conclude any defect in the manner of service so as to affect subject-matter jurisdiction was waived. The department also waived the manner in which it was personally served, which service gave the circuit court personal jurisdiction over it.' PP. 686, 687, 203 N.W.2d p. 14.

In Hamilton, the court's concern was that the clerk of circuit court abused his discretion by not filing the petition for review as soon as he should have, and that the petitioner could not be denied his right to appeal as a result thereof. The court was also concerned that the department's entry of four separate orders unduly confused the petitioner. Further, the court determined there was timely service upon the department within the required 30-day statutory period, and that under the circumstances present in that case the circuit court had obtained subject matter jurisdiction to act.

The fact situation in Hamilton is unusual and readily distinguishable from the instant case. As the court pointed out:

'Nor is it the case where the petitioner could have complied but did not solely because of his own inadvertence, mistake or negligence. Rather, this is a case where, except for the department's faulty procedures and the clerk's unreasonable failure to file, there would have been compliance.' Hamilton v. ILHR Department, supra, p. 688, 203 N.W.2d p. 15.

In the instant case there was no attempt to serve the department until well after the thirty (30) day statutory period had expired.

We are satisfied that the cases of Monahan v. Department of Taxation, supra, and Brachtl v. Department of Revenue, supra, which apply to fact situations similar to the one involved here control. Under Monahan, the first petition was properly dismissed because of failure of the appellants to timely serve a copy of the petition upon the department after commencement of the proceedings. Under Brachtl, the second petition to review was properly dismissed because it was not brought within thirty (30) days of service upon the parties of the decision and order of the TAC.

We now hold that unless there is compliance with the mandatory requirements of Sec. 227.16(1), Stats., the taxpayer cannot effectively invoke the subject matter jurisdiction...