Elkhorn Area School Dist. v. East Troy Community School Dist., 84-1948

• Decision Date: 09 October 1985
• Docket Number: No. 84-1948,84-1948
• Parties: , 29 Ed. Law Rep. 370 ELKHORN AREA SCHOOL DISTRICT, Plaintiff-Appellant, v. EAST TROY COMMUNITY SCHOOL DISTRICT, Defendant-Respondent.
• Court: Wisconsin Court of Appeals

Page 627

377 N.W.2d 627

127 Wis.2d 25, 29 Ed. Law Rep. 370

ELKHORN AREA SCHOOL DISTRICT, Plaintiff-Appellant, v. EAST TROY COMMUNITY SCHOOL DISTRICT, Defendant-Respondent.

No. 84-1948.

Court of Appeals of Wisconsin.

Submitted on Briefs Aug. 7, 1985.

Opinion released Oct. 9, 1985.

Opinion Filed Oct. 9, 1985.

Lisle W. Blackbourn, of Godfrey, Pfeil & Neshek, S.C., Elkhorn, for the plaintiff-appellant.

Milton C. Konicek, of Konicek & Kaiser, S.C., Burlington, for the defendant-respondent.

Before SCOTT, C.J., and BROWN, P.J., and NETTESHEIM, J.

BROWN, Presiding Judge.

In this case, a property tax was levied on land in the Elkhorn Area School District but paid to the East Troy Community School District which was not entitled to it. Although sec. 74.78, Stats., provides for recovery of taxes paid to the wrong school district, this court previously held that Elkhorn's claim under that statute was barred by lack of compliance with the notice of injury statute, sec. 893.80(1)(a), Stats. Elkhorn Area School District v. East Troy Community School District, 110 Wis.2d 1, 327 N.W.2d 206 (Ct.App.1982) (Elkhorn I). The issue presently before us is whether Elkhorn may now apply for mandamus on the grounds that an action at law is inadequate and, if so, whether the notice of injury and other limitations statutes apply to the mandamus action. We sustain the trial court holding that a mandamus action is appropriate and that the notice and limitations statutes are not applicable. We hold, however, that the trial court abused its discretion by dismissing the action on grounds that the town clerks were the real parties in interest and should have been named the defendants. We reverse and remand.

The facts were set forth in Elkhorn I and do not bear repeating in detail. For the purposes of this action, it is only necessary to state that for the tax years 1963 through 1978, real property taxes collected on the Elkhorn parcel were erroneously paid to East Troy by the LaGrange town clerk. The total amount was $53,927.45.

Elkhorn began an action in law for recovery of the moneys in 1978. The basis for the action, sec. 74.78, Stats., provides that "[w]henever any ... tax owing by a school district is assessed against and paid by another district," the district erroneously deprived of tax revenue should be reimbursed by the district that was mistakenly enriched.

In Elkhorn I, we held that sec. 893.80(1)(a), Stats., applied to actions at law predicated on the rights and duties established by sec. 74.78, Stats. Section 893.80(1)(a) is a notice of injury statute whose purpose is to allow governmental authorities to make a prompt investigation of the circumstances giving rise to a claim against it. Elkhorn at 5, 327 N.W.2d at 208. Section 893.80(1)(a) states that no action may be brought or maintained against any governmental subdivision unless written notice of the "circumstances" of the claim is served on the governmental subdivision within 120 days after the happening of the event giving rise to the claim. Because sec. 893.80(1)(a) was not followed by Elkhorn, the case was dismissed.

We noted in Elkhorn I, however, that:

We do not reach the question of whether, as an alternative remedy, Elkhorn could seek a writ of mandamus to compel the clerk for East Troy to enter the erroneously paid tax in the next tax roll against the property in East Troy and to pay the amount collected to the Elkhorn treasurer. See sec. 74.78, Stats.

Elkhorn at 4 n. 1, 327 N.W.2d at 208.

Elkhorn subsequently applied for mandamus against the East Troy School District charging that East Troy's clerk had a specific duty to perform the ministerial act of collecting the erroneously paid tax. East Troy then moved to dismiss the complaint, contending that mandamus was inappropriate for reasons that the statute of limitations applied to mandamus proceedings, res judicata was applicable and sec. 893.80, Stats., prohibited a second lawsuit. The trial court, the Honorable John J. Byrnes then presiding, found that mandamus was an appropriate remedy and denied East Troy's motion.

The Honorable James L. Carlson subsequently presided in the case. Both parties moved for summary judgment. Judge Carlson heard the motions but did not decide the merits. Rather, he held that the East Troy School District was the wrong party to the mandamus action and that the individual town clerks were the correct parties. Judge Carlson did not allow Elkhorn to amend its pleadings and dismissed the case.

Although this is Elkhorn's appeal of the order dismissing the action for failure to plead the proper parties, East Troy raises threshold questions arguing that mandamus is not an appropriate remedy in the first place.

East Troy gives three reasons for its position. It argues, first, that sec. 893.05 Stats., controls this case. This section states:

Relation of statute of limitations to right and remedy. When the period within which an action may be commenced on a Wisconsin cause of action has expired, the right is extinguished as well as the remedy. [Emphasis added.]

East Troy reasons that, under this statute, any rights which Elkhorn might have had were extinguished when this court ruled that Elkhorn was barred by sec. 893.80, Stats. East Troy appears to argue that, by this statute, the "right" to seek any kind of relief, including mandamus, is lost when the time limit for commencing a cause of action at law has expired.

Second, East Troy argues res judicata and cites Hermansen v. City of Lake Geneva, 272 Wis. 293, 75 N.W.2d 439 (1956), for the proposition that a judgment is conclusive as between the parties when a second action on the same claim raises issues that were or ought to have been litigated in the first cause of action. East Troy submits that because the instant mandamus action is identical to that previously adjudicated, this second suit is barred.

Finally, as a third variant, East Troy claims that even in a mandamus action, the statute of limitations, sec. 893.80(1)(a), Stats., is applicable to the case at hand.

All of these contentions are put to rest in the single case of City of Milwaukee v. Firemen Relief Association, 34 Wis.2d 350, 149 N.W.2d 589 (1967). There, the limitation of sec. 893.19(4), Stats., now sec. 893.93(1)(a), Stats., was applied to a claim by the firemen's association against the city of Milwaukee based on a statutory obligation continuing from 1891 to 1957. Despite this determination, the supreme court went on to acknowledge that aside from the remedy at law based upon the statutory obligation which was barred, the association could also "come into equity and assert the 1885 law as the basis of a constructive trust obligation on the part of the city. But if it wishes to enter equity, it can do so only if it wishes to subject itself to all equitable doctrines, including laches." Id. at 361, 149 N.W.2d at 594.

From this language, the following tenets of law are reinforced. First, although mandamus is a legal remedy, its issuance is largely controlled by equitable principles. See Town of Burke v. City of Madison, 17 Wis.2d 623, 631, 117 N.W.2d 580, 584 (1962), reh'g denied, 17 Wis.2d 638a, 118 N.W.2d 898 (1963). Thus, while sec. 893.05, Stats., speaks of extinguishment of a right and remedy, it is only actions in law that are extinguished. An action in equity is not so barred. The Firemen Relief case tacitly recognizes this fact by admitting that despite the statute of limitations having run on the statutory action, an action in equity might remain, subject to laches.

Second, Firemen Relief implicitly teaches that a res judicata argument is misplaced. This is because the issues are different as between an action at law and an equitable action. For res judicata to apply, the issues must be the same. Here, however, while the action at law has the statute of limitations as an issue, equitable actions have laches at issue. The three essential elements of laches are unreasonable delay in commencing the action, knowledge of the course of events and acquiescence therein and prejudice to the party asserting the defense. Estate of Korleski, 22 Wis.2d 617, 622-23, 126 N.W.2d 492, 495 (1964). None of these issues can be found in the preceding cause of action at law.

Mandamus actions also will not be allowed when there is another adequate remedy at law. Burns v. City of Madison, 92 Wis.2d 232, 243, 284 N.W.2d 631, 636 (1979), citing State ex rel. Johnson v. County Court, 41 Wis.2d 188, 192, 163 N.W.2d 6, 8 (1968). Since it was unknown during the first action whether sec. 893.80(1)(a), Stats., was applicable, there remained a question of whether an adequate remedy at law...