Fandrey v. American Family Mut. Ins. Co., 02-2628.

• Decision Date: 03 June 2004
• Docket Number: No. 02-2628.,02-2628.
• Parties: Mackenzie Fandrey, a minor, by James B. Connell, her Guardian ad Litem, Plaintiff-Appellant, Wisconsin Physicians Service Insurance Corporation, Plaintiff, v. American Family Mutual Insurance Company, Defendant-Third-Party Plaintiff-Respondent, v. Michelle M. Egner, Third-Party Defendant.
• Court: Wisconsin Supreme Court

272 Wis.2d 46

2004 WI 62

680 N.W.2d 345

Mackenzie Fandrey, a minor, by James B. Connell, her Guardian ad Litem, Plaintiff-Appellant, Wisconsin Physicians Service Insurance Corporation, Plaintiff, v. American Family Mutual Insurance Company, Defendant-Third-Party Plaintiff-Respondent, v. Michelle M. Egner, Third-Party Defendant.

No. 02-2628.

Supreme Court of Wisconsin.

Oral Argument November 4, 2003.

Decided June 3, 2004.

For plaintiff-appellant there were briefs (in the court of appeals) by James B. Connell and Crooks, Low & Connell, S.C., Wausau, and oral argument by James B. Connell.

For the defendant-third-party plaintiff-respondent there was a brief by John A. Kramer, Michael J. Roman and Zalewski, Klinner & Kramer, LLP, Wausau, and oral argument by John A. Kramer.

¶ 1. JON P. WILCOX, J.

This case involves two questions certified to us by the court of appeals. First, the court of appeals has asked us to determine whether a court may use traditional public policy factors¹ to limit liability under Wis. Stat. § 174.02 (1999-2000),² commonly known as the "dog bite statute," when liability under the statute is otherwise established.³ Second, if we determine that liability under § 174.02 may be precluded based on public policy factors, the court of appeals has asked us whether the Marathon County Circuit Court, Patrick M. Brady, Judge, properly applied those factors to limit liability in this case. We hold that a court may preclude liability under § 174.02 based on public policy factors and that the circuit court correctly applied those factors in granting summary judgment in the case before us. Therefore, we affirm the decision of the circuit court, which granted American Family Mutual Insurance Company's motion for summary judgment.

I. FACTUAL BACKGROUND

¶ 2. This case comes before us following a grant of summary judgment in favor of American Family Mutual Insurance Company (American Family). The operative facts are straightforward and undisputed, as the plaintiff, Mackenzie Fandrey (Mackenzie), did not submit any competing summary judgment materials.

¶ 3. On December 23, 2000, Michelle Rausch (formerly known as Michelle Egner) and her three-year-old daughter, Mackenzie, drove to the home of Nicole Beliunas (formerly known as Nicole Patton) to deliver Christmas cookies. Michelle and Nicole had been best friends for a number of years and frequently visited each other. On the day in question, the Beliunases did not invite Michelle over, and Michelle had not called ahead to determine if the Beliunases were home. Upon reaching the Beliunases' home, Michelle knocked on the back door, opened it, stepped inside, and called out. No one answered. Apparently, the Beliunases were at a movie and had left their door unlocked. Michelle proceeded to place the cookies on the kitchen table, which was a short distance from the door. She then put Mackenzie on a chair. While Michelle was writing a note to Nicole, Mackenzie, unbeknownst to Michelle, left the chair and proceeded into the Beliunases' living room. Michelle subsequently heard Mackenzie scream and turned to see Mackenzie bleeding from the mouth and standing near the Beliunases' dog, Molly.

II. PROCEDURAL POSTURE

¶ 4. Mackenzie, by her guardian ad litem, brought suit against the Beliunases' insurer, American Family, alleging a cause of action under § 174.02. American Family answered, arguing as an affirmative defense that Mackenzie was a trespasser in the Beliunases' home and that the claim should be precluded based on public policy. American Family also filed a third-party complaint against Michelle, seeking contribution and indemnification due to Michelle's alleged negligent supervision of Mackenzie. Additional facts are set forth below in the opinion.

¶ 5. The circuit court found that Michelle and Mackenzie did not have implied consent to enter the Beliunases' house. It also found that Michelle knew the Beliunases kept Molly in their house. The court, relying on Alwin v. State Farm Fire & Casualty Co., 2000 WI App 92, 234 Wis. 2d 441, 610 N.W.2d 218, then found that public policy precluded Mackenzie's claim under § 174.02. The court stated:

I don't know what else they could have done as responsible dog owners that would be any more restrictive than to keep the dog inside their home.... [S]trict liability under Section 174.02 for the child's injury is wholly out of proportion to the culpability on the part of the homeowners and that allowance of recovery would place too unreasonable of a burden on the homeowners.

And I believe that allowance of recovery under this set of facts would enter a field that has no sensible or just stopping point.

Mackenzie appealed, and we accepted certification of the aforementioned questions from the court of appeals.

III. ANALYSIS

¶ 6. Whether public policy acts as a bar to a claim in any given case is a question of law that this court decides de novo. Rockweit v. Senecal, 197 Wis. 2d 409, 425, 541 N.W.2d 742 (1995). Mackenzie contends that public policy cannot be used by courts to modify or curtail the effect of a legislative enactment that imposes strict liability because "[t]he ultimate source of public policy in this state is the state legislature." (Appellant's Br. at 8). Mackenzie further contends that courts should not interfere with the legislature's decision regarding the sensible stopping point of the law, and that the legislature, not the judiciary, is the appropriate forum for determining whether a homeowner should be liable under the dog bite statute. Mackenzie principally relies upon two cases in support of this argument: Borgins v. Falk Co., 147 Wis. 327, 133 N.W. 209 (1911), and Meunier v. Ogurek, 140 Wis. 2d 782, 412 N.W.2d 155 (Ct. App. 1987).

¶ 7. In Borgins, this court decreed:

Public policy on a given subject is determined either by the constitution itself or by statutes passed within constitutional limitations. In the absence of such constitutional or statutory determination only may the decisions of the courts determine it.... When acting within constitutional limitations, the legislature settles and declares the public policy of a state, and not the court.

Borgins, 147 Wis. at 351. Similarly, in Meunier, when interpreting § 174.02, the court of appeals stated:

[The statute] unambiguously states the conditions under which a dog owner is liable, we may not add more by implication or statutory construction ....

... [The statute] simply states that the owner is liable for damages caused by the dog injuring or causing injury to a person, livestock or property.

Meunier, 140 Wis. 2d at 786.

¶ 8. American Family responds that Borgins is inapposite because the term "public policy" was used in Borgins in the context of the broader notion of the state's public policy, whereas the "public policy" as used in the present case refers to the courts' long practice of precluding liability for a tortious act in a particular case based on Wisconsin's view of "cause." For the reasons discussed below, we agree with American Family's argument and hold that courts may use the six traditional public policy factors to bar a claim under § 174.02, even if a plaintiff otherwise establishes liability.

¶ 9. Resolution of this issue requires not only an inquiry into the nature of § 174.02, but also an analysis of the history of the six "public policy" factors and their relation to Wisconsin's view of "cause" in tort claims. Our analysis begins with the recognition that § 174.02 is a codified tort action. Also, we note the fact that § 174.02 imposes strict liability on a dog owner for injuries caused by the dog.⁴ "`Strict liability' is a judicial doctrine which relieves a plaintiff from proving specific acts of negligence and protects him from certain defenses." Meunier, 140 Wis. 2d at 785.⁵ Thus, § 174.02 obviates the need for a plaintiff to prove specific acts of negligence in each case. However, the statute still requires a plaintiff to establish the other elements common to all negligence claims, causation and damages.⁶

¶ 10. It is with this understanding that we now examine the history behind the application of the six public policy factors used to preclude liability and the relationship between "public policy" and "proximate cause."⁷ In Wisconsin, when "public policy" is used in the context of precluding tort liability, the term is being used as a synonym for "proximate cause." See generally Morden v. Continental A.G., 2000 WI 51, ¶ 60, 235 Wis. 2d 325, 611 N.W.2d 659

(discussing the relationship between the terms "causation," "proximate cause," "legal cause," "cause-in-fact," and "public policy"); Morgan v. Pa. Gen. Ins. Co., 87 Wis. 2d 723, 735-38, 275 N.W.2d 660 (1979) (same); Kendall W. Harrison, Wisconsin's Approach to Proximate Cause, 73 Wisconsin Lawyer 20 (Feb. 2000) (discussing the historic evolution of the term "proximate cause" and the public policy factors used to limit tort liability).

¶ 11. Early in Wisconsin jurisprudence, the term "proximate cause" referred to two distinct concepts. The first use of the term was to describe "limitations on liability and on the extent of liability based on [] lack of causal connection in fact." Richard V. Campbell, Duty, Fault, and Legal Cause, 1938 Wis. L. Rev. 402, 403. The second use of the term was to describe "limitations on liability and on the extent of liability based on ... policy factors making it unfair to hold the party [liable]." Id. The second use of the term probably had its origins from the venerable Judge Andrews: "What we do mean by the word `proximate' is that, because of convenience, of public policy, of a rough sense of justice, the law arbitrarily declines to trace a series of events beyond a certain point. This is not logic. It is practical politics." Palsgraf v. Long Island R.R. Co., 162 N.E. 99, 103 (N.Y. 1928) (Andrews, J., dissenting) (emphasis added). ¶ 12. The first use and meaning of the term "proximate cause" has long since been...