Lees v. Department of Industry, Labor and Human Relations
| Decision Date | 05 January 1971 |
| Docket Number | No. 8,8 |
| Citation | 49 Wis.2d 491,182 N.W.2d 245 |
| Parties | James P. LEES, Respondent, v. DEPARTMENT OF INDUSTRY, LABOR AND HUMAN RELATIONS, Appellant. |
| Court | Wisconsin Supreme Court |
The Department of Industry, Labor & Human Relations (hereinafter referred to as appellant), determined that James P Lees, receiver of real and personal property of Sahara 29, Inc., in a foreclosure action, (hereinafter referred to as respondent), was a successor in interest of the unemployment compensation account of Sahara 29, Inc., under the provisions of sec. 108.16(8), Stats.
The respondent sought review of the determination of the ILHR Department in the circuit court for Dane county. The appellant moved to dismiss the proceedings in the circuit court for the reasons that it lacked jurisdiction and that the appeal was patently frivolous and without merit. The circuit court determined it had jurisdiction, denied the appellant's motion to dismiss, and directed it to file an answer and a return as provided by statute. Appellant has appealed from this order.
Arnold J. Spencer and W. H. Putnam, Madison, for appellant.
Peregrine, Schimenz, Marcuvitz & Cameron, Hugh R. Braun, Milwaukee, for respondent.
The respondent timely served and filed a pleading for review of the decision of the appellant. The pleading was labeled 'PETITION FOR REVIEW Sec. 227.15, Wis.Stats.' The petition alleged that the department's decision determining that respondent was the successor to the unemployment compensation account of Sahara 29, Inc., was contrary to the law and the facts, and that the department acted beyond its authority in attempting to impose liability upon a circuit court receiver for delinquent unemployment compensation fund payments. The petition included a prayer for 'review of the determination of the Department * * * pursuant to the provisions of Sec. 108.10(5), Wis.Stats. and Sec. 227.20, Wis.Stats.'
On October 6, 1969, the ILHR Department filed an answer objecting to the jurisdiction of the circuit court to hear the action. On October 22, 1969, the department served an order to show cause and a petition also seeking dismissal of respondent's action for judicial review.
In disposing of the issues raised in the appellant's answer and order to show cause, the circuit court determined it had jurisdiction of the subject matter of the action and that the department had waived any objection it might have to lack of personal jurisdiction by filing an answer.
Three issues are raised on appeal:
(1) Did the circuit court have subject matter jurisdiction to review the decision of the department?
(2) Did the department waive its right to object to the personal jurisdiction of the court?
(3) Did the circuit court err in failing to dismiss the appeal because it was patently frivolous?
SUBJECT MATTER JURISDICTION.
Sec. 227.22(2), Stats., 1 expressly excludes from judicial review under ch. 227 procedures all matters arising out of the unemployment compensation act except as to matters relating to rules of the department.
However, the circuit court for Dane County has subject matter jurisdiction of an action to review the decision of the department relative to matters arising out of the unemployment compensation act under the provisions of sections 108.10(5), 108.09(7) and 102.23, Stats. 2 A court has subject matter jurisdiction if it has the power to hear the kind of action brought. Sec. 262.04(1), Stats., provides:
The statutes herein cited clearly give the circuit court for Dane county the power to hear this kind of action.
This issue is before us because the respondent labeled its pleading in the circuit court 'PETITION FOR REVIEW Sec. 227.15, Wis.Stats.' and did not serve a summons on the department as required by sec. 102.23, Stats.
Judicial review of the department's decisions relative to matters arising out of the unemployment compensation act are governed by the provisions of secs. 108.10(5), 108.09(7) and 102.23, Stats., and not the provisions of sec. 227.15. This court has held that a caption is not a part of the pleading, Schroedel Corp. v. State Highway Comm. (1967), 34 Wis.2d 32, 148 N.W.2d 691; and that the nature of the action is determined by the allegations of the pleading rather than its caption. Wesolowski v. Erickson (1958), 5 Wis.2d 335, 92 N.W.2d 898; Durkin v. Board of Police & Fire Com'rs (1970), 48 Wis.2d 112, 180 N.W.2d 1. The pleading alleged that the receiver was not liable for delinquent unemployment compensation fund payments and the prayer for relief expressly requested review under sec. 108.10.
The failure of the respondent to serve a summons on the department as required by sec. 102.23, Stats., did not deprive the circuit court of subject matter jurisdiction. This court has distinguished between the lack of subject matter jurisdiction and the failure to comply with conditions precedent necessary to acquire that jurisdiction.
'* * * * * *' Broadbent v. Hegge (1969), 44 Wis.2d 719, 724, 725, 172 N.W.2d 34, 37.
The service of a summons is not a condition precedent necessary to the subject matter jurisdiction of the court. The purpose of a summons is to give the defendant notice that an action has been commenced against him. Milwaukee County v. Schmidt, Garden & Erikson (1967), 35 Wis.2d 33, 150 N.W.2d 354. Service of a summons is in most instances necessary to the court's jurisdiction over the defendant's person. Sections 262.04(2), 262.06 and 262.07, Stats.
However, the service of a summons is not necessary to the court's subject matter jurisdiction. Ch. 262 deals with the requirement of the service of a summons in civil actions. But sec. 262.04(1), Stats., defining the court's subject matter jurisdiction expressly states: 'Nothing in this chapter affects the subject matter jurisdiction of any court of this state.'
PERSONAL JURISDICTION.
The department, in its answer, objected to the court's jurisdiction as follows:
'(6) ALLEGES that the 'Petition for review Sec. 227.15, Wis.Stats.' of this appellant, James P. Lees, is completely invalid, improper, and a legal nullity conferring no jurisdiction whatsoever upon this court since the instant matter does not involve any rule making by the Department of Industry, Labor And Human Relations under the Wisconsin Unemployment Compensation Act and Section 227.22(2) of Title XVIII, Administrative Procedure And Review, expressly provides:
"Only the provisions of ss. 227.01 to 227.21 relative to rules are applicable to matters arising out of the workmen's compensation act or the unemployment compensation act.' (Emphasis Supplied).
'* * *
'WHEREFORE, the DEPARTMENT OF INDUSTRY, LABOR AND HUMAN RELATIONS, moves for the entry of an Order now dismissing for lack of jurisdiction this invalid and improper attempt to apply Chapter 227 (the Administrative Procedure Act) and for judgment that the August 13, 1969 Decision of the Department be in all respects confirmed.'
By this allegation, the department challenged the court's jurisdiction to hear the action because ch. 227 does not give it the power to do so. Thus, the allegation challenged the subject matter jurisdiction and not the personal jurisdiction of the court. The answer was filed on October 6, 1969.
On October 22, 1969, the department served an order to show cause and a petition in which it raised the issue of the failure of the respondent to serve a summons as required by sec. 102.23, Stats.:
'(3) THAT no 'action' on behalf of James P. Lees represented by a summons and complaint was started here within 30 days of the Commission's adverse Decision of August 13, 1969, all as expressly required by Sections 102.23, 108.09(7)(b) and 108.10(5), Wis.Stats., and previous decisions of both this Court and of the Wisconsin Supreme Court,'
While lack of subject matter jurisdiction may be raised at any time, Moreland Corp. v. Retail Store Employees Union (1962), 16 Wis.2d 499, 114 N.W.2d 876, a party who appears and fails to object to the court's jurisdiction to his person submits to the jurisdiction of the court. Sections 262.07 and 262.16(1), Stats.
In this case the department appeared by filing an answer solely for the purpose of objecting to the subject matter jurisdiction of the court. The majority of jurisdictions hold that a party who appears to object to the court's jurisdiction of the subject matter thereby submits to the jurisdiction of the court to his person. The majority rule is predicated upon the theory that an objection to subject matter jurisdiction relates to the merits, and to grant relief the defendant must be regularly before the court. Objection before judgment to jurisdiction of court over subject matter as constituting general appearance. Anno. 25 A.L.R.2d 833.
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