Lorenz v. Dreske

• Decision Date: 18 February 1974
• Docket Number: No. 162,162
• Citation: 62 Wis.2d 273,214 N.W.2d 753
• Court: Wisconsin Supreme Court
• Parties: Albert A. LORENZ et al., Respondents, v. George R. DRESKE et al., Appellants.

Page 753

214 N.W.2d 753

62 Wis.2d 273

Albert A. LORENZ et al., Respondents, v. George R. DRESKE et al., Appellants.

No. 162.

Supreme Court of Wisconsin.

Feb. 18, 1974.

Syllabus by the Court

In this action the three plaintiffs, Albert Lorenz, Gordon Polder, and Donald Lee, seek recovery for services rendered to the defendant Clinicare Corporation and for damages for breach of contract. There is also a claim made against defendant George R. Dreske, president of Clinicare Corporation, personally for damages. There are a total of six causes of action alleged in the second amended complaint and not all plaintiffs are parties to each cause pleaded. Clinicare Corporation is a Wisconsin corporation engaged in the business of providing care and treatment for disturbed children and operates licensed child welfare agencies pursuant to ch. 48, Stats. The corporation operates such a facility in Eau Claire, Wisconsin, which facility was formerly known as the Albert A. Lorenz Institute (it is now known as the Eau Claire Academy). The plaintiff, Albert A. Lorenz, is a physician and psychiatrist; the plaintiff Gordon J. Polder is a clinical psychologist; and the plaintiff Donald A. Lee is a clinical social worker. All three plaintiffs have performed professional services at the Albert A. Lorenz Institute.

The trial court overruled a demurrer made by the defendants to the second amended complaint and it also denied defendants' motion to strike. Defendants appeal from the order entered by the trial court pursuant to that ruling, and from the order denying reconsideration of that order.

Miller & Niebler, Joseph C. Niebler, Milwaukee, for appellants.

Wilcox & Wilcox, Francis J. Wilcox, Eau Claire, for respondents.

WILKIE, Justice.

Several issues and pleadings are raised in this appeal. Precisely stated, the questions raised are as follows:

1. Are services performed by a physician in establishing a program for the care and maintenance of disturbed children professional services within the meaning of sec. 893.21(5), Stats.?

2. Do causes of action II through VI fail to state facts sufficient to constitute a cause of action?

3. Were causes of action II through VI defective for failure to join necessary parties?

4. Should a demurrer have been granted because of the pendency of a prior action for the same cause of action?

5. Should the defendants' motion to strike the plaintiffs for failure to comply with the order to join Northwest Psychiatric Clinic and because they are not the real parties in interest have been granted?

1. First cause of action--services by plaintiff Lorenz. In the first cause of action, the plaintiff Albert A. Lorenz seeks to recover the reasonable value of services rendered to the defendants prior to the establishment of the Albert A. Lorenz Institute during the period from May 15, 1967 to June 1, 1968. Lorenz alleges that he performed 'consultive and professional service in planning, designing and development of a program for the care and treatment of disturbed children and in assisting and bringing about the acceptance of such program by the professional community and by the licensing agencies of the State of Wisconsin and by those agencies, municipal and private having the care and custody of such children.' He further alleges that the defendants agreed severally to compensate him for the reasonable value of such services and that the services he rendered, based upon the usual and ordinary charges for professional consultation and advice have a reasonable value of $42,641.

The defendants demurred to this cause of action on the ground that the applicable statute of limitations had run. The defendants assert that this cause of action claims compensation for personal services performed more than two years prior to the commencement of the action and is thus barred by sec. 893.21(5), Stats. ¹ The plaintiff alleges that he performed professional services which are specifically excepted from the two-year limitation period. The defendants dispute that the services alleged to have been rendered come within that exception. They assert that the allegation that the services were professional is merely a conclusion of law which is not admitted on a demurrer. ² The plaintiff contends that the allegation in this first cause of action is a well-pleaded statement of ultimate fact admitted by the demurrer. It is more correct to categorize the allegation of 'professional services' as a matter of mixed law and fact.

"Matters of mixed law and fact, the ultimate of which is, in a broad sense, a fact, may be pleaded according to their legal effect . . . every reasonable intendment must be indulged in in favor of the pleading." ³

The adjective 'professional' is a factual description but since the term is used in a statute which applies to this cause of action it may also have a legal definition which differs from other common uses of the adjective. Therefore, since legal consequences flow from the use of the term it is in a sense a conclusion of law.

The defendants contend that professional services of a physician and psychiatrist can only mean those services rendered in the actual treatment of patients--the practice of the medical profession. This would be a very narrow definition of the meaning of professional services.

In Estate of Javornik ⁴ this court did define the meaning of 'personal services' under the statute.

'We think 'personal services' as used in sec. 893.21(5), Stats., means human labor such as is commonly rendered in return for a salary or a wage in the case of an employee and for 'other compensation' in the case of an independent contractor or one not in an employee relationship. Such human labor must be in the nature of a service as distinguished from the end product or the fruit of the service.'

In Younger v. Rosenow Paper & Supply Co. ⁵ this court described this as a narrow construction of the statute. In Younger the court concluded that a bonus plan was not compensation within the meaning of the statute and in Estate of Schroeder ⁶ a pension plan was considered to involve more than wages and so was not barred by the two-year statute of limitations. Thus the statute has been narrowly construed in favor of litigants to limit the number of actions which are barred. A broad interpretation of 'professional services' is in keeping with this trend to limit those actions barred by the statute.

It is true that the nature of a service performed is not necessarily determined by the profession of the person performing the service. Thus, an attorney or a doctor may have a business in addition to his professional practice and any services performed as a businessman would not be rendered 'professional services.' However, simply because certain services may be performed by persons who are not members of a particular profession, this does not mean that when they are performed by a member of a profession they may not be considered professional services.

In Case v. Ranney ⁷ the Michigan Supreme Court had occasion to interpret a statute which allowed the commencement of an action by capias where the action was for misconduct or neglect in any professional employment. The court discussed 'professional services' of an attorney in the following manner:

'. . . Professional services in the legal profession are not limited to litigation. In the matter of giving advice, managing a business, devising plans to meet contingencies, effect results and make collections, the professional services of an attorney often combine with services which ordinarily are not classed as strictly professional, and yet the employment as an entirety and the services as a whole are to be recognized as professional. Whether in any case an attorney is professionally employed depends on the relations and mutual understanding of the parties, on what was said and done, and all the facts and circumstances of the particular undertaking.'

Thus it appears that if the plaintiff Lorenz was requested by the defendants to perform the alleged services because of his expertise and professional training in the field of psychiatry and that he did utilize such knowledge and training in performing the services, there is no reason not to consider the services 'professional.' However, as recognized in the Ranney Case, whether the services performed were correctly classified as 'professional' would depend upon the entire factual context.

Here, the trial court overruled the demurrer based on the statute of limitations because it could not conclude on the pleadings alone that the services performed were not 'professional.' The trial court said:

'. . . Lorenz is an M.D., and defendants say the nature of the services alleged in the complaint are not medical services, therefore not professional, or within the profession of Lorenz so as to be barred by the statute. This court at the demurrer stage cannot conclude that services allegedly professional were personal services as opposed to professional services so as to bring the statute into play. Whether the services allegedly performed were in fact professional will depend upon the evidence adduced on the trial, but the pleaded facts are sufficient to constitute a cause of action and defendants' demurrer must be overruled.'

We conclude that as to this first challenge to the complaint the trial court was correct in overruling the demurrer. It does not appear from the complaint that the plaintiff cannot prove a set of facts which would entitle him to recover on his cause of action.

The defendants seem to be arguing that the cause of action does not allege that the plaintiff seeks to recover 'fees.' The defendants and the plaintiffs discuss the cause of action as if it were one sounding in quantum meruit. However, the cause of action alleges an express agreement by the defendant to pay the plaintiff the reasonable value of his services. It may be that at the trial the plaintiff will be unable to prove a...