Mayhugh v. State

• Decision Date: 10 July 2015
• Docket Number: No. 2013AP1023.,2013AP1023.
• Citation: 364 Wis.2d 208,867 N.W.2d 754
• Parties: Adam R. MAYHUGH, Plaintiff–Appellant–Petitioner, v. STATE of Wisconsin, Wisconsin Department of Corrections and Redgranite Correctional Institution, Defendants–Respondents. Gary Hamblin, Michael A. Dittmann, John A. Doe, John B. Doe, ABC Engineering Company, DEF Construction Company, GHI Insurance Company, JKL Insurance Company, MNO Insurance Company and PQR Insurance Company, Defendants.
• Court: Wisconsin Supreme Court

364 Wis.2d 208

867 N.W.2d 754

Adam R. MAYHUGH, Plaintiff–Appellant–Petitioner

v.STATE of Wisconsin, Wisconsin Department of Corrections and Redgranite Correctional Institution, Defendants–Respondents.

Gary Hamblin, Michael A. Dittmann, John A. Doe, John B. Doe, ABC Engineering Company, DEF Construction Company, GHI Insurance Company, JKL Insurance Company, MNO Insurance Company and PQR Insurance Company, Defendants.

No. 2013AP1023.

Supreme Court of Wisconsin.

Argued March 10, 2015.

Decided July 10, 2015.

For the plaintiff-appellant-petitioner, there were briefs by Nicholas Andrew Wagener and Bollenbeck Fyfe SC, Appleton, and oral argument by Nicholas Andrew Wagener.

For the defendants-respondents, the cause was argued by Karla Z. Keckhaver, assistant attorney general, with whom on the brief was Brad Schimel, attorney general.

Opinion

ANN WALSH BRADLEY, J.

¶ 1 Petitioner, Adam R. Mayhugh, seeks review of an unpublished decision of the court of appeals affirming an order of the circuit court that dismissed his tort action against the State and the Department of Corrections (DOC).¹ The court of appeals agreed with the circuit court that recovery was barred by the doctrine of sovereign immunity.

¶ 2 Mayhugh contends that sovereign immunity does not apply to the DOC. He maintains that by granting the DOC broad powers, the legislature established the DOC as an independent going concern. Based on his determination that the DOC is independent from the state, Mayhugh concludes that the DOC is not entitled to the sovereign immunity accorded to the state. In the alternative, Mayhugh asserts that the statutory grant of power to the DOC to sue and be sued should be interpreted as an express waiver of sovereign immunity.

¶ 3 We conclude that the DOC is entitled to sovereign immunity. The DOC lacks sufficient attributes to render it an independent going concern. Despite the breadth of its statutory powers, the character of those powers reveals that the legislature did not intend the DOC to be anything other than an arm of the state.

¶ 4 We further conclude that the legislature has not expressly waived the DOC's sovereign immunity. Wisconsin Stat. § 301.04 (2011–12),² which permits the DOC to sue and be sued, is not an express waiver of the DOC's tort immunity but rather addresses the DOC's capacity to be sued. Accordingly, we affirm the court of appeals' determination that Mayhugh's suit against the DOC is barred by sovereign immunity.

I

¶ 5 In 2011 Mayhugh, then an inmate at Redgranite Correctional Institution (Redgranite), attended a baseball game in Redgranite's recreational yard. Staff directed him to sit in the bleachers to watch the game. While he was sitting there, one of the players hit a foul ball, which flew into the bleachers and hit Mayhugh in the head. As a result, Mayhugh suffered a fracture to his right temporal lobe and a severed artery that led to a blood clot

, strokes, and acute respiratory failure.

¶ 6 Mayhugh subsequently filed a complaint against the state of Wisconsin, the DOC, Redgranite, unnamed construction and engineering companies, and unnamed insurers. The complaint alleged negligence in the design of the baseball field and asserted that spectators were not protected from foul balls, that Redgranite failed to remedy the situation, and that Mayhugh was injured as a result.

¶ 7 The DOC moved for dismissal, arguing that as a state agency it was entitled to sovereign immunity. It explained that the state had not consented to suit and therefore the court lacked personal jurisdiction.

¶ 8 After Mayhugh amended the complaint to include the Secretary of the DOC, the warden of Redgranite, and two unnamed officers as defendants, the DOC submitted another motion to dismiss. It again claimed sovereign immunity. Additionally, it asserted that Mayhugh had failed to comply with the notice requirements for suits against state employees and therefore failed to state a claim against them.

¶ 9 The circuit court granted the DOC's motion. The court agreed with the DOC that it was entitled to sovereign immunity under the Wisconsin Constitution unless the state had waived such immunity by consenting to be sued. It observed that although the legislature had provided that the DOC could “sue and be sued,” a number of authorities have declined to construe such language as a waiver. It then concluded that the State had not consented to suit. The court further determined that Mayhugh failed to comply with the notice statute for suits against state employees. Accordingly, it determined that it lacked jurisdiction over the state employee defendants.

¶ 10 Mayhugh appealed the portion of the decision relating to sovereign immunity. He contended that the defense of sovereign immunity is unavailable because the DOC is an independent going concern and not an arm of the state. In the alternative, he advanced that the legislature waived sovereign immunity for the DOC by enacting Wis. Stat. § 301.04, which permits the DOC to sue and be sued.

¶ 11 The court of appeals summarily affirmed the circuit court. Mayhugh v. State, No. 2013AP1023, unpublished slip op. (Wis.Ct.App. June 3, 2014). It observed that in Lindas v. Cady, 142 Wis.2d 857, 861–63, 419 N.W.2d 345 (Ct.App.1987), aff'd in part, rev'd in part, 150 Wis.2d 421, 441 N.W.2d 705 (1989), it determined that the phrase “sue and be sued” was not consent for suit against the DOC's predecessor agency, the Department of Health and Human Services. Id. at 2. Given that holding, it concluded that the language in Wis. Stat. § 301.04 was not a waiver of sovereign immunity. Id. The court of appeals further determined that the DOC was not an independent political body or an independent state agency, and therefore was not exempted from sovereign immunity. Id. at 3.

II

¶ 12 We are asked to determine whether the circumstances of this case fall within either of the two asserted scenarios rendering sovereign immunity inapplicable to a state entity. Specifically, whether the legislature created the DOC in a manner that renders it an independent going concern, which acts neither as the state's arm nor its agent, and whether the legislature has expressly waived the DOC's sovereign immunity. Both of these issues present questions of law which we review independently of the decisions rendered by the circuit court and court of appeals. Canadian Nat'l R.R. v. Noel, 2007 WI App 179, ¶ 5, 304 Wis.2d 218, 736 N.W.2d 900.

III

¶ 13 We begin with the first scenario rendering sovereign immunity inapplicable:

the creation of an independent state entity. The sovereign immunity derived from Article IV, Section 27 of the Wisconsin Constitution protects the state from suit. Lister v. Bd. of Regents, 72 Wis.2d 282, 291, 240 N.W.2d 610 (1976). Generally, for purposes of sovereign immunity, an action against a state agency or board is deemed an action against the state. Bahr v. State Inv. Bd., 186 Wis.2d 379, 387–88, 521 N.W.2d 152 (Ct.App.1994). However, when the state creates an entity independent from the state, which acts as neither its arm nor its agent, such entity falls outside the protection of sovereign immunity. Majerus v. Milwaukee Cnty., 39 Wis.2d 311, 315, 159 N.W.2d 86 (1968). Cases often refer to such entities as “independent going concerns.” See, e.g., German v. Wisconsin DOT, 2000 WI 62, ¶ 18, 235 Wis.2d 576, 612 N.W.2d 50 ; Townsend v. Wisconsin Desert Horse Ass'n., 42 Wis.2d 414, 424, 167 N.W.2d 425 (1969) ; Majerus, 39 Wis.2d at 314, 159 N.W.2d 86.

¶ 14 This court first referred to independent going concerns in Sullivan v. Bd. of Regents, 209 Wis. 242, 244 N.W. 563 (1932). There, the plaintiff brought suit against the Board of Regents, asserting that the State had waived sovereign immunity by creating the Board as a body corporate. The court disagreed, stating that although the Board was a body corporate, it was merely an arm of the state. Id. at 244, 244 N.W. 563.

¶ 15 To explain its conclusion, the court observed that the Board lacked the following attributes: it had “no power to raise money by taxation”; it could “not incur any liability beyond the amount appropriated to it by act of the legislature”; “the title to all property acquired by [the Board] is held by it in trust for the state”; the Board “may not dispose of real property without express authority from the state”; “[the Board's] power to dispose of personalty is limited”; and “[a]ll funds belonging to the institution, whether derived from appropriations or from the sale of property, are in the custody of the state treasurer and can only be disbursed on a warrant drawn by the secretary of state.” Id. at 244, 244 N.W. 563.

¶ 16 The absence of these attributes indicated that if the plaintiff were to recover a judgment against the Board, “there would be no property out of which execution could be satisfied.” In other words, if the Board created liability, “it is a liability of the state and must be enforced as other liabilities against the state are enforced.” Id. at 245, 244 N.W. 563. Accordingly, the court determined that nothing in the statutes indicated any intention that the Board be an independent going concern, and sovereign immunity applied. Id. at 244, 244 N.W. 563.

¶ 17 As Sullivan suggests, the determination that a state entity is an independent going concern is a narrow exception to sovereign immunity. Canadian Nat'l R.R., 304 Wis.2d 218, ¶ 7, 736 N.W.2d 900. To date, our case law has identified only three entities that fall into this category: the State Armory Board, the State Housing Finance Authority, and the State Investment Board. Majerus, 39 Wis.2d 311, 159 N.W.2d 86 ; State ex rel. Warren v. Nusbaum, 59 Wis.2d 391, 208 N.W.2d 780 (1973) ; Bahr, 186 Wis.2d 379, 521 N.W.2d 152.

¶ 18 In Majerus, 39 Wis.2d 311, 159 N.W.2d 86, the court considered whether the State Armory Board was an independent going concern. The legislature had designated the Armory Board as “a body politic and corporate” with the power “to sue and be sued.” Id. at 315, 159 N.W.2d...