MBS–certified Pub. Accountants, LLC v. Wisconsin Bell Inc., 2008AP1830.

• Decision Date: 24 February 2012
• Docket Number: No. 2008AP1830.,2008AP1830.
• Citation: 809 N.W.2d 857,338 Wis.2d 647,2012 WI 15
• Parties: MBS–CERTIFIED PUBLIC ACCOUNTANTS, LLC and Thomas H. Schmitt, CPA, d/b/a Metropolitan Business Services, Plaintiffs–Appellants–Cross Respondents–Petitioners, v. WISCONSIN BELL INC., d/b/a AT & T Wisconsin, Defendant–Respondent,ILD Telecommunications, Inc., d/b/a ILD Teleservices, Local Biz USA, Inc. and Americatel Corporation, Defendants–Respondents–Cross Appellants,US Connect, LLC, Defendant.
• Court: Wisconsin Supreme Court

2012 WI 15

338 Wis.2d 647

809 N.W.2d 857

MBS–CERTIFIED PUBLIC ACCOUNTANTS, LLC and Thomas H. Schmitt, CPA, d/b/a Metropolitan Business Services, Plaintiffs–Appellants–Cross Respondents–Petitioners,

v.WISCONSIN BELL INC., d/b/a AT & T Wisconsin, Defendant–Respondent,ILD Telecommunications, Inc., d/b/a ILD Teleservices, Local Biz USA, Inc. and Americatel Corporation, Defendants–Respondents–Cross Appellants,US Connect, LLC, Defendant.

No. 2008AP1830.

Supreme Court of Wisconsin.

Argued Sept. 16, 2011.Decided Feb. 24, 2012.

For the plaintiffs-appellants-cross-respondents-petitioners, there briefs filed by Douglas P. Dehler and O'Neil Cannon, Hollman, DeJong & Laing, S.C., Milwaukee, James E. Miller, pro hac vice, James C. Shah, pro hac vice, and Shepherd, Finkelman, Miller & Shah, LLC, Media, PA, and oral argument by Douglas P. Dehler.

For the defendant-respondent there were briefs filed by Paul F. Linn, Ted A. Wisnefski, and Michael, Best & Friedrich, LLP, Milwaukee, and oral argument by Paul F. Linn.

For the defendant-respondent-cross-appellant there were briefs filed by Robert H. Friebert, Christopher M. Meuler and Friebert, Finerty & St. John, S.C. of Milwaukee, and Gregory F. Harley, pro hac vice, and Burr & Forman, LLP, and oral argument by Gregory F. Harley.An amicus curiae brief was filed by John S. Greene, assistant attorney general, with whom on the brief was J.B. Van Hollen, attorney general, on behalf of the State of Wisconsin.ANN WALSH BRADLEY, J.

¶ 1 The petitioners, Thomas H. Schmitt and MBS–Certified Public Accountants, LLC (collectively, MBS), seek review of an unpublished decision of the court of appeals affirming a circuit court order dismissing their claims for monetary relief.¹ The circuit court determined that the common law voluntary payment doctrine barred MBS's claims against Wisconsin Bell, Inc. and ILD Telecommunications, Inc. for damages under Wis. Stat. § 100.207 and other statutes.²

¶ 2 The defendant telecommunications companies assert that Putnam v. Time Warner Cable of Southeastern Wisconsin, 2002 WI 108, 255 Wis.2d 447, 649 N.W.2d 626, is squarely on point and forecloses the argument advanced by MBS. Additionally, they contend that under the rule of Fuchsgruber v. Custom Accessories, Inc., 2001 WI 81, 244 Wis.2d 758, 628 N.W.2d 833, the legislature was required to make explicit reference to the voluntary payment doctrine in the text of Wis. Stat. § 100.207 if it intended the doctrine to be inapplicable to claims under that statute.

¶ 3 We conclude that no Wisconsin court has addressed whether the legislature intended the voluntary payment doctrine to be a viable defense against any cause of action created by a statute. In Putnam, the question of whether the voluntary payment doctrine was a viable defense to a claim under Wis. Stat. § 100.18(1) may have lurked in the record, but it was neither brought to the attention of the court nor was it specifically addressed. Accordingly, it was not decided by this court.

¶ 4 We further determine that the defendants misinterpret Fuchsgruber. Application of the common law voluntary payment doctrine would undermine the manifest purposes of Wis. Stat. § 100.207. Under these circumstances, the conflict between the statute's manifest purpose and the common law defense leaves no doubt that the legislature intended that the common law defense should not be applied to bar claims under the statute.

¶ 5 Accordingly, we reverse and remand to the court of appeals to address ILD's cross-appeal and, if appropriate, any previously unresolved appellate issues regarding Wis. Stat. § 100.18(1) and the Wisconsin Organized Crime Control Act.

I

¶ 6 The allegations at issue in this case relate to an illegal telecommunications practice called “cramming.” According to MBS, cramming is a deceptive billing scheme in which telecommunications companies insert relatively small, unauthorized charges into customers' telephone bills with the expectation that the customers will unwittingly pay the unauthorized charges.

¶ 7 The facts set forth below are taken primarily from MBS's complaint. Because we are reviewing the circuit court's grant of a motion to dismiss for failure to state a claim, we must assume that these facts are true.

¶ 8 Thomas Schmitt is an accountant who owns and operates MBS–Certified Public Accountants, LLC (MBS). Wisconsin Bell is the local exchange carrier that provides MBS's telephone service.³ At some point, Schmitt discovered that Wisconsin Bell's telephone bills contained unauthorized charges. Schmitt and MBS filed suit.⁴

¶ 9 According to the allegations in the complaint, the unauthorized charges, which ranged from $2 to $40 per month, were generated by three service providers, Local Biz USA, U.S. Connect, and AmericaTel. These service providers are in the business of providing internet and web hosting services, directory assistance services, and international calling plans, respectively. MBS asserted: “Because consumers would be more likely to question unauthorized charges if they were contained in bills sent to them directly by the Service Provider Defendants ..., those Service Provider Defendants enlist the aid of third-party billing companies, ... which agree to take part in the deceptive business practices in exchange for a fee.”

¶ 10 According to MBS, the unauthorized charges were forwarded to ILD Communications (ILD), a billing clearinghouse. ILD aggregated the unauthorized charges and then forwarded them on to Wisconsin Bell, where they were incorporated into MBS's telephone bills under the heading “Miscellaneous Charges and Credits.” The complaint alleges that Schmitt did not notice the unauthorized charges and unwittingly paid them.

¶ 11 The defendants named in MBS's complaint fall into three categories: service providers (Local Biz USA, U.S. Connect, and AmericaTel); billing clearinghouses (ILD); and local exchange carriers (Wisconsin Bell). At this point, however, only two defendants, ILD and Wisconsin Bell, remain as parties to this appeal.⁵

¶ 12 In relevant part, the complaint alleged violations of Wis. Stat. § 100.207(2) and (3)(a), violations of Wis. Stat. § 100.18(1), and violations of the Wisconsin Organized Crime Control Act, Wis. Stat. § 946.80, et seq. (hereinafter, the Crime Control Act).⁶ The telecommunications company defendants filed motions to dismiss, alleging various defenses including the voluntary payment doctrine. Under that doctrine, a party cannot bring an action “to recover payments that [were] paid voluntarily, with full knowledge of the material facts, and absent fraud or wrongful conduct inducing payment.” Putnam, 255 Wis.2d 447, ¶ 13, 649 N.W.2d 626.

¶ 13 At a hearing on the defendants' motions, the circuit court dismissed all claims for monetary relief against ILD and Wisconsin Bell with one exception. ⁷ The circuit court's analysis focused primarily on the language of 100.207(2) and (3)(a). It determined that although the complaint properly alleged violations of Wis. Stat. § 100.207, the voluntary payment doctrine would bar any entitlement to monetary relief.

¶ 14 Taking the allegations in the complaint as true, the court concluded that each of the defendants made false statements with regard to the provision of telecommunications service in violation of § 100.207(2).⁸ It explained: “Stating on a phone bill that a customer owes money for services the customer did not authorize is false.... And that seems to be the only element that must be shown to demonstrate a violation of Wis. Stat. § 100.207(2).”

¶ 15 The court also concluded that all of the defendants except ILD violated § 100.207(3)(a).⁹ The court excepted ILD because it was “satisfied that ILD did not bill the plaintiffs. ILD collected, packaged, and communicated billing information to Wisconsin Bell, but that conduct cannot fairly be described as ‘billing’[.]”

¶ 16 Nevertheless, the court went on to conclude that “the complaint also establishes a possible defense to the damage claim.” Relying on MBS's allegation that Schmitt “did not notice the charges and unwittingly paid them,” it asserted: “[T]he complaint implies that the plaintiffs voluntarily paid the unlawful charges.”

¶ 17 The court concluded that the voluntary payment doctrine was a viable defense to MBS's claims for damages under Wis. Stat. § 100.207 because the legislature did not insert any language in the statute that expressly abrogated the common law doctrine:

I reach this juncture in my reasoning by following the maxim that a court cannot read a statute to override the common law unless the legislative purpose to do so is clearly expressed in the language of the statute.

A good example of this principle at work is Fuchsgruber v. Custom Accessories, Inc., [244 Wis.2d 758, 628 N.W.2d 833]....

Likewise, in the case before me, I find a lack of any explicit reference to voluntary payment in section 100.207, and that lack of any explicit reference to the possibility of voluntary payment leads me to conclude that the Legislature did not intend for this statute to override this common law doctrine.

I simply do not find any words suggesting that you can claim damages under the statute even if you voluntarily paid.

The court asserted that it was required to “presume the Legislature knew about the doctrine and knew this would be raised as a defense, [and] if they didn't want it raised as a defense, they would have said so.”

¶ 18 Additionally, the circuit court found support in Putnam: “I'm also influenced by the fact that the Putnam court upheld the application of the common law voluntary payment doctrine against not only common law damage claims, but also a statutory claim.”

¶ 19 Wisconsin case law recognizes three exceptions to the voluntary payment doctrine: fraud, duress, and mistake of fact. See Putnam, 255 Wis.2d 447, ¶ 13, 649 N.W.2d 626. Turning to those exceptions, the circuit court determined that MBS had alleged fraud but had failed to “satisfy the court” that the...