Neiman v. AMERICAN NAT. PROP. & CAS. CO.

• Decision Date: 07 July 2000
• Docket Number: No. 99-2554.,99-2554.
• Citation: 2000 WI 83,236 Wis.2d 411,613 N.W.2d 160
• Parties: Kristine NEIMAN, individually and as Personal Representative of the Estate of Jared Neiman, and Steven Neiman, Plaintiffs-Respondents, v. AMERICAN NATIONAL PROPERTY AND CASUALTY COMPANY, Defendant-Appellant.
• Court: Wisconsin Supreme Court

236 Wis.2d 411

2000 WI 83

613 N.W.2d 160

Kristine NEIMAN, individually and as Personal Representative of the Estate of Jared Neiman, and Steven Neiman, Plaintiffs-Respondents, v. AMERICAN NATIONAL PROPERTY AND CASUALTY COMPANY, Defendant-Appellant.

No. 99-2554.

Supreme Court of Wisconsin.

Oral argument May 4, 2000.

Decided July 7, 2000.

For the defendant-appellant there were briefs by James W. Mohr, Jr., and Mohr & Anderson, S.C., Hartford, and oral argument by James W. Mohr, Jr.

For the plaintiffs-respondents there was a brief by Eugene A. Gasiorkiewicz, Alice A. Rudebusch and Hanson & Gasiorkiewicz, S.C., Racine, and oral argument by Eugene A. Gasiorkiewicz. An amicus curiae brief was filed John S. Greene, assistant attorney general, with whom on the brief was James E. Doyle, attorney general, on behalf of the State of Wisconsin.

An amicus curiae brief was filed by Robert L. Jaskulski and Domnitz, Mawicke & Goisman, S.C., Milwaukee, and William C. Gleisner, III, and Law Offices of William C. Gleisner, III, Milwaukee, on behalf of the Wisconsin Academy of Trial Lawyers.

An amicus curiae brief was filed by Noreen J. Parrett, James A. Friedman and La Follette Godfrey & Kahn, Madison, on behalf of the Wisconsin Insurance Alliance, Wisconsin Association of Mutual Insurance Companies, Civil Trial Counsel of Wisconsin, Professional Insurance Agents of Wisconsin, Inc., Independent Insurance Agents of Wisconsin, Inc., and the State Medical Society of Wisconsin.

An amicus curiae brief was filed by Mark E. Larson and Gutglass, Erickson & Bonville, S.C., Milwaukee, on behalf of the Wisconsin Patients Compensation Fund.

An amicus curiae brief was filed by John S. Skilton, Michael B. Van Sicklen, Roberta F. Howell, and Foley & Lardner, Madison, on behalf of Physicians Insurance Company of Wisconsin, Inc.

An amicus curiae brief was filed by Howard R. Orenstein, Terry L. Wade and Robins, Kaplan, Miller & Ciresi, L.L.P., Minneapolis, Minnesota, on behalf of Barbara, Roger, Mitchell and Russell Schultz.

¶ 1. WILLIAM A. BABLITCH, J.

Kristine Neiman was injured, and her child stillborn, as the result of an accident occurring in September 1995. At the time of the accident, Wis. Stat. § 895.04(4) (1995-96)¹ provided that in a wrongful death action damages up to $150,000 could be awarded for the loss of society and companionship. Subsequently the legislature increased the amount of damages that could be awarded under this statute and applied the increase retroactively. 1997 Wis. Act 89.² The American National Property and Casualty Company (ANPAC) appeals from a judgment of the circuit court declaring as constitutional the retroactive increase in wrongful death damages available pursuant to Wis. Stat. § 895.04(4) (1997-98).³ Application of the higher statutory damage limit to an event occurring before the amendment to § 895.04(4) was enacted, ANPAC contends, violates the due process protections guaranteed by the Fourteenth Amendment to the United States Constitution as well as art. I, § 1 of the Wisconsin Constitution.

¶ 2. We conclude that a retroactive increase in damages available pursuant to Wis. Stat. § 895.04(4) unfairly alters settled property rights without achieving a broad public benefit. As a result, the retroactive element of the statute is unconstitutional under our test set forth in Martin v. Richards, 192 Wis. 2d 156, 531 N.W.2d 70 (1995). Accordingly, we reverse the circuit court.

¶ 3. The relevant facts are not in dispute. Kristine and Steve Neiman (the Neimans) purchased underinsured motorist insurance coverage from ANPAC. On September 5, 1995, Kristine Neiman was in an automobile accident. As a result of the accident Kristine, eight-months pregnant, sustained personal injuries, and her child was stillborn.

¶ 4. Subsequently, the Neimans settled with the underinsured driver and received $100,000 for Kristine Neiman's personal injuries and $100,000 as damages for the loss of society and companionship of Jared Neiman.

¶ 5. On the date the accident occurred, the maximum statutory damage limit for a wrongful death claim was $150,000. On April 28, 1998, an amendment to the wrongful death statute went into effect, retroactively increasing the limit for recovery for loss of society and companionship from $150,000 to $500,000 in the case of a deceased minor and $350,000 in the case of a deceased adult. 1997 Wis. Act 89, § 3. In August 1998 the Neimans brought a claim against ANPAC, asserting that additional payments for the wrongful death of Jared Neiman were due pursuant to their underinsured motorist coverage. ¶ 6. Before the circuit court, ANPAC moved for a judgment declaring that the retroactive application of increased wrongful death damage limits was unconstitutional. The Kenosha County Circuit Court, the Honorable Mary Wagner-Malloy presiding, denied ANPAC's motion and upheld the constitutionality of the statute as amended by 1997 Wis. Act. 89.

¶ 7. The parties subsequently entered into a settlement agreement. Under this agreement, ANPAC paid the Neimans an additional $50,000 as wrongful death damages. This amount represented the balance between the $100,000 collected from the underinsured motorist and the $150,000 limit for loss of society and companionship under Wis. Stat. § 895.04(4) (1995-96). The Neimans retained a claim against ANPAC for additional wrongful death damages, pursuant to the increase in the statutory limits established by 1997 Wis. Act 89. ANPAC retained the right to appeal the circuit court's judgment, finding the retroactive increase in wrongful death damage limits to be constitutional. Subsequently, Kristine Neiman filed a petition to bypass the court of appeals, which we granted.

[1, 2]

¶ 8. The sole issue presented for review is whether retroactive application of the increase in wrongful death damages as provided in 1997 Wis. Act 89 violates ANPAC's due process rights guaranteed by art. I, § 1 of the Wisconsin Constitution⁴ and the Fourteenth Amendment to the United States Constitution.⁵ We have found the due process clause in our state constitution to be the substantial equivalent to its counterpart in the federal constitution. Reginald D. v. State, 193 Wis. 2d 299, 307, 533 N.W.2d 181 (1995). Whether or not a legislative act that applies retroactively violates due process is a question of law, which this court reviews de novo. Chappy v. LIRC, 136 Wis. 2d 172, 184, 401 N.W.2d 568 (1987).

[3-5]

¶ 9. A rational basis test is applied when the court reviews the constitutionality of retroactive economic legislation. Pension Benefit Guar. Corp. v. R.A. Gray & Co., 467 U.S. 717, 730 (1984). Further, this court has held that to determine whether a retroactive statute is supported by a rational basis, the public interest served by the statute is weighed against the private interest that it overturns, including any unfairness caused by the retroactivity. Martin, 192 Wis. 2d at 201. "`Every presumption must be indulged to sustain the law if at all possible and, wherever doubt exists as to a legislative enactment's constitutionality, it must be resolved in favor of constitutionality.'" Chappy, 136 Wis. 2d at 185 (quoting State ex rel. Hammermill Paper Co. v. La Plante, 58 Wis. 2d 32, 46, 205 N.W.2d 784 (1973)).

¶ 10. There is no dispute on the issue of whether the plaintiffs' cause of action actually accrued prior to the effective date of the change in Wis. Stat. § 895.04(4). Kristine Neiman was involved in an accident on September 5, 1995. In April 1998 the legislature amended the wrongful death statute and increased damages available for the loss of society and companionship. 1997 Wis. Act 89, § 3 (enacted April 13, 1998; published April 27, 1998). Therefore, the cause of action accrued before the amendment to the statute.

¶ 11. There is also no dispute on the issue of whether the amendment to Wis. Stat. § 895.04(4), implemented by 1997 Wis. Act 89, is indeed retroactive. It is. The legislature provided that Act 89 "first applies to actions commenced on the effective date of this subsection." 1997 Wis. Act 89, § 4. This language indicates that the legislature intended to include within the scope of the amendment those claims in which the events giving rise to a cause of action had already occurred. See Martin, 192 Wis. 2d at 200. (phrase "filed on or after" in a legislative act indicated the legislature's intention to apply the new law retroactively). Thus, in this case we need not look further to conclude that the legislature intended § 895.04(4) to apply retroactively.

[6, 7]

¶ 12. We must first determine whether the retroactive statute "is remedial or procedural rather than substantive." Snopek v. Lakeland Med. Ctr., 223 Wis. 2d 288, 294, 588 N.W.2d 19 (1999). Statutes that are remedial or procedural are generally given retroactive application. Gutter v. Seamandel, 103 Wis. 2d 1, 17, 308 N.W.2d 403 (1981).

[8, 9]

¶ 13. When the limit of damages that can be recovered is set by statute, the amount that can be recovered is fixed on the date of injury. Martin, 192 Wis. 2d at 206-07 (citing State ex rel. Briggs & Stratton v. Noll, 100 Wis. 2d 650, 655-56, 302 N.W.2d 487 (1981); Bradley v. Knutson, 62 Wis. 2d 432, 436-37, 215 N.W.2d 369 (1974)). The retroactive increase in damages available under Wis. Stat. § 895.04(4) for loss of society and companionship is a change in substantive rights. Bradley, 62 Wis. 2d at 436. Therefore, the retroactive application of the increase in wrongful death damage limits affects a substantive right fixed on the date that the auto accident occurred.

[10]

¶ 14. Retroactive legislation must meet the test of due process and merely identifying a substantive, or vested, property right is not dispositive for due process purposes. The concept of vested rights is "conclusory —a right is vested when it has been so far perfected that it cannot be taken away by statute." Charles B. Hochman, The Supreme Court and the Constitutionality of...