Putnam v. Time Warner Cable

• Decision Date: 03 July 2001
• Docket Number: No. 99-2078.,99-2078.
• Citation: 247 Wis.2d 41,2001 WI App 196,633 N.W.2d 254
• Parties: Kerry L. PUTNAM, Carol L. Smith-Carter and Louis Boutan, individually and on behalf of all others similarly situated, Plaintiffs-Appellants, v. TIME WARNER CABLE OF SOUTHEASTERN WISCONSIN, LIMITED PARTNERSHIP, Defendant-Respondent.
• Court: Wisconsin Court of Appeals

247 Wis.2d 41

2001 WI App 196

633 N.W.2d 254

Kerry L. PUTNAM, Carol L. Smith-Carter and Louis Boutan, individually and on behalf of all others similarly situated, Plaintiffs-Appellants,¹ v. TIME WARNER CABLE OF SOUTHEASTERN WISCONSIN, LIMITED PARTNERSHIP, Defendant-Respondent.

No. 99-2078.

Court of Appeals of Wisconsin.

Oral argument March 15, 2001.

Decided July 3, 2001.

On behalf of the plaintiffs-appellants, the cause was submitted on the briefs of John C. Cabaniss of Law Office of John C. Cabaniss of Milwaukee, with oral argument by John J. Carey of Carey & Danis, LLC, of Clayton, Missouri.

On behalf of the defendant-respondent, the cause was submitted on the brief of Robert H. Friebert of Friebert, Finerty & St. John, S.C., of Milwaukee, with oral argument by Robert H. Friebert.

Before Wedemeyer, P.J., Schudson and Curley, JJ.

¶ 1. CURLEY, J.

Kerry L. Putnam, Carol L. Smith-Carter, and Louis Boutan, individually and on behalf of a putative c lass of customers (collectively, "the customers"), of Time Warner Cable of Southeastern Wisconsin, Limited Partnership (Time Warner), appeal from the circuit court judgment dismissing their action against Time Warner. The customers argue that the circuit court erred in concluding that the "voluntary payment doctrine" precluded their action to: (1) recover the amount of monthly late-fee payments they made that was not reasonably related to Time Warner's actual costs; and (2) obtain declaratory and injunctive relief preventing Time Warner from imposing such fees in the future.

¶ 2. We conclude that the circuit court correctly applied the voluntary payment doctrine when dismissing the customers' claims for recovery of late-fee payments in excess of Time Warner's actual costs. We also conclude that the circuit court correctly dismissed the customers' request for declaratory and injunctive relief. Accordingly, we affirm.

I. BACKGROUND.

¶ 3. The customers brought an action to recover actual, compensatory, and statutory damages for a portion of a $5.00 monthly late fee that, they claim, is not reasonably related to Time Warner's actual costs, and for declaratory and injunctive relief to prevent Time Warner from imposing such fees in the future.² The amended complaint specifically alleged that upon "installation and/or other activation" of cable television service, Time Warner's customers were required to execute a form contract requiring them to prepay for the first month of cable service, and that Time Warner imposes a $5.00 late fee on all customers who fail to pay their cable television bills by the due date set by Time Warner. Further, the amended complaint alleged:

Time Warner's late fee: (1) does not, in fact, bear a reasonable relationship to the costs incurred by Time Warner solely as a result of the late payments and/or late paying customers; and (2) is not based on a reasonable advanced estimate of the cost of late payments and/or late paying customers.

Moreover, the amended complaint alleged that Time Warner's collection of late fees amounted to a double recovery because it had already incorporated the collection costs into its basic cable rates, which the Federal Communications Commission had approved.

¶ 4. Finally, the amended complaint alleged that Time Warner customers paying late fees did so "under duress and the real and imminent threat that Time Warner, a monopolist for cable television programming in its exclusive Wisconsin territories, would disconnect the cable television services of a late paying customer." The amended complaint concluded that the customers, "[i]n reliance on [Time Warner's] concealments, suppressions, and omissions . . . paid at least one excessive and unconscionable late fee to Time Warner and continue to be threatened with paying additional excessive late fees to Time Warner."

¶ 5. Time Warner moved to dismiss all of the customers' claims, arguing that they were precluded either by the voluntary payment doctrine or by failure to state a claim for which relief may be granted. Opposing the motion to dismiss, the customers maintained that the voluntary payment doctrine was inapplicable because they did not have knowledge of all the facts relevant to the late-fee charges as a result of Time Warner's fraudulent and deceptive omission or concealment of those facts, and because they did not have a meaningful opportunity to contest the late fees. Rejecting the customers' arguments, the circuit court agreed that the voluntary payment doctrine barred their claims to recover past payments. The court also concluded that the claim for declaratory and injunctive relief was not ripe for resolution because the amended complaint failed to allege that any customer had refused to pay a late fee.

¶ 6. On appeal, the customers argue that the circuit court erred in concluding that the voluntary payment doctrine applied to this case. They also argue that even if, in theory, the doctrine could apply, it would not preclude their claims to recover past payments because Time Warner's deceptive conduct rendered the doctrine inapplicable. Finally, they argue that the circuit court erred in denying declaratory and injunctive relief.

II. DISCUSSION.

¶ 7. The standard for reviewing whether a circuit court correctly dismissed an action is well known. As recently reiterated by the supreme court:

"A motion to dismiss a complaint for failure to state a claim tests the legal sufficiency of the complaint." Whether the complaint states a claim for relief is a question of law which [an appellate court] reviews de novo. For purposes of review, we must accept the facts stated in the complaint, along with all reasonable inferences which may be drawn from them, as true. Unless it seems certain that no relief could be granted under any set of facts that the plaintiff could prove, dismissal of the complaint is improper.

Wausau Tile, Inc. v. County Concrete Corp., 226 Wis. 2d 235, 245, 593 N.W.2d 445 (1999) (citations omitted).

A. Voluntary payment doctrine.

[1]

¶ 8. The voluntary payment doctrine provides that "as between [person] and [person], money paid voluntarily, with knowledge of all the facts, and without fraud or duress, cannot be recovered merely on account of ignorance or mistake of the law." Frederick v. Douglas County, 96 Wis. 411, 423, 71 N.W. 798 (1897). The doctrine has been applied in several diverse contexts to preclude actions to recover payments that parties paid voluntarily, with full knowledge of the material facts, and absent fraud or wrongful conduct inducing payment. See, e.g., Burgess v. Commercial Nat'l Bank of Appleton, 144 Wis. 59, 65, 128 N.W.2d 436 (1910); see also Gage v. Allen, 89 Wis. 98, 61 N.W. 361 (1894); G. Heileman Brewing Co. v. City of LaCrosse, 105 Wis. 2d 152, 312 N.W. 2d 875 (Ct. App. 1981).

¶ 9. The customers argue that because the doctrine only applies where the payor has full knowledge of all relevant facts supporting the charge and the payee has not committed fraud or other improper conduct to gain the payment, certain "specific factual allegations" in the amended complaint "render the voluntary payment doctrine inapplicable under Wisconsin law." They maintain that the claims should not have been dismissed because the amended complaint alleged: (1) they paid the $5.00 late fee without knowledge that Time Warner's actual late-fee costs were between $0.38 and $0.48; (2) Time Warner concealed material information regarding its late-payment costs; and (3) they had no choice but to pay in order to maintain their cable service. We conclude, however, that the circuit court correctly determined that regardless of the truthfulness of the customers' assertions, the voluntary payment doctrine precluded their claims for recovery of late-fee payments in excess of Time Warner's actual costs. We do so for five reasons.

[2, 3]

¶ 10. First, although the amended complaint alleged that Time Warner concealed information about the specific factors affecting the setting of the late-fee charge, it failed to allege anything that would establish Time Warner's duty to disclose such information. Generally, tort liability for fraudulent misrepresentation or concealment does not arise from a failure to disclose information, absent a duty to disclose that information. See Mackenzie v. Miller Brewing Co., 2000 WI App 48, ¶ 33, 234 Wis. 2d 1, 608 N.W.2d 331,aff'd,2001 WI 23, 241 Wis. 2d 700, 623 N.W.2d 739; see also Hennig v. Ahearn, 230 Wis. 2d 149, 167, 601 N.W.2d 14 (Ct. App. 1999) ("Whether one has a duty to disclose a fact in a particular set of circumstances is essentially a policy decision, and it is, therefore, properly decided as a question of law."), review denied, 230 Wis. 2d 273, 604 N.W.2d 571 (Wis. Oct. 29, 1999). We conclude Time Warner had no duty to advise the customers of the company's reasons utilized in setting its late fee amount and payment schedule. Therefore, although the company's reasons were unknown to the customers, since they had no entitlement to the information, the customers knew all the material facts available to them.

[4]

¶ 11. Second, the amended complaint did not allege that the fraudulent misrepresentation or concealment was material to the customers' decisions to pay the late fees. If the customers never considered the propriety of the late fees before paying them, they certainly did not pay the fees as a result of any fraudulent misrepresentation or concealment. Under such circumstances, the alleged misrepresentation or concealment could not have been material to their decision to pay. See First Nat'l Bank & Trust Co. of Racine v. Notte, 97 Wis. 2d 207, 222-23, 293 N.W.2d 530 (1980) ("A misrepresentation is material if it is likely to induce a reasonable person to manifest his assent, or if the maker knows that it is likely that the recipient will be induced to manifest his assent by the misrepresentation."); see also Korhumel Steel Corp. v. Wandler, 229 Wis. 2d 395, 403, 600 N.W.2d 592 (Ct....