Riley Fiontar, LLC v. Dep't of Nat. Res.

• Court: Wisconsin Court of Appeals
• Writing for the Court: PER CURIAM.
• Docket Number: 2022AP1771
• Decision Date: 29 October 2024
• Parties: Riley Fiontar, LLC, Plaintiff-Appellant, v. Department of Natural Resources and Preston Cole, Defendants-Respondents.

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Riley Fiontar, LLC, Plaintiff-Appellant, v. Department of Natural Resources and Preston Cole, Defendants-Respondents.

No. 2022AP1771

Court of Appeals of Wisconsin, District III

October 29, 2024

This opinion will not be published. See WIS. STAT. RULE 809.23(1)(b)5.

APPEAL from an order of the circuit court for Eau Claire County: No 2022CV151 SARAH M. HARLESS, Judge. Affirmed.

Before Stark, P. J., Hruz and Gill, JJ.

Per curiam opinions may not be cited in any court of this state as precedent or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).

PER CURIAM.

¶1 Riley Fiontar, LLC, ("Riley") appeals an order dismissing its claims against the Wisconsin Department of Natural Resources and the Department's then-secretary, Preston Cole (collectively, "the DNR"). The circuit court determined that Riley's claims against the DNR are barred by the doctrine of sovereign immunity. We agree and accordingly, affirm.

BACKGROUND

¶2 The following background facts are taken from Riley's complaint and an attached "Memorandum of Understanding and Agreement" ("MOU"), and they are assumed to be true for purposes of this appeal. See Peterson v Volkswagen of Am., Inc., 2005 WI 61, ¶15, 281 Wis.2d 39, 697 N.W.2d 61. Riley owns a landfill in Eau Claire County ("the Landfill") that is no longer operational but was previously used for disposing of paper mill sludge and ash. After Riley took ownership of the Landfill, the DNR issued Riley multiple notices of noncompliance based on alleged violations of the laws governing landfills.

¶3 In February 2018, Riley and the DNR entered into the MOU "to resolve any and all past disputes" between them, "to define an annual [long-term care] budget" for the Landfill, and to "specify a reimbursement process for future [long-term care] activities ... so as to avoid to the extent possible any future disputes." The MOU required the DNR to pay Riley $293,148.56 for past-due long-term care expenses for the Landfill and for a portion of the 2018 long-term care budget for the site. In exchange for that payment, Riley agreed to waive "any and all claims against [the DNR] and the State of Wisconsin" that existed as of the MOU's effective date. The DNR, in turn agreed to abandon, withdraw, or close any notices of noncompliance that had been issued or threatened against Riley as of the MOU's effective date.

¶4 After the parties entered into the MOU, the DNR issued new notices of noncompliance to Riley. The DNR then withheld long-term care funds that were due to Riley under the schedule set forth in the MOU. In October 2021, Riley sought to resolve these issues through the MOU's dispute resolution procedures. The parties, however, were unable to resolve their disputes.

¶5 In March 2022, Riley filed the instant lawsuit against the DNR, asserting three claims. First, Riley alleged that the DNR had breached its duty of good faith and fair dealing under the MOU by:

(a) Issuing new notices [of noncompliance] related to issues that were resolved by the MOU;

(b) Failing to abide by the dispute resolution process contained within the MOU;

(c) Conducting a clandestine operation at the Landfill site and then using such operation to assert false allegations against ... Riley—without mentioning the limits and prior resolution of issues per the MOU;

(d) Continuing to allege false opinions and conclusions related to leachate collection that were debunked years[ ]ago; and

(e) not paying Riley or providing an itemized detail of missing payments.

¶6 Second, Riley alleged that the DNR had breached the MOU by failing to "pay and/or reconcile amounts due" to Riley and by engaging in "further conduct"—including that described in the previous claim—that violated the MOU's terms.

¶7 Third, Riley sought a declaratory judgment and injunctive relief. Specifically, Riley asked the circuit court to enter a declaratory judgment directing the DNR to: comply with the MOU; refrain from performing any acts inconsistent with the Landfill's design and intent; withdraw any claims, notices, or actions inconsistent with the MOU; and pay Riley any amounts due and owing for the Landfill's long-term care.

¶8 The DNR moved to dismiss Riley's complaint. The DNR argued that the doctrine of sovereign immunity barred all of Riley's claims. The DNR also argued that Riley's complaint failed to state a claim upon which relief could be granted. In addition, the DNR argued that Riley's claims against the DNR's then-secretary failed because Riley had not alleged any personal involvement by the secretary.

¶9 Following briefing and oral argument, the circuit court granted the DNR's motion to dismiss in an oral ruling. The court reasoned that under the relevant case law, "the only way [a] suit can be brought against the State is if the claims come within an exception" to sovereign immunity. The court then concluded that there was no "exception applicable to this case that would get past sovereign immunity." The court subsequently entered a written order dismissing Riley's complaint, and Riley now appeals.

DISCUSSION

¶10 "A motion to dismiss on the grounds of sovereign immunity is a challenge to a court's personal jurisdiction." Hoops Enters., Ill. LLC v. Super W Inc., 2013 WI.App. 7, ¶6, 345 Wis.2d 733, 827 N.W.2d 120. "We independently review a circuit court's denial of a motion to dismiss for lack of personal jurisdiction." Id. On review, we must accept as true all facts alleged in Riley's complaint, and we may also consider the MOU, which is "attached to the complaint and made part thereof." See Peterson, 281 Wis.2d 39, ¶15. ¶11 Sovereign immunity derives from article IV, § 27 of the Wisconsin Constitution, which states that "[t]he legislature shall direct by law in what manner and in what courts suits may be brought against the state." Klein v. DOR, 2020 WI.App. 56, ¶18, 394 Wis.2d 66, 949 N.W.2d 608 (quoting WIS. CONST, art. IV, § 27). "From this language, our supreme court has developed a rule that the state 'cannot be sued without its consent.'" Id. (citation omitted). Thus, if the legislature has not specifically consented to a suit, sovereign immunity generally deprives a court of personal jurisdiction over the state. Id. Once sovereign immunity is properly raised as a defense, the plaintiff "must point to a legislative enactment authorizing suit against the state to maintain his or her action."^[1] Turkow v. DNR, 216 Wis.2d 273, 281, 576 N.W.2d 288 (Ct. App. 1998).

¶12 Here, we agree with the DNR and the circuit court that sovereign immunity bars Riley's claims. The DNR points to two limited instances in which the legislature has consented to suits against state agencies. First, the legislature has consented to suits against state agencies under WIS. STAT. ch. 227, which constitutes "the exclusive method for judicial review of agency determinations." Turkow, 216 Wis.2d at 282. "[S]trict compliance" is required with the procedural rules set forth in ch. 227. Kosmatka v. DNR, 11 Wis.2d 558, 568,253 N.W.2d 887 (1977). Riley, however, has not identified any reviewable agency decision under Wis. STAT. § 227.52, nor did Riley file and serve a petition for judicial review in accordance with WIS. Stat. § 227.53. As such, Riley's claims against the DNR are not subject to judicial review under ch. 227.

¶13 Second, the legislature has consented to suits against the state under the "specific claims procedure" in WIS. STAT. §§ 16.007 and 775.01. State v. P.G. Miron Constr. Co., 181 Wis.2d 1045, 1053, 512 N.W.2d 499 (1994). Under § 16.007,

a party may present a claim to the state claims board, which first holds a hearing and then makes a recommendation to the legislature to grant or deny the claim. If the legislature refuses to allow a claim against the state, the claimant may then, under [§] 775.01, bring an action against the state.

P.G. Miron, 181 Wis.2d at 1053.

¶14 WISCONSIN STAT. § 775.01, however, is "limited to claims which, if valid, would render the State a debtor to the claimant." Brown v. State, 230 Wis.2d 355, 364, 602 N.W.2d 79 (Ct. App. 1999). Stated differently, the "relevant inquiry" is whether a particular claim is "an action of debt." Koshick v. State, 2005 WI.App. 232, ¶10, 287 Wis.2d 608, 706 N.W.2d 174. To qualify as an action of debt, a claim must be for a

fixed and definite sum of money, or one that can readily be made fixed and definite, either from fixed data or agreement, or by mathematical computation or operation of law. Thus, an action of debt does not lie to recover unliquidated or unascertained damages. Further, the action cannot be maintained where the sum must be ascertained by resorting to extraneous evidence.

Id., ¶11 (quoting 26 C.J.S. Debt § 1 (2001)).

¶15 Riley's complaint does not allege an "action of debt" for purposes of WIS. STAT. § 775.01. In its complaint, Riley sought money damages on its claims for breach of contract and breach of the implied duty of good faith and fair dealing in an amount "as [Riley] may prove at trial." Nothing in the complaint or in the attached MOU permits a determination of the damages that Riley is seeking. In other words, Riley is not seeking a "fixed and definite sum of money" that can be determined from the complaint and from the parties' agreement. See Koshick, 287 Wis.2d 608, ¶11 (quoting 26 C.J.S. Debt § 1 (2001)).

¶16 Regardless, even if Riley's claims could be construed as an "action of debt," Riley failed to follow the procedure required under WIS. STAT. §§ 16.007 and 775.01. The DNR asserts—and Riley does not dispute—that Riley has not filed a claim with the state claims board. As such, the state claims board has not made a recommendation to the legislature as to whether it should allow Riley's claims against the DNR,...