Wagner v. Dissing

• Decision Date: 15 October 1987
• Docket Number: No. 86-1839,86-1839
• Parties: Marvin WAGNER, Jr., Carol Wagner, and Mt. Morris-Aurora Mutual Insurance Company, Plaintiffs-Appellants, v. Leroy DISSING, Audrey Koch, and Waushara County, and General Casualty Company of Wisconsin, Defendants-Respondents.
• Court: Wisconsin Court of Appeals

Page 655

416 N.W.2d 655

141 Wis.2d 931

Marvin WAGNER, Jr., Carol Wagner, and Mt. Morris-Aurora

Mutual Insurance Company, Plaintiffs-Appellants, v. Leroy DISSING, Audrey Koch, and Waushara County, and General

Casualty Company of Wisconsin, Defendants-Respondents.

No. 86-1839.

Court of Appeals of Wisconsin.

Submitted on Briefs Sept. 14, 1987.

Opinion Released Oct. 15, 1987.

Opinion Filed Oct. 15, 1987.

Review Denied.

Philip A. Munroe and Di Renzo & Bomier, Neenah, for plaintiffs-appellants.

John R. Miller and Miller, Rogers & Owens, Portage, and Dean R. Dietrich and Mulcahy & Wherry, S.C., Wausau, for defendants-respondents.

Before GARTZKE, P.J., and EICH and SUNDBY, JJ.

EICH, Judge.

Marvin and Carol Wagner and their insurer, Mt. Morris-Aurora Mutual Insurance Company, appeal from a summary judgment dismissing their damage action against Waushara County, its insurer, and two of its employees (collectively, "the county"). The Wagners sued for damages resulting from the destruction of their barn by a fire started by R.S., a foster child in their care. They claimed that the county was negligent in investigating R.S.'s propensity to engage in destructive behavior, and that it breached a contract in which it agreed to provide the Wagners information about R.S. prior to the placement. The Wagners also contend that the county and General Casualty conspired to deny their claim for payment of the loss without considering the merits of the claim. Finally, the Wagners' insurer, Mt. Morris, asserted subrogation rights for sums paid to the Wagners under their insurance contract. The trial court granted the county's motion to dismiss the conspiracy cause of action for failure to state a claim and granted summary judgment dismissing the remainder of the complaint.

The issues are: (1) whether the notice of claim statute, sec. 893.80, Stats., imposes specific duties or standards to be observed by the county in evaluating claims; (2) whether sec. 48.627, Stats. (1983-84), precludes otherwise validly-stated actions against the county for damages suffered by foster parents as a result of acts of children placed in their care; (3) whether the Wagners' complaint states a cause of action against the county for breach of contract; and (4) whether the affidavit filed by the county in support of its motion for summary judgment states a prima facie defense to the Wagners' action.

We conclude that sec. 893.80, Stats., imposes no special duties on the county in evaluating claims, and that sec. 48.627, Stats. (1983-84), does not bar the negligence and contract claims. We also hold that the Wagners' complaint states a cause of action in negligence and contract and that the county's motion for summary judgment should have been denied because the supporting affidavit failed to state a defense. We therefore affirm that portion of the judgment granting the county's motion to dismiss the fourth cause of action in the complaint and reverse the judgment in all other respects.

I. THE MOTION TO DISMISS

A motion to dismiss tests the legal sufficiency of the complaint; and because we construe pleadings liberally on such a motion, it will be granted only if it is "quite clear that under no conditions can the plaintiff recover." Evans v. Cameron, 121 Wis.2d 421, 426, 360 N.W.2d 25, 28 (1985) (citations omitted). We believe there is no legal basis on which the Wagners could recover on their fourth cause of action.

The complaint alleges that the county and General Casualty conspired to deny the Wagners' claim "without due regard to [its] merits," thus depriving them of due process of law and of the "rights granted to them by sec. 893.80, Wis.Stats." Section 893.80, Stats., provides, among other things, that no action may be brought against a governmental subdivision, here the county, or any of its agencies or employees, unless the claimant first files a notice of claim in proper form. Once a claim is properly filed, the county may pay the claim in whole or in part or deny it. If the county fails to take any action on the claim within 120 days, it is deemed to be disallowed. Sec. 893.80(1)(b).

The Wagners' argument is grounded on the proposition that the county has a legal "duty to fairly evaluate" all such claims, and they cite Schwartz v. Milwaukee, 43 Wis.2d 119, 168 N.W.2d 107 (1969), and sec. 59.07(3), Stats., as imposing that duty. Schwartz dealt with the municipal notice-of-claim statute, sec. 62.25, Stats., and the issue was whether a notice was void because it stated a claim in an amount exceeding the statutory $25,000 limitation on municipal liability. The court ruled that:

These statutes do not provide that a claim in excess of $25,000 must be stated at that limit or be void. It is the duty of the claimant to honestly state the amount of his claim whatever it is and it is the duty of the city to verify this amount and, if there is liability, to allow it not in excess of $25,000. Id. at 125, 168 N.W.2d at 110.

We do not read the dictum in Schwartz as creating any duty on the county other than that imposed by sec. 893.80, Stats., which is to deny the claim or to pay it in whole or in part, or to allow it to be denied by operation of law after 120 days. Section 59.07(3)(a), Stats., simply states that one of the general powers possessed by county boards is to "[e]xamine and settle all accounts of the county and all claims, demands or causes of action against the county and issue county orders therefor." It imposes no specific duty on the county to evaluate notices of claims under sec. 893.80 in any particular manner.

The Wagners also cite Figgs v. City of Milwaukee, 121 Wis.2d 44, 357 N.W.2d 548 (1984), in support of their argument that a municipality has "a duty to exercise fundamental fairness in evaluating claims." Here, too, we find the reference unpersuasive. In Figgs, the city intentionally waited for two years--until after the case had been tried to a jury--to assert that the notice was inadequate on its face because it did not sufficiently itemize the claim. Id. at 55, 357 N.W.2d at 554. The court's reference to the need for "[f]undamental fairness ... in the handling and disposition of claims," had nothing to do with evaluation. Rather, the comment was directed to the city's two-year delay in raising a defense known to it all along. Id. at 56, 357 N.W.2d at 555. Nothing of the sort is claimed in this case.

Section 893.80(1), Stats., bars a potential plaintiff from bringing suit against the county unless two conditions precedent are met: (1) the filing of a written notice of claim within 120 days of the event giving rise to the claim; and (2) the county's disallowance of the claim. Until the claim is disallowed, the plaintiff has no right to bring an action. The county's failure to grant or deny the claim within 120 days after its presentation is the functional equivalent of "disallowance" for purposes of the statute. Section 893.80(1)(b) is an "automatic" disallowance provision which prevents claims from languishing indefinitely and assures the plaintiff the opportunity to seek other forms of relief within a reasonable time. It does not create a right in the claimant to have the claim considered in any specific manner or fashion.

Indeed, the Figgs court acknowledged that the only purpose of notice-of-claim statutes is to "afford[ ] the municipality an opportunity to compromise and settle [the] claim without litigation." Id. at 53, 357 N.W.2d at 553, quoting from Gutter v. Seamandel, 103 Wis.2d 1, 11, 308 N.W.2d 403, 408 (1981). We decline the Wagners' invitation to add to the statute or read additional rights into the existing statutory language. Nor are we willing to extend the principles of insurance company "bad faith" tort liability to municipal claim cases. The Wagners' argument on this point is largely undeveloped, and we decline to consider it further. The trial court correctly dismissed the fourth cause of action in the Wagners' amended complaint.

II. SUMMARY JUDGMENT

We turn to the summary judgment issues. The procedures applicable to review of summary judgments are summarized in In re Cherokee Park Plat, 113 Wis.2d 112, 116, 334 N.W.2d 580, 582-83 (Ct.App.1983). We look first to the complaint to determine whether it states a claim for relief. Only if it does, do we consider whether the responsive pleading joins the issue. If the issue is joined, we then look to the affidavits of the moving party to see whether they contain evidentiary facts sufficient to state a prima facie case for relief or, if the defendant is the moving party, a prima facie defense. If we so determine, we next examine the opposing party's affidavits to see whether there is a genuine issue of material fact, or whether reasonable conflicting inferences may be drawn from undisputed facts. If either question is answered in the affirmative, a trial is necessary and disposition of the case on summary judgment is improper. Only if each test is met along the way is summary judgment an appropriate remedy.

The first question is whether the Wagners' complaint states a cause of action, and we are guided in this inquiry by the same rules applicable to motions to dismiss for failure to state a claim upon which relief may be granted. The first cause of action alleges that the county, through its employees, was "negligent in failing to properly evaluate and investigate [R.S.] to ascertain [his] propensities to commit destructive and illegal acts such as the fire...." The Wagners claim that, as a result of this negligence, the county should be held liable for the $48,045 loss they suffered when R.S. started the fire that destroyed their barn. The second cause of action alleges that the county breached the terms of a "Foster Home Agreement" which states, among other things, that the county "AGREES ... [t]o provide all pertinent reliable information available to help [the] foster parents decide whether or not to accept this placement." The third cause...