Walker v. University of Wisconsin Hospitals

• Decision Date: 22 November 1995
• Docket Number: No. 94-3403,94-3403
• Citation: 542 N.W.2d 207,198 Wis.2d 237
• Parties: , 106 Ed. Law Rep. 320 Amy L. WALKER, Plaintiff-Appellant, Transportation Insurance Company, Plaintiff, v. UNIVERSITY OF WISCONSIN HOSPITALS, Properly known as the Board of Regents of the University of Wisconsin System, Julie Swedarsky, Elaine Snyder, Laurie Losenegger, Dr. Mark Moffet, Dr. Greg Dodge, Dr. Victoria Shampaine, Mary Ann Bird Roelke and John or Jane Doe, Defendants-Respondents.
• Court: Wisconsin Court of Appeals

Page 207

542 N.W.2d 207

198 Wis.2d 237, 106 Ed. Law Rep. 320

Amy L. WALKER, Plaintiff-Appellant Transportation Insurance Company, Plaintiff, v. UNIVERSITY OF WISCONSIN HOSPITALS, Properly known as the Board of Regents of the University of Wisconsin System Julie Swedarsky, Elaine Snyder, Laurie Losenegger, Dr. Mark Moffet, Dr. Greg Dodge, Dr. Victoria Shampaine, Mary Ann Bird Roelke and John or Jane Doe, Defendants-Respondents.

No. 94-3403.

Court of Appeals of Wisconsin.

Submitted on Briefs Sept. 8, 1995.

Opinion Released Nov. 22, 1995.

Opinion Filed Nov. 22, 1995.

For the plaintiff-appellant the cause was submitted on the briefs of Douglas W. Kammer of Kammer Law Office, Chartered, Portage.

For the defendants-respondents the cause was submitted on the brief of James E. Doyle, Attorney General, and Steven D. Ebert, Assistant Attorney General.

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

EICH, Chief Judge.

Amy L. Walker, a nurse's aide working at University of Wisconsin Hospitals, ¹ was injured when a patient she was attending became violent and assaulted her. She sued the hospital, the University of Wisconsin Board of Regents and various hospital employees for money damages claiming, among other things, that Mary Ann Roelke, an occupational therapist employed by the hospital, was negligent in the manner in which she applied physical restraints to the patient. ²

The trial court granted summary judgment dismissing the action, concluding: (1) the hospital, as an arm or agency of the state, was entitled to sovereign immunity; (2) Roelke, as a state employee acting within the scope of her employment, was also immune from suit under the doctrine of "public employee immunity," as discussed in several opinions of the supreme court and this court.

We conclude that the trial court properly dismissed the action against the hospital and the board of regents, but that it erred in granting summary judgment dismissing Walker's action against Roelke. We therefore affirm in part and reverse in part and remand to the trial court for further proceedings.

The facts are not in dispute. Walker was assigned to "sit" with a patient, Gerald Brainard, on November 7, 11 and 12, 1991. Brainard was a liver-transplant patient who had returned to the hospital a year after his surgery. He was alleged to have a history of behavioral and brain disorders which was known to hospital personnel.

When Walker began sitting with Brainard he was in restraints in his bed and was not lucid. And while the first two days of her assignment were otherwise uneventful, Walker did note that Brainard was loud and "extremely uncooperative" and that on more than one occasion he was able to free his arms from their restraints, throwing things around the room and pulling items from tables and carts.

During Walker's shift on November 12, Roelke came to Brainard's room to exercise his limbs. She released his arms and legs from the restraints and when he became uncooperative, she discontinued the exercises, reattached the restraints and left the room.

Sometime thereafter Brainard asked Walker for a glass of water and when she approached his bed he freed his hands, grasped Walker and began punching her in the head. She claimed in her lawsuit that she had not been told that Brainard was dangerous and combative, despite the hospital's knowledge of these facts. Other facts will be discussed below.

I. Sovereign Immunity

Sovereign immunity in Wisconsin derives from Article IV, Section 27, of the Wisconsin Constitution, which provides, "The legislature shall direct by law in what manner and in what courts suits may be brought against the state," and which has been interpreted to require that the state must expressly consent to be sued. Busse v. Dane County Regional Planning Comm'n, 181 Wis.2d 527, 534, 511 N.W.2d 356, 359 (Ct.App.1993). ³ As a general rule, the state's immunity extends to its arms and agencies, although we have recognized that the legislature may create an agency with such an array of " 'independent proprietary powers or functions' " that it becomes sui juris--" 'sufficiently independent of the state to be sued as such' "--and that when this occurs, the state has waived its sovereign immunity with respect to the agency. Id. at 534, 511 N.W.2d at 359 (quoting Kegonsa Joint Sanitary Dist. v. City of Stoughton, 87 Wis.2d 131, 143-44, 274 N.W.2d 598, 604 (1979)).

There is no question that the board of regents is an arm or agency of the state for sovereign immunity purposes. Lister v. Board of Regents, 72 Wis.2d 282, 292-93, 240 N.W.2d 610, 618 (1976). Walker argues, however, that University Hospitals, even though it is an entity "establish[ed] by regents as directed in § 36.25(13), STATS.," is not. Citing Majerus v. Milwaukee County, 39 Wis.2d 311, 159 N.W.2d 86 (1968), one of the leading cases on the "independent-going-concern" exception to the rule of sovereign immunity, Walker maintains that the hospital is just such an entity and thus may not be considered an arm or agency of the state for purposes of the rule.

The question in Majerus was whether the Wisconsin State Armory Board was ineligible to claim sovereign immunity. In order to resolve the issue, the supreme court looked to the board's statutory designation and powers, which included: (1) its designation as a " 'body politic and corporate' "; (2) its statutory authorization "to sue and be sued" in its own name; (3) its power to "convey real estate and dispose of personal property without express authority from the state"; (4) its power to "hold and disburse its own funds independent of state warrants"; (5) its power to "borrow money and issue and sell bonds and other evidences of indebtedness to accomplish its purposes"; and (6) its ability to pay its debts out of rents and interest received from its acquired property. Id. at 314-15, 159 N.W.2d at 87-88 (quoted source omitted). The court concluded that such a plethora of powers rendered the board sui juris, and thus ineligible to assert the defense of sovereign immunity. Id. at 315, 159 N.W.2d at 87-88.

The hospital was established by the UW Board of Regents under § 36.25(13), STATS., for the purpose of delivering health care, instructing medical students and other health professionals, supporting health care research and providing assistance to health care programs and personnel throughout the state. Unlike the armory board, the hospital is not designated as a "body politic and corporate," and it possesses neither the express power to sue and be sued nor any statutory authority to borrow money. ⁴ All hospital leases and purchases of equipment, goods and services are subject to state-directed bidding procedures and other rules applicable to other state agencies, as are its personnel and budgeting decisions.

Additionally, both the supreme court and this court have recognized that a primary test for sovereign immunity is "whether a judgment for the plaintiffs on their claims ... would require payment from state funds." If so, the action is barred. Lister v. Board of Regents, 72 Wis.2d at 292, 240 N.W.2d at 617; see Grall v. Bugher, 181 Wis.2d 163, 168, 511 N.W.2d 336, 338 (Ct.App.1993), rev'd on other grounds, 193 Wis.2d 65, 532 N.W.2d 122 (1995). Walker argues that any judgment against the hospital in this case would not implicate state funds because the hospital obtains liability coverage through its participation in a state "risk pool." She infers that because the hospital contributes money from its revenues to the pool, and because the pool is used to pay claims, no "state funds" would be used to pay any judgment she may obtain against the hospital. The record, however, provides no support for the inference. The state risk management director stated in his deposition that any judgments taken against the hospital would be paid from the state treasury under § 20.865(1), STATS. ⁵ According to the director, "The appropriation from the state treasury made in sec. 20.865(1), Wis.Stats., is the only source of funds available to pay a judgment against any of the defendants in this lawsuit."

Even so, Walker maintains that other facts establish that the hospital is, like the armory board in Majerus, an independent agency which does not share in the state's immunity. ⁶ She first points to a provision in the bylaws of the hospital's board of trustees giving the board authority to "govern[ ]" the hospital, subject to the authority of the board of regents and the UW president and chancellor. We glean from that provision that the hospital's governance is indeed subject to state control through the regents of the university.

Next, referring generally to a collection of two years' worth of minutes of board meetings, she asserts that "[a] review of the[se] minutes ... bears out the reality" that the hospital administrator, not the board, runs the hospital, apparently without control of either the hospital board or the board of regents. It is an argument we need not consider in light of the absence of citations to the record for the underlying factual assertions. ⁷

Walker next contends that the hospital cannot be considered an arm of the state because, according to the deposition testimony of a hospital financial officer, Peter Christman, physicians who work at the hospital are not state employees but rather are "employees" of Affiliated University Physicians (AUP), a private entity with no relationship to the hospital. Christman's testimony, however, was not that the physicians are "employed" by AUP but that AUP's "staff" are not state employees. AUP, according to the affidavit of one of its officials, Clara Scolare, is a nonprofit corporation that provides recordkeeping, billing and collection services to physicians who are faculty members of the UW medical school and who comprise the hospital's medical staff. The faculty physicians practice at the hospital and its clinics through various partnerships organized pursuant to a...