Weis v. Bd. of Regents of the Univ. of Wis. Sys.

• Decision Date: 27 July 2011
• Docket Number: Case No. 10–C–1168.
• Citation: 837 F.Supp.2d 971,281 Ed. Law Rep. 315
• Parties: Stephen L. WEIS and Donna H. Weis, as Co–Special Administrators and Representatives of the Estate of Leonard Weis, and Weis Earth Science Museum, Inc., Plaintiff, v. BOARD OF REGENTS OF THE UNIVERSITY OF WISCONSIN SYSTEM, James W. Perry, University of Wisconsin Fox Valley Foundation, Inc., Outagamie County, and Winnebago County, Defendants.
• Court: U.S. District Court — Eastern District of Wisconsin

837 F.Supp.2d 971

281 Ed. Law Rep. 315

Stephen L. WEIS and Donna H. Weis, as Co–Special Administrators and Representatives of the Estate of Leonard Weis, and Weis Earth Science Museum, Inc., Plaintiff,

v.BOARD OF REGENTS OF THE UNIVERSITY OF WISCONSIN SYSTEM, James W. Perry, University of Wisconsin Fox Valley Foundation, Inc., Outagamie County, and Winnebago County, Defendants.

Case No. 10–C–1168.

United States District Court,

E.D. Wisconsin.

July 27, 2011.

Andrew J. Rossmeissl, Charles D. Koehler, Herrling Clark Law Firm Ltd., Appleton, WI, for Plaintiff.

Charlotte Gibson, Nadim Sahar, Wisconsin Department of Justice, Office of the Attorney General, Madison, WI, for Defendants.

DECISION AND ORDER

WILLIAM C. GRIESBACH, District Judge.

This action arises out of a dispute over ownership and control of the Weis Earth Science Museum, which is housed on the campus of the University of Wisconsin–Fox Valley (“UWFox”)in Menasha, Wisconsin. Plaintiffs Leonard Weis (now deceased) and Weis Earth Science Museum, Inc., have asserted state and federal unconstitutional takings claims, along with various other state law claims, against the Board of Regents of the University of Wisconsin System, UWFox Dean James W. Perry, and University of Wisconsin–Fox Valley Foundation, Inc. (“the Foundation”). Plaintiffs also seek declaratory and injunctive relief. Winnebago and Outagamie Counties are named as necessary parties because they are allegedly owners of the real estate and improvements upon and within which the Museum and its assets are located.

Though originally filed in state court, the case was removed pursuant to 28 U.S.C. § 1441 with an assertion of federal jurisdiction under 28 U.S.C. §§ 1331 and 1343. The case is before the Court on the motion of Board of Regents and Dean Perry (collectively, “the State Defendants”) for partial dismissal pursuant to Fed.R.Civ.P. 12(b)(1), (2), and (6). As to the Board of Regents, the motion seeks dismissal of each of the state law claims on the ground of sovereign immunity. It seeks dismissal of the complaint in its entirety against Dean Perry.

I. BACKGROUND

The allegations of the complaint, taken as true for now, provide the facts upon which the motion to dismiss must be decided. See United States v. Grossman, 501 F.3d 846, 848 (7th Cir.2007) (“In ruling on a motion to dismiss, we construe all well-pleaded allegations of the petition as true and draw all reasonable inferences in favor of the plaintiff.”). According to the complaint, the Weis Earth Sciences Museum was established in late 1999 or early 2000 by an express or implied agreement between Leonard Weis, Dean Perry, and the Board of Directors of the Foundation, which is a philanthropic organization that supports UWFox. (Compl. ¶ 17.) The museum was initially operated as an unincorporated nonprofit association pursuant to Chapter 184 of the Wisconsin Statutes “for the purpose of collecting, displaying, purchasing, and selling various minerals and related materials and educating the public....” (Compl. ¶ 3.) On October 25, 1999, the Winnebago County Board of Supervisors passed a resolution authorizing the construction of the Museum wing of the UWFox campus using only donated funds, primarily from Leonard Weis. The resolution provided that “[u]pon completion of the museum and classroom space, the facilities will become the joint property of Winnebago and Outagamie County.” (Compl. ¶¶ 18, 19.) The donations that were to be made by Weis and others for the benefit of the museum were to be funneled through the Foundation for tax purposes but were to be used “for the specific benefit of the then-unincorporated non-profit association known as the Weis Earth Science Museum.” (Compl. ¶ 20.) In addition, the Museum is the Foundation's sole beneficiary for all mineral collections and donations related to the Museum. (Compl. ¶ 14.)

Weis prohibited his donations from being owned or used for the benefit of UWFox or the UW System. Weis' donations were also conditioned upon the Museum being operated independently of UWFox except for certain cooperative agreements. One such agreement concerned the Museum Director. Weis agreed to pay the salary of the Director and established an endowment that made periodic payments to the Foundation that were to be used for that purpose. The Director was to be employed by UW System, however, so that he would be eligible for health care and other employee benefits from the State. Notwithstanding this arrangement, the Museum Director was recognized as an employee of the Museum who was hired by the Museum's Board of Directors. (Compl. ¶¶ 21, 22, 24, 25.)

For the first ten years, the Museum operated as an independent unincorporated non-profit association. Significant decisions concerning the Museum's operations were made by the Museum Director, subject to the approval of the Museum's Board of Advisors. Prospective donors to the Museum were instructed to make their donations via the Foundation for tax purposes, but the funds would then be turned over to the Museum Director who would then send thank you letters on Museum stationary acknowledging the donations and noting that the money would be used for tax exempt purposes. Pursuant to another cooperative agreement, the UWFox treasurer maintained the Museum's funds in segregated financial accounts used only for the benefit of the Museum. In sum, the complaint alleges that the Museum building, financial accounts, exhibits, specimens, intellectual property, and other assets are owned by the Museum or the Foundation for the benefit of the Museum. (Compl. ¶¶ 26–31.)

The State Defendants see things differently. In the course of an exchange of letters between the parties in the spring of 2010, the State Defendants took the position that the Museum's holdings are in their entirety owned by the UW System and that the Board of Regents asserts full control over the Museum's affairs. (Compl. ¶ 33.) At Dean Perry's direction in May of 2010, UWFox began cataloguing the Museum's assets, including the collections and specimens. He directed the Museum to use the UWFox's purchasing procedures and ordered the Museum Director to place the UWFox logo on the Museum's letterhead and website. In June 2010 Perry instructed the Museum Director to cease all communication with the Museum's Board of Directors. (Weis Earth Science Museum, Inc., was formed in March 2010, and was assigned all interests, assets, claims, and rights of the unincorporated association.) On July 1, 2010, Dean Perry directed UW System accountants to audit the Museum's accounts and accounting procedures. Finally, the Museum Director was furloughed and a portion of the payments made by the endowment Weis established to pay his salary were used for non-Museum purposes. (Compl. ¶¶ 34–40.)

Based on these allegations, Plaintiffs have asserted claims against Dean Perry and the Board of Regents for unconstitutional taking without compensation, conversion, and unjust enrichment. Additional claims for breach of contract, and promissory estoppel are asserted against the Foundation, as well as Dean Perry and the Board of Regents, and a claim seeking the imposition of a constructive trust on the Museum assets is asserted against the Board of Regents and the Foundation. Finally, Plaintiffs have listed as separate claims a request for punitive damages (Fifth Cause of Action), a request for an injunction enjoining the defendants from disposing of Museum assets (Sixth Cause of Action) and a request for a declaration of the Museum's right to possession and control Museum assets and funds donated for its use, and to operate at its present location in perpetuity (Seventh Cause of Action).

Plaintiffs' assertion of separate claims for punitive damages, and injunctive and declaratory relief are confusing. Punitive damages, injunctions and declarations are forms of relief or remedies, not stand-alone claims, and a plaintiff's right to any one of these remedies is dependent on proof of a cognizable claim or a legal theory entitling him to such relief. A bare claim for injunctive relief apart from the legal claim or theory which entitles one to such relief is not cognizable. See Kartman v. State Farm Mut. Auto. Ins. Co., 634 F.3d 883, 889 (7th Cir.2011) (“This technique of recasting a straightforward claim for damages as a claim for damages and injunctive relief runs into trouble on some basic principles of common law-most fundamentally that a claim of injury is not cognizable unless it results from the breach of a recognized legal duty owed to the plaintiff.”). Plaintiffs concede there is no basis for an award of punitive damages, so that claim will be dismissed outright. In an effort to clarify the case, the requests for injunctive and declaratory relief will also be dismissed as separate claims but will remain in the complaint as part of the ad damnum clause or prayer for relief.

The motion to dismiss filed by the State Defendants, as noted above, is directed to the complaint in its entirety against Dean Perry, and only to the non-takings claims against the Board of Regents. With respect to these claims, the State Defendants argue the Board of Regents is immune from suit under the Eleventh Amendment to the United States Constitution and Article IV, section 27 of the Wisconsin Constitution. As to Dean Perry, they argue that the contract-related claims fail as a matter of law and that the conversion claim should be dismissed because Plaintiffs failed to properly serve him with a notice of claim as required under Wis. Stat. § 893.82.

II. ANALYSIS

A. Claims Against the Board of Regents

The State Defendants first argue that Plaintiff's claims against the Board of Regents are barred by the Eleventh Amendment. The Eleventh Amendment states: “The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or Citizens...