Wisconsin Telephone Co. v. City of Milwaukee
| Decision Date | 31 October 1978 |
| Docket Number | 76-262 and 76-711,76-261,Nos. 76-260,s. 76-260 |
| Citation | 271 N.W.2d 362,85 Wis.2d 447 |
| Parties | WISCONSIN TELEPHONE COMPANY and Jared Corporation, Respondents, v. CITY OF MILWAUKEE, Appellant. WISCONSIN TELEPHONE COMPANY and Lowell Land Company, Respondents, v. CITY OF MILWAUKEE, Appellant. WISCONSIN TELEPHONE COMPANY and Arthur N. Peters, Ambrose T. Peters, Robert P. Peters and Mary Louise Kaempfer, Respondent, v. CITY OF MILWAUKEE, Appellant. WISCONSIN TELEPHONE COMPANY et al., Plaintiffs-Respondents, v. CITY OF MILWAUKEE, Defendant-Appellant. |
| Court | Wisconsin Supreme Court |
James B. Brennan, City Atty., and Walter J. Schutz, Principal Asst. City Atty., for appellant.
Robert A. Christensen, Foley & Lardner, and Kenneth E. Millard, Milwaukee, for respondents.
These cases are consolidated for purpose of appeal because they all involve the same primary plaintiff, the Wisconsin Telephone Company, the same defendant, the City of Milwaukee, and the same issue. The issue is:
Does exemption from property taxation under the legislature's plan of "license fees in lieu of ad valorem taxes" taxation established by sec. 76.38(8), Stats., extend to property leased by the Wisconsin Telephone Company from a non-exempt private lessor-owner and used and useful in the operation of the business of the telephone company in this state?
In the first three cases the real property in question consists of three separate parcels and is owned by three owner-lessors. All three parcels are located in the City of Milwaukee and leased to the plaintiff-respondent Wisconsin Telephone Company prior to the May 1, 1974 assessment date. All three properties are used and useful in the operation of the business of the telephone company in this state.
In the first action the Jared Corporation is owner-lessor. The basement portion of the building in question is leased to the telephone company and consists of 30 percent of the entire area of the building. It provides for one primary term of ten years commencing November 1, 1972, one automatic five-year renewal term and, on expiration of the renewal term, a month-to-month tenancy. The original annual rent was set at $25,000, payable in monthly installments. The landlord-lessor agreed to construct the premises to tenant-lessee's specifications, and to be responsible for all exterior maintenance and major repairs. The tenant-lessee is responsible for janitorial services, routine maintenance and all utility charges. The lease includes a "hold harmless" provision. The lease also contains a tax clause making lessee responsible for 30 percent of all real estate in excess of the amount assessed for the base year 1970. It also provides for a proportionate rent reduction if the property is exempted at any time from real estate tax.
In the second case the Lowell Land Company is the owner-lessor. This lease is for a one-story building (144 ft. X 122 ft. approx.) and adjacent parking area (50 ft. X 122 ft. approx.). It is for a term of five years from March 1, 1970, automatically renewable for another five-year period. Originally executed by the Humphrey Children's Trust, it was assigned to the Lowell Land Company in 1971. $27,000 was the original annual rent, to be paid monthly. The responsibilities of the parties with respect to maintenance and management of the property are substantially the same as those in the Jared lease outlined above. Real estate taxes are the responsibility of the lessor. However, any increase over the amount assessed in the base year 1969, not due to improvements by the lessor, is to be paid by the lessee. Furthermore, if the property should at any time be exempted from real estate taxes, the rent is to be reduced by the proportionate amount of taxes attributable to the leased premises for the year 1970.
In the third case, Arthur N. Peters, Ambrose T. Peters, Robert P. Peters and Mary Louise Kaempfer are the owner-lessors. The subject of this lease is a one-story concrete block building (120 ft. X 140 ft.) with a surrounding lot (316 ft. X 276 ft. X 145 ft. X 332 ft.). The original term of the lease was for twenty years from March 25, 1947. By supplemental agreement dated July 20, 1964, this was extended to August 19, 1982. Monthly rent, originally $525, was increased to $750 by the same supplemental agreement. The lessor-lessee division of responsibilities followed the usual landlord-tenant agreement summarized above. All taxes levied against the property are payable by the lessee.
In 1974 the City of Milwaukee assessed and levied real estate taxes totalling $38,672.34 on the property in question: $25,312.72 for the Jared property, $6,896.62 for the Lowell property, and $6,463 for the Peters' property. The taxes for the first two properties were paid under protest on January 31, 1975; those for the third property on December 30, 1974.
Plaintiffs (lessor-owners and lessee-telephone company) in all three cases filed claims with the city for refunds on March 10, 1975. On May 6, 1975, the city notified them that all claims had been disallowed.
Plaintiffs then commenced these actions for recovery of the unlawful tax pursuant to sec. 74.73, Stats. Summons and complaint were filed on June 23, 1975. On July 15, 1975, the city (defendant-appellant) demurred to all three complaints on the ground that they failed to state facts sufficient to constitute a cause of action.
A hearing was held before Judge JACKSON on August 12, 1975. On June 25, 1976, the demurrers in all three actions were overruled. Per stipulation dated October 20, 1975, the three cases were consolidated.
The City of Milwaukee filed a notice of appeal dated November 5, 1976, from the order overruling the demurrers in each action.
The fourth case, No. 76-711, was heard by Judge DECKER. This case involves the same issue as the cases above and deals with the same fact situation with two differences: first, the taxes in question are those imposed on the three properties described above for 1975; second, the parties in this action originally included an additional plaintiff/lessor-owner, the Megal Development Corporation. 1
In 1975, the City of Milwaukee, maintaining the position it had adopted in 1974 regarding the status of property leased by the telephone company, again imposed real estate property tax on the three properties: $19,450 for the Jared site, $7,026.85 for the Lowell site, and $7,943.36 2 for the Peters' site. The taxes were once again paid under protest and claims for a refund filed with the city. No action having been taken by the city within 90 days of the filing date (May 20, 1976), the three claims are deemed disallowed. 3
A joint action by the property owners and Wisconsin Telephone Company for recovery of unlawful taxes was brought in the circuit court for Milwaukee County. The summons and complaint were filed on September 20, 1976. On October 15, 1976, the city answered the complaint and filed a motion to dismiss for failure to state a claim upon which relief could be granted. Plaintiffs countered with a motion for summary judgment dated October 29, 1976. An affidavit filed with the motion declared that on May 17, 1976, Wisconsin Telephone Company paid $29,838,827.99 to the state in telephone license fees imposed under sec. 76.38(8), Stats. The city filed a motion to dismiss dated December 7, 1976 for failure to state a claim.
On January 17, 1977, a hearing was held on the matters before the Circuit Court for Milwaukee County, JOHN A. DECKER, Circuit Judge. All factual disputes having been settled, the only issue before the court was a question of law, I. e., whether the leased properties occupied by the telephone company were exempt from property taxation by the city.
On February 8, 1977, the court filed a memorandum decision granting plaintiffs' motion for summary judgment and denying the city's motions to dismiss and for summary judgment. In its decision the court made the following analyses of the issue: Sec. 76.38(8), Stats., was unambiguous; its clear language provided the exemption to property used and useful in the operation of the telephone company regardless of actual ownership of the site; this interpretation furthered the legislature's overall statutory "license fees in lieu of taxation" scheme even if sec. 76.38(8) were considered ambiguous and sec. 70.112(4) were looked to for clarification, the construction given sec. 76.38(8) was not inconsistent with that statute's terms.
Judgment for the plaintiffs was entered on March 10, 1977 in the amount of $33,915.98, with interest of $1,837.12 and costs of $124.
The city appealed to this court from the whole of the judgment. Notice of appeal was filed in the circuit court on May 25, 1977.
To resolve the tax exemption issue we must construe the two following statutes:
The plaintiffs-respondents (lessor-owners and lessee-telephone company) maintain that sec. 76.38(8),...
To continue reading
Request your trial
-
Town of LaPointe v. Madeline Island Ferry Line, Inc.
...to be liberally construed in favor of the person required to pay taxes in the substituted license form. Wisconsin Tel. Co. v. Milwaukee, 85 Wis.2d 447, 456, 271 N.W.2d 362, 366 (1978). Under sec. 70.15, Stats., any watercraft employed in interstate traffic is only required to pay to the tow......
-
Noss v. Hagen
...601 (1943).1 The Wisconsin Supreme Court recently indicated that "bundle of sticks" is a legal philosophy. Wisconsin Tel. Co. v. City of Milwaukee, 271 N.W.2d 362, 367 (Wis.1978). See other definitions of terms in Sox v. Miracle, 35 N.D. 458, 160 N.W. 716 (1916).2 See 4 Summers, Oil and Gas......
-
Chileda Institute, Inc. v. City of La Crosse
...of" within sec. 70.112(4), Stats., to encompass leasehold interests of the party seeking exemption in Wisconsin Tel. Co. v. Milwaukee, 85 Wis.2d 447, 271 N.W.2d 362 (1978). That case is inapplicable to these facts. Section 70.112(4) accords a general property tax exemption to property alrea......
-
TDS Realestate Inv. Corp. v. City of Madison
...to traditional taxation in Wisconsin as long ago as the second half of the nineteenth century." Wisconsin Tel. Co. v. Milwaukee, 85 Wis.2d 447, 455, 271 N.W.2d 362, 365-66 (1978) (footnote omitted). The purpose of these devices, which are applicable to other utilities as well as telephone c......