PUBLISHED OPINION
Case No.: 95-2733
†Petition for
Review Filed
Complete Title
of Case:
THOMAS N. TOMCZAK and
MARY ANN TOMCZAK,
Plaintiffs-Respondents,
v.
PETE L. BAILEY and AMERICAN
SURVEYING COMPANY, INC.,
Defendants-Appellants,†
RANDOLPH L. RAFALSKI
and
INTERLINE SURVEYING
SERVICES,
INC.,
Defendants,
MILDRED B. WOHLFARD,
Defendant-Third
Party Plaintiff,
v.
EQUITABLE/STEFANIAK
REALTY,
Third
Party Defendant.
Submitted on Briefs: September 3, 1996
COURT COURT OF APPEALS OF WISCONSIN
Opinion Released: November 13, 1996
Opinion Filed: November
13, 1996
Source of APPEAL Appeal from an order
Full Name JUDGE COURT: Circuit
Lower Court. COUNTY: Racine
(If
"Special", JUDGE: DENNIS FLYNN
so indicate)
JUDGES: Brown, Nettesheim and Snyder, JJ.
Concurred:
Dissented:
Appellant
ATTORNEYSOn behalf of the defendants-appellants, the cause was
submitted on the briefs of Stephen L. Fox of Schmidt & Rupke,
S.C. of Milwaukee.
Respondent
ATTORNEYSOn behalf of the plaintiffs-respondents, the cause was
submitted on the brief of Robert H. Bichler and Brenda J. Stugelmeyer
of Hostak, Henzl & Bichler, S.C. of Racine.
Other
ATTORNEYSAn amicus curiae brief on behalf of The Wisconsin
Society of Land Surveyors was filed by Norman C. Anderson and Jennifer
S. McGinnity of Wheeleer,
Van Sickle & Anderson, S.C. of Madison.
|
COURT OF
APPEALS DECISION DATED AND
RELEASED November
13, 1996 |
NOTICE |
|
A party may file with the Supreme Court a petition to review an
adverse decision by the Court of Appeals.
See § 808.10 and Rule
809.62, Stats. |
This opinion is subject to further editing. If published, the official version will appear in the bound
volume of the Official Reports. |
No. 95-2733
STATE OF WISCONSIN IN
COURT OF APPEALS
THOMAS
N. TOMCZAK and
MARY
ANN TOMCZAK,
Plaintiffs-Respondents,
v.
PETE
L. BAILEY and AMERICAN
SURVEYING
COMPANY, INC.,
Defendants-Appellants,
RANDOLPH L. RAFALSKI and
INTERLINE SURVEYING SERVICES,
INC.,
Defendants,
MILDRED B. WOHLFARD,
Defendant-Third Party Plaintiff,
v.
EQUITABLE/STEFANIAK REALTY,
Third Party Defendant.
APPEAL
from an order of the circuit court for Racine County: DENNIS FLYNN, Judge. Affirmed
and cause remanded.
Before
Brown, Nettesheim and Snyder, JJ.
NETTESHEIM,
J. The issue on appeal is whether the discovery
rule adopted in Hansen v. A.H. Robins, Inc., 113 Wis.2d 550, 335
N.W.2d 578 (1983), applies to the time limitation for commencement of an action
against a land surveyor set out in § 893.37, Stats. The statute
bars a negligence action against a land surveyor brought more than six years
after completion of the survey.
We
have previously granted the petition of Pete L. Bailey, a land surveyor, and
his employer, American Surveying Company, Inc. (Bailey), seeking leave to
appeal the trial court’s order denying their motion for summary judgment. The motion sought to dismiss the complaint
of Thomas N. and Mary Ann Tomczak as time barred under § 893.37, Stats.
The
Tomczaks' action seeks damages resulting from an alleged erroneous survey
performed by Bailey in 1988. By summary
judgment, Bailey sought dismissal because the action was brought beyond the
six-year limitation period set out in § 893.37, Stats. The Tomczaks
responded that their action was timely because they commenced it within six
years after discovering that the survey was erroneous. The trial court ruled that the discovery
rule applied to actions under the statute, and the court denied Bailey's motion
for summary judgment.
We
conclude the discovery rule is applicable to actions under § 893.37, Stats.
Accordingly, we affirm the denial of summary judgment.
FACTS
In
August 1988, Bailey surveyed and staked the boundaries of lots 96 and 97
located in the unrecorded plat of Elm Island in Waterford, Wisconsin. The following month, the Tomczaks negotiated
with Mildred B. Wohlfard and her real estate agent for the purchase of two
lots. During these negotiations,
Wohlfard or her real estate agent pointed out to the Tomczaks the survey
markers placed by Bailey. They also
provided the Tomczaks with a copy of Bailey's survey. The Tomczaks then purchased the lots.
In
1989, the Tomczaks commenced the construction of a house and patio on the
property. Their builder hired a
different survey company to confirm the layout of the property. This surveyor relied on the stakes placed by
Bailey in confirming that the boundaries of lots 96 and 97 existed as marked. The builder then completed the construction.
In
June 1994, Charles and Kim Andersen purchased the land adjacent to the
Tomczaks' property. In conjunction with
this purchase, the Andersens had their property surveyed by John F. Degen to
confirm its boundaries. Degen's survey
revealed that the Tomczaks' house, deck, patio and pier extended onto the
Andersens' property. In fact, according
to Degen, the boundaries of lots 96 and 97 as marked by Bailey were actually
the boundaries of lots 97 and 98 of the unrecorded plat of Elm Island.
As
a result, in October 1994, the Andersens initiated an action for trespass and
encroachment against the Tomczaks. The
Tomczaks in turn commenced this negligence action against Bailey seeking their
attorney's fees and other damages incurred in defending the Andersens'
action. Bailey moved for summary
judgment contending that the Tomczaks’ claim was time barred under
§ 893.37, Stats. The Tomczaks opposed the motion, invoking
the discovery rule of Hansen.
Since they did not learn of Bailey's alleged negligence until October
1994 when the Andersens filed suit against them, the Tomczaks contended that
the limitation period did not begin to run until the time of that discovery.
The
trial court held that the discovery rule applied to actions under
§ 893.37, Stats. Therefore, the court ruled that the
Tomczaks' action was not barred. Bailey
appeals.
STANDARD OF REVIEW
The
appellate issue requires us to apply a set of undisputed facts to
§ 893.37, Stats. That exercise presents a question of law
which we review de novo. Shanak
v. City of Waupaca, 185 Wis.2d 568, 585, 518 N.W.2d 310, 316 (Ct. App.
1994). The same standard of review
applies to a trial court's summary judgment determination. Tara N. v. Economy Fire & Casualty
Ins. Co., 197 Wis.2d 77, 84, 540 N.W.2d 26, 29 (Ct. App. 1995). Despite our de novo standard of review, we
value a trial court's decision on a question of law. Scheunemann v. City of West Bend, 179 Wis.2d 469,
475-76, 507 N.W.2d 163, 165 (Ct. App. 1993).
DISCUSSION
Introduction
We
begin our discussion by explaining the three topics which will dominate our
analysis: (1) the Hansen
discovery rule, (2) the difference between statutes of limitations and statutes
of repose, and (3) § 893.37, Stats.
1. The Discovery Rule: The Wisconsin Supreme Court first adopted
the discovery rule in Hansen.
Under the discovery rule, a claim does not accrue until the injury is
discovered or in the exercise of reasonable diligence should be
discovered. Hansen, 113
Wis.2d at 556, 335 N.W.2d at 581.
Critical to the appellate issue is the following language from Hansen: “[I]n the interest of justice and
fundamental fairness, we adopt the discovery rule for all tort actions other
than those already governed by a legislatively created discovery rule.” Id. at 560, 335 N.W.2d at 583
(emphasis added).
2. Statutes of Limitations and Statutes of
Repose: A statute of limitations bars an action if the plaintiff does not file
suit within a set period of time from the date on which the cause of action
accrued; a statute of repose bars a suit a fixed number of years after an
action by the defendant (such as manufacturing a product), even if this period
ends before the plaintiff suffers any injury.
Leverence v. United States Fidelity & Guar., 158
Wis.2d 64, 92, 462 N.W.2d 218, 230 (Ct. App. 1990).
3. Section 893.37, Stats.: This statute
provides, “No action may be brought against an engineer or any land surveyor to
recover damages for negligence, errors or omission in the making of any survey
nor for contribution or indemnity related to such negligence, errors or
omissions more than 6 years after the completion of a survey.” The specific question before us is whether
the language of § 893.37 qualifies as a “legislatively created discovery
rule” such that it is exempt from the Hansen discovery rule.
The Case Law
We
first examine the relevant case law, although it will not resolve the issue.
In
Esser Distrib. Co. v. Steidl, 145 Wis.2d 160, 426 N.W.2d 62 (Ct.
App. 1988), aff'd, 149 Wis.2d 64, 437 N.W.2d 884 (1989), the court of
appeals considered whether the discovery rule applied to a claim of securities
fraud. The statute, § 551.59(5), Stats., 1981-82, was one of repose
since the limitations period began as of the date of the defendant's
conduct. It provided: “No action shall be maintained under this
section unless commenced before the expiration of 3 years after the act or
transaction constituting the violation.”
Id., see also Esser, 145 Wis.2d at
164, 426 N.W.2d at 64.
The
court of appeals declined to apply the discovery rule stating that “the plain
language of sec. 551.59(5) measures the time from the act or transaction, and,
as such, we consider it to be a legislatively created ‘non-discovery rule’
outside the reach of Hansen.” Esser,
145 Wis.2d at 170, 426 N.W.2d at 66.[1]
However,
in H.A. Freitag & Son, Inc. v. Bush, 152 Wis.2d 33, 447
N.W.2d 71 (Ct. App. 1989), the court of appeals reached a different result,
applying the discovery rule to a statute of repose reciting a limitations
period for an action in conversion. The
statute, § 893.51, Stats.,
provided in relevant part: “[A]n action
to recover damages for the wrongful taking, conversion or detention of personal
property shall be commenced within 6 years after the cause of action accrues or
be barred. The cause of action accrues
at the time the wrongful taking or conversion occurs, or the wrongful detention
begins.”[2]
The
court of appeals rejected the defendant's argument that the language of the
statute clearly barred the action because more than six years had passed since
the day of the taking. The court said,
“Because the statute of limitations for conversion or theft contains no rule of
discovery, but by its plain language would act to bar a claim before the party
owning the claim was aware of its existence, we find the judicially created
discovery rule found in Hansen applicable to this case.” H.A. Freitag, 152 Wis.2d at
37, 447 N.W.2d at 73. The H.A.
Freitag decision, however, did not discuss Esser.
Finally,
in Skrupky v. Elbert, 189 Wis.2d 31, 526 N.W.2d 264 (Ct. App.
1994), the court of appeals was asked to apply the discovery rule to the
deceptive advertising statute, § 100.18(11)(b)3, Stats. That statute,
again a statute of repose, stated: “No
action may be commenced under this section more than 3 years after the
occurrence of the unlawful act or practice which is the subject of the
action.” Section 100.18(11)(b)3; see
also Skrupky, 189 Wis.2d at 54, 526 N.W.2d at 273. The court held “[b]ecause Esser
considered and interpreted virtually identical statutory language to that found
here, the holding that Hansen does not apply is binding.” Skrupky, 189 Wis.2d at 56, 526
N.W.2d at 274. The Skrupky
decision, however, did not discuss H.A. Freitag.
It
is obvious that these cases are in sharp conflict. Esser and Skrupky support Bailey's
argument. H.A. Freitag
supports the Tomczaks' argument.
Ordinarily, when such a condition exists, we are free to follow those
cases which we conclude represent the better law. State v. Kuehl, 199 Wis.2d 143, 149, 545 N.W.2d
840, 842 (Ct. App. 1995). However, none
of these decisions were written on a clean slate. Rather, all stem from each court's interpretation of Hansen. Thus, our determination as to which line of
cases is correct turns on what Hansen really means. Therefore, our analysis will focus on Hansen,
not on the conflicting decisions which it has spawned.
The Hansen
Decision
Hansen adopted the discovery rule “for all tort actions other
than those already governed by a legislatively created discovery rule.” Hansen, 113 Wis.2d at 560, 335
N.W.2d at 583. Bailey argues that since
§ 893.37, Stats., is a
statute of repose, it necessarily constitutes a “legislatively created
discovery rule” within the meaning of Hansen. Although we agree that § 893.37 is a
statute of repose, we disagree with Bailey that this renders the statute's time
limitation a “legislatively created discovery rule.” We hold this for the following reasons.
First,
§ 893.37, Stats., does not
recite any “discovery” language. This
is significant because, despite the new ground broken by Hansen,
discovery principles were not unknown to Wisconsin law at the time of Hansen. Certain limitations statutes in existence at
that time already employed discovery principles. See, e.g., § 893.55, Stats., 1979-80 (governing certain medical malpractice
actions); § 893.925, Stats.,
1979-80 (governing actions for injuries related to mining).
We
have often observed that the legislature, when enacting statutes, is presumed
to do so with full knowledge and awareness of existing statutes. State ex rel. McDonald v. Douglas
County Cir. Ct., 100 Wis.2d 569, 578, 302 N.W.2d 462, 466 (1981). We have also observed that the legislature
is presumed to know the common law pronounced by the courts when it enacts a
statute. See In re D.M.M.,
137 Wis.2d 375, 389-90, 404 N.W.2d 530, 536 (1987). From this, it logically follows that the supreme court likewise
is aware of existing statutes on the same subject matter when it acts in its
law-declaring capacity. Thus, with
discovery statutes already in place, it follows that the supreme court had
these laws in mind when it specifically exempted “actions ¼ already governed by
a legislatively created discovery rule” from the new discovery rule. See Hansen, 113 Wis.2d
at 560, 335 N.W.2d at 583. If the court
had intended to exempt other statutes which did not recite discovery principles
or contain discovery language, it presumably would have done so. But it did not.
Second,
the supreme court's adoption of the discovery rule is premised on public policy
grounds. Hansen, 113
Wis.2d at 558, 335 N.W.2d at 582. This
policy seeks to avoid the “harsh result” produced when “the statutory period
for initiating an action may have partially, or in some instances totally,
expired before the claimant knows of the injury.” Id. at 555, 556, 335 N.W.2d at 580, 581. Whether a time limitation is set out in a
statute of limitations or a statute of repose, the limitation period
constitutes “a statutory period for initiating an action” under the language of
Hansen. The same harsh
result can occur under either type of statute.
Thus, the public policy concerns underpinning Hansen apply
with equal persuasion to statutes of repose.
We therefore disagree with Bailey that the issue turns on the fact that
§ 893.37, Stats., is a
statute of repose.[3]
Because
the language of § 893.37, Stats.,
contains no rule of discovery, we conclude that it falls under the Hansen
discovery rule. As such, we conclude
that H.A. Freitag represents the correct law because it correctly
interprets Hansen.
Although
the above discussion concludes and governs this case and results in our
affirming the trial court's order, we address an additional aspect of the trial
court's ruling with which we disagree.
The court distinguished H.A. Freitag from Esser
and Skrupky, noting that the conversion action in H.A.
Freitag was recognized by the common law, whereas the securities fraud
action in Esser and the deceptive advertising action in Skrupky
were statutory causes of action. Since
the negligence action here is recognized by the common law,[4]
the court saw this as a H.A. Freitag case.
While
we understand the distinction made by the trial court, we conclude that it does
not hold up under closer scrutiny for two reasons. First, that distinction would produce an uneven application of
the discovery rule. A statute which creates
a cause of action with an accompanying limitations period would be exempt from
the discovery rule. Yet, a similarly
worded limitations period governing a common law action would be governed by
the discovery rule. We question the
wisdom of such a result.
Second,
and more importantly, the supreme court's adoption of the discovery rule
applied to “all tort actions” except those already governed by a discovery
rule. See Hansen,
113 Wis.2d at 560, 335 N.W.2d at 583. A
tort is generally defined as “a civil wrong, other than a breach of contract,
for which the law will provide a remedy in the form of an action for
damages.” Koestler v. Pollard,
162 Wis.2d 797, 808, 471 N.W.2d 7, 11 (1991) (quoted source omitted). Our supreme court has held that a
statutorily created cause of action can qualify as a tort action. See, e.g., Johnson v. ABC Ins.
Co., 193 Wis.2d 35, 45, 532 N.W.2d 130, 133 (1995) (recognizing the
statutory action for wrongful death as an action in tort). The Hansen decision did not
draw any distinction between tort actions recognized by the common law and
those created by the legislature.
Instead, the court extended the discovery rule to “all tort
actions.” Hansen, 113
Wis.2d at 560, 335 N.W.2d at 583.
CONCLUSION
We affirm the trial
court's ruling that actions under § 893.37, Stats., are subject to the discovery rule adopted in Hansen. Therefore, we affirm the nonfinal order
denying Bailey's motion for summary judgment.
We remand for further proceedings.
By
the Court.—Order affirmed and
cause remanded.
[1] Although ruling
that Esser's statutory action for securities fraud was time barred, the court
of appeals also ruled that Esser's companion claim based on common law fraud
was not time barred. Esser
Distrib. Co. v. Steidl, 145 Wis.2d 160, 167, 426 N.W.2d 62, 65 (Ct.
App. 1988).
Esser did not
file a petition for review of the court of appeals ruling regarding his
statutory claim. Nor did he file a
cross-review petition following the respondent's petition for review of the
court of appeals holding regarding the common law action. See Rule
809.62(7), Stats. The supreme court accepted the respondent's
petition for review and affirmed the court of appeals decision that Esser
retained a common law action for fraud and that such action was timely. Esser Distrib. Co. v. Steidl,
149 Wis.2d 64, 437 N.W.2d 884 (1989).
However, the court never spoke to the timeliness of Esser's statutory
claim because that issue was not raised.
[2] The initial
clause in § 893.51, Stats.,
reads as if it is a statute of limitations since it speaks of commencing an
action within six years after the cause of action accrues. However, the statute goes on to define the
accrual date as the date of the wrongful act.
Thus, in the final analysis, the statute is one of repose since it
measures the limitation period from the time of the defendant's act.
[3] This approach
also avoids another potential problem.
In Funk v. Wollin Silo & Equip., Inc., 148 Wis.2d 59,
435 N.W.2d 244 (1989), the supreme court considered an equal protection
challenge to § 893.89, Stats.,
which provided in relevant part that no action for injury resulting from an
improvement to real property may be brought “more than 6 years after the
substantial completion of construction.
If the injury or defect occurs or is discovered more than 5 years but
less than 6 years after the substantial completion of construction, the time
for bringing the action shall be extended 6 months.” Section 893.89, 1991-92; see also Funk, 148
Wis.2d at 61 n.1, 435 N.W.2d at 245. While the court’s decision was grounded on equal protection
grounds, the court alluded “to the problem potentially posed when a litigant is
deprived of his cause of action before it has ‘accrued’¼.” Id.
at 77, 435 N.W.2d at 252. The court
noted that in effect the statute “abolishes a common law cause of action
because a person cannot, and should not, sue before he has reason to believe he
has been injured. And when he does
become aware of the tort inflicted upon him, it may already be too late.” Id. at 72, 435 N.W.2d at 250.