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COURT OF APPEALS DECISION DATED AND RELEASED November
29, 1995 |
NOTICE |
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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. 94-0595
STATE OF WISCONSIN IN
COURT OF APPEALS
DISTRICT II
FRW
CORPORATION,
a
Wisconsin corporation,
Plaintiff-Respondent-
Cross Appellant,
v.
CITY
OF NEW BERLIN,
a
municipal corporation,
Defendant-Appellant-
Cross Respondent.
APPEAL
and CROSS-APPEAL from a judgment of the circuit court for Waukesha County: ROGER MURPHY, Judge. Affirmed.
Before
Anderson, P.J., Brown and Snyder, JJ.
PER
CURIAM. The City of
New Berlin has appealed from a judgment awarding damages in the amount of
$85,770 to the respondent, FRW Corporation, pursuant to FRW's motion for
summary judgment. FRW has
cross-appealed from the portion of the trial court's judgment which denied its
request for prejudgment interest for the period before FRW filed a notice of
claim with the city.[1] We affirm the judgment in its entirety.
The
material facts of this case are undisputed.
FRW owned and operated a coin laundry and dry cleaning business in a
commercial building from 1969 to November 23, 1992. A second business was a tenant in the building. The city provided sewer service to the
building, but water was obtained from a private well. Sewer charges made by the city included a volumetric charge based
on readings from a water meter installed in the building prior to 1969. The meter measured the volume of water
discharged from the building into the sewer system.
FRW
paid all charges for sewer service to the building from January 1, 1981,
to November 23, 1992. On November 23,
1992, FRW sold the laundry and dry cleaning business. While the sale was pending, the purchaser examined the sewer
charges for the preceding years and expressed a belief that the flowage amounts
recorded by the water meter were greater than could be explained by the volume
of business being done in the building.
The water meter was subsequently tested on November 10, 1992. Tests showed the meter to be recording at an
average of 395% of the actual flowage.
On
December 23, 1992, and December 30, 1992, FRW filed notices of circumstances of
claim and a statement of relief sought with the city clerk pursuant to
§ 893.80(1)(a), Stats.,
seeking a refund of $85,670 for sewer service overcharges, plus $100 for the
cost of testing the meter. The city
disallowed the claims and this action was commenced.
Both
the city and FRW sought summary judgment.
When both parties move for summary judgment, it is equivalent to a
stipulation of facts permitting the trial court to decide the case on the
legal issues. Friendship Village
v. City of Milwaukee, 181 Wis.2d 207, 219, 511 N.W.2d 345,
350 (Ct. App. 1993). In reviewing a
trial court's grant of summary judgment, we apply the same standards as the
trial court. Id.
The
trial court determined that the city was liable to FRW for refunds of
overcharges on two alternative grounds.
The first ground was that the city's municipal code adopted rules of the
Wisconsin Public Service Commission which required the city to conduct periodic
testing of water meters, even when connected to private wells. The trial court concluded that the
overcharges were undetected because the city failed to conduct these required
periodic tests, necessitating repayment of the overcharges. The second basis for the trial court's award
was that the overcharges resulted in rates higher than those paid by other
users. The trial court agreed with
FRW's argument that this constituted unlawful discrimination and necessitated a
refund.
As
pointed out by FRW, on appeal the city challenges only the first basis for the
trial court's decision. In its
brief-in-chief and reply brief, the city neither mentions nor discusses the
trial court's determination that a refund was warranted based on unlawful rate
discrimination.
When
an appellant ignores a ground upon which the trial court relied in awarding
judgment and does not refute that ground on appeal, the proposition relied on
by the trial court is taken as confessed.
Schlieper v. DNR, 188 Wis.2d 318, 322, 525 N.W.2d 99, 101
(Ct. App. 1994). This is especially
true when, as here, the respondent raises the ground relied upon by the trial
court in its respondent's brief, and the appellant fails to address the
argument in its reply brief. Id. Because the city did not discuss or refute
the trial court's determination that a refund was warranted because FRW was
charged discriminatory rates, we affirm the award of a refund.
While
the city did not challenge the trial court's award of a refund based on
discriminatory rates, it contends that recovery is barred by
§ 893.80(1)(a), Stats. Section 893.80(1)(a) provides that, with
some exceptions which are not applicable here, no action may be brought or
maintained against a governmental subdivision unless within 120 days after the
happening of the event giving rise to the claim, a notice of the circumstances
of the claim is served on the governmental subdivision.
The
trial court set forth four bases for its conclusion that § 893.80(1)(a), Stats., did not bar FRW's action. One basis was that FRW filed a notice of
claim within 120 days of its discovery that the water meter was giving faulty
readings. In support of its conclusion
that the time for filing a notice of claim commenced with the discovery that
the meter was providing inaccurate readings rather than when the overcharges
occurred, the trial court cited Hansen v. A.H. Robins, Inc., 113
Wis.2d 550, 560, 335 N.W.2d 578, 583 (1983), which holds that tort claims
accrue when an injury is discovered or with reasonable diligence should have
been discovered, whichever occurs first.
The city contends that the trial court erred in applying the discovery
rule because this is a contract action and, pursuant to CLL Assocs. Ltd.
Partnership v. Arrowhead Pacific Corp., 174 Wis.2d 604, 617, 497 N.W.2d
115, 120 (1993), the discovery rule therefore does not apply.
We
reject the city's argument because this action is not a contract action. In reality, this action is one to recover a
utility overcharge based on provisions of a municipal ordinance and is neither
a contract action nor a tort action.
The
issue of whether the "happening of the event giving rise to the
claim" under § 893.80(1)(a), Stats.,
is the date an overcharge occurred or the date an overcharge was discovered has
not been addressed and resolved by existing Wisconsin case law. See Elkhorn Area Sch. Dist. v.
East Troy Sch. Dist., 110 Wis.2d 1, 6-7, 327 N.W.2d 206, 209 (Ct. App.
1982). Here, the trial court determined
that the discovery rule should apply to § 893.80(1)(a). Since the only basis set forth by the city
in its brief-in-chief for challenging this determination is the city's
claim that this is an action for breach of contract, and since that argument
clearly lacks merit, no basis has been shown for disturbing the trial court's
determination that the discovery rule is applicable and renders FRW's claim
timely. To hold otherwise would require
this court to raise and develop additional arguments not raised by the city as
a basis for challenging the trial court's decision. This we will not do. See
State v. Pettit, 171 Wis.2d 627, 647, 492 N.W.2d 633, 642 (Ct.
App. 1992).[2]
The
final issue before us is whether FRW is entitled to prejudgment interest, as
claimed in its cross-appeal. We agree
with the trial court that it is not.
Prejudgment
interest may be awarded when damages are either liquidated or measurable
against a reasonably certain standard. Pollack
v. Calimag, 157 Wis.2d 222, 242, 458 N.W.2d 591, 601 (Ct. App.
1990). However, it will not be awarded
when damages are determinable but "some other factor," other than a
denial of liability, prevents the defendant from determining the amount that
should be tendered. City of
Merrill v. Wenzel Bros., Inc., 88 Wis.2d 676, 697, 277 N.W.2d 799, 808
(1979).
The
most frequently stated rationale for the rule is that if the amount of damages
is either liquidated or determinable by reference to an objective standard, the
defendant can avoid the accrual of interest by tendering to the plaintiff a sum
equal to the amount of damages. Johnson
v. Pearson Agri-Systems, Inc., 119 Wis.2d 766, 771, 350 N.W.2d 127, 130
(1984). Whether prejudgment interest
may be awarded presents a question of law.
Pollack, 157 Wis.2d at 243, 458 N.W.2d at 601.
FRW
was awarded prejudgment interest commencing in December 1992, when the defect
in the water meter was discovered and its notice of claim was filed. The trial court denied prejudgment interest
on the overcharges made before that date on the ground that the city was
unaware of the defects in the meter until November 1992, and therefore damages
were not determinable before then.
We
agree with the trial court that the city's lack of knowledge of any overcharges
until late 1992 constituted "some other factor" which prevented the
city from determining an amount which could have been tendered as damages prior
to that date. In making this
determination, we reject FRW's argument that the defect in the meter and the
overcharges should have been detected by the city earlier because it was the
city's obligation to periodically test FRW's meter.
We
conclude that under the city ordinances, it was the duty of FRW rather than the
city to insure that the water meter was accurate.[3] The construction of ordinances under the
facts of record presents a question of law.
Hansman v. Oneida County, 123 Wis.2d 511, 514, 366 N.W.2d
901, 903 (Ct. App. 1985). We therefore
construe ordinances independently of the trial court. State v. Ozaukee County Bd. of Adjustment, 152
Wis.2d 552, 559, 449 N.W.2d 47, 50 (Ct. App. 1989).
The
rules governing interpretation of ordinances and statutes are the same. Id. Ordinances, like statutes, are to be construed to give effect to
their intent. County of Columbia
v. Bylewski, 94 Wis.2d 153, 168, 288 N.W.2d 129, 137 (1980). The intent of a given section must be
derived from the ordinance as a whole. Id.
We
will not look beyond the plain meaning of a statute or ordinance unless it is
ambiguous. Town of Hudson v.
Hudson Town Bd. of Adjustment, 158 Wis.2d 263, 270, 461 N.W.2d 827, 829
(Ct. App. 1990). An ordinance or part
of it is ambiguous if it is capable of being understood by a reasonably
well-informed person in more than one way.
Id.
Ambiguity
exists here because portions of the municipal code could be understood to
confer responsibility for checking water meters on the city, while portions
could be understood to confer this responsibility on a private well owner. Cf. id.; B.A.C.
v. T.L.G., 135 Wis.2d 280, 294, 400 N.W.2d 48, 55 (Ct. App. 1986). New
Berlin, Wis., Code § 13.02(3)(j) (1984) provides:
Each industrial user not served by the water utility
shall provide a meter which reflects, with reasonable accuracy, the quantity of
sewage to flow into the sanitary sewer from each of its ... buildings or
premises. This meter shall be provided
at user's expense.
By
obligating a private well owner to provide a meter which accurately reflects
the quantity of flowage into the municipal sewer, this provision could
reasonably be construed to require the owner to insure that the meter is
working properly, whether by testing or any other means it deems
appropriate. FRW, however, contends
that it was the responsibility of the city to periodically check the meter
pursuant to New Berlin, Wis., Code
§ 13.015 (1981). This provision is
part of the section of the municipal code governing the sewer utility and
provides that the sewer utility "shall be managed and operated by the
Utility Committee and respective utility manager in accordance with the
provisions of §§ 13.01(2) through 13.01(10) of this Code." New
Berlin, Wis., Code § 13.01(8)(b) (1981), in turn, adopts various
rules of the Wisconsin Public Service Commission, including Wis. Adm. Code § PSC 185.76, which
provides that "each utility shall observe" a specified test schedule
for "customer meters." New Berlin, Wis., Code §§ 13.01(2)
through 13.01(10) (1981) are part of the municipal code provisions regulating
the city water utility.
FRW
would construe New Berlin, Wis., Code
§ 13.02(3)(j) (1984) to mean that an industrial user not served by the
water utility must provide a meter which is accurate when installed, but need
not take steps to insure that its meter is accurate thereafter. We disagree. Nothing in the provision limits the industrial user's duty to
provide an accurate meter to the time of installation. Rather, the only reasonable construction is
that an industrial user who is not served by the water utility but releases
private well water into the sewer system is required to continuously provide an
accurate meter. Such a duty would
require that the user check and maintain the meter.
Admittedly,
New Berlin, Wis., Code
§ 13.015 (1981) gives rise to an ambiguity as to whether the intent of the
code was to require the sewer utility to check the flowage meters of all
utility users who release water into the sewer system, including those not
served by the water utility. However,
an established rule of statutory construction provides that the specific
language of a statute should govern over the more general unless the legislature
intended to make the general language controlling. B.A.C., 135 Wis.2d at 294, 400 N.W.2d at 55. Since New
Berlin, Wis., Code § 13.02(3)(j) (1984) speaks specifically to the
situation of an industrial user who is not served by the water utility but
discharges water into the sewer system, it is the more specific of the two
provisions as to the duty to provide an accurate meter. It therefore controls here.
Since
it was FRW's responsibility to insure that an accurate meter was being used to
measure water flowage into the sewer system and since it failed to fulfill this
duty and detect the overcharges until late 1992, the city is not liable for
prejudgment interest. The city did not
know, and had no reason to know, of the inaccuracies in the readings and the
overcharges until FRW notified it.
"Some other factor" thus prevented the city from tendering
damages prior to December 1992, and prejudgment interest was unwarranted.
By
the Court.—Judgment affirmed.
This
opinion will not be published. See
Rule 809.23(1)(b)5, Stats.
[1] The trial court
granted prejudgment interest for the period after December 1992, when a notice
of claim was filed by FRW. That award
has not been challenged on appeal.
[2] In its reply
brief, the city argues that FRW would have discovered the overcharges earlier
if it had exercised reasonable diligence.
It contends that this action therefore is barred even if the discovery
rule set forth in Hansen v. A.H. Robins, Inc., 113 Wis.2d 550,
560, 335 N.W.2d 578, 583 (1983), applies to § 893.80(1)(a), Stats.
We will not address this argument because it was raised by the city for
the first time in its reply brief. See
Hogan v. Musolf, 157 Wis.2d 362, 381 n.16, 459 N.W.2d 865, 873
(Ct. App. 1990), rev'd on other grounds, 163 Wis.2d 1, 471 N.W.2d 216
(1991), cert. denied, 502 U.S. 1030 (1992).